WEBVTT - UK’s Tax Cuts Trigger Crash 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.440 --> 0:00:07.280 Bloomberg quick takes, Tim Stanovick. We're here every day bringing 0:00:07.280 --> 0:00:09.799 you the latest news from the world of business and finance, 0:00:09.840 --> 0:00:13.640 plus technology, politics economics, all partnising the power of Business 0:00:13.640 --> 0:00:17.119 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:19.640 analyst in more than one and twenty countries. You can 0:00:19.640 --> 0:00:23.239 download Bloomberg Business Week at Itunes, soundcloud or Bloomberg Dot Com. 0:00:23.400 --> 0:00:25.160 You can also listen to our radio show at two 0:00:25.160 --> 0:00:28.360 PM eastern time on Bloomberg radio or watch us on Youtube. 0:00:28.400 --> 0:00:32.920 Search Bloomberg Clobal News. Well, Liz trush's government has set 0:00:32.960 --> 0:00:35.920 out the most radical package of tax cuts for the 0:00:36.040 --> 0:00:39.600 UK since nineteen seventy two, reducing levies both on worker 0:00:39.640 --> 0:00:41.839 pay and companies in an effort to boost the long 0:00:41.960 --> 0:00:45.199 term potential of the economy. The package is going to 0:00:45.240 --> 0:00:47.920 cost a hundred and sixty one billion dollars. It's aimed 0:00:47.920 --> 0:00:51.120 at stimulating the economy, but economists say that measures will 0:00:51.159 --> 0:00:53.880 add to inflation and debt. Very pleased with us this 0:00:53.920 --> 0:00:56.880 afternoon to have Philip Aldrich, senior UK economics reporter for 0:00:56.880 --> 0:01:00.280 Bloomberg News, joining us on the phone from London. Feel 0:01:00.320 --> 0:01:02.600 good to have you with us. Appreciate you staying up 0:01:02.680 --> 0:01:05.120 late on a Friday to join us on Bloomberg Business 0:01:05.120 --> 0:01:08.000 Week to lay out for us exactly what happened in 0:01:08.000 --> 0:01:10.520 exactly what's in this package and why markets are reacting 0:01:10.520 --> 0:01:13.680 the way they are. Yeah, so the big the big 0:01:13.720 --> 0:01:15.880 measures was a bunch of tax cuts. That we that 0:01:15.959 --> 0:01:18.520 we had some personal tax cuts Um. There was a 0:01:18.600 --> 0:01:21.720 surprise cut in the top rate of tax um for 0:01:21.760 --> 0:01:25.320 the wealthiest one percent of earners. We had a cut 0:01:25.319 --> 0:01:28.760 in the basic rate of income tax Um. There's also 0:01:28.840 --> 0:01:33.080 a change in payroll taxes and employers were given money 0:01:33.160 --> 0:01:37.600 off through corporation taxes and and also this this national 0:01:37.600 --> 0:01:40.920 insurance contribution tax cut. That there was also a tax 0:01:40.959 --> 0:01:44.919 cut on property transactions, and it was really quite an 0:01:44.959 --> 0:01:48.400 extraordinary sort of collection of tax cuts. And the idea 0:01:48.480 --> 0:01:51.520 was to accompany that with some with some sort of 0:01:51.560 --> 0:01:55.360 supply side reforms, these kind of these these regulatory deregulation 0:01:56.400 --> 0:01:59.440 agenda of the of the new government because of course, 0:01:59.440 --> 0:02:02.400 to be in power for about three weeks. So so 0:02:02.480 --> 0:02:04.920 what happens in a situation like this? I mean, you know, 0:02:05.680 --> 0:02:08.480 and not to not to totally show off my ignorance 0:02:08.520 --> 0:02:10.360 as an American, but with an understanding of how the 0:02:10.360 --> 0:02:13.200 British government works. If the prime minister says it is, 0:02:13.240 --> 0:02:17.640 so is it, so you've got to go so this. 0:02:17.639 --> 0:02:21.160 This will all go through the legislature. So, Um, much 0:02:21.160 --> 0:02:23.760 of this will have to have to be approved in law. 0:02:23.880 --> 0:02:27.600 So there will be votes on it. In reality, this 0:02:27.720 --> 0:02:31.520 trust has got a stalking majority in parliament, so the 0:02:31.520 --> 0:02:34.560 Tories will be able to get through everything she wants 0:02:35.000 --> 0:02:37.440 if they support her. But the problem is a lot 0:02:37.480 --> 0:02:40.760 of these policies because they're more of the libertarian wing 0:02:40.840 --> 0:02:43.640 of the Tory Party, Um, and that isn't, you know, 0:02:43.720 --> 0:02:46.680 the mainstream centrist part of the of the of the party. 0:02:46.760 --> 0:02:50.079 So she may face rebellion amongst her own truths, amongst 0:02:50.080 --> 0:02:53.200 her own MPs, but you know she will be these 0:02:53.400 --> 0:02:56.639 these tax cuts will be voted on and the regulatory 0:02:56.639 --> 0:03:00.400 reforms on planning and banking deregulation. They will be voted 0:03:00.440 --> 0:03:03.040 on and she's probably going to bathe more difficulty on 0:03:03.080 --> 0:03:06.040 the planning and the regulation stuff that she will on 0:03:06.040 --> 0:03:08.360 on the Finance Bill, which is the straightforward tax cuts. 0:03:08.360 --> 0:03:10.480 But you know, it's been a big, crazy day the 0:03:10.560 --> 0:03:13.040 markets have really reacted negatively to this. So you know, 0:03:13.960 --> 0:03:16.440 anything's on the table at the moment. Well, let's talk 0:03:16.480 --> 0:03:20.440 about what, at least George Saravellos of Geutsia Bank things 0:03:20.440 --> 0:03:23.080 should be on the table from the Bank of England. 0:03:23.080 --> 0:03:26.160 I got this note in my inbox earlier. The subject 0:03:26.240 --> 0:03:28.920 was what needs to be done and George Saravellos, he 0:03:29.120 --> 0:03:33.160 is currency strategists over at Geutsa Bank. He's calling for 0:03:33.240 --> 0:03:37.240 a quote large Inter meeting rate hike from the bank 0:03:37.320 --> 0:03:40.560 limp England as soon as next week. I was pretty 0:03:40.560 --> 0:03:43.440 surprised to see this. Philip, is there any chance of 0:03:43.440 --> 0:03:48.760 this actually happening? I doubt it. I don't think there 0:03:48.760 --> 0:03:51.400 would be. I mean, if it was, it would basically 0:03:51.400 --> 0:03:54.040 be a signal that, you know, a policy instetitions, a 0:03:54.120 --> 0:03:58.160 panicky Um. So I think it's unlike and he said 0:03:58.160 --> 0:04:01.680 that George was warning about Um, you know, the pound 0:04:01.760 --> 0:04:06.240 collapse a week or two ago and he was being dismissed. 0:04:06.240 --> 0:04:09.160 And then, of course, today we had three percent all 0:04:09.200 --> 0:04:12.800 and stirring against the dollar and that followed a series 0:04:12.800 --> 0:04:17.280 of other falls and the pounds fell below one dollar 0:04:17.520 --> 0:04:20.240 nine cents at one point, which is you know, astonishing. 0:04:20.240 --> 0:04:22.400 And you know people are now talking about parity with 0:04:22.480 --> 0:04:26.000 the dollar, which you know we we ta close to 0:04:26.040 --> 0:04:29.880 that in Um, you know, in the plaza. Of course 0:04:29.880 --> 0:04:32.880 stuff is happening, but the UH, you know, that would 0:04:32.920 --> 0:04:35.640 be absolutely astonishing, if you know, if we hit, if 0:04:35.640 --> 0:04:37.320 we hit parody with the dollar. But it doesn't look 0:04:37.560 --> 0:04:40.680 unfeasible any longer. Um. I don't think there will be 0:04:40.720 --> 0:04:46.120 an into, an into inter rate meeting, emergency rate hike, 0:04:46.760 --> 0:04:50.280 but you know, anything is possible at the moment. It's 0:04:50.040 --> 0:04:53.239 the marks. have been digesting this for for literally eight hours. 0:04:53.279 --> 0:04:57.600 So I think there would be some calmer responses next week. 0:04:58.360 --> 0:05:01.000 And is there any chance that you the trust government 0:05:01.040 --> 0:05:04.839 is looking at the widespread, uh just I don't even 0:05:04.839 --> 0:05:07.880 know what to call it, wildness in markets right now 0:05:08.040 --> 0:05:16.120 and rethinking at all? Uh. I would be hugely humiliating 0:05:16.279 --> 0:05:19.560 to have to rethink a policy after just a few hours. 0:05:20.160 --> 0:05:22.280 Actually quietly, quiet selling the chancellor who laid all of 0:05:22.360 --> 0:05:26.080 this stuff out. He Um, he did say that. You know, 0:05:26.160 --> 0:05:28.880 markets will do what they do. We're thinking for the 0:05:28.920 --> 0:05:32.360 longer term here. Um. So I don't think they were 0:05:32.400 --> 0:05:35.799 expecting a route the kind of massive self that we've seen, 0:05:36.120 --> 0:05:40.120 you know, sterling being guilt yields Um you know, rising 0:05:41.360 --> 0:05:45.359 where amongst the UK government broacasts are now amongst that 0:05:45.360 --> 0:05:48.640 that sort of euros own periphery, the Portuguese and Spanish 0:05:49.000 --> 0:05:51.560 government bond yields. So it doesn't it really doesn't look 0:05:51.560 --> 0:05:55.800 good at the moment. But the reason why they would 0:05:56.040 --> 0:05:58.960 reconsider things would be if there is an internal Tory 0:05:59.040 --> 0:06:01.919 rebellion and will not be based on the market reactions. 0:06:01.920 --> 0:06:03.960 That would be based on a calculation on their on 0:06:04.000 --> 0:06:09.400 their own elector elect electability in their constituencies, which will, 0:06:09.640 --> 0:06:11.599 you know, there will be poles about whether the whether 0:06:11.640 --> 0:06:14.200 these tax cuts for the super rich and non awful 0:06:14.279 --> 0:06:18.000 lot to the people on the incomes and that might 0:06:18.000 --> 0:06:21.080 not go down particularly well. Philip Aldric, really great to 0:06:21.120 --> 0:06:22.839 have you joined us this afternoon. Thank you so much 0:06:22.880 --> 0:06:26.320 that senior UK economics reporter Philip Aldrick joining us on 0:06:26.360 --> 0:06:29.960 the phone from London. This is Bloomberg Business Week with 0:06:30.040 --> 0:06:35.719 Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg radio. Well, 0:06:35.760 --> 0:06:38.880 in the new issue of Bloomberg Business Week magazine there's 0:06:38.920 --> 0:06:42.600 a story about social media companies. In fact, more than 0:06:42.680 --> 0:06:45.440 seventy lawsuits have been filed this year against such social 0:06:45.440 --> 0:06:48.200 media companies. We're talking about companies like Meta platforms, the 0:06:48.200 --> 0:06:51.280 company formerly known as Facebook, snap Tiktok, which is owned 0:06:51.320 --> 0:06:55.680 by byte dance, and Google, which owns YouTube. The lawsuits 0:06:55.680 --> 0:06:58.000 center on claims from adolescence and young adults who say 0:06:58.000 --> 0:07:01.599 they've suffered anxiety, depression, eating disorders and sleeplessness as a 0:07:01.640 --> 0:07:05.400 result of their addiction to social media. The story written 0:07:05.400 --> 0:07:09.159 by Joel Rosenblatt, legal reporter for Bloomberg News. Joel joining 0:07:09.240 --> 0:07:12.480 us this afternoon on the phone from San Francisco. Joel, 0:07:12.480 --> 0:07:14.360 good to have you with us. I gotta tell you 0:07:14.440 --> 0:07:17.240 reading this piece, the anecdotes at the top would make 0:07:17.280 --> 0:07:21.440 the stomach turn of really anyone, about kids who have 0:07:21.640 --> 0:07:26.200 died by suicide, kids who are addicted to social media. Um, 0:07:26.240 --> 0:07:29.960 I'm wondering, though, about liability here. Our social media companies 0:07:30.000 --> 0:07:35.840 reliable for what their users do? Well, thanks for having me. 0:07:36.240 --> 0:07:38.600 That's what these suits are going to get at and 0:07:38.680 --> 0:07:42.920 we're going to find out. The companies have, for a 0:07:43.080 --> 0:07:48.000 very long time, I mean decades now, stood behind a 0:07:48.160 --> 0:07:51.720 section to thirty of the Communications Decency Act, which holds 0:07:51.920 --> 0:07:54.800 that's a law that that provides. That showed. That says 0:07:54.960 --> 0:07:58.920 that the these companies can't be treated as a publisher 0:07:59.080 --> 0:08:04.040 or speaker of any information provided by or generated by 0:08:04.040 --> 0:08:06.960 a third party. So that you know, the argument being 0:08:06.960 --> 0:08:10.360 that these companies can't be held responsible for the content 0:08:10.920 --> 0:08:14.240 of what what what, what kids are seeing. So that's 0:08:14.240 --> 0:08:18.960 the big hurdle. Um, they have a novel argument. These 0:08:19.000 --> 0:08:21.680 lawsuits do. That's a little bit different from anything that 0:08:21.720 --> 0:08:23.440 I've seen and we can talk about that if you want, 0:08:23.480 --> 0:08:26.240 but that's that's the big question. That's the big hurdle. 0:08:26.880 --> 0:08:30.800 A live bility. Talk about that a little bit. Yeah, well, 0:08:30.840 --> 0:08:34.160 so the what they're doing. What's different about one student 0:08:34.200 --> 0:08:37.360 in particular that I write about is that they are 0:08:37.080 --> 0:08:40.960 they're targeting the algorithms that these companies are using and 0:08:41.000 --> 0:08:43.840 so instead of saying, Oh, this content is what created 0:08:43.840 --> 0:08:48.319 the problem or created the depression or or problems, it's 0:08:49.040 --> 0:08:52.560 the algorithms that you've designed, that you Meta have designed 0:08:52.760 --> 0:08:55.960 intentionally to Hook my kids to your platform, and so 0:08:56.040 --> 0:08:59.800 it's not the other users who've posted this or interacting 0:08:59.840 --> 0:09:02.640 with with people that way, it's it's the algorithm. What 0:09:02.720 --> 0:09:07.560 the Algorithm is actually serving to these kids exactly, and 0:09:07.800 --> 0:09:10.840 they claim is that it's designed intentionally that way, you know, 0:09:10.960 --> 0:09:13.760 by those companies, to keep them hooked and down this 0:09:13.840 --> 0:09:16.680 kind of spiral, are these holes of information that take 0:09:16.720 --> 0:09:19.600 them to these dark places. Okay, well, you make a 0:09:19.720 --> 0:09:22.880 parallel to cigarettes in here, and I want to bring 0:09:22.880 --> 0:09:26.360 in Katie Greifeld, my co anchor here, because, and this 0:09:26.440 --> 0:09:29.240 is I mean in all seriousness, when she had covid, 0:09:29.520 --> 0:09:33.280 she came back from from covid and said, you said, Katie, 0:09:33.280 --> 0:09:36.080 that you had fallen into this Tiktok hole about and 0:09:36.080 --> 0:09:38.640 and had talked about how well the algorithm got to 0:09:38.679 --> 0:09:40.680 know you and like, served you content that you would 0:09:40.720 --> 0:09:43.640 just eat up. It's actually a joke on tiktok. When 0:09:43.880 --> 0:09:47.079 really specific videos go viral, all the comments are to 0:09:47.160 --> 0:09:50.120 the effect of the Algorithm knows me too well, and 0:09:50.160 --> 0:09:52.440 people joke all the time that I'm so glad that 0:09:52.480 --> 0:09:54.800 social media wasn't around when I was younger. I have 0:09:54.880 --> 0:09:57.600 to say I am so glad that Tiktok was not 0:09:57.679 --> 0:10:00.160 around when I was younger. But, Joe, I'm curious to 0:10:00.200 --> 0:10:02.880 hear about what some of the law professors that you 0:10:02.920 --> 0:10:05.480 spoke to for this piece are saying in terms of 0:10:05.520 --> 0:10:10.400 the social media companies defenses. Well, I it's kind of 0:10:10.400 --> 0:10:14.440 a split. I mean mostly you have law professors, Uh 0:10:14.920 --> 0:10:18.000 Eric Goldman is is one in particular, is really expert 0:10:18.040 --> 0:10:21.440 in this area at Santa Clara University, who points out 0:10:21.480 --> 0:10:24.839 that the section to thirty defense is just going to 0:10:24.960 --> 0:10:30.000 be too difficult to get over explain. Because, yeah, the 0:10:30.320 --> 0:10:33.400 section to is the is the Communications Decency Act that 0:10:33.400 --> 0:10:35.560 we talked a little bit before, which they just say, 0:10:35.640 --> 0:10:38.920 they're just saying we're not responsible for the content. We can't, 0:10:38.920 --> 0:10:41.439 we can't be held reliable for the content. We're just delivering. 0:10:41.679 --> 0:10:44.400 We're just a delivery service, you know, we're just giving 0:10:44.400 --> 0:10:47.280 you the platform and we're we can't be held liable 0:10:47.320 --> 0:10:50.080 as the publisher or speaker of the content that you're seeing. 0:10:50.600 --> 0:10:53.800 So He's saying that that's, first of all, just a 0:10:53.920 --> 0:10:57.800 huge problem for these lawsuits. The second problem is that 0:10:57.920 --> 0:11:01.720 Professor's point out is that you can't you can't just 0:11:01.800 --> 0:11:06.880 point to Um, social media as a problem alone. In 0:11:06.920 --> 0:11:10.720 other words, isolating social media as the cause of depression, 0:11:10.720 --> 0:11:14.520 anxiety or even suicide is just too difficult. Let's take 0:11:14.559 --> 0:11:16.920 any number of things including, say, you know, the fact 0:11:16.920 --> 0:11:20.360 that the planet is melting there's all kinds of reasons 0:11:20.400 --> 0:11:24.000 that kids are suffering from from anxiety, and just to 0:11:24.160 --> 0:11:28.920 isolate social media. It's going to prove difficult. Many think, well, 0:11:29.000 --> 0:11:31.600 let's go through some historical parallels here that you touch 0:11:31.679 --> 0:11:34.040 on in your peace job. If we think about the 0:11:34.080 --> 0:11:38.680 way that auto manufacturers have been not necessarily held liable, 0:11:38.720 --> 0:11:41.640 but the public, public campaigns against them by Ralph Nader, 0:11:41.679 --> 0:11:44.320 for example, of perhaps the nineteen nineties. When it comes 0:11:44.320 --> 0:11:47.760 to tobacco companies, I mean I recall those tobacco executives 0:11:47.760 --> 0:11:51.600 sitting there and testifying in front of Congress Um. What 0:11:51.800 --> 0:11:54.480 can how does that paint some sort of picture about 0:11:54.520 --> 0:11:56.840 what could happen with social media companies, or does it? 0:11:56.880 --> 0:12:00.200 Is that accurate? Well, I think again, we kind come 0:12:00.280 --> 0:12:02.480 up with with you know, we'll see what the courts decide, 0:12:02.520 --> 0:12:05.559 because it's there's two there's at least two arguments. One 0:12:05.640 --> 0:12:08.520 is that again, these suits are pointing to the algorithm 0:12:08.520 --> 0:12:11.959 as a kind of almost identifying it as a product, Um, 0:12:12.080 --> 0:12:14.840 so pointing, pointing not to the effects so much but 0:12:14.920 --> 0:12:19.000 as this particular product that they've designed that's, you know, 0:12:19.240 --> 0:12:24.080 to follow the analogy defective Um. So that's, you know, 0:12:24.280 --> 0:12:27.600 right that's the kind of logic there. On the other hand, 0:12:27.640 --> 0:12:30.680 if you say let's follow the analogy of the of 0:12:30.760 --> 0:12:33.640 the tobacco suits. In the tobacco cases, I remember one, 0:12:34.040 --> 0:12:37.240 one particular part that was very compelling. There was that 0:12:37.559 --> 0:12:41.040 the tobacco companies were adding ammonia to to the tobacco. 0:12:41.040 --> 0:12:43.240 I don't know if you remember that, and you could 0:12:43.280 --> 0:12:46.720 point to them knowing that it caused cancer and knowing 0:12:46.760 --> 0:12:50.800 that this particular chemical reaction would would cause addiction and 0:12:50.880 --> 0:12:55.600 cause cancer. I think a problem there for these lawsuits 0:12:55.640 --> 0:12:59.120 is that that's a particular health consequence. You know, you 0:12:59.160 --> 0:13:04.040 could pinpoint cancer as a medical you know, scientifically a cancer, 0:13:04.080 --> 0:13:07.680 a cancer, a disease that's caused by this product. Again, 0:13:07.760 --> 0:13:11.600 harder to do that with social media, if not impossible. 0:13:11.920 --> 0:13:14.199 We'll find out. Are there, you know, just in the 0:13:14.280 --> 0:13:16.200 last forty seconds that we have with you, are there 0:13:16.240 --> 0:13:19.840 any uh proven health claims that can be tied to 0:13:19.960 --> 0:13:21.760 social media at this point the same way that that 0:13:21.920 --> 0:13:24.600 we can tie them to cigarettes? Well, I'm glad that 0:13:24.640 --> 0:13:27.000 you raise that because one, because one of the suits 0:13:27.000 --> 0:13:32.080 that I'm following closely points to the testimony of Francis Hogan, 0:13:32.520 --> 0:13:38.760 who you may recall testified to Congress about Meta, knowing 0:13:39.120 --> 0:13:43.559 that instagram was causing um all kinds of anxiety with 0:13:43.559 --> 0:13:47.040 with girls in particular, around their body image and so 0:13:47.160 --> 0:13:50.280 and they in her when it was they knew it 0:13:50.320 --> 0:13:53.360 and perpetuated this and are still using it and profiting 0:13:53.400 --> 0:13:56.600 from it. Joel Rosen, black legal reporter for Bloomberg News, 0:13:56.679 --> 0:13:58.600 joining us on the phone from San Francisco. Check out 0:13:58.679 --> 0:14:01.360 his story. It's in the current show of Bloomberg Business 0:14:01.360 --> 0:14:04.240 Week magazine. It's available now on newsstands and at Bloomberg 0:14:04.280 --> 0:14:09.080 Dot Com. You're listening to Bloomberg Business Week with Carol 0:14:09.160 --> 0:14:13.600 Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg radio. 0:14:14.040 --> 0:14:16.840 Let's turn to Crypto now and welcome in Danelle Dixon. 0:14:16.920 --> 0:14:21.560 She is CEO and Executive Director of the Stellar Development Foundation. 0:14:21.640 --> 0:14:25.840 It's a nonprofit organization founded in to support the development 0:14:25.840 --> 0:14:28.800 and growth of the open source stellar network. She joins 0:14:28.840 --> 0:14:31.960 us on the phone from San Francisco. Dinnell, great to 0:14:32.040 --> 0:14:34.840 have you with us. Just about a week ago you 0:14:35.040 --> 0:14:38.760 testified in front of the Senate Agriculture Committee. That hearing 0:14:38.960 --> 0:14:42.960 specifically was focused on the Digital Commodities Consumer Protection Act. 0:14:43.080 --> 0:14:45.840 That of course it's a bill focused on the CFCC's 0:14:46.240 --> 0:14:49.440 role in regulating the crypto markets. I feel like that's 0:14:49.440 --> 0:14:54.040 a big question. Which of the acronyms actually has oversight 0:14:54.080 --> 0:14:57.120 over the CRYPTO market? Yeah, thank you so much for 0:14:57.160 --> 0:14:58.960 having me again. Yeah, that is a big question, but 0:14:58.960 --> 0:15:00.280 I think that what we're gonna find. I and just 0:15:00.400 --> 0:15:02.560 that both of them, and I think you're referring to 0:15:02.560 --> 0:15:04.760 the SEC and the CFTC, are going to have a 0:15:04.840 --> 0:15:07.560 role and I think what we talked about last week 0:15:07.600 --> 0:15:10.520 with respect of this legislation was that it is really 0:15:10.920 --> 0:15:14.040 wonderful and empowers the CFTC with the authority that it 0:15:14.080 --> 0:15:17.240 needs to regulate the spot market for digital commodities and 0:15:17.280 --> 0:15:19.440 it provides a lot more clarity to the industry than 0:15:19.480 --> 0:15:22.480 we previously had. So it's bipartisan, which we love to see, 0:15:22.920 --> 0:15:26.200 and it's continued reinforcement that Crypto is not an issue 0:15:26.200 --> 0:15:29.160 that's divided by politics and that everyone is invested in 0:15:29.160 --> 0:15:31.360 it and they have to get this right. So I 0:15:31.360 --> 0:15:32.920 think we're going to see a lot more clarity if 0:15:32.960 --> 0:15:36.000 we see bills like this one come through the house 0:15:36.040 --> 0:15:39.440 and the Senate. What are the stakes here? The stakes 0:15:39.440 --> 0:15:41.680 are pretty high in terms of. Really what we want 0:15:41.720 --> 0:15:43.920 to see is a lot more players in the existing 0:15:43.960 --> 0:15:48.240 financial infrastructure come into the CRYPTO and blockchain space, because 0:15:48.240 --> 0:15:50.320 it really like what we focused on is payments and 0:15:50.360 --> 0:15:53.280 cross port remittances. We need to see stable coins. We 0:15:53.320 --> 0:15:55.280 think we need to see other players that are involved 0:15:55.280 --> 0:15:58.120 in those kinds of payments be participate in this, and 0:15:58.160 --> 0:16:00.080 I think that it not only gives clarity to the 0:16:00.120 --> 0:16:03.400 existing ecosystem, but it gives a lot more clarity to 0:16:03.840 --> 0:16:06.800 others who might want to participate but they're concerned because 0:16:06.800 --> 0:16:11.280 of the regulatory environment. How I'm trying to think of 0:16:11.320 --> 0:16:13.240 the word that I want to use, but I mean, 0:16:13.280 --> 0:16:18.000 how receptive are the lawmakers, specifically at last week's hearing, 0:16:18.080 --> 0:16:22.680 and other lawmakers that you speak with about the crypto industry? 0:16:22.680 --> 0:16:25.440 I feel like it's had some real black eyes, especially 0:16:26.280 --> 0:16:28.800 over the past few months, a lot of high profile 0:16:29.480 --> 0:16:31.760 blow ups. Do you think that's sort a bit of 0:16:32.040 --> 0:16:37.680 skepticism or mistrust along some of the potential regulators? Well, 0:16:37.720 --> 0:16:39.360 I think, and I think it's a great point to 0:16:39.400 --> 0:16:41.880 focus on, because I think that any industry that's new, 0:16:42.240 --> 0:16:44.200 you're going to have like thirty steps forward and then 0:16:44.240 --> 0:16:46.200 twenty steps back and you're going to have to climb 0:16:46.240 --> 0:16:47.760 your back, your way back to the spot that you 0:16:47.760 --> 0:16:50.520 were before, and I think what we saw over in 0:16:50.560 --> 0:16:53.000 the early days of the summer with respect to those 0:16:53.000 --> 0:16:55.400 algorithmic table coins and what happened with respect to the 0:16:55.440 --> 0:16:58.840 market there Um will really actually change a lot if 0:16:58.840 --> 0:17:01.880 we can get the focus to create stable coin legislation 0:17:01.920 --> 0:17:04.159 that makes it clear about a definition of what stable 0:17:04.160 --> 0:17:06.160 coins are, because that's a lot of what we saw. 0:17:06.200 --> 0:17:07.639 There was a lot of leverage in the market. I've 0:17:07.640 --> 0:17:10.000 had little to do with the infrastructure and more to 0:17:10.040 --> 0:17:13.080 do which is leverage. So if we see clarity around this, 0:17:13.200 --> 0:17:14.479 I think that we're going to see more and more 0:17:14.520 --> 0:17:18.160 lawmakers want to participate here right now, and particularly last week, 0:17:18.200 --> 0:17:21.200 there's so much support within the Senate, Senate Ad Committee, 0:17:21.359 --> 0:17:24.080 because they are truly a bipartisan committee that works together. 0:17:24.440 --> 0:17:26.840 So we saw a lot of really good conversation and 0:17:26.840 --> 0:17:29.960 a lot of really good inclusion about this particular uh, 0:17:30.119 --> 0:17:33.760 this the bill itself, but also just the industry, and frankly, 0:17:33.800 --> 0:17:35.560 I think we're seeing that across the board, even on 0:17:35.600 --> 0:17:38.080 the house side. So I feel really good and I 0:17:38.400 --> 0:17:41.280 think the promise of not just this legislation but we 0:17:41.359 --> 0:17:44.520 hear that there's also potentially stable coin legislation that could 0:17:44.520 --> 0:17:46.679 be brought together, and I think that could be that 0:17:46.720 --> 0:17:50.040 could come together also in a bipartisan fashion, so it'll 0:17:50.080 --> 0:17:53.800 really move the industry forward and create again that regulatory clarity. 0:17:53.880 --> 0:17:56.120 We all need it. One of the things that we 0:17:56.320 --> 0:17:58.440 hear a lot from the SEC is that the how 0:17:58.440 --> 0:18:00.600 we test, which is the one that defines that security, 0:18:00.680 --> 0:18:03.600 is it's clear. And, frankly, if it was clear, we 0:18:03.600 --> 0:18:05.600 wouldn't be in a situation right now of trying to 0:18:05.640 --> 0:18:07.840 gain more clarity. So I think that we all really 0:18:07.880 --> 0:18:09.520 want to see that happen and you know, we heard 0:18:09.680 --> 0:18:13.280 the big banks CEOS testify earlier this week and we won. 0:18:13.359 --> 0:18:15.439 One part that stuck out to me was what Jamie diamond, 0:18:15.440 --> 0:18:19.399 the CEO of JP Morgan Chase, said. Uh, he called 0:18:19.640 --> 0:18:23.520 Digital Tokens decentralized Ponzi scheme and even bitcoins specifically. He 0:18:23.560 --> 0:18:26.199 had some choice words for it. It's it kind of 0:18:26.200 --> 0:18:28.360 sticks with what he said in the past. Um, I'm 0:18:28.359 --> 0:18:29.879 wondering what you thought of when you when you heard 0:18:29.960 --> 0:18:33.320 him say that. Well, it wasn't new in terms of again, like, 0:18:33.359 --> 0:18:34.879 as you said, we've heard this in the past and 0:18:34.880 --> 0:18:36.520 I think part of the job that we have as 0:18:36.560 --> 0:18:40.240 industry is to really create a lot of educational materials 0:18:40.320 --> 0:18:43.080 and to really gain the focus and the attention of 0:18:43.119 --> 0:18:45.680 folks around the good things that are happening in with 0:18:45.720 --> 0:18:48.359 respect to blockchain and crypto. You know, on stellar we 0:18:48.440 --> 0:18:52.440 see a lot of really big promise and execution when 0:18:52.440 --> 0:18:54.840 we see the use of stable coins in payments. We 0:18:54.880 --> 0:18:57.399 have a relationship with moneygram where you can turn cash 0:18:57.440 --> 0:19:02.000 into crypto in four locations globally, and this really reaches 0:19:02.000 --> 0:19:04.400 the unbanked and the underbank and so I think if 0:19:04.400 --> 0:19:06.560 we really talk about what the good things that are 0:19:06.560 --> 0:19:09.600 happening in the CRYPTO and blockchain industry, it actually will 0:19:09.600 --> 0:19:12.800 help move that conversation away to talking about things like 0:19:12.800 --> 0:19:16.280 pondy schemes, because I think that you know, when any time, 0:19:16.280 --> 0:19:18.679 when you have a new piece of technology, there's going 0:19:18.720 --> 0:19:20.760 to be a lot of criticism and potential concern of 0:19:20.800 --> 0:19:23.040 it and we really need to get to the discussion 0:19:23.040 --> 0:19:25.960 around use cases, which will kind of obliterate that message. 0:19:26.640 --> 0:19:30.080 And now really quickly. We have about thirty seconds or so, 0:19:30.080 --> 0:19:33.000 but you've said clarity a few times and we need clarity. 0:19:33.320 --> 0:19:36.159 WHO NEEDS CLARITY. Is it just the industry or is 0:19:36.200 --> 0:19:40.600 it traditional finance, Trad Five, as well? Yeah, I know, 0:19:40.680 --> 0:19:43.400 I love that. Trad Fi um. That's another, another word 0:19:43.440 --> 0:19:45.000 that we like to hear. I think it's everybody. We 0:19:45.040 --> 0:19:47.520 all need clarity to bring Trad fit in so that 0:19:47.560 --> 0:19:50.800 we can actually really make this this technology work in 0:19:50.840 --> 0:19:53.000 the way that it should, which is in coordination with 0:19:53.080 --> 0:19:55.919 traditional finance, to really bring to the masses, uh, the 0:19:55.960 --> 0:19:59.080 opportunity that exists with watching. All right, you know, we're 0:19:59.080 --> 0:20:01.439 going to have to leave it there. Tonal Dixon, CEO 0:20:01.600 --> 0:20:05.400 and Executive Director of the Stellar Development Foundation, joining us 0:20:05.560 --> 0:20:09.440 this afternoon on the phone from the bay area. I'm 0:20:12.880 --> 0:20:16.359 a journal Yeah, but you let me drive. Oh No, 0:20:16.359 --> 0:20:22.760 no, no no, no, please, I'll do bride gravel. I want 0:20:22.760 --> 0:20:31.399 to drive. It's good question. This is the drive to 0:20:31.480 --> 0:20:38.080 the globe on Bluebird radio. All right, it's that time. 0:20:38.119 --> 0:20:40.000 We are less than ten minutes away from the close 0:20:40.040 --> 0:20:42.520 of Equity Trading here on this Friday afternoon. What a 0:20:42.600 --> 0:20:44.560 day it's been, what a week it has been. The 0:20:44.640 --> 0:20:46.760 SMP five hunded off of its lowest but still down 0:20:46.840 --> 0:20:51.280 about two in the SP five, energy by far the 0:20:51.359 --> 0:20:54.840 worst performing sector down close to seven percent this after 0:20:55.040 --> 0:20:58.000 we saw that w t I fell below eighty dollars 0:20:58.000 --> 0:21:01.119 for the first time since January. Let's get into it 0:21:01.320 --> 0:21:04.080 and specifically energy. We do that with Ben Cook, portfolio 0:21:04.119 --> 0:21:08.000 manager at Hennessy Midstream and energy transition funds. Ben Joining 0:21:08.040 --> 0:21:10.640 us on the phone from Dallas, Texas this afternoon. Ben, 0:21:10.640 --> 0:21:13.600 How are you? I'm doing well. Thanks, how are you? 0:21:13.680 --> 0:21:15.760 Thanks for having me, by the way. Yeah, we're really 0:21:15.760 --> 0:21:17.320 glad to have you, especially on a day like today, 0:21:17.359 --> 0:21:20.239 because we definitely want to talk energy. What's going on 0:21:20.240 --> 0:21:21.679 in the energy market? I mean it is just just 0:21:21.720 --> 0:21:25.439 flashing recession fear all over you know, I think it is. 0:21:25.600 --> 0:21:28.679 I think you know, the prospect of monetary tightening around 0:21:28.680 --> 0:21:31.679 the world is leading to a view that we're going 0:21:31.720 --> 0:21:34.280 to have to see some slowdown and economic activity or 0:21:34.280 --> 0:21:37.879 worser recession, and I think that's added to fears with 0:21:38.040 --> 0:21:42.400 China's zero covid lockdown policy, which has had a material 0:21:42.440 --> 0:21:46.640