WEBVTT - Tech, FTX, and Consumer Strength (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 --> 0:00:22.080 at Bloomberg dot com slash podcast. We want to go 0:00:22.239 --> 0:00:25.919 deep into technology critic because I mean, tech is you know, 0:00:26.000 --> 0:00:28.480 just It's been a leader for this market for as 0:00:28.480 --> 0:00:31.680 long as I can remember, almost and my question is 0:00:32.479 --> 0:00:34.680 as we come out of this, is tech going to 0:00:34.720 --> 0:00:36.800 be a leader going forward as a sector. We had 0:00:36.840 --> 0:00:39.600 some week numbers of a week or than expected numbers 0:00:39.600 --> 0:00:41.720 I guess we would say across the tech sector over 0:00:41.760 --> 0:00:45.600 this past earning periods. Let's dive deep into tech. Let's 0:00:45.720 --> 0:00:47.519 round table this and we're gonna do it for a 0:00:47.600 --> 0:00:50.120 couple of segments. Here, Dan, I've senior equity ANALYSTO web 0:00:50.120 --> 0:00:53.880 Bush Securities. Uh joins us here very casual attire. I 0:00:53.920 --> 0:00:57.400 will point out Uh and Man Deep Sing Bloomberg Intelligence 0:00:57.400 --> 0:00:59.960 Senior Tech analyst. Uh. They're both joining us here in 0:01:00.000 --> 0:01:02.279 Bloomberg Interactive Broker Studio, which is good, so we can 0:01:02.320 --> 0:01:05.080 just kind of bat it around for a while. So damn, 0:01:05.080 --> 0:01:06.800 You've been in this business a long time as self 0:01:06.800 --> 0:01:09.120 side analysts, you've been one of the leading voices in 0:01:09.920 --> 0:01:13.240 promoting technology on Wall Street. How do you think about 0:01:13.240 --> 0:01:15.399 this tech sector going forward? I mean over the last 0:01:15.520 --> 0:01:17.600 I would say, since the Great Financial Crisis, it's been 0:01:17.600 --> 0:01:21.240 a leader in this marketplace in terms of stock performance. 0:01:21.440 --> 0:01:23.640 How about the next ten years? Look, I think the 0:01:23.720 --> 0:01:26.920 hyper growth story in tech, I mean the clock struck midnight, 0:01:26.920 --> 0:01:29.120 and I think that's why you're seeing layoffs from Amazon 0:01:29.240 --> 0:01:31.959 to Meta and others. But my view is that you're 0:01:32.000 --> 0:01:34.759 gonna have trillions spent in what I used the Fourth 0:01:34.800 --> 0:01:38.520 Industrial Revolution, and that's not ending because of this recession 0:01:38.560 --> 0:01:41.600 next three to six months. So my view is, especially 0:01:41.640 --> 0:01:46.120 on high quality tech, this is more of a fourth 0:01:46.240 --> 0:01:49.360 fifth inning rather than the eighth ninth inning in terms 0:01:49.360 --> 0:01:51.440 of attack, and I think that's why we've been bullish 0:01:51.480 --> 0:01:53.800 on it, you know, even as we go, you know, 0:01:53.840 --> 0:01:57.120 into year into two thousand and twenty three, in terms 0:01:57.120 --> 0:02:00.320 of where we are in the cycle. Mandyp hop on 0:02:00.360 --> 0:02:02.320 in here because I think when I look at tech, 0:02:02.360 --> 0:02:05.600 I mean, it's such a broad sector naturally we think 0:02:05.640 --> 0:02:08.400 of the metas the Amazons and Microsoft, But then there's 0:02:08.440 --> 0:02:10.480 kind of this other lens of chips, and it feels 0:02:10.520 --> 0:02:13.560 like chips are kind of this magnified response of tech, 0:02:13.639 --> 0:02:15.280 and you have the chip equipment makers, which are an 0:02:15.280 --> 0:02:19.400 even bigger magnified response. Are all of these spheres of 0:02:19.440 --> 0:02:22.600 tech on the same page right now? Well, so think 0:02:22.639 --> 0:02:25.440 of you know where the spend is going when it 0:02:25.480 --> 0:02:30.120 comes to topics. So all these companies you mentioned, Meta, Amazon, Alphabet, 0:02:30.240 --> 0:02:33.480 they're spending you know, thirty forty billion dollars fifty billion 0:02:33.520 --> 0:02:36.639 dollars a year on topics. Where is that spend going 0:02:36.680 --> 0:02:39.360 in terms of building data center? In fact, n video 0:02:40.120 --> 0:02:42.800 like you look at their data center growth, they have 0:02:42.919 --> 0:02:46.600 gone from almost nothing to fifteen billion dollar run rate 0:02:46.639 --> 0:02:49.920 in a span of five years. That's phenomenal for a 0:02:50.000 --> 0:02:52.720 chip company. And so that gives you a sense of 0:02:53.080 --> 0:02:56.600 where the next leg of investments will be. Is it 0:02:56.639 --> 0:02:59.559 will be an AI and you know, building cloud capacity 0:03:00.160 --> 0:03:02.800 and and chips is at the forefront. That's why there's 0:03:02.800 --> 0:03:05.880 so much geopolitical tension around chips, you know, the China 0:03:06.000 --> 0:03:09.360 US aspect of it. And I think you just can't 0:03:09.400 --> 0:03:11.360 take that out of the equation. Even if you're in 0:03:11.400 --> 0:03:14.600 a downturn, when we come out of it, the focal 0:03:14.680 --> 0:03:18.480 point will still be semiconductors, AI, machine learning, cloud. These 0:03:18.520 --> 0:03:20.880 are the trends. So you have job securities what you're 0:03:20.880 --> 0:03:24.000 telling me, I hope. So alright, hey, then you know 0:03:24.160 --> 0:03:26.240 talk to us. You know, I need to get into 0:03:26.639 --> 0:03:29.440 this story here, this whole Elon Musk Twitter thing. I'd 0:03:29.440 --> 0:03:30.960 love to get your opinion here because you've been on 0:03:31.560 --> 0:03:34.200 top of the Tesla story since day one, Elon Musk 0:03:34.280 --> 0:03:38.000 since day one, And what do you make of Elon 0:03:38.360 --> 0:03:42.480 and Tesla has has his you know, efforts at Twitter 0:03:42.680 --> 0:03:44.840 change your view of Tesla as a company, as a 0:03:44.920 --> 0:03:47.960 stock and Elon as as an owner. Look, I mean 0:03:48.040 --> 0:03:51.560 I think it's been a circus show, you know, as 0:03:51.840 --> 0:03:53.880 we've all seen. And I think there was a view 0:03:54.000 --> 0:03:59.200 as a Tesla holder that once Must finally bought Twitter 0:03:59.320 --> 0:04:02.560 and ultimately was forced into because he knew legally he 0:04:02.680 --> 0:04:04.480 was gonna have to win it one way or another, 0:04:05.120 --> 0:04:08.000 that it would start to die down in terms of 0:04:08.280 --> 0:04:11.520 just this horror show that continues to play out. But 0:04:11.600 --> 0:04:13.960 instead it hasn't right. I mean, since he's bought it, 0:04:13.960 --> 0:04:16.120 it's kind of been a train wreck situation. He's trying 0:04:16.160 --> 0:04:19.840 to turn around. You know what's really been a treadmill 0:04:20.040 --> 0:04:24.600 Stock and Company for years. He's not someone culturally that's 0:04:24.600 --> 0:04:28.360 gonna be playing ping pong in the Twitter cafeteria or 0:04:28.640 --> 0:04:31.960 you know, doing parties on the rooftop. And I think 0:04:32.000 --> 0:04:35.000 now as a testa investor, you want to see him 0:04:35.040 --> 0:04:39.120 give reins to others that ultimately could operate social media 0:04:39.400 --> 0:04:42.679 because in terms of Tessa, forget the selling of the stock. 0:04:43.520 --> 0:04:46.599 Musk is the gold standard. That's why Tessa trades where 0:04:46.600 --> 0:04:49.520 it is. There's key man risk, we'll call it. You 0:04:49.520 --> 0:04:53.280 don't want to see his attention focus too much on 0:04:53.320 --> 0:04:55.680 Twitter because it comes down to he has diamonds on 0:04:55.680 --> 0:04:58.600 one hand and Tessa has two Dour Slice in New 0:04:58.640 --> 0:05:01.280 York Pizza and the other one whatever. And I think 0:05:01.400 --> 0:05:07.120 that's the frustration for test investors. Well, okay, let's go 0:05:07.160 --> 0:05:09.160 into then the social media space a little bit more 0:05:09.200 --> 0:05:14.080 than I've wondered. If this potential bankruptcy or decline that 0:05:14.080 --> 0:05:16.160 you're seeing in Twitter, does that then create some sort 0:05:16.200 --> 0:05:20.440 of tailwind for the likes of Meta for example. I 0:05:20.480 --> 0:05:22.920 think right now, I mean all those ships are going 0:05:22.960 --> 0:05:25.839 down right. So it's one where there could be some 0:05:25.960 --> 0:05:29.320 life rafts here and there, but books social media is 0:05:29.360 --> 0:05:31.679 that the best growth is in the rear view mirror. 0:05:31.680 --> 0:05:35.080 And that's why Zuckerberg ultimately, once Apple IOLs came out 0:05:35.160 --> 0:05:38.080 with cook and the shot across the bout, I think 0:05:38.200 --> 0:05:42.040 Zuckerberg and Facebook knew, okay, like clock Struck Midnight, it 0:05:42.120 --> 0:05:44.080 was basically time that they were gonna have to transform 0:05:44.120 --> 0:05:46.920 the business model. I think the death of social media. 0:05:47.120 --> 0:05:49.680 I think what's happened is is that it's a it's 0:05:49.720 --> 0:05:52.880 a maturity of social media, and that's really what's happened 0:05:52.880 --> 0:05:55.760 is that how do you monetize? I think the problem 0:05:55.800 --> 0:05:59.520 from us someone that basically has created rockets and electric vehicles. 0:05:59.560 --> 0:06:01.760 He goes in Twitter and he's like, we got two 0:06:01.960 --> 0:06:05.919 d forty million users. Engagement, as we all know, is 0:06:06.040 --> 0:06:09.640 extremely high. How do you monetize it? That's been the 0:06:09.720 --> 0:06:13.159 problem for Twitter. They need to monetize it. And again 0:06:13.200 --> 0:06:16.640 they were spending money like rock stars, so they needed 0:06:16.680 --> 0:06:20.520 to cut cost. That was clear, and now it's about 0:06:20.560 --> 0:06:24.000 ken you turnaround. Penn State's playing at Rutger's this weekend. 0:06:24.120 --> 0:06:25.719 I think I'm gonna get some tickets and go we 0:06:25.760 --> 0:06:27.920 are we are? Are you going? Okay? Alright? So I 0:06:27.960 --> 0:06:29.760 think I might join you there, And we got Mandep 0:06:29.800 --> 0:06:32.120 saying he does all this tech stuff for Bloomberg Intelligence. Man, Deep, 0:06:32.120 --> 0:06:34.960 I want to start with you Meta. When I was 0:06:35.000 --> 0:06:39.280 a kid, it was Facebook, Okay, it was a phenomenal 0:06:39.320 --> 0:06:42.000 growth story. It had so many revenue growth levers to pull, 0:06:42.000 --> 0:06:44.400 whether it's Facebook or the Graham as kids call it, 0:06:44.640 --> 0:06:48.520 or What'sapp or Messenger? Stuck can't buy a friend? Right here? 0:06:48.520 --> 0:06:51.440 What's the call in Meta right here? Well, so clearly 0:06:51.520 --> 0:06:54.560 they have a lot of headmans from Apple as like 0:06:54.839 --> 0:06:57.719 changes that they made and you know the ad pricing 0:06:57.760 --> 0:07:01.320 impact that had on Meta. But the biggest one is 0:07:01.520 --> 0:07:04.280 what are they doing with reality labs and how long 0:07:04.320 --> 0:07:07.240 are they going to spend? So even though they announced 0:07:07.240 --> 0:07:10.200 the job cuts and that actually did help the stock, 0:07:10.800 --> 0:07:14.880 it's still not clear. You know, what is the endgame there, Venville. 0:07:14.880 --> 0:07:17.760 They're leg commercial success. What kind of revenue growth can 0:07:17.880 --> 0:07:20.840 reality labs generate? Because in terms of the installed base 0:07:20.920 --> 0:07:24.400 and unit sales, that's trending down and still Meta is 0:07:24.440 --> 0:07:28.280 talking about losing almost fifteen billion dollars on reality labs 0:07:28.360 --> 0:07:30.960 next year. So how am I supposed to buy stock 0:07:31.000 --> 0:07:33.760 when the top line revenue growth is slowing and these 0:07:33.800 --> 0:07:37.080 expenses on this business I don't even understand are going 0:07:37.120 --> 0:07:38.960 up dramatically. Is that kind of what investors are saying. 0:07:39.160 --> 0:07:42.640 If they start winning against TikTok, or TikTok gets banned 0:07:42.640 --> 0:07:45.560 in the US, that will certainly be a big catalyst 0:07:45.920 --> 0:07:48.320 for the stock as well as for their growth. Because 0:07:48.360 --> 0:07:51.200 think of it this way. If you are an advertiser 0:07:51.200 --> 0:07:53.360 who wants to spend their add dollars, there are only 0:07:53.400 --> 0:07:55.560 so many places you can go to, whether it's Google 0:07:55.600 --> 0:07:59.800 Search or Meta or TikTok or Snap or pinterest. So 0:07:59.800 --> 0:08:02.680 they only handful of platforms, and if TikTok goes out 0:08:02.680 --> 0:08:05.240 of the equation, that will certainly be a booze for 0:08:05.440 --> 0:08:09.480 meta reels. That's the other big investment they're making. We'll 0:08:09.520 --> 0:08:11.640 hop on in here, Dan and talk to us a 0:08:11.640 --> 0:08:14.800 little bit about the ripple effect from meta Specifically, you've 0:08:14.840 --> 0:08:16.840 seen a little bit of tail winds going to and 0:08:17.000 --> 0:08:20.960 video advanced micro devices. This idea that if Facebook now 0:08:21.000 --> 0:08:23.640 Meta is going to power the metaverse, you need the 0:08:23.680 --> 0:08:26.600 chips to do it. Is that a logical tailwinds that 0:08:26.600 --> 0:08:29.480 a sustainable tailwind for some of these other big tech players. Yeah, 0:08:29.520 --> 0:08:31.960 I don't think it is. Look, I think Zuckerberg, it's 0:08:32.000 --> 0:08:35.080 sort of been a Ted Striker from the movie Airplane situation, 0:08:35.760 --> 0:08:37.640 and I think that's you know, you go back to 0:08:37.640 --> 0:08:42.320 that last conference call investors have really you know, the 0:08:42.400 --> 0:08:44.760 patients is worn thin because I think in terms of 0:08:44.800 --> 0:08:47.640 the metaverse strategy in this type market, that's not what 0:08:47.679 --> 0:08:49.040 you want to see. That's why they had to cut 0:08:49.040 --> 0:08:51.559 back to cost. And I think ultimately gonna have to 0:08:51.600 --> 0:08:53.360 do more and more of a U turn in terms 0:08:53.440 --> 0:08:57.000 of metaverse. Facebook look as a stock, you know, we'd 0:08:57.000 --> 0:08:59.640 be more cautious on it, just because right now you 0:09:00.160 --> 0:09:02.520 feel like from a social media perspective you must see 0:09:02.559 --> 0:09:06.160 them doubled down. There still massive headwinds you as we 0:09:06.240 --> 0:09:08.360 talked about in terms of what we see with Apple IOLs. 0:09:09.000 --> 0:09:10.920 All right, let's go to Apple because I need your 0:09:10.960 --> 0:09:13.400 call at Dan, you've been one of the most vocal 0:09:13.679 --> 0:09:17.680 UH analysts on Apple here. Um, it's only down sixteen 0:09:18.160 --> 0:09:20.400 year to date, so it's beating the SMP. It's way 0:09:20.480 --> 0:09:23.520 beating the NASTAC here. So it feels like kind of 0:09:23.520 --> 0:09:26.960 a safe port in a in a storm here. What's 0:09:27.000 --> 0:09:29.440 the what are the growth stories for this one going forward? 0:09:29.480 --> 0:09:31.160 Do I have to wait for the next cool phone 0:09:31.240 --> 0:09:34.160 or what's the story? It's a rocket Gibraltar stock. And 0:09:34.200 --> 0:09:36.240 I think the heaters continue to hate the you know, 0:09:36.360 --> 0:09:39.040 fire in a crowd theater every quarter. Yet look with demand, 0:09:39.120 --> 0:09:41.080 I was held up, and I think if you look 0:09:41.120 --> 0:09:43.800 at the services business, doc continues to play out, and 0:09:43.840 --> 0:09:46.280 I think we have a re acceleration going to next year. 0:09:46.600 --> 0:09:49.079 Look in macro, it's going to hit everyone including Apple 0:09:49.120 --> 0:09:51.440 and of course supply chains in issue. But I believe 0:09:52.040 --> 0:09:55.439 it's very negative out there in from an investor perspective, 0:09:55.480 --> 0:09:58.840 and I believe numbers the decks being cleared, and I 0:09:58.880 --> 0:10:01.360 think there's a stock that can continues to move higher 0:10:01.400 --> 0:10:03.800 as we go in next six and nine months. That's 0:10:03.800 --> 0:10:08.640 why intact, Apple, Microsoft, you'll continue to be our favorite names. 0:10:10.200 --> 0:10:12.520 You've been a real expert on cloud and the switch 0:10:12.559 --> 0:10:16.760 to cloud. Will Apple ever enter that game? Now? They 0:10:16.760 --> 0:10:19.600 will always be a consumer focused company. And look, they 0:10:19.640 --> 0:10:23.360 will keep building the back back in infrastructure in terms 0:10:23.360 --> 0:10:26.520 of supporting the services revenue that Dan was talking about. 0:10:26.640 --> 0:10:31.320 But Apple is not an enterprise sales company. You know, 0:10:31.440 --> 0:10:34.840 they will continue to focus on devices, and I think 0:10:34.840 --> 0:10:37.400 they will enter the VR market as well. They will 0:10:37.480 --> 0:10:41.560 launch a headset that could drive the next leg of growth, 0:10:41.600 --> 0:10:43.439 like look at what air pods have done in a 0:10:43.520 --> 0:10:46.200 span of you know, three or four years. So but 0:10:46.320 --> 0:10:49.200 I I do think they will always be consumer focused. 0:10:49.240 --> 0:10:51.400 And if I know, you and the tech team at 0:10:51.400 --> 0:10:53.480 Bloomberg Intelligence kind of look at the industry as a 0:10:53.480 --> 0:10:56.360 whole as well, talk about tech spending in the last 0:10:56.360 --> 0:10:58.160 couple of years and what it might look like a 0:10:58.240 --> 0:11:00.600 a kind of recession or environment maybe for the next 0:11:00.679 --> 0:11:04.800 year or so. Yes, so we definitely were in above 0:11:05.040 --> 0:11:08.160 historical growth rate environment when it comes to tech spending, 0:11:08.280 --> 0:11:12.000 and we probably pulled forward some of the data centers 0:11:12.040 --> 0:11:14.760 spend over the last couple of years, given everyone was 0:11:14.800 --> 0:11:18.120 talking about digital transformation and you know, the shifting work 0:11:18.120 --> 0:11:21.720 clothes to cloud. But still I think, you know, when 0:11:21.720 --> 0:11:23.920 it comes to I T spending, you break it apart 0:11:23.960 --> 0:11:27.480 into software and services, it will still be high single digits. Yes, 0:11:27.520 --> 0:11:31.120 semiconductor is more cyclical, so the hardware and semiconductor component 0:11:31.400 --> 0:11:34.600 will slow down, but overall tech spending will continue to 0:11:34.679 --> 0:11:38.280 be you know, at least two times GDP. Yeah, I'm 0:11:38.280 --> 0:11:39.800 sticking with it. I mean, I don't know. I mean, 0:11:39.800 --> 0:11:41.720 it's been good for me for the last twelve years, 0:11:41.720 --> 0:11:43.640 don't you think, I mean you know, so you know 0:11:43.640 --> 0:11:46.120 when you were a kid. Yeah, exactly, exactly, all right, 0:11:46.120 --> 0:11:48.920 Mandy seeing Bloomberg Intelligence tech analyst Dan I's web Bush 0:11:48.960 --> 0:11:51.920 securities are covering all things on the TMT space for 0:11:52.120 --> 0:11:55.000 web Bush. We appreciate them coming into the studio round 0:11:55.000 --> 0:11:57.720 tabling a couple of segments here talking about tech um. 0:11:57.760 --> 0:12:01.200 It's going to continue to be a solid growth story 0:12:01.640 --> 0:12:07.120 going forward. Look at a bitcoint pretty I mean finally 0:12:07.160 --> 0:12:09.160 getting a little bit of stability here. It's up about 0:12:09.160 --> 0:12:12.000 a four tenths of one percent here sixteen thousand, five ninety. 0:12:12.000 --> 0:12:13.960 But the world of crypto, I mean you talk about 0:12:13.960 --> 0:12:17.400 the crypto winter, Okay, I guess the asset class a 0:12:17.400 --> 0:12:19.280 little bit out of favors. What I take you the 0:12:19.360 --> 0:12:22.120 term crypto winter. But then we got f t X 0:12:22.120 --> 0:12:24.199 blowing up. This is like the nasdacs saying we're going 0:12:24.200 --> 0:12:27.440 out of business. This is crazy and it is an 0:12:27.520 --> 0:12:31.640 ever ever changing story on a daily and hourly a 0:12:31.640 --> 0:12:34.640 minute basis. And Bloomberg has got some great, great reporting, 0:12:35.160 --> 0:12:39.240 uh and on this story and part of that reporting 0:12:39.240 --> 0:12:42.280 team is Annie Massa. She's an investigating reporter, investing reporter 0:12:42.320 --> 0:12:44.559 for Bloomberg News. He joins us here in our Bloomberg 0:12:44.559 --> 0:12:47.240 Interactive Broker studio. She's not mailing in, phoning it in, 0:12:47.400 --> 0:12:54.800 She's in the studio exactly. So Annie, the Sam Bankman 0:12:54.880 --> 0:12:58.000 freed guy. What do we know about him and what 0:12:58.360 --> 0:13:01.000 kind of happened here? We know a lot about him. 0:13:01.040 --> 0:13:03.400 We've all been very exposed to Sam Bankman Freed over 0:13:03.400 --> 0:13:06.319 the past year or two years. But what is coming 0:13:06.320 --> 0:13:08.560 to light is that he's a totally different kind of 0:13:08.600 --> 0:13:12.400 person than many people really thought. In the bankruptcy documents 0:13:12.480 --> 0:13:16.240 that came out today, there is a trove of information 0:13:16.280 --> 0:13:19.680 about how he ran f t X and his affiliated 0:13:19.679 --> 0:13:24.120 hedge fund, Ali Alima Research, and how there was no 0:13:24.840 --> 0:13:28.720 there was no internal system, no controls, and actually a 0:13:28.800 --> 0:13:33.200 pretty flagrant um sense of uh. I mean, it's it 0:13:33.240 --> 0:13:38.120 goes beyond lack of oversight to to really irresponsibility. Is 0:13:38.120 --> 0:13:41.920 there anybody talking fraud at this point? That's that's a 0:13:41.960 --> 0:13:44.679 big suspicion. I mean, when when you talk to people 0:13:44.679 --> 0:13:47.040 in the industry, they're like, yeah, this guy's going to jail, 0:13:47.679 --> 0:13:50.840 But I mean, who's to say, like it's still playing out, 0:13:50.920 --> 0:13:54.440 but there's uh, there's certainly not a good feeling about 0:13:55.320 --> 0:13:57.720 what's next. Well, I think one of the issues in 0:13:57.720 --> 0:14:00.600 crypto broadly has been the story of credibility. It's almost 0:14:00.640 --> 0:14:03.360 a experiment that's taking place in crypto that we've seen 0:14:03.360 --> 0:14:05.320 in other markets, in the bond market, in the equity 0:14:05.360 --> 0:14:07.760 market as well. The new f t X CEO saying 0:14:07.760 --> 0:14:12.720 there's a complete failure of corporate controls. How does a 0:14:13.040 --> 0:14:15.920 company like f t X, for example, regain some of 0:14:15.920 --> 0:14:18.800 the credibility scene, say, the equity markets. Yeah, I mean, 0:14:18.840 --> 0:14:20.520 I just want to underscore what you just said. The 0:14:21.240 --> 0:14:24.320 man overseeing the bankruptcy of f t X and its 0:14:24.320 --> 0:14:28.560 affiliated entities oversaw the end Ron bankruptcy. And this is 0:14:28.600 --> 0:14:30.720 a guy who said, I have never in my career 0:14:30.920 --> 0:14:35.720 seen such a lack of trustworthy financial information um and 0:14:35.880 --> 0:14:39.680 complete lack of corporate control. So even he is shaken 0:14:39.680 --> 0:14:42.200 to his core as far as I can tell, and 0:14:42.400 --> 0:14:45.560 says throughout the document that some of the financial information 0:14:45.600 --> 0:14:48.520 provided to him anything provided to him while the company 0:14:48.560 --> 0:14:52.360 was understand Bankman Freed, he doesn't even necessarily trust Sam 0:14:52.360 --> 0:14:54.960 Bankman Freed, I just wonder why is he not sitting 0:14:55.040 --> 0:14:59.200 in an FBI office in Washington or in New york Y? 0:14:59.280 --> 0:15:02.800 Is he? I mean, he's the center of all this 0:15:03.560 --> 0:15:05.760 and there are billions of dollars that have been lost. 0:15:05.760 --> 0:15:07.840 Why is he still hanging out in the Bahamas? A 0:15:08.040 --> 0:15:11.880 great question for regulators when they come on the show 0:15:11.960 --> 0:15:15.440 next time. But it's it's true. So um, he's been 0:15:15.720 --> 0:15:19.680 questioned by authorities in the Bahamas, and I think it 0:15:20.080 --> 0:15:22.400 speaks to why was he in the Bahamas in the 0:15:22.480 --> 0:15:24.320 first place? Right, it was no secret that he based 0:15:24.360 --> 0:15:26.960 his business in the Bahamas. Both of these businesses, by 0:15:26.960 --> 0:15:29.920 the way, Alameda and f t X. And you know 0:15:30.040 --> 0:15:32.440 this is a guy who ran these companies. You know, 0:15:32.480 --> 0:15:38.040 Alameda started in no surprise, Alameda County in California, then 0:15:38.080 --> 0:15:40.200 moved to Hong Kong, then moved to the Bahamas. It's like, 0:15:40.240 --> 0:15:42.880 why did this corporate entity have to hop around the 0:15:42.920 --> 0:15:50.280 world to the Caribbean ultimately to UH to survive? So, 0:15:50.480 --> 0:15:52.800 I mean, clearly he was trying to stay out of 0:15:52.840 --> 0:15:54.920 the reaches of US authorities. We know now, I mean, 0:15:55.280 --> 0:15:57.520 but we see this now right in retrospect. Hindsight is 0:15:57.520 --> 0:16:01.200 always but I have to for for the viewers who 0:16:01.200 --> 0:16:03.440 are listeners, I should say, who aren't as familiar with 0:16:03.480 --> 0:16:06.240 the rise of Sam Bankman Freed. How did f t 0:16:06.520 --> 0:16:10.560 X get so big so quickly? Yeah, um, well, it's 0:16:10.560 --> 0:16:12.920 a good point because or it's a good question because 0:16:13.640 --> 0:16:15.280 f t X hasn't been around that long. It was 0:16:15.320 --> 0:16:19.000 the second largest crypto exchange before the bankruptcy. But it's 0:16:19.080 --> 0:16:23.280 not that old. Um. Alameda started first of all. I 0:16:23.320 --> 0:16:26.840 want to underscore that Alameda started first. Alameda started as 0:16:26.880 --> 0:16:31.360 his crypto trading hedge fund in f t X emerged 0:16:31.400 --> 0:16:35.120 as an offshoot of that in Okay, so we're talking 0:16:35.200 --> 0:16:37.880 just a few years this this company rises to be 0:16:37.920 --> 0:16:40.160 the second largest player in all of crypto in the world. 0:16:40.400 --> 0:16:43.520 How did that happen? Well, he was a master manipulator, 0:16:43.920 --> 0:16:46.000 but knew how to access people. He knew how to 0:16:46.000 --> 0:16:50.080 get people on the platform, and he uh and he 0:16:50.440 --> 0:16:52.560 put ads like he got all this VC backing. He 0:16:52.600 --> 0:16:56.200 was able to charm vcs. Raised two billion dollars, right, 0:16:56.240 --> 0:16:57.920 you can. You can throw your weight around with that 0:16:58.000 --> 0:17:01.560 kind of money. And we all saw the Super Bowl 0:17:01.600 --> 0:17:04.359 commercials Um, you know ft X plastered on the sides 0:17:04.359 --> 0:17:06.440 of stadiums. He knew how to get in front of 0:17:06.440 --> 0:17:09.399 retail investors, and I think it started this cycle this 0:17:09.520 --> 0:17:13.600 like flywheel almost where. Um, once the vcs saw all 0:17:13.640 --> 0:17:16.280 the people on trading on the ft X platform, then 0:17:16.280 --> 0:17:18.200 they're like, hey, wait a minute, like everybody else is 0:17:18.440 --> 0:17:20.480 you know in this investment? Why am I not? And 0:17:20.800 --> 0:17:24.840 it's snowballed from there Binance. They seem to be I 0:17:24.840 --> 0:17:28.119 guess the winners here and their founders c z I 0:17:28.200 --> 0:17:30.439 just known by his I'm not sure his name. Um, 0:17:30.480 --> 0:17:32.760 they seem to be the winner here. Is anybody looking 0:17:32.800 --> 0:17:36.359 at them because I know they sold some bitcoin I 0:17:36.359 --> 0:17:39.520 guess last weekend, which would have been the weekend before, 0:17:39.560 --> 0:17:43.600 which kind of accelerated the demise of the ft X platforms. 0:17:43.640 --> 0:17:46.000 Anybody looking at them in any way, shape or form, 0:17:46.160 --> 0:17:48.399 or are they just the winners here? I would be 0:17:48.400 --> 0:17:50.879 cautious to say there are any winners in this story, 0:17:51.040 --> 0:17:56.520 at least now, because it is hard to overstate how 0:17:56.720 --> 0:18:01.720 seismic this event has been in the cryptocurrency industry. Yeah, 0:18:01.720 --> 0:18:05.760 we've spoken to CEOs of other entities within the crypto 0:18:05.800 --> 0:18:09.000 space and they are shaken to their core. They're almost 0:18:09.119 --> 0:18:12.199 they can't believe this happened. Because Sam Bankman Fried was, 0:18:12.480 --> 0:18:15.000 if nothing else, the savior of the industry. He was 0:18:15.040 --> 0:18:18.080 the voice, voice, and face to Washington, d C in 0:18:18.160 --> 0:18:22.520 terms of creating credibility. It's a highly destabilizing event and 0:18:22.560 --> 0:18:24.879 there's been a huge loss of trust in the space. 0:18:25.400 --> 0:18:28.680 So we'll see what emerges from this. But I'm not 0:18:28.760 --> 0:18:32.199 declaring any winners at this point. I'm still shocked that 0:18:32.480 --> 0:18:34.840 and Paul met this point I believe earlier is that 0:18:34.960 --> 0:18:38.880 crypto is actually still sixteen thousand literally at Bitcoin at 0:18:38.920 --> 0:18:41.960 a level of sixteen thousand, uh five, fifteen ish, we'll 0:18:42.000 --> 0:18:44.640 call it at the moment um. I'm surprised that there 0:18:44.680 --> 0:18:47.879 isn't an even bigger reaction to a collapse of the 0:18:47.920 --> 0:18:51.280 second largest crypto exchange, because if he saw that and 0:18:51.359 --> 0:18:55.200 say the equity market, there would definitely be a massive collapse. 0:18:55.280 --> 0:18:59.280 And um Crypto, I felt like, was a growing um entity. 0:18:59.480 --> 0:19:02.640 You've covered exchanges, You've covered accent managers. Do you think 0:19:02.680 --> 0:19:06.000 I get worse from here? I think it absolutely can 0:19:06.040 --> 0:19:08.320 and will get worse from here. I think that we're 0:19:09.040 --> 0:19:12.600 we're still kind of waiting to see the full effects 0:19:13.160 --> 0:19:15.640 of what will happen. This is going to have ripple 0:19:15.680 --> 0:19:18.480 effects in the crypto lending space. It already is. Um, 0:19:19.040 --> 0:19:22.160 the effects are going to ripple out from here. Um. 0:19:22.200 --> 0:19:27.160 To your point about bitcoin, Uh, it's interesting bitcoin. I mean, 0:19:27.200 --> 0:19:30.359 crypto gets all lumped together, right, but but bitcoin is 0:19:30.440 --> 0:19:33.520 different from some of these like fantasy Land tokens that 0:19:33.560 --> 0:19:36.240 were just being minted by f t X. So it's 0:19:36.240 --> 0:19:39.480 seen as more of like a safer bet among the 0:19:40.280 --> 0:19:43.000 speaking of I need a final for my poker table. 0:19:43.040 --> 0:19:52.160 Are you available? Are you? I sure do? Yeah. She's 0:19:52.200 --> 0:19:55.560 a champion to the champions. So if we had brought 0:19:55.560 --> 0:19:57.040 you in, you would have cleaned us out, is what 0:19:57.080 --> 0:20:02.080 you're telling Usily, all right, I didn't know that, Thank 0:20:02.119 --> 0:20:06.080 you very much. That's interesting. Alright, any massive investing reporter, 0:20:06.440 --> 0:20:08.800 poker player for bloo Bo Bourber News, and we appreciate 0:20:08.800 --> 0:20:10.879 her bringing a summer her reporting chops here on this 0:20:10.880 --> 0:20:17.480 whole FTX story in crypto ever evolving. We know that 0:20:17.520 --> 0:20:21.480 the consumer it's about of the US economy, it's pretty big. 0:20:21.840 --> 0:20:25.680 So Bloomberg Intelligence, which is the research arm of Bloomberg LP, 0:20:26.359 --> 0:20:29.880 we allocate a lot of top resources to covering retail 0:20:30.600 --> 0:20:34.240 and the consumer. We've got Punum Goyle, she covers retail. 0:20:34.320 --> 0:20:38.520 Jen bartashes covers retail. Lindsay Dutch also covers retail. We've 0:20:38.560 --> 0:20:40.560 got Lindsay here on the line to give us a 0:20:40.600 --> 0:20:42.479 sense of what's going on out there with the retail 0:20:42.520 --> 0:20:45.720 space and the consumer. And she has her BS and 0:20:45.800 --> 0:20:48.800 math from Lafayette College. She's a leopard. Did you know 0:20:48.840 --> 0:20:52.760 that the Lafayette left with a mathematician? Yeah? Does that 0:20:53.080 --> 0:20:55.600 BS and math at Lafiat College. I mean, I mean 0:20:55.640 --> 0:20:57.920 I would not go up to Lindsay at a cock 0:20:57.960 --> 0:21:00.119 de party, I mean, math person. Why don't they is 0:21:00.119 --> 0:21:04.800 going to come out with formulas and the small talk? Hey, Lindsay, 0:21:04.880 --> 0:21:07.600 thanks so much for joining us here. Of the retail 0:21:07.640 --> 0:21:11.080 companies you cover, what have you been seeing here over 0:21:11.200 --> 0:21:13.919