Speaker 1: This is Bloomberg business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus.
Speaker 2: Global business, finance and tech news.
Speaker 1: The Bloomberg Business Week Podcast with Carol Messer and Tim
Speaker 1: Stenebeck from Bloomberg Radio.
Speaker 3: Hi, everyone, Welcome to the Bloomberg Business Week Weekend Podcast.
Speaker 3: Well what a week. Our first five day trading week,
Speaker 3: full week of twenty twenty four. It felt like the
Speaker 3: world was alive. Big banks kicking off us earnings. We
Speaker 3: got another read on inflation coming in a bit hotter
Speaker 3: than expected, although the Fed's favored super core inflation gauge
Speaker 3: little change. Geopolitics still front and center. And then Tim,
Speaker 3: We've got a really big reminder of how compromised social
Speaker 3: media account can catch us off guard.
Speaker 4: You know the story.
Speaker 3: It all had to do with the SEC approval for
Speaker 3: the first time of exchange traded funds that invest directly
Speaker 3: in bitcoin.
Speaker 5: Everybody, come on, turn on two factor authenticash, and that's
Speaker 5: all you got is do is well that false post
Speaker 5: on Tuesday followed by the real one on Wednesday, ARC
Speaker 5: and Vast among those getting the green light, and ARC
Speaker 5: founder Kathy Wood joined Carol as the news was unfolding.
Speaker 5: That's up in our next hour.
Speaker 3: Coming up this hour, why twenty twenty four could be
Speaker 3: a year of grave concern. Also what you need to
Speaker 3: know about the rebels in American politics. It's all in
Speaker 3: a new book by Bloomberg Business Weeks Josh Green.
Speaker 5: Plus tech spending, trends in healthcare with Amy shellhard at
Speaker 5: Wellsky Ai Anyone I.
Speaker 4: Feel like Gay already a big theme this year.
Speaker 3: All of that to come. We begin, though, with a
Speaker 3: world at war, as Ukraine and Russia entered their third
Speaker 3: year of fighting, and as escalating attacks continued in the
Speaker 3: Middle East.
Speaker 5: Bloomberg Opinion International Affairs columnists Mark Champion writes that wars
Speaker 5: are becoming existential, like it or not, and that global
Speaker 5: citizens need to be ready for a world with new
Speaker 5: kinds of wars. So what exactly does he mean by existential?
Speaker 6: Well, it's really the difference between the kinds of wars
Speaker 6: that we're more familiar with in the post Cold War
Speaker 6: period the US thankcuse invasion of Iraq that were in Afghanistan.
Speaker 6: These are wars essentially of choice, uh, and they require
Speaker 6: you know, a certain set of tools, a lot of
Speaker 6: special forces, a lot of air power, you know, air transport,
Speaker 6: all these kinds of things, not a huge number of
Speaker 6: number of tanks, artillery, the sort of or massed troops
Speaker 6: that you would need in the kind of intensive conflict
Speaker 6: you're seeing in Ukraine. And the point that I was
Speaker 6: trying to make regarding Israel was there, this is you know,
Speaker 6: going to be These kinds of wars are difficult to end.
Speaker 6: You can't just walk away. They're very hard to end
Speaker 6: because the sides, at least one of the sides, you know,
Speaker 6: normally two of them, see them as existential, so they
Speaker 6: tend to get fought until once I just can't fight anymore,
Speaker 6: and they require you know, a whole different view, much
Speaker 6: more familar to the earlier part of the twentieth century,
Speaker 6: about you know, what an armed force is for how
Speaker 6: many people you need, whether you need conscription or you
Speaker 6: can get away with just a volunteer army as most
Speaker 6: of us have now, And then what kinds of equipment
Speaker 6: you're going to have to have, and how much of it,
Speaker 6: how much ammunition, how many artillery pieces, how many tank divisions,
Speaker 6: et cetera. So it's you know, when these kinds of wars,
Speaker 6: when you know when it changes and you have to
Speaker 6: prepare for them. Not saying that you know the Europe
Speaker 6: or the US is about to fight one of these,
Speaker 6: but that you know, it's clear that we're going to
Speaker 6: have to start preparing for them, and that requires a
Speaker 6: lot of decisions by governments, a lot of explanation to
Speaker 6: their populations about, you know, why you might have to
Speaker 6: have conscription for example, and why they might need to
Speaker 6: be paying more tax.
Speaker 5: Hey, Mark, can you before we get to that, I
Speaker 5: just want you to explain with some historical context, how
Speaker 5: in existential war what happens after an existential war ends.
Speaker 5: What are the consequences of a war being existential? I
Speaker 5: mean it sounds like it's pure destruction.
Speaker 6: The consequences are mainly about how they are fought. So,
Speaker 6: you know, the two sides are if you look at
Speaker 6: the war that's going on in Ukraine at the moment,
Speaker 6: you know, the Ukrainians will will throw everything into it,
Speaker 6: and you know they are trying to mobilize. You know,
Speaker 6: at the moment Presidence Selenski is talking about mobilizing another
Speaker 6: five hundred thousand troops. You know, Russia has had several
Speaker 6: rounds of partial mobilizations and you need a lot of manpower,
Speaker 6: and the way they are fought, there's a much higher
Speaker 6: tolerance for casualties, casualties among your troops and casualties among
Speaker 6: civilians on your side on the other side. And you know,
Speaker 6: this is one of the things that you're seeing in
Speaker 6: Israel where it's really see this as an existential fight.
Speaker 6: They see what Hamas did on October the seventh. Hamas
Speaker 6: of course, is you know, publicly committed to the destruction
Speaker 6: of Israel, that this is what the destruction of Israel
Speaker 6: would mean. And therefore, you know, there's a kind of
Speaker 6: disconnect between the outside world when they see what's going
Speaker 6: on in Gaza and the way that Israelis see it.
Speaker 6: But it has big implications for you know, how long
Speaker 6: these things will tend to go on, and how they
Speaker 6: will be fought, how they end, or what happens afterwards.
Speaker 6: You know, that's that's a slightly different matter. But you know,
Speaker 6: we have several you know, you have the example, we
Speaker 6: all you know, historically lived through it. In World War One,
Speaker 6: World War Two. These were all existential wars.
Speaker 3: Right I think about you know, my dad and his
Speaker 3: three brothers all fought in World War Two in some
Speaker 3: way or another, and his youngest brother really wasn't of age,
Speaker 3: but because his other brothers were there, he just went
Speaker 3: and signed up and they took him because he's like,
Speaker 3: we're all in this together and we've got a fight.
Speaker 3: Having said that, I do think about out, you know,
Speaker 3: the willingness of some countries and their soldiers willing to
Speaker 3: fight to the bitter end, is what you're kind of
Speaker 3: saying versus other countries.
Speaker 4: Because does the US and your view.
Speaker 3: And some of the developed European nations, do they have
Speaker 3: that will to fight to the bitter end?
Speaker 6: Well, this is the thing. You know at the moment,
Speaker 6: you know, this is a war being fought. These are
Speaker 6: two wars, right, So one is being fought between Ukraine
Speaker 6: and Russia and the other is being fought between Israel
Speaker 6: and Hamas. And you know, in neither case is the
Speaker 6: US or you know, Britain, nor France or Germany directly involved.
Speaker 6: But they do take a side. They're supporting them and
Speaker 6: are committed to do you know what it takes to
Speaker 6: make sure, for example, that Ukraine you know, succeeds. But
Speaker 6: there you have this disconnect is very important because there
Speaker 6: is a big question as to whether and we're already
Speaker 6: seeing it happen as to whether you know, countries that
Speaker 6: aren't actually facing their existential threat are willing to make
Speaker 6: the kinds of pay, the kinds of prices and costs.
Speaker 6: The countries that feel it is as essential and are
Speaker 6: involved in the fight directly, are willing to make. But
Speaker 6: it makes you it is very important.
Speaker 3: It makes me wonder too. There's a line in your column.
Speaker 3: Appetite to take on US interest and allies is growing
Speaker 3: in a multipolar world where countries such as China are
Speaker 3: on and Russia now have greater means to do so,
Speaker 3: at least in their own backyards. And I do wonder
Speaker 3: does it put some nations, including the United States and
Speaker 3: others at risk because of that unwillingness to fight to
Speaker 3: the bitter end.
Speaker 6: Well, the US is in a very privileged position in
Speaker 6: the sense that it has two large oceans between it
Speaker 6: and any rival power. So this is something that has
Speaker 6: been more of a wake up call for Europe because
Speaker 6: you know, Europe doesn't end at a particular point in
Speaker 6: Russia is parts of Europe. You know parts of Russia
Speaker 6: are parts of Europe, is part of Europe, and you
Speaker 6: know there is a sort of understanding that this we're
Speaker 6: entering a different world here and that there can be
Speaker 6: a threat. You know, these things are very you know,
Speaker 6: history is difficult to predict, so you know there is
Speaker 6: a different view. You just had the Internal Markets Commissioner
Speaker 6: of the European Union. He just went to the parliament yesterday,
Speaker 6: European Parliament and said, I think we need one hundred
Speaker 6: billion dollar or euro rather one hundred billion euro fund
Speaker 6: to fund greater defense production and to do more of
Speaker 6: that together so that we're you know, getting more bang
Speaker 6: for our buck, precisely because we can't rely on the
Speaker 6: US to always be there. He specifically talked about the
Speaker 6: possibility of Donald Trump getting a second term and also
Speaker 6: because you know, the threats that we face are clearly.
Speaker 3: Changing, right And I know there's an individual who spoke
Speaker 3: to in the story that you highlight of Mcryan, a
Speaker 3: former general in the Australian Army, who says politicians everywhere
Speaker 3: need to understand themselves and explain to their citizens of
Speaker 3: the next half century will be different from the last
Speaker 3: half century and that they are going to have to prepare.
Speaker 3: So you're talking about different levels of taxes, defense spending,
Speaker 3: and mobilization, a very very different environment that we have
Speaker 3: gotten accustomed to really globally. Very thoughtful piece, and so
Speaker 3: appreciate you Mark. I know it's a little bit later
Speaker 3: out there in London, so really appreciate that you would
Speaker 3: share that with our audience. Mark Champion, Bloomberg Opinion International
Speaker 3: Affairs columnists. Be sure to check out his story and
Speaker 3: more from Bloomberg Opinion on the Bloomberg Terminal, of course,
Speaker 3: at Bloomberg dot Com Slash Opinion.
Speaker 5: Yeah, check out this piece. It talks a lot about
Speaker 5: the tolerance for casualties and how that's higher because it's
Speaker 5: an existential war, very.
Speaker 3: Different feeling and mode than what we've been in.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 3: When it comes to risks overall, engaging and analyzing their impact,
Speaker 3: the Erasia Group is always a go to, and the
Speaker 3: companies report on top Risks predictions for twenty twenty four
Speaker 3: points to a year of grave concern. So let's get
Speaker 3: into it and to some of the risks with you.
Speaker 3: Eurrasia Group Chairman Clip Cupchin. He is at the Bloomberg
Speaker 3: News Bureau in Washington, d C. Cliffs. So nice to
Speaker 3: have you here with Tim and myself. I want to
Speaker 3: say welcome and happy new year, but I feel like
Speaker 3: it might not be a good year. There's lots of
Speaker 3: reasons out there. Is that a fair assessment? And is
Speaker 3: it more than any other year in recent time? We
Speaker 3: just dealt with a global pandemic a few years ago,
Speaker 3: you know, go back in eight we had a global
Speaker 3: financial crisis. We've had some really big things that we've
Speaker 3: had to deal with as an individual, as an American,
Speaker 3: as a global citizen.
Speaker 7: I think what separates this year from recent years is
Speaker 7: the number of wars going on. We have two kinetic
Speaker 7: wars going on Ukraine and Israel Amas, and that's a
Speaker 7: lot of wars. I think we have to after ourselves
Speaker 7: why to kinetic wars? But in addition, and the way
Speaker 7: we like to think about this report, there's really three wars.
Speaker 7: It's the two I've mentioned and about to begin is
Speaker 7: the US against itself, which in many many ways will
Speaker 7: be the world's more serious war because it pertains to
Speaker 7: the world's long remaining superpower, three wars with no guard rails,
Speaker 7: three wars that we think have no leaders that can
Speaker 7: really fix the problem, and three wars where the two
Speaker 7: sides don't even necessarily agree what the war's over. And
Speaker 7: that's really pertains the United States. So yeah, I think
Speaker 7: risk is a thing that we always worry about, but
Speaker 7: this year it's got a real edge to it.
Speaker 5: Does it feel like investors are ignoring the risk out there?
Speaker 5: I mean, we're almost at all time highs on the
Speaker 5: S and P five hundred right now.
Speaker 7: I think on the potential for escalation in the Middle East,
Speaker 7: there's a bit of a head in the sand thing
Speaker 7: going on. I mean, for instance, I would be surprised
Speaker 7: if the US didn't hit the houthies pretty soon in Yen. Wow,
Speaker 7: how's Iran going to react? You know, don't think they'll
Speaker 7: do much, but I sure hope they don't. I think
Speaker 7: that's one aspect in which investors have their head in
Speaker 7: the sand. But the bigger one is what's about to
Speaker 7: go on in this country. We're about to see President
Speaker 7: Trump get the nomination in a couple of months, and
Speaker 7: then you know, we're in a new era. We're in
Speaker 7: an era where he gets the media, he controls the funding,
Speaker 7: he controls the TV. You'll pressure on Biden to do
Speaker 7: something on Iran because Trump will be to the weight
Speaker 7: of the right of him on Iran. The Ukrainians are
Speaker 7: going to wonder if they're ever going to see another
Speaker 7: dollar from this country again, which I think is a
Speaker 7: very good question. So I think the main risk that
Speaker 7: at least over the medium term, US isn't going to
Speaker 7: tang anytime soon. But if we see another Trump presidency,
Speaker 7: I think everybody's going to ask themselves is the US
Speaker 7: good for its promises? Is the US the haven the
Speaker 7: safe haven for money that has been since the Second
Speaker 7: World War? Those kinds of questions They're going to.
Speaker 3: Be honest, Cliff, I've got to say, you know, this
Speaker 3: whole idea of the US, you know, basically at war
Speaker 3: with itself against itself and really the division and questioning
Speaker 3: American democracy, And I do wonder what happens on the
Speaker 3: other side. And we're a young nation still, right, and
Speaker 3: I look at some of the older countries there are
Speaker 3: oftentimes where they're questioning kind of what is going on internally?
Speaker 3: Is there something from history that you think we can
Speaker 3: draw upon to kind of figure out and say, well,
Speaker 3: this is kind of normal in a young country's history,
Speaker 3: and try to figure out and maybe make some conclusions
Speaker 3: about where it goes from here.
Speaker 7: I can't think of a democracy. Look, I mean this
Speaker 7: is kind of unique. You know, we have a guy
Speaker 7: running for president, you know, a democracy who tried to
Speaker 7: curtail to be nice to him democracy. Last time we
Speaker 7: saw this movie, I think the only analogy, and it's
Speaker 7: not from distant history, but what happened to Hungary after
Speaker 7: Victor orbon really got his mitt around it? Well, you
Speaker 7: know he's Hungarian democracy? Ever going to rebound Polish democracy?
Speaker 7: Did Hungarian democracy?
Speaker 2: I don't know.
Speaker 7: I don't know. So there's a real question as to
Speaker 7: how much we can absorb, how much damage the US
Speaker 7: can take the second time around. I don't think history
Speaker 7: is a very good guy, because this is really very
Speaker 7: ahistorical and rather unprecedented.
Speaker 5: What would be your message to politicians who see no
Speaker 5: problem with another Trump administration?
Speaker 7: First, I would say, don't take what you have for
Speaker 7: granted anymore. This is a very fragile democracy that was
Speaker 7: invented by a bunch of geniuses. When you think of
Speaker 7: how they sort of controlled human nature and the greed
Speaker 7: that's within all of us, but set up these chunks
Speaker 7: of balances and nobody can really get away with it.
Speaker 7: But it's fragile, and it's fragile to a huckster, to
Speaker 7: a really good politician like Donald Trump, who can you know, kirk,
Speaker 7: who can feed, who can feed scared people and make
Speaker 7: them induce them to vote for him. So I would
Speaker 7: tell politicians to sort of get real and be very
Speaker 7: jealous of what you have, first of all.
Speaker 2: But secondly, I think the.
Speaker 7: Rest of us here have to really respect wouldn't be
Speaker 7: the word, but be very cognizant of what's going on
Speaker 7: in this country.
Speaker 1: That you know, I go home to Wisconsin.
Speaker 7: When I go home to central Wisconsin and talk to people,
Speaker 7: and of them vote for Donald Trump. And these are
Speaker 7: church going, god fearing, good people. Give them their money
Speaker 7: at night and give it all back in the morning.
Speaker 7: They're very honest people. They're scared, they're misguided, they get
Speaker 7: bad information. But I think all of us have to
Speaker 7: sort of see this guy's legitimate and then sort of
Speaker 7: look within ourselves and say, how did we get here?
Speaker 7: Because we're not a very good We're not a very
Speaker 7: good place.
Speaker 3: I felt that way about the uprising and the siege
Speaker 3: at the capitol, Like I want to understand these people,
Speaker 3: Why are they doing this? Why are they kind of
Speaker 3: want to understand why someone thinks that way. I don't
Speaker 3: walk around in their shoes, and they don't walk around
Speaker 3: in my shoes, but I kind of want to understand
Speaker 3: how do we do that?
Speaker 8: Though?
Speaker 3: Where people in terms of how they get their information,
Speaker 3: it is often a chosen source, one source, which can
Speaker 3: lead to kind of this vacuum, and it can potentially
Speaker 3: be a vacuum of misinformation.
Speaker 7: Well, we all got to make an effort, and I
Speaker 7: didn't you join you today, come on to radio or
Speaker 7: tell stories. But I'm going to share one quick second
Speaker 7: one with you. So I was on vacation during COVID.
Speaker 7: It was in West Virginia, and I called the Central
Speaker 7: Committee of the Republican Party of Xyz County. It was
Speaker 7: a real county and it was a real conservative and
Speaker 7: I kept my fifteen year old son. We met with
Speaker 7: him for lunch and it was the most fascinating three
Speaker 7: hours I think I've had in a long long time.
Speaker 7: These far right Republicans felt like they had succeeded from America,
Speaker 7: felt like nobody in Washington cared what they thought about
Speaker 7: and they said I was first first washing they'd ever seen.
Speaker 7: And you know, I think there's an actual conversation to
Speaker 7: be had somewhere what he's trying. These aren't necessarily bad people,
Speaker 7: they're scared people, But I think there's got to be
Speaker 7: some kind of trust between these two polls that are
Speaker 7: just widening and widening and widening. There's got to be
Speaker 7: someplace in the middle where we can have a conversation
Speaker 7: because we all are decent people, we all come from
Speaker 7: the same founding fathers. But nobody's trying right now. We're
Speaker 7: all just getting further and further into our nativistic corner.
Speaker 7: So the trend line's not good. I don't think it's inevitable,
Speaker 7: but it's not good.
Speaker 3: Well, you may have not come on to tell stories,
Speaker 3: but we certainly wish you did, because we feel like
Speaker 3: it's very realistic now in terms of what's going on
Speaker 3: and really resonate in place to some of the risks,
Speaker 3: as you say, the number one risk that you guys
Speaker 3: have identified as the US versus itself, which is just well,
Speaker 3: come back soon, come back so do you think we'll
Speaker 3: get twenty seconds come out in a better way or
Speaker 3: it's fifty to fifty at this point.
Speaker 7: Well, let me say that there are really good stories
Speaker 7: out there, and Mexico after the Shinbaum is going to
Speaker 7: be I think a really good president of Mexico. Mode's
Speaker 7: gonna get reelected. India is headed in a good direction.
Speaker 7: There are good stories, and I think we should you know,
Speaker 7: next time I come back, maybe we can do the
Speaker 7: good news, because there's good news.
Speaker 3: All right, Okay, promise, promise you open invitation. So appreciated
Speaker 3: you as your group chairman. Cliff Cupchin joining us from
Speaker 3: our bureau in Washington, DC.
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Speaker 3: All right, everybody, he is He's not necessarily rebel. I
Speaker 3: don't know about that.
Speaker 4: We'll talk about that.
Speaker 3: But he is the number one New York Times bestselling
Speaker 3: author Devil's Bargain Steve Bannon, Donald Trump and the Storming
Speaker 3: of the Presidency. His new book takes a look at
Speaker 3: the other side of the political spectrum, chronicling the rise
Speaker 3: of economic populism and the Democratic Party in the wake
Speaker 3: of the global financial crisis and collapse, if you will,
Speaker 3: in two thousand and eight. This play is a big role,
Speaker 3: if you will, in terms of his thinking and in
Speaker 3: the book.
Speaker 5: The new book, I got it in my hand right here.
Speaker 5: It's called The Rebels Elizabeth Warren, Bernie Sanders, AOC and
Speaker 5: the Rise of the New Left. Very please at back
Speaker 5: with us our colleague Josh Green. He's BusinessWeek national correspondent.
Speaker 5: He's here in the Bloomberg Interactive Brokers studio. Josh, talk
Speaker 5: about timing. You know, we're going to get to the
Speaker 5: book in justice second.
Speaker 3: We're going to come in.
Speaker 5: We're going to get to the book in just a second.
Speaker 5: But first, the breaking news about Chris Christy exiting the race.
Speaker 5: He's actually caught disparaging Nikki Haley and Rondo Santis as
Speaker 5: he exited the race. You wrote a big profile of
Speaker 5: Chris Christie back at the end of last year, August
Speaker 5: of twenty twenty one, I should say, talking about how
Speaker 5: he's absolutely totally one hundred anti Trump for now. From
Speaker 5: the beginning, it was a long shot presidential candidate. But
Speaker 5: let's get your reaction.
Speaker 9: Yeah, I mean, to me, Christy was always kind of
Speaker 9: the most interesting guy in the race, always going to
Speaker 9: be a long shot, but you know, blunt, obnoxious, unafraid
Speaker 9: to kind of speak truth to power, and just from
Speaker 9: a kind of a journalistic standpoint, super entertaining guy and
Speaker 9: fun to be around.
Speaker 5: So I actually went out.
Speaker 9: And traveled with him. I was in North Carolina, all right, sorry,
Speaker 9: New Hampshire, South Carolina, kind of watching how people reacted
Speaker 9: to him, and I got to be honest, Even then,
Speaker 9: you could tell what his problem was going to be.
Speaker 9: You know, you'd have these town hall events and people
Speaker 9: would flock to them, and I'd go talk to them after,
Speaker 9: and like half of them were Democrats. Like, the problem
Speaker 9: is the appeal that Chris Christie has is not a
Speaker 9: hardcore Republican primary voters. It's to people who don't like
Speaker 9: Donald Trump. And yes, that's a narrow sliver of Republican voters,
Speaker 9: but what it mostly was was kind of aggrieved Democrats
Speaker 9: who liked to hear a Republican beating on Trump.
Speaker 3: Who'd have thunk when you or did you think when
Speaker 3: you wrote your first book that, I mean Donald Trump,
Speaker 3: was he just going to be kind of a one off?
Speaker 3: Or was he going to be something that was so
Speaker 3: pivotal to the Republican Party and really such a part
Speaker 3: of I feel like every political conversation.
Speaker 9: I mean, by the time I wrote my first book
Speaker 9: of twenty seventeen, Devil's Bargain was about the rise of
Speaker 9: Trump and Bannon in that campaign. You know, Trump was
Speaker 9: in the White House and it was pretty clear, like
Speaker 9: to me anyway, this wasn't going to be a one
Speaker 9: off thing. I mean, Trump and trump Ism are here
Speaker 9: to stay. I mean, whether whether or not he avoided
Speaker 9: you know, indictment or this or that or could could
Speaker 9: like when reelection, I think was and is an open question.
Speaker 9: But such a powerful force of personality. You could see
Speaker 9: already the way he's dominating Republican politics in a way
Speaker 9: that's made it just impossible so far for challengers, including
Speaker 9: Chris Christy to knock him off his throne.
Speaker 4: Is it just the personality?
Speaker 2: What is it?
Speaker 3: Because I was trying to think, is there somebody of
Speaker 3: another politician, you know, in our lifetime that obviously maybe
Speaker 3: didn't cause what someone would say the chaos, but was
Speaker 3: also just so charismatic and just had that personality.
Speaker 9: In a very very different way I think Barack Obama
Speaker 9: did for Democrats. I mean it was almost like this
Speaker 9: kind of religious ecstasy when you would go to Obama
Speaker 9: events when he was first running, even back when he
Speaker 9: was still a senator, and people were just so excited
Speaker 9: about that. It's a similar phenomenon when you go to
Speaker 9: Trump events that this isn't you know, the people in
Speaker 9: the crown, This is not just another politician, This is
Speaker 9: someone special in being here, seeing them as like some
Speaker 9: kind of a quasi mystical experience. There have been others,
Speaker 9: but it's really really rare.
Speaker 5: Josh. If we were areded to make comparisons to your
Speaker 5: first book, Devil's Bargain about Trump and about Steve Bannon,
Speaker 5: together with this book, which is about sort of the
Speaker 5: same thing happening on the left, the first thing that
Speaker 5: comes to mind for me is that Republicans have been
Speaker 5: so much more successful it seems like in embracing the
Speaker 5: extremist portion of their party, that is the Donald Trump
Speaker 5: wing up the party. I mean, look, Mike Johnson, a speaker,
Speaker 5: for example, exactly.
Speaker 9: Yeah, No, I think look when Trump's version of right
Speaker 9: wing populism was so intrinsically appealing to Republican voters that
Speaker 9: like it took over the party in the span of
Speaker 9: a month. I mean, I remember actually traveling, you know,
Speaker 9: down to the border with Trump and Bannon when he
Speaker 9: was first running, and at the time still this kind
Speaker 9: of controversial, quasi crazy seeming guy. He seemed like he'd
Speaker 9: be a fun news cycle, maybe a flash in the pan,
Speaker 9: and then like a month later, he's dominating Republican polls
Speaker 9: and he's never looked back. Not quite the same experience
Speaker 9: on the left, I mean, there was definitely a similar
Speaker 9: populist phenomenon in the sense that there really was this
Speaker 9: left wing backlash to Obama and the financial crisis among
Speaker 9: Democratic voters. You could see it in the rise of Warrant,
Speaker 9: and you could especially see it in the rise of
Speaker 9: Bernie Sanders's presidential campaign in twenty fifteen. He too, really
Speaker 9: kind of caught fire and suddenly had these big national audiences,
Speaker 9: somewhat in the way Trump did with Republicans, but he
Speaker 9: never took over the entirety of the Democratic electorate the
Speaker 9: Democratic Party in the way that Trump did on the
Speaker 9: Republican side.
Speaker 3: We're talking about Josh Green, his new book Out the Rebels,
Speaker 3: Elizabeth Warren, Bernie Sanders, Alexandria Ocasio Cortes, and the struggle
Speaker 3: for new American politics. What's interesting, Josh is I feel
Speaker 3: like so many conversations we still have around this table,
Speaker 3: political or other business. We talk about the pandemic impact
Speaker 3: right and kind of where we are, where we were,
Speaker 3: and how it continues to affect us as a society.
Speaker 3: But the two thousand and eight financial crisis is such
Speaker 3: a crucial part of your book, and I think you
Speaker 3: write one event that shaped recent American politics more than
Speaker 3: any other. Talk to us about the importance of that
Speaker 3: event and how it continues to shape us.
Speaker 9: So to me, as a kind of middle aged Washington
Speaker 9: reporter slash author historians who's been on the scene for
Speaker 9: a while, the two thousand and eight financial crisis is
Speaker 9: the tectonic event in modern American politics. And it was
Speaker 9: clear at the time it was going to be a
Speaker 9: big deal. But I don't think we understood the aftershocks
Speaker 9: from that earthquake. And you could see it initially in
Speaker 9: the rise of the Tea Party movement and Occupy Wall Street,
Speaker 9: both at which I covered. You could see it in
Speaker 9: the rise of the populist right, Donald Trump, Steve Bannon,
Speaker 9: outlets like Breitbart News, the way that took over the
Speaker 9: Republican Party. But what interested in me for this book
Speaker 9: was that there was really a similar phenomenon on the
Speaker 9: left and like the one on the right, I think
Speaker 9: it really stemmed from economic issues, that broad sense of
Speaker 9: anger and economic dislocation, not just from the crash, but
Speaker 9: from the austerity and job loss that followed in the
Speaker 9: recovery that really shaped American politics in twenty sixteen. Weirdly enough,
Speaker 9: the book is kind of bookended by a second economic crisis,
Speaker 9: the COVID crash. But what's happened since then, I think
Speaker 9: has been less economic driven and more cultural driven. And
Speaker 9: partly that's because Trump and Biden both instituted a very
Speaker 9: successful economic response to the COVID crash. Big stimulus is
Speaker 9: all kinds of middle class support, Wall Main Street. It
Speaker 9: was more more Main Street than Wall Street this time around.
Speaker 9: I think you see that in the robust economic numbers
Speaker 9: we're seeing today. But rather than have Americans be super
Speaker 9: happy and gratified and eager to reelect Joe Biden. Instead,
Speaker 9: the big political fight is shifted on a cultural terrain,
Speaker 9: and COVID really drove that with mask mandates and vaccines. Uh,
Speaker 9: you know, in Trump and Democrats fighting and Anthony Fauci,
Speaker 9: and that's where we are today, you know, economically better off,
Speaker 9: but still as Americans kind of angry in each other's throats.
Speaker 5: Do you think in any world, Josh, there could be
Speaker 5: a singular candidate who could unite both populist wings of
Speaker 5: each party.
Speaker 9: You know, I used to, but I really don't because
Speaker 9: of the cultural because of the cultural angle.
Speaker 10: Yeah.
Speaker 9: I mean, look, you can look today at Donald Trump's
Speaker 9: policies and at Joe Biden's policies, and on economics, there's
Speaker 9: real populist overlap. You know, Biden kept Donald Trump's tariffs
Speaker 9: and you know a lot of the thing China policy, right,
Speaker 9: Trump for his entire presidency said, you know, this is
Speaker 9: going to be infrastructure week, This is going to be
Speaker 9: infrastructure week. It never was, but Joe Biden got a
Speaker 9: lot of that passed and instituted. So there are certainly
Speaker 9: areas of overlap on economics. But as you said, culturally,
Speaker 9: I think the two parties are farther apart than ever.
Speaker 3: If the two thousand and eight financial crisis hadn't happened,
Speaker 3: where might we be politically?
Speaker 4: Would we have seen this wave of populism.
Speaker 9: I can't imagine that we would have, you know, to me,
Speaker 9: I mean, my analysis doing all the reporting and all
Speaker 9: the kind of you know, historical digging I did for
Speaker 9: the rebels was that we've seen this kind of populous
Speaker 9: backlash before, after the Great Depression in the nineteen forties.
Speaker 9: But if there hadn't been a crash in two thousand
Speaker 9: and eight, I don't know what event would have been
Speaker 9: there to kind of generate that backlash. Maybe it would
Speaker 9: have been, you know, maybe would have been about something else,
Speaker 9: but I don't think it would have been an economic populace.
Speaker 4: And then Donald Trump had made his way to the
Speaker 4: White House.
Speaker 9: It's like, it's funny, it's hard for me to imagine
Speaker 9: he would, but you know, I wouldn't rule it out,
Speaker 9: because I mean, Trump is such a natural entertainer not
Speaker 9: to go off on too big a degression. In the
Speaker 9: last book, Devil's Bargain, about the rise of Trump, I
Speaker 9: did a big chapter on how Trump, you know, when
Speaker 9: he was on TV, had huge appeal to black audiences,
Speaker 9: to minority ornis is they love the Apprentice. So I
Speaker 9: could imagine an alternate universe in which Trump had run
Speaker 9: as this kind of bipartisan, centrist, entertainer, celebrity figure who
Speaker 9: just got everybody excited and united the country. But that
Speaker 9: obviously is not the world we've wound up in.
Speaker 5: I mean, what is so wild at the end of
Speaker 5: the day is Trump is hardly the picture of the
Speaker 5: populist who he is set to appeal to. I mean,
Speaker 5: this is a guy who's inherent exactly you know, flies
Speaker 5: on private jets everywhere, calls himself a billionaire. Whether that's
Speaker 5: true or not can be debated. Hey, speaking of characters,
Speaker 5: I want to get to a couple of the characters
Speaker 5: that you highlight in The Rebels Elizabeth Warren, Bernie Sanders,
Speaker 5: Alexandro Casier Cortez and the Struggle for a New American Politics,
Speaker 5: your new book that came out yesterday. I want to
Speaker 5: go to aoc because it was such a shock in
Speaker 5: twenty eighteen when she ended up beating Crowley in the
Speaker 5: Democratic primary and essentially becoming the new face of at
Speaker 5: least for young Democrats out there progressive politics. What is
Speaker 5: her future in the party?
Speaker 9: Boy, you know, it's a good question. I mean, she's
Speaker 9: such an interesting narrative thread in the book because you
Speaker 9: can trace her genesis from the Occupy Wall Street movement.
Speaker 9: Like a lot of the people that surrounded her and
Speaker 9: helped organize that original campaign to knock off Joe Crowley
Speaker 9: and got her elected were Occupy Wall Street veterans, And
Speaker 9: so you can trace a line from that economic discontent
Speaker 9: on the left to her congressional career. I think the
Speaker 9: path forward for her is really tough to see because
Speaker 9: she doesn't strike me as someone, at least not right now,
Speaker 9: who could really hope to win statewide office in New
Speaker 9: York senator, governor. I think she's coded as kind of
Speaker 9: being too radical.
Speaker 5: Oh that's interesting, I do, so the obvious.
Speaker 9: Path forward to me, And she's kind of hinted and
Speaker 9: alluded that this might be in the future in twenty
Speaker 9: twenty eight, maybe she runs for president. It's kind of
Speaker 9: a Bernie Sanders style factional Democratic candidate. Certainly she would
Speaker 9: be the one that would stand to inherit that mantle
Speaker 9: and that movement, if that's what she decided to do,
Speaker 9: but I think she's still trying to figure out what
Speaker 9: exactly she wants to accomplish. And I think whether or
Speaker 9: not Joe Biden wins, and how that winner loss is
Speaker 9: interpreted after the fact, will do a great deal to
Speaker 9: kind of shape the world in which she's going to
Speaker 9: have to run if she decides that that's what she
Speaker 9: wants to do.
Speaker 3: What's important in terms of the world. And I think
Speaker 3: about our audience who are listening and watching understand about
Speaker 3: Elizabeth Warren and her role in all of this.
Speaker 9: I think really that she is the one that helped
Speaker 9: shift the Washington Democrats in the direction of this kind
Speaker 9: of democratic populacem Bernie Sanders had been in, you know,
Speaker 9: around saying these sort of things like since I was
Speaker 9: a little boy, and nobody really listened to it before
Speaker 9: two thousand and eight, he would. He was kind of
Speaker 9: a gadfly, you know. But but Warren came in and
Speaker 9: very skillfully used her platform versus the tarp oversight cop
Speaker 9: that kind of bailout before she was in the Senate,
Speaker 9: just to shift the whole public conversation. I mean, I
Speaker 9: tell a long I have a long chapter in the
Speaker 9: rebels about how Warren kind of came on the scene
Speaker 9: and was one of the first people in Washington to
Speaker 9: leverage YouTube and social media to help shape media coverage.
Speaker 9: She was a darling of John Stewart and The Daily
Speaker 9: Show back when like that was the show that everybody watched,
Speaker 9: and it really helped change what the Democratic elector had
Speaker 9: cared about and talked about in a way that forced
Speaker 9: Democratic politicians to respond. So I think she's been instrumental
Speaker 9: in kind of shaping the broader contours of the modern
Speaker 9: Democratic Party, even though she ran for president in twenty
Speaker 9: twenty and lost.
Speaker 4: How much does Joe Biden you think listened to her.
Speaker 9: I think he listens to her a lot. I mean,
Speaker 9: all you have to do is look at a list
Speaker 9: like the roster of who's staffing the upper echelons of
Speaker 9: his administration. A lot of them are Elizabeth Warren people.
Speaker 9: And I talked to a former Biden official in the
Speaker 9: book very much as centrist, not a not a lefty,
Speaker 9: who said, look, Warren and Sanders were not controversial people
Speaker 9: in Joe Biden's White House. We spend all our time
Speaker 9: worrying about Joe Manchin and Kirsten Cinema the centrists who
Speaker 9: gave Biden so much headache. So I think that's a
Speaker 9: good measurement of just how far the Democratic Party has
Speaker 9: shifted in this left populist direction, at least on economics.
Speaker 5: Hey, Josh, we got forty seconds left. What happens to
Speaker 5: the rebels If Joe Biden loses.
Speaker 9: Boy, that's a great question. I think that it will
Speaker 9: discredit in the public sizes are certainly in the democratic
Speaker 9: political world's eyes a lot of what they've done, and
Speaker 9: I think it will and a real problem for Democrats
Speaker 9: moving forward, because if you just look at the raw
Speaker 9: economic numbers we see today, it's really been a remarkable
Speaker 9: recovery in America from that COVID crash. So a lot
Speaker 9: to be said, I think on behalf of robust government
Speaker 9: response to kind of recessions things like that. But if
Speaker 9: Biden loses and it's attributed to high inflation and government
Speaker 9: spending in the policies of people like Warren Bernie and AOC,
Speaker 9: then I think most Democrats are going to reject that
Speaker 9: going forward, the same way that Democrats rejected Jimmy Carter
Speaker 9: and his brand of politics in the nineteen eighties.
Speaker 5: So it's so wild, given that the policies aren't that
Speaker 5: removed from one another. It's the cultural stuff.
Speaker 9: History is so contingent.
Speaker 4: Yeah, great stuff. Thank you so much.
Speaker 9: Thank you guys, appreciate all the time.
Speaker 11: Of course.
Speaker 3: Bloomberg Business Week National correspondent Josh Green. His new book
Speaker 3: is The Rebels Elizabeth Warren, Bernie Sanders, AOC and the
Speaker 3: Rise of the New Laft really the struggle for a
Speaker 3: new American politics.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen on.
Speaker 2: Bloomberg dot com, the iHeartRadio app, and the Bloomberg.
Speaker 1: Business app, or watch us live on YouTube.
Speaker 3: All right, so we're gonna switch gears a little bit.
Speaker 3: Talk a little bit about the healthcare world. According to
Speaker 3: the Centers for Medicare and Medicaid Services, US healthcare spending
Speaker 3: grew four point one percent in twenty twenty two, for
Speaker 3: a total of four and a half trillion dollars. That's
Speaker 3: about thirteen point five thousand dollars thirteen thousand forget ninety three,
Speaker 3: Sorry I saw that number a per person. That's a lot.
Speaker 1: It is.
Speaker 5: We spent way like when you have a kid.
Speaker 3: You spend a lot more.
Speaker 5: Yeah, major subirth of the kid.
Speaker 3: You spend a lot.
Speaker 5: I was like, oh, we spent way more than that
Speaker 5: last Well, fortunately we didn't. Our insurance company did.
Speaker 3: Yeah, exactly, Carol.
Speaker 5: Spending on healthcare accounting for seventeen point three percent of
Speaker 5: US GDP. Needless to say, there is a lot of
Speaker 5: money in healthcare.
Speaker 3: Right next us comes to us from well Sky It's
Speaker 3: a B to B tech company. It provides tech services
Speaker 3: for healthcare providers, insurance companies, social services providers, and a
Speaker 3: lot more. It is backed by the private equity firms
Speaker 3: TPG and Leonard Green and Partners. The company Tim has
Speaker 3: a great read on the money flows throughout the complex
Speaker 3: healthcare ecosystem and where efficiency can be found. I'm hearing
Speaker 3: it spending.
Speaker 8: Yeah.
Speaker 5: Amy Shellhard is Chief Solutions Officer at Well Scott. She
Speaker 5: joins us on Zoom from Springfield, Missouri. Amy, Happy New Year.
Speaker 5: How are you?
Speaker 12: Thank you? Happy New Year? I'm great, Ready for wonderful
Speaker 12: twenty twenty four.
Speaker 5: Thanks for having me so explain for the layperson what
Speaker 5: exactly well skypowers.
Speaker 12: Well will skypowers, as you said, technology services and analytics
Speaker 12: that support over twenty thousand clients, and to sort of
Speaker 12: put that in perspective, it's about two thousand hospitals one
Speaker 12: hundred and thirty thousand providers. So if you think about
Speaker 12: care being provided in the home, it's one in three
Speaker 12: home care based providers utilize our system over five million caregivers.
Speaker 12: So a lot of the technology, again, the services and
Speaker 12: the analytics that help them do their jobs every day.
Speaker 3: Well, I said to our producer this morning when we
Speaker 3: were getting ready and prepping for our show and we're
Speaker 3: talking about your company and you coming on, I said, so.
Speaker 4: It's like back office. Is that what it is?
Speaker 3: Or is it infrastructure? Tech? Infrastructure?
Speaker 12: It's actually all of that, right, So when we think
Speaker 12: of back office, we think of things that power the operations. Right,
Speaker 12: think of a home health agency of back offices. How
Speaker 12: do they do scheduling, how do they do billing? Right
Speaker 12: those pieces our solutions do those, but also how do
Speaker 12: they deliver care.
Speaker 11: In the home.
Speaker 12: How do they engage with patients via tell health of
Speaker 12: video visits, how do they determine how to assess a
Speaker 12: patent and what types of content that they need to
Speaker 12: provide the patient. From an educational perspective, we run the
Speaker 12: full spectrum of all of those, both in home as
Speaker 12: well as in specialty care areas like l tax and
Speaker 12: sniffs and home infusion. Really all of posts acute care
Speaker 12: and our solutions also power discharge planning in hospitals as well.
Speaker 5: So talk to me about what you're seeing from the hospitals,
Speaker 5: from the insurance companies at the end of last year
Speaker 5: and going into this year. I mean, Carol said it
Speaker 5: spend certainly a big part of this. How are the
Speaker 5: how is spending right now?
Speaker 12: Well, it's a huge piece of it. Right as you mentioned,
Speaker 12: healthcare spend really in our country continues to be something
Speaker 12: we're all challenged with. I think what we're seeing from
Speaker 12: our providers is they want to make sure as the
Speaker 12: spend increase, that they're getting more ways to augment and
Speaker 12: support their very limited staff. And so that sort of
Speaker 12: thinking about the trends of what are our clients saying, Look,
Speaker 12: their most costly expense is their staff, and staff are
Speaker 12: becoming harder and harder to come by. We're seeing shortages
Speaker 12: both in skilled and non skilled care. In fact, in
Speaker 12: the next five years, we're expecting to see a shortage
Speaker 12: of three point two million essential low wage healthcare workers,
Speaker 12: and so they're really looking to us as technology services
Speaker 12: and analytics providers to help them with technology solutions that
Speaker 12: allow them to work with less people but process more patients. So,
Speaker 12: if you ask, you know what's happening as we look
Speaker 12: at from last year, Feminine, in this year, we're still
Speaker 12: seeing our healthcare systems, you know, heavily utilized, still dealing
Speaker 12: with large volumes of COVID patients. We're seeing increased discharges
Speaker 12: to skilled nursing facilities, increased discharges to home health, which
Speaker 12: means that patients are coming out sicker, they're not able
Speaker 12: to just go home on their own, They're needing to
Speaker 12: have follow up care, skilled care, either again in skilled
Speaker 12: nursing facilities or the home. So a lot of pressure
Speaker 12: on the healthcare system in general.
Speaker 3: What's cool with talking about this with someone like yourself?
Speaker 3: You know, your title is chief Solutions Officers, so you're
Speaker 3: obviously working with companies to kind of figure out how
Speaker 3: you guys can help them with some of their back
Speaker 3: office or our IT spend and needs, if you will.
Speaker 3: Having said that, you know, Amy, we're at this interesting
Speaker 3: point new year. We're kind of thinking and trying to
Speaker 3: figure out what comes ahead. There's a lot of questions
Speaker 3: about that in terms of the economy, what the FED does,
Speaker 3: how that impacts growth potentially. So having said that, IT
Speaker 3: spend is always an important indicator. We always feel how
Speaker 3: would you compare the IT spend and what you're getting
Speaker 3: from some of the clients that you work with in
Speaker 3: figuring out solutions. Is it going down compared to I
Speaker 3: don't know what's the smart metric the past six months,
Speaker 3: the past year. Is it slowing down? Our companies thinking
Speaker 3: really hard before they do an additional IT spend right
Speaker 3: now here on January third, twenty twenty four.
Speaker 12: You know, that's an interesting question. We are seeing more scrutiny.
Speaker 12: So I think that to that point, we are seeing
Speaker 12: more scrutiny of the spend. We're being asked to deliver
Speaker 12: more outcomes and value, which frankly we embrace. And what
Speaker 12: I mean by that is they know they have to
Speaker 12: spend the dollars because they have to solve these problems
Speaker 12: like these staffing shortages, problems in the higher volumes of
Speaker 12: patients that they're seeing. So what they're saying to us is,
Speaker 12: as we spend this money, we want in some cases
Speaker 12: share bris so tell us what kind of outcomes we're
Speaker 12: going to achieve with your technology, and go at risk
Speaker 12: with us so that if those outcomes don't emerge, you
Speaker 12: have a little bit of a skin in the game.
Speaker 12: We see longer cycles for making decisions. We're seeing some
Speaker 12: of that longer decision making cycles. But I would say
Speaker 12: in general, they're still spending money. They're just being more
Speaker 12: scrutinius in terms of what the expectations are. I think,
Speaker 12: in a really good.
Speaker 3: Way, help that in a recessionary way.
Speaker 12: I will tell you that while we have seen the
Speaker 12: cycles take longer, we're still we're still having those effective
Speaker 12: sales processes. Okay, but the conversations are getting tougher, and
Speaker 12: again I will give them credit for that. Conversations getting
Speaker 12: tougher around. Show us the outcomes, show us the.
Speaker 3: ROI great count the ROI we're going to get.
Speaker 5: Yeah, it's interesting.
Speaker 3: Yeah, Amy, Thank you so much. Amy Shellhart, chief Solutions
Speaker 3: Officer of at Well skyt jetting us on zoom from Springfield, Missouri.
Speaker 3: Conversations on it spend getting harder. That's my thought for
Speaker 3: the day.
Speaker 4: This is Bloomberg.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Easter on Bloomberg Radio,
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Speaker 1: Just Say Alexa Play Bloomberg. Eleven thirty.
Speaker 5: US regulators for the first time approving ETFs that invest
Speaker 5: directly in bitcoin. This is a move heralded as a
Speaker 5: landmark event for the roughly one point seven trillion dollar
Speaker 5: asset industry, the digital assets sector that will broaden access
Speaker 5: to the largest cryptocurrency on Wall Street and beyond. The SEC,
Speaker 5: whose three part mandate includes investor protection authorized eleven funds
Speaker 5: to begin trading on Thursday. Let's now go to Carol Masser,
Speaker 5: who's standing by with Kathy Wood, the CIO, CEO and
Speaker 5: co founder of ARC invest.
Speaker 3: All right, so, Kathy, what do you think about in
Speaker 3: this moment of time, as we said, this has been
Speaker 3: in coming.
Speaker 13: Yes, Well, when you're talking about institutions that you know,
Speaker 13: have been very fearful of this space, I think they're
Speaker 13: going to tread lightly. I don't know if you saw,
Speaker 13: but Gary Gensler put out a piece and he just
Speaker 13: denigrated the whole crypto space, and I was just like,
Speaker 13: I couldn't believe it. So anyway, it's with that kind
Speaker 13: of trepidation that institutions are going to have to, you know,
Speaker 13: work through and do all of their due diligence. However,
Speaker 13: I do think that a lot of investors have been curious.
Speaker 13: And you'll see we've been from a marketing campaign. We've
Speaker 13: been using this tagline, aren't you a bit curious? There
Speaker 13: are so many people who are curious out there. Of course,
Speaker 13: a lot of our existing clients know all about bitcoin
Speaker 13: because we have owned it since twenty fifteen, but there
Speaker 13: are a lot of people who really have a hunger
Speaker 13: to know, and we can see that as more and
Speaker 13: more people read our research, tune into our Bitcoin Brainstorm
Speaker 13: that we do with Rod and Bitcoin Park in Nashville, Tennessee,
Speaker 13: read our bitcoin monthlies, we are getting all the curiosity.
Speaker 13: I think that's why we started, so we know a
Speaker 13: lot of people are waiting and believe it or not, Carol,
Speaker 13: the curious extend to state pension funds and state treasurers
Speaker 13: we're talking to.
Speaker 8: It's a really broad swap well catch people.
Speaker 3: And I do wonder what you think success will be
Speaker 3: out of the gate in terms of investment flows, which
Speaker 3: your goal or estimate in terms of bringing investors into
Speaker 3: the fund.
Speaker 8: Well, it's very interesting.
Speaker 13: I was speaking to Eric Beltunis, your colleague, and according
Speaker 13: to his estimates, there's four billion dollars waiting in the wings,
Speaker 13: and I said to him, well, from your lips to
Speaker 13: God's ears, that would be amazing, and we hope we
Speaker 13: get our fair share of it. I mean, we've certainly
Speaker 13: done a lot to educate the community, and we experience
Speaker 13: a lot of gratitude for that too from the innovation communities,
Speaker 13: including the bitcoin community, but also from the financial community,
Speaker 13: those who really are trying to find the net big idea.
Speaker 13: The old guard basically throw out there all kinds of risks,
Speaker 13: and you know, some people call it fear, uncertainty and doubt.
Speaker 13: It happens every time, Carol, And I'm not saying it's
Speaker 13: a bad thing for people to really do their homework.
Speaker 13: They should do their homework, they should understand the risks.
Speaker 13: But this is par for the course in disruptive innovation.
Speaker 13: This is completely new DNA, and so it's the old
Speaker 13: DNA basically bashing the old new DNA. But truth wins out.
Speaker 13: Truth wins out ye.
Speaker 3: And one thing I want to ask you is as
Speaker 3: like yourself, all of us here in the newsroom, you know,
Speaker 3: watching just you know, new things come into the market
Speaker 3: over decades, and this is certainly interesting, but we are
Speaker 3: still wondering about the real case use I mean that
Speaker 3: no one has really demonstrated a real life use case
Speaker 3: when it comes to bitcoin.
Speaker 8: We think about it all the time.
Speaker 13: Our first paper, white paper, was all about could bitcoin
Speaker 13: serve the three rolls of money means of exchange, store
Speaker 13: of value, unit of account. Most people are thinking store
Speaker 13: of value right now. But I'm going to plug one
Speaker 13: of our bitcoin brainstorms if you want a mind blowing experience.
Speaker 13: And I am lucky to be able to ask questions
Speaker 13: on these brainstorms, which was about the convergence of bitcoin
Speaker 13: and artificial intelligence. And we had on people who are
Speaker 13: toiling to make all of this happen. And I have
Speaker 13: to tell you what's going on in the emerging markets
Speaker 13: and the division of labor, the redefinition of labor a
Speaker 13: little bit like what happened to the gig economy here,
Speaker 13: but put that on steroids.
Speaker 8: Put that on steroids. It's already starting to happen. So
Speaker 8: I would.
Speaker 13: Highly, highly highly advise anyone interested in trying to figure
Speaker 13: out how the world is going to work listen to
Speaker 13: that Bitcoin brainstorm, because it's already starting to work in
Speaker 13: the emerging markets where they need it so desperately.
Speaker 3: Kathy, what's the advantage of the arc spot Bitcoin ETF
Speaker 3: over the others who also got approved? You know, we've
Speaker 3: been reporting a lot about this kind of war on fees.
Speaker 3: So what's the advantage of going with you versus a
Speaker 3: black Rock or a Fidelity or some of the other
Speaker 3: players who are out there?
Speaker 8: At least three advantages? Carol.
Speaker 13: First, we selected our partner very carefully. Twenty one Shares
Speaker 13: is the largest peer play crypto ETP provider in the
Speaker 13: world with two and a half billion dollars in assets.
Speaker 13: So what does that mean. That means with their forty
Speaker 13: funds before we launched with them, with their forty funds
Speaker 13: launched over five years, they have battle tested their infrastructure
Speaker 13: over booms and busts, over crises, over havings, over four kings.
Speaker 13: This is not normal for the ETF world, and we
Speaker 13: think the other ETF providers have a lot to learn,
Speaker 13: and I'm sure they are and they will as we
Speaker 13: go through these different kinds of experiences and they have
Speaker 13: economies of scale, believe it or not, that have enabled
Speaker 13: us to drive down our fees. This way, we have
Speaker 13: more economies of scale because of the infrastructure that twenty
Speaker 13: one shares have built out.
Speaker 8: So that's the first.
Speaker 13: The second is research. Both of us give our research
Speaker 13: a w for free. Our research started in twenty fourteen.
Speaker 13: We were trying to understand the technology, and then when
Speaker 13: Chris Berniski took over, we fast forwarded into understanding bitcoin
Speaker 13: is money and then a new asset class. So we
Speaker 13: have been taking our clients' perspective. Clients, anyone who wants
Speaker 13: to read our research, this journey with us through deep,
Speaker 13: deep research, and it's getting deeper under Yassin's leadership. So
Speaker 13: that's the second and then the third, and this one
Speaker 13: is not to be underestimated us, especially when it comes
Speaker 13: to the wirehouses like the Morgan Stanley's, the Merri Lynch,
Speaker 13: the ubs Wells Fargo. Our salesforce, our distributor has had
Speaker 13: our etf specials. Specialists have had to understand bitcoin since
Speaker 13: we struck our partnership in twenty sixteen. Story Rebecca Burke,
Speaker 13: who's our most senior ETF specialist joked with me the
Speaker 13: other day she said, do you know when I was
Speaker 13: coming to interview to I looked up what is bitcoin?
Speaker 13: And we all laughed about it because now she not
Speaker 13: only understands it, she believes in it. Her conviction is
Speaker 13: how she's able to share that message and hold client's
Speaker 13: hands when bitcoin goes through some of the volatility that
Speaker 13: we see it go through regularly. So I think those
Speaker 13: three we have the infrastructure and operations. We have the research,
Speaker 13: deep research, and we've been doing it longer than anyone else.
Speaker 13: And three we have a support team a sales team
Speaker 13: that I don't think anyone else out there can beat
Speaker 13: because we've been doing it together for seven years already.
Speaker 13: And the same for twenty one Shares. More on the
Speaker 13: institution side, they have been working with their clients for
Speaker 13: five years.
Speaker 3: One of the things we wondered about, Kathy, what is
Speaker 3: the recourse if a custodian who holds the keys to
Speaker 3: bitcoin loses them, you know, are they're hacked. What's the
Speaker 3: investor recourse?
Speaker 13: You know what we have with us on those call
Speaker 13: Ophelia and Hanny, who are the founders of twenty one
Speaker 13: Shares this. You're talking about infrastructure operations. This is what
Speaker 13: I'm talking about. May I open up the floor to them.
Speaker 3: Aphelia, you want to come in on that.
Speaker 8: You are a partnership. You know it's a partnership with you.
Speaker 3: At our absolutely, what's your thought on that in terms
Speaker 3: of concerns that if something happens, if it is hacked,
Speaker 3: what's the investor recourse?
Speaker 14: So people are completely right to be concerned. This is
Speaker 14: the whole point. This is not like stocks and bonds.
Speaker 14: This requires a very different level of infrastructure, and so
Speaker 14: I think the first step in this discussion is very
Speaker 14: clearly prevention. You need to billed as robust of a
Speaker 14: setup as possible, and you need to battle test it.
Speaker 14: So we've been battle testing our implementations with custodians, our
Speaker 14: technical infrastructure, in the way in which we safeguard assets
Speaker 14: for five years. That's the entire point. You can't treat
Speaker 14: this like any other asset in the world. It's a
Speaker 14: bearer asset and it's held in a very technical way.
Speaker 14: So one of the things that we do is we
Speaker 14: obviously we use a concept called cold storage. That means
Speaker 14: is that these assets are held offline in wallets, that
Speaker 14: have never been brought into the Internet, so you've never
Speaker 14: used them before, which means that they are the information
Speaker 14: related to the private key doesn't exist on the Internet.
Speaker 14: It's sort of you can think of it as the
Speaker 14: diametric opposite of cloud storage. You essentially end up with
Speaker 14: a private key that's been charted, so it's been split
Speaker 14: into multiple pieces, and you need to bring multiple pieces
Speaker 14: online at the same time. Those pieces are held in
Speaker 14: vaults that are geographically distributed in order to control access
Speaker 14: to these products, and then we obviously have a really
Speaker 14: robust set of controls around that in terms of how
Speaker 14: you initiate transfers and how you actually move assets, because
Speaker 14: the most dangerous part of custody is actually very much
Speaker 14: the point at which you access it right. Very frequently,
Speaker 14: you know, when people say, oh, somebody took over my
Speaker 14: exchange account, the underlying wallet's not being hacked. What's actually
Speaker 14: happening is that their security and access protocols are being
Speaker 14: compromised in some way. And so it's really important how
Speaker 14: you actually secure these assets and why you need to
Speaker 14: go with a provider that's actually going has a track
Speaker 14: record of doing this and knows what they're doing through
Speaker 14: a variety of market conditions because this is actually a
Speaker 14: very very technical space.
Speaker 3: I appreciate that Ophilias Night, our co founder president of
Speaker 3: twenty one years, and of course offering up the Bitcoin
Speaker 3: ETF with our investments, Kathy. One thing I also think
Speaker 3: as concerns about the price of bitcoin, the volatility. The
Speaker 3: last three full year returns means of three hundred and
Speaker 3: five percent twenty twenty up another sixty twenty one, followed
Speaker 3: by a loss of sixty four percent twenty twenty two.
Speaker 3: It's a market that can move around. We saw a
Speaker 3: little bit of a pop at bitcoin. Will volatility continue
Speaker 3: to be a risk or something that investors have to
Speaker 3: be very much aware of? And I'm curious, what is
Speaker 3: your price forecast at this point now that you've got
Speaker 3: the SEC approval for bitcoin.
Speaker 13: The volatility, this again is natural for disruptive innovation that
Speaker 13: is taking market share in any market. So it's it's normal, Carol.
Speaker 13: You've seen from our funt how disruptive innovation can can
Speaker 13: be affected by exogitiveness factors that don't have anything to
Speaker 13: do with the share they're actually gaining. In fact, we
Speaker 13: know that during tough times, innovation gains more traction because
Speaker 13: it's better, cheaper, faster, more productive, and so forth and this,
Speaker 13: And you saw this during the regional bank crisis. The
Speaker 13: regional banks imploded, the krry index imploded, we saw bankruptcies,
Speaker 13: and bitcoin shot up forty percent.
Speaker 8: Why, it's a flight to safety.
Speaker 13: It will not be a victim of counter of counterparty
Speaker 13: risk the way the banks will. So it's it's actually
Speaker 13: as time goes on and we go through more and
Speaker 13: more crises, and it seems the way government spending and
Speaker 13: monetary policies go, you know that that is not going
Speaker 13: to change. I think bitcoin is going to prove it's
Speaker 13: worth you know, one thing in terms of price, and
Speaker 13: then I'd like to just talk about fees because that's
Speaker 13: so contest. Yes, so our price target, our our bull
Speaker 13: price target, and I would say institutional money moving in
Speaker 13: makes our bull price target more likely. Now is one
Speaker 13: point five million dollars in twenty thirty and you can
Speaker 13: see and big ideas are big ideas from last year
Speaker 13: ar at ark dash invest ourdash invest dot com. How
Speaker 13: we the building blocks for that number, and institutional is
Speaker 13: one of the biggest reasons in terms of fees. You'll
Speaker 13: notice twenty one that's a very special number. First of all,
Speaker 13: those are our partners twenty one but also twenty one
Speaker 13: million units, our twenty one million bitcoin. That is the
Speaker 13: total number that will be printed or minted right there.
Speaker 13: It will not go past twenty one million. This is
Speaker 13: called this is called a rules based monetary system. And
Speaker 13: so the fee, we thought that was clever, and we
Speaker 13: were going to start out with that one, but we
Speaker 13: knew what was going to happen, so we ended up there.
Speaker 13: But I want to bring back something I mentioned other before.
Speaker 13: We already have the economies of scale that others do
Speaker 13: not because of our partner twenty one shares, and so
Speaker 13: we've been able to negotiate down service provider fees in
Speaker 13: a way that we would not have been able to
Speaker 13: if we had done this by ourselves. And the other
Speaker 13: thing I want to emphasize we are not looking to
Speaker 13: maximize profits with this. We are looking at bitcoin as
Speaker 13: a public good. It is a financial super highway and
Speaker 13: we want to increase the access to bitcoin, and one
Speaker 13: of the ways to do that is this low fee product.
Speaker 13: We have other actively managed strategies where we can do
Speaker 13: more on the profitability side. Right, it is not our objective.
Speaker 3: Here, Kathy, just one last question and that I'm glad
Speaker 3: we got that thirty seconds is to wrap up. I mean,
Speaker 3: what does success look for you guys in a year
Speaker 3: from now with this particular product.
Speaker 13: Well, I think I think we will be a part
Speaker 13: of the success of bitcoin broadly. I think this opens
Speaker 13: a new chapter for bitcoin, and I would like to
Speaker 13: believe we would we will be within the top top
Speaker 13: three or two top providers of bitcoin through this Bitcoin ETF.
Speaker 3: All right, just lastly, as you know I like to
Speaker 3: squeeze and stuff fifteen seconds. Is there new cryptocurrent products
Speaker 3: ETFs that might come out from you guys as well
Speaker 3: in the near future.
Speaker 13: Well, we already put with twenty one shares out five
Speaker 13: futures products.
Speaker 8: Those are strategy.
Speaker 13: One last thing I'd like to I'd like to honor
Speaker 13: all of those who have toiled to make bitcoin happen
Speaker 13: through this ETF.
Speaker 8: I want to reassure the community, the bitcoin community.
Speaker 14: That.
Speaker 13: Self custody, self custody and an etfre are not mutually exclusive.
Speaker 13: We want to see this eco system continue to decentralize,
Speaker 13: but we want to bring billions of people into the ecosystem.
Speaker 13: And this is why twenty one basis points.
Speaker 8: ARKB.
Speaker 3: Kathy, I so appreciate you including me on this platform,
Speaker 3: Kathy would Arc invest founder CEO Cio.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern Listen on.
Speaker 2: Bloomberg dot com, the iHeartRadio app and the.
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Speaker 15: I always be hey, did you know that Bloomberg Intelligence
Speaker 15: tracks some two thousand companies in sectors ranging from finance
Speaker 15: to food.
Speaker 4: They watch a lot of stuff.
Speaker 5: We got a great team. It's like the in house
Speaker 5: analysis group Bloomberg Intelligence.
Speaker 3: It absolutely is.
Speaker 5: And you know what they did, tim They found fifty companies.
Speaker 3: Yep, that weren't a closer looks Onbi's list a focus idea.
Speaker 5: I knew this because it's an annual tradition that Bloomberg
Speaker 5: BusinessWeek does. It's a deep dive at the beginning of
Speaker 5: the year. It combines contrarian views and upcoming catalysts for change,
Speaker 5: such as new leadership, asset sales, or acquisitions. Perhaps plans
Speaker 5: for new products and services too well.
Speaker 3: The future is in the upcoming New Year Ahead issue
Speaker 3: of Bloomberg business Week available on newstands later this week,
Speaker 3: already online and on the Bloomberg terminal. Let's get to
Speaker 3: a Tim Craighead, Senior European strategist and director of Research
Speaker 3: Content for Bloomberg Intelligence out there in London. Jill Weber
Speaker 3: is the editor of Bloomberg Business Week. He's right here
Speaker 3: in our Bloomberg Interactive Brokers studio. Jill always do love
Speaker 3: this list and how it comes together. Remind our world
Speaker 3: who are watching and listening, how it does actually come together,
Speaker 3: how these names are chosen.
Speaker 16: Many conversations, and the analyst said, Bloomberg Intelligence just a
Speaker 16: great team to work with and effectively, if I could
Speaker 16: condense what this project is, they take their whole universe
Speaker 16: and then squeeze it through a spreadsheet and what you're
Speaker 16: looking is what comes out on the other side. These
Speaker 16: are not by cell recommendations. We're not going to go
Speaker 16: go there, but we do think they're ones to watch.
Speaker 16: And we've been doing this project for years with this team.
Speaker 16: It seems like it gets better and better every single
Speaker 16: time we do it. We do quarterly updates now. A
Speaker 16: lot of these are these focus ideas that the team
Speaker 16: has a ton of conviction about uh. And we're looking
Speaker 16: often for like things that appear like catalysts, especially as
Speaker 16: we go through the year and do these quarterly updates.
Speaker 4: Which would be good for a name or bad or bad.
Speaker 16: Yeah, and there's something that feels almost like a trigger
Speaker 16: this group, though this is as big as we get.
Speaker 16: We do these fifty and it really feels like we're
Speaker 16: trying to reach around the globe, give you some discoverability.
Speaker 16: Like there will be companies that I think we're going
Speaker 16: to talk about right now that you will have never
Speaker 16: heard about, Carol, I expect you to chime up when
Speaker 16: that happens. And then there are other ones that you're like, Okay,
Speaker 16: what I know this name alphabet?
Speaker 5: But why the year?
Speaker 16: But big thanks to Tim and company in advance. One
Speaker 16: of the things that I think we would be foolish
Speaker 16: not to consider is coming off of last year where
Speaker 16: artificial intelligence became such a dominant theme, there's a whole
Speaker 16: group of companies within the fifty that sort of are
Speaker 16: first and foremost going to be AI stories. Tim, So
Speaker 16: why don't we just start with that. We have not
Speaker 16: when you come to this online or at the terminal,
Speaker 16: this list of companies is just going to be alphabetical.
Speaker 16: But we did a little bit of a courtesy here,
Speaker 16: some modest groupings so that we could kind of talk
Speaker 16: through some of these companies. So alphabet and artificial intelligence
Speaker 16: is that they're not the front runner right now, right Tim.
Speaker 11: Yeah, Well, I have to say it's really interesting, thanks
Speaker 11: for having me on. Artificial intelligence had such hype in
Speaker 11: twenty twenty three, you kind of think, Okay, so what's left?
Speaker 11: Why is this a big deal now? And you might
Speaker 11: think of about that chart of the Gartner type cycle,
Speaker 11: and you know, are we're right at the top before
Speaker 11: it crashes into you know, overdone. We don't think so.
Speaker 11: And there's two elements to this. And actually we just
Speaker 11: published a pretty important Chief Information Officer CIO study survey
Speaker 11: over the last couple of days that stignaled that companies
Speaker 11: were just modeling things in twenty twenty three, and they
Speaker 11: have significant plans to accelerate actual implementation in twenty twenty
Speaker 11: four and twenty five. At the same time, we had
Speaker 11: a tech spending cycle that was in a lull in
Speaker 11: twenty twenty three that we think also will accelerate later
Speaker 11: in twenty twenty four. And you can take those things together.
Speaker 11: Companies that are in the eye of this opportunity are
Speaker 11: a big deal and there's a couple of elements that
Speaker 11: play into this and it is the biggest bucket, if
Speaker 11: you will. Across the fifty. There's infrastructure companies like applebet
Speaker 11: they are creating the infrastructure Barred for example, or Gemini
Speaker 11: in terms of different programs and whatnot that you can
Speaker 11: use generative AI with your business. Amazon you think about
Speaker 11: their retail, but actually one of the biggest businesses they
Speaker 11: have is there're a cloud business that supports AI applications
Speaker 11: for companies. Accenture is a big IT services company and
Speaker 11: they're a consultancy that executes on programs with companies that
Speaker 11: need the advice and counsel. So that's one level and
Speaker 11: not to go too crazy about this. But then you've
Speaker 11: also got applications that you think about get into it.
Speaker 11: You know Turbo tax, if you use that to do
Speaker 11: your taxes. They're starting to implement AI within their programs
Speaker 11: to make tax prep easier. We all know how complicated
Speaker 11: that is. Match Okay, this is a fun one tender.
Speaker 8: Hinge.
Speaker 11: If anybody's listening who uses these dating apps, there's AI
Speaker 11: applications being folded into tender for better photo selection. So
Speaker 11: there's all sorts of stuff going on here from AI
Speaker 11: that we think will gather steam.
Speaker 5: Well, can't wait for the matchmaking.
Speaker 2: Selection.
Speaker 3: Really careful what you wish for. I just want to
Speaker 3: point out and video is not on that list, but
Speaker 3: it's already the sixth best gainer in the s and
Speaker 3: P five hundred, number six on the list, which was
Speaker 3: you know, the top gainer. But you do have a
Speaker 3: name in that list which will all take us back
Speaker 3: to the seventies or some of us back to the seventies. Disco.
Speaker 5: What have you heard of Disco? Well, yes, but have
Speaker 5: you heard of the company Disco?
Speaker 4: Who are they?
Speaker 11: So? Disco is in the stemic inductor equipment business. It's
Speaker 11: a Japanese company, And essentially, as you make the semiconductors
Speaker 11: that fold into Nvidia solutions and other advanced semiconductors that
Speaker 11: support AI, you have to have special equipment to make
Speaker 11: those semiconductors, and Disco is one of those key key
Speaker 11: companies in the equipment spycle, along with some others. But
Speaker 11: we think that this is one that is not quite
Speaker 11: appreciated for the opportunity in front of them.
Speaker 16: I just love that there's this whole suite of companies
Speaker 16: in artificial intelligence that you know, suddenly a chatbot comes along,
Speaker 16: and now we're talking about you know, three, five, ten
Speaker 16: years out. These are some of the companies that I
Speaker 16: think you're going to be talking about a lot more.
Speaker 10: Okay.
Speaker 16: Another big theme tim as we look into next year
Speaker 16: is these expected rate comes cuts from the Fed. But
Speaker 16: they're Feds out alone. There's also going to be some
Speaker 16: pivots at other central banks. Who are some companies that
Speaker 16: could be winners and losers out of that?
Speaker 11: Yeah, i'd sell you. This is another interesting one where
Speaker 11: we had interest rate stories last year, as you might recall,
Speaker 11: but they were margin expansion stories because industrates were going
Speaker 11: up and that's generally good for financials like banks. This year,
Speaker 11: with the prospects of the US Federal Reserve or the
Speaker 11: Bank of England or the European Central Bank pivoting to
Speaker 11: start lowering interest rates, then it's the opposite. So we
Speaker 11: actually have a broad industry negative focus idea on margin
Speaker 11: or profitability prospects for European banks. And Barclay's, one of
Speaker 11: the big UK banks, is a poster child of that.
Speaker 11: It also plays into the insurance business, and we have
Speaker 11: ACXA on the list. And not only do you have
Speaker 11: the falling interest rates, but there's also some industry regulatory
Speaker 11: changes that are occurring that should make insurance companies more
Speaker 11: interst rates sensitive, and so if you do have a
Speaker 11: reduction in interist rates, it's more likely to flow through
Speaker 11: into your earning since we think that complicates the insurance
Speaker 11: industry or access case. And point that said, on the
Speaker 11: flip of that, housing across elements of Europe and certainly
Speaker 11: the UK specifically have been under pressure and home builders
Speaker 11: have suffered housing starts or down a lot. A company
Speaker 11: named Percentment is on the list under the idea that
Speaker 11: it's likely to do better than what's anticipated from consensus
Speaker 11: as interest rates fall and how home building starts to
Speaker 11: pick up. Again.
Speaker 5: That was a name I had not heard before the list. Well,
Speaker 5: I love the project. It's like do you like your Simmons?
Speaker 5: I do, but you know you plies there, but.
Speaker 3: The adr trucks of the United States.
Speaker 16: That's truly, it's just like one of these things you
Speaker 16: would have never probably ran across the company like that,
Speaker 16: And in the middle of it all is a little
Speaker 16: bit of analysis.
Speaker 5: Tim, I got some Uh, there's some companies on here
Speaker 5: too that I think we're all familiar with. Aston Martin
Speaker 5: is a company that is categorized as releasing new products.
Speaker 5: Talk to us about why Aston Martin is one to watch.
Speaker 11: Yeah, I'll tell you if you if you look at
Speaker 11: Aston Martin that iPod back a couple of years ago,
Speaker 11: and it's been a bit of a of a dud.
Speaker 11: They've disappointed. Even though you know the company and you
Speaker 11: can you can visualize the cars in a James Von
Speaker 11: movie and they're super cool. It's not quite executed the
Speaker 11: plan of what was hoped. And as we look into
Speaker 11: twenty twenty four, they've got new sports cars come up,
Speaker 11: and they've got great names, the Advantage twelve it's a
Speaker 11: twelve cylinder car, or the valk here and there's others.
Speaker 11: They got an Sue, yeah, Astmark and Suv and these
Speaker 11: are all we think accelerating growth. They're super high margin
Speaker 11: products and we think that you know, that's yet to
Speaker 11: be Uh. You have to be fully baked into what
Speaker 11: the market's thinking.
Speaker 16: Okay, So let's see we've got some M and a
Speaker 16: how if that goes down? If we you know, deals
Speaker 16: were not exactly high on the list in twenty twenty
Speaker 16: three if twenty twenty four looks better, like who's to watch?
Speaker 11: Yeah, So the ones we have on here from an
Speaker 11: M and A perspective are taking advantage of transactions either
Speaker 11: that have lined up or that they have planned. So
Speaker 11: in the world of energy, Exxon made a very large
Speaker 11: purchase towards the end of last year to increase their
Speaker 11: exposure to the Permian Basin, you know, big old production
Speaker 11: field in the US, and this is going to be
Speaker 11: a year where they can start to execute on that.
Speaker 11: And you know, they have have underperformed in terms of
Speaker 11: their financial performance the likes of Chevron in various ways,
Speaker 11: and you know, this should be an opportunity for them
Speaker 11: to step things up energy transition and all that sort
Speaker 11: of stuff. Setting aside, Stavic Middle Eastern petrochemical company has
Speaker 11: also had a big steel business, so they're getting out
Speaker 11: of their steel business, which should allow them to focus
Speaker 11: in on petrochemicals specifically. And we do think that there's
Speaker 11: a fundamental upcycle they are going through the year, in
Speaker 11: particular in the second half. So those are a couple
Speaker 11: of elements there.
Speaker 3: Well, Hey, Tim just got about a minute and half
Speaker 3: left here consumer products. We're all focused on the consumer.
Speaker 3: Can they keep spending? But there's been a couple of
Speaker 3: companies I think about St. Laura that's been trying to
Speaker 3: kind of figure its way forward. You're watching that, Diagio Aritzia.
Speaker 3: Just quickly give us some thoughts on those.
Speaker 11: Yeah. So they're a whole host of good, big, quality
Speaker 11: brand companies if you think about the products himself, stay
Speaker 11: Lot Cosmetics across all of their brands, DAJO owns a
Speaker 11: number of high end spirits, and they've come under pressure
Speaker 11: over the course of the past six nine months for
Speaker 11: a variety of reasons. Stay Lauder had excess inventory in Asia,
Speaker 11: Diago had too much inventory in the US. We think
Speaker 11: that this is a year where that gets normalized and
Speaker 11: the underlying business of quality, high end product will play
Speaker 11: through with those two companies and they'll play catch up.
Speaker 3: And I have to Sayeah, that's super puff Parker. My sisters,
Speaker 3: you got it. My daughter had to have it. It
Speaker 3: comes into many, many different colors.
Speaker 11: Yeah, very expanding rapidly across the US from a Canadian base.
Speaker 4: Really cool stuff.
Speaker 1: M hm.
Speaker 16: This list well, last last little piece of the puzzle.
Speaker 5: Energy transition.
Speaker 16: We're gonna be short on time, but first solo byd
Speaker 16: Glenncore On that list, there's many, many, many more categories
Speaker 16: and companies. What's so great about it is you just
Speaker 16: get through this and then you go back to it
Speaker 16: at several points this in the year and you're.
Speaker 5: Like, oh, wow, look what they were talking about at
Speaker 5: the beginning.
Speaker 10: Of the year.
Speaker 5: So pay attention to us. Yeah, you know that's what
Speaker 5: the thing. We're actually smart, humble, bragg well, the Bloomberg
Speaker 5: let's not get ahead of ourself. So it's the Bloomberg
Speaker 5: Intelligence team is business Week. You know they're the smart ones.
Speaker 3: All right, great stuff. Check it out online on the
Speaker 3: Terminalis and the upcoming new issue of Bloomberg Business Week.
Speaker 3: Then you're a head issue, so appreciate it. Joe Webber,
Speaker 3: of course, editor of Bloomberg Business Week. In Tim craighead
Speaker 3: of our Bloomberg Intelligence Team. It's a killer list.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
Speaker 1: live weekday afternoons from three to six Eastern on Bloomberg Radio,
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Speaker 1: live on Amazon Alexa from our flagship new York station,
Speaker 1: jo Say Alexa play Bloomberg eleven thirty.
Speaker 4: The story.
Speaker 3: First of all, it's based on a most read story
Speaker 3: on the Bloomberg Ternal. Today's about the Wall Street analyst
Speaker 3: who can deadlift more than four hundred pounds, who has
Speaker 3: the ear of JP Morgan, Chase's CEO, Jamie Dimond, someone
Speaker 3: who's gotten a handwritten letter from none other than Warren Buffett.
Speaker 3: And it's an analyst who has taken the covened top
Speaker 3: spot in the Institutional Investor Paul, a key barometer for
Speaker 3: Wall Street relevance the past four years.
Speaker 5: We're talking about none other than Wells Fargo banking analyst
Speaker 5: Mike Mayo, the subject of a profile Carol by none
Speaker 5: other than Shrinota Rajen and Bree Bradham. Mike Mayo joins
Speaker 5: us on the phone from New York City. Shrees here
Speaker 5: to Carol in the Bloomberg Interactive Brokers studio. He's senior,
Speaker 5: He's Bloomberg News senior finance reporter.
Speaker 3: All right, First of all, Street great, great, great story.
Speaker 3: Everybody's reading it. Mike, so great to have you here
Speaker 3: with us. You are a closely followed voice when it
Speaker 3: comes to the big banks, which as we highlighted, has
Speaker 3: created some very unique and rare experiences for you. Letter
Speaker 3: from Buffett Jamie Diamonds. Listening to you what for you
Speaker 3: sometimes has you even saying, Wow, this is a pretty
Speaker 3: amazing access that I have in recognition. How do you
Speaker 3: feel about all of this?
Speaker 10: Well, first, I'd say wow to the power of Bloomberg
Speaker 10: Media and what the research journalists dug up with me
Speaker 10: and the comments they came back with. But I will
Speaker 10: say it's a right and it's a responsibility. I have
Speaker 10: the right to call it the way I see it,
Speaker 10: but they also have a responsibility to do it in
Speaker 10: a balanced way. But in response to the article, to
Speaker 10: all the companies that I've analyzed that didn't like my conclusions,
Speaker 10: or didn't like how I highlighted the shortfalls, or didn't
Speaker 10: like when I talked about compensation, or didn't like when
Speaker 10: I go to stareholder annual meetings and ask questions the
Speaker 10: management in front of their bosses, the boarder directors, or
Speaker 10: just didn't feel like I was on their side. What
Speaker 10: I say to all those people and all those corporations
Speaker 10: is sorry, not sorry. My job is not to win
Speaker 10: a popularity contest. My job is to call a stade
Speaker 10: a spade.
Speaker 3: What did you want to write? I mean, we know
Speaker 3: where you wanted to write about Mike. We talk about
Speaker 3: him when he has a call, But what was it
Speaker 3: that you wanted to get into street?
Speaker 17: I mean, arguably, he's one of the most interesting personalities
Speaker 17: on Wall Street. And here's someone who's been doing bank analysis, right,
Speaker 17: he's been a bank analyst for more than thirty years,
Speaker 17: in his fourth decade now. But more importantly, here's someone
Speaker 17: whose tales go back all the way from the shame
Speaker 17: of private jet travel with John McCoy, the original dean
Speaker 17: of Wall Street CEOs, to jousting with Jamie Diamond in
Speaker 17: twenty twenty one, twenty twenty to twenty twenty three. He's
Speaker 17: still there, He's still very relevant, and it doesn't matter
Speaker 17: what these bank CEOs have to say about him. Privately,
Speaker 17: they do grumble. They say he has a pension for grandstanding.
Speaker 17: They feel he's a bit of a showboat. They feel
Speaker 17: he's doing things to just needle that three.
Speaker 5: M's here right now. I want you to know, Mike,
Speaker 5: I'm room.
Speaker 17: I would tell you I know Mike and I have
Speaker 17: had several conversations about this. Mike would completely agree that
Speaker 17: is how they perceive him. Is yet the fact that
Speaker 17: he's called back for all of these operating committee meetings
Speaker 17: at these banks, for the management committee meetings to talk
Speaker 17: to their senior leaders to try and explain to them
Speaker 17: what they can do better to improve their stuff set
Speaker 17: that tells you all about his staying power, Mike.
Speaker 5: Is that perception that she described some analysts or some
Speaker 5: executives think of you? Is that wrong?
Speaker 10: This idea? I'm glad we have point counterpoint here in
Speaker 10: terms of you're welcome anyone, you know, in terms of
Speaker 10: grand stay in ing, show, voting, and some of those
Speaker 10: other adjectives that corporations use. That's what I've heard now
Speaker 10: in my fourth decade as a Wall Street analyst. That's
Speaker 10: what I've heard from corporations when they're trying to control
Speaker 10: the narrative, when they're very closed minded. So they don't
Speaker 10: necessarily say that to my face. So I will say,
Speaker 10: I've been fired kind of three and a half times
Speaker 10: in my thirty plus years, and I have asked CEOs
Speaker 10: and CFOs directly, like what I was fired from credits
Speaker 10: please in two thousand, what they were saying about me,
Speaker 10: And they would just say, I just don't think. I
Speaker 10: think you're too independent for the new firm, And that's
Speaker 10: exactly what they said when I got fired then. But
Speaker 10: I would just say everyone's not It's not one size
Speaker 10: fits all. So some banks get it. And so the
Speaker 10: one line I liked in the article I didn't like
Speaker 10: at all as the critical and that's, you know, that's
Speaker 10: the way journalism goes. I get it. But the one
Speaker 10: line I like came from Jamie Diamond, and Jamie Diamond said,
Speaker 10: differing opinions are okay. And guess what when you have
Speaker 10: differing opinions, that's called candor, that's called culture, and in
Speaker 10: the case of Jason Morgan, that's called success. On the
Speaker 10: other hand, you have a worst in class bank. Going
Speaker 10: back is City Group the last twenty five years. Most
Speaker 10: of that time, especially the first fifteen years, it was
Speaker 10: a very closed minded culture, a group think culture, you know,
Speaker 10: don't challenge the leaders enough. And you see what has
Speaker 10: happened to City Group Now. I think City Group has
Speaker 10: turned the corner. So if that's what you're saying behind
Speaker 10: the scenes, they're not always saying it to me directly,
Speaker 10: but over my thirty plus years, I have heard it
Speaker 10: indirectly or through consequences such as, like I said, being
Speaker 10: fired three and a half times.
Speaker 3: One little thing. In a world where it's hard to
Speaker 3: express different opinions, it's really kind of refreshing to hear
Speaker 3: you say that. But should come on in because I know,
Speaker 3: I'm sure you've got a million questions.
Speaker 17: No, but just to Mike's point, I will I'd like
Speaker 17: to remind everyone. And this is now going back, you know,
Speaker 17: more than two decades. But right when Jamie Diamond was
Speaker 17: coming on to become Sea of Bank one, I believe
Speaker 17: Mike had put out a report saying even hercules can't
Speaker 17: fix it. And at that time that bank felt Mike
Speaker 17: was rude and not sensitive to their needs, and they
Speaker 17: tried to ban access and not have him on various calls.
Speaker 17: Jamie Diamond came in and said, that doesn't make sense.
Speaker 17: We need to have him on his calls. You can't
Speaker 17: just revoke access. And oh, by the way, everything he's
Speaker 17: saying is probably right. Later on, when the JP Morgan
Speaker 17: Bank won merger happened, it was an investigate in person.
Speaker 17: Jimmie Damon actually looked at Mike May and said, Mike,
Speaker 17: where are you stand up admit you were wrong. That
Speaker 17: is the kind of banter that the two of them
Speaker 17: have had. People have called them frenemies over the years.
Speaker 17: It's not like Mike is always complimentary about Jimmie Diamond.
Speaker 17: It's not like he's always hostile to him. But he
Speaker 17: calls it as he sees it, and that's perhaps one
Speaker 17: of the reasons why he's been relevant for so long.
Speaker 5: Hey, Mike, I wanted to talk a little bit about
Speaker 5: health and about exercise, and because part of the story
Speaker 5: talks about the powerlifting that you've gotten into just in
Speaker 5: the last few years. I did not know about this now,
Speaker 5: so Shre and bree right that you got to this
Speaker 5: after twenty twenty one, after learning that you had osteoporosis
Speaker 5: and realizing that he'd broken fifteen bones over the course
Speaker 5: of five years. Can you just talk a little bit about,
Speaker 5: you know, your routine and sort of how powerlifting has
Speaker 5: improved your life and sort of the balance between athletics
Speaker 5: and banking and thrill.
Speaker 3: I want to get into that, but I just want
Speaker 3: to mention a headline the SEC granting approval for bitcoin ETFs.
Speaker 3: So Mike, feel free where you want to go. You
Speaker 3: can talk about your workouts, but you can also talk
Speaker 3: about kind of the changing landscape of the financial investment landscape,
Speaker 3: because I'm wondering if you have any kind of comment
Speaker 3: on that.
Speaker 10: Well, I would say that the job of a Wall
Speaker 10: Street analyst can be very intense, stressful, dynamic, sometimes with
Speaker 10: long hours when you least expect it. And so you know,
Speaker 10: I now work at a Wall Street division of a
Speaker 10: main street bank at Wells Fargo, and you know, they
Speaker 10: encourage a work life balance and I need it, and
Speaker 10: so this is my outlet for that. And I was
Speaker 10: raised during the seventies when it was all about the
Speaker 10: book of running, and I ran marathons and I did cycling,
Speaker 10: and the last few years, as your body talks to you,
Speaker 10: you adjust and my bones are a week and I
Speaker 10: needed to strengthen my bones and do a pivot. So
Speaker 10: my pivot was to get into strength training and specifically powerlifting.
Speaker 10: And you know, I guess I'm that very typical personal
Speaker 10: Wall Street like, when you go into something, you go
Speaker 10: all the way. And so I wasn't enough for me
Speaker 10: just to do this. I had to go ahead and compete.
Speaker 10: So I competed in my first meet a little over
Speaker 10: two years ago, and I got disqualified. I failed, I
Speaker 10: missed my first three attempts, but then I went back
Speaker 10: and I went to Nationals last year where I played
Speaker 10: second and broke broke into a thousand pound clubs. That's
Speaker 10: a lot bench in deadlift. But you know, the average
Speaker 10: person loses half their muscle mass between the ages of
Speaker 10: forty and eighty, and so you know, as you know
Speaker 10: you age in, it starts to get you to fight back.
Speaker 10: And I'm hitting pr personal best records even as I
Speaker 10: get older. And so I think this story about strength
Speaker 10: training has been underrepresented in our society. I feel like
Speaker 10: can be bandalists for spring training and power listing and
Speaker 10: all that comes along with it, but they're the genesis
Speaker 10: of that is the need to have a work life
Speaker 10: balance when you work totally hard hours on Wall Street.
Speaker 17: And I will quickly add that I think Mike's biggest
Speaker 17: disappointment in the story was we mentioned his performance at
Speaker 17: the Memphis Feat Memphis Meet and not his personal best
Speaker 17: that game a few months earlier, when he did break
Speaker 17: into the thousand pound club.
Speaker 3: Well, a fun read, and Mike, I'm so glad that
Speaker 3: you could join us as well. Of course, Mike Mayo
Speaker 3: joining us Wells Fargo banking analysts with our own Shrinat Raja.
Speaker 3: Here at Bloomberg News.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 3: Indian Creek Village where the billionaires are pricing out the millionaires,
Speaker 3: which in itself is leading to a host of issues.
Speaker 3: So let's get to it. Jordan Fitzgerald and Felippe Marquez,
Speaker 3: who wrote about the story about Indian Creek Village and
Speaker 3: one of the most read stories on the Bloomberg term.
Speaker 3: I'll say Jordan joining us. She's Wealth Team reporter for
Speaker 3: Bloomberg News. She is here in our Bloomberg Interactive Broker's studio.
Speaker 3: First of all, how did this get on your radar?
Speaker 8: Well?
Speaker 18: After Bezos bought his two houses, which Bloomberg was fortunate
Speaker 18: enough to break. Basically, tons of news outlets were saying,
Speaker 18: look at this crazy island where all of these billionaires live,
Speaker 18: and Filipe and I were looking out and at it
Speaker 18: and saying, okay, yes, this is a crazy place where
Speaker 18: lots of billionaires live. There's lots of pockets of that
Speaker 18: in Miami. So how can we use this place to
Speaker 18: tell a story about Miami and about South Florida right now?
Speaker 5: So you raised your hand and you said, I'll do it.
Speaker 5: I will go to Florida. I'll go to Indiana where
Speaker 5: me and you went.
Speaker 4: I did go.
Speaker 5: Did you get across the gate?
Speaker 18: I did. I got across the mod You I can't reveal.
Speaker 18: I might get someone in trouble. I swear to God,
Speaker 18: I made a promise.
Speaker 12: I cannot.
Speaker 18: Confess.
Speaker 5: But you have to know something you have to get.
Speaker 5: You have to get.
Speaker 18: Someone who is allowed it.
Speaker 4: So they bring you across.
Speaker 5: Yes, describe what it looks like. I mean, this is
Speaker 5: like the most.
Speaker 3: When you cross the bridges that go.
Speaker 5: Basically you wouldn't even know it's there.
Speaker 18: You're just driving through surfside north of Miami Beach, beautiful community,
Speaker 18: and then you just come across this little roundabout where
Speaker 18: there's a guard tower and a little bridge, and you
Speaker 18: drive up. And the reason the roundabout is there so
Speaker 18: people can very easily exit if they get turned away.
Speaker 18: But they check the idea of the person heading in.
Speaker 18: They have to give a reason prove that they've been invited.
Speaker 18: And then into Valhalla.
Speaker 5: What was it like?
Speaker 4: It was beautiful?
Speaker 18: Like, yeah, I feel like that's really obvious. It's so coveted,
Speaker 18: it's so popular. It's in Miami. Of course it's gorgeous,
Speaker 18: but it was breathtaking. The island is just forty one
Speaker 18: lots surrounding a massive golf course, and so it is
Speaker 18: green and lush, and so many of the property owners
Speaker 18: have like fantastic sculptures right outside it just it kind
Speaker 18: of is amazing.
Speaker 3: As you moved along, could you pick out like, Okay,
Speaker 3: that's where Avanka and Jared are, Like, yeah, is the
Speaker 3: person who you were with or whomever?
Speaker 18: That a little bit, But I'd also I'd done enough
Speaker 18: research before, looking into property records on shell companies to
Speaker 18: figure out who owned what house.
Speaker 3: So we said the five wealthiest property owners alone control
Speaker 3: fortunes of some one hundred and ninety one billion, according
Speaker 3: to our Bloomberg Billionaires Index. Talked to us about the
Speaker 3: properties and what they've been going for.
Speaker 18: Yeah, So we talked to a realtor who's done a
Speaker 18: lot of sales on Indian Creek, and she said, before
Speaker 18: the pandemic. Twenty million dollars was a big sale. They'd
Speaker 18: have a bunch of sales a year. And now, I mean,
Speaker 18: like you said, Bezos just bought two properties for a
Speaker 18: total of one hundred and fifty million dollars billion dollars
Speaker 18: million dollars nearly sorry about that that compares with his
Speaker 18: net worth. But yeah, and one of his houses he'd
Speaker 18: bought from a Venezuelan family that had owned it since
Speaker 18: the eighties and they paid one point four million dollars.
Speaker 18: So there's a crazy return on investment here and transformation
Speaker 18: just in the past couple decades. I mean, Jamie Glenski,
Speaker 18: a Colombian baker, owns five properties on Indian Creek right now,
Speaker 18: and he paid a total of eighty million dollars for
Speaker 18: five properties, which is about what Bezos paid for a
Speaker 18: single one.
Speaker 5: Is that I mean, is it going to turn into
Speaker 5: like the Bezos compound.
Speaker 18: There's forty one lots. If Bezos gets all five that
Speaker 18: he wants, Glincy also has five, that means the two
Speaker 18: of them would have I mean, heen of forty.
Speaker 5: One lots, bit of like twenty five percent of.
Speaker 4: The loss exactly.
Speaker 5: It's kind of one when Jared and Evoca owned.
Speaker 18: Jared and Ivanka owned, they are there. She was spotted
Speaker 18: just strolling around. They recently built sidewalks in Indian Creek.
Speaker 18: That was one of their big development projects since COVID.
Speaker 4: I guess what.
Speaker 5: About this exclusive club?
Speaker 18: Yes, so there's the golf course is controlled by the
Speaker 18: Indian Creek Country Club. You do not have to be
Speaker 18: a resident of the island to belong to the country club.
Speaker 18: They have a finite amount of memberships and you have
Speaker 18: to be referred to one. But so it's kind of
Speaker 18: like the only homeowners who can really get onto the
Speaker 18: island are those who belong to the club or are
Speaker 18: going with members of the club.
Speaker 4: I love carl Icon. He's got to feel pretty good
Speaker 4: about what he paid for his properties.
Speaker 18: Carla Icon constantly, I think feels good about his investments.
Speaker 4: It's really really true.
Speaker 3: It's really fascinating, and I guess I just wonder like
Speaker 3: when we you know, I feel like everybody's moving to Florida,
Speaker 3: but I feel like a lot of really really really
Speaker 3: rich people are moving to Florida. You know, there's no
Speaker 3: properties left though, right, It's a limited amount of properties.
Speaker 18: Yeah, I mean, for example, with Indian Creek.
Speaker 4: It's an island.
Speaker 18: There really is a finite amount you can't build out,
Speaker 18: and so that's why we thought it was a really
Speaker 18: good place to look at how Florida has been changing.
Speaker 18: It really is attracting all of these very, very wealthy people,
Speaker 18: and they are kind of displacing the people who've made
Speaker 18: that their home for years.
Speaker 5: We'll talk about that a little bit because it is
Speaker 5: sort of a microcosm of what's happening on a larger
Speaker 5: scale in Florida. So even though we're talking about billionaires,
Speaker 5: I mean, we're talking about the wealthiest people in the
Speaker 5: world here. How does what's happening there sort of paint
Speaker 5: a picture of the bigger picture of Florida.
Speaker 18: Yeah, So if you have, for example, Ken Griffith, who
Speaker 18: notoriously moved to Miami in recent years, when you have
Speaker 18: Ken Griffin move there, and when you have Ken Griffin
Speaker 18: bring Citadel there, you're having him bring all of these
Speaker 18: Citadel employees who are very very highly paid executives who
Speaker 18: want to come in and want to buy up properties
Speaker 18: and build big houses and drive up property values. And
Speaker 18: when they do that, the people who don't make as
Speaker 18: much as a Citadel executive, which is really the majority
Speaker 18: of the world. They can't afford to live in the
Speaker 18: places they may have called home for years upon years.
Speaker 4: Ken Griffin not Indian.
Speaker 18: Not an Indian Creek. Ken Griffin lives on a different,
Speaker 18: very wealthy island in Miami. But the difference between other
Speaker 18: enclaves in Miami and Indian Creek is that Indian Creek
Speaker 18: is its own town. It is not technically an island
Speaker 18: in Miami. It is Indian Creek, Florida. And because of
Speaker 18: that they are really able to have their guard tower
Speaker 18: and have their moat and keep people out.
Speaker 3: It's a great story. And there's more in there about
Speaker 3: Jeff Bezos when he was looking for his properties, right,
Speaker 3: like kind of knocking on the doors of people. Yes, yeah,
Speaker 3: he probably wasn't knocking on the doors.
Speaker 11: No.
Speaker 18: I think Jeff Bezos has other things he's interested in doing,
Speaker 18: but he went after properties he did, and if you've
Speaker 18: seen the pictures of him paddleboating, he clearly is dedicated
Speaker 18: to the environment down there.
Speaker 3: Yeah, there's that yacht too, yacht Jordan Fitzgerald. This is
Speaker 3: really fun, so appreciate it. As we said, among the
Speaker 3: most read stories on the Bloomberg Terminal. She by the way,
Speaker 3: Wealth Team reporter. Here at Bloomberg News, you're listening to
Speaker 3: Bloomberg BusinessWeek.
Speaker 1: This is the Bloomberg Business Week podcast of a Little Apple, Spotify,
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