1 00:00:00,800 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day, we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,560 --> 00:00:15,600 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,479 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:21,759 Speaker 1: at Bloomberg dot com slash podcast. All right, Matt, I 7 00:00:21,800 --> 00:00:23,639 Speaker 1: mean you and I've talked about this before. The big 8 00:00:23,640 --> 00:00:26,560 Speaker 1: take stories that coming out of Bloomberg News are just awesome, 9 00:00:26,720 --> 00:00:30,000 Speaker 1: awesome reporting, awesome journalism. There's some big takes and then 10 00:00:30,040 --> 00:00:32,880 Speaker 1: there's some really big takes. In this story today is 11 00:00:32,920 --> 00:00:37,239 Speaker 1: a really big steak. It's a big topic. Uh, the Amazon, 12 00:00:37,360 --> 00:00:40,360 Speaker 1: the rainforest. We know about the risk to that rainforest. 13 00:00:40,560 --> 00:00:42,480 Speaker 1: I thought I did until I started reading this story. 14 00:00:42,680 --> 00:00:45,000 Speaker 1: Jessica Bryce joins us. She's a senior editor for Latin 15 00:00:45,000 --> 00:00:50,600 Speaker 1: American News from the South. Paulo joining us on the phone. Jessica, Alright, 16 00:00:50,720 --> 00:00:54,520 Speaker 1: the Amazon rainforest, nearest point of no return in Brazil 17 00:00:54,880 --> 00:00:58,160 Speaker 1: land grab. Can you just let us step us step 18 00:00:58,160 --> 00:01:01,040 Speaker 1: out thirty feet and just frame the issue for us. 19 00:01:01,200 --> 00:01:03,600 Speaker 1: I think most of our listeners have a sense that Okay, 20 00:01:03,640 --> 00:01:07,280 Speaker 1: the rainforest is at risk, but how at risk? Hi, 21 00:01:07,600 --> 00:01:10,160 Speaker 1: thanks for having me on the show. Um. Yeah, So 22 00:01:10,200 --> 00:01:16,040 Speaker 1: the rainforest, Uh, deforestation has been an issue for decades UM. 23 00:01:16,080 --> 00:01:19,040 Speaker 1: It's been a crisis in the making for decades UM. 24 00:01:19,120 --> 00:01:21,560 Speaker 1: But recently, what we're seeing is that it's reaching this 25 00:01:21,760 --> 00:01:25,520 Speaker 1: point where it's this. The rainforest, in many ways is 26 00:01:25,560 --> 00:01:28,760 Speaker 1: sort of one giant organism organism, it's this, it's this 27 00:01:28,880 --> 00:01:33,280 Speaker 1: ecosystem that depends on other parts of the ecosystem. And 28 00:01:33,560 --> 00:01:37,560 Speaker 1: what we're seeing is that as the burns worsen, uh, 29 00:01:37,600 --> 00:01:40,560 Speaker 1: not only is our large parts of the Amazon no 30 00:01:40,680 --> 00:01:43,840 Speaker 1: longer pulling greenhouse gases from the air, but they're actually 31 00:01:43,880 --> 00:01:47,960 Speaker 1: contributing and accelerating climate change. And we're nearing a point 32 00:01:48,040 --> 00:01:52,600 Speaker 1: where the Amazon will no longer be a be a rainforest. 33 00:01:52,640 --> 00:01:55,680 Speaker 1: It will turn into a savannah. And that's important because 34 00:01:55,760 --> 00:01:58,560 Speaker 1: not only because of its role, as you know, in 35 00:01:58,640 --> 00:02:00,880 Speaker 1: cleaning the air that we breathe, but also because it 36 00:02:01,000 --> 00:02:04,880 Speaker 1: regulates the weather for South America, and South America is 37 00:02:04,920 --> 00:02:07,480 Speaker 1: a huge producer of food for the globe, and so 38 00:02:07,880 --> 00:02:11,079 Speaker 1: you know, losing the Amazon going over that point, it's 39 00:02:11,080 --> 00:02:14,520 Speaker 1: a very serious problem for everyone. So, first of all, Jessica, 40 00:02:14,560 --> 00:02:18,920 Speaker 1: I learned so much reading this story and I just 41 00:02:18,960 --> 00:02:23,239 Speaker 1: think it's a fantastic piece of journalism. Um. There must 42 00:02:23,280 --> 00:02:26,440 Speaker 1: have been my numbing amounts of research that went into 43 00:02:26,480 --> 00:02:29,160 Speaker 1: this document and interviews, and I just thought it was 44 00:02:29,200 --> 00:02:31,840 Speaker 1: so good. Um. One of the one of the central 45 00:02:32,200 --> 00:02:36,400 Speaker 1: um themes that I took from this is we all 46 00:02:36,440 --> 00:02:41,760 Speaker 1: benefit from the Amazon rainforest, but um, Brazil wants to 47 00:02:41,760 --> 00:02:45,000 Speaker 1: be somehow compensated for that by the rest of the world, 48 00:02:45,200 --> 00:02:48,320 Speaker 1: or they threaten they will go and take the value 49 00:02:48,320 --> 00:02:51,520 Speaker 1: out of it themselves. And you know, you interviewed so 50 00:02:51,560 --> 00:02:55,200 Speaker 1: many people who were just so poor, they didn't have 51 00:02:55,320 --> 00:02:58,440 Speaker 1: shoes and went into this rainforest in order to make 52 00:02:58,440 --> 00:03:00,320 Speaker 1: a living. I mean, what else are they gonna do, right, 53 00:03:01,040 --> 00:03:04,200 Speaker 1: unless the rest of the world steps in and helps 54 00:03:04,320 --> 00:03:07,080 Speaker 1: Brazil do something, because it's not it doesn't seem really 55 00:03:07,120 --> 00:03:11,400 Speaker 1: fair if we all enjoy a resource that, um, you 56 00:03:11,400 --> 00:03:14,960 Speaker 1: know they have to foot the bill or carry the 57 00:03:15,000 --> 00:03:18,320 Speaker 1: debt or however you want to see it. Absolutely, and 58 00:03:18,360 --> 00:03:20,519 Speaker 1: that's that's the key part of the argument and sort 59 00:03:20,560 --> 00:03:23,120 Speaker 1: of the culture in the mindset down here in Brazil. 60 00:03:23,840 --> 00:03:28,919 Speaker 1: Brazil DeFore station has been UM tragic. Brazil has lost 61 00:03:29,000 --> 00:03:33,079 Speaker 1: a lot of its Amazon, it still has eight percent 62 00:03:33,280 --> 00:03:37,360 Speaker 1: or so of its natural vegetation, which covers three uh 63 00:03:37,480 --> 00:03:42,040 Speaker 1: two thirds of the land in Brazil. The government's argument 64 00:03:42,080 --> 00:03:43,720 Speaker 1: is that there's no other country in the world that 65 00:03:43,800 --> 00:03:47,000 Speaker 1: really has that much rainforest and has preserved that much 66 00:03:47,080 --> 00:03:50,880 Speaker 1: of its natural forest. And it's not wrong, right. However, 67 00:03:51,160 --> 00:03:55,680 Speaker 1: it is a an incredibly important resource in to in 68 00:03:55,800 --> 00:03:57,680 Speaker 1: terms of you know, cleaning the air, but also in 69 00:03:57,680 --> 00:04:01,160 Speaker 1: the commodities it holds. And yet Brazil and the million 70 00:04:01,160 --> 00:04:05,480 Speaker 1: people who live around the Amazon are incredibly poor. Right. 71 00:04:06,320 --> 00:04:08,680 Speaker 1: What you're seeing, however, is that this argument of we 72 00:04:08,720 --> 00:04:12,040 Speaker 1: need to help the poor is being manipulated in a way, 73 00:04:12,080 --> 00:04:14,400 Speaker 1: and of course right, and so that the poor are 74 00:04:14,560 --> 00:04:17,360 Speaker 1: being you know, they do they do go in there, 75 00:04:17,360 --> 00:04:19,880 Speaker 1: and they are driving a lot of this deforestation, but 76 00:04:20,040 --> 00:04:23,760 Speaker 1: that land often ends up into you know, it turns 77 00:04:23,800 --> 00:04:27,760 Speaker 1: into sort of industrial um farming operation. Well, and they'd 78 00:04:27,800 --> 00:04:29,839 Speaker 1: probably be poor no matter what. I think. It's a 79 00:04:29,839 --> 00:04:32,080 Speaker 1: lot like the Middle East, right, and that you know, 80 00:04:32,120 --> 00:04:35,360 Speaker 1: most of the world's oil reserves are there and we 81 00:04:35,440 --> 00:04:37,919 Speaker 1: have to all pay to use them. And as a result, 82 00:04:37,920 --> 00:04:43,360 Speaker 1: there are so many billionaire Saudi princes um in this case, 83 00:04:43,600 --> 00:04:46,200 Speaker 1: it is as if though we're all getting that oil 84 00:04:46,320 --> 00:04:50,039 Speaker 1: for free. And that's I think the good part of 85 00:04:50,040 --> 00:04:52,880 Speaker 1: Bowls Narrow's argument. Of course, the bad part is he 86 00:04:52,920 --> 00:04:56,320 Speaker 1: doesn't really care about this resource, it seems from the story, 87 00:04:56,760 --> 00:05:00,280 Speaker 1: and um, he's willing to just shred it, right. And 88 00:05:00,279 --> 00:05:02,680 Speaker 1: and you know one of the arguments, the Bolson our 89 00:05:03,200 --> 00:05:07,040 Speaker 1: Boson out of government has really pushed for payments to 90 00:05:07,640 --> 00:05:12,080 Speaker 1: private property owners in order to preserve their force. A 91 00:05:12,160 --> 00:05:16,000 Speaker 1: system like that would be incredibly problematic. Uh, not only 92 00:05:16,080 --> 00:05:20,080 Speaker 1: because Brazil government, Brazil has a history of corruption, just 93 00:05:20,279 --> 00:05:24,400 Speaker 1: terrible corruption down here, but also like the forest that's 94 00:05:24,440 --> 00:05:27,760 Speaker 1: being preserved is not as efficient in cleaning our air 95 00:05:27,880 --> 00:05:30,840 Speaker 1: and and you know, uh, producing the rains that we 96 00:05:30,960 --> 00:05:34,320 Speaker 1: need um as the native forest. And by that I 97 00:05:34,400 --> 00:05:39,600 Speaker 1: mean that these forests, the the Amazon has these magnificent 98 00:05:39,800 --> 00:05:42,880 Speaker 1: hardwoods that are just you know, hundreds of years old 99 00:05:42,960 --> 00:05:47,360 Speaker 1: and their um you know, eleven feet in diameter. And 100 00:05:47,480 --> 00:05:50,039 Speaker 1: even if you're preserving the force the private property owners 101 00:05:50,040 --> 00:05:53,159 Speaker 1: are preserving that force, they're still cutting down those trees 102 00:05:53,240 --> 00:05:56,560 Speaker 1: because there's demand in global export markets for those streets. 103 00:05:57,279 --> 00:06:00,440 Speaker 1: And so it's the system in which they're posing the 104 00:06:00,560 --> 00:06:04,840 Speaker 1: solution in which they're proposing is very problematic. Is there 105 00:06:04,839 --> 00:06:08,960 Speaker 1: any solution that is being embraced by the world's economy, 106 00:06:09,040 --> 00:06:13,000 Speaker 1: some of the world governing bodies to perhaps is there 107 00:06:13,000 --> 00:06:15,400 Speaker 1: a solution out there that some people can call us around. 108 00:06:16,600 --> 00:06:18,880 Speaker 1: You know, I think that the narrative, the solution that 109 00:06:18,960 --> 00:06:21,440 Speaker 1: the world is talking about, that narrative needs to change. 110 00:06:21,520 --> 00:06:24,960 Speaker 1: What's happening is that there's a there's a problem with 111 00:06:25,400 --> 00:06:30,320 Speaker 1: the land policy and in here in Brazil and this 112 00:06:30,839 --> 00:06:34,520 Speaker 1: you know, the government incentives that really push people to 113 00:06:34,760 --> 00:06:41,400 Speaker 1: drive the to to DeForest the Amazon. The world values 114 00:06:41,880 --> 00:06:45,560 Speaker 1: is valuing that deforestation because they're buying all of the 115 00:06:45,640 --> 00:06:49,720 Speaker 1: products that come from the Amazon region, um soybeans and 116 00:06:49,800 --> 00:06:53,560 Speaker 1: soy products. I believe the experts in out of Brazil 117 00:06:54,480 --> 00:06:59,680 Speaker 1: that we're valued at thirty billion dollars um. Nuts that 118 00:06:59,800 --> 00:07:01,920 Speaker 1: kind out of Brazil, which can be produced sustainably, it 119 00:07:02,040 --> 00:07:05,000 Speaker 1: was only a hundred million dollars. So there's there's just 120 00:07:05,160 --> 00:07:09,440 Speaker 1: no you know, I think the world it's very important 121 00:07:09,520 --> 00:07:11,320 Speaker 1: that the world has put a lot of pressure on 122 00:07:11,800 --> 00:07:14,760 Speaker 1: beef companies and I think you're seeing some changes. I 123 00:07:14,800 --> 00:07:17,600 Speaker 1: think that some of the beef companies are taking it seriously. 124 00:07:18,160 --> 00:07:20,080 Speaker 1: But I think you also need to the you know, 125 00:07:20,240 --> 00:07:23,440 Speaker 1: international governments also need to look at okay, we're buying 126 00:07:23,520 --> 00:07:27,840 Speaker 1: this stuff. You know, maybe we need to rethink our 127 00:07:27,960 --> 00:07:31,400 Speaker 1: demands and because the world does have great power in 128 00:07:31,600 --> 00:07:33,680 Speaker 1: in making those sort of demands if they wanted. But 129 00:07:33,720 --> 00:07:36,080 Speaker 1: it's not like we're gonna ever not want to buy 130 00:07:36,080 --> 00:07:38,400 Speaker 1: as much beef as we can or Brazilian mahogany. I 131 00:07:38,440 --> 00:07:40,680 Speaker 1: think it seems to me eventually we're gonna have to 132 00:07:40,720 --> 00:07:43,680 Speaker 1: pay up um. But the story is incredible and I 133 00:07:44,440 --> 00:07:49,760 Speaker 1: so want to see these rainforests. It sounds just unbelievably beautiful. 134 00:07:49,840 --> 00:07:54,040 Speaker 1: Jessica Bryce, Senior editor for Latin American News, This is Bloomberg. 135 00:07:57,680 --> 00:08:00,360 Speaker 1: You know, this is really I think one of the 136 00:08:00,440 --> 00:08:04,800 Speaker 1: themes of this year has been meme stocks and robin Hood. 137 00:08:04,920 --> 00:08:09,160 Speaker 1: We've seen hearings on Capitol Hill. Pretty much everybody knows 138 00:08:09,400 --> 00:08:11,880 Speaker 1: what it is. I feel like it's kind of like 139 00:08:12,000 --> 00:08:15,160 Speaker 1: the new TikTok um, the new Snapchat in a sense, 140 00:08:15,240 --> 00:08:17,240 Speaker 1: because this is what the kids are doing. And by kids, 141 00:08:17,320 --> 00:08:21,559 Speaker 1: I mean you know, like middle aged white men sitting 142 00:08:21,560 --> 00:08:23,800 Speaker 1: in their parents basements. Let's bring in Crystal see you 143 00:08:23,920 --> 00:08:27,240 Speaker 1: right now? She is Um Bloomberg News reporter who has 144 00:08:27,280 --> 00:08:29,640 Speaker 1: been covering the story from the get go for us. 145 00:08:29,840 --> 00:08:32,560 Speaker 1: She joins us in the interactive broker studio here at 146 00:08:33,080 --> 00:08:37,079 Speaker 1: one Lexington Avenue. So Crystal thirty eight dollars. That's the 147 00:08:37,160 --> 00:08:41,080 Speaker 1: indication right now. Not so great, is it? It isn't 148 00:08:41,120 --> 00:08:43,880 Speaker 1: so great On an ip O day on the first 149 00:08:43,960 --> 00:08:47,000 Speaker 1: that you usually expect a deal to pop a little bit. 150 00:08:47,280 --> 00:08:51,640 Speaker 1: Some deals go up to a D so for now 151 00:08:51,679 --> 00:08:54,480 Speaker 1: they're looking flat. We all see a couple of hours 152 00:08:54,720 --> 00:08:57,679 Speaker 1: imagined away from the actual trade, so it could go up, 153 00:08:57,760 --> 00:09:01,400 Speaker 1: but it's looking like the first trade wouldn't be significantly 154 00:09:01,520 --> 00:09:03,559 Speaker 1: higher than when they priced it. We we've been talking 155 00:09:03,600 --> 00:09:06,520 Speaker 1: to uh I p O specialists over the past couple 156 00:09:06,559 --> 00:09:09,120 Speaker 1: of days who say the sweet spot would be a 157 00:09:09,240 --> 00:09:13,079 Speaker 1: pop of something like right, if it doubles on the 158 00:09:13,160 --> 00:09:16,760 Speaker 1: first day, lad left a ton of money on the table, 159 00:09:17,120 --> 00:09:19,840 Speaker 1: And if it doesn't do anything, then there's no hype. 160 00:09:20,160 --> 00:09:22,199 Speaker 1: So you do want to see a pop, but you 161 00:09:22,200 --> 00:09:24,160 Speaker 1: don't want to see it too. I mean, Paul knows 162 00:09:24,200 --> 00:09:26,959 Speaker 1: this probably better than anybody because he's priced IPOs for 163 00:09:27,000 --> 00:09:28,839 Speaker 1: a living. Yeah, I mean that's exactly right. And I 164 00:09:28,920 --> 00:09:31,160 Speaker 1: think one of the wild cards here is there is 165 00:09:31,960 --> 00:09:36,199 Speaker 1: higher than typical retail allocation. So I wonder how that's 166 00:09:36,240 --> 00:09:38,599 Speaker 1: going to affect kind of not only the opening of 167 00:09:38,960 --> 00:09:40,880 Speaker 1: the stock, but maybe the you know, the early days 168 00:09:40,920 --> 00:09:43,160 Speaker 1: of trading. Yeah, it's an interesting experiment. I don't think 169 00:09:43,160 --> 00:09:47,440 Speaker 1: anybody has allocated this many shas to retail investors from 170 00:09:47,520 --> 00:09:50,560 Speaker 1: sources we are, we've reported that they're actually don't they 171 00:09:50,600 --> 00:09:55,439 Speaker 1: actually allocated of the entire I p O to retail investors. 172 00:09:56,280 --> 00:09:59,600 Speaker 1: And that's not it there. They have extremely high volume 173 00:09:59,640 --> 00:10:02,280 Speaker 1: on of for stay. Also because they relaxed the lock up, 174 00:10:02,440 --> 00:10:06,599 Speaker 1: so if you're an inside that you can sell, is 175 00:10:06,720 --> 00:10:09,280 Speaker 1: that right? Yeah, and on the day of pricing off 176 00:10:09,360 --> 00:10:12,400 Speaker 1: the first first day, whereas to the traditional lock up 177 00:10:12,480 --> 00:10:15,640 Speaker 1: might be six months. Right. So yeah, so this is 178 00:10:15,720 --> 00:10:20,120 Speaker 1: actually a huge flood of shares that could come in potential, right. 179 00:10:20,679 --> 00:10:24,920 Speaker 1: I mean, if you're an insider who believes in the company, 180 00:10:24,960 --> 00:10:27,840 Speaker 1: then you're not going to do that, well, I thinkainly 181 00:10:27,840 --> 00:10:31,000 Speaker 1: not before the pop, right, yeah, hopefully. I mean so, 182 00:10:31,120 --> 00:10:33,439 Speaker 1: I mean it is the expectation here that the underwriters, 183 00:10:33,440 --> 00:10:35,880 Speaker 1: I mean, it's you know, I guess your sauce just 184 00:10:35,960 --> 00:10:38,320 Speaker 1: coming across the Bloomberg terminal, maybe twelve thirty one pm 185 00:10:38,360 --> 00:10:40,199 Speaker 1: Wall Street times when it may open, and even that 186 00:10:40,280 --> 00:10:42,760 Speaker 1: feels a little bit late relative to some other deals. 187 00:10:42,880 --> 00:10:46,680 Speaker 1: Is that also maybe a red flag here? Not necessarily 188 00:10:46,720 --> 00:10:48,559 Speaker 1: a red flag, but when you have someone volume, I 189 00:10:48,600 --> 00:10:50,520 Speaker 1: think it makes sense that it's taking longer. But I 190 00:10:50,600 --> 00:10:53,120 Speaker 1: think overall Wall Street has been taking this sweet time 191 00:10:53,160 --> 00:10:55,120 Speaker 1: with opening I p O S. Lately we have seen 192 00:10:55,280 --> 00:10:58,559 Speaker 1: deals open after one pm, so we could be sitting 193 00:10:58,600 --> 00:11:00,360 Speaker 1: here for a while. Even on the d Y s C. 194 00:11:00,960 --> 00:11:03,559 Speaker 1: I mean, Paul and I were talking about, you know, 195 00:11:04,400 --> 00:11:06,720 Speaker 1: we remember back in the day when they would open 196 00:11:06,840 --> 00:11:10,520 Speaker 1: things in an hour and a half after the bell um. 197 00:11:11,120 --> 00:11:14,679 Speaker 1: It feels to me like it's Nasdaq that takes this long. Well, 198 00:11:14,720 --> 00:11:17,480 Speaker 1: they actually bowls take a while, and I think there 199 00:11:17,559 --> 00:11:20,280 Speaker 1: is a regulation. There's a requirement you can't actually open 200 00:11:20,320 --> 00:11:22,559 Speaker 1: it within the first two hours. They want to have 201 00:11:22,800 --> 00:11:26,560 Speaker 1: a proper kind of market discovery period on the first trade. Um. 202 00:11:27,600 --> 00:11:29,400 Speaker 1: I mean, it's it's kind of the same system. One 203 00:11:29,520 --> 00:11:31,439 Speaker 1: is the electronic and the other one you have like 204 00:11:31,480 --> 00:11:35,680 Speaker 1: actual people market makers running around. So we actually saw 205 00:11:35,880 --> 00:11:38,120 Speaker 1: on the live stream that there is someone um J. 206 00:11:38,360 --> 00:11:41,600 Speaker 1: Heller at NaSTA he's the person sitting there opening the trade. 207 00:11:42,120 --> 00:11:43,880 Speaker 1: So yeah, I think it's really up to him. We 208 00:11:43,960 --> 00:11:46,520 Speaker 1: can I mean it could be it could be another 209 00:11:46,600 --> 00:11:49,360 Speaker 1: five minutes, it could be another hour, all right. So, um, 210 00:11:50,360 --> 00:11:52,679 Speaker 1: this was a traditional i PO as opposed to a 211 00:11:52,760 --> 00:11:55,040 Speaker 1: direct listing, as opposed to merging with the spack. What 212 00:11:55,280 --> 00:11:58,360 Speaker 1: did the company say about why they chose an ip O. 213 00:11:59,360 --> 00:12:01,440 Speaker 1: So there is I would say, still a little bit 214 00:12:01,440 --> 00:12:04,440 Speaker 1: of a stigma with going to a SPAC, especially when 215 00:12:04,480 --> 00:12:06,439 Speaker 1: you're very, very large company, you have a lot of 216 00:12:06,559 --> 00:12:09,880 Speaker 1: vcs in it. Um. The stigma is so that you know, 217 00:12:10,360 --> 00:12:13,200 Speaker 1: the spack used to be some thing's done by second 218 00:12:13,200 --> 00:12:17,160 Speaker 1: tier thirtier companies and you don't want to do that. Um. 219 00:12:17,840 --> 00:12:21,719 Speaker 1: But I was talked as back also it's tough but 220 00:12:21,840 --> 00:12:25,880 Speaker 1: not unheard of, um grab when public get over forty 221 00:12:25,920 --> 00:12:28,840 Speaker 1: billion through a spack. Um. But what I would say 222 00:12:28,920 --> 00:12:31,120 Speaker 1: is actually the direct listing and the I p O 223 00:12:31,320 --> 00:12:35,920 Speaker 1: have actually blurred a lot, especially with relaxed lock up 224 00:12:36,520 --> 00:12:41,120 Speaker 1: measures like the like. So with all of that, it 225 00:12:41,320 --> 00:12:43,920 Speaker 1: actually kind of looks a little bit like a direct listing. 226 00:12:44,440 --> 00:12:47,720 Speaker 1: Are you one of the ten million, seven hundred thousand 227 00:12:47,800 --> 00:12:52,160 Speaker 1: degenerates on Wall Street? Bets. I am not, but I 228 00:12:52,200 --> 00:12:55,000 Speaker 1: pay attention. I've just looked. I was just scrolling through 229 00:12:55,040 --> 00:12:57,000 Speaker 1: Wall Street bets to see there's not a lot of 230 00:12:57,080 --> 00:13:01,240 Speaker 1: positive um D D about beIN Hood. I would have 231 00:13:01,320 --> 00:13:04,400 Speaker 1: thought that this crew was going to get behind it, 232 00:13:04,520 --> 00:13:06,960 Speaker 1: but they don't really seem that amped on buying robin 233 00:13:07,000 --> 00:13:10,400 Speaker 1: Hood chairs. Yeah, it seems like the retail investors, at 234 00:13:10,480 --> 00:13:12,520 Speaker 1: least some of them have beef with robin Hood after 235 00:13:12,600 --> 00:13:16,040 Speaker 1: the whole game stops saga and they true good point. 236 00:13:16,080 --> 00:13:18,640 Speaker 1: You didn't understand why they couldn't trade at the high 237 00:13:18,840 --> 00:13:22,440 Speaker 1: they couldn't sell they were welcomed to buy. All right, Crystal, 238 00:13:22,520 --> 00:13:25,320 Speaker 1: thank you so much for joining us. Crystal see us deals. 239 00:13:25,400 --> 00:13:27,439 Speaker 1: I p O reporter covers all that good stuff for 240 00:13:27,640 --> 00:13:33,760 Speaker 1: Bloomberg News. Alright, active investing, passive investing, we've been having 241 00:13:33,840 --> 00:13:35,679 Speaker 1: that discussion for a long time. Is more and more 242 00:13:35,720 --> 00:13:39,400 Speaker 1: money goes passive index investing. We've been having that discussion. 243 00:13:39,760 --> 00:13:43,120 Speaker 1: But how about you know, introducing a thematic element since 244 00:13:43,240 --> 00:13:49,000 Speaker 1: Jack basically exactly right, Um, it's it's a thing. I guess, 245 00:13:49,000 --> 00:13:51,440 Speaker 1: as the kids would say, ra who send Sharma joint 246 00:13:51,520 --> 00:13:54,840 Speaker 1: us R, who is a managing partner at index Roll. 247 00:13:54,880 --> 00:13:56,400 Speaker 1: Thanks so much for joining us here and love to 248 00:13:56,440 --> 00:14:00,160 Speaker 1: get your thoughts on thematic indexing. What is it and 249 00:14:00,360 --> 00:14:03,160 Speaker 1: kind of give us a sense of where it is 250 00:14:03,200 --> 00:14:06,000 Speaker 1: in the in the marketplace right now. Absolutely thanks for 251 00:14:06,080 --> 00:14:08,800 Speaker 1: having me on guys. So, at a very high level, 252 00:14:08,920 --> 00:14:13,400 Speaker 1: thematic indexing is building an index that gains exposure or 253 00:14:13,480 --> 00:14:16,840 Speaker 1: targets a particular theme. Um, So you can look at 254 00:14:16,840 --> 00:14:20,080 Speaker 1: a theme like cloud computing, for example, or cybersecurity, or 255 00:14:20,200 --> 00:14:24,360 Speaker 1: robotics or clean energy. These are examples of thematic indexes 256 00:14:24,400 --> 00:14:26,040 Speaker 1: that we built that have been popular and that have 257 00:14:26,160 --> 00:14:29,720 Speaker 1: been licensed for typically et s here the US and overseas, 258 00:14:29,800 --> 00:14:32,120 Speaker 1: that have gained a lot of aascets over the last 259 00:14:32,120 --> 00:14:35,240 Speaker 1: few years and really reached a tipping point. So it's 260 00:14:35,280 --> 00:14:39,400 Speaker 1: bringing factors just like a step further basically and allowing everybody, 261 00:14:39,520 --> 00:14:42,240 Speaker 1: not just hedge funds, to get in, right. I mean, 262 00:14:43,000 --> 00:14:45,240 Speaker 1: we were one of the early kind of innovators in 263 00:14:45,280 --> 00:14:48,960 Speaker 1: the thematic indexing space, and what we realized was it's 264 00:14:49,000 --> 00:14:51,640 Speaker 1: not a very easy space to access. Like with factors, 265 00:14:51,680 --> 00:14:53,320 Speaker 1: the factors, I mean, there are screens that you can 266 00:14:53,360 --> 00:14:58,080 Speaker 1: easily run to identify factors and to identify companies that qualify. 267 00:14:58,760 --> 00:15:01,920 Speaker 1: Themes often cut a cross sectors and industries on a 268 00:15:01,960 --> 00:15:05,280 Speaker 1: global basis. A good example of that would be five 269 00:15:05,360 --> 00:15:09,640 Speaker 1: G technology or again UM cybersecurity. So what you need 270 00:15:09,720 --> 00:15:11,680 Speaker 1: to do there when you're accessing a theme is you 271 00:15:11,720 --> 00:15:14,320 Speaker 1: need to cast a global net. You need to identify, 272 00:15:14,960 --> 00:15:17,240 Speaker 1: um what is really relevant to that theme, and then 273 00:15:17,240 --> 00:15:19,680 Speaker 1: you've got to go a company by company to identify 274 00:15:19,840 --> 00:15:23,360 Speaker 1: companies that are generating typically a majority of their revenue 275 00:15:23,760 --> 00:15:26,960 Speaker 1: from a theme like cloud computing or cybersecurity or robotics. 276 00:15:27,040 --> 00:15:29,400 Speaker 1: May I UM. So it is different than factor, but 277 00:15:29,760 --> 00:15:31,720 Speaker 1: it is kind of a logical extension there, and it 278 00:15:31,800 --> 00:15:34,040 Speaker 1: does solve a problem, right. I Mean, you hear all 279 00:15:34,080 --> 00:15:36,680 Speaker 1: the time about people who are very interested in looking 280 00:15:36,880 --> 00:15:40,080 Speaker 1: at or gaining exposure of particular concept, but they don't 281 00:15:40,080 --> 00:15:41,680 Speaker 1: really know where to start, right. They might have one 282 00:15:41,760 --> 00:15:44,640 Speaker 1: company that they know or a few companies, But when 283 00:15:44,680 --> 00:15:46,520 Speaker 1: it comes to a thematic index, we've really done the 284 00:15:46,560 --> 00:15:48,960 Speaker 1: research for them and they can gain exposure to an 285 00:15:49,080 --> 00:15:52,200 Speaker 1: entire theme and the companies within that theme through through 286 00:15:52,200 --> 00:15:54,600 Speaker 1: an index and through a through an ETS. All right, 287 00:15:54,600 --> 00:15:58,680 Speaker 1: so well, here's the dumb question of this segment. What's 288 00:15:58,720 --> 00:16:01,800 Speaker 1: the difference between thematic indexing and buying an e T 289 00:16:02,000 --> 00:16:07,480 Speaker 1: F Well, you cannot invest directly in an index. So 290 00:16:07,600 --> 00:16:09,440 Speaker 1: the way it typically works is we will build an 291 00:16:09,480 --> 00:16:11,960 Speaker 1: index and then we will license it to an e 292 00:16:12,080 --> 00:16:14,520 Speaker 1: T f issuer, and the e T f issuer will 293 00:16:14,880 --> 00:16:17,360 Speaker 1: launch a fund that tracks the index. Now, a very 294 00:16:17,400 --> 00:16:20,760 Speaker 1: simple example that most of you guys would know would be, um, 295 00:16:21,000 --> 00:16:23,600 Speaker 1: the S ANDB five hundred with s P Y or IVP. 296 00:16:23,760 --> 00:16:26,800 Speaker 1: That's an ETS that tracks met tracks from index. We 297 00:16:26,920 --> 00:16:29,720 Speaker 1: do the same with other E T f issures. What's 298 00:16:29,800 --> 00:16:33,280 Speaker 1: some of the It's basically screening, right. The hard part 299 00:16:33,400 --> 00:16:36,840 Speaker 1: is screening these things. So what you're saying is when, Um, 300 00:16:36,920 --> 00:16:39,120 Speaker 1: when when when you look at E T S E 301 00:16:39,360 --> 00:16:41,400 Speaker 1: S G I mean, or when you look at space 302 00:16:41,520 --> 00:16:46,760 Speaker 1: for example. It's not so easy to screen as profitability 303 00:16:46,960 --> 00:16:48,920 Speaker 1: or buy backs or something where you can just super 304 00:16:49,000 --> 00:16:52,280 Speaker 1: easily use the Bloomberg to do it. And um, there's 305 00:16:52,320 --> 00:16:54,640 Speaker 1: a lot of choice out there, do you do you 306 00:16:54,720 --> 00:16:58,880 Speaker 1: have uh, you know, difficulty making those choices when you're 307 00:16:58,920 --> 00:17:01,200 Speaker 1: looking at certain things, because I imagine you could cast 308 00:17:01,240 --> 00:17:05,040 Speaker 1: the net wide and you could also be for example space, 309 00:17:05,080 --> 00:17:07,200 Speaker 1: you could just do rockets and satellites. But you could 310 00:17:07,200 --> 00:17:10,600 Speaker 1: also look at telecoms and lidar and a whole bunch 311 00:17:10,600 --> 00:17:14,280 Speaker 1: of other things. That's exactly you're hitting the nail on 312 00:17:14,320 --> 00:17:16,760 Speaker 1: the head. So it's it's really a multipart problem. The 313 00:17:16,880 --> 00:17:19,919 Speaker 1: first is how do you define that theme? And UM, 314 00:17:20,160 --> 00:17:21,600 Speaker 1: like you said, do we look at rockets, do we 315 00:17:21,680 --> 00:17:25,480 Speaker 1: look at satellites, we look at other types of trajectory technology, 316 00:17:26,119 --> 00:17:29,040 Speaker 1: So that's part one UM, it's defining the theme and 317 00:17:29,080 --> 00:17:31,720 Speaker 1: our research team does that UM. And then part two 318 00:17:31,840 --> 00:17:35,320 Speaker 1: is of course identifying the companies that are generating typically 319 00:17:35,800 --> 00:17:38,880 Speaker 1: revenue and ideally a majority of their revenue from that theme. 320 00:17:38,920 --> 00:17:42,680 Speaker 1: Because you don't want a company that's generating negligible amount 321 00:17:42,760 --> 00:17:45,040 Speaker 1: of revenue from a theme, because that's not really the 322 00:17:45,080 --> 00:17:46,960 Speaker 1: exposure that you're looking for, right. You want a company 323 00:17:47,000 --> 00:17:49,439 Speaker 1: that really is tied to that concept UM. And that's 324 00:17:49,480 --> 00:17:51,520 Speaker 1: what we've been doing for for six plus years now, 325 00:17:51,880 --> 00:17:55,200 Speaker 1: and it typically as a revenue focused target. We have 326 00:17:55,280 --> 00:17:57,760 Speaker 1: a dedicated team of analysts spread across a couple of 327 00:17:57,840 --> 00:18:01,000 Speaker 1: offices globally. Uh I do this and have done this 328 00:18:01,119 --> 00:18:03,119 Speaker 1: for for six years now. What are some of the 329 00:18:03,200 --> 00:18:08,240 Speaker 1: more popular indexes that you've recently worked on worth of 330 00:18:08,320 --> 00:18:11,960 Speaker 1: demand from the marketplace. Well, I would say it's in 331 00:18:12,000 --> 00:18:15,840 Speaker 1: a couple of different areas. The first is of course technology. UM. 332 00:18:16,000 --> 00:18:18,240 Speaker 1: I think people get technology because it's something that they 333 00:18:18,320 --> 00:18:22,040 Speaker 1: interact with on a daily basis. So are five G 334 00:18:22,960 --> 00:18:26,440 Speaker 1: Technology Index has done quite well. We licensed that here 335 00:18:26,480 --> 00:18:28,680 Speaker 1: to an issueer called first Trust for any TF that's 336 00:18:28,760 --> 00:18:33,639 Speaker 1: raised over a billion dollars. UM Robotics and Artificial Intelligence 337 00:18:33,760 --> 00:18:35,720 Speaker 1: is another one of our early themes that has also 338 00:18:35,720 --> 00:18:39,680 Speaker 1: been quite successful. That's where ANYTF here with global x 339 00:18:39,720 --> 00:18:41,879 Speaker 1: Funds that's raised over two and a half billion dollars. 340 00:18:42,000 --> 00:18:44,199 Speaker 1: And then, of course another one UM that has been 341 00:18:44,240 --> 00:18:46,280 Speaker 1: in the news a lot lately has been infrastructure. So 342 00:18:46,400 --> 00:18:49,080 Speaker 1: we have a US Infrastructure Index that we've built probably 343 00:18:49,080 --> 00:18:52,040 Speaker 1: around five years ago now UM that is recently taken 344 00:18:52,080 --> 00:18:53,840 Speaker 1: off and again has a few billion dollars in it. 345 00:18:54,280 --> 00:18:57,960 Speaker 1: UM and healthcare healthcare as well, working from home, cloud computing, 346 00:18:58,080 --> 00:19:01,360 Speaker 1: and now we've also seen clean energy really I think 347 00:19:01,359 --> 00:19:03,480 Speaker 1: start to hit a critical masterroom business perspective, and as 348 00:19:03,520 --> 00:19:04,919 Speaker 1: a result, people are starting to look at it more 349 00:19:05,040 --> 00:19:08,080 Speaker 1: from an investment perspective as well. By the way, infrastructure 350 00:19:08,200 --> 00:19:11,600 Speaker 1: is that is the perfect example of something that would 351 00:19:11,600 --> 00:19:15,639 Speaker 1: be difficult to define because you know, fifty percent of 352 00:19:15,640 --> 00:19:18,960 Speaker 1: Americans think of it as just rhoades, bridges and airports, 353 00:19:19,119 --> 00:19:22,720 Speaker 1: and uh fifty I'm thinking basically as a Republican Democrats 354 00:19:22,720 --> 00:19:26,560 Speaker 1: split right Democrats would think of it as child care 355 00:19:27,000 --> 00:19:32,760 Speaker 1: and nutrition and fascinating stuff. Rahul, great having you on, 356 00:19:32,880 --> 00:19:34,960 Speaker 1: hoping get you back. Rahoul san Charma there. He's a 357 00:19:34,960 --> 00:19:38,199 Speaker 1: managing partner at Index and as he's been explaining to us, 358 00:19:38,400 --> 00:19:41,680 Speaker 1: UM they put together thematic indexes and license them out 359 00:19:41,720 --> 00:19:45,320 Speaker 1: to um A t F companies. And that's really the 360 00:19:45,400 --> 00:19:48,359 Speaker 1: way the kids love to invest these days. And you 361 00:19:48,400 --> 00:19:55,760 Speaker 1: can understand why this is Bloomberg. I want to bring 362 00:19:55,800 --> 00:19:58,159 Speaker 1: in Bill Smith. He's a managing director at cb I 363 00:19:58,320 --> 00:20:02,560 Speaker 1: z M h M S National Tag Office. And Um, 364 00:20:02,720 --> 00:20:05,840 Speaker 1: we got this infrastructure deal voted on late last night. Um, 365 00:20:05,880 --> 00:20:07,960 Speaker 1: they're gonna seems like they're gonna work it out now 366 00:20:08,960 --> 00:20:11,920 Speaker 1: and make it happen. Um, what do we know about 367 00:20:11,920 --> 00:20:14,440 Speaker 1: the tax changes? This is what the market seems to 368 00:20:14,480 --> 00:20:17,119 Speaker 1: care about. David costing from Goldman taxes on the other day. 369 00:20:17,119 --> 00:20:18,840 Speaker 1: So the only things that matter for the market right 370 00:20:18,880 --> 00:20:25,560 Speaker 1: now are rates and tax policy. Well, well, we don't 371 00:20:25,600 --> 00:20:29,200 Speaker 1: know is virtually anything about taxes, because we've got the 372 00:20:29,680 --> 00:20:34,160 Speaker 1: two bills going, and there's no guarantee that the one 373 00:20:34,280 --> 00:20:37,960 Speaker 1: tee that has been agreed upon, the Biparisan one, is 374 00:20:38,119 --> 00:20:42,440 Speaker 1: going anywhere because essentially all they did was agree to 375 00:20:43,000 --> 00:20:45,840 Speaker 1: bring it up for debate. It had been blocked for debate, 376 00:20:45,920 --> 00:20:48,800 Speaker 1: so it couldn't go anywhere. So now it's up for 377 00:20:48,920 --> 00:20:52,440 Speaker 1: debate on the Senate floor. Hopefully they get it past. 378 00:20:52,720 --> 00:20:55,639 Speaker 1: We don't really have tax provisions in that one. The 379 00:20:55,840 --> 00:20:59,520 Speaker 1: one that will contain the tax provisions most likely is 380 00:20:59,640 --> 00:21:03,600 Speaker 1: the fall targeted three point five trillion dollar bill that 381 00:21:03,680 --> 00:21:06,840 Speaker 1: they're going to try and push through using reconciliation, meaning 382 00:21:06,880 --> 00:21:09,159 Speaker 1: they don't have to get their sixty votes in the Senate, 383 00:21:09,640 --> 00:21:12,400 Speaker 1: they only need the all the Democrats and the Vice 384 00:21:12,520 --> 00:21:16,320 Speaker 1: President to get that through. So there they are right 385 00:21:16,440 --> 00:21:19,840 Speaker 1: now debating on what the pay fors for that will be, 386 00:21:20,080 --> 00:21:22,200 Speaker 1: meaning how are they going to pay for that bill 387 00:21:22,520 --> 00:21:26,479 Speaker 1: because reconciliation doesn't allow you to increase the deficit over 388 00:21:26,560 --> 00:21:29,720 Speaker 1: the tenure budget window. So we have what I like 389 00:21:29,840 --> 00:21:32,040 Speaker 1: to call the wish list, which is the green book 390 00:21:32,080 --> 00:21:35,200 Speaker 1: put out by Treasury that puts some flesh on the 391 00:21:35,280 --> 00:21:39,200 Speaker 1: bones of the Biden tax plans, but everything seems to 392 00:21:39,240 --> 00:21:42,960 Speaker 1: be up for debate. The scariest part of that perhaps 393 00:21:44,080 --> 00:21:48,080 Speaker 1: was the reference to the increase in capital gains to 394 00:21:48,400 --> 00:21:51,399 Speaker 1: ordinary income rates if you're over a million dollars was 395 00:21:51,480 --> 00:21:54,560 Speaker 1: going to be effective as of the quote unquote announcement date, 396 00:21:54,680 --> 00:21:57,520 Speaker 1: which wasn't defined but could have been pushed back as 397 00:21:57,640 --> 00:22:02,520 Speaker 1: late as April. So we think that there's probably going 398 00:22:02,560 --> 00:22:05,920 Speaker 1: to be no retroactivity because the bill has gone so 399 00:22:06,119 --> 00:22:09,919 Speaker 1: deep into the year. So I think we're probably safe 400 00:22:09,960 --> 00:22:13,720 Speaker 1: that we're not going to have that retroactive capital gains increase, 401 00:22:14,160 --> 00:22:16,040 Speaker 1: but we really don't know what's going to go in 402 00:22:16,119 --> 00:22:18,040 Speaker 1: because there's going to be a lot of fighting. The 403 00:22:18,119 --> 00:22:22,560 Speaker 1: Republicans bounced the increase to the I R. S budget alt, 404 00:22:22,760 --> 00:22:25,000 Speaker 1: we'll see if that sneaks back in. That has a 405 00:22:25,119 --> 00:22:28,119 Speaker 1: very large return on investments that would be a huge 406 00:22:28,200 --> 00:22:31,240 Speaker 1: pay for If that's out, it's going to put pressure 407 00:22:31,440 --> 00:22:35,960 Speaker 1: on the Democrats to put tax increases into that three 408 00:22:36,040 --> 00:22:39,639 Speaker 1: point five trillion dollar infrastructure bill that is supposed to 409 00:22:39,720 --> 00:22:43,000 Speaker 1: go through in the fall. At some point. Bill. There's 410 00:22:43,040 --> 00:22:45,000 Speaker 1: a lot of folks out there that say, hey, we 411 00:22:45,080 --> 00:22:48,000 Speaker 1: don't necessarily need to raise tax rates. What we need 412 00:22:48,080 --> 00:22:52,080 Speaker 1: to do is tighten the loopholes for the tax laws 413 00:22:52,160 --> 00:22:55,200 Speaker 1: that are already on the books. Is that a viable 414 00:22:55,320 --> 00:22:59,159 Speaker 1: argument or is that a political talking point? Well, considering 415 00:22:59,359 --> 00:23:01,800 Speaker 1: that I have been doing this for forty plus years 416 00:23:01,960 --> 00:23:05,880 Speaker 1: and that's talked about every single year, I would say 417 00:23:06,040 --> 00:23:10,159 Speaker 1: that it's it's easier said than done. Let's put it 418 00:23:10,280 --> 00:23:14,680 Speaker 1: that way. So it's much easier to know and understand 419 00:23:15,200 --> 00:23:17,480 Speaker 1: that you're going to bring in a hundred billion dollars 420 00:23:17,560 --> 00:23:19,880 Speaker 1: if you raise the corporate rate by one per cent. 421 00:23:20,440 --> 00:23:23,639 Speaker 1: Then to tighten the so called loopholes. Now, if you 422 00:23:23,720 --> 00:23:27,200 Speaker 1: want to talk about tightening a loophole, the so called 423 00:23:27,840 --> 00:23:30,760 Speaker 1: minimum tax on corporations, and the Biden Plan would be 424 00:23:31,160 --> 00:23:35,040 Speaker 1: just that, because you have corporations with lots and lots 425 00:23:35,080 --> 00:23:38,480 Speaker 1: of book income and no taxable income. So that would 426 00:23:38,520 --> 00:23:40,680 Speaker 1: be the same people who say we want to tighten 427 00:23:40,760 --> 00:23:43,320 Speaker 1: loopholes are generally going to be opposed to that minimum 428 00:23:43,400 --> 00:23:46,560 Speaker 1: corporate tax that is proposed in the Biden Plan. So 429 00:23:46,840 --> 00:23:50,399 Speaker 1: that's that's often a political talking point and a very 430 00:23:50,520 --> 00:23:54,479 Speaker 1: difficult thing to implement. I can understand that. I mean, 431 00:23:55,200 --> 00:23:57,639 Speaker 1: why is the federal government trying to influence behavior with 432 00:23:57,760 --> 00:24:02,320 Speaker 1: tax policy? Why are there any loop holes? To begin with? Um, 433 00:24:02,840 --> 00:24:05,600 Speaker 1: wouldn't it be better if we just had a straight 434 00:24:05,720 --> 00:24:08,760 Speaker 1: tax that you knew you had to pay. I mean, frankly, 435 00:24:08,800 --> 00:24:12,280 Speaker 1: I don't understand why there's a corporate tax because you know, 436 00:24:12,640 --> 00:24:17,880 Speaker 1: owners of those companies already pay tax on profits, dividends, um, 437 00:24:18,600 --> 00:24:22,040 Speaker 1: capital gains, So why tax the company again? On the 438 00:24:22,080 --> 00:24:25,640 Speaker 1: corporate structure? Well, as I've said for years and years 439 00:24:25,680 --> 00:24:29,119 Speaker 1: and years, we have moved to a system where all 440 00:24:29,240 --> 00:24:33,119 Speaker 1: social policies enacted through the tax code, which isn't perhaps 441 00:24:33,240 --> 00:24:35,200 Speaker 1: the best way to do it, but that seems to 442 00:24:35,280 --> 00:24:37,800 Speaker 1: be where we are. And the problem is, once you 443 00:24:37,880 --> 00:24:41,320 Speaker 1: get things in that benefit a certain group, it's very 444 00:24:41,359 --> 00:24:43,320 Speaker 1: difficult to get them out because you're going to have 445 00:24:43,480 --> 00:24:48,320 Speaker 1: people fighting very hard to leave them the way they are. So, uh, 446 00:24:49,080 --> 00:24:51,840 Speaker 1: should we enact social policy through the tax code. That's 447 00:24:51,920 --> 00:24:54,200 Speaker 1: for someone to higher than my pay grade. But it 448 00:24:54,400 --> 00:24:57,080 Speaker 1: seems like we're certainly doing it, and have been doing 449 00:24:57,160 --> 00:24:59,320 Speaker 1: it for years and years and years and years. And 450 00:24:59,440 --> 00:25:03,160 Speaker 1: on the corporate tax, why why is there a corporate tax? 451 00:25:03,840 --> 00:25:08,960 Speaker 1: I think it's because it's an easy revenue raiser for 452 00:25:09,119 --> 00:25:12,680 Speaker 1: one thing, and you have all the pass through entities 453 00:25:12,800 --> 00:25:15,680 Speaker 1: where a majority of small businesses conducted, so that's only 454 00:25:15,760 --> 00:25:18,280 Speaker 1: one level of tax. If you're in an LLC, you're 455 00:25:18,280 --> 00:25:21,639 Speaker 1: an S corporation. The owners, as you know, pay the tax, 456 00:25:21,760 --> 00:25:25,960 Speaker 1: not the entity generally. But with corporations, and particularly with 457 00:25:26,119 --> 00:25:29,919 Speaker 1: large corporations, you have a much broader base of ownership 458 00:25:30,200 --> 00:25:34,359 Speaker 1: of mom and pops, so they're extracting the whole athlete 459 00:25:34,400 --> 00:25:36,960 Speaker 1: corporate level. Hey, Bill, thanks so much for joining us 460 00:25:36,960 --> 00:25:39,480 Speaker 1: to really appreciate it. Bill Smith, Managing Director, C B 461 00:25:39,720 --> 00:25:43,359 Speaker 1: I Z M h M S National Tax Office. Taxes 462 00:25:43,400 --> 00:25:45,720 Speaker 1: are going up, but still a lot of work to 463 00:25:45,760 --> 00:25:49,240 Speaker 1: be done in Washington on those details. Well, more coming up. 464 00:25:49,440 --> 00:25:53,600 Speaker 1: This is Bloomberg. Thanks for listening to the Bloomberg Markets podcast. 465 00:25:54,040 --> 00:25:57,160 Speaker 1: You can subscribe and listen to interviews with Apple Podcasts 466 00:25:57,359 --> 00:26:01,240 Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller, I'm 467 00:26:01,320 --> 00:26:04,960 Speaker 1: on Twitter at Matt Miller vy three, and I'm Fall 468 00:26:05,000 --> 00:26:07,840 Speaker 1: Sweeney I'm on Twitter at pt Sweeney. Before the podcast, 469 00:26:07,920 --> 00:26:10,400 Speaker 1: you can always catch us worldwide at Bloomberg Radio.