1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 2 00:00:08,760 --> 00:00:11,520 Speaker 1: Along with my co host Lisa Bramowitz. Each day we 3 00:00:11,640 --> 00:00:15,120 Speaker 1: bring you the most important, noteworthy, and useful interviews for 4 00:00:15,200 --> 00:00:17,840 Speaker 1: you and your money, whether you're at the grocery store 5 00:00:17,960 --> 00:00:20,720 Speaker 1: or the trading floor. Find the Bloomberg p m L 6 00:00:20,840 --> 00:00:33,199 Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Obviously, 7 00:00:33,240 --> 00:00:37,080 Speaker 1: we've been focusing a lot on bitcoin, but one question 8 00:00:37,760 --> 00:00:42,560 Speaker 1: remains supreme. Can bitcoin ever act as a true currency? 9 00:00:42,680 --> 00:00:44,919 Speaker 1: Is it the future of money? Right now? I want 10 00:00:44,960 --> 00:00:47,960 Speaker 1: to bring in Wolfgang Custer. He is chief executive officer, chairman, 11 00:00:48,000 --> 00:00:52,600 Speaker 1: and co founder of fire Apps, which is based in Phoenix, Arizona. Wolfgang, 12 00:00:52,600 --> 00:00:55,120 Speaker 1: thank you so much for joining us. Fire Apps is 13 00:00:55,160 --> 00:00:58,920 Speaker 1: known as a firm that helps companies understand their foreign 14 00:00:58,920 --> 00:01:03,120 Speaker 1: exchange their currency risk. Does your recent focus on bitcoin 15 00:01:03,280 --> 00:01:08,080 Speaker 1: indicate that you consider it a currency? No, I don't. 16 00:01:08,120 --> 00:01:11,280 Speaker 1: I think that while some people may consider it a 17 00:01:11,360 --> 00:01:14,640 Speaker 1: currency um to the point that there's some sort of 18 00:01:14,720 --> 00:01:17,920 Speaker 1: size to it, but reality is that I've been talking 19 00:01:17,959 --> 00:01:20,480 Speaker 1: to a lot of corporate CEOs and CFOs as well 20 00:01:20,480 --> 00:01:23,760 Speaker 1: as treasury departments, and none of them are really with 21 00:01:23,800 --> 00:01:27,199 Speaker 1: the exception of some maybe marketing gimmicks, are really looking 22 00:01:27,240 --> 00:01:29,840 Speaker 1: at bitcoin as a currency that they're going to be 23 00:01:29,880 --> 00:01:33,920 Speaker 1: doing business in. And there really are three reasons for that. Um. 24 00:01:33,959 --> 00:01:36,720 Speaker 1: The first one is that the Federal Reserve Bank itself 25 00:01:36,800 --> 00:01:39,280 Speaker 1: will end up coming out with a digital currency, and 26 00:01:39,319 --> 00:01:42,119 Speaker 1: that's what they're waiting for, and other governments will as well. 27 00:01:42,800 --> 00:01:46,759 Speaker 1: Secondly is there is a Senate Bill twelve forty one 28 00:01:47,040 --> 00:01:49,600 Speaker 1: that has been discussed for over two hours on November 29 00:01:49,600 --> 00:01:53,200 Speaker 1: twenty eight, so very recently, where they're looking to change 30 00:01:53,240 --> 00:01:57,840 Speaker 1: the definition of financial institutions and what that would do. 31 00:01:58,000 --> 00:01:59,920 Speaker 1: If they get what they're looking to get, which is 32 00:02:00,080 --> 00:02:04,680 Speaker 1: pretty likely, it would actually criminalize bitcoin, um and would 33 00:02:04,680 --> 00:02:11,200 Speaker 1: make it who would make the liquidity rather questionable. And 34 00:02:11,200 --> 00:02:13,560 Speaker 1: then we'll go back, Yeah, I know, that's fine, it's 35 00:02:13,560 --> 00:02:15,799 Speaker 1: no perm at home. We can talk about taxation here 36 00:02:15,800 --> 00:02:17,560 Speaker 1: in a little bit, which is the third part that 37 00:02:17,639 --> 00:02:21,880 Speaker 1: the governments will do to really to some degree fight 38 00:02:21,919 --> 00:02:24,040 Speaker 1: bitcoin in that sense. But let's go back to two. 39 00:02:24,080 --> 00:02:26,240 Speaker 1: Then I want to talk about too, just because if 40 00:02:26,240 --> 00:02:30,480 Speaker 1: you criminalized bitcoin that would certainly hamper the meteoric rise 41 00:02:31,000 --> 00:02:35,040 Speaker 1: that we have seen this year. How would it do that? Well, 42 00:02:35,040 --> 00:02:37,520 Speaker 1: it would do that by changing the definition of what 43 00:02:37,680 --> 00:02:41,880 Speaker 1: is a financial institution and what are they allowed to do? 44 00:02:42,240 --> 00:02:45,760 Speaker 1: So how transparent do they have to be? And quite frankly, 45 00:02:45,800 --> 00:02:48,040 Speaker 1: the whole thing on bitcoin, as you well know, is 46 00:02:48,120 --> 00:02:52,080 Speaker 1: that it is based on a blockchain technology, one of 47 00:02:52,160 --> 00:02:57,600 Speaker 1: many blockchain technologies that actually hides who's doing the transactions, 48 00:02:57,960 --> 00:03:00,239 Speaker 1: and the United States government as well as many other 49 00:03:00,280 --> 00:03:03,280 Speaker 1: governments saying that's not acceptable. Okay, I want to go 50 00:03:03,320 --> 00:03:05,040 Speaker 1: back to the first thing that you said too, because 51 00:03:05,080 --> 00:03:08,040 Speaker 1: this is fascinating that the Federal Reserve could come out 52 00:03:08,080 --> 00:03:11,560 Speaker 1: with its own digital currency as soon as next year. 53 00:03:11,840 --> 00:03:13,640 Speaker 1: What does that mean? I mean there is a difference 54 00:03:13,639 --> 00:03:16,400 Speaker 1: between digital currency, which we all use when we use 55 00:03:16,440 --> 00:03:19,720 Speaker 1: credit cards or uh you know, Apple pay or other 56 00:03:19,760 --> 00:03:22,799 Speaker 1: things that are online transactions. It's another thing for it 57 00:03:22,840 --> 00:03:24,720 Speaker 1: to be on blockchain. So what are you talking about 58 00:03:24,720 --> 00:03:28,760 Speaker 1: specifically with the Fed issuing this digital currency. Yes, So, 59 00:03:28,800 --> 00:03:31,560 Speaker 1: what I believe has happened over the last five to 60 00:03:31,680 --> 00:03:34,360 Speaker 1: ten years, if you arguably since two thousand eight, is 61 00:03:34,400 --> 00:03:40,080 Speaker 1: that UM, the people that started cryptocurrencies UM really looked 62 00:03:40,120 --> 00:03:42,800 Speaker 1: at there is an inefficiency in the market, and I 63 00:03:42,840 --> 00:03:46,960 Speaker 1: believe they were right. Their inefficiencies twofold. One is it 64 00:03:47,040 --> 00:03:50,440 Speaker 1: takes two days on average to move from one account 65 00:03:50,440 --> 00:03:53,600 Speaker 1: to another, and two is it's pretty expensive. So what 66 00:03:53,680 --> 00:03:56,400 Speaker 1: they tried to achieve as a currency that is digital 67 00:03:56,480 --> 00:03:59,240 Speaker 1: and immediate, as you're saying, to some degree like credit 68 00:03:59,280 --> 00:04:02,720 Speaker 1: cards are as well as some that are not as expensive. 69 00:04:03,160 --> 00:04:06,120 Speaker 1: And so these inefficiencies need to be embraced by the 70 00:04:06,160 --> 00:04:10,760 Speaker 1: governments and they are interestingly here and even Putent came 71 00:04:10,760 --> 00:04:14,680 Speaker 1: out with that they will issue a crypto ruble in 72 00:04:14,880 --> 00:04:17,560 Speaker 1: January of next year already, So this is pretty imminent. 73 00:04:18,040 --> 00:04:19,880 Speaker 1: Is the fact that, at the end of the day 74 00:04:20,080 --> 00:04:25,279 Speaker 1: is that blockchain can actually use quite exactly opposite the 75 00:04:25,320 --> 00:04:28,800 Speaker 1: way Bitcoin is using it right now. I e. The reason, 76 00:04:28,839 --> 00:04:31,440 Speaker 1: one of the two reasons that Putent wants to do 77 00:04:31,480 --> 00:04:35,440 Speaker 1: this is because he wants to gain better visibility into 78 00:04:35,839 --> 00:04:39,440 Speaker 1: all transactions related to the ruble. The United States will 79 00:04:39,520 --> 00:04:43,240 Speaker 1: end up doing the same thing. This is really fascinating. 80 00:04:43,320 --> 00:04:46,360 Speaker 1: So in other words, it's sort of a blockchain that, 81 00:04:46,520 --> 00:04:51,440 Speaker 1: rather than decentralizing the currency, really centralizes it and gives 82 00:04:51,480 --> 00:04:55,400 Speaker 1: the government visibility into every transaction. Is that correct? That 83 00:04:55,520 --> 00:04:57,880 Speaker 1: is correct? That is my belief, and that's what everything 84 00:04:57,960 --> 00:05:00,240 Speaker 1: is pointing towards and if you look back at of 85 00:05:00,320 --> 00:05:04,080 Speaker 1: the work that's already been done in Washington on this 86 00:05:04,240 --> 00:05:07,560 Speaker 1: on dual ledger technology, it's absolutely confirms that. So the 87 00:05:07,560 --> 00:05:10,000 Speaker 1: Treasure Department, basically, I'm trying to figure out how this 88 00:05:10,040 --> 00:05:13,479 Speaker 1: would work where they remove all paper currency from circulation, 89 00:05:13,600 --> 00:05:15,920 Speaker 1: or they would just have a subset that would be 90 00:05:16,040 --> 00:05:19,240 Speaker 1: used for business transaction transactions and start there. How would 91 00:05:19,240 --> 00:05:21,839 Speaker 1: it work, How would it begin? Yeah, the way I 92 00:05:21,960 --> 00:05:24,680 Speaker 1: envisioned it is it's kind of like the Euro. For 93 00:05:24,920 --> 00:05:27,920 Speaker 1: when the Euro came out. Um, you know, you still 94 00:05:27,960 --> 00:05:30,320 Speaker 1: had for a while Deutsche marks and French franks, and 95 00:05:30,360 --> 00:05:33,480 Speaker 1: then slowly but surely they disappeared and now you can't 96 00:05:33,680 --> 00:05:36,479 Speaker 1: you know, can't use a deutsch mark anymore in Germany, 97 00:05:36,520 --> 00:05:38,800 Speaker 1: but you can use euros. And I anticipate this to 98 00:05:38,839 --> 00:05:41,279 Speaker 1: be very similar. It's going to take time. It's not 99 00:05:41,320 --> 00:05:44,880 Speaker 1: going to be immediately. Digital dollar is here and therefore 100 00:05:44,960 --> 00:05:48,720 Speaker 1: paper currencies are gone, but it is definitely going into 101 00:05:48,720 --> 00:05:51,599 Speaker 1: that direction. If you think about the way we transact today, 102 00:05:52,000 --> 00:05:53,760 Speaker 1: you know, I have dollars in my wallet, I hardly 103 00:05:53,760 --> 00:05:56,000 Speaker 1: ever use them. I certainly use my credit cards or 104 00:05:56,080 --> 00:05:58,599 Speaker 1: other payment methods. And this is going to be the 105 00:05:58,600 --> 00:06:01,800 Speaker 1: same thing. It's going to be better, quicker, faster, yet 106 00:06:01,960 --> 00:06:04,200 Speaker 1: very controlled. And the reason that the United States FED 107 00:06:04,600 --> 00:06:06,600 Speaker 1: isn't going to come out with this in January is 108 00:06:06,680 --> 00:06:09,000 Speaker 1: because they're going to have to build a very secure 109 00:06:09,600 --> 00:06:13,640 Speaker 1: um blockchain that everybody trusts that won't be broken into 110 00:06:14,279 --> 00:06:18,600 Speaker 1: so fire app clients include Google, ericson Pepsi, Nike Accenture, 111 00:06:18,680 --> 00:06:21,680 Speaker 1: and how do they feel about the introduction of a 112 00:06:21,680 --> 00:06:26,440 Speaker 1: cryptocurrency and how do they feel about bitcoin? I think 113 00:06:26,480 --> 00:06:28,559 Speaker 1: that all of them in general, I certainly have NBA, 114 00:06:28,600 --> 00:06:30,760 Speaker 1: so I'm not going to speak to one particular one, 115 00:06:30,800 --> 00:06:33,960 Speaker 1: but all in general have the belief that digital currency 116 00:06:34,040 --> 00:06:36,159 Speaker 1: will actually be good for them. I think it will 117 00:06:36,200 --> 00:06:40,240 Speaker 1: help them transact faster and cheaper. And yet they do 118 00:06:40,320 --> 00:06:42,320 Speaker 1: realize one of the reasons that we're also talking to 119 00:06:42,400 --> 00:06:46,640 Speaker 1: them is that that requires more automation on their parts. 120 00:06:46,720 --> 00:06:49,880 Speaker 1: So as digital currencies are coming abroad and all of 121 00:06:49,920 --> 00:06:53,480 Speaker 1: a sudden, they don't have manual processes that allow them 122 00:06:53,520 --> 00:06:56,080 Speaker 1: to spend two days of settling currencies, it's going to 123 00:06:56,160 --> 00:06:59,760 Speaker 1: be immediate, and so they're looking at what the company 124 00:07:00,120 --> 00:07:02,320 Speaker 1: to do to be ready for this, and how to 125 00:07:02,400 --> 00:07:08,039 Speaker 1: automate these processes which end up streamlining liquidity really to 126 00:07:08,240 --> 00:07:10,000 Speaker 1: that to the point that they will, so it's gonna 127 00:07:10,040 --> 00:07:12,480 Speaker 1: be actually going to be embraced by them and there 128 00:07:12,720 --> 00:07:16,520 Speaker 1: and I'm not hearing anything negative about digital currency. I 129 00:07:16,560 --> 00:07:19,720 Speaker 1: am hearing that for a bitcoin is just too volatile 130 00:07:19,760 --> 00:07:23,400 Speaker 1: to get involved and from a true main mean wolf gangcaster, 131 00:07:23,520 --> 00:07:25,400 Speaker 1: thank you so much for joining as CEO, chairman and 132 00:07:25,440 --> 00:07:28,280 Speaker 1: co founder of fire Apps in Phoenix, Arizona. This is Bloomberg. 133 00:07:47,760 --> 00:07:52,120 Speaker 1: Viagraph is going generic. This is a big moment for 134 00:07:52,240 --> 00:07:55,880 Speaker 1: the millions of people who have been affected by this drug. 135 00:07:55,880 --> 00:07:58,160 Speaker 1: And here to talk about it is John Tozzi. He's 136 00:07:58,200 --> 00:08:01,240 Speaker 1: a healthcare reporter for Bloomberg News and he joins us 137 00:08:01,280 --> 00:08:03,880 Speaker 1: here in our eleven three oh studios. So your piece 138 00:08:03,960 --> 00:08:09,720 Speaker 1: was phenomenal. You basically talked to the creators of viagra 139 00:08:10,080 --> 00:08:13,080 Speaker 1: and about the creation of it. And before we go 140 00:08:13,200 --> 00:08:15,360 Speaker 1: into the implications of it going to naric, can you 141 00:08:15,400 --> 00:08:19,040 Speaker 1: just give us the story behind how they came to 142 00:08:19,720 --> 00:08:24,320 Speaker 1: develop this drug. Sure, this was a drug that Fiser 143 00:08:24,440 --> 00:08:28,160 Speaker 1: was actually investigating for a different purpose back in uh 144 00:08:28,240 --> 00:08:32,559 Speaker 1: the late excuse me eies and early nineties. They were 145 00:08:32,600 --> 00:08:36,720 Speaker 1: looking for treatments for hypertension, high blood pressure, and then 146 00:08:37,280 --> 00:08:43,640 Speaker 1: for chest pain and the compound that they UH you know, 147 00:08:43,640 --> 00:08:46,800 Speaker 1: the chemists that Fiser at a lab in England were developing. 148 00:08:47,160 --> 00:08:52,040 Speaker 1: It didn't really show a lot of effect in those conditions, 149 00:08:52,080 --> 00:08:55,920 Speaker 1: but it did have a side effect UM that they 150 00:08:56,280 --> 00:09:00,600 Speaker 1: decided was worth looking into. So the side effect was 151 00:09:00,760 --> 00:09:04,880 Speaker 1: that it allowed erections to last longer and come more frequently, 152 00:09:05,280 --> 00:09:08,440 Speaker 1: and some of the details were hysterical. One of my 153 00:09:08,880 --> 00:09:12,439 Speaker 1: favorite from this whole thing is UH that the study 154 00:09:12,600 --> 00:09:16,240 Speaker 1: subjects were fitted what was called ridges scan UH and 155 00:09:16,320 --> 00:09:18,439 Speaker 1: given the drug and shown blue movies or movies that 156 00:09:18,480 --> 00:09:20,640 Speaker 1: were soft pornography or hard pornography. At the end of 157 00:09:20,640 --> 00:09:22,520 Speaker 1: the week we had to get the drugs back from 158 00:09:22,520 --> 00:09:25,120 Speaker 1: them anything that was unused. Some of them would not 159 00:09:25,280 --> 00:09:28,120 Speaker 1: give the drug back. This is actually something we heard 160 00:09:28,160 --> 00:09:32,240 Speaker 1: from several researchers we talked to that during trials. All 161 00:09:32,320 --> 00:09:36,160 Speaker 1: along the time when viagra was being developed. You know 162 00:09:36,480 --> 00:09:38,920 Speaker 1: that when you when you test a drug, you can 163 00:09:38,960 --> 00:09:41,680 Speaker 1: only give it for a limited amount of limited period 164 00:09:41,720 --> 00:09:43,800 Speaker 1: until you know that it's not going to be toxic 165 00:09:43,880 --> 00:09:46,679 Speaker 1: for when taken for longer UM and the researchers had 166 00:09:46,720 --> 00:09:49,320 Speaker 1: real trouble getting the drugs back. People didn't want to 167 00:09:49,320 --> 00:09:52,400 Speaker 1: give this up. And I think for Fiser, um, you know, 168 00:09:52,480 --> 00:09:55,800 Speaker 1: this was a condition that didn't really have a pharmaceutical 169 00:09:55,800 --> 00:09:58,760 Speaker 1: treatment before viagra, and that was an indication to them 170 00:09:58,840 --> 00:10:01,720 Speaker 1: of how important could be to the people who would 171 00:10:01,920 --> 00:10:05,160 Speaker 1: take it well and John to that point, Viagara kind 172 00:10:05,160 --> 00:10:09,880 Speaker 1: of changed the conversation about sex on a pretty massive scale. 173 00:10:09,920 --> 00:10:13,559 Speaker 1: I mean, in one case, they're one of the researchers, 174 00:10:13,559 --> 00:10:15,240 Speaker 1: one of the developers was going to go on a 175 00:10:15,280 --> 00:10:18,440 Speaker 1: major television network and they said, what are you going 176 00:10:18,520 --> 00:10:20,440 Speaker 1: to say? And he said he was going to use 177 00:10:20,480 --> 00:10:22,959 Speaker 1: the word erection and they said, no, you can't do that, right. 178 00:10:23,000 --> 00:10:25,480 Speaker 1: I think that was actually not one of the Fiser 179 00:10:25,520 --> 00:10:29,080 Speaker 1: researchers but another doctor, But yeah, that I think. You know, 180 00:10:29,120 --> 00:10:34,480 Speaker 1: it was a period when um, in the culture, Americans 181 00:10:34,520 --> 00:10:42,000 Speaker 1: were becoming more comfortable kind of talking frankly about sexuality, um, 182 00:10:42,040 --> 00:10:44,480 Speaker 1: you know, in a way that you know, decades before 183 00:10:44,640 --> 00:10:49,120 Speaker 1: wasn't really the case. So now that the drug is 184 00:10:49,200 --> 00:10:52,520 Speaker 1: going generic, what are the implications It will be cheaper, 185 00:10:53,200 --> 00:10:56,280 Speaker 1: it will be less of a moneymaker for Fiser, and 186 00:10:56,600 --> 00:11:00,120 Speaker 1: will it become more mainstream or it already has out 187 00:11:00,200 --> 00:11:03,600 Speaker 1: in so mainstream that it really can't really have much more. Yeah, 188 00:11:03,600 --> 00:11:05,160 Speaker 1: I mean I think it's it's hard to tell. I mean, 189 00:11:05,200 --> 00:11:07,319 Speaker 1: the price will go down. That happens whenever there's a 190 00:11:07,360 --> 00:11:12,560 Speaker 1: generic version of the drug. Um. You know. I know 191 00:11:12,640 --> 00:11:17,160 Speaker 1: there's certain in the United Kingdom they're actually applying or 192 00:11:17,200 --> 00:11:19,680 Speaker 1: in the process of trying to have it sold over 193 00:11:19,720 --> 00:11:23,600 Speaker 1: the counter. So I think you know, from the drug manufacturers, 194 00:11:24,280 --> 00:11:28,160 Speaker 1: uh point of view, the um you know, the goal 195 00:11:28,240 --> 00:11:33,560 Speaker 1: is to make it more widely available, more easily available. Um. 196 00:11:33,679 --> 00:11:35,960 Speaker 1: But you know, we'll see what happens with the generic. 197 00:11:36,000 --> 00:11:39,160 Speaker 1: It's unclear how much. Um. You know, the price is 198 00:11:39,200 --> 00:11:42,360 Speaker 1: a barrier to people taking viagara if everybody who wants 199 00:11:42,400 --> 00:11:44,920 Speaker 1: it pretty much has it. One one question that I 200 00:11:45,000 --> 00:11:47,839 Speaker 1: have is from the female side. I mean, it's it's 201 00:11:47,840 --> 00:11:51,199 Speaker 1: one thing for men to have this, but um, there's 202 00:11:51,240 --> 00:11:54,240 Speaker 1: a lot of comedy show is kind of highlighted. Men 203 00:11:54,280 --> 00:11:56,200 Speaker 1: would come home and be very excited and the women 204 00:11:56,240 --> 00:11:58,719 Speaker 1: would say, oh my god. No. Um. So there's a 205 00:11:58,800 --> 00:12:01,720 Speaker 1: question about you know, a allowing women's libido to match 206 00:12:02,000 --> 00:12:05,320 Speaker 1: men's on viagra. Is there any development there with respect 207 00:12:05,360 --> 00:12:09,240 Speaker 1: to a feminine I mean, certainly in the history of viagra. 208 00:12:09,360 --> 00:12:12,520 Speaker 1: That was something that UM people were, you know, that 209 00:12:12,640 --> 00:12:15,840 Speaker 1: was an issue that women were you know, did not 210 00:12:15,960 --> 00:12:18,720 Speaker 1: have a drug that worked. Similarly, Viagra was actually tested 211 00:12:18,760 --> 00:12:21,400 Speaker 1: in women at one point to see if it would work, 212 00:12:21,440 --> 00:12:25,840 Speaker 1: and it didn't show much efficacy. UM. There is at 213 00:12:25,920 --> 00:12:31,160 Speaker 1: least one product on the market intended to UM help 214 00:12:31,880 --> 00:12:36,080 Speaker 1: improve women's libidos. But I think the consensus is that, 215 00:12:36,520 --> 00:12:40,840 Speaker 1: you know, it doesn't have the same um effect, you know, 216 00:12:40,880 --> 00:12:45,280 Speaker 1: the same degree of efficacy that viagra had for men. 217 00:12:45,400 --> 00:12:49,040 Speaker 1: So you know, that's an area of research and science 218 00:12:49,120 --> 00:12:53,200 Speaker 1: that I think is still being investigated. Just real quick, 219 00:12:53,240 --> 00:12:54,760 Speaker 1: can you give us a sense of how big a 220 00:12:54,840 --> 00:12:58,200 Speaker 1: business viagra has been pro visor, Uh, well, we look, 221 00:12:58,400 --> 00:13:02,320 Speaker 1: we looked up the sales over since it was released. 222 00:13:03,600 --> 00:13:07,840 Speaker 1: It's been about thirty six billion in sales UM. That's 223 00:13:07,840 --> 00:13:12,520 Speaker 1: a big number, but it's by no means Fiser's biggest drug. UM. 224 00:13:12,559 --> 00:13:15,360 Speaker 1: So you know, it's an important product, but you know, 225 00:13:15,400 --> 00:13:18,480 Speaker 1: it's interesting the Fiser many fightser veterans we talked to 226 00:13:18,480 --> 00:13:20,520 Speaker 1: you said, you know, it wasn't our biggest product, but 227 00:13:20,559 --> 00:13:23,440 Speaker 1: it's what people knew us. You know, people would find 228 00:13:23,440 --> 00:13:25,120 Speaker 1: out you worked for Fiser and then they'd be like, 229 00:13:25,200 --> 00:13:28,160 Speaker 1: oh viagras um, whereas you know, they didn't have the 230 00:13:28,160 --> 00:13:30,800 Speaker 1: same effect for for lipatour for example. Yeah, people like 231 00:13:30,840 --> 00:13:32,400 Speaker 1: to talk about sex more than blood pressure of it. 232 00:13:32,720 --> 00:13:34,720 Speaker 1: John Tosi, thank you so much for joining us. He's 233 00:13:34,720 --> 00:13:58,720 Speaker 1: a healthcare reporter with Bloomberg News. Many analysts and investors 234 00:13:58,720 --> 00:14:01,920 Speaker 1: have said that companies will just buy back more of 235 00:14:01,960 --> 00:14:04,640 Speaker 1: their shares with the money that they received from the 236 00:14:04,720 --> 00:14:08,120 Speaker 1: tax cuts. Others are saying not so fast. Companies have 237 00:14:08,160 --> 00:14:12,120 Speaker 1: already slowed their stock purchases. Here to hash this argument 238 00:14:12,200 --> 00:14:14,680 Speaker 1: out with us, as Tim Grisky, chief investment officer of 239 00:14:14,679 --> 00:14:18,040 Speaker 1: Solaris Asset Management in New York. Tim, thank you so 240 00:14:18,120 --> 00:14:21,080 Speaker 1: much for joining us. Good morning, Lisa, Good morning. So 241 00:14:21,200 --> 00:14:23,880 Speaker 1: let's talk about where we are with respect to stock 242 00:14:24,040 --> 00:14:27,960 Speaker 1: buy backs, because actually, SMP five hundred companies have announced 243 00:14:28,320 --> 00:14:31,000 Speaker 1: the intention to purchase five hundred sixty eight billion dollars 244 00:14:31,040 --> 00:14:33,480 Speaker 1: of their own shares for the first eleven months of seventeen, 245 00:14:33,480 --> 00:14:35,600 Speaker 1: which is a lot, but it's down timber cent from 246 00:14:35,600 --> 00:14:37,160 Speaker 1: a year ago and on pace to be the first 247 00:14:37,320 --> 00:14:40,200 Speaker 1: decrease since two thousand and eight. That is, according to 248 00:14:40,280 --> 00:14:44,840 Speaker 1: data compiled by Bery Annie Bery n Associate so do 249 00:14:44,920 --> 00:14:47,480 Speaker 1: you think that we're in a slowing down phase for 250 00:14:47,480 --> 00:14:49,080 Speaker 1: the share buy backs. Do you think that they're gonna 251 00:14:49,080 --> 00:14:52,880 Speaker 1: get ramped back up with any tax cut? Well, you know, we, 252 00:14:53,000 --> 00:14:55,800 Speaker 1: as you said, we certainly have seen a slowdown in 253 00:14:55,880 --> 00:15:00,640 Speaker 1: buy backs, but it's not that I don't think you 254 00:15:00,680 --> 00:15:02,480 Speaker 1: can assume that that's going to be what's going to 255 00:15:02,600 --> 00:15:07,000 Speaker 1: happen with these tax savings. We have to differentiate between 256 00:15:07,240 --> 00:15:11,080 Speaker 1: two things here. One is the repatriation of foreign cash 257 00:15:11,680 --> 00:15:13,920 Speaker 1: and the other one is the annual tax savings from 258 00:15:13,920 --> 00:15:16,600 Speaker 1: the lower tax rate. The repatriation is going to be 259 00:15:16,640 --> 00:15:19,680 Speaker 1: a one time benefit to companies, and we think the 260 00:15:19,720 --> 00:15:22,000 Speaker 1: majority of that is probably going to go to stock 261 00:15:22,040 --> 00:15:25,760 Speaker 1: buy backs. Unlikely that that will go to dividend increases 262 00:15:25,760 --> 00:15:28,160 Speaker 1: because it's not going to be repetitive. Some will go 263 00:15:28,480 --> 00:15:32,800 Speaker 1: certainly to any capital spending projects that companies might have. 264 00:15:32,920 --> 00:15:37,440 Speaker 1: But if companies have a good growth prospect from and 265 00:15:37,720 --> 00:15:41,240 Speaker 1: reinvesting inside the company, they're already doing it, especially given 266 00:15:41,240 --> 00:15:44,560 Speaker 1: how low debt is. So in other words, you're saying 267 00:15:44,760 --> 00:15:46,840 Speaker 1: that to the extent that there is going to a 268 00:15:46,960 --> 00:15:49,720 Speaker 1: be a boost from shared by backs, it will be 269 00:15:50,160 --> 00:15:54,440 Speaker 1: a one time thing, largely tied to the cash repatriation? 270 00:15:54,480 --> 00:15:57,640 Speaker 1: Am I understanding that correctly? Exactly? Yeah, so you said 271 00:15:57,680 --> 00:15:59,640 Speaker 1: that better than I do know. Well, I mean, how 272 00:15:59,720 --> 00:16:02,320 Speaker 1: much with with with the with the cash repatriation? One 273 00:16:02,360 --> 00:16:05,000 Speaker 1: big question that I have is haven't we already seen 274 00:16:05,080 --> 00:16:07,600 Speaker 1: that money get repatriated? I mean, you've seen the Apples 275 00:16:07,600 --> 00:16:10,760 Speaker 1: and the Oracles of the world borrowing billions and billions 276 00:16:10,760 --> 00:16:13,800 Speaker 1: of dollars through the debt markets to uh do their 277 00:16:13,880 --> 00:16:17,440 Speaker 1: capital uh re whatever it is that they are doing, 278 00:16:17,480 --> 00:16:20,160 Speaker 1: their giving their money back to their shareholders. Apple has 279 00:16:20,200 --> 00:16:23,520 Speaker 1: like I think, a three hundred billion dollar uh capital 280 00:16:24,160 --> 00:16:27,400 Speaker 1: give back program. I mean, haven't we already seen this? Well, 281 00:16:27,400 --> 00:16:29,520 Speaker 1: we've seen it from a handful of companies, But there's 282 00:16:29,520 --> 00:16:32,920 Speaker 1: still a lot of companies out there with foreign cash 283 00:16:33,120 --> 00:16:36,240 Speaker 1: strandard overseas. Now, a lot of these companies, we think, 284 00:16:36,280 --> 00:16:40,960 Speaker 1: have found ways of actually using that cash overseas, repatriating 285 00:16:41,080 --> 00:16:45,360 Speaker 1: part of it through various schemes uh and and finding 286 00:16:45,360 --> 00:16:49,880 Speaker 1: ways of of of really using that cash and far 287 00:16:49,960 --> 00:16:53,720 Speaker 1: on foreign soil to benefit the company. So we think 288 00:16:53,760 --> 00:16:56,520 Speaker 1: there will be some repatriation, but companies are going to 289 00:16:56,600 --> 00:16:58,360 Speaker 1: have to decide if they want to pay that ten 290 00:16:58,440 --> 00:17:02,720 Speaker 1: percent tax on repatriating those dollars or leave it where 291 00:17:02,760 --> 00:17:08,600 Speaker 1: it is if it's actually returning above that ten penalty. So, Tim, 292 00:17:08,640 --> 00:17:11,160 Speaker 1: do you think that in general the tax plan as 293 00:17:11,240 --> 00:17:13,560 Speaker 1: lead out in the House and send it understanding that 294 00:17:13,560 --> 00:17:16,040 Speaker 1: there will be some changes. Do you think that it 295 00:17:16,080 --> 00:17:19,920 Speaker 1: will stimulate growth materially? You know, we we just don't 296 00:17:20,080 --> 00:17:22,960 Speaker 1: see that. We think if they're growth prospects out there, 297 00:17:22,960 --> 00:17:27,359 Speaker 1: and certainly the economy is growing, it's accelerating growth. Um. 298 00:17:27,400 --> 00:17:31,280 Speaker 1: You know, we think that's already being done by companies already. 299 00:17:31,320 --> 00:17:35,000 Speaker 1: Companies are already putting their money into growth opportunities that 300 00:17:35,080 --> 00:17:37,439 Speaker 1: they have, and there's no reason for them not to 301 00:17:37,520 --> 00:17:41,840 Speaker 1: do that. They can certainly borrow money very inexpensively now 302 00:17:42,520 --> 00:17:47,119 Speaker 1: to um to stimulate any internal growth. Otherwise they're going 303 00:17:47,200 --> 00:17:51,440 Speaker 1: to look to to gift it to their shareholders, either 304 00:17:51,640 --> 00:17:55,119 Speaker 1: through stock buy backs or through increasing dividends. And we 305 00:17:55,160 --> 00:17:59,160 Speaker 1: think the annual tax savings might lead to some nice 306 00:17:59,200 --> 00:18:01,679 Speaker 1: dividend increases. Is that a number of companies. Is there 307 00:18:01,680 --> 00:18:05,040 Speaker 1: any company in particular that you're targeting for a dividend increase? Well, 308 00:18:05,080 --> 00:18:06,520 Speaker 1: I think if you look at some of the old 309 00:18:06,520 --> 00:18:10,680 Speaker 1: economy companies that don't have play other places to put 310 00:18:10,720 --> 00:18:15,240 Speaker 1: their money. I think increasing dividends in those companies which 311 00:18:15,240 --> 00:18:19,600 Speaker 1: will attract a certain type of investor, those dividend income 312 00:18:19,680 --> 00:18:22,560 Speaker 1: loving investors. We think that's where a lot of dividend 313 00:18:22,560 --> 00:18:26,960 Speaker 1: increases might incur occur. Are you changing around your investments 314 00:18:26,960 --> 00:18:29,880 Speaker 1: at all in response? Not? You know, not really, It's 315 00:18:29,920 --> 00:18:32,320 Speaker 1: hard to know what which company is gonna do. What 316 00:18:32,520 --> 00:18:34,639 Speaker 1: are they going to increase dividends? Are they going to 317 00:18:34,880 --> 00:18:38,280 Speaker 1: increase buy backs? Are they going to find some internal 318 00:18:38,480 --> 00:18:41,800 Speaker 1: growth opportunities. It's hard to know at this point. But 319 00:18:41,960 --> 00:18:43,560 Speaker 1: we do know that there are a number of companies 320 00:18:43,600 --> 00:18:45,440 Speaker 1: out there with high tax rates that are going to 321 00:18:45,520 --> 00:18:49,760 Speaker 1: be big beneficiaries, and we have made investments uh in 322 00:18:49,800 --> 00:18:53,480 Speaker 1: those companies. Can you give us any names? Uh? Broad 323 00:18:53,520 --> 00:18:57,119 Speaker 1: Com uh symbols A V G O UH is a 324 00:18:57,200 --> 00:19:00,000 Speaker 1: high taxpayer and we think it's going to really benefit 325 00:19:00,040 --> 00:19:03,160 Speaker 1: it from lower tax rates and real quick. What about bonds? 326 00:19:03,160 --> 00:19:06,280 Speaker 1: Do you think that they're going to get crushed next year? No? Uh, 327 00:19:06,520 --> 00:19:09,639 Speaker 1: you know we're gonna see four percent interest rates. The 328 00:19:09,640 --> 00:19:13,919 Speaker 1: world's going on fire. Investors need bonds, pension funds need bonds. 329 00:19:14,560 --> 00:19:17,000 Speaker 1: H Bonds are not going to go away at all. 330 00:19:17,280 --> 00:19:18,800 Speaker 1: Is it going to be a great place for money. 331 00:19:18,840 --> 00:19:21,520 Speaker 1: I don't think it's going to be anything special, but 332 00:19:21,640 --> 00:19:24,280 Speaker 1: there will be a place for bonds and portfolios. To 333 00:19:24,480 --> 00:19:26,880 Speaker 1: Tim Grisky, thank you so much for joining us. Tim Grisky, 334 00:19:27,080 --> 00:19:31,720 Speaker 1: chief investment Officer of Solaris Asset Management in New York. 335 00:19:32,320 --> 00:19:37,080 Speaker 1: Definitely intriguing about the old economy companies that will increase 336 00:19:37,160 --> 00:19:41,439 Speaker 1: their dividends and attract some shareholders and possibly be looked 337 00:19:41,440 --> 00:20:00,399 Speaker 1: at as even better bonds substitutes and interesting developments. In 338 00:20:00,480 --> 00:20:02,720 Speaker 1: two thousand and fifteen, there was a lot of focus 339 00:20:02,800 --> 00:20:05,840 Speaker 1: on the Baltic Dry Index and how low it was. 340 00:20:05,920 --> 00:20:09,120 Speaker 1: This is an index that measures how much ship owners 341 00:20:09,160 --> 00:20:13,320 Speaker 1: are making to ship dry bulk things like iron ore 342 00:20:13,600 --> 00:20:18,160 Speaker 1: or grains or whatever else is needed in a general economy. 343 00:20:18,240 --> 00:20:20,840 Speaker 1: This year, however, it has surged to the highest since 344 00:20:20,920 --> 00:20:24,480 Speaker 1: early and here to do a victory lap or perhaps 345 00:20:24,520 --> 00:20:26,680 Speaker 1: not he he said it is not his style. John 346 00:20:26,760 --> 00:20:30,040 Speaker 1: woven Smith, president of Genko Shipping, which is based in 347 00:20:30,080 --> 00:20:35,440 Speaker 1: New York, shares up almost sixty two so far this year. So, John, 348 00:20:36,119 --> 00:20:38,840 Speaker 1: how much more do you think that the dry the 349 00:20:38,840 --> 00:20:42,160 Speaker 1: Baltic Dry Index has to rise? And what's behind this, Yes, 350 00:20:42,200 --> 00:20:43,680 Speaker 1: So I think you I think you have to take 351 00:20:43,720 --> 00:20:46,560 Speaker 1: a a step back to where we were over the 352 00:20:46,640 --> 00:20:49,520 Speaker 1: last couple of years, where we had too many ships 353 00:20:49,640 --> 00:20:53,360 Speaker 1: in the market. Um We've always had a pretty robust 354 00:20:53,400 --> 00:20:57,960 Speaker 1: demand situation, but the the the ship owners over built. 355 00:20:58,080 --> 00:21:01,000 Speaker 1: So now we're in a situation where we absorb that 356 00:21:01,119 --> 00:21:03,960 Speaker 1: supply because of increasing demand, but also a lot of 357 00:21:04,000 --> 00:21:06,840 Speaker 1: scrapping um or removing ships from the market over the 358 00:21:06,960 --> 00:21:10,000 Speaker 1: last couple of years. And we're looking forward into two 359 00:21:10,000 --> 00:21:12,760 Speaker 1: thousand and eighteen and we're only going to see one 360 00:21:12,800 --> 00:21:14,879 Speaker 1: to one and a half percent growth in the number 361 00:21:14,920 --> 00:21:18,360 Speaker 1: of ships that are delivering versus a growth of three 362 00:21:18,400 --> 00:21:21,160 Speaker 1: to four percent on the demand side, driven by iron 363 00:21:21,200 --> 00:21:24,640 Speaker 1: ore and coal imports primarily. So this is a two 364 00:21:24,640 --> 00:21:27,840 Speaker 1: sided equation. In other words, there are fewer ships being 365 00:21:27,880 --> 00:21:31,479 Speaker 1: built and there is incrementally more demand coming out of 366 00:21:31,720 --> 00:21:35,560 Speaker 1: different economies. So before we get into your projection of 367 00:21:35,600 --> 00:21:38,400 Speaker 1: how much more the Baltic dry indexs could rise, I'm 368 00:21:38,480 --> 00:21:41,800 Speaker 1: curious which do you think is more important here? I mean, 369 00:21:41,800 --> 00:21:43,879 Speaker 1: in other words, when people point to this increase and 370 00:21:43,920 --> 00:21:46,879 Speaker 1: they say, well, this is the leading indicator that shows 371 00:21:46,920 --> 00:21:51,080 Speaker 1: the global economy is surging, are you saying not so fast. 372 00:21:51,119 --> 00:21:53,199 Speaker 1: This is really kind of a more complicated equation that 373 00:21:53,240 --> 00:21:56,040 Speaker 1: has several different heads. I think there are two things here, 374 00:21:56,200 --> 00:21:59,600 Speaker 1: um one the supply side and dry bulk shipping, meaning 375 00:21:59,600 --> 00:22:01,520 Speaker 1: and then number of ships that are on the water 376 00:22:01,880 --> 00:22:04,639 Speaker 1: on any given day to ship a cargo is probably 377 00:22:04,680 --> 00:22:07,119 Speaker 1: one of the major factors and does drive the market. 378 00:22:07,280 --> 00:22:10,040 Speaker 1: Having said that, if you look at what we're seeing 379 00:22:10,040 --> 00:22:13,159 Speaker 1: on the cargo flow side, we're seeing increased iron ore 380 00:22:13,280 --> 00:22:16,960 Speaker 1: going into China. We're seeing increased coal going into China, 381 00:22:17,240 --> 00:22:19,560 Speaker 1: which is all done on the larger ships. But here's 382 00:22:19,560 --> 00:22:23,080 Speaker 1: the neat thing. It's not just China centric. As we've 383 00:22:23,080 --> 00:22:24,760 Speaker 1: seen in the last couple of years. We've seen a 384 00:22:24,880 --> 00:22:28,359 Speaker 1: recovery in the European steel industry, so increased iron ore 385 00:22:28,400 --> 00:22:32,120 Speaker 1: imports and coking coal going into Europe. We've seen India's 386 00:22:32,119 --> 00:22:35,800 Speaker 1: steel industry recover, so increased coking coal going into India. 387 00:22:36,160 --> 00:22:40,800 Speaker 1: We've seen coal imports into Taiwan, the Philippines, um cement 388 00:22:40,960 --> 00:22:45,399 Speaker 1: into Indonesia in the outcoming out of the US golf. 389 00:22:45,480 --> 00:22:48,640 Speaker 1: On the grain front, soybeans and corn are at all 390 00:22:48,680 --> 00:22:51,480 Speaker 1: time highs. So this is much more of a global 391 00:22:51,720 --> 00:22:54,880 Speaker 1: recovery from what we're seeing for cargo flows. So when 392 00:22:54,920 --> 00:22:59,000 Speaker 1: was the last time that Jenko Shipping saw this degree 393 00:22:59,720 --> 00:23:03,480 Speaker 1: of activity and demand. I would say you'd have to 394 00:23:03,520 --> 00:23:06,600 Speaker 1: go back to probably two thousand fourteen, two thousand thirteen, 395 00:23:06,640 --> 00:23:10,960 Speaker 1: two thousand fourteen, and what what happened in two thousand thirteen. Again, 396 00:23:11,080 --> 00:23:14,119 Speaker 1: we we saw some overbuilding. We have now absorbed all 397 00:23:14,160 --> 00:23:16,000 Speaker 1: of that, and as I said before, it's because of 398 00:23:16,080 --> 00:23:19,199 Speaker 1: high scrapping over the last twenty four months and just 399 00:23:19,280 --> 00:23:21,879 Speaker 1: a complete slow down in the number of ships that 400 00:23:21,920 --> 00:23:24,280 Speaker 1: are that are going on the water. And I'll just 401 00:23:24,320 --> 00:23:27,560 Speaker 1: go back to it, just simple number wise again, you 402 00:23:27,600 --> 00:23:31,359 Speaker 1: look at next year and then two thousand nineteen. The 403 00:23:31,440 --> 00:23:34,080 Speaker 1: supply side of the equation, meaning the number of ships 404 00:23:34,080 --> 00:23:35,720 Speaker 1: that are that are going to come to the water 405 00:23:35,920 --> 00:23:38,439 Speaker 1: is very predictable. And you know because if you're going 406 00:23:38,480 --> 00:23:41,639 Speaker 1: to contract a ship today, that's two years out. So 407 00:23:41,720 --> 00:23:44,040 Speaker 1: for the next two years you have a good visibility 408 00:23:44,040 --> 00:23:46,080 Speaker 1: on the supply side. And we're only going to see 409 00:23:46,119 --> 00:23:48,320 Speaker 1: as I said, one and a half percent fleet growth 410 00:23:48,560 --> 00:23:51,240 Speaker 1: in two thousand eighteen, and some are around one to 411 00:23:51,280 --> 00:23:53,320 Speaker 1: one and a half and two thousand nineteen against a 412 00:23:53,440 --> 00:23:57,679 Speaker 1: backdrop of three to four percent growth on the demand side. 413 00:23:58,480 --> 00:24:01,200 Speaker 1: Those are very favorable numbers going into eighteen and nineteen. 414 00:24:01,200 --> 00:24:04,080 Speaker 1: And that's why I go back to, we're seeing we're 415 00:24:04,119 --> 00:24:07,280 Speaker 1: in the beginnings of the recovery, and we've started to 416 00:24:07,280 --> 00:24:09,399 Speaker 1: see at this quarter fourth quarter. And I dont want 417 00:24:09,400 --> 00:24:11,240 Speaker 1: to pick up on that because we mentioned that JENKO 418 00:24:11,359 --> 00:24:15,040 Speaker 1: is up nearly so far this year, but that follows 419 00:24:15,080 --> 00:24:19,960 Speaker 1: a nearly lost last year and lost the year before. 420 00:24:20,000 --> 00:24:22,080 Speaker 1: So there's a question of you know, we're these just 421 00:24:22,520 --> 00:24:25,159 Speaker 1: these shipping stocks way too beaten up and there was 422 00:24:25,200 --> 00:24:27,760 Speaker 1: way too much demand. Uh, and we're seeing a recovery. 423 00:24:27,880 --> 00:24:30,720 Speaker 1: There's a question of how much we will recover because 424 00:24:30,800 --> 00:24:33,480 Speaker 1: if you look back at the Baltic dry Index going 425 00:24:33,520 --> 00:24:35,959 Speaker 1: back to two thousand and eight and two seven, two six, 426 00:24:36,000 --> 00:24:37,879 Speaker 1: it was still a lot higher than where we are today. 427 00:24:37,920 --> 00:24:40,520 Speaker 1: So do you think that shipmakers will start earning more 428 00:24:40,520 --> 00:24:44,080 Speaker 1: and more or are we close to the peak here? No, Again, 429 00:24:44,160 --> 00:24:45,879 Speaker 1: I go back to I think we're in the first 430 00:24:45,920 --> 00:24:49,400 Speaker 1: instance of the game. Um. This is something that we 431 00:24:49,480 --> 00:24:53,119 Speaker 1: started talking about at the beginning of of two thousand 432 00:24:53,160 --> 00:24:57,000 Speaker 1: and seventeen. UM that we thought that supplying demand fundamentals 433 00:24:57,040 --> 00:24:59,080 Speaker 1: would start to come into balance in the fourth quarter. 434 00:24:59,359 --> 00:25:02,679 Speaker 1: We're now being that and going into next year again 435 00:25:02,800 --> 00:25:05,800 Speaker 1: we see an even rosier picture because the supply side 436 00:25:05,840 --> 00:25:08,320 Speaker 1: of the equation, the number of ships that are being delivered, 437 00:25:08,600 --> 00:25:10,600 Speaker 1: are going to basically be at all time loads at 438 00:25:10,600 --> 00:25:13,600 Speaker 1: one and a half percent. So how are you positioning 439 00:25:13,680 --> 00:25:17,040 Speaker 1: JENKO to take advantage of this upside? So a couple 440 00:25:17,080 --> 00:25:20,520 Speaker 1: of things. One, if you look at um the real 441 00:25:20,600 --> 00:25:23,240 Speaker 1: growth and commodities, it's going to come on the iron 442 00:25:23,240 --> 00:25:26,880 Speaker 1: ore front with an increased iron ore exports going from 443 00:25:26,880 --> 00:25:31,080 Speaker 1: Brazil to China. Valet in particular is projecting another twenty 444 00:25:31,080 --> 00:25:34,960 Speaker 1: five to thirty million tons of iron ore that is 445 00:25:35,000 --> 00:25:37,080 Speaker 1: going to be shipped. And the great thing about Brazil 446 00:25:37,200 --> 00:25:40,040 Speaker 1: to China that's a long haul trade route, so it 447 00:25:40,160 --> 00:25:44,399 Speaker 1: increases to the great thing for shipping owners. Great, No, 448 00:25:44,600 --> 00:25:48,399 Speaker 1: that's that's exactly right, Um. And what's also driving a 449 00:25:48,440 --> 00:25:50,919 Speaker 1: lot of this, which I think is important, is the 450 00:25:51,000 --> 00:25:55,320 Speaker 1: environmental side in China. So China is actually encouraging imports 451 00:25:55,359 --> 00:25:59,160 Speaker 1: of higher grade iron ore, which can only come from seaborn. 452 00:25:59,200 --> 00:26:02,080 Speaker 1: It cannot come domestic suppliers in China, so we're seeing 453 00:26:02,080 --> 00:26:06,119 Speaker 1: domestic supply shrink in China and more seaborn trade of 454 00:26:06,119 --> 00:26:09,520 Speaker 1: iron ore take place. I'm curious what you think about 455 00:26:09,920 --> 00:26:14,879 Speaker 1: the US tax plan and increasing trade tensions between the 456 00:26:14,920 --> 00:26:17,760 Speaker 1: US and other countries. Is that on your radar at all, 457 00:26:17,960 --> 00:26:20,359 Speaker 1: is possibly hampering trade or is that just sort of 458 00:26:20,400 --> 00:26:24,159 Speaker 1: noise for you for dry ball shipping. It really doesn't 459 00:26:24,160 --> 00:26:26,679 Speaker 1: come into play if you think about just the major 460 00:26:26,720 --> 00:26:30,520 Speaker 1: trade routes again, it's Brazil to China, Australia to China 461 00:26:30,600 --> 00:26:33,119 Speaker 1: on the iron ore and coal front, and then you 462 00:26:33,160 --> 00:26:36,000 Speaker 1: have a strong trade in the minor box, whether it 463 00:26:36,080 --> 00:26:39,480 Speaker 1: be cement or soybeans, corn coming out of the US, 464 00:26:39,520 --> 00:26:43,399 Speaker 1: golf going into Europe, going into India, going into China. 465 00:26:43,920 --> 00:26:46,840 Speaker 1: I don't you know, I don't see any trade issues 466 00:26:46,960 --> 00:26:49,120 Speaker 1: with that. China has all the incentive in the world 467 00:26:49,160 --> 00:26:51,760 Speaker 1: to continue growing on the steel production side. Based on 468 00:26:51,840 --> 00:26:56,280 Speaker 1: what you're seeing from the demand side. What country do 469 00:26:56,320 --> 00:26:59,159 Speaker 1: you think has a better economy than many give it 470 00:26:59,200 --> 00:27:02,920 Speaker 1: credit right now? I think the Chinese economy is is strong. 471 00:27:03,000 --> 00:27:05,160 Speaker 1: I mean, I you know, I I go back over 472 00:27:05,160 --> 00:27:07,680 Speaker 1: the last six eight months and I and I think 473 00:27:07,760 --> 00:27:11,199 Speaker 1: that people are finally starting to recognize that iron ore 474 00:27:11,280 --> 00:27:14,960 Speaker 1: imports are really growing at a significant level, and I 475 00:27:14,960 --> 00:27:20,040 Speaker 1: think people failed to grasp the environmental um aspect of 476 00:27:20,119 --> 00:27:22,639 Speaker 1: China and clamping on the pollution and how that is 477 00:27:22,680 --> 00:27:25,720 Speaker 1: actually beneficial to dry ball shipping and the shipping of 478 00:27:25,800 --> 00:27:28,879 Speaker 1: high quality iron ore. John woven Smith, thank you so 479 00:27:28,960 --> 00:27:31,719 Speaker 1: much for joining joining us. He's president of Jenko Shipping, 480 00:27:31,760 --> 00:27:34,879 Speaker 1: which is based in New York. It's very interesting. Thank you, 481 00:27:35,080 --> 00:27:41,680 Speaker 1: Thank you. Thanks for listening to the Bloomberg P and 482 00:27:41,800 --> 00:27:44,840 Speaker 1: L podcast. You can subscribe and listen to interviews at 483 00:27:44,880 --> 00:27:49,320 Speaker 1: Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. I'm 484 00:27:49,359 --> 00:27:52,800 Speaker 1: Pim Fox. I'm on Twitter at pim Fox. I'm on 485 00:27:52,840 --> 00:27:56,119 Speaker 1: Twitter at Lisa Abramo. It's one before the podcast. You 486 00:27:56,119 --> 00:28:01,080 Speaker 1: can always catch us worldwide on Bloomberg Radio became the 487 00:28:01,200 --> 00:28:03,200 Speaker 1: thea