WEBVTT - Expect the U.S. To Issue Digital Currency Next Year: FiREapps CEO 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:33.199 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Obviously, 0:00:33.240 --> 0:00:37.080 we've been focusing a lot on bitcoin, but one question 0:00:37.760 --> 0:00:42.560 remains supreme. Can bitcoin ever act as a true currency? 0:00:42.680 --> 0:00:44.919 Is it the future of money? Right now? I want 0:00:44.960 --> 0:00:47.960 to bring in Wolfgang Custer. He is chief executive officer, chairman, 0:00:48.000 --> 0:00:52.600 and co founder of fire Apps, which is based in Phoenix, Arizona. Wolfgang, 0:00:52.600 --> 0:00:55.120 thank you so much for joining us. Fire Apps is 0:00:55.160 --> 0:00:58.920 known as a firm that helps companies understand their foreign 0:00:58.920 --> 0:01:03.120 exchange their currency risk. Does your recent focus on bitcoin 0:01:03.280 --> 0:01:08.080 indicate that you consider it a currency? No, I don't. 0:01:08.120 --> 0:01:11.280 I think that while some people may consider it a 0:01:11.360 --> 0:01:14.640 currency um to the point that there's some sort of 0:01:14.720 --> 0:01:17.920 size to it, but reality is that I've been talking 0:01:17.959 --> 0:01:20.480 to a lot of corporate CEOs and CFOs as well 0:01:20.480 --> 0:01:23.760 as treasury departments, and none of them are really with 0:01:23.800 --> 0:01:27.199 the exception of some maybe marketing gimmicks, are really looking 0:01:27.240 --> 0:01:29.840 at bitcoin as a currency that they're going to be 0:01:29.880 --> 0:01:33.920 doing business in. And there really are three reasons for that. Um. 0:01:33.959 --> 0:01:36.720 The first one is that the Federal Reserve Bank itself 0:01:36.800 --> 0:01:39.280 will end up coming out with a digital currency, and 0:01:39.319 --> 0:01:42.119 that's what they're waiting for, and other governments will as well. 0:01:42.800 --> 0:01:46.759 Secondly is there is a Senate Bill twelve forty one 0:01:47.040 --> 0:01:49.600 that has been discussed for over two hours on November 0:01:49.600 --> 0:01:53.200 twenty eight, so very recently, where they're looking to change 0:01:53.240 --> 0:01:57.840 the definition of financial institutions and what that would do. 0:01:58.000 --> 0:01:59.920 If they get what they're looking to get, which is 0:02:00.080 --> 0:02:04.680 pretty likely, it would actually criminalize bitcoin, um and would 0:02:04.680 --> 0:02:11.200 make it who would make the liquidity rather questionable. And 0:02:11.200 --> 0:02:13.560 then we'll go back, Yeah, I know, that's fine, it's 0:02:13.560 --> 0:02:15.799 no perm at home. We can talk about taxation here 0:02:15.800 --> 0:02:17.560 in a little bit, which is the third part that 0:02:17.639 --> 0:02:21.880 the governments will do to really to some degree fight 0:02:21.919 --> 0:02:24.040 bitcoin in that sense. But let's go back to two. 0:02:24.080 --> 0:02:26.240 Then I want to talk about too, just because if 0:02:26.240 --> 0:02:30.480 you criminalized bitcoin that would certainly hamper the meteoric rise 0:02:31.000 --> 0:02:35.040 that we have seen this year. How would it do that? Well, 0:02:35.040 --> 0:02:37.520 it would do that by changing the definition of what 0:02:37.680 --> 0:02:41.880 is a financial institution and what are they allowed to do? 0:02:42.240 --> 0:02:45.760 So how transparent do they have to be? And quite frankly, 0:02:45.800 --> 0:02:48.040 the whole thing on bitcoin, as you well know, is 0:02:48.120 --> 0:02:52.080 that it is based on a blockchain technology, one of 0:02:52.160 --> 0:02:57.600 many blockchain technologies that actually hides who's doing the transactions, 0:02:57.960 --> 0:03:00.239 and the United States government as well as many other 0:03:00.280 --> 0:03:03.280 governments saying that's not acceptable. Okay, I want to go 0:03:03.320 --> 0:03:05.040 back to the first thing that you said too, because 0:03:05.080 --> 0:03:08.040 this is fascinating that the Federal Reserve could come out 0:03:08.080 --> 0:03:11.560 with its own digital currency as soon as next year. 0:03:11.840 --> 0:03:13.640 What does that mean? I mean there is a difference 0:03:13.639 --> 0:03:16.400 between digital currency, which we all use when we use 0:03:16.440 --> 0:03:19.720 credit cards or uh you know, Apple pay or other 0:03:19.760 --> 0:03:22.799 things that are online transactions. It's another thing for it 0:03:22.840 --> 0:03:24.720 to be on blockchain. So what are you talking about 0:03:24.720 --> 0:03:28.760 specifically with the Fed issuing this digital currency. Yes, So, 0:03:28.800 --> 0:03:31.560 what I believe has happened over the last five to 0:03:31.680 --> 0:03:34.360 ten years, if you arguably since two thousand eight, is 0:03:34.400 --> 0:03:40.080 that UM, the people that started cryptocurrencies UM really looked 0:03:40.120 --> 0:03:42.800 at there is an inefficiency in the market, and I 0:03:42.840 --> 0:03:46.960 believe they were right. Their inefficiencies twofold. One is it 0:03:47.040 --> 0:03:50.440 takes two days on average to move from one account 0:03:50.440 --> 0:03:53.600 to another, and two is it's pretty expensive. So what 0:03:53.680 --> 0:03:56.400 they tried to achieve as a currency that is digital 0:03:56.480 --> 0:03:59.240 and immediate, as you're saying, to some degree like credit 0:03:59.280 --> 0:04:02.720 cards are as well as some that are not as expensive. 0:04:03.160 --> 0:04:06.120 And so these inefficiencies need to be embraced by the 0:04:06.160 --> 0:04:10.760 governments and they are interestingly here and even Putent came 0:04:10.760 --> 0:04:14.680 out with that they will issue a crypto ruble in 0:04:14.880 --> 0:04:17.560 January of next year already, So this is pretty imminent. 0:04:18.040 --> 0:04:19.880 Is the fact that, at the end of the day 0:04:20.080 --> 0:04:25.279 is that blockchain can actually use quite exactly opposite the 0:04:25.320 --> 0:04:28.800 way Bitcoin is using it right now. I e. The reason, 0:04:28.839 --> 0:04:31.440 one of the two reasons that Putent wants to do 0:04:31.480 --> 0:04:35.440 this is because he wants to gain better visibility into 0:04:35.839 --> 0:04:39.440 all transactions related to the ruble. The United States will 0:04:39.520 --> 0:04:43.240 end up doing the same thing. This is really fascinating. 0:04:43.320 --> 0:04:46.360 So in other words, it's sort of a blockchain that, 0:04:46.520 --> 0:04:51.440 rather than decentralizing the currency, really centralizes it and gives 0:04:51.480 --> 0:04:55.400 the government visibility into every transaction. Is that correct? That 0:04:55.520 --> 0:04:57.880 is correct? That is my belief, and that's what everything 0:04:57.960 --> 0:05:00.240 is pointing towards and if you look back at of 0:05:00.320 --> 0:05:04.080 the work that's already been done in Washington on this 0:05:04.240 --> 0:05:07.560 on dual ledger technology, it's absolutely confirms that. So the 0:05:07.560 --> 0:05:10.000 Treasure Department, basically, I'm trying to figure out how this 0:05:10.040 --> 0:05:13.479 would work where they remove all paper currency from circulation, 0:05:13.600 --> 0:05:15.920 or they would just have a subset that would be 0:05:16.040 --> 0:05:19.240 used for business transaction transactions and start there. How would 0:05:19.240 --> 0:05:21.839 it work, How would it begin? Yeah, the way I 0:05:21.960 --> 0:05:24.680 envisioned it is it's kind of like the Euro. For 0:05:24.920 --> 0:05:27.920 when the Euro came out. Um, you know, you still 0:05:27.960 --> 0:05:30.320 had for a while Deutsche marks and French franks, and 0:05:30.360 --> 0:05:33.480 then slowly but surely they disappeared and now you can't 0:05:33.680 --> 0:05:36.479 you know, can't use a deutsch mark anymore in Germany, 0:05:36.520 --> 0:05:38.800 but you can use euros. And I anticipate this to 0:05:38.839 --> 0:05:41.279 be very similar. It's going to take time. It's not 0:05:41.320 --> 0:05:44.880 going to be immediately. Digital dollar is here and therefore 0:05:44.960 --> 0:05:48.720 paper currencies are gone, but it is definitely going into 0:05:48.720 --> 0:05:51.599 that direction. If you think about the way we transact today, 0:05:52.000 --> 0:05:53.760 you know, I have dollars in my wallet, I hardly 0:05:53.760 --> 0:05:56.000 ever use them. I certainly use my credit cards or 0:05:56.080 --> 0:05:58.599 other payment methods. And this is going to be the 0:05:58.600 --> 0:06:01.800 same thing. It's going to be better, quicker, faster, yet 0:06:01.960 --> 0:06:04.200 very controlled. And the reason that the United States FED 0:06:04.600 --> 0:06:06.600 isn't going to come out with this in January is 0:06:06.680 --> 0:06:09.000 because they're going to have to build a very secure 0:06:09.600 --> 0:06:13.640 um blockchain that everybody trusts that won't be broken into 0:06:14.279 --> 0:06:18.600 so fire app clients include Google, ericson Pepsi, Nike Accenture, 0:06:18.680 --> 0:06:21.680 and how do they feel about the introduction of a 0:06:21.680 --> 0:06:26.440 cryptocurrency and how do they feel about bitcoin? I think 0:06:26.480 --> 0:06:28.559 that all of them in general, I certainly have NBA, 0:06:28.600 --> 0:06:30.760 so I'm not going to speak to one particular one, 0:06:30.800 --> 0:06:33.960 but all in general have the belief that digital currency 0:06:34.040 --> 0:06:36.159 will actually be good for them. I think it will 0:06:36.200 --> 0:06:40.240 help them transact faster and cheaper. And yet they do 0:06:40.320 --> 0:06:42.320 realize one of the reasons that we're also talking to 0:06:42.400 --> 0:06:46.640 them is that that requires more automation on their parts. 0:06:46.720 --> 0:06:49.880 So as digital currencies are coming abroad and all of 0:06:49.920 --> 0:06:53.480 a sudden, they don't have manual processes that allow them 0:06:53.520 --> 0:06:56.080 to spend two days of settling currencies, it's going to 0:06:56.160 --> 0:06:59.760 be immediate, and so they're looking at what the company 0:07:00.120 --> 0:07:02.320 to do to be ready for this, and how to 0:07:02.400 --> 0:07:08.039 automate these processes which end up streamlining liquidity really to 0:07:08.240 --> 0:07:10.000 that to the point that they will, so it's gonna 0:07:10.040 --> 0:07:12.480 be actually going to be embraced by them and there 0:07:12.720 --> 0:07:16.520 and I'm not hearing anything negative about digital currency. I 0:07:16.560 --> 0:07:19.720 am hearing that for a bitcoin is just too volatile 0:07:19.760 --> 0:07:23.400 to get involved and from a true main mean wolf gangcaster, 0:07:23.520 --> 0:07:25.400 thank you so much for joining as CEO, chairman and 0:07:25.440 --> 0:07:28.280 co founder of fire Apps in Phoenix, Arizona. This is Bloomberg. 0:07:47.760 --> 0:07:52.120 Viagraph is going generic. This is a big moment for 0:07:52.240 --> 0:07:55.880 the millions of people who have been affected by this drug. 0:07:55.880 --> 0:07:58.160 And here to talk about it is John Tozzi. He's 0:07:58.200 --> 0:08:01.240 a healthcare reporter for Bloomberg News and he joins us 0:08:01.280 --> 0:08:03.880 here in our eleven three oh studios. So your piece 0:08:03.960 --> 0:08:09.720 was phenomenal. You basically talked to the creators of viagra 0:08:10.080 --> 0:08:13.080 and about the creation of it. And before we go 0:08:13.200 --> 0:08:15.360 into the implications of it going to naric, can you 0:08:15.400 --> 0:08:19.040 just give us the story behind how they came to 0:08:19.720 --> 0:08:24.320 develop this drug. Sure, this was a drug that Fiser 0:08:24.440 --> 0:08:28.160 was actually investigating for a different purpose back in uh 0:08:28.240 --> 0:08:32.559 the late excuse me eies and early nineties. They were 0:08:32.600 --> 0:08:36.720 looking for treatments for hypertension, high blood pressure, and then 0:08:37.280 --> 0:08:43.640 for chest pain and the compound that they UH you know, 0:08:43.640 --> 0:08:46.800 the chemists that Fiser at a lab in England were developing. 0:08:47.160 --> 0:08:52.040 It didn't really show a lot of effect in those conditions, 0:08:52.080 --> 0:08:55.920 but it did have a side effect UM that they 0:08:56.280 --> 0:09:00.600 decided was worth looking into. So the side effect was 0:09:00.760 --> 0:09:04.880 that it allowed erections to last longer and come more frequently, 0:09:05.280 --> 0:09:08.440 and some of the details were hysterical. One of my 0:09:08.880 --> 0:09:12.439 favorite from this whole thing is UH that the study 0:09:12.600 --> 0:09:16.240 subjects were fitted what was called ridges scan UH and 0:09:16.320 --> 0:09:18.439 given the drug and shown blue movies or movies that 0:09:18.480 --> 0:09:20.640 were soft pornography or hard pornography. At the end of 0:09:20.640 --> 0:09:22.520 the week we had to get the drugs back from 0:09:22.520 --> 0:09:25.120 them anything that was unused. Some of them would not 0:09:25.280 --> 0:09:28.120 give the drug back. This is actually something we heard 0:09:28.160 --> 0:09:32.240 from several researchers we talked to that during trials. All 0:09:32.320 --> 0:09:36.160 along the time when viagra was being developed. You know 0:09:36.480 --> 0:09:38.920 that when you when you test a drug, you can 0:09:38.960 --> 0:09:41.680 only give it for a limited amount of limited period 0:09:41.720 --> 0:09:43.800 until you know that it's not going to be toxic 0:09:43.880 --> 0:09:46.679 for when taken for longer UM and the researchers had 0:09:46.720 --> 0:09:49.320 real trouble getting the drugs back. People didn't want to 0:09:49.320 --> 0:09:52.400 give this up. And I think for Fiser, um, you know, 0:09:52.480 --> 0:09:55.800 this was a condition that didn't really have a pharmaceutical 0:09:55.800 --> 0:09:58.760 treatment before viagra, and that was an indication to them 0:09:58.840 --> 0:10:01.720 of how important could be to the people who would 0:10:01.920 --> 0:10:05.160 take it well and John to that point, Viagara kind 0:10:05.160 --> 0:10:09.880 of changed the conversation about sex on a pretty massive scale. 0:10:09.920 --> 0:10:13.559 I mean, in one case, they're one of the researchers, 0:10:13.559 --> 0:10:15.240 one of the developers was going to go on a 0:10:15.280 --> 0:10:18.440 major television network and they said, what are you going 0:10:18.520 --> 0:10:20.440 to say? And he said he was going to use 0:10:20.480 --> 0:10:22.959 the word erection and they said, no, you can't do that, right. 0:10:23.000 --> 0:10:25.480 I think that was actually not one of the Fiser 0:10:25.520 --> 0:10:29.080 researchers but another doctor, But yeah, that I think. You know, 0:10:29.120 --> 0:10:34.480 it was a period when um, in the culture, Americans 0:10:34.520 --> 0:10:42.000 were becoming more comfortable kind of talking frankly about sexuality, um, 0:10:42.040 --> 0:10:44.480 you know, in a way that you know, decades before 0:10:44.640 --> 0:10:49.120 wasn't really the case. So now that the drug is 0:10:49.200 --> 0:10:52.520 going generic, what are the implications It will be cheaper, 0:10:53.200 --> 0:10:56.280 it will be less of a moneymaker for Fiser, and 0:10:56.600 --> 0:11:00.120 will it become more mainstream or it already has out 0:11:00.200 --> 0:11:03.600 in so mainstream that it really can't really have much more. Yeah, 0:11:03.600 --> 0:11:05.160 I mean I think it's it's hard to tell. I mean, 0:11:05.200 --> 0:11:07.319 the price will go down. That happens whenever there's a 0:11:07.360 --> 0:11:12.560 generic version of the drug. Um. You know. I know 0:11:12.640 --> 0:11:17.160 there's certain in the United Kingdom they're actually applying or 0:11:17.200 --> 0:11:19.680 in the process of trying to have it sold over 0:11:19.720 --> 0:11:23.600 the counter. So I think you know, from the drug manufacturers, 0:11:24.280 --> 0:11:28.160 uh point of view, the um you know, the goal 0:11:28.240 --> 0:11:33.560 is to make it more widely available, more easily available. Um. 0:11:33.679 --> 0:11:35.960 But you know, we'll see what happens with the generic. 0:11:36.000 --> 0:11:39.160 It's unclear how much. Um. You know, the price is 0:11:39.200 --> 0:11:42.360 a barrier to people taking viagara if everybody who wants 0:11:42.400 --> 0:11:44.920 it pretty much has it. One one question that I 0:11:45.000 --> 0:11:47.839 have is from the female side. I mean, it's it's 0:11:47.840 --> 0:11:51.199 one thing for men to have this, but um, there's 0:11:51.240 --> 0:11:54.240 a lot of comedy show is kind of highlighted. Men 0:11:54.280 --> 0:11:56.200 would come home and be very excited and the women 0:11:56.240 --> 0:11:58.719 would say, oh my god. No. Um. So there's a 0:11:58.800 --> 0:12:01.720 question about you know, a allowing women's libido to match 0:12:02.000 --> 0:12:05.320 men's on viagra. Is there any development there with respect 0:12:05.360 --> 0:12:09.240 to a feminine I mean, certainly in the history of viagra. 0:12:09.360 --> 0:12:12.520 That was something that UM people were, you know, that 0:12:12.640 --> 0:12:15.840 was an issue that women were you know, did not 0:12:15.960 --> 0:12:18.720 have a drug that worked. Similarly, Viagra was actually tested 0:12:18.760 --> 0:12:21.400 in women at one point to see if it would work, 0:12:21.440 --> 0:12:25.840 and it didn't show much efficacy. UM. There is at 0:12:25.920 --> 0:12:31.160 least one product on the market intended to UM help 0:12:31.880 --> 0:12:36.080 improve women's libidos. But I think the consensus is that, 0:12:36.520 --> 0:12:40.840 you know, it doesn't have the same um effect, you know, 0:12:40.880 --> 0:12:45.280 the same degree of efficacy that viagra had for men. 0:12:45.400 --> 0:12:49.040 So you know, that's an area of research and science 0:12:49.120 --> 0:12:53.200 that I think is still being investigated. Just real quick, 0:12:53.240 --> 0:12:54.760 can you give us a sense of how big a 0:12:54.840 --> 0:12:58.200 business viagra has been pro visor, Uh, well, we look, 0:12:58.400 --> 0:13:02.320 we looked up the sales over since it was released. 0:13:03.600 --> 0:13:07.840 It's been about thirty six billion in sales UM. That's 0:13:07.840 --> 0:13:12.520 a big number, but it's by no means Fiser's biggest drug. UM. 0:13:12.559 --> 0:13:15.360 So you know, it's an important product, but you know, 0:13:15.400 --> 0:13:18.480 it's interesting the Fiser many fightser veterans we talked to 0:13:18.480 --> 0:13:20.520 you said, you know, it wasn't our biggest product, but 0:13:20.559 --> 0:13:23.440 it's what people knew us. You know, people would find 0:13:23.440 --> 0:13:25.120 out you worked for Fiser and then they'd be like, 0:13:25.200 --> 0:13:28.160 oh viagras um, whereas you know, they didn't have the 0:13:28.160 --> 0:13:30.800 same effect for for lipatour for example. Yeah, people like 0:13:30.840 --> 0:13:32.400 to talk about sex more than blood pressure of it. 0:13:32.720 --> 0:13:34.720 John Tosi, thank you so much for joining us. He's 0:13:34.720 --> 0:13:58.720 a healthcare reporter with Bloomberg News. Many analysts and investors 0:13:58.720 --> 0:14:01.920 have said that companies will just buy back more of 0:14:01.960 --> 0:14:04.640 their shares with the money that they received from the 0:14:04.720 --> 0:14:08.120 tax cuts. Others are saying not so fast. Companies have 0:14:08.160 --> 0:14:12.120 already slowed their stock purchases. Here to hash this argument 0:14:12.200 --> 0:14:14.680 out with us, as Tim Grisky, chief investment officer of 0:14:14.679 --> 0:14:18.040 Solaris Asset Management in New York. Tim, thank you so 0:14:18.120 --> 0:14:21.080 much for joining us. Good morning, Lisa, Good morning. So 0:14:21.200 --> 0:14:23.880 let's talk about where we are with respect to stock 0:14:24.040 --> 0:14:27.960 buy backs, because actually, SMP five hundred companies have announced 0:14:28.320 --> 0:14:31.000 the intention to purchase five hundred sixty eight billion dollars 0:14:31.040 --> 0:14:33.480 of their own shares for the first eleven months of seventeen, 0:14:33.480 --> 0:14:35.600 which is a lot, but it's down timber cent from 0:14:35.600 --> 0:14:37.160 a year ago and on pace to be the first 0:14:37.320 --> 0:14:40.200 decrease since two thousand and eight. That is, according to 0:14:40.280 --> 0:14:44.840 data compiled by Bery Annie Bery n Associate so do 0:14:44.920 --> 0:14:47.480 you think that we're in a slowing down phase for 0:14:47.480 --> 0:14:49.080 the share buy backs. Do you think that they're gonna 0:14:49.080 --> 0:14:52.880 get ramped back up with any tax cut? Well, you know, we, 0:14:53.000 --> 0:14:55.800 as you said, we certainly have seen a slowdown in 0:14:55.880 --> 0:15:00.640 buy backs, but it's not that I don't think you 0:15:00.680 --> 0:15:02.480 can assume that that's going to be what's going to 0:15:02.600 --> 0:15:07.000 happen with these tax savings. We have to differentiate between 0:15:07.240 --> 0:15:11.080 two things here. One is the repatriation of foreign cash 0:15:11.680 --> 0:15:13.920 and the other one is the annual tax savings from 0:15:13.920 --> 0:15:16.600 the lower tax rate. The repatriation is going to be 0:15:16.640 --> 0:15:19.680 a one time benefit to companies, and we think the 0:15:19.720 --> 0:15:22.000 majority of that is probably going to go to stock 0:15:22.040 --> 0:15:25.760 buy backs. Unlikely that that will go to dividend increases 0:15:25.760 --> 0:15:28.160 because it's not going to be repetitive. Some will go 0:15:28.480 --> 0:15:32.800 certainly to any capital spending projects that companies might have. 0:15:32.920 --> 0:15:37.440 But if companies have a good growth prospect from and 0:15:37.720 --> 0:15:41.240 reinvesting inside the company, they're already doing it, especially given 0:15:41.240 --> 0:15:44.560 how low debt is. So in other words, you're saying 0:15:44.760 --> 0:15:46.840 that to the extent that there is going to a 0:15:46.960 --> 0:15:49.720 be a boost from shared by backs, it will be 0:15:50.160 --> 0:15:54.440 a one time thing, largely tied to the cash repatriation? 0:15:54.480 --> 0:15:57.640 Am I understanding that correctly? Exactly? Yeah, so you said 0:15:57.680 --> 0:15:59.640 that better than I do know. Well, I mean, how 0:15:59.720 --> 0:16:02.320 much with with with the with the cash repatriation? One 0:16:02.360 --> 0:16:05.000 big question that I have is haven't we already seen 0:16:05.080 --> 0:16:07.600 that money get repatriated? I mean, you've seen the Apples 0:16:07.600 --> 0:16:10.760 and the Oracles of the world borrowing billions and billions 0:16:10.760 --> 0:16:13.800 of dollars through the debt markets to uh do their 0:16:13.880 --> 0:16:17.440 capital uh re whatever it is that they are doing, 0:16:17.480 --> 0:16:20.160 their giving their money back to their shareholders. Apple has 0:16:20.200 --> 0:16:23.520 like I think, a three hundred billion dollar uh capital 0:16:24.160 --> 0:16:27.400 give back program. I mean, haven't we already seen this? Well, 0:16:27.400 --> 0:16:29.520 we've seen it from a handful of companies, But there's 0:16:29.520 --> 0:16:32.920 still a lot of companies out there with foreign cash 0:16:33.120 --> 0:16:36.240 strandard overseas. Now, a lot of these companies, we think, 0:16:36.280 --> 0:16:40.960 have found ways of actually using that cash overseas, repatriating 0:16:41.080 --> 0:16:45.360 part of it through various schemes uh and and finding 0:16:45.360 --> 0:16:49.880 ways of of of really using that cash and far 0:16:49.960 --> 0:16:53.720 on foreign soil to benefit the company. So we think 0:16:53.760 --> 0:16:56.520 there will be some repatriation, but companies are going to 0:16:56.600 --> 0:16:58.360 have to decide if they want to pay that ten 0:16:58.440 --> 0:17:02.720 percent tax on repatriating those dollars or leave it where 0:17:02.760 --> 0:17:08.600 it is if it's actually returning above that ten penalty. So, Tim, 0:17:08.640 --> 0:17:11.160 do you think that in general the tax plan as 0:17:11.240 --> 0:17:13.560 lead out in the House and send it understanding that 0:17:13.560 --> 0:17:16.040 there will be some changes. Do you think that it 0:17:16.080 --> 0:17:19.920 will stimulate growth materially? You know, we we just don't 0:17:20.080 --> 0:17:22.960 see that. We think if they're growth prospects out there, 0:17:22.960 --> 0:17:27.359 and certainly the economy is growing, it's accelerating growth. Um. 0:17:27.400 --> 0:17:31.280 You know, we think that's already being done by companies already. 0:17:31.320 --> 0:17:35.000 Companies are already putting their money into growth opportunities that 0:17:35.080 --> 0:17:37.439 they have, and there's no reason for them not to 0:17:37.520 --> 0:17:41.840 do that. They can certainly borrow money very inexpensively now 0:17:42.520 --> 0:17:47.119 to um to stimulate any internal growth. Otherwise they're going 0:17:47.200 --> 0:17:51.440 to look to to gift it to their shareholders, either 0:17:51.640 --> 0:17:55.119 through stock buy backs or through increasing dividends. And we 0:17:55.160 --> 0:17:59.160 think the annual tax savings might lead to some nice 0:17:59.200 --> 0:18:01.679 dividend increases. Is that a number of companies. Is there 0:18:01.680 --> 0:18:05.040 any company in particular that you're targeting for a dividend increase? Well, 0:18:05.080 --> 0:18:06.520 I think if you look at some of the old 0:18:06.520 --> 0:18:10.680 economy companies that don't have play other places to put 0:18:10.720 --> 0:18:15.240 their money. I think increasing dividends in those companies which 0:18:15.240 --> 0:18:19.600 will attract a certain type of investor, those dividend income 0:18:19.680 --> 0:18:22.560 loving investors. We think that's where a lot of dividend 0:18:22.560 --> 0:18:26.960 increases might incur occur. Are you changing around your investments 0:18:26.960 --> 0:18:29.880 at all in response? Not? You know, not really, It's 0:18:29.920 --> 0:18:32.320 hard to know what which company is gonna do. What 0:18:32.520 --> 0:18:34.639 are they going to increase dividends? Are they going to 0:18:34.880 --> 0:18:38.280 increase buy backs? Are they going to find some internal 0:18:38.480 --> 0:18:41.800 growth opportunities. It's hard to know at this point. But 0:18:41.960 --> 0:18:43.560 we do know that there are a number of companies 0:18:43.600 --> 0:18:45.440 out there with high tax rates that are going to 0:18:45.520 --> 0:18:49.760 be big beneficiaries, and we have made investments uh in 0:18:49.800 --> 0:18:53.480 those companies. Can you give us any names? Uh? Broad 0:18:53.520 --> 0:18:57.119 Com uh symbols A V G O UH is a 0:18:57.200 --> 0:19:00.000 high taxpayer and we think it's going to really benefit 0:19:00.040 --> 0:19:03.160 it from lower tax rates and real quick. What about bonds? 0:19:03.160 --> 0:19:06.280 Do you think that they're going to get crushed next year? No? Uh, 0:19:06.520 --> 0:19:09.639 you know we're gonna see four percent interest rates. The 0:19:09.640 --> 0:19:13.919 world's going on fire. Investors need bonds, pension funds need bonds. 0:19:14.560 --> 0:19:17.000 H Bonds are not going to go away at all. 0:19:17.280 --> 0:19:18.800 Is it going to be a great place for money. 0:19:18.840 --> 0:19:21.520 I don't think it's going to be anything special, but 0:19:21.640 --> 0:19:24.280 there will be a place for bonds and portfolios. To 0:19:24.480 --> 0:19:26.880 Tim Grisky, thank you so much for joining us. Tim Grisky, 0:19:27.080 --> 0:19:31.720 chief investment Officer of Solaris Asset Management in New York. 0:19:32.320 --> 0:19:37.080 Definitely intriguing about the old economy companies that will increase 0:19:37.160 --> 0:19:41.439 their dividends and attract some shareholders and possibly be looked 0:19:41.440 --> 0:20:00.399 at as even better bonds substitutes and interesting developments. In 0:20:00.480 --> 0:20:02.720 two thousand and fifteen, there was a lot of focus 0:20:02.800 --> 0:20:05.840 on the Baltic Dry Index and how low it was. 0:20:05.920 --> 0:20:09.120 This is an index that measures how much ship owners 0:20:09.160 --> 0:20:13.320 are making to ship dry bulk things like iron ore 0:20:13.600 --> 0:20:18.160 or grains or whatever else is needed in a general economy. 0:20:18.240 --> 0:20:20.840 This year, however, it has surged to the highest since 0:20:20.920 --> 0:20:24.480 early and here to do a victory lap or perhaps 0:20:24.520 --> 0:20:26.680 not he he said it is not his style. John 0:20:26.760 --> 0:20:30.040 woven Smith, president of Genko Shipping, which is based in 0:20:30.080 --> 0:20:35.440 New York, shares up almost sixty two so far this year. So, John, 0:20:36.119 --> 0:20:38.840 how much more do you think that the dry the 0:20:38.840 --> 0:20:42.160 Baltic Dry Index has to rise? And what's behind this, Yes, 0:20:42.200 --> 0:20:43.680 So I think you I think you have to take 0:20:43.720 --> 0:20:46.560 a a step back to where we were over the 0:20:46.640 --> 0:20:49.520 last couple of years, where we had too many ships 0:20:49.640 --> 0:20:53.360 in the market. Um We've always had a pretty robust 0:20:53.400 --> 0:20:57.960 demand situation, but the the the ship owners over built. 0:20:58.080 --> 0:21:01.000 So now we're in a situation where we absorb that 0:21:01.119 --> 0:21:03.960 supply because of increasing demand, but also a lot of 0:21:04.000 --> 0:21:06.840 scrapping um or removing ships from the market over the 0:21:06.960 --> 0:21:10.000 last couple of years. And we're looking forward into two 0:21:10.000 --> 0:21:12.760 thousand and eighteen and we're only going to see one 0:21:12.800 --> 0:21:14.879 to one and a half percent growth in the number 0:21:14.920 --> 0:21:18.360 of ships that are delivering versus a growth of three 0:21:18.400 --> 0:21:21.160 to four percent on the demand side, driven by iron 0:21:21.200 --> 0:21:24.640 ore and coal imports primarily. So this is a two 0:21:24.640 --> 0:21:27.840 sided equation. In other words, there are fewer ships being 0:21:27.880 --> 0:21:31.479 built and there is incrementally more demand coming out of 0:21:31.720 --> 0:21:35.560 different economies. So before we get into your projection of 0:21:35.600 --> 0:21:38.400 how much more the Baltic dry indexs could rise, I'm 0:21:38.480 --> 0:21:41.800 curious which do you think is more important here? I mean, 0:21:41.800 --> 0:21:43.879 in other words, when people point to this increase and 0:21:43.920 --> 0:21:46.879 they say, well, this is the leading indicator that shows 0:21:46.920 --> 0:21:51.080 the global economy is surging, are you saying not so fast. 0:21:51.119 --> 0:21:53.199 This is really kind of a more complicated equation that 0:21:53.240 --> 0:21:56.040 has several different heads. I think there are two things here, 0:21:56.200 --> 0:21:59.600 um one the supply side and dry bulk shipping, meaning 0:21:59.600 --> 0:22:01.520 and then number of ships that are on the water 0:22:01.880 --> 0:22:04.639 on any given day to ship a cargo is probably 0:22:04.680 --> 0:22:07.119 one of the major factors and does drive the market. 0:22:07.280 --> 0:22:10.040 Having said that, if you look at what we're seeing 0:22:10.040 --> 0:22:13.159 on the cargo flow side, we're seeing increased iron ore 0:22:13.280 --> 0:22:16.960 going into China. We're seeing increased coal going into China, 0:22:17.240 --> 0:22:19.560 which is all done on the larger ships. But here's 0:22:19.560 --> 0:22:23.080 the neat thing. It's not just China centric. As we've 0:22:23.080 --> 0:22:24.760 seen in the last couple of years. We've seen a 0:22:24.880 --> 0:22:28.359 recovery in the European steel industry, so increased iron ore 0:22:28.400 --> 0:22:32.120 imports and coking coal going into Europe. We've seen India's 0:22:32.119 --> 0:22:35.800 steel industry recover, so increased coking coal going into India. 0:22:36.160 --> 0:22:40.800 We've seen coal imports into Taiwan, the Philippines, um cement 0:22:40.960 --> 0:22:45.399 into Indonesia in the outcoming out of the US golf. 0:22:45.480 --> 0:22:48.640 On the grain front, soybeans and corn are at all 0:22:48.680 --> 0:22:51.480 time highs. So this is much more of a global 0:22:51.720 --> 0:22:54.880 recovery from what we're seeing for cargo flows. So when 0:22:54.920 --> 0:22:59.000 was the last time that Jenko Shipping saw this degree 0:22:59.720 --> 0:23:03.480 of activity and demand. I would say you'd have to 0:23:03.520 --> 0:23:06.600 go back to probably two thousand fourteen, two thousand thirteen, 0:23:06.640 --> 0:23:10.960 two thousand fourteen, and what what happened in two thousand thirteen. Again, 0:23:11.080 --> 0:23:14.119 we we saw some overbuilding. We have now absorbed all 0:23:14.160 --> 0:23:16.000 of that, and as I said before, it's because of 0:23:16.080 --> 0:23:19.199 high scrapping over the last twenty four months and just 0:23:19.280 --> 0:23:21.879 a complete slow down in the number of ships that 0:23:21.920 --> 0:23:24.280 are that are going on the water. And I'll just 0:23:24.320 --> 0:23:27.560