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 --> 00:00:33,520 Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. When 7 00:00:33,720 --> 00:00:37,599 Speaker 1: will the pain in developing markets stop? Right now, we're 8 00:00:37,600 --> 00:00:41,440 Speaker 1: looking at the ms c I Emerging Markets Currency Index 9 00:00:41,560 --> 00:00:46,520 Speaker 1: dropping to a new low since two thousand seventeen in May, 10 00:00:47,040 --> 00:00:50,400 Speaker 1: as people start to think what's next. We've got India, 11 00:00:50,440 --> 00:00:54,240 Speaker 1: We've got Indonesia. Well, China go joining us now? Eric Fine, 12 00:00:54,440 --> 00:00:58,880 Speaker 1: very pleased to say portfolio manager focusing on emerging markets, 13 00:00:59,280 --> 00:01:02,040 Speaker 1: particularly fixed didn't come dear to my heart at Vaneck 14 00:01:02,200 --> 00:01:05,320 Speaker 1: Global here with us in our eleven three oh studios. Eric, 15 00:01:05,440 --> 00:01:08,160 Speaker 1: thank you so much for being here in your quarter 16 00:01:08,319 --> 00:01:12,679 Speaker 1: century of experience with developing markets from Morgan Stanley and 17 00:01:12,680 --> 00:01:16,840 Speaker 1: at Vanak. What period are we in right now? What 18 00:01:16,959 --> 00:01:19,680 Speaker 1: period is analogous to it in history? Sure? Well, first 19 00:01:19,680 --> 00:01:22,319 Speaker 1: of all, we're in an experimental period, right so quantitative 20 00:01:22,319 --> 00:01:26,119 Speaker 1: easing is an experiment UM and so uh. Referring back 21 00:01:26,160 --> 00:01:28,440 Speaker 1: to history is tricky, but UM my short answer is 22 00:01:28,480 --> 00:01:32,320 Speaker 1: it feels like a lot like UM that there was 23 00:01:32,360 --> 00:01:36,360 Speaker 1: a period of leverage that um um an unwanted or 24 00:01:36,360 --> 00:01:38,920 Speaker 1: a tightening and policy began with the FED. It began 25 00:01:38,959 --> 00:01:41,399 Speaker 1: to have repercussions around the world. Some of them didn't 26 00:01:41,440 --> 00:01:45,200 Speaker 1: seem major, didn't seem that important at the time, Mexico 27 00:01:45,520 --> 00:01:49,280 Speaker 1: or UH. In the case of ninety seven Thailand, Thailand's 28 00:01:49,360 --> 00:01:52,520 Speaker 1: really not that important a place, and yet it cascaded 29 00:01:52,600 --> 00:01:55,560 Speaker 1: and didn't stop until the FED back down. So if 30 00:01:55,560 --> 00:01:58,800 Speaker 1: you see a cascading pain, I mean, are we a 31 00:01:58,920 --> 00:02:01,920 Speaker 1: quarter of the way through here? Or are we three 32 00:02:01,960 --> 00:02:03,640 Speaker 1: quarters of the way through? What do you think? Yeah? 33 00:02:03,720 --> 00:02:06,040 Speaker 1: Quarters are not? You know, I think right now is 34 00:02:07,040 --> 00:02:09,320 Speaker 1: observing and storytelling time, right. I mean, I was a 35 00:02:09,360 --> 00:02:11,080 Speaker 1: south side economist, so I can get into numbers if 36 00:02:11,120 --> 00:02:13,000 Speaker 1: you want to. So I'm more comfortable saying we're still 37 00:02:13,000 --> 00:02:16,000 Speaker 1: in the first half of this UM. And So, for example, 38 00:02:16,040 --> 00:02:19,080 Speaker 1: in Turkey, UM after the big it was about a 39 00:02:19,080 --> 00:02:21,480 Speaker 1: month ago, the big eight percent ten percent sell off 40 00:02:21,520 --> 00:02:26,200 Speaker 1: in the lira. Positioning into that was unchanged, right, so 41 00:02:26,240 --> 00:02:29,000 Speaker 1: people hadn't really reacted to that and there and still 42 00:02:29,040 --> 00:02:30,440 Speaker 1: to this day, I don't think a lot of volume 43 00:02:30,480 --> 00:02:32,480 Speaker 1: has gone through the numbers on the screen on a 44 00:02:32,560 --> 00:02:35,480 Speaker 1: name like Turkey. Maybe spot effects, but there's a lot 45 00:02:35,520 --> 00:02:37,320 Speaker 1: of those interest rate levels you see, not a lot 46 00:02:37,320 --> 00:02:40,399 Speaker 1: of transacting, so it looks like a thing, but um, 47 00:02:40,440 --> 00:02:42,880 Speaker 1: it's a we're in a we're in a different world. 48 00:02:42,960 --> 00:02:45,519 Speaker 1: So not a lot of people sold despite this, which 49 00:02:45,560 --> 00:02:47,280 Speaker 1: is why I think the pressures are still there. You 50 00:02:47,400 --> 00:02:51,600 Speaker 1: owned no Turkey, correct we You know, I'm an old 51 00:02:51,600 --> 00:02:54,400 Speaker 1: style guy. If I don't if we don't like something, 52 00:02:54,440 --> 00:02:56,760 Speaker 1: if our process tells us not to own it, we don't. 53 00:02:56,800 --> 00:02:59,760 Speaker 1: We don't own it um because we think the losses 54 00:02:59,800 --> 00:03:04,600 Speaker 1: can be significantly around research more Sandy Argentina was of 55 00:03:04,600 --> 00:03:07,359 Speaker 1: the hard Currency Index, and that sounds crazy from today's perspective, 56 00:03:07,360 --> 00:03:08,519 Speaker 1: but that was a fact. That's what you know. The 57 00:03:08,560 --> 00:03:11,560 Speaker 1: industries were small, ast and new. We we thought that 58 00:03:11,600 --> 00:03:14,120 Speaker 1: they were default. That was interesting, but not a really 59 00:03:14,200 --> 00:03:16,360 Speaker 1: unique view. A few other people thought, but we zero 60 00:03:16,400 --> 00:03:18,600 Speaker 1: weighted it. That was very formative to me. If you 61 00:03:18,639 --> 00:03:21,200 Speaker 1: think if we if we don't like something, and there 62 00:03:21,240 --> 00:03:23,399 Speaker 1: you're really faced with capital losses. We think the buyer 63 00:03:23,440 --> 00:03:25,400 Speaker 1: should be to really avoid it and not worry that 64 00:03:25,440 --> 00:03:27,919 Speaker 1: it's a big part of an index. Okay, so if 65 00:03:28,000 --> 00:03:29,600 Speaker 1: that is the case, I mean the way you're talking 66 00:03:29,600 --> 00:03:33,280 Speaker 1: about I'm old school that way. The one reason perhaps 67 00:03:33,320 --> 00:03:36,840 Speaker 1: that you're saying that is because indexing has absolutely exploded 68 00:03:37,080 --> 00:03:39,040 Speaker 1: and a lot of people have gotten into emerging markets, 69 00:03:39,040 --> 00:03:41,800 Speaker 1: have done so through E t F and other index strategies, 70 00:03:42,120 --> 00:03:44,120 Speaker 1: and they own a lot of things that they may 71 00:03:44,120 --> 00:03:47,240 Speaker 1: not believe in. How will that change the dynamic in 72 00:03:47,320 --> 00:03:51,000 Speaker 1: this emerging markets sell off? Yes, well, indexing his First 73 00:03:51,000 --> 00:03:54,600 Speaker 1: of all, it's given investors access to things two products 74 00:03:54,640 --> 00:03:56,880 Speaker 1: that they haven't had, and in general average US pension 75 00:03:56,920 --> 00:03:59,560 Speaker 1: fund has three percent allocating emerging markets bonds. If you 76 00:03:59,560 --> 00:04:02,160 Speaker 1: look back where it's just the dollar index, you're supposed 77 00:04:02,200 --> 00:04:05,160 Speaker 1: to have a lot more. So it's served a real purpose. 78 00:04:05,480 --> 00:04:07,360 Speaker 1: But I think in terms of market structure, what it 79 00:04:07,400 --> 00:04:11,760 Speaker 1: will mean for specific countries like a Turkey, is when 80 00:04:11,800 --> 00:04:14,920 Speaker 1: things seem as if they've gone bad, but you look 81 00:04:14,920 --> 00:04:17,680 Speaker 1: on the screen and it doesn't look that bad, don't 82 00:04:17,720 --> 00:04:20,240 Speaker 1: think it's over. That's my main message. It's not that 83 00:04:20,279 --> 00:04:23,039 Speaker 1: they're bad, it's just that for specific countries it can 84 00:04:23,080 --> 00:04:26,880 Speaker 1: create an appearance that things have stabilized when they really haven't. 85 00:04:27,040 --> 00:04:28,680 Speaker 1: And so in a country like Turkey, I think there's 86 00:04:28,720 --> 00:04:31,160 Speaker 1: a real chance that we get to capital controls. If 87 00:04:31,200 --> 00:04:33,640 Speaker 1: you get to capital controls, the numbers on the screens 88 00:04:33,760 --> 00:04:37,680 Speaker 1: right now, which I'm saying should be a doubted um um, 89 00:04:37,720 --> 00:04:40,760 Speaker 1: all of a sudden become undoubted because there's essentially nothing 90 00:04:40,839 --> 00:04:43,120 Speaker 1: on there and you have to So that's the real concern. 91 00:04:43,160 --> 00:04:46,520 Speaker 1: It's not an overall process. They're providing real opportunities for 92 00:04:46,560 --> 00:04:49,560 Speaker 1: people wouldn't access great things like in general emerging market 93 00:04:49,560 --> 00:04:52,520 Speaker 1: bonds have done well. Um, it's that for specific countries 94 00:04:52,520 --> 00:04:56,880 Speaker 1: that can create complacency, uh when when it's unwarranted. I 95 00:04:56,920 --> 00:04:59,400 Speaker 1: think it's very much the case in Turkey. Interesting, so 96 00:05:00,040 --> 00:05:02,480 Speaker 1: do invest in emerging markets? So it sounds like you 97 00:05:02,600 --> 00:05:06,159 Speaker 1: do have a somewhat negative view of the asset class 98 00:05:06,240 --> 00:05:09,520 Speaker 1: that you focus on. Where are you positive? Sure? Well, 99 00:05:09,600 --> 00:05:12,440 Speaker 1: So when I say that it's well for a big 100 00:05:12,440 --> 00:05:14,440 Speaker 1: part of the reason why I'm cautious right now is 101 00:05:14,480 --> 00:05:17,800 Speaker 1: the names that I see adversity where I'm expecting adversity 102 00:05:17,800 --> 00:05:19,920 Speaker 1: happen to be big names. So when people ask about 103 00:05:19,960 --> 00:05:22,840 Speaker 1: quote unquote emerging markets, they're not asking me about my 104 00:05:22,920 --> 00:05:25,280 Speaker 1: view of Mongolia or Armenia or b l a Ruse 105 00:05:25,720 --> 00:05:28,760 Speaker 1: or Argentina, and sometimes on Argentina, they're asking me about 106 00:05:28,920 --> 00:05:31,560 Speaker 1: big names like Mexico. Well they had an election. We 107 00:05:31,600 --> 00:05:34,479 Speaker 1: think Omlo needs to be tested as new president. Um 108 00:05:34,720 --> 00:05:38,560 Speaker 1: uh does that mean you're I don't have a lot 109 00:05:38,600 --> 00:05:40,760 Speaker 1: of explosion and I'm looking to get exposure there um 110 00:05:41,040 --> 00:05:43,920 Speaker 1: Um Russia economic policy is great, but sanctions risk is there? 111 00:05:44,520 --> 00:05:47,080 Speaker 1: Um A Turkey. I've already explained our view on Turkey. 112 00:05:47,279 --> 00:05:50,520 Speaker 1: Those are big names, so to be. So that's once 113 00:05:50,680 --> 00:05:52,520 Speaker 1: the spirit in which I'm answering it. So what are 114 00:05:52,560 --> 00:05:57,800 Speaker 1: we what are we excited about? Um? Argentina, Argentina government, Argentina. 115 00:05:58,160 --> 00:06:01,239 Speaker 1: You could describe what's happening to merging markets as a test. 116 00:06:01,680 --> 00:06:04,760 Speaker 1: Some countries are passing, some countries are failing. Now the 117 00:06:04,800 --> 00:06:06,480 Speaker 1: test is not just one test. You take a few 118 00:06:06,480 --> 00:06:08,400 Speaker 1: of them, but every single test, in my opinion, that 119 00:06:08,440 --> 00:06:11,480 Speaker 1: Turkey has taken in this they failed. They are not 120 00:06:11,560 --> 00:06:14,520 Speaker 1: looking like their their prospects are not looking good. Argentina, 121 00:06:14,520 --> 00:06:17,240 Speaker 1: in our opinion, has passed all these tests. They floated 122 00:06:17,279 --> 00:06:19,200 Speaker 1: the exchange right, not enough, But you know what, I 123 00:06:19,320 --> 00:06:21,120 Speaker 1: just don't invest too much in the exchange rate if 124 00:06:21,160 --> 00:06:22,880 Speaker 1: that's your concern, if you think it needs to go more. 125 00:06:23,000 --> 00:06:26,039 Speaker 1: But they've tried to quasi float the exchange. They've hiked 126 00:06:26,080 --> 00:06:29,480 Speaker 1: interest rates to double the inflation rate, Turkeys contemplating hiking 127 00:06:29,760 --> 00:06:33,360 Speaker 1: interest rates to the inflation rate. Um. And they've invited 128 00:06:33,360 --> 00:06:36,160 Speaker 1: the i m F, which means dollar funding is really 129 00:06:36,200 --> 00:06:37,760 Speaker 1: just not the risk. So I'm not at I'm not 130 00:06:37,800 --> 00:06:40,640 Speaker 1: saying Argentina currency is out of the woods. And but 131 00:06:40,720 --> 00:06:42,320 Speaker 1: when you're under an i m F program and you're 132 00:06:42,320 --> 00:06:45,960 Speaker 1: committed and you're reacting the right way, yields for government 133 00:06:45,960 --> 00:06:49,320 Speaker 1: bonds and dollars is too high, and higher for provinces 134 00:06:49,360 --> 00:06:51,480 Speaker 1: that haven't had a head track record of defaulting is 135 00:06:51,480 --> 00:06:54,240 Speaker 1: too high. So Argentina, we're very excited about year Argentina 136 00:06:54,320 --> 00:06:57,760 Speaker 1: and funds too much spread duration. You're not trading Argentina 137 00:06:57,800 --> 00:06:59,560 Speaker 1: there So as bullish as I am on Argentina, when 138 00:06:59,560 --> 00:07:01,560 Speaker 1: you get into spread duration, you're trading a whole bunch 139 00:07:01,600 --> 00:07:04,680 Speaker 1: of other things that are not the original thing. Um um. 140 00:07:04,720 --> 00:07:07,400 Speaker 1: I'd also say Chinese property right people are worried. You know, 141 00:07:07,400 --> 00:07:09,600 Speaker 1: it's not this general e m thing we have been 142 00:07:09,840 --> 00:07:12,320 Speaker 1: We have not avoided China because we thought there was 143 00:07:12,320 --> 00:07:14,080 Speaker 1: going to be a disaster that we avoided China. We 144 00:07:14,080 --> 00:07:16,520 Speaker 1: didn't see value there Now due to these pressures, some 145 00:07:16,560 --> 00:07:20,520 Speaker 1: of their property names corporates have are very yielding now 146 00:07:20,560 --> 00:07:22,040 Speaker 1: and a lot of them have high cash to short 147 00:07:22,120 --> 00:07:24,960 Speaker 1: term liabilities. So that's an attractive sector where you might 148 00:07:25,000 --> 00:07:29,000 Speaker 1: see negative news about, but we're excited by because they're 149 00:07:29,040 --> 00:07:32,200 Speaker 1: responding positively, the government's responding positively, and the companies have 150 00:07:32,240 --> 00:07:34,640 Speaker 1: buffers these high cash So we're not afraid of risk. 151 00:07:34,680 --> 00:07:37,000 Speaker 1: We're we're We're just saying that a lot of things 152 00:07:37,080 --> 00:07:41,000 Speaker 1: that get associated with quote unquote emerging markets UM happen 153 00:07:41,040 --> 00:07:44,280 Speaker 1: to be vulnerable. And the fact that in the old 154 00:07:44,400 --> 00:07:47,240 Speaker 1: days under not liking something meant not owning. In these 155 00:07:47,280 --> 00:07:49,080 Speaker 1: days not liking it ment, well, I have to have 156 00:07:49,160 --> 00:07:52,120 Speaker 1: some because it's yield. We're in a quee environment UM 157 00:07:52,240 --> 00:07:55,240 Speaker 1: means that there can be some complacency in certain names. 158 00:07:55,280 --> 00:07:57,880 Speaker 1: So don't get comforted by O. G. Turkey look stable. 159 00:07:57,880 --> 00:08:00,440 Speaker 1: I wouldn't get comforted by that. Eric Fine, you'll have 160 00:08:00,480 --> 00:08:03,480 Speaker 1: to come back a pleasure speaking with you. Eric Fine, 161 00:08:03,560 --> 00:08:06,880 Speaker 1: portfolio manager focusing on emerging markets fixed income strategy for 162 00:08:07,200 --> 00:08:10,520 Speaker 1: Van Eck Global here in our eleven three oh studios, 163 00:08:10,760 --> 00:08:13,040 Speaker 1: fantastic inside at a time when a lot of people 164 00:08:13,120 --> 00:08:15,440 Speaker 1: are trying to figure out just where we are in 165 00:08:15,480 --> 00:08:18,640 Speaker 1: this emerging markets sell off, how pervasive will be? How 166 00:08:18,680 --> 00:08:37,880 Speaker 1: tied is it to the Federal Reserve. CBS shares down 167 00:08:37,920 --> 00:08:42,079 Speaker 1: more than three percent today after less Moonvest, the longtime 168 00:08:42,160 --> 00:08:46,000 Speaker 1: chief executive officer and kingpin of the media industry, was 169 00:08:46,080 --> 00:08:50,320 Speaker 1: ousted after sexual harassment claims. What will be the future 170 00:08:50,360 --> 00:08:53,120 Speaker 1: of this company? Who will be the leader to really 171 00:08:53,160 --> 00:08:55,640 Speaker 1: take the place of less Moon Vest? Joining us now? 172 00:08:55,800 --> 00:08:59,200 Speaker 1: Porter bib managing partner at Media Tech Capital Partners, also 173 00:08:59,520 --> 00:09:03,520 Speaker 1: the first publisher of Rolling Stone magazine in New York. Porter, 174 00:09:03,760 --> 00:09:06,760 Speaker 1: thank you so much for being with us. So how 175 00:09:06,800 --> 00:09:10,480 Speaker 1: big of a blow is this to CBS. Well, it's 176 00:09:11,120 --> 00:09:13,960 Speaker 1: a very big blow to less Moon Viz. But it's 177 00:09:14,360 --> 00:09:17,959 Speaker 1: very little to CBS in the bigger picture of things, 178 00:09:18,000 --> 00:09:23,400 Speaker 1: because Uh National Amusement and the Redstone Interest control both 179 00:09:23,520 --> 00:09:27,480 Speaker 1: Vehicom and CBS and have indicated for several years that 180 00:09:27,920 --> 00:09:32,480 Speaker 1: they want to sell both companies. Sherry Rhodes Spreadstone obviously 181 00:09:32,600 --> 00:09:35,320 Speaker 1: tried to put them together. Less Moon Viz fought that 182 00:09:35,440 --> 00:09:38,480 Speaker 1: because she would not commit to have him run the 183 00:09:38,520 --> 00:09:44,920 Speaker 1: combined companies, which interestingly as as a single entity put 184 00:09:44,920 --> 00:09:48,800 Speaker 1: back together the way they were before Sumner Redstone split 185 00:09:48,840 --> 00:09:52,160 Speaker 1: them up eight years ago. Um, they would be worth 186 00:09:52,160 --> 00:09:57,400 Speaker 1: twenty to more than they are worth individually a standalone. 187 00:09:57,480 --> 00:10:00,120 Speaker 1: So really he was on the right trail. Becau is 188 00:10:00,160 --> 00:10:04,720 Speaker 1: there's so much redundancy, duplication of efforts and initiatives and 189 00:10:04,880 --> 00:10:11,040 Speaker 1: organizational structures. And what the CBS doesn't have Vehacom does, 190 00:10:11,160 --> 00:10:16,400 Speaker 1: what Vehcom doesn't have CBS does. CBS has no real 191 00:10:16,520 --> 00:10:21,640 Speaker 1: international presence, It has no real movie studio or very 192 00:10:21,720 --> 00:10:28,000 Speaker 1: significant motion picture library that Paramount Pictures of in Vehcom offers. UH. 193 00:10:28,559 --> 00:10:33,160 Speaker 1: CBS has the broadcast networks, the broadcast content and archives 194 00:10:33,240 --> 00:10:36,960 Speaker 1: and less moons has been very effective. Moving the company 195 00:10:37,000 --> 00:10:42,040 Speaker 1: into over the top and streaming and CBS All Access 196 00:10:42,080 --> 00:10:46,839 Speaker 1: CBS News UH has been quite successful. Well, what I 197 00:10:46,880 --> 00:10:49,600 Speaker 1: guess that that I'm wondering. I'm looking at Viacom shares 198 00:10:49,640 --> 00:10:51,680 Speaker 1: and they're little change today after being down for the 199 00:10:51,720 --> 00:10:55,360 Speaker 1: two sessions prior, and CBS shares, as we said, are 200 00:10:55,400 --> 00:10:58,640 Speaker 1: down more than three What is the market missing that 201 00:10:58,679 --> 00:11:01,680 Speaker 1: you're seeing with respect to the added value that these 202 00:11:01,720 --> 00:11:05,440 Speaker 1: combined companies will have. Well, I I think what what 203 00:11:05,920 --> 00:11:09,319 Speaker 1: is happening today in the market is shareholders are are saying, 204 00:11:09,720 --> 00:11:13,000 Speaker 1: we're losing one of the best, uh and most effective 205 00:11:13,960 --> 00:11:18,040 Speaker 1: managers in the media business. Ever, less Moonvous has done 206 00:11:18,040 --> 00:11:20,800 Speaker 1: an incredible job in the fifteen years since he's been 207 00:11:21,280 --> 00:11:26,520 Speaker 1: the senior executive at at CBS. He's really uh fought 208 00:11:26,559 --> 00:11:31,560 Speaker 1: the transition and landscape earthquakes that have been going on 209 00:11:31,679 --> 00:11:35,199 Speaker 1: in legacy media companies. He's kept CBS on top of 210 00:11:36,240 --> 00:11:40,200 Speaker 1: all the broadcast networks for a long time. And they're 211 00:11:40,240 --> 00:11:44,160 Speaker 1: saying without less Uh, they don't know Joe Ianello, who's 212 00:11:44,440 --> 00:11:48,680 Speaker 1: been less his right hand man for almost a decade. UM, 213 00:11:48,760 --> 00:11:50,600 Speaker 1: they don't know what's going to happen to the company, 214 00:11:50,600 --> 00:11:54,720 Speaker 1: and they're they're not looking at it as a takeover target. 215 00:11:55,320 --> 00:11:58,720 Speaker 1: That's what Sherry Redstone has had that in her mind 216 00:11:58,760 --> 00:12:02,000 Speaker 1: for the last several years, cleaned house at AT with 217 00:12:02,080 --> 00:12:07,160 Speaker 1: Phil Domont and others who left UM, put Bob Pacissions 218 00:12:07,360 --> 00:12:12,000 Speaker 1: in charge, and prepared for a takeover of the combined companies. 219 00:12:12,559 --> 00:12:17,040 Speaker 1: Nobody's focusing on that right now because curiously, one of 220 00:12:17,120 --> 00:12:20,520 Speaker 1: the board decisions that came out last night when they 221 00:12:21,320 --> 00:12:26,320 Speaker 1: decided made the announcement about less Moon Voo's departure. They 222 00:12:26,320 --> 00:12:29,760 Speaker 1: announced that Sherry Redstone has agreed to a two year 223 00:12:29,960 --> 00:12:34,960 Speaker 1: hiatus and won't push combining vih Com and CBS. I 224 00:12:34,960 --> 00:12:39,319 Speaker 1: don't know if that's enforceable. The bottom line, the asterisk 225 00:12:39,440 --> 00:12:43,480 Speaker 1: on that whole announcement was, but if anybody else wants 226 00:12:43,520 --> 00:12:47,600 Speaker 1: to promote a combine vehicle CBS, you do, there will 227 00:12:47,640 --> 00:12:51,000 Speaker 1: need still be no objection by the board. Um almost 228 00:12:51,000 --> 00:12:53,040 Speaker 1: trying to say, please come in here and rescue me 229 00:12:53,080 --> 00:12:54,640 Speaker 1: so that I can stay out of it, right, instead 230 00:12:54,640 --> 00:12:57,480 Speaker 1: of avoid the political fallout, I guess that I'm wondering 231 00:12:57,480 --> 00:13:00,200 Speaker 1: when you talk about the vision of lesser moonvest is 232 00:13:00,200 --> 00:13:04,120 Speaker 1: the vision that is required from your perspective for CBS 233 00:13:04,120 --> 00:13:08,719 Speaker 1: over the upcoming decade or so during a nearly unprecedented 234 00:13:09,360 --> 00:13:13,079 Speaker 1: shift transformation of the entire media industry. Right. Well, there's 235 00:13:13,120 --> 00:13:17,760 Speaker 1: one word that answers your question. It's called scale. CBS 236 00:13:17,880 --> 00:13:23,320 Speaker 1: and Viacom, neither of them, individually or collectively combined, has 237 00:13:23,440 --> 00:13:27,480 Speaker 1: the scale to compete with the the tech giants, with Amazon, 238 00:13:27,640 --> 00:13:31,800 Speaker 1: with Google, with Facebook, with Microsoft, um or or with 239 00:13:31,960 --> 00:13:35,839 Speaker 1: Disney now, which is with with their acquisition of twenty 240 00:13:35,920 --> 00:13:40,520 Speaker 1: one century Foxes entertainment assets, They're they're going after Sky 241 00:13:40,559 --> 00:13:43,120 Speaker 1: and they will end up getting Sky in the UK. 242 00:13:43,800 --> 00:13:48,160 Speaker 1: UM they're going to be a major streaming factor along 243 00:13:48,160 --> 00:13:51,600 Speaker 1: with the tech giants, and CBS and Viacom individually or 244 00:13:51,600 --> 00:13:54,559 Speaker 1: collectively cannot compete in that market. Who is going to 245 00:13:54,600 --> 00:13:57,119 Speaker 1: be in a position to take up Sherry Redstone's suggestion 246 00:13:57,360 --> 00:14:00,400 Speaker 1: and try to push for this merger sooner than later. Well, 247 00:14:00,400 --> 00:14:06,960 Speaker 1: it's curious Verizon has already articulated an interest in CBS. 248 00:14:07,720 --> 00:14:10,360 Speaker 1: One of the board members right now, Bruce Gordon, is 249 00:14:10,400 --> 00:14:13,760 Speaker 1: a former senior Verizon executive, and I'm sure they are. 250 00:14:14,160 --> 00:14:19,720 Speaker 1: He's talking to Verizon assiduously and figuring out whether or 251 00:14:19,760 --> 00:14:23,600 Speaker 1: not this is the right time. Verizon claims that they're 252 00:14:23,640 --> 00:14:28,600 Speaker 1: focused on developing five G, the new um streaming service 253 00:14:28,680 --> 00:14:33,280 Speaker 1: that's going to revolutionize wireless communications and the Internet, but 254 00:14:33,520 --> 00:14:37,280 Speaker 1: they don't have any content, and their competition at over 255 00:14:37,320 --> 00:14:40,160 Speaker 1: at A T and T bought Time Warner and does 256 00:14:40,240 --> 00:14:43,520 Speaker 1: have content. So I think that Verizon is in first 257 00:14:43,560 --> 00:14:48,200 Speaker 1: position to combine with CBS and or Vehicom Porter BIB, 258 00:14:48,200 --> 00:14:50,560 Speaker 1: thank you so much for being with us today, definitely 259 00:14:50,960 --> 00:14:54,280 Speaker 1: important to follow what's happening with this media saga that 260 00:14:54,320 --> 00:15:14,200 Speaker 1: has entered a new phase without Blessed Moon. Vest Apple 261 00:15:14,240 --> 00:15:17,600 Speaker 1: shares down today for a fourth straight day, the biggest 262 00:15:17,760 --> 00:15:21,480 Speaker 1: four day slump since April. This comes after the company 263 00:15:21,520 --> 00:15:24,080 Speaker 1: said that it would have to raise prices on certain 264 00:15:24,120 --> 00:15:28,360 Speaker 1: products in response to the additional tariffs at President Trump 265 00:15:28,440 --> 00:15:31,960 Speaker 1: has proposed on Chinese goods joining us now. David Garty, 266 00:15:32,080 --> 00:15:34,520 Speaker 1: I'm very pleased to say, Chief executive officer of g 267 00:15:34,640 --> 00:15:38,080 Speaker 1: v A Research, David, what do you take away from 268 00:15:38,120 --> 00:15:42,760 Speaker 1: Apple's announcement about having to raise prices on certain products? 269 00:15:42,800 --> 00:15:46,040 Speaker 1: Most is that Apple did not in those list of 270 00:15:46,040 --> 00:15:49,160 Speaker 1: products include the iPhone, which says, I mean, here's the company, 271 00:15:49,560 --> 00:15:52,280 Speaker 1: the product the iPhone provides the bulk of the company's 272 00:15:52,320 --> 00:15:54,600 Speaker 1: revenues and profits. They said it wasn't going to be 273 00:15:54,680 --> 00:15:57,240 Speaker 1: impacted by tariffs, which to me, I read that as 274 00:15:57,280 --> 00:15:59,640 Speaker 1: saying that they're going to eat the higher costs that 275 00:15:59,760 --> 00:16:02,960 Speaker 1: the tariffs would impact. The tariff effect would have on 276 00:16:03,120 --> 00:16:06,560 Speaker 1: Apple in terms of its manufacturing. As you know, Apples, 277 00:16:06,560 --> 00:16:10,240 Speaker 1: a global company, has substantial operations in China. The Trump 278 00:16:10,280 --> 00:16:14,160 Speaker 1: administration coming out and levying tariffs on almost all the 279 00:16:14,200 --> 00:16:17,720 Speaker 1: imports that are coming into the US from China. This 280 00:16:17,800 --> 00:16:20,720 Speaker 1: is an effect that you know, manufacturers that use global 281 00:16:20,720 --> 00:16:25,160 Speaker 1: supply chains like Apple can't offset overnight. And as a result, 282 00:16:25,200 --> 00:16:27,320 Speaker 1: Apple is saying that with respect to the iPhone and 283 00:16:27,360 --> 00:16:30,160 Speaker 1: the higher tariffs, they're going to eat the costs, which 284 00:16:30,200 --> 00:16:34,880 Speaker 1: means that they won't pass through these costs to their consumers. However, 285 00:16:35,320 --> 00:16:37,160 Speaker 1: in other cases where the company is said in the 286 00:16:37,200 --> 00:16:41,040 Speaker 1: case of iPods, in the case of accessories, prices will 287 00:16:41,080 --> 00:16:44,200 Speaker 1: be going up. So but here's what I'm struggling with. 288 00:16:44,280 --> 00:16:46,800 Speaker 1: I mean iPods. Who has an iPod these days? Right? 289 00:16:46,800 --> 00:16:49,320 Speaker 1: These are all sort of the peripheral products of Apples. 290 00:16:49,760 --> 00:16:54,240 Speaker 1: What does it say about their confidence levels that they 291 00:16:55,080 --> 00:16:56,800 Speaker 1: is it perhaps that they don't have the pricing power 292 00:16:57,000 --> 00:16:59,400 Speaker 1: to to do that with the iPhone, or that that they, 293 00:17:00,120 --> 00:17:03,400 Speaker 1: uh say, are feeling more vulnerable in a time of 294 00:17:03,560 --> 00:17:07,320 Speaker 1: increasing competition with smartphones that they don't want to touch that. Well, 295 00:17:07,359 --> 00:17:09,520 Speaker 1: you are in a situation where in the smartphone market 296 00:17:09,520 --> 00:17:12,680 Speaker 1: growth has essentially plateaued. Uh, there is a battle for 297 00:17:12,760 --> 00:17:16,040 Speaker 1: market share. Don't forget Samsung is out there. Uh, Samsung 298 00:17:16,080 --> 00:17:19,480 Speaker 1: itself with very large operations in Korea, not necessarily in China. 299 00:17:20,080 --> 00:17:24,000 Speaker 1: Apple has to consider what's its competitive positioning, and obviously 300 00:17:24,040 --> 00:17:28,760 Speaker 1: iPhone sales drive the sales of many other products for Apple. 301 00:17:28,880 --> 00:17:31,520 Speaker 1: So for Apple to say essentially, look, we're going to 302 00:17:31,600 --> 00:17:33,920 Speaker 1: eat the costs on this so we can hold onto 303 00:17:33,920 --> 00:17:36,640 Speaker 1: our market share, this is what they're doing. I think 304 00:17:36,640 --> 00:17:39,000 Speaker 1: the bigger picture, though, that we have to take away 305 00:17:39,000 --> 00:17:41,560 Speaker 1: from looking at what Apple is saying and what Ford 306 00:17:41,600 --> 00:17:45,000 Speaker 1: Motor Company are saying, is that they have optimized their 307 00:17:45,040 --> 00:17:50,720 Speaker 1: operations to operate in a global market. Imposing tariffs um 308 00:17:50,920 --> 00:17:53,800 Speaker 1: requires changes in supply chains that can't be made overnight. 309 00:17:53,840 --> 00:17:57,439 Speaker 1: These require substantial capital investments, which are done over years. 310 00:17:57,800 --> 00:17:59,320 Speaker 1: What it really means at the end of the day 311 00:17:59,400 --> 00:18:02,000 Speaker 1: is that if probably are going up so much, these 312 00:18:02,040 --> 00:18:04,800 Speaker 1: companies are going to limit what consumer choices. Look at 313 00:18:04,840 --> 00:18:07,040 Speaker 1: what Ford Motor Company did in terms of saying, we're 314 00:18:07,080 --> 00:18:10,160 Speaker 1: not selling passenger cars in the US anymore. The costs 315 00:18:10,160 --> 00:18:13,040 Speaker 1: are too high. Tariffs are making it worse Oracle and 316 00:18:13,160 --> 00:18:17,040 Speaker 1: Hewlett Packard enterprises in the common period. President Trump about 317 00:18:17,080 --> 00:18:20,719 Speaker 1: some of these tariffs, said that if they go through, 318 00:18:21,000 --> 00:18:25,280 Speaker 1: it would impede America's leadership when it comes to creating 319 00:18:25,320 --> 00:18:28,359 Speaker 1: a five GEN network. Do you think that's true. I 320 00:18:28,359 --> 00:18:31,760 Speaker 1: would argue that again, global supply chains matter, and in 321 00:18:31,800 --> 00:18:34,040 Speaker 1: this case, we have components that are important for the 322 00:18:34,080 --> 00:18:37,800 Speaker 1: adoption of things like five G. Five G as a 323 00:18:37,880 --> 00:18:41,719 Speaker 1: wireless broadband protocol arguably is going to usher in a 324 00:18:41,760 --> 00:18:45,080 Speaker 1: new generation of services. If the US wishes to fall 325 00:18:45,160 --> 00:18:49,879 Speaker 1: further behind in terms of being technologically competitive, fine go ahead. 326 00:18:50,080 --> 00:18:53,200 Speaker 1: Delay the implementation of five G will only all suffer 327 00:18:53,240 --> 00:18:54,960 Speaker 1: as a result. So you don't think this is just 328 00:18:55,160 --> 00:18:58,280 Speaker 1: an issue of the company is throwing threats out there 329 00:18:58,280 --> 00:19:00,800 Speaker 1: in order to get their wish, which is to get 330 00:19:00,800 --> 00:19:03,240 Speaker 1: these tariffs taken off the table. I don't believe the 331 00:19:03,280 --> 00:19:06,160 Speaker 1: companies make idle threats. I mean, companies are talking about 332 00:19:06,240 --> 00:19:11,439 Speaker 1: capital planning processes that again take years to implement, and 333 00:19:11,560 --> 00:19:14,840 Speaker 1: for an administration to come out and expect that companies 334 00:19:14,960 --> 00:19:17,679 Speaker 1: at the not the drop of a hat, are going 335 00:19:17,720 --> 00:19:21,359 Speaker 1: to be able to turn around and reconfigure themselves. That's 336 00:19:21,400 --> 00:19:24,399 Speaker 1: just blatantly unrealistic. So how much do you think that 337 00:19:24,480 --> 00:19:26,440 Speaker 1: big tech in the U s would sell off if 338 00:19:26,440 --> 00:19:29,159 Speaker 1: these tariffs go through as promised? Well, I mean we're 339 00:19:29,160 --> 00:19:31,359 Speaker 1: already looking in a situation where people are saying that 340 00:19:31,440 --> 00:19:34,560 Speaker 1: Apple probably from about two seventeen a share right now 341 00:19:34,640 --> 00:19:38,200 Speaker 1: probably pulls back maybe below two hundred dollars a share. UM, 342 00:19:38,359 --> 00:19:40,280 Speaker 1: so you're probably looking at something in the order of 343 00:19:40,320 --> 00:19:44,400 Speaker 1: maybe about a ten to fifteen percent correction, potentially depending 344 00:19:44,440 --> 00:19:46,719 Speaker 1: upon the company and depending upon how exposed they are 345 00:19:46,760 --> 00:19:48,960 Speaker 1: relative to their supply chains in China. I have to 346 00:19:48,960 --> 00:19:51,080 Speaker 1: wonder how people are gonna start talking about peak tech, 347 00:19:51,200 --> 00:19:53,359 Speaker 1: especially now. If you look at for example, Snap, one 348 00:19:53,400 --> 00:19:55,560 Speaker 1: of the hottest I p O s of last year, 349 00:19:56,280 --> 00:19:59,040 Speaker 1: declining shares reaching a low. You smile a little bit 350 00:19:59,080 --> 00:20:01,119 Speaker 1: because putting Apple ins Snap in the same sentence as 351 00:20:01,200 --> 00:20:03,960 Speaker 1: sort of a little bit ridiculous. But their chief strategy 352 00:20:03,960 --> 00:20:08,719 Speaker 1: officers leaving, who really helped, you know, create this company. 353 00:20:09,640 --> 00:20:11,199 Speaker 1: Do you think that's significant or do you think this 354 00:20:11,280 --> 00:20:13,000 Speaker 1: is just a company that's sort of out there? And 355 00:20:13,359 --> 00:20:15,920 Speaker 1: I mean Snap is a company that obviously Facebook wanted 356 00:20:15,960 --> 00:20:18,440 Speaker 1: to emulate all their features, uh, and I would argue 357 00:20:18,480 --> 00:20:20,639 Speaker 1: that there is greater competition taking place there. But in 358 00:20:20,720 --> 00:20:23,240 Speaker 1: terms of talking about peak tech, I mean the fact 359 00:20:23,320 --> 00:20:25,760 Speaker 1: that the stock market, now ten years after the collapse 360 00:20:25,760 --> 00:20:29,000 Speaker 1: of Lehman Brothers, is up off it's two thousand seven highs. 361 00:20:29,280 --> 00:20:31,480 Speaker 1: A big portion of that has been due to tech. 362 00:20:31,960 --> 00:20:34,280 Speaker 1: And to the extent if we're calling peak tech, are 363 00:20:34,280 --> 00:20:38,720 Speaker 1: we really calling peak stock market? Well, what's the answer. 364 00:20:38,800 --> 00:20:40,719 Speaker 1: It's something that we're going to have to contend with. 365 00:20:40,880 --> 00:20:43,840 Speaker 1: And the extent that the administration decides to take on 366 00:20:43,960 --> 00:20:47,120 Speaker 1: China and put the tech industry in the crosshairs certainly 367 00:20:47,119 --> 00:20:49,919 Speaker 1: puts the stock market at risk. And lord knows, the 368 00:20:49,960 --> 00:20:53,000 Speaker 1: President is someone who likes to trumpet the fact that 369 00:20:53,040 --> 00:20:56,040 Speaker 1: there are a new stock market high intended as your 370 00:20:56,119 --> 00:20:58,880 Speaker 1: eyes told me so. In other words, you do think 371 00:20:58,960 --> 00:21:00,920 Speaker 1: that should these tariffs go through, if I'm reading through 372 00:21:00,920 --> 00:21:03,440 Speaker 1: the through the lines, if these tariffs go through, there's 373 00:21:03,440 --> 00:21:06,119 Speaker 1: a good chance that tech will sell off in a 374 00:21:06,400 --> 00:21:09,040 Speaker 1: meaningful way and lead to sort the end of this 375 00:21:09,200 --> 00:21:11,600 Speaker 1: equity rally. I mean, there are other data data points 376 00:21:11,600 --> 00:21:13,640 Speaker 1: that are out there. Golden Sacks last week come out 377 00:21:13,640 --> 00:21:16,439 Speaker 1: and said that their bear market warning indicator is at 378 00:21:16,440 --> 00:21:19,399 Speaker 1: the highest level we've seen since nineteen. They said it 379 00:21:19,440 --> 00:21:21,960 Speaker 1: may not necessarily lead to an immediate crash, but expect 380 00:21:21,960 --> 00:21:25,600 Speaker 1: a flattening of returns from equities. Certainly, these tariffs are 381 00:21:25,600 --> 00:21:28,800 Speaker 1: going to contribute to that, David Garretty, always a pleasure 382 00:21:28,800 --> 00:21:30,359 Speaker 1: having you on. Thank you so much for being with me. 383 00:21:30,480 --> 00:21:34,240 Speaker 1: Thank you, David Garretty, chief executive of g v A Research. 384 00:21:50,040 --> 00:21:54,119 Speaker 1: Depending on how you measure the world of cryptocurrencies, they 385 00:21:54,160 --> 00:21:57,960 Speaker 1: have lost hundreds of billions of dollars of market value 386 00:21:58,359 --> 00:22:02,280 Speaker 1: over the past six seven eight months. Joining us now 387 00:22:02,280 --> 00:22:05,719 Speaker 1: to talk about this is Aaron Brown, columnist with Bloomberg Opinion, 388 00:22:05,760 --> 00:22:08,760 Speaker 1: also former managing director and head of Financial market Research 389 00:22:09,040 --> 00:22:12,800 Speaker 1: at a q R Capital Management. Aaron, I'm so pleased 390 00:22:12,800 --> 00:22:15,080 Speaker 1: you could join us today. I would love to get 391 00:22:15,080 --> 00:22:17,080 Speaker 1: your take on the sell off that we've been seeing 392 00:22:17,400 --> 00:22:20,800 Speaker 1: in cryptocurrencies. Do you think that this is sort of 393 00:22:21,359 --> 00:22:24,520 Speaker 1: marking the end of the fad of bitcoin and other 394 00:22:24,560 --> 00:22:28,360 Speaker 1: cryptocurrencies or it's just another hiccup that it will that 395 00:22:28,359 --> 00:22:30,399 Speaker 1: that will see in the rear view mirror in a 396 00:22:30,400 --> 00:22:34,160 Speaker 1: couple of years. Um. What's really puzzling about this sell 397 00:22:34,200 --> 00:22:36,640 Speaker 1: off is why it's a big news story, why we're 398 00:22:36,640 --> 00:22:40,160 Speaker 1: even having this interview. UH crypto fail from an intra 399 00:22:40,280 --> 00:22:43,520 Speaker 1: day high to an inter day low six last week, 400 00:22:44,160 --> 00:22:46,240 Speaker 1: and the average it does in an average week is 401 00:22:46,240 --> 00:22:49,399 Speaker 1: fourteen percent. This is a security with a six percent 402 00:22:50,040 --> 00:22:53,240 Speaker 1: daily standard deviation. So it's roughly six times as volatile 403 00:22:53,280 --> 00:22:56,240 Speaker 1: as the spire and we wouldn't be talking about the 404 00:22:56,320 --> 00:22:58,760 Speaker 1: SMP five Hendred going down two or three percent in 405 00:22:58,840 --> 00:23:01,080 Speaker 1: a week as a falling off a cliff for its 406 00:23:01,119 --> 00:23:03,840 Speaker 1: testing new loads. We're not testing new loads. For the 407 00:23:03,920 --> 00:23:07,960 Speaker 1: year we had bigger selloffs and lower prices every single month. 408 00:23:08,160 --> 00:23:10,720 Speaker 1: I'm sorry, we've had bigger selloffs every single month this year, 409 00:23:11,080 --> 00:23:13,720 Speaker 1: and we've had lower prices every year, every every month 410 00:23:13,760 --> 00:23:16,520 Speaker 1: since April um. I think this is a non story. 411 00:23:16,640 --> 00:23:19,639 Speaker 1: I think somehow people who were paying a lot of 412 00:23:19,640 --> 00:23:23,720 Speaker 1: attention to bitcoin and cryptocurrencies took a look and said, 413 00:23:23,720 --> 00:23:25,679 Speaker 1: my gosh, this is volatile. It's a lot more volatable 414 00:23:25,680 --> 00:23:28,600 Speaker 1: in the stock market. That's true. That's been truson as 415 00:23:28,640 --> 00:23:31,000 Speaker 1: they were introduced in two thousand nine. You know, I 416 00:23:31,280 --> 00:23:33,520 Speaker 1: think that you raise an interesting point, which is these 417 00:23:33,560 --> 00:23:36,720 Speaker 1: are volatile. They will continue to be volatile. Uh So 418 00:23:36,840 --> 00:23:38,920 Speaker 1: why do we talk about the volatility? And I think 419 00:23:38,920 --> 00:23:41,919 Speaker 1: that it comes as the Securities and Exchange Commission in 420 00:23:41,960 --> 00:23:47,280 Speaker 1: particular goes after an increasing number of crypto companies. I 421 00:23:47,320 --> 00:23:49,359 Speaker 1: want to just use a pretty broad term here, the 422 00:23:49,440 --> 00:23:54,880 Speaker 1: latest being that they temporarily suspended treading in the Bitcoin 423 00:23:54,960 --> 00:23:59,480 Speaker 1: Tracker one and ether Tracker one, these two cryptocurrencies on yesterday. 424 00:23:59,520 --> 00:24:02,400 Speaker 1: This was so this I think people are looking at 425 00:24:02,520 --> 00:24:07,639 Speaker 1: perhaps regulators taking a stronger stance with this. Mean, what 426 00:24:07,680 --> 00:24:11,800 Speaker 1: do you say about that? Yeah? I think, um, there 427 00:24:11,840 --> 00:24:13,960 Speaker 1: were two So there was that SEC. There was also 428 00:24:14,040 --> 00:24:19,320 Speaker 1: an SEC shutting down the Frost Penny stock pump and dump. 429 00:24:19,640 --> 00:24:22,680 Speaker 1: Neither of these actions have anything to do with cryptocurrencies 430 00:24:22,800 --> 00:24:26,119 Speaker 1: other than or anything essential. The penny stock was a 431 00:24:26,160 --> 00:24:28,760 Speaker 1: classic penny stock pump and dump. It just happened that 432 00:24:29,280 --> 00:24:32,639 Speaker 1: it was run by some people who were strong bitcoin bowls. 433 00:24:33,280 --> 00:24:35,879 Speaker 1: And the two funds that were shut down or suspended, 434 00:24:35,880 --> 00:24:38,159 Speaker 1: they weren't shut down had nothing to do with the 435 00:24:38,200 --> 00:24:40,840 Speaker 1: fact they had crypto h It had everything to do 436 00:24:40,920 --> 00:24:44,040 Speaker 1: with the fact that their legal documentation conflicted with their 437 00:24:44,080 --> 00:24:47,480 Speaker 1: offering documents, and the offering documents and legal documentation conflicted 438 00:24:47,520 --> 00:24:51,159 Speaker 1: with what the brokers were representing them as. This was 439 00:24:51,280 --> 00:24:54,280 Speaker 1: pure legal sloppiness on the part of the issuers hopefully 440 00:24:54,440 --> 00:24:57,680 Speaker 1: won't turn out to have been criminality, just sloppiness, and 441 00:24:57,800 --> 00:24:59,320 Speaker 1: it would have been shut down if they had been 442 00:24:59,359 --> 00:25:02,320 Speaker 1: olding goal their stocks or anything else. It was doing 443 00:25:02,440 --> 00:25:05,960 Speaker 1: was pure infect What's amazing about pet story is that 444 00:25:06,040 --> 00:25:08,840 Speaker 1: these things created since two thousands fifteen and got up 445 00:25:08,840 --> 00:25:12,400 Speaker 1: an as deck uh without somebody actually reading and noticing 446 00:25:12,400 --> 00:25:16,520 Speaker 1: these major discrepancies in the documentation. I guess that the 447 00:25:16,600 --> 00:25:19,480 Speaker 1: other thing that sort of got my attention this morning 448 00:25:19,480 --> 00:25:21,399 Speaker 1: and why I did sort of pay a little bit 449 00:25:21,440 --> 00:25:25,440 Speaker 1: more notice to the sell off was that the founder 450 00:25:25,560 --> 00:25:29,719 Speaker 1: co founder of Ethereum of Metallic Boudin, was speaking with 451 00:25:29,720 --> 00:25:33,240 Speaker 1: Bloomberg and said, you know, we may have seen the 452 00:25:33,359 --> 00:25:36,760 Speaker 1: days of explosive growth in the blockchain industry. We may 453 00:25:36,760 --> 00:25:39,480 Speaker 1: have seen those already, and going forward, this is going 454 00:25:39,520 --> 00:25:42,800 Speaker 1: to be a much slower grind with a lot less hype. 455 00:25:43,320 --> 00:25:46,560 Speaker 1: And you know, how does that affect an industry that 456 00:25:46,640 --> 00:25:50,919 Speaker 1: has been driven by hype? Um, Okay, the industry is 457 00:25:50,920 --> 00:25:53,360 Speaker 1: not driven by hypes. I want to correct that the 458 00:25:53,400 --> 00:25:57,919 Speaker 1: actual code base and UH and and UH data that 459 00:25:58,000 --> 00:26:00,720 Speaker 1: are driving the blockchain that has been grown going steadily 460 00:26:00,720 --> 00:26:04,240 Speaker 1: and quality and quantity by developers who are not looking 461 00:26:04,280 --> 00:26:08,000 Speaker 1: at the daily price charts. It's true, two thousands seventeen 462 00:26:08,119 --> 00:26:09,960 Speaker 1: was a year of hype, and we've had we had 463 00:26:10,000 --> 00:26:13,800 Speaker 1: them before. Also in two thousand twelve and two thousand thirteen. UM. 464 00:26:13,840 --> 00:26:16,600 Speaker 1: And the hype was driven, in my opinion, primarily by 465 00:26:16,640 --> 00:26:20,479 Speaker 1: the idea that institutional investors and retail investors were just 466 00:26:20,640 --> 00:26:23,720 Speaker 1: waiting for some regulatory and infrastructure changes and they would 467 00:26:23,720 --> 00:26:27,240 Speaker 1: pour billions and billions, hundreds of billions of dollars into crypto. 468 00:26:27,680 --> 00:26:30,240 Speaker 1: And I turned on to be true. The legal barriers 469 00:26:30,280 --> 00:26:35,040 Speaker 1: were uh fixed, and the infrastructures built, and nobody came 470 00:26:35,080 --> 00:26:37,639 Speaker 1: to put in any anywhere near that kind of money. 471 00:26:38,000 --> 00:26:40,320 Speaker 1: But that has nothing to do with the long term 472 00:26:40,560 --> 00:26:43,679 Speaker 1: economic case for bitcoin, the five ten year idea that 473 00:26:43,760 --> 00:26:46,440 Speaker 1: cryptocurrencies are going to be a very important part of 474 00:26:46,480 --> 00:26:50,760 Speaker 1: the economy to come. UM. The ethereum comments that that 475 00:26:51,600 --> 00:26:55,600 Speaker 1: we're not going to see another thousand percent increase. Uh, 476 00:26:55,640 --> 00:26:58,760 Speaker 1: that's you know, not too unreasonable giving the size of 477 00:26:58,760 --> 00:27:01,200 Speaker 1: the crypto market. UM. I think that's what if you're 478 00:27:01,200 --> 00:27:03,560 Speaker 1: a bull, you're saying, okay, we got another thousand percent tog, 479 00:27:03,680 --> 00:27:06,480 Speaker 1: we got another ten time increase, and that would bring 480 00:27:06,560 --> 00:27:10,120 Speaker 1: crypto to sort of what seems like a reasonable part 481 00:27:10,119 --> 00:27:12,880 Speaker 1: of the economy on fundamental grounds. UM. So if you're 482 00:27:12,880 --> 00:27:15,840 Speaker 1: hoping for ten thousand or a hundred thousand percent return 483 00:27:15,520 --> 00:27:18,320 Speaker 1: and that's probably out of the question, but it always 484 00:27:18,359 --> 00:27:23,159 Speaker 1: likes Aaron Brown. Love having your real speak. Thank you 485 00:27:23,200 --> 00:27:25,399 Speaker 1: so much for joining me today. Aaron Brown is a 486 00:27:25,400 --> 00:27:28,640 Speaker 1: columnist for Bloomberg Opinion. He's also a former managing director 487 00:27:28,720 --> 00:27:30,920 Speaker 1: and head of Financial market Research at a q R 488 00:27:31,000 --> 00:27:35,199 Speaker 1: Capital Management. Helping to put the bitcoin sell off into 489 00:27:35,359 --> 00:27:39,520 Speaker 1: some perspective, also bringing down a whole bunch of other 490 00:27:39,680 --> 00:27:43,159 Speaker 1: crypto assets with it. Definitely a volatile asset class that 491 00:27:43,240 --> 00:27:50,600 Speaker 1: continues to see a lot of volatility. Thanks for listening 492 00:27:50,680 --> 00:27:53,560 Speaker 1: to the Bloomberg P and L podcast. You can subscribe 493 00:27:53,600 --> 00:27:57,160 Speaker 1: and listen to interviews at Apple Podcasts, SoundCloud, or whatever 494 00:27:57,240 --> 00:28:00,760 Speaker 1: podcast platform you prefer. I'm pim Fox. I'm on Twitter 495 00:28:01,000 --> 00:28:04,520 Speaker 1: at pim Fox. I'm on Twitter at Lisa Abramo. It's 496 00:28:04,560 --> 00:28:07,600 Speaker 1: one before the podcast. You can always catch us worldwide 497 00:28:07,640 --> 00:28:08,560 Speaker 1: on Bloomberg Radio.