1 00:00:01,800 --> 00:00:04,440 Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm 2 00:00:04,440 --> 00:00:07,280 Speaker 1: Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 3 00:00:07,280 --> 00:00:09,799 Speaker 1: you the latest news from the world of business and finance, 4 00:00:09,840 --> 00:00:13,640 Speaker 1: plus technology, politics, economics, all partnising the power of Business 5 00:00:13,640 --> 00:00:17,119 Speaker 1: Week reporters and editors, not to mention our journalists and 6 00:00:17,160 --> 00:00:19,599 Speaker 1: analyst in more than one and twenty countries. You can 7 00:00:19,640 --> 00:00:23,239 Speaker 1: download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot Com. 8 00:00:23,400 --> 00:00:25,160 Speaker 1: You can also listen to our radio show at two 9 00:00:25,160 --> 00:00:27,840 Speaker 1: pm Eastern Time on Bloomberg Radio, or watch us on 10 00:00:27,880 --> 00:00:32,960 Speaker 1: YouTube search Bloomberg Global News Amazon, which, as you know, 11 00:00:33,040 --> 00:00:35,920 Speaker 1: as we've been reporting shocking Wall Street projecting the slowest 12 00:00:35,920 --> 00:00:38,600 Speaker 1: holiday growth quarter in the company's history. We've seen the 13 00:00:38,640 --> 00:00:42,000 Speaker 1: stock plunge big time last night and the trade carrying 14 00:00:42,080 --> 00:00:46,080 Speaker 1: over into the regular day. Today. Amazade's mark market value 15 00:00:46,080 --> 00:00:48,760 Speaker 1: set to fall below a trillion dollars after its disappointing 16 00:00:48,800 --> 00:00:51,160 Speaker 1: earnings report. So let's get to it with our own 17 00:00:51,320 --> 00:00:54,080 Speaker 1: Matt Day, Matt Day's technology reporter for Bloomberg News, who 18 00:00:54,160 --> 00:00:56,400 Speaker 1: joins us via zoom from Seattle. Matt, you've had close 19 00:00:56,440 --> 00:00:58,760 Speaker 1: to twenty four hours to dig into this to report 20 00:00:58,800 --> 00:01:01,800 Speaker 1: on this the slowest ever growth for the company's holiday quarter. 21 00:01:01,800 --> 00:01:03,840 Speaker 1: I mean, that's the part that really sticks out to me. 22 00:01:04,160 --> 00:01:05,959 Speaker 1: What is it? Is this more of an Amazon story? 23 00:01:06,000 --> 00:01:08,920 Speaker 1: Is it more of an economy story? I think it's both. 24 00:01:09,319 --> 00:01:11,320 Speaker 1: Amazon has been trying to rein in costs all year. 25 00:01:11,840 --> 00:01:13,880 Speaker 1: The last report show they didn't really do that, and 26 00:01:13,880 --> 00:01:15,840 Speaker 1: I think it would be of a analyst this morning. 27 00:01:15,840 --> 00:01:17,720 Speaker 1: I think it was who sounded the alarm and said, listen, 28 00:01:17,720 --> 00:01:20,280 Speaker 1: if Amazon is projecting this week holiday quarter into the 29 00:01:20,319 --> 00:01:23,520 Speaker 1: can row as lowest two, then we might already be intercession. 30 00:01:23,640 --> 00:01:25,280 Speaker 1: Um that that on its own as an indication that, 31 00:01:25,360 --> 00:01:27,280 Speaker 1: you know, it's not just an Amazon story with something 32 00:01:27,560 --> 00:01:30,760 Speaker 1: going wrong in the wider economy. Having said that, what 33 00:01:30,959 --> 00:01:34,240 Speaker 1: are though, the Amazon specific issues, Because there are some, right, 34 00:01:35,000 --> 00:01:37,880 Speaker 1: Oh there are. Yeah. They when the pandemic hit and 35 00:01:37,920 --> 00:01:40,399 Speaker 1: everybody you know went home and started shopping online for 36 00:01:40,400 --> 00:01:44,360 Speaker 1: for everything by choice or by need, Amazon started spending 37 00:01:44,440 --> 00:01:47,319 Speaker 1: huge new warehouses. You know, they were still building new 38 00:01:47,400 --> 00:01:50,320 Speaker 1: data centers for their cloud computing business, and that worked 39 00:01:50,320 --> 00:01:53,000 Speaker 1: out for you know, called eighteen months late last year, 40 00:01:53,040 --> 00:01:55,120 Speaker 1: when demand started to dry up, they realized they had 41 00:01:55,160 --> 00:01:56,920 Speaker 1: way too much based way too many people, and so 42 00:01:56,960 --> 00:02:00,200 Speaker 1: they've been in cost cutting mode basically all year long. UM. 43 00:02:00,200 --> 00:02:02,600 Speaker 1: We've seen recently that spread to their corporate ranks as well. 44 00:02:02,640 --> 00:02:05,320 Speaker 1: They're starting to wind down some of their marginal products, 45 00:02:05,360 --> 00:02:06,920 Speaker 1: stuff that they didn't think was going to make it big. 46 00:02:06,960 --> 00:02:09,960 Speaker 1: They shut down their telehealth service. UM. So there's still 47 00:02:10,000 --> 00:02:11,840 Speaker 1: you know, investing for the long term as Amazon like 48 00:02:11,919 --> 00:02:14,560 Speaker 1: Sterm mind folks, but they definitely overbuilt based on what 49 00:02:14,600 --> 00:02:18,639 Speaker 1: they saw in What about that profit engine known as 50 00:02:18,680 --> 00:02:22,040 Speaker 1: Amazon Web Services a WS. What did we learned about 51 00:02:22,040 --> 00:02:25,080 Speaker 1: the company in terms of how cloud growth is doing, 52 00:02:25,200 --> 00:02:28,400 Speaker 1: especially in the context of what Microsoft reported earlier this 53 00:02:28,440 --> 00:02:32,239 Speaker 1: week as Microsoft given warning and Amazon gave maybe even 54 00:02:32,240 --> 00:02:36,240 Speaker 1: bigger one. Growth is great for a business that prints money, 55 00:02:36,280 --> 00:02:38,880 Speaker 1: but um, it is the lowest ever since Amazon began 56 00:02:38,960 --> 00:02:43,360 Speaker 1: breaking out aws back in One worrying thing for analysts 57 00:02:43,400 --> 00:02:47,480 Speaker 1: on the call yesterday now, Amazon CFO said that some 58 00:02:47,560 --> 00:02:50,000 Speaker 1: customers were asking for help cutting their bills. Um, and 59 00:02:50,040 --> 00:02:52,320 Speaker 1: some pretty dour chatter about what businesses we're doing with 60 00:02:52,320 --> 00:02:54,120 Speaker 1: cloud spending. We didn't hear much of that at all. 61 00:02:54,240 --> 00:02:56,680 Speaker 1: During the pandemic. Cloud spending held up really well. So 62 00:02:56,720 --> 00:02:59,280 Speaker 1: I suggest that this is something new for awus. Wait, 63 00:02:59,320 --> 00:03:01,040 Speaker 1: am I crazy and thinking that we could be talking 64 00:03:01,040 --> 00:03:04,000 Speaker 1: about Microsoft right now? Didn't Microsoft essentially say the exact 65 00:03:04,040 --> 00:03:06,919 Speaker 1: same thing. Yeah, exactly right. And that's enough enough to 66 00:03:07,320 --> 00:03:09,120 Speaker 1: compound to worry about a business that you know, people 67 00:03:09,120 --> 00:03:10,800 Speaker 1: have been saying it's going to grow forever and throwing 68 00:03:10,800 --> 00:03:13,560 Speaker 1: out a bunch of ludicrous figures on exactly how profit 69 00:03:13,639 --> 00:03:16,120 Speaker 1: is going to be for Microsoft and Amazon. Amazon said 70 00:03:16,160 --> 00:03:18,440 Speaker 1: they started seeing a lot of softness and their enterprise 71 00:03:18,440 --> 00:03:20,280 Speaker 1: customers in the second half the third quarter, and then 72 00:03:20,280 --> 00:03:23,160 Speaker 1: it's continued this this quarter. You know it's interesting too, 73 00:03:23,160 --> 00:03:25,560 Speaker 1: And I know you wrote and reported earlier that you know, 74 00:03:25,639 --> 00:03:27,840 Speaker 1: we did see actually shares of Amazon and the market 75 00:03:27,880 --> 00:03:31,600 Speaker 1: capt go below a trillion. Amazon shares they're trading definitely 76 00:03:31,600 --> 00:03:33,720 Speaker 1: off their worst levels of this session. In fact, it's 77 00:03:33,720 --> 00:03:36,680 Speaker 1: just the biggest drop since Mayo. So it's not like 78 00:03:37,120 --> 00:03:40,120 Speaker 1: we haven't seen it in years. If you will, um, so, 79 00:03:40,200 --> 00:03:41,840 Speaker 1: how do you I don't know, how do we spend 80 00:03:41,880 --> 00:03:43,720 Speaker 1: this forward? Matt? How do we need to be thinking 81 00:03:43,760 --> 00:03:45,840 Speaker 1: about this? Because I gotta say, I keep saying to 82 00:03:45,880 --> 00:03:48,280 Speaker 1: Tim all week, you know my world is I'm ordering 83 00:03:48,320 --> 00:03:53,520 Speaker 1: on Amazon, I'm watching Amazon Prime. I use lots of 84 00:03:53,520 --> 00:03:57,280 Speaker 1: Apple products and I Google everything, so like that's my world. 85 00:03:57,400 --> 00:04:01,080 Speaker 1: So these three companies, you know, and Amazon and particularly 86 00:04:01,080 --> 00:04:03,280 Speaker 1: so entrenched in our worlds, are many of our worlds. 87 00:04:04,720 --> 00:04:06,720 Speaker 1: Long term, Amazon is probably gonna be fine. They're not 88 00:04:06,760 --> 00:04:08,920 Speaker 1: gonna go out of business. You know, some analysts this morning, 89 00:04:08,920 --> 00:04:12,240 Speaker 1: are you trying to calm that drop we saw after 90 00:04:12,280 --> 00:04:14,680 Speaker 1: hours last night? You've seen it. It bounts this morning. 91 00:04:14,720 --> 00:04:17,520 Speaker 1: As you said, Um, They're advertising business is still growing. 92 00:04:17,560 --> 00:04:20,520 Speaker 1: They're probably still going to take share there because they're 93 00:04:20,520 --> 00:04:22,600 Speaker 1: just so close to people's wallets. Right. You know, Google 94 00:04:22,640 --> 00:04:25,080 Speaker 1: and Facebook have an idea what you buy. Amazon knows 95 00:04:25,080 --> 00:04:26,960 Speaker 1: exactly what you buy. So their ad business is still 96 00:04:27,000 --> 00:04:29,240 Speaker 1: a bright spot form cloud growth. Even if it's only 97 00:04:30,200 --> 00:04:32,360 Speaker 1: that's still a very lucrative business that's got a long 98 00:04:32,360 --> 00:04:35,000 Speaker 1: way to goo. Um, the long term outlook is is 99 00:04:35,040 --> 00:04:36,480 Speaker 1: okay for them as long as they can get their 100 00:04:36,520 --> 00:04:39,760 Speaker 1: costs under control. Where analysts most bullish when it comes 101 00:04:39,760 --> 00:04:42,800 Speaker 1: to what Amazon can do, is it that ad business 102 00:04:42,880 --> 00:04:45,320 Speaker 1: because I don't know, I mean, do Apple's I d 103 00:04:45,480 --> 00:04:48,479 Speaker 1: f A changes affect that it doesn't seem like it's 104 00:04:48,480 --> 00:04:51,040 Speaker 1: a similar type of ad business because people you know, 105 00:04:51,080 --> 00:04:52,839 Speaker 1: are going there searching for what to buy, and then 106 00:04:52,880 --> 00:04:55,479 Speaker 1: they buy the product that they search for. Yeah, exactly, 107 00:04:55,520 --> 00:04:57,640 Speaker 1: definitely a different story than than kind of the the 108 00:04:57,720 --> 00:05:00,480 Speaker 1: gut punch to Facebook that that change was ads is 109 00:05:00,600 --> 00:05:03,360 Speaker 1: is definitely spot People are real optimistic about cloud is too. 110 00:05:03,400 --> 00:05:05,479 Speaker 1: I mean, you've seen Amazon trade much more like a 111 00:05:05,520 --> 00:05:08,440 Speaker 1: tech stock than a retail stock in the last really 112 00:05:08,520 --> 00:05:11,000 Speaker 1: since they reported AWS results for the first time in 113 00:05:11,800 --> 00:05:14,200 Speaker 1: so clouds and other obvious area where people are really 114 00:05:14,800 --> 00:05:16,560 Speaker 1: I think in the long term, people still think that, 115 00:05:16,640 --> 00:05:20,040 Speaker 1: you know, their retail business can show profits more than 116 00:05:20,080 --> 00:05:23,080 Speaker 1: a half historically, right, Let's get right, Matt, is there 117 00:05:23,080 --> 00:05:24,960 Speaker 1: at some point we look at these companies that you know, 118 00:05:25,440 --> 00:05:27,159 Speaker 1: I mean Amazon for a long time, right, we were 119 00:05:27,200 --> 00:05:28,920 Speaker 1: just waiting for it to turn a profit, and there's 120 00:05:28,960 --> 00:05:31,000 Speaker 1: a lot of investing, and finally it did. But at 121 00:05:31,040 --> 00:05:33,680 Speaker 1: some point what we consider maybe growth companies, all of 122 00:05:33,720 --> 00:05:35,919 Speaker 1: a sudden, they still grow, they just don't grow at 123 00:05:35,960 --> 00:05:38,680 Speaker 1: the dramatic rates. They become these behemoths, you know, in 124 00:05:38,720 --> 00:05:41,239 Speaker 1: their industry, and moving the needle gets harder and harder. 125 00:05:41,360 --> 00:05:44,719 Speaker 1: Is that fair to say or maybe not? I think 126 00:05:44,720 --> 00:05:47,520 Speaker 1: it's definitely something worth watching for Amazon now, like have 127 00:05:47,680 --> 00:05:50,200 Speaker 1: we hit peak? Amazon was kind of the crazy growth 128 00:05:50,200 --> 00:05:52,520 Speaker 1: we saw are in pandemic? Enought to call it and say, listen, 129 00:05:52,800 --> 00:05:54,880 Speaker 1: this might be a different company now. One of the 130 00:05:54,960 --> 00:05:57,760 Speaker 1: signs of that yesterday analysts were asking on the conference 131 00:05:57,760 --> 00:06:00,680 Speaker 1: call after earnings when Amazon might stop investing in new 132 00:06:00,720 --> 00:06:02,960 Speaker 1: data centers. That is that is a crazy bit of 133 00:06:03,000 --> 00:06:05,640 Speaker 1: costume and the suggestion that they should slow down growth 134 00:06:05,680 --> 00:06:07,760 Speaker 1: on you know, it's thought to be a potential trillion 135 00:06:07,800 --> 00:06:11,520 Speaker 1: dollar market opportunity, right, Um, yeah, definitely some some caution 136 00:06:11,560 --> 00:06:13,200 Speaker 1: out there, right everything, And I think about what Mike 137 00:06:13,279 --> 00:06:16,159 Speaker 1: McKee talked about, like was it some distribution facilities that 138 00:06:16,440 --> 00:06:18,440 Speaker 1: it was in the latest growth data that you're not 139 00:06:18,480 --> 00:06:20,600 Speaker 1: seeing as much of it as happening, So you do 140 00:06:20,600 --> 00:06:23,800 Speaker 1: wonder about this, right the retrenchment. Hey, Matt Day, thank 141 00:06:23,800 --> 00:06:26,480 Speaker 1: you so much. Matt is technology reporter at Bloomberg News. 142 00:06:26,560 --> 00:06:31,320 Speaker 1: Joining us via zoom from Seattle. You're listening to Bloomberg 143 00:06:31,400 --> 00:06:35,080 Speaker 1: Business Week with Carol Messer and Bloomberg Quick Takes Tim 144 00:06:35,160 --> 00:06:39,400 Speaker 1: Stinovic on Bloomberg Radio. For just the second time ever, 145 00:06:39,520 --> 00:06:42,919 Speaker 1: an entire issue of Bloomberg Business Week magazine is dedicated 146 00:06:42,960 --> 00:06:45,320 Speaker 1: to a single topic from a single writer. You might 147 00:06:45,320 --> 00:06:48,200 Speaker 1: recall Paul Ford's what is Code? That was the first. Well, 148 00:06:48,200 --> 00:06:51,719 Speaker 1: this time around it is Bloomberg Opinions Matt Levin giving 149 00:06:51,760 --> 00:06:54,919 Speaker 1: us forty thou words on digital assets, a primer on 150 00:06:54,960 --> 00:06:57,599 Speaker 1: the innovation that could forever change the way we transact 151 00:06:57,600 --> 00:06:59,480 Speaker 1: and how we view the world of finance. It is 152 00:06:59,560 --> 00:07:02,479 Speaker 1: called the Crypto Story, Your guide to what it does, 153 00:07:02,520 --> 00:07:04,840 Speaker 1: what it means, and why it still matters. Matt, as 154 00:07:04,880 --> 00:07:07,760 Speaker 1: you know, covers finance. He was an editor of deal Breaker, 155 00:07:07,800 --> 00:07:10,320 Speaker 1: an investment banker at Goldman, Sachs and m and a 156 00:07:10,400 --> 00:07:12,600 Speaker 1: lawyer at Wachtell Lipton, a clerk for the U S 157 00:07:12,640 --> 00:07:14,880 Speaker 1: Court of Appeals for the Third Circuit. He joins us 158 00:07:14,960 --> 00:07:17,160 Speaker 1: via zoom from New York City, and he joins us 159 00:07:17,160 --> 00:07:20,040 Speaker 1: along with the editor of Bloomberg Business Week magazine, Joel 160 00:07:20,040 --> 00:07:23,360 Speaker 1: whoever he is in our interactive broker studio. So, UM, 161 00:07:23,520 --> 00:07:24,960 Speaker 1: we want to get to Matt, but tell us a 162 00:07:25,000 --> 00:07:27,720 Speaker 1: little bit about how this all came to be UM 163 00:07:27,800 --> 00:07:32,680 Speaker 1: So earlier UM in the year. Over the summer UM, 164 00:07:32,880 --> 00:07:37,120 Speaker 1: we started watching Crypto Winter unfold and we started to 165 00:07:37,120 --> 00:07:39,880 Speaker 1: have several conversations that led to a big conversation where 166 00:07:39,880 --> 00:07:42,120 Speaker 1: it was like, Hey, what are all the various things 167 00:07:42,200 --> 00:07:45,200 Speaker 1: we want to try and put in motion? Um, sooner 168 00:07:45,280 --> 00:07:48,360 Speaker 1: rather than later. And out of that little huddle UM 169 00:07:48,720 --> 00:07:53,120 Speaker 1: on the afternoon of June. Uh. In the middle of 170 00:07:53,160 --> 00:07:55,800 Speaker 1: that meeting, actually, um, the number one thing that everybody 171 00:07:55,800 --> 00:07:58,240 Speaker 1: wanted was how do we get Matt Levin to write 172 00:07:58,320 --> 00:08:01,760 Speaker 1: something about crypto? And so I wrote in the middle 173 00:08:01,760 --> 00:08:05,000 Speaker 1: of that meeting this note, Hey there to Matt, Hey, 174 00:08:05,000 --> 00:08:07,840 Speaker 1: there any chance you'd like to write like twenty words 175 00:08:07,880 --> 00:08:11,440 Speaker 1: for us sometime this summer. I could go approximately eighteen 176 00:08:11,480 --> 00:08:15,760 Speaker 1: thousand words shorter or longer as you prefer. And built 177 00:08:15,800 --> 00:08:17,880 Speaker 1: into that was this insurance policy that maybe if I 178 00:08:17,920 --> 00:08:21,440 Speaker 1: couldn't get twenty or forty or sixty, like, maybe I 179 00:08:21,480 --> 00:08:25,000 Speaker 1: could get two thousand um. Uh. And And it took 180 00:08:25,040 --> 00:08:28,440 Speaker 1: him about a week to reply um. And in typical 181 00:08:28,800 --> 00:08:32,160 Speaker 1: uh Matt fashion, he said, UM, I have not replied 182 00:08:32,160 --> 00:08:36,000 Speaker 1: to this, sorry because there is some chance like it 183 00:08:36,000 --> 00:08:37,559 Speaker 1: feels like a bad idea, but I kind of want 184 00:08:37,600 --> 00:08:41,320 Speaker 1: to what were you thinking? Um? Uh. So that that 185 00:08:41,480 --> 00:08:43,520 Speaker 1: flirting led to where we are now. We have this 186 00:08:43,559 --> 00:08:47,720 Speaker 1: amazing issue, UM, which is totally just a testament uh 187 00:08:47,760 --> 00:08:50,640 Speaker 1: to Matt and um, he and I were talking earlier 188 00:08:50,720 --> 00:08:54,079 Speaker 1: this week with look, we all a doormat, we love 189 00:08:54,160 --> 00:08:57,880 Speaker 1: his newsletter, we love money stuff. His Elon coverage has 190 00:08:57,920 --> 00:09:01,520 Speaker 1: been sensational, and um, you know, had had any of 191 00:09:01,559 --> 00:09:04,440 Speaker 1: this madness with Elon transpired any sooner, I don't think 192 00:09:04,440 --> 00:09:06,760 Speaker 1: Matt would have actually done this. So so thank you 193 00:09:06,800 --> 00:09:09,800 Speaker 1: for you know, um uh, you know, not having that chaos. 194 00:09:09,880 --> 00:09:12,880 Speaker 1: But Matt, what was the thing when when we started flirting? 195 00:09:12,920 --> 00:09:15,480 Speaker 1: What was the thing that you felt was the spark 196 00:09:15,559 --> 00:09:20,120 Speaker 1: that want you made you want to do this? Uh? 197 00:09:20,200 --> 00:09:22,120 Speaker 1: I mean the thing that I really wanted to do 198 00:09:22,200 --> 00:09:24,880 Speaker 1: is that, you know, crypto feels like a big enough 199 00:09:24,920 --> 00:09:27,760 Speaker 1: subject that it could support an entire magazine issue, but 200 00:09:27,800 --> 00:09:30,400 Speaker 1: it's also like a small enough subject that it feels 201 00:09:30,400 --> 00:09:33,360 Speaker 1: like like one person could almost get their mind around 202 00:09:33,360 --> 00:09:37,800 Speaker 1: all of it and then like type sequentially an explanation 203 00:09:37,840 --> 00:09:39,720 Speaker 1: of all of it. So you can sort of start 204 00:09:39,720 --> 00:09:42,920 Speaker 1: from the first principles and there's like a real obvious 205 00:09:42,960 --> 00:09:45,880 Speaker 1: starting point where the Stosia knocking about a bitcoin white 206 00:09:45,880 --> 00:09:47,880 Speaker 1: paper is like, hey, I've got this idea for crypto, 207 00:09:48,200 --> 00:09:50,640 Speaker 1: and then everything more or less comes out of that, 208 00:09:51,040 --> 00:09:52,960 Speaker 1: So you can kind of start from the beginning and 209 00:09:53,400 --> 00:09:56,320 Speaker 1: build from the basic concepts up to all of the 210 00:09:56,360 --> 00:09:59,280 Speaker 1: complicated stuff that exists today. And that just seemed like 211 00:09:59,280 --> 00:10:03,080 Speaker 1: a really fun ellens to try to uh cover everything. 212 00:10:03,240 --> 00:10:05,920 Speaker 1: And of course in the end, long though it is, 213 00:10:06,679 --> 00:10:09,360 Speaker 1: it doesn't cover everything, but like it felt like a 214 00:10:09,360 --> 00:10:15,600 Speaker 1: good thing to try. Um So the title, um, it 215 00:10:15,720 --> 00:10:20,040 Speaker 1: started as me saying, um, what what is crypto? Which 216 00:10:20,160 --> 00:10:22,600 Speaker 1: you know, was loosely inspired by the Paul Ford thing. 217 00:10:22,640 --> 00:10:26,559 Speaker 1: That was the closest approximation that I could come up with. Um, 218 00:10:26,640 --> 00:10:31,839 Speaker 1: what was your title, Matt? And and why uh, I 219 00:10:31,840 --> 00:10:33,920 Speaker 1: wouldn't say I had a title. I had a working title, 220 00:10:34,520 --> 00:10:38,600 Speaker 1: joking working title, which was what was crypto? Because we 221 00:10:38,600 --> 00:10:40,840 Speaker 1: were sort of joking about the fact that that in 222 00:10:40,880 --> 00:10:43,880 Speaker 1: some ways, you know, it feels a little silly to 223 00:10:43,920 --> 00:10:47,240 Speaker 1: do this during crypto winter, although actually I think that 224 00:10:47,360 --> 00:10:49,840 Speaker 1: ended up being helpful because you're not kind of covering 225 00:10:49,840 --> 00:10:52,480 Speaker 1: the market moves at the moment, but you know, you're 226 00:10:52,520 --> 00:10:54,520 Speaker 1: kind of taking a step back and looking at the 227 00:10:54,559 --> 00:10:56,880 Speaker 1: sort of broad sweep of crypto. What's kind of cool. 228 00:10:56,960 --> 00:10:59,120 Speaker 1: As I have to say, Matt um loved it. I've 229 00:10:59,120 --> 00:11:00,720 Speaker 1: read it. I've had to read read things a couple 230 00:11:00,760 --> 00:11:03,400 Speaker 1: of times because I feel like though for the first time, 231 00:11:03,440 --> 00:11:06,400 Speaker 1: I understand so much of crypto, and I realized how 232 00:11:06,440 --> 00:11:09,800 Speaker 1: many things I probably was either using terminology wrong and 233 00:11:09,840 --> 00:11:13,640 Speaker 1: I just didn't have an understanding. So thank you for that, um, 234 00:11:13,679 --> 00:11:15,520 Speaker 1: And I do think in terms of crypto, love it, 235 00:11:15,559 --> 00:11:18,160 Speaker 1: hate it you right, In the past fourteen years, crypto 236 00:11:18,200 --> 00:11:22,120 Speaker 1: has built a whole financial system from scratch. Whether it 237 00:11:22,120 --> 00:11:26,880 Speaker 1: works or not, that's kind of cool, isn't it. Yeah, 238 00:11:26,960 --> 00:11:29,040 Speaker 1: I mean I like, you know, as I say in 239 00:11:29,080 --> 00:11:31,440 Speaker 1: the piece, I come to this from finance, and ah, 240 00:11:32,320 --> 00:11:34,280 Speaker 1: my interest is not so much I'm like, wh're re 241 00:11:34,400 --> 00:11:37,600 Speaker 1: engineering the internet in society. My interest is, like they 242 00:11:37,640 --> 00:11:41,440 Speaker 1: do cool financial stuff. And I think that for me, 243 00:11:41,520 --> 00:11:44,160 Speaker 1: watching crypto has been fascinating because it's a mix of 244 00:11:44,200 --> 00:11:49,400 Speaker 1: like very clever essentially financial engineers and like engineer engineers 245 00:11:49,760 --> 00:11:54,640 Speaker 1: who are who are looking at the problems of existing 246 00:11:54,679 --> 00:11:57,640 Speaker 1: finance and saying we have a better idea, but also 247 00:11:57,679 --> 00:12:01,240 Speaker 1: watching people who sort of like our twenty three and 248 00:12:01,320 --> 00:12:04,400 Speaker 1: like now to program a computer and like I've never 249 00:12:04,440 --> 00:12:07,720 Speaker 1: heard of the two financial crisis and are like just 250 00:12:08,040 --> 00:12:10,680 Speaker 1: doing it all over again and making the same mistakes 251 00:12:10,679 --> 00:12:13,839 Speaker 1: and kind of hilarious fashion. So you get you get both, right, 252 00:12:13,920 --> 00:12:17,280 Speaker 1: you get like real like clever financial innovations and also 253 00:12:17,400 --> 00:12:20,640 Speaker 1: like disasters you can see coming a mile away. So 254 00:12:20,720 --> 00:12:22,800 Speaker 1: let's talk about some the financial innovations before we talk 255 00:12:22,840 --> 00:12:25,760 Speaker 1: about some of the disasters. To what extent have you 256 00:12:25,840 --> 00:12:29,400 Speaker 1: seen the financial innovations actually make their way into the 257 00:12:29,400 --> 00:12:34,120 Speaker 1: traditional finance system if at all, uh, not too much. 258 00:12:34,160 --> 00:12:36,440 Speaker 1: You know, you see banks announcing we're going to do 259 00:12:36,520 --> 00:12:39,840 Speaker 1: a blockchain project, right and like any time to make 260 00:12:39,880 --> 00:12:41,200 Speaker 1: fun of that. I got an email from someone at 261 00:12:41,200 --> 00:12:44,120 Speaker 1: a bank being like, well, we actually deployed a test 262 00:12:44,160 --> 00:12:46,800 Speaker 1: example of our blockchain products. But in general, like I 263 00:12:46,840 --> 00:12:51,360 Speaker 1: don't think that you know, the innovations of decentralized finance 264 00:12:51,400 --> 00:12:54,040 Speaker 1: have come to a stock exchange near you. But what 265 00:12:54,160 --> 00:12:57,520 Speaker 1: you have seen is people from traditional finance leaving to 266 00:12:57,559 --> 00:13:00,440 Speaker 1: go to crypto now. That was largely feature of the 267 00:13:00,480 --> 00:13:02,439 Speaker 1: crypto bullmarket, and some of them are kind of creeping 268 00:13:02,480 --> 00:13:04,920 Speaker 1: back to traditional finance now. But I do think it 269 00:13:05,000 --> 00:13:07,240 Speaker 1: was also a testament like the interestingness of that where 270 00:13:07,240 --> 00:13:10,880 Speaker 1: like if you felt like you were uh you wanted 271 00:13:10,920 --> 00:13:13,200 Speaker 1: to build stuff in finance where you wanted to like 272 00:13:13,320 --> 00:13:16,600 Speaker 1: kind of you know, you saw a problem in the 273 00:13:16,640 --> 00:13:19,520 Speaker 1: existing infrastructure and you wanted to make something different. The 274 00:13:19,960 --> 00:13:22,400 Speaker 1: place where that was easiest to do, where you had 275 00:13:22,400 --> 00:13:24,800 Speaker 1: the blankest canvas, was in crypto, and so a lot 276 00:13:24,800 --> 00:13:27,600 Speaker 1: of smart people did leave their you know, hedge fund 277 00:13:27,679 --> 00:13:31,560 Speaker 1: or high frequency trading jobs to trade crypto instead. So 278 00:13:31,600 --> 00:13:34,360 Speaker 1: it's not so much that crypto took over traditional finance, 279 00:13:34,559 --> 00:13:38,280 Speaker 1: but that you know, kind of hired away from it. Okay, 280 00:13:38,320 --> 00:13:41,280 Speaker 1: So the first time I got to read the draft 281 00:13:41,440 --> 00:13:46,000 Speaker 1: was in early August, and pat Rickner, who's uh the 282 00:13:46,000 --> 00:13:50,320 Speaker 1: story editor, actually cracked it before I could get to it. Um, 283 00:13:50,320 --> 00:13:53,800 Speaker 1: but he immediately flagged what was the first line? And 284 00:13:53,960 --> 00:13:56,120 Speaker 1: I think it has not changed since you filed it. 285 00:13:56,480 --> 00:13:59,560 Speaker 1: And the first line is modern life consists in large 286 00:13:59,600 --> 00:14:03,560 Speaker 1: part of entries in databases. And what was magical to 287 00:14:03,640 --> 00:14:06,840 Speaker 1: me about that was that we're gonna we're gonna end 288 00:14:06,920 --> 00:14:10,240 Speaker 1: up with the story for words about crypto, and you 289 00:14:10,280 --> 00:14:12,720 Speaker 1: don't start there, you start somewhere else. And can you 290 00:14:12,840 --> 00:14:15,880 Speaker 1: can you share how that, how that line came to 291 00:14:15,920 --> 00:14:18,560 Speaker 1: you and why you thought that was the perfect place 292 00:14:18,600 --> 00:14:24,600 Speaker 1: to begin. Well, I think that you if you're going 293 00:14:24,640 --> 00:14:27,800 Speaker 1: to take crypto seriously, you have to sort of start with, 294 00:14:27,840 --> 00:14:30,200 Speaker 1: like what problem is it meant to solve? Like what 295 00:14:30,720 --> 00:14:32,560 Speaker 1: like like in some ways, you know, I said, I 296 00:14:32,600 --> 00:14:33,960 Speaker 1: want to start at the beginning and go to the end, 297 00:14:33,960 --> 00:14:35,440 Speaker 1: but you have to start before the beginning, right, you 298 00:14:35,480 --> 00:14:38,280 Speaker 1: have to start with like what is Satsia Nakamoto sitting 299 00:14:38,280 --> 00:14:40,840 Speaker 1: around thinking about in two thousand seven, then inspires him 300 00:14:40,880 --> 00:14:45,800 Speaker 1: to write the Bitcoin white paper? Right, like why have crypto? 301 00:14:46,240 --> 00:14:50,040 Speaker 1: And I think that the answer has to do with, 302 00:14:50,120 --> 00:14:55,200 Speaker 1: like one, the sort of computerization of the world where 303 00:14:55,200 --> 00:14:57,800 Speaker 1: it's like easier and easier to kind of see that 304 00:14:58,520 --> 00:15:02,040 Speaker 1: so much of life consists of data structures. And then 305 00:15:02,080 --> 00:15:05,360 Speaker 1: also with this breakdown and trust where you know, as 306 00:15:05,400 --> 00:15:07,680 Speaker 1: I say, like the world consists of a lot of 307 00:15:07,880 --> 00:15:11,560 Speaker 1: entries and databases, and you have like real pressure on 308 00:15:11,680 --> 00:15:14,080 Speaker 1: trusting the keepers of the databases. Right, you have real 309 00:15:14,120 --> 00:15:16,680 Speaker 1: worries about you know, two thight you had real worries 310 00:15:16,680 --> 00:15:18,960 Speaker 1: about banks. And that's like the sort of like immediate 311 00:15:18,960 --> 00:15:21,680 Speaker 1: impetus for a bitcoin. Right. You don't trust the bank 312 00:15:21,760 --> 00:15:23,240 Speaker 1: to keep a record of your money, not so much 313 00:15:23,240 --> 00:15:25,160 Speaker 1: because they're not trustworthy of doing that, but because you 314 00:15:25,200 --> 00:15:27,280 Speaker 1: sort of don't trust them generally, where you don't trust 315 00:15:27,360 --> 00:15:30,520 Speaker 1: the system. You know, you don't trust the regulation um, 316 00:15:30,560 --> 00:15:32,360 Speaker 1: and that kind of ramifies into a lot of other 317 00:15:32,400 --> 00:15:35,520 Speaker 1: places where you don't want to rely on some single party. 318 00:15:35,560 --> 00:15:37,160 Speaker 1: You don't want to rely on Facebook to kind of 319 00:15:37,240 --> 00:15:42,000 Speaker 1: keep track of the social graph and so ah, that 320 00:15:42,200 --> 00:15:44,680 Speaker 1: I think is like kind of the spark for for 321 00:15:44,680 --> 00:15:48,400 Speaker 1: for crypto many ways, is like is saying, like, you know, 322 00:15:49,040 --> 00:15:50,400 Speaker 1: if we come with a better way to keep a 323 00:15:50,480 --> 00:15:54,760 Speaker 1: database that doesn't rely on trusting centralized parties, then that's good. 324 00:15:55,280 --> 00:15:58,640 Speaker 1: And that's a that's kind of you know, I wanted 325 00:15:58,720 --> 00:16:02,000 Speaker 1: to start with, like what motivates this rather than like, 326 00:16:02,520 --> 00:16:05,720 Speaker 1: you know, well, I have to say, like this whole 327 00:16:05,760 --> 00:16:07,720 Speaker 1: idea of trust. I love how you kind of wove 328 00:16:07,760 --> 00:16:09,640 Speaker 1: it through everything, right, Like I throw money in a 329 00:16:09,640 --> 00:16:11,840 Speaker 1: bank I expected to be there. I invest money in 330 00:16:11,840 --> 00:16:13,240 Speaker 1: my four O one Kay, I expected to be there. 331 00:16:14,600 --> 00:16:17,720 Speaker 1: Isn't really working this year. But I mean it's like 332 00:16:17,800 --> 00:16:20,400 Speaker 1: digital right, Like I don't I have no interaction with 333 00:16:20,400 --> 00:16:23,160 Speaker 1: the people who are really you know, covering it for me. 334 00:16:23,280 --> 00:16:25,440 Speaker 1: There's so much trust when it comes to crypto. I 335 00:16:25,520 --> 00:16:28,640 Speaker 1: keep thinking about, like who are these people? Why should 336 00:16:28,680 --> 00:16:31,760 Speaker 1: we trust them? Ultimately? And I understand that if the 337 00:16:31,760 --> 00:16:34,560 Speaker 1: system doesn't work, then nobody's going to be wanting to 338 00:16:34,600 --> 00:16:36,960 Speaker 1: participate in it. But I feel like we still don't 339 00:16:37,000 --> 00:16:38,960 Speaker 1: know these people, you know what I mean, that are 340 00:16:39,000 --> 00:16:42,000 Speaker 1: behind it. How do you feel about it having kind 341 00:16:42,000 --> 00:16:45,200 Speaker 1: of broken it down, Well, you don't know that, you know, 342 00:16:45,360 --> 00:16:50,960 Speaker 1: Like maybe you do, but I don't know Jamy time right, 343 00:16:51,280 --> 00:16:56,680 Speaker 1: like uh like like like another reason I wanted to 344 00:16:56,720 --> 00:16:58,840 Speaker 1: start there is like to convey like just like the 345 00:16:58,920 --> 00:17:03,320 Speaker 1: strangeness of trust in our everyday life that is sort 346 00:17:03,320 --> 00:17:05,879 Speaker 1: of like, you know, I wanted to de familiarize that 347 00:17:05,920 --> 00:17:07,680 Speaker 1: a little bit and be like, look, your whole life 348 00:17:07,680 --> 00:17:09,840 Speaker 1: is databases and you trust the people who keep them, 349 00:17:09,880 --> 00:17:13,239 Speaker 1: and like you don't think about it, right, because like 350 00:17:13,440 --> 00:17:15,639 Speaker 1: that's just true in the world, and like you have 351 00:17:15,720 --> 00:17:18,280 Speaker 1: to like think of the reasons why you trust the 352 00:17:18,359 --> 00:17:22,879 Speaker 1: keepers of databases. And some large part of that is 353 00:17:22,920 --> 00:17:26,080 Speaker 1: like there's this regulatory structure where like we sort of 354 00:17:26,320 --> 00:17:29,359 Speaker 1: trust the government not to let people do crimes with 355 00:17:29,400 --> 00:17:31,320 Speaker 1: our money, you know, And then other parts of it 356 00:17:31,359 --> 00:17:34,840 Speaker 1: are like relying on market incentives where like you know, 357 00:17:35,280 --> 00:17:37,000 Speaker 1: you can kind of like look at a company and 358 00:17:37,040 --> 00:17:39,680 Speaker 1: be like, well, if this company was stealing people's money. 359 00:17:39,920 --> 00:17:43,080 Speaker 1: It probably wouldn't be advertising on the subway because people 360 00:17:43,080 --> 00:17:44,880 Speaker 1: would stop giving it their money. You know, you're sort 361 00:17:44,920 --> 00:17:46,359 Speaker 1: of like relying on other people to kind of do 362 00:17:46,400 --> 00:17:49,720 Speaker 1: the investigation for you. Uh And and in crypto, you know, 363 00:17:49,840 --> 00:17:52,119 Speaker 1: like it's the same sort of basic set of things, 364 00:17:53,640 --> 00:17:57,680 Speaker 1: but the mix is different. Right. So in crypto there's 365 00:17:59,560 --> 00:18:02,399 Speaker 1: you know, round numbers. There's no government regulation, right, I 366 00:18:02,400 --> 00:18:03,960 Speaker 1: mean there's actually a lot there's a lot of people 367 00:18:03,960 --> 00:18:06,360 Speaker 1: doing a lot of things to regulate crypto. But like 368 00:18:06,600 --> 00:18:09,360 Speaker 1: any given project that you look at in crypto, there's 369 00:18:09,400 --> 00:18:11,439 Speaker 1: some chance that no regulator has thought about it, right, 370 00:18:11,480 --> 00:18:14,080 Speaker 1: and they've certainly not like approved it, And certainly there's 371 00:18:14,080 --> 00:18:17,439 Speaker 1: not legislation being like here's the steps you need to 372 00:18:17,440 --> 00:18:19,919 Speaker 1: take to become a stable client in the US, right, 373 00:18:19,960 --> 00:18:23,800 Speaker 1: I mean, like there's perspective legislation, but there's not there's 374 00:18:23,840 --> 00:18:26,159 Speaker 1: not like a real kind of like working regulatory framework. 375 00:18:26,520 --> 00:18:28,679 Speaker 1: And so you know, in much of the bunch of 376 00:18:28,680 --> 00:18:32,119 Speaker 1: our lives, we trust, you know, people because there is 377 00:18:32,160 --> 00:18:35,320 Speaker 1: a regulatory structure around them, and here there isn't. And 378 00:18:35,320 --> 00:18:39,200 Speaker 1: that's weird and in many cases makes things less trustworthy. 379 00:18:39,200 --> 00:18:42,120 Speaker 1: And so we saw in the crypto meltdown, a lot 380 00:18:42,160 --> 00:18:46,560 Speaker 1: of like customer facasing brokerage is you know, kind of 381 00:18:46,600 --> 00:18:49,360 Speaker 1: like lost their customers money because they didn't they were 382 00:18:49,480 --> 00:18:53,399 Speaker 1: sort of doing very levered trades without telling anyone about it. Um, 383 00:18:53,440 --> 00:18:55,879 Speaker 1: there's the market incentives thing, which in crypto is a 384 00:18:55,880 --> 00:18:58,080 Speaker 1: big deal, right, Like you sort of go around thinking, well, 385 00:18:58,119 --> 00:19:00,040 Speaker 1: if this is a big crypto exchange, it's probably be 386 00:19:00,160 --> 00:19:02,960 Speaker 1: trustworthy because everyone else is trusting it, right, And that 387 00:19:03,119 --> 00:19:05,679 Speaker 1: as a heuristic that's not terrible, but it has you know, 388 00:19:06,240 --> 00:19:08,320 Speaker 1: in the past, the biggest bitcoin exchange at the time 389 00:19:08,440 --> 00:19:11,840 Speaker 1: was blown up. So it's not a perfect heuristic by 390 00:19:11,880 --> 00:19:14,320 Speaker 1: any means, nor is it in traditional finance, right big 391 00:19:14,359 --> 00:19:16,639 Speaker 1: banks have blown up. Um. And then the third thing 392 00:19:16,640 --> 00:19:18,679 Speaker 1: in crypto is like there is this notion that like 393 00:19:19,800 --> 00:19:22,399 Speaker 1: not in all of crypto, but in lots of crypto, 394 00:19:22,480 --> 00:19:24,359 Speaker 1: and like in like the core of bitcoin and in 395 00:19:24,440 --> 00:19:27,280 Speaker 1: like decentralized finance, there is this notion that you can 396 00:19:27,320 --> 00:19:30,040 Speaker 1: look at the code yourself, that everything is verifiable yourself. 397 00:19:30,040 --> 00:19:31,760 Speaker 1: You can look at the codesea it works. You can 398 00:19:31,800 --> 00:19:34,600 Speaker 1: look at the ledger of transactions, the blockchain and prove 399 00:19:34,640 --> 00:19:37,520 Speaker 1: that every transaction is correct, and so you said you 400 00:19:37,560 --> 00:19:40,399 Speaker 1: don't have to trust. You can verify everything without trusting it. 401 00:19:40,400 --> 00:19:42,280 Speaker 1: In practice, you're not doing that because it would take forever, 402 00:19:42,600 --> 00:19:47,160 Speaker 1: but you are, Ah, you're sort of trusting the fact 403 00:19:47,200 --> 00:19:49,439 Speaker 1: that you could do that rapification, so you have you 404 00:19:49,440 --> 00:19:52,240 Speaker 1: don't have to have as much trust in individuals. But 405 00:19:52,320 --> 00:19:53,960 Speaker 1: that's not like the only thing in crypto. I mean, 406 00:19:54,040 --> 00:19:57,600 Speaker 1: the crypto evangelists will talk about that being like the 407 00:19:57,960 --> 00:20:00,639 Speaker 1: trustless nature of crypto, but obviously, like day to day, 408 00:20:00,680 --> 00:20:03,479 Speaker 1: a lot of stuff in crypto involves trusting you know, 409 00:20:03,600 --> 00:20:07,600 Speaker 1: companies and like individuals with your crypto, and often those 410 00:20:07,600 --> 00:20:10,000 Speaker 1: people turn out not to be trust really. Yeah, we 411 00:20:10,000 --> 00:20:12,919 Speaker 1: could do an entire program on talking about, you know, 412 00:20:12,960 --> 00:20:17,080 Speaker 1: the history of crypto and the grifters or alleged grifters. Colorful, 413 00:20:17,600 --> 00:20:20,560 Speaker 1: colorful characters exactly. We're speaking with Matt Lavin. He's a 414 00:20:20,560 --> 00:20:23,919 Speaker 1: columnist for Bloomberg Opinion. He is the story is The 415 00:20:24,000 --> 00:20:26,600 Speaker 1: story is his in a Bloomberg Business Week magazine this week. 416 00:20:26,640 --> 00:20:28,439 Speaker 1: If you haven't read it yet, I think you're the 417 00:20:28,480 --> 00:20:33,280 Speaker 1: only one. Uh, it is on the Bloomberg terminal. It's 418 00:20:33,280 --> 00:20:35,720 Speaker 1: a lot of words to get through. Okay, if you 419 00:20:35,760 --> 00:20:39,160 Speaker 1: haven't started reading it, yet you might be the only one. Um. 420 00:20:39,200 --> 00:20:41,520 Speaker 1: We also have Joel Webber, the editor of Bloomberg Business Week, 421 00:20:41,520 --> 00:20:44,280 Speaker 1: with us in the Bloomberg Interactive Brokers studio. Matt, I 422 00:20:44,320 --> 00:20:47,080 Speaker 1: want to hear more about your perceptions and conceptions of 423 00:20:47,080 --> 00:20:51,320 Speaker 1: crypto before going into this versus after doing the reporting 424 00:20:51,359 --> 00:20:54,520 Speaker 1: and writing, Like you must have gone in with some 425 00:20:54,600 --> 00:20:57,800 Speaker 1: sort of notion and I'm wondering what that was and 426 00:20:57,800 --> 00:21:01,280 Speaker 1: and if it changed by the end. I wouldn't say 427 00:21:01,280 --> 00:21:07,040 Speaker 1: it changed true dramatically, and part of you know, like 428 00:21:07,040 --> 00:21:09,280 Speaker 1: like I do come like I don't. I don't come 429 00:21:09,320 --> 00:21:11,000 Speaker 1: to the story with an angle in the sense of 430 00:21:11,040 --> 00:21:13,520 Speaker 1: like I'm a crypto booster or I'm a you know, 431 00:21:13,560 --> 00:21:16,239 Speaker 1: crypto hater, And I kind of felt like that was 432 00:21:16,640 --> 00:21:18,640 Speaker 1: the only way to do it right. Like I feel 433 00:21:18,640 --> 00:21:20,280 Speaker 1: like I read a lot by crypto boosters that is 434 00:21:20,359 --> 00:21:23,919 Speaker 1: very enthusiastic, but like very kind of in the weeds 435 00:21:23,960 --> 00:21:26,160 Speaker 1: and jargon e and like and like, you know, sort 436 00:21:26,160 --> 00:21:28,359 Speaker 1: of assumes you're already a believer. And I read a 437 00:21:28,400 --> 00:21:30,479 Speaker 1: lot of stuff by skeptics that is just angry, and 438 00:21:30,520 --> 00:21:33,000 Speaker 1: I wanted to sort of kind of find a middle ground. 439 00:21:33,000 --> 00:21:35,119 Speaker 1: But like I do come from to it from the 440 00:21:35,119 --> 00:21:38,160 Speaker 1: perspective of I am a financial writer, and I'm most 441 00:21:38,200 --> 00:21:43,720 Speaker 1: interested in the crypto financial system, and so in writing this, 442 00:21:44,800 --> 00:21:48,159 Speaker 1: I found myself often charmed by the crypto financial system 443 00:21:48,160 --> 00:21:50,760 Speaker 1: and by like the cleverness of of like what people 444 00:21:51,040 --> 00:21:55,760 Speaker 1: were doing in decentralized finance, and by the enthusiasm of 445 00:21:55,840 --> 00:21:59,119 Speaker 1: people who work in crypto finance, not just about like 446 00:21:59,160 --> 00:22:03,720 Speaker 1: making a lot of money, but about how someone said 447 00:22:03,720 --> 00:22:06,320 Speaker 1: to me, things just work in crypto, like you just 448 00:22:06,880 --> 00:22:09,639 Speaker 1: like if you want to like start trading stuff, you 449 00:22:09,720 --> 00:22:12,240 Speaker 1: like plug into the exchange and you start trading this stuff. 450 00:22:12,520 --> 00:22:18,080 Speaker 1: And in traditional finance, there's a lot more like uh process, right, 451 00:22:18,119 --> 00:22:20,240 Speaker 1: there's a lot more like you you like call a 452 00:22:20,280 --> 00:22:22,280 Speaker 1: bank and they send you a contract so you can 453 00:22:22,560 --> 00:22:24,840 Speaker 1: sign up an account, and then like you know, you 454 00:22:24,920 --> 00:22:26,560 Speaker 1: have to like call someone else to like hook over 455 00:22:26,600 --> 00:22:28,159 Speaker 1: your data to the exchange, and it's just like a 456 00:22:28,320 --> 00:22:35,600 Speaker 1: more manual, complicated, subjective, you know process where like insiders 457 00:22:35,600 --> 00:22:39,000 Speaker 1: sort of get more access and in crypto everything is 458 00:22:39,040 --> 00:22:44,119 Speaker 1: sort of straightforward and computerized, and like like that's like 459 00:22:44,200 --> 00:22:46,199 Speaker 1: what people told me, Like that's like that was the 460 00:22:46,240 --> 00:22:49,200 Speaker 1: thing they liked that they could sort of start a product, 461 00:22:49,440 --> 00:22:52,640 Speaker 1: start trading something, come up with an idea, and implement 462 00:22:52,720 --> 00:22:56,040 Speaker 1: it without like sort of getting anyone's permission. Obviously there's 463 00:22:56,040 --> 00:22:57,720 Speaker 1: a flip side to them, which is that like you 464 00:22:57,720 --> 00:23:00,359 Speaker 1: don't get the regulators permission, and sometimes the product is like, 465 00:23:00,440 --> 00:23:05,360 Speaker 1: you know, theft. But m h, that was a sort 466 00:23:05,400 --> 00:23:07,439 Speaker 1: of that was a thing that like, I was struck 467 00:23:07,440 --> 00:23:10,720 Speaker 1: by people's enthusiasm for that because I think that when 468 00:23:10,760 --> 00:23:13,879 Speaker 1: I was you know, when I've written my column about crypto, 469 00:23:13,880 --> 00:23:16,520 Speaker 1: I've often thought of crypto as being, you know, people 470 00:23:16,600 --> 00:23:18,919 Speaker 1: call the block chain a slow database, and I think 471 00:23:18,960 --> 00:23:22,399 Speaker 1: of it as being a sort of like ah, like 472 00:23:24,240 --> 00:23:26,560 Speaker 1: like it like a difficult to use system in some 473 00:23:26,600 --> 00:23:31,240 Speaker 1: ways because it is unintuitive to outsiders. But I think 474 00:23:31,280 --> 00:23:33,520 Speaker 1: when you like, the people who use it find it 475 00:23:33,720 --> 00:23:36,199 Speaker 1: so much easier to use than traditional finance because it 476 00:23:36,320 --> 00:23:40,520 Speaker 1: is you know, kind of like disintermediated and permissionless and 477 00:23:40,640 --> 00:23:43,160 Speaker 1: just like you can like read the documents and then 478 00:23:43,200 --> 00:23:47,320 Speaker 1: go do the thing. H haters are gonna hate, and 479 00:23:48,160 --> 00:23:55,880 Speaker 1: crypto haters will will ask, sure words, what's crypto for? Still, Yeah, 480 00:23:56,320 --> 00:24:02,400 Speaker 1: I mean I don't like I I really I share 481 00:24:02,440 --> 00:24:05,760 Speaker 1: that skepticism, you know, Like I I like there are 482 00:24:07,320 --> 00:24:12,119 Speaker 1: like people tell stories about how crypto is changing our 483 00:24:12,160 --> 00:24:14,080 Speaker 1: will change your day to day life, and I often 484 00:24:14,080 --> 00:24:18,440 Speaker 1: find those stories not particularly compelling. Right, there's a lot 485 00:24:18,480 --> 00:24:22,120 Speaker 1: of like you could own a share in the bands 486 00:24:22,160 --> 00:24:25,240 Speaker 1: you like and then if those bands become popular, you'll 487 00:24:25,240 --> 00:24:27,560 Speaker 1: get rich. It's like why what like how is that 488 00:24:27,680 --> 00:24:30,320 Speaker 1: a thing? Um or there? Or like you know, you 489 00:24:30,320 --> 00:24:32,399 Speaker 1: can like own your data on the on the on, 490 00:24:32,560 --> 00:24:35,440 Speaker 1: like your social networks and you can get paid to 491 00:24:35,600 --> 00:24:39,400 Speaker 1: serve ads to you like um, It's it's like it's 492 00:24:39,440 --> 00:24:42,200 Speaker 1: like these stories of sort of like micropayments and like ownership, 493 00:24:42,440 --> 00:24:45,760 Speaker 1: like like sort of financializing everything that uh you know, 494 00:24:45,880 --> 00:24:47,639 Speaker 1: Like I'm a finance guy. I like that. I like 495 00:24:47,720 --> 00:24:49,800 Speaker 1: some I like a certain amount of financialization, but I 496 00:24:49,840 --> 00:24:53,320 Speaker 1: also like I spent a long time reading about like 497 00:24:54,600 --> 00:24:57,520 Speaker 1: we're gonna like sell equity in college students so that 498 00:24:57,560 --> 00:25:00,520 Speaker 1: you can like bet on their futures, and like you know, 499 00:25:01,280 --> 00:25:03,520 Speaker 1: now I'm like, okay, yeah, people, people are gonna keep 500 00:25:03,560 --> 00:25:05,439 Speaker 1: writing that's ever gonna happen, right, Like there are some 501 00:25:05,480 --> 00:25:08,280 Speaker 1: things that that sort of resist financialization, and crypto is 502 00:25:08,280 --> 00:25:11,360 Speaker 1: like we're going to financialize everything at once, and that 503 00:25:11,560 --> 00:25:15,479 Speaker 1: seems implausible. To me. Um so in that sense, like 504 00:25:15,600 --> 00:25:18,280 Speaker 1: I am like, like, I think there's there's you know, 505 00:25:18,359 --> 00:25:22,239 Speaker 1: potential like stories like that that will come true. But 506 00:25:22,320 --> 00:25:25,560 Speaker 1: I'm not super bullish. I'm like, we're gonna have a 507 00:25:25,560 --> 00:25:29,200 Speaker 1: coin for everything that you do in your life. Um 508 00:25:29,320 --> 00:25:32,760 Speaker 1: but uh, Matt, Matt, let me just ask you, because 509 00:25:32,800 --> 00:25:35,240 Speaker 1: you know, we lost what two trillion dollars in crypto wealth, 510 00:25:35,359 --> 00:25:38,639 Speaker 1: right that happened, and yet, as you point out in 511 00:25:39,040 --> 00:25:41,639 Speaker 1: your in the magazine, you know, it's not like the 512 00:25:41,640 --> 00:25:45,320 Speaker 1: rest of the financial markets or the economy came undone 513 00:25:45,359 --> 00:25:48,159 Speaker 1: because of that. So what is the meeting of it? 514 00:25:48,200 --> 00:25:49,879 Speaker 1: You know, what does that say about the future in 515 00:25:50,000 --> 00:25:52,200 Speaker 1: terms of the value of crypto? Crypto and that First 516 00:25:52,240 --> 00:25:54,200 Speaker 1: of all, we're glad it didn't bring down the markets, 517 00:25:54,600 --> 00:25:56,720 Speaker 1: But I mean, what does it say about its real 518 00:25:56,840 --> 00:25:59,840 Speaker 1: value going forward? Or maybe it doesn't. I don't know. 519 00:26:01,200 --> 00:26:07,760 Speaker 1: Uh yeah, I mean I do think that. I mean, 520 00:26:07,760 --> 00:26:08,959 Speaker 1: first of all, we lost a lot more than two 521 00:26:09,000 --> 00:26:13,160 Speaker 1: trillion dollars of stock market wealth you know this year, 522 00:26:13,440 --> 00:26:23,800 Speaker 1: Like uh, Like, you know, like crypto whatever else it is, 523 00:26:24,480 --> 00:26:26,880 Speaker 1: is a very speculative asset class, right, Like people who 524 00:26:26,880 --> 00:26:30,480 Speaker 1: invest in crypto for the most part, are like, this 525 00:26:30,520 --> 00:26:32,359 Speaker 1: is a fun gamble more than they're like, this is 526 00:26:32,359 --> 00:26:34,320 Speaker 1: where I'm putting my life savings because it's like and 527 00:26:34,400 --> 00:26:36,720 Speaker 1: I promised me a study two percent return. So the 528 00:26:36,760 --> 00:26:39,720 Speaker 1: fact that it crashed, you know, people who were betting 529 00:26:39,720 --> 00:26:41,240 Speaker 1: on it going up it went down, but they could 530 00:26:41,240 --> 00:26:43,040 Speaker 1: sort of afford to take that loss because it was 531 00:26:43,119 --> 00:26:45,960 Speaker 1: essentially a speculative asset. So that's one reason that it 532 00:26:45,960 --> 00:26:48,160 Speaker 1: didn't really like ramified to the rest of the economy. 533 00:26:48,240 --> 00:26:50,160 Speaker 1: But the other reason is definitely that like you're not 534 00:26:50,359 --> 00:26:53,920 Speaker 1: you know, financing your home or your you know, your 535 00:26:53,960 --> 00:26:57,119 Speaker 1: business by like going to the crypto lender, and so 536 00:26:57,520 --> 00:27:01,760 Speaker 1: crypto is not super integrated into into like the financing 537 00:27:01,840 --> 00:27:05,199 Speaker 1: of real world activity. So it is it is you know, 538 00:27:05,200 --> 00:27:08,040 Speaker 1: when it crashes, it's not like the crypto bank shuts 539 00:27:08,040 --> 00:27:09,960 Speaker 1: down and you can't get a mortgage for your house, 540 00:27:10,480 --> 00:27:12,600 Speaker 1: like you can still go to the regular bank. Um. 541 00:27:12,600 --> 00:27:14,280 Speaker 1: So yeah, I mean I think I've said that like 542 00:27:14,280 --> 00:27:22,520 Speaker 1: like to the if the next crypto financial crisis, because 543 00:27:22,520 --> 00:27:24,560 Speaker 1: there really was a crypto financial crisis this year with 544 00:27:24,640 --> 00:27:27,440 Speaker 1: like failing you know, lenders, If the next crypto financial 545 00:27:27,440 --> 00:27:30,200 Speaker 1: crisis causes a slowdown in the real economy. Then you'll 546 00:27:30,240 --> 00:27:33,080 Speaker 1: be like, oh, Crypto arrived, Like Crypto is now like 547 00:27:33,160 --> 00:27:36,680 Speaker 1: meaningfully integrated into everyone's lives such that when it crashes 548 00:27:36,840 --> 00:27:39,360 Speaker 1: that affects the world. We're like, we're not quite there yet. 549 00:27:40,840 --> 00:27:44,440 Speaker 1: So Matt, um, you know we do this every week, um, um, 550 00:27:44,440 --> 00:27:48,240 Speaker 1: wondering what's your next single topic issue takeover of the 551 00:27:48,280 --> 00:27:50,800 Speaker 1: magazine and and what kind of deadline I can give 552 00:27:50,800 --> 00:27:53,440 Speaker 1: you now that we do well, you know I'm gonna 553 00:27:53,480 --> 00:27:57,520 Speaker 1: I'm gonna do a retrospective on Elon Musk. I'll go, 554 00:27:58,600 --> 00:28:00,479 Speaker 1: I'm never gonna write it again. Yeah, it right right 555 00:28:02,760 --> 00:28:04,920 Speaker 1: my control. I mean, I guess the question is kind 556 00:28:04,920 --> 00:28:07,479 Speaker 1: of where the story goes from here? To me, that 557 00:28:07,840 --> 00:28:10,840 Speaker 1: is the most interesting part about Crypto, right, And I 558 00:28:10,880 --> 00:28:13,359 Speaker 1: won't even pretend to know, And that wasn't really the 559 00:28:13,359 --> 00:28:17,480 Speaker 1: goal of the project. Um, although I think Matt poses 560 00:28:17,520 --> 00:28:19,119 Speaker 1: some really and I don't want to give away the 561 00:28:19,160 --> 00:28:22,240 Speaker 1: ending because he just it's a really majestic way that 562 00:28:22,400 --> 00:28:26,320 Speaker 1: I think he wrestles with this question. Um. And boy, 563 00:28:26,440 --> 00:28:29,960 Speaker 1: I will just say, having been at editor of Business 564 00:28:30,000 --> 00:28:32,320 Speaker 1: Week for a while, worked at Bloomberg for ten years, 565 00:28:32,800 --> 00:28:35,960 Speaker 1: it's just like this story makes you just want to 566 00:28:36,040 --> 00:28:39,720 Speaker 1: get a bowl of popcorn. Uh, read the issue to 567 00:28:39,880 --> 00:28:42,520 Speaker 1: make sense of everything that we've all lived through, and 568 00:28:42,560 --> 00:28:45,040 Speaker 1: also just keep eating that popcorn to see what happens. 569 00:28:45,080 --> 00:28:48,680 Speaker 1: Like I'm really deeply curious. And that was the curiosity 570 00:28:48,720 --> 00:28:53,560 Speaker 1: that I think Matt infused UH into this story. And 571 00:28:53,920 --> 00:28:56,200 Speaker 1: I mean, we're we're just honored to publish it. Matt. 572 00:28:56,240 --> 00:28:57,800 Speaker 1: You should know. I tell you should know that in 573 00:28:57,800 --> 00:28:59,920 Speaker 1: the news room, people have been hunting down for the issue. 574 00:29:00,000 --> 00:29:03,000 Speaker 1: We typically have them. There's so much bitcoin you've got 575 00:29:03,040 --> 00:29:05,640 Speaker 1: to give me. But I'm just telling you, everybody wants 576 00:29:05,640 --> 00:29:07,520 Speaker 1: the issue to read, and it's like we've been like, 577 00:29:07,600 --> 00:29:10,320 Speaker 1: do you have the issue? Do you have the issue? Um? Matt, 578 00:29:10,360 --> 00:29:12,280 Speaker 1: thank you so much. I really mean it like I've 579 00:29:12,360 --> 00:29:14,680 Speaker 1: learned so much and I think everybody who reads it does. 580 00:29:15,040 --> 00:29:17,000 Speaker 1: It is called The Crypto Story, Your Guide to what 581 00:29:17,080 --> 00:29:19,000 Speaker 1: it does, what it means, and why it still matters, 582 00:29:19,040 --> 00:29:23,080 Speaker 1: Written by Bloomberg Opinions Matt Luvin. Check it out. As 583 00:29:23,080 --> 00:29:25,240 Speaker 1: we said, it's the entire issue of Bloomberg Big Business 584 00:29:25,280 --> 00:29:28,480 Speaker 1: Week magazine and our thanks to Jill Webber, editor of 585 00:29:28,520 --> 00:29:31,560 Speaker 1: the magazine, who I guess it's something to do with small, 586 00:29:31,680 --> 00:29:35,880 Speaker 1: small Matten and Pat get the most props. Well, Joel, 587 00:29:35,880 --> 00:29:37,640 Speaker 1: thank you for joining us. Joel Ever, the editor of 588 00:29:37,640 --> 00:29:40,720 Speaker 1: Bloomberg Business Week, with us in the Bloomberg Interactive Broker Studio. 589 00:29:40,960 --> 00:29:45,000 Speaker 1: This is Bloomberg Business Week with Carol Masser and Bloomberg 590 00:29:45,080 --> 00:29:48,920 Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. All right, so, 591 00:29:48,960 --> 00:29:51,440 Speaker 1: speaking of metal platforms, they talked an awful lot about 592 00:29:51,480 --> 00:29:54,440 Speaker 1: the metaverse this week and continuing to spend money on it, 593 00:29:54,520 --> 00:29:56,680 Speaker 1: and you know, our next guest has some real smart 594 00:29:56,720 --> 00:29:58,960 Speaker 1: thoughts about it when it comes to shopping in the metaverse. 595 00:29:59,120 --> 00:30:01,400 Speaker 1: We please have back with us, Nih has saying founder 596 00:30:01,440 --> 00:30:03,680 Speaker 1: and a CEO of Obsess. It's a shop of a 597 00:30:03,920 --> 00:30:07,280 Speaker 1: virtual store platform, and it offers consumers a way that 598 00:30:07,320 --> 00:30:10,160 Speaker 1: they can shop and experience their products online and in 599 00:30:10,200 --> 00:30:11,959 Speaker 1: the metaverse. Nia, good to have you back with us. 600 00:30:11,960 --> 00:30:14,520 Speaker 1: How are you? Thank you so much for having me 601 00:30:14,560 --> 00:30:18,360 Speaker 1: to encou So when we think about established brands in 602 00:30:18,400 --> 00:30:20,640 Speaker 1: the metaverse, should we think about this as a way 603 00:30:20,680 --> 00:30:23,800 Speaker 1: to kind of like the way that companies started offering 604 00:30:23,800 --> 00:30:27,320 Speaker 1: their products online. You know, instead of sending you catalogs 605 00:30:27,600 --> 00:30:30,240 Speaker 1: twenty years ago, you could go to you know, I 606 00:30:30,240 --> 00:30:32,960 Speaker 1: don't know name the company Patagonia dot com and actually 607 00:30:33,040 --> 00:30:35,000 Speaker 1: look at a jacket there is this. This is the 608 00:30:35,040 --> 00:30:39,080 Speaker 1: same thing happening now in terms of the metaverse. Yes, 609 00:30:39,120 --> 00:30:41,880 Speaker 1: absolutely so. The way, like you know, we define the 610 00:30:41,920 --> 00:30:44,840 Speaker 1: metaverse is that it is the next generation of the Internet. 611 00:30:44,880 --> 00:30:48,600 Speaker 1: Like if you think about their websites started in the nineties, right, 612 00:30:48,640 --> 00:30:50,840 Speaker 1: they were very plain, they had mostly text, and then 613 00:30:50,840 --> 00:30:54,040 Speaker 1: we added images, and then we added videos. Um and 614 00:30:54,120 --> 00:30:56,920 Speaker 1: now with the hardware capabilities that are there in the 615 00:30:56,960 --> 00:30:59,600 Speaker 1: market as well as our you know, network speeds pushing 616 00:30:59,600 --> 00:31:02,760 Speaker 1: into I G and more, it's just possible to do 617 00:31:03,080 --> 00:31:08,280 Speaker 1: much richer graphical interfaces online. And that's really what's leading 618 00:31:08,280 --> 00:31:10,320 Speaker 1: to the metaverse, which is a three D version of 619 00:31:10,360 --> 00:31:13,800 Speaker 1: the Internet. Um So, what you're seeing brands do now 620 00:31:14,080 --> 00:31:16,840 Speaker 1: is that they're starting to create these more three D 621 00:31:16,920 --> 00:31:20,719 Speaker 1: immersive experiences that are actually closer to the real world, right, 622 00:31:20,800 --> 00:31:23,040 Speaker 1: because the real world is three D, it's all around us. 623 00:31:23,120 --> 00:31:25,040 Speaker 1: We don't look at the real world in a database 624 00:31:25,120 --> 00:31:28,440 Speaker 1: like we do most of online shopping today. Um So, 625 00:31:28,480 --> 00:31:30,840 Speaker 1: it's just that technology is now getting to the point 626 00:31:30,880 --> 00:31:33,640 Speaker 1: that that's possible, and that this is all happening on 627 00:31:33,720 --> 00:31:37,560 Speaker 1: mobile devices and on desktop computers. You don't require like 628 00:31:37,760 --> 00:31:40,480 Speaker 1: we are headsets and you know, to put goggles. It's 629 00:31:40,480 --> 00:31:42,640 Speaker 1: all happening on the devices that you already have. I 630 00:31:42,640 --> 00:31:44,840 Speaker 1: try to think where this could go. Yeah, And I 631 00:31:44,880 --> 00:31:48,320 Speaker 1: think about, you know, could I essentially have a body 632 00:31:48,320 --> 00:31:51,320 Speaker 1: scan of me so that there's an avatar that with 633 00:31:51,400 --> 00:31:54,400 Speaker 1: my dimensions exactly, and I go to the metaverse and 634 00:31:54,400 --> 00:31:56,960 Speaker 1: I go shopping at the mall or go shopping down 635 00:31:57,520 --> 00:31:59,880 Speaker 1: you know street in New York City Pappatoo shops, and 636 00:32:00,000 --> 00:32:04,560 Speaker 1: I can actually try on close with the right digital dimensions, 637 00:32:04,640 --> 00:32:07,520 Speaker 1: and I can really get a feel of how things fit. Like, 638 00:32:07,680 --> 00:32:10,400 Speaker 1: is there's something there that makes me want to do 639 00:32:10,440 --> 00:32:11,960 Speaker 1: because I gotta tell you, I like living in the 640 00:32:11,960 --> 00:32:15,480 Speaker 1: real life. So this idea of shopping, you know, I 641 00:32:15,800 --> 00:32:17,400 Speaker 1: just can't get my head around it. So I'm trying 642 00:32:17,400 --> 00:32:20,680 Speaker 1: to think, is there some super level that will get 643 00:32:20,800 --> 00:32:24,320 Speaker 1: us there? Yeah, So two pass to that. First of all, 644 00:32:24,400 --> 00:32:27,520 Speaker 1: what you described with you know, having kind of your 645 00:32:27,520 --> 00:32:32,120 Speaker 1: avatar in the metavers and having your exact dimensions and 646 00:32:32,120 --> 00:32:35,640 Speaker 1: trying on clothes, that's absolutely sort of the holy grail 647 00:32:35,800 --> 00:32:38,240 Speaker 1: of the future of fashion shopping. We are not there 648 00:32:38,360 --> 00:32:41,000 Speaker 1: yet in terms of having the full technology to be 649 00:32:41,320 --> 00:32:44,200 Speaker 1: able to have that body scan easily or try on 650 00:32:44,280 --> 00:32:47,600 Speaker 1: clothes easily, because not all brands have three D models 651 00:32:47,640 --> 00:32:50,360 Speaker 1: of their products yet. But that is the direction that 652 00:32:50,400 --> 00:32:52,840 Speaker 1: we are heading into. Um. But the second part I 653 00:32:52,880 --> 00:32:56,960 Speaker 1: would say is like, think about the things that we 654 00:32:57,000 --> 00:32:59,560 Speaker 1: are doing with brands in the metabors today is not 655 00:32:59,800 --> 00:33:02,880 Speaker 1: like you are going into some other world and it's 656 00:33:02,920 --> 00:33:05,920 Speaker 1: actually not that foreign. So it is really an improvement 657 00:33:06,160 --> 00:33:09,560 Speaker 1: over two Day's online shopping interface, which is good for 658 00:33:10,040 --> 00:33:11,800 Speaker 1: you know, if you want to if you know exactly 659 00:33:11,800 --> 00:33:14,120 Speaker 1: what you want to buy, and you can search and 660 00:33:14,160 --> 00:33:16,480 Speaker 1: filter and get to it and it's very efficient, right, 661 00:33:16,840 --> 00:33:19,400 Speaker 1: But when you go shopping in real life and stores, 662 00:33:19,480 --> 00:33:22,120 Speaker 1: there's a lot of discovery and you're almost like it's 663 00:33:22,120 --> 00:33:25,360 Speaker 1: an entertainment experience because you're getting that inspiration from the 664 00:33:25,400 --> 00:33:28,880 Speaker 1: brand and um, you know their stories. So yeah, it 665 00:33:28,920 --> 00:33:30,480 Speaker 1: makes me sorry to interrupt it, It It makes me. It 666 00:33:30,680 --> 00:33:32,680 Speaker 1: kind of reminds me of the way that we saw 667 00:33:33,400 --> 00:33:36,480 Speaker 1: news transition from newspapers to online and the way that 668 00:33:36,560 --> 00:33:39,400 Speaker 1: some people still really like to hold onto a newspaper, 669 00:33:40,080 --> 00:33:43,120 Speaker 1: you know, on a Sunday, because they might actually see 670 00:33:43,800 --> 00:33:46,240 Speaker 1: or encounter an article that they wouldn't necessarily click on 671 00:33:46,280 --> 00:33:49,000 Speaker 1: if it were presented to them h on a web 672 00:33:49,040 --> 00:33:51,200 Speaker 1: page for example, So how do you replicate that in 673 00:33:51,360 --> 00:33:55,440 Speaker 1: the metaverse? Yeah, absolutely, So that's exactly what the brands 674 00:33:55,440 --> 00:33:57,239 Speaker 1: that we are working with are doing, is that they 675 00:33:57,240 --> 00:34:00,840 Speaker 1: are creating these UM virtual and I means that again, 676 00:34:00,960 --> 00:34:03,400 Speaker 1: it's very easy for you to access. It's not like 677 00:34:03,480 --> 00:34:06,000 Speaker 1: you're going into the metaborse and you don't have to 678 00:34:06,040 --> 00:34:08,600 Speaker 1: become an amator if you don't want to. It's really 679 00:34:08,640 --> 00:34:12,480 Speaker 1: a different interface for exploring products in which UM you know, 680 00:34:12,560 --> 00:34:15,560 Speaker 1: you can discover things that you weren't necessarily like looking for. 681 00:34:15,719 --> 00:34:18,080 Speaker 1: And we actually see that from the data, is that 682 00:34:18,160 --> 00:34:21,480 Speaker 1: customers are buying more in these environments because similar to 683 00:34:21,520 --> 00:34:24,080 Speaker 1: a retail store, you might just come across something that 684 00:34:24,120 --> 00:34:27,520 Speaker 1: you weren't necessarily looking for, and it's ultimately a more 685 00:34:27,600 --> 00:34:31,200 Speaker 1: intuitive shopping interface because while most brands come to us 686 00:34:31,239 --> 00:34:34,560 Speaker 1: to target a younger audience who's super used to gaming right, 687 00:34:34,600 --> 00:34:37,440 Speaker 1: and this interface is very similar to gaming UM in 688 00:34:37,560 --> 00:34:39,680 Speaker 1: terms of moving to a three D environment. But then 689 00:34:39,680 --> 00:34:42,760 Speaker 1: we also have customers that are high and luxury brands 690 00:34:42,800 --> 00:34:46,280 Speaker 1: and their typical demographic is much older and they're seeing 691 00:34:46,560 --> 00:34:50,080 Speaker 1: they're seeing great results because well, ultimately it's very intuitive. 692 00:34:50,160 --> 00:34:52,600 Speaker 1: It's like, you know what you do in real life. Nia, 693 00:34:52,680 --> 00:34:53,920 Speaker 1: We get a round, but we'll check in with you 694 00:34:54,000 --> 00:34:56,960 Speaker 1: real soon. Nia, seeing founder and CEO of Obsessed, joining 695 00:34:57,040 --> 00:35:04,719 Speaker 1: s via zoom from New York City and the Michael Jurnal. Yeah, 696 00:35:04,800 --> 00:35:06,799 Speaker 1: but you let me drive. Oh no, no, no, no, 697 00:35:08,160 --> 00:35:16,320 Speaker 1: honey leaved gravels. I want to drive. Its good question. 698 00:35:17,040 --> 00:35:26,520 Speaker 1: Drive is the drive to the clothes on Bloomberg Radio. 699 00:35:27,200 --> 00:35:29,960 Speaker 1: All right, everybuddy, we are getting ready to wrap up 700 00:35:30,000 --> 00:35:34,239 Speaker 1: the last fully glow October trading, which is pretty remarkable. 701 00:35:34,280 --> 00:35:37,799 Speaker 1: And look at the rally and we are yeah, oh yeah, 702 00:35:37,960 --> 00:35:40,560 Speaker 1: November stress this week. I mean not on Monday, but right, 703 00:35:40,640 --> 00:35:43,839 Speaker 1: thirty days has September full week. Yeah, so we still 704 00:35:43,840 --> 00:35:45,360 Speaker 1: got one more Yeah, we got one more day of 705 00:35:45,400 --> 00:35:48,799 Speaker 1: launch at the office. But look at the rally we 706 00:35:48,840 --> 00:35:51,880 Speaker 1: had it. No, today is the last day. Yeah, okay, 707 00:35:52,080 --> 00:35:53,840 Speaker 1: all right, we're kind of all over the place. But 708 00:35:53,880 --> 00:35:56,640 Speaker 1: that's the kind of week it hasn't been. But as 709 00:35:56,680 --> 00:35:59,160 Speaker 1: Charlie mentioned, stocks holding out of their dames. Let's get 710 00:35:59,160 --> 00:36:01,200 Speaker 1: into it with Michael shell, An, executive director in chief 711 00:36:01,200 --> 00:36:03,839 Speaker 1: at Messman officer at High Tower, r DM Financial Group 712 00:36:04,120 --> 00:36:06,759 Speaker 1: joining us once again on the phone from Westport, Connecticut. Michael, 713 00:36:06,760 --> 00:36:08,359 Speaker 1: good to have you back with us. How you doing, 714 00:36:08,880 --> 00:36:12,040 Speaker 1: Thanks very much, pleasure to be here. So, UM, are 715 00:36:12,040 --> 00:36:15,520 Speaker 1: we out of the woods? Well? This week has certainly 716 00:36:15,520 --> 00:36:17,719 Speaker 1: been an impressive rally. UM. I think you have to 717 00:36:17,719 --> 00:36:20,240 Speaker 1: sort of step back a little bit. The markets bottom 718 00:36:20,440 --> 00:36:22,799 Speaker 1: around October thirteenth or so, so this is sort of 719 00:36:22,800 --> 00:36:25,880 Speaker 1: the fourth multi week rally that we've had in this 720 00:36:25,920 --> 00:36:29,120 Speaker 1: bear market that started back in January, and when the 721 00:36:29,200 --> 00:36:33,280 Speaker 1: markets hit their lows October, I think sentiment was really 722 00:36:33,320 --> 00:36:37,000 Speaker 1: pretty negative and a couple other things have contributed. Recently, 723 00:36:37,000 --> 00:36:38,719 Speaker 1: There's been a little bit of a pullback in the dollar, 724 00:36:38,800 --> 00:36:41,960 Speaker 1: which has been super strong this year, and interest rates 725 00:36:41,960 --> 00:36:43,760 Speaker 1: have started to pull back a little bit as well. 726 00:36:44,280 --> 00:36:47,080 Speaker 1: So next week will be really interesting because the Fed 727 00:36:47,120 --> 00:36:49,840 Speaker 1: meets October sorry November one and second, and there's a 728 00:36:49,840 --> 00:36:52,600 Speaker 1: lot of anticipation of what they will or won't say 729 00:36:52,640 --> 00:36:55,960 Speaker 1: and whether they'll start to make their shift. But this 730 00:36:56,040 --> 00:36:59,879 Speaker 1: has certainly been an impressive rally so far. UM. One 731 00:37:00,040 --> 00:37:03,040 Speaker 1: thing just to mention is that the TAO, interestingly after 732 00:37:03,080 --> 00:37:05,560 Speaker 1: today is the first of the major indices to move 733 00:37:05,600 --> 00:37:08,839 Speaker 1: back above their key two day moving averages. So that's 734 00:37:08,840 --> 00:37:11,879 Speaker 1: something a lot of investors watched, separating a longer term 735 00:37:11,960 --> 00:37:14,480 Speaker 1: rally versus a short term rally. None of the other 736 00:37:14,520 --> 00:37:16,799 Speaker 1: major markets have done that, but that's certainly something to 737 00:37:16,800 --> 00:37:22,080 Speaker 1: to monitor going forward. So sorry, Carol, So we could 738 00:37:22,080 --> 00:37:23,120 Speaker 1: be out of the woods when it comes to the 739 00:37:23,160 --> 00:37:25,520 Speaker 1: Dow because that technical, but proceed with caution. I mean, 740 00:37:25,520 --> 00:37:28,520 Speaker 1: what's the takeaway there? Well, I think it's certainly an 741 00:37:28,560 --> 00:37:31,560 Speaker 1: encouraging sign when the markets, when the different industries move 742 00:37:31,560 --> 00:37:35,520 Speaker 1: above the moving average. Historically, at least, that helps separate 743 00:37:35,800 --> 00:37:38,680 Speaker 1: a short term move from a longer term, more sustainable move. 744 00:37:39,120 --> 00:37:40,719 Speaker 1: But I think in terms of whether we're out of 745 00:37:40,760 --> 00:37:43,080 Speaker 1: the woods, I think it's a little, certainly, in our opinion, 746 00:37:43,120 --> 00:37:45,279 Speaker 1: a little bit too early to say that. If you 747 00:37:45,320 --> 00:37:47,440 Speaker 1: look at some of the economic data, and I think 748 00:37:47,480 --> 00:37:49,680 Speaker 1: it's really important to keep an eye in the consumer, 749 00:37:49,719 --> 00:37:52,840 Speaker 1: for example, because that represents two thirds of the economy. 750 00:37:53,000 --> 00:37:55,400 Speaker 1: So on the positive side, looking at the consumer, uh, 751 00:37:55,560 --> 00:37:58,799 Speaker 1: you have the lowest unemployment since nine and you have 752 00:37:58,840 --> 00:38:02,080 Speaker 1: wages growing at five scent, but that's being offset by 753 00:38:02,160 --> 00:38:05,600 Speaker 1: higher inflation and rising rates, which are affecting the equity 754 00:38:05,640 --> 00:38:09,680 Speaker 1: and housing market. So the consumer appears to be pretty resilient, 755 00:38:09,760 --> 00:38:12,080 Speaker 1: and you know, that sort of fits in with whether 756 00:38:12,120 --> 00:38:14,640 Speaker 1: we're in a recession or going into a recession, and 757 00:38:14,719 --> 00:38:17,920 Speaker 1: so I think there's still some uncertainty about that and 758 00:38:17,960 --> 00:38:20,360 Speaker 1: what the said will be doing at their next meeting. 759 00:38:20,600 --> 00:38:22,160 Speaker 1: It's funny too that you mentioned the DOW. I mean, 760 00:38:22,200 --> 00:38:24,000 Speaker 1: I think I feel like we live in a world 761 00:38:24,040 --> 00:38:27,480 Speaker 1: where people kind of blow the towel to the side 762 00:38:27,600 --> 00:38:29,440 Speaker 1: and think about, Okay, what's the SMP doing, what's the 763 00:38:29,480 --> 00:38:32,879 Speaker 1: NAZAC one hundred doing. Um, So, how do you kind 764 00:38:32,920 --> 00:38:36,520 Speaker 1: of factor and what's going on with the doubt of 765 00:38:36,600 --> 00:38:39,160 Speaker 1: it back above its technical move, you know, above its 766 00:38:39,200 --> 00:38:42,000 Speaker 1: two day Michael, versus what we're seeing on the SMP 767 00:38:42,160 --> 00:38:44,880 Speaker 1: and the NAZAC, which is much more representative of a 768 00:38:44,960 --> 00:38:47,440 Speaker 1: broader part of the market. Yeah, that's a great question. 769 00:38:47,480 --> 00:38:49,960 Speaker 1: And if you're in the financial markets like we are 770 00:38:50,040 --> 00:38:54,080 Speaker 1: every day, most investors follow, most individual investors follow the doubt. 771 00:38:54,120 --> 00:38:56,279 Speaker 1: That's what gets all the headlines you see live on 772 00:38:56,320 --> 00:38:59,800 Speaker 1: the newspapers and on the news. But people follow the 773 00:38:59,840 --> 00:39:02,000 Speaker 1: mark gets on a regular basis, really follow the s 774 00:39:02,040 --> 00:39:04,680 Speaker 1: and P five hundred and one of the things we're seeing, 775 00:39:04,680 --> 00:39:07,160 Speaker 1: which is really interesting, is I think you're starting to 776 00:39:07,160 --> 00:39:09,880 Speaker 1: see in the past couple of weeks a shift, a 777 00:39:09,960 --> 00:39:13,040 Speaker 1: shift unfortunately out of technology, which has been the market 778 00:39:13,120 --> 00:39:15,480 Speaker 1: leader from much of the past decade or so. And 779 00:39:15,520 --> 00:39:19,000 Speaker 1: the shift is out of out of technology stocks. We 780 00:39:19,080 --> 00:39:21,600 Speaker 1: already started to see some of the money losing high 781 00:39:21,680 --> 00:39:25,360 Speaker 1: valuation stocks get hits starting in two thowy one, but 782 00:39:25,480 --> 00:39:28,040 Speaker 1: the shift is For example, if you look at the 783 00:39:28,120 --> 00:39:31,439 Speaker 1: equal weighted S and P five hundred this week, that's 784 00:39:31,520 --> 00:39:35,200 Speaker 1: up about five point four, while the sm P five hundred, 785 00:39:35,200 --> 00:39:38,160 Speaker 1: which is market cap weighted, is up just three nine. 786 00:39:38,880 --> 00:39:41,240 Speaker 1: So not a big difference, and it's only this week, 787 00:39:41,920 --> 00:39:44,040 Speaker 1: but I think that's an interesting trend that will have 788 00:39:44,080 --> 00:39:46,239 Speaker 1: to watch heading into the end of this year and 789 00:39:46,320 --> 00:39:48,960 Speaker 1: next year. Can I just look, you know, it's funny. 790 00:39:49,000 --> 00:39:51,000 Speaker 1: I was just kind of picking apart the marketer as 791 00:39:51,040 --> 00:39:54,560 Speaker 1: you're talking. Industrials are up almost seven percent this week. 792 00:39:54,640 --> 00:40:00,440 Speaker 1: Utilities are up, yeah, I mean real estate, finance souls. 793 00:40:00,520 --> 00:40:03,040 Speaker 1: I mean, most of the ten of the eleven major 794 00:40:03,080 --> 00:40:05,879 Speaker 1: industry groups in the SP five are higher. But it's 795 00:40:06,080 --> 00:40:10,560 Speaker 1: consumer staples, financials, real estate, utilities, industrials at the top. 796 00:40:11,160 --> 00:40:14,200 Speaker 1: Um what does that tell you, Michael Well, I think 797 00:40:14,200 --> 00:40:17,000 Speaker 1: it's sort of a mixed bag. Industrials have been approving recently, 798 00:40:17,040 --> 00:40:19,520 Speaker 1: We've seen some better relative strength than some of those stocks. 799 00:40:19,880 --> 00:40:23,160 Speaker 1: I think investors are still trying to figure out if 800 00:40:23,160 --> 00:40:25,480 Speaker 1: we're going to be going into a recession or not, 801 00:40:25,960 --> 00:40:27,400 Speaker 1: and if we are in a recession, is it going 802 00:40:27,440 --> 00:40:29,600 Speaker 1: to be a mild recession, which to us seems like 803 00:40:29,640 --> 00:40:32,399 Speaker 1: the most likely scenario because you don't have the kind 804 00:40:32,400 --> 00:40:35,520 Speaker 1: of major imbalances this time around that you did, for example, 805 00:40:35,520 --> 00:40:39,160 Speaker 1: in the banks going into two thousand eight. UM consumers generally, 806 00:40:39,440 --> 00:40:42,680 Speaker 1: although consumers the household savings rate is down to I 807 00:40:42,719 --> 00:40:46,759 Speaker 1: think about three point four percent, households in general don't 808 00:40:46,800 --> 00:40:50,600 Speaker 1: seem to be UM. Household savings in general seem to 809 00:40:50,640 --> 00:40:54,200 Speaker 1: be okay. Household balance sheets seemed to be okay. UM. 810 00:40:54,280 --> 00:40:56,160 Speaker 1: The one thing that we're starting to watch is housing 811 00:40:56,200 --> 00:40:58,360 Speaker 1: is starting to come down, and that's interest sensitive, so 812 00:40:58,440 --> 00:41:02,560 Speaker 1: that makes sense. But in terms of the sectors UM. 813 00:41:02,640 --> 00:41:04,520 Speaker 1: One of the other things to watch, for example, is 814 00:41:04,560 --> 00:41:06,560 Speaker 1: small caps, which has done well, and that's sort of 815 00:41:06,960 --> 00:41:09,120 Speaker 1: small caps would do better if we're coming out of 816 00:41:09,120 --> 00:41:11,919 Speaker 1: a recession, and it's sort of more speculation and people 817 00:41:11,920 --> 00:41:14,759 Speaker 1: are more optimistic. So I think it's too early to 818 00:41:14,800 --> 00:41:18,400 Speaker 1: sound the all clear, and it'll be interesting, especially to 819 00:41:18,440 --> 00:41:20,680 Speaker 1: see what the Fed says next week and what the 820 00:41:20,680 --> 00:41:23,879 Speaker 1: employment numbers come out as next week as well's week 821 00:41:23,920 --> 00:41:26,759 Speaker 1: next week. Yeah, do you expect the Fed to, I 822 00:41:26,800 --> 00:41:28,719 Speaker 1: don't know, give us some sort of guidance that they're 823 00:41:28,760 --> 00:41:33,120 Speaker 1: still looking at that they're considering basis points for December, Well, 824 00:41:33,160 --> 00:41:35,319 Speaker 1: I think it's I think seventy five basis points for 825 00:41:35,560 --> 00:41:38,000 Speaker 1: November is pretty much baked in the cake. But I 826 00:41:38,000 --> 00:41:40,360 Speaker 1: think for December that's an interesting that will be a 827 00:41:40,360 --> 00:41:43,040 Speaker 1: more interesting meeting. For this meeting, we don't have the 828 00:41:43,080 --> 00:41:45,239 Speaker 1: inflation data in front of us. We had already the 829 00:41:45,239 --> 00:41:48,760 Speaker 1: inflation data that came out today. For example, the feds 830 00:41:48,840 --> 00:41:53,480 Speaker 1: favorite core PC index actually rose month over month to 831 00:41:53,680 --> 00:41:56,080 Speaker 1: five point one pc, which is the highest level since 832 00:41:56,120 --> 00:41:58,399 Speaker 1: I think back in March when it was five point 833 00:41:58,440 --> 00:42:01,120 Speaker 1: four p But it the FED me eating next next 834 00:42:01,160 --> 00:42:03,239 Speaker 1: week or in two weeks, I think the keys to 835 00:42:03,320 --> 00:42:06,160 Speaker 1: watch will be one, Uh, does the Fed say we're 836 00:42:06,160 --> 00:42:09,360 Speaker 1: making progress on inflation, which would be a signal that 837 00:42:09,480 --> 00:42:12,239 Speaker 1: they're shift starting to shift policy, Or two do they 838 00:42:12,280 --> 00:42:15,680 Speaker 1: say that inflation remains higher than we'd like, which continues 839 00:42:15,719 --> 00:42:18,319 Speaker 1: to be the party line in recent weeks and will 840 00:42:18,360 --> 00:42:22,120 Speaker 1: probably indicate a seventy five basis point hike in December 841 00:42:22,160 --> 00:42:24,040 Speaker 1: may be more likely. All Right, we're gonna leave it 842 00:42:24,040 --> 00:42:26,439 Speaker 1: on that, hey, Michael, have a great weekend. Um, Thank 843 00:42:26,480 --> 00:42:29,840 Speaker 1: you so much, really appreciate it. Michael Sheldon, executive director 844 00:42:29,840 --> 00:42:33,200 Speaker 1: and chief investment Officer at High Tower r DM Financial Group, 845 00:42:33,239 --> 00:42:35,799 Speaker 1: based in Westport, and that's where we found him on 846 00:42:35,840 --> 00:42:39,760 Speaker 1: the phone on this Friday. Thanks for listening to Bloomberg 847 00:42:39,800 --> 00:42:43,440 Speaker 1: Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg 848 00:42:43,520 --> 00:42:45,359 Speaker 1: dot com, and you can also listen to our radio 849 00:42:45,400 --> 00:42:47,960 Speaker 1: show at two pm Eastern on Bloomberg Radio or watch 850 00:42:48,080 --> 00:42:50,440 Speaker 1: us on YouTube. Search to Bloomberg Global News.