WEBVTT - U.S. Hiring Stays Robust as Jobless Rate Falls 0:00:01.800 --> 0:00:04.440 This is Bloomberg Business Week. I'm Carol Masser and I'm 0:00:04.480 --> 0:00:07.280 Bloomberg Quick Takes Tim Stanivk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world to business and finance, 0:00:09.840 --> 0:00:13.680 plus technology, politics, economics, all purtnising the power of Business 0:00:13.680 --> 0:00:17.159 Week reporters and editors, not to mention our journalists and 0:00:17.160 --> 0:00:20.000 analyst in more than one twenty countries. You can download 0:00:20.000 --> 0:00:23.480 Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. You 0:00:23.480 --> 0:00:25.439 can also listen to our radio show at two pm 0:00:25.480 --> 0:00:28.360 Eastern Time on Bloomberg Radio or watch us on YouTube 0:00:28.400 --> 0:00:32.320 search Bloomberg Clovel News. Let's set the Business week agenda 0:00:32.560 --> 0:00:35.760 in the house. Abigail Doolittle, she's markets reporter at Bloomberg News. 0:00:35.800 --> 0:00:39.280 She is in our interactor broker studio, Yolenna, she is 0:00:39.280 --> 0:00:42.479 our senior US economist, a Bloomberg Economics on the phone 0:00:42.640 --> 0:00:44.640 from Long Island. We're going to get to the jobs 0:00:44.640 --> 0:00:46.920 report in just a moment, but let's talk markets a 0:00:46.920 --> 0:00:50.320 little bit. Abigail, the trade. How did investors read that 0:00:50.400 --> 0:00:53.640 job's report, which was really a good one. Yeah, it 0:00:53.680 --> 0:00:56.840 was a solid report. It's funny. I think everybody's tired 0:00:56.960 --> 0:01:00.520 after the month. We just had reporter, We just ad 0:01:00.640 --> 0:01:02.640 stocks are really not doing all that much. The S 0:01:02.720 --> 0:01:05.280 and P five hundred down slightly, the Dow up slightly, 0:01:05.520 --> 0:01:08.839 you know, just fluctuating here, a little bit more weakness 0:01:08.880 --> 0:01:10.840 for tech. And that of course is because where there 0:01:10.920 --> 0:01:13.280 was a huge reaction to the Job's report. The bond market. 0:01:13.319 --> 0:01:16.560 We have yields absolutely spiking. The two year yield currently 0:01:16.760 --> 0:01:20.240 up ten basis points at two, the ten year yield 0:01:20.560 --> 0:01:22.959 up three basis points at two thirty seven. We know 0:01:23.040 --> 0:01:25.520 what that means, an inverted yield curve, and not just 0:01:25.600 --> 0:01:27.360 for a blip, but right now that to ten yield 0:01:27.400 --> 0:01:30.880 curve is at its flattest going back to two thousands six, 0:01:30.920 --> 0:01:33.120 two thousand seven. Okay, so what's the bond market telling us, 0:01:33.120 --> 0:01:36.000 abigail that the FED has gotten the go ahead, the 0:01:36.000 --> 0:01:38.720 green light to go ahead and raise away. I mean, 0:01:39.160 --> 0:01:40.680 there was one guest on the open this morning that 0:01:40.680 --> 0:01:45.160 I was talking not just fifty basis point uh yeah, 0:01:45.200 --> 0:01:48.160 two back to back full point raises in the next 0:01:48.160 --> 0:01:53.120 two meetings. That's get ahead. Yeah. Alright, So so you Laida, 0:01:53.200 --> 0:01:56.280 come on in on this. It was a very upbeat report. 0:01:56.360 --> 0:01:58.560 How did you see it and then in the context 0:01:58.600 --> 0:02:01.520 of the broader economic backdrop here in here in the 0:02:01.600 --> 0:02:06.120 United States. Absolutely, and one of the biggest things for 0:02:06.160 --> 0:02:10.079 me in this report was a significant increase in participation 0:02:10.240 --> 0:02:15.040 rate and apart from a very healty payrolls game, so 0:02:15.360 --> 0:02:19.240 we saw three tents of an increase in prime age participation, 0:02:19.639 --> 0:02:23.160 which is just telling me that finally in all these 0:02:23.360 --> 0:02:27.920 workers who are waiting on the sidelines deciding to come back, 0:02:27.960 --> 0:02:31.120 whether it is because you know, we don't get any 0:02:31.160 --> 0:02:36.440 more uh COVID there payments from the government, or just 0:02:36.520 --> 0:02:40.960 because the cases are subsiding, so whatever that is. We 0:02:41.000 --> 0:02:44.760 are seeing significant strong participation in the labor markets. So 0:02:45.200 --> 0:02:49.680 that is really a good point because that will help, um, 0:02:49.760 --> 0:02:53.519 you know, keep wage pressures a little bit more contained, 0:02:53.800 --> 0:02:57.000 even though we will see continue to see a strong 0:02:57.040 --> 0:03:01.640 wage growth this year, uh, particularly early among um you know, 0:03:01.919 --> 0:03:08.320 uh professions that have a little bit lower income so satisficion, 0:03:08.400 --> 0:03:12.959 hospitality and healthcare. Was there was there anything particularly concerning 0:03:12.960 --> 0:03:18.200 in there to you well, not not not in the report. Uh, 0:03:18.360 --> 0:03:22.040 there was a little bit of a disappointment in terms 0:03:22.080 --> 0:03:24.960 of ours work, but that is expected. You know, in 0:03:25.040 --> 0:03:28.760 the first quarter, we we are going to see slow 0:03:28.840 --> 0:03:32.960 down in economic growth and ours work just simply because 0:03:33.000 --> 0:03:35.760 of uh, you know, a micron in the beginning of 0:03:35.800 --> 0:03:39.160 the quarter. But other than that, I think the the 0:03:39.200 --> 0:03:42.880 employment report today was really really strong in the game. Uh, 0:03:42.960 --> 0:03:46.640 there are a lot of good signs that you know, 0:03:46.840 --> 0:03:50.160 the labor market continues to recover and and actually there 0:03:50.240 --> 0:03:53.120 is quite a lot of room to still recover because 0:03:53.200 --> 0:03:57.320 we had seven million jobs below where we would have 0:03:57.360 --> 0:04:02.000 been if jobs continue to grow at trends, so one 0:04:02.040 --> 0:04:07.600 point six millions below the February mark, fis. But if 0:04:07.880 --> 0:04:10.440 we have seven million below where we would have been 0:04:10.680 --> 0:04:14.640 had grown at the trend, Wow, that's some interesting perspective, right, 0:04:14.720 --> 0:04:16.400 you know, back out COVID and kind of where we 0:04:16.400 --> 0:04:19.480 would have been versus uh, you know where we are 0:04:19.680 --> 0:04:24.560 because of it, um so abigail those treasury yields, like 0:04:24.640 --> 0:04:26.039 you know, I keep saying, like, you know, have we 0:04:26.080 --> 0:04:28.520 reached a top with yields and stuff? What did today's 0:04:28.520 --> 0:04:31.800 moves perhaps maybe remind us about where we still might 0:04:31.800 --> 0:04:33.960 go when it comes to higher yields. That is an 0:04:33.960 --> 0:04:37.560 excellent question, Carol, and I would say that relative to 0:04:37.560 --> 0:04:39.640 the ten year yield, if you look at a long 0:04:39.760 --> 0:04:43.800 term chart, and you see in yield the forty or 0:04:43.839 --> 0:04:46.720 fifty at this point year bull market for bonds, which 0:04:46.839 --> 0:04:50.080 is represented by that down trend. We right now are 0:04:50.160 --> 0:04:52.839 hitting up against it. So the question is will that 0:04:53.120 --> 0:04:57.800 very strong resistance hold. And uh, it's funny, it has 0:04:57.839 --> 0:05:00.159 every time over the last forty or fifty years, so 0:05:00.200 --> 0:05:02.279 there's good reason to think that it will, which would 0:05:02.279 --> 0:05:04.880 suggest that you're going to see some money go back 0:05:04.880 --> 0:05:07.400 into bonds. And it's funny. I was hearing one um 0:05:07.400 --> 0:05:11.880 from Pigim, an expert bond expert from Pigim saying that 0:05:11.960 --> 0:05:14.880 right now bonds, the pricing is so attractive that it 0:05:14.920 --> 0:05:17.600 almost makes sense in the new quarter to rebalance portfolios 0:05:17.600 --> 0:05:19.440 a little bit, take advantage of the prices and the 0:05:19.440 --> 0:05:23.279 low bonds, which would suggest that that that trend may 0:05:23.320 --> 0:05:25.600 may hold. So maybe yields are going to come back in, 0:05:25.680 --> 0:05:29.039 and some of the near term technicals suggests that as well. 0:05:29.080 --> 0:05:31.240 As for what that means for stocks, you know, it's 0:05:31.279 --> 0:05:33.800 interesting were it's hard to you know, we're talking about 0:05:33.839 --> 0:05:35.719 this the other day. You know, So long as there's 0:05:36.400 --> 0:05:39.080 the lower highs, it suggests that the buyers aren't as 0:05:39.160 --> 0:05:41.760 enthusiastic as the sellers, meaning the sellers are willing to 0:05:41.800 --> 0:05:44.479 sell more than the buyers will buy at higher levels. 0:05:44.520 --> 0:05:46.839 But if that breaks, you know, who knows, it could 0:05:46.839 --> 0:05:48.839 be a very different story. And also I would say 0:05:48.880 --> 0:05:54.320 the meme stocks as a measure of risk on you know, yeah, 0:05:54.520 --> 0:05:56.440 game stop today on the idea. Let's see if it's 0:05:56.440 --> 0:06:02.719 still it was earlier. It's actually it's were first now change. 0:06:02.720 --> 0:06:05.640 It's really the retail traders. But in any case, if 0:06:05.640 --> 0:06:07.880 they you know, the stock is up so much since 0:06:07.880 --> 0:06:11.799 it's low last year, right, yeah, alright, so it's another 0:06:11.839 --> 0:06:13.760 thing to be looking at. Abigail, Thank you so much, 0:06:13.760 --> 0:06:16.640 Abigail do Little Markets reporter on the phone is Elena 0:06:17.240 --> 0:06:19.080 are saying thanks to her as well. Member of our 0:06:19.080 --> 0:06:23.320 Bloomberg Economics team. This is Bloomberg Business Week with Carol 0:06:23.400 --> 0:06:27.839 Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 0:06:28.279 --> 0:06:31.160 We'll talk about firing on all cylinders. As Charlie was 0:06:31.200 --> 0:06:34.520 talking about the jobs report today, Uh, that US labor 0:06:34.560 --> 0:06:38.760 market report really just coming in strong, adding close to 0:06:38.800 --> 0:06:41.000 half a million jobs in the month of Marxi, unemployment 0:06:41.040 --> 0:06:44.520 rate falling by more than expected, highlighting a robust labor market. 0:06:44.560 --> 0:06:46.520 I know you've heard it a lot here on Bloomberg, 0:06:46.520 --> 0:06:49.360 but it is our top story and it's really strong, Hey, 0:06:49.400 --> 0:06:52.200 throwing you know, revisions of close to a hundred thousand 0:06:52.240 --> 0:06:54.840 also the last couple of months also pretty good. Yeah, 0:06:54.920 --> 0:06:56.320 So let's see what our next guest has to say. 0:06:56.360 --> 0:06:59.600 Peter Quigley is the president and CEO of Kelly It's 0:06:59.600 --> 0:07:04.200 safe point five billion dollar revenue global staffing solutions company. Peter, 0:07:04.279 --> 0:07:06.479 good to have you back with us. Hey, you have 0:07:06.520 --> 0:07:09.560 some really interesting insight given what you do at Kelly, 0:07:09.560 --> 0:07:13.920 and I'm wondering what sticks out to you about today's report. Well, 0:07:13.960 --> 0:07:15.760 thanks to Tim, it's going to be back with you. UM. 0:07:16.440 --> 0:07:19.240 Clearly another round of good news. His job growth continued 0:07:19.320 --> 0:07:23.400 at a solid pace in March. UM labor markets are 0:07:23.400 --> 0:07:28.960 steadily recovering to pre pandemic level. It's the eleventh straight 0:07:29.080 --> 0:07:33.720 month of four thousand plus, longest strets since started tracking 0:07:33.720 --> 0:07:38.040 that UM, so clearly good news. I think there's some 0:07:38.080 --> 0:07:43.520 other encouraging signs UM. Carol mentioned the unemployment rate coming down, 0:07:43.560 --> 0:07:48.080 but every demographic group saw unemployment drop, with the biggest 0:07:48.120 --> 0:07:51.720 drop among black workers, which is very encouraging. And I 0:07:51.800 --> 0:07:56.280 took away from the job to report some signs that maybe, uh, 0:07:56.880 --> 0:07:59.440 the COVID, the worst of COVID is behind us. You 0:07:59.560 --> 0:08:02.120 take into account that the number of people prevented from 0:08:02.160 --> 0:08:06.440 looking for work declined significantly, the number of people who 0:08:06.520 --> 0:08:10.440 missed work because of COVID declined significantly, UM, the number 0:08:10.480 --> 0:08:13.760 of people who didn't work because their employer closed or 0:08:13.840 --> 0:08:18.760 because of business closed declined significantly, and the number of 0:08:18.800 --> 0:08:23.840 employees that tell worked declined, suggesting that maybe offices are 0:08:23.960 --> 0:08:28.920 reopening and people are going back UM to brick and mortar. Alright, 0:08:29.000 --> 0:08:32.199 So yeah, I mean it just feels so positive. So 0:08:32.960 --> 0:08:36.319 in terms of particular areas, where are you seeing kind 0:08:36.320 --> 0:08:41.000 of overwhelming strength and where are you not? Well, today's 0:08:41.080 --> 0:08:45.040 jobs report revealed that the recovery is broad based. I mean, 0:08:45.080 --> 0:08:50.880 every almost every vertical UM saw decent job growth. So 0:08:50.920 --> 0:08:53.400 that's that's positive, and that's reflected in the demand that 0:08:53.440 --> 0:08:56.920 we're seeing from our customers. Across all of five of 0:08:56.960 --> 0:09:00.800 our business units are seeing strong demand UM and in 0:09:00.880 --> 0:09:06.160 particularly you wouldn't be surprised technology, life sciences, UM, warehousing, 0:09:06.240 --> 0:09:10.480 manufacturing are all very very strong. Uh. And so you 0:09:10.559 --> 0:09:14.120 know it's it's broad based. UM. What about when it 0:09:14.120 --> 0:09:16.680 comes to demographics on your own platform, and I'm glad 0:09:16.679 --> 0:09:19.840 you pointed out that every demographic groups unemployment drop in 0:09:19.880 --> 0:09:22.280 the most recent month. Is that something that you're also 0:09:22.360 --> 0:09:29.680 seeing when it comes to Kelly, Yeah, wee information, Well, 0:09:29.720 --> 0:09:34.560 we don't to the extent we can UM when employees 0:09:34.640 --> 0:09:38.360 volunteer the information. But the thing is with this great 0:09:38.440 --> 0:09:41.440 jobs report, I recalled that when I came home with 0:09:41.480 --> 0:09:43.840 a report card that was pretty decent, my mom would 0:09:43.880 --> 0:09:46.520 always tell me, this is good, but you can do better, 0:09:47.040 --> 0:09:52.880 And I think of us. But the I think in 0:09:52.920 --> 0:09:55.840 the labor market, we can do better by removing barriers 0:09:55.880 --> 0:10:00.800 that prevent more people from accessing meaningful work UM because 0:10:00.840 --> 0:10:04.080 despite the record number of job openings, too many barriers 0:10:04.360 --> 0:10:08.560 exist for hidden workers, including job seekers with non violent 0:10:09.280 --> 0:10:14.440 UH criminal records. And and just to quantify that for you, 0:10:14.559 --> 0:10:17.520 more than seventy eight million Americans, so thirty three percent 0:10:17.600 --> 0:10:21.239 of our working age population have a criminal record. That's 0:10:21.640 --> 0:10:28.280 nearly of those are non violent offenders. That's amazing. Well 0:10:28.280 --> 0:10:32.520 that and the unemployment rate among those workers is it's 0:10:32.559 --> 0:10:35.880 the highest it's ever been UM. And it's it's just 0:10:35.960 --> 0:10:39.559 good business to consider opening the funnel in this time 0:10:39.640 --> 0:10:44.840 of a dire labor shortage, and Americans frankly supported two 0:10:44.880 --> 0:10:48.440 other three. Americans believed that non violent mistakes in the 0:10:48.480 --> 0:10:51.720 past should not be an automatic disqualifier for a person 0:10:51.760 --> 0:10:57.040 from work. More agree companies should do more to eliminate 0:10:57.080 --> 0:11:02.240 discriminatory hiring practices, and um more than say they prefer 0:11:02.320 --> 0:11:06.480 to work for a company that UM doesn't have discriminatory 0:11:06.640 --> 0:11:12.079 hiring practices. So um it's a good business. Yeah, No, absolutely, Peter. 0:11:12.200 --> 0:11:13.520 You know, but as this is a do as I say, 0:11:13.559 --> 0:11:15.480 not as I do, because I feel like most of 0:11:15.600 --> 0:11:18.720 most people would say absolutely they should be included, and 0:11:18.760 --> 0:11:20.560 that you know, when it comes down to it, you 0:11:20.559 --> 0:11:22.920 don't see it put into practice. We certainly have talked 0:11:22.960 --> 0:11:27.040 to CEOs in various heads of institutions who who have 0:11:27.240 --> 0:11:30.960 put that into action and are hiring people, you know, 0:11:31.280 --> 0:11:34.920 with as you said, UM, you know, maybe questionable backgrounds 0:11:35.200 --> 0:11:40.600 or non violent offenders. Um. When you have conversations with 0:11:40.679 --> 0:11:43.240 heads of companies and CEOs who are all dealing with 0:11:43.280 --> 0:11:46.160 these tight labor markets, how many of them are actually 0:11:46.200 --> 0:11:50.240 taking steps to to hire those individuals. I would say 0:11:50.240 --> 0:11:53.720 there's a lot more conversations happening, and and the best 0:11:53.720 --> 0:11:57.040 way to promote it is to show them the proof. 0:11:57.240 --> 0:12:02.640 So we had UM PROGRAMM in Toyota with Toyota in Lexington, Kentucky. 0:12:02.840 --> 0:12:07.400 We screened more than a thousand applicants of them are 0:12:07.400 --> 0:12:12.560 clear to apply for jobs. UM in Toyota increased its 0:12:12.559 --> 0:12:17.319 talent flow by increased its diversity by almost ten percent, 0:12:17.960 --> 0:12:22.600 and it reduced turnover by SEU. And it's in just 0:12:22.760 --> 0:12:26.960 one example, but more companies need to do. Uh to 0:12:27.080 --> 0:12:30.240 do that. In April is National Second Chances Month, so 0:12:30.280 --> 0:12:33.360 it's a perfect time to start. Yeah. No, it's something 0:12:33.480 --> 0:12:37.040 for certainly people to think about in generally tight labor 0:12:37.080 --> 0:12:40.079 market or not. Peter quickly, thank you so much, President 0:12:40.080 --> 0:12:42.960 and chief executive officer over at Kelly joining us on 0:12:43.000 --> 0:12:45.840 the phone from Michigan. You know this is where others 0:12:45.840 --> 0:12:48.840 would argue in terms of immigration, right, UM, Because I 0:12:48.880 --> 0:12:50.679 do wonder one of the big macro things that I'm 0:12:50.679 --> 0:12:53.600 thinking about, Tim is that if indeed you don't get 0:12:53.640 --> 0:12:56.120 the labor participation that we saw pre pandemic, that not 0:12:56.200 --> 0:12:59.840 everybody comes back. You know, where are companies going to 0:13:00.000 --> 0:13:02.360 line workers? And if they can't find workers, how does 0:13:02.400 --> 0:13:06.160 that then slow down profit growth? Revenue growth? And how 0:13:06.160 --> 0:13:08.080 does that slow down the economy. Look how many jobs 0:13:08.080 --> 0:13:10.000 are open versus how many people are available to work 0:13:10.160 --> 0:13:13.280 exactly exactly, so something will continue to cover. All right, 0:13:13.400 --> 0:13:16.120 So getting started on this Friday. It is Friday, and 0:13:16.200 --> 0:13:20.400 this is Bloomberg. You're listening to Bloomberg Business Week with 0:13:20.600 --> 0:13:25.400 Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. 0:13:25.720 --> 0:13:27.720 There's a story in the new issue of Bloomberg Business 0:13:27.760 --> 0:13:30.640 Week that's just out on the Bloomberg at Bloomberg dot com, 0:13:30.640 --> 0:13:33.360 business Week dot com and of course on newsstands. Is 0:13:33.400 --> 0:13:35.160 what about cash less a t m s that have 0:13:35.240 --> 0:13:39.080 grown into a seven billion dollar marijuana loophole? Cash less 0:13:39.160 --> 0:13:41.679 a t m s? Do you get that? No, that's 0:13:41.679 --> 0:13:43.559 why we gotta talk to Tiffany carry All about it. 0:13:43.640 --> 0:13:46.040 She's consumer reporter for Bloomberg News. She's with us on 0:13:46.040 --> 0:13:48.520 the phone from Westchester, New York. Also joining us is 0:13:48.559 --> 0:13:51.280 Joel Webber, editor at Bloomberg Business Week. He joins us 0:13:51.280 --> 0:13:55.440 on the access line from Brooklyn. Joel, this is really interesting. UM. 0:13:55.480 --> 0:13:57.600 I want to hear though, before we get into the story, 0:13:57.679 --> 0:13:59.880 how it came together and and you know, in terms 0:13:59.880 --> 0:14:02.600 of UM, really what Tiffany had to do in order 0:14:02.640 --> 0:14:05.400 to understand of the cash less ATMs. Did it involve 0:14:05.720 --> 0:14:09.960 getting people to buy marijuana? Uh? No comment, Yes, UM 0:14:10.080 --> 0:14:14.560 the story. I honestly found out about this one late. UM. 0:14:14.640 --> 0:14:19.920 But if you make a legal transaction for cannabis and 0:14:20.040 --> 0:14:24.960 most of the country but um our reporting was in Massachusetts. UM. 0:14:25.000 --> 0:14:28.920 If you go to pay cash is not encouraged because 0:14:28.960 --> 0:14:30.360 they don't want to have a whole lot of cash 0:14:30.400 --> 0:14:34.000 on hand. UM. And you will find that you can 0:14:34.040 --> 0:14:38.680 make a payment with plastic, except that it doesn't know 0:14:38.760 --> 0:14:41.200 at the point of sale, they'll basically say, by the way, 0:14:41.320 --> 0:14:43.040 you're not gonna this isn't gonna show up as a 0:14:43.040 --> 0:14:45.560 credit card transaction. We're gonna have an a t M fee. 0:14:45.600 --> 0:14:48.360 And it's all very confusing, it's all very legal, but 0:14:48.440 --> 0:14:52.680 it turns out that it it basically is masking the 0:14:52.720 --> 0:14:57.080 transactions that so that the banking system, which is all 0:14:57.200 --> 0:15:02.040 trying to be in compliance with federal law, UH, is 0:15:02.040 --> 0:15:05.920 basically this massive workaround. UM. And it also turns out 0:15:05.960 --> 0:15:08.160 that there's a number of providers who are making a 0:15:08.240 --> 0:15:13.480 lot of money on this how much money diviny. You 0:15:13.640 --> 0:15:16.640 look at the fact that you know we've got eight 0:15:16.680 --> 0:15:20.000 billion in marijuana sales expected this year, and a lot 0:15:20.040 --> 0:15:23.120 of folks I spoke with estimated you know that these 0:15:23.160 --> 0:15:26.040 cash of a t m s are a quarter probably 0:15:26.040 --> 0:15:29.640 of those. You know, this is bringing seven billion dollars 0:15:29.680 --> 0:15:33.440 into the banking system disguised as something else. And then 0:15:34.000 --> 0:15:36.360 you know what people are profiting from in this industry 0:15:36.400 --> 0:15:39.280 really is the fees every time you use one of 0:15:39.320 --> 0:15:42.880 these technologies, you're paying you know, anywhere from to to 0:15:42.960 --> 0:15:46.480 three fifty for the privilege of using your debit card 0:15:46.520 --> 0:15:51.760 in this, you know, potentially illegal form of transaction. And then, um, 0:15:51.800 --> 0:15:54.040 you know, someone is making the profits off those. And 0:15:54.480 --> 0:15:56.760 what I found in this story is this whole high 0:15:56.840 --> 0:16:01.520 risk payment processing industry which exists side of cannabis. Um. 0:16:01.560 --> 0:16:03.760 You know, it's pretty hard to to figure out who's 0:16:04.080 --> 0:16:06.120 who's doing it, but there are a lot of players 0:16:06.200 --> 0:16:11.000 that are becoming more well known in the space. Tiffany How, 0:16:11.360 --> 0:16:16.680 how is this Okay? It's it jold, you know, use 0:16:16.760 --> 0:16:19.640 some terminology, use some terminology, but the fact is is 0:16:19.680 --> 0:16:23.840 that it's the marijuana industry. It's billions of dollars a year. 0:16:24.440 --> 0:16:27.240 It just seems like it's kind of existing in this 0:16:27.560 --> 0:16:31.520 really strange space between something that is being hidden but 0:16:31.600 --> 0:16:35.120 at the same time allowed. That's right, And I think 0:16:35.160 --> 0:16:37.520 a lot of people think that, you know, safe banking 0:16:37.600 --> 0:16:41.400 legislation or other legislation might pass this year, and maybe 0:16:41.400 --> 0:16:43.880 this problem is going to go away. But the problem 0:16:43.920 --> 0:16:46.040 has been around for quite a few years, and as 0:16:46.080 --> 0:16:49.960 the cannabis industry grows, these transactions continue to grow, which 0:16:50.080 --> 0:16:52.160 I think is why they're getting more on visa and 0:16:52.200 --> 0:16:55.080 master cards radar. So, you know, a lot of the 0:16:55.120 --> 0:16:59.200 folks I spoke with who are not lawyers to the 0:16:59.240 --> 0:17:03.359 company's involve said, you know, trying to look at it objectively. 0:17:03.560 --> 0:17:05.159 I mean, if you're lying to a bank, how is 0:17:05.200 --> 0:17:07.080 that not fraught on the bank, or how is this 0:17:07.160 --> 0:17:11.520 not a form of transaction laundering because you're essentially disguising 0:17:11.520 --> 0:17:14.280 the nature of the transaction. So this is very legal 0:17:14.840 --> 0:17:18.080 interesting legal issues here. It'll be interesting to see, you know, 0:17:18.119 --> 0:17:21.239 if this problem sort of quietly goes away, or if 0:17:21.240 --> 0:17:24.159 it gets considered as as the Senate decides what to 0:17:24.200 --> 0:17:27.960 do about legislation, and as the industry evaluates the alternative, 0:17:28.119 --> 0:17:29.960 if it's not going to be a while until we 0:17:30.000 --> 0:17:33.440 get safe banking and no clues as to who's setting 0:17:33.520 --> 0:17:37.600 this up and kind of putting this in place. You know, 0:17:37.720 --> 0:17:42.159 this is part of the fascination of the story is that, um, 0:17:42.200 --> 0:17:44.879 you know, there's so many different companies in this space, 0:17:44.920 --> 0:17:49.160 and they all operate through something called an ISO, which 0:17:49.200 --> 0:17:52.480 is like a reseller. So in essence, I was finding 0:17:52.520 --> 0:17:55.080 a lot of the names of the companies who seem 0:17:55.160 --> 0:17:59.280 to offer the payment processing are actually repelling it for 0:17:59.440 --> 0:18:02.440 someone else who's maybe even reselling it from someone else 0:18:02.440 --> 0:18:05.240 who licensed it from someone else. So that's what you 0:18:05.280 --> 0:18:08.200 have to maybe read the story as it goes into 0:18:08.240 --> 0:18:12.480 it and see what how that whole industry works. It's 0:18:12.520 --> 0:18:16.520 so hazy, hazy, hazy ha um. But but Tiffically, I mean, 0:18:16.560 --> 0:18:18.200 I just come out and there's like so many jokes 0:18:18.160 --> 0:18:20.480 that we made here, but um, Tiffany. And I'm also 0:18:20.520 --> 0:18:24.040 curious because a number of companies have really um shown 0:18:24.080 --> 0:18:26.679 that they can thrive in this hazy little space, right, 0:18:26.760 --> 0:18:29.359 Who are some of the providers and and how are 0:18:29.400 --> 0:18:34.200 they competing with one another? Well, you know, ultimately, when 0:18:34.240 --> 0:18:36.879 I spoke to people in the industry, they talked a 0:18:36.880 --> 0:18:42.600 lot about companies UM Transact first and Michael Schwartzman UM, 0:18:42.640 --> 0:18:44.959 who founded the company is not clear what his role 0:18:45.040 --> 0:18:48.600 is now uh and pabotic. But then what happens is 0:18:48.600 --> 0:18:51.479 there's been this whole rise in the pop fintech world 0:18:52.080 --> 0:18:54.600 of these companies like Duchy and slow Hub. They have 0:18:54.680 --> 0:18:57.440 some very famous investors like Jay Z and Snoop Dogg, 0:18:58.000 --> 0:19:01.480 and they end up doing what they integrating with these 0:19:01.520 --> 0:19:05.960 payments processors because they want to offer the marijuana dispensaries 0:19:06.000 --> 0:19:09.680 like holistic software to manage everything from tax accounting to 0:19:10.280 --> 0:19:13.200 how they run the cash registers. So, you know, some 0:19:13.240 --> 0:19:15.960 folks said, look, you know, they're basically promoting the payment 0:19:16.040 --> 0:19:18.720 processes by integrating with them, and in some cases, I'm 0:19:18.760 --> 0:19:21.560 not sure if they know all the details about how 0:19:21.600 --> 0:19:24.560 the industry works. So it'll be interesting to see. I 0:19:24.560 --> 0:19:27.040 think a lot of companies have new technologies that they're 0:19:27.040 --> 0:19:29.640 planning on launching, and I'll actually be writing more about 0:19:29.680 --> 0:19:33.399 that next week. Hey, tiffany um, can you explain a 0:19:33.440 --> 0:19:36.880 little bit about how these transactions are misidentified in some 0:19:36.920 --> 0:19:42.800 cases as businesses that are adjacent to the actual weed shop. 0:19:42.880 --> 0:19:46.280 You still you share a story of a McDonald's that 0:19:46.680 --> 0:19:51.120 is looks like it's getting credit for at M transactions, 0:19:51.160 --> 0:19:54.200 but they're actually being bought at a weed store next door. 0:19:55.320 --> 0:19:57.160 That's right. Yeah, So that was sort of the foundation 0:19:57.200 --> 0:20:00.520 of the story, was actually trying to trade a single 0:20:00.560 --> 0:20:03.840 transaction or in this case, we looked at eight transactions 0:20:03.960 --> 0:20:06.720 um and finding that when they show up on the 0:20:06.720 --> 0:20:11.639 customer's bank statements, they show up under an address. But 0:20:11.680 --> 0:20:13.600 if you google the address, it's not the address of 0:20:13.600 --> 0:20:17.040 the dispensary, it's the address of the McDonald's next door, 0:20:17.200 --> 0:20:19.640 or the piece of shop next door, or in one case, 0:20:19.720 --> 0:20:23.320 the business called New Dude Food clearly not a marijuana 0:20:23.840 --> 0:20:27.159 um shops. And then you know, when you look at 0:20:27.560 --> 0:20:30.240 at those you can see clearly there's some mis labeling 0:20:30.359 --> 0:20:33.600 or miss cooding going on. But in general they do 0:20:33.680 --> 0:20:36.840 show up as a t M withdrawals on customers bank statements, 0:20:37.040 --> 0:20:41.040 and in fact, that's so effective at disguising them that 0:20:41.240 --> 0:20:43.800 in some of the instances we saw City Bank and 0:20:43.840 --> 0:20:47.600 Bank of America, we're reimbursing the people the three dollars 0:20:47.600 --> 0:20:50.760 and fifty cents or the two dollars and cents or 0:20:50.800 --> 0:20:56.159 their purchase. So here you have this crazy technology that is, 0:20:56.880 --> 0:21:00.919 you know, existing in this weird legal intersown and then 0:21:00.960 --> 0:21:04.320 you have these big banks actually reimbursing customers for using it, 0:21:04.359 --> 0:21:07.800 which just seemed like the ultimate irony here. But McDonald's 0:21:07.840 --> 0:21:11.640 glad to have them nearby the dispensary because you're right. 0:21:12.600 --> 0:21:15.280 Great story, Tiffany Carry, Thank you so much, Consumer reporter 0:21:15.320 --> 0:21:18.000 of Bloomberg News, Jill Weber, Editor Business Week, or thanks 0:21:18.000 --> 0:21:19.320 to you as well. Check out the new issue of 0:21:19.359 --> 0:21:22.720 Bloomberg Business Week on newsstands, online and on the Bloomberg 0:21:22.960 --> 0:21:26.920 This is Bloomberg Business Week with Carol Masser and Bloomberg 0:21:27.040 --> 0:21:31.960 Quick Takes Tim Stinovic on Bloomberg Radio. Among today's crypto headlines, 0:21:32.320 --> 0:21:34.560 one is on the U s SEC leaning on crypto 0:21:34.560 --> 0:21:37.439 firms to report assets that they are holding on behalf 0:21:37.440 --> 0:21:39.480 of customers on their balance sheets. And then to myself 0:21:39.480 --> 0:21:42.760 one about India basically saying it's going to frame cryptocurrency 0:21:42.840 --> 0:21:46.440 law only after a global consensus emerges on regulating such 0:21:46.440 --> 0:21:48.679 assess According to a person familiar, I mean that is 0:21:48.720 --> 0:21:51.000 the world we are in. It absolutely is, and we've 0:21:51.000 --> 0:21:52.879 got a great voice. Bill Hind, the co founder of 0:21:52.920 --> 0:21:55.480 Soma Finance, joining us on the phone from Connecticut. We 0:21:55.520 --> 0:21:59.280 should note Soma Finance it's a FINNRA registered multi asset 0:21:59.359 --> 0:22:04.400 token issuance platform also a deck decentralized exchange for digital assets, 0:22:04.720 --> 0:22:07.760 not just for retail investors, but for institutional investors as well. Bill, 0:22:07.840 --> 0:22:10.679 good to have you with us. Great to be here, 0:22:10.680 --> 0:22:12.159 Thanks for having me on. I think a lot of 0:22:12.160 --> 0:22:14.920 people would have just you know, he heard me read 0:22:15.000 --> 0:22:17.760 that and said, wow, that was quite a mouthful. Uh. So, 0:22:17.840 --> 0:22:22.840 explain what some of Finance does in lay persons terms. Yeah, so, um, 0:22:22.960 --> 0:22:27.200 Some of Finance is a joint venture with Tritorian Capital 0:22:27.280 --> 0:22:30.359 and another firm called Montre Dao. Tritorian Capital as a 0:22:30.400 --> 0:22:33.720 registered broker dealer, as you mentioned, UM, and through the 0:22:33.800 --> 0:22:36.880 joint venture, we're able to offer UM or. We're going 0:22:36.920 --> 0:22:43.119 to offer a decentralized platform like crypto traders like, but 0:22:43.240 --> 0:22:47.840 in a regulated and compliant fashion. Okay, So give us 0:22:47.880 --> 0:22:50.520 an idea I'm always curious about We're all still trying 0:22:50.560 --> 0:22:52.920 to figure a way through anything to do with crypto 0:22:53.040 --> 0:22:54.800 and f t s and so on. But give us 0:22:54.800 --> 0:22:56.840 an idea of the growth that you're seeing on your platform, 0:22:56.840 --> 0:23:01.240 where the most activity is uh and so on. So 0:23:01.280 --> 0:23:03.400 we the platform has yet to launch to the launch 0:23:03.440 --> 0:23:05.800