WEBVTT - Are Bank Jobs at Risk From Technology? 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:32.680 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. Pimp Fox. 0:00:32.680 --> 0:00:35.240 There was a story that caught my eye yesterday about 0:00:36.280 --> 0:00:40.600 expectations for technology and robots to come in and throughout 0:00:40.600 --> 0:00:42.920 all the humans. Speak from Pandit, who ran City Group 0:00:43.240 --> 0:00:47.919 during the financial crisis, said that technological developments could result 0:00:48.080 --> 0:00:52.159 in a thirty percent decline of banking jobs in the 0:00:52.240 --> 0:00:54.920 next five years. That is soon, and that is a lot. 0:00:55.000 --> 0:00:57.360 That is thousands and thousands of people. So here to 0:00:57.400 --> 0:01:00.600 give us some context, perspective and perhaps uh an alternative 0:01:00.680 --> 0:01:03.960 view is Kevin McPartland, who is a principal market structure 0:01:03.960 --> 0:01:09.600 and technology analysts with Greenwich Associates, which is based in Connecticut. Um, Kevin, 0:01:09.760 --> 0:01:11.720 so what's your take on this? I would love to 0:01:11.760 --> 0:01:15.560 get your sort of in the ground observation. Does this 0:01:15.600 --> 0:01:18.800 seem realistic? Sure? Yeah, I'm gonna I think I'm gonna 0:01:18.800 --> 0:01:21.080 side with Jamie Diamond on this one. This isn't about 0:01:21.080 --> 0:01:23.560 a loss of jobs, but really a change in jobs. 0:01:23.560 --> 0:01:25.880 And I think, you know, we saw this, I think 0:01:25.880 --> 0:01:30.000 in the first dot com bubble back in thousand, when 0:01:30.360 --> 0:01:33.120 you electronic trading was really starting to take over and 0:01:33.160 --> 0:01:37.319 the trading desk makeup was starting to change. It wasn't 0:01:37.360 --> 0:01:39.360 that you were losing jobs. It was that you were 0:01:39.400 --> 0:01:43.200 taking what maybe before we're business school traders and replacing 0:01:43.240 --> 0:01:46.080 them with you know, computer science PhD s. Now. Obviously, 0:01:46.360 --> 0:01:49.880 technology and the markets have evolved quite a bit since then, UM, 0:01:49.920 --> 0:01:51.640 but I think we're in I think we're going through 0:01:51.640 --> 0:01:55.240 a similar transition where it's not just also in this 0:01:55.280 --> 0:01:58.280 time around, it's not just about the skill set of 0:01:58.320 --> 0:02:01.200 the people in those jobs, but where those jobs are. 0:02:01.320 --> 0:02:03.560 Some of those jobs maybe that we're at banks, the 0:02:03.600 --> 0:02:07.800 banks that are looking to increasingly outsource UM, you know, 0:02:07.960 --> 0:02:12.440 pieces of their technology infrastructure, UM too, you know, sometimes 0:02:12.480 --> 0:02:15.280 large firms that often UM startups as well. That we're 0:02:15.280 --> 0:02:17.720 just going to see some jobs shift around, right, more 0:02:17.760 --> 0:02:20.160 so than seeing these jobs just you know, disappear into 0:02:20.160 --> 0:02:22.799 thin air and have the robots take them. Kevin, let's 0:02:22.840 --> 0:02:25.440 let's focus if we can, on retail banking for for 0:02:25.560 --> 0:02:27.920 just a minute. I mean, is that the area that 0:02:27.919 --> 0:02:31.440 you're going to see the biggest job losses? I mean, 0:02:31.520 --> 0:02:33.920 I really think it's across the board. There's no question 0:02:34.000 --> 0:02:38.040 the industry is being disrupted. Um, you know, everything from 0:02:38.080 --> 0:02:39.720 you know, when you call for an issue on your 0:02:39.760 --> 0:02:42.880 credit card and you're talking to an automated voice. Um, 0:02:42.880 --> 0:02:45.800 but right down to the institutional trading desk, right where 0:02:45.800 --> 0:02:48.359 there's you know, less traders covering more clients, and they're 0:02:48.400 --> 0:02:50.679 able to do that because they have you know, more 0:02:50.720 --> 0:02:53.520 sophisticated technology in front of them that allows them to 0:02:53.560 --> 0:02:56.480 service those customers. And those customers also have more self 0:02:56.480 --> 0:02:59.200 service technology than they did. So I really do think 0:02:59.240 --> 0:03:01.880 this spans the gamut from you know, retail all the 0:03:01.919 --> 0:03:04.440 way through to the institutional markets. So when you talk 0:03:04.480 --> 0:03:07.720 about the disruption that's already happening, what do you see 0:03:07.800 --> 0:03:11.400 as the biggest technological development that will result in a 0:03:11.440 --> 0:03:14.800 mass shift in banking jobs over the next five years? 0:03:15.600 --> 0:03:18.320 I I so, I think it's a back end phenomenon 0:03:18.360 --> 0:03:20.399 that we don't really see, right, It's not the There's 0:03:20.400 --> 0:03:22.960 a lot of cool stuff that's going on that's on 0:03:23.000 --> 0:03:25.720 the screens, that's on your phone. But our ability to 0:03:25.880 --> 0:03:31.440 process data and analyze data, just the compute power that's available. Um. 0:03:31.480 --> 0:03:33.480 And there's a whole host of technologies that have made 0:03:33.520 --> 0:03:36.080 that possible. That's what we didn't have five or ten 0:03:36.160 --> 0:03:39.160 years ago. It's so so much compute power. Right. The 0:03:39.160 --> 0:03:41.680 fact that you know, with Apple's announced me yesterday that 0:03:41.760 --> 0:03:45.240 they can do um, that amazing face scanning and within 0:03:45.400 --> 0:03:48.560 a chip that's in your phone. UM. To think about 0:03:48.560 --> 0:03:51.800 that on on an institutional scale, with an Amazon or 0:03:51.800 --> 0:03:55.120 a Microsoft or Google data center. UM, there's just so 0:03:55.240 --> 0:03:57.720 much that computers can do with that power. UM that 0:03:57.800 --> 0:04:00.600 just wasn't available or affordable five or ten years ago. 0:04:00.720 --> 0:04:03.080 So let's just talk about you're saying the shift in jobs. 0:04:03.080 --> 0:04:04.960 But when you talk about that back end stuff, I 0:04:05.000 --> 0:04:07.120 think about Bank of New York, Melon, I think of 0:04:07.200 --> 0:04:11.360 some of these you know, classic processing focused firms that 0:04:11.440 --> 0:04:13.720 are big, have a lot of people. Are they going 0:04:13.760 --> 0:04:18.400 to go bankrupt? No? No, I think they they'll you know, 0:04:18.400 --> 0:04:20.880 their business model and they're the economics of the business 0:04:20.880 --> 0:04:24.880 will have to change as they you know, continue to uh. 0:04:24.920 --> 0:04:27.400 If we if we call it outsource more and more 0:04:27.440 --> 0:04:30.440 functions to computers. UM, they'll be able to then take 0:04:30.480 --> 0:04:32.360 the people that they do have and push them further 0:04:32.440 --> 0:04:35.240 upstreaming to get their you know, their customers, facing their 0:04:35.320 --> 0:04:38.320 their their new business, their innovation. They'll be able to 0:04:38.360 --> 0:04:41.120 have people more focused on those UM I guess you 0:04:41.120 --> 0:04:43.599 would call them like neck up tasks, where the computers 0:04:43.600 --> 0:04:46.360 can automate more, you know, more of what can be automated. 0:04:46.400 --> 0:04:49.279 Which I think that process is going on for arguably 0:04:49.360 --> 0:04:52.800 for decades. We're just continuing to move down that spectrum more, 0:04:52.880 --> 0:04:55.560 more and more complicated things can be automated. Kevin, I 0:04:55.600 --> 0:04:58.320 got one question for you, and it's only a word Equifax. 0:05:01.120 --> 0:05:03.320 I mean, there's you know, there's always going to be uh, 0:05:03.400 --> 0:05:06.360 you know, where where there's technology, the technology was still 0:05:06.400 --> 0:05:09.520 developed by humans. There always can be issues and there's 0:05:09.560 --> 0:05:11.360 always going to be some bad apples in the world. 0:05:11.360 --> 0:05:14.880 But you know, the industry is resilient and continues to uh, 0:05:15.240 --> 0:05:16.800 you know, continue, So you don't think it's gonna be 0:05:16.800 --> 0:05:19.560 a problem. You don't think it's gonna you know, you 0:05:19.600 --> 0:05:21.240 don't think some smart banker is going to say, you 0:05:21.240 --> 0:05:23.280 know what, maybe we've been a little overboard with all 0:05:23.320 --> 0:05:25.440 this technology and maybe we just ought to have people 0:05:25.720 --> 0:05:28.520 dealing with each other. You know what, it's a it's 0:05:28.520 --> 0:05:30.760 a it's a good point. So there's always going to 0:05:30.800 --> 0:05:34.800 be a relationship component where people will trust people. Um. 0:05:34.839 --> 0:05:37.400 But you know, we've also all become more comfortable with 0:05:37.440 --> 0:05:40.560 technology over the last ten years. Right, You're you're comfortable 0:05:40.560 --> 0:05:42.719 putting all of your banking information to paying your bills 0:05:42.720 --> 0:05:45.640 online and ten years ago you probably weren't, Thanks very much, 0:05:45.760 --> 0:05:49.360 Kevin McPartland. He is the principal Market structure and Technology 0:05:49.440 --> 0:06:06.039 at Greenwich Associates. Well, the rebuilding in Texas as well 0:06:06.080 --> 0:06:09.200 as in Florida continues, and here to tell us more 0:06:09.279 --> 0:06:11.159 about the people that will do a lot of the 0:06:11.200 --> 0:06:14.800 rebuilding is our own pressant. Gopaul Prashant joins us from 0:06:14.800 --> 0:06:18.359 our Boston bureau home to Bloomberg one oh six one Boston, 0:06:18.440 --> 0:06:22.200 Newburyport thirteen thirty in Metro West and the South Shore Pressant. 0:06:22.240 --> 0:06:24.560 Always a pleasure and maybe just to start off by 0:06:24.680 --> 0:06:29.080 describing this industry which really sort of favors mom and 0:06:29.279 --> 0:06:33.400 pop outfits, uh that are really expected to make a 0:06:33.520 --> 0:06:35.680 decent amount of money because there's a lot of clean 0:06:35.760 --> 0:06:38.760 up to go around. Well, it's it's kind of an 0:06:38.839 --> 0:06:41.800 industry that's sort of floorat of the radar. I don't 0:06:41.800 --> 0:06:45.560 think people even realized it was an industry. UM. But 0:06:46.080 --> 0:06:50.240 you know, you have uh, you have various sizes of companies. 0:06:50.320 --> 0:06:52.920 You know, the largest company in the space is a 0:06:53.000 --> 0:06:56.320 company called belfour out of Michigan. And and they do 0:06:57.120 --> 0:07:00.240 this reconstruction work around the globe. And I know they 0:07:00.320 --> 0:07:03.960 they've they're expecting record revenues this year at one point 0:07:04.040 --> 0:07:06.880 seven billions. So it's a it's a pretty large company. 0:07:07.600 --> 0:07:10.800 Um And and then you have a mid sized players 0:07:10.880 --> 0:07:14.560 like the one I wrote about, UM, a company called 0:07:14.640 --> 0:07:19.040 Cavalry Construction. Uh. You know, the name is pretty appropriate. 0:07:19.800 --> 0:07:23.640 They they mark they kind of ride into areas where 0:07:23.640 --> 0:07:28.720 they're hurricanes and other storms around the South and rebuild 0:07:28.800 --> 0:07:33.520 homes and businesses. Um and and then you have sort 0:07:33.560 --> 0:07:36.600 of smaller players. Many of them are sort of shady. 0:07:37.160 --> 0:07:39.040 So it could be people who just show up your 0:07:39.080 --> 0:07:42.200 door with a pickup truck after a storm. Uh. And 0:07:42.640 --> 0:07:44.840 you know, in some cases they might steal from you 0:07:45.240 --> 0:07:48.160 or or uh take a down payment and then leave. 0:07:48.320 --> 0:07:50.920 So not all of them are like that, of course, 0:07:51.000 --> 0:07:53.280 but there's they're they're various kinds of these companies. So 0:07:53.360 --> 0:07:56.960 how expensive is it bresciant to rebuild your home after 0:07:57.080 --> 0:08:00.400 it's gotten flooded. And what's the process of, say a 0:08:00.520 --> 0:08:04.680 Michigan based company, of going down to Houston, getting enough 0:08:04.760 --> 0:08:08.160 workers and flooding the zone, getting in there and uh 0:08:08.400 --> 0:08:12.320 and reconstructing things quickly. Well, okay, so let me take 0:08:12.400 --> 0:08:15.040 these two things. So in terms of the cost um 0:08:15.360 --> 0:08:19.360 it varies, so that the cavalry construction charges six to 0:08:19.480 --> 0:08:22.200 eight dollars a square foot for the first step of 0:08:22.240 --> 0:08:25.880 the process, which is to um, you know, pull out 0:08:25.920 --> 0:08:30.400 the soggy wood and dry wall and um uh and 0:08:30.640 --> 0:08:33.480 and and everything else in the house, rip it all out, 0:08:34.040 --> 0:08:37.600 bring in fans into human fires, treat for mold um. 0:08:37.960 --> 0:08:40.480 So that so for a three thousand square foot house, 0:08:40.800 --> 0:08:44.480 that alone would cost you about twenty four thou dollars um. 0:08:44.840 --> 0:08:48.120 And then to reconstruct a house of that size it 0:08:48.120 --> 0:08:52.000 would be about hift um for But you know, of 0:08:52.080 --> 0:08:55.200 course they're doing you know, houses up to twenty million, 0:08:55.360 --> 0:08:58.520 and those larger and more expensive houses are going to 0:08:58.600 --> 0:09:00.640 get much more expensive finish is and that will be 0:09:01.240 --> 0:09:03.559 very costly. And so that's one part of it. And 0:09:03.600 --> 0:09:06.120 the US about the company's the company from Michigan. So 0:09:06.480 --> 0:09:08.439 how do they go go about this day. I think 0:09:08.440 --> 0:09:12.079 they have even people that they sent to Texas. You know, 0:09:12.120 --> 0:09:17.199 they they have employees UM and so they sent I 0:09:17.280 --> 0:09:20.160 think at least that many there, and they have I 0:09:20.240 --> 0:09:22.280 think they're to start with in Florida. I think they 0:09:22.320 --> 0:09:26.000 were going to have uh fiveing or and forty, doubling 0:09:26.080 --> 0:09:28.719 the size of their existing force in Florida. They have 0:09:29.160 --> 0:09:32.320 people all over the country in the world, so there 0:09:32.360 --> 0:09:34.600 are already people in place, and they bringing additional people. 0:09:35.200 --> 0:09:37.400 For Sean, maybe you could speak about the the the 0:09:37.520 --> 0:09:42.000 additional people that might not be available because of either 0:09:42.200 --> 0:09:47.520 immigration laws or immigration fears, or just the disposition of 0:09:47.600 --> 0:09:51.160 the workforce. Yeah, that's a that's a tough issue because 0:09:51.200 --> 0:09:53.839 we we've had a kind of a labor shortage and 0:09:54.120 --> 0:09:58.839 construction for quite some time now, and uh so this 0:09:59.040 --> 0:10:01.319 is just sort of exact surbating that in places like 0:10:02.440 --> 0:10:07.319 UH Florida and Texas, UH and and Texas. UM. You know, 0:10:07.559 --> 0:10:11.400 a lot of these companies, including the ones reconstructing houses 0:10:11.480 --> 0:10:15.640 and also home builders UH and others who need construction 0:10:15.679 --> 0:10:20.400 workers are are struggling to find people. And that's it's 0:10:20.440 --> 0:10:24.160 getting worse because of uh, sort of the crackdown on 0:10:24.679 --> 0:10:28.640 undocumented workers. Many of them are sort of uh, you know, 0:10:28.880 --> 0:10:31.640 in hiding. Uh. What I've heard is in some cases, 0:10:31.800 --> 0:10:34.559 if you have a family, or say a husband and 0:10:34.640 --> 0:10:39.319 wife and kids, um, one of them on one of 0:10:39.400 --> 0:10:42.839 the parents will stop working and stay at home with 0:10:42.960 --> 0:10:45.439 the kids just in case the other, you know, the 0:10:45.520 --> 0:10:50.360 other one is uh is deported. So someone's home with 0:10:50.400 --> 0:10:53.360 the kids. So there's a lot of a lot of fear. Um. 0:10:54.160 --> 0:10:56.480 Texas in particular, there there's a bill in place that 0:10:57.679 --> 0:11:02.760 uh scaring people um uh immigration bill. So so there's uh, 0:11:03.640 --> 0:11:06.439 there's a lot of reasons why this could the the uh, 0:11:06.880 --> 0:11:10.040 the shortage could really slow down the reconstruction, and it 0:11:10.080 --> 0:11:16.800 will also potentially make it more who pays for this. Uh. 0:11:17.080 --> 0:11:22.199 So in the case of flooding, it's pretty much we 0:11:22.320 --> 0:11:26.280 have a we have National flood insurance, and so it's 0:11:26.280 --> 0:11:29.240 those premiums um and I think they're they're gonna have 0:11:29.400 --> 0:11:34.920 to they're subsizing that with taxpayers uh and UM. So 0:11:35.040 --> 0:11:38.680 there's that, and then you have homeowners dipping into their pockets. 0:11:39.840 --> 0:11:41.959 I think that's the bulk of it in Texas because 0:11:42.640 --> 0:11:45.600 you know, in the Houston area, for example, only fourteen 0:11:45.679 --> 0:11:49.959 percent of people have flood insurance of homeowners, so the 0:11:50.040 --> 0:11:54.240 bulk of these victims probably also do not have flood insurance, 0:11:54.240 --> 0:11:57.320 so they're going to have to figure something out. Shan. 0:11:57.400 --> 0:12:00.959 Then there's also the whole interest ructure and economy that 0:12:01.080 --> 0:12:02.880 needs to be put in place in order to support 0:12:02.920 --> 0:12:05.600 the workers once they arrive at the places where they're 0:12:05.600 --> 0:12:09.640 going to do all this reconstruction. Yeah, you can if 0:12:09.720 --> 0:12:12.640 you think about it, it's a it's a pretty uh 0:12:13.360 --> 0:12:17.839 difficult situation because it's there's a housing shortage. So a 0:12:17.920 --> 0:12:22.600 lot of the homes, you know, tens of thousands of apartments, 0:12:22.640 --> 0:12:24.360 I don't know the exact number of a hundred and 0:12:24.559 --> 0:12:27.599 fifty thousand houses or something like that were damaged and 0:12:28.320 --> 0:12:31.560 in Texas as a result of the storm. So there's 0:12:31.559 --> 0:12:34.160 a shortage of housing that just got a lot worse. Uh. 0:12:34.320 --> 0:12:36.719 And then you bring in all these people to kind 0:12:36.760 --> 0:12:40.600 of reconstruct, and they need a place to live. Uh. 0:12:40.720 --> 0:12:43.480 So you can imagine that houses that were not flooded 0:12:43.559 --> 0:12:46.679 or properties that were not flooded, those those uh, it's 0:12:46.720 --> 0:12:48.319 gonna get a lot more expensive to live there. So 0:12:48.440 --> 0:12:51.000 this is this is gonna be an ongoing issue. I 0:12:51.040 --> 0:12:53.840 gotta say, whoever got into this business is a genius, 0:12:54.000 --> 0:12:56.840 because I'm sure that they will only get busier, uh, 0:12:56.920 --> 0:12:58.920 and it's only going to get more lucrative. Or any 0:12:58.960 --> 0:13:01.760 of the real big property companies getting in on this. 0:13:03.000 --> 0:13:05.199 You know, I haven't heard about it yet. UM, I 0:13:05.440 --> 0:13:08.440 wouldn't be surprised. Uh. You know, it's a pretty It's 0:13:08.480 --> 0:13:13.160 still there's some big players, but there aren't that many. 0:13:13.360 --> 0:13:17.920 This company, bell for UH just keeps buying up smaller players, 0:13:18.080 --> 0:13:20.800 and you know, there were some regional ones that they've 0:13:20.960 --> 0:13:23.560 purchased and they're you know, so they're not that many 0:13:23.720 --> 0:13:27.040 very large companies, right. Preshanko Paul, thank you so much 0:13:27.080 --> 0:13:30.080 for joining us. Really a fabulous story and really interesting 0:13:30.200 --> 0:13:32.680 and I'm curious to see how many people actually shell 0:13:32.760 --> 0:13:36.320 out for for full renovations and making sure it's all okay. 0:13:36.600 --> 0:13:38.760 Praushanko Poul. He covers real estate for US. He is 0:13:38.800 --> 0:13:42.160 based in Boston, UH and he is a Bloomberg News 0:13:42.320 --> 0:13:57.440 reporter on Lisa Brown Waits along with Pim Fox. Yesterday, 0:13:57.960 --> 0:14:02.040 JP Morgan chief executive officer Jamie Diamond spoke at an 0:14:02.080 --> 0:14:06.040 investor conference in New York. He said that bitcoin bitcoin 0:14:06.280 --> 0:14:10.480 won't end well. It's a quote fraud and quote worse 0:14:10.679 --> 0:14:15.840 than tulip bulbs. Talking about the uh most well known 0:14:16.120 --> 0:14:20.240 example of a bubble in financial markets to discuss, I 0:14:20.280 --> 0:14:22.760 want to bring in Leonel Laurant. He's a columnist covering 0:14:22.840 --> 0:14:26.800 finance and markets for Bloomberg goad Fly based in London. Leonella, 0:14:26.960 --> 0:14:30.480 you wrote a column saying that perhaps Jamie Diamond is 0:14:30.600 --> 0:14:34.960 onto something and the bitcoin very much won't end well 0:14:35.200 --> 0:14:37.240 and will end up kind of blowing up. Can you 0:14:37.320 --> 0:14:42.360 explain your argument here? Yes, I think that even though 0:14:42.840 --> 0:14:46.440 Diamond's words may have got everybody excited and keen to 0:14:46.520 --> 0:14:50.400 point out how wrong and maybe even you know, outdated, 0:14:50.520 --> 0:14:53.040 his view is. I think his point is basically that 0:14:53.160 --> 0:14:56.560 this is a market mania like tulips, and that ultimately 0:14:56.640 --> 0:14:59.640 this is going to eat itself and collapse on it 0:14:59.760 --> 0:15:02.920 so and before any regulator gets involved. And my view 0:15:03.560 --> 0:15:06.400 and I look at bitcoin but also other sort of 0:15:06.520 --> 0:15:12.240 hyped up millennial alternative asset classes like marijuana stocks as well, 0:15:12.960 --> 0:15:15.640 and I just think that the amount of supply that's 0:15:15.680 --> 0:15:18.920 coming in and excitement around it maybe doesn't quite match 0:15:18.960 --> 0:15:20.440 the demand that we see on the ground. And I 0:15:20.560 --> 0:15:23.280 think that is reason enough to at least be skeptical 0:15:23.480 --> 0:15:27.120 about this idea that you can just keep growing exponentially. So, Lena, 0:15:27.160 --> 0:15:28.680 can you give us a little more example what you 0:15:28.800 --> 0:15:32.120 mean about supply. I know that you pinpointed the fact 0:15:32.200 --> 0:15:35.840 that even though bitcoin has attracted a lot of investor money, 0:15:36.240 --> 0:15:39.400 you can't actually use it to buy that much more 0:15:39.720 --> 0:15:45.200 in stores or common places of of buying stuff. So 0:15:45.600 --> 0:15:48.160 is that what you're talking about or is it something else? So? 0:15:48.240 --> 0:15:50.360 I think it's something else for me. There's a there's 0:15:50.360 --> 0:15:52.240 a couple of issues in terms of supply. I mean, 0:15:52.320 --> 0:15:55.680 first of all, there are new coins being created all 0:15:55.760 --> 0:15:58.640 the time. Uh the I think there's something like eight 0:15:58.720 --> 0:16:02.160 hundred cryptocurrencies you can track now on on coin cap 0:16:02.760 --> 0:16:06.160 and um, what's what's happening? There is essentially more and 0:16:06.280 --> 0:16:11.760 more new increasingly, Uh, you know, volatile and potentially risky 0:16:11.880 --> 0:16:16.960 currencies are being created. Bitcoin itself recently split into effectively 0:16:17.080 --> 0:16:19.560 with a new currency called bitcoin Cash that was supposed 0:16:19.600 --> 0:16:22.320 to improve upon the original. I mean that that alone 0:16:22.360 --> 0:16:26.440 has been enough to actually have investors questioning just how 0:16:26.840 --> 0:16:30.600 unique and valuable the If you just look at the technology, 0:16:30.640 --> 0:16:32.840 pind it, how unique and valuable it is I mean, 0:16:32.880 --> 0:16:35.720 if you have hundreds of this type of currency and 0:16:36.520 --> 0:16:40.520 you can't really pinpoint any increase in consumer adoption, right 0:16:40.560 --> 0:16:44.720 because analysts will tell you that since there's been a 0:16:44.800 --> 0:16:48.880 huge boom in trading bitcoin and other cryptocurrencies, but maybe 0:16:48.920 --> 0:16:51.760 not at all an increase in using it on the ground, 0:16:52.640 --> 0:16:54.760 that's enough for people to think, well, if there's a 0:16:55.040 --> 0:16:57.040 if there's a heck of a lot of supply and 0:16:57.160 --> 0:16:59.960 not a lot of actual on the ground adoption, isn't 0:17:00.080 --> 0:17:03.760 that a disconnect? In times of the investment thesis? Leonel, 0:17:03.920 --> 0:17:06.439 I want to just play Devil's advocate and separate these 0:17:06.440 --> 0:17:08.520 two issues for just a moment. Let's start with bitcoin, 0:17:08.600 --> 0:17:10.640 because I mean, there are new stocks that come onto 0:17:10.680 --> 0:17:12.560 the market all the time. Some of them are traded 0:17:12.600 --> 0:17:14.359 on exchanges that we know about, some of them are 0:17:14.400 --> 0:17:16.600 traded on exchanges that you don't want to know about. 0:17:17.000 --> 0:17:19.800 New bonds are created all the time, new asset classes, 0:17:19.920 --> 0:17:23.480 new investment instruments are created all the time. And you 0:17:23.560 --> 0:17:25.880 only have to ask someone who bought a commercial mortgage 0:17:25.920 --> 0:17:28.679 backed security what it's like to buy something that's new 0:17:28.760 --> 0:17:31.440 that doesn't have a ready market. We understand that, but 0:17:31.600 --> 0:17:34.440 isn't this a challenge to the way that banks operate, 0:17:34.600 --> 0:17:37.200 And doesn't it make sense that Jamie Diamond would say this, 0:17:38.880 --> 0:17:40.880 So you use a couple of interesting points. Do see 0:17:40.920 --> 0:17:44.520 the idea that new coins and they call themselves initial 0:17:44.600 --> 0:17:47.480 coin offerings, I think in a nodes to initial price offerings, right, 0:17:47.520 --> 0:17:49.399 I think the people who come up with these new 0:17:49.480 --> 0:17:51.720 coins want to be seen as new companies and I 0:17:51.800 --> 0:17:55.320 p s in their own right. Um, I honestly see 0:17:55.400 --> 0:17:57.800 this as much more speculative. I mean, if you look 0:17:57.840 --> 0:18:00.560 at the prospectus of an i P O, if you 0:18:00.640 --> 0:18:03.920 look at the attempts to actually make some claim to 0:18:04.080 --> 0:18:06.919 maximize shareholder value for a for a for a stock, 0:18:07.520 --> 0:18:10.080 I just don't see that happening on on the on 0:18:10.160 --> 0:18:12.520 the tokens, on on the I c O s. Hold 0:18:12.560 --> 0:18:14.840 on a second, because there's a difference between some of 0:18:14.960 --> 0:18:18.800 the new cryptocurrencies that are coming out through initial coin 0:18:18.920 --> 0:18:23.400 offerings and Bitcoin. For one, there actually is a critical 0:18:23.480 --> 0:18:27.200 mass with Bitcoin, and there is an established following and 0:18:27.400 --> 0:18:30.600 miners and everything else. So it's not quite the same 0:18:30.680 --> 0:18:32.760 as an i c O tied to a company that 0:18:33.359 --> 0:18:35.639 is a startup that no one's heard of. So I 0:18:36.000 --> 0:18:38.560 guess I have to wonder, you know, is that you 0:18:38.640 --> 0:18:41.600 know there will be a winner from the cryptocurrency boom, 0:18:41.800 --> 0:18:45.520 and there could very well be one cryptocurrency that gets 0:18:45.520 --> 0:18:47.560 adopted and becomes the thing, and I think that that 0:18:47.640 --> 0:18:50.840 could be the bet really with bitcoin now, I think 0:18:50.880 --> 0:18:54.000 we're maybe delving too much into the technology itself and 0:18:54.040 --> 0:18:57.399 whether it's and whether it serves a purpose and the price. 0:18:57.520 --> 0:18:59.400 I think the main reason why we are talking about 0:18:59.480 --> 0:19:02.360 this today is that it is now trading around four 0:19:02.400 --> 0:19:04.800 thousand dollars and slightly below, and at the start of 0:19:04.800 --> 0:19:06.359 the year it was one thousand dollars. I think that 0:19:06.440 --> 0:19:08.480 if this was just a question of saying, do you 0:19:08.600 --> 0:19:10.879 like the idea of bitcoin, do you like the code 0:19:10.920 --> 0:19:13.040 behind it? Do you see a community behind it? That's 0:19:13.080 --> 0:19:15.760 one thing the main reason why people are betting on it, 0:19:15.880 --> 0:19:18.760 speculating on it, playing it. I mean, I'm sorry. I 0:19:18.840 --> 0:19:20.480 think it's got to be the fact that that the 0:19:20.560 --> 0:19:22.720 price has gone up so much again some of like 0:19:22.800 --> 0:19:26.760 a fift increase in transaction volumes, but very little increase 0:19:26.800 --> 0:19:29.840 in consumer adoption on the ground. To me, that spells speculation, 0:19:30.040 --> 0:19:32.639 and it doesn't spell the kind of quote unquote good 0:19:32.680 --> 0:19:35.040 speculation where you think that something is going to be 0:19:35.119 --> 0:19:38.560 worth something for a fundamental reason. And to your other point, 0:19:38.600 --> 0:19:41.160 excuse me about about the bagging industry and whether Jamie 0:19:41.240 --> 0:19:45.040 Diamond has a vested interest. Well, okay, maybe, but I 0:19:45.119 --> 0:19:47.679 also feel like I think people people know that. I mean, 0:19:47.720 --> 0:19:49.800 there are there are plenty of bankers out there who 0:19:50.400 --> 0:19:53.720 might change their mind, who might even say, well, um, 0:19:54.000 --> 0:19:57.320 you know, I was very dismissive of it a few 0:19:57.359 --> 0:20:00.200 years ago. Now I'm not really going to take a view. Um, 0:20:00.720 --> 0:20:03.479 And frankly, I think it's totally okay, and it's good 0:20:03.520 --> 0:20:04.960 to change your mind. I think that the fact that 0:20:05.080 --> 0:20:08.200 he hasn't doesn't necessarily mean that this is just because 0:20:08.320 --> 0:20:10.439 he's he feels it's a threat to backs. I mean, 0:20:10.480 --> 0:20:12.399 we've got to leave it there. A line on Lauren, 0:20:12.480 --> 0:20:15.280 Thanks very much our Bloomberg gad Fly columns. Great column. 0:20:15.359 --> 0:20:30.000 Check it out on Bloomberg dot com. By one get 0:20:30.119 --> 0:20:33.680 one free. Yes, this applies to the iPhone eight and 0:20:33.880 --> 0:20:36.639 eight plus, among other phones from eight T and T 0:20:36.960 --> 0:20:39.400 now A T and T hasn't said whether the deal 0:20:39.440 --> 0:20:43.440 will be extended to Apple's most expensive phone ever, that's 0:20:43.480 --> 0:20:47.480 the nearly one thousand dollars I Phone ten. Here to 0:20:47.560 --> 0:20:50.320 tell us more is Shira Ovid are Bloomberg gad Fly 0:20:50.600 --> 0:20:54.639 columnists knowing all things technology and Apple? Shira, have you 0:20:54.680 --> 0:20:57.600 already set aside a little fun to purchase your new 0:20:58.040 --> 0:21:02.240 iPhone ten? I have not, I will confess, although I 0:21:02.320 --> 0:21:05.600 did walk by the Fifth Avenue Apple store this morning 0:21:05.960 --> 0:21:08.320 and there were a couple of dudes and lawn chairs 0:21:08.440 --> 0:21:10.399 on the sidewalk. Maybe they were just hanging out on 0:21:10.440 --> 0:21:13.359 the sidewalk, or maybe they were already starting a line 0:21:13.800 --> 0:21:16.840 for the new phones. Can I just before we get 0:21:16.880 --> 0:21:21.359 into any real substance, iPhone X is really iPhone ten? Well, 0:21:21.480 --> 0:21:26.520 I mean yes, doesn't that kind of why? Why the 0:21:26.640 --> 0:21:29.040 naming conventions are a little bit confusing now? Right? So 0:21:29.200 --> 0:21:36.200 the UM properly, the non fancy new iPhones should be 0:21:36.280 --> 0:21:40.000 called the seven s, but they called them eight, and 0:21:40.119 --> 0:21:44.280 then the iPhone ten. It's the letter X, but they 0:21:44.320 --> 0:21:49.200 pronounced it ten. Romanumer. It's the tant anniversary edition of 0:21:49.560 --> 0:21:52.080 the iPhone. UM. Apple is gonna have a hard time 0:21:52.160 --> 0:21:54.560 convincing people to call it the iPhone ten rather than 0:21:54.640 --> 0:21:57.159 the iPhone X, And just to annoy them, I'm going 0:21:57.240 --> 0:21:59.760 to call it the iPhone X. Okay, Well, that's got 0:22:00.080 --> 0:22:02.400 is there's more free publicity for Apple, because of course 0:22:02.440 --> 0:22:06.240 they don't get enough. Yeah, right, exactly, you can end 0:22:06.320 --> 0:22:08.520 up talking about them. We'll talk about what's inside the phone, 0:22:08.560 --> 0:22:10.760 what what can you expect. Let's say, before we get 0:22:10.800 --> 0:22:14.560 to the the iPhone ten, let's talk about the iPhone 0:22:14.600 --> 0:22:17.080 eight in the eight plus. What is so great about 0:22:17.119 --> 0:22:19.000 those phones that they bother to bring them out as 0:22:19.080 --> 0:22:21.639 new editions. Well, look, i mean the Apple does what 0:22:21.800 --> 0:22:26.520 it does every year, which is it It upgrades the 0:22:26.960 --> 0:22:30.480 current edition of the phone with more features and functions. 0:22:30.560 --> 0:22:34.040 So the processor is faster, the battery life is longer. 0:22:34.400 --> 0:22:37.240 They have a glass back now, which some people like 0:22:37.400 --> 0:22:41.080