Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller.
Speaker 2: Every business day we bring you interviews from CEOs, market pros,
Speaker 2: and Bloomberg experts, along with essential market moving news.
Speaker 3: Find the Bloomberg.
Speaker 1: Markets Podcast on Apple Podcasts or wherever you listen to podcasts,
Speaker 1: and at Bloomberg dot com slash podcast. Greg Ebel joins us.
Speaker 1: He's the CEO of n Bridge Energy. It's in New
Speaker 1: York Stock Exchange listed company the tickers e n BE.
Speaker 1: The company reported some earnings today, So Greg, talk to
Speaker 1: us about thanks so much for joining us here. Talk
Speaker 1: to us about kind of what you guys reported with
Speaker 1: your latest earnings results and kind of what's the outlook
Speaker 1: you're telling the street these days.
Speaker 3: Yeah, for sure, Matt, Paul, great to be with you again.
Speaker 3: And yeah, a very solid quarter both operationally and financially
Speaker 3: for us, right across all of our business. You know,
Speaker 3: we saw record volumes and results on the liquid's business,
Speaker 3: our mainline pipeline system saw record volumes, our export facility
Speaker 3: record volumes, and so we beat obviously the street estimates
Speaker 3: for the quarter, which is great, and we confirmed that
Speaker 3: we would meet our goals for the full year, and
Speaker 3: we announced a little bit of tucky in m and A.
Speaker 3: You know, we bought some renewable offshore wind facilities that
Speaker 3: we'd originally participated in in Germany, and then renewable natural
Speaker 3: gas facilities in the United States, all very long term contracts,
Speaker 3: you know, ten years or more, and all very consistent
Speaker 3: with that, you know, all of the above approach that
Speaker 3: I think the public wanted, investors want, and that actually
Speaker 3: creates a lot of value for us. We're pretty excited
Speaker 3: about the road ahead.
Speaker 2: Why is I mean, the stock's up today, but why
Speaker 2: is it down thirteen percent year today? What's is it
Speaker 2: the underlying commodity that's a problem. Is it concerned about demand?
Speaker 2: What's holding the stock down?
Speaker 3: You know what we have been in, very proudly so
Speaker 3: for decades, increase the dividend year after year, very utility
Speaker 3: like in that structure. And as you know, you guys
Speaker 3: pointed off just a few minutes ago, with interest rates
Speaker 3: that have been up, that impacts dividend paying stocks like ourselves.
Speaker 3: And as you've seen in the last call it four days,
Speaker 3: what we've seen forty to fifty sixty basis points coming
Speaker 3: in on the ten year You've seen the stocks that
Speaker 3: pay dividends react. So it's not the commodity it's not
Speaker 3: energy demand we see up those we don't have commodity exposure.
Speaker 3: Really is that ten year interest rate side of things.
Speaker 3: So that's a macro factor that frankly, I can't do
Speaker 3: anything about. What we can do is make sure the
Speaker 3: company runs well, meets its earnings targets, and continues to
Speaker 3: build up both organic growth and some of these acquisitions.
Speaker 1: Greg talk to us about again. You mentioned some of
Speaker 1: these acquisitions and the investments you make in renewables. Realistically,
Speaker 1: do you have a good handle on the types of
Speaker 1: returns you can get on renewables. Feels like maybe some
Speaker 1: of the shine is off that side of the energy business.
Speaker 3: Well, it's a good point. I think investors are starting
Speaker 3: to figure out that they are. You know, renewables are
Speaker 3: all not built the same, right, So those that have
Speaker 3: long term contracts in other words, you know, ten fifteen
Speaker 3: year contracts with great counterparties, So larger utilities or big industrials,
Speaker 3: those are the ones you want to participate in because
Speaker 3: you know they've got a guarantee price set on that power.
Speaker 3: They've got a great investment, great customer that's taking that
Speaker 3: power and you're going to get paid. Those that are
Speaker 3: kind of going in a merchant world and haven't got
Speaker 3: these things contracted or in jurisdictions where it's extremely difficult
Speaker 3: to build things, which is a lot of jurisdictions these days.
Speaker 3: I think you're seeing those entities being you know, a
Speaker 3: lot tougher to get the returns that the ones I
Speaker 3: previously talked about, which is why our renewable business, which
Speaker 3: we've actually been in for twenty years, is all about
Speaker 3: that contracted business. So our European stuff, you know, our
Speaker 3: customers are folks like EDF Electricity de France or the
Speaker 3: government in Germany, and then here in the US, most
Speaker 3: of our customers would be utility like players. And even
Speaker 3: on the renewable natural gas tuck in that we had today,
Speaker 3: we have ten year contracts with the likes of BP
Speaker 3: and Shell. So I think and I think this is
Speaker 3: great for companies like Enbridge who have done it on
Speaker 3: a low risk basis that you're going to see differentiation.
Speaker 3: Those that have actually structured their businesses to create good returns,
Speaker 3: double digit returns are going to be rewarded, while those
Speaker 3: that have gone more merchanty. I think that's going to
Speaker 3: be a tough slug for them.
Speaker 2: Where do you see demand going for energy? I mean,
Speaker 2: as we see the jobs numbers miss and as we
Speaker 2: expect either a soft landing or a recession, I imagine
Speaker 2: demand slows down. Is that the case?
Speaker 3: Yeah? You know, typically energy is a about two thirds
Speaker 3: of GDP, and another words, energy growth grows about two
Speaker 3: thirds of GDP. So if you thought GDP was going
Speaker 3: to be three percent, you get energy at two. That's one. Two.
Speaker 3: People don't shut off their lights and they don't turn
Speaker 3: off the gas in their house, even when you've you're
Speaker 3: in a recession. Where you see it is on some
Speaker 3: of the industrial love but most of our stuff is
Speaker 3: for ultimately residential players. So I don't see that has
Speaker 3: a big impact. But remember we're building assets for ten
Speaker 3: twenty years. So virtually every report that you would see
Speaker 3: globally in the United States, we will be using more
Speaker 3: energy ten years from now than we use today, and
Speaker 3: particularly so in developing countries. You're going to see them
Speaker 3: continue to move up the economic food chain and that
Speaker 3: always requires more energy. So some of our assets on
Speaker 3: the export side of things, whether it's our liquefied natural
Speaker 3: gas export facilities we're building on the West coast of Canada,
Speaker 3: or our oil export facility on the Gulf Coast of
Speaker 3: the United States, which is the largest in the US.
Speaker 3: You continue to see very good response there even through recession.
Speaker 3: So yeah, I think the demand comes down a bit,
Speaker 3: but it continues to grow.
Speaker 1: So I saw you announced intentions of buy some utilities,
Speaker 1: I guess in Ohio, North Carolina, in Utah. I mean
Speaker 1: it's a big number, fourteen billion. What's the strategy and
Speaker 1: get in the utility business.
Speaker 3: So we're you know, it's interesting, maybe a little bit
Speaker 3: of contrarian, but I think we're right on this. We've
Speaker 3: been in the utility business for a long time. We've
Speaker 3: got the largest gas utility in Canada. This will make
Speaker 3: us the largest gas utility in North America by volume,
Speaker 3: serving some seven million customers in jurisdictions that are really
Speaker 3: gas friendly. So they actually have banned the banned legislation
Speaker 3: if you will. They will not allow communities to ban
Speaker 3: natural guests. They know how important it is for industrial growth.
Speaker 3: I think of what's going on in Ohio so much
Speaker 3: from a steam automotive refining perspective, gas is critical and
Speaker 3: then growth areas like North Carolina and Utah very favorable environment.
Speaker 3: So we saw that and it fits right into our
Speaker 3: given in paying low risk environment and gas continues to grow.
Speaker 3: In fact, you contend des utilities, you will see their
Speaker 3: rate base or if you will, their customer setup and
Speaker 3: the assets that they use grow by a compound annual
Speaker 3: growth rate of eight percent through the end of the decade.
Speaker 3: So that was our strategy. You know, we had a
Speaker 3: selling a seller that was large and electric player that
Speaker 3: had to move out of that business for other reasons
Speaker 3: related to you know, its electricity business. That created an opportunity.
Speaker 3: We were able to buy that as historic lows one
Speaker 3: point three times that base of the business, and so
Speaker 3: we were a big enough player we could buy all three.
Speaker 3: And that's really exciting for us as we move and
Speaker 3: close those in twenty twenty four and have them fully
Speaker 3: in the barn and ready to produce in twenty twenty five.
Speaker 1: So I'm looking on the Bloomberg terminal, Greg and I
Speaker 1: see a dividend yield for you guys of you know,
Speaker 1: seven point six percent. I mean that is just huge.
Speaker 1: What is what's a dividend policy, you you kind of
Speaker 1: communicate to your shareholders.
Speaker 3: Sure, so we pay out, and we've been paying a
Speaker 3: dividend for forever, and it's an important part of our equation.
Speaker 3: I think our compound annual title total shareholder return is
Speaker 3: about eleven percent since two thousand and then you go
Speaker 3: back to the sixties and you'd find it about a
Speaker 3: similar number. And the philosophy there is, as we build
Speaker 3: these low risk projects and we bring them in, we
Speaker 3: can pay out sixty to seventy percent of that cash
Speaker 3: flow to investors through dividends. And so the higher yield
Speaker 3: right now is really driven by as we talked about
Speaker 3: the ten year, the ten year yield having an impact
Speaker 3: on that people will put their money in US treasuries
Speaker 3: versus some dividend paying stock. So I would expect that
Speaker 3: to come down. I use the stock to go as
Speaker 3: you see some softening on the yield side of things.
Speaker 3: But that's sixty to seventy percent pay out, very comfortable
Speaker 3: for us, very much in line with our cash flow
Speaker 3: and allows us to retain enough cash to continue to
Speaker 3: invest in the business.
Speaker 1: All right, Greg, thanks so much for taking some time,
Speaker 1: and you guys are busy today with your earnings Gregor Ebel.
Speaker 1: He is the CEO of n Bridge Energy e NB
Speaker 1: is the ticker and look over the last five years,
Speaker 1: compound and annual return about eight point five percent better
Speaker 1: than its benchmark index. So some solid returns there and
Speaker 1: this stocks up slightly here Today.
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Speaker 1: Jay Hatfield joins us, one of those smart folks we
Speaker 1: like to chat with, CEO, founder and portfolio manager at
Speaker 1: Infrastructure Capital Advisors, and Jay, this has been a good
Speaker 1: week for risk assets here. I mean, I mean we've
Speaker 1: got yields pull and fifty basis points on the tenure.
Speaker 1: We got the stocks up five days in a row.
Speaker 1: What'd you make of the job sprint today? What are
Speaker 1: you making of this market right here that we've seen recently?
Speaker 5: Thanks Paul Matt for having me on again. We put
Speaker 5: out a note on Tuesday because things were looking a
Speaker 5: little bit bleak last week. I'd have to say, because
Speaker 5: you'd have great earnings reports and terrible price reaction in
Speaker 5: the market as a whole, But we did some work
Speaker 5: on near term catalysts on bonds and we saw everything
Speaker 5: really lining up for rally. So so far we've been correct.
Speaker 5: And what we're really focused on is global growth, mostly
Speaker 5: in Europe, and nobody really ever reports on it, but
Speaker 5: you can easily get it on the terminal. That's where
Speaker 5: we get it. The European data is just awful, yep.
Speaker 5: It's their inner recession, as we had predicted. Mild so far,
Speaker 5: but it's only going to get worse. The UCB raised
Speaker 5: rates twice during the quarter, so nothing better is happening yep.
Speaker 5: And if you look even today, the unemployment is rising
Speaker 5: in Spain and Germany, they'd have the final manufacturing pmis
Speaker 5: forty three, so that's bad. But also we had a
Speaker 5: week PMI which lowered our Atlanta growth rate. And then
Speaker 5: the final point is that and we focus a lot
Speaker 5: on oil, is that it's not well discussed that gasoline
Speaker 5: prices came down ten percent in a month, so it's
Speaker 5: one hundred and twenty percent annualized. That's a little bit exaggeration,
Speaker 5: but still that's going to show up in not just
Speaker 5: headline CPI, but more importantly core. And this is what
Speaker 5: the fedinis is and this is why they have all
Speaker 5: the nonsense from the seventies because of the real problem
Speaker 5: the seventies we had twelve hundred percent increase in oil prices.
Speaker 5: It bleeds through to core. So we're going to probably
Speaker 5: have cool CPI print in a couple of weeks and
Speaker 5: PPI definitely. And so this whole narrative that we're going
Speaker 5: to like six percent bond yield should attenuate. I think
Speaker 5: said that we think the rate or really rally when
Speaker 5: the ECP starts cutting rates in the first half or
Speaker 5: even the first quarter of next year, so you.
Speaker 2: Think they're gonna cut imminently. They do have a two
Speaker 2: handle on inflation, you know, I mean maybe because they're
Speaker 2: in a recession, or maybe because inflation was transitory ish.
Speaker 2: We were talking to Cam Harvey yesterday, you know that guy.
Speaker 2: He's a professor at Duke. Yeah, excellent, and he was
Speaker 2: making the point that you have been making for a while.
Speaker 2: He said, look, it's ridiculous that this FED thinks inflation
Speaker 2: is still you know, three to four when you take
Speaker 2: out the rent equivalent, which is backwards looking in the
Speaker 2: wrong way to do it. We're under two and I
Speaker 2: immediately looked at your CPI dash R on Infrastructure Capital
Speaker 2: Advisers on your website, and you guys have one point
Speaker 2: three percent right now. So explain to us how you
Speaker 2: calculate that you use core CPI and then you take
Speaker 2: out the rent equivalent part and you put it in
Speaker 2: case Shiller.
Speaker 5: Right, correct, You can even you can basically do it
Speaker 5: in your head, so.
Speaker 1: Because not mia, you live it in your head.
Speaker 5: But it's it's kind of nutty. But the CPI still
Speaker 5: is saying shelters seven point two percent when it's really
Speaker 5: it's actually going up a little bit to be fair,
Speaker 5: but it's not likely to skyrock. But but so just
Speaker 5: assumes zero case Schuller has been close to zero, so
Speaker 5: forty percent time seven is like three percent. So basically
Speaker 5: CPI is over Headline is overstated by three percent, and
Speaker 5: then it's only thirty three percent of core, so it's overstated.
Speaker 5: Core is overstated by about two point one percent.
Speaker 2: So but the the so inflation isn't as bad as
Speaker 2: we think it is, is what you're saying. Still cumulatively,
Speaker 2: it sucks right for consumers, especially since.
Speaker 1: We near extremes I don't still kill it.
Speaker 2: I don't feel like wages of kept up certainly mind
Speaker 2: heaven and then growth though looked incredible backward looking right,
Speaker 2: four point nine percent in Q three, How does it
Speaker 2: look to you going forward? Because I feel like the
Speaker 2: consumer is getting hurt here, you know, and charging everything
Speaker 2: and missing payments.
Speaker 5: Well, no doubt. We have a saying that the average
Speaker 5: consumer is not an economist. So what we mean by
Speaker 5: that is they don't really care about CPI, whether it's
Speaker 5: R or whatever, because that's for twelve months, but they
Speaker 5: do care about twenty four. So prices have still skyrocketed
Speaker 5: over twenty four And if your wages didn't go up,
Speaker 5: which is true for a lot of lower income consumers
Speaker 5: and you don't own a house, you're definitely under pressure.
Speaker 2: And by the way, CPIR was much higher than core
Speaker 2: CPI for a while, correct, because I look back on
Speaker 2: the table and you guys were up at eleven twelve percent.
Speaker 5: Yeah, this is why we say that FED is incompetent,
Speaker 5: because they just weren't even looking at any data, like
Speaker 5: you can go back and say, look at PPI is
Speaker 5: actually reported. It was at eleven when they said things
Speaker 5: were transitory. So they need to redo their entire framework,
Speaker 5: and you should. Everyone should go. Look at the way
Speaker 5: the CPI shelter is calculated. It's ridiculous. They only updated
Speaker 5: it one sixth every six months, so it's just designed
Speaker 5: to be lagged. So the FED should for that, in
Speaker 5: fact that San Frisco, San Francisco Fed does correct for.
Speaker 2: I just don't understand why they don't. I mean, for
Speaker 2: all the flack and Druckmiller gives Janney Yellen. She's a
Speaker 2: super genius, right, and she's an economist PhD.
Speaker 3: Like she's not.
Speaker 2: Now she's like a government you know, political uh, kind
Speaker 2: of a hack, but she was like a serious economist.
Speaker 5: It's inexplicable. And I'm shocked that not on this program
Speaker 5: but other media outlets that everyone comes on and says,
Speaker 5: not the FED but other people that inflation's sticky, when
Speaker 5: it's just flat out not sticky. It's actually contained has
Speaker 5: been since July of last year.
Speaker 1: Have we seen then peak rates?
Speaker 5: We definitely there's not going to be another increase. And
Speaker 5: now for the first time we've been saying, I think for.
Speaker 3: The federal fund rate, right, Yeah.
Speaker 5: We've been saying for four or five months to Fed
Speaker 5: one increase rates, but they don't know it yet. Now
Speaker 5: they know it. Now they know it after this employment
Speaker 5: very cool, wages rising unemployment. So that's what they look at,
Speaker 5: even though that's a flawed leading indicator. So the Fed
Speaker 5: is clearly not going to raise. ECB's not going to raise,
Speaker 5: they're going to cut. But you know, all this really
Speaker 5: is going to start to impact because we're worried about
Speaker 5: the liquidity, you know, trillion. That's the other data we
Speaker 5: look at that most people don't global monetary base or
Speaker 5: supply global liquidity really from central banks down a trillion
Speaker 5: over the last two quarters. So it's terrible. That's probably
Speaker 5: not going to turn around until next year when the
Speaker 5: ECB is forced to cut. Because you know, that's a
Speaker 5: simple way to trade the market, right, It's like if
Speaker 5: the FED intervenes during the pandemic and says we're going
Speaker 5: to increase the monetary base by a gigantic amount, you
Speaker 5: get long. If they're sucking money. It's like taking five
Speaker 5: hundred dollars off free parking. You know, if you're playing Monopoly,
Speaker 5: all of a sudden, you know, if you put it on,
Speaker 5: then all of a sudden, everything's overinflated. And everything's go go.
Speaker 5: You take it off and it's bad. So we're in
Speaker 5: the takeoff phase. But I think we overshot to five percent.
Speaker 5: We'll see if we keep rallying from here at four
Speaker 5: and a half. But next year we're confident we'll get
Speaker 5: below four. So we'll meet our five thousand target next
Speaker 5: year at least.
Speaker 2: So you don't think like the bond vigilantes will come
Speaker 2: back and say, we're not going to finance this kind
Speaker 2: of deficit spending much long.
Speaker 5: We think there's was this rate. That's a great question
Speaker 5: because we think there's way way too much focused on
Speaker 5: the US budget deficit because like I mean, I don't know.
Speaker 1: Matt is concerned about it, so you can try to
Speaker 1: relay his concerns.
Speaker 5: Well, I think it's terrible from the economic growth perspective
Speaker 5: because there's something called crowding out, So if the government
Speaker 5: spends money, it can't be invested in.
Speaker 2: Well, if they spend nine hundred billion dollars next year
Speaker 2: servicing the debt, we're not going to have enough money
Speaker 2: to spend for the next pandemic.
Speaker 5: No, it's a horrible it's a horrible, horrible thing, and
Speaker 5: it's a waste of capital. And it's terrible for economic growth,
Speaker 5: terrible for everyone. But it's not enough to drive global
Speaker 5: interest rates up one hundred basis points. That's my only point.
Speaker 5: At the margin, it's bad. Yeah, but keep in mind
Speaker 5: that our d strangely, if you look at the balance,
Speaker 5: he's actually still monetizing part of the debt because they're
Speaker 5: unwinding their short term borrowing. So it can't be true
Speaker 5: that that's the key driver of global interest rates. It's bad,
Speaker 5: it's bad for it. It's a terrible economic policy. Obviously,
Speaker 5: the budget process is horrendous.
Speaker 2: And for taxes, dude, because now every time someone wants
Speaker 2: to cut taxes, they're going to say, we can't afford to.
Speaker 2: We got to do entitlements, we got to pay for
Speaker 2: the military, we got to pay nine hundred billion dollars
Speaker 2: a service debt, so Miller and the rest of the
Speaker 2: middle class is going to have to pay half half.
Speaker 5: No, it's horrendous policy. And in fact, you know, we're
Speaker 5: actually pretty bullish about China because they save forty five
Speaker 5: percent of their GDP. So savings and investment drives economic growth.
Speaker 5: That's all the only thing that does it. And that's
Speaker 5: just intuitively Obviously, if the government is reducing savings, we're
Speaker 5: going to have lower growth in the long run. So
Speaker 5: it is terrible, but just not enough to drive global
Speaker 5: rates to six seven eight percent. That's our main point.
Speaker 1: We learned something again today, Yeah, we do every time
Speaker 1: comes in here. Jay Hatfell, thanks so much for joining us.
Speaker 1: Jays the CEO and founder and portfolio manager at Infrastructure
Speaker 1: Capital Advisors. He was a banker, he was I don't know,
Speaker 1: hedge year, a hedge fund due. He's a skier up
Speaker 1: at my favorite place, Squaw Valley, which I think they've
Speaker 1: renamed it something, but still Lake Tahoe. That whole area
Speaker 1: there is just awesome.
Speaker 2: So have they that Squaw Valley was not cool squad?
Speaker 1: Oh no, it's something different now, So I don't know.
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Speaker 1: So Sam Bankman free found guilty. Shocker, It took the
Speaker 1: jury like fifteen minutes a cup of coffee to convict
Speaker 1: this guy did. I'm not even sure they got their pizza.
Speaker 2: Even the trial was felt like the trial was only
Speaker 2: like two weeks, but.
Speaker 1: There's so much evidence. Many people turned against him, and
Speaker 1: he was like an open and shutcase.
Speaker 4: No train.
Speaker 1: But we have somebody here who's really into this business
Speaker 1: and has really read in as the kids say, Zeke Fox.
Speaker 1: He's an investigative reporter and it's also our author of
Speaker 1: the new book on crypto entitled Number Go Up. It
Speaker 1: was released in September twenty twenty three. He writes for
Speaker 1: Bloomberg BusinessWeek.
Speaker 2: And it was used in the trial.
Speaker 1: It was used in a trial. Explain that to me, Zeke,
Speaker 1: So how was your book used in this trial?
Speaker 6: Here?
Speaker 7: Hey, this was unbelievable. So, as you point out, they
Speaker 7: had so much evidence. All the top lieutenants were testifying
Speaker 7: against Sam, but then Sam decided to take the stand
Speaker 7: and tell his version of the story. Real unusual decision
Speaker 7: for Krimmel defendant, because then the prosecutor gets to cross
Speaker 7: examine you about anything you've ever said. And this prosecutor
Speaker 7: had no mercy. I felt like she was going for
Speaker 7: both she was going for bonus points. I think I
Speaker 7: felt like she wanted to convict Sam. She's like, forget
Speaker 7: the witnesses, I'm going to convict you again right now.
Speaker 7: And so she was like, Sam, have you ever said
Speaker 7: anything about the relationship between Alameda Research, your hedge fund
Speaker 7: and your exchange FTX? Have you ever said maybe that
Speaker 7: Alameda Research didn't play by the rules on FTX? And
Speaker 7: Sam was like, I don't recall. And then the prosecutor,
Speaker 7: Danielle se Soon, was like, your honor, let me introduce,
Speaker 7: and then she pulled out a hard copy of number
Speaker 7: go up, walked it over to the witness stand. The
Speaker 7: defense was like objection, objection that a little conference it was,
Speaker 7: it was admitted, and then for like honestly, for quite
Speaker 7: some time, she had Sam read different pages of the
Speaker 7: book and was like do you remember saying that now?
Speaker 7: And he had to just say, I don't recall, because
Speaker 7: what's described in the book is this interview I had
Speaker 7: with him in November twenty twenty two, just before he
Speaker 7: got arrested, and he basically did not quite have his
Speaker 7: story straight, and he said a lot of stuff to
Speaker 7: me that I think he regretted. So he couldn't really
Speaker 7: admit to saying those things now, and I think it
Speaker 7: looked terrible for him in the trial in front of
Speaker 7: the jury because when his lawyer was asking, you know, questions,
Speaker 7: he had a lot to say, but when the prosecutor
Speaker 7: brought up his other statements, he just had to stick
Speaker 7: with I don't recall that's rough.
Speaker 2: Part of me feels sorry for the guy, because you know,
Speaker 2: I've done things wrong, and I know that feeling of regret.
Speaker 6: But.
Speaker 2: The size of the fraud and the crimes I would
Speaker 2: say alleged, but now I guess I can say committed,
Speaker 2: right since he's been proven guilty is just massive. What
Speaker 2: do you expect, Zeke at the sentencing. I was having
Speaker 2: a little debate over at the news desk a little
Speaker 2: bit earlier, and some of the people on the desk
Speaker 2: were like, well, Elizabeth Holmes only got eleven years, so
Speaker 2: maybe he gets fifteen. And then somebody else said, yeah,
Speaker 2: but Bernie Madeoff got like one hundred and fifty years.
Speaker 2: So you know, where do you think Sam Bankman Freed
Speaker 2: falls in the pantheon of giant conmen?
Speaker 7: So I mean, I think these sentences are determined by
Speaker 7: how much money you stole and maybe he'll be able
Speaker 7: to try his arguments again, which is that so he
Speaker 7: took this customer money and he went and gambled it.
Speaker 7: And he wanted to say in his defense that some
Speaker 7: of those bets worked out, And the judge at his
Speaker 7: at his trial said, that doesn't matter. You stole this money.
Speaker 7: If you stole the money, we don't care what you
Speaker 7: did with it after the crime is just a stealing
Speaker 7: the money. But maybe when it comes to sentencing, he'll
Speaker 7: be able to say, hey, there's not actually eight billion
Speaker 7: dollars missing. You know, we've been able to find that,
Speaker 7: a bankruptcy court has been able to find, you know,
Speaker 7: four billion. Just sentenced me on the four billion, but
Speaker 7: even still four billions a lot. So he's looking at
Speaker 7: a at a bad sentence. I'd say maybe like twenty years.
Speaker 7: That's just my guess.
Speaker 1: So wow, Hey see, I guess folks within the crypto space,
Speaker 1: I guess they're wondering at this point to what extent
Speaker 1: does the whole Sam Bankman freed scam, the you know,
Speaker 1: the FTX debaccle, how much does that negatively impact just
Speaker 1: the crypto space in general? Do you have any thoughts
Speaker 1: on that so.
Speaker 7: I I'm hearing a lot of wishful thinking from the
Speaker 7: crypto people that this does not impact them, it doesn't
Speaker 7: reflect on their project. And I think it doesn't matter
Speaker 7: if your project had nothing to do with Sam Banks
Speaker 7: and Freed. If you start some new coin now and
Speaker 7: you go pitch it to regular people, they're gonna say, oh, crypto,
Speaker 7: isn't that how the guy with the curly hair stole
Speaker 7: everybody's money, and like they're not gonna want to invest,
Speaker 7: you know. So I think it is all the publicity
Speaker 7: around this trial. It's horrible for crypto, and the crypto
Speaker 7: people would love to move on. But coming up next
Speaker 7: we've got Alex Mashinski of Celsius, who's also so another
Speaker 7: crypto guy accused of a massive fraud. And if it
Speaker 7: wasn't for Sam bankman Fried, I mean this one was
Speaker 7: really big too, he'd be like the big crypto villain.
Speaker 7: So maybe the bad publicity is they're not out of
Speaker 7: the woods yet. They're be getting morel even though the
Speaker 7: other day you've got another one. Every day is another one.
Speaker 2: Gemini and Genesis, also the the winkle Vy and Barry,
Speaker 2: they're in deep trouble and you know, I wonder though,
Speaker 2: and you've been reporting on crypto for for so long, Zeke,
Speaker 2: that I feel like you know just as much about
Speaker 2: crypto as the biggest experts in it. Is it fair
Speaker 2: to lump it all into one ball? Can you put
Speaker 2: it all crypt on the same drawer? Because I've always
Speaker 2: felt that bitcoin is one thing and all of the
Speaker 2: other coins are another.
Speaker 7: Yeah, so I've heard I've heard this argument. I do
Speaker 7: think bitcoin's a little different. I mean, we may have
Speaker 7: different opinions on this. I think the reason bitcoin is
Speaker 7: different is because this whole cult has developed around it,
Speaker 7: and people treat bitcoin almost as like a religion, and
Speaker 7: so it's gonna be tougher to we do that with
Speaker 7: the dollar change these people's minds.
Speaker 2: That's how it goes with these things. You know, if
Speaker 2: we all believe, then it's valuable, and if we all
Speaker 2: don't believe, then it isn't.
Speaker 3: Right.
Speaker 7: Yeah, I mean, I would say the dollar is based
Speaker 7: on like more than belief. You know, it's like the
Speaker 7: official currency of our country. You know that we can
Speaker 7: use it to pay taxes. Everybody's always used it, all right.
Speaker 2: So gold, so gold, right, gold is probably a better
Speaker 2: because why is this you know, yellow metal that we
Speaker 2: dig out of the earth valuable. I guess we use
Speaker 2: it for wedding rings and maybe like some of the
Speaker 2: foil that goes around the Moonlanders when NASA was doing that.
Speaker 2: But supply and demand, yeah, Bitcoin too, supply and demand.
Speaker 2: I know, yeah, I don't know. I just feel like,
Speaker 2: you know, there's all of the these scams seem to
Speaker 2: happen with all of the other coins, and I just
Speaker 2: look at bitcoin and it's worth thirty five thousand dollars.
Speaker 1: Hey, Zeke, thanks so much for joining us here. We
Speaker 1: gotta let you it up on the time, but thanks
Speaker 1: so much for joining us. Zeke Fox investigative reporter, and
Speaker 1: he say the author of the new book on crypto
Speaker 1: entitled Number Go Up, Check It Out, is released just
Speaker 1: in September of this year. Perfect timing for our friend
Speaker 1: Zeke on all things crypto. This is Bloomberg.
Speaker 4: You're listening to the tape catch are live program Bloomberg
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Speaker 1: It is Friday is twelve twenty three pm on the
Speaker 1: Wall Street time. That means it's time for what is
Speaker 1: Matt Miller driving? Kinda Ella joins this actually does every
Speaker 1: time this week Bloomberg Business Week. Calm this, We're going
Speaker 1: to talk about the BMWA, Matt's love for superchargers, who
Speaker 1: doesn't and met, and Hannah's new podcast.
Speaker 2: When somebody wrote this, So listen. Every week I do
Speaker 2: this segment to talk about the car I'm test driving
Speaker 2: this week, and every week I record a podcast with
Speaker 2: Hannah Elliott, who writes for Bloomberg Pursuits. So I figured,
Speaker 2: like chocolate and peanut butter, let's bring these two things together.
Speaker 1: So podcast.
Speaker 2: Our podcast is called Hot Pursuit Night, which is a
Speaker 2: play on you know, Hannah's unit, play on words. Hannah's
Speaker 2: unit is called Pursuits And the podcast comes out every
Speaker 2: Saturday morning and you can listen to it live on
Speaker 2: Bloomberg Radio, taped to live to tape on Bloomberg Radio.
Speaker 2: But I thought it would be cool to talk about
Speaker 2: these two big trucks together and they're very different. Obviously,
Speaker 2: I'm driving a Dodge Durango hell Casts. It's like a
Speaker 2: family truckster, right, it's a grocery getter. And you know
Speaker 2: they start at forty thousand dollars in the base model,
Speaker 2: so very affordable. But if you put the hell Cat
Speaker 2: engine in, oh boy, and that's the only thing that
Speaker 2: matters to me. It's a supercharge six point two liters
Speaker 2: V eight, then it costs ninety four thousand dollars and
Speaker 2: actually can you can get the price up to one
Speaker 2: hundred and ten pretty fast. So I absolutely love the car.
Speaker 2: I love superchargers, I love V eights. Yeah, but it's
Speaker 2: really all about the motor. It's not a terribly luxurious interior.
Speaker 2: The seats aren't super comfortable. I don't love the layout
Speaker 2: of the infotainment. It doesn't handle very well. I don't
Speaker 2: think the build quality is super high. It's just the
Speaker 2: supercharged motor that I care about, and I think for
Speaker 2: that it's it's pretty expensive, maybe too expensive. So but
Speaker 2: Hannah is driving like an ultra luxury truck, a BMWXM. Hannah,
Speaker 2: tell us about that.
Speaker 8: So I've got a few points to your supercharger motor.
Speaker 8: This the BMWXM does have a V eight two. This
Speaker 8: is a twin turbov eight and it's also paired with
Speaker 8: an electric motor.
Speaker 6: This is act a hybrid. It gets six or and
Speaker 6: forty four horse power.
Speaker 8: So a little bit less than that Hellcat, but sort
Speaker 8: of comparable the Hellcat. Yeah, yeah, so close close, But
Speaker 8: I have to say the XIM costs a lot more more.
Speaker 8: It starts at about one hundred and sixty thousand dollars
Speaker 8: starting and.
Speaker 6: It goes up from there.
Speaker 8: I should mention they're going to come out with an
Speaker 8: even more powerful edition next month. So it's really it's fast,
Speaker 8: it's powerful, it's very expensive. Personally, I do not think
Speaker 8: it drives in the sophisticated way that we have come
Speaker 8: to expect from BMW's. It's a little bit inelegant, jerky.
Speaker 8: I found it extremely powerful, but not the greatest handling,
Speaker 8: not the greatest driving apparatus. And Matt, I think you've
Speaker 8: driven this one too, haven't you?
Speaker 3: I haven't.
Speaker 1: This is where I think is like the soup diversion
Speaker 1: of what I've got.
Speaker 2: No, No, I've an X.
Speaker 6: You X.
Speaker 2: True, you have an X and this is the M
Speaker 2: version of the X. So actually it's kind of it's
Speaker 2: supposed to be the top of the line. But frankly,
Speaker 2: your car is probably drives much more, much smoother, much
Speaker 2: more sophisticated, much more elegant. And I know what Hannah
Speaker 2: talking about because I've driven this XM before. When I
Speaker 2: first took it out of the garage and Chelsea, I
Speaker 2: noticed that the the switch from electric to gas was
Speaker 2: pretty jerky. And the thing is, I think the XM
Speaker 2: and the Durango Hellcat, both of them need to be
Speaker 2: driven in anger for them to work right. And I
Speaker 2: don't know if you've been able to really ring it out, Hannah,
Speaker 2: but when I finally took the XM up to Bear
Speaker 2: Mountain and ripped it around turns at much higher speeds
Speaker 2: than are recommended, then it started to shine. I liked
Speaker 2: the anti roll bar. I like the suspension, but otherwise
Speaker 2: when you're being just like a rich person driving around, uh,
Speaker 2: there's no air suspension in that BMW, it just isn't nice,
Speaker 2: you know.
Speaker 8: I have to say, I lived in New York for
Speaker 8: almost twenty years. I'm now in LA I'm trying to
Speaker 8: not drive in anger. I'm trying to move past that.
Speaker 8: And I love anger. Anger is my favorite emotion. But
Speaker 8: I'm trying to really, you know, these are my la
Speaker 8: years and I don't want to have to drive my
Speaker 8: BMW in anger to have fun with it. I should
Speaker 8: also say the XIM is huge. It's the same size
Speaker 8: as the X seven, but it only seats six people.
Speaker 8: The X seven is a seven passenger. The XM, I'm sorry,
Speaker 8: it only seats five people. The X seven seats seven.
Speaker 8: Of course, this seats five, so it's big. It's matt
Speaker 8: I think you use the word brutalist for how it looks.
Speaker 8: I think it just looks a bit heavy handed.
Speaker 2: So I like that. So when you tell me this
Speaker 2: is a seven passenger car that only seats five, my
Speaker 2: eyes light up, you know, because I'm six four ten pounds.
Speaker 2: I like that. That means there's more space. It's business class,
Speaker 2: that's what this car.
Speaker 6: Yes, yeah, well there's a lot of space.
Speaker 3: Yeah.
Speaker 2: I think that's great. And I love the big grill.
Speaker 2: A lot of people would say it's ugly. On the XM,
Speaker 2: I would say it's book dish, which is a German word.
Speaker 2: It's powerful, you know, its presences can't be ignored. The
Speaker 2: Dodge Durango Hellcat, on the other hand, you can easily
Speaker 2: overlook that vehicle In fact, it feels much smaller in
Speaker 2: a lot of ways than my Challenger, which is only
Speaker 2: a two door. It's definitely thinner. The seats are not
Speaker 2: big enough for my but you know, so, yeah, I
Speaker 2: think it's fairly small for an SUV, even though it's
Speaker 2: a three row vehicle. I don't know who's going to
Speaker 2: buy that thing, but the prices having come down dramatically,
Speaker 2: I feel like in the long run, the both the
Speaker 2: BMW XM and the Durango Hellcat they're gonna depreciate like crazy,
Speaker 2: but the XM, certainly because you know, Hannah, the BMW
Speaker 2: I really want to buy and hopefully will at the
Speaker 2: begining of next year is a twenty twenty M seven
Speaker 2: sixty and they started at one sixty five MSRP, but
Speaker 2: now I'm finding them three years old with thirty thousand
Speaker 2: miles for sixty five. So they've appreciated like mad and
Speaker 2: I feel like the XM would two except for they're
Speaker 2: not going to make very many.
Speaker 8: No they're not, and I have to say even even
Speaker 8: fewer of this this XM label version coming and I
Speaker 8: know I mentioned that before, but they're really kind of
Speaker 8: pushing it, I think because they realized if this is
Speaker 8: supposed to be the most powerful bmwsuv ever made, and
Speaker 8: it is, they really need to like push a power
Speaker 8: even more because if you're getting beat by Dodge, that's
Speaker 8: not a good look, isn't No No.
Speaker 2: And by the way, that brings up another point something
Speaker 2: that we spoke about on the podcast, and you said
Speaker 2: something where I was like, oh, now I get it.
Speaker 2: I've always wondered why Americans go to the supercharger, and
Speaker 2: I love a super childreacher. I think it's the best
Speaker 2: kind of forced induction. You get the power right at
Speaker 2: the very bottom of the rev range. And Europeans and
Speaker 2: Japanese have always gone to the turbochargers. I didn't know why,
Speaker 2: but you pointed out a pretty important reason. Hannah.
Speaker 8: Yeah, I have a theory, and I think it's actually
Speaker 8: back to buy science. That really European roads and for instance,
Speaker 8: Japanese roads tend to be smaller, more curby. Obviously these
Speaker 8: are smaller spaces, while American roads are big, open highways
Speaker 8: great for driving drag races, you know, going fast and
Speaker 8: a straight line.
Speaker 6: The turbo charger is best used on curby, windy roads.
Speaker 8: I mean, it's amazing when you can feel the thrust
Speaker 8: of the boost kick in. That's when you really feel
Speaker 8: the value of it. You don't necessarily feel the value
Speaker 8: of a turbocharger when you're just on an open highway supercharger,
Speaker 8: maybe you do.
Speaker 6: That's my theory.
Speaker 2: I think she's right, she's on. A turbocharger is more sophisticated,
Speaker 2: you know, a supercharger. No, supercharger is just like a sledgehammer.
Speaker 1: That's as American.
Speaker 3: That's why I like it.
Speaker 2: Yeah, it's right, it's pretty American, all right. The other
Speaker 2: thing that I wanted to just briefly touch on is
Speaker 2: F one. It's coming up. It's I know we still
Speaker 2: have another week, but tell us about you're going to
Speaker 2: go to Las Vegas.
Speaker 6: Yes, I will be there.
Speaker 8: I'm excited and slightly terrified at the same time. It's
Speaker 8: going to be a circus, which, of course, this is
Speaker 8: what we want from Los Angeles or from Las Vegas.
Speaker 6: But it's going to be wild.
Speaker 8: November eighteenth is the night of the Grand Prix race. Yesterday,
Speaker 8: it's a night race. I had It's a night race.
Speaker 8: It starts at ten pm local time. I think it
Speaker 8: might actually be a little bit cold. But yesterday I
Speaker 8: was talking to the head of Perelli Motorsport, who just
Speaker 8: of course won the contract to get to provide tires
Speaker 8: until twenty twenty seven. They're actually considering it to be
Speaker 8: a bit of a cold track. They're preparing the tires
Speaker 8: to be expecting a cold track. But all that to say,
Speaker 8: you know, it's fifteen thousand dollars dinners Wild Parties. Of course,
Speaker 8: the sphere, this huge event space that you two has
Speaker 8: been performing at, is not It's going to be hosting
Speaker 8: some new musical guests during the Grand Prix, which is
Speaker 8: a big deal.
Speaker 1: That's gonna be good stuff. And and thanks so much
Speaker 1: for joining us, Hanna Elliet Bloomberg Business weeklu is joining
Speaker 1: us to talk about cars.
Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever
Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
Speaker 2: at Matt Miller nineteen seventy three.
Speaker 1: Then on Fall Sweeney I'm on Twitter at pt Sweeney.
Speaker 1: Before the podcast, you can always catch us worldwide at
Speaker 1: Bloomberg Radio