Speaker 1: This is Bloomberg business Week Inside from the reporters and
Speaker 1: editors who bring you America's most trusted business magazine, plus
Speaker 1: global business, finance and tech news. The Bloomberg Business Week
Speaker 1: Podcast with Carol Messer and Tim Stenebec from Bloomberg Radio.
Speaker 1: We are in this interesting time where we're trying to
Speaker 1: figure out what comes next, trying to guess FED policy,
Speaker 1: watching data, some strong, some a little bit weaker. And
Speaker 1: this is why we leaned so much on the c
Speaker 1: suite Jess when it comes to trying to figure out
Speaker 1: what comes next. And one of the companies we've been watching,
Speaker 1: Booking Holdings. They're up nearly thirty percent so far this year.
Speaker 1: It reported earnings last week, beating on both the top
Speaker 1: and bottom lines. And among that company's brands, Priceline. So
Speaker 1: we wanted to get a look at travel trends and demand.
Speaker 1: So with us Priceline CEO Brett Keller. He joins us
Speaker 1: via zoom in Norwalk, Connecticut. By the way, he's been
Speaker 1: with the company for more than twenty years, so he's
Speaker 1: seen a few cycles in his lifetime. Hey Brett, so
Speaker 1: good to have you here with justin myself, how are
Speaker 1: you and how would you describe the travel environment right now?
Speaker 1: Thank you, thank you for having me, And things are
Speaker 1: actually very good if you're in travel right now. Obviously
Speaker 1: a very tough you know, twenty twenty and twenty one,
Speaker 1: twenty twenty two started to show some really nice signs,
Speaker 1: and for the last couple of quarters, the consumer has
Speaker 1: really demonstrated that they're prioritizing travel right now. And if
Speaker 1: you mentioned earlier, you know, we recently came out with
Speaker 1: our fourth quarter results and it's showing real strength across
Speaker 1: especially you know, across the US, but really across all
Speaker 1: markets around the world. And I'm really excited with spring
Speaker 1: coming up, Carol and Brett, just because we have daylight
Speaker 1: savings next weekend, so we'll get that extra hour coming soon.
Speaker 1: But Brett, I was curious about what does the travel
Speaker 1: demand look like as we head into spring. Should we
Speaker 1: expect this strength to continue? I mean, when I think
Speaker 1: back to the holiday travel, there was a little bit
Speaker 1: of chaos when you thought about the airlines and some
Speaker 1: of that in the bookings. But what are you expecting
Speaker 1: for spring travel right now? Sure, well, consumers have essentially
Speaker 1: kind of fallen back into their typical booking patterns, meaning
Speaker 1: they're traveling on the busiest days of the year, so
Speaker 1: they're going to pack those spring break weeks, especially families
Speaker 1: when children have time off from school. Families are really
Speaker 1: prioritizing travel this year more so than last year, and
Speaker 1: most of them are heading to beaches and resort destinations.
Speaker 1: So if you want to go to one of those destinations,
Speaker 1: you can expect to find a lot of people traveling.
Speaker 1: I think the airlines have largely recovered and are operating
Speaker 1: at a pretty good scale now, but they still have
Speaker 1: limited capacity, which means planes will be very, very full.
Speaker 1: There's not really any slack in that industry at this time.
Speaker 1: Gotta say bright, you know, I get that. You know,
Speaker 1: if you try to book a flight right now for
Speaker 1: business or otherwise, Man, those flights are expensive. We're still
Speaker 1: kind of, you know, blown away by how expensive it is.
Speaker 1: Does that continue? Because I'm thinking about the inflationary side
Speaker 1: of this story. What do you see in terms of
Speaker 1: costs for flights, for lodging, How is it playing out? Sure?
Speaker 1: You know, when we look at forward bookings at the
Speaker 1: spring break time frame, which is really you know, most
Speaker 1: of March in April, what we're seeing as flight prices
Speaker 1: are up about twenty five percent over last year, so
Speaker 1: very expensive. If you're trying to travel overseas, which a
Speaker 1: lot of people are now heading out to Europe, you're
Speaker 1: going to see prices up to forty percent over what
Speaker 1: you being what you were paying last year. On the
Speaker 1: hotel side, not so challenging. Hotel prices are about four
Speaker 1: or five percent, so a little easier to consume those.
Speaker 1: But on the if you're trying to fly, you're going
Speaker 1: to pay a lot of money. So I think you'll
Speaker 1: see quite a few consumers in the US choosing to
Speaker 1: drive versus fly, and they'll they'll get to their hotel
Speaker 1: destination that way. But it's a lot to consume right now,
Speaker 1: and consumers so far are inhaling those prices. We haven't
Speaker 1: seen either the hotel industry or the airlines really pull
Speaker 1: back on a lot of their price increase, and so
Speaker 1: as long as demand is there, we can expect those
Speaker 1: prices to stay rather high. Right any sign that capacity
Speaker 1: increased capacity comes into the airline industry, I mean, they've
Speaker 1: gotten so smart at ticking out excess capacity that was
Speaker 1: pre pandemic. We saw that in a big way. They're
Speaker 1: great about charging for everything once you get on a flight,
Speaker 1: or even on your way to that flight. Is there
Speaker 1: any signs or any indications that you're hearing that we
Speaker 1: get an increase in airline capacity. Well, I think there's
Speaker 1: some early signs. I know all of the airlines would
Speaker 1: love to build up capacity. What they've been challenged with,
Speaker 1: of course, is hiring enough pilots and staff and ground
Speaker 1: crew to support the oncoming flow of equipment. There's been
Speaker 1: a number of new orders put in for planes, and
Speaker 1: so I think over the next couple of years we'll
Speaker 1: see that start to ease. But you know, getting us
Speaker 1: through the summer, I think what we have today on
Speaker 1: the market is pretty much what we're living with, which
Speaker 1: means a very stressed environment. When it comes to, you know,
Speaker 1: finding an airline ticket that is reasonably prized to a
Speaker 1: great destination. There are still deals to be found. You
Speaker 1: can still find reasonable locations to travel to, but you
Speaker 1: might have to be flexible if money is a really
Speaker 1: tight concern for you right now, Britt, Where exactly are
Speaker 1: the most affordable deals for spring break, whether it's to
Speaker 1: the US or maybe even internationally. Sure, you know, if
Speaker 1: you're if you're looking for a nice, warm beach destination.
Speaker 1: Fort Lauderdale always a good option. Myrtle Beach, you know,
Speaker 1: not the Miami Beach, but provide the same type of
Speaker 1: experience in some ways, especially for families. Puerto Rico is
Speaker 1: very popular right now. Obviously Dominican Republic, Romaica. So the
Speaker 1: Caribbean continues to be a reasonably affordable place to go overseas.
Speaker 1: You know, if you're trying to travel to the big
Speaker 1: cities like London and Paris, you're going to pay. If
Speaker 1: you are a little bit flexible and want to try
Speaker 1: something new, you can try something like Lisbon, Athens, Munich,
Speaker 1: in the Naples, you know, those destinations. You'll pay maybe
Speaker 1: a touch less on the flight, but you're really going
Speaker 1: to say when it comes to your hotel and the
Speaker 1: average price you're going to pay there as well as
Speaker 1: it's just a little cheaper to travel in some of
Speaker 1: those markets, especially in Greece. A beautiful destination and much
Speaker 1: more reasonable when it comes to the daily expenses for
Speaker 1: a consumer. Sign me up, We're ready. Hey listen, Brett.
Speaker 1: What I do wonder too, is the window that you
Speaker 1: guys see globally, Like, what are you seeing globally in
Speaker 1: terms of where there's lots of activity travel wise, Is
Speaker 1: it mostly Is it largely the US? I know here
Speaker 1: in New York City, as I walk the streets of
Speaker 1: New York, I'm seeing a lot more international travelers back
Speaker 1: on the streets. Yeah. You know, the US recovered first,
Speaker 1: and that was mostly due to domestic travel. The US
Speaker 1: borders obviously opened up a little sooner than some of
Speaker 1: the European boarders, and especially the Asian borders, and so
Speaker 1: we saw a number of international travelers begin to pour
Speaker 1: into the US. But Europe came back very strong in
Speaker 1: twenty twenty two and is now moving at a very
Speaker 1: fast pace and catching up to the US. Asia was
Speaker 1: the longest, they took the longest coming out of COVID
Speaker 1: to really start to recover, But they are now ramping
Speaker 1: up very very quickly, and I think in some countries
Speaker 1: we're seeing demand outpacing twenty nineteen. Because the travel was
Speaker 1: so constrained for so long, people aren't just desperate to
Speaker 1: go out and take vacations, visit friends and family and
Speaker 1: just see the world. Something else I thought was interesting
Speaker 1: in a survey that y'all had, was looking at how
Speaker 1: spring breakers are basically split between going someplace new versus
Speaker 1: returning to a favorite destination. Why do you think that is? Well,
Speaker 1: you know, travel is one of those things that if
Speaker 1: you've had a great experience, you want to repeat it.
Speaker 1: And a lot of consumers, you know, when they find
Speaker 1: a favorite hotel or a favorite location, they know they
Speaker 1: can bank on that head and count on that and
Speaker 1: if they can get the price that they want, they're
Speaker 1: going to return to that destination. We see that a
Speaker 1: lot with Priceline customers, right they come back and repeat
Speaker 1: and stay many times at the same hotel. And I
Speaker 1: think that's just you know, when you've had a poor
Speaker 1: travel experience, it just reminds you how much you love
Speaker 1: the good ones. And so I think people are just
Speaker 1: a little bit of a creature of habit there you're
Speaker 1: going to return to where you where you feel most comfortable,
Speaker 1: you know the area, etc. But there's always a mix
Speaker 1: of people who want to try something new every time
Speaker 1: they head out. And with the world now really opening up,
Speaker 1: I think it's much more possible to do that now,
Speaker 1: you know. The UN World Tourism Organization came out with
Speaker 1: a stat that said over nine hundred million tourists traveled
Speaker 1: in twenty twenty two, that's still only sixty three percent
Speaker 1: of where we were in twenty nineteen. But this year
Speaker 1: that number could get as high as ninety five percent,
Speaker 1: so almost back to a fully worldwide travel recovery. I
Speaker 1: gotta tell you, I'm one of those people. There's a
Speaker 1: few places I know, I know, I'm gonna love it,
Speaker 1: and I go back. Hey, listen, Brett just got about
Speaker 1: twenty five seconds here. Lots of geopolitical concerns. Doctor's remind
Speaker 1: us were still not over COVID completely. What is it
Speaker 1: that you worry about most when you look at the outlook?
Speaker 1: And again just about twenty twenty five seconds. You know,
Speaker 1: I think our primary concern obviously is the longstanding impact
Speaker 1: of inflation on consumer's wallet. I think that really is
Speaker 1: the primary concern now. I think consumers are largely over
Speaker 1: concerns about health as they travel, and it's now really
Speaker 1: more about the pocketbook. And you know, that's what we
Speaker 1: do here at Priceline. We try to help you get
Speaker 1: a great deal and get you where you want to go. Well, listen,
Speaker 1: great inside, and so appreciate you spending some time with
Speaker 1: us on this Friday. Brick Keller, He's chief executive officer
Speaker 1: at Priceline, joining us via zoom from Norwalk, Connecticut. I'm
Speaker 1: Carol Masser along with just met and you are listening
Speaker 1: in watching Bloomberg Business Week and this Bloomberg Radio. This
Speaker 1: is Bloomberg Business Week inside from the reporters and editors
Speaker 1: who bring you America's most trusted business magazine, plus global
Speaker 1: business finance and tech news. The Bloomberg Business Week Podcast
Speaker 1: with Carol Masser and Tim Stenebec from Bloomberg Radio. So
Speaker 1: it was just a year ago we were all, I think,
Speaker 1: safe to say a bit's done with a news hit
Speaker 1: that actor Bruce Willis would step away from acting due
Speaker 1: to a battle with aphasia. That's a language disorder caused
Speaker 1: by damage in a specific area of the brain that
Speaker 1: controls language expression and comprehension. And then last month more
Speaker 1: news on a specific diagnosis, fronto temporal dementia, something known
Speaker 1: as FTD. Safe to say it also sent us all
Speaker 1: googling to understand what this was all about, Jess. So
Speaker 1: lucky for us we have back with us doctor Ian
Speaker 1: LUs Beata, clinical Professor of Medicine at NYU Langone Medical Center.
Speaker 1: He joins us via zoom in New York City Ian.
Speaker 1: Good to have you here on this Friday. I do
Speaker 1: think we're all wondering what the heck this is about,
Speaker 1: so tell us little bit more about it, and good
Speaker 1: to have you here with us and on zoom. Absolutely
Speaker 1: thanks Carol and Jess, thanks for having me. Dementia really
Speaker 1: is a problem nationally. At least six million people in
Speaker 1: the United States have it, and it's estimated that about
Speaker 1: ten percent of people sixty five and older have signed
Speaker 1: shore early dementia, and really as much as over thirty
Speaker 1: percent of people who are over ninety, so it's really common.
Speaker 1: The causes are not totally clear. Dementia really is a
Speaker 1: group of diseases that present with similar symptoms, usually brain changes,
Speaker 1: and they can present with memory issues and personality changes.
Speaker 1: Fronto temporal dementia is actually not that common Alzheimer's. Fifty
Speaker 1: to sixty percent of all dementia is Alzheimer's and frontotemporal
Speaker 1: really describes where in the brain it is. The frontal
Speaker 1: lobes are here and the temporal lobes are on the side,
Speaker 1: and the frontal lobes really help us with personality decision making,
Speaker 1: an inhibition kind of thinking before speaking or acting, and
Speaker 1: patients who are frontotemporal dementia, unfortunately over time as a decline,
Speaker 1: often have disinhibition. They may speak inappropriately, they may act inappropriately,
Speaker 1: they may have processing issues with hearing and speaking word
Speaker 1: finding ability, and that can overlap with other kinds of
Speaker 1: dementia classic sort of Alzheimer's dementia, but there are other
Speaker 1: kinds of dementia Louis body dementia, Parkinsons can have a
Speaker 1: variant of dementia alcohol use. So it's really a problem,
Speaker 1: and it becomes a real problem for caretakers because people
Speaker 1: initially begin to lose thinking function, but physically they're okay,
Speaker 1: so they may wander, they may think they can still
Speaker 1: drive or make decisions when they really can't. And sometimes
Speaker 1: they can be agitated and not really fully understand their
Speaker 1: decline and not really cooperate. So it really is a nightmare.
Speaker 1: I was curious because you were talking about how rare
Speaker 1: it is for someone to have frontotemporal dementia like Bruce Willists.
Speaker 1: Do you have a scope of how many Americans or
Speaker 1: even just globally people are impacted by this. It's a
Speaker 1: big number and unfortunately growing front to temporal dementia is
Speaker 1: somewhere about five to six percent of dementia's. Alzheimer's is
Speaker 1: the classic sort of fifty or sixty percent of dementias,
Speaker 1: and then they're a host of other ones. So, of
Speaker 1: the six million people in the United States and growing
Speaker 1: with dementia, about five percent of them have fronto temporal
Speaker 1: and it's not always diagnosed right away. Many people come
Speaker 1: into the office, I have word finding difficulty. I can't
Speaker 1: remember where I put my keys. You know, most of
Speaker 1: those are not significant, but over time that may progress,
Speaker 1: and doctors need to be more aware of it. Referral
Speaker 1: to an urologist is helpful. Sometimes brain imaging is helpful.
Speaker 1: We'll see, for example, with FTD you'll see a decline
Speaker 1: in the frontal lobes and temporal lobes. Alzheimer's general brain
Speaker 1: shrink and some of these are associated with protein deposition,
Speaker 1: either amoloid or TAW protein, which is why a lot
Speaker 1: of the company's biogen east Side. Many are looking to
Speaker 1: kind of slow the amoloid or TAW protein. But how
Speaker 1: much that really affects the progression is yet to be seen.
Speaker 1: But the problem is it's an aging population just and
Speaker 1: exactly as you say, whatever the numbers are. Now, let's
Speaker 1: say five percent fronto temporal of the six million people,
Speaker 1: that number is growing. Well, you know, that's the thing
Speaker 1: I was thinking about you and is that you know,
Speaker 1: I've certainly had older family members in my life, you know,
Speaker 1: that have had dementia, but not everybody who gets old
Speaker 1: gets dementia. So what is it like you talk about?
Speaker 1: You know, what's going on that maybe is you know,
Speaker 1: brings this all about. But I guess as we all
Speaker 1: think about it, is there a way to avoid it?
Speaker 1: Or is it just the luck or not luck of
Speaker 1: your genes? That's why you're the anchor Carrold's place. Now
Speaker 1: that's really the key thing, or one of the key things,
Speaker 1: is how do you prevent it and how do you
Speaker 1: treat it? So certainly we know overall health makes a difference.
Speaker 1: Obesity increases many problems diabetes, heart disease, sleep at me,
Speaker 1: but it also increases cognitive function. Hypertension needs to be controlled,
Speaker 1: cholesterol needs to be controlled, so real alcohol needs to
Speaker 1: be controlled. We now see, unfortunately, we used to think
Speaker 1: that one drink a day was okay, and now now
Speaker 1: unfortunately we see the more you drink, the more complications
Speaker 1: you can have. So really the best advice is to
Speaker 1: be healthy, keep your blood pressure under control, keep your
Speaker 1: cholesterol under control, keep your weight under control. And people
Speaker 1: who remain active, thinking maybe an argument to work later,
Speaker 1: don't retire so early. People who are more active physically
Speaker 1: and mentally seem to have a slower decline. Some of
Speaker 1: these can run in families, but often it's sporadic, and
Speaker 1: we don't really know why some people get these proteins
Speaker 1: in the brain that begin to damage your function, and
Speaker 1: why others do not, and why it's increasing. That's also
Speaker 1: a bit unclear, but certainly there are a few treatable
Speaker 1: causes like normal pressure hydrocephalous where you can put in
Speaker 1: a shunt and do some things to kind of slow
Speaker 1: the decline, and medications really don't reverse it. They just
Speaker 1: slow the decline. So it is you're asking the right question.
Speaker 1: We do not know why some people get these abnormal
Speaker 1: proteins that cause well, let me put it this way,
Speaker 1: it's associated with decline. We're not even sure it is
Speaker 1: forcing the decline because I'm trying to figure out, are
Speaker 1: you telling me I'm not out of ice cream? Like
Speaker 1: every day? Is that what you're telling me it sounds
Speaker 1: like it ian moderation. I think moderation is and really
Speaker 1: in all areas, and that would be the best thing.
Speaker 1: And you know, continue to ask smart questions and be
Speaker 1: engaged with many people social activities, cognitive activities as you do.
Speaker 1: Definitely will Is lowers the risk of dementia. The one
Speaker 1: thing I will say about Bruce willis, like, if you've
Speaker 1: ever I mean, he was so funny, so bright, so
Speaker 1: with it, and so it just seems like such an
Speaker 1: evil thing to have this kind of illness for someone
Speaker 1: who's so articulate and like I said, so clever. You
Speaker 1: lose yourself and the family loses their loved one, and
Speaker 1: it's really horrific. And we need more funding and more
Speaker 1: energy to really get to the cause and cure. Well,
Speaker 1: I wasn't going to ask you what the main challenges
Speaker 1: were as far as trying to find a cure, but
Speaker 1: you were just talking about the funding. Is that the
Speaker 1: main obstacle standing in the way. You know, drug companies
Speaker 1: obviously have a huge incentive. Many companies I mentioned a
Speaker 1: few are actively trying to develop a cure or a
Speaker 1: way to reverse this. Part of the problem is what
Speaker 1: we think is reversible, like these ambeloid deposits or tab
Speaker 1: protein or neurofibroli tangles. You know, when you do brain
Speaker 1: biopsies in some of the patients you see not only shrinkets,
Speaker 1: but these abnormal deposits. What's not clear is if you
Speaker 1: can reduce those, are you really changing the course of
Speaker 1: the disease? That is yet to be seen. That's the
Speaker 1: hope that if you can reduce, for example, amoloid protein,
Speaker 1: and that can occur in other error is. Amoloid can
Speaker 1: occur in the kidneys and the liver and other places.
Speaker 1: But the real thing is if you slow that down
Speaker 1: or stop that, are you really affecting the endpoint of
Speaker 1: the disease, and that we don't really know yet. Well,
Speaker 1: money is needed, Yeah, no, absolutely, And it's interesting, especially
Speaker 1: when you go back to the Alzheimer's part of it.
Speaker 1: You see drug companies certainly in the pursuit of figuring
Speaker 1: out how to treat that or come up with some
Speaker 1: kind of treatment. The stocks often move on any kind
Speaker 1: of indications in a positive way. And thank you so much,
Speaker 1: great to see you and have you here via zoom.
Speaker 1: Have a good week at doctor ian Lusbad or Clinical
Speaker 1: professor of Medicine at NYU Landgoing Medical Center. Joining us
Speaker 1: via zoom in New York City, listening to the Bloomberg
Speaker 1: Business Week podcast. Catch us live weekdays from two to
Speaker 1: five pm Eastern on Bloomberg Radio the Bloomberg Business app
Speaker 1: band you Doo. You can also listen live to our
Speaker 1: flagship New York station Just Say Alexa play Bloomberg ELBM Dierdi. Well,
Speaker 1: you might say they're mad as hell and they're not
Speaker 1: going to take it anymore. Female exects. They're exhausted, frustrated
Speaker 1: and calling it quits. The story in the new issue
Speaker 1: of Bloomberg BusinessWeek, now out on newsstands, online, up Bloomberg
Speaker 1: dot com, Slash business Week, and of course on the
Speaker 1: Bloomberg terminal. Let's get to exactly what's going on, Bloomberg
Speaker 1: News Economics reporter Joan al Marte in our Washington DC bureau.
Speaker 1: She wrote it. She joins us along with the editor
Speaker 1: Bloomberg Business Week, Joe Webber here in our Bloomberg Interactive
Speaker 1: Broker studio. Not a good trend, It's not. And the
Speaker 1: thing that really stood out to me is that, you know,
Speaker 1: there has been some progress about what female executives, how
Speaker 1: high they could go, whether it could look like those
Speaker 1: numbers were trending in the right way. And then what
Speaker 1: really stood out to me in this story it was
Speaker 1: the number of sort of you know, high profile, big
Speaker 1: names that suddenly are leading. So so break down your reporting, Janelle,
Speaker 1: and tell us about what you learned as you dug
Speaker 1: into it. So this is something that is going on
Speaker 1: and it's not fully captured in government data. And what's
Speaker 1: what's happening is that a lot of women in senior
Speaker 1: level positions. We're talking about people who work through the
Speaker 1: most intense phase of the pandemic. We're not the group
Speaker 1: that was laid off initially, you know, we're really trying
Speaker 1: to keep their staffs together, their families intact, and how
Speaker 1: to belated told to what happened. The stress and exhaustion
Speaker 1: caused during this crisis really is causing some of them
Speaker 1: to bow out. Now, what does that look like? It depends.
Speaker 1: So for some women they're moving into lower or less
Speaker 1: demanding positions. Other others are changing industries. We know there's
Speaker 1: research that shows that women were than men changed industries
Speaker 1: during the pandemic. And for other people and for other
Speaker 1: women in this position, it really means just taking a
Speaker 1: step back, walking away from their job, leaving it in
Speaker 1: some cases really lucrative paychecks behind, and saying that it's
Speaker 1: just not worth it for them. It's not what they
Speaker 1: need in their lives at this moment or what they
Speaker 1: need for their families. Okay, so there's some big name
Speaker 1: companies that are trying to help solve this problem because
Speaker 1: of how acute it's become. What are they doing so?
Speaker 1: Good point there, Joel, So what's going on is that
Speaker 1: we're seeing companies take some action. You know, these departures
Speaker 1: are not good for them, not good for the efforts
Speaker 1: that have been made to diversify corporate leadership. And it's
Speaker 1: interesting to see companies like Amazon and Goldman Sachs either
Speaker 1: invest in or relaunch or expand programs that are called returnships.
Speaker 1: And what these initiatives do is it gives people who
Speaker 1: have left workforce there a lot of them are targeted
Speaker 1: at women. It gives them a way to come back
Speaker 1: to work in a mid level position as opposed to
Speaker 1: having to start all over. And it's just one way
Speaker 1: to retain or recruit, for example, more women who might
Speaker 1: have left for whatever reason. You know, just how costly
Speaker 1: is this when you think of the progress that had
Speaker 1: been made in recent decades. How much does this undo that?
Speaker 1: So I think that's the big concern. Right, We have
Speaker 1: seen some progress, So I don't want to discount that
Speaker 1: we are seeing some growth in terms of the share
Speaker 1: of women in inn CEO positions, for example. But if
Speaker 1: you look at maybe the national level from the beer
Speaker 1: of labor statistics, that's pretty much flattened out over the
Speaker 1: past few years. There's a lot of different ways to
Speaker 1: look at this. Again, the data is not great, but
Speaker 1: I think what you're getting at just is that there
Speaker 1: is a cost here if they don't find a way
Speaker 1: to address this, if they don't find a way to
Speaker 1: make workplace is more inclusive, to allow women to more
Speaker 1: confidently feel like they can balance all of the things
Speaker 1: in there, you know, in their personal and in professional lives,
Speaker 1: that it doesn't bode well for the pipeline that is
Speaker 1: feeds into these sort of C suite you know, of
Speaker 1: course CEO level positions. And I think another thing to
Speaker 1: note is that, um, well you know, I think you're
Speaker 1: you're you're hitting on that right there. Well, it's interesting too,
Speaker 1: And I think about like if we hadn't got through
Speaker 1: the pandemic, and we all got and I've got a
Speaker 1: glimpse of you know, we all wish that hadn't happened.
Speaker 1: But it's like, wait, I don't have to commute, I
Speaker 1: get two or three or four hours left, you know,
Speaker 1: extra in my day, and I see my family and
Speaker 1: I really do like them and I'd like to spend
Speaker 1: more time with them. I mean, this concept of balance
Speaker 1: is it really here to stay where companies are like, yeah,
Speaker 1: get it, so take a day, take a half a day,
Speaker 1: leave early. Is that realistic? Is that likely to happen?
Speaker 1: Or is it that women are still doing the bulk
Speaker 1: of things at home when it comes to the family
Speaker 1: and that makes it tricky so when companies. So McKenzie
Speaker 1: and Lenin did some research on this, and what they
Speaker 1: found was that stress and exhaustion were cited for highly
Speaker 1: for some of the reasons why women were making these changes.
Speaker 1: And I think it shows exactly what you were talking
Speaker 1: about there that women in senior level positions are still
Speaker 1: taking on much more of the work at home when
Speaker 1: compared to men at the same level. And what I
Speaker 1: was going to say earlier is that a lot of
Speaker 1: women also take on extra work around the office to
Speaker 1: help that diversity, to make sure that you know, women,
Speaker 1: women of color, other underrepresented groups are getting the resources
Speaker 1: that they need, you know, the advancement that they deserve,
Speaker 1: and that kind of work. Even though it pays off,
Speaker 1: it may not always be something that's included in their compensation,
Speaker 1: for example, So it can also lead to burn out
Speaker 1: because it's it's extra effort and it may not always
Speaker 1: be rewarded. I just want to say something about the
Speaker 1: data because that is also an interesting element here, and
Speaker 1: as you wrote, the government track data leaves a little
Speaker 1: bit to be desired. So what do we have and
Speaker 1: what do we not have here if we're going to
Speaker 1: actually like attempt to wrestle with this challenge. So we
Speaker 1: have some private sector groups that are taking a look
Speaker 1: at this and as well at the government level. So
Speaker 1: at the government level, if you look at the beer
Speaker 1: of labor statistics and the share of women that are
Speaker 1: in management positions that's actually ticked down a little bit
Speaker 1: over the past year. And then the share of women
Speaker 1: who hold you know, all CEOs or rather all of
Speaker 1: the CEO positions that are held by women, that's really
Speaker 1: held flat since twenty twenty, so that can be worrisome.
Speaker 1: And then you have research and surveys from groups like
Speaker 1: Lenin and McKinsey and for example, well they found that
Speaker 1: for every two for every woman at the senior level
Speaker 1: who gets promoted, two are leaving the company ouch and
Speaker 1: that women are leaving their companies at higher levels than
Speaker 1: man So that kind of stuff does show that women
Speaker 1: are making changes. And it doesn't always mean that they're
Speaker 1: leaving their workforce, but it can mean that they're moving
Speaker 1: on to another employer which might not be good for
Speaker 1: your pipeline, or that they're moving to a less demanding
Speaker 1: position for the time being. Interesting story. I love this
Speaker 1: idea of returnships like that is certainly a new concept
Speaker 1: I hadn't heard, so I'm so glad you were able
Speaker 1: to shed some light on what's going on in that
Speaker 1: as well. Bloomberg News Economics to putter Janelle Marte. She's
Speaker 1: in our Washington, DC bureau and our thanks to the
Speaker 1: editor Bloomberg Business Week, Joel Webber here in studio. This
Speaker 1: is in the new issue at Bloomberg Business Week, on newstands,
Speaker 1: online and on the Bloomberg check it out. You're listening
Speaker 1: to the Bloomberg Business Week podcast. Catch us live weekdays
Speaker 1: from two to five pm Easter on Bloomberg Radio. The
Speaker 1: Bloomberg Business A band you do. You can also listen
Speaker 1: live to our flagship New York station, Just Say Alexa
Speaker 1: play Bloomberg e Love and Dirty, riding a few freeways,
Speaker 1: I bet in a pint And around the La area
Speaker 1: and around California is Ross Gerber. And you might recall
Speaker 1: it was just one week ago after the close, or
Speaker 1: I think or just around the close, Ross Gerber, vocal
Speaker 1: Tesla shareholder, the news came out that he would drop
Speaker 1: his bid for a board seat at Tesla. And just
Speaker 1: this week he was in Austin at the Tesla Investor
Speaker 1: Day on Wednesday. So we've got a million questions for him.
Speaker 1: He is a Tesla investor, car owner, fan, sometime critic
Speaker 1: or at least concerned about where the company's going. He
Speaker 1: is CEO at Gerber Kawasaki Wealth Management, joining SVA Zoom
Speaker 1: from Santa Monica, California. Ross, how are you. I'm good.
Speaker 1: I'm a little tired, to be honest. It was quite
Speaker 1: a quite a week and it's always graping with the
Speaker 1: Tesla community because you know, Tesla's one thing, and then
Speaker 1: the community of people around Tesla is phenomenal. So it
Speaker 1: was really fun. A couple of days. We'll take us there,
Speaker 1: bur eisen Ears, snows and toes. At that Tesla event,
Speaker 1: what you saw, what the mood was, what was being
Speaker 1: talked about, and you know what you actually got from
Speaker 1: maybe Tesla executives leading up to it, because my understanding
Speaker 1: is you were gonna have some conversations, right, Well, it
Speaker 1: turned out to be very difficult because there were about
Speaker 1: three hundred analysts there and all the executives you know,
Speaker 1: were there, but it was a little bit of a
Speaker 1: mob scene so to really have like sort of a
Speaker 1: real conversation. So it's kind of like I'll send you
Speaker 1: more information. You know. It's like it was quite an event.
Speaker 1: But I think what most people didn't get by just
Speaker 1: watching the presentation was I was able to tour the
Speaker 1: factory before the presentation, so there was a lot of
Speaker 1: things I was able to see that when they started
Speaker 1: talking about it was sort of like putting in context
Speaker 1: the things that I had seen and what I saw
Speaker 1: in Austin was phenomenal, you know, like they have grown
Speaker 1: that factory so much from when I was there a
Speaker 1: year ago for the opening and there was nothing going on,
Speaker 1: and so Tesla's really just in a lot of ways
Speaker 1: at the beginning of their next stage age. And what
Speaker 1: I really got out of the event was that the
Speaker 1: moat around Tesla's business is as deep as it's ever been.
Speaker 1: I really thought, wait, wait, wait, where's the ros gerber
Speaker 1: who wanted a board seat and was worried about distraction
Speaker 1: with Elon Musk bring them back here? You were not
Speaker 1: all a little disappointed that there wasn't an unvailing of
Speaker 1: a new vehicle. No, I wasn't disappointed at all, because
Speaker 1: that's a vehicle unveiling event and that's much more like
Speaker 1: a party. But it's really about but goat wait wait wait, wait,
Speaker 1: wait wait wait wait. Because I know our audience wants
Speaker 1: to know this, and you've been so generous with your
Speaker 1: time over the years talking Tesla, why did you drop
Speaker 1: your run for a board seat? Well it was a
Speaker 1: couple of reasons, but so really what it came down
Speaker 1: to is I love Tesla as a company. I'm an
Speaker 1: investor in the company, but I'm also a climate activist
Speaker 1: and I think it's a critically important company to solving
Speaker 1: climate and making a better world for for my children
Speaker 1: and all of us. So you know, it's it's really
Speaker 1: important for me to see them be successful, irrelevant financial
Speaker 1: side of it, and what Elon's doing is really at
Speaker 1: Twitter has really i think changed a focus in his
Speaker 1: in a lot of ways away from these critically important
Speaker 1: issues that Tesla faces. So that hasn't changed in my opinion.
Speaker 1: Just as much as I still love Tesla, I still
Speaker 1: have these issues with Elon, but I think, you know,
Speaker 1: said drop your pursuit because the board wasn't really going
Speaker 1: to get me anywhere, to be honest. So what I
Speaker 1: realized is that I don't want to get into this
Speaker 1: battle with Elon and board members where I'm spending all
Speaker 1: this time just fighting with them, because the truth is,
Speaker 1: even if I made it on the board, none of
Speaker 1: those board members were going to support me anyways. They
Speaker 1: all have their own agenda. And so what I realized
Speaker 1: when I started the board bid to when I dropped
Speaker 1: the board bid, which was a couple of weeks, was
Speaker 1: that everybody on the board spent the entire time in
Speaker 1: court for Elon, that he had all these cases, and
Speaker 1: I'm like, if I go onto the board, I'm going
Speaker 1: to end up in court defending cases all the time, Like,
Speaker 1: that's not what I'm trying to do. What I'm trying
Speaker 1: to do is make Tesla a better company. And it
Speaker 1: really just became obvious to me that I could do
Speaker 1: that without being on the board, and in fact, being
Speaker 1: on the board would be would actually not get those
Speaker 1: things done. So I realized I had made my point.
Speaker 1: The company heard me, and I think a lot of
Speaker 1: what they were showing us an investor day was trying
Speaker 1: to show the depth of the company, and that's been
Speaker 1: one of my criticism is the secession planning. And what
Speaker 1: we learned was that Tom Shoe, for example, has taken
Speaker 1: over his global production. I thought that was great news.
Speaker 1: He's a really competent executive. I think the team they're
Speaker 1: super sharp. But I'm still very concerned because Elon is
Speaker 1: the driver of all things great at Tesla, and you know,
Speaker 1: the biggest risk is if something happens to Elon and
Speaker 1: his distractions. Was this more to show that Tesla has
Speaker 1: a deep bench while Elon does get distracted with other
Speaker 1: ventures that he's doing. Whether obviously last year there was
Speaker 1: everything going on with Twitter, but was this war of
Speaker 1: a show for investors to kind of prove that if
Speaker 1: he does get distracted, there are other people there. Yeah,
Speaker 1: and I think, you know, he wanted to show the
Speaker 1: competency and the projects that these people were working on.
Speaker 1: But I think what was you know, what wasn't shown
Speaker 1: there that was still the problem is that Elan is
Speaker 1: still driving all the critical decisions being made by these teams,
Speaker 1: and so he still is critically important to Tesla. In fact,
Speaker 1: he didn't prove to me at all that he's not
Speaker 1: critically important to Tesla. And in fact, what I learned
Speaker 1: being there is that they have three incredible challenges ahead
Speaker 1: of them over the next year, which include getting full
Speaker 1: self driving to actually work, and getting forty six eighty
Speaker 1: cells to actually work, and getting the cyber truck to
Speaker 1: actually work. And so you know, I saw the cyber truck.
Speaker 1: I was touching the cyber truck. I'm like, this is
Speaker 1: the coolest truck ever. But we gotta make trucks. And
Speaker 1: so this is my concern. I think that risk is
Speaker 1: very real for Tesla, which is execution risk? Interesting? Okay,
Speaker 1: So well, so if you were sitting so you have
Speaker 1: had no conversations with Elon directly recently. No, No, if
Speaker 1: you could sit down with him, what would you say,
Speaker 1: or you ask, well, this is what so? This is
Speaker 1: what I learned also this week is that I have
Speaker 1: a fundamental disagreement philosophically with the way Elon sees the
Speaker 1: value of advertising. And I find it ironic that he
Speaker 1: owns a social media company where he pitches advertising to
Speaker 1: lots of people and then doesn't believe in it himself
Speaker 1: at all, you know, and like, so I was basically like, look,
Speaker 1: I'm going to put together a proposal and explain to
Speaker 1: you how advertising creates demand and allows you not to
Speaker 1: have to lower prices of vehicles per se to stimulate demand.
Speaker 1: And they fundamentally just believe in the economics of if
Speaker 1: I lower price, I'll have more customers. And he said
Speaker 1: it several times. If I keep lowering the price, there's
Speaker 1: an unlimited demand. And that's true because if you give
Speaker 1: away cars, everybody will get a Tesla. Right. So the
Speaker 1: idea of a premium product like LBMH is a company
Speaker 1: I follow very closely, and they sell premium products. And
Speaker 1: when we buy a premium alcohol, it's really the same
Speaker 1: Baca great, good, look at Apple, right, I mean, you pay,
Speaker 1: yeah a lot for Apple products and they don't put
Speaker 1: in from sale, right an Apple never has to put
Speaker 1: things on sale. And Apple has low end phones that
Speaker 1: you don't really like, see like they'll sell refurbished phones.
Speaker 1: But I was just saying this because I really want
Speaker 1: Tesla to be more like Apple. That whether you're wealthy
Speaker 1: or whether you're not wealthy, if you both have an
Speaker 1: iPhone and you pull it out, wealthy people don't feel like, oh,
Speaker 1: everybody has an iPhone, I need a better phone, you know,
Speaker 1: Like they don't think that because they appeal to all
Speaker 1: the markets through their marketing, and so everybody who owns
Speaker 1: an iPhone feels good about it. And I think that's
Speaker 1: the risk that Tesla becomes too much like Toyota and
Speaker 1: then they lose the high end business. I wanted to
Speaker 1: point out how select Tesla's supercharger stations in the US
Speaker 1: are now open to non Tesla evs, and our equities
Speaker 1: reporter Estra Day has done a great job covering all
Speaker 1: of this and something I wanted to ask because I
Speaker 1: know you had been tweeting about how you thought this
Speaker 1: could potentially be a great business idea, but it is
Speaker 1: a low Morgin business. So what is it about that
Speaker 1: that you think would actually benefit for Tesla. Well, I
Speaker 1: think charging can actually be a profitable business if you
Speaker 1: do it renewably. And I asked Elon about this months
Speaker 1: ago and they said that they have about a ten
Speaker 1: percent margin on charging, so they do make money on charging,
Speaker 1: and I think they're very good at it, and with
Speaker 1: their battery and solar systems, I think they can deploy
Speaker 1: charging profitably. But but I think it's also the ancillary
Speaker 1: benefit of having the charging network and the power that
Speaker 1: that has, of having the best and most reliable global
Speaker 1: charging network, you know, it's really like forward owning all
Speaker 1: the gas stations. Like, boy, that's good idea, you know.
Speaker 1: But I think opening it up to other EV companies
Speaker 1: at first I was like, oh, this super helps their competitors,
Speaker 1: which it does, but the competitors are still having trouble
Speaker 1: making cars, so Tesla's like still so far ahead. So honestly,
Speaker 1: I think it's one of the best things for EV
Speaker 1: adoption in the world. Biden created this plan where he
Speaker 1: gave companies incentives to open up their networks. They're opening
Speaker 1: up they're charging networked like Tesla, and that will increase
Speaker 1: EVY adoption greatly. So I think over time that's a
Speaker 1: huge win from Tesla, but it's also a huge win
Speaker 1: for the industry. Hey, ross two quick questions. First of all,
Speaker 1: Tesla shares they kind of tanked following that Investor Day meeting.
Speaker 1: H A lot of people were just disappointed. Were you
Speaker 1: buying on that decline? Well? No, unfortunately, you know, because
Speaker 1: of the rules. I actually every time I'm on a show,
Speaker 1: I'm not allowed to do anything with the stocks that
Speaker 1: I talk about. You know, So we had so I
Speaker 1: wasn't able to buy yesterday. Uh you know, were you
Speaker 1: But if you add where you have if you could have,
Speaker 1: well I buy Tesla. You know, every time it goes down,
Speaker 1: you know, and and you know, once again, we're long
Speaker 1: term investors and every client has a different situation somewhere.
Speaker 1: Our clients have too much Tesla, you know, right, Well,
Speaker 1: maybe have too much in fact, some are crazy. And
Speaker 1: but I think the idea is when you look at
Speaker 1: all the stocks you could buy, Tesla is still one
Speaker 1: of the most exciting and consequential companies in the world,
Speaker 1: and it's like, why wouldn't you want to own this
Speaker 1: in your portfolio? Now? I do think it's properly valued
Speaker 1: here in around two hundred dollars a share, right. I
Speaker 1: think the sell the news things happens all the time
Speaker 1: with Tesla. Every event they've done, it's like it sells
Speaker 1: off the next day. At rallybacks today it's like, whatever,
Speaker 1: all right, we gotta run, Ross, Gerbert, thank you so much.
Speaker 1: President and Chief executive Officer Gerbert Cowsake Wealth and Investment
Speaker 1: Management via Zoom from Santa Monica, California. Tesla has been
Speaker 1: on quite a run. As Ross mentioned, it's up sixty
Speaker 1: one so far in twenty twenty three. This is Bloomberg
Speaker 1: business Week Inside from the reporters and editors who bring
Speaker 1: you America's most trusted business magazine, plus global business, finance
Speaker 1: and tech news. The Bloomberg Business Week Podcast with Carol
Speaker 1: Messer and Tim Stenebec from Bloomberg Radio. Bitcoin dropping to
Speaker 1: its lowest level about two weeks part of a wider
Speaker 1: retreat in crypto markets as investors digest the unraveling of
Speaker 1: a key industry payments network. You know, we've been talking
Speaker 1: about it here at Bloomberg Silvergate Capital. Well, the calls
Speaker 1: for greater cryptoregulation they do continue addressing that. Yesterday, Gary Gainsler,
Speaker 1: he's chairman of the SEC, he showed up and spoke
Speaker 1: at the Bloomberg Market Structure conference. He also spoke with
Speaker 1: our Bloomberg Technology TV team. Check it out. There's nothing
Speaker 1: incompatible crypto and our securities laws. Our securities laws were
Speaker 1: brought about to protect the investing public against fraud and
Speaker 1: schemes and manipulation, and it was through this idea of full,
Speaker 1: fair and truthful disclosure. All right. That was Gary Gainsler,
Speaker 1: chairman of the SEC, speaking Eddie Bloomberg event. There's a
Speaker 1: lot going on in the world of crypto. I want
Speaker 1: to get right to it and jump into it with
Speaker 1: our guests. Back with us is Marco Santori. He's chief
Speaker 1: legal officer at Kraken. He joins us on zoo. Marco,
Speaker 1: it's great to have you here with us. It does
Speaker 1: feel like every day we walk in our every overnight
Speaker 1: there's some news when it comes to a crypto and
Speaker 1: another crack if you will, and you guys alone, you know,
Speaker 1: as the world in the industry of crypto kind of evolves.
Speaker 1: You made a deal to pay about thirty million to
Speaker 1: settle sec allegations that you broke the agency's rules with
Speaker 1: its crypto asset staking products and will discontinue them in
Speaker 1: the US as part of the deal. Just big broad
Speaker 1: thoughts right now, Marco on, how do you characterize the
Speaker 1: carnage and the fallout that we've seen in the past
Speaker 1: six months, twelve months when it comes to crypto, Yeah,
Speaker 1: thank you, thank you for having me. If i'd characterize
Speaker 1: it in one way, I would say it is a
Speaker 1: blast from the past. Twenty twenty three harkens back to
Speaker 1: twenty thirteen in all of the wrong ways. We've got
Speaker 1: an unclear regulatory environment, regulators who are more interested in
Speaker 1: racking up settlement wins and settlement dollars and then getting
Speaker 1: clear rules of the road to the industry, and got
Speaker 1: banking that favors incumbents over innovators. It is a tough time.
Speaker 1: It is a tough time in crypto, and every week
Speaker 1: seems to bring new new news, just a drum beat
Speaker 1: of strange, unanticipated left turns, just like silver Gate Capital
Speaker 1: this week. When you're seeing the movement there as far
Speaker 1: as that exposure, obviously, when it's just the weights linked
Speaker 1: to the dramatic decline and the collapse over FTX, and
Speaker 1: obviously the correlation there when it comes to those cryptocurrencies.
Speaker 1: I mean, do you expect to see this type of
Speaker 1: fallout continue to happen to other companies that are exposed
Speaker 1: towards that. I think we're really seeing the tal end.
Speaker 1: Just to be upfront with it, I really see we
Speaker 1: are seeing. I really believe we are seeing the tail end.
Speaker 1: Twenty twenty one and some of twenty twenty two brought
Speaker 1: some pretty irrational exuberance and some pretty irrational loosening of
Speaker 1: lending standards. I think that much is indisputable. You have
Speaker 1: Luna Tera, you have FTX, all of these interrelated lending
Speaker 1: efforts that just took too much risk, too quickly, And
Speaker 1: turns out some of the banks may have done the
Speaker 1: same thing too. I don't have any insight information there
Speaker 1: to share, but that's certainly what it what it looks
Speaker 1: like out there. Why did you guys choose to settle
Speaker 1: UM while other firms are really fighting the SEC on this?
Speaker 1: And do you expect other firms are going to have
Speaker 1: to follow suit and shutting down their own US staking operations?
Speaker 1: But first up, why did you guys settle? Yeah? I'm
Speaker 1: limited in how much I can speak about that the
Speaker 1: settlement obligates us to neither admit nor deny, and that's
Speaker 1: that's what I'll do today. I'll neither admit nor deny,
Speaker 1: but I can speak to the issues that all of
Speaker 1: us in the industry are facing. We have a regulator
Speaker 1: who says he has all the tools he needs to
Speaker 1: regulate crypto, and it's it's it's clear to it's clear
Speaker 1: as day that the SEC has all the tools they
Speaker 1: need to rack up settlements. But when industry participants go
Speaker 1: into the SEC, as we've been welcome to do, as
Speaker 1: the Chairman has welcomed us to do and told us
Speaker 1: that his door is open, when we try to do that,
Speaker 1: it is also clear as day that they do not
Speaker 1: have the tools to actually create and support fair and
Speaker 1: efficient markets or to drive capital, to try to drive
Speaker 1: capital formation. Those are the Those are two of the
Speaker 1: SEC's mandates that they are very clearly ill equipped to
Speaker 1: do today without some action from Congress. When when we
Speaker 1: go into the SEC, when other industry participants go into
Speaker 1: the SEC to come in and register, as the Chairman
Speaker 1: is set on many cases, it's just a form on
Speaker 1: our website. It turns out that's not true. That is,
Speaker 1: it is not just a form on. Is that why
Speaker 1: you guys haven't done it, and why why we haven't
Speaker 1: registered to comply with the US rules? It is. It
Speaker 1: is utterly opaque to us and every other participant in
Speaker 1: the ecosystem how we could do that. When we've gone
Speaker 1: in and asked what are your expectations as a regulator,
Speaker 1: they said, you've figured it out. That's your problem. And
Speaker 1: that is a scathing thing to hear from your regulator,
Speaker 1: from your government, particularly when you're working like I am
Speaker 1: on behalf of innovators who are trying to create jobs
Speaker 1: and trying to create efficiencies in the financial system. It
Speaker 1: is plain as day that there is no path for registration.
Speaker 1: There is no interest in creating a commercially viable path
Speaker 1: that will keep customers and Americans on American soil using
Speaker 1: American regulated platforms. It just doesn't exist today. Something I
Speaker 1: was curious about is whether or not you're considering limiting
Speaker 1: the tokens that you allow US customers to trade, just
Speaker 1: given what's happening with the regulatory crackdown. We do limit
Speaker 1: the tokens the customers trade, and we will continue to limit.
Speaker 1: We have throughout our existence as a company for over
Speaker 1: eleven years, Kraken has had a has had a robust
Speaker 1: set of policies and procedures in place by which we
Speaker 1: evaluate new tokens. Both from a business perspective, are these
Speaker 1: tokens worth? It? Is the juice worth the squeeze? Should
Speaker 1: we be listing this particular asset? But also from a
Speaker 1: legal perspective, are these things the kinds of things that
Speaker 1: we can list under existing law? If I told you
Speaker 1: that was a clear and easy thing to do over
Speaker 1: the last well now over a decade, I'd be lying
Speaker 1: to you it has not been clear and easy. But
Speaker 1: we do. We take great care in doing the best
Speaker 1: that we can to figure out under existing law what
Speaker 1: tokens are and are not securities, and we do not
Speaker 1: list the ones that are security. I'm a little confused
Speaker 1: because I am sure that you guys are as you said.
Speaker 1: You have these conversations with regulators and so on and
Speaker 1: so forth, and you're saying just even to register it's
Speaker 1: not opaque. It's not easy. I mean, what is it
Speaker 1: that specifically missing? Is it just them spelling it out?
Speaker 1: What is it that's missing? What's the tools that are
Speaker 1: missing right now? In order for the SEC to effectively
Speaker 1: regulate this industry. Yeah, we haven't gone to them and
Speaker 1: ask them to do our legal work for us. To
Speaker 1: be clear, we have gone to them and ask them,
Speaker 1: what is your what are your expectations around what we
Speaker 1: ought to disclose? You say disclosure is a cornerstone of
Speaker 1: American financial regulation. What are your expectations? What should we
Speaker 1: be disclosing about, say a staking product? What should we
Speaker 1: be disclosing about a new token that we would list.
Speaker 1: What is our obligation to disclose versus the project behind
Speaker 1: the token is? What is their obligations to disclose? If
Speaker 1: we were going to register a product like say Staking,
Speaker 1: What does registration of a product really mean in the
Speaker 1: context of the securities laws as they exist to do? Marcer,
Speaker 1: do you think that that folks forgive me for interrupting
Speaker 1: ghosts were just running a dime? But do you think
Speaker 1: that the folks in Washington and even the SEC chair
Speaker 1: that they don't totally understand it. It's clear to me
Speaker 1: that the SEC does not have the tools that they
Speaker 1: need to regulate this correctly. Unfortunately, that's yes, right, that
Speaker 1: they don't understand it. I think I think the staff
Speaker 1: at the SEC has done a remarkable job over the year,
Speaker 1: is not just coming up to speed, but now being
Speaker 1: on the van guard of understanding those things. So actually,
Speaker 1: it's a no, it's a no. These are these are
Speaker 1: smart people. These are smart people who simply do not
Speaker 1: have the tools from Congress that they need. I mean,
Speaker 1: how long do you think it'll take to actually have
Speaker 1: those tools? It has been a long time. Right. Meanwhile,
Speaker 1: we have we have Finsen who not only administers civil jurisdiction,
Speaker 1: but can impose criminal penalties for breaches of the money
Speaker 1: services laws right for sanctions laws. They release guidance years ago.
Speaker 1: They were able to do it, even with so much
Speaker 1: more at stake. It's it's it is baffling to me,
Speaker 1: and it should be baffling to anybody following along. Why
Speaker 1: we haven't gotten at minimum clear guidance from the regulators,
Speaker 1: even if Washington, even if Congress hasn't acted yet. Marco
Speaker 1: really knew me and the rest of America. I hope
Speaker 1: it happens soon, Marco. Really, it's there's so much going
Speaker 1: on with this twenty seconds. Are you worried about the
Speaker 1: sustainability of your own business because of kind of the
Speaker 1: backdrop that we've seen in just very quickly. It's it's
Speaker 1: shades of worry in crypto. It always has been. That's
Speaker 1: what risk means. I, for one, have been at this
Speaker 1: since twenty twelve. As a lawyer. I've been advising clients
Speaker 1: for over a decade. I don't yet have the gray
Speaker 1: hairs to show it, thank God, but I'm getting there.
Speaker 1: Believe me. Every day I wake up and I count
Speaker 1: my blessings that we still have the opportunity to innovate
Speaker 1: and to do it here in the US. Well, listen,
Speaker 1: we certainly appreciate your time with all that's going on,
Speaker 1: so thank you so much for coming back. Marco Sentauri.
Speaker 1: He's chief legal officer. Kraken joining us via zoom on
Speaker 1: this Friday. You're listening to the Bloomberg Business Week podcast.
Speaker 1: Catch us live weekdays from two to five pm Eastern
Speaker 1: on Bloomberg Radio, The Bloomberg Business a band you Doo.
Speaker 1: You can also listen live to our flagship New York station,
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Speaker 1: journal now, But you let me drive? No, no, no no,
Speaker 1: who's going to drive home? Honey? Please? I'll do the
Speaker 1: riding gravels. I want to drive. It's good question Drives.
Speaker 1: This is the Drive to the Clothes down con Timu
Speaker 1: than Well, Brier up, Jo down on Bloomberg Radio. All right, everybody,
Speaker 1: just about seventeen minutes left in today's trading session, getting
Speaker 1: ready to trap up the day, wrap up the day
Speaker 1: and the week, and you've got a rally underway when
Speaker 1: it comes to the equity trade. I'm looking at the
Speaker 1: major industry groups in the S and P five hundred.
Speaker 1: There are eleven of them. They're all up on the day,
Speaker 1: Carol Master, along with Jess Manton. So let's get to it.
Speaker 1: Let's get to the Drive to the Clothes with Jeff Crumpelman,
Speaker 1: his chief Investments Drovegist, head of Equities at Mariner Wealth Advisors.
Speaker 1: He is here in our Bloomberg Interactive Broker's studio app
Speaker 1: bloom Headquarters. Good to have you back with us. We've
Speaker 1: got a rally underway. January was good for stocks, February
Speaker 1: not so good. And now it looks like we're seeing
Speaker 1: some enthusiasm here in the early days of March. How
Speaker 1: would you describe this equity environment right now? So you
Speaker 1: know our message has been hold your ground through this,
Speaker 1: and I tend to have a positive view. We think
Speaker 1: through the end of the year that we're going to
Speaker 1: be forty five hundred ish or above. So that's yeah.
Speaker 1: People when they hear they just think, oh wow. On
Speaker 1: radio Jess's eyes just open, like Mike Frying. I think
Speaker 1: of say Bank of America or even Sevita over there
Speaker 1: with their praise target of around four thousand, or if
Speaker 1: you think of Mike Wilson's of the World or Work
Speaker 1: in Stanley with around thirty nine hundred. It's interesting to
Speaker 1: hear actually above those levels. Yeah, and that's not to
Speaker 1: say that it's right away. So did you think that
Speaker 1: last year's ground We did. As we moved through the year,
Speaker 1: we felt now our message was last year, if you've
Speaker 1: had three consecutive years of twenty six percent annual compound
Speaker 1: and rate or return and your allocation has gone from
Speaker 1: sixty percent equities to more than seventy as a result
Speaker 1: of that, and you haven't rebalanced, please go back to normal.
Speaker 1: Please cut back to normal. And oh, by the way,
Speaker 1: passive management probably is not the place to be. We
Speaker 1: embrace passive management in all times, but I would deemphasize
Speaker 1: it and focus on active and our internal active strategies
Speaker 1: really added value last year. So what we see this
Speaker 1: year is fundamentals that are elusively. They're positive, they're you know,
Speaker 1: a lot of the folks that have been cheering for recession,
Speaker 1: it just keeps getting pushed back. So the fundamentals are
Speaker 1: pretty good, and we've got the PMI data out this
Speaker 1: week that was surprisingly strong. And then you have valuation
Speaker 1: that I think is reasonable, it's uh, you know, not
Speaker 1: overly stretched. A lot of people might say, what are
Speaker 1: you talking about? Right, That's what I was going to asking,
Speaker 1: because you do get a lot of people will push
Speaker 1: back on the valuations. You cannot make decisions on equid
Speaker 1: market based upon valuation valuation. As long as the fundamentals
Speaker 1: are solid and you have the technical sentiment either contrainly
Speaker 1: negative which means more cash can come in, or you're
Speaker 1: kind of at neutral levels. Hey, you can have slightly
Speaker 1: expensive pees to significantly expensive pees, particularly when the WALLA
Speaker 1: Warrior items are showing improvement, like inflation significantly coming in significantly.
Speaker 1: Now the headlines say, oh, we're at decade highs, We're
Speaker 1: at six and a half percent headline, Jeff, what are
Speaker 1: you talking about? Well, we were at nine several months ago,
Speaker 1: but we are still at decade highs. Hey, if you
Speaker 1: check the data doesn't matter if you go if you
Speaker 1: got the market cares about training again, well really it
Speaker 1: really don't think so, No, I don't think so. I
Speaker 1: think we had one data point. We had really warm
Speaker 1: weather and oh boy, did anyone really check out the
Speaker 1: facts of how it's calculated, and maybe the CPI went
Speaker 1: from reuting. Okay, okay, So the reason you got that
Speaker 1: tick up was partially as a result of that month
Speaker 1: over month, year over year, we still came down rents.
Speaker 1: If you look at rents, you're actually getting some disinflation
Speaker 1: on new rents. So does it okay? Because we want
Speaker 1: to talk ahead, I know you want to talk. Well,
Speaker 1: I'm just going to save these between producer prices and
Speaker 1: consumer prices actually turned positive for the first time whenever
Speaker 1: we got the December data batch. That typically when I
Speaker 1: talked to portfolio managers, sometimes they look toward producer prices
Speaker 1: as glimmers of hope before it starts filtering into consumer prices.
Speaker 1: Is that something that you watch closely as well? We
Speaker 1: watch overall trend and you've gotten one month, we are
Speaker 1: not going to get perfectly How much of a trend
Speaker 1: of change would you need to see in order to
Speaker 1: force the FED to change course? Not necessarily do potentially
Speaker 1: another twenty five basis point high, but to move back
Speaker 1: toward fifty. How many sam of Hodder data do you
Speaker 1: think we would need to see? Like a quarter's worth
Speaker 1: is two months enough? What do you think? Especially? I love,
Speaker 1: I respect Larry Summers, but I think he's made a
Speaker 1: number of statements that have not come to do you
Speaker 1: think the FED should be done? Then? We think that
Speaker 1: the FED will hike to five and a quarter to
Speaker 1: five and a half. We'll probably get twenty five basis
Speaker 1: points in the lane fed. Uh you know, Bostick just
Speaker 1: came out and said, you know, probably twenty five. And
Speaker 1: we think that based and built into our base case
Speaker 1: for forty five hundred is a couple more FED hikes.
Speaker 1: And here's what I see. I just a couple more,
Speaker 1: a couple more. Okay, but hey, you know what we've
Speaker 1: called the mary everyone's crabby and we're are FED funds
Speaker 1: we're five percent? Do you know what average FED funds
Speaker 1: is over the mark of time through history? Five? So
Speaker 1: when I hear unprecedented. I'll tell you what's unprecedented was zero.
Speaker 1: The other thing it was unprecedented, and we've talked about
Speaker 1: that a lot here on air. Okay, So that at
Speaker 1: the low rate, the negative like that was the unusual thing, folks.
Speaker 1: This is more normal. So we're running a three percent
Speaker 1: annualized pace. If you take the last quarter, we're down
Speaker 1: to three. And I'm not bold enough to say this.
Speaker 1: There's a lot of peers that I talk to, smart
Speaker 1: people that say, you know, Jeff, what we're going to
Speaker 1: be talking about and the thing to worry about at
Speaker 1: the end of the year is deflation disinflation, And when
Speaker 1: those headlines hit, people are going to start worrying about
Speaker 1: recession and oh my gosh, and we'll have them maybe
Speaker 1: a moment then not inflation. I think we're coming down significantly.
Speaker 1: Supply chain bottlenecks are solving themselves. And if you go
Speaker 1: in and you talk to anybody, fifty percent of us
Speaker 1: or in a new job, think about you. When you're
Speaker 1: in a new job, you don't even know where the
Speaker 1: water cooler is, right, So you can get a tremendous
Speaker 1: increase in productivity over the next twelve months. That's been
Speaker 1: missing and absent. It's been a wall, and in fact,
Speaker 1: we finally had an uptick in Q four. If you
Speaker 1: get productivity rising, you can raise unit labor costs, okay.
Speaker 1: You can have wages increase without increasing, and you can
Speaker 1: put through some increase book without it hitting the margin.
Speaker 1: And if you get that, yeah, then we're talking a
Speaker 1: different ballgame. All right. I'm a little mad at you
Speaker 1: because there are a bunch of names I wanted to
Speaker 1: talk about, but because I like you, we're gonna give
Speaker 1: you a pass. Just come back soon, okay, all right,
Speaker 1: Jef Crumpleman over at Mariner Wealth Advisors, here in studio.
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