WEBVTT - Markets, Consumer Confidence, And ETFs 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:21.639 at Bloomberg dot com slash podcast. This really knocked me 0:00:21.680 --> 0:00:25.200 off my game. Here my colleague, co host Katie Greifeld, 0:00:25.239 --> 0:00:28.240 and my producer Eric Mullow, neither of them have seen 0:00:28.320 --> 0:00:32.040 Top Gun. No, I can't even imagine what is about. 0:00:32.200 --> 0:00:34.560 So the homework for the kids today is go home, 0:00:34.800 --> 0:00:38.280 get a streaming service of your choice and stream Top Gun. 0:00:38.680 --> 0:00:40.600 That's the homework because we are a Top Gun two 0:00:40.600 --> 0:00:42.839 coming out, and you've gotta be prepared for that. Dan, 0:00:42.920 --> 0:00:44.720 I know, I know Dan Genter has seen Top Gun. 0:00:44.880 --> 0:00:49.879 Dan Genter, CEO Chairman RNC Genter Capital Management, Dan, are 0:00:49.880 --> 0:00:52.680 you a Top Gun fan? I am absolutely a Top 0:00:52.720 --> 0:00:55.360 gust fan. I've seen it several times. I'm actually a 0:00:55.400 --> 0:00:59.000 pilot myself, So it's like that explains it my theme movie, 0:00:59.360 --> 0:01:01.760 and I just I align with you. I can't believe 0:01:01.760 --> 0:01:03.800 they haven't seen it. But but I have faith in 0:01:03.800 --> 0:01:05.640 the future that they will go home and look at 0:01:05.680 --> 0:01:09.640 this and round out their education. Yes, I can't agree more. 0:01:09.840 --> 0:01:12.120 All right, then let's get back to these pesky markets here. 0:01:12.160 --> 0:01:14.360 We have some green on the screen today, but the 0:01:15.000 --> 0:01:17.880 bricks that are in this wall of worry, there's just 0:01:18.040 --> 0:01:20.440 a lot of them. How are you looking at these 0:01:20.480 --> 0:01:24.039 markets today? What are you telling your clients? Well, I 0:01:24.080 --> 0:01:26.000 think that what you have to do, Paul, is which 0:01:26.000 --> 0:01:27.840 you always have to do in these kind of situations 0:01:27.840 --> 0:01:30.399 and crisis, is that the you have to really cut 0:01:30.400 --> 0:01:34.440 through the fundamentals. It's not that you can't totally ignore 0:01:34.480 --> 0:01:36.800 the emotion because obviously the market is going to trade 0:01:36.800 --> 0:01:38.960 it on emotion. Otherwise we just traded a constant p 0:01:39.200 --> 0:01:41.559 at all times. But you still have to come back 0:01:41.640 --> 0:01:43.920 or what are the fundamentals of this market? You know, 0:01:44.000 --> 0:01:47.200 talking about aviation you started at thirty foot Look and 0:01:47.240 --> 0:01:51.000 you basically look at the overall economics and an essence 0:01:51.040 --> 0:01:53.240 are we are we going into a recession and they 0:01:53.480 --> 0:01:55.440 and the fact is, you know, we're not. You know, 0:01:55.480 --> 0:01:59.280 we're slowing, Earnings are slowing. Certainly growth is going to slow, 0:01:59.760 --> 0:02:02.960 but but look, we're still going to be probably above 0:02:03.000 --> 0:02:05.600 FED expectations at at least two and a half three 0:02:06.000 --> 0:02:08.400 GDP growth, you know, going in through the mainner of 0:02:08.400 --> 0:02:11.760 this year. In three we think that earnings are certainly 0:02:11.800 --> 0:02:14.840 gonna slow, but we're probably going to see sp earnings 0:02:14.919 --> 0:02:18.160 up five or six percent, and so therefore you don't 0:02:18.200 --> 0:02:20.320 have a recession. The market is probably going to be 0:02:20.400 --> 0:02:24.239 flat slightly up. We see about a eight percent market 0:02:24.560 --> 0:02:28.120 over the next twelve months, and uh, mainly probably some 0:02:28.240 --> 0:02:31.480 pe contraction, but earnings are going to drive the rest 0:02:31.520 --> 0:02:34.160 of it. And so it's still it's it's now very 0:02:34.200 --> 0:02:37.240 much of a stock pickers market, and uh, you can 0:02:37.280 --> 0:02:39.800 buy into some of this weakness and certainly the volatility 0:02:39.840 --> 0:02:42.760 we're seeing, and that's what we're doing. Well, let's wrap 0:02:42.880 --> 0:02:45.120 some of the movements that we've seen in commodity markets 0:02:45.120 --> 0:02:47.519 into that, because obviously all eyes have been on crude 0:02:47.520 --> 0:02:50.560 oil for you know, several months now, and uh, I 0:02:50.600 --> 0:02:53.760 mean we're looking at crude oil at close to a 0:02:53.840 --> 0:02:56.400 hundred dollars a barrel, but a hundred two dollars a barrel, 0:02:56.680 --> 0:03:00.400 I mean, assuming we stay around this range, mean, what 0:03:00.520 --> 0:03:03.320 does that mean for you know, the fundamentals of the 0:03:03.400 --> 0:03:06.399 U S economy and for companies you know, dealing with 0:03:06.440 --> 0:03:10.359 those input costs. Well, Katie, I mean you're absolutely right. 0:03:10.560 --> 0:03:14.600 Is that this market is driven independent of the war obviously, 0:03:14.639 --> 0:03:17.200 which is a major factor, but from an economic standpoint, 0:03:17.680 --> 0:03:21.480 is being driven by oil and inflation. And and even 0:03:21.480 --> 0:03:25.320 the oil is only three percent of the inflationary inputs 0:03:25.360 --> 0:03:28.520 now versus where it was many years ago, it's still 0:03:28.840 --> 0:03:31.120 a major factor when you start to look at how 0:03:31.120 --> 0:03:34.440 it affects every individual and and how it affects their 0:03:34.440 --> 0:03:38.760 disposable income. I mean, the current increases that we've had 0:03:38.760 --> 0:03:41.320 an oil we estimate is going to cost the average 0:03:41.360 --> 0:03:45.080 family over a thousand dollars a year more. And so 0:03:45.160 --> 0:03:48.000 something's going to give with that. So a stabilization and 0:03:48.120 --> 0:03:50.920 oil is very key to us. We think that equal 0:03:51.160 --> 0:03:54.400 liberal was somewhere around eighty dollars. But it's going to 0:03:54.400 --> 0:03:56.800 affect earnings and that's part of what we're factoring in 0:03:56.800 --> 0:03:59.880 that it's going to slow the economy from overall consumption 0:04:00.000 --> 0:04:03.120 because we're driven by consumption. And if you take money 0:04:03.160 --> 0:04:06.360 away from people, and increase in oil prices is basically 0:04:06.360 --> 0:04:09.400 like a tax. Uh you basically you take it away 0:04:09.400 --> 0:04:13.360 from people. Uh, It doesn't add anything to productivity. They 0:04:13.400 --> 0:04:15.520 just lose the ability to spend on something else and 0:04:15.560 --> 0:04:20.000 therefore earnings go down. It affects consumer, uh, mainly consumer 0:04:20.640 --> 0:04:23.760 non durables, but also durables. So that's to us as 0:04:23.839 --> 0:04:27.040 part of that slowing effect. Anytime you have you know 0:04:27.120 --> 0:04:30.240 that displacement, if you will inflation, it goes through the 0:04:30.240 --> 0:04:33.040 whole system. But I don't think that that takes us negative. 0:04:33.440 --> 0:04:35.880 It just takes us to where we're at slower growth. 0:04:36.880 --> 0:04:38.840 So that's kind of where I wanted to go Dan, 0:04:38.880 --> 0:04:41.360 because a lot of folks are saying, boy, this Federal Reserve, 0:04:41.600 --> 0:04:44.280 it is clearly communicated that it wants to fight inflation 0:04:44.320 --> 0:04:48.279 in part through rate increases. But the risk is maybe 0:04:48.279 --> 0:04:51.360 they go too far, too fast and push this economy 0:04:51.400 --> 0:04:54.640 into a recession, and nobody wants that. How do you 0:04:54.760 --> 0:04:57.880 kind of weigh those risks? Well, look, I think it's 0:04:57.920 --> 0:05:00.160 baked in that one thing. You know, with regard US 0:05:00.200 --> 0:05:04.479 two chairman policies being has been extraordinarily transparent. I believe 0:05:04.520 --> 0:05:07.200 he's also doing that now. I don't think we're going 0:05:07.240 --> 0:05:10.040 to be surprised. And and the market is largely discounting 0:05:10.040 --> 0:05:11.719 a lot of that already. I mean we've we've had 0:05:11.760 --> 0:05:16.520 a hundred basis points increase, uh, not exactly a parallel shift, 0:05:16.560 --> 0:05:18.640 but close to it. Certainly the ten years up a 0:05:18.680 --> 0:05:22.840 hundred basis points, uh since November, and so a lot 0:05:22.880 --> 0:05:25.000 of it's baked in the cake already, and they are 0:05:25.040 --> 0:05:27.240 going to slow it now. We feel that we'll see 0:05:27.600 --> 0:05:31.320 definitely another seventy and almost certainly another hundred basis points 0:05:31.360 --> 0:05:34.520 from here. You know, we've modeled that out, uh to 0:05:34.640 --> 0:05:36.760 see what does that really do to us. We think 0:05:36.800 --> 0:05:39.080 it's largely baked. It's baked into our numbers with what 0:05:39.120 --> 0:05:42.240 I've mentioned earlier for SB orange growth and also for 0:05:42.279 --> 0:05:45.280 the overall economy. Uh. Certainly it's going to squeeze the 0:05:45.320 --> 0:05:48.560 housing market. Uh. You know, it just makes everything once 0:05:48.600 --> 0:05:51.520 again more expensive. It really adds to inflation, if you will, 0:05:51.560 --> 0:05:54.120 because your cost of money is going to be higher. 0:05:54.520 --> 0:05:56.760 You know. Well, now, whether they overshoot it, I mean 0:05:56.800 --> 0:06:00.000 personally I think that they'll go slower. Uh, they'll continue 0:06:00.000 --> 0:06:04.240 you as the as the data comes in, but it 0:06:04.240 --> 0:06:06.160 wouldn't be unusual for them to do a fifty A 0:06:06.200 --> 0:06:09.240 matter of fact, if you look historically, usually the first 0:06:09.279 --> 0:06:13.120 time the Fed reverses course from uh, they go fifty, 0:06:13.440 --> 0:06:16.080 they go fifty at the beginning, whether they're raising or lower, 0:06:16.080 --> 0:06:18.279 and they go fifty and at the end they go fifty. 0:06:18.360 --> 0:06:20.760 The signal that they've stopped. So it would not be 0:06:20.800 --> 0:06:23.120 out of normal to see that. Hey, Dan, thanks so 0:06:23.200 --> 0:06:26.120 much for joining us there. Always appreciate getting your prospective. 0:06:26.320 --> 0:06:30.159 Dan Genter, CEO, ce IO and chairman. It's also a 0:06:30.240 --> 0:06:38.120 pilot of r n C Genter Capital Management. Here. Now, 0:06:38.200 --> 0:06:39.839 let's going to Lynn Franco and break down some of 0:06:39.839 --> 0:06:43.520 those UM consumer confidence number. She's the director of Economic 0:06:43.520 --> 0:06:46.560 Indicators and Surveys. At the conference board, Lynn talked to 0:06:46.640 --> 0:06:50.720 us about the consumer today. What did your data show you, Well, 0:06:50.760 --> 0:06:54.160 we're saying that the consumer confidence is holding steady, so 0:06:54.240 --> 0:06:56.400 we went from one oh five seven last month to 0:06:56.520 --> 0:06:59.479 one oh seven point two. But it really is being 0:06:59.480 --> 0:07:03.159 suppoored by the present conditions where consumers are telling us 0:07:03.160 --> 0:07:06.520 at least the economy remains on somewhat stable footing, and 0:07:06.600 --> 0:07:09.600 that's really just because we have very strong employment conditions, 0:07:09.600 --> 0:07:13.880 so that's really sort of boosting consumer confidence. Looking ahead, 0:07:14.240 --> 0:07:20.040 we've seen expectations that continue to deteriorate. UM within consumer 0:07:20.120 --> 0:07:23.760 sighting both inflation, especially rising prices at the gas pump, 0:07:24.240 --> 0:07:27.880 and the war in Ukraine as um, sort of the 0:07:28.000 --> 0:07:31.600 reasons why they are a little bit more apprehensive about 0:07:31.600 --> 0:07:35.120 the outlook. And you mentioned that, you know, there is 0:07:35.160 --> 0:07:38.200 a lot of confidence in the labor market, and looking 0:07:38.240 --> 0:07:40.480 at this morning's data, is the sheriff consumers who said 0:07:40.480 --> 0:07:43.280 the jobs were plentiful increased to a record high of 0:07:43.320 --> 0:07:46.480 about fifty seven point two per cent. But I mean, 0:07:47.360 --> 0:07:49.960 how how much work is that confidence in the labor 0:07:50.000 --> 0:07:51.960 market doing right now? Because of course, you know, we're 0:07:51.960 --> 0:07:55.679 dealing with record high inflation. It seems like that hasn't 0:07:55.840 --> 0:08:01.680 undermined the labor market yet, correct, And in fact, our 0:08:01.720 --> 0:08:05.400 inflation question hit and all time high, so it's really 0:08:05.440 --> 0:08:10.400 being offset by strong employment conditions. Um. But you know, 0:08:10.440 --> 0:08:13.280 we do expect inflation and you know, the war in 0:08:13.440 --> 0:08:17.400 Ukraine to continue to provide hig winds both to growth, 0:08:17.680 --> 0:08:21.640 spending and confidence. So it remains to be seen just 0:08:21.760 --> 0:08:25.480 how you know, well confidence holds up, and in terms 0:08:25.520 --> 0:08:29.320 of overall growth, we do have it somewhat weaker than 0:08:29.480 --> 0:08:34.880 last month. Our outlook has maybe GDP growing at about 0:08:34.920 --> 0:08:37.400 one point seven and Q one down to one point 0:08:37.480 --> 0:08:41.160 three and Q two and also consumer spending softening as 0:08:41.160 --> 0:08:45.760 a result of higher inflation. Lynn, I mean, the labor 0:08:45.800 --> 0:08:49.000 markets just fascinates me. I'm still wondering where those three 0:08:49.080 --> 0:08:51.760 four or five million people are that we're in the 0:08:51.760 --> 0:08:55.720 workforce pre pandemic, Where are they now? Are they going 0:08:55.800 --> 0:08:59.280 to come back? What's the data you've seen, the analysis 0:08:59.400 --> 0:09:03.360 you've done about those people. Well, we've seen you know, 0:09:03.400 --> 0:09:06.480 in particular, you know, women have been hard hit right 0:09:06.559 --> 0:09:09.840 in childcare has been an issue. So this is sort 0:09:09.840 --> 0:09:13.040 of one segment of the labor market that continues to 0:09:13.480 --> 0:09:17.240 uh sort of hasn't quite bounced back from you know, 0:09:17.320 --> 0:09:20.640 pre COVID pandemic levels. So I think that's going to 0:09:20.679 --> 0:09:23.680 continue for the next couple of months. But what we're 0:09:23.679 --> 0:09:25.560 seeing here and I think what we expect to see 0:09:25.559 --> 0:09:28.200 at the end of the week are pretty good employment numbers, 0:09:28.200 --> 0:09:32.240 so at least that will continue to support consumer confidence 0:09:32.240 --> 0:09:35.400 and growth in the short term. And then focusing on 0:09:35.480 --> 0:09:39.200 the consumer, you know, a question we ask a lot is, Okay, 0:09:39.200 --> 0:09:42.560 when does inflation increase the point where you know, people 0:09:42.600 --> 0:09:45.839 start putting off purchases or stop spending as much money 0:09:45.880 --> 0:09:48.400 as they have been. Um, I'm curious you know what 0:09:48.559 --> 0:09:52.319 you see, uh. In regards to that question, well, we 0:09:52.400 --> 0:09:55.280 see a little bit of you know, inflation, and also 0:09:55.400 --> 0:09:58.920 I think, you know, interest rate hikes and anticipation of 0:09:59.800 --> 0:10:01.920 have being a little bit of a softening effect at 0:10:01.960 --> 0:10:04.280 least that we're seeing over the last few months. And 0:10:04.360 --> 0:10:07.240 you know, sort of automobile purchases, home purchases. You know, 0:10:07.280 --> 0:10:10.040 we've seen mortgage rates of going up, so sort of 0:10:10.040 --> 0:10:13.360 these big ticket items that are interest rate sensitive, we're 0:10:13.400 --> 0:10:16.840 beginning to see a little bit of softening there as well. Lynn. 0:10:16.880 --> 0:10:21.360 Some economists are introducing the word recession into their talking points. 0:10:21.480 --> 0:10:23.160 Is that a meaningful risk for the US economy and 0:10:23.160 --> 0:10:26.720 your from your perspective, From our perspective, we don't see 0:10:26.720 --> 0:10:30.760 your recession. We do see softening and growth and consumer 0:10:30.840 --> 0:10:33.720 spending over the next several months, but at this point 0:10:33.720 --> 0:10:36.679 so we're not forecasting recession. All right, Lynn, thank you 0:10:36.720 --> 0:10:39.520 so much for joining us. As always, Lynn Franco, the 0:10:39.600 --> 0:10:42.520 director of Economic Indicators and Surveys at the conference board 0:10:42.520 --> 0:10:45.160 at breaking down the consumer confidence number today, which came 0:10:45.200 --> 0:10:50.240 out a little bit better and expected. It is finally 0:10:50.320 --> 0:10:53.000 times talk about crypto. We're going to do that with 0:10:53.040 --> 0:10:56.520 Greg King. He is the CEO of Osprey Funds. Uh. 0:10:56.600 --> 0:11:01.040 They offer access to cryptos such as Salana, Bitcoin, UH, 0:11:01.200 --> 0:11:04.320 Polka Dot, you name it via traditional vehicles. Greg, it's 0:11:04.360 --> 0:11:06.080 great to have you with us. Let's start with a 0:11:06.120 --> 0:11:08.760 big rebound that we've seen in the crypto space over 0:11:08.760 --> 0:11:11.360 the past week or so. I'm looking at bitcoin at 0:11:11.480 --> 0:11:15.040 just a hair below forty eight thousand dollars per coin. 0:11:15.559 --> 0:11:19.199 How has that translated into flows in your funds? Are 0:11:19.200 --> 0:11:24.600 you seeing cash come in? So the bitcoin fund that 0:11:24.640 --> 0:11:27.760 we operate is traded on the secondary market under the 0:11:27.760 --> 0:11:31.480 ticular oh b tc UM. It's similar to UM, the 0:11:31.640 --> 0:11:33.480 Gray Skull Trust that's been up for a long time. 0:11:33.480 --> 0:11:37.280 It's just at a different price point, more more, less 0:11:37.280 --> 0:11:39.720 expensive for investors. But these products trade a little bit 0:11:39.720 --> 0:11:43.120 differently than actual bitcoin because there's a fixed supply, So 0:11:43.160 --> 0:11:46.280 they traded premiums and discounts, and in times like this 0:11:46.320 --> 0:11:49.559 when the price is rallying, you can see that discount narrow. 0:11:49.920 --> 0:11:52.679 For a long time, those products traded in their premium, 0:11:52.760 --> 0:11:54.640 but over the last year or so, they've been trading 0:11:54.640 --> 0:11:57.000 in a discount. So it is an interesting opportunity for 0:11:57.040 --> 0:12:00.760 investors to get ahold of bitcoin at basically less based value. 0:12:01.360 --> 0:12:05.839 All right, Greg, So we are going into a significantly 0:12:06.000 --> 0:12:09.440 rising interest rate environment. Do we have any data to 0:12:09.600 --> 0:12:14.319 show how crypto performs in that type of environment. It's 0:12:14.360 --> 0:12:16.920 a great question. I think the part that we're focused 0:12:16.960 --> 0:12:21.840 on is real rates, right, because unfortunately real rates are 0:12:22.360 --> 0:12:25.439 pretty severely negative with the inflation numbers we've seen seven 0:12:25.400 --> 0:12:27.600 and a half percent and the ten years you know, 0:12:27.679 --> 0:12:30.760 two and a half and so in those environments, the 0:12:31.200 --> 0:12:34.800 natural comparison, of course, the bitcoin UM for those of 0:12:34.880 --> 0:12:38.400 us kind of living in that world, is the old 0:12:38.400 --> 0:12:41.199 world version of bitcoin gold, right, And I know a 0:12:41.240 --> 0:12:43.080 lot of people out there are cringing when I say that, 0:12:43.160 --> 0:12:46.679 but the reality is that bitcoin has established itself as 0:12:46.720 --> 0:12:50.000 a digital substitute for gold, and so we would expect 0:12:50.000 --> 0:12:53.840 it to behave similarly and negative real interest rate environments 0:12:53.880 --> 0:12:57.520 are fantastic for gold historically, so you are seeing some 0:12:57.600 --> 0:13:00.760 of that develop in the price a bitcoin. You've also 0:13:00.800 --> 0:13:03.360 seen a few announcements with UM. I think it started 0:13:03.400 --> 0:13:05.920 a few weeks ago with the White House putting out 0:13:05.960 --> 0:13:11.280 the directive to UM, you know, responsibly innovate with digital assets. 0:13:11.600 --> 0:13:15.040 But then more recently there were some announcements UM by 0:13:15.040 --> 0:13:18.120 a group in Korea that you know, audience members are 0:13:18.200 --> 0:13:19.959 not deep into the crypt of the world. They may 0:13:20.000 --> 0:13:21.720 not have heard of it. It's a large stable coin 0:13:21.880 --> 0:13:25.839 project UM called Terra that's buying quite a bit of 0:13:25.880 --> 0:13:29.120 bitcoin for its reserves. And so you have these new, 0:13:29.840 --> 0:13:34.320 uh you know, digital assets participants almost acting like miniature 0:13:34.360 --> 0:13:37.880 central banks and using bitcoin as their own reserve asset. 0:13:38.679 --> 0:13:40.560 And Greg, I want to circle back to a point 0:13:40.600 --> 0:13:44.120 you made the fact that o b tc your inaugural product. 0:13:44.320 --> 0:13:46.880 It's trading at a discount similar to the Gray Scale 0:13:46.880 --> 0:13:50.360 product GBTC, and you know the way you framed it 0:13:50.480 --> 0:13:53.319 as you know you can pick up bitcoin at a discount. 0:13:53.880 --> 0:13:57.319 The pushback would be that long term holders of this trust, 0:13:57.800 --> 0:14:01.080 you know, they they've really seen there in vestments road 0:14:01.400 --> 0:14:04.160 and they're they're now they would have been better off 0:14:04.200 --> 0:14:07.840 holding bitcoin itself. And I'm curious, how do you fix 0:14:08.320 --> 0:14:12.720 the discount if there is a fixed supply of your trust. 0:14:12.800 --> 0:14:15.640 I know that Gray Scale has been buying back shares 0:14:15.679 --> 0:14:17.920 of the trust, or rather their parent company. Has have 0:14:18.040 --> 0:14:22.720 you considered anything similar? We have? We have. I think 0:14:22.840 --> 0:14:25.480 that what we're focused on. We keep pretty close tabs 0:14:25.520 --> 0:14:29.600 on the um SEC in the regulatory environment. I think 0:14:29.600 --> 0:14:32.360 that's that's one of the themes you're seeing this year. 0:14:32.440 --> 0:14:35.840 That's that's constructive. UM, you did get the Bitcoin features 0:14:36.440 --> 0:14:39.160 et F approved, You've got you know, the Biden White 0:14:39.200 --> 0:14:42.000 House putting on the directive. UM, there seems to be 0:14:42.120 --> 0:14:47.320 movement that's establishing some amount of clarity on the regulatory side, 0:14:47.600 --> 0:14:50.200 which is all good for the prospects of something like 0:14:50.240 --> 0:14:52.880 a bitcoin PF. And so our focus would be to 0:14:53.960 --> 0:14:58.040 convert our fund to an EPF when that's possible, and 0:14:58.120 --> 0:15:00.480 at that point we'd expected to trade in line with 0:15:00.560 --> 0:15:03.200 fair value. By the way your comment earlier, I think, 0:15:03.640 --> 0:15:08.000 I think is UM totally dependent on when investors came 0:15:08.040 --> 0:15:10.960 into you know, either our product or other people's product. 0:15:11.520 --> 0:15:13.960 You know, So it's it's really everybody's got their own 0:15:13.960 --> 0:15:16.760 story in terms of when they came in UM and 0:15:16.800 --> 0:15:19.440 when they when they came out. But you know, it's 0:15:19.480 --> 0:15:22.400 an unfortunate situation in the sense that the regulatory environment 0:15:22.440 --> 0:15:24.920 has just taken I mean, you had the wink of 0:15:25.000 --> 0:15:28.280 us twins filing for the first bitcoin ETF in two 0:15:28.280 --> 0:15:32.040 thousand thirteen, and I mean, given that we have been 0:15:32.160 --> 0:15:34.360 waiting so long, we did get movement in October, we 0:15:34.440 --> 0:15:38.480 got that derivatives back Bitcoin fund. That didn't seem to 0:15:38.480 --> 0:15:41.280 be the holy grail that the crypto industry was waiting for. Though, 0:15:41.560 --> 0:15:43.920 when do you think we could see movement and an 0:15:43.920 --> 0:15:48.400 approval of a physically backed bitcoin ETF. Well, a couple 0:15:48.400 --> 0:15:50.560 of your own analysts wrote an article the other day 0:15:50.600 --> 0:15:54.160 about the SEC's proposal to expand the definition of the 0:15:54.200 --> 0:15:58.400 word exchange and some of the regulation. Um, this could 0:15:58.520 --> 0:16:02.920 open up the possibility for an ets sooner, um rather 0:16:02.960 --> 0:16:07.320 than later. However, when I say sooner in SEC speak, 0:16:07.400 --> 0:16:11.760 that's you know, a year ish or more. Um. I'm 0:16:11.760 --> 0:16:15.480 not sure personally that Mr Gensler is very keen on 0:16:15.520 --> 0:16:18.000 the idea of a spot bitcoin ETF. He seems to 0:16:18.040 --> 0:16:20.080 have gotten comfortable with the idea of future is based 0:16:20.080 --> 0:16:24.560 obviously um, But primarily that's because, um, you know, the 0:16:24.560 --> 0:16:28.320 futures are are regulated instruments, whereas bitcoin itself is not. So, 0:16:28.720 --> 0:16:32.320 you know, the definition of the word exchange being expanded 0:16:32.400 --> 0:16:36.160 could uh, you know, capture like a coin base, and 0:16:36.200 --> 0:16:40.400 therefore the trading of bitcoin on that exchange would by 0:16:40.480 --> 0:16:44.080 definition become regulated trading um, and so on and so forth, 0:16:44.120 --> 0:16:46.160 So it would be a step in that direction, but 0:16:46.200 --> 0:16:50.440 I still think there are other factors. Consider the main 0:16:50.520 --> 0:16:54.320 one is bitcoin trade so much offshore and that's just 0:16:54.480 --> 0:16:58.920 really not um something that they can observe directly. All Right, 0:16:59.120 --> 0:17:01.520 Great King, thank you so much for joining us, always 0:17:01.960 --> 0:17:04.720 like chatting getting the updated all things crypto. Great King, 0:17:05.160 --> 0:17:08.240 CEO and founder of Osbrey Funds. Again, they've got the 0:17:08.840 --> 0:17:12.480 uh secure, cost effective access to a select group of 0:17:12.560 --> 0:17:15.919 crypto via traditional vehicles. That's what the folks at Osprey do. 0:17:18.640 --> 0:17:20.240 All right, let's talk to our next guy because I 0:17:20.280 --> 0:17:23.040 really want to get her thoughts here because I she 0:17:23.119 --> 0:17:25.280 has a really interesting view of this market that perhaps 0:17:25.560 --> 0:17:28.560 investors should be on the lookout for bear market rallies, 0:17:28.600 --> 0:17:32.159 which I find very interesting. Katerina semin Eddie, Senior vice president, 0:17:32.160 --> 0:17:35.080 Private Wealth advisor from Morgan Stanley. So, Katerina, are you 0:17:35.119 --> 0:17:38.400 buying this move higher in the markets or is this 0:17:38.880 --> 0:17:42.840 a bear market rally? Well, thank you for having me 0:17:42.880 --> 0:17:45.560 on um. This is a good question. Right, we had 0:17:46.240 --> 0:17:49.840 a pretty big pullback followed by seemingly a big rally. 0:17:50.080 --> 0:17:53.400 But the question is are we in the bear markets? 0:17:53.640 --> 0:17:56.520 And we believe so, we believe that yes, this is 0:17:56.560 --> 0:17:59.320 a bear market. We have been in a bear market 0:17:59.440 --> 0:18:03.400 for quite some time. We came into this year concerned 0:18:03.440 --> 0:18:07.800 about evaluations, fed tightening and plation growth slow down, you know, 0:18:07.880 --> 0:18:09.920 all of the above, and of course the war in 0:18:10.080 --> 0:18:15.560 Ukraine introduced this new component of now unpredictability and making 0:18:15.640 --> 0:18:19.960 all these concerns that we have, you know significantly, you know, wars. Now. 0:18:20.040 --> 0:18:22.400 This is not to say that there are no pockets 0:18:22.400 --> 0:18:25.520 of opportunity in this market. There absolutely are. The investors 0:18:25.560 --> 0:18:28.000 should be in position to take advantage of them. But 0:18:28.160 --> 0:18:31.359 they are bear market rallies and they have to be 0:18:31.440 --> 0:18:34.760 seen as such, and it is very important for the 0:18:34.960 --> 0:18:37.240 outlook for the remainder of this year and in fact 0:18:37.240 --> 0:18:41.080 for the next year as well. And Katerina wrap in 0:18:41.119 --> 0:18:43.240 what we're seeing in some of these mega cap tech 0:18:43.320 --> 0:18:46.120 names in because we're looking at Apples. At Apples eleven 0:18:46.160 --> 0:18:49.000 straight days day of gains, that is the longest streak 0:18:49.320 --> 0:18:52.080 since two thousand three. I don't think smartphones even existed 0:18:52.119 --> 0:18:55.119 back then. But the fact that you are seeing such 0:18:55.280 --> 0:18:59.360 importantly big parts of the market also contribute in this. 0:18:59.760 --> 0:19:01.800 You know, maybe it's a dead cat bounce, I mean, 0:19:01.960 --> 0:19:05.399 how does that change the profile of this bear market? 0:19:05.440 --> 0:19:10.159 Does that shorten the time that we might be in it. Well, Katie, 0:19:10.240 --> 0:19:13.720 you you raise a really good point um in the 0:19:13.840 --> 0:19:18.520 market that is volatile. That also introduced the two pockets 0:19:18.520 --> 0:19:22.919 of speculation. UH. Investors tend to go with some of 0:19:22.960 --> 0:19:26.800 the names and sectors that they are comfortable with. And 0:19:26.960 --> 0:19:28.800 if you look over the last couple of years, TEX 0:19:28.920 --> 0:19:31.840 has done extremely well, So this is a known that 0:19:32.080 --> 0:19:35.280 for an active investor, you know, is what they go with. 0:19:36.080 --> 0:19:39.320 But in fact, even though I agree that this is 0:19:39.359 --> 0:19:42.200 definitely a stock picker's market, this is not a good 0:19:42.200 --> 0:19:45.320 time to buy the index. We would guide the investors 0:19:45.320 --> 0:19:51.240 towards more defensive sectors financial, healthcare, real estate utilities. We 0:19:51.320 --> 0:19:54.560 would like for them to actually use the dips in 0:19:54.600 --> 0:19:58.040 the market between the bear market rallies to increase the 0:19:58.119 --> 0:20:01.480 quality of the investment portfolio and dig in, dig in 0:20:01.600 --> 0:20:05.119 for the volatility, dig in for the unknown because this word, 0:20:05.200 --> 0:20:07.200 you know, we don't know how long it's going to last, 0:20:07.440 --> 0:20:10.560 and the fact that it is having on global economy 0:20:10.800 --> 0:20:13.280 in terms of oil and gas prices, in terms of 0:20:13.600 --> 0:20:17.720 supply chain interruptions, in terms of quest of transportation, and 0:20:17.760 --> 0:20:20.760 how all of this is going to translate into our 0:20:20.800 --> 0:20:23.320 economy and in QUOTEA beyond the global level, you know, 0:20:23.440 --> 0:20:26.160 it is still unknown, so we have to take advantage 0:20:26.200 --> 0:20:29.479 of the buying opportunities. But instead of just focusing on 0:20:29.520 --> 0:20:33.080 the sectors that have done well in the past, like technology, 0:20:33.400 --> 0:20:35.800 we think that it's a much smarter move to go 0:20:35.960 --> 0:20:39.119 into the sectors that will be positioned well going forward 0:20:39.200 --> 0:20:44.680 and strategically prepare the portfolios for heightened level of volatility. Katarina, 0:20:44.760 --> 0:20:47.360 how concerned are you that perhaps this Federal Reserve does 0:20:47.600 --> 0:20:50.560 not get it right, does not engineer soft landing, and 0:20:50.600 --> 0:20:54.240 in fact, through their rate policy, pushes this economy into 0:20:54.240 --> 0:20:59.520 a recession. Is that in your forecast? Oh? Um, I 0:20:59.600 --> 0:21:03.560 think that said is taking the overall global situation and 0:21:03.600 --> 0:21:08.560 specifically the level of inflation that is historically unprecedented very seriously. 0:21:09.000 --> 0:21:13.960 They are, um, there's no certain terms that they said 0:21:14.240 --> 0:21:18.119 is going to be aggressive in their rate increases, But 0:21:18.200 --> 0:21:22.080 in my opinion, economy is strong enough to accommodate these 0:21:22.280 --> 0:21:25.320 rate increases. So when we're looking overall of the economy, 0:21:25.359 --> 0:21:28.280 we certain they have our share of concerns, but we're 0:21:28.320 --> 0:21:32.879 not seeing the recession in the books for US at 0:21:32.960 --> 0:21:35.720 least for this year. Next year remains to be seen, 0:21:36.040 --> 0:21:38.760 you know, but we are paying close attention to earnings 0:21:38.960 --> 0:21:42.000 of course, you know the valuations and so far valuations 0:21:42.040 --> 0:21:44.560 have been looking you know, better than expected. But we 0:21:44.640 --> 0:21:47.960 think that the negative revisions are going to continue, UM 0:21:48.280 --> 0:21:51.440 and even though we're not pulling for the recession at 0:21:51.480 --> 0:21:54.879 the moment, you know, we expect higher volatility and that 0:21:55.040 --> 0:21:58.119 is the message that you know, we're really conveying to 0:21:58.160 --> 0:22:01.159 our is our clients in you know a number of 0:22:01.160 --> 0:22:04.439 different ways. That's why quality of the investment portfolios is 0:22:04.440 --> 0:22:09.119 more important than ever positive real yield sensitivity all of 0:22:09.200 --> 0:22:11.680 the holdings, you know, is before we were kind of 0:22:11.760 --> 0:22:14.960 looking at the dividend income or just generally income generating 0:22:14.960 --> 0:22:18.359