WEBVTT - SkyBridge's Scaramucci On Why He Launched A Bitcoin Fund 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.400 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Find the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple podcast or wherever you listen to podcasts, 0:00:17.000 --> 0:00:20.640 and on Bloomberg dot com. Taking a look at x 0:00:20.720 --> 0:00:25.000 BT on my Bloomberg terminal, Bitcoin thirty four at ninety dollars, 0:00:25.120 --> 0:00:28.920 up four point seven percent today, up five hundred and 0:00:29.000 --> 0:00:32.920 fifty percent off of its March low, leading some folks 0:00:32.920 --> 0:00:36.159 to speculate whether this is this move is real or 0:00:36.159 --> 0:00:38.520 if it's suspective of BUBBLEO. Next guest has a firm 0:00:38.520 --> 0:00:42.640 opinion on that. Anthony Scarmucci, founder and co managing partner 0:00:42.640 --> 0:00:46.120 of Skybridge Capital, joins this here. Anthony, thanks so much 0:00:46.120 --> 0:00:49.760 for joining us here. You guys at Skybridge launching a 0:00:50.000 --> 0:00:54.640 bitcoin fund. Tell us about that. Well, first of all, 0:00:54.680 --> 0:00:56.800 great to be honest. I I you know, we've done 0:00:56.800 --> 0:01:00.600 a tunnel research on bitcoin. After my disaster or fiasco 0:01:00.640 --> 0:01:02.760 in the White House, I returned back to my own 0:01:03.040 --> 0:01:06.440 firm and it took about three years for us to 0:01:06.480 --> 0:01:10.480 get comfortable frankly with bitcoin. But there are three things 0:01:10.480 --> 0:01:13.920 in place right now that I think are quite meaningful. Regulation, 0:01:14.040 --> 0:01:16.720 as you can see the December twenty three regulation or 0:01:16.800 --> 0:01:20.840 yesterday's decision by the control or currency to allow these 0:01:20.880 --> 0:01:25.039 stable coins to go through the system. UH. Secondarily, the 0:01:25.319 --> 0:01:28.760 architecture is in place now to store the stuff easily 0:01:29.520 --> 0:01:32.800 uh in an unhackable space. As an example, the Skybridge 0:01:32.800 --> 0:01:37.080 Bitcoin fund is using fidelity digital assets, and so that 0:01:37.240 --> 0:01:42.520 is a major upgrade to anything that was existing prior. UH. 0:01:42.560 --> 0:01:44.600 And the third reason, I think this is the most 0:01:44.680 --> 0:01:48.000 compelling reason bitcoin is one. If you take a look 0:01:48.000 --> 0:01:52.720 at crypto assets or digital forms of storage of value, 0:01:53.240 --> 0:01:57.919 Bitcoin at five and fifty billion dollars now has beaten 0:01:57.960 --> 0:02:01.960 the competitors. It was probably hit were attacked sixty hundred 0:02:02.080 --> 0:02:06.640 times uh since its inception twelve years ago. UH. And 0:02:06.680 --> 0:02:09.799 here we are now with an encrypted technology which is 0:02:09.840 --> 0:02:13.000 effectively a ledger. And as you and I both know 0:02:13.080 --> 0:02:15.240 when you study the history of money, that's all money 0:02:15.280 --> 0:02:19.799 really is. It's a ledger. UH. It's defended by tens 0:02:19.800 --> 0:02:22.240 of millions of people that are supporting the system. As 0:02:22.280 --> 0:02:27.600 an example, Skybridge as an active technological node attached to 0:02:27.639 --> 0:02:32.200 the bitcoin ecosphere. Uh and, so for us, we're very confident. 0:02:32.240 --> 0:02:34.760 I'm obviously got a great relationship with Michael Sailor and 0:02:34.960 --> 0:02:38.760 uh Tyler and Camberrall, Cameron Winklevoss, and I worked with 0:02:38.760 --> 0:02:43.920 Mike Novigrads closely at Goldman Sacks years ago, and while 0:02:43.919 --> 0:02:46.119 it took us a long time to make the decision, 0:02:46.800 --> 0:02:49.240 we came in in a very big way for Skybridge. 0:02:49.240 --> 0:02:51.640 We put twenty five million dollars at the firm's capital 0:02:52.000 --> 0:02:55.359 into the Skybridge Bitcoin Fund, and we now have over 0:02:55.520 --> 0:03:00.959 three million dollars a bitcoin across our platform. Uh And 0:03:01.000 --> 0:03:03.799 I would encourage people to go to Skybridge bitcoin dot 0:03:03.880 --> 0:03:07.240 com to see all of the research, the white paper 0:03:07.960 --> 0:03:10.760 and the analysis that we've done as to why we 0:03:10.840 --> 0:03:15.640 see bitcoin becoming a digital form of gold um in 0:03:15.680 --> 0:03:19.640 the ensuing years and why it will be volatile. I 0:03:19.680 --> 0:03:22.600 have no doubt about that, but I think it's ascendency 0:03:22.760 --> 0:03:26.360 is real and I expected to be closing in on 0:03:26.480 --> 0:03:29.160 gold over the next ten to fifteen years, having a 0:03:29.200 --> 0:03:31.959 five five billion dollar market gap gold of course having 0:03:31.960 --> 0:03:35.440 a ten trillion dollar one five billion dollars. So, Anthony, 0:03:35.560 --> 0:03:37.760 who are the people that have come in post the 0:03:38.240 --> 0:03:42.880 Skybridge in influx of funds into the fund, are the 0:03:43.000 --> 0:03:48.720 institutional investors or retail investors. Well, it's certainly open to institutions, 0:03:48.760 --> 0:03:52.360 but I we've Skybridge has made its way predominantly what 0:03:52.440 --> 0:03:54.600 I would call the mass affluent at those would be 0:03:54.640 --> 0:03:58.320 accredited or qualified investors. And just to take you back 0:03:58.360 --> 0:04:01.040 thirty seconds on the history of Skybridge, we democratize the 0:04:01.040 --> 0:04:04.760 hedge fund space by having a fifty dollar minimum on 0:04:04.760 --> 0:04:06.560 our fund of funds, and so you could get access 0:04:06.600 --> 0:04:08.800 to hedge funds that way. We've done the same thing 0:04:08.880 --> 0:04:12.280 here with the bitcoin fund. It's a fifty thollar minimum. 0:04:12.320 --> 0:04:15.560 You've got to be a qualified investor to got to 0:04:15.560 --> 0:04:17.520 buy you a whole if if you're just to put 0:04:17.520 --> 0:04:19.279 that straight into bitcoin, it would buy you a whole 0:04:19.320 --> 0:04:23.080 coin and a bit. That's correct. That's that's correct. It's 0:04:23.080 --> 0:04:26.360 probably buying you about one point eight coins right now. 0:04:26.520 --> 0:04:31.320 They're about But listen, you know, I want this to 0:04:31.360 --> 0:04:34.640 be a buy and hold strategy for investors. The fund 0:04:34.680 --> 0:04:37.400 has a three year i'm sorry, a three month lock up, 0:04:38.040 --> 0:04:40.719 but we're also charging only seventy five basis points, and 0:04:40.720 --> 0:04:42.840 so if you compare it to something like Gray Scale, 0:04:43.320 --> 0:04:46.000 which is charging two and of course if you want 0:04:46.000 --> 0:04:48.240 to come into Gray Scales product, you have to pay 0:04:48.279 --> 0:04:52.560 that premium because it's trading on the pink sheets at 0:04:51.320 --> 0:04:56.760 a premium to where the underlying asset is actually trading, 0:04:56.760 --> 0:04:59.400 and so and so. In the Skybridge situation, we're trying 0:04:59.440 --> 0:05:01.840 to make this a the vest or friendly as possible. 0:05:02.240 --> 0:05:04.760 You can come directly into the fund, you own the 0:05:05.400 --> 0:05:09.520 bitcoin itself, it's stored up at Fidelity, and you have 0:05:09.600 --> 0:05:14.360 all those safety mechanisms associated with our fund management. I 0:05:14.360 --> 0:05:16.120 think I think if we've talked a lot of folks 0:05:16.360 --> 0:05:19.200 on on bitcoin, and I think if I could boil 0:05:19.240 --> 0:05:23.000 it down to the simplest of bull cases, limited supply 0:05:23.440 --> 0:05:28.440 and presumably growing demand, is that the fundamental bull case 0:05:28.640 --> 0:05:32.440 for you guys. Well, I think it's a technology as well. 0:05:32.480 --> 0:05:37.080 So I would say limited supply growing demand because people 0:05:37.200 --> 0:05:41.560 recognize that fiat currency has been damaged by the central 0:05:41.600 --> 0:05:46.120 banking system through their coordination to try to stave off 0:05:46.200 --> 0:05:49.240 these boom and bus cycles. Um and I think you 0:05:49.400 --> 0:05:53.880 just an example increase in the US dollar money supply 0:05:53.920 --> 0:05:56.839 in the last six months. So so it's a combination 0:05:56.920 --> 0:06:02.240 of macro forces, UH, scarcity and the acceptability of that 0:06:02.400 --> 0:06:06.520 digital ledger, uh, the notion that that ledger is impregnable 0:06:07.360 --> 0:06:10.360 through the through the block chain. So if you take 0:06:10.400 --> 0:06:13.240 all those things, you study the history of money, and 0:06:13.320 --> 0:06:15.680 you study the evolution of where we are right now. 0:06:15.800 --> 0:06:20.000 Bitcoined is portable, it's easier to store than gold. Uh 0:06:20.040 --> 0:06:22.799 and the result of which, if you really understand human beings, 0:06:22.800 --> 0:06:25.760 all we have is a ledger between each other. And 0:06:25.800 --> 0:06:29.400 so now this has become an acceptable form of that, 0:06:29.440 --> 0:06:31.240 and the result of which I think it's going to 0:06:31.480 --> 0:06:35.320 uh uh, it's going to replace gold ultimately. For you know, 0:06:35.480 --> 0:06:38.240 for my children, my adult children that are in their 0:06:38.240 --> 0:06:42.039 mid twenties, they see it as a better version of gold. Anthony, 0:06:42.080 --> 0:06:43.640 we're pretty much out of time, but talk to us 0:06:43.680 --> 0:06:47.240 just for a moment about Skybridge and the relationship with China. 0:06:47.760 --> 0:06:49.440 Is there going to be you know, any kind of 0:06:49.480 --> 0:06:52.719 partnership with any Chinese firms in the future or whatever 0:06:52.720 --> 0:06:57.719 happened to post the h n A episode, So you know, 0:06:57.839 --> 0:07:02.039 Siphius block that deal. The the federal government made a 0:07:02.080 --> 0:07:04.720 decision and again it wasn't personal the Skybridge. I think 0:07:04.760 --> 0:07:09.280 it was more uh centric to the Chinese US relationship. 0:07:09.880 --> 0:07:13.440 Result of which we disbanded that deal. We were thinking 0:07:13.480 --> 0:07:16.400 about doing a joint venture, and then because of what's 0:07:16.400 --> 0:07:19.920 going on between the United States and China at this moment, 0:07:19.960 --> 0:07:23.400 it wasn't practical. So there's nothing in the near future. Uh, 0:07:23.400 --> 0:07:26.240 you know, But I'm a long term oriented person. I 0:07:26.280 --> 0:07:28.120 do believe that the United States needs to have a 0:07:28.240 --> 0:07:32.640 very strong bilateral relationship with China, and notwithstanding our differences, 0:07:33.080 --> 0:07:35.160 and so who who Who's to say that we couldn't 0:07:35.160 --> 0:07:39.840 have a Skybridge salt conference in Beijing or Shanghai someday. Well, 0:07:39.880 --> 0:07:42.280 I want to be open minded to that. Speaking of which, 0:07:42.360 --> 0:07:45.480 those salt talks continuing all the time. They're virtual talks 0:07:45.480 --> 0:07:49.240 now and anyone can can get in. And unfortunately we're 0:07:49.240 --> 0:07:51.000 on the area during some of them, so aren't tables 0:07:51.040 --> 0:07:52.760 listen to all of them. But Anthony, thank you very 0:07:52.840 --> 0:07:55.840 much for joining today. Congratulations on the launch of Skybridges 0:07:55.880 --> 0:08:01.560 new Skybridge Bitcoin fund. Anthony Scarlucci, found of Skybridge Capital. 0:08:01.680 --> 0:08:05.160 Bitcoin trading about thirty dollars thirty tho dollars at the moment, 0:08:05.160 --> 0:08:08.160 but JPM working talking about it going to one six 0:08:08.200 --> 0:08:11.200 thousand dollars and that's just in a note today. So 0:08:11.320 --> 0:08:18.400 fascinating conversations around bitcoin. But I know there's one question 0:08:18.600 --> 0:08:21.440 that I deeply, deeply want to know from you, Paul, 0:08:21.560 --> 0:08:24.720 and that is, what did you watch on New Year's 0:08:24.800 --> 0:08:28.240 Day or New Year's Eve? And wasn't Wonder Woman? It 0:08:28.320 --> 0:08:32.240 was not. It was probably sports pretty much across the board. 0:08:32.280 --> 0:08:36.800 But I think people are consuming movies Vannie so much 0:08:36.840 --> 0:08:39.560 differently post pandemic than that we were just you know, 0:08:39.600 --> 0:08:41.600 several months ago. Okay, but I'm just going to push 0:08:41.600 --> 0:08:44.120 a little further. Did you watch or even attempt to 0:08:44.120 --> 0:08:47.720 watch Wonder Woman? Did not? All? Right? Well I did. 0:08:48.440 --> 0:08:51.240 I must say this, This idea that it was on 0:08:51.400 --> 0:08:53.080 HBO Max, meaning that you didn't have to go to 0:08:53.120 --> 0:08:55.080 the theater. It reeled me in, I have to say, 0:08:55.080 --> 0:08:56.680 And I tried to watch. I didn't make it all 0:08:56.720 --> 0:09:00.520 the way through, which is unusual. But nevertheless it did 0:09:00.600 --> 0:09:03.559 make me go back and watch Wonder Woman one. And 0:09:03.840 --> 0:09:06.120 essentially what I'm trying to say is that given that 0:09:06.160 --> 0:09:08.160 it was easier just to sit at home and watch 0:09:08.200 --> 0:09:10.440 it than you know, that meant that I watched at 0:09:10.480 --> 0:09:11.920 home and I didn't go out to the movie theater. 0:09:11.960 --> 0:09:15.520 And the movie theater business has been in shocking state, 0:09:15.880 --> 0:09:18.560 really just suffering the slings and arrows of this outrageous 0:09:18.559 --> 0:09:21.480 pandemic over the last twelve months all around the world, 0:09:21.920 --> 0:09:24.480 and we've seen as many of the talks, and of 0:09:24.480 --> 0:09:27.720 course our next guests had to suffer that too, Pole. Yeah, absolutely, 0:09:27.760 --> 0:09:29.640 I mean, I think that the theater business has been 0:09:29.679 --> 0:09:33.200 just so hit so hard, Vonnie, because two reasons obviously, 0:09:33.679 --> 0:09:37.160 stay at home, the quarantines, and then number two, uh, 0:09:37.200 --> 0:09:41.480 there's just much, much, much less content in the theaters 0:09:41.760 --> 0:09:46.080 as we see the studios really releasing even their A 0:09:46.480 --> 0:09:51.240 list blockbuster content direct to consumers on their streaming services, 0:09:51.240 --> 0:09:55.000 as companies like Disney, the the biggest studio in Hollywood, 0:09:55.440 --> 0:10:01.880 really pivoting the company itself uh to uh streaming, and 0:10:02.000 --> 0:10:04.560 even you know, stunts like Tom Cruise going to the 0:10:04.600 --> 0:10:08.520 movie theater in public filmed cannot bring people back to 0:10:08.559 --> 0:10:10.960 the theater if there's a lockdown happening, which right now 0:10:11.080 --> 0:10:13.200 is the case in London and in Germany and in 0:10:13.240 --> 0:10:15.520 some places in the United States. So let's bring in 0:10:15.559 --> 0:10:18.000 the person who has been really trying to weather this 0:10:18.559 --> 0:10:21.040 for IMAX. He is the CEO of IMAX, and that 0:10:21.080 --> 0:10:23.800 is Richard Gelfond and Richards, thank you very much for 0:10:24.000 --> 0:10:26.600 joining us today. You know it's been it's been a 0:10:26.720 --> 0:10:30.320 tough tough year in your industry. I wonder if you 0:10:30.400 --> 0:10:34.640 see any glimmers of hope for your industry right now. Yeah, 0:10:34.640 --> 0:10:38.280 I do, Bunny, And in fact, we fared better than 0:10:38.320 --> 0:10:41.920 almost anyone because, um, we have two reasons. One we 0:10:41.960 --> 0:10:45.199 have a global footprint rather than North America based, and 0:10:45.840 --> 0:10:50.040 two because we do blockbuster movies, both of which have 0:10:50.320 --> 0:10:53.800 managed to do okay during this So first the global part, 0:10:53.880 --> 0:10:58.199 we're in eighty two countries and particularly in Asia where 0:10:58.240 --> 0:11:02.160 the theaters have been open for months, generally since September, UM, 0:11:02.240 --> 0:11:05.400 things have gone quite well. So you look at China, 0:11:05.480 --> 0:11:09.240 for example, just this past weekend for New Year's it 0:11:09.320 --> 0:11:12.000 was the biggest New Year's weekend we ever had. We 0:11:12.080 --> 0:11:15.319 did a film called shock Wave two, and we were 0:11:16.480 --> 0:11:20.400 of the Chinese box office on one of the screens. UM. 0:11:20.480 --> 0:11:23.880 For all of December, UM we were up eight percent, 0:11:24.040 --> 0:11:27.160 which is also quite impressive. And in the third quarter, 0:11:27.640 --> 0:11:30.440 UM we were flat till last year, and all that 0:11:30.840 --> 0:11:34.040 is without Hollywood films. So I'd say it's beyond a 0:11:34.080 --> 0:11:37.720 glimmer of hope. I think when people feel safe and 0:11:37.880 --> 0:11:40.480 the films are available, they're going to go back to 0:11:40.559 --> 0:11:43.360 the movies. To us, it's not much of a question 0:11:43.360 --> 0:11:46.000 because we've you know, our our vision as well beyond 0:11:46.000 --> 0:11:49.640 the shores of North America. So Richard, give us a sense, 0:11:49.840 --> 0:11:55.040 um in your discussions with the Hollywood studios, Um, to 0:11:55.120 --> 0:11:57.840 what extent do you think they will revert to the 0:11:58.080 --> 0:12:02.400 typical windowing if you will, and put most of their 0:12:02.920 --> 0:12:06.800 you know, A list films with a theatrical window as 0:12:06.840 --> 0:12:09.560 opposed to going uh direct to their streaming services. How 0:12:09.559 --> 0:12:10.680 do you think this is going to play out on 0:12:10.720 --> 0:12:13.640 the other side, Yeah, I think the way you frame 0:12:13.720 --> 0:12:17.160 the question, Paul, when you said A list movies, I 0:12:17.200 --> 0:12:21.120 think virtually all of the A list movies will will 0:12:21.120 --> 0:12:24.360 still be released theatrically. I think maybe some of the 0:12:24.640 --> 0:12:28.640 smaller movies won't be, but the economics are just gonna 0:12:28.679 --> 0:12:31.680 be overwhelming um to do that. I mean, you look 0:12:31.720 --> 0:12:34.800 at what Disney announced that their investor Day, and pretty 0:12:34.880 --> 0:12:39.000 much every blockbuster film, the kinds of films that Imax 0:12:39.080 --> 0:12:42.680 does they announced were staying theatrical. And whether that was 0:12:42.760 --> 0:12:45.600 Black Widow or whether it was the other Marvel movies 0:12:45.800 --> 0:12:48.640 or um, whether it was Jungle Cruise or some of 0:12:48.640 --> 0:12:51.800 the Pixar movies, they moved them. And all the other 0:12:51.920 --> 0:12:56.400 films blockbusters that were scheduled theatrically for this year, including 0:12:56.520 --> 0:13:00.600 um Baverick, the Tom Cruise, Um sequel to Top Gun, 0:13:01.120 --> 0:13:05.760 including Um bond Um, all of those have been moved 0:13:06.080 --> 0:13:09.199 in the year. So I just don't think that's an issue. 0:13:09.240 --> 0:13:12.200 I think there's a pandemic solution, which is to move 0:13:12.600 --> 0:13:14.720 some of them to streaming, and I get that it 0:13:14.800 --> 0:13:18.280 makes sense. And then there's a post pandemic solution. And 0:13:18.320 --> 0:13:22.320 as I said earlier in answered the first question, if 0:13:22.360 --> 0:13:24.640 it's not a pandemic, I think it's going to go 0:13:24.679 --> 0:13:28.599 back to the way it was. You mentioned Richards, it 0:13:28.640 --> 0:13:31.920 calls eighty two countries. Have you had to work with 0:13:32.000 --> 0:13:36.959 the local providers or franchisees or however it works to 0:13:37.160 --> 0:13:41.080 make the theater is more amenable during a pandemic time. 0:13:41.480 --> 0:13:43.679 Have you had to separate seating more. Have you had 0:13:43.679 --> 0:13:47.280 to get rid of you know, the the the merchandise 0:13:47.480 --> 0:13:51.240 areas and the consignment areas and so on. Well, we 0:13:51.440 --> 0:13:54.280 license our technology around the world, so it's up to 0:13:54.360 --> 0:13:58.719 the operator in each country to comply with local regulation. 0:13:59.120 --> 0:14:01.160 But of course we've had to be involved in that, 0:14:01.280 --> 0:14:05.840 and yes, there has been capacity restrictions. So even today 0:14:05.960 --> 0:14:09.520 in Asia, where I indicated we're doing so well, that's 0:14:09.600 --> 0:14:14.520 with se capacity limitations that are still in place. And 0:14:14.559 --> 0:14:17.720 in North America where the theaters have been open, that's 0:14:17.760 --> 0:14:24.200 typically been capacity in some cases maybe, and the whole 0:14:24.520 --> 0:14:29.960 cinema industry has worked on things like requiring mass upgrading 0:14:30.080 --> 0:14:35.080 ventilation systems, separate entrances, in separate exit to make people 0:14:35.080 --> 0:14:37.920 feel more comfortable. Right, Hey, Richard, thanks so much for 0:14:38.080 --> 0:14:42.800 joining us. Really appreciated. Richard Gelfond, CEO of IMAX. Based 0:14:42.800 --> 0:14:45.480 on a long island, you're giving us his update of 0:14:45.560 --> 0:14:49.240 the theater business in a pandemic world. Looking forward to 0:14:49.280 --> 0:14:52.800 the other side. Let's get now to the outlook for 0:14:53.000 --> 0:14:57.720 what might happen beyond George's outcome. Gina Martina's chief equity 0:14:57.720 --> 0:15:01.040 strategist for Bloomberg Intelligence. You know, you obviously came out 0:15:01.080 --> 0:15:03.480 with a look ahead for the whole year right before 0:15:03.560 --> 0:15:06.000 the end of last year. But I'm curious as to 0:15:06.080 --> 0:15:09.320 just in a very short term, how are investors positioned 0:15:09.360 --> 0:15:13.600 for today's Senate runoffs. Yeah, I think in general, as 0:15:13.760 --> 0:15:17.040 investors have ignored the idea that we could still have 0:15:17.160 --> 0:15:20.200 a blue wave impact hang Washington. I think we tried 0:15:20.240 --> 0:15:22.320 to price in a blue wave prior to the election. 0:15:22.400 --> 0:15:25.960 We then priced it out. Um. Now investors are kind 0:15:25.960 --> 0:15:28.880 of grappling with this idea that, oh, maybe we will 0:15:29.000 --> 0:15:30.840 end up having a blue wave, and what does that mean? 0:15:30.880 --> 0:15:33.040 What does it mean in particular for tech stocks and 0:15:33.120 --> 0:15:36.720 multinationals is the really big question because it doesn't necessarily 0:15:36.760 --> 0:15:40.760 need to alter the overall direction of the equity market. 0:15:40.880 --> 0:15:43.600 But if we do have a blue wave wash over Washington, 0:15:44.160 --> 0:15:46.560 we most likely will have a little bit of an 0:15:46.560 --> 0:15:50.680 alteration of sort of sector thematic maybe even style performance 0:15:50.760 --> 0:15:54.440 going forward. Yeah, I mean, if that's the case, you know, 0:15:54.480 --> 0:15:57.520 I mean, is there going to be an obvious change 0:15:57.840 --> 0:16:00.880 in sort of the overall indices beyond tomorrow if if 0:16:00.880 --> 0:16:04.280 the market gets a result it doesn't expect. Well, if 0:16:04.280 --> 0:16:07.240 we do have a blue wave, the biggest, most obvious 0:16:07.360 --> 0:16:11.560 change is that we will likely see fiscal policy paid 0:16:11.600 --> 0:16:14.880 for through corporate text rate increase, and most likely a 0:16:14.920 --> 0:16:18.360 lot of that corporate textr rate increase will fall on 0:16:18.440 --> 0:16:22.360 the shoulders of multinational companies, in particular large cap tech companies. 0:16:22.920 --> 0:16:25.080 So what I would expect to see if we do 0:16:25.280 --> 0:16:28.640 see um both seats go to the Democrats, which, by 0:16:28.640 --> 0:16:30.680 the way, I don't think we'll know tomorrow. I think 0:16:30.680 --> 0:16:33.000 it's going to be an extended period of counting votes 0:16:33.080 --> 0:16:35.520 once again, and we're going to have to sort of 0:16:35.560 --> 0:16:37.680 price this in over a period of time. But if 0:16:37.680 --> 0:16:40.800 it does look like both seats go to the Democratic 0:16:40.840 --> 0:16:44.920 candidates and the Senate shifts to Democratic majority, in that case, 0:16:45.400 --> 0:16:48.000 we most likely will see corporate tax reform, and the 0:16:48.040 --> 0:16:50.640 result of that is going to be probably a loss 0:16:50.640 --> 0:16:54.040 of significant momentum for big cap tex s docs, which 0:16:54.080 --> 0:16:56.920 had a pretty significant comeback in the month of December, 0:16:57.440 --> 0:16:59.880 really erasing a lot of the weakness that had emerged 0:17:00.040 --> 0:17:02.920 rior to the election. Will the market be quite confident 0:17:03.200 --> 0:17:06.760 that if the two seats go Democrat that the Biden 0:17:06.760 --> 0:17:09.960 administration will be able to enact whatever legislation it decides. 0:17:10.400 --> 0:17:13.080 I mean, even if both seats go Democrat, it will 0:17:13.080 --> 0:17:18.239 be a pretty pretty sliver thin the majority. Yeah, And 0:17:18.600 --> 0:17:21.560 as a result of that is most likely we get 0:17:21.600 --> 0:17:24.320 a bigger fiscal spending package than we had priced in. 0:17:24.440 --> 0:17:28.040 Most likely we get some form of corporate tax reform. 0:17:28.280 --> 0:17:31.919 Um most likely you see a move toward alternative energy 0:17:31.920 --> 0:17:36.119 sources of funded at the federal level. It just increases 0:17:36.160 --> 0:17:40.119 the likelihood. It doesn't necessarily mean we price in everything 0:17:40.200 --> 0:17:43.439 on the Biden agenda, UM, but it certainly gives it 0:17:43.520 --> 0:17:47.840 a better possibility of happening or an increased probability of happening, 0:17:47.880 --> 0:17:53.240 which was not in the market consensus as of December, Gina, 0:17:53.480 --> 0:17:56.960 Given that it's going to be a Biden administration, will 0:17:57.080 --> 0:18:00.600 the the the political headlines have you know less of 0:18:00.640 --> 0:18:03.679 an impact on this market than did the Trump presidency, 0:18:03.680 --> 0:18:07.719 would you imagine? I suspect so. I think the big 0:18:07.880 --> 0:18:10.880 shift that we're talking less about, but we probably should 0:18:11.040 --> 0:18:13.600 be talking more about, is what's happened what's likely to 0:18:13.640 --> 0:18:16.520 happen with trade and with the dollar. I think one 0:18:16.560 --> 0:18:18.520 of the things that was sort of under appreciated in 0:18:18.520 --> 0:18:23.920 the environment of volatility that we had was how much 0:18:23.960 --> 0:18:27.760 the dollar strength contributed to asset allocation and equity market 0:18:27.800 --> 0:18:30.639 performance globally, as well as equity market performance even in 0:18:30.680 --> 0:18:37.080 the United States. UM the result of more visible or 0:18:37.359 --> 0:18:41.840 clearer trade policy. Less uncertainty with respect to trade probably 0:18:41.920 --> 0:18:45.480 is one of the key contributors to the dollar's recent turnover. 0:18:46.119 --> 0:18:49.920 As investors are more ristolerant. They see a more visible environment, 0:18:50.280 --> 0:18:53.919 more predictable environment for trade. That's starting to impact asset 0:18:53.960 --> 0:18:58.879 allocation globally, benefiting emerging market stocks over US docks is 0:18:58.880 --> 0:19:03.080 a good example, UM that dollar weakness has also emerged, 0:19:03.280 --> 0:19:08.280 improving risk taking globally. The dollar strengthens obviously an environment 0:19:08.359 --> 0:19:10.920 of fear and environment of risk taking, the dollar gets 0:19:10.920 --> 0:19:13.760 the flight to quality benefit that tends to benefit large 0:19:13.760 --> 0:19:15.880 cap stocks in the US over small caps. We're seeing 0:19:15.880 --> 0:19:18.800 a reversal of that trade as well. So I do 0:19:18.880 --> 0:19:21.679 think that there are quite a bit of opportunity. It's 0:19:21.720 --> 0:19:23.399 quite a bit of an opportunity for the dollar to 0:19:23.440 --> 0:19:27.480 continue to drop as we see some of that risk 0:19:27.600 --> 0:19:30.080 intolerance that emerged in the last two years of the 0:19:30.080 --> 0:19:33.439 Trump administration get reversed and Gina, we're pretty much out 0:19:33.440 --> 0:19:35.840 of time. But Janet Yellen as Treasury secretary, is that 0:19:35.880 --> 0:19:38.600 going to make a material difference to these markets? I 0:19:39.000 --> 0:19:41.439 think it did. You know, we obviously saw once the 0:19:41.440 --> 0:19:44.560 announcement came in UM several weeks back, we saw the 0:19:44.600 --> 0:19:47.600 markets put in a bit of a relief rally. You know, 0:19:47.680 --> 0:19:49.600 she's a steady hand. It was very clear that she 0:19:49.680 --> 0:19:51.240 was a steady hand at the Fed. We have another 0:19:51.240 --> 0:19:55.200 steady hand assured now at the Treasury. As a result, 0:19:55.720 --> 0:19:58.919 we'll see what the policy shift looks like as a 0:19:58.960 --> 0:20:01.840 result of a yellow treasury um. I don't know that 0:20:01.840 --> 0:20:04.280 that's terribly predictable. Are we going to see a massive 0:20:04.320 --> 0:20:07.240 policy shift or not? But I do think the markets 0:20:07.600 --> 0:20:11.000 are seized by the certainty of having that steady hand 0:20:11.040 --> 0:20:13.439 at the helm. Alright, Gina, thank you and halping you 0:20:13.600 --> 0:20:16.040 r Gina mart Now, I'm chief equity strategist for Bloomberg 0:20:16.080 --> 0:20:21.200 Intelligence w G. I growed so just below fifty dollars 0:20:21.240 --> 0:20:23.560 a barrel bots in the last couple of hours we 0:20:23.600 --> 0:20:25.960 did have at top fifty dollars a barrel for the 0:20:26.000 --> 0:20:28.480 first time in months and months and months, And now, 0:20:28.520 --> 0:20:31.840 according to a delegate, we have an opaque plus deal 0:20:31.920 --> 0:20:34.080 on February output at least no better time to bring 0:20:34.080 --> 0:20:36.720 in Stephen Short, President of the Short Group and editor 0:20:36.800 --> 0:20:39.040 of the Short Groupport. Stephen, you have been following the 0:20:39.040 --> 0:20:41.439 headlines all morning, but we have officially now from a 0:20:41.440 --> 0:20:45.320 delegate the word that Saudi Arabia will voluntarily cut output, 0:20:45.520 --> 0:20:48.680 Russia and Kazakhstan will increase output at least for the 0:20:48.760 --> 0:20:52.920 month of February. Was this always a done deal? Well, 0:20:52.960 --> 0:20:58.040 I think certainly. The prospects of a production increase we're 0:20:58.119 --> 0:21:01.560 certainly limited. So the fact that the Saudis are kicking 0:21:01.560 --> 0:21:04.600 in so we'll have a net zero sum for February 0:21:04.720 --> 0:21:08.560 does I think fall within expectations. The market has been 0:21:08.840 --> 0:21:11.920 moving up on these moves over the past well, in 0:21:12.000 --> 0:21:15.240 the past half of December. We did sell off smartly 0:21:15.400 --> 0:21:17.520 yesterday when it looked like we were going to get 0:21:17.520 --> 0:21:21.040 a production increase. That has gone by the wayside now 0:21:21.080 --> 0:21:23.840 and the markets correct and higher. To your point, w 0:21:24.040 --> 0:21:26.920 t I now is touched fifty dollars a barrel. Let's 0:21:27.000 --> 0:21:29.960 keep in mind there's nothing magical about fifty dollars a 0:21:30.080 --> 0:21:32.080 barrel other than the fact that it's got a five 0:21:32.520 --> 0:21:36.200 in its handle. It's just a psychological number. That said, 0:21:36.600 --> 0:21:40.439 we're still at levels that we are well below a 0:21:40.560 --> 0:21:44.080 year ago at this point. So effectively, we've had a 0:21:44.160 --> 0:21:47.720 nice rally of rebound in the fourth quarter, but we're 0:21:47.720 --> 0:21:49.960 no better off today than where we are at the 0:21:50.160 --> 0:21:52.920 back of the start of this well the start of 0:21:53.000 --> 0:21:56.080 last year, I should say. Another headline crossing the Bloomberg 0:21:56.119 --> 0:21:59.920 terminal UH. As it relates to energy, the farm sout 0:22:00.000 --> 0:22:04.160 a foreign minister says Arab states to fully restore UH 0:22:04.280 --> 0:22:07.160 cutter ties. So some more news out of the Mid East. 0:22:07.200 --> 0:22:09.320 We'll have more on that coming up, uh, Stephen. It 0:22:09.400 --> 0:22:13.000 kind of brings us back to the demand picture. We're seeing, 0:22:13.480 --> 0:22:18.040 uh the UK enter into another lockdown here. What's the 0:22:18.119 --> 0:22:21.040 view of the the energy marketplace, the oil marketplace on 0:22:21.400 --> 0:22:24.240 kind of the demand picture over the next call it 0:22:24.320 --> 0:22:28.320 six or twelve months. Yeah, absolutely, We're we've now entered 0:22:28.760 --> 0:22:32.760 a new era of oil demand, the elasticities demand or 0:22:32.800 --> 0:22:36.000 in the process of changing forever. That of course is 0:22:36.040 --> 0:22:39.840 related to the introduction of substitute into the market electric vehicles. 0:22:40.119 --> 0:22:43.560 We also have the introduction of a variable that was 0:22:43.640 --> 0:22:46.119 on no one's radar a year ago, and that is 0:22:46.160 --> 0:22:49.720 the change in dynamics in commuters. We're still a good 0:22:49.720 --> 0:22:52.280 portion of us are still working from our homes. When 0:22:52.440 --> 0:22:55.399 we do get back to some sort of semblance of normalcy, 0:22:56.040 --> 0:22:59.240 many computer commuters are are not going back. They're going 0:22:59.280 --> 0:23:02.479