WEBVTT - Economic Forecasts And Fed Chair Uncertainty 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 --> 0:00:22.160 at Bloomberg dot com slash podcast. You know, we've got 0:00:22.200 --> 0:00:24.680 some red and green on the screen here. We've got 0:00:24.680 --> 0:00:27.040 through some pretty strong earnings. We've got some more retailers 0:00:27.080 --> 0:00:30.240 to hear from, but it looks like the retailers are 0:00:30.240 --> 0:00:32.160 generally in pretty good shape, the consumers in good shape. 0:00:32.200 --> 0:00:35.680 Let's get a check in with a professional on all 0:00:35.680 --> 0:00:37.760 of this stuff. Jordan's con He's the c i O 0:00:38.400 --> 0:00:40.440 of the a c M Funds and portfolio manager of 0:00:40.440 --> 0:00:43.400 the a c UM Dynamic Dividend Fund. And Jordan's Matt 0:00:43.400 --> 0:00:44.839 and I were just talking about, you know, we were 0:00:44.840 --> 0:00:47.800 looking at Visa in the news with Amazon in the 0:00:47.880 --> 0:00:51.320 UK and visas down five point four percent on this 0:00:51.440 --> 0:00:54.279 news that Amazon will stop accepting the Visa card and 0:00:54.360 --> 0:00:57.880 I guess, uh, in the UK in January, what did 0:00:57.880 --> 0:01:00.840 you now for now? And I mean master Card is 0:01:00.880 --> 0:01:02.880 down as well, and you know it could this could spread. 0:01:02.880 --> 0:01:06.640 The idea is that Amazon and other retailers could do 0:01:06.640 --> 0:01:08.560 this to all the payment payment networks. How do you 0:01:08.560 --> 0:01:11.880 think about that, Jordan's Yeah. I mean, you know, Visa 0:01:12.000 --> 0:01:14.000 is a stock that we've owned for years. It's a 0:01:14.319 --> 0:01:17.400 great company, great management. I think that to your point, 0:01:17.640 --> 0:01:20.360 that's the market's big concern, you know, with the early 0:01:20.400 --> 0:01:22.800 reaction in Visa and the stock being down as much 0:01:22.840 --> 0:01:25.200 as we're seeing today. I think the concern is does 0:01:25.240 --> 0:01:28.160 this open some sort of Pandora's box? And if Amazon 0:01:29.200 --> 0:01:32.440 is challenging them first in the UK, you know, does 0:01:32.520 --> 0:01:35.480 it kind of seep into other other markets and are 0:01:35.520 --> 0:01:37.600 there going to be other large retailers that try to 0:01:37.880 --> 0:01:40.480 puff up their chest and and and challenge them as well. 0:01:40.920 --> 0:01:44.480 But like I said, you know, Visa has excellent management. 0:01:44.480 --> 0:01:46.640 It's been a well managed company for years and years 0:01:46.640 --> 0:01:48.960 and years, and so I think, you know, at the 0:01:49.040 --> 0:01:51.240 end of the day, when the dust sellers, management will 0:01:51.240 --> 0:01:54.160 probably figure out a way to come to terms with 0:01:54.160 --> 0:01:57.120 with with Amazon. And if there are other realtailers, um, 0:01:57.520 --> 0:01:59.040 you know, and we'll see this story probably fall by 0:01:59.040 --> 0:02:00.960 the way. Well, you can still use the debit card 0:02:01.320 --> 0:02:05.840 and um, I mean, I'm sure that all of these companies, 0:02:06.120 --> 0:02:09.600 surely Visas at the forefront of looking at some kind 0:02:09.639 --> 0:02:15.920 of crypto blockchain way to make payments fast, easy and cheap. Yeah, 0:02:16.120 --> 0:02:19.160 they've always done a good job on their acquisitions and 0:02:19.240 --> 0:02:21.760 so whether it's you know, to your point something in crypto, 0:02:21.840 --> 0:02:24.480 whether they're gonna do something with a buy now, pay later, 0:02:24.520 --> 0:02:28.080 which is you know, a big, big trend recently. Um, 0:02:28.120 --> 0:02:30.280 you know, m that's just a credit card, right, I 0:02:30.360 --> 0:02:32.160 see these buy now, pay later things, And I mean 0:02:32.200 --> 0:02:36.000 that's just the same thing, isn't it. It basically is 0:02:36.000 --> 0:02:38.120 it's it's the new iteration of it, you know, somehow 0:02:38.120 --> 0:02:40.120 they figure out other ways to make money rather than 0:02:40.160 --> 0:02:44.280 just charging the interest on it. Alright, So Jordan's as 0:02:44.320 --> 0:02:47.200 a Visa shareholder, how do you think about that big 0:02:47.960 --> 0:02:51.960 just changing financial landscape, whether it's just more technology coming 0:02:51.960 --> 0:02:54.680 into the business. I know, since the pandemic, I'm doing 0:02:54.720 --> 0:02:57.680 a lot more my personal finance via apps and so 0:02:57.720 --> 0:02:59.960 on and so forth. How did the Visas the master card? 0:03:00.600 --> 0:03:04.440 How do you think about that holistically? How do they adapt? Well, 0:03:04.440 --> 0:03:06.000 I think there's two things. You know that the one 0:03:06.040 --> 0:03:07.760 thing is to your point that that if things are 0:03:07.760 --> 0:03:10.560 going you know, crypto and digitally and stuff like that, 0:03:10.560 --> 0:03:12.919 that's a new trend that they may you know, dip 0:03:12.960 --> 0:03:15.040 their toe in the water, whether it's via acquisitions or 0:03:15.080 --> 0:03:17.640 something like that. But the other big trend that's going 0:03:17.680 --> 0:03:20.080 on globally that Visa has been in the forefront of 0:03:20.400 --> 0:03:23.600 for years is the trend just away from cash and 0:03:23.680 --> 0:03:26.160 more towards digital. Right as more and more of our 0:03:26.200 --> 0:03:29.040 lives moved to digital and become online. You know, last 0:03:29.120 --> 0:03:32.080 year with the pandemic, we obviously saw a huge surge 0:03:32.120 --> 0:03:35.920 of transactions moving online. And so those big global trends 0:03:35.960 --> 0:03:39.160 are still a kail wind for companies like Visa master Card. 0:03:39.520 --> 0:03:42.480 I got this Apple watch for my birthday, and I'm 0:03:42.480 --> 0:03:44.320 not even sure it tells time, folks. I'm looking at 0:03:44.360 --> 0:03:46.680 it now and it tells me not just time, but 0:03:46.800 --> 0:03:50.960 my heart rate, blood oxygen levels. It doesn't echo cardio Graham, etcetera. 0:03:51.240 --> 0:03:53.840 I've been averaging even sitting down for too long exactly. 0:03:53.840 --> 0:03:55.680 It tells me to stand up. I've been doing like 0:03:55.720 --> 0:03:58.080 ten fifteen thousand steps to day. But the thing is 0:03:58.480 --> 0:04:00.920 the most fun thing to do with this is to 0:04:01.000 --> 0:04:03.920 make payments like I'm taking the subway more often because 0:04:03.920 --> 0:04:06.720 I just tapped my wrist on the thing and I 0:04:06.760 --> 0:04:09.040 go in, Or when I go to tar j and 0:04:09.080 --> 0:04:12.040 I pick up a twelve pack of pops, I just 0:04:12.320 --> 0:04:15.960 knock this on the payment thing and I feel like 0:04:16.000 --> 0:04:18.160 the kids, I feel like you gotta check it out. 0:04:18.200 --> 0:04:20.880 Do you like any of these fintech I mean, we 0:04:20.960 --> 0:04:24.240 talked about Visa being good at acquisitions, Jordan, what do 0:04:24.279 --> 0:04:28.200 you think about these? Um, not Apple obviously, because that's 0:04:28.279 --> 0:04:31.080 uh to an app trillion dollar behemoth that we all 0:04:31.120 --> 0:04:32.920 know about. But do you look at any of these 0:04:33.400 --> 0:04:36.719 younger growth your businesses. Yeah, for sure. You know, Visa 0:04:36.800 --> 0:04:39.040 is obviously one that I've mentioned that we've owned for years. 0:04:39.160 --> 0:04:42.040 You know. We we like PayPal. That's the stock that's 0:04:42.080 --> 0:04:45.240 come down a lot that you know, is at the 0:04:45.240 --> 0:04:46.760 forefront a lot of these trends, and I think that 0:04:46.800 --> 0:04:50.320 we will continue to do well. Um, you know, we've 0:04:50.360 --> 0:04:52.679 dipped our toe and something like a firm it's obviously 0:04:52.760 --> 0:04:54.480 had a really really big run, and I wouldn't I 0:04:54.480 --> 0:04:56.800 probably wouldn't chase it here. But but you know, to 0:04:56.880 --> 0:04:58.839 the point we were talking about the buy now, pay later, 0:04:58.920 --> 0:05:02.040 they've kind of been the poster child for moving um 0:05:02.240 --> 0:05:05.320 first mover advantage on that front. So yeah, there's a 0:05:05.320 --> 0:05:08.679 lot of interesting stuff out there, UM and we definitely, 0:05:08.680 --> 0:05:10.160 we definitely look at them all. Those are just a 0:05:10.160 --> 0:05:14.000 few that UM we like. Hey, Jordan's Goldman Sachs CEO 0:05:14.120 --> 0:05:18.040 David Solomon said this morning at a Bloomberg conference in 0:05:18.080 --> 0:05:23.400 Singapore that market greed is now outpacing fear. Do you 0:05:23.440 --> 0:05:27.680 see that, feel that sense that in the market. That's funny. 0:05:27.760 --> 0:05:31.840 You know, we've definitely sense it in pockets, But I 0:05:31.920 --> 0:05:35.200 don't think you know, people compare this back to the 0:05:35.240 --> 0:05:37.599 late nineties and stuff, and I don't think it's as 0:05:37.640 --> 0:05:40.720 pervasive as it wanted as it was back then. You know, 0:05:40.760 --> 0:05:42.719 there's certain pockets of stocks and you come in and 0:05:42.720 --> 0:05:46.120 you see these things running ten and and there's definitely 0:05:46.120 --> 0:05:49.600 an element of speculation there that you know, it's kind 0:05:49.640 --> 0:05:53.920 of running amuck that isn't sustainable. But there's also tons 0:05:53.920 --> 0:05:56.080 and tons of cash that's still on the sidelines. You know, 0:05:56.080 --> 0:05:58.400 in the late nineties, you talk to anybody and they 0:05:58.400 --> 0:06:00.880 would say, if you had three thousand dollars sitting in 0:06:00.880 --> 0:06:02.880 your checking account, you were an idiot, because it could 0:06:02.920 --> 0:06:05.160 be in the market. You know, that kind of sentiment 0:06:05.520 --> 0:06:08.080 hasn't worked its way into the market today. Um. So 0:06:08.200 --> 0:06:09.800 for the people that are in the market playing, they're 0:06:09.839 --> 0:06:13.039 definitely some elevent of speculation. But for the general public, 0:06:13.279 --> 0:06:16.160 I don't think it's one of those bubble like environment 0:06:16.240 --> 0:06:18.039 where everybody's like, I need to be all in with 0:06:18.080 --> 0:06:20.840 every penny I have. All right, Jordan, thank you so much. 0:06:20.960 --> 0:06:23.080 We appreciate that. As always during color we didn't get 0:06:23.120 --> 0:06:25.039 to talk about we didn't get talking about weed. We 0:06:25.080 --> 0:06:27.120 didn't get to talk about weed. And he went to 0:06:27.200 --> 0:06:31.640 University of Colorado Boulder, which is exactly why I'm glad. 0:06:31.680 --> 0:06:33.279 I'm glad you realized why I wanted and I just 0:06:33.279 --> 0:06:35.320 wrote my last a tuition check to the University of 0:06:35.360 --> 0:06:41.040 Colorado a Boulder. One of the things we're waiting here 0:06:41.040 --> 0:06:44.640 from FED Chairman pal Is or from President Biden is 0:06:45.080 --> 0:06:47.840 will he keep FED Chairman jpal On as a head 0:06:47.880 --> 0:06:49.680 of the FED or maybe bring in somebody new. I 0:06:49.680 --> 0:06:53.800 know he's interviewed um Brainerd as well, and I know 0:06:53.920 --> 0:06:56.800 the markets focusing on I'm just not sure how much 0:06:56.800 --> 0:06:59.680 of a big deal it is for this market. Well, 0:06:59.680 --> 0:07:02.599 everyone we talked to says they have in terms of 0:07:02.640 --> 0:07:06.200 monetary policy, there's not much of a difference. It's the 0:07:06.279 --> 0:07:11.120 regulatory aspect of that that makes UM Senator Warren so 0:07:11.240 --> 0:07:15.480 angry at Jerome Powell. Yeah, and consistency, the market certainly 0:07:15.520 --> 0:07:18.760 links consistency. But let's ask a professional, Phil Palumbo, founder 0:07:18.800 --> 0:07:21.840 CEO and c I O of Palumbo Wealth Management. He's 0:07:21.880 --> 0:07:25.480 been doing this wealth management thing for decades at ubs 0:07:25.560 --> 0:07:29.400 and Morgan Stanley and mother Meryl. Uh. Phil, You've seen 0:07:29.440 --> 0:07:34.520 FED chairman chair people come and go. How concerned are 0:07:34.520 --> 0:07:36.760 you about You know what we might hear from President 0:07:36.760 --> 0:07:39.040 by in the next next few days about FED Chairman 0:07:39.040 --> 0:07:43.280 Powell or someone new. The concern more is about inflation. 0:07:43.360 --> 0:07:46.000 So whether in my view with Powell stays in there 0:07:46.120 --> 0:07:48.760 or brainerd comes in there and the open seats that 0:07:48.760 --> 0:07:53.800 have become available over the next couple of months, either way, 0:07:53.840 --> 0:07:57.680 I believe both are dovish and a dovish FED governor 0:07:57.720 --> 0:07:59.920 as we have right now with with Powell. Even if 0:08:00.000 --> 0:08:03.240 and it comes in, it means inflation can can continue 0:08:03.240 --> 0:08:06.760 to run hot because most likely they're gonna tame rates low. 0:08:06.880 --> 0:08:08.880 And if that's the case again, you know just inflation 0:08:08.920 --> 0:08:10.760 is going to start to continue to feed on themselves. 0:08:10.840 --> 0:08:13.760 So I think either way, whether it's BRAINERD or whether 0:08:13.800 --> 0:08:17.080 it's power or progressive, tend to fill up those seats. 0:08:17.360 --> 0:08:19.720 You'll see more bank regulation, and I think you see 0:08:19.800 --> 0:08:22.320 rates lower for longer. I mean, what can they really 0:08:22.360 --> 0:08:25.560 do about inflation anyway, other than you know, if they 0:08:25.640 --> 0:08:28.640 raise raids, they kind of stunt the economy, and that's 0:08:28.640 --> 0:08:32.680 not what you want, right. I disagree with that. Right. So, 0:08:33.000 --> 0:08:36.480 in terms of FED power and many headphones out there, 0:08:36.480 --> 0:08:38.800 headphone manages out there, you know they have to act 0:08:38.800 --> 0:08:40.720 sooner than later, right, So it's like a ballberell approach. 0:08:40.720 --> 0:08:42.520 If you don't do it now, you get hurt later. 0:08:42.559 --> 0:08:43.880 If you do it now, you get hurt today. But 0:08:43.880 --> 0:08:45.559 it's almost like if you let this thing continue to 0:08:45.679 --> 0:08:48.680 run as we're seeing right now, it just feeds on itself. 0:08:48.679 --> 0:08:50.679 We've seen that in the seventies. I'm not suggesting we're 0:08:50.679 --> 0:08:53.880 going into the seventies, but inflation can really feed on itself. 0:08:53.880 --> 0:08:56.880 Look at retail sales numbers yesterday, write some consumers are 0:08:56.880 --> 0:09:00.240 starting to get concerned about inflation and cost So it's 0:09:00.240 --> 0:09:03.480 this pull forward demand that we're seeing that's raising prices 0:09:03.679 --> 0:09:05.320 and it doesn't look like it's going away. So if 0:09:05.360 --> 0:09:07.320 you keep rates where they are, if you keep continue 0:09:07.320 --> 0:09:11.200 to be a Dover's fed governor, it only exacerbates the problem. 0:09:11.200 --> 0:09:14.360 It doesn't make the problem better, because eventually inflation gets 0:09:14.400 --> 0:09:17.040 to the point where it'll cool the consumer because it's 0:09:17.040 --> 0:09:20.880 a direct tax on the consumer. We know that of 0:09:21.040 --> 0:09:24.040 spending comes from the consumers in terms of g d P. 0:09:24.520 --> 0:09:26.240 So if you start to tax them in terms of 0:09:26.280 --> 0:09:29.960 gas prices shout the cost food prices, that's not good 0:09:29.960 --> 0:09:32.600 for the economy. So it's a your damn if you do, 0:09:32.600 --> 0:09:34.560 and your damn they've done. And I totally get it, 0:09:34.800 --> 0:09:36.839 but I think they that they have to start taking 0:09:36.840 --> 0:09:39.800 the Hawkers stance. And if Brainer gets in there and 0:09:39.880 --> 0:09:43.280 Progressive fill those seats, it's just a continuation of this 0:09:43.360 --> 0:09:46.280 Doverish stance, which I believe can hurt the economy along 0:09:46.280 --> 0:09:48.160 the term. But Powell is going to be just as 0:09:48.200 --> 0:09:51.480 Dovish right, So it's not like um sticking with him 0:09:51.720 --> 0:09:55.640 is going to do much um to to to suthe 0:09:55.640 --> 0:09:59.720 your fears on inflation. What what would uh what would 0:09:59.760 --> 0:10:02.640 you like to see? I would like to see them 0:10:02.880 --> 0:10:06.319 start to paper even sooner than June number one and 0:10:06.400 --> 0:10:10.720 number two, raise rates, surprise the market, right, raise rates 0:10:10.880 --> 0:10:13.559 in in uh at least surprise market doesn't seem like 0:10:13.640 --> 0:10:17.800 something the Fed does anymore. That time, it's I think, 0:10:17.880 --> 0:10:19.560 you know, what we've heard from a lot of folks 0:10:20.000 --> 0:10:22.840 when me think about you know, rates and maybe just 0:10:22.880 --> 0:10:25.280 this market in general, is what you don't want to see, 0:10:26.080 --> 0:10:29.360 is the Fed surprise the market. That could be something 0:10:29.400 --> 0:10:33.199 given where we are evaluations, that could really be problematic 0:10:33.240 --> 0:10:36.560 for the market. But but you're not as concerned about that. No, 0:10:36.640 --> 0:10:38.280 I am, of course, right, I mean, and I get it, 0:10:38.280 --> 0:10:40.520 And I've been continuous, continuously saying that I believe we're 0:10:40.520 --> 0:10:44.079 in a bubble, especially in technology, especially with the cryptocurrency 0:10:44.120 --> 0:10:46.760 and n f t s and all the speculation. That's 0:10:46.800 --> 0:10:49.720 because there's been a misallocation of capital as a result 0:10:49.800 --> 0:10:52.319 of the Federal Reserve and what the federal fiscal policy 0:10:52.320 --> 0:10:55.520 has done. So now valuations got too extreme levels. And 0:10:55.559 --> 0:10:57.160 I get it. It's listen to the damn if you 0:10:57.200 --> 0:10:59.320 do damn if you don't scenario. But if you don't 0:10:59.320 --> 0:11:01.600 do it now, it's gonna be even worse later. And 0:11:01.640 --> 0:11:03.439 that's the big problem that I'm concerned about. The other 0:11:03.480 --> 0:11:05.839 part two is when you think about people talking about 0:11:05.840 --> 0:11:08.319 inflation being transitory and nod in that whole argument, it's 0:11:08.320 --> 0:11:11.800 more about is demand transitory? Right? I think demand maybe 0:11:11.800 --> 0:11:14.120 trans story because it's pulled forward effect. And when you 0:11:14.160 --> 0:11:17.000 have a pull forward effect and you have supplies to 0:11:17.080 --> 0:11:19.920 start trying to keep up, then you have companies creating 0:11:19.960 --> 0:11:23.040 more capacity to try to keep up with demand. But 0:11:23.120 --> 0:11:25.439 if all of a sudden demands slows down, you have 0:11:25.480 --> 0:11:29.000 all these companies with this extra capacity extra hiring extra employees, 0:11:29.360 --> 0:11:31.520 and that's like a classic recession like we saw in 0:11:31.559 --> 0:11:35.280 the seventies. That could happen. So listen. It's a very 0:11:35.360 --> 0:11:37.880 challenging situation. I think federal power fed Paler did a 0:11:37.880 --> 0:11:39.880 great job with COVID stepping in doing you had to 0:11:39.880 --> 0:11:42.920 do when I get it, Um, But now I believe 0:11:43.080 --> 0:11:45.880 it's time to move faster than he's saying. What do 0:11:45.920 --> 0:11:48.960 you deal with you with client money? Then? Um, Paul, 0:11:49.000 --> 0:11:52.120 If I Phil, if I came to you with some 0:11:52.400 --> 0:11:58.599 fresh cash, where do you put it? Gold? Golden commodities. 0:11:58.640 --> 0:12:00.920 So I've been consistently saying, you know, when you have 0:12:00.960 --> 0:12:03.600 inflation acceleration like we're seeing. So if you go back 0:12:03.640 --> 0:12:07.520 since nineteen. Any time inflation has accelerated, gold and commodities 0:12:07.559 --> 0:12:10.439 have been an outperformer. Gold this year has not been 0:12:10.440 --> 0:12:13.679 an outperformer because rates have gone up, but since inflation 0:12:13.720 --> 0:12:16.839 and CPI numbers of recent i've been north to five 0:12:16.960 --> 0:12:20.079 six percent. The real return now for bonds are negatives. 0:12:20.080 --> 0:12:22.040 And that's why you're seeing gold stought to to break 0:12:22.040 --> 0:12:24.720 out here from a technical standpoint. So I think gold 0:12:24.760 --> 0:12:27.520 could have legs and and commodities will can still have 0:12:27.640 --> 0:12:29.600 and could still have legs. So that's why I would 0:12:29.640 --> 0:12:32.480 position and rebalance into all right. When I hear that, Phil, 0:12:32.760 --> 0:12:35.000 I have to ask a question, given where we are today, 0:12:35.280 --> 0:12:38.680 when I hear commodities and or gold, how about crypto? 0:12:39.040 --> 0:12:41.440 Um is? How do you think about that in the 0:12:41.480 --> 0:12:43.520 context of some people say it's a store of value 0:12:43.559 --> 0:12:48.080 like gold, Crypto doesn't even know who they are, you know, 0:12:48.120 --> 0:12:50.200 in terms of is it an as a class? Is 0:12:50.240 --> 0:12:53.760 it a currency? And is it inflation? Areas it deefinitly 0:12:54.440 --> 0:12:56.600 in terms of investing, when to invest it's so new, 0:12:56.640 --> 0:12:59.520 it's it's complete, complete speculation. So I just don't think 0:12:59.520 --> 0:13:02.679 anybody can really answer that with complete confidence. You know, 0:13:02.720 --> 0:13:06.600 in my view, I'm concerned about that because what I 0:13:06.600 --> 0:13:08.400 tell a lot of people who invest in crypto and 0:13:08.520 --> 0:13:10.160 n f T s and they made a lot of money, 0:13:10.160 --> 0:13:12.680 and that's great, and I'm very happy for them. But 0:13:12.720 --> 0:13:15.400 the question I have for them is at what point 0:13:15.400 --> 0:13:18.000 are you going to sell all these profits you made? 0:13:19.160 --> 0:13:21.440 And they don't have an answer for that, and they say, 0:13:21.480 --> 0:13:22.920 like I was just talking to somebody this morning, said, oh, 0:13:22.920 --> 0:13:24.679 I bought something, it's at ten dollars and I was 0:13:24.679 --> 0:13:26.320 going to sell it at ten, but I think it 0:13:26.320 --> 0:13:28.880 goes to twenty. And it's just like this continuous cycle 0:13:29.000 --> 0:13:31.959 that people jump on and in the but in the end, 0:13:32.040 --> 0:13:36.280 it's going to eventually collapse, just like markets collapse, right, 0:13:36.320 --> 0:13:38.640 they don't just go straight up. But so if you 0:13:38.720 --> 0:13:41.200 never sell any collapses, you made no money. So but 0:13:41.280 --> 0:13:43.880 you think it's all about the greater greater fool theory. 0:13:43.880 --> 0:13:46.400 You don't think that there's any value there. I'm not 0:13:46.400 --> 0:13:48.560 saying there's no value there, right, I'm saying that there. 0:13:48.600 --> 0:13:50.960 I think it's for real because it's three trillion plus market. 0:13:51.400 --> 0:13:52.800 I don't know if it's going to be a bigcoin 0:13:52.840 --> 0:13:55.280 in the future or theory M or some other cryptocurrency. 0:13:55.360 --> 0:13:57.840 It's complete speculation. So I think it's for real. But 0:13:57.880 --> 0:14:00.280 I think it's time for investors to wake up and say, hey, 0:14:00.440 --> 0:14:03.240 you know everybody's hopping on this bandwagon. You don't want 0:14:03.240 --> 0:14:05.240 to follow the herd. Let's take some profits here and 0:14:05.240 --> 0:14:07.000 if it comes back down again, we could add to 0:14:07.040 --> 0:14:09.760 the position. Right. The same thing with technology. I mean, 0:14:09.800 --> 0:14:12.880 nobody can dispute that we're in a bubble in terms 0:14:12.880 --> 0:14:15.720 of valuations, but it's time to take some risk off 0:14:15.760 --> 0:14:18.000 the table, and there's nothing wrong in doing that. Phil, 0:14:18.000 --> 0:14:20.520 thanks so much for joining us. Always appreciate getting your thoughts. 0:14:20.800 --> 0:14:26.320 Phil Palumbo, founder CEO and ce IO of Plumbo Wealth Management, 0:14:26.400 --> 0:14:29.440 giving us his thoughts on the market and my takeaways, Matt, 0:14:29.760 --> 0:14:33.160 Gold and commodity is very interesting and in uh and 0:14:33.360 --> 0:14:39.200 but certainly in line with an inflationary outlook. All right, 0:14:39.280 --> 0:14:41.360 let's get over to Katie gray Felt. She is our 0:14:41.400 --> 0:14:45.520 cross asset reporter here at Bloomberg, and I guess in 0:14:45.520 --> 0:14:49.880 this case it goes across from bonds two stocks too. Crypto. 0:14:50.360 --> 0:14:55.120 We've seen a big drop in Bitcoin yesterday, dropping um 0:14:55.160 --> 0:14:58.960 I guess, the most in September, falling below sixty dollars Ether, 0:14:59.160 --> 0:15:03.520 touching its lowest level this month. What's what's behind the drops, 0:15:03.600 --> 0:15:06.720 what's driving the fall? It's a great question and sort 0:15:06.760 --> 0:15:10.080 of the beauty with cryptos that you never really know. Uh, 0:15:10.360 --> 0:15:12.560 some theories that I heard yesterday. I mean, you did 0:15:12.640 --> 0:15:17.160 see the infrastructure package signed into law on Monday, and 0:15:17.240 --> 0:15:23.560 that has tax reporting requirements for broadly to find crypto brokers. 0:15:23.880 --> 0:15:27.560 This was a big issue for the industry back in September. 0:15:27.600 --> 0:15:29.720 But that that was known, so I wouldn't put a 0:15:29.720 --> 0:15:31.680 lot of weight in that, but it was named. The 0:15:31.680 --> 0:15:34.120 other thing could be technicals, which is basically what you 0:15:34.160 --> 0:15:36.400 say when you're not really sure. But if you do 0:15:36.560 --> 0:15:39.480 look at the technicals, especially for Ether, I mean there 0:15:39.480 --> 0:15:43.000 were a lot of indicators from Fibonacci levels to candlesticks, 0:15:43.040 --> 0:15:45.360 all those fancy things that basically all told you the 0:15:45.400 --> 0:15:49.040 same thing that you know, this rally was looking particularly stretched, 0:15:49.080 --> 0:15:51.960 particularly when it came to Ether. I mean, let's not 0:15:52.200 --> 0:15:56.360 forget that Ether it's up what almost five percent this year, 0:15:56.520 --> 0:15:58.800 so it's probably not surprising to see that cool a 0:15:58.800 --> 0:16:02.800 little bit, you know, I think crypto's mainstream when Bloomberg 0:16:02.880 --> 0:16:06.400 Radio has a weekly sponsored crypto report, But I'm still 0:16:06.800 --> 0:16:10.480 surprised Katie that a lot of the veterans on Wall Street, 0:16:10.520 --> 0:16:12.720 the CEO is, whether it's a Jamie Diamond, it just 0:16:12.800 --> 0:16:17.040 doesn't feel like they have fully embraced this asset class 0:16:17.080 --> 0:16:20.160 at all. They'll say, oh, we're providing some trading facilities 0:16:20.200 --> 0:16:22.720 for our clients if they want to trade in crypto, 0:16:22.800 --> 0:16:25.000 will be there, But it doesn't feel like they've really 0:16:25.120 --> 0:16:28.480 embraced it. Is that. I mean, Diamond says it's worthless, worthless, 0:16:28.560 --> 0:16:31.560 so I guess he hasn't embraced it quite yet. No exactly, 0:16:31.600 --> 0:16:33.680 but you know, I do see stories that they're staffing 0:16:33.720 --> 0:16:36.480 up their trading operations and things across the street. But again, 0:16:36.520 --> 0:16:38.440 as Matt was saying, it doesn't feel like it's been 0:16:38.480 --> 0:16:41.840 embraced as a real asset class. Yeah, well, to your point, 0:16:41.880 --> 0:16:44.200 I mean the tone from the top, but a lot 0:16:44.200 --> 0:16:46.960 of these banks is very negative. I mean, we could 0:16:47.040 --> 0:16:48.880 run through that, but still they're kind of these banks 0:16:48.880 --> 0:16:50.960 were trying are basically have to hold their nose and 0:16:51.240 --> 0:16:54.160 offer these services because the client demand is there. I mean, 0:16:54.200 --> 0:16:56.080 you can see that down to the level of E 0:16:56.160 --> 0:16:58.000 t f s. But it was interesting that you also 0:16:58.440 --> 0:17:02.920 heard the UBS chairman basically warn about you know, the 0:17:03.040 --> 0:17:06.400 staying power of crypto. So still a lot of skepticism. 0:17:06.480 --> 0:17:09.040 But I think the clearest indication that this is, you know, 0:17:09.119 --> 0:17:12.439 turning more mainstream, is just how worried the SEC is 0:17:12.480 --> 0:17:15.080 about it. And it's not just the SEC, it's the Treasury, 0:17:15.119 --> 0:17:18.119 it's the FED as well, particularly when it comes to 0:17:18.240 --> 0:17:21.560 stable coins. So I think that's a pretty strong sign 0:17:21.640 --> 0:17:24.480 it's big enough to worry about. And we're starting to 0:17:24.520 --> 0:17:27.480 see Gary Gensler, I mean, he understands and stuff. The 0:17:27.480 --> 0:17:30.200 new chairman of the SEC taught a course I guess 0:17:30.200 --> 0:17:33.000 at M I T and yet he and yet they 0:17:33.080 --> 0:17:38.600 allowed crypto e t F a crypto future and not 0:17:38.720 --> 0:17:43.680 an underlying I still don't understand why they made that decision. 0:17:43.840 --> 0:17:48.120 Was it pressure from Wall Street because they needed to 0:17:48.160 --> 0:17:51.800 deal in some kind of product? If you're gonna allow futures, 0:17:51.880 --> 0:17:55.240 why not allow the underlying I don't understand. It all 0:17:55.240 --> 0:17:58.440 comes back to control. I mean, we know that Genzler, 0:17:58.480 --> 0:18:02.480 in particular, he doesn't or he wants more control over 0:18:02.520 --> 0:18:05.520 the crypto exchanges, and so the logic there and letting 0:18:05.800 --> 0:18:09.720 the futures e t F launches that those options they 0:18:09.760 --> 0:18:14.159 trade on the CMME. That's that's regulated, whereas you know, 0:18:14.280 --> 0:18:17.600 just physical bitcoin, they don't really have any control over that. 0:18:17.720 --> 0:18:20.720 And of course now we're doing all these gymnastics and 0:18:20.760 --> 0:18:24.719 trying to point I know, right, but I mean, now 0:18:24.720 --> 0:18:27.280 you're in this situation where these funds have to pay 0:18:27.760 --> 0:18:31.920 roll costs, they don't perfectly track the price of bitcoin UM. 0:18:32.000 --> 0:18:34.439 So we're in a situation where is this really the 0:18:34.480 --> 0:18:37.080 best for investors? A lot of people would tell you 0:18:37.119 --> 0:18:40.000 know that if you truly want bitcoin exposure, you should 0:18:40.000 --> 0:18:43.920 just buy basin exactly, if you want bitcoin exposure, why 0:18:43.920 --> 0:18:46.159 would you wait around for an e t F Who cares? 0:18:46.400 --> 0:18:48.720 I mean, if you're buy bitcoin, go on corn bait 0:18:48.760 --> 0:18:50.760 coin base and get it corn based. I would like 0:18:50.840 --> 0:18:55.480 to go to cornas oo. But if you have mandates 0:18:55.520 --> 0:18:59.439 that prevent you from buying actual physical bitcoin or trading 0:18:59.480 --> 0:19:03.480 bitcoin derivatives, this does make sense for you. But I mean, 0:19:03.560 --> 0:19:05.360 we did see huge demand for the first of these 0:19:05.359 --> 0:19:07.760 products to launch about a month ago, but it's really 0:19:07.800 --> 0:19:09.720 really trying, you know what. I caught my eye, uh 0:19:09.880 --> 0:19:12.879 and I talked about those Paul already, Katie. When we 0:19:12.960 --> 0:19:19.639 see Amazon start to kick off payment UM companies like Visa, 0:19:19.960 --> 0:19:23.640 for example, this is the beginning of that, and eventually 0:19:24.040 --> 0:19:27.480 some blockchain technology is going to replace that. Amazon is 0:19:27.480 --> 0:19:30.280 going to say from now on, eventually we're going to 0:19:30.359 --> 0:19:34.240 accept so and so crypto coin. Maybe not Bitcoin or ether, 0:19:34.520 --> 0:19:38.800 maybe not finance or doge, but it's going to be 0:19:38.920 --> 0:19:43.119 something because they don't want to pay two percent, three percent, 0:19:43.200 --> 0:19:46.520 four percent to Visa master Card m X. That is 0:19:46.560 --> 0:19:49.119 when it truly becomes mainstream, I would argue. And maybe 0:19:49.160 --> 0:19:51.200 to your point, it's not any of the existing coins. 0:19:51.240 --> 0:19:53.439 Maybe it's the digital dollar. You know, we know that 0:19:53.440 --> 0:19:56.879 the fact Amazon creates its own the Amazon coin, you know, 0:19:57.080 --> 0:19:58.960 it could it could happen and they not have done 0:19:58.960 --> 0:20:02.560 that already. Hopefully someone from Amazon is listening, but I'm 0:20:02.600 --> 0:20:05.879 sure we will see. We are seeing a tiny uptick 0:20:06.080 --> 0:20:09.359 in uh, you know, actual businesses accepting crypto is payment, 0:20:09.400 --> 0:20:11.960 but for now it does just seem to be a 0:20:12.040 --> 0:20:15.359