WEBVTT - Goldman Lost $1.2B and Bitcoin Rebounds 0:00:13.400 --> 0:00:15.920 I'm Caroline Hired of Bloomberg's World. I quarters in New York, 0:00:15.960 --> 0:00:18.720 and I made Lovelow one more time this week in Manhattan. Next, 0:00:18.800 --> 0:00:22.640 my good friend, this is Bloomberg Technology. Goldman Sachs has 0:00:22.680 --> 0:00:25.720 once had a lofty goal of storming the consumer market 0:00:25.760 --> 0:00:28.360 with the Digital Bank of the future. Now all that's 0:00:28.440 --> 0:00:30.280 left as a unit. The racked up on one point 0:00:30.280 --> 0:00:32.720 two billion dollars in losses, most of which was linked 0:00:32.960 --> 0:00:36.440 to the high profile Apple cart. And bitcoin is back, 0:00:36.560 --> 0:00:38.520 well sort of, at least it's had the best week 0:00:38.600 --> 0:00:42.240 since one after losing more than six its value in 0:00:43.040 --> 0:00:45.760 two more on the rally later this hour, and Tesla 0:00:45.960 --> 0:00:48.320 is slashing car prices, this time in the U S 0:00:48.360 --> 0:00:51.239 and sum of Europe. The ev maker is trying to 0:00:51.320 --> 0:00:56.040 stoke demand, but instead stokes investor concern. We discussed, but 0:00:56.240 --> 0:00:59.000 first let's get to these markets. So check in on 0:00:59.040 --> 0:01:01.280 the last day of training the week of course, ahead 0:01:01.280 --> 0:01:02.920 of what is going to be a shortened week next week. 0:01:02.960 --> 0:01:05.840 As we take time off to Mark Martin Luther King day, 0:01:05.840 --> 0:01:08.640 I'm looking at the SP five hundred, almost cracking the 0:01:08.680 --> 0:01:12.160 four thousand level. Three we're above that two day moving 0:01:12.200 --> 0:01:15.000 average up four tens of percent. The NASDAC outperforms up 0:01:15.000 --> 0:01:17.160 seven tenths of a percent, in fact, the longest winning 0:01:17.160 --> 0:01:20.480 street since November one. And even this is a global 0:01:20.640 --> 0:01:23.080 risk on move. We saw Chinese stocks once again, the 0:01:23.120 --> 0:01:28.600 story of China's unfolding on reopening story post those COVID lockdowns. 0:01:28.640 --> 0:01:30.399 We're seeing two point eight percent put to work in 0:01:30.440 --> 0:01:32.760 the in the stocks of course that are traded here 0:01:32.800 --> 0:01:35.640 in the US in the Golden Dragon. Lets something a 0:01:35.640 --> 0:01:37.520 little look a what's happening in terms of crypto, because 0:01:37.520 --> 0:01:39.360 as I said, this is sort of a risk on move. 0:01:39.440 --> 0:01:42.560 No wonder therefore Bitcoin continues. It's as elevation. Look at this, 0:01:42.640 --> 0:01:45.560 we're cracking nineteen thousand, we're now and fifty four close 0:01:45.560 --> 0:01:48.640 to that twenty mark. We're up almost twenty over the 0:01:48.720 --> 0:01:51.200 last few days and the beginning of January. Really this 0:01:51.280 --> 0:01:54.720 continues to be well at last, bit of an outperforming market. 0:01:54.880 --> 0:01:56.520 D Yeah, it's really interesting. I'm seeing a lot of 0:01:56.520 --> 0:01:59.760 similar themes in the specific names. Right, Apple finishing strong 0:01:59.840 --> 0:02:02.280 up one percent this Friday, actually had its best week 0:02:02.360 --> 0:02:04.720 since November. And after we got that cp I print, 0:02:04.960 --> 0:02:07.240 we're talking about the FED moving forward at least in 0:02:07.280 --> 0:02:10.240 the short term. With twenty five basis points increment hikes, 0:02:10.440 --> 0:02:13.239 we're feeling a lot better about the technology sector. That said, 0:02:13.280 --> 0:02:14.760 there is a lot of red on my screen, and 0:02:14.840 --> 0:02:17.799 Tesla is a big contributing factor to that. Ultimately, we 0:02:17.880 --> 0:02:20.639 closed down about a percentage point on Tesla. We have 0:02:20.720 --> 0:02:22.560 been down as much as six percent earlier in the 0:02:22.600 --> 0:02:26.480 session after the ev maker cut prices substantially in the 0:02:26.560 --> 0:02:29.040 United States and also in Europe. You can see that 0:02:29.040 --> 0:02:30.760 had a knock on effect on some of its pure 0:02:30.800 --> 0:02:33.480 play e v peers, including Rivian, which was down six 0:02:33.520 --> 0:02:36.360 and a half percent. NDO Global Really and Training. This 0:02:36.440 --> 0:02:39.480 is leon on Messi, right, this is Messi's big brand 0:02:39.520 --> 0:02:42.440 and clothing company. It had its first trading session this 0:02:42.560 --> 0:02:44.680 Friday after a five dollar I p O. You can 0:02:44.720 --> 0:02:48.400 see actually all told, we're closed at four dollars. Okay, 0:02:48.600 --> 0:02:51.359 this isn't really tech. This is more about social media 0:02:51.600 --> 0:02:54.800 influencing and this is very much a small cap company. 0:02:55.040 --> 0:02:56.600 But at one point, and you've got to take my 0:02:56.639 --> 0:02:58.240 word for it, because we don't see that story on 0:02:58.280 --> 0:03:01.600 the screen, we were up two hundred thirty from that 0:03:01.680 --> 0:03:03.680 I p O price. What can happen in a single 0:03:03.720 --> 0:03:06.799 session is bizarre, but interesting to see that star power, 0:03:06.960 --> 0:03:10.760 that social media influence leverage into the equity markets. Amazon 0:03:10.919 --> 0:03:14.840 is fascinating. Amazon has just had its best week since 0:03:15.720 --> 0:03:17.400 And you and I were talking off camera, Caroline, how 0:03:17.400 --> 0:03:20.040 that kind of went under the radar. Remember what happened 0:03:20.040 --> 0:03:22.600 in April. We all cain't of realized we'd be stuck 0:03:22.639 --> 0:03:26.200 at home indefinitely, it seemed at that time. And Amazon 0:03:26.280 --> 0:03:28.400 was the main beneficiary at that point. Now, with that 0:03:28.440 --> 0:03:31.799 pivot in the psychology around inflation in the FED, well, 0:03:31.840 --> 0:03:34.519 Amazon is also having a really good period right now. Yeah, 0:03:34.560 --> 0:03:36.960 and still fifty five buyers on that particular stock only 0:03:37.040 --> 0:03:39.840 one cell, So we wonder how long that winning formula 0:03:39.920 --> 0:03:42.760 might last. We talked technicals, we talked stocks. We also 0:03:42.760 --> 0:03:46.400 talk what's happening in the earnings that relates to technology, 0:03:46.440 --> 0:03:49.440 because three months ago Goldman Sachs created a new division 0:03:49.520 --> 0:03:52.120 to how's what's left of its for a on Main Street. 0:03:52.240 --> 0:03:56.080 It's called platform Solutions, which includes Goldman's Apple Card. Now 0:03:56.240 --> 0:03:59.760 it's giving shareholders kind of clearer guidance on the financials 0:04:00.000 --> 0:04:02.560 and the unit. Get this, wracked up one point two 0:04:02.640 --> 0:04:05.320 billion dollars in losses in the first nine months of 0:04:05.360 --> 0:04:08.440 two of their own Snai bus. He's been busy converting 0:04:08.480 --> 0:04:10.480 basically all the other band cunings that come out today, 0:04:10.480 --> 0:04:13.160 but managed to get on this particular focus that we 0:04:13.200 --> 0:04:16.040 had for Goldman sax To and this area that basically 0:04:16.320 --> 0:04:18.599 I mean, it's this marketing spend on the Apple College 0:04:18.640 --> 0:04:20.440 or where are these losses mounting from? Well, there are 0:04:20.480 --> 0:04:21.760 a few things that you have to look at. When 0:04:21.760 --> 0:04:24.119 you look at this unit, and this is a unit 0:04:24.400 --> 0:04:26.200 one point to billion dollars is for the first ten 0:04:26.279 --> 0:04:29.000 months of the year. We also have details and also 0:04:29.040 --> 0:04:32.359 previously reported by Samaphore that those losses can amount to 0:04:32.400 --> 0:04:34.919 up to two billion dollars through the full year. So 0:04:35.040 --> 0:04:39.679 more clarity when Goldman reports earnings on Tuesday, much more clarity. Remember, 0:04:39.760 --> 0:04:41.960 David Solomon said that they would have to pivot the 0:04:41.960 --> 0:04:44.839 business already. The question is how much more after these losses? 0:04:44.839 --> 0:04:46.880 Where do they come from? As you ask, part of 0:04:46.880 --> 0:04:51.000 it is operating expenses, which have risen quite meaningfully over time. 0:04:51.279 --> 0:04:53.719 But part of this is also provisions for credit losses. 0:04:53.920 --> 0:04:56.760 We're seeing a lot of banks announced those provisions for 0:04:56.800 --> 0:05:00.080 credit losses. Now Goldman has been getting new consum as, 0:05:00.080 --> 0:05:02.760 they've been getting younger consumers will see how their losses 0:05:02.800 --> 0:05:05.679 stack up against the other banks, which are also showing 0:05:05.839 --> 0:05:09.599 that those charge offs in particular are rising as they 0:05:09.680 --> 0:05:14.680 get new credit card customers. So definitely a competitive business Goldman. 0:05:15.160 --> 0:05:17.240 Remember they are one of the only banks with a 0:05:17.320 --> 0:05:21.080 meaningful relationship with a very large technology firm. City Group 0:05:21.080 --> 0:05:23.440 had tried to do something with Google about a year 0:05:23.520 --> 0:05:26.400 or so ago that kind of fell through, So Apple 0:05:26.440 --> 0:05:28.960 was supposed to be a huge competitive advantage. We expect 0:05:28.960 --> 0:05:32.080 them to lean on the relationship with Apple continuously, but 0:05:32.440 --> 0:05:35.760 again not only earnings. Goldman's investor Day at the end 0:05:35.760 --> 0:05:38.120 of February should give us a sense of how far 0:05:38.200 --> 0:05:42.640 these ambitions will go. Remind me, like, why it's beneficial 0:05:42.680 --> 0:05:44.760 to tie up with Apple here for Goldman, because at 0:05:44.760 --> 0:05:47.200 the moment when I use Apple Pay, I don't care 0:05:47.240 --> 0:05:48.880 which I mean, I just kind about which credit card 0:05:48.880 --> 0:05:51.280 I'm using as to whether standing on my credit Yeah, 0:05:51.279 --> 0:05:54.080 why does it matter? Well, there's a few things. When 0:05:54.120 --> 0:05:55.800 all of this had started, a couple of things were 0:05:55.800 --> 0:05:57.760 happening at the same time. For Goldman's acts, it was 0:05:57.800 --> 0:06:01.080 a matter of diversifying its revenue base, and so what 0:06:01.279 --> 0:06:02.960 what is that going to cost? Them over the longer 0:06:03.080 --> 0:06:04.720 term to do. When you look at the strategies of 0:06:04.760 --> 0:06:07.360 the other banks, they've doubled down in things like wealth, 0:06:07.440 --> 0:06:10.320 for example. Even when you come to fintech, they've doubled 0:06:10.320 --> 0:06:12.400 down with wealth at that time. Also, a lot of 0:06:12.440 --> 0:06:15.320 the big technology firms had these grand ambitions to be 0:06:15.400 --> 0:06:18.320 in finance in a bigger way, which has not really 0:06:18.360 --> 0:06:23.000 materialized either, and so you have more partnerships and friendships 0:06:23.120 --> 0:06:26.919 rather than real competitive issues here. We'll see if that 0:06:27.000 --> 0:06:29.279 changes in the next ten years or so. But I 0:06:29.320 --> 0:06:31.279 do want to point out really quickly the other story 0:06:31.360 --> 0:06:34.000 that in fintech that we want to keep an eye out. 0:06:34.040 --> 0:06:35.279 What I was going to say that you know, for 0:06:35.360 --> 0:06:38.479 me somebody who covers the technology sector, sometimes there's a 0:06:38.480 --> 0:06:39.920 bit of a land grab. You see all of these 0:06:39.960 --> 0:06:42.080 kind of legacy players like in finance and banks, they 0:06:42.120 --> 0:06:44.840 want to move into fintech. Goldman is not alone in that. 0:06:45.040 --> 0:06:48.760 JP Morgan, you know, actually coming clean about its own 0:06:48.760 --> 0:06:52.800 problem that it's experiencing financially on that to remember, this 0:06:52.880 --> 0:06:54.560 is actually kind of this is a story that's called 0:06:54.560 --> 0:06:57.880 the VC community by storm. Also, this fintech firm Frank 0:06:58.279 --> 0:07:01.680 which was a college financial planning kind of platform here, 0:07:01.720 --> 0:07:03.720 So a lot of college students coming out using it. 0:07:04.240 --> 0:07:08.320 They are suing them for misstating the types of account 0:07:08.400 --> 0:07:10.920 or the number of accounts that it had. Remember, they're 0:07:10.920 --> 0:07:14.680 disputing this the frank founder. But take a listen to 0:07:14.680 --> 0:07:16.640 what Jamie Diamond had to say. He said it was 0:07:16.680 --> 0:07:20.760 a huge mistake. But the acquisitions are done by the businesses, 0:07:21.080 --> 0:07:24.360 but there's also a centralized team that does extensive due diligence. 0:07:24.560 --> 0:07:28.280 So the business does it, the U the central ifed 0:07:28.280 --> 0:07:30.520 team does it. You've been doing it for twenty years, 0:07:30.520 --> 0:07:32.760 whether you like we just started doing something like that. 0:07:33.240 --> 0:07:35.920 And obviously there are always lessons learned, and you know, 0:07:35.960 --> 0:07:37.600 at one point we'll tell you the lesson will learn 0:07:37.640 --> 0:07:41.280 to here when there's been a data litigation. These huge mistakes, 0:07:41.320 --> 0:07:44.040 these lessons learned. Remember the analyst investor community has been 0:07:44.040 --> 0:07:47.080 wondering about Jamie Diamond and JP Morgan Frankly, to your point, 0:07:47.080 --> 0:07:50.200 the rest of Wall Street here, their acquisitions free when 0:07:50.200 --> 0:07:53.200 you come to the fintech world, multibillion dollars in some cases. 0:07:53.480 --> 0:07:56.760 And the criticism here comes down to that due diligence 0:07:56.800 --> 0:07:59.520 and how they didn't see something like this I'm gonna 0:07:59.520 --> 0:08:02.480 still page from Eric Newcomer and say that, you know, 0:08:02.520 --> 0:08:04.920 it's very rare for things like this to play out 0:08:04.960 --> 0:08:08.600 so publicly in the financial technology world, in the VC 0:08:08.800 --> 0:08:12.320 backed space. So you know, it's not a lot of money. 0:08:12.360 --> 0:08:14.600 For JP Morgan, it was a hundred seventy million dollars. 0:08:14.640 --> 0:08:16.360 This is it's not and it's not as though a 0:08:16.360 --> 0:08:19.520 few vcs have written a few checks that rates have 0:08:19.600 --> 0:08:23.080 been mistaken once and the razing exactly that I say exactly, 0:08:23.160 --> 0:08:25.120 but I will say, after the exuberance that we've seen 0:08:25.160 --> 0:08:28.560 so far, perhaps banks will be thinking twice when they 0:08:28.640 --> 0:08:31.040 listen to thirty year old standards. Yeah, jamie's'm in not 0:08:31.120 --> 0:08:33.439 one to mince his words. I think that's probably putting 0:08:33.440 --> 0:08:35.640 it a little bit lightly blue MECTIONALI bassing, thank you, 0:08:35.720 --> 0:08:47.320 amazing week, terrific reporting. Let's talk crypto in particular. Let's 0:08:47.360 --> 0:08:49.839 talk bitcoin because yes, we all know lost about six 0:08:50.720 --> 0:08:53.480 last year is its second worst annual performance on record, 0:08:53.920 --> 0:08:56.600 but now a little bit more of a promising start 0:08:56.640 --> 0:08:58.360 to the new year. Read. Yeah, there's so many ways 0:08:58.360 --> 0:09:00.400 to size and scope this. I mean, one of them 0:09:00.440 --> 0:09:02.520 is to talk about sort of the run we're on 0:09:02.960 --> 0:09:07.520 new year, new Vibe Bitcoin up for ten consecutive sessions. 0:09:07.559 --> 0:09:11.360 It's best run or streak of gains going back to July. 0:09:12.200 --> 0:09:15.480 I find that very interesting. What is the psychology driving 0:09:15.520 --> 0:09:18.160 the market right now? There was a fantastic story as 0:09:18.160 --> 0:09:20.679 well on the Bloomberg terminal this Friday that caught my 0:09:20.880 --> 0:09:24.720 about another corner of the crypto market, which is crypto 0:09:24.800 --> 0:09:28.400 asset focused fund e t s. Right, remember e t 0:09:28.520 --> 0:09:31.600 s for a six point eight trillion dollar industry. Two 0:09:31.640 --> 0:09:35.959 thousand of them, two thousand across different themes attracted by 0:09:36.040 --> 0:09:39.840 Bloomberg excluding leverage products. Now there are four lines on 0:09:39.880 --> 0:09:41.520 this chart to my right hand side, which I'll get 0:09:41.520 --> 0:09:44.840 to a minute. But of those two thousand ets tracks 0:09:44.840 --> 0:09:47.760 by Bloomberg, which across lots of different things, lots of 0:09:47.760 --> 0:09:51.960 different equity products, the top four teen, all top fourteen 0:09:52.080 --> 0:09:56.240 are crypto related year today and exactly it's astonishing performance. Now, 0:09:56.280 --> 0:09:58.160 these are the four that I've picked out for you, 0:09:58.200 --> 0:10:02.040 the top four performers, the Valk bitcoin miners e t F, 0:10:02.160 --> 0:10:03.439 as you can see on the screen next to me, 0:10:03.559 --> 0:10:07.080 up almost sev in the first what is it, thirteen 0:10:07.160 --> 0:10:09.719 days and only seven trading sessions or so of the 0:10:09.800 --> 0:10:11.840 year so far, and it gives you an idea that 0:10:11.880 --> 0:10:14.400 there is some confidence coming back. Now, this is a 0:10:14.480 --> 0:10:17.840 kind of varied list of assets, right, and we've talked 0:10:17.840 --> 0:10:21.440 about bitcoin. That's one example, the biggest digital asset or 0:10:21.520 --> 0:10:26.080 digital currency by market value globally. My question is, has 0:10:26.120 --> 0:10:27.720 the kind of I don't want to use the word 0:10:27.760 --> 0:10:31.960 contagion risk from FTX from what we've seen from regulators 0:10:31.960 --> 0:10:35.000 that ended two? Are we kind of moving past that now? 0:10:35.040 --> 0:10:36.840 And study is build a bit of momentum? That's not 0:10:36.880 --> 0:10:38.800 for me to answer. I'm fortunate to say I think 0:10:38.800 --> 0:10:40.960 we have somebody that probably could weigh in on that 0:10:41.040 --> 0:10:43.319 character we do. And also how much of this is 0:10:43.320 --> 0:10:45.960 a macro trend because let's face it, we've had risk 0:10:46.000 --> 0:10:48.880 assets performed pretty well and the dollar down. Let's talk 0:10:48.920 --> 0:10:51.439 at all through with still Mark, founder managing partner, and 0:10:51.559 --> 0:10:53.920 he's clean who joins us now, and this is always 0:10:53.920 --> 0:10:57.160 great to get your perspective. We know you're focus on bitcoin. 0:10:57.240 --> 0:10:58.920 You'll focus on what is the O G of the 0:10:58.960 --> 0:11:01.440 crypto space, and I'm interested in first and foremost on 0:11:01.720 --> 0:11:03.920 what the stealth rally that's kind of taken us by 0:11:03.920 --> 0:11:08.400 surprise here. It's always hard to know why bitcoins price 0:11:08.520 --> 0:11:11.280 moves when it gets but in times of chaos in 0:11:11.320 --> 0:11:14.319 the crypto market, we will often see a flight to 0:11:14.480 --> 0:11:18.000 security and stability, and the market knows that to be 0:11:18.320 --> 0:11:22.480 Bitcoin and and potentially this this week's rally and BTC 0:11:23.760 --> 0:11:27.240 to your to that perspective, is this, as Ed pondered, 0:11:27.960 --> 0:11:30.880 a movement away from the contagion risk or is this 0:11:31.200 --> 0:11:34.280 perhaps more of a macro trend, more of tech stalks 0:11:34.320 --> 0:11:38.160 doing relatively well dollar on the weakening perspective? Is is 0:11:38.160 --> 0:11:41.520 that what's happening? What do you think? There's a few 0:11:41.600 --> 0:11:45.360 courses that play here, of course, especially as is related 0:11:45.400 --> 0:11:49.280 to bitcoin's short term price movements. Where still markets focused, 0:11:49.280 --> 0:11:51.960 of course, is in the long term and the value 0:11:52.360 --> 0:11:57.200 generated by the economic activity happening on top of bitcoin technologies, 0:11:57.720 --> 0:12:00.720 and we know that adoption continues to it at a 0:12:00.880 --> 0:12:04.560 very steady cadence. The price will reflect some of that 0:12:04.760 --> 0:12:08.320 as well as the expansion of bitcoin's utility. So as 0:12:08.360 --> 0:12:11.280 we see the Lightning network mature, for instance, and the 0:12:11.360 --> 0:12:15.480 utilities set expand we understand the intrinsic value of bitcoin 0:12:15.559 --> 0:12:19.440 and it's underlying technologies to have increased until I emagine 0:12:19.480 --> 0:12:22.800 the price movements reflect in understanding of that as well. 0:12:23.200 --> 0:12:25.640 At least, Happy Friday to you. It's good to see you. 0:12:25.640 --> 0:12:27.320 You know, we we we've kind of jumped straight in 0:12:27.360 --> 0:12:31.119 here to the bigger picture of what's driving the psychology 0:12:31.120 --> 0:12:32.960 of the market. What what was fascinating for me is, 0:12:33.200 --> 0:12:35.319 you know, bitcoins continued to push higher in a week 0:12:35.320 --> 0:12:38.080 where there was still I guess volatility in the headlines 0:12:38.160 --> 0:12:43.199 right US Securities and Exchange Commission filing you know, charges 0:12:43.280 --> 0:12:46.679 or complaints against Gemini Genesis and claiming that they offered 0:12:47.040 --> 0:12:50.520 unregistered securities. First of all, I guess what is your 0:12:50.559 --> 0:12:55.920 reaction to to that action by the SEC. The action 0:12:56.000 --> 0:12:59.600 from the SEC was focused on gemini S burn product, 0:12:59.720 --> 0:13:03.560 which was bearing the promise of yield generation, and the 0:13:03.760 --> 0:13:07.640 SEC has been pretty clear and their focus on custodial 0:13:07.720 --> 0:13:11.640 based yield products offered to retail participants, and so this 0:13:11.760 --> 0:13:15.120 was consistent with that effort. What's interesting is how that 0:13:15.240 --> 0:13:18.920 matches with activity happening in the bitcoin space and specifically 0:13:18.960 --> 0:13:22.960 the lightning space. There will be a void here where 0:13:23.320 --> 0:13:29.840 activity that was speculation based and custodial driven for yield 0:13:29.840 --> 0:13:32.400 generation in the crypto space. That void can be filled 0:13:32.480 --> 0:13:37.080 by yield bearing products or opportunities in the Lightning network. 0:13:37.520 --> 0:13:40.760 And here's why. As the Lightning network has grown an 0:13:40.800 --> 0:13:44.720 adoption as it's matured that's paid the path for a 0:13:44.840 --> 0:13:48.400 liber to emerge a libra of the Lightning network. And 0:13:48.440 --> 0:13:51.640 what that means is that there's a real rate for 0:13:52.200 --> 0:13:55.520 yields in the lightning network that is tied to the 0:13:55.679 --> 0:13:59.680 value placed on payment capacity for the Lightning network. And 0:13:59.720 --> 0:14:03.520 so adoption of the Lightning network grows as additional assets 0:14:03.520 --> 0:14:07.240 are introduced to the Lightning network, for instance through Lightning 0:14:07.320 --> 0:14:10.520 Labs Pterot protocol. What we can expect to see is 0:14:10.600 --> 0:14:14.200 that rate increase. So we take a look today at 0:14:14.240 --> 0:14:19.160 the rate of of um of both funds on Lightning 0:14:19.160 --> 0:14:23.440 network and payment pathways. What we would find on Ambos 0:14:23.480 --> 0:14:27.640 Ambos Technologies Magma marketplace is about a three percent rate 0:14:28.160 --> 0:14:30.720 of return, which we can expect to see grow as 0:14:30.800 --> 0:14:33.360 Lightning network continues to scale. At least I want to 0:14:33.400 --> 0:14:37.400 ask you about sam bankmn Freed and the latest his 0:14:37.520 --> 0:14:39.680 latest comments. Before I do, can I just ask you 0:14:40.000 --> 0:14:43.000 just to to state for us whether still Mark had 0:14:43.040 --> 0:14:47.560 any financial relationship with SPF or f t X. Of 0:14:47.560 --> 0:14:51.120 course not, because we're focused on bitcoin and sustainable value 0:14:51.160 --> 0:14:56.040 propositions to the exclusion of gambling related activities, which drives 0:14:56.080 --> 0:14:58.960 a lot of the activity and exchanges today. I just 0:14:59.000 --> 0:15:01.360 wanted to be very side of our mandate. No, I 0:15:01.400 --> 0:15:03.480 appreciate that. I just wanted to sow audience to know 0:15:03.480 --> 0:15:05.000 where we stand on that. So now I can ask 0:15:05.080 --> 0:15:08.600 you about SPF his post blog post for one of 0:15:08.600 --> 0:15:10.960 a better description this week where he kind of doubled 0:15:11.000 --> 0:15:14.600 down on the idea that he denies allegations of fraud, 0:15:14.680 --> 0:15:18.080 that he didn't steal or embezzle any funds. You know, 0:15:18.120 --> 0:15:23.120 what is your reaction to that ongoing development. They've all 0:15:23.120 --> 0:15:27.200 denied the same. So I think there's a fine line 0:15:27.320 --> 0:15:35.040 between what folks running these sorts of black box schemes 0:15:36.000 --> 0:15:39.280 I believe is promissible in an effort to produce returns, 0:15:40.040 --> 0:15:42.560 versus what they consider to be fraud. But in fact, 0:15:42.600 --> 0:15:45.760 what appears to have been happening in the fts was 0:15:45.800 --> 0:15:49.520 that leadership dipped into use your accounts to more funds 0:15:49.640 --> 0:15:53.880 to take speculative bets on the movement of crypto prices 0:15:53.920 --> 0:15:57.400 and tooken prices. And that's not a dissimilar story from 0:15:57.400 --> 0:16:02.160 what we saw in the collapse of sayerst Capital Firm 0:16:02.280 --> 0:16:04.800 or others similar and so it's very hard to know 0:16:04.840 --> 0:16:07.640 where the contagion stops here because there's a lack of 0:16:07.680 --> 0:16:12.120 transparency in the crypto space. But what it does underscores 0:16:12.200 --> 0:16:16.000 the value and technologies that allow folks to have greater 0:16:16.080 --> 0:16:20.440 control of their cryptocurrency and Bitcoin specifically, or technologies that 0:16:20.520 --> 0:16:25.600 allow retail investors or participants in exchanges to demand transparency 0:16:25.720 --> 0:16:28.480 so that you know if you're buying if you're buying 0:16:28.560 --> 0:16:32.040 bitcoin on in exchange, including if that exchange was FTS, 0:16:32.480 --> 0:16:34.200 that you can ask them to prove that the in 0:16:34.320 --> 0:16:37.480 fact hold that bitcoin. And as as we've come to 0:16:37.560 --> 0:16:40.840 find out, people were buying bitcoin on FTS and f 0:16:40.920 --> 0:16:44.600 TX was never requiring or holding that bitcoin on consumers behalf. 0:16:45.000 --> 0:16:47.360 The good news is that bitcoin allows you to be 0:16:47.440 --> 0:16:50.800 your own bank. That's inherent in the value proposition and 0:16:50.840 --> 0:16:54.720 by using self custody products and doubling down on the 0:16:54.840 --> 0:16:58.360 value proposition that self custody bitcoin can have when you 0:16:58.640 --> 0:17:01.880 enable a proof of preserve mechanism to prove your credit 0:17:01.880 --> 0:17:05.560 worthiness is a Bitcoin holder, for instance, we have more 0:17:05.600 --> 0:17:09.840 tools and resources for folks to opt out of exchanges 0:17:09.920 --> 0:17:12.439 like US. Yeah, I think look there's so much more 0:17:12.520 --> 0:17:15.199 to find out from the authorities, in particular about the 0:17:15.240 --> 0:17:18.520 investigation into sam Bankman Freed and FT. But it's interesting 0:17:18.920 --> 0:17:22.679 to get a somebody in the underlying technology perspective, somebody 0:17:22.920 --> 0:17:25.160 in the industry is suspective on what's going on. Still 0:17:25.200 --> 0:17:27.800 mock founder and managing partner at least clean. Thank you 0:17:27.920 --> 0:17:31.160 very much for joining us. Now coming up, Tesla cuts 0:17:31.200 --> 0:17:34.520 prices across its line up in the usm major European markets, 0:17:34.760 --> 0:17:38.280 plus Elon's having trouble with a fraud trial in San Francisco. 0:17:38.359 --> 0:17:55.240 Will explain next. This is Bloomberg. That's a great company. 0:17:55.760 --> 0:17:57.560 We just don't believe it's a great start right now. 0:17:57.640 --> 0:18:00.359 It's unclear whether how long the pros that are going 0:18:00.440 --> 0:18:04.000 to have to keep going in. That was Marks Stoker 0:18:04.080 --> 0:18:06.879 there from Adam's Funds saying Tesla not a great stock 0:18:06.960 --> 0:18:09.439 right now, Carol. And the interesting thing is that it 0:18:09.480 --> 0:18:12.879 continues to react negatively to use. Tesla cutting prices across 0:18:12.880 --> 0:18:16.800 its lineup in the US and major European markets. Why well, 0:18:16.960 --> 0:18:19.560 questions of demand you can see actually all told, we're 0:18:19.600 --> 0:18:22.920 down one percent on Tesla. Other peers, particularly the pure 0:18:23.000 --> 0:18:26.000 play ev names, but also some of the legacy automakers 0:18:26.040 --> 0:18:29.760 also falling. The question is if you cut prices, does 0:18:29.800 --> 0:18:32.440 that spur some demand? And that's the debate around the stock, 0:18:32.480 --> 0:18:35.840 at least from cell side analysts this Friday, and great 0:18:35.840 --> 0:18:37.879 set up in what's happening in terms of the fundamentals 0:18:37.880 --> 0:18:40.159 of the business or lack thereof. And and indeed we 0:18:40.560 --> 0:18:42.560 know about the cutting of the prices, but let's stick 0:18:42.600 --> 0:18:45.280 on Tessa and perhaps it's found them more broadly now 0:18:45.320 --> 0:18:48.840 because during the securities for trial that's tied to Elon 0:18:48.920 --> 0:18:52.560 Musk tweet that he was taking the company private. Well, 0:18:52.800 --> 0:18:55.760 it's back resurfacing because Elon Musk wanted it moved down 0:18:55.760 --> 0:18:59.200 to San Francisco, and it seems though that request was rejected. 0:18:59.400 --> 0:19:01.920 The judge her own Musk's argument that he faces a 0:19:02.040 --> 0:19:05.239 biased jewelry pool in the Bay Area. Let's talk all 0:19:05.280 --> 0:19:08.200 of the latest with Dana Hall and covers all things 0:19:08.200 --> 0:19:11.439 Tesla and now start on the trial and maybe comport 0:19:11.480 --> 0:19:14.000 it out to testa more generally Donna, But what do 0:19:14.040 --> 0:19:18.320 you make of this overruling for Ela Musk? Well, it 0:19:18.359 --> 0:19:20.680 was a really long shot kind of hail Mary bid 0:19:20.680 --> 0:19:23.360 on the part of Elon's attorneys. I mean, this trial, 0:19:23.960 --> 0:19:26.879 which has been in litigation for over four years, has started. 0:19:26.920 --> 0:19:29.600 It's supposed to start on Tuesday, and so this like 0:19:29.680 --> 0:19:32.199 sort of last stitch effort to move it to Texas 0:19:32.320 --> 0:19:34.919 was never gonna fly. So the ruling today was not 0:19:34.960 --> 0:19:37.879 a surprise. I just think it's wild that, like I mean, 0:19:37.880 --> 0:19:40.240 there are probably more Tesla owners in the Bay Area 0:19:40.280 --> 0:19:42.359 than in any place in the world except maybe l A. 0:19:42.640 --> 0:19:44.760 It's like Sabari in l A are always neck and 0:19:44.800 --> 0:19:48.280 neck in term of terms of Tesla penetration, and so um, 0:19:48.320 --> 0:19:50.720 it's just funny to me that Elon Musk and his 0:19:50.720 --> 0:19:53.360 attorneys were saying that they couldn't get a fair trial here. Hey, 0:19:53.400 --> 0:19:55.639 Donna take us back to basics. What are the plaintiffs 0:19:55.640 --> 0:19:57.879 trying to achieve here? What is it that this trial 0:19:57.960 --> 0:20:02.280 is all about? It about that. It's about August team, 0:20:02.320 --> 0:20:04.880 when Elon Musk tweeted that he had the funding secure 0:20:04.960 --> 0:20:08.280 to take Tesla private at four twenties share Uh, there 0:20:08.320 --> 0:20:11.920 were wild gyrations in the stock market. Shareholders got burned. 0:20:12.280 --> 0:20:15.160 They are suing him saying that he you know, should 0:20:15.200 --> 0:20:17.560 have known that they're suing him, basically saying that they 0:20:17.600 --> 0:20:20.439 got screwed by this effort. And what's fascinating is that 0:20:20.520 --> 0:20:23.480 Musk and his attorneys are trying to get the Saudi 0:20:23.720 --> 0:20:27.400 Public Investment Fund folks to come testify on Musk's behalf, 0:20:27.480 --> 0:20:29.960 and the Saudis also basically said no, like, we're not 0:20:30.040 --> 0:20:31.879 under an in any obligation to come to this. This 0:20:32.000 --> 0:20:34.520 isn't a criminal trial, it's a civil trial. We're not 0:20:34.520 --> 0:20:36.760 going to show. So it's looking weaker and weaker for 0:20:36.880 --> 0:20:39.720 Musk and his team. And uh, the whole moving the 0:20:39.800 --> 0:20:42.000 trial out of the Bay Area thing was pretty laughable. 0:20:43.560 --> 0:20:47.040 Rule how investors feeling about Elon Musk, I mean the 0:20:47.080 --> 0:20:49.960 fact that he thought he would get perhaps not such 0:20:49.960 --> 0:20:53.960 a friendly viewpoint in San Francisco, I'm not sure worldwide, 0:20:54.000 --> 0:20:56.720 I mean, how much he's liked and loved by the 0:20:56.720 --> 0:21:00.680 investor base given the erosion and value in Tesla more broadly, well, 0:21:00.680 --> 0:21:03.840 the investor investor sentiment is horrible. I mean, there's just 0:21:04.040 --> 0:21:06.560 there's just no question. You look at the sell off 0:21:06.720 --> 0:21:10.360 in two and then you know, you begin this year 0:21:10.440 --> 0:21:14.240 where Tesla is having a shareholder meeting in May. They 0:21:14.240 --> 0:21:17.040 didn't announce to investors that the meeting of the day 0:21:17.080 --> 0:21:19.199 of the meeting. They basically snuck the news of the 0:21:19.240 --> 0:21:21.639