WEBVTT - Banks, Powell, Crypto, and Jamie Dimon (Podcast) 0:00:00.760 --> 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 CEO's, market pros and Bloomberg experts, along 0:00:11.520 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.400 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:21.480 at Bloomberg dot com slash podcast. I want to check 0:00:21.520 --> 0:00:24.759 in with Alison Williams of Bloomberg Intelligence Season senior analysts 0:00:24.760 --> 0:00:28.400 covers all the big global banks, the investment banks, the 0:00:28.440 --> 0:00:31.640 asset managers. I don't want to start, Alison. I don't 0:00:31.640 --> 0:00:33.479 want to start with Credit Swiss because it's too depressing 0:00:33.479 --> 0:00:35.640 from my former employer, and that thing is just a 0:00:36.080 --> 0:00:40.720 disaster city. Great article in the Bloomberg Terminal City adding 0:00:40.880 --> 0:00:44.120 maybe doubling staff in Paris, and in this article they 0:00:44.120 --> 0:00:46.199 talk about more and more investment banks any more and 0:00:46.240 --> 0:00:50.120 more staff to Paris. Now it's a great city, one 0:00:50.120 --> 0:00:52.360 of the world's all time great cities. I get it. 0:00:52.800 --> 0:00:56.240 But is this just another movement of people post Brexit 0:00:56.400 --> 0:01:00.920 from London to the continent. I believe that is um 0:01:01.360 --> 0:01:04.640 the case. And we did hear this, you know, from 0:01:04.720 --> 0:01:07.440 from a lot of bank managements in recent years about 0:01:07.440 --> 0:01:10.319 some of the changes that we've we've been they'd be making. 0:01:10.600 --> 0:01:12.399 Um and I think that this is just sort of 0:01:12.440 --> 0:01:18.760 a continuation of moving some headcount out of London. So 0:01:19.840 --> 0:01:21.479 what is it when when you think about these big 0:01:21.520 --> 0:01:24.520 global investment banks, Allison, you know, the JP Morgans is 0:01:24.600 --> 0:01:28.640 the cities of the world. Where is London in the 0:01:28.640 --> 0:01:30.280 global picture? I mean there was a time back and 0:01:30.319 --> 0:01:32.360 I'll tell you where London is. It's in a lower 0:01:32.400 --> 0:01:35.360 tax regime than Paris. Yes, I mean, are the most 0:01:35.400 --> 0:01:38.040 important players really going to move to a place that 0:01:38.560 --> 0:01:42.759 you know threatens like ninety percent income tax? It just 0:01:42.800 --> 0:01:45.000 seems like too much of a problem for me. Paris 0:01:45.080 --> 0:01:48.280 is a great city to visit. I adore the French, 0:01:49.680 --> 0:01:53.600 but um, you know, they're just too unpredictable in terms 0:01:53.600 --> 0:01:55.600 of how much money they're going to take from you 0:01:55.640 --> 0:01:59.840 if you live there. Well, I guess that's that's perhaps 0:02:00.120 --> 0:02:03.480 viewpoint of the employees, right, But I think from the 0:02:03.480 --> 0:02:06.240 bank's perspective, you have to go where the clients are 0:02:06.960 --> 0:02:10.640 and if the clients want their trades to be done 0:02:10.880 --> 0:02:15.320 in Paris, Um, you know, that's that's that's really the 0:02:15.360 --> 0:02:17.800 movement that's happening. I mean, I remember five years ago 0:02:17.800 --> 0:02:19.880 when the clients wanted their trades to be done in Frankfort, 0:02:19.919 --> 0:02:22.799 and bankers said, like, we'd rather work at a gas 0:02:22.840 --> 0:02:26.280 station in London then go to Frankfort. I remember when 0:02:26.280 --> 0:02:29.200 Goldman Saxe was pushing people to move there, go to Munich, 0:02:29.320 --> 0:02:32.959 and I think like Hugh pill went there and then 0:02:33.600 --> 0:02:37.400 his administrative assistant refused to come with him, Like nobody 0:02:37.440 --> 0:02:39.959 wanted to go to Frankfort exactly. So I mean, I 0:02:40.000 --> 0:02:43.240 guess Paris has a bigger draw with the louver and stuff. Um. 0:02:43.480 --> 0:02:46.200 I think Paris has some baguettes, yes, exactly, No, but 0:02:46.240 --> 0:02:50.720 I just can't imagine that the big money really goes there. London, Alison, 0:02:50.800 --> 0:02:56.519 London is still the financial hub of Europe, isn't it correct? Yes, yeah, 0:02:56.560 --> 0:02:59.880 So it's not to say that, it's just it's you know, 0:03:00.040 --> 0:03:02.240 it's all sort of I guess degrees or it's all 0:03:02.320 --> 0:03:05.840 relative um and just you know, with Brexit, you just 0:03:05.919 --> 0:03:09.240 have to have a presence in more than one place, um. 0:03:09.280 --> 0:03:12.240 And so you know, some might have picked Frankfurt, and 0:03:12.320 --> 0:03:15.359 so I might pick Paris. If if you're Bloomberg, you 0:03:15.520 --> 0:03:19.520 doubled down on London and built the most amazing office 0:03:19.520 --> 0:03:22.160 building in the city of London, which is smoking on true. 0:03:22.200 --> 0:03:26.440 But that was before Brexit. Ye still headcount there. We 0:03:26.520 --> 0:03:30.360 doubled down fingers crossed and then hoops um. Let me 0:03:30.400 --> 0:03:35.760 ask about Credit Sweee because I was pretty amazed that 0:03:35.880 --> 0:03:38.880 David Harrow sold the rest of his stake. I mean this, 0:03:39.200 --> 0:03:43.440 if if anybody had a solid long term backer, it 0:03:43.480 --> 0:03:47.160 was Credit Sweee and and David Harrow. And now they're gone. 0:03:47.560 --> 0:03:52.520 Does that mean it's over? I mean, obviously it's it's 0:03:52.840 --> 0:03:55.560 not a good thing to lose, you know, your biggest 0:03:55.560 --> 0:03:59.680 backer for a long time. And in some to some extent, 0:03:59.760 --> 0:04:03.120 it may explain, you know, some of the weakness in 0:04:03.160 --> 0:04:05.640 the stock over the past couple of months. Obviously there's 0:04:06.400 --> 0:04:08.440 there was a lot of reasons kind of going into 0:04:08.440 --> 0:04:13.600 the capital raise. But I think that this just goes 0:04:13.640 --> 0:04:15.840 to again, I think that the key concern is that 0:04:15.960 --> 0:04:20.080 there has to be some type of studying, you know, 0:04:20.360 --> 0:04:23.039 And I saw that Harrow had made comments I believe 0:04:23.440 --> 0:04:25.840 in in the ft at the end of last year 0:04:25.960 --> 0:04:28.400 when he had cut sort of his stake in half, 0:04:28.480 --> 0:04:31.920 just talking about the fact that you know, other banks 0:04:31.920 --> 0:04:36.520 were generating capital. You know, kartz Sweet is still in 0:04:36.520 --> 0:04:39.640 a lost position. It needs to show sign of setting 0:04:39.720 --> 0:04:43.279 and it just it just one could argue, you know, 0:04:43.320 --> 0:04:48.200 with some investors that the sort of lack of catalysts 0:04:48.240 --> 0:04:50.880 the upside or stopping them from getting in. But for 0:04:51.040 --> 0:04:53.359 a very big investor to get out, I think that 0:04:53.440 --> 0:04:57.080 really does you know, sort of sort of cast out 0:04:57.200 --> 0:05:01.640 on what's next for this bank. So, Alison, I look 0:05:01.640 --> 0:05:05.159 at the holders section here on the Bloomberg terminal hd AS. 0:05:05.240 --> 0:05:08.839 It gives you the stockholders, the Saudi National Committee, you know, 0:05:08.920 --> 0:05:12.640 the Cutter Investment Authority are the two big shareholders. Is 0:05:12.640 --> 0:05:17.600 there a point where the Swiss government needs to get 0:05:17.640 --> 0:05:22.000 involved in terms of ownership? Yeah, Their their capital ratio 0:05:22.400 --> 0:05:25.120 is one of their strengths at the moment. They are 0:05:25.200 --> 0:05:27.080 going to obviously eat into that with some of the 0:05:27.120 --> 0:05:30.640 losses that are expected in one queue and for this year. 0:05:32.480 --> 0:05:36.360 So I think that that does give them some breathing room. 0:05:36.400 --> 0:05:39.600 I think, you know, you know, it's the fact that 0:05:39.600 --> 0:05:43.080 there are other the two anchor investors now are you 0:05:43.120 --> 0:05:47.159 know the sovereign sovereign wealth funds which have you know, 0:05:47.279 --> 0:05:54.840 generally can have a much longer investment horizon just maybe 0:05:54.920 --> 0:05:56.560 speak to the fact that this is sort of a 0:05:56.600 --> 0:06:00.200 longer term story. And I guess to the point I 0:06:00.279 --> 0:06:03.360 said before that there are sort of no near term catalysts, 0:06:03.360 --> 0:06:06.000 and I think that investors do want to see some 0:06:06.600 --> 0:06:10.719 sign of stability, especially in terms especially in terms of 0:06:10.720 --> 0:06:12.960 the wealth flows. I think that's that's the most important. 0:06:13.040 --> 0:06:17.240 We management talked about some green shoots. You know, they 0:06:17.240 --> 0:06:19.160 said that they've been talking to a lot of clients, 0:06:19.160 --> 0:06:21.240 et cetera, et cetera. But you really need to see 0:06:21.839 --> 0:06:24.440 that turn. You need to see that the client confidence 0:06:24.480 --> 0:06:26.719 has studied. All right, Alison, thank you so much. We 0:06:26.720 --> 0:06:30.080 really appreciate it. Alison Williams, she covers the global investment banks, 0:06:30.320 --> 0:06:36.839 all the big banks for Bloomberg Intelligence. Anna, thanks so 0:06:36.880 --> 0:06:38.960 much for joining us here. Well, you are out front. 0:06:39.000 --> 0:06:41.919 We really appreciate being the beneficiaries of that called hang on. 0:06:42.000 --> 0:06:43.800 She also said there was one hundred percent chance of 0:06:43.800 --> 0:06:48.080 a recession. Really well, I might think I think this year, 0:06:48.080 --> 0:06:49.880 because it's not fair Anna to say there's a one 0:06:49.920 --> 0:06:52.000 hundred percent chance of a recession at any time in 0:06:52.040 --> 0:06:55.800 the future. Yeah, you've got you've got a time stamped 0:06:56.560 --> 0:06:59.600 and in fact, just to be clear. It's the model 0:07:00.080 --> 0:07:03.240 model that's as this one hundred percent recession. So our 0:07:03.279 --> 0:07:07.919 holistic judgment has been in between seventy to eighty percent 0:07:08.200 --> 0:07:11.600 chance of recession, and we were talking about twelve months ahead. 0:07:11.880 --> 0:07:15.320 So we built this model that we wanted to tell 0:07:15.640 --> 0:07:18.880 to tell us be able to send a signal whenever 0:07:19.360 --> 0:07:23.440 recession probability spike for each of this month for this year, 0:07:23.960 --> 0:07:27.520 and the model says that recession is with spiked to 0:07:27.720 --> 0:07:30.800 one hundred percent probability starting in September of this year. 0:07:30.880 --> 0:07:35.200 It's been sending a pretty steady signal for most guilt, 0:07:35.280 --> 0:07:38.560 so it's still saying that. It's still saying that. In fact, 0:07:38.800 --> 0:07:42.880 when we updated it using January's data, it is even 0:07:43.480 --> 0:07:46.440 even We also rely on a lot of other models 0:07:46.640 --> 0:07:49.800 to yield curves. We looked at various yield curves, including 0:07:49.800 --> 0:07:52.920 the one that Chair Powell likes to use, which is 0:07:52.920 --> 0:07:56.400 the four spreads between three months and eighteen months, that 0:07:56.600 --> 0:08:00.239 actually saw an increase in recession probability in January because 0:08:00.240 --> 0:08:04.000 all the yield curves in further in January. So so 0:08:04.520 --> 0:08:07.720 but our you know, overall judgment is that there's of 0:08:07.720 --> 0:08:10.760 course twenty to thirty percent chance at least of no 0:08:10.880 --> 0:08:13.800 recession this year, but as you said, it's just a 0:08:13.840 --> 0:08:16.240 matter of time. If there's not one this year, then 0:08:16.400 --> 0:08:18.600 it's just been pushed back to next year. Well, when 0:08:18.640 --> 0:08:22.960 you say your model, are you talking about chat GPT. No. 0:08:23.880 --> 0:08:27.080 In fact, if you asked chat GPT to predict anything, 0:08:27.240 --> 0:08:30.880 they like to take they like to not answer directly 0:08:30.880 --> 0:08:33.720 to say they're not a prediction model. On the one hand, 0:08:33.720 --> 0:08:35.680 and then on the other hand, Right, it's learning, you know, 0:08:35.679 --> 0:08:38.320 how to speak like an economist, and so you know, 0:08:38.440 --> 0:08:42.559 when we think about a recession scenario, you know, it's 0:08:42.559 --> 0:08:44.600 it's awful hard to do. If you take a look 0:08:44.600 --> 0:08:46.960 at the labor market there, how do you and we're 0:08:46.960 --> 0:08:50.120 going to get some more jobs data this week, how 0:08:50.120 --> 0:08:52.920 do you square up kind of this strong, really strong 0:08:53.280 --> 0:08:57.640 labor market and again concerns about the economy going forward. Yeah, 0:08:57.679 --> 0:09:00.160 so we looked deeply into this. First of all, the 0:09:00.360 --> 0:09:04.280 very strong January port. You have to remember that it's 0:09:04.320 --> 0:09:08.280 actually it's a story not about firms busily hiring left 0:09:08.320 --> 0:09:11.319 and right. It's more of a story of firms retaining workers. 0:09:11.360 --> 0:09:14.600 Because if you look at the non seasonally adjusted figures, 0:09:14.640 --> 0:09:17.760 it's all like decrease in hirings. It's just that the 0:09:17.840 --> 0:09:21.440 decrease in January is less than the decrease decrease in 0:09:21.440 --> 0:09:25.240 the typical January. And so a second we were looking 0:09:25.280 --> 0:09:29.360 at these war notices, which is that you know, the 0:09:29.480 --> 0:09:33.839 Labor Department in this country require employers to file these 0:09:34.000 --> 0:09:37.200 layoff warnings if they are going to layoff workers. And 0:09:37.400 --> 0:09:40.040 a lot of these high profile layoffs that we read 0:09:40.080 --> 0:09:44.520 is ADUs back in January, you know, Amazon, Google, Microsoft, Goldman. 0:09:44.559 --> 0:09:46.840 We know that tech Sectors has already laid off one 0:09:46.920 --> 0:09:49.880 hundred k at least of workers. How come it doesn't 0:09:49.920 --> 0:09:52.280 show up in the initial claims? While the answer is 0:09:52.320 --> 0:09:56.760 because most of these layoffs have not even become effective yet. 0:09:57.040 --> 0:10:00.720 By laws, employers have to give at least sixty day notice, 0:10:01.040 --> 0:10:03.280 and in New York, in fact, employers have to give 0:10:03.400 --> 0:10:06.920 ninety date notice. So many of these announced layoffs will 0:10:06.960 --> 0:10:10.600 only be translated to actual layouts where people will go 0:10:10.840 --> 0:10:16.280 file unemployment claims in March. So we're expecting that there 0:10:16.280 --> 0:10:20.360 will be some picked up in initial unemployment insurance claims. 0:10:20.400 --> 0:10:23.439 So how many if you get one hundred thousand layoffs, 0:10:24.559 --> 0:10:27.920 how much does that translate into in terms of claims 0:10:27.920 --> 0:10:32.319 for unemployment insurance because we've heard that only anecdotally, I 0:10:32.400 --> 0:10:35.800 should point out, but we've heard that people who get fired, 0:10:35.880 --> 0:10:39.760 especially from tech, have like two or three job choices 0:10:40.400 --> 0:10:44.719 where they can go instantly. Yeah, I've heard that too anecdotally, 0:10:45.480 --> 0:10:48.520 but I think data wise, so I think that an 0:10:48.559 --> 0:10:51.199 answer it will be less than the one hundred k 0:10:51.600 --> 0:10:55.400 that's an announced layoff. And furthermore, anecdotally, I've heard that 0:10:55.840 --> 0:11:00.920 tech workers might not be eligible for a claims because 0:11:00.920 --> 0:11:03.199 they are foreign or they haven't worked for more than 0:11:03.240 --> 0:11:06.599 six months. But I think the point is that the 0:11:07.480 --> 0:11:10.400 data we have been receiving just do not reflect the 0:11:10.480 --> 0:11:14.240 softening that had indeed happened in December and January, and 0:11:14.400 --> 0:11:16.559 we just have to wait for a couple of months 0:11:16.679 --> 0:11:19.839 to see and I think the FED is aware of this. 0:11:19.960 --> 0:11:24.160 And furthermore, there's the weather effect, and you know, we 0:11:24.280 --> 0:11:26.640 try to quantify it, and you know, there's also a 0:11:26.679 --> 0:11:29.640 fat paper that try to quantify it, and it turns 0:11:29.640 --> 0:11:33.640 out that weather tends to warm. Weather tends to boost 0:11:34.520 --> 0:11:37.680 employment in the months that the weather is warmer, and 0:11:37.760 --> 0:11:40.720 this effect is especially pronounced in spring. So if we 0:11:40.800 --> 0:11:43.960 have a very warm spring, then we're likely going to 0:11:44.000 --> 0:11:47.959 see a stronger employment too, but this effect is going 0:11:48.000 --> 0:11:51.160 to wash out throughout the year. So with seasonal adjustment 0:11:51.200 --> 0:11:54.880 the way that it works, we have stronger employment now 0:11:55.040 --> 0:11:58.600 seasonally adjusted if weather it's warmer, but later in the 0:11:58.679 --> 0:12:01.480 year it will be more negative than usual because of that. 0:12:01.679 --> 0:12:04.439 You know, many of the hiring was posed ford. So 0:12:04.880 --> 0:12:09.400 I also don't affect. I don't expect the strong employment 0:12:09.480 --> 0:12:12.920 to last. Furthermore, I don't want to, you know, go 0:12:12.960 --> 0:12:16.959 into weather forecasting, but you know, forecasting economics is part 0:12:17.000 --> 0:12:19.680 of my job and it is related to weather. And 0:12:20.000 --> 0:12:22.920 you know, the weather people are now saying that El 0:12:23.040 --> 0:12:27.480 Nino is likely going to start this summer. And so 0:12:27.600 --> 0:12:30.400 you know, we had a warm winter here in the 0:12:30.480 --> 0:12:33.920 in the East coast because of La Nina. But El 0:12:34.040 --> 0:12:37.160 Nino what it brings a lot of precipitation to the 0:12:37.200 --> 0:12:40.480 south and flooding of this, so we are we're probably 0:12:40.559 --> 0:12:42.600 looking at a second half of this year with a 0:12:42.720 --> 0:12:47.320 lot of you know, weather precipitation that could campen economic activity. 0:12:47.559 --> 0:12:51.000 So ANA given that backdrop, you know, now we have 0:12:51.040 --> 0:12:54.080 in the marketplace people looking at you know, the Fed 0:12:54.120 --> 0:12:57.440 walks saying fifty basis points might be back on the 0:12:57.480 --> 0:13:01.400 table at perhaps the next meeting. Is that something you 0:13:01.440 --> 0:13:05.120 guys are looking for, that's not our baseline, And I 0:13:05.480 --> 0:13:08.480 expect that Powell will say that everything was on the table. 0:13:08.559 --> 0:13:11.160 They certainly don't want to roll it out if we 0:13:11.240 --> 0:13:14.240 do have a very very strong HEBI report and a 0:13:14.559 --> 0:13:17.600 jobs report, say, I mean, of course, if a jobs 0:13:17.679 --> 0:13:20.960 report of four hundred k was Friday, or a CPI 0:13:21.120 --> 0:13:26.520 print of core of point six percent, would I think 0:13:26.559 --> 0:13:29.679 that would put fifty basis point on the tables as 0:13:29.679 --> 0:13:32.680 a baseline. But right now twenty five basis is still 0:13:32.760 --> 0:13:35.720 our baseline. But I think Powell will just leave the 0:13:35.800 --> 0:13:39.880 door open for anything in his testimony this week. What 0:13:39.960 --> 0:13:42.720 do you think about long and variable lags? You know, 0:13:42.800 --> 0:13:45.439 how long are we talking about? I know Danny Blanchflower 0:13:46.559 --> 0:13:49.200 I think, in commentary to the Bank of England said 0:13:49.679 --> 0:13:54.440 he works typically on eighteen to twenty four months. Is 0:13:54.480 --> 0:13:59.000 that still accepted as how long and variable? How long 0:13:59.080 --> 0:14:02.560 the long and variables are? Yeah, this is definitely the 0:14:02.640 --> 0:14:05.760 debate happening within the central length circle. If you believe 0:14:05.800 --> 0:14:08.560 that the lags are short, and I think there are 0:14:08.600 --> 0:14:11.600 evidence to show that the financial conditions are now the 0:14:11.679 --> 0:14:14.760 lacks of financial conditions very short as a three months 0:14:14.800 --> 0:14:17.320 only three to six months. Then it means that the 0:14:17.400 --> 0:14:21.920 tightening from the past FED hikes has already peaked, and 0:14:22.040 --> 0:14:26.040 that would be a case for further more longer path, 0:14:26.320 --> 0:14:29.560 steeper path of FED rate heights going forward. But I 0:14:29.600 --> 0:14:32.160 also think that there's evidence that there's some part of 0:14:32.600 --> 0:14:35.840 monetary policy that has very long legs, and that has 0:14:35.880 --> 0:14:39.880 to do with like equities and dollars, those have twelve 0:14:40.000 --> 0:14:43.720 months legs still, but certainly the financial conditions part have 0:14:43.840 --> 0:14:46.800 a very short leg. All right, And I thank you 0:14:46.800 --> 0:14:50.160 so much for joining us. Always appreciate getting your thoughts 0:14:52.880 --> 0:14:55.920 I want to talk about to me, this China story 0:14:55.960 --> 0:15:00.600 has really captured my has really fascinated me my attention 0:15:01.320 --> 0:15:03.400 this morning and last night as I was reading it. 0:15:03.800 --> 0:15:08.120 The disappointment with economists about their five percent growth target 0:15:08.160 --> 0:15:12.040 I find interesting, not only because you know we would 0:15:12.080 --> 0:15:14.520 be jealous of a five percent growth target, but also 0:15:15.480 --> 0:15:18.440 I think it means more than just a slowdown in 0:15:19.040 --> 0:15:22.320 your global growth expectations. It means also a slow down 0:15:22.360 --> 0:15:25.920 your inflation expectations. We haven't seen the reopening provide US 0:15:25.960 --> 0:15:33.440 with boosted prices for commodities, metals, oils, etc. Yet I 0:15:33.480 --> 0:15:35.520 want to bring in Everett Millman. He's the chief market 0:15:35.560 --> 0:15:40.000 analyst at Gainesville Coins. We talked to him about obviously 0:15:40.480 --> 0:15:44.520 silver and gold coins and virtual digital coins as well. 0:15:44.560 --> 0:15:48.760 But Everett, just in terms of the of the commodities 0:15:48.880 --> 0:15:53.400 impact of the reopening of China, in terms of you know, 0:15:53.520 --> 0:15:55.960 demand from the Chinese after the end of the COVID 0:15:56.080 --> 0:15:59.200 zero policy, have you seen a big move in prices 0:15:59.240 --> 0:16:04.600 across the metal that you watch, Not yet actually, And 0:16:04.680 --> 0:16:06.600 I think that you've kind of hit the nail on 0:16:06.680 --> 0:16:11.040 the head with the uncertainty surrounding China's reopening. We've also 0:16:11.120 --> 0:16:14.480 seen some pretty big intra day volatility for crude oil 0:16:14.520 --> 0:16:17.600 prices and the US dollar. So all of that does 0:16:17.720 --> 0:16:20.880 weigh on the commodity space and it simply makes the 0:16:21.000 --> 0:16:24.440 landscape more uncertain and more difficult for producers to kind 0:16:24.440 --> 0:16:26.920 of plan ahead. So I think all of that is 0:16:26.920 --> 0:16:29.320 that play here. How important is that part of the 0:16:29.320 --> 0:16:31.680 world when it comes to gold? For example, I know 0:16:31.800 --> 0:16:35.680 India is huge, right, what about the Chinese? Did they 0:16:35.680 --> 0:16:40.920 contribute to price moves in gold, both for industrial purposes 0:16:41.160 --> 0:16:47.640 or for you know, consumer purposes? Certainly, so China not 0:16:47.720 --> 0:16:51.080 only has a major over the counter gold market that 0:16:51.240 --> 0:16:54.280 mainly is dealing in gold jewelry, but it also with 0:16:54.360 --> 0:16:58.800 the Shanghai Gold Exchange, does exert more pricing pressure over 0:16:58.840 --> 0:17:02.040 the gold market than it has in the past, and 0:17:02.080 --> 0:17:05.960 we do often see kind of seasonal flows that when 0:17:06.080 --> 0:17:09.520 prices are falling in the gold market, China steps in 0:17:09.560 --> 0:17:12.720 as a major buyer, not just official purchases, not just 0:17:12.760 --> 0:17:15.320 the government or the People's Bank of China, but also 0:17:15.400 --> 0:17:18.879 just the general public. So as time has gone on, 0:17:19.119 --> 0:17:21.480 we've seen that China has more and more of an 0:17:21.480 --> 0:17:24.200 influence over the price of gold, and I do suspect 0:17:24.560 --> 0:17:26.639 that's one of the reasons we've seen the gold price 0:17:26.720 --> 0:17:30.960 hold up even though broader markets have offered better opportunities 0:17:30.960 --> 0:17:33.720 as gold has kind of trended sideways in twenty twenty three. 0:17:34.480 --> 0:17:36.600 So Everard, I'm looking at global commodity prices here on 0:17:36.640 --> 0:17:41.440 the Bloomberg terminal GLCO. I look at silver really gets 0:17:41.440 --> 0:17:44.000 my attension off eleven and a half percent year today. 0:17:44.040 --> 0:17:47.560 What's going on in the silver market, m yea. And 0:17:47.640 --> 0:17:50.679 not only is silver down, but in terms of like 0:17:50.720 --> 0:17:54.440 the broader precious metals complex, it's usually a somewhat bearish 0:17:54.480 --> 0:17:57.480 sign if the silver price is lagging gold, and that's 0:17:57.560 --> 0:18:00.879 essentially what we've been seeing lately. As far as the 0:18:01.400 --> 0:18:05.240 weakness we've seen in silver, there's usually a strong floor 0:18:05.359 --> 0:18:08.720 beneath the silver price based on the all in sustaining 0:18:08.800 --> 0:18:11.720 costs kind of the cost of production from silver miners. 0:18:12.119 --> 0:18:15.399 Right now, that's around twenty dollars and ounts, just below 0:18:16.000 --> 0:18:18.760 where we've been trading. But I think an interesting thing 0:18:18.800 --> 0:18:21.320 to keep in mind is that most silver that is 0:18:21.359 --> 0:18:25.479 produced each year doesn't come strictly from silver mines. It 0:18:25.560 --> 0:18:29.320 is produced as a byproduct of other mining operations, mainly nickel. 0:18:29.680 --> 0:18:32.159 So in those cases, the all in sustaining cost for 0:18:32.160 --> 0:18:34.720 those miners is actually it's far lower. It's closer to 0:18:34.720 --> 0:18:37.960 about fourteen dollars announced. So I would not be shocked 0:18:37.960 --> 0:18:40.600 to see if there is another sell off in silver, 0:18:41.000 --> 0:18:44.080 that we could see prices fall back near that cost 0:18:44.119 --> 0:18:47.320 of production, which I think is below what most market 0:18:47.359 --> 0:18:51.680 participants are actually expecting. Is there still a concern that 0:18:51.800 --> 0:18:54.760 some of these markets are manipulated? I don't need to. 0:18:55.119 --> 0:18:57.399 I don't mean to drag up some kind of zero 0:18:57.440 --> 0:19:03.040 hedgestyle conspiracy theories, but in silver, I mean it was true, right, 0:19:03.080 --> 0:19:08.600 The Hunt Brothers got busted, and there are major Wall 0:19:08.600 --> 0:19:14.400 Street banks that have settled on these kind of manipulation probes. 0:19:15.080 --> 0:19:17.959 Is there concern among traders that there's still a problem 0:19:18.080 --> 0:19:22.120 with the silver market or others? I would have to 0:19:22.119 --> 0:19:24.959 say that, you know, where there's smoke, there's fire in 0:19:25.000 --> 0:19:28.520 these kinds of cases. And although you know, the credibility 0:19:28.560 --> 0:19:31.280 of such claims as obviously dubious, as you pointed out, 0:19:32.400 --> 0:19:35.040 in the same way that foreign exchange markets like forex 0:19:35.080 --> 0:19:39.840 trading of currencies has some of those problems, I think 0:19:39.880 --> 0:19:43.119 the same is true of silver and gold that because 0:19:43.119 --> 0:19:46.640 it functions sort of like money, you do see manipulative 0:19:46.880 --> 0:19:52.320 trading behavior that although on ethical it certainly it doesn't 0:19:52.440 --> 0:19:54.959 rise for the level of criminality. All of those cases 0:19:55.000 --> 0:19:58.440 you mentioned have been settled out of court, so it's 0:19:58.480 --> 0:20:02.200 it's at least a narrative that concerned some investors and 0:20:02.560 --> 0:20:05.280 kind of pushed them away from getting involved in the 0:20:05.320 --> 0:20:08.040 golden silver markets. But um, I think the best way 0:20:08.080 --> 0:20:10.320 to think about it is that it would be very 0:20:10.400 --> 0:20:13.960 similar with really any any currency trading. Um you can 0:20:14.000 --> 0:20:18.000 manipulate currencies up and down relative to the trading volumes 0:20:18.000 --> 0:20:23.080 and similar things happen in golden sils, even bitcoin. Even bitcoin, 0:20:23.600 --> 0:20:27.840 I think perhaps of the highest probability that that kind 0:20:27.840 --> 0:20:30.800 of thing happens. And we need to keep in mind 0:20:31.000 --> 0:20:34.520 with the fallout from the STX scandal, traders on those 0:20:34.640 --> 0:20:38.520 on those crypto exchanges were entering into contracts for for 0:20:38.560 --> 0:20:42.160 bitcoin trades when there was no bitcoin being custodied. Um, 0:20:42.320 --> 0:20:45.560 so you can call that really supply manipulation of bitcoin 0:20:45.600 --> 0:20:49.120 as well. What if we step back, Everett, what's kind 0:20:49.119 --> 0:20:55.160 of the big global commodities call of the moment right now? Well, 0:20:55.200 --> 0:20:59.200 I think it's the call right now is probably sideways 0:20:59.400 --> 0:21:01.760 until the end to the year because it's going to 0:21:01.840 --> 0:21:05.680 be very dependent on the reaction function from the Fed 0:21:05.680 --> 0:21:09.800 and central banks. Higher interest rates they're usually not great 0:21:09.800 --> 0:21:12.720 for gold, but they do tend to drive copper and 0:21:12.800 --> 0:21:16.280 industrial commodities higher. So I think everything is going to 0:21:16.359 --> 0:21:19.960 depend on central bank policy. Do we get higher interest 0:21:20.080 --> 0:21:23.760 rates for longer or is that you know, once expected 0:21:23.800 --> 0:21:26.760 pivot going to come sometime in the second half of 0:21:26.760 --> 0:21:29.760 this year or perhaps next year. It's all about interest 0:21:29.840 --> 0:21:33.320 rates right now, and the gold call, I mean, as 0:21:33.359 --> 0:21:36.960 we head into what some expect to be a recession, 0:21:37.840 --> 0:21:41.560 do you want to buy gold into that? I would 0:21:41.600 --> 0:21:45.520 say so, but perhaps the gold bowls shouldn't get too excited. 0:21:45.960 --> 0:21:49.320 Gold will be kind of caught between those two forces. 0:21:49.440 --> 0:21:52.400 Of it yields nothing, and we want to protect ourselves 0:21:52.400 --> 0:21:57.000 in case the world collapses, correct, correct, and preserve preserve 0:21:57.040 --> 0:22:00.040 purchasing power and in the event that, you know, a 0:22:00.080 --> 0:22:05.000 local currency collapse. So just thirty seconds bitcoin, Yeah, you're 0:22:05.080 --> 0:22:09.119 nay at this point. Right now, I think Bitcoin is 0:22:09.320 --> 0:22:12.840 at least looking better than the other cryptos, but of 0:22:12.880 --> 0:22:16.359 course regulation and the amount of bad press that the 0:22:16.359 --> 0:22:21.080 crypto space gets generally, I think it kind of ironically 0:22:21.080 --> 0:22:25.199 it boosts bitcoins appeal, if only because it is the 0:22:25.240 --> 0:22:28.720 one kind of most noteworthier and most trusted crypto. But 0:22:28.760 --> 0:22:31.119 the rest of the space I think is obviously in 0:22:31.359 --> 0:22:33.920 pretty bad shape right now. All right, good stuff. Everett Milman, 0:22:34.080 --> 0:22:40.040 chief market analyst for Gainesville Coins. Want to get to 0:22:40.080 --> 0:22:42.119 our next guest, Dan sam And. He's a partner and 0:22:42.160 --> 0:22:45.240 analyst at New Street Research. He covers the USC He 0:22:45.320 --> 0:22:47.720 leads to the US Internet team there. He recently joined 0:22:48.320 --> 0:22:50.600 New Street. Before they had a long career at what 0:22:50.720 --> 0:22:53.080 I know is Bank of Montreal. The market now knows 0:22:53.200 --> 0:22:56.119 is BEMO Capital Markets. And Dan's been covering the Internet 0:22:56.160 --> 0:22:58.960 space since really the inception of the Internet. And Dan, 0:22:59.040 --> 0:23:01.720 thanks so much for taken a time to join us. UM. 0:23:02.000 --> 0:23:04.720 I know you've recently ramped up coverage once again here 0:23:04.760 --> 0:23:07.359 in New Streets. What's your thirty thousand foot call for 0:23:07.440 --> 0:23:10.680 these Internet names here? They had such a great run, 0:23:10.800 --> 0:23:13.280 you know, over the last decade, but now there's definitely 0:23:13.280 --> 0:23:16.560 some some headwinds for the sector and for some individual names. 0:23:16.600 --> 0:23:20.159 They love to get your perspective. Yeah, no, thanks for 0:23:20.160 --> 0:23:22.639 having me on, guys. I'd say thirty thousand for view. 0:23:22.680 --> 0:23:25.080 So we launched our coverage New Street right here at 0:23:25.080 --> 0:23:28.960 the beginning of the year. The January third was published date. 0:23:29.160 --> 0:23:32.800 And you know, look at our title of our original 0:23:32.840 --> 0:23:37.040 industry report was borrowing from the famous Wren Buffet line, right, 0:23:37.040 --> 0:23:40.800