WEBVTT - State Of U.S. Infrastructure Demands Bold Action 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 0:00:15.640 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.400 at Bloomberg dot com slash podcast. Today, President Biden is 0:00:23.520 --> 0:00:27.000 meeting in the White House with congressional leaders from both 0:00:27.000 --> 0:00:29.760 parties to talk about legislation. What can they get done. 0:00:29.800 --> 0:00:33.040 One of the key topics, of course, is infrastructure. So 0:00:33.520 --> 0:00:35.560 is a perfect time to chat with our next guest, 0:00:35.760 --> 0:00:39.280 Ed Mortimer, he's a Vice president for Transportation and Infrastructure 0:00:39.320 --> 0:00:42.239 at the US Chamber of Commerce. And Greg Reagan, he's 0:00:42.240 --> 0:00:44.640 a president of Transportation and Trades Department at the A 0:00:44.800 --> 0:00:47.479 f l C I o U. They both join us 0:00:47.479 --> 0:00:50.800 here today to talk about infrastructure. And let's start with 0:00:50.920 --> 0:00:53.880 you here. You know, from the Chamber of Commerce's perspective, 0:00:54.360 --> 0:00:58.279 what do you think or how much should UH we 0:00:58.360 --> 0:01:02.760 allocate this year in this upcoming plan to infrastructure? What's 0:01:02.800 --> 0:01:08.399 the number in your perspective? Also, thanks for the opportunity 0:01:08.480 --> 0:01:12.720 to speak from the business community's perspective. This is a 0:01:12.760 --> 0:01:16.840 critical issue as we're getting through a pandemic. UM, we 0:01:16.920 --> 0:01:20.880 need to have a federal vision and investment to build 0:01:20.880 --> 0:01:24.720 twenty century infrastructure. And so we're teamed with my colleague 0:01:24.760 --> 0:01:26.320 at the n f l C i OH to say 0:01:26.360 --> 0:01:29.000 in action is not an option UM. And we look 0:01:29.000 --> 0:01:31.840 at infrastructure in in a in a in a broad sense. 0:01:31.880 --> 0:01:36.080 We look at our physical infrastructure, focusing on our transportation networks, 0:01:36.080 --> 0:01:41.080 our water systems, woral broadband, our energy grid UM. And 0:01:41.120 --> 0:01:43.920 so you know the investments that need to be made. 0:01:44.080 --> 0:01:46.280 We need to not just fix what we currently have, 0:01:46.840 --> 0:01:49.440 but we need to know with autonomous vehicles and drones, 0:01:49.840 --> 0:01:52.560 we need to modernize. And so you know, the numbers 0:01:52.600 --> 0:01:55.639 are high, but I will tell your listeners the numbers 0:01:55.680 --> 0:01:58.920 of doing nothing are pretty high. To the average American 0:01:58.960 --> 0:02:03.640 loses dollars a year due to inadequate infrastructure. Currently, our 0:02:03.680 --> 0:02:09.760 economy loses seven billion dollars lost productivity. So doing nothing 0:02:10.000 --> 0:02:13.280 actually cost us more than making the investments necessary to 0:02:13.320 --> 0:02:16.520 provide long term economic growth for our economy and modernizing 0:02:16.520 --> 0:02:20.680 our infrastructure. Why has you know, I've lived obviously for 0:02:20.720 --> 0:02:24.320 decades in America, and I've lived UM for a little 0:02:24.320 --> 0:02:29.240 over a decade here in Germany altogether, both economies have 0:02:29.680 --> 0:02:34.240 crumbling infrastructure, and these are the leading, you know, industrial 0:02:34.280 --> 0:02:37.560 economies of the world. Why have we let it go 0:02:37.880 --> 0:02:42.679 for so long? Greg, I think we've just rested on 0:02:42.720 --> 0:02:45.240 our laurels. We are, you know, we built it up. 0:02:45.800 --> 0:02:48.560 We made the massive investments to build the interstate highway system, 0:02:48.639 --> 0:02:51.880 to to build out Amtrak, to do UM, to make 0:02:51.919 --> 0:02:53.639 these big things, and then I think everyone said, well, 0:02:53.680 --> 0:02:56.760 but job is done here. Um. I think there was 0:02:56.800 --> 0:02:59.600 an austerity period in our in our government that that 0:03:00.080 --> 0:03:03.720 is hesitant to make any big investments. And frankly, we've 0:03:03.720 --> 0:03:07.800 waited too long. Everything has and and unfortunately that's the 0:03:07.800 --> 0:03:11.080 way sometimes government works, as you wait until wait, until 0:03:11.080 --> 0:03:13.120 it's it's right in your face, before the problem is 0:03:13.160 --> 0:03:14.720 right in your face, before you have to solve it. 0:03:14.760 --> 0:03:17.760 But I think we're past that point now and we 0:03:17.800 --> 0:03:20.639 need to have the leadership and have the federal investments 0:03:20.680 --> 0:03:23.880 that can can rebuild our infrastructure and make us a 0:03:23.880 --> 0:03:28.400 modern competitive country. Again, Greg, how much of infrastructure spending 0:03:28.520 --> 0:03:32.160 generally do you think should be some type of public 0:03:32.280 --> 0:03:35.600 private effort as opposed to simply the government coming in 0:03:37.480 --> 0:03:40.760 we think there is a role for P three's public 0:03:40.760 --> 0:03:44.680 private partnerships in our infrastructure. You know, in general, I 0:03:44.680 --> 0:03:48.119 don't think that is the primary solution here. I think 0:03:48.160 --> 0:03:51.880 we need big federal spending UM, and the states and 0:03:51.920 --> 0:03:55.960 local governments will meet, oftentimes sharing that cost as well. Um. 0:03:56.040 --> 0:03:58.840 There are some places where P threes makes sense, UM, 0:03:58.920 --> 0:04:01.200 but I think that is for US. It's a relatively 0:04:01.240 --> 0:04:05.560 small part of the overall pie. And you mentioned, UM, 0:04:05.560 --> 0:04:09.560 this isn't just you know, the plane vanilla infrastructure that 0:04:09.640 --> 0:04:15.720 we that we think of, um, roads, bridges, ports, airports, 0:04:15.720 --> 0:04:20.680 But the bill that the President has proposed is also 0:04:20.760 --> 0:04:28.080 about childcare and nutrition and you know, broadband deployment. How 0:04:28.080 --> 0:04:34.840 important is that other stuff to the US infrastructure. So 0:04:34.880 --> 0:04:36.560 I think that's kind of what the debate is going 0:04:36.600 --> 0:04:39.720 on right now. As you mentioned, President Biden put up 0:04:39.720 --> 0:04:43.880 the American Jobs Plan, which included a lot of the 0:04:43.920 --> 0:04:46.919 care economy, and we can again from the business community, 0:04:47.120 --> 0:04:49.320 we think those are important and they need to be addressed. 0:04:49.680 --> 0:04:52.159 But I think we're trying to get bipartisan consensus so 0:04:52.200 --> 0:04:54.280 we can actually get a bill to the President's desk 0:04:54.320 --> 0:04:57.200 this year. And if you look at the Republican counterproposal 0:04:57.240 --> 0:04:59.400 that was put up by a Senator Shelling Moore Capital. 0:05:00.080 --> 0:05:02.880 There does appear to be some bipartisan consensus that the 0:05:02.960 --> 0:05:06.000 physical infrastructure is something that can be addressed in the 0:05:06.040 --> 0:05:09.320 federal legislation this year. We may be able to tackle 0:05:09.400 --> 0:05:11.920 some of those other issues down the road, but let 0:05:12.040 --> 0:05:14.320 our view is let's get what can get done this 0:05:14.400 --> 0:05:17.080 year now, and so that would be more focused on 0:05:17.200 --> 0:05:20.600 the physical infrastructure, and then let's continue that conversation and 0:05:20.640 --> 0:05:23.159 see if there are other ways that we can address 0:05:23.240 --> 0:05:25.240 some of the other issues that the President has brought 0:05:25.320 --> 0:05:29.520 up through the American Jobs Program. Greg, I guess from 0:05:29.600 --> 0:05:31.680 labor's perspective, what do you think of the top two 0:05:31.760 --> 0:05:36.200 or three items on your wish list that you'd like 0:05:36.279 --> 0:05:39.640 to give to President Biden In Leaders of Congress here, 0:05:41.240 --> 0:05:43.960 we would like to see what you know, the American's 0:05:44.040 --> 0:05:47.320 Jobs planned. However, how our Congress ends up finally addressing that. 0:05:47.560 --> 0:05:50.120 But the key part for that is is the big 0:05:50.279 --> 0:05:54.680 upfront investment in our in our various transportation systems, um 0:05:54.720 --> 0:05:57.760 you know, a stimulative type of investment that will sort 0:05:57.760 --> 0:06:00.800 of reset the standard for our country allow us to 0:06:00.839 --> 0:06:03.480 get some of the big projects done like Gateway for instance, 0:06:03.560 --> 0:06:08.039 or the big people I mean gate Gateway. It's insane 0:06:08.040 --> 0:06:10.080 that we haven't done that. We're talking about over a 0:06:10.120 --> 0:06:14.640 hundred year old tunnels, um that are I go through them. 0:06:14.720 --> 0:06:17.080 I go through them twice a day, and I kind 0:06:17.080 --> 0:06:19.360 of have my fingers cross every time we go into 0:06:19.400 --> 0:06:23.280 the tunnels. It's it's it's amazing. And and the fact 0:06:23.279 --> 0:06:26.640 that we haven't found the you know, in the we're 0:06:27.400 --> 0:06:30.800 our GDP UH is supported by that region and we 0:06:30.920 --> 0:06:33.200 can't six hundred year old tunnels, it shows that our 0:06:33.240 --> 0:06:35.240 priorities are kind of out of whack here. And if 0:06:35.240 --> 0:06:36.960 you go down in Baltimore the B and P Tunnel, 0:06:37.000 --> 0:06:41.040 that one was built during during US grants first term 0:06:41.080 --> 0:06:44.080 as president, and that has that hasn't been been addressed. 0:06:44.120 --> 0:06:46.080 So you know, but we need the big money from 0:06:46.080 --> 0:06:48.160 the federal leadership to get from the federal government to 0:06:48.200 --> 0:06:50.200 get all that stuff done. And then you know, when 0:06:50.240 --> 0:06:52.800 you look at those big projects, they're going to succeed 0:06:52.839 --> 0:06:56.240 when a lot of the local spending, whether it be transit, 0:06:56.279 --> 0:06:59.440 whether it be other rail projects, highways and bridges, airports, 0:06:59.760 --> 0:07:02.840 all of these things need to be upgraded, and they 0:07:02.880 --> 0:07:04.839 they're going to rely on each other to be successful 0:07:04.839 --> 0:07:08.400 down the road. All right, and this is UH. This 0:07:08.440 --> 0:07:12.120 week is designated United for Infrastructure Week. It's actually the 0:07:12.240 --> 0:07:15.080 ninth annual, but I have to admit the first time 0:07:15.120 --> 0:07:17.600 I've heard of it. What what does that campaign hoped 0:07:17.600 --> 0:07:21.320 to then accomplish? Paul, So, I think you know you 0:07:21.360 --> 0:07:23.720 mentioned this is our ninth year, and so you know 0:07:23.760 --> 0:07:26.480 we're glad to see it's taken a nine years, but 0:07:26.520 --> 0:07:29.240 we're now at the top of the federal agenda UM 0:07:29.280 --> 0:07:32.920 and this year our our theme is U Lead with 0:07:32.960 --> 0:07:37.280 Infrastructure UM. In Action on infrastructure this year is not 0:07:37.400 --> 0:07:40.240 an option from our perspective, and we truly want to 0:07:40.240 --> 0:07:44.480 see this federal legislation bipartisan solutions that will provide a 0:07:44.520 --> 0:07:48.360 long term blueprint for infrastructure moving forward. Ed Mortimer and 0:07:48.400 --> 0:07:55.680 Greg Reagan, thank you very much. This is Bloomberg. Now, 0:07:55.680 --> 0:07:57.840 as fall said, we're gonna bring in Brian Smallock right now. 0:07:57.840 --> 0:08:00.560 He is a principal and portfolio manage. You're at Hood 0:08:00.640 --> 0:08:03.640 river Hood River Capital Management. They have three and a 0:08:03.640 --> 0:08:08.520 half billion dollars under management. Brian, UM, let me first 0:08:08.560 --> 0:08:11.720 get your reaction to the inflation print. It was twice 0:08:11.760 --> 0:08:16.200 as high as the highest UM the highest forecast I 0:08:16.200 --> 0:08:18.680 guess in our survey, and if you look at the 0:08:18.680 --> 0:08:25.120 core number, the biggest game since Yeah, the inflation is 0:08:25.120 --> 0:08:27.840 definitely ticking up. When we talked to our companies, you 0:08:27.880 --> 0:08:32.080 see it across the board. It's not that surprising to us, 0:08:32.320 --> 0:08:36.319 given the amount of money that's been printed, how expansionary 0:08:36.320 --> 0:08:39.640 money policy has been, and the fact that we're paying 0:08:39.720 --> 0:08:44.400 people to not work. So you're seeing you're seeing wage 0:08:44.400 --> 0:08:47.640 pressure as the economy is coming back with a vengeance. 0:08:47.679 --> 0:08:52.840 So that combination isn't great. I think it's going to persist. 0:08:52.880 --> 0:08:55.320 And you have to take an account whenever you're looking 0:08:55.320 --> 0:08:58.679 at any sort of stock, can they manage cost pressures 0:08:58.760 --> 0:09:01.120 or Martin is gonna hold up? And as the top 0:09:01.200 --> 0:09:06.559 line benefit of reopening outweigh the negatives of cost pressure 0:09:06.600 --> 0:09:11.880 coming from inflation. Brian, You guys, uh, they're managing. Focus 0:09:11.920 --> 0:09:14.760 on small cap stocks, give us a sense of kind 0:09:14.760 --> 0:09:17.479 of how they've been performing kind of throughout this pandemic 0:09:17.520 --> 0:09:20.040 and kind of what what's your view of that kind 0:09:20.080 --> 0:09:23.600 of that part of the market right now. So small 0:09:23.640 --> 0:09:29.360 cap has been extremely strong since the pandemic has broken. 0:09:29.600 --> 0:09:32.840 There's been multiple reasons for that for that to happen. 0:09:33.800 --> 0:09:38.839 Small cap companies have more domestic focus, so the top 0:09:38.880 --> 0:09:41.480 line is held in better. Small cap companies are also 0:09:41.960 --> 0:09:46.160 more nimbles, so they can adjust their business models um. 0:09:46.400 --> 0:09:49.960 And and they don't have as much currency exposure, so 0:09:49.960 --> 0:09:52.760 so that's that's so that's a good thing too. Um. 0:09:52.840 --> 0:09:55.000 If you look on an absolute basis, the Restle two 0:09:55.000 --> 0:09:59.440 dozen growth index last year was up almost so it's huge. 0:10:00.240 --> 0:10:02.560 This year, it's not up as much, but you've seen 0:10:02.559 --> 0:10:07.280 a big shift front within the index and within small 0:10:07.320 --> 0:10:09.800 cap in general, from growth to value. So it's just 0:10:09.880 --> 0:10:12.520 been more important over the last four or five months 0:10:12.520 --> 0:10:14.480 to pay attention to evaluation, which it's obviously something that 0:10:14.520 --> 0:10:16.839 we focused on up the river. Will small caps get 0:10:16.920 --> 0:10:21.520 hit harder by wage pressure? I mean we talk about 0:10:22.240 --> 0:10:23.920 people not wanting to come back to work if they're 0:10:23.920 --> 0:10:26.760 getting paid to stay home essentially, and Paul and I 0:10:26.840 --> 0:10:30.600 hear this from you know, hotel operators, restaurant owners, et cetera. 0:10:30.840 --> 0:10:33.720 But the bottom line is, um, if you pay them more, 0:10:33.760 --> 0:10:36.079 they'll come in right, So, uh, is that going to 0:10:36.200 --> 0:10:40.199 hit smaller businesses harder? I think for the most part 0:10:40.280 --> 0:10:43.520 they'll laeable to manage through it. And hopever, we can 0:10:43.520 --> 0:10:45.720 do it on a case by case basis. You just 0:10:45.760 --> 0:10:49.040 want to be in businesses that have pricing power and 0:10:49.080 --> 0:10:54.320 can put through cost pressures in a relatively time timely fashion. 0:10:54.480 --> 0:10:57.400 So like, for example, if you're a banker insurance company, 0:10:57.400 --> 0:11:00.440 you can do that pretty quickly. Um, if you're selling actresses, 0:11:00.480 --> 0:11:03.120 you can take up the price your mattresses if demand 0:11:03.120 --> 0:11:06.200 exceeds supply. So for the most part, I think it's okay, 0:11:06.240 --> 0:11:08.040 but they're going to be surprises and you have to 0:11:08.080 --> 0:11:11.280 be able to manage it. And that's that's why in 0:11:11.360 --> 0:11:14.440 small cap it makes sense to use an active manager 0:11:14.480 --> 0:11:17.280 because it's inefficient. You can figure out what businesses are 0:11:17.280 --> 0:11:21.240 gonna be able to adjust to the dynamic inflationary environment. So, Brian, 0:11:21.280 --> 0:11:23.720 I know you guys are overweight financials. Talk to us 0:11:23.720 --> 0:11:27.000 about some of those regional banks. Why you like that 0:11:27.160 --> 0:11:30.440 part of the market and presumably seeping in yield curves 0:11:30.480 --> 0:11:33.800 to their benefit. And presumably I guess a reopening trade 0:11:33.800 --> 0:11:35.440 to the economy has gotta be good for their their 0:11:35.480 --> 0:11:39.520 loan book. Yeah, exactly, so, so you have loan growth 0:11:39.520 --> 0:11:42.199 that's going to be accelerating in margins which are basically 0:11:42.320 --> 0:11:45.120 at all time lows because the yield curve has been 0:11:45.240 --> 0:11:48.559 terrible for their business, and now if that improves, you 0:11:48.559 --> 0:11:52.160 can see a dramatic uptick in their margins and acceleration 0:11:52.240 --> 0:11:56.320 their loan growth. And the stocks are relatively inexpensive. When 0:11:56.320 --> 0:11:57.719 we look at the rest of the market, you can 0:11:57.720 --> 0:12:00.800 easily find a regional bank that trade anywhere from ten 0:12:00.880 --> 0:12:04.560 to thirteen times earnings. Compare that to your typical tech 0:12:04.640 --> 0:12:07.920 stock or biotech stock or software company. It's a lot 0:12:07.960 --> 0:12:11.040 more expensive. Those stocks were run up during the pandemic, 0:12:11.480 --> 0:12:12.839 and that's part of the reason why you've seen this 0:12:12.920 --> 0:12:16.600 trade from from growth to value. It's because you're seeing 0:12:16.600 --> 0:12:20.080 relative value of companies like regional banks. They are seeing 0:12:20.080 --> 0:12:23.000 their business has improved and they look absolutely cheap. Then 0:12:23.000 --> 0:12:26.720 your pick is Western Alliance. We like Western Alliance. We 0:12:26.720 --> 0:12:28.560 also in Try State, which is another one the reason 0:12:28.600 --> 0:12:30.400 why I like Western Alliance that they've had a good 0:12:30.480 --> 0:12:33.719 loan growth franchise or extended period of time. They grow 0:12:33.760 --> 0:12:36.440 their loans north of teen percent. They have a best 0:12:36.480 --> 0:12:41.360 in class efficiency ratio covering it around. They just did 0:12:41.400 --> 0:12:43.920 a really acreative deal which we think is over thirty 0:12:44.240 --> 0:12:48.000 of creative earnings called the Mara Home. So the earnings 0:12:48.120 --> 0:12:51.160 estimates need to move up fairly substantially for next year, 0:12:51.200 --> 0:12:53.600 and it's cheap and around eleven tents earnings. You also 0:12:53.640 --> 0:12:56.199 like Purple. You mentioned mattress sellers, and I thought, what's that? 0:12:56.240 --> 0:12:59.439 Where's that coming from? But I see that you like Purple, 0:12:59.480 --> 0:13:01.199 and I know they are a few Bloomberg anchors who 0:13:01.200 --> 0:13:05.520 sleep on those mattresses. Yeah, so the smallest, just about 0:13:05.559 --> 0:13:09.960 three of them. Uh, And we like it. We we 0:13:10.080 --> 0:13:13.480 like the product a lot. Uh. It's a lot better 0:13:13.559 --> 0:13:16.760 than a than a phone mathress, which which tends to 0:13:16.960 --> 0:13:20.280 sleep a little hot and loses the shape over time. 0:13:21.120 --> 0:13:25.560 Us the only one that has a special polymer. And 0:13:25.600 --> 0:13:27.559 so so it's so so there's actually no prusch. You 0:13:27.559 --> 0:13:33.160 cantually put an egg under you soft soft related anyway. 0:13:33.240 --> 0:13:37.359 So so so Purple is stealing ship. They just prenounced 0:13:37.520 --> 0:13:40.360 the quarter yesterday to beat on top line, and more importantly, 0:13:40.360 --> 0:13:42.640 they beat on margins. All right, refinitely give it there, 0:13:42.640 --> 0:13:44.280 But that's a good name. We will do some more 0:13:44.280 --> 0:13:47.040 digging there. We'll chat with you coming up soon. Brian Smaller, 0:13:47.080 --> 0:13:52.760 Principal portfolio manager, hood River Capital Management. I want to 0:13:52.760 --> 0:13:56.400 bring in Mike McLane or commodity strategist for Bloomberg Intelligence, 0:13:56.440 --> 0:13:58.400 to talk about cryptos, and Mike, we do talk to 0:13:58.440 --> 0:14:01.560 you on a reg basis about cryptos. One of the 0:14:01.600 --> 0:14:03.920 things we've been hearing a lot more and more of 0:14:04.000 --> 0:14:09.080 the past months is these uh, these currencies or these 0:14:09.120 --> 0:14:14.120 blockchain systems are becoming regulated and becoming more acceptable and 0:14:14.120 --> 0:14:18.160 and and getting into the mainstream, which to me, you know, 0:14:18.320 --> 0:14:22.640 as a kind of libertarian, red blooded American, is such 0:14:22.680 --> 0:14:27.440 a bummer. That's why I am so pumped about the 0:14:27.480 --> 0:14:33.239 Internet computer. It is putting another layer of censorship protection 0:14:33.320 --> 0:14:37.480 between you know, ethereum smart contracts and and and users. 0:14:38.360 --> 0:14:41.600 Plus it's been wildly popular talk to us about this 0:14:41.680 --> 0:14:45.320 new um, this new system, and it's got a utility 0:14:45.360 --> 0:14:47.240 token of course. Well that's another thing we both have 0:14:47.280 --> 0:14:50.560 in common, Matt. We both have that Midwestern sensibility. I'm 0:14:50.680 --> 0:14:54.640 from Chicago, You're Cleveland, right, and you know Columbus Columbus, 0:14:54.720 --> 0:14:57.080 We go Hi, we drive boy the many times in 0:14:57.120 --> 0:15:01.360 the Interstate eight. And I'm trying to understand more about 0:15:01.400 --> 0:15:04.120 what it really is. But what it's what it's catching 0:15:04.360 --> 0:15:07.720 me and grabbing me is there's so many signs of 0:15:07.840 --> 0:15:11.400 two thousand seventeen, like things kept coming into space like you. 0:15:11.400 --> 0:15:13.880 You and the Internet computer might have a good solid 0:15:13.960 --> 0:15:15.880 use case. I just haven't dug into it much lately. 0:15:15.880 --> 0:15:18.600 In fact, just I just sent to editors my my 0:15:18.840 --> 0:15:22.200 theory um Um technical outlook because I want to write 0:15:22.640 --> 0:15:24.920 a primer on that for next week. And then I 0:15:25.000 --> 0:15:28.040 look at I think, look at then you're gonna love it. 0:15:28.080 --> 0:15:30.400 I had to say, Mike, you are going to love 0:15:30.400 --> 0:15:34.400 it because what this does it doesn't necessarily compete with ethereum, 0:15:34.520 --> 0:15:38.160 but it helps Ethereum work on a decentralized Internet. So 0:15:38.720 --> 0:15:41.400 you know, right now, if you're using ethereum smart contract, 0:15:41.560 --> 0:15:46.400 chances are you're using it over a website that's hosted 0:15:46.440 --> 0:15:49.760 by Amazon Web Services or Microsoft, and then you get 0:15:49.760 --> 0:15:54.880 this big tech governance layer in there that can affect 0:15:55.040 --> 0:15:59.600 your transaction or um you know, your outcome. But what 0:16:00.080 --> 0:16:04.920 the Internet computer does is um It's blockchain works over 0:16:05.400 --> 0:16:10.160 a number of many, multiple different servers around the world, 0:16:10.360 --> 0:16:13.840 none of which are at any time in control of 0:16:13.880 --> 0:16:19.280 your contracts. So it completely decentralizes um the the use 0:16:19.400 --> 0:16:23.160 of these Ethereum contracts over the Internet and takes out 0:16:23.200 --> 0:16:25.640 that layer of control that you know big tech government 0:16:25.640 --> 0:16:28.280 would have if you are using it over Amazon or Microsoft. 0:16:28.560 --> 0:16:31.360 It sounds like a win win. I'm so impressed it 0:16:31.480 --> 0:16:34.080 jumped up so fast. UM. And how long has it 0:16:34.080 --> 0:16:36.480 been around I mean just recently as lunch right. Well, 0:16:36.600 --> 0:16:40.320 they've been developing it for years, but UM, it's only 0:16:40.560 --> 0:16:45.600 recently UM been put out there, UM on display and 0:16:45.680 --> 0:16:49.720 immediately was brought into trade on coin basically started trading 0:16:49.720 --> 0:16:53.040 on Monday. It's already worth forty eight billion dollars in 0:16:53.080 --> 0:16:56.000 market cap, one of the biggest cryptos out there. But 0:16:56.040 --> 0:16:58.360 the token itself, which is what I keep trying to 0:16:58.400 --> 0:17:02.760 tell people, isn't as exciting or important as UM, the 0:17:02.800 --> 0:17:06.960 blockchain platform that they've created, which is the case for 0:17:07.040 --> 0:17:08.880 so many of these things. I've noticed. It's a coin 0:17:08.920 --> 0:17:11.440 market kept on dot com. It's number nine. It looks 0:17:11.440 --> 0:17:14.560 like it's moving up rapidly. But to me it makes 0:17:14.600 --> 0:17:18.000 complete sense. Is what's happening Like with Ethereum, everybody's realizing, 0:17:18.520 --> 0:17:21.120 oh wow, this is the platform for the space. Looks 0:17:21.160 --> 0:17:22.760 like this is a major company. When you look at 0:17:22.760 --> 0:17:25.480 things like Tether, it's most widely traded on the entire space. 0:17:25.760 --> 0:17:28.360 Tether is an Ethereum token, and it looks like they're 0:17:28.359 --> 0:17:30.320 all just complimenting each other and the rest of the 0:17:30.320 --> 0:17:32.800 financial world, like we come back to our own backgrounds, 0:17:32.800 --> 0:17:35.520 like us young as older people have to say, which 0:17:35.560 --> 0:17:37.679 just embraces technology, and that's what I see them as 0:17:37.720 --> 0:17:42.040 happening Wall Street financialization avances. You say that as you 0:17:42.040 --> 0:17:44.159 look at that list of the top cryptos, what I 0:17:44.200 --> 0:17:47.760 don't see is a JP Morgan branded one or a 0:17:47.760 --> 0:17:51.199 Wells Fargo branded one. To me, it's still as I 0:17:51.240 --> 0:17:53.920 listened to some of these you know big banks, cus 0:17:54.080 --> 0:17:57.159 they're still not there, are they. Oh no, well they're not. 0:17:57.280 --> 0:17:59.600 They're also And then there's an investment case. You know, 0:17:59.640 --> 0:18:03.560 you what's really stilted this year's if you don't add 0:18:03.640 --> 0:18:06.159 bitcoin to your portfolio, allow your clients to do it, 0:18:06.160 --> 0:18:08.160 you're gonna lose money and you may look look really 0:18:08.200 --> 0:18:11.080 bad ten years from now. But things like dose coin 0:18:11.160 --> 0:18:13.880 you can't. That's just expeculative. So we have to differentiate 0:18:13.920 --> 0:18:16.199 the difference. It looks like to me, we have a 0:18:16.200 --> 0:18:18.720 major use case for intricate net computer and then you 0:18:18.720 --> 0:18:21.800 look at dose coin that's just gambling, so trading versus investing. 0:18:21.840 --> 0:18:23.879 It looks like in the computer Internet, and it's annoying 0:18:23.960 --> 0:18:27.320 that investments in the investment bucket. It's to me, it's annoying, 0:18:27.359 --> 0:18:30.760 you know, because and I'll say this, I'm not long crypto, 0:18:30.960 --> 0:18:33.359 so just everyone knows, you know, I have used this 0:18:33.400 --> 0:18:37.000 in the past. I might have fragments of a bitcoin 0:18:37.119 --> 0:18:41.360 in a locked wallet, but which because I'm because I'm 0:18:41.480 --> 0:18:43.800 reporting on it, I never really thought it would be 0:18:43.840 --> 0:18:46.600 ethical to buy it. I wish I hadn't been so 0:18:46.640 --> 0:18:48.879 ethical because I'd be driving the lambos right now. But 0:18:50.280 --> 0:18:54.160 I just think it's fascinating and the does coin aspect 0:18:54.280 --> 0:18:57.239 kind of um, it's a b in my bonnet right 0:18:57.280 --> 0:19:00.119 because it's it's such a it's a meme coin, and 0:19:00.119 --> 0:19:02.879 it's so useless and meaningless. I mean, it's not useless 0:19:02.920 --> 0:19:05.080 obviously anymore, because it's worth a lot of money. But 0:19:05.480 --> 0:19:08.800 it annoys me when people look at the Internet computer 0:19:09.000 --> 0:19:11.240 which has a silly name, and then they think, oh, 0:19:11.280 --> 0:19:14.520 this is just another meme coin. Well, this is definitely 0:19:14.520 --> 0:19:16.719 not another meme coin. I know. We can see that. 0:19:16.840 --> 0:19:19.040 The key thing I think people need to differentiate about 0:19:19.040 --> 0:19:21.520 things like dose coining. And I have twenty something kids 0:19:21.880 --> 0:19:24.120 and all their friends that's what they talk about that's 0:19:24.119 --> 0:19:28.399 what it's fun. It's like more than kids exactly in 0:19:28.440 --> 0:19:30.520 their twenties. And but that's what they you know. Just 0:19:30.560 --> 0:19:31.960 think of the money you might have spent at a 0:19:32.000 --> 0:19:34.480 bar or a restaurant, or to a game, or going 0:19:34.480 --> 0:19:36.360 to the track or going to a casino. Why not 0:19:36.440 --> 0:19:38.560 we can't. You can do it on your phone with 0:19:38.600 --> 0:19:40.520 your friends and drink at a bar and double dog 0:19:40.560 --> 0:19:42.760 there each other over social media. And to me, that's 0:19:42.760 --> 0:19:45.640 what's happening on a global scale. But then I look 0:19:45.640 --> 0:19:48.160 at it in a computer and whoa, this is impressive. 0:19:48.160 --> 0:19:51.400 But this is part of that rapidly advancing technology overwhelming us. 0:19:53.400 --> 0:19:55.159 I can't buy it on DraftKings. I don't think you 0:19:55.160 --> 0:19:57.480 can buy dose corn on draft kings yet. But maybe 0:19:57.880 --> 0:20:00.520 along with your black jack hands and poker and it's 0:20:00.520 --> 0:20:03.440 all a boy, you could pick it up. Recommend their 0:20:03.560 --> 0:20:07.080 strategy Mike mcloan Commodity Strategies for Bloomberg Intelligence. Thanks for 0:20:07.160 --> 0:20:13.479 joining us. This is Bloomberg. Let's get over right now 0:20:13.520 --> 0:20:17.800 to Calm Vault. The CEO, Sanjay merchand Donnie joins us 0:20:17.800 --> 0:20:23.600 to talk about what businesses can do using data, maybe differently, 0:20:24.000 --> 0:20:28.480 in order to increase the their or reduce their integrity 0:20:28.560 --> 0:20:31.719 gap increase their success. Sanji talked to us about what 0:20:31.800 --> 0:20:37.280 com Vault does. First. Umball has been in the data 0:20:37.320 --> 0:20:40.040 business since the beginning. We've been around twenty five years. 0:20:40.040 --> 0:20:43.600 This year's our anniversary as a company, and we help 0:20:43.640 --> 0:20:46.119 customers and what we call that data journey, which is 0:20:46.160 --> 0:20:49.679 about really how they store, protect, manage and use data 0:20:50.320 --> 0:20:52.199 UM And we do this through a series of um 0:20:52.640 --> 0:20:55.680 Intelligent data services delivered you through the cloud or on premise. 0:20:55.760 --> 0:20:57.359 So you know, we've been in the data business all 0:20:57.400 --> 0:20:59.920 through and that's what we do today, all right, Sanja 0:21:00.200 --> 0:21:03.240 In you know the prior fourteen months, the way everybody 0:21:03.320 --> 0:21:05.840 goes about their daily lives has been upended, the way 0:21:05.880 --> 0:21:08.920 we work, the way we learn, doing it much more 0:21:09.000 --> 0:21:14.040 on a remote basis, was corporate America? Was the average 0:21:14.080 --> 0:21:17.960 household ready for this from a data perspective, a data storage, 0:21:17.960 --> 0:21:23.199 a data retrieval, a data data security perspective, You know, 0:21:23.280 --> 0:21:26.280 absolutely not, Because what happened was, you know, I like 0:21:26.320 --> 0:21:28.040 to think, I like to simplify things, and in my 0:21:28.080 --> 0:21:30.680 mind there were were sort of seen three structural shifts 0:21:30.720 --> 0:21:33.440 in the last fourteen months. First, when the pandemic came 0:21:33.520 --> 0:21:35.760 upon us. It was all about, gosh, how do we 0:21:35.800 --> 0:21:38.439 get people working remotely? How does this even happen? So 0:21:38.520 --> 0:21:41.040 you know, things like firewalls and getting them laptops and 0:21:41.119 --> 0:21:43.800 changing business process that they could do things. We got 0:21:43.840 --> 0:21:47.040 through that, um, you know, and then quickly got into 0:21:47.080 --> 0:21:49.280 the phase we said, how do we optimize this, you know, 0:21:49.280 --> 0:21:50.840 how do we sort of really make sure that we're 0:21:50.880 --> 0:21:52.639 doing this right because this is here to stay and 0:21:52.960 --> 0:21:55.560 that's been going where in the throes of that and 0:21:55.600 --> 0:21:58.240 then now we're sort of seeing a third structural shift 0:21:58.280 --> 0:22:00.720 that's happening where folks are you know, quickly moving to 0:22:00.720 --> 0:22:05.399 public cloud services, quickly moving into digital transformational capabilities, and 0:22:05.480 --> 0:22:08.040 this is where data becomes key. And all through this 0:22:08.119 --> 0:22:10.760 journey of the last fourteen months, what's really come to 0:22:10.760 --> 0:22:14.840 before is that that enterprises businesses that are looking at 0:22:14.880 --> 0:22:17.320