Speaker 1: This is Bloomberg Business Wait inside from the reporters and
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Speaker 1: Podcast with Carol Messer and Tim Stenebek from Bloomberg Radio.
Speaker 2: We've been talking a lot about Tesla today with good reason.
Speaker 2: Stocks still oh man, it's not one hundred percent anymore.
Speaker 2: It's ninety eight point three three percent the gains this year.
Speaker 2: Oh you know, should should we not talk about it?
Speaker 3: Well, it's still off, you well, off of its highs
Speaker 3: from twenty twenty one.
Speaker 2: That's a really good point some perspective. But it's been
Speaker 2: on a tear this year and it's on track for
Speaker 2: its record eleventh consecutive session of gains. So it's also
Speaker 2: a longtime favorite among retail traders. So let's get into
Speaker 2: it because there's been some new, some fundamental just following
Speaker 2: on the heels of GM saying it's going to tap
Speaker 2: into Tesla's EV charging network, following also after Ford did
Speaker 2: the same thing. So let's get to it with David Welsh,
Speaker 2: Bloomberg News Detroit bureau chief. He is on the phone
Speaker 2: from Detroit. David Great to have you here with Matt
Speaker 2: and myself. So now it looks like, what three billion
Speaker 2: that Tesla stands to gain by twenty thirty because of
Speaker 2: these deals with Ford and GM. How big a nut
Speaker 2: is that When you look at the revenue picture for Tesla.
Speaker 4: At the end of the day, it's not huge revenue.
Speaker 4: I just think it's to me, it's interesting because you
Speaker 4: look over the past five years and they've made over
Speaker 4: five billion selling regulatory credits to the legacy automakers who
Speaker 4: need to meet clean air standards and don't have enough
Speaker 4: electric vehicles to do it. So Tesla just you know,
Speaker 4: three billion dollars by twenty thirty. You know, their revenue
Speaker 4: is over eighty billion a year now, They're probably much
Speaker 4: greater by then, So it's you know, it's a few
Speaker 4: percentage points. It's not massive for a growth company like this,
Speaker 4: But to me, it just stands out that they keep
Speaker 4: making money. They making money off their competitors. It's great
Speaker 4: because they have such a lead in electrification that their
Speaker 4: competitors keep giving them ways to either money or direct
Speaker 4: or ways to make money to fund their new products
Speaker 4: while they're trying to catch up.
Speaker 3: The Tesla in the first place, So I have so
Speaker 3: many questions. I'm glad you could join us, David. Isn't
Speaker 3: this really cool in that it creates an industry standard?
Speaker 3: Or is it global or is it just the US?
Speaker 4: Right now, it's just us. We'll see what happens globally
Speaker 4: and the thing, I think it'll stretch to Canada as well.
Speaker 4: You know, there are Chinese automakers. I think they've got
Speaker 4: their own standard over there, but Tesla does sell evs
Speaker 4: in that market. I'm not totally sure what the confluence
Speaker 4: of a different standard is over there. But US market,
Speaker 4: it is very cool that we're getting one standard, because honestly,
Speaker 4: it was kind of dumb that we had more than one. Stupid.
Speaker 2: It's like Beta max versus VHS, like right, remember.
Speaker 4: The old Yeah, that's a classic business case, you know.
Speaker 4: And for that matter, the days when and I was
Speaker 4: I was an Apple geek in the early days, when
Speaker 4: you know, you started losing certain programs because it wasn't
Speaker 4: compatible with Windows or Microsoft products. Eventually, I think Steve
Speaker 4: Jobs caved and bridge the gap, but for a while,
Speaker 4: if you had Apple stuff, you couldn't use certain things.
Speaker 3: So speaking of caving, is Delantis next because I'm looking
Speaker 3: forward to Dodge is going to make a charger EV
Speaker 3: that is just going to be insane. Is that going
Speaker 3: to have a Tesla style charging port?
Speaker 4: I bet it will. I mean, I think everybody has
Speaker 4: to cave at this point. You're talking about the number one,
Speaker 4: two and three companies and EV sales in the US.
Speaker 4: I think Toyota will have to as well. And I
Speaker 4: think everyone is going to have to follow and do this.
Speaker 4: And so it's not they're talking about an adapter to
Speaker 4: begin with and then eventually just making a you know,
Speaker 4: putting a Tesla inlet port in the vehicle. It's not
Speaker 4: a radical change for anybody. It's you know, it's not
Speaker 4: like they're you know, going from you know, a gasoline
Speaker 4: engine to a jet engine in the car. You know,
Speaker 4: this is this is a plug.
Speaker 2: But it creates, like you know, I said to we
Speaker 2: were talking earlier, you know, whether you're like Elon must
Speaker 2: or not. I mean, you can be kind of cookie.
Speaker 2: But having said that, is it just the possibility though,
Speaker 2: of creating a significant, even more revenue stream for this company.
Speaker 2: And we talked about three billion, but could it even
Speaker 2: be more in the future.
Speaker 4: Well, so the forecast I used from percent and other
Speaker 4: analysts had forecasts out there kind of some were more
Speaker 4: similar to less but directionally similar. And I think Sandlers
Speaker 4: Piper Sanders forecast is looking at not just for GM
Speaker 4: but basically everybody going this way. And I think now
Speaker 4: that doesn't happen, everybody's going to have to eventually well,
Speaker 4: I think connects shoot to drop here that could actually
Speaker 4: reduce the amount of revenue growth Tesla gets have. This
Speaker 4: is I think all you know, this patchwork quilp of
Speaker 4: multiple EV charging players that are out there that GM,
Speaker 4: Ford and everybody else has partnerships with, they're going to
Speaker 4: have to adopt Tesla's standards unbelievable and a CS and
Speaker 4: and when that happens, then consumers will be able to
Speaker 4: use other networks that aren't Tesla's but using the Tesla chargeboard.
Speaker 4: But you know there's an interim here and you know
Speaker 4: medium long term where Tesla's going to be making money
Speaker 4: off of this on they're dedicated chargers and they could
Speaker 4: they could for a very long time to come actually,
Speaker 4: because if you're driving around and your car can use
Speaker 4: a charge point charger anywhere you see a Tesla and
Speaker 4: that's open, you're going to take it and it's more
Speaker 4: reliable too.
Speaker 2: Yeah, exactly, good stuff, as always, the ever evolving world
Speaker 2: of Tesla and Elon Musk. David Welch, Detroit Buro, chief
Speaker 2: of Bloomberg News, on the phone from Detroit. Really appreciate it, David,
Speaker 2: have a.
Speaker 4: Good thanks, David.
Speaker 5: How do you?
Speaker 3: How are you?
Speaker 2: I mean we talked about this a little bit yesterday, right,
Speaker 2: and just what this move? You were you were kind
Speaker 2: of like blown away.
Speaker 3: Well, I think it's very cool because it creates I
Speaker 3: always applaud kind of universal standards, even when they're not
Speaker 3: necessarily the best choice. For example, VHS, probably the technology
Speaker 3: wasn't as good as beta. For those of you old
Speaker 3: enough to remember what beta was.
Speaker 2: Pretty incredible, Yeah, or there was three quarter. Remember there's
Speaker 2: beta and time.
Speaker 3: I remember all of them. But it doesn't matter. The
Speaker 3: point is when you get a universal standard, then the
Speaker 3: industry grows much faster. So for me, that's the exciting
Speaker 3: point about this. You know, we're already expecting eighteen percent growth,
Speaker 3: near to a fifth of all car sales globally this
Speaker 3: year are going to be EV's So this is just
Speaker 3: going to accelerate that transition, which is exciting and also
Speaker 3: in some ways of concern, right because our grid maybe
Speaker 3: can't handle it if we had that many evs.
Speaker 2: Well, we found that yesterday, right, all the conversations we
Speaker 2: had about the energy markets and you know how old
Speaker 2: our grid is not a news story everybody, but it
Speaker 2: just seems like we talk about it, talk about the
Speaker 2: importance of infrastructure, you know, investing, whether it's energy or
Speaker 2: whether it's like ev you know, charging areas, and we
Speaker 2: just kind of forget to do it. And so in
Speaker 2: this case you've got a private sector company doing it.
Speaker 3: I'm very pumped also about the next generation of evs
Speaker 3: because I think it'll be the first generation of evs
Speaker 3: from other automakers that are really from bottom up designed
Speaker 3: to be electric vehicles. So no longer just ICEE E
Speaker 3: vehicles that the company put a battery. ICEE an internal
Speaker 3: combustion engine, got it. So no longer just gas burning
Speaker 3: vehicles that used to have an engine that may just
Speaker 3: put a battery in. So they're designed, purpose built to
Speaker 3: be EV's and they're going to be not only much
Speaker 3: better in terms of everything from range to handling to performance.
Speaker 2: Which is what the what Tesla is, right, Yeah, for sure,
Speaker 2: but they're also.
Speaker 3: Going to be much more affordable, which is what I'm
Speaker 3: looking forward to, because you know, you go out there
Speaker 3: in the market right now crazy and you see vehicles
Speaker 3: like the BMW I X is really cool, but it's
Speaker 3: ninety thousand dollars to start. Now you're starting to see
Speaker 3: real competition. I'm driving right now a Nissan Ariyah I
Speaker 3: think it's called a r I y am test driving it,
Speaker 3: and it's unbelievably cool. It's elegant in its design, it's fast,
Speaker 3: it handles well, it's fun to drive, and it's affordable.
Speaker 3: It's like starts at forty five grand or so.
Speaker 2: So kind of like the idea of when Prius was
Speaker 2: first you know, created as a hybrid, was it thought
Speaker 2: about as from the ground up?
Speaker 1: Uh?
Speaker 3: Well, that was I'm sure thought about as a Yeah,
Speaker 3: a ground up hybrid vehicle for sure, because if you
Speaker 3: look at and Teslas, you're right, we're ground up, designed
Speaker 3: to be ev EVS after the roadster, because remember the
Speaker 3: roadster they first used was actually a I think a
Speaker 3: Lotus or an Opal body and they put a battery
Speaker 3: in it.
Speaker 2: This is why we love having you around. You kind
Speaker 2: of know a few things I know if.
Speaker 3: You you know your you know a few things too.
Speaker 2: No, but I'm with you. I'm looking at the prices
Speaker 2: on things and I'm like, what happened? Am my two spans?
Speaker 2: I mean, this is how do you make this a
Speaker 2: mass market car? If we're supposed to ramp up to
Speaker 2: hit certain nut coming? All right, I'm going to hold
Speaker 2: my breath and I can't wait.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 2: We know a lot of news on crypto this week,
Speaker 2: To say the least, Matt us really feel like it's
Speaker 2: being thrown into deeper array. You had also Binance today,
Speaker 2: Banking partners getting ready to rescind support liquidity drawing up
Speaker 2: traders withdrawing tokens from the platform as regulators are clamping
Speaker 2: down on the company and its owner. So it's been
Speaker 2: a week full of some really tough news for the
Speaker 2: crypto universe.
Speaker 1: Yeah.
Speaker 3: Absolutely. The Coinbase move probably felt more by US investors,
Speaker 3: obviously because it's publicly traded here, But ban is the
Speaker 3: big cat in this industry, and if it starts to
Speaker 3: lose I guess scale, that's a problem for advancement in
Speaker 3: this in crypto.
Speaker 2: It does wonder about kind of the latest stress points
Speaker 2: and the viability of the US crypto industry industry. So
Speaker 2: let's get into it with solidus Labs Vice President of
Speaker 2: Regulatory Affairs Kathy Kreninger, also former director of the Consumer
Speaker 2: Protection Financial Bureau, joining us via zoom from Washington, d C.
Speaker 2: Once again, sold us is a crypto market surveillance and
Speaker 2: risk monitoring platform. Just for those of you not in
Speaker 2: the know. Kathy, good to have you back with us.
Speaker 2: Your gut take on the news this week and what
Speaker 2: it means for the US crypto industry.
Speaker 6: Well, you said it here too.
Speaker 5: It is quite a week when you thought the news
Speaker 5: couldn't get any bigger. We find ourselves continually on a
Speaker 5: roller coaster with this industry and unfortunately, particularly in the US.
Speaker 5: Look I said it before, agencies should go after bad actors.
Speaker 6: That's exactly what you want to see happen. So there
Speaker 6: are certainly some.
Speaker 5: Allegations that finance needs to address and having that out
Speaker 5: in the open, frankly gives them the opportunity to do that.
Speaker 6: No surprise.
Speaker 5: The SEC has been engaging in investigations into a number
Speaker 5: of platforms and operators in the crypto space now for
Speaker 5: quite some time. So having the cases out there and
Speaker 5: in the open matters the other side, as you mentioned,
Speaker 5: with the coinbase, they're two very different cases.
Speaker 3: So what let's focus in on Coinbase in terms of
Speaker 3: what they can do well. Really, the similarity I think
Speaker 3: between the two is compliance is almost impossible for crypto businesses,
Speaker 3: or that's what they tell us. Is that true? You know,
Speaker 3: because we hear Gensler say all we want you to
Speaker 3: do is come into compliance, and these crypto businesses say,
Speaker 3: there's no way for us to do that. We've applied
Speaker 3: and they rejected us.
Speaker 5: There are some real challenges here around the definitions and
Speaker 5: the requirements.
Speaker 6: Definitely so.
Speaker 5: And actually a great hearing on Tuesday that included a
Speaker 5: coin based witness, as Sherman Thompson of the House Agriculture
Speaker 5: Committee noted, highly unusual to have a witness before the
Speaker 5: committee who's now the subject of an enforcement action and
Speaker 5: litigation by an agency, but that that was par for
Speaker 5: the course and why the hearing was so important, and
Speaker 5: the legislation was so important, So it is challenging, no doubt.
Speaker 5: There are very few crypto businesses or special purpose registrations
Speaker 5: that have gone through that are related to crypto and
Speaker 5: part of that has to do with two, you know,
Speaker 5: the business that they are engaged in and the fundamental
Speaker 5: disclosures requirements and registration nuts and bolts that the SEC
Speaker 5: requires that they just simply can not actually comply with.
Speaker 5: Some of it also is related to what the nature
Speaker 5: of these assets are and having that be clear in law.
Speaker 5: Point Base is a publicly traded company. They go through
Speaker 5: a rigorous process that they have outlined repeatedly around their
Speaker 5: assessment of which assets are or are not securities, and
Speaker 5: it is not their intention to list securities, as many
Speaker 5: of the platforms say, so why they would be subject
Speaker 5: to registration is something that again this case now is
Speaker 5: going to really be at the heart of the matter
Speaker 5: of are these assets securities and why and the sec
Speaker 5: actually you know, asserting that and proving that.
Speaker 3: What's your take? By the way, I mean, people always
Speaker 3: talk about the Howie test, and there are some cases
Speaker 3: in which it's very clear, and I think Gary Gensler
Speaker 3: has set himself there some cases in which it's you know,
Speaker 3: bitcoin for example, is is not a security. But in
Speaker 3: a lot of these instances you can debate whether it's
Speaker 3: a security or a commodity.
Speaker 6: You definitely can.
Speaker 5: I mean it comes down to again whether whether there
Speaker 5: is an aspect of decentralization in terms of whether this
Speaker 5: is you know that that group of people that you
Speaker 5: expect to benefit from and reap the rewards of their work,
Speaker 5: uh and their you know, their efforts.
Speaker 6: So that is is one prong of the analysis.
Speaker 5: Certainly under under the Howie test that that gets some attention.
Speaker 4: Uh.
Speaker 5: And and there are certainly things like like bitgoin that
Speaker 5: you would argue is decentralized. I think there is some
Speaker 5: real question too over over what ownership aspect there really
Speaker 5: is and what anyone actually owns and so the the
Speaker 5: other dynamic here in terms of what securities law requires.
Speaker 5: That takes me back to the first question you asked
Speaker 5: and what is important here. It is important for issuers
Speaker 5: and listeners to actually disclose what the asset does.
Speaker 6: What it's intended to do, now it's used, who is
Speaker 6: behind it.
Speaker 5: There are some classic things that again good actors in
Speaker 5: crypto claim they are already doing and meeting so in
Speaker 5: some respects meeting the spirit of that important information and
Speaker 5: getting it to investors, but all the mechanics of registration
Speaker 5: are things that they simply cannot actually meet.
Speaker 2: So, Kathy, you know, we had a conversation Matt and
Speaker 2: I yesterday with former SEC chair j Clayton and Dean
Speaker 2: moorehead also who's very involved in the crypto space, and
Speaker 2: I do wonder one of the points that came up
Speaker 2: is that you do already see sovereign you know, being
Speaker 2: issued based on blockchain technology around the world, and I
Speaker 2: do wonder, you know, as we think about the legitimacy
Speaker 2: of crypto going forward, has kind of the train left
Speaker 2: the station, and so that if the US is not
Speaker 2: on board in terms of figuring out the regulatory framework
Speaker 2: along with other folks in the world, that they will
Speaker 2: be ultimately left behind. Can we make that conclusion if
Speaker 2: they're not in if the US isn't involved US.
Speaker 6: Regulators, Look, I agree with that in part.
Speaker 5: I would say the US markets are such that, you know,
Speaker 5: there will always be an interest by companies serve US markets,
Speaker 5: and that will come back around. I think where it
Speaker 5: really does concern me is the national security dynamics.
Speaker 6: We have benefited from decades and even.
Speaker 5: I suppose more than a century of US innovation setting
Speaker 5: the standard for how the globe operates. We built the
Speaker 5: financial systems of the world, so there is a national
Speaker 5: security benefit to that, the dollar being you know, basically
Speaker 5: the world's currency, that we benefited from that, and the
Speaker 5: notion that we would be absent as the next financial
Speaker 5: system is really being built and that infrastructure is being built.
Speaker 5: That's where we're really I think losing that long term
Speaker 5: competitive advantage and our place in the world's economy and
Speaker 5: then frankly in the global dynamics even politically speaking, and
Speaker 5: from a stability standpoint, in a national security standpoint, So
Speaker 5: that does concern me greatly and I think is hugely
Speaker 5: unfortunate if we if we just concede. The other thing
Speaker 5: I would note that is to different this year is
Speaker 5: really Chair Gensler's statement and attitude when you get to
Speaker 5: you know, what, what is there room for in this
Speaker 5: new economy and his stance that the only digital currencies
Speaker 5: that are necessary are the ones that already exist and
Speaker 5: are issued by governments. You know, that really does undermine
Speaker 5: the potential and opportunity that's here, but some of it
Speaker 5: gets to terminology too. I've not really believed that the
Speaker 5: future of a lot of the tokenization is truly in currency,
Speaker 5: you know, and really replacing sovereign currencies. But there is
Speaker 5: I think a lot with the infrastructure that having you know,
Speaker 5: stable coins and certainly having digital assets is hugely beneficial.
Speaker 3: Is there a do you think there's a consensus feeling
Speaker 3: in Congress about which way we need to go in
Speaker 3: terms of either supporting it or killing it.
Speaker 5: I continue to believe that on both sides of the
Speaker 5: aisle there's a lot of interest in setting this up
Speaker 5: the right way and understanding the potential and having the conversation.
Speaker 6: A lot of concern frankly about.
Speaker 5: The scams and fraud and dynamics around FTX.
Speaker 6: That's completely legitimate.
Speaker 5: I mean, look, whenever any new technology comes into play,
Speaker 5: there are going to be those challenges and that's I
Speaker 5: think hugely unfortunate and where the industry needs to step
Speaker 5: up calling out the bad actors, where agencies should focus
Speaker 5: their energy going after them, but where there are not
Speaker 5: clear rules that good actors can follow. That's really where
Speaker 5: you see the flight that we are. Again, certainly people
Speaker 5: are asserting leaving the US markets, and we're seeing some
Speaker 5: of that itself.
Speaker 6: All right, we got to run.
Speaker 2: Hey, Kathy, thank you, appreciate you waiting weighing in on
Speaker 2: all of this. Kathy Kreninger, vice president of Regulatory Affairs
Speaker 2: at Solidus Labs, former director of the Consumer Protection Financial Bureau,
Speaker 2: joining us on Zoom from Washington, DC. Matt, did you
Speaker 2: see the store about robin hood removing three jokers from
Speaker 2: its crypto trading platform?
Speaker 3: You know, so, I think anyone's going to be doing
Speaker 3: that if they've been defined as a security by the SEC.
Speaker 2: You got to get rid of them, right, They've got
Speaker 2: to be nervous.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 1: Just Say Alexa playing Bloomberg eleven thirty.
Speaker 2: Got to love them. We've got a guest coming on,
Speaker 2: and we've got a question ahead of them even joining us.
Speaker 3: A listener writes in with a question before we have
Speaker 3: the guests. That's brilliant. That's a popular is the should
Speaker 3: always do that. It makes our lives so much easier.
Speaker 2: Body listening because please do this, do this anyway, let's
Speaker 2: get right to it. Doctor Ian las Baders with US,
Speaker 2: clinical professor of Medicine at NYU Lango and on Zoom in.
Speaker 3: New York City.
Speaker 2: Ian, good to have you back here in joining Matt
Speaker 2: and me on this Friday. I hope you're doing well.
Speaker 2: What were the what's the week been like you? Based
Speaker 2: on the air quality and what we had to deal
Speaker 2: with this week.
Speaker 7: You know, I think everyone's been concerned about the wildfires
Speaker 7: in Canada. Hard to believe seven or eight hundred miles away.
Speaker 7: I've been a native New Yorker for all my life.
Speaker 7: I've never seen fires in Canada. Cause the air pollution
Speaker 7: that we saw over the last three days shut to
Speaker 7: northeast and we've had a lot of calls from patients,
Speaker 7: patients with COPD and emphysema. It's been a real challenge.
Speaker 7: We've had to raise people's medications and hailers. And I
Speaker 7: think there's also this anxiety on top of COVID anxiety
Speaker 7: and on top of all sorts of anxiety that they're
Speaker 7: vulnerable there's really no safe place to go. There's still
Speaker 7: some indoor air pollution, and going out on the street
Speaker 7: there's a lot of coughing that acrid smell, and so
Speaker 7: there are real concerns and also not only short term
Speaker 7: but long term concerns because smoke has you know, hundreds
Speaker 7: of chemicals, carbon monoxide, carbon dioxide, particle size, large particles,
Speaker 7: small particles really all smoke, but especially wood, organic chemicals
Speaker 7: things I tell you in in xylene, sulfur dioxide, and
Speaker 7: some of these over a long period of time can
Speaker 7: have you know, risks as you know, potential cancer risks.
Speaker 7: So it's been a problem for the patients and for
Speaker 7: the doctors.
Speaker 3: So this leads well into the question that our viewer,
Speaker 3: our listener has wondering about the everyday health effects of
Speaker 3: pollution from cars and buildings. You know, if you're walking
Speaker 3: around New York City, you're gonna smell a lot of weed.
Speaker 3: There's smoke everywhere. What can we do if this listener
Speaker 3: wants to know if we're living in the city or
Speaker 3: near the city to protect ourselves, is it just masks,
Speaker 3: air filters, Is there anything else?
Speaker 7: Well, certainly, you know the N ninety five masks, certainly
Speaker 7: for people with lung disease, or if you can get one,
Speaker 7: is very helpful. Right, So some of these particles, you've
Speaker 7: got large particles that generally the cilia in the nose
Speaker 7: and the nosehairs and sinuses can filter out some particles.
Speaker 7: The lung has these little hair cells called cilia. But
Speaker 7: for the very fine particles we're talking, you know, under
Speaker 7: a micron, you know, in size, those can go deep
Speaker 7: in the lungs and cause a lot of problems. So
Speaker 7: the N ninety five masks. If you're outside during a
Speaker 7: day like over the past few days, doing it, an
Speaker 7: air filter or air purifier in in your apartment or
Speaker 7: in your office is very smart. Air conditioning that doesn't
Speaker 7: draw outside air. You're not doing anything helpful if you're
Speaker 7: just sucking outside air and you just have the air
Speaker 7: conditioner filter. But inside air, if it's refiltered, would be
Speaker 7: helpful in general. You know, you're right. The city has
Speaker 7: a lot of particular material from cars, building smokestacks, so
Speaker 7: the air z always dirtier in a city than in
Speaker 7: the suburbs. Walking around the streets, you know, don't go
Speaker 7: behind a bus. A lot of the buses are electric
Speaker 7: now the subways, so the subway tracks cause a lot
Speaker 7: of particulate material. If you look at the lungs the
Speaker 7: autopsy of people who live in the city, they look
Speaker 7: much worse all these dark particles compared to the suburbs.
Speaker 7: Living in the city, you have intrinsically higher risk. You
Speaker 7: can wear a mask outside, it's hard for most people
Speaker 7: to do that. That probably would help a bit, and
Speaker 7: use an air filter and air pure fire in your
Speaker 7: office and in your home.
Speaker 2: I have to say, you know, I've continued wearing a
Speaker 2: mask even post COVID, just especially in and around the
Speaker 2: subway because I just, I don't know, I just don't
Speaker 2: even wear one during COVID, although I understand that their
Speaker 2: health benefits, and it may not have been the smartest
Speaker 2: move on my part.
Speaker 3: I just don't like to wear a mask, you know.
Speaker 2: I don't know, go ahead, Ian, Yeah.
Speaker 7: No, people have psychologic issues and it is hard to
Speaker 7: wear for long periods of time. You know, by and large,
Speaker 7: the air quality in New York is not terrible.
Speaker 4: They great.
Speaker 7: It really is sort of low, medium and high under
Speaker 7: fifty fifty to one hundred and over one hundred, so
Speaker 7: it was well over one hundred during the bad days,
Speaker 7: and I would say for that, wear a mask. I
Speaker 7: wore a mask when I left the office, you know,
Speaker 7: an N ninety five. Most times in the city the
Speaker 7: air quality is not that bad because of the changes,
Speaker 7: but certainly if you're near a smoky area or if
Speaker 7: you have lung problems, I would play it safe. And
Speaker 7: even getting a surgical mask and help cloth masks are useless.
Speaker 7: Bandana is that kind of thing. They didn't help with
Speaker 7: COVID the you know, viral particles right through those. But
Speaker 7: investing in a good either respirat or mask RUN ninety five,
Speaker 7: who knows in the future what other problems there may be.
Speaker 7: New York was not really prepared for this, right you know,
Speaker 7: we've ever seen it, and I think we need to
Speaker 7: get prepared for other issues. You know, they're homeless on
Speaker 7: the street, and we have a lot of people who
Speaker 7: are vulnerable, and we need to plan for the future,
Speaker 7: whether it's storms or whether it's air issues.
Speaker 2: Hey, doctor Lespitter, One thing I did want to ask you,
Speaker 2: what are the consequences for folks that, you know, even
Speaker 2: if they're healthy in their lungs, just a few days
Speaker 2: of breathing in the air this week, or if we
Speaker 2: continue to have you know, climate related or other you know,
Speaker 2: fires and winds that are going to affect us O.
Speaker 2: We have fine, we have more days like this in
Speaker 2: New York City. What do we need to be concerned
Speaker 2: about the long term impact?
Speaker 7: Well, you know, we don't really know. Look, any smoke
Speaker 7: exposure has some risk, and if you have lung disease
Speaker 7: or you've had a past history of smoking, you're higher risk.
Speaker 7: We do speak to your pulmonologist or general internist. We
Speaker 7: do screen with cat scans. By and large temporary smoke
Speaker 7: exposure we can get over so most healthy people, the
Speaker 7: lungs can cleanse themselves to a degree particles can be
Speaker 7: put out. But for prolonged exposure or if you have
Speaker 7: industrial exposure, higher risk of lung cancer, and you do
Speaker 7: need to touch base with your pulmonary specialist. Certainly, people
Speaker 7: who have inhalers sometimes we increase the dose of those.
Speaker 7: I would say, try and get out of the city
Speaker 7: and get some clean air as much as you can
Speaker 7: to balance out your overall exposure. Go to the beach,
Speaker 7: get some clean air. Obviously in the winter that's harder
Speaker 7: to do, but I would definitely try and leave the city.
Speaker 2: Any I have a really important question. Is there any
Speaker 2: help for Matt Miller?
Speaker 3: I just want to know, Ian, it's a psychological thing.
Speaker 3: That's not your specialty.
Speaker 7: Right, that's great. I love his attitude.
Speaker 4: It's key.
Speaker 7: Next time we should speak about a new vitamin study
Speaker 7: that's out that talks about vitamins and dementia multivitamins. There's
Speaker 7: some conflicting data about that, but maybe we can talk
Speaker 7: about that another time. I think it's fascinating. For a
Speaker 7: long time we really said multivitamins don't help. There's a
Speaker 7: little bit of evidence maybe they do.
Speaker 2: That's fascinat Well, that's what we call a deep tease.
Speaker 2: And you did it. Well you're going to be back,
Speaker 2: I know at a future date. Doctor Ian las Bader,
Speaker 2: Clinical Professor of Medicine at NYU Langoing Center here in
Speaker 2: New York City.
Speaker 6: A journal Now about you?
Speaker 3: Let me drive?
Speaker 4: Oh no, no, no, no, who's going to drive?
Speaker 3: Hory please, I'll do the gravels.
Speaker 2: I want to drive.
Speaker 6: It's a good question.
Speaker 1: Try this is the drive to the Globe.
Speaker 6: Dot com comfing Well Bryer around shot it.
Speaker 1: On on Bloemberg Radio.
Speaker 2: All Right, everybody, We've got just under eighteen minutes left
Speaker 2: in today's trading session, getting ready to wrap up the
Speaker 2: Friday trade as well as the week. Carol Master, along
Speaker 2: with Matt Miller, live in our Bloomberg Interactive Broker Studio
Speaker 2: on YouTube in Bloomberg Originals. I want to get right
Speaker 2: to our guests because I'm curious, Matt, what Sam Stobell
Speaker 2: has to say about that twenty percent move off of
Speaker 2: that October twenty twenty two low on the S and
Speaker 2: P five hundred. Sam, of course, is chief investment strategist
Speaker 2: at CFRA on Zoom in New York City, somebody you
Speaker 2: and I have been talking to for years. Sam, it
Speaker 2: is in a couple of decades now, and I think it's.
Speaker 3: A good thing.
Speaker 2: It means we've all seen a lot of cycles. What
Speaker 2: do you make of this cycle and this move off
Speaker 2: the bottom for the S and P five hundred specifically,
Speaker 2: let's start there.
Speaker 4: Sure.
Speaker 8: Well, Hey, Carol, good to talk to you again, Matt,
Speaker 8: always good to talk to you, especially with the new beard.
Speaker 8: But yeah, I think that we registered that twenty percent advance,
Speaker 8: and now obviously people are wondering will the market be
Speaker 8: like the messenger from Marathon who then stumbles and dies
Speaker 8: shortly after announcing the news, or will it have legs
Speaker 8: to run further? And I think history basically tells us
Speaker 8: that we have further to go, and that following twenty
Speaker 8: percent advances off of prior bear market lows, we typically
Speaker 8: advance about fourteen and a half percent, and do so
Speaker 8: over a five month period. So I would advise not
Speaker 8: selling too quickly into this rally, at least if you
Speaker 8: are a longer term investor, because chances are we have
Speaker 8: a ways to go.
Speaker 4: Hang on.
Speaker 3: So I have a sam stoveall for those listening who
Speaker 3: don't know, has like more data than the Bloomberg. So
Speaker 3: when we hear about bear market rallies, and I've seen
Speaker 3: a number myself in the past couple of decades, but
Speaker 3: how often do you see a bear market rally that
Speaker 3: gets up to a more than twenty percent gain from
Speaker 3: the bottom and then it fizzles out?
Speaker 8: Well, if you're looking at the Nasdaq, because it's much
Speaker 8: more volatile than the S and P. We've had eight
Speaker 8: bear markets since the Nasdaq one hundred was created in
Speaker 8: the late nineteen eighties, and a full half of them
Speaker 8: experienced what I call bogus bottoms or fake outs where
Speaker 8: the index was up by twenty percent only to turn
Speaker 8: around and set an even lower low for the S
Speaker 8: and P five hundred. However, we have only had three
Speaker 8: such fake outs, and all three of them were confined
Speaker 8: to the two mega meltdowns of two thousand and two
Speaker 8: through two, as well as seven through nine. This bear
Speaker 8: market I regard as a garden variety bear market, meaning
Speaker 8: less than forty percent decline, and we have never had
Speaker 8: a bogus bottom occur within a garden variety bullmarket.
Speaker 3: Nice. Yeah, Because I was reading Savita s. A Vermani
Speaker 3: and from Bank America, she said ninety two percent of
Speaker 3: the time on the S and P five hundred, after
Speaker 3: you get to a twenty percent rally from the bottom,
Speaker 3: you have gains twelve months later. So in other words,
Speaker 3: it's not a fake out exactly.
Speaker 8: And actually the only thing that I think investors are
Speaker 8: sort of worried that there could be some fake out
Speaker 8: is why is it that this time around small caps
Speaker 8: are not leading the way as they have done five
Speaker 8: or six of the prior times, going back to nineteen
Speaker 8: eighty for the Russell two thousand. This time around we're
Speaker 8: up only about eleven percent versus the twenty one percent
Speaker 8: for the S and P five hundred. So yeah, investors
Speaker 8: are sort of scratching their heads. What's different this time?
Speaker 2: Well, what's different maybe this time? And there's another story
Speaker 2: on the Bloomberg talking about the disconnect between stocks and bonds,
Speaker 2: suggesting a twenty percent downside risk for equities if bonds
Speaker 2: are right in pricing inflation volatilities. According to some modeling
Speaker 2: by JP Morgan Chase and Company strategists, if you look
Speaker 2: at kind of the bond market trade in terms of
Speaker 2: where I guess yield as saying, and there are concerns
Speaker 2: about inflation volatility if that continues to be persistent, Sam,
Speaker 2: is it potentially different time around? We've just come off
Speaker 2: several days of Bloomberg invest you know, top voices like
Speaker 2: yourself in the investment community talking about the markets and
Speaker 2: saying this is unusual times. We're coming off on precedent
Speaker 2: amount of money that was pumped into the economy because
Speaker 2: the global economy, because of the pandemic. We're not really
Speaker 2: quite sure how it plays out.
Speaker 8: Right. Well, the good news is last Monday I published
Speaker 8: a report called Hike, Skip and a Jump, And what
Speaker 8: it showed was that going back to the beginning of
Speaker 8: when the FED actually announced FED Fund changes, prior to
Speaker 8: that they announced only discount rate changes, that whenever we
Speaker 8: did have that skip in the subsequent eight weeks, meaning
Speaker 8: between those two FOMC meetings, the market was up eighty
Speaker 8: eight percent of the time, rising about three point six
Speaker 8: percent on average. So the good news is that if
Speaker 8: the FED does indeed skip, as FED Fund's futures are
Speaker 8: pointing to, that would be a positive sign. However, if
Speaker 8: the FED basically either continues to raise or tells us
Speaker 8: that no, we're nowhere near being done, then you know,
Speaker 8: they could end up not only strangling this new bull market,
Speaker 8: but could throw the economy into something much deeper than
Speaker 8: the mild recession currently priced in.
Speaker 3: Sam, I'm interested to know how you compare and contrast
Speaker 3: this inflationary environment and the FED hikes that we've seen
Speaker 3: with that of the seventies and eighties. You know, it
Speaker 3: seems Powell doesn't want to be in Arthur Burns. Are
Speaker 3: there parallels?
Speaker 8: Well, certainly, I think by hearing Arthur I mean Arthur Powell,
Speaker 8: hearing Jerome Powell say that he does not want to
Speaker 8: repeat the mistakes of the nineteen seventies that that would
Speaker 8: imply that they are going to be raising rates longer.
Speaker 8: But at the same time, if you take a look
Speaker 8: at the inflation numbers, we're going to be getting CPI
Speaker 8: soon next week, we're going to be EPI. Both of
Speaker 8: them continue to show a stare step down, and we're
Speaker 8: finding that the Fed funds rate is now well above
Speaker 8: both of those year on year changes. So that typically
Speaker 8: is what happens close to the end of a rate
Speaker 8: tightening cycle. And again I point to what happens after
Speaker 8: the Fed stops raising rate. Historically they don't cut rates
Speaker 8: for another nine months. So my belief is they're not
Speaker 8: going to be cutting rates until the second quarter of
Speaker 8: next year. But still the market is up thirteen percent
Speaker 8: on average, with all sizes, styles, sectors, and ninety nine
Speaker 8: percent of sub industries in positive territory over that timeframe.
Speaker 2: So really quickly thirty seconds though, would you like to
Speaker 2: see a more broadening out though of the market trade, Well, you.
Speaker 8: Could say that it is fairly broad already because more
Speaker 8: than fifty percent of the stocks in the S and
Speaker 8: P five hundred are positive year to date, forty seven
Speaker 8: percent of them are above the markets, the S and
Speaker 8: P five hundred equal weight performance and a majority of
Speaker 8: certainly the high growth areas are showing percentages above fifty.
Speaker 8: But even a group like real estate has forty three
Speaker 8: percent of its components this positive character.
Speaker 2: If year, okay, got leave on that.
Speaker 6: Now love the data points.
Speaker 2: You're right, it doesn't win the Bloomberg.
Speaker 4: I love it.
Speaker 5: I love it.
Speaker 3: Thank you so much. Sam.
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