WEBVTT - Breaking Down The Bitcoin Drop 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 --> 0:00:22.760 at Bloomberg dot com slash podcast. Let's focus in Matt 0:00:22.800 --> 0:00:25.239 on what we're seeing in Bitcoin in the cryptos, and 0:00:25.320 --> 0:00:28.000 we do that with our good friend, uh, Mike mcglogan. 0:00:28.120 --> 0:00:33.040 He's a strategy commodity strategist at Bloomberg Intelligence. Mike, what 0:00:33.080 --> 0:00:35.239 do you make of the trading here today? I'm just 0:00:35.280 --> 0:00:38.239 looking at my g I P function for bitcoin and 0:00:38.280 --> 0:00:41.360 it it hit thirty thousand and then it bounced right 0:00:41.400 --> 0:00:43.560 back up pretty significantly. What do you make of the 0:00:43.560 --> 0:00:46.800 trading today? I completely agree with Kathy Wood that this 0:00:46.880 --> 0:00:50.240 is a capitulation. It's a market backing up to decent 0:00:50.280 --> 0:00:53.880 support levels in a significantly fundamental boolmarket. So let's look 0:00:53.880 --> 0:00:56.200 at the iteration is going forward. This is more macro 0:00:56.280 --> 0:00:58.080 economic at the moment. At the moment, to me, the 0:00:58.120 --> 0:01:00.800 bigger issue here is mean version in the stock market. 0:01:01.040 --> 0:01:03.400 Bitcoin has just been the high beta indicating it. And 0:01:03.400 --> 0:01:04.640 then you also can see that and the rest of 0:01:04.640 --> 0:01:07.120 the cryptosy're down almost double how much bitcoin is today. 0:01:07.280 --> 0:01:10.280 Look at the iterations going forward. If this document goes 0:01:10.319 --> 0:01:12.360 down and stays down for a while, it's a virtual 0:01:12.400 --> 0:01:14.760 guarantee that there's only one thing the Fed can do. 0:01:14.880 --> 0:01:17.560 They have to buy more bonds. What is that good 0:01:17.600 --> 0:01:21.560 for bonds? Gold and bitcoin? They will be the primary beneficiary. 0:01:21.600 --> 0:01:23.760 So I think the key point Cathy would make made 0:01:23.760 --> 0:01:27.240 about deflationary trends. To me, that's the biggest fact that 0:01:27.240 --> 0:01:30.040 it's really kicking in here. Why is crudel down five percent? 0:01:30.120 --> 0:01:32.160 Because the only thing that's been holding up is this 0:01:32.240 --> 0:01:36.000 writing right rising this this rising tide. Enough the tide 0:01:36.040 --> 0:01:38.840 starting the EBB, we're gonna see who's not wearing clothes, 0:01:38.920 --> 0:01:41.440 and I think it's gonna be bitcoin, golden bonds to 0:01:41.520 --> 0:01:45.040 benefit again. For you know, A key thing to leave 0:01:45.080 --> 0:01:46.760 you on is I think we're gonna look back at 0:01:46.800 --> 0:01:50.360 this and say that that joke coin, that Hustle doage cooin, 0:01:50.440 --> 0:01:52.920 it marked the peak of speculative froth in virtual all 0:01:52.960 --> 0:01:57.200 global markets. What what is driving this talent? Can we 0:01:57.240 --> 0:02:01.080 look across because you can track which wallets are, you know, 0:02:01.480 --> 0:02:04.320 trade in cash. People say it's anonymous, but it's really 0:02:04.400 --> 0:02:09.520 sued pseudonymous. Is there any way to know who's pushing 0:02:09.560 --> 0:02:13.200 these prices down, how it's happening, Well, it's that's um. 0:02:13.240 --> 0:02:15.400 It depends on why you want to know. And and 0:02:15.520 --> 0:02:17.040 one thing, Matt, I've always looked at it from a 0:02:17.080 --> 0:02:19.440 markets guy, beating a new traded pits, I look at 0:02:19.760 --> 0:02:22.320 and that is trying to define exactly who is doing it, 0:02:22.360 --> 0:02:25.000 and wise is less important than figuring out what's the 0:02:25.080 --> 0:02:27.079 purpose and what's going on. And to me, the main 0:02:27.120 --> 0:02:30.679 thing that's really happening this is massive speculative leverage. Long 0:02:30.800 --> 0:02:33.000 is getting hit in their stops. And you know, as 0:02:33.040 --> 0:02:35.040 an ex trader and speeding trading, pitt And traded with 0:02:35.120 --> 0:02:37.520 a lot more leverage in futures. And you see most markets, 0:02:37.720 --> 0:02:39.520 you know, leverages down there in the pay trading pits 0:02:40.600 --> 0:02:43.400 one minimal. You know, have a little sympathy for speculators 0:02:43.480 --> 0:02:45.959 getting stopped up, but oftentimes they mark the peaks and 0:02:46.000 --> 0:02:47.960 the trolls. And that's what I think is happening now. 0:02:48.360 --> 0:02:50.120 And then when you know the dust settles, we're gonna 0:02:50.160 --> 0:02:52.320 see the fundamentals kick in, and that's where I see 0:02:52.360 --> 0:02:55.680 bitcoin versus everything else. Now, theorium is okay, but then 0:02:55.680 --> 0:02:58.240 there's a ten thousand other cryptos. Now we all know 0:02:58.320 --> 0:03:00.880 from the dot com bubble there's pretty good signs of 0:03:00.880 --> 0:03:04.560 speculam excess. But then there's only one digital goal in 0:03:04.600 --> 0:03:06.720 the world going digital. And by the way, Bitcoin still 0:03:06.800 --> 0:03:11.560 up in the year. I guess how much Tesla is down? Matt. 0:03:11.639 --> 0:03:16.519 Can't you picture Mike McGlone in commodities pitch trading? Absolutely? 0:03:16.680 --> 0:03:19.359 I also would love to be there myself. I mean, 0:03:19.400 --> 0:03:24.120 that's those were the days. I wonder if we still 0:03:24.160 --> 0:03:26.359 have the same kind of commodity pits, are the same 0:03:26.440 --> 0:03:28.919 kind of open outcry trading anywhere in the world. Is 0:03:28.960 --> 0:03:31.280 it dead everywhere? It's dead everywhere. But I'd like to 0:03:31.280 --> 0:03:33.440 say the five years I spent in the Chicago Board 0:03:33.440 --> 0:03:35.600 of Trade is more than anything I learned. Isn't an 0:03:35.680 --> 0:03:38.200 m B A c F, A FRM, all these all 0:03:38.240 --> 0:03:40.839 these degrees we get, It's just there's nothing like being 0:03:40.880 --> 0:03:44.480 around five thousand people every day and just knocking around markets. 0:03:44.720 --> 0:03:47.200 This is what fascinates me in terms of what's going 0:03:47.280 --> 0:03:50.400 on right now with bitcoin, because I've seen, you know, 0:03:50.520 --> 0:03:53.600 a crash from a thousand and we we wrote these 0:03:53.640 --> 0:03:56.560 stories about how the masses got pulled in and now 0:03:56.600 --> 0:03:58.880 it's all over and the fat lady has sung and 0:03:58.920 --> 0:04:02.400 I saw the crash. It's seventeen thousand and everyone. We 0:04:02.440 --> 0:04:05.640 wrote stories that said, this is it. We called the game. 0:04:05.760 --> 0:04:08.840 It's over now, and we're doing that again today, which 0:04:09.040 --> 0:04:12.800 makes me sort of simultaneously laugh and and puke to 0:04:12.880 --> 0:04:16.200 some extent. But what I what fascinates me is the 0:04:16.240 --> 0:04:20.600 mechanics of what's happening here. Who's selling? Why are there 0:04:20.680 --> 0:04:24.440 margin stops, you know, our margin calls, um, you know 0:04:24.800 --> 0:04:28.240 forcing this liquidation? Are we seeing any big whales get 0:04:28.240 --> 0:04:31.279 out of um? You know, wallets that haven't moved forever? 0:04:31.720 --> 0:04:36.440 Is this all retail? Is this institutional? Are people selling short? Like? This? 0:04:36.520 --> 0:04:39.200 Is what I wonder about what's going on right now? 0:04:39.400 --> 0:04:41.279 Well that's the key thing, man, And I'd love to 0:04:41.279 --> 0:04:44.240 see people selling short of bull market get backing up 0:04:44.279 --> 0:04:48.080 the good support with fundamentally good drivers. So I think 0:04:48.520 --> 0:04:51.760 that should continue and for a little while. But this 0:04:51.800 --> 0:04:54.640 is how you make bottoms in markets, as fowers who's signed? 0:04:54.680 --> 0:04:57.560 Oftentimes you find that out later when the markets already recovers, 0:04:57.520 --> 0:04:58.880 so it's kind of hard to tell now, but I 0:04:58.960 --> 0:05:01.600 fully expect this is it is the speculat access is 0:05:01.640 --> 0:05:04.040 hitting their stops. And by the way, you know, that's 0:05:04.080 --> 0:05:05.800 oftentimes we used to say that in trading of bits, Hey, 0:05:05.800 --> 0:05:07.359 where's the stops? Because you want to hit them, and 0:05:07.360 --> 0:05:08.960 that's when you know where you get. You run through 0:05:08.960 --> 0:05:10.680 the prices and then you put in the bottom or 0:05:10.680 --> 0:05:12.120 a peak if it's in a bowl market. Right now, 0:05:12.200 --> 0:05:14.760 it's just I think putty near a bottom in a 0:05:14.839 --> 0:05:17.320 bowl market as you just run through these these people 0:05:17.320 --> 0:05:19.760 got a little too bullish around sixty and probably getting 0:05:19.800 --> 0:05:22.840 a little too barrish around thirty. Hey, Mike, you know, 0:05:23.120 --> 0:05:27.159 let's put this technical trading or this capitulation trade aside 0:05:27.160 --> 0:05:29.919 for just a moment. If I'm a fundamental investor, what 0:05:29.960 --> 0:05:32.560 are the next data points I should be focusing on 0:05:33.000 --> 0:05:36.400 for bitcoin? Well, I think the next key thing is 0:05:36.680 --> 0:05:38.760 I think it holds around thirty a douta gets much 0:05:38.800 --> 0:05:41.440 below and then to see how it gravitates. The key 0:05:41.480 --> 0:05:43.360 thing I'm looking at is the macro. How does this 0:05:43.480 --> 0:05:46.680 stock market resun respond to this? Is the stock market 0:05:46.760 --> 0:05:49.599 continues to show just too Maybe you have a normal 0:05:49.600 --> 0:05:52.320 temperacent correction which used to be history. What does that 0:05:52.400 --> 0:05:54.760 mean for the iterations from the macro And to me, 0:05:54.839 --> 0:05:57.520 that's where the bitcoin is different from all the cryptos. 0:05:57.560 --> 0:06:00.760 It is macro and macro only that's what matters the most, 0:06:01.080 --> 0:06:02.640 and to me, that's what's gonna matter. So as far 0:06:02.680 --> 0:06:04.400 as technical levels, a lot of times this is like 0:06:04.440 --> 0:06:06.080 this to me is kind of like noise in the 0:06:06.080 --> 0:06:08.200 big picture. If you look back at this from the 0:06:08.200 --> 0:06:10.599 future hypothetically five years so now we're going to look 0:06:10.600 --> 0:06:13.320 back at this, it's like, Okay, finally we had some 0:06:13.520 --> 0:06:16.440 time for this, that massive rallying and stock market just 0:06:16.560 --> 0:06:19.200 to mean revert and normalize a little bit, and it 0:06:19.320 --> 0:06:22.159 made everything kicking, like the FED and mask and fiscal 0:06:22.240 --> 0:06:25.360 monical stem monitory stemas has to pick up. And then 0:06:25.360 --> 0:06:28.880 we see these predominant deflationary forces, like look at crude oil. 0:06:29.080 --> 0:06:31.240 It just probably peaked around seventy and guess what, in 0:06:31.240 --> 0:06:32.839 ten years, we're not gonna be using much of it. 0:06:33.080 --> 0:06:35.480 We're all we're driving electric cars. But that's the key 0:06:35.520 --> 0:06:37.679 thing where bitcoin s up comes in. It's set rapidly 0:06:37.720 --> 0:06:42.239 advancing technology and innovation, reshaping the world with Catty Cathy 0:06:42.240 --> 0:06:44.800 Woods touts on this is part of the whole world 0:06:44.880 --> 0:06:48.039 getting banked. And by the way, there's no the monetary 0:06:48.040 --> 0:06:50.120 powers policy is fixed. You don't have to worry about 0:06:50.120 --> 0:06:52.440 more bitcoins coming on. To me, that's what's gonna come on. 0:06:52.760 --> 0:06:54.919 As far as levels, they're kind of noise, but you know, 0:06:54.920 --> 0:06:57.120 getting back above fifty I think will be the next 0:06:57.240 --> 0:07:00.080 key threshold. Sustaining above below thirty and b m of 0:07:00.120 --> 0:07:02.120 a problem for a well, but for me, the last 0:07:02.120 --> 0:07:03.680 thing I want to do is focus on the day trade. 0:07:03.680 --> 0:07:05.440 It's the macro and the bigger picture. I think we're 0:07:05.440 --> 0:07:08.799 more likely to head towards a hundred um than sustained 0:07:08.800 --> 0:07:11.000 below thirty this year. Agree with you a hundred percent, 0:07:11.080 --> 0:07:13.520 But you know, it's the day traders and Wall Street 0:07:13.520 --> 0:07:18.240 bets that get the headlines. Um, it's the momentary moves 0:07:18.280 --> 0:07:20.960 that spur people to to call the game. By the way, 0:07:21.000 --> 0:07:23.240 Elon Musk, I don't know if you saw this, Mike 0:07:23.280 --> 0:07:26.600 that he just tweeted it, but uh, he just tweeted 0:07:26.640 --> 0:07:30.760 that he has that Tesla has diamond hands, which is, 0:07:30.840 --> 0:07:33.280 for those who don't know kind of Wall Street bets 0:07:33.280 --> 0:07:37.880 Redditt jargon for someone who absolutely refuses to roll over 0:07:37.920 --> 0:07:40.600 and sell. He will not capitulate. It's kind of what 0:07:40.680 --> 0:07:43.840 he's saying now. But you can never trust Elon, or 0:07:43.840 --> 0:07:46.360 at least I think crypto investors won't won't be able 0:07:46.400 --> 0:07:50.000 to trust him Um to stick to his word, because 0:07:50.000 --> 0:07:52.880 he seems to go back and forth. He seems to 0:07:52.960 --> 0:07:57.320 waffle on his commitment to crypto and to bitcoin. And 0:07:57.920 --> 0:08:02.440 it's also I think interesting that he embraces DOES because 0:08:02.880 --> 0:08:07.280 serious crypto investors are sickened by DOES, or at least 0:08:07.760 --> 0:08:10.480 embarrassed by it. Wouldn't you say, oh absolutely, I look 0:08:10.480 --> 0:08:12.800 at the whole Doge saga and him getting instead of 0:08:12.880 --> 0:08:14.480 right live is We're gonna look back at that and 0:08:14.960 --> 0:08:16.360 from the future and say, okay, well that was the 0:08:16.400 --> 0:08:19.600 peak in speculative accesses and all those ten thousand cryptos 0:08:19.600 --> 0:08:21.880 that don't really matter anymore. Now there's only like ten 0:08:21.920 --> 0:08:24.520 that really matter, Bitcoin and Theoryum and then a few others. 0:08:25.040 --> 0:08:27.880 And you know, I look yet, right now, let's just 0:08:27.960 --> 0:08:30.400 let's fixtion and put an iteration on this. Let's say, 0:08:30.520 --> 0:08:32.680 by you know, end of the year, we sustain above 0:08:32.800 --> 0:08:36.000 fifty thousand. What does that mean? Bitcoin just survived another 0:08:36.040 --> 0:08:38.560 of the thousand cuts. It's it's with it's hit, it's 0:08:38.679 --> 0:08:41.640 it's been hit, hit, hit it for ten years. Markets 0:08:41.640 --> 0:08:44.319 are used to this, and if you're allocating to the space, 0:08:44.400 --> 0:08:46.600 you should be, you know, a small percentage your portfolio 0:08:46.679 --> 0:08:49.520 expected to drop fifty and if you don't, then you're 0:08:49.520 --> 0:08:52.640 too overweight. But give it five ten years and it's 0:08:52.720 --> 0:08:55.320 it's a major ten x. And if it doesn't continue 0:08:55.360 --> 0:08:58.920 being the digital version of gold, well the world's going digital. 0:08:59.000 --> 0:09:01.280 Something else will and it's just a matter of time. 0:09:01.440 --> 0:09:03.520 Bitcoin has already won that race. So I look at 0:09:03.559 --> 0:09:06.600 it as bitcoin and gold together. It can analyze gold 0:09:06.600 --> 0:09:08.480 without it, and this type of dip. I expect them 0:09:08.480 --> 0:09:11.560 both to appreciate out of this. Most notably if we see, 0:09:11.840 --> 0:09:14.160 let's say the stock market actually goes back to unchanged 0:09:14.160 --> 0:09:16.560 on the year, just imagine the iterations from the FET 0:09:17.440 --> 0:09:20.160 What do you, Mike, doesn't give you any concern here 0:09:20.280 --> 0:09:22.840 that the Elon Musk of the world can have such 0:09:22.880 --> 0:09:26.360 an outsize impact on this security it Maybe we're peak 0:09:26.440 --> 0:09:30.559 Musk hitting Peak Musk was Senterate live. But the key 0:09:30.600 --> 0:09:32.280 thing is also I like to say the fact that 0:09:32.320 --> 0:09:35.199 the world's largest automaker by market cap is allocated to 0:09:35.280 --> 0:09:39.160 this digital reserve asset makes significant sense, but it's also 0:09:39.240 --> 0:09:41.320 might be marking a peak for death sla. I mean, 0:09:41.360 --> 0:09:43.679 who else can in the world cannot make electric cars? 0:09:43.720 --> 0:09:45.840 I mean everybody can know. I drive a Chevy Volte. 0:09:45.880 --> 0:09:48.400 I love it because I don't have range anxiety. And 0:09:48.400 --> 0:09:50.440 of course it's it's it's a poor man's teslas, so 0:09:50.760 --> 0:09:53.400 maybe it's peaked. Dude, I love it. I love it too, 0:09:53.480 --> 0:09:56.680 I gotta tell you, Um, I have always loved that car. 0:09:57.000 --> 0:10:03.360 And beyond the specific Chevy Vault, hybrids are the answer. 0:10:03.440 --> 0:10:07.120 I don't know why anyone has to be dedicated to 0:10:07.160 --> 0:10:10.319 a battery battery electric vehicles, and now we're going off 0:10:10.320 --> 0:10:14.240 on a tangent here. But for me, um, why not 0:10:14.559 --> 0:10:17.960 have a range extend or as BMW calls, you know 0:10:18.040 --> 0:10:20.920 their three cylinder engines that they throw in the I 0:10:21.120 --> 0:10:23.319 eight and the I three. Why not have that extra 0:10:23.400 --> 0:10:26.440 security and you can use the battery most of the time, 0:10:26.640 --> 0:10:28.800 be good for the environment most of the time. When 0:10:28.800 --> 0:10:31.559 you need it, throw in a little bit of internal combustion. 0:10:31.800 --> 0:10:34.640 But Matt, I think that's very relevant to the current topic. 0:10:34.720 --> 0:10:39.480 It's called innovation and rampidly advancing technology disrupting what's happening. 0:10:39.520 --> 0:10:41.680 So right now the infrastructure is just not there for 0:10:41.760 --> 0:10:44.680 all electric cars. The infrastructure is still not there for 0:10:44.760 --> 0:10:46.760 digital asses. We don't have an e t F in 0:10:46.760 --> 0:10:48.439 the U S. And guess what, it's a matter of time. 0:10:48.440 --> 0:10:50.200 The rest of the world has proven there's no problem 0:10:50.200 --> 0:10:51.880 with e t f s. By the way I used 0:10:51.920 --> 0:10:53.720 to run, you know, I remember in the natural gas 0:10:53.720 --> 0:10:55.960 ETF it went to zero and some things like that. 0:10:56.080 --> 0:10:58.760 So to me, what you're we're in the midst of 0:10:58.840 --> 0:11:01.960 rapidly I think when the most significant periods of history 0:11:02.000 --> 0:11:06.240 of technologies taken over pressuring inflationary forces, and we're seeing 0:11:06.280 --> 0:11:08.880 a little bit of that normalization today. Bitcoin is part 0:11:08.920 --> 0:11:11.439 of it. It's just this is part of that adjustment. 0:11:11.440 --> 0:11:12.880 I think we're gonna look back at this in the 0:11:12.960 --> 0:11:14.400 future when there's e t F so and when the 0:11:14.400 --> 0:11:16.760 Baltil the in bitcoin drops to about the same as goal, 0:11:16.800 --> 0:11:18.760 which it probably will because it gets what. Only thing 0:11:18.800 --> 0:11:22.760 that's uncertain is demand, and um all car cars will 0:11:22.800 --> 0:11:24.640 be electric. But I'll end on this one key point 0:11:24.720 --> 0:11:27.520 just because of efficiency that you mentioned in cars, total 0:11:27.800 --> 0:11:30.400 consumption of U S liquid fuels is exactly the same 0:11:30.440 --> 0:11:33.360 as it was twenty years ago. Yet GDP and production 0:11:33.440 --> 0:11:37.840 is increased over that's just efficiency. Now everything is going electronic, 0:11:37.920 --> 0:11:42.120 and it's an electrification, digitalization, decarbonization. It's all kicking in. 0:11:43.000 --> 0:11:45.040 Everything gets more efficient. You know, you might not eleven 0:11:45.080 --> 0:11:47.920 gets forty miles a gallon now it's pretty insane. UM, 0:11:48.080 --> 0:11:51.120 the way you drive it, well, no, not the way 0:11:51.160 --> 0:11:53.600 I drive when my wife drives in. Mike, thanks so 0:11:53.679 --> 0:11:55.480 much for joining us. I really appreciate it. I know 0:11:55.520 --> 0:11:58.360 you're super busy today. You can see Mike's work UM 0:11:58.360 --> 0:12:00.400 today on the t live blog. We've out of a 0:12:00.520 --> 0:12:03.600 top live blog which is excellent and excellent way to 0:12:03.720 --> 0:12:06.680 follow events like this. UM. Just type t L I 0:12:06.760 --> 0:12:11.160 V go on your Bloomberg terminal to continue keeping up 0:12:11.160 --> 0:12:12.760 with what's going on. Big point. Also, I hope I 0:12:12.800 --> 0:12:14.960 can get Mike and my television program later. I'm on 0:12:15.320 --> 0:12:18.920 Bloomberg TV at one pm for people. I'm gonna have 0:12:18.960 --> 0:12:20.679 my people talk to his people and see if we 0:12:20.720 --> 0:12:27.440 can get him. We have FED minutes will be released 0:12:27.440 --> 0:12:30.080 today two pm Wall Street time, and I think most 0:12:30.120 --> 0:12:32.280 observers are going to be, you know, taking a look 0:12:32.320 --> 0:12:35.439 at how the FED of views inflation. It has been 0:12:35.920 --> 0:12:38.920 fairly consistent across the board saying, Hey, this inflation that 0:12:38.920 --> 0:12:42.559 you're seeing in the economy is transitory, uh, and it 0:12:42.679 --> 0:12:46.000 should not be a concern for this economic rebound. But 0:12:46.040 --> 0:12:49.000 that's clearly one of the key issues that the market 0:12:49.040 --> 0:12:51.040 is focusing on. Now, let's bring in our good friend, 0:12:51.120 --> 0:12:55.559 Danielle DiMartino Booth. She's a CEO and director of Intelligence 0:12:55.559 --> 0:12:58.520 for Quill Intelligence. She's also a former advisor at the 0:12:58.600 --> 0:13:02.520 Dallas Federal Reserve and a Bloom Opinion contributor. Also is 0:13:02.559 --> 0:13:05.559 the author of the book entitled fed Up, An Insider's 0:13:05.600 --> 0:13:08.840 take on why the Federal Reserve is Bad for America. Danielle, 0:13:08.840 --> 0:13:11.319 thanks so much for taking the time here. What are 0:13:11.360 --> 0:13:13.880 you going to be looking for here as in these 0:13:13.880 --> 0:13:17.960 FED minutes later this afternoon. Well, first of all, thanks 0:13:17.960 --> 0:13:20.160 for having me this morning. And you know, I will 0:13:20.200 --> 0:13:25.760 be tuned in to what Clarda mentioned a few days ago, 0:13:26.040 --> 0:13:28.120 and and that is that he's going to be attuned 0:13:28.160 --> 0:13:33.040 and attentive to incoming data. You know, being a former 0:13:33.080 --> 0:13:37.680 FED insider, it's not on on hood of for the 0:13:37.720 --> 0:13:41.680 minutes to not two changes in between the end of 0:13:41.720 --> 0:13:44.800 the meeting and the time that's passed since then, and 0:13:44.880 --> 0:13:47.760 you know what, what we can say is that there's 0:13:47.800 --> 0:13:51.920 been a lot of mixed messaging. We started to see 0:13:51.960 --> 0:13:54.680 the commodities complex come off of its highs. This is 0:13:54.679 --> 0:13:58.120 going to be very reassuring for anybody inside the FED 0:13:58.160 --> 0:14:03.040 who's sticking to their transitor um narrative. But by the 0:14:03.080 --> 0:14:08.480 same token, there is an undeniability about the stickiness in 0:14:08.520 --> 0:14:13.240 some of the prices that we're seeing. So you don't 0:14:13.280 --> 0:14:16.640 buy the transitory narrative. Although I will say, if I 0:14:16.679 --> 0:14:20.240 look at the commodities complex right now, uh, there are 0:14:20.280 --> 0:14:24.040 some serious red arrows everywhere you look, just today, right 0:14:24.120 --> 0:14:26.000 and one day. Of course, a trend does not make 0:14:26.120 --> 0:14:29.400 But you don't think that this inflation we're gonna see 0:14:29.480 --> 0:14:34.120 is only a momentary. Well, I think that there are 0:14:34.160 --> 0:14:38.280 certain areas that are showing again stickiness we're seeing We're 0:14:38.280 --> 0:14:42.880 seeing that in steel and iron ore in specific pockets. Um. 0:14:42.920 --> 0:14:46.840 But I'm actually in the camp that does not believe 0:14:47.080 --> 0:14:51.640 in the inflation expectations narrative because it's got such a 0:14:51.680 --> 0:14:56.880 tight correlation purely with the commodities index. So I prefer 0:14:57.120 --> 0:15:01.360 the Cleveland said inflation gauge, which which takes into context 0:15:01.800 --> 0:15:04.320 labor costs, and if you look at the Atlanta FEDS 0:15:04.320 --> 0:15:06.760 that have kind of a real time labor gauge, it 0:15:06.880 --> 0:15:10.960 really isn't flashing red just yet. And you know where 0:15:11.000 --> 0:15:13.520 I live in Texas. Next week is the last week 0:15:13.520 --> 0:15:16.720 of school. We've got a ton of high school students 0:15:16.760 --> 0:15:19.680 who are going to be hitting the labor market, and 0:15:20.560 --> 0:15:22.920 wages are a lot higher than they've been in past summers. 0:15:22.920 --> 0:15:25.200 They might think of doing things other than being a 0:15:25.240 --> 0:15:28.120 lifeguard because there there might be enough of a poll 0:15:28.160 --> 0:15:32.160 for low skilled positions, especially the five thousands that are 0:15:32.160 --> 0:15:35.840 open among manufacturers. They're mostly low skilled positions, but these 0:15:35.920 --> 0:15:37.880 kids can make a lot over the next three months 0:15:37.880 --> 0:15:41.200 between Memorial Day and Labor Day. That's a great point, Danielle, 0:15:41.200 --> 0:15:44.000 because I guess we've had the news you know, earlier 0:15:44.000 --> 0:15:46.960 in the week about McDonald's raising it's you know, minimum wage, 0:15:47.000 --> 0:15:50.600 the thirteen dollars in Amazon to fifteen dollars and even 0:15:50.640 --> 0:15:54.960 Bank of America talking twenty five dollars here. Is that 0:15:55.040 --> 0:15:58.320 just kind of anecdotal news in your mind, or is 0:15:58.360 --> 0:16:04.520 that indicative of made some wage inflation creeping into this economy. Well, again, 0:16:04.560 --> 0:16:07.400 we're not seeing it picked up in the aggregate measures 0:16:07.440 --> 0:16:10.000 just yet, can we have to remember that there are 0:16:10.040 --> 0:16:13.680 still so many small businesses in this country that can't 0:16:13.680 --> 0:16:17.640 afford to compete with the larger big box retailers the 0:16:17.920 --> 0:16:21.280 banks of America. As you say, so, we're definitely seeing 0:16:21.680 --> 0:16:24.440 a grab for labor. What we don't know is what 0:16:24.520 --> 0:16:28.280 the other side of September six looks like when these 0:16:28.520 --> 0:16:32.680 UM supplemental unemployment benefits expiring. We've already heard from Joe Mansion, 0:16:32.880 --> 0:16:36.280 who is arguably the most powerful person inside the Beltway, 0:16:36.360 --> 0:16:39.240 that he's not going to sign on for an extension 0:16:39.280 --> 0:16:42.000 of the extra three dollars per week. So again, we've 0:16:42.040 --> 0:16:46.479 got two two flows into the labor market between teenagers 0:16:46.480 --> 0:16:48.200 and one stag of back to school. You're gonna have 0:16:48.440 --> 0:16:50.800 millions of Americans who are who are going to be 0:16:50.800 --> 0:16:53.480 faced with the choice of, well, gee, I might have 0:16:53.600 --> 0:16:56.000 to go back to work because I can't make as much. 0:16:56.240 --> 0:16:59.880 I can't sustain myself anymore. On these unemployment benefits will 0:16:59.880 --> 0:17:02.880 be reopening nationwide. Yeah, I got it. Just a minute 0:17:02.960 --> 0:17:05.480 left here, Danielle. But a question from a financial professional, 0:17:05.960 --> 0:17:08.600 a listener who who also has seen you speak in 0:17:08.640 --> 0:17:12.520 the past and appreciates your UM your views. He he 0:17:12.560 --> 0:17:15.520 wants to know if you think any other central bank 0:17:15.560 --> 0:17:17.840 will blink before the FED, or does the FED have 0:17:18.040 --> 0:17:21.080 to move before the rest of the global central banks 0:17:21.119 --> 0:17:24.120 do it? Oh, gracious, We've already heard from the Bank 0:17:24.119 --> 0:17:26.600 of Canada as well as some of the emerging markets 0:17:26.600 --> 0:17:28.919 for dilful one. We know that other banks are going 0:17:28.960 --> 0:17:31.200 to start the tapering process, and they've indicated that they're 0:17:31.200 --> 0:17:33.119 going to do that, while the SET is maintaining that 0:17:33.160 --> 0:17:36.960 they're not thinking about thinking about the taper discussion Rob Kaplan, 0:17:37.200 --> 0:17:41.000 you know, notwithstanding so uh no, I I think it's 0:17:41.040 --> 0:17:43.840 feasible that the FED not be first out of the gate. 0:17:44.320 --> 0:17:47.840 That would be abnormal. And so you think and even 0:17:47.880 --> 0:17:50.320 the important, the big ones like the e c B 0:17:50.440 --> 0:17:53.680 in the Bank of England could move first. That's a 0:17:53.720 --> 0:17:57.639 different story. You know, they're the level of quantitative easing 0:17:57.720 --> 0:17:59.720 that they're pumping out. John Authors had a great call 0:17:59.800 --> 0:18:02.520 up few days ago. It's it's higher than it was 0:18:02.560 --> 0:18:04.439 when the pandemic first hit. When you're talking about the 0:18:04.440 --> 0:18:07.280 ECB and even even the FED and the Bank of Engment, 0:18:07.640 --> 0:18:09.439 I don't know. I I still send a lot of 0:18:09.440 --> 0:18:12.879 reticence on the part of the Big four Central Banks. 0:18:13.320 --> 0:18:15.240 All right, Daniel, thanks so much for joining us. Daniel 0:18:15.320 --> 0:18:19.760 DeMartino booth there. She is the CEO of Quill Intelligence. 0:18:19.800 --> 0:18:22.720 Of course, she's a former advisor at the Dallas Federal 0:18:22.760 --> 0:18:27.119 Reserve as well, also a Bloomberg Opinion contributor, as is 0:18:27.320 --> 0:18:30.280 John Authors. You can find columns from both of them. 0:18:30.320 --> 0:18:34.879 Just type O, P, I, N GO. I want to 0:18:34.920 --> 0:18:36.760 talk about what's going on in retail. You have a 0:18:36.800 --> 0:18:40.840 slew of earnings yesterday and then a slew today as well. 0:18:41.359 --> 0:18:44.520 Let's bring in Ty Lopez to see winners and losers. 0:18:44.560 --> 0:18:49.760 Are executive chairman of Retail e Commerce Ventures. Um, Ty, 0:18:49.880 --> 0:18:53.119 what do you think now that we've seen UH Target, 0:18:53.440 --> 0:18:59.640 t J Max, Lowe's, Home Depot, Macy's, UH Walmart? Where 0:18:59.680 --> 0:19:02.919 do you think? Which business do you think is best 0:19:03.080 --> 0:19:10.000 poised to succeed in a reopening? Yeah? Thanks for having me. 0:19:10.040 --> 0:19:12.879 I would say the better question is what's not going 0:19:12.920 --> 0:19:16.000 to do well? Not much. I just read an interesting 0:19:16.000 --> 0:19:20.640 report by Adobe on a calm and U. For example, 0:19:20.760 --> 0:19:25.200 ten of Americans had who are now shopping a calm 0:19:25.320 --> 0:19:28.480 had never bought anything at the beginning of the pandemic. 0:19:28.640 --> 0:19:32.439 That's thirty million new people entered just because of the pandemic. 0:19:32.880 --> 0:19:36.560 So that momentum, I mean, this thing's wild clothings up 0:19:36.600 --> 0:19:39.000 for us. We're in all kind of we on radiosheck, electronics, 0:19:39.000 --> 0:19:43.399 all this stuff. We haven't seen anything, uh do anything 0:19:43.440 --> 0:19:46.880 but surge. So I think there's probably some B two 0:19:46.880 --> 0:19:50.480 C stuff, maybe something that supports commercial real estate. That's 0:19:50.520 --> 0:19:52.760 about the only thing I know that's getting hit right now. 0:19:52.800 --> 0:19:55.160 So it's a great time to be in retail, especially 0:19:55.160 --> 0:19:56.840 if you have that a calm, you know, if you 0:19:56.880 --> 0:19:59.000 have the flair for e calm, by the by the way, 0:19:59.040 --> 0:20:04.320 your business, so you invest in companies that have well 0:20:04.359 --> 0:20:08.600 known brands but didn't do great as brick and mortar stores. 0:20:08.640 --> 0:20:15.640 You mentioned radio shack, but also Model's, um uh one, 0:20:15.840 --> 0:20:20.200 linens and things. Yeah, so so how is that going? Then? 0:20:22.280 --> 0:20:26.760 It's been you know, we started buying before the pandemic 0:20:27.119 --> 0:20:30.680 and it was going well then and this thing has 0:20:30.720 --> 0:20:35.440 just super truck what would have taken until happened last 0:20:36.080 --> 0:20:38.720 in the last twelve months without a doubt. So there's 0:20:38.760 --> 0:20:41.880 been just we fought forwarded ten years. As I said, 0:20:41.920 --> 0:20:45.159 thirty million people according to one survey in the United States. 0:20:45.160 --> 0:20:47.439