WEBVTT - A G20 Country Will Adopt Bitcoin by Yr-End: CoinShares' Demirors 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 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.880 at Bloomberg dot com slash podcast. All right, folks, looking 0:00:22.920 --> 0:00:26.480 at bitcoin once again. It is up five percent today 0:00:26.520 --> 0:00:31.120 called as to the green Side, putting it just over 0:00:31.320 --> 0:00:35.520 fifty one thousand dollars per coin. Let's get a sense 0:00:35.560 --> 0:00:37.960 of what's going on with bitcoin at All Things Crypto. 0:00:38.040 --> 0:00:40.720 We're fortunate to welcome our next guest, melt Him Demire's 0:00:41.000 --> 0:00:44.040 chief strategy officer for coin Shares Group. They have about 0:00:44.040 --> 0:00:47.760 four billion dollars in assets under management. Matt, what do 0:00:47.800 --> 0:00:50.440 you think is driving your Actually I can't wait to 0:00:50.479 --> 0:00:53.600 get her on the line because I have so many questions. 0:00:54.200 --> 0:00:58.560 One of the products that coin share offers is an 0:00:58.560 --> 0:01:01.920 e t P and exchange traded product, and of course 0:01:01.960 --> 0:01:03.760 there haven't been any e t f s yet for 0:01:03.800 --> 0:01:07.600 buying bitcoin, and I think, you know, it's just why 0:01:07.600 --> 0:01:10.280 why why is they just haven't been allowed by regulators, 0:01:10.520 --> 0:01:12.760 you know, the Winkle Vye. We're trying to get one 0:01:12.800 --> 0:01:16.360 out there, and there are a number of, um, really 0:01:16.400 --> 0:01:19.440 reputable people working to get to get an e t 0:01:19.640 --> 0:01:22.480 F out there. Um. One of the main problems, Paul, 0:01:22.640 --> 0:01:26.040 is that when you go and buy something like bitcoin 0:01:26.080 --> 0:01:27.640 that you don't understand in the first place, and you 0:01:27.680 --> 0:01:29.520 have to figure out where to put it in the wallet, 0:01:29.520 --> 0:01:32.920 then inevitably, as I did, you lose your password and 0:01:32.920 --> 0:01:37.759 then it's just lost forever. It's terrifying. So I'd rather 0:01:37.800 --> 0:01:40.240 be able to buy an e t F or um 0:01:40.280 --> 0:01:43.240 they sell an e t P and I wonder what 0:01:43.280 --> 0:01:46.280 it is. It's apparently it's physically backed e t P. Alright, 0:01:46.319 --> 0:01:48.279 we have Mel tem back whether Mel Mel temp Demere's 0:01:48.320 --> 0:01:50.920 chief strategy officer for coin Chairs Group about some Thanks 0:01:50.960 --> 0:01:52.640 so much for joining us. I'd love to just get 0:01:52.720 --> 0:01:58.480 your thoughts initially here on what's driving bitcoin at Hey, guys, 0:01:58.480 --> 0:02:01.120 great to be here, Thanks for having me. Um. Look, 0:02:01.200 --> 0:02:04.640 what's driving bitcoin is with driving I think all aspects 0:02:04.680 --> 0:02:07.200 in the macro market more broadly, a lot of drive 0:02:07.240 --> 0:02:10.560 powder on the sidelines, over five trillion of cash, higher 0:02:10.800 --> 0:02:14.359 record savings UM, and we're seeing asset prices going up 0:02:14.400 --> 0:02:17.240 across the board. Bitcoin is not immune to that. So 0:02:17.280 --> 0:02:20.680 I think the macro environment is definitely driving some of 0:02:20.720 --> 0:02:24.280 the inflows into bitcoin, but more than anything else, over 0:02:24.320 --> 0:02:27.600 the last six months, we have seen the sentiment and 0:02:27.720 --> 0:02:32.519 demand for bitcoin shift dramatically. We have corporate treasurers and 0:02:32.639 --> 0:02:36.600 the renown spot managers, Bridgewater, black Rock, all of the 0:02:36.639 --> 0:02:41.240 world's largest asset managers now talking about and allocating to bitcoin. 0:02:41.720 --> 0:02:44.120 So overall, really, the way I think about it is 0:02:44.160 --> 0:02:48.600 sentiment more a brilliant, more ulish than ever. Sentiment translates 0:02:48.600 --> 0:02:52.280 into demand. There is more demand than ever. Bitcoin has 0:02:52.320 --> 0:02:56.160 a limited supply um. Only eighteen and a half million 0:02:56.240 --> 0:03:00.520 in circulation today applies CAPTI twenty one million. Happens when 0:03:00.560 --> 0:03:02.840 you have something rare that there's a lot of demands for. 0:03:03.360 --> 0:03:05.959 As demand goes up, price goes up. And then the 0:03:06.040 --> 0:03:08.800 last thing I'll just mention from the market structure perspective, 0:03:08.919 --> 0:03:13.680 we're seeing record inflows week after week into structured products. 0:03:13.840 --> 0:03:17.720 Last week alone three million. First two months of this year, 0:03:17.919 --> 0:03:19.720 especially the first month and a half when we have 0:03:19.840 --> 0:03:23.160 to into February, over two billions of inflows compared to 0:03:23.280 --> 0:03:28.480 seven billion for the entirety of last year. So yeah, 0:03:28.520 --> 0:03:29.840 I want to ask you about one of those. So 0:03:30.000 --> 0:03:34.080 I was looking at your exchange traded product. You've got 0:03:34.720 --> 0:03:40.000 physically backed e t P that offers exposure bitcoin. So 0:03:40.040 --> 0:03:43.640 what does that mean? Does that mean you hold bitcoin 0:03:44.000 --> 0:03:46.200 basically in cold storage? For me if I buy the 0:03:46.200 --> 0:03:50.440 e t P exactly and more than that, we are 0:03:50.520 --> 0:03:55.000 the world's first asset manager to actually give you a 0:03:55.200 --> 0:03:59.000 certified aspectation from Armanino LP, one of the world's large 0:03:59.040 --> 0:04:04.080 audit firms, every thirty minutes our blockchain wallet and confirmed 0:04:04.480 --> 0:04:07.000 that that bitcoin is there. You can check that on 0:04:07.040 --> 0:04:09.920 our website as well. So we are the first ones 0:04:10.000 --> 0:04:12.880 to provide a blockchain based at a station where you 0:04:12.880 --> 0:04:15.280 can actually see we hold the bitcoin, you say, which 0:04:15.320 --> 0:04:18.920 is pretty cool. Alright, So meltem it was a big 0:04:18.920 --> 0:04:21.479 news when Elon Muska and Tesla they put a billion 0:04:21.520 --> 0:04:24.719 five of bitcoin on their balance sheet. When will we 0:04:24.800 --> 0:04:30.800 see a G twenty economy brace bitcoin? You know what, 0:04:31.040 --> 0:04:33.400 I think, by the end of this year it will 0:04:33.600 --> 0:04:38.040 happen that you can you can print that that's bit 0:04:38.120 --> 0:04:39.599 to a print. I've predicted by the end of this 0:04:39.680 --> 0:04:42.320 year it will happen. Look at the end of the day. Um, 0:04:42.360 --> 0:04:44.599 I think there are a lot of jurisdictions right now 0:04:44.640 --> 0:04:47.600 that are competing for talent and for business. You look 0:04:47.600 --> 0:04:50.479 at the exodus of financial services firms from New York. 0:04:50.560 --> 0:04:53.880 New York is not a friendly state for finance or 0:04:53.880 --> 0:04:57.159 for cryptocurrency for that matter. So businesses are going to 0:04:57.279 --> 0:05:01.000 go to jurisdictions where they are welcomed. And certainly as 0:05:01.040 --> 0:05:03.960 we look at the economic turmoil, UM, that's the resulting 0:05:04.160 --> 0:05:08.279 from this, this pandemic. The crypto industry is the growing industry, 0:05:08.360 --> 0:05:12.520 contributes billions of dollars in tax revenue, UM, creates a 0:05:12.520 --> 0:05:15.200 lot of jobs. So I would not be surprised if 0:05:15.240 --> 0:05:19.120 one country, one twenty economy really tries to make itself 0:05:19.200 --> 0:05:23.080 appealing to crypto entrepreneurs who are dealing with an increasingly 0:05:23.240 --> 0:05:27.040 challenging regulatory environment. Got a target for us? Where do 0:05:27.080 --> 0:05:30.960 you think bitcoin is going into? Uh? You know, I 0:05:31.080 --> 0:05:33.360 say name or price, but no date or name and 0:05:33.440 --> 0:05:35.640 date and no price. Look, here's what else say. I 0:05:35.680 --> 0:05:37.599 have a hat that's been made for me that says 0:05:37.600 --> 0:05:39.880 bitcoin Henry K and I expect all you wearing that 0:05:40.000 --> 0:05:43.320 hat for the end of this year. Wow, very good. 0:05:43.360 --> 0:05:46.280 What's the biggest risk to bitcoin, meltem It's had such 0:05:46.320 --> 0:05:49.680 a great room. What's the biggest risk thirty seconds the 0:05:49.680 --> 0:05:53.920 biggest risk, honestly, I think um cyclicality. Right so we're 0:05:53.960 --> 0:05:56.800 in an a bullish, a bulliant market cycle right now. 0:05:57.240 --> 0:05:59.760 There is a cyclical trend and bitcoin in a secular 0:06:00.000 --> 0:06:03.000 and beast. The clickal trends, I think can be challenging 0:06:03.120 --> 0:06:07.159 to confidence. It's particularly investor confidence. So I think the 0:06:07.200 --> 0:06:10.720 thing we're really looking for is the futures curve and 0:06:11.520 --> 0:06:14.520 its trade or suniments. That's really gonna drive Tyson. Hey, 0:06:14.560 --> 0:06:16.440 malt Tom, thanks so much for joining us. As always, 0:06:16.480 --> 0:06:18.800 we love to get your thoughts on all things crypto. 0:06:18.880 --> 0:06:24.559 Meltemp demers, chief strategy officer for coin Share Group. US 0:06:24.760 --> 0:06:28.279 retail sales they surged in Januate by the most in 0:06:28.440 --> 0:06:31.960 seven months, beating all estimates. So really just some strong 0:06:32.040 --> 0:06:34.640 numbers showing that the consumer, at least in January was 0:06:34.760 --> 0:06:37.440 quite active. Let's break down those numbers see what's behind them. 0:06:37.440 --> 0:06:39.640 We can do that with Craig Johnson. He's the president 0:06:39.800 --> 0:06:42.920 of Customer Growth Partners, joining us on the phone from Connecticut. Craig, 0:06:42.920 --> 0:06:44.680 thanks so much for joining us here. You look at 0:06:44.680 --> 0:06:49.000 the numbers today much better than expected. What do you 0:06:49.080 --> 0:06:53.840 think are the real drivers behind the consumer here? Well, 0:06:54.440 --> 0:06:57.520 I guess as a number of drivers, we weren't surprised. Frankly. 0:06:57.640 --> 0:07:00.200 We we just issued our annual forecast for reach all 0:07:00.760 --> 0:07:03.400 um ten days or so ago, and we called for 0:07:03.480 --> 0:07:05.800 growth of eight point one percent year of a year. 0:07:06.000 --> 0:07:10.560 And that's exceptional growth, the strongest this century. Um. But 0:07:10.800 --> 0:07:12.880 if you look at the drivers behind you that you've 0:07:12.880 --> 0:07:16.360 got to start with personal income. Personal income has been rising. Uh. 0:07:16.480 --> 0:07:19.440 Job growth has been decent, not great, but over the 0:07:19.520 --> 0:07:22.800 last you know, six or six months plus has been strong. Um. 0:07:23.160 --> 0:07:27.120 And uh. Last but other factor is is that the 0:07:27.160 --> 0:07:30.160 amount of personal savings that people have, households have on 0:07:30.200 --> 0:07:33.840 the balance sheet is exceptional. A year ago was about 0:07:33.880 --> 0:07:36.880 one point two trillion. Now it's double to two point 0:07:36.920 --> 0:07:41.480 four trillion. That's an an incremental one point two trillion 0:07:41.520 --> 0:07:45.640 dollars in dry powder available for spending. Uh. So these 0:07:45.640 --> 0:07:47.720 are some of the factors. Are other things are going anyway? 0:07:47.800 --> 0:07:50.760 You know that people feeling better about vaccinations and so forth, 0:07:50.800 --> 0:07:52.920 and those are the factor key factors. I think it 0:07:52.960 --> 0:07:57.840 bears repeating your forecast, bears repeating you expect an eight 0:07:57.880 --> 0:08:02.200 point one percent growth annually in retail sales. And this 0:08:02.280 --> 0:08:07.600 is not including cars, gas, restaurants. Um that is huge 0:08:07.640 --> 0:08:10.280 and as you said, the biggest this century. Where do 0:08:10.320 --> 0:08:13.040 you think consumers are going to spend that money? What 0:08:13.120 --> 0:08:17.920 are they gonna buy? The Well, it's broad based across categories, 0:08:17.920 --> 0:08:21.080 but the strongest growing categories. First of all, anything associated 0:08:21.080 --> 0:08:27.240 with a home, home of approvement, home furnishings, uh, etcetera. Uh, 0:08:27.320 --> 0:08:29.520 the online side of it is going to grow about 0:08:29.560 --> 0:08:33.240 twenty year of a year, again, very strong growth, and 0:08:33.679 --> 0:08:36.600 this January it was two year of a year. Uh, 0:08:36.679 --> 0:08:40.320 so that's that's a major category. Um. Uh. Personal care 0:08:40.400 --> 0:08:43.800 healthy and personal care is growing category. That's gonna rise. 0:08:44.280 --> 0:08:47.480 And Uh. The other factor that comes into into it 0:08:47.520 --> 0:08:50.040 is is a small category but very strong, and that's 0:08:50.040 --> 0:08:53.360 sporting goods. This has been a stellar year for sporting goods. 0:08:53.400 --> 0:08:57.880 Anything associated with the outdoors, outdoor living has been strong. Creig. 0:08:57.920 --> 0:08:59.880 How much of that of your eight point one percent 0:09:00.040 --> 0:09:07.360 annual forecast is predicated upon additional fiscal stimulus? Um? Uh 0:09:07.720 --> 0:09:12.280 really only modestly. We're assuming that there's gonna be First 0:09:12.280 --> 0:09:17.680 of all, there's existing uh incremental unemployment benefits, etcetera already 0:09:17.679 --> 0:09:22.520 in the system, and we're anticipating some increase, but only 0:09:22.600 --> 0:09:25.400 a modest increase. And we're in assuming it has to 0:09:25.440 --> 0:09:27.960 be the full you know, with one point nine you know, 0:09:28.080 --> 0:09:31.160 trillion dollars. Uh, it's just even a fraction of that 0:09:31.800 --> 0:09:35.320 is included in our forecast. Uh. Most of the growth 0:09:35.360 --> 0:09:38.000 that we're seeing comes from the basics, in other words, 0:09:38.120 --> 0:09:41.320 job growth and then income growth that goes along with 0:09:41.440 --> 0:09:44.800 job growth. UH. And that's the key factor along with 0:09:44.920 --> 0:09:51.280 this this again the UH buoyant, buoyant factor of having 0:09:51.640 --> 0:09:55.120 one point two trillion dollars extra dry powder available to spin. 0:09:55.480 --> 0:09:58.160 Those are the those are the real key drivers. Are 0:09:58.160 --> 0:09:59.800 you worried about rates at all? I mean, if people 0:09:59.800 --> 0:10:03.600 are going to spend money, um, and that's gonna boost prices, 0:10:03.640 --> 0:10:07.320 you'd assume if demand goes up and not, as you know, 0:10:07.360 --> 0:10:10.120 more than supply does, does the FED then eventually have 0:10:10.280 --> 0:10:14.920 to go to neutral and even thinking about shifting into drive. Um, 0:10:15.080 --> 0:10:20.160 we're anticipating we're already beginning to see some uh increases 0:10:20.240 --> 0:10:23.040 in pricing, obviously in in the in the energy sector 0:10:23.400 --> 0:10:27.000 that started to take up a very strongly over recent 0:10:27.679 --> 0:10:31.200 days and weeks UH, and home related things. Otherwise, price 0:10:31.240 --> 0:10:33.560 of lumbers going up. So we are going to see 0:10:33.600 --> 0:10:37.120 some inflation coming into the mix. We don't anticipate it 0:10:37.360 --> 0:10:40.800 that it's going to be sufficient enough to be you know, 0:10:40.840 --> 0:10:44.360 like the olden days of you know, the early nine anything, 0:10:44.440 --> 0:10:46.400 nothing near that, But we do it just is going 0:10:46.440 --> 0:10:49.200 to take up a little bit. But we're not you know, 0:10:49.760 --> 0:10:54.240 the predicting freed UH decisions is above above my pay grade. 0:10:54.920 --> 0:10:59.840 But we do anticipate some inflation creeping into into the mix. Correct. 0:11:00.000 --> 0:11:03.160 It's the biggest risk to your retail sales forecast this year. 0:11:04.320 --> 0:11:07.040 The biggest risk is if job growth jobs off again, 0:11:07.160 --> 0:11:10.480 job growth and personal income growth. That's that's that's the 0:11:10.520 --> 0:11:13.959 predetermined factor of retail sales and really evolved consumers spending 0:11:14.760 --> 0:11:17.959 UH and UH. The job growth has been a little 0:11:18.000 --> 0:11:20.040 flattish over the last month. It too strong for the 0:11:20.120 --> 0:11:22.360 last six or eight months, but but but a little 0:11:22.400 --> 0:11:25.520 bit flattish the last month or two. And if that 0:11:25.679 --> 0:11:29.400 somehow takes a real downturn rather than steadily improving, that 0:11:29.440 --> 0:11:32.600 would be the biggest factor. And so that's that's something 0:11:32.640 --> 0:11:34.800 we're keeping our eyes on on it. But there's nothing 0:11:34.880 --> 0:11:39.320 on the horizon. Uh that that that says job growth 0:11:39.360 --> 0:11:42.280 is suddenly gonna start to drive dry up. You know, 0:11:42.600 --> 0:11:45.080 hopefully it'll continue and there won't be the kind of 0:11:45.080 --> 0:11:48.280 shocks that will uh that will trigger any kind of 0:11:48.320 --> 0:11:51.679 major job losses, and that would be the biggest risk. 0:11:51.679 --> 0:11:53.440 Craig Johnson, thank you so much for joining us. We 0:11:53.480 --> 0:11:57.520 appreciate your thoughts and sharing retail sales forecast with us 0:11:57.760 --> 0:11:59.880 on the back of a very strong retail sales number 0:11:59.920 --> 0:12:02.880 for or January. Craig Johnson, He's the president of Customer 0:12:03.080 --> 0:12:06.400 Growth of Partners Based. He's up in a New Canaan, Connecticut. 0:12:06.480 --> 0:12:09.480 Again some very strong retail sales number suggesting that the 0:12:09.760 --> 0:12:16.080 consumer is in pretty good shape despite the pandemic. Well, 0:12:16.200 --> 0:12:19.720 Texas and many other parts of the Midwest are experiencing 0:12:19.840 --> 0:12:23.760 unprecedented blackouts do in very large parts of just some 0:12:23.920 --> 0:12:27.640 brutal winter weather that has been just pounding that region 0:12:27.640 --> 0:12:29.600 of the country for days. Here, let's get the latest 0:12:29.840 --> 0:12:32.160 on what is going on on what the future might hold. 0:12:32.400 --> 0:12:34.960 We do that with Liam Denning. He's the energy, mining 0:12:35.040 --> 0:12:38.800 and commodities calumnists for Bloomberg Opinion. Liam, thanks so much 0:12:38.800 --> 0:12:40.960 for joining us here. I know We're just a few 0:12:41.000 --> 0:12:45.240 days into this real crisis in Texas and other states. 0:12:45.920 --> 0:12:48.480 What do we know as to what happened? It just 0:12:48.480 --> 0:12:50.720 seems like it was a you know what some people 0:12:50.720 --> 0:12:55.480 are calling a perfect storm. Yeah, I mean these events 0:12:55.480 --> 0:12:59.280 have happened in the past in not to this magnitude, 0:12:59.320 --> 0:13:04.240 but all that all the way back to which is 0:13:04.400 --> 0:13:09.960 the first time, Um, we we saw blackouts in that 0:13:10.080 --> 0:13:14.720 market or controlled blackouts to deal with a spike in demand. Um, 0:13:14.760 --> 0:13:17.960 you know that the complex answer will take a few 0:13:17.960 --> 0:13:21.360 months to come out, but the simple answer is that 0:13:21.400 --> 0:13:24.800 there was a spike in demand due to cold weather 0:13:25.520 --> 0:13:28.920 and also a lot of plants went offline again because 0:13:28.920 --> 0:13:32.200 of cold weather. The system in the power system in 0:13:32.240 --> 0:13:37.800 Texas is geared mainly to dealing with big increases in 0:13:37.840 --> 0:13:42.040 demand during the summer for air conditioning. Um, it's not 0:13:42.200 --> 0:13:48.640 really built or for dealing with a surgeon demand in 0:13:48.640 --> 0:13:51.959 in in winter. And that's the problem here. So my 0:13:51.960 --> 0:13:56.280 my first thought was, Um, the grid is garbage? Is 0:13:56.320 --> 0:13:59.600 that right? Or do they have a really great grid 0:13:59.679 --> 0:14:04.400 into access? Uh, it's not so much a question that 0:14:04.440 --> 0:14:10.120 the grid is garbage. You know what we've seen is 0:14:10.120 --> 0:14:14.400 is really a bunch of a bunch of plants go offline, 0:14:14.520 --> 0:14:18.080 and that's due to several factors. So you know, we 0:14:18.120 --> 0:14:21.640 saw over the weekend, UH and in the last couple 0:14:21.640 --> 0:14:26.800 of days, you know, people blaming wind turbines because they 0:14:26.960 --> 0:14:30.240 stopped turning because of a build up advice. That's true 0:14:30.280 --> 0:14:33.160 to some degree, but actually the wind turbines are a 0:14:33.200 --> 0:14:35.920 pretty small part of it. We all. We also saw 0:14:35.960 --> 0:14:40.280 the much bigger part was with gas plants shutting down, 0:14:40.360 --> 0:14:43.360 and that was due to a range of factors. Um 0:14:43.400 --> 0:14:47.400 partly because gas was being diverted to heating people's homes, 0:14:47.560 --> 0:14:51.960 so they're simply was have fuel available, but also plants 0:14:52.040 --> 0:14:54.680 just not being built for this weather. So you see 0:14:55.560 --> 0:14:59.080 valves freeze up, gauges freeze up, even a nuclear plants 0:14:59.080 --> 0:15:02.120 shut down rain. Yeah, I saw a report of of 0:15:02.120 --> 0:15:06.360 of one nuclear reactor shutting down temporarily. I wasn't entirely 0:15:06.360 --> 0:15:10.320 sure what happened there, um, but but you know, these 0:15:10.320 --> 0:15:15.080 thermal plants rely on water for cooling, so there may 0:15:15.080 --> 0:15:17.520 be an issue there if if stuff is freezing up. 0:15:17.920 --> 0:15:20.240 So it's not so much that the grid is bad, 0:15:20.400 --> 0:15:25.680 it's it's that the the the infrastructure isn't built to 0:15:26.160 --> 0:15:29.120 um to take on this kind of event. I mean, 0:15:29.280 --> 0:15:30.840 if you want to think about it this way, it's 0:15:30.880 --> 0:15:35.120 kind of an insurance problem, right. You have these events 0:15:35.200 --> 0:15:40.400 that happen from time to time, and it costs money 0:15:40.440 --> 0:15:42.800 to build things in a way that they can deal 0:15:42.840 --> 0:15:45.760 with it. And the fact is that the Texan market, 0:15:46.480 --> 0:15:49.560 you know, it's deregulated. The focus is much more on 0:15:49.720 --> 0:15:55.240 keeping prices low. And so when a plant operator is 0:15:55.360 --> 0:15:58.840 making that decision, well, do I invest X to deal 0:15:58.880 --> 0:16:00.880 with an event that might have and once every ten 0:16:01.000 --> 0:16:03.480 or twenty years, or do I keep my cost down 0:16:04.000 --> 0:16:05.480 Most of the time they're gonna say, I'll keep my 0:16:05.520 --> 0:16:08.480 cost down. So Liam, you know, some arguments are being 0:16:08.520 --> 0:16:11.720 raised that climate change has to be addressed here as 0:16:11.760 --> 0:16:16.040 it relates to Texas and others power grids. I eat 0:16:16.360 --> 0:16:21.160 climate change producing I guess greater swings in whether it's 0:16:21.240 --> 0:16:25.200 maybe hotter summers colder winters, and that has to be 0:16:25.240 --> 0:16:29.960 incorporated into the design and maintenance of these systems. Is 0:16:30.000 --> 0:16:35.360 that getting any traction in places like Texas? Um, I'm 0:16:35.360 --> 0:16:38.200 sure it will gain traction among some. I'm not sure 0:16:38.280 --> 0:16:42.360 it's gaining much traction in the Governor's office as yet. UM. 0:16:42.440 --> 0:16:46.760 But it's it's un ignorable. I mean, look, Texas never 0:16:46.880 --> 0:16:50.520 likes to um to be compared to California, but in 0:16:50.520 --> 0:16:56.520 this respect they're united. You know, California faces growing problems 0:16:56.520 --> 0:16:59.360 with wildfires due to climate change, and we've seen the 0:16:59.400 --> 0:17:02.560 havocates reeked on the grid there. Texas is going to 0:17:02.720 --> 0:17:06.639 face extreme temperature variations as well. And it's not just 0:17:07.160 --> 0:17:09.359 the power system that isn't built for it. You know, 0:17:09.800 --> 0:17:12.960 there's a lot of big houses in Texas that take 0:17:13.000 --> 0:17:16.280 a lot of heating and cooling. They aren't well and insulated. 0:17:16.680 --> 0:17:20.360 You know, there's an urban planning issue here as well, 0:17:20.400 --> 0:17:23.920 and you know it's it's tempting to go on TV 0:17:24.119 --> 0:17:27.520 and say, well, it's all the wind turbine spault, but um, 0:17:27.560 --> 0:17:30.080 you know, ideology is a good way of getting people's 0:17:30.080 --> 0:17:32.359 blood boiling, but it won't actually keep them warm, you 0:17:32.359 --> 0:17:34.240 know what I mean. I'd say I'm a huge fan 0:17:34.320 --> 0:17:38.119 of Texas. Visit Dallas as often as I can, and 0:17:38.160 --> 0:17:41.320 I just love how big everything is, from the houses 0:17:41.400 --> 0:17:43.240 to the truck's. The only thing not big is the 0:17:43.280 --> 0:17:46.280 gas bill when I when I fill up my gigantic 0:17:46.400 --> 0:17:49.800 F three fifty duly there. Well, I want to ask 0:17:49.800 --> 0:17:51.760 you throw you a bit of a curve ballium since 0:17:51.800 --> 0:17:54.080 we got you, and I'm looking through all your opinion columns. 0:17:54.320 --> 0:17:58.080 I just just recently watched this Bill Gates documentary on Netflix. 0:17:58.080 --> 0:18:00.240 I'm sure, well, I hope we've all seen it. It's 0:18:00.240 --> 0:18:03.479 really good. What do you think about nuclear? I mean, 0:18:03.560 --> 0:18:06.959 seems like everyone just passes it over right away, but 0:18:07.320 --> 0:18:09.639 the world's smartest man's figured out a way to make 0:18:09.680 --> 0:18:14.960 it safe. Well, here's the issue with nuclear. So there 0:18:15.000 --> 0:18:17.879 is a safety issue, and there's a public perception issue, 0:18:18.280 --> 0:18:21.400 But I think the bigger problem with nuclear is really 0:18:21.440 --> 0:18:24.200 a capital markets issue. Right If you if you think 0:18:24.240 --> 0:18:26.320 about it, if you're going to build a nuclear plant, 0:18:26.359 --> 0:18:31.159 it's going to cost you, you know, five nine billion 0:18:31.200 --> 0:18:33.520 dollars to build this thing. It's probably going to take 0:18:33.560 --> 0:18:36.840 you the best part of a decade to build it. 0:18:36.920 --> 0:18:41.200 For that kind of investment to pencil out, you've got 0:18:41.240 --> 0:18:44.520 to be really certain about what's going to be happening 0:18:44.520 --> 0:18:50.919 with power prices and demand over the next forty or 0:18:50.960 --> 0:18:55.879 fifty years. And what we've seen in the past several 0:18:55.920 --> 0:19:01.040 decades is in deregulated electricity markets, nuclear has become less 0:19:01.040 --> 0:19:03.320 popular because it costs a lot of money and you 0:19:03.359 --> 0:19:08.080 have to take a big upfront risk on you know, expose, 0:19:08.160 --> 0:19:11.880 expose risk, exposure to two prices and demand. And that's 0:19:11.880 --> 0:19:14.600 why a lot of these plants you know, don't get built, 0:19:14.640 --> 0:19:17.360 particularly because they also tend to run over budget, take 0:19:17.480 --> 0:19:20.199 longer to build. That's why we tend to see more 0:19:20.280 --> 0:19:24.879 nuclear panths being built in in regulated markets, you know, 0:19:25.000 --> 0:19:29.000 like like China and that sort of thing. So, you know, 0:19:29.280 --> 0:19:33.120 nuclear is fine and it has real advantages in terms 0:19:33.119 --> 0:19:36.840 of dealing with addressing issues of climate change. The one 0:19:36.880 --> 0:19:39.639 issue it cannot deal with or has struggled to deal with, 0:19:40.040 --> 0:19:42.600 is it costs a lot of money and it represents 0:19:42.600 --> 0:19:46.040 a lot of risk. Liam Denning, thank you so much. 0:19:46.320 --> 0:19:49.639 We appreciate your thoughts as always on this crazy, crazy 0:19:49.680 --> 0:19:53.520 story in Texas and other parts of Midwest. Hopefully they 0:19:53.560 --> 0:19:57.040 get some release soon. Liam Denning, Energy Mining and Commodities 0:19:57.080 --> 0:20:00.439 Calms for Bloomberg Opinion. You can read liam work and 0:20:00.600 --> 0:20:03.399 that of our Bloomberg Opinion columnists. They do great, great 0:20:03.400 --> 0:20:07.520 work Bloomberg dot Com, Slash Opinion or O P. I 0:20:07.800 --> 0:20:10.080 N Go on the Turn. Why I recommend you take 0:20:10.119 --> 0:20:12.399 a look at that work again. Liam Denning on the 0:20:12.480 --> 0:20:14.920 energy business, and what is going on down in Texas 0:20:14.920 --> 0:20:17.960 with those rolling blackouts that news reports suggest will go 0:20:18.000 --> 0:20:23.480 on at least for another couple of days. Well to me, 0:20:23.680 --> 0:20:25.840 I guess one of the more interesting developments in the 0:20:25.920 --> 0:20:27.919 US economy over the last decade or so is the 0:20:27.920 --> 0:20:31.399 growth of the gig economy. Think Uber and Lift and 0:20:31.440 --> 0:20:33.639 the in the real key to the economic model for 0:20:33.680 --> 0:20:36.560 a gig company like Uber and Lift is that they're 0:20:36.720 --> 0:20:41.040 drivers in this case are deemed contractors and not employees, 0:20:41.040 --> 0:20:43.320 and that has a lot of implications. Let's dig down 0:20:43.640 --> 0:20:46.520 deep on that issue. We can do that with josh Idolson, 0:20:46.840 --> 0:20:50.119 labor reporter for Bloomberg News. So, Josh, you know in 0:20:50.240 --> 0:20:54.000 California or I know you're based California voted. The voters 0:20:54.040 --> 0:20:57.720 actually voted to classify Uber Lift drivers as contractors. What 0:20:57.800 --> 0:21:02.119 are the implications of that. The implications of that vote 0:21:02.160 --> 0:21:06.760 substantively and politically have been huge. There was a two 0:21:07.280 --> 0:21:10.960 million dollar ballot measure campaign by gig companies in California 0:21:11.080 --> 0:21:15.840 which secured passage of Prop. Twenty two. This measure making 0:21:16.000 --> 0:21:20.400 workers under California law contractors and not employees if they're 0:21:20.400 --> 0:21:26.120 doing app based driving, whether it's for delivery or passengers. 0:21:26.720 --> 0:21:30.280 That means people are excluded from a whole range of 0:21:30.320 --> 0:21:35.720 protections that California employment law provides employees, though they are 0:21:35.760 --> 0:21:43.240 provided an alternate suite of more circumscribed benefits. Why why, 0:21:43.280 --> 0:21:46.320 why why would I mean? I think of California as 0:21:46.359 --> 0:21:50.480 a super progressive state, and um, whenever I, well, I 0:21:50.480 --> 0:21:53.480 take uber's a lot, or I did before the lockdown. 0:21:53.760 --> 0:21:55.720 Whenever I take an uber, I think this poor guy 0:21:55.800 --> 0:21:58.000 is working like sixteen hours a day just to pay 0:21:58.000 --> 0:22:02.679 off his lease. Um, why would such progressive people vote 0:22:02.720 --> 0:22:07.359 to m make this guy's life so much harder? Well, 0:22:07.480 --> 0:22:09.960 some of the polling suggests that some of the people 0:22:10.000 --> 0:22:14.199 who voted for Prop two thought that it would ensure 0:22:14.280 --> 0:22:19.400 benefits for workers that they might otherwise not have. Certainly, 0:22:19.440 --> 0:22:23.480 part of the messaging from the companies, both in advertising 0:22:23.600 --> 0:22:27.880 and in messages they put in their own apps, suggested 0:22:27.960 --> 0:22:31.280 that workers would not have these jobs at all if 0:22:31.320 --> 0:22:36.720 the ballot measures didn't pass. This is something that has 0:22:36.760 --> 0:22:39.320 been part of the debate for a long time, is 0:22:39.480 --> 0:22:44.880 these companies saying their business model and therefore their workers likelihoods, 0:22:44.920 --> 0:22:49.800 depend on treating workers as contractors. Meanwhile, you have some 0:22:49.960 --> 0:22:53.560 workers and advocates and lawmakers who say this is just 0:22:53.840 --> 0:22:57.280 a new modern version of an argument that companies have 0:22:57.359 --> 0:23:01.159 always made that they need an accept shin station and 0:23:01.280 --> 0:23:04.359 have to pay people the same minimum amount for each 0:23:04.400 --> 0:23:07.120 hour of their work that others do, and the fact 0:23:07.200 --> 0:23:10.920 that it happens during an app doesn't change the potential 0:23:11.080 --> 0:23:16.320 nature of that debate. So how does the proposed fifteen 0:23:16.600 --> 0:23:19.040 minimum wage does it? That does that impact you know 0:23:19.160 --> 0:23:23.240 California or just gig economy workers in general. Well, minimum 0:23:23.240 --> 0:23:27.080 wage is a great example. The federal minimum wage, like 0:23:27.359 --> 0:23:30.640 the federal labor rights in the National Labor Relations Act, 0:23:31.080 --> 0:23:37.160 applies to employees, not to contractors. So under federal law, 0:23:37.320 --> 0:23:41.320 like under state law, if you're considered a contractor, you 0:23:41.359 --> 0:23:45.560 are excluded from many of the protections that the New 0:23:45.600 --> 0:23:50.080 Deal in trines for workers. Now, what makes this particularly 0:23:50.119 --> 0:23:53.200 complicated is someone can be an employee under one law 0:23:53.760 --> 0:23:57.600 and not under another. So while the companies have one 0:23:57.720 --> 0:24:01.199