Speaker 1: This is Bloomberg Business Week. I'm Carole Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanibek. We're here every day bringing
Speaker 1: you the latest news from the world to business and finance,
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Speaker 1: pm Eastern Time on Bloomberg Radio, or watch us on
Speaker 1: YouTube search Bloomberg Global News. This next guest we actually
Speaker 1: caught up with in Dallas last month at the b
Speaker 1: N y Mail and Pershing Insight twenty two conference. We
Speaker 1: talked about investing what's often called vice company. So great
Speaker 1: to have back with us. Dan Aaron's is managing director
Speaker 1: and portfolio manager at Advisor Shares in Investments. Joining us
Speaker 1: from Dallas. Dan, how are you. I'm doing well. Thanks
Speaker 1: for having me on again. Guys, Well, it's great to
Speaker 1: have you back. My first question is did you get
Speaker 1: COVID at that event? Because I did, Oh, I did not.
Speaker 1: I'm sorry that makes two of us. Dan, I'm glad
Speaker 1: to hear that you were okay after that, because Carol
Speaker 1: came back from Texas with a little gift that ended
Speaker 1: up lessing what aryl about a month. Yeah, I ended
Speaker 1: up with back to back COVID because I had a
Speaker 1: rebound case. Um. It was not fun, but it was
Speaker 1: so fun that we got to meet and catch up
Speaker 1: with you, UM and talk a little bit about vice investing.
Speaker 1: We've been checking out some of your e t F
Speaker 1: they're actively managed. They invest in things like cannabis. There's
Speaker 1: a handful of them. Uh, there's also psychedelics, there's hotel,
Speaker 1: there's restaurants. They've all had a pretty good month overall.
Speaker 1: Tell us about your world and if you're seeing inflows
Speaker 1: into these funds and how you're thinking about them in
Speaker 1: today's current environment. Certainly, and there's UM quite a few
Speaker 1: different funds that we have, but a lot of people
Speaker 1: have been interested in, you know, investing in certain themes.
Speaker 1: It's a good thing you can do in e t
Speaker 1: F And you know, we've always espoused a little bit
Speaker 1: about investing in vice and what it really means though,
Speaker 1: is just investing in people's habits, investing in what people
Speaker 1: do no matter what the stock markets doing or no
Speaker 1: matter what the economy is doing. And that's why there's
Speaker 1: probably some more eyeballs on our types of funds because
Speaker 1: the Fed's raising rates. There's all this talk about is
Speaker 1: it a recession, is it not a recession, or are
Speaker 1: they moving the goal line? But but Danner, eyeballs meaning
Speaker 1: that people are actually investing money in your funds. Yeah,
Speaker 1: so um, you know, we think people should be looking
Speaker 1: at the vice investments now forment for investment. Our cannabis
Speaker 1: funds have once again been seeing some inflows, some movement
Speaker 1: in this past month, and that might be what you're
Speaker 1: referring to. So um, you know, a few different things
Speaker 1: to talk about here, But we've always said that alcohol,
Speaker 1: even tobacco stocks, things like gaming. So these are things
Speaker 1: that have long history of weathering difficult times or rough
Speaker 1: markets historically. They've done it for decades, holding up better
Speaker 1: in recessionary or or rough times. I can't say they're
Speaker 1: always going to go up when the market is going
Speaker 1: down or anything crazy like that, but they have a
Speaker 1: long history of holding up. What is now, Dann, I
Speaker 1: want to jump in here because we don't have a
Speaker 1: ton of time, and I'm really curious about consumer behavior.
Speaker 1: It's something that I've been taking a lot about because
Speaker 1: the consumer is absolutely in charge when it comes to
Speaker 1: this economy. But I get what you're saying about tobacco.
Speaker 1: I mean it's, after all, it's addictive, so you know,
Speaker 1: in a recessionary times and it's held up. Um, alcohol,
Speaker 1: I'm wondering do people trade down because we've been hearing
Speaker 1: about from Walmart, for example, that people are trading down
Speaker 1: when it comes to generics versus name brands. I'm wondering
Speaker 1: if we see that type of behavior when it comes
Speaker 1: to vices we commonly do. Now it's been too short term.
Speaker 1: We don't really have the statistics yet for what's going
Speaker 1: on right now. But what we'll typically see, um, Actually,
Speaker 1: in the last few years, craft bears have been very hot,
Speaker 1: and craft liquors, a lot of your smaller batch designer
Speaker 1: alcohols have been more in vogue. But if things last,
Speaker 1: if we actually go into a real recession, um, what
Speaker 1: you're gonna see is more of the middle brands and
Speaker 1: more of the mass produced beer holding up better than
Speaker 1: some of the other things. We might see, as you said,
Speaker 1: some people trading down from the from the higher end liquors.
Speaker 1: That's true when I asked about psychedelics, because we recently
Speaker 1: in Bloomberg Pursuits did a whole thing on magic mushrooms.
Speaker 1: The entire Pursuit section last week dedicated to it. It's
Speaker 1: pretty remarkable, right, and talks about the psychic psychedelics, but
Speaker 1: also consumer products. Um, what else we talk about alternative
Speaker 1: meats based off of funky and you know the root
Speaker 1: of mushroom. Really interesting stuff happening in the space. So
Speaker 1: what are you seeing and what's I'm curious about the
Speaker 1: opportunities for you since it's actively managed, are you finding
Speaker 1: more opportunities companies publicly held to actually invest in. Yeah,
Speaker 1: a few years ago, it wouldn't have been possible to
Speaker 1: have a psychedelics ets like we do. UM that ticker
Speaker 1: symbol p SILL, which is short for psilocybin. But now
Speaker 1: there are enough companies to invest in. But I want
Speaker 1: to stress the people, it's still a very small fund.
Speaker 1: These are microcap stocks, but we have a whole handful
Speaker 1: listed on the New York Stock Exchange or more often
Speaker 1: on NASDAC. But people need to understand investing in a
Speaker 1: psychedelics company is it's a lot different than cannabis that
Speaker 1: we also invest in psychedelics. We're talking about real biotech
Speaker 1: pharmaceutical companies here doing real research on mental health treatments
Speaker 1: that can be used with all sorts of psychedelics. Psilocybin
Speaker 1: mushrooms is the most common, but brain injury, PTSD, depression. Uh.
Speaker 1: We know that a lot of those drugs have been
Speaker 1: overprescribed by big pharma, and I think this is a
Speaker 1: good solution. Yeah, we've definitely covered that in the magazine
Speaker 1: Business Week. Um, Dan, thanks so much. Dan Aaron's managing director,
Speaker 1: portfolio manager Advisor shares Investments. This is Bloomberg Business Week
Speaker 1: with Carol Masser and Bloomberg Quick Takes Tim Stinovic on
Speaker 1: Bloomberg Radio. I don't know if you noticed it, Tim,
Speaker 1: You probably did because you watch this closely. Bitcoin and Ether,
Speaker 1: the world's two largest digital tokens, headed toward their best
Speaker 1: month since I'm in a revival of risk capatite and
Speaker 1: global markets and optimism about an Ethereum network upgrade. I
Speaker 1: saw this and I thought to myself, talk about, you know,
Speaker 1: correlation between US equity markets, because yeah, risk on and
Speaker 1: I think that's certainly what we're seeing. I'm interested what
Speaker 1: we hear from Doug Schwank. Though our next guests CEO
Speaker 1: at Digital Asset Research. They provide crypto data, clean crypto
Speaker 1: data for institutions. We should not that Bloomberg did announce
Speaker 1: a partnership with Digital Asset Research back in June to
Speaker 1: provide terminal users with clean crypto pricing. Doug, good to
Speaker 1: have you with us. How are you great? How are
Speaker 1: you doing pretty well? Thanks? Well, I want to start
Speaker 1: with pricing and what Carol mentioned that we're seeing the
Speaker 1: best month in what Carol about a year for Yeah,
Speaker 1: for for bitcoin and for for ether um. Is this
Speaker 1: just risk on? Is that what it is? Well, I
Speaker 1: think we're looking at the coming ethereum merge where we
Speaker 1: go to a proof of steak. That's really I think
Speaker 1: the biggest story in the near term. Obviously there's a
Speaker 1: huge macro impact here as well. Um the fact that
Speaker 1: the FED is raising rates um as people expect basis
Speaker 1: points yesterday. I think that's a big part of the story.
Speaker 1: Can you can you? I just want to follow up
Speaker 1: on that and have you explained proof of steak versus
Speaker 1: proof of work for audience if they haven't been following
Speaker 1: this closely. Yeah, So historically um ethereum and today um
Speaker 1: ethereum validates transactions with proof of work. So there are minors.
Speaker 1: You may have heard about this with bitcoin. It's it's
Speaker 1: uh both bitcoin ethereum. It's the way that uh that
Speaker 1: people in a decentralized network agree on transactions. So proof
Speaker 1: of of work involves solving a math puzzle to agree
Speaker 1: on what the right solution to it to um that
Speaker 1: puzzle is, and then if there's enough consensus as it
Speaker 1: as it were, the the word is consensus that that
Speaker 1: suggests what UM will what we will all agree are
Speaker 1: the right transactions to validate on the network. Proof of
Speaker 1: work is a much more um kind of computer intensive
Speaker 1: algorithm versus proof of steake, where we're going to see
Speaker 1: people um uh put their assets at risk. So I'm
Speaker 1: going to stake some assets and if I can confirm
Speaker 1: transactions on the network, If I say, look, this ethereum
Speaker 1: transaction goes through because it's it's a valid transaction, I
Speaker 1: put my assets at risk. And if I am wrong
Speaker 1: and I validate transactions that are nefarious, then I'll lose
Speaker 1: some amount of my assets. So proof of steak is
Speaker 1: a is a much more UM. It's much more driven
Speaker 1: by what I put at risk instead of do I
Speaker 1: solve the right math problem and and uh and therefore
Speaker 1: confirmed the right transactions. So you're all about First of all,
Speaker 1: there's a bunch of us who are like, okay, man,
Speaker 1: I gotta google more and understand this. I mean, it's funny.
Speaker 1: I did a future of Money panel at b and
Speaker 1: y Mail and Pershing Insight in June. Tim and I
Speaker 1: were there and we were talking, and I had a
Speaker 1: bunch of crypto experts, you really understand this, And they said,
Speaker 1: you know, the language where we are in this whole
Speaker 1: world is very very early on and and there's you know,
Speaker 1: we're kind of learning and finding our way Doug on this,
Speaker 1: including the terminology UM and and so we're kind of
Speaker 1: learning as we go. But but you talk about clean
Speaker 1: crypto pricing, and that's what you're getting to. I assume, well,
Speaker 1: we think about pricing coming from those who are transacting data.
Speaker 1: I think that's a little bit different than the validation,
Speaker 1: the proof of work, proof of mistake, you know, the
Speaker 1: the ethere emerge. We pull prices from the likes of
Speaker 1: a coin base or kracking or or similar types of exchanges,
Speaker 1: and we just we try to clean up those because
Speaker 1: in a it's a very unregulated world, and when the
Speaker 1: when exchanges are unregulated, we see some bad behavior. And
Speaker 1: so when we think about like wash trading or u
Speaker 1: K email issues or other types of things, we just
Speaker 1: want to make sure that the price that people see
Speaker 1: is is a high quality price. And and we've seen
Speaker 1: from people like Michael Saylor is micro Strategy micro Strategy. Yeah,
Speaker 1: he said, look, I can't rely on what I see
Speaker 1: out there, and that's been in the Wall Street Journal,
Speaker 1: has been on Bloomberg, has been in other places. Look,
Speaker 1: you know, we want to make sure that when people
Speaker 1: are relying on a price, they know that it's a
Speaker 1: high quality. I mean, that's what happens when they're different
Speaker 1: exchanges selling sort of the same thing, right, Doug, I mean, okay,
Speaker 1: we do. We only have a minute left, but I
Speaker 1: want to get your take on this because Carol and
Speaker 1: I were talking about this ahead of the interview, and
Speaker 1: it's just I think a lot of this is so
Speaker 1: confusing for the end consumer, and I wonder if if
Speaker 1: that is a barrier to adoption. That plus the volatility
Speaker 1: that we've seen over the last year. Is that a
Speaker 1: barrier to the adoption in the industry and just have
Speaker 1: about thirty seconds. Of course, it is a big barrier,
Speaker 1: and I think there's lots of help that we could
Speaker 1: see from you know, from regulator regulators and uh, you know,
Speaker 1: the congressional and other leaders who could bring kind of
Speaker 1: clarity to some of these issues and help us with
Speaker 1: UM a better UM framework for for prices. But absolutely
Speaker 1: it's a huge barrier. Well, we'll be sure to continue
Speaker 1: this conversation with you, Doug in the future. Dutch Wan
Speaker 1: Key's chief executive officer at our Digital Asset Research. It's
Speaker 1: a provider of crypto asset data and research. This is
Speaker 1: Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes
Speaker 1: Tim Stinovic on Bloomberg Radio. It's all about the climate.
Speaker 1: We're going to talk about the author of a book
Speaker 1: about climate restoration, a different way of really protecting our
Speaker 1: environment and really making a difference. Yeah, I get you know,
Speaker 1: it's interesting, Carol. We talked about technologies that can actually
Speaker 1: help us avoid a catastrophe when it comes to climate change.
Speaker 1: And the author who's going to be joining us in
Speaker 1: just a second. Your Fakowski argues that there are actually
Speaker 1: technologies out there that are safe and effective in reducing
Speaker 1: carbon Yeah, this is an interesting dude. He's an m
Speaker 1: I T. Educated physicist and engineers worked for NASA. Uh.
Speaker 1: He's also worked at the fair Child Slumbers, a AI
Speaker 1: intel lab in Paladato, California. So he looks at this
Speaker 1: from a very it sounds like scientific way. So let's
Speaker 1: get to Peter. He joins us now via zoom from
Speaker 1: Los Altos, California. Peter, it is good to have you
Speaker 1: here with us. We've only got a certain amount of time. Climate.
Speaker 1: Anything with the climate is a big topic that you
Speaker 1: could spend hours on. Tell us about your thesis. What
Speaker 1: is climate restoration? Well, climate restoration is very interesting. It's
Speaker 1: the it's the goal of restoring a climate that humans
Speaker 1: have actually survived long term, and so it's much more
Speaker 1: radical than the conventional thinking of trying to reduce the damage.
Speaker 1: It's Uh, it's the engineering idea of we want to
Speaker 1: restore what works for human beings, and it turns out
Speaker 1: that we have the technology and the finance to do it.
Speaker 1: We just need to start talking about it because we've
Speaker 1: been talking about a much worse schal What's interesting is
Speaker 1: I've never heard of this technology that you argue we
Speaker 1: have right now. Ocean pasture restoration, for example, synthetic limestone manufacture,
Speaker 1: seaweed permaculture, and methane oxidation. These are the four technologies
Speaker 1: you say that can help us get us there. Let's
Speaker 1: start with ocean pasture restoration. How does it work? Yeah,
Speaker 1: so the four methods. First of all, the reason that
Speaker 1: you haven't heard about them is that we haven't had
Speaker 1: a goal of restoring the climate yet. These have all
Speaker 1: been around for quite a while. UM ocean pastor restoration
Speaker 1: also called ocean iron fertilization. It is this the same
Speaker 1: process that nature uses to uh to cool the planet
Speaker 1: before ice ages, and so nature removes a trillion tons
Speaker 1: of CEO two before for each ice age. There have
Speaker 1: been ten in the last million years, and we know
Speaker 1: how to do the same thing. And the idea is, uh,
Speaker 1: we all know that photosynthesis, like trees, absorbed c O two.
Speaker 1: But the trouble with trees, of course, is that they
Speaker 1: end up dying after a few decades and the carbon
Speaker 1: goes back into the air when the trees rock in
Speaker 1: the ocean. When plants grow, they sink and so and
Speaker 1: then there's no oxygen in the deep ocean, and so
Speaker 1: the carbon. They take the carbon with them as they
Speaker 1: and of course a lot of the plants are eaten
Speaker 1: by fish and all the detritus sinks into the deep ocean.
Speaker 1: And as I said, that's how nature uh cool the
Speaker 1: planet for our ice ages. And so the way this operates,
Speaker 1: and it was tested ten years ago. It was tested
Speaker 1: also by mont Pinitubo thirty years ago. Um is uh local,
Speaker 1: it's localized, and it's intermittent. So you do it. They
Speaker 1: do it in eddies which are about a hundred miles
Speaker 1: in diameter in the ocean. And uh, the eddie contains
Speaker 1: the iron. The iron is phenomenally small amount. It's like
Speaker 1: a hundredth of a teaspoon per square meter. And um,
Speaker 1: within days it turns green from blue. Blue is beautiful,
Speaker 1: but it's not green. Green is where you have photosynthesis.
Speaker 1: And then within another week or so fish start coming
Speaker 1: in and feeding on there on the the luncheon counter there,
Speaker 1: uh and and off you go. When it was tested
Speaker 1: they were told that they just a question of a
Speaker 1: hundred million tons of CEO two. That sounds like a
Speaker 1: lot what's interesting is, you know, and we're gonna continue
Speaker 1: the conversation just a moment and maybe talk about some
Speaker 1: of the other methods and just got about a minute
Speaker 1: here and then we'll continue on the other side of
Speaker 1: the break. But I do wonder at the same time,
Speaker 1: do we not also though you need to think about
Speaker 1: reducing our carbon footprint? Yes, we absolutely do? Well, yes
Speaker 1: or no, that we we need to reduce our carbon footprint.
Speaker 1: Worrying is really less effective than doing it, and so
Speaker 1: I focus on just do it. Uh. You know, I'm
Speaker 1: planning to have an electric car be my next car
Speaker 1: when my current car wears out, and I think probably
Speaker 1: a lot of the people listening are already planning on that,
Speaker 1: so that transition is happening, but we haven't been thinking
Speaker 1: about actually restoring the climate. And especially for our young listeners,
Speaker 1: plan on being around rather than giving up the ghosts,
Speaker 1: because if you plan on being around, then you'll pay
Speaker 1: attention to these big four solutions. And I want to
Speaker 1: continue with that and talk seaweed permaculture and exactly what
Speaker 1: it is and how it gets carbon out of the ecosystem. Yeah,
Speaker 1: seaweed perma culture is a variation on on the iron fertilization.
Speaker 1: So as I said, Uh, the important thing in the
Speaker 1: ocean is when you grow plants, when they die, they
Speaker 1: sink is no oxygen and the oxygen stays out. And
Speaker 1: with sea permaculture, the for the nutrients that are missing
Speaker 1: are brought up from the deep ocean in a large
Speaker 1: pipe solar powered, takes very very little energy, and then um,
Speaker 1: the seaweed grows. Some of the seaweed is used, is
Speaker 1: actually harvested and sold for products, some of which sell
Speaker 1: for a thousand dollars a ton um. And uh, probably
Speaker 1: half the seaweed ends up falling deep into the ocean. Uh,
Speaker 1: some of it cut, some of it just naturally falling.
Speaker 1: And it's fairly simple. The difficulty is you've got they
Speaker 1: build a structure that this the help grows on and
Speaker 1: and that takes some technology. But just like the the
Speaker 1: iron fertilization, it's that's a commercial product, and so so
Speaker 1: it pays for itself a peter you spent it. It's
Speaker 1: a commercial product. Let's talk an end there, because I'm wondering,
Speaker 1: if this is so effective, where's the money in it?
Speaker 1: And I asked in the you know, the question not
Speaker 1: in a cynical way, but in a way that motivates
Speaker 1: companies to do this to make sure that we have
Speaker 1: a future. Yes, it's an interesting challenge because uh you know,
Speaker 1: of the we have are the four pathways, and they're
Speaker 1: all self financing. UM and this is the same model
Speaker 1: that put a c O two into the air. That is,
Speaker 1: we had companies selling us heat and energy which had
Speaker 1: a byproduct putting CEO two. Up with these four products,
Speaker 1: the the UH, the seaweed, the limestone, the ocean fertilization
Speaker 1: which leads to fish. You get product which has a
Speaker 1: byproduct of pulling CEO two out. Right now, the challenge
Speaker 1: is UM and this is something that we're dealing with
Speaker 1: right now, is we're afraid to list these on the
Speaker 1: on the open market because the customers I can say,
Speaker 1: wait a minute, my U retirement depends on it. And
Speaker 1: so we want to make sure that people doing this
Speaker 1: are primarily interested in restoring the climate for our children
Speaker 1: and grandchildren a second really interested in making money. Well,
Speaker 1: it almost sounds like you've got to have governments involved
Speaker 1: who recognize these methods and before it gets too late.
Speaker 1: Peter Fakowski, thank you so much. Founder uh In Germany,
Speaker 1: Meritus a foundation for climate restoration. Check out his book
Speaker 1: that has got the title of climate restoration in it.
Speaker 1: I'm roc journal. Yeah, but you let me drive? Oh no,
Speaker 1: no, no no home leave, I'll do. I want to drive.
Speaker 1: It's good question to drive. This is the drive to
Speaker 1: the globe coming down on Bluebird Radio. All right, everybody,
Speaker 1: tick talk just about tidn't happen. It's left in today's
Speaker 1: trading sessions and we are getting ready to wrap up
Speaker 1: the day, wrap up the week. It's been a trade
Speaker 1: wrap up the month, and we know it's been an
Speaker 1: unbelievable one for equities. Ever. All yeah, it's been pretty
Speaker 1: remarkable for the S and p F foundered up eight
Speaker 1: point three percent this month. The nasdak uh can posit
Speaker 1: up eleven percent this month. Still not positive for the year,
Speaker 1: but what a difference just a month. Makes really curious
Speaker 1: to hear what Jimmy Lee has to think about it.
Speaker 1: He's the founder and CEO of the Wealth Consulting Group.
Speaker 1: They've got two point nine billion dollars in assets under management,
Speaker 1: and I would imagine after a rally in the last
Speaker 1: couple of days that number has gone up a little
Speaker 1: bit Jimmy joining us on the phone from Las Vegas. Jimmy,
Speaker 1: how are you? I'm great and good afternoon. Yeah, good
Speaker 1: afternoon to YouTube. So the big question that that Carol
Speaker 1: and I have been asking each other off air and
Speaker 1: asking our guests on air has been is this is
Speaker 1: just a bear market rally because we're getting so much
Speaker 1: conflicting data here. Well, I'm a little surprised that we've
Speaker 1: had such a strong run with equities. You're not the
Speaker 1: only one, yeah, without having a better inflation pread at
Speaker 1: least one. But as I've been saying for the last
Speaker 1: few months, I think that we could be in for
Speaker 1: a strong fourth quarter. It looks like we're getting it
Speaker 1: a little bit earlier. So what I think has changed
Speaker 1: is that maybe while the consumer sentiment is still awful,
Speaker 1: just horrible, I think investor sentiment may have changed, and
Speaker 1: maybe instead of selling into the rallies, it's gonna be
Speaker 1: more about buying into the dips Again, who do you
Speaker 1: believe consumers are investors? And some of the economic data
Speaker 1: points I will point out that we've talked about certainly
Speaker 1: today are Michael McKee, who follows a global economics says,
Speaker 1: you know a lot of the state is backward looking.
Speaker 1: You have to remember that markets tend to be forward looking.
Speaker 1: So I'm just curious when you look at it. And
Speaker 1: then let's throw the bond market into it. You know,
Speaker 1: that tenure, I feel like comfortably staying below that three mark.
Speaker 1: I mean, how do you kind of you know, size
Speaker 1: each of them against one another. It's very confusing, and
Speaker 1: especially with the bond market. But I think that the
Speaker 1: consumer is still strong. I think in certain areas of
Speaker 1: the economy, such as housing, other areas have been you
Speaker 1: know that we're just bit up so high. I think
Speaker 1: obviously we're seeing uh pullbacks there, which is great. I
Speaker 1: think it's healthier to get that in some of these
Speaker 1: sectors that were so hot. But you know, I think
Speaker 1: that again, I've been talking about record cash balances with
Speaker 1: the consumer, which we know makes up the majority of
Speaker 1: our U S economy, And so as long as the
Speaker 1: consumer keep spending and businesses um can also invest down
Speaker 1: the road. So you know, I think that's that's the key,
Speaker 1: as consumers need to continue to continue spending in And
Speaker 1: one thing that you know, I've been noticing over the
Speaker 1: last several months is that not just the consumer, but
Speaker 1: major investors were so bearish. It's been a long time
Speaker 1: since I felt that so many investors, professional investors were
Speaker 1: so barish that it made me feel like we could
Speaker 1: have been kind of sneering the bottom. And here we
Speaker 1: are with the nice bounds we have seen that and
Speaker 1: our been Signella has written about this. Tim we talked
Speaker 1: about it. Um that the U S personal savings rate
Speaker 1: is a acentage of disposable income has been dropping steadily
Speaker 1: since the pandemic, while revolving credit we're talking about credit
Speaker 1: card debt has been steadily rising. Jimmy, doesn't that maybe
Speaker 1: borrow that at some point that's gonna all come home
Speaker 1: to roost. You know, as long as we don't go
Speaker 1: into a royal recession, UM, I think will be okay.
Speaker 1: So sure, those statistics are not good, um, and there
Speaker 1: was a lot of money still is floating around our economy.
Speaker 1: But um, as long as we don't lose major lots
Speaker 1: of jobs across the board, across you know, industries, I think,
Speaker 1: I think we're gonna be all right. And so I think,
Speaker 1: you know, on the long end of the bond market
Speaker 1: is predicting kind of a weak economy. Um, I think
Speaker 1: what we could be set up for is a very
Speaker 1: volatile third quarter. So maybe we end up, you know,
Speaker 1: getting some sell off off these recent gains, some profit
Speaker 1: taking from traders. But I think in the fourth quarter
Speaker 1: we've got some catalysts such as potentially Ukraine. Um, we've
Speaker 1: got the FED, which is the biggest one. So if
Speaker 1: the Fed, you know, at some point when they say
Speaker 1: that they're gonna pause, my guess is that the markets
Speaker 1: were gonna be up fifteen by then, which can be
Speaker 1: getting close to now, but that could be a lows
Speaker 1: from the lows, which obviously we're we're pretty close to now, um,
Speaker 1: But so we could get some trading back and forth.
Speaker 1: But by the time they say that, I think we're
Speaker 1: going to get a lot of the returns back already.
Speaker 1: And then once they say that, I think that's gonna
Speaker 1: help to see in a rally in equities. So you
Speaker 1: don't think you don't think the FED is going to
Speaker 1: continue raising rates, you think the pause is coming in September.
Speaker 1: I want to make sure I understand this. No, no no, no, no,
Speaker 1: I think they're gonna raise rates at least at least
Speaker 1: once or twice. The second time could be mu flowers.
Speaker 1: As most people predict but the futures markets are predicting.
Speaker 1: But you know, if the economic data seems lousy, and
Speaker 1: if if inflation data actually um comes lower over the
Speaker 1: next several months, UM, then I think they've got a
Speaker 1: chance to say that. And so as we talked about
Speaker 1: information lagging, I actually do think inflation is getting better.
Speaker 1: We just haven't seen it in the numbers yet, and
Speaker 1: so hopefully um, this next month, you know, we'll see that. Hey,
Speaker 1: you're watching the high yield market. Always important to get
Speaker 1: an idea of whether or not we're starting to see
Speaker 1: more companies get into trouble. UM, tell us more about
Speaker 1: that and what you are seeing. And we've we've been
Speaker 1: we've been watching that and it's one of the triggers
Speaker 1: that we used to be risk off to a degree.
Speaker 1: And you know, but the spreads have kind of tightened
Speaker 1: a little bit, so as they were widening, we're getting
Speaker 1: a little bit concerned. But what I do know is
Speaker 1: is that there are some institutional investors out there that
Speaker 1: are getting ready for, you know, a potential opportunity if
Speaker 1: we do have a recession, and if there are opportunities
Speaker 1: to buy distress that a major discounts. I know, that
Speaker 1: a lot of the players that its historically done that
Speaker 1: are getting ready to do it, raising funds and and
Speaker 1: calling on people like this, like us to to see
Speaker 1: if we have investors that might be interested in that.
Speaker 1: And so we're really watching that. But they've tightened a
Speaker 1: little bit. So it's getting a little better. What about
Speaker 1: when it comes to the global outlook here and and
Speaker 1: how you're thinking about Ukraine, how you're thinking about energy
Speaker 1: and Europe, and how are you thinking about China? Yeah,
Speaker 1: I think I think that it's going to get better.
Speaker 1: So I'm hopeful, you know, that as time continues on,
Speaker 1: that the global economy becomes more and more open in China, um,
Speaker 1: you know, doesn't close up again. And so I'm hoping
Speaker 1: that the COVID situation gets better, not worse, and that
Speaker 1: the global economy improves. I think the US will lead it.
Speaker 1: And again, but I think there are some values overseas,
Speaker 1: and so I think investors still should be allocated overseas.
Speaker 1: All right, we gotta ron, Hey, listen, nice to spend
Speaker 1: some time with you. Jimmy Lee, founder and CEO of
Speaker 1: Wealth Consulting Group uh and it has about two point
Speaker 1: nine billion in assets under management, joining us once again
Speaker 1: on the phone from Las Vegas. Thanks for listening to
Speaker 1: Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or
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