WEBVTT - Outlook For Semiconductors, Domestic Chip Production 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 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:22.040 at Bloomberg dot com slash podcast. Right now, let's get 0:00:22.079 --> 0:00:25.279 over to Hans Albrished. He is a portfolio manager and 0:00:25.360 --> 0:00:30.960 option strategist at Horizons E t F Management and UM, 0:00:31.000 --> 0:00:33.680 a great day to have you on, Hans, because we've 0:00:33.720 --> 0:00:37.360 had some really kind of weird news in the E 0:00:37.520 --> 0:00:40.680 t F space. I'm thinking of the short arc E 0:00:40.880 --> 0:00:43.839 t F, which Matt Levine was writing about yesterday. I mean, 0:00:43.840 --> 0:00:46.559 if you don't like Cathy Woods strategy, you could just 0:00:46.760 --> 0:00:50.640 find out what she's going along and short at yourself. Um, 0:00:50.760 --> 0:00:53.239 or you could just short the arc E t F. 0:00:53.280 --> 0:00:56.600 Why would someone feel compelled to build a short arc 0:00:56.640 --> 0:01:02.319 et F. Well, I think, uh, you know, I think 0:01:02.360 --> 0:01:04.920 it's a bit like shorting bitcoin. You know, there's a 0:01:05.000 --> 0:01:07.880 we have a product actually that allows you to take 0:01:07.959 --> 0:01:11.560 part in a short bitcoin effectively. Uh, and I think 0:01:11.560 --> 0:01:13.600 that becomes a bit of a trading vehicle for people, 0:01:13.680 --> 0:01:17.200 because you know, the stocks that Kathy tends to invest in, 0:01:17.360 --> 0:01:22.200 or these exponential, these emerging technologies that often get uh, 0:01:22.240 --> 0:01:25.200 you know, stretched and overextended, and and I think this 0:01:25.280 --> 0:01:27.480 sort of gives people away to kind of play both 0:01:27.520 --> 0:01:31.360 sides of the equation um because you know, some of 0:01:31.360 --> 0:01:34.920 these companies are smaller, and uh, we know that Cathy's uh, 0:01:34.959 --> 0:01:38.120 you know, can have large a large percentage of the 0:01:38.160 --> 0:01:41.040 holdings of some of these companies, and some people think 0:01:41.120 --> 0:01:43.559 that that's sort of something that can reverse over time, 0:01:43.640 --> 0:01:46.959 So a bit of a mean reversion play from that perspective, 0:01:47.000 --> 0:01:49.640 I think. But I say that's more of a trader's 0:01:50.200 --> 0:01:52.360 trader's vehicle than something you want to hold for a 0:01:52.400 --> 0:01:55.120 long time, because of course I'm I'm a true believer 0:01:55.280 --> 0:01:58.240 in these technologies over time, so Hans. Other news we 0:01:58.280 --> 0:02:00.560 got today came from BMW kind of learning about the 0:02:00.560 --> 0:02:03.480 impact of the chip shortage on its business. So maybe 0:02:03.480 --> 0:02:05.680 that's not a reason to want to be invested in 0:02:05.720 --> 0:02:08.680 an automaker like that, but maybe it's a good investment 0:02:08.760 --> 0:02:11.440 idea to invest in the company that makes the products 0:02:11.480 --> 0:02:15.520 that are seeing shortage. The chipmakers and you obviously at 0:02:15.560 --> 0:02:20.480 Horizon ETFs launched uh C HPS, the first Canadian semiconductor 0:02:20.480 --> 0:02:22.600 e t F. What kind of interest are you seeing 0:02:22.600 --> 0:02:26.000 in that product. We're seeing some good interest. It's the 0:02:26.040 --> 0:02:30.040 first one that really takes a very global perspective. So 0:02:30.080 --> 0:02:31.960 a lot of the products you see out there, the 0:02:32.000 --> 0:02:35.800 socks and things like that, have very much a US focus. 0:02:35.840 --> 0:02:39.720 And what we'd like to talk about is that, you know, 0:02:39.880 --> 0:02:43.120 this is really a global movement, this exponential and emerging 0:02:43.160 --> 0:02:46.520 movement where semiconductors are the new oil. Right we hear 0:02:46.520 --> 0:02:48.400 about data being the new oil. Semis are really the 0:02:48.440 --> 0:02:51.080 new oil. The oil. They make up the foundation for 0:02:51.120 --> 0:02:55.080 almost everything in our new world, and and that goes 0:02:55.120 --> 0:02:57.080 for everywhere in the world. And so you've got some 0:02:57.160 --> 0:03:00.000 areas of the world. Asia is the biggest cloud growth 0:03:00.120 --> 0:03:03.480 area in the world. You've got robotics and automation being very, 0:03:03.560 --> 0:03:05.440 very big in that part of the world. So it's 0:03:05.480 --> 0:03:08.880 better to have exposure to companies that are some of 0:03:08.919 --> 0:03:12.080 the very big and influential companies that exist outside of 0:03:12.600 --> 0:03:15.919 outside of the US. Is there gonna be a time 0:03:16.120 --> 0:03:19.919 in you know, the near to medium term future when 0:03:20.240 --> 0:03:24.160 we ramp up chip production by so much and demand 0:03:24.200 --> 0:03:28.320 falls off that we have a glut. Well, it could 0:03:28.400 --> 0:03:31.720 be you know, we oftentimes we kind of uh, we 0:03:31.840 --> 0:03:33.959 overextend one way or another. I think it's going to 0:03:34.040 --> 0:03:36.480 be difficult in the in the chip space because it 0:03:36.640 --> 0:03:42.840 is very very capex um extend, very capex intensive um 0:03:42.920 --> 0:03:45.840 and so it's not that easy to adjust. And we 0:03:45.920 --> 0:03:48.600 saw that in the during the pandemic where some some 0:03:48.760 --> 0:03:52.720 areas like automakers sort of it was very much uh, 0:03:52.760 --> 0:03:56.520 an example of expectation versus an actual reality Jewels, where 0:03:56.600 --> 0:03:59.120 everybody sort of took their pedal, took their foot off 0:03:59.120 --> 0:04:03.200 the pedal, and then suddenly auto demand you know, went 0:04:03.240 --> 0:04:05.360 through the roof because everybody started doing the good old 0:04:05.400 --> 0:04:09.600 American day trip, uh, the good old American road trip. Um. 0:04:09.680 --> 0:04:12.360 And so when when things get out of balance in 0:04:12.360 --> 0:04:15.520 that to that perspective, you can have some problems. Some 0:04:15.600 --> 0:04:18.360 of that capacity went to other areas of chip demand, 0:04:18.440 --> 0:04:20.560 and then when the automakers needed that demand again, it 0:04:20.600 --> 0:04:22.799 wasn't there. And it's very difficult to kind of move 0:04:23.160 --> 0:04:26.560 to shift that capacity around. Uh. And it's going to 0:04:26.680 --> 0:04:28.880 take a little while for for us to solve this 0:04:28.960 --> 0:04:31.360 problem because it isn't as easy as flicking a switch. 0:04:31.680 --> 0:04:34.599 I'm a road trip fanatic, and when I go on 0:04:34.680 --> 0:04:37.719 a road trip at all, I like to bring my iPhone, 0:04:38.120 --> 0:04:41.440 my Apple Watch, my iPad. I need as many chips 0:04:41.440 --> 0:04:43.560 as I basically can in the car to feel like 0:04:43.600 --> 0:04:45.559 I'm safe. Hans, thanks so much for joining us, Hans 0:04:45.839 --> 0:04:49.839 alversh there is a VP and portfolio manager at Horizons 0:04:49.920 --> 0:04:52.359 et F Management. Gotta get you back on and talk 0:04:52.760 --> 0:04:59.000 more about chips in the future. Let's bring in Kara Murphy. 0:04:59.240 --> 0:05:02.120 She is cheap in vestment officer at Kestra Holdings. They 0:05:02.120 --> 0:05:05.799 have a hundred twenty three billion dollars of assets under management. 0:05:05.920 --> 0:05:10.360 And Carrey, you are optimistic, right, I mean, at least 0:05:10.440 --> 0:05:13.800 in terms of the economy. You think we see uh 0:05:13.960 --> 0:05:17.520 some good signs with foot traffic, air traffic, consumer spending, 0:05:18.200 --> 0:05:20.560 et cetera. How much longer does that continue or have 0:05:20.680 --> 0:05:25.200 we maybe peaked? So I am optimistic, and I think 0:05:25.240 --> 0:05:27.240 part of it is because we still have a tremendous 0:05:27.240 --> 0:05:29.839 amount of momentum in the system, both from fiscal and 0:05:29.839 --> 0:05:33.120 monetary stimulus that started last year. But you know, we've 0:05:33.160 --> 0:05:36.480 been looking very closely as COVID case counts go up, 0:05:36.680 --> 0:05:39.799 like how is the consumer actually reacting. So, while certainly 0:05:39.800 --> 0:05:43.400 a health concern, on a continuing basis, what we're seeing 0:05:43.440 --> 0:05:46.400 is that people aren't really changing their behavior very much. Um. 0:05:46.400 --> 0:05:49.760 We're continuing to see foot traffic even in COVID hotspots, 0:05:49.800 --> 0:05:54.200 in places like restaurants, hotels, gems. Air traffic is holding 0:05:54.240 --> 0:05:59.520 study at pre COVID levels. Consumer spending is now above 0:05:59.680 --> 0:06:03.280 pre COVID levels. So what we're seeing is that the 0:06:03.320 --> 0:06:07.279 economic impact of the increased case counts are pretty minimal. Okay, 0:06:07.279 --> 0:06:09.400 So does that mean you want to keep going towards 0:06:09.480 --> 0:06:14.080 the value, the cyclical, the reopening kind of place. Yeah, well, 0:06:14.120 --> 0:06:16.320 I think we are starting to see a rotation towards 0:06:16.320 --> 0:06:19.960 a little bit more quality UM in the market. But 0:06:20.040 --> 0:06:22.839 I do think there's a nice consumer theme out there 0:06:22.880 --> 0:06:27.080 as well. So areas like home builders, discount retailers, those 0:06:27.080 --> 0:06:29.919 are areas that will continue to benefit from both the 0:06:29.960 --> 0:06:33.799 consumer kind of coming out of their pandemic shell low 0:06:33.920 --> 0:06:38.040 interest rates being willing to actually walk stores again. Um. 0:06:38.040 --> 0:06:41.359 And so I think there's some interesting opportunities there. What 0:06:41.480 --> 0:06:45.719 about the growth stocks, what about those mega texts that 0:06:45.800 --> 0:06:51.279 have powered this market higher? Are you done with those? Yeah? 0:06:51.320 --> 0:06:54.240 It's very hard to bet against those stocks, right, I mean, 0:06:54.279 --> 0:06:59.000 like tremendous top line growth, free cash flow generation um 0:06:59.440 --> 0:07:01.599 at a norm arisen out of momentum. So so I 0:07:01.600 --> 0:07:04.600 wouldn't want to bet against them, but I think their 0:07:04.680 --> 0:07:08.120 attractiveness compared to let's say a year ago, is lower. 0:07:09.640 --> 0:07:11.240 Let's talk about E s G. But we actually have 0:07:11.280 --> 0:07:14.320 a great live law going on on the terminal right now. 0:07:14.400 --> 0:07:16.440 You can type T live T L I V go 0:07:16.600 --> 0:07:19.440 into your terminal and it's with Steve Liberatory over at 0:07:19.760 --> 0:07:22.280 nu Vene talking about E s G and the risk 0:07:22.400 --> 0:07:25.760 of green washing. How do you get around that green 0:07:25.960 --> 0:07:30.040 washing risk when trying to make E s G oriented investments? 0:07:31.320 --> 0:07:33.680 So I think first of all, it's important to understand 0:07:33.720 --> 0:07:36.880 that that there is a growing demand for the ability 0:07:36.920 --> 0:07:40.480 to express your values in a portfolio. And so we 0:07:40.560 --> 0:07:43.800 certainly see this um with our clients who are asking 0:07:44.280 --> 0:07:47.200 to be able to have some consistency between what's important 0:07:47.240 --> 0:07:49.000 to them and the holdings that they have. So I 0:07:49.000 --> 0:07:52.000 think that's one very important trend to keep in mind. 0:07:52.400 --> 0:07:55.200 Another is that like the data that we have in 0:07:55.360 --> 0:07:58.600 E s G is so much better, the analytical capability 0:07:58.680 --> 0:08:00.360 is so much better than what we had like ten 0:08:00.440 --> 0:08:03.080 years ago. So you know, I think this concern about 0:08:03.120 --> 0:08:05.840 greenwashing is the idea that you know, suddenly everybody has 0:08:05.840 --> 0:08:07.960 got an E. S. D. BEN and everybody's you know, 0:08:08.080 --> 0:08:12.320 using these other factors to sort of determine investment. Um. 0:08:12.360 --> 0:08:14.600 And that is a risk. But we're in so much 0:08:14.600 --> 0:08:17.560 better place today than we were ten years ago. UM. 0:08:17.560 --> 0:08:20.600 So I think that's all a very good thing. Yeah. 0:08:20.600 --> 0:08:22.320 And also, I mean, what are you gonna gonna do. 0:08:22.320 --> 0:08:24.360 You're gonna drive up the cost of capital of bad 0:08:24.400 --> 0:08:28.120 businesses or do you invest in good businesses hoping that 0:08:28.320 --> 0:08:33.240 sometime regulation gets past. Um. It seems like an interesting 0:08:33.240 --> 0:08:36.440 conundrum to me. I want to get to home builders because, um, 0:08:36.679 --> 0:08:42.040 you have written about the pullback that we've seen. Um, 0:08:42.080 --> 0:08:45.000 but there's still so much demand, as Kaylee and I 0:08:45.040 --> 0:08:48.800 can attest to m for homes and so little inventory. 0:08:48.880 --> 0:08:52.959 What happens here? Well, and I think you can guess right, 0:08:53.000 --> 0:08:56.440 tremendous demand, limited supply. You know, I think that's really 0:08:56.440 --> 0:09:00.720 going to continue to buoy prices, particularly at homes. And 0:09:00.840 --> 0:09:03.600 you know, the home builders have been very deliberate and 0:09:03.640 --> 0:09:06.679 sort of holding back some of their inventory. UM. So 0:09:06.720 --> 0:09:08.880 we'll start to see that come online in the second 0:09:08.920 --> 0:09:11.080 half of this year and then even into next year. 0:09:11.559 --> 0:09:13.400 And then the meantime, we've seen a lot of input 0:09:13.440 --> 0:09:15.839 costs really received. I mean, lumber has gotten a lot 0:09:15.840 --> 0:09:18.600 of attention and that's come back tremendously at the same 0:09:18.600 --> 0:09:21.640 time that home builders shares have been receiving. So and 0:09:21.640 --> 0:09:24.679 then even when we look at valuations, while they're you know, 0:09:24.760 --> 0:09:28.319 towards the high end of their typical valuation range, as 0:09:28.400 --> 0:09:32.160 earnings continue to increase, um, as these homes come back online, 0:09:32.200 --> 0:09:35.599 as prices hold firm, um, I think you'll continue to 0:09:35.640 --> 0:09:38.200 see these stocks do well. Maybe good news for the 0:09:38.200 --> 0:09:41.280 home builders stocks, less so for Matt Miller who's trying 0:09:41.320 --> 0:09:44.280 to buy a house in Westchester potentially, I don't know 0:09:44.280 --> 0:09:46.320 how much luck that's going to have. I've had some 0:09:46.400 --> 0:09:49.000 listeners right in with some tips, so if anybody knows 0:09:49.160 --> 0:09:52.440 a place in Bronxville, Yeah, Matt is using his platform 0:09:52.480 --> 0:09:54.559 to get tips. And we only have about thirty seconds left, 0:09:54.559 --> 0:09:56.839 but of course, earning seasons winding down, we still do. 0:09:57.000 --> 0:09:59.640 We'll hear from the retailers later on this month. How 0:09:59.679 --> 0:10:02.719 strong a position are they in. I think the retailers 0:10:02.720 --> 0:10:05.679 are in a great position, so you know, We're particularly 0:10:05.720 --> 0:10:08.400 focus on the discount ones who didn't benefit as much 0:10:08.400 --> 0:10:11.520 from the rush to online last year. But like I said, 0:10:11.559 --> 0:10:14.600 starting to see more foot traffic. We're also seeing um 0:10:14.840 --> 0:10:18.439 wage increases, particularly in low wage earners, which again should 0:10:18.440 --> 0:10:22.320 really help those discount retailers. Kara, thanks so much for 0:10:22.440 --> 0:10:25.720 joining us today. Kara Murphy, their chief investment officer over 0:10:25.760 --> 0:10:28.640 at Castro Holdings that said they had a hundred twenty 0:10:28.679 --> 0:10:32.600 three billion dollars in assets under management, So um, some 0:10:32.679 --> 0:10:36.480 real firepower there and some great insight on what to 0:10:36.520 --> 0:10:39.000 do in this market you're not looking for. I thought 0:10:39.000 --> 0:10:42.080 you were looking for a house too. I would in 0:10:42.200 --> 0:10:44.240 theory that would be great map, But after looking at 0:10:44.280 --> 0:10:46.040 what prices has done over the last couple of months, 0:10:46.040 --> 0:10:47.440 I think I'm just gonna have to wait it out. 0:10:47.760 --> 0:10:50.400 See when it cools down, maybe I'll find my entry point. Yeah, 0:10:50.440 --> 0:10:53.080 I mean I may try and wait it out as well. 0:10:53.120 --> 0:10:57.440 Hopefully it'll cool down by like January or February. UM. 0:10:57.480 --> 0:11:00.679 But it's an amazing market right now. If you're a seller. 0:11:00.720 --> 0:11:03.080 I know a guy who sold a house. He put 0:11:03.080 --> 0:11:06.319 his house on the market Friday and it was done cash, 0:11:06.480 --> 0:11:11.960 no contingencies within like five minutes. Uh yeah, very very 0:11:11.960 --> 0:11:18.360 hot marketly alright, Our big take today is on Gary Gensler, 0:11:18.640 --> 0:11:23.080 the head of the SEC, readying more crypto oversight. His 0:11:23.160 --> 0:11:26.720 intention is to protect investors and he's made that pretty clear. 0:11:26.800 --> 0:11:30.679 But the thing is he's also um, I guess he's 0:11:30.920 --> 0:11:33.719 said at least open or neutral on the technology, the 0:11:33.760 --> 0:11:36.760 blockchain technology, and he even taught a class at m 0:11:36.840 --> 0:11:38.600 I T about it, so a lot of people have 0:11:38.679 --> 0:11:41.959 speculated he might be a friend to the crypto world. 0:11:42.040 --> 0:11:44.480 Robert Schmidt joins us who wrote the big take story 0:11:44.520 --> 0:11:48.280 today with Benjamin Bain and Robert. I guess you know. 0:11:48.920 --> 0:11:53.400 The issue is a lot of crypto investors, a lot 0:11:53.440 --> 0:11:58.040 of crypto believers are also very libertarian, and a lot 0:11:58.040 --> 0:12:02.800 of people take that to mean also anti regulation. Hey Matt, Yeah, 0:12:02.800 --> 0:12:04.680 thanks for having me. And it is true. I mean 0:12:04.720 --> 0:12:07.360 this is a you know, a system that has developed 0:12:07.400 --> 0:12:09.560 kind of outside of the government, So there's kind of 0:12:09.600 --> 0:12:12.360 a real hesitancy on some of the people who are 0:12:12.440 --> 0:12:16.080 real enthusiasts here, uh to have the government wagh in 0:12:16.679 --> 0:12:19.880 uh and said rules for this market. Um. But as 0:12:19.920 --> 0:12:23.680 you saw with our Ginseler piece, Ginseler is um saying 0:12:23.880 --> 0:12:25.880 you know what the government has to have a role here. 0:12:25.960 --> 0:12:29.400 This is a one point six trillion dollar market and growing, 0:12:29.600 --> 0:12:32.840 and so from an investor standpoint, he doesn't think that 0:12:32.880 --> 0:12:36.240 there's a lot of protections. Talk a little bit about 0:12:36.320 --> 0:12:40.680 his his background and how exactly that informs his opinion 0:12:40.720 --> 0:12:44.000 in his policy approach when it comes to crypto. Yeah, 0:12:44.040 --> 0:12:47.600 it is fascinating because the government, as you guys might imagine, 0:12:48.080 --> 0:12:54.800 is not full of crypto experts, replaced crypto with anything 0:12:55.280 --> 0:12:57.480 well true, and especially you know talking to people say 0:12:57.480 --> 0:13:00.200 on Capitol Hill, right, nobody knows exactly what any of 0:13:00.240 --> 0:13:03.480 this stuff is and it is confusing. Um. So Ginsler 0:13:03.520 --> 0:13:06.840 has really put himself in an interesting place because he's, uh, 0:13:06.880 --> 0:13:09.760 he's one of the few people who really understands this stuff. 0:13:09.760 --> 0:13:13.120 And he developed a very popular course at m I 0:13:13.200 --> 0:13:16.960 T on blockchain and money. Um. He's long been interested 0:13:17.000 --> 0:13:21.360 in kind of these intersection of finance and technology. Uh, 0:13:21.400 --> 0:13:23.800 and he studied it for three years before he was 0:13:23.840 --> 0:13:27.800 appointed SEC chairman. So he says, well, look, this is serendipity, 0:13:27.800 --> 0:13:30.120 but I'm glad I'm here and I'm glad I understand 0:13:30.160 --> 0:13:33.240 this stuff well. And there are a lot of people, Um, 0:13:33.360 --> 0:13:36.040 there are people in the crypto space. I shouldn't say 0:13:36.040 --> 0:13:37.959 a lot, because I don't know how many, but I 0:13:38.320 --> 0:13:41.480 we talked to on a regular basis people who work 0:13:42.000 --> 0:13:46.520 with crypto in the investment world, and UM, people who 0:13:46.600 --> 0:13:49.920 are pro regulation of in some form or another, who 0:13:49.960 --> 0:13:54.280 say that we need to have some clear cut rules 0:13:54.520 --> 0:13:59.120 in order to get this really widely adopted and going. Um, 0:13:59.120 --> 0:14:02.480 maybe Gainsler is their friend. Yeah, he is. I think 0:14:02.480 --> 0:14:04.800 although you know, it all comes down to um as 0:14:04.880 --> 0:14:07.400 everything does in Washington, and the details of this stuff 0:14:07.480 --> 0:14:12.400 and what kind of regulation and oversight you want. But um, 0:14:12.440 --> 0:14:14.960 that's true. Ginsler talked to us about, you know, the 0:14:15.000 --> 0:14:17.280 early days of the auto industry, and he said, well, 0:14:17.320 --> 0:14:20.000 you know, people were driving around. There were barely roads, 0:14:20.000 --> 0:14:22.160 there were no traffic lights, there were no speed limits, 0:14:22.160 --> 0:14:24.680 people were getting killed, you know, and once the government 0:14:24.760 --> 0:14:27.239 stepped in and said, hey, we've got to have some 0:14:27.240 --> 0:14:30.320 some kind of rules here. Uh, the industry took off. 0:14:30.480 --> 0:14:34.440 And he sees, you know, UM, crypto as as similar, 0:14:34.440 --> 0:14:38.480 that it really does need some guardrails there before it's 0:14:38.880 --> 0:14:41.200 widely adopted. I should point out that I normally live 0:14:41.240 --> 0:14:45.400 in Berlin, and living in Germany, probably the number one 0:14:46.040 --> 0:14:49.520 best thing about living in Germany actually by far in 0:14:49.560 --> 0:14:51.400 a way, is the fact that there's no speedle in 0:14:51.480 --> 0:14:55.760 it on the auto bun. I can't believe no other 0:14:56.080 --> 0:14:59.920 developed Western countries have that, because it's such a great 0:15:00.080 --> 0:15:05.640 part of life there. But to the story, back to 0:15:05.680 --> 0:15:09.560 Gary Gainsler, Robert, I guess once he forms an opinion 0:15:09.600 --> 0:15:12.320 about this and kind of decides what direction he wants 0:15:12.360 --> 0:15:15.080 to go with this regulation, what kind of speed and 0:15:15.360 --> 0:15:18.240 or lack thereof are we talking about? Was how some 0:15:18.320 --> 0:15:21.080 of these things could actually come to fruition. Yeah, well, 0:15:21.120 --> 0:15:25.200 you know that the government is never fast about anything. Um. 0:15:25.280 --> 0:15:28.040 And Ginsler also has a lot on his plate, a 0:15:28.040 --> 0:15:30.760 lot of stuff that we've talked about over the over 0:15:30.840 --> 0:15:34.880 the months, you know about the game stop trading and 0:15:35.440 --> 0:15:38.680 Arcagos family office blow up. He's got a lot of 0:15:38.680 --> 0:15:41.880 things that he needs to deal with, uh, stuff that's complex, 0:15:41.960 --> 0:15:45.480 high profile. UM And he's just added this to his list. 0:15:45.720 --> 0:15:48.560 So we're not totally sure, but it will be a while. 0:15:48.960 --> 0:15:52.560 And you know he is, as we point out in 0:15:52.560 --> 0:15:56.440 our article, he ran the Commodities Futures Trading Commission during 0:15:56.480 --> 0:15:59.840 the Obama administration and put in a whole new set 0:15:59.840 --> 0:16:03.200 of rules for swaps, which you know, many people think 0:16:03.280 --> 0:16:06.160 was a big cause of the financial crisis, and he 0:16:06.200 --> 0:16:09.080 did it fast and he muscled it through, so people 0:16:09.240 --> 0:16:12.280 are not discounting his ability to do this. You know, 0:16:12.360 --> 0:16:16.280 he's he's he's I guess he's kind of heroic almost 0:16:16.360 --> 0:16:19.280 in in that he came to the rescue there, and 0:16:19.280 --> 0:16:20.760 I think a lot of people on both sides of 0:16:20.800 --> 0:16:22.800 the aisle have a lot of respect for him. You 0:16:23.400 --> 0:16:29.640 quote Hester Pierce, Republican commissioner on the sec UM who 0:16:29.840 --> 0:16:32.160 is also more of a libertarian. She says, I come 0:16:32.200 --> 0:16:35.479 from a perspective that people should have the maximum freedom 0:16:35.520 --> 0:16:39.479 to engage in transactions they want to engage in voluntarily. 0:16:39.560 --> 0:16:43.920 Sounds almost American of her um, but she is supportive 0:16:44.080 --> 0:16:47.360 too of some regulations. She says society needs to have 0:16:47.400 --> 0:16:50.680 that discussion about what the right regulatory framework is. Yeah, 0:16:50.680 --> 0:16:52.960 she thinks that like, hey, we need to set rules, 0:16:53.160 --> 0:16:56.600 and maybe what she sees as regulations might be different 0:16:56.600 --> 0:16:59.800 than what Ginceler j'ss regulation. But she kind of agrees 0:16:59.840 --> 0:17:03.000 that in order for this all to take off and 0:17:03.040 --> 0:17:06.560 be beneficial to society and um, you know, maybe help 0:17:06.600 --> 0:17:09.560 our economy grow, that you really do need to kind 0:17:09.560 --> 0:17:14.040 of tell everybody what the what the rules are, so 0:17:14.359 --> 0:17:16.359 you know, they don't disagree on that. They probably do 0:17:16.440 --> 0:17:20.359 disagree on on you know, what the actual policy might be. 0:17:20.400 --> 0:17:22.959 But that's what these commissions do. They have five members, 0:17:22.960 --> 0:17:24.760 they get together, they talk about it, and they try 0:17:24.760 --> 0:17:26.560 to hash something out. And just to be clear, you know, 0:17:26.560 --> 0:17:29.200 one of the big problems that we have in crypto. 0:17:29.320 --> 0:17:33.120 Anybody who reads Matt Levin's columns UM gets a lot 0:17:33.119 --> 0:17:36.080 of info about the defive space and the fact that 0:17:36.520 --> 0:17:42.760 there are these Ponzi schemish rug poll um scams that 0:17:43.000 --> 0:17:46.240 continue to get investors over and over again. Not that 0:17:46.280 --> 0:17:48.520 the investors don't expect it to happen. I think a 0:17:48.520 --> 0:17:50.480 lot of people going into this no that they're gonna 0:17:50.480 --> 0:17:53.000 get ripped off half the time. But this is what 0:17:53.080 --> 0:17:54.840 they one of the main things they want to put 0:17:54.840 --> 0:17:57.359 a stop to, right, Yeah, they sure do. And the 0:17:57.560 --> 0:18:02.359 SEC kind of since, uh you since crypto exploded, has 0:18:02.400 --> 0:18:05.800 been kind of pursuing an aggressive enforcement approach on this 0:18:05.920 --> 0:18:09.360 and and Gaincler definitely says that, you know, the fraud 0:18:09.400 --> 0:18:11.200 has got to stop. We've got to figure out how 0:18:11.200 --> 0:18:13.199 to do this, uh, and he said he was going 0:18:13.200 --> 0:18:17.119 to continue um the investigations into all of this stuff. 0:18:17.280 --> 0:18:20.760 Can you talk about the influence gainst their wheels outside 0:18:20.760 --> 0:18:22.800 of just the sec you you talk about in the 0:18:22.880 --> 0:18:26.800 article how he also sits on the Financial Stability Oversight Council. Yeah, 0:18:26.800 --> 0:18:31.000 there's two kind of panels that that are important in 0:18:31.000 --> 0:18:33.800 this area. One is the Financial Stability Oversight Council that's 0:18:33.840 --> 0:18:37.840 kind of an uber group of regulators that looks at, um, 0:18:37.880 --> 0:18:41.720 you know, practices that are potentially dangerous to the financial system. 0:18:41.800 --> 0:18:44.720 And then the President's Working Group on Financial Markets, which 0:18:44.760 --> 0:18:48.040 is a smaller group that advises the President on some 0:18:48.160 --> 0:18:51.760 of these same you know, market impacts of things. And uh, 0:18:51.800 --> 0:18:56.000 he's really, um, the main person on both those panels 0:18:56.040 --> 0:18:59.040 that is, uh, you know, most experienced in crypto. So 0:18:59.119 --> 0:19:02.080 people who've worked with him on this stuff say that 0:19:02.359 --> 0:19:05.120 his his views are taken pretty seriously. Robert. He didn't 0:19:05.119 --> 0:19:06.680 give you any clue as to whether or not we're 0:19:06.680 --> 0:19:09.240 going to get a bitcoin ETF allowed in the U 0:19:09.320 --> 0:19:12.760 S anytime soon. Yeah, unfortunately not. Um, but he is 0:19:12.960 --> 0:19:17.120 giving a speech today at the Aspen Security Forum which 0:19:17.160 --> 0:19:20.480 may touch on some of that, and UM he said that, 0:19:21.000 --> 0:19:22.800 you know, he's continuing to think about it. And he 0:19:22.880 --> 0:19:25.240 understands that a lot of people are very interested in this. 0:19:25.480 --> 0:19:27.240 I feel like if he was going to tell Aspen, 0:19:27.520 --> 0:19:30.200 he probably would have told you, Benjamin, I have a 0:19:30.200 --> 0:19:32.800 feeling we're gonna be as well. Yeah, exactly. I think 0:19:32.800 --> 0:19:34.680 it's still going to be a little while, but for now, 0:19:34.760 --> 0:19:37.600 I think there's some Canadian ETFs that do pretty much 0:19:37.600 --> 0:19:39.840 the same thing. Great Big Take story, Robert, thanks so 0:19:39.920 --> 0:19:42.640 much for joining us. Really appreciate your insight. Robert Schmidt 0:19:43.200 --> 0:19:47.240 writing with Benjamin Bain about Gary Gensler getting ready for 0:19:47.560 --> 0:19:51.480 more crypto over society wants to make rules, which makes 0:19:51.480 --> 0:19:54.960 sense considering the fact that that's his job. He's a 0:19:55.040 --> 0:20:00.200 rulemaker UM in the Securities and Exchange Commission, and he's 0:20:00.200 --> 0:20:02.879 going to be dealing with something that he knows fortunately 0:20:02.920 --> 0:20:05.240 a lot about, So maybe people will be less angry 0:20:05.280 --> 0:20:07.480 about the rules that he makes. I think there are 0:20:07.480 --> 0:20:09.159 a lot of people that just don't understand what goes 0:20:09.200 --> 0:20:11.639 on in this space to begin with. But if you 0:20:11.800 --> 0:20:13.960 want to get a look at the story, decide n 0:20:14.080 --> 0:20:21.760 I big take go. This is Bloomberg. Let's get away 0:20:21.800 --> 0:20:24.560 from politics and get back over to the markets, because 0:20:24.560 --> 0:20:26.480 we're seeing a lot of action in the markets, say, 0:20:26.480 --> 0:20:29.880 not a lot of direction in terms of equity indexes, 0:20:29.920 --> 0:20:32.840 but um, we still see yields and incredible lows one 0:20:32.920 --> 0:20:37.760 sixteen fifty six on the tenure right now, and we see, uh, 0:20:37.800 --> 0:20:41.680 the the real yields right now dropping and they and 0:20:41.760 --> 0:20:44.320 they have been down for a while, but right now 0:20:44.560 --> 0:20:47.920 down at negative one hundred and eighteen basis points. So 0:20:48.160 --> 0:20:51.840 it's a pretty incredible Uh, it's a pretty incredible environment 0:20:51.880 --> 0:20:54.240 to working in. Dan Genter joins us. He is the 0:20:54.320 --> 0:20:57.400 chief executive officer of r NC Genter Capital Management. They've 0:20:57.400 --> 0:21:00.360 got five billion dollars of assets under management, and Dan, 0:21:00.400 --> 0:21:02.360 I wonder what you make of this. It must be 0:21:02.800 --> 0:21:06.160 one of the most asked questions. Why are rates so 0:21:06.359 --> 0:21:11.080 low if we're looking at economic growth that's so strong. Well, 0:21:11.119 --> 0:21:13.399 I think the only thing you can really look at, Matt, 0:21:13.480 --> 0:21:17.080 is that just a fairly typical flight to quality and 0:21:17.119 --> 0:21:19.760 the and the real concern here is what's happening with 0:21:19.800 --> 0:21:22.920 the delta variant of COVID nineteen. I mean, you we've 0:21:22.960 --> 0:21:26.399 had a number of false starts with regards to you know, 0:21:26.440 --> 0:21:28.800 people trying to come come out of the closet and 0:21:28.840 --> 0:21:32.359 get back and reintegrate into society and and now I 0:21:32.400 --> 0:21:35.800 think when companies literally were setting guidelines and dates for 0:21:35.840 --> 0:21:38.800 people to return to the office and setting in those parameters, 0:21:39.119 --> 0:21:40.679 you know, now they don't know what to do again. 0:21:41.000 --> 0:21:43.879 So I think that you're you're in a situation where 0:21:43.920 --> 0:21:46.840 you're combining two factors, which is the market has just 0:21:46.880 --> 0:21:50.120 had a tremendous run of what we've seen so far 0:21:50.240 --> 0:21:52.639 this year, both on the back of earnings and some 0:21:52.760 --> 0:21:56.119