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SkyBridge's Scaramucci On Why He Launched A Bitcoin Fund · Bloomberg Intelligence

• 0:01
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
• 0:04
  Speaker 1: with my co host of Bonnie Quinn. Every business day
• 0:06
  Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,
• 0:10
  Speaker 1: along with essential market moving news. Find the Bloomberg Markets
• 0:13
  Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,
• 0:17
  Speaker 1: and on Bloomberg dot com. Taking a look at x
• 0:20
  Speaker 1: BT on my Bloomberg terminal, Bitcoin thirty four at ninety dollars,
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  Speaker 1: up four point seven percent today, up five hundred and
• 0:29
  Speaker 1: fifty percent off of its March low, leading some folks
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  Speaker 1: to speculate whether this is this move is real or
• 0:36
  Speaker 1: if it's suspective of BUBBLEO. Next guest has a firm
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  Speaker 1: opinion on that. Anthony Scarmucci, founder and co managing partner
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  Speaker 1: of Skybridge Capital, joins this here. Anthony, thanks so much
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  Speaker 1: for joining us here. You guys at Skybridge launching a
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  Speaker 1: bitcoin fund. Tell us about that. Well, first of all,
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  Speaker 1: great to be honest. I I you know, we've done
• 0:56
  Speaker 1: a tunnel research on bitcoin. After my disaster or fiasco
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  Speaker 1: in the White House, I returned back to my own
• 1:03
  Speaker 1: firm and it took about three years for us to
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  Speaker 1: get comfortable frankly with bitcoin. But there are three things
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  Speaker 1: in place right now that I think are quite meaningful. Regulation,
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  Speaker 1: as you can see the December twenty three regulation or
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  Speaker 1: yesterday's decision by the control or currency to allow these
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  Speaker 1: stable coins to go through the system. UH. Secondarily, the
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  Speaker 1: architecture is in place now to store the stuff easily
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  Speaker 1: uh in an unhackable space. As an example, the Skybridge
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  Speaker 1: Bitcoin fund is using fidelity digital assets, and so that
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  Speaker 1: is a major upgrade to anything that was existing prior. UH.
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  Speaker 1: And the third reason, I think this is the most
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  Speaker 1: compelling reason bitcoin is one. If you take a look
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  Speaker 1: at crypto assets or digital forms of storage of value,
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  Speaker 1: Bitcoin at five and fifty billion dollars now has beaten
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  Speaker 1: the competitors. It was probably hit were attacked sixty hundred
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  Speaker 1: times uh since its inception twelve years ago. UH. And
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  Speaker 1: here we are now with an encrypted technology which is
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  Speaker 1: effectively a ledger. And as you and I both know
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  Speaker 1: when you study the history of money, that's all money
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  Speaker 1: really is. It's a ledger. UH. It's defended by tens
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  Speaker 1: of millions of people that are supporting the system. As
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  Speaker 1: an example, Skybridge as an active technological node attached to
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  Speaker 1: the bitcoin ecosphere. Uh and, so for us, we're very confident.
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  Speaker 1: I'm obviously got a great relationship with Michael Sailor and
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  Speaker 1: uh Tyler and Camberrall, Cameron Winklevoss, and I worked with
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  Speaker 1: Mike Novigrads closely at Goldman Sacks years ago, and while
• 2:43
  Speaker 1: it took us a long time to make the decision,
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  Speaker 1: we came in in a very big way for Skybridge.
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  Speaker 1: We put twenty five million dollars at the firm's capital
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  Speaker 1: into the Skybridge Bitcoin Fund, and we now have over
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  Speaker 1: three million dollars a bitcoin across our platform. Uh And
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  Speaker 1: I would encourage people to go to Skybridge bitcoin dot
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  Speaker 1: com to see all of the research, the white paper
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  Speaker 1: and the analysis that we've done as to why we
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  Speaker 1: see bitcoin becoming a digital form of gold um in
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  Speaker 1: the ensuing years and why it will be volatile. I
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  Speaker 1: have no doubt about that, but I think it's ascendency
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  Speaker 1: is real and I expected to be closing in on
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  Speaker 1: gold over the next ten to fifteen years, having a
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  Speaker 1: five five billion dollar market gap gold of course having
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  Speaker 1: a ten trillion dollar one five billion dollars. So, Anthony,
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  Speaker 1: who are the people that have come in post the
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  Speaker 1: Skybridge in influx of funds into the fund, are the
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  Speaker 1: institutional investors or retail investors. Well, it's certainly open to institutions,
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  Speaker 1: but I we've Skybridge has made its way predominantly what
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  Speaker 1: I would call the mass affluent at those would be
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  Speaker 1: accredited or qualified investors. And just to take you back
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  Speaker 1: thirty seconds on the history of Skybridge, we democratize the
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  Speaker 1: hedge fund space by having a fifty dollar minimum on
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  Speaker 1: our fund of funds, and so you could get access
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  Speaker 1: to hedge funds that way. We've done the same thing
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  Speaker 1: here with the bitcoin fund. It's a fifty thollar minimum.
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  Speaker 1: You've got to be a qualified investor to got to
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  Speaker 1: buy you a whole if if you're just to put
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  Speaker 1: that straight into bitcoin, it would buy you a whole
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  Speaker 1: coin and a bit. That's correct. That's that's correct. It's
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  Speaker 1: probably buying you about one point eight coins right now.
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  Speaker 1: They're about But listen, you know, I want this to
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  Speaker 1: be a buy and hold strategy for investors. The fund
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  Speaker 1: has a three year i'm sorry, a three month lock up,
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  Speaker 1: but we're also charging only seventy five basis points, and
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  Speaker 1: so if you compare it to something like Gray Scale,
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  Speaker 1: which is charging two and of course if you want
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  Speaker 1: to come into Gray Scales product, you have to pay
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  Speaker 1: that premium because it's trading on the pink sheets at
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  Speaker 1: a premium to where the underlying asset is actually trading,
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  Speaker 1: and so and so. In the Skybridge situation, we're trying
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  Speaker 1: to make this a the vest or friendly as possible.
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  Speaker 1: You can come directly into the fund, you own the
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  Speaker 1: bitcoin itself, it's stored up at Fidelity, and you have
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  Speaker 1: all those safety mechanisms associated with our fund management. I
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  Speaker 1: think I think if we've talked a lot of folks
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  Speaker 1: on on bitcoin, and I think if I could boil
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  Speaker 1: it down to the simplest of bull cases, limited supply
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  Speaker 1: and presumably growing demand, is that the fundamental bull case
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  Speaker 1: for you guys. Well, I think it's a technology as well.
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  Speaker 1: So I would say limited supply growing demand because people
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  Speaker 1: recognize that fiat currency has been damaged by the central
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  Speaker 1: banking system through their coordination to try to stave off
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  Speaker 1: these boom and bus cycles. Um and I think you
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  Speaker 1: just an example increase in the US dollar money supply
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  Speaker 1: in the last six months. So so it's a combination
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  Speaker 1: of macro forces, UH, scarcity and the acceptability of that
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  Speaker 1: digital ledger, uh, the notion that that ledger is impregnable
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  Speaker 1: through the through the block chain. So if you take
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  Speaker 1: all those things, you study the history of money, and
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  Speaker 1: you study the evolution of where we are right now.
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  Speaker 1: Bitcoined is portable, it's easier to store than gold. Uh
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  Speaker 1: and the result of which, if you really understand human beings,
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  Speaker 1: all we have is a ledger between each other. And
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  Speaker 1: so now this has become an acceptable form of that,
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  Speaker 1: and the result of which I think it's going to
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  Speaker 1: uh uh, it's going to replace gold ultimately. For you know,
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  Speaker 1: for my children, my adult children that are in their
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  Speaker 1: mid twenties, they see it as a better version of gold. Anthony,
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  Speaker 1: we're pretty much out of time, but talk to us
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  Speaker 1: just for a moment about Skybridge and the relationship with China.
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  Speaker 1: Is there going to be you know, any kind of
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  Speaker 1: partnership with any Chinese firms in the future or whatever
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  Speaker 1: happened to post the h n A episode, So you know,
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  Speaker 1: Siphius block that deal. The the federal government made a
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  Speaker 1: decision and again it wasn't personal the Skybridge. I think
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  Speaker 1: it was more uh centric to the Chinese US relationship.
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  Speaker 1: Result of which we disbanded that deal. We were thinking
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  Speaker 1: about doing a joint venture, and then because of what's
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  Speaker 1: going on between the United States and China at this moment,
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  Speaker 1: it wasn't practical. So there's nothing in the near future. Uh,
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  Speaker 1: you know, But I'm a long term oriented person. I
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  Speaker 1: do believe that the United States needs to have a
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  Speaker 1: very strong bilateral relationship with China, and notwithstanding our differences,
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  Speaker 1: and so who who Who's to say that we couldn't
• 7:35
  Speaker 1: have a Skybridge salt conference in Beijing or Shanghai someday. Well,
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  Speaker 1: I want to be open minded to that. Speaking of which,
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  Speaker 1: those salt talks continuing all the time. They're virtual talks
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  Speaker 1: now and anyone can can get in. And unfortunately we're
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  Speaker 1: on the area during some of them, so aren't tables
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  Speaker 1: listen to all of them. But Anthony, thank you very
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  Speaker 1: much for joining today. Congratulations on the launch of Skybridges
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  Speaker 1: new Skybridge Bitcoin fund. Anthony Scarlucci, found of Skybridge Capital.
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  Speaker 1: Bitcoin trading about thirty dollars thirty tho dollars at the moment,
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  Speaker 1: but JPM working talking about it going to one six
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  Speaker 1: thousand dollars and that's just in a note today. So
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  Speaker 1: fascinating conversations around bitcoin. But I know there's one question
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  Speaker 1: that I deeply, deeply want to know from you, Paul,
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  Speaker 1: and that is, what did you watch on New Year's
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  Speaker 1: Day or New Year's Eve? And wasn't Wonder Woman? It
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  Speaker 1: was not. It was probably sports pretty much across the board.
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  Speaker 1: But I think people are consuming movies Vannie so much
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  Speaker 1: differently post pandemic than that we were just you know,
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  Speaker 1: several months ago. Okay, but I'm just going to push
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  Speaker 1: a little further. Did you watch or even attempt to
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  Speaker 1: watch Wonder Woman? Did not? All? Right? Well I did.
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  Speaker 1: I must say this, This idea that it was on
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  Speaker 1: HBO Max, meaning that you didn't have to go to
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  Speaker 1: the theater. It reeled me in, I have to say,
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  Speaker 1: And I tried to watch. I didn't make it all
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  Speaker 1: the way through, which is unusual. But nevertheless it did
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  Speaker 1: make me go back and watch Wonder Woman one. And
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  Speaker 1: essentially what I'm trying to say is that given that
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  Speaker 1: it was easier just to sit at home and watch
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  Speaker 1: it than you know, that meant that I watched at
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  Speaker 1: home and I didn't go out to the movie theater.
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  Speaker 1: And the movie theater business has been in shocking state,
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  Speaker 1: really just suffering the slings and arrows of this outrageous
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  Speaker 1: pandemic over the last twelve months all around the world,
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  Speaker 1: and we've seen as many of the talks, and of
• 9:24
  Speaker 1: course our next guests had to suffer that too, Pole. Yeah, absolutely,
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  Speaker 1: I mean, I think that the theater business has been
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  Speaker 1: just so hit so hard, Vonnie, because two reasons obviously,
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  Speaker 1: stay at home, the quarantines, and then number two, uh,
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  Speaker 1: there's just much, much, much less content in the theaters
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  Speaker 1: as we see the studios really releasing even their A
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  Speaker 1: list blockbuster content direct to consumers on their streaming services,
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  Speaker 1: as companies like Disney, the the biggest studio in Hollywood,
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  Speaker 1: really pivoting the company itself uh to uh streaming, and
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  Speaker 1: even you know, stunts like Tom Cruise going to the
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  Speaker 1: movie theater in public filmed cannot bring people back to
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  Speaker 1: the theater if there's a lockdown happening, which right now
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  Speaker 1: is the case in London and in Germany and in
• 10:13
  Speaker 1: some places in the United States. So let's bring in
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  Speaker 1: the person who has been really trying to weather this
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  Speaker 1: for IMAX. He is the CEO of IMAX, and that
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  Speaker 1: is Richard Gelfond and Richards, thank you very much for
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  Speaker 1: joining us today. You know it's been it's been a
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  Speaker 1: tough tough year in your industry. I wonder if you
• 10:30
  Speaker 1: see any glimmers of hope for your industry right now. Yeah,
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  Speaker 1: I do, Bunny, And in fact, we fared better than
• 10:38
  Speaker 1: almost anyone because, um, we have two reasons. One we
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  Speaker 1: have a global footprint rather than North America based, and
• 10:45
  Speaker 1: two because we do blockbuster movies, both of which have
• 10:50
  Speaker 1: managed to do okay during this So first the global part,
• 10:53
  Speaker 1: we're in eighty two countries and particularly in Asia where
• 10:58
  Speaker 1: the theaters have been open for months, generally since September, UM,
• 11:02
  Speaker 1: things have gone quite well. So you look at China,
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  Speaker 1: for example, just this past weekend for New Year's it
• 11:09
  Speaker 1: was the biggest New Year's weekend we ever had. We
• 11:12
  Speaker 1: did a film called shock Wave two, and we were
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  Speaker 1: of the Chinese box office on one of the screens. UM.
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  Speaker 1: For all of December, UM we were up eight percent,
• 11:24
  Speaker 1: which is also quite impressive. And in the third quarter,
• 11:27
  Speaker 1: UM we were flat till last year, and all that
• 11:30
  Speaker 1: is without Hollywood films. So I'd say it's beyond a
• 11:34
  Speaker 1: glimmer of hope. I think when people feel safe and
• 11:37
  Speaker 1: the films are available, they're going to go back to
• 11:40
  Speaker 1: the movies. To us, it's not much of a question
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  Speaker 1: because we've you know, our our vision as well beyond
• 11:46
  Speaker 1: the shores of North America. So Richard, give us a sense,
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  Speaker 1: um in your discussions with the Hollywood studios, Um, to
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  Speaker 1: what extent do you think they will revert to the
• 11:58
  Speaker 1: typical windowing if you will, and put most of their
• 12:02
  Speaker 1: you know, A list films with a theatrical window as
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  Speaker 1: opposed to going uh direct to their streaming services. How
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  Speaker 1: do you think this is going to play out on
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  Speaker 1: the other side, Yeah, I think the way you frame
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  Speaker 1: the question, Paul, when you said A list movies, I
• 12:17
  Speaker 1: think virtually all of the A list movies will will
• 12:21
  Speaker 1: still be released theatrically. I think maybe some of the
• 12:24
  Speaker 1: smaller movies won't be, but the economics are just gonna
• 12:28
  Speaker 1: be overwhelming um to do that. I mean, you look
• 12:31
  Speaker 1: at what Disney announced that their investor Day, and pretty
• 12:34
  Speaker 1: much every blockbuster film, the kinds of films that Imax
• 12:39
  Speaker 1: does they announced were staying theatrical. And whether that was
• 12:42
  Speaker 1: Black Widow or whether it was the other Marvel movies
• 12:45
  Speaker 1: or um, whether it was Jungle Cruise or some of
• 12:48
  Speaker 1: the Pixar movies, they moved them. And all the other
• 12:51
  Speaker 1: films blockbusters that were scheduled theatrically for this year, including
• 12:56
  Speaker 1: um Baverick, the Tom Cruise, Um sequel to Top Gun,
• 13:01
  Speaker 1: including Um bond Um, all of those have been moved
• 13:06
  Speaker 1: in the year. So I just don't think that's an issue.
• 13:09
  Speaker 1: I think there's a pandemic solution, which is to move
• 13:12
  Speaker 1: some of them to streaming, and I get that it
• 13:14
  Speaker 1: makes sense. And then there's a post pandemic solution. And
• 13:18
  Speaker 1: as I said earlier in answered the first question, if
• 13:22
  Speaker 1: it's not a pandemic, I think it's going to go
• 13:24
  Speaker 1: back to the way it was. You mentioned Richards, it
• 13:28
  Speaker 1: calls eighty two countries. Have you had to work with
• 13:32
  Speaker 1: the local providers or franchisees or however it works to
• 13:37
  Speaker 1: make the theater is more amenable during a pandemic time.
• 13:41
  Speaker 1: Have you had to separate seating more. Have you had
• 13:43
  Speaker 1: to get rid of you know, the the the merchandise
• 13:47
  Speaker 1: areas and the consignment areas and so on. Well, we
• 13:51
  Speaker 1: license our technology around the world, so it's up to
• 13:54
  Speaker 1: the operator in each country to comply with local regulation.
• 13:59
  Speaker 1: But of course we've had to be involved in that,
• 14:01
  Speaker 1: and yes, there has been capacity restrictions. So even today
• 14:05
  Speaker 1: in Asia, where I indicated we're doing so well, that's
• 14:09
  Speaker 1: with se capacity limitations that are still in place. And
• 14:14
  Speaker 1: in North America where the theaters have been open, that's
• 14:17
  Speaker 1: typically been capacity in some cases maybe, and the whole
• 14:24
  Speaker 1: cinema industry has worked on things like requiring mass upgrading
• 14:30
  Speaker 1: ventilation systems, separate entrances, in separate exit to make people
• 14:35
  Speaker 1: feel more comfortable. Right, Hey, Richard, thanks so much for
• 14:38
  Speaker 1: joining us. Really appreciated. Richard Gelfond, CEO of IMAX. Based
• 14:42
  Speaker 1: on a long island, you're giving us his update of
• 14:45
  Speaker 1: the theater business in a pandemic world. Looking forward to
• 14:49
  Speaker 1: the other side. Let's get now to the outlook for
• 14:53
  Speaker 1: what might happen beyond George's outcome. Gina Martina's chief equity
• 14:57
  Speaker 1: strategist for Bloomberg Intelligence. You know, you obviously came out
• 15:01
  Speaker 1: with a look ahead for the whole year right before
• 15:03
  Speaker 1: the end of last year. But I'm curious as to
• 15:06
  Speaker 1: just in a very short term, how are investors positioned
• 15:09
  Speaker 1: for today's Senate runoffs. Yeah, I think in general, as
• 15:13
  Speaker 1: investors have ignored the idea that we could still have
• 15:17
  Speaker 1: a blue wave impact hang Washington. I think we tried
• 15:20
  Speaker 1: to price in a blue wave prior to the election.
• 15:22
  Speaker 1: We then priced it out. Um. Now investors are kind
• 15:25
  Speaker 1: of grappling with this idea that, oh, maybe we will
• 15:29
  Speaker 1: end up having a blue wave, and what does that mean?
• 15:30
  Speaker 1: What does it mean in particular for tech stocks and
• 15:33
  Speaker 1: multinationals is the really big question because it doesn't necessarily
• 15:36
  Speaker 1: need to alter the overall direction of the equity market.
• 15:40
  Speaker 1: But if we do have a blue wave wash over Washington,
• 15:44
  Speaker 1: we most likely will have a little bit of an
• 15:46
  Speaker 1: alteration of sort of sector thematic maybe even style performance
• 15:50
  Speaker 1: going forward. Yeah, I mean, if that's the case, you know,
• 15:54
  Speaker 1: I mean, is there going to be an obvious change
• 15:57
  Speaker 1: in sort of the overall indices beyond tomorrow if if
• 16:00
  Speaker 1: the market gets a result it doesn't expect. Well, if
• 16:04
  Speaker 1: we do have a blue wave, the biggest, most obvious
• 16:07
  Speaker 1: change is that we will likely see fiscal policy paid
• 16:11
  Speaker 1: for through corporate text rate increase, and most likely a
• 16:14
  Speaker 1: lot of that corporate textr rate increase will fall on
• 16:18
  Speaker 1: the shoulders of multinational companies, in particular large cap tech companies.
• 16:22
  Speaker 1: So what I would expect to see if we do
• 16:25
  Speaker 1: see um both seats go to the Democrats, which, by
• 16:28
  Speaker 1: the way, I don't think we'll know tomorrow. I think
• 16:30
  Speaker 1: it's going to be an extended period of counting votes
• 16:33
  Speaker 1: once again, and we're going to have to sort of
• 16:35
  Speaker 1: price this in over a period of time. But if
• 16:37
  Speaker 1: it does look like both seats go to the Democratic
• 16:40
  Speaker 1: candidates and the Senate shifts to Democratic majority, in that case,
• 16:45
  Speaker 1: we most likely will see corporate tax reform, and the
• 16:48
  Speaker 1: result of that is going to be probably a loss
• 16:50
  Speaker 1: of significant momentum for big cap tex s docs, which
• 16:54
  Speaker 1: had a pretty significant comeback in the month of December,
• 16:57
  Speaker 1: really erasing a lot of the weakness that had emerged
• 17:00
  Speaker 1: rior to the election. Will the market be quite confident
• 17:03
  Speaker 1: that if the two seats go Democrat that the Biden
• 17:06
  Speaker 1: administration will be able to enact whatever legislation it decides.
• 17:10
  Speaker 1: I mean, even if both seats go Democrat, it will
• 17:13
  Speaker 1: be a pretty pretty sliver thin the majority. Yeah, And
• 17:18
  Speaker 1: as a result of that is most likely we get
• 17:21
  Speaker 1: a bigger fiscal spending package than we had priced in.
• 17:24
  Speaker 1: Most likely we get some form of corporate tax reform.
• 17:28
  Speaker 1: Um most likely you see a move toward alternative energy
• 17:31
  Speaker 1: sources of funded at the federal level. It just increases
• 17:36
  Speaker 1: the likelihood. It doesn't necessarily mean we price in everything
• 17:40
  Speaker 1: on the Biden agenda, UM, but it certainly gives it
• 17:43
  Speaker 1: a better possibility of happening or an increased probability of happening,
• 17:47
  Speaker 1: which was not in the market consensus as of December, Gina,
• 17:53
  Speaker 1: Given that it's going to be a Biden administration, will
• 17:57
  Speaker 1: the the the political headlines have you know less of
• 18:00
  Speaker 1: an impact on this market than did the Trump presidency,
• 18:03
  Speaker 1: would you imagine? I suspect so. I think the big
• 18:07
  Speaker 1: shift that we're talking less about, but we probably should
• 18:11
  Speaker 1: be talking more about, is what's happened what's likely to
• 18:13
  Speaker 1: happen with trade and with the dollar. I think one
• 18:16
  Speaker 1: of the things that was sort of under appreciated in
• 18:18
  Speaker 1: the environment of volatility that we had was how much
• 18:23
  Speaker 1: the dollar strength contributed to asset allocation and equity market
• 18:27
  Speaker 1: performance globally, as well as equity market performance even in
• 18:30
  Speaker 1: the United States. UM the result of more visible or
• 18:37
  Speaker 1: clearer trade policy. Less uncertainty with respect to trade probably
• 18:41
  Speaker 1: is one of the key contributors to the dollar's recent turnover.
• 18:46
  Speaker 1: As investors are more ristolerant. They see a more visible environment,
• 18:50
  Speaker 1: more predictable environment for trade. That's starting to impact asset
• 18:53
  Speaker 1: allocation globally, benefiting emerging market stocks over US docks is
• 18:58
  Speaker 1: a good example, UM that dollar weakness has also emerged,
• 19:03
  Speaker 1: improving risk taking globally. The dollar strengthens obviously an environment
• 19:08
  Speaker 1: of fear and environment of risk taking, the dollar gets
• 19:10
  Speaker 1: the flight to quality benefit that tends to benefit large
• 19:13
  Speaker 1: cap stocks in the US over small caps. We're seeing
• 19:15
  Speaker 1: a reversal of that trade as well. So I do
• 19:18
  Speaker 1: think that there are quite a bit of opportunity. It's
• 19:21
  Speaker 1: quite a bit of an opportunity for the dollar to
• 19:23
  Speaker 1: continue to drop as we see some of that risk
• 19:27
  Speaker 1: intolerance that emerged in the last two years of the
• 19:30
  Speaker 1: Trump administration get reversed and Gina, we're pretty much out
• 19:33
  Speaker 1: of time. But Janet Yellen as Treasury secretary, is that
• 19:35
  Speaker 1: going to make a material difference to these markets? I
• 19:39
  Speaker 1: think it did. You know, we obviously saw once the
• 19:41
  Speaker 1: announcement came in UM several weeks back, we saw the
• 19:44
  Speaker 1: markets put in a bit of a relief rally. You know,
• 19:47
  Speaker 1: she's a steady hand. It was very clear that she
• 19:49
  Speaker 1: was a steady hand at the Fed. We have another
• 19:51
  Speaker 1: steady hand assured now at the Treasury. As a result,
• 19:55
  Speaker 1: we'll see what the policy shift looks like as a
• 19:58
  Speaker 1: result of a yellow treasury um. I don't know that
• 20:01
  Speaker 1: that's terribly predictable. Are we going to see a massive
• 20:04
  Speaker 1: policy shift or not? But I do think the markets
• 20:07
  Speaker 1: are seized by the certainty of having that steady hand
• 20:11
  Speaker 1: at the helm. Alright, Gina, thank you and halping you
• 20:13
  Speaker 1: r Gina mart Now, I'm chief equity strategist for Bloomberg
• 20:16
  Speaker 1: Intelligence w G. I growed so just below fifty dollars
• 20:21
  Speaker 1: a barrel bots in the last couple of hours we
• 20:23
  Speaker 1: did have at top fifty dollars a barrel for the
• 20:26
  Speaker 1: first time in months and months and months, And now,
• 20:28
  Speaker 1: according to a delegate, we have an opaque plus deal
• 20:31
  Speaker 1: on February output at least no better time to bring
• 20:34
  Speaker 1: in Stephen Short, President of the Short Group and editor
• 20:36
  Speaker 1: of the Short Groupport. Stephen, you have been following the
• 20:39
  Speaker 1: headlines all morning, but we have officially now from a
• 20:41
  Speaker 1: delegate the word that Saudi Arabia will voluntarily cut output,
• 20:45
  Speaker 1: Russia and Kazakhstan will increase output at least for the
• 20:48
  Speaker 1: month of February. Was this always a done deal? Well,
• 20:52
  Speaker 1: I think certainly. The prospects of a production increase we're
• 20:58
  Speaker 1: certainly limited. So the fact that the Saudis are kicking
• 21:01
  Speaker 1: in so we'll have a net zero sum for February
• 21:04
  Speaker 1: does I think fall within expectations. The market has been
• 21:08
  Speaker 1: moving up on these moves over the past well, in
• 21:12
  Speaker 1: the past half of December. We did sell off smartly
• 21:15
  Speaker 1: yesterday when it looked like we were going to get
• 21:17
  Speaker 1: a production increase. That has gone by the wayside now
• 21:21
  Speaker 1: and the markets correct and higher. To your point, w
• 21:24
  Speaker 1: t I now is touched fifty dollars a barrel. Let's
• 21:27
  Speaker 1: keep in mind there's nothing magical about fifty dollars a
• 21:30
  Speaker 1: barrel other than the fact that it's got a five
• 21:32
  Speaker 1: in its handle. It's just a psychological number. That said,
• 21:36
  Speaker 1: we're still at levels that we are well below a
• 21:40
  Speaker 1: year ago at this point. So effectively, we've had a
• 21:44
  Speaker 1: nice rally of rebound in the fourth quarter, but we're
• 21:47
  Speaker 1: no better off today than where we are at the
• 21:50
  Speaker 1: back of the start of this well the start of
• 21:53
  Speaker 1: last year, I should say. Another headline crossing the Bloomberg
• 21:56
  Speaker 1: terminal UH. As it relates to energy, the farm sout
• 22:00
  Speaker 1: a foreign minister says Arab states to fully restore UH
• 22:04
  Speaker 1: cutter ties. So some more news out of the Mid East.
• 22:07
  Speaker 1: We'll have more on that coming up, uh, Stephen. It
• 22:09
  Speaker 1: kind of brings us back to the demand picture. We're seeing,
• 22:13
  Speaker 1: uh the UK enter into another lockdown here. What's the
• 22:18
  Speaker 1: view of the the energy marketplace, the oil marketplace on
• 22:21
  Speaker 1: kind of the demand picture over the next call it
• 22:24
  Speaker 1: six or twelve months. Yeah, absolutely, We're we've now entered
• 22:28
  Speaker 1: a new era of oil demand, the elasticities demand or
• 22:32
  Speaker 1: in the process of changing forever. That of course is
• 22:36
  Speaker 1: related to the introduction of substitute into the market electric vehicles.
• 22:40
  Speaker 1: We also have the introduction of a variable that was
• 22:43
  Speaker 1: on no one's radar a year ago, and that is
• 22:46
  Speaker 1: the change in dynamics in commuters. We're still a good
• 22:49
  Speaker 1: portion of us are still working from our homes. When
• 22:52
  Speaker 1: we do get back to some sort of semblance of normalcy,
• 22:56
  Speaker 1: many computer commuters are are not going back. They're going
• 22:59
  Speaker 1: to continue to work from home. So it's completely changing
• 23:02
  Speaker 1: dynamics with regard to the introduction of something other than gasoline,
• 23:08
  Speaker 1: and are changing appetite for gasoline. So demand clearly will
• 23:13
  Speaker 1: on a year year basis improve, that's just a function
• 23:16
  Speaker 1: of how poor demand was over the past year. But
• 23:20
  Speaker 1: clearly we're looking at a change in dynamic where demand
• 23:24
  Speaker 1: is going to be muted for the foreseeable future. Saudi clearly,
• 23:29
  Speaker 1: you know, had to be the one to cut out
• 23:30
  Speaker 1: put in order for the likes of Russia and Kazakhstan
• 23:33
  Speaker 1: to boost out. But a little bit. How much will
• 23:35
  Speaker 1: this put a dent in Saudi resources for the foreseeable future?
• 23:38
  Speaker 1: Steven is is it a nasty setback for them? Actually?
• 23:42
  Speaker 1: You know, I think Saudi has already been more market
• 23:45
  Speaker 1: share oriented as opposed to price level oriented. So what
• 23:51
  Speaker 1: the Saudis are doing is clearly we're looking at Look,
• 23:55
  Speaker 1: oil is not going away any time and in anyone's
• 23:58
  Speaker 1: lifetime on this call. But that said, the market share
• 24:03
  Speaker 1: is going to continue to dwindle society. Radia is protecting
• 24:06
  Speaker 1: its share in the global market. Uh So it's taking
• 24:09
  Speaker 1: a short term hit for longer term preservation. Stephen, what
• 24:14
  Speaker 1: have we seen from the US producers, you know, over
• 24:17
  Speaker 1: the last several months and what's the expectation for them
• 24:20
  Speaker 1: as we think about supply Well, producers last summer, I
• 24:25
  Speaker 1: did a yeoman's job in cutting production. Uh. Clearly this
• 24:29
  Speaker 1: had to be done. With the market signals, Uh, we're
• 24:32
  Speaker 1: starting to see a rebound in a a stabilization in production.
• 24:37
  Speaker 1: At around eleven million barrels a day, we're looked to
• 24:40
  Speaker 1: hold steady at this point from a pricing standpoint. When
• 24:44
  Speaker 1: we were back at the worst of it, we were
• 24:47
  Speaker 1: below thirty dollars a barrel. That wasn't even enough to
• 24:50
  Speaker 1: keep the current rigs producing rigs online. Now that w
• 24:54
  Speaker 1: t I is in that mid mid to high forty
• 24:57
  Speaker 1: dollar range, we're clearly looking at a stabilization and production.
• 25:01
  Speaker 1: We will not see any new production from the U
• 25:05
  Speaker 1: S producer unless he gets sustained prices w t I
• 25:08
  Speaker 1: prices in that mid the high fifty dollar range, I'm
• 25:11
  Speaker 1: a little skeptical we can get that high. But from
• 25:13
  Speaker 1: a US production standpoint, they've been able to weather the
• 25:17
  Speaker 1: worst of it at this point. You know, with the
• 25:21
  Speaker 1: oil price now in that fifty dollar range, that's more
• 25:23
  Speaker 1: in the reelhouse. Of course, the current rusk at this
• 25:26
  Speaker 1: point now is a second wave of lockdowns which will
• 25:30
  Speaker 1: exacerbate demand decay. And let's not lose sight of the
• 25:34
  Speaker 1: fact that Iran is now back in the headlines. Any
• 25:38
  Speaker 1: sort of easing sanctions with the rant with the new
• 25:41
  Speaker 1: administration will allow a raining and by an extent, Venezuelan
• 25:45
  Speaker 1: oil to be reintroduced to the market, adding more supply
• 25:49
  Speaker 1: to the market. And clearly this is something that is
• 25:52
  Speaker 1: on the radar of Saudi Arabia and hence their decision
• 25:56
  Speaker 1: to try and keep supply at a reasonable level as
• 26:00
  Speaker 1: we roll into the new administration here in the US. Hey, Steven,
• 26:04
  Speaker 1: thanks so much for joining us. A great timing here
• 26:06
  Speaker 1: to get you on to talk a global oil as
• 26:08
  Speaker 1: w t I briefly hits fifty dollars per barrel today.
• 26:12
  Speaker 1: We appreciated Stephen Short, President of the Short Group, editor
• 26:15
  Speaker 1: of the Short Report based in Villanova, Pennsylvania. We appreciate
• 26:20
  Speaker 1: him coming on IVANNI. A big day UH in the
• 26:22
  Speaker 1: energy markets getting you know the saudis to cut production slightly. UM.
• 26:27
  Speaker 1: That is certainly bullish for the price of global crude oil. UH.
• 26:31
  Speaker 1: The issue will be I think you know what we're
• 26:33
  Speaker 1: hearing from the likes of Steven Short is going to
• 26:35
  Speaker 1: be demand going forward and that will be a key driver.
• 26:38
  Speaker 1: As always, Thanks For listening to the Boomberg Markets podcast,
• 26:42
  Speaker 1: you can subscribe and listen to interviews at Apple Podcasts
• 26:46
  Speaker 1: or whatever podcast platform you prefer. I'm Bonnie Quinn, I'm
• 26:49
  Speaker 1: on Twitter at Bonnie Quinn. And I'm Paul Sweeney. I'm
• 26:52
  Speaker 1: on Twitter at pt Sweeney. Before the podcast, you can
• 26:55
  Speaker 1: always catch us worldwide at Bloomberg Radio