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Fed's Williams Is Trying to Clean Up Powell's Error (Podcast) · Bloomberg Intelligence

• 0:05
  Speaker 1: Welcome to the Bloomberg pim L Podcast. I'm pim Fox
• 0:08
  Speaker 1: along with my co host Lisa A. Brahmowitz. Each day
• 0:11
  Speaker 1: we bring you the most important, noteworthy, and useful interviews
• 0:15
  Speaker 1: for you and your money, whether you're at the grocery
• 0:17
  Speaker 1: store or the trading floor. Find the Bloomberg p m
• 0:20
  Speaker 1: L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com.
• 0:32
  Speaker 1: Phil Orlando joining us now in our Bloomberg Interactive Broker Studios.
• 0:35
  Speaker 1: Phil Orlando, of course, chief Equity market Strategistic Federated Investors.
• 0:39
  Speaker 1: He brought his blood pressure medication with him because it's
• 0:41
  Speaker 1: been that kind of that kind of weak. Um, so
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  Speaker 1: is this enough. It's a step in the right direction.
• 0:47
  Speaker 1: I mean, we've seen this movie before. We we think
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  Speaker 1: we know how it ends. The beginning of October, Powell
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  Speaker 1: makes a rookie mistake saying we're a ways away from
• 0:57
  Speaker 1: neutral in the market. That's when we started to roll
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  Speaker 1: over and I and then he has that special technical term.
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  Speaker 1: So then he has this the lunch at the New
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  Speaker 1: York on November right. I was at that lunch along
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  Speaker 1: with my closest friends, and he did the right thing.
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  Speaker 1: He explained to us in a little bit more detail
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  Speaker 1: exactly what he meant, uh, we're very close to neutral.
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  Speaker 1: And and as I walked out of that meeting, having
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  Speaker 1: read his transcript, having listened to his speech, in my
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  Speaker 1: mind it was like, Okay, we're gonna get a hike
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  Speaker 1: in December. That's fine, We're gonna get one more hike
• 1:35
  Speaker 1: later in ten. I think we're gonna skip March because
• 1:40
  Speaker 1: of the March first deadline with the China trade deal
• 1:44
  Speaker 1: and breaks it coming at the end of March and
• 1:46
  Speaker 1: ceiling debate, and exactly so. So in my mind, I
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  Speaker 1: walked out of that lunch in November saying, the Fed's
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  Speaker 1: got one, maybe two hikes left and then we're done.
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  Speaker 1: And what did the market do? They rallied? Okay. So
• 1:59
  Speaker 1: then we fast forward to fo MC meeting and everyone
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  Speaker 1: myself at the top of this list or expecting the
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  Speaker 1: FED to come in adjust the dot plots from what
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  Speaker 1: we saw at the September f MC meeting, literally pull
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  Speaker 1: in their horns. And then during the Q and A,
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  Speaker 1: we were expecting Powell to sort of put some some
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  Speaker 1: flesh on those bones and explain, all right, we just
• 2:19
  Speaker 1: got a hike, We're probably gonna skip March for a
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  Speaker 1: couple of reasons. We've got one more hike next year
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  Speaker 1: and then we're probably done. That's not what he did,
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  Speaker 1: and and that's why the market responded is violently to
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  Speaker 1: the downside, as they did the last couple of days.
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  Speaker 1: So fast forward to this morning. Uh, John Williams is
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  Speaker 1: is trotted out on Steve Leesman Show, and and he's
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  Speaker 1: trying to reset what what the chairman perhaps had intended
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  Speaker 1: to say with that answer? All right, let's let's roll
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  Speaker 1: it to the balance sheet? What do you think the
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  Speaker 1: Fed is looking to do as it relates to, you know,
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  Speaker 1: quantitative tightening as we roll into do you think this
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  Speaker 1: is gonna play out? So I think we've got a
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  Speaker 1: pretty good beat on this that that the Fed's balance
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  Speaker 1: sheet peeked out about four and a half trillion dollars,
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  Speaker 1: up from a number below one trillion at the beginning.
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  Speaker 1: So they've got to pull that in and I think
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  Speaker 1: create dry powder. They need to prepare for the next recession,
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  Speaker 1: which we don't think is next year. We still think two.
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  Speaker 1: And I think they need to pull that back to
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  Speaker 1: about the three trillion dollar level. Right now, they're rolling
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  Speaker 1: it off at a pace of about fifty billion dollars
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  Speaker 1: a month. So where we are right now I think
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  Speaker 1: is just a shade over four trillion dollars. We're gonna
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  Speaker 1: roll off six hundred billion next year. That gets us
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  Speaker 1: to about three four or so, and then if we
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  Speaker 1: rolled another six hundred billion off in twenty, that takes
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  Speaker 1: us down about two point eight. Somewhere in there, somewhere
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  Speaker 1: between two eight and three four, you know, let's call
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  Speaker 1: it three three and a quarter or something like that.
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  Speaker 1: That's where I think the Fed stops. But when he
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  Speaker 1: got the question during the press conference, what are you
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  Speaker 1: doing with the balance sheet, he was like, Oh, we're
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  Speaker 1: on autopilot. Explain to us what that means. That Hold
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  Speaker 1: on a second. I think he did more than that.
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  Speaker 1: I think it wasn't just that we're on a pilot.
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  Speaker 1: He seemed to dismiss the significance that quantitative tightening or
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  Speaker 1: letting the balance sheet roll off had on markets, that
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  Speaker 1: the reality is that the market is very concerned about
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  Speaker 1: that because we don't have a full sense. Are they
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  Speaker 1: going back to you know, a trillion dollars, are they
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  Speaker 1: going to zero, or were they going to some intermediate
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  Speaker 1: level at which everyone is comfortable I think some more
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  Speaker 1: discussion around that point would have been more helpful to
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  Speaker 1: keep the market calm. Do you think Chairman pal has
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  Speaker 1: lost the market And by that I mean as he
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  Speaker 1: lost the confidence at market participants, And if so, what
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  Speaker 1: do we do? So? I was on Maria Bromo show
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  Speaker 1: Monday morning, and we were laughing over the rookie mistake
• 4:42
  Speaker 1: that Ben Bernanke had made with her at a cocktail party,
• 4:46
  Speaker 1: talking about stuff he shouldn't have been talking about. But
• 4:49
  Speaker 1: he learned from that mistake and improved. Jenny Yellen made
• 4:52
  Speaker 1: a mistake in her first year telling everyone they should
• 4:55
  Speaker 1: sell biotechnology stocks that obviously didn't work very well. So
• 5:00
  Speaker 1: well had his rookie mistake in in October, he should
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  Speaker 1: have learned from that. And and you know, I, you know,
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  Speaker 1: speaking personally, and disappointed that we got the performance we
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  Speaker 1: got two days ago with three days ago, we should
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  Speaker 1: have gotten a better, tighter presentation. And I think that's
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  Speaker 1: why the Williams comment this morning was so important. Honestly,
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  Speaker 1: I could easily see somebody saying he gave us exactly
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  Speaker 1: what he should have given us. He was saying that
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  Speaker 1: the economy looks pretty strong. Their data dependent they're convicting
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  Speaker 1: they have you know, right now it appears that things
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  Speaker 1: are going well. They don't want to respond too much
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  Speaker 1: to markets and use, you know, the stock market as
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  Speaker 1: a barometer of whether or not they should hike. What
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  Speaker 1: did you say that was that different? Number one and
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  Speaker 1: number two? You know, honestly, at a certain point, aren't
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  Speaker 1: we just seeing price discovery for the first time in
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  Speaker 1: a decade? Lisa, You're you're a thousand percent correct that
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  Speaker 1: the context of the environment you're in is something that
• 5:53
  Speaker 1: that he's oblivious to. The the S and P five
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  Speaker 1: hundreds down sixteen since the middle of September, rustles down twenty.
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  Speaker 1: We're sort of in a free fall here at a
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  Speaker 1: point in the seasonal cycle where the market should be
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  Speaker 1: going up. The economic that is pretty good, corporate earning
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  Speaker 1: is a pretty good GDP growth is pretty good. Yet
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  Speaker 1: we're in a free fall. That suggested that the market
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  Speaker 1: is skittish, it's nervous, it's concerned, and and the Fed
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  Speaker 1: should have recognized that. And I think Williams sort of
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  Speaker 1: made that comment today. We we we we are looking
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  Speaker 1: at what the markets telling us. Where we're we're cognizant
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  Speaker 1: of what the market is telling us, and I think
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  Speaker 1: that the market perceived Wednesday that the Powell was sort
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  Speaker 1: of oblivious to what's going on right now. So real quickly,
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  Speaker 1: given all of that, all that uncertainty that maybe have
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  Speaker 1: been contributed by the Fed, what are you telling your
• 6:42
  Speaker 1: clients in Well, we're telling them that that when we
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  Speaker 1: once we get work our way through all of this
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  Speaker 1: noise and nonsense, there's gonna be a massive buying opportunity.
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  Speaker 1: And as we look at the fundamentals, and ultimately that's
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  Speaker 1: what we're trying to do. And over the course of
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  Speaker 1: the next year, we think that corp earnings in twenty
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  Speaker 1: nine are going to be a hundred and seventy dollars
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  Speaker 1: off of a hundred and sixty dollars this year. Now
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  Speaker 1: that's only up five or six percent as opposed to
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  Speaker 1: five percent this year, So will there'll be a deceleration
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  Speaker 1: and earnings growth? Yes. Multiples Price earnings ratios over the
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  Speaker 1: last three or four months have contracted from eighteen times
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  Speaker 1: earnings trading a little over fourteen times earnings right now,
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  Speaker 1: we've lost four multiple points. We believe that an eighteen
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  Speaker 1: multiple is the appropriate multiple given the relatively benign nature
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  Speaker 1: of both interest rates and inflation. So if that's right,
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  Speaker 1: and we're slapping an eighteen multiple on a hundred and
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  Speaker 1: seventy dollars and earnings, that's thirty one the SMP. We're
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  Speaker 1: sitting here in what dred I mean that you're looking
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  Speaker 1: at at, you know, a twenty plus kind of return.
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  Speaker 1: But there's a lot of stuff that's got to happen
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  Speaker 1: in between now and declaring a bottom. And and the
• 7:49
  Speaker 1: things I'd look at are going to happen next spring
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  Speaker 1: and or next March in terms of the Breggit deadline
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  Speaker 1: and our Trump and she gonna be able to successfully
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  Speaker 1: navigate the um you know, the trade and teriff situation. Yea.
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  Speaker 1: So just wait for those politicians do come together and
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  Speaker 1: and then that'll be the time. Merry Christmas, Merry Christmas.
• 8:09
  Speaker 1: Would love your Christmas time Fill Orlando. What a suspenders
• 8:14
  Speaker 1: that are so good? Orlando, chief faculty markets strategist at
• 8:16
  Speaker 1: Federated Investors, full on with the holiday gear. General Maddis,
• 8:35
  Speaker 1: who has long been thought to be the ballast in
• 8:38
  Speaker 1: the current White House administration, is set to retire. He
• 8:42
  Speaker 1: released a memo explaining why it was rather scathing. Did
• 8:46
  Speaker 1: not mention President Trump by name once joining us now
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  Speaker 1: here in our Bloomberg Interactive Broker Studios is Clint Watt's
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  Speaker 1: Distinguished Research Fellow for Foreign Policy Research Institute, also a
• 8:58
  Speaker 1: Senior Fellow at the Center for Cyber and Home and
• 9:00
  Speaker 1: Security at the George Washington University. Former formerly an FBI
• 9:04
  Speaker 1: Special Agent on a Joint Terrorism Task Force, served in
• 9:08
  Speaker 1: the Army. He's joining me and Paul Sweeney, who is
• 9:12
  Speaker 1: filling in for Pim Fox. Clint, what do you make
• 9:14
  Speaker 1: of General Madis's resignation. It's frightening, I think for just
• 9:20
  Speaker 1: about anybody, Republican or Democrat, all the way up until now,
• 9:23
  Speaker 1: there was some sort of comfort in knowing that General
• 9:26
  Speaker 1: Madis was there. Very experienced, level headed executive can seem
• 9:33
  Speaker 1: to communicate with President Trump and the rest of the
• 9:38
  Speaker 1: executive branch. He's good in terms of building relationships. He's
• 9:42
  Speaker 1: got strong bipartisan support even on the Hill. And yet
• 9:46
  Speaker 1: he leaves in a very precipitous way at a time
• 9:50
  Speaker 1: where we've got a lot of foreign policy chaos, whether
• 9:52
  Speaker 1: you look across the board, Russia, China, ran Syria with
• 9:58
  Speaker 1: this rapid pull out, the creation of a space force,
• 10:01
  Speaker 1: which kind of came out of nowhere. Just every day
• 10:04
  Speaker 1: there seems to be a major foreign policy shift or move.
• 10:08
  Speaker 1: Yesterday was withdrawing soldiers from Afghanistan after we were just
• 10:11
  Speaker 1: talking about, you know, staying there in the fight. And
• 10:14
  Speaker 1: so it's hard for people in the executive branch, in
• 10:17
  Speaker 1: the defensive department, I think, to execute any sort of
• 10:21
  Speaker 1: a plan because it changes on the web based on
• 10:23
  Speaker 1: a phone call or an impromptu meeting the president might have.
• 10:27
  Speaker 1: And so I think that resignation letter uh sends a
• 10:30
  Speaker 1: shock to to the rest of the executive branch and
• 10:34
  Speaker 1: and to the legislative branches that we are in a
• 10:37
  Speaker 1: very troublesome space right now. So Clint tell us in
• 10:40
  Speaker 1: your mind, how correlated was the resignation of General Mattis
• 10:45
  Speaker 1: to Trump's announcement about pulling out of Syria, And related
• 10:49
  Speaker 1: to that is is isis defeated, as the President claims,
• 10:52
  Speaker 1: that would be news to a lot of people. I believe. Yeah.
• 10:55
  Speaker 1: I'll start with the second one, which isis is not defeated.
• 10:59
  Speaker 1: In President Trump has been so negative about President Obama
• 11:03
  Speaker 1: Is handling where he said that essentially al Qaeda had
• 11:06
  Speaker 1: been defeated. That was going back into the last administration,
• 11:09
  Speaker 1: which seemed very foolish as ISIS sort of rose out
• 11:11
  Speaker 1: of the ashes of al Qaeda, out of nowhere and
• 11:14
  Speaker 1: became such a more powerful threat, and we're seeing President
• 11:17
  Speaker 1: Trump followed that same pattern. It's really crazy. There's a
• 11:20
  Speaker 1: lot of detainees there, the Kurds to actually have a
• 11:23
  Speaker 1: lot of ISIS detainees. And this really goes to I
• 11:26
  Speaker 1: think the Secretary Maddis decision, which is pulling out a
• 11:29
  Speaker 1: Syria precipitously like that may have been a good strategy
• 11:33
  Speaker 1: over a year or two, but you want to have
• 11:36
  Speaker 1: a plan in place to do that, because otherwise you're
• 11:39
  Speaker 1: releasing IIS back onto the battlefield. You're empowering a run
• 11:42
  Speaker 1: of Russia, two of our you know, biggest adversaries at
• 11:45
  Speaker 1: the moment, and we're not really getting anything in return.
• 11:49
  Speaker 1: And by the way, we're also turning our back on
• 11:51
  Speaker 1: allies that have gone and done the fighting for US.
• 11:54
  Speaker 1: Part of the Syria strategy to counter ISIS was to
• 11:58
  Speaker 1: have a limited US footprint on the ground. We didn't
• 12:00
  Speaker 1: want to send soldiers back into a rocket Syria. We
• 12:03
  Speaker 1: we wanted to do it with just a series of
• 12:05
  Speaker 1: special Forces operations and air power and we did took
• 12:08
  Speaker 1: a little bit longer than everybody wanted. But other people
• 12:11
  Speaker 1: did the fighting on the ground force, the Rocky military,
• 12:14
  Speaker 1: the Kurds, uh Syrian militias that we started to train,
• 12:17
  Speaker 1: and we have just turned our backs on all of them. Uh.
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  Speaker 1: And I just really wonder that you know, how we
• 12:24
  Speaker 1: move forward if anything ever pops up that we want
• 12:26
  Speaker 1: to do. Who would stand with us after we've just
• 12:28
  Speaker 1: walked away from them? Well, but that's where I wanted
• 12:30
  Speaker 1: to go with this, Clint, how permanent is a damage
• 12:32
  Speaker 1: in your mind to the relationship of the U. S
• 12:35
  Speaker 1: has with its allies. Our allies don't understand what our
• 12:40
  Speaker 1: foreign policy is, and it sounds like sective madness doesn't
• 12:44
  Speaker 1: understand it either. You know. In the letter he sort
• 12:47
  Speaker 1: of said, you deserve a Secretary of Defense that you
• 12:51
  Speaker 1: know supports and works towards your views. But I don't
• 12:54
  Speaker 1: think anyone really knows what that is. And so if
• 12:56
  Speaker 1: you're an ally, you continue to look at the US
• 12:59
  Speaker 1: and say, what are you about? What are you pursuing?
• 13:03
  Speaker 1: You know what our interest? Because it pivots back and forth.
• 13:07
  Speaker 1: Let's take a Afghanistan. We've seen President Trump take General
• 13:10
  Speaker 1: McMaster's sort of strategy a year ago and implement, you know,
• 13:14
  Speaker 1: say we're going to do this. Now he's already backtracking
• 13:17
  Speaker 1: from it. So what does that tell people on the
• 13:19
  Speaker 1: ground there? Look at Isis and Syria. You know, we
• 13:22
  Speaker 1: said we'll do one thing, then we do another. North Korea.
• 13:25
  Speaker 1: We're going to denuclearise North creates as we want. You know,
• 13:28
  Speaker 1: every one of these foreign policy matches that we've gone
• 13:31
  Speaker 1: up against uh Vladimir Putin in Helsinki, we've come out
• 13:34
  Speaker 1: the other side with no real understanding of what we've gained.
• 13:38
  Speaker 1: What is America First Defense our strategy? But what do
• 13:41
  Speaker 1: we want to achieve? What we've done is alienate literally
• 13:44
  Speaker 1: all of our allies to where the strength of US
• 13:47
  Speaker 1: as a country over the past five six decades have
• 13:50
  Speaker 1: been we've been able to leverage the entire world against
• 13:53
  Speaker 1: whatever evil that might arise. I don't think we can
• 13:56
  Speaker 1: do that going forward, and I don't think any ally
• 13:58
  Speaker 1: would want to engage with us in a sustained way
• 14:01
  Speaker 1: when they can't know if we're really going to be
• 14:03
  Speaker 1: in it for the long haul or what we actually
• 14:04
  Speaker 1: believe in Clint, I just want to challenge you a
• 14:08
  Speaker 1: little bit because a lot of people have been saying
• 14:10
  Speaker 1: that the U s should not be fighting in the
• 14:11
  Speaker 1: war in Syria and that the Afghanistan UH mission has
• 14:15
  Speaker 1: been badly handled, with deaths that really shouldn't be happening.
• 14:19
  Speaker 1: So isn't isn't Trump right on that part. The part
• 14:23
  Speaker 1: with Syria which is fascinating is the Obama administration took
• 14:27
  Speaker 1: a very limited stands. They would not put US soldiers
• 14:30
  Speaker 1: into Syria, if you remember, for that exact name reason.
• 14:32
  Speaker 1: We don't want to be there permanently trying to solve
• 14:34
  Speaker 1: serious problems. President Trump's one of his first actions of
• 14:38
  Speaker 1: his administration was to send US soldiers and four straight
• 14:41
  Speaker 1: into Syria and into that combat zone. He actually took
• 14:45
  Speaker 1: the reverse of that. So if if the strategy is
• 14:48
  Speaker 1: to just deal with ISIS and also not get stuck
• 14:51
  Speaker 1: in this quagmire, you have to do that in a
• 14:52
  Speaker 1: very deliberate way. I think that's what the issue is
• 14:55
  Speaker 1: with the Syria debate. People don't doubt that Iran and
• 14:58
  Speaker 1: Russia we are mostly going to get their way over
• 14:59
  Speaker 1: the long term. But what do we want in that fight?
• 15:02
  Speaker 1: Because right now, Russia and Iran and anyone else, if
• 15:06
  Speaker 1: they don't take care of that ISIS fight. We'll have
• 15:07
  Speaker 1: what we had in foreign fighters showing up around the world,
• 15:12
  Speaker 1: terrorists checks and our strategy has always been fight them there,
• 15:15
  Speaker 1: rather them fight them here. This goes to Afghanistan as well,
• 15:18
  Speaker 1: So to make that bridge, the Afghan war has needed
• 15:21
  Speaker 1: to wind down for a long long time. But the
• 15:24
  Speaker 1: thing is that it's Hotel California. You you can check in,
• 15:28
  Speaker 1: but you can never leave. That's the problem in these
• 15:30
  Speaker 1: counter terrorism fights is anytime we put ourselves in a
• 15:34
  Speaker 1: footprint like that, we're going to have to be there
• 15:36
  Speaker 1: or have a proxy or an ally or a surrogate
• 15:40
  Speaker 1: someone help us keep that counter terrorism security mission going forever.
• 15:45
  Speaker 1: And we don't have that plan hammered out in Afghanistan
• 15:48
  Speaker 1: right now, So we don't have that that raises the
• 15:50
  Speaker 1: risk of anything happening on our soil. Yes, over time,
• 15:56
  Speaker 1: I mean it won't happen instantaneously. These networks, you know,
• 15:59
  Speaker 1: they tend to rise, they evolve, and they show up
• 16:02
  Speaker 1: in other places and in other ways. I mean, we
• 16:04
  Speaker 1: saw an attack in Morocco just this week where two
• 16:07
  Speaker 1: women were brutally murdered by four ISIS supporters, which hasn't
• 16:12
  Speaker 1: happened quite some time, and so what will tend to
• 16:15
  Speaker 1: happen is they will coalesce in a different way. I
• 16:18
  Speaker 1: think another big challenge that we've got that we haven't
• 16:20
  Speaker 1: thought through is state sponsored terrorism using these proxies, using
• 16:24
  Speaker 1: these former foreign fighters around the world against the United
• 16:28
  Speaker 1: States or Western interest shars me to death. Right now,
• 16:31
  Speaker 1: we're unfortunately, we're gonna have to leave it there. A
• 16:33
  Speaker 1: lot to talk about. We'll have to have you back
• 16:34
  Speaker 1: on happy holidays, a lot to think about this year.
• 16:37
  Speaker 1: Clint Watt's Distinguished Research Fellow at the Foreign Policy Research Institute,
• 16:41
  Speaker 1: also a former FBI Special Agent in the counter Terrorism
• 16:44
  Speaker 1: Unit One as a class that has been absolutely pummeled.
• 17:04
  Speaker 1: Paul has been bitcoin at least this year, and joining
• 17:08
  Speaker 1: us now is somebody who is a believer in the
• 17:10
  Speaker 1: blockchain technology, a believer, believer in crypto assets and has
• 17:14
  Speaker 1: a lot of money invested in the securities. Daniel Masters,
• 17:17
  Speaker 1: chairman of coin Shares Group, joining us now from London. Danny,
• 17:21
  Speaker 1: thank you so much for being with us. I thought
• 17:22
  Speaker 1: it was really interesting a move that Switzerland made. It
• 17:26
  Speaker 1: seems to give some edification to the Christian crypto acid world. Yes, him,
• 17:34
  Speaker 1: nice to be with you again. It's been a very
• 17:37
  Speaker 1: very interesting see days in crypto following what's been obviously
• 17:41
  Speaker 1: a terrible year. Now, Switzerland might not be the most
• 17:45
  Speaker 1: prominent nation from the US perspective, but it is the
• 17:47
  Speaker 1: eighteenth largest economy in the world, bigger than Belgium and Argentina.
• 17:52
  Speaker 1: The Swiss Federal Council just issue that framework entitled the
• 17:56
  Speaker 1: Legal Framework for Districted Lleged Technology and Blockchain UM and
• 18:00
  Speaker 1: it's been issued by the Swiss Federal Council, the most
• 18:04
  Speaker 1: senior office in that Swiss nature nation. This for Switzerland,
• 18:09
  Speaker 1: in my opinion, is a new crypto constitution. It is
• 18:13
  Speaker 1: a global precedent, and it reminds me a lot of
• 18:18
  Speaker 1: the US Jobs Act. So, Daniel, I guess when I
• 18:22
  Speaker 1: read that about Switzerland, even though it is a relatively
• 18:26
  Speaker 1: smaller economy from a banking perspective, it's been a global
• 18:30
  Speaker 1: leader forever. So I kind of viewed it maybe as
• 18:33
  Speaker 1: a validation, if you will, of the blockchain technology and cryptocurrencies,
• 18:37
  Speaker 1: you know, giving the leadership position that Switzerland's kind of
• 18:40
  Speaker 1: always had in financial services. You're correct, they are, indeed,
• 18:46
  Speaker 1: who have been for many decades leaders in financial services
• 18:50
  Speaker 1: that makes this report that much more credible. The report
• 18:54
  Speaker 1: itself is very substantial, colors a hundred and sixty two pages,
• 18:59
  Speaker 1: over eight hund legal cross references, and what really drew
• 19:02
  Speaker 1: our attention to it was that on my professional network
• 19:08
  Speaker 1: this was viewed by over three hundred and seventy five
• 19:11
  Speaker 1: thousand people that happened to correspond with the rally in
• 19:17
  Speaker 1: crypto measured for example, in bitcoin between life than two
• 19:20
  Speaker 1: hundred dollars and four thousand dollars. So I think this
• 19:24
  Speaker 1: is a meaningful development. Um. Yeah, So, Danny Um, your
• 19:29
  Speaker 1: coin shares has combined one billion dollars of assets under
• 19:33
  Speaker 1: management focused on cryptocurrencies and their crypto assets. And I'm
• 19:36
  Speaker 1: just wondering what are you expecting next year? I mean,
• 19:39
  Speaker 1: are we gonna be talking more about bitcoin as a
• 19:41
  Speaker 1: viable long term asset class next year? And will it
• 19:45
  Speaker 1: rally or is it going to be another difficult period
• 19:47
  Speaker 1: for for it? Well, you know, I think this, this
• 19:52
  Speaker 1: report is actually possibly a catalyst for some interesting developments
• 19:58
  Speaker 1: seen Cryptova were driven by non institutional investors. This current
• 20:03
  Speaker 1: year end rally we're seeing in per our inflows and
• 20:07
  Speaker 1: per information from our peers is institutionally driven. This is
• 20:12
  Speaker 1: supported by the Swiss government stance because it's a sort
• 20:15
  Speaker 1: of encouragement the institutional investment committees can buy into. In
• 20:20
  Speaker 1: terms of the likely shape of the rally that we
• 20:24
  Speaker 1: may see next year, I think it will be much
• 20:26
  Speaker 1: narrower than we saw in the past. The proliferation of tokens,
• 20:31
  Speaker 1: many of which will fail, but from that wreckage, similar
• 20:36
  Speaker 1: to what happened after the Mastack rash in two thousand one,
• 20:40
  Speaker 1: I think we're going to see a narrow band of
• 20:42
  Speaker 1: some protocol coins and some asset coins that are going
• 20:45
  Speaker 1: to do quite well. Daniel, what else would the crypto
• 20:49
  Speaker 1: market broadley define like to see too? I guess further
• 20:53
  Speaker 1: validate the technology and the potential use cases. Um, you
• 20:56
  Speaker 1: know Switzerland, maybe one of those mile post What else
• 21:01
  Speaker 1: do you think the market is really looking forward to
• 21:03
  Speaker 1: provide some support for this technology discurrency? Yeah, you're right.
• 21:08
  Speaker 1: I think that the the evolutionary big bang that we
• 21:13
  Speaker 1: saw in crypto over the last few years has been
• 21:15
  Speaker 1: largely aspirational. The technology companies that were directly involved with
• 21:21
  Speaker 1: are developing really interesting technology. It has been slow to
• 21:25
  Speaker 1: come to the market, and that's what the market needs
• 21:27
  Speaker 1: to see now. The head winds that these kind of
• 21:29
  Speaker 1: technology companies actually face is being addressed by some of
• 21:33
  Speaker 1: these Swiss government measures, so just quickly. Money laundering and
• 21:37
  Speaker 1: terrorist financing is always a concern. The Swiss have taken
• 21:41
  Speaker 1: this an account, recognized its importance and said in their
• 21:44
  Speaker 1: studies and tech detection, so far it's not been a
• 21:47
  Speaker 1: big issue, so they're going to keep a watching lie
• 21:50
  Speaker 1: but allow a more fluid environment. Banking has been a
• 21:54
  Speaker 1: headwind for these companies. This document actually talks about Swissland's
• 22:00
  Speaker 1: should get this Swiss Bankers Association to buy into this initiative,
• 22:04
  Speaker 1: and cleverly the way that the Swiss are looking at
• 22:07
  Speaker 1: securities and physical assets which are usually represented in a
• 22:12
  Speaker 1: in a de materialized form like trading rights for securities
• 22:16
  Speaker 1: or depository seats for commodity, and they're looking at those
• 22:19
  Speaker 1: instruments to be digitized. Thank you so much for being
• 22:21
  Speaker 1: with us, Jenny Masters, chairman of Chairman of Coin Shares
• 22:24
  Speaker 1: Group in London. Right now we're going to turn our
• 22:45
  Speaker 1: focus to healthcare. We've seen healthcare shares getting beaten up
• 22:49
  Speaker 1: pretty badly as a result of this Texas judge basically
• 22:52
  Speaker 1: overturning Obamacare, joining us now to talk about that and
• 22:56
  Speaker 1: whatever else is facing the healthcare industry. Heading into Susan
• 22:59
  Speaker 1: of Or, chief executive officer of Premier based in Charlotte,
• 23:03
  Speaker 1: but here with us today in our eleven three our studios. So, Susan,
• 23:06
  Speaker 1: what did you make of this court ruling and how
• 23:08
  Speaker 1: much does it make your life more difficult? You know,
• 23:10
  Speaker 1: I think the court ruling is a short term headline.
• 23:13
  Speaker 1: It'll go through the process. There have been multiple attempts
• 23:16
  Speaker 1: to repeal, replace, or do something with oback Obamacare. The
• 23:19
  Speaker 1: truth is you got seventeen million people who have access now.
• 23:22
  Speaker 1: And I think the regulators are going to continue to
• 23:24
  Speaker 1: implement initiatives that really try to solve the core problems,
• 23:27
  Speaker 1: which are the cost of healthcare, the quality and the
• 23:29
  Speaker 1: outcomes of healthcare. And so I think I think this
• 23:32
  Speaker 1: will just be a background theme while the rest of
• 23:37
  Speaker 1: the regulators move forward. And what do you expect and
• 23:40
  Speaker 1: what do you expect the rest of those regulators to do?
• 23:42
  Speaker 1: What's the I guess the theme for nineteen in terms
• 23:45
  Speaker 1: of a regulatory perspective, because when I think about healthcare,
• 23:48
  Speaker 1: it always starts and ends with the regulatory framework. Yes,
• 23:52
  Speaker 1: there are a couple of themes. The first one is
• 23:54
  Speaker 1: they want to move all hospitals and doctors to being
• 23:57
  Speaker 1: paid based on a bonus or penalty system based on
• 24:01
  Speaker 1: their outcomes, based on their costs, based on their complication rates.
• 24:04
  Speaker 1: That will continue in full force. I think they're also
• 24:08
  Speaker 1: very focused on drug pricing. There are several initiatives that
• 24:10
  Speaker 1: are underway around redesigning the way drug pricing happens um.
• 24:16
  Speaker 1: I actually think not only in the public sector, but
• 24:19
  Speaker 1: the private sector is very active. Employers are getting a
• 24:22
  Speaker 1: lot more engaged in going directly to provider networks like
• 24:26
  Speaker 1: a Premiere, where you have a large national footprint of
• 24:29
  Speaker 1: providers and they're not satisfied with the value that insurance
• 24:33
  Speaker 1: companies have been able to bring in truly changing the
• 24:36
  Speaker 1: outcomes in healthcare. How do you lower the costs and
• 24:39
  Speaker 1: improve outcomes? What do you do? So it's complicated, right,
• 24:42
  Speaker 1: we all know it's complicated now in healthcare, you have
• 24:45
  Speaker 1: to have data, you have to have transparency, you have
• 24:49
  Speaker 1: to have aggregation ability. So what Premiere does is actually
• 24:52
  Speaker 1: aggregate their buying power, aggregate the data, find the root
• 24:55
  Speaker 1: cause problems, measure it transparently reported. And I think the
• 25:00
  Speaker 1: federal government, state government and insurance companies need to pay
• 25:04
  Speaker 1: based on that performance. One thing that I find interesting
• 25:06
  Speaker 1: is we're hearing more about artificial intelligence and how it
• 25:09
  Speaker 1: can be used in healthcare, and I'm wondering, when you
• 25:11
  Speaker 1: talk about data, are you using either artificial intelligence programs
• 25:15
  Speaker 1: to try to understand and predict outcomes better or move
• 25:18
  Speaker 1: it forward? And also are you are you see any
• 25:20
  Speaker 1: of the providers using things like chips that can help
• 25:23
  Speaker 1: people measure themselves and things like that. So absolutely, and
• 25:26
  Speaker 1: we think it's a theme that will continue into two
• 25:28
  Speaker 1: thousand nineteen. All the disruption around technology, the challenges. Everybody
• 25:33
  Speaker 1: now has lots of big data. The challenges how do
• 25:36
  Speaker 1: you turn that big data into small data so that
• 25:39
  Speaker 1: when you're at the doctor and that doctor is interacting
• 25:42
  Speaker 1: with you, he can be or she can be alerted
• 25:45
  Speaker 1: to change the decisions that are being made based on quality,
• 25:49
  Speaker 1: based on safety, based on a new clinical trial. We
• 25:52
  Speaker 1: Premier have just acquired a company called Stance and Health
• 25:55
  Speaker 1: that helps physicians in real time, in the moment, change
• 25:59
  Speaker 1: the way cares being delivered. And that's what we all
• 26:01
  Speaker 1: have to get to. But at the at the hospital
• 26:05
  Speaker 1: um experience, what are some of the trends there that
• 26:08
  Speaker 1: can improve that lower the cost, make it more efficient. Um,
• 26:12
  Speaker 1: because it seems like, um, you know that the hospital
• 26:15
  Speaker 1: experience is one that that needs to change as well. Yeah,
• 26:18
  Speaker 1: so the hospital experience and the doctor experience, I think
• 26:21
  Speaker 1: both need to change. One. They need data at their
• 26:25
  Speaker 1: fingertips as opposed to these systems that couldn't be connected.
• 26:28
  Speaker 1: You know, it's kind of like somebody has an Xbox,
• 26:30
  Speaker 1: somebody as a PlayStation, they can't play the same game
• 26:32
  Speaker 1: because they're not on the same system. So with cloud
• 26:34
  Speaker 1: based computing and all the technology and artificial intelligence, you
• 26:38
  Speaker 1: have much more ability to get that data to the patient,
• 26:42
  Speaker 1: to the doctor, to the hospital to improve what they're
• 26:45
  Speaker 1: doing in real time. What's for that? The for profit hospitals,
• 26:49
  Speaker 1: how what are the business trends bidden for them over
• 26:51
  Speaker 1: the last several years and how do you expect that
• 26:53
  Speaker 1: to play out over the next couple of years. You know,
• 26:55
  Speaker 1: the for profit hospitals compete in many of the same
• 26:58
  Speaker 1: markets as not for profit hospitals. They all have the
• 27:00
  Speaker 1: same problems, which is costs are growing too fast, they
• 27:04
  Speaker 1: have they have bad debt charity care. Maybe the for
• 27:06
  Speaker 1: profits have some less of that than the not for profits.
• 27:10
  Speaker 1: They're trying to integrate the data, they're trying to adjust
• 27:13
  Speaker 1: to these risk based payment models. They're trying to improve
• 27:17
  Speaker 1: quality and safety, a lot of the same issues. Actually,
• 27:20
  Speaker 1: But if we could really implement some of what you're
• 27:22
  Speaker 1: talking about, these sort of monitoring devices and computer programs
• 27:27
  Speaker 1: that could aggregate and have predictive power, how many hospitals
• 27:30
  Speaker 1: would go away? I mean how many? How many of
• 27:32
  Speaker 1: the current how much of the current infrastructure that we
• 27:34
  Speaker 1: have our healthcare which we rendered obsolete. So there are
• 27:38
  Speaker 1: some estimates that there is thirty percent ways still in
• 27:41
  Speaker 1: the health care system, meaning overuse, duplication, all of that.
• 27:45
  Speaker 1: You complicate that by all these other technologies and capabilities, right,
• 27:50
  Speaker 1: and and then you complicated by the demographics of the
• 27:52
  Speaker 1: population because twelve thousand people are entering Medicare every single day.
• 27:56
  Speaker 1: We're living with chronic conditions longer. Healthcare systems aren't hospitals
• 28:02
  Speaker 1: anymore by themselves. They're actually integrated systems of doctors offices
• 28:06
  Speaker 1: and surgery centers and retail pharmacies and hospitals and nursing homes.
• 28:10
  Speaker 1: And I don't think the need for that that system
• 28:15
  Speaker 1: goes away. I actually think As we live longer with
• 28:17
  Speaker 1: chronic conditions, it increases. I think that the high cost settings,
• 28:23
  Speaker 1: we may need fewer of those, and we may need
• 28:26
  Speaker 1: to spend a lot more time and money preventing and
• 28:29
  Speaker 1: dealing with chronic conditions in different ways. Susan Davore, thank
• 28:33
  Speaker 1: you so much for being with us. Happy holidays to you.
• 28:36
  Speaker 1: Thank you YouTube. Susan Diavore is chief executive of Premiere.
• 28:40
  Speaker 1: Coming to us here in our eleven three oh studios.
• 28:45
  Speaker 1: Thanks for listening to the Bloomberg p m L podcast.
• 28:48
  Speaker 1: You can subscribe and listen to interviews at Apple Podcasts, SoundCloud,
• 28:52
  Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm
• 28:56
  Speaker 1: on Twitter at pim Fox. I'm on Twitter at Lisa Abram.
• 29:00
  Speaker 1: It's one before the podcast. You can always catch us
• 29:02
  Speaker 1: worldwide on Bloomberg Radio.