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Gold Reasserts Lead Over Bitcoin as Top Hedge · Bloomberg Intelligence

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  Speaker 2: Bitcoin it gets your attention, folks. It is down another
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  Speaker 2: one point eight percent today, eighty six thousand dollars. The
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  Speaker 2: high just you know a month, month and a half
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  Speaker 2: ago is one hundred and twenty five thousand, so we
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  Speaker 2: got a north of a thirty percent drawdown in bigcoin.
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  Speaker 2: It's a commodity to me. I don't know more sellers
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  Speaker 2: and buyers. Let's chicka with Mike mcloughan. He covers this
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  Speaker 2: stuff because he's a commodity strategist for Bloomberg Intelligence.
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  Speaker 3: Mike, you've seen.
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  Speaker 2: Commodities trade up and down for decades. Here put this
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  Speaker 2: bitcoin moving context for us.
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  Speaker 4: Well, Paul, I like the way you started. It's a
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  Speaker 4: commodity to you, and I used to think that too.
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  Speaker 5: Now to me actually less of a commodity because in
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  Speaker 5: all commodities you have an underlying the basis, and you
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  Speaker 5: have supply and demand fundamentals and Bitcoin there's millions of
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  Speaker 5: competitors and there's no underlying to it, So I'm worried
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  Speaker 5: and doesn't have a practical value other than to trade
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  Speaker 5: and hold value at least gold.
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  Speaker 4: This looks pretty and things.
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  Speaker 5: So I'm afraid what's happening in bitcoins are seeing that
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  Speaker 5: overdue purge and those millions of cryptocurrencies that track nothing,
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  Speaker 5: it's pulling out Bitcoin. They're probably going to have to
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  Speaker 5: head towards zero. And the key question is what do
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  Speaker 5: we do for the end of the year. Can we
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  Speaker 5: recover from these levels? And I think it's unlikely we do,
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  Speaker 5: which means the whole system might be coming down into
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  Speaker 5: maybe a grinch is going to win Christmas.
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  Speaker 6: Wow, that's quite a call. Yeah, the whole system coming down.
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  Speaker 7: I mean, for now people are saying that there's we're
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  Speaker 7: shaping up to be the worst November for bitcoin since
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  Speaker 7: twenty twenty two, which was around the time that saying
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  Speaker 7: Bankmin Freed and his company, you know, basically fell apart.
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  Speaker 7: Talk a little bit about the Bitcoin ETFs and how
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  Speaker 7: demand and inflows into those probus drove a lot of
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  Speaker 7: the rally in spot baitcoin overall, and perhaps are removing
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  Speaker 7: a big source of support right now.
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  Speaker 5: Well, I'm glad you went there, Scarlett, because my primary
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  Speaker 5: goal the last few years one Bloomberg we launched a
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  Speaker 5: Bloomberg Galaxy crypto index. Idea was eventually for the whole
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  Speaker 5: space to be tracked by widely by ETFs, including that index,
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  Speaker 5: and once we got there, I figured and put in
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  Speaker 5: a plateau. Now we've gotten there, and I think it's plateau.
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  Speaker 5: So basically we've gone from the geeks and the insiders
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  Speaker 5: who made a lot of money pushing it over to
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  Speaker 5: retail and the big picture people want to catch up
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  Speaker 5: and chase the performance, and they're finding out it's poor
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  Speaker 5: performance near a peak.
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  Speaker 4: They're piling on.
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  Speaker 5: The biggest ETFs. Ever, it's classic peak bubble. So if
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  Speaker 5: you want a bubble in all markets, it starts with cryptos.
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  Speaker 5: Maybe not equities, but it's as bad as it was
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  Speaker 5: for dot com bubble in nineteen ninety nine.
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  Speaker 4: Now the whole thing's going back downward, and by the
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  Speaker 4: end of the year should it recover.
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  Speaker 5: I look at it as we need to just purge
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  Speaker 5: millions of these things that track nothing, that are worth
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  Speaker 5: billions of dollars. One good example is number nine on
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  Speaker 5: the Bitcoin cryp pages. Dosee coin, it's worth twenty one
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  Speaker 5: billion dollars, attracts nothing.
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  Speaker 4: It was launch as a joke.
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  Speaker 8: Wow.
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  Speaker 2: So we had Eric baoutchunasan just earlier and he said
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  Speaker 2: most of the ETF buyers are still in it. They
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  Speaker 2: haven't sold about five or six percent of sold or
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  Speaker 2: seen outflows.
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  Speaker 3: Out of the ETF.
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  Speaker 2: So the ETF flows are kind of hanging in there
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  Speaker 2: at this point.
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  Speaker 3: So off to see, do we.
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  Speaker 6: Know who is selling?
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  Speaker 5: Mike, Yeah, well, certainly some of the OG's people have
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  Speaker 5: been along in for a long time. Once they heard
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  Speaker 5: that Trump was so involved, they wanted to get out.
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  Speaker 5: But Eric has on been on top of this. He
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  Speaker 5: nailed it very beginning with the launching the ETF. The
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  Speaker 5: problem is, I hear the average price for all ETFs,
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  Speaker 5: and since they've been launched for bitcoins around eighty nine thousand,
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  Speaker 5: we're below that.
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  Speaker 4: So we're getting below there.
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  Speaker 5: And also they've got double the vow till they what
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  Speaker 5: they left they left the stock market, they get better.
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  Speaker 4: Performance, they're getting worse. This is classic peak stuff. Paul.
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  Speaker 5: I'm worried that it's just gonna I'm worried about that
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  Speaker 5: Grinch effecting to the end of the year when everybody expects, oh,
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  Speaker 5: Santa Claus is gonna come, but Grinch takes all Grinch
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  Speaker 5: shows up.
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  Speaker 7: Okay, Mike, But the president and his family are very
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  Speaker 7: much invested in bitcoin, in the crypto industry at large.
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  Speaker 6: Is there not a Trump put here?
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  Speaker 4: Well, that's the key thing. What are they going to
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  Speaker 4: do to make a difference.
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  Speaker 5: Strategic Bitcoin Reserve though that was floated last year didn't
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  Speaker 5: work out. We have the President's sun coined for it
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  Speaker 5: to go much higher, and the future we might have
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  Speaker 5: laws against those kind of things because there's a vested interest.
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  Speaker 5: I don't know how it's going to work out, but
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  Speaker 5: it was that Fostian bargain. I'm worried about that just
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  Speaker 5: in bloting now. And the key question is what stops it?
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  Speaker 4: What are they going to do to make it change?
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  Speaker 5: The bottom line is there's so many millions of these
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  Speaker 5: things that are just pine and sky speculative digital assets.
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  Speaker 4: They just need to purge and then we'll go back.
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  Speaker 5: And I'm afraid that means Bitcoin's first stop on this
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  Speaker 5: move is really towards fifty thousand. It's got to really
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  Speaker 5: end the year up on the year to show anything
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  Speaker 5: other than that, I'm afraid fifty thousand to the next
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  Speaker 5: key level, which means Domino's tumble, and the questions what
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  Speaker 5: can they do to make a difference, Maybe get the
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  Speaker 5: Fed the ease, which means more inflation, which means they're
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  Speaker 5: not going to get elected.
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  Speaker 7: Right, Well, all of that, the macro headwinds are the
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  Speaker 7: same as any other acid classic.
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  Speaker 6: Yes, in many ways.
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  Speaker 7: Mike mcgloan and Bloomberg Intelligence senior commodity strategists joining us
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  Speaker 7: on bitcoin.
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  Speaker 3: Stay with us.
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  Speaker 6: More from Bloomberg Intelligence coming.
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  Speaker 3: Up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
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  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
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  Speaker 1: you get your podcasts, or watch us live on YouTube.
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  Speaker 2: Let's talk to Sam Fazzelli because it's Monday, and that's
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  Speaker 2: what we do. We talk healthcare, and you want to
• 5:32
  Speaker 2: talk healthcare. Talk to Sam Fazzelli. He's over there in London.
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  Speaker 2: I think I haven't checked at these badge I mean,
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  Speaker 2: who the heck knows what these people over there in London.
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  Speaker 2: But he's the best there is out there folks on
• 5:42
  Speaker 2: global healthcare and we appreciate getting a few minutes of
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  Speaker 2: his time. Sim this obesity story is become the story
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  Speaker 2: for your world. I mean, it's almost like forget about
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  Speaker 2: some of these other issues you guys have been dealing with,
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  Speaker 2: what you know, other diseases and therapeutics and so on.
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  Speaker 2: It's all about obesie drugs. Talks about Novo Nordis start
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  Speaker 2: taking on engineer.
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  Speaker 9: Yeah, hi Paul, and just for the actuality, I'm in
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  Speaker 9: France at the minute, see told, but only another twelve
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  Speaker 9: hours now. Today's news from NOMA. Notice is not about OBCD.
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  Speaker 9: It's about a drug semaglutide in a pill form that
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  Speaker 9: they've tested in Alzheimer's disease. And the theory was, and
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  Speaker 9: there was some evidence that people who were taking the
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  Speaker 9: very first version of the GLP one brug so victosa
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  Speaker 9: or liro glue tide, they had a lower risk of
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  Speaker 9: developing Alzheimer's when you looked at historic or rect prospective
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  Speaker 9: data and there's animal models, et cetera. So they thought,
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  Speaker 9: but it's worth a trial and it didn't work out.
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  Speaker 9: They said that they're seeing some impacts in some biomarkers
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  Speaker 9: et cetera. And we'll find out next week what biomarkers.
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  Speaker 9: But the trial didn't work out. And the question here
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  Speaker 9: is was the theory wrong?
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  Speaker 8: Oh?
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  Speaker 9: Is the drug not good enough? Is it pill enough?
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  Speaker 9: We know the pill doesn't do as well in obesity
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  Speaker 9: as the injection. Should they have tested the injection?
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  Speaker 6: That's a good question.
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  Speaker 7: And you mentioned that the ingredient here that we're paying
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  Speaker 7: attention to is some maglitude, which I hope I'm pronouncing
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  Speaker 7: correctly there. Does that mean that this ingredient and Alzheimer's
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  Speaker 7: are just a no go from here on out? Or
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  Speaker 7: does there need to be more testing before we can
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  Speaker 7: determine that?
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  Speaker 9: Yeah, there needs to be more testing, But who's going
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  Speaker 9: to do that? I mean, having failed, now, who's going
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  Speaker 9: to put the money into test it?
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  Speaker 8: Now?
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  Speaker 9: Lily does have an Alzheimer's business in a completely different
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  Speaker 9: with different set of drugs, and they have a more
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  Speaker 9: punchy product once weekly with a relatively easily administered pen.
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  Speaker 9: That would be interested to see whether that.
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  Speaker 10: Helps and you know, so that you get more much
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  Speaker 10: more drug in the body, or maybe redesign it a bit.
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  Speaker 10: So it really does depend on how much appetite for
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  Speaker 10: risk these companies have and literally now with the just
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  Speaker 10: literally just over trillion dollar market cap, maybe they should
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  Speaker 10: give it a go. You know, it would be magic
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  Speaker 10: if this thing, It literally would be magic if this thing.
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  Speaker 9: Just helped so many different diseases.
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  Speaker 2: Same talk to us about just the market for dementia.
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  Speaker 2: Alzheimer's is one one part of it. I would think
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  Speaker 2: that's a it's a big market and be it. It's
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  Speaker 2: got to be a growing market with people living longer.
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  Speaker 2: How do you guys think about it and how do
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  Speaker 2: you play it?
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  Speaker 11: If you're an investor, Yeah, it's it's It is a
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  Speaker 11: significant societal issue number one. And you know, I think
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  Speaker 11: there are many, not many families who would say that
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  Speaker 11: they haven't experienced it. They have all the people in
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  Speaker 11: their in their extended family. So the market has humongous potential.
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  Speaker 11: But you need drugs that actually treat the disease. Remember,
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  Speaker 11: by the time you have Alzheimer's, I.
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  Speaker 9: Eat a full blown dementia of the Alzheimer's type or
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  Speaker 9: other types. It's a bit late. That means that a
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  Speaker 9: lot that's already happened. So you need to go early,
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  Speaker 9: and early it means long, expensive trials and Lily is
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  Speaker 9: doing that with their assets, So fingers crossed, we'll find
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  Speaker 9: out in the next two or three years where they're
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  Speaker 9: going early with these assets. Rush is doing it too.
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  Speaker 9: It would be a beneficial.
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  Speaker 7: Right, I mean, the test with the pill form of
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  Speaker 7: ozambic was definitely a lottery ticket. If it worked, great,
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  Speaker 7: If not, we're back to the drawing board. Are there
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  Speaker 7: any effective treatments right now against dementia or Alzheimer's?
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  Speaker 9: Well, by effective, I mean it's tough to say, but
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  Speaker 9: there are drugs that lower this thing that is viewed
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  Speaker 9: as a critical part of the Alzheimer's disease, which amyloid
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  Speaker 9: plaques in your brain. If they do lower it. Lily's
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  Speaker 9: got that drug, Biogen's got an equivalent drug. Rushi is
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  Speaker 9: trying a similar approach. And you do slow down the degeneration.
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  Speaker 9: You don't stop it, you slow it down. So what
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  Speaker 9: we really want is to stop people getting to that degeneration.
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  Speaker 9: Try and get them before they have full grown Alzheimer's
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  Speaker 9: or dementia, so that's called mild cognitive impairment. Try and
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  Speaker 9: slow that down to give them another ten, twelve, twenty
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  Speaker 9: years of dignified life.
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  Speaker 2: So where do you think we are on a time
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  Speaker 2: frame for something like that same is that measured in
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  Speaker 2: a couple of years or more than that.
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  Speaker 9: Well, so Lily is literally trying that and we'll find
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  Speaker 9: out whether and they have the better rug in this space,
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  Speaker 9: so we'll find out whether in the next two or
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  Speaker 9: three years. They remember, these things are trials that need
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  Speaker 9: to be run until you start seeing a difference. They
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  Speaker 9: get that to that point, and of course then society
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  Speaker 9: has to decide, well, how were we going to pay for this?
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  Speaker 9: How many people? Because there's a large market, right, how
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  Speaker 9: many people are we going to want to treat with
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  Speaker 9: the prices of these drugs whatever they are, even if
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  Speaker 9: it's ten thousand dollars a year, right, and they are
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  Speaker 9: on their way to becoming worse, and we want to
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  Speaker 9: slow that down. You have ten million people. This could
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  Speaker 9: be similar in terms of value to the obesity market,
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  Speaker 9: but you need the drug to do that. So let's
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  Speaker 9: let's wait and see. And RASH has got a new
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  Speaker 9: way of trying to do it, and they're going to
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  Speaker 9: go again and also to phase three to test that out.
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  Speaker 2: All right, Sam, thanks so much for joining us. Always
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  Speaker 2: appreciate getting a few minutes of your time. Sam Pazzelli,
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  Speaker 2: director of Research for Global Industry and senior pharmaceuticals analysts
• 11:21
  Speaker 2: Bloomberg Intelligence.
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  Speaker 6: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us Live
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  Speaker 1: weekdays at ten am Eastern on Apple, Coarplay and Android
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  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 11:44
  Speaker 3: Scarlett.
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  Speaker 2: One of the I think the questions we get, or
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  Speaker 2: maybe discussion points we have over the last month or
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  Speaker 2: so month and a half has been is this a bubble?
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  Speaker 2: Is this an AI bubble? And I don't know, but
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  Speaker 2: I mean the people are spos after this fact, after
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  Speaker 2: the fact exactly right. So, but somebody wo's supposed to
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  Speaker 2: talk about it like present tenses. Michael Casper, Senior US
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  Speaker 2: Equity Strategies for Bloomberg Intelligence. So, Michael, I know you're
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  Speaker 2: having these conversations with your clients here. What are you
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  Speaker 2: saying bubble, no bubble as it relates to AI.
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  Speaker 12: Yeah, I'm pretty much all the signposts for a bubble
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  Speaker 12: that we have identified so far are pointing towards no bubble. Right,
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  Speaker 12: So if you look at the valuation picture of say
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  Speaker 12: the MAG seven. So the hottest stocks today versus the
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  Speaker 12: hottest stocks in two thousand, we're talking they're trading out
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  Speaker 12: about half the multiple, Microsoft, Cisco, in Telendell, the four Horsemen,
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  Speaker 12: and the Internet bubble we're trading at back at the
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  Speaker 12: top of two thousand, and in fact, the MAG seven's
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  Speaker 12: multiple has come down since twenty twenty one, so they're
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  Speaker 12: growing into their multiple. And you've obviously got a ton
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  Speaker 12: of fundamental support here. Earning's running well faster than normal
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  Speaker 12: at the end of these multi periods, so it's really
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  Speaker 12: pointing towards no bubble at the moment.
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  Speaker 7: Okay, that might be the case for the Mag seven,
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  Speaker 7: for the companies at the heart of the whole AI revolution,
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  Speaker 7: but what about the ones that are kind of on
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  Speaker 7: the periphery, on the side, and the profitless tech companies
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  Speaker 7: that we talk about that are getting wrapped up in everything.
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  Speaker 12: Yeah, so it's actually interesting to bring up profitless tech.
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  Speaker 12: My colleague and Bibredherty, she does thematics for us. She
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  Speaker 12: has a Thematics AI universe, and we've actually scanned that
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  Speaker 12: entire universe. And we're talking large caps, small caps, microcaps,
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  Speaker 12: there's three companies in there that are unprofitable in the
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  Speaker 12: entire AI universe of you nearly fifty companies, So there's
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  Speaker 12: really not a lot of unprofitability, especially within the core
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  Speaker 12: AI themes. And and that's another just feather in the
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  Speaker 12: cap for this not being a bubble.
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  Speaker 2: How about the big tech companies using debt to fund
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  Speaker 2: a lot of Does that get raise the.
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  Speaker 3: Radar at all?
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  Speaker 12: Yeah, so it's interesting that they might start dipping into
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  Speaker 12: debt markets.
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  Speaker 3: That was something that I.
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  Speaker 12: Read this morning on the terminal actually, but so far,
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  Speaker 12: if you look at leverage ratios, right, so total debt
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  Speaker 12: to market cap or total debt to EBITDA, those are
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  Speaker 12: actually significantly lower than where they were in two thousand,
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  Speaker 12: and we've frankly been delevering pretty consistently throughout the post
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  Speaker 12: grade financial crisis period. So leverage is actually below norms
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  Speaker 12: for the s and P five hundred for the Russell
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  Speaker 12: two thousands, it's pretty much closer to norms. So I'm
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  Speaker 12: not that worried about debt financing yet, right, So there's
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  Speaker 12: plenty of room for companies to take on debt here.
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  Speaker 6: Why are investors still so worried them? Why Are they
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  Speaker 6: convinced that this is not sustainable?
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  Speaker 3: Yeah, I think it's a bit of a paranoia.
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  Speaker 8: Right.
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  Speaker 12: We've gone up very far, very fast, and we did
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  Speaker 12: look out at some previous melt ups, So we're talking
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  Speaker 12: in the end of the Great the lead up to
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  Speaker 12: the Great Depression cycle, the Internet bubble, those are the
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  Speaker 12: classic melt ups. Our returns have been pretty fast, but
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  Speaker 12: they're still falling well short of that.
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  Speaker 3: So I think.
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  Speaker 12: Investors are a little bit worried that the returns have
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  Speaker 12: been so violent and so quick, and that's adding to
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  Speaker 12: a little bit of worry. And of course worry is
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  Speaker 12: a good thing, right, So bubbles usually happen when nobody's
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  Speaker 12: worried about them. I like to think about two thousand
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  Speaker 12: and people always talk about, Yeah, my taxi driver was
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  Speaker 12: telling me about some Internet stock. We're just really not
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  Speaker 12: having that right now. There's still plenty of worry in
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  Speaker 12: the system, and that's a good thing.
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  Speaker 2: Orble market earnings pretty much done with the third quarter here,
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  Speaker 2: Are they enough to support this marketplace?
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  Speaker 8: Do you think?
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  Speaker 3: Yeah? I think earnings were phenomenal.
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  Speaker 9: Right.
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  Speaker 12: There were some obviously bumps in the road on a
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  Speaker 12: company by company basis, but again we pretty much doubled
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  Speaker 12: the pace of what consensus expectations were. If you look
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  Speaker 12: at twenty twenty six expectations, those are holding pretty firm.
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  Speaker 12: We're looking at about thirteen percent earnings growth for the
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  Speaker 12: year ahead, again comparing that to previous bubbles. Even that's
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  Speaker 12: significantly higher than what we saw at the end. You know,
• 15:29
  Speaker 12: bubbles are driven by FOMO, not fundamentals, And certainly consensus
• 15:33
  Speaker 12: expectations are strong, and they're actually even strengthening in the
• 15:36
  Speaker 12: Russell two thousand, which has been an unloved group for
• 15:38
  Speaker 12: quite some time. So things on the fundamental side looking
• 15:41
  Speaker 12: pretty decent here.
• 15:43
  Speaker 6: What about on the technical side.
• 15:44
  Speaker 7: I keep reading about how the S and P five
• 15:46
  Speaker 7: hundred is still below it's fifty day moving average, it's
• 15:48
  Speaker 7: short term trend line, and it briefly fell below the
• 15:51
  Speaker 7: one hundred day moving average on Thursday.
• 15:53
  Speaker 6: And because we are not going to get.
• 15:55
  Speaker 7: Any fundamental data on the economy until after the FMC
• 15:59
  Speaker 7: just earning season is over, there aren't a whole lot
• 16:02
  Speaker 7: of catalysts from here on out until maybe next year.
• 16:06
  Speaker 12: Yeah, So one catalyst I'm looking at pretty intently is
• 16:09
  Speaker 12: going to be the holiday spend. Right, Like if that
• 16:11
  Speaker 12: comes in a little bit better than we expect. That
• 16:14
  Speaker 12: could be another catalyst for stocks. But certainly you mentioned
• 16:16
  Speaker 12: the FOMC decision. I think a lot of this pullback
• 16:19
  Speaker 12: has to do with Powells hawkish comments about two weeks ago.
• 16:23
  Speaker 12: You know, people just expecting a little more on the
• 16:26
  Speaker 12: rate cut side than what we're.
• 16:28
  Speaker 8: Going to get.
• 16:28
  Speaker 3: And again, this just looks like a textbook pullback.
• 16:31
  Speaker 12: Right We're down what maybe four or five percent from
• 16:34
  Speaker 12: all time highs on the S and P five hundred
• 16:35
  Speaker 12: on the rustle. It's approaching correction territory, but still nothing
• 16:39
  Speaker 12: really going as far as a bubble bursting.
• 16:42
  Speaker 7: Are you looking at bitcoin and crypto at all insofar
• 16:45
  Speaker 7: as whether it's influencing equities or whether equities are influencing bitcoin,
• 16:49
  Speaker 7: because there's a lot of talk about the linkage between
• 16:53
  Speaker 7: tech stocks and bitcoin.
• 16:55
  Speaker 12: Yeah, I think bitcoin is a good gauge of risk tolerance.
• 16:58
  Speaker 12: I don't know about necessarily a fun mental linkage between
• 17:01
  Speaker 12: bitcoin and stocks outside of.
• 17:03
  Speaker 3: Maybe you know the AI names those leading the corners.
• 17:05
  Speaker 12: I think, you know, stocks are the dog that wags
• 17:09
  Speaker 12: the tail, right, and crypto is the tail here.
• 17:12
  Speaker 3: But I think crypto is really kind of showing.
• 17:14
  Speaker 12: Where the concerns lie in the equity markets and the
• 17:17
  Speaker 12: risk is in the equity markets. And again that seems
• 17:19
  Speaker 12: to be more with the Fed. What is the Fed
• 17:21
  Speaker 12: going to do? Obviously Fed raycuts would be good for bitcoin.
• 17:25
  Speaker 12: Everybody thinks it's it's pretty stable. So I think that's
• 17:29
  Speaker 12: really showing where the pressure points are for stocks.
• 17:31
  Speaker 2: All right, Mike, appreciate it as always. Michael Casper, Bloomberg
• 17:34
  Speaker 2: Intelligence Senior US equity research strategist, giving us lots on
• 17:39
  Speaker 2: these markets. Here, Ai bubble, you know something, so we'll
• 17:42
  Speaker 2: keep an eye on the market. Is certainly trading higher
• 17:44
  Speaker 2: today with the S and pup one point four percent,
• 17:45
  Speaker 2: in the NASDAK up two point three percent.
• 17:48
  Speaker 6: Stay with us. More from Bloomberg Intelligence coming up after this.
• 17:55
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 18:00
  Speaker 1: he's at ten am. He'sterned on Apple Coarcklay and Android
• 18:02
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• 18:06
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 18:10
  Speaker 2: All right, let's go switch gears a little bit.
• 18:12
  Speaker 3: President Trump.
• 18:13
  Speaker 2: When he came into office, he was wildly considered to
• 18:16
  Speaker 2: be a deregulatory president. Will allow a lot of industries
• 18:19
  Speaker 2: maybe to consolidate. One of those industries is the broadcasting industry,
• 18:23
  Speaker 2: the radio and TV business. But he was out with
• 18:26
  Speaker 2: a tweet recently saying he maybe doesn't support that anymore,
• 18:31
  Speaker 2: and that was a big u turn for a lot
• 18:32
  Speaker 2: of people, particularly in the television industry. So we want
• 18:35
  Speaker 2: to go to the expert, Matthew Shettenhelm. He is the
• 18:38
  Speaker 2: media litigation analyst for Bloomberg Intelligence.
• 18:40
  Speaker 3: He's one of the best on the street folks. But
• 18:42
  Speaker 3: his credibility with me took a.
• 18:43
  Speaker 2: Big, big hit when I found out he does not
• 18:46
  Speaker 2: carry cash, and for an old banker like me, who's
• 18:49
  Speaker 2: got a wat of cash in his pocket all the time,
• 18:51
  Speaker 2: that was a problem.
• 18:52
  Speaker 6: But we're still credit cards and therefore he's.
• 18:53
  Speaker 2: Actually just the younger generation Daniel Cash. They just don't
• 18:56
  Speaker 2: do the cash thing. He Matt, how much of a
• 18:59
  Speaker 2: surprise was that President Trump tweets out that maybe he's
• 19:03
  Speaker 2: not behind consolidation in the TV industry.
• 19:06
  Speaker 13: You're never going to let me, let me live that
• 19:08
  Speaker 13: one downfall. But so it's a moderate surprise. So it's
• 19:13
  Speaker 13: not a complete surprise because Newsmax has participated before the
• 19:19
  Speaker 13: FCC and has been one of the few voices that said,
• 19:22
  Speaker 13: don't do this, don't deregulate this space. And what you
• 19:27
  Speaker 13: really see here is President Trump latching on to an
• 19:31
  Speaker 13: article written on Newsmax's platform opposing the easing of this
• 19:35
  Speaker 13: national ownership cap. What's in play here is that there's
• 19:40
  Speaker 13: current FCC regulation says no company can reach more than
• 19:45
  Speaker 13: thirty nine percent of US households, and companies like Nextstar
• 19:51
  Speaker 13: and Sinclair want to go way beyond thirty nine percent.
• 19:54
  Speaker 13: In fact, Nextstar has a pending deal before the FCC.
• 19:57
  Speaker 13: They just filed their application on Thursday or Friday last
• 20:00
  Speaker 13: week to acquire Tegna that would take them to seventy
• 20:04
  Speaker 13: eighty percent of the country, and it depends on the FCC.
• 20:08
  Speaker 8: Deregulating in this space.
• 20:10
  Speaker 13: So Trump latching on to Newsmax's opposition because he's concerned
• 20:16
  Speaker 13: about the TV networks growing larger is a concern.
• 20:20
  Speaker 8: It's a real risk.
• 20:22
  Speaker 13: I'm not convinced yet that it's going to lead to
• 20:24
  Speaker 13: real FCC policy. I think this FCC wants to deregulate
• 20:27
  Speaker 13: in this space, and I think there's going to be
• 20:29
  Speaker 13: a pushback against Trump's view on this.
• 20:32
  Speaker 7: Okay, So the FCC is headed by Brendan Carr, who's
• 20:35
  Speaker 7: been very active in making sure that he's out there
• 20:38
  Speaker 7: doing the president's bidding. Are you saying that Brendan Carr
• 20:41
  Speaker 7: is going to defy President Trump?
• 20:44
  Speaker 13: Yeah, so that's the big question here. The FCC used
• 20:48
  Speaker 13: to operate as an independent agency, meaning even if the
• 20:52
  Speaker 13: President had a view on something, the FCC could chart
• 20:55
  Speaker 13: its own course. That doesn't that's not going to work
• 20:58
  Speaker 13: anymore the way this FC is operating. If the President
• 21:02
  Speaker 13: takes a firm view on something, the FCC is not
• 21:06
  Speaker 13: going to defy it because effectively, the President can fire
• 21:10
  Speaker 13: the FCC chairman then and you know, there's no no
• 21:13
  Speaker 13: future job prospect if you defy the president. What I'm
• 21:16
  Speaker 13: not convinced about is, you know, this was one social
• 21:20
  Speaker 13: media post from President Trump, and you know, talking about
• 21:24
  Speaker 13: concerns about letting the broadcast networks ABC, CBS, Fox get bigger.
• 21:29
  Speaker 8: What I think there could be.
• 21:30
  Speaker 13: Now in in you know, on in back channels, is
• 21:32
  Speaker 13: some education from the FCC to the White House that says, hey,
• 21:36
  Speaker 13: easing the national ownership cap it would let Sinclair Next
• 21:39
  Speaker 13: Star get bigger, probably, but it doesn't necessarily mean the
• 21:42
  Speaker 13: broadcast networks will get bigger. There's still an independent check
• 21:46
  Speaker 13: on that even if we we ease this this cap.
• 21:49
  Speaker 13: So ultimately, if Trump is against this, the FCC is
• 21:53
  Speaker 13: not going ahead with it in my view. But I
• 21:56
  Speaker 13: think there's still room for for Trump's position to evolve
• 21:59
  Speaker 13: on this.
• 22:00
  Speaker 2: So, I mean, the reality is, I mean, this is
• 22:02
  Speaker 2: an industry, the broadcast television industry that is arguably on
• 22:06
  Speaker 2: life support vis a VI forget about cable television, which
• 22:09
  Speaker 2: itself is on life support. They survive that on slot.
• 22:12
  Speaker 2: Now it's just all about digital and social media. And
• 22:15
  Speaker 2: I would think the industry would have an open would
• 22:19
  Speaker 2: have an effective argument, not just to the DOJ, but
• 22:22
  Speaker 2: to the president as well.
• 22:23
  Speaker 8: Absolutely.
• 22:24
  Speaker 13: I mean that's the case that the National Association of
• 22:26
  Speaker 13: Broadcasters has made to the FCC that these ownership restrictions,
• 22:31
  Speaker 13: you know, which come from the nineteen seventies or even
• 22:34
  Speaker 13: earlier than that, really make no sense in the world
• 22:37
  Speaker 13: we live in today, where so much video that is
• 22:41
  Speaker 13: consumed doesn't come from from broadcast. It comes over the Internet,
• 22:45
  Speaker 13: and there are no artificial caps on how much those
• 22:50
  Speaker 13: companies can reach, and broadcasters are left to try to
• 22:54
  Speaker 13: fight with one hand tied behind their back with these
• 22:58
  Speaker 13: these you know, ancient FCC rules on the books, and
• 23:01
  Speaker 13: the Republicans at the FCC, Brendan Carr included, strongly agree
• 23:06
  Speaker 13: with that message.
• 23:07
  Speaker 8: And so it's going.
• 23:09
  Speaker 13: To be I think a little bit of a communication
• 23:12
  Speaker 13: effort that needs to happen between the FCC and the
• 23:14
  Speaker 13: White House too, And the real question will be how
• 23:18
  Speaker 13: does that play out. Does Trump's social media post actually
• 23:21
  Speaker 13: translate to real policy.
• 23:24
  Speaker 8: I'm not convinced that it will yet.
• 23:26
  Speaker 3: All Right, Matt, appreciate it as always.
• 23:28
  Speaker 2: Met Chetninghelm, He's a media litigation analyst Bloomberg Intelligency space
• 23:31
  Speaker 2: down there in DC.
• 23:33
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