Latest / Bloomberg Intelligence / A G20 Country Will Adopt Bitcoin by Yr-End: CoinShares' Demirors

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A G20 Country Will Adopt Bitcoin by Yr-End: CoinShares' Demirors · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller. Every business day we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
• 0:11
  Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
• 0:15
  Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. All right, folks, looking
• 0:22
  Speaker 1: at bitcoin once again. It is up five percent today
• 0:26
  Speaker 1: called as to the green Side, putting it just over
• 0:31
  Speaker 1: fifty one thousand dollars per coin. Let's get a sense
• 0:35
  Speaker 1: of what's going on with bitcoin at All Things Crypto.
• 0:38
  Speaker 1: We're fortunate to welcome our next guest, melt Him Demire's
• 0:41
  Speaker 1: chief strategy officer for coin Shares Group. They have about
• 0:44
  Speaker 1: four billion dollars in assets under management. Matt, what do
• 0:47
  Speaker 1: you think is driving your Actually I can't wait to
• 0:50
  Speaker 1: get her on the line because I have so many questions.
• 0:54
  Speaker 1: One of the products that coin share offers is an
• 0:58
  Speaker 1: e t P and exchange traded product, and of course
• 1:01
  Speaker 1: there haven't been any e t f s yet for
• 1:03
  Speaker 1: buying bitcoin, and I think, you know, it's just why
• 1:07
  Speaker 1: why why is they just haven't been allowed by regulators,
• 1:10
  Speaker 1: you know, the Winkle Vye. We're trying to get one
• 1:12
  Speaker 1: out there, and there are a number of, um, really
• 1:16
  Speaker 1: reputable people working to get to get an e t
• 1:19
  Speaker 1: F out there. Um. One of the main problems, Paul,
• 1:22
  Speaker 1: is that when you go and buy something like bitcoin
• 1:26
  Speaker 1: that you don't understand in the first place, and you
• 1:27
  Speaker 1: have to figure out where to put it in the wallet,
• 1:29
  Speaker 1: then inevitably, as I did, you lose your password and
• 1:32
  Speaker 1: then it's just lost forever. It's terrifying. So I'd rather
• 1:37
  Speaker 1: be able to buy an e t F or um
• 1:40
  Speaker 1: they sell an e t P and I wonder what
• 1:43
  Speaker 1: it is. It's apparently it's physically backed e t P. Alright,
• 1:46
  Speaker 1: we have Mel tem back whether Mel Mel temp Demere's
• 1:48
  Speaker 1: chief strategy officer for coin Chairs Group about some Thanks
• 1:50
  Speaker 1: so much for joining us. I'd love to just get
• 1:52
  Speaker 1: your thoughts initially here on what's driving bitcoin at Hey, guys,
• 1:58
  Speaker 1: great to be here, Thanks for having me. Um. Look,
• 2:01
  Speaker 1: what's driving bitcoin is with driving I think all aspects
• 2:04
  Speaker 1: in the macro market more broadly, a lot of drive
• 2:07
  Speaker 1: powder on the sidelines, over five trillion of cash, higher
• 2:10
  Speaker 1: record savings UM, and we're seeing asset prices going up
• 2:14
  Speaker 1: across the board. Bitcoin is not immune to that. So
• 2:17
  Speaker 1: I think the macro environment is definitely driving some of
• 2:20
  Speaker 1: the inflows into bitcoin, but more than anything else, over
• 2:24
  Speaker 1: the last six months, we have seen the sentiment and
• 2:27
  Speaker 1: demand for bitcoin shift dramatically. We have corporate treasurers and
• 2:32
  Speaker 1: the renown spot managers, Bridgewater, black Rock, all of the
• 2:36
  Speaker 1: world's largest asset managers now talking about and allocating to bitcoin.
• 2:41
  Speaker 1: So overall, really, the way I think about it is
• 2:44
  Speaker 1: sentiment more a brilliant, more ulish than ever. Sentiment translates
• 2:48
  Speaker 1: into demand. There is more demand than ever. Bitcoin has
• 2:52
  Speaker 1: a limited supply um. Only eighteen and a half million
• 2:56
  Speaker 1: in circulation today applies CAPTI twenty one million. Happens when
• 3:00
  Speaker 1: you have something rare that there's a lot of demands for.
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  Speaker 1: As demand goes up, price goes up. And then the
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  Speaker 1: last thing I'll just mention from the market structure perspective,
• 3:08
  Speaker 1: we're seeing record inflows week after week into structured products.
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  Speaker 1: Last week alone three million. First two months of this year,
• 3:17
  Speaker 1: especially the first month and a half when we have
• 3:19
  Speaker 1: to into February, over two billions of inflows compared to
• 3:23
  Speaker 1: seven billion for the entirety of last year. So yeah,
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  Speaker 1: I want to ask you about one of those. So
• 3:30
  Speaker 1: I was looking at your exchange traded product. You've got
• 3:34
  Speaker 1: physically backed e t P that offers exposure bitcoin. So
• 3:40
  Speaker 1: what does that mean? Does that mean you hold bitcoin
• 3:44
  Speaker 1: basically in cold storage? For me if I buy the
• 3:46
  Speaker 1: e t P exactly and more than that, we are
• 3:50
  Speaker 1: the world's first asset manager to actually give you a
• 3:55
  Speaker 1: certified aspectation from Armanino LP, one of the world's large
• 3:59
  Speaker 1: audit firms, every thirty minutes our blockchain wallet and confirmed
• 4:04
  Speaker 1: that that bitcoin is there. You can check that on
• 4:07
  Speaker 1: our website as well. So we are the first ones
• 4:10
  Speaker 1: to provide a blockchain based at a station where you
• 4:12
  Speaker 1: can actually see we hold the bitcoin, you say, which
• 4:15
  Speaker 1: is pretty cool. Alright, So meltem it was a big
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  Speaker 1: news when Elon Muska and Tesla they put a billion
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  Speaker 1: five of bitcoin on their balance sheet. When will we
• 4:24
  Speaker 1: see a G twenty economy brace bitcoin? You know what,
• 4:31
  Speaker 1: I think, by the end of this year it will
• 4:33
  Speaker 1: happen that you can you can print that that's bit
• 4:38
  Speaker 1: to a print. I've predicted by the end of this
• 4:39
  Speaker 1: year it will happen. Look at the end of the day. Um,
• 4:42
  Speaker 1: I think there are a lot of jurisdictions right now
• 4:44
  Speaker 1: that are competing for talent and for business. You look
• 4:47
  Speaker 1: at the exodus of financial services firms from New York.
• 4:50
  Speaker 1: New York is not a friendly state for finance or
• 4:53
  Speaker 1: for cryptocurrency for that matter. So businesses are going to
• 4:57
  Speaker 1: go to jurisdictions where they are welcomed. And certainly as
• 5:01
  Speaker 1: we look at the economic turmoil, UM, that's the resulting
• 5:04
  Speaker 1: from this, this pandemic. The crypto industry is the growing industry,
• 5:08
  Speaker 1: contributes billions of dollars in tax revenue, UM, creates a
• 5:12
  Speaker 1: lot of jobs. So I would not be surprised if
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  Speaker 1: one country, one twenty economy really tries to make itself
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  Speaker 1: appealing to crypto entrepreneurs who are dealing with an increasingly
• 5:23
  Speaker 1: challenging regulatory environment. Got a target for us? Where do
• 5:27
  Speaker 1: you think bitcoin is going into? Uh? You know, I
• 5:31
  Speaker 1: say name or price, but no date or name and
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  Speaker 1: date and no price. Look, here's what else say. I
• 5:35
  Speaker 1: have a hat that's been made for me that says
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  Speaker 1: bitcoin Henry K and I expect all you wearing that
• 5:40
  Speaker 1: hat for the end of this year. Wow, very good.
• 5:43
  Speaker 1: What's the biggest risk to bitcoin, meltem It's had such
• 5:46
  Speaker 1: a great room. What's the biggest risk thirty seconds the
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  Speaker 1: biggest risk, honestly, I think um cyclicality. Right so we're
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  Speaker 1: in an a bullish, a bulliant market cycle right now.
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  Speaker 1: There is a cyclical trend and bitcoin in a secular
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  Speaker 1: and beast. The clickal trends, I think can be challenging
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  Speaker 1: to confidence. It's particularly investor confidence. So I think the
• 6:07
  Speaker 1: thing we're really looking for is the futures curve and
• 6:11
  Speaker 1: its trade or suniments. That's really gonna drive Tyson. Hey,
• 6:14
  Speaker 1: malt Tom, thanks so much for joining us. As always,
• 6:16
  Speaker 1: we love to get your thoughts on all things crypto.
• 6:18
  Speaker 1: Meltemp demers, chief strategy officer for coin Share Group. US
• 6:24
  Speaker 1: retail sales they surged in Januate by the most in
• 6:28
  Speaker 1: seven months, beating all estimates. So really just some strong
• 6:32
  Speaker 1: numbers showing that the consumer, at least in January was
• 6:34
  Speaker 1: quite active. Let's break down those numbers see what's behind them.
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  Speaker 1: We can do that with Craig Johnson. He's the president
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  Speaker 1: of Customer Growth Partners, joining us on the phone from Connecticut. Craig,
• 6:42
  Speaker 1: thanks so much for joining us here. You look at
• 6:44
  Speaker 1: the numbers today much better than expected. What do you
• 6:49
  Speaker 1: think are the real drivers behind the consumer here? Well,
• 6:54
  Speaker 1: I guess as a number of drivers, we weren't surprised. Frankly.
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  Speaker 1: We we just issued our annual forecast for reach all
• 7:00
  Speaker 1: um ten days or so ago, and we called for
• 7:03
  Speaker 1: growth of eight point one percent year of a year.
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  Speaker 1: And that's exceptional growth, the strongest this century. Um. But
• 7:10
  Speaker 1: if you look at the drivers behind you that you've
• 7:12
  Speaker 1: got to start with personal income. Personal income has been rising. Uh.
• 7:16
  Speaker 1: Job growth has been decent, not great, but over the
• 7:19
  Speaker 1: last you know, six or six months plus has been strong. Um.
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  Speaker 1: And uh. Last but other factor is is that the
• 7:27
  Speaker 1: amount of personal savings that people have, households have on
• 7:30
  Speaker 1: the balance sheet is exceptional. A year ago was about
• 7:33
  Speaker 1: one point two trillion. Now it's double to two point
• 7:36
  Speaker 1: four trillion. That's an an incremental one point two trillion
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  Speaker 1: dollars in dry powder available for spending. Uh. So these
• 7:45
  Speaker 1: are some of the factors. Are other things are going anyway?
• 7:47
  Speaker 1: You know that people feeling better about vaccinations and so forth,
• 7:50
  Speaker 1: and those are the factor key factors. I think it
• 7:52
  Speaker 1: bears repeating your forecast, bears repeating you expect an eight
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  Speaker 1: point one percent growth annually in retail sales. And this
• 8:02
  Speaker 1: is not including cars, gas, restaurants. Um that is huge
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  Speaker 1: and as you said, the biggest this century. Where do
• 8:10
  Speaker 1: you think consumers are going to spend that money? What
• 8:13
  Speaker 1: are they gonna buy? The Well, it's broad based across categories,
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  Speaker 1: but the strongest growing categories. First of all, anything associated
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  Speaker 1: with a home, home of approvement, home furnishings, uh, etcetera. Uh,
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  Speaker 1: the online side of it is going to grow about
• 8:29
  Speaker 1: twenty year of a year, again, very strong growth, and
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  Speaker 1: this January it was two year of a year. Uh,
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  Speaker 1: so that's that's a major category. Um. Uh. Personal care
• 8:40
  Speaker 1: healthy and personal care is growing category. That's gonna rise.
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  Speaker 1: And Uh. The other factor that comes into into it
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  Speaker 1: is is a small category but very strong, and that's
• 8:50
  Speaker 1: sporting goods. This has been a stellar year for sporting goods.
• 8:53
  Speaker 1: Anything associated with the outdoors, outdoor living has been strong. Creig.
• 8:57
  Speaker 1: How much of that of your eight point one percent
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  Speaker 1: annual forecast is predicated upon additional fiscal stimulus? Um? Uh
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  Speaker 1: really only modestly. We're assuming that there's gonna be First
• 9:12
  Speaker 1: of all, there's existing uh incremental unemployment benefits, etcetera already
• 9:17
  Speaker 1: in the system, and we're anticipating some increase, but only
• 9:22
  Speaker 1: a modest increase. And we're in assuming it has to
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  Speaker 1: be the full you know, with one point nine you know,
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  Speaker 1: trillion dollars. Uh, it's just even a fraction of that
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  Speaker 1: is included in our forecast. Uh. Most of the growth
• 9:35
  Speaker 1: that we're seeing comes from the basics, in other words,
• 9:38
  Speaker 1: job growth and then income growth that goes along with
• 9:41
  Speaker 1: job growth. UH. And that's the key factor along with
• 9:44
  Speaker 1: this this again the UH buoyant, buoyant factor of having
• 9:51
  Speaker 1: one point two trillion dollars extra dry powder available to spin.
• 9:55
  Speaker 1: Those are the those are the real key drivers. Are
• 9:58
  Speaker 1: you worried about rates at all? I mean, if people
• 9:59
  Speaker 1: are going to spend money, um, and that's gonna boost prices,
• 10:03
  Speaker 1: you'd assume if demand goes up and not, as you know,
• 10:07
  Speaker 1: more than supply does, does the FED then eventually have
• 10:10
  Speaker 1: to go to neutral and even thinking about shifting into drive. Um,
• 10:15
  Speaker 1: we're anticipating we're already beginning to see some uh increases
• 10:20
  Speaker 1: in pricing, obviously in in the in the energy sector
• 10:23
  Speaker 1: that started to take up a very strongly over recent
• 10:27
  Speaker 1: days and weeks UH, and home related things. Otherwise, price
• 10:31
  Speaker 1: of lumbers going up. So we are going to see
• 10:33
  Speaker 1: some inflation coming into the mix. We don't anticipate it
• 10:37
  Speaker 1: that it's going to be sufficient enough to be you know,
• 10:40
  Speaker 1: like the olden days of you know, the early nine anything,
• 10:44
  Speaker 1: nothing near that, But we do it just is going
• 10:46
  Speaker 1: to take up a little bit. But we're not you know,
• 10:49
  Speaker 1: the predicting freed UH decisions is above above my pay grade.
• 10:54
  Speaker 1: But we do anticipate some inflation creeping into into the mix. Correct.
• 11:00
  Speaker 1: It's the biggest risk to your retail sales forecast this year.
• 11:04
  Speaker 1: The biggest risk is if job growth jobs off again,
• 11:07
  Speaker 1: job growth and personal income growth. That's that's that's the
• 11:10
  Speaker 1: predetermined factor of retail sales and really evolved consumers spending
• 11:14
  Speaker 1: UH and UH. The job growth has been a little
• 11:18
  Speaker 1: flattish over the last month. It too strong for the
• 11:20
  Speaker 1: last six or eight months, but but but a little
• 11:22
  Speaker 1: bit flattish the last month or two. And if that
• 11:25
  Speaker 1: somehow takes a real downturn rather than steadily improving, that
• 11:29
  Speaker 1: would be the biggest factor. And so that's that's something
• 11:32
  Speaker 1: we're keeping our eyes on on it. But there's nothing
• 11:34
  Speaker 1: on the horizon. Uh that that that says job growth
• 11:39
  Speaker 1: is suddenly gonna start to drive dry up. You know,
• 11:42
  Speaker 1: hopefully it'll continue and there won't be the kind of
• 11:45
  Speaker 1: shocks that will uh that will trigger any kind of
• 11:48
  Speaker 1: major job losses, and that would be the biggest risk.
• 11:51
  Speaker 1: Craig Johnson, thank you so much for joining us. We
• 11:53
  Speaker 1: appreciate your thoughts and sharing retail sales forecast with us
• 11:57
  Speaker 1: on the back of a very strong retail sales number
• 11:59
  Speaker 1: for or January. Craig Johnson, He's the president of Customer
• 12:03
  Speaker 1: Growth of Partners Based. He's up in a New Canaan, Connecticut.
• 12:06
  Speaker 1: Again some very strong retail sales number suggesting that the
• 12:09
  Speaker 1: consumer is in pretty good shape despite the pandemic. Well,
• 12:16
  Speaker 1: Texas and many other parts of the Midwest are experiencing
• 12:19
  Speaker 1: unprecedented blackouts do in very large parts of just some
• 12:23
  Speaker 1: brutal winter weather that has been just pounding that region
• 12:27
  Speaker 1: of the country for days. Here, let's get the latest
• 12:29
  Speaker 1: on what is going on on what the future might hold.
• 12:32
  Speaker 1: We do that with Liam Denning. He's the energy, mining
• 12:35
  Speaker 1: and commodities calumnists for Bloomberg Opinion. Liam, thanks so much
• 12:38
  Speaker 1: for joining us here. I know We're just a few
• 12:41
  Speaker 1: days into this real crisis in Texas and other states.
• 12:45
  Speaker 1: What do we know as to what happened? It just
• 12:48
  Speaker 1: seems like it was a you know what some people
• 12:50
  Speaker 1: are calling a perfect storm. Yeah, I mean these events
• 12:55
  Speaker 1: have happened in the past in not to this magnitude,
• 12:59
  Speaker 1: but all that all the way back to which is
• 13:04
  Speaker 1: the first time, Um, we we saw blackouts in that
• 13:10
  Speaker 1: market or controlled blackouts to deal with a spike in demand. Um,
• 13:14
  Speaker 1: you know that the complex answer will take a few
• 13:17
  Speaker 1: months to come out, but the simple answer is that
• 13:21
  Speaker 1: there was a spike in demand due to cold weather
• 13:25
  Speaker 1: and also a lot of plants went offline again because
• 13:28
  Speaker 1: of cold weather. The system in the power system in
• 13:32
  Speaker 1: Texas is geared mainly to dealing with big increases in
• 13:37
  Speaker 1: demand during the summer for air conditioning. Um, it's not
• 13:42
  Speaker 1: really built or for dealing with a surgeon demand in
• 13:48
  Speaker 1: in in winter. And that's the problem here. So my
• 13:51
  Speaker 1: my first thought was, Um, the grid is garbage? Is
• 13:56
  Speaker 1: that right? Or do they have a really great grid
• 13:59
  Speaker 1: into access? Uh, it's not so much a question that
• 14:04
  Speaker 1: the grid is garbage. You know what we've seen is
• 14:10
  Speaker 1: is really a bunch of a bunch of plants go offline,
• 14:14
  Speaker 1: and that's due to several factors. So you know, we
• 14:18
  Speaker 1: saw over the weekend, UH and in the last couple
• 14:21
  Speaker 1: of days, you know, people blaming wind turbines because they
• 14:26
  Speaker 1: stopped turning because of a build up advice. That's true
• 14:30
  Speaker 1: to some degree, but actually the wind turbines are a
• 14:33
  Speaker 1: pretty small part of it. We all. We also saw
• 14:35
  Speaker 1: the much bigger part was with gas plants shutting down,
• 14:40
  Speaker 1: and that was due to a range of factors. Um
• 14:43
  Speaker 1: partly because gas was being diverted to heating people's homes,
• 14:47
  Speaker 1: so they're simply was have fuel available, but also plants
• 14:52
  Speaker 1: just not being built for this weather. So you see
• 14:55
  Speaker 1: valves freeze up, gauges freeze up, even a nuclear plants
• 14:59
  Speaker 1: shut down rain. Yeah, I saw a report of of
• 15:02
  Speaker 1: of one nuclear reactor shutting down temporarily. I wasn't entirely
• 15:06
  Speaker 1: sure what happened there, um, but but you know, these
• 15:10
  Speaker 1: thermal plants rely on water for cooling, so there may
• 15:15
  Speaker 1: be an issue there if if stuff is freezing up.
• 15:17
  Speaker 1: So it's not so much that the grid is bad,
• 15:20
  Speaker 1: it's it's that the the the infrastructure isn't built to
• 15:26
  Speaker 1: um to take on this kind of event. I mean,
• 15:29
  Speaker 1: if you want to think about it this way, it's
• 15:30
  Speaker 1: kind of an insurance problem, right. You have these events
• 15:35
  Speaker 1: that happen from time to time, and it costs money
• 15:40
  Speaker 1: to build things in a way that they can deal
• 15:42
  Speaker 1: with it. And the fact is that the Texan market,
• 15:46
  Speaker 1: you know, it's deregulated. The focus is much more on
• 15:49
  Speaker 1: keeping prices low. And so when a plant operator is
• 15:55
  Speaker 1: making that decision, well, do I invest X to deal
• 15:58
  Speaker 1: with an event that might have and once every ten
• 16:01
  Speaker 1: or twenty years, or do I keep my cost down
• 16:04
  Speaker 1: Most of the time they're gonna say, I'll keep my
• 16:05
  Speaker 1: cost down. So Liam, you know, some arguments are being
• 16:08
  Speaker 1: raised that climate change has to be addressed here as
• 16:11
  Speaker 1: it relates to Texas and others power grids. I eat
• 16:16
  Speaker 1: climate change producing I guess greater swings in whether it's
• 16:21
  Speaker 1: maybe hotter summers colder winters, and that has to be
• 16:25
  Speaker 1: incorporated into the design and maintenance of these systems. Is
• 16:30
  Speaker 1: that getting any traction in places like Texas? Um, I'm
• 16:35
  Speaker 1: sure it will gain traction among some. I'm not sure
• 16:38
  Speaker 1: it's gaining much traction in the Governor's office as yet. UM.
• 16:42
  Speaker 1: But it's it's un ignorable. I mean, look, Texas never
• 16:46
  Speaker 1: likes to um to be compared to California, but in
• 16:50
  Speaker 1: this respect they're united. You know, California faces growing problems
• 16:56
  Speaker 1: with wildfires due to climate change, and we've seen the
• 16:59
  Speaker 1: havocates reeked on the grid there. Texas is going to
• 17:02
  Speaker 1: face extreme temperature variations as well. And it's not just
• 17:07
  Speaker 1: the power system that isn't built for it. You know,
• 17:09
  Speaker 1: there's a lot of big houses in Texas that take
• 17:13
  Speaker 1: a lot of heating and cooling. They aren't well and insulated.
• 17:16
  Speaker 1: You know, there's an urban planning issue here as well,
• 17:20
  Speaker 1: and you know it's it's tempting to go on TV
• 17:24
  Speaker 1: and say, well, it's all the wind turbine spault, but um,
• 17:27
  Speaker 1: you know, ideology is a good way of getting people's
• 17:30
  Speaker 1: blood boiling, but it won't actually keep them warm, you
• 17:32
  Speaker 1: know what I mean. I'd say I'm a huge fan
• 17:34
  Speaker 1: of Texas. Visit Dallas as often as I can, and
• 17:38
  Speaker 1: I just love how big everything is, from the houses
• 17:41
  Speaker 1: to the truck's. The only thing not big is the
• 17:43
  Speaker 1: gas bill when I when I fill up my gigantic
• 17:46
  Speaker 1: F three fifty duly there. Well, I want to ask
• 17:49
  Speaker 1: you throw you a bit of a curve ballium since
• 17:51
  Speaker 1: we got you, and I'm looking through all your opinion columns.
• 17:54
  Speaker 1: I just just recently watched this Bill Gates documentary on Netflix.
• 17:58
  Speaker 1: I'm sure, well, I hope we've all seen it. It's
• 18:00
  Speaker 1: really good. What do you think about nuclear? I mean,
• 18:03
  Speaker 1: seems like everyone just passes it over right away, but
• 18:07
  Speaker 1: the world's smartest man's figured out a way to make
• 18:09
  Speaker 1: it safe. Well, here's the issue with nuclear. So there
• 18:15
  Speaker 1: is a safety issue, and there's a public perception issue,
• 18:18
  Speaker 1: But I think the bigger problem with nuclear is really
• 18:21
  Speaker 1: a capital markets issue. Right If you if you think
• 18:24
  Speaker 1: about it, if you're going to build a nuclear plant,
• 18:26
  Speaker 1: it's going to cost you, you know, five nine billion
• 18:31
  Speaker 1: dollars to build this thing. It's probably going to take
• 18:33
  Speaker 1: you the best part of a decade to build it.
• 18:36
  Speaker 1: For that kind of investment to pencil out, you've got
• 18:41
  Speaker 1: to be really certain about what's going to be happening
• 18:44
  Speaker 1: with power prices and demand over the next forty or
• 18:50
  Speaker 1: fifty years. And what we've seen in the past several
• 18:55
  Speaker 1: decades is in deregulated electricity markets, nuclear has become less
• 19:01
  Speaker 1: popular because it costs a lot of money and you
• 19:03
  Speaker 1: have to take a big upfront risk on you know, expose,
• 19:08
  Speaker 1: expose risk, exposure to two prices and demand. And that's
• 19:11
  Speaker 1: why a lot of these plants you know, don't get built,
• 19:14
  Speaker 1: particularly because they also tend to run over budget, take
• 19:17
  Speaker 1: longer to build. That's why we tend to see more
• 19:20
  Speaker 1: nuclear panths being built in in regulated markets, you know,
• 19:25
  Speaker 1: like like China and that sort of thing. So, you know,
• 19:29
  Speaker 1: nuclear is fine and it has real advantages in terms
• 19:33
  Speaker 1: of dealing with addressing issues of climate change. The one
• 19:36
  Speaker 1: issue it cannot deal with or has struggled to deal with,
• 19:40
  Speaker 1: is it costs a lot of money and it represents
• 19:42
  Speaker 1: a lot of risk. Liam Denning, thank you so much.
• 19:46
  Speaker 1: We appreciate your thoughts as always on this crazy, crazy
• 19:49
  Speaker 1: story in Texas and other parts of Midwest. Hopefully they
• 19:53
  Speaker 1: get some release soon. Liam Denning, Energy Mining and Commodities
• 19:57
  Speaker 1: Calms for Bloomberg Opinion. You can read liam work and
• 20:00
  Speaker 1: that of our Bloomberg Opinion columnists. They do great, great
• 20:03
  Speaker 1: work Bloomberg dot Com, Slash Opinion or O P. I
• 20:07
  Speaker 1: N Go on the Turn. Why I recommend you take
• 20:10
  Speaker 1: a look at that work again. Liam Denning on the
• 20:12
  Speaker 1: energy business, and what is going on down in Texas
• 20:14
  Speaker 1: with those rolling blackouts that news reports suggest will go
• 20:18
  Speaker 1: on at least for another couple of days. Well to me,
• 20:23
  Speaker 1: I guess one of the more interesting developments in the
• 20:25
  Speaker 1: US economy over the last decade or so is the
• 20:27
  Speaker 1: growth of the gig economy. Think Uber and Lift and
• 20:31
  Speaker 1: the in the real key to the economic model for
• 20:33
  Speaker 1: a gig company like Uber and Lift is that they're
• 20:36
  Speaker 1: drivers in this case are deemed contractors and not employees,
• 20:41
  Speaker 1: and that has a lot of implications. Let's dig down
• 20:43
  Speaker 1: deep on that issue. We can do that with josh Idolson,
• 20:46
  Speaker 1: labor reporter for Bloomberg News. So, Josh, you know in
• 20:50
  Speaker 1: California or I know you're based California voted. The voters
• 20:54
  Speaker 1: actually voted to classify Uber Lift drivers as contractors. What
• 20:57
  Speaker 1: are the implications of that. The implications of that vote
• 21:02
  Speaker 1: substantively and politically have been huge. There was a two
• 21:07
  Speaker 1: million dollar ballot measure campaign by gig companies in California
• 21:11
  Speaker 1: which secured passage of Prop. Twenty two. This measure making
• 21:16
  Speaker 1: workers under California law contractors and not employees if they're
• 21:20
  Speaker 1: doing app based driving, whether it's for delivery or passengers.
• 21:26
  Speaker 1: That means people are excluded from a whole range of
• 21:30
  Speaker 1: protections that California employment law provides employees, though they are
• 21:35
  Speaker 1: provided an alternate suite of more circumscribed benefits. Why why,
• 21:43
  Speaker 1: why why would I mean? I think of California as
• 21:46
  Speaker 1: a super progressive state, and um, whenever I, well, I
• 21:50
  Speaker 1: take uber's a lot, or I did before the lockdown.
• 21:53
  Speaker 1: Whenever I take an uber, I think this poor guy
• 21:55
  Speaker 1: is working like sixteen hours a day just to pay
• 21:58
  Speaker 1: off his lease. Um, why would such progressive people vote
• 22:02
  Speaker 1: to m make this guy's life so much harder? Well,
• 22:07
  Speaker 1: some of the polling suggests that some of the people
• 22:10
  Speaker 1: who voted for Prop two thought that it would ensure
• 22:14
  Speaker 1: benefits for workers that they might otherwise not have. Certainly,
• 22:19
  Speaker 1: part of the messaging from the companies, both in advertising
• 22:23
  Speaker 1: and in messages they put in their own apps, suggested
• 22:27
  Speaker 1: that workers would not have these jobs at all if
• 22:31
  Speaker 1: the ballot measures didn't pass. This is something that has
• 22:36
  Speaker 1: been part of the debate for a long time, is
• 22:39
  Speaker 1: these companies saying their business model and therefore their workers likelihoods,
• 22:44
  Speaker 1: depend on treating workers as contractors. Meanwhile, you have some
• 22:49
  Speaker 1: workers and advocates and lawmakers who say this is just
• 22:53
  Speaker 1: a new modern version of an argument that companies have
• 22:57
  Speaker 1: always made that they need an accept shin station and
• 23:01
  Speaker 1: have to pay people the same minimum amount for each
• 23:04
  Speaker 1: hour of their work that others do, and the fact
• 23:07
  Speaker 1: that it happens during an app doesn't change the potential
• 23:11
  Speaker 1: nature of that debate. So how does the proposed fifteen
• 23:16
  Speaker 1: minimum wage does it? That does that impact you know
• 23:19
  Speaker 1: California or just gig economy workers in general. Well, minimum
• 23:23
  Speaker 1: wage is a great example. The federal minimum wage, like
• 23:27
  Speaker 1: the federal labor rights in the National Labor Relations Act,
• 23:31
  Speaker 1: applies to employees, not to contractors. So under federal law,
• 23:37
  Speaker 1: like under state law, if you're considered a contractor, you
• 23:41
  Speaker 1: are excluded from many of the protections that the New
• 23:45
  Speaker 1: Deal in trines for workers. Now, what makes this particularly
• 23:50
  Speaker 1: complicated is someone can be an employee under one law
• 23:53
  Speaker 1: and not under another. So while the companies have one
• 23:57
  Speaker 1: Crop twenty two in California, that doesn't in and of
• 24:01
  Speaker 1: itself protect them from being found under federal law, to
• 24:06
  Speaker 1: the employers that are under on the hook for what
• 24:11
  Speaker 1: they haven't done under federal law, Josh, so many, uh
• 24:16
  Speaker 1: so many Americans work now in the gig economy, not
• 24:19
  Speaker 1: just in California but across the country, and I'm just
• 24:22
  Speaker 1: wondering if you have any insight as to how they
• 24:24
  Speaker 1: are being supported by the stimulus measures that we you know,
• 24:29
  Speaker 1: that we got under President Trump, that we're expecting under
• 24:32
  Speaker 1: President Biden. Are there are there any um exceptions made
• 24:36
  Speaker 1: to try and help these gig workers who are hard
• 24:39
  Speaker 1: to kind of value. Well, one of the things that
• 24:44
  Speaker 1: was passed last year was the p u A, a
• 24:49
  Speaker 1: separate unemployment system for people that were not considered employees,
• 24:57
  Speaker 1: and there was disagreement amongst some advocates about whether gig
• 25:00
  Speaker 1: workers should be except or accepting that program or pushing
• 25:06
  Speaker 1: to get full unemployment benefits as employees, as some agencies,
• 25:11
  Speaker 1: such as in New York have concluded some of these
• 25:14
  Speaker 1: gig workers are entitled to because they found they actually
• 25:18
  Speaker 1: are employees and not contracted. Josh talked to us about contractors,
• 25:23
  Speaker 1: because there's a lot of companies use contract employees to
• 25:26
  Speaker 1: kind of you know, on different demand, seasonality thing things
• 25:29
  Speaker 1: like that. What's the impact of gig workers on those folks.
• 25:34
  Speaker 1: So what gets talked about as the gig economy now
• 25:38
  Speaker 1: in some ways is a face of something that has
• 25:41
  Speaker 1: existed for many, many decades in the United States, as
• 25:46
  Speaker 1: I talked about in Business Week, even in the early
• 25:51
  Speaker 1: years of the National a Relations Act in the nineteen
• 25:55
  Speaker 1: fourt you had William Randolph, First Publishing Company going to
• 26:00
  Speaker 1: the Supreme Court arguing that it's news these were not employees.
• 26:05
  Speaker 1: And while they lost at court, the company then ultimately
• 26:10
  Speaker 1: was indicated in that Congress passed the law specifically excluding
• 26:16
  Speaker 1: independent contractors. So you've had these controversies about so called
• 26:20
  Speaker 1: misclassification of workers of contractors in industries from construction to
• 26:25
  Speaker 1: education to mixed martial arts the Big economy, and fact
• 26:30
  Speaker 1: is a modern face of that modern face of that. Hey, Josh,
• 26:33
  Speaker 1: thanks so much for joining us. Josh Idols, Bloomberg Labor Reporter,
• 26:37
  Speaker 1: joining se Careet. Josh's stories featured in the new issue
• 26:41
  Speaker 1: of Bloomberg Business Week magazine, on newsstands and at Bloomberg
• 26:45
  Speaker 1: dot com. But clearly that is a key key issue
• 26:48
  Speaker 1: for the gig economy employees for contractors. This thanks for
• 26:54
  Speaker 1: listening to the Bloomberg Markets podcast. You can subscribe and
• 26:58
  Speaker 1: listen to interviews of Apple podcast, Asks or whatever podcast
• 27:01
  Speaker 1: platform you prefer I'm Matt Miller, I'm on Twitter at
• 27:05
  Speaker 1: Matt Miller three. And I'm fall Sweeney. I'm on Twitter
• 27:09
  Speaker 1: at pt Sweeney. Before the podcast, you can always catch
• 27:11
  Speaker 1: us worldwide at Bloomberg Radio