A Crypto Whipsaw Tests Investors

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Global News. Talk about a wicked wild ride bitcoin today, Tim, Yeah, whip sigh. I mean it was down down just north of thirty thousand dollars at one point round nine o'clock this morning, shooting back up to dollars just a little later in the day. If you bought at the lows and just kind of wrote

it up today, not a bad day. Hey, listen. It's something I talked about big time with Arc invest Kathy Wood. We're going to hear from her a little bit later on on our show at the top of the hour. Meantime, looking at the crypto market always for us. Mike mclogan Commodity Strategies at Bloomberg Intelligence, sitting right now to me in our interactive broker studio. Where do we begin? How do we tell this story in a smart way? Well, your interview with Kathy nailed it. I thought, Stowe, this

is a big picture theme. Let the traders beat themselves up and this is what's happening, and stops the speculators. And this one lesson I learned in trading bits. I'm doing my mini violin right now. There's just no no, you know, hey, this is what happens. You hit the stops, you flush out the speculators, and you create great levels.

And I think that's what happens. Sure, Bitcoin got little bit too expensive, and I think thing we're going to look at from the future is dose coin marked the peak and all the froth and markets and now we're getting back to good support in bitcoin. But let's look forward fundamentally. To me, this is a really billion the blocks for fundamental support and bitcoin. I E. What's happening. We're seeing every yes of today is down exceptional one gold and why because it got too cheap? And what

I think it's happening now. Is the market's looking forward? Is this finally a sign of froth coming out of the stock market. If that's the case, that means much more fetal reserve easing, much more stimulus, which supports golden bitcoin and bonds. And I think that's market's gonna be looking forward to. Like, how do you explain just the massive drop that we saw this morning? There were two

of them. One happened during the seven o'clock hour and what happened going into the nine o'clock hour Wall Street time. I means it realistic to think that that could have been some sort of whale offloading positions. Oh sure, well it's it's it's called hitting stops. And as far as who's doing it, I try not to go there because I in my whole career I've noticed people trying to beat themselves up and figure out executive it is, and

by time you figure it out, it's too late. So I fully expect it was just the massive, the the lleged, the the overweighted longs getting heading stops. As far as a whale, most I sense from these whales is they don't really care, they don't sell, they don't buy they just told and that's the big picture one. So people usually claim there's just too few walts, but a lot of times these are exchanges holding wall almo for all

their customers because it's trading around. One criticism of a bitcoin has been it's very highly concentrated among a small number of people, less so than do you hear that hits the tape and it gets readership and people like to hear. But the fact is one exchange might have one wall with dozens, I mean hundreds and maybe thousands of customers in that one wallets, so it's different. One exchange could be one and there are tons of people

trading it out, so that's I think less important. And then the biggest wall in the world is so Tosi Nakamoto Nakamoto or that's so called pseudonym, and he has a million coins that we understand that I have never traded, so that would be something to look forward to. But a lot of times what I see in this is a good way to create demand in the market is reduced prices, and that's what I think we just did.

We're tested that we got to their thirty about where we ended last year, and I think this quick bounce today is going to bring out Okay, is this the global digital reserve asset in the world going digital? I think the market are gonna say yes it is. What's my risk of not holding? Universes are doing more of the same. And by the way, we've seen these kind of things for ten years. It's you know, it's keep

surviving the thousand cuts. This is just another cut. What about what we got from China this morning, kind of pushing back on global currencies. Dude, what's the role of that? It's it's of the new cold ward I think brewing first of all, and it's not the world completely. And what's right in the center of that digital reserve assets.

So I'll start with the fact the digitalization of money is enhancing dollar dominance on the world's gap, is driving China nuts because they hate the doll and also that we have an authoritarian, dictatorial economy that is not driven by market forces. They can't catch up. That's why they have to steal intellectual party. But the news isn't really knew it just tweaked, tweaked. What you know was market was ready to hit stops. The key thing that to

see to remember in this space. If the US does nothing, the most widely traded cryptocurrency on the planet is tethered. It's double the volume today a bitcoin, that's a digital doll which trades on Etherium platform, which enhances the value theorum. And that's what's happening if the US does nothing. By the way, the toothpaste is already out of the bottle. In the US. We're not going to cramp down like China.

But China has to because they need to prevent their citizens from getting access to the Internet and getting access to outside of their currency. They have to. Versus the US, we're free company country. So to me, this is part of that that Cold war kicking in and the US is already winning. Still a commodity, Oh no, I so I look at are you changing because you've called it a commodity, right? But bitcoin? Yeah? No, I look at bitcoin is a collectible. Yes, it's a collective collect it's

oh yes, clearly. So that's a key difference about bitcoin and every other asset. The rules of economics still favorite bitcoin is. You know, the man is still increasing and the supplies clearly declining. By code that is incorruptible, there's not much you can do about that. Now, that's a key difference with the whole broad space, which I'll be published on tomorrow. The amount of coins on coin market

camp dot com is approaching ten thousand. That might have hit the number of excess froth in the space, you know, unlimited supply, ease of entry. Okay, an index, Bloomberg Galaxy cryptol index will have a survivor bias. But Bitcoin is the one that's outside of space. It represents the macro digital gold and everything else are just speculative ten seconds. Are we all going to be dealing in some kind

of cryptocurrency at some point in our life? Absolutely, unless it can't expect that trend to stop, it is probably going to axel right, and if we west in Tesla or some other companies were already in it, right, Tesla's down in here. Bitcoins up on the year. Thank you, You're welcome. Claily, appreciate it. Mike mclogan, Commodity strategies at Bloomberg Intelligence in our interactive broker student. Right, you got to have I'm done. We know everything about bitcoinwa home

now this is Bloomberg. I want to talk a bit about the virus because New York State which we know was the original US epicenter of the pandemic, reporting tim it's lowest infection rates in September, but in India daily deaths reached a record. They did their report new infections declining from the highs of early made. That's good to hear, but they still have a long way to go. Different

stories playing out around the world. Keeping track globally, cases have passed a hundred and sixty four point two million deaths as have exceeded at three point four million. More than one point fifty one billion doses have been given of the COVID vaccine. So let's get into it with Dr Mario Ramirez, an emergency medicine doctor and entrepreneur managing director at the nonprofit Opportunity Labs. They are building opportunities

for children. He, by the way, was the Pandemic and Emerging Threats Coordinator at Health and Human Services during the Obama administration. Dr Ramirez on the phone from Washington, d C. Nice to have you here with us. What do you think is the COVID or vaccine headline that we all need to be paying attention to right now? Well, so I think there's two things, Carol, Thanks for having me by.

So the first you know that you mentioned the top of the hour is that you know, the pandemic here in the United States is certainly at a different place than the rest of the world, where the situation is still very tenuous. UM. But I think the top line here domestically is that while overall things are going quite well,

there is a lot of heterogeneity in the information. Um. So, we just got some important information from JOHNS Hopkins, and we're actually seeing a lot of variability and how the vaccine is rolling out, And because of that, we're actually

seeing pretty impressive differences in coronavirus case counts in those areas. So, for example, we have seven states where vaccination rates are greater than se the population, and case counts are ten percent less compared to the national average in those states. But intense states where vaccination rates are less than of the population, their counts are higher than the average. And so what we're starting to see really is increased fragmentation.

That really brings home the point of how important it is that we try to access those people are really hesitant about getting vaccinated. So to what extent do you think that opening up and telling those people who have been vaccinated, that they don't have to wear masks and they can go back to life as as normal before the pandemic. To what extent do you think that actually helps get hesitant people to get vaccinated. So my hope

is that it is it is helpful. You know, of course, and many people have talked about this, is that we do not have a good verification mechanism. Uh. You know, we certainly know from game theory and lots of real world examples, is that when you when you don't have a way to verify uh, you know, someone's story, that people have a tendency to cheat, which is what my big concern is. Um. Certainly, I think if we continue to see regional fragmentation of cases, that will create a

larger incent for people to get vaccinated. But the other thing that I think has a key role here. As we start to open more businesses up and you know, more entertainment venues, there becomes I think a greater need for testing. And this is something that you know I've advocated for as we start to reopen, particularly on the part of uh, you know, employers in groups like we act Alliance of Stress. The importance as we start to

reopen these places up. Testing and surveillance becomes that much more important so that we can have a good handle on how these vaccinations are working in the real world. Yeah, it's you know, it's interesting as we make progress. And I was just talking with a colleague. You know, it feels good, and we know that if you've got the vaccine, if you do even still get COVID, you're you're in a much better position than if you didn't have the vaccine. But yet we're still learning a lot. Is that fair

to say? I think that's true. I mean, the CDC certainly felt comfortable, you know, with the data that they've seen so far that these vaccines are working well in the real world. But the other piece of that writing that we can sinue to collect information and we continue

to learn. And one of the big pieces that I think we still need to learn is how long lasting or how durable the vaccines are, right, And so I think today we've heard Dr Fauci say that, you know, he believes that booster is going to be necessary within about twelve months after your first dose. That's something that we still need to learn a lot more about. And I think, you know again that stressed the point of continuing to test, and testing rates of course have fallen off.

But as we get into the fall in the winter again and we start to get a sense for when that durability is falling off, testing is going to be that much more important. Very briefly, is there any indication that variants that have developed around the world can can break through these vaccines twenty seconds? So far? Not so much.

We have seen good efficacy of the Fisor vaccine in particular, and similar reporting from Maderna against all of the variants that we're tracking, both in Brazil, South Africa, UH and India as well. Still with US is Dr Mario Ramirez, Emergency Physician maaging director at Opportunity Labs, former pandemic an Emerging Threats coordinator at HHS during the Obama administration. Station during UH, still with us on the phone from Washington.

I'm rushing because I want to get to you because one of the things we want to ask you is a headline crossed about no masks for vaccinated at Amazon staff. That's gonna think go into effect next week. We at our office UH don't have to wear masks. UH, And increasingly we're seeing that dr mrs. Are you comfortable with that as people kind of go back to quote unquote

normal and take off the mask, is it okay? Well, so I'll say, like a lot of people, the CDC recommendations caught me a little bit off guard, you know, And I did think that masks were going to be the last thing to come down. Um. But I have read the data that drove the CDC's recommendations, and I think the science is certainly sound. Uh. You know, the science certainly suggests these vaccines have good efficacy against the different variants that are out there circulating, and we're continuing

to see improvement across all of the metrics. Uh. And so I think, you know, again, the point of where in the asks and distancing was to get us to a place where we could adequately take care of patients. And I think we have approach that point. And so it's time to give folks a chance to see that real life is coming back. And so I think it's

a perverse to give us try. Yeah, and we only about thirty seconds left, but there's still so many people who don't necessarily feel comfortable with that doctor, even if they have been vaccinated. Sure, and I you know, I think that's okay. Um. You know, like all things in this pandemic, it is a learning process, and I think, um, it's important for people to observe. What happens with the case counts is more and more people take off their

masks and develop their own sense of comfort. For the last year and a half, we've been stressing to people how important it is to wear masks and how important it is to make sure you're staying distant, and so I think we just need to give people space to feel comfortable taking down their masks when they think it's appropriate. I certainly don't think it harms anyone to wear a mask, and so I think if it takes a little while longer for some people to get comfortable with that, that's okay. Listen,

thank you so much for your time. We look forward to catching up with you again in the future. Dr Mario Ramirez, emergency doctor, imagining director at Opportunity Labs, joining us on the phone from Washington, d Seech. So we've been talking all week long about the how to issue Bloomberg Business Week. It is out. There's so many varied in informative, informative pieces of advice in the magazine, so

I highly recommend you check it out. But there's another story we wanted to bring to your attention in the new issue. It is this week's Remarks Tim. It's about how China is winning the race to vaccinate the world, at least for now ye. Joining us now in the studio is Joe Webber, editor Bloomberg Business Week, and joining us on the phone is John Lawerman, editor at Bloomberg, the editor of this piece. China is winning the race

to vaccinate the world? Joel Um, what is the opportunity that China has to use so called soft power when it comes to vaccinating the developing world? That that is a really interesting term to use, because this is ultimately a diplomatic weapon of sorts, or tool, let's call it, of who gets who's vaccine? And KOVACS is sort of the West version of of a distribution mechanism that can

get vaccines out in the world. And we're not talking about the America is um the United States of America so much as Africa, South America, Southeast Asia, a lot of places that don't have the science or resources to get their own version of it. And what we're now seeing is that the Chinese vaccines are basically a huge export export tool, and they are flooding the zone and

basically being an alternative to what US soft power looks like. So, so, John, how is that beginning to play out around the world now that the WHO has uh, you know, given a stamp for one of the two Chinese vaccines. Yeah, hi, thanks for having me so, um, how so I think we're still we're still in the very early stages of this, you know, this is this isn't maybe round one around one and a half of a of a battle or of a uh you know, a player that's going to

take quite some time to play out, you know. Shot. China has shipped out what is it, two fifty six million doses of vaccine to other countries. Now the US has, um, you know, committed to ship what is it, eighty millions so far, and I don't know, um, whether they've actually made any of those donations yet. So China has at the same time that they're doing this there they are extracting some diplomatic concessions from the countries that they're going to.

Now they The interesting thing about the WHOSE clearance of the of the Sinal Farm vaccine one of the two government underwritten vaccine from China is uh that um uh that vaccine um is uh sorry, UM, it's it's well there. I think there are a lot of wild cards here, John and and and one element that really struck me with this what was really two things. One the way that that it's described as you know, we don't even know how how efficacious the vaccine is, especially in the

long run. But then also this this kind of vaccine diplomacy is quote clearly of the hardball variety. To take me through what that means. Well, uh, so as they said, they're extracting concessions from these countries at the same time, Um, they warned Bangladesh uh and some other countries um after they had made um, after they've made the vaccine deals, um with China, not to engage with the US, not

to engage with other countries that were offering vaccine. So um they've also uh cokes countries to express or recourage them to express the port to the one China for the you know, the non not recognizing Taiwan. So they moved made moves like this. Um. So it's fair to say strings are attached. Yeah, yeah, yeah, there are definitely

strings attacks. It reminds me of you know, all the moves that China has done in helping infrastructure and in the emerging parts of the world right initiative exactly, and then also having access to commodities, right like developing these relationships and basically making these emerging economies and countries beholden to China. Specifically India, John has got to be watching very closely. I mean, India is the place where so

many pharmaceuticals are manufactured. Yeah, and um, for India is an exporting vaccine right now, India was really making any you know this, This was not a diplomatic tool for them at all. I think, you know, perhaps it may have created some favors for them to export vaccines, but these were not their own vaccines. These have to China's own vaccines, you know, domestically produced, domestic and domestically developed. So um, you know these are the vaccines, um from India.

There was one domestically developed vaccine, but uh, the other was from Astra Zenica, so that's where all that technology came from. I was by far the more favorite vaccine. But in any case, um, yeah, I think we're gonna have to be you know, keeping very close h and Indian. Now it looks like we won't be seeing vaccine being exported from India until the end of the year, and India is one of it had been at least one of the major sources of vaccine or lower middle income countries.

You know. The other thing John that I think a lot of people are trying to understand it been all this conflicting information about how efficus the Chinese vaccines are. How are you making sense of that, especially in light of you know, this being a diplomatic tool, but one that you know, people in various countries might not want. Yeah, So,

I mean that's really interesting question. I mean, the the uh, the Signifiing vaccine that's been authorized by the w h O has uh, you know, actually a pretty good numbers, pretty good ethicacine umbers. The other vaccine, the sign of Act vaccine that is yet to be authorized by the w h O. And that's actually the point is gonna make earlier that that has uh lower efficacy numbers, at

least in some of the trials. And so that's a concern because you know, as we we've written about seemed um countries like to say shells that when these vaccines get distributed, there's a possibility that although maybe you're going to see reduction the hospitalizations in depth, because that's what these vaccines do, that's what they're tested for, right, but you might not be able to actually um uh stop

the spread of the virus in the community. So in other words, you you don't um you don't get the same benefits out of it in terms of like feelings of public safety or people being able to take off their mask or um, you know, just stopping the virus from spreading uh locally, So you might not be able to get out of the pandemic quite as quickly that if this data, you know, there's there's a lot of questions you still need to be answered, Like for example,

in the Stay Sells, we don't know you know exactly, there could be other variance or something. It might not be the vaccine. That the that the issue the stay sells, I think is one that everyone's trying to understand for sure, since there's seems to be um you know a lot of people who have had a vaccine there, but but how many do we think of had the Chinese vaccine there? And how how does that play into what what's happening in the country, and John really quickly twenty seconds. Yeah.

I don't know exactly how that breaks out, but I think that w RHO is actually starting to look at this issue very closely. And I think that you know, they're they're going to look at looking at uh, you know, the rates, terms, the method of vaccination, etcetera. We're still finding so much out as we go. John Lawronman, editor at Bloomberg in Boston, Til Weber, Editor Bloomberg Business Week. In our interactive Broker studio, check out the remarks journal yaw,

but you let me drive? No, no, no, rume Honney, please, I'll do the right gravel. I want to drive, just drive by the question. This is the drive to the globe. Give me thanks. We'll try us to dawn on Bluebird Radio. All right, just about ten and a half minutes left in today's trading session. It has been quite a day and I feel like there's been a couple of major

themes today. Certainly cryptocurrencies, Tim, no doubt about that, watching the equity trade and watching some selling pressure earlier on. We're off our loads of the day. And then you had the fed minutes yeah, the Fed minutes. Really, I think the big takeaway from from those was well the timing of them and the fact they came, that the meeting was actually before the CPI day that we got last weekend. Also the brutal jobs are for it for

April um. But there was concerned that inflation, at least in the short term could be pushed up by supply constraints and even maybe favoring some taper talk and upcoming meetings. And that was before, as you said, those surprising numbers. All right, let's get to it with Ernesto Ramos, the Chief Investment Officer of the US at Demo Global Asset Manager BMO Global Asset Management, on the phone from Chicago. So, Ernesto, good to have you here with Tim and myself on

a daylight today. What is it that you ultimately, if you had a major institutional investor talking to you and say what do I need to know about a day like today, what do you say to them? Because you can have your pick of major stories. I think I think the inflation story is show only something that we're paying a lot of attention to. Because there's the young and the young you can get the strong inflation number. You see all of the things that are moving hired,

like commodities and and uh and uh. But then you also have the week labor labor market numbers, and so we're but we're playing a lot of attention to inflation because even even at the grocery store level, at the clothing level, my my wife is a great indicator, tells me that things are really moving higher and have been moving higher for the last few months. So we're paying a lot of close attention to inflation. But but the real theme that it's important here is that uh, stay

focused and not over paying for stocks. And right now you saw the junk rally or the junkier part of the market that was the value market airlines, hotels and all of that go up very substantially. But now it's the market is shifting towards rewarding what I call quality value companies that are profitable, that had good business models

that haven't been are trading a significant discourse. For example, an auto zone which trades about eighteen times earnings but it's been profitable forever, has bobbed back of their stock in the last over The last player, is it really fun to intels it's fundamental their closest phenomenal, I mean it's steady growth. It's not phenomenal growth that in there. They're going growing thirty percent of a year. But but look at all the trends in the market. Used car

market is going ballistic here. The presence of used cars are going higher, which means that demand is very strong. They obviously cared to that market. New cars are suffering from the semiconductor shortage, so there's not as many new cars. People want cars because they want to get back to driving after COVID, so they're going and buying used cars and they're going to benefit from that. So all kinds of trends are in their favor. And except they're not

a sexy stock. They're not a thematic stock, and so people are not paying a lot of attention, but they're they're do you look at their chart, they're having a little weakness right now, but they have been moving higher pretty steadily. So AutoZone one, I'm giving another example of one of these qualities, one of these quality value stocks

that sort of fits fit's your definition. Well, the financials, I mean they look at a company, I mean like City Group and now the financials are finally having their day in the sun. But I mean city group training at less than time ten times earnings JP Morgan not not as quite as cheap, but they're they're still doing great because in a higher inflation environment, with the where the feed is anchoring the low end of the curve down, their net interest margin with the steatness of the curve

goes through the roofs. They do very well. Economic activity kicking up that's also very vaorable to them. And so they're in the right spot. And you name the financial the big the big bank financial and they're they're going to be fine. Um Waste Management is another company's not as cheap, but very steady, very good, high quality, profitable

company just deadly going up. And so all these companies that are not in the sexy part of the market, the growth part of the market that uh, you know, the high tech and whatnot part of the market, this is what we believe is the right time for them to to to take in the market. If I may jump in for a second, for how long do you do that trade? Because don't I want to want to ultimately as an investor be in the growth area of

the market. If I believe with conviction that the growth area of the market is where the growth will be for years, even if it gets a little heady. Now do I really care what happens over the next six or twelve months? Do I? What I really care is where we are five years from now? Absolutely, And the question is do you how much are you willing to pay for that growth? And that's there's nothing wrong with this. You know, the Microsofts of the worldly Apple so the world,

there's nothing absolutely wrong with them, U Tesla. It's incredibly thematic, it's incredibly based on the personality of one man, and she's a genius and doubtedly, but but there priced beyond the unbelief. So you want to own those tech companies, But right now they're priced too expensively for us. So there's there's a price for everything. And right now we think that a lot of those tech socks are priced beyond what you would want to pay for them. So

focus right now on what's under priced. And this quality is cheap right now, or what I call uh quality value. So focus on that right now. There will be a time after we have a more a continued correction in technology where technology will become the right place to be. I'm not saying sell out of all of your technology.

By the way, you want to have allocation to every corner of the market, but you want to be shifting money right now more to the quality value part of the market at the expense of the more expensive growth part of the market. I mean, I know you just ket Cathy would the kinds of company shels we think are not forised to do so well for the next

few months because of evaluation. Mostly she's of course got her five year time horizon for for those space companies, and and you know that's an expectation that she sets. It seems like very clearly every time we talk to her, I, Ernest, I want to go back to what you said about inflation, because you know that is that is like over the last two weeks, this is something that we've been talking about. It no, not at all well, especially with the data that we got last week. I think it really it

obviously really scared a lot of people. Um and I do wonder to what extent you think it And I hate to use this term, but transitory. Uh, personally, we don't think it's transitory. We're thinking that it's going to be stickier than that, because once you get pricing power, it's hard to go back. And as long as the demand is that, we don't see any slack in the demand. I mean, I think the jobs numbers was weak, but

it was weak for good reasons. A lot of people are just not willing to go back to work for whatever reason, health concerns, or they're getting paid to stay home, but nicely and and and you see it in Chicago

where we live. We we there's a lot of people and a gutally that are looking for workers to come to their small businesses that are starting to reopen, and they can't find people to come and work out their little stores and little shops because whatever you want to call it being paid to stay at home or or health pards whatever, But there is a very labor market. So um, that's that's part of the story there. And so but we think the economy is in a very

strong track right now. We're probably going to hit over timper Sentol second quarter g d P grow. So so we're on a strong teg Now there are pockets of concern, but we have to be watchful, all right, Ernesta, We're gonna leave it on that note, Thanks so much for your time today. Interest O Ramos, the chief investment Officer of the US at Demo Global Asset Management, on the phone from Chicago with us so watching the markets quite a day. Crypto was a story the Fed minutes where

a story, Rita was a story. Uh, it's really going to set us well for you know, tomorrow's trade to see where we go. We are focusing though and getting near our highs of the day when it comes to the equity trade. Tim Yeah, we certainly are quite the difference that just a few hours makes with the day like today exactly. If you blank, you kind of missed something.

Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen into our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube search Bloomberg Global News m