Bitcoin Takes Another Tumble

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. So we're gonna dig into crypto in the next thirty minutes here on Bloomberg Business Week. First up, the CEO of Colonial Pipeline, Joseph Blown. He was testifying for the Senate Homeland Security Committee today. He apologize big time for the ransomware attack that shuttered the

nation's largest fuel pipeline. We know it paralyzed the East coast flow of gasoline, diesel, and jet field check it out. It was the hardest decision I've made in my thirty nine years in the energy industry, and I know how critical our pipeline is to the country, and I put the interests of the country first. I kept the information closely held because we were concerned about operational safety and security, and we wanted to stay focused on getting the pipeline

back up and running. I believe with all my heart it was the right choice to make a major maya colpa there. Of course, that's the Colonial Pipeline CEO Joseph Blount testifying earlier today before the Senate Homeland Security Security Committee. Let's get right into it with card cam Rotra cybersecurity porter here at Bloomberg News joining us on the line from San Francisco, Cardike, what do we learn from the CEO of Colonial Pipeline today about the ransomware attack that

we didn't know? So? One of the biggest details about this hack, something that he disclosed today but also disclosed to us UH late last week, is that the actual attack was the result of a stolen password for a an account into a VPN that had been hacked and and put on the dark web months at So it was it was not a complex campaign. There wasn't a you know, a solar wind type of vulnerability here that

resulted in this UH devastating attack. It was a very simple, uh, loss of a password that resulted in this exploitation and ultimately the four point four million dollar ransom payment that we all learned yesterday, much of which was caused that. Okay, so I have to just just jump in here, Carter K. Because I know you're a cybersecurity reporter. I assume that you know how to keep your accounts secure at least as as we can as consumers. Two factor authentication, Can

we talk about that for a second. Yeah, I mean there was no multi factor authentication on that particular VPN, that virtual private network, So that is that is sort of ground zero for security right now. Enterprise networks, corporate networks, your personal accounts, you should turn on multi factor authentication. It means that a single password is not enough for

you to log into your device. You need a one time password or a second form of verification to ensure that you are who you are when you're logging in. It'll keep everyone a lot safer, all right. But now we've got blockchain explorers. We're talking about this a lot, right, A crypto search engine essentially to quite literally follow the money of these things. Does this mean we now have the tools to kind of investigate any future cyber attacks

here that require ransomware sort of. Uh, it sort of means that, so, yes, the technology has existed to track some currencies in uh blockchain. Bitcoin for sure can be tracked, especially by law enforcement and in some private company that specialized in this UM. So if you know exactly how much was paid, be it a criminal transaction or you sending money to your family member, you can go and

follow the money, literally follow the money. Uh. And that's what law enforcement did after UM Colonial Pipeline paid dark Side, a ransomware group four point four million dollars or seventy five bit coin UM about a month ago. They followed the money and we're able to see exactly where it was parked in a digital crypto wallet and take some of it back UM. And that's a big deal, and that's something that law enforcement has done in the past.

But what unique here is that is that the actual victim Colonial Pipeline disclosed the fact that they had been hacked, and that does not happen very often. Victims of ransomware don't want the public to know they've been compromised because of a variety of security issues. Board issues, DOT price issues, and so they keep it quiet. In this case, Colonial came out and said it. They got the help of

the FBI, they got some of their money back. So does this undermine the crypt a world as we've come to know it, at least the kind of illegitimate or you know where there might be UM cyber attacks and ransomware incidents. I don't know undermine might be strong, But I think there's definitely an issue about the economic backbone of cybercrime, and that is cryptocurrency. For sure, there are regulation,

not just in the US, but but in Europe. Know your Consumer regulations that would require or do require UM people on exchanges to share some details about who you are. They're just really administered. If one knows who is investing or buying cryptocurrency at a certain period of time, that would make it easier for law enforcement to follow criminals

who are using it to commit cybercrime. I think the fundamental issue here isn't the use of cryptocurrency to promote cybercrime, and the fact that cybercriminals have been able to target poorly protected networks for years and have made off like gangbusters for quite some time and are getting more brazen

in their campaign. Well, Cardig, just in the last thirty seconds, what are you hearing in your reporting, seeing your reporting hearing from sources about the way that cybersecurity companies and CSOs are are reacting to this in the last month and how they're preparing for the next one. Well, I think the reality is that what we're seeing now is what these security companies have been dealing with four years.

What's changed is that the Colonial Pipeline had allowed the general public to understand what the state when gas supplies for the for the Northeast were cut off for a period of time, finally resonated with the public and now we know what's happening. Hopefully utilities, the government companies are going to prioritize it's going for and if you've got crypto, a bit of put it in a cold wallet. That's all we're gonna say. Cardig Marotra, thank you so much.

Cybersecurity reporter at Bloomberg News on the phone in San Francisco, mikel Cologne, Commodity Strategies at Bloomberg Intelligence. He's been on the road. He's back home here in our interactive broker studio. Hello there, Hello, Carol, you guys are the dream team. Okay, we're not gonna argue with that crypto though kind of not the dream currencies. It feels like today they're down

a lot of them. You were at this big event in Miami set the stage of what was going on, well, I like to describe it was like a woodstock because this kind of conference will never be repeated. It was the first big conference on the planet where there was no no masks. Everybody was there and the subject was quite unique Bitcoin. So it was that sense. There was packed wall the wall the main ex main presentation room.

They were pushing people away standing room only. And then when you walk into the ex you know the exhibit room where you have all the desks and everything you can right away you walk and you feel that heat of people and it's hard to get through, and then the lines of the man's room or forever. But there was that sentiment all about there's so many people doing good and so I get the thought, Okay, is this the peak or is this mainstream? In my sense, it's

more mainstream now we see it down today. But there were so many cool things that really came of it that we can touch on yeah, Well, what was it specifically about the conference that made you think it was more mainstream than peak? The people I met and with. So I walked by one of my friends and you're standing next to a guy who from a major accounting firm.

And then I met, you know, someone I knew who used to be in eats, and another one and another group I met were was a trust bank, so trust bank, a t F and account and then a lot of miners. I met with a lot of miners, and some of them are some of the most respectable people I've ever met.

One of them was a minor our Palli and then this he got into bitcoin only because he needed his his his position was providing power and energy and he needed the manager at flow and when it access power, he said, okay, I'll just use bitcoin to offset that. Mining Bitcoin offs as that excess power. So what what where does it go? In your view? We've had the conversations about it being a collectible, right, We've talked about that. So where does it go? Is it that we have

multiple cryptocurrencies, is it again about blockchain? Where do you see it all going? To me, that's the key thing in the conference. Bitcoin is a collectible and then there's ten thousand wantabes um there is oncoin market cap docount actually ten thousand three three at the moment um U last. So there you go, massive excess of supplyees of entry. Rules of economics does not favorite higher prices. But it's the number two that I liked, bringing up a lot

of THEORYM. You know, that's that lesson from Frederick Douglas. You say, just agitate, So I tried to agitate, and behind the scenes everybody mentioned the THEORYUM, so it was all positive about it. But on the stage it wasn't a good idea that mentioned because it was all about bitcoin. So that's the cool thing about bitcoin. It's you know, it's banking, the un bank, the key quota of the conferences. You know, two thirds of the people on the planet

don't have bank accounts. Of them have cell phones or smartphones and they can get bitcoin cryptos on their phones. And what's happening lately with this you know what you saw with this UM finding these funds from the colonial Like, that's nothing new, and I can dig into that. Like the MC of the conference he got into initially got into bitcoin from buying drugs, on Silk Road, which was busted by the FEDS because they just tracked the transactions. But this is what got all the attention when it

came to the cryptocurrency. Mike you you in your report outlining this event, summarizing this event, you asked the question what problem does bitcoin solve? What was the answer that you found in potentially how it changed at the conference? That was a question I have answered distinctly um with answer at first with I go straight to the British Museum. I think of the hack SNeW Hord's one of my favorite things that visit there. It's the largest horde of

precious metals I ever found on the planet. It was from the Roman times. It fixtured yourself and you're a Roman leader. It's collapsing. The locals don't like you need to get out and hide your wealth. They never came back to find it, and you figure, I figured he probably didn't moon that light at night, and he probably he had to do it himself. Because if you have a servant to it, a servant only to find it come back and tell someone else or kill you know

you kept it. But the point is it's set wealth to be able to transmit, transport and transact in wealth a certain amount of and put it stored someplace. Seven be able to do it on a cell phone or on a phone or in your head. It's never been possible in time. So that's the problem solves. It's banking the end bank. So here's the latest to leave you with. L Salvador has already said they might adopted as a currency. Know what's happening in al Savador in the last thirty

wars currency collapses. Yeah, if you have something to confce against, like bitcoin is like a goal, not like a dollar, then it can help solve that problem ten seconds. So at some point in our life, will we all have some bitcoin in our portfolio or what have your access to it? I think so? I think so because if we don't, it's kind of it's kind of like a digital version of gold and the world's going digital and

bitcoin is the first in that space. Oh my god, can you just stay for like another sixty minutes tomorrow to be continued. Mike mclowan commodity strategies of Bloomberg Intelligence in our Interactor Broker studio. So, as Tim and I mentioned at the top, it feels like our digital world continues to get poked at me, get reminded of the potential holes in that world. Doesn't it feel that way? And it's certainly felt that way at about six am

this morning. Well let's talk about that. Yeah, so, I as as anyone who is online earlier today trying to go to any common website might have found that they were unable to reach that website in New York tites like New York Times, our own Bloomberg dot com was affected by this. In fact, British government websites affected by it as well. Yeah, so let's get into this because vastly, which helps push data quickly around the Internet, so that it had fixed the issue that caused that global outage.

And I just think we're learning more about we just take so many things for granted. So let's bring in why we maybe shouldn't. Uh, Bloomberg Intelligence senior technology Analysmandie saying, uh, let's see what he has to say about He's back in our interactive broker's studio, So nice to have you in studio. So I just take it for granted. I go online if there's not a problem. I think there's something wrong with my phone or my service. This was different.

What happened, well, in this case, it was an outage. An outage could be caused by a number of reasons. It could be you know, them making a code change which they moved to production and that cause an outage, or it could be a breach, or you know, any sort of a cyber attack. I mean, we've seen so many different types of attacks that at this point it's hard to say that, you know, one company has a software that can protect you against all kinds of attacks,

and that is what we're seeing. Well, who is fastly? What is fastly? Do so fastly is like uh an interphase that lives between the website you're trying to access, Let's say a Pinterest or an Amazon dot com. So this is a cashing service that sits between the user when they requested you are and they basically authenticate the user to say this is not a box, this is a real user. This is somebody who's trying to access Amazon, and it's a legitimate user based on the IP address.

Now what they do is they have these data centers across the bold, so no matter where you are accessing website from, they will make sure you will have a good experience. Even if you are somewhere in Africa or you know, Brazil or any other country, you will have the same kind of experience because they have data centers across the globe, which is why these popular platforms use this cd AND service because of the cashing mechanism, the

security it keeps it secured well. I think one thing that was particularly striking about this morning's outage was the fact that it was so widespread. Why did it affect websites that range that don't normally go down, but range

from government websites to to media property. So the websites didn't go down, it's just that when you were trying to access the website, those websites weren't accessible because Fastly, like I said, sits between the time when you try to access a U r L to the time it hits the server off that end website beat an Amazon or a pinterest, So really the cashing field which is

why you couldn't access that website. But they were those those websites became inaccessible because they used Fastly as a client or they are clients of fastlies, right, they are clients so fastly, so an easy way for us to figure out who pays what cd N was to figure out who was down this morning. Yes, that's one way because these were the common thread was these all these websites for using Fastly as a cd N, which is

why these websites became inaccessible. I do wonder about redundancy here, and it's a question that I asked you earlier on picktape, because you do wonder if something like this can take down such a I shouldn't say takedown, make in unavailable such a large number of websites, why isn't there redundancy

in place? So the redundancy can be Amazon or Pinterest can say we want to use Fastly cd in as well as cloud Flare or any other CD AND provider because Fastly it is just one of the cd and providers. Having redundancy within Fastly isn't going to solve the problem Like Fastly obviously made a code change that affected their entire city and service. Having I think something that was

redundant wouldn't have helped in this case. Yes, as a large company you can use multiple cd and providers, but then at the end of the day you have to judge like them based on the up time. So in this particular case, if you are using one CD and which is fastly, you can't use an alternative seed and you can flip the switch, but it's gonna take time. You can't have to going at the same time, basically

what you're saying, So it's like a backup battery. You still have to make the switch will take time, so you will have a thirty second or one minute outage at least, you know, or if not half an hour, which was the case here. It doesn't feel like that this kind of incident an outage happens often, is that fair? So cloud Flare, which is a competitor or fastly, also had a similar outage last year and that was just a one off. So after that, no one cared about

hit a button wrong. Somebody was drinking coffee and like spilled it on a button. What these companies make changes through their code literally every week. Now, you don't know, because we're in an environment where you know, things are so interconnected that developers don't always realize what they're changing. And you know, in this case, I'm sure there will be a post mortem as to why that code was moved. It just seems like a major like I mean, these

are major sites. Yeah. I mean I'm not just saying because it's Bloomberg major site though too. But I mean we're talking about the UK government, We're talking about the like, these are things that people just expect to be well. I was watching the equity market reaction as this was playing out, and in pre market trading, Fastly was taken a serious tumble. I mean it was down four or five at a certain point. You look right now it's

higher by nine percent. What gives well in this case, I think there's an acknowledgement from the investors that, look, there are only three or four companies that provide the CD AND service, and today didn't we they're running critical infrastructure. So suddenly everyone knows about Fastly. Previously Fastly was in the background. It was a background service that no one really it wasn't a household name. Suddenly it is, and

it's providing a very important service. It reminds me of I remember the Bloomberg story years ago where people were like, if you were streaming I want to say, I don't know, Sopranos, what it was you were streaming such and such last night watching it? You were doing it through an Amazon server, like, all of a sudden, we learned about Amazon Web services in just the streaming world, and I feel like that's what's happening with fast because you said there's only three

or four companies that do this. Yes, yes, and look, at the end of the day, an outage can happen to any company. It happened to Netflix, it happened to Amazon.

I think in this case they fixed it quickly. I'm sure they will have to give a reason as to what happened, but most likely it will be a co change and investors will move on and they say they'll be like, yeah, this is important in deep We talked about the Colonial pipeline hacker earlier today on on this show, and I think a lot of people's brains went right to a hack. What does that say about the environment

that we're in right now. There's a lot of state sponsored activity going on, given you know what's going on with China, Russia, and these hackers are very sophisticated. They've got deep pockets, so they are trying to find every possible vulnerability point and we should know if there's no indication at this point that this was any sort of nefarious activity. This one, this one. Yeah, we don't know. I think the company will come out if there was

a hack, they will come out. Otherwise, you know, you will see a big tumble off this for the stock. Yeah right, I was just gonna say, we still don't know exactly what happened, or if again somebody's build a cup of coffee or you know, um fascinating world we're living in. Like I said, it just feels like our digital world. It's like poking holes or maybe we're getting a clearer picture of how it all works. Mandy, Thank

you explain it all so well. Mandyep saying, we senior tech industry analysta Bloomberg Intelligence in our interactive broker studio. Wild world. Huh, wild world. All right, it is time for the Bloomberg Big Take. It's on our radar Biogen's news tim of the FDA granting approval of the company's Alzheimer's drug, and it looks like, man, there's some longer term repercussions out of this. Yeah, there certainly are joining us now is Bob Langred, healthcare reporter for Bloomberg News.

He joins us on the phone from New Jersey. So, Bob, for people who haven't been following this space as closely as you have. Take us back a couple of years about the at that Biogen made on the drug that was approved by regulators yesterday. Yeah, so all you know, researchers have been trying to design a drug to a target the pathology behind Alzheimer's disease UH for decades, and

drug after drug after drug has failed. Uh. And Biogen's drug just two years ago it looked like just the latest in a long line of failure as they stopped their trials earlier they said they didn't look like they were going to work. And then eight months later they shocked everyone. Uh, they said they reanalyzed the data and looked like one of the trials that might have worked, and we're gonna apply for approval. Change our mind, We're gonna apply for approval, and we think we get this

drug approved. And then it's been super controversial since then, and uh, there's a lot of debate whether this drug works. But yesterday you have after they approved it, and then the Biogen priced at at a very high price. Uh, and now there's gonna be a lot of controversy going forward. Who should get this drug? And you know, whether it works at all. Well, and you've been covering this what

Biogen has been up to with Alzheimer's. You also, for those who are listeners and watchers of Bloomberg, you, Bob, have been keeping us up to speed when it has to do with COVID treatments and COVID vaccines. There's been many cover stories by Bob Langreth at Business Week magazine.

What's interesting though about Biogen, Bob, is that it seems to be as you, guys, and you specifically report that the approval, the FDA approval appears to signal a fundamental shift in the way the agency thinks about Alzheimer's disease and this could have lasting ramifications, as you report for other drugs, whether it's over at Eli, Lily Roche, and elsewhere. Yeah,

so uh. For for years, drug companies, including Biogen, have been trying to prove that a drug for all the timers would actually slow cognitive decline, and it's been really really hard to do. No one's really gotten clear evidence, and Biogen's drugs stare. Two trials didn't really prove it

either because one essentially failed to prove it. The other was still controversial because it was stopped earlier that it showed a very potentially very small effect and sing PD in his decline, and no one could agree, you know, what to make out of it. And so what happened is the FDA has faked a lot of pressure from patient groups, the Altimate Association to approve this drug. They're saying, there's nothing out there, we need something, We're willing to

take someone uncertainty, accepts some uncertainty. What they decided to do is they they essentially in a surprise, they did not rule on a make a verdict on whether this

drug STOW causes decline or not. Basically that they said, we're going to prove it because it removes these amyloid plaques in the brain, change some of this changes some of the fund fundamental pathology, and we think that that is likely to have a reasonable expectation that will do something good in terms of patient outcomes in the future, but we're gonna have to wait for future trials to prove that it does. So that was a big surprise.

That's a big change. It is a big change, and a reasonable expectation that it will actually have a positive result is not necessarily proof in a clinical trial that it does. And I wonder how this changes the way that the FDA approves therapies moving forward, especially at a time where there's so much skepticism around federal agencies and the wake of what happened with COVID. Yeah, so this, this, uh, this,

this approval is going to be very controversial. Uh. You know, some people are already saying that that was a mistake. Uh and uh, this could you know, I could set a precedent for other kind of neurological disease, other neurological drugs and other drugs are Alzheimers, because now they've said for Alzheimers, you don't have to prove that the drugs

corgan's declined to get to get on the market. You just have to show some evidence that does something to brain fatholity, even though there's a great controversy whether that brain pathology, how well it correlates with Corton has decline. Right,

that's it's a big deal. Right, So you know, not a cure, we get that, right, But maybe in some ways, like and you do wonder if the f d A is kind of allowing a little bit of wiggle room with some of these things because maybe there's a little bit improvement or maybe there's a lot of improvement, you know, or at least stemming the degradation, right, Bob, you know in some patients. Yeah, So the way of think about this,

this is not a drug. Even in the absolute best case under the you know, the optimistic projection, it will not stop the decline. People are still declining steadily, but maybe maybe maybe it slows a little bit. Uh. And that's what they're saying that that's what the Alzheimer's patients that I talked to one they saying, you know, there's nothing out there. We want something of this, you know, may slow the decline a little bit, and this is

good enough. We're willing to take someone uncertainty to improve it now. And that's what happened. It's very controversial and very interesting. But it's funny because there's I'm going to talk about a stock gain or later um cass of A Sciences and they've had no products in the market for twenty years, but apparently they're working on an early stage Alzheimer's drug and I think are getting a bit of a pop because of what happened, specifically with Biogen's drugs.

So it is making everybody look specially when it comes to Alzheimer's, Bob, a little bit differently at the space and in terms of treatments. Yeah, other stocks starting up Ellally went up yesterday because they have a similar Alzheimer's drug and just going into phase three trials. As they went up on the prospects they might be able to get an approval sooner. So so no, no question there is, uh, you know our potential lentifications you know across the industry, Bob,

fifty dollars for a course of this. It's just a massive amount of money. Uh, what typically happens with the drug price? Does it go down after a few years? Just got about thirty seconds here. Now the drive prices I mean as far as as far as as far as we can tell, basically never go down. They promised not to raise it. But what I can say is at least a million people in the US it could theoretically qualifier the drug costs fifty dollars a year. Do

that math if everyone in that that theoretical group gets it. Wow, and you talk about expensive brain scans and then to administer the infusions, it's not an inexpensive process. Hey Bob, though, um, thanks for just digging deeper into this to explain why. Though it has been so significant, we've certainly seen the stock pop yesterday, a little bit of a pullback in today's trade when it comes to Biogen, but definitely watching it. Bob Lane Grew healthcare reporter up Bloomberg News on the

phone in New Jersey, roam a journal. Yeah, but you let me drive? Oh no, no, no, he's home, honey, Please, I'll do the riding drivel. I want to drive, just drive, baby, the questions trying. This is the drive to the Globe commune. Thanks, we'll drying us the dawn on Bloomberg Radio. Alright, TikTok everyone, thirteen, no, not thirteen. Ten and a half minutes left. I was adding a few minutes onto the trading day. Ten and a half minutes left in today's trading day. It's kind

of a kind of day, not really going anywhere. So let's see what Eric Jackson has to say. He's founder and president of E m J Capital, to Toronto based hedge fund, and he joins us on the phone in Toronto. So good to have you back. How are you doing well? How are you Carol doing well? Tim and I are hanging in there. The world's reopening. We're trying to make sense of here we are. We've got us stocks near record You've got if you look at the global market industries,

we're hovering near records. How do you see this market environment right now? Well, you guys are just talking about inflation, and obviously everyone's waiting for a few you know, more shoes to drop and to kind of better get a

sense of where things are going. But if you look in the tech world specifically, we've had such a reduction in a lot of the multiples across the tech universe that you're really being um, you know, you're able to get into a lot of names in tech at you know, oftentimes pre pandemic multiples, so you're getting some protection no matter kind of what happens through the through the rest of the year, with with all the inflation data that comes.

So that's not that's not across the board. I think a lot of the staff stocks are still expensive, but a lot of things are attractive, like like um, well in general, you know, I think the fang names are are definitely uh, they've sort of been in a one year trade trading range UH, and there are multiples are extremely low. I think I think they are all attractive. I think UM for me, there are a few names that I like. In particular, there's one stock which I

which I recently got into called Magnite. UH tooker as m g n I and basically they serve up the ads that go into connected TVs, which people are increasingly turning to. UM. It's not just a Facebook in Google world in terms of serving ads when you turn on Roku or your Samsung TV or whatever. And so a lot of people are familiar with a company called the Trade Desk which does serves the same kind of ads from the demand side, meaning they work with the agencies.

But Magnite is a sort of an amalgam of three different companies that have been has been put put together over the last year that works on the supply side, and it trades that half the multiple UM. Eric you've mentioned shoe dropping, other shoes dropping when it comes to inflation, what would those be? Well, you know, obviously you know we're speaking on a day when the ten years dropped. UM. That's been you know, met, been met with a side

of relief. I think by a lot of tech investors. Um. You know, we got ourselves all you know, wound up over the last month or so um for you know, with fears that you know that the tenure was just going to bust through. Uh, you know, two new highs and above two percent, all this kind of stuff because of some of the hot inflation numbers that we're seeing. So you know, in the in the meantime, you know, lumbers cooled off, some of the commodities are cooled off.

You know, that's good for tech obviously in these growth stocks where you know you're you're you're looking out multiple years and so forth. UM. And so we we just need to continue to monitor, you know, where things go from here. Is it really transitory inflation data? Um? Or is it something more permanent? Hey, listen, One thing I want to ask you is, let's cap on McCormick and rich Or have a story on the Bloomberg and we're gonna talk about it with our TV team and just

a moment on beyond the Bell. The economists who helped change the way the FED assesses long run inflation expectations says their current level means the central Bank needs to start laying the groundwork for shrinking its massive bond buying program. And this is specifically we're talking about Brian Sack. He was at the FED Board of Governors almost two decades ago, and he was head of Monetary and Financial Market Analysis. He championed the use of a forward measure of inflation

expectations to help guide policy. He's now over at d SHAW. He says, the so called five year, five year forward break even inflation rate has climbed to a level where further increases would be problematic for this central bank. So when you have someone like that who really understands this, you know, and and you know, created a tool used by the FED to predict inflation or at least get an idea of where it's going. And when he says maybe it's time that the FED changes policy, how do

you factor something like that in. Here's a smart guy who understands it, understands what's going on. Do you say, wait, this is a different market environment or what? Well? I mean, I think one of the interesting things, you go back a couple of weeks ago, when people were really worried

about inflation across the equity universe. I think, uh, you know, you know, you could say that, you know, they feed had given this language that they were going to stay low for so long, and um, I think the concern was that, you know, are are they really out of step with other central banks around the world who are starting to taper, And I you know, what's what's been interesting is that, um, you know that that hasn't really changed, but there's been a couple of statements that have come

out that have sort of talked about their openness to tapering. And I think just the fact that that has gone out there, along with you know, softer commodity inflation and numbers and so forth, I think that's given people a lot of comfort that, you know, the Fed's not out

of touch. They sort of see what's going on. They're going to taper if they need to later this year, and I think part of the reasons behind them the tenure dropping has just been a comfort with that, with the fact that they're not you know, that they don't have their head in the stands. So, so, what happens if we do start to see signs of inflation that you think isn't necessarily transitory, what do you do specifically to get defensive? Well, I mean inflation is not good

for for all any any stock really. I mean people like to say, you know, get defensive, do this, do that, and go into value. I mean all stocks will go down if we're truly you know, back into this you know, um permanent inflation era. So you know, I don't think any of us want to see that, um you know. And and there's obviously a big, you know, a big

spectrum between where we are now and something like that. Uh. So I try to look for, um, you know, when I'm specifically looking at in the tech universe, tech stocks are are most variable with inflation news and most prone

to as like big dramatic pullbacks. Uh And and really that's that's why even though we're at market highs in the one corner of the universe and in in stocks that has really been hurt in the first half of this year has been the growth tech area so much so I think, you know, there are still a lot of interesting um you know tech tech names that are are more valueish plays and so um you know, I'm

looking looking at names like that. Uh And um you know, cash is always a great position in those kinds of environments. To heay one more minute left here. Um, we always loved talking names with you. Hello Fresh, which is a delivery service based over in Berlin. Uh you like them? How come everyone says, you know, it's time to get out of the pandemic stocks get into the value you know, oriented stocks, Like that's sort of like a a cliche

these days. Um, you know. And if there ever was a poster child for a pandemic stock, it was probably Hello Fresh last year. As people stay at home and they order these meal kids. But what's interesting is if you is, if you go beneath the surface, Uh, this is still a very uh you know, small, you know, ptential market that's been penetrated in terms of US households and global households who use these meal kits. And um, they didn't have to do any marketing last year because

there was such high demand. Now you've probably you're probably seeing their TV ads all over the place. Some people say, well, it's not a sticky customer A lot turned out, that's true, but a big chunk of those new customers that come on board, um, you know about stick around for the long haul. And this is a profitable business. It's just getting started. They could move into adjacent meals and grocery

delivery areas as well. Very smart management team, Eric, very briefly, even past pandemic, when we go out and we go to the stores again and we go to restaurants, well, you know they're, you know, right now, their competition is are you going to pick up your meal at the grocery store on the way home and cook, you know, and heat up for yourself, or are you gonna go out to dinner tonight or whatever. And you know a lot of people are still going to have to you know,

get something for dinner on their way home. That's who they really are going after all, right? Could I leave it on that note? He always good to get some time if you really appreciate it. Eric Jackson's founding president of the E M J Capital, joining us on the phone from Toronto. Thanks for listening to Bloomberg Business Week.

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