U.S. Payrolls Growth Misses Big Again

Bloomberg Business Weekend iTunes, SoundCloud, or Bloomberg dot Com. 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. The US job growth in September slowest this year, signaling a tempering of the labor market recovery, really complicating that FED decision, that next FED decision when it comes to scaling back monetary support before the year under the little many still think the FED will kind

of continue ahead. Here at the front row seat on the US labor market and hiring trends and metrics, we have a perfect gas. We do. Peter Quigley, as president and CEO at Kelly, joins us on the phone from Michigan. Peter, it's great to talk to you, again, you haven't really interesting role because your firm has really its finger on the pulse of what's happening when it comes to labor because you provide staffing solutions in many parts of the country.

So I'm wondering if this report was a surprise to you or if you were expecting something that was really going to miss and at this magnitude. Well, I think the jobs report was disappointing to those that expected a bounce due to the expiration of the enhanced unemployment benefits and schools reopening, but that didn't materialize. UM. But I tend to think of this as these three months July, August and September is the UH delta variant book ends.

So in July we had outstanding jobs report, but the survey was taken before this spike, and in September the converse, where we had a really disappointing report. Um. But it was also at the beginning of September when we were in the midst of the spike. So I was encouraged by the private sector. Seventeen thousand not overwhelming, but but decent um because the big drag was in government payrolls.

Local education was a big drag um. And this wasn't surprising to us because we've seen major talent challenges in uh. You know, we support fifteen thousand schools across forty five states, and not only there shortages of teachers, but the entire education ecosystem, so food service workers, custodians, bus drivers, para educators, um. So all of that led us to believe that there

was going to be some some depression. UM. Okay. So one of the things that we discussed, Peter, is that the second half of September, at least anecdotally, people have talked about that which is not reflected in the Job's report this morning, that you are seeing signs of more people going into jobs. What are you seeing in the leader or what did you see in the later half of September. Well, the first thing I would say is there is no change in the demand. So that's the

good news from the economy standpoint. Demand is strong across all of the industries we served. We didn't see a I would say, a significant uptick in the availability of talent in the back half of September. Um, it's it's anecdotal, but um, we probably saw greater inflows of talent in areas where schools were fully reopened and not under some kind of temporary lockdown UM, and that I think just speaks to the importance of UM allowing UM parents to

get back to work. If anything was concerning about the job's report, it was the labor force participation rate dropping because so many women and it was all women that are leaving the workforce in UH in droves. Yeah, that

among among the parts that certainly got our attention. Peter, I'm wondering what you think this means for the remainder of the year and what you can tell us right now, because you do have this unique insight into what's happening real time when it comes to your clients all over the United States. What can you tell us about what you're seeing in October as we do get past the

delta variant. Well, I think the UH the expected bounds due to the reopening of schools and and the UM exploration of employment benefits, we'll likely see that UM materialized later in the year. Whether it's October or November, I think remains to be seen. UM. But as well, the UM, the supply chain issues that we're having, especially around microchips, UM as those begin to be sorted out, I expect

that there will be UM an improving jobs picture. So you're saying, Peter, that people shouldn't hold their breath too much for even next month's jobs report because we still could see the effect of the expanded unemployment insurance as well as people kids going back to school. Yeah, my sense is it's gonna be coppy for probably the remainder of the year. I think until we get past the UH, the delta variant and and you know, other issues surrounding COVID.

I think it's going to be a little bit uncertain in the labor markets because we don't really understand why so many people are staying on the sidelines as as opposed to coming back to UH the plethora of jobs as as you know, record number of jobs across industries. UM. So I think it's gonna be um period of time probably into two before we see some stabilization. Peter just

got about fifty seconds left here. You talked about women, and we two noticed UH labor participation, women really leaving, and we really thought the beginning of pandemic flexibility and working was going to be helpful for women. We've learned that's not the case. Um. What are you hearing on the front that women are leaving the workforce and they are not coming back. Yeah, we're hearing that. Um. And

and largely it's due to childcare or elder care responsibilities. Um. You know, if kids don't go to school or if they're at home schooling. Um, parents don't go to work if they can't work remotely. And even then it adds to a level of stress that makes work intolerable at some point. So I think this is a really serious issue that we need to focus on to ensure that we get more women back into the labor force. Right.

It really speaks to the heart of your organization, really the creation of it way back when, Um, Peter, thank you so much, Peter, quickly he's president. Cef Kelly, I have to say, my sister got a college degree years and years ago, um, to get a job, how to get some secretarial skills, went to Kelly, got a job in the city, uh, and ended up getting your masters and doing really really well. So I can understand that path. How it it helps. Look, it was called the Kelly

Girl Company at nineties and nineteen fifties. You're listening to Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes too Stovic on Bloomberg Radio. We've been talking about Mark and their experimental pill for COVID nineteen should be accompanied by other treatments as soon as they're available to cut the risk of drug resistance that would limit its effectiveness.

Welcome Foundation director Jeremy far saying that, Yeah, this is a story that caught our attention because of all the attention that Mark's experimental pill for COVID nineteen got over the last week. We saw mark stock rise starting Friday as a result of it. Riley Griffin is US healthcare reporter for Bloomberg News, and she joins us now on the phone from New York City. So, so let's start with with where things stand with regulators and Mark's pill.

What is it and what is the well. I don't want to say promise because it hasn't been fully approved by regulators rally, but what's it supposed to do? Yeah, Mark's pill is really important because what we don't have today, um TIM, is a cheap and effective pill that can be prescribed to people who have contracted COVID. Right now, the treatment landscape is rather barren. You can get the mono quota antibodies which are in an a few shin, or if you proceed to the hospitalized setting, you might

get dexa meta zone, a steroid or rem deservie. But what we really want is something like Tamma bloo, something that you can take from home, you don't have to venture too far, and it will stop COVID in its tracks, stop that replication process. We've been following Mark's pill four months now. Actually had a feature in Business Week back in spring about this very concept um and now we've

got the data and it looks fairly promising. But the question at hand um that the director of the Welcome Foundation is posing, is is it going to face drug resistance like we've seen with some of those monoquona antibodies. In the backtrack for a second, what is drug resistance that occurs when the virus and bacteria evolved to blunt or defeat a drug mechanism of attack, which is what we don't want to have happened, right And this is

what's fearful right now. I feel like we're in that Netherlands right now of right to people who have had vaccines or waiting, not all of his supply, you know, can get boosters, and you're just wondering, am I still safe? Is there going to be a Okay, we're kind of dealing. We are dealing with the delta variant, But is there going to be a variant that all of a sudden is going to be like, yeah, fiser moderna vaccine J and J vaccine not a problem. Yeah, And and people

are following that with vaccines. But viruses are really wildly things. They mutate to survive and we've always seen this with anti virals in particular um and so that's a question here. But Mark I spoke with them just yesterday, one of the leaders of developing this pill, and he says the bar for resistance with mona peer of year the COVID pill is rather high. He sees it as different from other anti virunts in the past. Can can it be changed in real time the way that other treatments or

vaccines have been. At least the hope has been that they can be changed and tweaked with two help attack. Some of these are potentially resistance. So typically how companies do this is they actually combine one anti viral with another. You might have heard the term cocktail to describe a silly term, right, But it really means you're combining more than one thing, and together, Um, you're combating resistance, and you might also be encouraging greater levels of efficacy. But

that's not what Mark is claiming here. To get a little wonky with you, guys, Um, I like wanky too, he had said to me. Nick Kurt Sunis, the senior vice president of clinical research for infectious Diseases and Vaccines at Mark, that earlier experiments with other viruses showed that the evolution of resistant mutations was really rare with mulipure beer. And another thing, the course of treatment is short, meaning that viruses get very few chances to evolve into resistant

forms during that course. UM. And then the last reason he shared with us was the drugs met kind of mechanism of action. To put it in as simple terms as I can, the way manipeer of your works is by inducing errors into the coronavirus's genetic material. Those errors

are then replicated until the virus is practically defunct. And what Marcus found is that by UM inducing those errors, they're actually spread more or less randomly throughout the viral genome, which again means that the virus has fewer opportunities to develop those mutant forms that will overcome those errors, and that in and of itself, he said, makes resistance to manopere of your a tufting. Only time will tell you know. That's that's marks perspective right now. Um, And they're not

actively pursuing combinations. But should we c say Fiser's oral anti viral proved successful as well, I'd be asking could they combine the two together? Aren't two better than one? Maybe we've certainly seen that in meta history and treatment history before. Um. Riley, thank you so much, really clarified a lot on that. Roley Griffin Cheese u S healthcare report at Bloomberg News. Joining us on the phone in

New York City. This is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stenovic on Bloomberg Radio. We do want to just rehash a former Win Resorts executive and a private equity investor found guilty in the first trial of parents accused of cheating to get their children into elite US universities. We're talking about varsity blues. Uh and UH it looks like the two of them

are potentially facing some jail time. Um. Yeah, and you know what, it actually is a perfect segue into our next story that talks a lot about wealthy parents and what wealthy parents are doing to help their kids, uh afford homes, specifically in New York City that weren't necessarily meant for them exactly. It's in the new issue of Bloomberg Business Week magazine. It's among the most right. We're not saying, I think illegals being done, that there's no parallel.

I don't want to apply a parallel that there is anything illegal. But it's time just working on my segway, Carol. It's among our most read on the Bloomberg Today's story about New York City's real estate tax breaks that, as Tim mentioned, have turned out to be a loophole for rich kids. That tale and reality. Let's get to it with Bloomberg News Financial Investigations reporter Caleb Melby. He is on the phone, he's hard working, he's in St. Louis. Caleb,

interesting story. First of all, tell us about this tax break and how that's become a loophole for some Yeah. Absolutely, this is a program uh called the HDFC cooperative program here in New York that stands for Housing Development Funded Corporation,

a whole elpha bit soup of a name. And what happened in the in the nineties seventies was, of course, you had white flight out of New York, you had the financial crisis in New York City, and you had the slum lords who both stopped making repairs to their buildings and stopped paying taxes. UH. The government eventually sees those buildings runpaid taxes, but didn't want them to go back to the same landlords for fear that the same

thing would happen all over again. So they looked to this um UH state law that allowed them to create UH cooperatives designed to be low for low income people, to provide income for low income people. They turned these buildings over to the former renters for two hundred fifty dollars a unit um UH, and it was kind of

historic transfer of wealth and property in New York City. UM. But a lot of those people didn't have money to repair their buildings either, so the government created this tax break to try to help them out in but throughout time, nobody has really created any stringent rules about um what these units can go for UM or how much how much you can have in way of assets to buy them. So they have these income limits on them, but no

asset limits. And UH, that actually means there's kind of a perfect buyer out there and the sort of person who would love to live in Manhattan where a lot of these a are uh, low income, high asset Uh you know, children of the affluent who are moving here to the city. Okay, so let's say you are an aspiring you know, fill in the blank, uh, and you

moved to New York City after graduating from college. You're making you know, between thirty thousand and fifty thousand dollars a year, scraping by in a lot of cases, but not really because you perhaps have access to half a million dollars from parents, from wealthy relatives like you lay out in your story, you're kind of the perfect fit to actually buy one of these homes, and you're getting it at a huge discount compared to uh a house

that doesn't have the limits. That's exactly right, Timm, And you raise another good point, which is that because some of these buildings still have some level of financial distress, banks won't lend to them. They can still be beautiful, you know, lovely buildings, um that have a little bit of debt on the books. But that means you do need to have all cash, and they will sometimes advertise themselves as all cash all. So you can't take a

mortgage out to get one of these. Well, for for the more stabilized ones, you can, but in a lot of cases you can't. And that's where you'll see them advertised. You must make, as you say, something like less than sixty dollars, but also have five dollars cash or more on hand. It's, um, it's quite an absurd situation. Um as as this is unfolded through history to our present moment. So how many are taking advantage of you know, to

some extent gaming the system? Not illegal, but it's certainly not getting to the population that it was intended for. I mean, right, this is for to help out those that are lower income. Um. How how how much has it been being gamed? Basically? Yeah, So, so the universe of these buildings is about a thousand UM with about

seventeen or eighteen thousand units in them. Uh, to give you an idea that I mean, that's roughly twice the size of Stevenson Town Peter Cooper Village for our listeners in the New York area, very big multi block complex in the city, a lot of units, but because they do offer such tremendous protection against rising costs in the city, even better than a rent stabilized apartment, people do hold onto them for a very very long time, and so

they do trade infrequently. But kind of like how whenever home cells and an up and coming neighborhood, and it always tends to go in one direction, up and up

and up. Um, these buildings are doing the same. Uh. And we're seeing that again and again that even though these units trade infrequently, for the ones on the Upper West Side or Central Harlem or the East Village, these neighborhoods that in the seventies and eighties weren't places everybody wanted to be, but are now much more desirable places to be. You're seeing more and more of these deals. So what did the parents say, who did you talk to?

I'm curious about that, right, because that's who you really wanted to talk to. Yeah, yeah, I mean, um, I I talked to it to one parent who um you know,

she she had been a lawyer herself. Her husband had been a partner and engineering firm, and they had a daughter who was a musician, and they were worried about her having an even income being in the city, but wanting to be in the city, so they you know, the daughter was able to pay four hundred thousand dollars cash for a one bedroom on the fr West Side where she can have rehearsals away from her roommates, any roommates, and also not worry about, you know, the very burdensome

housing costs that exist for most renters or even owners in in New York. Um and I also talked to a lot of musicians who have since become adults, a couple of them that have actually transitioned from being musicians into real estate brokers specializing in exactly these kinds of units. That one was a bass guitar player, one was a jazz flutist. Um and uh and talk to them about you know, how this pro graham has unspooled in a way that the city definitely didn't didn't help well. Also

seems like the rules aren't hard and fast. I mean, you do share the example of anecdotes of people printing out you know, turbo tax tax returns that potentially might not reflect a real income for somebody. Yeah, and that's exactly right. So, and every diminishing number of these buildings

has formal regulatory agreements with the city. They may require that they actually file documentation around the stuff, but the vast majority of them, especially the more expensive ones, no longer have any sort of regulatory agreement, and the city has basically thrown up its hand to try and regulate these at all. So so to the extent that there are even income caps on a lot of these these days, they're essentially functioning on an honor system. So it will continue.

So it's going to just continue. Twenty seconds left here. Um, it's gonna be very hard to put this one back in the bottle. You try, you try to put price caps on these when there wasn't them before, you're going to get law suits. And it's not clear that the city wanted to do that. All right, Well, a very interesting story in terms of what's going on. Hey, Caleb, thank you. Caleb Melby, financial investigations reporter of Bloomberg News on the road in St. Louis, And uh what I

opened up my Twitter feed this morning? And this was like the story that everybody was talking about a lot of rage tweeting, was there. Yeah, yeah, well understandably. So this is Bloomberg Business Week with Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So you are listening to Bloomberg Business Week on this Friday, and this happens to be also among one of our most read on the Bloomberg. We were all talking about it, certainly

in our call It's a Store by Bloomberg. Simon Kennedy and Timid notes that the US were already in a recession based on consumer sentiment, which is based on a new study co authored by former Bank of England policymaker Danny blanche Flower. He is professor of economics at Dartmouth College, and he joins us on the phone from Hanover, New Hampshire. Danny, nice to have you back. How are you are. I'm actually teaching class again. It's great. I know you're on campus.

It's great. I'm looking out of my office windows. Great. Um, so what's going on here? We're already in a recession? Well? Um. I called this earlier in the week with my co author Alex Bryson Um. I mean the issue here is what actually can you use to say something about a recession coming before it hits. So the NBR dating group tells you six to eight months to a year later, the labor market data tells you pretty much at the point that you turn what can you use to predict

it common? And it turns out we can success now and the new paper we show we successfully predict every one of the last six recessions beforehand. And essentially what we're seeing today is almost identical to what we saw in two thousand seven across the whole economy and particularly across the eight biggest states. These measures of sentiment what do people think is happening? Turned around May, and that

suggests that recession will probably start around Christmas time. So the predictors are almost exactly as they were in two thousand seven. And this is how you can predict every prior recession to it. So these this prediction came well before, obviously a couple of days before the non farm perils, which didn't surprise me, and I expect to see nonfarm payrolls declining and probably going negatives by negative by the

end of the year. Wow. That's certainly yeah. I mean that that's the problem is obviously the labor market data isn't giving us a very good deer, but people don't seem to understand what's going on. There's base and composition effect. There's a couple of measures. If you go and look at total compensation, that's up by one point nine percent, and on the last month it's flat. And if you go to hourly earnings using the current population survey, that's down one two percent if you take Q to two

thousand twenty one to Q two. So there's a lot of indicators people have not been looking at. And and the question is you know what happened in two thousand seven and the previous five and the answers these measures told you six or nine months before it was coming that this was happening in it and people should look in our paper. It's remarkable how comparable is compared to and it's and in fact there's a set of services

and it's really about women. It turns out that since the turn women people in the Grants Thaunton service says if they're forced to go back to the office, they won't go, they'll quit. So for people in the conference board. They say women say, especially that they're very fearful of

going back to work. So I think that's what turns the delta variants turn people so Danny for people who don't follow this as closely as you do, tell us the connection between how people feel about sentiment, what what sentiment is about the economy, and how that translates into economic growth or spending. Yes, so we've done a lot of work on this. The sentiment is about you ask people what do you think is going on? What do you think is going on in your economy? Me, do

you think that the jobs are good? Do you think the economic situation is good? And what do you expect to happen? And so what we see in these data from around the spring is that anxiety in the United States rises. People get more and more fearful, as I'd say, particularly about delta. And the way to think of this is if people are anxious, if people fear that flowing is coming, flowing is going to come, If people think that's a recession coming, then a recession comes. So these

days are really crucial. And every time this has happened before, that's what followed it. And it appears to be that the delta various and the thought that people might have to go back to work has made them incredibly anxious. And I think they're spending patterns are going to change, and unless we see some big change that the fear of going back to work is a big deal. And people say, well, I'll quit my job if I have to, or our retire and that's what we're seeing in the data.

And you think that stays with us much longer or or does it? At some point? Danny right at itself. I mean, at some point we get beyond this fear. I mean, I guess what I'm asking you is this going to be a protracted recession or is this going to be kind of a hit? Yeah? What a great question. I don't know. I mean, obviously that the issue in each of these cases is when do you go into it, how long is it going to last? And how quickly are you going to be able to persuade those fears.

So I think the answer is that if you can't, it's going to go on for quite a long time. If you can, and people become confident that you know, the virus has been been solved, it's ever everything's okay, that's fine that it's appears in these days where people are very worried about having to go back to the work, having to stop doing remote work. And I think that's the really big thing. I mean, the other thing is we're talking. I mean, people have been talking about the

FED bit going to taper big era. Should we not be doing that. That's exactly mistake they made in a great recession. Didn't spot it well? We know in these days they told us in July oh seven they were forecasting recession coming in December seventh, and the FED even by September eight havn't worked it out. So we should be very fearful that the Fed will make an error again.

It's absolutely clear in these days the last thing they should be doing is even thinking about taking so nothing and nothing for what any of the meetings this year in your view, Oh, absolutely nothing. They should be thinking about whether necessary, what they can do about further stimulus. Yeah, I'm trying to think we've had We've had a discussion with somebody else who said it's not going to be a case of pulling back, but you know, reigniting some

of the stimulative measures. So Danny, if the FED does indeed go through with its taper measures later this year, and we are indeed in a recession already. Help us paying a picture for for what the U. S economy looks like in a year. Well, again, it's a very good question. I mean, in a way, we're pretty good at getting to the start. I mean, it's going to take a while to get out of it. It's going to take a while for the economy to pick back up. I mean, I certainly think we're going to start to

see unemployment rates rising. Um that that's the big story I think, and people being you know, wages are going to be certainly going to wage grow. It is certainly going to come down, and we're going to have to start to think about something obviously, the impact of the steamulus, the measures being discussed in Congress. If you can get these infrastructure builds and spending builds in place, that will that will help to asuade this this negative shots coming.

I think you've got to persuade people that they can go back to work safely. Otherwise they're going to stop, they're gonna stop spending. They're not going to go back to work, They're going to quit. And that's the big deal. People are frightened, and that's what's true in the data. People are frightened. You do, dofully see that that people are having a hard time, you know, making sense of and clearly explaining what's going on the labor market. Danny,

thank you so much. I'm glad you're back at campus, Stay safe, and so glad to check in with you. Danny blanche Flower, professor of economics at Dartmouth College and former Bank of England policymaker. That story you can find it too at Bloomberg dot com. This is Bloomberg Business Week with Carol Master and Bloomberg Quick Takes. Tim Stenovich from Bloomberg Radio. Well, let's talk more crypto and joining us now to do that as Eric Irvin, the co

founder and chief investment officer of on Ramp invest. Eric joins us on the phone from Sandy go. On Rap Invest is a fintech company. What does is it provides education and access to people about crypto assets for financial planners. Eric, I've I've been talking a lot. We we do talk a lot about crypto. I've been talking a lot about crypto on Quick Take stock or or quick Take show

that there's each day at noon Eastern time. And one thing that I keep coming back to is the idea that there is so much confusion about what a cryptocurrency is, what is bitcoin versus blockchain, what ether versus ethereum is? And I still think there's so much room for the general consumer to actually understand more about the space. What are you guys doing at on ramp invest to to

raise awareness? Yeah, and and it's funny that you mentioned that when I first got got involved, that we call it the rabbit hole where you know, first you you start to dig in, and first you dismiss it, and and then later on you kick yourself for for dismissing it.

But but as you go deeper and deeper into the rabbit hole, it's a completely new financial system, right, And and so you can't just take the conventional framework of of what we know as as an asset class and then just apply it here, So you have to almost like learn everything from scratch. So um, So that's exactly what Invests is doing is is just starting with the education. We're educating financial advisors so they can educate their clients

about what is a crypto asset, what's the cryptocurrency? Like you say, what's about big B bitcoin versus little B bitcoin, the blockchain itself, the network versus the token, the trades on that network, and and then just starting there and then starting to open their eyes towards sorry, how does it behave in a portfolio? And how can your clients invest in? And what about the state planning issues and

all of those different assets. When clients can actually own an asset entirely themselves, they don't have to necessarily have it at a custodian so um so yeah, really, that's that's the the idea behind un ramp a cat to me.

And then there's the platform which gives people access so that they can invest in the asset class themselves or through I have to jump in because I do find it interesting that even people who have been writing stories, doing lots of research, or you know, my colleagues who are super smart and just people you know, smart investors, are still like, I don't quite get the scripto thing. So there is a lot of education that needs to

be here. What seems to be the biggest thing, especially when it comes to you know, our I as who have been so used to you know, asset classes that you know, we pretty much understand how this works. For the most part, um what seems to be, you know, the typical training and the things that they need to truly understand so that they can represent it well to their clients, especially in an environment where still regulators are trying to figure it out. Yeah, and and this is

probably the first sset class. I used to be a finance advisor many years ago, and this is probably the first st class that I can think of. The clients know more about it than the advisors. So the clients

are coming to the advisor asking them questions. And it's not necessarily about the advisor getting educated so that they can present why why crypto makes sense or why um it doesn't or you know, this asset person is that it's really just what, you know, how do they handle themselves as their clients are bringing questions to the table.

And so that's that's one of the most interesting pieces of this is, you know, this entire ecosystem grew up outside of the traditional financial system and and no one ever thought that it could become this two trillion dollar asset class and now here we are. But everything had to grow up outside and so there's there's this chasm

in between stock exchange and the crypto asthetic exchanges. Hence that you know, like the demand for any ts go go get that bitcoin, wrap it up and bring it onto this exchange so I can talk about it and I can buy it. And that's um. That's really kind of like the unique piece here is it's more than an investment vehicle. It's a whole tool we can use. Yeah, we'll put on your financial advisor hat, put it back on for a second, grab it off the off the rack,

and throw it back on. Because earlier this week, our colleague Eric Shatzker here spoke with Don Fitzpatrick, the chief investment officer for George Soros's family office. She said that crypto has quote gone mainstream, and Eric came on our show and made the point that institutional investors are not ignoring crypto anymore, and they're allocating a small portion, whether it's two percent or five percent, what have you to cryptocurrency translate that for the normal person and the normal

person's portfolio. Do you suggest that everybody have a sliver of their assets in crypto? Yeah, I do, I personally do, and I and I think the mass kind of bears it out as well. It is. You know it's I kind of talk about this rule of three where you know no more than if you've never invested in it and you don't understand it, then no more than three percent of your kind of investible net worth should to go into this and this is probably like your liquid

investible networth. And then commit to three years, like, don't touch it for three years before before you do anything. And then if you can, because it's so dang volatile dollar cost average, so three percent of your discretionary income that you can apply to it. And if you can do that, then you'll probably end up with a pretty

good outcome. But even if you don't, if you take take more of a like kind of an institutional approach, a smaller allocation like that because it is not correlated, has meaningful benefits, especially if you're rebalancing on a regular basis because it's so volatile. Hey, listen, we gotta run, Eric, Thank you so much and look forward to checking with you again. Eric Irvin uh Heaths, co founder, chief investment officer at on Ramp invest with us from San Diego.

You're listening to Bloomberg. Mo. Yeah, but you let me drive? Oh no, no, no, no, this is not ain. Please, I want to drive. It's a good question. Good drive. This is the Drive to the Globes on Bluebird Radio. So just about ten minutes left U in today's trading session. It is time for the Drive to the clothes. Let's get to it with Alan Lance, a friend of the show, research director at Lance Global dot com, President of allenby Lance and Associates. He's back with us on the phone

from Toledo. You're gonna explain the wackiness that we've seen in the markets as of late. I'm counting on you, Allen. How are you it's been I'm doing well, thank you. Uh yeah, it's been an amazing market. I mean what we've seen is, you know, a select group of bubbles that have formed and and been popped and and and

then resurrected. You saw that in the beginning of the year, you know, with um the Spack in the Spack Arena, and then the I P. O craze and and uh we have the mega tech name, the growth oriented names that last month finally fall from grace and and I think that's what we're going to see in this type market. You know, big Bitcoin collapse and now it's you know, pushing back up and and you know it's good for

the investor, you know, I like these rotational corrections. Um. You know, we expected more volatility the second half of one, and that's what we're getting, even a greater variety than than we even expected. Well, it's interesting that you mentioned bitcoin, and we definitely have seen a big move up this this week, and it continued to trend higher. I mean, we went back up above fifty thousand, just crossing the bloomberg.

The Body Administration weighing an executive order executive order on cryptocurrencies as part of an effort to set up the government wide approach to the white hat classet classes. According to people in the know, the proposed directive would charge federal agencies to study and offer recommendations on relevant areas of crypto, touching on financial regulation, economic innovation, and national security.

According to those in the know, So it does feel like Alan, and I know we tend to talk about much more traditional assets, but it does feel like um, whether it's the SEC and Gary Ginsler, whether it's j Powell in a recent recent testimony up on Capitol Hill, we do see like regulators those we look to for guidance increasingly kind of stepping up and giving us some clarity, and they're not going to ban it, and they're thinking about, Okay,

how do we regulate it? Yeah, I think it's legitimizes the asset and you know that's positive for the long term and and that's why you see it moving up. So you'll you'll still have the volatility. I mean a lot of this even with natural gas prices. It's short covering and what's going on you know overseas, you know, so so it's really hard to anticipate these swings, especially the magnitude of them. But well, do you do you

invest in crypto? Um? No, No, we really haven't. Um, you know, we've had some clients that wanted to get involved and we bought for them, you know, in the weakness, Uh don't don't really chase. So we use our uh you know, long term um, you know, defensive type strategies into that. But for our our average client, now we

we we really haven't. I'd rather buy indirectly and in ways that we think, you know, like the video and what have you that can benefit but not you know, betting solely on you know, bitcoin or you know, one one atht amongst amongst that that that that whole vertical the so called if you will pitch pitch for our

picks and shovels right of of of the cryptocurrency boom. Hey, alan, um, help us make sense of today's jobs report because it's pretty much ahead scratch or a huge miss coming in and under two hundred thousand when economist survey by Bloomberg expected five hundred thousand, the market not really knowing what to make of it. It does it change things for

the Fed? Um? You know I think it it might uh delay, you know, it looked like that, you know, they might do something, you know, more quickly than what they're talking up the beginning of a year, you know, with the latest FED meetings and and you know it might get delayed. Obviously they're gonna wait for more data coming in. So you know, if that is a trend, obviously, I I think it will change. But you know it's been again so volatile, just like the stock market that um,

you know, we'll have to wait and see. Yesterday's lumbers weren't weren't bad, and then today's were you know totally um, you know, the opposite, so so it's a matter of I think they're gonna wait for more evidence, all right. So it's tricky if I look at the SNP five hundred names lower higher, this is just some basic stats on the market to unchanged. So we are seeing increasingly a risk off trade. We've talked about that fifty day moving average on the SNP five hundred, that trend line

moving lower. Even though we kind of moved uh not kind of, we did move back above it. Um people are making investment bets. There are stocks that are gaining, their stocks that are losing. Where would you be putting money right now? Allan, I still think it's it's a matter of being you know, just selecting the right companies, companies that have a catalyst that it's not yet recognized on Wall Street, you know. And this way you can outpace the market, you know, whether it's down or flat.

I think it is going to be challenging. So I know, last time we talked about Ball Corp. And that's moved up, and and we bought some tech Resources, which is a copper play, and and I like um real assets. We bought Murk near its lows and it's moved up, you know. With with a catalyst. So I like the biotech special situations. Um, you know, I like uh Tutor Parny, which is uh TPC. Uh it's an infrastructure play. But also I think they're turning around some some problems they had. So so if

you get the infrastructure, you've got that catalyst. If you don't, I think the company specifically can can be a special situation. And I think those are the areas you really got to concentrate in instead of just playing you know, the broad market, which I think it's gonna be difficult the second half the year and and uh, you know it's gonna be flat flat the down and you're going to see more days like today where you just have to be in the right areas. So are you staying in

the right areas? Are you using this as an opportunity to pull back your own hold things, build a little bit of cash and wait for the market to move even lower. Yeah, we've been raising cash this summer into the strength, so we have used some of that for

September sell off. And and if the market you know, continue to advance and touch on new highs, you know, we'd be pruning, especially areas that have done you know, so well, and that's really paid off in the long run, and I think it will continue to just reduce risk when the markets are high and and then uh, you know when there's panic selling trying to accumulate quality. Hey

just quickly, just got about thirty seconds out. And there's still though we've got some clarity at a d C. But again we're we've got a new clock ticking down to December. So it does feel like in terms of those things that can create some uncertainty in the market, there's still a bunch out there for investors to have to deal with. Incredible number of things out there, Carol. You know, you've got rising interest rates, You've got you know the situation which China, You've got supply chain items.

I mean, it is a long list. And that's why you know, the second half the year we said we're gonna see volatility in both directions and just you know, all but down and that you know, it's time to really be selective and and take take some profits. And and I don't think it's going to be an error to raise cash in any strength. I don't expect this to be a two thousand, you know, eight nine, or but I do expect it a difficult market, alright. Listen.

Always good to check in with you. Allen Lance. He is Research director at Lance Global dot com, President of allenby Lance and Associates. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio or watch us on YouTube. Search to Bloomberg Global News