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Well before I went on my little sojore into Aruba, the bitcoin ETF was the thing that was the story.
I don't know how it's all been.
I do follow Eric Belchuna's research on Bootberg Intelligence and so that kind of keeps me up up to speed here. But let's check out somebody else's in this space. Chris Broaderson, Managing Director Eisner Amper's Business Advisory Group.
Chris talk to us about.
How important having a spot bitcoin ETF is to the crypto space and to the ETF space.
Sure, so thanks for having me. I think that the importance here is that having a spot ETF does a couple of things. Number One, it lends legitimacy to the asset cloud that it is recognized as a store of value. Whether you agree with that or not, It certainly makes it easier to invest. The average retail investor no longer has to worry about things like wallets and key management
and custody and things like that. The other thing that it does is it potentially broadens the appeal and the ecosystem longer term.
So, Paul, since you said you left Friday, that was the day that all the etf started trading in your back today. So this is what you missed. In that first week of trading, spotpick win ETFs and US saw about six point five billion dollars in shares change hands. That's according to Bloomberg Intelligence data. That is much higher than any kind of recorded ETFs pegged your traditional assets. So a lot of people are trading and moving these things around. Chris, do we know who?
Oh? I don't know who. I assume it's largely retail investors. I mean, there has been discussion about the institutional investors, but I think the thing to okusam right now is who's going to participate from a firm perspective. So, for example, Vanguard has said that they're not going to offer these
ETFs on their platform, at least not now. Over the weekend, I was playing tennis with a registered investment advisor friend, and he said that his firm is in the process of looking at suitability investor suitability before they decide whether or not they're going to offer these ETFs. So I think over time you're going to see more and more firms open up their platforms to these ETFs.
You know, Chris, before these things even started trading, seemed like a price war erupted. Everybody's cutting the fees. Here's what's going on here. I mean, I guess it seems like a bitcoins, a bitcoins a bitcoin. How do I differentiate one ETF from the other.
Is it just fees?
Well?
I think it's fees, But I also think you have to look at the performance of the manager over time and how closely do they track. So if you talk to Mike Novogratz, for example, he'll tell you that his Canadian ETF has the best tracking track record of all the ETFs out there. I can't speak to that. I don't know if it's true, but I think that you have to balance the fees along with the track performance of the manager.
So, okay, aside from that, how many more are you think are gonna come? So there's eleven right now. We get a lot more, a couple more, because I think the big question everyone has is like, how many of these guys do you actually need.
Yeah, I've heard that said over and over again, and I think that ultimately we'll probably end up with half a dozen or less. I just don't see the need for thirteen bitcoin ETFs at this point.
So I guess bitcoin there's a lot more to the crypto space than Bitcoin. How about other ets for I don't know, ethereum or whatever else the kids are portraying these days.
Sure, so I know that black Rock and a couple of others have applied for ethereum based ETFs. I don't think that we're going to see anything from the SEC probably until May. But having said that, I think that those ETFs are going to be a much more significant in terms of uphill battle. And the reason I say that is because the SEC has said very staunchly that
all cryptos x bitcoin are considered securities. So these folks that want and ethereum ETF are going to have to convince the SEC that the underlying ethereum is not a security and why it should be allowed into.
An ETF yep, And that is going to be tricky, and so maybe we just stick with what we have and then go down to a little bit less. Can I short, this thing can I can I put options on it? Can I do anything? When do you guys think that's going to happen?
So pro Shares has already applied to have leveraged and short bitcoin ETFs.
Because Paul would probably be into that.
Yeah, yeah, so that I would. I I wouldn't imagine that those will be coming. But you can also, you know, trade in the futures market bitcoin, right, so go to the CME if you want to play futures and options.
So, you know, Chris, we did get the SEC to approve this in Genslers. SEC Chairman Gainster was the deciding vote to the positive. But boy, judging by his tweets, he doesn't really seem like he's a supporter here. I mean, is this thing? Is the SEC spoken? Is this done? Are we never going back to like Gary Ginster coming back and saying, you know what, this really is not what we need here.
Well, I can't speak to what's in Chairman Ginstzler's head, but what I can tell you is that, you know, I think the SEC did this somewhat reluctantly because their hands were sort of tied by the courts. And I think that the ultimate arbiter of this will be in the court of public opinion. What happens to the price of these of bitcoin and bitcoin ETFs over time? Is it truly or a value? Is it something that people will look to in times of uncertainty like digital goal
that's been talked about. Time will tell and I wish I had that kind of crystal all yeah.
Time, And it really depends on what timeframe, right, Like is it going to take three six months to sess out or a lot longer. But Paul, what I think is interesting too is if you want to diversify your investment, right, that's the whole idea. Let's diversify, let's do alternative investment. Do you need ten percent in bitcoin or do you need like one percent?
Like what?
And that's going to make a big difference into the uptake of these guys too.
Paul, Yeah, it's interesting.
I think a lot of folks are just saying I want to have some exposure, by a lot of folks are saying I just don't need it at all because I don't understand it. Chris, I know what eyaer after you kind of look at kind of all things fintech. If you will blockchain, what's the next big thing that you guys are talking to your clients about. Is it just more crypto, better crypto?
What's the next big thing you're looking at.
I think that the real opportunity longer term is in the tokenization of world and traditional assets. Crypto is interesting, it certainly has its place. It's not going away anytime soon. But when we look at the efficiency gains and the ability to fundamentally re architect the middle and back office functions of a number of financial institutions using tokens, I think that that is just going to be a huge, significant opportunity in the future.
So I do my taxes with Eisner Effert. Just full disclosure inside, I'm like a nine year old person and I don't want to pay any taxes and I want to be really super safe with my investments. What is the best sort of way to utilize my money that doesn't involve paying a botload of taxes? Like? Do I want a bit quinn ETF? From that perspective, do I want to switch from the GBC trust to the ETF?
Like?
Do I want to do those things?
Well, there's a few reasons why you would want to switch, And this is not investment advice. Alex, please understand that. But what I can tell you is that with the ETF, it's much easier to pay your taxes than if you were to own the bitcoin directly. If you own the bitcoin directly, now you have basis tracking and a whole bunch of other things that you need to report to the IRS, as opposed to just getting your statement from your ETF provider at the end of the year.
All right, Chris, thanks so much for joining us here. Chris Broderson, Managing Director, Eisner Ampers.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station just say Alexa playing Bloomberg eleven thirty.
All right, I just got back from a wonderful trip down to Rubat and both ways flow. The Boeing seven three seven nine hundred er worked like a charm, no problems whatsoever.
All good. It wasn't the Max, it was the ER.
Now I understand that the ER may have some issues here, so I don't know what's going on with our good friends at Boeing. When I think Bowing, I think of American engineering ingenuity. But boy, they've had a tough four or five years. Sarar Phillip joins us. He's a deputy team leader for Global Aviation for Bloomberg News. He's in our Bloomberg studios, joining us via zoom So thanks so much for joining us here.
What's going on with Boeing?
I mean, it seems like generations we want without dealing with anything, and now it just seems like there's a lot of issues there from engineering perspective.
What do you think's going on?
Thanks both. So, Yeah, there is a lot of scrutiny over Boeing's manufacturing quality, and the latest sort of scrutiny is on the seven three seven nine hundred er, which is the previous generation of the Boeing seven three seven, which is sort of predates the Max that was used on the flight on jan fifth that had that dramatic
blowout of the plug door. The reason why they've expanded this probe is basically the nine hundred er uses the same type of plugs on its emergency exits as the one that failed on the Alaska Airlines flight this month, and That's why the FFAs asked airlines that basically operate this type to uh do sort of for an additional level of safety, to sort of have a visual inspection of it, to make sure it's probably secured.
All right.
I had a great flight coming back on my seven three seven nine R.
Plane was great. One problem, A huge problem, screaming kid.
Probably three or four years old, old enough to know better than his parents should know better.
The entire five hour flight.
That's tough.
It was brutal, and I just wanted to parents at the end.
I was like, what do you guys, it's just your fruit? Did oh totally?
Just says really, And I just said, you gotta do better, you gotta do better?
Did they say?
They were not happy with this? Is This is the same Paul who people in the company here at Bloomberg. When he doesn't like the way they dress, you call him you can't wear flip flops in my place of business.
Well for sure, and there has to be yes also like sure, buttons you need to not have them low. That's all for guys anyway, and for girls. So back on track, said so Boeing made it in to Saturday Night Live over the weekend. When that happens, I feel like that becomes a real issue. Like it's now in the everyday vernacular, it's in the skit of the weekend. How big a pr problem is this really going to be or do we feel like it's already kind of priced in?
I think it is priced in, but I mean essentially what everyone's looking for, in what investors are looking for is basically trying to see how things go from here. Essentially, the Max nine is still not back in service, and that's really the key question as to when regulators will approve of the procedure to sort of bring them back
into service. And also everyone's looking to see what the deliveries look like and whether or not this will have any impact on deliveries of new planes that are stretch out into next year, because as you know, I mean, airlines are looking for as much lift as they can, as much capacity as they can, and this is really crucial to determine how this sort of demand goes forward, especially at the time when there's a little bit of
uncertainty about how the demand's going to play out. I mean, we've seen revenge travel and we're looking to see sort of indications of how that's going to play out. I mean, a lot of airlines are going to be reporting earnings in the next couple of days, and we shall see what they already talk about outlook.
So sid I mean, I guess the reality is this is a duopoly.
It's Airbus and it's Bowing. I can't just say I'm fed up with Bower.
I'm gonna start buying my stuff from Airbus because Airbus has got multi year backlogs.
So if you're Boeing, what's job one? Do you think?
Is it just is a marketing pr or is it actually changing your engineering process, your manufacturing process.
I think it's really focusing on quality and building quality. I think that's going to reasuy or public that essentially that planes are safe to fly, and also reassure the customers that they don't have to worry about planes being pulled out of service for inspections and sort of the complexity of it and having to restructure your operations based
on that complexity. So I think the key question is getting to a point where you're assured of the quality of the aircraft and that can sort of give it some stability in terms of airlines happy your customers are happy and they're not worried about whether or not they're going to fly out of an aircraft. And I think three step one over it.
I mean that feels like a fair thing. Yeah, okay, well, good point. Apparently Alaska Ara is commenting on the seven thirty seven, nine hundred er door plug in an email saying that they find no issues so far in those checks. So that's something so said normally. As in before today, I was on TV from ten to twelve with Guy Johnson on the European Close and apparently there's like a storm and stuff, and I guarantee you this is all
he would have been talking about for two hours. So I feel like I need to know about the storm and stuff over in Europe. What's going on with weather?
Yeah, so there's a storm storm ishe that's disrupting travel
causing power blackouts across northern Europe. There's hurricane force winds that are lashing the sort of northern Europe and the UK and Ireland, and so that's really disrupted travel as well as our supply to various homes in Ireland as well as the UK, and so I think that has had a really big impact on a ship all Airport in Amsterdam where they've canceled one hundred and thirty flights this morning, and they've talked about winds being over one hundred kilometers an hour.
All right, so thanks so much for joining us. Sid Philip, Deputy team leader Global Aviation for Bloomberg News.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on Affle Car Playing and Brounero with the Bloomberg Business app. Listener on demand wherever you get your podcasts, or watch us live on YouTube.
Let's talk about these markets here.
I mean, you know, we started off the first few days of trading selling off, and a lot of people said, yeah, that makes sense. We had that huge run at the end of the year. But now we found a little bit of stability here. So let's check in and see what some of these professionals are doing. Coler Schlife she's one of them. She's a chief investment officer for the Beimo Family Office. Cayl, thanks so much for joining us here.
You know, a lot of folks were starting this year saying, boy, that huge gain we had in you know, the last couple of months of twenty twenty three, they probably pulled some performance from twenty twenty four a little.
Bit forward here, we're gon be a little bit of a bumpy here in the beginning.
What's your take on kind of that thought and kind of when you talk to your clients, what are you telling them about twenty twenty four.
Yeah, we definitely agree that markets got a little over their skis with exuberance in the last couple of months of twenty twenty three. But the great part was to see the broadening of it, not just being the primary Magnificent seven or even if you took it out to ten or twelve of those top tech names driving them majority of last year's market. So we did think you'd
see some pullback in here. We do think for sustainability for markets to behave themselves well again this year, you do need to continue to see that broadening out, which you really didn't see in the last couple of weeks as things have stabilized.
But it's not unusual at all when you have.
That kind of run up going into your end, especially at the late trading volume you would have had between Christmas and New Year's when a lot of.
Those highs were approached. If you will.
It's not unusual at all to see a kind of reassessment of that. You've also had a pretty major reassessment in terms of timing and quantity of FED cuts because a lot of the market exuberance and late last year was looking for cuts starting in March, which we don't think you'll see.
Just to update everybody, Archer Daniel's Midland down twenty two percent, most on record. Sure there are reasons cutting its outlook the CFO on leave, there's some issues and accounting practices. Nonetheless, if you miss or get hurt in this mart you can get really, really hurt. Carol, do you buy the rip that we've seen in the last couple of days?
Do I buy the I'm sorry?
Do you buy the rip? Do you buy the rally?
Oh?
Yeah, I think I'm not sure it's pulled back necessarily far enough. But with cash on the sidelines, I think it is time because a lot of people have been very comfortable sitting in cash, and it's time to start locking in either some physicians in the stock market, some longer term you know, even going out to two, five, five years or a little more. In the fixed income markets.
We do think you've seen. You'll see that tenure gravitate more towards four and a quarter four and a half percent by the end of the year, but it locking in some potential investments and moving it out of cash where it's been arguably a really great place to sit through much of last year. But when the FED gets around to starting to cut, you'll see some of the nice yields on those money market accounts disappear.
When I started on Wall Street in the mid eighties, Japan was the bomb. I mean that was a place that was growing like crazy. If you wanted to further your career in Wall Street, you had to do a stint in the Tokyo office. And then for the last twenty or thirty years there's been nothing, no growth, no place, and nobody really pay paid attention to it. Now I'm starting to hear people talk about Japan. I see that in your notes. I even heard Warren Buffett talk about Japan.
How are you thinking about Japan here?
I think there's been I too, started when Japan Inc.
Was the cover story on Business Week, and I probably still have that cover in my file someplace.
But I think then you, as you so aptly noted.
We went into twenty or thirty years worth of it trying to rally and come back out and disinflation hitting. But there's a lot of things structurally that are going on in Japan right now, and by and large the
globe is underweighted in that very key developed market. But there's a lot of things, for example, governance issues going on with publicly held companies there where over half of them are trading below book value, and there's new regulatory oversight saying that you need to get a plan in place, you need outside directors on the board, a plan in place to get those stock prices up. And there's a lot of things structurally going on there that make us
very interested in it. And again the fact that most of the globe is pretty severely underweighted in Japan because of the fact that it's been thirty years since they were on magazine covers.
So yeah, fair enough, And this kind of pairs in with your FED call too, Right, we're all kind of waiting for the BOJ to at least end zero percent, right, at least a little bit of a baby hike, but that hasn't happened. You mentioned that the FED isn't going to be cutting in March, and I'm wondering how you look at the timing of all of this and then how you deal with equities out of it.
Well, I think the piece of it is is that the direction is in the right direction. We think the Fed's done raising. Whether they cut in March or May, or June or July, it's almost none not as relevant, Yeah, exactly, Sorry, not enough caffeine this morning. It's not as relevant there in terms of it's Directionally, the Fed most likely is done raising, is going to start cutting at some point, and so we think it does tee up a pretty
constructive market. Those who are lending to companies have the opportunity to, Okay, now we can firm up our models and figure out what our prospects are for the next three to five years. The trend is for more rate cuts. The bed is ample room in here. If our economy does start to tail off, now, they have ample room in here to be able to cut more aggressively at some point if they need to. But you've seen a
very healthy market in here. That employment numbers out late last week were very solid and indicative of markets that are coming into better balanced Consumers are pretty exuberant investors are pretty constructive.
But as long as we hopefully get.
To see a broadening out of mid caps and small caps participating more and more industries other than just technology driving this rally, we think you'll have a pretty reasonable year.
All right, cal thanks so much for joining us. Appreciate getting a few minutes of your time. Collacrich Life, Chief Investment Officer, BEML Family Office.
You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play Bloomberg eleven thirty.
We have the New Hampshire primary kicking off tomorrow, and understanding how the election and policies are going to influence all these companies and all these industries is going to be key based on your returns for the end of the year. Joining us now. Political news director for Bloomberg TV and Radio, Jody Schneider from New Hampshire. Jody, it's been a very turbulent a twenty four hours in the political world. What is life there on the ground, without DeSantis on the ballot.
Yeah, it has been.
We got the news that Ron DeSantis was dropping out yesterday as some of us were about to had to cover a rally of his, So that's how kind of sudden it was. And he of course endorsed former President Donald Trump, so that really is kind of making it a harder battle for Nicky Haley. She is trying to
win here in New Hampshire. She needs a very strong showing tomorrow in the primary to stay in this race, to stay competitive against Donald Trump, and that's going to be tough given that Ron DeSantis threw his support to his former rival Donald Trump. And also we have had some others throw their support, including Tim Scott, the senator from Nicky Haley's home state of South Carolina, who she put into his job.
He threw his support as.
He exited the race, well actually after he exited the race, to Donald Trump as well.
So it's a two person race, but Donald Trump is certainly the one to beat.
So I guess, is there any scenario here where Nikki Haley and her team can claim some type of victory to maybe keep going here. What would be a I guess, A win?
Yeah, a win would be an actual win if if we had a surprise upset and she came in first, if she came in a strong second Tim she could claim victory that she did well against sort of the very strong front runner. The problem with that is that South Carolina in a month from now. We have Nevada in between, but South Carolina is the next significant race, the next significant primary contest, and even though she's the former governor, Donald Trump is expected to do very well there,
especially with that endorsement from Tim Scott. So this makes it really hard for her. And unless she does really well tomorrow, the betting is that she will drop out before South Carolina and an embarrassment in her home state. Question a lot of people are already asking is will she endorse Donald Trump on her way out?
So she has said that she will vote for the Republican nominee, but will her supporters do that? So I'm really curious as to what's going to happen to the independence, to the centrist Republicans and the centrist Democrats. If Nikki Haley bales, where are we hearing they're going to go?
Yeah? I mean, there won't be much place for them to go in terms of the rest of the primaries. It's, you know, it's feeling like all but inevitable that Donald Trump unlets again. We have a really surprise upset tomorrow that he will be the nominee for the party, and an early nominee. This will be the earliest, certainly in recent memory, that we've seen the two candidates, the general election contenders determined. The question I guess is what happens
to them in the fall. Do they maybe crossover and vote for the Democratic nominee or do they just stay home? And a lot of people think there's going to be a lot of staying home without without much enthusiasm overall for either candidate, and it really will become who can turn out their folks. There's also the question of a third party candidate. We have no Labels, a group that has said that if they don't have anybody besides Donald Trump and Joe Biden, that they would look at a
third party candidate. But there may be some independence that crop up that start to get some resonance. Given this sort of inevitability, and given the fact as we've seen in polling that a lot of people would prefer somebody other on both sides Republicans and Democrats would prefer somebody other than who they're going to likely get in Donald Trump and Joe Biden.
So, Jodie, what's the thinking in the belt weigh these days in Washington about if we do get what seems to be the inevitable Biden versus Trump race in November, how does that go?
Who's got the edge? What's the early thinking there?
Yeah, again, I think it will be a very close race.
People are saying, and people were talking to here in New Hampshire political prognosticators pundits we call them. They are saying it's going to get ugly. It's going to get ugly fast, and it really will be interesting to see if the public, what the public thinks of that and what the polls say. We're also dealing with two men quite you know older. The current president is eighty one,
Donald Trump is seventy seven. You know, you are looking at really a lack of enthusiasm from younger voters certainly about what they're seeing.
So the question will be would a third party.
Candidate get some residents or are people just going to sort of hold their nose and vote for the candidate they find the least objectionable, and again, we may be looking at a record low turnout, record low participation general election if something doesn't happen to excite voters, because right now they are not excited.
Right It's like, do those centers just stay home? Which would be bizarre turnout too, Jody, what sort of policies should the markets start to pay attention to? Things like making the Trump text cuts permanent, obviously, tariffs on anything being imported into the country. It feels like either way, enormous budget deficits are here to stay, which I know is weird to say when you're also floating a staunch Republican on the ticket. What do we start to pay attention to now?
Yeah, I think about those things you mentioned, Alex are really good points for the markets and investors to start looking at as this becomes inevitable that we have Donald Trump versus Joe Biden. We know that both have had a lot of spending on their plates and some of this was pandemic, and you know, came from the pandemic and those the paychecks, the checks that went to everybody. But also on the tariffs, we saw Donald Trump put in place those China tariffs and they have not been
removed by Joe Biden. So I think there's some things here that that investors can start thinking about. These are likely to be what we will see with these to men. We will also see how do they work with Congress. That's the other thing we haven't really had much of a chance to talk about, and we will in coming months.
Both chambers of Congress are really up for grabs. It is widely expected that the Republicans could lose control of the House given what happened, particularly with their speaker fights this past year. The Senate, the Democrats there have a harder map to maintain control of the Senate than the Republicans do.
So there's a lot of issues there. Who will work well with Congress? Will they get much done well?
Given that backdrop of just the calendar Jody being an election year, what's going to go? What does Congress have to get done? Don't they have to keep the government open, that's kind of important. They've got some big bills as it relates to foreign ad which I know being tied to immigration. What's the expectation in Washington and how that might proceed in an election year.
Yeah, so they do have to keep the government up, and they've been able to do these short term crs, and we've had threatened we've had several rounds of threatened shutdowns.
We haven't had we haven't had that occur yet.
But they just keep passing these short term continuing resolutions. They just passed another one last week that gets us to March, to write around Super Tuesday and right around State of the Union.
Uh, so they do.
And there seems to be a lot of talk of trying to get away from this, but uh, the speaker, Speaker Johnson, you know, has a very narrow path to get things done. He even if he wants to do things, he is the flank of his party that really keeps pushing for deeper and deeper budget cuts and doesn't want him to work with Democrats.
But he needs to work with Democrats. So it's a tough situation. But at the same time, we may see something happen on tax policy.
There's a bill that went through the House Ways and Means Committee, they actually marked it up, they sat down and went through it last week that would provide business tax cuts, making some of those Trump era tax cuts permanent or extending them, and also the child tax credits
that they the Biden administration wants to see extended. That may happen, and if it happens, it would happen pretty quickly because they want to do this, particularly with that child text credit, before the tax filing season gets into full swing. So we may see some tax policy, we may see an immigration bill. We have not had immigration policy changes of any major sense really in twenty years,
but they need get this done. The Republicans are saying they need immigration policy changes before they will even consider extending or are giving more aid to Ukraine as well as Israel and Taiwan.
Jody, thanks lot, really appreciate it. Joey Schneider, Bloomberg, Political news director for TV and radio,