This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

Peter Atwater, he's adjunct professor of economics at William and Mary, but before that worked in at financial services and with hedge funds. You might recall it he coined Carol, the term K shape recovery.

Peter Atwater, he's adjunct professor of economics at William and Mary, but before that worked in at financial services and with hedge funds. You might recall it he coined Carol, the term K shape recovery.

Yeah, he did.

Yeah, he did.

Indeed, he was recently on to talk about his new book, The Confidence Map, which came out in July. So delighted to have you back. How are you. I'm doing great here. Well, it's great to have you here. How are you thinking about kind of the things that are coming at investors right now and just the world at large.

Indeed, he was recently on to talk about his new book, The Confidence Map, which came out in July. So delighted to have you back. How are you. I'm doing great here. Well, it's great to have you here. How are you thinking about kind of the things that are coming at investors right now and just the world at large.

Well, you know, there's a lot coming at investors. But what's been so striking to me about the past couple of weeks is the absence of emotion. We've watched the sell off in bonds, we've watched the sell off in stocks, we've watched oil prices rise, and there's this remarkable at ease that investors seem to have even though markets have gotten over sold or in the case of oil, over blought, and it's really inconsistent to me with what prices would suggest. So I'm perplexed that people are taking all of this as commonly as they are, particularly because it wasn't, you know, six months ago interest rates were at this level and people were panicking about the banks, and it's a big gone today.

Well, you know, there's a lot coming at investors. But what's been so striking to me about the past couple of weeks is the absence of emotion. We've watched the sell off in bonds, we've watched the sell off in stocks, we've watched oil prices rise, and there's this remarkable at ease that investors seem to have even though markets have gotten over sold or in the case of oil, over blought, and it's really inconsistent to me with what prices would suggest. So I'm perplexed that people are taking all of this as commonly as they are, particularly because it wasn't, you know, six months ago interest rates were at this level and people were panicking about the banks, and it's a big gone today.

So what do you attribute that to.

So what do you attribute that to.

I'm a little worried about real complacence behavior on the part of investors, because there's there's no sense of that things could get worse, whether in terms of the economy itself or you know, higher interest rates or inflation. There's almost this sense of, Okay, this is what it is. Until the economy gives us signals that it's weakening, or until the consumer rolls over, we're going to count on some sort of miraculous landing of this.

I'm a little worried about real complacence behavior on the part of investors, because there's there's no sense of that things could get worse, whether in terms of the economy itself or you know, higher interest rates or inflation. There's almost this sense of, Okay, this is what it is. Until the economy gives us signals that it's weakening, or until the consumer rolls over, we're going to count on some sort of miraculous landing of this.

One thing that Caroly and I talked about this week was the depletion that we're seeing when it comes to the cash savings of Americans right Castle Bales, Castle balance sheets. I mean, pretty much everyone except the top twenty percent has run out of that excess cash savings that they had yeah, during the pandemic and post pandemic.

One thing that Caroly and I talked about this week was the depletion that we're seeing when it comes to the cash savings of Americans right Castle Bales, Castle balance sheets. I mean, pretty much everyone except the top twenty percent has run out of that excess cash savings that they had yeah, during the pandemic and post pandemic.

I worry about those at the low end where the cash ran out a long time ago. I think it's interesting that folks are only taking note of it now, But for those at the bottom, this is a phenomenon that's now more than a year old, and so you're starting to see that roll into delinquency rates, particularly in automobile loans and credit card loans, and the automobile loan one worries me because, particularly for low income individuals, the car is the job, yeah, and they don't have the flexibility of work from home that many above do.

I worry about those at the low end where the cash ran out a long time ago. I think it's interesting that folks are only taking note of it now, But for those at the bottom, this is a phenomenon that's now more than a year old, and so you're starting to see that roll into delinquency rates, particularly in automobile loans and credit card loans, and the automobile loan one worries me because, particularly for low income individuals, the car is the job, yeah, and they don't have the flexibility of work from home that many above do.

Peter, what do you make of we were just talking about with Romain and Katie on our TV side about the ghost jobs that will never be filled. Do you are you comfortable with some of the data points that are out there, including the labor statistics here in the United States?

Peter, what do you make of we were just talking about with Romain and Katie on our TV side about the ghost jobs that will never be filled. Do you are you comfortable with some of the data points that are out there, including the labor statistics here in the United States?

You know, I'm comfortable with the statistics. But what is clear even with these statistics is that jobs are not equating to confidence, and that you've seen no material improvement in mood even though jobs have come back and people are working more. And so I think we do ourselves a disservice to think that having a job is going to boost confidence.

You know, I'm comfortable with the statistics. But what is clear even with these statistics is that jobs are not equating to confidence, and that you've seen no material improvement in mood even though jobs have come back and people are working more. And so I think we do ourselves a disservice to think that having a job is going to boost confidence.

I think it's funny because I think Tim and I talk a lot about like the things that we're paying for in life right now, whether it's homes or rates on. You know, buying a home.

I think it's funny because I think Tim and I talk a lot about like the things that we're paying for in life right now, whether it's homes or rates on. You know, buying a home.

Right in assurance is super expensive now cool.

Right in assurance is super expensive now cool.

Everything seems super expensive right now. Yeah, and then we have jobs and we feel pretty commion This.

Everything seems super expensive right now. Yeah, and then we have jobs and we feel pretty commion This.

Is these are the things that are at the low end of the hierarchy of need. So we're not talking about luxury goods where you can do with or without. We're talking about essentials, and so that creates this sense of vulnerability where people feel hostage to either the price scarcity or the supply scarcy or the demand scarcity.

Is these are the things that are at the low end of the hierarchy of need. So we're not talking about luxury goods where you can do with or without. We're talking about essentials, and so that creates this sense of vulnerability where people feel hostage to either the price scarcity or the supply scarcy or the demand scarcity.

Everything you're talking about we could have talked about six months ago. We could have talked about in January before the run up of close to twenty percent on the S and P five hundred this year, which by the way, has now been pretty much cut in half at this point. So, Peter, what were people ignoring and what does it portend for the future.

Everything you're talking about we could have talked about six months ago. We could have talked about in January before the run up of close to twenty percent on the S and P five hundred this year, which by the way, has now been pretty much cut in half at this point. So, Peter, what were people ignoring and what does it portend for the future.

So if I look at the markets over the last six months, I think the indices are masking what's really going on, which is this enormous stratification where the low end russells small cap stocks or barely I don't know this afternoon, if they're.

So if I look at the markets over the last six months, I think the indices are masking what's really going on, which is this enormous stratification where the low end russells small cap stocks or barely I don't know this afternoon, if they're.

Up for the years talk about all the time they talk about the small shops.

Up for the years talk about all the time they talk about the small shops.

So for me, and this is an indication of declining confidence and declining success for small businesses. And so I worry that investors, by pouring money into the thoroughbreds, into the Amazon and Apple and Google and Microsoft, are being misled by the fact that things are troublesome below the surface the other four hundred and ninety five companies.

So for me, and this is an indication of declining confidence and declining success for small businesses. And so I worry that investors, by pouring money into the thoroughbreds, into the Amazon and Apple and Google and Microsoft, are being misled by the fact that things are troublesome below the surface the other four hundred and ninety five companies.

The other thing I guess I would go to is that when we talk about rates and we constantly keep going, well, you know, highest rates as seven or eight time, and that time really felt like the bottom was going to come out from under us. It doesn't necessarily feel like that time today that bad. But then again, is it because we're not necessarily really reading what's going on?

The other thing I guess I would go to is that when we talk about rates and we constantly keep going, well, you know, highest rates as seven or eight time, and that time really felt like the bottom was going to come out from under us. It doesn't necessarily feel like that time today that bad. But then again, is it because we're not necessarily really reading what's going on?

Are we missing things?

Are we missing things?

Yeah?

Yeah?

And I think we're still in this unwind from negative interest rates two years ago, and so we tend to look at it on an absolute basis. But it's going to be interesting to see how balanced investors feel when they get their statements at the end of the quarter, where both their stock portfolios.

And I think we're still in this unwind from negative interest rates two years ago, and so we tend to look at it on an absolute basis. But it's going to be interesting to see how balanced investors feel when they get their statements at the end of the quarter, where both their stock portfolios.

I was going to say, a lot of people don't wait to get the statements. They you know, log in when they see red.

I was going to say, a lot of people don't wait to get the statements. They you know, log in when they see red.

I check periodically, but you're right, it's like a reality check of like, it's again a reminder not everything goes up, but when we do go like, is there something though significant when we do make those references back to two thousand and seven, two thousand and eight, which was such a significant time in this country as well as certainly within the financial market universe, is it are we setting up for a period another period that's as rough as some of the stuff we went through there in terms of the markets.

I check periodically, but you're right, it's like a reality check of like, it's again a reminder not everything goes up, but when we do go like, is there something though significant when we do make those references back to two thousand and seven, two thousand and eight, which was such a significant time in this country as well as certainly within the financial market universe, is it are we setting up for a period another period that's as rough as some of the stuff we went through there in terms of the markets.

So I think what's been so interesting in the past two years is we're seeing a concurrent unwind of extreme sentiment in both stocks and bonds. The trade isn't risk on versus risk off, it's risk one versus risk out, and you're seeing that in the growth in money market funds, where money is leaving the market outright, and that's a trend we need to keep a lot of attention on because you know, seven oh eight, other than a few weeks there was this rotation into bonds out of stocks, and that we're not seeing that, even though yields are significantly higher than they were recent one.

So I think what's been so interesting in the past two years is we're seeing a concurrent unwind of extreme sentiment in both stocks and bonds. The trade isn't risk on versus risk off, it's risk one versus risk out, and you're seeing that in the growth in money market funds, where money is leaving the market outright, and that's a trend we need to keep a lot of attention on because you know, seven oh eight, other than a few weeks there was this rotation into bonds out of stocks, and that we're not seeing that, even though yields are significantly higher than they were recent one.

So where's the money going.

So where's the money going.

It's going into money market funds.

It's going into money market funds.

Over five percent in a money market fund and you just said it there until you know you're earning.

Over five percent in a money market fund and you just said it there until you know you're earning.

More than ten year yields today. I mean, so it's it's a really it's cash has become a viable alternative. And as I said, with stocks and bonds moving down in price together that it could start to feed upon it.

More than ten year yields today. I mean, so it's it's a really it's cash has become a viable alternative. And as I said, with stocks and bonds moving down in price together that it could start to feed upon it.

Well state that way.

Well state that way.

Who knows, who knows.

Who knows, who knows.

But I mean at a certain point, bonds are going to become attractive to some of these people, right.

But I mean at a certain point, bonds are going to become attractive to some of these people, right.

So that's the question. If bonds were a bubble, if negative interest rates were a sign of extreme sentiment, then we're likely to see that rising rates. Falling prices don't draw a crowd. That we've seen everybody who is going to buy a bond did, and much as you see when stock market bubbles, unwined, lower price doesn't draw anybody. You get the occasional bounces, but it's a perpetual unwinding machine.

So that's the question. If bonds were a bubble, if negative interest rates were a sign of extreme sentiment, then we're likely to see that rising rates. Falling prices don't draw a crowd. That we've seen everybody who is going to buy a bond did, and much as you see when stock market bubbles, unwined, lower price doesn't draw anybody. You get the occasional bounces, but it's a perpetual unwinding machine.

Is it safe to say we've got about forty five seconds and you're going to come back and stay with us, and we're going to talk some more. But is it safe to say, and I think you mentioned this earlier, we've never come out of a pandemic, We've never come out of a time period like this. We don't really ultimately know how it all settles. We don't.

Is it safe to say we've got about forty five seconds and you're going to come back and stay with us, and we're going to talk some more. But is it safe to say, and I think you mentioned this earlier, we've never come out of a pandemic, We've never come out of a time period like this. We don't really ultimately know how it all settles. We don't.

But let me create a bull case here. You talk out of both sides of my mouth. On Economis's we talked about all this cash going into all the money going into money markets, that then becomes a potential source for further enthusiasm. If sentiment were to bottom.

But let me create a bull case here. You talk out of both sides of my mouth. On Economis's we talked about all this cash going into all the money going into money markets, that then becomes a potential source for further enthusiasm. If sentiment were to bottom.

The cash on the side of cash on the.

The cash on the side of cash on the.

Sideline, and there's a lot of it, I mean, there's an enormous amount of cash sitting there, and so you could have this powerful reversal where the crowd says that was it, that was as bad as it got, and we're back to the races.

Sideline, and there's a lot of it, I mean, there's an enormous amount of cash sitting there, and so you could have this powerful reversal where the crowd says that was it, that was as bad as it got, and we're back to the races.

I mean, if you're saying that, like the S and P five hundred, at forty five hundred, you were regretting not putting some money in. Now it's at forty two hundred and you're like, Okay, maybe it's time, or there could be further to go.

I mean, if you're saying that, like the S and P five hundred, at forty five hundred, you were regretting not putting some money in. Now it's at forty two hundred and you're like, Okay, maybe it's time, or there could be further to go.

Well, and I can create a bull scenario, which is if the dollar is then going to fall, you start to see a declining dollar. That's a huge tailwind for these megacaps.

Well, and I can create a bull scenario, which is if the dollar is then going to fall, you start to see a declining dollar. That's a huge tailwind for these megacaps.

With US as News Congressional reporter Eric Watson on the phone at the Capitol in Washington, DC, still with US, Peter Atwater as a professor of economics at William and Mary and author of the Confidence Matt and Eric, I want to start with you give us some color about what are you hearing. What's the environment in and around the Capitol as we count down to that possible shutdown.

With US as News Congressional reporter Eric Watson on the phone at the Capitol in Washington, DC, still with US, Peter Atwater as a professor of economics at William and Mary and author of the Confidence Matt and Eric, I want to start with you give us some color about what are you hearing. What's the environment in and around the Capitol as we count down to that possible shutdown.

Well, you know, I think really the focus is on the House, where even longtime Republican aids and operators are saying, it's just a chaos. They haven't seen anything like it. It's just an inability really of the House Republicans to come together on even an offer. You know, they've proposed a stop gap spending bill of between thirty one days or forty five days, try to attach that to some border security position provisions that make the President come to terms on a border deal. But they can't even really get the votes to pass that, So they're not even off of first base here, and meanwhile, the Senate's moving forward with his bipartisan deal. You know, it's about six billion dollars in Ukraine aid six billions for disaster fund the government for forty seven days. Now, you know, if the Senate passes that, which it likely could do by Sunday, a government shutdown had already started. But there'd be a lot of pressure on McCarthy to bring that up, but he told his conference he's not going to bring that up today, and so we're really heading to a shutdown.

Well, you know, I think really the focus is on the House, where even longtime Republican aids and operators are saying, it's just a chaos. They haven't seen anything like it. It's just an inability really of the House Republicans to come together on even an offer. You know, they've proposed a stop gap spending bill of between thirty one days or forty five days, try to attach that to some border security position provisions that make the President come to terms on a border deal. But they can't even really get the votes to pass that, So they're not even off of first base here, and meanwhile, the Senate's moving forward with his bipartisan deal. You know, it's about six billion dollars in Ukraine aid six billions for disaster fund the government for forty seven days. Now, you know, if the Senate passes that, which it likely could do by Sunday, a government shutdown had already started. But there'd be a lot of pressure on McCarthy to bring that up, but he told his conference he's not going to bring that up today, and so we're really heading to a shutdown.

Eric, you've seen this play out before, So just give us an idea of if the government does shut down, or maybe we say, at this point when the government does shut down, help us by looking into your crystal ball and giving us an idea of when things open up back open up again.

Eric, you've seen this play out before, So just give us an idea of if the government does shut down, or maybe we say, at this point when the government does shut down, help us by looking into your crystal ball and giving us an idea of when things open up back open up again.

Well, one intriguing possibility is that House Moderates conducted rebellion, put a couple of tours in the Boomberg about that. They have some procedural mechanisms once called the discharge petition, where they could within about nine legislative days, force a vote against speakers wishes on that Senate bill or on their own rival plan, which would actually extend government counting to January eleventh, you know, to be viewed as a betrayal of the party. But they are arguing, well, be a lot of the Conservatives that vote against the warty speaker candidate and vote against House rules and other things, so they've also shown disloyalty. You know. Mike Lawler of New York, one of the moderate Biden district Republicans beating that effort. He can probably bring along five other New York Republicans to help him, and that's all it's really needed to trigger this process. So it could be as little as nine days. There are ways the Speaker could try to support that, you know. On the other hand, I could see a resolution quicker. It just really depends on really on these moderates and whether the Speaker ultimately decides, you know, just the shut does it's not worth the pain, worth risking the House. He could face emotion now as to him at that point to be up to Democrats whether they bail him out. You know, there's probably enough conservatives that he would you know, be able to be oust and without democratic help.

Well, one intriguing possibility is that House Moderates conducted rebellion, put a couple of tours in the Boomberg about that. They have some procedural mechanisms once called the discharge petition, where they could within about nine legislative days, force a vote against speakers wishes on that Senate bill or on their own rival plan, which would actually extend government counting to January eleventh, you know, to be viewed as a betrayal of the party. But they are arguing, well, be a lot of the Conservatives that vote against the warty speaker candidate and vote against House rules and other things, so they've also shown disloyalty. You know. Mike Lawler of New York, one of the moderate Biden district Republicans beating that effort. He can probably bring along five other New York Republicans to help him, and that's all it's really needed to trigger this process. So it could be as little as nine days. There are ways the Speaker could try to support that, you know. On the other hand, I could see a resolution quicker. It just really depends on really on these moderates and whether the Speaker ultimately decides, you know, just the shut does it's not worth the pain, worth risking the House. He could face emotion now as to him at that point to be up to Democrats whether they bail him out. You know, there's probably enough conservatives that he would you know, be able to be oust and without democratic help.

The political process. As we said earlier when we began talking with Peter Atwater at the top of the broadcast. Peter, one of the things that's on the minds of investors is his potential for a government shut down. There is potentially an impact when you don't have government programs, the expenditures going out, you don't have employees being paid. There's an impact. I mean, how do you think about it? I think about William and Marry. They spend a lot of time in terms of policy and the connection of policy and economic impacts.

The political process. As we said earlier when we began talking with Peter Atwater at the top of the broadcast. Peter, one of the things that's on the minds of investors is his potential for a government shut down. There is potentially an impact when you don't have government programs, the expenditures going out, you don't have employees being paid. There's an impact. I mean, how do you think about it? I think about William and Marry. They spend a lot of time in terms of policy and the connection of policy and economic impacts.

Yeah.

Yeah.

So I often say that policy makers follow mood, and this is policy makers in me here now mode. The only thing they care about is their individual survival. And with mood falling is indicated by the markets, that's going to make getting a resolution together very difficult until there is ultimately capitulation where some group is led to believe that they're vulnerable in this process. And what we see today is a lot of between the gerrymandering and the heavy one statedness that we have in terms of political alignment, that vulnerability is not showing up anywhere anytime soon.

So I often say that policy makers follow mood, and this is policy makers in me here now mode. The only thing they care about is their individual survival. And with mood falling is indicated by the markets, that's going to make getting a resolution together very difficult until there is ultimately capitulation where some group is led to believe that they're vulnerable in this process. And what we see today is a lot of between the gerrymandering and the heavy one statedness that we have in terms of political alignment, that vulnerability is not showing up anywhere anytime soon.

So, Peter, your book is called the Confidence Map, Charting a Path from Chaos to Clarity. House is a word I think a lot of people would associate with what's going on, at least in Washington right now. Eric, you might agree or disagree. I don't know. Do Americans still look for confidence in the government or if we kind of said, you know what, it's not happening.

So, Peter, your book is called the Confidence Map, Charting a Path from Chaos to Clarity. House is a word I think a lot of people would associate with what's going on, at least in Washington right now. Eric, you might agree or disagree. I don't know. Do Americans still look for confidence in the government or if we kind of said, you know what, it's not happening.

The bond market would say they don't. I mean that the markets yawn over what's happening in Washington is remarkable to me. But that is the nature of the investing crowd to do.

The bond market would say they don't. I mean that the markets yawn over what's happening in Washington is remarkable to me. But that is the nature of the investing crowd to do.

But is it yawning because they know it's going to get resolved and it's happened before.

But is it yawning because they know it's going to get resolved and it's happened before.

Yeah, yeah, I.

Yeah, yeah, I.

Think we're numb to it. But therein lies the danger that that belief that ultimately Congress comes to its senses is based on the past and the environment. The mood environment, at least right now, suggests that that may not be the best assumption.

Think we're numb to it. But therein lies the danger that that belief that ultimately Congress comes to its senses is based on the past and the environment. The mood environment, at least right now, suggests that that may not be the best assumption.

Eric, come on back in here, because I do it was interesting what Peter said, Like, I do think that there is such a big yawn. I think if I brought this up with a lot of my family members, they'd be like, yeah, okay, tell me something I care about. But I do wonder Eric, in terms of do members of Congress are they getting calls from their constituents. I mean, I'm sure, corporate folks might be if they're not going to get some kind of you know, government contract payout or something. But I just wonder, do lawmakers here from the voting members of the US.

Eric, come on back in here, because I do it was interesting what Peter said, Like, I do think that there is such a big yawn. I think if I brought this up with a lot of my family members, they'd be like, yeah, okay, tell me something I care about. But I do wonder Eric, in terms of do members of Congress are they getting calls from their constituents. I mean, I'm sure, corporate folks might be if they're not going to get some kind of you know, government contract payout or something. But I just wonder, do lawmakers here from the voting members of the US.

Well, you know, some of them say that they aren't hearing some of them say they are. But I would say, we have a couple of really good things in the terminal right now. One is a great story which talks about which lawmakers have the most federal workers in their district, and one of them is Matt Gates is leading that the government shutdown charge. He has the third most number of federal workers in his district. So you know, these are people who are not necessarily acting in the interests of their constituents. I'd also point out another story I wrote on the terminal, which is about the economic impact. You know, we discovered big of the Bloomberg government data at one point nine billion dollars per day and lost their delayed revenue to federal contractors, and that is going to You're going to see service contractors laid off and never get back pay. You're going to see production lines disrupted. And who we talked to in that story, basically, you know, they said you know, this is the time with high inflation, high interest rates, You're going to see a cash flow crunch on these small contractors. You're going to see some companies even go bailly up in a six to seven week shutdown. So, you know, I think the longer it goes on, the longer the clamor the bigger the pain. As your guests said, you know, and someone's going to have to capitulate.

Well, you know, some of them say that they aren't hearing some of them say they are. But I would say, we have a couple of really good things in the terminal right now. One is a great story which talks about which lawmakers have the most federal workers in their district, and one of them is Matt Gates is leading that the government shutdown charge. He has the third most number of federal workers in his district. So you know, these are people who are not necessarily acting in the interests of their constituents. I'd also point out another story I wrote on the terminal, which is about the economic impact. You know, we discovered big of the Bloomberg government data at one point nine billion dollars per day and lost their delayed revenue to federal contractors, and that is going to You're going to see service contractors laid off and never get back pay. You're going to see production lines disrupted. And who we talked to in that story, basically, you know, they said you know, this is the time with high inflation, high interest rates, You're going to see a cash flow crunch on these small contractors. You're going to see some companies even go bailly up in a six to seven week shutdown. So, you know, I think the longer it goes on, the longer the clamor the bigger the pain. As your guests said, you know, and someone's going to have to capitulate.

Eric, you know that is such a really good point. I mean, Peter, I do think about that. Smaller companies, man, they live I feel like from money into money out, like they just live from day to day in terms of their you know, financial books, if you will. I mean, that is a possible cost to all of this.

Eric, you know that is such a really good point. I mean, Peter, I do think about that. Smaller companies, man, they live I feel like from money into money out, like they just live from day to day in terms of their you know, financial books, if you will. I mean, that is a possible cost to all of this.

Yeah, And I think it's yet another moment where those on the left and the right fail to appreciate the vulnerability of those at the bottom and business and individually and ultimately the potential that those at the bottom say enough of both left and right.

Yeah, And I think it's yet another moment where those on the left and the right fail to appreciate the vulnerability of those at the bottom and business and individually and ultimately the potential that those at the bottom say enough of both left and right.

What happens when or if that happens?

What happens when or if that happens?

Peter.

Peter.

So, I think you start to see grassroots movements where you see pockets of both red and blue individuals and businesses that below ends say we've had enough.

So, I think you start to see grassroots movements where you see pockets of both red and blue individuals and businesses that below ends say we've had enough.

I feel like you need to occupy Wall Street or occupy corporate America, you know.

I feel like you need to occupy Wall Street or occupy corporate America, you know.

But I mean maybe that was the Tea Party, or maybe it was the rise of Trump in twenty sixteen.

But I mean maybe that was the Tea Party, or maybe it was the rise of Trump in twenty sixteen.

But I think that and Eric may want to weigh in on this, is that the environment today is uniting, well, uniting everybody goes with similar vulnerabilities.

But I think that and Eric may want to weigh in on this, is that the environment today is uniting, well, uniting everybody goes with similar vulnerabilities.

Well, Eric, we've.

Well, Eric, we've.

Got only about twenty five seconds. What do you say to that about unifying people?

Got only about twenty five seconds. What do you say to that about unifying people?

Well, I think one of the interesting things is how split America is. You've got almost a fifty to fifty country. And that's why the House is the margin is so small, and that's what's really causing the problem here is that you McCarthy's majority. If he had twenty seat majority, this would be the issue we're seeing today. The fact is he's only was four and this is a very small number five to seven who are basically saying, you know, we won't vote for this starting position CR. So I think that's that's an element of it to the small House majority, right, and you know, his personal skills Nancy Pelosi had a small majority to get more through. You know, he just isn't able to get those last couple of votes.

Well, I think one of the interesting things is how split America is. You've got almost a fifty to fifty country. And that's why the House is the margin is so small, and that's what's really causing the problem here is that you McCarthy's majority. If he had twenty seat majority, this would be the issue we're seeing today. The fact is he's only was four and this is a very small number five to seven who are basically saying, you know, we won't vote for this starting position CR. So I think that's that's an element of it to the small House majority, right, and you know, his personal skills Nancy Pelosi had a small majority to get more through. You know, he just isn't able to get those last couple of votes.

That he needs.

That he needs.

Eric Watson, we know you're busy. Thank you so much, Congression reporter at Bloomberg News, Peter Atwater, President of Financial Insights, and check out his book, of course, The Confidence Map. Thank you so much.

Eric Watson, we know you're busy. Thank you so much, Congression reporter at Bloomberg News, Peter Atwater, President of Financial Insights, and check out his book, of course, The Confidence Map. Thank you so much.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us live on YouTube.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern Listen on Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, or watch us live on YouTube.

D Cass chairman and CEO at his investment firm Revolution, co founder of course of AOL which at its peak nearly half of Internet users in the US used AOL, so really.

D Cass chairman and CEO at his investment firm Revolution, co founder of course of AOL which at its peak nearly half of Internet users in the US used AOL, so really.

Just a game.

Just a game.

And he's back with us on zoom from Washington, DC. Steve, it is great to have you back here with Tim and myself on Bloomberg Business Week. You know, it's been a year since you published Rise of the Rest How entrepreneurs and surprising places are building the New American Dream. It's now out in paperback. How is the entrepreneurial spirit and the American dream doing in your view in the pursuit of it?

And he's back with us on zoom from Washington, DC. Steve, it is great to have you back here with Tim and myself on Bloomberg Business Week. You know, it's been a year since you published Rise of the Rest How entrepreneurs and surprising places are building the New American Dream. It's now out in paperback. How is the entrepreneurial spirit and the American dream doing in your view in the pursuit of it?

Well, I think entrepreneurship continues to be alive, and well. And the message of the Rise of the Rest book is it just isn't alive and well just in places like Silicon Valley, it's placed all around the country. They're developing a strong startup ecosystems. And that's helpful because entrepreneurs who historically would would have to feel like they left and leave where they were from to go to the coast to be part of the innovation of come and now can stay and build and scale there and great jobs there. So it's been great to see the momentum over the last decade since we started Rise of the Rest the pandemic, it's certainly been an accelerant, almost a tipping point in terms of more people decided to move other places. So it's seen a dispersion of talent and the spurs of capital and a lot of great ideas that are really kind of reimagining healthcare and food and agriculture and financial services and transportation and education, some of the most important aspects of our lives and some of the biggest industries are really up for grabs in this next next phase.

Well, I think entrepreneurship continues to be alive, and well. And the message of the Rise of the Rest book is it just isn't alive and well just in places like Silicon Valley, it's placed all around the country. They're developing a strong startup ecosystems. And that's helpful because entrepreneurs who historically would would have to feel like they left and leave where they were from to go to the coast to be part of the innovation of come and now can stay and build and scale there and great jobs there. So it's been great to see the momentum over the last decade since we started Rise of the Rest the pandemic, it's certainly been an accelerant, almost a tipping point in terms of more people decided to move other places. So it's seen a dispersion of talent and the spurs of capital and a lot of great ideas that are really kind of reimagining healthcare and food and agriculture and financial services and transportation and education, some of the most important aspects of our lives and some of the biggest industries are really up for grabs in this next next phase.

Rise of the Rest is the name of the book, it's the name of the seed fund as well. Steve, What about rise of the rates that we've seen over this year to what extent is that hurting the startups that you talk to when you interact.

Rise of the Rest is the name of the book, it's the name of the seed fund as well. Steve, What about rise of the rates that we've seen over this year to what extent is that hurting the startups that you talk to when you interact.

With well, certainly when rates are higher, you know there's a little bit of a pullback in terms of the stock market valuations, as we've seen, and they're therefore a pullback in terms of particularly the late stage private market valuations, the pre IPO valuations. So we've seen that dynamic or the last eighteen months or so, which frankly I think is healthy and not all that unexpected a couple of years ago. Things we're getting a little frothy in that later stage and so we're seeing a correction at the growth stage of the market. On the earlier seed side, it's not quite the same impact. And particularly in these rises of the rest cities. The valuation of the seed investments we've done with our rides the Rest Fund, and so far we've done two hundred over two hundred investments in one hundred different cities. Valuations tend to be about half of what the valuations are for comparable companies at the seed stage. In places like Silicon Valley, it's a classics supply and demand so much capitals focused on venture capital, focused on Silicon Valley, not enough on other parts of the country, So that dynamics still creates a great opportunity for investors who are willing to do the extra work to identify promising entrepreneurs tackling big industries in dozens of cities all around the country.

With well, certainly when rates are higher, you know there's a little bit of a pullback in terms of the stock market valuations, as we've seen, and they're therefore a pullback in terms of particularly the late stage private market valuations, the pre IPO valuations. So we've seen that dynamic or the last eighteen months or so, which frankly I think is healthy and not all that unexpected a couple of years ago. Things we're getting a little frothy in that later stage and so we're seeing a correction at the growth stage of the market. On the earlier seed side, it's not quite the same impact. And particularly in these rises of the rest cities. The valuation of the seed investments we've done with our rides the Rest Fund, and so far we've done two hundred over two hundred investments in one hundred different cities. Valuations tend to be about half of what the valuations are for comparable companies at the seed stage. In places like Silicon Valley, it's a classics supply and demand so much capitals focused on venture capital, focused on Silicon Valley, not enough on other parts of the country, So that dynamics still creates a great opportunity for investors who are willing to do the extra work to identify promising entrepreneurs tackling big industries in dozens of cities all around the country.

Well, and that's a really good point that you talked about all the innovation that's going on in other cities beyond Silicon Valley. Having said that, the collapse of Silicon Valley Bank and the fallout, what did you see as a result of that in terms of the work that you're doing in the investments that you're doing or none.

Well, and that's a really good point that you talked about all the innovation that's going on in other cities beyond Silicon Valley. Having said that, the collapse of Silicon Valley Bank and the fallout, what did you see as a result of that in terms of the work that you're doing in the investments that you're doing or none.

Mean, it was a problem, no question. Even though it's called Silicon Valley Bank or SVB, actually banked startups all over the country, not just in Silicon Valley, and about half of the startups and about half of the venture firms in America or back by banked by SVB. So it's been very unhelpful. A number of firms are trying to fill the void and offer different products and services to both the venture funds and to the entrepreneurs, but it's certainly been a negative this year.

Mean, it was a problem, no question. Even though it's called Silicon Valley Bank or SVB, actually banked startups all over the country, not just in Silicon Valley, and about half of the startups and about half of the venture firms in America or back by banked by SVB. So it's been very unhelpful. A number of firms are trying to fill the void and offer different products and services to both the venture funds and to the entrepreneurs, but it's certainly been a negative this year.

Hey, one thing we really wanted to ask you and was about what's going on in terms of regulation. We've been talking a lot about the FTC suit against Amazon, right anti trust case. We've all been kind of waiting for this, and the accusations are that Amazon is monopolizing the online marketplace services by degrading quality for shoppers and overcharging sellers. How do you think about this.

Hey, one thing we really wanted to ask you and was about what's going on in terms of regulation. We've been talking a lot about the FTC suit against Amazon, right anti trust case. We've all been kind of waiting for this, and the accusations are that Amazon is monopolizing the online marketplace services by degrading quality for shoppers and overcharging sellers. How do you think about this.

Well, I haven't read the actual case obviously, as you said, it's been expected for some time. The FTC has gotten more aggressive on big tech.

Well, I haven't read the actual case obviously, as you said, it's been expected for some time. The FTC has gotten more aggressive on big tech.

And that good.

And that good.

Is that good that they've got.

Is that good that they've got.

Big more, more more scrutiny of big tech and it gets healthy. My focus is, as you know, is around the new companies, the entrepreneurs, the insurgents that want to take on some of the bigger incumbents, and making sure that there's an environment that allows innovation to floorish entrepreneurs to be successful, including in areas of e commerce. Or have a similar case with with Google on some issues related to the search. I think that scrutiny is appropriate. Exactly what happens in each court case obviously needs to kind of just you know, have to see how it plays out. But I think it is important that we make sure we're airing on the site as a nation of making sure entrepreneurship can flourish everywhere. And you know, big tech doesn't just get bigger, including by the way, with AI. One of the one of the big debates here in Washington around AI as it gets more attention, is is it going to end up being a few big companies getting even bigger or is it going to be a broader, more dispersed innovation ecosystem a little bit more on the open source side. And so I will see how that plays out over the coming year. But the Internet is not so important. Technology so important. Every industry really is now tech enabled. Every company really is in some ways a tech company. It's not at all surprising that there's more anti trust scrutiny.

Big more, more more scrutiny of big tech and it gets healthy. My focus is, as you know, is around the new companies, the entrepreneurs, the insurgents that want to take on some of the bigger incumbents, and making sure that there's an environment that allows innovation to floorish entrepreneurs to be successful, including in areas of e commerce. Or have a similar case with with Google on some issues related to the search. I think that scrutiny is appropriate. Exactly what happens in each court case obviously needs to kind of just you know, have to see how it plays out. But I think it is important that we make sure we're airing on the site as a nation of making sure entrepreneurship can flourish everywhere. And you know, big tech doesn't just get bigger, including by the way, with AI. One of the one of the big debates here in Washington around AI as it gets more attention, is is it going to end up being a few big companies getting even bigger or is it going to be a broader, more dispersed innovation ecosystem a little bit more on the open source side. And so I will see how that plays out over the coming year. But the Internet is not so important. Technology so important. Every industry really is now tech enabled. Every company really is in some ways a tech company. It's not at all surprising that there's more anti trust scrutiny.

Did it never feel like to you that AO, well, in your days of founding and running AOL was so big that it could have faced more anti trust scrutiny.

Did it never feel like to you that AO, well, in your days of founding and running AOL was so big that it could have faced more anti trust scrutiny.

No, we actually did, and some of the News Corp And others at one point, you know, filed suits saying AOL had too much control of the Internet. And even when we merged with Time Warner, the Microsoft at and t others were trying to block the deal with that you know, that argument, and so in that particular case, obviously I hate to say it, but for a whole host of reasons, AOL failed by the wayside, new entrants including you know, Google and Facebook and others kind of felt, you know, took over. And it's because those news companies were able to start, They were able to raise the venture capital or were not barriers to entry to allow them to start. So that's the philosophy we need going forward. Celebrate the successes we have in our country, including some of these great companies Amazon and Google and so many many others, but how do we make sure we're also creating environments so more of those companies can be the big companies of tomorrow, not just on the coast, not just in Silicon Valley, but all over the country, which obviously why I wrote the book Prize of the Rest.

No, we actually did, and some of the News Corp And others at one point, you know, filed suits saying AOL had too much control of the Internet. And even when we merged with Time Warner, the Microsoft at and t others were trying to block the deal with that you know, that argument, and so in that particular case, obviously I hate to say it, but for a whole host of reasons, AOL failed by the wayside, new entrants including you know, Google and Facebook and others kind of felt, you know, took over. And it's because those news companies were able to start, They were able to raise the venture capital or were not barriers to entry to allow them to start. So that's the philosophy we need going forward. Celebrate the successes we have in our country, including some of these great companies Amazon and Google and so many many others, but how do we make sure we're also creating environments so more of those companies can be the big companies of tomorrow, not just on the coast, not just in Silicon Valley, but all over the country, which obviously why I wrote the book Prize of the Rest.

So how do we do that? Though, I mean, we spoke to Diana Henriquez last week, who you know, compared the power companies of the nineteen twenties and nineteen thirties and the regulation of the power companies to the tech companies. The huge tech giants today, and she says government needs to get involved with them. What does the government need to do in order to ensure that the rest can rise?

So how do we do that? Though, I mean, we spoke to Diana Henriquez last week, who you know, compared the power companies of the nineteen twenties and nineteen thirties and the regulation of the power companies to the tech companies. The huge tech giants today, and she says government needs to get involved with them. What does the government need to do in order to ensure that the rest can rise?

Well, I'm marketing, I'm coach sharing the National Advisory Council on Innovation and Entrepreneurship here here in Washington, and we're working on a National Entrepreneurship Strategy which we'll be releasing later this year. And there's a number of facets to it. Some relate to the talent, including immigration policy. Some relate to access to capital, including some of the work around prize of the rest. Some of it relates to making sure you know, there's continued investment in regional hubs. Congress passed the Chips and Science Act a couple of years ago and authorized ten billion dollars for regional hubs, with its only so far appropriated five hundred million dollars of it. Someone's making sure America continues to invest in the R and D, the technologies of the future to create the industries of the future. So there's many facets to it, but the overarching theme I think is how do you make sure this next generational entrepreneurs can start and scale and do it anywhere in the country, not just a few big companies being able to innovate, or only people in a few places like silicate values. So it's trying to create a more inclusive innovation economy has to be a key part of the answer, Steve.

Well, I'm marketing, I'm coach sharing the National Advisory Council on Innovation and Entrepreneurship here here in Washington, and we're working on a National Entrepreneurship Strategy which we'll be releasing later this year. And there's a number of facets to it. Some relate to the talent, including immigration policy. Some relate to access to capital, including some of the work around prize of the rest. Some of it relates to making sure you know, there's continued investment in regional hubs. Congress passed the Chips and Science Act a couple of years ago and authorized ten billion dollars for regional hubs, with its only so far appropriated five hundred million dollars of it. Someone's making sure America continues to invest in the R and D, the technologies of the future to create the industries of the future. So there's many facets to it, but the overarching theme I think is how do you make sure this next generational entrepreneurs can start and scale and do it anywhere in the country, not just a few big companies being able to innovate, or only people in a few places like silicate values. So it's trying to create a more inclusive innovation economy has to be a key part of the answer, Steve.

We're often so critical of other countries and their supportive industries. I'm thinking about China specifically, But you know, we are increasingly seeing the US, whether it's in the semiconductor space, whether it's in the EV or the energy transition support industries here in the United States. Should we especially when it comes to some of the more newer innovative areas.

We're often so critical of other countries and their supportive industries. I'm thinking about China specifically, But you know, we are increasingly seeing the US, whether it's in the semiconductor space, whether it's in the EV or the energy transition support industries here in the United States. Should we especially when it comes to some of the more newer innovative areas.

Yes, and again there's sort of this long debate about industrial policy, long debate about how much of a role should government play. But the reality is the Internet wouldn't exist if the government hadn't funded you know, DARPA research agency a half a century ago and then open it up, commercialized access to the Internet, and broken up the phone company, so the costs of communications, you know, came down. There are a number of decisions that really unleashed the Internet. So having that government role, I think is important that we the innovators need to respect the role of policy makers. I actually think in the next decade. The two mega themes are going to be place and policy that we're focused here at revolution around place, particularly Rise the Rest. We think a lot of the big companies that tomorrow will have a policy aspect to them because of the nature of the industries up for grabs, and because Congress has passed legislation about three trillion dollars of legislation, the Chips and Science Act, the Inflation Reduction Act, the Bipartisan Infrastructure Bill that's going to really invest in these industries in a big way and create opportunities for investors as well as ensuring that America has the right infrastructure, has the right technologies to continue to be the most innovative entrepreneurtion in the world.

Yes, and again there's sort of this long debate about industrial policy, long debate about how much of a role should government play. But the reality is the Internet wouldn't exist if the government hadn't funded you know, DARPA research agency a half a century ago and then open it up, commercialized access to the Internet, and broken up the phone company, so the costs of communications, you know, came down. There are a number of decisions that really unleashed the Internet. So having that government role, I think is important that we the innovators need to respect the role of policy makers. I actually think in the next decade. The two mega themes are going to be place and policy that we're focused here at revolution around place, particularly Rise the Rest. We think a lot of the big companies that tomorrow will have a policy aspect to them because of the nature of the industries up for grabs, and because Congress has passed legislation about three trillion dollars of legislation, the Chips and Science Act, the Inflation Reduction Act, the Bipartisan Infrastructure Bill that's going to really invest in these industries in a big way and create opportunities for investors as well as ensuring that America has the right infrastructure, has the right technologies to continue to be the most innovative entrepreneurtion in the world.

Got to say, Steve, every time you're on you just leave us wanting more, So come back soon and good luck with the paper book, a paperback version, I should say, Rise of the Rest.

Got to say, Steve, every time you're on you just leave us wanting more, So come back soon and good luck with the paper book, a paperback version, I should say, Rise of the Rest.

How entrepreneur, thank you?

How entrepreneur, thank you?

Okay, be well, How entrepreneurs and surprising places are building the new American dream.

Okay, be well, How entrepreneurs and surprising places are building the new American dream.

Of course, Steve Case, you're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern on Bloomberg Radio, the Bloomberg Business app and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa, play Bloomberg eleven thirty.

Of course, Steve Case, you're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from three to six Eastern on Bloomberg Radio, the Bloomberg Business app and YouTube. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa, play Bloomberg eleven thirty.

Paul Sews is with us. He's founder and CEO at Dekasonic. It's firm then invest in and advisors around NFTs, cryptocurrencies, blockchain infrastructure, the metaversity, centralized finance, and more so, it's really kind of on it when it comes to I feel like innovation in a big way. In other words, the world of what's become known to many as Web three.

Paul Sews is with us. He's founder and CEO at Dekasonic. It's firm then invest in and advisors around NFTs, cryptocurrencies, blockchain infrastructure, the metaversity, centralized finance, and more so, it's really kind of on it when it comes to I feel like innovation in a big way. In other words, the world of what's become known to many as Web three.

Yeah.

Yeah.

Paul joins us on Zoom in Chicago this afternoon. Paul, give us your reaction to facebooker keep calling it Facebook, Carol, Yeah, stop that platforms.

Paul joins us on Zoom in Chicago this afternoon. Paul, give us your reaction to facebooker keep calling it Facebook, Carol, Yeah, stop that platforms.

Today, Tim, Carrol, thanks for having me again. Very excited to be here and talking about meta. Certainly, their announcements to tape points to what early stage vcs are investing in this intersection of technologies. It's where two or more disruptive technologies converge, in this case AI and mixed reality chatbots from Tom Brady with their Quest Pro three launch that's upcoming, it's generating a lot of consumer excitement. We see this in history on how Apple also innovated on smartphones, intersecting cell your voice with consumer mobile data.

Today, Tim, Carrol, thanks for having me again. Very excited to be here and talking about meta. Certainly, their announcements to tape points to what early stage vcs are investing in this intersection of technologies. It's where two or more disruptive technologies converge, in this case AI and mixed reality chatbots from Tom Brady with their Quest Pro three launch that's upcoming, it's generating a lot of consumer excitement. We see this in history on how Apple also innovated on smartphones, intersecting cell your voice with consumer mobile data.

So I mean, I keep trying to figure out, like I get it to some extent, but I do try to figure out, like, how does this really move the needle? Akin to the Internet, which really did move the needle, and how we do so much in our world. It's kind of amazing, right, how ubiquitous it is to a kind of almost everything we do, whether it's at work, at play, have you? Is that how we need to be thinking about the impact of chatbots and generative AI.

So I mean, I keep trying to figure out, like I get it to some extent, but I do try to figure out, like, how does this really move the needle? Akin to the Internet, which really did move the needle, and how we do so much in our world. It's kind of amazing, right, how ubiquitous it is to a kind of almost everything we do, whether it's at work, at play, have you? Is that how we need to be thinking about the impact of chatbots and generative AI.

Ubiquity and the Internet that happened overnight. I think it took about fifteen twenty years to really go mainstream, and we're seeing Facebook and Meta also make these long term investments on an immersive experience. Apple has their Vision Pro launch upcoming as well. It's much more expensive than Meta, and so they believe Meta believes that with the deflation in device costs, this will accelerate mainstream adoption.

Ubiquity and the Internet that happened overnight. I think it took about fifteen twenty years to really go mainstream, and we're seeing Facebook and Meta also make these long term investments on an immersive experience. Apple has their Vision Pro launch upcoming as well. It's much more expensive than Meta, and so they believe Meta believes that with the deflation in device costs, this will accelerate mainstream adoption.

You know one thing that I wonder though, and we were just talking to Steve Case, founder of AOL, who knows a thing or two about starting companies and building them all about this because he's got his the paperback out of his new book that he wrote last year. Are is the environment conducive to startups actually winning in this day and age? I mean, look at this. You have, you know, well companies out there that are doing really cool stuff in Web three and AI in the metaverse. But you know Facebook is doing its developers conference today and sucking a lot of the air out of the room.

You know one thing that I wonder though, and we were just talking to Steve Case, founder of AOL, who knows a thing or two about starting companies and building them all about this because he's got his the paperback out of his new book that he wrote last year. Are is the environment conducive to startups actually winning in this day and age? I mean, look at this. You have, you know, well companies out there that are doing really cool stuff in Web three and AI in the metaverse. But you know Facebook is doing its developers conference today and sucking a lot of the air out of the room.

The only data point I could sure is we're seeing success in our portfolio companies that are winning. They are taking this approach of the intersection of these technologies. It's not so obvious for a large company to be pursuing blockchain and AI convergence, metaverse and Web three intersection, metaverse and blockchain intersection, mobile and Web three intersection. But we are seeing pockets as an early stage investor, that success and trajectory upwards of one hundred million dollars in revenues. And that might not move the dial for a multi trillion dollar company, but it's certainly very interesting for early stage vcs.

The only data point I could sure is we're seeing success in our portfolio companies that are winning. They are taking this approach of the intersection of these technologies. It's not so obvious for a large company to be pursuing blockchain and AI convergence, metaverse and Web three intersection, metaverse and blockchain intersection, mobile and Web three intersection. But we are seeing pockets as an early stage investor, that success and trajectory upwards of one hundred million dollars in revenues. And that might not move the dial for a multi trillion dollar company, but it's certainly very interesting for early stage vcs.

Where are you seeing or where are you investing the most in? Is it NFTs? Is it crypto generally speaking? Blockchain? Is it the metaverse? Is it centralized finance, Give us a little bit more specificity in terms of your interest and really the investment interest right now where you want to.

Where are you seeing or where are you investing the most in? Is it NFTs? Is it crypto generally speaking? Blockchain? Is it the metaverse? Is it centralized finance, Give us a little bit more specificity in terms of your interest and really the investment interest right now where you want to.

Commit Dekasnic is a fun focus on the mainstream adoption of blockchain, Web three and metaverse. A lot of those use cases are non financial use cases and it does bring in global brands with their global communities around digital collectibles. We are seeing a lot of customer heat in this area, a lot of interest and a lot of revenues starting to scale in these non financial use cases like what for example, in our portfolio company, we have Spaceport. They are working at the intersection of metaverse and blockchain. Spaceport is accelerating deals with creators in blockchain verified royalties very timely as the writer strike focuses on AI and creation. Mobile and web three is another intersection. Paragon provides a mobile first way to experience digital collectibles collectibles like the Starbucks Odyssey program. This is very important as gen Z prefers mobile access to their crypto assets. Yeah, and lastly, where we have an investment in Marariri, they have a tokenized network to deliver mixed reality experiences. This is the intersection of Metaverse and Web three very important as uh. You know, the VR goggles require high fidelity experiences, so they will work with Disney and vision Pro and Meta around these goggles.

Commit Dekasnic is a fun focus on the mainstream adoption of blockchain, Web three and metaverse. A lot of those use cases are non financial use cases and it does bring in global brands with their global communities around digital collectibles. We are seeing a lot of customer heat in this area, a lot of interest and a lot of revenues starting to scale in these non financial use cases like what for example, in our portfolio company, we have Spaceport. They are working at the intersection of metaverse and blockchain. Spaceport is accelerating deals with creators in blockchain verified royalties very timely as the writer strike focuses on AI and creation. Mobile and web three is another intersection. Paragon provides a mobile first way to experience digital collectibles collectibles like the Starbucks Odyssey program. This is very important as gen Z prefers mobile access to their crypto assets. Yeah, and lastly, where we have an investment in Marariri, they have a tokenized network to deliver mixed reality experiences. This is the intersection of Metaverse and Web three very important as uh. You know, the VR goggles require high fidelity experiences, so they will work with Disney and vision Pro and Meta around these goggles.

I gotta tell you this stuff still seems so niche to me. It's not like we're all running around wearing these goggles. It's uh, when does it become mainstream?

I gotta tell you this stuff still seems so niche to me. It's not like we're all running around wearing these goggles. It's uh, when does it become mainstream?

Today?

Today?

A lot of goggles are gaming focused. Meta also announced smart sunglasses today and that might have a higher adoption rate initially. You know, Crypto today is roughly fifty two million Americans, A lot of them seventy five percent of them make less than one hundred k a year. Right, this is data from Coinbase.

A lot of goggles are gaming focused. Meta also announced smart sunglasses today and that might have a higher adoption rate initially. You know, Crypto today is roughly fifty two million Americans, A lot of them seventy five percent of them make less than one hundred k a year. Right, this is data from Coinbase.

I do want to bring up an article that our own Alex Brinka wrote earlier today. Snap is set to shutter it's business focused AR unit that was just launched this year. So what you know Facebook and Slash Meta Platforms is doing. Snap is saying, okay, we're not longer doing.

I do want to bring up an article that our own Alex Brinka wrote earlier today. Snap is set to shutter it's business focused AR unit that was just launched this year. So what you know Facebook and Slash Meta Platforms is doing. Snap is saying, okay, we're not longer doing.

That augmented reality.

That augmented reality.

Yeah. I think Snap has a great camera experience and they've certainly scaled AI chatbots that has influenced Facebook to get into this area.

Yeah. I think Snap has a great camera experience and they've certainly scaled AI chatbots that has influenced Facebook to get into this area.

Well this, I'm sorry, Tim, I was just gonna say, this is the areas unit short for augmented Reality for Enterprise services. It was just announced back in March.

Well this, I'm sorry, Tim, I was just gonna say, this is the areas unit short for augmented Reality for Enterprise services. It was just announced back in March.

So I wonder too, Paul, the news from Meta today, does that we just got about twenty five seconds left here? Does that somehow make you say, oh, wait, maybe we should be also doing this because of what Meta said today.

So I wonder too, Paul, the news from Meta today, does that we just got about twenty five seconds left here? Does that somehow make you say, oh, wait, maybe we should be also doing this because of what Meta said today.

Just very quickly, very quickly, we will assess the news and look at some of the gaming companies that might be optimized for the Quest Pro three. This was Mark's focus of his demos today, and there will be new gameplay focused on you know, Xbox and Meta integration.

Just very quickly, very quickly, we will assess the news and look at some of the gaming companies that might be optimized for the Quest Pro three. This was Mark's focus of his demos today, and there will be new gameplay focused on you know, Xbox and Meta integration.

All right, Well, good to check in with you on a day where we've had some news and you certainly have some overview insight into all of it. Paul, of course, founder and CEO at Dekasonic, joining us on zoom in Chicago, Carol Master, Tim Stenevic, and this is Bloomberg.

All right, Well, good to check in with you on a day where we've had some news and you certainly have some overview insight into all of it. Paul, of course, founder and CEO at Dekasonic, joining us on zoom in Chicago, Carol Master, Tim Stenevic, and this is Bloomberg.

Marco Journal. Now about you.

Marco Journal. Now about you.

Let me drive, no, no, no, honey, please, I.

Let me drive, no, no, no, honey, please, I.

Want to try.

Want to try.

It's a good question.

It's a good question.

Good, good drive, good clothes to me. Well b on on Bloomberg Radio.

Good, good drive, good clothes to me. Well b on on Bloomberg Radio.

All right, you know it's going to drive you crazy, Tim Stenebek.

All right, you know it's going to drive you crazy, Tim Stenebek.

This market environment, Yeah, This is enough to drive crazy.

This market environment, Yeah, This is enough to drive crazy.

Poor Tim. Like, we're getting ready for our simulcast with our TV colleagues and we have to have you know, decliners and gainers.

Poor Tim. Like, we're getting ready for our simulcast with our TV colleagues and we have to have you know, decliners and gainers.

You know, we're organized. We get this stuff done before the show. We're like, you know, what's down three percent, that's not going to change.

You know, we're organized. We get this stuff done before the show. We're like, you know, what's down three percent, that's not going to change.

Yes, it is on a daylight today. Thanks Meta platform definitely an I know we are kind of rolling over again.

Yes, it is on a daylight today. Thanks Meta platform definitely an I know we are kind of rolling over again.

Yeah, it's done, all right, so let's get to it.

Yeah, it's done, all right, so let's get to it.

Our drive to the close guest to light it up. Back with us, Stephanie Pierce, she's CEO of Dreyfus Melon and Exchange traded funds at B and Y Melan Investment Management. As we said, back with us, joining us on zoom in New York City. Stephanie, how are you, Carol.

Our drive to the close guest to light it up. Back with us, Stephanie Pierce, she's CEO of Dreyfus Melon and Exchange traded funds at B and Y Melan Investment Management. As we said, back with us, joining us on zoom in New York City. Stephanie, how are you, Carol.

It's so great to see you. Hello, Tim, Carol it's here.

It's so great to see you. Hello, Tim, Carol it's here.

It's great to have you back with us. It is kind of another wacky trading day, and we, you know, talk about the concerns coming at investors, whether it's the possibility of a government shutdown here in the US, US, the UAW strike going on longer, you know, the worries over this higher rate environment. It feels like investors aren't quite sure what to do. How do you kind of think about what are the important macro trends to pay attention to?

It's great to have you back with us. It is kind of another wacky trading day, and we, you know, talk about the concerns coming at investors, whether it's the possibility of a government shutdown here in the US, US, the UAW strike going on longer, you know, the worries over this higher rate environment. It feels like investors aren't quite sure what to do. How do you kind of think about what are the important macro trends to pay attention to?

Well, As you know, Carol, we sit here in our short end of the curve world where we talk about a lot of really interesting things in that space, you know, from a macro perspective. As you know, we are surrounded by smart people in terms of our economists and our portfolio managers, and we actually think cash is a pretty good place to be right now. We're certainly in this I would call it, you know, higher for longer environment than people thought a few months ago.

Well, As you know, Carol, we sit here in our short end of the curve world where we talk about a lot of really interesting things in that space, you know, from a macro perspective. As you know, we are surrounded by smart people in terms of our economists and our portfolio managers, and we actually think cash is a pretty good place to be right now. We're certainly in this I would call it, you know, higher for longer environment than people thought a few months ago.

There's probably one more high ahead of us.

There's probably one more high ahead of us.

And at some point here we want to start positioning and hedging portfolios for lower rates. But we're not quite there yet, right and so you know that's certainly something we're guiding investors to think about. Now is the time to start extending duration. Of course, we in cash land, you know, extending duration means about a year for us, but certainly feeling really good about cash as a very attractive investment, giving other asset classes a run for its money, so to speak.

And at some point here we want to start positioning and hedging portfolios for lower rates. But we're not quite there yet, right and so you know that's certainly something we're guiding investors to think about. Now is the time to start extending duration. Of course, we in cash land, you know, extending duration means about a year for us, but certainly feeling really good about cash as a very attractive investment, giving other asset classes a run for its money, so to speak.

We know.

We know.

The thing is, I was saying this earlier to Peter Attwater. I mean, we've been in an environment where all your cash has looked like a pretty good investment, but you missed out on a run up of close to twenty percent in the S and P five founder that since given back quite a bit of those gains. How do you know when the right time is to get back in even if cash continues to be attractive.

The thing is, I was saying this earlier to Peter Attwater. I mean, we've been in an environment where all your cash has looked like a pretty good investment, but you missed out on a run up of close to twenty percent in the S and P five founder that since given back quite a bit of those gains. How do you know when the right time is to get back in even if cash continues to be attractive.

Now, it's a very very good point.

Now, it's a very very good point.

One of the things that we advise when we think about clients that we work with across our ecosystem at the YMEL and we have a wealth management business, we have pershing, we have our very large investment management business. So from a fiduciary perspective, you know, timing the market is always a challenge, right, we know we all know the statistics about how well that works out.

One of the things that we advise when we think about clients that we work with across our ecosystem at the YMEL and we have a wealth management business, we have pershing, we have our very large investment management business. So from a fiduciary perspective, you know, timing the market is always a challenge, right, we know we all know the statistics about how well that works out.