Stephanie ruhle is here with us for exclusive interview.
Thank you, adam.
He did just wrap up.
Before we get into your trading idea, let's talk about macro.
If you are a macro investor right now, how do you survive it?
It has been a frustrating year.
Part of it is that you reset your mind -- your mindset for the next five weeks a six-week data series.
Unfortunately, the ranges have gotten tighter and tighter and tighter.
Most macro funds seem to be chopping themselves up and losing small amounts of money.
If the volatility stays low?
You can predict that it will stay low for a while.
Emerging market kerry works.
Global market equity rally.
What is worse with volatility being low is we know it is at an all-time low and there is a consensus around why it is low, which makes me nervous.
When you look at your overall business do you think you want to put more resources and equities on higher equity teams to chase the market?
There will be a shift at some point and i think the equity markets are vibrant.
There has been a tremendous amount of rotation this year.
Not everyone has done well in them, but there is certainly sector opportunity.
How hard is it?
Without the good fortune to simply be a long-term investor, if you have to be an active trader, how do you survive here?
It has not been the easiest time.
If this job was easy, we would all be rich.
There are times when it is tougher than others.
Wisdom is hopefully what it is top two/-- what it is tough to/. take it to the table until the markets start trending.
You are avoiding the big trends and you are wearing the shirt -- i happen to love that shirt -- so bad, it's good.
Just a few years ago you and i were at the conference where batista stood on the stage and talked about what an encounter -- what an incredible country it is, but they have not had a good run.
Things have gone from bad to worse.
Inflation remains sticky.
Gdp remains down.
The unemployment rate stays low.
It is just not a good mix.
Because pessimism is at an all-time high, every local that you speak to is wildly depressed.
When everyone is bullish, you at times want to think about taking the other side.
And everyone is pessimistic and there is a possible catalyst for change that will either be the pressure forcing the president to reform the agenda or, more likely, her going further and losing the election.
Are there any signals that make you believe they will turn a corner?
Everything you are pointing out showed that it was the worst for the olympics ever.
From our point of view it will only get worse.
From a trade perspective the most promising thing is those poll numbers continue to plummet.
If you had asked a brazilian, if you had told her brazilian a few months ago there was a shot that there would be a change in the election?
They would have said five out of 100. now our view is that they -- that she is going to lose the election.
If we do this now, you may have to go through a rough year.
I actually think that the timing is now.
When people realize that there is a good chance she will lose, brazil will host the world cup and have a temporary spike in inflation.
It is hard to be a president in a country like brazil with a history of hyperinflation and not being able to get inflation under control.
I think it will make her popularity go lower.
She is praying for the soccer team, like so many brazilians, but our real, serious sense is that she is on a one-way ticket lower in the polls.
As the polls go lower, brazilian assets get higher.
What happens if the olympics is a with -- whiff?
Tough medicine to take.
Markets discount good policy.
In the end the opposition comes in and they make it clear through back channels that they will try to get remedial with finance ministers.
Listen, does the trade last?
Only if they actually happen.
When you are talking about this trade on long-term, it makes me think about smaller hedge funds.
You guys that don't have the opportunity to make the big, long-term investments, the market has been really difficult this year.
Is your overall opinion that the hedge fund space to have a tough time performing this year?
I think that both were big and small investments it has been a tough start to the year.
Fighting out of a whole is harder than starting with five percent, six percent, 10% of the house's money on your table.
So, it is going to be a tougher year.
Let's talk about bitcoins for a moment.
You have been one of the biggest supporters of bitcoins, something criticized by the masses.
Why are you buying into the bc, brother?
Our firm has made some small investments.
Your own money is more than the firm's money.
Intellectually it is a fascinating story.
If you look at the market cap for bitcoin, it is for the five billion dollars.
-- $4 billion to $5 billion.
My college roommate lives in barbados.
The smartest guy we went to school with.
He full-time works on derivatives for bitcoin.
There is this open source community with huge brain power and lots of seed money going in.
From benchmark to other companies, there is a lot of smart money going out.
I have never seen a smart project with more human capital going into it.
I want to bet on it for that alone.
Are you concerned that all that this could be netscape?
A great idea, but that did point itself will be a failure in its first chapter?
I think there is first mover advantage, but there are risks.
There will be a democratization of finance at some point.
What do you mean?
Things like peer to peer lending.
The banks, their biggest i think threat is the same thing that has happened in so many other industries now happening to the finance industry, right?
Mediating the large players, i think that bitcoin is just one of the threats that the finance industry the way that we know it has worked against it.
Regulation, bitcoin, supply-side, they all hurt banks.
You came from goldman sachs.
You interact with thanks every day of the week.
What is their plight right now?
Banks will look more like utilities.
They will be nicer places to work.
But regulators certainly do not want them to grow.
You have seen it with citibank returning capital and not being able to.
So, i think that banks are going to be in less sexy businesses and will run more regulated but higher risks.
Banks are like torture says right now.
The volker rule has worked.
I think that there is very little risk in any of our banks right now.
They run far less risk to equity than he did five or six years ago.
In terms of human capital or business lines, are there any areas where you are looking to increase business or people are getting out?
The money management is this, the alternative investment is about talent.
We are always looking to pick up talent.
I think that you would rather bet on the talent than on a specific niche that someone is in.
Lots of talents are leaving the banks because of compensation structure and regulation.
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