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00:00> > IN LIKE A LION OUT LIKE A LAMB. THE MARKET THAT BEGAN THE RECORD YEAR -- THE YEAR AT A RECORD HIGH CLOSING OUT BELOW. THE FINAL TRADING DAY OF THE 12 MONTH OF 2022. > > DID YOU SAY LAMB? > > IT'S BEEN SLAUGHTERED THIS YEAR. I LOVE YOUR ANALOGIES. > > IT EPITOMIZES THE ENTIRE YEAR WITH TECH DRAGGING EVERYTHING DOWN. ARE WE LOOKING AT THIS ON A DAILY BASIS TODAY? THERE ARE MOVERS TO THE DOWNSIDE TODAY. > > DO WE CARE ABOUT THE MOVERS? > > VERY OPPOSITE OF YESTERDAY. > > WE ARE RIGHT AROUND 3800 AT THE S & P 500. WE ARE DOWN ABOUT 8% HERE. -- A PERCENT HERE. THE REAL FEMININE SHIP REMEMBER WE HAD THE BIG RALLY. PEOPLE JUST DECIDED KNOW IT'S JUST NOT HAPPENING. > > WAS IT JAY POWELL THAT DECIDED THAT? > > JAY POWELL DECIDED EVERYTHING. IT WAS A YEAR AGO TODAY WE WERE IN HERE FOR THE ENTIRE WEEK BETWEEN CHRISTMAS AND YEARS IT WAS RECORD AFTER RECORD FOR THE S & P 500. > > IT'S A REMINDER THAT MARKETS DON'T ALWAYS GO UP. FOLKS ARE COMING OFF THE FINANCIAL CRISIS WHERE WE THOUGHT 90 IS GOING TO BE CHEAP. WE ARE GOING TO SEE ANY MICK GROWTH BUT SOME GROWTH. IT'S BEEN A VERY DIFFERENT TOWN CERTAINLY THIS YEAR. VERY HARD TO FIND SOME GAINERS SO PLEASE DO NOT JUDGE ME. I DON'T REALLY HAVE A REASON WHY, I NOW. YOU ARE IMPRESSED I CAN TELL. TOP OF THE S & P 500, THE VIDEO GAMING COMPANY NO REASON WHY I WILL SAY IS DON'T MORE THAN 40% SO FAR THIS YEAR I'M GOING TO SOUND LIKE A BROKEN RECORD. WE DID HAVE TEA STUFF RESEARCH COME BACK ON THE STOCK. ALMOST 103 IN TODAY'S TRADE. GOING TO PUT THAT OUT THERE. TWO NAMES THAT ARE GOING TO MAKE SENSE. WE HAVE SEEN CHINA DO THE 180, START TO OPEN, ROLL BACK THE COVID ZERO POLICY. BIG EXPOSURE IN TERMS OF GAMING. LAS VEGAS SANDS UP. WIND RESORTS ABOUT HALF A PERCENT, AND IT'S ABOUT 46% SINCE LATE OCTOBER. TOP A STORY -- TAPESTRY UP ABOUT 33% SO THOSE ARE SOME OF THE NAMES THAT ARE A STANDOUT IN TODAY'S DOWNWARD SESSION. > > OTHER STOCKS THAT HAVE REALLY NOT INFLUENCED ON THOSE TWO INDICES THROUGHOUT THE YEAR WE ARE TALKING BIG TECH. AMAZON DOWN 1.6% TODAY. SHARES DOWN ABOUT 50% IT IS SET TO BE AMAZON'S WORST YEAR. ALPHABET SHARES DOWN ABOUT 1.6%. WORST YEAR SINCE 2008. MICROSOFT ON 1.5%. SURE IS DOWN AROUND 30%. APPLE, IT IS OUTPERFORMING THE MARKET TODAY IT IS DOWN 1.08% THAT SHARES ARE DOWN ABOUT 28%. > > A LOT OF THESE SUPERLATIVES GOING BACK TO THE FINANCIAL CRISIS IN 2008 AND 2009. YOU STARTED TALKING ABOUT THE RECORD HIGH ON THE FIRST DAY OF THIS YEAR BUT YOU CAN'T TALK ABOUT 2022 AND A LOOK AHEAD OF 2023 WITHOUT GOING BACK TO 2020. THE SHORTEST BEAR MARKET IN HISTORY. IT RELAUNCHED A NEW BULL MARKET AND THAT CAME TO AN END ON JANUARY 3. IT HAS BEEN A DOWNWARD TRAJECTORY. IF YOU PUT A CHART MIGHT ON THEIR THE TREND HAS BEEN DOWN. > > I DO THINK THERE WERE SOME STRATEGISTS WHO WERE TALKING ABOUT YOU'RE GOING TO SEE A LOT OF VOLATILITY THAT MAY BE BY THE END OF THE YEAR WE HAVEN'T MADE SUCH GROUND TO THE UPSIDE. WE HAVE DONE A LOT OF FAIRGROUND TO THE DOWNSIDE. I THINK THAT HAS TO DO WITH THE MIXED MESSAGING SOMETIMES AT LEAST TRADERS THOUGHT ABOUT WHAT THE FED MIGHT ARE MIGHT NOT DO. THAT'S GOING TO TELL US. > > I THINK THEY WERE JUST IN DENIAL THESE TRADERS. AT ANY TIME THERE WAS SOME SORT OF OPTIMISM THAT SHOULD INFLATION WAS COMING DOWN THERE WAS THIS OPTIMISM YOU WOULD SEE AND IT JAY POWELL BUT CANNOT SAY THIS IS A LONG RIDE AHEAD. WE HAVE A LONG WAY TO GO. > > WE ARE GOING TO TALK ABOUT THAT A LITTLE BIT LATER. WE TALK ABOUT ALL THE LOSSES THIS YEAR AND THERE HAVE BEEN SOME POCKETS OF THIS MARKET WHERE PEOPLE HAVE MADE MONEY BUT OTHER POCKETS WHAT THAT MADE PEOPLE RETHINK. OF COURSE, IT WAS A TRADITIONAL HEDGE FUND, A LOT OF PEOPLE FORGET THAT. I GUESS YOU CALL IT A VC FUND HOW? JUST BECAUSE AN ASSET ISN'T TRADED -- > > I DON'T KNOW WHERE HE'S GOING TO GO HERE. > > IT DOESN'T MEAN IT HASN'T LOST VALUE. IT'S THIS ABOUT I HAVE TO PICK WHEN IT COMES TO PRIVATE EQUITY. IF YOU ARE NOT MARKING THOSE TO MARKET IT DOESN'T MEET THE VALUE HAS COME DOWN. > > THE VALUE IS WHERE YOU WANTED TO BE. > > IT'S WHAT YOU WANT SOMEBODY TO PAY FOR IT. > > WE ARE GOING TO CONTINUE TO LOOK AT BIG CHANGES IN WASHINGTON AS WELL. DEPARTURES OUT OF THE BIDEN ADMINISTRATION AND A NEW CONGRESS COMING AND IN JANUARY 2023. A BIG SET UP FOR INVESTORS AS WE MOVE OUT OF 22 INTO 2023. JOINING US NOW IS AN ALTERNATE OF THE PROGRAM. SENIOR PORTFOLIO MANAGER AND INVESTMENT ASSOCIATES. LET'S GET RIGHT TO IT PRICE. -- BRYCE. SOME OF YOUR WORST PREDICTIONS DID THE MARKETS ACTUALLY MEET THAT? DID THEY COME IN HIGHER THAN THAT ARE LOWER THAN THAT. > > IT WAS INCREDIBLY DIFFICULT IN 2022. WE SAW THE FED IS WAY BEHIND THE CURVE JUST OVER A YEAR AGO THE 12 MONTH FORECAST WAS LESS THAN 1%. WE KNEW THEY WERE GOING TO HAVE DEPENDENT THAT BUT NOT TO THIS DEGREE. WE THOUGHT IT COULD BE THE WORST BOND MARKET IN HISTORY WHICH WE ARE THINKING MAY BE DOWN 5% THAT 13-15%, I MEAN IT'S JUST AN INCREDIBLY TERRIBLE YEAR BECAUSE THE FED WAS SO FAR BEHIND THE CURVE THAT BY THE TIME THEY DID TRY TO CATCH UP IT WAS JUST SO EXTREME THAT IN SUCH A SHORT. T PERIOD OF TIME IT BLEW OVER AND CAUSED THE COMBINED GET STOCKS AND BONDS TO JUST BE SHOCKINGLY BAD. HAVING SAID THAT, IT DOESN'T SET UP FOR A MUCH BETTER 2023. THE FED CAN'T RAISE ANOTHER 4%. > > SAYING FROM THE AFTERLIFE, I COULD DO THAT. > > THERE IS THAT. AS A BOND PERSON, YOU KNOW, WE ARE THINKING ABOUT THE DOWNSIDE SO IT'S BEEN KIND OF STRANGE LATELY TO HAVE THE SENSE OF OPTIMISM FOR 2023. I FORGOT WHAT IT WAS LIKE TO BE OPTIMISTIC. > > I HEAR YOU, IT FELT SO MISERABLE TO SEE THE STOCK AND BOND MARKET TAKE A BIG HIT TO SEE THE CORRELATION THAT'S NOT WHAT IS SUPPOSED TO HAPPEN. HAVING SAID THAT, WHAT IS IT THAT GIVES YOU CERTAINTY THAT YOU CAN START TO PREDICT 2020. THIS POINT? > > I THINK INFLATION IS JUST HORRIFIC. 23, PEOPLE ARE QUIBBLING ABOUT IT BEING SOMEWHERE BETWEEN TWO AND FOUR. YOU CAN BUY AT FIVE. WE ARE AUTOMATICALLY WITHIN, YOU KNOW, YOU CAN CONCEIVE A REAL YIELD. THAT IS A COMPLETE GAME CHANGER. COMING DOWN MUCH QUICKER THAN I THINK OTHER PEOPLE DO BECAUSE THEY DON'T REALIZE THE WAY THE MATHWORKS THAT IS ZERO INFLATION. I'M NOT CALLING FOR DEFLATION LIKE A LOT OF PEOPLE THINGS THAT HAVE -- THINK IT HAS TO COME BACK TO WHERE IT WAS IN 21. THEY COULD STABILIZE WHERE WE ARE AND IT WILL HAVE ZERO CPI. I THINK THE FED HAS TWO MORE RATE INCREASES AND THAT'S IT. > > TWO MORE OF WENDY FIVE BASIS POINTS? WHAT DO YOU SEE? > > I'M TRYING NOT TO BE PINNED DOWN. > > A VERY WISE MAN SAID TO ME EARLIER TODAY EVERYBODY IS SPECULATING ABOUT WHAT'S HAPPENING IN TERMS OF THE FED A LOT OF THEM GOT IT WRONG THIS YEAR SO WHAT IS THE SMART CONVERSATION? IS THERE SOMETHING YOU CAN HANG YOUR HAT ON HERE? > > DID YOU JUST MAKE THIS PERSON UP? > > YOU KNOW HIM WELL. > > IT'S NOT ME. > > THE ECONOMY IS TRANSITIONING FROM STAGFLATION, ZERO GROWTH TO STAGNATION. WE ARE GOING TO HAVE ANOTHER YEAR OF ZERO GROWTH BUT WE ARE NOT GOING TO HAVE 10% INFLATION. SO IT'S A DIFFERENT ANIMAL. THAT IS A TOUGH MARKET FOR STOCKS. STOCKS WERE GETTING EARNINGS BOOSTS BY PURELY INFLATION. THEY ARE NOT GOING TO GET THAT LEFT. THE FIRST HALF OF THE YEAR IS GOING TO BE A LITTLE TOUGH. THERE IS GOING TO BE SOME MISINTERPRETATION OF WHAT'S GOING ON. ONE REAL PROBLEM WITH THE WAY POWELL IS LOOKING AT THINGS IS THAT HE SEES THIS COST PUSH INFLATION IS NOT GOING TO HAPPEN. WAGE INFLATION OR WAGE INCREASES WERE TRAILING CPI FOR THE LAST 18 MONTHS. THAT IS A RARE SITUATION WHERE YOU HAVE NEGATIVE WAGE GROWTH. IS GOING TO FLIP BACK TO POSITIVE. HE FORMALLY OUTPACES INFLATION BECAUSE OF PRODUCTIVITY. HE'S GOING TO MISINTERPRET THAT. HE'S GOING TO THINK IT'S GOING TO FEED INTO FOREVER INFLATION. THIS VICIOUS CYCLE, WHICH IT DOESN'T. THAT IS WHAT IS GOING TO CAUSE THE STOCK MARKET HEADACHES BECAUSE PEOPLE THAT WILL WAIT FOR THE PIVOT WILL GET DISAPPOINTED BACK AND FORTH, BACK AND FORTH. BY THE TIME THEY FINALLY CAPITULATE AND SAY WAGES HAVE BEEN GOING UP, AND IT HASN'T BEEN SHOWING UP IN CPI IN FACT WHEN YOU USE CPI IT'S PRETTY DARN LOVE. PEOPLE START TO LOOK AT A THREE MONTH ANNUALIZED CPI RATE INSTEAD OF THE YEAR-OVER-YEAR. WHEN THAT TRANSITION HAPPENS YOU BETTER BE FULLY INVESTED BECAUSE THEY WILL POP UP. > > WE WILL LEAVE IT ON THAT NOTE. BRYCE DODI JOINING US VIA ZOOM. I FEEL LIKE WE DO HAVE A MORE SEALED PLAYBOOK WHEN IT COMES TO 2023 WHETHER IT'S THE WORK, THE OR IS NOT GOING TO SURPRISE US. I STILL THINK WE ARE UNDERSTANDING THAT GLOBAL SUPPLY CHAINS, THERE ARE THINGS THAT ARE OUT THERE THAT IF IT HITS INVESTORS ONCE AGAIN IT'S GOING TO BE LIKELY TO MINUTE WE KNOW THIS IS GOING ON. > > WE HOPE SO. > > I HOPE SO. INFLATION, RIGHT? DO WE ANTICIPATE IT'S GOING TO GO MUCH HIGHER? > > ONE THING I THOUGHT WAS INTERESTING, OIL PRICES THE NEWS SURVEY FOR THEY SURVEY ALL THE BIG SHELL EXECUTIVES LIKE 150 OF THEM JUST CAME OUT, THE PRICES THEY ARE LOOKING AT? $84 SO THAT IS BASICALLY WHERE WE ARE RIGHT NOW. > > WE HAVE SEEN INCREDIBLE SPANS. > > LET'S GET LATEST NEWS AROUND THE WORLD. > > THE U.K. AND FRANCE WILL REQUIRE ALL TRAVELERS ARRIVING FROM CHINA TO TEST NEGATIVE FOR COVID. THAT IS ACCORDING TO THE TIMES. THE REPORT SAYS THE PRIME MINISTER STEPPED INTO ORDER THE TESTS. IN ADDITION TO HAVING TO SHOW A NEGATIVE TEST, UP TO A FIFTH WILL BE TESTED AGAIN ON ARRIVAL. THAT POLICY COMES AFTER HEALTH OFFICIALS CALLED RESTRICTIONS ON TRAVELERS FROM CHINA UNJUSTIFIED. AND SOME STARTLING ESTIMATES OF JUST HOW BAD THE COVID OUTBREAK COULD BE, ACCORDING TO LONDON RESEARCH FIRM AIR AFFINITY THERE COULD BE AS MANY AS 25,000 DEATHS A DAY. PEAK INFECTION COULD BE IN THEM AGAINST. IT'S BEEN HARD TO GET AN ACT -- ACCURATE DATA. GLOBAL NEWS 24 HOURS A DAY, ON AIR AND ON BLOOMGERG QUICKTAKE. POWERED BY MORE THAN 2700 JOURNALISTS AND ANALYSTS IN OVER 120 COUNTRIES. > > COMING AT WE WILL TAKE A > > YOU KNOW, CAROL, ABOUT A YEAR AGO I WAS SITTING DOWN TALKING TO A VERY WISE MAN AND HE SAID FOR 2022, MORE IMPORTANTLY GETTING THE FX CALL WAS GOING TO BE A DETERMINANT OF WHETHER YOU GOT THE EQUITY CALL RIGHT. AT ONE POINT WE SAW THE BLOOMBERG DOLLAR SPOT INDEX WAS UP 15% ON A YEAR-TO-DATE BASIS. IT HAS. A SIGNIFICANT NUMBER OF THOSE GAINS. STILL CLOSING OUT THE YEAR STRONGER BY ABOUT 6%. THIS IS THE FIRST BACK TO BACK GAMES SINCE 2015. REPORTER WHO COVERS FX BASE FOR US, SIDNEY I THINK EVERYONE WANTS TO KNOW THE DOLLAR STRENGTH WE SAW WHICH QUITE FRANKLY HAS FADED PRETTY SIGNIFICANTLY SINCE WE SAW THE PEAKS A FEW MONTHS AGO WHETHER THAT'S GOING TO AFFLICT A WEAKNESS IN 2023. > > THAT IS THE QUESTION EVERYBODY ON WALL STREET IS ASKING RIGHT NOW. WE HAD THE HUGE GAINS EARLY IN THE YEAR. ALSO JUST THE DEMAND FOR A HAVEN IN 2022. AS WE GET INTO 2023 THE QUESTION IS WHAT HAPPENS NEXT? FOURTH QUARTER HAS GIVEN US A FEW INDICATIONS OF WHAT IS TO COME. IT HAS NOT BEEN A GREAT QUARTER FOR THE DOLLAR WHICH HAS GIVEN OTHER CURRENCIES A LITTLE BIT OF ROOM TO COME BACK SO WEAKNESS IN THE DOLLAR IS WHAT MANY ARE EXPECTING GOING FORWARD. > > GLOBAL CURRENCIES DON'T ACT IN A VACUUM, IT ALSO DEPENDS ON WHAT IS GOING ON AROUND IN THE WORLD. ESPECIALLY WHEN YOU SEE THEM NOT ACT IN UNISON. TELL US THAT PART OF THE STORY NOW FROM WHAT WE SEE FROM THE DOLLAR NEXT HER. > > ABSOLUTELY, THIS IS SOMETHING ELSE WE HAVE A COUPLE OF CLUES ON. AS INVESTORS STARTED THINKING ABOUT THE FEDERAL HALT OR START TO SLOW THE PACE OF THEIR INTEREST RATE HIKES IN THE COMING YEAR THAT IS WHAT WE STARTED TO SEE THE TURNAROUND IN THE DOLLAR. WITH THE FED DOES, WITH THE ECB DOES, WHAT SOME OF THESE LARGE CENTRAL BANKS DO IT WILL BE ONE TO WATCH. THE YEN UNDERPERFORMED IN 2022. IF IT IS ANYTHING TO INDICATE WHAT IS TO COME WE CONCEIVE A COMEBACK IN THE YEN AS WE HAVE SEEN CONVERGENT -- CONVERSION WITH THE CURRENCY. > > WE HAVE SEEN THAT IN TERMS OF INTERVENTION AND IMPACTING WHAT WE SEE IN THE END. > > CENTRAL BANKS AND WHAT MONETARY POLICY DOES AROUND THE WORLD HAS AN IMPACT ON CURRENCY AROUND THE WORLD. I'M WONDERING ABOUT MICRO AND TERMS OF THINKING ABOUT 2023 WHAT IS ON THE RADAR FOR SOURCES YOU SPEAK TO ABOUT? > > INFLATION OF COURSE IS THE BIG ONE. THAT IS A MAJOR INDICATOR OF WHAT CENTRAL BANKS AND THE FED WILL DO. IF WE DO START TO SEE MORE SIGNS OF INFLATION COLLECT THAT IS SOMETHING THAT CURRENCY TRADERS ARE KEEPING A CLOSE EYE ON. OF COURSE WE HEARD PEOPLE TALKING ABOUT THE RISK OF RECESSION AND HOW LIKELY THAT IS, AND HOW DEEP A RECESSION COULD BE AND HOW LONG IT COULD LAST. THAT IS SOMETHING ELSE TO KEEP IN MIND. IT IS THE WORLD'S RESERVE CURRENCY SO AS INVESTORS GO WHEN THINGS ARE RISKY AND SCARY, THAT SAFE HAVEN WILL BE ONE TO KEEP IN MIND AS WE GO INTO THE YEAR AHEAD. > > I WANT TO GIVE IT A LITTLE BIT FROM FX AND TALK ABOUT SHORT-TERM MONEY MARKETS IN THE U.S.. THERE WAS A REDHEAD ABOUT AN HOUR AGO WE HAVE SEEN THE USAGE THIS YEAR RECORD AFTER RECORD AFTER RECORD THAT LOOKS LIKE HOW WE ARE CLOSING OUT THE HERE AND I'M CURIOUS AS TO WHETHER SOME OF THE CONDITIONS ARE GOING TO PERSIST IN THE NEXT YEAR. > > THAT'S A GOOD POINT. OF COURSE, THE YEAR END AND THE QUARTER AND ATTENDED TO BE PRESSURE POINTS AND FOR THE FED FACILITY MORE BROADLY THE END OF THE YEAR IS A MOMENT WHERE FINANCIAL INSTITUTIONS WANT TO PUSH THEIR CASH SOMEWHERE FOR REGULATORY PURPOSES. THE SPIKE WE SAW WAS HUGE, LIKE $245 BILLION INCREASE TAKING IT UP TO $2.5 TRILLION IS THE BIGGEST EVER. I WHAT OF THOSE FACTORS THAT HAVE CAUSED FINANCIAL INSTITUTIONS TO PUT SHORT-TERM CASH SOMEWHERE A INSTEAD OF LONGER-TERM INVESTMENTS AT LEAST UNTIL WE SEE SHIFTS. > > TWO WE SEE THAT AS A SIGN OF NERVOUSNESS? 2.55 4 TRILLION AT THE FED'S OVERNIGHT. THAT WAS 245 ALIEN MORE THAN THE DAY BEFORE -- TRILLION AND THE DAY BEFORE. THINKING ABOUT 2023 IS THAT A SIGN OF NERVOUSNESS WHEN IT COMES TO THE FINANCIAL COMMUNITY OR JUST KIND OF IS THIS IS USUAL? > > IT'S A GOOD QUESTION AND THAT IS SOMETHING I'M TRYING TO FIGURE OUT TODAY IS IF THIS IS SOME COMBINATION OF JITTERS AS PEOPLE GO INTO THE YEAR AHEAD. IT PROBABLY IS A COMBINATION OF THESE PEOPLE NEED SOMEWHERE TO PUT THE MONEY IT IS THE FINAL BUSINESS DAY OF 2022. BUT IT WILL BE EXTREMELY INTERESTING TO SEE HOW IT GOES AS WE GO INTO 2023 AND HAS ONLY BEEN AROUND FOR A HANDFUL OF YEARS. IT CONTINUES TO RISE. 2022 WAS A HUGE YEAR. I THINK IT ENDED 2021 WITH USAGE BETWEEN -- BELOW $2 TRILLION. > > HAPPY NEW YEAR I APPRECIATE YOU TAKING THE TIME TODAY. LET'S GO FROM FOREIGN EXCHANGE FROM CURRENCIES TO COMMODITIES AND BRING IN JOE ON WHAT TO EXPECT FOR 2023. I WANT TO START WITH COPPER HEADING FOR 11% GAIN THIS QUARTER STILL IN ANNUAL LOSS OF 13%. WE LIKE TO LOOK AT INDUSTRIAL METALS FOR STRENGTH AND WEAKNESS IN THE ECONOMY. WHAT ARE YOU WATCHING FOR THE FIRST PART OF 2023? > > I THINK WHAT MOST TRADERS HAVE BEEN SAYING, THINGS MIGHT BE A LITTLE BUMPY TO START THE YEAR. I'M NOT TALKING ABOUT A COPPER COMPANY BUT I AM TALKING ABOUT A STEEL COMPANY. THEY SAID LISTEN, WE ARE OPTIMISTIC WHICH IS NOT RAISING THAT YOU USUALLY HEAR FROM STILL COMPANIES. THEY USUALLY JUST SAY THINGS ARE GREAT BUT WE ARE A LOT OF THAT CONCERNED THAT IN THE FIRST QUARTER WE CAN SEE A SLOWDOWN OF ACTIVITY AND WE ARE KEEPING A LOOKOUT FOR POTENTIAL THE SESSION. U.S. STILL, THE OTHER COMPETITORS DIDN'T USE RECESSION VERBIAGE BUT IT WAS INTERESTING TO HEAR THEM SAY THAT. GOING BACK TO COPPER, TIM, I THINK ANY OF THE INDUSTRIAL METALS, I DON'T THINK IT MATTERS WHICH ONE YOU ARE IN. YOU ARE NOT GOING TO SEE NEW CONSTRUCTION PROJECTS, NEW MONEY PUT DOWN, I THINK A BIG PART OF THIS GOES TO THE INTEREST-RATE QUESTION. THINK ABOUT IT WE HAVE SPENT 15 YEARS WITH NEAR ZERO PERCENT INTEREST RATES. FOR ANYONE THAT HAD TO CARRY METAL THERE WASN'T MUCH THEY HAD TO WORRY ABOUT IN TERMS OF HOLDING ONTO THAT AND PAYING BACK HUNDRED 80 DAY TERMS. ALL OF THESE PEOPLE ARE SICK OF GREAT WILL TO GET THE SAME PRICE I HAVE TO PAY BACK MY LAWN OR HOLDING OVER 30 DAYS. > > I AM CURIOUS ABOUT THE TRADE. GIVEN THAT AND I WILL BE CAREFUL HOW I SAY THIS WE MIGHT BE AT THE END OF THE HIKING CYCLE DOES THAT BRING A LITTLE MORE STABILITY THAT YOU'RE NOT GOING TO HAVE THE VOLATILITY IN POSTSECONDARY MARKET RATES IF YOU HAVE SOME SENSE THAT ANOTHER 50 POINTS OR 75 IS PROBABLY UP FOR THE FED? > > THAT IS WHAT A LOT OF PEOPLE OUT THERE ARE TALKING ABOUT. I SPOKE WITH THE CEO OF DELCO A COUPLE OF WEEKS AGO AND THAT WAS HIS ARGUMENT. FIRST HALF OF THE YEAR I'M NOT WRITING HOW MUCH ABOUT IT. THE BACK HALF OF THE YEAR WE GET SOME OF THESE RECESSION WORRIES OUT OF THE WAY AND THE FEDERAL FINALITY BE CAUGHT UP TO INFLATION AND THINGS WILL NORMALIZE. OF COURSE, SO MANY PEOPLE WANT TO TALK ABOUT 2024. SERIOUSLY. > > BEFORE WE LET YOU GO, AND IN YOU DON'T COVER SPECIFICALLY WHAT IS GOING ON IN LME HERE BUT THE BEST PERFORMING COMMODITIES IS NICKEL. WE KNOW THAT IS AN INCREDIBLY BROKEN MARKET. I'M WONDERING IF YOU HAVE TALKED TO ANYBODY THAT EXPECTS ABRADING AT THAT AND MOVING THE CONTRACTS TO SUMMER MORE RELIABLE? > > I FEEL LIKE WE TALK ABOUT THIS EVERY MONTH SINCE FEBRUARY ON MARCH WHEN IT WENT HAYWIRE. I THINK TRADERS ESPECIALLY ARE WHERE THEY HAVE BEEN ALL YEAR. THE LME IS STILL STAINED. THEY ARE LOOKING FOR OTHER AVENUES NOW AND I THINK THAT'S THE THING WE HAVE BEEN LOOKING AT. > > WE HAVE TO LEAVE IT THERE. HAVE A HAPPY NEW YEAR, MY FRIEND. ? ANYWHERE. > > WELCOME BACK TO THE FINAL TRADING DAY OF 2022. ABOUT 2:30 HERE IN NEW YORK. HIGHER HERE ON A DAILY BASIS AND HOW YOU'RE HERE ON A YEARLY BASIS AS WELL. ABOUT 2% AT LOOKS LIKE IT'S GOING TO SETTLE ABOUT $80 A BARREL UP ABOUT 7% CRUDE ABOUT 10%. WE WERE JUST TALKING WITH JOE ABOUT THE NICKEL MARKET DOWN ABOUT 7/10 OF A PERCENT STILL UP ABOUT 45% BUT A LOT OF THOSE DISRUPTIONS WE SAW EARLY IN THE YEAR NEVER SEEMED TO GET GREAT SIZED HERE SO DON'T READ INTO TOO MUCH INTO IT. SOME I THOUGHT WERE INTERESTING ONE OF THE BEST PERFORMING COMMODITIES OUT THERE, CALL. HOW WAS THAT? NOT WHEN YOU NEED IT, COAL PRICES UP ABOUT 8/10 OF A PERCENT. LOOKING AT PRICES RIGHT NOW CLOSE ON THE DAY HERE BUT GIVES YOU A BETTER SENSE OF WHAT WE HAVE SEEN AND A LUMBER WHICH IS ALL THE RAGE BACK IN 2020 AND 2021. DOWN 67, 68% ON A YEAR TO DATE BASIS. THAT IS A CHART THAT I WOULD LIKE TO SEE. THERE ARE A LOT OF OTHER CHARTS THAT I THINK WE CAN LOOK AT THAT REALLY ILLUSTRATE THE UPS AND DOWNS WE HAVE SEEN THIS YEAR. > > YOU NOW, YOU LISTEN TO US WE TALK A LITTLE BIT OF THE U.S. INFLATIONARY PICTURE BUT WE FOCUS ON WHAT IS GOING ON BECAUSE IT'S A GLOBAL INFLATION PROBLEM. TAKE A LOOK FOR THOSE ON RADIO IT SHOWS THE DRAMATIC RUN-UP WE HAVE SEEN STARTING IN ABOUT 2021 WE KNOW THE REASONS WHY RIGHT? GLOBAL SUPPLY CHAINS COMING UNDONE, YOU CAN SEE IT START TO LEVEL OFF AND TOP OFF IN THE LAST FEW MONTHS. IT WAS THE WORST YEAR FOR INFLATION, 10.1% IN NOVEMBER. CHECK THIS OUT, SEVEN CPI 57 TIMES GOOD FOR 3970 FIVE BASIS POINTS. > > YOU GO BACK A YEAR AND A HALF OR SO WHEN EVERYONE WAS SAYING MORE ISSUES WITH THE PANDEMIC AND WHEN THE PANDEMIC RUNAWAY MAY BE ALMOST ABOUT A YEAR AGO THE JAY POWELL FROM RELIGION GO SERIOUS. > > TALKING ABOUT THE WAY WE ARE THINKING ABOUT ECONOMIC GROWTH IN OF POST-COVID ENVIRONMENT OR INFLATION AS HIGH CHECK OUT THIS ONE. 2021, GLOBAL GROWTH CLOSE TO 6%. IT IS UP 3% PROJECTED IN 2023. > > I THINK MOST OF THE PROJECTIONS ARE 1-2%. EVERYONE IS WRITING BECAUSE EVERYONE WANTS TO PUT IT TO THE BIG SPIKE IN 2021. YOU HAVE A LOT OF DISTORTIONS ON THESE AVERAGES. PEOPLE THAT HAVE BEEN THROUGH MULTIPLE CYCLES WILL SAY IF YOU CAN GET THAT'S PRETTY DARN GOOD. > > MUCH BETTER THAN NEGATIVE GROWTH. IT GETS TAINTED AND IT IS A WHOLE DIFFERENT STORY WHEN YOU ARE DEALING WITH HIGH INFLATION RATES AND TERMS OF PURCHASING POWER AND WHAT IT MEANS. THIS IS THE QUESTION FOR 2023, DO WE GET THE SOFT LANDING EVEN IF WE GET A LITTLE BIT OF GROWTH THAT IS MUCH BETTER THAN ANY KIND OF RECESSION. > > DO THEY GO UP? > > DID THEY CAUGHT UP? I JUST TALKED ABOUT WHAT IS GOING ON IN LATIN AMERICA. HERE IS A CHART REVIEW ON RADIO AGAIN NO SURPRISE. BENCHMARK RATES. > > DOESN'T SOUND LIKE US. > > BY FRIDAY HE GETS IT. > > ONE DO WE DO TRAFFIC AND WEATHER? > > , FIVE'S. > > IT'S A STRAIGHT NOT HAPPEN -- MOUNTAIN UP. > > THIS CHART RELEASES IT ALL YOU TALK ABOUT THE END OF WHAT IS EFFECTIVELY A ZERO BOUND WORLD. WHEN YOU CONSIDER SO MANY NATIONS WERE ACTUALLY HAVING NEGATIVE SCIENCE. THAT'S IT, EASY MONEY. > > WHAT IS THE ANOMALY? KEEP THE CHART UP FOR EVERYBODY ON TV. WE HAD EASY MONEY FOR SO LONG. > > YOU PUT THE CHART OUT AND YOU GET A BETTER SENSE HERE. > > IT IS MORE NORMAL. > > OP IS GOING TO SAY -- > > I JUST WANT TO SAY I WANT TO HEAR JAY POWELL -- > > DISCLAIMER -- > > TALK ABOUT POLICY THEY DID START TO TALK ABOUT THAT PRIOR TO INFLATION GETTING OUT OF CONTROL. THERE HAS BEEN THIS SENSE AND THE FED DID A LOT OF PAPERS ON THIS. THERE HAS TO BE SOME, LIES ASIAN. > > FOR ANYONE UNDER THE AGE OF 40 BEEN NEVER LIVED IN AN ENVIRONMENT OR WE HAVE BEEN, I HAVE NO FRIENDS UNDER THE AGE OF 40. > > I'M YOUR FRIEND. > > ARE YOU UNDER THE AGE OF 40? YOU LOOK GOOD FOR YOUR AGE. > > WHAT IS NORMAL AS WE ARE IN THE FINAL TRADING DAY OF THE YEAR. AN ECONOMIC ANALYST, SHE JOINS US FROM WASHINGTON, D.C. IT IS GOOD TO HAVE YOU HERE WITH US. WHAT IS NORMAL IN A WORLD WHERE FOR A DECADE OR SO PRIOR TO THE PANDEMIC EVERYONE WAS USE TO VERY LOW RATES, EASY MONEY, HAVE DIFFERENT ENVIRONMENT. WAS THAT ABNORMAL VERSUS WHAT WE ARE SEEING TODAY? > > GOOD AFTERNOON AND THANK YOU FOR HAVING ME. I THINK A DIFFICULT ONE TO ANSWER, DEFINITELY RESETTLED AND TO WHAT NOT LIKELY. -- PERIOD OF NORMALCY. IT IS DEFINITELY NOT NORMAL AS YOU CAN SEE FROM 2022 WHAT WE HAVE SEEN WITH INFLATION. I THINK 2023 MADE BRING BACK A BIT OF REBALANCING. SOME OF THE CRAZIER DYNAMICS WE HAVE SEEN MAY START TO RESHUFFLE A LITTLE BIT. SOME OF THE INDUSTRIES THAT HAVE BEEN GOING ABOVE TREND ARE STARTING TO NORMALIZE A LITTLE BIT AND SOME MAY STILL BE CATCHING UP. > > I AM CURIOUS WHEN WE TALK ABOUT TRENDS THERE ARE A LOT OF PEOPLE HOPING TO SOME DEGREE OF REVERSION WHEN IT COMES TO CERTAIN CLASSES. I'M WONDERING IF THERE HAS BEEN SO MUCH DAMAGE FROM THE PANDEMIC, INFLATION, AND THE FED AND CENTRAL BANKS FIGHT AGAINST IT BUT IT'S ALMOST IMPOSSIBLE FOR US TO GO BACK TO THAT AT LEAST NOT IN THE SHORT TERM. > > IT VARIES A LOT DEPENDING ON WHICH MARKET YOU WOULD BE TALKING ABOUT. TAKE HOUSING FOR EXAMPLE. WE HAVE THIS VERY DRAMATIC COLLAPSE BUT THAT IS COMING UP AGAINST CHRONIC SUPPLY SINCE THE LOST LAST -- LAST HOUSING COLLAPSE. I THINK THERE IS A FLOOR THERE THAT IS GOING TO PRESENT VALUES FROM FALLING TOO MUCH BECAUSE IT IS UP AGAINST THIS LONGER-TERM TREND OF CHRONIC UNDERSUPPLIED. IT VARIES A LOT FROM MARKET TO MARKET THAT IS DIFFERENT WITH LABOR MARKETS TOO. CERTAIN INDUSTRIES IT STILL HAVE ROOM TO GROW TO THEIR PRE-PANDEMIC LEVEL. > > THAT'S WHERE I WANT TO GO IS THE LABOR MARKET ONE AREA OF FRUSTRATION FOR JAY POWELL HAS BEEN THE RESILIENCE OF THE LABOR MARKET. HE MENTIONED SEVERAL TIMES IT IS UNSUSTAINABLY HIGH. WHEN WILL WE START TO SEE SOME SORT OF CRACKS WHEN IT COMES TO LABOR IN THIS COUNTRY? ARE THOSE CROCS GOING TO GET SO BIG THAT IT'S GOING TO BE A CONCERN? > > IS ALSO SOME OF HIS SAVING GRACE? > > THAT IS A REALLY GOOD POINT. I DON'T WANT TO BE LOOKED AT AS SOMEONE WHO IS TOURING FOR JOB LOSS MAY HE CALLED THE JOB MARKET UNSUSTAINABLY HOT SEVERAL TIMES THIS YEAR. > > I THINK A LOT OF THE CONCERN IS THE WAGE GAINS THAT COMES ALONG WITH IT. CERTAIN OF THESE SECTORS ARE A LOT OF THEM TEND TO BE LOWER SERVICES SECTORS. THINGS THAT LOST A LOT OF JOBS AND ARE STILL GROWING THOSE ARE THE ONES THAT ARE STILL CONTRIBUTING TO JOB GAINS THE MOST AND WHERE WE ARE SEEING CAPITAL BIT STRONGER WAGE GAINS. THEY STICK INTO THE SERVICES, NET -- COMPONENT. IT KEEPS INFLATION ELEVATED. THAT IS A CONCERN WITH THAT. THE START OF YOUR QUESTION WE STARTED TO SEE SOME COOLING IN THE LABOR MARKET BUT I THINK BECAUSE THE SECTORS THAT ARE STILL GROWING ARE BIGGER ONES I THINK IT'S NOT MAKING IT SHOW UP AT THE TOP LINE AS MUCH. > > THAT'S AN INTERESTING POINT AND THE FOCUS ON WAGES, I UNDERSTAND WHY BUT THAT WAGE GROWTH, THE SPIRAL IF YOU CALL IT THAT. THAT IS ALSO FUELED BY A LOT OF CONSUMER SPENDING AS WELL. > > LET'S GO, YOU KNOW ONE OF THE THINGS ON WE WERE PLANNING OUR CALL THIS MORNING YOU GUYS HAVE SO MUCH IMPORTANT DATA. WHAT ARE YOU SEEING WHEN IT COMES TO CONSUMER SPENDING THAT IS THE BACKBONE OF OUR ECONOMY? > > THAT IS AN AREA I SPEND MOST OF MY TIME WATCHING AND I AM KEEPING A CLOSE EYE ON IT. MY BIG CONCERN IS THAT CONSUMER BUDGETS ARE JUST STARTING OF 2023 IN A MUCH WEAKER POSITION THAN THEY DID IN 2022. WE SEE IN OUR SURVEYS THAT THERE IS, IT'S BEEN RISING ALL YEAR FOR SURE WHO ARE SINK THEIR MONTHLY EXPENSES TOTAL MORE THAN THEIR INCOMES. THEY HAVE BEEN WORKING AWAY AT THEIR SAVINGS. IT'S GETTING MORE EXPENSIVE WITH INTEREST RATES SO I THINK IT IS MAKING THE CONSUMER A BIT WEAKER. THE RESILIENCE SPENDING HAS BEEN -- OUR INCOMES GOING TO CLOSE THE GAP WITH INFLATION TO THEM TO KEEP SPENDING FOR WE ARE SEEING MORE PRICE SENSITIVITY OR A BIG TOLL ON MANY. ARE THEY GOING TO BE ABLE TO SUSTAIN GROWTH? > > I'M PARTICULARLY TALKING ABOUT SOME OF THE RATIOS WITH REGARD TO CREDIT BALANCES AND THINGS LIKE THAT HAVE ANY OF THOSE RATIOS GIVEN YOU CONCERN? WHEN YOU POINT THOSE OUT TO CERTAIN PEOPLE THEY SAY YOU HAVE TO COMPARE IT TO THE FINANCIAL CRISIS AND OTHER RECESSIONARY PERIODS THAT WE WENT THROUGH. > > I AGREE WITH THAT AND THAT WAS WHAT HELPED US THROUGHOUT 2022. WE KIND OF ONLY JUST GOT BACK TO PRE-PANDEMIC DEBT LEVELS OR DEBT UTILIZATION AS A SHARE OF INCOME BUT WHAT WORRIES ME IS YOU THINK ABOUT WHAT THE CONSUMER'S USED TO SPENDING. THEY HAVE INCOME, SAVINGS, DEBT. THEY WORKED THEIR WAY THROUGH THEIR SAVINGS TO A LARGER DEGREE THAN THEY DID AT THE START OF LAST YEAR. INCOMES ARE STILL NOT KEEPING UP WITH PRICES. PURCHASING POWER IS GOING DOWN. THAT LOVE OLD HAS NOT -- DEBT LEVELS HAVE NOT BEEN A BIG CONCERN BUT IT COULD BE A BIGGER PIECE IN 2023. > > THERE WAS INFLATION ADJUSTED WAGES WE SAW THAT INDIVIDUALS BASED ON THE INFLATION PICTURE FOR A LONGTIME WERE DOING OK BUT FOR THE LAST 19 MONTHS, THAT HAS NOT BEEN THE CASE. > > IN ON A LOT OF THE DATA WE GET DOESN'T HAVE THE LUXURY OF BEING INFLATION ADJUSTED BUT IF YOU SEE A LOT OF THESE CHARTS IT WOULD CAUSE A LITTLE BIT OR CONCERT I THINK OUT THERE. > > IF INFLATION DOES INDEED COME DOWN IS THERE A PURCHASING POWER INCREASE, WE COULD SEE A DIFFERENCE. > > IF IS THE KEY. > > AND THE PSYCHOLOGY OF THESE MARKETS, IT'S NOT JUST WHETHER THEY HAVE THE CAPACITY IT'S HOW THEY FEEL. > > I'M STILL HERE. > > I DON'T KNOW WHO SAID IT BUT I DON'T REMEMBER HOW MANY YEARS AGO IT WAS A POLITICAL CANDIDATE THE ECONOMY IS A FEELING FOR SOME PEOPLE. IF THEY FEEL THINGS ARE BAD IS GOING TO BE BAD. > > I WOULD SAY WE SAW THAT WITH OUR WINDEX THIS YEAR. IT IS INTERESTING BECAUSE IT'S BEEN WAY DOWN IT CAME WAY DOWN WHEN EVERYTHING WAS GOING CRAZY THE INDEX HAS BEEN RECOVERING BUT IT'S BEEN REALLY DOWN ALL YEAR AS INFLATION WENT UP AND I THINK THE CHART THAT YOU JUST SHOWED I AGREE IT WAS A GREAT CHART SHOWING INFLATION ADJUSTED WAGES. THE DECLINING PURCHASING POWER CONSUMERS ARE FEELING THAT IT HASN'T NECESSARILY SHOWN UP IN CERTAIN PARTS OF THE ECONOMY TO SOME EXTENT. BUT ABSOLUTELY THAT IS REFLECTIVE OF WHAT CONSUMERS ARE FEELING. > > IT IS THE POWER OF THE BLOOMBERG. MORNING CONSUL, THEY HAVE A LOT OF GREAT DATA TOO. > > IF YOU ARE RUNNING FOR OFFICE, THAT IS THE CHART YOU SHOW. > > KAYLA, THANK YOU FOR JOINING US. > > HERE WE ARE ON THE FINAL TRADING DAY OF 2022. WE STARTED THE FIRST DAY WITH A RECORD HIGH ON THE S & P 500. RIGHT NOW WE ARE AT 3805 AND CHANGE. THAT IS DOWN 20% FROM THE RECORD HIGH. THE BEAR MARKET KICKED OFF IN THE MIDDLE OF JUNE SO NO MATTER WHAT OPTIMISM FOLKS HAVE THE DAMAGE IS DONE. MOST OF THE ESTIMATES WE HAD WERE WRONG. WITH A FEW EXCEPTIONS WHO PREDICTED THE DECLINE BUT EVEN THEN THEY GOT THE NUMBERS WRONG. THE BIG QUESTION IS WHERE IS THE LEADERSHIP GOING TO COME FROM? ARE YOU GOING TO FIND IT FROM THE APPLES AND TESLAS OF THE WORLD OR ARE WE GOING TO BE BUYING SHARES? > > WILL ENERGY GO INTO A THIRD YEAR OF OUTPERFORMANCE? > > WE HAD THIS CONVERSATION YESTERDAY WITH SOME PEOPLE. IT'S NOT TO SAY IT CAN'T HAPPEN BUT YOU ARE TALKING ABOUT BEYOND UNPRECEDENTED. > > I FEEL LIKE IT'S A DIFFERENT ENVIRONMENT GOING FORWARD. I PIVOT TO RENEWABLES. > > I'LL ALLOW IT. > > COAL IS BIG. > > YOU TALKED ABOUT IT. > > DID YOU GET IT IN YOUR STOCKING THIS YEAR? > > I KEEP IT IN THE CLOSET. > > BROUGHT A LITTLE THING OF OIL AND KEPT IT IN HER BATHTUB. INFORMED HER YOU SHOULDN'T BREATHE IN PAPERS FROM CRUDE OIL. > > ALL RIGHT, WE CORRECTED WE HAVE TRACY ON THE PHONE? > > DEAD SILENCE. I'M GOING TO GO TO D.C.. NOBODY HAS BEEN TAPPING INTO THE WIND YET, I PROCESS. WE NOW WE ARE GOING TO BE FOCUSED ON THE MARKETS. TODAY WE FINALLY, AFTER SEVERAL YEARS DEMOCRATS HAVE BEEN PUSHING THIS WE HAVE FORMER PRESIDENT DONALD TRUMP STOCKS RETURNS RELEASED TODAY FOR THE HOUSE WAYS AND MEANS COMMITTEE. THE FORMER PRESIDENT ABLE TO MINIMIZE HIS PAYMENT SO LET'S GET TO IT. YOU KNOW THE DEMOCRATS HAVE BEEN PUSHING FOR THIS FOR YEARS. ANYTHING, ALL RIGHT, WHAT DID WE GET? MINIMIZING HOW MANY TAXES HE PAYS? > > I THINK THE NATURE OF HIS BUSINESSES YOU CAN TAKE A LOT OF DEPRECIATION AND USE IT AGAINST YOUR TAXES EVEN WHEN YOU REALISTIC VALUE IS GOING UP. HE DID HAVE A LOT OF BUSINESS LOSSES IN ALL OF THESE YEARS. HE PAID NO PERSONAL INCOME TAX IN 2020, HIS FINAL YEAR AS PRESIDENT. I THINK THIS SORT OF RAISED THE QUESTION. HE SAID HE WAS GOING TO CHANGE THE TAX CODE AND IT WAS GOING TO COST HIMSELF A LOT OF MONEY. BUT THERE IS NO EVIDENCE THAT IT DID SO. INSTEAD, IT SORT OF PRESERVED OF ONE BUSINESS TAX BREAKS THAT HAVE ALLOWED, YOU KNOW, FOLKS WITH A LOT OF MONEY AND LAWYERS AND PLANNING TO AVOID PAYING TAXES SO THERE WAS NO YEAR 2015-2020 THAT HE PAID EVEN $1 MILLION IN TAXES. > > WHAT DOES IT MEAN FOR FUTURE PRESIDENTS, FOR THE WAY, THERE IS NOT ANY RULE THAT THEY HAVE TO RELEASE THEIR TAX RETURNS BUT THIS DOES -- DOES THIS HAVE SOME IMPLICATION OR SET PRECEDENT? > > PRESIDENTS SINCE SAID, THEY VOLUNTARILY RELEASE THEIR TAXES AND TRUMP SAID HE WOULD ONCE HE WASN'T BEING AUDITED BUT ONE OF THE THINGS THE COMMITTEE FOUND IS HIS TAXES WERE NOT BEING AUDITED WHILE HE WAS PRESIDENT. THAT IS LEADING TO LEGISLATIVE EFFORTS BY DEMOCRATS TO FORCE PRESIDENTS TO RELEASE THEIR TAXES AND AT LEAST FORCE THE AUDITS TO HAPPEN. THAT IS PROBABLY NOT GOING TO GO ANYWHERE WITH REPUBLICANS TAKING OVER THE HOUSE WHERE THEY HAVE STRONGLY CRITICIZED THE RELEASE OF THESE TOXINS. TRUMP HIMSELF HAS FOUGHT AGAINST THE RELEASE OF TAXES. HE HAS BEEN ABLE TO USE TAX BREAKS. > > ONE THING AND A LOT OF BUSINESS FOLKS ARE SMART IN TERMS OF REDUCING THEIR TAXES, WE ALL LOOK FOR WAYS TO DO THAT. HAVING SAID THAT, ANYTHING HERE THAT SHOWS SOME KIND OF CONFLICT OR INTEREST SOMEONE AS PRESIDENT OF THE UNITED STATES SHOULDN'T HAVE DONE? > > IT'S KIND OF IN THE EYE OF THE BEHOLDER HE SIGNED LEGISLATION THAT AFFECTED BUSINESSES. THINGS LIKE THE ALTERNATIVE MINIMUM TAX IT IS SOMETHING HE DRAMATICALLY SCALED BACK AND THAT'S THE KIND OF THING THAT COULD CAUSE PEOPLE -- COST PEOPLE TRUMP A LOT OF MONEY. HE HAD $8 MILLION IN STATE AND LOCAL TAXES AND COULD ONLY PAY $10,000 AS A DEDUCTION. I THINK IT'S GOING TO TAKE SOME TIME TO DIG INTO THE DETAILS. > > WE WILL HAVE TO LEAVE IT THERE. STEVEN DENNIS COVERING EVERYTHING WASHINGTON FOR US. RELEASING TRUMP TAX RETURNS, WE ARE GOING TO TAKE A PIVOT FROM THAT AND I GUESS SOME OF THE COMPANIES HAVE FOUND A WAY. BLOOMBERG NEWS REPORTER GREAT STORY ON THE TERMINAL ABOUT TIGER GLOBAL WHEN THEY STARTED A LOT LOOKED AT THEM AS A HEDGE FUND. THEY HAVE NOT HAD A GOOD RUN AT LEAST AS OF LATE. THEY FOUND SOME SOLACE IN THE D.C. SPACE. > > THAT'S ABSOLUTELY RIGHT. THEY STARTED OUT IN 2001 AS A HEDGE FUND AND OVER THE YEARS THEY HAVE BEEN GROWING THEIR INVESTMENTS IN VENTURE CAPITAL ESPECIALLY IN THE LAST TWO YEARS. > > KATHY, THIS IS ABOUT THINGS THAT DIDN'T WORK AND MAY BE DON'T WORK. YOUR EXCLUSIVE TALKS ABOUT HOW EVERYBODY IS REALLY JEALOUS OF THE RETURNS THAT YOU SEE AMONG MONDAY VENTURE CAPITAL WELD. PEOPLE ARE REALLY LOOKING FOR THOSE RETURNS. > > THAT WAS ABSOLUTELY TRUE ESPECIALLY IN 2020 AND 2021. THERE WAS A TON OF MONEY RAISED. THIS YEAR, THERE HAS BEEN SOME PRONGS TO WRITE DOWN SOME OF THOSE VENTURE INVESTMENTS BUT THOSE, MUCH FEWER THAN YOU DO IN THE PUBLIC MARKETS FOR CERTAIN. > > THAT IS WHAT I WANTED TO GET AT, KATHY. THE IDEA THAT JUST BECAUSE THESE ARE PRIVATE INVESTMENTS AND THEY ARE NOT TRADED DAILY OR A FEW TIMES A WEEK DOESN'T ACTUALLY MEAN THE VALUE REFLECTS THE VALUE SOMEBODY WOULD PAY FOR THEM. IS THIS SHIELDING TIGER GLOBAL FROM SHOWING HUGE LOSSES OR IS IT SAYING WE ARE MARKING THESE QUARTERLY? SO WE ARE NOT SHOWING THE VOLATILITY AND FLUCTUATIONS? > > IT'S A LITTLE BIT OF BOTH. TIGER GLOBAL BECAUSE THEY LOST A LOT OF MONEY IN THE PUBLIC STOCK FUNDS, MOST OF THEIR MONEY NOW IS IN PRIVATE COMPANIES. AND AT THAT SORT OF SHIELDS THE BUSINESS BECAUSE PEOPLE ARE LOCKED UP IN THOSE INVESTMENTS AND OF THOSE FUNDS FOR 7, 8, 9, 10 YEARS. PEOPLE COULDN'T PULL THEIR MANY EVEN IF THEY WANTED TO. > > THEY COULDN'T, RIGHT. > > ON THE OTHER HAND THERE IS THIS IDEA, AS YOU SAID, THEY ONLY WORK THOSE COMPANIES ON A QUARTERLY BASIS. BECAUSE THEY HOLD THEM FOR A LONG TIME AND BECAUSE SOMETIMES YOU DON'T CHANGE THE EVALUATION UNLESS THERE IS ANOTHER ROUND OF FUNDRAISING. THE EVALUATIONS DON'T CHANGE AS QUICKLY AS THEY DO IN STOCK MARKETS. > > WE ARE GOING TO HAVE TO LEAVE IT THERE. BIG THANK YOU TO CATHERINE BURTON. CHECK OUT THE BLOOMBERG EXCLUSIVE TALKING ABOUT TIGER GLOBAL. ONE THING I HAVE BEEN THINKING ABOUT WHAT DOES IT MEAN FOR LARGE PENSIONS WHO HAVE CERTAIN ALLOCATIONS THEY HAVE TO GET TO CERTAIN ASSET CLASSES IF WE START TO SEE SHIFTS IN THAT SENSE? RELIANCE ON PRIVATE EQUITY? > > OBVIOUSLY WE KNOW THEY HAVE HAD TO SHIFT INTO THAT BECAUSE YOU WERE GETTING YELLED OUT. WHAT THEY ARE TELLING ME IS BASICALLY, THEY DON'T NEED TO. THEY ARE IN THIS FOR THE LONG HAUL. THEY ANTICIPATED THERE WOULD BE DROPS ON A YEAR TO DATE BASIS FOR SOME OF THESE INVESTMENTS BUT THEY THINK IT WILL WORK OUT. THE ASTOR QUESTION IS WHERE DO YOU GO? IT WASN'T JUST THE BOND MARKET YOU WEREN'T GETTING YELLED BUT YOU DIDN'T EVEN HAVE THE SCALE. > > THIS IS A FIRM THAT HAS CONSISTENTLY FOCUSED ON CONSUMER. HOW DO YOU PIVOT AWAY FROM THAT AND AND THAT'S WHAT YOUR ADMISSION AS IT'S REALLY DIFFICULT TO FIND THE RETURNS. THE LAST HOUR OF TRADING IN 2022. WE ARE GOING TO TALK ABOUT THE MARKETS. > > JAY POWELL WARNED SOME COOKS BUT YOU DIDN'T WANT TO LISTEN. THERE ARE HEAVY GAINS AT LEAST FOR NOW. S & P 500 INDEX AT THE START OF THE YEAR AT A RECORD HIGH. IT'S GOING TO CLOSE OUT SOMEWHERE AROUND 3800. ROMAINE BOSTICK THEN CAROL MASSAR ON THIS FINAL DAY OF THE FINAL YEAR. > > IT HAS NOT BEEN AN EASY TRICK THIS YEAR. OFTEN IN ONE DAY WE HAVE SEEN VOLATILITY. > > THE VOLATILITY HAS BEEN INSANE THIS YEAR. WAS THIS THE MOST VOLATILE YEAR EVER? SURPRISINGLY, IT WASN'T. I LOOKED AT IT ON A POINTS BASIS. CLOSING BASIS, WHEN YOU SORT OF SMOOTH THAT OUT BECAUSE YOU HAVE TO ACCOUNT FOR THE SIZE OF THE S & P GROWING, NOT REALLY. IT WAS WORSE THAN 2020, I THINK IT WAS WORSE IN 2014. > > ANY GIVEN DAY ARE JUST IN GENERAL? > > BUT THE GENERAL IDEA HERE AS WELL THERE WAS VOLATILITY IT WASN'T UNUSUAL. HEADING INTO 2020 AND 2021, REMEMBER VOLATILITY DIDN'T EXIST. I MEAN IT EXISTED BUT IT WASN'T AT THING. > > I REMEMBER 2020, AT WASN'T THAT LONG AGO. WE ENDED THE YEAR HIGHER, SIGNIFICANTLY THAT YEAR. > > I DON'T HOW DO WE READ IT? LET'S SEE WHAT ABIGAIL DOOLITTLE HAS TO SAY. WE ARE GOING TO START WHERE WE TALKED ABOUT A LOT THIS WEEK. LET'S BE FAIR EVEN WITH THE RALLY YESTERDAY. ABIGAIL, LET'S START THERE. > > IT ISN'T SENT ON AGAIN AND OFF AGAIN OFF I SHOULD SAY. TODAY, NOT SO MUCH. GOT THE HECK OUT OF HERE. WE DO HAVE TWO DAYS IN JERRY -- JANUARY -- > > SHE DOESN'T BELIEVE IN SANTA CLAUS. > > YOU KNOW WHAT'S INTERESTING, THEY BOTH CAN'T PUT TWO DAYS TOGETHER YOU HAD A BIG DAY YESTERDAY AND IT WAS REMINISCENT OF THIS WHOLE YEAR. ROAMING, I LIKED WHAT YOU WERE SAYING THAT BACKUP, TRADERS NOT BELIEVING IN JAY POWELL. AND EARLIER I MISSPOKE IN TERMS OF THE AMOUNT OF MOVEMENT I SAID IT WAS ABOVE 2.5% IT IS UP 3.5%. BOTH RAISING ON THE YEAR BY 3.5%. THE FIRST TIME SINCE 1999. > > I WAS LOOKING AT THE RETURNS. ON A GLOBAL BASIS EVEN ON THE HEDGE IT'S LIKE 12 OR 13 THE THING ABOUT THAT SO MANY PEOPLE ARE FOCUSED ON THE EQUITIES THIS YEAR. THE FACT THAT THIS BULL MARKET CAME TO AN END AFTER WHAT? 40 YEARS MORE OR LESS AND THE FACT THAT PEOPLE DON'T THINK WE ARE HEADING BACK INTO UP A MARKET. > > EVERY YEAR, EVERYBODY MYSELF INCLUDED I HAVE BEEN FOCUSED ON THE STOCK SELLOFF THAT IS A GREAT POINT. THAT TREND HELD LIKE A GLOVE FOR 40 YEARS AND IT'S BEEN BROKEN. WE TALKED ABOUT IT IN IN TERMS OF THE FED. WHAT'S SO INTERESTING TO ME IS THE TENURE NOTE HAVING ITS WORST YEAR SINCE 1999. THAT WAS THE HEIGHT OF THE TECH BUBBLE. THIS YEAR WE HAVE A SIMILAR KIND OF SELLOFF BUT IT HAS EVERYTHING TO DO WITH THE FED. > > HOST QUESTION ABOUT CALENDARS AND THE NEW BEGINNING IN 23 FROM A TECHNICAL PERSPECTIVE AND FROM A FUNDAMENTAL PERSPECTIVE, THIS STUFF ACTUALLY MATTERS. > > YES, I WOULD SAY SOME OF IT IS PSYCHOLOGICAL. ALTHOUGH YOU DO HAVE TECH SALES BUT FROM A TECHNICAL PURPOSE -- PERSPECTIVE IT DOES MATTER. THAT IS WHERE SOME OF THE WONKY IN-DEPTH TECHNICALS COME INTO VIEW. I WILL SAY THE LONGER TERM CHARTS, THE OTHER DAY WE WERE TALKING ABOUT THAT WITH THE S & P 500 HOLDING SOME OF THE MOVING AVERAGES. I THINK NEXT YEAR THE TAKEAWAY OF MOST OF THE CHARTS, MOST OF THE FUNDAMENTALS IS A RANGE. THAT'S MAYBE ONE POTENTIAL MESSAGE. BILLY WE START OUT. > > MORE VOLATILITY AHEAD. > > THIS CAN'T HAPPEN AGAIN AND THEN WE GET INTO AND OTHER GEAR OF UNUSUAL TRAITS. > > EARLIER THIS MONTH BLOOMBERG NOTING MANY BOND SALES DOWN AROUND 19% THAT IS ACCORDING TO DATA COMPILED BY BILL BURCK. WITH A LOOK AT THE MARKET, 2022 NOT A GREAT YEAR AT LEAST FOR SALES. WHAT DOES 2023 HAVE IN STORE? > > WE ARE SUPER EXCITED ABOUT 2023. IT IS YIELDING SOME INTERESTING RETURNS ON A TAX-EXEMPT BASIS. WE SIMILARLY ENCOURAGED SIGNIFICANT BILLET -- VIGILANCE AS YOU EVALUATE WHAT SECURITIES YOU MIGHT WANT TO BE INSTRUCTIVE ON. THERE ARE GOING TO BE SOME LINE PEELS OUT THERE -- LINE FEELS AS WE HEAD INTO 2023. > > EXPECTATIONS IN 2020 AND 2021 OR SO DIRE AND WE SAW THE PANDEMIC HELPED A LOT OF THESE CITIES AND STATES. WHAT PULLS PEOPLE BACK INTO THIS MARKET? > > I DO THINK THAT IF WE ARE HEADING INTO SOME SORT OF ECONOMIC OR RECESSIONARY PRESSURES I DO BELIEVE WE SHOULD BE CONSTRUCTIVE ON ESSENTIAL PURPOSE REVENUE BONDS PARTICULARLY WATER, SEWER, OR ACCESS OF 90% OF TRANSACTIONS ARE RATED A ARE HIGHER. AND IF PEOPLE ARE LOOKING FOR MORE OPPORTUNITIES WE WILL BE LOOKING AT CHARTER SCHOOLS WHERE TWO THIRDS OF THE RATINGS WOULD BE TRIPLE B AND A THIRD OF THE MARKET IS NOT GRADED. > > PLEASE CONTINUE. > > I WAS GOING TO SAY THE RATES AND THE RISK-ADJUSTED RATES ARE ACTUALLY ATTRACTIVE FOR THE FIRST TIME IN A NUMBER OF YEARS. > > WHAT ARE YOU ANTICIPATING AND TERMS OF ISSUANCE? CAN YOU GET A FEEL FOR WHAT TYPE OF MARKET IT WILL BE FOR THAT? > > THAT IS A GREAT QUESTION. NEW ISSUE MARKET VOLUME LAST YEAR WAS DOWN CLOSE TO 20% AND WE HAVE SEEN ESTIMATES FOR 2023 RANGING FROM A SMALLER NUMBER ABOUT 350 BILLION UP TO 500 BILLION. MY INSTINCT TELLS ME IT WILL PROBABLY BE CLOSER TO 2022 LEVELS, SLIGHTLY HIGHER. WE WILL SEE SOME NEW MONEY OPPORTUNITIES. WE HAVE LEARNED TO STRUCTURE HIGH-YIELD YIELDS AS WELL AS THERE WILL BE MORE FUNDING OPPORTUNITIES. MY GUESS IS SOMEWHERE HIGHER THAN 2022. > > ONE OF THE INTERESTING THINGS IS WE REALIZED WE CAN ALMOST WORK FROM ANYWHERE IN THE COUNTRY. YOU HAD A POPULATION THAT WAS STUCK. YOU DIDN'T SEE HOW A LOT OF MOVEMENT, HOW DOES THAT IMPACT WHERE WE SEE THE NEW ISSUANCE OR WHERE THE MINIMARKET LOOKS MORE INTERESTING? BECAUSE OF THE SOME PANDEMIC MOVEMENTS. > > THERE IS NO DOUBT WE HAVE SEEN MOVEMENTS PARTICULARLY TO THE SOUTHEAST WHERE PEOPLE ARE MOVING TO FLORIDA 30-40 YEARS EARLIER THAN ANTICIPATED. IT HAS CREATED A TAX POSITIVE CLIMATE. WHEN YOU SEE DEMOGRAPHIC SHIFTS, YOU ARE SEEING THE NEEDS FOR MORE ROADS, BRIDGES, SCHOOLS, HOSPITALS AND PUBLIC SERVICE TYPE BUILDINGS. WE ARE GOING TO SEE MORE VOLUME IN THE STATES THAT ARE ABSORBING THE DEMOGRAPHIC SHIFT. > > I'M WONDERING ABOUT, YOU TALKED ABOUT OPPORTUNITIES FROM THE PERSPECTIVE OF WHAT WE WILL SEE NEXT YEAR WHAT ARE AREAS OF CONCERN, AND AREAS TO AVOID? > > I'M PARTICULARLY SENSITIVE ABOUT SENIOR LIVING, HEALTH CARE, AND PROJECT FINANCE. FRANKLY, SENIOR LIVING OCCUPANCY WHICH IS YOUR PRIMARY DETERMINANT OF REVENUE HAS NOT RESTORED TO PRE-COVET LEVELS. SENIOR LIVING OPERATORS ARE DEALING WITH INFLATIONARY INCREASES AS IT RELATES TO LABOR AND FOOD WHICH TOGETHER ACCOUNT FOR MORE THAN TWO THIRDS OF THEIR OPERATING BUDGET. > > I'M SURPRISED TO HEAR THAT FROM A DEMOGRAPHIC PERSPECTIVE. WE HEAR ABOUT OLDER GENERATIONS AGING INTO THESE HOMES. > > 10,000 BABY BOOMERS ARE AGING INTO 65 AND OLDER AT THIS POINT. I COMPLETELY AGREE WITH YOU. IT IS THE FUNDING PARADIGM THAT NEEDS A LITTLE FIXING. RIGHT NOW YOUR REVENUES ARE NOT GROWING AT THE SAME RATE YOUR EXPENDITURES ARE GROWING. AS A RESULT, IT IS CREATING A LOT OF HEADLINE NOISE. HALF OF THE DEFAULTS IN THE MINIMARKET THIS YEAR WERE IN THE RETIREMENT SECTOR. > > WE ARE GOING TO LEAVE IT ON THAT NOTE. SENIOR MANAGING DIRECTOR AT HILLTOP SECURITIES JOINING AS ON THE LAST TRADING DAY OF THE YEAR. ECHOES WITH THE ECONOMY, RIGHT? I DO WONDER IF WE HAVE A PROBLEMATIC ECONOMY WHAT IT MEANS FOR THESE TYPES OF INVESTMENTS. > > LET'S GET TO THE BROADER QUESTION, THESE ECONOMIC DOWNTURNS IT ENDS UP BEING THE CANARY IN THE CALL LINE PEOPLE THAT SEE THE GLASS HALF-FULL THEY LOOK AT SPREADS AND WHAT WE SEE IN THE SAFER AREAS GOVERNMENT, SOVEREIGN DEBT, THEY ARE NOT SEEING THE RISK OF THEIR. AS FAR AS ANY POTENTIAL CREDIT RISK AND INTEREST-RATE RISK MAY NOT BE AS MUCH AS PRONOUNCED. > > SHE MADE A GOOD POINT ALL OF THE LOCAL GOVERNMENTS, CITIES AND TOWNS GOT A BOOST BECAUSE OF THE AID. > > THAT WAS OPPOSITE OF WHAT PEOPLE THOUGHT WOULD HAPPEN. LET'S GET YOU UP-TO-DATE ON SOME OF THE NEWS FROM AROUND THE WORLD. > > A HOUSE PANEL HAS RELEASED SIX YEARS OF DONALD TRUMP STOCKS RETURNS. THAT ENDS A YEARS LONG BATTLE FOR THE PRESIDENT WHO FOUGHT TO KEEP HIS FINANCIAL RECORDS PRIVATE. HE AND HIS BUSINESSES LOST BILLIONS BETWEEN 2015 AND 2020 AND THAT ALLOWED HIM TO MINIMIZE HIS TAX BILL. TRAVELERS FROM THE CHINA TO THE U.K. WILL BE REQUIRED TO HAVE A NEGATIVE COVID TEST. THE MOVE COMES AFTER SOME EUROPEAN HEALTH OFFICIALS CALLED THE MOVE UNJUSTIFIED. IN CANADA THE COURT HAS CLEARED THE WAY FOR TWO OF THE COUNTRIES TELECOM FIRMS. THE TRIBUNAL BUILDING FLAVOR -- FAVOR OF ROGERS MEDICATIONS THE DEAL WAS WITH SHAW COMMUNICATIONS. OVER IN MYANMAR SUU KYI WAS SENTENCED TO 33 YEARS IN PRISON. THE MILITARY OUSTED HER DEMOCRATICALLY ELECTED GOVERNMENT. HER TOTAL ONE THAT HER TOTAL PRISON TERM IS 33 YEARS. GLOBAL NEWS 24 HOURS A DAY, ON AIR AND ON BLOOMGERG QUICKTAKE. POWERED BY MORE THAN 2700 JOURNALISTS AND ANALYSTS IN OVER 120 COUNTRIES. > > WHAT ARE YOU WATCHING MOST FOR 2023? > > COMMODITIES. THIS WAS KIND OF FRONT RAN THE BOND MARKET. I THINK A LOT OF TRADERS IN THAT SPACE REALLY SAW WHAT WAS COMING I THINK THE FLIP TO THE DOLLAR WEAKNESS WE HAVE SEEN OVER THE LAST COUPLE OF MONTHS HERE IF THAT DOES PERSIST INTO 2020. I THINK THAT MIGHT END UP BEING THE TAIL WRITING THE DOG. > > IT CARRIED US FOR THE LAST DECADE AS THE REGINA SHIFTED. > > I'M THINKING ABOUT CRYPTO. AUTHORITIES SEIZE BILLIONS IN FTX ASSETS. WE ARE GOING TO TALK ABOUT THAT. > > STORIES OF THE YEAR HAS BEEN THE COLLAPSE IN CRYPTO AND CERTAINLY THE COLLAPSE OF A LOT OF THE BIG PLAYERS IN THAT SPACE. AN EYE ON SAM BANKMAN-FRIED WHO HAS RESURFACED ON TWITTER, NOT SURE IF THAT'S IN THE ADVICE OF HIS LAWYERS ARE NOT. AND A LOT OF TALK OF WHAT WENT DOWN IN THE BAHAMAS LEARNING THAT THE COMMISSION TO TAKE CONTROL OF ABOUT $3.5 BILLION WORTH OF DIGITAL ASSETS AFTER THE BANKRUPTCY FILING BACK IN NOVEMBER. HANNAH MILLER HAS BEEN COVERING THIS FOR US. HANNAH, I DO WANT TO START OFF WITH WHAT WE LEARNED ABOUT THE BOHEMIAN AUTHORITIES TAKING CONTROL OF THESE ASSETS. HAVE WE CONFIRMED THAT? AND TWO ARE THEY SO ANY DIGITAL CURRENCY SOMEWHERE? > > WE HAVE CONFIRMED THAT THE BAHAMAS HAVE SEIZED $3.5 BILLION WORTH OF ASSETS. I THINK IT'S MOST LIKELY A MIX OF ADDITIONAL ASSETS AND TRADITIONAL MONEY BUT, YEAH, THIS HAS BEEN DONE AS A PRECAUTION. $372 MILLION PACT THAT ROCKED FTX AFTER THE COMPANY FILED FOR BANKRUPTCY ON NOVEMBER 11, THIS IS A PRECAUTIONARY MEASURE TO FURTHER PROTECT FTX'S FUNDS. > > WHEN IT COMES TO CUSTOMERS TO WE KNOW HOW MUCH MORE MONEY IS NEEDED TO AT LEAST START TO REPAY SOME OF THESE CREDITORS? > > THE NUMBERS ARE STILL A LITTLE BIT UP IN THE AIR. WE DON'T KNOW THE FULL DETAILS ABOUT WHO TALK CREDITORS ARE, HOW MUCH THEY ARE OWED, SO THAT IS STILL BEING FIGURED OUT. WE HAVE ALSO SEEN MOVEMENTS OR FUNDS BELONGING TO ALAMEDA RESEARCH. THERE IS A LOT OF UNCERTAINTY HERE. > > WHAT I FIND INTERESTING IS THE SEIZURE, IT WAS DONE BASED ON INFORMATION PROVIDED BY SAM BANKMAN-FRIED. I WOULD LOVE TO BE A FLY ON THE WALL. > > YOU AND ME BOTH. I THINK IT'S GOING TO BE INTERESTING TO SEE WHAT HAPPENS HERE. IT SEEMS THERE ARE NEW DEVELOPMENTS EVERY DAY WITH THIS CASE AND THERE IS NEW INFORMATION WE ARE LEARNING > > EVERY HOUR. IS IT SAFE TO SAY THEY NEED HIS COOPERATION FOR THE CONNECTIVITY BETWEEN ALL OF THESE ORGANIZATIONS TO SEIZE AS MANY ASSETS AS POSSIBLE? > > WE KNOW AUTHORITIES ARE COOPERATING WITH ALAMEDA, THE FORMER ALAMEDA CTO, CEO AND FORMER FTX CTO. WAYNE. SO THEY ARE PROVIDING STRONG EVIDENCE HERE AND PERHAPS THAT IS ENOUGH FOR A REGULATOR CASE. > > JUST KEEPING TRACK OF THE NEWS FLOW REGARDING THIS STORY THE WALL STREET JOURNAL REPORTING THAT SAM BANKMAN-FRIED IS LIKELY TO PLEAD NOT GUILTY TO THE COUNTS OF FRAUD. THIS HEARING IS SCHEDULED FOR NEXT WEEK ACCORDING TO SOURCES CLOSE TO THE MATTER. SPF IS -- SBF IS LIKELY TO PLEAD NOT GUILTY. AS WE GET INTO THE NITTY-GRITTY OF THESE HEARINGS IN COURT WHETHER IT'S THE ACTUAL FRAUD CHARGES OR SOME OF THE BANKRUPTCY PROCEEDINGS WHAT MORE IS LEFT TO LEARN? HOW MUCH DO WE NOT KNOW? > > THERE IS STILL, I THINK A LOT WE ARE GOING TO LEARN. WHAT EXACTLY HAPPENED HERE? WHERE SOME OF THE MONEY IS, WHAT EXACTLY IS THE CONTAGION HERE AND TWO IS AFFECTED ARE ALL THINGS WE ARE TRYING TO LEARN MORE ABOUT. I'M EXCITED TO WATCH DEVELOPMENTS HERE. > > ROMAINE MENTIONED HE IS BACK ON TWITTER AND CUSTODY OF HIS PARENTS. HE IS ALLOWED TO BE USING COMPUTERS TO A CERTAIN EXTENT. HE IS NOT ALLOWED TO BUY THINGS FOR OVER $1000 IN ADDITION TO OTHER THINGS. HE SAYS NONE OF THESE ARE ME, I'M NOT AND COULDN'T BE MOVING ANY OF THOSE FUNDS, I DON'T HAVE ACCESS TO THEM ANYMORE. THIS IS A STORY HE IS TWEETING OUT THAT SAYS ALAMEDA WALLETS BECOME ACTIVE DAYS AFTER COMMUNITY MOLDS FELL PLAY YOU REFERENCE THIS IDEA OF MONEY MOVING, WHAT IS THE CONCERN HERE AND WHY IS HE COMING TO HIS OWN DEFENSE RATE NOW? > > ABOUT $1.7 MILLION WORTH OF FUNDS > > . 1.7 MILLION? > > THIS IS A GUY WHO HAS BEEN HE HAS A $250 MILLION BILL WHAT IS ANYONE CARE ABOUT $1.7 MILLION? > > THERE IS STILL A LOT OF QUESTION ON WHO THE MONEY BELONGS TO AND WHETHER IT SHOULD BE FROZEN AS THE BANKRUPTCY PROCEEDINGS MAY FORWARD. SO THE FACT THAT THERE IS $1.7 MILLION MYSTERIOUSLY MOVING OUT OF THESE WALLETS IS REALLY STRANGE. YOU KNOW, THERE IS A QUESTION OF WHO IS DOING THIS AND WHETHER IT'S AN INSIDE JOB OR A HACK. THERE IS A LOT UNKNOWN HERE AND IT SEEMS LIKE SBF HAS WANTED TO DENY COMPLETE INVOLVEMENT WITH THESE TRANSACTIONS. > > ONE OF THE THINGS I LOVE ABOUT THE FINANCIAL WORLD EVEN WITH DOWNFALLS I GO BACK TO THE TECH FALL OF 1999 AND 2000. THE INTERNET CONSUMES OUR WORLD. ONLINE WHATEVER CONSUMES OUR WORLD. I WONDER HOW YOU ARE THINKING ABOUT HAVING THE BEST OF CRYPTO OVER THE LAST FEW YEARS. HOW DO YOU THINK ABOUT IT FOR 2023? IS IT THE MORE TRADITIONAL FINANCE THAT COMES IN AND SAYS WE GOT THIS OR HOW DO YOU THINK ABOUT IT? > > I THINK WHAT'S HAPPENED WITH CRYPTO IS, YES, THERE HAVE BEEN THESE PREVIOUS AND MARKETS. THERE IS THIS CYCLE BUT ANY MISSTEP IS JUST GOING TO BE ON A MUCH LARGER SCALE. CRYPTO IS MORE MAINSTREAM NOW MORE PEOPLE KNOW WHAT BITCOIN ACTUALLY IS AND WHETHER THAT WILL DISRUPT FUTURE MARKET CYCLES AND BREAK PREVIOUS PATTERNS REMAINS TO BE SEEN SO THAT IS SOMETHING WE ARE WATCHING IN 2023. > > WHAT ABOUT OTHER THINGS WE ARE WATCHING IN 2023? THIS YEAR, BEING A FUNDAMENTAL SHIFT, WE WOULD BE TALKING ABOUT PEOPLE GOING TO WORK IN D5 WE ARE SEEING SOME ANECDOTAL EVIDENCE OF PEOPLE WORKING IN TRADITIONAL FINANCE. WHAT DOES 2020 HAVE IN STORE GIVEN THAT 2022 WAS SUCH A TERRIBLE YEAR? > > I THINK ONE THING WE NEED TO WATCH NEXT YEAR IS THE MOVEMENT OF REGULATORS. THE FURTHER ENCOURAGEMENT COULD SPOOK PEOPLE AND SPOOK INVESTORS. AND KIND OF PUSH THEM BACK AND A TRADITIONAL FINANCE WHICH THEY SEE IS A SAFER HAVEN HERE. IT WILL BE INTERESTING TO SEE WHAT HAPPENS BUT YES MOVEMENTS AMONG INSTITUTIONAL INVESTORS IS SOMETHING WE ARE WATCHING EVEN JUST CRYPTO LEADERS, WHETHER THEY ARE STICKING WITH THE INDUSTRY IS SOMETHING WE ARE KEEPING AN EYE ON. > > IS THERE ANY SENSE HERE, HANNAH, THAT THE NARRATIVE THAT WE GET OUT OF THE CRYPTO FAITHFUL WILL BE ANY DIFFERENT? WE SORT OF SWUNG FROM VALUE TO USE CASE, TO GOD KNOWS WHAT. I FEEL THOSE HAVE ALREADY BEEN EXHAUSTED SO IF YOU ARE ALREADY KNEE-DEEP IN THIS OK BUT HOW DO YOU WOO THOSE FOLKS THAT ARE LOOKING FOR A REASON WHY THIS EVEN EXIST? > > WHEN I TALK TO STAUNCH ADVOCATES OF THE INDUSTRY, DECENTRALIZED FINANCE COMES UP AGAIN AND AGAIN. WE HAVE SEEN PEOPLE PUSH THIS AS A BETTER ALTERNATIVE TO TRADITIONAL FINANCE. IT CAN HELP PREVENT THINGS LIKE WHAT HAPPENED WITH FTX. CENTRALIZED ENTITIES ARE THE ROOT OF EVIL, THAT'S ACTUALLY DECENTRALIZED ENTITIES THAT ARE THE ANSWER. IT WILL BE INTERESTING TO SEE WHETHER THE FOCUS ON IT COMES STRONGER. > > BEFORE WE WRAP UP, IS THERE THE NEXT JP MORGAN OF CRYPTO THAT YOU ARE KEEPING AN EYE ON AND WE SHOULD ALL KEEP AN EYE ON? IS THERE SOMEONE? > > I DON'T KNOW. > > LET'S MAKE SURE JAMIE DIMON DOESN'T LISTEN TO THE SHOW. > > A VOICE WE TRUST IN THE SPACE. > > I DON'T KNOW IF PEOPLE WANT THAT LABEL ANY TIME SOON OR IF PEOPLE SEE IT AS A CURSE. IT WILL BE INTERESTING TO SEE IF ANYONE TRIES TO FILM -- FILL SBF'S SHOES. > > THE END OF THE ARE COMES WITH THE DOWNFALL OF CAPITAL WHEN YOU SAW THESE COMPANIES KIND OF FILING FOR BANKRUPTCY. HE WOULD GO IN AND BUY THEM AND HE GOT THE LABEL RIGHT, THE JP MORGAN CRYPTO. > > YOU KNOW WHAT I'M SAYING. > > I NEVER CALLED HIM THAT. > > GOODBYE, HANNAH. WHEN THE NEXT JP MORGAN OF CRYPTO -- > > WHEN THERE IS A NEW INDUSTRY SOMEBODY BECOMES A SPOKESPERSON FOR IT. I DO WONDER -- > > THEY DO NEED A NEW SPOKESPERSON. HE WAS IT FOR A WHILE. AT THE END OF THE DAY IT'S ALL ABOUT NOT SO MUCH WHO PUTS THEMSELVES OUT THERE BUT WHO PEOPLE TRUST. OF COURSE WE LEARNED THEY PUT TRUST IN SBF AND THE TRUST, AT LEAST FOR NOW, APPEARS TO NOT HAVE BEEN WISE. > > WE HAVE MORE TO TALK ABOUT ABOUT THE HOUSING MARKET. ROMAINE: WELCOME BACK. IT'S THE FINAL TRADING DAY OF THE YEAR. WE'RE GOING TO GO OUT WITH A WHIMPER AT LEAST ON A DAILY BASIS, WE ARE OFF OF THE LOWS OF THE DAY. THE BIGGER STORY IS YEAR-TO-DATE. BASICALLY DOWN ABOUT 20%. WE HAVE BEEN IN A BEAR MARKET SINCE THE MIDDLE OF THE YEAR. IN JUNE, THEY RAISED RATES BY 75 BASIS POINTS. JAY POWELL SAYS HE CAN -- PLANS TO KEEP GOING UNTIL 2023. CAROL: ISN'T IT AMAZING WHEN YOU START TO THINK THAT JUNE IS WHEN THE FED STARTED TO BECOME SO AGGRESSIVE. IT FELT LIKE ALL YEAR. ROMAINE: THEY DID RAISE 25 BUT THEN WHEN YOU GOT THE 75, THAT'S WHEN THE MARKET DECIDED HE WAS SERIOUS. CAROL: WHAT REALLY GOT SERIOUS -- ROMAINE: HAVE YOU EVER SEEN HIM LAUGH? DOES HE HAVE A SENSE OF HUMOR? ROMAINE: THERE ARE SOME PEOPLE HERE WHO MAY NOT. CAROL: MANY PEOPLE ARE NOT LAUGHING ABOUT THE HOUSING MARKET. WE HAVE SEEN THEM PULLING OFF OF THE HIGHS BUT NONETHELESS A SLOWDOWN DIFFICULT FOR BUYERS AND SELLERS WHEN IT COMES TO HOUSING. WE THOUGHT AS WE GET READY FOR THE NEW YEAR, LET'S CHECK IN ON THE HOUSING MARKET. OUR GUEST IS JASON KERN AT PORTLAND. -- CORTLAND. THE HOUSING MARKET, WHAT IS 2023 GOING TO HOLD FOR THOSE IN THE HOUSING INDUSTRY AND BUYERS AND SELLERS? GUEST: THANK YOU. OUR BUSINESS IS IN THE MULTIFAMILY HOUSING SECTOR. WE OWN, MANAGE, DEVELOP MULTIFAMILY APARTMENT BUILDINGS BASICALLY. THE SINGLE-FAMILY HOUSING MARKET IS A BIT OF AN ADJUNCT. ALMOST A COMPETITOR IN SOME WAYS THAT 20% OF OUR RESIDENTS IN OUR APARTMENTS LEAVE TO MAKE A FIRST TIME HOME PURCHASED. EVEN THOUGH THE RISING INTEREST-RATE ENVIRONMENT THAT YOU WERE JUST TALKING ABOUT, THE RAISES OVER THE LAST SIX MONTH HAS NEGATIVELY AFFECTED OUR BUSINESS. BUT THE SILVER LINING FOR US IS IT HAS INCREASED THE EXPENSIVE AND AFFORDABILITY OF SINGLE-FAMILY HOUSING. IT KEEPS A LOT OF OUR TENANTS IN PLACE BECAUSE IT IS HARDER FOR THEM TO BUY THE FIRST TIME HOME WHEN THE MORTGAGE RATE HAS GONE FROM 3% TO 7% ALMOST OVERNIGHT. ROMAINE: I THOUGHT ONE OF THE MORE INTERESTING THINGS ABOUT THE HOUSING DATA THIS YEAR, THE TRENDLINE FOR MULTIFAMILY HAS BEEN MORE UPWARD TRAJECTORY AT LEAST IN THE SECOND HALF OF THE YEAR. I AM CURIOUS WHAT IS DRIVING THAT? IS IT SHORT-TERM ISSUES OR ARE THERE LONG-TERM STRUCTURAL ISSUES DRIVING IT? GUEST: THERE'S A LONG-TERM BENEFICIAL SUPPLY DEMAND DYNAMIC . AS A LANDOLL -- LANDOWNER LIKE WE ARE, OUR RESEARCH SHOWS THAT WE ARE PROBABLY 1.5 MILLION HOMES SHORT OF DEMAND. THAT PUTS YOU IN A PRETTY POSITIVE PLACE IN TERMS OF DEMAND FOR YOUR HOUSING UNITS OR HOMES. THAT GAP CAN BE SHRUNK BY A LOT OF NEW SUPPLY AS YOU TALK ABOUT THE HOMEBUILDERS BUILDING A LOT OF SINGLE-FAMILY HOMES. DEVELOPERS LIKE OURSELVES BUILDING APARTMENT UNITS. THERE'S A LOT OF DEVELOPMENT GOING ON WHICH IS AN APPROPRIATE RESPONSE TO THE DEMAND FOR HOUSING. THE CURRENT INTEREST-RATE ENVIRONMENT IMPACTS ALL ASPECTS OF THE U.S. AND WORLD ECONOMY BUT ONE PLACE IT DOES IMPACT IS HOUSING. TIM: TIM: HOW MUCH DOES IT COST YOU TO DEVELOP A PROJECT THAT A FEW YEARS AGO YOU COULD HAVE DEVELOPED FOR LESS? HOW MUCH MORE ARE YOU HAVING TO PAY AS A RESULT OF HIGHER INTEREST RATES AND AT WHAT POINT DOES IT BECOME NOT WORTH IT EVEN MORE EVEN THERE'S A SUPPLY AND DEMAND ISSUE? GUEST: IT VERY MUCH DEPENDS MY MARKET. GENERALLY SPEAKING, OUR BASE RATE WE USE HAS GONE UP AT LEAST 400 BASIS POINT. YOU'RE TALKING ABOUT 500 BASIS POINTS OF INCREASED INTEREST RATES COST. THE ACCESS TO THE DEBT AND THE LEVERAGE YOU CAN GET ON A PROJECT HAS BEEN IMPEDED. IT MAKES IT MUCH MORE DIFFICULT. OUR BUSINESS IS A YIELD BUSINESS. WE ARE A CERTAIN AMOUNT OF RENT INCOME WE CAN EARN. WHEN YOUR COST OF DEBT SKYROCKETS, IT MAKES THE MARGINS SHRINK AND SOMETIMES DISAPPEAR IT MAKES A LOT OF DEVELOPMENT PROJECTS UNTENABLE. CAROL: ARE YOU GUYS PLANNING TO BUILD NEW UNITS? TELL US ABOUT THE ENVIRONMENT FOR THAT. HOW DO YOU FINANCE IT? ARE BANKS WILLING TO LEND THE MONEY? GUEST: IT HAS BECOME MORE CHALLENGING. WE ARE IN A BIT OF A HOLD RIGHT NOW. WE WERE BUSY FOR THE 18 MONTHS LEADING UP TO JUNE OF THIS YEAR. WE DID PROBABLY $7 BILLION OF NEW ACQUISITIONS DURING 18 MONTHS AND HAVE DONE LITTLE TO NOTHING IN THE LAST SIX MONTHS. NOT STARTING NEW DEVELOPMENTS AT THE MOMENT, WE ARE TAKING OUT WAIT-AND-SEE ATTITUDE. THERE'S A WIDESPREAD WHETHER YOU ARE DEVELOPING MORE BUYING AND SELLING APARTMENTS TO SEE WHAT BUYERS ARE WILLING TO PAY. NOT A LOT OF TRANSACTIONS ARE HAPPENING AND THAT TENDS TO CREATE RIGOR MORTIS IN OUR INDUSTRY. I EXPECTED TO BE QUITE SLOW GOING BACK TO YOUR ORIGINAL QUESTION FOR THE FIRST HALF OF 2023. LIKE ALL FINANCIAL MARKETS, UNCERTAINTY IS THE BIG THING KEEPING PEOPLE ON THE SIDELINES. I EXPECT BY THE MIDDLE OF 2023, WE WILL EXPECT SOME CLARITY IN TERMS OF WHAT JAY POWELL AND THE FED ARE DOING. WE MIGHT START SEEING RATE CUTS IN THE MIDDLE OF THE YEAR. ONCE YOU HAVE THE CLARITY, YOU'RE GOING TO HAVE A LOT OF CAPITAL SITTING ON THE SIDELINE. I THINK IT COULD BE A VERY BUSY AND INTERESTING SECOND HALF. ROMAINE: IS THAT CAPITAL ADJUSTED TO THE REALITY THAT EVEN IF YOU DO GET A FED PIVOT, IT'S NOT LIKE THEY'RE GOING TO TAKE IT BACK DOWN TO WHERE WE WERE AT THE START OF THE YEAR. CAN THEY LIVE WITH 5%, 4%, EVEN FOR PERCENT ON A FED FUNDS RATE? GUEST: THE PRICE ADJUSTMENT WE ARE CURRENTLY EXPERIENCING , IF YOU ADD ON LEVERAGE THAT IS MAYBE MORE EXPENSIVE THOSE THINGS CAN BALANCE OUT. ESPECIALLY IN MULTIFAMILY, WE HAVE A COUPLE OF GREAT ADVANTAGES. NUMBER ONE SUPPLY DEMAND. NUMBER TWO, WE WERE ABLE TO DO A LOT OF ARE BORROWING FROM THE GOVERNMENT AGENCIES. THEY HAVE GREAT PROGRAMS THAT ARE VERY HELPFUL FOR ACCESSING MORE ATTRACTIVE FINANCING. MULTIFAMILY SECTOR SPECIFICALLY. THIRDLY, IT'S THE FACT THAT IT IS ONE OF THE BELLWETHERS OF THE REAL ESTATE INDUSTRY, INVESTOR CAPITAL OVER THE LAST FEW YEARS HAS GRADUALLY AND NOW DRAMATICALLY GOING FROM OFFICE PRODUCT RETAIL PRODUCT TO MULTIFAMILY AND INDUSTRIAL. I THINK THAT'S GOING TO CREATE TRANSACTION VOLUME THAT WILL SURPRISE A LOT OF PEOPLE. TIM: WHAT CAN YOU TELL US ABOUT THE RENTS THAT ARE BEING PAID TO YOUR FIRM RIGHT NOW? ARE YOU SEEING DELINQUENCIES? ARE THEY BEING PAID ON TIME? HAS ANYTHING SHIFTED OVER THE LAST FEW MONTHS? GUEST: EVEN DURING COVID, WE DIDN'T EXPERIENCE SIGNIFICANT DELINQUENCIES. I THINK THAT IS PARTLY REFLECTIVE OF THE FACT THAT WE ARE IN SOME OF THE STRONGER MARKETS IN THE U.S.. WE ARE SUNBELT FOCUSED. THERE'S A LOT OF IN MIGRATION, JOB GROWTH, WAGE GROWTH. OUR MARKETS ARE NOT LUXURY APARTMENTS. OUR RENTS ARE SOMEWHERE AROUND $1800 PER MONTH. OUR AVERAGE RESIDENT IS PAYING 20% OF THEIR MONTHLY INCOME IN RENT. THAT IS SUSTAINABLE. WHEN RENTS WERE RISING DRAMATICALLY, THOSE INCREASES HAVE DECELERATED DRAMATICALLY. STILL IN POSITIVE TERRITORY. WE ARE STILL ROLLING OVER RENTS AT 7%-10% HIGHER THAN ONE YEAR AGO, BUT NOT A LOT OF DELINQUENCIES. THAT IS TO THE FACT THAT OUR COMMUNITIES HAVE GOOD CREDIT QUALITY. OUR RENTS ARE ATTAINABLE, AFFORDABLE, AND OUR RESIDENTS ARE ABLE TO SUSTAIN. IN A LOT OF CASES, THEIR INCREASE -- THEIR INCOME HAS INCREASED AS WELL. CAROL: WE'VE TALKED A LOT ABOUT THE ADULT LIVING COMMUNITIES. GIVE US AN IDEA OF THE MIX OF YOUR BUSINESS. GUEST: WE ARE NOT IN THE ACTIVE ADULT BUSINESS ANYMORE SO OUR PROPERTIES ARE STRAIGHT TRADITIONAL NO AGE RESTRICTION WHATSOEVER SO I COULDN'T COMMENT. CAROL: I THINK IT WAS ON YOUR WEBSITE, THAT'S WHY AM CONFUSED. WHAT ABOUT RETURN ON INVESTMENTS? WHAT EATS AWAY AT OUR A WHILE YOUR INVESTORS SPECIFICALLY? LABOR COSTS? MATERIALS? GUEST: INFLATION IS NOT AS BIG AN IMPACT ON OUR BUSINESS WHICH IS -- AS INTEREST RATES. INFLATION HITS US IN TERMS OF THE COST OF MATERIALS WHEN WE ARE DEVELOPING MORE RENOVATING. INFLATION CAN IMPACT US IF THE DISPOSABLE INCOME OF OUR RESIDENTS GETS CHIPPED AWAY BY MASSIVE INFLATION. I WOULD SAY MULTIPLE FAMILY IS UNIQUE IN THAT ONE OF THE RETURNS WE GENERATE FOR OUR INVESTORS DON'T RELY ON US SITTING AROUND WAITING FOR THE CAPITAL MARKETS TO INCREASE PRICING. WE CAN GENERATE A TON OF MONEY BUT RENOVATING UNITS, PUTTING IN NEW APPLIANCES, SWAPPING OUT COUNTERS AND CABINETS. TAKING OUT FLOORING, THAT SORT OF THING. IF WE'RE SMART ABOUT IT, WE CAN SPEND CAPEX AS A REALLY GOOD RETURN ON INVESTMENT. WE PRIDE OURSELVES ON WHEN WE BUY A NEW ASSET, WE ARE PUTTING OUR TEAM IN PLACE AND ALL OF OUR TECHNOLOGIES, ALL OF OUR SERVICE MODELS IN PLACE SO WE CAN HOPEFULLY GENERATE HIGHER OCCUPANCY PREMIUM RENTS JUST BY GENERATING A BETTER SERVICE CLOSER TO HOSPITALITY THAN TRADITIONAL. THOSE ARE ALL GOOD ROI ENDEAVORS. TIM: THANK YOU FOR JOINING US. I THOUGHT IT WAS INTERESTING WHAT HE SAID AT THE TOP OF THE INTERVIEW THAT -- IDEA OF HOUSES GETTING MORE EXPENSIVE OR MORE UNAFFORDABLE BECAUSE OF HIGHER INTEREST RATES LEAVES PEOPLE IN HIS UNITS FOR LONGER. THAT MAKES ME THINK WE ARE IN A STALEMATE BECAUSE YOU LIVE IN A HOUSE AND YOU HAVE A 30 YEAR MORTGAGE BELOW 3%, YOU'RE NOT MOVING. WHAT DOES THAT MEAN? THE SUPPLY ISSUE IS GOING TO STAY WHERE IT IS AND DEMAND WILL CONTINUE TO RISE. ROMAINE: THAT'S RIGHT. CAROL: THIS IS WHERE WE HAVE TO GET PERSPECTIVE. EVERYONE TALKS ABOUT MORTGAGE RATES IN THE 1970'S. I THINK IT'S A LIFE CHOICE. IT DEPENDS ON WHETHER YOU CAN AFFORD HIGHER MORTGAGE AND MAYBE IF NOT, YOU STAY IN MULTIFAMILY OR RENTAL. WE SELL RENTALS GO UP IN A BIG WAY BECAUSE PEOPLE CANNOT AFFORD HOMES. WE SHALL SEE. TIM: DO YOU GUYS WANT TO TALK ABOUT ARK? DOWN AGAIN TWO YEARS IN A ROW. ROMAINE: THE EMPIRE THAT KATHY'S BILL, I DON'T THINK SHE EVER CAME OUT AND SAID THIS IS ABOUT SHORT-TERM GAINS. SHE WAS MAKING BIG MOON SHOTS AND THIS IS WHAT HAPPENS. SAME THING WHEN YOU LOOK AT VENTURE CAPITAL OR PRIVATE EQUITY. ROMAINE: WE TALK ABOUT THE WORST PERFORMING STOCKS YEAR TO DATE, TESLA IS IN THAT GROUP. ONE OF THE BOTTOM FIVE PERFORMERS IN THE S & P. COMING OFF OF TWO STRAIGHT YEARS WORD WAS ONE OF THE BEST PERFORMERS. AND ANALYST WHO COVERS THIS COMPANY IS STILL BULLISH ON THE STOCK DESPITE THE DROP WE HAVE SEEN SO FAR THIS YEAR. HE SPOKE WITH US ON BLOOMBERG EARLIER AS TO WHY. GUEST: IT'S ONE OF THE MOST TRANSFORMATIONAL COMPANIES OF THE LAST 20-30 YEARS. THEY ARE HELD TO A HIGHER STANDARD FROM MULTIPLE PERSPECTIVES. THEY GET TREATED AS A DISRUPTIVE TECHNOLOGY. THAT IS WHY WHAT YOU HAVE SEEN, 70% OF IT IS NONFUNDAMENTAL. IT IS ELON MUSK TWITTER DRIVEN. THAT'S WHY ANY COURSE CORRECTION IS WHAT INVESTORS ARE CRAVING FOR. > > THE QUOTE I THOUGHT WAS GOOD THE HEROES OF THE BOOM ARE THE VILLAINS OF THE BUST. I ALWAYS THOUGHT OF IT IN OPPOSITE TERMS. YOU WANT TO PICK THE WORST PERFORMERS TO LOOK AT REAL UPSIDE FOR THE FUTURE. DO YOU SEE IT THAT WAY WITH TESLA? > > MUSK'S TESLA AND TESLA IS ELON MUSK. ULTIMATELY HE GETS IN THE CEO OF TWITTER, HE STOPS SELLING STOCK AND DOES IT AND IS NOT THE BOY THAT CRIED WOLF. THIS IS STOCK COULD GO HIGHER. THAT'S ULTIMATELY IT, ELON MUSK HAS GONE FROM A SUPERHERO TO A VILLAIN ON WALL STREET AND THIS IS A MOMENT OF TRUTH FOR HIM TO NAVIGATE THROUGH THE STORM. > > HE HAS BEEN A VILLAIN BEFORE. THERE WAS A TIME WHEN HE PRETENDED HE WAS GOING TO TAKE OVER TESLA. HE GOT IN DEEP TROUBLE WITH THE SEC AND HE KEPT EGGING THEM ON. NEVERTHELESS HE CAME BACK AND PEOPLE SEEMED TO FORGIVE HIM FOR THAT. IS THIS WORSE? HAS HE GONE OFF THE RAILS? > > FOR SOMEONE WHO IS VIEWED AS A MODERN-DAY ALBERT EINSTEIN, IT'S A THOMAS HUGHES MOMENT. DOES HE START THE FOCUS BACK MORE ON TESLA AWAY FROM TWITTER? THAT HAS BEEN IT. IT'S A BRAND ISSUE, IT HAS BEEN LIKE -- IT HAS BEEN A BLACK EYE FOR ELON MUSK AND TESLA. THEY JUST CAN'T KEEP HAVING ELON MUSK BECAUSE EVERY TIME HE TWEETS SOMETHING, THE CONTROVERSY HAS CREATED A BLACK CLOUD FOR TESLA THAT'S WHY I THINK THIS IS DIFFERENT BECAUSE ULTIMATELY WHEN YOU'RE AT THE PERCH, IT'S DIFFERENT THAN BEING AT $2 BILLION. > > TWEETS ARE MORE EDISON THAN EINSTEIN. WHAT STOCK, WHICH OF THESE HIGH FLYERS THAT HAVE COME DOWN SO MUCH DO YOU LIKE BEST? WHEN YOU LOOK ACROSS APPLE FOR EXAMPLE CAME DOWN TO THE LOWEST IT HAS BEEN SINCE SUMMER OF 2021. > > IF THERE IS ONE NAME THE TOPIC, IT'S APPLE. SUPPLY ISSUES IN CHINA. THIS COULD BE A $200 STOCK. IT'S ULTIMATELY THE FUNDAMENTALS THAT CONTINUE TO BE ROCK SOLID. THE NEW YORK CITY CABDRIVER'S BEARISH CONTACT 2023. APPLE IN MY OPINION IS THE BEST WAY TO PLAY. CAROL: THAT WAS DAN IVES WITH OUR OWN MATT MILLER EARLIER. IT HAS BEEN A DISMAL YEAR FOR TESLA AND CATHIE WOOD. SHE HAS BEEN A LONG-TERM INVESTOR AND SUPPORTER OF ELON MUSK. ARK INVESTMENTS, 2023 DOES NOT LOOK SO GOOD. OUR GUEST JOINS US WITH A LOOK FORWARD. IT WAS A TOUGH YEAR FOR ART OVERALL AND CATHIE WOOD. LOOK BACKWARD AND FORWARD. IT SOUNDS LIKE IT COULD POTENTIALLY CONTINUE. GUEST: IT'S NO SURPRISE THAT THE HIGHER INTEREST RATE ENVIRONMENT HURT CATHIE WOOD THIS YEAR. WHEN WE LOOK AT THE EARNINGS OUTLOOK FOR SOME OF THE TOP HOLDINGS IN ARKK HER FLAGSHIP FUND, ANALYSTS HAVE BEEN CUTTING THEIR FORECAST FOR THE STOCKS SINCE THE BEGINNING OF DECEMBER. THEY TRIMMED THEIR ESTIMATES FOR ZOOM BUT ALSO TESLA, ROKU, SHOPIFY. SOME OF THE LARGEST WEIGHTINGS IN THIS FUND, THEY DON'T LOOK LIKE THEY'RE GOING TO BE ABLE TO POST GREAT EARNINGS NEXT YEAR AND WE KNOW THE EARNINGS PUSH STOCK PRICES. TIM: A LOT OF THE COMPANIES THAT SHE HAS IN THIS ETF DON'T HAVE EARNINGS YET. THEY ARE MOONSHOT PRODUCTS. WHAT IS THE BULL CASE HERE? GUEST: THE BULL CASE FOR ARKK IS THERE A LOT OF INVESTORS WHO WANT A SLICE OF EXPOSURE TO THE THEME OF DISRUPTIVE INNOVATION. THAT IS CREATED INFLOWS THROUGHOUT ALL OF 2022 EVEN AS THE FUND HAS CONTINUED TO TUMBLE. IT IS STILL ABLE TO PULL IN POSITIVE INFLOWS. IT MIGHT NOT BE ABLE TO LIFT THE FUND INTO POSITIVE TERRITORY MOST OF THE INVESTORS THAT HAVE STARTED INVESTING IN THE FUND IN THE LAST FIVE YEARS ARE STILL SITTING AT A LOSS, BUT FOR THE ETF, THERE IS STILL SOME INVESTORS SUPPORT TO MAYBE ALLOCATE JUST A LITTLE BIT OF THEIR PORTFOLIO TO THIS SUPER SPECULATIVE MARKET. ROMAINE: WE SHOULD POINT OUT THAT THERE HAVE BEEN NET INFLOWS INTO THE MARKET DESPITE THE DOWNDRAFT. ONE ISSUE THAT HAS BEEN RAISED WAS THAT WHEN THIS FIRST BECAME POPULAR, THIS FAMILY OF ETF'S, THERE WASN'T A WHOLE LOT OF OTHER PLACES WHERE YOU COULD GET A BASKET OF THESE MOON SHOTS. THE IDEA WAS THAT IF YOU WANTED TO RIDE THE WAVE, IT WAS WITH CATHIE WOOD AND HER FUNDS. THERE HAVE BEEN A LOT OF OTHER COMPETITORS THAT HAVE COME OUT TO REPLICATE WHAT SHE HAS DONE. AS WELL AS OTHER VEHICLES THAT ARE EITHER SINGLE STOCK TRADES OR ANOTHER QUITE BROAD BASKET TO OFFER INVESTORS AWAY. HOW MUCH IS THAT A FACTOR IN WHETHER WE SEE A REBOUND? GUEST: ONE OF THE FUNDS -- ONE OF THE FIRMS THIS YEAR THAT LAUNCHED A DISRUPTIVE INNOVATION FUND, THERE'S A LOT OF ACTIVE MANAGERS CONTINUING TO MOVE INTO THE ETF SPACE SO I DON'T THINK WE HAVE SEEN THE END OF NEW FUND LUNCHES AND PEOPLE TRYING TO MIMIC THE CATHIE WOOD STYLE. SHE DOES HAVE A PRETTY BIG FAN FOLLOWING ON TWITTER. THAT COULD PROVIDE SUPPORT FOR THE FUND ITSELF. IF YOU LOOK AT THE TOP 20 ETF ISSUERS IN THE MARKET, ARK USED TO BE IN THE TOP 20. SHE FELL OUT OF THE TOP 20 THIS YEAR AS OTHER ACTIVE MANAGERS HAVE BEEN GROWING MORE. CAROL:CAROL: WHAT'S INTERESTING ABOUT CATHIE WOOD AND WE WERE TALKING ABOUT THIS BEFORE WE GOT GOING, WE TALK ABOUT HER A LOT AT BLOOMBERG, WE HAVE TALKED TO HER DIRECTLY. SHE DOES MAKE LONG-TERM BETS AND SHE STICKS TO HER BETS WHEN IT COMES TO INNOVATION DISRUPTION. YEARS AGO SHE WAS PUSHING ELON MUSK AND TESLA. SHE IS GOING TO HAVE HITS AND MISSES AND WE ARE SEEING A COUPLE OF YEARS THAT HAVE BEEN DARK AND DRAMATIC. ROMAINE: IT'S ONE THING TO SAY WE ARE COMMITTED TO THIS, BUT MONEY MANAGERS HAVE TO BE COGNIZANT THAT TIMES CHANGE. SOMETIMES YOU HAVE TO PIVOT. HOW MANY TIMES HAVE WE HAD DISCUSSIONS OVER THE COURSE OF YEARS AND NEGATES THAT WE HAVE BEEN COVERING THIS WERE YOU HAD ONE INVESTOR WITH A HOT HAND FOR A FEW YEARS THEN TO DISAPPEAR. THAT'S NOT TO SAY THAT CATHIE WOOD IS GOING AWAY, BUT WE GO THROUGH THIS. TIM: ONLY TWO PEOPLE HAVE NOT BEEN THAT. WARREN BUFFETT AND PETER LYNCH. THE FIVE-YEAR TIME HORIZON, IF YOU WERE TO GO BACK IN FIVE YEARS AND INVEST IN THE ARK INNOVATION ETF, YOU WOULD BE DOWN 15%. CAROL: THE PROBLEM IS, WHAT IS THE TIMEFRAME? ROMAINE: WE GO BACK TO THIS IDEA OF A LOT OF THESE COMPANIES ARE NOT THE ONLY GAMES IN TOWN. ZOOM, TESLA. THERE'S A LOT MORE COMPETITION OUT THERE. THAT'S NOT TO SAY THAT CATHIE WOOD DOESN'T INVEST IN THOSE COMPANIES, BUT THERE ARE A LOT OF OPTIONS. A LOT MORE TO COVER HERE ON THE FINAL TRADING DAY OF THE YEAR. ROMAINE: U.S. EQUITIES POSTING THEIR BEST QUARTER OF THE YEAR. THE YEAR IS GOING TO END UP BEING THEIR WORST GOING BACK TO 2008. FRACTIONAL LOSSES ACROSS THE BOARD. THE DOW JONES, S & P, AND NASDAQ COMPOSITE ALL LOWER YEAR-TO-DATE. THE OUTPERFORMER WAS THE DOW JONES WHICH IS GOING TO FINISH DOWN ABOUT 9% FOR THE YEAR. WE TALK ABOUT THE S & P DOWN ABOUT 19.5%. THE RUSSELL 2000 NOT FARING MUCH BETTER. A LOT OF INVESTORS GOT SPOOKED SOMEWHERE AROUND THE MIDDLE OF THE YEAR WHEN THEY REALIZED JAY POWELL -- CAROL: LOOK AT THOSE NUMBERS DOWN 33% -- DOWN 33,000 -- 33% ON THE NASDAQ. ROMAINE: TARGET -- THEIR TARGET FOR THE S & P WAS 5000. THEN IT CAME DOWN TO 4400 THEN EVENTUALLY EVERYONE FOUND RELIGION AND IT'S PRETTY MUCH OK. LOOK AHEAD TO 2023, NOT A LOT OF PEOPLE ARE SEEING MEANINGFUL GAINS. ROMAINE: RIGHT NOW THE AVERAGE PRICE TARGET IS A SMIDGE ABOVE 4000. CAROL: THE NUMBER ONE GAINER IN THE NASDAQ AND S & P FOR 2022 WERE BOTH ENERGY NAMES. OCCIDENTAL PETROLEUM AND CONSTELLATION ENERGY. THE BOTTOM OF THE PACK, RIVIAN DOWN 82%. ROMAINE: TALK ABOUT THE S & P INDEX LOWER. I WAS LOOKING INTO VALUATION LEVELS IF THERE WAS A TREND. THERE WAS A DEFENSIVE NATURE TO ENERGY. A LOT OF WHAT GOT SOLD AND THE STUFF THAT GOT BOUGHT SEEMED MORE IDIOSYNCRATIC. YOU WONDER IF THAT BECOMES THE STORY FOR 2023 OR IF IT STAYS ALL THINGS MACRO ALL THINGS FED. CAROL: ABIGAIL DOOLITTLE IS IN AND OUT OF THE MARKETS FOR US. WE ARE DONE. WHAT'S TOP OF MIND FOR YOU? > > WE'VE BEEN TALKING ABOUT THIS ALL WEEK, SANTA IS BACK IN TOWN. CAROL: HE LEFT HIS WALLET AT THE THEATER, CAME BACK. > > OVER THE LAST FIVE DAYS, WE HAVE STOCKS UP ABOUT .5%. IT IS SILLY ON THE ONE HAND, BUT PREDICTABLY THE NEXT YEAR IS MORE LIKELY TO BE AN UP YEAR. WHEN IT DOESN'T HAPPEN, IT'S MORE LIKELY TO BE A DOWN YEAR. I WOULD SAY THE BIGGEST THEME -- ROMAINE: WE HAVEN'T HAD TWO CONSECUTIVE YEARS OF THIS MAGNITUDE IS THAT THE IDEA? > > SINCE THE GREAT DEPRESSION. ROMAINE: GOLDMAN SACHS PUT OUT A NOTE THREE OR FOUR WEEKS AGO. THEY WERE TALKING ABOUT THIS IDEA THAT THE BEAR MARKET IS AND OVER BECAUSE IT DIDN'T HIT THOSE HISTORIC TECHNICAL LEVELS. THE IDEA, THERE STILL HAS TO BE MORE DOWNSIDE. > > IT'S DANGEROUS TO USE ANY KIND OF MUST ALWAYS OR NEVER. THIS YEAR HAS REMINDED ME OF 2000 AND 2003. A TIME WHEN WE HAD A BIG ANNUAL KLEIN. THERE WAS NEVER A RECESSION, IT WAS A LIQUIDITY BUBBLE POPPING. YOU COULD READ THAT CASE HERETO COMING OUT OF THE PANDEMIC. TIM: I WAS JUST THINKING ABOUT THE DIFFERENCE BETWEEN 2000 AND 2003. THE TIDE WENT OUT AND WE SAW WHO WAS EXPOSED AND WHO WASN'T. WE'RE NOT REALLY SEEING THOSE UNDERLYING ISSUES. THAT IS LIMITED TO CRYPTO. > > THIS HAS BEEN OUT OF THE PANDEMIC. TIM: THE CONTAGION WASN'T THERE WITH THESE THINGS. > > NEITHER ARE MAJOR ASSET CLASSES. IT'S NOT LIKE THE HOUSING OR TECH BUBBLE. LAST YEAR THE LAST TIME WE HAD TREASURY NOTES DOWN AS MUCH IS THIS YEAR WAS 1999 AND THAT'S BECAUSE THERE WAS NO DEMAND FOR BONDS BECAUSE EVERYONE WANTED TO BE IN STOCKS. WE HAVE BEEN FORTUNATE IN THE FACT THAT THERE HAS NOT BEEN ANY CONTAGION THIS YEAR. I DON'T THINK THAT THAT LESSONS. CAROL: I WOULD ARGUE THERE HAVE BEEN SAFEGUARDS IN PLACE. ESPECIALLY WHEN IT COMES TO THE BIG BANKS AND FINANCIAL COMMUNITY SO IT DOESN'T HAPPEN AGAIN. > > TO YOUR POINT, IT'S INTERESTING BECAUSE WE WERE TALKING ABOUT THESE THINGS WE HAVE MISSED ALL YEAR LONG IN TERMS OF THE WINNERS. THE VOLATILITY IS NOT THE WORST EVER HEARD. WE DO HAVE THE GFCI IN MIND AND WHAT COULD THAT MEAN OR THE POPPING OF THE TECH BUBBLE. IT IS AN INTERESTING TIME. THE ONE THING THAT IS REALLY INTERESTING TO ME AND WE TALKED ABOUT IT A FEW TIMES ON RADIO IS HOUSING. WHERE IS THE CONTAGION FROM THAT? DURING THE GREAT GLOBAL FINANCIAL CRISIS IT HAD EVERYTHING TO DO WITH THE CDS GOING OUT TO ALL THE BANKS AND BANKRUPTING DIFFERENT ENTITIES BUT AT SOME POINT YOU WOULD THINK THIS IS ONE OF THE BIGGEST ASSET CLASSES. FOR MOST PEOPLE, THEIR HOME MR. BIGGEST SOURCE OF WEALTH. WHERE IS -- CAROL: MOVING AND BUYING ALL NEW STUFF. TIM: THE MORTGAGE EXPOSURE THE PEOPLE HAD BACK IN THE GFCI. > > TO SOME EXTENT THE HOUSING MARKET IS GRIDLOCKED. IN TERMS OF BACK THEN, THERE WAS A LOT OF DEFAULT HAPPENING. THERE WAS ALL THAT TURNOVER WHEREAS NOW PEOPLE ARE STUCK AND STAYING IN PLACE. CAROL: THANK YOU SO MUCH, HAPPY NEW YEAR. TIM: LET'S BRING IN THE CO-CEO AND FOUNDER OF IE CUTE CAPITAL. -- IEQ CAPITAL. 2022 FOR MANY INVESTORS WAS ABSOLUTELY BRUTAL. WHERE ARE YOU SEEING OPPORTUNITIES AND DEPLOYING NEW CASH FOR NEXT YEAR? GUEST: THANK YOU FOR HAVING ME. I AM IN THE CAMP THAT IN THE SHORT-TERM, THIS WIDELY FORECASTED RECESSION IS SLOWLY ROLLING INTO PLACE AND IT MEANS YOU NEED TO PUT OUT SHORT-TERM CAUTIOUS APPROACH FOR RISK ASSETS BUT AS ALWAYS, CRISIS IS GOING TO BE FOR ANYONE WITH A LONGER-TERM INVESTMENT HORIZON, YOU SHOULD BE SLOWLY METHODICALLY BUYING INTO THE WEAKNESS BECAUSE INEVITABLY, THE ECONOMY WILL BOTTOM, THE FED WILL PAY BIT AND PEOPLE WILL LOOK FOR MUCH BETTER GROWTH IN 2024 AND WE WILL BE OFF TO THE RACES AGAIN. TO WHAT ABIGAIL SAID A MOMENT AGO, DURING THE GREAT FINANCIAL CRISIS PEOPLE HAD NEGATIVE EQUITY IN THEIR HOMES SO THEY COULDN'T MOVE. NOW THIS TIME WE HAVE 7% MORTGAGE RATES. HIGH COST OF AFFORDABILITY SO NOBODY CAN MOVE. THE EFFECT IS THERE IS LESS ACTIVITY AROUND NEW-HOME PURCHASES MEANING THERE'S LESS LANDSCAPING, PAINTINGS, HOME FURNISHINGS. THAT IS A SLOW TRICKLE DOWN EFFECT INTO NEW ORDER ACTIVITY. IT SLOWS ECONOMIC GROWTH WHICH LEADS TO LOWER PROFITS WHICH LEADS TO HIGHER UNEMPLOYMENT WHICH LEADS TO INEVITABLY LOWERING RATES. WE ARE IN THE CYCLE AND THE BENEFIT IS EVERYONE HAS BEEN FORECASTING THE RECESSION SINCE THE FIRST RATE HIKE. PEOPLE ARE POSITIONED FOR THE INEVITABILITY OF THE RECESSION. IT'S DEALING WITH IT AS IT COMES. ROMAINE: LOOKING FOR OPPORTUNITIES. DOES IT JUST BECOME SORT OF LOOK TO MOST BEATEN-DOWN SECTORS? OR ARE THERE STRUCTURAL SHIFTS THAT TOOK SHOULD BE LOOKING TO THAT WILL SUGGEST IT'S GOING TO BE DIFFERENT INDUSTRIES LEADING THE CHARGE? GUEST: THIS YEAR TAUGHT US THAT TECH IS NOT A GOOD LONG-TERM STRATEGY. IN THE SHORT RUN, WHAT WE'RE GOING TO FIND IS TYPICAL SAFETY STOCKS LIKE HEALTH CARE, UTILITY, CONSUMER STAPLES THEY WILL OUTPERFORM MORE AGGRESSIVE STOCKS. IF YOU'RE LOOKING FOR GREATER OUTSIZED RETURNS, ULTIMATELY AS THE ECONOMY SLOWS AS VALUATIONS DROP MORE, YOU WILL BEGIN TO TILT TO MORE AGGRESSIVE TO SECTORS, BIOTECH, TECH. BUSINESSES THAT DON'T GENERATE CASH FLOW WILL BE SQUEEZED IN AN ECONOMIC DOWNTURN, BUT ONCE IT TILTS, DOLLARS WILL FLOW INTO THE MORE AGGRESSIVE ASSETS AND THEY WILL RECOVER MORE QUICKLY ON THE UPSWING. IT'S A QUESTION OF HOW BAD DOES THE SLOWDOWN GET? IT'S A FUNCTION OF HOW ME RATE HIKES WE GET, WHAT OTHER EFFECTS LIKE HOW QUICKLY CAN CHINA COME BACK INTO THE GLOBAL ECONOMY AS IT GETS AWAY FROM COVID LOCKDOWNS. THERE ARE TOO MANY VALUABLES TO BE HIGHLY PREDICTIVE. THE RATE HIKES ARE GOING TO SLOW DOWN ECONOMIC GROWTH. THERE'S GOING TO BE GREATER OPPORTUNITIES TO BUY ASSETS AS PRICES FALL BUT PREDICTING THE SPEC -- SPECIFICITY IS HARD TO DO. CAROL: A REMINDER WE JUST WRAPPED UP THE LAST TRADING DAY OF 2022. THE INDICES POSTING THEIR BIGGEST ANNUAL DECLINE SINCE 2008. IT HAS BEEN THE BEST YEAR ON RECORD FOR ENERGY NAMES IN PARTICULAR. HAVING SAID THAT, WHEN YOU LOOK AT 2023 YOUR HIGHEST CONVICTION PLAY. IS THERE ONE YOU CAN SAY IS GOING TO BE A SURE THING AND MAYBE DOES IT NECESSARILY CANNOT NEXT YEAR BUT IN THE LONGER TERM? ARE WE GOING TO LOOK BACK AND SAY THIS WAS A GREAT BUYING OPPORTUNITY ON THE EQUITY SIDE OF THINGS? GUEST: I THINK YOU WILL REALIZE IT'S A GREAT BUYING EQUITY OPPORTUNITY IF YOU LOOK AT THE FIRST THREE TO SIX MONTH OF NEXT YEAR. IN THE NEAR TERM, REAL ESTATE IS AN EXAMPLE OF A DURABLE ASSET CLASS. INFLATION RESISTANT. THE NET OPERATING INCOME GROWTH THAT SELECTED REITS IN THE APARTMENT AND SELF SICK -- SELF STORAGE SECTOR, THOSE ARE DURABLE NET INCOME GROWTH RATES THAT WILL MORE THAN OFFSET VALUATIONS THE DROP. MANY ARE TRADING AT MATERIAL DISCOUNTS. CAROL: BUT DOWN 25% AS A GROUP OVERALL. TIM: GOING BACK TO YOUR COMMENT EARLIER ABOUT BOTTOMING THE FIRST HALF OF THIS NEXT YEAR, HOW WILL YOU KNOW WHEN THAT HAPPENS AND HOW WE YOU KNOW THAT THE S & P 500 HASN'T PRICE THAT AN ALREADY? GUEST: YOU REALLY DON'T. YOU CAN DO IS LOOK AT HISTORICAL PRECEDENTS LIKE WHAT REMAIN CITED. WHEN COVID HIT, THE BOTTOM WAS AT 33%. YOU CAN TRY TO USE VALUATION ESTIMATES. IF YOU THINK WE'RE GOING TO HAVE A SHALLOW RECESSION, THERE MIGHT BE NO EARNINGS GROWTH NEXT YEAR IN WHICH CASE THE MARKET IS ONLY TRADING AT 17 TIMES EARNINGS. IF YOU THINK WE ARE GOING TO ENTER A RECEPTION OF -- RECESSION OF SOME DEPTH, THE S & P WILL EARN ABOUT $200 PER SHARE AND YOU CAN PUT 16 MULTIPLE ON THAT. MY GUIDANCE TO PEOPLE IS SLOWLY METHODICALLY DOLLAR COST AVERAGE DOWN IN SMALL INCREMENTS OF THINGS THAT HAVE A LONG HORIZON TO BUY AND DON'T TRY TO PERFECTLY TIME THE BOTTOM. TECHNICALLY STOCKS BOTTOM WELL BEFORE THE ECONOMY DOES. OTHER THAN THE MOMENT THE FED ACTUALLY LOWERS THE RATES. ROMAINE: WE NEED TO LEAVE IT THERE. WE WILL CATCH UP WITH YOU IN 2023. STILL A LOT MORE TO COVER INCLUDING THE WILD YEAR IN THE FX MARKET. ROMAINE: THIS SHAPED UP TO BE A WILD YEAR. PARTICULARLY WITH REGARD TO THE RELENTLESS DOLLAR STRENGTH THAT WE SAW FOR THE FIRST NINE MONTHS OF THE YEAR. THAT PEELED BACK SIGNIFICANTLY AND THE DOLLAR MEASURED BY THE BLOOMBERG DOLLAR SPOT INDEX DOWN 7% IN THE QUARTER. A LOT OF QUESTIONS GOING FORWARD AS TO WHAT 2023 HOLDS. VINCENT CIGNARELLA JOINS US NOW. DOLLAR WEAKNESS SEEMS TO BE THE STORY RIGHT NOW IS THAT THE SAME FOR 2023? > > I THINK SO. YOUR PREVIOUS GUEST HIT A LOT OF HIGHLIGHTS THAT ARE OF MY OPINION AS WELL. RECESSION IS INEVITABLE. WE HAVE SEEN THE HOUSING MARKET REACT TO FED RATES. I THINK WE ARE GOING TO SEE THE REST OF THE ECONOMY REACT NEXT YEAR. WAGE GROWTH IS NOT KEEPING PACE WITH INFLATION. THAT NEEDS TO COME BACK INTO BALANCE AND UNTIL THAT DOES COME THE GROWTH CYCLE IS GOING TO CONTINUE TO GO LOWER. WE WILL SEE STOCKS A LITTLE BIT UNDER PRESSURE. I DON'T SEE THE DEPTH OF THE FALL IN THE FIRST QUARTER AS DEEP AS A LOT OF PEOPLE DO. THE FED IS CLOSER TO PIVOT AND PAUSE THEN WE THINK. THEY WILL PROBABLY GO 25 BASIS POINTS IN FEBRUARY. MORE FOR COVERING THEIR EGO THAN THE ECONOMY REALLY NEEDS. I THINK THAT'S GOING TO BE THE END AND IF YOU LOOK AT THE DOLLAR AND THE S & P 500, THEY HAVE BEEN AN INVERSE CORRELATION SINCE AUGUST. AT THE DOLLAR HAS GONE DOWN, WE HAVE SEEN SOME PAIRING OF DOLLARS AND EQUITIES. MY TWO FAVORITE CURRENCIES ARE GOING TO BE THE CANADIAN DOLLAR AND THE JAPANESE YEN. IN THE TWO-YEAR SOVEREIGN SPREADS WHEN THEY NARROW IT FAVORS BOTH THE CANADIAN DOLLAR THE JAPANESE YEN CONSIDERABLY. IT'S LIKE A PUPPY FOLLOWING ITS MASTER. WHEN THE YIELD SPREADS NARROW, THE FOREIGN CURRENCY STRENGTHEN. CAROL: WHAT COULD CHANGE OF THINKING THAT THIS POINT? GUEST: ANYTHING LACKS ONE OF SORTS. CHINA COMES BACK FROM THE NEW YEAR CELEBRATIONS AND THE COVID VIRUS SPREADS LIKE WILDFIRE AND THEY HAVE TO SHUT DOWN AGAIN OR THEY ARE NOT ABLE TO PRODUCE GOODS THE PEOPLE NEED. WE GET BACK INTO THE SUPPLY CHAIN BOTTLENECK. THEN THE FED WILL MAYBE HAVE TO STAY ITS COURSE BUT I THINK THE FED IS WALKING A DIFFICULT BALANCE BECAUSE IF THAT SCENARIO PLAYS OUT, IT'S GOING TO BE IMPOSSIBLE TO NOT HAVE STAGFLATION. THAT IS A SCENARIO THAT ONLY PAUL VOLCKER WAS ABLE TO DEAL WITH AND I DON'T THINK THIS FED IS ABLE TO DEAL WITH IT. TIM: GOING BACK TO WHAT YOU SAID ABOUT THE FED PIVOTING IN THE NEXT YEAR. ONLY RAISING RATES BY 25 BASIS POINTS AT ITS NEXT MEETING WHICH IS IN FEBRUARY, THE BIGGER QUESTION HAS TO DO WITH HOW LONG IT HOLDS RATES FOR THEY ARE. AFTER THE NEXT WHEN BASIS POINT INCREASE. HOW LONG IS THAT GOING TO BE AND WHAT BRINGS ON SOME SORT OF CUT IF ANYTHING? > > THAT'S A GOOD POINT. THE FED THINKS THEY'RE GOING TO KEEP IT THERE FOR THE BALANCE OF 2023. FEBRUARY WILL BE THE 100TH CHANGE SINCE 1990. IF YOU LOOK AT THE PATTERN OF FED RATE CHANGES, YOU WILL SEE THIS DRASTIC MOVE ONE WAY THEN DRASTIC BACK THE OTHER WAY BECAUSE FRANKLY THE FORECASTS ARE NOT VERY GOOD. I WOULD BE WILLING TO BET THIS FORECAST IS NO BETTER THAN THE ONES OF THE PAST. WHEN THE ECONOMY ROLLS OVER, THEY WILL HAVE TO ROLLOVER INTEREST RATES QUICKER. ROMAINE: I AM CURIOUS ABOUT YOUR THOUGHTS ON VOLATILITY. WE TALK ABOUT THE STRENGTHENING OF THE DOLLAR, THE WEAKENING OF THE OTHER CURRENCIES. NOT JUST THE FOLKS IN THE FX MARKETS, BUT SOME IN THE BOND AND EQUITY MARKETS HAD TO TETHER THEMSELVES TO A CERTAIN EXTENT TO THE VOLATILITY. WE GET A REPEAT OF THAT NEXT YEAR? > > YES IT'S GOING TO BE THERE THE VOLATILITY FOR THE FIRST THREE OR SIX MONTHS. RIGHT NOW THE TREND IS ON THE DOWNSIDE, BUT IT'S REALLY CHOPPY. THERE IS STILL A BATTLE BETWEEN BUYERS AND SELLERS. I THINK IT NEEDS TO BE MORE CONVINCING. ROMAINE: EARLIER YOU MENTIONED YOUR KEEPING AN EYE ON THE YEN AS WELL AS THE CANADIAN DOLLAR. I'M CURIOUS ABOUT YOUR THOUGHTS ON THE EM CURRENCIES. A LOT OF PEOPLE ARE BETTING ON THE IDEA THAT WE COULD SEE SUSTAINED REBOUNDS IN THOSE PAIRS IN 2023. > > IF YOU SEE GLOBAL ECONOMIES REBOUND, A LOT OF THE EM CURRENCIES ARE EXPORTING ECONOMIES. YOU COULD SEE EM OUTPERFORM EUROPE AND POTENTIALLY SOME PARTS OF ASIA. I THINK THE EUROPEAN SITUATION, YOU STILL HAVE THE UKRAINIAN PROBLEM, ISSUES WITH HIGHLY IMPORTED INFLATION IN THE U.K.. I WOULD NOT BET ON THE EURO OR THE POUND. ROMAINE: WHAT IS CRYPTO GOING TO DO? > > I THINK CRYPTO IT CERTAINLY NOT MY WHEELHOUSE BUT IT SEEMS TO BE HERE TO STAY. ENOUGH MAJOR INVESTORS HAVE POUND MONEY INTO IT, I THINK PEOPLE WILL CONTINUE TO PUT MONEY INTO IT. ANY KIND OF REBOUND IS GOING TO ENCOURAGE MORE INVESTMENT. I WOULD BE LOOKING AT THE LARGER COINS, ETHEREUM AND BITCOIN. I WOULDN'T GOOD TOO FAR DOWN THE LADDER OF THE MINOR ONES. ROMAINE: YOU HAVE TO GO DOWN THE LADDER. [LAUGHTER] TIM: WE HAVE DOGECOIN PRICES ON THE TERMINAL. ROMAINE: YOU ARE TELLING ME I SHOULDN'T HAVE BOUGHT THE OLD AND RETRIEVER COIN. [LAUGHTER] CAROL: I ASKED EARLIER WHAT ASSET CLASS EACH OF US ARE WATCHING FOR 2023. WHAT IS IT FOR YOU? CURRENCIES? > > IT'S PROBABLY GOING TO BE FIXED INCOME MARKET. WHEN YOU LOOK AT THE YIELD CURVE AND THE INVERSION, IT'S NOT INVERTED BECAUSE THEY THINK THERE'S GOING TO BE A MAJOR RECESSION ALTHOUGH THEY DO THINK THERE’'S A RECESSION COMING. IT'S INVERTED BECAUSE THEY DON'T THINK THE FED IS GOING TO STAY THE COURSE AS LONG AS THEY SAY THEY'RE GOING TO. THE INVERSION IS BASICALLY THE FIXED INCOME MARKET SAYING YES FED WE KNOW YOU'RE THERE YOU HAVE TO KEEP TWO-YEAR YIELDS CLOSELY MATCHED BUT WE ARE NOT BUYING THE STORY YOU'RE GOING TO HOLD IT FOR A LONG TIME. WHEN THE FED PAUSES, THE RALLY IN THE TWO-YEAR IS GOING TO BE FANTASTIC. THE YIELD CURVES ON THE BACKEND ARE PRICED ALREADY. THE MISPRICED PART IF THE FED STARTS TO ROLLOVER IS IN THE FRONT AND INTO PERCENT. -- IN THE TWOS. THE NARROWING WILL TAKE US BACK INTO POSITIVE TERRITORY MOST OF THE GAINS WILL COME IN THE FRONT END. CAROL: WILL WE SEE A CORRELATION AND STOCK MOVEMENTS AND BOND MOVEMENTS IN TERMS OF PRICING? > > ABSOLUTELY. TIM: JUMPING AROUND BECAUSE WE HAVE YOU AND YOU COVER EVERYTHING. YOU TOLD ME A FEW WEEKS AGO THAT THE U.S. CONSUMER IS SOMETHING TO WATCH. USED THE TERM THE CONSUMER HERE IS TAPPED OUT. WHAT DID YOU SEE FROM HOLIDAY SALES AND WHAT CAN YOU TELL US ABOUT THE CONSUMER IN THE EARLY PART OF 2023? > > THE LAST RETAIL SALES NUMBERS WERE NOT THAT GOOD. I WOULD NOT PUT THAT MUCH WEIGHT ON THE DECEMBER NUMBERS. I WOULD LOOK AT RETAIL SALES AND WAGES FOR JANUARY AND FEBRUARY. I WOULD LOOK AT SAVINGS VERSUS DISPOSABLE INCOME BECAUSE THAT HAS BEEN DECLINING. IF THAT CONTINUES, REVOLVING CREDIT IS TOO HIGH. CAROL: ARE THERE LITTLE ARMS ATTACHED TO THAT CHAIR THAT GIVE YOU A BIG HUG? > > THERE ARE ARMS, I AM LEANING ON THE. BUT IT IS A PROPER GAMERS CHAIR. IF I WANTED TO LEAN BACK, I COULD BUT I DON'T. CAROL: WE LOVE YOU SO MUCH, HAPPY NEW YEAR. ROMAINE: COMING UP NEXT, FITNESS. A LOT OF PEOPLE MAKE THEIR NEW YEAR'S RESOLUTIONS. WE WILL TALK TO THE CEO OF ORANGE THEORY FITNESS. TIM: ROMAINE: WE MADE IT ALMOST TO A HALF HOURS AND HAVE NOT TALKED ABOUT SOUTHWEST AIRLINES. ONE OF THE REASONS WE HAVE NOT BEEN TALKING ABOUT IT TODAY IS BECAUSE THE COMPANY IS GETTING BACK TO NORMAL WITH ITS FLIGHTS. GIVE US AN UPDATE. WE LEARNED YESTERDAY THERE WERE PLANNING FOR A NORMAL FRIDAY. > > A NORMAL FRIDAY IS EXACTLY WHAT THEY HAD. MORE THAN 15,700 FLIGHTS CANCELED OVER THE COURSE OF THE WEEK. THE CEO SAID ALL ASPECTS OF THE AIRLINE'S OPERATIONS ARE GOING TO BE EXAMINED. THE COMPANY IS SPURRING NOTHING IN ITS OPERATIONS REVIEW FOLLOWING THE POST-CHRISTMAS MELTDOWN. HE CONFIRMED HE WILL SCRUTINIZE THE NETWORK INCLUDING THE POINT-TO-POINT SYSTEM WE HAVE BEEN TALKING ABOUT. HE CLARIFIED IT WILL LIKELY STAY IN PLACE. THE REAL ISSUE IS THE TECHNOLOGY. CAROL: THERE IS OBVIOUSLY THE BUSINESS STORY, WHAT HAPPENED WITH THE COMPANY LOGISTICALLY. AND THERE IS THE STOCK UNDER PRESSURE. > > DOWN 11% THEN GETTING A LITTLE BIT OF CORRECTION THERE. NOBODY'S HAVING A GREAT DAY IN THE MARKETS TODAY. I THINK SOUTHWEST IS HOPING TO MAINTAIN THAT GREAT SHAPE THAT ANALYSTS LOVE GOING INTO 2023. THEY WILL OFFER A LOT OF DISCOUNTS TO TRAVELERS. ROMAINE: JETBLUE WARNED THAT SOME OF THE TRENDS THEY SAW WERE NOT QUITE AS STRONG AS THEY HAD ANTICIPATED. I WONDER IF THE BLUE IS OFF THE ROSE. WE BASICALLY TAPPED OUT AND ARE WE GOING BACK TO THE OLD NORMAL? > > THE BIGGEST THING FOR 2023 WILL BE INTERNATIONAL TRAVEL. ESPECIALLY BECAUSE OF THE STRONG U.S. DOLLAR. THIS IS A GREAT TIME TO GO TO JAPAN. I THINK INTERNATIONAL WILL BE THE BIG THING. I DID A STORY IN THE FALL ABOUT MILLENNIALS WHO ARE TIRED OF TRAVELING BECAUSE ALL OF THEIR FRIENDS HAD WEDDINGS THAT WERE POSTPONED DURING COVID. I DO NOT WANT TO GET ON AN AIRPLANE FOR A LONG TIME. CAROL: I WAS LOOKING AT AN OPINION COLUMN THAT THIS COMPANY GOT AWAY FROM ITS CORE IN TERMS OF LISTENING TO EMPLOYEES. IF THEY HAD, THEY MIGHT HAVE FENDED OFF SOME OF THESE PROBLEMS. THEY ARE GOING TO TACKLE SOME OF THESE BUT YOU WONDER WHAT THE CULTURE IS AND JUST LISTENING TO THE PEOPLE WORKING AT THE COMPANY. > > IT SEEMS THERE IS STILL A LOT OF GOODWILL FOR SOUTHWEST AIRLINES. A LOT OF PEOPLE WHO HAD CANCELED FLIGHTS WERE REALLY UPSET. BUT I GOTTA LET IT OF PEOPLE WHO ARE SO DEFENSIVE OF THE STARLIGHT BECAUSE THEY ARE LIFELONG SOUTHWEST FANS. THEY LOVE THAT THEY GET TO PICK THEIR OWN SEATS. ROMAINE: IT WAS A CONVENIENT AIRLINE. IT WAS NOT JUST BECAUSE IT WAS CHEAPER. THE WHOLE PROCESS WAS EASIER THAN OTHER AIRLINES. THINGS HAVE CHANGED, LET'S JUST PUT IT THAT WAY. > > YOU ALL WILL HAVE YOUR FAVORITE AIRLINES. CRISIS MANAGERS SAID THAT AS LONG AS THE CEO CONTINUES TO TAKE FULL RESPONSIBILITY FOR THIS, SOUTHWEST COULD SEE RECOVERY HEADING INTO THE FIRST QUARTER OF 2023 EVEN. CAROL: THANK YOU SO MUCH FOR ALL OF YOUR COVERAGE OF THIS STORY. IT WAS AN IMPORTANT ONE THIS WEEK. OUR THANKS TO MADISON MILLS JOINING US HERE IN STUDIO. CAN WE TALK ABOUT GETTING IN SHAPE? GETTING IN SHAPE, MORE ACTIVE. IT IS CERTAINLY SOMETHING PEOPLE THINK ABOUT AT THE END OF THE YEAR. ONE COMPANY HOPING TO ATTRACT MORE CUSTOMERS ITS ORANGE THEORY . YOU SEE THEM AROUND THE COUNTRY. JOINING US NOW WITH WHAT IS GOING ON WITH THE FITNESS INDUSTRY IS THE CEO. IT IS GOOD TO HAVE YOU HERE. WE HAVE A LOT OF PEOPLE INCLUDING THOSE AROUND THIS TABLE PROBABLY THINKING ABOUT WHAT BETTER CAN I DO IN THE NEW YEAR FOR MYSELF? HOW BUSY ARE YOU? WHAT IS THE DEMAND? GIVE US SOME THOUGHTS ON THAT. > > IT IS GREAT TO BE ON. IT HAS BEEN A COUPLE OF YEARS SINCE WE HAVE BEEN THIS EXCITED ABOUT GOING INTO THE NEW YEAR. AS WE RAMP AND GO INTO JANUARY, EVERYTHING WE ARE HEARING FROM CURRENT AND FORMER MEMBERS SHOWED THAT 2023 WILL BE A BANNER YEAR AND PEOPLE ARE REALLY GETTING BACK INTO IN PERSON FITNESS. MANY PEOPLE ARE REALIZING IT IS A HUGE BENEFIT OVER -- OVER OTHER WAYS TO DO IT. TIM: WITH THE 1500 LOCATIONS YOU HAVE, YOU HAVE A HUNDRED NEW STUDIOS, YOU OPEN CLOSE TO ONE THIS YEAR. WHAT ARE YOU HEARING FROM FRANCHISES IN TERMS OF CHALLENGES THEY ARE FACING? ARE PEOPLE SAYING THIS IS DISCRETIONARY SPENDING? THIS IS GETTING EXPENSIVE FOR ME TO DO THIS? ARE YOU HEARING THAT? > > NOT NECESSARILY. IT IS INTERESTING WHEN A CONSUMER COMES TO THE REALIZATION THAT THEY NEED A SPECIFIC TYPE OF FITNESS AND WE PROVIDE SUCH A GREAT BENEFIT IN THE WAY WE DELIVER OUR PROGRAM THROUGH THE 6000 INDIVIDUAL COACHES. IF THEY ARE GOING TO SIGN UP FOR CLASSES AND COMMIT TO A MEMBERSHIP, IT IS A GREAT ACCOUNTABILITY MEASURE FOR THEM. WE WENT THROUGH SOME SMALL PRICE INCREASES. WE ARE SEEING MORE CUSTOMERS COMING BACK TO IN STUDIO AND A LOT NEW PEOPLE ENTERING THE MARKET WHO HAVE NEVER BEEN TO A GYM BEFORE. ROMAINE: SO PEOPLE WERE WILLING TO TAKE IT? > > THEY WERE. THE PEOPLE WHO ARE ENGAGED WITH THE BRAND AND WORKING OUT IN THE STUDIOS. ROMAINE: TALK TO US ABOUT STAFFING. THIS HAS BEEN A CHALLENGE FOR ANY BUSINESS, NOT JUST PHYSICAL FITNESS. IN ORDER TO DO THIS, THERE ARE STILL ACUMEN AND WOMEN TO THIS. I AM WONDERING WHAT TYPE OF CHALLENGES YOU HAVE HAD AND MAKING SURE ALL OF THESE LOCATIONS ARE STAFFED PROPERLY? > > WE CONTINUE TO REALLY MODERNIZE ALL OF THE SYSTEMS TO FOCUS ON HAVING FUN IN THE STUDIO AND ENGAGING. THE COMPETITION FOR LABOR IS REAL AND CONTINUING. WE HAVE 6000 COACHES IN THE WORLD. WE ARE CALLING NEXT YEAR THAT YEAR OF THE COACH. WE ARE REALLY ENHANCING ONBOARDING AND TRAINING MEDICAL CAN USE THROUGHOUT THEIR CAREER. -- THAT COACHES CAN USE THROUGHOUT THEIR CAREER. CAROL: WHENEVER PRODUCERS HAS SOME CUTE LITTLE QUESTIONS. SHE SAYS HOW MANY PEOPLE SIGN UP AND DO NOTHING? I DO WONDER HOW MANY PEOPLE HAVE GOOD INTENTIONS, THEY SIGN UP AND ULTIMATELY DO NOT SHOW UP. > > IT IS A GREAT QUESTION. IT IS THE CORNERSTONE OF HOW WE BUILT THIS BUSINESS ON A LOCAL STUDIO COMMUNITY. WE WORK WITH PEOPLE TO PRE-BOOK THEIR CLASSES. IF THEY MISS A CLASS, WE ENCOURAGE THEM TO COME IN. WE WANT OUR MEMBERS TO WORK OUT SADLY, AT LEAST TWICE A WEEK. BETH HAS BEEN VERY SUCCESSFUL FOR US. IF PEOPLE ARE NOT COMING REGULARLY, OBVIOUSLY THEY WILL NOT SEE THE VALUE IN IT. WHEN PEOPLE GET INTO THE HABIT, THEY STICK WITH US FOR A LONG PERIOD OF TIME. CAROL: WHAT IS YOUR DEMO IN TERMS OF WHO ACTUALLY SIGNS UP AND WORKS OUT YOU GUYS? HOW MANY KEEP GOING? > > ARE DEMO IS PRETTY BROAD. 20'S-40'S PROFESSIONAL, THEY WORK HEAVILY, WHAT WE SEE IS OUR TYPICAL MEMBER STAYS FOR AN AVERAGE ABOUT A YEAR. THEY MIGHT LEAVE FOR SIX MONTHS, BUT THEY END UP COMING BACK BECAUSE THEY REMEMBER THE TYPE OF RESULTS THEY GOT IN THE STUDIO. TIM: GIVE US AN IDEA OF YOUR BUSINESS. IT IS A PRIVATE COMPANY, BUT WHAT CAN YOU TELL US ABOUT REVENUE GROWTH AND WHAT THE END GAME LOOKS LIKE FOR YOU? DO YOU HAVE AN IPO ON THE HORIZON? > > WE DO NOT. WE ARE FOCUSED ON OUR MEMBERS AND SUPPORTING OUR FRANCHISEES. TIM: ARE YOU PROFITABLE? > > WE ARE. TIM: SO ARE YOU BACK TO PRE-COVID LEVELS? > > IN AGGREGATE, WE ARE VERY CLOSE. WHEN YOU ROLL IT ALL UP, WE ARE VERY CLOSE TO BEING BACK TO PRE-COVID LEVELS. 2020 WAS THE TOUGHEST YEAR. 2021 WE GOT A LOT OF GROWTH BACK. 2023 IS OUR YEAR TO ASK SEED -- TO EXCEED. CAROL: DO YOU HAVE ENOUGH MONEY IN TERMS OF ANY KIND OF EXPANSION PLANS OR INVESTMENTS YOU WANT TO MAKE GOING FORWARD? > > ARE GROWTH COMES FROM FRANCHISEES. IT IS A COMBINATION OF BUILDING ON THIS HUGE DOMESTIC BASE THAT WE HAVE. INTERNALLY, WE ARE STILL REINVESTING A LOT OF MONEY INTO OUR PROPRIETARY TECHNOLOGY PLATFORM, ALL THE SPECIAL THINGS WE DO TO CUSTOMIZE THE EXPERIENCE FOR OUR MEMBERS. IT IS FOCUSING ON IMPROVING THE EXPERIENCE FOR OUR MEMBERS. CAROL: THE PANDEMIC WAS INTERESTING FOR SPORTS. IT OPENED UP A WHOLE WIDE WORLD. THE PELOTON TOOK OFF IN NO -- A BIG WAY. HOW DO YOU THINK ABOUT FITNESS AND THE IMPACT OF THE PANDEMIC? WHAT STATE WITH YOU GUYS GOING FORWARD AS A RESULT OF IT? > > IT ACCELERATED ALL OF THE DIGITAL OFFERINGS. HOW DO YOU ROUND OUT YOUR WELLNESS WEEK? ABOVE ALL, WE WANT PEOPLE TO GET MOVING. GETTING IN THE STUDIO COUPLE TIMES A WEEK PROVIDES UNBELIEVABLE RESULTS. WE THINK THIS ADVANCEMENT OF THE HYBRID IN STUDIO AND OUT SHOULD BE BETTER FOR MORE PEOPLE GETTING FIT. WE KNOW OUR MEMBERS NEED TO COME INTO THE STUDIO A CERTAIN NUMBER OF TIMES TO REALLY HIT THOSE PEAK RESULTS. THEY FILL IN THOSE OTHER DAYS AS THEY NEED TO. CAROL: GREAT TO CHECK IN WITH YOU. HAPPY NEW YEAR, DAVE LONG, THE CEO OF ORANGETHEORY. COMING UP. TIM: THE MOMENT YOU HAVE BEEN WAITING FOR. CAROL: WE HAVE SOMEBODY WHO KNOWS THE WINE INDUSTRY AND IS ALSO HELPING OTHERS BASED ON HIS OWN PERSONAL EXPERIENCE TO HAVE A BETTER LIFE. LOOKING FORWARD TO THAT. ARE YOU LOOKING FORWARD TO THAT? ROMAINE: I AM. CAROL: CAROL: THE PERFECT WAY TO WRAP UP THIS TRADING YEAR, THE GLOBAL WINE MARKET. ROUGHLY $489 BILLION ESTIMATED IN 2021. A LOT OF WINE. OUR NEXT GUEST IS THE FORMER SOMALIA. SHE IS USING HIS OWN EXPERIENCE TO IMPROVE THE LIVES OF OTHERS. WE ARE DELIGHTED TO HAVE WITH US THE COFOUNDER OF WILLING FORWARD WHICH HELPS RECENTLY DISABLED PEOPLE TO OBTAIN THE SERVICES THEY NEED. HE IS THE COFOUNDER OF WINE ON WHEELS. > > THANK YOU FOR HAVING ME. CAROL: TELL US ABOUT YOUR ORGANIZATION. > > WE STARTED ABOUT 10 YEARS AGO. I WAS INJURED IN 2003. I WAS SUPER ACTIVE AND VERY PHYSICAL. WHAT I NOTICED ALONG WITH THE COFOUNDER OF THE NONPROFIT IS THAT THERE ARE OTHER INDIVIDUALS AND THEY WERE NOT GETTING THE SAME CARE AS WE WERE. WE SAID BY DON'T WE START AN ORGANIZATION WHERE WE ACT AS A SECONDARY FAMILY AND THEIR NOT THE FORGOTTEN PEOPLE? THAT IS THE POPULATION WE ARE REALLY FOCUSED ON. ROMAINE: THE NEWEST RESTAURANT TAKES THAT TO HEART. THE WAY YOU BUILT OUT THE RESTAURANT IS DESIGNED TO MAKE SURE IT IS ALL INCLUSIVE. > > 100%. IT IS IN HARLEM. ALL OF US CAN GO TO THE BAR TOGETHER AND WE ARE ALL LOOKING AT EACH OTHER EYE TO EYE. I THINK THAT IS REALLY NICE. WE HAVE ADAPTIVE FLATWARE FOR THOSE WHO HAVE NEUROLOGICAL ISSUES. THAT GOES A LONG WAY. JUST SIMPLE LITTLE THINGS THAT EMPOWER PEOPLE AND MAKES THEM FEEL SAFE AND COMFORTABLE. THEY ARE PROVIDED WITH RESOURCES TO HAVE A GREAT DINNER. CAROL: THEY FEEL LIKE THEY BELONG. > > THAT IS EXACTLY RIGHT. TIM: THIS IS IN NEW YORK CITY. IT IS A PLACE WHERE A LOT OF PEOPLE WOULD SAY IS NOT ACCESSIBLE IN MANY WAYS. > > THE TWO CLOSEST TRAIN STATIONS FOR ME TO GET HERE IS COLUMBUS CIRCLE. I AM VERY BLESSED AND GRATEFUL THAT I HAVE THE PHYSICAL CAPABILITY TO ROLL MYSELF OVER HERE. IT CAN CERTAINLY BE CHALLENGING. WHAT IF I GOT OFF AT THE STATION AND THE ELEVATOR WAS BROKEN? WHICH THAT HAPPENS. NOT EVERYBODY IS CRAZY ENOUGH TO TAKE THE ESCALATOR. NEW YORK CITY IS STILL ONE OF THE GREATEST CITIES IN THE WORLD. BUT THERE IS STILL A LOT OF WORK TO BE DONE. WE DO HAVE MORE WHEELCHAIR ACCESSIBLE YELLOW CABS. THERE IS IMPROVEMENT THAT IS BEING MADE. WE STILL HAVE A LOT MORE WORK TO DO. CAROL: WHAT CAN BE DONE MORE AND BETTER? > > WE HAVE ABOUT 100,000 PEOPLE THAT ARE FULL-TIME WHEELCHAIR USERS. JUST SIMPLY LIKE CURB CUT. WHEN IT SNOWS, THE BUS DRIVER CANNOT PICK ME UP. JUST HAVING MORE SELF-AWARENESS. CAROL: SOMETHING WE TAKE FOR GRANTED. > > EVEN I WAS NOT AWARE OF THOSE THINGS AND IT DOES TAKE TIME. WITH THIS NEXT GENERATION, THE INCLUSIVITY IS REALLY HAPPENING MORE AND MORE. BUT CERTAINLY WE CAN SPEED IT UP MORE. ROMAINE: WHEN WE TALK ABOUT WHAT MAKES A RESTAURANT A GATHERING PLACE, WE HAD MANY DISCUSSIONS ABOUT HOW THE CLOSURE OF RESTAURANTS KIND OF DESTROYED THE COMMUNITY. YOU CAN GO AND YOU CAN MEET WITH PEOPLE. HAVE A PLACE WHERE YOU CAN BRING YOUR FAMILY MEMBERS AND EVERYONE THERE CAN ENJOY WINE, FOOD. THAT HAS BEEN A BIG PART OF WHAT MAKES YOUR RESTAURANT SUCCESSFUL. I WONDER IF YOUR STARTING TO SEE OTHER RESTAURANTS GETTING UP TO THIS IDEA? > > FOR SURE. I HAVE HAD OTHER PEOPLE REACH OUT TO ME ASKING FOR ADVICE. IT IS A GREAT THING. BECAUSE WE DO NOT WANT TO BE KNOWN AS THE FIRST AND ONLY RESTAURANT THAT IS TAKEN THIS INITIATIVE. THE MOST IMPORTANT THING IS NOT TO BE THE LAST ONE. BY ALL MEANS, ANY RESTAURANT, COPY US. THAT IS WHAT YOU WANT. FINANCIALLY INCENTIVIZED, I WILL GIVE YOU SOME MEMBERS. ONE IN FOUR PEOPLE HAVE A DISABILITY. WITHIN THAT POPULATION THERE IS BILLIONS OF DOLLARS OF SPENDING POWER. THEY ARE COMING BECAUSE THEY KNOW OUR STAFF IS TRAINED, THERE IS EMPATHY, BUT THERE IS LOVE. CAROL: ARE YOU GOING TO EXPAND? > > THAT IS THE GOAL, OF COURSE. I JUST OPENED UP A WINE STORE. CAROL: WHAT DO WE HAVE HERE? > > WE HAVE THREE DIFFERENT STYLES OF SPARKLING WINE. WE ARE GOING TO START FROM RIGHT TO LEFT. WE WILL START OFF WITH APRIL SACCO. -- A PROSECCO. WE ARE IN NORTHEASTERN ITALY, RIGHT OUTSIDE OF VENICE. THESE VINEYARDS ARE ABSOLUTELY GORGEOUS. YOU SHOULD DEFINITELY GO CHECK IT OUT. THIS IS A SPARKLING WINE THAT YOU CAN USE TO DO COCKTAILS WITH OR JUST DRINK IT ON ITS OWN. VERSATILITY IS THE KEY. IT IS INCREDIBLY AFFORDABLE. THIS IS FROM SPAIN. RIGHT OUTSIDE OF BARCELONA. A BIT CREAMIER, BUT MORE INTENSE, HIGHER ACID, MORE APPLE NOTES. CAROL: THAT FEELS DRIER. > > IT IS ABOUT $13. CAROL: YOU CAN FIND REALLY GOOD THINGS TO DRINK THAT ARE VERY AFFORDABLE. > > WINE MAKING IS AT ITS HIGHEST LEVEL RIGHT NOW. THE NAME OF THE WINE IS M ONOCHROME. HUNDRED PERCENT PINOT NOIR. ROMAINE: EARLY THIS YEAR, WE WENT OUT TO A CHAMPAGNE REGION IN FRANCE AND WE GOT TO TRY DIFFERENT TYPES. WE ARE SO USED TO THE U.S.. THERE IS SO MUCH IN BETWEEN. > > THERE ARE A LOT OF DIFFERENT STYLES. CAROL: CHAMPAGNE USE TO BE FOR A CELEBRATORY MOMENT. I FEEL LIKE WE HAVE SO MUCH TO BE GRATEFUL FOR. I AM A CHEAP DATE. WHAT ARE YOUR HOPES FOR 2023? > > FROM A PERSONAL STANDPOINT, I WILL PUT MY FRUSTRATIONS IN CHECK. TAKING A PAUSE. IT IS THE KEY. THESE LAST TWO YEARS, BETWEEN THE STRUGGLES OF OPEN UP THE RESTAURANT THAN THE WINE STORE, I WAS SO GRATEFUL TO HAVE THE WINE STORE IN THE SAME BUILDING I WAS RAISED IN. I AM THE LUCKIEST PERSON IN THIS WORLD. CAROL: A LOVELY LEGACY. THANK YOU. COFOUNDER WE LINK FORWARD. CHECK THEM OUT. THAT IS A WRAP. ROMAINE: TO EVERYONE WHO WATCHED US COME OUT WE REALLY APPRECIATE YOUR VIEWERSHIP.

"Bloomberg Markets: The Close" (12/30/2022)

Romaine Bostick, Carol Massar and Tim Stenovec bring you the latest news and analysis leading up to the final minutes and seconds before and after the closing bell on Wall Street. (Source: Bloomberg)

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