The Future of Bitcoin Regulation

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Nov. 15 (Bloomberg) -- "The Dollar Vigilante" Chief Editor Jeff Berwick discusses a libertarian expat community named after an Ayn Rand character and bitcoin regulation with Mark Crumpton on Bloomberg Television's "Money Moves." (Source: Bloomberg)

Phenomenally well.

We are talking about 50% returns on tech ipo's, newly issued tech company.

If you look at that and the lack of growth that we have seen in any other type of investment, that is just outstanding.

I spoke to j.d. moriarty, the head of bank of america's tech investing, and basically, he does not think this is a bubble.

I look at our new issue market.

It is broad, pretty healthy in terms of industry representation.

And in the back half of this year, we have seen an acceleration in tech, which should not surprise anybody when you think of the scarcity of growth in the broader market.

As i think about next year, if i see a lot of look-alike companies, if i see lower quality companies, those things concern me.

What he is talking about with lower quality companies is if they do come to market, how investors will react to that.

Will they push back on price, and even on the issuance itself?

What did mr.

Moriarty say about what we can expect next year?

We spoke specifically about two highly anticipated offerings, one being alibaba, one of the biggest internet companies in the world -- obviously, based in china.

And no matter what their profile is, they will have to take a look at this offering, just because of its sheer size and the demographic it is focused on.

The other company was square.

Take a listen to what he had to say.

If you asked the average tech investor areas for innovation over the next five years, payments would be in everybody's top five.

I think square will be very thoughtful, just as twitter was, about when it is right to go public.

It will go back to the place of, when do you want to be talking to investors, both about a college meant in the rearview mirror and the things you had going forward?

One of the challenges foursquare -- four square will be moving just from a slowly payment company to other areas of revenue, potentially the next six months or so.

Thank you.

In the last 24 hours, hedge funds have been opening their books and revealing their holdings for the past quarter.

Su keenan has been following the story.

These 13 f filings not only give us a rare peek inside the portfolios of the billionaires, they have now become the basis for a new brand of etf's. the latest entry into the track titan type of etf tracks holdings and allows investors to create strategies based on those holdings.

Let's say, 25% warren buffett, and 75% carl icahn.

It is stocks owned by the big boys.

It trades on the new york stock exchange with billion as it simple, and its top five include apple, yahoo!, which are a erect mere of the moguls.

-- are a direct mirror of the moguls.

Carl icahn sold out of web m.d. and took a new stake in talisman energy.

Bill cohen's capital filings show that he has in buying yahoo!

And reducing amazon and facebook.

And a $13 billion stake in exxon mobil for warren buffett.

Ibm may not be a top holding in ibillionaire, but fedex may be.

The ener investors john paulson, george soros, daniel loeb, all involved in the operator of the world's largest cargo airline.

You can get into the portfolios of the billionaire of your choice.

They list the top 10. of course, the snapshots are not necessarily an update.

We see them once quarter.

That is the only surety we have.

And again ,ibillionaire is only the latest entry to these, right?

Yes, we have had for a while the top guru holdings index and selected hedge funds.

Another index or etf is called alpha clone alternatives.

Alsa is the ticker and it allows investors to play a billionaire of a sort.

It is tied to a hedge fund long short index.

You may not be a billionaire, but you get to trade like one and see how it goes.

Coming up, investing conscious capitalism.

We will take a look at the strategy and find out how it is allowing companies to give back to the communities and to shareholders.

And facebook invest in and access offers no money.

We will take a look at why it wants to buy snapshot.

And studio nine plus hopes to build more sustainable startups than is typical.

The founder and ceo tells us what he plans to do differently later on ? in the hour.

Stay with us.

? welcome back.

We are streaming all day long on your tablet, your phone, and at

We turn our focus now to conscious capitalism, a movement that can help companies rebuild their reputations, give back to the community, and make a profit.

The tory capital is a private investment firm they stay in dallas that was founded on the principles of conscious capitalism.

The ceo joins us now.

The advantage of using a conscious capitalism investment strategy, what is it?

It is a game of information overcharge.

That is what investing is about.

When we use this approach, with a qualitative information.

It is not quantifiable.

Business is about creating value the fact that we can create value for all stakeholders is giving us more profit in the long run.

Where are you looking?

We have private operating businesses across a spectrum of alternatives.

We are looking for folks who run their businesses with all of their staples in mind rather than just focusing on themselves.

What is the difference between conscious capitalism and socially responsible investing?

This is the sort of big lies.

The big lie is that doing good comes at the expense or separate from taking money.

Conscious capitalism is, when you do good, you make more money in the long run.

Look at southwest airlines versus american airlines.

Whole foods is another one.

You can also think about costco.

All of these are companies that focus on stakeholders and have built a brand and have generated more money because of it.

You mention money, because i guess we do have to focus on capitalism.

Are people surprised that they are able to make a profit by doing this?

It is funny, because when i share the concept with my dad, he always laughed.

He's from texas and says, that's just good business.

We are giving more vocabulary to these things.

If we focus on the deep qualitative side, and we can make more money by making better decisions.

Anything surprise you when you started this venture?

Pre-k's i think the response of positivity.

People are looking for something that is much stakeholder friendly -- i think the response of positivity.

People are looking for something that is much more stakeholder friendly.

People have come to you and succumb i wanted to invest my money, but i wanted to feel good about it.

-- have come to you and said, i wanted to invest my money, but i wanted to feel good about it.

Building wealth is about, in america, building companies is a how you build well.

How does conscious capitalism measure up in terms of performance, though?

Like i said, we have examples in costco, whole foods.

I have a book called "terms of endearment" and it goes through all of the examples.

Over the long-term, you make more money.

That is where the focus on short-term, shareholder, sort of profit driven is a flawed model.

You need to focus on generating long-term value.

That is how we help this country.

Does that sustainability entice you?


It is a deep value for me -- for me.

Think about the generations behind you and the generations ahead of you.

That is what resonates with me.

What about some of the companies that embrace conscious capitalism?

Who are they?

How are they doing?

I think they are doing well.

We just had the ipo of the container store.

You saw a big pop on the first day of will stop they put a premium on conscious capitalism.

A lot of privately owned businesses are doing very well.

It is a credit to the management team and the leaders of those firms, of all of our partners.

When you are making a presentation about this concept, what is your selling point?

What are you telling people?

The main thing to think about is this short term focus.

Everybody is trying to fight for the piece of the pie.

Let's work together and make this pie bigger.

That is what this is all about.

When we can create value in that manner, everybody benefits.

It is a sustainable value creation over the long run.

Interesting, because you know the conversation in washington -- and we heard this yesterday during janet yellen's confirmation hearing about income inequality, it seems now that this pie will be big enough for everybody to benefit.

That is the systemic problem we have.

I think capitalism is one of the most powerful forces in the world.

But when it is short-term focused and focus on profit, it may not be the greatest force.

To be conscious of and mindful of your decisions is how we can help with that decision.

It is a pleasure to meet you.

Coming up, snap chat turned down a $3 billion bid from facebook.


That is next.

? after spending more than 700 million dollars on instagram, facebook is eyeing another mobile startup, snap chat.

The social network offered almost $3 billion for snap chat, and offer they have turned down according to a person familiar with the matter.

Snap chat is a mobile app that lets users send photos and videos that disappear seconds later.

The company handles and -- handles hundreds of millions of messages a day, but makes no money.

The ceo is an advocate -- we are joined by the ceo of the company from san francisco.

Thank you for being on our broadcast.

This question was posed yesterday.

He said, why does facebook have to offer billions to twentysomething startup founders who make apps that they could easily produce.

Why would facebook want snap chat when it already has instagram?

X snap chat already has 350 million posted pictures everyday.

They have a demographic of 13- 18-year-olds, that magic demographic that marketers want.

And in a recent earnings call, the cfo admitted this is a market that has been twiddling for facebook.

-- dwindling for facebook.

Did you see the next after they announced that, that they lost $15 billion in market cap?

Clearly, this has been a change in their armor.

Having someone like snap chat that already has tremendous growth -- and what was it, four months ago in june they had 2 million acres being uploaded every day?

Facebook just cannot resist.

What are facebook's loughner abilities with teenagers?

Why won't it get much traction with that demographic echo two things, they don't want to be inundated with ads, and never to, they don't want to be inundated with their mom and dad's posts.

There are hundreds of blogs out there that show what happens when their teenager post something and their mom and dad post something under it.

Mom and dad must not be cool, right?

And that hasn't changed for years.

What about the argument that snap chat is just a fad and will not be popular in six months.

Could it have already reached its saturation point?

Is facebook late to the game?

I don't believe so.

I think snap chat is a formidable force that needs to be reckoned with and it is in facebook's best interest to take it up now before it really becomes a threat.

Instagram is the same situation.

It has proven they can create value without having to create revenue.

They have proven they have traction with user ship, uploading photos.

And honestly, it is a cultural thing.

We are seeing a shift in two photos.

A picture is a thousand words.

Photos are becoming the way that we communicate.

We have about a minute left.

Pull, it works the same as snap chat, but it failed miserably.


Mom and dad are on facebook.

It is a facebook product and it is guilt by association.

Even without facebook's acquisition, what are the history lessons we should remember?

Andrew mason comes to mind.

He turned on a $6 billion acquisition from google and it would probably be in the best interest of the ceo of snap chat to have a good conversation with andrew mason.


nelson, it's been a pleasure.

It is 26 minutes past the hour.

That means bloomberg is on the market.

Olivia sterns is in the newsroom with latest.

Let's get you caught up on how the markets are trading right now.

The s&p and the dow extending their records.

The s&p up by about four points.

The tao by above -- by about 59. all of this comes as investors bet that the fed will continue to support the economy.

On the flip side, feeling pressure from reductions in pentagon spending.

Lockheed martin has led the way down.

Those shares down just one percent now, after the company announced it was cutting 4000 jobs just yesterday.

The department of defense has seen budget reductions of about $5 billion over a decade under the automatic cuts called sec restrictions.

In addition to the 400 billion dollars in cuts over 10 years that was included in the law that led secretary and.

-- that led to sequestration.

More after the break.

? welcome brett -- welcome back.

We have breaking news in washington dc -- washington, d.c. with president obama summoning executives to the white house today.

It has been a tough time for the white house and for congressional democrats.

It has been since october 1 that the rollout of the health care exchanges in the website got underway.

But even according to the president and his press secretary, it has been a mess.

There have been technical glitches.

Some have tried to sign up and been unable to.

Republicans on capitol hill have seized on this thing.

It is just an indication that the law is flawed, and they are saying it should be scrapped and done away with.

President obama insisted yesterday saying that maybe folks should be given an additional year and stay on their plans because as the white house has been finding out over the last couple of weeks, some states and their insurance commissioners have been kicking people off of their health care plans, much to the consternation of folks who were told by the president that if you like your present health insurance, you can keep it.

We will get you details as soon as we get them.

Now let's go to top headlines.

Eight is slowly trickling into survivors of the massive typhoon in the philippines.

Flight carrying aid workers and supplies are now landing in some of the hardest hit areas, but many roads are still blocked.

A cargo ship is also expected to arrive saturday with supplies.

The death toll stands at more than 3600. the toronto city council has voted to strip embattled mayor ford of powers.

They have taken away his authority to act in emergency situations as well as visibility t to hire and fire top -- his ability to hire and fire top staffers.

He has vowed to stay on the job.

Gamers are lining up to get the sony playstation four.

It retails for $399. $100 cheaper than the rival, xbox one, which will be released next week.

Playstation four is seen as a key piece of sony's turnaround strategy.

Let's switch gears a much china is pledging the most sweeping changes since the 19 -- let's switch gears.

China is pledging the most sweeping changes since the 1990s. the chinese government announced it would be easing the country's one child policy among several other changes.

Michael mckee reported earlier this week that these reforms could be coming and he joins me now with more on this story.

Is this a paradigm shift?

It's a bit of one.

It continues along the same line that they have been going on for about 35 years, transitioning to a market oriented economy, but in a chinese way, keeping control of the political side of the economy in the hands of the communist party stop -- communist party.

We got a document covering 60 measures, fleshing it out, giving us some idea of what they would try to do as they balance new sources of growth while they sustained his party's grip on power.

The one child policies getting everybody's attention.

It is important for china because their population is expected to peak in 2025 and start going down.

Growth is a function of the size of your labor force and productivity.

If your labor force is going down, you cannot grow as fast.

And another problem, an aging society.

They will not have enough able to help sustain the older people.

And they have a gender gap.

People prefer boys when you can only have one.

117 boys for every 100 girls born in 2012. and that has been going on for some time.

They could have a society of a lot of unemployable and unmarried young men the future if they don't use something about it.

The way it used to be is that you had to have both parents be single children in order to have more than one child.

They are changing that now so that only one parent has to have been a single child.

It is a 35-year-old policy, so most people are single children, so it probably will not add a lot to the population.

What are they doing?

They are helping state owned companies become more competitive, even though they will still be the act bone of the economy.

They want to take 30% of the profits and put them into infrastructure building, things like that.

They will accelerate legislation to improve the tax collection system there.

They will reform farmers right, because a lot of farmers have been plugged into collective farms.

They will let them own some of the lands.

And they will make it easier for people to move around the country as they continue with urbanization.


Our next guest wants to incubate -- thank you.

Our next guest wants to incubate startups.

He thinks it takes a long build come -- it takes a while to build viable companies.

He explains the process behind studio nine plus.

How is studio nine plus different from other incubators?

Is it just a matter of more time spent building the product and the company?

The more time spent building the product and company is actually the output.

The input that goes into it is different from the traditional three-month programs.

You can think of it as -- you talk about seed funding and you can take a lot of seeds and germinates them.

And a lot of the debaters do a fantastic job of germinating seeds for three months.

We take an approach that is a little longer, nurturing the plant as well.

That is the difference.

Tell us a bit about the program.

What are the three phases you put entrepreneurs through?

Like every incubator, we start with three months in which the entrepreneurs are expected to create.

They can build products.

They are expected to create their minimal, viable product, m.v.p. is the term.

As i said, it is fantastic to encourage entrepreneurs to come into these programs from all over the world.

What we do after that is a second stage and the third stage.

The second stage is what we call product market fit, in which the entrepreneur gets to actually launch their market -- their product into the market and see the reaction of users.

Where's the funding from studio nine + coming from?

We offer each entrepreneur 18 -- a team at $110,000. the programs are typically three months at $60,000 to $90,000. technology inflections for the last five years have matured and you need a little more staying power, little more depth to your product to make it eight.

What kind of startups are you looking for?

We are interested in anything that has the potential to disrupt and inflect.

We love the idea as -- of wearables as an upcoming inflection.

We love the data.

The amount of data being produced by mobile apps, mobile web, and wearable things, we believe, is giant.

And we are very interested in consumer services on mobile, which is of the likes of p2p sharing.

The first-class in fall, 2013 is underway.

Tell us about it.

We have been growing the incubator program for six years.

We have people from the previous incubator program exit and make a lot of money and still come back.

One of them is hammer and chisel.

Now a second time entrepreneur.

He still loves the answer -- the mentorship and the depth.

And we have a couple of phd's from computer science in iowa who participated in a three- month accelerator type program and did not feel it was enough.

They are doing a mobile tutoring marketplace.

Even people who like to do three-month programs often come after that to do a longer program.

Peter relan, joining us from our san francisco bureau.

We thank you for your time.

When "money moves" returns, jeff burwood talks about bitcoin and why has become so popular with the libertarian community.

? welcome back.

Bloomberg news has learned that microsoft's orton will meet on monday to narrow down the list of ceo candidates, that is, according to a person familiar with the situation.

Jon erlichman is in san francisco.

We know the board wants to identify a steve ballmer replacement by the end of the year.

Where does this search stan right now?

That is great reporting by bloomberg news.

It obviously highlight their interesting moving along.

We know that steve ballmer announced almost three months ago that he would be stepping down within a 12 month stretch.

We know that the board, as you highlighted, is meeting monday.

A lot of names have come up for this job will stop the goal is to -- for this job.

The goal is to bring in a candidate for this job with the goal of three to five candidates.

And then speak to people about possibly taking over this job.

A number of names have come up for this position internally.

One is tony bates, who has overseen the skype business.

Stephen e loft when the company once again when microsoft acquired the korea -- acquired nokia.

And alan mulally has been mentioned as well.

A technology leader would obviously be of interest to microsoft, but it is a big company and there is possibly the need to have somebody who can see over the weeds with a strategic vision.

That is maybe what they will look for.

Hopefully, more detail to come.

Jon erlichman in san francisco, thank you.

Bitcoin hit a record high this week, trading on the mound got to exchange at a value of $400. interest is growing around the world and attracting the notice of government regulators.

I next guest is the founder of a libertarian community that uses its coin currency.

-- uses bitcoin currency.

Thanks for your time today.

Tell us about gold.

It is the community depicted in nine ran -- ayn rand's story.

But that is right.

There is more oppression, more taxes, more regulation.

And just like in "atlas shrugged ," they've notice that most americans -- that the most americans ever are renouncing their citizenship and leaving.

The central bank believes in the chicago school of economics and has invited people to come down there.

Why is bitcoin so popular with the libertarian community?

They don't want any government involvement in their life whatsoever.

Most of them one.


I am an anarcho capitalist.

I don't want any government whatsoever.

When you think of the central bank, which is run by government, and obviously things like gold and silver have always been a mainstay for libertarian, but this is a currency that has been attracting their attention.

What does it need to do to broaden its appeal to make it more mainstream?

I don't think they have to do too much except for doing what they are doing.

It coin is growing by leaps and bounds.

There are tens of thousands of marketplaces on the internet.

Some restaurants except it coin.

-- bitcoin.

If you go to some south american countries, you can rent a car with bitcoin.

The new york state superintendent of financial services announced yesterday he will hold been -- public hearing to see if a license should be issued for businesses issuing dirt -- digital currency transactions.

But he also noted that they anonymity provided by these currencies has helped support dangerous criminal activity.

What is the difference between secret and anonymity?

Bitcoin is exactly the same as the dollar.

People say, you might use this for money laundering or drug trade.

That is what the dollar is used for today.

Secondly, money laundering should not be illegal.

There should be no taxes and all drugs should be legal.

The government creates these problems and then say they have to regulate it.

Bitcoin provides anonymity.

It is a pleasure to meet you.

Thanks for your time.

Stay with us.

This text has been automatically generated. It may not be 100% accurate.


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