How you really feel about Cryptocurrencies when it comes to Bitcoin what's the floor When does it rebound and most Importantly when do you start Buying it well you know so First off i i have to give credit to Bloomberg For having me made the king of bitcoin Because it was directly a question That i received on fed day that when i Said i thought it was worth about four Hundred thousand dollars That uh suddenly had me the focus of the Uh Crypto world but um you know The uh the the the market had gone Parabolic uh there was a surge From ten thousand to over sixty thousand We've pulled back here to the Neighborhood of thirty one thousand a Day give or take And um you know that the support level Is really Being tested hard and um you know the Breakdown we got to you know about 29 500 Uh you know could be a false breakdown But uh I don't think so i think that uh there's Still More air to come out of this and Ultimately You know i think something in the
Neighborhood of 15 000 Is where we're going to end up uh the Standard bull market Or bear market i'm sorry for bitcoin has Been an 80 Retracement and uh you know given all The uncertainty And the new competition from new coins And everything else Uh you know i i think that uh there's More downside to go And uh you know when do you buy it yeah Well Uh i don't think anytime soon but i Would i would uh Make that decision based upon uh price Action in the future All right well let's broaden this out a Little bit scott maybe you can talk a Little bit About some of the correlations if any That you see right now Out there in the market that would Either give you pause or maybe Encouragement here About dipping into some of these other Assets sure well you know it's it's Interesting romaine Um everybody talked about uh Crypto being a diversifying asset And they they likened it to gold which It does have some of the same Characteristics But the price behavior has really
Reflected Uh that it's a risk-on asset and ever Since the stock market momentum sort of Began to fade Uh you know we've seen crypto come under Pressure And uh i think that uh you know that Could be the canary in the coal mine That's telling us that we have more Problems ahead for risk assets And in particular stocks scott Guggenheim partners though correct me if I'm wrong was looking to Get authorization to be able to go into The world of crypto do you think longer Term this is the area you're still going To pursue how much of your clients Still want to be able to get access to This entirety of of the space not just Perhaps just bitcoin Sure well caroline i think there's a lot Of Interest in the the uh asset category And it's a mixed bag uh some people are Telling us That they don't want like for instance Our macro fund to have an exposure to Bitcoin And i'm talking about uh our our mutual Fund Uh our macro fund which is not a mutual Fund does currently have exposure Uh to uh cryptocurrency And um you know i think that uh if we
Get another washout the popularity Uh of uh crypto is going to fade quite a Bit Among people who are so anxious to jump Jump In right now but again that's probably a Good sign it's a buy Um you know there's a real question here Though about You know what is the winner in the Crypto world Um and you know obviously ethereum for a Number of reasons Looks better long term as a viable Crypto coin than Uh um uh bitcoin But uh you know there are there are any Other what i'll call the mongrel coins Out there You know sheba coin dogecoin Uh you know i i'm thinking about Launching one named after my dog Gracie who's part shiba inu but um You know the truth is that a lot of this Stuff is just Junk and at the end of the day isn't Going to be around in the long run I've likened crypto to the internet Bubble And that is that um you know Amazon was a fantastic stock to own And you could have made it uh you could Have bought it in march of 2000 And made a lot of money but uh you could
Have waited two years and bought it for About 80 Less and so the question is really for Me Uh which coins to pick uh bitcoin and Ethereum seem like winners in the long Run But i don't think we've actually seen The real Uh the coin or the the crypto currency That is going to dominate the market Evolve or a period Just like we didn't see Google uh well after yahoo had already Established itself as the dominant Search engine interesting Scott you mentioned junk so speaking of Junk where is the best Opportunity in credit right now Boy uh well if you if you want to be Involved in High yield probably double b credits uh When you look at The the lower quality category in high Yield Uh like single or triple c credit uh We've only been more expensive Less than five percent of the time Relative to u.s treasuries Whereas double b credit is been More expensive about 25 of the time And given the likelihood that we're not Going to see A lot of defaults given the the strong
Stimulus that we're getting out of Washington and the support from the Federal reserve I don't think you have to be too worried About uh a default or losing income But one thing you i think we do have to Be alert to here Is that we are coming into a seasonally Difficult time for risk assets And uh there might be a better entry Point if you want to get involved in High-yield credit than where we are Today Speaking of entry points if you're Concerned about a risk-off summer you See problems ahead for stocks how much Do you expect them to sell off And when well sonali i think that Uh we should really focus on the later Part of the summer You know usually the stock market has Its weakest performance in the months of September and october And uh you know there's the old rule uh Selling may go away come again at labor Day Uh statistically it's actually been Shown that uh Selling around memorial day and buying At the first game of the world series Is when uh is a good entry point for Stocks So i think october september and october Are likely to be very rough this year
Maybe you know a pullback of 15 or Slightly more But once the dodgers are uh at the Opening game in the world series i think You'll be able to buy it Oh interesting there uh a little uh Another bold prediction here Uh from scott uh scott you know by the Time we though we get to the world Series here Presumably the world is going to look a Little bit different at least with Regards to how Uh the market is sort of positioned you Have obviously a fed meeting next week But you got jackson hole there's general Expectations out there That the fed will provide some clarity Here On tapering some clarity here on rate Normalization Do you anticipate that we'll get that by The time we get into the fall and if so How do you think the market's going to React to it well i think that Uh look the it's been very interesting Uh to watch how hawkish a number of the Fed Fomc members have become in such a short Period of time And so i think you know coming out of Jackson hole There's going to be an attempt to Reconcile the differences of the various
Presidents and the governors On what the appropriate policy is i Think that by September the fed will Probably feel some obligation to lay out How tapering will work but May not be so anxious to actually Announce a date when it would start Uh i think the earliest we would expect Tapering to start would be march of next Year Um but uh again you know anything that Would Be a sign of an acceleration would Be interpreted as say a bad for the Stock market and probably good for bonds And you know i think that that is one of The Many factors along with the uh delta Variant And uh the uh circumstances that we are Currently in with china on this This cold war uh that are big Ifs uh for this summer and are are Likely to be some of the Things that lead to uh a lack of faith And risk assets yeah dig into that first If there because of course you Or one of the early voices talking about How concerned you were about coving When it first struck us in early 2020 Scott What now as we look in 2021 at the delta Variant
How cautious does it make you as a man Leading your business as a man who's Investing in other businesses Right well caroline first off you know One of the the rules that i look at is I'm not a trader anymore i fight i fight That Since i used to be a trader but you know I'm an investor and i think in the long Run we're going to get a lot of support Regardless if we get a resurgence in Covet or not But when you look at the data on uh The surge in covid cases like in the State of california for instance we're Back to where we were In early march at the number of new Cases And it you know in the early march we Were pretty much deep In lockdown so i think there is a risk That Some regions of the country are going to Try to lock down again That would obviously be bad for the Economy But i also think that you know given Uh the probably you know intent Continued improvement on the inoculation Rate Uh that it's going to be more contained Than it was uh the last time so i don't Think That we're likely to get the huge surge
That we did last summer in covet cases But it'll be enough i think to spook the Market Scott we only have a few minutes left Curious as you think about pushing Forward to the fed next week and some of The discussions around paper Are you thinking that we could have a Taper tantrum You know taylor i i think we maybe Already had it Um the uh you know the backup in Interest rates Um that we got up through the end of March Um really was inconsistent with The policies the fed and then the the Program the fed Announced uh our model showed that the Fair value For a the 10-year note was about 1.2 Percent So uh all of the rate increase above That level to me looks like Overshoot and i think that was You know the concern i think now Uh that the fed is getting its uh Uh you know elevating its level of Concern around Inflation uh investors are starting to Think they're going to move more quickly Which will contain inflation And that has obviously triggered the Bond market rally that we're in right
Now And if we get the same degree of Overshoot as we did to the upside And you know we have about another 60 Basis points to go before we find a Bottom in yields
