It does have broader significance in the markets or is it just a one off?
Hopefully it is more limited. I think there's no question that that's
regulation and we've all been talking about having this sector regulated.
It would help. It's the market itself, but also the
investors going in, having this particular come at, you know, FCX, which
is an exchange for crypto, a fee based in the Bahamas with not just no
regulation, but also with a few people who had very limited experience in
finance or in anything really run it. I think the shocking part of it, David,
was that very, very sophisticated venture firms from Sequoia and others
were invested. It was not just retail.
Getting involved in that market. So it was a surprise, but hopefully it
will get limited. And I think it has put a lot of pressure
on increasing regulations sooner here, and that will be a good thing for the
market. Now, let's not forget that the whole
market is less than, you know, at nine hundred billion.
I'm not saying that that's tiny, but it's still not significant enough to
create any kind of stress in the market unless we're missing something that we
don't know at this point. I think what's important, David, when
you watch that clip and that was the absolute peak in in the dot.com bubble.
Yes, there was a massive shake out. There was a massive consolidation.
But I would argue the Internet and tech evolved far beyond what any of us ever
thought it would be in 2000. I wonder if we're going through the same
thing with crypto and NAFTA that it got a great start.
There is going to be a shakeout of Sonia's, right?
There's probably going to be a lot of regulation.
But when I talk to the young people on our desk and our platform, there's still
a big believer. And if the millennials are a believer,
twenty two years from now, they're going to be looking at this clip.
And I hope we got it right. That's fascinating.
There is no question it's a generational issue here.
Let's go back to the current generation and people who are as old as I am.
I'm older than you are, but as old bonds right now.
Do you invest in bonds for the first time in a decade?
Absolutely. And I will tell you that we're seeing
interest from everywhere now. Every wealth management platform in J.P.
Morgan, every institutional client, they're coming to us.
They're putting money in bonds. They're looking to commit more.
And they haven't done so for four years. If I look at where we got to at the
start of the year, a general bond fund that the the Bloomberg AG yielded one
point seven percent. Now we're up at four point seven
percent. We have three percent higher yields.
And that's going to track investment. And as I said, I think the Fed is close
to the end. I don't know if they get to 5 percent.
We're kind of in the four and a half foreign, three quarters percent.
That's going to bring a lot of stability to the market at these levels.
Bonds are back. So I'm saying you manage a fair amount
of money. What about for you?
Are bonds attractive at this point or are you just equities?
I think, as Bob said, what is very interesting right now is even in any
foundation or endowment or the assets that we manage.
You're finding that exactly the same phenomena where people had moved away
from bonds and cash and equities and private investments moving back in to
holding bonds. And as we've sort of reaching that 4 5
percent that Bob talked about, much more interest in bonds in a more balanced
kind of portfolio. And of course, people are looking at
cash with 4 percent at with Treasury bills at the level that is much higher
than cash is in a very long time. But I think the bigger thing that is
happening in the portfolio is we're looking at is obviously a lot of
investors, institutional investors have been also investing in venture private
equity, real estate in private forum. And I think that is blamed to some sort
of transformation, too. Well, let's let's take a Segway, if we
could, from that sort of investment into COP 27 as we're speaking right now.
So go ahead. It's going to end on Saturday.
Right now, I've seen a you know, far better than I do.
It looks like it's going to be difficult for them to get to the objectives that
they had. You're absolutely right.
So far as we know tonight, the latest news was not too positive.
Things could change tomorrow morning, but they didn't really have anything
major to announce. Again, as you remember, in the cop 26,
they had the Jeep fans, which was a large number of large asset managers
signing up to make pretty significant shifts in their carbon footprint.
But most recently, they started walking back from that or not wanting to sign
quite on what they had agreed to in COP 26.
So I think it's very, very important as we're having these meetings.
Maybe they shouldn't be every year. Maybe they should be every other year or
less often, but show some sort of progress.
And the most important part of the discussion this time, David, has been
the fact that developing countries, again, have felt that they are in some
cases suffering, because if they're an island economy, they're going
underwater. If they are affected by by droughts and
by floods. And a lot of it might be caused by those
who did use a lot of carbon over the last 10, 20 years.
And they're asking if they could get help.
And that help is really not coming. And I think that is really, really major
summary of COP 27, which is that expectations of investments into climate
are probably less than what we expected going into the cup.
Why? Just picking up on that on the
investments in it. Bob, I want to come back to you, because
I want to things at least I'm taking away from COP 27.
You would certainly hear. Listen to John Kerry, the president's
special envoy on this subject. We're not going to get it from public
money alone. It's going to take a fair amount of
private investment as a bond person. Are there bonds that are green bonds or
in the climate or. That makes sense as a business matter?
There are I think for sure if you're going to finance something, which is
what bond investors do, you want something that has something of a green
agenda to it. And we're hearing that from our clients.
There's more and more money coming into this space.
I think, Sonia, help is on the way for the island.
Economies of the large scale investors want to commit capital to this space
where the Inflation Reduction Act, as it's called, local objects.
That title put a lot of money into the game here on the private side of
something. Is it making a difference in the
projects that are getting financed? No question.
I think I think DAX is a very powerful act and it's the largest amount of money
going in. And I think that will really help us in
the U.S. to invest a lot more in climate related
food and ag, in battery storage, in residential and in community related
solar and wind. So that will be a major, major push.
And we're seeing, as Bob mentioned, a lot of movement.
I agree with him. I think it's just that in COP where you
expect public money to go in, there was sort of disappointment with that.
But the private sector is doing a lot. The young generation is doing a lot.
We just need the public sector to jump in when it comes to it outside of the
ISE, of course. Bob, last word.
Are you seeing a difference in your part of the business, in the government tax
policy when it comes to green bonds? We are absolutely making a real
difference here. It is from our perspective.
So, yeah. Everything we see that and we didn't
touch on the regulation. There's going to be more regulation
poking through. What qualifies as a green bond?
And also to prevent any green washing either in specific bonds or in bond
funds. So watch this space.