where -- we could see a situation where the year with the economy grows faster than the chinese economy in 2021. >> as we see a shift back towards services spending and elevation activity -- and normalization in activity, we could see a lot of jobs come back. >> what is the outlier event we could see in 2021? it is a blowout year for the economy. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: from new york city for our audience worldwide, good morning. this is "bloomberg surveillance ," live on bloomberg tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. in markets, there is always something to worry about. there's always a shark close to the boat, a tidal wave on the horizon. 12 months ago, what were we worrying about?

the pandemic, shut down, the economy never recovering. 12 months later, what are we worried about? the economy overheated. we will always find something. tom: a number of equity strategists, including our wonderful guests coming up, have that idea. do we have a true rotation, or a catch up from the gloom we have had of the last year? to me, it is one big, normal, healthy catch up. i have trouble being gloomy would you give me a 6% statistic. jonathan: the embodiment of the gloom come of pendulum swinging to the world is going to end, allow me to present to you -- [laughter] lisa abramowicz. lisa: there is a fair question though. are we moving to a paradigm a faster inflation? what does that mean for the federal reserve if it does not see that reality on the horizon? tom: i totally disagree. lisa: that is a question in markets as they look at potential overheating. tom: i can't go on a weekend.

it's too expensive. lisa: we can have therapy on the break. jonathan: we can do crew therapy or some thing like that. i can think of a panel. tom: i just don't agree. i respectfully disagree with inflation worry right now when i see the output gap where it is. i know i sound like lawrence summers, but i'm sorry. when is it going to close? jonathan: the point the chairman is trying to make is 2 million fewer people employed now versus 12 months ago -- is 10 million fewer people employed now versus 12 months ago. maybe the fed is taken by surprise. i think they need to upgrade their forecast. we all agree with that. what happens with policy subsequent late, that's the debate. tom: go to lisa. i've got to talk to dr. phil. [laughter] lisa: there's also a question about asset prices running ahead of the growth we see. at what point does that create a financial stability risk, especially when you don't see the underlying growth, and you have a lot of people that might

not be able to afford the commodities and goods that are getting expensive? there's plenty to worry about. jonathan: i'm with you on that point. we do have some financial stability risk that could undermine the recovery, and you could have this dynamic where the economy gets better and the markets don't perform. lisa: the real economy gets better. jonathan: perfectly conceivable. lisa: absolutely. jonathan: look at the market right now as we count you down to the opening bell, and another day of testimony on capitol hill for chairman powell of the federal reserve. dear equity market up about 0.1% on the s&p -- your equity market up about 0.1% on the s&p. in the fx market, euro-dollar, one dollar 21 -- euro-dollar, $1.2166. lisa: we didn't even talk about the fact that the u.s. sold to year treasuries yesterday at a premium for the first time above

100 cents on the dollar. we are talking about jay powell returning to capitol hill to talk about this navigation between things looking better but holding policy where it is, taking an easy stance to allow the economy to get going. things are not even threatening to overheat at this point. we will also hear from rich clarida, vice chair of the federal reserve. 10:00 a.m., we also get new home sales in the united states. this has been one of the hottest areas of the economy. i do wonder how much momentum we can maintain, given how high some of these home prices have gotten, and as interest rates continue to rise. at 1:45 p.m., president biden is signing an executive order on supply chains, looking into some of the shortages in chips, semiconductors, and other items for the united states. you have been talking about how this indicates partisan bidens -- indicates president biden's

administration is in some ways mimicking the path of the trump and adminstration. jonathan: policy a big conversation on this program. 1:00 p.m. eastern, and tom, i totally agree with you, vice chair clarida is the one to watch, discussing monetary policy at a virtual event hosted by the u.s. chamber of commerce. tom: 10 seconds why you should with -- you should listen to richard clarida, his economics are profound from the 1990's. these are definitive papers thinking about the dynamics of our macroeconomics. jonathan: and in the minds of many, he has been the cleanup back after chairman powell has spoken. tom: well said. jonathan: joining us now, julian emanuel, btig chief equity in derivatives strategist. are you worried about -- equity and derivatives strategist. are you worried about things overheating?

julian: no, not at this point. clearly, their narrative did change somewhat yesterday. i was getting with lisa before the break that jay powell is not as much in the gloom crew camp as he was talking about 6%, but ultimately you have to take the fed at their word that overheating, the definition's core pce over 2% for a multi-month. -- for a monthly month period. we are nowhere near that. jonathan: do you think a multi-month period gets it done? julian: that is an open question, which is why would we are thinking about this yield backdrop which we think yields move higher. -- which is why would we are thinking about this yield backdrop, and which we think yields move higher, it is going to be a path where this employment situation is probably

going to take longer than multi-months above 2% in the pce. tom: rule 101 going back to 1948, you need catharsis to move the needle. do you see any catharsis, any topping out, any catharsis in equity action? julian: not at the moment. you can see it in the micro. you spoke about bitcoin. obviously, the last week or so has been a bit of a frenzy. we think a pause is likely due. you seen it in the meme stocks. you seen it in cannabis, to a certain extent in spac's. tom: but all of that is tangential. it is important, i get that. romaine bostick is going to tell me it is dow equivalency. baloney. come on, the real market doesn't show the catharsis necessary to go down. julian: we totally agree there, tom.

from our point of view, the speculative juices stirred on by liquidity, stirred by the fact that the public is more engaged than at any point in the last 20 years is the backdrop. when the economy fully reopens and those same traders, the buyers of short dated call options, move away from their screens, but that is in the future. lisa: you said take the fed at their word. what does their word mean when it comes to asset purchases? at what point are real yields going to become a problem for them? julian: i think we are still a way away from that point. if you look at how the markets have responded in the last couple of weeks, chair powell won't come out and say it, but he's probably not terribly upset that you have seen the equity market pause and reflect on what

has happened, and frankly, the wish of the fed is to redress the fact that asset markets out ran the economy to the extent that it did over the last nine months, and closing that gap with a stable equity market is a very noble goal. that is where we are right now. jonathan: i just can't reconcile some of the complaints in this market right now. if real yields climb because growth expectations are better, somehow they are meant to step back and. they step back in, somehow they are fueling financial market instability. just how tough is this job for chairman powell right now? julian: we will say this, at least he doesn't have a boss who is harassing him in the public domain, so he's got that going for him. [laughter] look, it has been a difficult job for the last four years. we are in extraordinary financial and monetary circumstances, and as we saw

earlier in the decade, it was very difficult. it took longer than expected. that is likely going to be the case again. jonathan: to be fair, if we have chairman powell version 2.0, i don't think his boss would be going at him in the same way. this is a very different federal reserve chair. good to catch up, sir. julian emanuel there, btig chief equity and derivatives strategist. it is remarkable. do you remember the chairman at the end of 2018 when we had the massive market row? you and i were at the economic club address. that period was so interesting. we haven't reached the neutral rate. we are far away from it. this is when unemployment could have gone a whole lot lower. the lessons they are applying -- the lessons they learned then, they are applying now. i couldn't reach where you were at the front of the stage there.

lisa: what is the therapy? jonathan: this is it. [laughter] tom: jon, what is so important here is if we are in a range, spx down less than 2% from its peak, that is not a correction. it is not a bear market if we are in some sort of technical range. what is the catalyst to get us out of this either way? all we are talking about with gloom abramowicz is the reason we are going down. jonathan: it's a mechanical story. look at the s&p 500. energy was at 1.6%. tom: exactly. jonathan: the banks have been flying. it is all about weightings in this benchmark. tom: i don't hear that conversation going on. jonathan: more broadly, if we see a downdraft, you're not going to see how yield spreads where they are right now. they are going to gap out. you won't see invest in great spreads where they are right now. you are not seeing distress.

we will talk about the issuance a little later in the program. coming up at 8:00 a.m. eastern time, bob doll, nuveen asset management chief equity strategist, a perfect guest. heard on bloomberg radio come off seen on bloomberg tv, this is -- radio, seen on bloomberg tv, this is "bloomberg surveillance." karina: in new york with the first word news, i'm karina mitchell. the house will vote friday on president biden's $1.9 trillion stimulus plan. the president expects the passage to pass by a narrow margin. the big question is the fate of the $15 an hour, moye. -- $15 an hour min wage. -- $15 an hour minimum wage. two democratic senators oppose it. mitt romney expects the former

president to continue to play a big role in the party. hong kong has introduced its first stamp duty in pre-stock trades since 1993. that led to a broad market selloff. shares of the hong kong stock exchange saw their biggest decline since 2019. golfing legend tiger woods is described as awake and recovering after a car accident outside los angeles yesterday. one doctor said he suffered significant orthopedic injuries. he rolled his suv and steep terrain and had to be extricated from the vehicle. there are indications he was driving at a relatively higher speed the normal. visa and mastercard will reportedly raise swipe fees in april for certain transactions. merchants can end up paying about 2% of their card's purchases. they are already feeling the

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chair powell: the economy is a long way from our employment and

inflation goals, and it is likely to take time for it to be achieved. jonathan: we are not there yet. that is the message coming from the chairman of the federal reserve on capitol hill on day one of testimony. his semiannual testimony continues in day two a little later this morning. from new york city this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your price action this wednesday morning looks like this. 3888 on the s&p 500, up 10 points. we advanced 0.25 percent after yesterday's losses on the nasdaq. a six-day losing streak on the nasdaq 100, positive about 40 now. your yield on the 10 year, 1.3654%. tom: very quickly, went long sterling. why is sterling up? jonathan: sterling is up because we are going to reopen the economy in the u.k., and euro is

going to struggle. that has been the story for the last month or so. i just wonder the limits of that trade, given that europe may be bottomed out in terms of the vaccination rollout. what does it mean for the currency? tom: we will find out with lisa and a moment. right now in washington, kevin cirilli joins us, our chief washington correspondent. i notice a jumble of political news, and no real articles on the stimulus. fold the present honeymoon is over jumble, etc., into getting the stimulus done. kevin: first and foremost, i am hearing there is likely going to be a house vote on friday, and that puts secondly he senate and play for next week. finally, the minimum wage issue now the forefront, i am struck by senators mitt romney of utah and tom cotton of arkansas, two republicans who came out and

actually saying that they would like to raise the minimum wage to $10 an hour over the next couple of years, but they have juxtaposed it with some more increased regulations for workers who are here undocumented, so they have juxtaposed the immigration issue with minimum wage. either way, it is a fascinating dynamic to have someone as conservative as senator cotton working with someone who is much more centrist like a senator romney. tom: to me it is remarkable that we can't figure out a constructive minimum-wage model over different standards of living around the country, different cost-of-living, if you will. why is this so hard? kevin: from a data perspective, more people are working from home. it only raises questions about how much salaries and whatnot are going to be able to be negotiated as a result of where they live. but to move beyond that, where the min wage issue now gets incredibly more polarizing is

with senate buddy -- where the minimum wage issue now gets incredibly more polarizing is with senate budget committee chairman bernie sanders. i will be speaking later with, kratt john yarmuth of kentucky. they have really said -- with democrat john yarmuth of kentucky. they have really said that the gold to move this $1.9 trillion stimulus out of the house into the senate. lisa: can we talk about how increasingly of an outlier he is when you have actually trump solidifying his leadership over the party? there was a story on the bloomberg today talking about how a number of republicans defected from the party following the issue on capitol hill, the insurgency, and as a result, the remaining republicans are more in trump's camp, leading to more of an influence over the republican party. how are you feeling that in capitol hill? kevin: we talked about this for

weeks, whether he is going to play in a california recall, or steve bannon floating that he could anoint someone to be speaker of the house after the 2022 elections. i think the industry has to wake up and recognize that donald trump, the former president, is not going anywhere in terms of the shadow he is going to cast over the republican party. really, he is going to step back into the spotlight this weekend at cpac, the top right wing conservative conference that they are doing not virtually, but down in florida this year. so the trump political orbit, they kind of joke about it. they think it is not rocket science about how the former president is going to continue to be a role in republican politics, and even to your point, senator mitt romney said publicly yesterday that he believes trump would win a 2024 republican primary if the

election were held this week. jonathan: so the former president change the game. you can take your own view on whether using it was the right or wrong road to take, but the country i am talking about is china. for anyone simply with the alliance, this i editorial in the "global times," that it is "today's axis of white supremacy." something is brewing between china and the rest of the world on the uighur community, human rights abuses. kevin: what i am watching is with the olympics, whether democrats in the house and senate start to put pressure on the biden adminstration to back off of the olympics as a result of china's human rights abuses and a host of other issues that you've raised. yesterday, president biden

signing some executive orders as it relates to the u.s. and japan , given the chip supply shortage between -- as a result of china, rather. finally, to see europe start to take a different approach as it relates to china is music to secretary of state tony blinken's ears because they have been trying to get europe and the united states cooperating more for how they handle with china. tom: those are the china winter olympics, i believe in beijing. how close are they? it is sooner than we perceive, right? kevin: exactly, and it would be a major embarrassment for the communist party of china should there be countries pulling out. right now, there's calls with regards to china -- those calls with regards to china have not really started in the mainstream discourse, but they are there. at least one house democrat raised this issue, and it is an issue that i am carefully watching because that will no doubt be a source of tension should those cries intensify.

tom: and you are watching this on "sound on," right? lisa: he already teased it. kevin: today we've got chairman yarmuth on stimulus. jonathan: kevin cirilli, chief washington correspondent and host of "sound on" on bloomberg radio, weekdays at 5:00 p.m. eastern. it was so subtle that i missed it, too. lisa: it was subtle, but it was there. tom: it was there. lisa: you heard it, right, tom? tom: yeah, i went to the ferro school of type. [laughter] jonathan: it is wednesday. can we make it through to friday? tom: at 11:00 a.m. tomorrow, ferro says blow up "the real yield." [laughter] jonathan: that's right. tom: none of these guests are good. get me better guests. jonathan: coming up, david

lebovitz, jp morgan global market strategist. futures up 12 on the s&p, and they get better guests in the bond market. [laughter] the team lead by jamie did a fantastic job. let me just throw that when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store.

♪ jonathan: from new york city for our audience worldwide, this is "bloomberg surveillance," live on bloomberg tv and radio. we advanced by zero .4% on s&p 500 futures. on the nasdaq, six days losing streak. nasdaq futures now up 0.5%. are you familiar with the story? real yields higher, nominal yields higher. the curve steeper. two's, tens, 30's and the bond market, yields up. the curve steeper between two's intends -- between twos and tens. switch of the board -- switch up the board and that's talk about this. the chairman of the federal

reserve, what is he seeing right now? high yield spreads at about 320, and investment grade spreads feel tight. tom, that is creek a. the primary market is functioning. -- that is critical. the primary market is functioning. you are not seeing stress. you are just not. in the equity market more broadly, some pain in tech. you are not seeing stress. tom: we talked to julian emanuel at btig. there's no catharsis, no stress. i would note how nasdaq comes back, and the vix is over four big figures since the powell comments. jonathan: as lisa would say, you're are not seeing stress yet, not right now. lisa: bankruptcy expectations have gone way down. but we are not seeing stress.

there is no but. jonathan: later we will hear from us chair clarida -- from vice chair clarida. here's romaine. romaine: the bloom coming off the rose of that growth and momentum trade. of course, jay powell came in with the water cannon and everyone sort of came back into the cards. tesla managed to climb back up to breakevens, getting bit higher in the premarket. i'll you were sleeping last night, we had kathy would on -- we had kathy wood on "bloomberg markets the close." tom: romaine, you've got to expand on that, under conversation with ark investments.

what is the definition of load up that you and your team learned? romaine: three of the funds bought about 340,000 shares. we should point out carol massar was leading that conversation for bloomberg radio. kathy wood made it very clear she saw this as healthy, the opportunity for a load up. she is really loaded up on a lot of those high flyers. paypal, square, uber. she also talked about bitcoin. these are some of the names that not only got her the gains, but she made it clear she doesn't think those gains are over. tom: in the break, i was doing my taxes. lisa was thinking about this serious issue. do we have any understanding of what her cash holdings are right now? romaine: she didn't say. lisa: i was looking at her key etf, which saw its biggest

withdrawal in the last trading poker recorded yesterday of them was $500 billion. it raises the question, this sort of issue that comes up with a self-fulfilling selling cycle because she does own a lot of these stocks. when they go down, what cash does she have? romaine: we had a conversation about how diverse some of these funds are. when you get to sort of the top 20%, 30% of her holdings, it is a pretty small basket of high flyers, and that has to be a concern if we do find ourselves in a real and sustained correction, at least according to her. as you would expect, she is still relatively bullish. i does want to bring you a couple of other names here. there's interesting news crossing the wire a little bit ago regarding the china ride-hailing service, saying they will make an expansion into western europe in the first half of this year. that is uber territory, and uber shares took an interesting dive in the premarket on that news. tjx will return earnings and a

bit. lisa, you seem like a home goods and a person. lisa: do i? romaine: absolutely. it is a retail play here. tjx has been one of the outperformance. this is a really interesting story. carl icahn, we learned a couple of weeks ago he had taken a 7.8% stake. this is the former valeant, the big pershing square play that he lost, going to bloomberg, about $4 billion, and all of the controversy about valeant boosting drug prices in a way that some people thought was a little unethical. interesting to see this is now a storybook ended by carl icahn coming into this as they look to find some value. tom: thank you, romaine bostick. we go to 30 year bond, out six basis points. it is a huge move, 2.24% rounded up. david lebovitz is very aware of

that at j.p. morgan asset management. let's go to where the data is moving. what is the single at the -- what is the signal at the long end of the curve, moving up the yield and reduced prices? david: as we get more and more evidence that the reflation trade is taking hold in the economy is really reopening here, and should continue to reopen over the course of the coming months, you are seeing assets begin to reprice, and frankly, below 1% on the 10 year, where the 30 year has been trading, those were reflecting a world where we were still in lockdown. you are seeing that investors are finally beginning to wake up to the fact that 2021 is going to be a year where the global economy booms. we are getting more stimulus in the united states. it sounds like policy makers around the world are going to remain accommodative over the course of the next 12 months, and i think fixed income was to rich for that type of environment. so a very healthy repricing and a pretty positive story when you take a step back and think about

what is really going on here. jonathan: sometimes talking to clients is like therapy. you've got to tell them why they have to stay in the market. what is the conversation like right now? david: you make a great point about the wall of worry. many have fallen off that wall when trying to climate. the conversation -- trying to climb it. the conversation is really about how the fed is going to respond. the fed was obviously spectacular in what they did in 2020 in terms of opening the credit facilities and re-engaging with fairly significant qe, but when we think about that shift in their framework to an approach characterized by average inflation targeting, nobody really knows what that is going to look like. it is very difficult to build expectations around how the fed is going to respond, so its biggest concern right now is effectively the inverse of what we talked about for the better part of the prior cycle. how many times did we have the conversation that the fed wants to raise rates and the market says no way? we are beginning to see the opposite?

are there forecasts realistic? that is dominating client conversations right now. jonathan: dominating the conversations we had coming into 2021 was about the barbell strategy, having growth on one side, cyclicality on the other. has that tilt shifted? david: we are increasingly adding more cyclical assets to portfolios, but the one thing we do recognize is that big bursts in cyclicality and in value 10 to be relatively short-lived. if you go back to 1975, really the only sustained period of value outperformance is what we saw in the early 2000's. the rest of the time it tends to be here today and gone tomorrow. so taking a bit more exposure on the cyclical side, we think those assets were main attractive on a relative valuation basis, and should do pretty well given our expectations for the economy this year. but importantly, not running away from growth. if anything, rethinking the composition of our growth exposure. we still like tech for the long

run. we still like health care for the long run. we just don't want those mega cap names that perform so well in 2020. we think those might tread water in 2021. lisa: we were talking about the poster child for some of these high flyers, particularly inditex space, and in her interview yesterday with bloomberg, she said the strongest bull markets i have been in are built on walls of worry. do we have enough of a wall of worry to keep this bull market going? david: absolutely. was not -- when i was on a few weeks ago, we talked about the fact that a pullback was becoming consensus. people are very skeptical about the durability of what is happening in markets, and to me that is always a pretty positive signal. i thick as long as people are asking how the fed is going to respond, what is inflation going to look like, what is the outlook for fiscal policy, are we going to overheat, these are very relevant questions for investors to be asking at the current juncture, and i think as

long as we are viewing this rally with a healthy amount of skepticism, that suggests to me that it continues to have legs. we are not necessarily see income outside certain pockets of the markets -- not necessarily seeing, outside certain pockets of the market, that occurring for the next 12 to 18 months. jonathan: i love the bloomberg blue walls. doesn't that just work? [laughter] david, thank you. david lebovitz of j.p. morgan asset management. futures up 12 on the s&p, up about 0.3%. just a little bit of a bounce coming through the nasdaq. tom: just while we were talking with mr. lebovitz, the 30 year bond is speaking volumes. there's no other way to put it. it is price down, yield up. you know i loaded the boat on the 95 year austrian piece. i am down 23% in price.

i may do a rotation into the u.s. 30 year so i can lose more money. jonathan: isn't that just the perfect example of what people are worried about right now, whether shortening up duration and rate sensitive parts of this market? tom: we are experts at rationalizing equity markets. we are numb and the bond market. right now we rationalize price down. jonathan: yields up six basis points on 30's come on tends, about 1.38% -- on 30's. on tens, about 1.38%. lisa: david was basically talking about that healthy level of skepticism, that you be able to understand and look around corners, figure out what your potential pitfalls could be, and then trade accordingly. tom: you know what is great? dr. phil is text messaging me. [laughter] lisa: what is he saying? tom: tell lisa to keep it up. jonathan: lisa is the reason this market is going up. lisa: i am just saying, they

could understand what they might be missing. jonathan: coming up in the next hour, congressman brian steil, republican member of the house financial committee. looking forward to chair powell in front of that committee a little bit later. good morning. heard on bloomberg radio, seen on bloomberg television, this is "bloomberg surveillance." ♪ karina: in new york with the first word news, i'm karina mitchell. president biden will order a government review of u.s. supply chains. the goal is to end the country's reliance on china and others for essential goods, but will offer no immediate solution for the shortfall of semiconductors that has delayed auto production at several factories. meanwhile, joe biden and canada's justin trudeau set aside differences over trade and other issues in their first meeting. they conducted a virtual summit for two hours. they said their nations would adopt unified approach toward the pandemic, climate change, and china. more fallout from that engine

failure on a united airlines boeing 777. the faa has ordered high-tech inspections of engines used on 777's. a fan blade in the engine snapped, tore off another blade, and then the front structure of the engine. the british government has unveiled a $988 million plan to help young people catch up on lost learning due to the pandemic. money will be used to expand tutoring to help schools provide more activities over the summer. schools in england are set to reopen march 8. bitcoin went back over the $51,000 level today. the rebound follows a tough week for the largest cryptocurrency. it sank to $45,000 yesterday, reviving doubts about the durability of the rally of the past year. bitcoin found some support from etf superstar kathy wood, who said she is very supportive of

it. -- very constructive on it. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. ♪

♪ >> we will back at bitcoin as the poster child of speculation

on the back of this rampant money supply. that doesn't mean i don't believe in digital currencies, but i do believe that digital currencies will end up being issued by central banks as part of their strategy. the big thing to be when the fed endorses an official digital currency, and when that happens, i think bitcoin's days are over. jonathan: from new york city this morning, good morning to you all. alongside tom keene and lisa abramowicz, i'm jonathan ferro. for our audience worldwide, here's the price action this wednesday morning, up about 15 on the s&p. we advanced 0.4%. just a little bit of a lift, even as we break out on 10-year gilts, up three basis points -- 10 year yields, up three basis points. the 30 year yield a full six basis points higher to 2.24%. crude coming along for the ride, $62 67 -- $66.67 on to bdi.

tom: a lot of cash on wti -- on wti. tom: a lot of nuance going on. mike mcglone is with bloomberg. bitcoin is often used for illicit finance; is inefficient. describe the inefficiencies chair yellen is talking about. michael: i think she is missing the point. the number one tool for illicit finance is the $100 bill. but if you want to trade bitcoin like the dollar, she's right, the dollar is much more efficient. but even our previous guest said bitcoin is not a currency. it is a digital reserve assets. you can trade it. that is the good thing about it. but people potentially never went to sell it. i think it is the thing that

enhances the value of bitcoin. from a digital asset standpoint, the number one traded currency in the world is tethered to the digital dollar, so to me, that is key. the digitalization is enhancing the value of the dollar. tom: but bitcoin is a gold equivalent. what is the correlation of gold with bitcoin right now? michael: last year it reached to the highest ever on a 52-week basis. i view them together as a bucket. they belong together. tom: it really is a bucket trade. michael: you cannot analyze gold anymore without putting bitcoin in there because bitcoin is replacing it rapidly. what is the next iteration? tom: so mrs. keene is going to have bitcoin jewelry. jonathan: let's hope mrs. keene likes that as well. we talked about the volatility of the asset, the volatility

potentially of a unit of exchange. this volatility needs to come down. i am trying to understand from your standpoint, what leads to lower volatility? michael: higher prices. let's look forward four years. bitcoin will be much higher. it left much greater depth. and we will head towards the same volatility as gold if the trains are an example. the two factor model in terms of volatility is supply and demand. supply is fixed for bitcoin. everything else is uncertain. i think that is what you have to look forward to. if you want to wait for volatility to go down, great. but it is from a much higher plateau with much more depth. what would trip that up? i don't know what that is at this moment. lisa: spoken like a true bitcoin bull. rebecca patterson also talking about the regulatory framework, the idea that when there is more regulatory certainty, that is when bridgewater will take a more serious look in the crypto asset. what are some of the regulatory

hurdles, the thresholds people are looking for, was guidance with respect to any potential rules that could give people be cents that there is certainty there? michael: ray dalio did speak about the potential for banning bitcoin a while ago. one thing to remember, it might be the most unique example of decentralized capitalism on the planet ever because it just migrates. i think the key thing to thing about regulation is in the u.s., yes, regulate it. embrace it. that will put us ahead against a major ever siri like china, and then let's look at relation. but we have coming is a bull etf. tom: if yellen regulates bitcoin, what does price do? michael: it to beds on how she regulates it. more regulation brings in -- it depends on how she regulates it.

more regulation brings in more institutions. all they need is the market to calm down a little bit. that is what we are hearing. we are seeing that in most markets. jonathan: so you agree with rick patterson, that if we get some form of regulation, that will lead to lower volatility? michael: i think it is more they win. jonathan: really -- more of a when. jonathan: really interesting. bitcoin just south of $51,000. tom: i think we even got $46,000 for a while. a nice bounce back this morning. i can't make anything really technical of it. if you say to me what is fair value, i am not smart enough to figure that out. jonathan: i would say look out for the banks this morning. the financials had a really good ride, and the yield curve is moving in their favor even more so. tom: and eve got green across the screen. even nasdaq with a lift. i am going to go back to the hysteria over this sector and

this sector. spx is down over 2%. lisa: there's also a question with the banks and the consumer profile, the idea that they have the money to pay back their debt. the idea that there is a strong consumer which edifies. we have not seen a pricing out of what that looks like. it is hard to see commercial real estate holdings actually get truly valued. what does that due to to some regional banks in particular that have freed portfolio holdings up a bit? tom: you saw hsbc talking about work from home, and they will take up some 40% of their office space. how many of those do you need before it has an impact? jonathan: we haven't talked about what a return to normal actually looks like. it is whether these companies change their footprint. to change your footprint takes a little time. they are long-term decisions. tom: i would say the employees are changing the footprint for a lot of companies, whether it is transportation or childcare,

whatever. that hsbc announcement, i wonder how anymore we are going to see of those given the pandemic improvement. lisa: i was speaking to someone in the real estate industry saying that people are moving to florida with the bet that office jobs will not return to other places. they are betting that they have the flex ability to stay wherever they have moved. that is unproven. a lot of executives, particularly in the financial industry, have said we want people to come back to the office because they work better and there's more creativity when people get together and have this. this. [laughter] tom: we could move to key west, the golden parrot, whatever it is called. jonathan: why don't you go down there first? tom: i would a reconnaissance. jonathan: perfect -- i will do reconnaissance. jonathan: perfect. tom: paul singer is moving the shop down there. jonathan: we will think about it. tom: they guy next to you in central park west or whatever --

jonathan: here we go. [laughter] tom: -- there's like three units in your building for sale. jonathan: for the audience worldwide, i don't live in central park west. only tom does this. [laughter] lisa: i've got oil still in my living room, tom. jonathan: a security breach. this is bloomberg. ♪

♪ >> it's not surprising, given the issuance and the recovery coming, that bond yields are going to be higher. we are going to see the curve steeper. >> we could see the u.s. economy grow faster than the chinese economy in 2021. >> as you see a shift back towards services spending and normalization and activity, a lot of those jobs could come back quickly. >> it is a blowout year for the economy. >> the fed may be underestimating the degree to which and the speed at which we will get back to normal. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa