you know, in the form of the cares act, very, very large and very, very quickly there is no close precedent at all really since the depression for what happened. and both reactions were swift and over powering. that was a big difference and i think we did learn that. we learned come in early and come in hard and don't leave until the job is done. the last thing i'll say, the other difference completely different is the health care policy the single most important economic policy in this is health care policy it's two things. getting control of the spread of the virus, which we have not been able to do with much success yet, but it is also developing medical innovations for treatment and ultimately vaccination. so many, many differences but i would say we did apply some of the lessons of the global financial crisis >> would you say if we didn't have the 2008 crisis your

response would have been different? there were some lessons from 2008 which helped you to make a quick response and all that? or is there -- 2008 it was good to have this experience from what for this crisis >> it's hard to say that, i wouldn't want to get caught saying that 2008 was a good thing. nonetheless, i would say it this way. i joined the fed in 2012 so i was there for the response -- we still had a long way to go in the economy and of course i am very familiar with what happened during the crisis. yes, we learned plenty of lessons. the whole review if you take a step back in 2012 we didn't know what the new normal was going to be for many years people were writing down, i was writing down a return to 3% growth. a return to 4% nominal federal funds rate and a ten year yielding 4% or

5% we didn't know we lived through a ten year, 128 month expansion and we see what is happening around the world and in the u.s. economy and we see the performance of inflation. we learned we also learned from i would say in particular fiscal policy tightened a lot in 2013, 2014, 2015 and so the fed is over there doing qe 3 and the extension program was a little earlier and fiscal policy is just a weight on the back of monetary policy it is not helping. there was a response at the beginning but it ended too quickly and it wasn't sustained. so not only did everyone fiscal and monetary act swiftly from the beginning but we've seen followup from the authorities. that's part of the story you're looking at forecasts now where we are back to potentially the prior level of output, the

prepandemic level of output relatively soon and the key to that, the key thing there is maybe we'll be able to avoid a lot of the damage to people's lives, you know, what we call labor market scarring but what it really amounts to is people losing the life they've made in the work force and that is really the thing we're most focused on is getting back to a strong labor market quickly enough that people's lives can be where they want to be we were in a good place in february of 2020 and we think we can get back there much sooner than we had feared >> as always we have to end on a positive note. but before we do this perhaps we can look at various crisis tools the fed has employed during the covid crisis and the fed has assumed various roles. one was i think very crucially in march the fed intervened or

you intervened in order to stabilize the system not only for the u.s. but for the global economy more broadly and one was that the u.s. treasury, ten year yield treasury the market making function was not working so well anymore and you took on the role of the market maker of last resort that is something which i think one has to elaborate on a little bit and to what extent the fed is also there in order to ensure the safe assets status of the u.s. treasury remains the global safe asset what i found most striking is, and you alluded to this already, is that the fed put up the corporate bond programs and it was enough to just be there as a back stop and the market was then working on its own again. so without really buying corporate bonds it worked phenomenally well again and there is a record issuance of corporate bonds in 20 to

despite the fed only said with communication, and back stop if something were to go wrong really dramatically. on top of it perhaps you can allude a little bit about the difference of being on the financial markets but also helping out small and medium enterprises through main street facilities and all this. what was your experience on that, how well does this work? also in conjunction with the u.s. treasury. and then another dimension was essentially becoming the lender of last resort on a global scale and establishing the dollar as the prominent global currency. there is some argument out there that the lines were very crucial at that point. actually it is a good deal for the u.s. and essentially you become a lender of last resort to many banks across the globe it is essentially taken on by the national central bank.

perhaps you can allude a little bit to the importance of this and how much it actually establishes the dollar as the leading currency in the world. finally, how do you see the fiscal $1200, a helicopter drop, and now we are talking more about another $2,000 do you see this as a helicopter drop of money in a monetary sense? of course it's done always by the fiscal side. how do you take the interplay into account >> so those are some very good topics let me start with the treasuries of course everything we do has to tie into our mandate which is financial stability and i would say restoring a critical market such as the treasury market to functioning, it's so central to all markets, that, clearly, ties into our role. and i wouldn't -- i'd say we were -- what we did is we

bought we weren't making a market we were buying a lot of treasuries i mean a lot and i would add, though, that the performance of the treasury market and the mortgage market in the acute phase of the crisis does suggest that we need to think about market structure and greater resiliency i know you had darrell duckby a while back here to talk about some of that and of course we're doing that wu one of the main things is we're looking at the role of market structure in the treasury market because we really need it to work it's vast good on the public in terms of save asset guarantor we don't have a formal role at that but if we do our job well, then we will foster the creation of safe assets and also foster the use of the dollar as a reserve currency they're not direct goals but,

nonetheless, are things that certainly benefit the united states and to the extent they are -- they are well aligned with the achievement of our goals, so i think that will happen in terms of the back stop effect, it was extraordinary you may remember hank paulsen i think it was saying in the last global financial crisis, give me a bazooka so i won't have to use it well, then it didn't actually work that time maybe the bazooka wasn't big enough but it really did work and it was effectively one way to think about it is just the elimination of bad tail risk we learned this quickly. as soon as we announced the facility, these facilities take much more time than you imagine or i had imagined to set up. they're legal structures, just a lot of work that goes in we're so lucky that we had a lot of the people at the fed and some at treasury who had worked on these facilities in the last crisis and you know all of them, but great people who don't get a

lot of public recognition but when the bad situation is there, they're on deck, they are serving this country really well so a lot of gratitude for them in any case, what happened was this time we would announce this facility, the corporate facility or the muni facility and the market would start working right away ironically, you know, and the fact that there was low take up, actually no take up for the corporate and low take up for munis was nothing but a sign of success. the amount of borrowing and the level of interest rates that's taking place in the muni markets is extraordinary it's setting all kinds of records and rates are low. this is true across the credit spectrum effectively the back stops really worked. you pointed out main street. it is just much more difficult to reach nonfinancial businesses, small nonfinancial businesses that don't have bond market access. it's very, very difficult for the fed because we have no

experience in doing that and, by the way, we're a bank regulator and we spent the last decade, you know, working hard with banks not to make bad loans. and so i think one of the things we learned is it's particularly for these smaller firms and, you know, they really, what they really needed in many cases was the ppp program or some kind of transfer to keep them open fiscal policy. they need fiscal support so the answer for a small business that really can't operate is not necessarily to borrow many of them took the view that they would rather not borrow because you got to pay that back whereas ppp was effectively a transfer program as you know anyway, that is i think a lot of work will be done on what's -- should the need arise again to reach nonfinancial corporates on a mass scale, i think we do need to spend some time in the next year or so thinking carefully

about what the best way to do that is. so dollar funding markets around the world benefit u.s. households and businesses substantially. and the reason is that they amount to lending that winds up showing up in consumer lending or business lending here in the united states. in addition there are very important markets and when they experience significant stress that tends to show up quickly in u.s. markets, particularly short term so they are very important in the world. our swap lines again did a good job of keeping those markets working and really serving the u.s. economy as well as the global economy i think there's a lot of gratitude and this comes with being the global reserve currency and a good economic citizen of the world but it really helps people in the united states a lot as well. it is not something we give to the world.

treasury facility -- i think you are talking about the fema facility, this is new. this is for countries that are not large enough or otherwise don't qualify for a swap line. it's just a place where they can turn their treasuries into cash. a big part of the risk off event at the beginning of the acute phase of the crisis was selling by sovereign owners of treasuries in quantity and there just wasn't the capacity to handle it in the private markets. and so a treasury repo facility would have taken up a lot of that it would be -- it was an important factor that is straight fiscal policy you can argue the need for that for countries in a permanent liquidity trap and that is not the united states. we have policy space we'll have policy space for interest rates fairly soon in the sweep of history

it'll take a few years but i'll take a pass on that one. >> okay. we are going to jump out of that a live conversation with jay powell and princeton university. a lot of headlines crossing on it i please be it seemed wonky at times but trust me the comments of the headlines jay powell made were market moving especially we saw stocks move at the very beginning. here are some of the key headlines right now. we are seeing stocks near record highs. they did dip a bit he was talking about inflation both welcome and unwelcome as well that will move markets down a bit. they have powered back up. the dow is up 108 points right now. we are seeing the ten year yield. any comments on fiscal policy, monetary policy, inflation, and of course interest rates could move treasuries. the benchmark ten year at 1.1% up 40% in a couple months on that yield something to watch the dollar

index. down slightly. had been up a couple days. all as we await president-elect joe biden's stimulus rollout at 7:15 eastern time tonight. that could be a market mover as well let's bring in a guest to sort of sum up all of what we just heard and get some ideas going forward. who better than jim paulson chief investment strategist, no doubt, jim, you were honed in on that commentary from jay powell. is there anything he said or implied that would make you change your investing strategy or best ideas right now? >> he says they're going to pull out every stop and keep the gas pedal to the floor as far as policy juice which is hard to get really negative on stocks or risk assets when you get that message. one of his big focuses he said was on returning to a strong job market i just wrote a piece this

morning i want to point out if i look at the broadest measure u-6 we are at 11.7% today and in five of the six recessions going back to 1980 we have blown above that unemployment rate and then brought it back down during the expansion. in the last three we were in the same unemployment rate in 1986, 1993, 2014 but our approach to it is radically different to take. back in those other pretimes we had an average ten year yield of 5.2% today a little over 1% back in those three previous episodes we had money supply that averaged 5.6% year and year and today it is 26% year on year back then we had average deficit to gdp ratios of 3.6% and today it's greater than 15%.

it's just massive. to me, what i -- what also bothers me is it sounds a little like the 1960s when we thought we fixed the business cycle and there were no concerns and no real long term fall out could get us we have to be most concerned about now. i think policy officials need to be a little concerned about the impact of over use and abuse of policies today and what impact it might have a couple years down the road >> i don't know how you get out of it at this point. let's not forget there are now six unelected private sit stens who control a balance sheet nearly the double size of the annual budget of the entire united states of america i say that with respect. i'm rooting for them because they cannot get it wrong there is too much out there. i called it earlier the honey badger market. it doesn't care.

rising covid, rising unemployment we've got rising rates of course we have an impeachment we have all this stuff coming on and yet the fed is -- the other thing over here which seems to be a harder scale balance is the fed going to outweigh everything else >> i think it is both fiscal juice which is just immense. a $2 trillion package last year. just had 900 billion that is going to hit in the first quarter and promising tonight probably another trillions dollar package you got to remember we grew 33% in real gdp in the third quarter and right now the atlanta fed gdp estimate for the third quarter just ended is almost 9%. when you give me $900 billion of additional fiscal stimulus hitting disposable personal income in this quarter i got to believe we'll have another big quarter this quarter i do think at some point that the policy officials may need to

step back and take a breath and try not to -- you know, solve today's problems but don't create even worse problems a couple years from now. it seems like they're heading down that road >> a lot of people need that stimulus, absolutely but a survey also showed that 70% of those surveyed said they're either going to save it or use it to pay off credit card debt that would not give the economy maybe that bump that it needs. we'll get you back on soon to talk about why you were supposed to be on about small caps and everything else. thanks take care, buddy outside of stocks the bit-sanity continues bitcoin surging again today after tanking a few days ago surging a few days after that. multi thousand dollar moves per day are now common place in the cryptos. is this a sign of growing risk or growing rewards and acceptance the pain we have to get through. joining me now to talk about it the coinshares ceo seeing record

inflows in its bitcoin related products, etps and other services jean-marie, welcome to the program. i know you gave an update a few weeks ago. how much in assets are you adding every week? can you tell us? >> hi. nice to be here. coinshare hit an all time high of $2.9 billion in the first few weeks of january >> okay. so we're seeing a huge amount of interest is that mostly from the institutional side or the retail investor side or fairly evenly split? >> well, it is a very interesting question because i've been doing cryptocurrency since 2013, through various ways and through this journey we have

seen the demand completely shifting from a very retail driven demand mainly trailing in asia to something moving much more to the u.s. and europe and graduating toward what could be qualified as i would say additional demand. you get the first conference call with investors. you get the fixed income cio of black rock making very strong -- for the new generation how to replace gold this morning from goldman there was a bit of a different approach still very strong. then citi giving very strong on bitcoin and finally very conservative like in the uk and also ill kating to bitcoin the demand is shifting and to

the very traditional investor. >> jean-marie, let me jump in. i apologize for the interruption i want to get this in. if the dow fell 4,000 points a day and then rose 4,000 points the next day for a number of days people would probably get spooked and say what is going on with stocks. bitcoin has been doing that and nobody seems to care i know the idea of bitcoin by the way is that it's independent and uncontrollable but i do wonder with 18.5 million coins or so mined only 21 million ever and big institutions stepping in are you worried it can be semiartificially bullied around by big hedge funds >> i don't think bullied around. we're going to run out 21 million coin -- a lot have been lost already. and just in the u.s. and north america you have 21 millionaires so, you know, at the global

scale we have a bit of an offer and demand imbalance which is manifesting by the demand we see in the market. buying every single in the market in the past when the market was tanking it was staying there for a while because no more demand and now there are a lot of people waiting for this move to enter the market and stop allocating >> you know, there is so much correlation in the price move. not just between the big four and five the ones you deal in. bitcoin, ethereum, litecoin, xrp, others. those are the big four or five but 40 get traded and on the smaller exchanges. they tend to move together though they are very different program languages in some cases, very different purposes. some of them are like bitcoin

being turned into currency while others like ethereum a currency on the block frame platform for ether. is there one that you personally favor over the others or that your clients seem to favor over the others or is it really just all about bitcoin? >> i think coinshares did a very good piece a couple years ago about the possible allocation in the assets and what kind of value added you get with diversification. the truth is there is a strong concentration in liquidity as you were mentioning and our client, you know, at many institutions we also favor liquidity in that institution decision >> do you see any correlation of inflow to your funds when bitcoin hits certain milestones? i know people make fun of the

media and probably rightfully so bitcoin 30,000 bitcoin 40,000 the number doesn't mean anything more than bitcoin 39999. it is just a nice headline when you see those headlines does that accelerate inflows >> the number doesn't mean anything in itself it is a relative value and a different number means different things to different people i'm still believing i would be able to bring my party hat for 40,000 tonight but we're not there. more importantly than the number itself is the metrics around the network which are very interesting. if you look at the spot trading volume, the 2017 market rally was very much a derivative driven rally through -- asia mainly driven platform and like this, 2021 movement is very much focused around how to get more physical coin in your wallet for lack of better word and i think you can see the cash market

volume multiplied by at least seven since august if you look at what the institutions who want to put their hands on bitcoin will look at you get some from sources and all this allocation is certainly happening through the cme. that is very important because i was part of the -- i was the committee to at first with the cme and this product has kept growing year on year and from december 2019 to december 2020 we just had two x on the volume but more important and more interesting is like what is happening to the large interest holder on this market? in the summer we hit an all time high and this number is interesting if you put it in perspective with gold and crude

oil. >> jean-marie i apologize again. i have to jump in. jay powell at the top sort of tightened the entire show. fascinating conversation though. certainly one that we will continue to have jean-marie, appreciate that. thank you very much. guggenheim also allocate org saying it could allocate up to 10% of its money into cryptos and we'll have more about that in a few minutes and on "power lunch" even more on the crypto chat grayscale whose huge bitcoin bet paid off, the ceo will be here at 2:00 p.m. put your money away, never think about it, never touch it just add more to it. however, a recent survey from personal finance magazine "kiplinger" and wealth management from "personal capital" found many people are ignoring that advice or to have to nearly 60% of americans withdrew or borrowed some money from their retirement accounts during the pandemic in part because the pandemic changed the rules to allow penalty free withdrawals many using the money for basic

expenses others maybe using it for tuition, home improvements or even buying boats joining us now is jay shaw president of personal capital. jay, welcome i want to ask you this and i mean it sincerely. i actually know somebody who pulled money out of their 401(k), people will say it's st stupid, penalty free, and bought bitcoin. it sounds ridiculous but it's happening. do we have any idea of the breakdown of retirement, people pulling money out? what exactly that money is going for? >> well, you stated the headline loud and clear you know, from the joint research, personal capital conducted with kiplinger's and 6 of 10 people are withdrawing money from these accounts. i think you also mentioned primarily that money is going into ordinary living expenses about 61% of it. about 40% is going into medical expenses

there are other rareas. home improvement, auto repairs we didn't see much with it going into bitcoin but these are people's retirement assets, the nest egg they've built up. many respondents have been saving money for decades to build this up and quite frankly the results we see from the survey are astounding. >> jay, again, when i look at the average 401(k) balance is $8,000 and the numbers you have is the average withdrawal is $75,000 so these are not, the pandemic has mostly cost sort of service workers their jobs they tend to not have much savings because they haven't made a lot of money. who are these people clearly wealthy, educated people that are pulling money out of their accounts >> i think that's right. when we look at the u.s. market place of investors clearly the front lines are incurring a lot of pain. the specific respondents to this survey are people in their 40s, 50s, 60s, people into their mid 70s. they are people very far along in their financial career so to

speak. they have over a hundred thousand dollars in median income they saved up over $300,000 in their nest egg we're talking about a segment of the population but as you say, greater than one-third of them have pulled money out of their retirement accounts in excess of $75,000 so they saved up this money over decades that math is about 25% of their portfolio they're drawing down, their retirement portfolio that they're drawing down >> going into housing. a lot of homes being built and imp improved on around here. got to imagine the money is coming from somewhere. the cares act saying you can take it out without penalty, it obviously spurred people to act. >> it sure did i mean, it gave people a hundred thousand dollars exemption to draw down their retirement account or take a loan against it as we said, you know, the data suggests from the survey that primarily it is for living expenses and also medical expenses some people really need the money. that is the biggest thing for us too on the survey. do people really need the money?

are they buying homes, improving homes? the reality of the situation is the majority of the american investors, these households, do not have a financial plan. they don't know their net worth. they don't know how much they're spending versus how much they're saying that is a concern. they're drawing down on this nest egg and the effect is over one-third of them believe they'll have to work longer as a result of that decision. >> probably will 81,000 taking loans and the only good thing is the loan you technically pay yourself back. we appreciate your time. retirement always an important topic. thank you very much. more important topics. sue herera is here with a cnbc news update. >> i am indeed good to see you. here's what's happening at this hour a new government report says the justice department failed to prepare properly before implementing its zero tolerance border policy in 2018. the report says the policy caused lasting emotional damage to thousands of children who

were taken away from their parents. in texas blue origin has successfully launched and landed its rocket meant for space tourism. while there were no passengers on this test flight of the new shepherd it did feature an upgraded crew capsule and rocket booster. nbc universal the parent company of cnbc is launching a journ journalist development program with universities and colleges serving people of color called nbcu academy $6.5 million will be invested in the initiative including $3.5 million in scholarships over the next two years. and in france a record price for that piece of art. that is a comic book art this pauntiinting for the cover tintin earned $3.1 million it spent years in a drawer

before being offered at auction. back to you. >> i believe that is the blue lotus. >> it is it is indeed and because it was so expensive to produce, it actually never went on commercial display because they didn't think they could actually charge enough to compensate the artist. so now you're up to date >> fascinating piece of belgian history somehow ending up in france it always does thank you very much. >> you got it, brian all right. ahead. will 2021 be the year of rising rates and maybe rising inflation? what could it mean for stocks? is bitcoin really going to 400,000? we'll ask all that of scott miner. look in the sky. a bird, a plane, no. it's your paper towels being delivered to your house. a lot more ahead on "the exchange."

a new king taking your chips off the table with a given stock, rent recovery, and drone delivery time for rapid fire. joining us today robert frank, michael santoli and, yes, contessa brewer with a big

story. we'll get to that. but first, bank of america naming google alphabet its top faang stock pick this year replacing netflix. they say alphabet has better margins and stands to benefit from the internet themes including a boost to e-commerce, advertising, expansion of 5g, blah, blah, blah alphabet is down slightly today but more than 20% the past year. your take on the call? >> it is a relative value call google, the stock has not done much for the last several months and is not at much of a premium if at all to the overall market. that is a rare thing in the nearly 20 years google has been a public company i feel it has a little cyclical boost coming because of advertising travel related stuff relative to netflix which has probably front loaded its gains. i don't think it is out of consensus but an interesting call on kind after quality name not as expensive as usual. >> big travel play, too. a lot of people searching for

hotels and restaurants that will come back. all right. next up, contessa get ready. loop capital says pen national gaming can't keep up with its hot streak down grading it to a sell saying the run lately has been unwarranted given that the bar stool app is only available in one state and that is pennsylvania it's been a red hot stock, cop be tessa the cfo leaving after less than a year a red flag, too. >> according to this analyst but on the same day i want to point out that barry jonas who has been a gaming analyst for a long, long time also raised the price target on penn from $85 to $120 are the valuations stretched of course they are penn is up 300% over 12 months is that a reason for a downgrade? well, if you look at what's happening here, penn is getting ready to launch potentially in michigan, which is getting ready to embrace online gaming

you're seeing explosive growth we had a research analysis out today by a payments company named pay safe they said covid has convinced more than 60% of sports bettors that it is safe to go online so coronavirus may have actually been a boon for sports gambling. not only that, if you're looking at 83% who planned to start sports betting this year, they haven't done so before, they say they have no affinity for a particular brand what makes a difference to them is how easily you can cash in and out. what the brand is like, whether there are promotions offered these are places where penn might capitalize >> they offer a lot of promotions contessa. you can go from fanduel, draft kings, golden nugget, all these things i know a lot of people that just move around because if they don't trade or bet for a while they get that promotional thing in the e-mail, free 20 bucks and a hundred dollar bet we shall see all right. by the way, contessa, i know you

are a person of great taste because we selected the same background for our shots genius >> i can see that. >> ai'm watching signs of life for the new york city rental market, frank. new data shows apartment rentals in manhattan nearly doubled in december that's right new leases soaring 94% compared to 2019. the largest gain in nearly a decade robert, has the escape from new york kurt russell theme been over played? >> i don't know if it's over played look, this is a case where the data is now less horrible. that doesn't mean it is a rebound or we're in a sudden recovery this is going to be a very long recovery for new york city but it is good news in december. we had a number of new leases nearly doubling. we had strong gains driven by a 17% decline in rental rates. when rents come down 17% you'll get a lot of people looking for

bargains on the other side of the balance sheet and weighing on all of this is the fact we still have 14,000 empty apartments in new york and if you add in all the stuff that's been held back in the market the shadow inventory it is probably more like 20,000 apartments still unrented and unlisted in new york so we've got a long way to go. maybe the first quarter could be a good sign. this is all being driven on the top end of the market on the sale side and the rental side all being driven by the wealthy and the high earners because they have been less affected by this pandemic. >> if anything maybe michael santoli they've saved money. meantime i saw a "journal" article. there is a billion dollars in unpaid rent in manhattan a lot of 25-year-olds probably saying you know what my landlord has been a jerk for three years. i'm outta here and i'm going to stiff him on the rent. >> no doubt about that also on the commercial side tremendous amount of unpaid rent i happen to be a one person channel check here in the market potentially for a new manhattan rental and the supply is amazing. we were just looking a few years

ago and the same places down 20%. no fees. all the rest of it so the market can come back but let's maybe wait until april for my own self-interest >> and you realize now you'll get like 600 calls from eager realtors maybe that's what you're looking for. michael santoli has a plan >> i'm okay with that. yeah >> always with a plan. i'm in the market looking for a discount all right. that sounded like a song l.a. officials announcing the creation of an urban air mobility partnership as a way to get folks used to seeing drones in the sky it comes after the faa loosened restrictions on flying drones in high population areas and at night. it means home deliveries from the sky, things like food, drugs, packages, toilet paper no longer just a far off fantasy. some big players ready to cash in like amazon, walmart, u.p.s contessa brewer, i believe you're up there in the country here's my problem with the drones by the way, a lot of this is

done at my alma mater virginia tech go hokies they're loud dogs bark. this is not a perfect solution it's a leaf blower in the sky. >> i mean, your dog barks at a drone? what does your dog do about the amazon delivery guy coming to your door? it seems to me like a drone -- >> loves it because he brings treat. >> a drone that takes off is a lot -- well, all right you have a very special guy there. i think this is the wave of the future and i think it is not just for drone delivery but other applications here as well. the real question as always is saw of the on the ground how do you make sure you don't have drones just falling out of the sky on top of people's heads or on the sidewalk i'm sure that is going to be figured out. two, what ways do we see this develop in a way that makes real financial sense for the companies involved because this is an expensive proposition to get off the ground >> i got it. i loved it

by the way, robert frank, a disco remake here it's not raining men according to contessa brewer it's raining drones will this work in manhattan? >> this is great look at manhattan. we already have cranes and scaffolding falling on our head. having a drone would be a pleasant change. also i don't know if you've been in new york city any time in the past six months but these giant pop up packaging centers where they have hundreds of packages on the street, amazon guy is about to deliver them, we've got to get rid of it drones are a great solution. and there is no traffic in the sky in manhattan so bring it on >> unfortunately i was a few weeks ago. i had the final inside meal that week and they shut everything down robert frank, contessa brewer, michael santoli. contessa brewer takes that round. see you next time on "rapid fire." still ahead guggenheim tweeting earlier this week bitcoins rise in the near term may be unsustainable and it was

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so your body can really truly absorb the natural goodness. that's what we do, so you can do you. new chapter wellness, well done. bitcoin has been on a tear surging about 250% of the past three months but as investors pile in wall street veteran issued a warning recently in a recent tweet said, quote, bitcoin's rise is unsustainable in the near term vulnerable to a setback. the technical upside of 35,000 has been exceeded. maybe time to take some money off the table. he has also said down the road in years bitcoin could be worth 400,000. joining us is scott minerd and as a part owner of the dodgers i know you are good friends with tommy lasorda so my sympathies

there, scott they have a new coach in heaven. welcome to the program your bitcoin 400,000 comment got a lot of attention was that tongue in cheek or do you mean it? >> no, no. i mean it. it was really interesting. it was a passing comment in an interview and to be honest with you, i could have said the united states government is bankrupt and the federal reserve is insolvent and bitcoin is going for 400,000 some day and they would have just talked about bitcoin which tells you something. it is telling you it is getting -- turning into a bit of a frenzy you can see, you know, a number of trading platforms are saying they're going to start limiting orders to buy bitcoin because they can't keep up with retail demand these are all signs of a frothy market and markets like this are prone to harsh setbacks but over the long run, it doesn't

undermine the bull case. >> the bull case is as we heard earlier 21 million will ever be mined. 18 million outstanding of that firms like guggenheim said in the future you may be able to allocate a certain percentage to the cryptos not just bitcoin if you have a lot of demand and very little supply, tesla had 5 million chairs outstanding instead of a billion tesla stock would probably be a million dollar equity. >> it's interesting. you're right i think ultimately the solution to the total valuation, just like splitting your stock. you know, bitcoin can decimalized down to eight places so we quote, you know, stocks for instance in dollars and cents and so it wouldn't be uncommon to decimalize this to

get into more tradeable sizes and pieces and a price that wouldn't be as crazy as $400,000 >> just like the stock splits or people have the same stock but half so cheaper so people can buy in let's move on. we had federal reserve chair jay powell on in sort of a live one-on-one interview with princeton university hitting on a lot of topics. we focus a lot on inflation. i certainly have but unemployment sounds like it may be more important to them. do you believe the federal reserve will either keep rates low and/or keep their bond buying program going until employment is maximized? >> well, that is a great question i think they're going to face a hard time tapering as we've seen over the last week

of course over the last couple days they've sort of started to walk it back what's going on in the bond market in the backup we've had is not something they want to see. and so they want to, you know, i think calm the markets down to realize they're not going to taper soon your question really is about what is the sequencing of taper versus unemployment versus raising rates? i think they have learned from their experience of raising rates while reducing the size of the fed balance sheet was not a very successful operation in 2018, so the question now is what is the threshold for unemployment before they begin to taper, and if they are not seeing inflation pressures, the will let unemployment go to 3% before tapering -- >> that could be years

what is interesting in the new paradigm of theirs is that 2% is an average okay, that's great if they are going to try and make up for, you know, how much inflation has stayed under 2% for the last ten years they can run the inflation rate fairly hot for a number of years before they get overly concerned. >> yeah. >> about addressing it as long as unemployment continues to fall >> you think that continues equities moving higher throughout the years, scott, or is there some risk we're not talking about? >> well, there are risks all over, brian. i think people know that i am a pretty conservative guy, but right now, you know, given the fed purchase program, the idea that we are going to get a lot of stimulus out of washington, you know, i think that stocks have a green light and i probably would think that at least through the end of the first quarter it's a pretty safe

place to be investing money, i mean, on a relative basis. >> all right, and before we let you go, scott, you always have some of these unusual -- i know we talk about bitcoin because to your earlier point, it gets the attention of the equity markets and bonds but there's lots of ways to make money with higher rates and a weaker dollar, and could be a good scenario with different types of credit, and we talked about airline leases and bank loans, is there one sort of smaller less talked about part of the market that you and your team are finding a little interesting right now >> well, you know, i think that the securitization market with the level of where airlines secured by aircraft a very low loan to value is trading at fairly distressed levels

single-a, triple-b rated airlines can be traded at 4%, and there have been more bonds that have come to market at 2 5/8. >> all right, i love the unusual idea because it's a good segue into our next guest, and scott, our condolences for tommy lasorda, he had a great life and bled dodger blue the entire way. thank you for coming on. >> thank you >> speaking of airlines, airline stocks catching a little

tailwi tailwind today the faa issued a rare order to step up against unruly passengers phillip spoke earlier today and joins us now >> it's a crackdown, and they will get hard core in terms of dealing with these people. here's the new policy from the faa. they are no longer going to be putting up with some of this and warning people, zero tolerance, possible jail time, up to a $35,000 fine here's steve dixon talking with us this morning about why the faa is cracking down on unruly passengers >> this is about flight safety, and anytime i see -- anytime we see a trend like this we need to take action, because traveling

on a commercial airline in the united states is the safest form of travel in human history, and i want to make sure it stays that way >> airlines are taking steps, and among those steps, take a look at united airlines, just in the last week put 60 passengers on its do not fly list or within the airline they will not be able to fly, and meanwhile delta is increasing security for its flights and no longer checking firearms for passengers going into d.c., and only law enforcement officers are allowed to check firearms. this is earlier on ""squawk box"" >> we are all on high alert based on the events the last couple of weeks in washington, and we are doing a lot in terms of gathering information and talking to the intelligence agencies as well as federal and local, and we have increased the amount of security, both in the airports and in the sky, seen

and unseen >> by the way the new policy from the faa will last through march 30th bottom line is this, brian, the airlines and faa and law enforcement in the d.c. area will not put up with anybody that wants to act up at the airport or on flights to d.c >> so it's temporarily and ends march 30th, and they can always extend it. we have seen a lot of videos people getting into fist fights because one ding-dong won't put on a mask. >> that's a lot of this, and it's not politically oriented, they have been complaining about putting on their mask. that rule has been in place for sometime and now the airlines are saying, look, we will continue to ban you from flying on us if you are not going to wear a mask, you have to wear it and comply with what the crew tells you to do when you are onboard. >> it's not that bad

i have flown and you have flown, and you put it on and forget you have it on after a while appreciate it >> you bet that wraps it up for "the exchange" went fast, right we have seen stocks have big moves on these days, not all of them but some, and remember those gamutsqueezes we talked about last summer, and some say it could happen tomorrow, not will but could, so pay attention. tomorrow could be a volatile day in the equities. coming up on "power lunch," a debate ahead

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welcome to "power lunch. josh brown is going to join me for the hour in just a minute. here's the 2:00 takeout. the dow hitting record highs even with the number of americans filing for jobless claimson the rise as wall street waits for president-elect biden to unveil his stimulus plan later