WEBVTT - Former SEC Chair Gary Gensler Talks Private Credit

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. With that question, this

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<v Speaker 1>is the interview of the day for Global at Wall Street. Paul,

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<v Speaker 1>can I dare say it's the interview of the month.

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<v Speaker 1>I'll go with that. We'll go with that. Gary Gensler

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<v Speaker 1>has a sterling effort of hard work and academic excellence

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<v Speaker 1>across his career, spanning from a look at media and

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<v Speaker 1>mergers and acquisitions with Golden Sachs onto his public service,

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<v Speaker 1>wearing numerous hats for the United States of America, recently

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<v Speaker 1>a chairman of the Securities and Exchange Commission, and he

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<v Speaker 1>joins us in studio. Thank you for joining Bloomberg.

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<v Speaker 2>Today, Tom Paul, It's wonderful to be with you. You're

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<v Speaker 2>a little exaggerating about me, but I'll take it.

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<v Speaker 1>We'll take it.

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<v Speaker 3>Well.

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<v Speaker 1>We do that as we can. You have the privilege

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<v Speaker 1>of a podcast with one of my favorite people. Simon Johnson,

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<v Speaker 1>was my book of the summer two thousand and eight,

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<v Speaker 1>two nine, and his little monograph thirteen Bankers, It's distilled

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<v Speaker 1>your chaos. It was your fault. We had the credit

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<v Speaker 1>of seven and Simon Johnson, Lobel laureate did it. Here

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<v Speaker 1>is Simon Johnson in thirteen Bankers, and I will take

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<v Speaker 1>credit for really making this public the SEC Final Rule

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<v Speaker 1>Alternative net Capital Requirements for Broker Dealers August twenty, two

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<v Speaker 1>thousand and four, And three years later, that third week

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<v Speaker 1>of August oh seven, libor Ois went out four standard deviations.

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<v Speaker 1>Are we doing it again with private credit? Look?

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<v Speaker 2>I won thank you so much, and it's wonderful to

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<v Speaker 2>be partnered up with Simon Johnson on our new podcast,

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<v Speaker 2>Power and Consequences. A little audacious because in the world

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<v Speaker 2>of economic minstrels, do we need another two folks you know,

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<v Speaker 2>out there doing podcasts. But we're going to have some

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<v Speaker 2>fun with it and speak about that. Look, in terms

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<v Speaker 2>of private credit, I think that it's there's some risks there,

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<v Speaker 2>but it's a small part of our overall capital markets.

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<v Speaker 2>Don't us capital markets what one hundred and fifty trillion

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<v Speaker 2>or so, and this is a two trillion dollar corner.

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<v Speaker 2>But there are some risk and I'm sure we'll get

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<v Speaker 2>into it, particularly because they've offered to retail investors, high

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<v Speaker 2>net worth individuals what's called the wealth channel, to be

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<v Speaker 2>part of this, and the wealth channel is turning on it.

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<v Speaker 2>They're saying we don't want to. We don't want to

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<v Speaker 2>be in here as much can we redeem out? And

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<v Speaker 2>that's a little hard.

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<v Speaker 1>How do you respond to people that blame you as

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<v Speaker 1>SEC chairman for opening up the door to this retail

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<v Speaker 1>investment in esoteric things like bigcoin and others. But also, Paul,

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<v Speaker 1>how would you phrase it a liquid private credit or

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<v Speaker 1>less liquature? They blame Gary gainst the chairman, Gainstler, it's

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<v Speaker 1>your fault. How do you respond to that?

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<v Speaker 2>That's a new one. I hadn't heard that top.

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<v Speaker 1>It's in the Zeist's Chunseler and Biden. Let this happen.

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<v Speaker 2>I repond, I firms, alternative asset managers and private equity

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<v Speaker 2>and private credit and hedge funds, real estate and so

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<v Speaker 2>forth have been around, you know, really for fifty years

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<v Speaker 2>in the direct lending space. That started in two thousand

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<v Speaker 2>and eight to twenty twelve. Mark Rowan started Apollo, Steve

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<v Speaker 2>Schwartzman with Blackstone. They were building big engines, and it

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<v Speaker 2>was already probably when I got there, at least approaching

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<v Speaker 2>a trillion dollars. So I just think that that that

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<v Speaker 2>was something that was.

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<v Speaker 1>Already was it? You haven't your four oh one k right.

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<v Speaker 1>Of course.

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<v Speaker 3>One of the things I noticed, Rob is when we

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<v Speaker 3>do go out and talk to registered investment advisors, and

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<v Speaker 3>we do that a lot of Bloomberg Radio, we go

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<v Speaker 3>out to our sponsors. I'm shocked at the ras at

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<v Speaker 3>the allocation to alternative investments. I would have thought it

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<v Speaker 3>was five percent. They're talking twenty thirty forty percent. They're

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<v Speaker 3>talking like they're in an endowment.

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<v Speaker 2>Look, I think that's where we have the risk. It's

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<v Speaker 2>a structural risk. Alternative asset managers, private credit amongst them,

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<v Speaker 2>are bringing in institutions, sovereign wealth funds like insurance companies,

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<v Speaker 2>and then about a third of private credit the investors

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<v Speaker 2>are everyday investors. Lloyd Blankfind said it well. He was

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<v Speaker 2>asked recently about it. He says, I don't care why

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<v Speaker 2>they're doing this. When this goes down the institutions Washington, No,

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<v Speaker 2>I don't care about but when it goes down for

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<v Speaker 2>private individuals, it's going to be bad.

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<v Speaker 1>If you said, with the celebration of mister Blankfind's book,

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<v Speaker 1>how many book parties does he having? You ben to them? All? Right?

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<v Speaker 2>No, But Lloyd and I we were at Going and Sachson,

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<v Speaker 2>we were honored to make partner together. So he's a

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<v Speaker 2>very clever and funny individual.

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<v Speaker 3>So I just preferred to Garry as Rob. You know

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<v Speaker 3>why I did that. His twin brothers Robin, that's the right.

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<v Speaker 3>He's a buddy of.

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<v Speaker 2>Marketing, my identical twin brother Rob.

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<v Speaker 3>Yes, Price's he's the guest across.

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<v Speaker 1>America with this Garry Gunsel, the former chairman of the

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<v Speaker 1>SEC and celebration of his podcast with the Laureate Simon Johnson.

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<v Speaker 1>It's Sloan Paul Sween.

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<v Speaker 3>So Gary, the investors have been dealing over the last

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<v Speaker 3>three four weeks with all the issues going on in rants,

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<v Speaker 3>whipping around energy markets, whipping around all kinds of risk markets.

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<v Speaker 3>How do you view that when you talk to investors,

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<v Speaker 3>I'm sure they come up to you and say, what

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<v Speaker 3>do I do here? Because it's so much stuff I

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<v Speaker 3>don't understand.

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<v Speaker 2>Perhaps, look, it's it's multiple shocks. It's shocked to the

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<v Speaker 2>energy markets, as we know. And I would look in

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<v Speaker 2>energy markets not at the current price. I'd look at

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<v Speaker 2>this September and December prices for both oil and for

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<v Speaker 2>natural gas. I'd look at fertilizer pricing and right now

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<v Speaker 2>probably we're going to have higher prices for agriculture in

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<v Speaker 2>the fall because the fertilizer pricing has gone up doubled

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<v Speaker 2>in the last few weeks and this is spring planting time.

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<v Speaker 2>I think it's also is going to hollow out some

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<v Speaker 2>of our longer term growth. Like we've remarkably resilient economy.

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<v Speaker 2>Jason Furman just wrote about this in the New York Times,

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<v Speaker 2>but I do think that our longer term growth rate

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<v Speaker 2>is now clinked down a little bit more. And so

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<v Speaker 2>i'd be worried about multiples in the equity markets when

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<v Speaker 2>you have lower growth.

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<v Speaker 3>If you're at if you were back at the SEC,

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<v Speaker 3>what would be your primary issue worry to do item?

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<v Speaker 2>Maybe, so I would be getting the team together and say,

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<v Speaker 2>what do we know and can you pulse the various

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<v Speaker 2>large banks, the JP Morgans and Goldman's about what's called

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<v Speaker 2>prime brokerage where they have trillions of dollars loaned out

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<v Speaker 2>to hedge funds. And then also i'd ask the bank regulators,

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<v Speaker 2>how does it look about their loans to private credit.

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<v Speaker 2>We recently saw JP Morgan remarking those loans to private credit.

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<v Speaker 2>I'd want those interconnections to prime brokerage hedge funds and

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<v Speaker 2>the banks to the private credit space.

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<v Speaker 1>Tell me about the hedging risk here I brought up

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<v Speaker 1>the last couple of days, and all of this works

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<v Speaker 1>off At New York University, Professor Roman Friedman has been wonderful.

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<v Speaker 1>There's a hedging and Greenspan would speak about this and

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<v Speaker 1>celebration folks of his one hundredth birthday. We have hedging.

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<v Speaker 1>There's a price to hedging always and then oops, things

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<v Speaker 1>go bad and within a hedge or out there a

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<v Speaker 1>rehdge or dariusay out again, what is our risk right

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<v Speaker 1>now of there's a point where you have to rehdge,

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<v Speaker 1>you have to restructure all these derivative instruments.

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<v Speaker 2>Well, that is always a risk, particularly if a firm fails,

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<v Speaker 2>and that's what we would look at when I was

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<v Speaker 2>at US Treasury many years ago and long term capital

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<v Speaker 2>management failed. So everybody has to rehatch. So when there's

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<v Speaker 2>breakage in the system, it's as you just said, the

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<v Speaker 2>rehadch for the listeners. A bank is counting on its

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<v Speaker 2>counterparty to be there tomorrow. But when the counterparty disappears,

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<v Speaker 2>then they have to take that whole position right and rehadge.

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<v Speaker 1>The certitude of the street. Gary Gunsler, is we fix

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<v Speaker 1>this in seven eight the big banks are not exposed,

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<v Speaker 1>but then they're the others. What are the shadows of

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<v Speaker 1>the others that you're focused on.

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<v Speaker 2>I do think that the big banks have better capital position,

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<v Speaker 2>are more resilient twenty twenty six than two thousand and seven.

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<v Speaker 2>But I do look at the significant leverage that's the

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<v Speaker 2>borrowing in the hedge fund community, and yes, the interconnection

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<v Speaker 2>between the banks and the alternative investors of the private

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<v Speaker 2>credit space. And now back to just private credit, we

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<v Speaker 2>or going to see some disruptions. I mean, AI is

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<v Speaker 2>changing the world right now right, and if it's a

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<v Speaker 2>fast change, that means valuations are going to change a lot.

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<v Speaker 2>This is like a Barbell economy. If AI goes really well,

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<v Speaker 2>that means some valuations, whether it's in software other fields,

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<v Speaker 2>have to decline.

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<v Speaker 1>Crypto.

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<v Speaker 3>Have we gained more any clarity on who is regulating it,

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<v Speaker 3>who should regulate it, to what degree should be regulated?

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<v Speaker 3>Where are we on net?

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<v Speaker 2>I think those are going to be questions that you'll

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<v Speaker 2>have for my honored successor, Paul Atkins and others. But

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<v Speaker 2>the American public, you know, they seem to be even

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<v Speaker 2>more focused on prediction markets than crypto right now. So

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<v Speaker 2>the investing public, I'm not saying they've moved on, but

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<v Speaker 2>there's been a new darling at this little casino.

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<v Speaker 3>One of our colleagues of Bloomberg Television was just interviewing

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<v Speaker 3>the CEO one of these prediction markets and adamant that

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<v Speaker 3>it is not gambling.

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<v Speaker 2>Okay, yeah, there's no gambling in this town.

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<v Speaker 1>Right, No come out, And I'm not going to blame

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<v Speaker 1>this on you, but I'm sorry, there's this huge thing

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<v Speaker 1>I gotta make some news this morning. Do you look

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<v Speaker 1>at these prediction markets as gambling, mister Gensler.

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<v Speaker 2>What parts of it are?

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<v Speaker 1>Sure?

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<v Speaker 2>Look, there's parts of it that is just hedging economic risk.

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<v Speaker 2>But now you go all the way over to the

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<v Speaker 2>sports world, and the sports world that's just gaming.

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<v Speaker 1>It is. I'm going to go mental here. Raphael Hour

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<v Speaker 1>at the Bank of International Settlements has written the smartest

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<v Speaker 1>stuff I've seen on a broader statement of bitcoin. They

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<v Speaker 1>did a paper, eight single sentence, single spaces, eight pages

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<v Speaker 1>of detail on the speculation within these markets. I mean

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<v Speaker 1>it's basically a casino like people voting against Duke and basketball.

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<v Speaker 1>I don't see Penn in the did you see the

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<v Speaker 1>University of Pennsylvania in the bracket? Wait?

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<v Speaker 2>Wait, wait, that's my all my mind? Are you eating Yaleen?

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<v Speaker 1>Did you see this? I saw them? Are you in

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<v Speaker 1>the second or third row at the game?

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<v Speaker 2>I don't want to give that up, Tom, But look,

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<v Speaker 2>I mean, investors can be taking a bet on things,

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<v Speaker 2>even when they're betting on an individual stock. But there

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<v Speaker 2>are parts of the prediction markets, and they're parts of

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<v Speaker 2>the cryptocurrency markets that are just pure, pure speculation. And

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<v Speaker 2>so you know, how do we protect the investing public

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<v Speaker 2>in those worlds? How do we protect the investment public

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<v Speaker 2>and prediction markets or in the cryptocurrency markets? And importantly,

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<v Speaker 2>how do we protect the integrity of the underlying the elections?

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<v Speaker 2>How do we protect the integrity that government actors aren't

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<v Speaker 2>leaking information so that you can make a bet in prediction?

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<v Speaker 1>Mark? Okay, So Lexus's great grandmother took bitcoin from thirty

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<v Speaker 1>thousand up to one hundred and ten thousand.

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<v Speaker 2>Your great grandmother, I love that.

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<v Speaker 1>About three years old, Gary, Come on, we've gone from

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<v Speaker 1>one hundred and ten thousand whatever on bitdog back down

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<v Speaker 1>to where are we seventy four thousand today? Should should

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<v Speaker 1>four one case, should Ira Should Grandma's be playing with

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<v Speaker 1>these fancy things where we question.

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<v Speaker 2>The underlying Look, we we let the investing public invest.

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<v Speaker 2>We're merit neutral. That's our system. I believe that's a

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<v Speaker 2>good system. However, we sort of have to have transparency.

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<v Speaker 2>We have to have market integrity, right, and we have

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<v Speaker 2>to make sure that people protect those investors that they're

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<v Speaker 2>not getting picked off.

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<v Speaker 1>Okay, Paul wants to jump in. I got one more question.

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<v Speaker 1>I'm going to shut up, Gary Gensel. You mentioned transparency.

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<v Speaker 1>How should we mark the market private credit? I mean,

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<v Speaker 1>is it by appointment? I mean, help me here.

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<v Speaker 2>That's the challenge at this If it were just a

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<v Speaker 2>pure institutional market, it was some sovereign wealth run from

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<v Speaker 2>Katar investing in private credit. And by the way, that

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<v Speaker 2>might also change the valuations. What's happening in Iran could

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<v Speaker 2>be a little less money from sovereign wealth funds. But

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<v Speaker 2>your question, I think it's hard when you have the

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<v Speaker 2>general investing public and as you said in four to one,

0:13:08.640 --> 0:13:13.920
<v Speaker 2>K's or rias and I think that's a very challenging

0:13:13.960 --> 0:13:17.520
<v Speaker 2>and I would say problematic part of this private credit space.

0:13:18.080 --> 0:13:22.400
<v Speaker 3>Bloomberg News has had a good story yesterday about quarterly

0:13:22.440 --> 0:13:25.840
<v Speaker 3>reporting for financial results for public companies. Europe and other

0:13:25.840 --> 0:13:27.800
<v Speaker 3>parts of the world do it twice a year. We

0:13:27.920 --> 0:13:30.559
<v Speaker 3>do a quarterly. What's your view there.

0:13:30.800 --> 0:13:33.760
<v Speaker 2>I'm very clear on this. I think it's one of

0:13:33.760 --> 0:13:38.640
<v Speaker 2>the parts of the US capital exceptionalism, our capital market

0:13:38.720 --> 0:13:42.040
<v Speaker 2>since nineteen thirty nine. The New York Stock Exchange put

0:13:42.040 --> 0:13:45.200
<v Speaker 2>this in the nineteen thirties. And you're saying, not everything

0:13:45.200 --> 0:13:48.640
<v Speaker 2>in the nineteen thirties, mister Genzer is good. This is good.

0:13:49.320 --> 0:13:53.400
<v Speaker 2>And yes, it's a little bit for the c suite. Yeah,

0:13:53.480 --> 0:13:55.160
<v Speaker 2>is it a little bit of friction? Is it a

0:13:55.160 --> 0:13:57.400
<v Speaker 2>little bit like, oh, I have to meet with the analysts,

0:13:57.440 --> 0:13:59.920
<v Speaker 2>I have to hear Tom Keane talk about my company.

0:14:00.440 --> 0:14:05.120
<v Speaker 2>But overall, it creates so much public good. It helps

0:14:05.160 --> 0:14:09.160
<v Speaker 2>our economy, it helps investors, it helps the media. It does.

0:14:09.320 --> 0:14:12.080
<v Speaker 2>But it's really an important piece. I wouldn't want to

0:14:12.080 --> 0:14:12.640
<v Speaker 2>give that up.

0:14:12.720 --> 0:14:15.000
<v Speaker 3>Yeah, you know, it's a former self side equity researchannel,

0:14:15.040 --> 0:14:16.400
<v Speaker 3>so it was four times a year you had to

0:14:16.440 --> 0:14:19.160
<v Speaker 3>gear up up. But arguably that is a backlone. The

0:14:19.200 --> 0:14:22.280
<v Speaker 3>transparency one of the reasons that our capital markets are

0:14:22.280 --> 0:14:23.000
<v Speaker 3>as deep as they are.

0:14:23.400 --> 0:14:25.120
<v Speaker 1>You did media years ago.

0:14:25.000 --> 0:14:28.240
<v Speaker 2>Right, Yeah, I advise the companies. Yeah, so I helped.

0:14:28.480 --> 0:14:30.880
<v Speaker 2>I helped media companies buy and sell each other, the

0:14:30.880 --> 0:14:35.720
<v Speaker 2>big newspaper companies, the new houses, the Yes.

0:14:35.360 --> 0:14:38.640
<v Speaker 1>Okay, so ZEVs loves Pocket and seven hundred million office

0:14:38.680 --> 0:14:42.160
<v Speaker 1>transaction Sweeney's expert on as I'm the dumbest one in

0:14:42.240 --> 0:14:45.400
<v Speaker 1>the room, your thoughts here on the media roll up,

0:14:45.920 --> 0:14:48.880
<v Speaker 1>in the politics of it, the idea of the White

0:14:48.880 --> 0:14:51.840
<v Speaker 1>House directly involved, mister Atkins, I don't think is weighed

0:14:51.880 --> 0:14:53.640
<v Speaker 1>in on this, which is I know you don't want

0:14:53.640 --> 0:14:57.200
<v Speaker 1>to comment on that, but but just your Gary Gonsler

0:14:57.360 --> 0:15:00.160
<v Speaker 1>media thoughts on our media roll up.

0:15:01.880 --> 0:15:04.920
<v Speaker 2>I think it's we were in a better system and

0:15:04.960 --> 0:15:08.080
<v Speaker 2>a better rule of law when these decisions were not

0:15:08.200 --> 0:15:10.320
<v Speaker 2>made and the White House. They were made at a

0:15:10.360 --> 0:15:13.720
<v Speaker 2>federal communications commission. If they're made at all. A lot

0:15:13.760 --> 0:15:16.920
<v Speaker 2>of buying and selling of newspapers aren't done at the

0:15:16.920 --> 0:15:21.200
<v Speaker 2>federal level. Buying and selling of radio stations technically are,

0:15:21.280 --> 0:15:23.960
<v Speaker 2>but they're really done away from that. I think that's

0:15:24.000 --> 0:15:27.000
<v Speaker 2>a much better way, and you have rules of the

0:15:27.080 --> 0:15:29.720
<v Speaker 2>road and you stick to them. The idea of a

0:15:29.760 --> 0:15:33.720
<v Speaker 2>White House picking winners and losers, that's not good for

0:15:33.760 --> 0:15:36.000
<v Speaker 2>the rule of law nor for our economy.

0:15:36.560 --> 0:15:39.800
<v Speaker 3>One of the when President Trump his second term began,

0:15:39.920 --> 0:15:42.520
<v Speaker 3>one of the themes was, boy, this is going to

0:15:42.520 --> 0:15:45.680
<v Speaker 3>be really good for the financial services industry writ large,

0:15:46.120 --> 0:15:49.200
<v Speaker 3>maybe taking down some of the regulatory risk, maybe allowing

0:15:49.240 --> 0:15:50.160
<v Speaker 3>some consolidation of.

0:15:50.240 --> 0:15:52.880
<v Speaker 2>Region, lowering, lowering taxes on the company.

0:15:52.960 --> 0:15:57.760
<v Speaker 3>Since actually, how do you view the regulatory overview of

0:15:57.800 --> 0:16:00.640
<v Speaker 3>the financial services industry today? Does anything need changes that

0:16:00.720 --> 0:16:02.000
<v Speaker 3>need to be losing tightened?

0:16:02.720 --> 0:16:06.080
<v Speaker 2>Look, there's an EBB and flow. Elections have consequences, as

0:16:06.080 --> 0:16:09.400
<v Speaker 2>they should, and so there's that EBB and flow. I

0:16:10.040 --> 0:16:13.600
<v Speaker 2>more am concerned. And the longer term that as the

0:16:13.760 --> 0:16:16.840
<v Speaker 2>US has stepped back from our leadership around the globe,

0:16:17.720 --> 0:16:21.520
<v Speaker 2>that our capital markets stay the sweet spot that everybody

0:16:21.600 --> 0:16:22.640
<v Speaker 2>wants to be at.

0:16:23.160 --> 0:16:25.840
<v Speaker 1>Gary Guesser, one final question here before we let you

0:16:25.880 --> 0:16:29.360
<v Speaker 1>start your morning here in Manhattan. You have so much

0:16:29.440 --> 0:16:31.880
<v Speaker 1>experience at this You've seen the good in the bad.

0:16:31.920 --> 0:16:35.560
<v Speaker 1>We had Disney with a succession yesterday two days ago.

0:16:36.000 --> 0:16:41.080
<v Speaker 1>How do you do executive succession correctly? With all that

0:16:41.120 --> 0:16:44.760
<v Speaker 1>you've you know, Goldman Section others frankly at the SEC,

0:16:44.800 --> 0:16:47.960
<v Speaker 1>how do you do executive succession? Look? Correctly.

0:16:49.040 --> 0:16:52.920
<v Speaker 2>Look, it's hard. Simon Johnson and I just started this podcast,

0:16:52.960 --> 0:16:55.480
<v Speaker 2>Power and Consequences. We don't know who would step in

0:16:55.560 --> 0:16:59.000
<v Speaker 2>behind Simon or May is just a small little podcast.

0:16:59.280 --> 0:17:02.200
<v Speaker 2>But when you're at a big company, you really have

0:17:02.280 --> 0:17:05.240
<v Speaker 2>to have succession planning. And Tom, you're terrific at the show.

0:17:05.320 --> 0:17:08.399
<v Speaker 2>You have to have succession planning, even for this show,

0:17:09.000 --> 0:17:12.959
<v Speaker 2>and that's a responsibility you have to your shareholders and

0:17:13.000 --> 0:17:16.199
<v Speaker 2>to have that set up. But then it's hard because

0:17:16.200 --> 0:17:19.040
<v Speaker 2>some of the most talented c suiteters don't want to

0:17:19.080 --> 0:17:23.639
<v Speaker 2>stick around. You know, Jamie Diamond terrific run that firm

0:17:23.680 --> 0:17:27.040
<v Speaker 2>for a long time. Well you've seen loads of really

0:17:27.080 --> 0:17:29.560
<v Speaker 2>good folks in his senior suite say no, I'm going

0:17:29.640 --> 0:17:31.879
<v Speaker 2>to I want that opportunity in my mid fifties to

0:17:31.920 --> 0:17:35.000
<v Speaker 2>go run something. So that's but you have to start

0:17:35.000 --> 0:17:37.240
<v Speaker 2>with that. The board of directors also has to be

0:17:37.440 --> 0:17:39.760
<v Speaker 2>very involved, and so we need this succession.

0:17:39.840 --> 0:17:44.520
<v Speaker 1>Should we have more people writing an annual note like

0:17:44.640 --> 0:17:48.480
<v Speaker 1>mister Diamond, I have a very strong feeling or we should.

0:17:48.560 --> 0:17:51.800
<v Speaker 2>But let me ask you, well, look you bofeed Jamie

0:17:52.280 --> 0:17:53.480
<v Speaker 2>right now, I hear.

0:17:53.880 --> 0:17:57.879
<v Speaker 1>To see also this managed pr event with forty seven

0:17:57.920 --> 0:18:02.760
<v Speaker 1>people around a massaging paragraph message. It's blowney. We need

0:18:02.880 --> 0:18:04.200
<v Speaker 1>it's better to know what they think.

0:18:04.240 --> 0:18:07.240
<v Speaker 2>And they're using AI now so sometimes as messages or

0:18:07.280 --> 0:18:08.400
<v Speaker 2>AI slop too.

0:18:09.520 --> 0:18:13.480
<v Speaker 1>But do I got AI in your class? T Oh,

0:18:13.560 --> 0:18:14.040
<v Speaker 1>good question.

0:18:14.240 --> 0:18:17.960
<v Speaker 2>Oh it's everywhere, Tom. The students are using it and

0:18:17.960 --> 0:18:21.240
<v Speaker 2>and I don't use it to grade students, but I

0:18:21.400 --> 0:18:26.240
<v Speaker 2>do use artificial intelligence to do research, to challenge to

0:18:25.600 --> 0:18:29.840
<v Speaker 2>to to uh so, So I don't think you can

0:18:29.880 --> 0:18:32.359
<v Speaker 2>say in a classroom, oh oh, we're going to ban it.

0:18:32.400 --> 0:18:32.600
<v Speaker 1>No.

0:18:32.680 --> 0:18:35.800
<v Speaker 2>This is the calculator came along when I was a kid.

0:18:36.040 --> 0:18:39.560
<v Speaker 2>We use it. The Internet came along, we use Here's

0:18:39.640 --> 0:18:42.960
<v Speaker 2>the thing, students, if you're listening, you have to command it.

0:18:43.280 --> 0:18:46.639
<v Speaker 2>You have to challenge it. Don't let AI command you.

0:18:47.359 --> 0:18:50.280
<v Speaker 2>Uh you you you have to stay ahead of that.

0:18:50.440 --> 0:18:53.520
<v Speaker 2>I call it the AI bear will get you unless

0:18:53.560 --> 0:18:56.800
<v Speaker 2>you really run faster and challenge.

0:18:56.359 --> 0:19:00.960
<v Speaker 1>The anal final question YEP the time final final final

0:19:01.080 --> 0:19:03.560
<v Speaker 1>question with Gary Gensler. Are we going to see an

0:19:03.680 --> 0:19:06.960
<v Speaker 1>AI roll up? There's just too many smart people running

0:19:07.000 --> 0:19:11.120
<v Speaker 1>around not making money. Axios was brilliant on this yesterday.

0:19:11.200 --> 0:19:12.720
<v Speaker 1>Are we going to see an AI roll up?

0:19:12.920 --> 0:19:15.080
<v Speaker 2>I think it's gonna. It is a field while you

0:19:15.359 --> 0:19:18.640
<v Speaker 2>see winner take most, meaning there's going to be one

0:19:18.760 --> 0:19:22.480
<v Speaker 2>to two big Michael Mobson models in the US and

0:19:22.640 --> 0:19:26.119
<v Speaker 2>one to two big Consequence models in China. I'd be

0:19:26.280 --> 0:19:29.040
<v Speaker 2>worried about China because China is doing more and open

0:19:29.280 --> 0:19:34.760
<v Speaker 2>weight open We're going to have wide distribution of this

0:19:35.040 --> 0:19:40.040
<v Speaker 2>and dispersion of this. So my eye on the geopolitical

0:19:40.119 --> 0:19:42.560
<v Speaker 2>thing is do never count China out.

0:19:42.760 --> 0:19:46.520
<v Speaker 1>One final, final, final, final question. Is Rubinstein doing okay

0:19:46.600 --> 0:19:48.840
<v Speaker 1>with the Orioles, I mean bringing in Alonzo and all.

0:19:49.880 --> 0:19:53.360
<v Speaker 2>I don't have a view of that. No, David's had

0:19:53.400 --> 0:19:54.840
<v Speaker 2>a lot of fun with the Orioles.

0:19:54.920 --> 0:19:57.080
<v Speaker 1>I know that he sits down front. You look at

0:19:57.119 --> 0:19:59.440
<v Speaker 1>the game and he's down front of the cheap scenes.

0:19:59.520 --> 0:20:02.560
<v Speaker 3>I'll tell you there, Blucark stands the test of time.

0:20:03.119 --> 0:20:06.919
<v Speaker 2>Still, there is David who's run a big alternative asset

0:20:07.040 --> 0:20:11.000
<v Speaker 2>management firm, Carlisle. He hasn't sort of been as troubled

0:20:11.040 --> 0:20:13.680
<v Speaker 2>in that private credit space. He has the earls. He

0:20:13.840 --> 0:20:16.240
<v Speaker 2>has kind of this version of a podcast where he

0:20:16.280 --> 0:20:19.200
<v Speaker 2>does his interviewers, I mean talk about and he served

0:20:19.280 --> 0:20:22.639
<v Speaker 2>in the American public. He served the public, So there's

0:20:22.680 --> 0:20:25.600
<v Speaker 2>a there's a David if you're listening, a kind of

0:20:25.680 --> 0:20:27.560
<v Speaker 2>hot tip to you. You're like a savant.

0:20:27.720 --> 0:20:29.800
<v Speaker 1>Yeah, people are saying Tom, put a cork in it.

0:20:29.960 --> 0:20:33.280
<v Speaker 1>Gary Gensler, thank you so much, the former chairman the

0:20:33.359 --> 0:20:36.680
<v Speaker 1>Securities Exchange Commission, a great supporter of all we do

0:20:36.800 --> 0:20:39.800
<v Speaker 1>here at Bloomberg, Surveyance and of course podcasts. Look for

0:20:39.920 --> 0:20:42.440
<v Speaker 1>it with the Lord Simon Johnson out of M I T.

0:20:42.600 --> 0:20:44.160
<v Speaker 1>I'll put that out on LinkedIn and Twitter