WEBVTT - Single Best Idea with Tom Keene: Matt Luzzetti & David Salem

0:00:02.400 --> 0:00:15.760
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news, single best idea, A

0:00:15.880 --> 0:00:22.760
<v Speaker 1>more than eventful Tuesday, the geopolitics folding over to geoeconomics,

0:00:22.840 --> 0:00:25.880
<v Speaker 1>folding over to oh, it's the first day of the

0:00:25.920 --> 0:00:29.440
<v Speaker 1>fourth quarter of this year. Where did September go? Where

0:00:29.480 --> 0:00:32.240
<v Speaker 1>did sell in May? And go away go? We did

0:00:32.280 --> 0:00:35.559
<v Speaker 1>some equity coverage, but I have to admit the focus

0:00:35.640 --> 0:00:40.600
<v Speaker 1>is on newsflow and focuses on a bigger, broader picture.

0:00:41.080 --> 0:00:44.320
<v Speaker 1>We'll try to get a little more granular. Here is

0:00:44.360 --> 0:00:47.360
<v Speaker 1>to go to the jobs report this Friday, and of

0:00:47.360 --> 0:00:50.360
<v Speaker 1>course labor is suddenly what the FED is looking at.

0:00:50.680 --> 0:00:53.600
<v Speaker 1>I guess they're looking at inflation. We talked to Matt

0:00:53.640 --> 0:00:56.920
<v Speaker 1>Lazetti about the movable feast. Matt Lizetti's the Deutsche Bank.

0:00:57.320 --> 0:00:58.640
<v Speaker 1>Here he is on the Fed.

0:00:59.040 --> 0:01:01.080
<v Speaker 2>I think the first seventy five to one hundred basis

0:01:01.080 --> 0:01:05.280
<v Speaker 2>points light likely one hundred basis points is straightforward. Our

0:01:05.400 --> 0:01:07.280
<v Speaker 2>view is that the neutral range and nominal terms is

0:01:07.319 --> 0:01:09.800
<v Speaker 2>three and a half percent, So getting down close to

0:01:09.880 --> 0:01:13.399
<v Speaker 2>four percent, I think is a straightforward okay from their perspective,

0:01:13.480 --> 0:01:16.120
<v Speaker 2>So another twenty five each meeting, twenty five each meeting.

0:01:16.120 --> 0:01:18.000
<v Speaker 2>I think the potentially if you get a softter job support,

0:01:18.040 --> 0:01:19.560
<v Speaker 2>they would have to go fifty again, or they may

0:01:19.600 --> 0:01:22.600
<v Speaker 2>choose to. But at the same time, I think once

0:01:22.640 --> 0:01:24.959
<v Speaker 2>they get one hundred basis points, and if the economy

0:01:24.959 --> 0:01:27.280
<v Speaker 2>continues to look strong and the labor market stabilizes, it

0:01:27.319 --> 0:01:29.240
<v Speaker 2>becomes a greater question at that point.

0:01:29.319 --> 0:01:31.440
<v Speaker 1>Matt lazeti and we really thank him for his New

0:01:31.520 --> 0:01:35.399
<v Speaker 1>York Mets analysis. For those of you worldwide, this is

0:01:35.440 --> 0:01:40.759
<v Speaker 1>the best time of year for this American distraction called baseball.

0:01:40.880 --> 0:01:43.800
<v Speaker 1>The World Series. And when I was a kid, like

0:01:43.880 --> 0:01:46.840
<v Speaker 1>only two teams made it the National League, American League,

0:01:47.080 --> 0:01:49.880
<v Speaker 1>and they played four out of seven, the best of seven,

0:01:50.560 --> 0:01:53.840
<v Speaker 1>and the season ended like October fifth or October tenth, whatever.

0:01:54.320 --> 0:01:58.080
<v Speaker 1>Now we've turned it into an extravaganza, and the beginning

0:01:58.080 --> 0:02:01.040
<v Speaker 1>of the extravaganza is the Wild Card Derby, which is

0:02:01.080 --> 0:02:04.320
<v Speaker 1>the best two out of three, and the game totally changes.

0:02:04.720 --> 0:02:08.080
<v Speaker 1>So I'm sorry today, I'm Bloomberg Surveillance. Michael Barr was

0:02:08.120 --> 0:02:10.960
<v Speaker 1>not focused, Matt Lazetti was not focused at Deutsche Bank,

0:02:11.040 --> 0:02:15.440
<v Speaker 1>and we'll go on from there. Had a wonderful visit

0:02:15.480 --> 0:02:19.320
<v Speaker 1>today with David Salem of Hedge Eye. Many people upset

0:02:19.360 --> 0:02:20.880
<v Speaker 1>at the length of the interview, we had to look

0:02:20.880 --> 0:02:23.800
<v Speaker 1>at the port strike of course East Coast and Gulf

0:02:23.840 --> 0:02:27.280
<v Speaker 1>Coast as well. And we'll get mister Salem in again

0:02:27.680 --> 0:02:31.079
<v Speaker 1>for an extended two blocks. I really, I promise that

0:02:31.440 --> 0:02:33.120
<v Speaker 1>try to get him in as soon as we can.

0:02:33.639 --> 0:02:37.320
<v Speaker 1>David Salem is venerable to say the least, and I

0:02:37.520 --> 0:02:43.040
<v Speaker 1>know he really speaks his mind. David Salem on the

0:02:43.080 --> 0:02:47.560
<v Speaker 1>illiquidity of private equity and private credit.

0:02:47.400 --> 0:02:49.840
<v Speaker 3>The single sentence response to what you just said is

0:02:49.880 --> 0:02:54.280
<v Speaker 3>that almost every effort in the history of capitalism to

0:02:54.440 --> 0:03:00.200
<v Speaker 3>transmute illiquid assets into liquid ones ends and tears up

0:03:00.280 --> 0:03:04.120
<v Speaker 3>right there. So the business model, and it is a

0:03:04.120 --> 0:03:08.080
<v Speaker 3>business and a revenue model that private equity, private realty,

0:03:08.120 --> 0:03:13.079
<v Speaker 3>private infrastructure, and other managers their household names today have

0:03:13.400 --> 0:03:19.440
<v Speaker 3>set a top. Otherwise truly sound enterprises is flawed. And

0:03:19.760 --> 0:03:22.160
<v Speaker 3>it raises a really important question as we seek to

0:03:22.240 --> 0:03:25.720
<v Speaker 3>democratize access to some of these private forms of investing,

0:03:25.720 --> 0:03:28.720
<v Speaker 3>are we actually doing folks a favor. They're clearly much

0:03:28.800 --> 0:03:32.800
<v Speaker 3>higher forms, sorry, much higher cost forms of investing. So

0:03:32.840 --> 0:03:37.320
<v Speaker 3>I have serious concerns about that. I just alluded to it.

0:03:37.480 --> 0:03:40.520
<v Speaker 3>The bottom line is people have taken a very sound

0:03:40.560 --> 0:03:43.560
<v Speaker 3>model that was idiosyncratic and entailed a great degree of

0:03:43.600 --> 0:03:46.640
<v Speaker 3>discomfort when it was first designed by David Swinson, and

0:03:46.680 --> 0:03:49.040
<v Speaker 3>they've taken it way too far. And Wall Street, you

0:03:49.080 --> 0:03:50.760
<v Speaker 3>know this. Wall Street tends to do that with just

0:03:50.800 --> 0:03:51.800
<v Speaker 3>about everything in encounter.

0:03:52.280 --> 0:03:56.160
<v Speaker 1>David Swinson there of Yale University. David Salem speaking of

0:03:56.200 --> 0:03:59.160
<v Speaker 1>being a young buck and running into David Swinson, I

0:03:59.200 --> 0:04:01.600
<v Speaker 1>think at thirty one years old, is he hadn't reinvented

0:04:02.400 --> 0:04:07.480
<v Speaker 1>endowment investment. To translate what you just heard, if you

0:04:07.560 --> 0:04:11.200
<v Speaker 1>buy a share of Apple, you're pretty confident you can

0:04:11.200 --> 0:04:13.400
<v Speaker 1>get out of that puppy at a gain or a loss.

0:04:14.200 --> 0:04:16.680
<v Speaker 1>And the liquidity is pretty quite simple. And the bid

0:04:16.720 --> 0:04:20.520
<v Speaker 1>and ask good or even great, Good morning, Arthur Levitt

0:04:20.720 --> 0:04:24.039
<v Speaker 1>for all you did for liquidity. If you have a

0:04:24.040 --> 0:04:28.000
<v Speaker 1>bar gold or a gold kugarand or whatever, you can

0:04:28.080 --> 0:04:31.679
<v Speaker 1>probably sell it. It's liquid, I guess, at the right price.

0:04:32.800 --> 0:04:37.400
<v Speaker 1>But what about alternative investments, the idea of getting out

0:04:37.400 --> 0:04:40.320
<v Speaker 1>of venture capital, getting out of private equity, getting out

0:04:40.320 --> 0:04:44.280
<v Speaker 1>of private credit, and that is a point of debate.

0:04:44.360 --> 0:04:47.880
<v Speaker 1>We'll continue to cover this well into twenty twenty five.

0:04:47.960 --> 0:04:52.280
<v Speaker 1>David Salem of Hedge II there we're on on YouTube.

0:04:52.279 --> 0:04:55.760
<v Speaker 1>Subscribe to Bloomberg Podcasts. I don't have the September numbers yet,

0:04:56.040 --> 0:04:58.640
<v Speaker 1>but they told me they're phenomenal. Thank you so much

0:04:59.160 --> 0:05:01.680
<v Speaker 1>for our entire time. The team is we all learn

0:05:01.800 --> 0:05:05.559
<v Speaker 1>about YouTube in our homes, in our offices. The ease

0:05:05.600 --> 0:05:10.480
<v Speaker 1>of doing this at Bloomberg Podcasts on YouTube on your

0:05:10.520 --> 0:05:15.240
<v Speaker 1>commute under new technology, Apple CarPlay, Android Auto seeing, Apple

0:05:15.320 --> 0:05:19.440
<v Speaker 1>CarPlay morn again. It's international as well. Serious XM. Good

0:05:19.440 --> 0:05:22.960
<v Speaker 1>Morning on the Corridor ninety two nine FM and Boston

0:05:22.960 --> 0:05:27.239
<v Speaker 1>Bloomberg eleventh REEO in New York down to Washington ninety

0:05:27.320 --> 0:05:30.840
<v Speaker 1>ninety one FM. A special shout out today to Dan

0:05:31.160 --> 0:05:35.000
<v Speaker 1>Williams of our Tel Aviv news bureau coming to us

0:05:35.000 --> 0:05:38.080
<v Speaker 1>from the border of Lebanon. That as we heard very

0:05:38.080 --> 0:05:42.159
<v Speaker 1>difficult news that moved markets about the ten am hour

0:05:43.000 --> 0:05:54.480
<v Speaker 1>on YouTube podcasts on Apple podcasts. This is single best idea.