1 00:00:02,720 --> 00:00:07,200 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,240 --> 00:00:10,760 Speaker 2: Tell me about New Orleans. I went to New Orleans 3 00:00:10,840 --> 00:00:14,760 Speaker 2: where the streets sticky little yeah, and like get out 4 00:00:14,800 --> 00:00:16,600 Speaker 2: of the knees and like the floor. 5 00:00:16,680 --> 00:00:18,400 Speaker 3: It was scienti e. Sampling of the streets. 6 00:00:18,640 --> 00:00:21,439 Speaker 2: How is the uh the vibe? The conference? 7 00:00:21,600 --> 00:00:24,119 Speaker 3: It was good, you know, like I guess that I 8 00:00:24,160 --> 00:00:26,280 Speaker 3: had this image of my mind in my mind if 9 00:00:26,320 --> 00:00:29,479 Speaker 3: it's like a super fun conference and then at the 10 00:00:29,520 --> 00:00:31,280 Speaker 3: end of the day it's an I'm a night lock conference. 11 00:00:31,320 --> 00:00:33,240 Speaker 2: You know, I don't know what you're saying. 12 00:00:33,320 --> 00:00:35,520 Speaker 3: We'll leave it to the readers, the listeners imagination. 13 00:00:36,880 --> 00:00:38,159 Speaker 2: Well, I was in Las. 14 00:00:38,080 --> 00:00:40,920 Speaker 1: Vegas, also sticky. 15 00:00:41,000 --> 00:00:44,599 Speaker 2: Yes, Las Vegas is also grim, but. 16 00:00:44,760 --> 00:00:46,640 Speaker 3: It was nice, like I don't want. 17 00:00:47,120 --> 00:00:48,480 Speaker 2: Yeah, New Orleans is beautiful. 18 00:00:48,640 --> 00:00:53,520 Speaker 3: Bourbon Street is a strange place, but nice. Yeah, it's good. 19 00:00:53,520 --> 00:00:55,040 Speaker 2: There's mules pulling carriages. 20 00:00:55,320 --> 00:00:57,720 Speaker 3: I didn't see mules pulling carriages a little like street car, 21 00:00:57,880 --> 00:00:58,560 Speaker 3: like a little tram. 22 00:01:00,080 --> 00:01:02,280 Speaker 2: Yeah, there was none of that in Las Vegas. But 23 00:01:02,400 --> 00:01:06,479 Speaker 2: we went to the Titanic Museum, which for some reason 24 00:01:06,520 --> 00:01:10,080 Speaker 2: is in Las Vegas, famously land locked, and it was 25 00:01:10,120 --> 00:01:13,640 Speaker 2: a great conference. Got to talk shop with a lot 26 00:01:13,680 --> 00:01:17,880 Speaker 2: of et F folks a lot of fans of the podcast, Yeah, 27 00:01:17,959 --> 00:01:18,640 Speaker 2: which is cute. 28 00:01:18,760 --> 00:01:22,240 Speaker 3: They're like, Katie, we like the podcast. All that we 29 00:01:22,280 --> 00:01:23,959 Speaker 3: ask is more ETF content. 30 00:01:24,080 --> 00:01:29,920 Speaker 2: Actually, yes, yeah, I did text that to you. Yeah, 31 00:01:30,080 --> 00:01:33,600 Speaker 2: that was cute. Any other news, Yeah, I bought a 32 00:01:33,640 --> 00:01:37,400 Speaker 2: house a house. Yeah, well, nothing's been signed, but they 33 00:01:37,480 --> 00:01:39,679 Speaker 2: selected our offers, so we're really thrilled. 34 00:01:39,720 --> 00:01:40,400 Speaker 3: Congratulation. 35 00:01:40,600 --> 00:01:46,080 Speaker 2: Thank you. That's fun to laugh with a good friend. 36 00:01:47,120 --> 00:01:50,720 Speaker 2: Should I tell the listeners that I'm pregnant, You're going 37 00:01:50,760 --> 00:01:51,080 Speaker 2: to say. 38 00:01:51,000 --> 00:01:53,120 Speaker 3: Should you tell the listeners you're a street address, but 39 00:01:53,360 --> 00:01:55,760 Speaker 3: both the address of your house and the name and 40 00:01:55,800 --> 00:01:57,040 Speaker 3: SOUCHI a security number. 41 00:01:56,800 --> 00:01:59,200 Speaker 1: Of one on one. 42 00:02:00,080 --> 00:02:02,840 Speaker 2: It doesn't No, she's not across the finish. 43 00:02:03,000 --> 00:02:04,960 Speaker 3: Congratulations in your house and your pregnancy. 44 00:02:05,080 --> 00:02:05,480 Speaker 4: Thank you. 45 00:02:05,800 --> 00:02:08,359 Speaker 3: It was like, really, all the listeners where to send 46 00:02:08,760 --> 00:02:09,560 Speaker 3: the baby gifts? 47 00:02:09,720 --> 00:02:13,959 Speaker 2: Please don't send me anything, Please don't do that. But yeah, 48 00:02:14,160 --> 00:02:16,720 Speaker 2: I needed a place to live because our rent, our 49 00:02:16,800 --> 00:02:18,960 Speaker 2: lease is up at the end of May, and then 50 00:02:18,960 --> 00:02:21,320 Speaker 2: I'm doing August. I love deadlines. 51 00:02:21,600 --> 00:02:23,280 Speaker 3: We're gonna say the baby's name on this podcast. 52 00:02:23,360 --> 00:02:23,960 Speaker 4: Julia. 53 00:02:24,760 --> 00:02:25,600 Speaker 2: Her name is Julia? 54 00:02:25,760 --> 00:02:25,959 Speaker 1: Really? 55 00:02:26,200 --> 00:02:28,200 Speaker 2: Yeah? Have I not told you that. 56 00:02:28,360 --> 00:02:30,359 Speaker 1: I don't know my mother's name is. 57 00:02:33,200 --> 00:02:33,960 Speaker 3: I never do that. 58 00:02:34,080 --> 00:02:37,360 Speaker 2: Yeah, I don't really get that. I've been cooking up 59 00:02:37,400 --> 00:02:40,320 Speaker 2: this name for like the past decade. So I'm excited 60 00:02:40,320 --> 00:02:43,959 Speaker 2: to finally have something to name Julia my mother's name is. 61 00:02:45,919 --> 00:02:46,320 Speaker 4: I know. 62 00:02:46,520 --> 00:02:50,600 Speaker 2: Actually I love the name August. Gus for sure. I 63 00:02:50,639 --> 00:02:52,720 Speaker 2: have a horse name that my husband thinks that's weird. 64 00:02:52,919 --> 00:02:58,080 Speaker 3: But it's weird because you have a horse named Gus, 65 00:02:58,160 --> 00:03:01,280 Speaker 3: or because if you have a boy, you're going to 66 00:03:01,400 --> 00:03:04,239 Speaker 3: give the boy the name of the horse. 67 00:03:04,919 --> 00:03:08,280 Speaker 2: We're going to name a child after horse. Yeah, And 68 00:03:08,320 --> 00:03:09,600 Speaker 2: he's like, we can't do that. 69 00:03:10,040 --> 00:03:12,240 Speaker 3: In some sense, this is the least surprising thing I've 70 00:03:12,280 --> 00:03:12,720 Speaker 3: ever heard. 71 00:03:14,080 --> 00:03:17,519 Speaker 2: Yeah, but you know, it's just such a handsome name. August. 72 00:03:17,880 --> 00:03:20,360 Speaker 3: Yeah. Good for a horse. 73 00:03:21,919 --> 00:03:23,400 Speaker 2: Yeah, come on, it's a multi purpose. 74 00:03:25,000 --> 00:03:27,639 Speaker 3: Hello, and welcome to the Money Stuff Podcast. You're a 75 00:03:27,720 --> 00:03:31,359 Speaker 3: weekly podcast where you talk about stuff related to money. 76 00:03:32,240 --> 00:03:34,239 Speaker 3: I'm Matt Levine and I read the Money Stuff column 77 00:03:34,240 --> 00:03:35,240 Speaker 3: for Bloomberg Opinion. 78 00:03:36,280 --> 00:03:38,880 Speaker 2: And I'm Katie Greifeld, a reporter for Bloomberg News and 79 00:03:38,920 --> 00:03:40,440 Speaker 2: an anchor for Bloomberg Television. 80 00:03:50,240 --> 00:03:52,280 Speaker 3: So we had a podcast last week about private credit. 81 00:03:52,360 --> 00:03:54,320 Speaker 1: Huh, we sure did this week? 82 00:03:55,800 --> 00:03:57,560 Speaker 2: Well, you can't get away from it. It's like every 83 00:03:57,560 --> 00:03:59,600 Speaker 2: other Readspike on the Terminal is about private credit. 84 00:03:59,680 --> 00:04:01,600 Speaker 3: Yeah. So what I'm seeing on our podcast last week 85 00:04:01,720 --> 00:04:03,560 Speaker 3: was like, it's the bigges. It's the most important or 86 00:04:03,600 --> 00:04:08,120 Speaker 3: most interesting or biggest story in finance. And who was 87 00:04:08,120 --> 00:04:10,880 Speaker 3: it who said that? As a golden executive who said 88 00:04:10,880 --> 00:04:15,200 Speaker 3: that that private the private markets clients love the Iran 89 00:04:15,320 --> 00:04:18,760 Speaker 3: war because it destrides from their problems, which, yeah, sort 90 00:04:18,800 --> 00:04:20,440 Speaker 3: of thing you don't say out loud, but. 91 00:04:20,360 --> 00:04:22,039 Speaker 2: He did, and we're thankful for it. 92 00:04:22,360 --> 00:04:24,720 Speaker 3: But here on this podcast, we're sticking. 93 00:04:24,360 --> 00:04:25,039 Speaker 1: To private credit. 94 00:04:25,200 --> 00:04:28,119 Speaker 2: Yeah, Apollo and Aries those were the big ones this week. 95 00:04:28,720 --> 00:04:31,800 Speaker 3: Yeah, I think by it said it's increasing, right, the 96 00:04:31,800 --> 00:04:34,080 Speaker 3: more bad headlines there are about with their all requests 97 00:04:34,080 --> 00:04:36,920 Speaker 3: and bad redemption requests, the more the next one gets 98 00:04:36,920 --> 00:04:40,880 Speaker 3: a bigger redemption request. So now Apollo and Areas both 99 00:04:40,920 --> 00:04:44,120 Speaker 3: got like eleven plus percent redemption requests from their private 100 00:04:44,400 --> 00:04:48,080 Speaker 3: business of album companies. Yeah, and they both stuck to 101 00:04:48,120 --> 00:04:49,880 Speaker 3: their guns and said we'll give you back five percent 102 00:04:50,000 --> 00:04:52,039 Speaker 3: and the rest you can come back next time. 103 00:04:52,480 --> 00:04:53,040 Speaker 2: Yeah. 104 00:04:53,080 --> 00:04:56,240 Speaker 3: So you know that's uh, that seems to be the. 105 00:04:56,160 --> 00:04:59,600 Speaker 2: Playbook, which for everyone except that one. 106 00:04:59,480 --> 00:05:01,680 Speaker 3: Plus yeah, a couple. There are a couple of exceptions. 107 00:05:01,480 --> 00:05:05,440 Speaker 3: There's the Blackstone one where they pass the hat and 108 00:05:06,320 --> 00:05:10,040 Speaker 3: cast out like nine percent by like raising money from 109 00:05:10,279 --> 00:05:13,400 Speaker 3: Blackstone itself and some of its employees. And there's also 110 00:05:13,480 --> 00:05:15,680 Speaker 3: like the Blue Owl obedc two to one, which is 111 00:05:15,720 --> 00:05:19,800 Speaker 3: like they sort of limited it, but they also said 112 00:05:19,839 --> 00:05:22,120 Speaker 3: they're winding it down and returning more capital, so it's 113 00:05:22,160 --> 00:05:24,400 Speaker 3: like kind of a mixed bag. But yeah, most of them, 114 00:05:24,600 --> 00:05:29,839 Speaker 3: I said, look, these are long term SI liquid vehicles. 115 00:05:30,120 --> 00:05:31,960 Speaker 1: Yeah, the deal is. 116 00:05:31,920 --> 00:05:35,360 Speaker 3: That you are locking up your money in illiquid assets 117 00:05:35,400 --> 00:05:39,000 Speaker 3: in order to earn the higher returns that are maybe 118 00:05:39,080 --> 00:05:42,960 Speaker 3: promised to liquid assets. And you can get a little 119 00:05:42,960 --> 00:05:44,400 Speaker 3: bit of your money out, but like you can't get 120 00:05:44,400 --> 00:05:45,680 Speaker 3: a lot of them your runny out. And that was 121 00:05:45,720 --> 00:05:48,480 Speaker 3: the deal. How do you think, said in an interview. 122 00:05:48,920 --> 00:05:51,400 Speaker 3: It's not like it's on page ninety two of the perspectives, 123 00:05:51,400 --> 00:05:52,320 Speaker 3: it's on page one. 124 00:05:52,520 --> 00:05:54,120 Speaker 1: Yeah, it's true, And. 125 00:05:54,000 --> 00:05:55,600 Speaker 3: Like they were like, yeah, that's the deal. And if 126 00:05:55,640 --> 00:05:57,960 Speaker 3: we if we cast more people out, that would be 127 00:05:58,680 --> 00:06:01,760 Speaker 3: failing in our funuciar dity to the people who stay in, 128 00:06:02,560 --> 00:06:05,240 Speaker 3: which is true for two reasons. One, it's like, oh, 129 00:06:05,240 --> 00:06:08,040 Speaker 3: we have this like liquid stuff, and we're not gonna 130 00:06:08,120 --> 00:06:09,800 Speaker 3: we don't want to do fire sales, and so we're 131 00:06:09,839 --> 00:06:12,359 Speaker 3: going to keep the stuff and cash up people a 132 00:06:12,360 --> 00:06:14,960 Speaker 3: little bit, but not sell loans to cash more people out. 133 00:06:15,400 --> 00:06:17,200 Speaker 3: But the only reason it's true is, like, you know, 134 00:06:17,600 --> 00:06:19,119 Speaker 3: this is what we talked about with the buzz. People 135 00:06:19,120 --> 00:06:22,520 Speaker 3: have a lot of doubts about the marks and these funds. Yeah, 136 00:06:22,600 --> 00:06:25,120 Speaker 3: people have a lot of doubts that when a private 137 00:06:25,160 --> 00:06:28,800 Speaker 3: credit fund says it's NAV is whatever, that that NAV 138 00:06:28,960 --> 00:06:31,920 Speaker 3: reflects like the actual market value of the loans. And 139 00:06:31,960 --> 00:06:34,919 Speaker 3: so one concern you'd have is if you're running one 140 00:06:34,920 --> 00:06:36,800 Speaker 3: of these funds is like if people come to you 141 00:06:36,839 --> 00:06:38,880 Speaker 3: to cash out and you cash them at you cash 142 00:06:38,920 --> 00:06:42,200 Speaker 3: them out at NAV, and if the NAV is way 143 00:06:42,240 --> 00:06:45,000 Speaker 3: too high, then you're cashing them at way too high. 144 00:06:45,120 --> 00:06:47,360 Speaker 3: You're giving them too much value, and then people who 145 00:06:47,400 --> 00:06:49,559 Speaker 3: stay in the fund are getting diluted by you cashing 146 00:06:49,600 --> 00:06:53,880 Speaker 3: these people out. And so when these fund managers say, 147 00:06:54,480 --> 00:06:57,040 Speaker 3: is part of you know, our job as FIDI shares 148 00:06:57,080 --> 00:06:59,480 Speaker 3: the people staying in the fund, we can't cash out 149 00:06:59,480 --> 00:07:02,280 Speaker 3: more than five percent. Like that's true, but it's also 150 00:07:02,320 --> 00:07:03,680 Speaker 3: like a little bit of a worrying thing to say, 151 00:07:03,680 --> 00:07:05,640 Speaker 3: because it suggests that, like you also might be a 152 00:07:05,640 --> 00:07:06,880 Speaker 3: little bit worried about your iyvay. 153 00:07:06,920 --> 00:07:07,400 Speaker 4: Yeah. 154 00:07:07,480 --> 00:07:12,560 Speaker 2: Well, so if you had super large redemptions that you redeemed, 155 00:07:13,200 --> 00:07:15,400 Speaker 2: what are you selling to meet them? There was a 156 00:07:15,480 --> 00:07:17,760 Speaker 2: quote in a Bloomberg story out this week from the 157 00:07:17,800 --> 00:07:20,960 Speaker 2: global head of credit strategy over at City who said 158 00:07:20,960 --> 00:07:23,600 Speaker 2: that if you start meeting redemptions that are too large, 159 00:07:24,040 --> 00:07:26,560 Speaker 2: what does the surviving portfolio start to look like? 160 00:07:27,240 --> 00:07:30,320 Speaker 3: It's like the least liquid. Yeah, weirdest cats and dogs 161 00:07:30,320 --> 00:07:31,800 Speaker 3: in the portfolio probably right. 162 00:07:32,080 --> 00:07:34,440 Speaker 2: Yeah, so that's fair. 163 00:07:34,880 --> 00:07:36,560 Speaker 3: It is fair. I have a lot of sympathy with 164 00:07:36,600 --> 00:07:38,400 Speaker 3: iry fix saying it's on page one of the perspective. 165 00:07:38,400 --> 00:07:38,800 Speaker 3: It is right. 166 00:07:38,880 --> 00:07:40,000 Speaker 2: Yeah, that's what this deal is. 167 00:07:40,200 --> 00:07:43,000 Speaker 3: This is I liquid stuff. The role of this is 168 00:07:43,560 --> 00:07:47,520 Speaker 3: this is you are a wealthy person. A small portion 169 00:07:47,600 --> 00:07:50,120 Speaker 3: of your money is in ill liquid stuff that you 170 00:07:50,160 --> 00:07:53,160 Speaker 3: won't need for years, and this is that, right, and 171 00:07:53,640 --> 00:07:56,720 Speaker 3: so you shouldn't need the money. The private credit fund 172 00:07:56,760 --> 00:07:59,520 Speaker 3: is in the business of writing through periods of volatility 173 00:07:59,560 --> 00:08:01,760 Speaker 3: by not giving your money. Pack's like becoming clear this 174 00:08:01,840 --> 00:08:03,800 Speaker 3: is the product working as intended. It's just that you know, 175 00:08:03,800 --> 00:08:04,720 Speaker 3: people are mad about it. 176 00:08:05,000 --> 00:08:06,720 Speaker 2: Yeah, functioning as sold. 177 00:08:06,800 --> 00:08:09,360 Speaker 3: There's a great Bloomberg article. You know, there's like a 178 00:08:09,400 --> 00:08:12,280 Speaker 3: phrase liquidity illusion, Yeah, which just an annoying phrase. A 179 00:08:12,280 --> 00:08:15,800 Speaker 3: great Bloomberg article about people talking about liquidity confusion. Yeah, 180 00:08:15,800 --> 00:08:17,720 Speaker 3: where they're like, you know, they quite like Blue Owl 181 00:08:17,760 --> 00:08:20,600 Speaker 3: and Apollo people saying basically sort of saying, yeah, we 182 00:08:20,600 --> 00:08:22,920 Speaker 3: don't know how these things were sold. Maybe the advisors 183 00:08:22,960 --> 00:08:26,360 Speaker 3: didn't maybe highlight this enough. This is again what I 184 00:08:26,360 --> 00:08:27,200 Speaker 3: was talking about last year. 185 00:08:27,240 --> 00:08:29,560 Speaker 2: Yeah, I don't know, man, we did have that conversation, 186 00:08:29,640 --> 00:08:32,720 Speaker 2: like where was the potential point of miscommunication? I have 187 00:08:32,800 --> 00:08:34,199 Speaker 2: one of the Apollo quotes in front of me, so 188 00:08:34,240 --> 00:08:36,120 Speaker 2: I'm going to read it. This was coming from Jim 189 00:08:36,240 --> 00:08:40,160 Speaker 2: Zelter speaking at a conference that maybe the industry may 190 00:08:40,200 --> 00:08:44,760 Speaker 2: have failed to clearly explain liquidity restrictions. Quote, certain distribution 191 00:08:44,920 --> 00:08:47,960 Speaker 2: channels in certain parts of the globe may have not 192 00:08:48,000 --> 00:08:51,480 Speaker 2: fully communicated the risks inherent to the asset class, he 193 00:08:51,600 --> 00:08:54,679 Speaker 2: said in Melbourne. And so you have a mismatch right 194 00:08:54,679 --> 00:08:58,080 Speaker 2: now in shorter term redemptions. Sheesh, I don't know what 195 00:08:58,080 --> 00:08:59,440 Speaker 2: do you do about that certain. 196 00:08:59,240 --> 00:09:01,960 Speaker 3: Parts of the globe. Is interesting because my impression is 197 00:09:02,000 --> 00:09:04,920 Speaker 3: like that part of the globe is the USA, but 198 00:09:04,960 --> 00:09:09,560 Speaker 3: I don't really know. My impression is Financial Advisor sold 199 00:09:09,559 --> 00:09:12,040 Speaker 3: product that like there are a lot of like dentists 200 00:09:12,040 --> 00:09:14,120 Speaker 3: in the US who are trying to get out of 201 00:09:14,120 --> 00:09:17,720 Speaker 3: these things. Those dentists people were like literally sending made 202 00:09:17,920 --> 00:09:21,280 Speaker 3: dentist forums discussing. Yeah, the fighter's private credit funds. 203 00:09:21,280 --> 00:09:22,800 Speaker 2: We talked about this. I think when it comes to 204 00:09:22,840 --> 00:09:27,520 Speaker 2: the Blackstone example, like Okay, yes they are functioning as designs, 205 00:09:27,960 --> 00:09:31,560 Speaker 2: but it still doesn't feel good necessarily, And when you 206 00:09:31,559 --> 00:09:34,600 Speaker 2: think about future fund raising, it's certainly the. 207 00:09:34,679 --> 00:09:39,400 Speaker 3: Future fundraising is really interesting, right, One like fascinating thing 208 00:09:40,000 --> 00:09:41,839 Speaker 3: and I wrote about this this week is that all 209 00:09:41,880 --> 00:09:46,000 Speaker 3: these funds are getting like big redemption requests. They're also 210 00:09:46,040 --> 00:09:48,120 Speaker 3: getting big ish inflows. 211 00:09:48,280 --> 00:09:50,319 Speaker 1: Yeah, not as big for now for. 212 00:09:50,360 --> 00:09:55,120 Speaker 3: Now, yeah, but like like really now now you're like 213 00:09:55,400 --> 00:09:58,520 Speaker 3: I want in at NAV. It's just an interesting vibe 214 00:09:58,640 --> 00:10:01,360 Speaker 3: because they're clearly people who are looking around and saying 215 00:10:01,360 --> 00:10:03,960 Speaker 3: this is oversold, this is overblown, Like it's not as 216 00:10:03,960 --> 00:10:07,040 Speaker 3: bad as it seems. We're gonna buy at the lows, right. So, 217 00:10:07,120 --> 00:10:09,160 Speaker 3: like BoA's wine scene is like I'll pay sixty five 218 00:10:09,200 --> 00:10:11,840 Speaker 3: cents on the dog, but the people who are sending 219 00:10:11,880 --> 00:10:15,319 Speaker 3: their checks to these funds right now are paying NAVY. 220 00:10:15,400 --> 00:10:17,680 Speaker 3: They're not buying a discounts, they're not buying it lows. 221 00:10:18,040 --> 00:10:20,200 Speaker 3: They are just like, yeah, we trust that it's fine 222 00:10:20,240 --> 00:10:22,840 Speaker 3: what we want in and it's just sort of a strange, 223 00:10:22,880 --> 00:10:25,520 Speaker 3: like like non clearing market, right, Like all these people 224 00:10:25,600 --> 00:10:28,000 Speaker 3: want out at NAV, they can't all get out. Other 225 00:10:28,080 --> 00:10:30,880 Speaker 3: people want in at NAV. Why. 226 00:10:31,720 --> 00:10:34,320 Speaker 2: I mean, there's been five billion dollars of inflows so 227 00:10:34,440 --> 00:10:36,080 Speaker 2: far this quarter. 228 00:10:36,640 --> 00:10:39,959 Speaker 3: Yeah, I think both the Apollo Fund and the Blackstone 229 00:10:39,960 --> 00:10:41,880 Speaker 3: Fund that we talked about, they both had inflos that 230 00:10:41,920 --> 00:10:44,920 Speaker 3: were kind of around the amount that they actually cashed out. 231 00:10:45,080 --> 00:10:47,080 Speaker 3: So like the Apollo Fund got like around five percent 232 00:10:47,120 --> 00:10:50,240 Speaker 3: infos paid out about five percent outflows. You know, got 233 00:10:50,320 --> 00:10:52,920 Speaker 3: requests for like eleven percent outflows, and that's like seems 234 00:10:52,960 --> 00:10:55,600 Speaker 3: to be kind of normal. Like their infos and outflows 235 00:10:56,040 --> 00:10:58,760 Speaker 3: roughly matched when you cut out the outflows they didn't 236 00:10:58,800 --> 00:10:59,560 Speaker 3: actually pay out. 237 00:10:59,720 --> 00:11:03,560 Speaker 2: Yeah, I will say, I mean this quarter, we don't 238 00:11:03,559 --> 00:11:05,800 Speaker 2: know what in the quarter, that's right, Yeah, that's right. 239 00:11:06,040 --> 00:11:09,120 Speaker 2: Did any of them come in the last four weeks? 240 00:11:09,440 --> 00:11:11,640 Speaker 2: I would like to know did you see this story? 241 00:11:11,960 --> 00:11:15,120 Speaker 2: JP Morgan planning a private credit fund that allows seven 242 00:11:15,160 --> 00:11:16,400 Speaker 2: point five percent redemption. 243 00:11:16,840 --> 00:11:20,360 Speaker 3: That's a exelling, but that's like the credit card that 244 00:11:20,440 --> 00:11:22,760 Speaker 3: has got to Yeah, I don't know that's what you 245 00:11:22,760 --> 00:11:23,400 Speaker 3: want to lead with. 246 00:11:23,840 --> 00:11:24,840 Speaker 2: They're leading with it. 247 00:11:25,280 --> 00:11:25,800 Speaker 1: Well, I don't know. 248 00:11:25,760 --> 00:11:27,840 Speaker 3: If that's that reassuring whatever. 249 00:11:28,280 --> 00:11:31,160 Speaker 2: It's also public and private credit, so some of it 250 00:11:31,200 --> 00:11:32,240 Speaker 2: will be in private. 251 00:11:32,400 --> 00:11:35,120 Speaker 3: But the future fundraising stuff is really interesting, right because 252 00:11:35,160 --> 00:11:37,200 Speaker 3: you know, two months ago, the whole story in private 253 00:11:37,240 --> 00:11:39,760 Speaker 3: credit and private markets generally, it was like, we're going 254 00:11:39,840 --> 00:11:42,199 Speaker 3: to open up the frown case. We're going to raise trillions. 255 00:11:41,920 --> 00:11:45,160 Speaker 2: Of dollars from put this in your retirement accounts, and 256 00:11:45,679 --> 00:11:47,960 Speaker 2: like this does not undermine the case for pretty good 257 00:11:48,000 --> 00:11:49,080 Speaker 2: in your retirement account. 258 00:11:49,160 --> 00:11:50,760 Speaker 3: It doesn't, but it does. 259 00:11:51,200 --> 00:11:56,040 Speaker 2: Perception is everything, yes, everything in this business. And I 260 00:11:56,040 --> 00:11:58,040 Speaker 2: don't know when it comes to future fund raising, maybe 261 00:11:58,160 --> 00:12:01,280 Speaker 2: seven and a half percent redemption on a totally basis, 262 00:12:02,040 --> 00:12:08,320 Speaker 2: maybe that'll ancise some of these you know word skeptical investors. 263 00:12:09,120 --> 00:12:12,240 Speaker 3: Like somebody email me like, if this didn't exist, there 264 00:12:12,240 --> 00:12:14,599 Speaker 3: weren't these BDCs, if there hadn't been this rise in 265 00:12:14,640 --> 00:12:18,000 Speaker 3: private credit, all this stuff, all these loans would more 266 00:12:18,080 --> 00:12:22,520 Speaker 3: or less exist in like highyield funds. All these companies 267 00:12:22,559 --> 00:12:25,640 Speaker 3: that borrow from you know, Apollo and Areas and HPS 268 00:12:25,640 --> 00:12:28,679 Speaker 3: and whatever would be borrowing from the bank loan or 269 00:12:28,679 --> 00:12:32,120 Speaker 3: the high yield market, and there'd be like CLO funds 270 00:12:32,160 --> 00:12:36,600 Speaker 3: and high yield funds would own the debt and when 271 00:12:36,679 --> 00:12:41,080 Speaker 3: people got nervous about software apocalypse and whatever, they would 272 00:12:41,440 --> 00:12:43,959 Speaker 3: cash out of those funds, and those funds would sell 273 00:12:44,000 --> 00:12:46,360 Speaker 3: the debt and the price of the debt would go down, 274 00:12:46,800 --> 00:12:50,640 Speaker 3: and we would have like a different possibly also bad situation. Right, 275 00:12:51,040 --> 00:12:53,760 Speaker 3: Spreads would widen, prices would go down, people would get nervous, 276 00:12:53,800 --> 00:12:55,800 Speaker 3: people would go like, you know, the debt of these 277 00:12:55,840 --> 00:12:58,600 Speaker 3: companies is collapsing, but they'd all get their money back 278 00:12:58,679 --> 00:13:01,040 Speaker 3: at whatever the mark was. You know, here it's like 279 00:13:01,240 --> 00:13:03,640 Speaker 3: there hasn't been fi ourselves at the market is still 280 00:13:03,640 --> 00:13:07,000 Speaker 3: functioning on the loan side, and then on the fund side, 281 00:13:07,040 --> 00:13:08,760 Speaker 3: everyone's complaining they can't get the money out. 282 00:13:09,040 --> 00:13:23,120 Speaker 4: Yeah. 283 00:13:23,320 --> 00:13:24,920 Speaker 3: Do you want to turn tractly to Larry Think? 284 00:13:25,400 --> 00:13:29,360 Speaker 2: Yeah, actually you mentioned Larry Think, and uh, you know, 285 00:13:29,400 --> 00:13:31,000 Speaker 2: he's had a lot to say in the past week, 286 00:13:31,240 --> 00:13:33,960 Speaker 2: some of it just in the written word. And you'll 287 00:13:34,000 --> 00:13:37,920 Speaker 2: never believe this. He thinks that Americans should buy more stocks. 288 00:13:38,320 --> 00:13:41,520 Speaker 3: It's so great I wrote about this. He's right in 289 00:13:41,559 --> 00:13:44,839 Speaker 3: a very conceptual way, but also like as an index 290 00:13:44,880 --> 00:13:47,040 Speaker 3: one manager. It is very much his book. But like 291 00:13:47,480 --> 00:13:49,760 Speaker 3: you know, he wrote the letter as annual chairman's letter 292 00:13:49,800 --> 00:13:53,839 Speaker 3: to investors. What he talks about, what's upon a time 293 00:13:53,840 --> 00:13:54,840 Speaker 3: where we talked about ESG. 294 00:13:54,960 --> 00:13:56,240 Speaker 2: Now it's talked about the climate. 295 00:13:56,559 --> 00:13:59,640 Speaker 3: He talks about Yeah, like whatever's top of mind this year? 296 00:13:59,640 --> 00:14:02,000 Speaker 3: It is neither iran nor private credit. Oh it is 297 00:14:02,080 --> 00:14:06,040 Speaker 3: AIE a big popular top of mind thing. And he's like, yeah, 298 00:14:06,080 --> 00:14:07,640 Speaker 3: what's going to happen with AI. It's going to put 299 00:14:07,679 --> 00:14:09,480 Speaker 3: a lot of people out of work, you know, And 300 00:14:09,520 --> 00:14:12,360 Speaker 3: it's like great classic stuff, right, It's like people are 301 00:14:12,360 --> 00:14:13,960 Speaker 3: worried that AI is going to take all the jobs. 302 00:14:14,960 --> 00:14:17,360 Speaker 3: What does it mean for AD to take all the jobs? Well, 303 00:14:17,400 --> 00:14:18,960 Speaker 3: it means you don't have a job, and it also 304 00:14:19,040 --> 00:14:22,480 Speaker 3: means that like the money that you would have gotten 305 00:14:22,480 --> 00:14:24,800 Speaker 3: paid goes somewhere, and it probably goes to corporate profits. 306 00:14:25,360 --> 00:14:29,000 Speaker 3: And so he writes in the letter, when we talk 307 00:14:29,040 --> 00:14:31,680 Speaker 3: about the economic disruption of AI, most of the conversation 308 00:14:31,800 --> 00:14:35,360 Speaker 3: is about jobs. But history suggests that transformative technologies create 309 00:14:35,440 --> 00:14:37,800 Speaker 3: enormous value, and much of that value accrues to the 310 00:14:37,800 --> 00:14:40,160 Speaker 3: companies that build and deploy them into the investors who 311 00:14:40,200 --> 00:14:43,520 Speaker 3: own them. So it's like, look, in the future. He 312 00:14:43,520 --> 00:14:45,680 Speaker 3: doesn't say this, I say this. In the future, there 313 00:14:45,720 --> 00:14:47,840 Speaker 3: will be no jobs, but instead of jobs, there will 314 00:14:47,880 --> 00:14:51,640 Speaker 3: be corporate profits. And so you as a person should 315 00:14:52,200 --> 00:14:55,080 Speaker 3: transition from having a job to owning the shares of 316 00:14:55,120 --> 00:14:56,960 Speaker 3: the companies that will make all the profits. How can 317 00:14:57,040 --> 00:14:59,239 Speaker 3: you do that, Well, flacrock has index. 318 00:14:59,000 --> 00:15:01,760 Speaker 1: Ones good news, good news. 319 00:15:02,080 --> 00:15:04,760 Speaker 3: So I'm parodying this, but I also the kind of 320 00:15:04,760 --> 00:15:06,520 Speaker 3: think it's true, right, I mean, if you were really 321 00:15:06,560 --> 00:15:12,560 Speaker 3: worried about AI like significantly displacing human labor, right, that's 322 00:15:12,600 --> 00:15:15,120 Speaker 3: a good problem, right, Like in a world where like 323 00:15:15,280 --> 00:15:17,040 Speaker 3: robots do all of our work for us and we 324 00:15:17,080 --> 00:15:18,720 Speaker 3: don't have to work, and we sit around and just. 325 00:15:18,720 --> 00:15:20,280 Speaker 2: Like eat bon bons. 326 00:15:20,320 --> 00:15:24,560 Speaker 3: Yeah, they consume the production that the robots produce. That's 327 00:15:24,600 --> 00:15:26,560 Speaker 3: great in the aggregate, but then it's like, if you 328 00:15:26,600 --> 00:15:28,000 Speaker 3: don't have any way to pay for the production that 329 00:15:28,000 --> 00:15:30,400 Speaker 3: the robots produced, then that's bad for you. Yeah, And 330 00:15:30,480 --> 00:15:32,400 Speaker 3: so how do you do that, Well, you give everyone 331 00:15:32,400 --> 00:15:34,120 Speaker 3: a share in the companies that own the robots and 332 00:15:34,160 --> 00:15:36,800 Speaker 3: then you're fine, and like how you do that? A 333 00:15:36,840 --> 00:15:39,480 Speaker 3: classic story is universal basic income, which is basically like 334 00:15:39,520 --> 00:15:43,280 Speaker 3: the government takes some money from the robot companies and 335 00:15:43,360 --> 00:15:45,160 Speaker 3: gives it to you so you can pay for food 336 00:15:45,160 --> 00:15:48,160 Speaker 3: and stuff. But like you know, they call that universal 337 00:15:48,200 --> 00:15:50,560 Speaker 3: basic index fund ownership in other ways, like make sure 338 00:15:50,560 --> 00:15:52,400 Speaker 3: that everyone owns a share of the index fund, and 339 00:15:52,440 --> 00:15:54,960 Speaker 3: the index fund owns the companies that own the robots, 340 00:15:54,960 --> 00:15:55,520 Speaker 3: and then it's fun. 341 00:15:55,680 --> 00:15:58,320 Speaker 2: Yeah, well while there are still jobs. One of things 342 00:15:58,360 --> 00:16:03,600 Speaker 2: proposals was that employers should basically set up emergency savings 343 00:16:03,600 --> 00:16:07,240 Speaker 2: accounts of up to twenty five hundred dollars so that 344 00:16:07,320 --> 00:16:12,400 Speaker 2: their staff can invest in the markets, which was slightly interesting. 345 00:16:12,440 --> 00:16:16,560 Speaker 2: It's like a private side answer to Trump accounts or 346 00:16:16,640 --> 00:16:19,560 Speaker 2: something along those lines, right, I mean. 347 00:16:19,480 --> 00:16:22,400 Speaker 3: Like all this stuff is like it's sounds like aggreate. 348 00:16:22,400 --> 00:16:25,000 Speaker 3: Conceptual level, it's like, yeah, well, all on the robots 349 00:16:25,040 --> 00:16:27,400 Speaker 3: and then it'll be great. But then it's on practical level, 350 00:16:27,440 --> 00:16:30,040 Speaker 3: it's like you'll have a twenty five hundred dollars emergency 351 00:16:30,080 --> 00:16:31,720 Speaker 3: fund that will and share it on the robots, and 352 00:16:31,720 --> 00:16:34,720 Speaker 3: then like, okay, how will you pay for food for 353 00:16:34,720 --> 00:16:35,480 Speaker 3: the rest of your life. 354 00:16:35,520 --> 00:16:37,560 Speaker 1: If one has jobs, don't worry about it. 355 00:16:39,880 --> 00:16:43,080 Speaker 2: I will say, it's very easy to have the cynical 356 00:16:43,520 --> 00:16:47,040 Speaker 2: take that. Yes, this is Larry Fink talking his own book, but. 357 00:16:46,680 --> 00:16:48,760 Speaker 3: It's a good book. I mean his book is like 358 00:16:48,800 --> 00:16:51,000 Speaker 3: everyone should own like a share of the economy, which 359 00:16:51,160 --> 00:16:52,200 Speaker 3: like it, it's like a fine book. 360 00:16:52,280 --> 00:16:55,360 Speaker 1: Yeah, but also propositions his. 361 00:16:55,400 --> 00:16:59,000 Speaker 2: Starting point that AI is going to exacerbate wealth inequality. 362 00:16:59,360 --> 00:17:04,679 Speaker 2: That's not controversial, you know, like silly. 363 00:17:04,480 --> 00:17:05,879 Speaker 3: Version of it, which is that there will be no 364 00:17:05,920 --> 00:17:07,920 Speaker 3: one will have any jobs anymore and we'll just eat 365 00:17:07,920 --> 00:17:10,680 Speaker 3: what the robots produce. But like the non silly version 366 00:17:10,800 --> 00:17:12,439 Speaker 3: is like, yeah, they'll be like you know, there'll be 367 00:17:12,480 --> 00:17:13,320 Speaker 3: winners and losers from A. 368 00:17:13,680 --> 00:17:13,920 Speaker 2: Yeah. 369 00:17:14,240 --> 00:17:17,679 Speaker 3: Though, by the way, like exascerate inequality, it's unclear, like 370 00:17:17,760 --> 00:17:19,919 Speaker 3: exactly what the dynamics are, right, And so one thing 371 00:17:19,960 --> 00:17:22,000 Speaker 3: he writes about in the letter is that like the 372 00:17:22,040 --> 00:17:25,520 Speaker 3: skilled trades, there are jobs that will be displaced by AI. Yeah, 373 00:17:25,600 --> 00:17:27,600 Speaker 3: there'll be more and less displaced by AI, and like 374 00:17:28,359 --> 00:17:31,320 Speaker 3: plumbers and electricians will be less displaced by AI. And 375 00:17:31,320 --> 00:17:33,480 Speaker 3: in fact, you'll need a lot of electricians to maintain 376 00:17:33,520 --> 00:17:37,280 Speaker 3: the data centers. Yeah, and like podcasters and index fund 377 00:17:37,280 --> 00:17:40,679 Speaker 3: managers will be more displaced by AI, and so you know, 378 00:17:40,880 --> 00:17:43,320 Speaker 3: it's unclear exactly how the inequality runs, but like you know, 379 00:17:44,000 --> 00:17:45,320 Speaker 3: Mark Zuckerberg will do great. 380 00:17:45,600 --> 00:17:49,639 Speaker 2: Yeah good, Just worried. But I was speaking to a 381 00:17:49,720 --> 00:17:54,360 Speaker 2: Lapshaw this week. He co wrote the Sacrini piece that 382 00:17:54,520 --> 00:17:57,280 Speaker 2: tanked the markets that one day in February. I was 383 00:17:57,320 --> 00:18:01,200 Speaker 2: on vacation. He wrote a part three this week, and 384 00:18:01,359 --> 00:18:03,200 Speaker 2: we talked to him on the television. 385 00:18:04,840 --> 00:18:05,240 Speaker 3: Fair one. 386 00:18:05,480 --> 00:18:08,560 Speaker 2: No, I mean we talked about it. So he had 387 00:18:08,600 --> 00:18:12,720 Speaker 2: an interesting one. I don't know, I feel like part 388 00:18:12,720 --> 00:18:15,160 Speaker 2: two was the one that really was it part two? 389 00:18:16,000 --> 00:18:19,520 Speaker 2: But yeah, yeah, I was on vacation, so you know part. 390 00:18:19,320 --> 00:18:22,840 Speaker 3: One was like the hipster breakfast that nobody read. 391 00:18:23,119 --> 00:18:25,879 Speaker 2: Yeah, yeah, I was on vacation. So I was like, 392 00:18:25,880 --> 00:18:29,280 Speaker 2: I'll just let this blow over. Fine, and then there 393 00:18:29,320 --> 00:18:33,520 Speaker 2: was a war anyway, So he wrote that the AI 394 00:18:33,600 --> 00:18:36,800 Speaker 2: complex and the consumer economy are increasingly on opposite sides 395 00:18:36,840 --> 00:18:40,160 Speaker 2: of the same trade. Every investment today in an AI 396 00:18:40,280 --> 00:18:44,440 Speaker 2: company or beneficiary carries an implicit short on the consumer economy, 397 00:18:44,440 --> 00:18:45,640 Speaker 2: and I thought that was kind of interesting. 398 00:18:45,720 --> 00:18:47,680 Speaker 3: What does that mean consumer economy? 399 00:18:48,240 --> 00:18:54,280 Speaker 2: Because basically, if you're replacing human workers. That's a dollar 400 00:18:54,400 --> 00:18:57,120 Speaker 2: of household income that's lost, so people will have less 401 00:18:57,119 --> 00:18:57,840 Speaker 2: money to spend. 402 00:18:58,800 --> 00:19:02,199 Speaker 3: I don't think that's an entirely coherent macro vision. I think, like, 403 00:19:02,280 --> 00:19:03,600 Speaker 3: you know, this is what I think would say, like, 404 00:19:03,840 --> 00:19:07,679 Speaker 3: in a world where AI takes over all jobs and 405 00:19:07,760 --> 00:19:12,000 Speaker 3: therefore no people have income to pay for consumption, that's 406 00:19:12,080 --> 00:19:15,000 Speaker 3: not good for open AI. They're good for like Nvidio's 407 00:19:15,000 --> 00:19:17,200 Speaker 3: business model, Like you need someone to pay for the consumption, 408 00:19:17,600 --> 00:19:20,679 Speaker 3: and so the sort of rejiggering of the economy to 409 00:19:20,720 --> 00:19:22,560 Speaker 3: allow people to pay for the consumption in this world 410 00:19:22,680 --> 00:19:26,040 Speaker 3: or no one has any jobs is a interesting and like, 411 00:19:26,280 --> 00:19:28,239 Speaker 3: you know, a little bit stupid question, right, because it's 412 00:19:28,240 --> 00:19:29,880 Speaker 3: all sort of like fad to say at this point, 413 00:19:29,880 --> 00:19:31,480 Speaker 3: But like that's what I think is ready about, Like 414 00:19:31,520 --> 00:19:33,719 Speaker 3: how do we restructure the economies that when no one 415 00:19:33,720 --> 00:19:35,240 Speaker 3: has a job, they can still pay for consumption? 416 00:19:35,359 --> 00:19:35,520 Speaker 4: Yeah? 417 00:19:35,560 --> 00:19:37,720 Speaker 2: I mean, to this man's credit, he does right that 418 00:19:38,240 --> 00:19:40,399 Speaker 2: this is not sustainable and it's not something that the 419 00:19:40,440 --> 00:19:43,440 Speaker 2: AI complex, investors or society should want. 420 00:19:43,560 --> 00:19:43,720 Speaker 1: Right. 421 00:19:43,800 --> 00:19:47,439 Speaker 3: So, right, if you're open ai, you need people to 422 00:19:47,520 --> 00:19:50,760 Speaker 3: pay twenty bucks a month to chat to your porn bot, right, Yeah, 423 00:19:50,800 --> 00:19:53,879 Speaker 3: you need. That was a joke. They've they've pulled the 424 00:19:53,880 --> 00:19:54,360 Speaker 3: porn bot. 425 00:19:54,400 --> 00:19:58,359 Speaker 2: But yeah, thank you, thank you for saying that. 426 00:20:00,080 --> 00:20:04,119 Speaker 3: But uh, you need buyers, consumers, and if it displaces 427 00:20:04,160 --> 00:20:06,679 Speaker 3: everyone from their jobs, this is why, like Sam Altman 428 00:20:06,720 --> 00:20:09,040 Speaker 3: talks about universal basic income, it's the same thing. 429 00:20:09,080 --> 00:20:12,679 Speaker 2: It's Andrew Yang. Yeah, well, sure put some respect on 430 00:20:12,920 --> 00:20:13,360 Speaker 2: his name. 431 00:20:13,440 --> 00:20:16,240 Speaker 3: He doesn't run an AI company, but yes he might. 432 00:20:16,480 --> 00:20:22,160 Speaker 2: Probably it's gonna be interesting to get back to Larry 433 00:20:22,200 --> 00:20:25,480 Speaker 2: Think's annual letter for like two years straight. He was 434 00:20:25,640 --> 00:20:28,800 Speaker 2: obviously hot on the climate. We don't talk about. 435 00:20:28,800 --> 00:20:29,880 Speaker 1: ESG anymore, I know. 436 00:20:30,119 --> 00:20:33,160 Speaker 2: So maybe this is going to solve all the doom 437 00:20:33,200 --> 00:20:33,560 Speaker 2: and gloom. 438 00:20:33,880 --> 00:20:37,119 Speaker 3: Uh, it's always like it's related to the ESG stuff, right. 439 00:20:37,119 --> 00:20:39,480 Speaker 3: It's like Larry Think is in some deep sense like 440 00:20:39,480 --> 00:20:42,639 Speaker 3: an index funded manager right at his background and like whatever, 441 00:20:43,640 --> 00:20:46,719 Speaker 3: he sits atop this giant conflex that owns everything, and 442 00:20:46,760 --> 00:20:49,200 Speaker 3: so he thinks about the world as a guy who 443 00:20:49,200 --> 00:20:53,119 Speaker 3: owns everything, right, and so this year he's writing about 444 00:20:54,119 --> 00:20:56,679 Speaker 3: everyone should own everything. But in previous years he's like, 445 00:20:56,680 --> 00:20:58,800 Speaker 3: you know, if you're someone who owns everything, you can't 446 00:20:58,840 --> 00:21:02,240 Speaker 3: be like focused on the cash those of one particular 447 00:21:02,240 --> 00:21:05,080 Speaker 3: company you have to think about like society as a whole, 448 00:21:05,560 --> 00:21:09,479 Speaker 3: and so YESG was an early way to do that 449 00:21:09,560 --> 00:21:13,080 Speaker 3: where it's like, you know, the oceans rise, they'll wash 450 00:21:13,080 --> 00:21:15,560 Speaker 3: away all by companies. Let's not have that, right, And 451 00:21:15,600 --> 00:21:18,600 Speaker 3: they're like, is a different variant on a similar sort 452 00:21:18,600 --> 00:21:19,240 Speaker 3: of way. 453 00:21:19,080 --> 00:21:21,520 Speaker 2: Of thinking, Well, we'll reflect on this in two years. 454 00:21:21,520 --> 00:21:22,440 Speaker 2: Maybe he top. 455 00:21:22,280 --> 00:21:23,880 Speaker 3: Ticked it, maybe we'll go back to Yes. 456 00:21:24,600 --> 00:21:27,280 Speaker 2: Would be so fun if you just continue. 457 00:21:26,960 --> 00:21:30,080 Speaker 3: Right, gets selected and it's like, you know, it's really important, 458 00:21:30,080 --> 00:21:30,879 Speaker 3: it's climate change. 459 00:21:31,040 --> 00:21:31,600 Speaker 2: We're back. 460 00:21:45,760 --> 00:21:48,800 Speaker 3: The Information reported that SpaceX might file to go public 461 00:21:48,880 --> 00:21:49,399 Speaker 3: this week. 462 00:21:49,600 --> 00:21:51,320 Speaker 1: Yeah, it hasn't happened yet. 463 00:21:51,320 --> 00:21:54,640 Speaker 3: Well, actually they could. They might be able to file 464 00:21:54,720 --> 00:21:55,960 Speaker 3: confidential aner. I don't think it's. 465 00:21:55,840 --> 00:21:59,919 Speaker 2: Happened yet, but yeah, it's Thursday, so they have, you know, 466 00:22:00,200 --> 00:22:02,440 Speaker 2: a little bit of time left in this week. Bloomberg 467 00:22:02,480 --> 00:22:05,000 Speaker 2: News has reported this month, Yeah, such. 468 00:22:04,880 --> 00:22:06,440 Speaker 3: Was almost the same as this week. 469 00:22:06,520 --> 00:22:09,600 Speaker 2: Yeah, that's true. Bloomberg News also reported that now they're 470 00:22:09,640 --> 00:22:13,600 Speaker 2: looking to raise seventy five billion dollars. Yeah, I'm wonder 471 00:22:13,600 --> 00:22:16,600 Speaker 2: how high this number can go because the last figure 472 00:22:16,600 --> 00:22:19,120 Speaker 2: that Bloomberg News reported was like fifty billion dollars Yeah. 473 00:22:19,160 --> 00:22:21,760 Speaker 3: The interesting thing is, like it's not even the fifty 474 00:22:21,840 --> 00:22:24,359 Speaker 3: or seventy five or whatever billion that is big. Like 475 00:22:24,400 --> 00:22:28,920 Speaker 3: what's big is that there are a lot of investors 476 00:22:28,960 --> 00:22:33,320 Speaker 3: who have written pretty big tickets in SpaceX. Slash XII, 477 00:22:33,440 --> 00:22:36,320 Speaker 3: slash X is the whole mishmash of Elon companies. Yeah, 478 00:22:36,359 --> 00:22:39,840 Speaker 3: and when this company goes public, like the first day, 479 00:22:39,880 --> 00:22:42,399 Speaker 3: they'll sell whatever, seventy five billion dollars worth of stock. 480 00:22:42,440 --> 00:22:47,119 Speaker 3: But then like soon after that there will be you know, 481 00:22:48,840 --> 00:22:51,240 Speaker 3: trillion dollars of stock to sell. There'll be a lot 482 00:22:51,280 --> 00:22:53,800 Speaker 3: of stock to sell, a lot of early investors and 483 00:22:53,800 --> 00:22:56,480 Speaker 3: employees and Elon musks who want to sell stock and 484 00:22:56,560 --> 00:22:58,679 Speaker 3: raise money. And so the information talked about, Like one 485 00:22:58,680 --> 00:23:02,080 Speaker 3: thing that they're very focused on the IPO talks is 486 00:23:02,760 --> 00:23:04,919 Speaker 3: figuring out the lock up structure. You know, who you 487 00:23:04,920 --> 00:23:09,120 Speaker 3: do an IPO, You sell stock in the IPO all 488 00:23:09,119 --> 00:23:11,880 Speaker 3: the big like insiders and early investors can't sell any 489 00:23:11,920 --> 00:23:14,679 Speaker 3: more stock for six months, and then after six months 490 00:23:14,800 --> 00:23:16,800 Speaker 3: their stock comes free and there's not like often a 491 00:23:17,040 --> 00:23:19,639 Speaker 3: stock drop when everyone is able to sell and they 492 00:23:19,640 --> 00:23:22,840 Speaker 3: all sell stock at once. And I think SpaceX wants 493 00:23:22,880 --> 00:23:26,840 Speaker 3: to be more thoughtful, more aggressive, more something about that. 494 00:23:26,920 --> 00:23:29,480 Speaker 3: So it's not just like sell nothing for six months 495 00:23:29,520 --> 00:23:32,040 Speaker 3: and then cell trillion dollars with the stock in one day, 496 00:23:32,200 --> 00:23:34,800 Speaker 3: And it's more like, you know, how can we structure 497 00:23:34,840 --> 00:23:36,520 Speaker 3: that so we can get at the stock that people 498 00:23:36,560 --> 00:23:37,840 Speaker 3: are going to want to get out And that's going 499 00:23:37,920 --> 00:23:39,320 Speaker 3: to be interesting, right, There's gonna be a lot of 500 00:23:39,320 --> 00:23:41,840 Speaker 3: turnover in the stock. Yeah, And like they're greening between 501 00:23:41,840 --> 00:23:45,000 Speaker 3: the lines a little bit. All the index firms are 502 00:23:45,040 --> 00:23:49,040 Speaker 3: like thinking about how to restructure stock indexes to allow 503 00:23:49,080 --> 00:23:52,840 Speaker 3: SpaceX to get into their indexes earlier, so that it's 504 00:23:53,080 --> 00:23:55,239 Speaker 3: essentially early investors can sell the index ones and like 505 00:23:55,359 --> 00:23:58,520 Speaker 3: make that trade clear. So it's going to be it's 506 00:23:58,520 --> 00:23:58,840 Speaker 3: gonna be. 507 00:23:58,840 --> 00:24:01,720 Speaker 2: A lot of stock, yeah, particularly interested in the index 508 00:24:01,760 --> 00:24:02,280 Speaker 2: side of things. 509 00:24:02,359 --> 00:24:04,720 Speaker 1: Yeah, obviously, Yeah, people are mad about it. 510 00:24:04,760 --> 00:24:06,200 Speaker 3: People are mad about like the index one. 511 00:24:06,280 --> 00:24:08,240 Speaker 1: No, I don't know, YAX managers not. 512 00:24:08,160 --> 00:24:11,120 Speaker 3: The index one. Is the index providers changing their rules 513 00:24:11,440 --> 00:24:13,639 Speaker 3: like NASDAK is talking about changing the rules of the 514 00:24:13,680 --> 00:24:15,560 Speaker 3: day is like one hundred and like even S and 515 00:24:15,600 --> 00:24:19,399 Speaker 3: P is like you know, I mean we could that's basically. 516 00:24:19,280 --> 00:24:22,080 Speaker 2: Yes, I could see. I was actually having this conversation yesterday. 517 00:24:21,720 --> 00:24:24,399 Speaker 3: Like it was all the talk of the at the 518 00:24:24,440 --> 00:24:25,200 Speaker 3: ATF country. 519 00:24:25,720 --> 00:24:28,480 Speaker 2: No, but it should have been, honestly. But there's the 520 00:24:28,520 --> 00:24:30,440 Speaker 2: idea out there that part of the reason you don't 521 00:24:30,440 --> 00:24:34,199 Speaker 2: want freshly public companies in your index is because they 522 00:24:34,280 --> 00:24:36,480 Speaker 2: need a period to season and like maybe get through 523 00:24:36,520 --> 00:24:38,480 Speaker 2: some of the weirdness that you're talking about when it 524 00:24:38,480 --> 00:24:39,680 Speaker 2: comes to lock ups, et cetera. 525 00:24:39,800 --> 00:24:41,560 Speaker 3: Yeah, I know, but like but part of like the 526 00:24:41,600 --> 00:24:44,399 Speaker 3: weirdness is just like straightforward to supplying to men stuff 527 00:24:44,400 --> 00:24:47,479 Speaker 3: for it. You have like volatility because like the company 528 00:24:47,480 --> 00:24:50,040 Speaker 3: goes public and then it's seasons or whatever for a 529 00:24:50,080 --> 00:24:53,120 Speaker 3: little while, and then there's a day when everyone can 530 00:24:53,119 --> 00:24:56,280 Speaker 3: sell their stock, and so the stock bounces around in 531 00:24:56,359 --> 00:24:58,679 Speaker 3: anticipation of that day, and then after that day and 532 00:24:58,680 --> 00:25:00,400 Speaker 3: then it settles down, and then like the there's another 533 00:25:00,440 --> 00:25:02,120 Speaker 3: day when the nix Fens have to buy the stye 534 00:25:02,160 --> 00:25:03,840 Speaker 3: and then it goes up, you know, and like if 535 00:25:03,840 --> 00:25:07,320 Speaker 3: you can mush those things together, you reduce some of 536 00:25:07,359 --> 00:25:08,000 Speaker 3: that volatility. 537 00:25:08,080 --> 00:25:09,119 Speaker 1: Yeah, there's a day. 538 00:25:09,000 --> 00:25:12,119 Speaker 3: Where like all the early investors can sell to s 539 00:25:12,119 --> 00:25:13,960 Speaker 3: and P five hundred x fense and like you know 540 00:25:14,240 --> 00:25:17,600 Speaker 3: that's volatile. Yeah, I don't know, it's like somebody exaggerated, 541 00:25:17,680 --> 00:25:18,760 Speaker 3: But yeah. 542 00:25:18,760 --> 00:25:22,880 Speaker 2: I guess we'll find out what these index overlords decide. 543 00:25:22,920 --> 00:25:25,480 Speaker 2: But I feel like there were a few different SpaceX 544 00:25:25,520 --> 00:25:28,240 Speaker 2: tentacles this week. You wrote about this one that, you know, 545 00:25:28,280 --> 00:25:31,240 Speaker 2: when it was reported by the Information that SpaceX could 546 00:25:31,240 --> 00:25:33,879 Speaker 2: file as soon as this week, you saw a bunch 547 00:25:34,080 --> 00:25:38,879 Speaker 2: of space related and satellite stocks surge, including EchoStar. 548 00:25:39,280 --> 00:25:45,480 Speaker 3: Yeah, so EchoStar is arguably a SpaceX treasury company. 549 00:25:45,560 --> 00:25:47,879 Speaker 2: It's not really I was thinking about dats. 550 00:25:47,960 --> 00:25:50,679 Speaker 1: Yeah, but it's a it's a real business, a real 551 00:25:50,720 --> 00:25:51,360 Speaker 1: bit has like a. 552 00:25:51,480 --> 00:25:53,800 Speaker 3: You know, direct TV and stuff, but it's like largely 553 00:25:53,840 --> 00:25:56,000 Speaker 3: a collection of spectrum licenses that it's like in the 554 00:25:56,040 --> 00:25:58,920 Speaker 3: process of selling off, and it's sold some of them 555 00:25:58,960 --> 00:26:02,159 Speaker 3: for cash and some of them to SpaceX for like 556 00:26:02,280 --> 00:26:06,680 Speaker 3: eleven billion dollars of SpaceX stock, And so if you 557 00:26:06,760 --> 00:26:09,240 Speaker 3: zoom way out, it's like it's like kind of a 558 00:26:09,240 --> 00:26:12,080 Speaker 3: pot of cash plus some SpaceX shares and you know, 559 00:26:12,200 --> 00:26:14,520 Speaker 3: you can that's just the proxy for SpaceX, and so 560 00:26:14,800 --> 00:26:16,520 Speaker 3: people have been sort of treating it as a proxy 561 00:26:16,520 --> 00:26:19,360 Speaker 3: for SpaceX. It's come up a lot, and it went 562 00:26:19,440 --> 00:26:23,639 Speaker 3: up when SpaceX was reported to be planning on i 563 00:26:23,680 --> 00:26:25,960 Speaker 3: PAS soon the other space companies I. 564 00:26:25,920 --> 00:26:29,439 Speaker 1: Don't really get I know, I know, surely if you've. 565 00:26:29,320 --> 00:26:31,560 Speaker 3: Got a space portfillo, you got to sell some space 566 00:26:31,600 --> 00:26:33,200 Speaker 3: companies to make room for SpaceX. 567 00:26:33,440 --> 00:26:34,120 Speaker 1: Yeah. 568 00:26:34,200 --> 00:26:37,280 Speaker 2: Yeah, so, I mean it wasn't as clean of an 569 00:26:37,320 --> 00:26:41,000 Speaker 2: explanation for those ones. But in the case of EchoStar, okay, 570 00:26:41,000 --> 00:26:44,680 Speaker 2: they have a bunch of SpaceX stock, what happens when 571 00:26:44,800 --> 00:26:49,520 Speaker 2: SpaceX goes public? Like, how would the shareholders of echo 572 00:26:49,600 --> 00:26:50,679 Speaker 2: Star sort of feel that? 573 00:26:51,440 --> 00:26:53,040 Speaker 3: I don't know, I don't know what their plan is. 574 00:26:53,160 --> 00:26:55,880 Speaker 3: I think to some extent people think of it as 575 00:26:55,880 --> 00:26:58,720 Speaker 3: like a capital return play, where like they're selling Spectrum 576 00:26:58,760 --> 00:27:00,919 Speaker 3: for cash and stock and events. You sort of end 577 00:27:01,000 --> 00:27:04,680 Speaker 3: up with like a much smaller business and a big 578 00:27:04,720 --> 00:27:06,800 Speaker 3: pile of cash and stock, and then you start thinking 579 00:27:06,800 --> 00:27:09,119 Speaker 3: about how to return that cash and stock to shoulders. 580 00:27:09,880 --> 00:27:13,159 Speaker 3: And the cash is fairly easy and the stock is 581 00:27:13,200 --> 00:27:16,440 Speaker 3: not that hard, and so you end up somehow extracting 582 00:27:16,440 --> 00:27:19,120 Speaker 3: some space stock out of a eco store or they 583 00:27:19,160 --> 00:27:20,280 Speaker 3: sell it in cash. 584 00:27:20,480 --> 00:27:21,680 Speaker 2: But that's exciting. 585 00:27:21,920 --> 00:27:22,560 Speaker 3: Yeah. 586 00:27:22,720 --> 00:27:24,840 Speaker 2: I was also excited to talk about this because there's 587 00:27:24,880 --> 00:27:26,360 Speaker 2: a closed unfund angle here as well. 588 00:27:26,400 --> 00:27:27,280 Speaker 3: Here's a closed unfund. 589 00:27:27,400 --> 00:27:28,280 Speaker 1: Yeah, more than one. 590 00:27:28,320 --> 00:27:31,119 Speaker 3: Maybe we taked ages ago about destiny d X y 591 00:27:31,240 --> 00:27:34,639 Speaker 3: Z yeah, and this week or I guess last week, 592 00:27:35,119 --> 00:27:40,119 Speaker 3: this insurging. There's the fund Rise Yes, innovation fund called 593 00:27:40,280 --> 00:27:43,399 Speaker 3: which is natrating at like twelve hundred percent of navy 594 00:27:43,640 --> 00:27:46,000 Speaker 3: or it was it was, Yeah, it's not a little bit. 595 00:27:46,119 --> 00:27:48,560 Speaker 2: Stron came out with a short against it on Thursday. 596 00:27:48,920 --> 00:27:50,960 Speaker 3: Is the short thesis this is trading at twelve hundred 597 00:27:50,960 --> 00:27:51,679 Speaker 3: percent of navy. 598 00:27:51,960 --> 00:27:54,639 Speaker 1: Basically, yeah, that's a good short thesis. 599 00:27:54,880 --> 00:28:00,639 Speaker 2: Let's see. I'm oh yes, questions simple math and asset value. 600 00:28:00,480 --> 00:28:03,320 Speaker 3: Simple mouth and has a value right right, So it's 601 00:28:03,359 --> 00:28:05,400 Speaker 3: like it's a closed and fund. It's a small fund. 602 00:28:05,400 --> 00:28:07,639 Speaker 3: It's like six hundred million dollars. It owns stock in 603 00:28:07,760 --> 00:28:09,760 Speaker 3: like open AI, Anthropics, SpaceX, like. 604 00:28:09,760 --> 00:28:11,679 Speaker 1: Big name, all the bill, the big ones. 605 00:28:11,760 --> 00:28:13,880 Speaker 3: And it was like a privately managed, clothed in fund 606 00:28:13,880 --> 00:28:16,359 Speaker 3: that has like gone public but most of its shares 607 00:28:16,359 --> 00:28:19,040 Speaker 3: are locked up. So the actual like amount of stock 608 00:28:19,160 --> 00:28:21,879 Speaker 3: that is available is like in the tens millions of 609 00:28:21,920 --> 00:28:24,320 Speaker 3: dollars they've had more than ten percent of the shares 610 00:28:24,320 --> 00:28:27,080 Speaker 3: are available, so it's not one hundreds of millions of dollars, 611 00:28:27,640 --> 00:28:30,760 Speaker 3: And a lot of people want to own SpaceX anyway 612 00:28:30,760 --> 00:28:32,720 Speaker 3: they can get it, and so there's a lot of 613 00:28:32,720 --> 00:28:36,240 Speaker 3: demand for that, like relatively small stub of fundraise innovation 614 00:28:36,400 --> 00:28:40,880 Speaker 3: fund stock, and not a lot of supply, and so 615 00:28:40,920 --> 00:28:43,320 Speaker 3: it's trading it, you know, traded up to twelve hundred 616 00:28:43,320 --> 00:28:46,080 Speaker 3: percent of NAV and at twelve hundred percent of NAV, 617 00:28:46,200 --> 00:28:48,840 Speaker 3: you're not getting any SpaceX exposure. You're just getting exposure 618 00:28:48,880 --> 00:28:49,560 Speaker 3: to the premium. 619 00:28:50,040 --> 00:28:53,000 Speaker 2: Right that's said before, I have a great idea for 620 00:28:53,040 --> 00:28:57,400 Speaker 2: Bill Lackman. Oh, he should put space X in his 621 00:28:57,480 --> 00:28:59,320 Speaker 2: clothes and funds and then he won't have to worry 622 00:28:59,360 --> 00:29:00,000 Speaker 2: about the discount. 623 00:29:00,360 --> 00:29:03,200 Speaker 3: It's true, you know, someone pointing out to me there's 624 00:29:03,200 --> 00:29:07,560 Speaker 3: SpaceX and all sorts of clothes end funds, including a 625 00:29:07,560 --> 00:29:12,880 Speaker 3: blue Owl technology course, a little bit of SpaceX stock. 626 00:29:13,240 --> 00:29:14,600 Speaker 1: And it's like, I feel. 627 00:29:14,400 --> 00:29:16,400 Speaker 3: Like like one like important move that you can make 628 00:29:16,440 --> 00:29:18,400 Speaker 3: in today's financial markets is like putting up a big 629 00:29:18,440 --> 00:29:21,080 Speaker 3: sign saying, well, you own some SpaceX and then sort 630 00:29:21,080 --> 00:29:23,680 Speaker 3: of see if people, you know, start paying a premium 631 00:29:23,680 --> 00:29:24,160 Speaker 3: for your stock. 632 00:29:24,240 --> 00:29:26,880 Speaker 2: Well, we'll see. I'm also curious to see what happens, 633 00:29:27,200 --> 00:29:30,840 Speaker 2: obviously when SpaceX goes public, because a lot of these 634 00:29:31,400 --> 00:29:35,120 Speaker 2: funds also are subject to a lock of period or 635 00:29:35,120 --> 00:29:36,680 Speaker 2: at least a lot of the spbs. 636 00:29:36,800 --> 00:29:39,440 Speaker 3: Wait, can I tell you an unrelated elon Musk thing. 637 00:29:39,320 --> 00:29:40,200 Speaker 2: I was hoping you would. 638 00:29:40,440 --> 00:29:41,200 Speaker 3: That is amazing. 639 00:29:41,440 --> 00:29:41,720 Speaker 4: Tell me. 640 00:29:41,800 --> 00:29:43,880 Speaker 3: Okay, So he lost the Securities Forrod trial this week 641 00:29:44,040 --> 00:29:45,920 Speaker 3: or last week. He agreed to buy Twitter in twenty 642 00:29:45,920 --> 00:29:47,920 Speaker 3: twenty two. He like backed out of the deal. He 643 00:29:47,960 --> 00:29:50,560 Speaker 3: like tweeted publicly like the deal is temper around hold. 644 00:29:51,080 --> 00:29:53,560 Speaker 3: The stock dropped. Eventually he had to close the deal. 645 00:29:53,800 --> 00:29:56,920 Speaker 3: People who sold stock when he tweeted that sued for 646 00:29:56,960 --> 00:29:59,720 Speaker 3: securities that it was a weird case. They sued in 647 00:29:59,840 --> 00:30:02,640 Speaker 3: the a federal court in California, and they won. Last 648 00:30:02,640 --> 00:30:06,640 Speaker 3: week He's lost the securitiest FROD case. Like the damages 649 00:30:06,640 --> 00:30:09,280 Speaker 3: haven't been determined yet, but they could be billions of dollars. 650 00:30:09,400 --> 00:30:12,280 Speaker 3: It's a little nuts. But anyway, this week, his lawyer, 651 00:30:12,320 --> 00:30:16,120 Speaker 3: Alex Spira, sent a letter to the court basically saying, 652 00:30:16,120 --> 00:30:18,680 Speaker 3: like we should have a mistrial. There is misconduct in 653 00:30:18,720 --> 00:30:20,520 Speaker 3: the jury room. The juri had to fill out some 654 00:30:20,640 --> 00:30:24,000 Speaker 3: form about like you know, like the stock drops and 655 00:30:24,440 --> 00:30:27,120 Speaker 3: the one of the numbers on this forum was four 656 00:30:27,160 --> 00:30:30,880 Speaker 3: dollars and twenty cents. Oh boy, and the letter this 657 00:30:31,040 --> 00:30:35,000 Speaker 3: like insane letter, like this long passionate yet like legalistic 658 00:30:35,040 --> 00:30:37,040 Speaker 3: letter that Alex Bira sent to the court is like 659 00:30:37,400 --> 00:30:40,080 Speaker 3: they filled out all these numbers in black ink except 660 00:30:40,560 --> 00:30:44,040 Speaker 3: for the four twenty, which they wrote in larger font 661 00:30:44,080 --> 00:30:46,920 Speaker 3: and in blue ink to drive home the fact that 662 00:30:47,040 --> 00:30:50,080 Speaker 3: it was four twenty, a number previously associated with the 663 00:30:50,080 --> 00:30:53,240 Speaker 3: Elon Musk. Good lord, so someone said it to me, 664 00:30:53,280 --> 00:30:55,960 Speaker 3: saying Elon Musk doesn't think four twenty is funny anymore. 665 00:30:57,120 --> 00:31:01,520 Speaker 3: But it's like what a life he has? Any I've 666 00:31:01,560 --> 00:31:03,560 Speaker 3: ever been more put upon the Elon Monk. People are 667 00:31:03,600 --> 00:31:05,880 Speaker 3: just making fun of him at four twenty. Can imagine 668 00:31:05,920 --> 00:31:08,560 Speaker 3: finding him liable for securities read it's weird that. 669 00:31:08,880 --> 00:31:10,760 Speaker 2: Does any of it matter to him? 670 00:31:11,040 --> 00:31:13,160 Speaker 3: Rationally? No, but like emotionally, I think very much so. 671 00:31:21,680 --> 00:31:23,280 Speaker 3: And that was the Money Stuff Podcast. 672 00:31:23,560 --> 00:31:25,720 Speaker 2: I'm Matt Levine and I'm Katie Greifeld. 673 00:31:25,920 --> 00:31:28,040 Speaker 3: You can find my work by subscribing to the Money 674 00:31:28,040 --> 00:31:30,040 Speaker 3: Stuff newsletter on Bloomberg dot. 675 00:31:29,840 --> 00:31:33,360 Speaker 2: Com, and you can find me on Bloomberg TV every 676 00:31:33,440 --> 00:31:36,600 Speaker 2: day on the Clothes between three and five pm Eastern. 677 00:31:36,880 --> 00:31:38,800 Speaker 3: We'd love to hear from you. You can send an 678 00:31:38,800 --> 00:31:42,080 Speaker 3: email to Money Pod at Bloomberg dot net. Ask us 679 00:31:42,080 --> 00:31:44,080 Speaker 3: a question and we might answer it on the air. 680 00:31:44,320 --> 00:31:46,920 Speaker 2: You can also subscribe to our show wherever you're listening 681 00:31:46,960 --> 00:31:48,800 Speaker 2: right now and leave us a review. It helps more 682 00:31:48,840 --> 00:31:49,680 Speaker 2: people find the show. 683 00:31:50,280 --> 00:31:53,600 Speaker 3: The Money Stuff Podcast is produced by Moses Onam and 684 00:31:53,640 --> 00:31:54,680 Speaker 3: Alexis Hot. 685 00:31:55,080 --> 00:31:57,840 Speaker 2: Our theme music was composed by Blake Maples. 686 00:31:58,080 --> 00:32:01,640 Speaker 3: Amy Keen is our executive Thanks for listening to The 687 00:32:01,640 --> 00:32:04,880 Speaker 3: Money Stuff Podcast. We'll be back next week with more stuff.