WEBVTT - Exploding Pagers Blamed On Israel & Fed Cut Record Bets Risk

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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<v Speaker 1>Daybake podcast, available every morning on Apples, Spotify or whatever

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<v Speaker 1>you listen. It's Wednesday, the eighteenth of September in London.

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<v Speaker 1>I'm Caroline Hepkit and.

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<v Speaker 2>I'm Stephen Carroll. Coming up today. Exploding pagers kill nine

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<v Speaker 2>and injure thousands more in Lebanon as Hezbala blames Israel.

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<v Speaker 1>Twenty five or fifty, the Fed decides today as traders

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<v Speaker 1>lock themselves into record bets on a half point cut.

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<v Speaker 2>Plus the Hedge Fund, Family, Tree, Millennium, and Citadel nurture

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<v Speaker 2>a fourteen billion dollar new generation, but there's no guarantee

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<v Speaker 2>of replicating their elder's success.

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<v Speaker 1>Let's start with a roundup of our top stories.

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<v Speaker 2>At least nine people have been killed and some three

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<v Speaker 2>thousand injured after thousands of pagers exploded across Lebanon. The

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<v Speaker 2>militant group Hezbollah has accused Israel of orchestrating the attack,

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<v Speaker 2>raising fears of an escalation and the conflict that's seen

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<v Speaker 2>near daily skirmishes for much of the last year. Israel

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<v Speaker 2>has declined to comment. Here's how US State Department spokesperson

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<v Speaker 2>Matthew Miller reacted, we.

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<v Speaker 3>Are always concerned about escalation. We are always concerned about

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<v Speaker 3>any type of event that may cause further escalation, and

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<v Speaker 3>it remains our message to both Israel and to other

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<v Speaker 3>parties that they needed to do everything they can to

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<v Speaker 3>try and reach a diplomatic resolution.

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<v Speaker 2>Matthew Miller says the United States was not aware of

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<v Speaker 2>the incident in advance or involved with the device blasts.

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<v Speaker 1>It is not yet clear how the pages exploded, but

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<v Speaker 1>theories range from the batteries being triggered to overheat to

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<v Speaker 1>hidden explosives in the devices. The New York Times reports

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<v Speaker 1>that US officials and others briefed on the operation say

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<v Speaker 1>small amounts of explosive and remote trigger switches were implanted

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<v Speaker 1>into the devices, which had been ordered from a Taiwanese company.

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<v Speaker 1>Bloomberg has not been able to verify those reports, and

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<v Speaker 1>the Taiwanese firm god Apollo has denied it manufactured the

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<v Speaker 1>pages used in the attacks. The firm did confirm it

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<v Speaker 1>licenses its brand to at least one other company, but

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<v Speaker 1>declined to provide any names.

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<v Speaker 2>The attack adds to tentions that have been building since July,

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<v Speaker 2>when Israel assassinated a key commander of his BILA in Beirut,

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<v Speaker 2>the prospect of a wider war in the Middle East,

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<v Speaker 2>Russia's ongoing the invasion of Ukraine, and growing China US

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<v Speaker 2>tensions are now an increasing focus for diplomats and world leaders.

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<v Speaker 2>Speaking yesterday, JP Morgan, Chair and CEO Jamie Diamond, reiterated

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<v Speaker 2>that he believes we should be more concerned about geopolitical

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<v Speaker 2>risks than whether the United States goes into recession. Here

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<v Speaker 2>are some of his key thoughts from a conversation at

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<v Speaker 2>the Financial Markets Quality Conference in Washington.

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<v Speaker 4>The most important thing that dwarfs all other things, that's

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<v Speaker 4>really important, far more important today there's been probably since

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<v Speaker 4>nineteen forty five, is this war Inkra, what's going on

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<v Speaker 4>in Israel, in the Middle East, or americantal Asia with

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<v Speaker 4>China and the attack fundamentally on the rule of law

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<v Speaker 4>there was set up after World War Two. This may

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<v Speaker 4>affect the free and democratic world for the next one

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<v Speaker 4>hundred years. And I think that's the most important thing.

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<v Speaker 4>I think people overly focused on your game for soft

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<v Speaker 4>LANDI and hard landing. Honestly, mosto has been through all

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<v Speaker 4>that stuff. It doesn't matter as.

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<v Speaker 2>Much Jamie Diamond also weighed in on today's highly likely

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<v Speaker 2>FED rate cut. The JP Morgan CEO says that whether

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<v Speaker 2>the center bank goes for a quarter point or half

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<v Speaker 2>point cut, the move is quote not going to be

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<v Speaker 2>earth shattering.

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<v Speaker 1>Record wages have been placed though, on the FED easing

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<v Speaker 1>rates later as the day, with most targeting a half

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<v Speaker 1>point cut. Bets on October. FED fund futures have topped

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<v Speaker 1>any activity since nineteen eighty eight, and some risk sharp

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<v Speaker 1>losses if policymakers opt for a standard sized reduction. Forecasters

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<v Speaker 1>are largely anticipating a quarter point cut to five five percent,

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<v Speaker 1>but economists at JP Morgan expect a bigger half point move.

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<v Speaker 1>The hedge fund founder Ray Dallio says that a quarter

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<v Speaker 1>point adjustment would be beneficial for creditors.

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<v Speaker 5>What does that that have to do. FED has to

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<v Speaker 5>keep interest rate high enough to satisfy the creditors that

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<v Speaker 5>they're going to get a real return without having them

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<v Speaker 5>so high that the debtors have a problem. So, now,

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<v Speaker 5>if we're looking at this, whether it's twenty five or

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<v Speaker 5>fifty basis points, twenty five basis points would be the

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<v Speaker 5>right thing to do. If you look at the whole

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<v Speaker 5>picture as a whole.

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<v Speaker 1>Ray Dallio from Bridgewater Associates speaking there beyond today, investors

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<v Speaker 1>see a more aggressive path of reductions this year than

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<v Speaker 1>the series of quarter point cuts expected by economists. We

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<v Speaker 1>will have live coverage on Bloomberg of the Fed's decision

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<v Speaker 1>at seven pm London time, and have chaired your Own

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<v Speaker 1>Powers press conference at seven thirty pm.

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<v Speaker 2>Blackrock and Microsoft teaming up to invest in data centers

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<v Speaker 2>and other infrastructure supporting artificial intelligence. The story Bloomberg's Charlie Pallace.

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<v Speaker 6>The companies say the strategy, dubbed the Global AI Infrastructure

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<v Speaker 6>Investment Partnership, while aimed to attract thirty billion of private

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<v Speaker 6>equity capital, leveraging that to as much as one hundred

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<v Speaker 6>billion to invest. According to a statement, the infrastructure investments,

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<v Speaker 6>including energy projects, will be mostly in the US, with

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<v Speaker 6>a portion of the funds being deployed in US partner countries.

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<v Speaker 6>The firms are also teaming up with Global Infrastructure Partners

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<v Speaker 6>and Abu Dhabi's MGX, which was created specifically this year

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<v Speaker 6>to invest in AI in New York. Charlie Pellett Bloomberg Radio.

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<v Speaker 1>Steve Cohen has stopped trading fer point seventy two, where

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<v Speaker 1>he will remain Cocio, the billionaire hedge fund founder and

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<v Speaker 1>owner of the New York Mets, plans to focus on

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<v Speaker 1>driving growth and developing talent. The firm that Cohen founded

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<v Speaker 1>manages a record thirty five point two billion dollars as

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<v Speaker 1>of the first of July, by giving him a net

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<v Speaker 1>worth of nearly fourteen point seven billion dollars and making

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<v Speaker 1>him one of the one hundred richest Americans.

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<v Speaker 2>The German finance Ministry is sticking to its commitment to

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<v Speaker 2>sell off its entire stake in Comerence Bank. That's despite

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<v Speaker 2>Unicredit's takeover ambitions. Bloomberg's teama at A Baio has the story.

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<v Speaker 7>Unicredit's sudden move on Commertz Bank may have caught Germany's

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<v Speaker 7>government off guard, but it hasn't altered their plans to

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<v Speaker 7>offload shares in the firm. Bloomberg understands that divesting from

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<v Speaker 7>the lender completely remains the goal, as previously agreed by

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<v Speaker 7>the country's ruling coalition. However, it's not clear whether Chancellor

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<v Speaker 7>Olaf Schultz agrees with the Finance Ministry's intentions. Any decision

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<v Speaker 7>on further stock sales will need approval from a committee

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<v Speaker 7>including officials from his office. For now, at least, the

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<v Speaker 7>path ahead remains uncertain. A ministry representative sent a decision

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<v Speaker 7>on how to proceed will be made in due court

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<v Speaker 7>following further analysis in London. Tea Adebayo Bloomberg Radio.

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<v Speaker 2>In a moment, we'll bring you more on that attack

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<v Speaker 2>using exploding pagers in the Middle East. Plus we'll look

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<v Speaker 2>ahead today's much anticipated Federal Reserve decision. But another story

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<v Speaker 2>that copp Meyer this morning, a household name filing for bankruptcy.

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<v Speaker 2>This provoked an unusual response in the newsroom when the

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<v Speaker 2>headlines came through a little bit earlier this morning. I

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<v Speaker 2>didn't think that so many people were without attach to Topperware.

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<v Speaker 1>No, I've never a bit. Have you been to a

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<v Speaker 1>Topperware party ever? No, No, neither vibe. But obviously it's

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<v Speaker 1>such a huge and well known historic brand in the US.

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<v Speaker 5>Yeah.

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<v Speaker 2>Indeed, And look, it's been a company that's been struggling

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<v Speaker 2>since twenty twenty. Back then it warned of its ability

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<v Speaker 2>to stay in business. As of June this year, the

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<v Speaker 2>plan to close its only US factory and layoff almost

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<v Speaker 2>one hundred and fifty workers. So this bankruptcy filing in

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<v Speaker 2>Delaware has been long in the preparation. They've been long

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<v Speaker 2>negotiations running up to it. The company has more than

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<v Speaker 2>seven hundred million dollars in loans. Founded though in nineteen

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<v Speaker 2>forty six, Yeah, to bring its plastic products to the world.

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<v Speaker 1>Yeah, there were so many plastics makers now though, to compete,

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<v Speaker 1>aren't they? I mean, I think the equivalent in Europe

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<v Speaker 1>is probably TetraPak Switzerland, which was actually founded only a

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<v Speaker 1>few years later in nineteen fifty one. So anyway, that's

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<v Speaker 1>of interest this morning, a historic brand filing for bankruptcy.

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<v Speaker 1>One of the stories you can read on the Bloomberg terminal.

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<v Speaker 2>That's bringing more now in our top story though, the

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<v Speaker 2>exploding pages and Lebanon that have killed a number of

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<v Speaker 2>people and left thousands injured. Hezbela and Labanon have blamed

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<v Speaker 2>Israel for the attack. Our eme Ands director Roslind Matson

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<v Speaker 2>joins us now for more raz How did this attack unfold?

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<v Speaker 8>That is that it seems to have been nearly simultaneous.

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<v Speaker 9>This was not a long series of pages exploding, but largely.

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<v Speaker 8>At the same time. We know that about three thousand

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<v Speaker 8>people were wounded.

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<v Speaker 9>We've heard from one official that about half of those

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<v Speaker 9>were hes Balah fighters and several people have been killed.

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<v Speaker 9>Hospitals have been inundated with people seeking treatment, and these

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<v Speaker 9>explosions took place mainly in the southern area of Beirut,

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<v Speaker 9>and that's where Hesbelah does have a strong presence. Of course,

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<v Speaker 9>Hesbela the militant group that's backed by Iran, and there's

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<v Speaker 9>lots of footage obviously on social media of these blasts happening.

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<v Speaker 9>It's interesting, of course, because most people use mobile phones

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<v Speaker 9>now less so pages, although there are used we understand

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<v Speaker 9>by medical workers in places including Lebanon and hesbler.

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<v Speaker 8>Has relied on these kind of low tech.

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<v Speaker 9>Devices walkie talkies and pages to try and avoid interceptions.

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<v Speaker 8>So it was actually, in the end quite a smart

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<v Speaker 8>target to go for when.

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<v Speaker 9>It comes to Hesbolah. And of course Hesbla and Lebanon

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<v Speaker 9>have immediately blamed Israel for this, and there's been no

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<v Speaker 9>comment back the other way from Israel claiming responsibility.

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<v Speaker 1>What's known though about how this might have been orchestrated, Well,

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<v Speaker 1>it's the.

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<v Speaker 9>Sort of attack that would take many many months to

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<v Speaker 9>play and if not years. This is not something that

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<v Speaker 9>was probably just pulled together in the past week. It's

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<v Speaker 9>one of what we should we say, maybe the more

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<v Speaker 9>creative attacks we can recall in recent times. The initial

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<v Speaker 9>theory was that it had been potentially malware and that

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<v Speaker 9>the pages simply heated up to the point they exploded,

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<v Speaker 9>but that doesn't explain how they did so all at once,

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<v Speaker 9>and so now experts are theorizing and some reports say

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<v Speaker 9>that microscopic amounts of explosive could have been added to

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<v Speaker 9>each page at some point along the manufacturing and supply chain,

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<v Speaker 9>and then they were triggered remotely.

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<v Speaker 8>There were reports that pages could have.

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<v Speaker 9>Been sourced from Towan, although a small manufacturer there has

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<v Speaker 9>denied making the devices. But wherever they originated, there's a

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<v Speaker 9>long and complex supply chain in getting them to Hesbella fighters,

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<v Speaker 9>where anything could have happened by others. So obviously whoever

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<v Speaker 9>carried this out at some point along that supply chain

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<v Speaker 9>has intervened to potentially plant explosives pager.

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<v Speaker 2>Now Hesbela and Lebanon's government have blamed Israel for this.

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<v Speaker 2>What is that the wider significance of this attack? Could

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<v Speaker 2>this lead to an escalation?

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<v Speaker 8>Well, that is the fear.

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<v Speaker 9>Of course, we have reports that US officials, so they

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<v Speaker 9>do believe this was orchestrated by Israel. There's a long

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<v Speaker 9>history of action by Israel. They have claimed publicly the

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<v Speaker 9>killing a few months ago of a senior Hesbela figure

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<v Speaker 9>in Beirut, and of course they've been exchanging fire on

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<v Speaker 9>almost a daily basis across the border from Lebanon. Hesbela

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<v Speaker 9>says they're acting out of solidarity with Hamas, which is

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<v Speaker 9>fighting Israel in Gaza, and so the fears of that

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<v Speaker 9>broader war there, and Hesblo is obviously better trained and

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<v Speaker 9>armed frankly than Hamas, and while you know, fifteen hundred

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<v Speaker 9>injuries is significant, it doesn't really make a dent in

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<v Speaker 9>their fighting force, which is much bigger. And there's been

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<v Speaker 9>those concerns also because Israel is now saying it once

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<v Speaker 9>the residents in the north of Israel who'd been displaced

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<v Speaker 9>by these skirmishes with Hesbelah to return, and that's a

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<v Speaker 9>war objective. So again it's all seemingly building to the

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<v Speaker 9>potential for a more large scale offensive between Israel and

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<v Speaker 9>Hezbalas that would open up the wars that.

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<v Speaker 8>Israel is fighting into two proper fronts.

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<v Speaker 1>Okay, roslyin, thank you so much for being with us.

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<v Speaker 1>That is Blimberg's EMEA News director Roslyn mathieson joining us

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<v Speaker 1>this morning.

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<v Speaker 2>So to another story, Now, will the Federal Reserve cut

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<v Speaker 2>by twenty five or fifty basis points? Markets will finally

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<v Speaker 2>get an answer later to the question that's been occupying

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<v Speaker 2>investors for weeks. Now to help us look ahead to

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<v Speaker 2>the decision, our market's live executive answer, Mark Codmore is

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<v Speaker 2>with us. Mark, great to have you on. So market's

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<v Speaker 2>pricing in around thirty nine basis points of easing today

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<v Speaker 2>from the Fed. That doesn't tell us much. What's your view?

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<v Speaker 10>I think they'll do fifty. I don't think they want

0:12:46.520 --> 0:12:48.560
<v Speaker 10>to surprise the market. In fact, just so walk to

0:12:48.559 --> 0:12:50.720
<v Speaker 10>the studio, we're actually getting closer to forty than thirty nine.

0:12:51.040 --> 0:12:53.000
<v Speaker 10>I think that's kind of the tipping point for them

0:12:53.000 --> 0:12:56.360
<v Speaker 10>to do fifty. And I think that you know, it

0:12:56.440 --> 0:12:58.319
<v Speaker 10>is still in balance, much more in balance than we're

0:12:58.400 --> 0:13:01.080
<v Speaker 10>used to, but this it would be a much bigger

0:13:01.120 --> 0:13:03.000
<v Speaker 10>shock to do twenty five. So I think they will

0:13:03.040 --> 0:13:05.760
<v Speaker 10>deliver fifty, and I think it'll be a boost to

0:13:05.800 --> 0:13:07.520
<v Speaker 10>the market in the short term.

0:13:07.640 --> 0:13:09.319
<v Speaker 1>Yeah, I was going to say, what does that mean

0:13:09.360 --> 0:13:13.280
<v Speaker 1>for markets, which outcome creates more volatility? But it seems

0:13:13.280 --> 0:13:15.720
<v Speaker 1>like you think that the twenty five would would be

0:13:16.040 --> 0:13:18.840
<v Speaker 1>would perhaps have a more volatile reaction.

0:13:19.600 --> 0:13:22.000
<v Speaker 10>Yeah, at this stage, it's absolutely twenty five to be upsetting.

0:13:22.000 --> 0:13:24.120
<v Speaker 10>I think there's a perception in much of the market,

0:13:24.160 --> 0:13:26.000
<v Speaker 10>whether true or not, it doesn't matter. At the perceptions

0:13:26.000 --> 0:13:30.040
<v Speaker 10>out there that the Fed has helped guide towards fifty

0:13:30.080 --> 0:13:33.520
<v Speaker 10>through various media stories over the past week, and therefore

0:13:33.720 --> 0:13:36.080
<v Speaker 10>the twenty five would be really confusing now will be

0:13:36.160 --> 0:13:38.480
<v Speaker 10>more confusing. I accept there's a bit of divice don

0:13:38.520 --> 0:13:42.400
<v Speaker 10>the market either way. So absolutely the much more negative outcome,

0:13:42.600 --> 0:13:44.880
<v Speaker 10>a knee jerk would be on twenty five, much more

0:13:44.960 --> 0:13:49.520
<v Speaker 10>volatility as people recalibrate to that. I will say, though,

0:13:49.679 --> 0:13:53.079
<v Speaker 10>in either outcome, we've got so much rate cuts priced

0:13:53.080 --> 0:13:54.440
<v Speaker 10>into the curve over the next year and a half

0:13:54.440 --> 0:13:55.720
<v Speaker 10>that it doesn't really make a difference. If they do

0:13:55.720 --> 0:13:58.360
<v Speaker 10>twenty five today, everyone assume fifty next time. If they

0:13:58.360 --> 0:14:01.200
<v Speaker 10>do fifty today, everyone assumes twenty five time. So in

0:14:01.240 --> 0:14:04.160
<v Speaker 10>the bigger picture, after the massive volatility we get short term,

0:14:04.200 --> 0:14:06.400
<v Speaker 10>I don't necessarily think it's volatility into next week.

0:14:07.080 --> 0:14:08.760
<v Speaker 2>What are you looking out for then in terms of

0:14:08.800 --> 0:14:11.760
<v Speaker 2>the messaging that we'll get from Jerome Powell when he speaks,

0:14:11.800 --> 0:14:14.440
<v Speaker 2>and what to look for in the quarterly projections.

0:14:14.679 --> 0:14:16.720
<v Speaker 10>So what I think is going to be really really

0:14:16.720 --> 0:14:21.000
<v Speaker 10>interesting today is how they justify the move that they

0:14:21.080 --> 0:14:24.560
<v Speaker 10>go for. With my base case assumption they go fifty,

0:14:25.000 --> 0:14:28.240
<v Speaker 10>is it fifty with a very positive message that we

0:14:28.280 --> 0:14:30.160
<v Speaker 10>are getting more folks in the labor market, but you know,

0:14:30.200 --> 0:14:33.520
<v Speaker 10>we're just being preemptive. We think that the economy, you know,

0:14:33.600 --> 0:14:35.920
<v Speaker 10>rates are high enough and we can slightly ease policy.

0:14:36.280 --> 0:14:39.000
<v Speaker 10>Rather than a panicked message of like concern that is

0:14:39.040 --> 0:14:40.680
<v Speaker 10>my base case. I actually think this will be a

0:14:40.800 --> 0:14:42.920
<v Speaker 10>very very bullish fed meaning I think it'll be like

0:14:42.920 --> 0:14:45.800
<v Speaker 10>December last year, where they didn't seem to be any

0:14:45.880 --> 0:14:49.720
<v Speaker 10>kind of economic validation to the sudden aggressive signaling that

0:14:49.720 --> 0:14:53.040
<v Speaker 10>they are moving towards an easing stance, and that kind

0:14:53.080 --> 0:14:54.960
<v Speaker 10>of extended the economic cycle, which is why we've not

0:14:54.920 --> 0:14:56.840
<v Speaker 10>seen any rate cuts yet. I think that could be

0:14:56.840 --> 0:14:59.280
<v Speaker 10>similar today that if they go fifty, but say look,

0:14:59.280 --> 0:15:01.120
<v Speaker 10>we're trying to get ahead the curve. This extends the

0:15:01.160 --> 0:15:03.520
<v Speaker 10>whole economic cycle again and we get we really push

0:15:03.560 --> 0:15:06.360
<v Speaker 10>out the bull market. Now the bull market formulation will

0:15:06.400 --> 0:15:08.160
<v Speaker 10>change in terms, will be less tech focused, will be

0:15:08.160 --> 0:15:09.040
<v Speaker 10>a broadening at the valley.

0:15:09.840 --> 0:15:13.080
<v Speaker 1>After the FED decision though, Mark interesting what you say

0:15:13.320 --> 0:15:15.480
<v Speaker 1>it sets up the Bank of England meeting of course,

0:15:15.520 --> 0:15:17.160
<v Speaker 1>and the Bank of Japan. I mean we get the

0:15:17.160 --> 0:15:20.400
<v Speaker 1>August reading of CPI for the UK also the day

0:15:20.440 --> 0:15:22.640
<v Speaker 1>before the Bank of England. How does the FED set

0:15:22.720 --> 0:15:24.640
<v Speaker 1>us up for the rest of the decisions this week?

0:15:25.160 --> 0:15:27.520
<v Speaker 10>So obviously the Fed sets the kind of the tone

0:15:27.560 --> 0:15:29.920
<v Speaker 10>of whether we're going to see more dubbishness or more

0:15:29.960 --> 0:15:32.960
<v Speaker 10>hawkishness globally. So if they do deliver on the dubbish

0:15:33.040 --> 0:15:35.320
<v Speaker 10>end of the spectrums, I expect that will kind of

0:15:35.400 --> 0:15:37.360
<v Speaker 10>weigh on yields globally. But again I go back to

0:15:37.400 --> 0:15:39.120
<v Speaker 10>the fact there is so much price in the curve.

0:15:39.480 --> 0:15:41.440
<v Speaker 10>I think we get a douvish FED today. We got

0:15:41.480 --> 0:15:44.880
<v Speaker 10>fifty basis points and the two year yields bottom this week,

0:15:44.960 --> 0:15:47.600
<v Speaker 10>and we actually see yields rising to year end despite

0:15:47.600 --> 0:15:49.640
<v Speaker 10>the fifty basis points cut, because people are going to

0:15:49.680 --> 0:15:52.640
<v Speaker 10>realize they're abandoned. There are complacent non inflation, they're bullish

0:15:52.720 --> 0:15:55.280
<v Speaker 10>on the economy, or at least they're extending the economic cycle,

0:15:55.480 --> 0:15:58.000
<v Speaker 10>and that means that ultimately yields need to price out

0:15:58.040 --> 0:15:59.640
<v Speaker 10>the amount of right cuts that are priced. So I

0:15:59.720 --> 0:16:02.520
<v Speaker 10>run enough. I expect a bigger cut today, and I

0:16:02.560 --> 0:16:05.520
<v Speaker 10>think that'll actually see yields globally tick up towards the

0:16:05.600 --> 0:16:07.160
<v Speaker 10>year end after the new jerk reaction.

0:16:07.720 --> 0:16:10.360
<v Speaker 2>Mark Ledmore, our executive editor for Markets Live, thanks very

0:16:10.440 --> 0:16:12.560
<v Speaker 2>much for joining us on the program. More from Market

0:16:12.560 --> 0:16:15.000
<v Speaker 2>and his team MLIV. It's the function on the terminal.

0:16:15.760 --> 0:16:20.200
<v Speaker 1>With hedge fund titans Citadel and Millennium closed to outside

0:16:20.280 --> 0:16:24.080
<v Speaker 1>cash amid a dearth of talent able to manage their money,

0:16:24.080 --> 0:16:27.080
<v Speaker 1>some of the firm's traders are seizing the chance to

0:16:27.160 --> 0:16:29.920
<v Speaker 1>go it alone, and investors are backing them with an

0:16:29.960 --> 0:16:33.920
<v Speaker 1>avalanche of assets. The choice for the multi strategy funds

0:16:34.000 --> 0:16:37.480
<v Speaker 1>founders Ken Griffin and is the Englander, is whether to

0:16:37.640 --> 0:16:41.080
<v Speaker 1>fight this migration or whether to embrace it. Our senior

0:16:41.120 --> 0:16:43.800
<v Speaker 1>hedge funds reporting Nishan Kumar, joins us now for more

0:16:43.800 --> 0:16:47.440
<v Speaker 1>details on today's Bloomberg Big take. Nichant, really good to

0:16:47.520 --> 0:16:51.560
<v Speaker 1>speak to you. Who are these new hedge fund cubs?

0:16:51.600 --> 0:16:51.800
<v Speaker 5>Then?

0:16:53.800 --> 0:16:58.120
<v Speaker 11>Hi, good morning, So first of all, like, who are cubs?

0:16:58.840 --> 0:17:02.360
<v Speaker 11>You know, it's a female nomenclature in the hedge funds industry.

0:17:03.160 --> 0:17:06.200
<v Speaker 11>You can call it as a group of famed hedge

0:17:06.200 --> 0:17:10.679
<v Speaker 11>fund managers who all trained under Julian Robertson and now

0:17:10.760 --> 0:17:15.320
<v Speaker 11>Julian Robertson was one of his generations most renowned hedge

0:17:15.320 --> 0:17:20.760
<v Speaker 11>fund managers, spawning dozens of cubs, essentially former employees of his,

0:17:21.000 --> 0:17:25.000
<v Speaker 11>who all learned the trade at his firm before heading

0:17:25.040 --> 0:17:28.320
<v Speaker 11>out on their own. He was the founder of Tiger

0:17:28.400 --> 0:17:32.359
<v Speaker 11>Management and played like this sort of a godfather to

0:17:32.640 --> 0:17:36.600
<v Speaker 11>a new generation of hedge fund stars. He unfortunately died

0:17:36.600 --> 0:17:40.840
<v Speaker 11>in twenty twenty. But we are starting to see, you know,

0:17:40.920 --> 0:17:44.119
<v Speaker 11>others taking that role, whether they like it or not,

0:17:44.880 --> 0:17:49.479
<v Speaker 11>and Cedadel and Millennium are dominating that trend at the moment.

0:17:50.640 --> 0:17:55.320
<v Speaker 2>So what sort of money are these newer entrants attracting?

0:17:57.000 --> 0:18:01.119
<v Speaker 11>I mean, it's really unprecedented to say. The list the

0:18:01.240 --> 0:18:06.520
<v Speaker 11>three biggest startups this year, led by Bobby jan who

0:18:06.760 --> 0:18:11.840
<v Speaker 11>comes from Millennium, Diego Megia also from Millennium, and Todd

0:18:11.880 --> 0:18:16.240
<v Speaker 11>Barker who was at Citadel. Between them, they have raised

0:18:16.280 --> 0:18:20.080
<v Speaker 11>fourteen billion dollars. It's a requird amount in such a

0:18:20.080 --> 0:18:23.520
<v Speaker 11>short period of time, and this is at a time

0:18:23.760 --> 0:18:27.760
<v Speaker 11>when the hedge one industry as a whole is bleeding

0:18:28.119 --> 0:18:33.760
<v Speaker 11>tens of billions of dollars, you know for investor withdrawals.

0:18:34.119 --> 0:18:38.560
<v Speaker 11>So it's quite unprecedented. The hedge one industry has never

0:18:38.680 --> 0:18:42.840
<v Speaker 11>seen this sort of activity led by startups ever.

0:18:44.320 --> 0:18:47.160
<v Speaker 1>Okay, so a new generation then coming to the foe.

0:18:47.520 --> 0:18:50.399
<v Speaker 1>How are the giants of the industry then responding? You

0:18:50.440 --> 0:18:52.120
<v Speaker 1>sort of mentioned that.

0:18:53.680 --> 0:18:58.920
<v Speaker 11>Well, they don't have much choice, you know. I mean,

0:18:59.000 --> 0:19:04.800
<v Speaker 11>they are become affcting of their own success. They are

0:19:04.880 --> 0:19:09.440
<v Speaker 11>training this new generation of hedge fund stars who are

0:19:09.520 --> 0:19:13.119
<v Speaker 11>seeing their careers sort of maxed out at those firms,

0:19:13.119 --> 0:19:16.159
<v Speaker 11>and they're always thinking what's next. We have to remember

0:19:16.240 --> 0:19:20.800
<v Speaker 11>these are highly trained, skilled, ambitious people, so they are

0:19:20.800 --> 0:19:23.919
<v Speaker 11>not going to be satisfied within the confines of their

0:19:24.320 --> 0:19:29.439
<v Speaker 11>current homes. So multistrats can't do much about it beyond

0:19:29.520 --> 0:19:33.680
<v Speaker 11>maybe imposing longer non competes to discourage them from spinning out.

0:19:34.400 --> 0:19:38.960
<v Speaker 11>But some are responding by backing the outgoing managers. As

0:19:39.000 --> 0:19:41.880
<v Speaker 11>we have said in the story, the next best thing

0:19:42.520 --> 0:19:46.080
<v Speaker 11>to keeping talent is keeping your money with them so

0:19:46.119 --> 0:19:50.080
<v Speaker 11>that you could continue taking advantage of that talent.

0:19:51.000 --> 0:19:53.720
<v Speaker 2>This is Bloomberg Daybreak Europe, your morning brief on the

0:19:53.800 --> 0:19:56.840
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