1 00:00:00,360 --> 00:00:03,920 Speaker 1: Larry, where should we begin? There is as we were 2 00:00:03,960 --> 00:00:09,559 Speaker 1: just discussing a lot of history in this club, there's 3 00:00:09,600 --> 00:00:11,680 Speaker 1: a lot of history in this building. 4 00:00:14,280 --> 00:00:16,520 Speaker 2: So where are you going with this? 5 00:00:16,600 --> 00:00:17,960 Speaker 1: How would you characterize? 6 00:00:19,360 --> 00:00:21,800 Speaker 2: How would you characterize this moment in American history? 7 00:00:24,239 --> 00:00:27,440 Speaker 3: It's no different than anything else. We're fine. I mean, 8 00:00:27,520 --> 00:00:33,040 Speaker 3: you know, look at in our thirty seven years of 9 00:00:34,360 --> 00:00:40,880 Speaker 3: running Black Rock were not focused on the day to day. 10 00:00:43,240 --> 00:00:46,600 Speaker 3: We try to consistently talk with a narrative about long 11 00:00:46,680 --> 00:00:51,279 Speaker 3: termsm working with clients in the long run. I mean, 12 00:00:51,320 --> 00:00:55,200 Speaker 3: obviously things when you see a twenty percent market decline 13 00:00:55,200 --> 00:00:58,240 Speaker 3: in three days, obviously it has significant impacts. And the 14 00:00:58,320 --> 00:01:03,600 Speaker 3: ripple effects of of the potential of teriffs is going 15 00:01:03,640 --> 00:01:06,480 Speaker 3: to be longstanding. And so our job right now is 16 00:01:06,480 --> 00:01:11,479 Speaker 3: to just be We're having more conversation with clients. Probably 17 00:01:11,480 --> 00:01:13,760 Speaker 3: the last time we had this many client conversations that 18 00:01:13,840 --> 00:01:17,959 Speaker 3: Blackrocks was right when we closed our economy in March 19 00:01:18,040 --> 00:01:23,839 Speaker 3: of twenty twenty. And this is a type of time 20 00:01:24,200 --> 00:01:29,520 Speaker 3: where we really try to connect. We manage money for 21 00:01:30,280 --> 00:01:33,520 Speaker 3: people in one hundred and six different countries. We have 22 00:01:33,600 --> 00:01:38,000 Speaker 3: offices in thirty six countries. So what we need to 23 00:01:38,000 --> 00:01:43,120 Speaker 3: be doing every moment is bringing all this global information 24 00:01:43,200 --> 00:01:46,559 Speaker 3: that we gather with eleven plus trillion dollars of money 25 00:01:46,560 --> 00:01:49,120 Speaker 3: and hearing and paying attention to the flows and where 26 00:01:49,160 --> 00:01:56,160 Speaker 3: the money is going. But the magic sauce of Blackrock 27 00:01:56,320 --> 00:02:01,200 Speaker 3: is the last twenty percent of being local and being 28 00:02:01,320 --> 00:02:06,040 Speaker 3: really connected to each and every client worldwide and try 29 00:02:06,040 --> 00:02:07,920 Speaker 3: to really add to them. So we're bringing all this 30 00:02:08,000 --> 00:02:11,200 Speaker 3: global information, but we really try to be local in 31 00:02:11,240 --> 00:02:15,959 Speaker 3: every community where we operate and work. And as a fiduciary, 32 00:02:16,000 --> 00:02:19,520 Speaker 3: our job is to be helping Canadians right now. Our 33 00:02:19,639 --> 00:02:23,440 Speaker 3: jobs are helping Europeans now. Our job is to be 34 00:02:23,480 --> 00:02:28,200 Speaker 3: helping Americans now. And so you know, obviously markets are 35 00:02:28,240 --> 00:02:32,320 Speaker 3: down twenty percent, some stocks are down over thirty forty 36 00:02:32,360 --> 00:02:36,400 Speaker 3: percent from their high water marks of just from January. 37 00:02:38,200 --> 00:02:41,240 Speaker 3: But in the long run, I would say, in the 38 00:02:41,240 --> 00:02:43,480 Speaker 3: long run, this is more of a buying opportunity than 39 00:02:43,480 --> 00:02:46,800 Speaker 3: a selling opportunity. That doesn't mean we can't follow another 40 00:02:46,840 --> 00:02:50,760 Speaker 3: twenty percent from here too, But I do believe over 41 00:02:50,760 --> 00:02:53,680 Speaker 3: the long run the vitality of the United States will persist, 42 00:02:54,680 --> 00:02:59,360 Speaker 3: and I do and I'm still proud in terms of 43 00:02:59,440 --> 00:03:01,480 Speaker 3: working with every investor worldwide. 44 00:03:02,320 --> 00:03:03,280 Speaker 2: When you just said. 45 00:03:03,760 --> 00:03:06,880 Speaker 1: It doesn't mean that the market can't drop another twenty percent. 46 00:03:07,040 --> 00:03:09,000 Speaker 2: Yeah, bit of a gas go through the audience. 47 00:03:10,200 --> 00:03:13,560 Speaker 3: I won't like it, but it's not gonna you know, 48 00:03:13,720 --> 00:03:18,720 Speaker 3: and and and but but unlike most like let's say 49 00:03:18,960 --> 00:03:20,639 Speaker 3: eight to o nine, I don't you don't see the 50 00:03:20,760 --> 00:03:24,480 Speaker 3: leverage in the system. You see, you don't see systemic risk. 51 00:03:24,960 --> 00:03:30,280 Speaker 3: You see. This is more geopolitical issues. Look, the fundamental 52 00:03:30,280 --> 00:03:35,360 Speaker 3: issue that that we're all trying to recognize. Post World 53 00:03:35,440 --> 00:03:41,680 Speaker 3: War Two, the United States was a global stabilizer. And 54 00:03:42,040 --> 00:03:43,880 Speaker 3: I've been now you know, in July will be my 55 00:03:43,960 --> 00:03:46,840 Speaker 3: forty ninth year in finance here in New York City, 56 00:03:48,600 --> 00:03:52,680 Speaker 3: and that's been one of the foundational tenets of of 57 00:03:52,800 --> 00:03:56,280 Speaker 3: I would say the financial community that you know, we 58 00:03:56,280 --> 00:04:02,640 Speaker 3: we we live and work and grow with our economy. 59 00:04:03,200 --> 00:04:05,160 Speaker 3: And one of the main foundations in the US that 60 00:04:05,200 --> 00:04:08,040 Speaker 3: we are a global stabilizer. Obviously, in the last week 61 00:04:08,080 --> 00:04:11,880 Speaker 3: we have not been a global stabilizer, and I think 62 00:04:12,080 --> 00:04:15,880 Speaker 3: that is something that we Is this going to persist? 63 00:04:17,279 --> 00:04:20,120 Speaker 3: Are they going to be new global stabilizers in the world. Well, 64 00:04:20,120 --> 00:04:22,120 Speaker 3: if there are new global stabilizers in the world, and 65 00:04:22,160 --> 00:04:24,080 Speaker 3: I'm not suggesting there will be. These are questions that 66 00:04:24,080 --> 00:04:27,719 Speaker 3: that must be asked. You know, what is the role 67 00:04:27,760 --> 00:04:31,640 Speaker 3: of the dollar in that in that ecosystem. So there's 68 00:04:31,680 --> 00:04:34,240 Speaker 3: a lot of questions that we need to be asking yourselves. 69 00:04:35,720 --> 00:04:43,039 Speaker 3: But you know, eighty days ago in Davos, the phrase 70 00:04:43,160 --> 00:04:47,160 Speaker 3: was American exceptionalism. You heard everywhere. I would say, probably 71 00:04:47,200 --> 00:04:51,640 Speaker 3: every meeting I went to everyone who's focusing on how 72 00:04:51,680 --> 00:04:55,080 Speaker 3: to do more in the United States. And obviously that's 73 00:04:55,120 --> 00:04:58,000 Speaker 3: been thrown out right now. Obviously you could look back 74 00:04:58,040 --> 00:05:01,200 Speaker 3: and say that was, you know, just irrational exuberance of 75 00:05:01,680 --> 00:05:05,200 Speaker 3: too much related to the US. And so that we 76 00:05:05,279 --> 00:05:08,080 Speaker 3: are seeing a recalibrations. You know, seventy five percent of 77 00:05:08,120 --> 00:05:10,839 Speaker 3: the market value, this would before the last few days, 78 00:05:11,000 --> 00:05:13,360 Speaker 3: seventy five percent of the market value of the global 79 00:05:13,400 --> 00:05:16,160 Speaker 3: capital market was here in the United States. Can there 80 00:05:16,200 --> 00:05:18,800 Speaker 3: be a re ordering of that in the short run, 81 00:05:19,360 --> 00:05:23,200 Speaker 3: maybe in the middle, medium term? Sure, And so all 82 00:05:23,240 --> 00:05:26,039 Speaker 3: of this this is the type of questions. Clients have 83 00:05:26,320 --> 00:05:30,840 Speaker 3: historically underweighted Europe. Okay, so far this year that's been 84 00:05:30,880 --> 00:05:35,039 Speaker 3: a bad trade. Should clients be reorienting themselves back into Europe? 85 00:05:35,080 --> 00:05:39,400 Speaker 3: Should to be reoriented into more of a a more 86 00:05:39,480 --> 00:05:44,440 Speaker 3: broadening of a portfolio. So all these questions are being asked, 87 00:05:44,440 --> 00:05:46,240 Speaker 3: and I don't have a good answer yet. But I 88 00:05:47,120 --> 00:05:52,520 Speaker 3: am troubled by that we are not the stabilizer as 89 00:05:52,520 --> 00:05:55,919 Speaker 3: a country. We are destabilizing. And I think this is 90 00:05:55,920 --> 00:05:57,839 Speaker 3: what the financial markets are trying to grapple with. 91 00:05:58,040 --> 00:06:03,760 Speaker 1: There are, let's say, at least a couple of competing narratives. 92 00:06:04,200 --> 00:06:07,080 Speaker 1: One of those narratives is from President Trump himself. He 93 00:06:07,120 --> 00:06:10,080 Speaker 1: says that the tariffs he rolled at last Wednesday in 94 00:06:10,120 --> 00:06:13,960 Speaker 1: the Rose Garden will create an economic renaissance and make 95 00:06:14,120 --> 00:06:17,760 Speaker 1: America wealthy like never before. And then the other narrative 96 00:06:17,800 --> 00:06:20,320 Speaker 1: is the public market narrative. That's the one that's telling 97 00:06:20,360 --> 00:06:23,240 Speaker 1: us something altogether different, that the tariffs are an economic 98 00:06:23,360 --> 00:06:26,960 Speaker 1: train wreck in the making, and if anything, they'll make 99 00:06:27,040 --> 00:06:30,919 Speaker 1: not only the US but perhaps other countries a lot poorer. 100 00:06:31,240 --> 00:06:32,520 Speaker 2: Which of those narratives is right? 101 00:06:33,120 --> 00:06:35,440 Speaker 3: There's probably something in between. But you know, as a 102 00:06:35,440 --> 00:06:39,240 Speaker 3: market partsis what I'm more in the market narrative. So 103 00:06:39,320 --> 00:06:43,120 Speaker 3: let's be clear. In the United States right now, eight 104 00:06:43,160 --> 00:06:48,560 Speaker 3: percent of workers who are in manufacturing eight percent, eight 105 00:06:49,000 --> 00:06:54,039 Speaker 3: eight So how much more should it be sixteen percent? 106 00:06:54,200 --> 00:06:56,240 Speaker 3: I don't know. But it's not I don't think you know. 107 00:06:59,240 --> 00:07:02,640 Speaker 3: I looked up what they are. The new entry level 108 00:07:03,279 --> 00:07:05,880 Speaker 3: of an automotive worker is today. It's about twenty five 109 00:07:05,920 --> 00:07:08,120 Speaker 3: dollars an hour. Twenty five to twenty eight dollars an hour. 110 00:07:08,800 --> 00:07:14,520 Speaker 3: That's not that's not a great job versus today. And 111 00:07:14,720 --> 00:07:19,080 Speaker 3: and Brad Smith, the president of Microsoft, talked about this 112 00:07:19,160 --> 00:07:22,880 Speaker 3: last Monday, stating that we have we're going to have 113 00:07:22,920 --> 00:07:27,200 Speaker 3: a shortage as large as five hundred thousand electricians in 114 00:07:27,240 --> 00:07:30,680 Speaker 3: this country. Electricians today are paid over one hundred and 115 00:07:30,680 --> 00:07:33,360 Speaker 3: fifty thousand dollars a year, especially to the advanced electricians 116 00:07:33,400 --> 00:07:37,440 Speaker 3: are doing AI and all that. So there are you know, 117 00:07:37,520 --> 00:07:40,440 Speaker 3: there are many ways where we could create great jobs 118 00:07:41,120 --> 00:07:48,320 Speaker 3: instead of this whole reordering. And so I'm I'm I 119 00:07:48,360 --> 00:07:52,200 Speaker 3: believe the markets. I've always believed in the markets, and 120 00:07:52,240 --> 00:07:54,440 Speaker 3: I believe the markets are telling you the real story. 121 00:07:54,920 --> 00:07:57,280 Speaker 3: And the markets are telling it that story right now. 122 00:07:57,520 --> 00:08:00,120 Speaker 3: Could the story be a little too negative? Now? Maybe? 123 00:08:00,160 --> 00:08:02,320 Speaker 3: Could it be not negative? Not? Maybe too I'm not 124 00:08:02,360 --> 00:08:05,280 Speaker 3: here to suggest we're over this pathway. We'll have to 125 00:08:05,280 --> 00:08:10,040 Speaker 3: see how this plays out, you know. And so we're 126 00:08:10,040 --> 00:08:12,000 Speaker 3: going to have to see how this plays out. But 127 00:08:14,560 --> 00:08:17,600 Speaker 3: let me step back and respond to another statement you said. 128 00:08:19,200 --> 00:08:21,600 Speaker 3: Let me just reiterate, seventy five percent of the global 129 00:08:21,640 --> 00:08:24,400 Speaker 3: capital markets rested here in the United States. I would 130 00:08:24,480 --> 00:08:30,040 Speaker 3: say that means the United States is fabulously successful when 131 00:08:30,080 --> 00:08:32,440 Speaker 3: you have that. That being said, and I wrote this 132 00:08:32,480 --> 00:08:34,760 Speaker 3: with my CEO letter that came out a week ago today, 133 00:08:35,720 --> 00:08:39,000 Speaker 3: the biggest issue we have in capitalism, the biggest difference 134 00:08:39,000 --> 00:08:42,160 Speaker 3: that we have today is we have not seen a 135 00:08:42,240 --> 00:08:45,439 Speaker 3: broadening of the economy as much as we need to. 136 00:08:45,480 --> 00:08:47,120 Speaker 3: And I think this is what President Trump is trying 137 00:08:47,160 --> 00:08:49,160 Speaker 3: to do. How can we brought in the economy that 138 00:08:49,200 --> 00:08:52,040 Speaker 3: we can have more opportunity for more I mean, like 139 00:08:52,080 --> 00:08:54,520 Speaker 3: I said, I think we need more more you know, 140 00:08:54,720 --> 00:08:58,760 Speaker 3: more schools that helped men and women in the trades 141 00:08:58,800 --> 00:09:01,560 Speaker 3: like electricians and other where we know we have a 142 00:09:01,600 --> 00:09:04,480 Speaker 3: severe shortage right now. And the other thing I would say, 143 00:09:04,480 --> 00:09:08,240 Speaker 3: if you look across the different manufacturer expectum, there's a 144 00:09:08,240 --> 00:09:11,520 Speaker 3: lot of job openings. My biggest issue is all of this, 145 00:09:11,920 --> 00:09:15,360 Speaker 3: and this is where the market is not focusing on enough. 146 00:09:15,880 --> 00:09:18,439 Speaker 3: All of this, in my mind, is much more inflationary 147 00:09:18,559 --> 00:09:21,800 Speaker 3: than the market is expecting right now. How much more 148 00:09:21,840 --> 00:09:25,240 Speaker 3: inflationty Well, the market is talking about all the recessionary pressures, 149 00:09:25,320 --> 00:09:34,559 Speaker 3: which obviously will mute down prices. But if all the terrats, 150 00:09:34,559 --> 00:09:36,240 Speaker 3: and I'm not saying they're going to be put into place, 151 00:09:36,559 --> 00:09:38,199 Speaker 3: if all the terrafts would be it would be put 152 00:09:38,240 --> 00:09:40,760 Speaker 3: in place. Almost so many items are going to be 153 00:09:40,880 --> 00:09:45,880 Speaker 3: much more elevated, two more expensive, much, yes, more expensive. 154 00:09:45,880 --> 00:09:50,800 Speaker 3: We have we have so many needs for jobs already 155 00:09:51,480 --> 00:09:53,280 Speaker 3: and we only have we're you know, we're at four 156 00:09:53,320 --> 00:09:56,480 Speaker 3: percent of employment. When I started in walterd in nineteen 157 00:09:56,559 --> 00:10:05,640 Speaker 3: seventy six, full employment was considered six percent, and you know, 158 00:10:05,679 --> 00:10:09,200 Speaker 3: we evaluate it and now we say, maybe what is 159 00:10:09,240 --> 00:10:12,120 Speaker 3: full employment three or four? I don't know if they 160 00:10:12,160 --> 00:10:16,120 Speaker 3: even to use that term anymore. But you know, you know, 161 00:10:17,080 --> 00:10:19,520 Speaker 3: we have shortages of workers, and we're going to have 162 00:10:19,559 --> 00:10:22,080 Speaker 3: even more shortage of workers. And if you overlay a 163 00:10:22,120 --> 00:10:24,760 Speaker 3: part of the reason why we had American exceptionalism eighty 164 00:10:24,840 --> 00:10:29,839 Speaker 3: days ago and AI, the need to build out infrastructures 165 00:10:29,920 --> 00:10:32,640 Speaker 3: just as great today. And my biggest fear as we 166 00:10:32,720 --> 00:10:35,600 Speaker 3: roll out AI in the United States, building these data centers, 167 00:10:36,000 --> 00:10:40,840 Speaker 3: building our electricity grids, building out America, building out our infrastructure, 168 00:10:40,840 --> 00:10:42,920 Speaker 3: we don't have enough workers already. All of this is 169 00:10:42,960 --> 00:10:46,600 Speaker 3: going to lead to higher elevated wages, which is in 170 00:10:46,600 --> 00:10:48,600 Speaker 3: some respect a good thing, but a lot of it 171 00:10:48,640 --> 00:10:52,040 Speaker 3: is going to be elevated inflation. So this notion that 172 00:10:52,040 --> 00:10:54,400 Speaker 3: the federal Reserve is going to tighten, I mean, see 173 00:10:54,400 --> 00:10:57,760 Speaker 3: the ease four times this year. I see zero chance 174 00:10:57,800 --> 00:11:00,840 Speaker 3: of that. I mean, I'm much more worried that, you know, 175 00:11:00,880 --> 00:11:03,280 Speaker 3: we could have a we could have an you know, 176 00:11:03,559 --> 00:11:06,120 Speaker 3: elevated inflation that's going to bring rates up much higher 177 00:11:06,160 --> 00:11:06,880 Speaker 3: than they are today. 178 00:11:07,240 --> 00:11:11,520 Speaker 1: Zero chance of four or five FED cuts, depending on 179 00:11:12,280 --> 00:11:15,400 Speaker 1: what what what moment we're looking at futures prices, or 180 00:11:16,400 --> 00:11:17,920 Speaker 1: zero chance of any cuts whatsoever. 181 00:11:20,120 --> 00:11:24,120 Speaker 3: That's not an unrealistic idea because and I think the 182 00:11:24,200 --> 00:11:27,600 Speaker 3: Chairman Paul said that last week, but he said we 183 00:11:27,640 --> 00:11:29,360 Speaker 3: need to have more information, right you know, I don't 184 00:11:29,360 --> 00:11:32,480 Speaker 3: see any reason to cut right now. And that's how 185 00:11:32,520 --> 00:11:34,199 Speaker 3: I interpret his comments last week. 186 00:11:34,400 --> 00:11:39,280 Speaker 1: So you're concerned about inflation, you briefly, but. 187 00:11:39,080 --> 00:11:42,880 Speaker 3: Can I interruptxcuse me? Sure, I'm concerned about inflation if 188 00:11:43,760 --> 00:11:47,400 Speaker 3: all the proposed terrorists truly go into place at the 189 00:11:47,480 --> 00:11:53,920 Speaker 3: same time, at the same time, you have you know, 190 00:11:53,960 --> 00:11:57,920 Speaker 3: the you know, as if the president is successful and 191 00:12:00,440 --> 00:12:03,640 Speaker 3: changing the behaviors of other countries by bringing down the terrafs, 192 00:12:04,760 --> 00:12:07,440 Speaker 3: you know, we could actually the end result could be 193 00:12:07,480 --> 00:12:11,320 Speaker 3: lower terraffs across the board. And I think that's what 194 00:12:11,360 --> 00:12:14,680 Speaker 3: they're when he talks about reciprocal terrafts. He's talking about 195 00:12:14,880 --> 00:12:17,200 Speaker 3: I'm going to match your terraces and if we both 196 00:12:17,240 --> 00:12:18,800 Speaker 3: you bring him down, I'm going to bring him back down. 197 00:12:18,840 --> 00:12:21,920 Speaker 3: And so there is some value to that to read. 198 00:12:23,240 --> 00:12:27,280 Speaker 3: Our terrace system was founded post World War two, post 199 00:12:27,320 --> 00:12:32,120 Speaker 3: Korean War, where we believe that if we could lift 200 00:12:32,520 --> 00:12:37,440 Speaker 3: these other countries posts, these crisises American business, that would 201 00:12:37,480 --> 00:12:42,880 Speaker 3: be the biggest beneficiary. And we have not changed how 202 00:12:42,960 --> 00:12:47,120 Speaker 3: these asymmetric tariffs that we've created over the last eighty years. 203 00:12:47,720 --> 00:12:51,439 Speaker 3: And you know, is it is it is there a 204 00:12:51,520 --> 00:12:54,720 Speaker 3: value today to relook at how we have terrafts today 205 00:12:54,720 --> 00:12:57,760 Speaker 3: and how to try to make it more symmetrical. Sure, 206 00:12:59,640 --> 00:13:05,760 Speaker 3: and so see how this all plays out the But 207 00:13:05,880 --> 00:13:12,280 Speaker 3: the uh, my former partner rough lost time. 208 00:13:16,800 --> 00:13:20,320 Speaker 1: So you've touched on this idea, Larry, that perhaps there's 209 00:13:20,320 --> 00:13:23,600 Speaker 1: some justification for a change in. 210 00:13:24,400 --> 00:13:27,680 Speaker 3: Yeah, I mean, look at I was with a senator 211 00:13:27,720 --> 00:13:33,439 Speaker 3: today and he talked about we import twenty nine million tons, 212 00:13:33,600 --> 00:13:37,000 Speaker 3: which seems like a lot of beef from Australia. Yeah, 213 00:13:37,000 --> 00:13:40,520 Speaker 3: and yet our beef cannot go to Australia. Okay, there's 214 00:13:40,559 --> 00:13:42,640 Speaker 3: something that sounds like a legitimacy. 215 00:13:42,720 --> 00:13:46,000 Speaker 1: So that's that's one of the justifications that President's sites, 216 00:13:46,040 --> 00:13:49,280 Speaker 1: right fairness, yeah, right, other countries are, in his words, 217 00:13:49,559 --> 00:13:50,320 Speaker 1: ripping us off. 218 00:13:51,000 --> 00:13:53,160 Speaker 3: The second, I'm not going to go talk about that, Okay. 219 00:13:53,200 --> 00:13:57,880 Speaker 1: The second is revenue taxing imports will raise trillions of 220 00:13:57,920 --> 00:13:59,680 Speaker 1: dollars to pay down the federal debt. 221 00:13:59,559 --> 00:14:01,880 Speaker 3: At who's costs, So no, that's never the same. 222 00:14:01,960 --> 00:14:04,880 Speaker 1: Then there's a third, right, rein industrialization that companies will 223 00:14:04,880 --> 00:14:07,360 Speaker 1: bring jobs and factories back to America. Which of those 224 00:14:08,600 --> 00:14:10,720 Speaker 1: is that a package of arguments that makes sense? 225 00:14:12,040 --> 00:14:15,000 Speaker 3: I believe there are in some areas where we need 226 00:14:15,000 --> 00:14:18,600 Speaker 3: to bring back manufacturing for national security areas. I don't 227 00:14:18,600 --> 00:14:22,000 Speaker 3: think Barbie dolls is something that we're gonna or Swiss 228 00:14:22,000 --> 00:14:24,080 Speaker 3: watches or anything like that that we have to have 229 00:14:24,240 --> 00:14:28,520 Speaker 3: or or or shrimp from this from Vietnam. I mean 230 00:14:28,600 --> 00:14:31,440 Speaker 3: all these different things there are. I'm you know, there 231 00:14:31,480 --> 00:14:35,040 Speaker 3: are some industries where having a more control of your 232 00:14:35,040 --> 00:14:37,280 Speaker 3: supply chains is probably very. 233 00:14:37,240 --> 00:14:41,200 Speaker 1: You're making the case from much more calibrated, But that's 234 00:14:41,200 --> 00:14:41,680 Speaker 1: why I am. 235 00:14:41,800 --> 00:14:44,520 Speaker 3: I'm always a little more balanced in the center. 236 00:14:44,640 --> 00:14:52,000 Speaker 1: Yes, what about the the theory that these retaliatory tariffs 237 00:14:52,040 --> 00:14:57,200 Speaker 1: are part of a Nixonian grand strategy like dropping the 238 00:14:57,240 --> 00:14:59,960 Speaker 1: gold standard was to solve America's debt problem by four 239 00:15:00,000 --> 00:15:02,680 Speaker 1: seeing down treasury yields and weakening the dollar. 240 00:15:03,800 --> 00:15:05,560 Speaker 2: That's a theory that has some purchase right now. 241 00:15:05,600 --> 00:15:07,640 Speaker 3: Well, I do believe the dollar will be weakened. I mean, 242 00:15:07,760 --> 00:15:10,920 Speaker 3: most political theory is, or economic theory is tear us 243 00:15:11,120 --> 00:15:13,000 Speaker 3: raise the value of the currency. I think it's going 244 00:15:13,040 --> 00:15:19,800 Speaker 3: to weaken the dollar. And look, one thing I would 245 00:15:19,840 --> 00:15:22,920 Speaker 3: say with certain you know, the economy is weakening as 246 00:15:22,920 --> 00:15:28,440 Speaker 3: we speak, and so the need for the administration to 247 00:15:28,480 --> 00:15:31,560 Speaker 3: focus on these pro growth agendas, which was much of 248 00:15:31,640 --> 00:15:35,320 Speaker 3: what the President campaigned on. We have to get that going, 249 00:15:35,480 --> 00:15:39,840 Speaker 3: whatever it's the tax cut. We need to be deregulating, 250 00:15:40,080 --> 00:15:43,560 Speaker 3: we need to be streamlining, permitting exactly all the things 251 00:15:43,600 --> 00:15:45,920 Speaker 3: I've been writing about where we need to get the 252 00:15:46,000 --> 00:15:50,240 Speaker 3: private capital, private markets to start investing in the United States. 253 00:15:50,880 --> 00:15:52,520 Speaker 3: We need to you know, and I think right now 254 00:15:52,520 --> 00:15:54,800 Speaker 3: the market is not focusing on all these We forgot 255 00:15:54,840 --> 00:15:57,280 Speaker 3: about the power of AI, the power of all these 256 00:15:57,320 --> 00:16:00,360 Speaker 3: different changes. We're focusing on the market, But the macro 257 00:16:00,480 --> 00:16:03,960 Speaker 3: trends of AI, the macro trends of rebuilding our infrastructure, 258 00:16:04,320 --> 00:16:08,920 Speaker 3: these macro and if the President is successful in deregulating, 259 00:16:09,040 --> 00:16:15,120 Speaker 3: if he's successful in streamlining permitting, then you know, we 260 00:16:15,160 --> 00:16:17,080 Speaker 3: could go back to this view that we have a 261 00:16:17,120 --> 00:16:20,680 Speaker 3: major growth agenda in front of us. The President has 262 00:16:20,720 --> 00:16:23,640 Speaker 3: been focusing on right now areas that in my mind, 263 00:16:23,640 --> 00:16:27,240 Speaker 3: in the short run, are very inflationary and destabilizing the economy. 264 00:16:27,280 --> 00:16:29,520 Speaker 3: And that's what we've been talking about. But if we 265 00:16:29,560 --> 00:16:35,080 Speaker 3: can find ways of rebuilding, rebuilding growth through these agendas, 266 00:16:35,120 --> 00:16:37,960 Speaker 3: and then you know, as I said at the beginning, 267 00:16:38,360 --> 00:16:42,040 Speaker 3: these the market declines, we're going to look back and say, 268 00:16:42,440 --> 00:16:44,160 Speaker 3: this might be a good entry level. Did we get 269 00:16:44,160 --> 00:16:46,160 Speaker 3: back into the market. Are we. 270 00:16:48,000 --> 00:16:49,920 Speaker 2: Headed for recession? Are we inter recession? 271 00:16:50,560 --> 00:16:54,400 Speaker 3: You know, most CEOs I talked to I would say 272 00:16:54,400 --> 00:16:57,080 Speaker 3: we are probably in a recession right now, right now, 273 00:16:57,240 --> 00:17:00,600 Speaker 3: right now. A couple of airline CEOs told me. One 274 00:17:00,640 --> 00:17:04,560 Speaker 3: COO specifically said, you know, the airline industry is like 275 00:17:06,640 --> 00:17:11,080 Speaker 3: a proverbial bird in a coal mine, canary in the 276 00:17:11,080 --> 00:17:14,280 Speaker 3: coal mine, and I was told that the canary is 277 00:17:14,320 --> 00:17:18,080 Speaker 3: sick already. If you look at what's going on in 278 00:17:18,119 --> 00:17:21,159 Speaker 3: air traffic, and how people are changing, and how so 279 00:17:21,240 --> 00:17:23,800 Speaker 3: many people who like Canadians, who are not coming to 280 00:17:23,800 --> 00:17:26,960 Speaker 3: the United States, we're seeing in very different sectors are 281 00:17:26,960 --> 00:17:28,400 Speaker 3: real downturn. 282 00:17:29,800 --> 00:17:32,439 Speaker 1: I have no doubt that people in this room and 283 00:17:32,480 --> 00:17:35,520 Speaker 1: elsewhere are encouraged by this idea of yours, that there 284 00:17:35,560 --> 00:17:39,000 Speaker 1: are opportunities to seize. And it doesn't surprise me to 285 00:17:39,040 --> 00:17:41,760 Speaker 1: hear you say that, because in the sixteen years that 286 00:17:41,800 --> 00:17:44,960 Speaker 1: we've known one another, you've always found a way to 287 00:17:44,960 --> 00:17:48,439 Speaker 1: think constructively about the future, to make a case for 288 00:17:48,520 --> 00:17:51,639 Speaker 1: taking risk, to make a case for staying invested. 289 00:17:53,240 --> 00:17:55,520 Speaker 2: So explain that case right now. 290 00:17:55,640 --> 00:17:59,639 Speaker 1: If, as you say, there's the possibility that at the 291 00:17:59,720 --> 00:18:03,480 Speaker 1: very least, equity prices continue to go down, what should 292 00:18:03,480 --> 00:18:03,919 Speaker 1: people do? 293 00:18:04,000 --> 00:18:05,480 Speaker 2: Where are these opportunities? 294 00:18:05,600 --> 00:18:07,600 Speaker 1: I can see why there might be opportunities for a 295 00:18:07,640 --> 00:18:10,040 Speaker 1: firm like black Rock, but what does everybody else do? 296 00:18:10,040 --> 00:18:12,280 Speaker 1: Do you stay invested, do you take risk, do you 297 00:18:12,280 --> 00:18:13,280 Speaker 1: take money off the table? 298 00:18:13,280 --> 00:18:16,480 Speaker 3: What do you do well? I would not be taking 299 00:18:16,480 --> 00:18:18,360 Speaker 3: money off the table right here. I think that we've 300 00:18:18,359 --> 00:18:21,720 Speaker 3: had enough, you know, from the high water point of January, 301 00:18:21,800 --> 00:18:26,440 Speaker 3: which may have been excessive. You know, I think rolling 302 00:18:26,480 --> 00:18:31,080 Speaker 3: one year average S and P is down about seven percent. Now, yeah, 303 00:18:31,240 --> 00:18:32,639 Speaker 3: could it be down, as I said, could it be 304 00:18:32,680 --> 00:18:36,320 Speaker 3: down seventeen percent from rolling one year average? Sure, that's 305 00:18:36,440 --> 00:18:39,000 Speaker 3: that would be. That would be about forty percent from 306 00:18:39,000 --> 00:18:39,880 Speaker 3: the high water mark. 307 00:18:40,600 --> 00:18:41,120 Speaker 2: That's a lot. 308 00:18:41,280 --> 00:18:43,280 Speaker 3: That's a lot, and it's a great entry level of 309 00:18:43,280 --> 00:18:45,760 Speaker 3: getting because I think the macro trends are not are 310 00:18:45,760 --> 00:18:48,640 Speaker 3: not going to change the need for the United States 311 00:18:48,680 --> 00:18:53,359 Speaker 3: to rapidly build out AI as imperative today as it 312 00:18:53,560 --> 00:18:58,439 Speaker 3: was three months ago. Our need to invest in our 313 00:18:58,480 --> 00:19:04,000 Speaker 3: infrastructures as great as today as ever before. And so 314 00:19:04,680 --> 00:19:07,720 Speaker 3: some of the big macro trendsors have not changed. The 315 00:19:09,040 --> 00:19:11,720 Speaker 3: narrative that has changed. We're not talking about it. But 316 00:19:11,760 --> 00:19:15,159 Speaker 3: I think if you spent time right now with the 317 00:19:15,200 --> 00:19:19,600 Speaker 3: CEOs of the Hyperscalers and this, the Navidia and other players, 318 00:19:19,640 --> 00:19:21,560 Speaker 3: they would say the need is just as great today 319 00:19:21,560 --> 00:19:23,840 Speaker 3: as there was three months ago. And I think some 320 00:19:23,880 --> 00:19:26,760 Speaker 3: of the big macword trends are just are still in place. 321 00:19:28,119 --> 00:19:31,800 Speaker 1: Do you believe in in a Trump put who Trump put? 322 00:19:31,960 --> 00:19:35,600 Speaker 1: What is that if the market's weakened too much that 323 00:19:36,440 --> 00:19:40,639 Speaker 1: he'll reverse course, oh on policy tariffs for example, or 324 00:19:41,400 --> 00:19:45,640 Speaker 1: somehow engineer a combination of stimulative measures to bail them out. 325 00:19:46,320 --> 00:19:48,160 Speaker 3: That's what I said, if you know, I do believe 326 00:19:48,200 --> 00:19:50,160 Speaker 3: the president is going to be focusing on these pro 327 00:19:50,160 --> 00:19:53,879 Speaker 3: growth agendas, and so we'll see how that offsets on. 328 00:19:54,040 --> 00:19:57,080 Speaker 1: Front though, that's something that he's been promising the whole 329 00:19:57,080 --> 00:20:00,960 Speaker 1: way along, correct, and so Trump put would be effectively 330 00:20:01,000 --> 00:20:02,399 Speaker 1: about the president getting scared. 331 00:20:04,119 --> 00:20:05,880 Speaker 3: I don't know how to value that. 332 00:20:09,440 --> 00:20:13,880 Speaker 1: Tariffs, Larry, are just one piece of a much more 333 00:20:13,920 --> 00:20:19,679 Speaker 1: comprehensive policy agenda. Since the inauguration, we've seen major initiatives 334 00:20:19,720 --> 00:20:24,760 Speaker 1: on everything from immigration and the border to rolling back DEI. 335 00:20:26,440 --> 00:20:27,000 Speaker 2: I could go on. 336 00:20:27,040 --> 00:20:33,160 Speaker 1: There's a lot, most of it by executive order. Again, 337 00:20:33,200 --> 00:20:37,960 Speaker 1: trying to take a step back from the burning question 338 00:20:38,040 --> 00:20:40,919 Speaker 1: of tariffs, which are occupying the markets of the moment. 339 00:20:41,520 --> 00:20:43,720 Speaker 1: How would you evaluate these first eleven weeks of Trump 340 00:20:43,760 --> 00:20:44,400 Speaker 1: two point zero. 341 00:20:49,840 --> 00:20:53,159 Speaker 3: A lot of volatility, a lot of change, and I 342 00:20:53,200 --> 00:20:55,560 Speaker 3: think even before the tariffs there is so much change, 343 00:20:55,560 --> 00:20:57,399 Speaker 3: so much volatility. I think this is one of the 344 00:20:57,400 --> 00:21:00,840 Speaker 3: reasons why even four or five weeks ago, most CEOs 345 00:21:00,840 --> 00:21:04,639 Speaker 3: were telling me businesses incrementally getting worse. I think, whether 346 00:21:05,160 --> 00:21:07,680 Speaker 3: it was a threat of terrorists, whether it's just all 347 00:21:07,680 --> 00:21:11,080 Speaker 3: these changes. I think more and more people were pausing 348 00:21:11,080 --> 00:21:14,440 Speaker 3: and slowing down consumption as we speak, and I think 349 00:21:14,480 --> 00:21:16,240 Speaker 3: all of this is just going to slow down consumption. 350 00:21:16,560 --> 00:21:18,960 Speaker 3: One interesting fact that I wrote about this in my 351 00:21:19,600 --> 00:21:22,320 Speaker 3: CEO letter this here. You know, there was always this 352 00:21:22,440 --> 00:21:26,159 Speaker 3: notion that Main Street was different than Wall Street, and 353 00:21:26,200 --> 00:21:29,280 Speaker 3: we always, you know that you had it was it 354 00:21:29,320 --> 00:21:34,159 Speaker 3: was good political statements about you know, Wall Street is 355 00:21:34,200 --> 00:21:37,679 Speaker 3: here and Main streets here. Well, the reality is sixty 356 00:21:37,680 --> 00:21:42,200 Speaker 3: two percent of Americans now invest in equities. So the 357 00:21:42,880 --> 00:21:50,320 Speaker 3: market impact is impacting Main Street. And so even before 358 00:21:50,440 --> 00:21:54,119 Speaker 3: this market setback you had, you were starting to see 359 00:21:54,160 --> 00:21:58,360 Speaker 3: more and more I would say trepidation by consumers more 360 00:21:58,359 --> 00:22:03,600 Speaker 3: and more slowing down on their purchases, slowing down theirifacation plans, 361 00:22:05,160 --> 00:22:07,159 Speaker 3: and all of this. I would imagine now where the 362 00:22:07,160 --> 00:22:10,960 Speaker 3: market setback is going to freeze more and more consumption, 363 00:22:11,560 --> 00:22:13,679 Speaker 3: and I think we're going to start seeing that really quickly. 364 00:22:14,000 --> 00:22:16,600 Speaker 3: So there's you know, and so I do believe that 365 00:22:16,760 --> 00:22:19,240 Speaker 3: in the coming months, we're going to we're going to 366 00:22:19,240 --> 00:22:23,080 Speaker 3: see more evidence of a slowdown in this economy, and. 367 00:22:22,920 --> 00:22:24,879 Speaker 1: Investors are going to have to continue pricing that in, 368 00:22:24,960 --> 00:22:29,480 Speaker 1: whether that's question on economic growth, whether it's whether less 369 00:22:29,480 --> 00:22:30,640 Speaker 1: consumption leads to. 370 00:22:30,880 --> 00:22:34,520 Speaker 3: But we're going to also see how companies navigate these 371 00:22:35,320 --> 00:22:38,200 Speaker 3: these tariffs. Are they going to navigate the terrafs by 372 00:22:38,200 --> 00:22:42,760 Speaker 3: trying to jam it down the manufacturers and lowering prices. 373 00:22:42,840 --> 00:22:46,280 Speaker 3: We've already heard a couple of US retailers going back 374 00:22:46,320 --> 00:22:48,720 Speaker 3: to their place and manufacturing and telling you got to 375 00:22:48,720 --> 00:22:52,720 Speaker 3: lower your prices. So that's one point. One point is 376 00:22:52,760 --> 00:22:57,199 Speaker 3: are they going to absorb the terraffs in their in 377 00:22:57,280 --> 00:23:00,119 Speaker 3: their margins that's not good for the equity mark mar 378 00:23:00,680 --> 00:23:02,280 Speaker 3: or are they going to just pass it all the 379 00:23:02,280 --> 00:23:05,960 Speaker 3: way on to the consumer and elevate prices. It's probably 380 00:23:06,000 --> 00:23:09,959 Speaker 3: going to be a combination of all three. But so 381 00:23:11,000 --> 00:23:14,000 Speaker 3: until we see how this all plays out, and then 382 00:23:14,040 --> 00:23:16,320 Speaker 3: two how much of these tariffs are going to be 383 00:23:16,440 --> 00:23:24,080 Speaker 3: actually implemented, we'll see. But I think most of America 384 00:23:24,119 --> 00:23:27,320 Speaker 3: does not understand the extent of these TIFFs. What is 385 00:23:27,359 --> 00:23:31,159 Speaker 3: it eighty six percent of toys are manufactured in China. 386 00:23:31,240 --> 00:23:34,480 Speaker 3: So there's what a sixty seven percent cumulative tariffs Now 387 00:23:34,840 --> 00:23:38,800 Speaker 3: in China, those are going to be expensive barbie dolls, 388 00:23:39,960 --> 00:23:43,199 Speaker 3: they are and mean, But across the board, you know, 389 00:23:43,280 --> 00:23:46,960 Speaker 3: the terraffs across the board, everything we're talking about is 390 00:23:47,000 --> 00:23:49,879 Speaker 3: just going to be you know, I'm not saying one 391 00:23:49,920 --> 00:23:52,000 Speaker 3: hundred percent is going to be passed on in terms 392 00:23:52,040 --> 00:23:54,639 Speaker 3: of the final purchase price, but a lot of it 393 00:23:54,680 --> 00:23:58,199 Speaker 3: can be passed in and then the cumulative effect of that. 394 00:23:58,280 --> 00:24:02,399 Speaker 3: So just think about there are more American jobs in 395 00:24:02,520 --> 00:24:06,359 Speaker 3: the fabrication of steel and aluminum there than there is 396 00:24:06,400 --> 00:24:09,600 Speaker 3: an in making steel in aluminum. So we now have 397 00:24:09,680 --> 00:24:14,480 Speaker 3: these aluminum and steal terrorists in place. What does that 398 00:24:14,600 --> 00:24:18,680 Speaker 3: impact in the demand of the fabricated products? So all 399 00:24:18,720 --> 00:24:21,240 Speaker 3: these things have major ripple effects that we have. Nope, 400 00:24:21,320 --> 00:24:24,080 Speaker 3: and this is why the market's down because it just 401 00:24:24,160 --> 00:24:27,240 Speaker 3: creates this vast amount of uncertainty how this will all play. 402 00:24:27,080 --> 00:24:30,800 Speaker 1: Out, and uncertainty means paralysis right in the boardroom in 403 00:24:30,800 --> 00:24:32,920 Speaker 1: the c suite for how long? 404 00:24:33,520 --> 00:24:33,960 Speaker 3: How long? 405 00:24:34,160 --> 00:24:38,320 Speaker 1: This is the question that management teams are asking themselves 406 00:24:38,400 --> 00:24:41,760 Speaker 1: right now. You know, how do we move forward? Well, 407 00:24:43,119 --> 00:24:44,520 Speaker 1: is there a way to move forward? Yet or do 408 00:24:44,560 --> 00:24:46,080 Speaker 1: you as you said, do you have to wait and see. 409 00:24:47,160 --> 00:24:48,639 Speaker 3: I think in most cases you're going to have to 410 00:24:48,640 --> 00:24:50,800 Speaker 3: wait and see. But look at it. If you're if 411 00:24:50,800 --> 00:24:53,840 Speaker 3: you're in a boardroom looking at acquiring a company, well 412 00:24:53,880 --> 00:24:57,200 Speaker 3: it's cheaper now, a lot cheaper. 413 00:24:56,880 --> 00:24:59,320 Speaker 2: Now, but you also may have less currency. 414 00:25:00,000 --> 00:25:01,960 Speaker 3: Okay, fine, But if you're doing one hundred percent, equity 415 00:25:02,040 --> 00:25:07,120 Speaker 3: doesn't really matter. So I you know, I don't it's 416 00:25:07,160 --> 00:25:09,159 Speaker 3: not a binary decision. I don't think it's going to 417 00:25:09,160 --> 00:25:12,280 Speaker 3: defer all these decisions. I mean, obviously, already we saw 418 00:25:12,320 --> 00:25:16,479 Speaker 3: a number of IPOs pausing, and probably for a good reason. 419 00:25:17,160 --> 00:25:20,840 Speaker 3: But it's not like it's over. We're going to reassess itself. 420 00:25:21,080 --> 00:25:23,080 Speaker 3: Maybe some of the evaluations of these companies that we're 421 00:25:23,080 --> 00:25:25,280 Speaker 3: going to go public are going to be down twenty percent. 422 00:25:26,200 --> 00:25:28,640 Speaker 3: In the long run, if they have a vital, strong 423 00:25:29,480 --> 00:25:33,640 Speaker 3: business proposition, their stock will be fine. Yes, so sell 424 00:25:33,680 --> 00:25:38,160 Speaker 3: a little less secondary shares, sell all primary and it 425 00:25:38,200 --> 00:25:40,399 Speaker 3: really doesn't matter. Larry, what are. 426 00:25:40,400 --> 00:25:44,280 Speaker 1: Foreign leaders telling you about these big shifts in US 427 00:25:44,359 --> 00:25:45,440 Speaker 1: posture and policies. 428 00:25:46,760 --> 00:25:49,639 Speaker 3: I saw a couple of foreign leaders last week in Europe. 429 00:25:50,520 --> 00:25:56,960 Speaker 3: You're asking my opinion, So I am too. They're pretty shocked. 430 00:25:57,080 --> 00:26:04,720 Speaker 3: They're questioning, they're not. They're also also willing to think about, Okay, 431 00:26:04,760 --> 00:26:08,000 Speaker 3: where is there asymmetry in the trading agreements with the US, 432 00:26:08,040 --> 00:26:10,520 Speaker 3: and is there means in ways that we could be, 433 00:26:10,880 --> 00:26:17,760 Speaker 3: you know, managing this more successfully that we can move forward. Uh, 434 00:26:17,880 --> 00:26:20,280 Speaker 3: someone are going to be adapting. Someone are going to 435 00:26:20,280 --> 00:26:22,000 Speaker 3: be retaliatory like what China did. 436 00:26:23,359 --> 00:26:28,080 Speaker 1: What do you think is the right approach to stand 437 00:26:28,160 --> 00:26:30,679 Speaker 1: up to President Trump like Mark Karney is doing in 438 00:26:30,720 --> 00:26:34,600 Speaker 1: Canada and the Europeans might get around to doing, or 439 00:26:35,240 --> 00:26:38,760 Speaker 1: be more non confrontational like the UK or Mexico. 440 00:26:41,119 --> 00:26:43,720 Speaker 3: I don't think Mark has been one hundred percent confrontational. 441 00:26:43,800 --> 00:26:47,320 Speaker 3: I mean, I think it's talking a good game. Look, 442 00:26:47,560 --> 00:26:50,920 Speaker 3: all right, everybody's job is to try to solve problems 443 00:26:51,160 --> 00:26:54,840 Speaker 3: and try to move forward. If you truly believe in 444 00:26:54,880 --> 00:26:58,880 Speaker 3: your country situation that you've got to be confronational, see 445 00:26:58,880 --> 00:27:00,760 Speaker 3: how that works. I don't. I don't think there's one 446 00:27:00,760 --> 00:27:04,800 Speaker 3: shoe that fits all, and so I think we're all 447 00:27:04,800 --> 00:27:07,560 Speaker 3: going to have to play this out right. Look, I 448 00:27:07,560 --> 00:27:11,920 Speaker 3: do believe the issues that we had with Mexico were 449 00:27:11,960 --> 00:27:17,200 Speaker 3: more with less related in most trade it had much 450 00:27:17,200 --> 00:27:21,800 Speaker 3: more to how to do with immigrants and fentanyl, and 451 00:27:21,920 --> 00:27:27,040 Speaker 3: I think the government of Mexico has mitigated much of 452 00:27:27,040 --> 00:27:29,080 Speaker 3: that in the short run. So we'll see how that 453 00:27:29,119 --> 00:27:31,800 Speaker 3: all plays out. So that came to a better outcome, 454 00:27:32,400 --> 00:27:33,880 Speaker 3: better outcome for America too. 455 00:27:35,080 --> 00:27:37,080 Speaker 1: Will it be harder to operate as an American company 456 00:27:37,080 --> 00:27:37,919 Speaker 1: outside the US. 457 00:27:40,080 --> 00:27:46,639 Speaker 3: I'm hearing worries and concerns, But if you know, whether 458 00:27:47,240 --> 00:27:50,959 Speaker 3: the US is put in a put on a pedestal, 459 00:27:51,080 --> 00:27:54,800 Speaker 3: or knocked off a pedestal, each in every country, each 460 00:27:54,840 --> 00:27:58,520 Speaker 3: and every company has a responsibility to prove every day 461 00:27:58,560 --> 00:28:01,680 Speaker 3: that your fiduciary in each every country. So if you 462 00:28:02,080 --> 00:28:04,920 Speaker 3: if you were a company that was not proving each 463 00:28:05,040 --> 00:28:07,959 Speaker 3: day that you're trying to be working on behalf of 464 00:28:08,000 --> 00:28:10,720 Speaker 3: your clients in Italy or your on behalf of your 465 00:28:10,720 --> 00:28:16,000 Speaker 3: clients in Korea or Australia or Canada or Mexico, You're 466 00:28:16,040 --> 00:28:17,920 Speaker 3: not going to be serving your clients in the long run. 467 00:28:18,560 --> 00:28:20,960 Speaker 3: And so you know to me, this is why I 468 00:28:21,040 --> 00:28:23,760 Speaker 3: started off this conversation. Today, we're in one hundred and 469 00:28:23,800 --> 00:28:27,000 Speaker 3: six different countries. We have offices in thirty six countries. 470 00:28:27,680 --> 00:28:29,600 Speaker 3: Our job is to prove every day that we are 471 00:28:29,600 --> 00:28:32,359 Speaker 3: working on behalf of each and every client, and so 472 00:28:32,720 --> 00:28:35,359 Speaker 3: of eleven plus trillion dollars that we manage is zero, 473 00:28:35,480 --> 00:28:40,080 Speaker 3: is our money zero. So we don't prove every day 474 00:28:41,080 --> 00:28:42,960 Speaker 3: that we are working on behalf of each and every 475 00:28:42,960 --> 00:28:45,800 Speaker 3: client and helping them, then we're going to fail anyway. 476 00:28:46,600 --> 00:28:51,240 Speaker 3: Will there'd be some negative overhang maybe, but I don't 477 00:28:51,280 --> 00:28:57,280 Speaker 3: believe that's going to be translating into into I would say, 478 00:28:57,320 --> 00:29:01,320 Speaker 3: a direct impact on the future of our business. 479 00:29:02,680 --> 00:29:06,560 Speaker 1: There is obviously no small, small I should say, no 480 00:29:06,600 --> 00:29:10,760 Speaker 1: small amount of risk in running a foul of the president. 481 00:29:11,640 --> 00:29:13,800 Speaker 1: He has shown himself to be willing to inflict a 482 00:29:13,800 --> 00:29:16,719 Speaker 1: lot of economic pain on his critics and his opponents. 483 00:29:17,480 --> 00:29:21,120 Speaker 1: Do corporate leaders have to choose their words carefully? 484 00:29:22,000 --> 00:29:24,440 Speaker 3: I think corporate leaders have to choose their words carefully 485 00:29:24,480 --> 00:29:28,040 Speaker 3: with every government, it doesn't matter who's in who's in office. 486 00:29:28,640 --> 00:29:32,600 Speaker 3: I think our job is to as a leader, you know, 487 00:29:32,680 --> 00:29:34,760 Speaker 3: as a leader of Blackrock, my job is to be 488 00:29:35,200 --> 00:29:37,520 Speaker 3: working on behalf of each in every country as best 489 00:29:37,560 --> 00:29:40,600 Speaker 3: as we can. Our job is to provide the best 490 00:29:40,640 --> 00:29:45,600 Speaker 3: advice that you can. And when you can can give 491 00:29:45,640 --> 00:29:49,560 Speaker 3: advice that it's held in private, you can do it 492 00:29:49,680 --> 00:29:52,400 Speaker 3: one on one or in a small group of people. 493 00:29:53,480 --> 00:29:56,880 Speaker 3: You know, your job is to be earnest and forthright 494 00:29:57,640 --> 00:30:02,200 Speaker 3: and not to bs anybody. And so I have made 495 00:30:02,280 --> 00:30:07,240 Speaker 3: my career around not telling political leaders what they want 496 00:30:07,240 --> 00:30:12,960 Speaker 3: to hear. But I've led my professional career in telling 497 00:30:13,760 --> 00:30:15,640 Speaker 3: political leaders what I think they should hear. 498 00:30:17,360 --> 00:30:20,080 Speaker 1: When I used the term economic pain, I had one 499 00:30:20,080 --> 00:30:22,840 Speaker 1: thing in mind. A lot of people, including many people 500 00:30:22,840 --> 00:30:26,160 Speaker 1: here in this room, have been following the president's attacks 501 00:30:26,200 --> 00:30:29,800 Speaker 1: on law firms affiliated with attorneys who prosecuted him, and 502 00:30:29,920 --> 00:30:33,400 Speaker 1: some including Paul Weiss and Scatten and Wilkie Farr, have 503 00:30:33,440 --> 00:30:34,920 Speaker 1: cut deals to save their businesses. 504 00:30:35,640 --> 00:30:38,880 Speaker 2: Others are fighting the president in court. What do you 505 00:30:38,920 --> 00:30:41,960 Speaker 2: make of that? That use of presidential power. 506 00:30:43,480 --> 00:30:48,920 Speaker 3: I let's move on. I mean, honestly, you. 507 00:30:48,840 --> 00:30:50,520 Speaker 2: Know, I could rephrase. 508 00:30:50,840 --> 00:30:57,240 Speaker 1: I could rephrase if the president threatened to bar Blackrock 509 00:30:57,360 --> 00:31:00,160 Speaker 1: from federal business like managing money for civil servents, what 510 00:31:00,200 --> 00:31:03,520 Speaker 1: you do and warned your clients they might. 511 00:31:03,400 --> 00:31:06,280 Speaker 2: Lose federal contracts? How would you handle that? 512 00:31:07,160 --> 00:31:09,760 Speaker 3: I would look at what the issues are at large, 513 00:31:09,800 --> 00:31:14,400 Speaker 3: and what what the the administration is asking, and I 514 00:31:14,400 --> 00:31:17,120 Speaker 3: would make a judgment on what is the value of that? 515 00:31:17,280 --> 00:31:19,960 Speaker 3: And am I standing up to the principles that I 516 00:31:20,040 --> 00:31:22,440 Speaker 3: tell every employee at the firm that we're Are we 517 00:31:22,520 --> 00:31:25,479 Speaker 3: living those principles every day? Are we doing what we 518 00:31:25,520 --> 00:31:28,680 Speaker 3: need to be doing, or or you know, is there 519 00:31:29,320 --> 00:31:31,760 Speaker 3: you know, is there something that in my past that 520 00:31:32,080 --> 00:31:36,480 Speaker 3: we needed to mitigate. So I don't know the circumstances 521 00:31:36,480 --> 00:31:40,440 Speaker 3: a bout any of the law law firms, you know 522 00:31:41,920 --> 00:31:46,000 Speaker 3: Blackrock has has. You know, our job is to be 523 00:31:46,040 --> 00:31:49,680 Speaker 3: working on behalf of everybody. Last year, clients were rewarded 524 00:31:49,760 --> 00:31:52,360 Speaker 3: US six hundred and thirty one billion dollars of new 525 00:31:52,400 --> 00:31:59,560 Speaker 3: money on Friday. Well, that was our first quarter. You know. 526 00:31:59,600 --> 00:32:02,080 Speaker 3: Our job is to prove every day that we're doing 527 00:32:02,560 --> 00:32:07,200 Speaker 3: we're working for our acid owners. And so I could 528 00:32:07,280 --> 00:32:09,239 Speaker 3: answer that question how we I would play it. 529 00:32:10,240 --> 00:32:12,200 Speaker 1: You were at the White House last month to see 530 00:32:12,200 --> 00:32:15,240 Speaker 1: the President after Blackrock clinched a multi billion dollar deal 531 00:32:15,280 --> 00:32:19,280 Speaker 1: to buy the port operations from a Hong Kong company, 532 00:32:19,320 --> 00:32:19,600 Speaker 1: C J. 533 00:32:19,720 --> 00:32:20,200 Speaker 2: Hutchison. 534 00:32:20,320 --> 00:32:26,840 Speaker 3: I'm glad you said Hong Kong. It's important right. 535 00:32:26,880 --> 00:32:29,560 Speaker 1: That deal was important because it included two ports in 536 00:32:29,640 --> 00:32:34,320 Speaker 1: Panama that the President had accused of being controlled by China. 537 00:32:35,520 --> 00:32:38,120 Speaker 1: Gd Evans was at this meeting Mark Waltz was at 538 00:32:38,160 --> 00:32:40,320 Speaker 1: this meeting. Elon Musk was at this meeting. What did 539 00:32:40,400 --> 00:32:42,200 Speaker 1: you learn from them? 540 00:32:44,000 --> 00:32:48,440 Speaker 3: I'm not going to talk about the meeting. Let me 541 00:32:48,520 --> 00:32:51,520 Speaker 3: just go back on the TikTok of the deal. Hutchison 542 00:32:51,560 --> 00:32:55,800 Speaker 3: has been talking about for two three years on the 543 00:32:55,840 --> 00:33:00,160 Speaker 3: idea possibly entertaining an idea of selling their ports. If 544 00:33:00,160 --> 00:33:04,400 Speaker 3: you look at their stock price, their stock from our 545 00:33:06,120 --> 00:33:13,080 Speaker 3: our evaluation was trading at thirty percent of book. It 546 00:33:13,240 --> 00:33:16,320 Speaker 3: was trading around a twenty six billion market cap at 547 00:33:16,320 --> 00:33:19,520 Speaker 3: that time, and they saw the valuation of the ports 548 00:33:19,520 --> 00:33:21,320 Speaker 3: to be worth at least twenty two billion of it. 549 00:33:21,400 --> 00:33:24,240 Speaker 3: And they have many more enterprises within the whole complex. 550 00:33:26,560 --> 00:33:30,920 Speaker 3: So they went out and spoke to dozens of different 551 00:33:31,440 --> 00:33:38,040 Speaker 3: potential investors. Because of our acquisition at GIP, we already 552 00:33:38,280 --> 00:33:41,680 Speaker 3: had a large position in ports, having over fifty ports 553 00:33:41,720 --> 00:33:50,000 Speaker 3: alongside our partners MSc and their port business till and 554 00:33:50,920 --> 00:33:57,880 Speaker 3: we coveted the opportunity of adding on the Hutchinson's ports 555 00:33:57,920 --> 00:34:00,560 Speaker 3: to the port business that we have on it already, 556 00:34:02,640 --> 00:34:07,120 Speaker 3: and all the who's who of New York private equity 557 00:34:07,200 --> 00:34:14,719 Speaker 3: was bidding on it. Every major shipping company was put 558 00:34:14,760 --> 00:34:17,160 Speaker 3: a bit in it. And so this is a pretty 559 00:34:17,200 --> 00:34:20,920 Speaker 3: sought after asset, and I believe our consortium with MSc 560 00:34:21,480 --> 00:34:26,719 Speaker 3: until just gave us an overwhelming position. And the one 561 00:34:26,719 --> 00:34:32,000 Speaker 3: thing I would tell this audience of the investment was 562 00:34:32,080 --> 00:34:37,320 Speaker 3: done as a profit opportunity on behalf of our investors. 563 00:34:37,600 --> 00:34:42,120 Speaker 3: There was not a kernel of decision making related to 564 00:34:42,160 --> 00:34:46,040 Speaker 3: any geopolitical considerations at that time. That being said, once 565 00:34:46,080 --> 00:34:51,719 Speaker 3: we started into an exclusive conversation in locking down the 566 00:34:51,760 --> 00:34:55,840 Speaker 3: deal with the seller, I did reach out to members 567 00:34:55,960 --> 00:35:01,279 Speaker 3: of both parties, not just one part PARTI. I did 568 00:35:01,280 --> 00:35:08,040 Speaker 3: have conversations with the administration and I and we had 569 00:35:08,080 --> 00:35:11,360 Speaker 3: conversations with some of the countries where the ports were located. 570 00:35:12,160 --> 00:35:18,520 Speaker 3: So so we we you know, I don't think I 571 00:35:18,520 --> 00:35:20,880 Speaker 3: would have done anything differently. We were trying to be 572 00:35:20,920 --> 00:35:24,200 Speaker 3: a fiduciary in everything we were doing. Now, obviously it 573 00:35:24,280 --> 00:35:28,600 Speaker 3: became much larger because if you read ninety percent, maybe 574 00:35:28,600 --> 00:35:31,160 Speaker 3: one hundred percent of all the papers, it said Blackrock 575 00:35:31,200 --> 00:35:34,279 Speaker 3: bought Panama. I mean, and. 576 00:35:36,600 --> 00:35:41,440 Speaker 1: It's not a done deal yet. Chinese raised some concerns. 577 00:35:42,120 --> 00:35:42,919 Speaker 1: What happens now. 578 00:35:44,280 --> 00:35:45,720 Speaker 3: I think this is going to be a very interesting 579 00:35:45,719 --> 00:35:54,640 Speaker 3: thing to watch for geopolitical purposes and China is just 580 00:35:55,000 --> 00:35:58,960 Speaker 3: you know, China is going to be reviewing this just 581 00:35:59,000 --> 00:36:01,719 Speaker 3: like every other MSAction. We would have to go to 582 00:36:01,800 --> 00:36:07,760 Speaker 3: fifty different jurisdictions for anti competitive reasons. In China because 583 00:36:07,840 --> 00:36:09,799 Speaker 3: one of the big users of all the ports, none 584 00:36:09,800 --> 00:36:11,680 Speaker 3: of the ports, we're inch on it, that'll be one 585 00:36:11,680 --> 00:36:17,239 Speaker 3: of the jurisdictions that will will review the transaction. And 586 00:36:17,280 --> 00:36:20,880 Speaker 3: so that's the only way actually China can stop it. 587 00:36:21,400 --> 00:36:25,279 Speaker 1: Well, is there a greater risk now because of last 588 00:36:25,280 --> 00:36:28,400 Speaker 1: week's tariff announcement that it does actually move to. 589 00:36:30,120 --> 00:36:31,680 Speaker 2: Block it from taking place? 590 00:36:32,680 --> 00:36:34,520 Speaker 3: Of course it can, but it's going to be nine 591 00:36:34,640 --> 00:36:40,640 Speaker 3: months of regulatory review. So we'll see how this all 592 00:36:40,640 --> 00:36:43,560 Speaker 3: plays out. I'm actually pretty optimistic that we will find 593 00:36:43,560 --> 00:36:49,719 Speaker 3: a solution because if you look at it, everything was 594 00:36:49,760 --> 00:36:54,120 Speaker 3: done in the right order. It was not done politically 595 00:36:54,160 --> 00:36:55,959 Speaker 3: despite all the narrative. It was done. 596 00:36:56,760 --> 00:37:09,400 Speaker 1: A solution with or without the Panamanian ports. 597 00:37:05,680 --> 00:37:09,000 Speaker 3: I'm pretty confident would be the Panamic ports. Will he 598 00:37:09,120 --> 00:37:11,960 Speaker 3: represent four or five percent of the total valuation of 599 00:37:12,000 --> 00:37:16,759 Speaker 3: the whole enterprise. You know there are six there's six 600 00:37:16,880 --> 00:37:19,400 Speaker 3: port concessions at the Suez Canal that no one has 601 00:37:19,400 --> 00:37:22,520 Speaker 3: ever talked about. So I just give you, you know, 602 00:37:22,600 --> 00:37:24,760 Speaker 3: some of the color. I mean, the port of Rotterdam, 603 00:37:24,840 --> 00:37:27,760 Speaker 3: the biggest port in Europe, is one of the concessions there. 604 00:37:32,200 --> 00:37:34,480 Speaker 3: It's going to be reviewed as one transaction. 605 00:37:35,120 --> 00:37:35,760 Speaker 2: You're confident. 606 00:37:35,920 --> 00:37:39,160 Speaker 3: Yeah, well, yea as of the moment. 607 00:37:39,440 --> 00:37:42,920 Speaker 1: Yeah, is this kind of thing going to become a trend, 608 00:37:43,400 --> 00:37:47,160 Speaker 1: big ticket m and a especially if critical infrastructure driven 609 00:37:47,200 --> 00:37:48,400 Speaker 1: by geopolitical risks. 610 00:37:49,719 --> 00:37:51,520 Speaker 3: Well, let's be clear, two years ago, no one would 611 00:37:51,520 --> 00:37:53,480 Speaker 3: you even care about a port. It would have been 612 00:37:53,640 --> 00:37:57,080 Speaker 3: on page forty of financial press. I mean, there was 613 00:37:57,120 --> 00:37:59,280 Speaker 3: a lot of poor transactions in the last two years 614 00:37:59,280 --> 00:38:04,879 Speaker 3: that no one cared about. Yeah. I think, I think 615 00:38:04,880 --> 00:38:08,360 Speaker 3: this is a new reality today that countries are going 616 00:38:08,440 --> 00:38:12,239 Speaker 3: to be looking at all these different geopolitical issues. That 617 00:38:12,400 --> 00:38:17,279 Speaker 3: being said, you know, Blackrock last year announced three mergers. 618 00:38:17,400 --> 00:38:24,840 Speaker 3: There were three acquisitions, two of them are closed. In 619 00:38:24,960 --> 00:38:30,000 Speaker 3: the first two we were hung up by one jurisdiction 620 00:38:30,360 --> 00:38:35,560 Speaker 3: for crazy reasons. The g IP deal was closed because 621 00:38:35,640 --> 00:38:38,720 Speaker 3: one of the assets, one of the infrastructures they had, 622 00:38:40,040 --> 00:38:43,399 Speaker 3: and our prequent technology transaction was held up by for 623 00:38:43,480 --> 00:38:47,120 Speaker 3: five months by one jurisdiction. But they both closed and 624 00:38:47,200 --> 00:38:52,640 Speaker 3: so it just requires conversation, and we're mostly through the 625 00:38:52,840 --> 00:38:56,120 Speaker 3: regulatory review of HPS and we have already said it 626 00:38:56,120 --> 00:38:59,680 Speaker 3: should close early second quarter. Excuse me, this is early 627 00:38:59,719 --> 00:39:03,040 Speaker 3: third quarter or no, late the second quarter. I got 628 00:39:03,040 --> 00:39:11,600 Speaker 3: to get my quarters right. And we're on track. But yeah, 629 00:39:11,600 --> 00:39:15,080 Speaker 3: I do believe there's going to be a little more review, 630 00:39:15,960 --> 00:39:18,040 Speaker 3: but we saw that already a year in the last year. 631 00:39:18,120 --> 00:39:21,680 Speaker 1: And the more review, yes, for sure, more activity, more 632 00:39:21,800 --> 00:39:24,600 Speaker 1: M and A activity because of geopolitical risks. 633 00:39:24,640 --> 00:39:32,320 Speaker 3: Oh no, if the geopolitical risk creates economic opportunities, yes, 634 00:39:32,719 --> 00:39:34,160 Speaker 3: but M and A is not going to because of 635 00:39:34,200 --> 00:39:41,439 Speaker 3: geopolitical issues, because you know, if geopolitical issues creates opportunities, good, 636 00:39:41,840 --> 00:39:44,000 Speaker 3: you know, I think there's gonna be more M and 637 00:39:44,040 --> 00:39:45,839 Speaker 3: A opportunities as we deregulate