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Speaker 1: We're going to head down to Miami where our Shanali

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Speaker 1: Basic is sitting down with Citadel C Ken Griffin in

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Speaker 1: an exclusive one on one to get his thoughts on

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Speaker 1: everything from AI to the treasury market.

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Speaker 2: Let's go to that discussion right now.

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Speaker 3: In the FEDS fight. Do you think this is too

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Speaker 3: much of an eederk reaction?

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Speaker 4: Well, today is obviously quite a bit of enthusiasm over

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Speaker 4: the inflation print this morning, and we are seeing we

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Speaker 4: are seeing core.

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Speaker 2: Heading back down.

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Speaker 4: We look at like roughly four percent year every year,

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Speaker 4: which means that perhaps the worst of the storm has

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Speaker 4: passed us. And that's pretty much conventional wisdom was today

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Speaker 4: was going to be a constructive print. I'm actually a

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Speaker 4: bit surprised at how strong the market's reaction has been

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Speaker 4: today's number. This was not a huge upside surprise, money

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Speaker 4: stretched the imagination. It may also be a response to

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Speaker 4: just how over extended the move in the tenure was

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Speaker 4: just a few weeks ago. I mean, it's hard to believe,

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Speaker 4: but we broke the five year yeal point for the

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Speaker 4: first time in decades just a few weeks ago, and

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Speaker 4: the market is at this moment in time enjoying a

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Speaker 4: pretty substantial rally from the lows in bond prices, high

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Speaker 4: in yields, and today might be just a continuation of

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Speaker 4: that momentum.

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Speaker 3: Now do you think it's crazy then for people not

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Speaker 3: to be buying at this point? Given the move downward

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Speaker 3: that we're seeing, do you think that this move is sustained?

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Speaker 4: Look, I think any yield on the ten year around

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Speaker 4: this four and a half percent number, plus or minus

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Speaker 4: fifty basis points is a reasonable number to be at.

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Speaker 4: I think it's it's hard to argue that we're way

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Speaker 4: off the market. No pun intended on the current tenure yield.

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Speaker 5: Now, what does this mean for the Fed?

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Speaker 3: Do you think it would be a mistake for the

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Speaker 3: Fed to take their foot off the pedal here given

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Speaker 3: what we're seeing in the inflation print and even cut

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Speaker 3: into next year like the market is expecting.

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Speaker 4: Well, so the question is heading into next year, how

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Speaker 4: fast do we cut? So if you look at where

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Speaker 4: inflation is likely to print over the first half of

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Speaker 4: next year and unemployment's likely to head to somewhere in

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Speaker 4: the low fours, you're going to have monetary policy that's

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Speaker 4: too restrictive under those circumstances. Now, the key from my

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Speaker 4: perspective is is the FED needs to stay on message

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Speaker 4: that they're going to put the inflation genie back in

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Speaker 4: the bottle, and so if they if they cut too soon,

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Speaker 4: I think they risk losing credibility around their commitment to

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Speaker 4: a two percent inflation target. So you know, the market's

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Speaker 4: pretty optimistic that we're going to head into an easing

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Speaker 4: cycle next year, and I think the FED needs to

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Speaker 4: balance that with making sure they're able to stay on

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Speaker 4: message that they're committed to a two percent target.

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Speaker 3: That all speaks to tighter financial conditions to the extent

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Speaker 3: that there are more things that could break in this environment.

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Speaker 5: What else breaks?

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Speaker 2: What else breaks? Are you looking for the next silicon

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Speaker 2: value banking?

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Speaker 5: I sure am so.

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Speaker 4: The risk in the banking system still lies in credit

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Speaker 4: risk in middle tier banks, and in particular, their exposure

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Speaker 4: to commercial office is a big risk factor, less so

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Speaker 4: their consumer, their exposure to mid size enterprises. I mean

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Speaker 4: to be clear, to be a mid sized bank today

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Speaker 4: is a really tough place to be. The market for

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Speaker 4: deposits is becoming increasingly competitive. The cost of compliance has

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Speaker 4: soared over the last decade. The amount of technology that

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Speaker 4: the consumer expects you to bring to bear to solve

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Speaker 4: their problems comes with a pretty hefty price tag.

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Speaker 2: It's a really tough place to be.

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Speaker 4: Today as a as a community bank or as a

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Speaker 4: as a mid tier bank.

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Speaker 2: And now you've gotten only those headwinds of costs.

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Speaker 4: And expectations around customer service and customer experience, but you've

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Speaker 4: got a credit cycle on folding. So I think that's

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Speaker 4: where the risk lies today within the banking system.

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Speaker 2: First and foremost is in those mid tier banks.

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Speaker 3: Now does the FED get to where they need to

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Speaker 3: go without causing a deeper recession? Now, you've said before

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Speaker 3: pretty recently that you would expect a recession at some point,

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Speaker 3: and so why I.

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Speaker 2: Will be right in that eventually?

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Speaker 4: Eventually, I mean every economist is at some point right

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Speaker 4: on that call.

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Speaker 3: So instead of asking you when, I'm going to ask

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Speaker 3: you what it looks like.

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Speaker 4: So here's here's our best guess. Our best guess was

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Speaker 4: sometime late this year.

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Speaker 2: It's November. So we're going to be wrong in that guess.

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Speaker 4: Q two right now is roughly the center point of

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Speaker 4: our distribution as to when we're likely to see the

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Speaker 4: United States in a recessionary environment. And I think I

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Speaker 4: think there's a couple of really important questions that will

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Speaker 4: come into bear at that moment in time that should

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Speaker 4: influence one's view as to how deep this recession is

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Speaker 4: going to be. Number one is what's going to happen

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Speaker 4: to fiscal policy in the United States. For choice, we

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Speaker 4: think next year fiscal policy will not will not tighten

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Speaker 4: that much. We're heading into a presential residential election. It's

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Speaker 4: really hard for politicians on either side of the aisle

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Speaker 4: to do what we need to do, which is to

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Speaker 4: rein in our deficit spending in front of a presidential election.

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Speaker 4: It's it's going to be really hard politically to get

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Speaker 4: there next year on that front. The second real question

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Speaker 4: next year is how much will companies start to unwind

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Speaker 4: the labor hoarding that we've seen over the last couple

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Speaker 4: of years. It's been really hard to hire people, and

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Speaker 4: as such, your large companies have been very reticent to

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Speaker 4: let people go, no matter what the circumstances are. So

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Speaker 4: even if margins are contracting, even if you have games

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Speaker 4: from automation, people have been very reticent to let people go.

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Speaker 4: Now we're starting to see for the first time the

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Speaker 4: unwinding of that labor hoarding.

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Speaker 2: What we don't know is how how much of that

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Speaker 2: labor hoarding has taken place? And then what worries me.

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Speaker 4: In a hybrid work environment or work from home environment,

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Speaker 4: the cultural or social contract that holds people together in

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Speaker 4: a company is unquestionably weaker. I mean, we've all read

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Speaker 4: about companies that have fired thousands of people on zoom calls.

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Speaker 4: There's no sense of that's Jane who's worked down the

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Speaker 4: hall with me for years, and I'm going to go

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Speaker 4: the extra distance to try to keep Jane employed. Here

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Speaker 4: it's like, here's the email to all, here's the video

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Speaker 4: conference with a bunch of people, and goodbye. It's a

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Speaker 4: very different moment in American employment history where I believe

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Speaker 4: the bond between the company and the employee has become

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Speaker 4: far weaker. And that worries me in terms of the

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Speaker 4: willingness of corporate America to make cuts on their workforce

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Speaker 4: that they just wantn't have made at other similar points

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Speaker 4: in the labor market, ccle, Is.

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Speaker 3: That you saying that the employment market will crack much

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Speaker 3: more significantly than many are expecting.

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Speaker 2: It could, is what I'm saying. It could. It's a

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Speaker 2: wild card.

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Speaker 5: So there's a lot to unpack here.

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Speaker 3: We are going to go global, but we're going to

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Speaker 3: start here at home, because you've been pretty critical about

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Speaker 3: the picture here for the fiscal situation.

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Speaker 5: In the United States.

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Speaker 3: I want to talk about the treasury market because it's

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Speaker 3: behaving a little bit like a meme stock. It's one

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Speaker 3: of the most of all little markets here.

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Speaker 2: Oh no, no, no, no. I played memestocks, all right,

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Speaker 2: So I've this is nothing.

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Speaker 3: Like that moment, you know, but it is quite volatile,

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Speaker 3: and I'm wondering to what extent it does concern you

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Speaker 3: that treasuries are moving around so drastically.

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Speaker 4: So, I mean, first of all, the treasure market is

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Speaker 4: moving around drastically in comparison to ten years ago.

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Speaker 2: Five years ago, when we had.

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Speaker 4: Extremely low inflation, we were consistently below our two percent target,

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Speaker 4: and the government was involved in a variety of very

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Speaker 4: aggressive policies to try to bring inflation back up towards

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Speaker 4: two percent. It's a very different world. We've come off

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Speaker 4: the zero boundary and inflation. We've come off the zero

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Speaker 4: boundary and rates. We're in a market that, for the

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Speaker 4: trading at government bonds is a normal market condition like

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Speaker 4: this is actually this, I mean, it's a little more

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Speaker 4: volatile than you might otherwise want it to be. But

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Speaker 4: these are pretty normal, pretty typical conditions when you're in

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Speaker 4: a full employment economy late in the business cycle. There's

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Speaker 4: nothing about this that I would call in any way

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Speaker 4: unusual or unexpected. I think what was more unusual was

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Speaker 4: that all of us in this room went through such

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Speaker 4: a long period of time with such aggressive government intervention

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Speaker 4: in our markets, trying to encourage growth, trying to bring

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Speaker 4: inflation levels up.

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Speaker 5: So that was government and interventional.

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Speaker 3: What about the Treasury's management of how they handled the

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Speaker 3: future fiscal load? You know, pretty recently billionaire Stanley Duck

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Speaker 3: and Miller had rebuked Treasury Secretary Janet Yellen for not

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Speaker 3: doing more to finance the United States when rates were low,

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Speaker 3: and she has since push pushback. But I'm wondering what

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Speaker 3: you think about it.

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Speaker 4: Well, with hindsight, we would have done really well with

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Speaker 4: our trading.

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Speaker 5: Do you think they should have had?

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Speaker 2: I mean, if I.

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Speaker 4: Knew where rates were going to be today, could you

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Speaker 4: matage how much money we would have made it taken a

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Speaker 4: position on two years ago. So that's that's a bit

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Speaker 4: of the same call that you know is being levied

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Speaker 4: against Shannet Yellen. You can't cry over spilt milk, of course,

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Speaker 4: and I actually do believe he's right. We could have

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Speaker 4: issued more debt at lower rates over the last several years,

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Speaker 4: There's no doubt about it.

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Speaker 2: And and the what's ironic is.

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Speaker 4: DC is constantly concerned about the fragility the private market sector.

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Speaker 4: And one of the sources of fragility in the private

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Speaker 4: market is the amount of short term debt and the

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Speaker 4: amount of short term.

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Speaker 2: Mindset that we have and how we allocate assets.

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Speaker 4: So the amount of money gets on deposit with banks

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Speaker 4: rather than being invested in seven year or ten year

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Speaker 4: corporate loans. Everything that brings things shorter in term, increases fragility.

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Speaker 4: Bear Stearn's when broken a day because the amount of

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Speaker 4: funding they did overnight. All right, that's an important to note. Ironically,

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Speaker 4: the US Treasury has been shortening its maturity as our

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Speaker 4: debt's been going higher. So if you think about any

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Speaker 4: playbook for how to brutally manage your balance sheet, let's

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Speaker 4: not play the role rate speculator.

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Speaker 2: Stand like, we're going to push that aside.

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Speaker 4: And he's amongst the best in the world at this

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Speaker 4: So it's you know, like push aside the fact that

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Speaker 4: the Fed did not play the role rate speculator, but

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Speaker 4: put on your hat of balance sheet manager. The more

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Speaker 4: debt you need to manage, the more you want to

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Speaker 4: extend your way to average maturity. Like that's just basic

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Speaker 4: finance one on one.

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Speaker 3: But as the Treasury tries to do this now, one

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Speaker 3: of the big problems is you are seeing a fracturing

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Speaker 3: of what it looks like to be issuing the longer

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Speaker 3: data securities and with foreign buyers less willing to step in.

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Speaker 3: What do you think this means for the ability of

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Speaker 3: the United States to finance itself.

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Speaker 4: Well, at some point we need to actually take the

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Speaker 4: message that's being delivered to us there and put our

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Speaker 4: fiscal house into order. I mean, that's what the market's

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Speaker 4: telling us. The market is telling us that we cannot

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Speaker 4: run annual deficits of the magnitude that we're running, that

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Speaker 4: we need to put our fiscal house into order. That's

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Speaker 4: the message being delivered by the market. US pivoting to

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Speaker 4: issuing more and more sure term debt means that if

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Speaker 4: there were a day of recognoing, the degrees are freedom

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Speaker 4: that we have to navigate that crisis are far more limited.

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Speaker 3: Now there are a lot of people in the market

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Speaker 3: who believe that with foreign buyers stepping back, that the

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Speaker 3: marginal buyer is the levered headge fund people like Citadel

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Speaker 3: and the American public becoming increasingly active as buyers of

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Speaker 3: treasuries would Sitadel step in in a bigger way to

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Speaker 3: buy more treasuries into next year.

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Speaker 4: Well, let's just be very clear, the marginal buyer of

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Speaker 4: treasuries is going to have to be American savers, no ifs,

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Speaker 4: no ands, nor bots, and that's going to crowd out

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Speaker 4: investment that American households would otherwise make in corporate bonds, equities,

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Speaker 4: and other assets that contribute to the productive growth of

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Speaker 4: our economy. That's where we're going to find the marginal buyer,

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Speaker 4: and it's going to come at a cost in terms

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Speaker 4: of our ability to create jobs and to enjoy a

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Speaker 4: level of innovation and productivity that has defined so much

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Speaker 4: of the life that we have lived in this country

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Speaker 4: over the last century.

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Speaker 3: Are there limitations, especially as bank balance sheets shrink into

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Speaker 3: next year, for how much you can step in.

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Speaker 4: So there's quite a bit of chatter today about the

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Speaker 4: bomb basis trade, and I've never seen so many people

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Speaker 4: fixated on such a trivial problem. I mean, it's actually

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Speaker 4: just bewildering to me. You're a significant asset manager. You

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Speaker 4: have a portfolio that's tracking a fixed income benchmark, park

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Speaker 4: government bonds, park corporate bonds, part mortgage backed securities, and

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Speaker 4: you want to optimize the return for your investors. I mean,

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Speaker 4: that's what that's asset managers do. We're here to create

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Speaker 4: alpha for our end investors. And so you look at

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Speaker 4: the treasure part of your portfolio and you go, do

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Speaker 4: you know what, I can sell my treasuries, replace that

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Speaker 4: duration risk with a treasury futures contract and invest the

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Speaker 4: money in corporates and other interest bearing assets and free

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Speaker 4: up that cash to put it to a more productive

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Speaker 4: use in the economy. Holistically, the hedge fund community buys

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Speaker 4: those treasuries and sells the futures contracts.

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Speaker 2: To the real mind a community. It's just that simple.

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Speaker 3: So the reason I'm asking this is because with this

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Speaker 3: great attempt to clamp down on the basis trade.

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Speaker 5: By regulators, would that really.

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Speaker 3: Constrain how much hedge funds are stepping into buy treasuries

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Speaker 3: just as they're being issued.

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Speaker 2: Well, I mean, here's here's what's going to happen.

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Speaker 4: The cost of doing that trade for the real money

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Speaker 4: account will go up, so the return hurdle they need

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Speaker 4: to earn to move from treasuries into corporates will go up,

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Speaker 4: which makes the cost of capital higher for corporate America,

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Speaker 4: which reduces economic growth. All Right, the trade will end there.

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Speaker 4: The trade will end by real money managers committing less

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Speaker 4: money to corporate America.

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Speaker 2: That's what's going to happen here.

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Speaker 4: The hedge fund community in some sense just provides intermediation

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Speaker 4: between access to the short term funding market, which is

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Speaker 4: extremely efficient, and access to the longer term buying market,

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Speaker 4: which is far more or balance sheet constrained.

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Speaker 2: That's what's going to happen here.

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Speaker 4: And there's no doubt like the federal government can readily

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Speaker 4: end this trade, and they may just choose to do so,

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Speaker 4: and they'll do so at the expense of the American

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Speaker 4: taxpayer to the tunes of tens of billions of dollars

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Speaker 4: of interest costs, and they'll do this expensive American companies

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Speaker 4: and raise the cost of capital for corporate America.

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Speaker 2: I mean, they will probably do this.

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Speaker 3: So we're going to get back to regulation, and it's

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Speaker 3: other many forms, but let's spend a note to broaden

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Speaker 3: out for a minute on what's happening in the world,

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Speaker 3: particularly the outbreak of two major wars. As somebody who's

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Speaker 3: leading Citadel, how do you prefer for events that can

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Speaker 3: cause such drastic geopolitical consequences in the world.

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Speaker 4: So, geopolitics has been a big part of our business

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Speaker 4: now for quite a bit of time. I mean, we

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Speaker 4: have seen the end of the peace dividend. There's a

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Speaker 4: war in Europe. I mean, did you ever think in

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Speaker 4: your lifetime you'd say there'd be a war in Europe?

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Speaker 5: I didn't.

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Speaker 2: I mean, it's just.

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Speaker 5: We live through peace time for so long.

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Speaker 3: So the resurgence of the lack of peace time, what

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Speaker 3: does that mean for investors?

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Speaker 4: So first and foremost, it means that all of us

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Speaker 4: are going to just we're going to have higher anxiety

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Speaker 4: in our day to day life.

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Speaker 2: I mean, there's there's no doubt about it.

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Speaker 4: And that changes people's perspectives towards how they deploy capital.

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Speaker 2: Right when it's bright.

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Speaker 4: Sunny skies, it's a lot easier to take on a

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Speaker 4: variety of different risks, whether it's building new factory, whether

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Speaker 4: it's engaging in long term investing like. It's just a

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Speaker 4: very different world when the world is at peace in

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Speaker 4: terms of how business leaders and investors think. Now, let's

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Speaker 4: take a step back to the to the nuts and

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Speaker 4: bolts of what this higher level of geopolitical risk means.

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Speaker 4: It means we spend a lot more time with people

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Speaker 4: who are involved in geopolitical risk analysis, and there's a

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Speaker 4: number of firms that are extremely good at providing this

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Speaker 4: insight and analysis.

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Speaker 2: It means that our portfolio managers are.

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Speaker 4: Very focused on what they have to say, and it

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Speaker 4: means we're trying to understand, in the context of our portfolios,

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Speaker 4: what exposures do we have to emerging geopolitical risk developments

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Speaker 4: around the world. So when you saw the Russians and

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Speaker 4: ask their troops on the border with Ukraine, you're thinking

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Speaker 4: about if they come across, what are the odds that

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Speaker 4: they're going to cut off.

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Speaker 2: Gas applies to Europe?

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Speaker 4: If they cut off gas applies to Europe, what's that

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Speaker 4: mean in terms of the European economic response to support

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Speaker 4: their industrial base? What's it mean for the largest users

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Speaker 4: of energy in Europe in the industrial space. Are they

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Speaker 4: going to shut their factories down? Are they going to

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Speaker 4: absorb the costs and destroy their margins to run at

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Speaker 4: a loss. Like you're working through all that analysis in

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Speaker 4: your investing time. What's unfortunate about that is you're not

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Speaker 4: looking at the next biotech company that's going to cure cancer.

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Speaker 2: It shifts your allocation of time as an.

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Speaker 4: Investor away from what are the really salient growth stories

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Speaker 4: that power global growth to playing defeas which is where

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Speaker 4: are we going to get caught flat footed by a

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Speaker 4: crisis somewhere in the world.

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Speaker 3: How much do you worry that some of the conflict

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Speaker 3: that we're seeing, particularly the outbreak of the Israel Hamas war,

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Speaker 3: do you worry about it turning into a broader conflict

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Speaker 3: in the Middle East?

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Speaker 4: So what are the odds that the war between Israel

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Speaker 4: Hamas turns into a war that engulfs.

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Speaker 2: The entire Middle East? I believe the odds. I pray

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Speaker 2: the odds are small.

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Speaker 4: I none of us know, but we believe the odds

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Speaker 4: are small. The trend in the Middle East has been

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Speaker 4: towards peace, I mean Saudi Arabia and Israel. We're about

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Speaker 4: to reach a historic accord that only would strengthen peace

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Speaker 4: the Middle East. And there's some high probability that the

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Speaker 4: actions by Hamas were influenced by this normalization of relations

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Speaker 4: between Israel and Saudi Arabia that were likely to take place.

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Speaker 4: So what's unfortunate is that peace the Middle East holistically

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Speaker 4: has been pushed.

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Speaker 2: Further out in time.

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Speaker 4: But I think across the regimes the Middle East, they're

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Speaker 4: not looking to escalate this into a larger dynamic of

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Speaker 4: war between these countries of significance.

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Speaker 2: Now, Israel does have a real problem.

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Speaker 4: They're going to have to understand how to contain and

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Speaker 4: control Hamas. They suffered an immeasurable loss of human life,

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Speaker 4: the worst day for the Jewish population since the Holocaust,

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Speaker 4: and Israel clearly has right to defend itself. One of

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Speaker 4: the things that frustrates to me about Israel's current strategy

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Speaker 4: is they will not clarify how they will deal with

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Speaker 4: Gaza post these initial strikes, this initial movement of troops

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Speaker 4: into the region. What does the world look like post

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Speaker 4: the next three to six months. I think Israel really

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Speaker 4: needs to give clarity on that issue to keep the

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Speaker 4: Western world aligned in support of Israel.

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Speaker 3: Speaking of the Western world, we were talking a lot

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Speaker 3: about the US fiscal situation and the fact here also

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Speaker 3: that national defense spending is rising quite meaningfully, both in

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Speaker 3: response to Ukraine and Israel. How do you pair the

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Speaker 3: two things.

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Speaker 4: So national defense spending is not rising nearly fast enough,

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Speaker 4: and we know this by just looking at American stockpiles

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Speaker 4: of weapons. I mean, one of the reasons that we

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Speaker 4: sent to the Ukraine cluster munitions is we're running out

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Speaker 4: of munitions to send. There's quite a bit of backlash

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Speaker 4: around the United States sending that type of military equipment

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Speaker 4: to the front lines because of the risk to civilians.

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Speaker 4: But the United States stockpiles are being depleted at an

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Speaker 4: incredibly brisk rate. So what this speaks to is the

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Speaker 4: need for us to rebuild our military industrial complex. If

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Speaker 4: we're in a post piece dividend world, we're going to

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Speaker 4: have to put the investment, unfortunately, into national defense capabilities

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Speaker 4: to protect American interests around the world. So that's a

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Speaker 4: real pressure on the federal spending picture going forward that

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Speaker 4: I don't really think the markets have yet fully incorporated.

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Speaker 4: Like we're still yearning for the reality of three years

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Speaker 4: ago in a world that feels very much like Cold

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Speaker 4: War two.

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Speaker 3: So if you're thinking about this idea of a Cold

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Speaker 3: War two, there's kind of a third player here, and

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Speaker 3: we have to think about the presence of China and

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Speaker 3: the relationship between China and the United States. One question

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Speaker 3: I have for you is if you were advising President

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Speaker 3: Biden as he meets with China's President She, what would

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Speaker 3: you say?

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Speaker 4: Number one is, we need to turn the mutual temperature

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Speaker 4: down on the military touch points around Taiwan and in

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Speaker 4: the Greater China Seas. There is no room for an

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Speaker 4: accident to take place, and both countries need to be

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Speaker 4: very thoughtful around that reality. We don't want to give

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Speaker 4: the people of either country that incident where two planes

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Speaker 4: collide that create the outburst of nationalism that just continues

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Speaker 4: to accelerate the degradation of the coupling between our two countries.

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Speaker 4: I mean, the United States imports circu. Five hundred billion

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Speaker 4: dollars of goods from China a year. Our economies are

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Speaker 4: incredibly coupled together, and an abrupt decoupling would come at

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Speaker 4: just catastrophic costs to the people of both countries.

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Speaker 2: You know, if you look at some of the worst.

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Speaker 4: Case scenarios access loss of access, for example, to the

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Speaker 4: Taiwanese chip manufacturers, just wake up tomorrow and we can't buy.

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Speaker 2: Chips from TSMC.

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Speaker 4: How many weeks till every single production line of consequence

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Speaker 4: in America.

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Speaker 2: Shuts down.

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Speaker 4: Tesla's, no Fords, no Boeing aircraft, probably an eight to

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Speaker 4: ten percent hit to GDP. So it's really important that

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Speaker 4: we try to find common ground to build a better

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Speaker 4: relationship with China on rather continuing this downward spiral of

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Speaker 4: tit for tat on trade policies and otherwise.

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Speaker 3: How do you think about this as somebody who runs

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Speaker 3: a business in terms of whether you st nope, So just.

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Speaker 2: Take a step back.

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Speaker 4: If I'm Biden, I don't show weakness, I don't project

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Speaker 4: weakness in any way. I need to project a strong America.

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Speaker 4: The Chinese respect a country that is comfortable in its

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Speaker 4: own strength, just as the United States should respect China

439
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Speaker 4: and its position on the world stage. I think one

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Speaker 4: of them is calculations by the Trump administration was to

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Speaker 4: make the Chinese feel belittled or attacked. It was the

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Speaker 4: wrong tone, the wrong rhetoric with one of our most

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Speaker 4: important trading partners in the world.

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Speaker 3: It sounds like, as you speak about the way global

445
00:24:10,200 --> 00:24:13,800
Speaker 3: relationships are changing under the environment that we're in you're

446
00:24:13,920 --> 00:24:19,159
Speaker 3: calling for more of a normalization of relationships across the globe,

447
00:24:19,240 --> 00:24:21,760
Speaker 3: let alone this idea that that existed a couple of

448
00:24:21,840 --> 00:24:24,720
Speaker 3: years ago, where there was a call for more deglobalization.

449
00:24:25,640 --> 00:24:28,919
Speaker 3: Do you think that the world is too interconnected to

450
00:24:29,119 --> 00:24:30,159
Speaker 3: be delinked.

451
00:24:30,320 --> 00:24:32,879
Speaker 4: No, I think the cost to the world of delinking

452
00:24:33,000 --> 00:24:36,240
Speaker 4: is too high to even imagine. Like, that's what's getting

453
00:24:36,280 --> 00:24:39,080
Speaker 4: lost is the cost of a de linked world. Is

454
00:24:39,119 --> 00:24:42,920
Speaker 4: a world in which we're all profoundly poor, and we're

455
00:24:42,960 --> 00:24:45,480
Speaker 4: poor at a moment in time where we almost everywhere

456
00:24:45,520 --> 00:24:50,840
Speaker 4: in the Western world have aging societies, large structural both

457
00:24:51,200 --> 00:24:54,919
Speaker 4: deficits and debts, and we need to have economies that

458
00:24:54,960 --> 00:24:58,600
Speaker 4: are growing and creating for the future. If we're going

459
00:24:58,680 --> 00:25:01,760
Speaker 4: to meet the obligations to our retirees and if we're

460
00:25:01,760 --> 00:25:05,080
Speaker 4: going to offer a better future to our children in

461
00:25:05,080 --> 00:25:08,600
Speaker 4: a world in which we're rapidly decoupling, there's no way

462
00:25:08,680 --> 00:25:11,320
Speaker 4: we're going to make our promises and commitments to our retirees,

463
00:25:11,800 --> 00:25:14,919
Speaker 4: and our children will actually for the first time have

464
00:25:15,040 --> 00:25:18,280
Speaker 4: a bleakier future than we had and our parents had

465
00:25:18,359 --> 00:25:19,680
Speaker 4: and our parents had.

466
00:25:19,920 --> 00:25:20,919
Speaker 5: So how do you think about this?

467
00:25:21,040 --> 00:25:24,199
Speaker 3: Back to as a business owner, there has been a

468
00:25:24,240 --> 00:25:27,159
Speaker 3: sense that Citadel Securities have sought to expand in China.

469
00:25:27,280 --> 00:25:31,240
Speaker 3: In particular, what's the opportunity in terms of the Chinese

470
00:25:31,280 --> 00:25:33,720
Speaker 3: economy and what's the risk given the global tention.

471
00:25:33,960 --> 00:25:35,120
Speaker 2: Let's take a huge step back.

472
00:25:35,920 --> 00:25:37,879
Speaker 4: One of the areas in which the United States is

473
00:25:37,920 --> 00:25:43,080
Speaker 4: extraordinary good is financial services. And many of the world's

474
00:25:43,119 --> 00:25:46,560
Speaker 4: top asset management businesses are right here in the United States.

475
00:25:46,920 --> 00:25:53,120
Speaker 4: From Fidelity to Blackstone, to KKR to Citadel, the list goes.

476
00:25:52,960 --> 00:25:53,560
Speaker 2: On and on.

477
00:25:54,000 --> 00:25:57,119
Speaker 4: Most of the preeminent asset management firms in the world

478
00:25:57,520 --> 00:26:02,320
Speaker 4: are here in America. These firms create incredibly high paying

479
00:26:02,440 --> 00:26:07,399
Speaker 4: jobs and throw off enormous sums of taxable income that

480
00:26:07,520 --> 00:26:10,000
Speaker 4: helps to deal with the financial problems that we have

481
00:26:10,600 --> 00:26:13,000
Speaker 4: as a government. I mean, think about the banking system.

482
00:26:13,440 --> 00:26:15,080
Speaker 4: Name the most important banks in the.

483
00:26:15,040 --> 00:26:19,800
Speaker 5: World, the ones based in China and the United States.

484
00:26:20,560 --> 00:26:23,040
Speaker 4: The world would say it's the banks based in America,

485
00:26:23,560 --> 00:26:26,520
Speaker 4: like JP Morgan. You want to think about the dominant

486
00:26:26,520 --> 00:26:28,240
Speaker 4: bank of the world, the first thing you're going to

487
00:26:28,280 --> 00:26:29,800
Speaker 4: think about is JP Morgan.

488
00:26:31,320 --> 00:26:32,399
Speaker 2: It's just that simple.

489
00:26:32,800 --> 00:26:36,399
Speaker 4: And think about the incredible amount of both employment and

490
00:26:36,560 --> 00:26:39,640
Speaker 4: taxable income that a JP Morgan throws off. Now, why

491
00:26:39,640 --> 00:26:42,720
Speaker 4: do I talk about this in these ways? In Washington,

492
00:26:42,840 --> 00:26:46,439
Speaker 4: there's a real pressure to attack Wall Street, to attack

493
00:26:46,480 --> 00:26:53,440
Speaker 4: financial services. I don't understand why we want to injure

494
00:26:54,040 --> 00:26:57,520
Speaker 4: a sector of our economy that is a world champion.

495
00:26:58,359 --> 00:27:02,800
Speaker 4: Most countries try to protect their world champion industries. They

496
00:27:02,840 --> 00:27:06,239
Speaker 4: try to encourage their growth and prosperity. So for me,

497
00:27:06,560 --> 00:27:10,320
Speaker 4: I'm completely befuddled by the efforts of the progressive left

498
00:27:10,600 --> 00:27:13,040
Speaker 4: to attack a part of our economy where we not

499
00:27:13,040 --> 00:27:16,600
Speaker 4: only thrive domestically, but we thrive globally.

500
00:27:17,680 --> 00:27:18,800
Speaker 5: Well, let's just get into it.

501
00:27:18,840 --> 00:27:22,639
Speaker 3: Then. Let's talk about Gary Gensler. It's no secret that

502
00:27:22,680 --> 00:27:25,000
Speaker 3: you've been frustrated with his approach. He has a pretty

503
00:27:25,000 --> 00:27:28,520
Speaker 3: sweeping agenda. He've said some pretty harsh things about his approach.

504
00:27:28,760 --> 00:27:31,199
Speaker 3: But what frustrates you the most about what he is

505
00:27:31,240 --> 00:27:32,840
Speaker 3: trying to accomplish.

506
00:27:32,440 --> 00:27:35,000
Speaker 4: Well, there's a huge amount of effort to solve to

507
00:27:35,040 --> 00:27:40,520
Speaker 4: find solutions for problems that don't exists. If I want

508
00:27:40,520 --> 00:27:42,480
Speaker 4: to put it in a sentence, it's why are we

509
00:27:42,520 --> 00:27:44,359
Speaker 4: finding solutions for problems that don't exist?

510
00:27:46,440 --> 00:27:48,879
Speaker 5: Well, you know what would the equity market look like?

511
00:27:49,040 --> 00:27:51,919
Speaker 3: He's on a path to really change the way equity

512
00:27:51,960 --> 00:27:55,240
Speaker 3: market structure works. If he succeeds with his current proposals,

513
00:27:55,560 --> 00:27:56,200
Speaker 3: what would happen?

514
00:27:56,520 --> 00:27:59,120
Speaker 4: So actually, none of us know because his proposal has

515
00:27:59,200 --> 00:28:02,440
Speaker 4: so many different moves being parts, the intersection of which

516
00:28:02,520 --> 00:28:06,399
Speaker 4: is not appreciated or understood, so we don't really know

517
00:28:06,440 --> 00:28:08,720
Speaker 4: what that world looks like. I'll give you a simple SoundBite.

518
00:28:09,400 --> 00:28:13,480
Speaker 4: In the retail market, one of the most important concerns

519
00:28:13,520 --> 00:28:17,040
Speaker 4: that retail investors have is how is their order handled?

520
00:28:17,600 --> 00:28:18,960
Speaker 2: And in particular, there's an.

521
00:28:19,040 --> 00:28:24,320
Speaker 4: Entire body of law that says a firm that manages

522
00:28:24,480 --> 00:28:28,480
Speaker 4: the execution of a retail order cannot front run that order.

523
00:28:29,960 --> 00:28:31,879
Speaker 2: And it's a very important.

524
00:28:31,800 --> 00:28:36,159
Speaker 4: Law because it gives the retail investor confidence that they're

525
00:28:36,200 --> 00:28:43,280
Speaker 4: being treated fairly. Now here's what's remarkable in what a

526
00:28:43,320 --> 00:28:47,640
Speaker 4: Gary Ginster's market proposals. Every retail order must be sent

527
00:28:47,800 --> 00:28:52,880
Speaker 4: to a publicly displayed auction So not only can the

528
00:28:52,960 --> 00:28:56,400
Speaker 4: market maker front run that order, but every single market

529
00:28:56,400 --> 00:29:01,600
Speaker 4: maker can front run that order legally, How in the

530
00:29:01,640 --> 00:29:08,040
Speaker 4: world do you reconcile decades of regulatory decision making, all

531
00:29:08,080 --> 00:29:11,880
Speaker 4: designed to protect retail investors and undermine it in one

532
00:29:11,920 --> 00:29:15,160
Speaker 4: foul swoop like this So that's a great example of

533
00:29:15,160 --> 00:29:18,720
Speaker 4: a solution. In this case, it's an anti solution in

534
00:29:18,760 --> 00:29:19,880
Speaker 4: search of a problem.

535
00:29:20,400 --> 00:29:22,960
Speaker 3: I'm glad you brought up the issue about the retail investor.

536
00:29:23,120 --> 00:29:24,640
Speaker 3: You kind of made the joke about their the meme

537
00:29:24,680 --> 00:29:27,280
Speaker 3: stocks a little earlier. Gary Gansler's trying to protect the

538
00:29:27,280 --> 00:29:31,400
Speaker 3: retail investor. Before I came to interview you, I mentioned

539
00:29:31,400 --> 00:29:34,200
Speaker 3: that I was interviewing you online and about six hundred

540
00:29:34,240 --> 00:29:36,440
Speaker 3: responses came in about you and.

541
00:29:36,360 --> 00:29:37,000
Speaker 5: What you do.

542
00:29:37,520 --> 00:29:41,120
Speaker 3: Why do you think that the American retail investor feels

543
00:29:41,120 --> 00:29:43,840
Speaker 3: so much like Wall Street has an unfair advantage.

544
00:29:43,880 --> 00:29:44,960
Speaker 5: What do you tell them?

545
00:29:45,320 --> 00:29:47,960
Speaker 4: Well, I mean, first of all, that's a there's two

546
00:29:48,000 --> 00:29:51,120
Speaker 4: conversations here. There is I'm a retail investor and I'm

547
00:29:51,120 --> 00:29:54,000
Speaker 4: going to compete with Wall Street. And the second is,

548
00:29:54,240 --> 00:29:57,000
Speaker 4: when it comes down to the moment of execution, how

549
00:29:57,000 --> 00:30:00,800
Speaker 4: am I treated right? So let's just art with basics.

550
00:30:01,640 --> 00:30:05,480
Speaker 4: What's the day job of all my investment team. It's

551
00:30:05,560 --> 00:30:08,680
Speaker 4: to understand stocks, it's to understand companies, it's to meet

552
00:30:08,680 --> 00:30:12,680
Speaker 4: with management teams. It's really hard as a retail investor

553
00:30:13,400 --> 00:30:17,960
Speaker 4: who trade stocks in the free minutes of their day,

554
00:30:18,080 --> 00:30:21,440
Speaker 4: to compete with people whose entire life comes down to

555
00:30:21,520 --> 00:30:25,240
Speaker 4: researching and understanding business models and the pricing of securities.

556
00:30:25,520 --> 00:30:27,040
Speaker 4: It'd be like if we went on the street right

557
00:30:27,080 --> 00:30:30,400
Speaker 4: now and found somebody to do this interview and to

558
00:30:30,400 --> 00:30:33,040
Speaker 4: put them in the seat to moderate this interview, It's

559
00:30:33,080 --> 00:30:34,200
Speaker 4: fair to say they'd struggle.

560
00:30:38,160 --> 00:30:43,280
Speaker 5: They had all the questions for you, right, It's.

561
00:30:43,120 --> 00:30:44,360
Speaker 2: Just not a fair comparison.

562
00:30:44,800 --> 00:30:48,080
Speaker 4: So one of the challenges is, I think the sec

563
00:30:48,720 --> 00:30:51,640
Speaker 4: If you want to protect retail investors, it's get them

564
00:30:51,680 --> 00:30:54,040
Speaker 4: into the right products. It's get them into mutual funds.

565
00:30:54,160 --> 00:30:56,480
Speaker 4: It's to get them into index funds. It's to make

566
00:30:56,480 --> 00:30:59,040
Speaker 4: sure that we encourage them to own portfolios of ETFs

567
00:30:59,080 --> 00:31:02,800
Speaker 4: and diversified to take advantage of the wealth management products

568
00:31:02,800 --> 00:31:05,600
Speaker 4: at the large banks like JP Morgan or Morgan Stanley offer,

569
00:31:06,040 --> 00:31:08,920
Speaker 4: Like that's a really powerful way to protect the interest

570
00:31:08,960 --> 00:31:12,800
Speaker 4: to retail investors is to encourage them to be in

571
00:31:12,880 --> 00:31:17,160
Speaker 4: products that are professionally managed that offer a much better

572
00:31:17,240 --> 00:31:20,600
Speaker 4: risk return ratio than the average retail investor has the

573
00:31:20,640 --> 00:31:24,320
Speaker 4: market now, having said that, having seen a substantial amount

574
00:31:24,320 --> 00:31:26,400
Speaker 4: of orderflow from the US retail investor over the years,

575
00:31:26,880 --> 00:31:29,120
Speaker 4: there are, of course some retail investors who are really

576
00:31:29,160 --> 00:31:32,760
Speaker 4: good at understanding emerging trends. I mean, look at how

577
00:31:32,840 --> 00:31:35,960
Speaker 4: much money retail investors made in Tesla and god Bless,

578
00:31:36,000 --> 00:31:39,080
Speaker 4: like they were there at the start of this transformation

579
00:31:39,440 --> 00:31:43,080
Speaker 4: of the of the automobile, on the EV wave that

580
00:31:43,120 --> 00:31:47,840
Speaker 4: Elon Musk created, like they crushed it. Same with Apple,

581
00:31:48,160 --> 00:31:51,160
Speaker 4: same with a number of other really powerful stories. So

582
00:31:51,280 --> 00:31:54,400
Speaker 4: clearly we want to make sure retail has access to

583
00:31:54,440 --> 00:31:57,880
Speaker 4: trading stocks directly because for many of these investors they're

584
00:31:57,880 --> 00:32:00,960
Speaker 4: actually they're pretty good at it. But big picture, the

585
00:32:01,000 --> 00:32:04,000
Speaker 4: SEC should encourage people to be in professionally managed products.

586
00:32:04,520 --> 00:32:06,440
Speaker 2: For those that really do have a gift at.

587
00:32:06,400 --> 00:32:09,520
Speaker 4: Understanding how the world's going to unfold, be comfortable in

588
00:32:09,560 --> 00:32:13,160
Speaker 4: trading in single stocks, be comfortable in having portfolios that

589
00:32:13,280 --> 00:32:15,880
Speaker 4: manifest your views. When we get down to the nuts

590
00:32:15,880 --> 00:32:18,120
Speaker 4: and bolts of execution, let me tell you about the

591
00:32:18,120 --> 00:32:20,320
Speaker 4: good old days. When I was a retail investor in college,

592
00:32:21,680 --> 00:32:24,880
Speaker 4: I paid nineteen ninety five in commission and was lucky

593
00:32:24,920 --> 00:32:26,760
Speaker 4: to have a twenty five cent Why bit ass spread

594
00:32:29,640 --> 00:32:31,840
Speaker 4: in the early days of Citadel and the good old days,

595
00:32:31,840 --> 00:32:36,920
Speaker 4: we used to have spare phones. Do you know why

596
00:32:37,160 --> 00:32:42,840
Speaker 4: traders would break them in frustration over their experience tradeing

597
00:32:42,880 --> 00:32:45,280
Speaker 4: a stock on a given exchange.

598
00:32:45,560 --> 00:32:48,200
Speaker 2: We'll leave it at that, all right. We don't have

599
00:32:48,240 --> 00:32:49,160
Speaker 2: any extra phones today.

600
00:32:49,200 --> 00:32:50,480
Speaker 5: It sounds like an expensive habit.

601
00:32:50,680 --> 00:32:52,680
Speaker 4: It was an expensive habit, But there were a lot

602
00:32:52,680 --> 00:32:55,640
Speaker 4: of expensive days. You'd go to buy one hundred thousand shares,

603
00:32:56,000 --> 00:32:57,080
Speaker 4: you'd buy ten thousand.

604
00:32:57,080 --> 00:32:58,560
Speaker 2: The prices up a quarter of a point. You buy

605
00:32:58,560 --> 00:32:59,960
Speaker 2: ten thousand more of the prices.

606
00:32:59,680 --> 00:33:03,000
Speaker 4: Up a quarter of a point, not a quarter of ascent,

607
00:33:03,040 --> 00:33:05,440
Speaker 4: a quarter of a point. That was the good old

608
00:33:05,520 --> 00:33:09,440
Speaker 4: days in the nineteen nineties. Trading stocks the United States. Today,

609
00:33:09,720 --> 00:33:14,960
Speaker 4: retail vests trade for zero commission and a spread that's

610
00:33:15,000 --> 00:33:19,240
Speaker 4: a fraction of the post it spread on the marketplace.

611
00:33:20,000 --> 00:33:23,040
Speaker 4: So stock that's a penny wide retail trades for a

612
00:33:23,200 --> 00:33:25,800
Speaker 4: tens of cent or seven tenths.

613
00:33:25,520 --> 00:33:29,640
Speaker 2: Of as cent. It's a remarkably efficient market. It's a real.

614
00:33:29,440 --> 00:33:34,080
Speaker 4: Testament to the power of technology, to the power of

615
00:33:34,120 --> 00:33:37,600
Speaker 4: the ability to process millions of transactions a day at

616
00:33:37,720 --> 00:33:40,719
Speaker 4: costs that are next to zero within our financial infrastructure.

617
00:33:40,800 --> 00:33:43,520
Speaker 3: Well, let's talk about efficiency for a second here. What

618
00:33:43,560 --> 00:33:46,080
Speaker 3: does this mean for the equity markets relative to other

619
00:33:46,600 --> 00:33:51,160
Speaker 3: less efficient markets. Citadel has been expanding into many new areas,

620
00:33:51,160 --> 00:33:54,280
Speaker 3: both Citadel and Citadel securities. It's captured the attention of

621
00:33:54,320 --> 00:33:56,040
Speaker 3: a lot of Wall Street, the move into fixed income

622
00:33:56,040 --> 00:33:58,920
Speaker 3: in a much bigger way. Are you looking to places

623
00:33:59,040 --> 00:34:02,440
Speaker 3: outside of the market in a much bigger way? And

624
00:34:02,520 --> 00:34:06,160
Speaker 3: are you concerned about the ability to capture mora alpha

625
00:34:06,200 --> 00:34:07,720
Speaker 3: in the equity markets these days?

626
00:34:08,160 --> 00:34:11,320
Speaker 4: Well, there's a lot in that question, so let's unpack

627
00:34:11,360 --> 00:34:13,960
Speaker 4: that in a couple different ways. Equity market United States

628
00:34:13,960 --> 00:34:18,600
Speaker 4: holistically extraordinarily efficient, and that's great. That means our market

629
00:34:18,640 --> 00:34:21,560
Speaker 4: is allocating capital the best and highest use. That's how

630
00:34:21,560 --> 00:34:24,320
Speaker 4: we create jobs. That's how we create a stronger America.

631
00:34:24,840 --> 00:34:28,120
Speaker 4: Fixing come markets in the United States, charge your market, unfortunately,

632
00:34:28,160 --> 00:34:28,919
Speaker 4: is getting too big.

633
00:34:29,360 --> 00:34:31,239
Speaker 2: We need to get our physical house order. We've talked

634
00:34:31,280 --> 00:34:31,840
Speaker 2: about that.

635
00:34:32,239 --> 00:34:35,200
Speaker 4: Corporate bond market under quite a bit of change. The

636
00:34:35,360 --> 00:34:42,920
Speaker 4: rise of private lending is really starting to show an

637
00:34:43,000 --> 00:34:47,520
Speaker 4: impact on the overall corporate bond market. And I do

638
00:34:47,640 --> 00:34:51,000
Speaker 4: worry about that. I worry about the lack of price transparency.

639
00:34:51,320 --> 00:34:53,960
Speaker 4: I worry about the lack of real time feedback loops

640
00:34:54,239 --> 00:34:58,680
Speaker 4: that indicate to both managers and investors how.

641
00:34:58,520 --> 00:35:01,239
Speaker 2: Good or how well is my capital being allocated.

642
00:35:01,600 --> 00:35:03,640
Speaker 4: So one of my worries about the rise of private

643
00:35:03,640 --> 00:35:08,200
Speaker 4: credit is we're undermining the transparency of price that's so

644
00:35:08,239 --> 00:35:10,920
Speaker 4: important for all of us to understand how good of

645
00:35:10,920 --> 00:35:15,040
Speaker 4: a job are we doing an allocating risk now in

646
00:35:15,520 --> 00:35:18,799
Speaker 4: trading markets and capital markets and civil securities. I mean

647
00:35:19,040 --> 00:35:21,600
Speaker 4: to be clear, what we've done is we've been at

648
00:35:21,600 --> 00:35:26,719
Speaker 4: the forefront of electronification of markets. We felt that the

649
00:35:26,719 --> 00:35:29,680
Speaker 4: good old days where you broke phones were days that

650
00:35:29,719 --> 00:35:33,240
Speaker 4: would be left in the past by the rise of technology,

651
00:35:34,080 --> 00:35:36,880
Speaker 4: and we went all in on that bet and we

652
00:35:36,880 --> 00:35:40,040
Speaker 4: were right, Like, we got that one right. The rise

653
00:35:40,080 --> 00:35:44,080
Speaker 4: of electronic trading options in equities and fixed income has

654
00:35:44,200 --> 00:35:49,279
Speaker 4: really dramatically changed or transformed the end user's experience in

655
00:35:49,320 --> 00:35:53,080
Speaker 4: trading these products, even if you're trading by voice, because

656
00:35:53,120 --> 00:35:55,120
Speaker 4: the trade you're doing is bigger than the trade that's

657
00:35:55,120 --> 00:35:59,880
Speaker 4: typical in the electronic market. You're leveraging the price trans

658
00:36:00,120 --> 00:36:04,399
Speaker 4: parency and you're leveraging liquidity that takes place in those

659
00:36:04,480 --> 00:36:08,480
Speaker 4: electronic markets. So that that's been a transformation that we

660
00:36:08,600 --> 00:36:12,480
Speaker 4: have been a huge beneficiary of as CITL Securities. We've

661
00:36:12,520 --> 00:36:16,319
Speaker 4: pushed this transformation and it's been it's been a ce

662
00:36:16,719 --> 00:36:21,120
Speaker 4: change for end investors around the world, Bit spreads of

663
00:36:21,160 --> 00:36:26,319
Speaker 4: plummeted holistically, liquidity has soared across virtually every product type

664
00:36:26,320 --> 00:36:30,200
Speaker 4: that's moved to electronic markets, and price formation is far

665
00:36:30,280 --> 00:36:31,480
Speaker 4: more clear and transparent.

666
00:36:32,120 --> 00:36:34,640
Speaker 3: Now, what does this mean in the context of new

667
00:36:34,680 --> 00:36:40,160
Speaker 3: technologies AI? Generative AI in particular, does it add something

668
00:36:40,239 --> 00:36:42,880
Speaker 3: to the table that existing technologies don't already do?

669
00:36:43,680 --> 00:36:47,080
Speaker 4: So, I think the impact on financial markets will be

670
00:36:47,640 --> 00:36:50,000
Speaker 4: less than it will be in other parts of the economy.

671
00:36:50,520 --> 00:36:52,160
Speaker 4: And I think you know one thing keep in mind

672
00:36:52,200 --> 00:36:56,280
Speaker 4: with generative AIS, it does produce written words, It produces images,

673
00:36:56,320 --> 00:36:59,040
Speaker 4: it pushes, it produces things that we as humans can

674
00:36:59,080 --> 00:37:02,719
Speaker 4: immediately relate to. And in fact, it's almost like magic, right,

675
00:37:02,880 --> 00:37:07,040
Speaker 4: like a speech an X and you're right back, a

676
00:37:07,080 --> 00:37:09,680
Speaker 4: pretty good speech, write a paper. And why, I mean,

677
00:37:09,760 --> 00:37:14,640
Speaker 4: it's remarkable how it's able to create freeform texts that

678
00:37:14,719 --> 00:37:19,120
Speaker 4: seems logical and coherent, accurate. Well, that's another question sometimes,

679
00:37:19,520 --> 00:37:24,840
Speaker 4: but it's really transformational as compared to predecessor forms of

680
00:37:24,880 --> 00:37:29,080
Speaker 4: machine learning, which produced zeros and ones much more inscrutable.

681
00:37:29,400 --> 00:37:30,680
Speaker 2: Now, machine learning.

682
00:37:30,400 --> 00:37:33,960
Speaker 4: Has been used by the marketmaker community for years. It's

683
00:37:34,080 --> 00:37:37,200
Speaker 4: part of how we've been able to bring down bidass

684
00:37:37,239 --> 00:37:40,440
Speaker 4: spreads and increased liquidity. Is through machine learning, we can

685
00:37:40,480 --> 00:37:42,960
Speaker 4: better understand how to price risk and how to manage risk,

686
00:37:43,280 --> 00:37:44,720
Speaker 4: and those techniques.

687
00:37:44,280 --> 00:37:46,480
Speaker 2: Are widely used across Wall Street today.

688
00:37:47,360 --> 00:37:50,759
Speaker 4: From my perspective, the big impact of generative AI is

689
00:37:50,800 --> 00:37:58,040
Speaker 4: going to be call centers, translation work, producing content for Hollywood.

690
00:37:58,560 --> 00:38:02,600
Speaker 4: I mean the ability to render. I've told this story before.

691
00:38:03,600 --> 00:38:06,920
Speaker 4: A friend of mine showed me an image of a

692
00:38:06,960 --> 00:38:09,400
Speaker 4: future star trek clip or movie which has yet to

693
00:38:09,440 --> 00:38:09,960
Speaker 4: be created.

694
00:38:10,400 --> 00:38:14,680
Speaker 2: And there's James Kirk and there is.

695
00:38:15,040 --> 00:38:20,240
Speaker 4: Doctor mister Spock and they look perfect except they don't exist.

696
00:38:22,760 --> 00:38:25,520
Speaker 3: So over at the Hedge Fund at Citadel, how do

697
00:38:25,560 --> 00:38:28,720
Speaker 3: you think about either getting in on the AI craze

698
00:38:28,880 --> 00:38:31,000
Speaker 3: or do you think that it's in too much of

699
00:38:31,000 --> 00:38:31,440
Speaker 3: a bubble?

700
00:38:32,040 --> 00:38:33,879
Speaker 4: Well, I mean okay, so the minute you say get

701
00:38:33,920 --> 00:38:37,279
Speaker 4: in on the AI craze, you've given the answer like,

702
00:38:37,320 --> 00:38:37,640
Speaker 4: we're not.

703
00:38:37,680 --> 00:38:39,560
Speaker 2: We're not trying to get in on crazes.

704
00:38:40,640 --> 00:38:45,520
Speaker 4: We're trying to get into businesses where where the market

705
00:38:45,520 --> 00:38:50,600
Speaker 4: has yet to perceive the value or IMPACT's.

706
00:38:48,920 --> 00:38:50,120
Speaker 2: That's where we want to put our capital.

707
00:38:50,120 --> 00:38:52,080
Speaker 4: We want to put our capital on what's going to

708
00:38:52,080 --> 00:38:55,920
Speaker 4: be important in the future. Now, there are dimensions of

709
00:38:56,000 --> 00:38:59,520
Speaker 4: the AI craze that we think are really interesting. For example,

710
00:38:59,560 --> 00:39:04,040
Speaker 4: how mike Soft is using AI to empower its suite

711
00:39:04,040 --> 00:39:08,480
Speaker 4: of software and how Microsoft is driving its users towards

712
00:39:08,520 --> 00:39:13,879
Speaker 4: the cloud is a really interesting studying corporate strategy. I mean,

713
00:39:14,280 --> 00:39:16,759
Speaker 4: I got to tell you, they're just crushing it. And

714
00:39:16,800 --> 00:39:19,799
Speaker 4: by creating a product suite that pushes you towards their

715
00:39:19,880 --> 00:39:23,880
Speaker 4: cloud environment, they really marry you to Microsoft holistically in

716
00:39:23,920 --> 00:39:26,560
Speaker 4: a very different way than you've been married to Microsoft

717
00:39:26,600 --> 00:39:29,799
Speaker 4: in the last ten or fifteen years. So we think

718
00:39:29,840 --> 00:39:33,560
Speaker 4: about these second order effects that these technologies have.

719
00:39:34,000 --> 00:39:35,480
Speaker 2: We think about how.

720
00:39:37,440 --> 00:39:39,719
Speaker 4: You first order effect over a zempick is people lose

721
00:39:39,760 --> 00:39:42,239
Speaker 4: a bunch of weight. Second order effect is they drink

722
00:39:42,320 --> 00:39:45,479
Speaker 4: less alcohol, So you want to make sure you don't

723
00:39:45,480 --> 00:39:48,480
Speaker 4: own as much of the of the alcohol oriented companies

724
00:39:48,520 --> 00:39:51,080
Speaker 4: around the world. It's the second order effects. We spend

725
00:39:51,120 --> 00:39:54,040
Speaker 4: a lot of time at thinking in our in our

726
00:39:54,080 --> 00:39:57,720
Speaker 4: investment management. We all know what's happening first order, what's

727
00:39:57,719 --> 00:39:58,879
Speaker 4: going to happen second order?

728
00:39:59,080 --> 00:40:00,600
Speaker 2: How do we capital on that?

729
00:40:01,239 --> 00:40:04,319
Speaker 3: Another question quickly on the future of Citadel Securities. You

730
00:40:04,400 --> 00:40:06,080
Speaker 3: about a year and a half ago, maybe be a

731
00:40:06,080 --> 00:40:08,640
Speaker 3: little more than then. I took an investment from Paradigm

732
00:40:08,800 --> 00:40:11,759
Speaker 3: and Sequoia. What does that mean in terms of the

733
00:40:11,800 --> 00:40:14,680
Speaker 3: direction of travel? What have you learned from them in

734
00:40:14,800 --> 00:40:19,359
Speaker 3: terms of technology? And does the signal on IPOs anytime soon?

735
00:40:20,480 --> 00:40:22,480
Speaker 4: Well, so I think we need to ask Gerry againster

736
00:40:22,640 --> 00:40:25,120
Speaker 4: do we want public companies in America?

737
00:40:25,360 --> 00:40:27,240
Speaker 2: That's a bit of a question mark these days.

738
00:40:27,239 --> 00:40:31,520
Speaker 4: In fact, there's roughly twelve hundred plus unicorns companies valued

739
00:40:31,640 --> 00:40:35,000
Speaker 4: over a billion dollars that are not public. What is

740
00:40:35,040 --> 00:40:38,440
Speaker 4: it that we have done to destroy the value proposition

741
00:40:38,600 --> 00:40:41,160
Speaker 4: of being public in America? And by the way, that's

742
00:40:41,200 --> 00:40:45,160
Speaker 4: twelve hundred companies that would have written tens of thousands,

743
00:40:45,440 --> 00:40:48,560
Speaker 4: hundreds of thousands, or millions of retirement stories.

744
00:40:50,480 --> 00:40:50,680
Speaker 2: Right.

745
00:40:50,719 --> 00:40:52,640
Speaker 4: Think about all the people that we've met in our

746
00:40:52,680 --> 00:40:56,000
Speaker 4: lives that have a story of do you know my

747
00:40:56,200 --> 00:40:58,759
Speaker 4: grandmother bought IBM when it first went public and she

748
00:40:58,800 --> 00:41:01,200
Speaker 4: owned it to the day she died, and she died

749
00:41:01,200 --> 00:41:02,040
Speaker 4: with ten million dollars.

750
00:41:02,880 --> 00:41:04,080
Speaker 2: We all know these.

751
00:41:03,920 --> 00:41:07,000
Speaker 4: Stories of people who have been able to take advantage

752
00:41:07,360 --> 00:41:11,040
Speaker 4: of the enormous wealth creation of American entrepreneurs, and these

753
00:41:11,080 --> 00:41:15,480
Speaker 4: companies staying private for longer is depriving American.

754
00:41:15,080 --> 00:41:18,520
Speaker 2: And retail vestors of that opportunity. So that's number one.

755
00:41:18,800 --> 00:41:22,560
Speaker 4: Number two, Sequoia has been a fantastic partner in the business.

756
00:41:23,239 --> 00:41:26,960
Speaker 4: They are absolutely great in the boardroom. They keep my

757
00:41:27,000 --> 00:41:30,000
Speaker 4: management team focused on the right issues, the right metrics.

758
00:41:30,400 --> 00:41:33,680
Speaker 4: They really help to be a voice of both passion

759
00:41:33,760 --> 00:41:37,720
Speaker 4: around growth and passion running a business. And of course

760
00:41:37,840 --> 00:41:40,160
Speaker 4: they do have the expertise as what it takes to

761
00:41:40,239 --> 00:41:42,840
Speaker 4: run a successful public company and they bring that to

762
00:41:42,880 --> 00:41:44,960
Speaker 4: the table each and every day. So they've been a

763
00:41:45,000 --> 00:41:48,080
Speaker 4: great partner to work with. I really value the relationship

764
00:41:48,080 --> 00:41:49,239
Speaker 4: that we have with Sequoia.

765
00:41:49,320 --> 00:41:52,400
Speaker 3: Does this all signal and intent for you, particularly at

766
00:41:52,440 --> 00:41:54,279
Speaker 3: the hedge fund firm, to be investing more in the

767
00:41:54,280 --> 00:41:55,080
Speaker 3: private markets?

768
00:41:55,719 --> 00:41:58,840
Speaker 4: So there's no doubt that market forces today are pushing

769
00:41:58,840 --> 00:42:01,360
Speaker 4: one to think more and more investing in private markets.

770
00:42:01,680 --> 00:42:02,440
Speaker 2: There's no doubt.

771
00:42:02,680 --> 00:42:06,360
Speaker 4: As the SEC continues to pursue strategies that shrink the

772
00:42:06,400 --> 00:42:09,279
Speaker 4: relative size of the public markets, you need to think

773
00:42:09,320 --> 00:42:12,600
Speaker 4: about what's your growth equity strategy, what's your private credit strategy,

774
00:42:12,800 --> 00:42:15,880
Speaker 4: what's your private equity strategy? Like this is where the

775
00:42:15,920 --> 00:42:20,200
Speaker 4: SEC is ironically pushing the business is away from public markets,

776
00:42:20,640 --> 00:42:24,960
Speaker 4: and that unfortunately pushes more and more capital appreciation opportunities

777
00:42:24,960 --> 00:42:25,640
Speaker 4: outside of.

778
00:42:25,560 --> 00:42:28,040
Speaker 2: The hands of American retail investors.

779
00:42:28,400 --> 00:42:30,160
Speaker 3: So before I let you go, we have about ten

780
00:42:30,200 --> 00:42:32,399
Speaker 3: minutes left here. We talked about the future of SITTA out,

781
00:42:32,400 --> 00:42:33,960
Speaker 3: We've talked about the future of the economy.

782
00:42:34,120 --> 00:42:35,600
Speaker 5: What do you think is a bigger issue?

783
00:42:35,640 --> 00:42:38,000
Speaker 3: We are so close to the US election, and frankly,

784
00:42:38,040 --> 00:42:40,279
Speaker 3: there's no stage you've been on than anyone.

785
00:42:40,239 --> 00:42:42,640
Speaker 5: Gets away with not asking you what you think.

786
00:42:42,560 --> 00:42:44,480
Speaker 3: The future of the country is. What do you think

787
00:42:44,520 --> 00:42:46,879
Speaker 3: is a bigger issue going into the election next year?

788
00:42:47,080 --> 00:42:49,040
Speaker 3: The economy or national security?

789
00:42:49,080 --> 00:42:51,400
Speaker 2: At this point, people are going to vote their pocketbook.

790
00:42:53,440 --> 00:42:55,000
Speaker 5: How are you voting with your pocketbook?

791
00:42:56,160 --> 00:42:58,759
Speaker 4: My pocketbook's doing okay these days, so I'm going to

792
00:42:58,800 --> 00:43:01,040
Speaker 4: vote the national security issue.

793
00:43:01,560 --> 00:43:01,799
Speaker 2: Well.

794
00:43:02,120 --> 00:43:04,320
Speaker 5: To that, to that event too.

795
00:43:04,680 --> 00:43:09,759
Speaker 3: You've spoken quite favorably of Nicki Haley, partially because of

796
00:43:09,760 --> 00:43:12,560
Speaker 3: her expertise in this arena. Do you think she has

797
00:43:12,560 --> 00:43:14,640
Speaker 3: a chance to beat Donald Trump in the primaries? And

798
00:43:14,640 --> 00:43:16,400
Speaker 3: if not, what do you think is her biggest challenge?

799
00:43:16,719 --> 00:43:18,439
Speaker 4: Look, we're going to find out over the next twelve

800
00:43:18,480 --> 00:43:21,040
Speaker 4: weeks if she has that chance or not. The issue

801
00:43:21,120 --> 00:43:23,160
Speaker 4: is going to come down to is he brave enough

802
00:43:23,160 --> 00:43:24,080
Speaker 4: to face her in a debate?

803
00:43:26,200 --> 00:43:27,760
Speaker 5: Are you supporting her financially?

804
00:43:27,840 --> 00:43:31,160
Speaker 4: Yet that's a decision that we're actively contemplating. I mean,

805
00:43:31,200 --> 00:43:33,080
Speaker 4: we're at the finish line on that choice, yes or no.

806
00:43:33,520 --> 00:43:36,319
Speaker 4: But I think the real issue is Donald Trump, for

807
00:43:36,400 --> 00:43:39,040
Speaker 4: all of his bluster, willing to get on stage with

808
00:43:39,120 --> 00:43:40,000
Speaker 4: Nicky Haley or not.

809
00:43:41,600 --> 00:43:43,760
Speaker 2: I mean, Joe Biden at least had the excuse of COVID.

810
00:43:44,280 --> 00:43:45,400
Speaker 2: What's Trump's excuse?

811
00:43:46,360 --> 00:43:48,480
Speaker 3: So you would like to see her face off against him.

812
00:43:49,400 --> 00:43:50,080
Speaker 2: One hundred percent.

813
00:43:50,080 --> 00:43:52,399
Speaker 4: I'd like to see him show us what's he made

814
00:43:52,440 --> 00:43:55,359
Speaker 4: of at this moment in time now, and by the way,

815
00:43:55,360 --> 00:43:59,000
Speaker 4: I think the American public deserves to see. The American

816
00:43:59,040 --> 00:44:01,680
Speaker 4: public needs to see ken Donald Trump hold his own

817
00:44:01,680 --> 00:44:05,160
Speaker 4: with Thicky Haley if he can. That's actually pretty important

818
00:44:05,400 --> 00:44:07,480
Speaker 4: because if it ends up being Trump versus Buying, we're

819
00:44:07,480 --> 00:44:10,000
Speaker 4: both gonna be We're all gonna be asking ourselves about

820
00:44:10,040 --> 00:44:12,640
Speaker 4: their relative mental capacity.

821
00:44:13,000 --> 00:44:14,680
Speaker 3: What do you think the chances are that she could

822
00:44:15,160 --> 00:44:19,040
Speaker 3: be them? It sounds like you're pretty in her corner.

823
00:44:19,440 --> 00:44:22,640
Speaker 2: I like to see the battle. I'd like to see that.

824
00:44:24,080 --> 00:44:26,960
Speaker 3: So you've also mentioned I'm kind of curious by the way.

825
00:44:26,960 --> 00:44:28,839
Speaker 4: I'd like to see a battle of ideas rather than

826
00:44:28,840 --> 00:44:33,160
Speaker 4: a battle name calling. You can't run the largest economy

827
00:44:33,160 --> 00:44:36,560
Speaker 4: in the world as a name calling bully. You can

828
00:44:36,640 --> 00:44:39,120
Speaker 4: run the largest economy of the world with the right policies.

829
00:44:39,400 --> 00:44:41,960
Speaker 4: And what we're facing right now in our country is

830
00:44:42,000 --> 00:44:46,279
Speaker 4: since President Byen became president, the consumer faces prices that

831
00:44:46,280 --> 00:44:47,760
Speaker 4: are almost twenty percent higher.

832
00:44:48,320 --> 00:44:49,200
Speaker 2: They've had no.

833
00:44:49,280 --> 00:44:53,480
Speaker 4: Wage growth to speak of in real terms, none, and

834
00:44:53,520 --> 00:44:56,600
Speaker 4: our deficits increased, our national deaths increased.

835
00:44:56,200 --> 00:44:57,600
Speaker 2: By fifteen percent of GDP.

836
00:44:58,560 --> 00:45:03,120
Speaker 4: The American public, things aren't working in this economy for them,

837
00:45:03,560 --> 00:45:06,160
Speaker 4: and they actually asked who's it working for. They had

838
00:45:06,160 --> 00:45:09,200
Speaker 4: this misplaced idea it works for Wall Street, It's working

839
00:45:09,239 --> 00:45:13,560
Speaker 4: for no one. This is the price of bad economic policies.

840
00:45:13,600 --> 00:45:17,120
Speaker 4: I mean, whoever told them theyre running Bidenomics has no

841
00:45:17,239 --> 00:45:21,680
Speaker 4: idea how to read an economics textbook. So the question

842
00:45:21,760 --> 00:45:26,799
Speaker 4: here in looking forward is where's Biden going to go

843
00:45:26,960 --> 00:45:28,839
Speaker 4: on his economic policies And are we going to see

844
00:45:28,840 --> 00:45:31,799
Speaker 4: policies that are going to create real wage growth, that

845
00:45:31,840 --> 00:45:34,160
Speaker 4: are going to control inflation, that are going to give

846
00:45:34,200 --> 00:45:36,840
Speaker 4: us a brighter future that we deserve as an American people.

847
00:45:37,320 --> 00:45:39,520
Speaker 4: And then for Donald Trump, is he willing to get

848
00:45:39,520 --> 00:45:41,799
Speaker 4: on stage with Dickie Haley talk about these policies, whether

849
00:45:41,800 --> 00:45:44,560
Speaker 4: it's national defense or economics, because this is what the

850
00:45:44,600 --> 00:45:47,680
Speaker 4: American voter should care about. And nine months ago, a

851
00:45:47,760 --> 00:45:50,439
Speaker 4: year ago, you might have argued that the American voter

852
00:45:50,480 --> 00:45:51,880
Speaker 4: could look at this election as being a bit of

853
00:45:51,920 --> 00:45:54,560
Speaker 4: an entertainment moment. It doesn't really matter who president is.

854
00:45:54,640 --> 00:45:58,799
Speaker 4: Things are okay, but they're not. There's two wars in

855
00:45:58,800 --> 00:46:02,400
Speaker 4: this world. There's an auto control problem with spending in Washington.

856
00:46:03,160 --> 00:46:05,920
Speaker 4: We've got to put our House and Order, national security,

857
00:46:06,400 --> 00:46:09,000
Speaker 4: our budget to have a brighter future for America.

858
00:46:09,760 --> 00:46:12,840
Speaker 3: Now, you've mentioned in a recent interview with Dave Rubinstein

859
00:46:12,920 --> 00:46:17,239
Speaker 3: that you would prefer more younger candidates coming into office,

860
00:46:17,880 --> 00:46:20,440
Speaker 3: both on the Republican and Democratic side. Frankly, is there

861
00:46:20,440 --> 00:46:23,480
Speaker 3: anyone you would support as an up and comer?

862
00:46:24,920 --> 00:46:27,719
Speaker 4: So it doesn't matter like who I would support, it's

863
00:46:27,840 --> 00:46:28,960
Speaker 4: who's running today.

864
00:46:29,600 --> 00:46:30,359
Speaker 2: That's I mean.

865
00:46:30,400 --> 00:46:32,520
Speaker 4: One of the challenges with being involved in politics is

866
00:46:32,960 --> 00:46:35,440
Speaker 4: you have to accept the reality what the playing field is.

867
00:46:35,719 --> 00:46:37,160
Speaker 2: Now, with Dicky Haley, we do have.

868
00:46:37,120 --> 00:46:40,040
Speaker 4: Somebody who's younger we've got somebody who's the form policy

869
00:46:40,080 --> 00:46:43,920
Speaker 4: experience to be helpful. That's a real plus. But in

870
00:46:43,960 --> 00:46:46,880
Speaker 4: both parties just we need to we need to encourage

871
00:46:46,920 --> 00:46:49,799
Speaker 4: people who are younger to step into the fray. And

872
00:46:49,880 --> 00:46:52,480
Speaker 4: on the Democratic side, let's be clear in fairness to

873
00:46:52,560 --> 00:46:56,319
Speaker 4: their younger up and coming party members, it's hard to

874
00:46:56,360 --> 00:46:59,600
Speaker 4: run against the incumbent president. You're not likely to win

875
00:47:00,320 --> 00:47:02,920
Speaker 4: and you're likely to hurt that person's odds in a

876
00:47:02,920 --> 00:47:06,640
Speaker 4: general election. So that makes people hesitant to insert themselves

877
00:47:06,719 --> 00:47:08,120
Speaker 4: into a race against Biden.

878
00:47:09,840 --> 00:47:12,640
Speaker 3: I've got to ask you also, in that same interview,

879
00:47:12,719 --> 00:47:15,400
Speaker 3: you had mentioned that you had political ambitions in the

880
00:47:15,560 --> 00:47:18,960
Speaker 3: distant past, maybe for governor or a lawmaker one day,

881
00:47:19,239 --> 00:47:21,040
Speaker 3: and you've pushed back on the idea of running for

882
00:47:21,080 --> 00:47:25,600
Speaker 3: president yourself. What are the circumstances in the nation and

883
00:47:25,760 --> 00:47:28,440
Speaker 3: personally that you would accept a call to serve as

884
00:47:28,440 --> 00:47:33,040
Speaker 3: the Treasury secretary?

885
00:47:33,440 --> 00:47:35,400
Speaker 4: All right, well, let's just give a little context here.

886
00:47:35,480 --> 00:47:39,400
Speaker 4: David and I are both huge collectors of American documents,

887
00:47:40,280 --> 00:47:41,280
Speaker 4: documents of our government.

888
00:47:41,320 --> 00:47:41,480
Speaker 2: Right.

889
00:47:41,800 --> 00:47:43,480
Speaker 4: I own a copy of the was Constitution. He has

890
00:47:43,480 --> 00:47:46,680
Speaker 4: a great copy the Declaration of Independence. The context was

891
00:47:47,360 --> 00:47:49,600
Speaker 4: I really have great interest in public policy and in

892
00:47:49,640 --> 00:47:52,440
Speaker 4: good governance. All of us in this room are committed

893
00:47:52,760 --> 00:47:55,839
Speaker 4: and want to have good governance in America. And having

894
00:47:55,880 --> 00:47:58,480
Speaker 4: studied government at Harvard, like there's no doubt there's moments

895
00:47:58,520 --> 00:47:59,759
Speaker 4: in my life I've thought about what it would be

896
00:47:59,840 --> 00:48:01,919
Speaker 4: like to be in public office, Like that's just as

897
00:48:01,960 --> 00:48:04,200
Speaker 4: part of being in government at Harvard, is you have

898
00:48:04,280 --> 00:48:04,920
Speaker 4: that fantasy?

899
00:48:05,080 --> 00:48:06,960
Speaker 2: All right? I have no fantasy.

900
00:48:07,000 --> 00:48:10,880
Speaker 4: And being a Treasury I've got a great day job.

901
00:48:11,040 --> 00:48:15,080
Speaker 4: I've got four thousand colleagues I work for. If if

902
00:48:15,080 --> 00:48:17,719
Speaker 4: there were a financial crisis, of course, I would serve

903
00:48:17,760 --> 00:48:20,680
Speaker 4: our country in a heartbeat, of course, But right here,

904
00:48:20,760 --> 00:48:25,120
Speaker 4: right now, I don't think that being Secretary of Treasury

905
00:48:25,560 --> 00:48:28,759
Speaker 4: would create the opportunity to change our country for the

906
00:48:29,000 --> 00:48:31,920
Speaker 4: better in a way that would be profound enough for

907
00:48:31,960 --> 00:48:34,000
Speaker 4: me to walk away from my lifetime work and building

908
00:48:34,080 --> 00:48:37,160
Speaker 4: Citadel and my three kids, who are all basically teenagers

909
00:48:37,239 --> 00:48:38,799
Speaker 4: right now, very.

910
00:48:38,800 --> 00:48:42,200
Speaker 3: Last question for you. You have been building out your presence

911
00:48:42,280 --> 00:48:45,480
Speaker 3: right here in Miami. You have a big presence in

912
00:48:45,480 --> 00:48:49,080
Speaker 3: New York. You have reduced your exposure to Chicago, Miami

913
00:48:49,280 --> 00:48:51,120
Speaker 3: or New York. You know what is kind of the

914
00:48:51,760 --> 00:48:54,799
Speaker 3: vote for both sides here, what is in favor of

915
00:48:54,840 --> 00:48:55,400
Speaker 3: either city.

916
00:48:57,000 --> 00:49:03,880
Speaker 4: Well, so that's a great question, and let's cut to

917
00:49:03,880 --> 00:49:08,680
Speaker 4: the chase. New York is the financial capital of America today,

918
00:49:09,600 --> 00:49:13,200
Speaker 4: and it's New York's to lose. The density of talent

919
00:49:14,200 --> 00:49:17,880
Speaker 4: both in financial services and just writ large in New

920
00:49:17,960 --> 00:49:21,160
Speaker 4: York City is amongst the top in the world. I mean,

921
00:49:21,200 --> 00:49:26,080
Speaker 4: New York really is an epicenter of thoughtful people pastially

922
00:49:26,080 --> 00:49:29,840
Speaker 4: engaged in their careers. It's a very unique and powerful city,

923
00:49:30,120 --> 00:49:32,560
Speaker 4: both in the United States and around the world. It's

924
00:49:32,560 --> 00:49:34,799
Speaker 4: also the cultural center of the United States. It's a

925
00:49:35,600 --> 00:49:38,640
Speaker 4: whether it's Broadway or otherwise, the arts New York is.

926
00:49:38,920 --> 00:49:41,400
Speaker 2: New York has just so much to offer.

927
00:49:41,640 --> 00:49:45,440
Speaker 4: Now, having said that, Miami, I think represents the future

928
00:49:45,440 --> 00:49:49,920
Speaker 4: of America incredibly vibrant economy. You will have people on

929
00:49:49,960 --> 00:49:51,480
Speaker 4: stage day that are part of the government.

930
00:49:51,480 --> 00:49:52,400
Speaker 2: Here in Florida.

931
00:49:52,960 --> 00:49:55,400
Speaker 4: You won't be able to tell with the Republican or Democrats.

932
00:49:55,800 --> 00:49:58,000
Speaker 4: You would not be able to tell. They're focused on

933
00:49:58,080 --> 00:50:01,919
Speaker 4: civil society, they're focused on the business community, and they're

934
00:50:01,920 --> 00:50:04,400
Speaker 4: focused on good governance. This is a state that has

935
00:50:04,400 --> 00:50:07,719
Speaker 4: done an incredible job of electing people into office who

936
00:50:07,800 --> 00:50:12,040
Speaker 4: care about safe streets, good schools, and good jobs, and

937
00:50:12,080 --> 00:50:14,960
Speaker 4: it's really great to be in the state where those

938
00:50:15,440 --> 00:50:19,440
Speaker 4: are the focuses of your leaders. And I say that

939
00:50:19,480 --> 00:50:22,040
Speaker 4: as somebody that was committed to Chicago for thirty years

940
00:50:22,400 --> 00:50:26,600
Speaker 4: who saw my city devolve into anarchy under poor governance.

941
00:50:27,840 --> 00:50:30,960
Speaker 4: And I really do believe there are very important lessons

942
00:50:31,000 --> 00:50:33,960
Speaker 4: for America from the good governance that you see here

943
00:50:34,000 --> 00:50:36,960
Speaker 4: in the state of Florida, particularly at the state and

944
00:50:37,040 --> 00:50:37,760
Speaker 4: county level.

945
00:50:38,000 --> 00:50:40,759
Speaker 2: It's really it's just such a delight to be here.

946
00:50:40,960 --> 00:50:44,040
Speaker 3: Next time, we'll be debating this one for years to come.

947
00:50:44,239 --> 00:50:47,680
Speaker 4: We will, and we'll see how big Wall Street South becomes.

948
00:50:49,000 --> 00:50:52,080
Speaker 4: We're on Brickle Bay right here, and maybe in fifty

949
00:50:52,120 --> 00:50:55,600
Speaker 4: years it'll be Brickle Bay North was how we'll refer

950
00:50:55,680 --> 00:50:57,440
Speaker 4: to New York in finance.

951
00:50:58,560 --> 00:51:00,319
Speaker 3: Anyways, we have to leave it there. Thank you so

952
00:51:00,400 --> 00:51:01,800
Speaker 3: much for your time, and thank you guys all for

953
00:51:01,880 --> 00:51:02,359
Speaker 3: joining us.

954
00:51:04,560 --> 00:51:06,640
Speaker 2: All right, fascinating conversation there.

955
00:51:06,640 --> 00:51:12,719
Speaker 4: Courtesy our colleague Shanali Bask with CEO Ken Griffin from

956
00:51:12,920 --> 00:51:13,480
Speaker 4: Citadel