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Speaker 1: Bloomberg Audio Studios, podcasts, Radio News.

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Speaker 2: Kent a fantastic conference.

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Speaker 1: We talked about geopolitics, regulation, the Trump administration, Europe. So

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Speaker 1: there's nothing at all going on, and we have forty

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Speaker 1: five minutes to try.

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Speaker 2: And put the world to rights. So let's start about

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Speaker 2: the markets.

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Speaker 1: What do you think the markets are seeing and not

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Speaker 1: seeing right now?

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Speaker 3: So the markets are seeing the enthusiasm that the Trump

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Speaker 3: administration has created in the American investing public and in

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Speaker 3: corporate America.

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Speaker 4: I mean, we'll get into some policy details in a.

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Speaker 3: Few minutes, but it's important to understand that this administration

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Speaker 3: is clearly trying to encourage economic growth in the United States.

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Speaker 3: They are pursuing a set of policies to reindustrialize America,

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Speaker 3: and they are unquestionably interested in America's prosperity in a

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Speaker 3: way that we have rarely seen from an administration in

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Speaker 3: years past. Secondly, the Trump administration is very much aligned

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Speaker 3: with seeing the success of the American worker.

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Speaker 4: So a number of the policies that are being.

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Speaker 3: Effectuated really are about the average American family feeling that

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Speaker 3: life is better and working better for them. This backdrop

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Speaker 3: is fueling much of the enthusiasm that we see in

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Speaker 3: markets in the United States.

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Speaker 4: And then, of.

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Speaker 3: Course we're on a program of both fiscal and monetary

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Speaker 3: stimulus that you would expect to see in the middle

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Speaker 3: of a recession. We're seeing right here right now in

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Speaker 3: a period of near full employment several years.

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Speaker 4: Into the business cycle.

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Speaker 3: So we're definitely on a bit of a sugar high

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Speaker 3: in the US economy right now.

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Speaker 1: So broadly have markets moved away from the terriff issues.

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Speaker 3: That the teriff issue is pretty much in the rear

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Speaker 3: view mirror right now from the perspective of the market

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Speaker 3: day and out.

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Speaker 4: Now.

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Speaker 3: The issues that relate to tariffsicular high inflation are yet

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Speaker 3: to be resolved.

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Speaker 4: There's a sense of.

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Speaker 3: Almost inevitability that the inflation genie is going to go

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Speaker 3: back in the bottle. But I think that's a very

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Speaker 3: premature conclusion. If you look at both the immigration policies,

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Speaker 3: the fiscal policies, and the military policies, it's a very

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Speaker 3: pro inflationary environment, and I think the markets are just

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Speaker 3: way too calm about the prospects of a substantial move

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Speaker 3: higher in inflation.

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Speaker 1: Is the FED right to focus on the jobs labor

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Speaker 1: market instead of inflation.

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Speaker 3: So I think that is a really interesting debate. And

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Speaker 3: I remember when when Janet Yellen became the Chair of

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Speaker 3: the FED, she had a very simple framework that she

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Speaker 3: thought about. She thought about the fact that the US

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Speaker 3: had gone through one significant recession and the risk of

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Speaker 3: another recession and the ensuing job loss and human capital

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Speaker 3: atrophy that would go with a second, adjacent or nearby

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Speaker 3: recession would be incredibly.

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Speaker 4: Damaging for millions of Americans.

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Speaker 3: You lose your job twice in just a few years,

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Speaker 3: you really do become separated.

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Speaker 4: From the broader employment market.

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Speaker 3: And that was the lens through which she made a

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Speaker 3: number of decisions to be in both at the time

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Speaker 3: and in retrospect, reasonably dubbish in terms of managing industry

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Speaker 3: policy right here right now, I think that argument is

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Speaker 3: a bit hard to reach. And the FEDS trying to

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Speaker 3: make a decision between buying some downside protection on the

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Speaker 3: labor market and managing inflation, and I think they're making

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Speaker 3: a decision that puts them at risk if we do

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Speaker 3: see inflation reaccelerate early into twenty twenty six, is that.

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Speaker 1: What you're expecting or reacceleration inflation? Why has it not

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Speaker 1: played out like many many people thought that behind.

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Speaker 3: I mean, we're still well about target, right, I mean,

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Speaker 3: let's just cut to the chase. Inflation is substantially about

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Speaker 3: target and substantially above target and all.

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Speaker 4: Forecasts for next year.

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Speaker 3: I mean, it's part of the reason the dollars depreciated

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Speaker 3: by about ten percent in the first half of this year.

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Speaker 3: It's the single biggest decline in the US dollar in

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Speaker 3: six months in fifty years. Gold is at record highs,

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Speaker 3: and the appreciation in other dollar substitutes, to use that

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Speaker 3: word loosely, and items like crypto for example, is unbelievable.

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Speaker 3: So we're seeing substantial asset inflation away from the dollar

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Speaker 3: as people are looking for ways to effectively de dollarize

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Speaker 3: or de risk their portfolios visa the US sovereign risk.

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Speaker 2: Are you really seeing that?

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Speaker 4: Just check the price of goal. Well, I mean, I

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Speaker 4: don't have to look very hard.

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Speaker 2: Its own it's a life of its own. Gold.

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Speaker 4: No, but it's a life of its own.

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Speaker 3: As you see sovereigns around the world, central banks around

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Speaker 3: the world, as you see individual investors around the world go,

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Speaker 3: you know what, I now view gold as a safe

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Speaker 3: harbor asset in a way that the dollar used to

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Speaker 3: be viewed.

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Speaker 4: That's what's really concerning to me.

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Speaker 3: And there's been plenty of published research in recent weeks

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Speaker 3: months about foreign investors now when they buy US equities,

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Speaker 3: hedging the returns back to their local currency.

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Speaker 4: So that again is a bifurcation of I'm going to

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Speaker 4: bet on.

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Speaker 3: American business, but I want to immunize some of my

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Speaker 3: sovereign exposure to the United States.

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Speaker 1: Can the previous panels talking about the shutdown, given where

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Speaker 1: we are in the shutdown, can the FED properly do

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Speaker 1: its job at the end of the month in these

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Speaker 1: circumstances where we may not have enough data.

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Speaker 3: I don't think the data over a few weeks should

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Speaker 3: really be that determinative to the FED.

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Speaker 4: I mean, that's sort of over.

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Speaker 3: Overgrandizes what the impact or importance to that data is,

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Speaker 3: particularly with the sampling errors that's intrinsic in how that

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Speaker 3: data is produced and compiled for the FED. I just

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Speaker 3: think that's a bit of a misplaced warrior concern.

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Speaker 2: Do you worry about the shutdowns? Will stop?

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Speaker 4: Look?

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Speaker 3: The shutdown is symbolic of a different problem, which is

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Speaker 3: the dysfunction between the Republican and Democratic Party on resolving

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Speaker 3: issues with respect to the budget.

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Speaker 4: The United States of America.

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Speaker 3: And to be clear, both parties today are guilty of

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Speaker 3: just profligate spending.

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Speaker 4: You know, as I said at.

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Speaker 3: The start, the US fiscal situation is that of a

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Speaker 3: nation that's trying to work its way out of a recession.

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Speaker 4: Except the reality is we're multiple years into a very

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Speaker 4: high period of growth. This is where we should.

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Speaker 3: Be running a deficit of you know, in the Clinton day,

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Speaker 3: as we ran a surplus at this point in the

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Speaker 3: business cycle, We're now running a deficit of close to

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Speaker 3: six six to seven percent, depending upon where a number

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Speaker 3: of things land.

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Speaker 4: That is just completely irresponsible.

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Speaker 3: And so what's amazing is we're having a shutdown debate

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Speaker 3: over the scheme of things a relatively small amount of money,

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Speaker 3: and neither party is stepping up the plate to deal

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Speaker 3: with or grapple with the reality that the United States

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Speaker 3: needs to endure a fair amount of fiscal reform to

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Speaker 3: be in a path for long term sustainability.

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Speaker 2: Why is it not being talked about?

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Speaker 3: It's politically unpopular, and unfortunately politics have gotten shorter and

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Speaker 3: shorter and shorter in horizon. You know, can you imagine that,

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Speaker 3: Like I said in the Clinton day, as they signed

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Speaker 3: a budget with a surplus, and yet that was in

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Speaker 3: our lifetime. It's been a long time since we've seen

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Speaker 3: that level of discipline in Washington around managing the affairs

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Speaker 3: of the US economy.

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Speaker 1: You worry a lot about debt, or you worry about debt,

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Speaker 1: what's the way I want?

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Speaker 3: I mean, you must also, like we all have to

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Speaker 3: worry about the level of debt we have in the

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Speaker 3: United States, and the market is pretty cool about it.

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Speaker 4: The market is we'll look past it for a few years.

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Speaker 3: But if you go out with anybody to talk about

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Speaker 3: what they worry about with respect to the US economy,

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Speaker 3: the fiscal situation is almost always top of list. So

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Speaker 3: you know, I think there's one thing to keep in mind,

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Speaker 3: which is acid prices reflect a level of exuberance that

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Speaker 3: we see today.

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Speaker 4: But I got to tell you, if you're out with

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Speaker 4: anybody who's.

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Speaker 3: The asset manager business top of this concerns, the level

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Speaker 3: of spending in Washington is always top three, if.

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Speaker 4: Not number one, on the list.

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Speaker 2: What's the way out?

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Speaker 3: Well, the way out is we need I mean, first

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Speaker 3: and foremost, growth is an important part of the way out,

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Speaker 3: and this is where the Trump's administration focus on deregulation

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Speaker 3: is so important. It's so important in terms of creating

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Speaker 3: an environment in which growth can exist, like really important

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Speaker 3: unleash unleashed the animal spirits in America. And the one

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Speaker 3: thing about this country different than most countries is the

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Speaker 3: entraal class in this country is incredibly ambitious and it

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Speaker 3: is really able to make profound changes happen. I mean,

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Speaker 3: if you look at if you look across our investment portfolios,

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Speaker 3: a substantial portion of all the money we invest is

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Speaker 3: in business has started in the last fifty years. I mean,

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Speaker 3: it's remarkable the wealth created in this country by newly

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Speaker 3: forgmned businesses.

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Speaker 4: It's just stunny. It's the envy of the world.

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Speaker 3: And the Trump administration is certainly taking steps to help

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Speaker 3: encourage that canntinued American success story. But we also need

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Speaker 3: to give real consideration to tax policy and to spending policies.

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Speaker 3: And I think that the the how are they rebranding,

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Speaker 3: rebranding the big beautiful Bill at this point, do you

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Speaker 3: have the rebranding is.

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Speaker 4: Going to be yet?

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Speaker 2: How would you rebrand it?

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Speaker 4: Well?

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Speaker 3: I mean, I don't think there's a nice way to

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Speaker 3: put lipstick on that pig. I mean it's a pro

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Speaker 3: cyclical tax cut late in the economic cycle. And you know,

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Speaker 3: everybody in this room, like, let's be clear, no one

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Speaker 3: wants to pay more in taxes. But if you're not

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Speaker 3: on a sustainable set of tax policies in the best

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Speaker 3: of times, what policies will that.

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Speaker 4: Unleash in the worst of times?

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Speaker 3: You know, for example, the United States head towards a

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Speaker 3: wealth tax when the inevitable bills come due, will be

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Speaker 3: head towards tax rates that we last saw in Europe

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Speaker 3: sixty seventy eighty percent as the inevitable bills come do

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Speaker 3: what is the long term consequence of these policies right here,

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Speaker 3: right now? And I think people are very concerned about

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Speaker 3: what that might be in ten or fifteen or twenty years.

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Speaker 4: How to inheritance taxes have to.

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Speaker 3: Change in light of the tremendous amount of wealth held

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Speaker 3: by the baby boomers and the tremendous amount of debt

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Speaker 3: that their generation.

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Speaker 4: Was a part of.

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Speaker 3: So I think these are going to be really interesting

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Speaker 3: policy debates that will merge seven years, ten years, fifteen

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Speaker 3: years down the road, which could have some pretty adverse consequences.

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Speaker 3: I mean, particularly for American non for realism today is

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Speaker 3: not sure. You're like, if I build a great business,

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Speaker 3: I will get to keep a substantial amount of wealth

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Speaker 3: I create. If you go back to a world of

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Speaker 3: seventy percent tax rates that we had in this country

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Speaker 3: in this last century, maybe throwing a wealth tax for

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Speaker 3: good measure you may really impact that zeitgeist that is

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Speaker 3: so powerful in terms of our economic prosperity.

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Speaker 1: Do you see the animal spirits in the US because

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Speaker 1: a lot of chief executives say, look, they like some

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Speaker 1: of the policies, but there are also a lot of

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Speaker 1: policies it could be visas or others, and because they're

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Speaker 1: uncertain where the next one comes from, they're a little

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Speaker 1: bit reluctant to spend.

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Speaker 3: Right now, Well, I mean, let's be clear that the

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Speaker 3: Trump administration has been able to give us a lot

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Speaker 3: that we love and a lot that we hate. Right,

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Speaker 3: They're an equal opportunity giver. And on the pro side

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Speaker 3: is clearly the push for deregulation is clearly a message

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Speaker 3: to American whether it's small business owners or entrepreneurs, that

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Speaker 3: this country wants to see our commercial class succeed. That's

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Speaker 3: a foreign language to the Biden administration. I mean, they

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Speaker 3: had no connectivity with American business. The Trump administration is

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Speaker 3: very connected in a very different and profound way. But

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Speaker 3: having said that, the terror policy has had incredibly uneven

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Speaker 3: impacts across the commercial landscape. I mean, I really do

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Speaker 3: feel sorry for the small and medium sized businesses that

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Speaker 3: that are single source in terms of their goods from

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Speaker 3: from Asia who are now seeing tariffs that are at

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Speaker 3: levels that are unimaginable in the context of their business model.

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Speaker 3: They're really going to be in a world of hurt

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Speaker 3: over the months ahead, and they're not going to have

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Speaker 3: the flexibility that you know, a large conglomerate will have

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Speaker 3: and being able to re architects, supply chains and navigate around.

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Speaker 4: These these issues.

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Speaker 3: So that that's an area that's that's quite painful to watch.

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Speaker 4: The impact on farmers.

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Speaker 3: I mean that the Chinese have voted very clearly to

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Speaker 3: buy their food products from other countries and it's really

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Speaker 3: hitting the American farming community quite hard. That's that's painful

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Speaker 3: to watch play out. The immigration policies, I must say

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Speaker 3: I scratched my head over we we as a nation

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Speaker 3: are facing a birth rate that's that's below that required

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Speaker 3: to make contain our population. So unless the United States

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Speaker 3: actually wants to shrink in size over the next fifty years.

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Speaker 3: We're going to have to permit immigration, and I would

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Speaker 3: think that our policies would be around trying to encourage

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Speaker 3: the best and brightest around the world coming to the

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Speaker 3: United States and building careers and building families and building

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Speaker 3: roots in our country. You know, I've long said every

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Speaker 3: single student in the United States with a STEM degree

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Speaker 3: should get a green card, staple that diploma and a

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Speaker 3: path to citizenship. You know, roughly fifty percent of all

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Speaker 3: the Silicon Valley startups are started by immigrants.

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Speaker 4: I mean, it's just remarkable.

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Speaker 3: How this country has won in the global war for talent,

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Speaker 3: and we should continue to pursue that aggressively. And then

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Speaker 3: on the millions of people who came across the borders

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Speaker 3: in the last several years, you know, I applaud the

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Speaker 3: President for controlling our borders. It was really important to

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Speaker 3: stop that flow of illegal immigrants. And unfortunately, as you

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Speaker 3: and I both know, a number of countries in South

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Speaker 3: and Central America didn't send us their best and brightest.

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Speaker 3: They did empty their prisons and send people to the

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Speaker 3: United States that.

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Speaker 4: We really should not have welcomed. Warmly.

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Speaker 3: So I applaud the President for shutting the borders, but

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Speaker 3: those who've come to this country, who have placed roots here,

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Speaker 3: who are working and contributing to our economy, we should

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Speaker 3: find a path for them to be able to stay

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Speaker 3: here and continue to contribute. They're important in agriculture, they're

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Speaker 3: important in construction, They're important in.

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Speaker 4: The leisure industries. They do a lot of jobs that will.

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Speaker 3: Be damn near impossible for us to fill with American

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Speaker 3: American born labors.

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Speaker 4: That's just gonna be really tough.

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Speaker 3: And what gets lost in some of the debate is

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Speaker 3: they're not taking jobs from Americans by and large, they're

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Speaker 3: actually playing critical roles that help American businesses thrive and succeed,

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Speaker 3: that allow us to employ more people at higher wages

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Speaker 3: across the broader economy. So I think when it comes

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Speaker 3: to immigration were at large, I think we've come off

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Speaker 3: the rails and we really do need to rethink our policies.

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Speaker 4: First and foremost President is right to close the borders.

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Speaker 3: But if you're at home depot in the morning looking

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Speaker 3: for a job, that's not where I should be trying

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Speaker 3: to find the person to deport.

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Speaker 1: On attracting the best and Righteous Citadel has been doing that.

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Speaker 2: Do you worry about your hiring.

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Speaker 1: In the future because of the visa policy?

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Speaker 4: I mean, you know, fortunately, we're.

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Speaker 3: In a sector of the economy where the we're one

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Speaker 3: hundred thousand dollars one time cost to hire persons not

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Speaker 3: going to be.

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Speaker 4: Make it or break it. I worry far more.

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Speaker 3: About the brilliant student in India who doesn't come to America,

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Speaker 3: or the gifted student in mathematics and physics who.

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Speaker 4: Chooses to stay in China.

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Speaker 3: I mean I was in China shortly after Deep Sek

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Speaker 3: was announced. Let me tell you what the Chinese were

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Speaker 3: profoundly proud of. Not one author on Deep Seek was

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Speaker 3: educated in America. It was a point of national pride

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Speaker 3: in every meeting I went to, was the profound pride

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Speaker 3: that not one person who authored Deep Seek was educated

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Speaker 3: in America.

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Speaker 1: That has a lot of consequences, has dire consequences longer term.

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Speaker 1: What are you expecting from the Trumpe meeting that we

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Speaker 1: may get before.

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Speaker 2: The end of the year.

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Speaker 4: I mean, what I would love to see is Dayton.

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Speaker 3: I would like to see the relationship reach a point

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Speaker 3: of stability. Right now, it's two great superpowers that are

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Speaker 3: trying to find a new equlibrium, And so long as

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Speaker 3: we are both competing from a position of self interest

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Speaker 3: in a world of seven billion people in a rapidly

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Speaker 3: changing environment, you're gonna have points of friction. And would

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Speaker 3: be wonderful to see that that come later this year,

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Speaker 3: that President she and President Trump are able to find

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Speaker 3: in some sense a more constructive set of rules of

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Speaker 3: engagement that both countries in our position to both prosper

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Speaker 3: and to meet the needs of their citizens and have

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Speaker 3: less tension between our two superpowers day in and day out.

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Speaker 2: Do you worry about the world fragmenting?

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Speaker 4: I know the world. The world has fragmented.

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Speaker 2: We're put to a point of no return.

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Speaker 3: So the question is is what is the long term

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Speaker 3: ability for the United States to play a pivotal and

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Speaker 3: influential role in the development of Africa, South America and

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Speaker 3: most of Asia Asia ex the most developed countries. And

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Speaker 3: I go to Africa several times a year. Chinese is

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Speaker 3: generally speaking in that in that continent provide the power plants,

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Speaker 3: they build the airports, they provide the cellar networks. So

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Speaker 3: when you turn on your phone, turn on the lights

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Speaker 3: and go anywhere by plane, and it's all provided for

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Speaker 3: by the Chinese.

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Speaker 4: You tell me whose orbit that country is in.

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Speaker 3: The United States used to control those orbits pretty carefully.

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Speaker 3: You know, General Electric was an incredible source not just

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Speaker 3: of industrial might, but of policy might, because it used

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Speaker 3: to be companies like General Electric that really projected American

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Speaker 3: power around the world. And I would really like to

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Speaker 3: see the United States be in a position to reassert

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Speaker 3: that form of interconnectedness, not just through foreign policy, but

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Speaker 3: through industrial connectivity. And unfortunately, as you know, the history

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Speaker 3: of tariffs is that companies tend to retreat back to

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Speaker 3: their domestic market.

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Speaker 4: We're to be perfectly blunt.

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Speaker 3: They can provide an inferior product at a higher price

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Speaker 3: point to a disillusion can and they ultimately become.

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Speaker 4: Uncompetitive on the world stage.

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Speaker 3: So ironically, the administration is pushed towards higher tariffs. If

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Speaker 3: we just look at the history where this has been

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Speaker 3: done around the world, it's usually a story of retrenchment

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Speaker 3: or retracement from your global position to a more local position.

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Speaker 3: That's the wrong direction of travel for the United States

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Speaker 3: of America.

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Speaker 1: Do you tell this to the current administration? How do

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Speaker 1: you navigate that relationship.

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Speaker 3: I have a team of people who are in constant

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Speaker 3: dialogue with members of the Administration, the House, and the Senate,

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Speaker 3: and we've been pretty vocal on this over the course

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Speaker 3: of the last several months. I mean, you know, from

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Speaker 3: my perspective, the right economic policies, the right policies on immigration,

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Speaker 3: the right policies and education, the right policies on culture

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Speaker 3: can have a profoundly positive impact on the United States

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Speaker 3: for decades to come. And with one part control, which

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Speaker 3: is relatively rare in American history, you do have a

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Speaker 3: two year window here to effectuate those changes and to

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Speaker 3: really to help the president realize his dream of making

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Speaker 3: America great again.

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Speaker 4: I mean, I do believe that.

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Speaker 3: His actions and choices come from a from a from

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Speaker 3: a good place, but I do wish that that he

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Speaker 3: had better advisors that were better grounded in economic theory,

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Speaker 3: in particular to lead this country to a more prosperous future.

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Speaker 1: There's been a lot of talk about FED independence. Does

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Speaker 1: that do I mean, how should we view that?

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Speaker 2: Is it noise or is there real danger that?

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Speaker 3: Look, I think it's a it's a it's a it's

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Speaker 3: a very different Let me just give you this succinct answer.

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Speaker 4: Why does FED independence matter?

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Speaker 3: Because from time to time, the FED has to make

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Speaker 3: choices that are really politically unpopular. That's why you want

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Speaker 3: FED independence. You want the FED to be independent so

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Speaker 3: that when you have to raise rates to break the

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Speaker 3: back of inflation, it's going to happen. And if the

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Speaker 3: FED is viewed as being politically captive, which politician do

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Speaker 3: you think on either side of the aisle is going

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Speaker 3: to argue to raise rates and to slow the economy

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Speaker 3: down and cause millions of people to lose their jobs.

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Speaker 4: Can you name a politician who do that.

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Speaker 2: Political suicide?

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Speaker 4: Right?

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Speaker 3: And if you're unwilling to break the back of inflation,

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Speaker 3: you run the risk of runaway inflation, and in particular

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Speaker 3: in a profound way. In a profound way, you hurt

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Speaker 3: those Americans who are most vulnerable, and particularly the retirees

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Speaker 3: and near retirees who no longer have the flexibility in

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Speaker 3: either their career or their investment portfolios to withstand the

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Speaker 3: damage that inflation yields. So I think this is a

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Speaker 3: huge strategic mistake by the administration because of inflation does

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Speaker 3: rear it's ugly head. They want somebody to be angry

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Speaker 3: with like the armrest of the American people are gonna

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Speaker 3: be angry with and who is ever Paul's successor will

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Speaker 3: bear the brunt, just as as you know Vulgar did

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Speaker 3: years ago in making that really tough call to raise

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Speaker 3: rates in a way that's painful to the American families

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Speaker 3: in the short run, but necessary to protect the interests

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Speaker 3: of our country holistically.

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Speaker 1: But the market has largely looked through that, right, So

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Speaker 1: maybe they're waiting on the Supreme Court to see what happens.

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Speaker 3: With these I think you can't you can't underestimate just

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Speaker 3: you know, we are we are deep in a bull market,

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Speaker 3: and there is a lot of fomo. There's a lot

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Speaker 3: of fomo, And I just think to sort of chalk

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Speaker 3: everything up to the market looks passed. The market looks past,

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Speaker 3: the market looks past. Crash of eighty seven.

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Speaker 4: And I'm not saying this is going to happen tomorrow.

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Speaker 3: You know, the big news story on the on the

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Speaker 3: day of the crash of eighty seven was Nancy Reagan

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Speaker 3: had just been diagnosed with breast cancer and there was

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Speaker 3: an attack by some inconsequential Iranian.

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Speaker 4: Or Iraqi boat on a US vessel.

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Speaker 3: I mean like inconsequential, and the market lost almost a

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Speaker 3: quarter of its value in a day. In a day like,

439
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Speaker 3: the market lost almost a quarter of its value.

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Speaker 4: So I sort of think just.

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Speaker 3: To sort of say like the market looks past all

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Speaker 3: this misses the fact that when the market chooses to

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Speaker 3: change its mind, the correction can be extraordinarily quick and

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Speaker 3: extraordinarily painful.

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Speaker 2: Does it need a catalyst to change direction?

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Speaker 4: I mean, in eighty seven we didn't have a catalyst.

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Speaker 3: Now in eight, clearly you had the continued to erose

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Speaker 3: the capital base the banking system due to the housing

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Speaker 3: market turmoil. But even the massive financial losses in eight

450
00:24:58,400 --> 00:25:02,439
Speaker 3: in the scheme of life, had very little forewarning. So

451
00:25:02,520 --> 00:25:04,320
Speaker 3: I just I think it's very important that that when

452
00:25:04,359 --> 00:25:06,240
Speaker 3: you're in the money manager business, you put your risk

453
00:25:06,280 --> 00:25:10,320
Speaker 3: management hat on. You keep in mind that no matter

454
00:25:10,440 --> 00:25:13,879
Speaker 3: how exuberant the market may be at any moment in time,

455
00:25:15,320 --> 00:25:18,680
Speaker 3: when you're late in that cycle, that cycle can shift

456
00:25:19,480 --> 00:25:20,440
Speaker 3: in the blink of an eye.

457
00:25:21,000 --> 00:25:24,360
Speaker 1: But for the moment, it's AI valuations right that are

458
00:25:24,359 --> 00:25:25,280
Speaker 1: propping everything up.

459
00:25:25,480 --> 00:25:30,480
Speaker 3: AI is clearly having a moment in the sun today,

460
00:25:30,600 --> 00:25:33,680
Speaker 3: and the AI community is going to have to demonstrate

461
00:25:34,160 --> 00:25:38,159
Speaker 3: its ability to deliver literally trillions of dollars of value.

462
00:25:39,160 --> 00:25:46,520
Speaker 3: And you know, I I as an American, hope that

463
00:25:46,520 --> 00:25:47,479
Speaker 3: that comes to pass.

464
00:25:48,640 --> 00:25:50,040
Speaker 4: But there are.

465
00:25:49,960 --> 00:25:52,920
Speaker 3: Reasons that we should all be just just a bit

466
00:25:53,040 --> 00:25:56,000
Speaker 3: concerned about the speed with which this change will happen.

467
00:25:56,240 --> 00:25:58,560
Speaker 4: I mean, it's a simple here's a simple frameworker.

468
00:26:00,040 --> 00:26:05,040
Speaker 3: When they invented the personal computer, Okay, did we think

469
00:26:05,040 --> 00:26:06,960
Speaker 3: the world was going to change in a profound way.

470
00:26:07,920 --> 00:26:11,920
Speaker 3: Of course we did, but it's taken fifty.

471
00:26:11,680 --> 00:26:15,320
Speaker 4: Years to play out. We're still very much in the

472
00:26:15,400 --> 00:26:18,359
Speaker 4: middle of the journey AI today.

473
00:26:19,280 --> 00:26:22,240
Speaker 3: Large language models particular, have been in existence for a

474
00:26:22,280 --> 00:26:22,919
Speaker 3: few years.

475
00:26:23,720 --> 00:26:26,359
Speaker 4: I think there's a real chance that when we think

476
00:26:26,440 --> 00:26:27,639
Speaker 4: about the.

477
00:26:28,480 --> 00:26:33,520
Speaker 3: Forms of AI that are alluded to by many of

478
00:26:33,560 --> 00:26:37,159
Speaker 3: the markets leaders today, that their dream for the future

479
00:26:37,240 --> 00:26:39,480
Speaker 3: may not take three to five years to play out.

480
00:26:40,560 --> 00:26:42,760
Speaker 4: It could be twenty years, it could be thirty years.

481
00:26:43,800 --> 00:26:46,440
Speaker 3: You know, It's like the Internet and I people hate

482
00:26:46,480 --> 00:26:47,920
Speaker 3: this analogy, but like the dot.

483
00:26:47,800 --> 00:26:48,760
Speaker 4: Com moment.

484
00:26:49,960 --> 00:26:53,359
Speaker 3: Back at the start of this century, did anyone have

485
00:26:53,440 --> 00:26:56,000
Speaker 3: any doubt that the Internet was going to change the world.

486
00:26:56,600 --> 00:26:56,679
Speaker 2: No.

487
00:26:57,280 --> 00:27:01,240
Speaker 4: Has the Internet changed the world, absolutely, but it takes

488
00:27:01,400 --> 00:27:04,320
Speaker 4: longer than anticipated. And was there a.

489
00:27:04,400 --> 00:27:07,560
Speaker 3: Period in which which there was a real sort of

490
00:27:07,720 --> 00:27:11,520
Speaker 3: sorting of the winners and losers that took place on equivocally,

491
00:27:12,240 --> 00:27:15,280
Speaker 3: on equivocally, And I think that the AI story will

492
00:27:15,320 --> 00:27:20,879
Speaker 3: have many the same components. There really will ups and downs,

493
00:27:20,960 --> 00:27:23,720
Speaker 3: ups and downs. I mean, I'm going to age myself.

494
00:27:23,760 --> 00:27:30,359
Speaker 3: But like Lotus one two three, all right, wow, I

495
00:27:30,400 --> 00:27:33,680
Speaker 3: mean unbelievable blue VisiC health out of the water.

496
00:27:34,880 --> 00:27:36,960
Speaker 4: That's really aging oneself, isn't that?

497
00:27:37,800 --> 00:27:40,760
Speaker 3: And then Excelf came out of the scene and Lotus

498
00:27:40,760 --> 00:27:45,960
Speaker 3: one two three literally disappeared into the duskin of history, right,

499
00:27:46,000 --> 00:27:49,920
Speaker 3: And that all happened in just a few years. You know,

500
00:27:50,000 --> 00:27:52,119
Speaker 3: I remember I used to buy on a website called

501
00:27:52,119 --> 00:27:56,680
Speaker 3: buy dot com, but became like I bet that you're

502
00:27:56,760 --> 00:27:59,919
Speaker 3: I wonder if they even links to anything today.

503
00:28:00,560 --> 00:28:02,399
Speaker 4: But how many you know, there was e Toys and

504
00:28:02,600 --> 00:28:03,320
Speaker 4: Pets dot com.

505
00:28:03,359 --> 00:28:06,280
Speaker 3: There were hundreds and hundreds of consumer sites to buy

506
00:28:06,280 --> 00:28:09,639
Speaker 3: goods and services from Amazon and Walmart have locked that

507
00:28:09,720 --> 00:28:13,080
Speaker 3: market up today. We're going to see a lot of

508
00:28:13,119 --> 00:28:15,040
Speaker 3: fallout in the I story over the next couple of

509
00:28:15,119 --> 00:28:19,240
Speaker 3: years and long run, are we going to continue to

510
00:28:19,240 --> 00:28:22,640
Speaker 3: see incredible advances in the use of computers and technology

511
00:28:23,280 --> 00:28:25,119
Speaker 3: to improve productivity.

512
00:28:25,160 --> 00:28:28,280
Speaker 4: Absolutely, that's going to happen, unquestionably.

513
00:28:29,320 --> 00:28:32,159
Speaker 1: Ken, talk to me about the tokenization push. What are

514
00:28:32,160 --> 00:28:33,080
Speaker 1: the risks around that?

515
00:28:37,440 --> 00:28:41,480
Speaker 3: You just had the regulatory panel right, what was what

516
00:28:41,520 --> 00:28:43,280
Speaker 3: did they say? I mean, I'm going to tell you

517
00:28:43,280 --> 00:28:51,840
Speaker 3: what I say. What a great opportunity for shysters. I mean,

518
00:28:52,600 --> 00:28:56,840
Speaker 3: let's just go ahead and unleash the worst of the

519
00:28:56,880 --> 00:29:00,560
Speaker 3: animal spirits. Let's find a new way for retail America

520
00:29:00,600 --> 00:29:02,040
Speaker 3: to just get absolutely hosed.

521
00:29:04,280 --> 00:29:05,680
Speaker 4: So cushion, cushion.

522
00:29:06,560 --> 00:29:08,680
Speaker 3: That will be a credible moment on Bloomberg, I'm sure.

523
00:29:09,920 --> 00:29:14,160
Speaker 3: And the big picture is the US securities market.

524
00:29:14,360 --> 00:29:15,520
Speaker 2: Is just.

525
00:29:17,800 --> 00:29:19,760
Speaker 4: Is extraordinarily efficient.

526
00:29:20,920 --> 00:29:22,960
Speaker 3: You know, if you're a retail investor, you generally trade

527
00:29:23,000 --> 00:29:25,120
Speaker 3: today for less than a fraction of a sent and

528
00:29:25,160 --> 00:29:28,960
Speaker 3: a bit spread and you pay no commission. You know,

529
00:29:29,280 --> 00:29:32,000
Speaker 3: I love the members of the tokenization Communee. Oh, it's

530
00:29:32,080 --> 00:29:35,600
Speaker 3: so expensive to trade today. I don't even know what

531
00:29:35,600 --> 00:29:39,400
Speaker 3: my annual DTCC fees are there so low, like it,

532
00:29:39,800 --> 00:29:43,520
Speaker 3: it's trading the United States in most asea classes has

533
00:29:43,560 --> 00:29:48,480
Speaker 3: approached costless. So you can't tell me that tokenization is

534
00:29:48,520 --> 00:29:52,200
Speaker 3: about reducing the cost or trading. What it's really about

535
00:29:52,920 --> 00:29:55,040
Speaker 3: is a mechanism by which I think a lot of

536
00:29:55,040 --> 00:29:58,120
Speaker 3: investors are going to be lured into frankly pretty poor investments,

537
00:29:58,680 --> 00:29:59,720
Speaker 3: and I worry about that.

538
00:29:59,760 --> 00:30:01,959
Speaker 4: It's it's like an end of cycle phenomena.

539
00:30:02,560 --> 00:30:08,960
Speaker 3: Let's go ahead now and and in some sense, let.

540
00:30:08,920 --> 00:30:11,200
Speaker 4: The boiler rooms re emerge.

541
00:30:11,480 --> 00:30:13,560
Speaker 3: And you know what's really amazing about the United States,

542
00:30:13,880 --> 00:30:16,880
Speaker 3: The boilerrooms pretty much disappeared over the last fifteen years.

543
00:30:18,880 --> 00:30:21,200
Speaker 3: I mean, we have we as a country have done

544
00:30:21,440 --> 00:30:26,480
Speaker 3: have done a profoundly extraordinary job of you know, great,

545
00:30:26,920 --> 00:30:28,800
Speaker 3: great transparency in our companies.

546
00:30:29,080 --> 00:30:31,920
Speaker 4: There's been very little corporate fraud in the United.

547
00:30:31,600 --> 00:30:36,240
Speaker 3: States, and people people generally have made money investing in

548
00:30:36,320 --> 00:30:39,320
Speaker 3: businesses that have turned around and created tremendous amounts.

549
00:30:39,000 --> 00:30:41,480
Speaker 4: Of value for the economy.

550
00:30:41,840 --> 00:30:44,360
Speaker 3: I mean, the amount of Apple owned by retail investors

551
00:30:44,480 --> 00:30:50,480
Speaker 3: is stunning, and the amount of both not just corporate

552
00:30:50,520 --> 00:30:56,600
Speaker 3: profit but consumer value created by Apple or Amazon or

553
00:30:56,760 --> 00:30:59,240
Speaker 3: Microsoft is stunning.

554
00:31:00,120 --> 00:31:02,200
Speaker 4: Like that is when a capitalist.

555
00:31:01,760 --> 00:31:06,440
Speaker 3: System is working for its citizens and tokenization is not

556
00:31:06,520 --> 00:31:07,400
Speaker 3: part of that story.

557
00:31:08,760 --> 00:31:11,320
Speaker 1: How do you see citadel securities growing? Is there anything

558
00:31:11,400 --> 00:31:13,760
Speaker 1: where you're not present for what you want to be present?

559
00:31:14,200 --> 00:31:19,520
Speaker 3: There's there's tremendous amounts of white space that civil securities

560
00:31:20,040 --> 00:31:23,680
Speaker 3: can and will grow into. Everything from the treading of

561
00:31:23,760 --> 00:31:28,360
Speaker 3: mortgage backed securities of the United States to government bonds

562
00:31:28,360 --> 00:31:31,080
Speaker 3: in Asia. There's a there's a tremendous amount of white

563
00:31:31,080 --> 00:31:34,760
Speaker 3: space for civil securities to grow into. And I'm really

564
00:31:34,800 --> 00:31:38,760
Speaker 3: thrilled that Jim Esposito joined the firm, you know, roughly

565
00:31:38,920 --> 00:31:43,440
Speaker 3: a year ago. He's had a tremendous impact on expanding

566
00:31:43,520 --> 00:31:47,760
Speaker 3: our connectivity with clients around the world, and it really

567
00:31:47,880 --> 00:31:51,400
Speaker 3: honing civil securities leadership on what are the key in

568
00:31:51,480 --> 00:31:55,720
Speaker 3: saliling problems that we need to solve to better further

569
00:31:55,800 --> 00:31:59,600
Speaker 3: the interests of our clients. Because businesses that stay focused,

570
00:31:59,640 --> 00:32:03,360
Speaker 3: that are client centric at the core, our businesses that

571
00:32:03,600 --> 00:32:06,280
Speaker 3: solve real, tangible problems, and people will pay you to

572
00:32:06,320 --> 00:32:09,280
Speaker 3: help solve their problems. And Jim's just done a great

573
00:32:09,360 --> 00:32:12,080
Speaker 3: job in instilling that ethos.

574
00:32:11,600 --> 00:32:13,960
Speaker 4: And culture within the four walls of cityl Securities.

575
00:32:14,520 --> 00:32:18,080
Speaker 1: A lot of the prediction market platforms are growing like crazy.

576
00:32:18,240 --> 00:32:19,800
Speaker 2: Is that an opportunity for Citadel.

577
00:32:21,640 --> 00:32:23,680
Speaker 3: It's an area that we will we will of course

578
00:32:23,880 --> 00:32:27,680
Speaker 3: look at and stay very much on top of as

579
00:32:27,720 --> 00:32:31,440
Speaker 3: it continues to grow and I think it's reasonable to

580
00:32:31,480 --> 00:32:36,760
Speaker 3: say that if that market continues to grow, and given

581
00:32:36,880 --> 00:32:41,760
Speaker 3: our focus on retail vests across those securities, we will

582
00:32:41,760 --> 00:32:44,680
Speaker 3: step into provide liquiding in that space if it continues

583
00:32:44,720 --> 00:32:46,000
Speaker 3: to have the success it's had.

584
00:32:46,880 --> 00:32:49,120
Speaker 1: I know the past, you've talked about possibly, you know,

585
00:32:49,120 --> 00:32:51,160
Speaker 1: bringing in public. Is that still the case?

586
00:32:52,400 --> 00:32:56,880
Speaker 3: You know, I'm I'm very fortunate that I don't have

587
00:32:56,960 --> 00:32:59,000
Speaker 3: to make that decision day to day out. That comes

588
00:32:59,040 --> 00:33:03,160
Speaker 3: down to Punk Chow CEO and his leadership team, and

589
00:33:03,240 --> 00:33:06,360
Speaker 3: that ball is really in his court he will.

590
00:33:06,160 --> 00:33:07,959
Speaker 4: Have to decide and deal with.

591
00:33:08,000 --> 00:33:09,320
Speaker 3: And this is one of the things that the President

592
00:33:09,360 --> 00:33:12,640
Speaker 3: is focused with the burns of being the CEO of

593
00:33:12,640 --> 00:33:16,120
Speaker 3: a public company. And I know the President has talked

594
00:33:16,120 --> 00:33:19,320
Speaker 3: about moving reporting to a semi annual cycle.

595
00:33:19,760 --> 00:33:21,480
Speaker 4: I actually don't think that's the problem.

596
00:33:22,400 --> 00:33:25,280
Speaker 3: You know, every company the United States produces financials monthly,

597
00:33:25,320 --> 00:33:28,680
Speaker 3: if not more frequently today. The quarterly reporting per ses

598
00:33:28,800 --> 00:33:32,920
Speaker 3: is not a burden to being public. But what you

599
00:33:32,960 --> 00:33:34,760
Speaker 3: want to think about as a public company is, you know,

600
00:33:34,840 --> 00:33:38,320
Speaker 3: the constant harassment from the class action lawyers, the constant

601
00:33:38,360 --> 00:33:40,840
Speaker 3: harassment from those who are trying to agitate on your

602
00:33:40,880 --> 00:33:45,520
Speaker 3: proxy statement, you know, solving those issues would be much

603
00:33:45,560 --> 00:33:49,160
Speaker 3: more helpful encouraging companies to go public than trying to

604
00:33:49,200 --> 00:33:53,040
Speaker 3: reduce the very transparency that has made the United States

605
00:33:53,080 --> 00:33:56,280
Speaker 3: such a incredible destination for capital from around the world.

606
00:33:56,720 --> 00:34:00,680
Speaker 1: But private markets are growing by the minute.

607
00:34:01,800 --> 00:34:02,480
Speaker 4: They are growing.

608
00:34:02,560 --> 00:34:06,560
Speaker 3: And just to be clear, you know, we have a

609
00:34:06,640 --> 00:34:10,520
Speaker 3: small number of outside shareholders and sal securities, and they

610
00:34:10,719 --> 00:34:15,240
Speaker 3: have quarterly financials and I bet they even get monthly numbers.

611
00:34:15,280 --> 00:34:19,680
Speaker 3: Two all right, So the short termism is not driven

612
00:34:19,719 --> 00:34:24,359
Speaker 3: by the frequency of your financial reporting. It's driven by

613
00:34:24,480 --> 00:34:28,120
Speaker 3: the vision and leadership of your management team or lack thereof.

614
00:34:28,800 --> 00:34:31,880
Speaker 3: And I've seen stories in the United States of incredible

615
00:34:31,880 --> 00:34:35,240
Speaker 3: wealth created by CEOs who have had longer term visions.

616
00:34:35,280 --> 00:34:37,560
Speaker 4: I'll give you a name of one, Jeff Bezos.

617
00:34:40,120 --> 00:34:43,200
Speaker 3: And there's countless stories like the Amazon story.

618
00:34:43,719 --> 00:34:46,000
Speaker 4: It's a bit of a.

619
00:34:47,600 --> 00:34:50,160
Speaker 3: It's just not true that the nature of our quarterly

620
00:34:50,200 --> 00:34:52,880
Speaker 3: reporting is driving the lack of companies being public.

621
00:34:54,840 --> 00:34:57,520
Speaker 1: Do you see I see more the M and A

622
00:34:57,600 --> 00:35:00,880
Speaker 1: spirits are buying. Do you see more more companies wanting

623
00:35:00,920 --> 00:35:02,239
Speaker 1: to IPO or not so much?

624
00:35:02,600 --> 00:35:05,040
Speaker 4: Well, we're you know, we've seen some increased the level.

625
00:35:04,880 --> 00:35:06,920
Speaker 3: Of Emina activity, but frankly, I think far less than

626
00:35:06,920 --> 00:35:09,480
Speaker 3: people had expected. I think that has to do with

627
00:35:09,560 --> 00:35:12,520
Speaker 3: the policy uncertainty in areas light tariffs.

628
00:35:13,239 --> 00:35:14,880
Speaker 4: You know, when you're trying I mean I was.

629
00:35:14,920 --> 00:35:17,920
Speaker 3: I was with a very large group of US business executives.

630
00:35:17,920 --> 00:35:20,640
Speaker 4: We had a two day meeting a few months ago.

631
00:35:21,880 --> 00:35:26,960
Speaker 3: The amount of energy that was dedicated to navigating tariffs

632
00:35:28,239 --> 00:35:32,040
Speaker 3: even blew my mind. And when you talk about me,

633
00:35:32,200 --> 00:35:35,160
Speaker 3: you know, these executives have talked about war rooms and

634
00:35:35,640 --> 00:35:38,279
Speaker 3: how their entire leadership teams were working six seven days

635
00:35:38,320 --> 00:35:40,960
Speaker 3: a week. There's no time for an M and A

636
00:35:41,120 --> 00:35:45,879
Speaker 3: strategy when you're when you're trying to profoundly change your

637
00:35:45,880 --> 00:35:51,920
Speaker 3: supply chain and your long term strategy against a very

638
00:35:52,000 --> 00:35:56,400
Speaker 3: quickly changing care background backdrop. So I think for for

639
00:35:56,880 --> 00:35:59,160
Speaker 3: M and A to really reaccelerate, you're going to have

640
00:35:59,280 --> 00:36:04,880
Speaker 3: to see what is perceived as a level of stability

641
00:36:05,640 --> 00:36:06,880
Speaker 3: in our policy.

642
00:36:06,480 --> 00:36:08,839
Speaker 4: Making in Washington, and even the.

643
00:36:08,800 --> 00:36:13,600
Speaker 3: IPO calendar has some of the same challenges at play.

644
00:36:14,320 --> 00:36:14,840
Speaker 4: Washington.

645
00:36:16,840 --> 00:36:19,759
Speaker 3: Even a policy change that will be ultimately good for

646
00:36:19,800 --> 00:36:22,719
Speaker 3: the American business comm in the long run, because in

647
00:36:22,800 --> 00:36:26,880
Speaker 3: the short run it will create winners and losers comes

648
00:36:26,960 --> 00:36:30,760
Speaker 3: with a real cost in economic growth in the short run,

649
00:36:31,440 --> 00:36:35,520
Speaker 3: even if it's good for the long run. And I

650
00:36:35,520 --> 00:36:39,040
Speaker 3: will tell you furthermore, a policy change that's negative in

651
00:36:39,040 --> 00:36:43,239
Speaker 3: the long run is really unsettling when it comes to

652
00:36:43,280 --> 00:36:46,600
Speaker 3: short term decision making and planning. And that's why it's

653
00:36:46,640 --> 00:36:50,040
Speaker 3: so important that the president has the right advisor on

654
00:36:50,160 --> 00:36:54,000
Speaker 3: economic matters, and not just the president, the leaders both

655
00:36:54,040 --> 00:36:56,720
Speaker 3: on the majority and minority side of the House and Senate.

656
00:36:57,640 --> 00:37:01,320
Speaker 3: Our country has too much at stake to be pursuing

657
00:37:01,440 --> 00:37:04,520
Speaker 3: economic policies that don't rapidly grow the size.

658
00:37:04,200 --> 00:37:04,840
Speaker 4: Of the pie.

659
00:37:05,680 --> 00:37:08,120
Speaker 1: I want to ask you about private credits and then Miami.

660
00:37:08,440 --> 00:37:09,920
Speaker 2: So what's your take on private credit?

661
00:37:10,520 --> 00:37:14,719
Speaker 3: Your private credit is really fascinating a growth story over

662
00:37:14,719 --> 00:37:19,120
Speaker 3: the last decade in the alternative space, and it has

663
00:37:18,400 --> 00:37:23,279
Speaker 3: some really important strengths. And in particular, private credit has

664
00:37:23,360 --> 00:37:28,000
Speaker 3: been incredibly helpful to the LBO firms the private equity

665
00:37:28,040 --> 00:37:32,239
Speaker 3: firms because it gives them certainty of execution for the

666
00:37:32,280 --> 00:37:35,799
Speaker 3: deals they're trying to get done. You know, twenty years ago,

667
00:37:35,920 --> 00:37:38,359
Speaker 3: thirty years gosh, I'm really aging myself thirty years ago.

668
00:37:38,400 --> 00:37:41,399
Speaker 3: That would have been thirty five years ago. The letter

669
00:37:41,400 --> 00:37:45,360
Speaker 3: from Drexel, we are highly confident we can raise the

670
00:37:45,400 --> 00:37:48,840
Speaker 3: money right And Michael Milkan literally changed the world of

671
00:37:48,840 --> 00:37:51,760
Speaker 3: finance with those letters. He changed the entire US economy.

672
00:37:53,040 --> 00:37:55,720
Speaker 3: But jump forward thirty five years the day of Drexel,

673
00:37:56,440 --> 00:38:00,160
Speaker 3: the private credit community is now able to tell a

674
00:38:00,200 --> 00:38:06,000
Speaker 3: private equifirm you can definitively consummate this transaction because we're

675
00:38:06,000 --> 00:38:09,360
Speaker 3: good for it. The challenge with private credit is you

676
00:38:09,480 --> 00:38:12,080
Speaker 3: lose the mark to market feedback loop that you have

677
00:38:12,160 --> 00:38:13,600
Speaker 3: in public market securities.

678
00:38:14,320 --> 00:38:17,320
Speaker 4: So I worry about two factors that come from that.

679
00:38:17,920 --> 00:38:21,399
Speaker 3: Number one is are the people who are underwriting those

680
00:38:21,400 --> 00:38:26,040
Speaker 3: credits receiving really good feedback about the quality of their

681
00:38:26,040 --> 00:38:29,240
Speaker 3: investment decision making process, because that's how they learn and grow.

682
00:38:29,719 --> 00:38:34,120
Speaker 3: You know, very few companies actually ever default, So that

683
00:38:34,200 --> 00:38:39,160
Speaker 3: mark to market journey is a really important indicator to

684
00:38:39,239 --> 00:38:42,320
Speaker 3: the quality of your investment decision making as an investor,

685
00:38:42,719 --> 00:38:46,080
Speaker 3: and they're losing that. That's gone, and with so much

686
00:38:46,120 --> 00:38:49,320
Speaker 3: money being deploying the private credit markets, that worries me

687
00:38:49,400 --> 00:38:53,000
Speaker 3: about how thoughtfully we allocate capital as a society. That's

688
00:38:53,080 --> 00:38:57,000
Speaker 3: number one. Number two for retail and social investors. It's

689
00:38:57,080 --> 00:39:01,200
Speaker 3: very hard to judge a private credit money manager. Because

690
00:39:01,239 --> 00:39:04,880
Speaker 3: the assets aren't marked daily, weekly, or monthly in a

691
00:39:04,920 --> 00:39:09,080
Speaker 3: meaningful stringent way, it's really hard to differentiate the quality

692
00:39:09,080 --> 00:39:14,360
Speaker 3: of performance between different firms. And being an investor in

693
00:39:14,400 --> 00:39:18,200
Speaker 3: privately myself, I will tell you it's remarkable. You know,

694
00:39:18,200 --> 00:39:21,920
Speaker 3: I've seen term sheets for a given deal. The fact

695
00:39:21,920 --> 00:39:25,680
Speaker 3: that every single private credit firm delivers almost exactly the

696
00:39:25,719 --> 00:39:30,160
Speaker 3: same term sheet is really quite profound. I mean, what

697
00:39:30,960 --> 00:39:34,280
Speaker 3: real distinction in underwriting is happening When you've got seven

698
00:39:34,320 --> 00:39:36,760
Speaker 3: people all bidding out a deal and they're all within

699
00:39:37,360 --> 00:39:39,040
Speaker 3: twenty five bases points to one another.

700
00:39:39,760 --> 00:39:41,280
Speaker 4: I mean that, that to me is shocking.

701
00:39:42,760 --> 00:39:44,719
Speaker 1: Yeah, we only have a couple of minutes left. I mean,

702
00:39:44,800 --> 00:39:48,120
Speaker 1: Citadel planned a one billion dollar tower in Brickel.

703
00:39:48,600 --> 00:39:49,760
Speaker 4: I wish it was a billion dollars.

704
00:39:49,960 --> 00:39:51,000
Speaker 2: Is it not a billion dollars?

705
00:39:51,560 --> 00:39:52,759
Speaker 4: Oh? No, that's that's going to.

706
00:39:52,800 --> 00:39:55,760
Speaker 3: Put that option well, due to inflation in the cost

707
00:39:55,800 --> 00:40:00,560
Speaker 3: of construction, that's going to be about a two billion

708
00:40:00,600 --> 00:40:01,160
Speaker 3: dollar tower.

709
00:40:02,000 --> 00:40:03,040
Speaker 2: When does constructions do.

710
00:40:03,080 --> 00:40:05,560
Speaker 4: It Probably mid to late next.

711
00:40:05,480 --> 00:40:09,000
Speaker 2: Year from one it was meant to be one billion.

712
00:40:09,840 --> 00:40:11,760
Speaker 3: I didn't ever think we could build that for a billion.

713
00:40:11,840 --> 00:40:14,000
Speaker 3: But I will tell you that the numbers I have seen.

714
00:40:15,520 --> 00:40:20,400
Speaker 3: Those are big numbers. Have you signed bigger numbers to

715
00:40:20,400 --> 00:40:23,200
Speaker 3: build a building in New York, which is even more scary.

716
00:40:23,920 --> 00:40:25,720
Speaker 2: Have you signed any big tenants.

717
00:40:26,360 --> 00:40:27,680
Speaker 4: We're not worried about filling.

718
00:40:27,719 --> 00:40:32,520
Speaker 3: The building's not worried, so you don't need to speak

719
00:40:32,560 --> 00:40:33,000
Speaker 3: to you.

720
00:40:33,040 --> 00:40:34,120
Speaker 2: Build it and they'll come.

721
00:40:34,360 --> 00:40:37,680
Speaker 4: Oh, if we build it, they will come now.

722
00:40:37,680 --> 00:40:40,000
Speaker 3: I mean Miami has a huge deficit of grade A

723
00:40:40,120 --> 00:40:44,120
Speaker 3: office space. I mean the influx of firms of human

724
00:40:44,200 --> 00:40:48,759
Speaker 3: capital over the last several years. I trust me that

725
00:40:49,120 --> 00:40:50,440
Speaker 3: building will fill very quickly.

726
00:40:50,960 --> 00:40:52,719
Speaker 1: Do you need financing for it or will you just

727
00:40:52,760 --> 00:40:54,120
Speaker 1: slip the bill?

728
00:40:53,840 --> 00:40:56,200
Speaker 4: We'll cross that bridge in a year and change.

729
00:40:57,160 --> 00:41:00,279
Speaker 1: Are you looking to buy any more commercial or the

730
00:41:00,280 --> 00:41:04,880
Speaker 1: residential real estate in South Florida?

731
00:41:06,400 --> 00:41:08,040
Speaker 3: You know this is like televised I have to be

732
00:41:08,120 --> 00:41:13,719
Speaker 3: very careful my choice of words. Let me just cut

733
00:41:13,719 --> 00:41:16,919
Speaker 3: to the chase. South Florida has something that the rest

734
00:41:16,920 --> 00:41:20,880
Speaker 3: of the world wants. It has oceanfront property in a

735
00:41:20,960 --> 00:41:28,560
Speaker 3: state with extraordinarily safe streets, great schools, strong sense.

736
00:41:28,520 --> 00:41:31,120
Speaker 4: Of community, great cultural institutions.

737
00:41:31,840 --> 00:41:34,799
Speaker 3: Miami is one of the most vibrant cities in the world.

738
00:41:35,400 --> 00:41:38,520
Speaker 3: It has been with respect to a.

739
00:41:38,400 --> 00:41:39,440
Speaker 4: Real estate portfolio.

740
00:41:40,080 --> 00:41:42,200
Speaker 3: You'd be hard pressed to beat the returns of real

741
00:41:42,280 --> 00:41:45,359
Speaker 3: estate and South Florida over the last seven years. And

742
00:41:45,440 --> 00:41:52,640
Speaker 3: at this point I have enough. But in two years

743
00:41:53,000 --> 00:41:54,160
Speaker 3: we can tokenize it.

744
00:41:57,280 --> 00:42:00,800
Speaker 1: How have the recruiting efforts gone to bring more senior

745
00:42:00,880 --> 00:42:02,960
Speaker 1: executives to Miami from other locations.

746
00:42:03,080 --> 00:42:06,080
Speaker 4: We're on plan. We're good.

747
00:42:06,480 --> 00:42:11,000
Speaker 3: And part of that is, you know, very deliberately. We

748
00:42:11,040 --> 00:42:13,320
Speaker 3: have a very large team here in New York City.

749
00:42:13,440 --> 00:42:17,080
Speaker 3: This is our largest city in the world by headcount.

750
00:42:17,520 --> 00:42:18,480
Speaker 4: I mean, New York is.

751
00:42:18,560 --> 00:42:23,560
Speaker 3: The financial capital of America today. But our country has been,

752
00:42:23,640 --> 00:42:26,880
Speaker 3: you know, over the decades, defined by really good, robust

753
00:42:26,880 --> 00:42:31,720
Speaker 3: competition between our cities. And with the rise of Miami

754
00:42:31,880 --> 00:42:35,200
Speaker 3: and the rise of both the capital community, hedge funds,

755
00:42:35,760 --> 00:42:39,759
Speaker 3: judisal asset managers, we're seeing the emergence of a new

756
00:42:39,760 --> 00:42:43,360
Speaker 3: financial center in the United States. And I'm actually profoundly

757
00:42:43,400 --> 00:42:46,239
Speaker 3: excited about that. It's really it's so much fun to

758
00:42:46,280 --> 00:42:50,399
Speaker 3: be in a city where people are profoundly optimistic about

759
00:42:50,440 --> 00:42:51,279
Speaker 3: their future.

760
00:42:51,600 --> 00:42:55,040
Speaker 1: And our executives, your executives actually do they find what

761
00:42:55,080 --> 00:42:57,080
Speaker 1: they need to live with their families in Miami.

762
00:42:57,280 --> 00:43:01,359
Speaker 3: Let me give you some flipping around my executives are

763
00:43:01,440 --> 00:43:05,600
Speaker 3: part of an all volunteer workforce. Most of them don't

764
00:43:05,600 --> 00:43:10,080
Speaker 3: need to work, and they can certainly all work anywhere.

765
00:43:09,680 --> 00:43:10,120
Speaker 4: They wanted to.

766
00:43:10,200 --> 00:43:13,920
Speaker 3: In financial services, we have not had one senior person

767
00:43:13,960 --> 00:43:14,879
Speaker 3: lead Miami.

768
00:43:16,480 --> 00:43:17,680
Speaker 4: Like not one people.

769
00:43:19,280 --> 00:43:21,400
Speaker 3: There's always, you know, noise about this or that, but

770
00:43:21,440 --> 00:43:27,040
Speaker 3: buy and large people love being in a city where

771
00:43:27,160 --> 00:43:28,840
Speaker 3: your kids can jump in an uber and you're not

772
00:43:28,880 --> 00:43:30,840
Speaker 3: worried about it, where you can walk the streets tonight

773
00:43:30,920 --> 00:43:31,879
Speaker 3: and not worry about it.

774
00:43:32,560 --> 00:43:34,200
Speaker 4: And Chicago, you.

775
00:43:34,160 --> 00:43:36,560
Speaker 3: Know, over the last unfortunately, over the last six or

776
00:43:36,560 --> 00:43:39,280
Speaker 3: seven years, has been engulfed in a series of problems,

777
00:43:39,280 --> 00:43:43,920
Speaker 3: which is our headquarters for years. Asking people to leave

778
00:43:43,920 --> 00:43:46,240
Speaker 3: for Chicago or New York or Miami has not been hard.

779
00:43:46,280 --> 00:43:49,120
Speaker 3: We've gone from probably thirteen hundred people in Chicago to

780
00:43:49,200 --> 00:43:53,520
Speaker 3: a few hundred, from being the primary tenant of one

781
00:43:53,560 --> 00:43:55,879
Speaker 3: of the largest skyscrapers to I think will be down

782
00:43:55,920 --> 00:43:59,200
Speaker 3: to two floors in a year. I think that the

783
00:43:59,280 --> 00:44:03,279
Speaker 3: more the sad part of the story was how many

784
00:44:03,280 --> 00:44:06,600
Speaker 3: people who had built lives in Chicago were willing to

785
00:44:06,640 --> 00:44:09,680
Speaker 3: walk away from that and move to Miami or New York.

786
00:44:09,880 --> 00:44:10,440
Speaker 4: Just given the.

787
00:44:12,040 --> 00:44:14,840
Speaker 3: Challenges that Elinoy has faced. I mean, the governor of

788
00:44:14,840 --> 00:44:20,400
Speaker 3: Illinois has overseen the state. That literally is there are

789
00:44:20,440 --> 00:44:23,120
Speaker 3: more murders in Chicago on a bad weekend.

790
00:44:22,719 --> 00:44:23,960
Speaker 4: Than there is in Miami. In New Year.

791
00:44:26,760 --> 00:44:29,120
Speaker 3: There are fifty some schools in the state of Elinois

792
00:44:29,120 --> 00:44:32,600
Speaker 3: where not a single child is at grade level. Not

793
00:44:32,880 --> 00:44:37,360
Speaker 3: one child is at grade level. Fifty schools in Illinois.

794
00:44:38,160 --> 00:44:39,440
Speaker 3: And I was with the governor of the state of

795
00:44:39,440 --> 00:44:42,040
Speaker 3: Florida just a few days ago. We welcomed Success Academies

796
00:44:42,080 --> 00:44:45,240
Speaker 3: to South Florida. They're going to open several new schools

797
00:44:45,239 --> 00:44:48,080
Speaker 3: in the Miami area. There are hundreds of thousands of

798
00:44:48,200 --> 00:44:50,920
Speaker 3: kids in the state of Florida who are in charter schools.

799
00:44:51,880 --> 00:44:56,400
Speaker 3: And I know Eva Moscow was blown away by one thing. Everybody,

800
00:44:56,960 --> 00:44:59,240
Speaker 3: everybody extended her the warmest of welcomes.

801
00:45:00,160 --> 00:45:01,360
Speaker 4: Want her in Miami.

802
00:45:01,880 --> 00:45:06,440
Speaker 3: We want our children to have the future that Success

803
00:45:06,480 --> 00:45:09,600
Speaker 3: Academies will prepare them for. I mean, these will be

804
00:45:09,680 --> 00:45:13,719
Speaker 3: kids that will go on from every socioeconomic background, that

805
00:45:13,800 --> 00:45:16,360
Speaker 3: will go on to have great careers and great lives

806
00:45:16,360 --> 00:45:19,680
Speaker 3: because they've had a great K through twelve education. And

807
00:45:20,000 --> 00:45:23,960
Speaker 3: there's nothing more powerful than when your governor, you're head

808
00:45:23,960 --> 00:45:27,439
Speaker 3: of education, the head of the local college are all

809
00:45:27,600 --> 00:45:31,440
Speaker 3: just embracing you to come there. In contrast, here in

810
00:45:31,440 --> 00:45:36,239
Speaker 3: New York, she's always fighting uphill battle with the unions

811
00:45:36,680 --> 00:45:37,600
Speaker 3: and with many members of the.

812
00:45:37,600 --> 00:45:40,000
Speaker 4: Political class to do what is.

813
00:45:41,480 --> 00:45:44,560
Speaker 3: To use a word that was used in financed years ago,

814
00:45:44,600 --> 00:45:48,880
Speaker 3: but to do God's work to help children who have really,

815
00:45:49,320 --> 00:45:53,880
Speaker 3: really challenging backgrounds get ahead. I mean, I can't believe

816
00:45:54,200 --> 00:45:56,040
Speaker 3: that she struggles like she does in New York to

817
00:45:56,080 --> 00:45:59,240
Speaker 3: open new schools, and we in Miami are so excited

818
00:45:59,280 --> 00:46:01,160
Speaker 3: to welcome her to the great state of Florida.

819
00:46:01,280 --> 00:46:03,719
Speaker 1: You can maybe one final question, how you know, what

820
00:46:03,800 --> 00:46:06,640
Speaker 1: else do you look at to do in philanthropy for education?

821
00:46:08,320 --> 00:46:11,040
Speaker 3: So you know, the big wildcard in the United States,

822
00:46:11,120 --> 00:46:14,200
Speaker 3: of course, on the filmthropic side of education is our

823
00:46:14,320 --> 00:46:19,799
Speaker 3: university system. And there's one thing that makes it very

824
00:46:19,800 --> 00:46:22,840
Speaker 3: clear that our universities need to change how they do business.

825
00:46:25,080 --> 00:46:29,080
Speaker 3: A material portion of all student loans are not currently

826
00:46:29,120 --> 00:46:34,400
Speaker 3: being paid, which tells you that the recipient of the

827
00:46:34,400 --> 00:46:37,560
Speaker 3: student loans feels that the value of the education they

828
00:46:37,640 --> 00:46:40,840
Speaker 3: received was so poor that even though they have a

829
00:46:40,960 --> 00:46:44,680
Speaker 3: legal obligation to pay the loans, they'd rather just default.

830
00:46:45,520 --> 00:46:47,839
Speaker 3: Could you imagine how long Walmart would last if like

831
00:46:47,960 --> 00:46:49,800
Speaker 3: thirty percent of their customers didn't pay.

832
00:46:49,600 --> 00:46:54,400
Speaker 4: For the products they bought. Eight weeks, four weeks, two weeks.

833
00:46:56,200 --> 00:47:01,319
Speaker 3: All Right, American higher education is plagued by offering a

834
00:47:01,440 --> 00:47:07,920
Speaker 3: product that's extremely expensive that the recipients themselves don't value.

835
00:47:08,000 --> 00:47:09,520
Speaker 3: And so I think we need to look long and

836
00:47:09,600 --> 00:47:12,279
Speaker 3: hard at the success stories of American higher education. You

837
00:47:12,280 --> 00:47:15,600
Speaker 3: know what Mitch Daniels was doing at Purdue, for example,

838
00:47:16,360 --> 00:47:18,960
Speaker 3: for a real roadmap and how we have to transform

839
00:47:19,040 --> 00:47:23,960
Speaker 3: our universities to deliver, to deliver a better value product,

840
00:47:25,160 --> 00:47:27,400
Speaker 3: and that is to prepare the students of our country

841
00:47:27,800 --> 00:47:30,680
Speaker 3: to be the leaders of our country twenty thirty years

842
00:47:30,719 --> 00:47:31,360
Speaker 3: from now.

843
00:47:31,719 --> 00:47:34,560
Speaker 4: And between now and that day and time for those students.

844
00:47:34,200 --> 00:47:38,080
Speaker 3: To be really, really effective in contributing members to society.

845
00:47:38,360 --> 00:47:40,920
Speaker 4: Who will run the AI companies that.

846
00:47:40,840 --> 00:47:44,840
Speaker 3: We were speaking about twenty minutes ago, Who will drive

847
00:47:45,320 --> 00:47:48,360
Speaker 3: that new business formation that will create tens of millions

848
00:47:48,360 --> 00:47:53,040
Speaker 3: of jobs that will help our nation succeed for decades

849
00:47:53,160 --> 00:47:54,239
Speaker 3: for centuries to come.

850
00:47:55,160 --> 00:47:56,880
Speaker 2: Ken, Thank you so much, Ken Griffin.

851
00:47:56,920 --> 00:48:03,480
Speaker 1: Everyone