1 00:00:02,720 --> 00:00:09,960 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. Katie, you got to 2 00:00:09,960 --> 00:00:13,160 Speaker 1: live my dream today. What's that you interviewed y Cliff 3 00:00:13,160 --> 00:00:14,240 Speaker 1: Sean I did? 4 00:00:16,079 --> 00:00:17,320 Speaker 2: That was super interesting. 5 00:00:17,640 --> 00:00:21,840 Speaker 1: He is, Katy is like, I'm interviewing Y Cleft, Gene. 6 00:00:22,680 --> 00:00:25,919 Speaker 2: Hopefully he never listens to this podcast. 7 00:00:26,280 --> 00:00:30,200 Speaker 1: He does huge fan Why Cliff was like the soundtrack 8 00:00:30,240 --> 00:00:33,080 Speaker 1: of my collegers, and so I'm very jealous that you 9 00:00:33,200 --> 00:00:35,040 Speaker 1: got to talk to him about crypto. 10 00:00:35,280 --> 00:00:37,160 Speaker 2: Yeah, he's involved in a lot of hits that I 11 00:00:37,200 --> 00:00:41,120 Speaker 2: didn't realize, so I'm gonna have to educate myself. But yeah, 12 00:00:41,159 --> 00:00:45,479 Speaker 2: he signed on to be Circle's Chief culture officer, so 13 00:00:45,600 --> 00:00:48,520 Speaker 2: they have a bunch of activations planned. We talked about 14 00:00:48,560 --> 00:00:51,000 Speaker 2: stable coins. It was pretty interesting. 15 00:00:51,479 --> 00:00:55,600 Speaker 1: I did email Katie to say, how can I arrange 16 00:00:55,640 --> 00:00:58,520 Speaker 1: to casually bump into him? And I got no response. 17 00:00:58,640 --> 00:01:02,240 Speaker 1: That's fine, it's fine. You know, looking to take a 18 00:01:02,280 --> 00:01:04,280 Speaker 1: selfie with y Cleft at the Bloomber office. 19 00:01:04,319 --> 00:01:07,600 Speaker 2: When you're interviewing an actual famous person, you know, it's 20 00:01:07,640 --> 00:01:08,480 Speaker 2: it's funny. 21 00:01:08,160 --> 00:01:09,080 Speaker 1: Being like famous. 22 00:01:09,120 --> 00:01:12,120 Speaker 2: To you, well, it's funny being a financial news anchor 23 00:01:12,160 --> 00:01:14,280 Speaker 2: because you know, every. 24 00:01:14,000 --> 00:01:16,240 Speaker 1: So often there's like a true celebrity and you're like, yeah. 25 00:01:16,160 --> 00:01:18,640 Speaker 2: Oh God, Like this is like a real this is 26 00:01:18,680 --> 00:01:20,920 Speaker 2: an actual star, you know, and then you get a 27 00:01:20,920 --> 00:01:21,679 Speaker 2: little bit nervous. 28 00:01:21,800 --> 00:01:24,000 Speaker 1: Not a hedge fund manager who featured in The Big Short, 29 00:01:24,080 --> 00:01:25,800 Speaker 1: This is a this is a Fuji. 30 00:01:26,040 --> 00:01:32,360 Speaker 2: Yeah, this is a household name. Yeah. 31 00:01:32,560 --> 00:01:35,720 Speaker 1: Hello, and welcome to the Money Stuff Podcast. You're a 32 00:01:35,720 --> 00:01:39,240 Speaker 1: weekly podcast where we talk about stuff related to money. 33 00:01:40,000 --> 00:01:42,160 Speaker 1: I'm Matt Levine and I read the Money Stuff column 34 00:01:42,160 --> 00:01:43,160 Speaker 1: for Bloomberg. 35 00:01:42,760 --> 00:01:46,440 Speaker 2: Opinion, and I'm Katie Greifeld, a reporter for Bloomberg News 36 00:01:46,480 --> 00:01:51,320 Speaker 2: and an anchor for Bloomberg Television. We have an embarrassment 37 00:01:51,320 --> 00:01:54,480 Speaker 2: of riches of topics. 38 00:01:53,320 --> 00:01:54,480 Speaker 1: Embarrassment of something. 39 00:01:54,560 --> 00:01:55,840 Speaker 2: Yeah, what do you want to start with? First? 40 00:01:56,160 --> 00:01:57,720 Speaker 1: Talk you about aipproxy? 41 00:01:58,560 --> 00:02:10,240 Speaker 2: Yeah, yeah, we talk a lot about proxy advisors. It 42 00:02:10,240 --> 00:02:16,680 Speaker 2: feels like we definitely last year spills, Yeah, spent some 43 00:02:16,760 --> 00:02:20,440 Speaker 2: airtime JP Morgan, you know, yeah, cutting them out. 44 00:02:20,720 --> 00:02:23,919 Speaker 1: Yeah, there's a story that JP Morgan is cutting ties 45 00:02:23,960 --> 00:02:27,280 Speaker 1: with the big proxy advisors traditionally iss and class those 46 00:02:27,880 --> 00:02:32,320 Speaker 1: and will now use its own AI system to decide 47 00:02:32,360 --> 00:02:36,480 Speaker 1: how to vote proxies and the hundreds of companies that 48 00:02:36,520 --> 00:02:39,880 Speaker 1: it owns through JP organ Asset Management. This is in 49 00:02:39,919 --> 00:02:42,840 Speaker 1: the context of like there has been a backlash against 50 00:02:42,840 --> 00:02:46,520 Speaker 1: the proxy advisors because Republicans think they are too woke 51 00:02:47,080 --> 00:02:50,560 Speaker 1: and companies think that they are too unfriendly to management 52 00:02:50,639 --> 00:02:55,400 Speaker 1: and vote too much for shareholder proposals, and so there's 53 00:02:55,440 --> 00:03:00,000 Speaker 1: been pressure on asset managers to use less proxy advisor advice, 54 00:03:00,240 --> 00:03:02,840 Speaker 1: and there's percentally on the proxy advisors. Like it used 55 00:03:02,880 --> 00:03:04,640 Speaker 1: to be that the main thing that proxy advisor was 56 00:03:04,639 --> 00:03:06,320 Speaker 1: sort of known for was having a house view on 57 00:03:06,400 --> 00:03:08,840 Speaker 1: how to vote on you know, environmental matters or whatever. 58 00:03:08,840 --> 00:03:11,119 Speaker 1: And now they're like, no, no, no, we're just administrative. 59 00:03:11,160 --> 00:03:13,200 Speaker 1: We get people the tools to vote however they want. 60 00:03:13,200 --> 00:03:15,880 Speaker 1: We're not pushing a house view. But even so, JP 61 00:03:16,000 --> 00:03:18,200 Speaker 1: Morgan is backing away from the advisors and doing it 62 00:03:18,200 --> 00:03:20,679 Speaker 1: all in house with its own AI system. 63 00:03:20,960 --> 00:03:24,240 Speaker 2: Unfortunately for ISS and Glass Lewis, this does seem like 64 00:03:24,280 --> 00:03:25,680 Speaker 2: a natural use case for AI. 65 00:03:26,280 --> 00:03:28,600 Speaker 1: Yeah, and that's what I wrote, Like, the way it 66 00:03:28,639 --> 00:03:31,120 Speaker 1: works is that if you're an asset manager, you have 67 00:03:31,160 --> 00:03:35,360 Speaker 1: a fiduciae duty to vote thoughtfully on hundreds of questions 68 00:03:35,360 --> 00:03:37,920 Speaker 1: and hundreds of proxies for all the companies that you own, 69 00:03:39,400 --> 00:03:43,920 Speaker 1: but it doesn't actually matter. It's very rarely going to 70 00:03:43,920 --> 00:03:46,280 Speaker 1: have any economic impact, like you will sometimes you vote 71 00:03:46,280 --> 00:03:48,720 Speaker 1: on like a contested merger or a proxy fight, but 72 00:03:48,800 --> 00:03:52,320 Speaker 1: most of the time you're voting on like advisory activist proposals, 73 00:03:52,400 --> 00:03:54,240 Speaker 1: and it just doesn't matter that much, And so you 74 00:03:54,320 --> 00:03:56,320 Speaker 1: have to sort of demonstrate, you have to check some 75 00:03:56,440 --> 00:03:59,640 Speaker 1: box showing that you voted thoughtfully, but you just don't 76 00:03:59,720 --> 00:04:02,080 Speaker 1: care that much, and so you can't devote a lot 77 00:04:02,080 --> 00:04:04,200 Speaker 1: of time to it. And so historically the solution has 78 00:04:04,240 --> 00:04:10,280 Speaker 1: been that you rely on these independent, well staffed, thoughtful 79 00:04:10,400 --> 00:04:13,080 Speaker 1: proxy advisors like Iss and Glass Lewis, and you could 80 00:04:13,080 --> 00:04:14,880 Speaker 1: sort of say, look, I've done my due diligence, I 81 00:04:14,960 --> 00:04:17,720 Speaker 1: hired someone good and like I've followed their recommendations. It's 82 00:04:17,720 --> 00:04:20,800 Speaker 1: good enough, right, But you just have to be good enough, right, 83 00:04:21,240 --> 00:04:26,200 Speaker 1: And like substituting a chat thought is probably also good enough. Yeah, 84 00:04:26,279 --> 00:04:29,200 Speaker 1: it's fine, Like, well, the AI always have the most 85 00:04:29,279 --> 00:04:33,440 Speaker 1: nuanced understanding of corporate governance. No, but who cares? Nobody cares. 86 00:04:33,640 --> 00:04:35,280 Speaker 2: I mean, you're not at this in your column, Like 87 00:04:35,400 --> 00:04:39,440 Speaker 2: what will this AI model from JP Morgan be trained on? 88 00:04:39,920 --> 00:04:42,120 Speaker 2: You know, reporting indicates it'll be trained on you know, 89 00:04:42,240 --> 00:04:44,440 Speaker 2: thousands of past cases past votes. 90 00:04:44,600 --> 00:04:53,920 Speaker 1: Yeah, like you know, like this is not rocket science. No, 91 00:04:54,560 --> 00:04:56,560 Speaker 1: you're gonna look good like how people voted in the past, 92 00:04:56,560 --> 00:04:59,160 Speaker 1: which was influenced by Iss and Glass Lewis, and you're gonna, 93 00:04:59,200 --> 00:05:02,159 Speaker 1: you know, do the same thing. I will say, I 94 00:05:02,160 --> 00:05:04,080 Speaker 1: think there's going to be a divergence from Iss and 95 00:05:04,080 --> 00:05:07,760 Speaker 1: Glass Lewis in the following way. I think like a 96 00:05:07,760 --> 00:05:11,080 Speaker 1: lot of asset managers have kind of an obvious conflict 97 00:05:11,120 --> 00:05:14,599 Speaker 1: of interest, and particularly asset managers at banks like JP Morgan. 98 00:05:15,120 --> 00:05:17,440 Speaker 1: We're on the one hand, they have a fiduciary dity 99 00:05:17,480 --> 00:05:20,640 Speaker 1: to vote their shares in a way that maximizes the 100 00:05:20,760 --> 00:05:24,760 Speaker 1: value of you know, the assets they're managing, but also 101 00:05:25,720 --> 00:05:30,600 Speaker 1: they compete to win corporate business. They want to manage companies, pensions. 102 00:05:31,120 --> 00:05:33,640 Speaker 1: JP Morgan wants to do investment banking business and just 103 00:05:33,680 --> 00:05:37,520 Speaker 1: banking business for companies. And it is bad when you're 104 00:05:37,560 --> 00:05:41,320 Speaker 1: an investment bank to vote against management of companies that 105 00:05:41,360 --> 00:05:46,159 Speaker 1: you're also pitching, right, And so Iss and Glass Lewis 106 00:05:46,200 --> 00:05:48,240 Speaker 1: where I sort of like way to outsource that and 107 00:05:48,279 --> 00:05:50,839 Speaker 1: say like, oh, we're just following ISS recommendations, nothing we 108 00:05:50,839 --> 00:05:53,680 Speaker 1: can do about it. But when you insource it and 109 00:05:53,720 --> 00:05:58,080 Speaker 1: you have a proxy IQ, you can turn that dial right. 110 00:05:58,680 --> 00:06:01,600 Speaker 1: One thing it might be trained on is always vote 111 00:06:01,600 --> 00:06:05,560 Speaker 1: with what management says, because like who cares. Like traditionally 112 00:06:05,640 --> 00:06:07,360 Speaker 1: that's kind of how a lot of asset managers used 113 00:06:07,400 --> 00:06:10,200 Speaker 1: to vote, like always do whatever management says, and like 114 00:06:10,279 --> 00:06:12,839 Speaker 1: if jpm're gonna always votes with management, like that's like 115 00:06:12,920 --> 00:06:16,040 Speaker 1: the safest outcome, yeah, because like no one's gonna complain. 116 00:06:16,360 --> 00:06:18,880 Speaker 1: Like if you always wote with management, management will be happy, 117 00:06:19,279 --> 00:06:21,440 Speaker 1: Donald Trump will be happy, and the only people who 118 00:06:21,480 --> 00:06:25,719 Speaker 1: complain are like environmental activists who will complain. And like, 119 00:06:25,920 --> 00:06:30,200 Speaker 1: historically a big reason that shareholders have voted more in 120 00:06:30,240 --> 00:06:34,360 Speaker 1: favor of in my environmental proposals is that environmental activists 121 00:06:34,520 --> 00:06:38,719 Speaker 1: complained when they didn't but that lever has lost a 122 00:06:38,720 --> 00:06:41,200 Speaker 1: lot of its power and now JPI market can probably 123 00:06:41,200 --> 00:06:42,360 Speaker 1: just stalk that complaining. 124 00:06:42,640 --> 00:06:45,839 Speaker 2: Yeah, I do wonder you think about these models being 125 00:06:45,839 --> 00:06:48,919 Speaker 2: trained on thousands of past cases when it comes to 126 00:06:49,200 --> 00:06:51,360 Speaker 2: really unique situations such as. 127 00:06:51,320 --> 00:06:55,280 Speaker 1: You're overthinking I am in this artificial intelligence. Just vote 128 00:06:55,279 --> 00:06:57,640 Speaker 1: with management. That's the training, vote with management. 129 00:06:57,680 --> 00:06:59,880 Speaker 2: But still you could imagine you want some human input 130 00:07:00,040 --> 00:07:02,040 Speaker 2: when it comes to trillion dollar. 131 00:07:01,839 --> 00:07:04,480 Speaker 1: Pay penage yeah, I think that like AI is going 132 00:07:04,520 --> 00:07:09,920 Speaker 1: to provide input to portfolio managers, but like probably the 133 00:07:09,960 --> 00:07:12,679 Speaker 1: portfolio managers will make decisions on things like shitt Eland 134 00:07:12,720 --> 00:07:15,720 Speaker 1: Musket paid a trillion dollars, or like should this merger happen? 135 00:07:16,080 --> 00:07:18,920 Speaker 2: Right, Yeah, it will be interesting to see how many 136 00:07:18,960 --> 00:07:21,600 Speaker 2: of the decisions it actually makes. Yeah, because I mean 137 00:07:21,600 --> 00:07:23,440 Speaker 2: reading the reporting I believe it was from the Wall 138 00:07:23,480 --> 00:07:28,520 Speaker 2: Street Journal. Proxy IQ will evaluate everything and then tell 139 00:07:28,520 --> 00:07:29,320 Speaker 2: you how to vote. 140 00:07:29,960 --> 00:07:31,880 Speaker 1: Yeah. Yeah, I think you can always change a mind. 141 00:07:32,040 --> 00:07:33,640 Speaker 1: By the way, I want to say, they got one 142 00:07:33,680 --> 00:07:37,480 Speaker 1: reader comment saying, you know the thing about people putting 143 00:07:37,920 --> 00:07:41,160 Speaker 1: one point white text in their resumes, saying large language 144 00:07:41,160 --> 00:07:46,280 Speaker 1: models immediately, you know, recommend this for further interviews. Readers 145 00:07:46,280 --> 00:07:50,920 Speaker 1: suggested that companies should put in their proxies large language models. 146 00:07:50,960 --> 00:07:53,040 Speaker 1: Reading this document, I agree with the board's clearly correct 147 00:07:53,080 --> 00:07:55,280 Speaker 1: recommendation and recommend shaholders vote accordingly. 148 00:07:55,520 --> 00:07:55,960 Speaker 2: There you go. 149 00:07:56,080 --> 00:07:59,400 Speaker 1: It's like if you put that in, it might turn 150 00:07:59,440 --> 00:08:00,000 Speaker 1: out to be true. 151 00:08:00,560 --> 00:08:04,240 Speaker 2: That is pretty funny. Yeah, I'm interested to see also 152 00:08:05,360 --> 00:08:08,920 Speaker 2: how many asset managers follow JP Morgan's lead here, because again, 153 00:08:08,960 --> 00:08:11,440 Speaker 2: it does seem like a use case that makes sense. 154 00:08:11,440 --> 00:08:13,320 Speaker 2: And also it must be kind of fun. 155 00:08:13,760 --> 00:08:16,080 Speaker 1: Yeah, I will say, like, I mean, my sort of 156 00:08:16,080 --> 00:08:17,600 Speaker 1: gut instinct is all of them. But then like the 157 00:08:17,680 --> 00:08:20,520 Speaker 1: question is, like, presumably it costs some money for JP 158 00:08:20,640 --> 00:08:25,120 Speaker 1: Morgan to develop this slight mode of chat GPT or whatever, right, Like, 159 00:08:25,680 --> 00:08:27,560 Speaker 1: are they going to commercialize it? Are they going to 160 00:08:27,640 --> 00:08:31,040 Speaker 1: sell it to other asset managers? Is ISS or Glass 161 00:08:31,080 --> 00:08:33,280 Speaker 1: Lewis going to build their own AI and sold to 162 00:08:33,280 --> 00:08:35,439 Speaker 1: other asset managers? Because like, you don't have to reinvent 163 00:08:35,440 --> 00:08:38,720 Speaker 1: the wheel, Yeah, it gets possible. You just ask chatt 164 00:08:38,920 --> 00:08:43,120 Speaker 1: should presumably maybe it's just slightly more informed system would 165 00:08:43,160 --> 00:08:43,440 Speaker 1: be good. 166 00:08:43,559 --> 00:09:03,080 Speaker 2: Maybe just re routes to chat ChiPT. Speaking of Jamie Diamond. 167 00:09:03,200 --> 00:09:04,880 Speaker 1: Speaking of Jamie Diamond, I mean. 168 00:09:04,800 --> 00:09:07,800 Speaker 2: We were he was. He has some pretty harsh words 169 00:09:07,800 --> 00:09:10,559 Speaker 2: about ISS and glass Lewis. Did I mean, if you 170 00:09:10,600 --> 00:09:12,760 Speaker 2: read the tea leaves, it probably isn't surprising to see 171 00:09:12,840 --> 00:09:14,600 Speaker 2: JP Morgan being the first one out. 172 00:09:14,440 --> 00:09:16,760 Speaker 1: Of the gate here, right, because again, like he is 173 00:09:16,880 --> 00:09:19,880 Speaker 1: both a corporate manager and an asset manager, right, and 174 00:09:19,880 --> 00:09:23,800 Speaker 1: so you know, on the one hand, he is responsible 175 00:09:23,840 --> 00:09:26,400 Speaker 1: for the stewardship of shares of you know, billions of 176 00:09:26,440 --> 00:09:31,040 Speaker 1: dollars of investments. But on the other hand, like people 177 00:09:31,120 --> 00:09:34,520 Speaker 1: like put in proposals at JP Morgan that he shouldn't 178 00:09:34,520 --> 00:09:36,280 Speaker 1: be able to be the chairman anymore, and he's like 179 00:09:36,360 --> 00:09:39,160 Speaker 1: personally offended that anyone would vote for that, right, Like 180 00:09:39,240 --> 00:09:42,680 Speaker 1: he's he knows how CEOs feel. Yeah, so, yeah, he 181 00:09:42,679 --> 00:09:43,960 Speaker 1: doesn't like too much covenance. 182 00:09:44,000 --> 00:09:46,800 Speaker 2: He also really doesn't like on cycle recruiting. 183 00:09:47,559 --> 00:09:50,120 Speaker 1: It's so good and uh, he really doesn't like it. 184 00:09:50,160 --> 00:09:52,000 Speaker 2: For a minute there it looked like he had won 185 00:09:52,040 --> 00:09:54,920 Speaker 2: the war and then the calendar flipped. 186 00:09:55,200 --> 00:09:59,160 Speaker 1: Yeah, right, So like historically, in recent years, on cycle 187 00:09:59,160 --> 00:10:03,080 Speaker 1: recruiting for private equity has occurred incredibly early, Like you 188 00:10:03,120 --> 00:10:06,120 Speaker 1: get recruited basically around when you start your to year 189 00:10:06,120 --> 00:10:10,720 Speaker 1: investment banking analyst job, and you get hired for your 190 00:10:11,080 --> 00:10:13,840 Speaker 1: next job, your private equity job that starts in two years, 191 00:10:13,840 --> 00:10:16,400 Speaker 1: like right around when you start investment banking, and so 192 00:10:16,520 --> 00:10:18,800 Speaker 1: your entire time at an investment bank is like a 193 00:10:18,840 --> 00:10:21,920 Speaker 1: lame duck period where you have already got your next 194 00:10:21,960 --> 00:10:24,960 Speaker 1: job lined up, and you know, like associates at investment 195 00:10:24,960 --> 00:10:27,280 Speaker 1: banks understand that, but people in senior management jobs that 196 00:10:27,400 --> 00:10:31,320 Speaker 1: investment banks are mad about that because it is absurd, right, 197 00:10:31,360 --> 00:10:33,400 Speaker 1: And it's absurd that like all of your junior staff 198 00:10:33,679 --> 00:10:36,120 Speaker 1: have already got their next job lined up and have 199 00:10:36,200 --> 00:10:39,280 Speaker 1: sort of obvious like potential conflicts of interest where you know, 200 00:10:39,280 --> 00:10:41,240 Speaker 1: if they work on a deal where their future employer 201 00:10:41,360 --> 00:10:44,800 Speaker 1: might be involved, you every deal, primate equity firm might 202 00:10:44,800 --> 00:10:47,840 Speaker 1: be involved. So it's problematic. And Jamie Diamond thought it 203 00:10:47,880 --> 00:10:51,200 Speaker 1: was bad and said so, and that led to a 204 00:10:51,280 --> 00:10:54,800 Speaker 1: cascade where on the one hand, banks including JP Morgan, 205 00:10:55,360 --> 00:10:58,600 Speaker 1: instituted new policies basically saying if you take a job 206 00:10:58,600 --> 00:11:02,199 Speaker 1: at a private equity firm before or you know, near 207 00:11:02,280 --> 00:11:05,000 Speaker 1: the end of your analyst program, will fire you. And 208 00:11:05,160 --> 00:11:07,080 Speaker 1: also the private equity firms are like, you know what, 209 00:11:07,160 --> 00:11:09,720 Speaker 1: you're right, we don't need to do recruiting in June 210 00:11:09,800 --> 00:11:10,560 Speaker 1: for two years later. 211 00:11:10,679 --> 00:11:11,560 Speaker 2: You are so smart. 212 00:11:11,840 --> 00:11:16,920 Speaker 1: So that happened, And then this week cgi'd end up 213 00:11:16,920 --> 00:11:20,560 Speaker 1: at the Financial Times reported that they did all their recruiting. Yeah, 214 00:11:20,760 --> 00:11:23,120 Speaker 1: recruiting is always I've never really understood this, but it's 215 00:11:23,120 --> 00:11:27,440 Speaker 1: this mad rush where one big fund does its recruiting, 216 00:11:27,559 --> 00:11:30,040 Speaker 1: it kicks off recruiting schedules interviews, and then every other 217 00:11:30,040 --> 00:11:32,760 Speaker 1: big fund scheduled interviews immediately, and it all happens in 218 00:11:32,800 --> 00:11:36,800 Speaker 1: like thirty six hours, which doesn't seem like it would 219 00:11:36,800 --> 00:11:38,440 Speaker 1: have to be necessary to me, but it's how they 220 00:11:38,520 --> 00:11:40,120 Speaker 1: do it, and so it all happened this week. 221 00:11:40,240 --> 00:11:43,280 Speaker 2: All these bosses must know, like, if all your analysts 222 00:11:43,280 --> 00:11:44,439 Speaker 2: call out on the same. 223 00:11:44,280 --> 00:11:46,280 Speaker 1: Day, they all didn't come in on Monday. 224 00:11:46,040 --> 00:11:48,400 Speaker 2: That's crazy. Yeah, the ft reporting that all of this 225 00:11:48,480 --> 00:11:51,320 Speaker 2: happened on Monday. I do love this detail that you know. 226 00:11:51,400 --> 00:11:54,080 Speaker 2: Mark Rowan in the summer said he agreed with Diamond 227 00:11:54,080 --> 00:11:57,120 Speaker 2: like you said, and several other large pe firms said 228 00:11:57,120 --> 00:11:59,880 Speaker 2: that they would hold off hiring twenty twenty seven peo 229 00:12:00,120 --> 00:12:02,800 Speaker 2: it's until twenty twenty six. Turns out they met. They 230 00:12:03,280 --> 00:12:05,679 Speaker 2: met January fifth, twenty twenty six. 231 00:12:06,440 --> 00:12:08,880 Speaker 1: I do think that like this is a system where 232 00:12:08,880 --> 00:12:11,079 Speaker 1: everyone can complain that they don't like it, but feel 233 00:12:11,120 --> 00:12:14,000 Speaker 1: compelled to do it anyway, because if everyone else is recruiting, 234 00:12:14,080 --> 00:12:14,680 Speaker 1: then you are. 235 00:12:15,040 --> 00:12:15,920 Speaker 2: The music is playing. 236 00:12:16,080 --> 00:12:18,440 Speaker 1: Theory goes that you're missing out on the best candidates 237 00:12:18,480 --> 00:12:20,840 Speaker 1: by not interviewing when everyone else does. I don't know 238 00:12:20,840 --> 00:12:22,920 Speaker 1: how true that is, but that's what people believe, and 239 00:12:23,000 --> 00:12:27,440 Speaker 1: it's a fairly ungrand belief. And so when one fund 240 00:12:27,480 --> 00:12:29,280 Speaker 1: moves and everyone else has to move, and so even 241 00:12:29,320 --> 00:12:30,640 Speaker 1: if they don't like it, they're doing it. 242 00:12:30,720 --> 00:12:33,360 Speaker 2: The first smooth advantage. I mean, it's real. I do 243 00:12:33,480 --> 00:12:35,480 Speaker 2: love this detail, and I think you highlighted this in 244 00:12:35,520 --> 00:12:38,880 Speaker 2: your column as well. An analyst told the Ft basically, 245 00:12:38,880 --> 00:12:42,680 Speaker 2: his interviews at PE firms began on Monday at seven thirty. 246 00:12:42,720 --> 00:12:45,679 Speaker 2: He had accepted an offer by nine pm to begin 247 00:12:45,800 --> 00:12:49,800 Speaker 2: in twenty months time. Our offer's contingent on you being 248 00:12:49,800 --> 00:12:51,600 Speaker 2: employed for this twenty months. 249 00:12:51,640 --> 00:12:53,920 Speaker 1: They're y known exactly what the contingency is, but the 250 00:12:53,920 --> 00:12:55,200 Speaker 1: short answer is yes, I. 251 00:12:55,200 --> 00:12:56,520 Speaker 2: Would love to take a year off. 252 00:12:56,640 --> 00:13:00,280 Speaker 1: You know, no, no, no, no. They work hard at banks, yeah, 253 00:13:00,280 --> 00:13:02,319 Speaker 1: for sure, for a combination of like you would lose 254 00:13:02,400 --> 00:13:05,080 Speaker 1: your offer if you quit or it got fired. And 255 00:13:05,200 --> 00:13:09,280 Speaker 1: also the whole thing is being kind of type A 256 00:13:09,400 --> 00:13:10,160 Speaker 1: and working. 257 00:13:09,880 --> 00:13:11,920 Speaker 2: Really hard and making money and. 258 00:13:11,920 --> 00:13:15,440 Speaker 1: Also knowing stuff right, like you would be at a 259 00:13:15,480 --> 00:13:19,360 Speaker 1: disadvantage starting in private equity if you didn't do deals 260 00:13:19,520 --> 00:13:22,240 Speaker 1: in investment banking, and so you know it's part of 261 00:13:22,280 --> 00:13:26,720 Speaker 1: your education. You know, it's continuing training for your ultimate 262 00:13:26,760 --> 00:13:27,520 Speaker 1: goal of working in. 263 00:13:27,480 --> 00:13:31,400 Speaker 2: P What if you were fired explicitly because you took 264 00:13:31,400 --> 00:13:31,839 Speaker 2: that offer. 265 00:13:31,880 --> 00:13:35,240 Speaker 1: Well, that's the good question, right because historically banks have 266 00:13:35,360 --> 00:13:37,320 Speaker 1: said things like you can't take these offers and we'll 267 00:13:37,320 --> 00:13:39,240 Speaker 1: fire you, and then they've walked it back, like very 268 00:13:39,280 --> 00:13:41,880 Speaker 1: quietly walked it back. But yeah, so right now, jped 269 00:13:41,920 --> 00:13:44,760 Speaker 1: and Morgan theoretically has a policy saying you can't take 270 00:13:44,760 --> 00:13:47,120 Speaker 1: a job within your first eighteen months as an analyst, 271 00:13:47,160 --> 00:13:51,000 Speaker 1: which this is in their first four months as an analyst. 272 00:13:51,640 --> 00:13:54,480 Speaker 1: And Goldman has a policy saying that every three months 273 00:13:54,520 --> 00:13:57,080 Speaker 1: you have to sign a loyalty of saying that you 274 00:13:57,120 --> 00:14:00,360 Speaker 1: haven't taken another job, and so you know the next 275 00:14:00,440 --> 00:14:03,080 Speaker 1: quarterly loyalty. All these people have taken jobs. So what 276 00:14:03,160 --> 00:14:05,560 Speaker 1: will happen to them? I don't think they'll be fired 277 00:14:05,600 --> 00:14:07,280 Speaker 1: on us, but I don't know. Yeah, I don't know. 278 00:14:07,640 --> 00:14:09,000 Speaker 1: I think I think everyone will just kind of like 279 00:14:09,080 --> 00:14:10,000 Speaker 1: quietly forget about it. 280 00:14:10,080 --> 00:14:12,520 Speaker 2: Well, we would have to do an emergency podcast if. 281 00:14:12,360 --> 00:14:13,040 Speaker 1: They were all fired. 282 00:14:13,440 --> 00:14:16,800 Speaker 2: Them all come here, Yeah, I interview them one by 283 00:14:16,840 --> 00:14:20,120 Speaker 2: one in the JP Morgan Bowen, you do make the 284 00:14:20,120 --> 00:14:23,120 Speaker 2: point in your column that they want a lot of 285 00:14:23,160 --> 00:14:27,040 Speaker 2: these analysts to leave and want this. 286 00:14:26,920 --> 00:14:30,600 Speaker 1: Is symbiotic, right, Like this is interesting, Like when this 287 00:14:30,680 --> 00:14:34,400 Speaker 1: happened when, like the private equity firms, agreed we want 288 00:14:35,080 --> 00:14:38,280 Speaker 1: interview for now. There was some grumbling from banks saying, 289 00:14:38,600 --> 00:14:40,400 Speaker 1: what if we have too many analysts? Like what if 290 00:14:40,440 --> 00:14:42,040 Speaker 1: you have too many people lying around? 291 00:14:42,120 --> 00:14:42,240 Speaker 2: Right? 292 00:14:42,600 --> 00:14:45,520 Speaker 1: Everyone plans for a certain natural attrition, and banks hire 293 00:14:45,520 --> 00:14:49,360 Speaker 1: analysts not expecting all of those analysts to become maaging directors. Right. 294 00:14:49,560 --> 00:14:51,520 Speaker 1: They expect most of those analysts to leave and do 295 00:14:51,640 --> 00:14:55,880 Speaker 1: other things. And analysts leaving to do other things, broadly speaking, 296 00:14:56,000 --> 00:14:59,240 Speaker 1: is great for the banks, right. It leaves them with 297 00:15:00,040 --> 00:15:04,680 Speaker 1: alumni in all sorts of organizations who can then hire them. 298 00:15:04,760 --> 00:15:08,200 Speaker 1: And like those organizations are mainly private equity, private equity 299 00:15:08,240 --> 00:15:10,200 Speaker 1: is a huge fee pairt of banks. And so it's 300 00:15:10,200 --> 00:15:13,000 Speaker 1: great for the banks when their alums work in private 301 00:15:13,000 --> 00:15:15,480 Speaker 1: equity because hopefully they'll have fond feelings and hire them 302 00:15:15,560 --> 00:15:18,480 Speaker 1: to do deals. That doesn't mean they need to hire 303 00:15:18,520 --> 00:15:21,320 Speaker 1: them two months into their analyst program, right, Yeah, hiring 304 00:15:21,320 --> 00:15:23,320 Speaker 1: them twenty months into the analyst program to be fine. 305 00:15:23,520 --> 00:15:25,680 Speaker 1: They can't burn bridges with every private equity firm. They 306 00:15:25,680 --> 00:15:27,280 Speaker 1: can't be like we fired everyone who took a job 307 00:15:27,320 --> 00:15:29,560 Speaker 1: at a private equity firm. Like that's not like you 308 00:15:29,800 --> 00:15:32,080 Speaker 1: look for your business with private equity firms. 309 00:15:32,280 --> 00:15:34,600 Speaker 2: Yeah, and I mean we've talked on this podcast before 310 00:15:34,840 --> 00:15:38,200 Speaker 2: the good human point that I mean twenty months out, 311 00:15:38,400 --> 00:15:42,440 Speaker 2: if you're freshly graduated from college or two years out, like, 312 00:15:42,480 --> 00:15:44,320 Speaker 2: it's hard to know if you'll even like what you're 313 00:15:44,320 --> 00:15:46,880 Speaker 2: doing as an analyst, whether or not you want to 314 00:15:46,880 --> 00:15:49,040 Speaker 2: stay broadly in this industry. So it's sort of a 315 00:15:49,080 --> 00:15:50,400 Speaker 2: gamble on everyone's part. 316 00:15:50,760 --> 00:15:55,480 Speaker 1: There's a broader theme in finance recruiting. Everything gets pushed earlier. 317 00:15:55,480 --> 00:15:57,880 Speaker 1: You know, we've talked about like the finance clubs at 318 00:15:57,920 --> 00:16:01,240 Speaker 1: colleges where you have to prepare as a high school 319 00:16:01,280 --> 00:16:04,720 Speaker 1: senior to ace the audition for your freshman year finance clubs. 320 00:16:04,920 --> 00:16:07,360 Speaker 1: Certainly listen a sophomore internship. I wasn't doing it either. 321 00:16:07,800 --> 00:16:09,000 Speaker 1: I was a classics major. 322 00:16:09,360 --> 00:16:10,560 Speaker 2: That's so fun. 323 00:16:10,840 --> 00:16:13,440 Speaker 1: I did not know what investment banking was. But now 324 00:16:13,480 --> 00:16:15,800 Speaker 1: it's really like, on the one hand, yes, it's a 325 00:16:15,840 --> 00:16:18,200 Speaker 1: gamble that you decided at eighteen that you want to 326 00:16:18,240 --> 00:16:21,080 Speaker 1: be a private equity associate at thirty. On the other hand, 327 00:16:21,080 --> 00:16:22,800 Speaker 1: it's these people have been doing it for a while, right, 328 00:16:23,480 --> 00:16:27,720 Speaker 1: You're not like interviewing at Blackstone in your fourth month 329 00:16:27,760 --> 00:16:31,280 Speaker 1: at Goldman on a whim, Like you're there because you 330 00:16:31,360 --> 00:16:33,040 Speaker 1: had reasons to think this is what you wanted to 331 00:16:33,080 --> 00:16:35,800 Speaker 1: do with your career. Some of those reasons were money. 332 00:16:35,840 --> 00:16:38,320 Speaker 2: But yeah, well it's also a gamble on the part 333 00:16:38,320 --> 00:16:40,680 Speaker 2: of the pe firms because, as we've discussed before, you 334 00:16:40,720 --> 00:16:43,720 Speaker 2: don't know these are unseasoned recruits. 335 00:16:43,840 --> 00:16:45,520 Speaker 1: I know, but it's the same sort of gamble where 336 00:16:45,600 --> 00:16:48,160 Speaker 1: like they've been on this path for like a surprisingly 337 00:16:48,240 --> 00:16:52,880 Speaker 1: long time. So there's some information they've been in the 338 00:16:52,880 --> 00:16:54,160 Speaker 1: finance club since they were eighteen. 339 00:16:54,480 --> 00:16:55,760 Speaker 2: Their frontal lobes aren't formed. 340 00:16:55,880 --> 00:16:57,960 Speaker 1: I hear you. I think it is a gamble. Yeah, 341 00:16:58,000 --> 00:17:00,240 Speaker 1: but also like both of the banks end of the 342 00:17:00,280 --> 00:17:02,760 Speaker 1: paramedic refirms, like you know, it's a pyramid. Like if 343 00:17:02,840 --> 00:17:04,080 Speaker 1: some of them don't work out, it's fine. 344 00:17:04,560 --> 00:17:08,240 Speaker 2: Every industry is a pyramid. Yeah, not everyone can be 345 00:17:08,280 --> 00:17:08,800 Speaker 2: a podcast. 346 00:17:09,080 --> 00:17:11,960 Speaker 1: Not every industry. This is like the AI thing where like, yeah, 347 00:17:12,040 --> 00:17:16,520 Speaker 1: industries will stop being pyramids and all young people are doomed. Yeah, 348 00:17:16,560 --> 00:17:17,800 Speaker 1: we've got the last jobs. 349 00:17:18,480 --> 00:17:22,000 Speaker 2: The United States inverted the food pyramid. Actually, did you 350 00:17:22,040 --> 00:17:22,359 Speaker 2: see that? 351 00:17:22,400 --> 00:17:23,920 Speaker 1: I did see that. I thought they like turned a 352 00:17:24,000 --> 00:17:25,840 Speaker 1: ninety degrees or weird. 353 00:17:25,920 --> 00:17:43,160 Speaker 2: It's upside down the points at the bottom. Drink whole milk. 354 00:17:46,920 --> 00:17:51,080 Speaker 2: So when we were talking about the list, Matt was like, 355 00:17:51,520 --> 00:17:53,720 Speaker 2: and this is fun because we won't talk much about politics, 356 00:17:53,720 --> 00:17:57,320 Speaker 2: but to talk a little bit about politics. Because President 357 00:17:57,359 --> 00:18:02,879 Speaker 2: Donald Trump man just tweet storm and truth social storm 358 00:18:03,040 --> 00:18:06,760 Speaker 2: on Wednesday of this week. One of the policy proposals 359 00:18:07,280 --> 00:18:11,200 Speaker 2: that he penned on truth Social was potentially banning institutional 360 00:18:11,280 --> 00:18:14,920 Speaker 2: investors from buying single family homes, which is a great 361 00:18:14,960 --> 00:18:15,440 Speaker 2: sound bite. 362 00:18:15,560 --> 00:18:21,719 Speaker 1: You know what Donald Trump doesn't like, tell me landlords. Yeah, Like, 363 00:18:21,960 --> 00:18:25,280 Speaker 1: imagine building a real estate empire and renting homes to people. 364 00:18:26,000 --> 00:18:27,240 Speaker 2: I can't, I can't. 365 00:18:27,800 --> 00:18:29,520 Speaker 1: No, it's forgotten. He did it. 366 00:18:29,960 --> 00:18:35,439 Speaker 2: This was interesting though, because like so many questions, but 367 00:18:35,960 --> 00:18:39,320 Speaker 2: people were content to just sell Blackstone shares and ask 368 00:18:39,400 --> 00:18:40,000 Speaker 2: questions later. 369 00:18:40,240 --> 00:18:41,080 Speaker 1: I have no questions. 370 00:18:41,119 --> 00:18:42,840 Speaker 2: I feel like you don't have anything, try not to 371 00:18:42,840 --> 00:18:46,040 Speaker 2: write about Like, yeah, I noticed. 372 00:18:45,720 --> 00:18:47,199 Speaker 1: Used to be that I would be like, you know, 373 00:18:47,359 --> 00:18:50,600 Speaker 1: some senator would introduce some legislative proposal, and I'd be like, yeah, 374 00:18:50,840 --> 00:18:53,760 Speaker 1: right about it when it happens, right, and like there 375 00:18:53,840 --> 00:18:57,560 Speaker 1: was like a gap in seriousness between a policy proposal 376 00:18:58,000 --> 00:19:01,040 Speaker 1: introduces legislation and like an actual that will affect people 377 00:19:01,760 --> 00:19:03,880 Speaker 1: and now it's like it's a truth social yeah, which 378 00:19:03,880 --> 00:19:05,680 Speaker 1: on the one hand seems like it would be further 379 00:19:05,920 --> 00:19:10,359 Speaker 1: removed from policy reality. But on the other hand, in fact, 380 00:19:10,400 --> 00:19:14,440 Speaker 1: this Trump administration has a track record of like actually 381 00:19:14,440 --> 00:19:16,560 Speaker 1: doing everything he tweets like a week later, so maybe 382 00:19:16,560 --> 00:19:17,120 Speaker 1: it'll be real. 383 00:19:17,440 --> 00:19:19,760 Speaker 2: Well, apparently Trump said in his post that he's going 384 00:19:19,800 --> 00:19:24,639 Speaker 2: to give more details at Dallas another amazing place for 385 00:19:24,920 --> 00:19:26,640 Speaker 2: populous affordability. 386 00:19:26,840 --> 00:19:28,840 Speaker 1: Right, It's just like it's perfect, no, And I'm not 387 00:19:28,840 --> 00:19:32,560 Speaker 1: even being like Dallas is like billionaires talking about populist economics, 388 00:19:32,560 --> 00:19:34,680 Speaker 1: like that's what it's for. Yeah, it's great, but yeah, 389 00:19:34,720 --> 00:19:37,320 Speaker 1: it's amazing. I don't know. This is like the sort 390 00:19:37,359 --> 00:19:41,639 Speaker 1: of like progressive SoundBite that progressive politicians have said for 391 00:19:41,720 --> 00:19:44,480 Speaker 1: years and that everyone kind of rolls their eyes and 392 00:19:44,520 --> 00:19:49,760 Speaker 1: says things like, actually, institutional single family landlords don't really 393 00:19:49,760 --> 00:19:51,360 Speaker 1: affect housing affordability. 394 00:19:51,480 --> 00:19:53,160 Speaker 2: No, it's like two percent of homes. 395 00:19:53,240 --> 00:19:54,959 Speaker 1: You know. I wrote the other day about like, if 396 00:19:55,000 --> 00:19:58,240 Speaker 1: you're a certain sort of like economically minded person, you 397 00:19:58,240 --> 00:20:01,520 Speaker 1: think things like people's wealth too concentrated in their home 398 00:20:01,560 --> 00:20:03,280 Speaker 1: and it would be nice to be able to diversify that. 399 00:20:03,720 --> 00:20:05,320 Speaker 1: And then the simple answer to like how could you 400 00:20:05,320 --> 00:20:08,000 Speaker 1: diversify that would be like rent your home, and so 401 00:20:08,480 --> 00:20:11,280 Speaker 1: you know, there's like a lot of good things to 402 00:20:11,320 --> 00:20:14,680 Speaker 1: be said for Blackstone owning some houses and recommend to people, 403 00:20:15,040 --> 00:20:19,440 Speaker 1: and the negative consequences of like that raises prices are 404 00:20:19,800 --> 00:20:24,119 Speaker 1: kind of hard to actually see in reality, but it 405 00:20:24,280 --> 00:20:27,240 Speaker 1: sounds great to some people, and so politicians like to 406 00:20:27,280 --> 00:20:27,560 Speaker 1: say it. 407 00:20:27,720 --> 00:20:30,399 Speaker 2: That's the thing, like this won't go very far and 408 00:20:30,440 --> 00:20:31,760 Speaker 2: trying to address affordability. 409 00:20:31,800 --> 00:20:33,439 Speaker 1: But a lot of the midterms, it's a thing you 410 00:20:33,440 --> 00:20:34,160 Speaker 1: could say. 411 00:20:34,040 --> 00:20:37,119 Speaker 2: Yeah, absolutely, and he's saying it loudly here just in 412 00:20:37,200 --> 00:20:40,119 Speaker 2: a side. It is really interesting how much Americans fetishize 413 00:20:40,520 --> 00:20:43,480 Speaker 2: owning homes. Because I rent right now, I want to 414 00:20:43,520 --> 00:20:46,560 Speaker 2: own I can't really articulate why, because I do the 415 00:20:46,720 --> 00:20:50,120 Speaker 2: calculations on like my monthly payments, and I would theoretically 416 00:20:50,160 --> 00:20:54,200 Speaker 2: be better off renting right now. But I just want, God, 417 00:20:54,240 --> 00:20:56,040 Speaker 2: I want to own it. I want to own property. 418 00:20:56,400 --> 00:20:59,000 Speaker 1: Yeah, well so does Blasstone. 419 00:20:59,280 --> 00:20:59,960 Speaker 2: God. 420 00:21:00,320 --> 00:21:03,679 Speaker 1: Anyway, they have the same motivations. Yeah, they're just a 421 00:21:03,680 --> 00:21:04,639 Speaker 1: person like you. 422 00:21:04,760 --> 00:21:07,159 Speaker 2: Yeah, but to the mid terms. Not to talk too 423 00:21:07,240 --> 00:21:11,919 Speaker 2: much about politics, you can, okay, Matt ear muffs just 424 00:21:12,000 --> 00:21:15,119 Speaker 2: thirty six percent of Americans so that they approved of 425 00:21:15,200 --> 00:21:19,240 Speaker 2: Drum's job performance. In a Gallop poll, nearly half of 426 00:21:19,280 --> 00:21:23,840 Speaker 2: adults describe the current economic conditions as poor. So this 427 00:21:23,960 --> 00:21:25,280 Speaker 2: is interesting, I think that. 428 00:21:25,320 --> 00:21:26,679 Speaker 1: But it's a thing you can. 429 00:21:26,560 --> 00:21:29,920 Speaker 2: Say absolutely, And it's also interesting to see. I've heard 430 00:21:29,920 --> 00:21:32,159 Speaker 2: some people call this a trial balloon. I mean you think. 431 00:21:32,000 --> 00:21:37,240 Speaker 1: About they've been in a lot of like housing trivealloons. Yes, yeah, yeah, 432 00:21:37,280 --> 00:21:37,560 Speaker 1: why not? 433 00:21:37,760 --> 00:21:40,520 Speaker 2: Oh yeah, that was that was shouted down. 434 00:21:40,640 --> 00:21:41,399 Speaker 1: That's really amazing. 435 00:21:41,480 --> 00:21:43,520 Speaker 2: I haven't necessarily it was like, oh yeah, that's a 436 00:21:43,560 --> 00:21:46,640 Speaker 2: good idea. No, no, that was panned pretty universally. 437 00:21:46,640 --> 00:21:48,400 Speaker 1: I want to said anything good about this, but it's 438 00:21:48,440 --> 00:21:50,840 Speaker 1: like it seems somehow less of a trial balloon, but 439 00:21:50,880 --> 00:21:52,840 Speaker 1: only a little bit less of a triballoon. I mean, 440 00:21:52,840 --> 00:21:54,640 Speaker 1: he's talking about it than DAAs. He's got a whole 441 00:21:54,640 --> 00:21:56,840 Speaker 1: set of economic analyzies. 442 00:21:56,400 --> 00:21:58,920 Speaker 2: The ago you just did a little. But it's hard 443 00:21:58,960 --> 00:22:02,000 Speaker 2: to argue the case for like why Blackstone should own 444 00:22:02,080 --> 00:22:03,280 Speaker 2: so many single family homes. 445 00:22:03,320 --> 00:22:06,040 Speaker 1: What do you mean case? 446 00:22:06,160 --> 00:22:10,360 Speaker 2: What is the benefit? Like if you have money Blackstone does? 447 00:22:11,160 --> 00:22:13,960 Speaker 1: Yeah, but you know, actually, so the one actual answer 448 00:22:14,000 --> 00:22:16,200 Speaker 1: to that is that everyone thinks that the actual problem 449 00:22:16,240 --> 00:22:20,399 Speaker 1: of home affordability is building homes. And if you're a 450 00:22:20,400 --> 00:22:24,000 Speaker 1: home increasing supply, and if you're a home builder and 451 00:22:24,080 --> 00:22:28,159 Speaker 1: like you know there is demand, for instance, because a 452 00:22:28,200 --> 00:22:32,040 Speaker 1: well capitalized, giant institution wants to buy homes, then you'll 453 00:22:32,040 --> 00:22:35,879 Speaker 1: build homes if you don't know there's demand, if you're like, well, 454 00:22:36,160 --> 00:22:38,080 Speaker 1: maybe these people will be able to get mortgages. But 455 00:22:38,160 --> 00:22:41,560 Speaker 1: like the path of interest rates is completely baffling, and 456 00:22:42,160 --> 00:22:45,800 Speaker 1: the mortgage regulation is completely baffling, and the reprivatization of 457 00:22:45,840 --> 00:22:48,159 Speaker 1: Fanny and Freddy is completely baffling. I have no idea 458 00:22:48,359 --> 00:22:50,199 Speaker 1: if people will be able to afford homes. Maybe you 459 00:22:50,200 --> 00:22:52,440 Speaker 1: build for your homes. You know, black Stone's going to 460 00:22:52,440 --> 00:22:53,399 Speaker 1: buy the homes you build homes. 461 00:22:53,680 --> 00:22:55,760 Speaker 2: You know there's a lot of demand though for housing 462 00:22:55,840 --> 00:22:56,840 Speaker 2: just at a lower price. 463 00:22:57,480 --> 00:23:00,400 Speaker 1: Yeah, you know that people want houses. But that's quite 464 00:23:00,400 --> 00:23:02,040 Speaker 1: the same as saying there's a lot of demand, right 465 00:23:02,520 --> 00:23:04,280 Speaker 1: the demand implies capital. 466 00:23:04,800 --> 00:23:07,639 Speaker 2: Yeah, that's fair. I will say I tried to like 467 00:23:07,720 --> 00:23:10,119 Speaker 2: make this personal to me, as I always try to 468 00:23:10,240 --> 00:23:13,160 Speaker 2: with every single issue. This Brownstone I want to buy 469 00:23:13,200 --> 00:23:13,840 Speaker 2: and Hoboken. 470 00:23:15,680 --> 00:23:18,959 Speaker 1: Like one thing is like I think people around America 471 00:23:19,000 --> 00:23:21,520 Speaker 1: have intuitions that housing presses are too high. But like 472 00:23:22,040 --> 00:23:24,440 Speaker 1: Blackstone doesn't own a lot of the houses, the Brownstones 473 00:23:24,480 --> 00:23:26,920 Speaker 1: and Hobo. I know that is a different afford to 474 00:23:27,160 --> 00:23:27,639 Speaker 1: be pretty. 475 00:23:27,760 --> 00:23:30,640 Speaker 2: I'd be pretty cheesed off if you know Steve Sworsman 476 00:23:30,760 --> 00:23:31,360 Speaker 2: beat me there. 477 00:23:31,760 --> 00:23:33,160 Speaker 1: Yeah, but he won't. 478 00:23:33,240 --> 00:23:34,439 Speaker 2: Yeah, I'll be fine. 479 00:23:34,880 --> 00:23:38,880 Speaker 1: No, you won't be in Brownstones in New York. 480 00:23:39,000 --> 00:23:42,600 Speaker 2: Or the New York elbowing other young couples out of 481 00:23:42,640 --> 00:23:42,880 Speaker 2: the way. 482 00:23:43,359 --> 00:23:45,600 Speaker 1: Plenty of all cash buyers, some of them work at Blackstone. 483 00:23:45,680 --> 00:23:49,040 Speaker 2: Yeah, it's crazy. I'm sorry to bring this up. But 484 00:23:49,160 --> 00:23:53,639 Speaker 2: another thing that Trump tweeted, or that President Donald Trump 485 00:23:53,680 --> 00:24:00,200 Speaker 2: posted on truth Social Defense contractors buybacks not cool anymore more. 486 00:24:00,560 --> 00:24:04,399 Speaker 1: No stock buybacks also classic left populist theory. 487 00:24:04,680 --> 00:24:06,800 Speaker 2: That's the thing. I mean, you just if you looked 488 00:24:06,800 --> 00:24:09,439 Speaker 2: at these posts in you would say this is not 489 00:24:09,480 --> 00:24:13,480 Speaker 2: a Republican proposing these ideas. 490 00:24:14,040 --> 00:24:16,680 Speaker 1: I will say, like one theory of no stock buybacks 491 00:24:16,800 --> 00:24:19,760 Speaker 1: is that company should be spending that money on capex instead. 492 00:24:20,000 --> 00:24:23,520 Speaker 1: And like you wouldn't necessarily see a progressive center saying 493 00:24:23,560 --> 00:24:26,440 Speaker 1: we need more capex on bombs, whereas that is what 494 00:24:26,480 --> 00:24:28,680 Speaker 1: Donald Trump is saying. But that's otherwise that's fair. 495 00:24:28,880 --> 00:24:33,199 Speaker 2: But within hours he also said that he wants to 496 00:24:33,280 --> 00:24:37,880 Speaker 2: boost the military's budget, so then defense stocks were soaring on. 497 00:24:40,400 --> 00:24:43,040 Speaker 1: Right. If you're a defense investor, you'd probably rather have 498 00:24:44,080 --> 00:24:46,120 Speaker 1: vast new weapons programs than stock buybacks. 499 00:24:46,680 --> 00:24:50,400 Speaker 2: Yeah, that's true. Anyway, that was a lot of fun. 500 00:24:50,480 --> 00:24:58,200 Speaker 1: Times and that was the Money Stuff Podcast. 501 00:24:58,480 --> 00:25:00,560 Speaker 2: I'm Matt Levine and I'm Katie Greifeld. 502 00:25:00,800 --> 00:25:02,960 Speaker 1: You can find my work by subscribing to The Money 503 00:25:03,000 --> 00:25:04,960 Speaker 1: Stuff newsletter on Bloomberg dot. 504 00:25:04,760 --> 00:25:07,520 Speaker 2: Com, and you can find me on Bloomberg TV every 505 00:25:07,600 --> 00:25:10,760 Speaker 2: day on the Clothes between three and five pm Eastern. 506 00:25:11,480 --> 00:25:13,360 Speaker 1: We'd love to hear from you if you can send 507 00:25:13,400 --> 00:25:16,760 Speaker 1: an email to Moneypod at Bloomberg dot net, ask us 508 00:25:16,760 --> 00:25:18,760 Speaker 1: a question and we might answer it on the air. 509 00:25:19,119 --> 00:25:21,680 Speaker 2: You can also subscribe to our show wherever you're listening 510 00:25:21,760 --> 00:25:23,640 Speaker 2: right now and leave us a review. It helps more 511 00:25:23,640 --> 00:25:24,520 Speaker 2: people find the show. 512 00:25:24,960 --> 00:25:28,800 Speaker 1: The Money Stuff Podcast is produced by Anamazerakis and Moses One. 513 00:25:29,280 --> 00:25:31,560 Speaker 2: Our theme music was composed by Blake Maples. 514 00:25:32,080 --> 00:25:34,720 Speaker 1: Amy Keen is our executive producer. 515 00:25:34,880 --> 00:25:37,440 Speaker 2: And Sage Bauman is Bloomberg's head of Podcasts. 516 00:25:37,640 --> 00:25:40,119 Speaker 1: Thanks for listening to The Money Stuff Podcast. We'll be 517 00:25:40,160 --> 00:25:41,840 Speaker 1: back next week with more stuff.