WEBVTT - Bloomberg Businessweek Weekend - May 31st, 2024 0:00:02.440 --> 0:00:07.480 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.360 --> 0:00:13.240 This is Bloomberg BusinessWeek inside from the reporters and editors 0:00:13.280 --> 0:00:17.520 who bring you America's most trusted business magazine, plus global business, 0:00:17.560 --> 0:00:21.720 finance and tech news. The Bloomberg Business Week Podcast with 0:00:21.840 --> 0:00:25.640 Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:26.760 --> 0:00:29.840 Hi, everyone, Welcome to the Bloomberg Business Week Weekend podcast. 0:00:30.040 --> 0:00:32.800 Top of Mind. This week, former President Donald Trump was 0:00:32.840 --> 0:00:35.159 convicted on all thirty four counts in his New York 0:00:35.240 --> 0:00:38.360 hush money trial, a landmark jury verdict, making him the 0:00:38.400 --> 0:00:41.919 first former American president to be found guilty of felony crimes. 0:00:42.320 --> 0:00:45.360 His sentencing now set for July eleventh. All the details 0:00:45.400 --> 0:00:47.240 can be found on Bloomberg dot com and of course, 0:00:47.280 --> 0:00:48.320 on the Bloomberg terminal. 0:00:48.520 --> 0:00:51.800 Our focus is on presidential candidate Donald Trump, now that 0:00:51.880 --> 0:00:54.680 we are about five months away from the November US election, 0:00:55.120 --> 0:00:58.040 and on the concerns of some voters about Trump forever. 0:00:58.360 --> 0:01:00.560 We'll explain what that means in a moment. 0:01:00.680 --> 0:01:03.520 Plus, Jamie diamond says there could be held to pay 0:01:03.680 --> 0:01:06.919 if one all asset class sours. We talk private credit 0:01:06.959 --> 0:01:08.759 with the folks over at Moody's. 0:01:08.520 --> 0:01:11.720 And how money and markets really work in this economy. 0:01:12.040 --> 0:01:14.480 That's the title of a new book by financial educator 0:01:14.520 --> 0:01:18.200 commentator in Bloomberg Opinion contributor Kylas Scanlon. Now, if her 0:01:18.240 --> 0:01:20.600 name sounds familiar, it's because she coined the word and 0:01:20.640 --> 0:01:22.880 the whole concept of the vibe session. 0:01:23.000 --> 0:01:25.920 Yeah, great conversation coming up there. All of that to come. 0:01:25.959 --> 0:01:28.960 We begin with the November presidential race. As a rematch 0:01:29.000 --> 0:01:32.959 between Joe Biden and Donald Trump draws closer, political professionals 0:01:32.959 --> 0:01:36.880 are detecting an unusual concern for some undecided voters, the 0:01:36.920 --> 0:01:39.559 fears of not just four more years of Donald Trump, 0:01:39.800 --> 0:01:40.720 but Trump forever. 0:01:41.200 --> 0:01:43.520 And as far fetched as it may sound, the prospect 0:01:43.560 --> 0:01:45.720 of Donald Trump, should he find himself back in the 0:01:45.720 --> 0:01:49.680 Oval office and then never leaving, is weighing big time 0:01:49.680 --> 0:01:52.440 on the minds of some voters, so writes our Bloomberg 0:01:52.480 --> 0:01:56.080 BusinessWeek national correspondent Josh Green. His story featured in the 0:01:56.160 --> 0:01:59.240 latest edition of BusinessWeek Magazine, out on newstands now, on 0:01:59.280 --> 0:02:02.640 the Bloomberg Term and at Bloomberg dot com slash BusinessWeek. 0:02:02.880 --> 0:02:05.600 Josh is also the author of The Rebels Elizabeth Warren, 0:02:05.640 --> 0:02:08.239 Bernie Sanders, AOC and The Rise of the New Left, 0:02:08.480 --> 0:02:11.400 also author of Devil's Bargain, Steve Bannon, Donald Trump and 0:02:11.440 --> 0:02:13.000 the Storming of the Presidency. 0:02:13.280 --> 0:02:15.560 We spoke to Josh before the Trump verdict. 0:02:15.919 --> 0:02:19.400 I've been talking to a Republican and Democratic strategist recently 0:02:19.400 --> 0:02:22.000 who'd mentioned that they were seeing something strange in the 0:02:22.040 --> 0:02:24.520 focus groups and polls they were conducting, and that is 0:02:24.560 --> 0:02:27.840 that a lot of swing voters were worried that Trump 0:02:27.919 --> 0:02:30.440 was going to declare himself president for life if he's 0:02:30.480 --> 0:02:33.440 reelected in November. And as I did some reporting on 0:02:33.480 --> 0:02:35.720 the source of these worries, basically this is something that 0:02:35.760 --> 0:02:38.079 Trump likes to joke about. Of course, there was the 0:02:38.160 --> 0:02:40.639 January sixth riots that gave a lot of people pause. 0:02:41.160 --> 0:02:43.600 But it's a factor that I think isn't being paid 0:02:43.600 --> 0:02:47.240 a lot of attention to. But both Republican and Democratic 0:02:47.320 --> 0:02:49.960 strategists are seeing it and wondering if this is going 0:02:50.000 --> 0:02:52.119 to have an effect on the outcome in November. 0:02:52.520 --> 0:02:54.840 You know, it's interesting, and Josh, we don't certainly have 0:02:54.880 --> 0:02:57.600 to tell you, but this idea that Donald Trump will 0:02:57.639 --> 0:02:59.959 say something and people be like, well that's Donald Trump, 0:03:00.120 --> 0:03:02.400 you know what I mean, they're kind of dismissive. Is 0:03:02.440 --> 0:03:06.120 there something though different as he runs for a second 0:03:06.200 --> 0:03:07.320 go at the White House. 0:03:07.840 --> 0:03:09.040 Yeah, I think there are a couple of things. 0:03:09.040 --> 0:03:11.440 I mean, as you mentioned, the Trump people sort of 0:03:11.480 --> 0:03:13.639 laugh this off as this is just Trump being Trump. 0:03:13.639 --> 0:03:16.160 You know, he likes to say outrageous things to get 0:03:16.520 --> 0:03:18.640 a rise out of liberals. He's talked a little bit 0:03:18.639 --> 0:03:21.399 about well should I maybe serve three terms? But while 0:03:21.440 --> 0:03:23.200 a lot of people write it off as just Trump 0:03:23.240 --> 0:03:26.240 being Trump, this particular group of voters seems to be 0:03:26.280 --> 0:03:29.800 listening to it and worrying about it. And as strategists 0:03:29.800 --> 0:03:32.080 have kind of plumbed the reason for this, they've come 0:03:32.160 --> 0:03:35.200 up with some interesting theories, and the best one I 0:03:35.240 --> 0:03:37.400 heard was that it was really what was driving the 0:03:37.480 --> 0:03:42.520 sphere was the Supreme Court's decision to overturn Roe versus Wade. 0:03:43.120 --> 0:03:46.200 A Democratic strategist told me that what that did was 0:03:46.280 --> 0:03:50.280 convince a lot of ordinary voters that things they wouldn't 0:03:50.280 --> 0:03:55.160 have imagined possible, like Rovers' way being overturned or Trump 0:03:55.280 --> 0:03:58.760 abolishing term limit suddenly seemed real enough that these voters 0:03:58.760 --> 0:04:01.120 were worrying about it, and it seemed to be pushing 0:04:01.160 --> 0:04:03.440 at least some of them back into Joe Biden's camp. 0:04:03.560 --> 0:04:05.320 Well, you get into the piece that the idea of 0:04:06.040 --> 0:04:09.800 president serving only two terms, whether consecutive or not, hasn't 0:04:09.880 --> 0:04:12.760 been in the Constitution since the days of the Founding 0:04:12.800 --> 0:04:15.200 Fathers by any means. It was ratified in the nineteen 0:04:15.240 --> 0:04:19.320 fifties after FDR served more than two terms. Can you 0:04:19.360 --> 0:04:21.960 talk a little bit about the history of presidents since 0:04:22.040 --> 0:04:25.360 nineteen fifty talking about the potential repealed the twenty second 0:04:25.400 --> 0:04:27.360 Amendment or at least alluding to the idea of serving 0:04:27.360 --> 0:04:28.200 more than two terms. 0:04:28.360 --> 0:04:28.600 Yeah. 0:04:28.600 --> 0:04:30.200 Absolutely, I mean, as I did a kind of a 0:04:30.200 --> 0:04:33.320 deep dive in this piece, what was interesting was almost 0:04:33.400 --> 0:04:36.440 immediately when the twenty second after the twenty second Amendment 0:04:36.520 --> 0:04:39.960 was passed, popular presidents and their advisors in both parties 0:04:39.960 --> 0:04:42.440 have kind of objected to it. Ronald Reagan said in 0:04:42.520 --> 0:04:45.480 nineteen eighty seven he would like to overturn it. Democrats 0:04:45.480 --> 0:04:48.640 in the House of Representatives twice, once during Bill Clinton's 0:04:48.640 --> 0:04:53.000 presidency once during Barack Obama's tried to push legislation overturning it. 0:04:53.640 --> 0:04:56.960 So it's something that popular presidents sort of chafe at. 0:04:57.200 --> 0:05:00.320 But that being said, that the hurdle to actually get 0:05:00.320 --> 0:05:04.000 it overturned in abolished urn onm It's is almost unthinkably difficult. 0:05:04.839 --> 0:05:08.719 It would require large majorities in both houses of Congress, 0:05:08.720 --> 0:05:12.599 that would require large majorities of state legislatures to approve it. 0:05:12.640 --> 0:05:15.479 So it's not something that's plausibly going to happen. And 0:05:15.560 --> 0:05:19.039 yet still people have learned that Trump is a norm breaker. 0:05:19.600 --> 0:05:22.200 It's something that gives them pause and it's weighing on 0:05:22.240 --> 0:05:23.920 them as they make their decision on who to vote 0:05:23.960 --> 0:05:24.640 for in November. 0:05:24.680 --> 0:05:26.600 Hey, Josh, there are focus groups, and then there are 0:05:26.640 --> 0:05:28.320 focus groups by those who have been doing them for 0:05:28.360 --> 0:05:30.240 some time that maybe you sit up a little bit 0:05:30.279 --> 0:05:32.600 straight and take note, like I just do. Wonder is 0:05:32.640 --> 0:05:35.520 there something that just makes everybody kind of be like, 0:05:35.920 --> 0:05:37.880 wait a minute, there's something different this time around. 0:05:38.360 --> 0:05:40.800 Yeah, I think that's exactly what's going on. I mean, 0:05:40.839 --> 0:05:44.160 if you go back to twenty twenty and the January 0:05:44.200 --> 0:05:46.760 sixth uprising, it's sort of shaken a lot of people 0:05:46.800 --> 0:05:50.240 and made them realize that, well, maybe things aren't as 0:05:50.320 --> 0:05:53.400 smooth as we expect. Historically, when we conduct these focus 0:05:53.480 --> 0:05:56.760 groups and we throw out these kind of wild scenarios, 0:05:56.960 --> 0:05:59.520 voters usually push back and say, oh, that could never happen. 0:06:00.040 --> 0:06:01.920 I was able to sit in on a couple of 0:06:01.920 --> 0:06:04.080 these and sort of see this myself, and people are 0:06:04.120 --> 0:06:07.560 just much more willing to believe that crazy things can happen, 0:06:07.760 --> 0:06:09.719 and that maybe one of those crazy things will be 0:06:09.760 --> 0:06:14.279 Trump declaring himself president for life. As implausible as that sounds, 0:06:14.279 --> 0:06:15.280 I think to most voters. 0:06:15.360 --> 0:06:17.640 Well, it was struck by a woman who you spoke 0:06:17.680 --> 0:06:20.840 to who actually said that she would vote for Biden 0:06:21.000 --> 0:06:23.520 even if he is in a coma, despite the fact 0:06:23.560 --> 0:06:26.799 that back in twenty sixteen she voted for former President 0:06:26.839 --> 0:06:29.480 Trump during that election. Talk to me a little bit 0:06:29.480 --> 0:06:32.200 about her thinking, Josh, and how this could move the 0:06:32.200 --> 0:06:33.760 needle with the undecided voters. 0:06:34.480 --> 0:06:37.080 Yeah, Well, the people I was focusing on in this 0:06:37.120 --> 0:06:40.000 piece really were that narrow group of undecided voters who 0:06:40.000 --> 0:06:42.799 are going to decide the election. A lot of committed 0:06:42.839 --> 0:06:45.920 Republicans like it when Trump talks about abolishing term limits. 0:06:46.440 --> 0:06:49.359 A lot of Democrats like to get upset about it, 0:06:49.400 --> 0:06:51.839 but their votes aren't really up for grabs on either side. 0:06:51.839 --> 0:06:54.240 So the focus of these focus groups and the voters 0:06:54.279 --> 0:06:57.560 that I talked to were people who had either been 0:06:58.040 --> 0:07:01.280 former Trump voters former Biden voters, were now undecided. 0:07:01.720 --> 0:07:02.119 The woman. 0:07:02.200 --> 0:07:04.960 You mentioned, Laura McCammon as a grandmother in Wisconsin I 0:07:05.040 --> 0:07:08.000 talked to voted for Trump in twenty sixteen, but as 0:07:08.040 --> 0:07:12.440 she's witnessed January sixth, she's listened to, you know, maga 0:07:12.560 --> 0:07:17.240 media figures like Steve Bannon talk about multiple terms. It 0:07:17.360 --> 0:07:20.080 scared her into deciding that she wouldn't risk another vote 0:07:20.120 --> 0:07:22.320 for Donald Trump. And she told me, as you said, 0:07:22.360 --> 0:07:24.960 she's planning to vote for Biden in November no matter what. 0:07:25.720 --> 0:07:28.440 Hey, you know, while we have you, and one thing 0:07:28.480 --> 0:07:30.080 we wanted to ask you, and this was certainly a 0:07:30.120 --> 0:07:33.000 story that we've been talking about this week a lot, 0:07:33.080 --> 0:07:36.520 and this has to do with Donald Trump. A video 0:07:36.640 --> 0:07:40.560 posted to his social media account, the report Yeah to 0:07:40.600 --> 0:07:43.640 his that referenced a unified Reich as a potential news 0:07:43.640 --> 0:07:46.720 headline if you won a second term. You know, Devil's 0:07:46.720 --> 0:07:50.720 Bargain bestseller. You know, you really got inside Steve Bannon 0:07:51.040 --> 0:07:53.800 and the road to the White House for Donald Trump 0:07:53.840 --> 0:07:57.240 the first go round. How are you thinking about some 0:07:57.400 --> 0:08:01.040 of the terminology that's being you the rhetoric that's being 0:08:01.160 --> 0:08:02.880 used by Donald Trump. 0:08:04.040 --> 0:08:06.160 Well, this is something that we've seen going all the 0:08:06.160 --> 0:08:08.520 way back to Trump's first run in twenty fifteen and 0:08:08.560 --> 0:08:11.440 twenty sixteen that kind of winking at the far right, 0:08:11.600 --> 0:08:16.680 either through phrases or memes or videos or what have you. 0:08:17.360 --> 0:08:19.360 I don't know whether this was intentional or not, but 0:08:19.440 --> 0:08:23.760 you know, given Trump's background, given the praise he heaped 0:08:23.760 --> 0:08:27.239 on some of the Charlottesville protesters in twenty seventeen, another 0:08:27.280 --> 0:08:32.480 earlier controversy over anti Semitism, It's something that people in 0:08:32.520 --> 0:08:34.080 the press and people in the elector I think are 0:08:34.160 --> 0:08:36.200 very alert to. So something like this pops up in 0:08:36.200 --> 0:08:39.000 a Trump video, you see the media pouncing, you see 0:08:39.040 --> 0:08:43.200 the attention to it, and it's something that the Trump campaign, 0:08:43.280 --> 0:08:47.080 either intentionally or unintentionally, hasn't really managed to fix and 0:08:47.120 --> 0:08:50.640 bottle up and kind of clean up their campaign. But 0:08:50.679 --> 0:08:52.520 I think we can see based on this it's something 0:08:52.559 --> 0:08:54.199 that we're going to have to keep an eye on going. 0:08:54.040 --> 0:08:56.720 Forward, right, and certainly those undecided voters are keeping an 0:08:56.760 --> 0:08:59.840 eye on too. That maybe explains what you just talked 0:08:59.840 --> 0:09:03.320 to in your story. Hey Bloomberg, Bloomberg BusinessWeek national correspondent 0:09:03.360 --> 0:09:04.800 Josh Green, Josh, thank you so much. 0:09:05.720 --> 0:09:09.240 You're listening to the Bloomberg Business Week podcast. Catch us 0:09:09.280 --> 0:09:12.559 Live weekday afternoons from two to five pm. Easter Listen 0:09:12.600 --> 0:09:14.760 on Apple car Play and then Brout Auto with a 0:09:14.760 --> 0:09:18.439 Bloomberg Business app or watch us live on YouTube. 0:09:19.080 --> 0:09:22.679 Also this past week, JP Morgan CEO Jamie Diamond says 0:09:22.720 --> 0:09:26.000 he expects problems to emerge in private credit and warned 0:09:26.040 --> 0:09:28.280 that there could be hell to pay. That's a quote, 0:09:28.440 --> 0:09:32.440 particularly as retail clients gain access to the booming asset class. 0:09:32.679 --> 0:09:35.360 JP Morgan and other lenders have been competing with the 0:09:35.559 --> 0:09:39.240 one point seven trillion dollar private credit industry, with giants 0:09:39.240 --> 0:09:42.840 such as Apollo Global Management taking on ever larger deals. 0:09:43.240 --> 0:09:46.040 We got an update and talked risks with on Arsov, 0:09:46.200 --> 0:09:49.560 global head of Private Credit and Financial Institutions at Moody's 0:09:49.559 --> 0:09:50.480 Investor Service. 0:09:50.800 --> 0:09:53.800 Everybody wants a piece of the action, meaning either to 0:09:53.880 --> 0:09:59.040 invest in the business or build a business, and we 0:09:59.640 --> 0:10:03.120 went when the business is relatively mature, and particularly now 0:10:03.160 --> 0:10:05.080 with the opening of the leverage finance market and I'm 0:10:05.080 --> 0:10:08.840 talking about direct lending specifically, we are worried that created 0:10:09.040 --> 0:10:12.080 terms will suffer and eventually there will be deals who 0:10:12.120 --> 0:10:14.880 are done maybe less prudentially. When there was less competition, 0:10:14.960 --> 0:10:17.720 particularly between the public and the product markets and leverage lending. 0:10:18.200 --> 0:10:21.280 So we are concerned and we're seeing actually created terms 0:10:21.320 --> 0:10:26.800 of seriation. We are seeing competition for talent as well, 0:10:27.080 --> 0:10:29.400 and at the same time a lot of dry powder 0:10:29.520 --> 0:10:31.960 being raised that has to be deployed and maybe deploy 0:10:32.000 --> 0:10:34.240 the terms that are going to be less favorable for 0:10:34.320 --> 0:10:36.559 credators in the near term and media term. 0:10:36.600 --> 0:10:38.840 All right, so bummer for the creditors, right, the folks, 0:10:38.880 --> 0:10:40.960 you need to borrow the money. But having said that, 0:10:41.040 --> 0:10:43.559 as we kicked it off with Anna, the idea that 0:10:43.640 --> 0:10:45.760 so many people want to be a part of it. 0:10:45.800 --> 0:10:48.080 Doesn't that I'm playing devil's advocate a little bit, But 0:10:48.120 --> 0:10:50.520 doesn't that kind of spread around the risk in the 0:10:50.559 --> 0:10:54.280 private credit market so that there's not just one entity, 0:10:54.440 --> 0:10:57.480 one lending entity, if you will, that's kind of stuck 0:10:57.480 --> 0:10:59.160 holding the bag if things go wrong. 0:11:00.080 --> 0:11:03.440 It is Diversification is always good at risks. The issue 0:11:03.520 --> 0:11:07.000 is that our statistics have shown that the biggest fundraising 0:11:07.040 --> 0:11:08.600 actually is going now. 0:11:08.320 --> 0:11:10.119 Increasingly to the largest players. 0:11:10.679 --> 0:11:15.920 So therefore this is becoming a more concentrated market. Sorry 0:11:15.960 --> 0:11:18.800 for this has been a more concentrated market, both on 0:11:18.840 --> 0:11:22.160 the private equity side, but particularly private credit fundraising is 0:11:22.240 --> 0:11:25.080 indeed going to the largest and more established players. So 0:11:25.120 --> 0:11:29.160 with that being said, we are diversification is very interesting 0:11:29.280 --> 0:11:32.560 because it is the same pension funds, an insurance companies 0:11:32.559 --> 0:11:34.959 who are investing on the private equity side, and also 0:11:35.000 --> 0:11:37.760 over sovereign funds are also investing in the private credit 0:11:37.880 --> 0:11:40.679 and so they're all increasing their exposure. The good thing 0:11:40.760 --> 0:11:44.079 is here this from a systemic risk perspective, these are 0:11:44.280 --> 0:11:47.600 different funds with different investment than underlying so there is 0:11:47.640 --> 0:11:50.680 not that big concentration of one type of a risk 0:11:50.720 --> 0:11:53.439 let's call it, you know, subprem mortgage, US suprem mortgage, 0:11:53.559 --> 0:11:56.560 or US office commercial real estate in one type of 0:11:56.600 --> 0:12:00.920 fund is diversified to many real moneys that have a 0:12:01.080 --> 0:12:06.440 long term perspective and long term investment horizon and also 0:12:06.600 --> 0:12:10.800 without necessarily immdiate liquidity call or risk. So that's the 0:12:10.800 --> 0:12:13.880 good about this market. You're absolutely right the specification of 0:12:13.880 --> 0:12:17.679 the investment community and also not imminent liquidity draw that 0:12:17.840 --> 0:12:19.400 these kind of investors are coming in with. 0:12:19.960 --> 0:12:22.200 When I'm wondering, are you going to come on our 0:12:22.200 --> 0:12:26.840 show and say that private credit is not hot? When 0:12:26.920 --> 0:12:27.560 does that happen? 0:12:28.720 --> 0:12:30.960 You know what? That's so if you think about where 0:12:30.960 --> 0:12:33.160 we are in what eating. A lot of us have 0:12:33.200 --> 0:12:36.280 been talking about private credit as equivalent to direct lending, 0:12:36.320 --> 0:12:39.280 and direct lending is just another middle market now expanding 0:12:39.280 --> 0:12:43.400 to larger middle market leverage trends business, but private credit 0:12:43.480 --> 0:12:45.959 is beyond that. There's a lot of talk about potentially 0:12:45.960 --> 0:12:49.040 the abs private credit market, which you know, if you 0:12:49.080 --> 0:12:52.320 listen to various pondents in anywhere between ten and forty trivia, 0:12:52.480 --> 0:12:56.079 any kind of asset from any bank that potentially can 0:12:56.120 --> 0:12:59.679 be sold. Is that auto, is that aircraft receivables, is 0:12:59.679 --> 0:13:03.680 that actually data centers or explained as even you know, 0:13:03.720 --> 0:13:06.760 commercial real estate that the potentially can be packaged in 0:13:06.880 --> 0:13:11.120 a private securitizations that will have basically be deployed into 0:13:11.160 --> 0:13:14.440 the kind of the investner community, same insurance companies, pension funds, 0:13:14.440 --> 0:13:17.720 summer funds. So therefore, if you take a broader picture 0:13:17.720 --> 0:13:20.400 of private credit or any credit provision that's not done 0:13:20.400 --> 0:13:23.280 by the banks but financing our economy, that means that 0:13:23.360 --> 0:13:25.439 this is going to be here to stay for quite 0:13:25.480 --> 0:13:25.960 a long time. 0:13:26.120 --> 0:13:30.280 So Moody's, we know who you are, and you guys 0:13:30.400 --> 0:13:33.560 look at these things and try to assess risk. So 0:13:33.600 --> 0:13:36.440 where's the risk and the private credit market today. 0:13:36.400 --> 0:13:41.959 So the risks are really again they are mostly housed 0:13:42.160 --> 0:13:47.320 again within institutional investors that are sophisticated investors and the 0:13:47.400 --> 0:13:50.160 sub funds and again pension funds have the largest part 0:13:50.200 --> 0:13:54.040 of this, then insurance companies, then sovereign funds. The growth 0:13:54.120 --> 0:13:57.920 into retail funds and is what we are being raising 0:13:58.240 --> 0:14:01.600 as a particular concern. Look at where the new BBC 0:14:01.679 --> 0:14:06.520 Information and Business Development companies for benefit of your of 0:14:06.640 --> 0:14:11.240 your viewers here is that there is like the largest 0:14:11.240 --> 0:14:13.360 funds that have been grown is with retail or high 0:14:13.440 --> 0:14:16.720 net worth money. And the question there is these type 0:14:16.760 --> 0:14:20.280 of funds have a different kind of liquidity calls if 0:14:20.280 --> 0:14:22.880 you were, an ability for retail investors to basically call 0:14:22.920 --> 0:14:25.360 their money on a quarterly basis, right, And that's where 0:14:25.360 --> 0:14:27.880 the biggest growth has been. So one can say, you 0:14:27.920 --> 0:14:30.920 can be Teble's advocate, Well, shouldn't retail and high netword 0:14:30.960 --> 0:14:34.160 individual also benefit from the growth of private markets. 0:14:33.800 --> 0:14:35.280 And the answer to that is of course. 0:14:35.520 --> 0:14:38.240 But the second one it's done in the prudential way 0:14:38.720 --> 0:14:42.000 sufficiently with the right disclosure, so afterwards they really know 0:14:42.040 --> 0:14:45.240 what they're getting and then they cannot get their money overnight. 0:14:45.480 --> 0:14:47.120 It's so funny that you said this. I was just 0:14:47.120 --> 0:14:50.560 having a discussion with someone in preparation for a panel, 0:14:50.640 --> 0:14:54.160 and this whole idea of even a credited investors, do 0:14:54.240 --> 0:14:57.720 they understand liquid versus ill liquid? 0:14:57.880 --> 0:14:58.040 Right? 0:14:58.160 --> 0:15:01.320 Because private credit not as long liquid is certainly kind 0:15:01.320 --> 0:15:04.400 of your bread and butter investments, and so do they 0:15:04.640 --> 0:15:08.560 understand going into one of them, or going into a 0:15:08.560 --> 0:15:10.480 private credit fund that if they need the money or 0:15:10.480 --> 0:15:13.000 want the money, it's not so easy to pull out? Correct? 0:15:13.360 --> 0:15:17.360 Exactly? So typically how these fonsor are orchestrated. 0:15:16.920 --> 0:15:18.440 And just got about thirty seconds. 0:15:18.520 --> 0:15:20.880 Yeah, yes, you can have a quarterly you know, small 0:15:20.920 --> 0:15:23.520 portion of liquidity is funds that have established or beck 0:15:23.600 --> 0:15:25.600 in this space have a provision of bank clients to 0:15:25.640 --> 0:15:29.040 provide for that and more liquid access. But not the 0:15:29.120 --> 0:15:31.480 point being is that investors need to really be aware 0:15:31.560 --> 0:15:33.560 that this is any liquid access and they're locked for 0:15:33.640 --> 0:15:35.560 some period of time and they cannot take their money back, 0:15:35.560 --> 0:15:38.320 and growth in that area can create disclosure risks. 0:15:38.800 --> 0:15:40.440 Risks that's what the fonds to watch for. 0:15:40.800 --> 0:15:43.840 Yeah, it's just, you know, certainly a topic that fascinates 0:15:43.880 --> 0:15:46.080 us in a big way. Put a private credit story 0:15:46.080 --> 0:15:48.440 on the most on the Bloemberg, and it tends to 0:15:48.480 --> 0:15:50.200 be among the most right a. 0:15:50.120 --> 0:15:54.480 Million bucks a year salary. Some of those folks the. 0:15:54.480 --> 0:15:57.320 Firm, Anna are so global head of private credit financial 0:15:57.360 --> 0:16:00.160 Institutions at Moody's Investors Service, always fund to check and 0:16:00.200 --> 0:16:01.440 with you really appreciate it. 0:16:02.880 --> 0:16:06.760 You're listening to the Bloomberg Business Week podcast. Listen live 0:16:06.840 --> 0:16:10.200 each weekday starting at two pm Easter on Applecarplay and 0:16:10.200 --> 0:16:13.200 Android Auto with the Bloomberg Business app. You can also 0:16:13.280 --> 0:16:16.480 listen live on Amazon Alexa from our flagship New York 0:16:16.520 --> 0:16:19.920 station Just say Alexa Play Bloomberg eleven thirty. 0:16:21.320 --> 0:16:24.160 Dell was an interesting stock this week, closing at a 0:16:24.240 --> 0:16:28.000 record before earnings and then plummeting after earnings after its 0:16:28.040 --> 0:16:31.400 first revenue increased since twenty twenty two wasn't enough to 0:16:31.440 --> 0:16:35.760 impress investors high expectations for the company's AI server business. 0:16:36.160 --> 0:16:39.120 We recently heard how Dell is expanding its AI factory 0:16:39.400 --> 0:16:43.200 with Nvidia to include new servers, edge workstations, solutions and 0:16:43.320 --> 0:16:47.560 services advancements that speed AI adoption and innovation. You may 0:16:47.560 --> 0:16:50.040 recall to you that CEO Michael Dell has talked about 0:16:50.080 --> 0:16:54.040 aipcs being quote pretty standard in twenty twenty five. 0:16:54.160 --> 0:16:56.680 I will say some industry watchers and analysts are a 0:16:56.680 --> 0:16:59.560 little suspect about not just for Dell, but the whole 0:16:59.600 --> 0:17:01.400 thing out AI PCs. 0:17:01.560 --> 0:17:03.400 Maybe AI phones come sooner, yeah. 0:17:03.240 --> 0:17:05.680 Exactly, and maybe from Apple all right. In general, though, 0:17:05.720 --> 0:17:07.600 we wanted to hear more about what Dell is up 0:17:07.680 --> 0:17:10.119 to when it comes to AI, which you know, has 0:17:10.160 --> 0:17:12.080 been around for a long time, they've been working on it. 0:17:12.320 --> 0:17:14.720 For that, we turned to John Rose, he's Global Chief 0:17:14.760 --> 0:17:17.000 Technology Officer at Dell Technologies. 0:17:17.240 --> 0:17:19.520 We spoke to him before the release of Dell's latest 0:17:19.520 --> 0:17:20.200 earnings report. 0:17:20.520 --> 0:17:23.840 Last year, the first year of the AHI era, you know, 0:17:24.160 --> 0:17:26.639 I think most enterprises were trying to figure out what 0:17:26.720 --> 0:17:30.160 should they do, and largely most of the large enterprises 0:17:30.160 --> 0:17:32.439 did a lot of experimentation. This year is different. This 0:17:32.560 --> 0:17:36.600 year many of those initial experiments which we're really trying 0:17:36.600 --> 0:17:39.080 to figure out where to apply this technology for the 0:17:39.080 --> 0:17:41.480 best return. You know, if you're an enterprise, you could 0:17:41.480 --> 0:17:44.040 apply aid to anything, but if you apply it to 0:17:44.160 --> 0:17:46.560 your supply chain or your product development cycle, or something 0:17:46.560 --> 0:17:49.359 that really moves the needle from an economic perspective, that'll 0:17:49.359 --> 0:17:52.280 have a bigger impact. So I think today most enterprises 0:17:52.320 --> 0:17:55.240 are triangulating on where to apply it, which then gets 0:17:55.280 --> 0:17:58.240 them to the discussion of how to apply it. And 0:17:57.800 --> 0:18:00.199 that's where you know, the panel we add when we 0:18:00.200 --> 0:18:02.879 were chatting kind of went, which is, this is not 0:18:03.359 --> 0:18:07.119 a workload that's sitting on the side used by three people. 0:18:07.160 --> 0:18:09.119 This is the center of your enterprise. It's going to 0:18:09.200 --> 0:18:11.320 run NonStop, seven x twenty four. It's going to power 0:18:11.400 --> 0:18:14.040 your sales process, is going to power your customer satisfaction. 0:18:14.520 --> 0:18:18.000 And so choosing the right place to run it, whether 0:18:18.320 --> 0:18:20.359 you know that gives you the best economic outcome, the 0:18:20.359 --> 0:18:23.160 best control, doesn't get you into compliance and regulatory challenges, 0:18:23.520 --> 0:18:26.080 is really the dialogue that's happening now. And so a 0:18:26.080 --> 0:18:27.600 lot of the work we're doing that you mentioned on 0:18:27.640 --> 0:18:30.440 the intro around with our ECOSYSTM around Nvidia and Meta 0:18:30.480 --> 0:18:34.439 and everybody else, is how do we reduce the complexity 0:18:34.440 --> 0:18:36.280 to make that decision, How do we make it easier 0:18:36.320 --> 0:18:39.280 for people to get started, to not have to do everything, 0:18:39.640 --> 0:18:41.719 and to really get the platforms in place where they 0:18:41.760 --> 0:18:43.879 need them. In our opinion, one of the best places 0:18:43.920 --> 0:18:46.440 to do some of this stuff is clearly in their 0:18:46.440 --> 0:18:49.760 own owned infrastructure. One it tends to be a CAPEX model. 0:18:49.760 --> 0:18:52.600 And two, it's in your control and it's much more predictable. 0:18:52.680 --> 0:18:52.920 John. 0:18:52.920 --> 0:18:55.479 For years, we've heard about the cloud being what's nimble 0:18:55.640 --> 0:18:58.280 and the cloud being the place that we can do 0:18:58.359 --> 0:19:02.080 this stuff in it secure, cure do this stuff for 0:19:02.280 --> 0:19:05.639 less expensive. I'm wondering the shift on premise is not 0:19:05.680 --> 0:19:08.119 a shift. It's been around for since before the cloud. 0:19:08.119 --> 0:19:10.240 But why are we seeing and talking so much about 0:19:10.240 --> 0:19:11.080 the shift right now? 0:19:11.880 --> 0:19:13.920 Yeah? This is Remember the cloud era was all about 0:19:13.920 --> 0:19:17.040 taking your existing workloads, your web servers, your email, your 0:19:17.080 --> 0:19:19.840 office productivity, and maybe trying to figure out a different 0:19:19.880 --> 0:19:22.000 way to operate if by a cloud wasn't just public cloud. 0:19:22.080 --> 0:19:24.919 The cloud model pervade everything, and so you know, the 0:19:24.960 --> 0:19:29.240 shift autonomous, automated elastic infrastructure happened with a set of 0:19:29.240 --> 0:19:30.520 applications that we understood. 0:19:30.560 --> 0:19:30.800 Well. 0:19:31.160 --> 0:19:33.560 The things we're building now look nothing like that. A 0:19:33.640 --> 0:19:37.440 large scale generative AI system for an enterprise is arguably 0:19:37.480 --> 0:19:40.560 the most demanding and complex workload you will create in 0:19:40.560 --> 0:19:44.239 your lifetime. And so you know, we're You could argue that, 0:19:44.280 --> 0:19:47.320 you know, an optics driven as a service model that 0:19:47.359 --> 0:19:49.560 gives you lots of agility, but you pay by the 0:19:49.640 --> 0:19:53.200