1
00:00:02,520 --> 00:00:07,040
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:07,920 --> 00:00:11,600
Speaker 2: Thank you so much to our Bloomberg radio and TV audience.

3
00:00:11,640 --> 00:00:14,280
Speaker 2: We are incredibly lucky right now to get a chance

4
00:00:14,360 --> 00:00:17,160
Speaker 2: with a man on the thirtieth anniversary of the firm

5
00:00:17,200 --> 00:00:20,160
Speaker 2: he co founded, oak Tree Capital Management, which has since

6
00:00:20,280 --> 00:00:24,439
Speaker 2: grown into the world's biggest distressed debt investor. Mark joined

7
00:00:24,520 --> 00:00:26,840
Speaker 2: us on a day of turmoil, after putting out a

8
00:00:26,840 --> 00:00:29,560
Speaker 2: memo about a month ago where he wrote, the bottom

9
00:00:29,560 --> 00:00:32,880
Speaker 2: line is that credit presently offers a better deal than equities,

10
00:00:33,159 --> 00:00:35,879
Speaker 2: even if today's spreads. Credit isn't a giveaway today, but

11
00:00:35,920 --> 00:00:39,400
Speaker 2: it offers a healthy absolute returns and is fairly priced.

12
00:00:39,440 --> 00:00:42,320
Speaker 2: Howard joins us right now. Howard, you wrote that a

13
00:00:42,400 --> 00:00:45,440
Speaker 2: month ago. The world has changed. We have seen the

14
00:00:45,440 --> 00:00:48,519
Speaker 2: market sell off. We have seen tariffs implemented that are

15
00:00:48,520 --> 00:00:51,200
Speaker 2: the highest levels that we've seen going back one hundred years.

16
00:00:51,680 --> 00:00:55,600
Speaker 2: Does your thesis still hold?

17
00:00:55,760 --> 00:00:58,959
Speaker 1: The yields on credit are still very healthy, and in fact,

18
00:00:59,040 --> 00:01:02,360
Speaker 1: credit yields a little more now than it did six

19
00:01:02,400 --> 00:01:05,120
Speaker 1: weeks ago when I wrote that memo. Then iiO bonds,

20
00:01:05,120 --> 00:01:07,800
Speaker 1: for example, we're yielding around seven point two today they're

21
00:01:07,800 --> 00:01:11,279
Speaker 1: close to eight, which means they went down in price,

22
00:01:12,000 --> 00:01:16,560
Speaker 1: producing a higher prospective return. Of course, the stock market

23
00:01:16,640 --> 00:01:21,720
Speaker 1: is well down since then. I don't know, fifteen sixteen,

24
00:01:21,800 --> 00:01:24,360
Speaker 1: seventeen percent. I haven't done the math yet, and it

25
00:01:24,480 --> 00:01:31,080
Speaker 1: keeps moving. But you know, obviously the state of the world,

26
00:01:31,120 --> 00:01:35,280
Speaker 1: which equity prices depend on, is completely in flux and

27
00:01:35,920 --> 00:01:40,319
Speaker 1: has been radically changed. Most investors think for the worse.

28
00:01:40,600 --> 00:01:44,560
Speaker 1: That's why prices are down. The question, of course, is

29
00:01:44,600 --> 00:01:49,880
Speaker 1: whether they're down too much, just right, or not enough.

30
00:01:50,400 --> 00:01:53,080
Speaker 1: And almost nobody can say.

31
00:01:53,560 --> 00:01:56,840
Speaker 2: How do you start to even measure something like a

32
00:01:56,920 --> 00:02:01,200
Speaker 2: potential paradigm shift like the tariffs that were announced earlier

33
00:02:01,200 --> 00:02:01,720
Speaker 2: this week.

34
00:02:03,920 --> 00:02:06,640
Speaker 1: Well, first of all, of course, measure is the wrong

35
00:02:06,680 --> 00:02:11,120
Speaker 1: word because that suggests some quantification, which is impossible. There's

36
00:02:11,120 --> 00:02:13,640
Speaker 1: nothing to measure. But how do you gauge? How do

37
00:02:13,720 --> 00:02:21,440
Speaker 1: you think about the changes? And this is the biggest

38
00:02:22,240 --> 00:02:27,120
Speaker 1: change in the environment that I've seen, probably in my career.

39
00:02:28,280 --> 00:02:32,440
Speaker 1: You know, we've gone from free trade or world trade

40
00:02:32,440 --> 00:02:43,600
Speaker 1: and globalization to this system which implies significant restrictions on

41
00:02:43,720 --> 00:02:49,880
Speaker 1: trade in every direction and a step toward.

42
00:02:49,639 --> 00:02:52,160
Speaker 3: Isolation for the United States.

43
00:02:52,600 --> 00:02:55,240
Speaker 1: I believe that the last eighty years since World War

44
00:02:55,240 --> 00:02:57,440
Speaker 1: Two have been the best economic period in the history

45
00:02:57,440 --> 00:03:01,079
Speaker 1: of mankind, and one of the major reasons was the

46
00:03:01,639 --> 00:03:05,280
Speaker 1: growth of trade. And I think that we have truly

47
00:03:05,320 --> 00:03:09,959
Speaker 1: had a rising tide that lifted all boats, and trade

48
00:03:10,040 --> 00:03:12,240
Speaker 1: was a big part of that. And everybody in the

49
00:03:12,280 --> 00:03:17,760
Speaker 1: audience should understand the role of trade. Every country, for example,

50
00:03:18,280 --> 00:03:26,080
Speaker 1: does some things better and worse, and worldwide welfare is

51
00:03:26,160 --> 00:03:29,520
Speaker 1: maximized when every country does the things that does best

52
00:03:29,560 --> 00:03:33,840
Speaker 1: and cheapest, and then sells them to the countries that

53
00:03:33,919 --> 00:03:36,640
Speaker 1: need them, which do other things and sell them to

54
00:03:36,720 --> 00:03:37,280
Speaker 1: other people.

55
00:03:37,360 --> 00:03:38,480
Speaker 3: That's how trade works.

56
00:03:39,000 --> 00:03:42,760
Speaker 1: And well, I don't know if it's politically correct, but

57
00:03:44,640 --> 00:03:46,960
Speaker 1: the good news is that the Italians make the pasta

58
00:03:47,040 --> 00:03:50,080
Speaker 1: and the Swiss make the watches. But if we stop

59
00:03:50,120 --> 00:03:52,840
Speaker 1: world trade and the Swiss have to make their own

60
00:03:52,880 --> 00:03:55,160
Speaker 1: pasta and the Italians have to make their own watches,

61
00:03:55,880 --> 00:03:59,600
Speaker 1: the world will probably be well, maybe arguably, people in

62
00:03:59,600 --> 00:04:01,480
Speaker 1: both contries will be a little worse off.

63
00:04:01,920 --> 00:04:06,080
Speaker 3: That's what we're talking about here, and we should not.

64
00:04:06,520 --> 00:04:10,040
Speaker 1: Underestimate the benefits that we've gotten from globalization. And among

65
00:04:10,080 --> 00:04:12,040
Speaker 1: other things, there was a twenty five year period which

66
00:04:12,040 --> 00:04:13,960
Speaker 1: I cited in one of my memos ten years ago

67
00:04:14,320 --> 00:04:18,320
Speaker 1: in which the cost of durables in the US went

68
00:04:18,360 --> 00:04:25,479
Speaker 1: down by forty percent in inflation adjusted terms. That kept

69
00:04:25,520 --> 00:04:30,280
Speaker 1: a lid on inflation here. It made goods available cheaply.

70
00:04:30,279 --> 00:04:31,880
Speaker 3: To all Americans.

71
00:04:32,480 --> 00:04:35,080
Speaker 1: If we don't have world trade, we don't have that benefit.

72
00:04:35,560 --> 00:04:40,440
Speaker 1: And the tarifts are designed to encourage production at home.

73
00:04:41,080 --> 00:04:46,760
Speaker 1: But who could imagine that most things produced in the

74
00:04:46,839 --> 00:04:49,839
Speaker 1: United States will be as cheap as they are coming

75
00:04:49,880 --> 00:04:53,000
Speaker 1: from abroad. In other words, things will cost more.

76
00:04:54,000 --> 00:04:54,600
Speaker 3: If that's the.

77
00:04:54,600 --> 00:04:58,640
Speaker 2: Case, does that mean that you see the inflationary regime

78
00:04:58,680 --> 00:05:01,800
Speaker 2: as being something that is more persistant or reversal of

79
00:05:01,839 --> 00:05:04,680
Speaker 2: what we saw the disinflation of the globalization.

80
00:05:06,080 --> 00:05:09,760
Speaker 1: Well, I think so there were financial benefits from globalization,

81
00:05:10,040 --> 00:05:15,479
Speaker 1: including keeping a lid on inflation. And you know, if

82
00:05:15,520 --> 00:05:21,880
Speaker 1: we hadn't bought our TV sets and appliances from abroad

83
00:05:22,160 --> 00:05:25,120
Speaker 1: in that twenty five year period at declining prices, what

84
00:05:25,160 --> 00:05:27,760
Speaker 1: would inflation have been And the answer is considerably more,

85
00:05:27,880 --> 00:05:31,760
Speaker 1: maybe not two, but maybe three four five. And so

86
00:05:32,920 --> 00:05:38,719
Speaker 1: you know, tariffs are an increased cost. Somebody has to

87
00:05:38,720 --> 00:05:43,760
Speaker 1: pay them, and you know, most people think the consumer

88
00:05:43,800 --> 00:05:47,080
Speaker 1: will pay them. There's some possibility that the importer or

89
00:05:47,160 --> 00:05:49,440
Speaker 1: the exporter will pay them or the government of the

90
00:05:49,480 --> 00:05:50,400
Speaker 1: exporting country.

91
00:05:51,480 --> 00:05:54,159
Speaker 3: But it's an increased cost.

92
00:05:56,800 --> 00:05:59,840
Speaker 1: The proceeds from which we'll go to the government, and

93
00:06:00,839 --> 00:06:04,320
Speaker 1: you know, will society be better off as a result.

94
00:06:04,920 --> 00:06:09,120
Speaker 2: When you're measuring how to decide the risk and reward

95
00:06:09,279 --> 00:06:12,680
Speaker 2: of given asset classes in this type of environment, that

96
00:06:12,760 --> 00:06:15,919
Speaker 2: could go in a multitude of different ways. How do

97
00:06:16,000 --> 00:06:20,760
Speaker 2: you understand where there's value, what a return is that

98
00:06:20,800 --> 00:06:23,880
Speaker 2: would justify a risk at a time when you know

99
00:06:23,960 --> 00:06:26,400
Speaker 2: potentially you could get seven, eight percent, nine percent with

100
00:06:26,480 --> 00:06:30,159
Speaker 2: credit with stocks that have delivered more than ten percent

101
00:06:30,160 --> 00:06:31,520
Speaker 2: for the past number of decades.

102
00:06:32,080 --> 00:06:36,720
Speaker 1: But going forward, I want to respond first to your

103
00:06:36,839 --> 00:06:41,560
Speaker 1: last sentence. Stocks have delivered an average of ten percent

104
00:06:41,600 --> 00:06:44,400
Speaker 1: a year for the last hundred years, but not when

105
00:06:44,440 --> 00:06:48,400
Speaker 1: the PE ratio was nineteen, and the PE ratio today

106
00:06:48,440 --> 00:06:51,480
Speaker 1: is probably nineteen. The average return has been sixteen, So

107
00:06:51,520 --> 00:06:55,880
Speaker 1: we can say that when the PE average, when the

108
00:06:55,880 --> 00:07:01,039
Speaker 1: PE ratio averages sixteen, the return average is ten. But

109
00:07:01,279 --> 00:07:05,840
Speaker 1: when the PE ratio is nineteen. My guess is, if

110
00:07:05,839 --> 00:07:08,400
Speaker 1: you look at history, if you bought the the S

111
00:07:08,440 --> 00:07:10,880
Speaker 1: and P when the PE ratio is nineteen, historically you

112
00:07:10,960 --> 00:07:13,760
Speaker 1: probably made let's say one to six percent a year

113
00:07:13,880 --> 00:07:16,160
Speaker 1: or two to seven percent a year someday, but's certainly

114
00:07:16,200 --> 00:07:20,960
Speaker 1: not ten. And so you know, what you pay matters,

115
00:07:21,240 --> 00:07:25,200
Speaker 1: and the price of the S and P is elevated

116
00:07:25,600 --> 00:07:30,320
Speaker 1: relative to historic levels, so you shouldn't expect historic returns.

117
00:07:30,360 --> 00:07:33,360
Speaker 2: Whereas in credit, one of your arguments is you can

118
00:07:33,520 --> 00:07:36,680
Speaker 2: expect to get that return because the default risk isn't

119
00:07:36,800 --> 00:07:39,080
Speaker 2: as great as some of the excess spreads.

120
00:07:39,160 --> 00:07:41,040
Speaker 1: And what you're getting in all in Yale, well, you know,

121
00:07:41,480 --> 00:07:46,040
Speaker 1: with credit is a new fangled word for fixed income

122
00:07:46,320 --> 00:07:49,440
Speaker 1: or which was a new fangled word for bonds. In

123
00:07:49,560 --> 00:07:52,840
Speaker 1: nineteen seventy eight, I was moved at City Bank from

124
00:07:52,840 --> 00:07:55,680
Speaker 1: the equities department to the bond department. Nobody talked about

125
00:07:55,680 --> 00:08:01,840
Speaker 1: fixed income or credit. But with or bonds or fixed

126
00:08:01,840 --> 00:08:06,280
Speaker 1: income or credit, what you see is what you get.

127
00:08:07,000 --> 00:08:09,480
Speaker 1: You can read on the piece of paper what the

128
00:08:09,560 --> 00:08:12,400
Speaker 1: promised return is. And then the only thing you have

129
00:08:12,440 --> 00:08:15,040
Speaker 1: to wonder about is will I get it? That is

130
00:08:15,080 --> 00:08:17,360
Speaker 1: to say, will the issue or default or will they

131
00:08:17,440 --> 00:08:20,320
Speaker 1: keep their promises? And by the way, they promised you interest,

132
00:08:20,400 --> 00:08:22,160
Speaker 1: they promised you to pay your money back at the end.

133
00:08:22,200 --> 00:08:25,880
Speaker 1: That if they don't keep the promise, they lose the company,

134
00:08:26,880 --> 00:08:28,720
Speaker 1: so they have a lot of incentives to pay. I've

135
00:08:28,720 --> 00:08:32,400
Speaker 1: been in non investment grade credit for forty seven years,

136
00:08:32,600 --> 00:08:35,839
Speaker 1: and in our experience, roughly ninety nine percent of our

137
00:08:35,840 --> 00:08:37,840
Speaker 1: issuers have paid as promised.

138
00:08:38,400 --> 00:08:42,360
Speaker 2: You've thrived during your five decade career, almost five decade career,

139
00:08:43,080 --> 00:08:46,119
Speaker 2: during times of dislocation. Is this a time of dislocation

140
00:08:46,280 --> 00:08:47,800
Speaker 2: to play or not to.

141
00:08:49,400 --> 00:08:49,720
Speaker 3: Well?

142
00:08:50,040 --> 00:08:53,120
Speaker 1: It's a time of dislocation. Everybody has to judge for

143
00:08:53,200 --> 00:09:03,240
Speaker 1: themselves whether the reduction in asset prices so far is right, inadequate,

144
00:09:04,000 --> 00:09:07,600
Speaker 1: or excessive. If it's excessive, you should jump in with

145
00:09:07,840 --> 00:09:11,160
Speaker 1: both feet. If it's inadequate, you should wait until things

146
00:09:11,160 --> 00:09:17,000
Speaker 1: adjust further. And it's impossible to make that judgment qualitatively.

147
00:09:17,040 --> 00:09:19,400
Speaker 1: You use the word measure before I pushed back.

148
00:09:19,240 --> 00:09:19,760
Speaker 3: A little bit.

149
00:09:20,120 --> 00:09:24,880
Speaker 1: There's no place you can look, there's no analysis you

150
00:09:24,960 --> 00:09:29,400
Speaker 1: can do to determine whether today's asset prices are right

151
00:09:30,040 --> 00:09:35,160
Speaker 1: for the environment ahead. Now there never is. It's always conjecture.

152
00:09:35,320 --> 00:09:40,640
Speaker 1: It's always guesswork. That's in theory why the greatest investors

153
00:09:41,040 --> 00:09:44,400
Speaker 1: are great because they make those judgments better than most people.

154
00:09:45,679 --> 00:09:50,360
Speaker 1: It's excessively hard today because today we have no idea

155
00:09:50,400 --> 00:09:52,800
Speaker 1: what the future is going to be. Normally we think

156
00:09:52,840 --> 00:09:55,000
Speaker 1: we know what's going to happen in the future. We

157
00:09:55,160 --> 00:09:58,520
Speaker 1: normally assume the future will look mostly like the past.

158
00:09:59,040 --> 00:10:02,600
Speaker 1: We extrapolate and usually it works because the world doesn't

159
00:10:02,679 --> 00:10:03,440
Speaker 1: change that much.

160
00:10:04,760 --> 00:10:05,240
Speaker 3: But the.

161
00:10:07,640 --> 00:10:13,120
Speaker 1: World economy and the world order beyond economy, meaning geopolitics

162
00:10:13,120 --> 00:10:16,360
Speaker 1: and international relationships has been shook up like a snow

163
00:10:16,400 --> 00:10:21,559
Speaker 1: globe by the events of the last days, and nobody

164
00:10:21,559 --> 00:10:22,679
Speaker 1: knows what it's going to look like.

165
00:10:25,520 --> 00:10:29,880
Speaker 3: Nobody knows. I dare say, if you tell me that

166
00:10:30,000 --> 00:10:34,000
Speaker 3: you the what our rules will be.

167
00:10:34,000 --> 00:10:37,199
Speaker 1: Six months ago, six months from now, I'll bet you

168
00:10:37,200 --> 00:10:37,600
Speaker 1: you're wrong.

169
00:10:38,320 --> 00:10:39,199
Speaker 3: This is in flux.

170
00:10:40,080 --> 00:10:42,199
Speaker 1: And if you think it's in flux, then by definition

171
00:10:42,280 --> 00:10:45,280
Speaker 1: you know know what the future holds. And then even

172
00:10:45,320 --> 00:10:48,640
Speaker 1: if you know what our country's going to do and

173
00:10:48,720 --> 00:10:50,800
Speaker 1: it's going to be that way six months from now,

174
00:10:51,120 --> 00:10:53,800
Speaker 1: we don't know what other countries are going to do, what.

175
00:10:53,720 --> 00:10:55,040
Speaker 3: The ramifications will be.

176
00:10:56,840 --> 00:11:03,920
Speaker 1: And so you know, I always inveigh against forecasting. I

177
00:11:03,960 --> 00:11:09,120
Speaker 1: don't believe in macro forecasting, my owner, other people's and

178
00:11:09,760 --> 00:11:11,960
Speaker 1: we know much less today than usual.

179
00:11:12,440 --> 00:11:16,199
Speaker 3: Now. People who who like to run their lives according

180
00:11:16,240 --> 00:11:17,000
Speaker 3: to forecasts.

181
00:11:17,320 --> 00:11:19,040
Speaker 1: They say, well, this is going to happen in the future,

182
00:11:19,080 --> 00:11:20,280
Speaker 1: so I'm going to do this, And this is going

183
00:11:20,320 --> 00:11:21,440
Speaker 1: to happen in the future, so I'm going.

184
00:11:21,360 --> 00:11:21,640
Speaker 3: To do that.

185
00:11:22,480 --> 00:11:25,920
Speaker 1: What you really need, if you like to work with forecases,

186
00:11:25,960 --> 00:11:28,440
Speaker 1: you need two things, not just a forecast. You need

187
00:11:28,480 --> 00:11:31,760
Speaker 1: the forecast, but you need an estimate of the probability

188
00:11:31,800 --> 00:11:36,000
Speaker 1: that your forecast is correct. And today, whatever your forecast

189
00:11:36,040 --> 00:11:40,160
Speaker 1: may be, you have to say, the probability that I'm

190
00:11:40,240 --> 00:11:45,800
Speaker 1: right is lower than ever, because the probability that we

191
00:11:45,920 --> 00:11:47,760
Speaker 1: know what the future is going to look like is

192
00:11:47,800 --> 00:11:48,559
Speaker 1: lower than ever.

193
00:11:48,920 --> 00:11:50,280
Speaker 3: And that's how I feel.

194
00:11:50,920 --> 00:11:59,600
Speaker 2: Is this a time to be fearful or greedy?

195
00:11:59,640 --> 00:12:00,920
Speaker 3: You know what you have to say.

196
00:12:01,840 --> 00:12:05,320
Speaker 1: Bloomberg's offices, you have to think in terms of your neighbor.

197
00:12:09,840 --> 00:12:12,840
Speaker 3: The department store, Bloomingdale's. Bloomingdale's.

198
00:12:14,320 --> 00:12:18,880
Speaker 1: Bloomingdale's just put everything on sale. Prices have come down

199
00:12:19,559 --> 00:12:22,240
Speaker 1: for the S and P eight percent in the last

200
00:12:22,240 --> 00:12:27,200
Speaker 1: two days and much more in the last six weeks.

201
00:12:27,360 --> 00:12:34,000
Speaker 1: It's on sale. That should encourage people to think about buying.

202
00:12:36,120 --> 00:12:41,120
Speaker 1: Will they go down further? Nobody knows. Are the prices fair?

203
00:12:41,440 --> 00:12:46,000
Speaker 1: Nobody knows, But everybody runs from the market when prices

204
00:12:46,040 --> 00:12:49,440
Speaker 1: go down because they think it connotes risk. It's just

205
00:12:49,760 --> 00:12:57,600
Speaker 1: stuff going on sale, And of course it takes well

206
00:12:57,640 --> 00:12:59,199
Speaker 1: I was going to say a pro, but it takes

207
00:12:59,200 --> 00:13:02,880
Speaker 1: a pressing pro of which there aren't many to know whether, as.

208
00:13:02,760 --> 00:13:05,319
Speaker 3: I keep saying, the discounts.

209
00:13:04,840 --> 00:13:08,760
Speaker 1: Are adequate or appropriate. But certainly you have to look.

210
00:13:09,800 --> 00:13:12,200
Speaker 1: And it doesn't make any sense to say, just a minute,

211
00:13:12,920 --> 00:13:15,800
Speaker 1: I did XYZ when the price was one hundred. Today

212
00:13:15,840 --> 00:13:18,120
Speaker 1: the price is ninety, So I'm going to boycott it.

213
00:13:18,240 --> 00:13:20,280
Speaker 1: That doesn't make any sense on its face. You have

214
00:13:20,320 --> 00:13:21,199
Speaker 1: to take a hard look.

215
00:13:22,480 --> 00:13:24,840
Speaker 2: Do you still think that the US is the best

216
00:13:24,920 --> 00:13:26,800
Speaker 2: place to invest?

217
00:13:29,000 --> 00:13:31,240
Speaker 1: I think it's probably still the best place, but it's

218
00:13:31,520 --> 00:13:35,640
Speaker 1: less best than it used to be, because I think that,

219
00:13:37,520 --> 00:13:40,520
Speaker 1: you know, if you think about the things that made

220
00:13:40,520 --> 00:13:43,520
Speaker 1: it the best place, one of them was the rule

221
00:13:43,559 --> 00:13:49,040
Speaker 1: of law, that may be less the fact today. One

222
00:13:49,080 --> 00:13:53,520
Speaker 1: of them was the predictability of outcomes that may be

223
00:13:54,000 --> 00:13:59,600
Speaker 1: less today. One of them was, well, the worst thing

224
00:13:59,600 --> 00:14:02,800
Speaker 1: about it investing in the United States for many years

225
00:14:03,080 --> 00:14:07,240
Speaker 1: has been our fiscal situation, our deficits and debts, and

226
00:14:07,760 --> 00:14:11,640
Speaker 1: the US has behaved like somebody who has a golden

227
00:14:11,679 --> 00:14:14,440
Speaker 1: credit card where there's no credit limit and the bill

228
00:14:14,520 --> 00:14:17,200
Speaker 1: never comes, So of course you can spend more than

229
00:14:17,200 --> 00:14:17,560
Speaker 1: you make.

230
00:14:18,280 --> 00:14:19,760
Speaker 3: And that's and.

231
00:14:20,240 --> 00:14:23,480
Speaker 1: If somebody has a golden credit card, well what would

232
00:14:23,520 --> 00:14:25,240
Speaker 1: you do? Well, you might buy a nice car, but

233
00:14:25,760 --> 00:14:28,680
Speaker 1: what the hell, you might as well buy all the cars.

234
00:14:28,920 --> 00:14:30,440
Speaker 3: Because the bill's not going to come.

235
00:14:30,600 --> 00:14:34,360
Speaker 1: And that's the way we've behaved, and that's the way

236
00:14:34,480 --> 00:14:40,840
Speaker 1: Washington has spent money. But can the events of the

237
00:14:40,920 --> 00:14:45,560
Speaker 1: recent days change that. Can they cause there to be

238
00:14:45,600 --> 00:14:48,720
Speaker 1: a credit limit? Can they cause a bill to be

239
00:14:48,760 --> 00:14:51,680
Speaker 1: presented at some point in time? And if the answer

240
00:14:51,760 --> 00:14:53,520
Speaker 1: to either of both of those questions.

241
00:14:53,240 --> 00:14:55,200
Speaker 3: Is yes, that's a real risk.

242
00:14:55,840 --> 00:14:59,800
Speaker 1: If people don't like the dollar, don't like investing in

243
00:14:59,840 --> 00:15:04,360
Speaker 1: the the United States, don't want to hold an unlimited

244
00:15:04,480 --> 00:15:08,800
Speaker 1: number of treasuries. If we just make people mad and

245
00:15:08,920 --> 00:15:11,400
Speaker 1: say the US is still a great credit, but I

246
00:15:11,440 --> 00:15:14,320
Speaker 1: don't want to hold their debts because look how they're

247
00:15:14,360 --> 00:15:18,880
Speaker 1: treating me, the fiscal situation will be very complicated.

248
00:15:19,840 --> 00:15:22,440
Speaker 2: Howard marks, We have to leave it there. That was

249
00:15:22,520 --> 00:15:26,360
Speaker 2: oak Tree Capital co chairman Howard Marx. Thank you so much,