WEBVTT - Ken Griffin Talks Trump VP, Middle East Growth 0:00:02.440 --> 0:00:08.200 Bloomberg Audio Studios, podcasts, radio news. Ken Griffin, thank you 0:00:08.240 --> 0:00:10.119 so much for joining us here in Doha. Eric, it 0:00:10.200 --> 0:00:12.400 is great to be here today. We have a lot 0:00:12.440 --> 0:00:14.280 to talk about as usual, folks. 0:00:15.160 --> 0:00:19.160 I have been fortunate enough to have a long standing 0:00:19.200 --> 0:00:22.919 relationship with Ken and have had the opportunity to interview 0:00:22.960 --> 0:00:23.759 him many times. 0:00:25.000 --> 0:00:26.239 I think of this as. 0:00:28.840 --> 0:00:31.319 An evolution in so many ways, Ken, of things that 0:00:31.320 --> 0:00:33.480 we've touched on in the past. One of those things, 0:00:33.479 --> 0:00:36.640 of course, is geopolitics, a subject. 0:00:36.640 --> 0:00:40.120 In order a graceful way to describe aging an. 0:00:39.920 --> 0:00:47.599 Evolution, geopolitics is a subject that has come up already 0:00:47.600 --> 0:00:48.880 many times on this stage. 0:00:48.920 --> 0:00:49.240 Ken. 0:00:49.720 --> 0:00:52.839 The world, as you know, is divided by conflicts. We 0:00:52.920 --> 0:00:55.600 have hot wars in Ukraine and Gaza, and a cold 0:00:55.640 --> 0:00:58.680 war you might say, between the United States and China, 0:00:58.760 --> 0:01:04.320 and increasingly these conflicts are forcing states to pick sides, 0:01:04.959 --> 0:01:10.360 and thus they're realigning global trade and investment. What we'd 0:01:10.560 --> 0:01:15.120 like here, Ken, is your perspective on the trajectory of 0:01:15.160 --> 0:01:20.319 these geopolitical trends and your ideas as to how they're 0:01:20.400 --> 0:01:24.880 shaping or perhaps reshaping the macroeconomic landscape. You have to 0:01:24.959 --> 0:01:28.199 navigate at your firm Citadel and citadel securities. 0:01:30.040 --> 0:01:32.080 So that's a great question because it was just a 0:01:32.080 --> 0:01:36.399 few years ago that I think most of us viewed 0:01:36.440 --> 0:01:39.759 the world as heading towards geopolitical stability. 0:01:39.360 --> 0:01:42.000 A better place in other words, yeah, yes. 0:01:42.080 --> 0:01:45.760 And a more integrated market, both financial flows of goods, 0:01:45.840 --> 0:01:47.480 flows of services, and. 0:01:47.400 --> 0:01:48.960 Even the integration of labor markets. 0:01:49.840 --> 0:01:54.680 And now with both the war and Europe, the tension 0:01:54.680 --> 0:01:58.680 between the United States and China, and then in a 0:01:58.680 --> 0:02:02.440 different way, what's on in the Middle East between Israel 0:02:04.320 --> 0:02:07.760 and Hamas, it's very clear we live in a different 0:02:07.760 --> 0:02:11.160 world than we had all experienced and fantasized about just 0:02:11.200 --> 0:02:16.920 a few years ago. Now, the upshot of this is 0:02:16.960 --> 0:02:23.080 that the traditional alliances post World War Two are regaining strength. 0:02:23.360 --> 0:02:26.320 You see the NATO countries coming together more tightly. You 0:02:26.440 --> 0:02:31.800 see the United States trying to pull its allies closer together, 0:02:31.919 --> 0:02:38.320 whether it's Australia in the Pacific or our allies in Europe. 0:02:38.440 --> 0:02:43.200 So there is definitely a reassertion. 0:02:42.639 --> 0:02:46.320 Of the importance of global institutions, and in particular the 0:02:46.360 --> 0:02:47.519 post World War two. 0:02:47.400 --> 0:02:50.200 Frameworks that are once again at play. 0:02:50.800 --> 0:02:53.720 As an investor, it's an interesting point in time because 0:02:54.000 --> 0:02:57.560 if you are in the United States, there's a sense 0:02:57.600 --> 0:03:01.639 that deploying capital in the markets of our clear. 0:03:01.480 --> 0:03:03.919 Allies is to say its path to go. 0:03:05.280 --> 0:03:08.200 In fact, you'll often hear American money managers, for example, 0:03:08.240 --> 0:03:11.480 say that China is uninvestable because of. 0:03:11.440 --> 0:03:14.360 The tension between the United States and China. 0:03:14.440 --> 0:03:18.320 That's on clear display. And yet if you're here in 0:03:18.360 --> 0:03:21.359 the Middle East, where China is an important importer of 0:03:22.400 --> 0:03:26.840 oil and other products from across the region, it's a 0:03:26.919 --> 0:03:30.280 very different story. China is clearly investible because of the 0:03:30.360 --> 0:03:33.639 closeness form between China and this part of the world. 0:03:33.840 --> 0:03:39.440 So you do see both the restrengthening of historical relationships, 0:03:39.920 --> 0:03:44.000 new ties being built, and capital follows. 0:03:43.520 --> 0:03:48.000 The flows of these geopolitical arrangements. Are you worried about 0:03:48.000 --> 0:03:49.280 the direction of the world is headed. 0:03:51.280 --> 0:03:54.000 Of course I am, and I'm willing to bet that 0:03:54.040 --> 0:03:54.280 you are. 0:03:54.320 --> 0:03:54.640 Also. 0:03:55.120 --> 0:03:57.200 This is not where we want to see the world 0:03:57.240 --> 0:04:00.400 head for just a number of obvious reasons. I mean, 0:04:00.440 --> 0:04:05.640 first of all, global trade, which had adverse consequences that 0:04:05.120 --> 0:04:10.000 we're learning about to this day, still unleashed an enormous 0:04:10.040 --> 0:04:16.240 amount of gain for humanity. And with the rise of 0:04:16.240 --> 0:04:19.520 global trade became the rise of information sharing, around the world, 0:04:19.839 --> 0:04:26.080 which rapidly accelerated the trajectory of mankind. I mean of 0:04:26.160 --> 0:04:29.400 note the Chinese, for example, our leaders in solar. 0:04:29.080 --> 0:04:32.120 Their leaders in EVS, their leaders in. 0:04:32.160 --> 0:04:35.000 A number of emerging technologies, and a world which is 0:04:35.040 --> 0:04:39.039 more splintered will see the gains that the Chinese have 0:04:39.120 --> 0:04:43.280 achieved in these important areas not shared by the Western countries. 0:04:44.080 --> 0:04:47.960 And conversely, the United States is a clear leader in 0:04:48.040 --> 0:04:51.640 Ai along with a number of the European countries, and 0:04:51.880 --> 0:04:56.159 those gains will not be shared with China and the 0:04:56.200 --> 0:04:58.160 countries in its sphere of influence. 0:04:58.480 --> 0:04:59.320 So it's a very. 0:04:59.240 --> 0:05:03.440 Clear cut loss for all of humanity when we have 0:05:03.560 --> 0:05:05.799 the severing of ties between our countries. 0:05:06.240 --> 0:05:10.480 On a practical level, is it getting harder to manage 0:05:10.480 --> 0:05:11.320 the risks you face? 0:05:16.360 --> 0:05:19.200 I think that one has to be aware that there 0:05:19.240 --> 0:05:24.200 are more tail risks that are harder to ultimately manage, 0:05:24.360 --> 0:05:29.000 and that goes with this rise in geopolitical complexity. So 0:05:29.080 --> 0:05:31.719 I think that's that's certainly true, that there are just 0:05:31.839 --> 0:05:35.960 larger tails today that didn't exist or we didn't perceive 0:05:36.000 --> 0:05:38.560 them to exist seven or eight or ten years ago. 0:05:38.920 --> 0:05:41.400 So that's that is intrinsic and money management today, and 0:05:41.400 --> 0:05:42.960 that's the wit we think about each and every day 0:05:42.960 --> 0:05:45.880 at Citadel is how do we mitigate the tail risks 0:05:45.880 --> 0:05:46.560 in this world? 0:05:47.160 --> 0:05:48.800 How do you mitigate the tail risks? 0:05:49.080 --> 0:05:50.880 Well, part of its sizing, so part of it is 0:05:50.920 --> 0:05:54.440 how much exposure you have to a strategy or to 0:05:54.480 --> 0:05:57.440 a particular sector of the economy or to a particular country. 0:05:57.880 --> 0:06:00.400 That's that is the go to playbook from manage in 0:06:00.400 --> 0:06:03.240 your tails is just what's the most you're willing to 0:06:03.279 --> 0:06:07.359 have exposed to a possible adverse event. And then the 0:06:07.400 --> 0:06:10.360 other strategies to look for correlated payoffs that will protect 0:06:10.400 --> 0:06:11.800 you in the event that. 0:06:11.839 --> 0:06:13.080 The tail scenario occurs. 0:06:13.400 --> 0:06:14.920 So those are two things that you do in your 0:06:14.960 --> 0:06:17.480 portfolio construction to manage against the. 0:06:17.400 --> 0:06:18.760 Tail risk in this environment. 0:06:19.640 --> 0:06:24.880 Ken moments ago, you mentioned China and EVS. As it 0:06:24.960 --> 0:06:28.760 happens today, the Biden administration is levying sweeping new tariffs 0:06:29.240 --> 0:06:32.279 on Chinese imports, including on electric vehicles. 0:06:32.279 --> 0:06:33.520 How does that change the picture. 0:06:35.279 --> 0:06:38.680 It's sort of a continuation of the incoherent economic policies 0:06:38.720 --> 0:06:39.800 of the Biden administration. 0:06:41.080 --> 0:06:43.240 We've seen this giant push. 0:06:43.000 --> 0:06:46.560 Towards green energy over the course of the last several years, 0:06:47.080 --> 0:06:49.800 and at the same time, a set of policies that 0:06:49.880 --> 0:06:53.880 run completely contrary to the stated goal of trying to 0:06:53.920 --> 0:06:57.920 head towards the zero carbon world, and placing enormous tariffs 0:06:57.920 --> 0:07:02.600 on Chinese evs, which are low cost, high quality, of 0:07:02.680 --> 0:07:06.200 great value to American consumers is yet another part of 0:07:06.240 --> 0:07:09.760 the incoherent bid economic strategy. The other part of the 0:07:09.760 --> 0:07:12.520 strategy that I scratched my head about is the US 0:07:12.600 --> 0:07:18.680 refusing to provide new LNG permits. Right, if you want 0:07:18.680 --> 0:07:21.400 the world to head towards a lower carbon footprint and 0:07:21.480 --> 0:07:24.640 move away from coal, access to LNG is a really 0:07:24.720 --> 0:07:27.680 important part of the equation, and yet the United States 0:07:27.720 --> 0:07:31.280 is refusing to permit new facilities in the foreseeable future. 0:07:31.240 --> 0:07:34.440 And also to sell LNG to countries with which the 0:07:34.520 --> 0:07:36.240 United States doesn't have a free trade agreement. 0:07:37.840 --> 0:07:38.840 That's a part of the equation. 0:07:38.920 --> 0:07:43.080 Also that I said, the United States amazingly is a 0:07:43.080 --> 0:07:44.720 bigger LG exporter than Kutar. 0:07:46.320 --> 0:07:48.560 We're and neck. We're neck and neck. 0:07:48.880 --> 0:07:52.000 And it's very important to understand that if you want 0:07:52.040 --> 0:07:56.240 a country to base its economy on natural gas, they're 0:07:56.240 --> 0:07:57.680 going to want two suppliers. 0:07:58.880 --> 0:08:01.559 It's not a wind lose is dynamic between the United 0:08:01.560 --> 0:08:03.840 States and Qatar. It's a win win. 0:08:04.360 --> 0:08:08.600 If you look at any good that is required on 0:08:08.680 --> 0:08:12.240 an existential basis, you're going to want dual source supply. 0:08:12.840 --> 0:08:14.880 And the rise of the United States is a major 0:08:15.040 --> 0:08:20.560 lergy exporter only strengthens the position of this region of 0:08:20.600 --> 0:08:23.240 the world in providing natural gas to other countries. 0:08:24.520 --> 0:08:26.880 Going back to China for a moment. We've talked about 0:08:26.960 --> 0:08:29.400 China in the past. You have what I would call 0:08:29.600 --> 0:08:34.280 a constructive view of China, certainly more constructive than many 0:08:34.320 --> 0:08:39.080 people with whom I've spoken. There is, however, strong hostility 0:08:39.120 --> 0:08:44.280 to China among both Republicans and Democrats. So how would 0:08:44.320 --> 0:08:48.640 you explain the way you look at the opportunity and 0:08:48.720 --> 0:08:51.640 the problem that China presents, particularly to the United States. 0:08:53.240 --> 0:08:57.880 So that's a treacherous question to have to answer. Let's 0:08:57.880 --> 0:09:01.920 take a huge step back. I think that my view 0:09:02.120 --> 0:09:06.840 towards China is rooted in respect. It is rooted in 0:09:06.960 --> 0:09:09.520 the respect of a country that has pulled more people 0:09:09.559 --> 0:09:13.920 out of poverty in the last forty years than than 0:09:13.920 --> 0:09:17.520 any country in the history of the world. It's a 0:09:17.600 --> 0:09:23.360 remarkable economic achievement that they've unleashed in China, and it 0:09:23.400 --> 0:09:27.199 was an economic achievement that the United States firmly supported. 0:09:27.679 --> 0:09:30.720 We believed in America that the rise of a free 0:09:30.800 --> 0:09:36.199 market economy would lead to the rise of a liberal democracy. 0:09:36.679 --> 0:09:41.720 It was an explicit calculation that happened in DC that 0:09:41.840 --> 0:09:45.600 didn't actually happen to happen in reality. So it's important 0:09:45.640 --> 0:09:49.720 to recognize that this was the goal of the United States, 0:09:49.960 --> 0:09:53.280 was to see the economic rise of China, hoping it 0:09:53.280 --> 0:09:55.120 would push it towards a liberal democracy. 0:09:55.360 --> 0:09:56.160 It didn't happen. 0:09:56.679 --> 0:10:00.920 The economy rose, did not become a liberal democracy. Having 0:10:01.000 --> 0:10:04.560 said that, today, China is a powerhouse in research and 0:10:04.600 --> 0:10:08.480 development in a broad number of fields, fields that are 0:10:08.559 --> 0:10:11.400 very important to the future of all of us around 0:10:11.440 --> 0:10:14.440 the world. And so long as we're able to maintain 0:10:14.480 --> 0:10:18.640 a constructive relationship and we can share the best technologies 0:10:18.640 --> 0:10:21.840 that are to countries and all the countries around the 0:10:21.840 --> 0:10:23.880 world develop and build, there's an. 0:10:23.800 --> 0:10:24.800 Opportunity for gain. 0:10:26.640 --> 0:10:30.240 Right now, we have in some sense a very muddled relationship, 0:10:30.880 --> 0:10:33.120 and it's almost as if we're trying to maximize the 0:10:33.160 --> 0:10:37.600 opportunities for mutual pain. And that's a difficult place to be. 0:10:38.320 --> 0:10:41.000 It makes the Chinese weary of trusting the United States. 0:10:41.280 --> 0:10:44.040 It makes the United States wary of trusting China, and 0:10:44.120 --> 0:10:46.120 there's just a lot lost in that equation. 0:10:46.640 --> 0:10:49.280 It would make sense if what the United States wants 0:10:49.320 --> 0:10:52.320 to do is make an enemy of China, but that's 0:10:52.320 --> 0:10:52.800 not clear. 0:10:53.160 --> 0:10:55.120 Well, you know, I don't want to make this a 0:10:55.360 --> 0:10:57.560 US only is going after China. 0:10:57.600 --> 0:10:58.760 It's a two way street. 0:10:59.000 --> 0:11:02.320 I mean, the Chinese for ample supporting Russia's ability to 0:11:02.320 --> 0:11:06.000 wage warn Ukraine doesn't play well in the United States 0:11:06.000 --> 0:11:09.240 of America. So there's room for both countries to take 0:11:09.280 --> 0:11:13.640 definitive acts to just turn the temperature down. And well, 0:11:13.720 --> 0:11:15.680 if it's a coal word, it's to turn the temperature up. 0:11:15.679 --> 0:11:19.320 I'm not sure what shoy you go. But to improve 0:11:19.360 --> 0:11:24.199 the relationships and the dynamic between our two countries, Ken 0:11:24.360 --> 0:11:28.080 Qatar is playing an instrumental role in the peace talks 0:11:28.200 --> 0:11:33.360 or the effort to create piece as it were, between 0:11:33.360 --> 0:11:36.440 the Israelis and the Palestinians and to resolve the situation 0:11:36.559 --> 0:11:37.079 in Gaza. 0:11:37.320 --> 0:11:40.720 And with respect to Hamas, you've been outspoken about the 0:11:40.760 --> 0:11:43.880 pro Palestinian protests back in the United States. They've royal 0:11:44.000 --> 0:11:48.760 university campuses. You've been particularly critical of your alma mater Harvard. 0:11:49.320 --> 0:11:51.640 Here's my question to you. When people here in the 0:11:51.679 --> 0:11:55.400 Gulf region and across the globe for that matter, see 0:11:55.440 --> 0:12:00.800 the chaos at Harvard or Columbia or USC or MIT 0:12:01.120 --> 0:12:05.880 and police and combat gear moving to clear accountments, how do. 0:12:05.840 --> 0:12:09.240 You think that shapes their view of America? Not well? 0:12:10.640 --> 0:12:14.079 Not well? And what is lost is that what's happening 0:12:14.120 --> 0:12:18.120 on campus is not is not free speech. It's anarchy. 0:12:18.679 --> 0:12:21.360 You know, in Columbia, when they storm a building, they 0:12:21.480 --> 0:12:26.280 vandalize a building, they're destroying property, and then they ask 0:12:26.360 --> 0:12:28.720 for humanitarian aid, which is the greatest of all ironies. 0:12:29.240 --> 0:12:33.200 It's just the wrong It is the wrong dynamic that 0:12:33.240 --> 0:12:36.559 we're seeing take place in American campuses. These are students. 0:12:36.720 --> 0:12:38.760 Most of these students on campuses are trying to learn. 0:12:39.120 --> 0:12:42.600 They're trying to have an education, and the university should 0:12:42.600 --> 0:12:47.440 be really trying to encourage a constructive debate between the 0:12:47.480 --> 0:12:50.360 students of different backgrounds, whether they're from the Middle East, 0:12:50.800 --> 0:12:54.480 whether they're of Jewish origin. It's really important that the 0:12:54.600 --> 0:12:57.280 generation that will be the generation that runs the world 0:12:57.320 --> 0:13:01.560 in forty years I still learn from this horrible moment 0:13:01.600 --> 0:13:05.439 in history, and we're not fostering that environment on campuses today, 0:13:05.480 --> 0:13:09.760 and it's really it's a huge, huge disappointment that so 0:13:09.880 --> 0:13:12.800 much what we see on campus. You've seen the video 0:13:12.800 --> 0:13:14.840 footage of the kids interviewed, Why are you here? What 0:13:14.840 --> 0:13:18.080 are you protesting about? Often they can't even answer basic 0:13:18.160 --> 0:13:21.680 questions about what's happening in the region and why it's 0:13:21.720 --> 0:13:22.400 taking place? 0:13:23.600 --> 0:13:24.360 Can people here? 0:13:24.400 --> 0:13:27.079 And I suspect those watching us around the world are 0:13:27.120 --> 0:13:32.160 eager for your insights into what might happen during and 0:13:32.280 --> 0:13:33.800 after the US election. 0:13:34.640 --> 0:13:35.679 How might US. 0:13:35.600 --> 0:13:39.440 Foreign policy and defense policy change if Donald Trump were 0:13:39.480 --> 0:13:40.600 to return to the White House. 0:13:42.840 --> 0:13:45.920 So if President Trump returns to the White House, I 0:13:45.960 --> 0:13:48.680 think you'll see a global perception of a stronger America. 0:13:50.440 --> 0:13:50.640 Now. 0:13:50.760 --> 0:13:56.200 The Biden administration's form policies, the actual policies are generally 0:13:56.240 --> 0:14:03.920 speaking thoughtful, but to be blunt, America does not exude 0:14:03.960 --> 0:14:07.720 credibility or strength in its actions around the world today. 0:14:08.320 --> 0:14:12.400 That our positioning does not match the thoughtfulness of our policies. 0:14:12.760 --> 0:14:15.880 That's a very difficult place to be in a world 0:14:15.920 --> 0:14:19.560 which has the geopolitical cross currents that we spoke about earlier. 0:14:19.960 --> 0:14:22.680 And it means that those who are willing to push 0:14:23.080 --> 0:14:26.080 to see how far you can push America are willing 0:14:26.120 --> 0:14:28.440 to push harder than we want. 0:14:28.280 --> 0:14:29.040 To see happening. 0:14:29.680 --> 0:14:32.960 And I think that anybody who knows President Trump knows 0:14:33.200 --> 0:14:35.440 that is not somebody you just pushed to see what's 0:14:35.480 --> 0:14:38.840 going to happen. That's the wrong strategy with President Trump. 0:14:39.520 --> 0:14:43.080 And so I believe that President Trump will have very 0:14:43.120 --> 0:14:46.440 good people in foreign policy and in the Department of Defense. 0:14:46.880 --> 0:14:50.640 But I think he will exude a level of strength 0:14:51.080 --> 0:14:53.480 that will help to stabilize the world in this very, 0:14:53.680 --> 0:14:54.760 very trying times. 0:14:55.200 --> 0:14:59.760 There has been flagging support for aid to Ukraine. The 0:15:00.080 --> 0:15:02.320 publican party with Donald Trump abandoned Ukraine. 0:15:02.680 --> 0:15:07.200 No, he will not. You're certain of that. Well, this 0:15:07.280 --> 0:15:08.520 goes back to my earlier statement. 0:15:08.560 --> 0:15:12.720 You could never be certain about President Trump, and that's 0:15:12.800 --> 0:15:15.240 part of the reason that he is more intimidating to 0:15:15.320 --> 0:15:18.520 our adversaries. You never know exactly what the response is 0:15:18.560 --> 0:15:21.200 going to be. But knowing a number of people that 0:15:21.240 --> 0:15:24.040 he's close to, and having actually brought this topic up, 0:15:24.920 --> 0:15:27.200 I think that President Trump feels he can find an 0:15:27.240 --> 0:15:31.360 off ramp towards peace by reaching across to Putin and 0:15:31.480 --> 0:15:36.600 to the Ukrainian leadership. I believe he knows it's important 0:15:36.600 --> 0:15:39.840 to American interests, that we do not abandon the Ukrainian 0:15:39.840 --> 0:15:42.920 people at this very difficult moment, and that we keep 0:15:43.040 --> 0:15:50.080 Russian's territorial ambitions in check, and a strong pushback against 0:15:50.160 --> 0:15:52.680 Putin will be part of the equation if need be, 0:15:53.400 --> 0:15:55.120 to secure the peace in the Ukraine. 0:15:56.160 --> 0:16:00.240 What do you think he'll do with economic policy. It's 0:16:00.240 --> 0:16:01.440 difficult to know. 0:16:02.680 --> 0:16:06.840 So neither administration gives me comfort in terms of a 0:16:06.880 --> 0:16:11.880 willingness to reduce federal spending. But I have no doubt 0:16:12.800 --> 0:16:18.080 that a Trump administration would be far less oriented towards 0:16:18.400 --> 0:16:24.880 regulatory overreach and far more thoughtful about the role of 0:16:24.960 --> 0:16:28.359 the US government in the day to day US economy. 0:16:28.920 --> 0:16:31.320 One of the reasons that American voters are so unhappy 0:16:31.360 --> 0:16:34.880 right now is inflation is out of control, and inflation 0:16:35.040 --> 0:16:38.200 is out of control because of the expanse of government 0:16:38.240 --> 0:16:41.560 under the biod administration, the rate of spending, and the 0:16:41.600 --> 0:16:45.600 degree of intervention in the economy. It's causing energy prices 0:16:45.640 --> 0:16:48.760 to be higher, It's causing the cost of manufacturing to 0:16:48.800 --> 0:16:52.120 be higher. It's impacting every part of the economy in 0:16:52.160 --> 0:16:55.400 a way that the American voter is frustrated about. President 0:16:55.440 --> 0:16:59.440 Biden doesn't understand you need to break the back of 0:16:59.480 --> 0:17:05.200 inflation to give people the sense of economic security. 0:17:06.080 --> 0:17:12.399 We have talked in the past about America's tendency should 0:17:12.400 --> 0:17:14.720 we say to spend more money than it generates in 0:17:14.760 --> 0:17:20.920 text revenue? And you have warned ken of some catastrophic 0:17:20.960 --> 0:17:25.960 consequences if deficit spending isn't brought under control. What is 0:17:26.000 --> 0:17:29.199 the catalyst for an American debt crisis going to be? 0:17:30.119 --> 0:17:32.960 So I don't know what that moment will be when 0:17:33.000 --> 0:17:36.360 there's an auction that goes awry, or when the markets 0:17:36.359 --> 0:17:41.880 become dislocated. Financial markets, generally speaking, work very well until 0:17:41.920 --> 0:17:45.159 they catastrophically come off the rails. You don't necessarily get 0:17:45.200 --> 0:17:46.800 a lot of warning that there's about to be a 0:17:46.840 --> 0:17:49.240 big event. The crash of eighty seven is a great 0:17:49.280 --> 0:17:53.200 case study. You know, that day I woke up, I 0:17:53.520 --> 0:17:57.800 was in my dorm room trading then, and the stories 0:17:57.880 --> 0:17:59.920 on the of the day were about a small scream 0:18:00.040 --> 0:18:03.320 to the Middle East of frankly no consequence, and the 0:18:03.320 --> 0:18:08.919 health of First Lady Nancy Reagan. And yet we an 0:18:09.080 --> 0:18:11.040 end of that day with the stock market down twenty 0:18:11.280 --> 0:18:15.600 percent and a number of American institutions literally on life support, 0:18:15.680 --> 0:18:20.400 and your death happened in one day, one day. There 0:18:20.480 --> 0:18:24.040 was no big story that morning that would make you 0:18:24.040 --> 0:18:25.639 think that that day might have been the end of 0:18:25.640 --> 0:18:26.119 the US. 0:18:26.040 --> 0:18:27.360 Capital markets as we knew them. 0:18:27.720 --> 0:18:30.119 There was no warning, And so I worry that the 0:18:30.119 --> 0:18:33.320 debt crisis may have a similar construct, that they'll simply 0:18:33.359 --> 0:18:38.040 be a day where a major auction fails and then 0:18:38.080 --> 0:18:42.080 you see a panic start to brew in the treasury market, 0:18:42.720 --> 0:18:44.600 and the question will be will be how fast will 0:18:44.640 --> 0:18:45.480 the Fed intervene? 0:18:46.440 --> 0:18:47.959 What panic will that induce? 0:18:48.040 --> 0:18:52.080 Because government intervention under duress often just creates more panic. 0:18:52.880 --> 0:18:56.080 And then do we see a flood of treasures. 0:18:55.680 --> 0:18:59.520 Coming back into the market from holders around the world's 0:18:59.640 --> 0:19:04.119 frightening respect, it is back to politics for a moment. 0:19:04.480 --> 0:19:07.000 You've been a prominent donor. 0:19:07.160 --> 0:19:10.239 I would say to Republican candidates, I'd like to know 0:19:10.320 --> 0:19:12.320 how are you going to spend your money? How are 0:19:12.359 --> 0:19:15.920 you already spending your money ahead of the election in November. 0:19:16.600 --> 0:19:21.600 So I have been a significant supporter of Republicans that 0:19:21.640 --> 0:19:27.919 stand for personal freedom, national security, and economic soundness. 0:19:27.520 --> 0:19:28.280 The United States. 0:19:28.480 --> 0:19:30.679 That has been a big focus of mine in this 0:19:30.720 --> 0:19:34.320 primary election or this primary cycle. I want to see 0:19:34.359 --> 0:19:38.160 people in the House and in the Senate that represent 0:19:38.400 --> 0:19:42.639 the best of American values and backgrounds. 0:19:42.000 --> 0:19:44.320 That prepare one to serve in public service. 0:19:44.800 --> 0:19:46.960 In the last election cycle, I supported a number of 0:19:46.960 --> 0:19:50.320 people who were veterans just and who are now serving 0:19:50.359 --> 0:19:52.800 our country in the House, and they do it with 0:19:52.880 --> 0:19:55.919 the pride that our country deserves, and they do it 0:19:55.920 --> 0:19:58.400 with the integrity that our country needs. So I've been 0:19:58.520 --> 0:20:01.199 very focused on finding candidate who I think represent the 0:20:01.200 --> 0:20:04.080 best of American values to be part of. 0:20:04.040 --> 0:20:05.520 The future of the Republican Party. 0:20:05.920 --> 0:20:10.320 People probably want to know, have you donated to Donald 0:20:10.320 --> 0:20:13.800 Trump's campaign, either directly or indirectly to a pack or 0:20:13.840 --> 0:20:14.440 a super pack? 0:20:14.920 --> 0:20:17.879 I have not, will you? I'm going to wait to 0:20:17.880 --> 0:20:21.639 see what he picks his VP candidate. Is there anyone 0:20:21.680 --> 0:20:23.880 whom you'd like to see him pick as his VP candidate? 0:20:24.000 --> 0:20:26.800 I know I don't. This is again like poking the bear. 0:20:27.560 --> 0:20:30.240 Not sure which way my recommendation goes in terms of 0:20:30.280 --> 0:20:31.840 helping that person's prospects. 0:20:32.960 --> 0:20:39.080 I think that's wise position to take. Before we finish 0:20:39.200 --> 0:20:43.800 ken This region is blessed with resource wealth and as 0:20:43.840 --> 0:20:47.800 a result, sovereign wealth, so much so that pretty much 0:20:47.840 --> 0:20:50.760 every major asset manager in the West sees the Gulf 0:20:51.480 --> 0:20:53.560 as something of a honeypot and is trying to raise 0:20:53.600 --> 0:20:56.960 money here. As someone who isn't raising money here, how 0:20:56.960 --> 0:21:00.000 would you advise the sovereign wealth funds in the Gulf 0:21:00.160 --> 0:21:06.080 region to maximize their negotiating leverage. 0:21:07.200 --> 0:21:10.840 So either I'm going to be excommunicated from the circle 0:21:10.880 --> 0:21:14.199 of my fellow money managers or never invited to come 0:21:14.200 --> 0:21:15.360 back to the Middle East again? 0:21:15.440 --> 0:21:17.000 Is that? Is that the position E're putting me in? 0:21:18.240 --> 0:21:21.280 So look, here's what I think is important to think about. 0:21:22.119 --> 0:21:25.720 I think alignment between the interests of the money manager 0:21:26.760 --> 0:21:30.159 and the sopoire well fund are very important. And I 0:21:30.160 --> 0:21:32.800 think it's more important to have your money and trusted 0:21:32.840 --> 0:21:36.199 with the firm that is going to act continuously in 0:21:36.240 --> 0:21:38.959 your best interest as an investor than it is to 0:21:39.000 --> 0:21:43.160 try to pick somebody who simply has the lowest fees 0:21:43.560 --> 0:21:50.560 or some other superficial demarcation of being open and transparent. 0:21:51.160 --> 0:21:53.679 I mean, let's be clear, your money managers who have 0:21:53.880 --> 0:21:58.240 really important intellectual property aren't going to be unduly transparent. 0:21:58.600 --> 0:22:01.880 They're trying to protect their very intellectual property that they'll 0:22:01.880 --> 0:22:07.680 share the benefits with you of with the client. Simply put, 0:22:07.720 --> 0:22:12.000 Coca Cola doesn't publish its recipe on the web. So 0:22:12.160 --> 0:22:15.400 I think it's very important when you find a money manager, 0:22:15.600 --> 0:22:20.120 you're really asking what's their competitive advantage, what's their culture? 0:22:20.720 --> 0:22:22.000 How aligned are. 0:22:21.800 --> 0:22:24.800 They with me and in both in the good moments 0:22:24.880 --> 0:22:25.880 and the bad moments. 0:22:26.119 --> 0:22:28.239 Are they going to put themselves. 0:22:27.680 --> 0:22:30.640 In the shoes of their clients and make the right 0:22:30.680 --> 0:22:32.080 decision by their clients. 0:22:32.920 --> 0:22:36.280 It's citing. I take great pride that almost over. 0:22:36.119 --> 0:22:38.639 Twenty percent of the capital in our hedge funds is 0:22:38.680 --> 0:22:41.800 the capital the partners and the team members at Citadel. 0:22:42.119 --> 0:22:48.000 We wake up every single day as co investors with 0:22:48.119 --> 0:22:51.919 our capital providers, and I think that symbolizes what I 0:22:51.920 --> 0:22:55.040 would think about looking for if I were a member 0:22:55.080 --> 0:22:57.040 of the soccern wealth community here in the Middle East. 0:22:57.720 --> 0:23:04.560 One last thing among the men, any distinctive qualities that citadels. 0:23:04.960 --> 0:23:07.920 Just by the way, when you're going to pick a 0:23:07.960 --> 0:23:10.000 brain search, did you find the doctor. 0:23:09.680 --> 0:23:13.720 With the lowest feet? That's not what I would do. 0:23:13.800 --> 0:23:16.679 No, Right, So you want to find somebody who actually 0:23:16.720 --> 0:23:20.639 has pricing power because other people perceive them to be good, 0:23:21.119 --> 0:23:21.720 it says something. 0:23:21.800 --> 0:23:23.359