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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Intelligence

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Speaker 1: with Alex Steel and Paul Sweeney.

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Speaker 2: The real app performance has been in US corporate high yield.

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Speaker 3: Are the companies lean enough? Have they trimmed all the fats?

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Speaker 2: The semiconductor business is a really cyclical.

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Speaker 4: Business, breaking market headlines.

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Speaker 1: And corporate news from across the globe.

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Speaker 3: Do investors like the M and A that we've seen?

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Speaker 5: These are two.

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Speaker 2: Big time blue chip companies.

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Speaker 3: Window between the peak and cunt changing super fast.

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Speaker 1: Bloomberg Intelligence with Alex Steele and Paul Sweeney on Bloomberg Radio.

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Speaker 2: On Today's Bloomberg Intelligence Show, we take inside the big

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Speaker 2: stories impacting Wall Street and the global markets. Each and

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Speaker 2: every week we provide in depth research and data on

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Speaker 2: some of the two thousand companies and one hundred and

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Speaker 2: thirty industries our analysts cover worldwide. Today, we'll look ahead

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Speaker 2: to some of the global themes for markets in twenty

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Speaker 2: twenty five, plus discuss how global asset managers may fare

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Speaker 2: this year. But first we dive into healthcare. Bloomberg Intelligence

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Speaker 2: recently put out its twenty twenty five Healthcare Tech Outlook,

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Speaker 2: and the research shows that drug distributors continue to shine

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Speaker 2: in twenty twenty five, as pharmacies still show signs of weakness.

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Speaker 5: From More.

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Speaker 2: On this co host Alex Steele and I were joined

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Speaker 2: by Jonathan Palmer, Bloomberg Intelligence senior healthcare analysts. We first

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Speaker 2: asked Jonathan what he thinks some of the bright spots

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Speaker 2: are in the healthcare sector.

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Speaker 6: There's a couple, so it's healthcare technology and distribution. That

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Speaker 6: includes a whole host of companies, everything from CBS and

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Speaker 6: Walgreens to the drug distributors and then to all the

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Speaker 6: healthcare technology names. And so there's some really inane idiosyncratic

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Speaker 6: themes that work here. Pharmacies, the news is not so good. Distributors,

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Speaker 6: it's very it's very positive in the world of tech. Again,

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Speaker 6: because these are all very idiosyncratic business models focusing on

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Speaker 6: different things. There's pockets of very good, pockets of okay,

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Speaker 6: pockets have not so great. My key themes are around

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Speaker 6: the drug distributors, and pharmacy distributors are doing very well.

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Speaker 6: They've got great underlying fundamentals. There's more people taking more drugs.

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Speaker 6: They've been utilizing their capital to buy what they call MSOs,

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Speaker 6: which are management service organizations, not to get too deep

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Speaker 6: in the weeds. But these are companies that manage practices

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Speaker 6: of like oncologists or other specialists.

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Speaker 7: And really that helps diversify.

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Speaker 6: Their income stream and not make them, you know, totally

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Speaker 6: captive to the trends in underlying drugs consumption. So that's

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Speaker 6: been a great trend for these guys. It's diversified them

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Speaker 6: and it's got a long shelf life here too.

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Speaker 2: Did the elections and the election of President elect Trump

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Speaker 2: and the Republican control of Congress.

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Speaker 5: How's that going to impact healthcare? What's the feeling out there?

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Speaker 6: Yeah, so I think it's a wait and see. You know,

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Speaker 6: the President elect Trump did not campaign on many healthcare issues,

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Speaker 6: although obviously there's stuff.

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Speaker 7: Swirling in the background.

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Speaker 6: You know what we saw out of the last administration

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Speaker 6: with some ideas around limiting PBMs that never came to pass.

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Speaker 6: There's a thought that maybe that will come back in

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Speaker 6: this administration.

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Speaker 3: So these are pharmacy benefit These are.

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Speaker 6: Pharmacy benefit managers. The big three are CBS Care, Mark,

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Speaker 6: Express Scripts, which is owned by Signa, and then United Healthcare.

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Speaker 6: They own optim Rx and so actually in December, Senators

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Speaker 6: Warren and Hawley introduced a bipartisan bill where they would

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Speaker 6: ban these PBMs or managed care companies from owning pharmacies.

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Speaker 6: We don't think there's very much chance of that bill passing,

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Speaker 6: but it still points to kind of the rhetoric and

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Speaker 6: saber rattling coming around out of Washington around some of

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Speaker 6: these healthcare models.

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Speaker 3: So does that just mean a harder year for CBS,

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Speaker 3: Signa and United Health even if that kind of split

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Speaker 3: doesn't happen.

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Speaker 6: Yeah, I think it's pretty unlikely that that split comes

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Speaker 6: to pass. But I think it points to the anger

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Speaker 6: that a lot of people have, you know, in the

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Speaker 6: marketplace around healthcare and who they have to deal with.

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Speaker 2: Tell us about the drug distribution business, why do you

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Speaker 2: like that business? And what are the names that sure?

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Speaker 6: So there's three big companies what you used to be

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Speaker 6: called Amerisource Bergen but it's now called Sancora, Cardinal Health,

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Speaker 6: and McKesson. I mean, these are really great, fundamental businesses.

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Speaker 6: They controlled ninety percent of the US drug distribution. It's

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Speaker 6: not just logistics. I think it's simplistic to think of

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Speaker 6: that way that they just get the drugs and they

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Speaker 6: take them from the manufacturer's warehouse to the local pharmacy.

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Speaker 7: They've built a whole host of these.

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Speaker 6: Service businesses around all of that, and that's where the

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Speaker 6: future of those businesses really is.

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Speaker 3: Well what does that mean? So why isn't it just

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Speaker 3: the logistics? So give it pin us a bigger picture.

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Speaker 6: Yeah, so I talked about it before those MSO businesses.

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Speaker 6: McKesson owns what they call us oncology, which is this

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Speaker 6: massive network of oncologists. It's about twenty percent of the

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Speaker 6: community oncologists in the country, and so that's really like

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Speaker 6: a captive, captive portal of business. There's all those oncologists

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Speaker 6: order through McKesson. McKesson manages their EHR, they manage the billing.

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Speaker 6: So it's actually really branching out outside of the pure

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Speaker 6: logistics peace SO healthcare.

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Speaker 2: I'm looking at the S and P five hundred up

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Speaker 2: twenty three percent last year at S and P healthcare

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Speaker 2: sector kind of flatish. So what's the investment backdrop for

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Speaker 2: just healthcare right now?

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Speaker 8: Yeah?

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Speaker 6: I think it depends where you're looking. I mean, I

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Speaker 6: don't focus in therapeutic so I'm probably not the best

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Speaker 6: person to ask about the biotech.

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Speaker 7: World or pharma.

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Speaker 6: But outside of that, you know, we've seen a lot

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Speaker 6: of pain in the managed care world around medicare. Most

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Speaker 6: of those companies, particularly CBS in particular, have suffered because

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Speaker 6: out of the pandemic we've seen a lot of utilization

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Speaker 6: of care that's caused margins to collapse in medicare advantage

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Speaker 6: and that's one of the big growth areas in the

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Speaker 6: managed care world. So managed care is a little bit

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Speaker 6: of a slog right now, you know. Outside of that,

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Speaker 6: and let's say like Life science technology, those companies have

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Speaker 6: been dealing with a poor demand from pharma and trouble

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Speaker 6: in China. China hasn't been the best market for them

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Speaker 6: for a while. And then on this on the more

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Speaker 6: like let's say service side or technology side, I think

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Speaker 6: it depends on where you play. DTC models were very popular,

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Speaker 6: things like telemedicine and virtual care during the pandemic. Those

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Speaker 6: have come back, but some of the survivors, the Hymns

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Speaker 6: and Rows which is a private company, are seeing a

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Speaker 6: lot of uptake around GLP one drugs and so it's

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Speaker 6: a little bit hit or missed depending on where you're playing.

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Speaker 3: What do you think the GLP one drug forecast is

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Speaker 3: for this year high? But like we'll ensures like finally

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Speaker 3: cover it.

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Speaker 6: Well, that's I think that's the big debate, I mean

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Speaker 6: around who's going to pay for what? And then it's

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Speaker 6: happening on the commercial side, you know, employers, it's happening

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Speaker 6: in medicare and medicaid. The demand is queerly there. It's

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Speaker 6: just you know, what can people afford to pay? And

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Speaker 6: so there's a whole host of business models that have

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Speaker 6: kind of arisen around you know, circum not circumventing, but

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Speaker 6: work outside of of the pure insurance. These are the

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Speaker 6: things like hymns, which I just mentioned, where if you

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Speaker 6: just want to pay out of pocket, you're gonna get

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Speaker 6: yourself a GLP one.

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Speaker 3: It was a whole compound thing, right, Like, wasn't there

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Speaker 3: compound right that you can.

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Speaker 2: Have hymns and all that kind of that's receipt I

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Speaker 2: think all the ads are around.

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Speaker 3: Yeah.

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Speaker 6: Yeah, So when drugs are in shortage, which many of

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Speaker 6: these GLP one drugs are, where the compound pharmacies can

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Speaker 6: meet that demand by using kind of generic compounded drugs.

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Speaker 2: Is AI in your space at all? I'm sure your

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Speaker 2: research strugger said, write a research report on how AI impacted.

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Speaker 3: You have to have it so you can search it.

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Speaker 7: Yeah, it's everywhere.

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Speaker 6: I mean my view is that a lot of there's

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Speaker 6: there's probably going to be a handful of kill raps,

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Speaker 6: things around voice and ambient listening. We've seen some of that.

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Speaker 6: Microsoft bought a company called Nuance a few years back.

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Speaker 6: I'm sure there's others a lot of it I think

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Speaker 6: is going to be table stakes, particularly for the stuff

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Speaker 6: that's back office, you know, for payment processing, claims, adjudication.

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Speaker 6: Everybody's going to do that, so it's definitely top of

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Speaker 6: mind for most management teams.

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Speaker 2: Here our thanks to Jonathan Palmer, Bloomberg Intelligence Senior healthcare analyst,

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Speaker 2: we turned out to the oil and gas industry. This week,

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Speaker 2: President Biden announced till block six hundred and twenty five

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Speaker 2: million acres of ocean from offshore oil and gas drilling.

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Speaker 2: He cited environmental and health risk for more. Co host

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Speaker 2: Alex Steel and I were joined by Simon Casey, Bloomberg

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Speaker 2: Managing Editor for Energy and Commodities. We first assignment if

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Speaker 2: Biden's actions will hurt oil production.

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Speaker 8: Offshore oil counts for I think fourteen percent of US output,

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Speaker 8: which is something, but it's not everything, and most of

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Speaker 8: the US oil outputs I think we all know comes

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Speaker 8: from shale. Shelle production grew substantially last year. It's probably

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Speaker 8: slowing a bit, but that's where the industry has really

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Speaker 8: grown enormously over the past decade and probably will continue

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Speaker 8: to grow for a few years to come. It could

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Speaker 8: slow this year, as I say, but there's huge wich

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Speaker 8: amounts resources toll long Land.

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Speaker 2: So is this something that President ELEC. Trump when he

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Speaker 2: is sworn in, he can turn this around with another

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Speaker 2: executive action he can try.

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Speaker 8: But if I think it was back in the beginning

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Speaker 8: of twenty seventeen, there was a similar band put in place,

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Speaker 8: not on such a grand scale by Obama. But Trump

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Speaker 8: came in, he made an order to reverse that decision

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Speaker 8: and it was stopped I think in the Supreme Court

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Speaker 8: in Alaska. I think I'm right in saying it didn't

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Speaker 8: go beyond that. So there's no legal precedent for an

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Speaker 8: incoming president to overturn an order such as this one.

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Speaker 3: And the argument that it would hurt oil and gas offshore,

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Speaker 3: even tho it's only fourteen percent, a large portion that

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Speaker 3: comes on the Gulf of Mexico is a Golf of

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Speaker 3: Mexico included in the six hundred and twenty five. Yes, yes,

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Speaker 3: it is how much of it is in that versus

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Speaker 3: say the East coast or around Florida, for example.

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Speaker 8: I don't have the numbers right in front of I mean, look,

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Speaker 8: the Gulf Mexico is an important component of US oil production.

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Speaker 8: It's also we should note, it's low cost, it's relatively stable.

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Speaker 8: But I mean, this is a very clear move by

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Speaker 8: Biden to appease the environmental lobby, the left wing of

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Speaker 8: his base. If you cast your mind back to the

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Speaker 8: beginning of the Biden presidency, he came in on quite

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Speaker 8: a sort of a progressive energy agenda. He was trying

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Speaker 8: to clamp down on oil production. He was very emphasizing

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Speaker 8: a great deal his priority to tackle climate change. What's

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Speaker 8: happened in the year since then, of course, we had

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Speaker 8: spikes and energy prices, we had the war in Ukraine,

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Speaker 8: energy security came to the fore. So in all ways,

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Speaker 8: this is sort of his parting gift, if you like,

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Speaker 8: to that part of the environmental lobby into his supporters

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Speaker 8: who wanted to see him all along try and clamp

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Speaker 8: down on the oil industry to some extent.

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Speaker 2: All right, So like the deep water issue that happened

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Speaker 2: in the golf. I guess that's kind of a worst

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Speaker 2: case scenario for this offshore, you know. I guess I'm

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Speaker 2: just trying to get a sense of the risk reward here,

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Speaker 2: you know, and get away from the politics a little bit.

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Speaker 2: And it seems like with fracking, maybe you don't need

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Speaker 2: it as much, but at some point you might need it.

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Speaker 3: Context here. So Paul's watching land Man, so now he's

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Speaker 3: a complete shale expert, but now we're talking offshore, and

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Speaker 3: now it's DVD, so it's just the context here.

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Speaker 8: Yeah, de brought Horizon worst case scenario.

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Speaker 5: It's not that movie.

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Speaker 7: But I mean, you know, when.

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Speaker 8: That kind of thing happens maybe once in a decade,

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Speaker 8: once every three decades, it's a catastrophe. As we all saw.

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Speaker 8: We all remember there are risks anyway you drill. To

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Speaker 8: be sure, there are huge environmental issues on the shore,

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Speaker 8: and we should sort of downplay those either. Biden, in

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Speaker 8: his announcement this morning, may clear this is you know,

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Speaker 8: it's in relation to environmental risks. He also cited climate

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Speaker 8: He also cited the risks to communities on im Sure,

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Speaker 8: you know, let's not forget the sort of the infrastructure

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Speaker 8: the industries. While they do provide a huge economic stimulus

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Speaker 8: somewhere like on the Gulf Coast. They're also daily sort

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Speaker 8: of environmental reminders, small oil leaks, the kind of things

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Speaker 8: we don't always reports on, frankly, but they do have

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Speaker 8: a cumulative impact. Did the impacts on wildlife? On BirdLife?

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Speaker 8: Let's not forget as well that you know President Trump

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Speaker 8: when in his first term he tried to clam down

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Speaker 8: on drilling off off the coast of Florida.

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Speaker 2: All right, thanks to Simon Casey, Bloomberg Managing editor for

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Speaker 2: Energy and Commodities. Coming up, more breakdown how the energy

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Speaker 2: sector may fare under an incoming Trump administration.

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Speaker 5: We're listening to.

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Speaker 2: Bloomberg Intelligence on Bloomberg Radio, providing into research and data

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Speaker 2: on two thousand companies.

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Speaker 5: And one hundred and thirty industries.

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Speaker 2: You can access Bloomberg Intelligence via big on the terminal

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Speaker 2: pass Sweeney, this is Bloomberg.

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Speaker 4: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 4: weekdays at ten am Eastern but Apple CarPlay and Android

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Speaker 4: Auto with a Bloomberg Business app. Listen on demand wherever

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Speaker 4: you get your podcasts, or watch us live on YouTube.

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Speaker 2: We move now to some of the key market themes

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Speaker 2: Bloomberg Intelligence is focusing on in twenty twenty five, mainly

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Speaker 2: from a European and global perspective.

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Speaker 5: This week, co host Alex Steele and I.

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Speaker 2: Were joined by Tim Craig head, Bloomberg Intelligence Global Chief

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Speaker 2: Content Officer. He discussed everything from earning season to how

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Speaker 2: a Donald Trump presidency will impact the globe in terms

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Speaker 2: of towers. We first asked him to break down his

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Speaker 2: recent research.

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Speaker 9: We're actually seeing some positive revisions to earnings in Europe

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Speaker 9: and in particular in the UK, which actually flies in

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Speaker 9: the face of an awful lot of other markets, including

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Speaker 9: elements of the US market. Heading into urine earnings, where

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Speaker 9: we're starting to see some negative revisions. Actually it started

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Speaker 9: back a couple of few months ago, so that element

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Speaker 9: of its cheap det jump in because it's that's an

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Speaker 9: old argument, but if there's an earnings catalyst behind it,

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Speaker 9: it gets interesting.

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Speaker 3: What about tariffs? How we thinking about tariffs from the

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Speaker 3: US on all the things?

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Speaker 9: Yeah, well, I think our economists are pretty smart, arguing

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Speaker 9: that terrorifts are more of a twenty twenty six thing

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Speaker 9: than twenty five.

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Speaker 7: It's more of a posture, of a.

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Speaker 9: Posturing element for this year in front of working out negotiations. He's,

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Speaker 9: you know, the art of the deal. He loves negotiating,

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Speaker 9: and so you know, that's how tariffs will be will

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Speaker 9: be used. Specifically from a European perspective, frankly, it's a

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Speaker 9: lot less of an issue than you might guess. An

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Speaker 9: awful lot of what Europe sells to the US is

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Speaker 9: either services or it's stuff that's already manufactured over here.

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Speaker 9: It's an interesting interview with Unilever, and you know, one

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Speaker 9: of the queries that Francine Lacui had asked him is,

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Speaker 9: you know, isn't this really bad for you? You know,

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Speaker 9: because you're a European consumer product company. It's like, no,

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Speaker 9: we're US consumer product company. We manufacture in the US

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Speaker 9: with US brands. We happen to be headquartered in London.

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Speaker 9: But I don't think it's that big of the deal, frankly,

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Speaker 9: except in targeted, specific areas that you have to watch

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Speaker 9: out for.

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Speaker 5: Maybe that's autos.

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Speaker 2: It's interesting here in the US since the election, there's

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Speaker 2: been a poppable sense of optimism from the business community,

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Speaker 2: thinking in that this administration would be pro business, pro growth,

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Speaker 2: and that is argued as one of the drivers of

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Speaker 2: the stock market performance we've seen since kind of you know,

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Speaker 2: August September, when we became clear that gem President Trump,

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Speaker 2: former President Trump might in fact win this thing.

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Speaker 5: And is that what you're hearing from your European clients?

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Speaker 2: How are your European clients thinking about the change we're

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Speaker 2: gonna have here?

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Speaker 7: I actually heard some.

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Speaker 2: Europeans were putting more and more money into the US

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Speaker 2: markets over the last few months.

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Speaker 9: Yeah, I would totally agree with your conclusion. There's obviously

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Speaker 9: lots of room to discuss and debate on the political

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Speaker 9: side of things, whether you like it or you don't

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Speaker 9: like it. Set all that aside, the idea that you're

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Speaker 9: going to cut regulation and you're going to cut taxes,

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Speaker 9: and maybe you're going to do things on immigration and tariffs,

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Speaker 9: but that's to come. I don't that's that's not going

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Speaker 9: to impact this year's earnings trends, and so yeah, I

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Speaker 9: think it's I think it's a positive when you think

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Speaker 9: about it from a business and economic perspective. For the moment,

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Speaker 9: it's more of the earnings impetus that's good, and the

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Speaker 9: inflation worry gets sort of pushed out a little bit

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Speaker 9: and European companies who have they do so much business

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Speaker 9: back and forth, with again a lot of it being domesticated.

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Speaker 7: That's that's a good thing.

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Speaker 3: What about the tariff risks when it comes to China,

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Speaker 3: because if China gets hit hard, doesn't that wind up

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Speaker 3: feeding into Europe particular when it comes to say luxury

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Speaker 3: goods and cars.

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Speaker 9: Well, I would agree with you to a degree. I mean, frankly,

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Speaker 9: if the whole tariff thing really goes heavy and there's

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Speaker 9: lots of retaliation. The Bloomberg Economist had done a really

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Speaker 9: interesting piece you guys will recall that basically shows the

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Speaker 9: biggest hit is Mexico. The second biggest hit the US.

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Speaker 9: China has already curtailed so much of what they sell

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Speaker 9: here other than certain products, it's less of an issue

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Speaker 9: for the Chinese economy, and it'll end up importantly reglobalizing

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Speaker 9: connections and supply chains. It could end up being good

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Speaker 9: for Europe in a weird way, because they're now a

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Speaker 9: big developed market participant with the US going more insular.

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Speaker 2: Thanks to Tim Craig, d Bloomberg Intelligence Global Content Officer,

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Speaker 2: we now turn to the energy space as Inauguration day approaches.

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Speaker 2: The energy sector looks for signs of what to expect

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Speaker 2: when President elect Donald Trump takes office. For more, co

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Speaker 2: host Alex Deel and I were joined by Mike Summers,

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Speaker 2: President and CEO of the American Petroleum Institute. We first

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Speaker 2: asked Mike what day one under Trump administration will look

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Speaker 2: like for the energy sector.

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Speaker 10: Well, we've played out an API five point policy roadmap.

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Speaker 10: You can find it at API dot org of the

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Speaker 10: things that we're asking this president in this Congress to

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Speaker 10: do during the first six months of the administration.

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Speaker 7: But there are some things.

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Speaker 10: That they can get done early in the administration, really

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Speaker 10: on day one. So one of those things is lifting

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Speaker 10: the LNG export pause. We're excited that we have a

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Speaker 10: new president that's focused on that and he's committed to

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Speaker 10: lifting it.

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Speaker 7: On day one.

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Speaker 10: So that's one thing we think that they can get

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Speaker 10: done very quickly. The second thing that we think they

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Speaker 10: can do is they can authorize a new five year

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Speaker 10: leasing plan in the offshore golf of Mexico. We need

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Speaker 10: a five year leasing plan that prioritizes new leases in

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Speaker 10: the golf of Mexico, which continues to be a prolific

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Speaker 10: region for the American oil and gas industry. About fourteen

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Speaker 10: percent of American oil comes from the golf of Mexico,

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Speaker 10: which is why what President Biden did in setting aside

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Speaker 10: a new acreage that we will not be able to

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Speaker 10: develop with so concerning and so disappointing.

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Speaker 7: Another big thing that we're focused on.

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Speaker 10: Is repealing the EPA tailpipe mandate, the ev mandate that

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Speaker 10: they put in place early in the Biden administration, and

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Speaker 10: we'll work with the Trump administration to get that repealed

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Speaker 10: and replace the CAFE standards that are draconian and US

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Speaker 10: automakers can't meet. So those are three of the key

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Speaker 10: priorities that we want to focus on early in the administration.

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Speaker 10: And then in addition to that, we need to get

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Speaker 10: a new tax bill in place before the end of

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Speaker 10: twenty twenty five. We're prioritizing things like the corporate tax rate,

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Speaker 10: of course, and then really focusing on how we continue

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Speaker 10: to build American geopolitical strength by expanding energy trade throughout

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Speaker 10: the world.

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Speaker 2: Green energy, how does green energy work with traditional energy?

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Speaker 2: I'm not sure what the preferred term is for oil

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Speaker 2: and gas, but how does green energy work with oil

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Speaker 2: and gas and traditional energy sources?

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Speaker 10: Well, the truth of the matter is is that we

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Speaker 10: know that we're going to need all sorts of energy

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Speaker 10: to meet the energy needs of the future. If Goldmen

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Speaker 10: Sacks is right and we're going to need ten percent

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Speaker 10: more energy for the next ten years to support data

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Speaker 10: centers and AI growth, we're gonna need all sources of

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Speaker 10: new energy, which is why it's important that we get

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Speaker 10: a new permitting bill in place that we can build

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Speaker 10: out not just oil and gas pipelines, but new transmission

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Speaker 10: lines for that those new energy sources as well. The

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Speaker 10: great thing about natural gas in particular is that it

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Speaker 10: can support these alternative energy sources as well. Because we

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Speaker 10: know that the wind isn't always blowing and the sun

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Speaker 10: isn't always shining, You're gonna need something to back that up,

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Speaker 10: and natural gas is almost always the preferred energy of

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Speaker 10: choice when backing up those sources.

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Speaker 7: So we know that we're going to need more energy.

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Speaker 10: We don't just need all of the above, but more

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Speaker 10: of all if we're going to be successful in leading

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Speaker 10: the future, particularly when it comes to AI. So we

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Speaker 10: want to work with our partners in the other energy

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Speaker 10: system to make sure that we can continue to expand.

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Speaker 3: So it might also, yeah, I would say a popular

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Speaker 3: talking point for Republicans was that we need to get

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Speaker 3: rid of the Inflation Reduction Act. But if you dig

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Speaker 3: into a lot of the details, a lot of the

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Speaker 3: oil guys and natural gas guys like the Inflation Reduction

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Speaker 3: Act in things like carbon capture credits right forty five Q.

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Speaker 3: New rules on the hydrogen tax credit forty five V

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Speaker 3: were unveiled that people were pretty happy with because it

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Speaker 3: had a broader swath of the energy that you could

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Speaker 3: use to make hydrogen. Are you guys happy with those

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Speaker 3: things right now?

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Speaker 10: I actually feel pretty good about our ability to defend

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Speaker 10: the forty five tax credits Q and V are the

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Speaker 10: ones that are most important to us for carbon.

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Speaker 7: Capture and hydrogen.

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Speaker 10: We were pleased with the Biden administration rules, though we

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Speaker 10: think they could be improved under President Trump on both

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Speaker 10: ccs and hydrogen, so we'll work with the Trump administration

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Speaker 10: to improve those. But there are provisions I think that

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Speaker 10: under the Inflation Reduction Act that are vulnerable, particularly the

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Speaker 10: funds from the Loan Program Office, which has just become

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Speaker 10: a giant slush fund for favored industries under the Biden administration.

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Speaker 7: So I do think the funds.

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Speaker 10: That haven't been obligated yet under the Loan Program Office

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Speaker 10: are very vulnerable as Congress that looks towards towards reconciliation.

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Speaker 7: So that's where I think most of the purpose will be.

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Speaker 3: But some of the money from the Department of Loan

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Speaker 3: Office is going to like companies that produce a nuclear

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Speaker 3: or have natural gas like it's it's it's not just

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Speaker 3: like Rando green technology. How are you going to distinguish that?

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Speaker 3: Because if you need the loan in order to say,

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Speaker 3: restart a nuclear plan or work into small modular reactors,

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00:22:27,520 --> 00:22:29,160
Speaker 3: for example, what do you think about that?

442
00:22:29,920 --> 00:22:31,760
Speaker 10: Well, I think that's going to be something that Congress

443
00:22:31,800 --> 00:22:34,080
Speaker 10: is going to have to sort out and the administration

444
00:22:34,160 --> 00:22:35,920
Speaker 10: is going to have to sort out. I'm pretty sure

445
00:22:35,960 --> 00:22:37,879
Speaker 10: that at the beginning of the administration what they're going

446
00:22:37,920 --> 00:22:39,880
Speaker 10: to do is they're going to freeze all new funds

447
00:22:40,160 --> 00:22:42,840
Speaker 10: coming from the Loan Program Office until they get a

448
00:22:42,840 --> 00:22:45,040
Speaker 10: better census to what to leave in and what to

449
00:22:45,119 --> 00:22:47,640
Speaker 10: leave out. And that'll be up to the new Energy Secretary,

450
00:22:47,720 --> 00:22:50,359
Speaker 10: Chris Right And you know, I'm confident that they'll be

451
00:22:50,400 --> 00:22:53,560
Speaker 10: able to figure out what they should what they should

452
00:22:53,560 --> 00:22:54,760
Speaker 10: focus on, and the things.

453
00:22:54,560 --> 00:22:57,840
Speaker 7: That they need to leave behind, but that'll be up

454
00:22:57,880 --> 00:22:58,680
Speaker 7: to the administration.

455
00:22:58,960 --> 00:23:00,720
Speaker 10: You know, our focus is going to be on advancing

456
00:23:00,720 --> 00:23:04,800
Speaker 10: a reconciliation bill that supports American energy, that means new

457
00:23:04,880 --> 00:23:08,680
Speaker 10: leases in the offshore, new leases on shore, reopening Alaska,

458
00:23:08,720 --> 00:23:12,679
Speaker 10: which President Biden has taken a particularly focus on in

459
00:23:12,760 --> 00:23:16,080
Speaker 10: terms of cutting off the amount of oil and gas

460
00:23:16,160 --> 00:23:18,199
Speaker 10: that we can produce in the state of Alaska. So

461
00:23:18,640 --> 00:23:20,439
Speaker 10: we're confident that we're going to be able to prevail

462
00:23:20,480 --> 00:23:23,480
Speaker 10: on the administration and the Congress to advance new leasing

463
00:23:23,560 --> 00:23:26,760
Speaker 10: priorities as they get that big new reconciliation bill.

464
00:23:26,840 --> 00:23:27,000
Speaker 7: One.

465
00:23:27,200 --> 00:23:28,840
Speaker 2: What do we have you heard what have been I

466
00:23:28,840 --> 00:23:31,639
Speaker 2: guess maybe any rubblings coming out of this new Trump

467
00:23:31,640 --> 00:23:34,600
Speaker 2: administration about how aggressive they planned to be as a

468
00:23:34,640 --> 00:23:35,879
Speaker 2: related to oil and gas.

469
00:23:36,520 --> 00:23:38,000
Speaker 7: I think they plan to be very aggressive.

470
00:23:38,040 --> 00:23:40,760
Speaker 10: I mean, as you know, the President has really focused

471
00:23:40,760 --> 00:23:44,880
Speaker 10: on how do we continue to grow this tremendous American resource.

472
00:23:45,160 --> 00:23:47,879
Speaker 10: We're producing about thirteen point four million barrels of oil

473
00:23:47,920 --> 00:23:51,240
Speaker 10: every a single day, which is a record. We're producing

474
00:23:51,320 --> 00:23:54,159
Speaker 10: records amounts of natural gas, but we also see record

475
00:23:54,200 --> 00:23:56,480
Speaker 10: demand for these products, not just record demand for oil

476
00:23:56,520 --> 00:23:58,840
Speaker 10: and gas, but also record demand for coal and other

477
00:23:58,920 --> 00:24:01,440
Speaker 10: sources as well, and that's because we're starting to see

478
00:24:01,440 --> 00:24:05,119
Speaker 10: this demand continue to increase. This we're in a different

479
00:24:05,119 --> 00:24:07,640
Speaker 10: era than we were during the first Trump administration, where

480
00:24:07,720 --> 00:24:09,600
Speaker 10: energy demand was relatively stable.

481
00:24:10,000 --> 00:24:13,040
Speaker 7: During the first Trump administration. Everything's changed in the.

482
00:24:13,080 --> 00:24:16,480
Speaker 10: Last eight years where you have new sources of demand,

483
00:24:16,520 --> 00:24:19,800
Speaker 10: growing data centers of course AI more things being.

484
00:24:19,600 --> 00:24:20,879
Speaker 7: Plugged into the electric grid.

485
00:24:21,040 --> 00:24:23,480
Speaker 10: So I think with what President Trump understands is that

486
00:24:23,520 --> 00:24:25,960
Speaker 10: we're going to need a lot of energy going forward

487
00:24:25,960 --> 00:24:27,920
Speaker 10: if we're going to win the energy security race.

488
00:24:28,520 --> 00:24:32,560
Speaker 2: Thanks to Mike Summers, API President and CEO coming up

489
00:24:32,560 --> 00:24:34,520
Speaker 2: on the program, we'll break down some of the big

490
00:24:34,560 --> 00:24:36,240
Speaker 2: staffing moves in the financial sector.

491
00:24:36,720 --> 00:24:38,200
Speaker 5: You're listening to Bloomberg.

492
00:24:37,760 --> 00:24:40,960
Speaker 2: Intelligence on Bloomberg Radio, providing in depth research and data

493
00:24:41,000 --> 00:24:43,360
Speaker 2: on two thousand companies and one hundred and thirty industries.

494
00:24:43,640 --> 00:24:46,359
Speaker 2: You can access Bloomberg Intelligence via Big on the terminal.

495
00:24:46,480 --> 00:24:48,640
Speaker 5: I'm Paul Sweeney. This is Bloomberg.

496
00:24:54,520 --> 00:24:58,080
Speaker 4: You were listening to the Bloomberg Intelligence Podcast. Catch the

497
00:24:58,119 --> 00:25:01,800
Speaker 4: program live weekdays at ten Eastern on Apple car Play

498
00:25:01,920 --> 00:25:04,720
Speaker 4: and Android Auto with the Bloomberg Business app. You can

499
00:25:04,760 --> 00:25:07,919
Speaker 4: also listen live on Amazon Alexa from our flagship New

500
00:25:08,000 --> 00:25:11,439
Speaker 4: York station Just Say Alexa played Bloomberg eleven thirty.

501
00:25:12,440 --> 00:25:14,080
Speaker 5: We turn next to the banking sector.

502
00:25:14,119 --> 00:25:17,200
Speaker 2: Bloomberg Intelligence recently put out its twenty twenty five outlook

503
00:25:17,240 --> 00:25:20,960
Speaker 2: for global asset managers ahead of US bank earnings next week.

504
00:25:21,040 --> 00:25:23,280
Speaker 2: For more of bi's findings, co host Alex Steele and

505
00:25:23,320 --> 00:25:26,560
Speaker 2: I were joined by Alison Williams, Bloomberg Intelligence senior analys

506
00:25:26,600 --> 00:25:29,920
Speaker 2: global banks and asset managers. We first asked Allison about

507
00:25:29,960 --> 00:25:32,240
Speaker 2: some of the themes to watch out for when bank

508
00:25:32,280 --> 00:25:32,880
Speaker 2: earnings begin.

509
00:25:33,119 --> 00:25:36,320
Speaker 11: The market's momentum is obviously the big story entering twenty

510
00:25:36,400 --> 00:25:39,480
Speaker 11: twenty five, and the first quarter does tend to be

511
00:25:39,800 --> 00:25:43,440
Speaker 11: the seasonally strongest quarter for the global investment banking business.

512
00:25:43,440 --> 00:25:47,160
Speaker 11: We also do tend to get so good flows into

513
00:25:47,200 --> 00:25:50,760
Speaker 11: the asset management business, so we think we're starting off

514
00:25:50,760 --> 00:25:56,679
Speaker 11: the year with strength. Also noting that the world's market

515
00:25:56,720 --> 00:26:00,240
Speaker 11: capitalization hit a new high in mid December. Since we've

516
00:26:00,240 --> 00:26:01,960
Speaker 11: seen a little bit of a sell off in our

517
00:26:02,320 --> 00:26:06,160
Speaker 11: global equity strategy team, led by Gena Martin Adams, has

518
00:26:06,240 --> 00:26:08,840
Speaker 11: actually flagged the fact that they, you know, they are

519
00:26:08,920 --> 00:26:12,399
Speaker 11: seeing some signs that are making them a little bit

520
00:26:12,440 --> 00:26:17,600
Speaker 11: more embarrassed, but from an earnings perspective, you know, they

521
00:26:18,240 --> 00:26:21,480
Speaker 11: keep in mind that we are so the markets are

522
00:26:21,520 --> 00:26:23,840
Speaker 11: so far above a year ago. We're going to see

523
00:26:23,880 --> 00:26:28,000
Speaker 11: good year over year growth. The etflows are strong, bond

524
00:26:28,040 --> 00:26:32,080
Speaker 11: flows are strong. So we're expecting to hear good things

525
00:26:32,080 --> 00:26:35,440
Speaker 11: from the banks when they report next week, and as

526
00:26:35,480 --> 00:26:37,840
Speaker 11: I said, really some good momentum entering the year.

527
00:26:38,520 --> 00:26:41,280
Speaker 2: Alie, I don't want to talk to you about asset management,

528
00:26:41,320 --> 00:26:43,240
Speaker 2: the global asset managers, because the more I talk to

529
00:26:43,280 --> 00:26:45,880
Speaker 2: this about Chunis guy, the more I kind of say,

530
00:26:46,200 --> 00:26:48,200
Speaker 2: what's going to happen to all those great mutual fund

531
00:26:48,200 --> 00:26:50,879
Speaker 2: companies that I grew up with as my clients, the

532
00:26:50,920 --> 00:26:53,200
Speaker 2: fidelities of the world's, the capitals of the world, the

533
00:26:53,240 --> 00:26:54,879
Speaker 2: alliances where you hung a.

534
00:26:54,840 --> 00:26:57,480
Speaker 5: Shingle for a while, What is that business? What happens

535
00:26:57,480 --> 00:26:58,120
Speaker 5: to that business?

536
00:26:59,440 --> 00:27:04,280
Speaker 11: So consolidation has been something that, as you know, for

537
00:27:04,480 --> 00:27:06,240
Speaker 11: for as long as we've been in the business, there's

538
00:27:06,280 --> 00:27:10,240
Speaker 11: been huge calls for consolidation because that really makes sense

539
00:27:10,320 --> 00:27:13,600
Speaker 11: on paper, right, you have a business that you can scale,

540
00:27:14,000 --> 00:27:17,240
Speaker 11: You have this intellectual capital that you can scale, and

541
00:27:17,280 --> 00:27:20,159
Speaker 11: I think Eric Belchuns will always say, hey, you know

542
00:27:20,840 --> 00:27:23,960
Speaker 11: Wellington and Tiro why can't they get together? But as

543
00:27:23,960 --> 00:27:26,320
Speaker 11: we also know, it's you know, it's all about culture

544
00:27:26,320 --> 00:27:30,560
Speaker 11: for these asset managers. And really culture and process is

545
00:27:30,800 --> 00:27:35,639
Speaker 11: what makes active managers great and really what they stick to,

546
00:27:35,720 --> 00:27:39,720
Speaker 11: and so that's really what makes deals difficult. And also

547
00:27:39,760 --> 00:27:42,760
Speaker 11: the fact that what you're buying really is, you know,

548
00:27:42,840 --> 00:27:46,440
Speaker 11: a culture and a process and people. And so even

549
00:27:46,440 --> 00:27:48,959
Speaker 11: though deals look good on paper, it's a lot harder

550
00:27:49,000 --> 00:27:53,679
Speaker 11: to do practically speaking. But we think that you know,

551
00:27:53,880 --> 00:27:57,399
Speaker 11: managers will continue to look to see for opportunities, you know,

552
00:27:57,440 --> 00:28:01,960
Speaker 11: are there opportunities for fun consolidation, are their opperportunities within managers?

553
00:28:02,680 --> 00:28:05,720
Speaker 11: So we do think that that continues. We've also seen

554
00:28:05,760 --> 00:28:10,879
Speaker 11: the traditional managers buying into the alternatives business, so active

555
00:28:10,920 --> 00:28:14,000
Speaker 11: fund management has been under pressure. It is still the

556
00:28:14,000 --> 00:28:17,920
Speaker 11: biggest business buy assets worldwide. We just want to note

557
00:28:17,920 --> 00:28:25,200
Speaker 11: that to Eric, But the alternative business is where all

558
00:28:25,240 --> 00:28:28,440
Speaker 11: the growth is. Pe has been a phenomenal growth story

559
00:28:28,440 --> 00:28:32,760
Speaker 11: for many, many years. Private credit really getting into it

560
00:28:32,840 --> 00:28:34,439
Speaker 11: and seeing some faster growth.

561
00:28:34,720 --> 00:28:36,520
Speaker 3: So I'm going to go back to banks, but there's

562
00:28:36,560 --> 00:28:38,080
Speaker 3: kind of a tie over, especially when it comes to

563
00:28:38,080 --> 00:28:41,080
Speaker 3: private credit. If we have William bar stepping aside. Do

564
00:28:41,120 --> 00:28:45,000
Speaker 3: we anticipate less capital requirements, less stringent FED stress tests

565
00:28:45,040 --> 00:28:48,120
Speaker 3: and does that bring them into sort of the private

566
00:28:48,120 --> 00:28:50,480
Speaker 3: credit marketing world again.

567
00:28:50,760 --> 00:28:53,360
Speaker 11: Well, I would say that the banks have already been

568
00:28:53,840 --> 00:28:57,240
Speaker 11: participating through partnerships. And you know, one of the best

569
00:28:57,280 --> 00:28:59,920
Speaker 11: examples that we always point to is what Golden Stats

570
00:28:59,920 --> 00:29:02,720
Speaker 11: is been doing with their asset management business. Right, So

571
00:29:03,400 --> 00:29:05,959
Speaker 11: for a long time, Golden Tex has had this merchant

572
00:29:05,960 --> 00:29:09,520
Speaker 11: banking expertise and for many decades they were investing their

573
00:29:09,520 --> 00:29:13,479
Speaker 11: own balance sheet. But you know, within the last you know,

574
00:29:13,600 --> 00:29:15,800
Speaker 11: several years, what they've said is, look, we're going to

575
00:29:15,920 --> 00:29:17,800
Speaker 11: use that expertise and we're going to manage clients money.

576
00:29:17,800 --> 00:29:20,440
Speaker 11: We're going to charge you a fee. Investors like this

577
00:29:20,480 --> 00:29:23,280
Speaker 11: because there's less direct balance sheet risk, there's more fees.

578
00:29:24,240 --> 00:29:27,680
Speaker 11: That's a business that gains higher multiples. And so they

579
00:29:27,840 --> 00:29:31,680
Speaker 11: have and they've been expanding in the private credit space

580
00:29:32,560 --> 00:29:35,120
Speaker 11: with that business, and I think banks are also doing

581
00:29:35,160 --> 00:29:40,720
Speaker 11: it with different partnerships, and so the banks have been

582
00:29:40,800 --> 00:29:44,040
Speaker 11: active on that front, and we do expect that that

583
00:29:44,080 --> 00:29:45,720
Speaker 11: business to continue to expand.

584
00:29:46,800 --> 00:29:51,760
Speaker 2: So Allison, one of the trump trade sectors that I

585
00:29:51,800 --> 00:29:55,560
Speaker 2: hear all the time has been financials because maybe the

586
00:29:56,000 --> 00:30:00,520
Speaker 2: lighter deregulation touch, maybe lower taxes, that kind of thing,

587
00:30:00,840 --> 00:30:04,880
Speaker 2: and the stocks have reacted generally speaking, how much of

588
00:30:04,880 --> 00:30:07,000
Speaker 2: that trade is still left here? I'm looking over trailing

589
00:30:07,000 --> 00:30:08,920
Speaker 2: twelve months, a lot of the big names are up

590
00:30:08,960 --> 00:30:09,800
Speaker 2: thirty forty percent.

591
00:30:11,480 --> 00:30:14,560
Speaker 11: Yeah, so I think, you know, we have seen the

592
00:30:14,600 --> 00:30:17,200
Speaker 11: stocks move. Part of that is earning's driven. I talked

593
00:30:17,240 --> 00:30:19,320
Speaker 11: about the capital markets momentum, and part of that is

594
00:30:19,400 --> 00:30:23,160
Speaker 11: sentiment driven. And to Alex's point earlier, you know what

595
00:30:23,160 --> 00:30:25,920
Speaker 11: we're seeing, you know, the news with regard to Barr,

596
00:30:25,920 --> 00:30:29,800
Speaker 11: I think is really just reinforcing that Trump traded, reinforcing

597
00:30:29,840 --> 00:30:35,520
Speaker 11: that expectation for less regulation, and so definitely the sentiment

598
00:30:35,840 --> 00:30:39,040
Speaker 11: part of the sentiment driver. I think we saw the

599
00:30:39,080 --> 00:30:43,000
Speaker 11: stocks gain seventeen percent in a very short period of time,

600
00:30:43,040 --> 00:30:46,120
Speaker 11: where earnings estimates moved something like three percent. So that

601
00:30:46,160 --> 00:30:48,680
Speaker 11: tells you that it really is the sentiment and the

602
00:30:48,720 --> 00:30:52,640
Speaker 11: expectations that those earnings estimates can go even higher. I

603
00:30:52,680 --> 00:30:57,120
Speaker 11: think where we're the most optimistic is the lesser antitrust scrutiny,

604
00:30:57,160 --> 00:30:58,600
Speaker 11: which is going to add to M and A fees.

605
00:30:58,640 --> 00:31:02,120
Speaker 11: We're very bullish that part of the investment banking fee

606
00:31:03,160 --> 00:31:10,160
Speaker 11: revenue recovery within BI and with regard to the other regulations. So,

607
00:31:10,360 --> 00:31:13,040
Speaker 11: as I said, a lot of optimism has been baked in,

608
00:31:13,360 --> 00:31:15,080
Speaker 11: but I think what we're going to focus on next

609
00:31:15,120 --> 00:31:18,880
Speaker 11: week is really the core fundamental outlook, and I think

610
00:31:18,880 --> 00:31:22,160
Speaker 11: to the extent that that can give investors some confidence,

611
00:31:22,640 --> 00:31:25,120
Speaker 11: it can build into the story because it is less

612
00:31:25,200 --> 00:31:28,720
Speaker 11: regulation under Trump that I think is most exciting for

613
00:31:28,800 --> 00:31:31,200
Speaker 11: some of these big banks. But also keep in mind

614
00:31:31,200 --> 00:31:35,720
Speaker 11: the economic environment is better, the net income outlook is

615
00:31:36,000 --> 00:31:38,520
Speaker 11: getting better. I already talked to for a while about

616
00:31:38,600 --> 00:31:41,200
Speaker 11: capital markets, but on the credit loss front, we've had

617
00:31:41,200 --> 00:31:43,960
Speaker 11: two years of rising provisions. We're going to see that

618
00:31:44,000 --> 00:31:46,400
Speaker 11: flatten out, and that's also helpful to the bank's earnings.

619
00:31:46,760 --> 00:31:49,959
Speaker 2: Right Thanks to Alison Williams, Bloomberg Intelligence Senior Analysts Global

620
00:31:49,960 --> 00:31:52,680
Speaker 2: Banks and asset Managers, we turn next to some big

621
00:31:52,720 --> 00:31:54,200
Speaker 2: news in the financial space.

622
00:31:54,560 --> 00:31:54,920
Speaker 1: This week.

623
00:31:54,920 --> 00:31:57,000
Speaker 2: We heard JP Morgan Chase is planning to bring its

624
00:31:57,040 --> 00:31:59,840
Speaker 2: staff back to the office five days a week, ending

625
00:32:00,200 --> 00:32:03,480
Speaker 2: hybrid work option, and separately, we were told the world's

626
00:32:03,480 --> 00:32:06,920
Speaker 2: biggest hedge fund, Bridgewater Associates, dismissed seven percent.

627
00:32:06,640 --> 00:32:07,400
Speaker 5: Of its workforce.

628
00:32:07,800 --> 00:32:09,880
Speaker 2: For more, co host Alex Stale and I were joined

629
00:32:09,880 --> 00:32:13,360
Speaker 2: by Michael Moore, Bloomberg Managing editor for Finance and the Americas.

630
00:32:13,720 --> 00:32:16,320
Speaker 2: We first asked him about JP Morgan Chase and whether

631
00:32:16,440 --> 00:32:18,720
Speaker 2: going back to the office full time is a surprise.

632
00:32:19,280 --> 00:32:21,800
Speaker 12: Uh no, not really. I mean the majority of their

633
00:32:21,840 --> 00:32:25,959
Speaker 12: staff was already doing that, but this is the this

634
00:32:26,000 --> 00:32:29,960
Speaker 12: would be the rest of the staff. So we've seen

635
00:32:30,120 --> 00:32:33,880
Speaker 12: some firms move in that direction. Others, you know, have

636
00:32:34,200 --> 00:32:37,640
Speaker 12: used the flexibility as a recruiting tool. City has Yeah,

637
00:32:37,720 --> 00:32:41,120
Speaker 12: City has stuck with three days a week for a

638
00:32:41,120 --> 00:32:43,360
Speaker 12: good portion of its staff. So I think we will

639
00:32:43,400 --> 00:32:47,240
Speaker 12: see a difference among the firms. Some of the European

640
00:32:47,320 --> 00:32:49,480
Speaker 12: firms have have used it as a recruiting tool. So

641
00:32:50,480 --> 00:32:52,880
Speaker 12: but you know, Jamie Diamond has been very vocal about

642
00:32:52,880 --> 00:32:55,360
Speaker 12: his views that you know, people work better in the

643
00:32:55,400 --> 00:33:00,240
Speaker 12: office together, it helps develop talent. So you know, I

644
00:33:00,240 --> 00:33:02,840
Speaker 12: think it will be kind of you know, leader by leader,

645
00:33:02,960 --> 00:33:05,280
Speaker 12: kind of setting the agenda.

646
00:33:05,720 --> 00:33:06,080
Speaker 5: I don't know.

647
00:33:06,160 --> 00:33:08,960
Speaker 2: I mean, the fact is it does work from home,

648
00:33:09,000 --> 00:33:11,440
Speaker 2: so that does work. Let's get people back. So we'll

649
00:33:11,440 --> 00:33:16,520
Speaker 2: see how goes Bridge Rotter associates huge hedge fund cutting staff.

650
00:33:16,560 --> 00:33:19,280
Speaker 2: Is this just the normal culling of people or something

651
00:33:19,320 --> 00:33:20,280
Speaker 2: different going on here?

652
00:33:20,720 --> 00:33:23,720
Speaker 12: Yeah, it's an unusual one for just for the reason

653
00:33:23,800 --> 00:33:26,400
Speaker 12: that they are coming off their best year in many

654
00:33:26,480 --> 00:33:31,400
Speaker 12: years for the Flagship Fund. You know, I think the

655
00:33:31,440 --> 00:33:35,040
Speaker 12: new CEO is definitely trying to shake things up a

656
00:33:35,080 --> 00:33:38,200
Speaker 12: little bit. He has you know, replaced some of the

657
00:33:38,240 --> 00:33:40,840
Speaker 12: top management. They've brought some people from the outside, which

658
00:33:40,840 --> 00:33:46,240
Speaker 12: they hadn't historically done under Ray Dalio. So I think this,

659
00:33:46,720 --> 00:33:49,360
Speaker 12: you know that the stated goal here is there are

660
00:33:49,400 --> 00:33:52,400
Speaker 12: some areas where they want to hire. They don't want

661
00:33:52,440 --> 00:33:55,120
Speaker 12: headcount to get too crazy. This kind of brings them

662
00:33:55,120 --> 00:33:57,880
Speaker 12: back to where they were, you know, a little over

663
00:33:57,920 --> 00:34:00,720
Speaker 12: a year ago in terms of headcount and allows them

664
00:34:00,720 --> 00:34:02,480
Speaker 12: to kind of be a little more selective.

665
00:34:02,560 --> 00:34:05,000
Speaker 3: Did they over hire or something or do they just

666
00:34:05,040 --> 00:34:07,600
Speaker 3: want to like just move focus or something like that.

667
00:34:08,120 --> 00:34:10,480
Speaker 12: Yeah, I think you know, you have seen them, you know,

668
00:34:10,480 --> 00:34:13,359
Speaker 12: announced some you know, efforts on the AI front. They

669
00:34:13,360 --> 00:34:15,640
Speaker 12: may want to do some more hiring there, but we

670
00:34:15,760 --> 00:34:19,840
Speaker 12: have seen some of the hedge funds more broadly do

671
00:34:20,000 --> 00:34:22,719
Speaker 12: some over hiring. You know, there has been a talent war,

672
00:34:23,320 --> 00:34:25,359
Speaker 12: so this could be a bit of a correction there.

673
00:34:26,320 --> 00:34:29,719
Speaker 2: It's a unique place to work, isn't it's I've heard that.

674
00:34:29,760 --> 00:34:31,920
Speaker 2: What makes it unique a Bridgewater.

675
00:34:32,200 --> 00:34:35,840
Speaker 12: Well, they have a you know, they have this you know,

676
00:34:35,880 --> 00:34:40,200
Speaker 12: they've long had this culture of radical transparency, of being

677
00:34:40,320 --> 00:34:43,800
Speaker 12: very blunt with each other. A lot of the senior

678
00:34:43,840 --> 00:34:46,560
Speaker 12: people have been there since they were in their early twenties,

679
00:34:47,080 --> 00:34:50,120
Speaker 12: have grown up there, haven't worked elsewhere, So there is

680
00:34:50,400 --> 00:34:51,080
Speaker 12: a bit of an.

681
00:34:50,920 --> 00:34:51,960
Speaker 7: Insular culture there.

682
00:34:52,040 --> 00:34:56,520
Speaker 12: I think nearby Daya, you know, has came in a

683
00:34:56,520 --> 00:34:59,319
Speaker 12: little bit later in his career, so it brings a

684
00:34:59,320 --> 00:35:02,400
Speaker 12: different perspective. Did then Dalio who built this place, you know,

685
00:35:02,520 --> 00:35:05,680
Speaker 12: around his principles, So I think you could see a

686
00:35:05,719 --> 00:35:09,120
Speaker 12: bit of a relaxing of that culture while still you know,

687
00:35:09,280 --> 00:35:11,600
Speaker 12: being kind of a unique beast out in Connecticut.

688
00:35:12,120 --> 00:35:15,240
Speaker 3: JP Morgan the latest bank to quit the Climate Finance

689
00:35:15,280 --> 00:35:18,800
Speaker 3: Group this fall. City Paul as Baba, how are we

690
00:35:18,920 --> 00:35:21,960
Speaker 3: understanding it? Is this like a complete backlash against climate

691
00:35:22,120 --> 00:35:24,320
Speaker 3: and DEI for example, or is this just sort of

692
00:35:24,440 --> 00:35:26,040
Speaker 3: like we're going to move to the middle or we

693
00:35:26,160 --> 00:35:26,960
Speaker 3: just rebranding it.

694
00:35:27,360 --> 00:35:29,040
Speaker 7: I think it's a bit of rebranding.

695
00:35:29,200 --> 00:35:32,279
Speaker 12: I think they were getting a lot of heat from

696
00:35:32,360 --> 00:35:37,520
Speaker 12: some politicians over some of these pledges they wanted something with.

697
00:35:37,719 --> 00:35:39,319
Speaker 3: These are pledges like we're not going to lend money

698
00:35:39,360 --> 00:35:40,319
Speaker 3: to oil and gas kind of thing.

699
00:35:41,000 --> 00:35:43,440
Speaker 12: That's how they were perceived. They weren't always written that way,

700
00:35:43,600 --> 00:35:46,359
Speaker 12: but that's how they were perceived that. You know, they

701
00:35:46,400 --> 00:35:49,200
Speaker 12: got the CEOs When they were in front of Congress

702
00:35:49,640 --> 00:35:51,719
Speaker 12: a little over a year ago. Jd Vance made a

703
00:35:51,760 --> 00:35:57,360
Speaker 12: big point on this. So I think they thought we

704
00:35:57,480 --> 00:36:00,360
Speaker 12: can we can do this in ways of lending to

705
00:36:00,440 --> 00:36:04,799
Speaker 12: renewable energy without taking such a public stance that will

706
00:36:05,280 --> 00:36:08,239
Speaker 12: get us a lot of political backlash. So I think

707
00:36:08,520 --> 00:36:11,200
Speaker 12: you'll still see efforts on this, but they won't be

708
00:36:11,719 --> 00:36:16,040
Speaker 12: as grand as this climate pledge that they had all

709
00:36:16,160 --> 00:36:16,719
Speaker 12: signed up to.

710
00:36:17,160 --> 00:36:17,520
Speaker 1: What is this?

711
00:36:17,680 --> 00:36:20,440
Speaker 2: I mean, the timing is not a coincidence time assuming

712
00:36:20,520 --> 00:36:23,319
Speaker 2: given the new administration coming in. Is that how it's

713
00:36:23,360 --> 00:36:25,560
Speaker 2: being read or is that are they saying anything about

714
00:36:25,560 --> 00:36:26,120
Speaker 2: that the timing?

715
00:36:26,560 --> 00:36:28,600
Speaker 12: I think yeah, I don't think it's a coincidence. I

716
00:36:28,680 --> 00:36:33,320
Speaker 12: think the political winds have shifted on this, and in general,

717
00:36:33,400 --> 00:36:37,720
Speaker 12: I think there is you know, these always these pledges

718
00:36:37,719 --> 00:36:40,400
Speaker 12: always kind of came with an understanding of Okay, we

719
00:36:40,520 --> 00:36:42,960
Speaker 12: need to help our oil and gas clients transition to

720
00:36:43,120 --> 00:36:45,719
Speaker 12: this new world. So it's not going to be you know,

721
00:36:45,920 --> 00:36:50,879
Speaker 12: cutting ties with the big oil companies. But I think

722
00:36:51,239 --> 00:36:52,719
Speaker 12: they're being more cautious in that.

723
00:36:53,080 --> 00:36:54,920
Speaker 3: And it's not just you know, banks. We should point

724
00:36:54,920 --> 00:36:57,640
Speaker 3: at McDonald's today, the piece coming out saying that it's

725
00:36:57,680 --> 00:37:00,359
Speaker 3: walking back it's de EI goal, saying it's two its

726
00:37:00,360 --> 00:37:04,480
Speaker 3: approach to diversity, equity inclusion, no longer setting quote aspirational

727
00:37:04,600 --> 00:37:08,960
Speaker 3: representation goals, instead focusing on embedding inclusion practices into its

728
00:37:09,040 --> 00:37:11,759
Speaker 3: daily business. I don't know what that difference is, but

729
00:37:12,000 --> 00:37:13,880
Speaker 3: that's why I wonder if it's just a rebrand like

730
00:37:13,960 --> 00:37:16,040
Speaker 3: now you don't want to say ESG, but if you

731
00:37:16,160 --> 00:37:19,200
Speaker 3: still have some sort of like net zero goals, maybe

732
00:37:19,280 --> 00:37:22,320
Speaker 3: that terminology is more okay. It's just sort of a

733
00:37:22,480 --> 00:37:24,720
Speaker 3: branding and moving away from something extreme.

734
00:37:25,000 --> 00:37:27,280
Speaker 12: Yeah, I think it's not wanting to be seen as

735
00:37:27,360 --> 00:37:30,799
Speaker 12: taking a political stance, more taking a This is good

736
00:37:30,920 --> 00:37:33,080
Speaker 12: for our risk perspective.

737
00:37:34,000 --> 00:37:37,280
Speaker 2: Thanks to Michael Moore, Bloomberg Managing Editor for Finance in Americas.

738
00:37:37,960 --> 00:37:42,320
Speaker 4: This is a Bloomberg Intelligence podcast, available on Apple, Spotify,

739
00:37:42,480 --> 00:37:45,719
Speaker 4: and anywhere else you get your podcasts. Listen live each

740
00:37:45,800 --> 00:37:48,759
Speaker 4: weekday ten am to noon Eastern on Bloomberg dot com,

741
00:37:48,960 --> 00:37:52,279
Speaker 4: the iHeartRadio app tune In, and the Bloomberg Business app.

742
00:37:52,520 --> 00:37:55,400
Speaker 4: You can also watch us live every weekday on YouTube

743
00:37:55,640 --> 00:37:57,440
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