WEBVTT - PIMCO CEO Manny Roman Talks Fed Rate Cuts, Fixed Income

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>We begin with a big issue on Wall Street, twenty

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<v Speaker 2>five or fifty bonyards falling. Going into this week's finally

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<v Speaker 2>bound at Central Bank meeting. The pim code team writing

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<v Speaker 2>the post pandemic inflation shock at rate hiking cycle produced

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<v Speaker 2>a generational reset in bond yields. Central banks have largely

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<v Speaker 2>succeeded in bringing down inflation to two points somethink and

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<v Speaker 2>a poister begin cutting rates, creating a compelling multi year

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<v Speaker 2>outlook for global fixed income. I'm pleased to say that

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<v Speaker 2>the boss over at PIMCO, Many Roman, joins us. Now

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<v Speaker 2>for the next thirty minutes or so, maney, it's going

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<v Speaker 2>to see you, sir.

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<v Speaker 3>Good to see you. Thank you for having me.

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<v Speaker 2>Put us out of our misery. Twenty five or fifty tomorrow.

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<v Speaker 2>What's it going to Well, we're in the camp of

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<v Speaker 2>twenty five. But you know, I always say we have

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<v Speaker 2>a crystal ball and at the end of the day,

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<v Speaker 2>we'll see what the market does. You know, it may

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<v Speaker 2>very well be that it doesn't make that much of

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<v Speaker 2>a difference. And our view is that there will be

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<v Speaker 2>three cuts of twenty five and at the end of

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<v Speaker 2>the day. What matters is where we are at the

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<v Speaker 2>end of the year. Well, let's talk about the destination.

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<v Speaker 2>This is a three pound act on Wednesdage. You know,

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<v Speaker 2>it's a decision. It's a set of forecasts and a

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<v Speaker 2>news conference and a big conversation around this table for

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<v Speaker 2>the last several months. What's the destination, what are they

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<v Speaker 2>aiming for, what are they shooting for? Where is this

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<v Speaker 2>land in the next eineteen months.

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<v Speaker 4>Well, I think you can say that there's less inflation

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<v Speaker 4>right now, and that in the absence of new data,

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<v Speaker 4>the destination will be to have lower rates, and the

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<v Speaker 4>FED would be very data dependent, and I think I

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<v Speaker 4>think sometimes one under estimate how careful they are about

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<v Speaker 4>new data and how they want to be able to

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<v Speaker 4>change their opinion. And so if you kind of use

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<v Speaker 4>this framework, you sort of said, let's do twenty five

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<v Speaker 4>and then let's see what we are, and then.

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<v Speaker 3>Probably to twenty five and twenty five.

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<v Speaker 4>But I think the total sum of the rate cuts

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<v Speaker 4>may matter more than how they do it, which is.

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<v Speaker 1>The reason why people are looking forward and saying maybe

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<v Speaker 1>the neutral rates three and a half percent, and oh yeah,

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<v Speaker 1>look at that the two year right now it's about

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<v Speaker 1>three and a half percent. Back in June, when you

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<v Speaker 1>put out the outlook for PIMCO, there was a feeling

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<v Speaker 1>that intermediate bonds really had a fantastic investment proposal proposition

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<v Speaker 1>just simply because there was yield. Do they still after

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<v Speaker 1>the rally we've seen, we still do think so.

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<v Speaker 4>And listen, the exciting thing about being at PIMCO right

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<v Speaker 4>now is that fixed income is quite attractive.

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<v Speaker 3>And you know, we we.

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<v Speaker 4>We are in the business of fist and family, right

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<v Speaker 4>so when rads are very, very low, it's harder to

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<v Speaker 4>be that excited about fixed income. And when you can

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<v Speaker 4>build portfolio and get a yell of six six and

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<v Speaker 4>a half, you become very excited. And you know, we

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<v Speaker 4>very focus on treasury, but the reality is there is

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<v Speaker 4>a lot of value in other part of the segment.

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<v Speaker 3>I set back being one of them, and.

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<v Speaker 4>You know, we we're excited about what we see. And

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<v Speaker 4>at the end of the day, the yield on the

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<v Speaker 4>portfolio is a good predictor of the return that the

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<v Speaker 4>investor experience. And so what I think is exciting about

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<v Speaker 4>fixed income right now is you can build a portfolio

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<v Speaker 4>and get a return of sixty six and a half

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<v Speaker 4>percent with a serial of different instruments.

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<v Speaker 1>It used to be that bonds did better in bad

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<v Speaker 1>times and worse in good times. Are we heading into

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<v Speaker 1>a worse time where people go to bonds for safety

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<v Speaker 1>or is this on just an absolute basis yields are higher.

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<v Speaker 4>My partner Dan ivested, and I'm going to calld him

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<v Speaker 4>because because actually he has a.

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<v Speaker 3>Very good line.

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<v Speaker 4>Bonds may be the most attractive asset class. And I

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<v Speaker 4>think that there's an absolute argument and then there's a

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<v Speaker 4>relative argument. And I think the relative argument is to

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<v Speaker 4>say you need to build a port for you. You need equity,

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<v Speaker 4>you need fixed income, you need some read to state,

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<v Speaker 4>you need.

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<v Speaker 3>Some private asset.

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<v Speaker 4>And at the end of the day, fixed income is

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<v Speaker 4>much more attractive than equity, given the earning yield and

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<v Speaker 4>given the evaluation of the equity market. And I think

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<v Speaker 4>that's one of the argument for owning a larger part

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<v Speaker 4>of fixting come. And I think when I travel the world,

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<v Speaker 4>I think that people are under invested in fixed income

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<v Speaker 4>and a lot of them are looking at putting more

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<v Speaker 4>money into fixed income. And whether they do it tomorrow

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<v Speaker 4>or whether they do it two weeks from now or

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<v Speaker 4>two months from that, I don't know, But the reality

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<v Speaker 4>is people were under invested values part of the fixed

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<v Speaker 4>incop market, and they're looking to readjust the allocation.

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<v Speaker 2>Have you got confidence we've re established the invest correlation

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<v Speaker 2>between bonds and stocks.

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<v Speaker 4>I don't know what I don't know, and I think

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<v Speaker 4>correlation filctrate over time. I think that fixed income have

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<v Speaker 4>a role in the portfolio construction, and I think they're

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<v Speaker 4>there for a reason. But of course credit spread on

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<v Speaker 4>the how you market are correlated to equity prices. So

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<v Speaker 4>once again, I think one needs to be careful about

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<v Speaker 4>how you frame the question and how you conclude.

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<v Speaker 2>Well, like I said, I mean more specific by saying

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<v Speaker 2>to treasuries, have treasuries re established an invest correlation with equities?

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<v Speaker 2>Because one of the reasts that we've seen established over

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<v Speaker 2>the last few years, particularly given the central focus was inflation,

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<v Speaker 2>is that when bombs sold off, equities did too.

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<v Speaker 3>That story we left that hopefully hopefully we have.

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<v Speaker 4>But I think remember that we also saw with the pandemic,

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<v Speaker 4>really an unpreced edted program of none creation, which sort

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<v Speaker 4>of through everything and our economic textbook in terms of

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<v Speaker 4>how we thought about the correlation. And so I'm careful

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<v Speaker 4>about what I said, because the data are just so.

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<v Speaker 3>Skewed in terms of what we see.

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<v Speaker 4>And I think, you know, you can make the argument,

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<v Speaker 4>for example, that part of the reason why the US

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<v Speaker 4>economy has done so much better than any other places

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<v Speaker 4>is that the package in terms of the pandemic has

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<v Speaker 4>been so much bigger than another country. And at the

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<v Speaker 4>end of the day, all you can do is cross

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<v Speaker 4>sectional analysis and try to compare different country. But there's

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<v Speaker 4>so many other valuable that comes into the picture that

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<v Speaker 4>you don't want to understate the enormous creation of great

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<v Speaker 4>company in the US versus Europe, for example, and so

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<v Speaker 4>and so, I think we try to always be careful

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<v Speaker 4>about making definitive conclusion when it comes to correlation and

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<v Speaker 4>when it comes to cross sectional comparison between different country.

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<v Speaker 1>Another way to frame this question is when you travel

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<v Speaker 1>the world and you talk to international clients who are

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<v Speaker 1>under invested in fixed and come in the United States,

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<v Speaker 1>how many of them turn to you and say, what

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<v Speaker 1>about the US deficit?

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<v Speaker 4>Well, my friend and partner Richard Clarida, used this very

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<v Speaker 4>American expression and says, the US is make sure I

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<v Speaker 4>make sure I get that right.

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<v Speaker 3>Car the cleanest dirty shirt. And you know.

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<v Speaker 4>We have debated quite a bit at or forum about deficit,

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<v Speaker 4>and you know, deficit do matter, and they do matter,

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<v Speaker 4>and at some point in them there's a tipping point,

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<v Speaker 4>but we're not there. And the reality is it's a

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<v Speaker 4>huge competitive advantage to be the reserve currency. People need

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<v Speaker 4>to own dollars. And the reality is we don't think

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<v Speaker 4>there's a crisis coming and that the LEVEL can and

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<v Speaker 4>the US can have suddenly a high level of debt

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<v Speaker 4>versus historical precedent and be able to function just fine.

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<v Speaker 5>When will the US get there? And do you see

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<v Speaker 5>either party have any impetus to try to reign and

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<v Speaker 5>spending so.

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<v Speaker 4>To quote my partner once again, Leady Countrill, who comes

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<v Speaker 4>often here on the show. No, we see no impetus

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<v Speaker 4>to try to deal with the budget deficit. The only

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<v Speaker 4>real example we have is the United Kingdom. And I

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<v Speaker 4>think that the United Kingdom was actually quite interesting because

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<v Speaker 4>you saw a situation where the bond market reacted so

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<v Speaker 4>violently to the least trust proposal that all of a

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<v Speaker 4>sudden they had to change, and had to change really

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<v Speaker 4>really quickly. And I think I think that this example

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<v Speaker 4>of what happened in a very developed country, and how

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<v Speaker 4>the Bank of England reacted and reacted really quickly with

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<v Speaker 4>the LEDI situation and the pressure in the guilt market

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<v Speaker 4>and in the pension market will be a textbook example

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<v Speaker 4>of why markets reac act quite strongly when something outrageous

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<v Speaker 4>come Well.

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<v Speaker 5>We have a Bloomberg survey to that point that says

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<v Speaker 5>Kamala Harris her a victory for her in the White

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<v Speaker 5>House would be better for treasuries and worse for stocks,

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<v Speaker 5>vice versa for the foreign president.

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<v Speaker 3>Would you agree with that scenario?

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<v Speaker 4>I think, I think there's so many unknown you know,

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<v Speaker 4>it depends, it depends on what happened in the House.

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<v Speaker 3>It depends on what.

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<v Speaker 4>The winner can do in terms of program how this

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<v Speaker 4>is all going to pan out. I would be very

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<v Speaker 4>careful about making any any prognosis on this on this matter,

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<v Speaker 4>I think, you know, when we when we think about

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<v Speaker 4>the world, you know, I realized politics is really important.

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<v Speaker 4>But at the end of the day, that's not how

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<v Speaker 4>we invest. We invest because we find value and we

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<v Speaker 4>find opportunity, and we try to bat cheap, and we

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<v Speaker 4>try to manage portfolio and think about risk carefully and

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<v Speaker 4>ride different cycle and and and deal with many other

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<v Speaker 4>factor than politics. And you know, there's a few exceptions

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<v Speaker 4>if you talk to my partner from ALDA one in

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<v Speaker 4>emerging market, all of a sudden in emerging market sometimes,

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<v Speaker 4>but it do really matter because they are.

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<v Speaker 3>Very big changes and very big different outcomes.

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<v Speaker 2>The struggle money as you notice that some dms have

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<v Speaker 2>traded like ems over the last few years. And you

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<v Speaker 2>mentioned the UK. So I won't put words in your mouth,

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<v Speaker 2>I do want your views. Well, it does feel like

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<v Speaker 2>a self imposed debt break in the United Kingdom, and

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<v Speaker 2>I'm wondering whether from your perspective, for even the team

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<v Speaker 2>that actually makes UK government a little bit more attractive here.

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<v Speaker 3>We think it's very attractive. We like the UK, We

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<v Speaker 3>like Australia.

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<v Speaker 4>We think that the UK fits very well in the portfolio,

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<v Speaker 4>and they will need to cut and cut rates significantly.

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<v Speaker 4>And so when you think of a global outlook, the

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<v Speaker 4>UK looks good for a fixed income.

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<v Speaker 2>Investor relative to the United States, say in terms of

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<v Speaker 2>duration risk.

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<v Speaker 4>Relative to other countries in Europe, certainly compared to European bonds.

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<v Speaker 3>We also like the US.

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<v Speaker 4>So you know, if I want to kind of sum

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<v Speaker 4>up things, you know, we like the U ways, we

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<v Speaker 4>like the UK, well like Australia.

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<v Speaker 2>Man, I want to come back to the bond market

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<v Speaker 2>and just talk about a dynamic. This start to really

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<v Speaker 2>take hold over the last month or so the two

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<v Speaker 2>year ten year segment of the yield curve. Things just

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<v Speaker 2>starting to normalize, but the steepness almost back to double

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<v Speaker 2>figures this morning. As we get that curve normalization. Can

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<v Speaker 2>you walk me through how much things change in fixed

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<v Speaker 2>income Whether you're starting to see that cash deployed a

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<v Speaker 2>little bit more.

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<v Speaker 4>Well, I think there's that, And of course people kind

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<v Speaker 4>of look at the cash they have on the sideline

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<v Speaker 4>and there's about ten trillion dollars of money in cash

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<v Speaker 4>where they will think to reinvested, either by extending duration

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<v Speaker 4>or by going longer, or by taking a bit more

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<v Speaker 4>credit risk. So there is a wall of money out there,

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<v Speaker 4>and I keep on saying this, and of course some

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<v Speaker 4>of it is cash corporate and will remain cash corporate.

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<v Speaker 4>But I think people have been very much on the

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<v Speaker 4>sideline rolling short term treasury bill and this money will

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<v Speaker 4>get redeployed and how fast and how.

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<v Speaker 3>Remains to be seen.

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<v Speaker 4>The other thing which I think you may find interesting

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<v Speaker 4>is they are a lot of opportunity in relative value

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<v Speaker 4>in the fixed inker market, and in particular think of Japan.

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<v Speaker 4>You know, nothing happened in Japan for fifteen years, and

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<v Speaker 4>then all of a sudden, we now have positive rates

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<v Speaker 4>in Japan, and there's a lot of haarbitrush to be done.

0:11:14.920 --> 0:11:18.960
<v Speaker 4>It's across the curve, it's with swap, it's with different

0:11:19.000 --> 0:11:22.320
<v Speaker 4>instrument and all of a sudden, they are sources of alpha,

0:11:22.520 --> 0:11:26.880
<v Speaker 4>as we tend to call them, where basically they didn't

0:11:26.920 --> 0:11:29.440
<v Speaker 4>exist two years ago, which have come back to the

0:11:29.480 --> 0:11:32.360
<v Speaker 4>market in Spain. How long it lasts, we'll find out,

0:11:32.800 --> 0:11:36.600
<v Speaker 4>but it should be a very exciting opportunity in terms

0:11:36.640 --> 0:11:39.800
<v Speaker 4>of the whole market, in terms of delivering better performance.

0:11:40.280 --> 0:11:43.160
<v Speaker 1>How difficult is it to pry that cash out of

0:11:43.200 --> 0:11:46.719
<v Speaker 1>people's cold hands, given the fact that people really do

0:11:46.920 --> 0:11:49.520
<v Speaker 1>like what they're getting. And oh, by the way, there

0:11:49.520 --> 0:11:52.040
<v Speaker 1>are fifteen other fund managers out there also trying to

0:11:52.080 --> 0:11:54.360
<v Speaker 1>get them to pry that cash out of their hands.

0:11:54.400 --> 0:11:56.559
<v Speaker 4>Well, I will tell you competition is good. Is good

0:11:56.640 --> 0:11:59.480
<v Speaker 4>for everybody. And at the end of the day, there's

0:11:59.520 --> 0:12:04.640
<v Speaker 4>two things there is when the FED cuts rate, eventually

0:12:04.640 --> 0:12:06.920
<v Speaker 4>the short end of the curve becomes less attractive, and

0:12:06.960 --> 0:12:08.480
<v Speaker 4>I think you'll see cash moving.

0:12:09.200 --> 0:12:09.880
<v Speaker 3>And from a.

0:12:09.840 --> 0:12:13.400
<v Speaker 4>Competitive standpoint, we want to do the best possible job

0:12:13.440 --> 0:12:17.640
<v Speaker 4>in terms of big and fiduciary and doing a good

0:12:17.720 --> 0:12:20.400
<v Speaker 4>job in terms of performance and being there for our clients.

0:12:20.400 --> 0:12:22.560
<v Speaker 4>And we compete every single day and hopefully we'll win

0:12:22.559 --> 0:12:23.280
<v Speaker 4>more than we lose.

0:12:23.880 --> 0:12:26.480
<v Speaker 3>But all we can do is trial best and we

0:12:26.600 --> 0:12:27.320
<v Speaker 3>try very hard.

0:12:27.360 --> 0:12:31.120
<v Speaker 1>Where's the edge, where's sort of growth concentrated in or

0:12:31.320 --> 0:12:34.640
<v Speaker 1>is trying to be concentrated with respect to PIMCO in

0:12:34.679 --> 0:12:36.120
<v Speaker 1>the say five years ahead.

0:12:36.320 --> 0:12:39.360
<v Speaker 4>Well, Asia has been quite exciting lately, and there's a

0:12:39.360 --> 0:12:42.080
<v Speaker 4>lot of things happening in Asia, and you can sort

0:12:42.080 --> 0:12:44.480
<v Speaker 4>of think of our business as being linked to GDP

0:12:44.559 --> 0:12:47.040
<v Speaker 4>in terms of the saving rates and people when they

0:12:47.080 --> 0:12:49.520
<v Speaker 4>save more, invest more. And so Asia has been quite exciting.

0:12:49.559 --> 0:12:52.200
<v Speaker 4>And the US is an absolutely wonderful place. I mean,

0:12:52.240 --> 0:12:54.719
<v Speaker 4>it's a big market and there's a lot to be done.

0:12:54.760 --> 0:12:56.880
<v Speaker 4>We have a very good Canadian business, we have a

0:12:57.040 --> 0:12:58.640
<v Speaker 4>very good Latin American business.

0:12:58.880 --> 0:13:00.000
<v Speaker 3>There's a lot of good things happen.

0:13:00.400 --> 0:13:04.040
<v Speaker 4>But the one variable we don't control is of course

0:13:04.480 --> 0:13:08.200
<v Speaker 4>the macroeconomic situation. And so if you have a real

0:13:08.280 --> 0:13:11.679
<v Speaker 4>reversal and you have, for example of a session, and

0:13:11.880 --> 0:13:14.800
<v Speaker 4>let me just say it's not our scenario, but if

0:13:14.800 --> 0:13:17.600
<v Speaker 4>you have a real recession, people loocome more discoversed and

0:13:17.600 --> 0:13:19.920
<v Speaker 4>take some money away. And at the end of the day,

0:13:20.200 --> 0:13:21.760
<v Speaker 4>you know we here for the next twenty years, not

0:13:21.840 --> 0:13:24.800
<v Speaker 4>for the next twenty minutes. And so you know we

0:13:24.880 --> 0:13:28.120
<v Speaker 4>have very liquid portfolio. People can take the money whenever

0:13:28.440 --> 0:13:30.320
<v Speaker 4>they feel like and reinvest and so on. And we

0:13:30.400 --> 0:13:32.200
<v Speaker 4>understand that people need money for all.

0:13:32.120 --> 0:13:32.720
<v Speaker 3>Sorts of reasons.

0:13:33.040 --> 0:13:36.560
<v Speaker 1>There are a number of behemoth asset managers. PIMCO overseas

0:13:36.600 --> 0:13:37.920
<v Speaker 1>one point eight trillion dollars.

0:13:38.280 --> 0:13:40.480
<v Speaker 3>How much bigger could you see it getting? It's all

0:13:40.480 --> 0:13:41.280
<v Speaker 3>about performance.

0:13:42.080 --> 0:13:44.520
<v Speaker 4>And I always say the great thing about not being

0:13:44.559 --> 0:13:47.920
<v Speaker 4>public and not having to give quarterly earnings is you

0:13:47.960 --> 0:13:52.000
<v Speaker 4>focus on what matter. The circle of truth is if

0:13:52.040 --> 0:13:53.280
<v Speaker 4>you perform, they will come.

0:13:54.120 --> 0:13:56.320
<v Speaker 2>You said this last form we spoke, but it's an

0:13:56.440 --> 0:13:59.520
<v Speaker 2>success by assets. We measure our success by the returns

0:13:59.520 --> 0:14:02.800
<v Speaker 2>we provide. Does it disappoint you? Is it slightly upsetting

0:14:02.800 --> 0:14:06.040
<v Speaker 2>that people do measure your success by assets because they've

0:14:06.040 --> 0:14:08.280
<v Speaker 2>been pretty stable now for the last decade. Black rock

0:14:08.320 --> 0:14:11.719
<v Speaker 2>over the same period has multiplied. Is that disappointing to

0:14:11.760 --> 0:14:12.880
<v Speaker 2>you that people junctually have that.

0:14:13.040 --> 0:14:15.120
<v Speaker 4>I think we have a very different business model, and

0:14:15.800 --> 0:14:19.240
<v Speaker 4>you know we were talking about Onemarth. We don't want

0:14:19.240 --> 0:14:22.800
<v Speaker 4>to build waldmart Onemar is a fantastic company, but we

0:14:22.880 --> 0:14:26.200
<v Speaker 4>have an opportunity set where we very carefully think about

0:14:26.200 --> 0:14:29.440
<v Speaker 4>capacity and how much money we can put to work

0:14:29.760 --> 0:14:33.920
<v Speaker 4>and what the right target return are for investors. And

0:14:33.960 --> 0:14:37.000
<v Speaker 4>I think that by definition means that we won't be

0:14:37.440 --> 0:14:40.320
<v Speaker 4>the largest asset manager and still be it when.

0:14:40.200 --> 0:14:43.200
<v Speaker 2>It comes to asset management. Private markets comes up all

0:14:43.240 --> 0:14:45.400
<v Speaker 2>the time and everyone's trying to make their own push.

0:14:45.520 --> 0:14:47.640
<v Speaker 2>What does Pincock fit into that big push at the

0:14:47.640 --> 0:14:48.960
<v Speaker 2>moment into private markets?

0:14:49.440 --> 0:14:52.320
<v Speaker 4>So we we try to we try to focus on

0:14:52.360 --> 0:14:54.560
<v Speaker 4>what we know how to do, and what we know

0:14:54.600 --> 0:14:57.840
<v Speaker 4>how to do is fixed incum and so that includes

0:15:00.240 --> 0:15:02.600
<v Speaker 4>as a matter of fact, everything which has to do

0:15:02.680 --> 0:15:05.280
<v Speaker 4>with private market and fixed income, and it also involves

0:15:05.360 --> 0:15:09.480
<v Speaker 4>real estate and there's a big realistate cycle that should

0:15:09.520 --> 0:15:13.280
<v Speaker 4>be exciting. There will be pieces to pick and there

0:15:13.320 --> 0:15:17.920
<v Speaker 4>will be cheap investment, both in debt and inequity and in.

0:15:17.880 --> 0:15:19.280
<v Speaker 3>The private credit market.

0:15:20.280 --> 0:15:24.800
<v Speaker 4>There's quite a unique opportunity in asset backed lending. That's

0:15:24.840 --> 0:15:27.880
<v Speaker 4>where my friend Dan Iverson grew up in. We have

0:15:28.240 --> 0:15:31.160
<v Speaker 4>been doing this for twenty years and the one thing

0:15:31.240 --> 0:15:35.000
<v Speaker 4>which has changed, so to speak, is the banks need

0:15:35.040 --> 0:15:38.640
<v Speaker 4>to free up capital and so they need to sell

0:15:39.040 --> 0:15:43.440
<v Speaker 4>large portfolio of many different assets and do it fairly quickly.

0:15:43.560 --> 0:15:45.479
<v Speaker 3>That's an opportunity for us.

0:15:46.080 --> 0:15:49.080
<v Speaker 4>And so if they are good entry point and good

0:15:49.240 --> 0:15:52.680
<v Speaker 4>asset to pick, we should be able to do quite well.

0:15:52.760 --> 0:15:54.920
<v Speaker 1>What types of assets are talking about? Commercial? Are you

0:15:54.920 --> 0:15:56.840
<v Speaker 1>going to be on residential?

0:15:56.960 --> 0:16:00.800
<v Speaker 3>Slash all bonds? Banks?

0:16:02.760 --> 0:16:04.600
<v Speaker 4>Let me just focus first on fixed income.

0:16:04.680 --> 0:16:06.480
<v Speaker 3>You know, I think in fixed income there's a lot.

0:16:06.400 --> 0:16:08.720
<v Speaker 4>To buy, and there's a lot to buy because the

0:16:08.720 --> 0:16:11.200
<v Speaker 4>banks need to deliver. And so the banks, you can

0:16:11.200 --> 0:16:12.840
<v Speaker 4>think about what they have on the balance sheet. They

0:16:12.840 --> 0:16:15.360
<v Speaker 4>have loans that they've given to company and they want

0:16:15.400 --> 0:16:16.760
<v Speaker 4>to get rid of it and so they sell it

0:16:16.760 --> 0:16:19.280
<v Speaker 4>to us, and that I think is very straightforward. In

0:16:19.320 --> 0:16:22.760
<v Speaker 4>real estate, you have a real estate cycle and there

0:16:22.800 --> 0:16:25.280
<v Speaker 4>will be different things you can do. There will be

0:16:25.920 --> 0:16:29.520
<v Speaker 4>some will need pref equity, some will need debt, some

0:16:29.560 --> 0:16:32.080
<v Speaker 4>will need to buy equity, and we just need to

0:16:32.080 --> 0:16:34.240
<v Speaker 4>make sure that it's cheap enough and that we think

0:16:34.280 --> 0:16:36.920
<v Speaker 4>carefully about what happens and make sure we have an

0:16:36.920 --> 0:16:38.920
<v Speaker 4>expected return which compan set it for the risk, and

0:16:38.960 --> 0:16:40.800
<v Speaker 4>it needs to be high because it's a lot of

0:16:40.920 --> 0:16:43.640
<v Speaker 4>risk in commercial real estate, for example. But we had

0:16:43.680 --> 0:16:46.840
<v Speaker 4>a pretty fast cycle and hopefully we're going to be

0:16:46.880 --> 0:16:49.160
<v Speaker 4>on the right side of the trade coming out of it.

0:16:49.280 --> 0:16:51.280
<v Speaker 2>We've only got sixty seconds left with you. So the

0:16:51.640 --> 0:16:55.200
<v Speaker 2>hardest question of the morning. What's more likely Arsenal winning

0:16:55.200 --> 0:16:58.120
<v Speaker 2>the title or the Federal Reserve engineering a soft landing.

0:16:58.880 --> 0:17:01.040
<v Speaker 3>Arsenal winning the title also one.

0:17:01.040 --> 0:17:02.920
<v Speaker 2>Of the titles should I read into when I think

0:17:02.920 --> 0:17:04.320
<v Speaker 2>about your real views on the economy?

0:17:04.320 --> 0:17:07.120
<v Speaker 3>Then, based on now you just the counsle Is that good? No?

0:17:07.800 --> 0:17:12.160
<v Speaker 3>You should? You should think about Arsenal? No, I think Look, Look,

0:17:12.200 --> 0:17:13.200
<v Speaker 3>I think I think people.

0:17:13.000 --> 0:17:17.080
<v Speaker 4>Are very people are very sometimes criticized the fat I

0:17:17.119 --> 0:17:18.880
<v Speaker 4>think they do. They do a really really good job

0:17:19.000 --> 0:17:22.240
<v Speaker 4>with a very difficult hand to play, and and and

0:17:22.880 --> 0:17:25.320
<v Speaker 4>you know, they don't know what they don't know at

0:17:25.320 --> 0:17:26.760
<v Speaker 4>the end of the day. And I think, I think

0:17:26.760 --> 0:17:29.919
<v Speaker 4>it has been a tremendously complicated market to navigate for

0:17:29.960 --> 0:17:32.439
<v Speaker 4>everybody over the past four years. None of us, none

0:17:32.480 --> 0:17:35.160
<v Speaker 4>of us have so thought we would see a pandemic.

0:17:35.280 --> 0:17:38.240
<v Speaker 4>And you know, from the investment standpoint and from a

0:17:38.280 --> 0:17:41.280
<v Speaker 4>regulatory standpoint, and from the FED standpoint, I.

0:17:41.240 --> 0:17:43.320
<v Speaker 3>Think we we have to learn a new playbook.

0:17:43.440 --> 0:17:45.359
<v Speaker 2>It's been humbling for a soul. Money, It's good to

0:17:45.359 --> 0:17:47.320
<v Speaker 2>see you and great when at the weekend. Thank you

0:17:47.400 --> 0:17:49.600
<v Speaker 2>sir to appreciated money rhyme and the film cut