WEBVTT - Apollo Global Management President Jim Zelter Talks U.S. Deficit

0:00:02.360 --> 0:00:06.239
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio.

0:00:06.320 --> 0:00:09.320
<v Speaker 2>News joining us now for long discussion Jim's out to

0:00:09.360 --> 0:00:11.920
<v Speaker 2>the president of Apollo Global Management, Jim, good morning, Good

0:00:11.920 --> 0:00:13.600
<v Speaker 2>morning John, and happy birthday, sirs.

0:00:13.600 --> 0:00:15.240
<v Speaker 3>Good Thank you very much. I appreciate it great.

0:00:15.280 --> 0:00:17.319
<v Speaker 2>They spend too much time on the Federal Reserve. But

0:00:17.360 --> 0:00:19.799
<v Speaker 2>I do want your reaction to this journal piece overnight.

0:00:20.280 --> 0:00:22.759
<v Speaker 4>Well, I think I think that the president's already won.

0:00:23.440 --> 0:00:27.040
<v Speaker 4>It's a great distraction of headlines. I personally don't think

0:00:27.080 --> 0:00:31.440
<v Speaker 4>he's going to name anybody too early because right now

0:00:31.480 --> 0:00:35.760
<v Speaker 4>he's in the catbird seat of blaming without accountability, which

0:00:35.800 --> 0:00:38.600
<v Speaker 4>is classic Trump playbook. So I think the fact that

0:00:38.640 --> 0:00:41.680
<v Speaker 4>we're talking about it is interesting. It's a great diversion

0:00:41.720 --> 0:00:44.199
<v Speaker 4>from the reality I think he does. And there's no

0:00:44.240 --> 0:00:46.479
<v Speaker 4>doubt he wants rates lower. That's what's part of his

0:00:46.600 --> 0:00:48.640
<v Speaker 4>plan for many, many years, and that's how he doesn't

0:00:48.640 --> 0:00:50.320
<v Speaker 4>like to pay debt and he likes to pay low

0:00:50.360 --> 0:00:53.000
<v Speaker 4>coupons on it. But the fact that you know, I

0:00:53.040 --> 0:00:55.800
<v Speaker 4>just don't think that if you're Trump right now and

0:00:55.840 --> 0:01:00.040
<v Speaker 4>you take his playbook, he'll make this a conversation. But

0:01:00.120 --> 0:01:02.840
<v Speaker 4>I don't suspect he's going to do anything premature because

0:01:03.280 --> 0:01:07.000
<v Speaker 4>he's able to put blame on the current resident of

0:01:07.040 --> 0:01:09.480
<v Speaker 4>the Fed, and he likes to be in that position.

0:01:09.600 --> 0:01:12.600
<v Speaker 2>Your wor it's blaming with accountability without accountability. Is this

0:01:12.720 --> 0:01:14.240
<v Speaker 2>something you think he should be accountable for.

0:01:15.080 --> 0:01:16.960
<v Speaker 4>Well, certainly, I think if you think about what's going

0:01:17.000 --> 0:01:19.960
<v Speaker 4>on in the last three or four months, the issues

0:01:20.040 --> 0:01:23.080
<v Speaker 4>of tariffs, it feels like that's a little bit on

0:01:23.120 --> 0:01:25.560
<v Speaker 4>the sidelines right now. I know we haven't resolved, but

0:01:25.800 --> 0:01:28.520
<v Speaker 4>the marketplace has absorbed the idea of a ten percent

0:01:28.600 --> 0:01:31.520
<v Speaker 4>plus or minus tariff, maybe a little bit higher, but

0:01:31.760 --> 0:01:35.440
<v Speaker 4>to Trump's benefit, in the administration's benefit, the market has

0:01:35.480 --> 0:01:39.040
<v Speaker 4>absorbed that, moved on the issues about the Middle East

0:01:39.080 --> 0:01:42.280
<v Speaker 4>and all the challenges of foreign policy. There was a

0:01:42.280 --> 0:01:44.520
<v Speaker 4>lot of action last ten days ago and a week

0:01:44.520 --> 0:01:47.039
<v Speaker 4>and a half ago, and now that has been sort

0:01:47.080 --> 0:01:50.480
<v Speaker 4>of absorbed in the marketplace. The big elephant in the

0:01:50.600 --> 0:01:53.920
<v Speaker 4>room is still our deficit issue. You guys have talked

0:01:53.920 --> 0:01:56.160
<v Speaker 4>about it quite a bit. It's obviously the topic of

0:01:56.520 --> 0:02:01.160
<v Speaker 4>appropriate conversation, and so I think that is an important

0:02:01.200 --> 0:02:02.520
<v Speaker 4>topic that still remains.

0:02:02.560 --> 0:02:05.400
<v Speaker 3>But we talked.

0:02:05.120 --> 0:02:08.959
<v Speaker 4>Earlier in this year about the decline of US exceptionalism.

0:02:09.240 --> 0:02:11.720
<v Speaker 4>I think Mark Twain was right that the PREMI that

0:02:11.760 --> 0:02:15.280
<v Speaker 4>my death is is a bit premature, and certainly the

0:02:15.320 --> 0:02:18.160
<v Speaker 4>market has moved on. So I think the tariffs are

0:02:18.200 --> 0:02:20.799
<v Speaker 4>little bit off on the side, The foreign policy issues

0:02:20.800 --> 0:02:22.720
<v Speaker 4>are a little bit off the side right now. The

0:02:22.800 --> 0:02:25.760
<v Speaker 4>deficit issue is a real issue. We could talk a

0:02:25.800 --> 0:02:27.680
<v Speaker 4>little bit about what's going on with the dollar. I

0:02:27.720 --> 0:02:30.639
<v Speaker 4>personally think what's going on with the dollar. I think

0:02:30.680 --> 0:02:32.720
<v Speaker 4>there was a lot of investors around the globe that

0:02:32.880 --> 0:02:36.160
<v Speaker 4>invested in US assets, and they made money both ways

0:02:36.440 --> 0:02:38.840
<v Speaker 4>on the currency and on the underlying assets for almost

0:02:38.880 --> 0:02:41.720
<v Speaker 4>ten years, and they turned around and they found themselves

0:02:41.880 --> 0:02:44.400
<v Speaker 4>really unhedged. And I think you're going to see some

0:02:44.440 --> 0:02:46.560
<v Speaker 4>pretty good numbers out of the big banks this quarter

0:02:46.960 --> 0:02:50.080
<v Speaker 4>because investors around the globe have been rushing to hedge

0:02:50.120 --> 0:02:54.160
<v Speaker 4>their dollar exposure. But I think it's a ten year

0:02:54.240 --> 0:02:59.200
<v Speaker 4>catchup that people just didn't hedge their portfolios in massive scale.

0:02:59.480 --> 0:03:02.360
<v Speaker 4>So I don't look at this dollar decline is I

0:03:02.440 --> 0:03:04.920
<v Speaker 4>look at it as more of a technical factor than

0:03:04.960 --> 0:03:07.960
<v Speaker 4>a long long run impact on the health of the

0:03:08.040 --> 0:03:08.680
<v Speaker 4>US economy.

0:03:08.680 --> 0:03:11.079
<v Speaker 1>There's a lot to impact there, including the breakout of

0:03:11.120 --> 0:03:13.400
<v Speaker 1>the hedging profits at some of the big banks, which

0:03:13.400 --> 0:03:15.639
<v Speaker 1>we'll all be now looking for. To build on what

0:03:15.720 --> 0:03:18.560
<v Speaker 1>John is asking about is the FED on the brink.

0:03:18.720 --> 0:03:20.200
<v Speaker 1>I don't want to say have a policy error, but

0:03:20.240 --> 0:03:21.920
<v Speaker 1>of being too late kind of to build on what

0:03:22.000 --> 0:03:25.040
<v Speaker 1>President Trump is accusing him, because you are seeing the

0:03:25.080 --> 0:03:29.280
<v Speaker 1>weakening and the dollar accompanied by the biggest negativity, the

0:03:29.280 --> 0:03:33.760
<v Speaker 1>biggest increase in downside economic surprises that we've seen in

0:03:33.960 --> 0:03:34.400
<v Speaker 1>a year.

0:03:35.080 --> 0:03:37.720
<v Speaker 4>If you look at the Bloomberg page on rates of

0:03:37.760 --> 0:03:41.040
<v Speaker 4>the G seven economies other than the UK, where the

0:03:41.120 --> 0:03:44.560
<v Speaker 4>outlier in terms of where our ten year yields are

0:03:44.680 --> 0:03:48.880
<v Speaker 4>and our yield curve is. I sit in my seat

0:03:48.920 --> 0:03:53.320
<v Speaker 4>and I see a variety of inputs that some tell

0:03:53.400 --> 0:03:55.960
<v Speaker 4>me the economy is slowing down a little bit with consumers.

0:03:56.440 --> 0:03:59.720
<v Speaker 4>Some tell me inflation is still a little bit more

0:04:00.840 --> 0:04:04.920
<v Speaker 4>represented in the economy. We see inflation around three percent,

0:04:05.040 --> 0:04:07.960
<v Speaker 4>three three and a half percent. And I don't think

0:04:08.000 --> 0:04:10.680
<v Speaker 4>it's obvious that the FED should be cutting right now.

0:04:10.760 --> 0:04:13.880
<v Speaker 4>I think it is a very legitimate question to be

0:04:13.960 --> 0:04:17.560
<v Speaker 4>asking what's the trajectory of the FED activity, And so

0:04:18.120 --> 0:04:20.039
<v Speaker 4>I don't think it's a slam dunk decision. I know

0:04:20.120 --> 0:04:23.000
<v Speaker 4>the market, the futures would tell you three cuts in

0:04:23.040 --> 0:04:24.920
<v Speaker 4>the next the rest of the year, three three and

0:04:25.080 --> 0:04:27.320
<v Speaker 4>f cuts. You know, Tors and I are a bit

0:04:27.320 --> 0:04:29.279
<v Speaker 4>skeptical on that. We see what's going on, and I

0:04:29.279 --> 0:04:33.720
<v Speaker 4>think there's maybe one cut. Your basic question, is the

0:04:33.760 --> 0:04:36.080
<v Speaker 4>FED conversation a really important one right now?

0:04:36.200 --> 0:04:36.640
<v Speaker 3>It is.

0:04:38.360 --> 0:04:40.040
<v Speaker 4>I have a view that rates are going to be

0:04:40.080 --> 0:04:42.400
<v Speaker 4>a little bit stickier and higher in the US than

0:04:42.400 --> 0:04:45.080
<v Speaker 4>people think. We've had that view for quite some time,

0:04:46.040 --> 0:04:48.239
<v Speaker 4>but so it is. It is a good question for

0:04:48.080 --> 0:04:51.080
<v Speaker 4>the administration to have right now, but I'm not sure

0:04:51.080 --> 0:04:52.599
<v Speaker 4>that's the primary question for the market.

0:04:52.680 --> 0:04:55.080
<v Speaker 1>One of the reasons why people keep asking this question

0:04:55.360 --> 0:04:57.560
<v Speaker 1>is would the FED be considering cutting for the right

0:04:57.560 --> 0:05:00.440
<v Speaker 1>reasons for the wrong reasons? The right reasons being just inflation,

0:05:01.120 --> 0:05:03.520
<v Speaker 1>which you reject, for the wrong reasons being because we

0:05:03.560 --> 0:05:05.200
<v Speaker 1>are seeing a weakening in the labor market as we

0:05:05.240 --> 0:05:08.400
<v Speaker 1>see as increase in jobless claims. What's your sense of

0:05:08.440 --> 0:05:10.720
<v Speaker 1>that based on what you've seen with portfolio companies, what

0:05:10.760 --> 0:05:12.880
<v Speaker 1>you've seen with your investments, is that valid?

0:05:13.040 --> 0:05:16.400
<v Speaker 4>Yes, I think long term you can't argue with the

0:05:16.560 --> 0:05:22.920
<v Speaker 4>long term deflationary impact of technology and AI that is

0:05:23.080 --> 0:05:27.640
<v Speaker 4>out there now, whether that's six twelve eighteen twenty four months.

0:05:27.839 --> 0:05:32.279
<v Speaker 4>There's a massive deflationary impact from that activity. I just

0:05:32.279 --> 0:05:34.440
<v Speaker 4>don't think it's on the center of the plate right

0:05:34.480 --> 0:05:37.960
<v Speaker 4>now in the markets. It's out there, and I think

0:05:38.000 --> 0:05:44.240
<v Speaker 4>that you're fighting with short term still supply interruptions, hiring interruptions,

0:05:44.360 --> 0:05:48.080
<v Speaker 4>and some short term challenges that are inflationary versus a

0:05:48.240 --> 0:05:53.360
<v Speaker 4>long term backdrop of deflationary trends because of AI around

0:05:53.400 --> 0:05:55.960
<v Speaker 4>the globe. I think that's sort of the center conversion.

0:05:56.120 --> 0:05:58.279
<v Speaker 4>When I'm back here in twenty twenty six and twenty

0:05:58.279 --> 0:06:01.240
<v Speaker 4>twenty seven, I think raids will probably be a bit

0:06:01.320 --> 0:06:06.320
<v Speaker 4>lower because of the technology impact. But I think in

0:06:06.360 --> 0:06:09.039
<v Speaker 4>the next six to nine months, I don't think rates

0:06:09.040 --> 0:06:10.279
<v Speaker 4>are going to be dramatically lower.

0:06:10.360 --> 0:06:12.159
<v Speaker 2>If you'd taken six months off and came back to

0:06:12.200 --> 0:06:13.680
<v Speaker 2>work and look where the market was, I don't think

0:06:13.680 --> 0:06:15.039
<v Speaker 2>you'd have a clue. When I think it happened here.

0:06:15.279 --> 0:06:18.200
<v Speaker 2>Equity's close to all time highs, credit spreads are very tight.

0:06:18.200 --> 0:06:20.640
<v Speaker 2>It's not a market is screaming out for rake cuts.

0:06:20.680 --> 0:06:25.080
<v Speaker 2>From your standpoint at Apollo, when you look at valuation, underwriting,

0:06:25.400 --> 0:06:27.960
<v Speaker 2>any red flags getting your attention at all at the moment,

0:06:29.200 --> 0:06:29.640
<v Speaker 2>you know.

0:06:29.720 --> 0:06:32.280
<v Speaker 3>The economy is amazingly resilient. In the US.

0:06:32.360 --> 0:06:34.520
<v Speaker 4>And I was here three or four months ago, there

0:06:34.600 --> 0:06:37.440
<v Speaker 4>was concern handering about the trajectory of the economy.

0:06:37.760 --> 0:06:39.120
<v Speaker 3>There was handeringing.

0:06:38.600 --> 0:06:42.599
<v Speaker 4>About non US investors, global investors investing in the US.

0:06:43.000 --> 0:06:45.040
<v Speaker 4>I've been all around the world in the last twelve weeks.

0:06:45.600 --> 0:06:50.000
<v Speaker 4>American exceptionalism is front and center. Back you talk about

0:06:50.000 --> 0:06:55.679
<v Speaker 4>where valuations are and levels of equities and raids, they're back.

0:06:56.600 --> 0:06:59.480
<v Speaker 4>Global investors want to invest in the US. They made

0:06:59.520 --> 0:07:01.960
<v Speaker 4>a lot of way, they thought they were going to

0:07:02.000 --> 0:07:05.880
<v Speaker 4>diversify themselves away and they realized the breadth and depth

0:07:06.000 --> 0:07:08.680
<v Speaker 4>and the strength of the US economy and the scale

0:07:08.720 --> 0:07:11.440
<v Speaker 4>of what they need to invest, and the US is

0:07:11.520 --> 0:07:13.800
<v Speaker 4>the primary place to invest.

0:07:13.880 --> 0:07:14.480
<v Speaker 3>It still is.

0:07:14.520 --> 0:07:16.600
<v Speaker 4>So you know, it's sharing as I was in Europe

0:07:16.600 --> 0:07:18.480
<v Speaker 4>a few weeks ago as well, your folks, I want

0:07:18.480 --> 0:07:20.240
<v Speaker 4>to talk about that amazing thing is going on in

0:07:20.240 --> 0:07:24.360
<v Speaker 4>Germany right now. The reality is public markets are the narrative,

0:07:24.760 --> 0:07:28.000
<v Speaker 4>but private capital drives the economy, and we're seeing it.

0:07:28.000 --> 0:07:31.400
<v Speaker 4>We've been amazingly active. Edn F last week a lout

0:07:31.400 --> 0:07:35.160
<v Speaker 4>of matica. What's going on in a variety of financing

0:07:35.280 --> 0:07:37.600
<v Speaker 4>So It's been a very, very busy time, but I'm

0:07:37.640 --> 0:07:40.680
<v Speaker 4>not seeing any red flags going off, and I really

0:07:40.960 --> 0:07:42.840
<v Speaker 4>I want to make sure we talk today about this

0:07:43.560 --> 0:07:48.120
<v Speaker 4>concern about the private capital private credit bubble versus just

0:07:48.160 --> 0:07:51.840
<v Speaker 4>an economic cycle. We're due for a credit cycle, but

0:07:51.920 --> 0:07:54.360
<v Speaker 4>that does not mean it's a bubble and private capital

0:07:54.440 --> 0:07:56.000
<v Speaker 4>is playing a bigger and bigger role.

0:07:56.320 --> 0:07:58.120
<v Speaker 3>Look what we did last week for ED and F

0:07:58.160 --> 0:07:58.800
<v Speaker 3>in the UK.

0:07:58.680 --> 0:08:03.760
<v Speaker 4>And Germany billion dollars strowing private capital financing long duration

0:08:03.920 --> 0:08:06.720
<v Speaker 4>debt to finish out their nuclear power plant build.

0:08:07.080 --> 0:08:09.320
<v Speaker 3>Really really important that we're playing that role.

0:08:09.400 --> 0:08:11.200
<v Speaker 2>Well, sit in Europe, let's just stay there off the

0:08:11.240 --> 0:08:12.880
<v Speaker 2>back of your travel. So you mentioned AD and F,

0:08:12.960 --> 0:08:15.560
<v Speaker 2>big stealing transaction. Also big target from you and the

0:08:15.600 --> 0:08:17.880
<v Speaker 2>team to invest was it one hundred billion in Germany

0:08:17.880 --> 0:08:18.920
<v Speaker 2>over the next decadal set.

0:08:19.200 --> 0:08:21.000
<v Speaker 4>If you're a leadership a journey right now, your goal

0:08:21.040 --> 0:08:23.320
<v Speaker 4>is to get a four trillion economy to a six

0:08:23.360 --> 0:08:26.720
<v Speaker 4>trillion economy, and you are I was with the administration.

0:08:26.880 --> 0:08:29.960
<v Speaker 4>You can talk to Tomerz. You know, they really are

0:08:30.040 --> 0:08:34.280
<v Speaker 4>embracing the role of private capital along with government spending

0:08:34.400 --> 0:08:35.720
<v Speaker 4>over the next five or ten years.

0:08:36.040 --> 0:08:38.360
<v Speaker 2>They've been so dependent on the banking system in Europe

0:08:38.520 --> 0:08:41.000
<v Speaker 2>for such a long time, Can they get away from that?

0:08:41.040 --> 0:08:42.600
<v Speaker 2>Because I feel like I've been talking about this for

0:08:42.600 --> 0:08:43.360
<v Speaker 2>more than a decade.

0:08:43.360 --> 0:08:45.320
<v Speaker 4>Well, I think the evidence is here to if you

0:08:45.320 --> 0:08:47.280
<v Speaker 4>look at the last twenty four months and what's going

0:08:47.320 --> 0:08:49.560
<v Speaker 4>on with the leading Italian banks. Look what's going on

0:08:49.600 --> 0:08:52.920
<v Speaker 4>with HSBC. You know what's going on with Barkley's and

0:08:52.960 --> 0:08:57.319
<v Speaker 4>Deutsche Bank. They're operating in a much different capital regime,

0:08:57.360 --> 0:09:00.480
<v Speaker 4>with a focus on shareholder value, with a focus on

0:09:00.679 --> 0:09:05.760
<v Speaker 4>ROE and they're really not taking all the policy lending

0:09:05.840 --> 0:09:08.120
<v Speaker 4>on their balance sheet like they had in the past, So.

0:09:08.640 --> 0:09:10.240
<v Speaker 3>They're actually operating the right way.

0:09:10.480 --> 0:09:13.079
<v Speaker 4>What you didn't really see before is the government really

0:09:13.120 --> 0:09:18.880
<v Speaker 4>embracing in Germany, in France, in the UK they want

0:09:18.920 --> 0:09:21.240
<v Speaker 4>private capital to be part of the solution because they

0:09:21.320 --> 0:09:25.520
<v Speaker 4>know the government balance sheets cannot do all that's needed

0:09:25.559 --> 0:09:29.920
<v Speaker 4>in terms of the massive capex of transmission, line of transportation,

0:09:30.360 --> 0:09:32.120
<v Speaker 4>of AI, of data centers.

0:09:32.160 --> 0:09:33.200
<v Speaker 3>They know they're behind.

0:09:33.280 --> 0:09:37.400
<v Speaker 4>So if anything, this administration in the US, the memo

0:09:37.480 --> 0:09:40.000
<v Speaker 4>they sent out about what's going on in the US

0:09:40.360 --> 0:09:45.160
<v Speaker 4>and Europe stepping forward, European leadership has taken notice. Let

0:09:45.240 --> 0:09:47.960
<v Speaker 4>there be no doubt. I go to Europe three four

0:09:48.000 --> 0:09:51.360
<v Speaker 4>times a year. I've never been so embraced as we

0:09:51.400 --> 0:09:54.520
<v Speaker 4>were three weeks ago in Germany and France about the

0:09:54.600 --> 0:09:56.520
<v Speaker 4>role of private capital in this buildout.

0:09:56.679 --> 0:09:59.240
<v Speaker 1>How much is that driven by this US administration?

0:09:59.520 --> 0:09:59.920
<v Speaker 3>A lot.

0:10:00.080 --> 0:10:04.520
<v Speaker 4>I mean, it's clear that they know that the European

0:10:04.600 --> 0:10:08.120
<v Speaker 4>leadership has even if you look this morning about how

0:10:08.200 --> 0:10:12.160
<v Speaker 4>they're stepping up on defense spending with NATO. So I think,

0:10:12.920 --> 0:10:14.839
<v Speaker 4>you know, when I think about the globe right now, again,

0:10:15.240 --> 0:10:17.760
<v Speaker 4>taros are a little bit off on the sidelines. They're

0:10:17.800 --> 0:10:20.800
<v Speaker 4>part of the conversation. It's a question of how much,

0:10:20.880 --> 0:10:23.959
<v Speaker 4>not if, or when. And I do think they feel

0:10:23.960 --> 0:10:26.880
<v Speaker 4>like there's a responsibility that they have for their citizens,

0:10:26.920 --> 0:10:29.600
<v Speaker 4>because when you look at the last fifteen years and

0:10:29.679 --> 0:10:32.959
<v Speaker 4>where the US has grown versus europe growth, it's startling.

0:10:33.240 --> 0:10:35.480
<v Speaker 4>You know, when I got out a college a few

0:10:35.520 --> 0:10:38.240
<v Speaker 4>decades ago, it was all about Japan. Japan was going

0:10:38.280 --> 0:10:40.440
<v Speaker 4>to take over the world. It was all about Germany

0:10:40.480 --> 0:10:42.280
<v Speaker 4>industrial taking over the world.

0:10:42.520 --> 0:10:44.000
<v Speaker 3>That did not come to play.

0:10:44.360 --> 0:10:46.040
<v Speaker 4>And I know they have a lot of catching up

0:10:46.080 --> 0:10:48.880
<v Speaker 4>to do, and I just think it's a very very now.

0:10:49.280 --> 0:10:51.080
<v Speaker 4>You know, if you watch, if you listen, if you

0:10:51.160 --> 0:10:54.040
<v Speaker 4>read the draggy letter and what he put forth eighteen

0:10:54.080 --> 0:10:57.920
<v Speaker 4>months ago. Now, if they followed that all one hundred

0:10:57.920 --> 0:11:00.880
<v Speaker 4>and fifty six pages in great detail, it would be

0:11:00.920 --> 0:11:04.800
<v Speaker 4>a watershed economic opportunity. And I think parts of that

0:11:04.880 --> 0:11:08.280
<v Speaker 4>will to come forth. But they're already making moves on

0:11:08.360 --> 0:11:12.880
<v Speaker 4>securitization other activities. And to Jonathan's point, the European banks

0:11:12.960 --> 0:11:16.400
<v Speaker 4>are a bit behind the US in terms of the

0:11:16.440 --> 0:11:21.520
<v Speaker 4>fundamental focus on roe and shareholder return and capital efficiency.

0:11:21.800 --> 0:11:24.000
<v Speaker 4>But I think, I don't want to say they're catching up,

0:11:24.000 --> 0:11:25.319
<v Speaker 4>but they're getting in line.

0:11:25.360 --> 0:11:28.360
<v Speaker 2>Clearly, you've talked about macro paralysis in the past. I

0:11:28.360 --> 0:11:30.839
<v Speaker 2>don't see any sign of paralysis when I look at, saye,

0:11:30.920 --> 0:11:33.520
<v Speaker 2>high yield issuance, when I look at activity, Do you

0:11:33.520 --> 0:11:34.600
<v Speaker 2>see paralysis at all?

0:11:35.280 --> 0:11:37.360
<v Speaker 3>I don't. And back to this last topic.

0:11:37.400 --> 0:11:40.320
<v Speaker 4>I mean, as you point out, at least pointing out

0:11:40.600 --> 0:11:42.440
<v Speaker 4>the two big topics that they need to really deal

0:11:42.440 --> 0:11:45.040
<v Speaker 4>with right now is the tariffs on July ninth and

0:11:45.080 --> 0:11:47.280
<v Speaker 4>the big beautiful bill. But we're not talking about that

0:11:47.360 --> 0:11:50.880
<v Speaker 4>this point. We're talking about a FED chairman in nine months.

0:11:51.360 --> 0:11:55.080
<v Speaker 4>And I look at everything through what this president has

0:11:55.120 --> 0:11:57.360
<v Speaker 4>been in the past is a real estate developer. It's

0:11:57.400 --> 0:12:02.240
<v Speaker 4>all about location, location, location, pick will be about loyalty, loyalty, loyalty.

0:12:02.320 --> 0:12:06.959
<v Speaker 4>Let's not get confused. There isn't paralysis in the market.

0:12:07.000 --> 0:12:09.959
<v Speaker 4>As I mentioned before you the public markets in the narrative,

0:12:10.000 --> 0:12:12.920
<v Speaker 4>the private capital is really the driver the economy. A

0:12:12.960 --> 0:12:17.040
<v Speaker 4>lot of activity going on in the US on refinancing,

0:12:17.559 --> 0:12:22.040
<v Speaker 4>in Europe, on the global industrial renaissance. So we are

0:12:22.080 --> 0:12:25.360
<v Speaker 4>on pace to have our busiest quarter in origination. We've

0:12:25.400 --> 0:12:28.600
<v Speaker 4>had in a number of years, a tremendous amount of

0:12:28.640 --> 0:12:33.760
<v Speaker 4>activity across our equity platform, our infrastructure platform, our credit platform.

0:12:34.280 --> 0:12:36.760
<v Speaker 4>So I do think there was a lot of handeringing

0:12:36.800 --> 0:12:39.160
<v Speaker 4>as I said six six or three four months ago,

0:12:39.480 --> 0:12:41.720
<v Speaker 4>and I think that's now on the sidelines, maybe not

0:12:41.760 --> 0:12:43.400
<v Speaker 4>on the narrative, but certainly on activity.

0:12:43.480 --> 0:12:45.880
<v Speaker 1>Is that activity in lieu of some of the deals

0:12:45.920 --> 0:12:48.439
<v Speaker 1>activity that we were expecting. Was it sort of expected

0:12:48.440 --> 0:12:50.360
<v Speaker 1>to be the deals and the IPOs and the big

0:12:50.400 --> 0:12:52.960
<v Speaker 1>boom for the banks, and instead it's a Powell coming

0:12:53.000 --> 0:12:54.520
<v Speaker 1>in and doing a lot of financing deals in.

0:12:54.440 --> 0:12:55.720
<v Speaker 3>The back Well, I think too.

0:12:56.160 --> 0:12:59.480
<v Speaker 4>I think beginning of the year people projected that the

0:12:59.520 --> 0:13:01.800
<v Speaker 4>busiest folks on Wall Street would have been the ECM

0:13:01.840 --> 0:13:04.760
<v Speaker 4>equity capital markets teams and the M and A teams,

0:13:05.080 --> 0:13:07.760
<v Speaker 4>And while they've both been busy, the busiest folks have

0:13:07.800 --> 0:13:12.480
<v Speaker 4>been their rate hedging and derivatives teams because of what's

0:13:12.480 --> 0:13:15.440
<v Speaker 4>going on in the dollar and concern about tariffs and such.

0:13:15.840 --> 0:13:17.480
<v Speaker 3>But it's an interesting backround.

0:13:17.679 --> 0:13:21.360
<v Speaker 4>Even listening to your program this morning, the fundamental economy

0:13:21.400 --> 0:13:24.040
<v Speaker 4>is doing fine. It's doing well, maybe not to the

0:13:24.040 --> 0:13:27.240
<v Speaker 4>growth expectations that people had earlier this year, and will

0:13:27.280 --> 0:13:29.920
<v Speaker 4>come out somewhere around a two percent growth with about

0:13:29.960 --> 0:13:32.800
<v Speaker 4>three percent inflation. But whether it was Nvidia, whether it

0:13:32.840 --> 0:13:35.800
<v Speaker 4>was Micron, you know, a lot of cappec still going,

0:13:36.240 --> 0:13:39.880
<v Speaker 4>a lot of companies in the AI space raising tremendous

0:13:39.880 --> 0:13:43.840
<v Speaker 4>amounts of capital at high valuations with long list of

0:13:43.880 --> 0:13:47.520
<v Speaker 4>investors coming in, and the activity, as I said earlier,

0:13:47.559 --> 0:13:50.360
<v Speaker 4>what's going on in Europe right now about that industrial renaissance.

0:13:51.000 --> 0:13:53.720
<v Speaker 4>It's still going on. So again, I think there's the

0:13:53.760 --> 0:13:56.760
<v Speaker 4>headlines and then there's the reality of the underlying economy

0:13:57.120 --> 0:13:59.480
<v Speaker 4>and the role of private capital, which is a much

0:13:59.559 --> 0:14:01.360
<v Speaker 4>much bigger, longer term story.

0:14:01.559 --> 0:14:03.480
<v Speaker 1>How do you think you're going to decipher the reality

0:14:03.600 --> 0:14:05.840
<v Speaker 1>versus the headlines when it comes to New York City.

0:14:06.120 --> 0:14:07.400
<v Speaker 3>You have a huge company here.

0:14:07.280 --> 0:14:08.840
<v Speaker 1>In New York, and a lot of people are concerned

0:14:08.840 --> 0:14:10.120
<v Speaker 1>about a Democratic.

0:14:09.679 --> 0:14:11.840
<v Speaker 3>Socialist becoming the mayor of the city.

0:14:11.920 --> 0:14:14.080
<v Speaker 4>You know, it's probably one of the most complicated jobs

0:14:14.120 --> 0:14:16.040
<v Speaker 4>in the world on the political stage, in terms of

0:14:16.080 --> 0:14:21.000
<v Speaker 4>bringing a variety of the five girls together, the business,

0:14:21.040 --> 0:14:26.240
<v Speaker 4>the community, the unions, all the folks that make New

0:14:26.320 --> 0:14:28.600
<v Speaker 4>York the special place it is. As I've mentioned before,

0:14:29.120 --> 0:14:31.280
<v Speaker 4>three out of every one hundred college graduates a year

0:14:31.320 --> 0:14:33.800
<v Speaker 4>come to New York. In the US, it's still the

0:14:33.840 --> 0:14:37.920
<v Speaker 4>magnet of talent and ambition. So when you see somebody

0:14:37.960 --> 0:14:40.720
<v Speaker 4>that on the surface does not appear to have a

0:14:40.920 --> 0:14:47.359
<v Speaker 4>long resume of leadership and making tough decisions, really concerning.

0:14:48.080 --> 0:14:51.680
<v Speaker 4>And I think that we'll see now just winning the primary, well,

0:14:51.720 --> 0:14:53.640
<v Speaker 4>in the past it might have been the litmus test

0:14:53.680 --> 0:14:56.040
<v Speaker 4>for being the mayor. I think there's still a long

0:14:56.040 --> 0:14:57.320
<v Speaker 4>time coming until November.

0:14:57.360 --> 0:14:59.240
<v Speaker 2>Build down the office in Florida. Is that what you'll

0:14:59.280 --> 0:15:02.760
<v Speaker 2>hear in that's there was the most diplomatic response.

0:15:03.080 --> 0:15:06.160
<v Speaker 4>We we we are, we we we are, we are,

0:15:06.200 --> 0:15:08.520
<v Speaker 4>we are a New York company, and we got we

0:15:08.600 --> 0:15:10.800
<v Speaker 4>we are. We are determined to be here. I'm determined

0:15:10.840 --> 0:15:12.800
<v Speaker 4>to be here. Our leadership is determined to be here.

0:15:13.200 --> 0:15:15.360
<v Speaker 4>We have people in the office five days a week.

0:15:16.320 --> 0:15:16.920
<v Speaker 1>He's running.

0:15:17.080 --> 0:15:19.680
<v Speaker 3>You know. It's uh January, Jim.

0:15:19.680 --> 0:15:22.160
<v Speaker 2>It's good to see you. Happy birthday, Jimi, a polit