WEBVTT - Bloomberg Businessweek Weekend - March 7th, 2025 0:00:00.280 --> 0:00:07.240 Bloomberg Audio Studios, Podcasts, radio news. 0:00:08.760 --> 0:00:12.799 This is Bloomberg Business Week, insight from the reporters and 0:00:12.960 --> 0:00:16.960 editors that bring you America's most trusted business magazine, plus 0:00:17.160 --> 0:00:20.959 global business, finance and tech news. The Bloomberg Business Week 0:00:20.960 --> 0:00:25.759 Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio. 0:00:26.400 --> 0:00:29.360 Hi, everyone, Welcome to the weekend edition of Bloomberg Business Week. 0:00:29.760 --> 0:00:32.680 It's definitely been a wild week in global markets, politics 0:00:32.720 --> 0:00:37.520 and geopolitics, and really in thinking around whether American exceptionalism 0:00:37.640 --> 0:00:41.920 is still a thing. President Trump addressed Congress tariffs against Canada, 0:00:42.040 --> 0:00:45.880 Mexico and China went into effect, then summer delayed Broadcom 0:00:45.920 --> 0:00:48.760 earning surprise to the upside, reassuring investors at the AI 0:00:48.760 --> 0:00:51.479 spend remains healthy. And we got a gut check on 0:00:51.520 --> 0:00:53.920 the US economy with the Friday jobs report, which was 0:00:54.000 --> 0:00:57.520 mixed steady hiring, bud a higher unemployment rate. All of 0:00:57.520 --> 0:00:59.240 the details can be found on the Bloomberg and at 0:00:59.240 --> 0:00:59.920 Bloomberg dot com. 0:01:00.320 --> 0:01:02.600 Speaking of gut checks, Carol, we got a great one 0:01:02.600 --> 0:01:05.080 this week on the investment environment by spending time in 0:01:05.080 --> 0:01:07.720 the heart of New York's financial district at Bloomberg invest 0:01:08.080 --> 0:01:10.560 it's our annual live event, and it unites leaders in 0:01:10.600 --> 0:01:13.240 asset management, banking, wealth and private markets. 0:01:13.280 --> 0:01:15.480 We're going to bring you some of our conversations with 0:01:15.600 --> 0:01:18.480 those managing billions of dollars in the public and private 0:01:18.560 --> 0:01:20.800 markets and who have a front row seat when it 0:01:20.840 --> 0:01:22.839 comes to the investment environment. 0:01:22.640 --> 0:01:25.319 Including the president of the NYSC Group on whether an 0:01:25.360 --> 0:01:28.880 IPO boom is coming. Also New York Fed President John 0:01:28.880 --> 0:01:31.720 Williams talks tariffs and inflation. 0:01:31.480 --> 0:01:34.240 Plus a couple of conversations that brought tech and the 0:01:34.280 --> 0:01:38.000 investing world together, as Dell's Chief AI officer gives us 0:01:38.040 --> 0:01:41.240 a reality check on the AI spend. And then speaking 0:01:41.240 --> 0:01:43.760 of AI, we'll hear from sig Tech founder and CEO 0:01:43.880 --> 0:01:47.480 Bin Wren. His company provides an AI agent for financial 0:01:47.520 --> 0:01:48.440 services firms. 0:01:48.560 --> 0:01:50.600 First up, one of the discussions from the stage of 0:01:50.600 --> 0:01:53.040 Bloomberg invest Carol, you had a chance to talk to 0:01:53.120 --> 0:01:56.560 Lynn Martin, president of the NYSC Group. You guys talked 0:01:56.600 --> 0:02:00.120 about what some could say, perhaps maybe a boom in 0:02:00.200 --> 0:02:01.320 IPOs this year. 0:02:01.400 --> 0:02:04.640 Our chat happened on Tuesday beginning, just as markets opened, 0:02:04.720 --> 0:02:08.080 and we're selling off on tariff concerns. She reminded us 0:02:08.120 --> 0:02:09.200 not to panic. 0:02:09.040 --> 0:02:13.400 Remember that the S and P and the Dow in 0:02:13.440 --> 0:02:18.880 particular are still above the pre election level. So remember 0:02:18.919 --> 0:02:23.920 there was a big euphoria that occurred host election Day 0:02:24.639 --> 0:02:27.560 in the market, which was maybe overdone at that point. 0:02:27.680 --> 0:02:30.359 Potentially potentially, I mean markets recalibrate. 0:02:31.440 --> 0:02:34.919 So I was thinking about core Weave, backed by Nvidia 0:02:35.400 --> 0:02:39.240 cloud computing provider. They filed for an IPO Bloomberg reporting 0:02:39.240 --> 0:02:40.640 it could raise four billion. 0:02:40.400 --> 0:02:41.440 Dollars from the listing. 0:02:41.800 --> 0:02:45.960 It's expected to target evaluation greater than thirty five billion dollars. 0:02:46.680 --> 0:02:50.840 We are expecting kind of a wave of potentially sizable 0:02:50.880 --> 0:02:53.680 listings this year. On a day when the market sold off, 0:02:53.919 --> 0:02:56.040 it was the worst selloffs so far this year. What 0:02:56.080 --> 0:02:58.639 was more interesting to you, was it the selloff or 0:02:58.680 --> 0:02:59.639 the core Weave listing. 0:03:00.360 --> 0:03:04.280 The what you will see now our companies start to 0:03:04.639 --> 0:03:07.480 flip public. But it's a timing thing. What most people 0:03:07.520 --> 0:03:10.880 don't appreciate is if you're a private company, your financials 0:03:10.919 --> 0:03:14.600 go stale at some point, so you need to restate financials. 0:03:14.600 --> 0:03:16.320 That's what happens between. 0:03:16.840 --> 0:03:20.520 Sort of that mid February to end of February, when 0:03:20.520 --> 0:03:23.280 you get your audited financials for the previous business year. 0:03:23.440 --> 0:03:27.040 So I anticipate, based on our pipeline, we're going to 0:03:27.120 --> 0:03:29.919 start to see some companies flip public. We had one 0:03:29.960 --> 0:03:31.880 flip public called Mountain. 0:03:32.160 --> 0:03:34.480 Are you hearing from companies you're busy? 0:03:34.639 --> 0:03:36.400 Yeah, yeah, we are busy. We are busy. 0:03:36.440 --> 0:03:40.720 We're busy not just from the perspective of working with 0:03:40.800 --> 0:03:43.240 our pipeline to actually get them out the door so 0:03:43.360 --> 0:03:48.720 in execution mode, but also we're very busy in terms 0:03:48.720 --> 0:03:52.200 of pitches. Are you where companies are, you know, making 0:03:52.280 --> 0:03:56.080 their tians. They're making plans for more like second half 0:03:56.120 --> 0:03:57.680 of sizable ones, small. 0:03:57.520 --> 0:03:59.920 Yeah, decent, decent sized ones, mix of both. 0:04:00.560 --> 0:04:04.000 Now, are you worried though about our world is day 0:04:04.040 --> 0:04:07.600 to day where whatever comes out of Washington, every executive order, 0:04:08.120 --> 0:04:11.760 whatever press event happens from the Oval Office because it 0:04:11.800 --> 0:04:16.760 moves markets can Are you concerned about what you're hearing 0:04:16.839 --> 0:04:20.599 now and what seems to be optimism for IPOs that 0:04:20.600 --> 0:04:21.920 that could get derailed. 0:04:22.520 --> 0:04:24.640 The only way that I think it's going to get 0:04:24.680 --> 0:04:30.560 derailed is if the volatility in the market becomes outsized, 0:04:31.040 --> 0:04:32.320 and I don't think it'll get derailed. 0:04:32.440 --> 0:04:34.440 We've moved up a little bit, but we've moved. 0:04:34.320 --> 0:04:36.719 Up a little bit but you know, a Vicks around 0:04:36.760 --> 0:04:37.839 twenty is still fine. 0:04:37.920 --> 0:04:38.560 So there's. 0:04:39.880 --> 0:04:41.400 Is there something that the president could do? 0:04:42.200 --> 0:04:42.760 I don't know. 0:04:43.520 --> 0:04:45.960 He seems to be very focused on three key areas, 0:04:46.360 --> 0:04:50.240 or this administration is focused on three key areas, border security, 0:04:50.680 --> 0:04:55.760 resolving the wars that have sadly overtaken other other nations, 0:04:56.279 --> 0:04:59.800 and our economy. And what you're seeing right now is 0:05:00.080 --> 0:05:04.440 confluence of all three come into the four and start 0:05:04.480 --> 0:05:05.440 to affect policy. 0:05:05.760 --> 0:05:07.000 It's a lot, yeah. 0:05:07.240 --> 0:05:07.600 It is. 0:05:09.279 --> 0:05:12.000 What about the raid environment, because we have seen the 0:05:12.080 --> 0:05:16.040 US Treasury curve move down YEP, significantly, Yeah, and interesting 0:05:16.120 --> 0:05:17.080 the last few days. 0:05:18.920 --> 0:05:19.839 If we see. 0:05:19.600 --> 0:05:22.599 That move down, I guess there's a couple scenarios, right, 0:05:22.720 --> 0:05:27.200 moving down without a recession better, especially for the IPO market. Like, 0:05:27.400 --> 0:05:29.000 tell me some of the other factors that you think 0:05:29.040 --> 0:05:31.360 about that will determine what happens this year. 0:05:31.360 --> 0:05:33.080 Well, I mean, if you also look at the raid environment, 0:05:33.160 --> 0:05:37.320 that's going to affect mortgages, it's going to affect loans, 0:05:37.360 --> 0:05:40.760 it's going to affect other parts of the ecosystem. You 0:05:40.760 --> 0:05:43.160 look at the bank stocks for example, they're doing quite 0:05:43.200 --> 0:05:47.240 well at the moment. That's probably more to do with 0:05:47.960 --> 0:05:51.240 promises on the regulatory side as opposed. 0:05:50.760 --> 0:05:52.840 To the interest rate side. 0:05:52.960 --> 0:05:55.200 But there are a variety of other parts of the 0:05:55.240 --> 0:05:58.400 ecosystem that would benefit from a lower rate environment. 0:05:58.600 --> 0:05:59.280 So we'll see. 0:05:59.400 --> 0:06:01.120 What do you think of at the private equity world 0:06:01.160 --> 0:06:03.720 in terms of finally looking to spin out some of 0:06:03.760 --> 0:06:06.400 their investments. Yeah, not in an easy environment, we know that, 0:06:06.800 --> 0:06:10.520 Carlisle telling Reuters we're looking maybe for four billion dollars 0:06:10.520 --> 0:06:12.800 worth of maybe you know investments coming out. What are 0:06:12.800 --> 0:06:15.600 you hearing or what are your expectations. Do we finally 0:06:15.760 --> 0:06:19.120 see some of the private equity investors somehow you know, 0:06:19.400 --> 0:06:21.080 either IPO selling assets. 0:06:21.360 --> 0:06:21.960 What do you expect? 0:06:22.040 --> 0:06:25.120 Yeah, we've seen a couple of sponsor backed deals go 0:06:25.279 --> 0:06:29.200 out last year. Actually Standard Era was one that did 0:06:29.360 --> 0:06:33.039 particularly well. That was a Carlisle deal that did particularly 0:06:33.040 --> 0:06:38.279 well in October last year, raising north of a billion 0:06:38.360 --> 0:06:42.280 and trading really well in the secondary market. I think 0:06:42.440 --> 0:06:47.840 the more deals that get done good valuations and raise 0:06:47.880 --> 0:06:51.279 good amounts of capital and then importantly trade well in 0:06:51.360 --> 0:06:55.200 the secondary market given the liquidity and demand from investors, 0:06:55.560 --> 0:06:59.039 think you'll start to see some of the sponsors start 0:06:59.120 --> 0:07:05.240 to start to float their aged assets or look to 0:07:05.279 --> 0:07:08.200 the m and A markets. So it's not just about IPOs. 0:07:08.560 --> 0:07:12.920 This administration is also promising a more favorable m and 0:07:13.000 --> 0:07:18.640 A environment, which is another area that's attractive to sponsors. 0:07:19.400 --> 0:07:22.360 Lyn One thing I want to ask you Bloomberg reporting 0:07:22.360 --> 0:07:24.040 about a couple of weeks ago. Have three of the 0:07:24.120 --> 0:07:27.560 US's four largest IPOs this year have traded below their 0:07:27.600 --> 0:07:29.200 offer price in their first session? 0:07:29.680 --> 0:07:32.080 So many we consider that? Yeah, it's it's been a 0:07:32.280 --> 0:07:33.000 quiet though. 0:07:33.200 --> 0:07:35.000 Does that tell you that they shouldn't have gone public, 0:07:35.040 --> 0:07:35.920 that they went too soon? 0:07:36.160 --> 0:07:39.840 No, I think I think there's just a question on 0:07:39.920 --> 0:07:41.200 the valuations. 0:07:41.280 --> 0:07:41.840 Maybe, but. 0:07:43.480 --> 0:07:47.040 Sometimes that happens. Yeah, First of all, there's been very few. 0:07:46.800 --> 0:07:48.080 Deals that have gone. 0:07:49.680 --> 0:07:51.880 We've had a couple of deals have done really well. 0:07:51.960 --> 0:07:55.280 If you look at Floco and Carmen, Space and defense, 0:07:55.320 --> 0:07:59.400 those are in industries that are very attractive to investors 0:07:59.400 --> 0:08:01.560 at the moment, done really well. It's a bit of 0:08:01.560 --> 0:08:03.840 an art that the bankers have to do. They'll figure 0:08:03.840 --> 0:08:09.280 out the right valuation mixed with investor investor demand. The 0:08:09.320 --> 0:08:12.240 companies that are trading below they haven't had their first 0:08:12.240 --> 0:08:15.520 earnings calls yet. I mean, let's see, let's see. 0:08:15.360 --> 0:08:16.760 Where we're saying, be patient a little bit. 0:08:16.880 --> 0:08:24.360 Yeah, it's not an instantaneous it's not an instantaneous judgment 0:08:24.520 --> 0:08:28.560 on a companies. Let's see how some of those companies do, 0:08:28.840 --> 0:08:31.440 particularly like a Venture Global, who's really well positioned in 0:08:31.440 --> 0:08:35.520 the LNG markets, all the infrastructure moves that are taking 0:08:35.520 --> 0:08:36.520 place in this country. 0:08:36.600 --> 0:08:38.120 We've got two minutes. There's two things I want to 0:08:38.160 --> 0:08:41.160 ask you. In twenty twenty one, the USIPO market hit 0:08:41.160 --> 0:08:43.640 a record high. There are some expectations that we could 0:08:43.720 --> 0:08:46.440 get back to pre pandemic level. On the record, do 0:08:46.440 --> 0:08:48.000 you think we could get there this year? 0:08:48.280 --> 0:08:51.040 I think twenty twenty one is an anomaly. I think 0:08:51.040 --> 0:08:54.160 twenty twenty two is an anomaly. I think those are 0:08:54.559 --> 0:09:00.280 two ends of the bell curve, positive and negative. When 0:09:00.280 --> 0:09:02.559 you can said, depending on what your perspective is on 0:09:03.320 --> 0:09:05.800 twenty one and twenty two, I think we'll get back 0:09:05.880 --> 0:09:10.640 to a more normal IPO environment where companies raise and 0:09:10.679 --> 0:09:13.600 aggregate about fifty billion dollars. Yeah, there's a good number 0:09:13.600 --> 0:09:17.720 that actually go out. We would have gotten there last year. 0:09:17.920 --> 0:09:20.800 I think if we didn't have a pause in the 0:09:20.880 --> 0:09:25.040 summer which we saw, which was all sparked by the election, 0:09:25.559 --> 0:09:29.200 an uncertainty around the election. So if you had asked 0:09:29.240 --> 0:09:33.040 me last may or June. I thought we were on 0:09:33.120 --> 0:09:36.120 pace for a pretty normal IPO year for twenty four, 0:09:36.320 --> 0:09:38.600 So I think we'll get there in twenty five. 0:09:38.720 --> 0:09:40.320 The other thing I've got to ask you, there's so 0:09:40.440 --> 0:09:44.400 much money in the private yeah world, Anthropic closing a 0:09:44.440 --> 0:09:46.360 deal to raise three and a half billion and evaluation 0:09:46.400 --> 0:09:49.120 of sixty one and a half billion open ai I 0:09:49.160 --> 0:09:52.760 meantime currently talks to raise forty billion SoftBank other investors 0:09:52.760 --> 0:09:55.000 for an even larger three hundred million dollar valuation. 0:09:55.440 --> 0:09:56.480 I could go on and on. 0:09:58.360 --> 0:10:02.480 How does that hold back the IPO market that especially? 0:10:02.559 --> 0:10:02.880 I don't know. 0:10:03.000 --> 0:10:04.760 Is it just the AI world that is able to 0:10:04.760 --> 0:10:05.080 tap it? 0:10:05.080 --> 0:10:08.080 In your view, I think when a company comes out, 0:10:08.360 --> 0:10:11.760 they are more ready to be a public company. I'm 0:10:11.760 --> 0:10:14.199 more ready to be a public company. I mean, you've 0:10:14.200 --> 0:10:18.280 got durable growth, you can articulate, very clear strategy, a 0:10:18.360 --> 0:10:19.560 very disciplined piano. 0:10:19.640 --> 0:10:20.520 So this is a good thing. 0:10:20.600 --> 0:10:22.440 I think it's a good thing. I think the private 0:10:22.440 --> 0:10:25.200 markets and the public markets have to work in concert. 0:10:25.880 --> 0:10:28.199 All right, So thirteen seconds, this is what we call 0:10:28.240 --> 0:10:32.480 a super rapid round. Okay, what's the most optimistic view 0:10:32.520 --> 0:10:33.319 for the IPO market? 0:10:33.360 --> 0:10:38.760 This year most optimistic IPO. I think you're going to 0:10:38.800 --> 0:10:41.600 have a normal environment. Last year if I look at 0:10:41.600 --> 0:10:43.440 the companies, the most important thing that I look at 0:10:43.440 --> 0:10:47.560 as a secondary market for IPOs, companies that listed on 0:10:47.559 --> 0:10:51.480 the New York Stock Exchange treated fifty eight percent above 0:10:51.520 --> 0:10:54.640 their IPO price. So I think we're going to hopefully 0:10:54.679 --> 0:10:57.920 see that type of growth in the secondary just post 0:10:57.960 --> 0:10:58.680 IPO market. 0:10:58.840 --> 0:10:59.000 SHU. 0:10:59.400 --> 0:11:02.600 Last question, flipside to that is what's the biggest risk. 0:11:03.000 --> 0:11:05.800 So the biggest risk of volatility the things that are 0:11:05.840 --> 0:11:09.920 unexpected that happen in the market from time to time. 0:11:10.400 --> 0:11:12.120 I don't have a crystal ball. I don't know what 0:11:12.160 --> 0:11:14.640 that's going to be. Unfortunately, I don't know what's going 0:11:14.720 --> 0:11:19.440 to cause that unexpected shock. But I think the market 0:11:19.960 --> 0:11:27.839 does recognize those three pillars, resolving geopolitical conflict, border security, 0:11:27.920 --> 0:11:32.760 and focusing on a strong domestic economy. So as long 0:11:32.800 --> 0:11:36.800 as the administration stays within those three pillars, I don't 0:11:36.800 --> 0:11:39.400 know that there's much that's going to derail things. 0:11:39.480 --> 0:11:41.640 But the risk sounds like it'll come from Washington. 0:11:41.920 --> 0:11:42.320 I don't. 0:11:42.400 --> 0:11:44.680 I actually have no idea it could be. I mean, 0:11:45.120 --> 0:11:47.800 you look at something like deep seek. I heard the 0:11:47.920 --> 0:11:50.800 folks right before the panel, right before this talk about 0:11:50.840 --> 0:11:53.720 deep seek. That was a big surprise that caused the 0:11:53.760 --> 0:12:01.600 market to react pretty negatively when those now, when those yeah, 0:12:01.640 --> 0:12:05.079 when those usage numbers came out. That has nothing to 0:12:05.160 --> 0:12:07.520 do with anything that's happening. 0:12:07.200 --> 0:12:10.280 In DC our Thanks to Lynn Martin, president of the 0:12:10.400 --> 0:12:13.560 NYS Group, in a panel discussion with Carol at Bloomberg 0:12:13.600 --> 0:12:16.160 invest in New York City. A couple of days after 0:12:16.320 --> 0:12:18.840 that chat, we got the news that Klarna is said 0:12:18.840 --> 0:12:20.920 to be seeking to raise at least a billion dollars 0:12:20.960 --> 0:12:23.640 in an IPO. That's according to people familiar coming up. 0:12:23.640 --> 0:12:26.240 There are FED speakers, and then there are FED speakers, 0:12:26.559 --> 0:12:29.120 cheer J Powell. Of course, anytime he talks, we are 0:12:29.120 --> 0:12:31.439 all sitting up a little bit straight or listening to 0:12:31.520 --> 0:12:33.240 what he has to say. And then there's also the 0:12:33.280 --> 0:12:35.239 President of the New York Fed. 0:12:35.440 --> 0:12:38.160 That is John Williams, who talks tariffs and more. When 0:12:38.160 --> 0:12:41.319 Bloomberg Business Week continues, this is Bloomberg. 0:12:41.720 --> 0:12:45.280 You're listening to the Bloomberg Business Week podcast. Catch us 0:12:45.360 --> 0:12:48.800 live weekday afternoons from two to five pm Eastern Listen 0:12:48.840 --> 0:12:52.040 on Apple CarPlay and Android Auto with the Bloomberg Business 0:12:52.080 --> 0:12:56.880 app or watch us live on YouTube. 0:12:56.040 --> 0:12:58.400 More of our highlights from Bloomberg invest in New York 0:12:58.520 --> 0:13:02.240 City this past week that gathers allocators, deal makers and 0:13:02.320 --> 0:13:05.440 investors from across the globe to track, dissect, and navigate 0:13:05.440 --> 0:13:09.160 the markets with the industry's most influential voices and. 0:13:09.160 --> 0:13:11.640 Safe to say, among those that markets and investors watch 0:13:11.720 --> 0:13:14.760 the most, the Federal Reserve and a key voting member 0:13:14.800 --> 0:13:18.000 of the US Central Banks Policy Setting Committee, the President 0:13:18.040 --> 0:13:20.079 of the New York Fed, John Williams. 0:13:20.360 --> 0:13:23.680 He spoke with Bloomberg News International Economics and Policy correspondent 0:13:23.679 --> 0:13:27.319 Michael McKee about President Donald Trump's tariffs and their possible 0:13:27.400 --> 0:13:28.560 impact on inflation. 0:13:29.120 --> 0:13:31.079 You know, when we look at the research that looks 0:13:31.120 --> 0:13:33.880 at the effects of terrorists on the US economy, you know, 0:13:33.920 --> 0:13:35.880 one of the things that's highlights it depends whether it's 0:13:35.880 --> 0:13:38.920 consumer goods. It depends on whether it's goods that lots 0:13:38.920 --> 0:13:40.679 of countries produce, and a lot of things like that. 0:13:40.760 --> 0:13:43.120 So you know, it really made sense to let's wait 0:13:43.160 --> 0:13:46.480 and see find out more about what policies may be 0:13:46.520 --> 0:13:49.240 put in place, and then kind of you know, come 0:13:49.280 --> 0:13:53.560 to I would say, you know, conditional judgments about what 0:13:53.559 --> 0:13:56.040 does it mean for the US economy, and as you said, 0:13:56.160 --> 0:14:00.880 we are seeing more actual actions on tariff and different dimensions. 0:14:00.920 --> 0:14:03.439 I would still highlight there's a lot of uncertainty. We 0:14:03.480 --> 0:14:05.520 don't know how long the tariffs will apply. We don't 0:14:05.559 --> 0:14:08.880 know what other countries may do in response to this. 0:14:09.559 --> 0:14:11.880 We don't We also don't know what else may happen 0:14:12.040 --> 0:14:15.040 in this, you know, in the kind of realm of 0:14:15.080 --> 0:14:15.840 trade policy. 0:14:16.480 --> 0:14:16.559 You know. 0:14:16.640 --> 0:14:20.040 My own view is that, based on experience from a 0:14:20.120 --> 0:14:24.120 previous episodes, based on analysis, is that you know, tariffs 0:14:24.160 --> 0:14:28.080 on consumer goods especially, they do feed into import prices 0:14:28.080 --> 0:14:33.280 pretty strongly. That does filter into prices that consumers pay. 0:14:33.480 --> 0:14:37.920 That happens relatively soon tariffs and feed into kind of 0:14:37.920 --> 0:14:40.960 intermediate inputs the things that companies use to make other 0:14:41.040 --> 0:14:43.840 things and to make other things. Those tend to pass 0:14:43.880 --> 0:14:47.720 through more gradually and have maybe last a little bit 0:14:47.760 --> 0:14:51.040 longer in terms of effects. My view is that, you know, 0:14:51.040 --> 0:14:53.880 based on what we know today, given all the uncertainties 0:14:53.880 --> 0:14:57.640 around that, you know, I do factor in some effects 0:14:57.680 --> 0:15:01.480 of tariffs now on inflow on prices, because I think 0:15:01.480 --> 0:15:04.200 we will see some of those effects later this year, 0:15:04.360 --> 0:15:06.840 not yet, but maybe later this year. I Also you 0:15:06.880 --> 0:15:10.080 have to factor in how does that affect economic activity, 0:15:10.920 --> 0:15:14.200 decisions by businesses to invest, consumers to spend, And that's 0:15:14.240 --> 0:15:16.640 where I think another big uncertainty is we've seen some 0:15:16.880 --> 0:15:19.720 kind of movements in the data in the last couple 0:15:19.720 --> 0:15:22.920 of months. I think some of that's in anticipation of tariffs, 0:15:22.920 --> 0:15:24.960 So it's hard to really read the tea leaves there. 0:15:25.080 --> 0:15:27.280 But that's something else we'll be watching carefully, is to 0:15:27.320 --> 0:15:31.200 what extent is that affecting consumer confidence, business confidence. You know, 0:15:31.200 --> 0:15:34.080 the uncertainty around this and the effects of the tariffs 0:15:33.600 --> 0:15:36.920 on economic growth and employment and things like that. So 0:15:36.960 --> 0:15:39.920 still a lot of uncertainty, I think, directionally somewhat higher 0:15:39.960 --> 0:15:42.800 prices in the outlook at least in mind kind of 0:15:42.840 --> 0:15:45.800 thinking about what's happening, but also a lot of uncertainty 0:15:45.800 --> 0:15:47.880 about how the economy responds to this. 0:15:48.560 --> 0:15:51.800 That was John Williams, President of the Federal Reserve Bank 0:15:51.880 --> 0:15:54.000 of New York. We had a chance to to catch 0:15:54.080 --> 0:15:57.160 up with Bloomberg's Mike McKee after his conversation with Williams 0:15:57.200 --> 0:15:58.720 at Bloomberg invest. 0:15:58.640 --> 0:16:01.440 They've been very circumspective about it all, trying to stay 0:16:01.440 --> 0:16:03.880 out of it and telling us we have to wait 0:16:03.920 --> 0:16:05.800 and see what they're going to do, But now there's 0:16:05.920 --> 0:16:09.640 enough information out there that apparently they're ready to start saying. 0:16:09.680 --> 0:16:12.920 This is going to be an inflation issue now, as 0:16:13.000 --> 0:16:16.120 John pointed out, we don't know yet how much of one. 0:16:17.000 --> 0:16:19.920 He said, consumer pass through to consumers would be fairly strong, 0:16:20.160 --> 0:16:23.480 especially for finished goods, and then it's a little harder 0:16:23.480 --> 0:16:26.280 to know in the intermediate goods area how much of 0:16:26.280 --> 0:16:29.320 that gets passed along and how fast, but that there 0:16:29.320 --> 0:16:33.040 would be more inflation from this, and that didn't suggest 0:16:33.080 --> 0:16:35.800 to me like he's in any hurry to cut interest 0:16:35.880 --> 0:16:37.920 rates unless we see the economy collapse. 0:16:38.080 --> 0:16:39.680 Is he worried about economic growth? 0:16:40.080 --> 0:16:43.400 He's not worried about echeconomic growth going into all of this, 0:16:43.680 --> 0:16:46.760 because the economy was in very good shape coming into 0:16:46.800 --> 0:16:50.280 the year. What he isn't sure about is where we 0:16:50.360 --> 0:16:52.160 go from here. What kind of effect is this going 0:16:52.200 --> 0:16:54.880 to have? And he mentioned we talked about consumer confidence 0:16:54.920 --> 0:16:58.320 and if confidence evaporates, then you've got a real problem 0:16:58.760 --> 0:17:00.480 in the economy, and it's something he said, we have 0:17:00.560 --> 0:17:01.360 to watch closely. 0:17:01.680 --> 0:17:03.840 What about when it comes to independence of the Federal Reserve. 0:17:04.440 --> 0:17:05.800 He said he wasn't worried about it. 0:17:06.240 --> 0:17:10.320 Obviously, the FED continuously says an independent central bank is 0:17:10.359 --> 0:17:13.520 important because that's when you can do monetary policy. 0:17:13.560 --> 0:17:13.800 Best. 0:17:13.880 --> 0:17:16.240 DOSE hasn't really made its way into the FED, you know. 0:17:16.280 --> 0:17:20.199 I've been asking around at various FED banks, and no 0:17:20.880 --> 0:17:24.880 twenty somethings with the computer coding stuff have come into 0:17:24.880 --> 0:17:28.920 the banks. They are set up legally a little different 0:17:29.040 --> 0:17:33.320 from most government agencies, so it appears that DOJE might 0:17:33.359 --> 0:17:37.000 not have access to the Federal Reserve. And I don't 0:17:37.000 --> 0:17:38.840 think that even if they did come in there, they'd 0:17:38.920 --> 0:17:40.159 let them into the computer systems. 0:17:40.240 --> 0:17:41.280 That would be kind of interesting. 0:17:41.400 --> 0:17:44.600 But anyway, anything that surprised you in your conversation with 0:17:44.680 --> 0:17:47.000 John Williams up on stage, I mean, they tend to 0:17:47.040 --> 0:17:48.639 be very careful, right and right. 0:17:48.880 --> 0:17:51.120 Well, not a surprise, but he did say that there's 0:17:51.160 --> 0:17:53.760 no need to change rates now. Asked him if what 0:17:53.840 --> 0:17:56.680 he was saying about uncertainty and we have to wait 0:17:56.720 --> 0:17:59.760 to find out what happens, if that meant that they 0:17:59.760 --> 0:18:02.400 were not going to change rates on March nineteenth, then 0:18:02.440 --> 0:18:05.160 he basically said, yes, there's no reason to do that 0:18:05.440 --> 0:18:08.080 right now. The economy is in a good place, Monetary 0:18:08.119 --> 0:18:10.280 policies in a good place, and we don't have an 0:18:10.320 --> 0:18:11.800 idea of what is going to happen. 0:18:12.080 --> 0:18:15.080 But if we do know now that tariffs have been 0:18:15.520 --> 0:18:20.560 imposed on Mexico and Canada and prices indeed do go higher, 0:18:20.600 --> 0:18:23.480 and perhaps we see some inflationary effects from that, how 0:18:23.480 --> 0:18:26.520 does that change the outlook for the FED this year? 0:18:27.200 --> 0:18:28.560 Well, it all depends on. 0:18:30.000 --> 0:18:31.800 And I'm going to sound like an economist here, it 0:18:31.840 --> 0:18:35.840 all depends on how all this comes through to the economy. 0:18:35.840 --> 0:18:39.640 Because if there are one off tariffs, if Donald Trump 0:18:39.720 --> 0:18:42.119 changes his mind tomorrow and takes them off or something 0:18:42.200 --> 0:18:45.760 like that, or if we just have this wall of 0:18:45.800 --> 0:18:49.520 tariffs hit now, it'll raise prices, but then prices will 0:18:49.520 --> 0:18:52.120 stop going up because they went up once. So that's 0:18:52.160 --> 0:18:55.400 not an inflation issue that the FED needs to react 0:18:55.440 --> 0:18:57.919 to because higher interest rates aren't going to change the 0:18:57.960 --> 0:19:00.720 price level. So that's what they need to figure out. 0:19:00.760 --> 0:19:00.960 Now. 0:19:01.480 --> 0:19:03.800 The way Trump has talked about putting on tariffs, with 0:19:04.600 --> 0:19:07.399 tariff's going on today, tariff's going on next week, tariff's 0:19:07.440 --> 0:19:10.280 going on April second, that could create more of an 0:19:10.280 --> 0:19:17.280 inflation issue because you're continually adding higher prices to the mix. Obviously, 0:19:17.320 --> 0:19:19.439 Americans aren't going to be happy about paying more at 0:19:19.440 --> 0:19:22.399 the grocery store, and they're not going to be happy 0:19:22.440 --> 0:19:24.760 about paying more for gasoline. I don't know if you 0:19:24.840 --> 0:19:27.879 noticed that. The gas buddy guy said in the Northeast, 0:19:28.040 --> 0:19:31.640 for our Boston listeners, they could go up forty cents 0:19:31.680 --> 0:19:32.520 a gallon this week. 0:19:33.240 --> 0:19:35.600 So we explain how that works with oil price is 0:19:35.640 --> 0:19:37.080 falling on a day like today. 0:19:37.600 --> 0:19:41.560 Well, oil prices are only one component of all this. 0:19:41.720 --> 0:19:45.280 There's the refining issues, and then oil prices we talk 0:19:45.320 --> 0:19:50.040 about in a generic sense West Texas Intermediate, but all 0:19:50.040 --> 0:19:54.320 these refineries use different grades of oil, and in the 0:19:54.359 --> 0:19:57.280 Northeast there's a lot of heavier oil you get from 0:19:57.280 --> 0:19:59.240 Canada and some other places, and if that's going to 0:19:59.240 --> 0:20:01.720 go up in price, then that's going to increase the 0:20:01.720 --> 0:20:03.959 cost of the refiners and they're going to pass that 0:20:04.080 --> 0:20:05.000 along to you. 0:20:05.760 --> 0:20:08.000 Somebody like Donald Trump would say, it's an example of 0:20:08.000 --> 0:20:10.520 why we should be using energy that is produced here 0:20:10.520 --> 0:20:11.200 in the United. 0:20:11.000 --> 0:20:15.560 States, except that there's the energy we produce to the 0:20:15.640 --> 0:20:17.920 United States. It differs all over the place. 0:20:17.960 --> 0:20:18.080 Now. 0:20:18.119 --> 0:20:18.880 The Bakan. 0:20:20.280 --> 0:20:23.800 Shale up in North Dakota is more similar to the 0:20:23.800 --> 0:20:26.120 heavy crud we get from Canada. But the stuff we're 0:20:26.119 --> 0:20:28.920 getting from Texas, as they like to say, is light, sweet, crude. 0:20:29.359 --> 0:20:31.480 Nice name. It's like at George Carlon thing, nice. 0:20:31.359 --> 0:20:34.000 Name, the name of Joe Wisenthal's band, exactly. 0:20:34.800 --> 0:20:35.080 Yeah. 0:20:35.119 --> 0:20:37.800 And that's a completely different kind of oil. And the refiners, 0:20:37.960 --> 0:20:40.800 you know, different refiners can't use these different oils. So 0:20:40.840 --> 0:20:44.679 it's going to be a price question, and energy is 0:20:44.720 --> 0:20:46.960 going to be one of the first areas to feel it. 0:20:47.400 --> 0:20:49.200 Mike, you talked about, you know, if we continue to 0:20:49.240 --> 0:20:53.239 see more tariffs being imposed, you know, that would be 0:20:53.400 --> 0:20:55.920 tougher on the economy. I mean, I am thinking about 0:20:55.960 --> 0:20:59.800 what we've got right now. Can the US economy is 0:20:59.840 --> 0:21:02.480 its strong enough to kind of manage if this is it? 0:21:03.440 --> 0:21:04.359 Manage it? 0:21:05.119 --> 0:21:06.639 When you go to the gas station and you have 0:21:06.680 --> 0:21:08.879 to pay more money, how are you going to react? 0:21:08.960 --> 0:21:14.439 That's really the question here, because recession is a confidence issue. 0:21:14.640 --> 0:21:18.080 If people feel that things are going to go badly, 0:21:18.240 --> 0:21:20.959 or that prices are going to go way up, or 0:21:21.200 --> 0:21:24.439 they might lose their jobs, then they stop spending and 0:21:24.480 --> 0:21:27.320 they start holding on the money, and then companies are 0:21:27.359 --> 0:21:30.520 making less and then they're hiring less, and you get 0:21:30.520 --> 0:21:34.439 into a recessionary spiral. We haven't seen one like that, 0:21:34.600 --> 0:21:37.080 you know, a long time, because the last couple of 0:21:38.040 --> 0:21:42.040 recessions have been basically finance based now and the COVID 0:21:42.640 --> 0:21:46.320 was its own generic thing. But the traditional kind of 0:21:46.359 --> 0:21:50.440 recession could come along. We can't rule that out. So 0:21:50.720 --> 0:21:52.520 it's something you want to keep an eye on the 0:21:52.520 --> 0:21:55.560 confidence figures and then watch what people do. Do they 0:21:55.680 --> 0:21:57.320 keep spending or does that slow down? 0:21:57.800 --> 0:22:01.159 Can I just say a little informal twitters survey like 0:22:01.240 --> 0:22:02.680 are you spending or holding back? 0:22:02.760 --> 0:22:04.400 And more people say that they're holding back. 0:22:04.440 --> 0:22:07.760 I'm not saying that because well a good sample or 0:22:09.000 --> 0:22:11.639 but it's just interesting to see we're hearing that from people. 0:22:11.720 --> 0:22:14.920 Last week we had the PC spending, the savings rate 0:22:14.960 --> 0:22:21.080 went way up, and people spent less money the savings 0:22:21.680 --> 0:22:24.639 the spending levels way down. So at this point it 0:22:24.680 --> 0:22:26.639 looks like people are baby pulling back down. Is that 0:22:26.680 --> 0:22:28.760 a one month thing or does that continue? 0:22:28.880 --> 0:22:29.040 Yeah? 0:22:29.160 --> 0:22:31.399 John Williams still telling you the US economy is in 0:22:31.440 --> 0:22:31.960 a good place. 0:22:32.359 --> 0:22:33.840 Well, it came into the year in a good place 0:22:34.400 --> 0:22:37.760 and people were feeling good. We spent a lot of 0:22:37.800 --> 0:22:42.360 money over the holidays, and companies had plans for capital investments. 0:22:42.400 --> 0:22:45.240 And now everybody's kind of sitting back and going, wait, 0:22:45.480 --> 0:22:48.880 let's see what's going to happen now. Does that translate 0:22:48.960 --> 0:22:52.040 into okay, we better stop or is that like, okay, 0:22:52.040 --> 0:22:54.159 we can live with this and get back to what 0:22:54.160 --> 0:22:54.720 we were doing. 0:22:54.800 --> 0:22:55.440 Mike, you have. 0:22:55.440 --> 0:22:57.840 Reported on so many different economic cycles, and yes, there 0:22:57.840 --> 0:23:00.200 are those extreme cases like the Great Financial Crisis or 0:23:00.240 --> 0:23:02.800 a pandemic where you know, everything just kind of falls 0:23:02.800 --> 0:23:05.920 off a cliff. Having said that, I feel like two 0:23:05.920 --> 0:23:09.040 weeks ago or three weeks ago, we weren't even using 0:23:09.080 --> 0:23:11.680 the word recession in a conversation, and all of a 0:23:11.680 --> 0:23:13.680 sudden we are. And again, I know you talk about 0:23:13.720 --> 0:23:16.840 the importance of sentiment, but as someone who sees cycles, 0:23:17.040 --> 0:23:19.360 when we start to talk about it doesn't necessarily mean 0:23:19.400 --> 0:23:21.399 that okay, it's more likely that people are starting to 0:23:21.440 --> 0:23:23.000 you know what I mean, If they're starting to talk 0:23:23.040 --> 0:23:26.720 about it and it's part of their considerations. 0:23:26.640 --> 0:23:29.440 It probably is a little bit more likely as the 0:23:29.560 --> 0:23:32.960 say Wall Street is predicted seven or the last three recessions. 0:23:33.720 --> 0:23:37.159 So it doesn't mean it doesn't mean it's going to happen, 0:23:37.600 --> 0:23:39.800 but it is something you want to keep an eye on. 0:23:40.000 --> 0:23:43.920 And we've had some backup to this the weaker spending 0:23:44.119 --> 0:23:47.680 reports and then the Atlanta fat GDP now, which people 0:23:47.680 --> 0:23:51.119 completely misunderstand what it is. It's not a forecast for 0:23:51.200 --> 0:23:54.240 what GDP is. It's like, given the data we have today, 0:23:54.280 --> 0:23:55.760 it's a snapshot in time. 0:23:56.080 --> 0:23:58.160 What it is called GDP now, yeah. 0:23:57.960 --> 0:23:59.439 Right, and which just why it moves around some much. 0:23:59.520 --> 0:24:02.000 Yeah, it moves around tremendously through the entire quarter. 0:24:02.440 --> 0:24:05.960 But that got into people's minds on Wall Street and 0:24:06.080 --> 0:24:08.200 it starts to scare people, and then they start writing 0:24:08.200 --> 0:24:09.840 about it, and then people are reading about it, and 0:24:09.840 --> 0:24:11.040 then they start thinking about it. 0:24:11.200 --> 0:24:12.760 Hey, one thing we haven't gotten a chance to talk 0:24:12.760 --> 0:24:16.359 to you about is what Washington, DC looks like in 0:24:16.400 --> 0:24:20.360 the wake of the doche cuts just anecdotally speaking heard 0:24:20.400 --> 0:24:23.120 of a guy down there who did lose his job 0:24:23.240 --> 0:24:26.280 just in the wake of what's happening, and he's essentially 0:24:26.280 --> 0:24:31.040 saying that in his neighborhood, half the families are now 0:24:31.119 --> 0:24:35.359 one income parents because of job cuts just in the 0:24:35.400 --> 0:24:36.200 last few months. 0:24:36.960 --> 0:24:39.720 I was just down there yesterday, and I can tell 0:24:39.720 --> 0:24:42.280 you I lived in Washington for twenty years, and it's 0:24:42.400 --> 0:24:46.560 the most depressing place right now. Everybody is down. Everybody 0:24:46.640 --> 0:24:49.240 is nervous and tense. Even if you have a job 0:24:49.280 --> 0:24:51.120 and you don't think you're going to lose it, you're 0:24:51.160 --> 0:24:53.560 worried about what the overall impact is going to be. 0:24:54.000 --> 0:24:56.320 And a lot of it is not just because people 0:24:56.320 --> 0:24:57.960 are getting fired, but because there's all this. 0:24:58.000 --> 0:25:00.760 Uncertainty about what's going to happen. The sort of. 0:25:00.720 --> 0:25:05.320 Democles is hanging over so many people, and so it's 0:25:05.400 --> 0:25:07.200 not a fun place at the moment. 0:25:07.320 --> 0:25:11.440 That was Michael McKee, Bloomberg News International Economics and Policy Correspondent. 0:25:11.760 --> 0:25:14.520 Be sure to check out Mike's full conversation with John Williams. 0:25:14.800 --> 0:25:17.280 Find that on the Bloomberg and at Bloomberg dot Com. 0:25:17.280 --> 0:25:19.920 Still ahead on Bloomberg BusinessWeek, a peek into the world 0:25:20.000 --> 0:25:23.080 of private markets and private credit with the global head 0:25:23.119 --> 0:25:25.200 of wealth management at Aris Management. 0:25:25.720 --> 0:25:26.919 This is Bloomberg. 0:25:29.320 --> 0:25:33.080 This is the Bloomberg Business Week Podcast. Listen live each 0:25:33.119 --> 0:25:36.399 weekday starting at two pm Eastern on Applecarplay and the 0:25:36.480 --> 0:25:39.320 Android Auto with the Bloomberg Business App. You can also 0:25:39.480 --> 0:25:42.800 listen live on Amazon Alexa from our flagship New York station, 0:25:43.280 --> 0:25:45.919 Just Say Alexa played Bloomberg eleven thirty. 0:25:47.400 --> 0:25:50.119 We continue with highlights from our coverage at Bloomberg invest 0:25:50.400 --> 0:25:53.160 held in downtown New York City this past week. Now, 0:25:53.200 --> 0:25:56.879 we talk often about how the public markets still trump 0:25:56.920 --> 0:26:00.239 the private markets when it comes to size, but it's 0:26:00.280 --> 0:26:02.399 hard to ignore the growth that we've seen in areas 0:26:02.440 --> 0:26:05.280 such as private credit, which grew to about one point 0:26:05.320 --> 0:26:08.320 six trillion dollars last year from four hundred and fifty 0:26:08.359 --> 0:26:10.679 two billion dollars just ten years ago. 0:26:11.240 --> 0:26:14.119 Aris Management knows a thing or two about private credit, 0:26:14.320 --> 0:26:16.520 having been involved in the market for a quarter of 0:26:16.520 --> 0:26:20.280 a century. The publicly held, a global alternative investment manager 0:26:20.520 --> 0:26:23.560 with an approximately fifty three billion dollar market cap, has 0:26:23.600 --> 0:26:26.520 four hundred and eighty four billion dollars in assets under. 0:26:26.400 --> 0:26:29.159 Management, which is why we wanted to talk with Raj Donda, 0:26:29.240 --> 0:26:32.480 global head of Wealth Management at Aris Wealth Management Solutions 0:26:32.680 --> 0:26:34.440 he joined us at Bloomberg invest. 0:26:34.760 --> 0:26:39.160 The advisors we talked to and their clients are really 0:26:39.200 --> 0:26:42.120 frustrated by this type of volatility. 0:26:42.160 --> 0:26:45.040 You know, we're. 0:26:43.800 --> 0:26:48.560 Essentially where we were, you know, early November, right in 0:26:48.600 --> 0:26:52.320 the public markets, and that backdrop makes it really hard 0:26:52.400 --> 0:27:00.280 to work diligently on a portfolio that has above, you know, 0:27:00.560 --> 0:27:02.560 at or above target returns and at the end of 0:27:02.600 --> 0:27:07.840 the day, individuals have almost as much wealth as institutional clients. 0:27:08.080 --> 0:27:10.560 They've just never had the access to the private markets, 0:27:10.560 --> 0:27:14.120 and that's starting to change. A lot of our discussion 0:27:14.200 --> 0:27:16.600 is not just should they invest in the private markets, 0:27:16.640 --> 0:27:20.159 but it's how all that said, A day like today 0:27:20.240 --> 0:27:23.840 is distracting at a minimum, because most of our clients 0:27:23.880 --> 0:27:27.760 still have eighty or ninety percent in the markets, and 0:27:27.800 --> 0:27:32.359 the headlines and the volatility are going to certainly be 0:27:32.400 --> 0:27:33.720 a distraction at a minimum. 0:27:34.080 --> 0:27:37.720 So would you say that yesterday's a poster child certainly 0:27:37.760 --> 0:27:41.520 of why people invest in privates, But would you say 0:27:41.520 --> 0:27:45.000 it's also a reason why people should consider allocating more 0:27:45.000 --> 0:27:48.160 of their portfolios to privates. 0:27:48.680 --> 0:27:50.199 I would, and I think the. 0:27:52.400 --> 0:27:56.680 Investment thesis is what really comes out at a time 0:27:56.800 --> 0:28:02.240 like this. We're quite clear that the private markets are illiquid. 0:28:02.320 --> 0:28:04.280 That's why you've got to higher risk adjusted return. 0:28:04.560 --> 0:28:08.080 You can't just call up and sell when you want to, And. 0:28:09.680 --> 0:28:12.080 The top advisors that we work with will tell you 0:28:12.119 --> 0:28:16.080 that keeping their clients invested can be challenging, particularly again 0:28:16.160 --> 0:28:19.040 at times like this. But the private markets in twenty 0:28:19.119 --> 0:28:24.200 years have changed completely in terms of the breath of solutions. 0:28:24.240 --> 0:28:27.760 You can invest in sports and media assets, you can 0:28:27.800 --> 0:28:31.640 invest in real estate and infrastructure. You can have some 0:28:31.760 --> 0:28:36.080 durbal income solutions from private credit. So the way we 0:28:36.119 --> 0:28:38.960 think about it is you should have equity exposure. You 0:28:39.000 --> 0:28:40.800 can do that in both the public and the fixed 0:28:40.800 --> 0:28:43.960 income markets. You should have some kind of credit or income. 0:28:44.160 --> 0:28:47.040 You can do that in public and private markets. And 0:28:47.080 --> 0:28:48.840 then you should have some real assets. You should own 0:28:48.880 --> 0:28:53.160 some real estate, you should own some form of infrastructure. 0:28:53.240 --> 0:28:56.120 Is a really tax efficient solution, and you can do 0:28:56.200 --> 0:28:58.120 all of that in both the public and private markets. 0:28:58.120 --> 0:28:59.959 You couldn't do that twenty years ago, even ten year 0:29:00.040 --> 0:29:00.440 years ago. 0:29:00.680 --> 0:29:01.480 I am curious. 0:29:01.600 --> 0:29:03.960 You know, we're so Washington focused right now, and you 0:29:03.960 --> 0:29:06.120 can understand why, right because there's so much that's coming 0:29:06.160 --> 0:29:08.400 down and some of it does impact the markets. What 0:29:08.480 --> 0:29:11.880 I'm curious about is when it comes to private markets, 0:29:12.520 --> 0:29:17.000 are there constructive conversations you guys are yet having with 0:29:17.080 --> 0:29:19.920 the administration or that you think have to be had 0:29:20.280 --> 0:29:21.960 when it comes to private markets. 0:29:22.520 --> 0:29:25.600 There are certainly conversations to have with any administration around 0:29:25.960 --> 0:29:28.720 the evolution of the private markets and how to make 0:29:28.760 --> 0:29:31.640 it easier to invest in the private markets. Areas has 0:29:31.680 --> 0:29:34.120 been in business for over twenty five years, and so 0:29:34.200 --> 0:29:37.760 we've worked with many administrations. This one is just getting 0:29:37.760 --> 0:29:40.080 their feet on the ground. 0:29:40.360 --> 0:29:40.840 It's early. 0:29:41.240 --> 0:29:45.480 They're certainly pro growth and pro business, and so some 0:29:45.600 --> 0:29:50.160 of that narrative we support and are happy about. But 0:29:51.480 --> 0:29:53.800 I would say they haven't yet really dug in on 0:29:55.120 --> 0:29:56.760 the type of change that would have a day to 0:29:56.840 --> 0:29:58.400 day impact on what we're doing. 0:29:58.560 --> 0:30:02.400 What would you like to see in terms of what 0:30:02.600 --> 0:30:05.640 happens for oversight in terms of private markets? You and 0:30:05.680 --> 0:30:08.000 I talked ahead of this conversation, and one of the 0:30:08.040 --> 0:30:10.760 issues is the transparency issues. And I know you talked 0:30:10.800 --> 0:30:12.440 about what you guys do in terms of I guess 0:30:12.440 --> 0:30:16.400 spreading around risk. Right, it's not like you're one investment 0:30:16.560 --> 0:30:19.440 in one particular investment. When it's the private markets, it's 0:30:19.520 --> 0:30:22.640 multiple investments. But what do you think needs to be 0:30:23.120 --> 0:30:27.440 government oversight or what you provide transparency to your investors? 0:30:27.840 --> 0:30:29.520 But does there need to be something more? 0:30:29.800 --> 0:30:34.200 Well, i'd step back because you're going to get something 0:30:34.840 --> 0:30:37.920 that's sort of paramount to any type of investment approach, 0:30:38.000 --> 0:30:41.400 which is manager selection and the diligence that goes into 0:30:42.120 --> 0:30:48.080 an investment firms track record, and so as the private 0:30:48.160 --> 0:30:52.360 markets grow and as there's a significant amount of new entrants. 0:30:53.080 --> 0:30:55.840 There are going to be firms that may not have 0:30:55.880 --> 0:30:58.160 a twenty five year track record or may not be 0:30:59.440 --> 0:31:02.680 able to speak to prior periods, whether it was the 0:31:02.720 --> 0:31:07.479 GFC or the emerging markets or other challenging times. So 0:31:07.520 --> 0:31:11.640 we definitely think in any of the whether it's private credit, 0:31:12.000 --> 0:31:16.080 or real estate or secondaries, all these areas, a twenty 0:31:16.160 --> 0:31:18.600 twenty five year track record is really helpful, right, and 0:31:18.640 --> 0:31:19.760 not everyone has it today. 0:31:19.760 --> 0:31:23.040 In the private markets, you know. 0:31:22.960 --> 0:31:28.560 We think the expectations related to transparency are no less 0:31:28.560 --> 0:31:31.760 than the private markets than the public markets. Institutional and 0:31:31.880 --> 0:31:34.880 high net worth clients expect us to provide them a 0:31:34.920 --> 0:31:38.080 significant amount of transfer today already today, So we don't 0:31:38.120 --> 0:31:41.160 think of what we do as. 0:31:42.240 --> 0:31:45.520 Changing that commitment to our investors. 0:31:45.560 --> 0:31:49.440 What do you think about private opening up to more 0:31:49.480 --> 0:31:53.320 retail investors and then does that change in terms of 0:31:53.360 --> 0:31:54.680 the transparency issues. 0:31:54.960 --> 0:31:55.120 Well. 0:31:55.120 --> 0:31:58.080 So, of course, the growth that you reference that we 0:31:58.120 --> 0:32:01.360 talked about on our earnings call it areas. This sort 0:32:01.400 --> 0:32:05.360 of marriage of alternatives in the wealth channel is a 0:32:05.480 --> 0:32:12.440 secular trend, democratization of alternatives. That growth is being driven 0:32:12.480 --> 0:32:16.960 primarily by individuals with over a million to invest in 0:32:17.000 --> 0:32:20.880 the US. That addressable market is an excess of eighty 0:32:20.880 --> 0:32:25.000 trillion and grew beyond that last year, so that's plenty 0:32:25.000 --> 0:32:29.160 to do. They all are still struggling to grow an allocation. 0:32:29.800 --> 0:32:32.400 Some of the limits in their allocations. 0:32:31.720 --> 0:32:33.720 Are where you're. 0:32:33.200 --> 0:32:38.160 Going, which is there are state limits on how much 0:32:38.200 --> 0:32:42.240 they can allocate there, or in some cases federal oversight 0:32:42.320 --> 0:32:47.600 that limits the allocation. Individual banks have their own suitability requirements, 0:32:48.000 --> 0:32:53.400 but fundamentally, this high net worth individual that has over 0:32:53.440 --> 0:32:56.760 a million dollars to invest gives us a massive runway 0:32:57.280 --> 0:33:00.040 to provide education and new solutions. 0:33:00.200 --> 0:33:03.480 To accredited investors. Correct, that's right. There are some folks 0:33:03.480 --> 0:33:06.560 in your industry who say we need to essentially say 0:33:06.800 --> 0:33:09.240 we need to get rid of those rules about accredited 0:33:09.280 --> 0:33:12.880 investors because it will give more opportunities to folks to 0:33:13.000 --> 0:33:17.280 get in on deals early and have more upside. It 0:33:17.280 --> 0:33:19.800 doesn't sound like you're actually saying that you're saying that 0:33:19.880 --> 0:33:24.440 accredit investors, there's enough dry powder there essentially for you. 0:33:24.480 --> 0:33:24.560 No. 0:33:24.920 --> 0:33:27.920 I mean, I do think that over time, as we 0:33:27.960 --> 0:33:34.080 work to investors that even less to deploy lower sophistication, 0:33:35.160 --> 0:33:38.160 there's an opportunity to provide them solutions they don't get today. 0:33:38.840 --> 0:33:40.680 You know, a big part of what we do is 0:33:40.720 --> 0:33:46.200 not just raise money, but deploy it. And the fundraising 0:33:46.240 --> 0:33:49.080 and the growth in the private markets is you know, 0:33:49.200 --> 0:33:53.040 driving a lot of the headlines, but one of the 0:33:53.040 --> 0:33:56.640 things we want to make sure is it's deployed reasonably, thoughtfully, 0:33:56.680 --> 0:34:02.200 and ARES has got a real comitment to local origination, 0:34:02.320 --> 0:34:04.680 whether in real estate or credit or any of our areas. 0:34:04.760 --> 0:34:08.520 And we were talking before the call about how important 0:34:08.520 --> 0:34:12.440 it is to build portfolios with small single investments, so 0:34:12.480 --> 0:34:16.920 you're very diversified. ARCC, which is one of the largest 0:34:16.920 --> 0:34:19.600 public BDC's, you know, the single name exposure there is 0:34:20.160 --> 0:34:21.280 two two and a half points. 0:34:21.320 --> 0:34:21.799 It's not a. 0:34:23.560 --> 0:34:26.480 Concentrated set of bets, really spread out, and to build 0:34:26.520 --> 0:34:29.760 that type of a portfolio you need to be able 0:34:29.840 --> 0:34:32.719 to have a significant feet on the ground and origination. 0:34:33.760 --> 0:34:37.920 But yes, do we think that non accredited investors are 0:34:37.920 --> 0:34:41.560 a growth area for the firm. Absolutely, But we think 0:34:41.560 --> 0:34:45.080 we're in the early innings of the high net worth 0:34:45.120 --> 0:34:48.439 investor allocating more to the wealth channel, and there will 0:34:48.480 --> 0:34:51.719 be a time when you know, not accredited investors will 0:34:51.719 --> 0:34:53.040 also get access to what we do. 0:34:53.200 --> 0:34:55.080 Rus how much bigger do you think the private credit 0:34:55.120 --> 0:34:57.960 market gets. I mean, it's just an incredible kind of 0:34:58.000 --> 0:34:59.600 the explosive growth that we've seen just in the last 0:34:59.640 --> 0:35:01.359 couple of years. And you and I talked on the 0:35:01.400 --> 0:35:04.680 call any Great Context reminding us that still the public 0:35:04.719 --> 0:35:07.680 markets are so much larger. But does it get to 0:35:07.719 --> 0:35:10.319 a point where the private market's rival, certainly on the 0:35:10.320 --> 0:35:12.480 equity side of things, or is that just crazy? 0:35:12.800 --> 0:35:15.480 Well, I think it provides a really attractive solution. It's 0:35:15.480 --> 0:35:19.960 floating rate. In ninety ninety six percent of the loans 0:35:19.960 --> 0:35:24.160 are floating rate. That's an important aspect because it minimizes 0:35:24.160 --> 0:35:26.600 the volatility that we've now seen with fixed income. 0:35:27.239 --> 0:35:30.640 Private credit is also higher yielding. 0:35:31.040 --> 0:35:34.440 And we're asked often, you know how much you know, 0:35:34.680 --> 0:35:37.560 what do we think of the growth? It's actually the 0:35:37.600 --> 0:35:41.880 growth is not really outsized versus private equity. It just 0:35:41.920 --> 0:35:44.440 has gotten a lot of attention in the last few years. 0:35:44.960 --> 0:35:48.040 Think about any sort of typical LBO. You need two 0:35:48.120 --> 0:35:50.680 quantums of debt for every amount of equity. 0:35:50.840 --> 0:35:53.280 So to have a proper. 0:35:53.000 --> 0:35:58.160 Functioning economy, the private credits have really private credit has 0:35:58.200 --> 0:36:02.680 really stepped in and some of the concerns where banks 0:36:02.680 --> 0:36:05.880 don't provide as much capital where you don't find other solutions. 0:36:05.960 --> 0:36:07.759 There are some critics out there who say that, you know, 0:36:07.800 --> 0:36:09.920 there's not the same oversight with private credit that there 0:36:10.000 --> 0:36:12.640 is with traditional lending through banks. Banks would like to 0:36:12.719 --> 0:36:15.560 say that I'm wondering if on your radar there's concern 0:36:15.719 --> 0:36:18.000 that there could be more regulation coming for private credit. 0:36:18.320 --> 0:36:19.880 I worked at a large bank for a while, and 0:36:20.360 --> 0:36:24.200 I understand that there is not the same leverage with 0:36:24.280 --> 0:36:26.640 the investment managers as there is or there used to 0:36:26.719 --> 0:36:33.040 be with banks. There's also an appropriate matching of capital and. 0:36:34.760 --> 0:36:35.400 Deploying it. 0:36:35.560 --> 0:36:38.960 So we have investors that provide us long term capital 0:36:39.560 --> 0:36:40.880 and it can't be called on a. 0:36:40.880 --> 0:36:42.920 Short on the short term. 0:36:43.440 --> 0:36:47.080 So actually, the large players in the private credit markets 0:36:47.440 --> 0:36:50.480 are very very different than banks when they were lending, 0:36:50.520 --> 0:36:53.520 either at the peak or even after the GFC. They 0:36:53.560 --> 0:36:56.320 don't have the same leverage. You might have one times leverage. 0:36:56.760 --> 0:37:00.719 They don't have the same volatility in the capital deploying, 0:37:01.080 --> 0:37:04.560 so it's a very different value proposition. It's not the 0:37:04.560 --> 0:37:08.680 same threat to the economy. We're not taking deposits from 0:37:08.719 --> 0:37:09.719 individuals and so on. 0:37:10.120 --> 0:37:13.200 That was Raj Donda, Global head of Wealth management at 0:37:13.239 --> 0:37:14.480 Aries Wealth Management. 0:37:14.640 --> 0:37:16.280 And that wraps up our first hour of the weekend 0:37:16.400 --> 0:37:19.279 edition at Bloomberg Business Week from Bloomberg Radio Ahead. In 0:37:19.320 --> 0:37:21.960 our next hour, more from Bloomberg invest held this past 0:37:21.960 --> 0:37:25.400 week in New York City, including getting really deep inside 0:37:25.440 --> 0:37:28.759 today's AI world with the global Chief Technology Officer and 0:37:28.840 --> 0:37:32.279 Chief AI Officer over at Dell, and yes, we might 0:37:32.280 --> 0:37:33.520 even talk a little Deep Seek. 0:37:33.840 --> 0:37:35.839 Deep Seek was actually one of the many things that 0:37:35.880 --> 0:37:38.600 Ben Ren and I spoke about at Bloomberg Invests. That's 0:37:38.640 --> 0:37:41.800 where he gave a demo of his GENAI product Magic. 0:37:42.200 --> 0:37:44.800 We'll hear a bit from that conversation and his predictions 0:37:44.800 --> 0:37:47.120 about the role AI will be playing in all of 0:37:47.200 --> 0:37:49.120 our lives in a very short time. 0:37:49.280 --> 0:37:52.080 And keeping your eye on the ball a mid market volatility. 0:37:52.280 --> 0:37:54.480 We'll talk about that with Goldman's co head of Global 0:37:54.520 --> 0:37:58.479 Private Wealth Management. Our coverage from Bloomberg invest continues. This 0:37:58.640 --> 0:37:59.800 is Bloomberg Business Week. 0:38:00.120 --> 0:38:03.640 You're listening to the Bloomberg Business Week podcast. Catch us 0:38:03.680 --> 0:38:07.160 live weekday afternoons from two to five pm Eastern Listen 0:38:07.200 --> 0:38:10.720 on Applecarplay and Android Auto with the Bloomberg Business app, 0:38:10.880 --> 0:38:13.560 or watch us live on YouTube. 0:38:14.440 --> 0:38:16.520 Blenny Ahead in our second hour of the weekend edition 0:38:16.560 --> 0:38:19.640 of Bloomberg Business Week, as we broadcasted live from the 0:38:19.680 --> 0:38:22.080 Bloomberg invest event to the heart of New York's financial 0:38:22.080 --> 0:38:25.040 district this past week. Coming up, another read on today's 0:38:25.040 --> 0:38:28.080 market and investment environment with Mina Flynn, co head of 0:38:28.120 --> 0:38:30.960 Global Private wealth Management at Goldman Sachs. 0:38:31.239 --> 0:38:34.520 Plus we mix in subtechnology as many guests that invest 0:38:34.600 --> 0:38:37.560 talked about the changing landscape of investing, the role of 0:38:37.600 --> 0:38:40.200 fintech and yes, artificial intelligence. 0:38:40.560 --> 0:38:41.080 On AI. 0:38:41.239 --> 0:38:43.719 We'll hear from Ben Rahn, the founder and CEO of Sigtech, 0:38:44.000 --> 0:38:47.960 a company that's built a GENAI product to analyze financial markets, and. 0:38:48.040 --> 0:38:51.560 John Rose, global Chief Technology Officer and Chief AI Officer 0:38:51.600 --> 0:38:55.000 at Dell Technologies on Deepseek, the great AI spend and 0:38:55.040 --> 0:38:58.799 build out, and how companies are really using artificial intelligence. 0:38:59.000 --> 0:39:01.880 First up, though, more on today's market environment and keeping 0:39:01.920 --> 0:39:04.799 your cool amid volatility. That was top of mind as 0:39:04.840 --> 0:39:07.480 we sat down with Mina Flynn, co head of Global 0:39:07.480 --> 0:39:11.480 Private Wealth Management at Goldman Sachs from Bloomberg invest Our 0:39:11.520 --> 0:39:14.960 conversation on Tuesday. Was a day when markets were pretty 0:39:15.040 --> 0:39:17.239 volatile amid US tariff concerns. 0:39:17.560 --> 0:39:20.319 I think the number one thing that we have to 0:39:20.400 --> 0:39:23.680 remember is that when it comes to individuals, the first 0:39:23.680 --> 0:39:28.720 thing you focus on is portfolio construction. Portfolio construction drives 0:39:28.960 --> 0:39:31.680 ninety percent of a client's returns and it's something that 0:39:31.719 --> 0:39:34.600 we talk about upfront and then on an ongoing basis 0:39:34.640 --> 0:39:37.200 with them. And the reason why this is so important 0:39:37.320 --> 0:39:40.120 is in times of volatility such as we've had this week, 0:39:40.680 --> 0:39:43.239 and what you don't want is you don't want investors 0:39:43.280 --> 0:39:46.239 to be taking so much risk that they become uncomfortable 0:39:46.320 --> 0:39:49.439 and they sell, they crystallize a loss versus staying put 0:39:49.520 --> 0:39:52.040 or buying. But on the flip side, we want to 0:39:52.040 --> 0:39:54.399 make sure that we encourage clients to take enough risks 0:39:54.400 --> 0:39:57.560 so that they offset inflation on an after tax, after 0:39:57.640 --> 0:39:58.520 spending basis. 0:39:58.960 --> 0:40:00.680 So our portfolio are. 0:40:00.520 --> 0:40:05.000 Really constructed with investment, great high quality fixed income and 0:40:05.040 --> 0:40:07.799 then a good amount of equities and alternatives. 0:40:08.160 --> 0:40:11.000 Let's talk about the equities first in terms of geographic 0:40:11.040 --> 0:40:14.839 exposure for those equities, what has it traditionally been And look, 0:40:15.000 --> 0:40:17.320 we know it's not a monolith. Every client is certainly different, 0:40:17.360 --> 0:40:19.600 but in general, how do you think about US equities 0:40:19.680 --> 0:40:21.440 versus equities outside of the US. 0:40:21.560 --> 0:40:24.200 Sure, so we prefer US equities, and we prefer that 0:40:24.239 --> 0:40:27.520 both in both public markets as well as private markets. 0:40:28.000 --> 0:40:30.840 Big picture, we have roughly about a forty percent allocation 0:40:31.200 --> 0:40:35.120 to public equities. The largest allocation of that is to 0:40:35.280 --> 0:40:39.440 US equities, and then outside of that developed international equities, 0:40:39.440 --> 0:40:42.480 we do have a small percentage to emerging markets. But 0:40:42.520 --> 0:40:45.680 then also I would say we have recently increased our 0:40:45.719 --> 0:40:50.440 allocation to private markets into private equity and specifically as 0:40:50.480 --> 0:40:53.200 it relates to buy out and growth. And the reason 0:40:53.200 --> 0:40:56.240 why is because these are two sub sectors of alternatives 0:40:56.520 --> 0:40:59.360 where you see a significant amount of alpha relative to 0:40:59.400 --> 0:41:03.680 public market markets, and also the distributions of returns is 0:41:03.760 --> 0:41:06.680 much more narrow than other subasset classes within alternatives. 0:41:06.680 --> 0:41:09.359 In terms of private equity, are you upbeat about the 0:41:09.480 --> 0:41:12.239 ability to exit, to see start seeing exits, which is 0:41:12.280 --> 0:41:15.280 something that has been really difficult over the last few years. 0:41:15.480 --> 0:41:18.359 It has been difficult as it relates to public markets. 0:41:18.840 --> 0:41:21.200 I'm upbeat as it relates to private equity on two things. 0:41:21.239 --> 0:41:23.080 One is, I do think to the extent that you 0:41:23.160 --> 0:41:26.480 have opportunities right now in public markets to be able 0:41:26.520 --> 0:41:29.839 to take companies private. I think that's an attractive opportunity 0:41:29.840 --> 0:41:31.040 for private equity companies. 0:41:31.719 --> 0:41:32.640 Second, I do. 0:41:32.640 --> 0:41:35.840 Think that there's a lot of opportunities for private equity 0:41:35.880 --> 0:41:39.040 companies in the private markets, so they don't necessarily have 0:41:39.120 --> 0:41:41.719 to only think about taking a company public or M 0:41:41.760 --> 0:41:44.880 and A as their only alternative to liquidity. 0:41:44.920 --> 0:41:45.440 So a lot of. 0:41:45.400 --> 0:41:49.160 Secondary private exits, a lot of continuation funds. The other 0:41:49.200 --> 0:41:51.239 thing I would note, although, is if you look at 0:41:51.400 --> 0:41:55.839 growth valuations and in private equity, what you have seen 0:41:55.920 --> 0:41:59.120 is you have seen a normalization of valuations between public 0:41:59.200 --> 0:42:02.680 and private market. And the reason why is because you've 0:42:02.800 --> 0:42:06.279 had really strong performance with these portfolio companies and it's 0:42:06.320 --> 0:42:10.319 allowed these companies to grow into the target exit valuations 0:42:10.360 --> 0:42:12.680 that these gps were looking for. So I do think 0:42:12.719 --> 0:42:15.000 when you have a little bit more stabilization in the markets, 0:42:15.360 --> 0:42:17.680 you're going to see more deal activity, both as relates 0:42:17.680 --> 0:42:18.799 to IPO as well as. 0:42:18.760 --> 0:42:19.000 M and A. 0:42:19.160 --> 0:42:21.560 Okay, so let's talk about potential stabilization in the markets. 0:42:21.600 --> 0:42:23.919 Just in the last couple of weeks, we've certainly seen 0:42:24.040 --> 0:42:26.239 things change quite a bit. What's your outlook? 0:42:26.640 --> 0:42:28.880 So I would just say the thing that I'm really 0:42:28.960 --> 0:42:32.879 thinking about is the sequencing of policies, and so if 0:42:32.880 --> 0:42:35.040 you look at the Trump administration, it is a pro 0:42:35.160 --> 0:42:38.239 business administration. But what we're seeing right now is some 0:42:38.280 --> 0:42:41.279 of the negative hits to growth come first, whether that's 0:42:41.320 --> 0:42:44.319 immigration or whether that's tariffs. Before in the second half 0:42:44.320 --> 0:42:46.160 of the year we're probably going to see some sort 0:42:46.200 --> 0:42:49.440 of tax reform as well as deregulation, and so I 0:42:49.440 --> 0:42:51.040 think what we've got to be mindful of is a 0:42:51.040 --> 0:42:55.880 little bit of that curve. Generally, the number one driver 0:42:56.040 --> 0:42:59.560 of US equity returns is a growing economy. Even with 0:42:59.640 --> 0:43:01.719 the tear rates that we're talking about right now, we 0:43:01.760 --> 0:43:04.440 still do anticipate that we're going to have positive GDP 0:43:04.640 --> 0:43:07.279 in the US, and so from here we still do 0:43:07.320 --> 0:43:09.120 see equity market upside in the US. 0:43:09.280 --> 0:43:11.200 So mean, you guys don't think about recession because it 0:43:11.200 --> 0:43:13.000 does feel like all of a sudden, the narratives change 0:43:13.000 --> 0:43:16.440 a little bit. We've seen weaker consumer spending numbers, consumer 0:43:16.480 --> 0:43:21.239 sentiment numbers, manufacturing data, So recession off the table completely. 0:43:20.920 --> 0:43:23.120 For this, It's definitely, it's definitely not off the table, 0:43:23.160 --> 0:43:26.759 and we absolutely are looking at the data. But you're 0:43:26.800 --> 0:43:30.759 also looking at a growth of over two percent, you know, 0:43:30.760 --> 0:43:32.719 two and a half percent, and so we have the 0:43:32.719 --> 0:43:36.480 odds of a recession even with these tariffs relatively low, 0:43:36.520 --> 0:43:38.759 call it fifteen to twenty percent. I do think it's 0:43:38.760 --> 0:43:41.600 important to take a step back and just look at 0:43:41.600 --> 0:43:45.080 we've got an SMP that's down roughly one percent year 0:43:45.120 --> 0:43:46.920 to date. Right, We've got a lot of volatility, but 0:43:46.920 --> 0:43:48.960 we've got an sp that's down one percent year to date. 0:43:49.280 --> 0:43:49.560 Okay. 0:43:49.560 --> 0:43:52.560 Where you've really seen that underperformance is in the consumer 0:43:52.640 --> 0:43:54.920 to the macro points that you were talking about, as 0:43:54.960 --> 0:43:57.200 well as in technology, just because you've had some of 0:43:57.239 --> 0:44:02.160 the growth decrease in earnings outperformance versus called the rest 0:44:02.160 --> 0:44:05.279 of the four ninety three r But outside of consumer technology, 0:44:05.320 --> 0:44:07.839 all of the other sectors are positive. And so what 0:44:07.920 --> 0:44:11.000 I'm really focused on is the earnings path for the 0:44:11.040 --> 0:44:12.759 other four ninety three. I think the max seven is 0:44:12.760 --> 0:44:14.600 going to be fine, but what we're going to see 0:44:14.640 --> 0:44:17.759 versus twenty four is likely a lot more earnings growth. 0:44:17.800 --> 0:44:20.920 So call it three percent and twenty four roughly eight 0:44:21.040 --> 0:44:25.040 nine percent this year. And so, and just your point 0:44:25.080 --> 0:44:28.919 as it relates to tariffs, we anticipate that every one 0:44:28.960 --> 0:44:33.560 percent increase in the effective tear rate decreases growth by 0:44:33.640 --> 0:44:38.200 roughly ten bases points and increases inflation by ten bases points, 0:44:38.560 --> 0:44:41.760 so it is manageable. I mean, it's going to depend 0:44:41.800 --> 0:44:44.520 on what happens, how long those tariffs are in place, 0:44:45.040 --> 0:44:47.600 if they're rolling or not. I think if they're rolling tariffs, 0:44:47.640 --> 0:44:49.640 it's going to be much more hard from an inflation perspective. 0:44:49.680 --> 0:44:51.919 Do you think that's up in the air. 0:44:52.560 --> 0:44:55.160 Do you think that these are going to be lasting 0:44:55.200 --> 0:44:57.520 tariffs that stick around for a long time, Will there 0:44:57.560 --> 0:45:00.640 be more possibly or do you think that things could 0:45:00.680 --> 0:45:02.080 change in a week and a month. 0:45:02.200 --> 0:45:05.040 I think things could absolutely change overnight in a week 0:45:05.080 --> 0:45:06.880 and a month. And I do think that there's the 0:45:06.960 --> 0:45:11.320 opportunity to also make a deal with you know, Mexico 0:45:11.480 --> 0:45:14.400 Canada in the near term and actually, you know, have 0:45:14.520 --> 0:45:16.920 those tariffs reduced. And so I think the ultimate is 0:45:17.000 --> 0:45:20.319 we don't know what's going to happen, and we just 0:45:20.440 --> 0:45:22.800 the main thing we're focused on is that economic data. 0:45:23.360 --> 0:45:25.480 Do you think that tariffs on Mexico and Canada are 0:45:25.560 --> 0:45:27.960 more damaging than tariffs on China, because it does seem 0:45:28.040 --> 0:45:30.799 like the Mexico and Canada tariffs there is this off 0:45:30.880 --> 0:45:33.360 ramp when it comes to you know, what the President 0:45:33.360 --> 0:45:35.680 and his team have called essentially the border crisis and 0:45:35.719 --> 0:45:37.719 the drug war. Yeah, I mean, I think we don't 0:45:37.719 --> 0:45:38.960 necessarily see that off ramp. 0:45:39.160 --> 0:45:41.920 Yeah, when you look at twenty five percent tariffs that 0:45:41.960 --> 0:45:44.359 you're talking about with Canada and Mexico, it's much more 0:45:44.400 --> 0:45:48.200 substantial than the tariffs that you've actually seen on China. 0:45:48.239 --> 0:45:50.840 And so when you think about that effective tariff for 0:45:51.120 --> 0:45:54.000 tariff rate right now, it's roughly about eight percent. If 0:45:54.040 --> 0:45:57.920 things stays as they have been announced, an eight percent 0:45:58.000 --> 0:46:02.319 tariff rate would actually hit growth by roughly call it, 0:46:02.760 --> 0:46:06.120 you know, eighty basis points, and what increase inflation by 0:46:06.200 --> 0:46:08.839 roughly eighty basis points. That being said, we already had 0:46:08.840 --> 0:46:12.239 inflation coming down from where it is right now, and 0:46:12.280 --> 0:46:15.160 so we probably get to roughly a three percent level 0:46:15.160 --> 0:46:18.960 if that's the case. Again, it's not our estimate or 0:46:19.000 --> 0:46:22.480 our perspective that tear of state at these levels, But 0:46:22.560 --> 0:46:25.440 if that's the case, you still have an opportunity for 0:46:25.480 --> 0:46:27.960 the FED to be able to react if you have 0:46:28.040 --> 0:46:31.000 inflation even at that three percent level. And so what 0:46:31.000 --> 0:46:34.120 we saw in twenty nineteen is the FED cut as 0:46:34.120 --> 0:46:37.440 an insurance cut. And could we see that again today 0:46:37.600 --> 0:46:41.040 or you know, call it May, June, December. Absolutely, And 0:46:41.080 --> 0:46:42.960 I think the market's pricing more of that today. That's 0:46:43.000 --> 0:46:45.880 exactly what traders are pricing in three rate cuts. What 0:46:46.600 --> 0:46:48.640 kind of blows my mind is though, as you say, 0:46:48.760 --> 0:46:51.839 things could change quickly overnight, in a week, in a day, 0:46:52.000 --> 0:46:53.960 and that's kind of the environment that we've seen and 0:46:53.960 --> 0:46:56.120 we've seen it play out in terms of the rate environment. 0:46:56.200 --> 0:46:57.440 One thing I want to ask you, because I think 0:46:57.480 --> 0:47:00.000 there's been an assumption when it comes to President Trump 0:47:00.320 --> 0:47:04.080 his tolerance of, you know, market volatility, that he was 0:47:04.120 --> 0:47:07.040 watching the equity markets. It was kind of interesting to see, 0:47:07.040 --> 0:47:08.840 I feel like over the last few days where the 0:47:08.880 --> 0:47:12.239 markets had certainly the equity markets had some problems, and 0:47:12.280 --> 0:47:15.240 we just had this assumption that President Trump would do something, 0:47:15.280 --> 0:47:18.560 say something. I'm curious, how like, what's the conversation you 0:47:18.600 --> 0:47:21.960 guys all have around that. I mean, definitely there's put 0:47:22.000 --> 0:47:24.759 whatever you want. Yeah, I mean, there's definitely their perspective 0:47:24.800 --> 0:47:27.919 that there was going to be a deal done, which 0:47:28.000 --> 0:47:30.960 is why you know, the markets are reacting like they are. 0:47:31.840 --> 0:47:34.680 And you do have a president that has really focused 0:47:34.680 --> 0:47:38.040 on pro business policies, but at the end of the day, 0:47:38.200 --> 0:47:41.840 he's very focused on bringing manufacturing and jobs back to 0:47:41.880 --> 0:47:45.359 the US and The question is can we withstand that volatility? 0:47:45.400 --> 0:47:49.200 Can the consumer withstand that volatility? Can CEOs withstand that 0:47:49.239 --> 0:47:51.440 volatility and continue to invest in their businesses? 0:47:51.760 --> 0:47:55.319 Before we let you go, Mina crypto, is it part 0:47:55.360 --> 0:47:58.040 of the alternatives in a portfolio for your ultra high 0:47:58.080 --> 0:47:58.800 networth clients? 0:47:59.160 --> 0:48:02.480 It's not part of our client's portfolios. And the main 0:48:02.520 --> 0:48:04.600 reason that is is because we don't see it as 0:48:04.640 --> 0:48:07.640 a store of value. It's very hard to actually value. 0:48:07.800 --> 0:48:10.600 Oh, please take for the crypto folks in the back. 0:48:10.920 --> 0:48:12.520 Yeah, So you don't. 0:48:12.320 --> 0:48:14.239 See it as a store of value, is what you said. 0:48:14.280 --> 0:48:16.320 We don't see the store of value and entiley volatile 0:48:16.360 --> 0:48:19.080 asset and it's hard under what valuation metrics do you 0:48:19.160 --> 0:48:21.319 actually value it? So no, we don't have it as 0:48:21.320 --> 0:48:22.960 a part of our core asset allocation. 0:48:23.440 --> 0:48:25.879 That was Mina Flynn, co head of Global Private Wealth 0:48:25.920 --> 0:48:27.480 Management at Golman Sachs. 0:48:27.800 --> 0:48:31.200 You're listening to Bloomberg Business Week coming up AI and 0:48:31.280 --> 0:48:34.880 financial services. The founder and CEO of sigtech stops by 0:48:34.960 --> 0:48:38.320 to share his magic. That's short for Multi Agent Generative 0:48:38.400 --> 0:48:41.800 Investment copilots. Carol say that five times. I like it though. 0:48:42.320 --> 0:48:43.720 Magic that's next. 0:48:43.880 --> 0:48:44.680 This is Bloomberg. 0:48:47.000 --> 0:48:50.759 This is the Bloomberg Business Week Podcast. Listen live each 0:48:50.800 --> 0:48:53.759 weekday starting at two pm Eastern on Apple car Play 0:48:53.880 --> 0:48:56.520 and the Android Auto with the Bloomberg Business app. You 0:48:56.560 --> 0:48:59.719 can also listen live on Amazon Alexa from our flagship 0:48:59.760 --> 0:49:03.600 New York station, Just Say Alexa played Bloomberg eleven thirty. 0:49:06.200 --> 0:49:08.680 A big theme at Bloomberg Invests this year No Surprise 0:49:08.960 --> 0:49:13.759 was AI, artificial intelligence, specifically the monetization. It feels like 0:49:14.280 --> 0:49:17.920 that we're all wondering and questioning around AI. How investors 0:49:17.960 --> 0:49:21.000 are extracting value from it, the risks, the opportunities across 0:49:21.000 --> 0:49:24.759 public and private portfolios, and where the smart money is moving. 0:49:24.840 --> 0:49:27.040 On that, I caught up with Ben Wren, founder and 0:49:27.120 --> 0:49:30.480 CEO of the London based fintech sig Tech. It's one 0:49:30.520 --> 0:49:33.080 off of Brevin Howard back in twenty nineteen. It now 0:49:33.120 --> 0:49:36.399 offers a GENAI tool called Magic. It's basically this group 0:49:36.440 --> 0:49:39.720 of AI agents that analyze financial markets and bin says 0:49:40.280 --> 0:49:43.239 work that would typically take quants and analysts hours to do, 0:49:43.800 --> 0:49:47.000 Magic can do in less than a minute. I spoke 0:49:47.040 --> 0:49:48.760 with him after he gave a demo to the folks 0:49:48.880 --> 0:49:51.000 at Bloomberg invest We. 0:49:51.160 --> 0:49:55.680 Know we work with clients to focus on workflows. The 0:49:55.840 --> 0:50:01.799 share a few characteristics. I would describe them as intellectual 0:50:01.880 --> 0:50:05.600 but not creative. For example, one of our biggest clients, 0:50:05.719 --> 0:50:08.839 they are using us to completely transform the commercial loan 0:50:08.920 --> 0:50:12.160 and the writing. To be honest, when you are when 0:50:12.160 --> 0:50:14.760 you are the human professionals and the writing commercial loans, 0:50:14.800 --> 0:50:17.759 you don't really want to be creative. So it's a 0:50:17.840 --> 0:50:20.560 very intellectual but not creative endeavor. 0:50:20.640 --> 0:50:21.920 But it's very it's very boring. 0:50:22.920 --> 0:50:26.479 The other one is it's very it's very manual because, 0:50:26.560 --> 0:50:29.720 for example, on the commercial loan applications, each each firm 0:50:29.800 --> 0:50:32.360 has to apply in their own format. 0:50:32.680 --> 0:50:34.319 There is no standard or template for. 0:50:34.239 --> 0:50:37.520 The applications, so each business is just sending their documents 0:50:37.520 --> 0:50:41.000 in whatever, you know, formats that they feel comfortable with. 0:50:41.160 --> 0:50:45.480 They could be a multily part of PDFs, slides and 0:50:45.560 --> 0:50:48.520 excel spreasures. And that is I want to make one 0:50:48.520 --> 0:50:52.560 statement which is very interesting, which is in finance, we 0:50:52.640 --> 0:50:57.160 create documents and materials by humans for humans. So if 0:50:57.160 --> 0:51:00.400 you look at all these presentations, right, actually the most 0:51:00.440 --> 0:51:03.719 important information we actually spend extra time to turn it 0:51:03.760 --> 0:51:07.440 into a graphic. Right, we want to visualize actually the 0:51:07.480 --> 0:51:10.880 most important information in our slides, because that's how we 0:51:10.920 --> 0:51:13.160 make an impact on the human reader. But it turns 0:51:13.200 --> 0:51:16.839 out this information in that format is really not very 0:51:16.880 --> 0:51:19.600 friendly to large language models. So a lot of our 0:51:19.640 --> 0:51:22.759 efforts want to make sure that we can actually extract 0:51:23.120 --> 0:51:26.399 that virual information into a format that we can work 0:51:26.480 --> 0:51:29.480 with with using large language models. 0:51:29.600 --> 0:51:33.960 Then when I saw you using magic demonstrating it for everybody, 0:51:34.040 --> 0:51:36.800 there was a little font at the bottom that said 0:51:37.000 --> 0:51:40.360 something along the lines of this is not investment advice. 0:51:40.880 --> 0:51:43.879 There could be errors in here. Make sure to use 0:51:43.880 --> 0:51:46.760 independent research, something along those lines. Obviously, I'm not a lawyer. 0:51:47.120 --> 0:51:50.400 What is the risk with just taking what it spits 0:51:50.440 --> 0:51:53.239 out and pasting and giving it to your boss. 0:51:53.840 --> 0:51:57.120 I think for regulated services and businesses, the human will 0:51:57.160 --> 0:52:00.840 stay in the loop for the foreseeable future. Regulators the 0:52:01.000 --> 0:52:05.279 entire regulation framework is about it's human centric right. So 0:52:05.320 --> 0:52:07.640 the regulator want to make sure that someone is staying 0:52:07.640 --> 0:52:11.920 the loop and is accountable for the actions and consequences. 0:52:12.280 --> 0:52:16.319 So in these businesses, AI agents they can automate a 0:52:16.440 --> 0:52:19.520 huge amount of work knowledge work. We have seen people 0:52:20.640 --> 0:52:25.160 used to spend six hours in processing loan applications. Now 0:52:25.200 --> 0:52:29.000 they only need to spend thirty seconds. That's two hundred 0:52:29.280 --> 0:52:32.520 x improvement in speed actually makes a huge impact, but 0:52:32.680 --> 0:52:36.520 someone has to be there and supervise. That's why this 0:52:36.719 --> 0:52:40.560 user interface UI design its super important. 0:52:40.600 --> 0:52:43.200 Because as we scale the capabilities. 0:52:42.560 --> 0:52:45.279 Of the intelligence, how do we make sure that the 0:52:45.400 --> 0:52:48.640 human is not overwhelmed by a new type of work? 0:52:49.040 --> 0:52:52.400 But how do you know that what Magic produces is correct? 0:52:53.520 --> 0:52:55.880 There are two There are actually many ways to do it. 0:52:56.560 --> 0:53:00.359 First, as the large language models get better, they are 0:53:00.400 --> 0:53:03.319 more and more grounded. For example, the latest generations of 0:53:03.520 --> 0:53:08.320 reasoning models they essentially build. They are building self reflection 0:53:08.800 --> 0:53:12.000 and self critique. So the quality of the response is 0:53:12.040 --> 0:53:15.640 going up, and that's just mainly because of the pre 0:53:15.680 --> 0:53:20.800 training and post training breakthrough by the foundational model air Labs. 0:53:21.000 --> 0:53:23.560 But on the other hand, as we build Magic and 0:53:23.680 --> 0:53:27.840 the build AI agents, we're actually building grounding into it. 0:53:27.960 --> 0:53:31.719 So as responses come back, we always want to provide 0:53:32.200 --> 0:53:36.120 citations quotes so the human can click away from verifying it. 0:53:36.440 --> 0:53:38.759 The whole idea behind the products such as this is 0:53:38.800 --> 0:53:41.680 to give you and edge over your competitors to find 0:53:41.719 --> 0:53:47.520 that alpha. But what happens when my competitor asks Magic 0:53:47.840 --> 0:53:51.200 the same question? That I asked, you'll get a result 0:53:51.480 --> 0:53:54.480 that's the same, and then you won't actually have that advantage. 0:53:55.760 --> 0:53:57.680 I think if you ask exactly the same question, you'll 0:53:57.680 --> 0:53:59.440 probably get some very similar. 0:54:00.840 --> 0:54:02.640 But I do think the nature of. 0:54:02.640 --> 0:54:07.359 The work going forward will become each individual contributors will 0:54:07.400 --> 0:54:10.360 become a supervisor. I think that's a fundamental shift in 0:54:10.400 --> 0:54:11.200 the world how. 0:54:11.120 --> 0:54:13.239 We do our jobs. I think today we're going in there. 0:54:13.280 --> 0:54:18.000 Most of ours are individual contributors, but it's like transition 0:54:18.080 --> 0:54:21.719 from a PhD researcher pH student to a supervisor to 0:54:21.800 --> 0:54:27.240 a research director. The other thing is I think people 0:54:27.280 --> 0:54:30.080 will ask different questions. I think, you know, people have 0:54:30.160 --> 0:54:33.359 heard about the phrase prompt engineering for a few years now, 0:54:33.760 --> 0:54:38.719 but it's surprising to me how difficult or counterintuitive it 0:54:38.880 --> 0:54:41.360 is to most people. I would say, there are no 0:54:41.440 --> 0:54:47.520 substitute for spending ten hours of your time on seriously 0:54:47.640 --> 0:54:50.880 learning how to have a productive conversation and that try 0:54:50.920 --> 0:54:53.400 to poke, try to push the limit of what this 0:54:53.560 --> 0:54:57.280 model can do or not do. I think the difference 0:54:57.360 --> 0:55:00.120 is most likely we'll come down to who ask the 0:55:00.200 --> 0:55:03.200 questions and who can follow up with better questions. 0:55:03.280 --> 0:55:04.920 So it really raises the question I think in the 0:55:04.920 --> 0:55:09.120 financial services industry about what this looks like if it's 0:55:09.160 --> 0:55:12.600 widely adopted in terms of what it does to workforces 0:55:13.440 --> 0:55:16.759 and how it changes the way companies think about who 0:55:16.800 --> 0:55:18.960 they need to hire and who they need to pay. 0:55:19.600 --> 0:55:22.319 If this does the work that a quant can do 0:55:23.360 --> 0:55:25.560 in forty five seconds that would take a quant what 0:55:25.760 --> 0:55:28.400 three to six hours, then what do the quants do? 0:55:28.960 --> 0:55:31.200 I think the quants will fund more interesting things to do. 0:55:31.400 --> 0:55:33.600 The truth is, I think, if a think about it 0:55:34.160 --> 0:55:38.680 up to this point, the technology made a difference only 0:55:38.840 --> 0:55:42.160 in the field of what we call explicit knowledge. Right, 0:55:42.200 --> 0:55:45.960 we ultimate stuff, but in order to automate that knowledge 0:55:46.000 --> 0:55:50.520 has to be explicit something we can write down, codify, 0:55:50.680 --> 0:55:53.200 you know, almost linearly, and then we get people to 0:55:53.280 --> 0:55:56.480 implement it in Python on some other programming language, then automated. 0:55:57.080 --> 0:55:58.600 But that a huge amount of. 0:55:59.080 --> 0:56:04.520 Tacit knowledge that exists, especially in industries like financial services. 0:56:04.760 --> 0:56:07.560 That's why we have human experts. They are experts because 0:56:07.640 --> 0:56:10.640 they have knowledge in their head that's based on years 0:56:10.640 --> 0:56:14.400 of experience. But that's simply impossible to write down in 0:56:14.440 --> 0:56:18.600 a very codified, simplified way. But now with large language 0:56:18.640 --> 0:56:21.600 models and AI agents, what we have learned is that 0:56:21.640 --> 0:56:24.200 for the first time, we can use AI agents to 0:56:24.280 --> 0:56:30.360 distill these testing knowledge from human experts into automated processes. 0:56:30.520 --> 0:56:32.600 I think that's where the breakthrough will really come from. 0:56:32.960 --> 0:56:35.160 You told me in one of our prep calls ahead 0:56:35.200 --> 0:56:37.040 of this panel that by the end of this year 0:56:37.120 --> 0:56:41.120 the workforce will likely be half human half AI agents. 0:56:41.800 --> 0:56:42.839 You stick to that right now? 0:56:43.280 --> 0:56:45.560 I think half half, Yes. 0:56:45.640 --> 0:56:47.360 I think by the end of next year we probably 0:56:47.840 --> 0:56:50.200 ritual will be for each one of us. 0:56:50.040 --> 0:56:54.560 There will be multiple AI agents. So the I mean I. 0:56:54.480 --> 0:56:56.480 Think by the end of this year we'll all be 0:56:56.560 --> 0:57:00.600 very familiar with the concept of a hybrid workforce. But 0:57:00.680 --> 0:57:03.520 in the next year, I think that racial well keep going. 0:57:03.680 --> 0:57:05.960 I mean, you're talking about a fundamental shift in the 0:57:05.960 --> 0:57:10.000 way that an economy runs. Here, contextualize this moment in 0:57:10.080 --> 0:57:13.440 economic history for us. Is this like the Industrial Revolution? 0:57:13.600 --> 0:57:16.040 Is it like the rise of the internet and the 0:57:16.040 --> 0:57:17.400 browser in the nineteen nineties. 0:57:17.440 --> 0:57:20.520 Where are we I think about this in terms of electricity. 0:57:20.760 --> 0:57:24.080 I think we are very close to a point where intelligence, 0:57:24.120 --> 0:57:27.480 in terms of you know, streaming tokens, will be on tap, 0:57:27.920 --> 0:57:29.479 similar to electricity on tap. 0:57:29.960 --> 0:57:32.680 Now recently you looked into it. I mean it's quite interesting. 0:57:32.720 --> 0:57:36.200 In the last two hundred years, each country on average 0:57:36.240 --> 0:57:40.920 spent about one percent of the nominal GDP building and 0:57:41.040 --> 0:57:43.200 upgrading the electricity grid. 0:57:43.440 --> 0:57:45.680 Even today, I think doing a new deal. 0:57:45.720 --> 0:57:49.240 In the nineteen thirties, the US spent about one point 0:57:49.280 --> 0:57:50.720 two percent of GDP. 0:57:50.840 --> 0:57:52.000 I'm building out power. 0:57:52.240 --> 0:57:56.360 Actually the first power station in the US is building's 0:57:56.360 --> 0:57:57.320 built in Manhattan. 0:57:58.200 --> 0:58:00.800 So one percent GDP today is three hundred billion. 0:58:01.440 --> 0:58:04.920 So coincidentally, this year, the big tech companies have already 0:58:04.960 --> 0:58:10.520 announced three hundred billions of investment into data centers. So 0:58:10.800 --> 0:58:15.040 I think the investment is not over investment. But it's 0:58:15.120 --> 0:58:19.680 quite shocking how quickly we romped up the investment to 0:58:20.160 --> 0:58:22.200 literally this magic number one percent of GDP. 0:58:22.440 --> 0:58:24.800 You did say also a couple of months ago to 0:58:24.800 --> 0:58:28.840 me that this tends to move in three month increments. 0:58:29.600 --> 0:58:34.000 The idea being the technological breakthroughs that we see are 0:58:34.040 --> 0:58:36.120 really happening so quickly. You have to think about the 0:58:36.160 --> 0:58:40.640 development of AI within three month increments. What's what's going 0:58:40.680 --> 0:58:41.800 to look like, what's it going to look like a 0:58:41.840 --> 0:58:42.400 year from now? 0:58:43.080 --> 0:58:46.200 I think for US to you know, given the one 0:58:46.240 --> 0:58:50.760 percent investment GDP investment, for US to really deliver the promise, 0:58:50.840 --> 0:58:54.480 we have to see something like eight to ten percent. 0:58:54.200 --> 0:58:57.880 Of GDP growth. We have to triple quote group our 0:58:57.960 --> 0:58:59.400 GDP growth here in the US. 0:59:00.040 --> 0:59:02.920 Here in the US in a world where the adoption 0:59:03.000 --> 0:59:06.160 for AI is really and China is very keen to 0:59:06.200 --> 0:59:09.240 adopt AI for pretty much everything. So that's really the 0:59:09.520 --> 0:59:11.360 so that when I say that's the promised land, that's 0:59:11.360 --> 0:59:13.320 that's the promised land, right, that's the promise we have 0:59:13.360 --> 0:59:16.160 to deliver given this kind of investment. I mean, just 0:59:16.200 --> 0:59:21.439 to just to illustrate how fast things have come. Three 0:59:21.520 --> 0:59:25.240 years ago to train the GBT three, it's it's only 0:59:25.400 --> 0:59:29.320 you something like a fifteen to thirty megawarts data center. 0:59:29.440 --> 0:59:32.880 It was quite normal. And today you know a mask 0:59:33.000 --> 0:59:37.080 and a matter of building two gigawards data centers, which 0:59:37.120 --> 0:59:40.880 is ten times bigger. For that to work, they have 0:59:40.920 --> 0:59:42.720 to build everything. They have to build their own natural 0:59:42.760 --> 0:59:46.360 gas power plant next to it. So that the sheer 0:59:46.480 --> 0:59:50.520 scale of the of the investment is really unprecedented. But 0:59:50.560 --> 0:59:52.640 for us to deliver the promise, we have to see 0:59:53.040 --> 0:59:55.800 in the next five years. So GDP growth of eighteen percent. 0:59:56.760 --> 1:00:01.480 You mentioned China, and I'm wondering about the country's ability 1:00:01.520 --> 1:00:04.680 to pull this off if there are export controls in 1:00:04.680 --> 1:00:07.760 place on American tech, such as we've seen within video. 1:00:08.040 --> 1:00:12.120 Since we last spoke, everything with deep Seek happened. How 1:00:12.120 --> 1:00:13.840 do you look at what's happening in China and whether 1:00:13.920 --> 1:00:15.960 or not they can become like a competitor to the 1:00:16.080 --> 1:00:17.160 US when it comes to AI. 1:00:17.840 --> 1:00:19.880 I think to scale the intelligence, there are only a 1:00:19.920 --> 1:00:25.360 few variables. Number One, data In China, there's the data 1:00:25.400 --> 1:00:28.600 privacy is much less a concern, so I also there 1:00:28.600 --> 1:00:32.600 are many people generating data, so I think I would 1:00:32.640 --> 1:00:35.640 say China probably has an advantage in terms of having 1:00:35.680 --> 1:00:39.360 access to the quality the quantity of the data. The 1:00:39.400 --> 1:00:43.240 second thing is just sheer talent. There are two hundred 1:00:43.320 --> 1:00:47.840 papers in AI published every day. I read some of them, 1:00:47.880 --> 1:00:50.720 not obviously not all of them, but one thing if 1:00:50.920 --> 1:00:54.320 very striking. You can open a random AI paper these days, 1:00:54.320 --> 1:00:58.040 about thirty percent to fifty percent the co authors are Chinese. 1:00:58.680 --> 1:01:01.840 So China has this supply of talent, but sing in 1:01:01.880 --> 1:01:02.560 the US. 1:01:03.120 --> 1:01:05.640 The last one in just compute oilse being equal. 1:01:06.120 --> 1:01:10.880 Intelligence is basically the logarithm of compute. So you increased 1:01:10.880 --> 1:01:13.200 by one hundred times, you get ten times beating intelligence. 1:01:14.320 --> 1:01:16.360 So I think China and US are really the two 1:01:16.920 --> 1:01:19.480 countries in the world who are really pushing. 1:01:19.400 --> 1:01:22.080 That was beIN Ran, founder and CEO of Sigtech, from 1:01:22.120 --> 1:01:24.760 our panel discussion at Bloomberg invest Still. 1:01:24.640 --> 1:01:26.960 Head on Bloomberg Business Week, more from Ben Rann, and 1:01:27.160 --> 1:01:30.760 more on Magic and how AI will affect financial services. 1:01:30.880 --> 1:01:31.920 This is Bloomberg. 1:01:33.680 --> 1:01:37.479 This is the Bloomberg Business Week Podcast. Listen live each 1:01:37.480 --> 1:01:40.840 weekday starting at two pm Eastern on Apple CarPlay and 1:01:40.840 --> 1:01:43.720 Android Auto with the Bloomberg Business App. You can also 1:01:43.840 --> 1:01:46.880 listen live on Amazon Alexa from our flagship New York 1:01:46.920 --> 1:01:50.280 station Just Say Alexa played Bloomberg eleven thirty. 1:01:51.960 --> 1:01:54.640 We're back with highlights from Bloomberg invest held this past 1:01:54.640 --> 1:01:56.520 week in New York City. Want to get back to 1:01:56.560 --> 1:02:00.440 Tim's conversation with Ben Rhn, the founder and CEO of Sigtech, tech. 1:02:00.320 --> 1:02:02.480 Spun off of Brevin Howard back in twenty nineteen and 1:02:02.600 --> 1:02:05.680 now offers this JENAI tool called Magic. It stands for 1:02:05.920 --> 1:02:10.640 Multi Agent Generative Investment copilots, and here Ben talks about 1:02:10.640 --> 1:02:14.680 the opportunity he sees for AI to disrupt financial services. 1:02:15.000 --> 1:02:16.640 We're Bloomberg. We love numbers. 1:02:17.000 --> 1:02:19.560 I know you're still considered a startup at this point, 1:02:19.600 --> 1:02:21.920 but give us some numbers like how many customers you 1:02:22.000 --> 1:02:26.040 have if you can, and where you're seeing it be deployed. 1:02:26.560 --> 1:02:28.000 In the last two months, we build a lot of 1:02:28.440 --> 1:02:30.560 private proparatory versions for different firms. 1:02:31.120 --> 1:02:32.960 I come show you this why a gentry three months old. 1:02:33.440 --> 1:02:36.440 So we are officially launched in September twenty twenty four. 1:02:36.960 --> 1:02:39.000 We started two years ago. We made a very big 1:02:39.040 --> 1:02:40.960 bet two years ago to say this is the future. 1:02:41.000 --> 1:02:44.360 We're going to you know better company on this. Even 1:02:44.400 --> 1:02:46.320 that took us eighteen months to figure out how to 1:02:46.320 --> 1:02:49.200 do it right because you know, it's so new, unprecedented. 1:02:49.240 --> 1:02:51.400 We have the experiment, trial and errors. So we launched 1:02:51.400 --> 1:02:54.560 in September last year, so we got into the hands 1:02:54.600 --> 1:02:57.600 of over one hundred and fifty financial institutions. We are 1:02:57.880 --> 1:03:01.680 extremely excited about the use cases we're able to deliver. 1:03:01.920 --> 1:03:06.160 So we currently focus on three categories. Number one macro 1:03:06.680 --> 1:03:10.439 market research. Just because my background is from macro hedge fund, 1:03:10.760 --> 1:03:14.080 I know the field very well. People think people use 1:03:14.160 --> 1:03:18.560 magic to get some magical insight, but funny enough, actually 1:03:18.600 --> 1:03:22.040 people find it extremely useful to have an understanding of 1:03:22.040 --> 1:03:24.680 where the market has priced in. It's kind of a 1:03:24.720 --> 1:03:26.959 common intuitive but if you think about it right, since 1:03:27.040 --> 1:03:30.800 large language models, by construction always give you the most 1:03:30.960 --> 1:03:35.080 likely word one by one, it's actually a fantastic tool 1:03:35.800 --> 1:03:37.240 to survey. 1:03:36.880 --> 1:03:38.840 The market at any point in time. 1:03:38.880 --> 1:03:42.680 I understand what other people know, how other people think 1:03:42.680 --> 1:03:43.600 about it. 1:03:43.640 --> 1:03:45.000 So what the market is pricing? 1:03:45.080 --> 1:03:47.840 Which is the first step towarding for headfrom managers, figure 1:03:47.880 --> 1:03:50.440 out do I have some view that's different, and how 1:03:50.480 --> 1:03:53.400 to put on a trade? So number one category macro 1:03:53.480 --> 1:03:57.800 market research. The second is equity fundamental analysis. 1:03:58.080 --> 1:03:59.480 So we did a big talk. 1:03:59.320 --> 1:04:01.160 On this because you know, in the last ten years 1:04:01.200 --> 1:04:04.360 a number of equity analysts has dropped by over thirty 1:04:04.400 --> 1:04:08.640 five percent, whereas the public market has become more concentrated 1:04:09.040 --> 1:04:11.720 than ever before. So we have this very weird dynamic. 1:04:12.280 --> 1:04:15.600 Tens of trillions of capital going to passive. Top twenty 1:04:15.640 --> 1:04:19.760 six companies are responsibul for half of the market cap 1:04:19.840 --> 1:04:23.000 of SMP five hundred, and I do think people can 1:04:23.080 --> 1:04:25.840 name the other four hundred and seventy four. So I 1:04:26.320 --> 1:04:28.600 in some sense we feel like the market has become 1:04:28.720 --> 1:04:35.000 less efficient where we need analytical power to cover more companies, 1:04:35.040 --> 1:04:38.040 but we don't have it. So we're working with equity 1:04:38.040 --> 1:04:39.760 fund managers who have, by the way, who had a 1:04:39.840 --> 1:04:45.080 very tough fifteen years just because it's concentration in. 1:04:43.600 --> 1:04:47.080 The top stocks. It's only really stock pickers. 1:04:48.080 --> 1:04:50.400 Yeah, the S and P five hundred has performed very 1:04:50.440 --> 1:04:52.400 well over the last It's very hard to be, so 1:04:52.480 --> 1:04:54.920 it's been tough to be. You did recently write that 1:04:54.960 --> 1:04:57.680 AI is going to dramatically impact financial services in terms 1:04:57.720 --> 1:04:59.560 of cost structure and profit margins. 1:04:59.640 --> 1:05:01.480 Yep, give us some numbers there. 1:05:01.560 --> 1:05:05.040 Yeah, So financial services excluding payment globally is a twenty 1:05:05.080 --> 1:05:09.400 trillion dollar business or twenty trillion dollars revenue every year, 1:05:09.720 --> 1:05:12.760 and we will break it down about three trillion of profits. 1:05:13.480 --> 1:05:17.520 But then in termal costs, we think eight trillion dollars. 1:05:17.520 --> 1:05:22.200 Costs can be hugely affected by what's going on, by 1:05:22.800 --> 1:05:26.120 what we are building in JENEI. That includes five trillion 1:05:26.160 --> 1:05:30.440 of staff costs, two trillion of risk and regulation related 1:05:30.720 --> 1:05:33.840 and then one trillion of tech spend. So I think 1:05:33.960 --> 1:05:36.800 eight trillion dollars that's just a starting point. 1:05:37.040 --> 1:05:39.560 Are the financial firms that you're trying to sell to 1:05:39.960 --> 1:05:42.360 or that are your customers, do you believe that they're 1:05:42.400 --> 1:05:45.680 being too cautious with their adoption of the technology. 1:05:46.000 --> 1:05:50.120 I think they are being very cautious, but again it's 1:05:50.200 --> 1:05:52.920 very difficult to make a very clear decision because just 1:05:52.920 --> 1:05:54.880 given how things are moving, and it's very hard to 1:05:54.920 --> 1:05:59.240 get you know. I think, especially in large regulated businesses, 1:05:59.360 --> 1:06:01.360 to make such big decisions, you need some kind of 1:06:01.440 --> 1:06:04.520 consensus building in the firm. But by the time you 1:06:04.600 --> 1:06:08.800 build a consensus in three months, things have changed. So 1:06:08.840 --> 1:06:12.440 I think that in terms of the adoption in financial services, 1:06:12.480 --> 1:06:16.320 I think it will start with a few firms with 1:06:16.880 --> 1:06:21.280 visionary leadership that embrace it and given a speed of 1:06:21.320 --> 1:06:24.040 which we can implement it, I think waiting six months, 1:06:25.040 --> 1:06:29.000 they will be able to disrupt the market segment they operating, 1:06:29.080 --> 1:06:30.840 and then that will have no comonfect. 1:06:31.080 --> 1:06:33.560 That's been Rand, founder and CEO of sig Tech during 1:06:33.600 --> 1:06:36.720 our panel discussion at Bloomberg invest We're going to stay. 1:06:36.520 --> 1:06:39.040 With technology now to a guest who keeps us up 1:06:39.120 --> 1:06:42.960 to speed, also on AI developments timely considering this past week, 1:06:43.080 --> 1:06:46.560 Open AI rival Anthropic officially closed a deal to raise 1:06:46.600 --> 1:06:49.520 three and a half billion dollars at a valuation of 1:06:49.600 --> 1:06:53.280 sixty one point five billion dollars, cementing it's placed him 1:06:53.280 --> 1:06:55.840 as one of the largest startups in the world. 1:06:55.840 --> 1:06:58.320 With more on AI. Where we are in the great 1:06:58.360 --> 1:07:01.480 AI build out and spend. Talked with Dell Technologies at 1:07:01.480 --> 1:07:05.600 Global CTO and Chief AI Officer John Rose, he was 1:07:05.640 --> 1:07:07.080 at Bloomberg invest. 1:07:07.240 --> 1:07:11.640 There's two answers in terms of AI spend. Clearly that's 1:07:11.880 --> 1:07:13.840 a gigantic growth the area. I think we've seen the 1:07:13.880 --> 1:07:17.240 TAM double in the last year. There's no doubt that, 1:07:17.280 --> 1:07:19.960 you know, we're on a track right now, and definitely 1:07:20.000 --> 1:07:22.920 in the global enterprise market that probably the majority of 1:07:22.960 --> 1:07:25.280 it spend in the long term is to build and 1:07:25.360 --> 1:07:28.560 implement the systems necessary to power the AI transformation of businesses. 1:07:28.600 --> 1:07:31.640 So pretty bullish on there the consequences. In order to 1:07:31.680 --> 1:07:33.760 do that, we have to make the older systems more efficient. 1:07:33.800 --> 1:07:35.800 So there's actually a spend profile there of trying to 1:07:35.920 --> 1:07:39.680 densify environments and aggregate legacy systems. So the whole space 1:07:39.760 --> 1:07:44.000 is pretty active and looks to be a pretty positive 1:07:44.080 --> 1:07:47.320 environment because without it, without that infrastructure, there is no 1:07:47.400 --> 1:07:48.000 AI future. 1:07:48.480 --> 1:07:51.320 So we're like what over two years in at least 1:07:51.560 --> 1:07:53.840 that the market the world, you know, as you always 1:07:53.880 --> 1:07:56.000 remind us, AI nothing new. We do the same thing, 1:07:56.360 --> 1:07:59.560 but certainly the narrative and the discussion changed more than 1:07:59.560 --> 1:08:02.480 two years to go. How has it evolved here in 1:08:02.520 --> 1:08:04.440 twenty twenty five? What's top of mind? 1:08:04.560 --> 1:08:06.640 Yeah, I mean, so we're in year three. 1:08:07.200 --> 1:08:10.040 Year one was experimentation with some tools that people couldn't 1:08:10.040 --> 1:08:12.240 really use for enterprise. Year two was to do it 1:08:12.280 --> 1:08:14.200 yourself here that if you wanted to do it, it was 1:08:14.200 --> 1:08:17.800 a big technical effort. Year three we've now seen lots 1:08:17.840 --> 1:08:20.799 of ISVs, lots of turnkey offerings, and most importantly, companies 1:08:20.800 --> 1:08:24.880 like DEMA, SIVs, ISV independent software vendors people which sell 1:08:24.920 --> 1:08:27.559 you stuff, so instead of do it yourself, you can 1:08:27.600 --> 1:08:30.320 actually buy stuff to do AI, which is incredibly important. 1:08:30.360 --> 1:08:32.200 The two things that we need for enterprise adoption are 1:08:32.400 --> 1:08:34.800 one the ability to consume it as a technology as 1:08:34.840 --> 1:08:37.080 opposed to a do it yourself project, which that's actually 1:08:37.080 --> 1:08:39.720 happening now. And the other is a feeling that you're 1:08:39.760 --> 1:08:41.960 not the first mover, and because some of us big 1:08:42.000 --> 1:08:43.920 companies have moved first and have gotten to the other 1:08:43.960 --> 1:08:47.000 side of productivity, now there's archetypes to follow. So so 1:08:47.000 --> 1:08:49.200 I'm pretty bullish about this is a good year in 1:08:49.280 --> 1:08:51.080 terms of expanded enterprise adoption. 1:08:51.200 --> 1:08:53.240 We haven't gotte to talk to you since the deep 1:08:53.240 --> 1:08:56.519 Seek news on January twenty seventh that really wiped hundreds 1:08:56.520 --> 1:08:58.920 of billions of dollars from in Vidia's market tap. We're 1:08:58.920 --> 1:09:01.840 down in Vidia about a little over twenty percent since 1:09:01.880 --> 1:09:05.679 the January highs for that company. Are you seeing any 1:09:05.760 --> 1:09:07.760 pullback in this space right now? 1:09:08.600 --> 1:09:08.720 No? 1:09:10.160 --> 1:09:12.320 In a word, yeah, And the reason for it is. 1:09:12.360 --> 1:09:15.840 Look, you know, Deepseek was just another of you know, 1:09:15.920 --> 1:09:19.799 forty years of disruptions that have progressively moved AI forward. 1:09:20.160 --> 1:09:22.320 You know, I was a theory forty years ago, and 1:09:22.320 --> 1:09:25.599 then we invented things and created new technologies and bent 1:09:25.680 --> 1:09:27.800 the curve multiple times to ultimately get to where we 1:09:27.800 --> 1:09:30.400 are today today. There's only two levers that make AI better. 1:09:30.680 --> 1:09:32.839 One is the mips per want of the compute environment 1:09:32.880 --> 1:09:35.120 O every time in Vidia delivers a new GPU that 1:09:35.240 --> 1:09:37.960 gets better. And the other is algorithmic improvements, which are 1:09:38.000 --> 1:09:40.080 things like deep Seek, and they just they just allow 1:09:40.160 --> 1:09:41.240 us to do things more efficiently. 1:09:41.360 --> 1:09:44.600 So you buy what we know about deep Seek, Like, 1:09:44.640 --> 1:09:47.040 are you skeptical that they were able to do what 1:09:47.080 --> 1:09:48.760 they did with the resources they had? 1:09:48.880 --> 1:09:49.599 Look, I wasn't. 1:09:49.800 --> 1:09:51.400 I didn't have a front row seat to exactly what 1:09:51.400 --> 1:09:53.240 they did. I look at it as interesting engineering. It 1:09:53.240 --> 1:09:56.679 does look like some novel approaches using some existing technologies. Great, 1:09:56.760 --> 1:09:59.200 we need that, And what we've learned from it because 1:09:59.200 --> 1:10:01.599 it's an open model, is yeah, there's some interesting techniques 1:10:01.640 --> 1:10:03.160 that other people are going to adopt and guess what 1:10:03.200 --> 1:10:05.559 it's going to make the whole AI industry more efficient. 1:10:05.880 --> 1:10:08.840 If there wasn't kind of insatiable demand in front of us, 1:10:08.880 --> 1:10:09.559 I'd be nervous. 1:10:09.640 --> 1:10:10.120 But there is. 1:10:10.680 --> 1:10:13.280 We have barely touched the processes of the enterprises in 1:10:13.320 --> 1:10:15.360 the world, and we have millions of them to go after. 1:10:15.520 --> 1:10:18.120 But I do wonder to Tim's point, that does Deep 1:10:18.479 --> 1:10:21.320 Seek make us rethink the models or the narrative about 1:10:22.080 --> 1:10:25.800 how the buildout has to happen, the energy needs, this cost, 1:10:25.880 --> 1:10:26.479 whatever it is. 1:10:27.240 --> 1:10:31.599 Yes, just like every other iteration, we're in a world 1:10:31.640 --> 1:10:34.639 welcome to the AI club. The AI club is a period, 1:10:34.720 --> 1:10:38.200 is an environment where there's constant disruption happening moving the 1:10:38.200 --> 1:10:41.599 industry forward. And so the novel approaches in Deep Seek 1:10:41.640 --> 1:10:43.360 allow us to rethink, Hey, maybe I can do training 1:10:43.400 --> 1:10:45.439 a little more efficiently, maybe I can do inferencing a 1:10:45.439 --> 1:10:48.240 little more costly. Maybe I can develop a different way 1:10:48.280 --> 1:10:50.519 of thinking about a model. Great, let's adopt that, let's 1:10:50.520 --> 1:10:53.479 build on it, and the next one might be bigger disruption, 1:10:53.560 --> 1:10:55.400 but it'll still move the industry forward. 1:10:55.520 --> 1:10:57.240 Got to ask you about Elon Musk and the government, 1:10:57.439 --> 1:11:01.360 and the goal is to make it more efficient. And 1:11:01.400 --> 1:11:02.960 there's of course a lot of news and a lot 1:11:03.000 --> 1:11:05.920 of headlines around what's going on in terms of what 1:11:05.960 --> 1:11:08.720 we've seen so far. What are your expectations that it 1:11:08.800 --> 1:11:12.639 becomes a more technologically advanced run government. 1:11:12.920 --> 1:11:13.680 Well, well, I think you know. 1:11:13.680 --> 1:11:16.840 I mean we should point out that Dell supplying servers 1:11:17.320 --> 1:11:19.080 to Elon's XAI. 1:11:19.240 --> 1:11:21.840 And the government and everybody else in the world. We're 1:11:22.000 --> 1:11:22.840 very present there. 1:11:23.479 --> 1:11:23.640 You know. 1:11:23.680 --> 1:11:26.519 Here here's the punchline, elons and technologists. He clearly understands 1:11:26.520 --> 1:11:29.320 the technology stack. The way you improve things, the way 1:11:29.360 --> 1:11:32.679 you get productivity, you do things better, is both the 1:11:32.720 --> 1:11:35.720 improvement of your processes and the application of technology to 1:11:35.760 --> 1:11:38.320 make those processes work more efficiently. Both of those are 1:11:38.320 --> 1:11:40.240 going to happen. I can't tell you exactly what's going 1:11:40.280 --> 1:11:41.559 to happen in the government. I can't tell you what 1:11:41.640 --> 1:11:43.320 play they're going to make. But what I can guarantee 1:11:43.360 --> 1:11:45.960 you is the end state, there will be more technology 1:11:46.080 --> 1:11:49.000 powering our government and our public sector, and it will 1:11:49.040 --> 1:11:52.400 probably make them more efficient and more effective. How it 1:11:52.439 --> 1:11:54.680 works out above that above my pay grade, but it 1:11:54.720 --> 1:11:56.360 is inevitable. The one thing I can guarantee you there 1:11:56.360 --> 1:11:59.840 won't be less technology in the government when we move 1:11:59.840 --> 1:12:01.439 in to the next year or the next two years. 1:12:01.479 --> 1:12:03.400 Listen, I'm asking you this as a technologist, as somebody 1:12:03.439 --> 1:12:05.839 who's a front row seat on the technology side. Critics 1:12:05.840 --> 1:12:08.439 have said their concerns about security and privacy when it 1:12:08.479 --> 1:12:10.880 comes to what Doje and what Elon Musk are doing. 1:12:10.880 --> 1:12:11.879 Should they be concerned. 1:12:12.120 --> 1:12:15.120 Maybe you should always be concerned and you should always 1:12:15.120 --> 1:12:17.320 look at the risk of technology. Here's a good example. 1:12:17.760 --> 1:12:21.600 We're maybe outspoken that for the real critical AI activities 1:12:21.600 --> 1:12:23.439 you should do them in a private environment. Some people 1:12:23.479 --> 1:12:25.920 disagree with us. The reason we say that is because 1:12:26.000 --> 1:12:28.160 that's the lowest risk path. It also happens to be 1:12:28.200 --> 1:12:31.559 the lowest cost path. Every technology decision you make is 1:12:32.560 --> 1:12:35.200 a technology and a vacuum until you apply it to 1:12:35.280 --> 1:12:36.720 a real world scenario. 1:12:36.400 --> 1:12:37.040 And that's where the risk. 1:12:37.280 --> 1:12:39.880 So essentially, what you're saying is if the Department of 1:12:39.920 --> 1:12:44.960 Government Efficiency employees are or using AI tools to help 1:12:45.120 --> 1:12:47.000 with their jobs. They should be doing that in an 1:12:47.080 --> 1:12:49.439 environment that is secure, you. 1:12:49.360 --> 1:12:52.360 Bet, and what that means to them they should figure out. 1:12:52.400 --> 1:12:54.240 But what you shouldn't do is go into an environment 1:12:54.240 --> 1:12:56.920 when you're using technology without contemplating the risk of it. 1:12:57.040 --> 1:13:00.400 I have full confidence that any good technologists, including the 1:13:00.439 --> 1:13:02.760 folks doing that work in the government, are absolutely thinking 1:13:02.760 --> 1:13:04.640 about not just the technology in a vacuum, but the 1:13:04.640 --> 1:13:06.559 fact that when it gets into the real world there 1:13:06.560 --> 1:13:09.320 are security considerations. There are other activities that need to 1:13:09.320 --> 1:13:11.960 be controlled, and you always build a security model into 1:13:11.960 --> 1:13:15.599 your technology architecture. Even lms have security models, even agents 1:13:15.600 --> 1:13:18.400 have security models, because that's necessary to make them work 1:13:18.400 --> 1:13:19.519 in something like an enterprise. 1:13:19.600 --> 1:13:22.400 Our thanks to John Rose, CTO and Chief AI Officer 1:13:22.560 --> 1:13:23.720 at Dell Technologies. 1:13:23.840 --> 1:13:26.200 And that wraps up the weekend edition of Bloomberg Business 1:13:26.200 --> 1:13:29.120 Week from Bloomberg Radio. At the Bloomberg invest event in 1:13:29.120 --> 1:13:32.200 New York City. You can catch all the conversations from 1:13:32.240 --> 1:13:36.360 the events, including Tim's demo with Sigtech. You can find 1:13:36.400 --> 1:13:39.000 that on the Bloomberg and at Bloomberg dot com, including 1:13:39.200 --> 1:13:42.120 the Bloomberg Live website as well. Thank you so much 1:13:42.160 --> 1:13:42.840 for joining us. 1:13:43.200 --> 1:13:45.599 Be sure to tune into Bloomberg Business Week Monday through 1:13:45.640 --> 1:13:48.439 Friday starting at two pm Wall Street Time on Bloomberg TV, 1:13:48.520 --> 1:13:52.000 Bloomberg Radio, and on Sirius XM Channel one twenty one. 1:13:52.080 --> 1:13:53.920 You can also listen to us on Apple car Play 1:13:53.960 --> 1:13:56.080 and Android Auto Free in the Apple App Store or 1:13:56.360 --> 1:13:57.200 on Google Play. 1:13:57.240 --> 1:13:59.680 You can also watch our daily broadcast on YouTube. Just 1:13:59.680 --> 1:14:03.639 search Bloomberg Global News re subplecast on Bloomberg Originals, available 1:14:03.640 --> 1:14:09.080 at Bloomberg dot com, Slash Originals, and streaming platforms including Roku, Amazon, fireTV, 1:14:09.280 --> 1:14:10.840 Simsung TV Plus and more. 1:14:11.000 --> 1:14:14.559 Find our Bloomberg BusinessWeek podcast at Bloomberg dot com, Apple, 1:14:14.680 --> 1:14:17.599 or wherever you get your podcasts, and the latest edition 1:14:17.680 --> 1:14:20.400 of the magazine is available on newstands now at Bloomberg 1:14:20.439 --> 1:14:23.160 dot com and always on the Bloomberg termino. I'm Tim 1:14:23.160 --> 1:14:24.719 Stenebeck and I'm Carol Masser. 1:14:24.800 --> 1:14:26.040 Have a good and safe weekend. 1:14:26.479 --> 1:14:31.320 This is the Bloomberg Business Week podcast, available on Apple, Spotify, 1:14:31.439 --> 1:14:35.160 and anywhere else you get your podcasts. Listen live weekday 1:14:35.200 --> 1:14:39.200 afternoons from two to five pm Eastern on Bloomberg dot com. 1:14:39.240 --> 1:14:43.160 The iHeartRadio app tune In, and the Bloomberg Business app. 1:14:43.400 --> 1:14:46.320 You can also watch us live every weekday on YouTube 1:14:46.400 --> 1:14:48.559 and always on the Bloomberg terminal