WEBVTT - Bloomberg Surveillance TV: October 17th, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio News. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.520 --> 0:00:18.720 with Lisa Bromwitz and Amerie Hordern. Join us each day 0:00:18.760 --> 0:00:22.280 for insight from the best in markets, economics, and geopolitics 0:00:22.440 --> 0:00:24.880 from our global headquarters in New York City. We are 0:00:24.960 --> 0:00:27.680 live on Bloomberg Television weekday mornings from six to nine 0:00:27.720 --> 0:00:31.319 am Eastern. Subscribe to the podcast on Apple, Spotify or 0:00:31.320 --> 0:00:33.960 anywhere else you listen, and as always on the Bloomberg 0:00:34.040 --> 0:00:38.280 Terminal and the Bloomberg Business app. Stockslower as doubtscrow over 0:00:38.280 --> 0:00:40.680 the credit house of US regional banks. Lisa is standing 0:00:40.720 --> 0:00:44.640 by with a key guest. Hey Lisa, Hey John, thanks 0:00:44.680 --> 0:00:45.040 so much. 0:00:45.080 --> 0:00:48.360 I am here with Christian Saving, the CEO of Deutsche Bank. 0:00:48.400 --> 0:00:50.559 And before we get started, I want to say we 0:00:50.560 --> 0:00:53.199 booked this weeks ago. This was not necessarily booked to 0:00:53.240 --> 0:00:55.880 talk about the credit issues that are emerging to stave 0:00:55.920 --> 0:00:58.440 off any concerns that might be percolating out. But I 0:00:58.480 --> 0:01:00.680 do want to start there this idea that this morning 0:01:00.720 --> 0:01:02.160 we're all focused on. 0:01:02.000 --> 0:01:02.840 What are we missing? 0:01:03.080 --> 0:01:04.160 Have things gotten too. 0:01:04.000 --> 0:01:07.520 Frauthy and have there been some issues of fraud or 0:01:07.640 --> 0:01:10.720 easy financing conditions. Do you see that anywhere. 0:01:10.319 --> 0:01:14.240 In your book, morning, Liza, I know, actually not. I 0:01:14.319 --> 0:01:16.120 mean there's a lot of volatility in the market. We 0:01:16.160 --> 0:01:18.479 have seen that actually over the last weeks and months. 0:01:18.560 --> 0:01:22.039 Whenever something is supposed to be the market is reacting. 0:01:23.000 --> 0:01:24.880 In our books, I can tell you no, there is 0:01:24.920 --> 0:01:28.080 no deterioration we have. Actually, we are very confident with 0:01:28.200 --> 0:01:31.880 our credit portfolio and that across the world, whether it's 0:01:31.880 --> 0:01:34.759 in Germany, whether it's in Europe, whether it's in the US, 0:01:35.240 --> 0:01:39.280 in the different asset classes corporate bank, private bank, and 0:01:39.640 --> 0:01:44.520 in this regard, I think the market is reacting quite heavily, 0:01:45.280 --> 0:01:47.319 but I think you always have to see it over 0:01:47.400 --> 0:01:50.440 the long term, and so far, to be honest, I 0:01:50.480 --> 0:01:51.480 see no credit. 0:01:51.160 --> 0:01:52.440 Deterioration long term. 0:01:52.560 --> 0:01:54.840 Your shares are up more than eighty percent so far 0:01:54.880 --> 0:01:57.320 this year, so a couple percent here there is sort 0:01:57.360 --> 0:01:59.480 of you know, Okay, it's tough, but we can manage 0:01:59.520 --> 0:02:04.280 through it. Just wondering though, whether it's indicative of people's 0:02:04.320 --> 0:02:06.120 mood that people are looking for a reason to sell 0:02:06.200 --> 0:02:08.680 because they're getting nervous about how good things are getting 0:02:08.720 --> 0:02:09.160 and how. 0:02:09.040 --> 0:02:10.600 Far valuations have gone. 0:02:10.600 --> 0:02:13.720 Do you see that with any executives and the confidence 0:02:13.720 --> 0:02:16.359 that you're hearing from them in terms of what they're 0:02:16.360 --> 0:02:18.960 seeking to do or how much they're extending to planning 0:02:19.000 --> 0:02:19.560 to expand. 0:02:19.840 --> 0:02:21.920 No, actually confidence is quite good. 0:02:22.480 --> 0:02:26.800 I mean, there's obviously always the risk in case in 0:02:26.840 --> 0:02:31.040 case a recession would come, then obviously the confidence would 0:02:31.080 --> 0:02:33.200 go down. You would also see then a situation in 0:02:33.200 --> 0:02:35.799 the credititfolio. But this is not the topic at all. Also, 0:02:35.840 --> 0:02:38.600 in the whole week here in Washington, we haven't discussed 0:02:38.600 --> 0:02:41.480 the topic of recession at all. People are seeing growth, 0:02:41.760 --> 0:02:45.359 they're seeing employment. We talk a lot about what is 0:02:45.400 --> 0:02:48.359 happening in Germany and in Europe and how we can 0:02:48.440 --> 0:02:54.040 actually grow competitiveness and the economic output. So therefore I 0:02:54.040 --> 0:02:58.200 wouldn't say that people are concerned. Of course, the geopolitical 0:02:58.280 --> 0:03:07.440 uncertainties still discussions. Other other issues are also dominating, dominating 0:03:07.480 --> 0:03:10.760 the discussions, But I wouldn't say that there is a 0:03:10.880 --> 0:03:15.040 concern of the executives. We are watching the market, but 0:03:15.120 --> 0:03:18.480 there is nothing out where I would say people are 0:03:18.520 --> 0:03:21.000 concerned of a deterioration given the fact. 0:03:20.840 --> 0:03:23.960 That there are so many uncertainties still outstanding. Are you 0:03:24.000 --> 0:03:26.160 surprised by how much optimism you've been hearing. 0:03:28.800 --> 0:03:31.799 Yes, because we have talked for the last two years, 0:03:31.840 --> 0:03:36.200 given all the instabilities and uncertainties, when when is actually 0:03:36.280 --> 0:03:39.920 a potential down downturn in the market's coming. But again, 0:03:39.960 --> 0:03:42.680 there is a lot of liquidity in the market people. 0:03:43.240 --> 0:03:45.240 We have seen it, for instance in the in the 0:03:45.280 --> 0:03:48.440 second quarter when there was a stimulus program in Germany, 0:03:48.440 --> 0:03:51.640 how much liquidity came to Europe. And you see that 0:03:51.720 --> 0:03:55.440 people really want to deploy their money. And therefore, I 0:03:55.480 --> 0:03:57.360 think you always have to see if there is a 0:03:57.480 --> 0:04:01.920 slight decrease in market prices, liquidity immediately comes in again. 0:04:02.360 --> 0:04:06.400 And therefore I'm still optimistic actually that we are not 0:04:06.520 --> 0:04:07.920 talking about an overvaluation. 0:04:08.000 --> 0:04:09.960 We have some stretch valuations. 0:04:09.480 --> 0:04:12.400 No doubt, but I wouldn't say that the whole market 0:04:12.400 --> 0:04:13.000 is overvalued. 0:04:13.160 --> 0:04:15.960 Let's talk about Germany and European banks in general have 0:04:16.000 --> 0:04:18.000 been on a tear this year, and it's been driven 0:04:18.040 --> 0:04:20.640 by this idea that maybe there will be deregulation and 0:04:20.720 --> 0:04:24.200 maybe there will be actual fiscal spending to support the region. 0:04:24.760 --> 0:04:28.640 Are you seeing any actual tangible signs of deregulation that 0:04:28.720 --> 0:04:32.680 you think could unleash, whether it's bank mergers, whether it's 0:04:32.839 --> 0:04:35.680 just more dynamism in the European banking sector. 0:04:36.440 --> 0:04:37.720 Well, at least we have discussions. 0:04:38.279 --> 0:04:41.240 I mean, look, there are also some tangible items like 0:04:42.240 --> 0:04:46.159 the delay in the implementation of fr to be we 0:04:46.279 --> 0:04:50.160 have also in certain national buffers. When it comes to 0:04:50.279 --> 0:04:54.640 capital buffers, we have seen some movements of the national regulators, 0:04:54.640 --> 0:04:57.039 but also of the ECB. I think we have a 0:04:57.080 --> 0:05:01.120 constructive discussion with the ECB. We are talking about that 0:05:01.160 --> 0:05:04.480 we as European banks, are demanding a level playing field. 0:05:04.520 --> 0:05:07.080 We see the developments here in the US, we see 0:05:07.080 --> 0:05:09.640 developments in the UK, and therefore I think there are 0:05:09.680 --> 0:05:12.239 constructive discussions with our regulators, so there. 0:05:12.080 --> 0:05:12.760 Is some movement. 0:05:13.920 --> 0:05:18.520 Nevertheless, I think it's not only about regulation. I think 0:05:18.560 --> 0:05:21.600 the most important is how can we ensure that Europe 0:05:21.640 --> 0:05:26.200 of all, but also Germany is actually increasing the competitiveness 0:05:26.200 --> 0:05:29.080 and growth, and therefore we need to do more on 0:05:29.120 --> 0:05:32.720 the structural reform saute, which goes way beyond bank regulations. 0:05:33.279 --> 0:05:35.520 That is actually the topic which we need to push for, 0:05:35.760 --> 0:05:38.480 because at the end of the day, regulation is important, 0:05:38.520 --> 0:05:40.960 we need a level playing field, but the most important 0:05:41.000 --> 0:05:43.480 is the underlying growth and therefore we need structural reforms 0:05:43.480 --> 0:05:44.120 in Europe is. 0:05:44.040 --> 0:05:44.840 That friscal spending. 0:05:44.880 --> 0:05:46.640 Are you saying that you hope that they increase it 0:05:46.720 --> 0:05:49.200 more and that you're already seeing stimulative effects from that? 0:05:49.480 --> 0:05:54.680 I suppose I personally think that the debt break alignment 0:05:54.720 --> 0:05:56.680 and adjustments which we have seen in Germany was the 0:05:56.800 --> 0:05:59.680 right step to do. But only doing this is not 0:05:59.720 --> 0:06:02.920 the right thing. Just increasing debt is not the right thing. 0:06:03.000 --> 0:06:05.520 What you need to do is in parallel work on 0:06:05.560 --> 0:06:09.160 structural reforms that it makes sense for corporate's private individuals 0:06:09.200 --> 0:06:11.880 to invest. And that has all about to do with 0:06:13.279 --> 0:06:17.160 tackling the problem of energy prices in Germany, reducing bureaucracy, 0:06:17.880 --> 0:06:21.720 making sure that we are doing bigger investments into infrastructure, 0:06:22.000 --> 0:06:26.440 that the approvals for new investments are not taking that 0:06:26.560 --> 0:06:27.640 long as it did before. 0:06:27.960 --> 0:06:29.080 All that needs to be done. 0:06:29.120 --> 0:06:35.360 So aligning or just growing by a stimulus program will. 0:06:34.560 --> 0:06:35.280 Not be sufficient. 0:06:35.600 --> 0:06:38.479 We need imperilel structural reforms, and there I can see 0:06:38.520 --> 0:06:41.360 that actually the German government is taking the first step. 0:06:41.400 --> 0:06:42.400 So what about businesses? 0:06:42.480 --> 0:06:45.880 How much are businesses in Germany moving away from places 0:06:45.920 --> 0:06:49.120 like China in terms of sources of business? How much 0:06:49.120 --> 0:06:52.880 are you seeing those fissures just in the companies that 0:06:52.960 --> 0:06:53.560 you work with. 0:06:54.000 --> 0:06:56.680 Well, it's the result already of the COVID. I think 0:06:56.760 --> 0:07:00.680 after COVID people really thought far more about diversification. We 0:07:00.720 --> 0:07:04.799 can see that German corporates, European corporates are very active 0:07:05.240 --> 0:07:10.520 in diversifying their supply chains, their production chains, and are 0:07:10.560 --> 0:07:16.680 also trying to invest more globally and less concentrated. You 0:07:16.720 --> 0:07:20.160 can also see actually that business are confident actually to 0:07:20.360 --> 0:07:23.320 really reinvest in Germany. You may have heard about the 0:07:23.360 --> 0:07:28.240 initiative which is running in Germany, the Made for Germany initiative, 0:07:28.760 --> 0:07:31.720 where more than one hundred corporates are actually committed to 0:07:31.920 --> 0:07:34.680 invest over seven hundred billion euros in Germany over the 0:07:34.760 --> 0:07:38.080 next three years. That shows actually that there is confidence 0:07:38.120 --> 0:07:41.520 in the business and at the same time that corporates 0:07:41.560 --> 0:07:43.880 are really redistributing their supply chains. 0:07:43.920 --> 0:07:45.880 Are you seeing any clients trying to shift away from 0:07:45.880 --> 0:07:47.040 dollar exposure right now? 0:07:48.120 --> 0:07:52.440 Look, there was clearly a trend in Q two about reallocation. 0:07:53.040 --> 0:07:56.800 But I wouldn't join the core of saying well, that 0:07:56.920 --> 0:07:59.920 is the end of the US dollar as the reserve current. 0:08:00.480 --> 0:08:02.960 The US dollar will be the reserve currency. 0:08:03.320 --> 0:08:05.400 But I think that a lot of investors actually are 0:08:05.480 --> 0:08:09.360 trying to reallocate, and in particular with what happened in 0:08:09.400 --> 0:08:11.960 the second quarter in Germany but also in Europe, you 0:08:12.000 --> 0:08:14.800 could see a shift to Europe and that's actually the 0:08:14.840 --> 0:08:17.440 momentum which we need to retain and where we need 0:08:17.480 --> 0:08:17.880 to build on. 0:08:18.240 --> 0:08:21.120 And this move away from the dollar has been largely 0:08:21.120 --> 0:08:23.120 in derivative's markets. I mean, how much has that just 0:08:23.160 --> 0:08:25.840 been on fire this year in terms of hedging any 0:08:25.880 --> 0:08:29.320 exposure to the dollar, not necessarily getting out of dollar 0:08:29.360 --> 0:08:30.360 denominated assets. 0:08:30.880 --> 0:08:31.800 Well, I think it's both. 0:08:31.840 --> 0:08:34.920 It's it's not only in the derivative market can we 0:08:35.040 --> 0:08:38.320 really have seen rear flows And therefore it has been 0:08:38.720 --> 0:08:40.839 it has been a trend in Q two, it's a 0:08:40.920 --> 0:08:44.200 little bit reversing in Q three. And therefore it is 0:08:44.240 --> 0:08:47.840 so important in particular for Europe that they really continue. 0:08:47.400 --> 0:08:48.440 With structural reforms. 0:08:48.480 --> 0:08:50.720 If this is not going through, if we are not 0:08:50.800 --> 0:08:54.679 continued with structural reforms, then obviously grows and therefore so 0:08:54.760 --> 0:08:59.040 the inflow in European assets will not further increase. 0:08:59.200 --> 0:09:02.160 And is that just whether there will be reforms or not. 0:09:02.200 --> 0:09:05.200 How does that effect where you want your footprint to 0:09:05.280 --> 0:09:06.720 be dominant? 0:09:06.760 --> 0:09:06.920 Right? 0:09:06.960 --> 0:09:08.719 Do you want to be more in Germany. Do you 0:09:08.760 --> 0:09:10.360 want to be more in the United States? Do you 0:09:10.440 --> 0:09:12.800 want to expand more in one place or another based 0:09:12.840 --> 0:09:15.959 on your faith, hope, et cetera, that there will be 0:09:16.000 --> 0:09:18.920 reform in Europe versus what actually is happening elsewhere. 0:09:19.360 --> 0:09:22.880 Look, Liza, for me, it is that from a bank's 0:09:22.920 --> 0:09:25.280 point of view, the most important is to be diversified, 0:09:25.600 --> 0:09:28.280 and we as Loutsche Bank, have taking a clear decision 0:09:28.559 --> 0:09:30.600 to be a global bank and to make sure that 0:09:30.640 --> 0:09:34.000 we are not too concentrated in any one of the regions. 0:09:34.160 --> 0:09:35.240 Of course, when you. 0:09:35.120 --> 0:09:37.599 Have your home market in Germany with forty percent of 0:09:37.679 --> 0:09:40.640 the revenues, you have a great interest that this country 0:09:40.720 --> 0:09:43.280 is growing, that you have the right structural reforms, that 0:09:43.320 --> 0:09:44.800 fiscal stimulus is kicking in. 0:09:45.080 --> 0:09:47.760 But at the same time, despite. 0:09:47.600 --> 0:09:51.560 All the talks about the end of globalization, globalization will 0:09:51.559 --> 0:09:55.079 not end. Globalization will be different going forward, but that 0:09:55.240 --> 0:09:58.640 needs actually global banks with local nohow and that is 0:09:58.679 --> 0:10:01.040 actually where we are focusing from a Deutsche Bank point 0:10:01.040 --> 0:10:04.520 of view, strong home market, but being an international player, 0:10:04.559 --> 0:10:07.920 because what we see from our clients, they would like 0:10:08.000 --> 0:10:11.439 to have a bank with an international exposure, with an 0:10:11.480 --> 0:10:14.960 international expertise, and that with the global network, and that's 0:10:15.000 --> 0:10:18.679 exactly what we want to be. So diversified and a 0:10:18.760 --> 0:10:21.240 global setup is I think the key to success. 0:10:21.280 --> 0:10:23.440 Are you interested in any acquisitions or is this going 0:10:23.480 --> 0:10:25.959 to be a very organic process going forward? 0:10:26.000 --> 0:10:28.520 So very organic process. Look, I'm very happy with the 0:10:28.520 --> 0:10:32.600 development which we have taken. You were just talking about 0:10:32.600 --> 0:10:35.199 our share price. I think overall the bank has done 0:10:35.600 --> 0:10:39.439 very well over the last three four years. The turnaround 0:10:39.440 --> 0:10:42.400 has been completed, and now it's really bringing the bank 0:10:42.440 --> 0:10:44.720 from a ten percent hour to eat to the next stage. 0:10:45.160 --> 0:10:49.880 All leavers for that are leavers which are sort of say, 0:10:50.000 --> 0:10:51.199 within our own hands. 0:10:51.480 --> 0:10:52.360 It's about a. 0:10:52.280 --> 0:10:56.000 Better capital management, it's about focus growth, it's further about 0:10:56.720 --> 0:11:00.559 investing into technology to get further efficiencies out that is 0:11:00.600 --> 0:11:01.440 in our hands. 0:11:01.600 --> 0:11:03.120 And as long as if. 0:11:03.080 --> 0:11:06.440 I have the chance to further increase my return on 0:11:06.480 --> 0:11:08.280 equity with sort of. 0:11:08.200 --> 0:11:10.960 Say homework, that is always the preferred option. 0:11:11.120 --> 0:11:13.280 So not interested in any local banks that are nearby 0:11:13.360 --> 0:11:14.480 that you might bring out here. 0:11:15.440 --> 0:11:18.000 As I said again, if you can focus on yourself, 0:11:18.080 --> 0:11:20.840 if you can improve your return on equity by applying 0:11:20.880 --> 0:11:23.000 this homework, honestly, it's always the first option. 0:11:23.120 --> 0:11:25.480 There's also a big question here about artificial intelligence and 0:11:25.480 --> 0:11:28.520 how much it's going to alter the size of the staff, 0:11:28.760 --> 0:11:31.520 the way of doing business going forward. Have you seen 0:11:31.559 --> 0:11:35.440 any material changes or advantages from using and adopting artificial 0:11:35.520 --> 0:11:40.360 intelligence of late that have really materially improved profitability. 0:11:39.760 --> 0:11:40.959 Or decreased staff. 0:11:41.520 --> 0:11:43.959 Well, we have many use cases and you can apply 0:11:44.040 --> 0:11:46.880 that across the bank. And the interesting part is it 0:11:46.920 --> 0:11:52.120 actually it actually applies to revenue SI, customer satisfaction, interaction 0:11:52.679 --> 0:11:56.560 risk clients. It applies to efficiency and cost management, and 0:11:56.640 --> 0:11:59.320 also it applies to something which is very important for banks, 0:11:59.520 --> 0:12:02.920 control and regulatory compliance. And in each of these three 0:12:03.000 --> 0:12:05.800 areas we have seen great use cases. If you think 0:12:05.800 --> 0:12:09.800 about also our research department, they started actually applying AI. 0:12:10.200 --> 0:12:13.280 If you think about the precision of research reports, with 0:12:13.400 --> 0:12:15.920 the help of AI got far better. Of course, that 0:12:16.000 --> 0:12:18.880 has an impact in terms of the speed and turnaround 0:12:18.880 --> 0:12:22.680 of research reports. Same actually in other areas when you 0:12:22.720 --> 0:12:27.120 think about operations, the way we can apply AI. Now, 0:12:27.200 --> 0:12:29.640 the really important thing is now that we have a 0:12:29.800 --> 0:12:32.920 structural approach to all these use cases and that we 0:12:32.960 --> 0:12:35.600 have a clear priority where do we prioritize it at first? 0:12:35.800 --> 0:12:38.720 Because you can imagine that everybody in this bank wants 0:12:38.760 --> 0:12:41.400 to apply now, AI, we need to have a clear 0:12:41.440 --> 0:12:44.280 priority of investments. But I think it will be a 0:12:44.320 --> 0:12:47.360 game changer going forward and it will be one of 0:12:47.400 --> 0:12:50.520 the key leavers how to increase profitability of banks. 0:12:52.280 --> 0:12:55.720 Stay with us more Bloomberg Surveillance coming up after this, 0:13:04.600 --> 0:13:07.840 Let's turn to private equity. The Consortium Bank Electronic Arts 0:13:07.840 --> 0:13:09.600 is set to add more than a dozen banks to 0:13:09.640 --> 0:13:13.000 its underwriting group after JP Morgan put up twenty billion 0:13:13.040 --> 0:13:15.640 dollars of debt to bankroll the leverage buyout. The banks 0:13:15.640 --> 0:13:18.200 are inline to share roughly five hundred million dollars in 0:13:18.240 --> 0:13:21.400 fees for arranging the financinc joining us. Now, a man 0:13:21.440 --> 0:13:24.280 who knows something about a leverage buyout, Steve Paluk of 0:13:24.360 --> 0:13:26.240 Being Capital. Steve's good to see it, so it could 0:13:26.240 --> 0:13:29.080 be a good morning. Let's reflect on your time. The 0:13:29.280 --> 0:13:33.120 largest leverage buyo ever before this one was HCA back 0:13:33.160 --> 0:13:35.480 in two thousand and sixty thousand and seven. There are 0:13:35.559 --> 0:13:37.319 you were right there in the middle of it. Despite 0:13:37.360 --> 0:13:39.440 that moment, and how it compares to what we're seeing 0:13:39.480 --> 0:13:40.240 play out now. 0:13:40.120 --> 0:13:40.960 Well, it's really interesting. 0:13:41.000 --> 0:13:44.040 I think that buyout was five billion equity and twenty 0:13:44.080 --> 0:13:47.760 seven billion dollars debt. This buyout is much more equity, 0:13:48.000 --> 0:13:50.360 you know, kind of thirty billion of equity and twenty 0:13:50.360 --> 0:13:52.800 five twenty billion, may thirty five billion of equity. So 0:13:53.960 --> 0:13:55.760 the markets have changed to that extent that you can't 0:13:55.800 --> 0:13:57.959 leverage you much. But the EBA does a little less 0:13:59.080 --> 0:14:02.520 very quality sponsor, and JP Morgan is a very quality bank. 0:14:02.600 --> 0:14:05.760 So they did the deal because of the great growth 0:14:05.960 --> 0:14:09.320 in gaming and media and entertainment, and I think is 0:14:09.320 --> 0:14:10.240 a very solid company. 0:14:10.360 --> 0:14:12.839 You did the tremendously well out of HCA. It needs 0:14:12.840 --> 0:14:14.880 to be very very clear about that. But the timing 0:14:14.920 --> 0:14:17.040 of it is curious. It came right at the peak 0:14:17.040 --> 0:14:19.800 of credit and this is now too. Is that anything 0:14:19.840 --> 0:14:20.640 to be concerned about? 0:14:21.240 --> 0:14:23.720 You know, I'm less concerned about credit right now in 0:14:23.800 --> 0:14:29.440 terms of the private credit markets because the private letters actually. 0:14:29.080 --> 0:14:29.840 Are very good. 0:14:29.960 --> 0:14:32.760 The banks have been very good JP Morgan, especially Bank 0:14:32.800 --> 0:14:35.280 of America, well run, well capitalized banks. 0:14:35.600 --> 0:14:37.440 And private credit is different. 0:14:37.280 --> 0:14:39.840 Than credit from banks because if it does go bad, 0:14:40.480 --> 0:14:42.520 you only write off the equity from people that put 0:14:42.520 --> 0:14:45.440 the equity in. It doesn't have a systemic multiplier effect. 0:14:45.760 --> 0:14:48.080 So I'm less concerned about private credit. What one more 0:14:48.120 --> 0:14:51.320 concerned about is the size of the national debt and 0:14:51.320 --> 0:14:54.400 how much interest we're spending on the national debt. It's 0:14:54.440 --> 0:14:56.400 really interesting if you go back to when I got 0:14:56.400 --> 0:14:59.280 out of business school, there was a huge sturm and 0:14:59.360 --> 0:15:02.600 drawing about the national debt passing one trillion. That's in 0:15:02.680 --> 0:15:05.720 nineteen eighty two, So it took two hundred and fifty 0:15:05.800 --> 0:15:09.000 years to have one trillion of national debt. In the 0:15:09.080 --> 0:15:13.600 last forty years, we now have thirty seven trillion. 0:15:13.600 --> 0:15:15.440 Which is more than the GDPGB. 0:15:15.480 --> 0:15:18.560 It's about thirty trillion, So that concerns me more in 0:15:18.640 --> 0:15:21.240 terms of the impact of the dollar interest rates. Our 0:15:21.560 --> 0:15:24.000 interest from the government now is one of the highest expenditures. 0:15:24.000 --> 0:15:27.280 It's right up there with defense and healthcare. So that 0:15:27.320 --> 0:15:29.040 concerns me more than private credit. 0:15:29.200 --> 0:15:30.840 I Steve, I could probably find you people who a 0:15:30.880 --> 0:15:33.000 consent back in the eighties two, and then in the 0:15:33.040 --> 0:15:35.760 two thousands, and as we went through ten trillion, twenty 0:15:35.760 --> 0:15:37.840 trillion and kept going high, they were concerned all the 0:15:37.840 --> 0:15:39.680 way up. Unfortunately, I say this moment. 0:15:39.480 --> 0:15:42.520 Different, Well, I think I don't know if it is different, 0:15:42.920 --> 0:15:46.560 But in situations like this, it's always okay till it 0:15:46.600 --> 0:15:50.840 isn't okay. So you get used to you pass a trillion. Ever, 0:15:50.960 --> 0:15:53.000 Dirkson had a board up that was counting it up 0:15:53.080 --> 0:15:55.000 at that time, and it passed a trillion, there was 0:15:55.360 --> 0:15:58.800 a huge outcry. Now it's ten trillion, then twenty trillion, 0:15:59.000 --> 0:16:01.800 then thirty trillion. But at some point you've got to 0:16:01.840 --> 0:16:04.040 have some long term plan to pay that money back 0:16:04.080 --> 0:16:06.280 and get that deficit down because it's eating up huge 0:16:06.320 --> 0:16:07.400 amounts of the government budget. 0:16:07.680 --> 0:16:10.000 And as as as the interest rates roll. 0:16:09.960 --> 0:16:11.480 Over, you know, a lot of that is still financing 0:16:11.520 --> 0:16:13.520 the old really low interest rates. They're going to have 0:16:13.560 --> 0:16:15.400 to refinance it at five percent, you know, you know, 0:16:15.520 --> 0:16:18.440 four and a half percent, and then the number goes 0:16:18.520 --> 0:16:18.920 up again. 0:16:19.320 --> 0:16:21.040 Well, when you see what's going on Washington, I want 0:16:21.040 --> 0:16:23.120 to go back to your EA deal. It's not just 0:16:23.160 --> 0:16:25.200 the size and scope that got a ton of people's attention. 0:16:25.680 --> 0:16:28.560 There's concern in Washington given some of the players involved. 0:16:28.800 --> 0:16:30.480 Have you heard from politicians about that. 0:16:30.960 --> 0:16:32.920 I don't think there's been a lot of pushback on 0:16:33.280 --> 0:16:35.400 that and the deal. I think we'll be controlled by 0:16:35.400 --> 0:16:38.160 silver Lake, which is an American, you know, fantastic private 0:16:38.160 --> 0:16:39.280 equity company, but. 0:16:39.400 --> 0:16:41.800 With the Saudi PIF being involved, some people think Jared 0:16:41.840 --> 0:16:44.080 Kushner was brought in just to get the check government 0:16:44.080 --> 0:16:44.960 seal of approval. 0:16:45.600 --> 0:16:47.760 You know, again, I think silver Lake's a fantastic firm 0:16:47.800 --> 0:16:49.680 and they're leading the charge there and so I think 0:16:49.720 --> 0:16:51.600 there's really going to be no concern because they'll be 0:16:51.680 --> 0:16:52.720 calling the shots on the deal. 0:16:52.720 --> 0:16:54.800 And say, if we started this conversation by comparing this 0:16:54.920 --> 0:16:58.480 dale ci in I was six. I seven. Have the 0:16:58.520 --> 0:17:01.080 pose off capits have changed in the last twenty years. 0:17:01.280 --> 0:17:02.240 Yeah? Absolutely. 0:17:03.120 --> 0:17:05.040 You know, when I started out in the industry, there 0:17:05.040 --> 0:17:06.960 was only three or four firms doing this I think 0:17:07.280 --> 0:17:10.760 in general, and it was mostly USA. Now it's global. 0:17:11.920 --> 0:17:16.400 The fund sizes are up probably twenty times from when 0:17:16.400 --> 0:17:20.520 I started. And also you have sovereigns and bid againstucial 0:17:20.560 --> 0:17:24.560 players partnering with private equity, so the dry powder is huge. 0:17:24.720 --> 0:17:26.480 Are there are enough opportunities to go around? 0:17:27.680 --> 0:17:27.840 You know? 0:17:28.240 --> 0:17:30.320 You know I got asked that question in nineteen eighty 0:17:30.400 --> 0:17:38.439 nine again, and I feel like a broken record. Private equity, 0:17:38.480 --> 0:17:41.640 I think is here to stay. The model has really evolved, 0:17:41.680 --> 0:17:44.760 so it really is huge value added to to kind 0:17:44.800 --> 0:17:50.240 of transform companies, make them better, globalize them, build new products, 0:17:50.520 --> 0:17:52.120 and in an environment where you don't have to worry 0:17:52.119 --> 0:17:54.520 about quart of learning. So the model is a very 0:17:54.520 --> 0:17:57.080 good model, and it's only expanded, it's only gotten bigger, 0:17:57.560 --> 0:17:59.600 and I think it'll meet There will be plenty of 0:17:59.600 --> 0:18:01.480 opportunit these for these folks to invest money. 0:18:01.480 --> 0:18:03.760 Well, let's talk about the opportunities now for you and 0:18:03.800 --> 0:18:06.760 how your sport franchise is are going. Starting with Atlanta. 0:18:06.800 --> 0:18:09.040 Steve walked into the room with some Atlanta sneakers with 0:18:09.520 --> 0:18:12.399 the sponsor New Balance. On the relationship between you and 0:18:12.440 --> 0:18:14.719 New balants, can you just debscribe what that's like at 0:18:14.720 --> 0:18:15.080 the moment? 0:18:15.560 --> 0:18:16.159 Fantastic. 0:18:16.640 --> 0:18:19.439 A New Balance is a is kind of a fighting 0:18:19.480 --> 0:18:22.800 brand growing taking a lot of share. They really like 0:18:22.840 --> 0:18:24.919 the Atalanta story because we have the same values. You know, 0:18:25.080 --> 0:18:27.879 we're kind of a fighting brand against your the wanted 0:18:27.880 --> 0:18:32.360 AC one team that you support, and so it's kind 0:18:32.359 --> 0:18:34.719 of a matchmate and having the New Balance is very 0:18:34.720 --> 0:18:37.040 excited about it. We're excited about it. We've just named 0:18:37.040 --> 0:18:39.080 our stadium New Balance Arena. I think it's the first 0:18:39.080 --> 0:18:41.800 arena that New Balance is named. And we're very proud 0:18:41.800 --> 0:18:43.719 to be associated with New Balance as a family company. 0:18:43.960 --> 0:18:45.560 You know, the Package Group is a family company in 0:18:45.560 --> 0:18:47.480 the precossis in Italy, your family companies, so the three 0:18:47.480 --> 0:18:51.880 families have come together and hopefully take to the next level. 0:18:51.920 --> 0:18:53.840 You've done a tremendous job with the same in a franchise. 0:18:53.880 --> 0:18:56.639 Can you just describe the opportunities now that exist in 0:18:56.680 --> 0:18:58.479 the sports world at a time when some people are 0:18:58.480 --> 0:19:00.200 pushing back against funny wish. 0:19:01.280 --> 0:19:04.560 Well, no question valuations or record levels. Why is that 0:19:04.680 --> 0:19:08.760 is because sports is now the only thing left that 0:19:08.840 --> 0:19:10.720 aggregates huge audiences globally. 0:19:11.359 --> 0:19:13.440 And there's been a technology change where. 0:19:13.640 --> 0:19:17.080 When I lived in Holland and in the nineteen seventies, 0:19:17.840 --> 0:19:20.359 you would only get sports scores three days later from 0:19:20.400 --> 0:19:22.879 an international tribune and you could watch anything. Now you 0:19:22.880 --> 0:19:26.399