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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: We start strong with a conversation for Global Wall Street

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Speaker 2: out on LinkedIn. Wayy of Blackrock is a massive value

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Speaker 2: add she publishes at a regular rate with wonderful informative charts. Whaley,

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Speaker 2: let's dive right into that. And you have something that

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Speaker 2: pushes against all of the zeitgeist. You say there is

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Speaker 2: no rising tide lifting all boats. That's sacrilege.

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Speaker 3: Discuss well, if we think about the peeriod after global

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Speaker 3: finance crisis, with the injection of Emmas pool of liquidity,

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Speaker 3: companies that didn't have good fundamentals were rallying alongside companies

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Speaker 3: with very good fundamentals. And this is what I meant

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Speaker 3: by rising tight lifting all boats. But we're now in

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Speaker 3: an environment of greater dispersion. We're in an environment of

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Speaker 3: secular transformations like AI that is likely going to imply

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Speaker 3: winners take hold. So this is an environment where being

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Speaker 3: active and selective pays off more. And this is not

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Speaker 3: a hypothesis. Our study actually shows that in a period

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Speaker 3: coming out of the pandemic, actually the additional alpha generated

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Speaker 3: by good active managers is greater compared to the peerage

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Speaker 3: when rising tight was lifting all boats.

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Speaker 2: Adam Parker a week ago in Barons I Thank You

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Speaker 2: Parnassis Funds had a paragraph on the value of gross

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Speaker 2: margin analysis. Jacob sanashin yesterday at Barons recapitulates that with

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Speaker 2: a lot of Adam Parker research and the income statement,

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Speaker 2: those successful companies that are rising, what does their gross

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Speaker 2: margin or other margins down the income statement look like.

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Speaker 3: Honestly, it's incredible that margins in the US have held

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Speaker 3: up so while they are testing a recent year high,

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Speaker 3: and it's notably higher than the equivalent in Europe in Japan,

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Speaker 3: for example, So there really are something exceptional about US companies.

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Speaker 3: But again to the point of greater dispersion and differentiation,

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Speaker 3: one would note, digging under the hoods that actually a

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Speaker 3: lot of the margin staying elevated and pushing higher has

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Speaker 3: been driven by names Magnificent seven that are growing their

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Speaker 3: revenues without actually hiring a lot more people. On the

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Speaker 3: other hand, you have companies smaller PABs. For example, they

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Speaker 3: are more vulnerable to rates settling at a higher level

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Speaker 3: compared to before. They are more vulnerable to having to

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Speaker 3: refinance their dad they don't have immense amount of cash

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Speaker 3: sitting on their balance you. So again, this paints the

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Speaker 3: picture of being active and selected.

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Speaker 4: Well, I must confess I am a huge fan of

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Speaker 4: yours on social media. I need to know where you

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Speaker 4: bought that slice of pizza the other day. But you

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Speaker 4: had a post yesterday pointing out equity manager Alpha and

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Speaker 4: how it's improving. I'd love for you to expand on that.

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Speaker 4: I'd love for you to talk about active risk taking

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Speaker 4: and how active risk takers are outperforming in the current environment.

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Speaker 3: Well, so that's really important. Then, this is why we

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Speaker 3: think that this is really the golden age for being

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Speaker 3: active right now. This is an environment of dispersion. You

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Speaker 3: look at company is large cap versus small cap, tech

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Speaker 3: versus consumers. Their margins, their earnest momentum very very different.

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Speaker 3: I only talked about them on the level of sectors.

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Speaker 3: Dispersion is even greater with in sectors along on the

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Speaker 3: level of single names as well. So our study shows

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Speaker 3: that for good managers they're being paid more for taking

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Speaker 3: active risk and for median managers if they keep static

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Speaker 3: macro factor exposure. It would have been okay in an

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Speaker 3: environment where rising tight was lifting all boat coming out

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Speaker 3: of global financial crisis. But now if they have static

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Speaker 3: exposure to macro factors that are becoming less friendly, that

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Speaker 3: actually becomes more punitive in this environment. So one can

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Speaker 3: no longer get away with sitting on kind of macro

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Speaker 3: factors and let them drift. We've got to be a

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Speaker 3: lot more dynamic and active in our management style.

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Speaker 4: Where you alluded to the data center build out, right,

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Speaker 4: I mean the world of private markets in funding infrastructure

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Speaker 4: and the AI build out and all that good stuff.

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Speaker 4: And I just you know, I'm looking at some of

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Speaker 4: the you know, high frequency cappecks indicators here in twenty

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Speaker 4: twenty five, and it looks like things are pouncing back.

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Speaker 4: It's unlike what I would have thought with all the

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Speaker 4: uncertainty regarding tariffs in trade. You wouldn't think that corporates

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Speaker 4: that the c suitely spending money in this way. What

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Speaker 4: are your thoughts? What are you guys seeing over black Rock?

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Speaker 3: The tariffs uncertainty is a timed uncertainty things are happening

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Speaker 3: very very quickly, but I think the expectation is that

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Speaker 3: we're going to see Lending Spot in the coming weeks, months,

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Speaker 3: and quarters. Whereas the AI competition is a multi decade

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Speaker 3: competition that goes beyond the cyclic code, apps and flows,

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Speaker 3: and I think companies are viewing that as existential competition.

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Speaker 3: You either spend and stay on the table or you

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Speaker 3: could be at did the competition right, which is why

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Speaker 3: we see Kapecks coming and continuing to be very strong,

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Speaker 3: which is why we also think that there's a lot

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Speaker 3: more to go in.

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Speaker 4: The AI across the nation.

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Speaker 2: Wayey with Black record, as we continue with Wayley here

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Speaker 2: with Green and the screen ever so slight the vics

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Speaker 2: nicely under seventeen sixteen point sixty three. Damien said he

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Speaker 2: wouldn't show up unless I quoted yen one forty eight

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Speaker 2: fifty one. Yeah, and really a surprise can get out

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Speaker 2: to a weaker one fifty. We welcome all of you

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Speaker 2: on Serious XM Channel one twenty one in Washington, Boston,

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Speaker 2: in New York in a special good Morning out on YouTube.

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Speaker 2: It's our new distribution, humbled by the success of the

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Speaker 2: YouTube product, including Tracy Alloway and Joe Wisenthal there as well. Wait,

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Speaker 2: if we define exuberance is something to do with Alan

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Speaker 2: Greenspan or something to do with Robert Schuller at Yale,

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Speaker 2: how does Wayley measure the exuberance the equity market this

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Speaker 2: summer of twenty twenty five.

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Speaker 3: I think by historical standards, if you compare to average

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Speaker 3: multiples right now, multiples look stretched. But I think that

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Speaker 3: is a big kind of statement to compare to historical

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Speaker 3: averages because we're not in an environment where things are

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Speaker 3: expected to revert back to historical mean. We're in an

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Speaker 3: environment of transformations, right, So what is the benchmark? What

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Speaker 3: is the fair value? I think all of them needs

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Speaker 3: to be scrutinized a lot more in this environment, I

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Speaker 3: would observe whilst versus historical long term You know, you

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Speaker 3: look at Sharpe for example, they look stretched. You look

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Speaker 3: at Magnificent seven, they're forward. Ky's actually right now in

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Speaker 3: the middle that they are thirty times a pe right now,

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Speaker 3: in the middle of the range since the launch of CHGBT, Right, So,

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Speaker 3: so I think really scrutinizing the level against which we

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Speaker 3: make our comparative statement is the key. I would also say,

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Speaker 3: right now, you know, like we are, we're risk on

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Speaker 3: despite multiples looking a little stretched because technical and positioning

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Speaker 3: is not as stretched as compared to the beginning of

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Speaker 3: the year. This has not been a much participated, heavily

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Speaker 3: participated rally, especially by institutional investors from what we're hearing,

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Speaker 3: and alongside the fact that fundamentals are holding up, alongside

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Speaker 3: the fact that you know, we're talking about lots of

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Speaker 3: headlines on tariffs flying around, but considerations for US that

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Speaker 3: sustainability should take out some of the extreme left tails.

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Speaker 3: So this is why we're risk on despite val Well, wait, I.

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Speaker 4: Mean, look at US equity earning season, right despite all

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Speaker 4: this ongoing trade uncertainty, they were surprisingly good in the

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Speaker 4: first quarter. They're looking rather rosi here in the beginning

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Speaker 4: of two Q and sorry to borrow baseball now during

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Speaker 4: All Star break, But you know, what inning are we

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Speaker 4: in exactly? I mean, most argue that we're late in

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Speaker 4: the business cycle, but many still feel that, you know,

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Speaker 4: the US exceptionalism narrative is merely taking a modest breather.

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Speaker 4: What are your thoughts there?

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Speaker 3: How many innings are there in the analogy all the time.

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Speaker 2: This is the first guest, we've ever had great point,

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Speaker 2: great question this afternoon. I mean Carpedo and you know,

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Speaker 2: Rick Reader, when they want to hear from you on

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Speaker 2: the equity markets at two pm, you just say, I'm sorry, Rick,

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Speaker 2: I've got to watch Red Sox Cubs for nine innings.

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Speaker 2: Damian continue here.

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Speaker 4: I mean just in terms of the business cycle, and

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Speaker 4: again it goes back to your point on CAPEX, which

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Speaker 4: is so important. I mean, like put you rightly point out.

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Speaker 4: I think the tech sector the mag seven we're responsible

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Speaker 4: for eighty percent, upwards of eighty percent of all CAPECS

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Speaker 4: spending twenty twenty four. Somebody told me that I don't know,

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Speaker 4: but you know, cap X is what we should be

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Speaker 4: focusing on here, and it seems like in the US

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Speaker 4: at least it's okay. I mean, you seeing the same thing.

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Speaker 3: I agree with you hundred percent. Corpex is what we

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Speaker 3: should be focusing on, and also companies tech budget upgrades.

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Speaker 3: You know, these are the things that we pay attention

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Speaker 3: to understand how much more there is to go in

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Speaker 3: the AI build out phase. But specifically back to earnings,

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Speaker 3: like you said, Q one was very good. Q two

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Speaker 3: expectation was for SMP to row about five percent six

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Speaker 3: percent on a year on year basis. That's not hard

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Speaker 3: to beat. I am pretty confident that we will beat that.

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Speaker 3: You know, like it's mostly driven by tech, of course,

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Speaker 3: but we're in the early innings of the tech AI supersycho,

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Speaker 3: so we definitely think that there is there is more

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Speaker 3: to go. Yeah, so we continue to be overweight driven

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Speaker 3: by our conviction in tech.

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Speaker 2: Well, well, how do you rationalize okay ai tech I

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Speaker 2: get it even three m now with a nice recovery

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Speaker 2: after a decade of mediocrity. How do you rationalize a

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Speaker 2: thirty time times plus multiple for a large grocery store,

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Speaker 2: big box store. That man has a grocery bolt and

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Speaker 2: called Walmart. How do you it's grown single digit it

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Speaker 2: makes nice even How does that thing get priced out

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Speaker 2: it over thirty times earnings?

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Speaker 3: I can comment on single names, as you know, Tom,

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Speaker 3: but I would say that this is why we need

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Speaker 3: to be selected right. There are companies that we legitimately

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Speaker 3: can see a case for AI boosting productivity profits, and

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Speaker 3: there are companies where such estimate is a bit stretched

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Speaker 3: and hard to justify, which is why, even though we

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Speaker 3: have the broader overweight within that we focus on companies

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Speaker 3: that are likely going to benefit from a greater AI adoption,

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Speaker 3: boosting productivity, including healthcare, including financials. But of course tag

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Speaker 3: consumer discussionary and so and so.

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Speaker 2: How does Wley with Chris Waller coming up at forty minutes,

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Speaker 2: how does Wayley translate this FED debate with the President?

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Speaker 3: Yeah, I think the bigger micro picture is that we're

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Speaker 3: in an environment of high for longer because of inflationary pressure,

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Speaker 3: in part thinking about kind of the tariffs new regime,

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Speaker 3: but in part because of the environment shaped by supply,

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Speaker 3: including labor supply shortages, right, so thinking about aging population

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Speaker 3: and persistent wage So that being the case, persistent inflationary

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Speaker 3: pressure should mean rates would settle at a higher level

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Speaker 3: compare to before. But it means that income is back,

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Speaker 3: you know, for the first time in a long time.

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Speaker 3: Eighty percent of global fixed income is yielding four percent

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Speaker 3: and higher. It will be very different two before. This

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Speaker 3: is an environment for income.

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Speaker 2: Beautifully described the ambiguity here of a sustained higher rate.

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Speaker 2: Most people go OMG, the gloom of it all, and

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Speaker 2: others that think of John Riding formerly at bear Stearns

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Speaker 2: now Bring and Wayley at Blackrock saying there's an opportunity

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Speaker 2: there for the coupon and the paths forward. Wayley is

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Speaker 2: with Blackrock.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern. Listen on

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Speaker 2: There are people that talk and there are people that do.

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Speaker 2: And out in Chicago, Ta Konig is one of the

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Speaker 2: people at Monroe Capitol does these huge commitment to Northwestern Medical,

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Speaker 2: of Northwestern University and all of that, and of course

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Speaker 2: his work is academics, i should say, in Indiana University,

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Speaker 2: a bit ago and Damian. Why don't you bring in

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Speaker 2: Ted because this is sort of in the wheelhouse of

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Speaker 2: this expansion of alternative investments.

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Speaker 4: Yeah, Tad, will you and the team at Mono Capitol

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Speaker 4: focus on middle market middle market credit, really private credit

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Speaker 4: to be serious? But here, you know, we know the

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Speaker 4: private credit markets are consolidating, and we were just talking

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Speaker 4: about the private equity space. My goodness, fundraising is plunged.

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Speaker 4: And so my question for you is what are your

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Speaker 4: thoughts on the emergence of all these continuation vehicles? Colo

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Speaker 4: demand this week MNA activity. I mean, is the market healthy.

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Speaker 5: Yeah, the market's healthy, Damien. But we're seeing today it's

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Speaker 5: a unique phenomenon. We came off of two or three

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Speaker 5: really solid years of M and A and private equity.

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Speaker 5: Dry powder today sits in about a one point seven

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Speaker 5: trillion dollars. It's the highest it's ever been. This is

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Speaker 5: money on the sidelines.

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Speaker 4: We find all work and.

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Speaker 5: Because of the challenges let's say in the last year

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Speaker 5: or so with prognosticating tariffs and regulation, inflation, interest rates,

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Speaker 5: there's a lot of PE firms that are sitting on

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Speaker 5: companies and not able to sell because the market's not clear.

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Speaker 5: And when that happens, the system gets backed up, and

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Speaker 5: what we see is a proliferation of continuation vehicles. We

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Speaker 5: see second can down the roads and you know the

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Speaker 5: challenges you're seeing kind of the results of that right

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Speaker 5: now when you see these endowments selling private equity portfolios.

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Speaker 5: We've never seen a year where there's been more private

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Speaker 5: equity sales of portfolios into the marketplace. Secondaries.

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Speaker 4: Yeah, well, I mean we had way lea of Blackrock

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Speaker 4: on earlier, and we had this wonderful discussion about CAPEX

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Speaker 4: here in the US, and we know that it's the

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Speaker 4: big tech, the mag seven that's driving a lot of

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Speaker 4: the data center build out. But what's going on in

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Speaker 4: the middle markets in middle market America and your wheelhouse?

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Speaker 4: You know, what are the proceeds being used for? Is

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Speaker 4: it for you know, recaps in restructuring or is it

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Speaker 4: being put to use?

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Speaker 5: Yeah, so it's interesting. We've got about five hundred and

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Speaker 5: twenty companies in our portfolio. We're the largest middle market

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Speaker 5: finance company in the country.

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Speaker 2: So you like the new Chemical Bank, that's really what

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Speaker 2: we're talking about.

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Speaker 5: Yeah, you know, the key is is that all the

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Speaker 5: financing has come out of the regulated banking system for

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Speaker 5: buyouts and it's going into the alternative assets system. And

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Speaker 5: we've been the beneficiary of that because that's been our focus.

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Speaker 5: Most of our competitors have kind of morphed up market

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Speaker 5: and done larger deals. We've kind of stayed in our wheelhouse.

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Speaker 2: Do you compete with Jamie Diamond?

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Speaker 5: No, Jamie's a good guy. He's never going to be

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Speaker 5: in our business and we're never going to be in

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Speaker 5: his business.

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Speaker 4: He's trying to be in your business. I mean, let

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Speaker 4: me ask you this though, I mean, there has been

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Speaker 4: a lot of talk about how you know, private credit

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Speaker 4: really is, you know, eating Wall Street's cooking here. I mean,

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Speaker 4: is there any truth to that? I mean, is there

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Speaker 4: any way that the big banks can crack that nut?

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Speaker 5: You know? It's interesting. There's two ways banks work. One

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Speaker 5: is there either in a distribution business or they're in

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Speaker 5: a storage business. They make a hell of a lot

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Speaker 5: more money in the distribution business than they do in

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Speaker 5: the storage business. So what they want to do is

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Speaker 5: take the deals, pack the deals, distribute the deals, and

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Speaker 5: make fees. It doesn't require regulatory capital, it doesn't require

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Speaker 5: risk capital, and it generates significant earnings.

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Speaker 2: Surveillance Audibo Damien sas a fight up about alternative investment

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Speaker 2: Monroe CAPITALO, I don't care. I have the golf stream

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Speaker 2: after the show and I'm going out through a hair

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Speaker 2: and for the first time in ninety years, the Boston

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Speaker 2: Red Sox play at Ridley Field. And what I want

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Speaker 2: to know, Ted, is do I I'm looking at stub

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Speaker 2: ub right now. You gotta help me. Do I go

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Speaker 2: with section eighteen just to the left for twelve hundred bucks,

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Speaker 2: two seats. Missus Keane says she's got to go or

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Speaker 2: do I pump it up for twenty six hundred dollars.

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Speaker 2: Excuse me to check that twenty eight hundred dollars for

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Speaker 2: where you sit Section AA nineteen. Which is it? I

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Speaker 2: tell you what you do?

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Speaker 5: You call me and I'll call my pale Tom Ricketts,

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Speaker 5: and I'll put you next to the double game.

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Speaker 2: Say good morning to mister Ricketts. I have goosebumps. I'm

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Speaker 2: going home, folks. I have a younger children birthday party.

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Speaker 2: I'm told I have grandchildren haircuts, and I said it

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Speaker 2: may be divorced. But Red Sox cubs at ridley Field,

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Speaker 2: I have at least I got ducky bumps. Right now,

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Speaker 2: Bill Murray, I'm sure will be there. This is like

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Speaker 2: a huge deal. Would you like to ask a question?

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Speaker 4: Look at your eye back on the ball here. I

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Speaker 4: mean what I need to know here is will the

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Speaker 4: one big beautiful bill be good for middle market America

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Speaker 4: and for your space?

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Speaker 5: You know it's there's two ways to look at it.

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Speaker 5: I think anything that provides certainty is good, and we

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Speaker 5: finally have some certainty on tax policy. The challenge that

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Speaker 5: Tom was referring to is middle market companies based decisions

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Speaker 5: on capex and growth and those are five ten year decisions.

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Speaker 5: If you're a manager, private equity firm, an owner, a

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Speaker 5: family business, second third, fourth generation business, significant business, you

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Speaker 5: have to make decisions based on projected cash flows and

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Speaker 5: payback periods. If you don't have certainty on what that's

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Speaker 5: going to look like, it's very hard to make those decisions.

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Speaker 5: That's why over the last six months nine months, we

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Speaker 5: haven't seen a lot of big capex. We'd put about

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Speaker 5: ten billion dollars a year into the ground in middle

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Speaker 5: market companies. This year we did about four and a

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Speaker 5: half billion in the first six months of the year,

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Speaker 5: which we're on target. But what's interesting that this year

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Speaker 5: eighty percent of our deals came out of our portfolio

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Speaker 5: add ons, tuck ins, and dividend recaps, dividend transactions, not

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Speaker 5: new platform buys, not new M and A, but dividends

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Speaker 5: to sponsors that wanted to take money out of companies

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Speaker 5: to create value to their LPs because their alps are

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Speaker 5: clamoring for return of capital.

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Speaker 4: Yeah, so, I mean, let me ask you this, I mean,

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Speaker 4: what typpy yields. I mean, I know it's very different.

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Speaker 4: I don't want to get into the weeds here, but

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Speaker 4: I'm thinking mid to high double digit yields in your space?

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Speaker 4: I mean, is that is that something that you see often?

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Speaker 5: No, I mean we're We've done double digit yields to

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Speaker 5: our LP investors for twenty six years now, so think

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Speaker 5: ten to twelve percent. That's what our LPs want. And

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Speaker 5: if you're a pension fund or you're an insurance company,

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Speaker 5: that's as good as you can get.

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Speaker 2: Should Lisa have private credit in her IRA?

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Speaker 5: Great question, Great question. Lisa should have private credit in

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Speaker 5: her portfolio. The question is whether it's in her IRA

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Speaker 5: or not. Lisa can do it because she's more sophisticated

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Speaker 5: than ninety nine percent of the population, but the rest

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Speaker 5: of the population doesn't necessarily understand this.

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Speaker 2: Are they going to get a second rate piece from

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Speaker 2: the private credit vendor because fancy guys like you?

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Speaker 5: Great question, Great question. I'm concerned that the acid aggregators

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Speaker 5: will start creating detailed products only, and that's a challenge

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Speaker 5: and something back on the stuff.

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Speaker 2: In there, come back. I'll see in Chicago and your

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Speaker 2: Red Sox cubs here really history being made right now,

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Speaker 2: Tech County. Thank you so much for running your capital.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on Apple Corplay and Android

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00:20:46,320 --> 00:20:49,359
Speaker 1: Auto with the Bloomberg Business app. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station.

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Speaker 1: Just say Alexa, play Bloomberg eleven thirty.

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Speaker 2: We get lucky. That's all there is at Chewett Brandon o' lindsey,

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Speaker 2: and you're on the airlines are a huge out of

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Speaker 2: Georgia tech. I'm incredible vista on transportation in America. I

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Speaker 2: got to start with two things. Let me start with

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Speaker 2: the railroads. I got a two hundred billion dollar railroad.

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Speaker 2: They're only doing this because Trump's president, right.

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Speaker 6: I mean I think so, because I've been doing this

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Speaker 6: for twenty years, and for twenty years I've heard a

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Speaker 6: transcontinental merger is just a no go because we tried

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Speaker 6: this one.

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Speaker 2: If they tried it, well, that's right, we tried.

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Speaker 6: Canadian National was the last one to try to buy

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Speaker 6: Burlington back in the year two thousand and It's spurred

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Speaker 6: enhanced M and A regulations now. But I think the

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Speaker 6: CEOs look at this and say, look, industrial productions has

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Speaker 6: been flat for three years. We've kind of gotten all

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Speaker 6: the costs out with precision scheduled railroad. And what's next, Well,

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Speaker 6: it's merger.

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Speaker 2: Do you think this will go through? Brian Olenski, what

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Speaker 2: do you think?

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Speaker 6: I think the odds are possible here. Look the way

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Speaker 6: we do things today with these regional networks is Union Pacific.

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Speaker 6: We'll have traffic going from La maybe to Atlanta. Yeah,

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Speaker 6: they'll push it to Cho to connect it to Norfolk

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Speaker 6: Southern that will then take it down to Atlanta. And

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Speaker 6: that's in both carriers' interests because they're maximizing revenue and profitability.

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Speaker 6: If now you own an East West rail line, you'd say,

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Speaker 6: I'll just flow that right through Saint Louis or Memphis.

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Speaker 6: So I think there's a lot of potential efficiency here

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Speaker 6: and actually economic benefit for the country.

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Speaker 2: Hey, fabulous, love it. Thank you so much for that.

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Speaker 2: I have a personal question. We rarely do we have

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Speaker 2: someone come in that actually flies an airplane. For all

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Speaker 2: of our listeners and viewers with this horrific twenty twenty five,

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Speaker 2: they feel safe in the American airspace now, the commercial

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Speaker 2: American airspace.

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Speaker 6: Oh fully. And I am a commercial pilot and I

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Speaker 6: understand the airspace system quite well. There's so much redundancy.

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Speaker 6: I mean, I know, the media attention on Newark was

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Speaker 6: really bad, but the reality was there's dual runways there.

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Speaker 6: They had to close a runway for repairs and it

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Speaker 6: caused a backup.

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Speaker 2: Can you get me a seat at the United Club

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Speaker 2: at Newark because every time I go, it's Pas working there.

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Speaker 2: Brandon Olinski with us, with Barclays, Damien jump in here

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Speaker 2: with airlines questions.

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Speaker 4: So yes, but Brandon, you know, it just so happened.

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Speaker 4: Last week I got to fly down to Dallas Fort Worth,

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Speaker 4: you know, for a family event. It was unfortunately passing family,

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Speaker 4: but nevertheless I sat on the tarmac for three hours.

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Speaker 4: Three hours at Dallas Fort Worth. This is the hub

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Speaker 4: for American Airlines right because there was a lightning storm

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Speaker 4: that hung over the air Have you ever heard of

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Speaker 4: such a thing like that? The entire airport closes down,

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Speaker 4: They leave you on the tarmac for three hours, completely

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Speaker 4: blew up by evening plans, everything about it. I mean,

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Speaker 4: how does an airport manage itself like that?

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Speaker 6: Well, the major hub we are talking about American and

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Speaker 6: their operational performance does lag well? No, I like Robert

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Speaker 6: Iman team down there in Dallas, and for sure they're

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Speaker 6: trying hard and Roberts brought a lot of operational focus

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Speaker 6: this company. But even for Delta United, this happens when

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Speaker 6: a thunderstorm shots started the field.

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Speaker 4: You can't get your ground American airline issue. It's the airport,

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Speaker 4: right because there's.

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Speaker 6: Only so many gates and there's incoming flights, so you

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Speaker 6: can get stuck.

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Speaker 4: But Dallas love Field, Now I'm aplying into love Field.

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Speaker 2: You most hate going to social events where people just

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Speaker 2: corner you and you know, give you all the complaints,

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Speaker 2: like young Sassaur here, what's your single best buy? If

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Speaker 2: you're hearing Scott Kirby this week, United, is your single

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Speaker 2: best buy in Latin America? Is it Air of France?

435
00:24:17,720 --> 00:24:19,000
Speaker 2: Is it something in the US?

436
00:24:19,359 --> 00:24:19,760
Speaker 3: Brandon?

437
00:24:19,800 --> 00:24:20,560
Speaker 2: Where is it? Now?

438
00:24:20,560 --> 00:24:23,280
Speaker 6: I'm a buyer, mister Kirby. I mean, he's got quite

439
00:24:23,320 --> 00:24:24,960
Speaker 6: a culture going in Chicago.

440
00:24:25,240 --> 00:24:27,720
Speaker 2: He's a pilot. You're biased because he's a pilot.

441
00:24:28,320 --> 00:24:31,800
Speaker 6: Uh, He's he's got his point of view for sure,

442
00:24:31,840 --> 00:24:33,960
Speaker 6: and we don't always see. I had a lot of things,

443
00:24:34,000 --> 00:24:37,320
Speaker 6: but I really like the environment that he's created at

444
00:24:37,359 --> 00:24:40,280
Speaker 6: that company, and everyone's rowing in the same direction, and

445
00:24:40,320 --> 00:24:43,359
Speaker 6: you just see you rarely see these cultures that really

446
00:24:43,440 --> 00:24:46,280
Speaker 6: mesh every company in CEO says they have a culture,

447
00:24:46,320 --> 00:24:48,560
Speaker 6: but I think Scott's really got a lot of good

448
00:24:48,560 --> 00:24:49,159
Speaker 6: things going on.

449
00:24:49,480 --> 00:24:51,000
Speaker 2: If you're all day on this, I got to shift.

450
00:24:51,280 --> 00:24:53,640
Speaker 2: I can't say enough, folks. This is out of Georgia

451
00:24:53,680 --> 00:24:54,600
Speaker 2: tech academics.

452
00:24:54,640 --> 00:24:55,120
Speaker 6: State.

453
00:24:55,480 --> 00:24:59,120
Speaker 2: Excuse me, Georgia state, excuse me. This is I might

454
00:24:59,160 --> 00:25:03,359
Speaker 2: stand corrected. This is incredibly important. It's not just about

455
00:25:03,400 --> 00:25:10,199
Speaker 2: a flight out of DFW ORWR, FedEx, Amazon and moving

456
00:25:10,359 --> 00:25:13,560
Speaker 2: boxes around in America. Where are we in three or

457
00:25:13,600 --> 00:25:14,240
Speaker 2: five years.

458
00:25:14,480 --> 00:25:16,320
Speaker 6: Oh, this is a great question. We need to bring

459
00:25:16,480 --> 00:25:20,359
Speaker 6: UPS into that equation too. And I don't want to

460
00:25:20,359 --> 00:25:25,440
Speaker 6: be negative on UPS, but there's just immovable economic forces

461
00:25:25,440 --> 00:25:27,960
Speaker 6: at work here. What's happened in the last twenty years

462
00:25:28,000 --> 00:25:32,479
Speaker 6: is we've seen FedEx Ground developed this independent contractor network

463
00:25:32,520 --> 00:25:36,480
Speaker 6: across the country and it's grown significantly, and Amazon effectively

464
00:25:36,520 --> 00:25:38,520
Speaker 6: replicated that five or six years ago. So you have

465
00:25:38,600 --> 00:25:43,560
Speaker 6: these two very large, low cost, high service networks, and effectively,

466
00:25:43,600 --> 00:25:47,879
Speaker 6: here's UPS that's fully unionized, fully team start contracted, and

467
00:25:47,880 --> 00:25:50,480
Speaker 6: they're really struggling because they're the high cost provider with

468
00:25:50,640 --> 00:25:54,320
Speaker 6: incrementally more challenging service. So the way we see this

469
00:25:54,640 --> 00:25:56,120
Speaker 6: and we saw this play out in the less than

470
00:25:56,200 --> 00:25:59,960
Speaker 6: truckload sector because there was a big competitor there, Yellow Roadway,

471
00:26:00,119 --> 00:26:02,480
Speaker 6: which was unionized, and Old Dominion, which is one of

472
00:26:02,480 --> 00:26:05,760
Speaker 6: the highest valued thoughts in my sectors, really took a

473
00:26:05,760 --> 00:26:08,200
Speaker 6: lot of share and ultimately Yellow went out of business.

474
00:26:08,240 --> 00:26:12,080
Speaker 6: So I'm really worried that this uncompetitive dynamic where UPS

475
00:26:12,080 --> 00:26:15,000
Speaker 6: has a contract that the others don't. We see parcel

476
00:26:15,040 --> 00:26:17,960
Speaker 6: shift going towards Amazon and FedEx long term.

477
00:26:18,040 --> 00:26:20,200
Speaker 4: So what's the plan on UPS. It's a dividend play, right,

478
00:26:20,560 --> 00:26:21,480
Speaker 4: I mean, what all is there.

479
00:26:21,960 --> 00:26:23,959
Speaker 6: I think they're yielding six or six and a half

480
00:26:24,000 --> 00:26:26,119
Speaker 6: percent right now, and I don't think they're going to

481
00:26:26,240 --> 00:26:29,880
Speaker 6: cut the dividend anytime soon. But if you listen to UPS,

482
00:26:30,160 --> 00:26:33,880
Speaker 6: Amazon is a twenty percent customer in their domestic US network,

483
00:26:34,160 --> 00:26:36,760
Speaker 6: and Amazon's shrinking that by half in the next two years.

484
00:26:36,760 --> 00:26:38,639
Speaker 6: It's going to really hit in the back half of

485
00:26:38,640 --> 00:26:40,960
Speaker 6: this year, and UPS has come out and said, look,

486
00:26:40,960 --> 00:26:43,520
Speaker 6: we need to shrink our domestic network by ten percent.

487
00:26:43,880 --> 00:26:46,600
Speaker 6: That's going to be really challenging in these very time

488
00:26:46,640 --> 00:26:50,360
Speaker 6: definite pickup and delivery networks. So we're of the view

489
00:26:50,400 --> 00:26:53,200
Speaker 6: and we tell investors all the time the dividend looks juicy,

490
00:26:53,240 --> 00:26:55,840
Speaker 6: but ultimately, if you're shrinking your network, you gotta think.

491
00:26:57,280 --> 00:26:57,960
Speaker 2: A level four.

492
00:26:58,160 --> 00:27:00,600
Speaker 4: You know, I'd love to stick with this talk on

493
00:27:00,680 --> 00:27:02,639
Speaker 4: logistics in the US here, but I gotta go back

494
00:27:02,640 --> 00:27:04,359
Speaker 4: to airlineses time. I mean, what you saw on the

495
00:27:04,440 --> 00:27:07,520
Speaker 4: United Jet Blue partnership, this Blue Sky partnership, how's that

496
00:27:07,520 --> 00:27:09,520
Speaker 4: going to impact things? And more importantly, what are your

497
00:27:09,520 --> 00:27:11,400
Speaker 4: thoughts on the Delta one club. I love it there,

498
00:27:11,440 --> 00:27:12,359
Speaker 4: It's so awesome.

499
00:27:12,480 --> 00:27:16,199
Speaker 6: Oh well, Delta one is nice if you haven't tried it,

500
00:27:16,480 --> 00:27:17,200
Speaker 6: especially at JA.

501
00:27:17,480 --> 00:27:19,600
Speaker 4: Recommend Is it working? Is it feeding the bottom line there?

502
00:27:19,640 --> 00:27:21,520
Speaker 6: I mean you can find a seat there by the way,

503
00:27:21,600 --> 00:27:25,560
Speaker 6: for sure. I think it's more encompassing. I mean, United

504
00:27:25,640 --> 00:27:27,600
Speaker 6: is pursuing the same strategy. They have their ployers or

505
00:27:27,760 --> 00:27:30,639
Speaker 6: lounges as well. But it's clear, you know, Delta has

506
00:27:30,640 --> 00:27:33,600
Speaker 6: been on this journey effectively since they as exited bankruptcy

507
00:27:33,600 --> 00:27:35,960
Speaker 6: in two thousand and seven merge with Northwest. They said,

508
00:27:35,960 --> 00:27:38,560
Speaker 6: we are not going to be just a commodity anymore.

509
00:27:38,560 --> 00:27:41,000
Speaker 6: We're going to be differentiated and we're going to offer

510
00:27:41,000 --> 00:27:42,240
Speaker 6: you things. Do you want to pay less? Do you

511
00:27:42,280 --> 00:27:44,639
Speaker 6: want to pay more? And we'll give you a differentiated experience.

512
00:27:45,000 --> 00:27:47,240
Speaker 6: And now at the very high end they're really trying

513
00:27:47,320 --> 00:27:48,159
Speaker 6: to it.

514
00:27:49,480 --> 00:27:52,400
Speaker 2: You're the high end, Damian A minute, I got one

515
00:27:52,440 --> 00:27:56,440
Speaker 2: minute left. Is there a partition, as Kirby outlined, between

516
00:27:56,560 --> 00:28:01,520
Speaker 2: international travel, Transatlantic and the Pacific the romance of international

517
00:28:01,880 --> 00:28:05,440
Speaker 2: and a dog eat dog domestic travel for twenty twenty.

518
00:28:05,200 --> 00:28:08,080
Speaker 6: Six, I think International is going to continue to pay

519
00:28:08,119 --> 00:28:11,000
Speaker 6: dividends for Delta United to some extent American as well,

520
00:28:11,840 --> 00:28:14,240
Speaker 6: just because we shrunk the wide body fleet. These are

521
00:28:14,280 --> 00:28:17,840
Speaker 6: the dual ale aircraft. To confly, Yeah, we got rid

522
00:28:17,880 --> 00:28:20,320
Speaker 6: of them during the pandemic. It's a five percent smaller

523
00:28:20,359 --> 00:28:23,960
Speaker 6: fleet today and everyone's going to grease France Spain in

524
00:28:24,000 --> 00:28:26,760
Speaker 6: the summertime. So this is going to keep paying dividends

525
00:28:26,760 --> 00:28:27,440
Speaker 6: for them for sure.

526
00:28:27,480 --> 00:28:29,639
Speaker 4: And are you seeing visitor numbers, tourists arrivals, all of

527
00:28:29,640 --> 00:28:31,320
Speaker 4: that is going up from the US.

528
00:28:31,160 --> 00:28:35,000
Speaker 6: Brought well, remember that the dollar was strong, so when

529
00:28:35,040 --> 00:28:37,119
Speaker 6: we're like European visitors are down, it was just a

530
00:28:37,119 --> 00:28:39,200
Speaker 6: function of FX. I know everyone want to say they

531
00:28:39,240 --> 00:28:42,280
Speaker 6: hate Trump whatever, but the reality was it's a simple

532
00:28:42,400 --> 00:28:44,680
Speaker 6: FX equation when when the dollar is weak and then

533
00:28:44,680 --> 00:28:45,520
Speaker 6: all of a sudden Europe.

534
00:28:46,160 --> 00:28:48,959
Speaker 4: Yeah, exactly, Tom. You love when Europeans come to New

535
00:28:49,000 --> 00:28:51,640
Speaker 4: York City, don't you? Especially real.

536
00:28:51,720 --> 00:28:55,479
Speaker 2: Yeah, it's like a huge, huge deal, and it's like,

537
00:28:55,840 --> 00:28:57,960
Speaker 2: off the top of my head, folks, it's tourism. You're

538
00:28:58,040 --> 00:29:01,120
Speaker 2: seventeen percent of the to me. Can you Are you

539
00:29:01,160 --> 00:29:03,360
Speaker 2: based in New York? Are you based like in Dallas

540
00:29:03,440 --> 00:29:03,960
Speaker 2: or Georgia?

541
00:29:04,480 --> 00:29:06,720
Speaker 6: No, I'm based right here.

542
00:29:07,480 --> 00:29:14,360
Speaker 2: Thank you so much. Brandonaglensky with Berkley's there.

543
00:29:15,720 --> 00:29:19,600
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

544
00:29:19,640 --> 00:29:22,680
Speaker 1: starting at seven am Eastern on Apple, Corplay and Android

545
00:29:22,680 --> 00:29:25,680
Speaker 1: Auto with the Bloomberg Business app. You can also watch

546
00:29:25,760 --> 00:29:28,720
Speaker 1: us live every weekday on YouTube and always on the

547
00:29:28,760 --> 00:29:29,840
Speaker 1: Bloomberg terminal.

548
00:29:30,400 --> 00:29:34,400
Speaker 2: Roy Chaupers Live this Anna Harvard and Wharton. Yes, the

549
00:29:34,440 --> 00:29:39,360
Speaker 2: former director of the Consumer Financial Protection Bureau. He was

550
00:29:39,360 --> 00:29:42,600
Speaker 2: appointed actually by mister Trump to the Democrat seat slot

551
00:29:43,280 --> 00:29:47,840
Speaker 2: ages ago, and then it's more associated with Democrat party politics. Roy,

552
00:29:47,920 --> 00:29:51,440
Speaker 2: thank you so much for joining Bloomberg this morning. Is

553
00:29:51,440 --> 00:29:55,000
Speaker 2: it the wild West out there in regulation with a

554
00:29:55,080 --> 00:29:56,280
Speaker 2: Trump administration?

555
00:29:57,240 --> 00:30:00,000
Speaker 7: Well, it's interesting, it's not so much the wild West.

556
00:30:00,160 --> 00:30:06,320
Speaker 7: It's mostly a set of giveaways to very politically connected firms.

557
00:30:06,760 --> 00:30:09,920
Speaker 7: You know, we have seen big giveaways to Wells Fargo

558
00:30:10,040 --> 00:30:12,760
Speaker 7: by the Federal Reserve. We have seen giveaways from the

559
00:30:12,840 --> 00:30:18,520
Speaker 7: CFPB essentially pardoning and pulling out of court allegations of

560
00:30:18,600 --> 00:30:23,000
Speaker 7: pretty serious crime. So I think you're starting to see

561
00:30:23,520 --> 00:30:26,880
Speaker 7: parts of the business community getting a little nervous about

562
00:30:26,880 --> 00:30:30,160
Speaker 7: this because if the rules are applying to some of

563
00:30:30,200 --> 00:30:33,680
Speaker 7: them but not to others, that's a recipe for a

564
00:30:33,720 --> 00:30:35,280
Speaker 7: playing field that's just not lovely.

565
00:30:35,400 --> 00:30:37,680
Speaker 2: I don't want you to pick on one thing. I'm

566
00:30:37,680 --> 00:30:39,920
Speaker 2: going to do it for you. But I guess my

567
00:30:40,000 --> 00:30:42,480
Speaker 2: concern is if there's big things that gets through, like

568
00:30:42,520 --> 00:30:45,840
Speaker 2: the railroad merger of two hundred billion discussed today in Norfolk,

569
00:30:45,840 --> 00:30:49,240
Speaker 2: Southern and Union Pacific. The fact is you're the guy

570
00:30:49,320 --> 00:30:52,840
Speaker 2: that went after Corinthian College. I mean there's some real

571
00:30:52,960 --> 00:30:56,440
Speaker 2: garbage out there. Is that stuff going to slip through

572
00:30:56,520 --> 00:30:59,920
Speaker 2: the cracks because of a more entrepreneurial regulation.

573
00:31:01,040 --> 00:31:02,640
Speaker 4: Well, let's talk about that.

574
00:31:02,760 --> 00:31:09,280
Speaker 7: So Corinthian colleges not only engaged in some serious misconduct

575
00:31:09,320 --> 00:31:13,760
Speaker 7: against students and loading them up with debt for worthless degrees,

576
00:31:14,360 --> 00:31:18,760
Speaker 7: they also were defrauding functionally the federal government out of

577
00:31:18,800 --> 00:31:19,800
Speaker 7: public funds.

578
00:31:20,360 --> 00:31:21,720
Speaker 4: So I do think.

579
00:31:21,480 --> 00:31:25,480
Speaker 7: That in my experience has been that sometimes when there

580
00:31:25,640 --> 00:31:30,760
Speaker 7: is a push for letting animal spirits run wild, a

581
00:31:31,000 --> 00:31:35,760
Speaker 7: cost of that is more funds, public funds being siphoned

582
00:31:35,760 --> 00:31:42,000
Speaker 7: away to bad actors, but also individuals engaged in serious,

583
00:31:42,040 --> 00:31:46,240
Speaker 7: serious destruction of their own financial life, and really no

584
00:31:46,320 --> 00:31:49,600
Speaker 7: one is there to fix it. And I don't know

585
00:31:49,640 --> 00:31:53,160
Speaker 7: if the market system in the US thrived from just

586
00:31:53,280 --> 00:31:57,479
Speaker 7: no rules. In fact, many people would argue our securities laws,

587
00:31:58,280 --> 00:32:01,920
Speaker 7: our patent laws, so much of that was critical for

588
00:32:02,080 --> 00:32:06,880
Speaker 7: really driving a lot of innovation and our government investments

589
00:32:07,160 --> 00:32:11,920
Speaker 7: which helped incubate you know, SIRI, GPS, so many transformative

590
00:32:11,960 --> 00:32:16,240
Speaker 7: technologies from NASA and DoD. If that is all gutted too,

591
00:32:17,040 --> 00:32:19,400
Speaker 7: that means our private sector won't be able to run

592
00:32:19,440 --> 00:32:21,720
Speaker 7: with it. So I'm really not sure that this is

593
00:32:21,840 --> 00:32:24,959
Speaker 7: good for long term growth. To have a sort of

594
00:32:25,240 --> 00:32:30,000
Speaker 7: no regulation, no law enforcement type approach ro we.

595
00:32:30,000 --> 00:32:34,000
Speaker 4: Have to go there. The Consumer Financial Protection Bureau basically

596
00:32:34,160 --> 00:32:37,480
Speaker 4: just had proposed to you know, keep medical debt off

597
00:32:37,520 --> 00:32:39,880
Speaker 4: their credit reports, but that ruling was just overturned by

598
00:32:39,880 --> 00:32:42,880
Speaker 4: the White House by Trump. More than fifteen million people

599
00:32:42,920 --> 00:32:45,320
Speaker 4: have more nearly fifty billion of medical debt on their

600
00:32:45,360 --> 00:32:47,800
Speaker 4: credit reports. Talk to us about the impact of that.

601
00:32:47,960 --> 00:32:49,840
Speaker 4: Is that good for the American household?

602
00:32:50,680 --> 00:32:54,520
Speaker 7: Well, so here's the deal. Lenders really want to know

603
00:32:56,320 --> 00:33:00,680
Speaker 7: what people have borrowed. I think the difference with medical debt,

604
00:33:00,680 --> 00:33:04,480
Speaker 7: and there's been a series of studies that we conducted

605
00:33:04,560 --> 00:33:09,160
Speaker 7: on this, those medical bills are not really predictive of

606
00:33:09,240 --> 00:33:12,880
Speaker 7: whether or not someone will repay an auto loan or

607
00:33:12,920 --> 00:33:16,960
Speaker 7: a mortgage. The circumstances are totally different. And we also

608
00:33:17,200 --> 00:33:20,200
Speaker 7: find that many of the medical bills that are parked

609
00:33:20,280 --> 00:33:25,000
Speaker 7: on credit reports, we're either already paid or we're never

610
00:33:25,160 --> 00:33:27,960
Speaker 7: owed in the first place. I think we've all experienced this,

611
00:33:28,120 --> 00:33:32,760
Speaker 7: that loop between the insurance company and the medical provider.

612
00:33:33,320 --> 00:33:36,760
Speaker 7: So I think this is going to have a negative consequence.

613
00:33:36,800 --> 00:33:40,000
Speaker 7: It's going to lower credit scores for many people. It's

614
00:33:40,080 --> 00:33:43,480
Speaker 7: going to make it tougher for people to really take

615
00:33:43,520 --> 00:33:47,160
Speaker 7: those risks when it comes to borrowing for their first

616
00:33:47,200 --> 00:33:51,400
Speaker 7: home or advancing in their financial life. So again, I

617
00:33:51,480 --> 00:33:54,360
Speaker 7: just think this is a total stop to the medical

618
00:33:54,480 --> 00:33:57,320
Speaker 7: debt collectors, debt buyers, and credit reports.

619
00:33:58,560 --> 00:34:00,600
Speaker 4: Well, just to clear the parodience, I mean, these credit

620
00:34:00,640 --> 00:34:02,600
Speaker 4: reports are the same things that households need to get

621
00:34:02,640 --> 00:34:04,520
Speaker 4: a mortgage, right, to get an auto loan, a small

622
00:34:04,560 --> 00:34:06,680
Speaker 4: business loan. So I've got to believe that if this

623
00:34:06,720 --> 00:34:09,319
Speaker 4: stuff is included on their credit reports, You're absolutely right,

624
00:34:09,440 --> 00:34:11,480
Speaker 4: it's going to make it a little bit more difficult

625
00:34:11,480 --> 00:34:13,760
Speaker 4: one we'd think to take out a loan, right.

626
00:34:14,239 --> 00:34:17,279
Speaker 7: Yeah, And I just think we want the information on

627
00:34:17,360 --> 00:34:21,319
Speaker 7: credit reports to truly be accurate, and we wanted to

628
00:34:21,360 --> 00:34:26,120
Speaker 7: reflect loans that people have. I really worry that, for example,

629
00:34:26,640 --> 00:34:30,120
Speaker 7: all of these buy now, pay later loans they're not

630
00:34:30,320 --> 00:34:33,359
Speaker 7: necessarily I had auto lenders complain to me how am

631
00:34:33,400 --> 00:34:35,960
Speaker 7: I supposed to know what people owe on buy now

632
00:34:36,000 --> 00:34:39,799
Speaker 7: pay later? And again we see this new CFPB just

633
00:34:39,880 --> 00:34:43,160
Speaker 7: completely pardoning and letting these buy now, pay later companies

634
00:34:43,480 --> 00:34:44,680
Speaker 7: do whatever the hell they want.

635
00:34:44,800 --> 00:34:47,279
Speaker 2: Right, you had an extinguished career at Wharton and then

636
00:34:47,320 --> 00:34:50,319
Speaker 2: before that at Harvard, I mean Bloomberg surveillance. We want

637
00:34:50,320 --> 00:34:53,440
Speaker 2: to know when you were at Adam's house in Cambridge

638
00:34:53,480 --> 00:34:56,080
Speaker 2: at Harvard, did you swim nude in the pool?

639
00:34:57,800 --> 00:35:01,240
Speaker 7: I think they actually covered up the pool well before

640
00:35:01,320 --> 00:35:04,480
Speaker 7: I got there. But you know what, I do think

641
00:35:04,560 --> 00:35:09,360
Speaker 7: that the things that you end up learning in these institutions,

642
00:35:09,400 --> 00:35:13,000
Speaker 7: you learn textbook stuff. What we used when we were

643
00:35:13,080 --> 00:35:18,600
Speaker 7: regulating was actual, real world business experience. And I feel

644
00:35:18,680 --> 00:35:21,800
Speaker 7: that when you have regulators that are now just blindfolding

645
00:35:21,840 --> 00:35:24,719
Speaker 7: themselves to what is happening in the markets and what

646
00:35:24,880 --> 00:35:28,000
Speaker 7: is happening with people's lives, that is a recipe.

647
00:35:30,360 --> 00:35:34,560
Speaker 2: He just completely. That was extra points. I didn't want.

648
00:35:34,600 --> 00:35:37,040
Speaker 7: I didn't I didn't want to make anyone seem too

649
00:35:37,120 --> 00:35:37,920
Speaker 7: dated by it.

650
00:35:39,400 --> 00:35:42,040
Speaker 2: Thank you so much. Don't be a stranger. We'd love

651
00:35:42,080 --> 00:35:44,200
Speaker 2: to see at our headquarters here in New York. Is again,

652
00:35:44,480 --> 00:35:48,320
Speaker 2: mister Choper is public service, uh in the CPP.

653
00:35:48,840 --> 00:35:52,680
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

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00:35:56,200 --> 00:35:59,160
Speaker 1: with the Bloomberg Business App. You can also listen live

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00:35:59,200 --> 00:36:02,799
Speaker 1: on Amazon alone from our flagship New York station. Just

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00:36:02,840 --> 00:36:05,719
Speaker 1: say Alexa, play Bloomberg eleven thirty.

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00:36:05,960 --> 00:36:07,160
Speaker 2: The newspapers.

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00:36:08,360 --> 00:36:10,920
Speaker 8: Okay, birthdays, right, it's a time to celebrate.

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Speaker 2: It's your breath one today. I'll love today this morning.

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Speaker 2: Oh okay, baby immediately really seven years old?

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00:36:17,200 --> 00:36:19,600
Speaker 4: Okay, no, it's nice.

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00:36:19,360 --> 00:36:24,839
Speaker 8: Somewhat disciplined, somewhat happy, birthday. But it's also time where

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Speaker 8: you can cash in on some freebies. Okay, So I

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00:36:27,920 --> 00:36:30,120
Speaker 8: always try to get my free Starbucks on my birthday.

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00:36:30,160 --> 00:36:32,160
Speaker 8: That's the one thing I go for. But some people

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00:36:32,400 --> 00:36:33,920
Speaker 8: make an event out of it, right, So you have

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00:36:34,040 --> 00:36:38,799
Speaker 8: these competitive birthday freeloaders. So the Wall Street Journal they

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00:36:38,840 --> 00:36:42,320
Speaker 8: spoke with one guy. He makes an event out of it. Okay,

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00:36:42,600 --> 00:36:46,280
Speaker 8: he has a spreadsheet of all his stops for the day. Okay,

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00:36:46,760 --> 00:36:49,040
Speaker 8: he starts working on it monthly in Evans, he spends

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Speaker 8: like fifteen hours He's sifting through emails and loyalty apps,

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00:36:52,480 --> 00:36:55,560
Speaker 8: terms and conditions. He starts today like six am. He

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00:36:55,640 --> 00:36:58,440
Speaker 8: logs like ten thousand steps that day. Okay, he has

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00:36:58,800 --> 00:37:03,080
Speaker 8: drives thirty to fifty files in his car. Businesses are saying,

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Speaker 8: you know what, more people are doing this, they're cashing in.

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Speaker 8: Did you know that you can go to Denny's and

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Speaker 8: get a free grand Slam of breakfast?

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Speaker 4: Leonia, New Jersey. I just want to know what your

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00:37:12,080 --> 00:37:13,400
Speaker 4: go to Starbucks drink is?

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00:37:14,160 --> 00:37:19,560
Speaker 8: Black coffee, so boring, brown sugar.

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00:37:19,960 --> 00:37:23,040
Speaker 2: N The only time I've been to a Denny's is

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Speaker 2: between twelve forty four.

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Speaker 3: That's time.

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Speaker 2: That's the truth.

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Speaker 6: Next.

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Speaker 8: Okay, so banks, right, they've had an issue with private

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00:37:34,440 --> 00:37:36,560
Speaker 8: equity taking over their junior talent. This has been the

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Speaker 8: news a lot. Goldman SAX thinks they have an answer

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Speaker 8: to that. So what they're doing, they're offering them buy

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Speaker 8: side jobs within the bank. So apparently yesterday Goldman sent

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Speaker 8: out a letter to its summer interns. This from Business Insider,

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00:37:49,120 --> 00:37:51,440
Speaker 8: they announce this new program. It's going to offer a

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Speaker 8: select group of those junior bankers the chance to work

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Speaker 8: for Goldman's asset management business after their two year investment.

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00:37:58,600 --> 00:38:02,719
Speaker 8: Banking analyst pro truly read between the line statement yes, yeah, yeah, No.

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Speaker 4: I mean for me, it's all about, you know, trying

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00:38:04,520 --> 00:38:05,840
Speaker 4: to keep the town from walking out the door. But

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Speaker 4: I mean what's amazing is you have some real like

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Speaker 4: kind of conflicts of interest. Right If you have a

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00:38:10,200 --> 00:38:12,240
Speaker 4: banker that's working for Goldman SAX, but then he's already

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00:38:12,280 --> 00:38:14,240
Speaker 4: kind of committed to working for I don't know, Apollo

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00:38:14,360 --> 00:38:17,480
Speaker 4: or some other private equity shop two years down the road. Yeah,

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Speaker 4: that's kind of a big complet of interest from a

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Speaker 4: client perspective.

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Speaker 2: Right, You're not as good looking as Shnalie Basset, but

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Speaker 2: I'm going to the nale question. The bottom line here

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Speaker 2: is investment banking hasn't come back. No, it's not booming.

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Speaker 4: No, no asset management. I mean those asset management positions,

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Speaker 4: that's what you're really after. At least that's what I'd

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00:38:32,680 --> 00:38:33,319
Speaker 4: be after if I were.

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00:38:33,320 --> 00:38:36,440
Speaker 2: Graduation slots aren't there and investment banking anymore.

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00:38:36,040 --> 00:38:38,000
Speaker 4: And they're not really there, and as management, it depends.

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00:38:38,000 --> 00:38:40,160
Speaker 4: I mean, look, if you're private credit, yeah, but how Look,

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00:38:40,200 --> 00:38:42,600
Speaker 4: I just questioned the durability of that market, thank you

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00:38:42,680 --> 00:38:45,200
Speaker 4: very much. But I mean other areas like commercial real estate.

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00:38:45,239 --> 00:38:47,359
Speaker 4: I mean again, you know, the hiring is kind of

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00:38:47,400 --> 00:38:48,840
Speaker 4: not what I mean. And I'm kind of close to

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Speaker 4: this because I have a son who's twenty years old

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Speaker 4: and going into his junior year of college. Yeah, it's tough.

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Speaker 4: It's competitive out there, for sure.

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Speaker 2: It's really something that's really tough.

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Speaker 8: Yesterday, Okay, have you are you a fan of the apparel?

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00:38:59,360 --> 00:39:00,160
Speaker 8: Sprint has been.

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00:39:01,760 --> 00:39:03,400
Speaker 2: Selected members of the household?

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00:39:03,520 --> 00:39:06,879
Speaker 8: Okay, okay, selective members. You know, White Lotus like made

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00:39:06,880 --> 00:39:10,080
Speaker 8: it big because the second season filled in sicily. Some

728
00:39:10,120 --> 00:39:11,920
Speaker 8: people like it's like a bittersweet flavor.

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Speaker 2: Right.

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Speaker 8: I'm not a big fan of it. Others say it

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00:39:13,680 --> 00:39:16,239
Speaker 8: tastes like medicine. That's what I kind of think. But

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Speaker 8: there is a new summer cocktail. It is the Hugo Sprits. Okay,

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00:39:20,800 --> 00:39:24,040
Speaker 8: you have to try this one. It is prosecco, Club

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Speaker 8: soda and Elderflower.

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00:39:26,239 --> 00:39:28,280
Speaker 4: Older Flower. I am a big fan.

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Speaker 8: Of the elder flower. The Saint Germaine is like, great,

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00:39:31,360 --> 00:39:36,000
Speaker 8: I love it. So Saint Germaine actually said they're they're growing.

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Speaker 8: They were bought by Bacardi back in twenty thirteen, but

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00:39:38,719 --> 00:39:41,839
Speaker 8: they're really growing. They have the hand pick flowers that

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00:39:41,920 --> 00:39:44,880
Speaker 8: grow in the French Alps, you know. So people really

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00:39:44,960 --> 00:39:48,000
Speaker 8: love it. It's on the TikTok and Instagram feeds. People

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00:39:48,040 --> 00:39:48,760
Speaker 8: are really enjoying.

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Speaker 4: It's a glue free Does.

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00:39:53,080 --> 00:39:54,960
Speaker 2: A president want real cane sugar?

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00:39:55,560 --> 00:39:56,520
Speaker 8: That's a good question.

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00:39:56,600 --> 00:39:58,600
Speaker 4: And my go to is always a spicy margarita. But

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00:39:58,640 --> 00:40:00,480
Speaker 4: you know, if you're going to make a spicy bug

748
00:40:00,520 --> 00:40:02,759
Speaker 4: rada the right way, you need that Tahiti around the rim.

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Speaker 4: I don't think any of that salt that's the good stuff.

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Speaker 2: This is way too much infermanship.

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Speaker 6: Thank you so much.

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Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple Spotify,

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00:40:15,360 --> 00:40:19,640
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

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00:40:19,760 --> 00:40:23,239
Speaker 1: seven to ten am Eastern on Bloomberg dot Com, the

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00:40:23,320 --> 00:40:27,359
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You

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00:40:27,360 --> 00:40:30,719
Speaker 1: can also watch us live every weekday on YouTube and

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00:40:30,960 --> 00:40:32,680
Speaker 1: always on the Bloomberg terminal