1 00:00:00,280 --> 00:00:02,599 Speaker 1: This is Bloomberg Wall Street Week. 2 00:00:02,680 --> 00:00:07,200 Speaker 2: The global push into infrastructure, breaking the IPO logjam in tex. 3 00:00:07,160 --> 00:00:09,120 Speaker 1: The financial stories that sheep. 4 00:00:08,880 --> 00:00:12,040 Speaker 2: Are were cutting inflation without losing jobs. Do we need 5 00:00:12,119 --> 00:00:14,560 Speaker 2: rate cuts and if so, how many? Investing in a 6 00:00:14,560 --> 00:00:16,120 Speaker 2: time of geopolitical turmoil. 7 00:00:16,200 --> 00:00:18,560 Speaker 1: Through the eyes of the most influential voices. 8 00:00:18,720 --> 00:00:22,480 Speaker 2: Ten Rogueff Economists of Harvard, former FDIC had Shila Bert 9 00:00:22,680 --> 00:00:26,200 Speaker 2: ge CEO, Larry Kulp, San Francisco FED President Mary Daily. 10 00:00:26,239 --> 00:00:30,520 Speaker 1: Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 11 00:00:30,440 --> 00:00:33,400 Speaker 2: From Beverly Hills for the Milkin Institute Global Conference. This 12 00:00:33,560 --> 00:00:36,159 Speaker 2: is a special edition of Bloomberg Wall Street Week. I'm 13 00:00:36,240 --> 00:00:40,560 Speaker 2: David Weston. This week Karen Carneal Tambor of Bridgewater on 14 00:00:40,680 --> 00:00:42,559 Speaker 2: the geopolitics of industrial policy. 15 00:00:42,880 --> 00:00:46,360 Speaker 3: Everything you're seeing in industrial policy officially, it's doing something else. 16 00:00:46,720 --> 00:00:49,320 Speaker 2: Former Treasury Secretary Stephing the noution on his plans to 17 00:00:49,360 --> 00:00:50,080 Speaker 2: buy TikTok. 18 00:00:50,440 --> 00:00:53,760 Speaker 4: I do believe the algorithms could be rebuilt. So my 19 00:00:53,960 --> 00:00:56,400 Speaker 4: plan if we were to purchase it would be to 20 00:00:56,480 --> 00:00:59,760 Speaker 4: rebuild the technology under US leadership. 21 00:01:00,160 --> 00:01:02,720 Speaker 2: And Barry Stern like the Starward Capitol and why he's 22 00:01:02,760 --> 00:01:05,840 Speaker 2: so unhappy with his alma mater, Brown University. 23 00:01:06,240 --> 00:01:08,399 Speaker 5: They should be shown the door, and I don't want 24 00:01:08,400 --> 00:01:09,800 Speaker 5: to pay for them, so I don't want to support 25 00:01:09,920 --> 00:01:23,040 Speaker 5: university houses that language. 26 00:01:24,360 --> 00:01:27,440 Speaker 2: We began the week at Milking with Mark rowan Apollo CEO, 27 00:01:27,600 --> 00:01:30,480 Speaker 2: on the surge in private credit and why he believes 28 00:01:30,560 --> 00:01:31,880 Speaker 2: it's a better way to go. 29 00:01:32,240 --> 00:01:35,319 Speaker 6: If you look over time, we had eight thousand plus 30 00:01:35,400 --> 00:01:38,160 Speaker 6: public companies in the US. We now have just over 31 00:01:38,200 --> 00:01:41,880 Speaker 6: four thousand public companies. We should logically expect, therefore, to 32 00:01:41,880 --> 00:01:45,080 Speaker 6: be more in the private arkets. And I don't think 33 00:01:45,080 --> 00:01:47,840 Speaker 6: people actually appreciate the scale. And this is not just US, 34 00:01:47,920 --> 00:01:51,240 Speaker 6: but it's US and Europe. Eighty percent of companies over 35 00:01:51,240 --> 00:01:55,880 Speaker 6: one hundred million revenue are private, eighty percent of employment private. 36 00:01:56,520 --> 00:02:00,600 Speaker 6: Why would we not expect a growth in the private marketplace? 37 00:02:01,760 --> 00:02:04,280 Speaker 2: So why is it a better mousetrap? I mean fundamentally, 38 00:02:04,840 --> 00:02:07,600 Speaker 2: I think about banks as being intermediaries, sort of between 39 00:02:07,680 --> 00:02:11,160 Speaker 2: people putting capital up and people needing capital. Why is 40 00:02:11,240 --> 00:02:14,040 Speaker 2: private a better intermediary than the big banks? 41 00:02:14,160 --> 00:02:16,840 Speaker 7: So let's work, let's work in reverse. What needs? 42 00:02:16,960 --> 00:02:20,359 Speaker 6: What are the needs for financing today? We're financing infrastructure 43 00:02:20,480 --> 00:02:24,680 Speaker 6: long term, We're financing, energy transition, really long term we're 44 00:02:24,680 --> 00:02:29,040 Speaker 6: financing the new economy, data centers, power really long term, 45 00:02:29,080 --> 00:02:32,520 Speaker 6: long term financing needs. What a banks do well. Banks 46 00:02:32,960 --> 00:02:38,200 Speaker 6: borrow short and then long. They are not ideally situated 47 00:02:38,200 --> 00:02:42,080 Speaker 6: to be investors in long term assets, and so regulators 48 00:02:42,080 --> 00:02:44,680 Speaker 6: when they look at the funding for the economy, they 49 00:02:44,680 --> 00:02:48,040 Speaker 6: only have two choices, the banking system or the investment marketplace. 50 00:02:48,680 --> 00:02:52,560 Speaker 6: Increasingly since two thousand and eight, regulators have chosen the 51 00:02:52,560 --> 00:02:55,680 Speaker 6: investment marketplace to provide financing. Now you come to the 52 00:02:55,680 --> 00:02:58,720 Speaker 6: investment marketplace and you have two more choices. You have 53 00:02:58,840 --> 00:03:03,440 Speaker 6: daily liquid fonts or you have long term investors who 54 00:03:03,440 --> 00:03:06,440 Speaker 6: are trying to match long term liabilities and long term assets. 55 00:03:07,160 --> 00:03:08,480 Speaker 7: I think the choice is obvious. 56 00:03:09,240 --> 00:03:11,640 Speaker 6: Do we really want to create more instability in our 57 00:03:11,680 --> 00:03:15,080 Speaker 6: public markets by matching long term financing needs with short 58 00:03:15,160 --> 00:03:16,639 Speaker 6: term daily liquid files? 59 00:03:16,880 --> 00:03:17,480 Speaker 7: I don't think so. 60 00:03:18,000 --> 00:03:21,960 Speaker 6: We are watching the logical outgrowth of changes that started 61 00:03:22,000 --> 00:03:25,280 Speaker 6: in two thousand and eight, that accelerated through a zero 62 00:03:25,360 --> 00:03:29,680 Speaker 6: rate environment, that were exacerbated by COVID, that were then 63 00:03:29,800 --> 00:03:32,080 Speaker 6: refreshed by SVB and FRV. 64 00:03:32,840 --> 00:03:34,399 Speaker 7: And this is not just happening in the US. 65 00:03:34,440 --> 00:03:37,560 Speaker 6: It's happening everywhere in the world, regulators are looking at 66 00:03:37,600 --> 00:03:39,880 Speaker 6: the choice of how they fund their economy, and they're 67 00:03:39,920 --> 00:03:43,040 Speaker 6: choosing investors over banks. That doesn't mean bank's shrink, It 68 00:03:43,120 --> 00:03:45,160 Speaker 6: just means on the margin, the growth is going to 69 00:03:45,200 --> 00:03:45,960 Speaker 6: the investment market. 70 00:03:46,000 --> 00:03:49,160 Speaker 2: Plitz. Are there some things that public markets do better 71 00:03:49,200 --> 00:03:51,400 Speaker 2: than private markets? You've described some of the things private 72 00:03:51,400 --> 00:03:53,280 Speaker 2: does better than public. Are there some things that public 73 00:03:53,320 --> 00:03:54,040 Speaker 2: really does better. 74 00:03:54,360 --> 00:03:58,280 Speaker 6: Look, we have in the US, in particular, a focus 75 00:03:58,320 --> 00:04:01,560 Speaker 6: on daily liquidity. You want something that is daily liquid 76 00:04:01,640 --> 00:04:05,320 Speaker 6: if you want pricing every single day, you can only 77 00:04:05,400 --> 00:04:09,160 Speaker 6: accomplish that in public markets. Private markets are not going 78 00:04:09,200 --> 00:04:12,120 Speaker 6: to give you daily pricing. They can give you an 79 00:04:12,120 --> 00:04:14,480 Speaker 6: indication of pricing, nor are they going to give you 80 00:04:14,560 --> 00:04:18,000 Speaker 6: immediate liquidity. So if you want something that's immediably liquid, 81 00:04:18,160 --> 00:04:21,320 Speaker 6: you're talking about the public marketplace. If you want access 82 00:04:21,320 --> 00:04:24,240 Speaker 6: to vast amount of capital today, because that's where the 83 00:04:24,279 --> 00:04:26,920 Speaker 6: capital is, you're talking about the public marketplace. 84 00:04:27,279 --> 00:04:29,000 Speaker 7: But if you're look at. 85 00:04:28,880 --> 00:04:32,039 Speaker 6: Talking about matching long term capital needs, you're really talking 86 00:04:32,040 --> 00:04:33,400 Speaker 6: about the private marketplace. 87 00:04:33,640 --> 00:04:37,640 Speaker 2: When you talk about daily pricing. Some people here transparency. 88 00:04:38,200 --> 00:04:39,919 Speaker 2: That is to say you have transparency in the public 89 00:04:39,960 --> 00:04:42,800 Speaker 2: markets and not in the private markets. Is that right? 90 00:04:43,240 --> 00:04:45,520 Speaker 6: I don't really think so. So let's start in the 91 00:04:45,520 --> 00:04:49,080 Speaker 6: fixed income market. You own a public bond, Can you 92 00:04:49,120 --> 00:04:50,000 Speaker 6: sell that public bond? 93 00:04:50,160 --> 00:04:50,640 Speaker 7: Maybe? 94 00:04:50,920 --> 00:04:53,479 Speaker 6: On average, it takes about five days to sell an 95 00:04:53,480 --> 00:04:56,960 Speaker 6: investment grade public bond today when you see a price 96 00:04:57,080 --> 00:05:00,919 Speaker 6: or a quote that's for a very small subset of 97 00:05:00,960 --> 00:05:03,680 Speaker 6: the bond market. In the private market, can you sell 98 00:05:03,720 --> 00:05:04,119 Speaker 6: your bond? 99 00:05:04,440 --> 00:05:04,760 Speaker 7: Yes? 100 00:05:05,279 --> 00:05:08,039 Speaker 6: On average, probably takes you about five days to sell 101 00:05:08,080 --> 00:05:11,360 Speaker 6: your vont What we're watching is we're watching as private 102 00:05:11,400 --> 00:05:15,880 Speaker 6: markets get bigger. We're actually watching increased liquidity in private markets. 103 00:05:16,279 --> 00:05:18,320 Speaker 6: It's not to say it's the same as public markets, 104 00:05:18,320 --> 00:05:22,160 Speaker 6: it's not. But this notion of transparency is actually itself 105 00:05:22,520 --> 00:05:26,280 Speaker 6: an interesting thing. Are private market's not transparent? This is 106 00:05:26,320 --> 00:05:29,280 Speaker 6: the argument that i'm the regulators make. They talk about 107 00:05:29,560 --> 00:05:33,080 Speaker 6: private credit as a threat to the system. Well, every 108 00:05:33,160 --> 00:05:35,360 Speaker 6: dollar that moves out of our US banking system makes 109 00:05:35,400 --> 00:05:38,560 Speaker 6: the system more resilient. Banks are leveraged ten to twelve times, 110 00:05:38,920 --> 00:05:44,640 Speaker 6: investors zero leverage, mutual funds zero leverage, BDC's one point 111 00:05:44,720 --> 00:05:48,760 Speaker 6: five times leverage, retirement services companies eight times leverage. Everything 112 00:05:48,760 --> 00:05:50,680 Speaker 6: that moves out of the banking system deleverages. 113 00:05:50,839 --> 00:05:54,160 Speaker 2: So we've been talking about structural changes within the financial 114 00:05:54,400 --> 00:05:58,040 Speaker 2: industry actually that have made private markets evolve. What about 115 00:05:58,120 --> 00:05:59,920 Speaker 2: larger forces what we're looking at right now. We've gone 116 00:06:00,000 --> 00:06:02,880 Speaker 2: through a period of extraordinarily low interest rates, a lot 117 00:06:02,920 --> 00:06:05,760 Speaker 2: of liquidity. As I say, some other places have pumped 118 00:06:05,920 --> 00:06:07,880 Speaker 2: a lot of money into the system for good and 119 00:06:07,880 --> 00:06:09,760 Speaker 2: sufficient reason. We had a pandemic, we had a great 120 00:06:09,760 --> 00:06:13,440 Speaker 2: financial crisis. As that tightens up, as I assume it will, 121 00:06:13,760 --> 00:06:16,360 Speaker 2: how does that change the equation for private It. 122 00:06:16,360 --> 00:06:17,919 Speaker 7: Is absolutely the driving force. 123 00:06:18,040 --> 00:06:21,000 Speaker 6: I mean, this is focusing on the urgent, which is 124 00:06:21,080 --> 00:06:22,719 Speaker 6: what we were talking about before we came on Era 125 00:06:22,960 --> 00:06:25,640 Speaker 6: versus the important. This is the important thing that's happening 126 00:06:25,680 --> 00:06:28,760 Speaker 6: in our business. At our recent partners off site, I 127 00:06:28,800 --> 00:06:30,760 Speaker 6: put up a slide that said, in two thousand and eight, 128 00:06:30,800 --> 00:06:35,200 Speaker 6: Apollo forty billion of AUM twenty twenty three, six hundred 129 00:06:35,200 --> 00:06:38,120 Speaker 6: and fifty billion of AUM, we grew fourteen times. We 130 00:06:38,160 --> 00:06:43,760 Speaker 6: outgrew Apple, We we outgrew Microsoft. Pretty impressive stat next slide, 131 00:06:43,839 --> 00:06:47,320 Speaker 6: were we lucky or smart? We were lucky. You can't 132 00:06:47,360 --> 00:06:50,360 Speaker 6: possibly plan on growing your business fourteen times, but you 133 00:06:50,360 --> 00:06:53,200 Speaker 6: can position the business in a way that you take 134 00:06:53,200 --> 00:06:55,480 Speaker 6: advantage of powerful tailwinds or trends. 135 00:06:56,000 --> 00:06:57,040 Speaker 7: What were the tailwinds? 136 00:06:57,240 --> 00:06:59,320 Speaker 6: Two thousand and eight, we had a financial crisis which 137 00:06:59,360 --> 00:07:01,479 Speaker 6: puts most financial institutions in the. 138 00:07:01,440 --> 00:07:02,880 Speaker 7: Western world on defense. 139 00:07:03,600 --> 00:07:07,479 Speaker 6: People who had made promises to retirees, to pensioners, and 140 00:07:07,560 --> 00:07:10,320 Speaker 6: had other obligations that were fixed all of a sudden 141 00:07:10,400 --> 00:07:13,920 Speaker 6: needed to look elsewhere for rate of return. They were 142 00:07:13,960 --> 00:07:17,640 Speaker 6: willing to consider that perhaps private markets offer an alternative. 143 00:07:17,720 --> 00:07:19,800 Speaker 2: So Marco's turn to a different subject that you've been 144 00:07:19,800 --> 00:07:22,120 Speaker 2: involved in. That's what's going on in the university and 145 00:07:22,120 --> 00:07:24,920 Speaker 2: college at campuses right now. You've been involved, particularly at 146 00:07:25,000 --> 00:07:27,920 Speaker 2: Pennsylvania and the Wharton School for a good long time 147 00:07:27,960 --> 00:07:31,200 Speaker 2: on the board. Have things changed on college campuses or 148 00:07:31,240 --> 00:07:33,600 Speaker 2: has there always been thus and it's just been triggered 149 00:07:33,600 --> 00:07:35,080 Speaker 2: by this Israel Guiza Phenomona. 150 00:07:35,680 --> 00:07:38,200 Speaker 6: Look, I think we've actually seen a lot of change 151 00:07:38,200 --> 00:07:42,239 Speaker 6: take place over time. So I have a very favorable 152 00:07:42,240 --> 00:07:45,120 Speaker 6: memory in my experience at the University Pennsylvania campus. But 153 00:07:45,320 --> 00:07:48,680 Speaker 6: think more broadly, US universities were the were and are 154 00:07:48,840 --> 00:07:51,560 Speaker 6: the envy of the world. We can destroy that, we 155 00:07:51,640 --> 00:07:54,680 Speaker 6: can lose it. Why are kids there? Why did we 156 00:07:54,680 --> 00:07:58,040 Speaker 6: think they were there? Be exposed to different points of view, 157 00:07:58,360 --> 00:08:03,480 Speaker 6: learn how to think, critical reasoning, critical thinking, maturation. Is 158 00:08:03,520 --> 00:08:06,920 Speaker 6: that what they're getting today. I think in some places 159 00:08:06,920 --> 00:08:08,760 Speaker 6: it is what they're getting, and in some classes it 160 00:08:08,800 --> 00:08:11,280 Speaker 6: is what they're getting. But what I saw at the 161 00:08:11,320 --> 00:08:14,080 Speaker 6: University of Pennsylvania and when I spoke out against, was 162 00:08:14,120 --> 00:08:17,600 Speaker 6: a dominant narrative that was taking hold on our campuses. 163 00:08:17,920 --> 00:08:21,520 Speaker 6: Call it a post colonial education, call it what you will. 164 00:08:21,640 --> 00:08:24,920 Speaker 6: It gave rise to an institutionalization of a point of view, 165 00:08:24,920 --> 00:08:27,920 Speaker 6: that there were favorite groups and disfavored groups, that there 166 00:08:28,000 --> 00:08:31,520 Speaker 6: was acceptable speech and non acceptable speech. I'm not sure 167 00:08:31,680 --> 00:08:35,120 Speaker 6: that's the job that we all signed up for, or 168 00:08:35,160 --> 00:08:37,719 Speaker 6: that's the university that we signed up for. Where we're 169 00:08:37,720 --> 00:08:41,160 Speaker 6: watching today on these campuses is nothing more than the 170 00:08:41,200 --> 00:08:45,400 Speaker 6: outgrowth of twenty years of bad management. If you have 171 00:08:45,440 --> 00:08:49,840 Speaker 6: a dominant narrative on campus, do you have academic freedom? 172 00:08:50,320 --> 00:08:53,240 Speaker 6: Do you have freedom of speech? I have seen over 173 00:08:53,280 --> 00:08:56,679 Speaker 6: the past few years, as I've really stepped up my involvement, professors, 174 00:08:57,040 --> 00:09:00,960 Speaker 6: department chairs who are afraid to speak their mind because 175 00:09:01,000 --> 00:09:05,200 Speaker 6: their thoughts, their speech goes against the dominant narrative. What 176 00:09:05,280 --> 00:09:07,840 Speaker 6: we're watching today on campus is we're told are leftists. 177 00:09:08,960 --> 00:09:12,640 Speaker 6: We used to think leftists were liberal. This hardly seems liberal. 178 00:09:12,679 --> 00:09:16,360 Speaker 6: This actually seems illiberal in the most extreme way. Why 179 00:09:16,400 --> 00:09:18,800 Speaker 6: haven't they been cleared out? Won't listen to Ben Sas 180 00:09:18,800 --> 00:09:21,360 Speaker 6: at the University of Florida. We're all about free speech, 181 00:09:22,200 --> 00:09:24,840 Speaker 6: We're all about the right to protest. But there's a 182 00:09:24,880 --> 00:09:28,520 Speaker 6: time and a place and a way you violate and trespass. 183 00:09:28,960 --> 00:09:32,400 Speaker 6: There are consequences. Why would we not deal with them 184 00:09:32,440 --> 00:09:37,520 Speaker 6: everywhere and that way. Certainly protests that were inconsistent with 185 00:09:37,559 --> 00:09:40,440 Speaker 6: the narrative that we find on our campuses have and 186 00:09:40,520 --> 00:09:44,360 Speaker 6: will be dealt with in that manner. Speakers are regularly 187 00:09:44,360 --> 00:09:49,640 Speaker 6: shouted down, Professors, euersy administrators who did not react in 188 00:09:49,679 --> 00:09:52,400 Speaker 6: that way without that kind of moral clarity. They now 189 00:09:52,400 --> 00:09:55,960 Speaker 6: have encampments. Once you have encampments, you have the potential 190 00:09:56,000 --> 00:09:58,560 Speaker 6: for violence. You have other considerations that come into play. 191 00:09:58,920 --> 00:10:04,040 Speaker 6: But make no mistake, outside agitators, not mostly students, trespass 192 00:10:05,040 --> 00:10:07,439 Speaker 6: danger to our the rest of the students and the 193 00:10:07,480 --> 00:10:10,719 Speaker 6: rest of the community. This is what twenty years of 194 00:10:10,720 --> 00:10:12,040 Speaker 6: a dominant narrative has done. 195 00:10:12,840 --> 00:10:15,120 Speaker 2: Having seen it from the inside, where is the failure? 196 00:10:15,880 --> 00:10:18,080 Speaker 6: The failures in multiple places, But I think it starts 197 00:10:18,120 --> 00:10:21,840 Speaker 6: with me and with us as trustees. We were asleep 198 00:10:21,840 --> 00:10:24,560 Speaker 6: at the wheel for twenty years. Part of our job 199 00:10:25,280 --> 00:10:29,320 Speaker 6: was to provide balance. I do not think the popular 200 00:10:29,400 --> 00:10:33,319 Speaker 6: frame of a campus today where trustees and alumni are 201 00:10:33,360 --> 00:10:36,040 Speaker 6: fighting professors over academic freedom. 202 00:10:35,840 --> 00:10:36,760 Speaker 7: Is actually correct. 203 00:10:37,559 --> 00:10:42,480 Speaker 6: I actually think the appropriate frame is university administrators who 204 00:10:42,559 --> 00:10:46,520 Speaker 6: maintain this dominant narrative are fighting professors for academic freedom. 205 00:10:47,400 --> 00:10:51,880 Speaker 6: Trustees and alumni are here to provide balance. We have 206 00:10:51,960 --> 00:10:54,160 Speaker 6: been asleep at the wheel. We have not done what 207 00:10:54,200 --> 00:10:57,520 Speaker 6: we were supposed to do. We did not object as 208 00:10:57,880 --> 00:11:00,959 Speaker 6: these dominant narratives took hold, and it is our job 209 00:11:01,320 --> 00:11:06,200 Speaker 6: I believe to support long term excellence in education, academic research, 210 00:11:06,559 --> 00:11:10,840 Speaker 6: freedom of expression, freedom to disagree. That's not what we 211 00:11:10,920 --> 00:11:13,400 Speaker 6: have on many of our campuses today. We've got a 212 00:11:13,440 --> 00:11:15,000 Speaker 6: long way from academic excellence. 213 00:11:15,520 --> 00:11:18,760 Speaker 2: How is that corrected without the trustees overstepping their boundaries. 214 00:11:18,760 --> 00:11:20,439 Speaker 2: I mean, you know, and I know when you sit 215 00:11:20,480 --> 00:11:22,079 Speaker 2: in a board there are certain things you really need 216 00:11:22,120 --> 00:11:23,920 Speaker 2: to do. You don't want to run the thing day 217 00:11:23,960 --> 00:11:26,559 Speaker 2: to day. You don't have trustees there to be micromanagers. 218 00:11:26,800 --> 00:11:29,199 Speaker 2: How do you have the proper role for the trustees 219 00:11:29,320 --> 00:11:30,720 Speaker 2: without overstepping boundaries. 220 00:11:31,360 --> 00:11:32,760 Speaker 7: There's a question of overstepping. 221 00:11:32,800 --> 00:11:35,600 Speaker 6: I think the danger right now is far from trustees 222 00:11:35,640 --> 00:11:38,360 Speaker 6: overstepping the bounts. I think trustees, for the most part 223 00:11:38,360 --> 00:11:41,560 Speaker 6: of these big institutions, myself included, have failed to act. 224 00:11:42,000 --> 00:11:44,480 Speaker 6: We have not done our job in the most fundamental way. 225 00:11:45,040 --> 00:11:47,079 Speaker 6: I don't think we are anywhere close to the line 226 00:11:47,080 --> 00:11:50,959 Speaker 6: of overstepping our balunts. Most universities operate in a shared 227 00:11:51,040 --> 00:11:56,719 Speaker 6: governance manner. Transparency is often the best disinfectant. I do 228 00:11:56,720 --> 00:11:58,800 Speaker 6: not believe at the University of Pennsylvania or a many 229 00:11:58,840 --> 00:12:03,160 Speaker 6: of these campuses, the vast majority of professors actually believe 230 00:12:03,720 --> 00:12:08,160 Speaker 6: in this dominant narrative. We as trustees can assure anonymous 231 00:12:08,160 --> 00:12:13,640 Speaker 6: polling representation across the faculty, lots of other things that 232 00:12:13,679 --> 00:12:16,599 Speaker 6: we can do to developing a strategic plan goes a 233 00:12:16,600 --> 00:12:18,360 Speaker 6: long way. And as you said, it is not the 234 00:12:18,440 --> 00:12:20,720 Speaker 6: job of the trustee or the alumni for that matter, 235 00:12:20,800 --> 00:12:21,920 Speaker 6: to run these universities. 236 00:12:22,160 --> 00:12:24,520 Speaker 7: This is best left to professional administrators. 237 00:12:25,880 --> 00:12:27,480 Speaker 2: Mark, thank you so much, really great to have you 238 00:12:27,559 --> 00:12:30,480 Speaker 2: on wolsterby as Mark Rowan, he is CEO of Apollo 239 00:12:30,520 --> 00:12:35,520 Speaker 2: Global Management. Coming up, we've turned from the politics on 240 00:12:35,640 --> 00:12:39,200 Speaker 2: US campuses to the geopolitics of industrial policy around the 241 00:12:39,240 --> 00:12:44,680 Speaker 2: world with Karen Carneal Tambour of Bridgewater. That's next on 242 00:12:44,760 --> 00:12:46,359 Speaker 2: Wall Street Week on Bloomberg. 243 00:12:47,760 --> 00:12:52,000 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 244 00:12:52,120 --> 00:12:53,040 Speaker 1: Bloomberg Radio. 245 00:13:00,120 --> 00:13:02,160 Speaker 2: This is a special Milk And edition of Wall Street. 246 00:13:02,160 --> 00:13:04,800 Speaker 2: We're coming from Beverly Hills. One of the subjects of 247 00:13:04,880 --> 00:13:07,960 Speaker 2: this year's Milk And Conference was how investors respond to 248 00:13:08,000 --> 00:13:11,839 Speaker 2: an increasingly fractious world. We host a panel of major 249 00:13:11,960 --> 00:13:15,680 Speaker 2: chief investment officers, including for Bridgewater and Timasik, and we 250 00:13:15,760 --> 00:13:19,280 Speaker 2: start with Karen Carneal Tambour on how geopolitics may be 251 00:13:19,480 --> 00:13:21,680 Speaker 2: driving the move toward industrial policy. 252 00:13:22,679 --> 00:13:24,600 Speaker 3: And I think we've gone to a world where it 253 00:13:24,600 --> 00:13:29,599 Speaker 3: almost seems desirable to people to see lack of convergence, 254 00:13:29,640 --> 00:13:33,600 Speaker 3: to see diversions. You talk to businesses and you know 255 00:13:33,640 --> 00:13:35,600 Speaker 3: there's the ups and downs every day of what's happening 256 00:13:35,600 --> 00:13:36,960 Speaker 3: in the US China relationship. 257 00:13:37,400 --> 00:13:38,559 Speaker 7: But they get the direction. 258 00:13:39,000 --> 00:13:41,560 Speaker 3: They understand that they need to get out of having 259 00:13:41,600 --> 00:13:45,480 Speaker 3: that much relies on China, and they're setting up for 260 00:13:45,960 --> 00:13:50,400 Speaker 3: constantly talking about resilience. What is resilience means? It basically 261 00:13:50,480 --> 00:13:52,520 Speaker 3: means you got to double do what you're doing and 262 00:13:52,559 --> 00:13:55,440 Speaker 3: make it more expensive than it was before because you 263 00:13:55,480 --> 00:13:57,320 Speaker 3: weren't in China for no reason. You were in China 264 00:13:57,360 --> 00:13:59,400 Speaker 3: because it was the cheapest place to be, because that's 265 00:13:59,400 --> 00:14:01,559 Speaker 3: where you had capital, because that's where you could set 266 00:14:01,640 --> 00:14:04,319 Speaker 3: up most efficiently. So to go set up a double do, 267 00:14:04,679 --> 00:14:07,520 Speaker 3: to go create resilience such that if there's a problem, 268 00:14:07,600 --> 00:14:09,640 Speaker 3: you have a different way of you know, getting your 269 00:14:09,679 --> 00:14:12,400 Speaker 3: goods or creating them. That's expensive. So I think the 270 00:14:12,440 --> 00:14:15,480 Speaker 3: biggest implication for investors is that we were kind of 271 00:14:15,480 --> 00:14:18,720 Speaker 3: in this world where there is like almost a gravitational 272 00:14:18,760 --> 00:14:22,000 Speaker 3: pull like all else equal of inflation to I don't know, 273 00:14:22,160 --> 00:14:26,440 Speaker 3: zero one percent, and that was that kind of underpinned 274 00:14:26,520 --> 00:14:29,000 Speaker 3: a lot of the investment landscape because it meant that 275 00:14:29,000 --> 00:14:32,000 Speaker 3: central banks could always be easier than usual because. 276 00:14:31,720 --> 00:14:32,920 Speaker 7: They didn't really have any tension. 277 00:14:33,960 --> 00:14:36,080 Speaker 3: If there's no inflation, you might as well just be 278 00:14:36,120 --> 00:14:38,600 Speaker 3: as easy as you can at all times. What's the downside, 279 00:14:38,640 --> 00:14:41,960 Speaker 3: there's no inflation, And this shift in geopolitics has been 280 00:14:42,000 --> 00:14:44,720 Speaker 3: one of the really important drivers kind of smacking us 281 00:14:44,720 --> 00:14:46,800 Speaker 3: out of that world to a new era where the 282 00:14:46,840 --> 00:14:51,120 Speaker 3: gravitational pull of inflation is higher. Maybe they're more like 283 00:14:51,160 --> 00:14:53,560 Speaker 3: two percent. Not a disastrous number, but one where that 284 00:14:53,640 --> 00:14:57,080 Speaker 3: tension actually starts existing because you have all this structural 285 00:14:57,120 --> 00:15:00,360 Speaker 3: spending that people feel they have to do whatever the price. 286 00:15:00,840 --> 00:15:04,040 Speaker 3: Some of that is just remilitarization. Without some of these 287 00:15:04,080 --> 00:15:07,400 Speaker 3: geopolitical pressures, you wouldn't have that. But countries around the 288 00:15:07,440 --> 00:15:09,600 Speaker 3: world are basically saying I need to spend more on 289 00:15:09,720 --> 00:15:12,840 Speaker 3: military activities. Some of it is corporate spending on redoing 290 00:15:12,880 --> 00:15:15,440 Speaker 3: their supply chain, and the third type I'd mentioned is 291 00:15:15,680 --> 00:15:19,760 Speaker 3: everything you're seeing in industrial policy. Officially it's doing something else. 292 00:15:19,840 --> 00:15:23,680 Speaker 3: For example, the ira is going after climate, but I 293 00:15:23,680 --> 00:15:26,640 Speaker 3: don't believe that spending would have been there without that 294 00:15:26,800 --> 00:15:31,280 Speaker 3: backdrop of geopolitical competition and that sense that if China 295 00:15:31,360 --> 00:15:34,360 Speaker 3: is willing to spend so much state money going after 296 00:15:34,440 --> 00:15:36,120 Speaker 3: their strategic goals, why aren't we. 297 00:15:36,400 --> 00:15:39,160 Speaker 2: Karen Bridgewater has been thought of in terms of China 298 00:15:39,200 --> 00:15:41,400 Speaker 2: for some time. You have a long history there, and 299 00:15:41,440 --> 00:15:44,080 Speaker 2: when you were talking about Asia, I don't think you 300 00:15:44,120 --> 00:15:44,880 Speaker 2: mentioned India. 301 00:15:45,480 --> 00:15:48,640 Speaker 8: So I'm curious about China with respect to India and 302 00:15:48,680 --> 00:15:51,160 Speaker 8: for that matter, other wlads like Vietnam and Indonesia as 303 00:15:51,440 --> 00:15:55,400 Speaker 8: foreign direct investment has seemed to fall in China. How 304 00:15:55,400 --> 00:15:57,880 Speaker 8: do you assess India as an alternative to China and 305 00:15:57,920 --> 00:16:00,600 Speaker 8: for that matter, Indonesia other Asian countries. 306 00:16:01,560 --> 00:16:06,720 Speaker 3: I think India is fascinating. It is still meaningfully smaller 307 00:16:06,760 --> 00:16:09,160 Speaker 3: than China, as you know, just kind of what the 308 00:16:09,200 --> 00:16:13,280 Speaker 3: markets are like, and more difficult than China to transact in. 309 00:16:13,520 --> 00:16:15,800 Speaker 3: So if you look at China, I don't know, seven 310 00:16:15,880 --> 00:16:18,360 Speaker 3: years ago or something, it was very difficult for a 311 00:16:18,400 --> 00:16:22,160 Speaker 3: global player to practically be in China. And so even 312 00:16:22,200 --> 00:16:24,440 Speaker 3: if you weren't worried at all about geopolitics, about them 313 00:16:24,480 --> 00:16:27,640 Speaker 3: confiscating your assets or anything, just logistically the question of 314 00:16:27,680 --> 00:16:29,320 Speaker 3: like how do you buy a bond or how do 315 00:16:29,360 --> 00:16:31,840 Speaker 3: you buy a stock was a challenging one to work through, 316 00:16:32,520 --> 00:16:36,120 Speaker 3: and now a lot of that shifted and it's significantly easier. 317 00:16:36,160 --> 00:16:38,320 Speaker 3: Though it's obviously still harder to buy a Chinese asset. 318 00:16:38,480 --> 00:16:40,200 Speaker 3: I shouldn't say obviously they could have made it easier, 319 00:16:40,200 --> 00:16:42,640 Speaker 3: but still easier to buy a Chinese hard to buy 320 00:16:42,680 --> 00:16:45,720 Speaker 3: a Chinese asset than say a European asset, but a 321 00:16:45,800 --> 00:16:49,880 Speaker 3: lot of areas have come down, so today China is accessible. 322 00:16:50,200 --> 00:16:53,920 Speaker 3: You can as a global investor build up a relatively 323 00:16:54,000 --> 00:16:56,720 Speaker 3: meaningful allocation if you want to, and you would get 324 00:16:56,760 --> 00:17:01,520 Speaker 3: this like extremely uncorrelated exposure that, in my view, even 325 00:17:01,560 --> 00:17:05,439 Speaker 3: with pretty disastrous outcomes in China, may have reasonable return 326 00:17:05,520 --> 00:17:07,480 Speaker 3: because the pricing is just so pessimistic. 327 00:17:08,240 --> 00:17:11,240 Speaker 2: Geopolitics went to court this week as TikTok sued the 328 00:17:11,359 --> 00:17:14,240 Speaker 2: US government over its forced sale. We talked at Milkan 329 00:17:14,359 --> 00:17:17,160 Speaker 2: with someone who wants to buy it. Former Treasury Secretary 330 00:17:17,160 --> 00:17:20,200 Speaker 2: Stephen Minuchin, missus Sager, give us your sense of the 331 00:17:20,280 --> 00:17:21,480 Speaker 2: US economy right now? 332 00:17:21,520 --> 00:17:22,399 Speaker 4: How strong is it? 333 00:17:22,520 --> 00:17:23,600 Speaker 2: Where do you see weaknesses? 334 00:17:24,280 --> 00:17:26,639 Speaker 4: For the parts of the economy have continued to be 335 00:17:26,720 --> 00:17:30,920 Speaker 4: quite strong, and obviously we're seeing inflation still being very sticky. 336 00:17:31,520 --> 00:17:35,240 Speaker 4: So you know, the market has moved towards less great 337 00:17:35,359 --> 00:17:38,560 Speaker 4: cuts this year. I do think we're going to continue 338 00:17:38,560 --> 00:17:41,280 Speaker 4: to see a slow down of the US economy at 339 00:17:41,280 --> 00:17:42,800 Speaker 4: these levels of interest rates. 340 00:17:43,440 --> 00:17:46,840 Speaker 2: So you always worked for President Trump. President Biden's a 341 00:17:46,840 --> 00:17:49,400 Speaker 2: different man, different economic policy. Is there anything you see 342 00:17:49,400 --> 00:17:51,960 Speaker 2: in the Biden ofpal policy that you approve of you 343 00:17:52,000 --> 00:17:53,840 Speaker 2: think they've done a good job with Look. 344 00:17:53,640 --> 00:17:55,600 Speaker 4: I think there's certain things that they've done that have 345 00:17:55,760 --> 00:17:58,560 Speaker 4: been okay, But I think there's been a very different 346 00:17:59,080 --> 00:18:02,760 Speaker 4: economic adject and prior to COVID, we saw the Trump 347 00:18:02,800 --> 00:18:06,160 Speaker 4: tax cuts were really working. I think to the extent 348 00:18:06,240 --> 00:18:09,359 Speaker 4: that we hadn't had COVID. We were seeing an increase 349 00:18:09,359 --> 00:18:11,439 Speaker 4: of the economy and the cuts would have paid for 350 00:18:11,520 --> 00:18:16,240 Speaker 4: themselves and we were seeing very robust economic activity. Now, 351 00:18:16,280 --> 00:18:19,000 Speaker 4: obviously in COVID we had to spend a lot of money. 352 00:18:19,920 --> 00:18:22,840 Speaker 4: I think had we not spent the first two trillion dollars, 353 00:18:22,840 --> 00:18:26,679 Speaker 4: we would have had a worldwide depression, not recession. But 354 00:18:26,760 --> 00:18:28,840 Speaker 4: I think in hindsight, we went on to spend too 355 00:18:28,920 --> 00:18:32,239 Speaker 4: much money, and I think when the Biden administration came in, 356 00:18:32,320 --> 00:18:35,080 Speaker 4: they continue to spend too much money, and I think 357 00:18:35,119 --> 00:18:36,919 Speaker 4: these deficits are going to come back and be a 358 00:18:36,920 --> 00:18:37,680 Speaker 4: real problem. 359 00:18:37,960 --> 00:18:40,840 Speaker 2: We have a very strong US dollar. Is that a 360 00:18:40,880 --> 00:18:42,000 Speaker 2: good thing for the economy. 361 00:18:42,280 --> 00:18:44,400 Speaker 4: I think it is a good thing. I mean, for one, 362 00:18:44,680 --> 00:18:47,919 Speaker 4: the dollar is the reserve currency of the world, and 363 00:18:47,960 --> 00:18:51,639 Speaker 4: that's allowed us to finance these very large deficits. But 364 00:18:51,800 --> 00:18:54,480 Speaker 4: over time this is something we can't be reliant on. 365 00:18:55,480 --> 00:18:57,719 Speaker 4: I think the dollar will continue to be the reserve 366 00:18:57,800 --> 00:19:02,400 Speaker 4: currency before the foreseeable future, but we have a responsibility 367 00:19:02,400 --> 00:19:04,840 Speaker 4: to get our financial situation back in shape. 368 00:19:04,880 --> 00:19:06,960 Speaker 2: What are the issues is pending right now? Are the 369 00:19:07,040 --> 00:19:09,960 Speaker 2: Russian assets central back assets that have been seized in 370 00:19:10,000 --> 00:19:12,600 Speaker 2: Europe and the United States? What should be done, if anything, 371 00:19:12,680 --> 00:19:14,679 Speaker 2: with those. Do you have a view about whether we 372 00:19:14,720 --> 00:19:18,160 Speaker 2: actually should be taking those assets and basically giving them 373 00:19:18,160 --> 00:19:20,880 Speaker 2: to Ukraine for rebuilding Ukraine because of the war. 374 00:19:21,840 --> 00:19:24,480 Speaker 4: Well, first of all, I think the sanctions programs are 375 00:19:24,640 --> 00:19:28,720 Speaker 4: very important, and it's a major foreign policy tool that 376 00:19:28,760 --> 00:19:31,480 Speaker 4: the US has, And I've always said, because we are 377 00:19:31,520 --> 00:19:34,440 Speaker 4: the reserve currency, we need to be careful about how 378 00:19:34,480 --> 00:19:37,000 Speaker 4: we use it. So the first part of this is 379 00:19:37,000 --> 00:19:40,440 Speaker 4: making sure we put in place sanctions and re enforce them. 380 00:19:41,200 --> 00:19:45,679 Speaker 4: I'm very concerned that the Russian Oale sanctions and the 381 00:19:45,680 --> 00:19:50,600 Speaker 4: Iran oil sanctions are not being enforced. We're seeing laborant 382 00:19:50,640 --> 00:19:53,959 Speaker 4: violations of those, and I think that has to be 383 00:19:54,040 --> 00:19:56,879 Speaker 4: enforced now. In regards to what you do with the money, 384 00:19:57,800 --> 00:20:01,240 Speaker 4: the money needs to go through. They're a legal process, 385 00:20:01,280 --> 00:20:04,919 Speaker 4: score a legislative process, and I think there should be 386 00:20:04,920 --> 00:20:07,440 Speaker 4: a healthy debate. But I think using the Russian money 387 00:20:07,440 --> 00:20:10,720 Speaker 4: to rebuild Ukraine after the war is something should be 388 00:20:10,840 --> 00:20:11,920 Speaker 4: seriously considered. 389 00:20:12,560 --> 00:20:14,480 Speaker 2: Since you left the government. One of the big moves 390 00:20:14,480 --> 00:20:16,879 Speaker 2: you made, least the New York Community Bank buying it. 391 00:20:17,440 --> 00:20:19,080 Speaker 2: I give us here says to why that was a 392 00:20:19,080 --> 00:20:21,160 Speaker 2: good move. There's a lot of concern about regional banks 393 00:20:21,200 --> 00:20:24,680 Speaker 2: right now, although you know regional banks personally pretty will. 394 00:20:24,880 --> 00:20:26,960 Speaker 4: I've been in the banking business for a long time. 395 00:20:27,400 --> 00:20:30,560 Speaker 4: During the financial crisis, I've bought three banks from the FDIC. 396 00:20:31,160 --> 00:20:34,720 Speaker 4: We've branded the largest bank actually headquartered here in southern California, 397 00:20:34,880 --> 00:20:39,080 Speaker 4: one West. I've known New York Community Bank for the 398 00:20:39,160 --> 00:20:42,639 Speaker 4: last ten years. You know, this was a merger of 399 00:20:42,760 --> 00:20:47,840 Speaker 4: three institutions, and in them coming together, they didn't tap 400 00:20:47,880 --> 00:20:51,119 Speaker 4: the proper procedures for one hundred million dollar bank. They 401 00:20:51,200 --> 00:20:54,119 Speaker 4: ran in some issues with real estate. So we raised 402 00:20:54,160 --> 00:20:57,399 Speaker 4: over a billion dollars of capital. A very large portion 403 00:20:57,480 --> 00:21:01,800 Speaker 4: of that will be to build robust reserves. And we've 404 00:21:01,800 --> 00:21:05,960 Speaker 4: come out with a three year plan to restore profitability 405 00:21:06,000 --> 00:21:08,200 Speaker 4: to the bank, and by the end of twenty twenty six, 406 00:21:09,000 --> 00:21:11,520 Speaker 4: the management team is we'll deliver on a plan that 407 00:21:11,600 --> 00:21:14,480 Speaker 4: gets the bank to an eleven to twelve percent return 408 00:21:14,560 --> 00:21:18,160 Speaker 4: on tangible common equity and eleven to twelve percent CET. 409 00:21:18,320 --> 00:21:20,760 Speaker 4: Want to make it a well capitalized bank. 410 00:21:21,280 --> 00:21:23,520 Speaker 2: One of the things you've expressed interest is in TikTok 411 00:21:23,600 --> 00:21:26,080 Speaker 2: or by buying it from byte Dance. We now have 412 00:21:26,200 --> 00:21:29,239 Speaker 2: legislation with any years I send less than a year 413 00:21:29,320 --> 00:21:32,440 Speaker 2: now that unless they do something different, they're going to 414 00:21:32,480 --> 00:21:33,040 Speaker 2: have to sell it. 415 00:21:33,640 --> 00:21:36,760 Speaker 4: Are you still incident TikTok Fond's still very interested in 416 00:21:36,800 --> 00:21:39,000 Speaker 4: buying it, and to the extent they want to sell it, 417 00:21:39,400 --> 00:21:42,080 Speaker 4: we're spin it off. We very much want to pursue that. 418 00:21:42,960 --> 00:21:45,760 Speaker 4: I support that Congress passed the bill and has now 419 00:21:45,880 --> 00:21:48,520 Speaker 4: been signed into law. I will say this has had 420 00:21:48,600 --> 00:21:53,200 Speaker 4: just incredible overwhelming support with Republicans and Democrats. This may 421 00:21:53,240 --> 00:21:57,040 Speaker 4: be the only thing that everybody agrees on the fact 422 00:21:57,080 --> 00:21:59,439 Speaker 4: that it's on one hundred and sixty million phones. I 423 00:21:59,480 --> 00:22:02,159 Speaker 4: do think it's the security issue in the US, and 424 00:22:02,200 --> 00:22:04,600 Speaker 4: I'm glad I see it it's being addressed. 425 00:22:05,080 --> 00:22:07,600 Speaker 2: One of the big issues is the algorithm. Right, this 426 00:22:07,720 --> 00:22:11,920 Speaker 2: is very powerful for TikTok. Does the deal still work 427 00:22:12,320 --> 00:22:15,560 Speaker 2: if the algorithm doesn't come with Tikta Well. 428 00:22:15,440 --> 00:22:18,399 Speaker 4: The Chinese government has been very clear that they won't 429 00:22:18,480 --> 00:22:21,560 Speaker 4: give an ex work license on the algorithm, and I 430 00:22:21,680 --> 00:22:24,879 Speaker 4: understand that we have sensitive technology that we don't want 431 00:22:24,920 --> 00:22:26,880 Speaker 4: to transfer to them, and they don't want to transfer 432 00:22:26,920 --> 00:22:30,440 Speaker 4: this to the US. I've actually spoken to a lot 433 00:22:30,480 --> 00:22:33,919 Speaker 4: of tech companies I'm working about rebuilding this. I do 434 00:22:34,080 --> 00:22:37,840 Speaker 4: believe the algorithms could be rebuilt. So my plan, if 435 00:22:37,880 --> 00:22:40,520 Speaker 4: we were to purchase it would be to rebuild the 436 00:22:40,600 --> 00:22:45,919 Speaker 4: technology under US leadership, make sure that it's all disconnected 437 00:22:45,960 --> 00:22:49,880 Speaker 4: from bytdance going forward, and that it is very rope 438 00:22:49,880 --> 00:22:50,920 Speaker 4: Boston secure. 439 00:22:51,480 --> 00:22:53,360 Speaker 2: I understand at one point you says you might talk 440 00:22:53,400 --> 00:22:55,879 Speaker 2: to the former President Trump about this possibility. Do you 441 00:22:55,920 --> 00:22:57,840 Speaker 2: have a sense of where he is on this deal. 442 00:22:58,800 --> 00:23:01,000 Speaker 4: I haven't spoken to him since the law has been 443 00:23:01,040 --> 00:23:03,400 Speaker 4: passed on this. I've spoken to him on other issues. 444 00:23:04,000 --> 00:23:08,360 Speaker 4: But you know this started under his leadership, so I'm 445 00:23:08,400 --> 00:23:11,119 Speaker 4: sure he understands the national security issues and it was 446 00:23:11,440 --> 00:23:14,000 Speaker 4: under this his leadership that this really started. 447 00:23:15,119 --> 00:23:18,240 Speaker 2: You now are very active as a probate basket banker. 448 00:23:18,400 --> 00:23:21,880 Speaker 2: We have TikTok as a possibility, we have your community 449 00:23:21,920 --> 00:23:24,840 Speaker 2: bank done. What's the theory of the case, what's the 450 00:23:24,880 --> 00:23:27,520 Speaker 2: connection you what sorts of deals are you looking at? 451 00:23:27,800 --> 00:23:30,200 Speaker 4: So we have three areas that we focus on, which 452 00:23:30,200 --> 00:23:32,800 Speaker 4: are areas that we have a lot of expertise. The 453 00:23:32,880 --> 00:23:36,240 Speaker 4: first is technology with a big focus on national security 454 00:23:36,240 --> 00:23:40,760 Speaker 4: and cyber Along with myself, General Dunford, former Chairman of 455 00:23:40,760 --> 00:23:43,520 Speaker 4: the Joint Chiefs, is one of our partners. We also 456 00:23:43,600 --> 00:23:45,960 Speaker 4: have the person who ran the Cyber Task Force for 457 00:23:46,040 --> 00:23:50,160 Speaker 4: the government. The second area is spintech and financials. Again, 458 00:23:50,240 --> 00:23:53,520 Speaker 4: my General Council was General Council at Treasury and understands 459 00:23:53,560 --> 00:23:57,120 Speaker 4: all the regulatory issues. I've obviously been around banking for 460 00:23:57,119 --> 00:24:00,600 Speaker 4: forty years. And the last area is entertainment and where 461 00:24:00,600 --> 00:24:02,800 Speaker 4: you know, in my previous life I made a lot 462 00:24:02,840 --> 00:24:06,280 Speaker 4: of entertainment investments and where we're a big believer and 463 00:24:06,320 --> 00:24:10,080 Speaker 4: what we call new content and TikTok fits right in 464 00:24:10,160 --> 00:24:10,439 Speaker 4: with that. 465 00:24:10,720 --> 00:24:13,639 Speaker 2: Boy, you talk about a lot of turmoil the entertainment industry, 466 00:24:13,680 --> 00:24:15,639 Speaker 2: there's a lot of turmoil in media. We see it 467 00:24:15,640 --> 00:24:18,200 Speaker 2: everywhere we look right now, concluding with Paramoid most recently, 468 00:24:18,280 --> 00:24:21,000 Speaker 2: but Mileshop Disney, you know, has had some difficulties. There's 469 00:24:21,000 --> 00:24:23,800 Speaker 2: a lot of challenges Water Brothers Discovery as well. What 470 00:24:23,840 --> 00:24:25,840 Speaker 2: do you make of that? What is the future for 471 00:24:25,920 --> 00:24:27,560 Speaker 2: the media entertainment business? 472 00:24:28,000 --> 00:24:30,840 Speaker 4: I mean, I think to the extent these companies can 473 00:24:30,960 --> 00:24:37,080 Speaker 4: execute properly, there are very very good opportunities, particularly given 474 00:24:37,160 --> 00:24:40,399 Speaker 4: how low some of the values are on traditional media. 475 00:24:41,280 --> 00:24:43,639 Speaker 4: I don't think the traditional media is going to go 476 00:24:43,720 --> 00:24:48,320 Speaker 4: away overnight, but there's no question there's a complete transition 477 00:24:49,000 --> 00:24:51,560 Speaker 4: in the market from the way when we grew up 478 00:24:52,320 --> 00:24:57,520 Speaker 4: from network TV to streaming and not just streaming to 479 00:24:58,280 --> 00:25:01,679 Speaker 4: you know, short form video and lawn form video that 480 00:25:01,720 --> 00:25:04,200 Speaker 4: we see on TikTok, we see on Instagram, we see 481 00:25:04,240 --> 00:25:08,359 Speaker 4: on YouTube. So there is a whole new distribution model. 482 00:25:08,760 --> 00:25:12,800 Speaker 4: Having said that, you know, great content has a lot 483 00:25:12,840 --> 00:25:16,320 Speaker 4: of value, and a lot of these media companies have 484 00:25:16,480 --> 00:25:20,240 Speaker 4: an enormous library of great content that can be my 485 00:25:20,640 --> 00:25:23,960 Speaker 4: So I think distribution is a very important issue that 486 00:25:24,000 --> 00:25:25,280 Speaker 4: there needs to be a transition. 487 00:25:27,080 --> 00:25:29,760 Speaker 2: Coming up, we turned for a former Treasury secretary to 488 00:25:29,800 --> 00:25:32,840 Speaker 2: a former House Speaker, and that's Paul Ryan about what's 489 00:25:32,840 --> 00:25:36,240 Speaker 2: at stake for global Wall Street in this year's US elections. 490 00:25:37,080 --> 00:25:39,360 Speaker 2: That's next on Wall Street Week on Bloomberg. 491 00:25:40,760 --> 00:25:44,920 Speaker 1: This is Bloomberg Wall Street Week with David Weston from 492 00:25:45,080 --> 00:25:46,040 Speaker 1: Bloomberg Radio. 493 00:25:53,040 --> 00:25:55,080 Speaker 2: This is Wall Street Week. I'm David west and we 494 00:25:55,119 --> 00:25:57,919 Speaker 2: are here in Los Angeles from the Milican Conference, and 495 00:25:57,960 --> 00:25:59,919 Speaker 2: one of the subjects is the election coming up on 496 00:26:00,000 --> 00:26:02,960 Speaker 2: particularly what it means for the economy and for investors, 497 00:26:03,080 --> 00:26:04,880 Speaker 2: so they get through that we have somebody who knows 498 00:26:04,880 --> 00:26:06,880 Speaker 2: the economy terribly well as well as no I telling 499 00:26:06,880 --> 00:26:09,680 Speaker 2: about elections. He's Paul Rhime, former Speaker of the House, 500 00:26:10,040 --> 00:26:14,520 Speaker 2: is also at TENEO and now is partner of Solomeir Capital. So, 501 00:26:14,600 --> 00:26:16,080 Speaker 2: mister Speaker, thank you so much for jebet. 502 00:26:16,080 --> 00:26:16,960 Speaker 5: It's going to be with you, David. 503 00:26:17,080 --> 00:26:20,119 Speaker 2: The most basic question for a lot of Bloomberg viewers 504 00:26:20,200 --> 00:26:23,040 Speaker 2: is we have the election coming up, President's election, other election, 505 00:26:23,200 --> 00:26:26,399 Speaker 2: the entire Congress. What is the biggest economic issue at 506 00:26:26,480 --> 00:26:28,840 Speaker 2: state what could make a difference to the most of 507 00:26:28,880 --> 00:26:29,520 Speaker 2: the economy. 508 00:26:30,119 --> 00:26:32,600 Speaker 9: Number one would be tax policy. What's the tax go 509 00:26:32,720 --> 00:26:34,520 Speaker 9: to good to look like? What's tax policy looking like 510 00:26:34,560 --> 00:26:38,400 Speaker 9: in the future. Number two, I'd say tariffs. So number three, 511 00:26:38,880 --> 00:26:41,960 Speaker 9: I think it's reasonable to assume the next president is 512 00:26:43,240 --> 00:26:45,200 Speaker 9: quite possibly get to face a debt crisis. 513 00:26:46,160 --> 00:26:47,520 Speaker 4: You don't know when that is or. 514 00:26:47,520 --> 00:26:50,399 Speaker 9: Exactly what fulm that takes place, but a lot of 515 00:26:50,400 --> 00:26:56,040 Speaker 9: physical policies, online, tax policy, trade policy, debt policy, therefore 516 00:26:56,080 --> 00:26:56,720 Speaker 9: interest rates. 517 00:26:57,000 --> 00:26:59,399 Speaker 2: Third thing you mention was debt crisis. Debt crisis for 518 00:26:59,400 --> 00:27:01,800 Speaker 2: the next president. Whoever the next president is, take us 519 00:27:01,800 --> 00:27:03,440 Speaker 2: through that. We've all been talking about the debt and 520 00:27:03,480 --> 00:27:05,920 Speaker 2: the deficit, how much it's growing. He says, it's a problem. 521 00:27:05,960 --> 00:27:08,240 Speaker 2: Nobody does anything about it. It hasn't really come home 522 00:27:08,240 --> 00:27:08,920 Speaker 2: to loost yet. 523 00:27:08,960 --> 00:27:10,879 Speaker 9: It doesn't see it's what's a debt crisis loop like 524 00:27:11,600 --> 00:27:15,720 Speaker 9: bond auction failures. I mean, it's not inconceivable that once 525 00:27:15,760 --> 00:27:19,360 Speaker 9: the Fed's done cutting rates and people aren't buying bonds 526 00:27:19,680 --> 00:27:23,040 Speaker 9: is readily and you've got us and all these other 527 00:27:23,080 --> 00:27:28,000 Speaker 9: industrialized countries with the same problems, aging baby boomers, entitlement programs, 528 00:27:28,080 --> 00:27:31,800 Speaker 9: unfunded papering this, you know, floating all this paper in 529 00:27:31,840 --> 00:27:35,080 Speaker 9: the world markets. You could have an oversupply of bonds. 530 00:27:35,160 --> 00:27:38,040 Speaker 9: And it's not inconceivable on my mind. In a handful 531 00:27:38,040 --> 00:27:41,760 Speaker 9: of years next presidency, an auction or two fail and 532 00:27:41,800 --> 00:27:43,520 Speaker 9: then the Fed steps in and buys our paper, and 533 00:27:43,520 --> 00:27:46,359 Speaker 9: then they're really monetizing debt. It's bad for the dollar, 534 00:27:46,760 --> 00:27:48,160 Speaker 9: that's bad for dollar dominance. 535 00:27:48,400 --> 00:27:49,800 Speaker 4: That's an interest rate problem. 536 00:27:50,160 --> 00:27:52,520 Speaker 2: You know this terribly well, can we get our fiscal 537 00:27:52,560 --> 00:27:55,440 Speaker 2: house in order without increasing taxes. I'm not saying we 538 00:27:55,480 --> 00:27:58,080 Speaker 2: shouldn't cut some spending due. But can you do just 539 00:27:58,200 --> 00:27:59,040 Speaker 2: one and not for the other? 540 00:27:59,160 --> 00:28:00,840 Speaker 4: Yes, you can. For sure. 541 00:28:00,880 --> 00:28:02,400 Speaker 9: I can show you how to do it. I passed 542 00:28:02,440 --> 00:28:05,680 Speaker 9: four budgets in Congress that did it. But in politics 543 00:28:05,720 --> 00:28:09,080 Speaker 9: is that's a political question. My guess is if you 544 00:28:09,080 --> 00:28:11,000 Speaker 9: have divided government, there's gonna be a mixture of both. 545 00:28:11,400 --> 00:28:15,680 Speaker 9: I believe you can have a better, faster growing tax 546 00:28:15,760 --> 00:28:17,879 Speaker 9: code that still gets you higher revenue lines than what 547 00:28:17,960 --> 00:28:21,280 Speaker 9: we have today without doing damage to economic growth. Now, 548 00:28:21,320 --> 00:28:22,680 Speaker 9: the way I would do it would be a cash 549 00:28:22,720 --> 00:28:25,960 Speaker 9: flow tax to actually form. That's not the way Joe 550 00:28:26,000 --> 00:28:28,760 Speaker 9: Biden would do it. The question is can you get 551 00:28:28,760 --> 00:28:30,639 Speaker 9: more revenue for the federal government to get our debt 552 00:28:30,720 --> 00:28:34,000 Speaker 9: under control, hoppled with entitlement reforms, and do it in 553 00:28:34,080 --> 00:28:36,240 Speaker 9: a way that doesn't sacrifice economic growth. I think the 554 00:28:36,240 --> 00:28:39,239 Speaker 9: answer is yes to that, but nobody's talking like that 555 00:28:39,280 --> 00:28:41,520 Speaker 9: these days. I guess the question is what could you 556 00:28:41,560 --> 00:28:44,520 Speaker 9: do now, knowing we have debt problems in the future. 557 00:28:44,840 --> 00:28:46,720 Speaker 9: I think there's a couple of things Congress could do. 558 00:28:47,560 --> 00:28:49,600 Speaker 9: They're not but maybe they'll get something done. I think 559 00:28:49,600 --> 00:28:51,480 Speaker 9: stable point legislation would be a good step in the 560 00:28:51,560 --> 00:28:54,760 Speaker 9: right direction. That could be helpful that could be done 561 00:28:54,800 --> 00:28:57,080 Speaker 9: this year, but I don't see anything other than that 562 00:28:57,160 --> 00:28:57,840 Speaker 9: on the horizon. 563 00:28:57,880 --> 00:28:59,959 Speaker 2: Okay, a speaker, thank you so much for joining us year. 564 00:29:00,160 --> 00:29:04,600 Speaker 2: That's Paul, Ryan Tanail and Solomere happening. Real estate has 565 00:29:04,640 --> 00:29:07,240 Speaker 2: been something about punching bag for investors, and one of 566 00:29:07,240 --> 00:29:09,880 Speaker 2: the topics for discussion this week has been whether we've 567 00:29:09,880 --> 00:29:12,640 Speaker 2: seen the worst of it. Barry Stern looked off. Starwood 568 00:29:12,680 --> 00:29:16,040 Speaker 2: Capital was outspoken at the Milkon conference, and we asked 569 00:29:16,120 --> 00:29:19,040 Speaker 2: him about where he is looking for pockets of opportunity. 570 00:29:19,760 --> 00:29:23,800 Speaker 5: The good Fox Data senors are good blocks today, anything 571 00:29:23,840 --> 00:29:29,000 Speaker 5: with power. It's true. I think it's just interesting to see. 572 00:29:29,040 --> 00:29:31,040 Speaker 5: You know, the real estate is not you can't use 573 00:29:31,640 --> 00:29:34,400 Speaker 5: one word to describe in real estate, there's you can 574 00:29:34,400 --> 00:29:37,080 Speaker 5: play up and down the capitol side. You can make mortgages, 575 00:29:37,160 --> 00:29:41,160 Speaker 5: mezzanine mortgages, preferred equity, equity investments. You can buy homes, 576 00:29:41,160 --> 00:29:45,880 Speaker 5: you can buy students housing, senior housing, you can buy land, 577 00:29:46,240 --> 00:29:49,640 Speaker 5: you can buy a single fan for rent, build to rent, 578 00:29:49,760 --> 00:29:53,080 Speaker 5: you can buy industrial. I mean, there's so many different 579 00:29:53,680 --> 00:29:56,280 Speaker 5: flavors and it's hard. The one thing that is true 580 00:29:56,280 --> 00:29:59,040 Speaker 5: about the real estate market today is because of Powell's 581 00:29:59,120 --> 00:30:01,680 Speaker 5: rate movement. We have a sort of a balance geat crisis. 582 00:30:02,040 --> 00:30:04,320 Speaker 5: You know, we don't have an asset level crisis. For 583 00:30:04,360 --> 00:30:07,120 Speaker 5: the most part, the asset classes, at least the United 584 00:30:07,160 --> 00:30:10,200 Speaker 5: States are fairly in balance supply and demand. There's a 585 00:30:10,200 --> 00:30:12,800 Speaker 5: little bit of oversupply of multi family in some of 586 00:30:12,840 --> 00:30:16,120 Speaker 5: the growth markets, but that will get absorbed over the 587 00:30:16,120 --> 00:30:18,720 Speaker 5: next eighteen months and we'll be back to a very 588 00:30:19,080 --> 00:30:22,160 Speaker 5: healthy rent profile, I think. But for the most part, 589 00:30:22,480 --> 00:30:25,320 Speaker 5: people are gonna have trouble refinancing their debt because interest 590 00:30:25,360 --> 00:30:28,320 Speaker 5: rates shows five hundred basis points, and also many of 591 00:30:28,360 --> 00:30:32,800 Speaker 5: the traditional lenders, like the banks, are backing out because 592 00:30:32,840 --> 00:30:35,560 Speaker 5: they're full up to their gills in real estate loans. 593 00:30:35,960 --> 00:30:39,200 Speaker 2: Markets react to things like interest rates, like we're from home, 594 00:30:39,440 --> 00:30:43,160 Speaker 2: they also often overreact. Have there been overreactions on the 595 00:30:43,240 --> 00:30:46,600 Speaker 2: downside for office for example some places, or on the 596 00:30:46,680 --> 00:30:49,000 Speaker 2: upside for data centers because we hear so much about 597 00:30:49,080 --> 00:30:51,160 Speaker 2: data centers because they're a danger getting overbuilt. 598 00:30:51,640 --> 00:30:54,200 Speaker 5: There's a regulator in data centers because the project is 599 00:30:54,240 --> 00:30:55,920 Speaker 5: so expensive that if you don't have at least you 600 00:30:55,960 --> 00:30:59,480 Speaker 5: can't finance the construction. So it's almost impossible to overbuild it, 601 00:30:59,520 --> 00:31:01,840 Speaker 5: they will be people will buy land in the hope 602 00:31:01,880 --> 00:31:04,040 Speaker 5: of getting power, in the hope of getting a tenant, 603 00:31:04,320 --> 00:31:06,160 Speaker 5: and they may wind up losing a bunch of money 604 00:31:06,160 --> 00:31:08,040 Speaker 5: if they paid too much for land and it has 605 00:31:08,080 --> 00:31:10,600 Speaker 5: no alternative use other than their dream of someday getting 606 00:31:11,520 --> 00:31:13,920 Speaker 5: power power source. So I don't think. 607 00:31:14,000 --> 00:31:14,320 Speaker 2: I think. 608 00:31:14,840 --> 00:31:17,000 Speaker 5: I think with Stanley Druckenmiller was at this conference and 609 00:31:17,040 --> 00:31:19,200 Speaker 5: he said, like, it might be over hype short term, 610 00:31:19,280 --> 00:31:21,640 Speaker 5: but it's under hype long term, and I think that's 611 00:31:21,640 --> 00:31:24,400 Speaker 5: probably true. What we try to think. I try to 612 00:31:24,400 --> 00:31:27,560 Speaker 5: spend time thinking about is AI's implications on the real 613 00:31:27,640 --> 00:31:31,320 Speaker 5: estate markets, power things going to change, and then what's 614 00:31:31,400 --> 00:31:33,960 Speaker 5: going to do to de stabilize or support some of 615 00:31:34,000 --> 00:31:36,520 Speaker 5: our tenants? Right, so, which ones will go the way 616 00:31:36,560 --> 00:31:39,840 Speaker 5: of the Dodo bird, what industries will be heavily impacted, 617 00:31:39,880 --> 00:31:42,200 Speaker 5: and will they come up with new applications that require 618 00:31:42,240 --> 00:31:45,080 Speaker 5: them to keep as many people just doing different things, 619 00:31:45,760 --> 00:31:48,760 Speaker 5: or will they just have people do everything. I was 620 00:31:48,760 --> 00:31:50,959 Speaker 5: listening to Jenson Wang speak at a conference the other day, 621 00:31:51,000 --> 00:31:54,160 Speaker 5: and he showed how they can build a boat through AI, 622 00:31:54,320 --> 00:31:57,000 Speaker 5: a very complicated supertanker, and then he said, we can 623 00:31:57,000 --> 00:31:59,880 Speaker 5: build the factory that builds the boat, and then we'll 624 00:32:00,080 --> 00:32:02,800 Speaker 5: build the robots that build the boat in the factory. 625 00:32:03,040 --> 00:32:05,520 Speaker 5: And I'm like, where are the workers? What do we do? 626 00:32:05,800 --> 00:32:08,160 Speaker 5: I was thinking, well, I'm going to continue to best 627 00:32:08,160 --> 00:32:10,200 Speaker 5: heavily in resorts because everyone will have all this time 628 00:32:10,240 --> 00:32:12,120 Speaker 5: off and they'll be working from our hotels in Hawaii. 629 00:32:12,600 --> 00:32:14,920 Speaker 5: I think Ai, I think it is just the beginning. 630 00:32:15,160 --> 00:32:18,520 Speaker 5: I can I know how it's going to change so much, 631 00:32:19,040 --> 00:32:21,800 Speaker 5: and it's very exciting. And also, Terri, is. 632 00:32:21,720 --> 00:32:23,560 Speaker 2: There a day of reckoning coming in real estate? 633 00:32:23,680 --> 00:32:26,200 Speaker 5: The great thing about our system is capital willjust and 634 00:32:26,240 --> 00:32:28,800 Speaker 5: find the opportunities. I do think it's going to be 635 00:32:28,840 --> 00:32:31,160 Speaker 5: a rolling wall of thunder and you're going to every 636 00:32:31,200 --> 00:32:34,840 Speaker 5: time alone matures, it's a negotiation or an explosure. There's 637 00:32:34,880 --> 00:32:37,880 Speaker 5: an extension. A barer tries to come up with money, 638 00:32:38,160 --> 00:32:39,720 Speaker 5: he doesn't have it. He has to go to people 639 00:32:39,760 --> 00:32:43,320 Speaker 5: like us or in the old days there are doctors 640 00:32:43,360 --> 00:32:45,680 Speaker 5: and lawyers and friends and raise the money to pay 641 00:32:45,680 --> 00:32:48,440 Speaker 5: down the debt rather than give the asset back. It'll 642 00:32:48,440 --> 00:32:51,360 Speaker 5: be market by market, asset by asset. 643 00:32:51,680 --> 00:32:53,800 Speaker 2: You mentioned return to office. It wasn't that long ago. 644 00:32:53,840 --> 00:32:55,400 Speaker 2: It wasn't return to office in New York. It was 645 00:32:55,440 --> 00:32:58,000 Speaker 2: just leaving New York all together and moving to Miami. Yeah, 646 00:32:58,440 --> 00:33:00,600 Speaker 2: have we seen peak Miami for the time being, because 647 00:33:00,840 --> 00:33:03,320 Speaker 2: there was a time that everyone's rushing down there with 648 00:33:03,480 --> 00:33:05,600 Speaker 2: their employees and things that and now you're here, maybe 649 00:33:05,720 --> 00:33:07,480 Speaker 2: not so fast coming back a little bit. 650 00:33:08,040 --> 00:33:10,280 Speaker 5: Miami has an issue because of schools. It doesn't have 651 00:33:10,360 --> 00:33:13,000 Speaker 5: enough schools, and that that's probably the reason Miami's slowing. 652 00:33:13,040 --> 00:33:16,160 Speaker 5: But Amazon just announced they're moving taking fifty thousand feet. 653 00:33:16,600 --> 00:33:18,560 Speaker 5: There are a lot of companies that would move down 654 00:33:18,600 --> 00:33:22,080 Speaker 5: if they could get their employees' kids into schools, which 655 00:33:22,120 --> 00:33:27,200 Speaker 5: is impossible. So you got to be very bullish as Citadel, 656 00:33:27,200 --> 00:33:30,000 Speaker 5: which obviously left Chicago. I mean, they alone have decided 657 00:33:30,000 --> 00:33:32,320 Speaker 5: they're going to make Miami into the financial capital of 658 00:33:32,320 --> 00:33:34,360 Speaker 5: the United States, and they have the power to do that. 659 00:33:34,720 --> 00:33:37,840 Speaker 5: Ken is very philanthropic, and he's moved a lot of 660 00:33:38,160 --> 00:33:40,680 Speaker 5: fifteen hundred people into the market, and that affects the 661 00:33:40,720 --> 00:33:43,160 Speaker 5: housing market. We still were waiting. I mean, if I 662 00:33:43,240 --> 00:33:44,840 Speaker 5: was really smart, I'd just buy all the houses and 663 00:33:44,880 --> 00:33:47,920 Speaker 5: coral gables and sell them to the Citadel employees as 664 00:33:47,960 --> 00:33:51,000 Speaker 5: they moved down. I don't think Miami's peaked. I think 665 00:33:51,000 --> 00:33:54,040 Speaker 5: with Miami in Florida have sort of cycles because they 666 00:33:54,040 --> 00:33:56,640 Speaker 5: get overbuilt, but they're ever higher cycles. You just have 667 00:33:56,720 --> 00:33:59,240 Speaker 5: to have stamina and stay with it. The housing market, 668 00:34:00,080 --> 00:34:02,120 Speaker 5: you know, a four million our house became a ten 669 00:34:02,160 --> 00:34:04,280 Speaker 5: million dollar house, and now it's an eight million dollar house, 670 00:34:04,280 --> 00:34:05,760 Speaker 5: but it's still twice what the guy paid for it 671 00:34:05,800 --> 00:34:08,640 Speaker 5: four years ago, and really good stuff. I mean recently, 672 00:34:08,680 --> 00:34:13,839 Speaker 5: Barry Dillar moved down. Jeff Bezos has moved down. I 673 00:34:13,880 --> 00:34:18,160 Speaker 5: anticipated the climate, you know that obviously the weather's bettering 674 00:34:18,160 --> 00:34:21,200 Speaker 5: the winner. I anticipated the tax savings, and obviously for 675 00:34:21,280 --> 00:34:24,719 Speaker 5: the darkness Blue States, it's material. I didn't anticipate how 676 00:34:24,880 --> 00:34:28,120 Speaker 5: welcoming the state is to business and how success is 677 00:34:28,800 --> 00:34:31,520 Speaker 5: actually a praud and not vilified. So I think for 678 00:34:31,719 --> 00:34:34,200 Speaker 5: businesses that's that's a nice thing. The state wants you 679 00:34:34,239 --> 00:34:36,799 Speaker 5: to succeed, and they want to attract business and maybe 680 00:34:36,840 --> 00:34:39,680 Speaker 5: the Blue States. I mean, the governor of Larida said, 681 00:34:39,880 --> 00:34:41,200 Speaker 5: I guess he got on a phone call with the 682 00:34:41,200 --> 00:34:43,600 Speaker 5: governor of York and said, you know, stop taking my 683 00:34:43,600 --> 00:34:45,920 Speaker 5: peoples all. He says, every time you talk, I get 684 00:34:45,960 --> 00:34:46,440 Speaker 5: another ten. 685 00:34:47,880 --> 00:34:50,960 Speaker 2: Barrier made the news this week about Brown You've been 686 00:34:51,000 --> 00:34:53,680 Speaker 2: a loyal supporter of Brown. Have done awful lot of 687 00:34:53,680 --> 00:34:55,200 Speaker 2: good for that school. You said for the time being, 688 00:34:55,239 --> 00:34:58,120 Speaker 2: as I understand, you're going to really suspend further diasans. 689 00:34:58,480 --> 00:35:00,279 Speaker 2: Why were you so upset about what they data is? 690 00:35:00,280 --> 00:35:01,880 Speaker 2: I understand what they did is they agreed with the 691 00:35:01,920 --> 00:35:05,040 Speaker 2: students they would talk about divestment. They just talk about it. 692 00:35:05,040 --> 00:35:06,200 Speaker 2: What's so wrong about talking? 693 00:35:07,800 --> 00:35:10,560 Speaker 5: I think schools and the country needs to get back 694 00:35:10,600 --> 00:35:14,239 Speaker 5: to facts, get to the truths. One in one is two, 695 00:35:14,600 --> 00:35:16,640 Speaker 5: It's not four, even if the students tell you it's 696 00:35:16,640 --> 00:35:19,200 Speaker 5: forwards two. And I think I think the only place, 697 00:35:19,360 --> 00:35:21,760 Speaker 5: the number one place you should seek the truth teach 698 00:35:21,800 --> 00:35:25,160 Speaker 5: the truth is universities and schools of our education. If 699 00:35:25,200 --> 00:35:28,880 Speaker 5: in fact, these universities don't approve bds, they don't divest 700 00:35:28,880 --> 00:35:31,720 Speaker 5: from Israel, the kids will say, people like me influence 701 00:35:31,800 --> 00:35:34,759 Speaker 5: the board. They need to know the facts first. I 702 00:35:34,800 --> 00:35:37,640 Speaker 5: am about the facts. And if you know the facts, 703 00:35:37,640 --> 00:35:40,440 Speaker 5: and then your pro Palasini or pro Hamas. I'm not anti. 704 00:35:40,600 --> 00:35:43,399 Speaker 5: I think I believe in Tuesday solution, but I don't 705 00:35:43,440 --> 00:35:46,200 Speaker 5: believe in the right to return because there'll be no Israel. 706 00:35:46,520 --> 00:35:49,399 Speaker 2: So given what we know, what should Brown have done 707 00:35:49,440 --> 00:35:52,000 Speaker 2: it for that matter, not just Brown Colombia, my alla 708 00:35:52,080 --> 00:35:54,120 Speaker 2: man of years in Michigan. This is a problem across 709 00:35:54,160 --> 00:35:55,000 Speaker 2: a lot of Hollywood. 710 00:35:55,239 --> 00:35:56,640 Speaker 4: If they should the adults. 711 00:35:56,280 --> 00:36:00,440 Speaker 5: Do encourage free speech and debate, not violence, not hate speech. 712 00:36:00,960 --> 00:36:05,000 Speaker 5: No child should have a fear for his safety walking 713 00:36:05,000 --> 00:36:08,719 Speaker 5: around a university campus. Get rid of the agitators. I 714 00:36:08,719 --> 00:36:13,080 Speaker 5: mean it should occur to somebody that the first the 715 00:36:13,120 --> 00:36:16,320 Speaker 5: attack on Israel on October seventh was right. The rumor 716 00:36:16,440 --> 00:36:20,800 Speaker 5: was the Saudi Israeli peace conflict was going to be solved. 717 00:36:21,440 --> 00:36:25,560 Speaker 5: This well orchestrated campus demonstration happened after I ran shot 718 00:36:25,600 --> 00:36:29,560 Speaker 5: three hundred missiles into Israel, and Israel responded with sort 719 00:36:29,560 --> 00:36:31,640 Speaker 5: of a light touch, like we can get you, but 720 00:36:31,760 --> 00:36:34,319 Speaker 5: don't you know where here? And then they pulled back 721 00:36:34,400 --> 00:36:36,920 Speaker 5: right because the administrations that don't do anything, and they 722 00:36:37,040 --> 00:36:39,759 Speaker 5: kind of did, but nothing right. The world sentiment was 723 00:36:39,800 --> 00:36:43,319 Speaker 5: shifting against Israel. Unleashed the krack and let the kids 724 00:36:43,440 --> 00:36:46,040 Speaker 5: protest all across the United States campuses. It was well 725 00:36:46,120 --> 00:36:50,400 Speaker 5: orchestrated by these SJAP and all these organizations that are 726 00:36:50,440 --> 00:36:55,920 Speaker 5: being funded by some left wing organizations. If I were 727 00:36:55,960 --> 00:36:59,279 Speaker 5: the president of Brown, I would say we stand with 728 00:36:59,320 --> 00:37:03,240 Speaker 5: the democracy and free speech. We stand Israel's not an aparte. 729 00:37:03,280 --> 00:37:06,200 Speaker 5: I'd state, here's the proof, Israel's not committing genocide. Here's 730 00:37:06,239 --> 00:37:09,480 Speaker 5: the proof. If you don't like it, I understand, that's great, 731 00:37:09,719 --> 00:37:12,680 Speaker 5: leave your keys on my desk and go to another university. 732 00:37:12,880 --> 00:37:15,920 Speaker 5: You know, my father survived Germany, so I have a 733 00:37:15,960 --> 00:37:17,439 Speaker 5: lot to say. I'm just not going to be quiet 734 00:37:17,440 --> 00:37:17,839 Speaker 5: about it. 735 00:37:18,920 --> 00:37:20,600 Speaker 2: It's clear you feel strongly about it, and a lot 736 00:37:20,640 --> 00:37:22,520 Speaker 2: of people feel strongly about it. But when you make 737 00:37:22,560 --> 00:37:24,319 Speaker 2: a decision like I'm not going to contribute for the 738 00:37:24,360 --> 00:37:27,399 Speaker 2: time being, is that an expression of your views, your 739 00:37:27,440 --> 00:37:29,800 Speaker 2: principles to the phils was talking about, or is it 740 00:37:29,800 --> 00:37:31,680 Speaker 2: an attempt to change behavior? Do you think it go 741 00:37:31,719 --> 00:37:34,320 Speaker 2: beyond an expression to actually change behavior? 742 00:37:34,520 --> 00:37:38,000 Speaker 5: Like I don't. I don't think these universities. Christina Faxson 743 00:37:38,080 --> 00:37:41,320 Speaker 5: is a great president at Brown University. She's trying really hard. 744 00:37:41,760 --> 00:37:44,160 Speaker 5: She's got she's got. You know, these universities have very 745 00:37:44,239 --> 00:37:47,080 Speaker 5: left leaning faculties. You know, you should not have a 746 00:37:47,120 --> 00:37:49,759 Speaker 5: preten year professor who said there was no Holocaust. How 747 00:37:49,800 --> 00:37:52,640 Speaker 5: can that person how can you teach that at Columbia University? 748 00:37:52,840 --> 00:37:55,000 Speaker 5: How could that person have a job. And if you 749 00:37:55,200 --> 00:37:57,640 Speaker 5: thought that was fair, If you had a professor who 750 00:37:57,640 --> 00:38:00,319 Speaker 5: said there was no slavery, it didn't happen, would you 751 00:38:00,320 --> 00:38:02,680 Speaker 5: have him as a tenured professor. Or if a professor 752 00:38:02,719 --> 00:38:05,719 Speaker 5: who's saying celebrates and thinks that the at Cornell who 753 00:38:05,760 --> 00:38:09,680 Speaker 5: thought the Hamas should be celebrated killing innocent children and parents, 754 00:38:09,680 --> 00:38:12,000 Speaker 5: I mean they should be shown the door. And I 755 00:38:12,000 --> 00:38:13,359 Speaker 5: don't want to pay for them. So I don't want 756 00:38:13,360 --> 00:38:15,640 Speaker 5: to support a university of houses. That language. 757 00:38:15,840 --> 00:38:18,600 Speaker 2: That was Barry Sterling of Starwood Capital. That does it. 758 00:38:18,680 --> 00:38:21,160 Speaker 2: For this special episode of Wall Street Week, coming from 759 00:38:21,200 --> 00:38:24,480 Speaker 2: the Milkene Conference in Beverly Hills, I'm David Weston. This 760 00:38:24,600 --> 00:38:27,719 Speaker 2: is Bloomberg. See you next week from back in New York.