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Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm pim

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Speaker 1: Fox along with my co host Lisa Abramowitz. Each day

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Speaker 1: we bring you the most important, noteworthy, and useful interviews

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Speaker 1: for you and your money, whether you're at the grocery

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Speaker 1: store or the trading floor. Find the Bloomberg P M

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Speaker 1: L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com.

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Speaker 1: I want to bring in Greg Han. He is the

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Speaker 1: president and the chief investment officer for Winthrop Capital Management.

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Speaker 1: They are based in Indianapolis, but he joins us here

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Speaker 1: in studio. Greg, thank you very much for being here.

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Speaker 1: Let's go right to the idea of leverage loans and

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Speaker 1: what does the leverage loan market tell you right now?

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Speaker 1: Right now, the leverage loan market is probably the biggest

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Speaker 1: source of fear in the bond market. We are on

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Speaker 1: the front end potentially of a change in the credit cycle,

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Speaker 1: and we expect that to express express itself through the

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Speaker 1: leverage loan market. Traditionally it would go through the banking sector,

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Speaker 1: but a lot of that's been pushed into the market now.

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Speaker 1: So what does that mean? So UM products like business

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Speaker 1: development corporations and commercial clos um collateralized loan obligations are

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Speaker 1: are at they have a different risk profile. They use

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Speaker 1: that as their collateral, and if it starts to deteriorate,

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Speaker 1: we'll see deterioration in those products. But I meant, if

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Speaker 1: this is sort of the epicenter of the next problem

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Speaker 1: in credit markets, how does that unfold? What does that

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Speaker 1: look like? It starts with restructuring of the underlying loans.

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Speaker 1: So the small business that does alone, it's a highly

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Speaker 1: leveed loan, UH can't make its its interest payment because

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Speaker 1: of rising interest rates or covenant breach, and so it

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Speaker 1: needs to restructure that loan. If that happens ten times

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Speaker 1: inside of one of these pooled products, then that that

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Speaker 1: that's a source of deterioration, and that impacts the products

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Speaker 1: ability to pass cash flow onto its investor. Having said that,

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Speaker 1: our current investors getting paid for the risks they're taking.

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Speaker 1: So I would say, given the increase in volatility that

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Speaker 1: we're experiencing right now, yes, However, if you look at

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Speaker 1: two thousand and eighteen with the low spread volatility and

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Speaker 1: low volatility and the the equity market leading up to the

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Speaker 1: fourth quarter, then that was really that was really the

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Speaker 1: question is are really compensated for the risk, and then

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Speaker 1: I would say, no, it's only when we see increased

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Speaker 1: volatility and these price adjustments as really the price of

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Speaker 1: risk readjusting itself in the market place. Right now, now

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Speaker 1: we look at it and say, yeah, we're we're compensated.

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Speaker 1: All right, Greg, I want to widen out a little

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Speaker 1: bit because you just recently put out your outlook for

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Speaker 1: next year, and let's just start with the first line.

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Speaker 1: There's no other way to say it. The financial position

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Speaker 1: of the United States is a disaster. So what does

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Speaker 1: that mean? I mean, are we headed toward an imminent

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Speaker 1: recession or deterioration? Is it going to happen in the

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Speaker 1: first quarter of the fourth quarter? What's your what's your forecast?

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Speaker 1: Hear No, So we are not forecasting a recession. We're

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Speaker 1: forecasting an economic slowdown in the second half of two

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Speaker 1: thousand nineteen. But that that first sentence was really encapsulated

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Speaker 1: a bigger thesis we have that our form of democracy

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Speaker 1: and our form of capitalism are evolving. That's not a

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Speaker 1: political statement, it's just for us to really understand how

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Speaker 1: do you how do you invest in today's market relative

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Speaker 1: to years ago? We have to look at it and

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Speaker 1: say wait a minute, this this this democracy is evolving.

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Speaker 1: And look what's going on over in Europe with with Italy, Britain, France, Germany,

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Speaker 1: all of these governments are going through some form of chaos.

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Speaker 1: Ours is just we've we've spent a lot of money

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Speaker 1: since the financial crisis to get this economy moving at

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Speaker 1: a time when we're growing, but we're running huge budget

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Speaker 1: deficits that all turns into debt. All right, So if

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Speaker 1: that turns into debt, does it ever have to be repaid?

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Speaker 1: That is a great question. I I I honestly don't

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Speaker 1: think it does. I think I'm waiting for Wall Street

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Speaker 1: to come up with the the vision for how we

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Speaker 1: turn all of this into one great, big zero coupon

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Speaker 1: bond on the Fed's balance sheet and and it never

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Speaker 1: becomes a problem. But well, so, Greg, what does this

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Speaker 1: mean in terms of how you position your investments? What's

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Speaker 1: been the biggest change you've made recently to your actual

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Speaker 1: investing portfolio? So we've made a couple changes. The that

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Speaker 1: we've been we've been moving this whole period of time

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Speaker 1: has been the up and quality trade in the bond portfolios.

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Speaker 1: And um so now we're seeing we're actually seeing just

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Speaker 1: more opportunities. Spreads widen A lot of this Leasa's technical.

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Speaker 1: We expect there was heavy supply coming into December. We

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Speaker 1: expect that to slow down. But with the increase in

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Speaker 1: spread volatility, the decline in interest rates, it spreads widen.

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Speaker 1: When you say up in quality, does that mean investment

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Speaker 1: grade over high yield? Does it mean A over triple B?

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Speaker 1: I mean, what are you talking about. Most of the

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Speaker 1: market now is triple B, but it really means that

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Speaker 1: we're moving up towards the higher end of triple B

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Speaker 1: into single A. We like the banking sector. Here's the paradox.

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Speaker 1: The yield curve inverts, right, So everyone thinks that banks

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Speaker 1: should lose money, but remember this is post Glass Stiegel.

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Speaker 1: Banks have a lot more levers and a lot more

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Speaker 1: drivers to revenue than they did when all they did

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Speaker 1: was make loans and and collect deposits. So in a

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Speaker 1: world where it's post Glass Stiegel, we think this actually

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Speaker 1: is a period of time for banking upgrades. Given the

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Speaker 1: increased capital positions and having looked at what's happened to

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Speaker 1: bank stocks in the last week, they're all hit new

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Speaker 1: fifty two week lows. Have you been buying. We've been well,

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Speaker 1: we've been in the market buying the bank stock, the position,

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Speaker 1: and we're we're neutral on banks stocks right now, but

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Speaker 1: we're finding other opportunities. I liken it to kids in

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Speaker 1: a candy store and Saturday morning cartoons. That sounds pretty good.

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Speaker 1: Thank you so much for being with us kids in

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Speaker 1: a candy store. Perhaps for you kids in a guitar store,

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Speaker 1: but we won't go there. Greg Han is President and

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Speaker 1: Chief Investment Officer of Winthrop Capital Management, based in Indianapolis,

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Speaker 1: but joining us here in our eleven three oh studios

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Speaker 1: in New York, We're gonna stay in the sort of

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Speaker 1: circle around perhaps the top executive of the United States

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Speaker 1: that is now landing in the court system, with Russia

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Speaker 1: in particular in focus. Let's talk about alleged alleged Russian

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Speaker 1: operative Maria Maria Boutina, who was not initially cooperating with

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Speaker 1: federal prosecutors but now is pleading guilty. So let's start

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Speaker 1: with who is Maria Boutina and why is her guilty

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Speaker 1: plea important joining us as Richard Khan, managing partner at

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Speaker 1: eur Asia Advisors in New York, which focuses on Russia

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Speaker 1: and and banking in Russia. He has a ton of

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Speaker 1: experience working in Russia with Russian businesses, Richard, So let's

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Speaker 1: start there about Maria Puttina, Well, in terms of who

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Speaker 1: she is, she has been identified as basically a Russian

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Speaker 1: agent who did not disclose herself as such. And uh

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Speaker 1: she apparently um and will learn more about it was

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Speaker 1: being utilized by Russia too, both influence the n A

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Speaker 1: and its positions, and possibly act as a resource to

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Speaker 1: you know, direct funding two different political groups, perhaps through

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Speaker 1: the n r A. So she is a really a

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Speaker 1: treasure trove for our security forces in the United States

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Speaker 1: to try to figure out how Russia operates in this area,

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Speaker 1: the subtlety of their activities with different organizations, the n

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Speaker 1: r A being the one that's now been identified, but

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Speaker 1: there may be others. And uh, so she's a very

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Speaker 1: significant resource for us. What do you believe the Russian

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Speaker 1: leadership is thinking or feeling based on this news, Well,

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Speaker 1: based on that particular news, I'm sure they're pretty unhappy.

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Speaker 1: They don't want their spycraft to be revealed. I also

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Speaker 1: think they do not wish people in the United States

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Speaker 1: to wake up to the level of subtle interference in

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Speaker 1: our politics and in our institutions. That takes place by

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Speaker 1: utilizing already existing and embedded organizations to both influenced by

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Speaker 1: argument and also through money our political process. UH. In

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Speaker 1: other words, I think what this is going to lead

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Speaker 1: to is people recognizing that this huge scandal we're living through,

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Speaker 1: this nightmare, is not just about Trump and people around him.

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Speaker 1: It potentially has far broader implications. So Maria Bottina is

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Speaker 1: set to plead guilty to conspiring to act as an

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Speaker 1: agent of the Kremlin aside from the n R A

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Speaker 1: who who has not yet been named, may get kind

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Speaker 1: of wrapped up in this as more information trickles out.

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Speaker 1: Given what I've seen in terms of how Russia operates

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Speaker 1: in other locations, including within its own country UH, I

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Speaker 1: would be surprised if we are not UH in the

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Speaker 1: US already investigating UH cash flow going through religious institutions.

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Speaker 1: I think that is a classic device used by Russia.

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Speaker 1: Religious organizations UM have various special protections in the United States,

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Speaker 1: very difficult to attack them to get information about them.

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Speaker 1: These types of charitable organizations and foundations are a prime

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Speaker 1: resource for UH, for Russian intelligence and other areas, and

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Speaker 1: it's a It's a very difficult area to uh uh

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Speaker 1: to fight against because one can always make the argument, look,

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Speaker 1: you know, we we share the perspectives of Russia on

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Speaker 1: particular social issues, and so all we're doing is we're

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Speaker 1: advancing our own agenda. So finding the line between basically

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Speaker 1: becoming an agent of some sort of Russia in terms

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Speaker 1: of advancing it's agenda and only advancing, if you will,

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Speaker 1: the the value system of a particular organization is not

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Speaker 1: an easy one to find. That's again why the subtlety

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Speaker 1: is so effective. Um, and I do think we're going

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Speaker 1: to find in a long term that that money has

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Speaker 1: flown through that way. Do you believe that this is

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Speaker 1: going to complicate the already complicated and fraught relationship between

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Speaker 1: the United States and Russia? Or is the relationship already

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Speaker 1: gone to a point where you know, nothing can make

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Speaker 1: it even worse. Well, you know, with the bombers landing

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Speaker 1: in Venezuela, obviously things can always get worse. Tell people

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Speaker 1: about this. This is about aircraft, so a Russian aircraft

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Speaker 1: that have been transferred to Venezuela that are capable of

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Speaker 1: carrying nuclear weapons. Sure, this has echo is obviously of

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Speaker 1: the Cuban missile crisis, when Russia placed nuclear what was

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Speaker 1: trying to place nuclear weaponry very close to us in

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Speaker 1: the Caribbean. This is further away. Venezuela is a lot

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Speaker 1: further away than Cuba. On the other hand, that they

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Speaker 1: now have jets that can travel twice the speed of sound. Um,

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Speaker 1: and so it's never a comfortable thing to have bombers

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Speaker 1: that are capable of carrying nuclear weapons in such proximity. So, yeah,

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Speaker 1: this is Russia's way of one signaling some uh, disappointment

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Speaker 1: in Trump's view that he wants to withdraw from the

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Speaker 1: I n F. It's also more directly an analogy to

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Speaker 1: the situation in Ukraine, where um, from the Russian perspective,

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Speaker 1: we're interfering in their backyard and we've been supplying weaponry

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Speaker 1: there and Russians are saying, well, fine, you know we

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Speaker 1: we can once again come into the Caribbean and let

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Speaker 1: you know how it feels. I'm wondering, just in light

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Speaker 1: of the rising tensions, in the rising awareness of Russia's

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Speaker 1: influence in US elections, what does that mean from your

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Speaker 1: perspective for the elections? Does that mean that we're actually

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Speaker 1: going to be more protected because people are going to

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Speaker 1: be more aware of these influences. Well, quite honestly, I

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Speaker 1: am concerned about it. I think there are various levels

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Speaker 1: to it. Uh. I do think people are hopefully going

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Speaker 1: to be more aware that the information that they're receiving

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Speaker 1: uh may have been influenced by a non US party.

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Speaker 1: What type of information just give us a sense. Well,

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Speaker 1: for example, if they see advertising taking place or messaging

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Speaker 1: on Facebook or any other social media platforms. Uh, these organizations,

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Speaker 1: meaning the social media platforms are stepping up and trying

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Speaker 1: to do more to protect us from that or at

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Speaker 1: least identify the sources. But I think people are more

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Speaker 1: savvy now about the risk of that, So in that

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Speaker 1: in that one area, I'm a bit more hopeful. Uh.

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Speaker 1: I do worry that we need to be much more

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Speaker 1: aggressive and hardening our defensive capabilities at the accounting of votes,

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Speaker 1: the registering of votes. UH, Russians or should never be

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Speaker 1: underestimated in their capabilities when it comes to essentially cyber

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Speaker 1: crime if if they want to do that. Uh. Obviously

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Speaker 1: most of defense is trying to get people not to

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Speaker 1: want to attack you. But we are in a mode

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Speaker 1: now where I do view that as an ongoing risk

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Speaker 1: in our state systems. Many of them are antiquated, and

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Speaker 1: I'm not confident that the current administration has a particular

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Speaker 1: incentive to do all it can to harden those assets.

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Speaker 1: Give you about twenty seconds. Current business practice as you

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Speaker 1: know it is it hardened to the point where it

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Speaker 1: can defend itself and repel attacks from state sponsored cyber attacks.

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Speaker 1: When when I've seen no, I think it's an ongoing battle.

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Speaker 1: We see cyber attacks constantly, both from state actors and

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Speaker 1: perhaps even more uh, you know, frighteningly from non state actors. Certainly,

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Speaker 1: one thing the Russians are concerned about and want to

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Speaker 1: talk to us about is safeguarding, for example, nuclear codes

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Speaker 1: and stockpile of worrying about the non state actors. Uh.

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Speaker 1: At least when we're dealing with China and Russia, we

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Speaker 1: have responsible people we can talk to. Thank you very

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Speaker 1: much for being one of them. Much appreciated. Richard Kahn

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Speaker 1: is managing partner for Eurasia Advisors. There's a growing kind

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Speaker 1: of groundswell of complaint that there was a real estate

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Speaker 1: law passed at the end of last year that is

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Speaker 1: basically giving kickbacks to some key political figures joining us now,

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Speaker 1: as Caleb Melby, financial investigations reporter for Bloomberg News, we

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Speaker 1: are talking about these opportunity zones. Can you just start

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Speaker 1: by telling us what those are? When it was passed

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Speaker 1: and why? Sure? Yeah, they were part of President Trump's

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Speaker 1: November tax bill. And basically how they work is is UH,

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Speaker 1: governors get to choose of there are sensibly poor census

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Speaker 1: tracks um, UH to get a suite of very generous

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Speaker 1: tax benefits. And UH. Specifically, if you sell an asset

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Speaker 1: and you invest the capital gains into one of these zones, UM,

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Speaker 1: you get to defer your capital gains. If you hold

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Speaker 1: it for at least seven years, you get up to

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Speaker 1: a permanent discount on those capital gains. And most importantly,

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Speaker 1: if you hold the new asset for at least a decade,

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Speaker 1: you pay no capital gains on that when you sell.

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Speaker 1: So it's a really good deal for people who can

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Speaker 1: make this work. UM. But as we and others have

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Speaker 1: been drilling into what places have been selected, some of

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Speaker 1: these zones look less poor than others. And of course

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Speaker 1: there's a lot of people around the President himself who

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Speaker 1: seemed to be let's just say, early movers to take

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Speaker 1: advantage of these designations. Well, yeah, that that's where the

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Speaker 1: next question is what about the ethical consideration and about

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Speaker 1: who gets to participate in these zones and their relationship

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Speaker 1: with the lawmakers or the president that had something to

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Speaker 1: do with all this. Yeah, well that's exactly it. So,

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Speaker 1: so two people that uh that stick out are Kushner

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Speaker 1: Companies UM, owned by the family of presidential son in

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Speaker 1: law and senior advisor Jared Kushner UM. And then another

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Speaker 1: early mover is Anthony Scaramucci whose Skybridge Capital is looking

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Speaker 1: to take advantage of this as well. When you say

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Speaker 1: early mover, what do you mean exactly? So, yeah, right now,

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Speaker 1: Treasury is still finalizing rules for opportunity zones, and a

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Speaker 1: lot of investors are really scared to make investments based

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Speaker 1: solely on what they perceived to be the tax benefits

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Speaker 1: right now. But to take full advantage of the tax benefits,

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Speaker 1: you also need to make your moves before December of nineteen.

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Speaker 1: So the fact that people buying large haven't been investing

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Speaker 1: yet and are still waiting for those rules to come down,

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Speaker 1: but people who are closer to the administration are making

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Speaker 1: these moves early while rules are still being finalized is

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Speaker 1: causing concern for some people, Caleb, Is there any understanding

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Speaker 1: as to why the rules have to be so complicated?

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Speaker 1: It does seem to harken back to a certain type

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Speaker 1: of policy making made popular in the nineties nineties and

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Speaker 1: moving into the early two thousands, where you have these

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Speaker 1: broad societal problems under investment in poor communities. UM. But

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Speaker 1: rather than trying to create, UM, some sort of government

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Speaker 1: programs to grapple with this, we're basically going to try

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Speaker 1: and incentivize participants in the market to solve these problems

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Speaker 1: for us. Just to push back a little bit, has

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Speaker 1: this idea been floated before President Trump came to office?

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Speaker 1: In other words, was this something that was a popular

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Speaker 1: cause on a bipartisan level earlier? Well, it's certainly. Uh,

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Speaker 1: It's seen previous iterations. The most recent example to the

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Speaker 1: opportunity zone would be enterprise zones that existed beforehand. And yes,

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Speaker 1: the language that went into the tax bill did have

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Speaker 1: bipartisan support, so uh, um it was actually UM. One

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Speaker 1: person who worked really hard to pitch it UM was

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Speaker 1: Sean Parker, the Facebook investor UM, and he worked closely

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Speaker 1: with Tim Scott, the Republican Senator from South Carolina. Um.

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Speaker 1: But then another backer was Corey Booker, the Democratic senator

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Speaker 1: from New Jersey. And is it worth noting that any

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Speaker 1: time you have a tax advantaged investment, in this case

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Speaker 1: having to do with opportunity zones and real estate, that

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Speaker 1: ultimately the US taxpayer ends up subsidizing this in the

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Speaker 1: form of lost tax revenue. Yeah, that's exactly it. And um,

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Speaker 1: in terms of talking about alleviating poverty spurring investment, um, Uh,

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Speaker 1: I can tell you We've been talking to a lot

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Speaker 1: of developers, a lot of investors, a lot of lawyers.

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Speaker 1: The the idea of alleviating poverty is uh. I mean

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Speaker 1: most people want to do Yeah, they want to do it,

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Speaker 1: but it's it's not what they're they're they're devoting their

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Speaker 1: energy what they professionally do. But Caleb, I mean, just

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Speaker 1: to be clear here, the issue is the first mover aspect.

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Speaker 1: The key is can inside executives or officials represent elective

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Speaker 1: officials representatives use information that they have, uh, that other

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Speaker 1: people do not have to make investments that will inevitably

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Speaker 1: be lucrative. Well, and again we should be clear. So

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Speaker 1: so Jared Kushner's lawyers and representatives say he's had nothing

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Speaker 1: to do with the family business since taking office. Anthony

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Speaker 1: Scaramucci famously was only part of the administration for ten days.

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Speaker 1: He's somebody who uh surrounds the White House but is

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Speaker 1: not part of it. Um so so the idea that

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Speaker 1: we there's no sense that there's actual like insider information

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Speaker 1: is anybody who would listen to the show popularly understands it,

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Speaker 1: just just so much as a familiarity and a confidence

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Speaker 1: around the tax advantages with with this aspect of the

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Speaker 1: tax lock. Thanks very much for being with us. Always

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Speaker 1: a pleasure, and thanks for explaining all this. Caleb Melby

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Speaker 1: is our financial investigations reporter for Bloomberg News. You can

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Speaker 1: follow him on Twitter as we all do at Caleb Melby,

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Speaker 1: m E. L. B Y. I want to bring in

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Speaker 1: Greg Han. He is the president and the chief investment

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Speaker 1: officer for Winthrop Capital Management. They are based in Indianapolis,

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Speaker 1: but he joins us here in studio. Greg, thank you

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Speaker 1: very much for being here. Let's go right to the

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Speaker 1: idea of leverage loans and what does the leverage loan

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Speaker 1: market tell you right now? Right now, the leverage loan

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Speaker 1: market is probably the biggest source of fear in the

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Speaker 1: bond market. We are on the run end potentially of

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Speaker 1: a change in the credit cycle, and we expect that

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Speaker 1: to express express itself through the leverage loan market. Traditionally

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Speaker 1: it would go through the banking sector, but a lot

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Speaker 1: of that's been pushed into the market now. So what

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Speaker 1: does that mean? So UM products like business development corporations

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Speaker 1: and commercial clos um collateralized loan obligations are are at

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Speaker 1: they have a different risk profile. They use that as

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Speaker 1: their collateral, and if it starts to deteriorate, we'll see

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Speaker 1: deterioration in those products. But I meant if this is

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Speaker 1: sort of the epicenter of the next problem in credit markets,

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Speaker 1: how does that unfold? What does that look like? It

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Speaker 1: starts with restructuring of the underlying loans. So the small

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Speaker 1: business that does alone it's a highly leveed loan, UH

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Speaker 1: can't make its its interest payment because of rising interest

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Speaker 1: rates or covenant breach, and so it needs to restructure

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Speaker 1: that loan. If that happens ten times inside of one

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Speaker 1: of these pooled products, then that that that's a source

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Speaker 1: of deterioration and that impacts the products ability to pass

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Speaker 1: cash flow onto its investor. Having said that our current

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Speaker 1: investors getting paid for the risks they are taking. So

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Speaker 1: I would say, given the increase in volatility that we're

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Speaker 1: experiencing right now, yes, However, if you look at two

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Speaker 1: thousand and eighteen with the low spread volatility and low

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Speaker 1: volatility the equity market leading up to the fourth quarter,

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Speaker 1: then that was really that was really the question is

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Speaker 1: are really compensated for the risk? And then I would

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Speaker 1: say no, it's only when we see increased volatility and

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Speaker 1: these price adjustments as really the price of risk readjusting

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Speaker 1: itself in the marketplace right now, now we look at

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Speaker 1: it and say, yeah, we're we're compensated. All right, Greg,

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Speaker 1: I want to widen out a little bit because you

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Speaker 1: just recently put out your outlook for next year, and

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Speaker 1: let's just start with the first line. There's no other

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Speaker 1: way to say it. The financial position of the United

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Speaker 1: States is a disaster. So what does that mean? I mean,

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Speaker 1: are we headed toward an imminent recession or deterioration? Is

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Speaker 1: it going to happen in the first quarter of the

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Speaker 1: Earth quarter? What's your what's your forecast here? No, so

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Speaker 1: we are not forecasting a recession, We're forecasting an economic slowdown.

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Speaker 1: In the second half of two thousand nineteen. But that

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Speaker 1: that first sentence was really encapsulated a bigger thesis we

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Speaker 1: have that our form of democracy and our form of

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Speaker 1: capitalism are evolving. That's not a political statement, it's just

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Speaker 1: for us to really understand how do you how do

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Speaker 1: you invest in today's market relative to years ago. We

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Speaker 1: have to look at it and say, wait a minute,

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Speaker 1: this this, this democracy is evolving. And look what's going

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Speaker 1: on over in Europe with with Italy, Britain, France, Germany,

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Speaker 1: all of these governments are going through some form of chaos.

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Speaker 1: Ours is just we've we've spent a lot of money

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Speaker 1: since the financial crisis to get this economy moving at

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Speaker 1: a time when we're growing, but we're running huge budget deficits.

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Speaker 1: That all turns into debt, all right, So if that

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Speaker 1: turns into debt, does it ever have to be repaid?

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Speaker 1: That is a great question. I I I honestly don't

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Speaker 1: think it does. I think I'm waiting for Wall Street

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Speaker 1: to come up with the uh, the vision for how

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Speaker 1: we turn all of this into one great, big, zero

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Speaker 1: coupon bond on the Fed's balance sheet, and and it

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Speaker 1: it never becomes a problem. But well, so, Greg, what

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Speaker 1: does this mean in terms of how you position your investments.

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Speaker 1: What's been the biggest change you've made recently to your

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Speaker 1: actual investing portfolio. So we've made a couple of changes.

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Speaker 1: The we've been we've been moving this whole period of

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Speaker 1: time has been the up and quality trade in the

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Speaker 1: bond portfolios, and um so now we're seeing we're actually

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Speaker 1: seeing just more opportunities. Spreads widen a lot of this

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Speaker 1: Leasa's technical. We expect there was heavy supply coming into December.

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Speaker 1: We expect that to slow down. But with the increase

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Speaker 1: in spread, volatility, the decline and interest rates, it spreads widen.

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Speaker 1: When you say up in quality, does that mean investment

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Speaker 1: grade over high yield? Does it mean a over triple B?

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Speaker 1: I mean, what are you talking about? Most of the

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Speaker 1: market now is triple B. But it really means that

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Speaker 1: we're moving up towards the higher end of triple B

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Speaker 1: into single A. We like the banking sector. Here's the paradox.

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Speaker 1: The Yeld curve inverts, right, So everyone thinks that banks

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Speaker 1: should lose money, but remember this is post Glass Stiegel.

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Speaker 1: Banks have a lot more levers and a lot more

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Speaker 1: drivers to revenue than they did when all they did

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Speaker 1: was make loans and and and collect deposits. So in

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Speaker 1: a world where it's post Glass Stiegel, we think this

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Speaker 1: actually is a period of time for banking upgrades, given

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Speaker 1: the increased capital positions and having looked at what's happened

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Speaker 1: to bank stocks in the last week, they're all hit

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Speaker 1: new fifty two week lows. Have you been buying We've

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Speaker 1: been while we've been in the market, buying the bank

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Speaker 1: stock the position, and we're we're neutral on banks stocks

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Speaker 1: right now, but we're finding other opportunities. I liken it

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Speaker 1: to kids in a candy store and Saturday morning cartoons.

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Speaker 1: That sounds pretty good. Thank you so much for being

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Speaker 1: with us kids in a candy store. Perhaps for you

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Speaker 1: kids in a guitar star, but we won't go there.

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Speaker 1: Greg Han is President and Chief Investment Officer of Winthrop

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Speaker 1: Capital Management, based in Indianapolis, but joining us here in

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Speaker 1: our eleven three oh studios in New York. Thanks for

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Speaker 1: listening to the Bloomberg an l podcast. You can subscribe

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Speaker 1: and listen to interviews at Apple Podcasts, SoundCloud, or whatever

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Speaker 1: podcast platform you prefer. I'm pim Fox. I'm on Twitter

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Speaker 1: at pim Fox. I'm on Twitter at Lisa Abramo wits

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Speaker 1: one before the podcast. You can always catch us worldwide

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Speaker 1: on Bloomberg Radio