WEBVTT - Apollo Global Management President Jim Zelter Talks SpaceX IPO, Iran & More

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news A.

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<v Speaker 2>Polo Global Management president Jim Zeltzer is highlighting a pressure

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<v Speaker 2>point on the horizon. He writes the following, if Alphabet

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<v Speaker 2>can't self fund AI Capex, think about the smaller players,

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<v Speaker 2>June is shaping up to be a real stress test

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<v Speaker 2>for the investment grade market. Jim joins us now from

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<v Speaker 2>More Jim, good morning, can see you.

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<v Speaker 3>Good morning. Always fun to be here.

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<v Speaker 2>Think about the paper that we've been moving. We have

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<v Speaker 2>priced almost a trillion dollars, a trillion dollars plus of

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<v Speaker 2>investment grade credit in almost record time so far. The

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<v Speaker 2>share we're talking about, mega IPOs on the horizon, Alphabet,

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<v Speaker 2>Alphabet issuing numbers that are so difficult to internalize, an

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<v Speaker 2>eighty five billion dollar capital race. Is the demand out

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<v Speaker 2>there to meet the supply.

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<v Speaker 3>I think it just shows the breadth of these global markets.

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<v Speaker 3>And I think if I've come here in the last

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<v Speaker 3>couple of years and I've used a term, it's always

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<v Speaker 3>and not or, it's the IG market and the private

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<v Speaker 3>credit market and the equity market. I think that theme

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<v Speaker 3>just really continues. I mean, certainly what Alphabet executed this year,

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<v Speaker 3>this past week in the scale, the scope. I suspect

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<v Speaker 3>it won't be the first big mandatory convert that gets done.

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<v Speaker 3>I'm sure many other companies in that sector are now

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<v Speaker 3>looking at these securities. The ability for an investor to

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<v Speaker 3>clip a nice coupon and have a debt exposure to

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<v Speaker 3>these companies, I think that's a new market. But you know,

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<v Speaker 3>I think also I would also ask you to take

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<v Speaker 3>on our step back, so it's not only the scale

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<v Speaker 3>of these I mean, last fifteen twenty years, the annual

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<v Speaker 3>equity issues between IPOs and equity capital markets activity has

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<v Speaker 3>been plus or minus two hundred billion a year. That's

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<v Speaker 3>the number last twenty years. You take the year of

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<v Speaker 3>twenty one out of spas you know with open Ai,

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<v Speaker 3>Anthropic and SpaceX, those three companies will eclipse that number.

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<v Speaker 3>And I think there's commentary about out what it means

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<v Speaker 3>to take a company public today. I mean, the scale

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<v Speaker 3>that you need to achieve to be relevant is much

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<v Speaker 3>much higher than it ever was before. That impacts a

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<v Speaker 3>lot of smaller enterprises that are five to ten billion.

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<v Speaker 3>I also think as much as we're talking in the

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<v Speaker 3>last four to six weeks about the AI cap ex boom,

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<v Speaker 3>which is phenomenal and unprecedented. I think we're forgetting that

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<v Speaker 3>there's a lot of other industries. There's a defense industry,

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<v Speaker 3>there's the utility industry, There's going to be a number

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<v Speaker 3>of other industries. So I think it's broader. But these

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<v Speaker 3>numbers are unprecedented. But it just shows you the scale

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<v Speaker 3>of the marketplace.

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<v Speaker 2>You'll get into the heart of a potential issue, though,

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<v Speaker 2>is the space for everyone, how much crown and gap

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<v Speaker 2>will they be well.

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<v Speaker 3>I do think we've been consistent. Torson has been consistent

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<v Speaker 3>about the impact on longer tenor rates for governments around

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<v Speaker 3>the globe. I think that is a very real issue.

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<v Speaker 3>I've been consistent here coming here in January and February April,

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<v Speaker 3>their rates were not going down in the short term.

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<v Speaker 3>I do think, you know, we've always talked about fifteen

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<v Speaker 3>twenty years ago, the crowding out effective government debt. I

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<v Speaker 3>think you're seeing a potentially long term crowding out of

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<v Speaker 3>this massive long duration capex boom around the globe and

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<v Speaker 3>the impact on government debt yields around the globe. So

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<v Speaker 3>I think there is some dynamics that But as I

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<v Speaker 3>said a few weeks ago this year, the IG market

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<v Speaker 3>will have net issuance higher than the treasury market in

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<v Speaker 3>the US. I mean, we got to put these numbers

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<v Speaker 3>in perspective. The mag seven capex this year will be

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<v Speaker 3>larger than the Defense Department spending. I mean, these are

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<v Speaker 3>phenomenal numbers. And again, I just think it's broader. I

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<v Speaker 3>think there is no doubt that there is there is

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<v Speaker 3>health and breadth in the market. But I think some

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<v Speaker 3>pullbacks once in a while and some good questions that

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<v Speaker 3>get answered. You know, these numbers are on precedent, and

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<v Speaker 3>these companies will have to make the aren't on capital

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<v Speaker 3>to justify the cabex.

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<v Speaker 1>How are you at Apollo trying to protect yourself against

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<v Speaker 1>the increasing risk as these numbers get bigger and bigger

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<v Speaker 1>and as expectations get higher.

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<v Speaker 3>Well, it all goes down to what your liability is.

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<v Speaker 3>For us, because we have our third party business as

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<v Speaker 3>well as our regulated balance sheet, We're trying to find

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<v Speaker 3>yours where we can fund the picks and shovels the

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<v Speaker 3>AI infrastructure, not just the AI capex to the equity.

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<v Speaker 3>There's a difference. You know. We've been rumored to be

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<v Speaker 3>involved in a variety of chip financings and those financings

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<v Speaker 3>allow you to get in the middle of a variety

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<v Speaker 3>of investment grade companies that want to fund the purchase

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<v Speaker 3>of the chips for a variety of these companies, and

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<v Speaker 3>you can do it in a structure that basically lets

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<v Speaker 3>you amortize that risk over three, five, seven years. So

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<v Speaker 3>you either are taking if you take residual risk, you've

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<v Speaker 3>taken your basis down to zero. So I think there's

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<v Speaker 3>ways to do that. I'm not suggesting there's investor who

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<v Speaker 3>are really good at buying the equity of these businesses.

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<v Speaker 3>That's not what we do. But I think the ability

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<v Speaker 3>to fund the infrastructure and really structure at such you're

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<v Speaker 3>not taking residual risk. I think there's an ability to

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<v Speaker 3>do that. Now it comes at a lower rate a

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<v Speaker 3>higher quality counter party. But that's all really structured.

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<v Speaker 2>Well, let's talk about the rumors, so I'll explore them

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<v Speaker 2>in ways that maybe don't put you on the spot

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<v Speaker 2>too much. Let's just say there is a firm that's

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<v Speaker 2>getting together with another firm maybe talking about roughly thirty

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<v Speaker 2>six billion dollars of debt financing to help maybe some

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<v Speaker 2>company like Anthropic pay for some chips from say Google.

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<v Speaker 2>That broad coom House develop Let's just throw that out

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<v Speaker 2>there and just say maybe that's a story that might

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<v Speaker 2>be on the rise and something that happens. Let's get

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<v Speaker 2>into how you structure that. So there's a senior part

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<v Speaker 2>senior trunch, and then you've got a subordinated trunch as well.

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<v Speaker 2>Can you just explain to us how you could use

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<v Speaker 2>an ig balance sheet like broadcomp to support something like that,

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<v Speaker 2>Just how people understand, how you get I.

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<v Speaker 3>Think that what I would want to highlight is in

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<v Speaker 3>every financing there's folks who want to take shorter duration

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<v Speaker 3>risk one two, three years, there's folks who want to

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<v Speaker 3>take longer duration risk three five, seven years. There's either

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<v Speaker 3>senior and then they're subordinated. So between maturity between where

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<v Speaker 3>you fit in that stack, you appeal to different buyers

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<v Speaker 3>in the fixed income universe. The fixed income universe is

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<v Speaker 3>like the equity universe. There's value buyers, there's growth buyers.

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<v Speaker 3>There's growth in the reasonable praise buyers in the equity market.

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<v Speaker 3>In the In the fixed income market, there's folks who

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<v Speaker 3>like short duration risk one year, two year risk i e.

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<v Speaker 3>Sometimes banks. There's longer duration investors who will take more

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<v Speaker 3>of a residual risk, and so you're just appealing to

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<v Speaker 3>different risk tolerance all in the investment grade community. But

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<v Speaker 3>you're doing it just like in the equity market. When

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<v Speaker 3>when Alphabet goes out and raises an equity deal and

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<v Speaker 3>a mandatory convert, you get what they're really doing is

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<v Speaker 3>they're appealing to an income buyer in the equity market

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<v Speaker 3>that might not necessarily be able to buy that equity

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<v Speaker 3>because of the low dividend yield. So again you're just really

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<v Speaker 3>appealing to the beauty of the US is we have

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<v Speaker 3>the most robust, deepest, broadest markets in the world, and

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<v Speaker 3>so you know, a company can do a mandatory convert five, ten, fifteen,

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<v Speaker 3>twenty billion in size, and there's plenty of equity income

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<v Speaker 3>accounts that want to buy that, and you can also

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<v Speaker 3>do a large equity offering and then they follow on

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<v Speaker 3>at the money offering over the next several months, and

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<v Speaker 3>there's breadth and depth very really. Nowhere else in the

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<v Speaker 3>globe has that breadth and depth of the marketplace.

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<v Speaker 1>Breath and depth is certainly here, which is the reason

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<v Speaker 1>why you're seeing these incredible IPOs and debt issuance. The

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<v Speaker 1>scale of money being raised though around the world really

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<v Speaker 1>is mind boggling. It's not just the US, it's Germany,

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<v Speaker 1>it's also over in Asia in a number of places,

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<v Speaker 1>whether it's IPOs, whether it's a corporate debt. Where is

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<v Speaker 1>the money coming from?

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<v Speaker 3>Right?

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<v Speaker 1>I mean, how do you compete for this money? And

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<v Speaker 1>how much higher do you yields have to go? Not

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<v Speaker 1>just in the treasury world, but also on your end

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<v Speaker 1>when you see coupons, don't they have to climb considerably

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<v Speaker 1>just to compete for your capital?

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<v Speaker 3>Well, you know, you know, relatively. Even though rates have

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<v Speaker 3>risen to where they were three to four years ago

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<v Speaker 3>in the US, rates in the US are approximately where

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<v Speaker 3>they've been over the last thirty to forty years. Like

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<v Speaker 3>we're in a more normal rate environment right now. And

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<v Speaker 3>a theme that I've been talking about I've been here

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<v Speaker 3>over the last couple of years is we have an

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<v Speaker 3>amazing broad retirement challenge around the globe. There are many

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<v Speaker 3>investors in the UK and Canada and Australia in the

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<v Speaker 3>West that do not have the right retirement saving structure.

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<v Speaker 3>At the same time, you've got this major global industrial

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<v Speaker 3>cap BAX today it's an AI, It'll be in other

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<v Speaker 3>industries and appropriately matching that duration of demand for assets

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<v Speaker 3>with the duration of the companies needing to borrow money.

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<v Speaker 3>It Actually you'd be surprised that depth and breadth of

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<v Speaker 3>these markets. And so you know, we're active now in

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<v Speaker 3>the UK. In the UK there's a concept called matching adjustment,

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<v Speaker 3>whereas a regulated balance sheet you need to actually have

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<v Speaker 3>long duration and so they funded student housing and a

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<v Speaker 3>lot of other activities. So you know, I do think

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<v Speaker 3>there is a natural point in time right now where

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<v Speaker 3>we do have these retirement pools around the globe that

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<v Speaker 3>are looking to invest long term. And actually, if you

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<v Speaker 3>look at what the treasury market has done, the Treasury

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<v Speaker 3>has really been funding a lot of their financing in

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<v Speaker 3>the short end the last three to five years, really

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<v Speaker 3>one to five year financing. There's a shortage of long

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<v Speaker 3>duration paper out in the globe right now. You've had

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<v Speaker 3>other guests on this show talk about the lack of

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<v Speaker 3>long duration assets against the breadth of long duration liability.

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<v Speaker 3>So I do think that's a broader theme that we

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<v Speaker 3>should talk about. The other thing I would talk about is,

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<v Speaker 3>you know this came up last year. We were talking

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<v Speaker 3>about a lot of the teriff activity, the benefit of

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<v Speaker 3>the breath of this of these capital markets is US

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<v Speaker 3>companies are the beneficiary of lower cost capital and access

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<v Speaker 3>to capital. That's a that's a that's a flywheel of

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<v Speaker 3>economic growth. And again going back, what Alphabet was able

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<v Speaker 3>to do their IPO was you know, one point seven

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<v Speaker 3>billion twenty six years ago or twenty five years ago.

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<v Speaker 3>And it is phenomenal, but it is a it's a

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<v Speaker 3>hidden gem of the US economy. And so when we

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<v Speaker 3>talk about taxing foreign investors, we have to be very

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<v Speaker 3>very careful because this cost of capital, this breadth of capital.

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<v Speaker 3>I think it's no surprise that we've been leading the

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<v Speaker 3>globe in this, in this cappec cycle, because these companies

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<v Speaker 3>do have access.

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<v Speaker 2>It's the sacred source, without a date, no doubt, without

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<v Speaker 2>a doubt. We at the creative stage of financing from

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<v Speaker 2>the outside looking at and people might hear some of

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<v Speaker 2>these stories the conversation we just had in I think

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<v Speaker 2>circle of financing off balance cheet debt. At the creative stage,

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<v Speaker 2>the more dangerous stage, I would suggest.

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<v Speaker 3>You know, I think that you always have to be

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<v Speaker 3>a where of who's taking equity risk at a fixed

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<v Speaker 3>rate of return. I think my forty one years tell me,

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<v Speaker 3>I want to be investing with the leading companies. When

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<v Speaker 3>you think about the world today in terms of winner

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<v Speaker 3>take most concentration in the top three or four companies,

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<v Speaker 3>I think it would lead you to be wanting to

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<v Speaker 3>invest alongside these companies and to do so in a

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<v Speaker 3>manner where you are well structured with downside protection. But

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<v Speaker 3>I think that there will, let me be me very clearly,

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<v Speaker 3>there will be companies that enter this CAPEC cycle, some

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<v Speaker 3>on the investment grade side, some on the non investment

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<v Speaker 3>grade side, that their business models will prove not to

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<v Speaker 3>be as resilient over five ten years. That's the destructive

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<v Speaker 3>aspect of capitalism. And I think you're getting paid for

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<v Speaker 3>it still with a lot of structure. But I do

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<v Speaker 3>think the overall trend is in the right direction.

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<v Speaker 2>So we're not at the prospect the very precipice of

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<v Speaker 2>hitting capital constraints right now.

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<v Speaker 3>I don't think so. I think. I do think it's

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<v Speaker 3>interesting when you think about, you know, why Alphabet did this.

0:12:10.080 --> 0:12:12.400
<v Speaker 3>I mean there is a depth and breadth in the

0:12:12.440 --> 0:12:15.400
<v Speaker 3>IG market. We talked about it earlier, how much they've done.

0:12:15.800 --> 0:12:18.280
<v Speaker 3>What's interesting, though, is I talked about a lot is

0:12:18.559 --> 0:12:21.679
<v Speaker 3>in the equity market. If you're an investor, you don't

0:12:21.760 --> 0:12:25.960
<v Speaker 3>mind or you can absorb the idea of getting very

0:12:26.080 --> 0:12:28.920
<v Speaker 3>concentrated in a name because you can move in and

0:12:28.960 --> 0:12:31.320
<v Speaker 3>out of it very quickly and you're getting paid because

0:12:31.320 --> 0:12:35.040
<v Speaker 3>of the convexity of that equity. In the fixed income market,

0:12:35.240 --> 0:12:38.720
<v Speaker 3>as a IG buyer, bonds don't go to two hundred,

0:12:39.040 --> 0:12:42.720
<v Speaker 3>they can go down dramatically. And being a little facetious there,

0:12:42.800 --> 0:12:45.360
<v Speaker 3>but my point is you need to have breadth of

0:12:45.800 --> 0:12:49.720
<v Speaker 3>distribution and diversification in the fixed income markets. And so

0:12:50.280 --> 0:12:53.520
<v Speaker 3>it's not as if Alphabet or Microsoft or Broadcom doesn't

0:12:53.559 --> 0:12:57.079
<v Speaker 3>have exposure. They're just trying to find a broader universe

0:12:57.400 --> 0:13:00.120
<v Speaker 3>of other buyers that will be able to access and

0:13:00.160 --> 0:13:00.920
<v Speaker 3>provide funding.

0:13:01.000 --> 0:13:02.480
<v Speaker 2>Jim, You're going to stick with U. Jim's out to

0:13:02.559 --> 0:13:07.640
<v Speaker 2>that of Apollo Global Management. So here's the lass this morning,

0:13:07.679 --> 0:13:10.560
<v Speaker 2>the President maintaining a deal could be there, as Tyran says,

0:13:10.600 --> 0:13:13.920
<v Speaker 2>there has been no tangible progress, and Haspala and Israel

0:13:13.960 --> 0:13:15.440
<v Speaker 2>continue to exchange strikes.

0:13:15.440 --> 0:13:16.679
<v Speaker 3>They continue to exchange strikes.

0:13:16.679 --> 0:13:18.640
<v Speaker 4>And a question we have been asking on this program

0:13:18.679 --> 0:13:22.240
<v Speaker 4>is at what point would this administration say, actually drones

0:13:22.280 --> 0:13:26.080
<v Speaker 4>coming at our allies. Ballistic missiles coming at our allies

0:13:26.120 --> 0:13:28.960
<v Speaker 4>and our air bases means that the ceasefire is over.

0:13:29.160 --> 0:13:30.800
<v Speaker 4>I think the most important story is the Wall Street

0:13:30.840 --> 0:13:34.680
<v Speaker 4>Journal overnight saying Trump has told aids privately that when

0:13:34.679 --> 0:13:38.240
<v Speaker 4>he would consider ending the ceasefire is if Iran targets

0:13:38.280 --> 0:13:42.840
<v Speaker 4>American troops directly. So if American troops lives are injured

0:13:42.840 --> 0:13:45.240
<v Speaker 4>in a way or that they're killed, that is when

0:13:45.280 --> 0:13:48.040
<v Speaker 4>maybe he would decide to end the ceasefire. So basically,

0:13:48.120 --> 0:13:50.960
<v Speaker 4>I think this tells Iran they can continue with some

0:13:51.000 --> 0:13:54.559
<v Speaker 4>of these clashes and skirmishes until now until they get

0:13:54.559 --> 0:13:56.160
<v Speaker 4>a deal. The President says, we're going to get a

0:13:56.160 --> 0:13:58.960
<v Speaker 4>deal soon. But the point you've been making continuously is

0:13:59.200 --> 0:14:01.520
<v Speaker 4>how many times still wait in here Since the end

0:14:01.559 --> 0:14:02.120
<v Speaker 4>of February.

0:14:02.160 --> 0:14:05.400
<v Speaker 2>For markets, it hasn't really mattered who remembers this conversation

0:14:05.520 --> 0:14:07.800
<v Speaker 2>from a few months back. Take a listen to this.

0:14:09.440 --> 0:14:11.480
<v Speaker 3>Sometimes there's days we should just go out and take

0:14:11.480 --> 0:14:13.599
<v Speaker 3>a walk around for thirty minutes. You just had a

0:14:13.720 --> 0:14:17.360
<v Speaker 3>quarter with record M and A, literally record M and

0:14:17.400 --> 0:14:19.880
<v Speaker 3>A in the United States and globally we've really lost

0:14:19.880 --> 0:14:22.280
<v Speaker 3>a plot on credit. We're talking about a little bit

0:14:22.320 --> 0:14:24.640
<v Speaker 3>of skirmish on the sidelines here. I suspect if I'm

0:14:24.680 --> 0:14:27.120
<v Speaker 3>sitting here, in three to six months, we'll be talking

0:14:27.160 --> 0:14:29.800
<v Speaker 3>about a much much different backdrop. Here we are.

0:14:29.840 --> 0:14:31.640
<v Speaker 2>A few months later, Jim's out to bank with his Jim,

0:14:31.720 --> 0:14:34.280
<v Speaker 2>congratulations because you were dead on, absolutely right. A few

0:14:34.280 --> 0:14:38.000
<v Speaker 2>months later the markets stopped having this conversation about this issue.

0:14:38.080 --> 0:14:42.200
<v Speaker 3>Well, it was interesting to see with a strong earnings

0:14:43.600 --> 0:14:46.440
<v Speaker 3>season in the last six weeks, you know, and they

0:14:46.480 --> 0:14:50.800
<v Speaker 3>were strong across the board. The big focus was Capex.

0:14:51.240 --> 0:14:53.760
<v Speaker 3>You know who has the bigger Capex budget? Almost it's

0:14:53.800 --> 0:14:59.000
<v Speaker 3>in essent. That's a marketplace where there's more greed driving

0:14:59.040 --> 0:15:02.640
<v Speaker 3>the market than fear, is David Solomon quoted yesterday. So

0:15:02.720 --> 0:15:05.960
<v Speaker 3>that's certainly the backdrop. I mean, certainly, I've been consistent

0:15:06.000 --> 0:15:08.080
<v Speaker 3>having a view that for the next year to two years,

0:15:08.120 --> 0:15:10.640
<v Speaker 3>we think that inflation is a bit more of a concern.

0:15:11.080 --> 0:15:14.440
<v Speaker 3>I don't think it's going to affect the fundamentals of

0:15:14.480 --> 0:15:18.040
<v Speaker 3>the market. I am candidly surprised, and I've been consistent

0:15:18.560 --> 0:15:22.240
<v Speaker 3>that if we were still talking about Iran at this point,

0:15:22.320 --> 0:15:25.680
<v Speaker 3>with the straits being closed and the impact on oil prices,

0:15:26.000 --> 0:15:29.680
<v Speaker 3>that we would see some second and third derivative volatility.

0:15:29.720 --> 0:15:34.400
<v Speaker 3>That so I'm a bit surprised, but you know, momentum

0:15:34.440 --> 0:15:36.760
<v Speaker 3>and emotions can work both ways, and they can change

0:15:36.800 --> 0:15:40.080
<v Speaker 3>pretty quickly. But I do believe this bigger trend is

0:15:40.880 --> 0:15:44.320
<v Speaker 3>upon us, and I think this will be the conversation

0:15:44.360 --> 0:15:45.520
<v Speaker 3>we have for the next couple of years.

0:15:45.560 --> 0:15:47.120
<v Speaker 2>Take a walk. That was the advice at a time,

0:15:47.160 --> 0:15:49.000
<v Speaker 2>and it was good advice too, based on how things

0:15:49.000 --> 0:15:50.920
<v Speaker 2>have turned out. The one thing that really surprised us

0:15:51.320 --> 0:15:54.840
<v Speaker 2>is how much earnings expectations have climbed through this war.

0:15:55.120 --> 0:15:57.120
<v Speaker 2>That was the surprise and clintingly to the market as well, Bromo,

0:15:57.360 --> 0:15:58.640
<v Speaker 2>given the price sanction we've seen.

0:15:58.720 --> 0:16:00.760
<v Speaker 1>Yeah, and when they don't out surprise perform in a

0:16:00.800 --> 0:16:04.560
<v Speaker 1>significant way than they're penalized at will cost. And ultimately,

0:16:04.880 --> 0:16:07.400
<v Speaker 1>this is one thing I'm wondering whether this is keeping

0:16:07.400 --> 0:16:10.320
<v Speaker 1>either Jim Upper or others the labor market. And at

0:16:10.320 --> 0:16:12.520
<v Speaker 1>what point do we start to see the ramifications of

0:16:12.560 --> 0:16:15.560
<v Speaker 1>all of these cuts potentially to pay for AI. And

0:16:15.600 --> 0:16:19.400
<v Speaker 1>we're seeing that some of the Challenger Christmas Challenger reports

0:16:19.440 --> 0:16:20.640
<v Speaker 1>earlier this morning.

0:16:20.480 --> 0:16:23.000
<v Speaker 2>Jim will steight chown we are the return on investment stage.

0:16:23.040 --> 0:16:24.520
<v Speaker 2>Is that still further down the line, and we at

0:16:24.560 --> 0:16:26.640
<v Speaker 2>this point where you have to cut operational expenses to

0:16:26.680 --> 0:16:29.160
<v Speaker 2>support a lot of this funding at a lot of

0:16:29.160 --> 0:16:30.880
<v Speaker 2>this money, I think.

0:16:30.640 --> 0:16:35.160
<v Speaker 3>There's some marginal optimization around hiring right now. I think

0:16:35.200 --> 0:16:38.000
<v Speaker 3>the secular trends that are the big question mark in

0:16:38.000 --> 0:16:40.200
<v Speaker 3>front of a lot of folks. If we're sitting here

0:16:40.240 --> 0:16:44.000
<v Speaker 3>in June of twenty eight, we will have a much

0:16:44.040 --> 0:16:47.840
<v Speaker 3>better insight in terms of really what's the secular impact

0:16:48.040 --> 0:16:52.960
<v Speaker 3>of these this CAPPEC cycle and AI on broad broad

0:16:53.080 --> 0:16:56.480
<v Speaker 3>employment numbers. I think any changes you see over the

0:16:56.520 --> 0:16:59.240
<v Speaker 3>next year or two were you know a percent, you know,

0:16:59.480 --> 0:17:01.320
<v Speaker 3>a quarter of a percent up or down. I don't

0:17:01.320 --> 0:17:03.760
<v Speaker 3>think there are long term secular trends. And I think

0:17:03.800 --> 0:17:07.959
<v Speaker 3>we'll be talking about how does the extent of this

0:17:08.080 --> 0:17:11.840
<v Speaker 3>CAPPEC cycle, the extent of the AI boom, the extent

0:17:11.880 --> 0:17:14.440
<v Speaker 3>of the return of investing capital. That's the conversation I

0:17:14.440 --> 0:17:16.719
<v Speaker 3>think we'll be having. And I think that then at

0:17:16.720 --> 0:17:18.879
<v Speaker 3>that point in time, once you have a sense of

0:17:18.920 --> 0:17:22.480
<v Speaker 3>the employment numbers, are the employment impact, Once you have

0:17:22.520 --> 0:17:25.280
<v Speaker 3>a sense of the returns, then that's going to feed

0:17:25.320 --> 0:17:27.840
<v Speaker 3>into is the inflation going to be curtailed? And turning

0:17:27.880 --> 0:17:31.040
<v Speaker 3>into a deflationary environment. But I think that's eighteen to

0:17:31.119 --> 0:17:33.399
<v Speaker 3>twenty four months out. I think anybody that tells you

0:17:33.760 --> 0:17:37.040
<v Speaker 3>they really have it nailed right now, I would suspect

0:17:37.040 --> 0:17:39.040
<v Speaker 3>that they really have not been doing this for a

0:17:39.040 --> 0:17:41.080
<v Speaker 3>long time. So I think there's a healthy degree of

0:17:41.520 --> 0:17:44.639
<v Speaker 3>humility you have to have by making those huge macro views.

0:17:44.720 --> 0:17:47.240
<v Speaker 1>Does the labor market keep you up at night this transformation?

0:17:48.240 --> 0:17:50.520
<v Speaker 3>I think it does. I think any leader of a

0:17:50.560 --> 0:17:54.399
<v Speaker 3>business today is thinking about how they want to evolve

0:17:54.400 --> 0:17:56.640
<v Speaker 3>their business. Last week, I was at a leadership meeting

0:17:56.720 --> 0:17:59.520
<v Speaker 3>of a bunch of CEOs done in Texas. They were,

0:17:59.680 --> 0:18:02.359
<v Speaker 3>you know, these were not all tech companies, and the

0:18:02.480 --> 0:18:06.439
<v Speaker 3>big questions were, how do I fund my aspirations in

0:18:06.480 --> 0:18:09.600
<v Speaker 3>my industry? That was an industry. That was a conversation

0:18:09.680 --> 0:18:12.040
<v Speaker 3>that they would not have invited the head of Apollo

0:18:12.119 --> 0:18:14.320
<v Speaker 3>to be there twenty four months ago. Okay, we were

0:18:14.400 --> 0:18:17.320
<v Speaker 3>front and center in that conversation. And they're also thinking

0:18:17.320 --> 0:18:21.080
<v Speaker 3>about how they deploy their resources, of which human capital

0:18:21.119 --> 0:18:23.600
<v Speaker 3>is the biggest element, and they want to execute their

0:18:23.640 --> 0:18:25.360
<v Speaker 3>plan today, but they also want to make sure they're

0:18:25.400 --> 0:18:28.000
<v Speaker 3>investing in the future. And I don't think anybody is

0:18:28.040 --> 0:18:31.280
<v Speaker 3>having a massive Yeah, you're seeing sub highlines of companies

0:18:31.280 --> 0:18:34.560
<v Speaker 3>that will make ten or twenty percent, you know, hiring

0:18:35.359 --> 0:18:37.920
<v Speaker 3>cuts across the board. Yeah, I don't think that's that's

0:18:37.960 --> 0:18:38.600
<v Speaker 3>the mainstream.

0:18:38.760 --> 0:18:40.680
<v Speaker 2>Jim So always got to see you, buddy. I thank you.

0:18:40.840 --> 0:18:42.919
<v Speaker 2>Jim's own to there of a public global management A

0:18:42.920 --> 0:18:43.640
<v Speaker 2>good lesson for a soul.

0:18:43.680 --> 0:18:45.960
<v Speaker 3>I took a walk yesterday, good beautiful day in New York.

0:18:46.200 --> 0:18:46.760
<v Speaker 3>Ronal