WEBVTT - Anthropic Draws Investor Offers at Over $800 Billion Value 

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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<v Speaker 2>All right, let's switch gears to technology.

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<v Speaker 3>Always, always, always a lot of technology news out there,

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<v Speaker 3>and it's news with really big numbers too, I mean,

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<v Speaker 3>and today's no different. Anthropic has received offers from investors

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<v Speaker 3>for new round of funding that could value the company

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<v Speaker 3>at about eight hundred billion dollars or hire just they

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<v Speaker 3>just the numbers, keep it.

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<v Speaker 2>And this is a private company, yes.

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<v Speaker 3>Yes, And if I'm you know, putting my IPO banker

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<v Speaker 3>hat back on from back in the day, I'd be

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<v Speaker 3>knocking on these doors so hard, saying let's rip this

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<v Speaker 3>thing into public market.

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<v Speaker 4>But we'll see.

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<v Speaker 3>Mandy've Sing joins US global tech research lead for Bloomberg Intelligence.

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<v Speaker 3>He's over in London right now, cracking heads over there,

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<v Speaker 3>a bloom Intelligence over there, whipping them into shape, as

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<v Speaker 3>well as seeing a bunch of clients. See I can

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<v Speaker 3>look at his calendar, I see actually doing a lot

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<v Speaker 3>of real business over there too, so we appreciate that

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<v Speaker 3>generating some revenue hopefully. Man, do you talk to us

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<v Speaker 3>about Anthropic here any surprise here, Well.

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<v Speaker 5>I mean we knew when they released that thirty billion

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<v Speaker 5>ARUR number that you know, the growth rate is phenomenal.

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<v Speaker 5>It's been accelerating driven by the use of their product

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<v Speaker 5>as a coding agent, and they seem to have leaf

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<v Speaker 5>frogged open AI and the other frontier llms when it

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<v Speaker 5>comes to coding agents specifically. So right now everyone is

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<v Speaker 5>lining up to be part of their next funding round.

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<v Speaker 5>And since open aie was valued at eight hundred and

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<v Speaker 5>fifty billion dollars, given you know, Entropic has surpassed open

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<v Speaker 5>ais arar, I'm not surprised that we are talking about

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<v Speaker 5>eight hundred billion dollar range for Entropic in the next

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<v Speaker 5>funding round.

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<v Speaker 6>So the numbers that Paul was mentioning where a new

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<v Speaker 6>funding round that could valuate at eight hundred billion dollars.

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<v Speaker 6>It sounds like Anthropic doesn't actually need the money right now,

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<v Speaker 6>so our investors just throwing money at the company and

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<v Speaker 6>the company saying.

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<v Speaker 2>Nah, no thanks, we're pretty good. We just raised thirty

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<v Speaker 2>billion in February I.

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<v Speaker 5>Would say these companies do need a lot of money

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<v Speaker 5>simply because you know, they keep saying they are compute constrained,

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<v Speaker 5>and look at you know what open ai has been

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<v Speaker 5>doing with regards to you know, all the deals that

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<v Speaker 5>they have signed to get the compute. And look, in

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<v Speaker 5>the case of Hyperscalers, at least they have the free

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<v Speaker 5>cash flow to pay for you know, the capex. In

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<v Speaker 5>the case of Anthropic and open Ai, they don't have

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<v Speaker 5>any free cash flow like the hyperscalers, so they actually

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<v Speaker 5>need the money to pay for all the compute and

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<v Speaker 5>AI infrastructure. And that's where you know, it's great that

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<v Speaker 5>open ai was able to raise one hundred and twenty

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<v Speaker 5>billion before Anthropic surpassed them in terms of err. I

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<v Speaker 5>bet you they'll have a harder time now than they

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<v Speaker 5>had a couple of months back. And right now it's

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<v Speaker 5>Nthropics moment. So the more money they raise, the more

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<v Speaker 5>compute they can lock in. And it is actually good

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<v Speaker 5>that they have the compute to really spend on acquiring

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<v Speaker 5>all the users and make sure they become a sticky product.

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<v Speaker 2>Stay with us. More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence Podcast. Catch us live

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<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

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<v Speaker 1>Auto with the Bloomberg Business App. Listen on demand wherever

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<v Speaker 6>Let's talk about Ramatz because LVMH came out in the

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<v Speaker 6>Reselt yesterday and they seemed kind of encouraging. We thought, Okay,

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<v Speaker 6>the luxury consumer doing well overall, Urmaz maybe not so much.

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<v Speaker 6>Andrea Felsted is our Bloomberg opinion columnist joining us London. Andrea,

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<v Speaker 6>what happened here with Ramez.

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<v Speaker 4>Well, there's been a few worries about Hermez for the

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<v Speaker 4>last sort of few months because there's been this reset

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<v Speaker 4>in the luxury sector where a lot of brands have

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<v Speaker 4>got new creative directors. So it was a bit of

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<v Speaker 4>worry that harmez Witch is very much sticking with its designers.

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<v Speaker 4>We have got a new designer coming, but it's very

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<v Speaker 4>much sticking with it's creative. You know, setup is going

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<v Speaker 4>to get left behind. And what's really focused people's minds

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<v Speaker 4>is Chanelle. There's been this Chanell mania and Chanell was

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<v Speaker 4>one of the brands that was most criticized for raising prices.

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<v Speaker 4>But they've got this new designer, Matthew Blasi. Everyone loves

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<v Speaker 4>his clothes, everyone loves his bags. There have been frenzies

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<v Speaker 4>at Chanel stores, and the worry is that some people

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<v Speaker 4>who would have bought her Mez bag will switch to

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<v Speaker 4>Chanelle in steady. Had that going on anyway, then what's

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<v Speaker 4>happened to day is you've got got that backdrop today

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<v Speaker 4>Hemez has shown that it's not the resilient story that

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<v Speaker 4>everyone expected. Homes has outperformed. There are long weight lists

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<v Speaker 4>for its bags, so when times are tough, it can

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<v Speaker 4>just work its way through the weight list. If someone said, oh,

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<v Speaker 4>you know, I can't afford to borking right now, there'll

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<v Speaker 4>be someone else on the list who can been really resilient.

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<v Speaker 4>But what's happened is is it's been really hurt by

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<v Speaker 4>the Middle East, and not just the Middle East, by tourists.

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<v Speaker 4>And the big revelation was that they said they got

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<v Speaker 4>more than fifty percent of their sales in France from tourists,

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<v Speaker 4>and that was a surprise because the market had always

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<v Speaker 4>thought it was the local customers that were keeping them going,

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<v Speaker 4>and that they have such a big tourist exposed. All

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<v Speaker 4>this is adding up to show that Hermes is not untouchable,

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<v Speaker 4>and that's why the shares have rerated. The shares have

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<v Speaker 4>rerated already. That they're on about thirty six that they're

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<v Speaker 4>thirty three times thirty four times times the next twelve

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<v Speaker 4>months earnings. That sounds like a lot, but its five

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<v Speaker 4>year average is forty eight times. So you can just

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<v Speaker 4>see how much it's been public. And I think there

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<v Speaker 4>were probably some hopes that you know, it would reassure

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<v Speaker 4>today and the shows were gone up. That's not happened.

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<v Speaker 3>I think one of the harder jobs in Global Wall

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<v Speaker 3>Street is to be a luxury analyst, because not only

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<v Speaker 3>do you have to have the numbers right and the

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<v Speaker 3>multiples right in your earnings models, but you have to

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<v Speaker 3>have a call on fashion, which is fickle to say

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<v Speaker 3>the least. Here is it exactly if you'remez, do you

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<v Speaker 3>just bring in some new blood?

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<v Speaker 2>Here is that in terms of well they.

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<v Speaker 4>Are doing that. They've got a lady called Grace Wale's

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<v Speaker 4>Bonner who's a very well respected men's were designed a

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<v Speaker 4>big surprise. She's going to be the creative director of men'swear.

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<v Speaker 4>She's been very influential. Her collaborations with added US helped

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<v Speaker 4>to spark the you know, the big jump in demand,

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<v Speaker 4>but Added US traders, particularly those sambas, but they were

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<v Speaker 4>everywhere a couple of years ago. She's very powerful, she's

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<v Speaker 4>very well respected. She could although it's men's where she

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<v Speaker 4>could bring a bit of a bit more of a

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<v Speaker 4>you know, a bit more pizzazz back. They're also doing

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<v Speaker 4>Hope couture. But the question this morning on the analyst

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<v Speaker 4>call was are you going to reduce capacity? There are

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<v Speaker 4>certain bags, the Kelly, the Burkin, and also the Constants

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<v Speaker 4>which quite hard to get. You have to put your

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<v Speaker 4>name on a list. Her miss is gradually ramping up production.

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<v Speaker 2>Now.

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<v Speaker 4>Ferrari also had these problems, and it's kind of dial

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<v Speaker 4>back its production of like the bog standard model. If

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<v Speaker 4>you can get a bog standard Ferrari like a you know,

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<v Speaker 4>a run of the real Ferrari, and it's doing these

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<v Speaker 4>very special editions. So could hermis do that? Could it,

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<v Speaker 4>you know, limit some of its bags and even go

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<v Speaker 4>more up market and do like super rare burk In

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<v Speaker 4>super break Kelly's, or even a new bag altogether that

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<v Speaker 4>could compete with which you now so great news, you know,

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<v Speaker 4>potentially for for resale values that have been coming down.

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<v Speaker 4>Very bad news. If you've got your name down for

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<v Speaker 4>one of these bags, it could be you know, if

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<v Speaker 4>they change the model, it could be getting even harder.

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<v Speaker 4>They'll find one.

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<v Speaker 1>Stay with us.

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<v Speaker 3>More from Bloomberg Intelligence coming up after this.

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<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

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<v Speaker 1>weekdays at ten am. He's done on Apple Cocklay and

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<v Speaker 1>Android Auto with the Bloomberg Business app. Listen on demand

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<v Speaker 1>wherever you get your podcasts, or watch us live on YouTube.

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<v Speaker 6>Let's stick with industries overall and talk about the auto sector,

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<v Speaker 6>clearly very much impacted by the rising oil prices. Stillantis

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<v Speaker 6>Ford GM, they all have to keep a very close

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<v Speaker 6>eye on how oil prices are trending, especially as they

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<v Speaker 6>have transitioned away from evs at least in the United

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<v Speaker 6>States to focus on those big gas guzzling vehicles. Let's

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<v Speaker 6>bring in now Steve Mann. Steve runs our Global Autos

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<v Speaker 6>team here and Industrials Research, and.

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<v Speaker 2>He's actually in New York today. Hi, Steve, You've got

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<v Speaker 2>to see you.

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<v Speaker 7>Hello.

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<v Speaker 6>So talk a little bit about what SLANTIS is doing,

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<v Speaker 6>because it's now looking into reviving a partnership with China's

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<v Speaker 6>doll Func Motor that would involve joint car production in

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<v Speaker 6>Europe and China.

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<v Speaker 7>Yeah, we actually wrote about the emerging trend of you know,

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<v Speaker 7>global automakers using China as a manufacturing base and really

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<v Speaker 7>take the competition to the Chinese, because the Chinese has

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<v Speaker 7>done really well exporting vehicles out of China, not only

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<v Speaker 7>in Europe, but in many parts of emerging markets, Southeast Asia,

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<v Speaker 7>parts of Latin America. So, you know, I think for

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<v Speaker 7>global automakers like Stillentis, I think Volkswagen is considering doing

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<v Speaker 7>the same thing. GM is definitely doing. It is really

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<v Speaker 7>to build cars in China at a low cost base

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<v Speaker 7>and then compete with the Chinese in these emerging markets.

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<v Speaker 3>Why would so What are the BYD's the Chinese auto

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<v Speaker 3>companies saying about.

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<v Speaker 7>This, Well, I think I think, you know, they feel

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<v Speaker 7>they have an advantage because they are you know, local,

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<v Speaker 7>They feel that their automobiles are more techy and resonates

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<v Speaker 7>with especially the younger first time car buyers, and many

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<v Speaker 7>of them are in emerging markets. So you know, I

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<v Speaker 7>think I think the Chinese will will continue to export

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<v Speaker 7>quite a bit of vehicles going forward.

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<v Speaker 6>What does this mean for these kinds of vehicles in

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<v Speaker 6>the US. I mean, we're still obsessed with the gas

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<v Speaker 6>couzling vehicles. They've done away with all the tax credits

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<v Speaker 6>for greener vehicles. How does this position Stilantis and other

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<v Speaker 6>carmakers for how they offer lower cost vehicles for Americans?

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<v Speaker 7>Yeah, interestingly, that's a good question because a lot of

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<v Speaker 7>the buyers in emerging markets are actually skipping the ice

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<v Speaker 7>gasoline vehicles and going straight to electric. So that's also

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<v Speaker 7>an advantage to some of the Chinese local automakers, but

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<v Speaker 7>it actually helped the global automakers like Slilentis because even

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<v Speaker 7>though the US have stepped back on EV's, the rest

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<v Speaker 7>of the world are not. Right, they're still pushing EV's,

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<v Speaker 7>so they need to continue to bill EV's. They still

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<v Speaker 7>need to invest in evs. So you know, having them

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<v Speaker 7>produced in China and able to compete in the rest

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<v Speaker 7>of the world with the Chinese, you know, gives them

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<v Speaker 7>a great, great option and great revenue stream.

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<v Speaker 3>So if i'm if I'm STILLANTUS here, one of the

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<v Speaker 3>brands Jeep or whatever the car will be, the vehicle

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<v Speaker 3>would be manufactured in China at that cost. I'm gonna

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<v Speaker 3>stick my stick my jeep name on it and sell

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<v Speaker 3>it in France or the US.

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<v Speaker 7>Yes, it's possible. So it's a little bit difficult in

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<v Speaker 7>the US because there are terrorists, and I think the

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<v Speaker 7>administration actually frowns on that. They actually had some discussion

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<v Speaker 7>with this GM about that. But I think more in

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<v Speaker 7>the rest of the world, like Europeans and the emerging markets.

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<v Speaker 6>We keep talking about how the lowest cost or the

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<v Speaker 6>average price of a new car in the US is

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<v Speaker 6>north of fifty thousand dollars, right, Yes, that's where we're

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<v Speaker 6>standing at in terms of actually coming to market with

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<v Speaker 6>an affordable, low cost vehicle.

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<v Speaker 2>Tesla's supposed to come out with something.

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<v Speaker 6>And I don't know if we have any kind of

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<v Speaker 6>timeline on that. Have GM and Ford kind of skipped

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<v Speaker 6>making this a priority?

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<v Speaker 7>Uh No, I think you know, first of all, there

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<v Speaker 7>are kind of rumors in social media that, you know,

0:12:33.120 --> 0:12:36.920
<v Speaker 7>Tesla is going to go back and think about reintroducing

0:12:37.040 --> 0:12:43.600
<v Speaker 7>a smaller compact vehicle. But GM is still investing. They're

0:12:43.600 --> 0:12:48.920
<v Speaker 7>still launching the Chevy Bolt. Look they have GM does

0:12:49.000 --> 0:12:52.760
<v Speaker 7>have a strong portfolio of evs not in the US. Well,

0:12:53.040 --> 0:12:55.200
<v Speaker 7>they do have a strong portfolio in the US, but

0:12:55.240 --> 0:12:58.760
<v Speaker 7>they also have a strong portfolio in China. And you know,

0:12:58.840 --> 0:13:04.920
<v Speaker 7>I think I think the US automakers, even though they

0:13:05.000 --> 0:13:09.720
<v Speaker 7>have dial down the investments in evs, they're not forgetting

0:13:09.760 --> 0:13:12.600
<v Speaker 7>about it. They are still spending a lot of money.

0:13:12.920 --> 0:13:16.440
<v Speaker 7>Ford is introducing something in twenty twenty seven twenty twenty eight,

0:13:16.760 --> 0:13:20.440
<v Speaker 7>a smaller, more affordable vehicles. Look in the US. It's

0:13:20.480 --> 0:13:23.600
<v Speaker 7>interesting to see even those EV sales have been down,

0:13:24.160 --> 0:13:28.440
<v Speaker 7>the infrastructure, the charging infrastructure, actually is continue to expand.

0:13:29.000 --> 0:13:33.040
<v Speaker 7>I think as consumer finds the the convenience of having

0:13:33.240 --> 0:13:36.680
<v Speaker 7>an EV's, I think there's still a place for EV's

0:13:36.720 --> 0:13:39.400
<v Speaker 7>in the US, but not at at the growth way

0:13:39.440 --> 0:13:40.120
<v Speaker 7>we saw in the past.

0:13:41.800 --> 0:13:44.599
<v Speaker 2>Stay with us. More from Bloomberg Intelligence coming up after this.

0:13:48.000 --> 0:13:51.720
<v Speaker 1>You're listening to the Bloomberg Intelligence podcast. Catch us live

0:13:51.800 --> 0:13:54.840
<v Speaker 1>weekdays at ten am Eastern on Apple, Cocklay and Android

0:13:54.880 --> 0:13:58.199
<v Speaker 1>Auto with the Bloomberg Business app. Listen on demand wherever

0:13:58.240 --> 0:14:01.360
<v Speaker 1>you get your podcasts, or live on YouTube.

0:14:02.360 --> 0:14:05.640
<v Speaker 6>All six big banks have now reported their results, and

0:14:05.760 --> 0:14:09.000
<v Speaker 6>clearly the war, the uncertainty that the war has created

0:14:09.280 --> 0:14:13.240
<v Speaker 6>has not really damped stock trading because their equity trading

0:14:13.280 --> 0:14:16.559
<v Speaker 6>desks did incredible business in the first quarter. Herman Chan

0:14:16.800 --> 0:14:19.480
<v Speaker 6>is our senior analyst for US banks here at Bloomberg

0:14:19.520 --> 0:14:23.000
<v Speaker 6>Intelligence and he joins US now. Herman which bank came

0:14:23.040 --> 0:14:26.160
<v Speaker 6>out ahead overall because they all did really well when

0:14:26.160 --> 0:14:29.200
<v Speaker 6>it comes to equity trading, less well on fixed income trading.

0:14:29.480 --> 0:14:31.600
<v Speaker 6>But when you look at the results as a whole,

0:14:31.840 --> 0:14:33.560
<v Speaker 6>which bank comes out of the winner.

0:14:33.720 --> 0:14:36.440
<v Speaker 8>Yeah, I would say Morgan Stanley probably outshined the most

0:14:36.960 --> 0:14:39.720
<v Speaker 8>across the trading front, both on equitis and fixed income.

0:14:40.480 --> 0:14:41.960
<v Speaker 2>But overall everything was great.

0:14:42.000 --> 0:14:45.200
<v Speaker 8>On the trading front. We're talking about twenty five percent

0:14:45.280 --> 0:14:50.160
<v Speaker 8>growth inequities, eleven percent growth in fixed income across the

0:14:50.240 --> 0:14:54.120
<v Speaker 8>six banks. Really strong results. Fixed income, as you mentioned before,

0:14:54.360 --> 0:14:58.200
<v Speaker 8>was a bit more mixed with Goldman weaker, Bank of

0:14:58.200 --> 0:15:02.160
<v Speaker 8>America touch weaker, but everybody else was really strong on

0:15:02.200 --> 0:15:02.880
<v Speaker 8>the fixed side.

0:15:03.360 --> 0:15:07.000
<v Speaker 3>What are they saying about the pipeline here for business

0:15:07.000 --> 0:15:09.160
<v Speaker 3>because it seems like this is going to be a

0:15:09.240 --> 0:15:12.440
<v Speaker 3>year where we could potentially get some mega IPOs. I'm

0:15:12.440 --> 0:15:15.120
<v Speaker 3>thinking SpaceX and all the anthropics and all the kind

0:15:15.120 --> 0:15:15.640
<v Speaker 3>of st Yeah.

0:15:15.720 --> 0:15:20.120
<v Speaker 8>Yeah, I think the IPO calendar looks a bit spottier.

0:15:20.200 --> 0:15:24.080
<v Speaker 8>We have the big blockbuster names like you mentioned with SpaceX,

0:15:24.120 --> 0:15:27.600
<v Speaker 8>potentially open AI, anthropic data bricks. Those are going to

0:15:27.640 --> 0:15:30.880
<v Speaker 8>be the headline ones. But on the other hand, maybe

0:15:30.920 --> 0:15:36.200
<v Speaker 8>some less activity from the private equity backed businesses that

0:15:36.480 --> 0:15:39.360
<v Speaker 8>may be finding it tougher sledding in terms of getting

0:15:39.400 --> 0:15:42.360
<v Speaker 8>into the markets giving the volatilty and the environment today.

0:15:42.720 --> 0:15:45.400
<v Speaker 8>But nonetheless, there's going to be these blockbuster deals that

0:15:45.440 --> 0:15:46.600
<v Speaker 8>are going to happen this year in.

0:15:46.600 --> 0:15:49.520
<v Speaker 6>Our view, and it doesn't appear that companies have held

0:15:49.560 --> 0:15:52.520
<v Speaker 6>off or held back from deal making either, even with

0:15:52.680 --> 0:15:54.600
<v Speaker 6>all the uncertainty caused by the war.

0:15:54.960 --> 0:15:55.640
<v Speaker 2>Yeah, that's right.

0:15:55.800 --> 0:15:57.920
<v Speaker 8>M and A at least for the first quarter was

0:15:58.080 --> 0:16:01.040
<v Speaker 8>solid strong all the way around on a year over

0:16:01.160 --> 0:16:05.200
<v Speaker 8>year basis. That was gangbusters up sixty eight percent year

0:16:05.240 --> 0:16:08.960
<v Speaker 8>every year. So we'll see how that continues given some

0:16:09.080 --> 0:16:12.320
<v Speaker 8>of the you mentioned. The volatility is great for the

0:16:12.360 --> 0:16:16.440
<v Speaker 8>trading front, less so for M and A activity and

0:16:16.680 --> 0:16:19.680
<v Speaker 8>equities issue, and so it'll be a bit of potentially

0:16:19.680 --> 0:16:21.640
<v Speaker 8>slowing down over the course of the year.

0:16:22.280 --> 0:16:25.760
<v Speaker 3>So we heard Ted pick On earlier today with Lisa

0:16:25.800 --> 0:16:29.320
<v Speaker 3>Bromwitz and talking about the Morgan standing results. Man, they

0:16:29.440 --> 0:16:32.320
<v Speaker 3>look they look pretty solid. There is that in the

0:16:32.360 --> 0:16:34.800
<v Speaker 3>returns they're generating. Talk about tools about the returns this

0:16:34.880 --> 0:16:38.360
<v Speaker 3>big banks are generating now before versus you know, several

0:16:38.440 --> 0:16:38.840
<v Speaker 3>years ago.

0:16:39.040 --> 0:16:42.440
<v Speaker 8>Yeah, I mean, returns are improving across the board. JP

0:16:42.520 --> 0:16:46.000
<v Speaker 8>Morgan leads a twenty three percent return on tangible equity

0:16:46.400 --> 0:16:49.040
<v Speaker 8>and then even some of the laggards like City Group

0:16:49.120 --> 0:16:54.280
<v Speaker 8>at thirteen percent ROTCE. That's relative to their expectations of

0:16:54.360 --> 0:16:57.480
<v Speaker 8>ten to eleven percent for the year. So everybody is

0:16:57.520 --> 0:17:02.040
<v Speaker 8>actually increasing their returns. It's been helped by the trading

0:17:02.080 --> 0:17:04.119
<v Speaker 8>results that we saw in the first quarter. It's also

0:17:04.119 --> 0:17:07.720
<v Speaker 8>been helped by stable expenses. I think AI will be

0:17:07.800 --> 0:17:10.800
<v Speaker 8>a big driver of that going forward as well. With

0:17:10.920 --> 0:17:16.520
<v Speaker 8>less headcount growth for the industry, but positive operating leverage,

0:17:17.000 --> 0:17:19.520
<v Speaker 8>all of the top line strengthlets falling to the bottom line,

0:17:19.520 --> 0:17:20.280
<v Speaker 8>which is good to see.

0:17:20.400 --> 0:17:22.800
<v Speaker 6>I'm glad you bring up expense growth because there's a

0:17:22.800 --> 0:17:25.320
<v Speaker 6>Bloomberg News story indicating that the Wall Street banks cut

0:17:25.400 --> 0:17:26.960
<v Speaker 6>five thousand jobs.

0:17:26.800 --> 0:17:28.200
<v Speaker 2>In the most profitable quarter.

0:17:28.359 --> 0:17:31.840
<v Speaker 6>Ever, how much is this an indication of what we're

0:17:31.880 --> 0:17:34.600
<v Speaker 6>going to see quarter after quarter from here on out?

0:17:34.680 --> 0:17:36.600
<v Speaker 6>I mean, is this the kind of pace of job

0:17:36.640 --> 0:17:38.520
<v Speaker 6>cuts that we might anticipate.

0:17:38.720 --> 0:17:41.639
<v Speaker 8>Yeah, It's an interesting question. It was a question that

0:17:41.760 --> 0:17:44.479
<v Speaker 8>was asked by the analyst on the earnings cause across

0:17:44.480 --> 0:17:49.760
<v Speaker 8>a number of the banks that reported. I think the

0:17:49.800 --> 0:17:52.880
<v Speaker 8>management teams were a bit shy to really give out

0:17:52.920 --> 0:17:56.880
<v Speaker 8>concrete numbers, but AI has been a game changer, especially

0:17:56.880 --> 0:18:00.880
<v Speaker 8>on the consumer side, where Bank of America gave some

0:18:01.240 --> 0:18:03.280
<v Speaker 8>numbers on the headcount on the consumer site, it's come

0:18:03.359 --> 0:18:05.560
<v Speaker 8>down drastically and a lot of that has to do

0:18:05.680 --> 0:18:10.400
<v Speaker 8>with areas that are more manually intensive and also areas

0:18:10.440 --> 0:18:12.879
<v Speaker 8>like the call center where you just don't need the

0:18:12.920 --> 0:18:15.399
<v Speaker 8>same amount of people doing that. Given the fact that

0:18:15.960 --> 0:18:18.880
<v Speaker 8>Make of America has bolstered their AI chat bob, which

0:18:18.920 --> 0:18:22.800
<v Speaker 8>they named Erica, that's been driving a lot of the.

0:18:24.280 --> 0:18:27.120
<v Speaker 2>Client in headcount needs. So we'll start.

0:18:26.920 --> 0:18:30.120
<v Speaker 3>Hearing from the regional banks soon. They have a much

0:18:30.200 --> 0:18:33.639
<v Speaker 3>lower exposure to the capital markets business. So what are

0:18:33.680 --> 0:18:35.880
<v Speaker 3>you going to be looking for from the regional banks show?

0:18:35.920 --> 0:18:39.119
<v Speaker 8>Yeah, regional banks kicked off earnings today with P and C,

0:18:39.760 --> 0:18:41.680
<v Speaker 8>M and C and first to rise in reporting.

0:18:42.040 --> 0:18:43.200
<v Speaker 2>I'd say it was a mixed bag.

0:18:43.320 --> 0:18:47.560
<v Speaker 8>P and C probably outshown outshined on the lending front

0:18:47.720 --> 0:18:52.280
<v Speaker 8>with strong loan growth, particularly in commercial lending, and that

0:18:52.440 --> 0:18:55.000
<v Speaker 8>was echoed across the big banks as well, where they

0:18:55.040 --> 0:19:01.160
<v Speaker 8>saw broader growth in commercial lending, increasing lineation which has

0:19:01.240 --> 0:19:04.199
<v Speaker 8>been in the doul drums for several quarters given the

0:19:04.280 --> 0:19:09.959
<v Speaker 8>uncertainty of tariffs last year, and then some pick up

0:19:10.000 --> 0:19:12.960
<v Speaker 8>in production from areas like small businesses and the like.

0:19:13.040 --> 0:19:15.920
<v Speaker 8>So that's great to see for banks like P and C.

0:19:16.640 --> 0:19:19.280
<v Speaker 8>For M and C, it was a bit weaker. They

0:19:19.359 --> 0:19:22.040
<v Speaker 8>did guide down on their net interest income because of

0:19:22.119 --> 0:19:24.160
<v Speaker 8>less growth in consumer lending.

0:19:24.920 --> 0:19:26.280
<v Speaker 6>When it comes to the big banks, there are a

0:19:26.280 --> 0:19:29.160
<v Speaker 6>lot of questions about private credit and how exposed these

0:19:29.160 --> 0:19:32.960
<v Speaker 6>big banks are too potentially bad loans made directly to

0:19:33.200 --> 0:19:34.800
<v Speaker 6>some of these companies.

0:19:35.600 --> 0:19:38.000
<v Speaker 2>Is this a problem for regional banks.

0:19:37.800 --> 0:19:40.040
<v Speaker 8>It's it's also been a growth driver for regionals, so

0:19:40.119 --> 0:19:45.480
<v Speaker 8>it's it's a area that's been one of the outstanding

0:19:47.240 --> 0:19:52.040
<v Speaker 8>areas for loan growth. That being said, there there is

0:19:52.240 --> 0:19:55.960
<v Speaker 8>virtually no concern across the management teams. I can point

0:19:56.040 --> 0:19:59.280
<v Speaker 8>to P and C CEO Bill Demchek that just spoke

0:19:59.320 --> 0:20:01.800
<v Speaker 8>earlier this morning. He said there was a question on

0:20:01.880 --> 0:20:04.800
<v Speaker 8>and like where on the you know, loss curve, could

0:20:04.880 --> 0:20:10.200
<v Speaker 8>could credit private credit b in a recessionary environment. And

0:20:10.480 --> 0:20:14.199
<v Speaker 8>basically said it's not on the curve. He's saying that

0:20:14.240 --> 0:20:18.600
<v Speaker 8>they don't expect any losses. And he contrasts that comment

0:20:18.880 --> 0:20:22.040
<v Speaker 8>with what happened a few years back on the office

0:20:22.040 --> 0:20:26.199
<v Speaker 8>commercial real estate front, where they were very open about

0:20:26.400 --> 0:20:28.679
<v Speaker 8>their exposures and potential loss rates.

0:20:28.680 --> 0:20:30.440
<v Speaker 2>There they virtually.

0:20:30.160 --> 0:20:33.399
<v Speaker 8>Saly know losses from their private critics. So that's great

0:20:33.400 --> 0:20:36.159
<v Speaker 8>to hear that, and they were very adamant about that.

0:20:37.280 --> 0:20:41.960
<v Speaker 1>This is the Bloomberg Intelligence podcast, available on Apple, Spotify,

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0:20:49.520 --> 0:20:53.080
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0:20:53.480 --> 0:20:56.400
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