WEBVTT - Trump, NASDAQ, UK, Oil, and Activison (Podcast) 0:00:00.840 --> 0:00:04.000 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:05.240 my co host Matt Miller. 0:00:05.640 --> 0:00:09.600 Every business day, we bring you interviews from CEOs, market pros, 0:00:09.720 --> 0:00:13.600 and Bloomberg experts, along with essential market moven news. 0:00:14.160 --> 0:00:17.279 Find the Bloomberg Markets Podcast on Apple Podcasts or wherever 0:00:17.400 --> 0:00:21.480 you listen to podcasts, and at Bloomberg dot com slash podcast. Certainly, 0:00:21.560 --> 0:00:24.760 the big news down in Washington, DC these days is 0:00:24.800 --> 0:00:27.720 the indictment of former President Donald Trump. We want to 0:00:27.720 --> 0:00:30.880 get the latest on how that's developing news over the weekend, 0:00:30.920 --> 0:00:33.000 so we're going to bring in a couple of smart 0:00:33.080 --> 0:00:37.360 voices here, Nick Ackerman, former assistant special Watergate prosecutor and 0:00:37.479 --> 0:00:40.120 assistant US Attorney for the Southern District of New York, 0:00:40.600 --> 0:00:42.640 so he knows his way around the legal side of it. 0:00:42.640 --> 0:00:46.760 Plus Bloomberg's Washington correspondent and Ree Horden also joined us, 0:00:46.760 --> 0:00:49.480 and we appreciate both of them. Nick, Lex, let's start 0:00:49.520 --> 0:00:51.680 with you here, just for us, you know, kind of 0:00:51.760 --> 0:00:56.320 lay people here. I guess what's different about all of 0:00:56.360 --> 0:00:59.840 the former president's legal challenges is that this one is federal. 0:01:00.040 --> 0:01:00.840 How serious is this? 0:01:01.920 --> 0:01:06.400 It's extremely serious. It's federal it means that the case 0:01:06.640 --> 0:01:10.959 is likely to move a lot faster. The judges, for 0:01:11.000 --> 0:01:15.600 the most part, including deciding Cannon, are normally better judges, 0:01:15.640 --> 0:01:17.720 although the judge in the state case in New York 0:01:18.160 --> 0:01:23.640 is an excellent judge. But this case will go to 0:01:23.720 --> 0:01:27.840 trial probably quicker than the state court cases, certainly quicker 0:01:27.880 --> 0:01:31.800 than the New York case, and quicker than the case 0:01:31.840 --> 0:01:35.240 that's about to be brought in Fulton County, Georgia. 0:01:36.360 --> 0:01:38.520 Dates times, how quickly could we see that? 0:01:39.760 --> 0:01:43.360 Oh? I mean, it depends on the prosecutor and the judge. 0:01:43.400 --> 0:01:46.560 If I were the prosecutor, I'd be telling the judge 0:01:46.560 --> 0:01:50.080 that I'm turning overall discovery by the end of next week, 0:01:50.640 --> 0:01:53.880 and that we want a quick motion date and a 0:01:54.000 --> 0:01:56.160 quick trial date. I would try and do this within 0:01:56.240 --> 0:01:58.960 ninety days if you could. Well, but that may be 0:01:59.160 --> 0:02:02.680 a bit optimate stick. I think, you know, within four 0:02:02.760 --> 0:02:05.000 or five months is certainly conceivable. 0:02:05.800 --> 0:02:08.320 Ann Marie. What's the feeling in Washington, DC. We've had, 0:02:08.360 --> 0:02:11.320 you know, several days now to digest this news here, 0:02:11.360 --> 0:02:14.560 and I guess the political angles are starting to be 0:02:15.000 --> 0:02:17.240 kind of drawn here. What are you singing in Washington? 0:02:17.560 --> 0:02:19.200 Well, I think a lot of people are focusing on 0:02:19.520 --> 0:02:22.480 these two polls that came out of the weekend, and 0:02:23.040 --> 0:02:28.200 this one from CBS really shull shows the control the 0:02:28.240 --> 0:02:32.840 former president has on the Republican Party and surely on 0:02:32.919 --> 0:02:35.440 his base because obviously he's being indicted, but this is 0:02:35.480 --> 0:02:38.480 all happening at the same time as he is running 0:02:38.520 --> 0:02:42.040 to be the candidate for twenty twenty four. So most 0:02:42.080 --> 0:02:45.920 Republican primary voters seventy six percent said they're concerned that 0:02:45.919 --> 0:02:49.240 Trump's indictment was politically motivated in this poll, and then 0:02:49.280 --> 0:02:53.400 a majority ruled out that the charges would change their 0:02:53.480 --> 0:02:56.960 views of Trump, and eighty percent of them said that 0:02:57.080 --> 0:02:59.720 he should win a second term in office. So this 0:02:59.880 --> 0:03:03.280 just goes to show how this potentially can play out. 0:03:03.360 --> 0:03:05.919 Trump can keep a really strong hold on the base 0:03:06.120 --> 0:03:08.440 even while he has this as his only Attorney General 0:03:08.440 --> 0:03:13.160 put it over the weekend, Bill Barr damning indictment. The issue, 0:03:13.160 --> 0:03:15.440 of course, is that a lot in the Republican Party 0:03:15.560 --> 0:03:17.920 are starting to look at but this what does this 0:03:18.040 --> 0:03:21.200 mean for a general election? Because the indictment might not 0:03:21.360 --> 0:03:24.040 matter for primary voters Republican Party, but what does it 0:03:24.120 --> 0:03:26.840 mean nationally for US voters overall? 0:03:26.919 --> 0:03:30.639 Well, Nick does the federal government bring a case like this. 0:03:31.320 --> 0:03:33.360 I mean, how shorre do they have to be about 0:03:33.400 --> 0:03:36.000 their case before kind of bringing a case like this, 0:03:36.080 --> 0:03:36.440 do you think? 0:03:37.080 --> 0:03:40.120 Well, put it this way, when you're dealing with someone 0:03:40.400 --> 0:03:44.240 with the high visibility of a former president, you make 0:03:44.360 --> 0:03:48.680 sure that you've got this button down one hundred percent solid. 0:03:48.720 --> 0:03:51.720 I mean, obviously, when you go before a jury, nothing's 0:03:51.760 --> 0:03:54.560 ever one hundred percent solid, But boy, this case is 0:03:54.600 --> 0:03:58.200 about as solid as you can possibly get. Having done this, 0:03:58.360 --> 0:04:02.440 been there before with water, you don't go about doing 0:04:02.480 --> 0:04:06.400 an indictment like this unless your evidence is spot on 0:04:06.400 --> 0:04:09.880 one hundred percent solid. And here they've got it. They've 0:04:09.880 --> 0:04:13.760 got our witnesses. They've got a tape with Donald Trump 0:04:13.840 --> 0:04:16.880 actually talking about the fact that one of the documents 0:04:17.000 --> 0:04:20.400 was classified, that he couldn't unclassify it because he was 0:04:20.440 --> 0:04:24.560 no longer president. They've got pictures of how this stuff 0:04:24.720 --> 0:04:28.760 was mishandled at mar A Lago, and they've got the 0:04:28.800 --> 0:04:33.160 testimony of his former lawyer, who basically will say that 0:04:33.880 --> 0:04:37.560 Trump was trying to hoodwink him and play him, and 0:04:37.920 --> 0:04:41.160 that he was being used by Donald Trump, and that 0:04:41.800 --> 0:04:45.520 thirty boxes were kept from his view, all of which 0:04:45.560 --> 0:04:49.520 contained classified information that was later recovered in the search warrant. 0:04:49.600 --> 0:04:51.839 Well, Nick on on that point, though, you know, you 0:04:51.920 --> 0:04:56.880 mentioned these statements potentially from his former attorneys, and I 0:04:56.920 --> 0:04:58.880 look through that document, there does seem to be a 0:04:58.880 --> 0:05:02.080 lot of information that provided by people who were his attorneys. 0:05:02.600 --> 0:05:07.000 Does could attorney client privilege get in the way, particularly 0:05:07.000 --> 0:05:10.200 with maybe and a judge that's not necessarily quite as 0:05:10.480 --> 0:05:13.000 has handed down some I guess questionable rulings in the 0:05:13.040 --> 0:05:17.360 past from the perspective of the federal government. Or are 0:05:17.400 --> 0:05:20.039 there other big challenges that you see moving forward in 0:05:20.040 --> 0:05:20.719 this prosecution. 0:05:20.960 --> 0:05:24.159 Well, a couple of questions in there. Well, yes, sorry, 0:05:24.040 --> 0:05:28.960 the attorney client privilege. The purpose of that privilege is 0:05:29.080 --> 0:05:33.800 for a client to be able without qualification, to be 0:05:33.800 --> 0:05:37.800 able to tell his lawyer everything about a case, so 0:05:37.839 --> 0:05:41.640 that the lawyer feels comfortable in representing that person in 0:05:41.680 --> 0:05:46.680 the proper way. The purpose here was completely different. Trump 0:05:46.839 --> 0:05:49.800 was basically not using his lawyer to get legal advice. 0:05:49.839 --> 0:05:52.960 He was using his lawyer to commit a crime. The judge, 0:05:53.080 --> 0:05:56.280 the chief judge in d C, has already determined that 0:05:56.760 --> 0:06:00.960 all of this information was admissible because it was part 0:06:01.000 --> 0:06:04.600 of the exception to the crime fraud exception to the 0:06:04.640 --> 0:06:09.000 attorney client privilege. I don't see any judge overturning that 0:06:09.320 --> 0:06:13.680 or coming up with a different view on what happened here. 0:06:13.800 --> 0:06:16.520 I mean, the facts are absolutely damning. They're all in 0:06:16.600 --> 0:06:22.160 the indictment. Secondly, you raised the question about Judge Eileen 0:06:22.320 --> 0:06:28.919 Cannon in the in the Florida case, where yeah, she 0:06:29.040 --> 0:06:34.400 did screw up on her decision to appoint a special master. 0:06:35.120 --> 0:06:37.560 But keep in mind, you know, even though she did that, 0:06:37.720 --> 0:06:40.159 she did it in the context where a special master 0:06:40.240 --> 0:06:43.320 had been appointed for two of two search warrants relating 0:06:43.360 --> 0:06:48.159 to two Trump lawyers, Michael Cohen and Rudy Giuliani, and 0:06:48.240 --> 0:06:53.880 she was basically overturned by the Eleventh Circuit, of which 0:06:53.960 --> 0:06:57.080 you know two of those judges were also appointed by Trump. 0:06:58.080 --> 0:07:01.240 So look, judges, screw up, that's what she did. And 0:07:01.279 --> 0:07:03.680 the fact that she did it once and she's been 0:07:03.800 --> 0:07:05.880 chasing on it, I think, look, we have to give 0:07:05.880 --> 0:07:08.320 her the benefit of the doubt. I mean, there's every 0:07:08.400 --> 0:07:12.280 reason to believe that she's a totally competent jurist. She 0:07:12.400 --> 0:07:15.080 went to Michigan Law School, a top tier law school. 0:07:15.120 --> 0:07:17.720 She worked in a respective law firm, She worked for 0:07:17.760 --> 0:07:20.480 the US Attorney's office for a number of years. 0:07:20.320 --> 0:07:20.920 So maybe. 0:07:22.560 --> 0:07:24.520 We've got to be real careful here not to be 0:07:24.960 --> 0:07:29.480 trashing as judge, because we're falling into the same trap 0:07:29.520 --> 0:07:32.200 that the Trump supporters are doing and trashing the Department 0:07:32.240 --> 0:07:32.800 of Justice. 0:07:33.120 --> 0:07:35.480 Hey, so yeah, yeah, I just want to get the 0:07:35.640 --> 0:07:38.680 Anne Marie here. We've got a presidential election coming up 0:07:39.280 --> 0:07:41.760 next year and there seems to be no shortage of 0:07:41.760 --> 0:07:46.000 Republican challengers to the president. What's the feeling in DC 0:07:46.200 --> 0:07:48.480 and Mary is to how this is all shaping up 0:07:48.600 --> 0:07:51.040 given the backdrop of this federal indictment. 0:07:51.800 --> 0:07:54.320 So what's interesting is there's been some mixed feelings in 0:07:54.400 --> 0:07:59.360 terms of how Republicans are responding to this indictment. You 0:07:59.440 --> 0:08:02.880 had Governor Ron De Santis, for example, tweeting after the 0:08:02.880 --> 0:08:06.200 indictment that it was a weaponization of federal law enforcement 0:08:06.400 --> 0:08:09.800 and it's a mortal threat to free society. Then you 0:08:09.880 --> 0:08:14.440 had others like Mike Pence, you know, he was Obviously, 0:08:14.520 --> 0:08:16.560 all these people are out and about and you're able 0:08:16.600 --> 0:08:18.360 to get access to them because they're in New Hampshire 0:08:18.400 --> 0:08:22.320 or Iowa, and at times they could be critical, but 0:08:22.360 --> 0:08:26.000 at the same time they do call what's happening as unprecedented, 0:08:26.600 --> 0:08:29.200 Like Mike Pence for a vice president, he's running, and 0:08:29.240 --> 0:08:33.680 he says it's a politicization of the Justice Department, although 0:08:33.720 --> 0:08:36.880 he also added he's deeply troubled to see this indictment 0:08:37.000 --> 0:08:37.600 move forward. 0:08:38.320 --> 0:08:39.880 Then you have others like Chris Christi. 0:08:40.280 --> 0:08:42.400 He continuously say no one is above the law, no 0:08:42.440 --> 0:08:45.120 matter how much they wish they were, and they want 0:08:45.120 --> 0:08:48.080 to wait to see how the facts are revealed. So 0:08:48.320 --> 0:08:50.839 this is a moment where you're going to see each 0:08:51.040 --> 0:08:56.040 candidate really try to walk a fine line because a 0:08:56.040 --> 0:08:58.320 lot of them want to talk about how they think 0:08:58.320 --> 0:09:01.800 it's politicized yep, And they don't want to ostracize the 0:09:01.840 --> 0:09:04.400 base that Trump has a hold on, which is why 0:09:04.400 --> 0:09:06.800 I keep going back to that CBS News poll because 0:09:06.840 --> 0:09:08.760 it really does show if the election were today, he 0:09:08.840 --> 0:09:09.760 would be the nominee. 0:09:09.840 --> 0:09:10.040 Yep. 0:09:10.120 --> 0:09:14.640 Absolutely all right, fascinating. Nick Ackerman, former assistant special Watergate prosecutor, 0:09:14.679 --> 0:09:16.680 thank you so much. We appreciate getting your time on 0:09:16.720 --> 0:09:20.880 the legal side. Bloomberg Washington correspondent and Marie Hordern get 0:09:20.880 --> 0:09:23.120 into political angle. There some fascinating discussion. 0:09:24.600 --> 0:09:28.040 You're listening to the team Ken's are live program Bloomberg 0:09:28.080 --> 0:09:31.440 Markets weekdays at ten am Eastern on Bloomberg dot Com, 0:09:31.520 --> 0:09:34.679 the iHeartRadio app and the Bloomberg Business App, or listen 0:09:34.720 --> 0:09:37.040 on demand wherever you get your podcasts. 0:09:39.320 --> 0:09:43.240 Simoan Foxman, Paul Sweeney here in the Bloomberg Interactive Brokers studio. 0:09:43.320 --> 0:09:46.360 Lots of economic data this week, so on your Bloomberg 0:09:46.440 --> 0:09:49.839 terminal type in eco go give you all the data 0:09:49.840 --> 0:09:51.960 and kind of the forecast, that consensus, all that kind 0:09:51.960 --> 0:09:55.400 of stuff. We have cpippi of course, we have got 0:09:55.440 --> 0:09:58.199 retail sales and then of course Wednesday the FED meeting 0:09:58.240 --> 0:10:01.280 in the press, coperts and all that. So that is 0:10:01.360 --> 0:10:04.480 kind of driving the market action this week. Let's check 0:10:04.520 --> 0:10:06.520 in with somebody who can We found this very closely 0:10:06.600 --> 0:10:10.200 ifan debit chief investment officer for the Menetic Group. So 0:10:10.840 --> 0:10:13.640 thanks so much for joining us here. What are you 0:10:13.679 --> 0:10:17.720 looking from the FED this Wednesday? 0:10:17.880 --> 0:10:20.440 Well, we're expecting a pause. I think like most other 0:10:20.480 --> 0:10:23.760 observers at this point, we're not seeing We also would 0:10:23.760 --> 0:10:26.360 agree with your previous guests around the direction of inflation. 0:10:26.800 --> 0:10:30.120 We're not seeing that same stickiness that's been present in 0:10:30.200 --> 0:10:33.280 the UK. Although there's always the potential for surprise, of course, 0:10:33.320 --> 0:10:36.400 and those numbers the backshop of what the Canadian Central 0:10:36.400 --> 0:10:39.920 Bank did. There is always precedent for surprise, but I 0:10:39.960 --> 0:10:43.319 don't think our US FED is so inclined at the moment, 0:10:43.440 --> 0:10:46.520 so it's likely to be a pause we expect, you know, Ethan, 0:10:46.600 --> 0:10:47.120 we have. 0:10:47.200 --> 0:10:51.040 A story out this morning. FED backs away from wages focus, 0:10:51.200 --> 0:10:54.520 bolstering case for rate pause. I just want to get 0:10:54.520 --> 0:10:59.000 your sense. Our reporters, Janelle Martin and Augustasarrievas say that 0:10:59.040 --> 0:11:02.360 FED officials are rethinking their view that wage gains are 0:11:02.400 --> 0:11:06.840 fueling inflation. Your take on this is, we are we 0:11:07.000 --> 0:11:09.760 how much are wage gains factoring into their discussion or 0:11:09.760 --> 0:11:11.600 going to factor into their discussion this week? 0:11:12.400 --> 0:11:14.720 A very interesting discussion, and I would agree with that 0:11:14.920 --> 0:11:18.719 because wages will be perhaps the most lagging of all indicators. 0:11:18.760 --> 0:11:22.280 So the difference between fueling inflation when it comes to 0:11:22.320 --> 0:11:25.679 wages and being a symptom of inflation, a reaction to inflation, 0:11:26.120 --> 0:11:29.600 a desire to really make employees even or whole with 0:11:30.400 --> 0:11:32.480 along with the rate of inflation, and that's what we're seeing, 0:11:32.760 --> 0:11:35.840 so as opposed to actually driving inflation, I think wage 0:11:35.880 --> 0:11:39.319 gains are a response to inflation. And the core drivers 0:11:39.640 --> 0:11:42.800 getting around that. We talked about supply chain issues before, 0:11:42.840 --> 0:11:46.120 we talked about the push on energy and some of 0:11:46.160 --> 0:11:49.160 that filtering into energy and food and the services again 0:11:49.160 --> 0:11:51.480 which have the lagging effects. I think they're absolutely right 0:11:51.559 --> 0:11:54.360 to take the focus off wage gains because that would 0:11:54.360 --> 0:11:56.760 just be more looking in the rear view mirror. 0:11:58.120 --> 0:12:01.200 Ethan. You know, one of the that I know has 0:12:01.240 --> 0:12:04.560 some folks concerned is the lack of breadth in the 0:12:04.600 --> 0:12:06.760 market we've seen so far this year with the SPX, 0:12:07.120 --> 0:12:10.640 you know, up twenty percent off of the lows, but 0:12:10.720 --> 0:12:12.240 really if you look at the you know, the equal 0:12:12.240 --> 0:12:14.679 weighted in the nextra is really no movement at all. 0:12:14.760 --> 0:12:16.240 How much of a concern is that for you? 0:12:17.520 --> 0:12:19.520 Yeah, that's actually been a concern. It was the siren 0:12:19.600 --> 0:12:21.640 call has been going out now for months, and it's 0:12:21.679 --> 0:12:24.959 really got more traction and more widespread appeals the longer 0:12:25.000 --> 0:12:27.200 it has persisted. And I'd say, what it is, It 0:12:27.280 --> 0:12:30.280 really is underscoring the FOMO of not being an equity market. 0:12:30.320 --> 0:12:33.040 So when you are sitting in cash or in money 0:12:33.040 --> 0:12:34.960 market funds and you're not doing as badly as you 0:12:35.000 --> 0:12:37.640 were before, is it's not that same drag you're still 0:12:37.800 --> 0:12:40.400 not looking at positive real rates in those funds if 0:12:40.400 --> 0:12:43.760 we're dealing with five percent inflation, so we're barely breaking 0:12:43.800 --> 0:12:45.800 even in a money market fund. So when you see 0:12:45.840 --> 0:12:47.880 that going on, you're going to want it to follow 0:12:47.880 --> 0:12:49.840 the action, which is inequities, and you're going to want 0:12:50.000 --> 0:12:52.960 to send money that way. And clearly, as I've mentioned before, 0:12:53.000 --> 0:12:55.840 I think big tech is now the safety trade essentially 0:12:56.200 --> 0:12:58.679 because there is very just like you can't get goot 0:12:58.720 --> 0:13:02.080 fired for buying IBA, the old adage, buying big tech 0:13:02.120 --> 0:13:04.400 stocks a pretty safe play at the moment because they're 0:13:04.400 --> 0:13:08.240 supported by the markets themselves as well as this AI story. 0:13:08.480 --> 0:13:12.760 We're seeing some of the exuberants around they just driving 0:13:12.800 --> 0:13:15.600 cars and electrical cars, et cetera. So clearly quite a 0:13:15.600 --> 0:13:18.240 lot of height in that number. And where I would 0:13:18.240 --> 0:13:20.360 see the issue is, yes, that it is not broad based. 0:13:20.440 --> 0:13:22.680 It is not filtering into small caps into some of 0:13:22.679 --> 0:13:25.440 the valued stocks. We expect that to follow though, because 0:13:25.440 --> 0:13:27.000 and we're seeing little bit of signs of that. We've 0:13:27.000 --> 0:13:29.680 seen a bit of a pickup as this market strength 0:13:29.720 --> 0:13:33.280 gained some momentum, you know, technically hitting a bull market. 0:13:33.320 --> 0:13:35.840 That's obviously a nice syndicator that sends a good signal. 0:13:36.120 --> 0:13:38.319 So I'd say that we've always had a core approach. 0:13:38.440 --> 0:13:42.000 We don't target call sectors. We've never been out of tech, 0:13:42.280 --> 0:13:44.920 but we are. We are reassured now to see markets 0:13:44.960 --> 0:13:48.439 getting that broader basis, because too much concentration will lead 0:13:48.480 --> 0:13:49.560 to too much volatility. 0:13:50.400 --> 0:13:52.439 Kiffn you know you mentioned in some notes you sent 0:13:52.480 --> 0:13:56.920 across before this interview that there's this concern from the 0:13:57.040 --> 0:14:01.920 SEC regulatory action around binance and coinbase, and maybe potentially 0:14:01.960 --> 0:14:05.600 this could factor into AI as well. I mean obviously 0:14:05.760 --> 0:14:08.920 different kind of questions here, but you know, two regulatory 0:14:08.960 --> 0:14:12.120 concerns in tech. You look at the best performing in 0:14:12.160 --> 0:14:15.840 the SP Nvidia number one, up one hundred and sixty 0:14:15.920 --> 0:14:18.559 seven percent this year. AMD also among the top five 0:14:18.600 --> 0:14:24.080 buzz performing. Are AI driven names like this overvalued at 0:14:24.080 --> 0:14:24.520 this point? 0:14:25.760 --> 0:14:27.880 It's a really interestant point. Certainly, the heights is they're 0:14:27.960 --> 0:14:30.720 around AI, the same heights that was there around blockchain 0:14:30.760 --> 0:14:33.680 and digital assets two years ago. So I think what's 0:14:33.680 --> 0:14:36.040 really notable is just we have to have that time 0:14:36.160 --> 0:14:39.960 lag between regulators getting winds of a new trend and 0:14:40.040 --> 0:14:43.360 actually getting the teeth behind the enforcement. They see they've 0:14:43.360 --> 0:14:46.560 really now got teeth in this particular wave of enforcement 0:14:46.600 --> 0:14:48.800 that they're kind of woken up to some of the 0:14:49.400 --> 0:14:52.280 lack of transparency, the lack of disclosure that's been around 0:14:52.280 --> 0:14:54.960 some of these exchanges. Perhaps they're going about it with 0:14:55.000 --> 0:14:58.160 a blood instrument, which is by forcing these exchanges into 0:14:58.240 --> 0:15:02.400 the classifications of other securities. But they're they're certainly asserting 0:15:02.440 --> 0:15:04.960 themselves in that way. When it comes to AI, it 0:15:05.040 --> 0:15:08.720 is completely uncharted territory. This explosion has been such a 0:15:08.760 --> 0:15:12.360 short time of a history so far we're speaking of 0:15:12.520 --> 0:15:16.160 the last six months through this explosion of usage around 0:15:16.240 --> 0:15:18.720 AI tools and the rolling out of all of them. 0:15:19.040 --> 0:15:21.160 I'm not sure that this will affect that those makers 0:15:21.160 --> 0:15:23.520 of chips, because in the sense the demand for AI 0:15:23.640 --> 0:15:25.960 is going to be burgeoning. But I think perhaps has 0:15:26.000 --> 0:15:28.520 been overstated is the impact is going to have on 0:15:28.560 --> 0:15:31.520 business models some of those names that just ticked up 0:15:31.560 --> 0:15:35.000 because AI was simply mentioned in an earnings release. We 0:15:35.080 --> 0:15:37.600 have to understand what is AI actually going to generate 0:15:37.920 --> 0:15:41.000 more revenue streams? Is going to bolster the efficiency or 0:15:41.040 --> 0:15:44.920 the capital structure, perhaps the earning structure of this company. 0:15:45.240 --> 0:15:47.680 And the question is, we don't know how regulation is 0:15:47.720 --> 0:15:50.000 going to look in AI. I don't doubt it's coming. 0:15:50.320 --> 0:15:52.840 I think though, because it's all so new, it'll take 0:15:52.840 --> 0:15:55.600 the regulators probably another year or two to figure out 0:15:55.800 --> 0:15:58.320 where they're going to go around copyright protection. But I 0:15:58.320 --> 0:16:01.080 look at the music industry, just how easily that industry 0:16:01.400 --> 0:16:05.080 when you ramped up its ability to capture royalties. When 0:16:05.120 --> 0:16:07.760 streaming came about, there was some loss of ground, but 0:16:07.840 --> 0:16:09.760 a real catch up by the music industry. So I 0:16:09.760 --> 0:16:11.720 think there's going to be a catch up around those 0:16:11.760 --> 0:16:15.560 generators of content. We just have to see where it goes. 0:16:15.600 --> 0:16:17.600 And remember, the regulators still have to sort out the 0:16:18.400 --> 0:16:21.360 regional banks in the US first, so we will probably 0:16:21.400 --> 0:16:23.440 have a couple more waves of regulations before we get 0:16:23.480 --> 0:16:23.800 to AI. 0:16:24.520 --> 0:16:25.800 You can just want to talk a little bit on 0:16:25.880 --> 0:16:28.440 the fixed income side. Any reason I shouldn't just stick 0:16:28.480 --> 0:16:30.320 my money into your paper and get four point six 0:16:30.440 --> 0:16:31.160 one percent. 0:16:32.440 --> 0:16:34.400 That's not the only reason is that inflation is still 0:16:34.400 --> 0:16:36.440 at five percent right now. It may be heading downwards, 0:16:36.480 --> 0:16:38.040 but if you're looking to make some kind of a 0:16:38.080 --> 0:16:40.600 real return, it's certainly more interesting than you made in 0:16:40.600 --> 0:16:43.360 the past, and you have a two year timeframe. You 0:16:43.360 --> 0:16:45.520 could do a lot worse sticking it in paper like that. 0:16:45.800 --> 0:16:48.400 But ultimately you put your time horizon is probably longer 0:16:48.440 --> 0:16:50.400 than two years you want to be looking at if 0:16:50.400 --> 0:16:52.400 you're trying to roll that investment just so you stuck 0:16:52.400 --> 0:16:54.320 it all in there in two years, what would you 0:16:54.360 --> 0:16:56.800 potentially be getting in two years? We still have this 0:16:56.880 --> 0:16:59.520 inversion yeel curve probably not the same. So if you 0:16:59.560 --> 0:17:01.280 want to invet us for the long term, you need 0:17:01.320 --> 0:17:03.880 to be looking at at a real rate of return 0:17:03.920 --> 0:17:08.160 after inflation, and that's where we get to aiming higher. 0:17:08.640 --> 0:17:10.960 I would say, also, we don't need to aim for 0:17:11.000 --> 0:17:13.879 the riskiest part of the capital structure any longer to 0:17:13.960 --> 0:17:15.920 get returns that are in excess of inflation. 0:17:16.560 --> 0:17:18.159 All right, Evan, thank you so much for joining us. 0:17:18.160 --> 0:17:21.399 Always appreciate getting your perspective. Evan Debit. She's a chief 0:17:21.440 --> 0:17:24.040 investment officer of Moneta Group. 0:17:24.160 --> 0:17:26.840 If you're listening to the tape, catch our live program 0:17:26.880 --> 0:17:30.840 Bloomberg Markets weekdays at ten am Eastern on Bloomberg Radio, 0:17:31.000 --> 0:17:33.720 the tune in app, Bloomberg dot Com, and the Bloomberg 0:17:33.760 --> 0:17:36.880 Business App. You can also listen live on Amazon Alexa 0:17:36.920 --> 0:17:40.200 from our flagship New York station, Just say Alexa play 0:17:40.320 --> 0:17:41.919 Bloomberg eleven thirty. 0:17:43.119 --> 0:17:46.240 The latest update on what's happening out there in those markets. 0:17:46.320 --> 0:17:52.200 Let's get to the deal of the day, Nasdak. Nasdak 0:17:52.680 --> 0:17:55.959 to acquire a Denza for ten point five billion dollars 0:17:55.960 --> 0:17:58.920 in cash and stock. That is your deal of the day. 0:17:59.160 --> 0:18:01.720 Let's bring in Paul Berg. He covers all the financial 0:18:01.760 --> 0:18:06.600 stuff for Bloomberg Intelligence. So Paul, what's NASDAK doing here? 0:18:06.680 --> 0:18:08.520 Number one? Well, first of all, number one, what is 0:18:08.560 --> 0:18:12.800 a Denza? And then why is NASDA buying a Denza? 0:18:13.000 --> 0:18:16.040 H Paul, thank you by having me. A Denza is 0:18:16.080 --> 0:18:21.400 a financial solutions company. It's a combination of two prior companies, 0:18:21.440 --> 0:18:25.440 Calypso and Axiom. Lipsa was involved in derivatives a lot 0:18:25.600 --> 0:18:29.520 in terms of the basically financial software companies, and Axiom 0:18:29.600 --> 0:18:30.960 is mostly risk management. 0:18:32.400 --> 0:18:36.240 So why purchase this? From Nasdaq's perspective, we get the 0:18:36.400 --> 0:18:38.840 whole idea that they want to move beyond, you know, 0:18:38.920 --> 0:18:42.720 the exchange themselves. But doesn't the purchase of this sort 0:18:42.760 --> 0:18:49.040 of put them in competition with other financial services software 0:18:49.480 --> 0:18:52.080 products or No? Is this sort of a standout kind 0:18:52.080 --> 0:18:52.680 of acquisition? 0:18:53.800 --> 0:18:56.480 No, I think it's actually not a standard at all. 0:18:56.640 --> 0:19:02.840 Nasdaq is actually very much a financial services company. Already 0:19:03.080 --> 0:19:06.200 almost three quarters of the revenue comes from financial software, 0:19:06.280 --> 0:19:10.240 not from the exchange commissions. And they've been buying companies 0:19:10.280 --> 0:19:15.440 like the Logos Investment over time that provide financial software 0:19:15.440 --> 0:19:20.240 services to the financial industry. So that's not unique and 0:19:20.280 --> 0:19:23.879 I think it's very strategically complementary for that. So in 0:19:23.960 --> 0:19:27.920 terms of competition question, yes, it is. They do compete 0:19:27.960 --> 0:19:30.840 with the companies, including the likes of trust banks and 0:19:30.920 --> 0:19:34.960 such that offers similar services, so it gets them more 0:19:34.960 --> 0:19:36.040 competitive against them. 0:19:36.480 --> 0:19:40.440 So what are what are exchanges today? Paul? I mean again, 0:19:40.480 --> 0:19:44.520 I kind of think about Nasdaq NYSA as places where 0:19:44.560 --> 0:19:48.440 you trade securities and they make the commissions, and that's 0:19:48.480 --> 0:19:51.359 the business. But that's a little data, isn't What did 0:19:51.400 --> 0:19:52.480 these exchanges do today? 0:19:54.720 --> 0:19:59.480 The exchangessforming themselves to become software companies. So it's not 0:19:59.600 --> 0:20:03.640 just now it's the obviously Eyes that's in the process 0:20:03.720 --> 0:20:06.800 of trying to buy Black Night to expand into a 0:20:07.520 --> 0:20:12.560 mortgage service and business and mortgage data business. And then 0:20:13.200 --> 0:20:21.800 companies even like Cboat that's been buying auxiliary businesses. They're 0:20:22.240 --> 0:20:25.520 even fast growing the exchange business. But then if you 0:20:25.560 --> 0:20:28.560 look across the pond, the LC and affinity if they've 0:20:28.560 --> 0:20:31.640 been huge in terms of moving away from the exchange 0:20:31.680 --> 0:20:34.240 products to being a software provider. 0:20:35.280 --> 0:20:37.879 Does this get into you know, I think back to 0:20:38.760 --> 0:20:43.120 these stories about speed training high frequency traders and such. 0:20:43.960 --> 0:20:48.160 It does becoming a software services company for the financial 0:20:48.160 --> 0:20:52.680 services sector get in the way in any way from 0:20:52.960 --> 0:20:57.480 sort of developing these broader market making activities, or I 0:20:57.480 --> 0:20:59.080 guess how do these two things go together? 0:21:00.760 --> 0:21:03.119 Also? I think in terms of getting a way of 0:21:03.920 --> 0:21:06.919 market making activities, these things they are only a handful 0:21:06.920 --> 0:21:09.720 of exchanges, right, they're dark food, a handful of dark pools, 0:21:09.720 --> 0:21:12.520 they're smaller exchanges. But really there are three large exchange 0:21:12.560 --> 0:21:16.840 operators SIBONNAS that can ice in the US, and then 0:21:16.920 --> 0:21:20.200 you have a handful of market makers like Virtual Citadel 0:21:20.440 --> 0:21:23.680 that operate most of the market. So the margins are 0:21:23.680 --> 0:21:27.800 extremely thing. They really dependent on market activity in the volume. 0:21:27.880 --> 0:21:30.399 So what the exchanges are trying to do, they're trying 0:21:30.440 --> 0:21:32.800 to walk away from it to more recurrent revenue. And 0:21:32.840 --> 0:21:36.840 this is one of the things that NASDEK is doing here. 0:21:36.960 --> 0:21:39.680 They said that are about eighty percent of the revenue 0:21:39.720 --> 0:21:44.320 that can come from adesthma is recurring, So they're looking 0:21:44.400 --> 0:21:48.399