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Speaker 1: Welcome to the Bloomberg pm L podcast. I'm pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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

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Speaker 1: you and your money, whether at the grocery store or

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Speaker 1: the trading floor. Find the Bloomberg pm L podcast on iTunes,

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Speaker 1: SoundCloud and at Bloomberg dot com. There's been a lot

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Speaker 1: of discussion about the big move that we've seen in

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Speaker 1: stocks and hitting new highs today, but there's another move

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Speaker 1: that I would argue has potentially even a bigger chance

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Speaker 1: to affect markets on a broad level, Fed funds futures.

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Speaker 1: This is a way that derivatives traders bet on when

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Speaker 1: the Fed will next hike rates. The priced in probability

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Speaker 1: of a March rate hike has gone from thirty six

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Speaker 1: percent from the end of last week to more than

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Speaker 1: eighty percent today. This is getting a lot of people's attention,

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Speaker 1: including Vincent Reinhardt. He's chief economist at Standish Melon Asset Management,

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Speaker 1: and we are lucky to have Vincent in the studio

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Speaker 1: with us in Bloomberg eleven three oh. Vincent, why has

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Speaker 1: there been such a huge move and expectations for a

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Speaker 1: March rate hike because Federal Reserve officials wanted it to happen,

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Speaker 1: i e. At the FED, you never surprise markets. You

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Speaker 1: can't act if it isn't priced in. They are sometimes

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Speaker 1: willing to disappoint markets, i e. Not act even though

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Speaker 1: it's priced in. At of a probability of policy action,

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Speaker 1: the March meeting was off the table. That was too

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Speaker 1: much of a surprise. If you want the meeting to

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Speaker 1: be live, you've got to get that probability a little higher.

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Speaker 1: But I just I'm struggling with that interpretation because we

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Speaker 1: did not hear definitive language out of the Federal Reserve

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Speaker 1: officials who have spoken at least certainly not Friday until yesterday.

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Speaker 1: Right that. We did see some yesterday, but before that

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Speaker 1: the prob ability was rising. So what was it the

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Speaker 1: triggered this? Yesterday? President's Dudley and Williams confirmed the rise specifically,

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Speaker 1: did they say that confirmed it? They said that the

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Speaker 1: meeting is live, that March is definitely on the table.

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Speaker 1: John President Dudley said that the cases uh stronger I believe,

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Speaker 1: and President Williams said the argument for acting in March

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Speaker 1: is it makes the possibility of three more than free

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Speaker 1: tightenings in two thousands seventeen possible, So they ratified the

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Speaker 1: pick up in the Fed funds futures and added a

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Speaker 1: bit to it. I think the move you had from

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Speaker 1: the end of last week into the beginning of this

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Speaker 1: week was importantly shaped by the Wall Street Journal's coverage

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Speaker 1: of the minutes from the January meeting. UH there was

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Speaker 1: a front page headline saying that the Federals RVs minutes

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Speaker 1: showed that it was eyeing aggressive rate increases. Nobody else

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Speaker 1: covering the minutes characterized it that way, not your porters

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Speaker 1: on bloom at Bloomberg. It was a pretty anodyne set

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Speaker 1: of descriptions of the economy and even handed. Uh. I

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Speaker 1: used to sign the minutes for six or seven years.

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Speaker 1: I know when you're not sending you a message, and

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Speaker 1: there was no message there, But for a Wall Street

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Speaker 1: Journal reporter to lean that far ahead would suggest to

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Speaker 1: me they had a little help that perhaps some Federal

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Speaker 1: Reserve officials suggested that markets had misinterpreted the minutes. They

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Speaker 1: had to be so anodyne, and in fact, there was

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Speaker 1: a message there. Well. As a professional Fed watcher, and

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Speaker 1: just as you recalled a former employee of the Federal

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Speaker 1: Reserve Bank of New York. You also economists for the

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Speaker 1: Federal Open Market Committee. What do you make of that?

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Speaker 1: How is broaden that out to just give us more

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Speaker 1: detail based on your experience. So, the Federal Reserve works

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Speaker 1: with markets, and it is important that uh, there are people, right,

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Speaker 1: I mean, it's not an amorphous. It's a big marble, yeah,

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Speaker 1: I know, and there are a lot of people in it,

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Speaker 1: I would imagine. Yeah, So staff at the Federal Reserve

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Speaker 1: are desirous not to be out of sync with markets.

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Speaker 1: That if they are trying to convey a particular message

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Speaker 1: and they don't here received correctly, they may help to

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Speaker 1: nudge the ship back into the appropriate course. The fact

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Speaker 1: that one Wall Street Journal reporter was different than everybody

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Speaker 1: else and subsequent Federal Reserve officials told the story confirming

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Speaker 1: that view makes me think that he got a little nudged.

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Speaker 1: How how often did members of the Federal Reserve do

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Speaker 1: this type of thing where they would go to one

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Speaker 1: reporter often Hills and Wrath was formerly the reporter. How

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Speaker 1: often do they sort of lean on one person to

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Speaker 1: kind of get the message right. Um, so there's two

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Speaker 1: different parts of the story. The one is in normally

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Speaker 1: just talking with market participants UM Federal Reserve staff, both

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Speaker 1: the Board and the Reserve Bank presidents would be trying

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Speaker 1: to tell a consistent story, and if it was currently

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Speaker 1: different than what was in markets, then they were revealing

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Speaker 1: some news. Uh the outright shaping a story by going

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Speaker 1: to a reporter and trying to to nudge things along.

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Speaker 1: That's usually done at a higher level. All right, So

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Speaker 1: now we've we've taken that into consideration. Give us your view.

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Speaker 1: What will happen March? What is it? So now we

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Speaker 1: got eight and ten chance of policy action priced in UM.

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Speaker 1: The case isn't closed yet, even though it's a little

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Speaker 1: stronger in in terms of President Dudley's view. Because Cherry

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Speaker 1: Yellen speaks at the end of the week. She can

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Speaker 1: take that punch bowl away if she wants. Well, what

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Speaker 1: do you make of the fact that the increase shorter

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Speaker 1: term rates has led to a flattening of the yield curve?

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Speaker 1: In other words, the bond market seems to be suggesting

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Speaker 1: that a sooner rate hike will dampen growth and remove

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Speaker 1: some of the momentum that we've seen. So they're pricing

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Speaker 1: in a FED mistake it's a little bit like December

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Speaker 1: of last year when the FED tightening a quarter point,

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Speaker 1: just a quarter points snuck in at the end of

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Speaker 1: two thousand sixteen, UH seemed to vow to convey the

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Speaker 1: view the FED was serious and tightening four times in

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Speaker 1: two thousand sixteen. UH market participants viewed that as as

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Speaker 1: inappropriate and there was a big sell off. And over

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Speaker 1: the course of last year, FED guidance has been coming

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Speaker 1: down closer to where markets are. Two get the idea

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Speaker 1: that there may be three or four tightenings this year

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Speaker 1: is pulling guidance away from where markets are and so

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Speaker 1: that they're thinking they're a mistake involved. I want to

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Speaker 1: thank you very much. Vincent Reinhardt joining US at chief

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Speaker 1: economist Standish Melon Asset Management m FOX. I hear there

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Speaker 1: was a speech last night. Did you hear anything about that? Yes,

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Speaker 1: not only did I hear that there was a speech,

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Speaker 1: but I watch I did watch it. Yeah. I think

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Speaker 1: it was our president, President Trump speaking to Joint UH

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Speaker 1: Congress yesterday. And for some impressions. Neil Dwayne is here

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Speaker 1: with US global strategist for Alian's Global Investors, which has

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Speaker 1: four eighty one billion dollars under management. So, Neil, what

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Speaker 1: was your number one takeaway from President Trump speech? While

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Speaker 1: have now watched to his inauguration speech and the one

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Speaker 1: last night. My my takeaway was actually that I was

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Speaker 1: quite impressed with him, maybe for the first time as

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Speaker 1: an orator. I felt he pitched the gravity of the

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Speaker 1: situation very well and came over as very presidential. I

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Speaker 1: think as an investor that we didn't learn anymore. And

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Speaker 1: I think when one saw the body language and the

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Speaker 1: reactions to many of his comments in the in his speech,

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Speaker 1: you could see how divided Congress is. So I think

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Speaker 1: when we come to now the execution of the Trump agenda,

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Speaker 1: we're going to see what gridlock looks like in in

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Speaker 1: in Congress. So do you think that the rally that

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Speaker 1: we're seeing today, particularly in financials, is a head fake? Well,

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Speaker 1: I'm I'm very concerned that we've already had quite a

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Speaker 1: strong rally. I think financials are now up since he

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Speaker 1: was elected. I think we can get too carried away

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Speaker 1: with the opportunities to maybe soften regulation or change the

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Speaker 1: you know, the d O L rules and and and

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Speaker 1: some of the things that Trump has been talking about.

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Speaker 1: I don't necessarily sarily see that they are central to

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Speaker 1: what he wants to achieve in terms of making America

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Speaker 1: grace again. The the US financials are wealth wealth financed,

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Speaker 1: their wealth structured. They work in a very competitive industries.

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Speaker 1: We know with the price competition now between Fidelity and

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Speaker 1: Schwab in the in the brokerage business, and I would

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Speaker 1: are there's overcapacity in the banking industry, so margins are

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Speaker 1: going to remain under pressure. But if people are want

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Speaker 1: to borrow, at least the US banks have the capacity

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Speaker 1: to lend. A lot of banks in Europe are still

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Speaker 1: very financially weak and cannot create the credit that the

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Speaker 1: that the economy isn't it requires. Neil, I'm wondering if

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Speaker 1: you could just give people a little bit of your background,

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Speaker 1: because I know that you previously were at Kleinwood Benson

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Speaker 1: and that may be an old name for people to remember,

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Speaker 1: and then maybe transition into telling us about China. The

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Speaker 1: world isn't just all about one person. It's important. But

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Speaker 1: I just want to get your thoughts because I know

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Speaker 1: you've written a piece about taking advantage perhaps of what

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Speaker 1: we when most people don't know about what's going on

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Speaker 1: in China. Yes, I mean, I I think I've spent

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Speaker 1: fourteen years working in Frankfurt, so I do feel as

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Speaker 1: an Englishman I have a view on Europe which is

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Speaker 1: not necessarily what you get from every Londoner who come

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Speaker 1: comes across. We're going to get that view and a

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Speaker 1: set okay, But I think I think actually the moment

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Speaker 1: that China is very interesting because we're about to get

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Speaker 1: the new government formed for the next five to ten years,

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Speaker 1: and so I think for US two thousand and seventeen

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Speaker 1: is going to be a year of stability, all other

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Speaker 1: things being equal, and I think where President Gjing Ping

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Speaker 1: goes is going to be very important to the rebalancing

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Speaker 1: of China and therefore the growth prospects for for all

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Speaker 1: of US global citizens. But what I would then finish

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Speaker 1: by saying is, of course the unknown at this moment

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Speaker 1: in time. And he was, to your opening question, very

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Speaker 1: elliptical about it last night, was what is his position

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Speaker 1: on China and training? Yes, President Trump, because I think

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Speaker 1: there is a there is a concern that he said

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Speaker 1: on day one in the White House, I'm going to

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Speaker 1: accuse them of currency manipulation, and we're nowhere near that.

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Speaker 1: But clearly for global investors and for the global economy.

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Speaker 1: Any sign of tariffs or trade friction is going to

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Speaker 1: be bad news for US. I want to do get

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Speaker 1: to Europe. There was a story on the Bloomberg today

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Speaker 1: about n HSBC study showing that a good amount of

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Speaker 1: money is flowing out of US equities and into European stocks.

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Speaker 1: Are you seeing this? Was seeing it at the at

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Speaker 1: the margin. But I think when I travel around the world,

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Speaker 1: I think many investors have known they've got it right

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Speaker 1: by being along the US, including many US investors. But

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Speaker 1: when one looks at just the headline valuations of the

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Speaker 1: US against ay Asian or or European markets, I think

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Speaker 1: there's a sense that the opportunities now lie outside the

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Speaker 1: US equity market in general. But I think what we're

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Speaker 1: also seeing and I think that is also driving You

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Speaker 1: know that the rally at the moment in the US

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Speaker 1: is people are now losing money in their bomb bomb portfolios.

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Speaker 1: You know, yields are rising, they've been they've been supported

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Speaker 1: by enormous contents of KIWI and monetary policy which is

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Speaker 1: now waxing. And therefore we're now going to get ourselves

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Speaker 1: into a situation where bond portfolios are generating no return

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Speaker 1: or negative return, and the only prospect for most clients

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Speaker 1: is to invest in the equity market, where we're going

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Speaker 1: to see some reflation and stimulus rather the more austerity,

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Speaker 1: which of course is what we've seen in the last

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Speaker 1: five years. As an expert in putting together portfolios with

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Speaker 1: different assets all over the world, what is it that

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Speaker 1: you would recommend right now to investors? What should they sell?

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Speaker 1: We've got an SMP five hundred at nine and I'm

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Speaker 1: wondering what would they What do you recommend selling in

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Speaker 1: order to rebalance? Well? I think I tend to feel

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Speaker 1: like I have two conversations in my role as a

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Speaker 1: strategist with our clients. Some clients are looking to make

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Speaker 1: money on their capital, and therefore I think you inevitably

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Speaker 1: have to own the equity markets because the bond markets

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Speaker 1: have become so so miss priced through the quant state

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Speaker 1: of vising. But a lot of clients look at the headlines,

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Speaker 1: look at the news you're carrying almost every day about

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Speaker 1: politics somewhere, and go, oh, the world feels a risky place.

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Speaker 1: Maybe I'll just hunt for income. And therefore I think

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Speaker 1: what would I be buying is things like US high yield,

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Speaker 1: where you can get five or six percent returns quite

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Speaker 1: safely in dollars or Asia or emerging market bonds. Thanks

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Speaker 1: very much for joining us. Neil Dwayne is the global

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Speaker 1: strategist for Alliance A Global Investors, giving us a real

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Speaker 1: diverse response to a last night's speech by President of

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Speaker 1: Donald Trump. You know, Lisa Abrama had, some of the

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Speaker 1: wonderful things in the stock market are just expressions of

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Speaker 1: human demand or human want. Because you know that snap

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Speaker 1: the parent company of Snapchat, is hoping to raise three

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Speaker 1: billion dollars with an initial public offering, And I thought,

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Speaker 1: what better way to sort of phrase the conversation about

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Speaker 1: this with Paul Sweeney, our head of director of North

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Speaker 1: American Research media analysts for Bloomberg Intelligence, And he'll tell

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Speaker 1: us whether he uses Snapchat. But is this a silly

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Speaker 1: fun app for people with more time than sense or

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Speaker 1: Paul Sweeney, is it a trailblazing technology company with vending machines. Well,

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Speaker 1: it depends who you ask. I think if you talk

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Speaker 1: to their demographic, which is the younger demographic eighteen to

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Speaker 1: twenty four, eighteen to thirty four, maybe even a little

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Speaker 1: bit younger than that, it is absolutely absolutely a utility

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Speaker 1: for them and and in fact that the engagement, which

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Speaker 1: is something the company talks about a lot, is very

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Speaker 1: high on Snapchat. So it's not a loyal demographic UM

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Speaker 1: historically no UM. So we'll have to see how it

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Speaker 1: ages on this platform. And you know, one of the

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Speaker 1: concerns is um that this younger demographic can you know,

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Speaker 1: not that loyal and that the new next cool thing

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Speaker 1: that comes along, they could just leave Snapchat or Facebook

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Speaker 1: or wherever they are to go to the new cool thing.

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Speaker 1: So that's certainly a risk. But you know, right now

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Speaker 1: snapchats talking about uh we may not be the biggest

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Speaker 1: that would be Facebook with close to two billion monthly users,

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Speaker 1: but our users are younger, which advertisers love, and they're

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Speaker 1: very engaged, which is another thing advertisers like. Uh So

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Speaker 1: that is clearly the pitch that Snapchat makes to Madison

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Speaker 1: Avenue and to advertisers and also to investors. So does

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Speaker 1: just to give a sense of how signtive again this

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Speaker 1: I p O is, are there other technology companies sort

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Speaker 1: of waiting in the wings to see how this snap

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Speaker 1: IPO goes to figure out whether they should also go

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Speaker 1: the same route this year? I think so, I think

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Speaker 1: if you think about some of the unicorns out there.

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Speaker 1: Most notable would probably be uber Um, Airbnb, for example.

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Speaker 1: So there's a lot of companies out there that have

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Speaker 1: been very successful raising capital in the private market, to

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Speaker 1: have been a very liquid and very efficient market for

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Speaker 1: them over the last several years. But at some point

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Speaker 1: they and their initial investors need liquidity, and that typically

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Speaker 1: is achieved through an I P O. So I think

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Speaker 1: this SNAP I PO is going to be not only

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Speaker 1: important for UH SNAP itself and their investors, but really

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Speaker 1: the technology technology sector overall, maybe even the whole new

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Speaker 1: deal calendar overall, but certainly for some of these tech

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Speaker 1: investors to see how far public investors will go in

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Speaker 1: terms of valuation, in terms of going out on the

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Speaker 1: risk curve for some of these newer companies. UM. So,

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Speaker 1: I think that's gonna be that makes this deal important

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Speaker 1: on many levels. You get a chance to anyone about

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Speaker 1: the road show. Yeah, the the road show, about the

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Speaker 1: thirty five minute video, the thirty five minute video which

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Speaker 1: kind of let Evan Spiegel in his twelve million dollar

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Speaker 1: house in Los Angeles, right, and and he didn't show up.

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Speaker 1: I understand that the Boston UH lunch, but so, but

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Speaker 1: it's this is a company that because of this video

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Speaker 1: they can go right to Q and A. And I've

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Speaker 1: heard that. Uh, you know, it's been standing room only

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Speaker 1: at most of these lunch meetings. It's some of the

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Speaker 1: big cities. They've been in London, New York, Boston, San Francisco.

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Speaker 1: So the demand is clearly there. But the the the

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Speaker 1: challenging questions are also there. And some of the common

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Speaker 1: ones obviously are uh the relatively small size of the

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Speaker 1: uh snapchat platform versus say, on Facebook, but also the

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Speaker 1: slowing user growth. It's still growing very quickly, but the

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Speaker 1: growth rate is slowing, and is that a concern? It

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Speaker 1: was almost flat for all of last year. No, No,

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Speaker 1: I mean there's they're still adding a lot of subscribers,

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Speaker 1: but the growth rate is is clearly slowing. And you know,

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Speaker 1: the question for you know, UM investors is ge we've

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Speaker 1: kind of been, uh become accustomed to seeing these billion dollar,

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Speaker 1: billion user platforms like Facebook. Uh and if you don't

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Speaker 1: get there, what does that mean? Fifty million users last

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Speaker 1: year were added and then they said five million in

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Speaker 1: the last quarter of right that that that that's right? Yeah,

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Speaker 1: So again that is clearly a concern and so again,

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Speaker 1: what the snap is lost half a billion last year.

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Speaker 1: They lost half a billion on about four a million

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Speaker 1: of revenue. But exactly, you know, the revenue growth is

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Speaker 1: certainly there again, Yeah, exactly, they had form a million

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Speaker 1: revenue last year. You know street consensus and that estimates

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Speaker 1: are kind of out there for a billion this year,

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Speaker 1: maybe two billion next year and maybe three billion year

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Speaker 1: after that. UM. So clearly the revenue growth story is there.

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Speaker 1: But there's definitely some issues that investors are concerned about,

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Speaker 1: including you know the fact that no shareholders will get

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Speaker 1: any votes whatsoever. It's not that you get a smaller

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Speaker 1: vote than the founders, you get zero votes, and that

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Speaker 1: is very unusual. UM. And that is obviously a concern

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Speaker 1: for some investors. So from from media to old we

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Speaker 1: also are getting news about Time Inc. And how they're

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Speaker 1: looking for potential suitors to to submit formal bids uh

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Speaker 1: for acquiring the company by next week. This is according

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Speaker 1: to a New York Times story that came out on

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Speaker 1: the news. Time shares are up almost seven percent. What

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Speaker 1: do you make of this? Yeah, this is a company

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Speaker 1: that's been arguably up for sale for a long time.

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Speaker 1: Alex Sherman of OM any reporter. Bloomberg News has been

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Speaker 1: all over the story for for many months, and uh,

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Speaker 1: you know, I think the issue here is there's um

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Speaker 1: even though that the magazine business, like all publishing businesses,

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Speaker 1: are greatly challenged in terms of advertising growth and subscription growth. Um,

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Speaker 1: it is a you know, the vervirtually very little growth

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Speaker 1: if any in the magazine business. However, some of these

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Speaker 1: brands are still very relevant in the market place, and

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Speaker 1: Time Ink clearly has with with People Magazine and Sports

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Speaker 1: illustrat at some of the you know, the best brands

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Speaker 1: in the magazine business. So clearly there's interest from from

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Speaker 1: certain players, whether it's private equity UM or even some

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Speaker 1: strategic are such as A Meredith for example, who's been

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Speaker 1: in talk. So there's clearly some interesting that Edgar Bronfman

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Speaker 1: absolutely who's got a lot of experience in media, and

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Speaker 1: I just want to correct myself, Alex Sherman actually did

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Speaker 1: break this. Yeah, So it's uh, you know, so surprisingly

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Speaker 1: that there's a lot of interest in these marquee properties

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Speaker 1: because um, you know a lot of people feel like

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Speaker 1: magazines can in fact live in a digital world. Um

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Speaker 1: that advertise them. But we're talking about maybe we need

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Speaker 1: to think of new terms for it, because magazine obviously

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Speaker 1: refers to some paper product that you hold, which they

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Speaker 1: may or may not continue to print. But when you

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Speaker 1: take a look at everything that they publish, whether it

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Speaker 1: is Health Magazine, Travel and Leisure, Entertainment, Weekly, Coastal, I mean, departure,

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Speaker 1: it just goes on and on. There's that's content and

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Speaker 1: last time I check, you gotta have something to put

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Speaker 1: on the Internet. That's right, and that's right. And so

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Speaker 1: it all comes down to brands. The value of brands,

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Speaker 1: whether it's in an analog world inc on paper or

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Speaker 1: in a digital world. You'll you'll hear even all the

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Speaker 1: big media companies, whether it's the commer Time owner not

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Speaker 1: talk about their cable networks. They talk about their brands.

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Speaker 1: ESPN is a brand, UM CNN is a brand and

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Speaker 1: things like that. Fox News is a brand. And so

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Speaker 1: the question is can you monetize those brands in a

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Speaker 1: digital world. And that's very true for the magazine company

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Speaker 1: UM as well, and they've really spent a lot of

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Speaker 1: money kind of pruning their brands and their their portfolio

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Speaker 1: and trying to, you know, make sure that they can

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Speaker 1: live in a digital world and get paid whether it's

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Speaker 1: through advertising or subscriptions. Paul Sweeney, thank you so much

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Speaker 1: for joining us. A lot to talk about and a

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Speaker 1: lot to keep track of going forward, Director of North

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Speaker 1: American Research and media analyst for Bloomberg Intelligence. I want

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Speaker 1: to bring in Bloomberg's own Eric Schatzker now to give

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Speaker 1: us more detail about Ray Dahlio stepping down as the

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Speaker 1: co chief executive of Chief Executive Office. Getting that I

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Speaker 1: can't keep the titles in check a much easier way

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Speaker 1: to think about this. Another management shake up at Bridgewater. Yes,

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Speaker 1: how one constant at Bridgewater is Ray Dalio. He runs

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Speaker 1: the world's largest hedge fund manager. Bridgewater has an excess

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Speaker 1: of a hundred and fifty billion dollars under management. It's

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Speaker 1: pure alpha fund has historically been one of the most successful.

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Speaker 1: Bridgewater also was at the forefront the vanguard of the

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Speaker 1: creation of risk parity funds. The All Weather Fund is

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Speaker 1: the risk parody fund Bridgewater runs and advanced eleven point

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Speaker 1: six last year parody funds. You know what I'm going

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Speaker 1: to say, that's a bit of a diversion and suggest

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Speaker 1: that we get back to what happened. John Rubinstein, the

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Speaker 1: former Apple executive sixteen years at Apple job. Ray Dalio,

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Speaker 1: brought in last year to be co CEO, is leaving

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Speaker 1: after only ten months. Why Ray Dalio himself says in

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Speaker 1: his statement, we mutually agree that he, meaning Rubinstein, is

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Speaker 1: not a cultural fit for Bridgewater. Bridgewater is an unusual place.

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Speaker 1: Some people would go so far as to say it's

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Speaker 1: an odd place. John Rubinstein was an odd hire. He

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Speaker 1: was brought in as a leader and also as a

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Speaker 1: technology pioneer. Ray says he was successful in creating a

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Speaker 1: new technology architecture for Bridgewater, but clearly as a co CEO,

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Speaker 1: it really didn't work out. The big issue here is

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Speaker 1: that it hasn't worked out for Bridgewater on a management

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Speaker 1: level in a long time. Eileen Murray, who remains a

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Speaker 1: co CEO, was brought in back in two thousand nine.

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Speaker 1: She's still there. But Bridgewater has experimented now with Rubinstein,

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Speaker 1: with Greg Jensen, who was once a co CEO and

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Speaker 1: remains a co c i O, with Dalio himself as

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Speaker 1: a co CEO, nothing seems to work okay. So so yes,

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Speaker 1: we have known that it is an odd place and

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Speaker 1: has an idiosyncratic way uh of managing its culture. Beyond

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Speaker 1: the gossip factor. What's the practical implication of the turnover here?

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Speaker 1: I mean, Bridgewater is, as you pointed out, Eric, the

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Speaker 1: biggest hedge fund firm in the world, at least believed

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Speaker 1: to be. And uh, yet they've continued to see inflows

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Speaker 1: despite the fact that their hedge funds have seen outflows,

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Speaker 1: They've continued to do deliver performance. So what's the implication, Well,

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Speaker 1: the big practical question is how is it going to

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Speaker 1: affect investment performance? If you believe Ray Dalio, this is

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Speaker 1: going to help the co chief investment officers remain focused

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Speaker 1: on managing the one and fifty billion dollar pile. That's

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Speaker 1: what the limited partners, the LPs, the investors in Bridgewaters

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Speaker 1: funds should care about. The problem is that this creates

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Speaker 1: a diversion. These constant this constant management turnover has been

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Speaker 1: a distraction and a diversion for Ray, the founder, the chairman,

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Speaker 1: and until now the interim chief executive co chief executive officer.

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Speaker 1: So if this works, if Eileen and David McCormick, who's

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Speaker 1: been at Bridgewater for eight years as a former Treasury

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Speaker 1: under secretary, can together run this firm in a way

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Speaker 1: that Ray approves of, that will allow him and Bob

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Speaker 1: Prince and Greg Jensen, together the three co chief investment officers,

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Speaker 1: to worry about generating returns. There were macro fund Pure Alpha.

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Speaker 1: Pure Alpha two is a macro fund. We know how

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Speaker 1: challenge the macro strategy has been. Pure Alpha two generated

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Speaker 1: a two point six percent excuse me, two point four

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Speaker 1: percent return last year. Not great, but better than a

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Speaker 1: lot of other macro funds. The investors want more. Bloombergs

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Speaker 1: Eric Shatska, thank you so much for joining us. We'll

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Speaker 1: be following this as we learn more. And this is

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Speaker 1: a story that does have implications about for the broader market,

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Speaker 1: given just the size of it and it's importance to

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Speaker 1: the hedge fund world. Thanks for listening to the Bloomberg

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Speaker 1: pien L podcast. You can subscribe and listen to interviews

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Speaker 1: at iTunes, SoundCloud, or whatever podcast platform you prefer. I'm

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Speaker 1: Pim Fox. I'm out there on Twitter at pim Fox.

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Speaker 1: I'm out there on Twitter at Lisa Abramo. It's one

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

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Speaker 1: Bloomberg Radio.