WEBVTT - P&L: We'll See A Massive Disruption in Society, Scaramucci Says 0:00:04.760 --> 0:00:08.080 Welcome to the Bloomberg P and L Podcast. I'm Pim Fox. 0:00:08.119 --> 0:00:11.200 Along with my co host Lisa Abramowitz. Each day we 0:00:11.280 --> 0:00:14.480 bring you the most important, noteworthy, and useful interviews for 0:00:14.520 --> 0:00:16.880 you and your money, whether at the grocery store or 0:00:16.920 --> 0:00:20.680 the trading floor. Find the Bloomberg P L Podcast on iTunes, 0:00:20.840 --> 0:00:29.840 SoundCloud and at Bloomberg dot com. Now we want to 0:00:29.880 --> 0:00:34.240 prepare for what's to come in the world with Fica Sebzma. 0:00:34.600 --> 0:00:37.320 We are very pleased to have you here, CEO of 0:00:37.440 --> 0:00:41.240 Royal ds M with more than twenty employees, a company 0:00:41.760 --> 0:00:46.040 with more than ten billion dollars of market capitalization. Uh faca. 0:00:46.159 --> 0:00:50.600 You have outlets all across the world, and I want 0:00:50.600 --> 0:00:53.640 to ask you about one place in particular, that's China. 0:00:54.280 --> 0:00:56.920 Can you give us a sense, given that you oversee 0:00:56.960 --> 0:00:59.880 operations on the ground in one of the most uh 0:01:00.040 --> 0:01:02.760 uh questionable areas, people don't have a sense of what's 0:01:02.800 --> 0:01:05.600 actually going on with the economy. What's your perspective? I 0:01:05.680 --> 0:01:08.360 just wanted to tell what what is world s M. 0:01:10.760 --> 0:01:13.640 Thank you for having me here. I indeed factor superman, 0:01:13.760 --> 0:01:17.839 CEO of Royal ds M, founded in an alands, operating worldwide. 0:01:17.880 --> 0:01:20.560 More than two and fifty locations and all continents in 0:01:20.600 --> 0:01:24.280 the world, being the biggest in nutritional ingredients in the world. 0:01:24.319 --> 0:01:28.759 So people who eat sometimes and many people do, half 0:01:28.800 --> 0:01:34.200 a chance that they eat our ingredients every single day. 0:01:34.680 --> 0:01:39.520 Please continue to do so, including our ingredients, but also materials, 0:01:39.640 --> 0:01:44.840 materials for solar panels, for second generation bio fields, new energies, 0:01:44.920 --> 0:01:50.520 so sustainability. So sustainability and nutrition are two core areas 0:01:50.560 --> 0:01:54.280 which we deliver to our customers globally. Okay, So now 0:01:54.360 --> 0:01:59.240 now China and China, I think there's many elements in China, 0:01:59.320 --> 0:02:02.360 second largest economy of the world, still smaller than the US, 0:02:02.480 --> 0:02:06.840 but running up more than five six annual growth? Is 0:02:06.840 --> 0:02:10.040 that bad? Should we be concerned? I don't think at all. 0:02:10.800 --> 0:02:13.120 The fundamentals I will come back on that. There is 0:02:13.160 --> 0:02:15.320 a there is a point. I agree with you. I 0:02:15.360 --> 0:02:18.880 agree with you. P please interrupret me as much as possible. 0:02:19.600 --> 0:02:24.079 But it is not only positive, but the fundamentals are 0:02:24.120 --> 0:02:27.280 not bad. I mean, there's a middle class, there is urbanization. 0:02:27.720 --> 0:02:30.480 There's new people every single day coming on the markets 0:02:30.520 --> 0:02:33.440 who would never purchase before, and once they move from 0:02:33.440 --> 0:02:36.480 the rural area to the domestic area, they do purchase. 0:02:36.919 --> 0:02:39.400 So the fundamentals in China is not bad. Two million 0:02:39.440 --> 0:02:43.680 people from from universities, a big need, six percent grows. 0:02:43.800 --> 0:02:46.160 But ask me your question about the concerns, because you 0:02:46.240 --> 0:02:48.120 seem to be concerned or not well. I mean just 0:02:48.160 --> 0:02:50.040 the fact that they're financing at all with the fastest 0:02:50.080 --> 0:02:52.679 pace of debt creation that know everybody is seen in 0:02:52.720 --> 0:02:55.040 the world. I mean, this is a tremendous concern for 0:02:55.080 --> 0:02:57.600 people in my world and focus. Yes, I know, state 0:02:57.720 --> 0:03:00.840 that deficit pretty low, still one of the lowest in 0:03:00.880 --> 0:03:03.760 the world. But I agree with you. The deficits on 0:03:03.960 --> 0:03:06.880 companies is you and many companies are state owned and 0:03:06.919 --> 0:03:09.520 it's not counted the state deficits, So there you have 0:03:09.560 --> 0:03:13.200 a point. But also deficits in provinces and lower government 0:03:13.440 --> 0:03:16.680 levels is pretty huge. And even the big thing is 0:03:16.960 --> 0:03:20.400 unclear to everybody how big the deficit is. For me, 0:03:20.680 --> 0:03:23.320 a bigger underlying issue is where is the gross coming 0:03:23.360 --> 0:03:27.000 from in China? And the gross is coming from investments, 0:03:27.280 --> 0:03:30.160 the growth is coming less and less from exports, and 0:03:30.200 --> 0:03:34.600 the growth is not coming yet enough from domestic consumption. 0:03:35.160 --> 0:03:38.160 And there are three very clear reasons why the people 0:03:38.280 --> 0:03:42.200 save money in China and do not consume, and that 0:03:42.360 --> 0:03:45.520 is because their concerns about education, their concerns about the 0:03:45.600 --> 0:03:50.240 health care, their concerns about pensions. Later on, it sounds 0:03:50.240 --> 0:03:55.440 just like Americans. No, not at all. You know are Americans. 0:03:55.440 --> 0:03:58.280 They're concerned about their pensions, they're concerned about their health care, 0:03:58.280 --> 0:04:02.119 and they're concerned about education. You are totally right. However, 0:04:02.600 --> 0:04:06.000 having said so, you know, the afforage spent of the 0:04:06.040 --> 0:04:09.880 dollar earned of the average American, it's a little bit 0:04:09.920 --> 0:04:13.840 over the dollar. And the average spent of the dollar 0:04:13.920 --> 0:04:17.680 earned in China is around sixty cents. The average spent 0:04:17.839 --> 0:04:21.440 in Europe is around eighty cents of the dollar earned. 0:04:22.040 --> 0:04:25.800 So the Chinese are one of the biggest safest in 0:04:25.800 --> 0:04:28.080 the world. So maybe they're concerned about the same issues 0:04:28.360 --> 0:04:32.000 as the Europeans or the Americans, but they saved much 0:04:32.040 --> 0:04:36.200 more money for those occasions in pension, healthcare, and education. Well, 0:04:36.240 --> 0:04:38.760 I have to also because there is no safety net 0:04:38.800 --> 0:04:41.320 that has really been in place like the one that 0:04:41.440 --> 0:04:44.640 exists in many European countries and also uh in the 0:04:44.720 --> 0:04:46.359 United States. And I want to turn if you can 0:04:46.480 --> 0:04:49.320 to Europe and tell us you think that there's going 0:04:49.360 --> 0:04:52.400 to be another country that will vote on leaving the 0:04:52.400 --> 0:04:58.880 European Union. Obviously we had Brexit in during Yes, baby Italy, 0:04:59.160 --> 0:05:02.320 they have a reference coming up in December. What's your 0:05:02.360 --> 0:05:04.719 thought and what do you think will Europe look like 0:05:04.800 --> 0:05:08.160 a year from now? Please? No, please, we need to 0:05:08.240 --> 0:05:11.760 have a strong Europe. It's the only way. I mean, 0:05:12.360 --> 0:05:16.040 a strong Belgium. Maybe get them to get their government together, right, yeah, 0:05:16.240 --> 0:05:20.160 United Belgium would already be a great step forward now 0:05:20.240 --> 0:05:24.000 breaking up even the European Treaty with Canada almost as 0:05:24.040 --> 0:05:28.360 a part of Belgium. But I think what we need 0:05:28.360 --> 0:05:31.479 in Europe is not a split of Europe in twenty 0:05:31.560 --> 0:05:34.560 seven pieces. That's the way we started. That's not the 0:05:34.600 --> 0:05:37.240 direction we should go to. So we need to be 0:05:37.360 --> 0:05:42.240 united to form an economic power block um compared with 0:05:42.320 --> 0:05:45.400 the US, compared with China, compared within the compared to 0:05:45.680 --> 0:05:49.479 what it looked like tim Brazil um. So that is 0:05:49.520 --> 0:05:52.080 what what we need. But my big concern is if 0:05:52.120 --> 0:05:55.279 I look to maybe also the elections here in the country, 0:05:55.520 --> 0:05:58.000 if I look to the elections and the Brexit in 0:05:58.120 --> 0:06:02.479 European countries, is are our leaders and maybe not only 0:06:02.520 --> 0:06:08.200 the political leaders, but also leaders of businesses or institutions, 0:06:09.040 --> 0:06:12.880 are our leaders still trusted by the voters? Are the 0:06:12.960 --> 0:06:18.040 leaders still trusted by the people they represent? Um? And 0:06:18.080 --> 0:06:21.040 that is I think a concern. And the British people 0:06:21.400 --> 0:06:25.960 were just angry and they voted, and I think maybe 0:06:26.200 --> 0:06:28.680 they did not voted so much for stepping out to 0:06:28.760 --> 0:06:31.440 you being a union, but they voted for being very 0:06:31.520 --> 0:06:34.480 angry and felt to be left alone. And that is 0:06:34.520 --> 0:06:38.200 a concern and broader than in Europe or the United States. Well, 0:06:38.320 --> 0:06:40.240 and to that question you're saying, you know, do the 0:06:40.279 --> 0:06:43.520 voters trust the politicians and the corporate leaders? I think 0:06:43.520 --> 0:06:45.599 that in a lot of corners the answer is no. 0:06:46.320 --> 0:06:49.920 Uh So what do the politicians and the corporate leaders 0:06:49.960 --> 0:06:54.240 such as yourself do too? And gender more trust to 0:06:54.320 --> 0:06:56.640 do what you stand for and to define where you 0:06:56.680 --> 0:07:00.279 stand for. As a company. Should I only make money? 0:07:00.360 --> 0:07:02.880 Should I take care my shareholder has become as rich 0:07:02.920 --> 0:07:05.479 as possible, as fast as possible? Is that the only 0:07:05.480 --> 0:07:08.720 thing I stand for? Please know I ever brought a 0:07:08.800 --> 0:07:11.440 purpose to serve. I of course should take care of 0:07:11.440 --> 0:07:14.200 my shoulders, but it should take care of my own people. 0:07:14.280 --> 0:07:16.720 I should take take care of my customers. I should 0:07:16.720 --> 0:07:19.160 take care of society as a whole. We have a 0:07:19.200 --> 0:07:22.440 big influence in the world in terms of nutrition or 0:07:22.480 --> 0:07:25.040 in terms of climate change. And I see that as 0:07:25.040 --> 0:07:27.640 a priority, as a goal for our company, and I 0:07:27.680 --> 0:07:30.240 hope that our companies do it too, because that's the 0:07:30.280 --> 0:07:33.160 concern of the people, like you said, about their pensions, 0:07:33.160 --> 0:07:36.360 about the future, about the climate, and a few yields 0:07:36.400 --> 0:07:40.320 more on your investments, and a few percentage more and 0:07:40.480 --> 0:07:43.680 investing in the wrong things which kills our climate later 0:07:43.760 --> 0:07:48.120 on will cost our citizens later on much much more money. 0:07:48.160 --> 0:07:52.040 So that's the way we should run our countries, our companies, 0:07:52.520 --> 0:07:55.120 and that's the way I try to do with them. 0:07:55.200 --> 0:07:57.080 I want to thank you very much for spending time 0:07:57.120 --> 0:08:00.280 with us. Figures the best money is the chief Exam Kitti, 0:08:00.360 --> 0:08:16.280 Chairman of Royal d s M. This is Bloomberg. I 0:08:16.320 --> 0:08:18.960 want to talk with someone about what the implications are 0:08:19.560 --> 0:08:23.080 about this latest election season. I really don't have a 0:08:23.120 --> 0:08:26.440 sense of that, but you know who does, Pim Michael Jesus. 0:08:26.680 --> 0:08:29.440 I was going to say, Michael Jesus, he knows everything 0:08:29.480 --> 0:08:33.520 about this Chief municipal ready for you, and he's here 0:08:33.559 --> 0:08:36.200 with us. Michael, thank you for joining us. Hey, thanks 0:08:36.240 --> 0:08:39.160 for having me on. Very flattering. So I was reading 0:08:39.200 --> 0:08:43.040 your your latest note, and uh, you seem to believe 0:08:43.160 --> 0:08:46.920 that they will not get some kind of definitive results, 0:08:46.920 --> 0:08:49.920 such as a president that's a Democrat as well as 0:08:50.160 --> 0:08:53.080 Congress that's Democratic, but the sort of split the difference, 0:08:53.120 --> 0:08:57.040 and that there'll only be incremental changes. But even so, 0:08:57.559 --> 0:09:00.959 you said that even that would create a risk to 0:09:01.200 --> 0:09:04.520 tax policies pro sectors like financials and commercial real estate. 0:09:04.559 --> 0:09:07.560 Can you explain that, Yeah, well, to the extent that 0:09:07.600 --> 0:09:11.880 there's overlap between um, what Hillary Clinton would like to 0:09:11.960 --> 0:09:15.240 do in her policy proposals and House Republicans, and we 0:09:15.280 --> 0:09:18.160 think the House is very likely to stay Republican. There 0:09:18.280 --> 0:09:21.680 is some overlap on the tax reform side, particularly on 0:09:21.720 --> 0:09:26.920 the corporate reform side around repatriation, and in particular around 0:09:26.920 --> 0:09:29.760 the idea of using some of that money to fund 0:09:29.840 --> 0:09:33.160 infrastructure spending. So in the devil's really in the details 0:09:33.040 --> 0:09:36.920 as to how you execute that, of course, but just 0:09:37.000 --> 0:09:40.000 from a political standpoint, Um, if there is a path 0:09:40.040 --> 0:09:43.040 of lease resistance for any policy proposal on either side 0:09:43.080 --> 0:09:44.960 at this point, that's probably This is probably the area 0:09:45.000 --> 0:09:48.120 where there's maximum overlap. Michaelm wondering if we could just 0:09:48.200 --> 0:09:50.920 kind of ground ourselves in a little, uh, sort of 0:09:51.000 --> 0:09:54.360 yield so that we understand, you know, what you're actually 0:09:54.400 --> 0:09:57.600 getting as an investor if you're let's say, buying triple 0:09:57.679 --> 0:10:01.600 tax free munis State of California one point nine seven percent, 0:10:02.559 --> 0:10:06.600 New York one point eight oh percent, Florida flaridest different 0:10:06.600 --> 0:10:08.520 one point eight four Just give us a little idea 0:10:08.559 --> 0:10:12.559 of of what the landscape looks like right now. Yeah, Well, 0:10:13.240 --> 0:10:17.960 yields are are obviously near all time lows at this point, uh, 0:10:18.000 --> 0:10:20.720 and that seems to be the story every subsequent year. 0:10:21.720 --> 0:10:26.280 I think that story is sort of divorced from what 0:10:26.480 --> 0:10:28.600 you get out of fixed income as a as a 0:10:28.720 --> 0:10:32.880 sort of mix of your entire asset allocation. And we 0:10:32.880 --> 0:10:36.079 we've been arguing anyway that the macro economic environment is 0:10:36.120 --> 0:10:39.079 such that lower for longer yield, that the yield level 0:10:39.160 --> 0:10:41.840 itself isn't necessarily what you're supposed to be pointing to. 0:10:42.000 --> 0:10:45.800 By the macro economic environment of low inflation and slow 0:10:45.840 --> 0:10:48.679 growth is pretty good for owning fixed income, pretty good 0:10:48.720 --> 0:10:51.760 for owning US dollars and fixed income in particular, and 0:10:51.800 --> 0:10:54.720 because of the tax advantages of munies. Uh, that's still 0:10:54.760 --> 0:10:58.600 a core part of your asset allocation and Uh, not 0:10:58.679 --> 0:11:01.920 just owning short munies, but kind of owning longer duration 0:11:02.000 --> 0:11:05.679 munies paired with short meunis to have a relatively even 0:11:05.800 --> 0:11:09.760 barbell across the curve to take advantage of that macroeconomic environment. 0:11:09.800 --> 0:11:12.200 And so uh, you know how this pertains to the election, 0:11:12.240 --> 0:11:16.480 obviously is to the extent that major tax reform comes in. Um. 0:11:16.679 --> 0:11:19.319 Is there something in the cards that either lowers the 0:11:19.400 --> 0:11:22.120 value of tax exempt income because tax brackets are going 0:11:22.160 --> 0:11:25.160 lower like under Donald Trump's plan? Uh, and from either 0:11:25.240 --> 0:11:28.360 side the idea that they might eliminate or at least 0:11:28.440 --> 0:11:33.000 reduce uh tax exclusions and preference items like the fact 0:11:33.000 --> 0:11:35.720 that you don't have to pay interest on your muni debt. Uh. 0:11:35.840 --> 0:11:38.440 That is implicitly a feature of both plans the way 0:11:38.480 --> 0:11:41.040 we judge it at this point, though, because the divided 0:11:41.280 --> 0:11:44.319 government scenario that we talked about earlier, we argue the 0:11:44.360 --> 0:11:47.839 odds are still against that. Well, given that, but given that, 0:11:47.960 --> 0:11:50.640 it seems like, I mean, I'm trying to imagine what 0:11:50.640 --> 0:11:52.840 you're saying. In other words, Uh, if there is some 0:11:52.920 --> 0:11:56.840 sort of reduced taxes, then it will actually reduce the 0:11:56.920 --> 0:12:02.640 allure of tax exempt bonds because you can get income uh. 0:12:02.679 --> 0:12:06.319 And from other places that won't be taxed as much. Um, 0:12:06.400 --> 0:12:08.959 Is that correct? Yeah, Okay, that's that's the right way 0:12:09.000 --> 0:12:11.520 to think about it. So I think about if you 0:12:11.559 --> 0:12:13.880 want to hopefully I get too specific on it, but 0:12:13.920 --> 0:12:17.600 if you have a thousand dollars of tax exempt income 0:12:17.720 --> 0:12:21.360 right now you're in and you're in the thirty tax bracket, 0:12:22.040 --> 0:12:27.160 you're basically shielded from three d fifty of tax. If 0:12:27.240 --> 0:12:29.320 you if tax rates were to go down and you 0:12:29.360 --> 0:12:32.560 found the percent bracket, you're only shielded from two eighty 0:12:32.600 --> 0:12:35.800 dollars of tax. So the value of that tax shield 0:12:35.840 --> 0:12:39.920 goes down, and therefore the value of the bond on 0:12:40.040 --> 0:12:43.600 one thing, you know, you seem rather unfazed about the 0:12:43.640 --> 0:12:46.160 sort of political season and and the hysteria that some 0:12:46.200 --> 0:12:48.400 people have worked themselves up into. But one thing that 0:12:48.440 --> 0:12:52.400 perhaps is more realistic, certainly for these municipalities, is the 0:12:52.440 --> 0:12:56.080 pension burden. How much do you look at the fact 0:12:56.240 --> 0:12:59.600 that pensions are climbing and the pension deficits are climbing 0:13:00.160 --> 0:13:03.880 as income goes down in this yield, low yield environment. 0:13:04.760 --> 0:13:07.000 I mean, this is a this is a really important 0:13:07.000 --> 0:13:11.280 part of our investment philosophy around Muni's UH state and 0:13:11.320 --> 0:13:14.760 local governments. We think have historically been kind of a 0:13:15.160 --> 0:13:18.800 less cyclical part of the muni market and have become 0:13:19.440 --> 0:13:21.719 since the financial crisis, the more cyclical part of the 0:13:21.800 --> 0:13:25.480 muni market. Uh. In no small way do the pension 0:13:25.520 --> 0:13:29.120 issue that you're talking about. State revenue growth is really 0:13:29.160 --> 0:13:31.880 kind of flat at this point, and the claims on 0:13:31.920 --> 0:13:35.400 those incoming dollars are just getting bigger from the capital side, 0:13:35.440 --> 0:13:39.000 whether it be physical capital with h deferred spending on 0:13:39.120 --> 0:13:43.120 roads and bridges and schools, or the underfunded liabilities that 0:13:43.160 --> 0:13:47.640 you're talking about. And UH, it's a situation where there 0:13:47.640 --> 0:13:52.360 aren't any easy legal um uh fixes to this and 0:13:52.440 --> 0:13:55.800 where you know, over the long term, UH, you're likely 0:13:55.840 --> 0:13:58.439 to hit a crisis point and frankly, the market is 0:13:58.440 --> 0:14:01.720 not really compensating you and most areas to uh to 0:14:01.800 --> 0:14:03.520 deal with this. So we think it's a very easy 0:14:03.600 --> 0:14:08.600 sector uh to underweight and um uh. And we really 0:14:08.600 --> 0:14:12.040 would prefer being in enterprise sectors as a consequence, transportation 0:14:12.160 --> 0:14:16.120 and water, sewer utilities and the like. Hey, Michael, I 0:14:16.200 --> 0:14:18.520 wonder if you could just tell us a question that 0:14:18.559 --> 0:14:22.000 you would like answered from a top economic advisor to 0:14:22.040 --> 0:14:24.360 the Trump campaign, because coming up we're gonna be speaking 0:14:24.360 --> 0:14:27.960 with Anthony Scaramucci, who has been advising the Trump campaign 0:14:28.040 --> 0:14:32.680 on economic policy. Yeah, um, you know that. I'd say 0:14:32.720 --> 0:14:35.800 the question that we get the most from clients on 0:14:35.880 --> 0:14:42.000 the Trump tax policy is how do they how do 0:14:42.080 --> 0:14:47.320 they lower the business tax rates but also eliminate the 0:14:47.320 --> 0:14:50.560 carried interest loophole um. And the reason we get that 0:14:50.640 --> 0:14:53.920 question a lot is because for asset managers, the question 0:14:54.000 --> 0:14:55.640 is are they going to be worse off or better 0:14:55.720 --> 0:14:59.520 off under that? Because obviously they enjoy carried interest, but 0:15:00.240 --> 0:15:03.360 if he's also offering a corporate rate, or they actually 0:15:03.360 --> 0:15:06.480 somehow better off under that scenario, even though he's been 0:15:06.520 --> 0:15:09.600 touting the idea that that eliminating carried interest is a 0:15:10.200 --> 0:15:14.040 is something that would hurt the asset management crowd. Good question, 0:15:14.080 --> 0:15:16.200 all right, thank you. Yeah, because we're gonna be speaking with, 0:15:16.280 --> 0:15:19.840 as I said, Anthony Scaramucci. But he also is, of course, 0:15:19.880 --> 0:15:22.600 the founder of a Skybridge Capital, and he's got a 0:15:22.600 --> 0:15:25.040 new book out called I Think It's What Hopping Over 0:15:25.080 --> 0:15:37.800 the rabbit Hole. Now let's turn our attention to the 0:15:37.800 --> 0:15:41.680 world of politics and money. Our guest is Anthony Scaramucci. 0:15:41.720 --> 0:15:44.560 He is the founder of Skybridge Capital, helping to manage 0:15:44.560 --> 0:15:49.080 more than twelve billion dollars of customer assets. He is 0:15:49.160 --> 0:15:51.520 also the author of his This is his third book. 0:15:51.560 --> 0:15:55.240 It is entitled Hopping Over the rabbit Hole. How Entrepreneurs 0:15:55.280 --> 0:15:59.160 Turn Failure into Success. Anthony, thank you very much for 0:15:59.160 --> 0:16:00.960 coming in and spending time with him. It's a pleasure 0:16:00.960 --> 0:16:03.400 to be here. Thank you. Let's begin by talking just 0:16:03.440 --> 0:16:06.800 a second about hopping over the rabbit hole. Do you 0:16:06.840 --> 0:16:09.200 feel like you kind of hopped over the rabbit hole 0:16:09.320 --> 0:16:13.040 during the selection season and the New kind together. I 0:16:13.440 --> 0:16:16.400 can't speak for the election until after it's over. If 0:16:16.880 --> 0:16:18.520 if the outcome comes out the way I think it's 0:16:18.520 --> 0:16:20.880 going to come out, then I've hopped over it. But 0:16:20.960 --> 0:16:23.120 I think all of us, in some ways, and the 0:16:23.160 --> 0:16:26.520 American electorate in general, has fallen into the rabbit hole 0:16:26.520 --> 0:16:28.360 a little bit because at the end of the day, 0:16:28.840 --> 0:16:33.480 our politics is becoming too personal, it's becoming too emotionally 0:16:33.560 --> 0:16:36.360 charged in an ad hominum way, and we've got to 0:16:36.400 --> 0:16:38.800 discuss the policies and the issues a way more than 0:16:38.840 --> 0:16:40.600 we're currently doing, and that's going to be way more 0:16:40.600 --> 0:16:44.000 beneficial to the American people. So, um, just to stick 0:16:44.040 --> 0:16:45.640 with your book for for one second, what's been your 0:16:45.640 --> 0:16:48.680 biggest failure? Well, I got so many of them. I 0:16:48.680 --> 0:16:51.440 I think, Adam of the biggest failure was my near 0:16:51.520 --> 0:16:54.120 death experience with Skybridge, which is the whole genesis of 0:16:54.160 --> 0:16:56.240 the book. We went from a four d and fifty 0:16:56.280 --> 0:16:59.680 million dollars of assets under management to two hundred million, 0:17:00.400 --> 0:17:02.200 and we were on our way out of business, and 0:17:02.240 --> 0:17:05.520 so we had to literally adapt and pivot and redesign 0:17:05.600 --> 0:17:08.879 the business. And frankly, if I wasn't successful or we 0:17:08.880 --> 0:17:12.920 weren't successful in buying City Banks alternative investment management company, 0:17:13.240 --> 0:17:15.679 I'm not sure if Skybridge could have survived. So that 0:17:15.680 --> 0:17:18.640 would be failure big time. Number one. I did fail 0:17:18.680 --> 0:17:20.959 the bar exam twice. I know my mom is listening, 0:17:20.960 --> 0:17:23.560 so I took it the third time to eventually pass 0:17:23.600 --> 0:17:25.639 it here in New York State. That was due to 0:17:25.680 --> 0:17:28.679 intellectual arrogance. I wasn't studying enough for the exam. As 0:17:28.720 --> 0:17:33.080 a younger man, I got fired from Goldman Sachs h 0:17:33.240 --> 0:17:35.600 We could blame it on structural layoffs, but the truth 0:17:35.640 --> 0:17:37.240 of the matter is I stunk at the job of 0:17:37.280 --> 0:17:40.240 being an investment banker. Um. So those are a few 0:17:40.359 --> 0:17:43.080 big failures, but I've got a ton more. Well, you know, 0:17:43.119 --> 0:17:45.880 I just want to quickly ask, how does it affect 0:17:45.920 --> 0:17:50.439 you to hear when people like Jamie Diamond or Warren 0:17:50.480 --> 0:17:56.720 Buffett come out against Donald Trump, including his economic plans. Listen. 0:17:56.760 --> 0:17:58.800 I mean, these guys look at an enormous amount of 0:17:58.840 --> 0:18:01.520 respect for them in business, but I think they're missing 0:18:01.600 --> 0:18:04.439 something about what's going on in the American public right now. 0:18:04.480 --> 0:18:06.960 And so what has happened, And we have to all 0:18:07.000 --> 0:18:09.480 be very careful of this because of where we live 0:18:09.520 --> 0:18:12.080 and who we interact with. We've gotta it's a very 0:18:12.200 --> 0:18:15.120 dangerous circle of elitism. We've got to be super careful 0:18:15.160 --> 0:18:19.000 because the working class that used to be an aspirational 0:18:19.080 --> 0:18:22.119 working class is now becoming the working poor, and the 0:18:22.119 --> 0:18:24.919 middle class is shrinking while the rest of us are 0:18:24.920 --> 0:18:27.680 sitting in salons talking to each other about how great 0:18:27.720 --> 0:18:30.240 everything is. And so I think that's a real big fallacy. 0:18:30.280 --> 0:18:32.600 And you can see that in the Bernie Sanders supporters, 0:18:32.960 --> 0:18:35.400 and you can see that in the Donald J. Trump supporters. 0:18:35.440 --> 0:18:37.600 And so I love Jamie Diamond. I have an enormous 0:18:37.600 --> 0:18:41.400 amount of respect for him. Uh, The big corporate CEOs 0:18:41.560 --> 0:18:44.320 like the status quo. They like to predictability of that. 0:18:44.720 --> 0:18:46.840 But if we're not careful in our society and we 0:18:46.880 --> 0:18:49.040 don't figure out a way to solve the problems for 0:18:49.080 --> 0:18:52.040 the working poor and for the middle class, you're gonna 0:18:52.040 --> 0:18:54.880 see a massive disruption in the society. This is a 0:18:54.920 --> 0:18:58.159 minor tremor what's gone on in the two thousand and 0:18:58.160 --> 0:19:01.440 sixteen election. The biggest risk, and Frank, I'll speak very candidly, 0:19:01.480 --> 0:19:03.600 you don't mind being a little bit political here, is 0:19:03.600 --> 0:19:07.680 that you end up with a charismatic, good looking socialist 0:19:08.160 --> 0:19:12.600 that comes in and totally subverts and disrupts the American society. 0:19:12.640 --> 0:19:17.360 And so for me, I think that I respect Warren Buffett, 0:19:17.400 --> 0:19:20.199 I respect Jamie Diamond. They also have boards that they 0:19:20.240 --> 0:19:23.080 represent and their publicly traded companies, and I understand where 0:19:23.119 --> 0:19:25.720 they're coming from. But I do think that neither of 0:19:25.720 --> 0:19:27.960 them have been to with Donald Trump rally, and my 0:19:28.080 --> 0:19:30.280 guess is neither of them have been to a Bernie 0:19:30.320 --> 0:19:32.879 Sanders rally. And if you go there, you can feel 0:19:32.880 --> 0:19:35.280 the quiet desperation that's in the United States that we 0:19:35.320 --> 0:19:38.560 have to fix. I want to turn your attention to investments, 0:19:38.640 --> 0:19:40.359 because it's not often that I get to talk to 0:19:40.400 --> 0:19:43.199 you about where the money really is going, and you've 0:19:43.200 --> 0:19:45.880 got to follow the money. Someone comes to you, let's 0:19:45.880 --> 0:19:47.600 say they want to open a new account, maybe they 0:19:47.680 --> 0:19:50.520 got attended. They tell you that they have a tenure 0:19:50.600 --> 0:19:54.439 horizon and the uh, they don't want run of the 0:19:54.440 --> 0:19:56.800 mill plane vanilla, because I can get that anywhere else. 0:19:57.560 --> 0:20:01.120 Tell tell people a little bit about strategy and about 0:20:01.160 --> 0:20:03.479 where you'd be looking right now. Well, the number one 0:20:03.520 --> 0:20:05.280 thing that we have to do in our business is 0:20:05.680 --> 0:20:09.080 mental conditioning, because everybody is a long term investor until 0:20:09.080 --> 0:20:11.560 they have short term losses, and that's typically what happens. 0:20:11.600 --> 0:20:14.040 So the losses come in short term, they set their 0:20:14.040 --> 0:20:16.560 hair on fire and they want to change their strategy. 0:20:16.600 --> 0:20:19.280 And so what I tell people about Skybridge, You should 0:20:19.280 --> 0:20:23.000 have a stock and bond portfolio pretty much plain vanilla, 0:20:23.400 --> 0:20:26.640 but five to fifteen cents of your portfolio should be 0:20:26.720 --> 0:20:29.880 in products like what we offer. Now, what is that 0:20:30.280 --> 0:20:33.119 we have a hedge fund business where we're actually taking 0:20:33.160 --> 0:20:35.600 your money and we're allocating it to a group of 0:20:35.600 --> 0:20:38.480 hedge funds and our portfolio now it's about thirty funds. 0:20:38.920 --> 0:20:42.480 The funds are designed to give you a non correlated 0:20:42.840 --> 0:20:47.000 absolute return over a market cycle. That is above bonds, 0:20:47.480 --> 0:20:48.800 and so I don't even know if I'm allowed to 0:20:48.800 --> 0:20:50.720 talk about my performance or not, so I won't, but 0:20:50.840 --> 0:20:53.040 somebody can go look it up. The performance has been 0:20:53.160 --> 0:20:55.320 very good, and the reason it has been very good 0:20:55.400 --> 0:20:58.960 is that we're we're we're targeting a certain lower risk 0:20:59.359 --> 0:21:02.800 targeted to return, and so I tell people you're trying 0:21:02.840 --> 0:21:04.760 to reach an actually our real goal. The market is 0:21:04.760 --> 0:21:08.000 going to become more volatile as the feed is normalizing rates. 0:21:08.400 --> 0:21:11.320 Passive indexes which have worked and so have e t s, 0:21:11.560 --> 0:21:14.680 they may not necessarily work with the same success over 0:21:14.720 --> 0:21:17.600 the next five years. So diversify a little bit into 0:21:17.640 --> 0:21:20.359 products like ours. Real quick to Donald Trump, give you 0:21:20.400 --> 0:21:22.479 autonomy to come up with your own economic plans as 0:21:22.520 --> 0:21:25.000 you weigh in. There's no question he weighs in. I mean, 0:21:25.240 --> 0:21:27.399 you see, this is the thing that I think that 0:21:27.520 --> 0:21:30.879 has been distorted through the media prism and probably also 0:21:31.119 --> 0:21:34.560 from his stump campaigning. He is a very thoughtful, very 0:21:34.600 --> 0:21:37.640 methodical guy. He is a doer with a big long 0:21:37.720 --> 0:21:42.480 list on a on a yellow pit. Anthony Scaramucci, thank 0:21:42.480 --> 0:21:44.880 you so much for being with us. Anthony Scaramuchie, founder 0:21:44.880 --> 0:21:48.080 of Skybridge Capital and author of his third book Hopping 0:21:48.200 --> 0:21:50.560 over the rabbit Hole. Thanks for being with us. This 0:21:51.040 --> 0:22:04.240 is Bluebird and to learn more about Apple, we have 0:22:04.320 --> 0:22:07.560 brought in none other than the expert Shira O Vida 0:22:07.880 --> 0:22:11.840 columnists covering technology a Bloomberg gad fly, which just means 0:22:11.880 --> 0:22:14.320 that fast commentary section. Boy, you know, it's great to 0:22:14.359 --> 0:22:16.119 have you here. My pleasure, Thank you, and I just 0:22:16.200 --> 0:22:20.280 want to point out that you're followable on Twitter at 0:22:20.560 --> 0:22:25.120 Shira O v Day. Yes O v I D Thank you. 0:22:25.560 --> 0:22:29.439 Um Apple, you got this column out fast. What's been 0:22:29.480 --> 0:22:34.440 going on? You're fast? Oh no no. But the reason 0:22:34.480 --> 0:22:37.600 I say that is is because you got it out fast. 0:22:37.640 --> 0:22:40.639 But you make a long term point in the piece, 0:22:40.720 --> 0:22:43.800 maybe just to describe that, expand on that. So it's 0:22:43.840 --> 0:22:47.120 really two points. The basic message is, look, the party's 0:22:47.160 --> 0:22:49.480