May 2, 2025 • 26 mins
Matt and Katie talk about what Tesla is, splitting the roles of CEO and Technoking, the Musk attention auction, the benefits of not paying attention to X debt prices, and why everyone likes private assets.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News. Hello and welcome to
The Money Stuff Podcast, your weekly podcast where we talk
about stuff related to money. I'm Matt Levine, and I
write the Money Stuff column for Bloomberg Opinion.
Speaker 2 (00:20):
And I'm Katie Greifeld, a reporter for Bloomberg News and
an anchor for Bloomberg Television. Elon Musk, when was the
last time we talked about this man?
Speaker 1 (00:30):
More than a week ago? Yes, I think I'm probably lying.
Speaker 2 (00:33):
It's been a minute. It's been a minute. Let's talk
about him. We've talked about the Elon Musk premium before
that's been built into the stock of Tesla. I've asked
the question, I mean, does Tesla still need Elon Musk?
It sounds like the board was, according to the Wall
(00:53):
Street Journal, was also asking that question.
Speaker 1 (00:56):
There's two very distinct questions, which are like, does Tesla
the car company benefit from having Elon Musk a CEO?
There's the question of like does Tesla the multi hundred
billion dollar stock benefits from having Elon Musk a CEO?
I think those questions have very different answers, right, Like,
I think that if you were like, hey, here's this company,
(01:17):
that's selling cars, and it's CEO is in the business
of like making the people who buy its cars hate
him and also not paying any attention to the company
because he's doing ten different other things. You might be like, hey,
let's get a new CEO. But like, then, if you
like the stock and you think about what would happen
to the stock if Elon Musk wasn't the CEO, I
think it would go down.
Speaker 2 (01:36):
Yeah, it's funny because if we were talking about a
normal company with a very distracted CEO, of course you
would expect that the board would be, you know, engaging
firms to help look for a new CEO. Tesla obviously
is not a normal company, and this is a special situation.
Speaker 1 (01:53):
Right, And I should say that Tesla has denied reports
that it's looking for a new CEO. Right. The Also
Journal reported that some members of the board had reached
out to executive search forms. So you can sort of
square that circle by saying, yeah, some board members are
curious about the possibility of a new CEO, but there's
not a formal process by the board to engage a
search farm. Right, It's like somewhere in between. But right,
(02:13):
even though it's not a normal company, you would think
that the board, when faced with this extremely distracted CEO,
would look into a new CEO, even if they don't
want a new CEO, just to be like, hey, buddy,
could you spend a little more time with Tesla? Like,
I think that it's very clear that the board would
like him to spend more time with Tesla, and the
(02:36):
shareholders would like to spend more time with Tesla, and
probably the customers and many voters in the United States
would all like them to spend more time with Tesla.
So as a way to put pressure on him to
spend more time with Tesla, like, does this work? Maybe?
Speaker 2 (02:50):
I mean, we know that investors want him to spend
more time with Tesla because after the earnings call in
which he said I'm going to spend more time with Tesla,
significantly more time starting in May, the stock popped. Yeah,
so the reaction was clear. But I don't know, you
think about the timing of this Wall Street Journal report
when they were asking this question and potentially, you know,
(03:10):
talking with firms about initiating a search. It seems like
that happened before that Erness call where Elon Musk said that, So, yeah, I.
Speaker 1 (03:19):
Mean there's been conversations with him about spending more time
with Tesla. Yeah, I think he's like, this is not
an all or nothing decision, right. The model is kind
of Twitter, where Elon Musk bought Twitter. He installed himself
as the CEO for a minute, and then eventually, after
a flurry of activity, appointed Lindy Akarina as the CEO.
(03:39):
Now everyone kind of assumed that he was calling the
shots at X even though she was the CEO. But like,
you unload some of the responsibilities onto the CEO who
like runs the thing day to day, and then you're
like the visionary kibbitzer and like, you know, I wrote
this week that's not like already has that model where
Elon Musk's title at Tesla embarrassingly or technically techno King
(04:04):
and CEO he's the techno King.
Speaker 2 (04:06):
Didn't realize that.
Speaker 1 (04:07):
Oh yeah, it's happened a while. He's happened in like
twenty twenty one and he was named the Techno King
and the CFI was named the Master of Coin.
Speaker 2 (04:15):
Now it's coming back to me.
Speaker 1 (04:17):
Everyone blocks it out because it's really embarrassing, but it's
still you know, you still look at the filings it's
a techno king. Wow, And so you could split those rules.
He was once the chairman of the board as well
as the CEO, as many powerful CEOs are, and then
he had to stop being the chairman of the board
because he got in trouble with the SEC. But he's
now the techno king and CEO. So you can split
those roles too and leave him as the techno king,
(04:39):
make someone else the CEO. And like I think in
that split, like the CEO runs the car company and
the techno king is the guy who's like, we're gonna
build human eyed robots.
Speaker 2 (04:48):
We're doing the AI stuff, doing the AI stuff. Yeah.
Another suggestion that I've seen in terms of how you know,
the structure could work at Tesla. I forget who exactly
suggested this, but someone from the cell side, so that
maybe he could become chairman again and just be chairman.
Speaker 1 (05:04):
Yeah, But like in the traditional division of public company responsibility,
as the chairman who is in charge of the board
as a fiducia responsibility and overseas management is not quite
what he wants, and the CEO who runs the company
as a full time job is not quite what I
think techner king is a good description of what he
wants to be, which is he wants that absolute power,
(05:26):
be like focused on tech stuff and not have the
sort of full time day to day responsibilities of either
a CEO or a chairman.
Speaker 2 (05:34):
That's true. I will say it kind of reminds me
of micro Strategy to an extent, because Michael Saylor founded
micro Strategy, who is the CEO for a long long time.
He stepped down from being CEO and now I believe
he's just chairman.
Speaker 1 (05:47):
So that's a common thing. But I do think that
I do think that micro Strategy and Tesla are sort
of at opposite ends of like business complexity, like Mega
Strategy in the business of buying bitcoin and putting them
in a pub.
Speaker 2 (06:04):
Hear me out they actually have thousands of employees, because.
Speaker 1 (06:08):
That's not all I understand.
Speaker 2 (06:10):
That they're somewhat similar in that, Okay, Tesla is a
car company that also has this like AI stuff happening
with it. Micro Strategy is nominally a software company. Couldn't
tell you more than that, but then they have this
whole other thing on top of it, which is just
buying bitcoin and bitcoin. I think that micro Strategy is
known for the thing on top of it, whereas Tesla
is still known for primarily being a car company.
Speaker 1 (06:31):
Yeah. See, that's where I'm not sure. Like, like I
think that a lot of people would say that the
thing that Tesla does day to day is a car company.
It makes cars and sells cars, but the thing that
it is known for is being an MS company, and
particularly the thing that like drives its stock market evaluation
is not the current cash list from cars, but like
(06:52):
the future projections of We're going to build humanoid robots
and like be like the world's leading robotics and a company,
and like be like pioneers and some driving cars and
like all this stuff that Elon mus promises, and like
the journal story about the board looking Elsewhere also mentioned
some texts that Musk sent to someone close to him
(07:12):
saying that he no longer wanted to be CEO of Tesla,
but he was worried that no one could replace him
atop the company and sell the vision that Tesla isn't
just an automaker, but the future of robotics and automation
as well. I think that's right, right, Like, if you
got like a car person in to run it as
a car company, it's much harder to sell that vision.
The problem is not just that Elon Musk is a
good salesman for that vision, and if you put someone
(07:33):
else in charge, you wouldn't have that good salesmanship. There's
also the problem that, like Elon Musk does a lot
of stuff, and if someone else was running Tesla, then
when he wakes up in the morning and has an
idea for robotics stuff, he is more likely to do
it somewhere else. Right, he owns like six companies, He
can always start more companies. If he wants to do
the future of robotics somewhere else, he kind of just can.
(07:55):
Leaving him as the CEO of Tesla ties him a
little bit more closely to Tesla and makes and more
likely to do futuristic stuff within Tesla as opposed to
at SpaceX of the boring company or in a new
company or XII or XAI. And if there were just
like a coup, if the board was like, we're sick
of you, you're fired, We're getting a new CEO, that
(08:17):
would be really bad for Tesla. You know, he has
like a million things that he's doing, he'd do all
of them elsewhere. Is he sort of threatened to do
if he didn't get paid enough from Tesla. Right, Like,
one aspect of this is like, you know, we've talked
a lot about Delaware courts clying back. His compensation still
kind of being litigated, and you know he sort of said,
you know that if I had an extra fifty billion
dollars a Tesla stuck, I'd be more motivated to do
(08:39):
stuff within Tesla. But if he gets fired, less motivated,
you quin.
Speaker 2 (08:43):
To phreeze for this. What was it? Was it like
the Elon attention auction?
Speaker 1 (08:47):
Yeah? Right, Like if you are an investor or a
director at one of Elon's companies, the more of his
attention you get, the more valuable the company is, right,
And like you see that particularly with Tesla now or
like they get less of his attention, thought goes down
a lot, and like partly because they want more of
his attention and partly because when he directs his attention elsewhere,
it's like bad for pr But how do you get
(09:11):
that attention? The normal way is to give him stuff
like a big pay package, but some amount of threatening
it's also possibility. I know that it's threatening exactly, but
you had as a board have some amount of independence
and maturity where you can say to the CEO, Hey,
it would be nice if you shut up to work.
Speaker 2 (09:32):
Yeah, maybe swipe your badge now, and then should we
talk about some debt?
Speaker 1 (09:53):
Yeah about x X.
Speaker 2 (09:58):
Finally sold.
Speaker 1 (09:59):
Yeah. Like a lot of people probably including me, in
like twenty twenty three, like this is like one of
the worst leverage biots ever. In like early twenty twenty three,
you look at this and you're like, okay, Like Elon
Musk overpaid for a company. Twitter was not a traditional
leverage biot company because it didn't have great cash flow.
It wasn't like a you know, money spinner. It was
(10:20):
a you know, social media company that didn't make a
lot of money. And so Elon mus decided to buy
it and the leveraged buyout and he got thirteen billion
dollars over of the DIT, which is a lot of
debt for Twitter. And then after he gret to buy it,
everyone agreed, including him, that he was overpaying for it,
and he tried to get out of it by saying
Twitter is a big fraud. And by the time the
deal closed, it looked like a very unpleasant deal to
(10:42):
finance and the banks that finance that couldn't sell or
didn't selve the dietage presumaly because there's not much market
for it. And I don't think they ever marked it
down formally, but like the equity investors marked down their
equity a lot, and there were you know, news stories
saying that, like the banks were getting offers like fifty
cents on the dollar, so it looks like they'd lost
billions of dollars underwriting the Twitter deal and three years later,
(11:05):
two years later, they've sold held the data like you
know around bar Like the most reason slug was like
ninety eighth on's on the dollar. They got paid big
interest payments over that time period because like there was
you know, expensive debts, So they've made an accounting profit
on the deal. I made an economic profit on the deal,
and they also like coz it up with Elon Musk
and now probably get financing work for Xai, which is
(11:26):
a giant company.
Speaker 2 (11:27):
I love it because if you just held onto this
debt and kind of ignored it for three years, you
made out fine, but it came with a lot of
emotional turmoil.
Speaker 1 (11:36):
It's something I think about a lot, right, like the
you know, the pitch for private markets is you don't
have so much emotional turmoil, right, And the individuals who
like underwrote the X debt, they did a great decision
for their banks. They made a lot of money, but
like some of them got fired in the interim because
it looked like a terrible decision. And the journal story
about that selling the last slug of the ex debt
(11:58):
says the lega the hung debt might have longer term implications.
X and other hung loans prompted pay cuts and an
exodus of bankers. They also forced some banks to pull
back on lending, which gave room for competitors and the
booming private credit space to muscle it. So it's like,
did Elon Musk invent private credit?
Speaker 2 (12:15):
Not really, but like kind of like perhaps you did.
Speaker 1 (12:18):
Will the story of private credit be like yeah, and
then Elon Musk hung a debt deal and so everyone
had to you know, the banks had to stop lending,
and so private credit got to get into the game.
Because it's true, like there was a big uptick in
private credit because banks did pull back because there's a
string of hung loans. Yeah, and this was the big one.
Speaker 2 (12:36):
I kind of traced a lot of the boom that
we saw in private credit to the collapse of Silicon
Valley Bank, but MOBE the whole time it was just xtet,
you know, in like the.
Speaker 1 (12:44):
LBO space, like the banks that did LBO lending, you
have like a small balance sheet for LBO lending, and
you have to turn it over a lot by selling
all your loans. And if you stick thirteen billion dollars
of loans on your LBO balance sheet, you can't do
any more loans, and so you know, you have to
let private credit do it.
Speaker 2 (12:59):
Yeah, So you wrote that perhaps Elon Musk created private credit,
and perhaps he did. But when I read that, my
initial thought was to think about the psyche. You know
what we're talking about the private markets. Investing in private markets,
it's supposed to take out the emotional turmoil. Because I
was thinking about the past month and the equity markets,
and the S and P five hundred in April actually
amazingly was only down about seven eight tenths of a percent,
(13:22):
which is nothing. That's like the smallest move on a
monthly basis that we've seen a long time. But that
came with so much handwringing. It came with so much
volatility that you could watch second to second that you
asked someone how they felt at the end of April,
they would probably say that was crazy. But that mentality
of you know, if you just close your eyes for
three years, you made out great on this XTT. You
(13:43):
didn't have to think about it. But obviously it wasn't
actually private credit, so those banks probably thought about it
a lot.
Speaker 1 (13:49):
One selling point of private assets is that they have
lower volatility, and if you think about that for a second,
it can't really be true. But what is true is
that you don't mark them to market its frequently, and
so you can't know how volatile they are, unlike a
sort of like theoretical value. And so it is true
that because you don't mark them to market it is frequently,
you don't have to be as emotionally upset about them.
(14:11):
And so friend of the Pod Cliff as This has
written about this that like there is an actual value
from having private assets because if you are if you're
a human who might be prone to panic and sell
when things are low, or if you're like an institutional
allocator who has like some rule where you know, if
you have a big draw down you have to sell,
or something like that, you know like some of the
(14:32):
institutional structures of investing can like replicate irrational panic reader,
email me about this, Like to the extent that the
public markets are dominated by like multi strategy hedge funds,
who's like one of their salient features is that if
you have a ten percent drat on, you're fired. Like
that like creates potential bad incentives where you have months
(14:53):
like this where you have five percent drite out every
other day but nothing happens, right, Like you could have
like selling it the worst times because you are exposed
to volatility that you can see, whereas if you had
assets that you can't see the volatility of, you can
just like, yeah, that's great. And if like the volatility
is mostly you know, washed out, then yeah, that works
out better for you in the long run.
Speaker 2 (15:14):
I wonder how you quantify human emotion, though.
Speaker 1 (15:17):
Intuitively, one way you quantify it is that you think, well,
in the long run, private assets and public assets should
have like the same returns arguably, and if like ninety
percent of the volatility in public markets washes out, then
like that was all emotional volatility rather than real volatility.
That's really not quite right. But like, yeah, this is
(15:39):
the first.
Speaker 2 (15:39):
Cat like can design a factor around that and then
somehow launching EUTF.
Speaker 1 (15:46):
Let's see, there's also a Bloomberg report that XAI isn't
talks to raise twenty billion dollars of equity, which would
be like the second biggest startup fundraise.
Speaker 2 (15:56):
Ever, second only to Open Eye.
Speaker 1 (16:01):
One of the uses of proceeds might be to pay
down the debt. It's a little unclear how much money
Twitter is making. I mean x like the ex portion
of XII the social media company. But it's not like
a great business style, and businesses are still like pretty speculative,
hugely capital and tons of businesses, So you don't really
want to spend a billion dollars a year on debt
(16:21):
service if you're a company like that. And so it
looks like they can get rid of the debt by
raising twenty billion dollars of equity. Not only did this
that all get sold, but also it might get like
paid back at par early, and like I think that,
Like the message is that it's fairly expensive to raise
debt for a social media company and like incredibly cheap
(16:44):
to raise equity for a AI company, right, Like you
can raise billions of dollars of equity at one hundred
billion dollar valuations if you're a cool AI company, and so, like,
you know, they're correcting the capital structure. Speaking of the
(17:13):
appeal of private markets, go.
Speaker 2 (17:15):
On Group and KKR.
Speaker 1 (17:18):
Well everyone, I mean right, so there there's a story
this speak about Capital Group and KKR teaming up to
launch mixed public private debt funds, which is like a
fund that's like sixty percent public bonds and loans and
forty percent drag lending and other private credit stuff. So
it's a public private credit fund. And you know, Capital
(17:40):
is a big mutual fund manager that I believe sells
through financial advisors, and so like you know, if you
have a financial advisor, they might be like, oh, you
should put your money in this Capital mutual fund. And
now the financial advisor can say, oh, you should put
your money in this Capital slash KKR public private fund,
and yeah, that's like the way of the near future.
(18:01):
I think. Bloomberg reported yesterday that State Street and Carlisle
are in similar.
Speaker 2 (18:06):
Talks, which is interesting because State Street, you know, has
this partnership with Apollo as well.
Speaker 1 (18:11):
Yeah, but like the private managers are kind of they're
providing paper and then like these big asset managers are yeah,
we'll sell lots of that paper. I think I agree
that it's a little weird because they are like partnerships
rather than like, yeah, pure like issuers. But yeah, Capital
and KKR, State Street and everybody.
Speaker 2 (18:27):
That's just this week you also had Blackstone, Vanguard and
Wellington team up and some jv to launch these sort
of products.
Speaker 1 (18:36):
And the other thing that there is is Morgan Stanley
this week in Goldman a couple of weeks ago, launched
private wealth thingies where it's like their own alts businesses,
their own private credit businesses or private aquity businesses. I'm
going to sell some paper to like they're not like
pure retail, but like they're you know, High night Worth
retail ish private health clients. And so there's a lot
(18:58):
of emphasis everywhere in private credit and private equity managers. Yeah,
to sell to individuals, right, because like historically this has
been a business where they raise money from institutional allocators
and now they're like so big that they need to
tap trillions of dollars of individual wealth. And so there's
(19:18):
just a lot of talk about like putting private credit
and private equity into for one ks, and like target
date funds and ETFs and retail financial advisors and so
this is like the big push.
Speaker 2 (19:30):
So when you and I were discussing what to talk
about today, I call this sort of like the evergreen
story because we're talking about Capitol Group and KKR this
tie up. But it just feels like we're going to
see more of these And you talk about that push
because they want to open up and raise trillions of
dollars from retail investors. I mean, it just seems that
this is like the inevitable march forward. We could talk
about this story every single week.
Speaker 1 (19:50):
Yeah, oh we will. And it's interesting, you know, you say,
like March forward. Like my like cynical take on this
is that people solve the problem of investors, right, Like
it's a dispariting solution, right, But it's like you buy
all the companies and like black Rock or Vanguard will
do that for you because it's a useful service for
them to provide and they will charge you three basis points. Right,
(20:13):
buy all the companies and then you own the market
and no one's going to beat the market for you.
And getting the market return with lofis is the right
way to do it. And like there's lots of reasons subjective,
but it's like it kind of is a first cut,
like the solution, and a lot of people believe that
for plausible reasons. And so like a lot of people,
you know, put their money in intoex ETFs. And if
you are Wellington or Capital and you're in the business
(20:37):
of long only public equity management, you've had a good
fifty one hundred year run. But like that business is
really hard right now. It's really hard to sell an
actively managed mutual fund through financial advisors because people are, yeah,
there's self tright to you know, account buy s and
p five hundred etf right and pay three basis points.
Speaker 2 (20:55):
Instead of several dozens.
Speaker 1 (20:57):
You know, you used to pay like two percent for
a mutual fund for like that those days are long
dat and so how do you address that? The universal
answer is private markets? Yeah, and like what does that mean?
What it means? It's like you see like kind of
medium sized companies, youngish medium sized companies would go public
and now like companies stay private longer and grow bigger
(21:17):
in private markets, and and like why is that? Like
there are a lot of good reasons for it, right,
There's a lot of capital in private markets, it's much less.
It's mcual. We're convenient to be private than to have
to deal with earnings calls and SEC report and share
their lawsuits and.
Speaker 2 (21:32):
All the boring staff.
Speaker 1 (21:34):
Like short sell. There's a lot of stuff that companies
don't like about being public. But I also do think
that like if you're like, yeah, if you're like a
big private company, you go talk to like investors or
banks and you're like, hey, should I go public? They're like, no,
stay private, and like why well, this, like the financially
intermediates makes so much more money in private markets than
in public markets. In some ways, it feels like a
(21:56):
step backward in progress, right, Like, in some ways it
feels like what's happening here is that public markets are
so cheap and efficient for some definition of efficient that
it is kind of no fun to be an investor
in the public markets. And so all these investment firms
are like, how do we get more stuff that isn't
just like ruthlessly indexed and charges three asis plants, and
(22:19):
like the answers like more private stuff.
Speaker 2 (22:21):
Yeah, I'm trying to just said what is the chicken
and what is the egg? Because like there's two things happening.
Speaker 1 (22:26):
I mean, you're all self reinforcing. Just one thing started.
Speaker 2 (22:29):
But yeah, what do you call when the snake is
eating itself.
Speaker 1 (22:31):
Robbers roborusus roboris. Yeah, that sounds good.
Speaker 2 (22:36):
Well, what I'm trying to say, you have you know,
the capitol groups and the Wellingtons of the world. They
want to tap into retail investors because we've solved the
problem of investing and here's a new thing you can do.
And then here's the other force, is that you have
all these cool, interesting companies that are small that are
staying private for longer, partly because the funding is there.
You mentioned all the annoying things, but there's also like
(22:58):
there's ways to access funding. You don't need to go
public anymore. And I guess that's the snake.
Speaker 1 (23:03):
Oh yeah, absolutely. And also the other thing is there
is retail demand for this, like yeah, it's not just
like the issues like it and the intermediaries like the
retail coastors. Yeah, I get to own cool private companies, right. Yeah.
There is this perception based in fact that the highest
growing companies are in the private.
Speaker 2 (23:20):
Markets Stripe, SpaceX. Yeah.
Speaker 1 (23:22):
And then also on the credit side, because a company
what you're getting in private credit is like a certain
amount of like flexibility and structuring and a certain amount
of certainty, and you're paying for that with higher interest rates.
And so if you're a retail client and you're like,
I can have a bond fund, or I can have
a private credit fund that pays ANXT one hundred and
fifty basis plant, it's like, why not do the private credit.
So there's some reality to the idea that private markets
(23:43):
have higher returns, and so you should invest in private markets.
Speaker 2 (23:45):
God, I had something to say and it just flirted away,
it went private. Yeah, I can't access it.
Speaker 1 (23:51):
Did I tell you that at Disney World I saw
a snake?
Speaker 2 (23:53):
We haven't talked at all about your trip to Disney World? Yeah,
how was it?
Speaker 1 (23:57):
Oh?
Speaker 2 (23:57):
I remember what I wanted to say? Should I say it?
Speaker 1 (23:59):
Yeah?
Speaker 2 (24:00):
A mailbag question we got about adverse selection. Yeah, this
was in relation to private credit euts. But you know,
the cynical suspicion that the private manager was just going
to dump all their not so great stuff into these
retail funds.
Speaker 1 (24:14):
Yeah, there's always like some hierarchy of like if you
are a private investment manager running a bunch of different
things like you'll have a natural inclination to allocate the
very best things to your personal account, the next best
things to the accounts of the important clients to pay
you the highest fees, and like the worst things you know,
to the retail clients to pay your eighty basis funds. Right,
(24:35):
But there are a lot of like things to counteract
that tendency, like regulation and like you know, the conflict
committees of these firms, and like, you know, a lot
of the stuff is like sort of vertical slices of everything.
So it's like, I wouldn't you know, like you can't
really have this business where like you take the best
loans and you put them in your private credit fund,
and you take the worst loans and you stuff them
(24:56):
into the public private fund for retail. And also the
partnerships guard against that a little bit, where like the
straight streets and capitals of the world have incentives to
negotiate to get the good loans rather than just the
bad ones.
Speaker 2 (25:07):
Yeah, they're doing due diligence and the like, But I
don't know.
Speaker 1 (25:10):
I mean, if you're like a private credit manager, like
your job is to like make good loans and then
like you fund them with like a sort of undifferentiated
pool of like the money that you get from, you know,
wherever you get it from.
Speaker 2 (25:23):
Cool, So maybe we shouldn't worry.
Speaker 1 (25:25):
It's not highest on my list of worries. Are we
gonna like talk about an sec in force for nationalting
at someone who, like, you know, adversely selected their retail
fun maybe one day.
Speaker 2 (25:34):
Six or twelve months perhaps the sort of thing.
Speaker 1 (25:36):
We're not we're talking about it not in sixty twelve,
three and a.
Speaker 2 (25:40):
Half years, three and a half years, you know, when
we're on episode whatever, Yeah, we're.
Speaker 1 (25:46):
Sorry, we're not talking. Sorry, And that was The Money
Stuff Podcast.
Speaker 2 (25:53):
I'm Matt Levi and I'm Katie Gal.
Speaker 1 (25:56):
You can find my work by subscribing to The Money
Stuff newsletter on Bloomberg dot.
Speaker 2 (25:59):
Com, and you can find me on Bloomberg TV every
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Speaker 1 (26:19):
The Money Stuff Podcast is produced by Ana ma Aserakus
and Moses onm Our.
Speaker 2 (26:23):
Theme music was composed by Blake Naples.
Speaker 1 (26:25):
Brandon, Francis Nudim, It's our Executive producer.
Speaker 2 (26:27):
And Stage Bauman is Bloomberg's Head of Podcasts.
Speaker 1 (26:30):
Special thanks this week to Dash Bennett. Thanks for listening
to the Money Stuff Podcast. We'll be back next week
with more stuff
Bloomberg Audio Studios, Podcasts, Radio News. Hello and welcome to
The Money Stuff Podcast, your weekly podcast where we talk
about stuff related to money. I'm Matt Levine, and I
write the Money Stuff column for Bloomberg Opinion.
Speaker 2 (00:20):
And I'm Katie Greifeld, a reporter for Bloomberg News and
an anchor for Bloomberg Television. Elon Musk, when was the
last time we talked about this man?
Speaker 1 (00:30):
More than a week ago? Yes, I think I'm probably lying.
Speaker 2 (00:33):
It's been a minute. It's been a minute. Let's talk
about him. We've talked about the Elon Musk premium before
that's been built into the stock of Tesla. I've asked
the question, I mean, does Tesla still need Elon Musk?
It sounds like the board was, according to the Wall
(00:53):
Street Journal, was also asking that question.
Speaker 1 (00:56):
There's two very distinct questions, which are like, does Tesla
the car company benefit from having Elon Musk a CEO?
There's the question of like does Tesla the multi hundred
billion dollar stock benefits from having Elon Musk a CEO?
I think those questions have very different answers, right, Like,
I think that if you were like, hey, here's this company,
(01:17):
that's selling cars, and it's CEO is in the business
of like making the people who buy its cars hate
him and also not paying any attention to the company
because he's doing ten different other things. You might be like, hey,
let's get a new CEO. But like, then, if you
like the stock and you think about what would happen
to the stock if Elon Musk wasn't the CEO, I
think it would go down.
Speaker 2 (01:36):
Yeah, it's funny because if we were talking about a
normal company with a very distracted CEO, of course you
would expect that the board would be, you know, engaging
firms to help look for a new CEO. Tesla obviously
is not a normal company, and this is a special situation.
Speaker 1 (01:53):
Right, And I should say that Tesla has denied reports
that it's looking for a new CEO. Right. The Also
Journal reported that some members of the board had reached
out to executive search forms. So you can sort of
square that circle by saying, yeah, some board members are
curious about the possibility of a new CEO, but there's
not a formal process by the board to engage a
search farm. Right, It's like somewhere in between. But right,
(02:13):
even though it's not a normal company, you would think
that the board, when faced with this extremely distracted CEO,
would look into a new CEO, even if they don't
want a new CEO, just to be like, hey, buddy,
could you spend a little more time with Tesla? Like,
I think that it's very clear that the board would
like him to spend more time with Tesla, and the
(02:36):
shareholders would like to spend more time with Tesla, and
probably the customers and many voters in the United States
would all like them to spend more time with Tesla.
So as a way to put pressure on him to
spend more time with Tesla, like, does this work? Maybe?
Speaker 2 (02:50):
I mean, we know that investors want him to spend
more time with Tesla because after the earnings call in
which he said I'm going to spend more time with Tesla,
significantly more time starting in May, the stock popped. Yeah,
so the reaction was clear. But I don't know, you
think about the timing of this Wall Street Journal report
when they were asking this question and potentially, you know,
(03:10):
talking with firms about initiating a search. It seems like
that happened before that Erness call where Elon Musk said that, So, yeah, I.
Speaker 1 (03:19):
Mean there's been conversations with him about spending more time
with Tesla. Yeah, I think he's like, this is not
an all or nothing decision, right. The model is kind
of Twitter, where Elon Musk bought Twitter. He installed himself
as the CEO for a minute, and then eventually, after
a flurry of activity, appointed Lindy Akarina as the CEO.
(03:39):
Now everyone kind of assumed that he was calling the
shots at X even though she was the CEO. But like,
you unload some of the responsibilities onto the CEO who
like runs the thing day to day, and then you're
like the visionary kibbitzer and like, you know, I wrote
this week that's not like already has that model where
Elon Musk's title at Tesla embarrassingly or technically techno King
(04:04):
and CEO he's the techno King.
Speaker 2 (04:06):
Didn't realize that.
Speaker 1 (04:07):
Oh yeah, it's happened a while. He's happened in like
twenty twenty one and he was named the Techno King
and the CFI was named the Master of Coin.
Speaker 2 (04:15):
Now it's coming back to me.
Speaker 1 (04:17):
Everyone blocks it out because it's really embarrassing, but it's
still you know, you still look at the filings it's
a techno king. Wow, And so you could split those rules.
He was once the chairman of the board as well
as the CEO, as many powerful CEOs are, and then
he had to stop being the chairman of the board
because he got in trouble with the SEC. But he's
now the techno king and CEO. So you can split
those roles too and leave him as the techno king,
(04:39):
make someone else the CEO. And like I think in
that split, like the CEO runs the car company and
the techno king is the guy who's like, we're gonna
build human eyed robots.
Speaker 2 (04:48):
We're doing the AI stuff, doing the AI stuff. Yeah.
Another suggestion that I've seen in terms of how you know,
the structure could work at Tesla. I forget who exactly
suggested this, but someone from the cell side, so that
maybe he could become chairman again and just be chairman.
Speaker 1 (05:04):
Yeah, But like in the traditional division of public company responsibility,
as the chairman who is in charge of the board
as a fiducia responsibility and overseas management is not quite
what he wants, and the CEO who runs the company
as a full time job is not quite what I
think techner king is a good description of what he
wants to be, which is he wants that absolute power,
(05:26):
be like focused on tech stuff and not have the
sort of full time day to day responsibilities of either
a CEO or a chairman.
Speaker 2 (05:34):
That's true. I will say it kind of reminds me
of micro Strategy to an extent, because Michael Saylor founded
micro Strategy, who is the CEO for a long long time.
He stepped down from being CEO and now I believe
he's just chairman.
Speaker 1 (05:47):
So that's a common thing. But I do think that
I do think that micro Strategy and Tesla are sort
of at opposite ends of like business complexity, like Mega
Strategy in the business of buying bitcoin and putting them
in a pub.
Speaker 2 (06:04):
Hear me out they actually have thousands of employees, because.
Speaker 1 (06:08):
That's not all I understand.
Speaker 2 (06:10):
That they're somewhat similar in that, Okay, Tesla is a
car company that also has this like AI stuff happening
with it. Micro Strategy is nominally a software company. Couldn't
tell you more than that, but then they have this
whole other thing on top of it, which is just
buying bitcoin and bitcoin. I think that micro Strategy is
known for the thing on top of it, whereas Tesla
is still known for primarily being a car company.
Speaker 1 (06:31):
Yeah. See, that's where I'm not sure. Like, like I
think that a lot of people would say that the
thing that Tesla does day to day is a car company.
It makes cars and sells cars, but the thing that
it is known for is being an MS company, and
particularly the thing that like drives its stock market evaluation
is not the current cash list from cars, but like
(06:52):
the future projections of We're going to build humanoid robots
and like be like the world's leading robotics and a company,
and like be like pioneers and some driving cars and
like all this stuff that Elon mus promises, and like
the journal story about the board looking Elsewhere also mentioned
some texts that Musk sent to someone close to him
(07:12):
saying that he no longer wanted to be CEO of Tesla,
but he was worried that no one could replace him
atop the company and sell the vision that Tesla isn't
just an automaker, but the future of robotics and automation
as well. I think that's right, right, Like, if you
got like a car person in to run it as
a car company, it's much harder to sell that vision.
The problem is not just that Elon Musk is a
good salesman for that vision, and if you put someone
(07:33):
else in charge, you wouldn't have that good salesmanship. There's
also the problem that, like Elon Musk does a lot
of stuff, and if someone else was running Tesla, then
when he wakes up in the morning and has an
idea for robotics stuff, he is more likely to do
it somewhere else. Right, he owns like six companies, He
can always start more companies. If he wants to do
the future of robotics somewhere else, he kind of just can.
(07:55):
Leaving him as the CEO of Tesla ties him a
little bit more closely to Tesla and makes and more
likely to do futuristic stuff within Tesla as opposed to
at SpaceX of the boring company or in a new
company or XII or XAI. And if there were just
like a coup, if the board was like, we're sick
of you, you're fired, We're getting a new CEO, that
(08:17):
would be really bad for Tesla. You know, he has
like a million things that he's doing, he'd do all
of them elsewhere. Is he sort of threatened to do
if he didn't get paid enough from Tesla. Right, Like,
one aspect of this is like, you know, we've talked
a lot about Delaware courts clying back. His compensation still
kind of being litigated, and you know he sort of said,
you know that if I had an extra fifty billion
dollars a Tesla stuck, I'd be more motivated to do
(08:39):
stuff within Tesla. But if he gets fired, less motivated,
you quin.
Speaker 2 (08:43):
To phreeze for this. What was it? Was it like
the Elon attention auction?
Speaker 1 (08:47):
Yeah? Right, Like if you are an investor or a
director at one of Elon's companies, the more of his
attention you get, the more valuable the company is, right,
And like you see that particularly with Tesla now or
like they get less of his attention, thought goes down
a lot, and like partly because they want more of
his attention and partly because when he directs his attention elsewhere,
it's like bad for pr But how do you get
(09:11):
that attention? The normal way is to give him stuff
like a big pay package, but some amount of threatening
it's also possibility. I know that it's threatening exactly, but
you had as a board have some amount of independence
and maturity where you can say to the CEO, Hey,
it would be nice if you shut up to work.
Speaker 2 (09:32):
Yeah, maybe swipe your badge now, and then should we
talk about some debt?
Speaker 1 (09:53):
Yeah about x X.
Speaker 2 (09:58):
Finally sold.
Speaker 1 (09:59):
Yeah. Like a lot of people probably including me, in
like twenty twenty three, like this is like one of
the worst leverage biots ever. In like early twenty twenty three,
you look at this and you're like, okay, Like Elon
Musk overpaid for a company. Twitter was not a traditional
leverage biot company because it didn't have great cash flow.
It wasn't like a you know, money spinner. It was
(10:20):
a you know, social media company that didn't make a
lot of money. And so Elon mus decided to buy
it and the leveraged buyout and he got thirteen billion
dollars over of the DIT, which is a lot of
debt for Twitter. And then after he gret to buy it,
everyone agreed, including him, that he was overpaying for it,
and he tried to get out of it by saying
Twitter is a big fraud. And by the time the
deal closed, it looked like a very unpleasant deal to
(10:42):
finance and the banks that finance that couldn't sell or
didn't selve the dietage presumaly because there's not much market
for it. And I don't think they ever marked it
down formally, but like the equity investors marked down their
equity a lot, and there were you know, news stories
saying that, like the banks were getting offers like fifty
cents on the dollar, so it looks like they'd lost
billions of dollars underwriting the Twitter deal and three years later,
(11:05):
two years later, they've sold held the data like you
know around bar Like the most reason slug was like
ninety eighth on's on the dollar. They got paid big
interest payments over that time period because like there was
you know, expensive debts, So they've made an accounting profit
on the deal. I made an economic profit on the deal,
and they also like coz it up with Elon Musk
and now probably get financing work for Xai, which is
(11:26):
a giant company.
Speaker 2 (11:27):
I love it because if you just held onto this
debt and kind of ignored it for three years, you
made out fine, but it came with a lot of
emotional turmoil.
Speaker 1 (11:36):
It's something I think about a lot, right, like the
you know, the pitch for private markets is you don't
have so much emotional turmoil, right, And the individuals who
like underwrote the X debt, they did a great decision
for their banks. They made a lot of money, but
like some of them got fired in the interim because
it looked like a terrible decision. And the journal story
about that selling the last slug of the ex debt
(11:58):
says the lega the hung debt might have longer term implications.
X and other hung loans prompted pay cuts and an
exodus of bankers. They also forced some banks to pull
back on lending, which gave room for competitors and the
booming private credit space to muscle it. So it's like,
did Elon Musk invent private credit?
Speaker 2 (12:15):
Not really, but like kind of like perhaps you did.
Speaker 1 (12:18):
Will the story of private credit be like yeah, and
then Elon Musk hung a debt deal and so everyone
had to you know, the banks had to stop lending,
and so private credit got to get into the game.
Because it's true, like there was a big uptick in
private credit because banks did pull back because there's a
string of hung loans. Yeah, and this was the big one.
Speaker 2 (12:36):
I kind of traced a lot of the boom that
we saw in private credit to the collapse of Silicon
Valley Bank, but MOBE the whole time it was just xtet,
you know, in like the.
Speaker 1 (12:44):
LBO space, like the banks that did LBO lending, you
have like a small balance sheet for LBO lending, and
you have to turn it over a lot by selling
all your loans. And if you stick thirteen billion dollars
of loans on your LBO balance sheet, you can't do
any more loans, and so you know, you have to
let private credit do it.
Speaker 2 (12:59):
Yeah, So you wrote that perhaps Elon Musk created private credit,
and perhaps he did. But when I read that, my
initial thought was to think about the psyche. You know
what we're talking about the private markets. Investing in private markets,
it's supposed to take out the emotional turmoil. Because I
was thinking about the past month and the equity markets,
and the S and P five hundred in April actually
amazingly was only down about seven eight tenths of a percent,
(13:22):
which is nothing. That's like the smallest move on a
monthly basis that we've seen a long time. But that
came with so much handwringing. It came with so much
volatility that you could watch second to second that you
asked someone how they felt at the end of April,
they would probably say that was crazy. But that mentality
of you know, if you just close your eyes for
three years, you made out great on this XTT. You
(13:43):
didn't have to think about it. But obviously it wasn't
actually private credit, so those banks probably thought about it
a lot.
Speaker 1 (13:49):
One selling point of private assets is that they have
lower volatility, and if you think about that for a second,
it can't really be true. But what is true is
that you don't mark them to market its frequently, and
so you can't know how volatile they are, unlike a
sort of like theoretical value. And so it is true
that because you don't mark them to market it is frequently,
you don't have to be as emotionally upset about them.
(14:11):
And so friend of the Pod Cliff as This has
written about this that like there is an actual value
from having private assets because if you are if you're
a human who might be prone to panic and sell
when things are low, or if you're like an institutional
allocator who has like some rule where you know, if
you have a big draw down you have to sell,
or something like that, you know like some of the
(14:32):
institutional structures of investing can like replicate irrational panic reader,
email me about this, Like to the extent that the
public markets are dominated by like multi strategy hedge funds,
who's like one of their salient features is that if
you have a ten percent drat on, you're fired. Like
that like creates potential bad incentives where you have months
(14:53):
like this where you have five percent drite out every
other day but nothing happens, right, Like you could have
like selling it the worst times because you are exposed
to volatility that you can see, whereas if you had
assets that you can't see the volatility of, you can
just like, yeah, that's great. And if like the volatility
is mostly you know, washed out, then yeah, that works
out better for you in the long run.
Speaker 2 (15:14):
I wonder how you quantify human emotion, though.
Speaker 1 (15:17):
Intuitively, one way you quantify it is that you think, well,
in the long run, private assets and public assets should
have like the same returns arguably, and if like ninety
percent of the volatility in public markets washes out, then
like that was all emotional volatility rather than real volatility.
That's really not quite right. But like, yeah, this is
(15:39):
the first.
Speaker 2 (15:39):
Cat like can design a factor around that and then
somehow launching EUTF.
Speaker 1 (15:46):
Let's see, there's also a Bloomberg report that XAI isn't
talks to raise twenty billion dollars of equity, which would
be like the second biggest startup fundraise.
Speaker 2 (15:56):
Ever, second only to Open Eye.
Speaker 1 (16:01):
One of the uses of proceeds might be to pay
down the debt. It's a little unclear how much money
Twitter is making. I mean x like the ex portion
of XII the social media company. But it's not like
a great business style, and businesses are still like pretty speculative,
hugely capital and tons of businesses, So you don't really
want to spend a billion dollars a year on debt
(16:21):
service if you're a company like that. And so it
looks like they can get rid of the debt by
raising twenty billion dollars of equity. Not only did this
that all get sold, but also it might get like
paid back at par early, and like I think that,
Like the message is that it's fairly expensive to raise
debt for a social media company and like incredibly cheap
(16:44):
to raise equity for a AI company, right, Like you
can raise billions of dollars of equity at one hundred
billion dollar valuations if you're a cool AI company, and so, like,
you know, they're correcting the capital structure. Speaking of the
(17:13):
appeal of private markets, go.
Speaker 2 (17:15):
On Group and KKR.
Speaker 1 (17:18):
Well everyone, I mean right, so there there's a story
this speak about Capital Group and KKR teaming up to
launch mixed public private debt funds, which is like a
fund that's like sixty percent public bonds and loans and
forty percent drag lending and other private credit stuff. So
it's a public private credit fund. And you know, Capital
(17:40):
is a big mutual fund manager that I believe sells
through financial advisors, and so like you know, if you
have a financial advisor, they might be like, oh, you
should put your money in this Capital mutual fund. And
now the financial advisor can say, oh, you should put
your money in this Capital slash KKR public private fund,
and yeah, that's like the way of the near future.
(18:01):
I think. Bloomberg reported yesterday that State Street and Carlisle
are in similar.
Speaker 2 (18:06):
Talks, which is interesting because State Street, you know, has
this partnership with Apollo as well.
Speaker 1 (18:11):
Yeah, but like the private managers are kind of they're
providing paper and then like these big asset managers are yeah,
we'll sell lots of that paper. I think I agree
that it's a little weird because they are like partnerships
rather than like, yeah, pure like issuers. But yeah, Capital
and KKR, State Street and everybody.
Speaker 2 (18:27):
That's just this week you also had Blackstone, Vanguard and
Wellington team up and some jv to launch these sort
of products.
Speaker 1 (18:36):
And the other thing that there is is Morgan Stanley
this week in Goldman a couple of weeks ago, launched
private wealth thingies where it's like their own alts businesses,
their own private credit businesses or private aquity businesses. I'm
going to sell some paper to like they're not like
pure retail, but like they're you know, High night Worth
retail ish private health clients. And so there's a lot
(18:58):
of emphasis everywhere in private credit and private equity managers. Yeah,
to sell to individuals, right, because like historically this has
been a business where they raise money from institutional allocators
and now they're like so big that they need to
tap trillions of dollars of individual wealth. And so there's
(19:18):
just a lot of talk about like putting private credit
and private equity into for one ks, and like target
date funds and ETFs and retail financial advisors and so
this is like the big push.
Speaker 2 (19:30):
So when you and I were discussing what to talk
about today, I call this sort of like the evergreen
story because we're talking about Capitol Group and KKR this
tie up. But it just feels like we're going to
see more of these And you talk about that push
because they want to open up and raise trillions of
dollars from retail investors. I mean, it just seems that
this is like the inevitable march forward. We could talk
about this story every single week.
Speaker 1 (19:50):
Yeah, oh we will. And it's interesting, you know, you say,
like March forward. Like my like cynical take on this
is that people solve the problem of investors, right, Like
it's a dispariting solution, right, But it's like you buy
all the companies and like black Rock or Vanguard will
do that for you because it's a useful service for
them to provide and they will charge you three basis points. Right,
(20:13):
buy all the companies and then you own the market
and no one's going to beat the market for you.
And getting the market return with lofis is the right
way to do it. And like there's lots of reasons subjective,
but it's like it kind of is a first cut,
like the solution, and a lot of people believe that
for plausible reasons. And so like a lot of people,
you know, put their money in intoex ETFs. And if
you are Wellington or Capital and you're in the business
(20:37):
of long only public equity management, you've had a good
fifty one hundred year run. But like that business is
really hard right now. It's really hard to sell an
actively managed mutual fund through financial advisors because people are, yeah,
there's self tright to you know, account buy s and
p five hundred etf right and pay three basis points.
Speaker 2 (20:55):
Instead of several dozens.
Speaker 1 (20:57):
You know, you used to pay like two percent for
a mutual fund for like that those days are long
dat and so how do you address that? The universal
answer is private markets? Yeah, and like what does that mean?
What it means? It's like you see like kind of
medium sized companies, youngish medium sized companies would go public
and now like companies stay private longer and grow bigger
(21:17):
in private markets, and and like why is that? Like
there are a lot of good reasons for it, right,
There's a lot of capital in private markets, it's much less.
It's mcual. We're convenient to be private than to have
to deal with earnings calls and SEC report and share
their lawsuits and.
Speaker 2 (21:32):
All the boring staff.
Speaker 1 (21:34):
Like short sell. There's a lot of stuff that companies
don't like about being public. But I also do think
that like if you're like, yeah, if you're like a
big private company, you go talk to like investors or
banks and you're like, hey, should I go public? They're like, no,
stay private, and like why well, this, like the financially
intermediates makes so much more money in private markets than
in public markets. In some ways, it feels like a
(21:56):
step backward in progress, right, Like, in some ways it
feels like what's happening here is that public markets are
so cheap and efficient for some definition of efficient that
it is kind of no fun to be an investor
in the public markets. And so all these investment firms
are like, how do we get more stuff that isn't
just like ruthlessly indexed and charges three asis plants, and
(22:19):
like the answers like more private stuff.
Speaker 2 (22:21):
Yeah, I'm trying to just said what is the chicken
and what is the egg? Because like there's two things happening.
Speaker 1 (22:26):
I mean, you're all self reinforcing. Just one thing started.
Speaker 2 (22:29):
But yeah, what do you call when the snake is
eating itself.
Speaker 1 (22:31):
Robbers roborusus roboris. Yeah, that sounds good.
Speaker 2 (22:36):
Well, what I'm trying to say, you have you know,
the capitol groups and the Wellingtons of the world. They
want to tap into retail investors because we've solved the
problem of investing and here's a new thing you can do.
And then here's the other force, is that you have
all these cool, interesting companies that are small that are
staying private for longer, partly because the funding is there.
You mentioned all the annoying things, but there's also like
(22:58):
there's ways to access funding. You don't need to go
public anymore. And I guess that's the snake.
Speaker 1 (23:03):
Oh yeah, absolutely. And also the other thing is there
is retail demand for this, like yeah, it's not just
like the issues like it and the intermediaries like the
retail coastors. Yeah, I get to own cool private companies, right. Yeah.
There is this perception based in fact that the highest
growing companies are in the private.
Speaker 2 (23:20):
Markets Stripe, SpaceX. Yeah.
Speaker 1 (23:22):
And then also on the credit side, because a company
what you're getting in private credit is like a certain
amount of like flexibility and structuring and a certain amount
of certainty, and you're paying for that with higher interest rates.
And so if you're a retail client and you're like,
I can have a bond fund, or I can have
a private credit fund that pays ANXT one hundred and
fifty basis plant, it's like, why not do the private credit.
So there's some reality to the idea that private markets
(23:43):
have higher returns, and so you should invest in private markets.
Speaker 2 (23:45):
God, I had something to say and it just flirted away,
it went private. Yeah, I can't access it.
Speaker 1 (23:51):
Did I tell you that at Disney World I saw
a snake?
Speaker 2 (23:53):
We haven't talked at all about your trip to Disney World? Yeah,
how was it?
Speaker 1 (23:57):
Oh?
Speaker 2 (23:57):
I remember what I wanted to say? Should I say it?
Speaker 1 (23:59):
Yeah?
Speaker 2 (24:00):
A mailbag question we got about adverse selection. Yeah, this
was in relation to private credit euts. But you know,
the cynical suspicion that the private manager was just going
to dump all their not so great stuff into these
retail funds.
Speaker 1 (24:14):
Yeah, there's always like some hierarchy of like if you
are a private investment manager running a bunch of different
things like you'll have a natural inclination to allocate the
very best things to your personal account, the next best
things to the accounts of the important clients to pay
you the highest fees, and like the worst things you know,
to the retail clients to pay your eighty basis funds. Right,
(24:35):
But there are a lot of like things to counteract
that tendency, like regulation and like you know, the conflict
committees of these firms, and like, you know, a lot
of the stuff is like sort of vertical slices of everything.
So it's like, I wouldn't you know, like you can't
really have this business where like you take the best
loans and you put them in your private credit fund,
and you take the worst loans and you stuff them
(24:56):
into the public private fund for retail. And also the
partnerships guard against that a little bit, where like the
straight streets and capitals of the world have incentives to
negotiate to get the good loans rather than just the
bad ones.
Speaker 2 (25:07):
Yeah, they're doing due diligence and the like, But I
don't know.
Speaker 1 (25:10):
I mean, if you're like a private credit manager, like
your job is to like make good loans and then
like you fund them with like a sort of undifferentiated
pool of like the money that you get from, you know,
wherever you get it from.
Speaker 2 (25:23):
Cool, So maybe we shouldn't worry.
Speaker 1 (25:25):
It's not highest on my list of worries. Are we
gonna like talk about an sec in force for nationalting
at someone who, like, you know, adversely selected their retail
fun maybe one day.
Speaker 2 (25:34):
Six or twelve months perhaps the sort of thing.
Speaker 1 (25:36):
We're not we're talking about it not in sixty twelve,
three and a.
Speaker 2 (25:40):
Half years, three and a half years, you know, when
we're on episode whatever, Yeah, we're.
Speaker 1 (25:46):
Sorry, we're not talking. Sorry, And that was The Money
Stuff Podcast.
Speaker 2 (25:53):
I'm Matt Levi and I'm Katie Gal.
Speaker 1 (25:56):
You can find my work by subscribing to The Money
Stuff newsletter on Bloomberg dot.
Speaker 2 (25:59):
Com, and you can find me on Bloomberg TV every
day on Open Interest between nine to eleven am Eastern.
Speaker 1 (26:06):
We'd love to hear from you. You can send an
email to Moneypod at Bloomberg dot now, ask us a
question and we might answer it on air.
Speaker 2 (26:13):
You can also subscribe to our show wherever you're listening
right now and leave us a review. It helps more
people find the show.
Speaker 1 (26:19):
The Money Stuff Podcast is produced by Ana ma Aserakus
and Moses onm Our.
Speaker 2 (26:23):
Theme music was composed by Blake Naples.
Speaker 1 (26:25):
Brandon, Francis Nudim, It's our Executive producer.
Speaker 2 (26:27):
And Stage Bauman is Bloomberg's Head of Podcasts.
Speaker 1 (26:30):
Special thanks this week to Dash Bennett. Thanks for listening
to the Money Stuff Podcast. We'll be back next week
with more stuff
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