September 5, 2025 • 26 mins
Katie and Matt discuss the taxation power, IEEPA, tariff refunds, government revenue sharing, voluntary tariffs, alternative/traditional asset manager partnerships, Goldman buying a little bit of T. Rowe, private assets in target-date funds, deal-contingent hedges, private equity becoming the main clients of investment banks (and hedge funds).
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News. If you watched our
video podcast, you saw us in the fancy studio of it.
Now we're in the other studio.
Speaker 2 (00:13):
Yeah, we're in the little box on the fourth floor
of Bloomberg. The women's order room is right there, and
I often play music to myself because I usually have
time alone in there, and sometimes I think there's probably
people recording a podcast right next door.
Speaker 1 (00:26):
Yeah, we're definitely in the partially soundproofed recording studio.
Speaker 2 (00:29):
It could it could be you think being soundproof is binary.
Speaker 1 (00:34):
Oh, I would never think that.
Speaker 2 (00:36):
I I mean, ideally it would be. This room is
not soundproofish.
Speaker 1 (00:41):
No, it has a lot of patting on the walls,
but a lot of sirens in the background. Hello, and
welcome to the Money Stuff Podcast. You're a 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 (00:58):
And I'm Katie Greifeld, a reporter for Blomberg News and
an anchor for Bloomberg Television.
Speaker 1 (01:03):
I feel like people get mad at me because I
am not very good at like sitting at the right
distance from the mic, and I end up like yo
yoing around and so I get closer and further from
the mic. But this mic is really vibrating toward and
away from it because one time it's not entirely my fault.
Speaker 2 (01:18):
Yeah, we're not familiar with these mics.
Speaker 1 (01:20):
Mike is on a pendulum.
Speaker 2 (01:21):
Yeah, it does feel like it is shaking a little bit,
but that's fine. You know, maybe the lad a little
new vibrato. Maybe the audience will appreciate that.
Speaker 1 (01:29):
They do love vibrada.
Speaker 2 (01:32):
But you know what, the US Court of Appeals for
the Federal Circuit on Friday does not necessarily love. They're
still illegal, as you laid out. Yeah, they're saying in
place though, Right, we.
Speaker 1 (01:46):
Live in a weird world where like the government does
a lot of stuff that's illegal, and the courts are like, well,
this is illegal, but we can't stop you. So I
don't know. It's very depressing. District Court a while back
ruled that the broad Trump tariffs are illegal because, as
I've written a number of times, the US Constitution is
(02:07):
really clear that Congress has the power to impose taxes.
Doesn't like, that's like a really core part of the Constitution,
And so when the president announces swooping new taxes without
any legislation does seem very illegal, and the court found
it illegal, and the government appealed, and this week the
(02:28):
appeals court, the Court for the Federal Circuit, agreed that
those tariffs remain illegal. And the way it works is that,
like the government's position is that there's a statute called AEPA,
the International Emergency Economic Powers Act, Yes, got it, And
AIPA gives the president some powers to deal with unusual
(02:49):
and extraordinary threats from abroad by doing any number of things,
including regulate importation. And the government argued, well, if the
president can regulate importation, that means he can impose tariffs
on imports, and because trade deficits are an emergency, he
can declare an emergency and impose tariffs to stop trade deficits.
(03:12):
And there are a lot of holes in that argument,
one of which is that, as the appeals court wrote,
saying that you can regulate importation does not actually mean
that you can impose taxes. And as they point out,
the sec the Securitiest Exchange Commission, has the power to
regulate financial market activity, but that doesn't give it the
power to make up new taxes because that's part of
(03:35):
financial markets. Yeah, Like the sec has regulatory power, but
not tax inventing power yea. And so similarly here, the
president doesn't have the power to invent new taxes or
so the appeals Court held, but it also state its
ruling because it's kind of got appealed to the Supreme
Court and nobody knows it'll happen there.
Speaker 2 (03:51):
Yeah, I mean President Trump didcide this week that they're
going to ask the Supreme Court for an expedited ruling,
So we'll see. There.
Speaker 1 (03:58):
There's a pretty consistent situation where the president loses in
lower courts because the lower courts follow a precedent inside
this is illegal, and then he gets the Supreme Court,
and the Supreme Court is the more flexible you have precedents,
so they tend to let him duty once. So we'll see.
Speaker 2 (04:13):
We'll see. Anyway, the scope period this covers most of
President Trump's tariffs. There are some specific sections that he's
used which are a little bit more cumbersome.
Speaker 1 (04:22):
Yeah, Congress has a long history of delegating tariff power
to the president. There are specific statutes doing that, saying,
you know, for particular industries or for particular reasons you
can impose tariffs, and usually there's like an administrative process
where they have to like go through some sort of
review in fact finding before imposing tariffs. And so the
Trump administration has done a little of that, and that
stuff is fine. But most of their tariffs though, you
(04:44):
know what they call reciprocal tarffs tariffs, but whatever, most
of that is opposed with no kind of fact finding.
A review based on AIPA and IEPA pretty clearly doesn't
give them the power tom post tars.
Speaker 2 (04:57):
Yeah. Yeah, so the terrorists are saying in place. Now,
we'll see what the Supreme Court does. But it is
fun to game plan what would happen if the majority
of the tariffs had to be rolled back. I mean,
you think about where that would leave the US, first all,
when it comes to negotiating trade deals, et cetera. Obviously,
that would put the US in a worse position.
Speaker 1 (05:16):
Sort of, right, I mean, like it depends on what
you think is worse or better.
Speaker 2 (05:20):
Stick if you can't a stick to.
Speaker 1 (05:24):
Trade like we did, you know, a year.
Speaker 2 (05:25):
Ago, I don't think that that's necessarily the goal of this.
If they're trying to pursue you know, the world.
Speaker 1 (05:34):
You're trying to pursue no free trade. And by the way,
like there's still some you know, as you said, there's
other statutes that I give him some tariffing and frankly
there's you know, but those are the possibility of going
to Congress and asking for tarifs, like it's a Republican
controlled Congress and like you could imagine Trump saying tariffs
are good and getting Congress to fulfill its constitutional role
(05:55):
of passing terrors.
Speaker 2 (05:56):
Yeah. The problem that probably the Oval offices with all
of that is that would just take more time. It's
not as easy as sending a truth social.
Speaker 1 (06:03):
Posts of course, of course. Yeah, that's the problem that
the Oval Office is with it. Many people would say
it's good to have a rule of anyway.
Speaker 2 (06:11):
Anyway, we'll see what the Supreme Court does.
Speaker 1 (06:13):
Yeah, there's a lot of stuff. Like to me, like
the interesting gaming out what would happen is if they
agree with the lower courts that the tariffs are illegal,
does that make them refundable? Because you know they're in
place now. The government is collecting tens of billions of
dollars a month from Yeah, lots, you know, lots of
(06:33):
boats coming.
Speaker 2 (06:33):
In and thirty billion dollars in July.
Speaker 1 (06:36):
Actually, and like what happens if those tariffs are all illegal?
Do they have to pay them money back?
Speaker 2 (06:41):
Yeah, that's a good question, right, it seems very hard.
Speaker 1 (06:44):
And in fact I read about this on Thursday. There
are you can go to the prediction markets, you know,
to Calshier polymarket, and they give odds for the Supreme
Court upholding the tariffs, and then they're like fifty to fifty,
which seems right, right Court, But the odds of the
chans of the tariffs being refunded are lower than that.
They're lower than fifty to fifty because there's some sense
(07:05):
that even if the tariffs are illegal, it's like kind
of hard to unscramble that egg. And yeah, just say okay,
going forward, no more tariffs, but like you don't have
to refund them, yeah, if you do have to refund
them to be one of the really interesting questions is
if you are an importer who paid tariffs and you
somehow pass those tariffs along, right, like you charged your
(07:27):
customers or you like didn't explicitly charge them, but you
raised prices, Like do you have to refund them if
you're like just the company that raised prices to consumers
because of tariffs, and then like you got all the
tariffs back, Like, are consumer is going to be mad?
Are you going to have to refund them the money?
It's like an interesting tariff effect is like it is
hard to unscramble even if you refund the actual tariffs.
Speaker 2 (07:50):
Yeah, I mean you could say I've already raised my prices,
I might as well just keep them here.
Speaker 1 (07:55):
Oh yeah, yeah, yeah.
Speaker 2 (07:58):
It is interesting to think about some of that. There
was an interesting column from former New York Fed President
Bill Dudley on the Terminal sometime this week saying that,
you know, if you do game plan out this scenario,
the tariffstary, illegal, et cetera, what does that mean for companies?
His view is that companies are going to be slower
to pass on their cost increases if we do have
(08:19):
this wildly swinging pendulum. And what that means for the
Federal Reserve is a fun thought exercise. Is inflation transitory?
Once again, seems like a difficult environment to make policy in,
but probably not any more difficult than it is right now.
Speaker 1 (08:35):
I was going to say, there's a really distinct lack
of clarity on tireffs, both in terms of their legality
and in terms of what the negotiated rights will be. Yeah,
and I was going to say that at the Supreme
Court definitively rules that the AJEPA illegal, then you get
more clarity. But that's not really true, right, because then
they go back and use other statutes, and it's like
it just takes a more drawn out, more complicated process
(08:56):
with further legal challenges. And yeah, yeah myself, out of
that sounds it's all pretty grim.
Speaker 2 (09:02):
Yeah, it is pretty grim. It's also grim just for
the US government and the fiscal outlook sort of well,
Scott Vesson, Treasury Secretary Scott Besson has projected that tariffs
are supposed to bring in like five hundred billion dollars
in a year in annual income. They would have a
hole there.
Speaker 1 (09:21):
Yeah, But like the US fiscal outlook is a long
term outlook, and if you think as most economists still
seem to think that tariffs are bad for the US economy,
which is a separate from the legality question. But again,
most economists think that not Scott Bessant, not Donald Trump,
(09:43):
but most economists think that tariffs are not really helping
economic growth. If you think that, then getting rid of
the tariffs is good for fiscal sustainability, right because like
in the long run, right, like fiscal sustainability is driven
by like the economist's capacity rather than like the particular
text rate on. Yeah.
Speaker 2 (10:01):
Just in terms of though bringing down the budget deficit,
it does hurt there. This was part of the pillars
that US treasure Secretary Scott Best and put in place, Like, yeah,
plants have been built around this revenue coming in to
the government's coffers and taking that out would I don't know.
Speaker 1 (10:18):
Yeah, no, it's it's like super disruptive, yeah, right, Like
on the one hand, you could imagine a court somewhat
unconstrained by precedent on law saying it would be so
disruptive to the government to take away this thirty billion
dollars a month of revenue source that we're just gonna
benever backwards not to do it. It really is what
the constitution says, is said Congress system post taxes, Right,
(10:40):
it's a really important part of the constitutional structure. And
it's like, you know, there's hundreds of years of history
of like kings and executives in wanting to raise taxes,
and the only constraint on them being the legislature's power
to raise taxes. And so for the Supreme Court to say, eh,
it's like too important for the president to be able
to impost whatever taxes he wants. It's like really a
shocking change in the constitutional structure. But here we are.
Speaker 2 (11:03):
Maybe the government can make up what they're not making
a terror revenue from their stakes in US companies. Maybe
that's the future we're rattling towards.
Speaker 1 (11:13):
How did this get more depressing? It's true that the
Trump administration has found many new revenue sources, like owning
ten percent of Intel. This is a real tangent, But like,
I do think that one model that people have is that,
like the US government has a twenty percent stake in
every company because it taxes twenty percent of their earnings.
If you take an additional ten percent stake and Intel,
then that's like kind of an additional tax, but whatever,
(11:35):
that's not really a tax. It's fine, but right. I mean,
the other like truly novel revenue source that the Trump
administration has found, not for the government but for Trump
personally is cryptos shitandingg it and like you could probably
make thirty billion dollars a month telling US government crypto
that's true.
Speaker 2 (11:55):
I thought you were gonna bring up the revenue share
that has been floated with AMD in video, but that's
you know, the crypto she innigans is probably a much
more short thing. I don't think that the Trump family
is giving that.
Speaker 1 (12:07):
You like Intel and AMD and video.
Speaker 2 (12:10):
It's like we talked about this on the podcast.
Speaker 1 (12:13):
I don't write about it. It's not that fun. But
like these are all like voluntary taxating. They're like voluntary taxes, right,
they're like, yeah, Talald Trump goes to like in video
and it's like, hey, you give you ten percent of
your revenue? No, And they're like yes, no, well no
they I mean right, like they're thinking, no, I don't
want to give you ten percent of my revenue. But like, yeah,
you know there's like a certain like nice chip company here,
(12:35):
anything were to happen to it, right, Like if you
replaced the tariffs of voluntary tariffs, like how much revenue
would you collect? Like not none? Yeah, it's like voluntary
like nudge nudge.
Speaker 2 (12:45):
I don't know enough about a MD's situation to pine
on it too confidently, but at least in video Bloomberg
had an interview with Invidia CFO last week, and she
said something along the lines of, I haven't seen anything,
I haven't signed anything. We're not giving up fifteen percent
of our Chinese chip revenue yet, so I might be editorializing.
(13:10):
I don't know if she said it with that much passion.
Speaker 1 (13:14):
Happened to that Chinee.
Speaker 2 (13:16):
Well, I don't know even if Chinese companies are going
to be able to continue buying it. Apparently the Chinese
government reportedly has encouraged companies not to buy American chips.
But anyway, Charlie move long, what tickles your fancy to
(13:45):
talk about? Second? This week my old haunts Coldman Goldman.
I am excited to talk about this. This is a
weird one.
Speaker 1 (13:54):
Yeah, it's sort of. It's not that way, it's like
it seems weird. It's weird in detail, but like effectively,
every week on this podcast we talk about some sort
of deal where a big traditional asset manager is buying
like an alterative asset manager, like a private markets are
just partnering, or a private manager is buying a traditional
manager or a private manager and a traditional manager or
(14:15):
partnering to do like an ETF or whatever. And this
week it is Goldman partnering with Tierro Price and no
one's buying each other. Golden's buying a little too. Yeah,
they're buying a billion dollars of Tiro in the inn
open market.
Speaker 2 (14:29):
To be clear, The weird part, at least from where
I'm sitting, is that Goldman will make a series of
open market purchases to a mass up to three point
five percent of TIRO stock. That's as much as one
billion dollars. That would make them, I think, one of
the top five biggest shareholders in Tiro. Why do they
have to go through all that? Why can't they just
do a little jv A partnership.
Speaker 1 (14:48):
I don't know. We are in a moment where there's
a lot of momentum behind alts managers by alts managers,
I mean, you know KKR, Apollo, you know Blackstone. But also,
and I think we've talked about this on the pod
and I've certainly written about it, like Goldman is very much,
very much wants to be an altimage.
Speaker 2 (15:05):
We've talked about it, and you know.
Speaker 1 (15:07):
Look it is right, it like it runs alternative assets fun,
you know, it manages assets well.
Speaker 2 (15:12):
Didn't it use that to justify the pay packages for
David Suleman and John Waldron.
Speaker 1 (15:18):
Like, Goldman is an investment bank and it's also it
manages a lot of money for institutions that it invests
in alternative assets, and it's been a big business for
a long time. So it's not quite the same as
like KKR, but it's you know, it's like they think
that they can.
Speaker 2 (15:31):
Well I was going to ask who is the alts
manager in this scenario?
Speaker 1 (15:35):
And it's funny, right because like Tiro actually owns a
private credit manager. Yeah. Cool, But if you read the
press release in this deal, it's like it kind of
says we're bringing goldbn's ALTS assets to Tiro's retail and
retirement distribution. And then Okayill is like we're here too,
because I think how I read that? But right, so
(15:57):
Goldman is I think the alts manager here, and that
they do you know, they raise a lot of money
to invest in alts and you know they do that
from institutions and they do that from their private wealth clients. Yeah.
The story and private credit and private equity these days
is like trying to find like true retail distribution, trying
to sell through financial advisors and in particularly trying to
(16:19):
sell to fore own K plans. Yeah, And Tiro has
a lot of furrow and K business, and like they
do target dated funds for own case, right, And if
you can put private assets into target date funds, like
that's a no brainer, right, It's like it's exactly the
liquidity profile you want and you're selling alts assets to
your giant pool of retirement savers. Yeah. I mean Tiro
(16:40):
is like very much classic Like, Okay, they have some alts,
but like they're very much a classic traditional long only
activity manage mutual fund manager. And that is a tough business, right,
I mean the Bloomberg article about this tie up mentions
that Tiro has had like two hundred billion dollars of
client outflows. Yeah, their stock is down fifty from where
it wasn't twenty twenty one. It's a tough business to
(17:02):
beg in. And you know everyone in that business is
like looking around and me like, how can we get
into privates because the fees are better?
Speaker 2 (17:08):
Yeah, Well that's the thing. I guess. I'm surprised that
this search led them to Tiro, which isn't entirely fair.
The Bloomberg News article does also point out that two
thirds of Tiro's assets are in retirement funds. They're one
of the largest firms in that part of the market.
Speaker 1 (17:23):
Everyone in privates wants retail distribution. This gets back to
your question about why do they have to buy three
point five?
Speaker 2 (17:30):
Yeah, is it just because the stock was on sale?
Speaker 1 (17:33):
To your point, I think it's the stock was on self.
But I think a lot of it is like if
you're Tiro, you know, you're like every alt manager wants
to distribute through every four O, one K channel, and
we want a real partnership with Goldlan rather than just
like letting them stuff their funds into our clients. Right,
(17:54):
And what does a real partnership mean. Well, I think
it means like giving Golden some incentive of to have,
you know, some upside in Tiro stock, so that Golvin
has some incentives.
Speaker 2 (18:03):
To actually skin in the game.
Speaker 1 (18:05):
Yeah. Actually, you know, not just like used to as
a dumping ground for its products, but like try to
you know, be a real partnership.
Speaker 2 (18:12):
Yeah.
Speaker 1 (18:12):
I think that's like it makes sense to say you
should buy some stock.
Speaker 2 (18:15):
Yeah. It is interesting because I mean you think about
some of the other partnerships that we've talked about on
this show. You have Vanguard and Wellington with Blackstone that's
just partnering on fun. State Street has partnered with Apollo.
Speaker 1 (18:28):
Like Van Garden. State Street are not in the same
position as like the traditional active management firms Wellington. Well, yeah,
come on, I was saying, yeah, yeah, right, I mean,
like I think of it as like the investment world
now is like focused on alts and index ones, and
if you're a traditional active manager, it's really hard. And
(18:52):
so you can get into indexing, but that's like you
know that stuff, isn't it get into Yeah, and so
you get into get adults.
Speaker 2 (18:58):
Yeah, I'm interested to see how this turns out, to
see this sort of transaction to.
Speaker 1 (19:03):
Call my eye, deal contingent hedges.
Speaker 2 (19:20):
Are we only talking about currency hudges here?
Speaker 1 (19:23):
You can do deal contingent rates hudges?
Speaker 2 (19:25):
Okay, yeah, spiritually similar, It's possible.
Speaker 1 (19:28):
That someone somewhere has done a deal contingent oil hedge.
Yeah maybe, yeah, but no, I mean it's mostly currency
and occasionally rate. So like you're a company, you're buying
another company.
Speaker 2 (19:40):
I'm a business man.
Speaker 1 (19:43):
You buy another company, you sign a deal to buy
the company, and it's closing in like six months, and
if it's in a foreign country, you might have to
get a lot of foreign currency and you want to
lock in your currency rate today, but if the deal
doesn't close, you don't want to have liability for that currency.
Similarly like you might lock in your bar in cost today, right,
like you might hedge with treasuries to hadge your you know,
(20:04):
interest rates in some months, but if the deal doesn't closed,
you don't need that interest rate hedge anymore. And so
there's a long time banking product of deal contingent hedges
where you go to your investment bank that did the
merger for you and you say, I would like to
hedge my currency risk or my rates risk or whatever,
but I want to lock in my rates today, and
if the deal doesn't close, I want to tear up
the contract to not owe you anything, right, and for
(20:26):
some price, the bank will do that. And historically this
was like what banks did, right. Banks had big balance sheets,
and they were good at pricing complicated risks, and they
were in a client service business, so you know, as
their merger client, if you wanted that sort of hedge,
that was a nice thing for them to sell you, right,
help them win merger business. And it's also very risky
(20:49):
because like it's easy to do a foreign currency hedge right,
like you you know, just buy the right delta in
the spot link.
Speaker 2 (20:54):
I could do that right now, right.
Speaker 1 (20:56):
But like a foreign currency hedge that is torn up
when a deal falls apart is very difficult to hedge.
And banks sometimes get it wrong or get surprised by
deals falling apart and lose you one hundred million dollars
on a deal. And so there've been a series of
IFI articles, like International Financing Review articles about how hedge
funds are getting into the deal contention hedge business, where
(21:18):
you know, there's an article last year that I read
about where basically a number of banks will do these
deals with their clients, like they'll do a deal with
a corporate client saying, well, you know, hedge your foreign
currency risk and tear it up if the deal falls apart,
and then they'll go to a big hedge fund and
buy the offsetting trade, and the hedge fund will price
the merger risk and give them the trade, and the
bank will collect a little fee for setting up the deal,
(21:40):
but the hedge fund will take the risk. Right, And
I thought of this is like an interesting story about
how like banks don't have the risk appetite and balance
sheet that they used to, and like the big hedge
funds are becoming that the source of risk capital. But
then this last month there's an IFI article about how
the hedge funds are taking the next logical step and
(22:01):
just going directly to the clients and saying, hey, we'll
do the hedge for you. You don't need to go to
your bank at all.
Speaker 2 (22:05):
Yeah.
Speaker 1 (22:06):
One, then that's interesting. You know, when I was a banker,
like I thought of like bankers as covering companies, large
corporate right, I did deals, But increasingly the main client
of investment banking is private equity, right, Like a lot
of deals are done by private equity, and so particularly
deal contentionent hedges. It's a lot of private equity firms
(22:27):
saying we're going to buy this foreign company, the deal's
going to close in sixty nine months, we want to
have your currency arrest today, and we're interested in structure,
so we're happy to do a deal contentionent hedge. And
the good and bad thing with private equity firms as
a client for a bank is like there's like twelve
of them and stuff of thousands.
Speaker 2 (22:43):
Yeah.
Speaker 1 (22:44):
And so if you're a hedge fund and banks are
constantly coming to you to do deal contentionent hedges and
they're all for like three private equity firms, You're like,
why do not I just call those three private equity
firms myself? Why do I need the bank at all? Right? Like,
if banks have thousands of corporate clients, like they're client
relationships are important and hard to replicate, right, HAG fund
is not going to get into that business. But if
(23:05):
they have like twelve private equity clients, you could do that.
You can cover twelve.
Speaker 2 (23:09):
My first thought reading this was wouldn't it be inefficient to,
you know, try to take a guess of which of
the private equity clients are bound to do cross border deal?
Speaker 1 (23:19):
But putting it like you no, right, because like they've
done the deals right, Like yeah, Like, if you do
a deal contingent heads like regardless of whether the bank
tells you who's on the other side of it, like
it's continuent on a particular merger, so you can tell
who's doing the merger, right, Yeah, And if you do
three deals for one private equity firm, You're like, hey,
I should get to know that.
Speaker 2 (23:37):
Yeah, so I understand I can put myself in the
shoes of the banks being upset about this. I can
put myself in the shoes of the hedge funds who
are doing this. But I think it's also interesting to
think about the private equity firms. And the article does
ask the question should it really matter to the client
who is the back ends? And it raises good points
(23:57):
that you know, you could get worried about the possibility
of leaks surrounding M and A. There's potential conflicts of
interest here. It'd be interesting to hear from the perspective
of the private equity clients how they feel about this.
Speaker 1 (24:09):
Yeah. I always assume you could do these hedges the
day after you sign the deal rather than the day before.
Maybe that's wrong, but like if you do the day after,
you don't have to car about leaks. Yeah, I guess
you'd worry about credit. Like the nice thing of doing
this trade with like a big bank is like you're
facing the big bank and they probably went to Faull,
Whereas if you're facing a hedge fund, you.
Speaker 2 (24:25):
Have to have some counterparty, yes.
Speaker 1 (24:28):
Some diligence on how well the hedge fund is, But
I don't know. If I were a big private equity firm,
I would find it cool to like diversify my pool
of counterparties and like decent deals with DJA or whatever
instead of with a bank. Yeah.
Speaker 2 (24:41):
Well that's actually all I have to say. I guess
there's more deals happening, so this will.
Speaker 1 (24:47):
I always thought this is like a really niche, like
unusual business, and now it's like a thing. It's weird,
but uh, yeah, the smart deal's happening. Yeah, sort of.
There's no private equity actual acquisition, so that's true.
Speaker 2 (24:58):
Though apparently August was the best month for deal making
since twenty twenty one or something along those lines.
Speaker 1 (25:04):
Yeah, good news, we're back.
Speaker 2 (25:07):
We're back.
Speaker 1 (25:11):
And that was the Money Stuff Podcast.
Speaker 2 (25:13):
I'm Matt Levian and I'm Katie Greifeld.
Speaker 1 (25:15):
You can find my work by subscribing to the Money
Stuff newsletter on Bloomberg dot com, and.
Speaker 2 (25:20):
You can find me on Bloomberg TV every day on
the close between three and five pm Eastern.
Speaker 1 (25:26):
We'd love to hear from you. You can send an
email to money Pod at Bloomberg dot net. Ask us
a question and we might answer it on air.
Speaker 2 (25:32):
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 (25:38):
The Money Stuff Podcast is produced by Anna Maserakus and
Moses Onda and Special Thanks this week with Julia Press.
Speaker 2 (25:44):
Our theme music was composed by Blake Maples and Stage
Bauman is Bloomberg's head of podcasts.
Speaker 1 (25:49):
Thanks for listening to The Money Stuff Podcast. We'll be
back next week with more stuff
Bloomberg Audio Studios, Podcasts, radio News. If you watched our
video podcast, you saw us in the fancy studio of it.
Now we're in the other studio.
Speaker 2 (00:13):
Yeah, we're in the little box on the fourth floor
of Bloomberg. The women's order room is right there, and
I often play music to myself because I usually have
time alone in there, and sometimes I think there's probably
people recording a podcast right next door.
Speaker 1 (00:26):
Yeah, we're definitely in the partially soundproofed recording studio.
Speaker 2 (00:29):
It could it could be you think being soundproof is binary.
Speaker 1 (00:34):
Oh, I would never think that.
Speaker 2 (00:36):
I I mean, ideally it would be. This room is
not soundproofish.
Speaker 1 (00:41):
No, it has a lot of patting on the walls,
but a lot of sirens in the background. Hello, and
welcome to the Money Stuff Podcast. You're a 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 (00:58):
And I'm Katie Greifeld, a reporter for Blomberg News and
an anchor for Bloomberg Television.
Speaker 1 (01:03):
I feel like people get mad at me because I
am not very good at like sitting at the right
distance from the mic, and I end up like yo
yoing around and so I get closer and further from
the mic. But this mic is really vibrating toward and
away from it because one time it's not entirely my fault.
Speaker 2 (01:18):
Yeah, we're not familiar with these mics.
Speaker 1 (01:20):
Mike is on a pendulum.
Speaker 2 (01:21):
Yeah, it does feel like it is shaking a little bit,
but that's fine. You know, maybe the lad a little
new vibrato. Maybe the audience will appreciate that.
Speaker 1 (01:29):
They do love vibrada.
Speaker 2 (01:32):
But you know what, the US Court of Appeals for
the Federal Circuit on Friday does not necessarily love. They're
still illegal, as you laid out. Yeah, they're saying in
place though, Right, we.
Speaker 1 (01:46):
Live in a weird world where like the government does
a lot of stuff that's illegal, and the courts are like, well,
this is illegal, but we can't stop you. So I
don't know. It's very depressing. District Court a while back
ruled that the broad Trump tariffs are illegal because, as
I've written a number of times, the US Constitution is
(02:07):
really clear that Congress has the power to impose taxes.
Doesn't like, that's like a really core part of the Constitution,
And so when the president announces swooping new taxes without
any legislation does seem very illegal, and the court found
it illegal, and the government appealed, and this week the
(02:28):
appeals court, the Court for the Federal Circuit, agreed that
those tariffs remain illegal. And the way it works is that,
like the government's position is that there's a statute called AEPA,
the International Emergency Economic Powers Act, Yes, got it, And
AIPA gives the president some powers to deal with unusual
(02:49):
and extraordinary threats from abroad by doing any number of things,
including regulate importation. And the government argued, well, if the
president can regulate importation, that means he can impose tariffs
on imports, and because trade deficits are an emergency, he
can declare an emergency and impose tariffs to stop trade deficits.
(03:12):
And there are a lot of holes in that argument,
one of which is that, as the appeals court wrote,
saying that you can regulate importation does not actually mean
that you can impose taxes. And as they point out,
the sec the Securitiest Exchange Commission, has the power to
regulate financial market activity, but that doesn't give it the
power to make up new taxes because that's part of
(03:35):
financial markets. Yeah, Like the sec has regulatory power, but
not tax inventing power yea. And so similarly here, the
president doesn't have the power to invent new taxes or
so the appeals Court held, but it also state its
ruling because it's kind of got appealed to the Supreme
Court and nobody knows it'll happen there.
Speaker 2 (03:51):
Yeah, I mean President Trump didcide this week that they're
going to ask the Supreme Court for an expedited ruling,
So we'll see. There.
Speaker 1 (03:58):
There's a pretty consistent situation where the president loses in
lower courts because the lower courts follow a precedent inside
this is illegal, and then he gets the Supreme Court,
and the Supreme Court is the more flexible you have precedents,
so they tend to let him duty once. So we'll see.
Speaker 2 (04:13):
We'll see. Anyway, the scope period this covers most of
President Trump's tariffs. There are some specific sections that he's
used which are a little bit more cumbersome.
Speaker 1 (04:22):
Yeah, Congress has a long history of delegating tariff power
to the president. There are specific statutes doing that, saying,
you know, for particular industries or for particular reasons you
can impose tariffs, and usually there's like an administrative process
where they have to like go through some sort of
review in fact finding before imposing tariffs. And so the
Trump administration has done a little of that, and that
stuff is fine. But most of their tariffs though, you
(04:44):
know what they call reciprocal tarffs tariffs, but whatever, most
of that is opposed with no kind of fact finding.
A review based on AIPA and IEPA pretty clearly doesn't
give them the power tom post tars.
Speaker 2 (04:57):
Yeah. Yeah, so the terrorists are saying in place. Now,
we'll see what the Supreme Court does. But it is
fun to game plan what would happen if the majority
of the tariffs had to be rolled back. I mean,
you think about where that would leave the US, first all,
when it comes to negotiating trade deals, et cetera. Obviously,
that would put the US in a worse position.
Speaker 1 (05:16):
Sort of, right, I mean, like it depends on what
you think is worse or better.
Speaker 2 (05:20):
Stick if you can't a stick to.
Speaker 1 (05:24):
Trade like we did, you know, a year.
Speaker 2 (05:25):
Ago, I don't think that that's necessarily the goal of this.
If they're trying to pursue you know, the world.
Speaker 1 (05:34):
You're trying to pursue no free trade. And by the way,
like there's still some you know, as you said, there's
other statutes that I give him some tariffing and frankly
there's you know, but those are the possibility of going
to Congress and asking for tarifs, like it's a Republican
controlled Congress and like you could imagine Trump saying tariffs
are good and getting Congress to fulfill its constitutional role
(05:55):
of passing terrors.
Speaker 2 (05:56):
Yeah. The problem that probably the Oval offices with all
of that is that would just take more time. It's
not as easy as sending a truth social.
Speaker 1 (06:03):
Posts of course, of course. Yeah, that's the problem that
the Oval Office is with it. Many people would say
it's good to have a rule of anyway.
Speaker 2 (06:11):
Anyway, we'll see what the Supreme Court does.
Speaker 1 (06:13):
Yeah, there's a lot of stuff. Like to me, like
the interesting gaming out what would happen is if they
agree with the lower courts that the tariffs are illegal,
does that make them refundable? Because you know they're in
place now. The government is collecting tens of billions of
dollars a month from Yeah, lots, you know, lots of
(06:33):
boats coming.
Speaker 2 (06:33):
In and thirty billion dollars in July.
Speaker 1 (06:36):
Actually, and like what happens if those tariffs are all illegal?
Do they have to pay them money back?
Speaker 2 (06:41):
Yeah, that's a good question, right, it seems very hard.
Speaker 1 (06:44):
And in fact I read about this on Thursday. There
are you can go to the prediction markets, you know,
to Calshier polymarket, and they give odds for the Supreme
Court upholding the tariffs, and then they're like fifty to fifty,
which seems right, right Court, But the odds of the
chans of the tariffs being refunded are lower than that.
They're lower than fifty to fifty because there's some sense
(07:05):
that even if the tariffs are illegal, it's like kind
of hard to unscramble that egg. And yeah, just say okay,
going forward, no more tariffs, but like you don't have
to refund them, yeah, if you do have to refund
them to be one of the really interesting questions is
if you are an importer who paid tariffs and you
somehow pass those tariffs along, right, like you charged your
(07:27):
customers or you like didn't explicitly charge them, but you
raised prices, Like do you have to refund them if
you're like just the company that raised prices to consumers
because of tariffs, and then like you got all the
tariffs back, Like, are consumer is going to be mad?
Are you going to have to refund them the money?
It's like an interesting tariff effect is like it is
hard to unscramble even if you refund the actual tariffs.
Speaker 2 (07:50):
Yeah, I mean you could say I've already raised my prices,
I might as well just keep them here.
Speaker 1 (07:55):
Oh yeah, yeah, yeah.
Speaker 2 (07:58):
It is interesting to think about some of that. There
was an interesting column from former New York Fed President
Bill Dudley on the Terminal sometime this week saying that,
you know, if you do game plan out this scenario,
the tariffstary, illegal, et cetera, what does that mean for companies?
His view is that companies are going to be slower
to pass on their cost increases if we do have
(08:19):
this wildly swinging pendulum. And what that means for the
Federal Reserve is a fun thought exercise. Is inflation transitory?
Once again, seems like a difficult environment to make policy in,
but probably not any more difficult than it is right now.
Speaker 1 (08:35):
I was going to say, there's a really distinct lack
of clarity on tireffs, both in terms of their legality
and in terms of what the negotiated rights will be. Yeah,
and I was going to say that at the Supreme
Court definitively rules that the AJEPA illegal, then you get
more clarity. But that's not really true, right, because then
they go back and use other statutes, and it's like
it just takes a more drawn out, more complicated process
(08:56):
with further legal challenges. And yeah, yeah myself, out of
that sounds it's all pretty grim.
Speaker 2 (09:02):
Yeah, it is pretty grim. It's also grim just for
the US government and the fiscal outlook sort of well,
Scott Vesson, Treasury Secretary Scott Besson has projected that tariffs
are supposed to bring in like five hundred billion dollars
in a year in annual income. They would have a
hole there.
Speaker 1 (09:21):
Yeah, But like the US fiscal outlook is a long
term outlook, and if you think as most economists still
seem to think that tariffs are bad for the US economy,
which is a separate from the legality question. But again,
most economists think that not Scott Bessant, not Donald Trump,
(09:43):
but most economists think that tariffs are not really helping
economic growth. If you think that, then getting rid of
the tariffs is good for fiscal sustainability, right because like
in the long run, right, like fiscal sustainability is driven
by like the economist's capacity rather than like the particular
text rate on. Yeah.
Speaker 2 (10:01):
Just in terms of though bringing down the budget deficit,
it does hurt there. This was part of the pillars
that US treasure Secretary Scott Best and put in place, Like, yeah,
plants have been built around this revenue coming in to
the government's coffers and taking that out would I don't know.
Speaker 1 (10:18):
Yeah, no, it's it's like super disruptive, yeah, right, Like
on the one hand, you could imagine a court somewhat
unconstrained by precedent on law saying it would be so
disruptive to the government to take away this thirty billion
dollars a month of revenue source that we're just gonna
benever backwards not to do it. It really is what
the constitution says, is said Congress system post taxes, Right,
(10:40):
it's a really important part of the constitutional structure. And
it's like, you know, there's hundreds of years of history
of like kings and executives in wanting to raise taxes,
and the only constraint on them being the legislature's power
to raise taxes. And so for the Supreme Court to say, eh,
it's like too important for the president to be able
to impost whatever taxes he wants. It's like really a
shocking change in the constitutional structure. But here we are.
Speaker 2 (11:03):
Maybe the government can make up what they're not making
a terror revenue from their stakes in US companies. Maybe
that's the future we're rattling towards.
Speaker 1 (11:13):
How did this get more depressing? It's true that the
Trump administration has found many new revenue sources, like owning
ten percent of Intel. This is a real tangent, But like,
I do think that one model that people have is that,
like the US government has a twenty percent stake in
every company because it taxes twenty percent of their earnings.
If you take an additional ten percent stake and Intel,
then that's like kind of an additional tax, but whatever,
(11:35):
that's not really a tax. It's fine, but right. I mean,
the other like truly novel revenue source that the Trump
administration has found, not for the government but for Trump
personally is cryptos shitandingg it and like you could probably
make thirty billion dollars a month telling US government crypto
that's true.
Speaker 2 (11:55):
I thought you were gonna bring up the revenue share
that has been floated with AMD in video, but that's
you know, the crypto she innigans is probably a much
more short thing. I don't think that the Trump family
is giving that.
Speaker 1 (12:07):
You like Intel and AMD and video.
Speaker 2 (12:10):
It's like we talked about this on the podcast.
Speaker 1 (12:13):
I don't write about it. It's not that fun. But
like these are all like voluntary taxating. They're like voluntary taxes, right,
they're like, yeah, Talald Trump goes to like in video
and it's like, hey, you give you ten percent of
your revenue? No, And they're like yes, no, well no
they I mean right, like they're thinking, no, I don't
want to give you ten percent of my revenue. But like, yeah,
you know there's like a certain like nice chip company here,
(12:35):
anything were to happen to it, right, Like if you
replaced the tariffs of voluntary tariffs, like how much revenue
would you collect? Like not none? Yeah, it's like voluntary
like nudge nudge.
Speaker 2 (12:45):
I don't know enough about a MD's situation to pine
on it too confidently, but at least in video Bloomberg
had an interview with Invidia CFO last week, and she
said something along the lines of, I haven't seen anything,
I haven't signed anything. We're not giving up fifteen percent
of our Chinese chip revenue yet, so I might be editorializing.
(13:10):
I don't know if she said it with that much passion.
Speaker 1 (13:14):
Happened to that Chinee.
Speaker 2 (13:16):
Well, I don't know even if Chinese companies are going
to be able to continue buying it. Apparently the Chinese
government reportedly has encouraged companies not to buy American chips.
But anyway, Charlie move long, what tickles your fancy to
(13:45):
talk about? Second? This week my old haunts Coldman Goldman.
I am excited to talk about this. This is a
weird one.
Speaker 1 (13:54):
Yeah, it's sort of. It's not that way, it's like
it seems weird. It's weird in detail, but like effectively,
every week on this podcast we talk about some sort
of deal where a big traditional asset manager is buying
like an alterative asset manager, like a private markets are
just partnering, or a private manager is buying a traditional
manager or a private manager and a traditional manager or
(14:15):
partnering to do like an ETF or whatever. And this
week it is Goldman partnering with Tierro Price and no
one's buying each other. Golden's buying a little too. Yeah,
they're buying a billion dollars of Tiro in the inn
open market.
Speaker 2 (14:29):
To be clear, The weird part, at least from where
I'm sitting, is that Goldman will make a series of
open market purchases to a mass up to three point
five percent of TIRO stock. That's as much as one
billion dollars. That would make them, I think, one of
the top five biggest shareholders in Tiro. Why do they
have to go through all that? Why can't they just
do a little jv A partnership.
Speaker 1 (14:48):
I don't know. We are in a moment where there's
a lot of momentum behind alts managers by alts managers,
I mean, you know KKR, Apollo, you know Blackstone. But also,
and I think we've talked about this on the pod
and I've certainly written about it, like Goldman is very much,
very much wants to be an altimage.
Speaker 2 (15:05):
We've talked about it, and you know.
Speaker 1 (15:07):
Look it is right, it like it runs alternative assets fun,
you know, it manages assets well.
Speaker 2 (15:12):
Didn't it use that to justify the pay packages for
David Suleman and John Waldron.
Speaker 1 (15:18):
Like, Goldman is an investment bank and it's also it
manages a lot of money for institutions that it invests
in alternative assets, and it's been a big business for
a long time. So it's not quite the same as
like KKR, but it's you know, it's like they think
that they can.
Speaker 2 (15:31):
Well I was going to ask who is the alts
manager in this scenario?
Speaker 1 (15:35):
And it's funny, right because like Tiro actually owns a
private credit manager. Yeah. Cool, But if you read the
press release in this deal, it's like it kind of
says we're bringing goldbn's ALTS assets to Tiro's retail and
retirement distribution. And then Okayill is like we're here too,
because I think how I read that? But right, so
(15:57):
Goldman is I think the alts manager here, and that
they do you know, they raise a lot of money
to invest in alts and you know they do that
from institutions and they do that from their private wealth clients. Yeah.
The story and private credit and private equity these days
is like trying to find like true retail distribution, trying
to sell through financial advisors and in particularly trying to
(16:19):
sell to fore own K plans. Yeah, And Tiro has
a lot of furrow and K business, and like they
do target dated funds for own case, right, And if
you can put private assets into target date funds, like
that's a no brainer, right, It's like it's exactly the
liquidity profile you want and you're selling alts assets to
your giant pool of retirement savers. Yeah. I mean Tiro
(16:40):
is like very much classic Like, Okay, they have some alts,
but like they're very much a classic traditional long only
activity manage mutual fund manager. And that is a tough business, right,
I mean the Bloomberg article about this tie up mentions
that Tiro has had like two hundred billion dollars of
client outflows. Yeah, their stock is down fifty from where
it wasn't twenty twenty one. It's a tough business to
(17:02):
beg in. And you know everyone in that business is
like looking around and me like, how can we get
into privates because the fees are better?
Speaker 2 (17:08):
Yeah, Well that's the thing. I guess. I'm surprised that
this search led them to Tiro, which isn't entirely fair.
The Bloomberg News article does also point out that two
thirds of Tiro's assets are in retirement funds. They're one
of the largest firms in that part of the market.
Speaker 1 (17:23):
Everyone in privates wants retail distribution. This gets back to
your question about why do they have to buy three
point five?
Speaker 2 (17:30):
Yeah, is it just because the stock was on sale?
Speaker 1 (17:33):
To your point, I think it's the stock was on self.
But I think a lot of it is like if
you're Tiro, you know, you're like every alt manager wants
to distribute through every four O, one K channel, and
we want a real partnership with Goldlan rather than just
like letting them stuff their funds into our clients. Right,
(17:54):
And what does a real partnership mean. Well, I think
it means like giving Golden some incentive of to have,
you know, some upside in Tiro stock, so that Golvin
has some incentives.
Speaker 2 (18:03):
To actually skin in the game.
Speaker 1 (18:05):
Yeah. Actually, you know, not just like used to as
a dumping ground for its products, but like try to
you know, be a real partnership.
Speaker 2 (18:12):
Yeah.
Speaker 1 (18:12):
I think that's like it makes sense to say you
should buy some stock.
Speaker 2 (18:15):
Yeah. It is interesting because I mean you think about
some of the other partnerships that we've talked about on
this show. You have Vanguard and Wellington with Blackstone that's
just partnering on fun. State Street has partnered with Apollo.
Speaker 1 (18:28):
Like Van Garden. State Street are not in the same
position as like the traditional active management firms Wellington. Well, yeah,
come on, I was saying, yeah, yeah, right, I mean,
like I think of it as like the investment world
now is like focused on alts and index ones, and
if you're a traditional active manager, it's really hard. And
(18:52):
so you can get into indexing, but that's like you
know that stuff, isn't it get into Yeah, and so
you get into get adults.
Speaker 2 (18:58):
Yeah, I'm interested to see how this turns out, to
see this sort of transaction to.
Speaker 1 (19:03):
Call my eye, deal contingent hedges.
Speaker 2 (19:20):
Are we only talking about currency hudges here?
Speaker 1 (19:23):
You can do deal contingent rates hudges?
Speaker 2 (19:25):
Okay, yeah, spiritually similar, It's possible.
Speaker 1 (19:28):
That someone somewhere has done a deal contingent oil hedge.
Yeah maybe, yeah, but no, I mean it's mostly currency
and occasionally rate. So like you're a company, you're buying
another company.
Speaker 2 (19:40):
I'm a business man.
Speaker 1 (19:43):
You buy another company, you sign a deal to buy
the company, and it's closing in like six months, and
if it's in a foreign country, you might have to
get a lot of foreign currency and you want to
lock in your currency rate today, but if the deal
doesn't close, you don't want to have liability for that currency.
Similarly like you might lock in your bar in cost today, right,
like you might hedge with treasuries to hadge your you know,
(20:04):
interest rates in some months, but if the deal doesn't closed,
you don't need that interest rate hedge anymore. And so
there's a long time banking product of deal contingent hedges
where you go to your investment bank that did the
merger for you and you say, I would like to
hedge my currency risk or my rates risk or whatever,
but I want to lock in my rates today, and
if the deal doesn't close, I want to tear up
the contract to not owe you anything, right, and for
(20:26):
some price, the bank will do that. And historically this
was like what banks did, right. Banks had big balance sheets,
and they were good at pricing complicated risks, and they
were in a client service business, so you know, as
their merger client, if you wanted that sort of hedge,
that was a nice thing for them to sell you, right,
help them win merger business. And it's also very risky
(20:49):
because like it's easy to do a foreign currency hedge right,
like you you know, just buy the right delta in
the spot link.
Speaker 2 (20:54):
I could do that right now, right.
Speaker 1 (20:56):
But like a foreign currency hedge that is torn up
when a deal falls apart is very difficult to hedge.
And banks sometimes get it wrong or get surprised by
deals falling apart and lose you one hundred million dollars
on a deal. And so there've been a series of
IFI articles, like International Financing Review articles about how hedge
funds are getting into the deal contention hedge business, where
(21:18):
you know, there's an article last year that I read
about where basically a number of banks will do these
deals with their clients, like they'll do a deal with
a corporate client saying, well, you know, hedge your foreign
currency risk and tear it up if the deal falls apart,
and then they'll go to a big hedge fund and
buy the offsetting trade, and the hedge fund will price
the merger risk and give them the trade, and the
bank will collect a little fee for setting up the deal,
(21:40):
but the hedge fund will take the risk. Right, And
I thought of this is like an interesting story about
how like banks don't have the risk appetite and balance
sheet that they used to, and like the big hedge
funds are becoming that the source of risk capital. But
then this last month there's an IFI article about how
the hedge funds are taking the next logical step and
(22:01):
just going directly to the clients and saying, hey, we'll
do the hedge for you. You don't need to go to
your bank at all.
Speaker 2 (22:05):
Yeah.
Speaker 1 (22:06):
One, then that's interesting. You know, when I was a banker,
like I thought of like bankers as covering companies, large
corporate right, I did deals, But increasingly the main client
of investment banking is private equity, right, Like a lot
of deals are done by private equity, and so particularly
deal contentionent hedges. It's a lot of private equity firms
(22:27):
saying we're going to buy this foreign company, the deal's
going to close in sixty nine months, we want to
have your currency arrest today, and we're interested in structure,
so we're happy to do a deal contentionent hedge. And
the good and bad thing with private equity firms as
a client for a bank is like there's like twelve
of them and stuff of thousands.
Speaker 2 (22:43):
Yeah.
Speaker 1 (22:44):
And so if you're a hedge fund and banks are
constantly coming to you to do deal contentionent hedges and
they're all for like three private equity firms, You're like,
why do not I just call those three private equity
firms myself? Why do I need the bank at all? Right? Like,
if banks have thousands of corporate clients, like they're client
relationships are important and hard to replicate, right, HAG fund
is not going to get into that business. But if
(23:05):
they have like twelve private equity clients, you could do that.
You can cover twelve.
Speaker 2 (23:09):
My first thought reading this was wouldn't it be inefficient to,
you know, try to take a guess of which of
the private equity clients are bound to do cross border deal?
Speaker 1 (23:19):
But putting it like you no, right, because like they've
done the deals right, Like yeah, Like, if you do
a deal contingent heads like regardless of whether the bank
tells you who's on the other side of it, like
it's continuent on a particular merger, so you can tell
who's doing the merger, right, Yeah, And if you do
three deals for one private equity firm, You're like, hey,
I should get to know that.
Speaker 2 (23:37):
Yeah, so I understand I can put myself in the
shoes of the banks being upset about this. I can
put myself in the shoes of the hedge funds who
are doing this. But I think it's also interesting to
think about the private equity firms. And the article does
ask the question should it really matter to the client
who is the back ends? And it raises good points
(23:57):
that you know, you could get worried about the possibility
of leaks surrounding M and A. There's potential conflicts of
interest here. It'd be interesting to hear from the perspective
of the private equity clients how they feel about this.
Speaker 1 (24:09):
Yeah. I always assume you could do these hedges the
day after you sign the deal rather than the day before.
Maybe that's wrong, but like if you do the day after,
you don't have to car about leaks. Yeah, I guess
you'd worry about credit. Like the nice thing of doing
this trade with like a big bank is like you're
facing the big bank and they probably went to Faull,
Whereas if you're facing a hedge fund, you.
Speaker 2 (24:25):
Have to have some counterparty, yes.
Speaker 1 (24:28):
Some diligence on how well the hedge fund is, But
I don't know. If I were a big private equity firm,
I would find it cool to like diversify my pool
of counterparties and like decent deals with DJA or whatever
instead of with a bank. Yeah.
Speaker 2 (24:41):
Well that's actually all I have to say. I guess
there's more deals happening, so this will.
Speaker 1 (24:47):
I always thought this is like a really niche, like
unusual business, and now it's like a thing. It's weird,
but uh, yeah, the smart deal's happening. Yeah, sort of.
There's no private equity actual acquisition, so that's true.
Speaker 2 (24:58):
Though apparently August was the best month for deal making
since twenty twenty one or something along those lines.
Speaker 1 (25:04):
Yeah, good news, we're back.
Speaker 2 (25:07):
We're back.
Speaker 1 (25:11):
And that was the Money Stuff Podcast.
Speaker 2 (25:13):
I'm Matt Levian and I'm Katie Greifeld.
Speaker 1 (25:15):
You can find my work by subscribing to the Money
Stuff newsletter on Bloomberg dot com, and.
Speaker 2 (25:20):
You can find me on Bloomberg TV every day on
the close between three and five pm Eastern.
Speaker 1 (25:26):
We'd love to hear from you. You can send an
email to money Pod at Bloomberg dot net. Ask us
a question and we might answer it on air.
Speaker 2 (25:32):
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 (25:38):
The Money Stuff Podcast is produced by Anna Maserakus and
Moses Onda and Special Thanks this week with Julia Press.
Speaker 2 (25:44):
Our theme music was composed by Blake Maples and Stage
Bauman is Bloomberg's head of podcasts.
Speaker 1 (25:49):
Thanks for listening to The Money Stuff Podcast. We'll be
back next week with more stuff
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