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The real app performance has been in US corporate high yield.

The real app performance has been in US corporate high yield.

Are the companies lean enough? Have they trimmed all the fats?

Are the companies lean enough? Have they trimmed all the fats?

The semiconductor business is a really cyclical business.

The semiconductor business is a really cyclical business.

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Breaking market headlines and corporate news from across the globe.

Do investors like the M and A that we've seen?

Do investors like the M and A that we've seen?

These are two big time blue chip companies.

These are two big time blue chip companies.

The window between the peak and cut changing super fast.

The window between the peak and cut changing super fast.

Bloomberg Intelligence with Alex Steel and Paul Sweeney on Bloomberg Radio.

Bloomberg Intelligence with Alex Steel and Paul Sweeney on Bloomberg Radio.

I'm Paul Sweeney and I'm John Tucker filling in for Alex Steele.

I'm Paul Sweeney and I'm John Tucker filling in for Alex Steele.

On today's Bloomberg Intelligence Show. We dig inside the big business stories impacting Wall Street and the global markets.

On today's Bloomberg Intelligence Show. We dig inside the big business stories impacting Wall Street and the global markets.

Each and every week we provide in depth research and data on some of the two thousand companies at one hundred and thirty industries our analysts cover worldwide.

Each and every week we provide in depth research and data on some of the two thousand companies at one hundred and thirty industries our analysts cover worldwide.

Today, we'll look at why the athletic perrol retailer Lululemon raised his profit outlook for the full year.

Today, we'll look at why the athletic perrol retailer Lululemon raised his profit outlook for the full year.

Plus, We're going to discuss where we are in the US with developing the carbon market, but.

Plus, We're going to discuss where we are in the US with developing the carbon market, but.

First we dive into information technology. HPE reported better than expected second quarter revenue this week.

First we dive into information technology. HPE reported better than expected second quarter revenue this week.

The results were fueled by sales of servers built for artificial intelligence work for more.

The results were fueled by sales of servers built for artificial intelligence work for more.

Co hosts Alex Steele and I were joined by wou Jinho, Bloomberg Intelligence senior technology analysts. We first asked him for his key takeaways from HPE's earnings.

Co hosts Alex Steele and I were joined by wou Jinho, Bloomberg Intelligence senior technology analysts. We first asked him for his key takeaways from HPE's earnings.

I will tell you I don't think many people gave heughlet Packard the benefit of the doubt in terms of the AI server story. We saw that in the multiple relative to Dell, HPE had a multiple less than eight. Dell, even with the pullback, was at seventeen. So you know they delivered on the story. AI servers doubled on a sequential basis, and it seems as if the momentum could be carried through into the second half of the year.

I will tell you I don't think many people gave heughlet Packard the benefit of the doubt in terms of the AI server story. We saw that in the multiple relative to Dell, HPE had a multiple less than eight. Dell, even with the pullback, was at seventeen. So you know they delivered on the story. AI servers doubled on a sequential basis, and it seems as if the momentum could be carried through into the second half of the year.

And Woods reading your react note, which is a great part of BI folks, You know of a big piece of news hits, you want to know what the bi analysts are thinking, and they get out with what they call or react a quick thought on a big piece of news. And your react Wood in your research note said, maybe they didn't take this revenue beat far enough in their in their guidance going forward, tell us about that.

And Woods reading your react note, which is a great part of BI folks, You know of a big piece of news hits, you want to know what the bi analysts are thinking, and they get out with what they call or react a quick thought on a big piece of news. And your react Wood in your research note said, maybe they didn't take this revenue beat far enough in their in their guidance going forward, tell us about that.

Yeah, so if we think about the magnitude of the beat, it was about four hundred million dollars in the quarter. They only raise the guidance for about by about three hundred million, So something doesn't tie here. A couple of things I think may have happened was probably networking maybe coming in a little bit lighter in the second half, which is becoming a drag on the second half growth, and that was somewhat to be expected. The one thing I will say, and similar to what I said in Dell, is that there might be still some conservatism as it relates to the AI server sales going into the second half of the year. Part of it. They addressed it on the call. There's some constraints in terms of the data centers where they can put start putting these AI servers. And this is something new, and I think this is going to be a bigger thing, a bigger deal going into twenty twenty five. Are there enough data centers that can really support these AI service going forward?

Yeah, so if we think about the magnitude of the beat, it was about four hundred million dollars in the quarter. They only raise the guidance for about by about three hundred million, So something doesn't tie here. A couple of things I think may have happened was probably networking maybe coming in a little bit lighter in the second half, which is becoming a drag on the second half growth, and that was somewhat to be expected. The one thing I will say, and similar to what I said in Dell, is that there might be still some conservatism as it relates to the AI server sales going into the second half of the year. Part of it. They addressed it on the call. There's some constraints in terms of the data centers where they can put start putting these AI servers. And this is something new, and I think this is going to be a bigger thing, a bigger deal going into twenty twenty five. Are there enough data centers that can really support these AI service going forward?

Will there be?

Will there be?

I say yes, the cloud guys as well as enterprise guys will will eventually figure it out, but it takes time to build these out.

I say yes, the cloud guys as well as enterprise guys will will eventually figure it out, but it takes time to build these out.

Where do you think HPE should trade relative to Dell?

Where do you think HPE should trade relative to Dell?

You know going forward, Well, there is a leverage issue here in terms of the debt that they're taking on the pending Juniper deal, they are going to be taking on more debt, which is going to anchor the valuation just a bit. Dell has a more favorable capital structure which helps quite a bit. But I will tell you if the AI story really starts to take off relative to someone like a Delaware, a super Micro, we could start seeing multiples rise a little bit more.

You know going forward, Well, there is a leverage issue here in terms of the debt that they're taking on the pending Juniper deal, they are going to be taking on more debt, which is going to anchor the valuation just a bit. Dell has a more favorable capital structure which helps quite a bit. But I will tell you if the AI story really starts to take off relative to someone like a Delaware, a super Micro, we could start seeing multiples rise a little bit more.

This might be a super silly question, but as someone who has to like input all of these earnings for software and for services and enterprise when it comes to AI, who is a legit competitor with Hpe? Is it just Dell? Are there smaller guys out there that do something similar?

This might be a super silly question, but as someone who has to like input all of these earnings for software and for services and enterprise when it comes to AI, who is a legit competitor with Hpe? Is it just Dell? Are there smaller guys out there that do something similar?

I'll tell you that that's an excellent question. Right. So the three pulicly trade names that compete hut to head with Dell are super Micro, Dell, Hpe, and Lenovo. Right, But what we heard from a copy text out of Taiwan and video striking deals with these white box manufacturers, like like a fox cod or a Quanta to directly build these AI servers for these clouds. So you are going to start seeing heightened competition in the landscape.

I'll tell you that that's an excellent question. Right. So the three pulicly trade names that compete hut to head with Dell are super Micro, Dell, Hpe, and Lenovo. Right, But what we heard from a copy text out of Taiwan and video striking deals with these white box manufacturers, like like a fox cod or a Quanta to directly build these AI servers for these clouds. So you are going to start seeing heightened competition in the landscape.

So you know, HPE is this it? I mean in the sense that can we sit back and say, I think these guys have it. They have an AI product in their product lineup, and these guys can, in fact, in the long term be players in this business.

So you know, HPE is this it? I mean in the sense that can we sit back and say, I think these guys have it. They have an AI product in their product lineup, and these guys can, in fact, in the long term be players in this business.

So I think there's just been a The narrative on HPE has been a little bit off for quite some time now. We have to keep in mind that they've been in a super computing game for quite a few years. After the acquisition of Kray, now a couple of things on the traditional service side, they didn't have the product lineup to compete against like a super Micro and Dell. But we're still in the early innings. And one thing that I will tell you they are going to have their discovered conference and schedule to be on stage is the CEO of Nvidia, and that should really help prop up the product narrative on the AI server side. Look, we're still in the early innings, second, third, fourth, fifth inning. HPE is going to be in the center of this.

So I think there's just been a The narrative on HPE has been a little bit off for quite some time now. We have to keep in mind that they've been in a super computing game for quite a few years. After the acquisition of Kray, now a couple of things on the traditional service side, they didn't have the product lineup to compete against like a super Micro and Dell. But we're still in the early innings. And one thing that I will tell you they are going to have their discovered conference and schedule to be on stage is the CEO of Nvidia, and that should really help prop up the product narrative on the AI server side. Look, we're still in the early innings, second, third, fourth, fifth inning. HPE is going to be in the center of this.

I am curious how does the first mover advantage thing play out? Like, if I'm a company, am I married to Dell? How easy is it for me to switch when Hpe kind of comes roaring?

I am curious how does the first mover advantage thing play out? Like, if I'm a company, am I married to Dell? How easy is it for me to switch when Hpe kind of comes roaring?

So I want to take it in a different way. Right, at the end of the day, it's a hardware, please. You know a laptop is a laptop is a laptop, right, you know my HP laptop is similar to a Dell laptop, and you know it depends on the bells and whistles. AI is actually going to be a different animal, especially for the corporate enterprise, and you're going to have to start wrapping around services around with the hardware itself. There are probably three companies that can actually do that, Lenovo, Dell, and Hpe, And you'll need the extensive services that can help not only supply the hardware, not only supply the maintenance and repair, but AI will need ex software expertise to help build out these AI models for these corporations. And you know there aren't many IT services companies that can do that.

So I want to take it in a different way. Right, at the end of the day, it's a hardware, please. You know a laptop is a laptop is a laptop, right, you know my HP laptop is similar to a Dell laptop, and you know it depends on the bells and whistles. AI is actually going to be a different animal, especially for the corporate enterprise, and you're going to have to start wrapping around services around with the hardware itself. There are probably three companies that can actually do that, Lenovo, Dell, and Hpe, And you'll need the extensive services that can help not only supply the hardware, not only supply the maintenance and repair, but AI will need ex software expertise to help build out these AI models for these corporations. And you know there aren't many IT services companies that can do that.

Hpe is one of them thanks to Wouji and Hull Bloomberg Intelligence Senior Technology Analyst.

Hpe is one of them thanks to Wouji and Hull Bloomberg Intelligence Senior Technology Analyst.

We next take a look at the Swedish Swiss company a.

We next take a look at the Swedish Swiss company a.

B b ABB is a technology leader in electrification and automation, enabling a more sustainable and resource efficient future.

B b ABB is a technology leader in electrification and automation, enabling a more sustainable and resource efficient future.

Guest host Jessman and I were joined by ABB chairman Peter Vasser. We first asked Peter where the focus this company is these days.

Guest host Jessman and I were joined by ABB chairman Peter Vasser. We first asked Peter where the focus this company is these days.

It's clearly it's the energy transition, which is not only the hard to abate tech betas, it's in general the move from a more fossile driven energy system into electric energy system and there we obviously contribute with our products and systems, which gives us energy savings between twenty and forty or even fifty percent. So that's one angle.

It's clearly it's the energy transition, which is not only the hard to abate tech betas, it's in general the move from a more fossile driven energy system into electric energy system and there we obviously contribute with our products and systems, which gives us energy savings between twenty and forty or even fifty percent. So that's one angle.

The other one is.

The other one is.

All linked to new technologies around automation and robotics, because we are world leading company in both areas, and that has to do with the reshuring, bringing things closer home again where the markets are, but also in some countries, dealing with the demographics because we have less and less people working in the working age, and therefore robotics and the automation becomes very important. And the last one is AI, which will revolutionize obviously all what's related to automation in the future.

All linked to new technologies around automation and robotics, because we are world leading company in both areas, and that has to do with the reshuring, bringing things closer home again where the markets are, but also in some countries, dealing with the demographics because we have less and less people working in the working age, and therefore robotics and the automation becomes very important. And the last one is AI, which will revolutionize obviously all what's related to automation in the future.

We'll talk to us more about what you think is the best way to try to scale manufacturing when it comes to the EVE charging space.

We'll talk to us more about what you think is the best way to try to scale manufacturing when it comes to the EVE charging space.

Think what we really need on the e moobility side. Let me put it this way, is really work on two fronts. One is a technical side on the charging side, but the other one is also on the user friendliness side, so that they become actually more reliable, they are much more modern. On the manufacturing side, I think we have had clearly in some countries and regions there was some scarcity of manufacturing capacity which I think have been sold. Was not an issue for ABB in that sense, but it's the product evolution which is.

Think what we really need on the e moobility side. Let me put it this way, is really work on two fronts. One is a technical side on the charging side, but the other one is also on the user friendliness side, so that they become actually more reliable, they are much more modern. On the manufacturing side, I think we have had clearly in some countries and regions there was some scarcity of manufacturing capacity which I think have been sold. Was not an issue for ABB in that sense, but it's the product evolution which is.

Very key now.

Very key now.

On the other side, I think one that should not forget that the whole network of electrification needs to be up to speed. You cannot just actually consume much more energy. You also need to build the transmission lines that the power actually comes in. Where we have got let's say the charge is installed either for a private passenger cars or for busses, ships, trains, whatever you want to call it. So I think we need much more infrastructure investments on the one side, and really really to actually get to EV charging and the passenger cars based on electrification much more developed in the future.

On the other side, I think one that should not forget that the whole network of electrification needs to be up to speed. You cannot just actually consume much more energy. You also need to build the transmission lines that the power actually comes in. Where we have got let's say the charge is installed either for a private passenger cars or for busses, ships, trains, whatever you want to call it. So I think we need much more infrastructure investments on the one side, and really really to actually get to EV charging and the passenger cars based on electrification much more developed in the future.

Peter, who are some of your bigger customers that you're working with these days.

Peter, who are some of your bigger customers that you're working with these days.

We are here in the United States, so we have all kinds of our manufacturing companies in that sense. But on the industrial side, any any company you can think of, which are they are in manufacturing space. For example, they use our actification products, they use our automation products. So you have all the industrial companies and that's where we make the difference. The other side, utilities are very key. As I just said, they need to make sure we have an off supply.

We are here in the United States, so we have all kinds of our manufacturing companies in that sense. But on the industrial side, any any company you can think of, which are they are in manufacturing space. For example, they use our actification products, they use our automation products. So you have all the industrial companies and that's where we make the difference. The other side, utilities are very key. As I just said, they need to make sure we have an off supply.

And I know I'm just looking at our PGeo function where I can see where your revenue comes by geography, you're everywhere. You see certain parts of the world that are more in front of you know, kind of making the transition then some others.

And I know I'm just looking at our PGeo function where I can see where your revenue comes by geography, you're everywhere. You see certain parts of the world that are more in front of you know, kind of making the transition then some others.

Yeah, I think I would say that Europe has started this rather early with the new Green Deal in Europe, but also moving into a very different energy systems paid some price with the wars in Russia, so energy prices have gone up and that some rethinking has taken place. I think here in the US you quite clearly see the demand is there in all industries now supported by the various acts you have here, either the Inflation Act or then also the Industrial Act, and that is driving investments now. It's much earlier days than in Europe for example. Aha is a little bit of mixed back, I have to say. So you see some countries at the leading edge, like smaller company countries like Singapore. In China, which is our second biggest market after the US, you see actually a lot of efforts now being put in place to change the electric system in in China, a lot of EV cards are coming in and you can see that those really are now generating the growth in China by city subdued compared to the US at this stage. So indeed, we are operating across the world in more than one hundred countries. We get good insights. At the moment, the driving forces are really the US and Europe, with let's say Asia apart from India are lacking somewhat.

Yeah, I think I would say that Europe has started this rather early with the new Green Deal in Europe, but also moving into a very different energy systems paid some price with the wars in Russia, so energy prices have gone up and that some rethinking has taken place. I think here in the US you quite clearly see the demand is there in all industries now supported by the various acts you have here, either the Inflation Act or then also the Industrial Act, and that is driving investments now. It's much earlier days than in Europe for example. Aha is a little bit of mixed back, I have to say. So you see some countries at the leading edge, like smaller company countries like Singapore. In China, which is our second biggest market after the US, you see actually a lot of efforts now being put in place to change the electric system in in China, a lot of EV cards are coming in and you can see that those really are now generating the growth in China by city subdued compared to the US at this stage. So indeed, we are operating across the world in more than one hundred countries. We get good insights. At the moment, the driving forces are really the US and Europe, with let's say Asia apart from India are lacking somewhat.

So where else do you go to expand from here? When you already are in so many places?

So where else do you go to expand from here? When you already are in so many places?

It's quite clearly US is our key number one market and that's where we have a developing We have over the last ten years, we have put more than fourteen billion dollars into the US in terms of investments. We have got forty manufacturing sites in twenty states. We're operating in all states with our services, et cetera. So that's a key market. We see the electrification market in the US as key, but the industrial one which has a lot to do with bringing home let's say, manufacturing capabilities and capacity. And then the second one is clearly India, which at the moment is in terms of growth outstripping all other countries in a big way. They are very low in manufacturing capacity and that's where a lot of investments now for the high end manufacturing goes in. And then the third one will be Europe quite clearly as the European change Indian energy system, but also the demographic issues which we have in Europe which will take out about fifty million kind of working people over the next ten years and that needs to be replaced by automation and robotics. So there's a lot of investments on going there.

It's quite clearly US is our key number one market and that's where we have a developing We have over the last ten years, we have put more than fourteen billion dollars into the US in terms of investments. We have got forty manufacturing sites in twenty states. We're operating in all states with our services, et cetera. So that's a key market. We see the electrification market in the US as key, but the industrial one which has a lot to do with bringing home let's say, manufacturing capabilities and capacity. And then the second one is clearly India, which at the moment is in terms of growth outstripping all other countries in a big way. They are very low in manufacturing capacity and that's where a lot of investments now for the high end manufacturing goes in. And then the third one will be Europe quite clearly as the European change Indian energy system, but also the demographic issues which we have in Europe which will take out about fifty million kind of working people over the next ten years and that needs to be replaced by automation and robotics. So there's a lot of investments on going there.

Thanks to Peter Vassar, chairman of ABB, coming.

Thanks to Peter Vassar, chairman of ABB, coming.

Up a look at new carbon offset guidelines from the US.

Up a look at new carbon offset guidelines from the US.

You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in research and data on two thousand companies and thirty industries. You can access Bloomberg Intelligence via big on the terminal.

You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in research and data on two thousand companies and thirty industries. You can access Bloomberg Intelligence via big on the terminal.

I'm Paul Sweeney, Mad, I'm John Tucker. This is Bloomberg.

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You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on AFFL car playing Enroud Auto with the Bloomberg Business app Listen on demand wherever you get your podcasts, or watch us live on YouTube.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on AFFL car playing Enroud Auto with the Bloomberg Business app Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Oh, Paul Sweeney Ant, I'm John Tucker, filling in for Alex Steele.

Oh, Paul Sweeney Ant, I'm John Tucker, filling in for Alex Steele.

We look next at the Canadian athletic apparel retailer Lululemon Athletica.

We look next at the Canadian athletic apparel retailer Lululemon Athletica.

Lulu Lemon raised its profit outlook for the full year while also beating market expectations for earnings in the first quarter, and this came despite investor concerns over the company's slowing sales growth.

Lulu Lemon raised its profit outlook for the full year while also beating market expectations for earnings in the first quarter, and this came despite investor concerns over the company's slowing sales growth.

For more, guest host John Tucker and I were joined by Punham Goyle, senior US retail analyst at Bloomberg Intelligence.

For more, guest host John Tucker and I were joined by Punham Goyle, senior US retail analyst at Bloomberg Intelligence.

We first danced Poonham for her key takeaways from Lululemon's earnings report.

We first danced Poonham for her key takeaways from Lululemon's earnings report.

So, I think the earnings are better than expected because while we do see slowing growth at Lululemon, where it's accelerating from the mid teams to low double digits near ten percent. There was concern that is that because of a slower macro and the fact that lul Lemon is losing out to competition Aloyoga, et cetera. We discovered that part of that is true, but part of that is not true, and I think that's why investors have a little more confidence.

So, I think the earnings are better than expected because while we do see slowing growth at Lululemon, where it's accelerating from the mid teams to low double digits near ten percent. There was concern that is that because of a slower macro and the fact that lul Lemon is losing out to competition Aloyoga, et cetera. We discovered that part of that is true, but part of that is not true, and I think that's why investors have a little more confidence.

How big is the US market for them? And are they selling overseas and how much?

How big is the US market for them? And are they selling overseas and how much?

Yeah, so the US market the America is eighty percent of their business. International is twenty percent, with China half of that.

Yeah, so the US market the America is eighty percent of their business. International is twenty percent, with China half of that.

And is demand picking up or slowing in China or is it new to the Lulu Lemon market.

And is demand picking up or slowing in China or is it new to the Lulu Lemon market.

So international was a bright spot this quarter. International sales grew about thirty five percent, and within that, China was up Mainland China was up forty five percent, So a lot of growth there. It's a bright spot for lul Lemon. International is part of their three pronged strategy to double sales into twenty twenty seven. It's been doing very, very well and we expect that to cont.

So international was a bright spot this quarter. International sales grew about thirty five percent, and within that, China was up Mainland China was up forty five percent, So a lot of growth there. It's a bright spot for lul Lemon. International is part of their three pronged strategy to double sales into twenty twenty seven. It's been doing very, very well and we expect that to cont.

And I'm looking at your research here, Poonam. You're talking about you know when you talk about that doubling sales to twelve and a half billion, you know by twenty twenty six the company and you're saying strong international growth. Okay, I get that men's growth. Talk thus about Lululemon and Men's I mean, it's just not John and I don't know where to go with this.

And I'm looking at your research here, Poonam. You're talking about you know when you talk about that doubling sales to twelve and a half billion, you know by twenty twenty six the company and you're saying strong international growth. Okay, I get that men's growth. Talk thus about Lululemon and Men's I mean, it's just not John and I don't know where to go with this.

Do real men go to Lululemon?

Do real men go to Lululemon?

Is what it's Real men are going to Lululemon. You know, it's one of their bright spots right now. And they actually think that Men's could become overtime. I think you'll say, take some time fifty percent of the business. So there's a lot of opportunity in men's. And you know when you walk those stores and I looked at the men's inventory, it actually looks great. It's not just about outfitting the men to go to the gym. It's about outfitting the men to go into work with casual, comfortable where that they can.

Is what it's Real men are going to Lululemon. You know, it's one of their bright spots right now. And they actually think that Men's could become overtime. I think you'll say, take some time fifty percent of the business. So there's a lot of opportunity in men's. And you know when you walk those stores and I looked at the men's inventory, it actually looks great. It's not just about outfitting the men to go to the gym. It's about outfitting the men to go into work with casual, comfortable where that they can.

Everybody who listens to this program of views is on YouTube knows Paul is the company fashion place. Yes, if you saw somebody in like Lululemon come into the office, might be a film.

Everybody who listens to this program of views is on YouTube knows Paul is the company fashion place. Yes, if you saw somebody in like Lululemon come into the office, might be a film.

It might be a problem. But I'm going to refer to to Punum because she knows fashion here and she knows what works. So if I'm Lulu Lemon, talk to us just about what they're saying about the consumer out there, Punham.

It might be a problem. But I'm going to refer to to Punum because she knows fashion here and she knows what works. So if I'm Lulu Lemon, talk to us just about what they're saying about the consumer out there, Punham.

So the consumer, We've been talking about this for a while now. The consumer is selective. They're choosing where to shop, when to shop, how to shop, and if they see the right product, they are still purchasing it. The one thing that struck out during the call was that traffic was up in the quarter, which means people are still going to lul Lemon. They still have purchase intent. But there were some product missteps which they're working to correct into the second half of the year, where they didn't have the right colors, or they didn't have enough colors I should say, they didn't have enough depth and sizes. They were running out of the small sizes. So these are problems that I would think are execution related and are being fixed and can be fixed into the back half. So while there is still part of a macro problem, the story isn't that Little Lemon people are not going to shop there. People still are interested in the apparel. They just have to fix the product a little and really improve our execution into the back half.

So the consumer, We've been talking about this for a while now. The consumer is selective. They're choosing where to shop, when to shop, how to shop, and if they see the right product, they are still purchasing it. The one thing that struck out during the call was that traffic was up in the quarter, which means people are still going to lul Lemon. They still have purchase intent. But there were some product missteps which they're working to correct into the second half of the year, where they didn't have the right colors, or they didn't have enough colors I should say, they didn't have enough depth and sizes. They were running out of the small sizes. So these are problems that I would think are execution related and are being fixed and can be fixed into the back half. So while there is still part of a macro problem, the story isn't that Little Lemon people are not going to shop there. People still are interested in the apparel. They just have to fix the product a little and really improve our execution into the back half.

They're known for form fitting, but just to get back to the men's fashion, they have anything for old fat guys.

They're known for form fitting, but just to get back to the men's fashion, they have anything for old fat guys.

Well. Their ABC men's franchise is really popular and it's not form fitting. It's about the casual flare and they have done very well there. And you don't need to wear a tight leggings for men's that's not the appeal there. That's for the women. But I'd say even for the woman, you know what worked really well in the corner where they're loose fitting pants and their biker shorts. So yes, leggings is a big business for them, but they are broadening that. Eight.

Well. Their ABC men's franchise is really popular and it's not form fitting. It's about the casual flare and they have done very well there. And you don't need to wear a tight leggings for men's that's not the appeal there. That's for the women. But I'd say even for the woman, you know what worked really well in the corner where they're loose fitting pants and their biker shorts. So yes, leggings is a big business for them, but they are broadening that. Eight.

Let's switch gears just a little bit. I saw it yesterday reporting in the Wall Street Journal Punium Dollar Tree is among the potential sales spin off of Family Dollar. What is going on with the dollar stores here? I would have thought that if a part of the consumer market is weak and the lower end economically, that perhaps that would be good for the dollar stores. But what's going on there?

Let's switch gears just a little bit. I saw it yesterday reporting in the Wall Street Journal Punium Dollar Tree is among the potential sales spin off of Family Dollar. What is going on with the dollar stores here? I would have thought that if a part of the consumer market is weak and the lower end economically, that perhaps that would be good for the dollar stores. But what's going on there?

So they're really two very different types of dollar stories. Gen Bartashus covers the space, but from my coverage every years ago, I can tell you that dollar Tree targets everyone, right. I would shop at Dollar Tree, Paul, You would shop a Dollar Tree. You buy that one twenty five item there and you go treasure hunt. But a family Dollar customer, that's their principal discount store. That is where they buy their groceries, that is where they buy their day to day needs. So as that customer's wallet is being stretched, that business does come into more pressure.

So they're really two very different types of dollar stories. Gen Bartashus covers the space, but from my coverage every years ago, I can tell you that dollar Tree targets everyone, right. I would shop at Dollar Tree, Paul, You would shop a Dollar Tree. You buy that one twenty five item there and you go treasure hunt. But a family Dollar customer, that's their principal discount store. That is where they buy their groceries, that is where they buy their day to day needs. So as that customer's wallet is being stretched, that business does come into more pressure.

Thanks to Pootamgoyle, senior US e commerce and retail analysts at Bloomberg Intelligence, we have.

Thanks to Pootamgoyle, senior US e commerce and retail analysts at Bloomberg Intelligence, we have.

Something here at Bloomberg called Bloomberg New Energy Finance. The idea behind it is to provide data on commodities, power, transport, industries, building and agriculture and new technology.

Something here at Bloomberg called Bloomberg New Energy Finance. The idea behind it is to provide data on commodities, power, transport, industries, building and agriculture and new technology.

And this week we looked at new carbon offset guidelines for the US. US government recently outlined seven key principles that US buyers and sellers should follow to responsibly take part in the voluntary carbon market.

And this week we looked at new carbon offset guidelines for the US. US government recently outlined seven key principles that US buyers and sellers should follow to responsibly take part in the voluntary carbon market.

For more on what they this means, guest host Jess Mettin and I we're joined by Kyle Harrison, head of sustainability research at bloomerk n EF. We first asked Kyle to talk to us about where we are in the developing carbon market.

For more on what they this means, guest host Jess Mettin and I we're joined by Kyle Harrison, head of sustainability research at bloomerk n EF. We first asked Kyle to talk to us about where we are in the developing carbon market.

So for several decades now, we've had what's called a voluntary carbon market. This is where companies can go and they can buy verified emission reduction certificates in order to achieve a for example, carbon neutrality goal where they're neutralizing their emissions, and so they'll go out and they'll buy these carbon credits. But the market has gotten a lot of criticism over the past couple of years for low integrity projects.

So for several decades now, we've had what's called a voluntary carbon market. This is where companies can go and they can buy verified emission reduction certificates in order to achieve a for example, carbon neutrality goal where they're neutralizing their emissions, and so they'll go out and they'll buy these carbon credits. But the market has gotten a lot of criticism over the past couple of years for low integrity projects.

So when a Hollywood sled flies on their private jet and say, oh, but I offset it with a carbon footprint, what does that mean.

So when a Hollywood sled flies on their private jet and say, oh, but I offset it with a carbon footprint, what does that mean.

So they're going out and they're buying these carbon credits, and they're investing in a project somewhere else in the world that is reducing or removing or avoiding carbon emissions. But the challenge has always been the integrity of those investments, right, It's been in projects that aren't necessarily leading to decarbonization. And so this market has gotten a lot of criticism. But there's been a lot of efforts from the privates actor specifically over the past couple of years to boost that integrity, and now they have support from the US government with this announcement last week.

So they're going out and they're buying these carbon credits, and they're investing in a project somewhere else in the world that is reducing or removing or avoiding carbon emissions. But the challenge has always been the integrity of those investments, right, It's been in projects that aren't necessarily leading to decarbonization. And so this market has gotten a lot of criticism. But there's been a lot of efforts from the privates actor specifically over the past couple of years to boost that integrity, and now they have support from the US government with this announcement last week.

So what happens next.

So what happens next.

So, as you guys mentioned, it's a big ringing endorsement for this market. What the US government did is it publicly supported a couple of initiatives, such as the Integrity Council on Voluntary Carbon Markets. This is a group of non governmental organizations as well as financial institutions and corporations that are working and creating their own standards for what a good quality carbon credit looks like if you follow that Integrity Council principle or that framework. As a corporate buyer, I know I can buy those credits and I'm not going to get accused of greenwashing, so I can fly those flights or I can continue to do business, but I can be relying on a tangible, impactful investment into decarbonization.

So, as you guys mentioned, it's a big ringing endorsement for this market. What the US government did is it publicly supported a couple of initiatives, such as the Integrity Council on Voluntary Carbon Markets. This is a group of non governmental organizations as well as financial institutions and corporations that are working and creating their own standards for what a good quality carbon credit looks like if you follow that Integrity Council principle or that framework. As a corporate buyer, I know I can buy those credits and I'm not going to get accused of greenwashing, so I can fly those flights or I can continue to do business, but I can be relying on a tangible, impactful investment into decarbonization.

You know, folks, the work coming out of BENF I think is absolutely the gold plate for this entire industry, and we rely upon these folks pretty heavily. Here's just some crazy numbers. Every company in the world will need carbon credits to achieve net zero goals, and you guys benef estimate annual carbon offset demand could reach five point nine billion tons of carbon equivalent annually in twenty fifty. That's some from one hundred and sixty four million today. What industries are going to be getting us there?

You know, folks, the work coming out of BENF I think is absolutely the gold plate for this entire industry, and we rely upon these folks pretty heavily. Here's just some crazy numbers. Every company in the world will need carbon credits to achieve net zero goals, and you guys benef estimate annual carbon offset demand could reach five point nine billion tons of carbon equivalent annually in twenty fifty. That's some from one hundred and sixty four million today. What industries are going to be getting us there?

For lack of a better word, as you mentioned, it's really every single industry. But really you can look at the heaviest emitting sectors as the biggest potential demand sources oil and gas companies, metals, and mining industrials. These are heavy emitting sectors that can't easily decarbonize. You mentioned airlines before. As an airline, how do you reduce your emissions? Do you stop flying planes? That's the most tangible way to go ahead and do that, right, And so carbon credits will be an important part of their decarbonization strategy long term. And as you mentioned, demand could reach six billion tons to give you a sense of scale, that's around ten percent of global carbon dioxide emissions today. So this will play a huge role in the global climate change or the global fight against climate change in the future.

For lack of a better word, as you mentioned, it's really every single industry. But really you can look at the heaviest emitting sectors as the biggest potential demand sources oil and gas companies, metals, and mining industrials. These are heavy emitting sectors that can't easily decarbonize. You mentioned airlines before. As an airline, how do you reduce your emissions? Do you stop flying planes? That's the most tangible way to go ahead and do that, right, And so carbon credits will be an important part of their decarbonization strategy long term. And as you mentioned, demand could reach six billion tons to give you a sense of scale, that's around ten percent of global carbon dioxide emissions today. So this will play a huge role in the global climate change or the global fight against climate change in the future.

So then every company in the world would need carbon credits to achieve net zero goals.

So then every company in the world would need carbon credits to achieve net zero goals.

This is how it works exactly, and so you can use this analogy with any company, but carbon credits typically should only be used as for those emissions or that itch that a company can't scratch. Once it's done everything it can to reduce what it physically emits as a company, it'll have what we call residual emissions somewhere along its value chain. That is your perfect universe for carbon credits. And the US government was very vocal about this in their announcement last week, is that companies shouldn't abandon their decarbonization efforts. They should prioritize those efforts, and then they should use carbon credits. But those must be reliable carbon credits. And so that's kind of where these credits play a role towards the end of that value chain.

This is how it works exactly, and so you can use this analogy with any company, but carbon credits typically should only be used as for those emissions or that itch that a company can't scratch. Once it's done everything it can to reduce what it physically emits as a company, it'll have what we call residual emissions somewhere along its value chain. That is your perfect universe for carbon credits. And the US government was very vocal about this in their announcement last week, is that companies shouldn't abandon their decarbonization efforts. They should prioritize those efforts, and then they should use carbon credits. But those must be reliable carbon credits. And so that's kind of where these credits play a role towards the end of that value chain.

All right, I'll tell you why this gets my attention, because it's got the intention of Michael R. Bloomberg, the founder of Bloomberg LP and this little radio TV station thing we got going here. He's out with an editorial really kind of calling out the Biden administration saying that this new plan might work and it's something we need to pay attention to. I mean, is this something that's at the whim of whatever administrations in the White House at the moment? Not necessarily.

All right, I'll tell you why this gets my attention, because it's got the intention of Michael R. Bloomberg, the founder of Bloomberg LP and this little radio TV station thing we got going here. He's out with an editorial really kind of calling out the Biden administration saying that this new plan might work and it's something we need to pay attention to. I mean, is this something that's at the whim of whatever administrations in the White House at the moment? Not necessarily.

As I mentioned, right, the private sector is going to be the biggest leader and kind of moving this forward and spearheading it. It has been financial institutions and corporations that have taken the reins and they will continue to do so. They will be the biggest demand source, but they need to be complemented by strong government support, right, and so this endorsement is hugely important, and it's you know, obviously it's the Department of Treasury, but it's also the Department of Energy. The Department of Energy will be subsidizing and investing in early stage carbon removal projects through this initiative. And then the Department of Agriculture was also involved and they're going to be going ahead and catalyzing and providing farmers with subsidies in order to pivot to low carbon farming. So it's really a kind of a combined effort that's going to be needed both from the government and the private sector. But even with an administration change, for example, if you still have corporations and financials focused, it'll still move this market.

As I mentioned, right, the private sector is going to be the biggest leader and kind of moving this forward and spearheading it. It has been financial institutions and corporations that have taken the reins and they will continue to do so. They will be the biggest demand source, but they need to be complemented by strong government support, right, and so this endorsement is hugely important, and it's you know, obviously it's the Department of Treasury, but it's also the Department of Energy. The Department of Energy will be subsidizing and investing in early stage carbon removal projects through this initiative. And then the Department of Agriculture was also involved and they're going to be going ahead and catalyzing and providing farmers with subsidies in order to pivot to low carbon farming. So it's really a kind of a combined effort that's going to be needed both from the government and the private sector. But even with an administration change, for example, if you still have corporations and financials focused, it'll still move this market.

We really have about a minute left, but talk to us about tech companies like Microsoft and their plans when it comes to being more active in carbon offsetting today and how they really think of where it could continue going into twenty fifty.

We really have about a minute left, but talk to us about tech companies like Microsoft and their plans when it comes to being more active in carbon offsetting today and how they really think of where it could continue going into twenty fifty.

Technology companies have always prided themselves on their ability to lead in the icebreakers when it comes to decarbonization. So tech companies like Microsoft and Google and Amazon, they were the first large scale corporations to buy clean energy from solar and wind projects for example, it's only natural that they're kind of the icebreakers when it comes to voluntary carbon markets. You're seeing companies like Microsoft announce huge carbon removal deals for these nascent technologies that maybe aren't necessarily at scale today, and they're also not competitive from a cost standpoint. What those investments will do is that they'll bring the cost down and it'll make it more attractive and competitive for all those other companies that are out there to invest in carbon removal and therefore this voluntary carbon market.

Technology companies have always prided themselves on their ability to lead in the icebreakers when it comes to decarbonization. So tech companies like Microsoft and Google and Amazon, they were the first large scale corporations to buy clean energy from solar and wind projects for example, it's only natural that they're kind of the icebreakers when it comes to voluntary carbon markets. You're seeing companies like Microsoft announce huge carbon removal deals for these nascent technologies that maybe aren't necessarily at scale today, and they're also not competitive from a cost standpoint. What those investments will do is that they'll bring the cost down and it'll make it more attractive and competitive for all those other companies that are out there to invest in carbon removal and therefore this voluntary carbon market.

Thanks tot Kyle Harrison, head of Sustainability research at Bloomberg an ef.

Thanks tot Kyle Harrison, head of Sustainability research at Bloomberg an ef.

Coming up of a program we're going to look at how former US Treasury Secretary Steve Manosan is chasing Wall Street glory.

Coming up of a program we're going to look at how former US Treasury Secretary Steve Manosan is chasing Wall Street glory.

You're listening to Bloomberg Intelligence on Bloomberg Radio, providing research and data on two thousand companies in one hundred and thirty industries. You can access Bloomberg Intelligence via b I go on the terminal. I'm Paul Sweeney.

You're listening to Bloomberg Intelligence on Bloomberg Radio, providing research and data on two thousand companies in one hundred and thirty industries. You can access Bloomberg Intelligence via b I go on the terminal. I'm Paul Sweeney.

MAA don John Tucker. This is Bloomberg.

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You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg eleven thirty.

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Hey there, I'm Paul.

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Sweeney and I'm John Tucker filling in for Alex Steele.

Sweeney and I'm John Tucker filling in for Alex Steele.

We move now to energy and Trafagora. Traffagora is one of the world's largest suppliers of commodities.

We move now to energy and Trafagora. Traffagora is one of the world's largest suppliers of commodities.

And this week the company posted the first half profits down seventy three percent from a year earlier. This comes as the commodity giant adjusted calmer conditions across it's key energy and metals Marcus For.

And this week the company posted the first half profits down seventy three percent from a year earlier. This comes as the commodity giant adjusted calmer conditions across it's key energy and metals Marcus For.

More on this guest host John Tucker and I were joined by Archie Hunter, Bloomberg Commodities reporter. We first asked Archie for his take on this week's earnings report.

More on this guest host John Tucker and I were joined by Archie Hunter, Bloomberg Commodities reporter. We first asked Archie for his take on this week's earnings report.

It's a big drop off, It's still a huge profit as far as the sector goes. Look the commodity trading industry is coming out of, and perhaps what the signals is the trading industry is coming out of like a real real boom time where COVID nineteen and then the sort of Russian invasion of Ukraine's really sort of super sized volatility, especially in the energy space, that's starting to peter out. You know, we're still getting big moves. I think you've seen some big moves on gas, but you know, it's really not as extreme as it was over the past few years. And as a result, you know, whilst this is a still really big number historically for a company like traffic Eura, you know, there's been a big drop off since this time last year.

It's a big drop off, It's still a huge profit as far as the sector goes. Look the commodity trading industry is coming out of, and perhaps what the signals is the trading industry is coming out of like a real real boom time where COVID nineteen and then the sort of Russian invasion of Ukraine's really sort of super sized volatility, especially in the energy space, that's starting to peter out. You know, we're still getting big moves. I think you've seen some big moves on gas, but you know, it's really not as extreme as it was over the past few years. And as a result, you know, whilst this is a still really big number historically for a company like traffic Eura, you know, there's been a big drop off since this time last year.

So I don't need to cry for commodities traders at this point.

So I don't need to cry for commodities traders at this point.

I don't know about that. Look, these companies have made extraordinary amounts of money over the past few years, especially the biggest companies, and and look, you know, one of the interesting things about them is that they're owned by the top executives who either trade or are part of middle office or back office.

I don't know about that. Look, these companies have made extraordinary amounts of money over the past few years, especially the biggest companies, and and look, you know, one of the interesting things about them is that they're owned by the top executives who either trade or are part of middle office or back office.

By the employees essentially, right.

By the employees essentially, right.

Yeah, exactly. So, Look, these companies have paid out big dividends, big share buybacks, to those shareholders over the past few years. They're still doing that, right. Look, traffic Eurer paid out I think was over six hundred million in the way that it reimburses its shareholders over the first half. So that's still a lot of a lot of money for the roughly one four hundred people, so relatively few people who hold stock in the company.

Yeah, exactly. So, Look, these companies have paid out big dividends, big share buybacks, to those shareholders over the past few years. They're still doing that, right. Look, traffic Eurer paid out I think was over six hundred million in the way that it reimburses its shareholders over the first half. So that's still a lot of a lot of money for the roughly one four hundred people, so relatively few people who hold stock in the company.

So if I'm one of the executives there and I've really cleaned up, I'm just going to pack up and go go live on an island somewhere, right.

So if I'm one of the executives there and I've really cleaned up, I'm just going to pack up and go go live on an island somewhere, right.

Yeah, I mean you and I might think that, but look, there's definitely some movement happening in the sector. At the same time. Look, view owned shares in these companies that seem to be doing really well every single year. I think, you know, from what we see, a lot of people seem to be sticking around as well, right, And look, it's still really interesting time to be trading commodities. I think what these results show is that, you know, whilst it's a big drop off from the last couple of years, like historically, you know, Trafficker would make in some of its best years before the pandemic, it would make maybe a billion a billion dollars would have been an absolutely mammoth year, some of its best years, and so you know, the company made that in half a year, which just goes to show, you know, you know, whilst it's not absolutely mammoth as we have seen, it's still very big and people are still making a lot of money.

Yeah, I mean you and I might think that, but look, there's definitely some movement happening in the sector. At the same time. Look, view owned shares in these companies that seem to be doing really well every single year. I think, you know, from what we see, a lot of people seem to be sticking around as well, right, And look, it's still really interesting time to be trading commodities. I think what these results show is that, you know, whilst it's a big drop off from the last couple of years, like historically, you know, Trafficker would make in some of its best years before the pandemic, it would make maybe a billion a billion dollars would have been an absolutely mammoth year, some of its best years, and so you know, the company made that in half a year, which just goes to show, you know, you know, whilst it's not absolutely mammoth as we have seen, it's still very big and people are still making a lot of money.

Archie, I don't know anything about this company, traffic Aer, primarily because it's a private company. A. Where is it based? And b why is it public?

Archie, I don't know anything about this company, traffic Aer, primarily because it's a private company. A. Where is it based? And b why is it public?

So Traffiicura is headquartered in Switzerland, but it's domstald in Singapore. A lot of these commodity trading companies are very global in their re but can be domiciled in various different jurisdictions. Why isn't it public? I think you know that that's been a question over the past few years. One is that you have to open yourself up to a bit more scrutiny. Like Trafficer has a bond, so it does publish it's you know, its numbers to the market. But I think you know, these these people have been doing very well only in the company themselves. Why would they need to raise more equity potentially? You know, they're still getting huge amounts of money in financing from banks, which is really the lifeblood of the trading industry, right. You know, companies can buy and sell huge cargoes of oil or copper on their own equity, but you know most of the time they do it through tapping major banks for financing lines.

So Traffiicura is headquartered in Switzerland, but it's domstald in Singapore. A lot of these commodity trading companies are very global in their re but can be domiciled in various different jurisdictions. Why isn't it public? I think you know that that's been a question over the past few years. One is that you have to open yourself up to a bit more scrutiny. Like Trafficer has a bond, so it does publish it's you know, its numbers to the market. But I think you know, these these people have been doing very well only in the company themselves. Why would they need to raise more equity potentially? You know, they're still getting huge amounts of money in financing from banks, which is really the lifeblood of the trading industry, right. You know, companies can buy and sell huge cargoes of oil or copper on their own equity, but you know most of the time they do it through tapping major banks for financing lines.

Now, who are their customers? Are their customers also the end users of these products, and certainly with the boom and commodity prices, I would imagine that they've been heard.

Now, who are their customers? Are their customers also the end users of these products, and certainly with the boom and commodity prices, I would imagine that they've been heard.

So look, Trafficer noted in it in its results that it had some clients that were struggling to deal with the higher the normal commodity prices. I think you've got to bear in mind that we might look on the on the Bloemoe terminal, we might see commodity prices denominated in dollars. Look, a lot of buyers, for example, of like oil products in emerging markets, aren't buying those commodities and dollars. They're buying them in their local currency. And the dollar is appreciated, as we know, quite a bit over the past a year or so, so you know, that's even more expensive, and I think that's what they're alluding to there. But look on the whole you can see that high prices have started to have an impact on demand in some commodities, or perhaps prices of as traffic Gura said, and its results, prices for copper overran fundamentals. So that's why I know you guys were talking a little bit about the becom. You know, copper has retreated a little bit over the past couple of weeks, in part because I think market analysts feel that it's sort of overrun the actual supply and demand dynamics.

So look, Trafficer noted in it in its results that it had some clients that were struggling to deal with the higher the normal commodity prices. I think you've got to bear in mind that we might look on the on the Bloemoe terminal, we might see commodity prices denominated in dollars. Look, a lot of buyers, for example, of like oil products in emerging markets, aren't buying those commodities and dollars. They're buying them in their local currency. And the dollar is appreciated, as we know, quite a bit over the past a year or so, so you know, that's even more expensive, and I think that's what they're alluding to there. But look on the whole you can see that high prices have started to have an impact on demand in some commodities, or perhaps prices of as traffic Gura said, and its results, prices for copper overran fundamentals. So that's why I know you guys were talking a little bit about the becom. You know, copper has retreated a little bit over the past couple of weeks, in part because I think market analysts feel that it's sort of overrun the actual supply and demand dynamics.

All right. Thanks to Archie Hunter, Commodities Reporter, we.

All right. Thanks to Archie Hunter, Commodities Reporter, we.

Now take a look at one of the Bloomberg Big Takes stories featured this week on Bloomberg Intelligence. It focuses on former Treasury Secretary Steveh Nuchin, who now leads the private equity firm Liberty Strategic Capital.

Now take a look at one of the Bloomberg Big Takes stories featured this week on Bloomberg Intelligence. It focuses on former Treasury Secretary Steveh Nuchin, who now leads the private equity firm Liberty Strategic Capital.

The Big Take piece is titled MANUSI Chases Wall Street Glory with war chest of foreign money.

The Big Take piece is titled MANUSI Chases Wall Street Glory with war chest of foreign money.

For more, guest host Jess Men and I were joined by the story's author, Max Abelson, Bloomberg News Finance reporter. We first asked Max for more context on his story.

For more, guest host Jess Men and I were joined by the story's author, Max Abelson, Bloomberg News Finance reporter. We first asked Max for more context on his story.

This is a story I think at its heart, it's really about ambition and what we write about in the story. Although I should say, I should say, mess my servant I write about it in this story is that you know what we saw eight years ago when when Zachmeider and I wrote that BusinessWeek profile of Mnuchins as Trump's moneyman, you were able to kind of get a snapshot of what it looks like when someone tries to take their Wall Street wealth and turn it into Washington power.

This is a story I think at its heart, it's really about ambition and what we write about in the story. Although I should say, I should say, mess my servant I write about it in this story is that you know what we saw eight years ago when when Zachmeider and I wrote that BusinessWeek profile of Mnuchins as Trump's moneyman, you were able to kind of get a snapshot of what it looks like when someone tries to take their Wall Street wealth and turn it into Washington power.

And he did that. He was successful.

And he did that. He was successful.

You know, people I think look down their nose at it. They thought they thought Trump's campaign was ridiculous when he when he agreed to do it, they were wrong. Manutia really saw something that other people missed, and Trump won, he became Treasury secretary. You kind of forget this, But people went in and out those four years. Manucha stayed. He kept his head down. And what this story is about is capturing him as he takes that Washington power that he accumulated and he turns it into even more money. And it's a story about scale. I mean, this guy was an investor beforehand. Now he's a big investor. He's got this big war chest of Middle East money. He's going for deals that could be kind of like, I don't know, it's a little silly to say world historic. But if this guy can pull off a deal for TikTok, it's going to send him into this echelon of You're gonna have to read the story to understand this, but you know, not just gorillas, but the senior gorillas of global finance.

You know, people I think look down their nose at it. They thought they thought Trump's campaign was ridiculous when he when he agreed to do it, they were wrong. Manutia really saw something that other people missed, and Trump won, he became Treasury secretary. You kind of forget this, But people went in and out those four years. Manucha stayed. He kept his head down. And what this story is about is capturing him as he takes that Washington power that he accumulated and he turns it into even more money. And it's a story about scale. I mean, this guy was an investor beforehand. Now he's a big investor. He's got this big war chest of Middle East money. He's going for deals that could be kind of like, I don't know, it's a little silly to say world historic. But if this guy can pull off a deal for TikTok, it's going to send him into this echelon of You're gonna have to read the story to understand this, but you know, not just gorillas, but the senior gorillas of global finance.

TikTok walk us through this about how that's associated with how when it comes to this war chest of wealth that he's been building.

TikTok walk us through this about how that's associated with how when it comes to this war chest of wealth that he's been building.

Yep, So let me take you back in time. So I think you and I spoke back in March, and New York Community Bank was I mean, it was mayhem. There was news that leaked that New York Community Bank really needed capital, and that is not good. If you're a bank, you do not want news out saying, you know, it'd be a nice to ray some cash. Unbeknownst to us at the time when that headline hit, Mnuchin and some partners were like basically a day away from investing in New York Community Bank, and they decided, you we still go forward, and they did. Of course that actually on paper, you know what their profits on that New York Community Bank deal, they have made a pretty penny at least on paper, Like basically doubling their money. But a few days after that deal closed, he goes on TV and he says, you know what, I'm putting together a deal to buy TikTok. I've got a plan. And it was weird for a couple of reasons. One because New York Community Bank made a lot of sense for Steven Mnuchin because he bought do you remember remember One West, Remember that bank deal he did. New York Community Bank makes sense in that like TikTok. On the other hand, you know, the guy invested in Hollywood. People forget about that muchin find out some serious blockbusters, including Avatar if you saw it. But you know, it's like why TikTok? And I think the way he sees it is according to interviews with people who aren't working on that deal with him, but no him, well, it's like he's got an edge and when it comes to national security matters, and don't forget TikTok is now by law, the Chinese parent companies essentially gonna have to sell it. So he thinks he's got an edge with national security and then also with deal making. On the other hand, his fund is like maybe three billion dollars or so it is going to take a lot more than that to buy TikTok here in the States. We're going to be watching to see if what kind of partners he can bring together and if he buys his first ever you know, social media empire.

Yep, So let me take you back in time. So I think you and I spoke back in March, and New York Community Bank was I mean, it was mayhem. There was news that leaked that New York Community Bank really needed capital, and that is not good. If you're a bank, you do not want news out saying, you know, it'd be a nice to ray some cash. Unbeknownst to us at the time when that headline hit, Mnuchin and some partners were like basically a day away from investing in New York Community Bank, and they decided, you we still go forward, and they did. Of course that actually on paper, you know what their profits on that New York Community Bank deal, they have made a pretty penny at least on paper, Like basically doubling their money. But a few days after that deal closed, he goes on TV and he says, you know what, I'm putting together a deal to buy TikTok. I've got a plan. And it was weird for a couple of reasons. One because New York Community Bank made a lot of sense for Steven Mnuchin because he bought do you remember remember One West, Remember that bank deal he did. New York Community Bank makes sense in that like TikTok. On the other hand, you know, the guy invested in Hollywood. People forget about that muchin find out some serious blockbusters, including Avatar if you saw it. But you know, it's like why TikTok? And I think the way he sees it is according to interviews with people who aren't working on that deal with him, but no him, well, it's like he's got an edge and when it comes to national security matters, and don't forget TikTok is now by law, the Chinese parent companies essentially gonna have to sell it. So he thinks he's got an edge with national security and then also with deal making. On the other hand, his fund is like maybe three billion dollars or so it is going to take a lot more than that to buy TikTok here in the States. We're going to be watching to see if what kind of partners he can bring together and if he buys his first ever you know, social media empire.

All right, I senior reporting Max, Mister Mnutchen made about thirty visits to the Middle Eastern nations while in office. That's around as many as is European and Asian visits combined. So we spent a lot of time there when in office. Is that getting translating into some investors in his fund?

All right, I senior reporting Max, Mister Mnutchen made about thirty visits to the Middle Eastern nations while in office. That's around as many as is European and Asian visits combined. So we spent a lot of time there when in office. Is that getting translating into some investors in his fund?

I think I think that's really a key question. So out of fairness, I just want to cite his spokesperson, a guy by the of Devon O'Malley, who liked to say to me while I was reporting the story that those thirty visits, according to him, are like different legs of just nine trips to a region that he describes as is like, you know, highly strategically important. O'Malley would say that Nusian was advancing US foreign policy economic interests, not going to collect money. But I think as a matter of historical record, you can see Mnusian going to the United Arab Emirates. You could see him going to Cutter, you can see him going to Saudi Arabia. And you know, I'm talking about not just at his time at when he was Treasury secretary, but certainly in the months after that. And what does he end up with. He ends up with a fund, as I say, about three billion dollars, and a lot of that money is coming from the Middle East. These are essentially the deepest pockets in the world, the sovereign wealth funds essentially. And you know, if you're an investor, that means that you get to play with some pretty fun money. He's gonna need some more money than that if he wants to do TikTok, but it means that it's turned him into a essentially a private equity investor on a really big scale.

I think I think that's really a key question. So out of fairness, I just want to cite his spokesperson, a guy by the of Devon O'Malley, who liked to say to me while I was reporting the story that those thirty visits, according to him, are like different legs of just nine trips to a region that he describes as is like, you know, highly strategically important. O'Malley would say that Nusian was advancing US foreign policy economic interests, not going to collect money. But I think as a matter of historical record, you can see Mnusian going to the United Arab Emirates. You could see him going to Cutter, you can see him going to Saudi Arabia. And you know, I'm talking about not just at his time at when he was Treasury secretary, but certainly in the months after that. And what does he end up with. He ends up with a fund, as I say, about three billion dollars, and a lot of that money is coming from the Middle East. These are essentially the deepest pockets in the world, the sovereign wealth funds essentially. And you know, if you're an investor, that means that you get to play with some pretty fun money. He's gonna need some more money than that if he wants to do TikTok, but it means that it's turned him into a essentially a private equity investor on a really big scale.

Where else does he have his eyes on next beyond TikTok?

Where else does he have his eyes on next beyond TikTok?

Well?

Well?

I had some fun reporting on the story. Not as much fun as that famous picture of him holding up the cash.

I had some fun reporting on the story. Not as much fun as that famous picture of him holding up the cash.

I feel like we all remember that photo of the cash that it.

I feel like we all remember that photo of the cash that it.

Was more fun. But I had fun looking at cybersecurity. Not only did Liberty take over an entire cybersecurity company. Rather, it's a mobile security platform. It's called Simperium. I don't know if you've heard of that. But he has plowed money into cyber Reason, Contrast Security, Blue Voyant, and these are some interesting cybersecurity startups, and I want to tell you not all of them have been a pretty picture. Liberty about twenty million shares of satell Logic for like seven fifty each. You know, back in twenty twenty two was below a dollar twenty the last time I checked. And then there's cyber Reason that was supposed to be worth like billions of dollars when he made his investment. The valuation now is said to be like three hundred million dollars. You do not want that order, you know, you're supposed to invest when it's worth three hundred million dollars and then sell when it's worth billions. So manuchen is you know, it's been really fun sort of take me a snapshot of ambition.

Was more fun. But I had fun looking at cybersecurity. Not only did Liberty take over an entire cybersecurity company. Rather, it's a mobile security platform. It's called Simperium. I don't know if you've heard of that. But he has plowed money into cyber Reason, Contrast Security, Blue Voyant, and these are some interesting cybersecurity startups, and I want to tell you not all of them have been a pretty picture. Liberty about twenty million shares of satell Logic for like seven fifty each. You know, back in twenty twenty two was below a dollar twenty the last time I checked. And then there's cyber Reason that was supposed to be worth like billions of dollars when he made his investment. The valuation now is said to be like three hundred million dollars. You do not want that order, you know, you're supposed to invest when it's worth three hundred million dollars and then sell when it's worth billions. So manuchen is you know, it's been really fun sort of take me a snapshot of ambition.

But I want to be clear with you.

But I want to be clear with you.

It's not a story of like these waltzing into becoming a multi billionaire. It's going to be much more interesting and a little bit more up and down than that.

It's not a story of like these waltzing into becoming a multi billionaire. It's going to be much more interesting and a little bit more up and down than that.

Is he in it just for the money, or does he want to be thought of in the same sense as Julian Robertson at George Soros as some of those big legendary names.

Is he in it just for the money, or does he want to be thought of in the same sense as Julian Robertson at George Soros as some of those big legendary names.

Thank you for asking that, you know his old boss at Omen Sachs. John Corzine said to me, look, Max, money's nice. I get it, I get it, but it's more than that. I was actually kind of moved by something John Corzin said to me, because don't forget Corsin after running Goldman. Yeah, I mean I think I believe you're a New Jersey or one one of you two live in New Jersey. They're both right. You know, Corzine managed to do the same thing. He went from finance into government and he was successful. He was a senator, he's a governor. Corzine said that there's this feeling of being important and being at that table. Once you're at that table of global influence, it is really hard to leave it. Corsiin said to me, you know, this whole quote didn't make it into the story, but he said, you know, some people are programmed that they leave that table of global importance and global influence and they're able to go do something else. You know, It's like I like gardening on weekends. You know and some people some people want more influence and want more opportunity and want to be more engaged and can't disengage. And I think that helps explain Stephen MANUCI.