Bloomberg Audio Studios, Podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecarplaying Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

Bloomberg Audio Studios, Podcasts, radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at ten am Eastern on applecarplaying Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts, or watch us live on YouTube.

All right, Good Wednesday morning from Bloomberg INTERACTI Broker Studio in New York City to our worldwide audience. We've got Bailly the Lipsholtz sitting in for Alex Steele. We're broadcasting live from the Bloomberg Interactive Broker Studio. We're doing the streaming thing on the intro web, so I think it's YouTube dot com. You go over there and you search Bloomberg Podcast and that's where you find. It's big news today for a good head of friends of Robin Hood. Markets stocks up three point six percent today. The company unveiling a credit card. I need more credit cards.

All right, Good Wednesday morning from Bloomberg INTERACTI Broker Studio in New York City to our worldwide audience. We've got Bailly the Lipsholtz sitting in for Alex Steele. We're broadcasting live from the Bloomberg Interactive Broker Studio. We're doing the streaming thing on the intro web, so I think it's YouTube dot com. You go over there and you search Bloomberg Podcast and that's where you find. It's big news today for a good head of friends of Robin Hood. Markets stocks up three point six percent today. The company unveiling a credit card. I need more credit cards.

Look at the stock here. Obviously I'm a Wall Street guy. All I care about is the stock.

Look at the stock here. Obviously I'm a Wall Street guy. All I care about is the stock.

Stock's a fifty six percent year to date wow, trailing twelve months up one hundred and thirty two since it's got a seventeen and a half billion dollar market cap so big news coming out of our friends of Robinhood. Lat Ten of joins us. He's a chief executive officer. He's a co founder Robinhood. He joined us here in a Bloomberg interactive broker studio. I'm not on the robin Hood platform because I'm a gentleman.

Stock's a fifty six percent year to date wow, trailing twelve months up one hundred and thirty two since it's got a seventeen and a half billion dollar market cap so big news coming out of our friends of Robinhood. Lat Ten of joins us. He's a chief executive officer. He's a co founder Robinhood. He joined us here in a Bloomberg interactive broker studio. I'm not on the robin Hood platform because I'm a gentleman.

I need the.

I need the.

Swiss bank secrecy laws protecting me. But my twenty eight year old twins, who are the future of this thing, they are on Robinhoo. They're very happy. They were psyched that I was talking to Vlad. Talk to us about your news today. You're not just a commission free platform, which is in and of itself amazing, but you're now getting to the credit card business.

Swiss bank secrecy laws protecting me. But my twenty eight year old twins, who are the future of this thing, they are on Robinhoo. They're very happy. They were psyched that I was talking to Vlad. Talk to us about your news today. You're not just a commission free platform, which is in and of itself amazing, but you're now getting to the credit card business.

Yeah.

Yeah.

We were really excited to announce this. We've been working on it for quite a while and we didn't just want to launch another me too credit card. We really wanted to come in and do something special and really lead the industry. So it's really the best cash back rewards that we found in any credit card on the market, the best digital experience, and really the best design. We have a solid gold card that's basically a hunk of metal. It's extremely iconic, very simple, like very well designed. We're really proud of the product. Now the hard work comes of rolling it out. But even since the announcement, in the first few hours after the announcement, which was last night, we had hundreds of thousands of people signing up for the credit card, so it's it's looking very good so far.

We were really excited to announce this. We've been working on it for quite a while and we didn't just want to launch another me too credit card. We really wanted to come in and do something special and really lead the industry. So it's really the best cash back rewards that we found in any credit card on the market, the best digital experience, and really the best design. We have a solid gold card that's basically a hunk of metal. It's extremely iconic, very simple, like very well designed. We're really proud of the product. Now the hard work comes of rolling it out. But even since the announcement, in the first few hours after the announcement, which was last night, we had hundreds of thousands of people signing up for the credit card, so it's it's looking very good so far.

How does the credit card fit into the business, because I know early last year you guys announced a retirement products, so it feels like you're trying to expand away from the core trading platform.

How does the credit card fit into the business, because I know early last year you guys announced a retirement products, so it feels like you're trying to expand away from the core trading platform.

Yeah.

Yeah.

So as a business, holistically, we're focused on three things. The first is being the number one platform for active traders. Right now, we're number two, but we have a path to being number one in some number of years, and that's really through user experience improvements, product innovations like twenty four hour market, adding new asset classes like Futures, new platform launches like our web Pro platform which we've announced. But we don't want to just be an active trader platform. We also want to grow wallet share with our customers and help them build wealth. That's where Robinhood Gold comes in. That's where our innovations and the retirement program with three percent match come in. And of course, now the credit card is sort of another pillar of us growing wallet share with customers and helping them do all of their financial activities in one place via Robinhood.

So as a business, holistically, we're focused on three things. The first is being the number one platform for active traders. Right now, we're number two, but we have a path to being number one in some number of years, and that's really through user experience improvements, product innovations like twenty four hour market, adding new asset classes like Futures, new platform launches like our web Pro platform which we've announced. But we don't want to just be an active trader platform. We also want to grow wallet share with our customers and help them build wealth. That's where Robinhood Gold comes in. That's where our innovations and the retirement program with three percent match come in. And of course, now the credit card is sort of another pillar of us growing wallet share with customers and helping them do all of their financial activities in one place via Robinhood.

So are you competing with this card with the bank issued visa master cards?

So are you competing with this card with the bank issued visa master cards?

Is that the market you're now going into.

Is that the market you're now going into.

I think that we're trying to do something really interesting with this card. So if you think about premium credit cards, the best ones out there, accept less than half of the people that apply.

I think that we're trying to do something really interesting with this card. So if you think about premium credit cards, the best ones out there, accept less than half of the people that apply.

Is that right? Half of that? Is that Chase Sephi or is that an Platinum or whatever.

Is that right? Half of that? Is that Chase Sephi or is that an Platinum or whatever.

Those classes of credit card. It's really like the typical sort of like super prime premium rewards cards, and they have high annual fees. So what we want to to do is, in the same way that Robinhood democratized stock trading and made it accessible to a wider group of people, we want to open up the private client experience. I don't know if you've been to a Chase branch, but you can see there's two doors, one for the private clients and one for everyone else. And the whole idea behind Robinhood Gold is giving that private client experience for as little as five dollars a month, opening it to everyone, and it starts with the premium credit card. Of course, the retirement benefits where you get a three percent match, the first and biggest in the industry the five percent apy on our cash which is just an institutional grade, high yield offering that you have to have, you know, millions of dollars to match at other brokers. So yeah, we're putting all this together and we're seeing Robinhood Gold customers actually depositing the lion's share of their money into Robinhood and really growing with us. And I think we have an opportunity to offer them services for all their financial needs in BIB the perks.

Those classes of credit card. It's really like the typical sort of like super prime premium rewards cards, and they have high annual fees. So what we want to to do is, in the same way that Robinhood democratized stock trading and made it accessible to a wider group of people, we want to open up the private client experience. I don't know if you've been to a Chase branch, but you can see there's two doors, one for the private clients and one for everyone else. And the whole idea behind Robinhood Gold is giving that private client experience for as little as five dollars a month, opening it to everyone, and it starts with the premium credit card. Of course, the retirement benefits where you get a three percent match, the first and biggest in the industry the five percent apy on our cash which is just an institutional grade, high yield offering that you have to have, you know, millions of dollars to match at other brokers. So yeah, we're putting all this together and we're seeing Robinhood Gold customers actually depositing the lion's share of their money into Robinhood and really growing with us. And I think we have an opportunity to offer them services for all their financial needs in BIB the perks.

Are pretty sweet, as you mentioned, three percent cash back on all purchases. Do you make money off of this?

Are pretty sweet, as you mentioned, three percent cash back on all purchases. Do you make money off of this?

Are?

Are?

How is this going to be kind of another peg for the profitability and the growth of the company.

How is this going to be kind of another peg for the profitability and the growth of the company.

Yeah, two things there. One is we do obviously any business line we enter, we intend to be profitable over the long run on a standalone basis, so not just a creative but we anticipate this being a profitable business line just within the card portfolio. And that's through not just the interchange transaction revenue, but also the lending business through the card. We anticipate this would actually be a very attractive card for people building credit over time, and not just folks that pay off their balance in full. And then the other side of it is we see that when customers adopt Robinhood Gold, their rate of deposit growth and account balance growth is much higher than non Gold customers. They also adopt our products at a much higher rate, and so even though they're getting so much more value with all these industry leading rates and value props, the revenue that accrues to the business from the gold relationship is also multiples higher than non gold customers. And we think the credit card, since it's so core to people's financial needs. Typically all of their the line's share of their spending goes through credit, and if you're using a credit card, much easier to grab the paycheck deposit.

Yeah, two things there. One is we do obviously any business line we enter, we intend to be profitable over the long run on a standalone basis, so not just a creative but we anticipate this being a profitable business line just within the card portfolio. And that's through not just the interchange transaction revenue, but also the lending business through the card. We anticipate this would actually be a very attractive card for people building credit over time, and not just folks that pay off their balance in full. And then the other side of it is we see that when customers adopt Robinhood Gold, their rate of deposit growth and account balance growth is much higher than non Gold customers. They also adopt our products at a much higher rate, and so even though they're getting so much more value with all these industry leading rates and value props, the revenue that accrues to the business from the gold relationship is also multiples higher than non gold customers. And we think the credit card, since it's so core to people's financial needs. Typically all of their the line's share of their spending goes through credit, and if you're using a credit card, much easier to grab the paycheck deposit.

You need to carry his cash around.

You need to carry his cash around.

Now, this is the guy who walks around with hundreds of dollars in his pocket.

Now, this is the guy who walks around with hundreds of dollars in his pocket.

I don't know why I asked myself to say, when you walk into a bar, the jersey short good cash on the bar there.

I don't know why I asked myself to say, when you walk into a bar, the jersey short good cash on the bar there.

Well, I mean, I'll show you what I've got in my pocket.

Well, I mean, I'll show you what I've got in my pocket.

Oh, he brought the card, very cool fourteen car So this all right, folks, on we're shoving you this card. It is it weighs something you got some hef to. Well, this is the card here, folks, it is.

Oh, he brought the card, very cool fourteen car So this all right, folks, on we're shoving you this card. It is it weighs something you got some hef to. Well, this is the card here, folks, it is.

It's basically a gold bull. It's like it's not gold plated, it's a this is solid.

It's basically a gold bull. It's like it's not gold plated, it's a this is solid.

Your numbers though I can't make it right now.

Your numbers though I can't make it right now.

That's the great thing about it because this is a digital first card, and we outlined all of the awesome digital features like virtual cards, like family focused suite of features. Yeah, you don't actually need the number on it. You can open up the app, look at the number, the expiration dates on there. The design of the card is minimal, only the robin Hood brand, the chip and on the back you have your name and that's pretty much interesting. So if it gets stolen or lost, you don't really have to worry about their actual number being used.

That's the great thing about it because this is a digital first card, and we outlined all of the awesome digital features like virtual cards, like family focused suite of features. Yeah, you don't actually need the number on it. You can open up the app, look at the number, the expiration dates on there. The design of the card is minimal, only the robin Hood brand, the chip and on the back you have your name and that's pretty much interesting. So if it gets stolen or lost, you don't really have to worry about their actual number being used.

Yeah, yeah, all right.

Yeah, yeah, all right.

So who is the typical robin Hood customer these days?

So who is the typical robin Hood customer these days?

Client? These days?

Client? These days?

A typical Robinhood customer, I would say, is someone in their thirties. They tend to be an early adopter of technology. They have you know, more half of our customers make over one hundred thousand dollars in annual income, so it's not sort of like the paycheck to paycheck customer as maybe some people think, and we also have much larger customers with big accounts. We recently have been introducing matches. In fact, last night we rolled out another initiative, one percent unlimited deposit match into Robinhood for all dollars deposited for our Gold members. So basically, most financial firms charge you a percentage to keep your money there as a management fee. We're paying you a percentage to move your money with us. And these types of offers have really attracted people with much bigger accounts. We've had customers with tens of millions of dollars moving those accounts to Robinhood and they've been very happy with the experience. So we have been adding capabilities to serve customers across the entire market, not just sort of in that middle tier, but also people with more money and people with less who are just getting started. We also would like to serve them and have been focusing on that demographic since day one.

A typical Robinhood customer, I would say, is someone in their thirties. They tend to be an early adopter of technology. They have you know, more half of our customers make over one hundred thousand dollars in annual income, so it's not sort of like the paycheck to paycheck customer as maybe some people think, and we also have much larger customers with big accounts. We recently have been introducing matches. In fact, last night we rolled out another initiative, one percent unlimited deposit match into Robinhood for all dollars deposited for our Gold members. So basically, most financial firms charge you a percentage to keep your money there as a management fee. We're paying you a percentage to move your money with us. And these types of offers have really attracted people with much bigger accounts. We've had customers with tens of millions of dollars moving those accounts to Robinhood and they've been very happy with the experience. So we have been adding capabilities to serve customers across the entire market, not just sort of in that middle tier, but also people with more money and people with less who are just getting started. We also would like to serve them and have been focusing on that demographic since day one.

And VLAT When I talk to skeptics, they point out that you guys are heavily reliant on options trading, crypto volumes, and that driving the business. Paul mentioned their huge run up over the last twelve months, it's still down forty eight percent from the IPO price. What is the kind of mission in the next coming months and years for the company to.

And VLAT When I talk to skeptics, they point out that you guys are heavily reliant on options trading, crypto volumes, and that driving the business. Paul mentioned their huge run up over the last twelve months, it's still down forty eight percent from the IPO price. What is the kind of mission in the next coming months and years for the company to.

Get back to that IPO price and trade higher.

Get back to that IPO price and trade higher.

Well, I think we've been doing really well focusing on the inputs of the business. I can't really control the stock price directly, but if we're growing revenues, if we're diversifying revenues, if we're launching innovative new products for our customers, I think we can kind of grow through market headwinds and high interest rate environment and be sort of like a company that thrives in all conditions. And you mentioned the revenues and you know, options trading and all these things. But what's happened in the past couple of years is the revenue profile of the business has diversified as we've rolled out all these products. As of the last earnings report several earnings calls, more than half of the revenue is actually net interest margin, not even transaction base. So as we add more of these products, like the five percent yield on your cash, the profile of the business has also changed.

Well, I think we've been doing really well focusing on the inputs of the business. I can't really control the stock price directly, but if we're growing revenues, if we're diversifying revenues, if we're launching innovative new products for our customers, I think we can kind of grow through market headwinds and high interest rate environment and be sort of like a company that thrives in all conditions. And you mentioned the revenues and you know, options trading and all these things. But what's happened in the past couple of years is the revenue profile of the business has diversified as we've rolled out all these products. As of the last earnings report several earnings calls, more than half of the revenue is actually net interest margin, not even transaction base. So as we add more of these products, like the five percent yield on your cash, the profile of the business has also changed.

All right, flat, thank you so much for joining us.

All right, flat, thank you so much for joining us.

Really appreciate you coming into our Bloomberg and director broker studio of lad Tenev. He's the chief executive officer, co founder of Robin Hood. The news Today, Robinhood unveils a credit card and folks, it hasn't hef This is a unique credit card. It's been a further push beyond the trading business there in the stock performing very well there.

Really appreciate you coming into our Bloomberg and director broker studio of lad Tenev. He's the chief executive officer, co founder of Robin Hood. The news Today, Robinhood unveils a credit card and folks, it hasn't hef This is a unique credit card. It's been a further push beyond the trading business there in the stock performing very well there.

We appreciate that.

We appreciate that.

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

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

One of the issues here is we think about the ripple effects of what happened in Baltimore yesterday, is who's going to pay for this stuff? And that kind of goes to the insurance discussion, and so we have a just insurance discussion. We turned to our expert, Matthew Palozola. He's a senior analys insurance annalys for Bloomberg Intelligence he joins his life in our Bloomberg Interactive Brooker Studio. So, Matthew, it's not every day that we have an event like we saw yesterday in Baltimore. From your perspective, from the insurance perspective, how do you think it's going to play out?

One of the issues here is we think about the ripple effects of what happened in Baltimore yesterday, is who's going to pay for this stuff? And that kind of goes to the insurance discussion, and so we have a just insurance discussion. We turned to our expert, Matthew Palozola. He's a senior analys insurance annalys for Bloomberg Intelligence he joins his life in our Bloomberg Interactive Brooker Studio. So, Matthew, it's not every day that we have an event like we saw yesterday in Baltimore. From your perspective, from the insurance perspective, how do you think it's going to play out?

So we know a couple of things. Is obviously still very early, but we've seen some stuff in the trade press, and there's a little more information than there actually normally is on some of these disasters. The bridge itself, I've seen reports that it's valued at about one point two billion dollars. I have no idea how much it's going to actually cost to rebuild it. The ship the Dolly that crashed, actually is carrying, in my view, unusually large amount of insurance and reinsurance, which is a good thing in this case. There's about three point one billion dollars worth of insurance and reinsurance tied to that vessel. Now that's also separate from insurance that's on the bridge and kind of other things. The problem is it's going to take a long time to play out, so the reinsurance that's on there will probably end up paying the bulk of the.

So we know a couple of things. Is obviously still very early, but we've seen some stuff in the trade press, and there's a little more information than there actually normally is on some of these disasters. The bridge itself, I've seen reports that it's valued at about one point two billion dollars. I have no idea how much it's going to actually cost to rebuild it. The ship the Dolly that crashed, actually is carrying, in my view, unusually large amount of insurance and reinsurance, which is a good thing in this case. There's about three point one billion dollars worth of insurance and reinsurance tied to that vessel. Now that's also separate from insurance that's on the bridge and kind of other things. The problem is it's going to take a long time to play out, so the reinsurance that's on there will probably end up paying the bulk of the.

Claims and how does this compare to say a hurricane or another form of kind of natural disaster thing that happens where you have insurance and reinsures kind of all.

Claims and how does this compare to say a hurricane or another form of kind of natural disaster thing that happens where you have insurance and reinsures kind of all.

Yeah, anything, it's it's a more complex event, right, So on the back end, stuff we probably will never see. They'll probably be a lot more back and forth. In terms of the cost of the event, I'm assuming very early back of the envelope, it's probably a mid single digit billions, probably like a four billion or probably even less, honestly, which is like a small hurricane, and we have hurricanes that are twenty thirty fifty billion dollars. So in terms of the impact of the entire industry is probably very manageable.

Yeah, anything, it's it's a more complex event, right, So on the back end, stuff we probably will never see. They'll probably be a lot more back and forth. In terms of the cost of the event, I'm assuming very early back of the envelope, it's probably a mid single digit billions, probably like a four billion or probably even less, honestly, which is like a small hurricane, and we have hurricanes that are twenty thirty fifty billion dollars. So in terms of the impact of the entire industry is probably very manageable.

Who ensures this stuff? I mean, these ships go all over the world. They're monsterships.

Who ensures this stuff? I mean, these ships go all over the world. They're monsterships.

I have no idea how they get in and out of ports now that you think about it, they're so huge these days, and I got to traverse you know, dangerous waters, congested waters. Who ensures this stuff?

I have no idea how they get in and out of ports now that you think about it, they're so huge these days, and I got to traverse you know, dangerous waters, congested waters. Who ensures this stuff?

So it's pretty interesting.

So it's pretty interesting.

The way it works is it's it's kind of a mutual claims paying group that specifically this ship, right, So a bunch of this is kind of the way insurance started. Honestly, is a bunch of people running the ships get together and they pull their resources, and that's where they get the insurance from. That's really only the very low layer of the insurance. So that's one hundred million of the three point one billion of insurance, right.

The way it works is it's it's kind of a mutual claims paying group that specifically this ship, right, So a bunch of this is kind of the way insurance started. Honestly, is a bunch of people running the ships get together and they pull their resources, and that's where they get the insurance from. That's really only the very low layer of the insurance. So that's one hundred million of the three point one billion of insurance, right.

So then the rest of it goes to this.

So then the rest of it goes to this.

Global reinsurance market. Above the one hundred there's kind of another bit of ship reinsurance, and then above that it's the global reinsurance market. So I think companies like Swiss re Munich ree, some of the Bermuda reinsurance companies, I don't know if they have specific exposure.

Global reinsurance market. Above the one hundred there's kind of another bit of ship reinsurance, and then above that it's the global reinsurance market. So I think companies like Swiss re Munich ree, some of the Bermuda reinsurance companies, I don't know if they have specific exposure.

So do we know who's the name's backing this?

So do we know who's the name's backing this?

Who's we don't. We know that acce Xcel.

Who's we don't. We know that acce Xcel.

Was the lead on some of the reinsurance, we don't know by how much, and that was just reported by the group at the time when they renewed the policy.

Was the lead on some of the reinsurance, we don't know by how much, and that was just reported by the group at the time when they renewed the policy.

If I'm a shipper and now my path is delayed and I have to rethink how I'm operating, is there anyone that I'm covered by insurance or reinsurance? Like, how does insurance play into some of the delays that are likely going to happen as they eventually clear, there'll.

If I'm a shipper and now my path is delayed and I have to rethink how I'm operating, is there anyone that I'm covered by insurance or reinsurance? Like, how does insurance play into some of the delays that are likely going to happen as they eventually clear, there'll.

Certainly be some knock on effects, right, so it would be a business interruption claim. So it's kind of I think, pretty classic, meaning there's something in your way, you can't do your business, you'll have some sort of business insrupting clim it's probably on the primary insurance market. If you recall in twenty twenty one the Suez Canal got blocked by that ship. There was talk about like ten billion dollars worth of commerce a day going through there or something like that, and that was that was six days. Even when that happened, it wasn't a huge amount of business eruption claims for the industry, but that that would be where it falls.

Certainly be some knock on effects, right, so it would be a business interruption claim. So it's kind of I think, pretty classic, meaning there's something in your way, you can't do your business, you'll have some sort of business insrupting clim it's probably on the primary insurance market. If you recall in twenty twenty one the Suez Canal got blocked by that ship. There was talk about like ten billion dollars worth of commerce a day going through there or something like that, and that was that was six days. Even when that happened, it wasn't a huge amount of business eruption claims for the industry, but that that would be where it falls.

All right, So are rates going to go up here or is this just a one off black Swan kind of event it which kind of seems like it.

All right, So are rates going to go up here or is this just a one off black Swan kind of event it which kind of seems like it.

So reinsurance press have been going up anyway, right, So, and the reinsurance market doesn't exactly move in lockstep anymore. It's kind of individual market. So I think you will certainly see maritime reinsurance rates going up. So in case you're shipping anything overseas, qual you might have to pay a little more. But I think that's almost a given. After an event like this that specifically to maritime reinsurance.

So reinsurance press have been going up anyway, right, So, and the reinsurance market doesn't exactly move in lockstep anymore. It's kind of individual market. So I think you will certainly see maritime reinsurance rates going up. So in case you're shipping anything overseas, qual you might have to pay a little more. But I think that's almost a given. After an event like this that specifically to maritime reinsurance.

And looking at reinsurres, we've been sitting on the equities desk. We're trying to game out which stocks are going to move in which direction and who benefits and who loses?

And looking at reinsurres, we've been sitting on the equities desk. We're trying to game out which stocks are going to move in which direction and who benefits and who loses?

How does that play out? Like?

How does that play out? Like?

Is this in real time we find out that X firm has to disclose that they're the main reinsurer on this or how how did those kind of dynamics?

Is this in real time we find out that X firm has to disclose that they're the main reinsurer on this or how how did those kind of dynamics?

Usually the way works.

Usually the way works.

So what will happen is and I don't expect we'll see much of this for the names I cover.

So what will happen is and I don't expect we'll see much of this for the names I cover.

But what will happen is as we go into earnings.

But what will happen is as we go into earnings.

If you are one of the companies with a big exposure to this and it's gonna be material on your results, they will usually pre announce that ahead of earnings, just so that they don't, you know, dramatically miss the number on that day. So that will be the way it would play out in the market. But I don't think you're gonna hear a ton from at least in Bermuda companies that I cover.

If you are one of the companies with a big exposure to this and it's gonna be material on your results, they will usually pre announce that ahead of earnings, just so that they don't, you know, dramatically miss the number on that day. So that will be the way it would play out in the market. But I don't think you're gonna hear a ton from at least in Bermuda companies that I cover.

Gotcha, where are we? I don't know?

Gotcha, where are we? I don't know?

Trailing twelve months on your you're the disaster guy. So there's a hurricane or some terrible fire with our friends in California or something like that, we turned to you.

Trailing twelve months on your you're the disaster guy. So there's a hurricane or some terrible fire with our friends in California or something like that, we turned to you.

We haven't talked to you a lot recently.

We haven't talked to you a lot recently.

Yeah, we've We've been alright.

Yeah, we've We've been alright.

So even last year, what happened was the Swiss regis put out there annual catastrophe loss for the industry, right, and it was one hundred billion dollars for the third year in a row. And when I started in this industry many years ago, if you told me it would be one hundred billion dollars last year, we'd be shocked, right, it would have blown off the off the chair. And now it's been three years in a row that's happened. The interesting thing about last year was a lot of it was caused by severe convective storms, not huge catastrophes, not huge hurricanes, So it was kind of these smaller events that built up. So that's probably why you're not hearing these kind of headline things. But the losses, you know, are still there. That said, the market's still very well capitalized, and it really wasn't. It was still a pretty good year for the insurers. But that's kind of what's happening. And now if you get a big event on top of those accumulation of smaller events, than it could be pretty all.

So even last year, what happened was the Swiss regis put out there annual catastrophe loss for the industry, right, and it was one hundred billion dollars for the third year in a row. And when I started in this industry many years ago, if you told me it would be one hundred billion dollars last year, we'd be shocked, right, it would have blown off the off the chair. And now it's been three years in a row that's happened. The interesting thing about last year was a lot of it was caused by severe convective storms, not huge catastrophes, not huge hurricanes, So it was kind of these smaller events that built up. So that's probably why you're not hearing these kind of headline things. But the losses, you know, are still there. That said, the market's still very well capitalized, and it really wasn't. It was still a pretty good year for the insurers. But that's kind of what's happening. And now if you get a big event on top of those accumulation of smaller events, than it could be pretty all.

Right, Bailey's in the market for beachfront mansion done in the palm beachery.

Right, Bailey's in the market for beachfront mansion done in the palm beachery.

Can you get insurance on that stuff sitting on the water?

Can you get insurance on that stuff sitting on the water?

It depends on the state, but probably not. You might have to move into yours. But yeah, no, I mean, it's it's all the insurers are pulling back from all of the coastal states.

It depends on the state, but probably not. You might have to move into yours. But yeah, no, I mean, it's it's all the insurers are pulling back from all of the coastal states.

It's partly climate change.

It's partly climate change.

I know, we know, kind of like a point to that immediately, but that's not it's not the biggest thing. The other thing is that property valves have gone up, inflation has pushed the repair costs up, and yes, the frequency and severity of storms is worse. So it's kind of all those things mixed together. It's just at a conference where someone said a home insurance ceo who I won't name, and said they just wouldn't even touch New Jersey specifically.

I know, we know, kind of like a point to that immediately, but that's not it's not the biggest thing. The other thing is that property valves have gone up, inflation has pushed the repair costs up, and yes, the frequency and severity of storms is worse. So it's kind of all those things mixed together. It's just at a conference where someone said a home insurance ceo who I won't name, and said they just wouldn't even touch New Jersey specifically.

Right, all right, Well, I'm five blocks for us, fine blocks in from the ocean, so I feel and they're long blocks of the big block, so I feel very safe there. But again, you know, Superstorm Sandy came through and still to this day you get onto men and menal loaking in New Jersey. There are still lots like a ten million dollar home got washed away. They haven't rebuilt. It's still sitting there empty. So those folks got crushed.

Right, all right, Well, I'm five blocks for us, fine blocks in from the ocean, so I feel and they're long blocks of the big block, so I feel very safe there. But again, you know, Superstorm Sandy came through and still to this day you get onto men and menal loaking in New Jersey. There are still lots like a ten million dollar home got washed away. They haven't rebuilt. It's still sitting there empty. So those folks got crushed.

So it's a thing.

So it's a thing.

Matthew Palozola, thanks so much for joining us senior analys covering the insurance business for Bloomberg Intelligence. Joining us here in our Bloomberg Interactive Brokers studio're trying to game out kind of what some of the insurance implications will be from this bridge collapse in Baltimore.

Matthew Palozola, thanks so much for joining us senior analys covering the insurance business for Bloomberg Intelligence. Joining us here in our Bloomberg Interactive Brokers studio're trying to game out kind of what some of the insurance implications will be from this bridge collapse in Baltimore.

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

Cardinal Cruise Lines reported some numbers.

Cardinal Cruise Lines reported some numbers.

They raised their four year outlook amid record setting booking pace, but they also said that the collaps Baltimore Bridge might have a ten million dollars negative impact on their cash flow.

They raised their four year outlook amid record setting booking pace, but they also said that the collaps Baltimore Bridge might have a ten million dollars negative impact on their cash flow.

And earnings for the year.

And earnings for the year.

Let's break it down with Jody Lourie. She covers all the consumer stuff for Bloomberg Intelligence.

Let's break it down with Jody Lourie. She covers all the consumer stuff for Bloomberg Intelligence.

She's a credit analyst over there.

She's a credit analyst over there.

So, Jody, what'd you make of the Carnival numbers. It seems like people are cruising like crazy here, So I.

So, Jody, what'd you make of the Carnival numbers. It seems like people are cruising like crazy here, So I.

Would say a few things about that, Paul.

Would say a few things about that, Paul.

First of all, I would say that when you look at Carnival, it's really a cash flow story. It really is a credit story more than anything else, and the bookings are sort of confirming that.

First of all, I would say that when you look at Carnival, it's really a cash flow story. It really is a credit story more than anything else, and the bookings are sort of confirming that.

Now.

Now.

The booking level, if you include short and long term, it's actually not at the peak, which was second quarter of last year, but it's right near the peak, and based on what management is saying, it sounds like second quarter of this year might top second quarter of last year.

The booking level, if you include short and long term, it's actually not at the peak, which was second quarter of last year, but it's right near the peak, and based on what management is saying, it sounds like second quarter of this year might top second quarter of last year.

That said, I.

That said, I.

Think more importantly, the company is starting to attack some of its debt load, particularly in some of its secured areas, which will help to sort of free up the balance sheet a little bit, provide some flexibility, make it so that the company has an ability to sort of make its way back to high grade ratings as it's been targeting for twenty twenty six.

Think more importantly, the company is starting to attack some of its debt load, particularly in some of its secured areas, which will help to sort of free up the balance sheet a little bit, provide some flexibility, make it so that the company has an ability to sort of make its way back to high grade ratings as it's been targeting for twenty twenty six.

H Jody, you call that out just using the FA function on the terminal Carnival cruise almost thirty two billion dollars in debt compared to a market cap of twenty one billion dollars. How does that stack up to the likes of Royal, Caribbean or Norwegian and some of those other piers in the cruise liner space.

H Jody, you call that out just using the FA function on the terminal Carnival cruise almost thirty two billion dollars in debt compared to a market cap of twenty one billion dollars. How does that stack up to the likes of Royal, Caribbean or Norwegian and some of those other piers in the cruise liner space.

So yeah, Carnival was able to bring down their debt load to about thirty billion over the past year, and it's likely that'll probably end this year around that level based on what they're taking in in terms of ships. That said, it is significantly higher than Royal, it is significantly higher than Norwegian, but on a leverage perspective, it's sort of middle of the pack at the moment as compared to Royal and Norwegian. Royal is a little bit a few quarters ahead of Carnival in terms of its deleveraging strategy. Management at Royal actually bumped up their narrative around getting to investment grade level metrics to do it earlier than twenty twenty five, and Carnival stuck to that twenty twenty six number, which I think is descriptive of being a little bit more conservative, particularly with the backdrop of everything happening globally, not just the Baltimore Bridge situation, but also at the Red Sea and everywhere else that's affecting Carnival more broadly because of its more global nature.

So yeah, Carnival was able to bring down their debt load to about thirty billion over the past year, and it's likely that'll probably end this year around that level based on what they're taking in in terms of ships. That said, it is significantly higher than Royal, it is significantly higher than Norwegian, but on a leverage perspective, it's sort of middle of the pack at the moment as compared to Royal and Norwegian. Royal is a little bit a few quarters ahead of Carnival in terms of its deleveraging strategy. Management at Royal actually bumped up their narrative around getting to investment grade level metrics to do it earlier than twenty twenty five, and Carnival stuck to that twenty twenty six number, which I think is descriptive of being a little bit more conservative, particularly with the backdrop of everything happening globally, not just the Baltimore Bridge situation, but also at the Red Sea and everywhere else that's affecting Carnival more broadly because of its more global nature.

I'm looking at again, the FA function is barely called out. I still see you know, three four billion dollars in in capex every year. Are they buying ships or what are they spending that kind of money on?

I'm looking at again, the FA function is barely called out. I still see you know, three four billion dollars in in capex every year. Are they buying ships or what are they spending that kind of money on?

Yeah, the three four billion dollars of capex is primarily ship. There is a portion of it that is in terms of maintenance capex. Right, your ships get old, you have to update them every few years. You have all these sort of different requirements related to it. They also have that celebration key that they're rolling out on, which is on the Grand Bahama, and that's to rival their peers, which have been investing really heavily also into island presence. Right, the Caribbean island presence is a money maker for all of them.

Yeah, the three four billion dollars of capex is primarily ship. There is a portion of it that is in terms of maintenance capex. Right, your ships get old, you have to update them every few years. You have all these sort of different requirements related to it. They also have that celebration key that they're rolling out on, which is on the Grand Bahama, and that's to rival their peers, which have been investing really heavily also into island presence. Right, the Caribbean island presence is a money maker for all of them.

It's this captive audience.

It's this captive audience.

They bring the people who are on their ships to these islands and to these sections of islands like you know, not the whole Grand Bahama, but that carved out sections specifically for Carnival and you know, wine and dying them get them to spend extra money that onboard spend is really where you see that.

They bring the people who are on their ships to these islands and to these sections of islands like you know, not the whole Grand Bahama, but that carved out sections specifically for Carnival and you know, wine and dying them get them to spend extra money that onboard spend is really where you see that.

Margin you mentioned wining and dining. I just want to look at some of the other areas that you cover, talking about wind resorts, MGM and HILT all the funds, all the fund stuff. Yeah, you have the best job. I hope you take advantage of it. But like when you look at the underlying business dynamics of some of the other areas that you cover. What are we seeing in terms of hotel demand and hotel sales and what that means from a credit perspective.

Margin you mentioned wining and dining. I just want to look at some of the other areas that you cover, talking about wind resorts, MGM and HILT all the funds, all the fund stuff. Yeah, you have the best job. I hope you take advantage of it. But like when you look at the underlying business dynamics of some of the other areas that you cover. What are we seeing in terms of hotel demand and hotel sales and what that means from a credit perspective.

So hotel demands, hotel sales, it's it is a bit mixed regionally, but I think overall we're pretty optimistic about this year, and that's a function of the fact that business and conference is really picking up this year as compared to the past few years. You know, we're at that point where that post pandemic narrative has sort of played out and we're getting to more normalized.

So hotel demands, hotel sales, it's it is a bit mixed regionally, but I think overall we're pretty optimistic about this year, and that's a function of the fact that business and conference is really picking up this year as compared to the past few years. You know, we're at that point where that post pandemic narrative has sort of played out and we're getting to more normalized.

That said, there are areas.

That said, there are areas.

Of expansion and growth. We're also seeing that all inclusive area be a much more attractive area for a lot of these companies, and I think we are seeing some rivalry across the board when it comes to hotels casinos, cruise lines as these destination opportunities. We're talking Las Vegas obviously not the regional casinos that's a little bit different, but Las Vegas, Macaw, you know, the cruise lines and the hotels. There's a lot of sort of this destination narrative that's going on to get people to spend that extra money and to sort of go on vacation, live life to the fullest. Now, we do have these partnerships that are happening between Marriott and an MGM, but then also we have an MGM and Carnival relationship. So there is this fluidity that's happening within my industry that makes it sort of interesting.

Of expansion and growth. We're also seeing that all inclusive area be a much more attractive area for a lot of these companies, and I think we are seeing some rivalry across the board when it comes to hotels casinos, cruise lines as these destination opportunities. We're talking Las Vegas obviously not the regional casinos that's a little bit different, but Las Vegas, Macaw, you know, the cruise lines and the hotels. There's a lot of sort of this destination narrative that's going on to get people to spend that extra money and to sort of go on vacation, live life to the fullest. Now, we do have these partnerships that are happening between Marriott and an MGM, but then also we have an MGM and Carnival relationship. So there is this fluidity that's happening within my industry that makes it sort of interesting.

And you get a great view on the consumer Jody with you know the coverage you have again hotels and casinos and cruise lines. Where are people kind of spending their dollar And it seems like they're still spending on that whole experiential thing, the experiences. What are the companies you cover, what are they saying is to the how that's likely to play out?

And you get a great view on the consumer Jody with you know the coverage you have again hotels and casinos and cruise lines. Where are people kind of spending their dollar And it seems like they're still spending on that whole experiential thing, the experiences. What are the companies you cover, what are they saying is to the how that's likely to play out?

Because so consumers are definitely spending still on experiences. We're still very much seeing it now if you compare twenty twenty three twenty twenty two. It's a different sort of narrative than twenty twenty three to two thousand two before, because the base is much greater. Right, if you looked at the base going back to twenty twenty one, you're dealing with nothing, building on nothing. It's very significant. That said, there still is that narrative of growth and that consumer spending on experiences where we sort of wonder is what's going to happen heading into the second half. That's sort of the puzzle piece that isn't quite filled.

Because so consumers are definitely spending still on experiences. We're still very much seeing it now if you compare twenty twenty three twenty twenty two. It's a different sort of narrative than twenty twenty three to two thousand two before, because the base is much greater. Right, if you looked at the base going back to twenty twenty one, you're dealing with nothing, building on nothing. It's very significant. That said, there still is that narrative of growth and that consumer spending on experiences where we sort of wonder is what's going to happen heading into the second half. That's sort of the puzzle piece that isn't quite filled.

Out for us yet.

Out for us yet.

Where first half into the summer season is very strong, we're also seeing that for cruise lines, they're saying that going into the twenty twenty five they're seeing strength, and that's a function of the fact that people book their cruises so far in advance. You don't get that benefit in the hotel space, you don't get that benefit as much in the vacation arena elsewhere. People don't book vacations apart from cruises so far in advance. So I think as we head into second half, we'll sort of get a feel for how comfortable the consumer is in terms of spending.

Where first half into the summer season is very strong, we're also seeing that for cruise lines, they're saying that going into the twenty twenty five they're seeing strength, and that's a function of the fact that people book their cruises so far in advance. You don't get that benefit in the hotel space, you don't get that benefit as much in the vacation arena elsewhere. People don't book vacations apart from cruises so far in advance. So I think as we head into second half, we'll sort of get a feel for how comfortable the consumer is in terms of spending.

And Jody, I just want to ask about FED if we do have higher for longer and if a rate cut keeps dragging on, how does that impact the kind of areas of your coverage differently, whether it's sector by sector or a company by company, it's.

And Jody, I just want to ask about FED if we do have higher for longer and if a rate cut keeps dragging on, how does that impact the kind of areas of your coverage differently, whether it's sector by sector or a company by company, it's.

A combination of factors.

A combination of factors.

So when you're talking the cruise lines, a lot of the narrative is around repaying and refinancing debt. That refinancing portion won't be as attractive if we are higher for longer. The other component, though, is on the consumer side. So you have the high end consumers that might benefit or not from high interest rates or a elevated stock market price of sorts, But then you have the lower end consumer that might feel a little bit more of the pressure. I think the more important piece is that inflation factor, where you say, okay, from the inflation standpoint, how much is the consumer feeling it, how are they feeling it directly in their wallet, and how much are they willing to borrow in order to continue that's spending, and so I don't really know how that's going to play out. That's you know, there are other people within the firm that are really very smart and can talk more to that.

So when you're talking the cruise lines, a lot of the narrative is around repaying and refinancing debt. That refinancing portion won't be as attractive if we are higher for longer. The other component, though, is on the consumer side. So you have the high end consumers that might benefit or not from high interest rates or a elevated stock market price of sorts, But then you have the lower end consumer that might feel a little bit more of the pressure. I think the more important piece is that inflation factor, where you say, okay, from the inflation standpoint, how much is the consumer feeling it, how are they feeling it directly in their wallet, and how much are they willing to borrow in order to continue that's spending, and so I don't really know how that's going to play out. That's you know, there are other people within the firm that are really very smart and can talk more to that.

That said that is something we.

That said that is something we.

Are monitoring from the standpoint of how much the consumer is stretching, because that narrative around consumer is having extra cash on the sidelines to pump into vacations isn't so much there, but the thought process around spending on vacations and that mentality around spending on vacations still exists.

Are monitoring from the standpoint of how much the consumer is stretching, because that narrative around consumer is having extra cash on the sidelines to pump into vacations isn't so much there, but the thought process around spending on vacations and that mentality around spending on vacations still exists.

All right, Jodi, thanks so much for joining us. Really appreciate it. Jody Lourie.

All right, Jodi, thanks so much for joining us. Really appreciate it. Jody Lourie.

She covers all the consumer companies, all the fun companies. She does it from the credit perspective. Talking about Carnival, Cruz reported some numbers today took their guidance up a little bit, citing even though some concerns a little bit near term short term small hit from Baltimore.

She covers all the consumer companies, all the fun companies. She does it from the credit perspective. Talking about Carnival, Cruz reported some numbers today took their guidance up a little bit, citing even though some concerns a little bit near term short term small hit from Baltimore.

Have you cruised before?

Have you cruised before?

Not a cruise, So you're not cruising for the honeymoon honeymoon?

Not a cruise, So you're not cruising for the honeymoon honeymoon?

No, we are flying to Portugal and then flying and driving running a car leash mateo cruiser.

No, we are flying to Portugal and then flying and driving running a car leash mateo cruiser.

No, I haven't.

No, I haven't.

I'm kind of scared. I don't know. Titanic like comes in my head and I'm like, I can't do it.

I'm kind of scared. I don't know. Titanic like comes in my head and I'm like, I can't do it.

My thing is I don't like people. So that's kind of a that's kind of a it could be a problem. That's a problem for me.

My thing is I don't like people. So that's kind of a that's kind of a it could be a problem. That's a problem for me.

So I mean it'd be stuck on board with like three thousand people onto this ship.

So I mean it'd be stuck on board with like three thousand people onto this ship.

Liesa says Titanic.

Liesa says Titanic.

I use the pandemic as like exhibit number six hundred for me to not do it, And you're just like, I don't really want to interact with it.

I use the pandemic as like exhibit number six hundred for me to not do it, And you're just like, I don't really want to interact with it.

I just don't like people. Yes, I don't need to see it.

I just don't like people. Yes, I don't need to see it.

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. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa, playing Bloomberg eleven thirty.

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. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa, playing Bloomberg eleven thirty.

Speaking of a global investment bank, Let's get the Alison Williams, she covers the global investment banks for Bloomberg Intelligence. She joins us from Princet, New Jersey via zoom Allison, I guess the most recent story out is UBS. They're selling an eight billion dollars in loans to Apollo. I guess these are some loans they picked up on the acquired Swiss What's going on with her friends in Switzerland?

Speaking of a global investment bank, Let's get the Alison Williams, she covers the global investment banks for Bloomberg Intelligence. She joins us from Princet, New Jersey via zoom Allison, I guess the most recent story out is UBS. They're selling an eight billion dollars in loans to Apollo. I guess these are some loans they picked up on the acquired Swiss What's going on with her friends in Switzerland?

Yeah, so this is really just wrapping up feel that Credit SUITEE had put in place some time ago.

Yeah, so this is really just wrapping up feel that Credit SUITEE had put in place some time ago.

So even before UBS.

So even before UBS.

Had had purchased Credit Suite, they were winding down the investment banks. They had this business, the securitized products group that they were you know, getting rid of, and so they upon consummation of the deal, some of those assets had been sold off, but the rest have been put in sort of a non core unit. So I think this is really just kind of closing the loop on that and it just shows progress that they're continuing to wind down the business some of the more I don't want to say unprofitable, but sort of some of the more voluable assets, balancing intensive, the types of things that UBS really does not want to be involved with.

Had had purchased Credit Suite, they were winding down the investment banks. They had this business, the securitized products group that they were you know, getting rid of, and so they upon consummation of the deal, some of those assets had been sold off, but the rest have been put in sort of a non core unit. So I think this is really just kind of closing the loop on that and it just shows progress that they're continuing to wind down the business some of the more I don't want to say unprofitable, but sort of some of the more voluable assets, balancing intensive, the types of things that UBS really does not want to be involved with.

Now's in UBS booking and net gain of three hundred million in the first quarter related to the deal or the matter.

Now's in UBS booking and net gain of three hundred million in the first quarter related to the deal or the matter.

Is this just a big.

Is this just a big.

Win for them given kind of how they're shedding the assets.

Win for them given kind of how they're shedding the assets.

Yeah, I mean, I think if you if you look at some of the numbers that they gave, I mean, and it's there's obviously sort of the way that they accounted for the transactions when they did the deal. I think, you know, the important thing is probably not the direct impact but just shutting those assets so that they can you know, kind of return to the core business.

Yeah, I mean, I think if you if you look at some of the numbers that they gave, I mean, and it's there's obviously sort of the way that they accounted for the transactions when they did the deal. I think, you know, the important thing is probably not the direct impact but just shutting those assets so that they can you know, kind of return to the core business.

They have a.

They have a.

Huge road ahead. I mean, this is you know, eight billion in assets. It's about ten percent of the non core book that they want to get rid of, and they're sort of on a long path of integrating the two banks. They've got big restructuring chargers ahead. I think what we're focusing on really in the first quarter is, you know, can we start to see some results from this investment bank you know that part of what they wanted. You know, obviously the wealth assets are huge for them, the Swiss assets are huge for them, but another thing they wanted was the investment bankers and credit Suiteze really did have expertise in the tech area, as you know, Paul. They have you know, a great reputation and done really well on tech IPOs. And what we've seen in the first couple of months of the quarter is UBS really moving up the league tables for tech IPOs, showing that they might be getting some of that benefit.

Huge road ahead. I mean, this is you know, eight billion in assets. It's about ten percent of the non core book that they want to get rid of, and they're sort of on a long path of integrating the two banks. They've got big restructuring chargers ahead. I think what we're focusing on really in the first quarter is, you know, can we start to see some results from this investment bank you know that part of what they wanted. You know, obviously the wealth assets are huge for them, the Swiss assets are huge for them, but another thing they wanted was the investment bankers and credit Suiteze really did have expertise in the tech area, as you know, Paul. They have you know, a great reputation and done really well on tech IPOs. And what we've seen in the first couple of months of the quarter is UBS really moving up the league tables for tech IPOs, showing that they might be getting some of that benefit.

I'm looking at the stock here of thank you. I'm looking at stock here, Allison of UBS. It's not kind of flat year to date, but it's up sixty five percent on a trailing twelve month basis. So what's the when you talk to introditional investors out there, what's the call here on UBS?

I'm looking at the stock here of thank you. I'm looking at stock here, Allison of UBS. It's not kind of flat year to date, but it's up sixty five percent on a trailing twelve month basis. So what's the when you talk to introditional investors out there, what's the call here on UBS?

I think, you know, it depends probably a little bit on your time frame. It's going to be a long slog and so I think, you know, the broader look at the company, and as you know, we don't we don't make recommend recommendations on stocks. But I think you know, when I talk about this company from a fundamental standpoint and how investors might be looking at it, it's going to be a very long time for them to you know, sort of get this deal done the execution. As I said, you know, we're looking at mid single digit returns in the year ahead, so there's sort of a long path to go to the fifteen percent return on common equity that you know that they're kind of targeting in a long run, and a lot of work to do. So it depends on you know, sort of the investors' patients. Also somewhat of a show me story. I think that the big gains last year really reflect that they did this deal. It was a very financially attractive just given the structure of the deal, and especially what happened with the at ones and you know the fact that they were able to stabilize the wealth flows and stabilize that franchise. So I think a lot of the initial concerns were will they be able to you know, preserve some of that value or will their competitors pick it off? And I think they did show that they've stabilized it. So we have the foundation and now just need to start doing some of the heavy lifting.

I think, you know, it depends probably a little bit on your time frame. It's going to be a long slog and so I think, you know, the broader look at the company, and as you know, we don't we don't make recommend recommendations on stocks. But I think you know, when I talk about this company from a fundamental standpoint and how investors might be looking at it, it's going to be a very long time for them to you know, sort of get this deal done the execution. As I said, you know, we're looking at mid single digit returns in the year ahead, so there's sort of a long path to go to the fifteen percent return on common equity that you know that they're kind of targeting in a long run, and a lot of work to do. So it depends on you know, sort of the investors' patients. Also somewhat of a show me story. I think that the big gains last year really reflect that they did this deal. It was a very financially attractive just given the structure of the deal, and especially what happened with the at ones and you know the fact that they were able to stabilize the wealth flows and stabilize that franchise. So I think a lot of the initial concerns were will they be able to you know, preserve some of that value or will their competitors pick it off? And I think they did show that they've stabilized it. So we have the foundation and now just need to start doing some of the heavy lifting.

And Allison Paul's looking to put some money to work. He's got his eye on global banks and asset managers, which is exactly what you cover. What stocks do you like right now? And where does ubs fit into it?

And Allison Paul's looking to put some money to work. He's got his eye on global banks and asset managers, which is exactly what you cover. What stocks do you like right now? And where does ubs fit into it?

Okay, Well, as I said, I can't, we don't recommend stocks, so but I will talk about, you know, the fundamentals, and I would say that, you know, one of the big things that investors are looking for this year is a pickup and fees. We think that we will get good growth and fees, but you know, we're nowhere near the twenty twin levels, so that story could end up being a little bit disappointing. But trading, on the other hand holding up really well. The asset values are great for asset managers, right, especially from a mixed perspective. We have equities at record highs. That definitely helps the few prospects because more assets just mathematically turn into more fees and the potential for more flows. The flows are always tricky. They've also been good for the hedge funds. Hedge funds and asset managers doing well. That means Goldman's doing well in their prime brokerage business. They do have more of a bent to those types of customers. But we think trading looks good across the banks. Bank of America is also someone that we're watching, Gating share Bank of America and Wells Fargo, who's a smaller one, but you know, the share games are really more meaningful about for them because because they're smaller, So from a fundamental standpoint, those skew to trading. Like Goldman, Sachs looking like a strong corner. All right, Alison, thank you so much for joining us.

Okay, Well, as I said, I can't, we don't recommend stocks, so but I will talk about, you know, the fundamentals, and I would say that, you know, one of the big things that investors are looking for this year is a pickup and fees. We think that we will get good growth and fees, but you know, we're nowhere near the twenty twin levels, so that story could end up being a little bit disappointing. But trading, on the other hand holding up really well. The asset values are great for asset managers, right, especially from a mixed perspective. We have equities at record highs. That definitely helps the few prospects because more assets just mathematically turn into more fees and the potential for more flows. The flows are always tricky. They've also been good for the hedge funds. Hedge funds and asset managers doing well. That means Goldman's doing well in their prime brokerage business. They do have more of a bent to those types of customers. But we think trading looks good across the banks. Bank of America is also someone that we're watching, Gating share Bank of America and Wells Fargo, who's a smaller one, but you know, the share games are really more meaningful about for them because because they're smaller, So from a fundamental standpoint, those skew to trading. Like Goldman, Sachs looking like a strong corner. All right, Alison, thank you so much for joining us.

Als Williams senior analy She covers all the big banks investment banks globally for Bloomberg Intelligence. She's based down in Princeton, joining us via zoom. I guess my one of my questions is again having worked for one of the firms that now makes up UBS, that being Pain Weber, I still don't know what UBS is kind of globally ambitions are do they do they intend to compete against the jpm Morgans and the Morgan Sailings of the world, or are they, you know, they're a little bit more focused maybe on just a handful of markets, a handful of business lines and not going to kind of compete across the board. I'm not really sure now that they've acquired credits with you know, kind of what's happening there. But I think typically the street rewards, at least for this investment banks kind of just focus, yeah, you know, like Morgan Stanley focusing on the wealth management business, which has been.

Als Williams senior analy She covers all the big banks investment banks globally for Bloomberg Intelligence. She's based down in Princeton, joining us via zoom. I guess my one of my questions is again having worked for one of the firms that now makes up UBS, that being Pain Weber, I still don't know what UBS is kind of globally ambitions are do they do they intend to compete against the jpm Morgans and the Morgan Sailings of the world, or are they, you know, they're a little bit more focused maybe on just a handful of markets, a handful of business lines and not going to kind of compete across the board. I'm not really sure now that they've acquired credits with you know, kind of what's happening there. But I think typically the street rewards, at least for this investment banks kind of just focus, yeah, you know, like Morgan Stanley focusing on the wealth management business, which has been.

So good for them.

So good for them.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on applecar Play and androyd Otto with the Bloomberg Business. You can also listen live on Amazon Alexa from our flagship New York station just Say Alexa playing Bloomberg eleven thirty.

You're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at ten am Eastern on applecar Play and androyd Otto with the Bloomberg Business. You can also listen live on Amazon Alexa from our flagship New York station just Say Alexa playing Bloomberg eleven thirty.

One of the most read stories on the Bloomberg Terminal is regarding former President Donald Trump. He is richer than ever, yet still strapped for cash. To former President's fortune on paper has vaulted to seven point two billion dollars thanks to his newly public media company. In the ticker there's d j T for his initials, but legal strains threatened his finances to more than we welcome. Eric Larson, he covers all of this stuff for Bloomberg News. He joins us here in our Bloomberg Interactive Brokers studio. So, Eric, I'm looking at DJT stocks up another eleven percent. It's had a heck of a run year up to two hundred and seventy percent year to date, three hundred and seventy percent over the past year. A heck of a good run for the former president. So there's net worth, how about cash? Talk to us about those two dynamics.

One of the most read stories on the Bloomberg Terminal is regarding former President Donald Trump. He is richer than ever, yet still strapped for cash. To former President's fortune on paper has vaulted to seven point two billion dollars thanks to his newly public media company. In the ticker there's d j T for his initials, but legal strains threatened his finances to more than we welcome. Eric Larson, he covers all of this stuff for Bloomberg News. He joins us here in our Bloomberg Interactive Brokers studio. So, Eric, I'm looking at DJT stocks up another eleven percent. It's had a heck of a run year up to two hundred and seventy percent year to date, three hundred and seventy percent over the past year. A heck of a good run for the former president. So there's net worth, how about cash? Talk to us about those two dynamics.

Right, So it was actually Bailey's story I was reading earlier about DJT is very fascinating.

Right, So it was actually Bailey's story I was reading earlier about DJT is very fascinating.

He's obviously more than you know, doubled his wealth.

He's obviously more than you know, doubled his wealth.

But Trump testified in a deposition last year in one of his civil lawsuits that he had more than four hundred million dollars in cash. Just last week he said on truth Social that he had almost five hundred million dollars in cash. We're not exactly sure. We can't really exactly verify that, but he had been saying in that court case that he was low on cash, he didn't have enough to post this big bond. So that's kind of our relationship with Trump's cash right now, is his comments in regards to that huge bonds that he that he has to pay for his appeal in that case.

But Trump testified in a deposition last year in one of his civil lawsuits that he had more than four hundred million dollars in cash. Just last week he said on truth Social that he had almost five hundred million dollars in cash. We're not exactly sure. We can't really exactly verify that, but he had been saying in that court case that he was low on cash, he didn't have enough to post this big bond. So that's kind of our relationship with Trump's cash right now, is his comments in regards to that huge bonds that he that he has to pay for his appeal in that case.

And so your story calls out seven point two billion dollars in wealth on paper? How much is that is in Trump media? How much of that is real estate and other ventures?

And so your story calls out seven point two billion dollars in wealth on paper? How much is that is in Trump media? How much of that is real estate and other ventures?

Right, so it seems like the bulk of it is actually on paper. As you mentioned from the from the Trump media, his real estate has always usually been the bulk of his wealth, about like two point seven billion or so. I don't have the story right in front of me, but clearly that's what Bloomberg Billionaire's Index put his wealth at three point one billion before these these verdicts. So the vast majority of that was real estate, and of course there's licensing deals around the world and things like that. So now that with Trump media, you know his wealth is largely from this from the shares, which is fascinating to me, but of course his real estate continues to be you know, his crown jewels of his portfolio.