Good morning. It's Thursday, the fourteenth of September here in London. This is the Bloomberg Day Vacuate podcast. I'm Caroline Hepkin.
And I'm Stephen Carroll.
Coming up today, Goldban Sacks fires several transaction banking execs for compliance lapses.
The former Prime Minister Theresa May tells us that Britain should look for ways to compromise with China.
And we take a closer look at the one and a half trillion dollar private credit market and why it's offering a ray of hope to gloomy investment bankers.
Let's start with a roundup of our top stories.
Goldbn Sachs has fired several transaction banking executives over compliance lapses. With more, here's Bloomberg's Crispece.
According to a memo seen by Bloomberg, the Wall Street Giants sacked a number of senior figures who'd communicated on unauthorized channels and failed to comply with an internal review. In a statement, Golden Sachs said they wouldn't comment on individual cases, but that they take communications policy serious and
expect all personnel to comply with it. The news comes as financial firms face increasing pressure to police employees interactions following a crackdown on the widespread use of WhatsApp and other unauthorized apps. Last year, several banks, including Goldman, were hit with two hundred million dollar fines over a failure to monitor and archive work related messages. In London. I'm Chris Pitt Bloomberg Radio.
Now.
Citygroup is preparing for a wave of job cuts as the bank's CEO, Jane Fraser, looks to restructure the Wall Street giant. The company will now operate five main businesses and eliminate the three regional chiefs who oversaw operations in about one hundred and sixty countries. Jane Fraser says that the shakeup will have a big impact on the business.
The changes are the most consequential changes to how City will be organized and run that we've made in almost twenty years. And what this move enables me to do it not only flatten the organization, but it also enables me to be much more directly involved in making sure that those businesses are performing.
Fraser's decision to reorganize the bank will result in a number of job cuts in back office functions. Sources tell us that it doesn't yet have firm targets for how many jobs will be affected.
The chip designer ARM has priced its initial public offering at the top end of its range to raise four point eight seven billion dollars in the largest listing of the year. Bimberg's Charlie Palace reports.
It could give a major lift to long suffering equity markets. The chip designer, which is owned by SoftBank Groups, sold ninety five point five million American Depository shares for fifty one dollars a piece. ARM had marketed the shares for forty seven to fifty one dollars each. At the IPO price, ARM is valued at about fifty four point five billion dollars according to Blue News calculations. The shares will begin trading on NESDAK under the symbol ARM in New York.
Charlie Pellett Bloomberg Radio.
The former Prime Minister Teresa May says that Britain needs to find ways to work with China. She teld Bloomberg. The world's second largest economy can't be ignored.
You can't ignore china huge economic presence across the world. Although the Deputy Prime Minister identified it is the number one state based threat to our economic security. But it's a huge presence economically for businesses, but also of course in terms of the way it has reached out across the world, sometimes been able to take a position in countries because the West has not been there. We should learn from that.
May's words come as the current Prime Minister, if She Sunak, faces a dilemma over how to respond to allegations of Chinese spying in parliament. Hawks in his own party are pushing for the government to designate the superpower a strategic threat and revoke China's invitation to a key AI summit this autumn.
Elon Mosk has called for an artificial intelligence regulator after a closed door send its summit of more than twenty technology and other leaders. Speaking to reporters after the meeting, the billionaire warned of the dangers of the technology.
You shoulding in the future as a series of probabilities as opposed to certainties.
But there is some chance that above zero that AI will kill us. Well, I think it's low, but it there's some chance.
Musk himself, as a prominent AI investor, He was joined at the meeting by organized by Senate Majority leader Chuck Schumer, other major tech CEOs included Mark Zuckerberg and Bill Gates.
The European Central Bank will decide later whether or not to deliver a tenth straight interest rate increase. Economists surveyed by Bloomberg are split almost fifty to fifty between a hold and a quarter point hike, whilst markets believe that there's a sixty five percent chance that the the ECB
will opt to raise rates. So the decisions due at one fifteen pm London time, with the ECB President Christine Legard due to speak to media half an hour later, and we'll bring that to you live here on Bloomberg.
The UK housing market is continuing to slow, with prices in August falling at their fastest rates since two thousand and nine. The Royal Institution of Charted Surveyors says inquiries from new buyers are down and fewer homeowners are putting their properties on the market. Cyberin Rubinson from Ricks says rents are also being pushed up by a gap between demand and supply.
When we ask our members up and down the country what they think will happen to rents going forward, they say they're going up. So it's really almost the reverse situation of what we're seeing in the sales market.
The survey also highlights the growing toll being taken by the steep rise and interest rates delivered by the Bank of England and its bit to tame inflation.
Color.
I was about to ask if you're looking for a new job, and I realized how Fastive aggressed that if I said it out loud, let me explain, Let me explain. So we had been Perhaps you may have seen the stories around the set about how Gannett Media Group in the US was recruiting a Taylor Swift reporter.
Well, this one, which I thought might be more up your streets.
They're also looking for a Beyonce reporter now for USA Today and the Tennessee. And so this is of course part of why these artists are such a massive impact, as we've been talking about on this program on the economy, is their tours, as well as big ticket prices, involve huge spends on things like hotels. People are traveling to see these artists perform as well. They're seen now as being important enough to have their own dedicated reporters from this major US media group as well. So they are
two separate jobs. You can't do both. You have to pick whether you want to be a Taylor Swift reporter or a Beyonce reporter.
And the pay, they're fully remote jobs.
You'll get the chance to travel internationally to follow the stars.
I'm saying you again, I'm not trying to get rid of you.
Maybe, And the pay is up to so between twenty one dollars an hour. Istion about fifty one dollars an hour, so it could add up to as much as one hundred thousand dollars at the highest end of the range based on a forty hour work week.
Look, I'm afraid I have been a journalist for long enough that I remember when you know, being perhaps a fashion writer or being somebody who followed celebrities or pop stars was considered on a lighter end of journalism. But when you look at the data and the number how much money people are spending, you know, to follow that the stars that they love the most, to the tune
of five point four billion dollars in the US economy. Actually, you know that this is very very serious business, and rightly so.
I look, there are two artists that kind of epitomize how much artists need to be a full business model. Now it's not just about making music, it's everything else that goes with it that manages to make them such a huge impact on the economy as well. So anyway, if you're looking for a new job this morning, sorry Caroline.
No, I still love my own program. Tempted as I may be to follow Taylor Swift around the world. Good stuff. Yeah, that's it's a really nice piece that we've got on the Bloomberg terminal for you this morning. Also, though, I want to talk about well, another a woman in a prominent woman, Theresa May, the Britain's second female Prime minister, who took over from David Cameron. She's got a new
book out all about her time in Number ten. Of course, May's tenure between twenty sixteen and twenty nineteen it was dominated by battles over how to negotiate the UK's exit from the EU, despite the former Home Secretary having campaigned against leaving. Now Teresa May has been speaking to Blomberg's
Farci Laqua. May discussed the hard line polarization of US politics, saying that the Capitol Hill riot by a mob of Donald Trump supporters was a quite wake up call, not just to the US, but also to Western democracies that political stability should not be taken for granted.
I think politics across the world has been changing in recent years. I say in the book, I think we live in a more absolutist world, a sense of you're either one hundred percent with me or one hundred percent against me. I think there are some in politics who find it difficult to accept the concept of compromise, whereas we know in politics, in business, in everyday life, sometimes you actually have to compromise. And I think there has
been in some senses. If you look at politics today, there's less respect than there has been in the past, perhaps a courser debate. I don't think that's good, and I think sometimes that puts young people off.
You were very deliberate and precise in your dealings with China. Should Rushie Sunek have flown to China actually first year in office?
I think it's the debate about China is often seems to be in what I described earlier as those absolutist terms, that either you ignored China or you're completely sort of in with China. The answer is, of course, that it's right to be neither of those you can't ignore china huge economic presence across the world, although the Deputy Prime Minister identified it is the number one state based threat
to our economic security. But it's a huge presence economically for businesses, but also of course in terms of the way it has reached out across the world, sometimes being able to take a position in countries because the West has not been there. So we should learn from that, I think. But we have to balance there are real human rights issues with China. You know, I'm involved in
setting up a Global Commission on Modern Slavery. If you look at the recent Global Slavery Index, it identified solar panels being created in China and labor exploitation behind those. So we have to look very carefully, and businesses can make a huge difference in looking at their supply chains.
But at the moment you think we're too hard on China, and is there a danger that if you look at the template of what happened with Russia and the Cold War, we're repeating that with China today.
Well, I think what was interesting in if you think about Russia and the Cold is in a sense both sides knew where the dividing lines were and were able to there was an existence that was able to go into the future with people understanding those dividing lines. And I think maybe we haven't quite got to that point
with China. And it's very interesting if you look at somebody like Kevin Rudd, former Australian Prime Minister, who's very knowledgeable on China, he sets out that as one of the potential ways.
Forward President Trump.
President Trump had given you a hard time. Would you think a second presidency if he wins the next election means for the world.
Well, I'm not going to speculate on the result of an American presidential election, or indeed on the result of parties candidates and who they choose for candidates. I mean, what I would say is that it was I would say, a presidency like no other when we saw President Trump in his position, and it was a more unpredictable, perhaps
and uncertain presidency. I think what we see now, and in a sense the war in Ukraine has helped with this is America again with its Western allies standing up for Western values.
But do you see abuse of power in the US.
What I worry about in the US is the polarization of politics. What I would say, the very hard line polarization of politics, and I, as many around the world in democracies, were deeply concerned about the mob attack on the Capitol and what that meant for democracy, and in a sense was a wake up call because in recent decades, I think those of us in the West have taken the view that liberal democracies were in the ascendancy, that this was an accepted way forward, and we almost didn't
need to worry, became complacent. Actually, we have to fight, We have to work hard to protect democracies and to persuade good generations in our own countries of the importance of democracy.
So that was Teresa May. Her book is The Abuse of Power. She was speaking to Bloomberg's France scene Laqua Look. I think the points that she makes around the UK's attitude to China is immensely important and also kind of democratic values. I think it's worth saying the response from China, you know, has been quite pointed in terms of the
UK's concerns around spying. For example, you know, if you read the China Daily talking about how the UK media too frequently hypes up concerns around intervening in investments that China is making in the UK or in these kind of claims around spying. The attitude in China is much more dubious.
Indeed, and that's interesting to hear Teresa May's view on that as well. Let's turn into a different story now and the boom and private credit markets used to be a niche area, but rising interest rate environment has turned it into a one and a half trillion dollar market and everyone wants a slice of it. That has caused a wave of consolidation in the spaces. Big players are trying to get bigger and smaller firms want to remain
in the game. Joining us now to discuss is our asset management reporter Lukia Giftopolu Lukia, good morning to you, m and A.
And private credit is a hot market right now?
Why well, private credit has become very popular in general because of the rising interest rates. The banks are not lending us much anymore and you can charge very high fees for these products. So a lot of people who are not in the space before want to get in and they're trying to get in by acquisition, by buying other smaller players do the job for them.
So who is buying.
Well, right now m and A is mainly driven by the big traditional asset managers who had nothing to do with this before. And I'll slightly late to the party. So we see a lot of these a lot of these guys just trying to find kind of a superablel private credit business to buy, and they've been driving acquisitions where you speak to consultants, they say, well, you know, M and A is a private trend game right now,
mainly because of them. But then you also have the established players like rs Apollo and Autree, and they would also be looking to buy kind of more high quality staff because they're always on the lookout for for good deals. And there's also a sense that the big guys may want to try and get bigger before the banks decide to come back in and start lending again.
And on the other side, why do the smaller private kind of firms want to sell, Well, you know.
Several reasons, but mainly they're finding a lot harder to raise money so they can't compete as much with the bigger players. The current environment is kind of favoring the more established players. Investors want to go to the to the to the firms that have a longer track record that have the experience with a downturn and more resources
to deal with it. If you know, if very section finally caps, so the small the small firms they can raise as much money and as a result, they can make as many deals and they can pay for top talent as well as it.
This is Bloomberg Daybreak Europe, your morning brief on the stories making news from London to Wall Street and beyond.
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I'm Stephen Carroll.
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