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Surely that is the discussion here, how to understand what national security is, how to correctly regulate technology at a time where people are talking about the potential influence of artificial intelligence. We turn out to someone who is brave enough to make the commute directly from the inauguration festivities in Washington, DC to the alpine vistas of Davos, Switzerland, Arkansas Governor Sarah Huckabee Sanders joining us now here in Davos.
I am wondering, Governor.
Sanders, given the fact that a lot of people didn't decide to make that journey, are acting like an ambassador fielding a lot of questions.
What are some of the questions people have for you?
Certainly don't need an ambassador. President Trump will address the group here today, although he can't be here in person, certainly dominating almost every conversation.
But not just here across the globe. I think there is so.
Much excitement, so much optimism about him coming back into the White House.
People across the world are excited to see what he's going to do.
And he's hit the ground running and gotten a lot done in a short amount of time. This is somebody who now is coming in as a seasoned veteran. He has been there before, and there's no learning curve. He is getting a lot of things done and in short order, and the people are excited to see what's happening.
Henry was just talking about some of the discussions around TikTok last night on Fox News and this question around what is Nash security. How do you adequately regulate big tech when you have also this focus on celebrating the national champions of US tech companies.
You're here to talk about tech, how.
Do you reconcile that you know, one of the things that we're looking at, and certainly one of the places that we're leading in Arkansas and as governor is you can protect national security, you can look at continuing to grow some of the technology and innovation. But one of the places I think that we have to do a better job is on our young people. We've seen a mental health crisis take place and nobody is immune from it.
And so one of the things that we can do is a better job protecting the young people from constant access and infiltration of NonStop device in their hand. They still need to get outside, they still need to pay attention in class. That's one of the things we've been doing in Arkansas. One of the things that we've talked about here, and I think one of the things.
That I hope to see the United States lead on.
And someone who sees a lot of children, and I think there are a lot of people who would agree with you.
There is this large attention.
Though, and last night we really saw that in display when President Trump was talking about they're just a bunch of kids looking at some silly videos.
Do we really need to care about that so much? Do you agree with that premise or is this.
Something that goes to national security but also.
The heart of something else.
About what it means to have appropriate technology.
Certainly, there can be a great resource in technology. It's a tool that a lot of us use to I think one of the reasons that Donald Trump became president is because he was able to use technology to get his own message out and go around the mainstream media and talk directly to the people.
And so I think it can be a great tool.
However, it can't be something that our kids are spending ten hours a day doing, and that's one of.
The things I think that we have to look at.
One of the things we're talking about a lot, the pressure, the anxiety, the depression, the suicide rates that have skyrocketed in large part because a total access and connection to social media, and so protecting kids I think has to be one of the big topics of conversation.
Do you think the President Trump agrees?
You know, that's a conversation I haven't had with them, but it's something certainly that I look forward to talking about with him as he takes the reins here at the White House.
Do you think there is clarity about what national security is and what is it?
I think there are some big differences in kids versus national security, and whether or not they can focus in the classroom, and whether or not other countries are taking all of our data. Those are very different conversations. This is a president who I know cares a lot about protecting American interest and is always going to do what is necessary to protect our country. You've seen him taking action on day one, so I have no doubt, no concern over that.
One of the things I do think that has.
To be a greater part of the discussion is the mental health impact that it.
Is having on young people.
You're on two panels. One of them is talking about this.
The other one is with Kentucky Governor Andy Basheer, who is a Democrat, and I believe you guys are staying in a similar place and imagining the sharks of.
Jets walking past each other.
It's a panel about the role of governors and states in a presidential transition and implementing policy. And this comes at a time where President Trump has basically said get on board or face the consequences.
Do you think that that is the right way to get states on board.
I have a great partnership.
I want Arkansas to be one of the leaders of a lot of the initiatives of the President is pushing we're going to be one of the biggest champions, and I want us to be a place of innovation and use Arkansas as a pilot for some of the programs that we're rolling out. I think on healthcare, there is a lot of opportunity to do things in a better way than what we've done, and I think this is a president that's going to be able to do that. A good relationship with the states is a good thing.
We shouldn't be in constant battle between the federal government and our state governments, and I think that's one of the things that you'll see both of us talk about how we can have good cooperation and get things done that benefit the people that we govern.
It's a good precedent for funding to be withdrawn though from states that.
Don't comply with certain orders from the president.
Look, I am in agreement with where the President is and the things that he's trying to do, and I think we're going to be able to not only improve things happening in Arkansas, but hopefully things happening in all fifty states. This is a president who's coming in with a huge mandate. People want to see his policies enacted. They know exactly what they signed up for because they've seen his leadership style, and he won in an overwhelming margin,
and that's what people are hoping. He's going to come in and deliver on all the things that he's been talking about over the last couple of years.
Have you talked with Governor VISHERI yet.
I haven't yet, but I'm looking forward to spend some time with him this afternoon.
But you guys both are the children of governors, I believe, and you both are coming to the stage, but from opposite sides, one Democrat yourself a Republican.
Do you expect it to be collegial?
Do you expect it to be a working together kind of feeling, or do you feel like that divide is getting more entrenched?
Absolutely?
I think that you know, governors have a unique perspectiveive, and certainly I want to promote and bring the business and economic development to my state. I know he wants to do the same. But there's some common threads and some common challenges that we're both dealing with. I think that we'll have a great conversation. I'm really looking forward to it.
One other reason why you're here is to meet with all these business leaders about potentially investing in Arkansas. Are there specific projects that you would like to see finance, There's specific streams of business that you think would be helpful to get international investment.
Certainly, one of the biggest areas of growth in our state is aerospace and defense.
It's now the number one export from Arkansas.
Arkansas has the best economic growth of any state in the country over the last year. We're the number one state for people to move into anywhere in the country. There's a lot of great things happening in our state. We like to teut that we are home to fortune, one little retailer you may have heard of called Walmart.
So we're not.
Afraid of big business and success stories in Arkansas. And we have the opportunity to meet with a lot of companies and let them know that we're open and we're ready for them to invest and make Arkansas their home as well.
How many meetings are you having me how much did you get just an influx of people who wanted to meet with you, And did anyone surprise you or any places surprise you where they came from.
It's certainly a busy couple days and look forward to making them a really productive few days with a lot of good things to take back home to Arkansas.
Are you concerned though, that there's this feeling that maybe the US is putting itself first of the loss of other countries.
Not at all.
I think it's important.
Everybody is going to be competing for the people that they either governor or lead, and that's exactly what you're going to get in Donald Trump. It's somebody he hasn't been shy about the fact that he wants.
America to win.
There's nothing negative about wanting the best for your country and the people that you lead, and I think that people want to see him do that, and that's why he won reelection in such.
A big way.
Governor Sanders, really appreciate your time and you're making the trek from Washington, d C too, Davos. Not many people that Arkansas Governor Sarah Hockeyby Sanders.
Did blood block.
Jamanabaschi leading our coverage added Bay with us here in Davios, Switzerland and sitting down with a special guest, Hey, Jamana, Hi.
Guys, Yeah, good morning to you.
So yeah, sitting with me right now, is this Excellency Mohammad al Jadan, the Saudi Finance Minister. Really good to be talking to you, my colleagues in the US. We're just talking about the excitement many people, many industry leaders feel about.
The prospects of the US economy this year.
But my question to you is how does the rest of the world feel about it. What do you think the return of Trump means and his talk of taris for global growth.
Thank you very much for having me, and I think a very strong US economy is a good thing for the world and the world economy. The same applies to other major economies. If they go south, the whole world would really feel it.
So we are excited the world gets called exactly.
I mean, we are excited about the US new administration, and we are excited about the US economy.
We think the.
Next few years would actually show strength and the US economy and that.
Will be good for the whole world.
Obviously, we need to be watchful, we need to make sure that we also support cooperation and multilateral institutions. But I am confident that the US economy would be positive and I think that I m F and their latest report showed that the US is on the upside.
It seems like His World Highness the Crown Frience had a constructive call with President Trump yesterday. A lot of reports this morning saying that Saudi plans to invest up to six hundred billion dollars in the US over the next four years. For people not familiar with those figures, that's about fifty five percent of Saudi GDP. You're the finance minister or are you going to get that money?
This is I mean Saudi Press Agency actually issued a sesatement on this. We enjoy a very strong relationship with the US over the years. I mean we have a relationship that spans over eight decades, very strategic based on economic, economy and trade and will continue. I mean we have currently we have over seven hundred and seventy billion dollars of investments in the US, So this is not really new. This is a combination of investments and procurements. We have
very ambitious plans in Saudi Arabia. Saudivision twenty thirty is moving on plan and our relationship budde Is with the US, with Europe, with China will continue to be flourishing. As part of that reform that we are doing.
I guess I just think about it from a funding perspective, because there are mega projects that Saudi Auba has committed to, and we've talked about the reprioritization of and the redirection.
Of funds over the last year.
But then there are new projects that Saudi is taking on as well. The World Cup, for example, Cutter spent two hundred billion dollars on that. So the question I think from the investment community is if you are planning on borrowing more, how much balance sheet deterioration are you willing to tolerate.
We have in Soba have a very strong actually fiscal buffers very strong, and we are very very careful about what we spend, how we spend it. Undred ten on that spend, we have a very clear plan. We moved from just three years fiscal plan and to actually a long term fiscal plan. We've concluded this last year, so we know exactly what we are going to spend, where are we going to get that money from, how we are going to make sure that it helps the economy and not.
Cloud out the private sector.
That is a long term plan and all of these projects will fall in place within that context. We recalibrated what we need to do, and we wanted to make sure that we prioritize what would make matters. We wanted to make sure that we don't overheit the economy, so we extended some of these projects over an extended period of time, and we wanted to make sure that our private sector benefits.
So if we do too much.
At a short period of time, the private sector will not catch up, so we will have a lot of leakage from our economy by importing a lot of things. So we wanted really to balance it, and that's what we did in the long term plan. I think if you want to see how this actually is reflecting in Saudi, you will need to see what is happening with the people in sauda Abia. They are embracing this change. I mean if you visit and you could see it, they
are really part of that change. You could see it in the PMI and the Purchasing Managers Index, which is very high.
I'll get to the growth question in a second, but I do just want to ask on the funding. Can we expect further sales of the government's taken ARAMCO.
There is no extra funding than what we have planned for the long term plan. And you know Aramco or other assets is bart of a plan, so there's nothing immediate to talk about. But this is actually bart of a long term plan that we started in sixteen.
Yeah.
On the growth, IMF actually marginally downgraded the Saudi estimate for this year, looking to three point three percent for twenty twenty five, and partially on back of Saudi's lower oil production, and of course this was a decision taken by OPEK plus. And I just wonder how long you think Saudi Arabia can continue with producing less and yet continuing to achieve those non oil GDP figures that you target.
This is actually a very good question, spot on, And I think the whole idea behind Saudivision twenty thirty is exactly this is to deal with these things. We were an economy that is totally dependent. When a commodity and the voluntility of that commodity impacts the economy, it's the boom and bust. We are decoupling the Saudi economy from the oil economy, okay, And you could see that and actual numbers, I mean numbers does not lie. The NANOILGDB bar to the economy is now about fifty two percent.
The private sector investment as a percentage of GDB has seen a structural change. You don't see private sector investment as a percentage of GDB changing very quickly in any economy. We are seeing that in Saudaibia jumped from about seventeen percent now it is twenty four percent. That is a serious shift in the economy. The consumption is very strong. I mean you look at the confidence both at the business side but also at the consumer side.
It's strong.
Yeah, your excellency, just around things up.
Saudi Arabia for so long has been a place where investors from around the world have come to receive funding, to receive capital. How successful has the Kingdom been in terms of mobilizing these funds domestically and encouraging the international community to actually invest into Saudi Arabia.
Very important point.
A lot of focus on f THEI. I'll cover f THEI, but I will cover actually prerequisite for the FDI.
For FDI to.
Come, you need to make sure that actually you attract your own local investors to invest in your economy. These are their colleagues, their friends, their partners elsewhere in the world. And if you are not able to convince your local investors to invest, you will not be able to convince
their foreign investors. And we are achieving both. I think we are seeing significant growth and local investments in Saudi Arabia and we are seeing I think Misa, your investment published a few weeks back, what is the targets under the Saudi National Investment Strategy over the last four years and what have we achieved in terms of FDI And every year, without failm we came ahead of the target and.
That is continuing.
I think Saudi offers significant opportunities for investors local and international in multiple years of space where we have competitive advantage.
You're acceeny. I'm going to leave it there.
Thank you very much for sharing your perspectives about the outlook for the Saudi economy and funding as the kingdom continues to implement Saudi twenty thirty.
State paliucasat down with us and Lisa linds in and goes apart from sports.
Okay, okay, hold on a second.
You've been talking about at Alerta for like about three years now, and you're so excited, and I know that the whole thing is going to be about Atlanta, and I think that that's wonderful, but it's a.
Lot of teles in a lot of places.
Really, you're going to do.
This in the capital private equity Senior advice that joins us now Thine Steve, Hello, good to see you.
Great to be here.
Let's start with sports.
I thought it was in ESPN.
We had to get on that night because that's Atlanta five NOL. What a story for that team this year.
You know, I'm still pinching myself.
It's just incredible and very happy for the team and the coach and the Procrassi family. It's been great for Bergermon and Milan and it's just really exciting.
I don't need to get too excited, but can you win the league this year?
You know the old adage take it one game at a time, so we just was going to do. We've got to get healthy. We got a couple of guys that are hurt, but they're playing fantastic.
It's amazing to see Barcelona up next and maybe straight qualification to the not the next round, but the one after that, right big, that would be a big big for European would go to Barcelona.
That's the football. Okay, I to the basketball. You should do best.
Actually, there's a lot of.
Reports that you're after majority ownership of the Boston outtakes.
How much can you tell us this morning?
I can't comment, as you know, on any deals, including.
That deal, okay that one specifically?
Can we talk more broadly about the NBA franchises and what's happening there, because I have nights at the audience levels TV audience levels have fallen off in some parts.
What do you think is behind that?
You know, I think I think it's fragmentation of viewing, and I think the viewing leaderships are really good when they can count it correctly and really find out who's watching where. So I don't think there's a concern there in the league is really strong and has more stars than ever, and you know, it's been fantastic, So I think that's a that's kind of a bump in the room.
So we've covered football, we've covered basketball, any other sports that you're going to buy a team in.
No, I'm not in a cricket so I'm good.
Well, there's I mean, honestly, there's actually a lot to talk about it and whether you're going to buy another team?
Are you going to buy another team?
Who knows.
Okay, All right, well let's move on because right now we talk about Davos and it hall has been dominated by incredible optimism. America is going to boom, and Donald Trump what's he going to do?
Of course, there's also overlay of artificial.
Intell what's been your biggest takeaway about what people are concerned about with the Trump administration?
Well, I think first of all, this Estavos is all Trump, all AI. That's all people are talking about. And the Trump issue is, you know, what's going to happen with tariffs. You know, Europe's worried about tariffs everyways, worried about tariffs, What's going to happen with the Ukraine, What's going to happen with the American economy and protectionism? That's that's their worry.
And on AI, you know, AI is for real.
It feels a little bit like you're in nineteen ninety nine Internet boom.
So there's a lot of hype, but there's a lot of reality in AI, and AI is going to change everything.
I view AI as almost building the railroads and the interstate.
Highway system in the US.
We're going to need to have that over the next twenty years or we're going to fall behind. So I think it's a legitimate discussion on AI, and they came out with the Stargate program, which I think is fantastic because other countries are getting ahead. Is investing billions, UE is investing billions, Sauda's investing billions. I think the US has to get out ahead of that trend and it's going to affect everything over the next twenties.
I'm really excited about it.
As an investor. What's your approach to one of this?
How do you think about the opportunities you mentioned the late nineties, it took a while to find out who the ultimate winners would be. Are you expected something similar this time around?
It's going to be a little different because because I look at AID, you had winners like Google that were kind of natural monopolies. There can be many variants of large language models, so there can be a global large language model, there can be probably four or five of those. But now the real use is going to be vertical ones, so tailoring models with the data specific data for say healthcare, specific models for transportation with transportation.
Data in it.
So I think vertical AI models will be the ones that start to impact the economy, and then the other ones are going to grow and we need that infrastructure, and then what's going to happen is from that you need power. Fusion is being talked about and is around the corner all the fuse and comp I look at
or getting close to actually generating energy. The models are showing soon they're going to generate energy and build these large tokmacs that's going to have to power all the centers with all to get also the GPUs, because if you look at the power users of AI, it could be the entire power.
Right now in the United States.
So I think this stargate program or program like it is needed and we've got to match those other countries, and that is going to create a virtual sloop of spending building the infrastructure and be great for America and revolutionized healthcare healthcare as well.
I know that you've been very active in that space, in particular, particularly in the speed that it will take to put new prescription drugs on the market using different machine learning techniques. I'm just wondering, is that your main focus right now of investment when it comes to AI or the other regions that you think are promising in the application in the near term, not just that there's these long term goals.
Well, I'm focused on the healthcare because I think that's the number one. But it'll be helpful in energy and finding energy and processing energy.
It'll be helpful in transportation, It'll be helpful. It's going to be embedded in every business.
And I think, like liquid AI, we're invested in that doesn't require it's built. As we talked about last year, they studied a worm's brain in MIT, Like, who would do that?
There's three hundred neurons in a worm's brain.
I think it's fout.
I mean neurons do you think is in your brain?
Three hundred and one? I'm just kidding.
The average person has eighty six billion, You guys probably eighty seven each.
But you can come on again.
If they come out with an.
AI system that requires eighty percent less power to load it, and that means you can put it on edge device, so to be on your phone. So you're going to have you know, your assistant on your phone. This is going to start to be in all the phones. It's going to kind of revolutionize the way our lives are.
One aspect of this Davos. It's so interesting is that there's some real tensions that need to be resolved, especially as everyone's talking about artificial intelligence. On the flip side, Donald Trump talking about national security. He's talking about the chips in the US that could potentially transmit data back to China or one of our other adversaries or competitors. And I'm just wondering as an investor, how you understand what's national security and what Well.
It's difficult.
You got to follow the government and it changes all the time. I think in general, we do need national security, but it has to be focused, it has to have a purpose, and hopefully they'll have rational people that decide, you know what that is.
Do you worry that some voices we'll get a bigger say in the future in the private sector.
Uh No, I don't worry because we have a system that I think will work in the long term.
And there's going to be a lot of it.
There always has been fighting of different companies for different things, and so so we'll get through it and hopefully we will do the right thing. We've got to Congress, we've got we've got the court system. So the United States is very stable. So I do think we need cybersecurity and we need security in general. Hopefully we can have a datant with China so we don't don't have that going on. And I think Trump, you know, wants to cut deals, you.
Know, to move the economy forward, and I think that'll be a good thing.
I'm sure a lot of Europeans have asked you on your opinion on what the next four years is going to look like.
What have you told the Europeans when you ask that question?
You know, I think the next four years you're opions.
I've been in many meetings here with health ministers and all sorts of ministers, and what they say is the EU really isn't a full unions. They use the same money, but there's not an integrated capital market.
There's not integrated in anything.
In terms of starting a business, you need to fill out one hundred pages of forms in Germany and different ones in Portugal. So many of them talk to me and say they need to create a twenty eighth state with a set of rules, a virtual state with one set of rules to start a business and one set of of a bankruptcy.
Bankruptcy is different in every country.
You can't have a great capital market if you're dealing with twenty seven different bankruptcy kills or twenty different ways of doing things. So I think it's a great idea to start a twenty eighth virtual European state, and businesses can opt to be in that or be in one of the twenty seven. But it's hard to be in both of those at the same time. So the big
advantage the US has is it is one market. It is has one set of regulations, so we have a let up and hopefully we will make that even better in the next four years.
I want to return to where we began, which is sports, and my sport, which is auctions.
I'm looking at bond auctions, which I think is right to caut a time. Well, I know, hold on a second, No, I'm serious because I wonder how much you're watching what so many people here are worried about, which is that all of this optimism, all of this you know, happy talk about getting together and really focusing on growth could get really styn made if you start to see bond yields climb and you start to see the fiscal pressures really come into play.
How concerned are you about that?
I'm very concerned.
You know, all the data would show when you have an increase in the money supply as big as it's been in the last five years and a large deficit, that's going to cause higher interest rates and inflation. Those kind of go hand in hand. So my biggest worry is is inflation going to get out of control and keep those interests up there. I think house mortgages are costing seven percent. We definitely have to increase the supply,
and they're looking at programs to do that. But with seven percent mortgages, that's not great for growth.
You mentioned ninety nine, and we all know what happened after nineteen ninety nine, and there is this feeling that there needs to be a washout and some of the startup companies to say deal with technology that continues to evolve. Is that the big concern that this kind of increase in rates could really catalyze that kind of washout is that what you're keeping your eye on.
Increase in rates definitely catalyzes washouts because when money is free, there are no washouts.
Right, we had free money for a long period of time.
Now, the good news is for most of my life too long life, most of my life. Regist rates have been t bills have been five percent, five and a half percent, so it's not anomalists.
But yeah, that is the fear.
We've already seen a lot of the company's valuations go down and good White does, so I think we're.
Kind of through that.
I think there is a lot of hype on AI and probably some fundings at very high levels, but I don't see it like it was in ninety nine, where everything across the board was crazy.
I used to walk into a room San Francisco.
They give me a term sheet and they say, we have a company that's going your internet company is going to reduce the supply chain cost of medical equipment.
That we're valuing the company in a one hundred million and has no revenues.
Is this is the idea and you have two hours to decide do you want to invest ten million one hundred million valuation?
I'll pass.
I was. I was fall out of my chair. This is a real story. I said, thank you very much.
And n ninety nine of those went bankrupt, and then we had Google and a few other ones that did well.
That's not that's not the situation we're in right now.
Stay you know, John, it's going to say great to see you, Good luck to all your sports teams, as we say for without a doubt Steve Paliuca a bank capital and force Amelia so well from Damos, Switzerland to the World Economic Forum, the big event, Ted pick the Morgan Stanley chairman and.
See fantastic good one year in the city. Yes, I'm by one year and three weeks. How does it feel amazing?
Yeah?
You know, you come into this job and you you want to do good, but you discovered is the quality underlying franchise and the people, and it's a wonderful franchise. I got the keys to a great car and the partnership is alive and well now you've got.
To hit the ground running.
Yeah.
American bankers running around CEO very very very happy here in Davas, Switzerland, the CEOs and American bankers and you one of them.
Are you optimistic about this year ahead?
And what is it about the incoming administration that gives you that confidence?
Jonathan?
I am positive because it is definitely a change in tone. It just feels like the overall framework is one where more interaction between the public and the private sectors. Well, you guys were talking about the last couple of minutes. It can't be state actors alone, and it can't be private companies alone.
So the fact that.
There's real dialogue building, I think that's a huge plus. And on the European question, sort of interesting comment too, because I think there may be some catalysts to some now reflection. You know, there were the droggy papers and people read it, they kind of read it, but there was nothing capital markets, union, banking union, kind of European sort of self strength. Maybe this is a cattle some real conversations. So in that sense, I think it's positive too.
Are you hearing about actual business activities stemming from that change in tone in Europe or is it just sort of a conversation at this point.
Well, I mean we're like, what twenty five basis points into the new administration, right, We're just getting going. But yeah, hell of a lot more than you would expected two or three weeks ago. One thing, it's you know, it's constructive.
One thing in your earnings that really stood out as a stock trading revenues that really boomed. And I'm wondering this has been a discussion about how risk on things have been feeling certainly at Davos. But through the last couple of months, do you see that waning at all or is it just continuing to amp up in terms of risk taking.
Well, you know, when you become a CEO, one thing is for sure. All of your children are equally beautiful. But our equities business is one of our more beautiful children that I adore. And yes, they put up some great numbers, and I think that is a reflection on just the quality of the underlying franchise, but also a sense that people want to allocate to a little more risk, but importantly they kind of want to get beyond the
index level. You guys talk about this a lot, right, sort of index level equity risk premium relative to sectors. And I think one of the positives here is we're talking about deregulation the energy space and energy transition. We're talking about the financial services space, and yes, you need to own the six because they are money machines and great companies, but how about the rest of the four
hundred and ninety three four hundred and ninety four. And I think some of that dispersion getting kind of allocated across teams and sectors and around the world. I think that's a multi year trend. I think we're early on that it.
Concentration is certainly a risk factor that a lot of people are considering. Another one is the deficit and the cost of interest payments for the US government, for you, for the capital market business. Is that a risk more generally that you've take even the team of focused on.
Yeah, you've been talking about that a lot, and I'm sure, and I think it's important because if you don't talk about it, it sort of says, you know, there's no canary in the coal mine, right. But I do think there is the fact that there has been so much attention given to this, and you have folks like Best
and coming in who know the bond market. It has a sort of reaffirmation that we got to look at on that Simpson balls, you know, here we are these years later that hasn't even said, you know, term premium is still pretty narrow, so like we haven't seen the long bond really move. So there's an underlying confidence. I think the question is what kind of growth can we generate? I think so the conversation that one would have is which comes first, sort of the potential inflationary effect of
tars or the positive deregulatory effect. And I think that's going to be one of the things we know is that there's going to be an ongoing dialectic. You know which policy function can be transmitted more quickly than the other, and I think that pivoting and transitioning, and that's as important.
Do you think it holds back activity that degree of uncertainty given how confident everyone is, and Lisa, especially me too, we get nervous when everyone in Davos gets ready.
Yes, contra indicator.
Does it hold.
Back activity without having the clarity on what these changes are going to look like?
I think part of the dilemma is that the vernacular of whether we're really moving with animal spirits as whether we see a bunch of M and A prints like where are those m and announcements? And the reality is, over the last number of years, we've had I think two major uncertainties, right the end of financial oppressions zero
and zero. Is that finally passes and do we kind of know where rates are going to be and we can focus on the detail of whether there'll be you know, one or two moves or none at all, But at least we generally know that for the next period of time, the US for history rate is somewhere in the mid forest, and then you can apply discount rates for country risk and the company and the rest of it.
So that's kind of pass us. So that's an uncertainty that's.
Taken off the table if you're a CFO and you're a board room. The second set of uncertainty has been around sort of the end of the end of history, which is the resumption of nation states and the like. And one could argue, well, there's a lot of uncertainty in the world. I would argue the combination we're having some sense of a rate framework and having some sense that things are gonna happen in the US, in Europe, around the world. I think it galvanizes the corporate community.
And so the question is how much does the market discount of how fast will that be? And I do think important catalysts to this will be there are the better part of nineteen hundred companies in the private equity space that have a billion of aggregate value five years of life on average. Those companies need to move so at some level I couldn't tell you exactly the pacing of that activity. But we've been below trend line in the M and A market. We talked a couple of
years from now. I think we'll be a trend line or higher. I'm pretty confident.
I think it's going to be M and A. I think it's going to be IPOs and everything.
I think we've been talking about. You've talked about so much the sort of paucity of investable names, especially when you get past the Big seven companies and they're sort of small cap orphans without research. I think there's a Yes, it can be painful starbox for a young company to be public, but you get enduring long term value from shareholders that actually can also add some value, and you
can use that currency to make other acquisitions. I think the IPO product is alive well, and I think only what's happened as a sort of financialization of the markets is the intersection of private and public that's come of age. So maybe you don't go public in the classic Nasdaq and New York IPO at the first. Maybe you do some hybrid capital for a while, and then you go public alla over a full capital structure.
One area that you've brought in one of your babies that's very beautiful.
That I'm sure you talk about is your wealth management unit.
And I'm serious, it's a big baby.
It's a big baby, big beautiful baby.
One of the drivers of revenues for a very long time. What's been the challenge in accumulating assets in the wealth management growing assets to degree that you really have wanted to?
Well, you have a massive denominator, right, And I think what's happened is we were now the better part of a trillion of au M between wealth and investment manager. And if you look at sort of point to point, what have assets done? And obviously markets higher markets, health, the assets in one year went up by a trillion three So people say, okay, you raised two fifty Well that's a huge number. And for me at LEASTA, what's
really important is how is our funnel working? Like think about our wealth business is sort of having three parts self directed e.
Trade.
We're seeing transaction activity really kicking up. That's clearly a positive signal part of what you're asking about. In the sort of pure equity space, we have this workplace business. I want your stock plan business because then I can do factory floor to CEO and then the fee based advisor fifty based points per annum, and the fee based advisory growth is quite impressive, quite impressive, and it's going to continue for years to come, especially if clients need to allocate across sectors.
You've made a lot of acquisitions in the past, any in the pipeline planning any further types of tie ups yourself.
You know, it's interesting we see stuff, but I really love the durable growth organically that we have in the two major major business in the investment bank and the wealth and investment manager. But over time we'll continue to look at stuff as we a Cree Capital.
You've got one minute left on the places in Have you spoken to the president?
I have not, not recently.
Right if you have the opportunity too, and Davis will today to throw a question at the incoming president the comment, President Donald Trump, what would you ask him?
I like the I like the quality of the questioners you have I do.
I like the quality of the question.
And I was in the mix and you had one what would that question?
I think the question I would ask is one where it would give him the opportunity to sort of speak to the possibility that he's thinking about a lot of different possibilities on a lot of different issues, something along the lines of are you open to taking idea flow around a whole bunch of different spaces and give examples. And I think my guess is the answer that he would give is yes, and I'll give.
You examples of that.
And the reason that's important is because I think we're so early in this administration, people are trying to sort of weigh how much is tactical versus how much is baked. I think there's a lot of discussion and people it wouldn't be so much for him, but people understanding this is a real conversation taking place on a whole bunch
of important issues and we're only five days in. I think people hearing that will give confidence that we are in the early stages of the dialectic and there's more to come.
Ted, I appreciate your time, Thanks us for having you guys, Thank you sir.
Safe travels back to New.
York now, Avid listener and watcher, We.
We appreciate that.
Than you got to come on again soon.
Ted Pick, the chairman of CEO of Morgan Stanley. This is the Bloomberg Surveillance podcast, bringing you the best in markets economics, angio politics. You can watch the show live on Bloomberg TV weekday mornings from six am to nine am Eastern. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and as always, on the Bloomberg Terminal and the Bloomberg Business Amp.