Bloomberg Businessweek Weekend: March 6th, 2026

14:08Tim Stenovec:There's no way that this should be allowed. And I will go to my grave wondering why after 2001, we went into Iraq, which seems to me wholly pointless other than for some sort of 20 year training exercise with live fire. Okay. And not Iran. Iran has been behind all of this. And if we had done it differently, 25 years ago, we would be living in a completely different reality now, and probably wouldn't have President Donald Trump in the White House at all, because we wouldn't have had those forever wars. Our thanks to Ed Price. He's a former British trade official, now senior non-resident fellow at New York University.

14:42Tim Stenovec:That conversation with Ed, we spoke to him early in the week. This was as the war with Iran continued to unfold. Catch up on all of the headlines by going over to Bloomberg.com and, of course, on the Bloomberg Terminal. You can also watch and listen to Bloomberg this weekend, 7 a.m. Wall Street time on Bloomberg Radio and TV, YouTube and Bloomberg Originals.

15:01Carol Massar:Coming up from the front lines of war to the fault lines of the markets, we talk private credit and more.

15:08Tim Stenovec:The Big Shorts' Danny Moses joins us next. You're listening to Bloomberg Businessweek. This is Bloomberg.

15:17Carol Massar:They told us to expect change. They warned us about the transition. But honestly, they forgot the best part. This is the chapter where we finally focus on us. Life MD delivers expert menopause and midlife care right from your home. From hormone health to holistic wellness, Life MD helps you feel your best for the best years of your life. Life MD, it's just getting good. Visit LifeMD.com slash goodlife. Hello, hello.

15:48Tim Stenovec:I'm Malcolm Gladwell, host of the podcast Smart Talks with IBM. I recently sat down with IBM's chairman and CEO, Arvind Krishna, and I asked him, how can companies use AI to its fullest potential to create smarter business? My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side. For example? If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today, with the goal of being 70 % more productive.

16:35Carol Massar:Yeah.

16:36Tim Stenovec:Wow. So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smarttalks.

17:24Tim Stenovec:So let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public, you just type in a prompt and their AI screens thousands of stocks and builds a one-of-a-kind index. You can even backtest it against the S &P 500. Then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market. And paid for by Public Holdings.

18:00Tim Stenovec:Brokered services by Public Investing, member FINRA SIPC. Advisory services by Public Advisors, SEC Registered Advisor. Crypto services by ZeroHash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 p.m. Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on YouTube.

18:31Carol Massar:This year at Bloomberg Invest, the buzz was about adaptation. Investors navigating AI disruption, geopolitical shifts, and the high speed convergence of public and private markets. Yet as the cost of capital remains somewhat elevated, that convergence could be creating some visible friction.

18:49Tim Stenovec:We all remember those comments last fall. J.P. Morgan CEO Jamie Dimon, what he said about private credit, warning that, quote, when you see one cockroach, there are probably more. And just this past week, Jamie Dimon spoke with our own Lisa Abramowitz. He cautioned that there's, quote, a lot of complacency in the market and that inflation is one of the risks, referring to it as the skunk at the party. He's always colorful.

19:13Carol Massar:He gives us phrases.

19:15Tim Stenovec:He's got a great turn of phrase. He does.

19:16Carol Massar:He does indeed. Hey, someone also with a strong view on the market environment, Danny Moses. He is founder of Moses Ventures. He was a key protagonist in the big short and remains a leading skeptic of private credit. Danny joined us alongside Bloomberg News equities reporter, Alexandra Semenova.

19:33Tim Stenovec:You can't predict when we're going to have a downturn, but what might cause it. I'm in the camp that actually the stock market has added such a wealth effect to the economy that it actually could be the stock market selling off that actually slows the economy. So they're all kind of intermixed here. And the stuff we can talk about what I said down there about private credit, how I think it rhymes with previous cycles, but every cycle is different. So let's go there and talk a little bit about how it rhymes with previous cycles. Where does it rhyme specifically and what concerns you? So the whole thing about this cycle is that it's not systemic.

20:02Tim Stenovec:We don't have the risk. The banks aren't there. So we don't have to worry about, you know, depositors being at risk. The similarities are that the banks are lending to the private equity and private capital firms, right? That's going on. They did the same thing to the mortgage companies in 2004, 2005, and 2006 leading up to the crisis. What did they do? They provided warehouse lines to New Century or credit home lenders countrywide. So they went out, produced the mortgages. What did Wall Street do? They bought those mortgages, packaged them, and sent them out to CDOs, and everyone bought them.

20:27Tim Stenovec:Great old cycle, right? Same cycle. The same institutions that are now buying all this credit. And so as soon as Wall Street sees credit turn a little bit, what they'll do is the credit lines that they're now providing into that sector, they'll tweak it a little bit. They'll pull some back. Then what happens? You get left. The reason these mortgage companies went out of business was because they couldn't sell it anymore and it got stuck on their balance sheet. Chair got pulled. So then the real marks start happening when liquidity starts to dry up and it exposes the leverage. So whenever liquidity dries up in any asset class, it exposes leverage and no good asset goes unlevered is basically how it goes.

20:58Tim Stenovec:so. It's been incredible, Danny, to see that stocks haven't been toppled by anything that has happened this year. We have so much geopolitical risk. We have AI concerns, private credit. What is going to be the headwind that actually sends us into a correction or worse? I think it's employment, unemployment. So earnings have been strong enough, I think, to carry the market. I think we've had a broadening out within the market, which has been healthy and other sectors other than tech, which is great. But I think you're starting to see trends potentially in employment. Now, this memo that came out last week that I'm sure you You guys were talking about this Trini memo about what AI could look like in 2020, the apocalypse, so to speak.

21:34Tim Stenovec:There's some truth to it, and you have to imagine what can happen. So you get all the benefits of being efficient as a company, and your margins improve, so you get that now. But we saw already from Block what was said, firing 40 % of their staff. One note literally took pages, it felt like, out of the memo and said, this is what we think we can do now to be more efficient. So those are white-collar jobs, and so that's in the economy.

21:55Carol Massar:Well, to be fair, I think we're all trying to figure out, is that a Jack Dorsey figuring out the future of that company, right, in terms of management and whether or not that is an indicator of what's to come.

22:05Tim Stenovec:And there are a lot of people who say that's, you know, not something that it's, you know, reduction in force that's sort of camouflaged as an AI. Like, this is bloating. We're going to be speaking about this a little later. I mean, he's certainly overhired probably for this pandemic. But what he said was irrefutable in terms of why he believes there would be more efficiency and that he doesn't need humans to do all the jobs that they were doing.

22:26Carol Massar:I want to go back, though, to over-leverage, because I always think about who's exposed ultimately. Like, what happens when the tide rolls out? And I'm just curious how you see potentially a crisis akin to the GFC happening because of private credit.

22:43Tim Stenovec:So I think in terms of it fueling the economy and economic growth, companies being able to access credit is great for employment. It's great for companies. But maybe they otherwise wouldn't have gotten it. Or maybe the leverage is too high. Or maybe the covenants are too light that allow these companies to keep borrowing, modifying loans. As soon as the money stopped coming in or slowed down, I should say, on the institutional side, what did we see? We saw private credit get offered on the retail channels. Well, some of these banks and brokers are incented to get it onto those channels. And that's my point.

23:11Tim Stenovec:when retail investors get the opportunity all of a sudden to buy something.

23:15Carol Massar:Right. You know, caveat emptor. Listen, we talk about this a lot. Yeah, we just talked about Mike Contopolis.

23:21Tim Stenovec:I mean, the idea that it's a signal of something that the market becomes more available, or what he said is it becomes more democratized. So in your view, not a good idea for the everyday investor to have access to these products? If I were a retail investor right now looking to get myself exposure, I would be buying Blackstone, KKR, and Apollo. I'd be buying the parent companies, the large PE firms that have permanent capital, that have a huge fee income stream. That's how I would expose myself. And guess what? I can buy it and sell it in the same day. You wouldn't be putting private credit. I wouldn't be.

23:54Tim Stenovec:Private credit funds in your 401k. If I had a retail broker that called me and offered me that, I don't think he'd be my retail broker anymore.

24:03Carol Massar:Because buying those names are liquid. As you know, like we cover these firms. you can sell and buy easily. But come on in, Alex, because I know you're listening. Yeah, we're talking about retail investors. And I actually wanted to ask you, Danny, one new segment of finance that they're actually foraying into

24:17Tim Stenovec:is prediction markets with kind of the excess cash that they have to spend. What do you think that will look like later this year as prediction markets continue to grow? Well, they're regulated by the CFTC. They've taken extreme amount of market share from the traditional online sports books that we've seen. But it's really interesting because I actually use them as a way to follow the news. Not that you guys don't provide all the news that I need here, but you want to know what's going on in the election in Brazil, and you know that you want to either buy or sell Brazilian equities as a result.

24:47Tim Stenovec:Watch those. Watch what's happening there. So you don't have to trade those markets, but you need to watch it. It's really interesting. One pops up, you're like, I never even thought of that. I mean, I've seen like Goldman Sachs, J.P. Morgan, a lot of big institutional firms citing prediction markets in their research notes really often now. Right, and they're partnering in the media. they want to get it out the more I get it. And listen, it's growing. It's a sector. It's evolving. But, you know, sorry. Well, no, go ahead. No, no, finish. No, it's all about regulation. We talked about during the elections, right?

25:12Tim Stenovec:Go ahead. No, it's where the regulator lies. It's not at the state level. It's at the federal level. So that use case, I think, to a lot of people makes a lot of sense. But the question, and this is a real question that is available on some prediction markets, will Jesus return in 2026, yes or no, doesn't necessarily carry the same weight, I think, with someone like you. That's a sign of something. Yeah, well, you know, I think there's an entertainment value. But I want to say, like, let me give an example of something that I just talked about on my show the other day, which is, will the U.S. debt exceed$50 trillion by the end of 2028?

25:39Tim Stenovec:Even the CBO, which is nonpartisan, has literally$44 trillion. I'm negative on U.S. debt. That's a whole other topic we can go into some other time. But if it hits$50 trillion, to your point, I say you take no, you trade no on that. Because if it's yes, we have a lot bigger issues. What, do we have another pandemic, another financial crisis? We bailed out private credit in the tune of$3 to$4 trillion. How did we get to 50 trillion? So when I see stuff like that, and it's trading at 50 cents. So it's trading at a 50 % chance right now. I watch stuff like that to tell me. And if it starts to move, then I start to dig deeper.

26:10Tim Stenovec:What am I missing? You watch it, but you don't participate in it. Oh, I participate in it. Okay, how do you participate? I trade on Calci. I mean, I trade these markets. You know, will the S &P close below 7 ,800? I trade, yes. It will trade below 70 at the end of the year. Will gold outperform Bitcoin? Right. Yes, I believe it will. And it's interesting to see how they trade. Will the Fed cut? You know, CME Fed Fund Futures will match up directly what you will see on CalShe. But I don't want to set up an account and trade Fed Fund Futures. But I can just trade yes or no, the 4 % chance that they're going to cut in March maybe.

26:44Carol Massar:How much do you allocate to a platform like that?

26:46Tim Stenovec:Not a ton, but enough that it's entertaining. So I do my NFL there now. I'm going to do my Masters there during the golf tournament. So use it all.

26:55Carol Massar:I want to ask you, you said bail out of private credit. Do you think we get to that point?

26:59Tim Stenovec:Well, I would.

27:01Carol Massar:You said it.

27:02Tim Stenovec:Yes. No, if we got to that point. So let me answer your question. Oh, if we got to it. If we got to that point. Jamie Dimon just mentioned that, you know, things are OK. My issue is that things are OK because the Fed keeps bailing us out. There's a moral hazard. And I believe it's in the back of people's minds that actually believe, you know what, if private credit goes, the Fed's going to have no choice but to bail it out. And they're probably right. It will have an impact on everything, impact on the banking system. It won't bring it down. So I'm half kidding, but I'm not. So what did the TALF go?

27:27Tim Stenovec:Again, a whole other segment. But post-financial crisis, the TARP, the TALF, the PPIP, we ran out of acronyms, right? So we're going to come up with another one. It could be a vehicle. The government subsidizes a period of time. What did they do during COVID? They bought the HYG. But people forget, pre-COVID, we were already going through an economic downturn, and it's kind of resurrected companies that otherwise shouldn't have been saved. So if President Trump brings in a new Fed chair who is more comfortable with cutting rates, does this just fuel the problem or make it even bigger? You hope Worsh will maintain some form of independence.

28:01Tim Stenovec:Do you think he will? I hope he does. I don't know.

28:05Carol Massar:Because if he doesn't.

28:06Tim Stenovec:Yes. Well, then you're starting to see what will creep in. Yields will start to move higher on the longer end, anticipating that whatever they do to move short-term rates will fuel long-term rates potentially higher. And you start to ignore inflation. You cannot ignore right now that inflation has stopped going down. And it's taking back up. Is it just for a period of time? We don't know yet. But with oil now moving higher, it seems so. It's something really to think about, the Fed's ability to cut rates from here. Danny, Lisa asked Jamie Dimon this question.

28:31Carol Massar:I thought it was a great one. Are you worried more about inflation or about an economic downturn?

28:37Tim Stenovec:He kind of said both go to that. I'm not that concerned about inflation. I'm worried about the question you just asked, if the Fed starts cutting in the face of inflation. what that would look like. I think the economy is fine, but I think that we've got to watch employment really carefully. And I think that's what everyone's spooked by this AI memo that kind of came out. We're already seeing signs of that, of white-collar jobs getting lost. We're speaking with Danny Moses, the founder of Moses Ventures, financial computer, and a host of a new weekly series, The Danny Moses Show on Scripps News.

29:05Tim Stenovec:He joins us here in the Bloomberg Businessweek studio. Let's go back to what you were saying about AI and the economic effects of that and what that is on the labor market. And dig into the Citrini report a little bit, because you did mention there are parts of it that rang true and other parts not necessarily. And we'll use the Jack Dorsey block news as sort of a jumping off point. Those are white collar jobs. The message was received and has been received. Is that something you see other companies doing over the next 18 months, reduction in force of 40 percent and more? The same way no one was allowed to say tariffs a couple of years ago on their calls, like, don't blame tariffs.

29:42Tim Stenovec:They're not going to say it. But why wouldn't you as a company? You're a publicly traded company. You have shareholders. Your job is for margin expansion and to produce earnings. If you see the opportunity to do it, it's not a non-for-profit. You're going to do it. And so there's no question that these tools, if you believe the AI secular trade is real, which obviously it is, it's going to have an impact. And you're pro NVIDIA and you're pro all this stuff, then you have to believe there's an end user case for it, both in the consumer and company-wise. And so that's the case. By definition, it will be you'll be more efficient I think my takeaway would be we always the US consumer finds a way to make jobs around it you know it could be something that helps guide that technology so there's always going to be movement in that and we've all we've seen massive changes occur the dot-com in in 2000 right we'd heard there be no more Wall Street jobs in 2008 after that after that it's all it's over right finds a way to reinvent itself so I do think I just think it's a think piece to think about okay but there's not a CEO a competent one that's not already thinking, how do I be more, that's even, Jamie said it, that they use it.

30:43Tim Stenovec:Now, he didn't want to say they're firing people, but. I mean, everybody's using it.

30:47Carol Massar:And everyone is telling us that if you're not using it, you're falling behind. And we are planning a Bloomberg, not me, but our team, a Bloomberg Invest event that comes tomorrow. And there's a big AI thing that you and I are both involved in. And it's interesting, I've had some conversations about, you know, people say, what you should do right now is talk to a 25-year-old. They get how you can use these tools. And the idea is that there will be a dislocation, whether it's five years or seven years or maybe a little bit longer between maybe an older workforce who's not going to embrace these tools and then a younger workforce who will.

31:20Carol Massar:And that will create, free them up from some kind of tedious tasks, but create new opportunities. Do you not buy that argument at all that that's ultimately where we end? And it's going to be uncomfortable perhaps because education's maybe going to have to shift around a little bit and teach things that people maybe lose, you know, or would learn on entry jobs that they're not going to. So there's a shift.

31:42Tim Stenovec:So you have lawyers, you have accountants, and now you're going to have AI tutors. So there you go. There's a whole new industry that could happen. No, but in all seriousness, no, but there are huge positives to it in terms of making every company more efficient, making U.S. consumers more efficient. So that comes with more productivity for everybody. So maybe there's an offset there. I think, again, back to this memo, we don't spend a lot of time on it if you people that are that that are saying yes yay or nay on it you got to read it because again it took it's a long read i mean it's a 30 minute what is everybody missing just that it's a think piece to get and it's logic you can't refute that that could happen and it will happen in pieces and like i said yes dorsi example maybe is just a one-off or whatever it might be but i do think you talk to any co they're not going to tell you that necessarily but you know so somebody's spending capex for a reason somebody's plowing money into these privates for a reason And somebody believes you wouldn't be doing that unless you thought there was an economic benefit.

32:32Tim Stenovec:Well, it's a zero-sum game to a degree. So you don't just increase productivity and everybody wins. I think there's winners and losers here. It was amazing, Danny. Just a couple of weeks ago, we saw entire sectors being sold off in tandem, just being dumped because some AI startup said that it was going to replace jobs. Have you ever seen anything like that in past crises? And if that happens again, how do traders navigate that? Well, I mean, so that's software companies, SaaS companies that always thought that was the best model ever. Yeah, I saw it. Your bank's going to close down, so go get your money out and line up around the block, right?

33:05Tim Stenovec:So what did that take? It was the FDIC to come in and say, no, we're okay. TARP, the banks are going to be fine. So, yes, you see that panic happen. You saw stocks. You saw Bear Stearns go. You saw Lehman go. Things actually did happen. That even shocked us to a degree. So, yes, you will always have whatever the kind of sector trade of the time is, and you will always get an overreaction and creates opportunity potential to buy.

33:27Carol Massar:Well, did you trade on any of that?

33:29Tim Stenovec:Which, on the software stuff? Yeah. No, I'm too negative. No, I'm kidding. No, but there are names. There's always one-offs. And I think I will end with this. We're focused on AI and all these sectors. There's so much going on outside of just the technology trades you guys talk about. And all of a sudden, everybody's energy playbook's out in the last week or so. Like, oh, wow, these stocks are cheap if oil were to even stay at 65. These stocks are, and it's 3 % of the S &P, 4 % of the S &P. Right. Could be 7%. So I just think there's always opportunity to move around, and there's certain sectors which will not get AI'd away.

34:01Tim Stenovec:And so as a Wall Street participant, I think you need to focus.

34:03Carol Massar:We want to go back to risks, but what do you think, I mean, what do you find most interesting in the marketplace today?

34:10Tim Stenovec:Gold and, you know, things that no one was, now everyone's on gold. And you're still on gold? Yeah, yeah. Still on gold, along the gold miners. I think it's up trade, yeah. When do you stop that trade? Listen, it's a$35 trillion asset now. No one talks about the size of it, but it's really big. But geopolitics just reared its head again. Debasement, inflation, it works in a lot of different ways. And it's really a play that central banks are incompetent to a degree, and they're going to do whatever they need to do. So if you think the way out of this, potentially, I just mentioned, is the end game of this bailing out private credit at some point?

34:40Tim Stenovec:I don't know. But gold kind of prices all that in. But to your point, these stocks move. The gold miners are up 100%, whatever they are. Of course, you have to take some off the table. So what about spot gold at 5 ,300? I like it, but I play it through PHYS, which is a physical. Okay. But yes, there's ways to express it. But just I kind of watch the flows, watch what's going on. And you got to be smart with it. So I'm not giving advice here.

35:02Carol Massar:Retail also big participants in metals markets right now. Yeah, metal, silver specifically, I think.

35:07Tim Stenovec:Every metals market's a little bit different. I think the commodity trade is here to stay. I really do.

35:12Carol Massar:We're all pulling out our old jewelry. Exactly right. I'm not joking.

35:15Tim Stenovec:You can't even get on 47th Street. There's a line out the door.

35:17Carol Massar:I'm not joking. Having said that, back to risks, whether it's private credit, whether it's geopolitics, what do you see as, especially as we continue to see a president who seems to kind of do what he wants around the globe in terms of either taking out leaders, for lack of a better word. So how do you factor in geopolitics? Because I'm kind of shocked at the trade today. I expected something much worse, and it was much worse overseas, but maybe that makes sense.

35:45Tim Stenovec:Alex and I were just talking about that before we came in. And I think a lot of this was priced in. So what did we see at the end of last week? Oil started to move higher, but not to the mid-70s. But West Texas moved up to, call it 68. Then you had treasury yields lower. And it was kind of odd. Treasury yields were moving lower in the face of higher inflation prints. You're like, well, is the economy slowing? What's happening? And gold was moving higher. And metals were on. So you kind of got some of it. So today is more of a buy on the news type of event. So what happened today? The microcosm I'm looking at today is the U.S.

36:12Tim Stenovec:dollar rebounded. The belief that the U.S. is still the ultimate power, the belief that we haven't hurt all our relationships, that we can be a trusted partner. We've got a little glimpse of what that could be because war always rallies the dollar. I think it's short-lived. So to the point you're making, I think this is kind of a false bounce. We forgot all of a sudden about the AI trade. You have this MFS in the UK blowing up, which would have been front-page news on Friday and today if there's other stuff. So that's page two right now. But here's another mortgage lending type. Again, not systemic, but also just a sign that money has been circling around the globe trying to find a place to go.

36:47Tim Stenovec:And sometimes it's too easy. It's too free. So I just think in general, and the last thing I'll say is I am very concerned about U.S. debt and debt to GDP. That's my big, I know it doesn't matter. No one cares. No, but it should. It matters because one misstep here. Yeah. Well, when does it matter? When does it matter? Well, again, I'm not going to call a failed auction in the 10-year yield. But when you start to issue more T-bills instead of 10-year notes, right? When you start to do those things, you, by definition, create refinancing and repricing risk down the road. So inflation does come up and the Fed's hands are tied.

37:21Tim Stenovec:All of a sudden, these T-bills, which you're issuing instead of 10-year because you want to put pressure on 10-year bonds, just doesn't work. And so all we did from 2008 on was just move the risk to the government balance sheet. But you're not going to outgrow it. We are not going to run a surplus in this country. We're going to run a deficit. Is it$1 trillion,$2 trillion, or$3 trillion a year? I don't know. Back to the Cal sheet,$50 trillion at the end of 2028. We're under$39 trillion right now. That's almost$12 trillion from here. So that's a big concern because if our rates start to move higher, there's so much to worry about.

37:51Tim Stenovec:Just buy U.S. – I guess just buy stocks. Honestly, I don't even know. I got cash under the mattress.

37:55Carol Massar:Yeah, I got cash.

37:56Tim Stenovec:Exactly.

37:57Carol Massar:Just got to – I'm going to – because you brought us all together. Got 30 seconds. You want to do the last question? We've got a minute left. I guess, Danny, Wall Street retail investors have this penchant to buy the dip over and over again. And at one point, does that backfire on them? because it's worked so far over the last few years. Just got about 30 seconds.

38:14Tim Stenovec:I think it's self-fulfilling. I think that even through the tariff crisis of last year, ongoing tariff crisis of last year, ETF flows remain positive. So passive has still been positive, but that comes down to one thing, employment. If people start to lose their jobs, they're not putting in monthly into 401k. So that would be where I see the risk. Our thanks to Danny Moses, founder of Moses Ventures. Also a big thank you to Bloomberg News Equities reporter, Alexandra Seminova. You can catch the full conversation with Danny on our podcast feed.

38:40Carol Massar:Still ahead on Bloomberg Business Week, coverage from Bloomberg Invest, including BNY's digital employees.

38:47Tim Stenovec:And a former MVP-turned-business operator and team owner on Capital Play and Sports. A-Rod joins us next. This is Bloomberg.

39:16Tim Stenovec:My one advice to them, pick areas you can scale. Don't pick the shiny little toys on the side.

39:23Carol Massar:For example?

39:26Tim Stenovec:If anybody has more than 10 % of what they had for customer service 10 years ago, they're already five years behind. If anybody is not using AI to make their developers who write software 30 % more productive today, with the goal of being 70 % more productive.

39:48Carol Massar:Yeah.

39:49Tim Stenovec:Wow. So we are not asking our clients to be the first experiment on it. We say, you can leverage what we did. We are happy to bring out all our learnings, including what needs to change in the process. Because the biggest change is not technology. It's getting people to accept that there's a different way to do things. To listen to the full conversation, visit ibm.com slash smarttalks.

40:36Tim Stenovec:So let's say you're interested in something specific like biotech companies with high R &D spend, small cap stocks with improving operating margins, or the S &P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public, you just type in a prompt and their AI screens thousands of stocks and build a one-of-a-kind index. You can even backtest it against the S &P 500. Then you can invest in a few clicks. Go to public.com slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market. And paid for by Public Holdings.

41:13Tim Stenovec:Brokered services by Public Investing, member FINRA SIPC. Advisory services by Public Advisors, SEC Registered Advisor. Crypto services by ZeroHash. Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. From coast to coast, unlock adventure at Red Lion Hotels by Sonesta, where restful sleep, friendly service, and trusted local knowledge are part of every stay. Red Lion makes it easy to feel welcomed, comfortable, and connected wherever the road takes you. Whether you're traveling for business or pleasure, you can spend less and make more of every trip.

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42:29Tim Stenovec:Well, BNY is moving beyond the chatbot. As the world's largest custodian, the firm is deploying over 100 autonomous agents that don't just suggest code, but also execute high-stakes workflows. It allows the human to really focus on other tasks.

42:43Carol Massar:Leanne Russell is BNY's Global Head of Engineering and Chief Information Officer. She joined us from this week's Bloomberg Invest event in the heart of the financial district. Well, BNY is at the heart of financial services markets, 240 one-year-old companies. So I have my foot in many camps across technology. Of course, cyber and resiliency is really important to a bank like BMY. But obviously, AI is becoming increasingly part of everything that we do at BMY and really helping us shape financial services for the future. How much of it is internal in terms of the processes and the workflows that you guys are doing?

43:19Carol Massar:You're a major custodian for so much. So is it also from what clients want in terms when it comes to AI? they're looking for functionality. So in terms of what we've built, we have built our own platform and it's called Eliza, named after the wife of Alexander Hamilton who built the NY and a philanthropist in her own right. And we've built that ourselves and it is a platform and we are a platforms company and Eliza is a platform itself. So we have built that. It's model agnostic. We use all the alarm providers and multi-agent and that is an internal platform, but it's also something that we use to interact with our clients and help our clients perform better.

43:56Tim Stenovec:So give us a concrete example of what it can actually do.

43:58Carol Massar:We have 170 concrete examples. We are way beyond the use case scenarios and very much into production. So 170 different versions of Eliza that touches everything that we do. So some great examples, KYC, know your customer, onboarding customers onto the platform. We have a lot of customers and$59 trillion of assets under custody. And so we have taken our KYC process that would have taken a number of weeks down to 20 minutes.

44:27Tim Stenovec:So how does that work? You type the person's name into this model and it tells you whether or not this person is who they actually say they are?

44:36Carol Massar:Well, Eliza, in this case, for KYC, is a multi-agentic model. So you have like 20 different agents who talk to each other. So there's multi-steps in that process from knowing who the client is to linking them to their different accounts across BNY. So it's not just one single agent. It's agentic AI. This is it in action. In action. And we have, like I said, 170 versions of that across the bank today. It sounds like you guys really kicked into high gear over the last year in terms of AI. My understanding is 100 % across your team, everybody's in it. Yes. How did you quickly ramp up? How difficult was it in terms of the process and the build and getting everybody on board and everybody functional in it?

45:18Carol Massar:Well, three things I say was the silver bullet in terms of our adoption. First of all, we have a CEO who's very, very AI savvy, Robin Viz. He comes from a background in banking, but he is hands-on in the technology. He vibe codes. He uses it in his personal and professional life. So I think when you're CEO-led, I think that's a really foundational part of our platform. Then having our own platform. So our employees don't need to go into this different technology. Everything is an ELISA. It's our tech platform, but it's also our governance framework. It encompasses everything end to end. And then we really led with enablement.

45:55Carol Massar:So instead of thinking about engineering, gatekeeping the technology, we said we're going to get all our employees trained and using ELISA. Almost everyone at the bank now uses ELISA. We did training last year. We had to reinvent the training program to get everyone to go deep. Do you need less workers because of it? And I'm not trying to be like, but we're trying to understand, like, what is, is it replacing workers or is it freeing up workers to do other stuff which is helpful to an institution? So we actually have two different versions of Eliza when it comes to Agentex. So we had the solutions that we talked about, but we actually have digital employees.

46:31Carol Massar:So employees who are not human, who have a human manager, who have their own login and work in the ecosystem. Now that sounds like counter to what you just asked, but the fact is these help our employees become superhuman and they're doing tasks that quite frankly are quite mundane and freeing up our employees to do much more interesting work. For example, vulnerability management. No software engineer likes to do vulnerability management. They want to code new skills and new tools into the environment. So our digital employees take that part of their work away, and then that frees up our software engineers to work on the stuff that they, quite frankly, went to school to learn.

47:06Tim Stenovec:At a large organization, and to Carol's point, like BNY Mellon, how do you do this in a way that provides an incentive for people who don't actually want to adopt these? They think to themselves, wait a second, I don't want this to take away my job. I don't want this to make me obsolete.

47:21Carol Massar:Well, I think the thing you have to do is, like, I totally understand why people feel like that. But when you train people to use the technology, I think it becomes people fear it less. So that's why we led on enablement, making sure that everyone had access to the best training. We did 100 % by the middle of last year. We reinvented the whole training program. We gamified it. And when people can see how to use this technology as a superpower, they're much more inclined to use it to help them in their work than have the kind of reaction that you talked about. Was it really easy to train everybody or how long did it take?

47:53Carol Massar:So we had a goal of 65 % and 25 % was our goal. We made 99 % by June. So I think the adoption, we talk about it a lot. Robin talks about it a lot. Our EC handshaked on having AI for everyone, for everything, everywhere, which was our mantra. And I would say it was just amazing how our employees really, really embraced Eliza as a technology that can help.

48:17Tim Stenovec:That was Leanne Russell, Chief Information Officer and Global Head of Engineering at BNY.

48:21Carol Massar:As we wrap up this hour, increasingly when we talk about asset classes, we need to include sports in the conversation. What used to be a world of family-owned teams has been transformed into a sophisticated landscape of private equity, massive media rights deals, and skyrocketing valuations.

48:39Tim Stenovec:Someone who sits at the intersection of all of this is Alex Rodriguez. He's chairman of A-Rod Corp. He's co-owner of the Minnesota Timberwolves and the Lynx. Alex is also the co-host of the Bloomberg podcast and Bloomberg Originals show The Deal with Jason Kelly and Alex Rodriguez. And we kicked off the conversation by reflecting on the live taping that he and Jason had just done at Bloomberg Invest. That was with the CEO of Sixth Street, Alan Waxman. Incredible story. I mean, his background, he spent 10 years at Goldman Sachs, and he basically ran a$30 billion fund in which they can invest in any asset class, which really gave them a competitive advantage.

49:14Tim Stenovec:He's now brought that over when he co-founded Sixth Street 2009. They have over$100 billion in the AUM, and he's really deep in sports. He's done investments with all major leagues. He's done the San Francisco Giants baseball. He's done the Celtics and San Antonio Spurs in basketball, and he just bought a minority stake with Jonathan and Robert Kraft with the New England Patriots. Fascinating and great, great conversation. I'm curious about the opportunities that he sees right now, And, you know, obviously he's taking advantage of the new rules about being able to buy into different leagues, which is a whole conversation that we could have.

49:50Tim Stenovec:But what really excites him when he looks forward? I think a few things. I think markets, depending on what team, what leagues, what league, the leadership of the three leagues. Fortunately for us, we have, you know, Adam Silver, Roger Goodell in football, and Rob Manford, all very established, very top-tier commissioners. So all that's good for him. And I think when you look at the NFL, the combination of appreciation and cash flow is something that's very, very unique in sports. You don't have usually both of those so aggressively. So baseball is an interesting situation. I think baseball is the best opportunity to invest today.

50:25Tim Stenovec:I'm a contrarian by nature. So I would invest right into the teeth of this collective bargaining agreement. Why? Why? Because I think you can buy at very, very attractive multiples. And you're making, I think, two very safe bets. One, that the CBA will get better, not worse. And the second one is that Rob Manford would take a page from Roger Goodell and consolidate all the regional sports rights and make it more into national rights. And you get an expansion in multiples. So will there be a labor stoppage after this season? I hope not. I don't know. But I've talked to members of both sides of the aisle, and they have said, meaning owners and players, and they're both dug in pretty, pretty strong.

51:08Tim Stenovec:So maybe is what you're saying. So I don't know. Would that change your view on investing in baseball? No, I would invest even heavier into it because as you have more noise, as we've seen in the public markets the last couple of days, you have volatility. Where you have apprehension, I think you have opportunity. And the multiples, if you can buy a baseball team in four or five multiple versus other sports that are trading in mid-teens, I think that's an opportunity.

51:36Carol Massar:Would the players ever agree to a salary cap, you think?

51:39Tim Stenovec:I don't think so. I don't think so.

51:40Carol Massar:Should they or no?

51:42Tim Stenovec:I think I don't want to comment into that because I have friends on both sides. But here's what I would say. It should be a mentality about grow the pie as big as possible. How you guys divide it, that's a separate conversation. Yeah. But going back to Marvin Miller when he started the union for Major League Baseball, which has always been very, very strong and highly regarded, and the owners, there's been a lot of conflict over the last five decades. so how do you bring it together to say let's work together to grow the pie as big as possible why does it seem like baseball has the most issues with labor i think it has a lot of right with that oh yeah yeah i mean the history is very strong marvin miller uh was the head of the union he started it then that went to don fear for many years he's a great great leader and then michael wiener tony clark and now they have a different uh uh situation right now but it's been that way Tim, since I was involved, I remember that every time CBA came, it was a battle.

52:35Tim Stenovec:And somehow or another, you figure it out. But I will say that this is the most important year for baseball and labor talks in the history of the sport because of how many attractions we have out there between Netflix, YouTube, Bloomberg, you name it. There's just more assets that everyone's fighting for the consumer. So do you think about the collective bargaining differently now that you're an owner of a sports team? That's a great question. I think overall, like 90 % of my thoughts are still the same. You want the sport to be healthy. You want it to grow. You want it to collect more fan base.

53:15Tim Stenovec:And you want millions of people watching every day because it is a great sport. And the World Series this year showed us that when you have the right product, you have the right market, you have the right superstars in Vladimir Guerrero Jr. and Shohei Otani, that you had 53 million people watching when you include the U.S., Canada, and Japan. Which is pretty incredible. So baseball still works. Yeah. And when there's a lot of noise, there's a lot of opportunity.

53:37Carol Massar:So when, you know, you talked about, you're right, sports is vying for all of our attention with so many other things. So when you think about investing, how do you think about, like, how does that play into where you want to commit some money?

53:49Tim Stenovec:Well, you want to moat, right? Think about this. Take the MBA. If you're a real estate investor and there's only 30 beachfront properties in the entire world, boy, you would do anything to own one of those. So scarcity is a big deal. When you look at the TV deal that just was signed, 11 years, won the first year of 11 years for$77 billion, that's something that is easy to underwrite, easy to understand. so you like to invest into that. And then when you think about the global growth in the NBA, 20 years ago there's probably less than 3 % of the league was global athletes, meaning born outside of the U.S.

54:25Tim Stenovec:Today that number's ballooned to 35%, right? When you look at Europe, second most popular sport in Europe, the NBA, basketball, and is a$45 billion annual business, and we're only on 1 % of that. At the same time, you have 400 million people playing basketball, China. Yeah. 300 million playing in India. So the global scope, you can say from the American sports, NBA could be number one. Our thanks to Alex Rodriguez. He's chairman and CEO of A-Rod Corp. He's the co-host of the Bloomberg podcast, The Deal. I guess he was also a very good baseball player, I'm told.

54:59Carol Massar:Like, you know, I don't know if you Google a few articles come up here and there. Yeah. All right. Be sure to catch all of our conversations from Bloomberg Invest. You can find it on our podcast page or by going to Bloomberg.com. And that wraps up the weekend edition of Bloomberg Business Week from Bloomberg Radio. Thank you so much for joining us.

55:15Tim Stenovec:Be sure to tune into Bloomberg Business Week daily Monday through Friday. It starts at 2 p.m. Wall Street time on Bloomberg Radio, Bloomberg TV, and on Sirius XM channel 121.

55:24Carol Massar:You can also catch our daily broadcast on YouTube. Just search Bloomberg Podcasts. We're simulcast on Bloomberg Originals, available on Bloomberg.com slash originals, and streaming platforms including Roku, Amazon Fire TV, Samsung TV Plus, and more.

55:38Tim Stenovec:Find our Bloomberg Business Week podcast at Bloomberg.com, Apple, or wherever you get your podcasts. And the latest edition of the magazine, it's available on newsstands now at Bloomberg.com and always on Bloomberg Terminal. I'm Tim Stenevec.

55:50Carol Massar:And I'm Carol Masser. Have a good and safe weekend, everyone. Don't forget to change your clocks. Stay with us. Today's top stories and global business headlines are coming up right now.

55:59Tim Stenovec:This is the Bloomberg Business Week Daily Podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

56:29Carol Massar:If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But in life, even the best strategies can't prevent every bad day. A fire, a loss, a disruption that demands immediate attention. When that happens, what matters isn't just what you planned, it's who shows up. That's where Cincinnati Insurance comes in. For more than 75 years, they've helped individuals and businesses navigate life's toughest moments with care, expertise, and personal attention. Together with independent agents, Cincinnati Insurance focuses on relationships, not transactions.

57:07Carol Massar:Their approach is grounded in experience, follow-through, and trust built over time. Bad days happen, and when they do, you deserve an insurance partner who understands risk, respects what you've built, and is ready to help you move forward. The Cincinnati Insurance Companies. Let them make your bad day better. Find an independent agent at cinfin.com.

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