Dan Ivascyn Is Excited About a New Era in Fixed Income

27:03But look, not much of this is new. When I joined PIMCO back in the late 1990s, I spent a good portion of my initial time at the firm focusing on the underwriting of private assets. We call them pure privates, but these were 4A2 privates that were created as part of the Securities Act of 1933. 144A privates, which were quite popular, I think the first one was issued back in 1990. The technology that's being utilized to fund AI infrastructure today, some of these off-balance sheet contingent or make-hold guarantee type frameworks, were around in the mid to late 1990s. The difference today is that you have this massive capital investment need, so the deals are larger.

27:48But a lot of the technology has just been dusted off, so to speak, for the new era. I think the other point that's important, and when we're talking about historical returns, I think this explains a lot, is that what's been so unique in terms of credit asset performance in general has been the post-global financial crisis period, where we haven't had a sustained period of economic weakness. In fact, one of my favorite data series is looking at how lower-quality lending performed since way back during the Michael Milken days when he helped to create that market. If you go back to the early 1980s, all the way up to the global financial crisis, if you had just blindly bought the lowest quality credit that's out there, proxied by high yield, senior secured loans, direct lending, you know, blend the index, you would have ended up with only about a half a percentage point of incremental performance versus high quality bonds over that entire period.

28:44And the way it worked was that you made a lot of money, a lot of money, a lot of money, a lot of money, then you gave it all back. Yeah. Then you made a lot, a lot, a lot, a lot, gave it all back. And we'd go back to the late 80s when you had that period, initial period of aggressive underwriting. You had the savings and loan crisis of the early 90s. You had the LTCM or the Asian financial crisis in the late 90s. Then the internet bubble and the telecom issues of the early 2000s. Then of course, the global financial crisis. That was a more normal credit environment. Since the GFC just blindly buying the lowest quality credit on the board, whether it's private credit or lower quality public credit, you generated 7 % a year more than high quality bonds.

29:25And that explains a lot. Not surprisingly, you've seen massive growth in that area of the market. Now, weaker credit tends to perform well when stocks go up 15 % a year. But again, that's where we are today. I hear all the discussion about, God, underwriting is worse on the public side versus the private side. The reality is when you've grown this much, when you've lent so much money to weaker quality borrowers, when covenants have weakened, when spreads are tight, when equities have gone up consistently as much as they have, you're going to have challenges in these markets. So when we think about credit, we look at it under sort of two continuums.

30:05One, liquidity. Certain assets are completely illiquid. The only decision you get to make is the purchase decision, So you better be right. And then at the other end of the extreme, you have very, very liquid assets where you can change your mind on a regular basis. And then you have economic sensitivity. You have assets that are very insensitive to the economy that are very, very high quality. Then at the other extreme, you have assets with a tremendous amount of economic sensitivity, a tremendous amount of sensitivity to AI-related disruption, other forms of economic weakness, unanticipated competition.

30:40And you just want to make sure you get paid enough. And with stocks near all-time highs, with spreads tight, with covenants weak, there are going to be problems. And I think as an investor, you just need to acknowledge that you're not getting paid what you got to take that risk five or ten years ago. And you just want to be defensive. You want to be skeptical. But it's not so much private versus public. I think it's just thoughtful underwriting and just understanding that we're at a time where, given the strong historical performance, given the fact that we haven't had a sustained period of economic slowing for a long time, some complacency has worked their way into these higher risk areas of the market.

31:19Well, talk a little bit more about competition in private credit, because I imagine it's good to be PIMCO when it comes to sourcing deals and maybe negotiating the terms. But does even someone like you, a truly big bond manager, have to deal with competitive pressures where if you don't agree to one bond term, someone else will swoop in and agree to it and take it away from you. Absolutely. And again, I think the other point about public and private markets is that they're well integrated. We could talk about convergence a bit later, have some views there. But when an issuer looks at their options, they're going to test the public option.

31:59They'll test the private option. And there is a lot of competition, a lot of competition for market share. When you look at a lot of the managers, particularly in the private credit space, they announce very, very aggressive growth assumptions. You know, as an investor, sometimes, you know, I wish in certain quarters people would talk about, you know, if we can find value for the end investor, we will grow this much. All too often, you know, after a pretty bullish environment for credit, it's simply going to grow a lot. So, you know, we do see time and time again situations where you start the underwriting process.

32:32you get down to the point where it's time to get into a final round and you don't get the terms that we feel we need as extenders of credit in this marketplace. And that's just, again, symptomatic of the fact that there's a lot of demand for these assets and there's a lot of demand relative to the supply across many segments of the market. And that's true not only of below investment grade risk, but it's very, very true of certain transactions with an investment grade rating, at least from a rating agency. So, you know, given tight spreads, given the competition, you just have to say no. And I'll go back to my earlier point.

33:11What's so exciting about this market today is that you do not need to take on aggressively underwritten credit to generate return. The high-quality area of the market, especially if you expand globally, if you take advantage of liquidity, which typically means flexibility for end investors, you can have a high-quality portfolio where you don't have to sacrifice return. Very different than where we were 10 years ago, but again, pretty exciting now where you can go up in quality without, again, giving up return. And in some cases, ironically, picking up expected return.

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35:49MasterCard offers solutions and support for every step of the supplier lifecycle, helping you deepen merchant relationships. Start fast, grow strategically, and scale at your pace. With a modular toolkit, you can flexibly deploy. Discover how at MasterCard.com slash commercial acceptance. I want to go back to something you said, and I didn't quite get it, but I think it's important. And of course, it's very interesting to our audience. You were talking about the AI financing, and I think you said something, contingent make-whole guarantees. Tell us about these financing as you see them, and what is the history?

36:26How novel are they relative to past financing? Or how much is it that these are structures that were very much in place for something else are now being reproposed into this new exciting area? Yes, I'll start with what's new, which is lending to support the growth in AI and related infrastructure. There you're talking about several trillion dollars of investment need. So that's what's new. But what's not so new is this idea that companies would like to keep a good portion of their debt off their balance sheet or come up with structures that limit their overall financial liability or give them some flexibility to manage that liability over time.

37:09And as an end investor looking to lend to those companies, it's important to acknowledge that lending against tech firms, lending against AI infrastructure, lending against AI chips is risky. That could be a real good investment if you own the equity. It may not be a great investment if you own the bonds, where at most you get your coupon and you hope to get par back at the end of the day. So a lot of the underwriting of these transactions, and there have been a lot and we expect a lot more to come over the course of the next few years, is to understand the form of that guarantee and understand the entity that's providing that guarantee, whether it's in the form of lease payments or other type of make-whole type arrangements.

37:48And these types of structures are what have been around for many, many years. Back in the mid and late 1990s, a lot of times these would be done by Wall Street financial institutions, sometimes across a segment of their business where they would use a corporate guarantee to arbitrage a bit of the rating agency frameworks. And other times, these deals were backed by large ships, equipment, other areas of the market. So it was the same type of analysis, the same type of underwriting of checklist, which involves a lot of lawyers to ensure that you understand the guarantee, how you have to realize on that guarantee.

38:28And that's not so different today. And just to be clear, the guarantee we're talking about here is, okay, here is a hypothetical SPV that owns a data center and it borrows money and it finances, et cetera. And the guarantee question is how much will the tenant of that data center, which didn't want to have all that debt on their books, maybe like a Facebook or one of the hyperscalers, how much are they actually committed to being a tenant for the long term there, basically? That's what we're talking about? Absolutely correct. And why it matters here is you're typically talking about investment-grade rated counterparties on these transactions where the infrastructure itself, the assets that are partially backing the deal on a standalone basis, would achieve a very, very low rating.

39:15So how do you create a structure where you improve the credit quality while meeting the needs of those that are looking to borrow within this market? So, again, the whole key is to make sure that something that the rating agencies may assign investment-grade rating to is, in fact, investment-grade from a fundamental credit quality perspective. And I think that's another theme. In talking about private credit, there are more economically sensitive, lower-quality loans. And then there's a lot of growth on the investment-grade side. It is very, very dangerous to assume something has an investment-grade rating just because the rating agencies assign a rating to it.

39:53It's critically important that you do your own credit work. Today, all too frequently, you'll have an investment-grade rating from one entity. And again, market participants for years have always joked, if you can only find one investment-grade rating, it's pretty fair to assume everyone else is below investment-grade. So the bottom line is that there's been a lot of aggressive underwriting going on, even with instruments that carry an investment-grade rating at least from one entity. And again, when spreads are tight, when documentation is relatively weak, it's just critically important that you do your own fundamental credit work.

40:25I do think PIMCO has some advantages in that area, both in terms of experience and resources. But it's super important because you're not always getting the terms that you want. When you do, you can unlock tremendous value for your clients. But this is an environment where you have to be really, really selective as a bond investor, at least. Yeah. When I think back to the 2015 environment, I remember a lot of people were writing stories about the triple B bubble in investment grade. So triple B is the lowest tier of investment grade. And that had been absolutely exploding post financial crisis.

40:57And everyone, not everyone, a lot of people expected that to end in tiers. And instead, it ended with all those like triple Bs getting upgraded and a lot of junk getting upgraded as well and having a bunch of rising stars, which I don't think a lot of people were. necessarily expecting. But talk a little bit more about the rating agencies. What are the pressures that you think are perhaps driving them to rate some of these structures higher than they otherwise might be? Well, again, there are multiple rating agencies that have different philosophies to how they arrive at a rating. And there's going to be understandable disagreement within markets.

41:38But issuers are quite shrewd. They're going to go to where they get the most favorable ratings treatment. This has always been the case. And I think the important point to note is that when stocks are going up 15 % a year, when the economy is growing, when you don't have a sustained period of economic weakness, even poorly underwritten credit will mature. We experienced that in an extreme sense during the 2000s. What we try to do as active investors is to underwrite to weaker economic environments, environments where, you know, those underlying entities or the infrastructure, you know, that you're lending against go into a period of weakness.

42:16And I think that's where, you know, good fundamental credit work in this type of environment that we're in today that's very much driven by rating arbitrage, you know, seeking out investment-grade ratings, you know, for an insurance balance sheet or a reinsurance balance sheet. as an example, you know, can lead at times to aggressive decisions. So I think it's just the nature of the fact that you have multiple agencies and some will be more optimistic in certain areas than others. But, you know, that's great. You know, if we didn't have those sources of disagreement, there wouldn't be opportunities to generate incremental return, you know, versus passive alternatives.

42:52While we're here on credit, actually, you know, there's probably about a month ago or a month and a half ago, that's when we were getting all those headlines about tree color. And that was when Jamie Dimon made this sort of famous crickets thing. I was getting really - Cockroaches. Cockroaches. Cockroaches. I hate cockroaches and I like crickets. So I want to make that clear. Crickets are lovely. You're right. I should not associate them with credit blowups. That's completely unfair to crickets. It's fair to cockroaches. Jamie Dimon made those cockroaches. I was getting worried. I saw all these heads.

43:22I was like, oh, another entity took a hit on this. another entity. I was like, oh, this is very familiar. I don't like how many times the same company appears in the headlines. But we haven't gotten that much, actually. Since then, it's not like there have been five more of those. I'm just sort of curious, setting aside some of the data center, the sexy private credit stuff that everyone's focused on, do you think over the last several years, was there some systematically bad underwriting going on, especially over the last few years? Or were there isolated cockroaches, the first cockroach, before they had a chance to lay eggs and make babies.

43:55The lonely cockroaches. Yeah. Yeah. So look, again, because there's been so much growth in lending to lower quality companies. And again, the last major cycle was lending to lower quality households. Yeah. Right. You know, there's going to be areas of excess. And I think people are focused on these areas. But again, when you look at the cumulative delinquencies and losses. Yes, they've increased a bit over the last few years, but these situations have been relatively isolated. But again, anytime you've had this much credit expansion, you're going to have challenges. And these challenges are happening in a relatively strong economy.

44:36So we don't think this will be a catastrophe. The word I've used is that there's likely going to be disappointment in certain areas of the credit markets that have performed exceptionally well over the last 10 to 15 years. But that shouldn't be viewed as an overly controversial statement. That's how markets work. Credit was very cheap 10 or 15 years ago. High-quality bonds were very, very expensive. Today, credit spreads are near all-time tights. Equities are near all-time highs. And value at high-quality bonds looks reasonable relative to their history. So starting valuations tend to be pretty big drivers of future returns.

45:11If the economy continues to grow, if stocks keep going up 15 % a year, yes, these will be relatively isolated situations. But if you get into a period of economic weakness, losses will go up and there'll likely be some disappointment. I think that's the best way to categorize it. And then I think the second important point when you look at markets in a longer-term historical context is that regulators hate bailing out the same sectors twice. Back during the GFC, it was lending to the consumer. It was excessive lending from the banks that caused all of the problems, almost took down the financial system.

45:45And not surprisingly, the regulations towards the banks and towards consumer lending was massive. And today, when you look at the world, the household balance sheet, certainly middle income and above cohort groups, hasn't been this strong in several decades. There's record amounts of borrower equity in these areas of the market have been very, very strong from an underwriting perspective. The areas that escaped the scrutiny the last time, you know, a lot of lending to non-financial corporates, a lot of, you know, this mid-market private lending that came out of that period relatively unscathed from a regulatory perspective has grown a lot.

46:23So I think a lot of this just relates to longer-term cycles. PIMCO was talking in a much different way back in 2005 and 2006, where we were screaming from the rooftop saying that, you know, what was going on was so irrational that there were major problems ahead. That's not where we are. And that's why I sometimes sound a bit more negative than we are. I think that the idea of disappointment is the way people should think about some of these areas of the credit markets. And the good news is you don't have to accept disappointment. You can simply accept the fact that you had a great performance run and that by going up in quality, expanding into a global opportunity set that hasn't been sufficiently embraced just yet, perhaps owning a little bit of non-dollar exposure, gets you to the same place with much more resiliency, much more downside protection, and a lot more liquidity or flexibility to change your mind in the future as well.

47:15Since you brought up household balance sheets, can you talk to us a little bit about your housing outlook? Because I believe PIMCO has been pretty bullish on mortgages recently. But at the same time, we've seen a slight slowdown in the housing market. But then again, we still have long-term structural tailwinds, such as a massive undersupply of homes in the U.S. Where do you see that going in the coming years, particularly, you know, if we were to see inflationary pressures start to pick up and those longer-end yields start to rise? Yeah, so we are very bullish on housing-related investments in the United States, as well as in other areas around the world.

47:57Agency-guaranteed mortgages still trade at very widespread spreads relative to corporates, even in an absolute sense. We think it's a very high quality liquid area of the market that, again, makes a lot of sense to own across a variety of different mandates. We also like lending in the non-guaranteed area against the house, simply because borrowers have record amounts of equity. So when you lend against - Kim Kow just loves collateral. Yeah. That's what it sounds like. You love collateral. Yeah, we like good documentation and good collateral, at least all else equal. But it's not a major bet on the directionality of homes when you're lending against a household that has 70 percentage points of borrower equity.

48:42Your home can go down quite a bit and you're very well protected. That same dynamic exists over in the UK, across Europe, and even in other parts of the world. So, you know, again, regulators don't like billing out the same sectors twice. That's pretty good asset allocation advice. It's quite straightforward. But also, you know, you have much better fundamentals across households. But to your specific question around housing, it's a tough situation. We do think that homes are going to remain elevated from a valuation perspective and affordability is going to remain quite constrained because there's no easy answer.

49:17You know, you bring the mortgage rate down, the home price goes up. You know, affordability doesn't change in a meaningful sense. What we really need in this country and other parts of the world are more homes, more housing units. And again, because of a lot of the post-global financial crisis regulation, it's been real hard to build new homes. So our base case view is that home prices are going to moderate here. On a national level, you could see, at least in real terms, some steady declines over the course of the next several years. in certain markets that are a bit overextended, a bit more volatility.

49:51But we do think that home prices are going to remain elevated from a historical perspective just because of the fact that people have locked in very, very low mortgage rates 30 years, not just five or 10 years, which were mortgage durations, popular pre-GFC. So you're not going to see too much turnover. And unfortunately, that means that homes for a lot of younger Americans are going to remain out of reach. But again, maybe some incremental benefit. Maybe this administration get mortgage rates down a bit through some creative policy the next couple of years. By the way, we'd like that given PIMCO's current positioning.

50:30But again, without building new homes, which are going to take many, many years, there's no easy solution. I want to go back. You mentioned this idea there's an optimal amount of fiscal profligacy from the perspective of the bond investor. Maybe you want them to push it a little bit because then you get paid a little bit for taking it on. But obviously, you don't want them to push so forth where you get some fiscal dominance spiral leading to higher and higher inflation. You want to find that sweet spot. You know, I mentioned we were talking a little bit about politics earlier, about whether an independent central bank can be sustained.

51:02But when you look abroad, you know, it seems like in a lot of pretty major countries, we're not the only country that's having political volatility these days. People are concerned about the approach that the new Japanese PM is going to take. And so we know that rates are higher in Japan. France, very indebted country. They seem to have like a new government every two weeks. I like lose track of all the times their government collapses and so forth. The UK, very indebted country, the moment anyone takes office, their approval ratings plunge to negative 30 or whatever. There's a lot going on on the political front, and that sort of determines whether countries are even, it's even possible to run what might be more responsible fiscal policies.

51:43Is that something that, I don't know, keeps you up at night is the right term, but is that something that's a big part of your work, is trying to understand, especially when you think abroad, understand the political dynamics in all these countries that are happening right now? Yeah, absolutely. And we get together once a year, talk about the outlook for economies and markets over a five-year type timeframe. And one of our advisors, I think, put it well was that we used to live in a world where economic outcomes would drive politics. If economies were strong, politicians usually ended up in a good situation.

52:19They'd stay in office. Today, it feels like it's a bit reversed where political priorities, geopolitical tensions are driving economics. And I think you see that to a degree with tariff policy. You see it to a degree with various forms of reshoring. You see it in terms of these populist tendencies across markets. So they're all very, very important. and a lot more important than they were in the past. And I think it takes a lot of humility from someone like myself and others that grew up doing discounted cash flow analysis and derivative pricing as opposed to understanding the political economy.

52:56So we think that that's important both from the perspective of gaining an edge in markets, but also understanding that sometimes we'll be wrong. And when you're running the debt levels that countries are running or deficits in overall debt levels, there's going to be some unpredictability. And that's why this idea of looking to exploit a global opportunity set, prudent diversification, targeting some countries outside the U.S. that aren't running 6%, 7 % deficits. And there are high-quality countries out there, Australia being an example, Germany being another example, even the United Kingdom.

53:32them, although they have a lot less policy flexibility than we do, given that they're a smaller open economy with their own currency, offer attractive yields. So this is less about picking your favorite country from our perspective. It's more looking to take advantage of attractive opportunities around the globe with some tilt towards those countries that are balancing their budget and that do have a better overall fiscal picture. And we haven't talked about emerging markets, but there are a few emerging markets that you know, this cycle got ahead of inflation, that have been in some sense more fiscally prudent than their developed market counterparties, and that have very, very high yields even adjusted for inflation rates.

54:12So even some diversification in some of the higher quality areas of the emerging markets, you know, from our perspective represents real good value or real good sources of diversification and return versus some of these assets, you know, here in the United States that have performed real well historically, but where when you look at, you know, the likelihood for Ford performance, just look a little bit less interesting. Actually, this reminds me, thinking back to 2015, 2015 was actually a big year for PIMCO because it was your first full year without Bill Gross, right, who left in late 2014. Oh, yeah, that's right.

54:49Can you talk to us perhaps how the culture of PIMCO has changed over the past 10 years and how you would describe that evolution? Because I imagine it's been a long time. It must have shifted a little bit. Yeah, look, the way Bill left the firm wasn't ideal, to say the least. But Bill left us in an incredibly strong position. He created a lot of the frameworks that we still use today to make decisions. Bill was a strong personality, but he believed in teamwork and believed that investing was a team sport, so to speak. So from that perspective, there didn't need to be a lot of change or certainly not radical change.

55:29But over this period, markets have become so much more specialized. Client needs have evolved over time. The introduction of a more sizable private opportunity set has been important. Technology, big data, using trading techniques, portfolio trading and other auto-economics, automated type trading strategies are all critically important. So we're a much more specialized firm today, which is a function of, again, evolving client needs, but also just the realities of this world that we live in today, where data is abundant, much less expensive to access. So from that perspective, we've needed to adapt.

56:10We've become even more global. So we tend to utilize regional committees and regional decision-making structures. But a lot stayed the same, at least in terms of mindset. And we try to really leverage the history and the experience the firm has had managing and navigating through more challenging markets. 22 is rough for both stocks and bonds. But in general, the environment's been reasonably forgiving. But you can always get into these, you know, tougher periods. And again, we try to use these structures that, you know, Bill put in place and Bill deserves a tremendous amount of credit for. It's funny, in your last answer there, there were like five things you said that could merit full follow-ups or even full follow-up episodes, like about changing client needs over time or what happens when the cost of data goes from costly to fairly affordable, et cetera, all those sort of interesting things.

57:07But just my last question, and it's sort of relates to technology. You know, when it comes to AI in investing, we've talked a little bit more on the short-term, like, high-frequency side and the sort of models that they use and the signals that they use and how that sort of relates to AI and their application. But for a firm like PIMCO, and when you're thinking about longer-term holding periods and you want to have a good collateral and good documentation, et cetera, currently today, have you found ways to apply cutting-edge AI technology to the process of good security selection? We have, and we're finding ways to utilize the technology at an accelerating rate.

57:49We do some of this in some of our more quant-focused strategies where we look to use AI to actually drive alpha. But just AI as a tool to drive efficiency has been, will be, critically important to managing an investment platform. Just the ease in which you can access data, that you can use AI to help support overall analysis, both at the company level, the individual investment level, but even coming through economic history and understanding some of these geopolitical trends and themes that are hard, at least intuitively, to grasp are going to be critically important. In fact, before our discussion today, I spent considerable time with our head of technology and our head of implementation talking about various firm-wide initiatives.

58:39And the only other point is, you know, my own use of AI, both at home and at the office, has gone up almost exponentially over the last year or two. And I'm the last person you want to, you know, rely on to understand this technology. It's the younger folks that we hired over the last year that are helping us with a lot of this perspective. So this is going to be quite disruptive, probably productivity enhancing, you know, at the economy-wide level, but it's also going to lead to considerable disruption. And it's important that we don't get disrupted and that we use this technology to drive client returns.

59:12But it's going to be important in so many ways, and we're really, really embracing it here at PIMCO. Dan Iverson, thank you so much for coming on OddLots. That was a fantastic conversation. Really appreciate you taking the time. And we're going to check back in with you in 2035 and see how well one got paid for taking on a little bit of duration here. Great, Joe and Tracy, thanks again and congratulations on the big milestone. Thank you so much. Thank you so much, Dan. Really appreciate it. Thank you, guys.

59:53Tracy, I thought that was great. I really enjoyed talking to Dan. Fantastic overview. Yeah. So a couple of things stood out to me. So number one, the idea of no more free lunch in credit, although people have been talking about that for a while now. And obviously with the rate environment changing, you can see that argument. The other thing that I really liked was his description of policymakers don't want to bail out the same thing twice. Yeah, that's an interesting framework or way to think about it. Yeah, absolutely. And it kind of reminded me of there's another person in credit who used to tell me a line about how he invests, which is follow the bad guys.

1:00:30Right. So like the guys that blew up in one part of the market usually, you know, start doing something new. They're going to get their act together. Wait, are you saying they're going to get their act together or they're going to do something new? I'm saying they move to the new thing and then that blows up. And so if you can just identify the bad guys and just follow their career trajectories, just short everything the bad guys do. I love that. I love that take. You know, it was really I had not realized that stat he said about how little you got paid for taking for buying poor credits up until the GFC.

1:01:05Yeah. And then post-GFC, it's just totally flipped, that you should just go as far out on the credit risk curve as you possibly can, and you've just walloped anything safe. And I knew that, I guess, on some level, but the extreme of that statistical divergence. But, you know, you have to think we had that—well, it was more than a hiccup in 2020, but we did bounce back very fast from it. So really what we are looking at is, you know, well over 15 years now of the lines just going up. And you have to think about what are the things that accumulate over that time or the patterns that accumulate or the habits, et cetera.

1:01:42And this idea that there is a lot of safety at the far end of the risk curve and that people don't care. And that maybe now some of the perception that there's safety at the far end of the risk curve and how much that's been burnished into people is very interesting. Absolutely. The other thing he said that I thought was very poignant was the idea of you have all these private credit firms starting up and promising these astonishing returns for investors. And he made the point that you can't just say you're going to make all this money in private credit because those deals might not be out there and available to you.

1:02:17You have to do it on a risk or value adjusted basis. And as I say that, I see a headline in Bloomberg about Capital Group getting into private credit as well. So this is the thing. Like, it's a booming market. There are a lot of competitive pressures both on the lender side and also on the credit rating side. And you can see people really scrambling to get into the market and accumulate as much as they can. And so the temptation, of course, is to, you know, accept lower terms, accept lower quality. Totally. All right. Shall we leave it there? Let's leave it there. All right. This has been another episode of the Odd Lots podcast.

1:02:54I'm Tracy Alloway. You can follow me at Tracy Alloway. And I'm Joe Weisenthal. You can follow me at The Stalwart. Follow our producers, Carmen Rodriguez at CarmenArmond, Dashiell Bennett at Dashbot, and Kale Brooks at Kale Brooks. For more Odd Lots content, go to Bloomberg.com slash Odd Lots. We have a daily newsletter and all of our episodes. And you can chat about all of these topics 24-7 in our Discord, discord.gg slash Odd Lots. And if you enjoy Odd Lots, if you're enjoying these anniversary episodes, then please leave us a positive review on your favorite podcast platform. And remember, if you are a Bloomberg subscriber, you can listen to all of our episodes absolutely ad-free.

1:03:30All you need to do is find the Bloomberg channel on Apple Podcasts and follow the instructions there. Thanks for listening.

1:03:47Thank you.

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