>> THIS IS BLOOMBERG BUSINESSWEEK DAILY REPORTING

FROM THE MAGAZINE THAT HELPS GLOBAL LEADERS STAY AHEAD WITH

INSIGHT ON THE PEOPLE, COMPANIES, AND TRENDS SHAPING

TODAY'S COMPLEX ECONOMY. PLUS, GLOBAL BUSINESS, FINANCE,

AND TECH NEWS AS IT HAPPENS. "BLOOMBERG BUSINESSWEEK DAILY"

WITH CAROL MASSAR AND TIM STENOVEC, LIVE ON BLOOMBERG

RADIO, TELEVISION, YOUTUBE, AND BLOOMBERG ORIGINALS. CAROL:

WELCOME TO TUESDAY AFTERNOON, MARCH 24. LIVE HERE AT BLOOMBERG

HEADQUARTERS IN NEW YORK CITY. YOU JUST MENTIONED SOME

HEADLINES. TIM: AXIOS REPORTING U.S.

CLAIMS IRAN HAD AGREED TO MANY OF ITS PLANS. U.S.

SHARED WITH ISRAEL IT'S 15 POINT PLAN TO END THE WAR,

ACCORDING TO AXIOS, THE PUBLICATION CITING TWO SOURCES

WITH KNOWLEDGE OF POTENTIAL U.S.-IRAN TALKS. THE U.S.

IS WAITING FOR A RESPONSE FROM IRAN ON POSSIBLE TALKS.

THE HEADLINE, THE U.S. AND IRAN MAY HOLD HIGH-LEVEL

TALKS AS SOON AS THURSDAY, ACCORDING TO AXIOS. CAROL:

ALSO SAUDI ARABIA, THE UAE LOSING PATIENCE WITH IRAN,

JOINING IN ON THIS WAR.

THE JOURNAL REPORTING ON THE U.S. PLANNING TO SEND AIRBORNE

SOLDIERS TO THE MIDDLE EAST. A LOT OF HEADLINES COMING OUT

TRYING TO MAKE SENSE OF WHAT IS GOING ON.

IN THE MEANTIME, WE ARE DOWN A LITTLE ON THE S&P, DOWN ABOUT

.6% ON THE NASDAQ 100, BUT HAVE SEEN ENERGY MARKETS MOVE UP

AGAIN. TIM:

BRENT CRUDE UP ABOVE $104 A BARREL, WTI $91 A BARREL, BRENT

UP CLOSE TO 5%. CAROL:

WE ARE GOING TO GET INTO WHO IS JOINING IN ON THE U.S.-ISRAELI

WAR IN IRAN AND WHETHER THIS COULD BE THE BEGINNING OF A NEW

ERA WHEN IT COMES TO THE MIDDLE EAST. TIM:

A TIMELY INTERVIEW FROM OUR BLOOMBERG TECHNOLOGY TEAM WITH

THE PHYSICAL AI COMPANY APPLIED INTUITION. CAROL:

INTERESTING STUFF THEY ARE WORKING ON.

WORKING WITH DEFENSE AREAS. A BIG PICTURE VIEW FROM A

MEMBER OF PRESIDENT TRUMP'S CABINET DURING HIS FIRST TERM

IN THE WHITE HOUSE, ALSO A LONGTIME DISTRESSED INVESTORS.

WILBUR ROSS WILL JOIN US. TIM: THE PRIVATE CREDIT STORM THAT

IS LASHING THE FATHER-SON DUO AT THE HELM OF CLIFF WATER.

A CHECK ON PRIVATE CREDIT, OR PART OF IT. CAROL:

SO MANY STORIES AND CONCERNS. BUSY 60 MINUTES.

A CHECK ON THE TRADING SESSION, HERE IS AMY MORRIS. AMY:

THEY ARE CALLING IT THE TEHRAN TOLLBOOTH, IRAN ALLOWING

VESSELS TO PASS THROUGH THE STRAIT OF HORMUZ IF THEY PAY UP

TO $2 MILLION. SOURCES TOLD BLOOMBERG PAYMENTS

HAVE BEEN HANDLED QUIETLY. THE LACK OF TRANSPARENCY AND

UNCERTAINTY OVER WHO MIGHT BE TARGETED IS ADDING A FRESH

LAYER OF FICTION. STOCKS FLUCTUATED AND OIL ROSE

AS TRADERS GRAPPLED WITH A RANGE OF OUTCOMES FOR THE WAR.

PRESIDENT TRUMP CLAIMING TALKS ARE UNDERWAY TO END THE

CONFLICT.

WTI $92 A BARREL, BRENT CRUDE TOPPING 103 DOLLARS.

S&P 500 DOWN .2%, NASDAQ DOWN .75%, THE DOW LITTLE CHANGED.

10-YEAR TREASURY YIELD 4.4%, TWO YEAR YIELD 3.92%.

BITCOIN IS ABOUT 2.5% LOWER. ARES MANAGEMENT AND APOLLO

GLOBAL MANAGEMENT THEM A DEAD WITHDRAWAL OF FUNDS TO 5% OF

SHARES AFTER CLIENTS SOUGHT TO WITHDRAW A LARGER PERCENTAGE.

INVESTORS MAY BE GETTING ANXIOUS ABOUT A LIQUIDITY

SQUEEZE IN THE PRIVATE CREDIT MARKET.

LIMITING REDEMPTIONS WOULD INCREASE NEGATIVE SENTIMENT AND

CONSTRAINED LIQUIDITY FURTHER, MAKING IT HARDER TO UNDERWRITE

NEW LOANS. ARM HOLDINGS WILL BEGIN SELLING

ITS OWN AI -- ITS OWN SHIPS CALLED AGI CPUS FOR THE FIRST

TIME.

THE CPUS WILL HAVE AS MANY AS 136 CORES AND DRAW 300 WATTS OF

ELECTRICITY AND BE PRODUCED BY TSMC. META PLATFORMS WILL BE ITS

FIRST MAJOR CUSTOMER. ARM SHARES MORE THAN 1.5%

HIGHER. I AM AMY MORRIS.

THAT IS A BLOOMBERG BUSINESS FLASH. CAROL:

WE NEED TO GET YOU A CUP OF HOT TEA OR SOME CHICKEN SOUP

BECAUSE YOU SOUND LIKE YOU ARE FIGHTING A COLD.

I FEEL LIKE EVERYBODY IS FIGHTING SOMETHING. TIM:

I GOT MY OWN STASH OF COP DROPS. CAROL:

I SAW YOU SWIPING SOME LAST NIGHT AFTER OUR SHOW.

IT'S OUR WORLD WE ARE IN. SO MANY CONFLICTING HEADLINES.

I AM LOOKING AT OUR LIVES LOG WHEN IT COMES TO THE U.S.

AND ISRAELI WAR IN IRAN. YOU MENTIONED AXIOS REPORTING

POTENTIAL TALKS BETWEEN THE U.S. AND IRAN, THEY MAY HOLD

HIGH-LEVEL TALKS AS SOON AS THURSDAY. U.S.

WAITING FOR RESPONSE ON POSSIBLE TALKS. THE U.S.

CLAIMS IRAN HAD AGREED TO MANY OF ITS POINTS.

AXIOS CITING TWO SOURCES WITH KNOWLEDGE.

THIS IS SOMETHING I FEEL WE HAVE BEEN FLOATING AROUND

YESTERDAY. WE ARE TRYING TO FIGURE IT OUT.

TIM: IT RUNS COUNTER TO WHAT WE HAVE

HEARD FROM SEVERAL IRANIAN OFFICIALS, WHO PUSHED BACK ON

THE IDEA THERE IS ANY NEGOTIATING.

IT FOLLOWS A REPORT FROM THE WALL STREET JOURNAL THAT THE

PENTAGON IS PLANNING TO DEPLOY A BRIGADE COMBAT TEAM FROM THE

ARMY'S 82ND AIRBORNE DIVISION TO THE MIDDLE EAST. ACCORDING

TO THE WALL STREET JOURNAL.

A WRITTEN ORDER TO DEPLOY THE UNIT OF 3000 SOLDIERS AS

EXPECTED IN THE COMING HOURS. THE OFFICIAL SAID THE DECISION

TO PUT BOOTS ON THE GROUND HAS NOT BEEN MADE YET. CAROL:

YOU AND I WERE TALKING ABOUT IRAN SETTING A TRANSIT FEE FOR

AS MUCH AS $2 MILLION PER TRIP THROUGH THE STRAIT OF HORMUZ,

SETTING UP A TOLL. IT IS A LOT OF OIL THESE

TANKERS CARRY. WE THINK ABOUT ANY SHIPS THAT

GO THROUGH THESE MAJORS STRAIT OR PORTS.

THE PANA MOUNTAIN NOW, I HAVE BEEN DOWN THERE SEEING LOTS OF

THINGS. THIS IS PART OF OUR MACRO SET

OUT. THE OTHER THINGS, ONE OF OUR

MOST READ STORIES ON THE WAR IN IRAN. IRAN'S BIGGEST GULF ARAB

NEIGHBORS CONSIDERING JOINING THE WAR AGAINST IRAN, COULD BE

PUSHED TO IF TEHRAN ATTACKS THEIR CRITICAL INFRASTRUCTURE,

ACCORDING TO PEOPLE WITH KNOWLEDGE OF THE SITUATION.

THIS IS WHERE WE ARE. TIM:

WE WELCOME BACK RAY TAKEYH , SENIOR FELLOW FOR MIDEAST

STUDIES AT THE COUNCIL ON FOREIGN RELATIONS.

HE IS THE AUTHOR OF SEVERAL BOOKS, INCLUDING GUARDIANS OF

THE REVOLUTION, IRAN AND THE WORLD AND THE WORLD IN THE AGE

OF THE AYATOLLAHS. WE WANT TO START WITH THE BACK

AND FORTH WITH WHAT AXIOS IS REPORTING, THE IDEA OF IRAN

AGREEING TO A PLAN TO END THE WAR. THE PUSHBACK WE GOT EARLIER

THIS WEEK, THE COMMENTS FROM THE PRESIDENT THAT SENT MARKETS

SOARING YESTERDAY. WHAT'S YOUR VIEW ON THE END OF

THIS CONFLICT? RAY: ON THE AMERICAN SIDE, THE

PRESIDENT MAY BE LOOKING FOR AN OFFRAMP WITH EVERYTHING THAT

HAS HAPPENED IN THE MARKETS AND SO ON.

HOWEVER, WITH PRESIDENT TRUMP THERE IS ALWAYS A LARGE NUMBER

OF OPTIONS HE HAD CONSIDERED. THERE IS A LOT OF MILITARY

DEPLOYMENTS IN THE REGION.

WHAT WE HAVE SEEN IN PREVIOUS ROUNDS OF NEGOTIATIONS IN JUNE

AND FEBRUARY, THEY WERE USUALLY PRELUDES TO WAR.

THIS MAY BE ANOTHER ONE, WHAT THE PRESIDENT IS SAYING ABOUT

DISCUSSIONS DOESN'T MEAN THAT MANPOWER THAT HE IS DEPLOYING,

BUT HE MAY BE LOOKING FOR AN OFFRAMP FROM A WAR PROVING MORE

COMPLEX. I EXPECT THE IRANIANS ARE ALSO

LOOKING FOR A WAY OUT. THEY HAVE SUFFERED A GREAT DEAL

AND MAY BE TRYING TO FIGURE OUT HOW TO EXTRICATE THEMSELVES AS

WELL. WE WILL SEE IF THIS MEDIATION

IS REAL AND SEE IF IT CAN PRODUCE SOME SORT OF AGREEMENT

NOT TO SETTLE THE CONFLICT BUT AT LEAST SOME ARMISTICE FOR NOW

THAT ALLOWS EVERYBODY TO RETURN TO THEIR CORNERS. CAROL:

ON TOP OF THAT, ONE OF OUR MOST

READ STORIES ON THE BLOOMBERG ABOUT IRAN'S MOST POWERFUL --

OR BIGGEST GULF ARAB NEIGHBORS CONSIDERING JOINING THE WAR.

I'M TRYING TO UNDERSTAND THAT. HELP ME OUT IN YOUR

UNDERSTANDING AND KNOWLEDGE OF THIS REGION.

DID SAUDI ARABIA KNOW THAT DONALD TRUMP WAS GOING TO DO

THIS? WAS WILLING TO GO ALONG?

AND MAYBE THIS IS PART OF A BIGGER STRATEGY.

OR ARE THEY JUST SAYING, THIS COULD BE AN OPPORTUNITY FOR US

TO CHANGE THE DIRECTION OF THE MIDDLE EAST?

I'M TRYING TO UNDERSTAND THE STEPS.

OR IS IT ALL HAPPENING IN REAL TIME WITH NO BIG STRATEGY? RAY:

I SUSPECT THE LATTER.

I'M NOT SURE IF THIS IS A VERY SYNCHRONIZED, THOUGHT OUT PLAN.

IN TERMS OF THE GULF, BEFORE THE WAR THEY WERE HAVING A

POLICY OF DÉTENTE WITH IRAN AND PRESSURING THE ADMINISTRATION

NOT TO ENGAGE IN A CONFLICT. THE IRANIANS WERE CLEAR ABOUT

WHAT THEY WOULD DO SHOULD THERE BE AN ATTACK.

THEY SAID THEY WOULD REGIONALIZED THE WAR AND TARGET

ENERGY SUPPLIES AS WELL AS PASSAGE TO THE PERSIAN GULF.

THERE WAS NOTHING SURPRISING ABOUT WHAT THE IRANIANS DID.

THERE ARE SOME REPORTS THAT GULF STATES ARE BECOMING MORE

AGGRESSIVE, BUT I SUSPECT THAT THE END OF THIS WAR THEY WILL

RETURN TO THE PRACTICE OF TRYING TO BALANCE THE TWO

SIDES, HAVING A RELATIONSHIP WITH THE UNITED STATES BUT ALSO

NOT BEING ANTAGONISTIC TO THEIR NEIGHBOR IN THE NORTH, WHICH

WOULD BE INJURED AND ANGERED. TIM:

THE IMPLICATION OF WHAT YOU SAID IS WE DON'T SEE A VERY

CHANGED IRAN FOLLOWING THIS CONFLICT. RAY:

NO, IRAN WILL CERTAINLY CHANGE. THE ISLAMIC REPUBLIC THAT

SURVIVES THIS WAR IS GOING TO BE VERY DIFFERENT THAN THE ONE

BEFORE. FOR ONE THING, A LARGE NUMBER

OF SENIOR OFFICIALS HAVE BEEN DECAPITATED.

ONE OF THE THINGS THAT HAS HAPPENED WITH THIS LARGE-SCALE

DECAPITATION IS YOU ARE BEGINNING TO FINALLY SEE A

GENERATIONAL SHIFT WHERE YOU SEE A NEW GROUP OF PEOPLE

GRADUALLY COMING TO POWER. IN TERMS OF MILITARY SERVICE,

THE REVOLUTIONARY GUARD AND OTHERS, YOU BEGIN TO SEE

SECOND-TIER OFFICIALS COMING TO POWER. FOR THEM, THEIR FORMATIVE

EXPERIENCE WAS NOT THE 1979 REVOLUTION, WASN'T EVEN THE

IRAN-IRAQ WAR. THEY MAY HAVE PARTICIPATED IN

LATTER STAGES. FOR A LOT OF THEM, THE MOST

FORMATIVE EXPERIENCE WAS THE SYRIAN CIVIL WAR.

A LARGE NUMBER OF IRANIAN MILITARY OFFICIALS ROTATED

THROUGH THAT SYRIAN CIVIL WAR. ABOUT 1000 DIED.

THE LESSON THEY DREW FROM THE SYRIAN CONFLICT AT WHAT WAS

BILLED FOR A LONG TIME, COLLAPSED IN THREE WEEKS.

THEY ARE LIKELY TO BE MORE VICIOUS AND PROTECTION OF THEIR

PATRIMONY AT HOME. THE ISLAMIC REPUBLIC THAT COMES

OUT OF THIS WAR IS LIKELY TO BE MORE MILITANT BUT ALSO MORE

BRITTLE AND A SENSE THAT THE ELITE COMING TO POWER ARE LESS

COMPETENT IN STATECRAFT AND MANAGEMENT THAN THE ONES

DECAPITATED. NOT THAT THE ONES THAT WERE

KILLED WERE EXACTLY MANAGERS OF COMPETENCE.

THE ISLAMIC REPUBLIC IS GOING TO BE VERY DIFFERENT GOING

FORWARD. THE ENTIRE STRATEGIC DOCTRINE

MAY CHANGE. THE VALUE OF NUCLEAR WEAPONS

HAS NEVER BEEN GREATER FOR THIS REGIME WITH EVERYTHING THAT HAS

HAPPENED. WE ARE GOING TO COME OUT OF

THIS WITH A VERY DIFFERENT REGIME.

RAMIFICATIONS WILL UNFOLD OVER TIME. CAROL:

A DIFFERENT REGIME, BUT IF I HEARD YOU CORRECTLY, THAT

NUCLEAR POWER IS STILL IMPORTANT, MAYBE MORE IMPORTANT

THAN EVER. RAY: ABSOLUTELY.

IT WAS ONE OF THE TENSIONS

BETWEEN THE LATE SUPREME LEADER AYATOLLAH KHAMENEI AND SOME

WITHIN THE SECURITY SERVICES. THE PERCEPTION WAS THAT THE

ISRAELIS, AFTER OCTOBER 7, NETANYAHU CERTAINLY, SAID THAT

THE RULES OF THE GAME HAD CHANGED, AND HE HAS PROVEN THAT.

ISRAEL BECAME MUCH MORE PREEMPTIVE IN DISMANTLING

STRIKES AND DEALING WITH THREATS BEFORE THEY

METASTASIZED. THERE WERE A LOT OF VOICES

WITHIN SECURITY SERVICES IN IRAN SAYING, IF THE ISRAELIS

CHANGE THE RULES, WE SHOULD AS WELL AND CROSSED THE NUCLEAR

THRESHOLD. AND WERE VERY PUBLIC ABOUT THAT.

FOR WHATEVER SET OF REASONS, AYATOLLAH KHAMENEI DIDN'T DO IT.

AS A RESULT, HE LOST HIS NUCLEAR PROGRAM AND HIS LIFE.

CAROL: DOES THE U.S. HAVE A BIGGER ENEMY NOW IN IRAN

OR A BETTER RELATIONSHIP GOING FORWARD? QUICKLY IF YOU CAN.

RAY: IT HAS A MORE RADICALIZED ENEMY, BUT IN TERMS OF ITS

INTENT. BUT AT LEAST FOR NOW WEAKER IN

CAPABILITIES. CAROL: ALWAYS APPRECIATE YOUR INSIGHT.

SENIOR FELLOW FOR MIDDLE EAST STUDIES AT THE COUNCIL ON

FOREIGN RELATIONS. OF COURSE UNDERSTANDS THIS

REGION. THAT'S THE LATEST ON THE WAR IN

IRAN, BUT WE CONTINUE TO TRACK HEADLINES. TIM:

I WANT TO BRING ON FORMER U.S. SECRETARY OF COMMERCE WILBUR

ROSS, WELL KNOWN TO THE BLOOMBERG AUDIENCE, A LONGTIME

DISTRESSED INVESTOR. HE HAS RESTRUCTURED OVER $4

BILLION OF ASSETS, FROM AIRLINE APPAREL TO AUTO PARTS,

HOMEBUILDING INSURANCE, MARINE TRANSPORT, OIL, GAS, SHIPYARD,

STEEL, TEXTILE, TRUCKING INDUSTRIES. CAROL:

GOOD TO HAVE YOU, CHAIRMAN AND CEO OF ROSS ACQUISITION

CORPORATION. GREAT TO HAVE YOU.

BIG PICTURE, YOU TOLD SCARLET FU THE ACTION IN IRAN IS LONG

OVERDUE. YOU ARE NOT ALONE IN THAT.

YOU ALSO BELIEVE THE WAR IS TEMPORARY EVEN IF WE DON'T

EXACTLY KNOW WHEN IT ENDS. . WHAT DO YOU BELIEVE IS THE

LONG-TERM IMPACT WHEN IT COMES TO GEOPOLITICS, GLOBAL MARKETS?

HOW DO YOU THINK ABOUT IT? WILBUR:

THE BIG FIRST WAR WILL MAKE LESS LIKELY ARMED CONFLICT

ELSEWHERE, BECAUSE PEOPLE HAVE NOW SEEN THAT AT LEAST UNDER

PRESIDENT TRUMP, THE U.S.

IS WILLING TO USE ITS ENORMOUS MILITARY STRENGTH TO DEAL WITH

THREATS. THAT WAS NOT AT ALL CLEAR UNDER

THE BIDEN ADMINISTRATION NOR OBAMA.

SO I SO I THINK PART OF THE REASON SO MUCH TROUBLE BOILED

UP, THEY VIEWED US AS A PAPER TIGER.

BUT WHAT HAPPENED IN VENEZUELA, WHAT’S HAPPENING NOW IN IRAN,

AND WHAT’S PROBABLY GOING TO HAPPEN VERY QUICKLY, I THINK

PEOPLE HAVE SEEN THE SLEEPING DRAGON IS NO LONGER SLEEPING.

SLEEPING DRAGON IS PERFECTLY READY TO PUT ITS FANGS WHEREVER

THEY’RE NEEDED. SO I THINK THE OLD SAYING HOLDS

TRUE. THE BEST WAY TO AVOID A WAR IS

THAT EVERYBODY KNOWS WE’RE FULLY PREPARED NOT ONLY TO

PURSUE IT, BUT WIN IT. TIM: YOU MENTIONED VENEZUELA, CUBA,

IRAN. AT THIS POINT, SECRETARY, WHO

ELSE HAS BEEN PUT ON NOTICE? WILBUR:

WELL, EVERYBODY HAS BEEN PUT ON NOTICE.

I THINK ULTIMATELY CHINA AND RUSSIA ARE ON NOTICE.

WHILE WE HAVEN’T DONE MUCH ABOUT INVADING THEM, PROBABLY

WON’T INITIATE ANYTHING LIKE THAT, WE HAVE PROVIDED SUPPORT

OF ONE KIND TO ANOTHER TO UKRAINE.

WE CERTAINLY HAVE BEEN ARMING TAIWAN, AND EVEN MORE

IMPORTANTLY, WE’VE BEEN MOVING A LOT OF THE SEMICONDUCTOR

TECHNOLOGY FROM TAIWAN TO THE UNITED STATES.

SO WE’RE BECOMING BOTH LESS VULNERABLE IN THE EVENT

SOMETHING HAPPENED IN TAIWAN, AND YET ALSO SHOWING THAT WE’RE

VERY INTERESTED IN IT. CAROL: I FIND IT INTERESTING, WILBUR,

THAT YOU WENT TO RUSSIA, AND I JUST THINK, YOU KNOW, MAYBE YOU

CAN GIVE SOME INSIGHT INTO PRESIDENT TRUMP, BECAUSE I

THINK THERE ARE THINGS THAT ARE SAID THAT SEEM TO INDICATE A

FRIENDSHIP, A CAMARADERIE WITH A CERTAIN LEADER, BE IT

PRESIDENT PUTIN, AND YET IT SOUNDS LIKE FROM WHAT YOU SAID

THAT RUSSIA NEEDS TO BE KIND OF ON GUARD WHEN IT TOMS TO THE

UNITED STATES. HELP US UNDERSTAND PRESIDENT

TRUMP AND WHO HE SEES AS TRUE ALLIES AND WHO HE SEES AS FOES.

WILBUR: WELL, IN TERMS OF RUSSIA, MY

POINT IS VERY SIMPLE. RUSSIA HAS HAD A TERRIBLE

STRUGGLE WITH UKRAINE, MUCH SMALLER, MUCH WEAKER COUNTRY.

AND IN FACT, LATELY THE LAST THREE, FOUR THAT I’VE SEEN, THE

UKRAINIANS REGAINED 125 SQUARE MILES OF TERRITORY THAT RUSSIA

HAD PREVIOUSLY OCCUPIED THERE. SO CLEARLY THE RUSSIAN WAR,

AFTER ALL THESE YEARS, ALL THESE VAST NUMBERS OF DEATHS,

ALL THIS DESTRUCTION, BOTH TO RUSSIA AND UKRAINE, HAVEN’T

REALLY GOTTEN AS FAR AS THEY THOUGHT.

I THINK IF RUSSIA HAD ANY IDEA THAT THE UKRAINIAN WAR WOULD GO

THE WAY IT HAS, I DON’T THINK THEY WOULD HAVE GONE IN.

THEY THOUGHT IT WOULD BE AN EASY TAKE WALK, AND THEY WERE

WRONG. NOW, ROLL THAT FORWARD -- CAROL:

WELL, IS THAT THE SAME WITH HOW YOU SEE MAYBE THE U.S.

APPROACH ON IRAN? FORGIVE ME FOR INTERRUPTING,

BUT I THINK THERE WAS A THINKING THAT THIS WAS GOING TO

BE A LOT EASIER. DO YOU AGREE? WILBUR: NO, I DON’T THINK SO.

I THINK, IN FACT, IT HAS GONE BETTER THAN OUR EXPECTATIONS

COULD HAVE HAD. WHO WOULD HAVE THOUGHT WITHIN

THE FIRST COUPLE OF WEEKS WE WOULD GET TOTAL AIR SUPERIORITY?

WHO WOULD HAVE THOUGHT WE COULD HAVE KNOCKED OUT 100-SOME-ODD

VESSELS, VIRTUALLY THE WHOLE SERIES OF VESSELS THAT IRAN HAS.

WHO WOULD HAVE THOUGHT WE COULD HAVE DONE AS MUCH DAMAGE TO THE

MISSILE SITE AND TO THE NUCLEAR FACILITIES AS WE HAVE.

SO I THINK THE WAR HAS GONE MUCH MORE RAPIDLY THAN WE COULD

HAVE THOUGHT. AND I THINK MOST REMARKABLE AND

FORTUNATE PART IS THAT THERE HAVE BEEN SO FEW AMERICAN

CASUALTIES IN THE WAR. NOW, EVEN ONE CASUALTY IS A

HORRIBLE THING AND WOULD HAVE FELT A HECK OF A LOT BETTER

WITHOUT ANY. BUT WHEN YOU CONSIDER

EVERYTHING, IT’S BEEN VERY, VERY SMALL.

MY BIG FEAR HAS BEEN AMERICAN SOLDIERS COMING HOME IN BODY

BAGS, WEEK AFTER WEEK AFTER WEEK.

I THINK THAT WOULD HAVE CAUSED A LOT OF UNREST WITHIN OUR

POPULATION. BUT THE OTHER BIG STRATEGIC

MESSAGE, WE KNOCKED OUT THEIR AIR DEFENSE MECHANISM PRETTY

QUICKLY. IRAN IS ESSENTIALLY DEFENSELESS

AGAINST OUR ATTACK. AND IF YOU ROLL BACK TO

VENEZUELA, THEY KNOCKED THAT OUT WITHIN A FEW MINUTES.

GUESS WHOSE DEFENSE SYSTEM THAT WAS. THAT WAS A RUSSIAN DEFENSE

SYSTEM. SO YOU ASK WHY WOULD RUSSIA

GIVE SECOND THOUGHT? I THINK THAT WE GIVE SECOND

THOUGHT BECAUSE WE’VE JUST SEEN WHAT IT MEANS TO HAVE THE U.S.

PUSHED TOO FAR. TIM: RIGHT. WE’RE SPEAKING WITH WILBUR ROSS

FROM ROSS ACQUISITION CORP, ALSO FORMER U.S.

SECRETARY OF COMMERCE. YOU MENTIONED THE MOVEMENT OF

CHIP PRODUCTION FROM TAIWAN TO THE UNITED STATES.

IT’S HAPPENING VERY SLOWLY, AND ANALYSTS DON’T KNOW IF IT CAN

EVER HAPPEN COMPLETELY. BUT YOU ARE KNOWN FOR YOUR

INVESTMENTS IN INDUSTRIES THAT WERE ONCE THOUGHT LONG GONE,

ESPECIALLY IN THE U.S. STEEL PLANTS, TEXTILE MILLS.

THE PRESIDENT CERTAINLY WANTS TO BRING BACK THAT TYPE OF

MANUFACTURING TO THE UNITED STATES AND BUILD IT UP HERE.

I’M CURIOUS, ON YOUR VIEW ABOUT HOW NATIONAL SECURITY CONCERNS

ARE CHANGING THAT GLOBALLY. APART FROM SEMICONDUCTORS, HOW

ARE YOU THINKING ABOUT SOME OF THESE OTHER INDUSTRIES THAT THE

PRESIDENT IS SUPPORTING? WILBUR: WELL, HE’S SUPPORTING ALL

TECHNOLOGY, AND I THINK THAT’S THE RIGHT DIRECTION TO GO.

BECAUSE ANY FUTURE WAR IS GOING TO BE FOUGHT IN SPACE AND IN

CYBER. SO I THINK DIRECTIONALLY HE

COULD NOT BE MORE CORRECT THAN WHAT HE’S DOING.

I ALSO THINK THAT HE’S CORRECT IN FOSTERING A.I., BECAUSEY IS

WHAT WILL PRODUCE MORE PRODUCTIVITY, AND THEREFORE,

MORE ECONOMIC GROWTH. EVERY BIG TECHNOLOGICAL

INNOVATION HAS ALWAYS HAD THE

LONGER TERM EFFECT OF ADDING JOBS.

SO WE NEED TO BE SURE THAT OUR EDUCATIONAL SYSTEM CAN KEEP UP

WITH THE NEEDS FOR AN INCREASINGLY TECHNICAL ECONOMY.

AS LONG AS IT DOES, I THINK WE’LL BE THERE.

NOW, WHY IS THAT IMPORTANT? THE WAY WE WON WORLD WAR II,

AND THE WAY I BELIEVE REAGAN WON THE COLD WAR WAS THE

RUSSIAN MILITARY AND THE RUSSIAN CIVILIAN ECONOMY COULD

NOT KEEP UP WITH IT. AND THEREFORE, AT THE END OF

THE DAY, A VERY, VERY KEY COMPONENT OF DEFENSE STRATEGY

IS ECONOMIC POWER. CAROL: WE HAVE TO LEAVE IT THERE.

WILBUR, WE APPRECIATE YOUR TIME SO MUCH, WILBUR ROSS FROM ROSS

ACQUISITION CORPORATION, FORMER U.S. COMMERCE SECRETARY DURING

PRESIDENT TRUMP’S FIRST TERM. RIGHT NOW, WE WANT TO HEAD DOWN

TO WASHINGTON, D.C., THE ANNUAL GATHERING KNOWN AS THE HILL AND

VALLEY FORUM, BRINGING TOGETHER TECH AND POLICY MAKERS.

THAT’S WHERE WE FIND THE CO-HOST OF B-TECH, CARE LINE

HYDE AND ED LUDLOW. CAROLINE, OVER TO YOU. CAROLINE:

IT IS ALL ABOUT AUTONOMOUS, AUTONOMOUS DRIVING, AUTONOMOUS,

WELL, THE FUTURE OF VEHICLES AND TRANSPORT, AND MUCH MORE IN

THE WORLD OF DEFENSE. PLEASED TO WELCOME PETER

LUDWIG,. AND WHAT DOES YOUR TECHNOLOGY

DO?

>> WE PROVIDE THE INFRASTRUCTURE LAYER FOR

PHYSICAL A.I. THE COMPLETE SOFTWARE STACK

THAT ENABLES IT TO MOVE, EVERYTHING FROM CARS TO TRUCKS

TO MINING, CONSTRUCTION EQUIPMENT, AND THEN DRONES AND

BOATS. CAROLINE: AND THEREFORE, THAT’S

INTERESTING, RIGHT? WE’RE AT THE INTERSECTION OF

SILICON VALLEY AND GOVERNMENT. WE’RE AT THE INTERSECTION, FOR

YOU, DEFENSE, AND ALSO COMMERCIAL.

HOW IS THAT MOVEMENT INTO THE WORLD OF DEFENSE, DOES IT

HAPPEN ORGANICALLY?

>> SOMEWHAT. WE’RE PASSIONATE ABOUT THE

FIELD BROADLY. CERTAINLY IT’S A DELIVERED

CHOICE ON OUR PART TO ENTER THE FIELD.

BUT THERE’S SO MUCH COMMERCIAL TECHNOLOGY THAT REALLY

TRANSLATES SO WELL INTO DEFENSE. JUST SOME EXAMPLES, WE DO WORK

WITH THE NAVY DEPLOYING THE SAME KINDS OF DATA COLLECTION

TECHNOLOGY WE USE FOR SELF-DRIVING CARS ON NAVY

SHIPS, AND WE DO WORK ON TAKING OUT OF OUR COMMERCIAL BUSINESS.

ED: ONE OF THE THEMES OF THE HILL

AND VALLEY FOR ’EM, NOT NECESSARILY JUST THIS YEAR, BUT

THE NUMBER OF YEARS THIS HAS RUN, IS HOW EASY OR NOT EASY IS

IT DOING BUSINESS WITH THE MILITARY APPARATUS AT THIS

NATION, AND THROUGHOUT THE DAY, A NUMBER OF FOUNDERS HAVE GIVEN

EXAMPLES WHERE YOU SEE DECISIONS MADE IN DAYS, WHERE

PREVIOUSLY IT HAD BEEN MONTHS. WHAT’S THE EXPERIENCE BEEN LIKE

FOR APPLIED IN GETTING AUTONOMOUS SOFTWARE INTEGRATED

INTO VARIOUS PIECES OF HARDWARE THAT OUR MILITARY APPARATUS

RELIES ON?

>> THINGS ARE ACCELERATING, NO DOUBT ABOUT THAT.

I THINK IN OUR OWN CASE, WE’VE SEEN SIMILAR THINGS, WHERE

THINGS MAYBE HAVE STALLED FOR EVEN A YEAR OR SO, THAT ARE

REALLY BEING UNBLOCKED. THERE IS A REAL DESIRE, I THINK

BY THE WHOLE APPARATUS, TO BRING DUAL USE TECH OUT MORE

QUICKLY. ED: PHYSICAL A.I.

IS HARD FOR SOME PEOPLE TO UNDERSTAND.

IT IS A PHYSICAL THING, HARDWARE IN THE REAL WORLD,

WHERE YOUR CONFIDENCE IN SOFTWARE ALLOWS THAT TO MOVE

AROUND A SPACE AND MAKE AUTONOMOUS DECISIONS.

WHAT ARE SOME OF THE REAL-WORLD DEPLOYMENT YOU CAN TALK ABOUT?

THERE’S GREAT SKEPTICISM IT’S MOVED BEYOND ROBO TAXIS AND

ACTUALLY DRONE TECHNOLOGY IN THE CONTEXT OF WEAPONS.

>> CERTAINLY SELF-DRIVING CARS, THAT IS THE BIG FIRST

APPLICATION, SO WE HAVE A TON OF TECHNOLOGY THAT’S ON A BUNCH

OF COMPANIES ALL OVER THE WORLD. CAROLINE: CAN YOU NAME THEM?

>> WE WORK WITH 18 OF THE TOP 20 AUTOMAKERS.

EVERYONE IS USING SOME PART OF OUR TECHNOLOGY AT THIS POINT.

IN THE DEFENSE SECTOR, THERE’S A LOT MORE FOCUS ON DRONES AND

DRONE TECHNOLOGY, SO BOTH THE AUTONOMOUS SOFTWAY THAT RUNS ON

DRONES AND ALSO I THINK ABOUT THE EFFECTS THEY CAN ON SWARM

DRONES TOGETHER. CAROLINE: FROM YOUR PERSPECTIVE, THE

ETHICAL DILEMMA FOR COMPANIES MAKING THE TECHNOLOGY AND THEN

THE USE IN THE PENTAGON, HOW IS THAT SOMETHING THAT YOU’VE BEEN

ABLE TO BRIDGE AS A COMPANY, AS A LEADER OF THE COMPANY?

>> WE’RE A TECHNOLOGY COMPANY, SO WE FOCUS ON BUILDING THE

TECHNOLOGY. WE’RE NOT A POLITICAL COMPANY,

WE’RE NOT A POLICY COMPANY, AND I DON’T THINK THAT’S ACTUALLY

OUR ROLE TO PLAY. WE WANT TO MAKE SURE THAT WE

HAVE THE VERY BEST TECHNOLOGY AND THAT TECHNOLOGY IS

AVAILABLE, AND THEN I THINK THROUGH OUR ORDINARY POLITICAL

PROCESS, THAT’S HOW WE’LL ACTUALLY SET THE POLICIES. ED:

I ALWAYS WANT TO OFFER THE OPPORTUNITY WHEN A COMPANY LIKE

YOURS COMES ON THE SHOW TO EXPLAIN WHAT I CALL THEIR CORE

COMPETENCE IS, WHAT THEY’RE REALLY GOOD AT.

CAROLINE AND I FOR QUITE A LONG TIME NOW HAVE BEEN TALKING

ABOUT TESLA BEING VERY GOOD AT AUTONOMY, A VISION-BASED

APPROACH WHERE THEIR SOFTWARE, THEY WOULD SAY, IS PRETTY GOOD.

NVIDIA IS NOW WADING INTO THE PHYSICAL A.I.

SPACE, NOT JUST WITH CHIPS THAT ARE GOOD AT THE EDGE, THEIR OWN

SOFTWARE, LIBRARIES, CATALOGUES OF CUSTOM MODELS.

WHY IS IT THAT YOURS ARE BETTER THAN THEIRS?

>> SO I WOULDN’T SAY THAT WE’RE BETTER OR WORSE THAN THEIRS.

WE’RE ACTING AS AN INFRASTRUCTURE PROVIDER, AND WE

WORK WITH THE ENTIRE INDUSTRY. SO OUR CORE COMPETENCY, WE

BUILD REALLY GREAT TECHNOLOGY FOR PHYSICAL A.I., AND WE’RE

GREAT AT WORKING WITH THE MANUFACTURERS OF THESE SYSTEMS

TO GET IT INTEGRATED AND DEPLOYED.

WE’RE NOT JUST LOOKING AT THE TECHNOLOGY DEVELOPMENT, BUT

ALSO ACTUALLY GETTING THIS DEPLOYED.

THE HARD PART OFTENTIMES IS ACTUALLY GETTING IT INTO THE

REAL WORLD AND THEN SOLVING ALL OF THOSE DIFFICULT PROBLEMS

THAT HAPPEN WHEN YOU’RE REALLY MAKING USE OF THE SYSTEMS.

CAROLINE: IT SOUNDS AS THOUGH YOU FEEL

THERE’S A FUTURE OF PARTNERSHIP, NO MATTER WHAT

WITH YOUR TECHNOLOGY. ED: OR THE AUTOMAKERS.

IT’S A REASONABLE ARGUMENT, RIGHT? CAROLINE:

THE ANXIETY OFTEN IS EVENTUALLY FROM YOUR PERSPECTIVE, WHAT

MAKES NVIDIA NOT ABLE TO RE-CREATE WHAT YOU’VE BUILT?

>> WELL, AGAIN, THESE ARE HUGE INDUSTRIES, RIGHT?

IF YOU THINK ABOUT JUST THE AUTOMOTIVE INDUSTRY, IT’S

SEVERAL PERCENTAGE POINTS OF THE GLOBAL GROSS DOMESTIC

PRODUCT, AND THERE ARE MILLION DOLLARS OF PEOPLE AND EMPLOYEES

IN ALL OF THESE INDUSTRIES, SO THERE’S PLENTY OF ROOM FOR MANY

PLAYERS. I THINK NO ONE COMPANY IS GOING

TO DOMINATE THE ENTIRE INDUSTRY. NVIDIA PLAYS AN IMPORTANT ROLE

WITH CHIPS, BUT THERE’S MANY OTHER LAYERS TO THE TECHNOLOGY

STACK TO ACTUALLY GET THIS TECHNOLOGY DEPLOYED. ED:

I SUPPOSE THE DIFFERENCE IS ROBO TAXI IN THE PHYSICAL A.I.

SPACE, ROBOTICS WORLD, THE USE OF HUMANOID ROBOTS IN THE

INDUSTRIAL SETTING, THIS COUNTRY STILL WAITING FOR SORT

OF THOROUGH FEDERAL LEVEL REGULATORY OVERSIGHT, A LIST OF

RULES. THAT’S WHAT WE HEAR HERE AT

LEAST. WHERE DO YOU STAND ON THAT, THE NEED FOR IT?

>> I THINK FOR ROBO TAXIS, THERE IS STRONG NEED FOR A

FEDERAL POLICY. RIGHT NOW IT IS VERY STATE BY

STATE, AND THAT’S ABSOLUTELY IMPEDING PROGRESS, FOR EXAMPLE,

IN LONG HAUL TRUCKING, WHERE YOU HAVE TRUCK ROUTES THAT

WOULD GO BETWEEN MULTIPLE STATES.

AND IF YOU HAVE TO PLAN YOUR TRUCKING ROUTES BASED ON WHERE

THE LAWS ALLOW DRIVERLESS TRUCKING, THAT LIMITS THE

MARKET POTENTIAL. I THINK LIKEWISE IN ROBO TAXIS,

THE LEGISLATION WOULD BE EASIER TO FOLLOW IF IT WERE A NATIONAL

FRAMEWORK RATHER THAN STATE BY STATE.

I THINK WE’LL SEE THE SAME THING IN HUMANOIDS.

HUMANOID INDUSTRY IS EARLIER, BUT IT’S ADVANCING VERY QUICKLY.

I ACTUALLY HOPE THAT WE CAN COME UP WITH A SINGLE FRAMEWORK

FOR ALL OF THESE A.I. SYSTEMS. CAROLINE:

PETER, IT’S A JOY HAVING YOU HERE.

I KNOW YOU’RE USUALLY ON THE WEST COAST, BUT YOU’RE THE

C.T.O., THANK YOU FOR MAKING TIME WITH US TODAY.

BACK CAROL: THANK YOU SO MUCH CAROLINE HYDE

AND ED LUDLOW THERE WITH THE COFOUNDER OF INTUITION. TIM:

THE PRESIDENT SPEAKING IN THE OVAL OFFICE IN THE SWEARING-IN

CEREMONY OF MARKWAYNE MULLIN. SAYING RUBIO, VANCE AND OTHERS

ARE NEGOTIATING WITH IRAN. THEY WOULD LIKE TO MAKE A DEAL

AND AGREED TO NEVER HAVE A NUCLEAR WEAPON.

LET'S GO TO THE PRESIDENT NOW TAKING QUESTIONS. PRES. TRUMP:

THEY CAME FROM THE CONGO, ALL OVER SOUTH AMERICA, A ROUGH,

ROUGH, ROUGH PEOPLE. SO I UNDERSTAND WHAT IT MEANS,

IT WOULD'VE LIKED TO HAVE CAPTURED MORE.

I'M NOT CAPTURING SO MUCH AS REMOVING, YOU KNOW REMOVING

THOUSANDS OF PEOPLE AND MANY ARE SELF-SUPPORTING BECAUSE WE

ARE GOING AFTER THEM SO POWERFULLY THAT THEY ARE

SELF-SUPPORTING. I THINK THAT'S ONE OF THE BIG

UNKEPT SECRETS IS ITS WITH THOUSANDS AND THOUSANDS OF

PEOPLE AND THEY ARE SELF-SUPPORTING THEY ARE GOING

BACK TO WHERE THEY CAME FROM. WHAT WE WANT IS THE CRIMINALS,

WE ARE REALLY FOCUSED ON THOSE CRIMINALS.

>> WHAT'S YOUR MESSAGE TO DEMOCRATS AND AMERICANS THAT

ARE STUCK IN AIRPORTS BECAUSE DEMOCRATS WANT FUND DHS?

PRES. TRUMP: WHAT'S DEVASTATING? >> AMERICANS ARE STUCK AT

AIRPORTS. PRES. TRUMP: THIS IS A DEAL THAT WAS DONE IN

THE GREAT BIG BEAUTIFUL DEAL WHICH GAVE THE BIGGEST TAX CUTS

EVER INCLUDING NO TAX ON TIPS AND NO TAX ON SOCIAL SECURITY

FOR THE SENIORS, THINK OF IT, NO TAX ON OVERTIME.

NO TAX DEDUCTIONS WHEN YOU BUY A CAR YOU TAKE MONEY AND PAY

INTEREST AND DEDUCT IT. WE NEVER HAD THAT FOR PEOPLE

BUYING CARS. IF IT'S AN AMERICAN CAR, ONLY

IF IT'S AN AMERICAN CAR.

BUT -- THEY ARE JUST, THEY STICK TOGETHER THE DEMOCRATS I

TELL YOU. WE HAVE SOME THAT WILL THEY ARE

NOT GOOD STICKERS. LIKE TOM MASSEY AND CONGRESS

IT'S JUST A TERRIBLE PERSON, BUT THEY DON'T VOTE, RARELY FOR

STUFF.

HE SAID THE OTHER DAY, GREAT PRESIDENT, ONE OF THE GREATEST

PRESIDENTS BUT I SAID TO ME A FAVOR, VOTE FOR US AND DON'T

CALL ME GREAT, I WOULD RATHER HAVE THE VOTE THAN THE

STATEMENT. BUT WE HAVE PEOPLE WHO DON'T

STICK TOGETHER AND THOSE PEOPLE HOPEFULLY WILL SOMEDAY BE GONE.

THE THING I MOST RESPECTED BY THE DEMOCRATS EVEN ON HORRIBLE

POLICY, THEY STICK TOGETHER. BUT THEY DO HAVE THOSE HORRIBLE

POLICY -- TRANSGENDER FOR EVERYONE, OPEN BORDERS, MEN AND

WOMEN SPORTS, THEY HAVE THE WORST POLICY THAT YOU CAN

IMAGINE AND SO -- WHETHER THEY STICK TOGETHER OR NOT, THEY

HAVE TERRIBLE POLICY. WE HAVE GREAT POLICY.

REPUBLICANS HAVE GREAT POLICY, A COMMONSENSE POLICY BUT IT'S

GREAT POLICY, THAT'S OUR BIGGEST ADVANTAGE IS OUR POLICY.

>> ENCOURAGING ALLIES IN THE GULF TO BE MORE INVOLVED IN THE

OPERATION? ARE YOU ENCOURAGING OUR ALLIES

IN THE GULF TO BE MORE INVOLVED QUESTION MARK PRES. TRUMP:

YEAH I MEAN A LITTLE BIT, BUT MORE NATO -- I THINK OUR GULF

ALLIES ARE DOING PRETTY GOOD TO BE HONEST WITH YOU.

THE UAE HAS BEEN HIT SO HARD,

HIT BY 1400 ROCKETS SHOT OUT OF THE AIR WITH OUR GREAT PATRIOT

MISSILES. THEY SHOT 100 MISSILES AT ONE

OF OUR AIRCRAFT CARRIERS, ONE THE BIGGEST SHIPS IN THE WORLD

AND OUT OF 101 MISSILES SHOT, EVERY SINGLE ONE OF THEM WAS

KNOCKED OUT. THINK OF THAT.

THINK OF WHAT THAT MEANS, 100 ONE MISSILES, A HIGHLY

SOPHISTICATED, VERY FAST MISSILES SHOT.

OUT OF 101, ALL 101 WERE SHOT DOWN AND NOW FOR THE MOST PART

LIE AT THE BOTTOM OF THE SEA. PRETTY AMAZING RIGHT?

PRETTY AMAZING, OUR MILITARY IS AMAZING.

YOU KNOW THE ATTACK I'M TALKING ABOUT RECENTLY.

101 SHOT, I SAID WOW. WE HAVE SOME PRETTY GOOD

EQUIPMENT. IT'S CALLED THE RED LINE.

THOSE RED LINES ARE THICK RIGHT? THEN WE SAW ONE BY ONE THEY GET

SHOT AND THOSE GUYS DO THE SHOOTING OF THE COOLEST

CUCUMBERS EVER. YOU DON'T HAVE A LOT OF TIME

WHEN THE MISSILES GOING AT 25 HUNDRED MILES PER HOUR, I DON'T

CARE HOW FAR AWAY IT IS YOU DON'T HAVE A LOT OF TIME.

BUT I WATCHED THEM -- I WATCH THEM SIT DOWN AND THINK, GREAT

STUDENTS, M.I.T., A LOT OF M.I.T., NOT AS MUCH INTO THE

MUSCLE AS THEY ARE THIS ONE RIGHT HERE.

AND AMAZING JUST TO WATCH THEM PERFORM UNDER GREAT PRESSURE.

BECAUSE THEY HAVE A MATTER OF SECONDS TO DO IT PROPERLY.

IT'S A BIG PROBLEM BECAUSE THESE WERE VERY POWERFUL

MISSILES GOING AND SO A LOT OF PEOPLE CHOKE. THEY DON'T CHOKE.

THE BEST IN THE WORLD.

>> WHAT WOULD BE YOUR MESSAGE TODAY TO THE TSA AGENTS STAYING

HOME IN RECENT DAYS AMID THIS IMPACT. PRES. TRUMP:

WELL SOME OF THEM ARE NEEDING MONEY BECAUSE THE DEMOCRATS CUT

OFF THEIR MONEY. I BLEND THE DEMOCRATS MORE THAN

ANYTHING ELSE. BUT SOME OF THEM THEY DIDN'T

GET PAID BECAUSE THEY ARE NOT FUNDED BY THE DEMOCRATS.

THIS IS A DEMOCRAT PROBLEM. I SAID TO THE SENATE WHY DON'T

WE SELL THIS AS A DEMOCRAT PROBLEM.

I THINK THE POLLS ARE SHOWING IT'S A DEMOCRAT PROBLEM AND

THEY WILL DO ANYTHING AND TURN ON A COUNTRY TO WIN THE

MIDTERMS. AND IF WE EVER WENT BACK TO OUR OLD POLICIES WE

WOULDN'T HAVE A COUNTRY LEFT.

>> A DEAL WITH REPUBLICANS AND DEMOCRATS IN THE SENATE TO FUND

ALL BUT ENFORCEMENT OPERATIONS OF ICE TO GET THE TSA AGENTS

REPAID, WOULD YOU SIGN THAT? PRES. TRUMP:

I DON'T WANT TO COMMENT UNTIL I SEE THE DEAL BUT AS YOU KNOW

THEY ARE NEGOTIATING A DEAL. I THINK ANY DEAL THEY MAKE I'M

PRETTY MUCH NOT HAPPY WITH. THESE GUYS CAME AND THEY WOULD

NOT PAY PEOPLE. THEY HAD A DEAL TO PAY, THEY

HAD TO BREAK THEIR DEAL. THE DEMOCRATS BROKE THE DEAL

THAT THEY HAD. IT WAS ALL DONE, EVERYTHING WAS

FINE AND THEY JUST SAID WE WILL NOT PAY ANY MORE.

AND -- AND AT A VERY DIFFICULT TIME THEY HEARD OUR COUNTRY.

THEY CALL IT A WAR, I CALL IT A MILITARY OPERATION.

A VERY SUCCESSFUL ONE.

SUCCESSFUL LIKE NOBODY'S EVER SEEN BEFORE.

VENEZUELA WAS EQUALLY AS SUCCESSFUL, THAT WAS A GREAT

THING. THE DEMOCRATS HAD A DEAL IT WAS

A DONE DEAL AND THEY SAID WE ARE NOT IN A PAY.

SO A LOT OF PEOPLE SUFFERED. AND PUT OUR COUNTRY IN DANGER.

>> ON IRAN, CAN YOU GIVE US ANY MORE SENSE OF WHO EXACTLY IN

IRAN YOU ARE SPEAKING WITH. PRES. TRUMP:

I HATE TO SAY THIS IN FRONT OF

THESE YOUNG PEOPLE, THEY'RE NOT CHILDREN, THEY SOUND LIKE

ADULTS TO ME EVEN THOUGH THEY'RE SORT OF CHILDREN.

HE'LL ALWAYS BE YOUR CHILDREN. I HATE TO SAY IT BUT WE KILLED

ALL THEIR LEADERSHIP AND THEN THEY MET TO CHOOSE NEW LEADERS

AND WE KILLED ALL OF THEM. AND NOW WE HAVE A NEW GROUP AND

WE CAN EASILY DO THAT. BUT LET'S SEE HOW THEY TURN OUT.

WE HAVE REALLY REGIME CHANGE YOU KNOW THIS IS A CHANGE IN

THE REGIME BECAUSE THE LEADERS ARE ALL VERY DIFFERENT THAN THE

ONES THAT WE STARTED OFF WITH THAT CREATED ALL THOSE PROBLEMS

SO I THINK WE CAN SAY THIS IS REGIME CHANGE RIGHT?

I DON'T TRUST ANYBODY, I DON'T TRUST YOU.

THAT'S ONLY BECAUSE I KNOW YOU. BUT IF I DIDN'T KNOW YOU I

WOULD PROBABLY HAVE MORE TRUST. BUT I DON'T TRUST ANYBODY.

WHY DO YOU SAY THAT -- WHY DO YOU SAY WHAT MAKES IT TRUST

THEM. I DON'T TRUST THEM.

>> WHY TALK TO THEM.

>> THEY DID SOMETHING YESTERDAY IT WAS AMAZING.

THEY GAVE US A PRESENT AND IT WAS A VERY BIG PRESENT WORTH A

VERY BIG PRESENT WORTH THE TREMENDOUS AMOUNT OF MONEY AND

I'M NOT GOING TO SHOW YOU WHAT THAT PRESENT IS, BUT IT WAS A

VERY SIGNIFICANT -- PRIZE, AND THEY GAVE IT TO US AND IT MEANT

ONE THING TO ME WE'RE DEALING WITH THE RIGHT PEOPLE.

IT WAS A NUCLEAR RELATED IT WAS OIL AND GAS RELATED AND IT WAS

VERY NICE THING THEY DID. WHAT IT SHOWED ME AS WE ARE

DEALING WITH THE RIGHT PEOPLE.

THE LEADERSHIP WAS KILLED, ALL GONE, ALL GONE IS THE

EXPRESSION GOES, OF THE PAST SUPREME LEADER.

AND THEN THE NEW SUPREME LEADER WAS RACKED UP AT A MINIMUM

RACKED UP PRETTY GOOD. EVERYONE ELSE WAS GONE AND THEN

MANY OF THE PEOPLE IN THE THIRD TIER ARE GONE, BUT WE ARE

DEALING WITH A GROUP OF PEOPLE

THAT I THINK IT TURNED OUT AND THE GIFT THEY MADE TO US WAS

VERY SIGNIFICANT AND THEY SAID THEY WERE GOING TO DO IT AND IT

HAPPENED AND THEY ARE THE ONLY ONES THAT COULD HAVE DONE IT.

JENNIFER.

>> IS A RELATED TO THE STRAIT OF HORMUZ.

>> IT'S RELATED TO THE FLOW AND THE STRAIGHT.

>> DO WE KNOW IS CAN TO CONTROL THE STRAIGHT.

>> WE WILL HAVE CONTROL OF ANYTHING WE WANT.

IF WE CAN END THIS WITHOUT MORE LIVES, WITHOUT KNOCKING OUT $10

BILLION ELECTRIC PLANTS THAT ARE BRAND-NEW AND THE APPLE OF

THEIR EYE.

BUT, THEY CAN HAVE CERTAIN THINGS.

YOU KNOW THE THINGS, WE DON'T HAVE TO GO OVER THE LIST. IT

STARTS WITH THE NUCLEAR WEAPONS AND THEY'VE AGREED TO IT, THERE

WON'T BE ANY NUCLEAR WEAPONS. THEY'RE NOT CAN HAVE

ENRICHMENT, ANY OF THOSE THINGS. LOOK I HATE TO SAY THE WORD

WERE IN A GOOD BARGAINING POSITION, BUT AND I HATE TO SAY

THAT THEY ARE DEFENSELESS BECAUSE UNTIL THAT LAST MISSILE

IS FIRED, THEY HAVE A LITTLE POWER.

BUT WE ARE IN ABOUT THE BEST BARGAINING POSITION, WE ARE WAY

AHEAD OF SCHEDULE AND AGAIN THEY HAVE NO NAVY OR AIR FORCE

AND THEY HAVE NO MISSILE PROTECTION, MOST OF THEIR

MISSILES ARE GONE. MOST OF THE LAUNCHES WE'VE

KILLED. WE KILLED ABOUT 82% OF THEIR

LAUNCHERS. EVEN IF THEY HAD A MISSILE THEY

CAN LAUNCH IT. WE HAVE THE GREATEST MILITARY

IN THE WORLD, AND NOBODY EVEN COMES CLOSE. THE WORLD.

>> SAUDI ARABIA THERE'S BEEN REPORTING YOU'VE BEEN TALKING

TO THE GROUND -- THE CROWN PRINCE. HAVE YOU BEEN FOCUS ON

NORMALIZATION BETWEEN SAUDI ARABIA AND ISRAEL? PRES. TRUMP:

WHAT DO YOU HEAR WITH SAUDI ARABIA?

>> THAT YOU'VE BEEN TALKING AND HE'S BEEN ENCOURAGING YOU.

PRES. TRUMP: HE'S FIGHTING WITH US, SAUDI

ARABIA HAS BEEN EXCELLENT AND, UAE EXCELLENT.

AND I WILL TELL YOU, QATAR, INCREDIBLE.

QATAR TOOK A PRETTY BAD HIT, QATAR IS VERY CLOSE.

YOU CAN WALK RIGHT OVER THE BORDER.

THEY'VE BEEN GREAT AND VERY STRONG.

KUWAIT HAD A LITTLE MISHAP, SHOT DOWN THREE PLANES WITH OUR

MISSILES. BUT THE PILOTS MADE IT, CAN YOU

IMAGINE THE PILOTS MAKING IT, AND THEY SAID THOSE ARE

PATRIOTS, WERE NOT GOING TO ESCAPE PATRIOTS.

PRETTY AMAZING THEY GOT OUTCOME OF THE THREE PILOTS LIVED.

THEY ARE FLYING TODAY.

THE KUWAITIS MADE A MISTAKE, THEY FIRED -- THEY WERE FIRING

AT THE ENEMY, IT WAS AS THE EXPRESSION GOES FRIENDLY FIRE,

BUT THE PILOTS ARE GREAT, THEY ARE FLYING TODAY.

PRETTY AMAZING WHEN YOU THINK OF IT.

>> ON A HUMAN LEVEL HOW HOPEFUL ARE YOU THAT THIS PIECE DEAL

WILL WORK OUT WITH IRAN? PRES. TRUMP:

YOU'RE TALKING ABOUT TO END IT? WELL I THINK WE ARE GOING TO

END IT. I CAN TELL YOU FOR SURE. YOU KNOW I DON'T LIKE TO SAY

THIS, THIS WAR HAS BEEN ONE, THE ONLY ONE THE >> TO KEEP IT

GOING IS THE FAKE NEWS. THE NEW YORK TIMES READ THE NEW

YORK TIMES IT'S WE'RE NOT WINNING A WAR WHERE THEY HAVE

NO NAVY AND NO AIR FORCE OR NO NOTHING.

WE LITERALLY HAVE PLANES FLYING OVER TEHRAN AND OTHER PARTS OF

THEIR COUNTRY, THEY CANNOT DO A THING ABOUT IT.

IF I WANT TO TAKE DOWN THAT POWER PLANT, THAT A VERY BIG

POWERFUL POWER PLANT THEY CANNOT DO A THING ABOUT IT.

AND YET IF YOU READ THE NEW YORK TIMES WE WATCH ABC FAKE

NEWS OR NBC FAKE NEWS, YOU WOULD SAY IT'S A CLOSE BATTLE.

IT'S NOT A CLOSE BATTLE, THEY ARE TOTALLY DEFEATED.

WE KILLED THEIR NAVY AND WHAT WOULD YOU SAY THREE DAYS PETE?

I SAID WHY DIDN'T YOU SAVE THE SHIPS.

HE SAYS IT'S MORE FUN SHOOTING THEM DOWN.

BUT THE NAVY WAS WIPED OUT IN A VERY RAPID ORDER, A PRETTY

IMPRESSIVE FOR YOU GUYS. WHEN YOU HEAR THIS STUFF.

IF YOU READ THE NEWS, YOU EITHER DOING WONDERFULLY,

THEY'RE DOING TERRIBLY. THERE WIPED OUT MILITARILY,

THEY ARE DEAD.

>> IS THERE NO SENSE OF A TIMELINE?

DO YOU WANT TO GET SOME THING DONE BEFORE THE MIDTERMS. PRES.

TRUMP: I'D LIKE TO SEE PRESIDENT PUTIN

AND PRESIDENT ZELENSKYY SIT DOWN AND MAKE A DEAL I THINK

THEY ARE GETTING CLOSE. I'VE SETTLED EIGHT WARS, ALL OF

THEM SHOULD HAVE BEEN MORE DIFFICULT THAN THIS ONE, THE

SHOULD'VE HAVE BEEN THE EASIEST ONE.

THESE ARE PEOPLE WHO TRULY HATE EACH OTHER.

YOU'LL FIND THAT THE HATRED IS NOT GOOD FOR MAKING DEALS.

THESE ARE PEOPLE WHO THEY DON'T LIKE EACH OTHER VERY MUCH.

>> I KNOW YOU SAID THERE'S A BUNCH OF PEOPLE FROM THE

ADMINISTRATION NEGOTIATING WITH IRAN.

THERE'S BEEN REPORTS THE VICE PRESIDENT IS LEADING THOSE

NEGOTIATIONS. IS THAT TRUE? PRES. TRUMP:

HE'S INVOLVED IN THEM, JD IS INVOLVED AND MARCO IS INVOLVED

AND JARED KUSHNER IS INVOLVED, A VERY SMART GUY AND STEVE

WITKOFF, A SMART GUY. AND I’M INVOLVED.

WOW, I’M GOING TO BE SO BIG, I DON’T WANT TO TALK ABOUT IT,

THE PRESIDENT OF THE UNITED STATES, TOM, AND I’M NOT GOING

TO TALK ABOUT IT. IT’S BENEATH ME TO TALK ABOUT

SAVING MILLIONS OF LIVES. THAT’S WHAT YOU’RE TALKING

ABOUT. YOU’RE TALKING ABOUT SAVING

MILLIONS OF LIVES. IF IRAN HAD A NUCLEAR WEAPON,

HE WOULD HAVE HAVE USED IT. IF I DIDN’T END THE HORRIBLE

BARACK HUSSEIN OBAMA IRAN NUCLEAR DEAL IN MY FIRST

ADMINISTRATION, THEY WOULD HAVE HAD A NUCLEAR WEAPON THREE OR

FOUR YEARS AGO. THEY WOULD HAVE USED IT.

I WOULDN’T HAVE GOTTEN A CHANCE TO BE PRESIDENT, IT WOULD HAVE

BEEN SO DEVASTATING. IF WE DIDN’T SEND THE BEAUTIFUL

B-2 BOMBERS, THEY TOOK THEM OFF MY DESK, THEY TOOK THEM, I

DON’T KNOW WHY. BUT IF WE DIDN’T HAVE THE B-2

HIT, WE OBJECT LIT RATED, DESPITE CNN.

CNN SAID, WELL, MAYBE THE WORD OBLITERATION.

NO, NO, WE OBLITERATED IT. JUST OBLITERATED.

THEIR NUCLEAR POTENTIAL. YOU WOULD HAVE HAD THEM HAVING,

TWO WEEKS AFTER THAT ATTACK, HAD WE NOT MADE THE ATTACK,

THEY WOULD HAVE HAD A NUCLEAR WEAPON.

THEY WOULD HAVE ABSOLUTELY USED IT, USED IT ON THE MIDDLE EAST,

INCLUDING ISRAEL. YOU KNOW WHY YOU SEE THAT?

BECAUSE UNEXPECTEDLY, WHEN THIS WAR BROKE OUT, UNEXPECTEDLY

THEY STARTED SENDING MISSILES TO U.A.E., QATAR, SAUDI ARABIA,

KUWAIT, BAHRAIN, AND ELSEWHERE, AND NOBODY THOUGHT -- WERE YOU

EQUALLY SURPRISED BY THAT? PETE, DO YOU WANT TO GIVE ABOUT

A THREE-MINUTE STATEMENT ON HOW WE’RE DOING IN THIS?

AS I CALL IT MILITARY OPERATION. PEOPLE DON’T LIKE ME USING THE

WORD WAR, SO I WON’T. BUT THE DEMOCRATS GO TO WAR.

HOW ABOUT A LITTLE STATEMENT? I THINK HE’S DONE A VERY GOOD

JOB. DO WE AGREE HE’S DONE A GOOD

JOB? CAN HE WE TAKE SOME OF YOUR TIME?

>> THANK YOU, MR. PRESIDENT. YOU’RE SPOT ON.

NEVER IN HISTORY HAS A MODERN MILITARY, IRAN HAD A MODERN

MILITARY, A MODERN NAVY, A MODERN AIR FORCE, MODERN AIR

DEFENSES, LEADERSHIP, MASSIVE BUNKER, NEVER HAS A MODERN

MILITARY BEEN SO RAPIDLY AND HISTORICALLY OBLITERATED,

DEFEATED, FROM DAY ONE, WITH OVERWHELMING FIREPOWER.

THE AIR CAMPAIGN THAT WEAVE CONDUCTED, THAT ISRAEL HAS

CONDUCTED ALONGSIDE US, WAS ONE FOR THE HISTORY BOOKS, TRULY.

THAT’S BECAUSE WE HAVE A PRESIDENT OF THE UNITED STATES

THAT WHEN HE SENDS HIS WAR FIGHTERS OUT TO FIGHT, HE

UNTIES THEIR HANDS TO ACTUALLY GO OUT AND CLOSE AND DESTROY

THE ENEMY AS VICIOUSLY AS POSSIBLE FROM MOMENT ONE.

AND THAT’S WHY WE SEE OURSELVES AS PART OF THIS NEGOTIATION AS

WELL. WE NEGOTIATE WITH BOMBS. YOU HAVE A CHOICE, AS WE LOITER

OVER THE TOP OF AT THE RAIN, AS THE PRESIDENT TALKED ABOUT,

ABOUT YOUR FUTURE. PRESIDENT HAS MADE IT CLEAR YOU

WILL NOT HAVE A NUCLEAR WEAPON. THE WAR DEPARTMENT AGREES.

OUR JOB IS TO ENSURE THAT. WE’RE KEEPING OUR HAND ON THAT

THROTTLE. AS LONG AS IT’S HARD, IS

NECESSARY, TO ENSURE THE INTEREST OF THE UNITED STATES

OF AMERICA ARE ACHIEVED OWE THAT BATTLEFIELD.

THIS IS NOT IRAQ AND AFGHANISTAN.

THIS IS NOT A PRESIDENT WHO’S INTERESTED IN VAGUE STATES.

HE’S BEEN VERY CLEAR WITH US ABOUT WHAT WE NEED TO

ACCOMPLISH, CREATING THE CONDITIONS FOR THEM NEVER TO

HAVE A NUCLEAR CAPABILITY, AND THAT’S EXACTLY WHAT WE’RE DOING

IN HISTORIC FASHION. THANK YOU, MR. PRESIDENT. PRES.

TRUMP: THANK YOU, GREAT JOB. YOU KNOW, THE ONLY TWO PEOPLE

THAT WERE QUITE DISAPPOINTED, I DON’T WANT TO SAY THIS, BUT I

HAVE TO. I SAID PETE AND GENERAL RAISING

CAINE, I THINK THIS THING IS GOING TO BE SETTLED VERY SOON,

AND THEY GO, OH, THAT’S TOO BAD. PETE DIDN’T WANT IT TO BE

SETTLED. THESE GUYS ARE DOING A GREAT

JOB. THAT’S A GOOD ATTITUDE, TOM,

RIGHT? THEY WERE NOT INTERESTED IN

SETTLEMENT. THEY WERE INTERESTED IN JUST

WINNING THIS THING. YEAH, PLEASE.

>> MR. PRESIDENT, TAKING THINGS LOCALLY, DO YOU SUPPORT THE

CONSTRUCTION OF THE SECOND AVENUE SUBWAY IN NEW YORK CITY,

AND WILL YOUR ADMINISTRATION -- PRES. TRUMP:

YOU KNOW THE SECOND AVENUE SUBWAY IS BEING UNDER

CONSTRUCTION FOR, YOU’RE A YOUNG GUY, LONGER THAN YOU ARE

OLD, OK? CAROL: WHILE THE PRESIDENT IS SPEAKING

ABOUT SOMETHING NEAR AND DEAR TO WE NEW YORKERS, ANYTHING TO

DO WITH THE SUBWAY SYSTEM, THAT IS PRESIDENT TRUMP LIVE THERE

AT THE OVAL OFFICE. AND I WOULD SAY FIRST AND

FOREMOST, SOME OF WHAT HE SAID, THAT IT SOUNDS LIKE THEY’RE

GETTING CLOSE TO MAYBE A DEAL, OR AT LEAST THERE’S TALKS GOING

ON, AT LEAST THAT’S WHAT HE SAYS.

BUT I’M JUST SAYING IN TERMS OF THE MARKETS, PRETTY MUCH KIND

OF WHERE WE WERE WHEN HE STARTED TALKING. TIM:

YEAH, THE PRESIDENT SAID WE WON THIS WAR, IT’S NOT A CLOSE

BATTLE, IRAN IS DEFEATED, IRAN IS A DEAD MILITARY.

HE SAID THAT J.D. VANCE IS INVOLVED.

SECRETARY MARCO RUBIO IS INVOLVED.

HE ALSO SAID THAT HE THINKS THAT PUTIN AND ZELENSKYY ARE

GETTING CLOSE TO A DEAL. YOU MENTIONED THAT MARKETS

HAVEN’T MOVED MUCH. WE SHOULD NOTE BRENT AND W.T.I.

ARE STILL UP MORE THAN 3.4% TODAY. W.T.I. ABOVE 92.

BRENT STILL ABOVE $103 PER BARREL.

THE MARKETS SIGNAL WE’RE NOT GETTING QUOTE-UNQUOTE OIL

PRICES DROPPING LIKE A ROCK WHEN THE WAR IS OVER. CAROL:

RIGHT, AND TO BE FAIR, I DON’T KNOW IF HE SAID CLOSE TO A

DEAL, BUT HE SAID THAT THEY ARE HAVING SUCCESS IN IRAN.

WE’RE TALKING TO THE RIGHT PEOPLE IN IRAN.

THE PEOPLE WE’RE TALKING TO IN IRAN WANT TO MAKE A DEAL.

WE’LL SEE WHAT HAPPENS. I THINK TO BE FAIR, WE’VE HEARD

SOME OF THIS, I FEEL LIKE CERTAINLY OVER THE LAST 24, 48

HOURS. AT THE SAME TIME WE’VE ALSO HAD

REPORTS AND DIFFERENT REPORTING ON THE POSSIBILITY OF MORE U.S.

FORCES GOING TO IRAN, SPECIFICALLY WHETHER IT’S THE

U.S. AIRBORNE GROUPS OR WHERE IT’S

BOOTS ON THE GROUND. SO THIS IS SOMETHING WE HAVE TO

BE VERY CAREFUL ABOUT. BUT AGAIN, THAT IS THE

PRESIDENT. WE’LL CONTINUE TO MONITOR YOU

AND BRING YOU ANY MORE HEADLINES.

IN THE MEANTIME, WE’VE GOT A MARKET WHERE WE’RE DOWN ON THE

S&P, DOWN ON THE NASDAQ, AND AS YOU SAID, WE CONTINUE TO SEE

ENERGY MARKETS THAT ARE HIGHER. CERTAINLY TOP OF MIND WHEN IT

COMES TO INVESTORS. ANOTHER STORY THAT’S TOP OF

MIND IS ANYTHING AND EVERYTHING TO DO WITH PRIVATE CREDIT. TIM:

LET’S GET TO THE FATHER AND SON TEAM WHO WROTE PRIVATE CREDIT

ON THE WAY UP AND WHO RISK FALLING HARD ON THE WAY DOWN.

IT’S AN EXCLUSIVE, IT’S BLOOMBERG’S BIG TAKE TODAY.

YOU CAN READ THE STORY AND MORE FROM BLOOMBERG TERMINAL AND AT

BLOOMBERG.COM/BIGTAKE. CAROL: IT’S A GREAT STORY.

TWO REPORTERS AMONG THE TEAM REPORTING IT OUT.

ELLEN AND OLIVIA, THEY ARE BOTH NEAR STUDIO.

IT IS A GREAT STORY. AS WE CONTINUE TO KIND OF TRACK

THE CONCERNS WHEN IT COMES TO PRIVATE CREDIT.

AND I WANTED TO START WITH YOU, ELLEN.

TALK TO US ABOUT CLIFF WATER, WHO THEY ARE, WHAT’S BEEN THEIR

APPROACH, AND WHY WE’RE TALKING ABOUT THEM, WHY YOU GUYS DID A

DEEP DIVE.

>> YEAH, SO CLIFF WATER IS A SORT OF PIONEER IN PRIVATE

CREDIT. THEY STARTED OUT AS A CONSULTANT TO AL INDICATORS

LIKE PENSION FUNDS, AND THEN THEY CREATED THEIR OWN ASSET

MANAGEMENT BUSINESS, WHICH HAS GROWN EXPONENTIALLY OVER THE

LAST 10 SO YEARS. THEY PARTNER WITH OTHER DIRECT

LENDERS AND TAKE A SLICE OF EACH OF THOSE LOANS, AND THAT’S

ALLOWED THEM TO GROW VERY QUICKLY AND BECOME HYPER

DIVERSIFIED COMPARED TO OTHER PLATFORMS THAT ARE JUST SINGLE

MANAGER. TIM: IT WORKED OUT FOR A WHILE, AND

IT MADE THE FOUNDERS INCREDIBLY WEALTHY.

OLIVIA, THEN REDEMPTIONS STARTED.

WHAT CAN YOU TELL US ABOUT WHY THEY STARTED AND WHAT INVESTORS

WANTED?

>> YEAH, DEFINITELY, LIKE ELLEN IS SAKE THE CLIFF WATER MODEL

IS SORT OF A FUND THAT ALLOWS INVESTORS TO ACCESS PRIVATE

CREDIT WRIT LARGE. CAROL: SO THEY’RE NOT ACTUALLY DOING

LOANS. THEY ARE UNVESTING IN OTHER

FUNDS THAT ARE.

>> THEY’RE BUYING LOANS FROM OTHER MANAGERS.

SO IT’S LIKE A MULTILENDER MODEL.

SO WHEN STRESS STARTED TO COME TO PRIVATE CREDIT AND INVESTORS

STARTED TO WIN OUT, CLIFF WATER WAS A BIG PLACE WHERE NOW

ANYONE WORRIED ABOUT PRIVATE CREDIT THAT’S INVESTED IN THE

FUND MAYBE DECIDED TO PULL CAPITAL, AND THAT’S WHY WE SAW

RECORD REDEMPTIONS. CAROL: WE HAVE A GREAT CHART, IT’S IN

THE STORY, AND TIM AND I WERE BLOWN AWAY ABOUT SOME OF THE

GRAPHICS THAT HELPED TELL THE STORY.

BECAUSE WE TALK ABOUT THIS FUNDS APPROACH, IF YOU WILL.

IT’S A CIRCULAR CHART. BUT WHAT IT BASICALLY IS

SHOWING, AND IT’S HARD FOR THOSE FOLKS IF YOU’RE LISTENING

ON RADIO, YOU CAN’T SEE IT, BUT DIFFICULT ON TV, BUT WHAT IT’S

BASICALLY SHOWING IS THAT THEY OWNED ABOUT A THIRD OF

BEHRING’S PRIVATE CREDIT CORP AT THE END OF 2025, BUT THEY

ALSO WERE INVOLVED WITH ARES. WALK US THROUGH THE CIRCLE AND

WHAT IT TELLS US.

>> THE WAY THEY’VE BEEN ABLE TO PARTNER WITH SO MANY MANAGERS

IS BY INVESTING DIRECTLY IN THE FUNDS, AND THEN THEY SET

AUTOPSY AGREEMENT TO BE IN THE UNDERLYING LOANS AS WELL.

THEY ARE INVESTED IN I THINK MORE THAN 50 DIRECT LENDERS.

THEY’RE INVESTED IN MANY. THIS IS ONE CHUNK OF THOSE FUND

VERY MUCHS MUCH THIS IS THE NONTRADED AND THE PARTNERSHIPS

SPECIFICALLY, BUT THIS HAVE A LARGE HOLDING IN BEARINGS,

ARES, K.K.R., YOU NAME IT, ALL THE BIG NAMES, BLACKSTONE.

CAROL: KIND OF A WHO’S WHO.

>> IT IS. TIM: WE’RE GOING TO SPEAK ABOUT THIS

LATER IN OUR PROGRAM, THERE’S THIS QUESTION OF TO WHAT EXTENT

IS THE, ARE THE CHALLENGES OF CLIFFWATER OR A SINGLE FIRM

CONTAINED, VERSUS ARE THEY PART OF A BIGGER PICTURE WHEN THIS

IDEA OF SO-CALLED CONTAGION. WHAT DID YOU FIND IN YOUR

REPORTING?

>> I THINK WE’VE SEEN RECENTLY THAT FIRMS ARE EXPECTING THIS

CONCERN AMONG INVESTORS TO CONTINUE.

WE SAW SOME LENDERS THAT SIGNALLED THEY’RE GOING TO DO

THE SAME THING NEXT QUARTER. SO I THINK WE’VE DEFINITELY

SEEN ANY STRESS AT ONE FUND, EXPECTING IT TO SPILL OVER TO

THEIR FUND AS WELL. CAROL: THAT’S WHAT I WAS CURIOUS ABOUT.

WHEN THE STORIES KIND OF PITCHED AS ONE OF THE BIGGEST

QUESTION MARKS IN THE PRIVATE CREDIT INDUSTRY, IS THIS

BECAUSE THEY ARE SO VULNERABLE OR THAT THEY START TO COME

UNDONE, YOU’VE GOT TO ASSUME THAT THERE IS THAT CONTAGION OR

SYSTEMIC IMPACT?

>> I THINK PEOPLE ARE POINTING TO CLIFFWATER BECAUSE OF THE

PRIVATE CREDIT FUNDS ASPECT THAT’S VERY UNIQUE TO THEM.

AND THEN ALSO, I MEAN, THEY’RE JUST REALLY BIG. CAROL: HOW BIG?

>> $33 BILLION, WHICH IS QUITE LARGE.

I THINK THEY’RE SECOND ONLY TO B CRED.

THAT’S PRETTY LARGE IN THIS MARKET.

THEY’RE TOUCHING A LOT OF DIFFERENT DIRECT LENDERS.

THEY’RE IN A LOT OF LOANS. EVERYBODY IS WORRIED ABOUT

SOFTWARE AND A.I. DISRUPTION. THEY’RE IN A LOT OF SOFTWARE.

THERE’S A COUPLE OF REASONS PEOPLE ARE FOCUSED ON IT. TIM:

IS THAT WHY IT WORKED UNTIL IT DIDN’T? WAS IT SOFTWARE?

WHAT WAS THE STRAW THAT BROKE THE CAMEL’S BACK WITH THIS?

>> I THINK A LOT COMES DOWN TO SENTIMENT AROUND SOFTWARE,

PERSONALLY. WE SAW PEOPLE START TO GET

NERVOUS, AND WE REPORTED PREVIOUSLY THAT SOFTWARE IS THE

SINGLE LARGEST SECTOR EXPOSURE IN PRIVATE CREDIT, IT’S ABOUT

20%, WHICH IS SIZABLE. SO WE’RE STARTING TO SEE PEOPLE

GET THEIR MONEY OUT OR TRY TO, AND WE’RE STARTING TO SEE

GATING HAPPEN. SO A LOT OF THIS STEMS FROM

THAT. TIM: SOFTWARE COMPANIES TAKING A HIT

TODAY, THE LATEST EXAMPLE OF VOLATILITY IN THE SECTOR.

THE INFORMATION THAT AMAZON WEB SERVICES DEVELOPING A.I.

TOOLS DESIGNED TO AUTOMATE FUNCTIONS. CAROL:

YEAH, WE CONTINUE TO SEE THIS ON A DAILY BASIS, KIND OF

QUESTIONING SOME OF THE EXISTING MODELS OR COMPANIES

AND WHETHER OR NOT WE’RE GOING TO SEE MORE PROBLEMS GOING

FORWARD. I GUESS TIME WILL TELL. OLIVIA, I WANT TO BRING YOU

BACK IN, BECAUSE YOU GOT ANOTHER STORY THAT’S ABOUT ARES

MANAGEMENT AND APOLLO WITHDRAWALS, AS CLIENTS WANT TO

REDEEM MORE. WE REMIND EVERYBODY, PRIVATE

CREDIT, NOT SO LIQUID, FOLKS. YOU HAVE TO PARK YOUR MONEY FOR

A WHILE. THAT’S NOT, YOU KNOW, INVESTORS

ARE PUSHING BACK. SO TELL US A LITTLE BIT MORE

ABOUT THIS.

>> RIGHT, YEAH, SO I THINK THERE’S ALL THESE FEARS AROUND

PRIVATE CREDIT, AROUND SOFTWARE. BUT I THINK A BIG ISSUE FOR THE

LENDERS IS THAT THEY WENT REALLY AGGRESSIVE INTO THE

RETAIL SPACE, AND THAT HELPED GROW THEIR FIRMS A LOT, LET

THEM BRING IN A LOT OF MONEY. MAYBE THEY WEREN’T PREPARED FOR

THE RETAIL SPACE TO TURN, AND NOW WE’RE DEALING WITH THE

FIRST WAVE OF ALL OF THESE FUNDS HAVING TO CAP REDUCTIONS.

CAROL: WHO’S AT FAULT? WE’VE HAD FOLKS ON WHO SAY READ

THE FINE PRINT, AND SOMETIMES IT’S PRETTY EARLY ON. TIM:

YEAH, JAMES TALKED ABOUT THAT ALL THE TIME, YOUR COLLEAGUE.

HE SAYS THIS IS LIKE LITERALLY WHAT IT SAYS IN THE PROSPECTUS.

READ THE FINE PRINT.

>> I THINK THAT IS TRUE, BUT WE’VE SEEN SOME LENDERS DECIDE

NOT TO CAP REDEMPTIONS, AND THEY TOOK SPECIAL MEASURES, SO

IT SORT OF SET THIS NOT UNIFORM PACE WHERE SOME INVESTORS FELT

LIKE, WAIT, I THOUGHT I COULD GET ALL MY MONEY BACK. CAROL:

OK, SO WHAT ARE WE WATCHING? LET’S GO BACK TO CLIFFWATER.

WHAT DO WE NEED TO WATCH? WHAT ARE YOU GUYS WATCHING THAT

IS AN INDICATION THAT, ALL RIGHT, THIS STORM, IT’S NOT

JUST A SHORT STORM, IT’S SOMETHING MUCH BIGGER.

>> YEAH, I THINK WE’LL CONTINUE TO WATCH FOR REDEMPTIONS, IF

THEY STAY ELEVATED, WE’RE GOING TO WATCH CLIFFWATER’S LIQUIDITY

LEVELS. WE REPORTED THAT THEY’LL BE

ABLE TO MANAGE THIS LIKE MAX REDEMPTIONS FOR AT LEAST A YEAR

WITHOUT HAVING TO SELL ANY ASSETS OR SELL ANY FUND STAKES

OR ANYTHING LIKE THAT, ANY EXTREME MEASURES.

SO WE’LL BE WAITING TO SEE IF THEY CAN MAINTAIN THAT

LIQUIDITY AND MAYBE INVESTORS WILL GET MORE COMFORTABLE AGAIN

AND STOP REDEEMING. MAYBE THEY WON’T.

TIME WILL TELL. CAROL: I ALSO THINK ABOUT THE RATE

ENVIRONMENT, WHETHER WE START TO SEE RATES GO UP.

WE KNOW HIGHER RATES HAVE BEEN PROBLEMATIC FOR ALL OF THE

PRIVATE CREDIT WORLD. THANK YOU SO MUCH.

IMPORTANT STORY, AMONG THE MOST READ ON THE BLOOMBERG TERMINAL.

ELLEN AND OLIVIA, YOU CAN READ THEIR STORY AND MORE FROM THE

BLOOMBERG TAKE. IT’S AT BLOOMBERG.COM/BIGTAKE.

THAT’S GOING TO DO IT FOR US. TIM:

COMING UP NEXT, IT’S THE CLOSE.