Balance of Power: Live at Milken Day 1 (Podcast)

Summary

Podcast Summary: Balance of Power – Live at Milken Day 1
Date: May 4, 2026
Host: Bloomberg News Anchor Team (Joe Matthew, Carol Massar, Dani Berger)
Notable Guests: Ian Bremmer, Bill Ackman, John Denton, Senator Angela Brooks

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Episode Overview

This special episode of "Balance of Power" is broadcast live from Day 1 of the Milken Institute Global Conference. The show centers on the intertwining of politics, global business, and policy at a moment of acute geopolitical crisis—especially the mounting conflict around the Strait of Hormuz, U.S.-Iran tensions, and wider market instability. Featuring in-depth conversations with Eurasia Group’s Ian Bremmer, Pershing Square’s Bill Ackman, International Chamber of Commerce’s John Denton, and Senator Angela Brooks, the episode delves into the financial, political, and real-world impacts of current events.

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Geopolitical Tensions in the Middle East

Guests: Ian Bremmer (Eurasia Group), Joe Matthew, Carol Massar, Dani Berger
[00:25–14:32]

Context:

• Iranian missiles have targeted the UAE, and Iran is tightening its hold on the Strait of Hormuz, raising fears for global shipping and energy markets.
• The U.S. has announced "Operation Freedom" to stand by and potentially escort vessels through the strait.

Key Discussion Points:

• US Leverage and Limits:

  • Ian Bremmer notes President Trump does not currently have the capability to open the corridor and “move enough ships to make a difference.” [01:14]
  • The stalemate is a direct Iranian response to Trump’s humanitarian "freedom operation."

• Power Dynamics:

  • Iran may appear to have leverage via the strait, but their regime is under severe duress ("150 of their leaders have been killed...they're desperate, but their regime isn't going to change" – Ian Bremmer, [02:38]).
  • The U.S. lacks transparency into Iranian decision-making, now further hampered by the deaths of previous interlocutors. Intelligence is "a lot harder to get." [03:43]

• Potential Diplomatic Endgame:

  • Hints of optimism from weeks prior—possible deal terms on uranium enrichment—have faded ("That optimism seems to have gone away...was it ever real?" – Carol Massar, [04:39]).
  • Any real agreement would take months to implement, even after a deal. Markets have already priced in uncertainty through at least year-end. [06:01–07:07]

• Bad Assumptions and Information Flow:

  • Overconfidence in U.S. military might led to insufficient planning for the strait crisis.

    “The biggest problem that we have right now…President Trump is not getting an accurate picture of what’s happening on the ground…people around him…sugarcoat it.” — Ian Bremmer, [08:05]

  • Decision-making inside the White House is compared to poorly-run corporate governance.

• Regional & Global Shifts:

  • Recent UAE decision to leave OPEC signals deeper regional fracture.
  • Saudi Arabia is preparing for a future aligned with Pakistan and China, not simply the U.S.

• China’s Role:

  • Despite U.S. hopes, the upcoming Trump–Xi summit unlikely to produce a breakthrough ("If you're waiting for a Xi Jinping summit to be a breakthrough…they want none of that." — Ian Bremmer, [11:45])
  • China is asserting itself, retaliating for U.S. sanctions threats just ahead of the summit.

Notable Quotes:

• “Iran's capacity to cause damage and pain to the Americans is massive ... One place the Iranians have an advantage is an information advantage.” — Ian Bremmer [02:38]
• “No one would run a company that way…that's the way the United States government is presently being run in a war environment.” — Ian Bremmer [08:46]
• “It’s less stable. It certainly is more aligned with individual interests...But you lack the multilateralism. The Gulf Cooperation Council is no longer fit for purpose.” — Ian Bremmer on post-war Gulf [10:37]
• "This is not just a combat victory...It's also framed very much in oil and gas. But people are forgetting...there's a crisis...around access to fertilizer." — John Denton [29:21]

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Global Investment and Markets: Bill Ackman Interview

Guest: Bill Ackman (Pershing Square), Dani Berger
[15:00–28:29]

Topics Covered:

• Pershing Square IPO & Business Model:

  • Unique approach: prioritizing retail investors ("We give the retail investors what they ask for and we cut the institutions back." – Bill Ackman, [15:56]).
  • "Key-man risk" at Pershing: mitigated by permanent capital structures ("If something happened to me, the money stays, the assets stay, the team stays." – Ackman, [17:41]).
  • Succession planning already underway; Ackman’s focus is on "big ideas." [19:17]

• Universal Music Group Proposal:

  • Rationale for UMG bid: under-monetized assets, wrong stock exchange, need for operational "reset" and improved communication with the market.
  • Plans include moving UMG to a U.S. exchange, improving buyback, restructuring, installing a strong board ("Our transaction enables cancellation of about 17% of the outstanding shares...and a new board led by Mike Ovitz." – Ackman, [21:41]).

• European vs. U.S. Stock Exchanges:

  • Ackman argues for consolidation of European exchanges, noting higher liquidity and lower capital costs in U.S. [22:04]

• Betting Markets and Short-Termism:

  • Mixed impact: can create hedging tools and information but encourages loss and "casino-ization" of markets.

    "The negative is it's not the most productive activity...but betting markets allow people to hedge risks...and predict outcomes." — Bill Ackman, [22:57]

• NYC Policy and Tax Concerns:

  • Harsh criticism of New York Mayor Donny Mondami’s antagonistic stance towards business leaders like Ken Griffin.

    “If you drive out the Ken Griffins of the world...It's just not a very smart approach.” — Bill Ackman, [24:50]

  • Emphasis on keeping NYC competitive, advocating for efficient government, not punitive taxes.

• Broader Wealth Participation:

  • Strong support for 401(k)-style investment access for all Americans to "own a piece of capitalism."

    "If you believe that you're going to be able to retire comfortably...that makes you believe in the country. If you can't, it makes you angry." — Bill Ackman, [27:44]

Memorable Moment:

• "The firm itself is very robust ... if something happened to all of the employees because the assets are forever, the board would just hire a new team ... you’d still have a valuable business." — Bill Ackman on Pershing’s structure [19:03]

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Global Economic Uncertainty: John Denton Interview

Guest: John Denton (International Chamber of Commerce), Joe Matthew
[28:46–34:28]

Highlights:

• Milken Mood:

  • Unusual sense of urgency and uncertainty compared to previous years [29:21].
  • Asserts private capital must step up on issues ranging from supply chains to climate.

• Strait of Hormuz, Supply Shocks:

  • Conflict isn’t just about oil—looming crisis in fertilizer supplies could create a “cataclysmic” global food problem.
  • Cites Arab Spring as a precedent for food-related political instability.

• De-globalization and Fragmentation:

  • Each country is now acting in its own interest, undermining established global institutions and supply chains ("level of uncertainty is actually really compounding" – Denton, [32:03]).
  • Multilateral consensus is dead—plurilateral “coalitions of the willing” will guide global action, not alignment among major powers.

• Real Economy vs. Markets:

  • Disconnect between record markets and real economic pain; fertilizer supply chain disruptions will cause food insecurity in Africa and Latin America.

Notable Quote:

• "The idea of consensus based multilateralism is over. What you're going to see much more is coalitions of the willing plurilaterals... institutions have failed." — John Denton, [32:50]

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Policy, Economy, and Inclusion: Senator Angela Brooks Interview

Guest: Senator Angela Brooks (D-Maryland), Carol Massar, Joe Matthew
[35:44–47:55]

Focus Areas:

• Energy Prices and Inflation:

  • The war’s cost is being borne by working and middle-class Americans—affecting gas, grocery, and energy prices ("It is not theoretical. It is being borne by the people we know." – Brooks, [36:37]).

• Fed Independence and Policy:

  • Brooks stresses the need for an independent Fed, noting her skepticism of Chair Warsh’s independence ([37:21]).

• Systemic Gaps and Wealth Creation:

  • Pandemic and war have deepened economic divides. Homeownership rates falling; generational wealth out of reach for many Americans ([38:34]).
  • Brooks advocates new strategies for wealth-building, specifically home ownership and digital transformation participation.

• Public–Private Partnerships:

  • Emphasizes the necessity of collaboration between government and private sector for solutions (cancer centers, schools, local economics) ([39:59]).

• Message to Billionaires and Business Leaders:

  • Urges all stakeholders to engage in broad-based wealth creation:

    “It makes us better when we all do better. So we should be ... making a more robust effort to include people in economic opportunity.” — Brooks, [41:01]

• Regulation, Red Tape, and Balance:

  • Supports some reduction in regulatory burdens if accompanied by increased efficiency but believes abandoning energy efficiency mandates is risky ([42:19]).

• Crypto Regulation:

  • Compromise stablecoin bill crafted with Senator Tillis aims to foster innovation while imposing necessary consumer protections.
  • Bill addresses issues of stablecoin yield and ethical concerns, aiming for bipartisan passage in an election year ([43:58-46:39]).

Notable Quotes:

• “People are tired of the whole maybe we should live to get by. Maybe we can make it so you can afford your groceries. There are pathways to wealth that I am interested in…” — Brooks, [39:08]
• “If we’re talking about home ownership and ways to increase housing supply, energy efficiency is important, but we also have to do so in a way that’s reasonable, that’s not burdensome…Balance is a great word.” — Brooks, [42:19]
• “For the underbanked and the debanked, [crypto, stablecoins] is a complete game changer to allow more and more people to get into the marketplace…and make money.” — Brooks, [47:12]

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Timestamps for Key Segments

• Middle East Tensions / Ian Bremmer Analysis: [00:25–14:32]
• Investment & Markets with Bill Ackman: [15:00–28:29]
• Macro Risk & Global Economy with John Denton: [28:46–34:28]
• Policy, Wealth, Crypto, and Inclusion with Sen. Angela Brooks: [35:44–47:55]

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Memorable Moments & Soundbites

• Ian Bremmer on U.S. decision-making:

  “No one would run a company that way… that's the way the United States government is presently being run in a war environment.” [08:59]

• Bill Ackman on Pershing Square's structure:

  “It’s the only firm in the world that if something happened to all of the employees because the assets are forever, the board would just hire a new team or put the assets in an index fund and you’d still build a very valuable kind of business over time.” [19:03]

• John Denton on fertilizer crisis:

  “The inability to feed yourself, that’s what gave rise to the Arab Spring. That’s actually what causes political instability.” [29:21]

• Senator Angela Brooks on wealth creation:

  “People are tired of the whole maybe we should live to get by. … I think we ought to be talking about wealth. Wealth creation, generational wealth.” [39:08]

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Thematic Takeaways

• Stable regional alliances are eroding; new alignments are forming, particularly in the Gulf, with unknown risks for global business and investment.
• Markets are adapting: Pricing in geopolitical risk, slow diplomatic progress, and persistent supply chain shocks in commodities and food.
• Corporate and government leaders are both constrained by asymmetric information and the credibility gap—affecting their ability to plan or invest.
• Private sector investment and innovation remain paramount, but also under pressure from macroeconomic and political disorder.
• Policy solutions must be inclusive and balanced, requiring compromise and partnership between public and private actors.
• Global multilateral institutions are weakening, with "coalitions of the willing" expected to step in.

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This episode marries urgent current affairs with deep business insight, giving listeners a real-time snapshot of the tectonic shifts at the intersection of politics and markets.

Transcript

[Bloomberg Host]

Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app Listen on Demand. Wherever you get your podcasts or watch us live on YouTube.

[Joe Matthew]

Watching the markets and as we see Iranian missiles targeting the United Arab Emirates, there's some concerns about that Tehra warning that it was tightening its grip on the Strait of Hormuz. I mean, Joe, this is once again, we see this back and forth and it feels like there's no progress towards an end.

[Carol Massar]

It feels pretty hairy. And this comes with this Operation Freedom, I guess it's being called. The president announced over the weekend where we would in fact not necessarily start escorting vessels through the strait, but stand by to help them. There's a question about whether anybody's going to take that opportunity. And it's where we start our conversation with Ian Bremmer. The force behind the Eurasia Group is with us live and in person here at the Milken Conference. It's great to see you and I hope that this set of meetings is going well for you. We would just love to talk about this very delicate moment that we are in and whether the president has the ability to open this corridor in the strait. And even if he does, could we move enough ships to make a difference?

[Ian Bremmer]

As of right now, he does not. And that is a big part of the problem. This is by far the biggest challenge we've seen since the cease fire was announced by President Trump a couple of weeks ago. We now have ships that are being fired on in the strait, one doing a quick U turn right after that. No one injured to the best of our knowledge. And then we have what looks to be some interceptions. The UAE Ministry of Defense saying that they had intercepted some shots at them from Iran in the last couple of hours. That is clearly an escalation. A direct response by the Iranian government from Trump's announcement that he was going to have a humanitarian freedom operation to get some of these ships through. The Iranian perspective is we are prepared to talk about ending the blockade if you're going to let our ships through. Otherwise it's not happening. And the Iranians have the ability and the willingness to prevent Trump from making these moves. This is he's going to be pretty antagonized by this. There's no question in my mind, Ian,

[Joe Matthew]

who's got the cards? Who's got the winning hand right now? Or is there a winning hand? Because it doesn't seem like there's really any progress. I mean, Iran understands its power by controlling the Strait of Hormuz. And if it lets that go, then what?

[Ian Bremmer]

Look, I wouldn't want to be the Iranian regime right now. Very clearly, 150 of their leaders have been killed. So to say they've got the winning hand in that environment. They're desperate, but they're also. Their regime is not going to change. More of them can be killed. A lot more Iranians have been killed and displaced by the way than anyone else in this war. Lebanon's the only other country that's even close. So, you know, it's not like the Americans are facing some existential threat. But this was a war the Americans chose to fight, that President Trump chose to fight with Israel. And it turns out that Iran's capacity to cause damage and pain to the Americans is massive. Well, one place the Iranians have an advantage is an information advantage. They know what the polls are in the United States. They know what people inside the Trump administration are saying, and that they're not completely aligned on this. They know the Republicans don't like the war. The US has none of that transparency on what is being said at the top of the IRGC inside Iran, and that is a disadvantage for the United States.

[Joe Matthew]

Well, where's our intelligence on that?

[Ian Bremmer]

Well, there is intelligence, but again, you've killed most of the people you were talking to, Right. And the foreign minister, who is engaged and still engaged every day by text with Steven Wycoff, they're still talking. And the sides aren't all that far apart on the nuclear issue. But he's not the guy calling the shots inside Tehran. The people calling the shots are not on television. They're not engaged publicly because they don't want to get killed. So, I mean, it is just a lot harder to get intelligence on what the Iranians are doing and what the Iranians are thinking. And I'll tell you, as many times as I've seen President Trump say, they better watch out or no more Mr. Nice Guy. Like when, when, when the supreme leaders like kid and father and mother have already been assassinated in this war, no more Mr. Nice Guy doesn't hold a lot of credibility. Right. Most Iranians that we've spoken to in Tehran.

[Joe Matthew]

That's nice. What's bad?

[Ian Bremmer]

They think that the war is going to restart imminently. They believe.

[Carol Massar]

There was a moment a couple of weeks ago, and you remember this, the markets were lit up with optimism because there was a thought that if we're arguing about duration, right. On stopping Enrichment, then we've obviously made progress, that we could somehow get to a. Yes, that the fact that we were just talking about, is it five years, is it 20 years, is it indefinite? That optimism seems to have gone away. Yeah. Was it ever real to begin with?

[Ian Bremmer]

It was real. It was real in the sense that there was a, there was serious engagement on what not only the duration of enrichment being stopped would be, but also the removal of the uranium stockpile.

[Carol Massar]

At one point, the President said there was a deal to hand it over.

[Ian Bremmer]

Yeah, yeah, but, but, and to be fair, also the Americans had given up on the ballistic missile, said that was a regional issue. So that's. If you're not going to have to resolve it, it makes it easier not even talking about Iranian support for proxies. So there you've got a deal. But in order to get to that deal, you have to open the strait. And the Iranians, if they're not going to toll anymore, they have to get something. So what are they getting? How are you paying them off? And there we did not see a deal. So ultimately, the Iranians have very little reason to open the strait, which is their one point, their singular point of global leverage, not just versus the US Unless they're going to see something that is better for them than the position they're presently in, they don't have that.

[Joe Matthew]

All right, so we've been going back and forth. Obviously, the White House thought this was going to be just like Venezuela. It obviously is not. So do you see an end game, an outcome anytime soon? Because at this point, markets, when you look at oil prices and other factors, they are pricing this out through the end of the year. They've already decided this is nothing that's going to end soon. It hasn't ended soon already. So do you see, Ian, at ultimately some kind of endgame here?

[Ian Bremmer]

The thing that worries me, the reason I don't, I don't have an immediate yes for, for you, is that, number one, Trump seems to believe that he's already going to lose midterms. He seems, he's Calvary counseling patients. He's saying, I'm surprised that oil prices are below 100. You know, I think that they could be a lot higher. So he's willing to go longer and take that pain. Secondly, the Iranians themselves do seem like they are prepared to continue to hunker down, and they're capable of continuing to hunker down. So it is hard for me, even if you were to get to a deal, implementing that deal. So with the international Arms inspector, the atomic inspectors. No one's engaged with them so far. You'd need them on the ground.

[Joe Matthew]

Right.

[Ian Bremmer]

That would take time. Staging that with the money that the Iranians would have to get. That's a matter at best of another month or two after a deal is in place. So even if you came to yes, and we're not close to yes right now, it would still not be, oh, everything's going through the strait.

[Carol Massar]

Think it was. Darren woods last week said it would be at least two months from the strait being opened. Also that it would take that long for the energy market to rationalize itself and get the flow longer.

[Joe Matthew]

If you look at Qatar, we're talking like three to five years.

[Dani Berger]

Yeah.

[Carol Massar]

So go back to the first Pentagon briefing. Pete Hegseth, Dan Cain. It's the new duo. It's turned into a roadshow. The first questions were, was there a plan for the strait? And he mocked the reporters for asking that. He said, of course. Course, we had a plan. What was it?

[Ian Bremmer]

I think that when you believe that this is going to go over because you're killing the leadership, and so, of course, they see that overwhelming US Military capacity that they're going to then want to deal.

[Carol Massar]

Big assumption.

[Ian Bremmer]

You don't. It's a big assumption. You don't need that plan. The biggest problem that we have right now as Americans is that President Trump, in my view, is not getting an accurate picture of what's happening on the ground. And the reason for that is, is because people around him, and not just his domestic advisors, but international leaders, too, when they actually talk with him, they sugarcoat it. When they actually talk to him, they're like, sir, you're doing so well. And, you know, there's so much of this is going well. And maybe this is one little thing that if you could just do a little bit different. And they do that in part because he won't tolerate criticism, but also because they want to continue to have access. And they know that if they really say in an unvoiled way, let's be real, and they want access because other people around them are competing to be the one in front. So if they're the one that's giving Trump the message, he's in line, they're not going to be there. No one would run a company that way. I mean, you would downgrade that company if you want Bloomberg. That's the way the United States government is presently being run in a war environment. And I just think that's horrible.

[Joe Matthew]

I think about your concept, your book t0. Right. This world, everybody is kind of out for their own. And we see it when it comes to raw materials, rare earths, commodities, all of a sudden in the markets, we're not talking as much about high tech, we're talking about raw materials, gold, steel. I mean, the world has changed. So does that make that even difficult, even more difficult to get some kind of resolution? And is this just our world, Ian, going forward?

[Ian Bremmer]

It makes it more difficult in the region because the most consequential geopolitical impact that has come from this war is that the Emiratis and the Saudis are in much more open hostility. Right? I mean, that's why the UAE decided to leave OPEC in the middle of wartime. It's not like the strait is suddenly open because they did that.

[Joe Matthew]

That was a headline that crossed. And it was like, wait, what?

[Ian Bremmer]

It's wildly consequential because long term the UAE is aligned with and supported by Israel and they do not want, cannot tolerate this Islamic Republic in Iran with this level of military capabilities. And they will continue to mow the grass, as the Israelis call it, with Israel going forward, if those capabilities exist. The Saudis are not a globe. These are the regional anchor that's focused on long term, big Chinese, cheap oil production at scale. They've got a much bigger market themselves. They're going to be the regional anchor. They're going to work with Pakistan, which provides nuclear umbrella for Saudi Arabia. They're going to do a deal with the Iranians that Pakistan and China will facilitate. They will find a way to engage. So the day after this war is over, it is a different Middle east, it is a different Gulf, and the

[Joe Matthew]

G0 or worse, is it more stable?

[Ian Bremmer]

It's less stable. It's less stable. It certainly is more aligned with the individual interests of those countries. But you lack the multilateralism. The Gulf Cooperation Council is no longer fit for purpose. It could easily fall apart. And that, you know, historically, again, people, people that are looking, watching the show right now, historically, they would go to, they would invest in the Gulf and it wouldn't matter so much if they had their headquarters in Abu Dhabi or Saudi Arabia. That thing that will be massively consequential going forward. There will not be a singular Gulf strategy. You will need to understand how you are engaged with these different leaders, both very strong leaders and by the way, both generational leaders. So it's not like they're going away anytime soon. This is a very big deal.

[Carol Massar]

You mentioned China and the role that China is about to play. Could be significant. President Trump seems to think that there's, I won't call it a long game, but maybe a break glass situation with President Xi. If this is not solved by then, he goes to the meeting with Xi Jinping and they work this out together. Is, is he the linchpin to getting to Iran and getting this straight?

[Joe Matthew]

Just pandas. It's got to be good.

[Ian Bremmer]

It's good to have pandas. I like pandas. And also the fact is that this summit is going forward even with the strait still closed. And at the same time, the US has put in principle sanctions against Chinese teapot refineries that are not linked into the broader financial system. And the Chinese in return have said, okay, if you actually do that, these companies will have the right to go after any American company doing business in China to receive the money that they've lost. Now, the fact that China is willing to hit back like that right before a summit with Trump shows that not only are they confident, they know that the Americans are not going to take moves against them. They know that they're not really under pressure to resolve anything. So I think the meeting will go well. I think they will show respect for each other. I think, you know, Xi Jinping will try to see if he can get Trump to say something useful on opposing Taiwan independence, which she wants. And no one around Trump wants to see. But one on one, Trump might say that. But this is, this is not going to be. If you're, if you're waiting for a Xi Jinping summit to be a breakthrough on the street of Hormuz. Yeah, they want none of that.

[Carol Massar]

Is the President not thinking that the way he's been talking recently makes you wonder.

[Ian Bremmer]

The way he's been talking recently makes you wonder about many things. No, I mean, pick the tweet and tell me which bit you want to focus on and then we'll wonder if I believe we have that much time. No, but that, the point is, he's frustrated, he's angry, he wants an off ramp. He'd like to blame someone. It is his fault and he can't do anything about it. That's an unusual situation for him.

[Joe Matthew]

Ian, I've got to ask you, I was talking with an Iranian yesterday who's been in this country for a long time, but he said Iran really wants to be actually friends with the United States rather than China. And I think about that China, Iran, Russia alliance. That's an interesting one. Do you feel that that's possible?

[Ian Bremmer]

The Islamic Republic? No, of course not. Look, I think I was listening to NPR briefly this morning. And it bothered me that after five minutes of this interview, which was wildly disconnected from what was happening on the ground, people that would listen to this person who used to be in the US Administration in the Treasury Department, I don't know the name, and now is in some think tank in Washington, but was not introduced as an Iranian American who just desperately wants the regime to collapse and will say anything in service of that. Now, that is a legitimate perspective for a person to have, but the people listening don't necessarily know that that is the perspective of that person. And look, I would love to see the regime collapse. It's a brutal, horrible regime. It's killed lots of its own people. But what I want is not analysis, right? What I want is not what's going to happen.

[Joe Matthew]

All I know is, man, just when I think it could get easier, it's not. It just gets more complicated. You create some sanity for us. Thank you.

[Senator Angela Brooks]

Thank you.

[Carol Massar]

Stay with us on Balance of Power. We'll have much more coming up after this.

[Bloomberg Host]

You're listening to the Bloomberg Balance of Power podcast. Catch us live weekdays at noon and 5pm Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa play Bloomberg 11:30.

[Dani Berger]

Welcome to Bloomberg's coverage of the Global Milking Conference. I'm Dani Berger alongside Bill Ackman, the founder and CEO of Pershing Square. Bill, thank you so much for sitting down. Of course, you got to be the most busy man on Wall street right now. It's just compiling a list of what you're currently working on. You have two publicly traded equity funds now, a publicly traded asset manager, a publicly traded real estate company that you're working into transforming a mini Berkshire Hathaway, and you're running a campaign with Universal Music Group. Where, where is your attention most focused on right now?

[Bill Ackman]

On investing. They're all related, they're all correlated, are all part of one very small portfolio, which is why it's possible.

[Dani Berger]

It is possible. And I know you run with a slim team there, so it's always impressive. And you got this IPO out last week and we talked about it, but we talked before it started to trade. I know you don't concern yourself with the day's worth of trader or a few days, but what do you make of the reception that it got that it did fall considerably? Is this an issue with bankers mispricing it?

[Bill Ackman]

No. I mean, we sold a pile of cash. I don't know why anyone would buy a pile of cash and then the next day sell it at a discount. But I think I didn't appreciate when we last spoke is we did something different in this offering that people don't normally do. Normally retail investors get kind of a very small allocation and they're disappointed by the shares they get in an ipo. In our case, we give the retail investors what they ask for and we cut the institutions back. And I think the impact of that was retail investors woke up with more shares than they had intended to buy and were put in kind of a forced selling position. And that has to work its way through. I think once that's done, I mean now again the package of securities is modestly down from where we, we price the offering. Remember, you get an interest in a tsus, which is then either you think of it as investment holding company, you can think of it as a closed end fund. There you're getting $49 in cash that we're in the process of deploying in the market and you get an interest in our business, which is a very good business. It's a bit like a Blackstone or a kkr. But some important differences. Substantially all of our assets are in these sort of permanent capital vehicles. And so the business model itself is like owning a royalty on compounding and as we. So that's why I like to do is focus on generating returns. I generate returns that generates an increase in our assets, that generates more cash flow for the business. And it's a bit of a self fulfilling prophecy as long as we do a good job allocating the money.

[Dani Berger]

One of the things that's different, and I kind of hinted this at the beginning from you, from the other big publicly traded asset managers, risk is just how slim you are. And this was brought up actually in one analysis of Pershing Square.

[Bill Ackman]

I like being slim.

[Dani Berger]

I think we all do, I think especially in this day and age. But this idea that there is key man risk, because so much of it is your ideas and your ability to. So yeah, so talk about that. How do you mitigate it?

[Bill Ackman]

I actually think we have the least key man risk of any hedge fund in the world. And that sounds surprising because usually you put me on, I do more TV appearances and other Pershing Square employees. But what causes a hedge fund to go out of business is something happens to a key person and then investors, the first thing they do is they ask for their money back and then the assets shrink and the rest of the team leaves. In our case, the assets are in these public corporations where the money can't leave. And so if something happened to me, the money stays, that the assets stay, the team stays. The team owns, you know, 45% of the business. Right. So the, the company equities widely spread throughout the the firm. And it's unusually about our firm in an industry with a lot of turnover, there hasn't been a Pershing Square. So my CIO Ryan Israel and I, we've worked together now 17 years. He's been CIO for almost four. You know, if I disappear tomorrow, nothing would really change. In the early days of Pershing Square, I generated most of the ideas and I work with analysts on, on analyzing those ideas. Today I'm generating a minority of the ideas. So I'm not saying I'm unimportant. Hopefully I can still, you know, generate value for the firm. But the firm itself is very robust. You know, it's the only firm in the world that if something happened to all of the employees because the assets are forever, the board would just hire a new team or put the assets in an index fund and you'd still build a very valuable kind of business over time. So it's one of the most robust businesses in the world and it's one of the highest quality businesses in the

[Dani Berger]

world, by the way. Just, just kind of on. On a similar note, as, as you know, a Warren Buffett fan. This past weekend was the first Berkshire Hathaway annual meeting where Abel was at the helm. You're obviously a young man, but have you thought at all about setting up succession, what that eventually looks like at Pershing?

[Bill Ackman]

Well, I think it's really effectively set up, you know, identified as CIO Ryan, as I mentioned, he's really leading the investment team at this point. Ben Hakim President Firm he kind of runs everything other than the investment side of the operations. Amazing. There's anything for me to do. I have the privilege of thinking about big ideas and, you know, occasionally big idea drive some value.

[Dani Berger]

Can we talk about one of those big ideas?

[Bill Ackman]

Sure.

[Dani Berger]

In Universal Music Group.

[Bill Ackman]

Yeah.

[Dani Berger]

You come forward with an offer to buy this company and a lot of people scratch their heads. Why would you do this with a company that has very large majority shareholders where it's tough to put through? What is the game plan?

[Bill Ackman]

Actually, the, the gameplay there is absolutely. We need the support of Bolary Group, but what we're proposing, I think is very much aligned with what they're interested in. I mean, Universal sort of a interesting case of a company that's done well in its core business, right. Universal remains the dominant company in the recorded music industry. They remain a very close to being the number one company. The music publishing industry has done a very good job with that. But they've not sort of graduated from being operating like a private company into being a public company. And they've lost, I would say the confidence of kind of the shareholders in the analyst community, which is why the stock, you know, the business value has grown and the multiple that people assign to the earnings of the company has declined. And the result is a stock that trades at the same price it traded. You know, the company first day of trading was €25. And this is in September of 21. Here we are almost five years later, the stock is €19, €18. So that's not a good performance. The company really needs a reset. It's also listed really in the wrong exchange. It's a really a US company. So our transaction moves the company from Amsterdam to a US listing. That alone is meaningfully value creating. We kind of recast the balance sheet. The company has unmonetized assets on the balance sheet. Their stake in Spotify. Now notably the company announced in the last couple of days that they're going to sell half their interest in Spotify. I think they should sell the balance. The company announced a more aggressive buyback program. We think there's an opportunity to do more. But our transaction effectively enables a cancellation of about 17% of the outstanding shares. A migration of the company here, a new board of directors led by Mike Ovitz. You know Mike, I've known a very long time. I think it can be a very value added value operate to the operations of the company and then just a better program in terms of how the company communicates with shareholders. You know, the company right now is sort of analyzing the proposal. We'll hear back from them soon. We're, we've been engaged with the obviously big shareholders.

[Dani Berger]

And you're hopeful that they will be receptive to this.

[Bill Ackman]

I mean the company has to do something. This is a very good solution to the various issues that confront the company.

[Dani Berger]

By the way, on this idea of European versus US exchanges. It feels like that is something that a lot of companies see that they can unlock that they move to a US exchange. On the day we talk, for example, I, the AstraZeneca CFO and they did something similar. Does Europe have a real problem, Bill?

[Bill Ackman]

I mean, yes, look, the exchanges are natural monopolies. And you know, if you today, if you're not listed in a market which has the most demand your stock, your cost of capital is going to be higher than it should be. And so there's sort of, and I think, you know, Europe has too many exchanges. What if I were in charge of Europe, I would consolidate the London Stock Exchange, Euronext, kind of bring the various exchanges because again it's a natural monopoly and you want the maximum liquidity and demand in one, in one place. But there's sort of nationalism I think prevents that.

[Dani Berger]

One of the kind of newer features of markets is the prevalence and the extension explosion of betting markets. And there's this real criticism that we're seeing almost a casino vacation of the world where you can bet on anything. There are ETFs listing this week where you can bet on whether the Dems or the Republicans are going to be winning the House or the Senate. Is it a problem? Does this concern you at all, this trend?

[Bill Ackman]

I think the negative is that there's a positive negative. I think the negative is it's not the most productive activity in the world. And there is a lot of gambling that goes on, whether it's sports betting or otherwise. And there are people, and particularly young people, you know, losing money they can't afford to lose betting on the outcome of things that are difficult to predict. So that's the obviously the unfortunate bit like lottery tickets, you know, it's not, it's a net loss I think for society. On the positive side, what betting markets allow is they allow people to hedge risks that they're exposed to it also it creates information, you know, you know, looking at where things are priced. You know, the betting markets have done a better job of predicting outcomes of

[Dani Berger]

elections, some could say because maybe not elections but there's more insider trading that incentives exist for that to happen.

[Bill Ackman]

Look, the people make arguments that the insider trading should not be illegal because that would bring sort of more transparency.

[Dani Berger]

One of those people that believe that

[Bill Ackman]

I'm not but, but you can make some arguments for it. So I think it's, it's sort of interesting but you know, the more the market becomes casino like I think the risk, the risk is, I guess people get, they withdraw capital because they lose confidence. And you know, I think markets being more and more short term and if you think about what a stock market is, it's these are very long term assets. So the short termism drives liquidity which I think on the margin is a positive. But it also can lead to short termism in the way businesses are running.

[Dani Berger]

Well, I would love to just leave on the, on the Note of of your hometown city, New York. There's been a lot of discussion about Mayor Imam Donny making very public pronouncements against specific people against Ken Griffin announcing a pied a terror tax, directly attacking some of the business leaders of the city. I know you were concerned heading into this election and the outcome of it too. How are you feeling now?

[Bill Ackman]

Not great. About. I mean I think Mondami is not. If your goal is to make New York City kind of financially solvent, what you don't want to do is drive out the Ken Griffin's of the world. Right. Ken brings very valuable business that has a $6 billion project which will generate thousands of construction jobs, architecture jobs, marketing jobs. Make your list employees who will pay material amounts of taxes because they're highly compensated employees. And it's that it's sort of the, the Wall street and, and the tax revenues from Wall street are what enable New York City kind of the. All the people in New York City to have a better life. And if you drive out the Ken Griffin's the world who notably, you know, has made a major contribution to New York not just from bringing his business there, but he's been very philanthropic. $400 million donation to Morris Loan Kettering, which is an institution that doesn't just help New Yorkers, it helps people with cancer all over the world to go to go to get treated there. So it's just not a very smart approach.

[Dani Berger]

I can't think about Pershing Square without thinking about New York City. But could you ever see yourself being driven out of New York?

[Bill Ackman]

I think it's unlikely. I'm more of the Ghana guy to fight to make sure New York City is a great city than someone who's going to leave.

[Dani Berger]

The problem is though that with these policies, even if they have dire economic consequences, Mandani is incredibly popular and he's still very popular with his base. So how do things change then? How do you fight this tide if there still is this broad based popular support for these types of ideas?

[Bill Ackman]

It's an issue. I mean, I think the answer is a better candidate who, you know, look where Mandami was correct is that New York is not a very affordable place to live. But you're not going to make it more affordable by getting rid of the biggest drivers of tax revenues for the city. Mondami already has a budget crisis, but we've got to figure out how to run New York City much more efficiently. But when you raise taxes, you know, the most mobile people frankly are the Ken Griffiths of the World can. Can choose to locate his business wherever he wants and he can locate his jet of terror wherever he wants.

[Dani Berger]

Very true, though. We are heading into midterms and again, affordability is on the ticket and that's pushed a lot of people left. Are you worried about how this shakes out, that we might get more candidates who want to put forward these types of ideas into economic policy?

[Bill Ackman]

Yeah, look, I think you look at a country like Argentina and how far it fell. One of the most Argentinian GDP, whatever 100 years ago was one of the most significant countries in the world and fell off the map because of socialism and other bad policies. Now you see Milei coming back and the country dramatically recovering. It's sort of a great example. And it's crazy to me that socialist ideas can travel into a country like this one.

[Dani Berger]

I have only about 30 seconds, but I'd be remiss if I didn't ask about some of the work that you've been doing trying to make 401ks, those types of investment vehicles, more broadly accessible. We had an executive action last week. What are you pushing for at this moment?

[Bill Ackman]

I think every American has to own a piece of capitalism. And when you do, you're excited when the stock market goes up and it allows you power of compounding allows you to save for your retirement. You know, unfortunately, wages cannot compound as fast as the stock market. And so I think it's very important for every American to participate in capitalism or we'll end up in socialism. And that's so I think the President's plan is a great one. You know, you have to be able to, you know, I think if you believe that you're going to be able to retire comfortably, maybe even leave something for your kids so they get a head start. You know, that makes you believe in the country and if you can't, it makes you angry. I think a very important program.

[Bloomberg Host]

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[Joe Matthew]

Markets, economy and certainly all different kinds of worlds. And the business leaders are certainly watching right now what's going on in the Middle east. The tensions, the uncertainty. It makes it tough to kind of figure out strategy.

[Carol Massar]

You make a great point, though. It's a moment that is made for Bloomberg when we consider what we talk about and cover every day. It's all together in one here and it's a Great opportunity to bring John Denton back into the conversation. The International Chamber of Commerce Secretary General is with us now live in Los Angeles. Great to have you back on Bloomberg tv. Great to be here. What do you make of this different flavor at Milken this year? There's a urgency, there's an uncertainty that you might not normally find at this conference.

[John Denton]

Well, yeah, I've been honored to speak at Milken 4, and there's definitely a different tone and a level of urgency. And actually, I must say, as you said, Milken is actually a very important conference now on a global basis. The reason I come here, I don't go to Davos. I actually come here now because, because you think about some of the biggest challenges we're about talking, confronting are going to require the private sector to really stop step up. And what we see here is probably the biggest gathering of private capital, which will actually be incredibly important if we're ever going to align to fix some of the problems we've got just at a global macro sense. You said geopolitics. It's really a geoeconomic environment we're in now where the economics become so much more important. I mean, I'm working on the Strait of Hormuz at the moment because one of the issues there, and I think people are starting to realize that the Strait of the Moors is actually not just a combat victory combatants between the US And Iran. It's also framed very much in oil and gas. But people are forgetting or not seeing it, which is one of the most important elements is a crisis which is emerging around access to fertilizer. Now we're in 170 countries, I think, as we've discussed before, and we see very quickly in the real economy the impact of an access issue. So we've got not just a pricing issue, so a pricing cost issue. We've also got a challenge to actually get get access to the product itself. So you've got the combination of a price shock and a supply shock, which is about to create a huge cataclysmic problem in the real economy, but in particular on food. And we saw this with the Black Sea because we with so we developed the Black Sea agreement for the UN Secretary General and we see similarities there because food pricing, the access to food, the inability to feed yourself, that's what gave rise to the Arab Spring. That's actually what causes political instability. So as you say, this is, this is not just an important conference, is a series of important conversations, but there's an urgency about kind of getting some of these Issues better understood. And the private sector understands these issues sometimes a lot better than the policymakers themselves.

[Joe Matthew]

John, I feel like there's something going on. You talk about this moment in time for Milken, but go back to the Russian invasion into Ukraine and the breadbasket to the world and we saw grain prices certainly impacted. Go back to Covid and you know, we didn't have masks, we didn't have a lot of supplies, things that Americans took for granted. We're all looking at our supply chains and it does feel like there's each country on a grab to make sure that they have what they need. That's got to create just a different market environment, a different economic environment going, going forward. And we talk about inflation, prices, things are going to be more expensive going forward.

[John Denton]

Well, I mean what you articulated can be wrapped up in one concept. It's the level of uncertainty which is actually really compounding. I think we talked about this before, the uncertainty that business finds and not just in the U.S. but on a global basis. I said we're everywhere. We're seeing a level of, of inhibition towards engaging in commerce across borders because people just don't know what the rules are. There's no policy settings. And then you've got the complication, I think, of the geopolitical side feeding into the geo economic side where, you know, the disputes, where's the multilateral system, where are the institutions that are actually supposed to be able to be used here in these environments? So it's not clear to people. We actually did an economic where are they?

[Joe Matthew]

Where are they? Why aren't they working? Why isn't there that response?

[John Denton]

Well, in the end, one of the challenges for the institution is actually the willingness their members to member states to do something. I was just in Yaounde at the WTO ministerial meeting and if there's one takeaway from that is that the idea of consensus based multilateralism is over. What you're going to see much more is coalitions of the willing plurilaterals, these sorts of issues, because you do not have alignment between a lot of the major players. And that is a problem. And that actually makes it very difficult for the institutions to function. The institutions have got a lot to answer for anyway because in many respects they failed. I use this term to allow the spirit of modernity to flow through them, to actually move forward. And it's actually this stuck.

[Joe Matthew]

We see that in the U.S. right? We talk about this K shaped economy and we have guests who come on and say, well, look at the market, it's record after record. Well, there's a half of Americans who

[Ian Bremmer]

are not necessarily feeling that detachment between

[John Denton]

the market and the real economy. And what I was describing, consequences, the straight room, was these are real economy issues. These are not market issues. So ultimately, we need to work out a way to get the fertiliser flowing again. We've already lost capacity. And that capacity is meaning that farmers in Africa and Latin America, because they couldn't get access to fertiliser or the price of it was too high, what are they doing? They're actually replanting without fertiliser or not planting, which means yields are going to suffer quite dramatically. And we see that coming in three months. And it's unusual because in a way we see it coming, but it's shrouded by the oil and gas story and shrouded by the battle between the combatants.

[Joe Matthew]

This is not fair. I don't want to John Denton, you rock.

[Carol Massar]

Stay with us on Balance of Power. We'll have much more coming up after this.

[Bloomberg Host]

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[Joe Matthew]

All right, everybody. Yes, indeed. We are live here in Beverly Hills at the Milken Institute Global Conference. Carol Massar along with Joe Matthew. We've got a great guest coming up. I want to set the scene here because we do have President Trump out there out on social and he says Iran has taken some shots at unrelated nations with respect to respect to the ship movement, Project Freedom, including a South Korean cargo ship. He says perhaps it's time for South Korea to come and join the mission. We've shot down several small boats, or as they like to call them, fast boats. It's all they have left other than that South Korean ship. There has been at this moment, no damage going through the strait. He also mentions that the defense secretary, Pete Hegseth, and of course, the Joint Chiefs of Staff, Dan Kaine, they're going to be holding a press conference tomorrow. I mean, this has become, I hate to say the norm, but this conflict, again, we can't seem to kind of find our way out of it. And again, we'll get an update on where we are.

[Carol Massar]

Yeah. And this, of course, follows a weekend in which the president announced this new Operation Freedom. So with naval vessels standing by to help commercial vessels get through the strait, not Iranian vessels. And it's curious still to see what happens. And that might be the point of this Pentagon briefing tomorrow. See how many actually take us up on this offer. And the President still looking to build a coalition of the willing. It's a good place to start our conversation with the Senator among the many attendees at Milken. Senator Angela also Brooks, the Democrat from Maryland, is with us here and it's wonderful to have you back.

[Senator Angela Brooks]

Thank you.

[Carol Massar]

Bloomberg TV and radio. It brings us, of course, to energy prices first and foremost. We're ever closer to four and a half dollars a gallon on a national level. You might have noticed sixes and sevens on the signs going by here in California's got its own story. In Maryland, it's slightly different. I'm wondering what it means for people living in your state and what they're not spending on as a result.

[Senator Angela Brooks]

Well, you know what, it's not just people in my state. What we recognize is we are headlong in a war. I mean, I think what you just read demonstrates that we have no idea how to get out of the war. Furthermore, the cost of the war is being borne by everyday, hardworking people. These gas prices, you think about energy costs, the cost of groceries, all of these various costs are being borne by working class people who don't have the option of not paying it. So, you know, it's a really distressing time for us. I think it's going to be really important for us to get out of this war soon. But the cost and the affordability crisis that we're seeing is real life. It is not theoretical. It is being borne by the people we know. I see it in the grocery stores. We see it all over and it really.

[Carol Massar]

Well, how about for policymakers? You're on the Banking Committee. What's Kevin Wash going to do? Does he still cut interest rates when he comes in?

[Senator Angela Brooks]

Well, we'll see. I mean, part of the issue is that, you know, I did not vote to support Warsh and it's because, you know, I couldn't be, I couldn't be sure he would be independent. I think the independence of the Fed we know is very important. We know the two jobs there are to, to make sure that we are keeping down inflation and also protecting and growing employment. And to do that means we have to have a Fed that is independent. And he dodged questions that I would ask of him. And I think an independent Fed is going to be really, really important right now when people's lives and livelihood are literally on the line in a way that we've never seen before. You know, I'm the daughter of a receptionist and a car salesman. So I understand how challenging these times are for real people. And the people who make these decisions, they don't care about the cap, the cost of gas. They're driven around. You know, it's my colleagues and others, if we're honest about it, the people who are making these decisions are wealthy people. But the people who bear the cost of all of these decisions are everyday, hardworking, middle class people.

[Joe Matthew]

Senator, we talk a lot about the K shaped economy. We talk a lot about the gaps that we have in society. Do you blame President Trump for getting in the way of access to capital or affordability issues or is the system really the problem? Because I think it's safe to say under multiple administrations we have these gaps.

[Senator Angela Brooks]

Yeah, you know what, Fair enough. I think that obviously it's been exacerbated. I think that's it. By any objective measure, our country now, I think the sentiment inside our country, if you look at polling and other numbers, people, Americans just feel like they are further and further behind. I think objectively feel. Or are they further and further? They both feel like they're behind and they objectively are. You think about every measurement we can think of. Home ownership, for example. You know, my parents, when they married at 21 and 22, they could buy a home within five years of their marriage. The average age of a first time homebuyer in our country now is closer to 40 years old.

[John Denton]

Old.

[Senator Angela Brooks]

You know, add to that again what you're talking about, the cost of just everyday living. I think that this systemic. The reason I'm here at Milken is because I believe that there's a way for us to focus on creating wealth for people. People are tired of the whole maybe we should live to get by. Maybe we can make it so you can afford your groceries. There are pathways to wealth that I am interested in making sure that as we see this whole kind of digital revolution that's happening, I think we ought to be talking about wealth. Wealth, not just getting by wealth creation, generational wealth. And those things happen, of course, again through homeownership and taking advantage of the whole digital revolution we're seeing.

[Carol Massar]

You're coming at this from a governmental approach as a senator, but you came out here to Milken to talk to private enterprise as well. How does that factor into the solution? How do you get these people roaming the halls at Milken to help you achieve those goals?

[Senator Angela Brooks]

Well, we recognize it's going to have to be a partnership between the federal government and the private sector to address so many of the longstanding. To your point, these are long standing issues, systemic issues. I know it because I came to the Senate as an executive. As a matter of fact, I'm the only part of my Democratic class who didn't come from the House. I came there as an executive. I was county executive of my county where I had to rely on sometimes public private partnerships. We did so to build cancer centers, to build schools, and to really get our economy going. And I think that same approach is

[Joe Matthew]

going to be really important that you said that. I think the local level is something that gets so missed in reporting. I think we try to do it really deeply here at Bloomberg. But what's happening on the ground. Having said that, you are here at Milken. The financial presence, as you know, is a big one. Here it is, you know, trillions of dollars that are being managed globally. What do you want to say to especially a lot of billionaires who are pushing back, whether it's New York City or San Francisco, in cities that are fighting taxes and so on. I mean, what do you say to them?

[Senator Angela Brooks]

Well, you know, who do you want

[Joe Matthew]

to have a conversation with?

[Senator Angela Brooks]

Well, I think we should have a conversation with both. I mean, you're right. The billionaires are here, the government officials are here. The truth of the matter is that we should all be focused on making sure that we are creating additional pathways for more and more people to participate in the system. It makes us better when we all do better. We all do better, so we creating these pathways. And you know what? I'm here because I want to hear from all sides, you know, tell us how we can do it better. If you have some ideas about the ways that we can do things more cheaply, more effectively, how we can cut red tape, whatever we can do to make sure we're making a more robust kind of effort to include people in economic opportunity. I'm also here to listen. I have some ideas of my own. But you know what, to be effective, it means we're going to have to kind of listen to each other. And you know, and I'm here to implement those ideas in the Senate spoke

[Carol Massar]

earlier today with the Secretary of Housing and Urban Development, who's at Milken as well. The administration is on the ground here as we've been discussing. And he talked about the cost savings that came with his decision, the administration's move to eliminate the iecc, the energy efficiency mandate that was put in place by the Biden administration. You talk about red tape. He says this takes $30,000 off the cost of a home. Is that the kind of move that you would support? Is there common ground between the administration and Democrats on this, or is it risky to eliminate energy efficiency right now?

[Senator Angela Brooks]

I think that it's risky to eliminate energy efficiency. I mean, I think we all agree that we want to have more and more efficiencies. I think that there are some things that should be adjusted. You know, it's the reason I'm on the Environment and Public Works Committee. We're looking at some of the permitting and some of the other things there. In some instances there are. Balance is a great word. You know, I think balance is a great word. I'm looking for what the balance is. Yeah, it reminds me of what my daughter said. You know, she told me, coming to the Senate, make sure you listen out for people who don't necessarily agree with you. Take up some space and find yourself at some tables having conversations where you can get to a real solution. Some of those are right in the middle. I think the fringes are where we've been hanging out. I think we're going to have to come more to the middle to find a balanced approach, because, again, as I've said, these are not theoretical conversations. If we're talking about home ownership and talking about ways that we can increase the housing supply and other things, energy efficiency is going to be important. But we also have to do so in a way that is reasonable, that's not burdensome, that doesn't slow us down or prevent us from reaching the goal of getting homeownership into the hands of more and more Americans. Where we know, as a matter of fact, is where generational wealth is created. So we've got to listen to each other. But the balance in it, I think, is where we should be.

[Joe Matthew]

A lot of wealth created in the crypto market, although it goes up and down, as we know. Let's talk about the crypto bill. Last Friday, you and Senator Tillis unveiled a compromise bill, so called, you know, got into stablecoin rewards. What's. What's the progress on this, and when do you expect or anticipate a possible vote? And how do you deal with the ethics issue of an administration, a presidential family who has a lot of exposure, investments in crypto, so, you know, a long way.

[Senator Angela Brooks]

I mean, I'm going to answer that question as well. But if you're asking where we are, Senator Tillotson, I have done a lot of work to make sure that we are not only allowing innovation to grow, but protecting also many of the community banks that have been really important, making sure that deposit flight does not happen, that we're not allowing interest and yield to be paid solely on a balance or that we're mimicking bank like products without the protections of a bank. So we have been working on that, but also making sure that we are allowing innovation to grow and we believe that. I believe it's important for us to have regulated an industry that is already growing. We don't want America to be behind the rest of the world where crypto is concerned, AI and other things. And so really being at the table to, to make sure we are negotiating. Having said that, you're right. There are some other issues, illicit finance, ethics. These are issues that absolutely have to be addressed. And, and we're working with our colleagues. I know that on our side we have Senator Cortez Masto, Senator Schiff and others who are working along in a bipartisan partisan way to come up with some smart solutions so that ethics can be addressed on the larger public.

[Joe Matthew]

Do the Republicans have those same concerns, those ethical concerns?

[Senator Angela Brooks]

I think some do. I think that some do. You know, not all, but I mean similar to what we found on this banking issue and the stable, the interest issue. Senator Tillis made a tremendous difference when he joined me in raising this as an issue. And we found in doing so that we have colleagues on either side side who, who agree with us. So there are some Republicans who are concerned about the ethics issue and have said that they want to see it addressed and I want to see it.

[Carol Massar]

There's nothing more powerful than a retiring Republican in the Senate right now. You're making friends with the right people. Senator, I'm curious. Look, our audience has really basic questions when it comes to clarity.

[Senator Angela Brooks]

Yeah.

[Carol Massar]

Is it going to pass and is it going to happen this year? Because when you talk about it, you make it sound like there's still pretty long road.

[Senator Angela Brooks]

You know what? I think it can pass. I really do. I mean I think is that this year. I think, I hope to. So we've had a lot of work. We've put a lot of work into this. I mean we've been working tirelessly for months. What it will mean is we're going to have to have some compromise. You know, I think everyone will walk away from the clarity table just a little unhappy. Both the banks and the industry potentially. Well, you know what we've compromised and said we want innovation to grow, but we don't want to create bank like products without the protections of a bank. You cannot pretend to be A bank like product without depending on protection.

[Carol Massar]

Stablecoin yield. The biggest hold up.

[Senator Angela Brooks]

That was a big hold up.

[Carol Massar]

We're still there though, right?

[Senator Angela Brooks]

That was. Well, I think we have, I think we've resolved the yield issue. We have resolved the yield issue in a way that I think prevents evasion of the laws again, allows the innovation to grow. But you know, we put some, some, I think some barriers in place that will allow both to be a little unhappy. But I think it's a way forward.

[Joe Matthew]

How does it create more access to, for wealth creation for a broader public?

[Senator Angela Brooks]

Well, generally what we see when we see these kind of revolutions that we see that people who are underserved generally can't get in, the only people who can, who can benefit from them are wealthy people. In this case, when we think about small businesses who using for example a stablecoin can do transactions more quickly and more cheaply. This is, this is very, this is a change. You know, it is something that will allow businesses to grow and allow more and more people. I think about.

[Carol Massar]

For the debanked, that's where you're going here.

[Senator Angela Brooks]

Yeah, I think for the underbanked and the debanked, these are really game changers to allow more and more people to participate in the marketplace where they have been shut out before now. But again we have to do so making sure we have the right regulation that we have consumer protections in place, making sure we're protecting them. But for the underbanked and the debank, this is a complete, complete game changer to allow more and more people to get into the marketplace and to, to be able to participate and to make money.

[Joe Matthew]

I, you know, I asked this of our last guest. I have no idea what time, much time we have because I can't hear,

[Carol Massar]

I think about 30 seconds.

[Joe Matthew]

Number one question everybody wants to know from you, just quickly.

[Senator Angela Brooks]

Well, you know what? I think everyone wants to know what the way forward is. The people that I tend to serve, concerned about economic opportunity, they want to know what we're going to do to fix the place we are in our country where people are feeling really discouraged. And I think it's by participating in things like this to work together to find those ways forward.

[Carol Massar]

Thanks for listening to the Balance of Power podcast. Make sure to subscribe if you haven't already at Apple, Spotify or wherever you get your podcast. And you can find us live every Weekday from Washington D.C. at Noontime [e-mail].