Crypto Firm Tied to Trumps Sees Shares Sink as Lockup Ends

Summary

Bloomberg Businessweek Podcast Summary

Episode: Crypto Firm Tied to Trumps Sees Shares Sink as Lockup Ends
Date: December 2, 2025
Hosts: Carol Massar, Tim Stenovec

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Episode Overview

This episode spotlights two major business stories shaping financial headlines:

1. The dramatic one-day decline of American Bitcoin Corporation, a crypto miner co-founded by Eric Trump, as a lockup period ends and shares plunge.
2. A landmark $6.25 billion charitable donation by Michael and Susan Dell to the government’s new “Trump Accounts” (child investment accounts), and what it means for wealth-building and financial literacy for American kids.

The show also covers updates on real estate markets in New York and San Francisco, and features a detailed discussion on investing trends in private credit and AI-driven equities.

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1. American Bitcoin’s Plunge and the Crypto Market Volatility

Key Segment: [02:10] – [08:24]
Participants: Tim Stenovec, Carol Massar, Monique Malima (Bloomberg News Equities Reporter)

Discussion Highlights

• Market Snapshot

  • Bitcoin sees a rebound, trading above $92,000 and up 6.7% on the day, yet the general trend had been negative over the past month, creating headwinds for miners.
  • American Bitcoin Corp, co-founded by Eric Trump, plunged over 50% in 30 minutes, with trading halts triggered and shares down 36% by the segment’s end.

• Causes for the Decline

  • The company, spun out of HUD 8 earlier in the year, is heavily exposed to Bitcoin price movement — miners’ revenues are directly tied to the value of their holdings.
  • American Bitcoin has underperformed relative to other miners who have diversified into AI data centers and new sectors.
  • “Eric Trump posted earlier on X that the company had an unlock for some of its shares today. So that might be pressuring as well.” — Monique Malima [03:54]
  • Retail investor concentration leads to heightened share volatility amid swings in sentiment and structural events like share unlocks.

• Industry Context and Sentiment

  • Market uncertainty persists; regulation, sentiment, and the broader economic environment (especially interest rates) weigh on crypto valuations.

Notable Quote:

“For American Bitcoin, they have a largely retail trader base in terms of their investors. And that can make shares a lot more volatile...” — Monique Malima [03:54]

• HUD 8, as majority owner, also sees shares dip in tandem with American Bitcoin’s fall.
• Share unlocks in crypto firms, even if insiders don’t sell, tend to trigger retail fear and sell-offs due to anticipated insider movements.
• Eric Trump remains publicly committed, holding 7.5% of shares and reiterating he will not sell.

Looking Ahead:

• A potential Fed rate cut could trigger renewed interest in speculative assets like crypto.

“Yes, there are some analysts that are saying an interest rate cut would help crypto.” — Monique Malima [07:42]

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2. Michael and Susan Dell’s $6.25 Billion “Trump Accounts” Gift

Key Segment: [10:54] – [18:51]
Participants: Tim Stenovec, Biz Carson (Bloomberg Reporter), Michael Dell (clip), President Donald Trump (clip)

Discussion Highlights

• Initiative Details

  • The Dells pledge $6.25 billion to seed child investment accounts—“Trump Accounts”—as part of the Invest America initiative, under President Trump’s “One Big Beautiful Bill Act.”
  • 25 million U.S. children will each receive $250 to jumpstart investment accounts, aiming to boost financial literacy and generational wealth.

• How the Program Works

  • Newborns (2025–2028) get $1,000 from the government, accounts opened automatically.
  • Children under 18 eligible to activate accounts after July 4, 2026.
  • Dell’s funds go to the U.S. Treasury; children under 10 in zip codes with incomes below $150,000 qualify for the $250 bonus, using census data.
  • “...looking at zip codes where the median income is less than $150,000, he believes he's going to hit 80% of children in that 10 and under bucket.” — Biz Carson [14:48]

• Account Mechanics

  • Annual contribution limit: $5,000.
  • Untouchable until age 18, automatically distributed at age 31 if unused.
  • Withdrawals for education, homeownership, or starting a business are allowed; early withdrawals for other uses incur penalties.
  • Taxation details are still being finalized, but currently, gifts are tax-free and withdrawals taxed as income.

• Wealth Equity Vision

  • The automatic seeding of accounts targets children who have never owned assets, with the hope of narrowing wealth disparities and fostering financial education.

Notable Quotes:

“This is really for those children who don't have that financial knowledge … and then along the way, equip them with financial literacy because they'll be able to look at it and say, ‘look, I own part of Apple stock or something like that through my index fund …’” — Biz Carson [18:15]
“I got to see the power of compound interest early in my life … hopefully will inspire that kind of opportunity for many more young people.” — Michael Dell [11:38]

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3. Real Estate Market Shifts (NYC/SF)

Key Segment: [21:18] – [29:07]
Participants: Tim Stenovec, Carol Massar, Louise Phillips Forbes (Real Estate Broker, Brown Harris Stevens)

Discussion Highlights

• San Francisco Rebound

  • The AI boom has reignited the high-end housing market; startup founders cashing in equity and improvements in crime and cleanliness have fueled turnarounds.
  • Policy initiatives by new Mayor Daniel Lurie with a pro-business stance have attracted investment.

• New York City Trends

  • Despite political fears, there’s been no mass exodus after Zoran Mamdani’s election as mayor.
  • The real estate market saw a surge in activity, especially in the $1-4 million range, indicating buyers are no longer “waiting for interest rates to drop.”
  • Anticipate 4–6% median home price increase in 2026; outer boroughs (Bronx, Queens) expected to outpace Manhattan due to affordability.
  • Quote: “Marry the home, date the rate.” [24:16]

• Affordable Housing and Policy

  • New city charter changes aim to fast-track affordable developments, reducing political bottlenecks.
  • Incentives like the revived 421a tax abatement may mobilize private developers.
  • Supply/demand remains tight; affordability will depend on stimulating new construction.

Memorable Moment:

“The other thing I would say is let's improve wealth for everybody and maybe people can afford more homes and you don't have to do so much affordable.” — Tim Stenovec [28:55]

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4. Investing Trends: Private Credit & AI Bubble Watch

Key Segment: [33:03] – [39:41]
Participants: Tim Stenovec, Carol Massar, Alan Zafran (Co-Founder, IEQ Capital)

Discussion Highlights

• Private Credit

  • Despite increased scrutiny, private credit as a “core allocation” remains attractive if properly diversified.
  • Warning: retail adoption through 401(k)s and open-end funds could create liquidity risks.

    “...if enough people all want to get out at once, you're going to have to live through the cycle till prices reflect back to a normal point in time.” — Alan Zafran [36:16]

  • Buyer beware: liquidity promises in fund documents may not match reality in a crisis.

• AI “Bubble” Status

  • Not 1999 yet, but “getting close.”
  • Market is beginning to differentiate between winners and losers in AI—performance varies across those tied to Google Gemini vs. OpenAI ChatGPT.
  • Historical lesson: “Alan Greenspan... basically saying things feel overvalued... the S&P 500 doubled from the point he made that comment before the market peaked in March of 2000.” — Alan Zafran [38:32]
  • Healthy skepticism and critical assessment of company fundamentals is returning to the market.

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Notable Quotes & Timestamps

• On Crypto Market Volatility:
  • “Shares of the crypto miner, which is co-founded by Eric Trump, lost more than half of their value in less than 30 minutes today, triggering some repeated trading halts.” — Tim Stanweneck [02:19]
• On Child Investment Accounts:
  • “An investment's going to be made. That investment's going to continue to grow, we hope ... hopefully will inspire that kind of opportunity for many more young people in this country.” — Michael Dell [11:20]
• On Market Realities:
  • “Marry the home, date the rate.” — Louise Phillips Forbes [24:16]
• On Private Credit Caution:
  • “You need to understand that it may not be as liquid as advertised ... it's really more of a permanent allocation of capital.” — Alan Zafran [35:25]
• On AI Mania:
  • “Anybody's ability to pinpoint a top, it's a fool's errand to try ... we're not there yet.” — Alan Zafran [38:32]

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In Summary

The episode delivers deep dives into a crypto stock rout and regulatory overhang, covers an unprecedented philanthropic effort aimed at disrupting generational poverty, analyzes major real estate market turnarounds, and offers seasoned insight into the risks and opportunities in private credit and artificial intelligence investing. Throughout, industry voices underscore that volatility, adaptability, and financial inclusion are central themes in today’s evolving economic landscape.

Transcript

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[Interviewer (possibly Tim Stanwick or Carol Massar)]

Radio. I'm typing in Cryp go on the Bloomberg Terminal, Carol and I'm seeing that bitcoin is up above 92,000 and it's at right now up about.

[Tim Stanwick]

6.7%. Yeah, that's today. But as you know, the narrative around bitcoin Bitcoin has been a sharp pullback. We've seen that in bitcoin prices over the past month or so. It is punishing really the most speculative corners of the cryptocurrency market and the latest casualty is American Bitcoin Corporation. Shares of the crypto miner, which is co founded by Eric Trump, lost more than half of their value in less than 30 minutes today, triggering some repeated trading halts. So we want to get a little bit more on what's going.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

On. Welcome Monique Malima. She's equities reporter for Bloomberg News. She's in The Bloomberg Toronto bureau. Monique, help us make sense of what's happening to American bitcoin right now. Down 36% as we speak. On a day when bitcoin is actually higher, why are we seeing so much pressure on American bitcoin.

[Monique Malima]

Today? Yes. So American bitcoin, they're a bitcoin miner that was spun out of HUD 8 earlier this year. And they've also been seeing declines throughout the year as bitcoin prices have fallen. Like you mentioned, bitcoin prices have been pressured recently. They're even with the gains today still down close to around 30% from their highs they saw earlier. And for bitcoin miners like American bitcoin, that weighs a lot on them because they make most of their revenue through either holding or selling bitcoin. So when the prices go down, they're going to go down as well. And we've seen that they've actually underperformed bitcoin over the past couple months. Some of the other things that.

[Tim Stanwick]

Are. Wait, wait, let me just jump in here though. Why the disconnect? Because my gut would be that with bitcoin going back and bouncing up, mind you, the trend that we've seen as of late has been a lower one. But with a bounce up today, why wouldn't shares of American bitcoin also be.

[Monique Malima]

Higher? So American bitcoin also has some other factors weighing on it. Part of it is that for other bitcoin miners, they've diversified. Some of them are looking at AI data centers and other opportunities to get out of just bitcoin. But for American bitcoin, there are also some specific pressures today. Eric Trump posted earlier on X that the company had an unlock for some of its shares today. So that might be pressuring as well. You also have to keep in mind for American bitcoin, they have a largely retail trader base in terms of their investors. And that can make shares a lot more volatile to some of the things happening in markets or changing sentiment. And we've seen that crypto sentiment right now is a little more.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Negative. Yeah, I think that's absolutely fair to say. Still a lot more positive than it was yesterday. Little bit of a rebound. We're seeing a little bit of a floor that's above 90,000. What are the folks you talk to in the crypto community say to you about sort of the next catalyst or the next ceiling or floor to watch.

[Louise Phillips]

For?

[Monique Malima]

Yes. So in terms of the next catalyst, people are really hoping to see the market structure bill pass that's being considered by the US Senate that would give some more clarity around kind of the crypto industry as a whole and the regulations surrounding that. So they see that's a potential catalyst. There's also just needs to be better sentiment in the markets in general. We're seeing crypto isn't just moving off of its own prices in terms of tokens. It's being affected by the broader macro environment of more risk off in terms of investors right now. And you know, if we do see more interest rate cuts going forward, maybe investors would also feel more confident. Analysts are.

[Tim Stanwick]

Thinking. So are we seeing though? I'm just trying to think of some of the other miners that are out there and maybe not apples to apples. I mean, I'm looking at strategy. It's actually up today. But are other miners being hurt as.

[Monique Malima]

Well? So HUD8 is being hurt today, but that's because they still are the majority owner of American Bitcoin. So their shares are down quite a bit more. So off of what's happening with American Bitcoin itself. But like I mentioned, there's some specific factors to American Bitcoin because they did have some shares unlocked today from some early investors that often can weigh on crypto companies, especially ones that have large retail investor bases that can be a little more kind of volatility added in because of that, because they're moving a lot off of.

[Tim Stanwick]

Sentiment. So insiders.

[Monique Malima]

Selling. Not necessarily that the insiders are selling, it's that there's been an unlock so they have the opportunity, if they choose to, to sell. But we've seen in past for crypto companies, we saw this with Sharplank as well earlier this year, that when there are unlocks that those shares can often then go down because of some of those retail investor fears that, oh, if the early investors can now sell, maybe they'll choose to. So then they're thinking, oh, maybe we should get out before they.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Do. Yeah. One thing we should note is we have spoken to Eric Trump several times over the last few months. He told me in September that he was committed to the company. He owns about 7.5% of it. And then, Carol, he reiterated to us just in the last few weeks that he's still committed to the company and he hasn't sold any shares and will not be selling any shares anytime.

[Tim Stanwick]

Soon. Yeah, definitely committed and certainly defending the idea of bitcoin. But that is true, like many folks who are within the bitcoin industry and we've got a story on the Bloomberg too that talks about like, get ready for like a tremendous rally again and a bounce back, you know, so we definitely see this, that what can be a volatile trade. I just want to look ahead real quickly. Just got about 40 seconds here, Monique. You know, we've got a Fed meeting next week. If we get a rate cut, you know, the gut response would be that any kind of speculative, high valuation, you know, type of asset should rally. Should we assume that that will be true along the crypto.

[Monique Malima]

Universe? Yes, there are some analysts that are saying an interest rate cut would help crypto. We've seen some more risk, pull out, pullback in terms of investors recently as there were fears earlier that maybe there wouldn't be interest rate cuts or uncertainty around the path for interest rates going forward. So they're hoping that once people have a little more certainty around kind of the macro environment in the US and where the economy is headed, then they'll feel more confident being in some of these riskier assets like.

[Tim Stanwick]

Crypto. All right, we're going to leave it. Monique, thanks so much. Monique Malima, she is equities reporter at Bloomberg News, joining us from our Toronto bureau. Again, as we look at American Bitcoin, we did see some halts in the trade today, but this stock, I'm assuming it's one of your.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Decliners? Yeah, it is down right now by 36%, but earlier in the session was down as much as 51%. Stay with us. More from Bloomberg Businessweek Daily Coming up after.

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[Interviewer (possibly Tim Stanwick or Carol Massar)]

YouTube. I I think it's fair to say Michael and Susan Dell took the Giving Tuesday pledge seriously. They're going to give 25 million American children $250 each to jumpstart an investment account for their futures. It's a $6.25 billion gift. It builds on the Invest America initiative, better known as Trump Accounts. It was created earlier this year as part of President Donald Trump's one big beautiful bill act. Here's President Trump at the White House a little earlier.

[Alan Zafran]

Today. An investment's going to be made. That investment's going to continue to grow, we hope. Right? We hope. But it will. And they'll Bethey'll feel like they'll feel like Michael Dell someday, but at.

[Louise Phillips]

18, they'll have a lot of money.

[Alan Zafran]

A lot more money than they would have had and potentially a lot of money. I got to see the power of compound interest early in my life, and that has brought me here to this moment and hopefully will inspire that kind of opportunity for many more young people in this.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Country. That was Michael Dell earlier today. Right before that, that was President Trump both from the White House talking about this $6.25 billion gift. I want to bring in Biz Carson. She's a journalist based out in our San Francisco bureau who wrote about this donation, about this gift. She joins us from San.

[Alan Zafran]

Francisco.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Biz. What was it that got Michael Dell's attention with these Trump accounts? You spoke to him ahead of this.

[Biz Carson]

Announcement? Yeah, I mean, I spoke to him yesterday and he's very excited about investing in American children. It's been something that his foundation has been doing for 26 years. But he kind of faced this philanthropic problem. It's a good problem to have, but how do you give away billions of dollars? And his foundation has done everything from grants to scholarships. But this Invest America act, the Trump accounts offered a new venue, a new way for him as a philanthropist to give money to a large percentage of American children. He was thinking of starting with Texas originally, but it grew in scope, and that's how he ended up with a $6.25 billion gift that's going to impact 25 million American.

[Tim Stanwick]

Children. Yeah, it's massive. You know, Tim and I have been talking about this. I think everybody's been talking about this, this story all day Biz. And so how does it all work? Like, where does. Where's the fund registered? Where's the fund manage? Like, how does it work? And who specifically is really going to be able to access.

[Biz Carson]

This? Well, it helps that this is officially a government program, because that's been a philanthropic problem of how do you pick a nonprofit? How do you make sure this is actually getting in the hands of the people who they plan to support? So, under the Trump account, and part of the big beautiful bill is that this is now a government program that's going to be handled through the U.S. treasury. And so for the Trump accounts, those are going to be seeded for newborn children that are born between 2025 to 2028 with $1000 from the government. And those will be opened automatically after the child is born. Then for all other children under the age of 18, they're eligible to activate their account next year, starting after July 1st 4th, and they can open an investment account. And Dell's gift, he's going to be giving the money to the U.S. treasury. And so for children who are not eligible under the newborn government credit, but are still under the age of 10, and in certain zip codes where the median income is below 150,000, the US treasury will be disbursing the money for those accounts as well, coming from the Dell gift. And that's going to be $250 to every child under the age of 10 who signs up and is eligible in these zip.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Codes. Certain zip codes. How do we know zip code? How do we know which zip.

[Biz Carson]

Codes? I don't know. That's a question I'm trying to figure out, too, to figure out if I'm in that. It's going to be a.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Question. A lot of us had the same question early, early this morning when we saw.

[Biz Carson]

This. Yeah, he said he was going off census data when we Spoke yesterday and that in his research, his foundation takes a very data driven approach to everything that looking at zip codes where the median income is less than $150,000, he believes he's going to hit 80% of children in that 10 and under bucket. So it's going to be reaching 25 million or 80% of children under the age of 10. So the majority of American.

[Tim Stanwick]

Children. So is the money, when it's taken out, is it taxed? Is it taxed as any investment? I'm just curious under like, how is it considered, like when a student or an individual becomes 18 and can actually tap into.

[Biz Carson]

It? Yeah, the money is going to be taxed as I believe it's ordinary income. So these are tax free gifts going in. And once they turn 18, they can use the money for education, but they could also use it for home ownership, startup entrepreneurship costs. It's a little bit more flexible than like a 529, for example. A lot of this tax stuff is still being worked out. I think accountants will be busy in the next year or so trying to understand the implications of all of this. But it's designed that the money is accessible only after the child turns.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

18. So there's an annual contribution limit on these Trump accounts of $5,000. It can be set up for kids under 8 starting on January 1st. As you mentioned biz, it cannot be touched until individuals are 18, but then it's distributed to holders at age 31 regardless of whether or not they've taken anything.

[Biz Carson]

Out. I believe so. But like I said this, they're still working out a lot of.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Details. Well, I think, I think it's fair to say not anybody, like nobody really knows all the details about this because they are still being worked out. You did mention it's more flexible than, than a 529, but it's not, it's not totally flexible. You mentioned some of the things that the money can be spent on. What happens if you don't spend the money on those.

[Biz Carson]

Things? I'm not entirely sure. I think. Oh, sorry. If you're taking out the money to spend it on other things. Yeah, you do have to pay the early.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Penalty.

[Biz Carson]

Okay. That's what you can remove it penalty free. And there's a lot of tax debate around these accounts right now because are they better than a 529 if you're going to use it for education? Maybe not. Are they better than other, you know, options available for children if you're looking to invest? But I think the difference with these accounts and that's what Trump and other people are touting is that because they're automatically open for newborns, because they're going to be easily activated for other children, is that they're hoping to reach children who have never had a savings account in their life. And so this is going to unlock something different for them than perhaps a financially savvy higher income household that's looking to kind of maximize their tax.

[Tim Stanwick]

Advantages. I mean, so you could technically you're saying at 31 or so we believe at 31 you're going to have to, if you haven't used it, I guess take the distribution. But you could roll it into another investment account. I guess if you, if it's about kind of like wealth creation.

[Louise Phillips]

Too.

[Tim Stanwick]

Right. Which is something we talk about, you know, socioeconomically, like it's. The access is not the same for people in the higher income strata versus the lower always. Right. The opportunities to create wealth. And so maybe this is something that helps people get, get to that point, create some.

[Biz Carson]

Wealth. Exactly. Many children don't have savings accounts at all. There will be children who have them maximized with accountants to the nth degree. But this is really for those children who don't have that financial knowledge to have a savings account. And then along the way, equip them with financial literacy because they'll be able to look at it and say, look, I own part of Apple stock or something like that through my index fund. You know, can I what is happening with the company? What do I need to learn about this? We see their money going up and kind of understand compounding, which is a concept I'd say Most kids under 10 don't.

[Tim Stanwick]

Understand. Biz. Carson, thank you so much Bloomberg News, this is Bloomberg.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Radio. Stay with us. More from Bloomberg Businessweek Daily coming up after.

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[Interviewer (possibly Tim Stanwick or Carol Massar)]

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[Monique Malima]

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[Tim Stanwick]

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[Carol Massar]

Extra. See mint mobile.com you're listening to the Bloomberg Business Week daily podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple Car and Android auto with the Bloomberg Business app or watch us live on.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

YouTube. Carol, let's talk a little bit about San.

[Tim Stanwick]

Francisco. Let's do.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

That. Okay. Just a few years ago it was a symbol of post pandemic urban doldrums. Yeah, it's a great story on the Bloomberg. Now it's one of the hottest housing markets in the.

[Tim Stanwick]

Country. Yeah, we're talking about an area where it's really been hit by the AI.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Boom. Yeah, it's reignited demand for high end homes among buyers cashing in on soaring startup valuations. Now, in addition to the new influx of tech money, the city's seen a turnaround in crime, recovering office demand and cleaner streets. Mayor Daniel Lurie took office in January with a pro business slant. He attracted wealthy donors to the cause of improving San Francisco's.

[Tim Stanwick]

Fortunes. Remember, everybody was like, nobody's coming back to San Francisco and here it.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Is. Yeah, of course it's coming back. Well, closer to home for us here in New York, there are questions about the status of residential real estate under the mayor elect Zoran Mamdani. He takes office in January. Wondering what Louise Phillips Forbes is seeing. She's a real estate broker with Brown Harris Stevens. She's been in the industry for more than three decades. She's got just around $6 billion in transactions. She joins us here in the Bloomberg Interactive Brokers studio. How are.

[Louise Phillips]

You? I am great. So happy to be back. Tim.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Carol. So last time we spoke to you was pre.

[Tim Stanwick]

Election.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Mm. Now we know who the mayor will.

[Louise Phillips]

Be.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Yes. There was a lot of hand wringing ahead of the election about people who would, would leave the city if Zoran Mandani.

[Louise Phillips]

Won. They haven't.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Left. They haven't.

[Louise Phillips]

Left. Just to be clear. They have not.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Left. Are you seeing any, what are you seeing in terms of real estate right now? What are you.

[Louise Phillips]

Hearing? I mean, listen, there was. Look, we've just gone through an unprecedented time where we had a government shutdown for 44 days, which is the longest we've seen. And we in our housing market here, we had a lull, but honestly the last three weeks we have been on fire. Multiple bids. In many cases, the days on market are short, shortening. This only lagging sector is between 4 and 6 million dollars, which is not necessarily first time buyers. Yeah, but it's strong and I'm, I'm feeling like we have an energy that we should expect a very strong indicator for.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

2026. So a million to 4 million doing very well. Very well above 6 million doing.

[Louise Phillips]

Well. I mean it's not that it's not happening, it's just lagging if it needs work. But that's not new information. The cost of doing renovations, et.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Cetera.

[Tim Stanwick]

Wow. So what does that one to $4 million activity tell.

[Louise Phillips]

You? It tells me that people are not waiting for interest rates to drop anymore. That, you know, if I look at the key indicators for 2026, we're going to have a stronger growth, probably 4%. 4 to 6%, they're saying for increase in the pricing for the median homes. We're going to have outer boroughs like the Bronx and Queens seeing more advancement and probably a quicker pace of growth. And to, to New York City just because of affordability and first time buyers moving there. I think people aren't going to wait for the interest.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Rates. What do they say? Marry the home, date the rate. What do they.

[Louise Phillips]

Say? That's my line.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Yes. What do you.

[Louise Phillips]

Say? Marry your home and date the.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Rate.

[Louise Phillips]

Okay. Buy more today than less.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Tomorrow. I went by that and I feel like I'm. Things are getting a little.

[Louise Phillips]

Closer. A place without Me, believe it.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Or not, you know, I didn't want a conflict of.

[Louise Phillips]

Interest. No, I know that. But it feels like you're.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Settled. The, the, the rate. We've been dating this rate for a long time thinking that rates were going to fall. Feels like we're kind of engaged at this point. We might end up getting married, but I'm gonna have to refi at some.

[Louise Phillips]

Point. Yes, but.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Then. Because it's an.

[Louise Phillips]

Army. But that's okay. The bottom line is, is that, you know, hold the value, especially when.

[Biz Carson]

Rates are a little bit.

[Louise Phillips]

Higher. The values are lower so that when they drop and again rates.

[Tim Stanwick]

Have. We keep, it's.

[Louise Phillips]

Keeping. It continues to be baked into the market. So it sometimes causes. It doesn't necessarily mean that your rates are going to actually.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Drop. This is, I'm glad you said this because if you were joining us maybe three weeks ago, we'd be talking about the idea of a 50 year mortgage, something that Bill Pulte of Fannie and Freddie floated a few weeks ago. And I think at the end of the day, if you have a longer mortgage, it means one, you're paying more in interest. But I don't think that's the story. I think the real story is homes are bought on monthly payments. And what.

[Biz Carson]

Monthly. What you can.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Afford. What you can afford in a monthly payment. So if the monthly payment goes down, that could actually increase the price of these.

[Louise Phillips]

Homes. Absolutely. And that is what. If you look at what things traded in 2021, which was a recovery market, you know, we had 2.85 to 3% interest rates and those, those homes had massive growth. And if you think about what happened outside of the city, yeah, they were 35% increases in evaluations.

[Tim Stanwick]

Right. So as, you know, moved.

[Podcast Host]

Out.

[Tim Stanwick]

Right. They wanted to get.

[Louise Phillips]

Away. It's, it's supply and demand. And that we're going to still continue in 2026 to have supply and demand to outpace. We're going to have more demand than supply will be.

[Tim Stanwick]

There. Well, more demand than supply for sure. We always talk about affordable housing. I mean, I don't know. Do you anticipate something different with this incoming.

[Louise Phillips]

Mayor? You know, I think that, I mean, I did not necessarily vote for him. However, I believe he has great intentions. I believe that he believes in what he believes in and I think that he has an opportunity with the charter, the city. In our election we had four charter, city charter changes that were all passed which are an opportunity for him to pave a way for a number of things. Fast tracking affordable housing, it doesn't go through the bottlenecking and the political sort of opposition. It's no longer going to. If it's 100% affordable, it will get passed in a very steady, quick way. And when you're looking at the ability to reverse those, those charters, there are a number of them that are all about fast tracking and simplifying. You want to say.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Something? Yeah, I did. On the affordable housing thing that Carol, that Carol was mentioning, what we've spoken to quite a few people about when it comes to housing affordability is it's still a question of supply and demand and whether or not new homes get built here in the New York City area over the next few years. Is there a realistic assumption that that will happen under this next.

[Louise Phillips]

Mayor? I think that there are. They are tools that are at his disposal to overturn denials through a 2 to 1 vote. That is a truth. We know that the, you know, if there is collaboration, it's a time for not to have confrontation but collaboration. And I think he has an opportunity to bring those people. If you notice some of the things that he platformed and preached on have quieted a little bit because he knows he has to get things.

[Tim Stanwick]

Done. Well, you know, it's so rough because I think a lot of people understand it's important that we provide a variety of housing for sure. For everybody who lives in a major city. Right. And make it affordable at the same time. Builders are not going to build.

[Louise Phillips]

Unless the incentive is.

[Tim Stanwick]

There. Right. So unless you get that public private cooperation or something.

[Louise Phillips]

Right. Like unless the policies will the policies towards tax towards the what we used to have.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

421A.

[Louise Phillips]

Yeah. Which would give the the opportunity for a lowered and you know, you get compensated for improving your land. Those are things and policies that will mobilize the private.

[Tim Stanwick]

Sector. The other thing I would say is let's improve wealth for everybody and maybe people can afford more homes and you don't have to do so much affordable. Louise, we've got to run. Thank you so much. Louise Phillips, Forbes real estate broker at Brown Harris.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Stevens. Stay with us. More from Bloomberg Businessweek Daily coming up after.

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[Carol Massar]

Podcast. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business app or watch us live on.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

YouTube. And you just focus on on driving. Focus on the.

[Alan Zafran]

Road. Why would I drive.

[Tim Stanwick]

Fast? Because I'm asking you to take.

[Alan Zafran]

Your place in the.

[Podcast Host]

Drive. Just drive.

[Carol Massar]

Baby. This is the drive to the clothes. But we're going we don't need Roads on Bloomberg.

[Tim Stanwick]

Radio. All right folks, we're just about 19 minutes away from the closing bell on this Tuesday, December 2nd. Carol Massar, Tim Stanwick live here in our Bloomberg Interactive Brain Broker Studio. We've got stocks as we continue to say bounce it around here. We're off our highs and lows of this session. You heard Bill Maloney and Charlie Pellet just talking about the trade. We're up about 4.10of a percent on the S&P 500 as we are driving near the end of the trading day, 297points or 6.10of a percent higher in the Dow Jones Industrial Average. NASDAQ 100 a gain of nearly 9.10 of a percentage point, up 223 points. Flip on over to the S&P 500, not quite an even split. A few more names to the upside 278 at this hour, 222 to the downside, Tim, and 3 unchanged. If you take a quick look at the action in the treasury trade, just watching those yields as we are now about a week out from the last Fed decision of the year. I'm looking at a two year note with a yield of 351 shorter end of the yield curve, most sensitive to what the Fed does next week. And we're seeing that lower on the day in terms of the yield 10 year note though higher. And we're up above 4%, 4.08 to be.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Exact. I want to bring in Alan Zafran. He's the co founder and managing partner of IEQ Capital. He's got about $36.8 billion in assets under management. Alan joins us once again from Foster City, California. Alan, it's been a few months. How are you.

[Alan Zafran]

Doing? Great. Happy holidays. Carol and Tim, thanks for having me on your.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Show. Happy holidays to you. There's a lot that I want to get to with you and I want to start with private credit. I know that in the notes that you shared with us ahead of this interview you have an outlook for the fourth quarter of this year and you argue that private credit remains a compelling core allocation offering material excess yield relative to public fixed income even as interest rates decline for floating rate bonds. Did you write that before or after the concerns about private credit that have emerged over the last few.

[Podcast Host]

Weeks?

[Alan Zafran]

Both. I would have written it before and I'd still write it afterward. And the reason is in the event you're really invested in a truly diversified private credit fund or several funds where you have literally hundreds upon hundreds if not thousands upon thousands of outstanding loans. Historically, these private floating rate loans have terrific risk adjusted returns. And even if eventually defaults go up a bit if the economy softens, given their floating rate, they're senior, you end up collecting the predominance or catch capital back even if there is a default over time, the excessive amount of yield you get relative to public bonds historically does well. It would be different if you told me you're making a handful of loans to illiquid or poorly capitalized businesses, so you need to be very prudent about which underlying fund manager you allocate your capital to. And you want to make sure those companies have very large balance sheets generating EBITDA positive cash flow. Those are the kinds of private credit loans that we're very comfortable.

[Tim Stanwick]

Owning. Hey, how do you think, Alan? Hello. Happy holidays to you too. How do you think though, if we see kind of mass adoption of private credit, private equity throughout 401k and investment retirement plans, how that impacts that market? And I'm just trying to understand because first of all, we know it creates a whole new bunch of capital, right, to invest. But I wonder if that leads to less lucrative deals, messy deals, a lot of money, you know what I mean? I'm just trying to understand how that might ultimately play.

[Alan Zafran]

Out. Yeah, I'm going to give you sort of a three part answer. Part one is, albeit it's great, it's the democratization of alternative investments for all investors. You're right, there's going to be more capital, more demand going into a set supply of loans. So all things equal, the spread over public bonds will be a little lower and it'll be a little less attractive. Secondly, and more challenging is many of the ways in which these private loans are offered are in what they call open end funds and they offer you the ability to have monthly or quarterly liquidity. And the secret behind that is a manager will limit probably no more than maybe 5% of the total fund value to be liquidated, let's say in any quarterly basis. So if there was headline risk and bad news came out and a lot of investors panicked all at once, the manager could theoretically gate or limit how much any single individual could get out of the fund in any quarter increment, even though it's advertised as quarterly liquid. So what's, what you need to understand is if you are investing in an open end fund as a client, as an investor, you need to understand that it's really more of a permanent allocation of capital. Even though it may pay cash flow monthly or quarterly, you need to recognize that it may not be as liquid as advertised. And then the third part of my comment is in the event investors panic, they can create an oversized negative reaction in price, not really reflective of the ability of the companies to pay their loans. But if enough people all want to get out at once, you're going to have to live through the cycle till prices reflect back to a normal point in time. So if a lot of somewhat less sophisticated investors plow in because they like a high yield, they run the risk that they will get gated somewhere along the way and they need to understand that they have to hold that asset class through a full cycle to really understand that it has created a better, higher risk adjusted return to conventional bonds. But along the way it could be a problem along the way potentially. And that's why you want to be in a very well allocated set of loans with highly capitalized and cash, cash flow positive.

[Tim Stanwick]

Companies. Sounds like you're going to have to be much more particular and be very.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Careful.

[Alan Zafran]

Right. Well that's, that's it. It's buyer beware. It's no different than equities. You need to understand credit is actually positively correlated with equity. So unlike treasury bonds, private credit goes up and down in alignment with the direction of stock prices. So you get paid to take this extra risk, but you're going to bear extra price risk along the.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Way. Okay, Alan, so. So are we done with private credit?

[Biz Carson]

Carol? For the.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Moment. Okay. I do want to move on to some other things. We're not going have time to get to everything but the second, I guess our second favorite thing to talk about right now is sort of the where we are. If this were an AI bubble and you make the case that we're not quite at 1999 yet, but we're getting a little.

[Alan Zafran]

Close. I think that's probably right. I mean, look, just, just to tell you how hard it is to predict, Alan Greenspan, who is the Federal Reserve governor in the late 1990s, made a comment about markets can exhibit irrational exuberance. He was basically saying things feel overvalued. Tim, do you have any idea what date Greenspan made that.

[Interviewer (possibly Tim Stanwick or Carol Massar)]

Comment? I think that was like 95.

[Alan Zafran]

Right? It was in December of 1996 and the S&P 500 more than. Yeah, it doubled from the point he made that comment before the market peaked in March of 2000. So. And he's theoretically the most knowledgeable person on the planet. So anybody's ability to pinpoint a top, it's a fool's errand to try. What I can say is this. The companies themselves largely, certainly the hyperscalers have significant balance sheets and still generate profits and cash flows. What's interesting, if you look under the surface most recently, you're beginning to see a bit of dispersion amongst the performance of various AI players. So as an example, more recently, businesses somewhat tied to Google's AI Gemini 3 product tend to suddenly be performing better. And suddenly companies tied to the open air chat GPT tend to be performing recently a little less well. It's telling me investors are starting to discern slightly more both the underlying quality of the underlying AI and secondly the strength and balance sheets of these businesses to deliver what's being promised. And so those are the early stages of markets being being critical. And that's healthy because if we just have a rational exuberance, it's going to be a big bubble. We're not there.

[Tim Stanwick]

Yet. All right, we're going to leave it there. This was fun. Happy Holidays if we don't catch it before the end of the year. And Happy New Year. Alan Zafran, Co Founder, Managing Partner of IAQ Capital, joining us from Foster City.

[Carol Massar]

California. This is the Bloomberg businessweek Daily Podcast available on Apple, Spotify and anywhere else you get your your podcasts listen live weekday afternoons from 2 to 5pm Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business App. You can also watch us live Every weekday on YouTube and always on the Bloomberg.

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[Carol Massar]

Walk. You know what a girl's best friend is? Not diamonds her.

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