to ukraine cluster munitions is we are running out of munitions to send. there is quite a bit of backlash for sending that type of military equipment to the front lines because of the risk to civilians. the united states stockpiles are being depleted at an incredibly brisk rate. this needs us to rebuild our industrial military complex. we have to put the investment, unfortunately, into will pressure on the role going forward. nothing the markets have fully incorporated that. they are still yearning for the reality of three years ago. a world that feels very much like cold war number two.

sonali: when you think about the idea of the cold war, you have to think about china and the united states relationship. as president biden meets with the president of china, what would you say? ken: we need to turn the mutual temperature down on the military touch point around taiwan and in the greater china cities. there's no room for an accident to take race. both countries need to be very thoughtful around that reality we do not want to give the people of either country the incident where two planes collide that create an outburst of nationalism that accelerates the degradation of the coupling between our two countries area the united states, have $500

billion of goods from china in a year. our in connie's -- our economies are coupled together in a decoupling would come at a catastrophic cost to the people of both countries. if you look at the worst case scenarios, loss of access for example to achieve -- chip manufacturers, wake up tomorrow and we cannot buy chip, how many weeks until every single production line of consequence from erica would suffer. no tesla, no ford, no boeing aircraft. probably 8-10% hit to gdp. it's important that we try to find common ground to build a better relationship with china on rather than continuing a downward strike -- a spiral of hip tap on trade policies and otherwise. sonali: how do you think about

this in terms of somebody who runs a business? ken: if you take a step back, if i am biden, i do not show weakness or project we miss in any way -- weakness in any way. the chinese respect a country that is comfortable in its own strength just as the united states should respect china in its position of the world stage. one of them is calculations by the trump administration -- one of the miscalculations of the trump administration was to make a chinese deal the little and that is the wrong tone and rhetoric with one of the most important trading partners of the world. sonali: as you speak about this, it sounds like you're calling for normalization of relationships across the globe let alone the idea that existed a couple years ago where there was a call for more deglobalization.

do you think the world is too interconnected to be delinked? ken: no, i think the cost of delinking is to high to imagine. that is a world where we are all profoundly poor. almost everywhere in the western world as asian societies, large structural deficits and debt. we need to have economies that are growing and creating for the future if we will meet the obligations to our retirees and we offer a better future to our children. in a world that is decoupling, there's no way we can make our promises to the retirees. our children for the first time will have a bleaker future that we had and our parents had an hour parents had. sonali: going back to visit as a business owner, there's been a sense that fitted out securities

has -- the citadel securities has had to expand in the chinese economies. ken: let's take a step back. one area where the united states is very good is the financial services many of the top asset financial businesses are here in the united states from fidelity, blackstone, kkr, citadel, the list goes on. most of those are here in america. these firms create high-paying jobs. they throw off enormous sums of taxable income that deal with financial problems we have is a government. think about the banking system, name the most important banks in the world. sonali: no one space in china and the united states. ken: the world would say aches

in america. jp morgan, a dominant in the world the first you would think about is jp morgan. it is that simple. think about the incredible about employment and tax -- that jp morgan goes off. i talk about this in these ways? the washington there is a pressure to attack financial services. i do not understand why we want to injure a sector of our economy that is a world champion . most countries try to protect the world champion industries. they try to encourage growth and prosperity. for me i am befuddled by the efforts of progressive left to attack part of our economy where we not only bribed invested late but globally. sonali: let's get into at that. let's talk about gary gensler. it is no secret that you have

been frustrated with his approach. he said harsh things about his approach but what frustrates you the most about what he is trying to accomplish? ken: there's a huge amount of effort for solving problems that do not exist. if that's how i want to put it would say are we fighting solutions for problems that do not is? sonali: what would the equity market look like. he's on a path to change equity market structure and how it works. if he succeeded with this how would it happen? ken: we don't know. there's many moving parts. the intersection is not understood until we do not know what it would look like. i'll give you an example in the retail market one of the most important concerns retail investors have is how their order is handled. there's an entire body of law that says the firm that manages the execution of a retail order cannot front run that order.

it's an important law because it gives the retail investor confidence that they are being treated fairly. here is what is remarkable. in one of his proposals every order must be sent to a publicly displayed auction. not only can the market maker that but every single market maker can run the order. legally. how in the world do you reconcile decades of regulatory decision-making all decide to -- designed to curtail investors? and underline it like this? that's a great example. sonali: i'm glad you brought up the retail investor.

gary gensler trying to protect the retail investor. before i came to interview you i mentioned i was interviewing you online at about 600 responses came in about you and what you do. what you think the american retail investor feels so much like wall street has an unfair advantage? what do you tell them? ken: there's two conversations here one is i'm a retail investor and will wall street. the second is execution, how am i treated? let's start with basics. what is the day job of my investment team? it is to understand stocks, with management team. it's hard as a retail investor who trades stocks in the free minutes of their day to compete with peoples who entire life comes down to researching and understanding business models and the pricing of securities.

it's like if we went on the street right now and found somebody to do this interview and put them in the seat to moderate this interview. fair to say they would struggle? sonali: [laughter] they have all the questions for you. so. ken: it's not a fair comparison. one of the challenges, if you want to protect retail investors it is to get into mutual funds, index funds, make sure we encourage portfolios and etf's and diversified portfolios to take advantage of the large banks jp morgan and morgan stanley. that's a powerful way to protect retail interest investors. encourage them to be and professionally manage products that offer a return ratio that is better than the average investor in the market. having said that, seeing a

substantial amount of quote from tellers over the years, there are some that are good at understanding emerging trends. look at how much investors made in tesla, god bless. they were there at the start of the transformation of automobile. the easy way that you elon musk created. i think they crushed it. same as apple, and a number of other powerful stories. clearly we want to make sure retail has access to training stocks directly -- trading stocks directly because they are good at it. but traditionally the sec should have encouraging people to do professionally manage product. for those that do understand how the world will unfold, become people having portfolios that manifest your view. when we get to the nuts and bolts of execution let me tell you about the good old days as an investor in college.

i had a 19.95 provision. -- we used to have their phones in the past because traders would break the. m. sonali: [laughter] ken: frustration over a stock that they were doing. sonali: it sounds like an expensive habit. ken: it was. but you buy 10000 and the prices up .25 of eight point, that was the good old days in the 1990's trading stocks in the united date. today retail investors trade was europe commission and a spread that is a fraction -- zero commission and a spread that is a fraction of that on the marketplace. a stock that is a penny why it trades for .7 of the cent.

it is a testament to the power of technology and the ability to process millions of transactions a day. cost next to zero with infrastructure. sonali: let's talk about efficiency. what is this mean for those who are less efficient? sit it out and cinnati bell securities has asked to move at fixed income in a big way. are you looking to places outside of the equity market in a bigger way? are you concerned about the ability to capture more alpha in the equity market days? ken: there's a lot in your question. the equity market today is historically efficient. the market is allocating capital investment highest use. that's how we great stronger jobs and stronger.

but the treasury market is getting too big. we go house in order. corporate bond market under a change. the rise of private going is really starting to show an impact on the overall corporate bond market. i worry about that. i worry about the lack of price transparency in the real-time back move that indicate to managers and investors how good or how well is knight capital be allocated -- how is my capital being allocated? transparency of prices important for us to understand of how good of the job we are doing allocating the rest. in capital markets and trading markets, what we have done is been at the forefront of the electronic vacation market. we felt the flesh electronic

vacation market the good old days of breaking the phone were left in the past by technology. we were right, we got that one right. the rise of electronic trading options equities and fixed income has dramatically changed and transformed the end user. of trading products. even if you trade by voice, the trade you're doing is bigger than the electronic market. you are leveraging the price transparency. your leveraging the liquidity that takes place. that is the transformation we have been a huge beneficiary of this. we push the transformation that has been a change and investors around the world. and holistically liquidity has sort of every type that his mood

electronic markets -- moved electronic markets. sonali: but is this mean in the move of new technologies generated ai, does it add something to the table that existing technologies is not? ken: the impact on financial markets will be more so than other economy. it does produce written words and images. it produces things that we as humans cap relate. it is almost like magic. write a speech, it will write a pretty good speech. write a paper by. it is remarkable how to create free-form text but logical and inherit. accuracy is questionable at times but it is transformational compared to previous answers. --

to predecessors. now machine learning has been used by the market maker years it's part of how we been able to bring down asset spreads and increase liquidity because we learn how to manage risks. those technique are widely used in wall street today. my perspective the impact of generated ai will be call centers, translation, producing content hollywood. the ability to render. i told this story before my friend showed me an image of the future star trek club that is yet to be created and there is james kirk and dr. spock. they look perfect. except they do not exist. sonali: [laughter] so over at the hedge fund at citadel how do you think about

either getting on the ai craze for the you think is too much of a bubble? ken: when you say get in on the ai craze you have given the answer. were not trying to get you a craze, we are trying to get into businesses where the market has yet to proceed the value of the impact. that's where we want to put our capital. we want to put capital on what is important you turn. there's dimensions -- important in the future. we think there's dimensions that are part of the ai race that we want to be part of like microsoft using ai to power opsware driving store the cloud. that is it interesting study corporate strategy. they are crushing at. by creating a product suite that pushes you toward this environment, they never you in microsoft -- differently than

the past few years. we think about technologies and how -- the first effect of the weight loss drug is they lose a lot of weight and a second effect is they drink less alcohol. so you make sure you do not own as much of the alcohol the world. it is a secondhand effect that we think about lot in our investment. we know what is happening first order, what will happen second order? how i? sonali: i have a question on cinnati bell securities, you had an investment with paradigm sequoia. what is that mean in terms of travel? what you learn in terms of technology and visit signal ipo time sing? ken: we need to ask gary gensler. that is a question mark these

days. there's over 1200 plus unicorn. those that are not public. what is it we have done to destroy the value proposition of the public in america? does 1200s -- 1200 companies that would have written many retirement stories. think about all the we met in our lives that have a gory. you know, my grandmother bought ibm and she owned it until the day she died and she died with $10 million. we heard stories of people being able to take advantage of the wealth creation of american -- hundred. but these staying private for longer is depriving we investors that opportunity. that is number one, number two point yet is a fantastic business. they are great in the boardroom

they keep my management team focused on the right issues, metric. they help be a voice of passion around growth and passion around business. and they do have the expertise of what it takes to run a successful and they bring it to the table every day. they've been a great partner to work with and i value the relationship have. sonali: this is all signal intent are you to invest in the private market? ken: there's no doubt that market forces is pushing one to think about private investment. the relative size of the public market shrinking about your private credit strategy and private equity strategy. this is where the sec is pushing businesses. away from public rocket. that pushes -- market.

that pushes more opportunity outside of the hands of american retail investors. sonali: we have 10 minutes left we talked about that adele and the tour of the economy were so close to bid u.s. election and there is no stage you been on where you get away without someone asking what you think the future of the country is. do you think the bigger issue will be the economy are nationals arity? ken: people will vote with their pocket? sonali: how are you voting with your parking book that's your pocketbook? ken: i will vote -- sonali: do you think nikki haley has a chance to donald trump in the primary? ken: we will find out in the next few weeks the issue will come down to if he is brave enough to face her in debate. sonali: are you supporting her

financially yet. ken: that is a decision we are contemplating we have not decided for sure yet. but the issue is donald trump with all of his luster willing to get on stage with mickey haley not. joe biden at the excuse of it but what is truck excuse? sonali: so you would like for him to face off her? ken: absolutely. i think the american public deserves to see. they need to see can donald trump hold his own haley? if you can that's important because of it into the trump versus whited we will all ask ourselves about the relative mental cassidy. -- capacity. sonali: what are the chances that you feel like she would be him? it sounds like you are in her corner. ken: i would like to see that.

and i would like to see that -- you cannot run the largest economy in the world as a name-calling bully. you can write policies. what we are facing right now in the country is president biden, since he became president the consumer base prices that are almost 20% higher, they have no wage growth to speak up in the real term. none. our deficit has increased by 15% ge. the american public knows things are not working in the economy for them. they asked who is working for? they have a misplaced idea that it is working for wall street it's working for no one. this is the price about economic policies and whoever told us bidenomics has no idea how to read an economic textbook. the question we are looking for

is where is biden going to go on his economic all lessees and will we see policies that create real wage growth that gives us the writer future we deserve. and for donald trump is he going to get on the stage and talk with nikki haley about economics or national defense. this is what the american voter should care about. you may argue that the american voter may look at this. it doesn't matter where the president is, things are ok. but they are not. there's two in this world there's the out-of-control problem of sending in washington. we got to get our house in order. national security and our budget to have a brighter future for america. sonali: you mention with dave rubenstein that you would prefer younger candidate coming to office on the republican and democratic side. is there anyone with support as an of and,? ken: it doesn't matter who i

with support, it matters who is running today. the challenges involved in color take is you have to accept the reality of the playing yield. with nikki haley we have some younger with policy. . that is a real positive. but in both parties we need to encourage people who are younger to step into the brain. on the democratic side, the fairness to the young upcoming party members it is hard to write again incumbent president. you're not likely to win and you're likely to hurt that person thought in a general election. that makes a person hesitant. sonali: i've got to ask in the same interview mentioned you had political ambition in the distant past for governor or lawmaker one day read push back on the idea of running for president yourself. what are the circumstances in

the nation and personally that you would accept a call to service as the treasury secretary? ken: let's give a little context here. dave and i are huge collectors of american document. documents for the government. the context was i really had great interest in public policy. all of us in the room are committed and want to have good governance in america. there is no doubt that there's moments in my life where i thought about what it would be like to be in public office. that's part of that you have that fantasy. i have no fantasy of being in treasury. i have a great day job. i have colleagues that i work for. if there were a financial crisis, of course i would serve our country. but right now, i do not think that being secretary or treasury

would create the opportunity to change our country the better in a way that would be profound enough for me to walk away from my life at citadel and my three kids who are all teenagers right now. sonali: last question. you've been filling out your presence here in miami and you have the present your release your exposure in chicago. miami or new york, what is the boat for both sides? what is in favor of city? ken: that is a great question. let's head to the chase. new york is the financial capital of america today. and it is new york's toulouse. the density of talent and financial services and at-large in new york city is a mux top in the world. new york is then epicenter of thoughtful people passionately

engaged in their careers read in is a unique and powerful city both in the united states and around the world. it is the cultural center of united dates also where it is broadway or the arts, new york has so much to offer. having said that, miami i think represents the future of america. incredibly vibrant economy. you will have people on stage say they are part of this in florida. not be able to tell of they are republican or democrat they are focused on civil society, the business community and the government. this is a state that has done a credible job of electing people to office that care about safe, good schools, good jobs. it is great to be in a state where those are the focuses of your leaders. i say that as somebody who is committed in chicago for 30 years and saw my city default with an rp under government.

i really do believe there are lessons for america to be learned that you see from the state of florida at the state and county level. sonali: next time we will debate this one for years to come. ken: we will we will see how big wall street self becomes. and maybe in 50 years it will be rigell bay north referred to new york and finance. sonali: [laughter] anyways we have to leave it there. thank you. time and thank you all for joining us. romaine: tim griffin the head of citadel speaking with sonali basak. at the securities conference in the wall street of the south in miami. and back here on the real wall street the financial capital of the world here i am romaine bostick alongside katie greifeld. you off to the close