on, we won't resign. we want to investment or people money. they don't have to pay the legal fees we're paying. by the way, blackrock has spent tons of mailers. you saw the graphic, that mailer went on you five or five calls, robocalls, and i received them h. i seed these milers. they only got one out of 10 share holders to vote for them. it's just incredible. so what is my end goal? my end goal is to turn the funds not because i am some kind of management wizard because it is a billion three away. >> has this gotten personally? -- personal? >> i am definitely feeling it on

the stage. but my pet peeve -- this will sound a little corny, but it is injustice. i just have not been eating campaigns before. we actually decided this past year to launch a fund. we looked at the attributes. what are the funds that have the worst governance? we put into place the best governments. we put into place governance for you count the number of votes. we need have the shares in your favor, even if half do not show up. it is only personal in the sense that to me it violates what we are so lucky in this business -- the amount of money that

management firms make, they have $10.5 trillion to do this because they want to track capital and are basically blinded by this being long-term capital that cannot be redeemed and they want to hold onto it. to me, it is a very noble fight. look on twitter and there are hundreds of positive comments. i do enjoy the retail coming along for the ride. in that sense, it is personal. >> to be clear, this is an investment strategy. it is not just on concept. how big of a strategy has it become? have they really pivoted? >> what have we had, 40 straightway -- 40 straight days? it is a big business for us. april 3 of them are just single manager at lack rock and many of

them have good governance, -- they are just that discounts. we do not have a evidence issue. i cannot speak to the returns, but the ticker has been around for more than seven years and people can plug in how that did versus the closing funds. it is done very well. >> how well? >> if somebody were to plug into bloomberg, i think for the last three years -- a lot of it has been fixed income. those other funds have made between 0% to 2%. >> let's broaden out. people have looked at you for credit market for a long time. there is a deeper question. there is a whole push to push into retail, to find new

strategies and bring money in. are all of those funds vulnerable to activists? >> depending on the structure, some are and some are not. you generally have the right to redeem 5%. but you cannot -- they also invest into liquid assets. it is interesting for me, having been at the forefront of all the innovation with credit derivatives and synthetic. back then, revealing -- real estate investors were -- you cannot own a loan unless you were a qualified investor. this has been amazing for the managers that can bring these products their reputations and

good governance because we also see a lot of good governance. and we see that there is huge investor demand. an industry at less than a trillion dollars. now it is growing like gangbusters. it allows the manager to lock up for many years. it may be great for their investors, but we are in a zero-sum world. at 12% or 13%, it probably is not great for the borrower. just to close on that, people three months ago were probably expecting rates to come down and really alleviate that pressure, but higher for longer, we are headed for some sort of collision course.

if we have that in conjunction to an economic slowdown, we will see which firms were good at private credit and which are not. it has been touted as this amazing thing. what is private credit? you are making loans to smaller companies. i look at it like this amazing force that will have hiccups in the years to come. >> one more question before i let you go. we have a major catalyst around the corner. as a massive investor in credit and somebody who looks at volatility closely, what are you thinking about, headed into that election cycle? >> it is coming closer every day and warrants our attention. if there is a change in the

presidency, there will be a change for is someone considered more unfettered or who has views on how to do things. it is really reflexive to think that if he is elected that there will be a lot of volatility. he is interested in the stock market. but the lazy does that, whether it is a new fed governor causing some short-term gain or long-term gain, certain firms are affected that way. when i think through that trump means volatility, the other side of me thinks back to 2017 when we had trump and kim jong-un and he was calling him rocket man and taunting him. there was not an elton john reference. it was at nine.

i was crying because i am a long volatility manager. the trump presidency, if it happens, it will be, in many ways unpredictable, but also remember that there was a lot of economic stability. having seen the access of that and the inflation, maybe we will not go back to that world and there will be volatility whether trump is elected or biden is elected. we are motivated for what is good for america. on the subjects of bonds. i'm not getting that political, just bonds. >> thank you so much for taking all our questions. >> you have been listening to my scene at the bloomberg invest even. let's discuss.

they said a lot of things there. we have been following this battle between weinstein and blackrock. did he say anything that tells us that black wrought -- west mayor in the middle of a series of elections, a meeting of these funds. meetings have taken place for a preliminary votes. in one of the funds, he has a very large position. a lot of the votes going his way. looking at the final tallies to see who else voted his way. who gets onto the board? who gets onto the board?

we need to waive the certifications and see how it shakes out. >> is he getting support from the community? >> seeing how retail votes is very difficult. retail often does not vote. seeing how the votes actually shakeout is important. he has a large position and he will vote his way. it is important to see who he brings on his side. blackrock disagrees with him eminently, as you would expect and has urged shareholders to vote down. it has become a pretty tense campaign throughout the proxy season. i sit is a fascinating one.

we will continue to follow the story. thank you so much. of course, do not miss other big names at 2:00 p.m. from the bloomberg invest event. you can watch it live on bloomberg. a few moments ago we got information from lisa cook saying that it would be appropriate to reduce interest rates, but at some point, she expects inflation to improve gradually this year before more rapid progress. i am joined by cofounder and coo joanna. thank you for joining. anything new in these comments? >> i do not think there is anything new. we heard surprising news from the fed on how they look at rate cuts. also their approach for the neutral rate in the future.

what she is saying is largely aligned with that. eight consecutive meetings where they have kept rates study. even though jun was notable, we did just come off of three or so months of data that told us that inflation was slightly rising, so we need more before we can conclude anything major. >> with the right strategy, we know rates are coming down. but is the right strategy to hold onto what you have right now? >> it can be. if you want to ride along, we feel that rates will be higher for longer. even if there is a cut, we are not expecting deep or multiple cuts. it means that you can be on the short side earning 5% in

treasuries right now, but what we think is more interesting and compelling as to take a look. growth has been resilient and company fundamentals have been resilient. the backdrop of this for corporations means that they are able to cover the interest rate ratios. they are able to support their bonds. we like people thinking about higher spread products and corporate debt. >> recently, we have had some volatility in the bond market. not glassy days, but the move index has been way outperforming for a long time. do you see that continuing? >> despite the rally from the last few weeks, year-to-date, most sectors are going to

underperform a bit. that is on the long dated corp. rates. i think there is more to come. i do not think it means that we will see a lot of rebound. we are expecting more of a softer landing. if that happens, the rates will be higher for longer and he will see some moderate growth, but not a runaway rally. >> thank you for joining us. that is joanna joining us. todd is planning to create a new firm and the next year that combines a number of his business is. he spoke with sonali basak. >> i do not think it suggests

that they are a bad asset class. we are seeing d banking going on . they are transitioning. if you look at them, they are a lot less levered than banks, so it is a preferred systems that are moving credit into lower lever institutions. but we think there is a big opportunity in credit. with partnership with our company. >> recently in the market, it was reported that you are looking at buying a fairly sizable credit firm out of europe and that firm has gone off to seek management buyout instead. what does this say about your ambition to consolidate the asset management industry? are you looking at more private credit firms? >> if you look out there again,

a lot of these businesses are semi between 30 to 50 billion. there -- they are trying to figure out what is their growth strategy? in partnership with an insurance company that is growing, scaling and reinvesting its capital into that growth, there is a lot of opportunity. the insurance company, as it grows, the asset manager grows. you get the benefit of the scale, the insurance company with more spread earnings and the benefit of the asset management growing and generating more fear related earnings. it is a great combination where through one dollar of equity capital, you get two benefits. >> it is an interesting environment for credit. even if you believe you got one rate cut, they are higher than

they have been in the last decade. what kind of opportunities is it creating for you, more broadly? >> i think there are a couple places that are really interesting right now. realistic credit is a good place to be because i think you see regional banks pulling back and i think that the value of real estate has stalled out a little bit. you're going to have to be in a position where you refinance these loans. you are making nine, 10, 11, 12%. i think those are really good rates of return. we see opportunistic examples. we bought $1 billion of loans out of the west bank. the regional bank tremor occurred. the banks were trying to figure out, how do we fortify

ourselves? they were selling assets. generally how that works is that they sell their best stuff first. we were able to get loans out of pack west and already, roughly 20% of those loans are out. it was a good opportunity to be well placed and to be able to move quickly. another place that we are excited about is this world where there is a bunch of these throwing, disruptive tech firms that may be raised money in 2021 or 2022 and they will need some growth capital. there is clearly value. one of the dirty secrets of credit is that businesses generally do not pay you back. what is the most important thing is to always make sure that the

borrower is worth more than the loan. it might be a rocky ride, but you will get your money back. this world where there are disruptive companies that have 100, 200, 300 million are looking to not raise equity capital because they raised it in 2021 or 2022. there is a lot of capacity to have a structured solution. we think there is a lot of opportunity with those businesses, so real estate credit and growing disruptive tech firms and opportunistic credit. there is definitely going to be some things that go wrong. to be in a position to move quickly, we are working on one right now. 50 cent on the dollar.

>> what goes wrong? there is a lot of concern about prolonged interest rates creating serious cracks in the market. where are you starting to see them? >> definitely places. if you look at the liability management exercises going on, there has been something like 30 to 35 of them. 14 or so have been repeat offenders. it did not end up solving their problem. they just kicked the can down the road. i think it is specific to industry. if you look back at the faults, faults rippled through industry. defaults generally spike in industry. everyone obviously talks about the real estate stuff.

i never found that anybody has been able to predict the thing that has been the problem, but generally the thing that is a problem is a surprise. i think we will see this sort out. but obviously, i think we are also living in a world where if you look back at time, it is not high. i think we will see, over time, the front end of the curve will come down and the backend of the curve will stay where it is. but i do not just see that the higher for longer is necessarily going to be the thing that crushes us. >> still ahead, paramount raising prices to boost profits and cut costs as streaming wars heat up. this is bloomberg. ♪

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>> welcome to bloomberg markets. time for our stock of the hour. paramount is raising. giving paramount a salivating. covering all things entertainment. should share events don't have taken the deal? >> well, time will tell. she obviously felt this was not the right deal for her when she turned down the offer. it was a controversial one. when there is such flux in the medium and, it is really separating between the winners

and losers. netflix and disney seem to be the winners and paramount and warner bros. seem to be struggling with their load and streaming. question increasing to $12.99 a month and increasing as more basic service to $7.99 a month, two dollars for the more basic service. will customers pay it? >> that is a 16% increase. this is getting up there now. paramount said their prices were competitive with the market, but everybody has been raising their prices and it is a test of how many services people will stick with. people watch a few shows that they want to watch, cancel and then move onto the next nervous. these price increases will not help that.

this is clearly about getting them to profitability. it is about the least profitable of the big services now. that is really a big focus for them. >> appears that shareholders are absent as well saying, be are in a cash opportunity situation. chris, we will continue to follow these stories. paramount down by more than 2%. in a day where we are seeing the market take a breather, certainly nvidia is back up more than 4%. we are seeing the major indices, particularly the nasdaq 100 back up after several days of declines. we also have that bond option coming up. we will see how that goes. the 10 year yield, the two year yield.

♪

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>> welcome back to bloomberg markets. let's get a quick check of the markets. a breather after some definite selling at the end of last week. the s&p 500 up about .2%. not all of the sectors are higher. many of them are lower. as you can see, we are seeing the index increase partially because it is the semiconductors that are moving. nvidia up 5.5%. taking more of them, they are not all living the same direction. it is up today but only up by about 3%.

some of the other areas moving higher, the cruise stocks. casting some gains after a pretty big selloff. today we had a bright outlook from carnival. that stock is up almost 8%. we could be up for a reversal in some of these sectors. for a closer look at equities, let's bring in abigail doolittle. abigail: let's -- we are taking a breather today, but we are at this year and last year. over the last five years, smoothing over further pandemic. the s&p 500 up 87%. up 159%. the chip index really outperforming. a rebound today from that brief correction. take a look at the games.

up nearly 3200%. some of that was the bitcoin excitement. given the degree of the games, one question is, billy see a robust blue market rally or some kind of consolidation? let's take a look at an interesting chart. the equal weighted index, something that we do not take a look at often. usually we do not draw a trend on top, but because the buying of the nasdaq 100, microsoft, apple, nvidia and so forth relative to other names and index. there is very defined resistance . in 2020, we briefly went over it. 2022 on that correction, we went below, but take a look at this

move up and out of this ratio. it begs the question of how much further can they go? or when is more likely the real question. when will he see a return and really be going dramatically below a? >> abigail doolittle is staying with us as we look ahead at what is in store for us in the markets. focusing on the global stock market analysis. samantha, you must get these questions all the time. is this time different? >> might tell we are having profit taking. -- right now we are having profit taking. the most part, the operation that -- ended last friday. it suppresses volatility. we are into the end of the

quarter this week. it is very extended, this ecosystem of stocks. they are having some pullbacks and profit taking. we noted in the terminal that you have dell ceo doing some large insiders selling with the ceo. that is not necessarily a top call. they did the same back in 2019 and stocks continued from there. and taking some chips off and we are going into a blackout period . many are going to be on hold. the treasury is kind of on its low for liquidity and put lots of stuff together. you have the end of month, end

of quarter profit taking on very extended ai tech stocks that were due a little pause. >> how much of this move is related to yields this month? quite frequently we see that yields our repricing because of fed comments and we see a move in the market. is any of that due to the fed that the fed might be changing its mind? >> i think there is an underpinning that the macro is getting a little concerned with the euphoria. forward earnings have been very robust, feeding on a baseline that the economy is growing and therefore earnings will grow. jobs have not percolated to a danger level where the fed would have to intervene, but we are

starting to had higher. this pause mandate -- other central banks globally have started to cut. this is the big question. are they cutting political expediency or are they sensing that there is a reduction in global demand of credit? that is typically a precursor as to why a central bank will begin a fed cutting regime. they start to see that global demand of credit rollover. we will need to watch banks this earnings season to see how they perform on lending, net interest margin, to see if we have signs of more bearishness or concern to this advance. question interesting points that the overall picture is tightening, given that others are cutting. when the fed cuts next, if you

were to guess right now, based on all the different macro point and class studies that you do, do you think that the fed will see the next couple of cuts if they come as true accommodation because they are needed to support a sagging economy? >> i think we will get a tell if it drops below, which is short-term bullish for equities. it would also indicate that we have more global demand of credit falling. that would spare at least accommodation talk at the next july meeting and potentially a move sooner than what is priced in, which has been by the fed's own admission -- beginning of next year. most are focused on that narrative of how may cuts have

been priced out. in time, we will pull that forward. the unemployment is starting to percolate higher. >> that would be a real shift in narrative as opposed to just the cut that people are thinking about after inflation spikes. that chart is from you. wonderful chart. it shows how extensive things are. the waiting with those names. when i put that with global credit tightening, i know you say it is a process. you also watch margins. talk to us about the other key tells. >> right now, the bullish backdrop is that we are in an election year. it will help to support this market and we will be a lagging

impact for longer. it starts to bite about 18 months later. margin debt as it relates to a tell is typically rolling over when we have more confidence that the economy is decelerating. we are looking at gdp for q1 on thursday. we still have a slow growth backdrop. when it rolls over, it is a sign that they are selling things. the fundamentals start to matter a lot more. it has really helped to disguise and camouflage the weakness in the market. they are below 2009 lows. we still had that chart that you mentioned.

it will have a reversion. we'll have to see how it does once it stabilizes. it could pick up speed this summer. volatility typically bottoms in july. there is some shake and bake to look forward to. >> samantha, thank you so much. abigail doolittle with us as well. if you missed weinstein earlier, comments about his fight with blackrock. we go back to bloomberg invest. this is bloomberg. ♪

>> welcome to bloomberg markets. bloomberg invest is underway with some of the biggest voices on wall street. sonali basak spoke with him earlier. she joins us live from the event. some fiery language. horrific governments from an incredible firm is one of the comments that i took away. what stood out to you from your conversation? >> boaz weinstein come along known as being a credit investor -- this is a reinvention of sorts. he has been targeting closed-end funds. he has targeted 10 blackrock funds and sought to swap directors.

we know the results of one of those. take a listen to what he had to say. >> it so happens that the fund that has gotten the most of my attention just had the voting closed at 11:00. i can say preliminarily -- i did not count the votes for the announced that they got more votes than the blackrock nominees and four. more than two times as many votes as blackrock . when you win an election by two p1, the voters have spoken. the anxiety is -- if more than two thirds voted one way, blackrock can no longer say that they purport to speak for the shareholder to create divisions. the shareholder as spoken. we have won. it is us to them and they have

put into place election rules that would make vladimir putin blush. >> a big setback. this is one fund that you said you are voting for today. but there are 10 funds. what is it that you want out of this strategy? blackrock has locked up capital for a longer period of time. what is it that you are trying to accomplish by targeting them? i know that you target them when they are trading below their net asset value. what is the endgame? what else do you want? >> etf's can be sold at asset value or the market maker can redeem them for net asset value. the manager will sell the assets. closed-end, you are trapped. they could be around for 100 years or 200 years. there are periods where the investors do not want them.

there is not a manager more than blackrock. it is not personal. i'm not looking to not be best ease. i'm just looking to make my investors money. if the discounts are persistent and they are after year, you have the power, like in normal activism to turn that back into a dollar. if you change it into an open-ended fund or the manager agrees to buy back shares, just like franklin templeton did, the investor has a chance to go from 85 to 100. it is 15 over 85. it is a fund that lit its investors money on fire. the last three years we have more or less been in able market. they have lost more than 50% of

their capital from the stock prices going down and from discounts going up. it has lost billions of dollars and here we have investors resoundingly saying, we want change at the board level, but the party would be shocked to hear is that they have decided to set election rules such that in order to replace the board, you have to get 50% of all the shares. preliminarily, they got 51 to vote. we would have needed 50 out of 51. that kind of math makes it impossible but it makes it impossible for them to put anyone else on the board because they would have to go through their own arcane rules. the blackrock nominees sit on approximately 70 different boards. how can they do their jobs at 70 different boards. at j.p. morgan, they sit on one

board. it actually prides itself on raising money to the provide good governance. >> that was just part of the conversation. remember, this is just one fund that they know some of the voting for. we have to see what blackrock says as well. when i asked him about whether this got personal, he said yes. he believes this is a matter of justice. it also draws bigger questions to liquidity for retail investors. they have all kinds of different vehicles. it really raises the question about whether funds will be bigger investors should they may -- should they raise more

dollars towards activist campaigns. >> it is a fascinating battle and we will continue to follow it. it has been coined of -- kind of quiet. what did he say about later on in the summer? >> he was very funny about it. of course they still have those strategies, but there is an expectation and he and others expect accidents in the market. the idea of rates staying this high could create problems moving forward. i point to what blackrock has been responding to. they allege that it is looking to be an activist hedge fund at the expense of retail investors. the story is not over yet. >> catch her and more of our

coverage at the bloomberg invest coverage. let's check the markets because we suddenly had a reversal for the s&p 500. we did dip into negative territory. many of them are chip stocks. this is bloomberg. ♪

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priced in. the reason why i am more positive is i remember when i invested in apple when the iphone first came out. three use people told me, why are you invested in apple? an incredible run. it might be in -- might be a good sign. >> >> google, facebook and etc. -- others say it might grow. quest sometimes out of nowhere, a new company --

>> sometimes out of nowhere. quest what is coming behind ai that will excite tech investors. quest that before i answer that there is an onion effect and you can feel that there is a lot going on with ai.

ai will be this amazing, artificial brain. what i wonder is, what you put that brain inside a robot? we would then need to live side-by-side with humanoids. i do not know when it happens. it would be pretty exciting. >> do continue to watch. i want to mention the auction i have coming up. in advance of that, the two year yield. of almost three basis points on the session. -- up almost three basis points on the session. we had the heavy trading, going into the lunchtime our. that does it for bloomberg markets. this is bloomberg.

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>> live from washington dc. >> targeting keepsakes.

welcome as the president's team tries to knock down a campaign against jill biden's age. kailey, you cannot go on to social media without seeing a montage of joe biden looking old. kailey: either wandering off or pausing in a speech. joe: they see you on tiktok the next day. it will be an interesting strategy for oath candidates to deal with.