Bloomberg Businessweek

The people, companies and trends shaping the global economy.
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Stephen Nesbitt was on no one’s list of Wall Street heavyweights when he bumped into a thirty-something salesman pitching the next big thing for wealthy investors: private credit.
Nesbitt — who, as it happened, had written a book on private debt — took the idea and ran with it.Within a few years, he and his son Blake transformed their modest consulting business, Cliffwater LLC, into an unlikely giant. Their strategy: rather than sweat the details of every direct loan themselves, they’d piggyback on the firms that did. They’d also invest in industry heavyweights, creating something akin to a fund-of-private-credit-funds.

Now the father-and-son team, who rode private credit on the way up, risk falling hard on the way down. As investors in private credit funds rush for the exits, Cliffwater has become one of the biggest question marks in the $1.8 trillion industry.

The worry isn’t so much that private loans will go bad all at once and crush the funds where Cliffwater has invested. It’s that antsy investors will keep asking for money back, prompting Cliffwater to dash for cash itself — instigating a vicious circle of redemptions and markdowns.
Concerns center around the $33 billion Cliffwater Corporate Lending Fund, the largest of its kind in private credit. It’s what’s known as an interval fund, a type of closed-end vehicle that isn’t traded on an exchange but rather promises to buy back shares from investors at set intervals, usually quarterly, at net asset value. Cliffwater is legally obliged to buy back at least 5% every quarter if investors ask.That promise was a key selling point in good times. “Liquidity is the first-, second- and third-most important thing,” Blake Nesbitt emphasized at an industry roundtable this month.

Today's show features:

• Bloomberg Leveraged Finance reporters Ellen DiMauro and Olivia Fishlow on their Big Take story about Private Credit
• Ray Takeyh, Senior Fellow for Middle East Studies at Council on Foreign Relations
• Former Commerce Secretary Wilbur Ross
• Drive to the Close with Emily Green Ellevest Head of Wealth Management

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Nicolai Tangen, boss of Norway's sovereign wealth fund, visited the Middle East and was struck by the area's dynamism, but hours after his departure, the region erupted in a war. The fund is planning for potentially bleak scenarios, including the return of inflation and geopolitical fragmentation, which could have direct consequences for the fund and implications for the stock market. For more, Carol Massar and Tim Stenovec spoke with Bloomberg Opinion Columisnt Lionel Laurent

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The people, companies and trends shaping the global economy.

Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.

During an all-hands meeting at Apple in January, an employee asked about a spate of executive moves. The company’s chief operating officer recently retired, the chief financial officer and general counsel took smaller roles as a way to prepare for their own retirements, and in a single week in December its heads of artificial intelligence, user interfaces and environmental initiatives all announced their departures.While part of the exodus was related to Apple Inc.’s well-documented struggles in AI, it also reflected a logical transition at a company that turns 50 on April 1.

Apple stock has made everyone at the top of its org chart fabulously wealthy, and many are entering the stage of life that often inspires people to prioritize finally spending some time with their families instead of the next generation of iPhones. In his response to the employee’s question, Tim Cook, the company’s 65-year-old chief executive officer, struck an atypically reflective tone. “When people get to a certain age, some,” he said, “are going to retire,” letting the word “some” hang out there in a way that suggested he wasn’t talking about himself, drawing laughter from the audience. “The thing we have to do is make sure that Apple moves on” and reaches the “next level and the next level and the next level.” Cook added that he spends “a lot of time” thinking about “who’s in the room” in 5, 10 and 15 years. “I am obsessed with this.”

Cook, who’s run Apple since taking over from co-founder Steve Jobs in 2011, probably doesn’t expect to be in the room himself for another 15 years. While he’s given no indication of an imminent transition, he’s made it clear he wants his heir to come from within the company so he can serve as a mentor. The central candidate is John Ternus, senior vice president for hardware engineering, who oversees development of the devices that generate roughly 80% of Apple’s revenue. At 50, Ternus is also younger than many of the company’s other senior leaders, meaning he could be in the top job longer.

Ternus has spent about half his life at Apple. He cut his teeth developing computer monitors, oversaw product design for the original iPad and eventually took over development of the Mac. Since getting the top hardware engineering role in 2021, he’s overseen an expansion in Apple’s product lineup, improving quality and focusing on functional improvements around battery life, performance and connectivity. Earlier this month, when Apple held an event in New York to announce the MacBook Neo, a $599 laptop, it was Ternus, not Cook, who did the big reveal. The next day, Ternus also appeared on Good Morning America to talk up the device, the type of media appearance Cook has generally done himself.

Today's show features:

• Mark Gurman, Bloomberg News Managing Editor for Consumer Tech
• Onur Ant, Bloomberg News, Middle East & North Africa Managing Editor 
• Jayati Bharadwaj, Head of FX Strategies at TD Securities
• Siddharth Phillip, Bloomberg News Chief Correspondent for Global Aviation on recent issues surrounding US airlines

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Stocks and bonds rebounded after President Donald Trump said the US and Iran had “very good” conversations about an end to the conflict in the Middle East.  
President rump said strikes against Iranian energy infrastructure and power plants would be postponed for five days following the start of talks with Iran to end the war.  
For details on this development, Tom Keene and Paul Sweeney speak with Bloomberg Middle East Reporter Joumanna Bercetche, Silvercrest Asset Management Head of Investment Policy & Strategy Robert Teeter, and Veda Partners Co-Founder Henrietta Treyz.

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The US charged Yih-Shyan “Wally” Liaw, a co-founder of Super Micro Computer Inc., with illegally diverting Nvidia Corp.-powered servers to China in violation of US export controls. Liaw and two others allegedly sold the hardware to a Southeast Asian company and coordinated for its ultimate shipment to Chinese customers, and they made efforts to evade scrutiny by auditors from both Super Micro and the US government. Super Micro said it is cooperating with US authorities and has put Liaw and another defendant on administrative leave, and the company stated that the alleged conduct “is a contravention of the company’s policies and compliance controls”.

For more Carol Massar and Tim Stenovec speaks with Bloomberg Legal reporter Bob Van Voris.

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The people, companies and trends shaping the global economy.

Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.

US officials say the White House is sending hundreds of Marines to the Middle East as it weighs a plan to seize Iran’s Kharg Island oil export hub. Deploying even a small number of troops on the ground in Iran carries huge risks for President Donald Trump.

Any effort to seize and hold Iran’s energy facilities would put US troops in far greater danger than they’ve already been exposed to so far in the conflict, which has seen 13 US fatalities to date. It would also add to the cost and scope of the conflict beyond an air campaign.

Just as charged would be the symbolism of American troops landing on Iranian soil and the accusation that Trump — who shot to popularity in part by criticizing the open-ended wars that dogged his predecessors — might be starting one of his own.

He said deploying a Marine Expeditionary Unit there would have “substantial risk of casualties, and with no obvious next step as to how such an action really accelerates regime change or even Iran’s willingness to negotiate an end to hostilities.”

Today's show features:

• Jeff Mason, Bloomberg News Washington and White House Correspondent
• Adam Farrar, Economics Senior Geoeconomics Analyst for Asia-Pacific
• David Woo, author of Merry-Go-Round Broke Down: A Novel of Guilt, Greed and Globalization and Founder of David Woo Unbound
• Ian McGinley, Partner at Sidley Austin and former Director of Enforcement at the Commodity Futures Trading Commission

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The sense of growing hostility toward business leaders and others in power is everywhere, coinciding with dueling populist political movements, and has been heightened by the refusal of many former Epstein pals to take responsibility for associating with him. The Epstein files have exposed a code of elite silence around a sex offender, and many of America's business icons and politicians must stop minimizing their roles in what happened and start making real amends to move forward.

Max Chafkin, Bloomberg Businessweek Senior Reporter and co-host of the Everybody’s Business podcast writes about how the Epstein files fallout is a crisis for elites —and an opportunity. He speaks with Bloomberg's Carol Massar and Tim Stenovec.

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The people, companies and trends shaping the global economy.

Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.

Each week the world’s largest liquefied natural gas plant remains shut, the world loses the equivalent of enough energy to power Sydney’s homes for an entire year.

Qatar’s Ras Laffan plant closed earlier this month after an Iranian drone attack, the first interruption to supply in three decades of operation. Now, after further hits — in retaliation for an Israeli strike on the vast South Pars fields on Wednesday — the wider complex has suffered what Qatar describes as extensive damage.

The latest assault damaged t​​​​​​wo of the plant’s fourteen production trains, with repairs expected to take years, people with knowledge of the matter told Bloomberg. That will put severe energy strain on economies across the world. For emerging nations — vital growth markets for LNG — a second gas calamity in four years is already destroying industrial demand, perhaps irreparably.Three weeks of conflict in the Middle East have upended the entire energy supply chain. With the vital Strait of Hormuz all but closed, gasoline and jet fuel prices are surging, cooking gas shortages are triggering fistfights in India and farmers are fretting about diesel and fertilizer. But with virtually no spare capacity, no strategic reserves and no easy replacements, LNG may be one of the most acute pain points in an expanding crisis.

The longer this continues, the only solution is for the world to use less gas — and that’s a major setback for a fuel promoted by the industry as a reliable and affordable bridge from dirty coal to full reliance on renewable power. Without gas, power plants curtail output, fertilizer and textile factories shut. The ripple effect from a long-term shock could be even more significant than the 2022 energy crisis, when Russia’s invasion of Ukraine forced dramatic changes in global gas flows.
Today's show features:

• Ruth Liao, Bloomberg News Reporter covering Liquefied Natural Gas
• Sheila Kahyaoglu, Managing Director in Equity Research at Jefferies
• Matt Diczok, Head of Fixed Income Strategy for Merrill and Bank of America Private Bank
• Drive to the Close with Mark Travis, CEO of Intrepid Capital

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The people, companies and trends shaping the global economy.

Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.

Federal Reserve Chair Jerome Powell said he plans to stay at the central bank until after the Justice Department’s investigation is complete.

“I have no intention of leaving the board until the investigation is well and truly over, with transparency and finality,” Powell said Wednesday at a press conference.

His comments marked the first time Powell has given any public indication that he intends to continue serving his term as a governor, which runs until 2028, after his term as chair expires in May. Speculation he would do so has increased in recent months amid a government probe into the US central bank.

The DOJ in January issued subpoenas to the Fed as part of an investigation into cost overruns in a building renovation project. In a statement at the time, Powell called the reasons for the investigation pretexts and said the probe was really triggered by the Fed’s refusal to set interest rates based on President Donald Trump’s demands.

The subpoenas were blocked by a federal judge earlier this month, but the DOJ said it would appeal that decision.

Today's show features:

• Greg Peters, Co-Chief Investment Officer and PGIM Fixed Income
• Kalshi CEO Tarek Mansour and reaction from Bloomberg Cross Asset Reporter Denitsa Tsekova
• Hendi Susanto, Portfolio Manager of Technology at Gabelli Funds on Micron Earnings
• Jennifer Welch, Bloomberg Economics Chief Geoeconomics Analyst, on where China stands amidst the Iran War

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