00:00So much is happening because of AI, especially in debt with the huge issuance we're seeing from the hyperscalers.
00:06We've got another $25 billion that this market easily took up from Google just this week.
00:11And at the same time, we're going to get more issuance from the Treasury next week.
00:14What are you thinking about where you want to place Bink just given the sheer amount of issuance that continues
00:19to hit this market?
00:21You know, Danny, I'll say one thing about, you know, because you've had a backup in rates, you're able to
00:26hit your yield targets.
00:28I mean, talk about we're hitting almost seven. I mean, six, you know, high sixes in terms of yield.
00:32And so a couple of things we've been doing is you actually don't need to go down in credit quality.
00:35You actually don't need to go that far down in terms of the liquidity in the portfolio.
00:39So, you know, we've been keeping it, you know, we've been adding a bit in terms of European fixed income.
00:45You know, I think emerging markets are interesting, particularly if you assume the dollar is not going to be moving
00:51aggressively.
00:52You made the point right. I think investment grade credit, given the amount of supply we're going to see, data
00:56center, hyperscaler.
00:57Investment credit credit is not that interesting at all.
01:00But in the securitization market, you know, they've securitized assets both in commercial real estate, ABS, RESI.
01:08You know, those markets are in pretty good shape.
01:11So, you know, we're in an environment where we don't feel like we've got to stretch a lot.
01:14You know, these real rates that today give us an amazing ability to keep our yield up without really stretching.
01:20We're running Bink now at an average rating of A minus.
01:24You know, you're hitting high sixes like that pretty good today.
01:27So I think we're trying to be in bonds.
01:29We're trying to be as boring as you could be and, you know, take the risk in equities, which, you
01:35know, have a little bit of volatility to them, particularly single name.
01:37A little bit less risk maybe in the bond market.
01:41But there's such an appetite, I guess I would say, for debt, for the hyperscalers, et cetera.
01:51How's that affecting how you can sell all of these bonds?
01:54I was really surprised yesterday with the Google Alphabet offering that it was so oversubscribed.
02:02You know, Mike, we're living through something, and so one of the real benefits to all the financing that has
02:07to come, data center, hyperscaler, U.S. Treasury, U.K., Japan, is we're actually going through a pretty historic demographic
02:16that is supporting this demand for yield.
02:19Insurance companies, life insurance, pension.
02:22So it's amazing.
02:23If you price assets right on the debt side, you can place an awful lot of debt.
02:28Now, that being said, I mean, the hyperscalers have clearly widened quite a bit.
02:32And so you're getting the levels.
02:34I say these real rates, if you're a pension today and think, gosh, I can defies a good portion of
02:40my liability stream at these real rates, it brings a lot of people in, particularly if you get some spread
02:45on it and you're watching that play out.
02:48Like I would say one thing, I mean, the supply is not going to stop coming.
02:50And, you know, next week we get a lot of Treasury supply.
02:53So, you know, in terms of interest rate exposure, we feel like we don't have to be in a rush
02:57to add much interest rate exposure and just like clip coupons.
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