JPMorgan Chase & Co. (JPM) Earnings Call Transcript & Summary

There is your challenge, ladies and gentlemen. Let's call this meeting now to order. Please do welcome to the stage the Chairman of the Board, Governor of the Public Investment Fund, his Excellency, Yasir Al-Rumayyan and Secretary of the Board, Co-Founder and Co-Chairman of Carlyle, David Rubenstein, together with their Board members. The Board is now in session.

So welcome to the panel, and thank you very much for having us here. And we have 11 people on the panel. We have 75 minutes. So that means everybody gets an hour. For all of you who think you should be on this panel, we only have 11, we were thinking of having 12, if we had 12, you would be on the panel. So just imagine that, you missed it barely. But thank you all for coming, and I want to thank you for hosting us. And let me just say at the very beginning, I don't think there's ever been a panel with this big assemblage of financial talent and skill as you've been able to put together here. So thank you for doing this.

I'll try to go around alphabetically generally, but why don't we start with our hosts. So Yasir, tell me on AI, and I'd point out AI is a major subject you're interested in. I noticed that Saudi Arabia has in both words AI. Now maybe that's a coincidence. But AI is obviously something you're focused on. And how do you think that you can make AI and can be made inclusive so that people aren't left behind? And are you 100% convinced that AI is going to be a benefit for society as opposed to a detriment?

Thank you. I mean AI started I think back in 2014, but the generative AI, which is the new thing, and it requires a lot, it requires the infrastructure, which is the chips. It requires the landforms, the data centers, and all the other ads to work with it. I mean, now what we're seeing with the ChatGPT and the other AI platforms is just a tip of the iceberg. This is just the beginning. So we need to get all the companies that generates the apps with the companies that generate the chips, the data centers to work with the governments to have some kind of an accord or some agreement on how to use and harness AI for good. And to do so, we have to be more inclusive. We cannot just make the AI as an exclusive thing. So you have many models, the close model and the open model. And we have seen some of the closed model, the close source model that is either certain ideology or politics plays a lot. And there is a big difference between what the internet is today and what AI is doing. So it has to be a collaboration, countries have to work to have some kind of a strategy or agreements, not only countries, but I think supernational organization like the United Nation or the World Bank or some of these big entities, they have to work together with different countries on making AI more inclusive.

So you pointed out in your opening remarks, AI consumes a lot of electricity. In other words, to make AI work, there's a lot of electricity that has to be consumed. Are you convinced that the effects of all the electricity that's generated all of the -- and the change that might be affected by AI is worth the benefit. In other words, is it really going to be beneficial for society to use as much additional electricity to get the benefits of AI.

It is. No doubt on my mind. I mean generative AI, it's the second phase of AI, then we will go maybe to the super AI sometime in the future. So all of this would need huge data centers. And that's why we're talking to everyone, and we started building so many data centers and the world need more data centers. Now the problem is, to your point, the power consumption with this data centers. And as I said in my opening remarks, you will just one day of ChatGPT learning is the equivalent of about 26,000 homes in the U.S., which consumes a lot of energy. . So we have to work on how we can balance the pros and cons of the use of AI, what you do in, for instance, in Saudi Arabia, I think it's a good solution. We and our targets by the year 2030, we want to have 50% of our power generation to be based on renewable and the other 50% will be based on gas, which emit less than liquids. So we have to invest more and the renewable energy. If you look at the targets by 2040, I think it's $283 trillion needed to be invested cumulatively from the year 2020 until 2040, we haven't achieved much. What we have achieved so far is like $1.7 trillion last year or $1.2 trillion, so is that means we have to pace our investments for deployment by $5 trillion in annual base globally.

Final question at this point. You are the Chairman of Saudi Aramco, which is the largest corporate oil producer in the world. You're also the head of PIF, which is one of the largest sovereign wealth funds in the world. As the head of PIF, you're responsible for producing roughly 70% of the alternative energy that is supposed to be produced in this -- in your Kingdom, yet you're also producing enormous amount of nonalternative energy at Saudi Aramco. How do you balance the two? Every day, do you wake up and say, I'm going to do a little bit of alternative energy. I'm going to do some for carbon energy. How do you balance this?

That's a great question. Actually, what we're doing in Aramco is should we -- all the oil and gas companies should really consider everyone. We are the lowest matter when it comes to the oil and gas production by far, if the other oil and gas companies start doing what Aramco is doing in their production, I think we can reduce the emission by big numbers, I don't remember the exact numbers but it's the equivalent of 1/3 of both residential and commercial emission in the world. . So if we can do that, that will be a great thing. But the problem that most of the oil and gas companies have, they're not incentivized enough by their governments to do something like that. While in PIF, we are doing 70%, as you said, of the renewable energy. We're trying to balance things. And we're working a lot with Aramco, they're co-investing with most of our initiatives, in addition to what they're trying to do now and the blue hydrogen and the sequestration, which will reduce all the emissions. So I don't see any contradiction of what I'm doing in both.

As the head of PIF, do you ever have an experience where somebody comes to you and doesn't tell you they have a great investment idea for you to invest in. Do you ever have that or somebody doesn't give you a great idea when they're talking to you, you feel like...

I'm sorry, I don't understand this question. Of course, no, I do understood. Everybody comes to us, of course, with the greatest idea and the best of history. And we really inviting them to do so, but we do have a huge process, big process on filter in all the things, looking at the benefits versus the risk. We've done, of course, really some great investments, and we're really proud of it. We have less failure investments, which is a good, that means our system and framework and governance is working.

Let me turn to Ray Dalio. Ray, you've built the largest hedge fund in the world, Bridgewater and you're also in your new career also an author. You've written a number of New York Times best-selling books. In one of your recent books, you talked about 5 forces that are affecting the global economy. So can you succinctly tell us how these forces are going to move the economy forward in the next couple of years or so, adversely or positively?

Adversely, obviously here but positively potentially. Yes, as a global macro investor for the last 50 years, my job has been to bet on what is going to happen globally macro. And what I learned in my lifetime is that many of the things that surprised me happened was because they didn't happen in my lifetime, but they happened many times in history particularly in the 1935 -- 1930 to '45 period. So these 5 forces have always interacted, and I think everything that we're going to talk about today will be related to those 5 forces and they interact. And those 5 forces, of course, are the debt, money, interest rate, economy force. The second is the internal order/disorder force. In other words, the internal conflict that we are having today and the debts that we are having today are the largest since the 1930 to '45 period. And also you go back in history, and you've seen enormous amounts of those. They have implications. The third great force, of course, is the international geopolitical force. Two great powers, that arrival powers. And then, of course, the fact that there isn't a single world order, there isn't a single world power. It's very different than in 1945 when the new world order was created because you have a war, a dominant power comes out or a dominant powers and they set the rules and everybody goes by the rules. Well, this is a very different world. And so those 3 forces, I wanted to examine those over the last 500 years because to think about rises and declines of reserve currencies, rises and declines in empires and so on, I needed to get the perspective of that. And I discovered that the other two great big forces were acts of nature which drought was in pandemics have killed more people than wars and are certainly a dominant force at this time. And then the fifth great force has always been man's inventiveness and technologies. So we have these 5 forces interacting. So everything that we're going to talk about will be related to each one of those. And I think if we step back and we put that -- each one of those in a historic perspective, say, how are there degrees of influence compared to those in history, the largest wealth gaps since the 1930 to '45 period populism and so on. So those are the 5 forces. I think if we're looking at them and their evolution, it's like watching a movie play out over and over again if you have that historical perspective, and as we're looking at it, what we're seeing around the world today as we go into the elections that we're going to see in the United States, which are going to be over irreconcilable differences about wealth and power. And then we look at the geopolitical situation. And then we look at the climate issue, the climate issue is going to cost us, to estimate it between $5 trillion and $10 trillion a year in a world GDP that produces $100 trillion. So anyway, I think that those 5 big forces as we look at -- if we look at historical perspectives and analogous periods, I think that, that will help us, I think we have to be concerned about that dynamic that's taking place.

Put it simply, for next year, are you optimistic about the global economy or pessimistic?

Pessimistic.

Pessimistic?

Pessimistic about -- look, you have political, you have a monetary, you have a conflict type of environment. At the same time, you have the greatest inventiveness. We talk about this fabulous technology development that has so much potential to produce wonderful things, and then I think also it could be a problem. So if you take the time horizon, the monetary policies that we're going to see and so on will have greater effects on the world and you look at the world gaps, so it's difficult to be optimistic on that. And I think -- now the real issue, I think, is how we deal with each other, okay? If we -- it was said earlier very well peace, if we can keep a peace, if we can have a healthy competitive environment without having a war with each other, we will be in good shape and we'll make that adaptations.

Okay. Jamie Dimon, you have led for quite -- more than a decade, the most profitable and largest market cap bank in the world, JPMorgan, so are you optimistic about the economy going forward? And are you as obsessed as many people are in the financial world about what the Fed is going to increase interest rates again or cut interest rates to make that much difference to the economy as you see it?

Yes. So David, thank you. Thank you for having me here again. And I'll give you the optimistic thing. I think it's wonderful. I've been coming to Saudi Arabia since 2005. And what's changed here is so dramatic and so good and not just what they've done inside Saudi Arabia but trying to bring peace to the Middle East. I'm pleased in spite of what happened in Israel, I urge you all to keep up that effort. It is the only way to get there with some leadership from Saudi Arabia for all the folks in the Middle Eastern. And I'm generally an optimist. I think you'd be foolish not to look at some of these things taking place today in Ukraine, Middle East. Obviously, my heart goes out for Ukraine, but also it's affecting oil, food, food prices, gas prices, migration, potential starvation is probably the most serious thing we faced. And I hear people talking about ESG all the time. I just would put on your table, the most serious thing facing mankind is nuclear proliferation. If we're not sitting here 100 years now, it will be nuclear proliferation. It's not our climate. And so I think when you look at the geopolitical situation, it's complex as we've seen, I don't know if it's 1948 or 1938, obviously, all hope it goes away. I think it's a little bit of wishful thinking. It's going to take real leadership on the part of many people out there. And then I look at the financial situation, the fiscal spending, which is more than -- I'm talking about the United States, but it's almost true around the world. It's more than it's ever been in peace time by a long shot with the highest debt levels we ever had by government. And this is kind of uninhibited feeling that central banks and governments commanded through all this stuff. I'm cautious. I don't think it makes a piece of difference whether rates go up 25 basis points or more, like 0, none, nada. I think whether the whole curve goes up 100 basis points, I would be prepared for it. I don't know if it's going to happen. But I look at what we're seeing saying more like the '70s, a lot of spending, a lot of it is going to be wasted. I'm in favor of this whole ESG effort. On the other hand, if you look at the way we're going about it, it's almost like governments want to whack-a-mole and force it but no carbon taxes, no rational way to go about it. It would be more important. In the United States, for example, you can't build pipelines to reduce coal emissions. You can't build -- get the permits to build solar and wind and things like that. So we've got to get our act together. I'm hopeful when I listened to all the R&D, we will make the breakthrough we need to be climate, but it's going to be later and longer than it should be to their own basic in confidence. I also want to add one last thing I'm telling this from Bob Gates. To fix this, it's going to take real leadership from the western world in particular, America, but leadership, which is not just military, diplomatic development, finance and the development, finance, I know Ajay is still here. What we need in development finance, dwarfs what governments can do. So it can't be done without private capital. And private capital isn't going to come in if they -- you build something they just take it from a government or something like that. So we have a lot of work to do. It's one of the reasons I think these events are positive. But I would be quite concerned. And the other thing about when you look at economics, how do you think people prepare for possibilities and probabilities not coin one course of action since I've never seen anyone call it. I want to point out that central banks 18 months ago were 100% dead wrong, okay? So maybe humility about financial forecasting, I would be quite cautious about what might happen next.

It's been said, I think you've commented on this that you would like to be President of the United States if you could be appointed maybe not run for it. Do you think you're old enough, you're only in your mid-60s. Do you think that's old enough to be present the United States?

I'm still maturing.

Larry Fink has started and he still runs the largest asset management firm in the world called BlackRock. Larry, do you see a tidal wave shifting to fixed income investments from equity investments? And do you think that will continue for quite some time? Or do you think that's really not a tidal wave and people are basically still investing in equities as much as they did before?

Well, again, thank you for being here. It's always great to be in the Kingdom. As Jamie said, the transformation of the Kingdom in the last 7 years is totally heartwarming. And I would also just want to echo as capitalist, as business leaders, we all have a responsibility to speak a little louder today in a polarizing world, in a polarizing world where we're seeing terrorism, we're watching 2 wars and here we are trying to talk about how to build -- make it a better world, that's what this AI is about. And so we also have to then focus on the unpleasant parts of what's behind the world for better growth. So we all have to be better humanitarians and we all have to be more focused on how to make sure that the political side of the world understands that peace and prosperity does work a lot longer and does shape and list more human being to middle class and higher standard of living and conflicts actually create much more global problems for the majority of the world. We are going to see higher interest rates, David. We're going to see higher interest rates for longer. This reminds me of the '70s. I think some of us were on trading, yes in the '70s. And the '70s was all about bad policy. Today, it's about that policy again. And big macro shifts, as Ray spoke about it. Polarization, the politicization of supply chains. The fragmentation is a big result of it. That is inflationary. Let me -- also I think populism is very inflationary because we respond to the immediacy at the moment, we don't talk about long-term issues. As we see more and more countries move to the far right, we see more threats towards immigration, the lack of immigration is very inflationary, especially in economies like the United States, I'm talking about legal immigration. And so -- and then we have -- we've had a government, I'm talking about the U.S. now. And in 2000 with an $8 trillion deficit. And today, we have a $33 trillion deficit. So the deficit is growing by more than $1 trillion each year over the last 23 years. That is highly inflationary. The balance sheet of the Federal Reserve is highly inflationary. And so all these different measures are much more structural, much more difficult. So as a result of that, interest rates are going to remain higher. Opportunities for investors are going to be able to be very patient. You could do nothing and enjoy a positive return, right?

So are you expecting a hard landing or a soft landing in the United States or you just can't project?

I would -- I do not -- we will not see a hard or soft landing in 2024. The amount of fiscal stimulus that is just entering the economy, which is very inflationary. The Chips Act, the IRA and the infrastructure acted about $970 billion. The largest peace-time, non-pandemic moment of fiscal stimulus. At the same time, our Central Bank is trying to arrest the economy. And so that's just hitting the J-curve. And you see in labor settlements right now, what's going on in labor talk, 20%, 25% increases in wages. So I don't see a problem. But I do believe the federal reserve is going to have to raise rates higher, which probably will mean by '25. We may have a soft, we may have a hard lending. That is the only way I see how we're going to be arresting this. But I don't expect it anytime soon. I think the power of the economy, the power of the consumer, that Jamie talked about a lot is giving me comfort that the economy is fine. Obviously, other parts of the world, the European economy is facing much more severe headwinds. And the one thing that I would say about the U.S. economy, we have a spectacular capital markets. We have the greatest capital markets in the world. Every country is trying to build their own capital markets. I had many conversations yesterday about how the Kingdom is trying to raise its capital markets. In our capital market, we have the most unique mortgage market. 98% of all mortgages are fixed, 30-year fixed. So the transmission of high rates in the U.S. economy just takes much longer to impact the economy. And so that transmission is not being impacted as fast as the transmission of higher rates in other parts of the world. That's in Europe where they have more 5-year fixed and floating, especially in the U.K. you see the transmission of higher rates impacting economies faster. So we -- and I'd just say one last thing, intersecting what [indiscernible] said, intersecting what Ajay said, when you intersect what technology is going to do, robotics in the intersection of AI and robotics. We are going to have a boost in productivity. And that is going to be the next wave for deflation. That is not going to happen anytime in the next few years. So I'm more optimistic today than I was 4 years ago. The transformation in medicine, how we are shaping live through diabetic therapies that are now showing total impact on the health of heart disease of diabetes, of kidney disease and we -- I knew something quite personally to me, the medicines for dementia and Alzheimer is changing the curve of decline by 50%. There are so many reasons to be optimistic. And the pages on the newspapers, on websites is all about the pessimism. And I'm more of a believer how technology is going to shape these economies and help us out. We may have 1 or 2 years of struggling, but I am powerfully optimistic about how technology is going to be rapidly shape our world.

Jane Fraser is running Citi, the CEO of Citi and one of the largest banks in the United States. And I think the first woman to run a major money center bank in the United States, but we had to go outside the United States to find a woman to do that, but you're native of Ireland.

Scotland.

Okay. So are you optimistic or you are pessimistic going forward? And what's the biggest challenge in running Citi these days our major money center bank?

It's -- we're sitting here as a backdrop, which I think we all acknowledge of the aftermath of the terrorist attack in Israel and the events have been unfolding since, and it's desperately sad. So it's hard not to be a little pessimistic given that. On the other hand, we're also as we talk about in a world where there is a new S in ESG, which is security, food security, energy security, it can be defense, it can be financial security. And that's certainly a theme that all the CEOs around the world are talking about how to build more resilient countries, companies are doing so. So from Citi's perspective, as we operate in many different geographies around the world, as do many colleagues around the table, it's coping with a world where globalization is becoming more fragmented risks associated with globalization are getting more connected together and how do we manage and navigate that. And as Ray said, you've got multiple different forces that every company, every leader has to navigate. So I think it's important to have big ears and thick skin these days in running any enterprise.

So for the women that are watching or they are here, what would you say is the biggest challenge for a woman to rise up in a major financial service institution? Is there any discrimination anymore? Or is there more than they used to be? And what was the secret to your rising up?

Well, let me just point out quite what a remarkable job the Kingdom has done on this front. I've been coming here, not quite as long as Jamie, about 15 years. And the last 4 years have just been spectacular in the change that's happened since coming from COVID, it's exciting to see. And I think this country is a good model for how to make sure that there is the education, the access to opportunity, and it's not through conjectures, but it's focusing on recruitment, it's focusing on development, it's focusing on the promotion of women and providing access to opportunities. And I have to say, male allies are very important in that rise and several of you around the table have been wonderful allies to me.

Okay. So Patrice Motsepe. Patrice is, I think, one of the most prominent business people in Africa and very actively involved in philanthropy and business in South Africa. Patrice, why does the western world not really invest that much in Africa, relatively speaking, I think only 1% of private equity dollars around the world go to Africa every year. Do you see any change occurring and Africa to be more attractive to the western investors? Or do you think it's actually going the opposite way?

It's very simple. I mean, Africa has continued to be globally competitive, an exciting destination for investment, both domestically and globally. Investments worldwide don't have to invest in any specific country or continent. There's a lot of exceptional work that has been done in Africa like many other developing countries. Will there be challenges in the future? Absolutely, yes. I mean, we've invested billions of dollars in Africa. We could have invested in other parts of the world. We've invested in India and in Europe and in America. So I think overall, there's a new group of young African leaders, some of the smartest ,brightest African study in America. You and I are part of the Harvard University, Global Advisory Council, exceptional talent, bright young African study in London and in other possible. I think the future looks great.

And what areas -- if somebody wants to invest in Africa, where would you recommend in, what type of things, venture capital, buyouts, technology? What are the areas you think are particularly attractive?

Well, the key issue is you've got to find the right partners. And as I said, the bottom line is the perception that there isn't any capital in Africa is mis-founded. The financial services company that we are the biggest shareholder and has got in excess of $80 billion. I think part of the challenge is we have to divest, we have to invest in other parts of the world, but -- which means we also have to invest outside Africa, which are the best opportunities. I think technology is changing the face, the opportunities in Africa and in the developing world. And if you look at the impact, the fastest-growing economies in the world are from the continent. But of course, it starts from a low base. So there's lots of investment in agriculture. We will continue in the mining industry. The challenge for us now is to beneficiate in the continent. And those beneficiation opportunities have to make commercial sense. But overall, the partnerships globally, and there's a significant amount of investments, it's not just going to Africa, but to the rest of the developing world.

So Noel Quinn is the CEO of HSBC, a major European bank. I think the largest bank -- one of the largest banks in Europe that did not take any assistance from the government in '07, '08. So as you wake up every morning, are you worried about the European economy? Or are you more worried about the Chinese economy? You have a big presence in China as well. So what worries you more, the Chinese economy or the European economy.

Well, let me talk about the European economy first. Look, clearly, it had a massive inflationary shock with the gas -- the dependency on the gas price. That then led to a big shift in some of the demand curve for a number of industries in Europe. Anything to do with consumption, high street, massive demand curve shift. Europe at the moment is still -- in terms of real rates, it's still negative. And if you contrast it with the U.S., the real rates in the U.S. are positive. So you then got the currency pressure in Europe as well. . But that demand shift has created a very low growth economy in Europe, still with high inflation, but coming down. And the real shock was the resilience issue. The real shock is the dependency on a single source of energy. And I think if you play that into post-COVID, all industries in the world, all governments of the world have had that shock on resilience. So I've seen a huge amount of diversification of supply chains taking place. And that is impacting China as well. The exports from China are impacted by geopolitics, the need for resilience in supply chain and the need for diversification. I think the real challenge for Europe is near term and probably medium-term growth. It will get inflation under control, although there is the potential for a second wave, Wage inflation is still not under control in Europe and particularly in the U.K. I think we're all seeing evidence of that biting now in our economies. And I -- so therefore, there is the potential for persistent high interest rates and high inflation in Europe. In China, I think it's more near-term pressures as they've corrected the economy with some massive policy correction. But medium term, I'm still very confident of the growth opportunities in China.

Hindsight is usually 2020, but -- so that tell us, in hindsight, was Brexit a good thing for England and a good thing for Europe or it's not a good thing?

I'm going to put a different stance on that. The timing of Brexit was very fortunate and that it coincided with COVID. I think if you look at it from a political point of view, Boris Johnson achieved Brexit at a time when the economy was already flat. And actually, the economic impact of COVID was more damaging than the -- actually, the economic impact of Brexit was muted because it was already a very suppressed economy. So when we run stress tests on the U.K. economy for Brexit on top of COVID, it didn't make a lot of difference. We were already at rock bottom. What you're now seeing is the emergence of the Brexit overhang coming as the economy is reboosting in Europe and the economy is reboosting in the U.K.

The U.K., at the moment, if you listen to the chance that the U.K. is still doing slow GDP growth. It's still better at the moment than Germany or France. Would it be long term? That's a different matter. Steve Schwarzman built Blackstone, the largest market cap alternative investment company and I think the largest in terms of assets under management, market cap and so forth. Steve, lot of money has come into alternative investments in recent years, particularly in Blackstone from retail investors. Is that going to continue as the economy maybe slows down a little bit in the United States? Or you think retail is a great source of investment capital for alternative investment firms in the future as well?

David, there's $80 trillion in retail investors, and they are only invested in our area, alternatives maybe 1%, maybe 2%. When I started in the alternative business in 1985, institutions at that time, had 1% or 2%, that was it. Now they're 25%. So I think I've been planning on this since 2010, which shows you my timing may be off that there's no reason why retail investors wouldn't want to get the same type of positive experience that institutions do. Alternatives should be able to generate 500 basis points or more than not using them. So why wouldn't you use them. So there were some regulatory inhibitions but now I can tell you from talking to the people who run these systems that they want really dramatic increases in alternatives for their customers. Institutions are in one way, much more stable source of capital because they're very disciplined. They take advantage of dips, the retail investor has more volatility. Sometimes when the world gets in a bad position, they just don't want to invest. So you have to look at the growth over a cycle, and we're doing like really well with this. We have probably a quarter of the $1 trillion we manage, that they comes from retail, high net worth investors. I think that's going to grow as long as you give them a good experience and it's also -- you have to have very good sales and service. It's much more service intensive than you would think.

Steve, you also have one of the biggest real estate investment operations in the Western world. Many people think that the real estate, were just going to suffer decline because interest rates have been high, people aren't coming back to work physically so much that maybe people don't need as much office space, are you expecting a big decline in the value of commercial real estate in major cities? Or do you think it's been exaggerated?

I think it depends on the sub-asset class statement. So office buildings, in the United States, to some degree also around the world because of the pandemic people got used to staying at home. And it was actually more profitable for them. to stay at home because one, they didn't work as hard regardless of what they tell you. And the second is they don't spend money to commute, they can make their lunch at home. They don't have to buy expensive clothes. And so their incomes are higher. So just 1 or 2 quick statistics, in the U.S., in the office market buildings are 20% vacant, unleased. Actually, there's another 20% that somebody is leased, but the people don't come in. So you're looking at office buildings that basically are 40% unused. So I expect when those leases roll off, the companies will cut back the amount of space. So say you have 30% unused space and office buildings, that means those office buildings are not survivable as economic entities. Now that the exception is office buildings that are 10 years old or less, people like being in those. So that's going to have a very bad ending. On the other hand, there are other categories of real estate like warehouses, they're still going up like 8%, 9% a year in terms of leases. When somebody rolls off an old lease they've gone up so much. There's an increase to them of 50% to 60%. So there are a variety of areas whether it's student housing, whether it's actually even affordable housing, all kinds of commercial real estate are doing very well. And so the broad brush that people pay with commercial real estate, which basically -- because office buildings are very tall, you can't see them. And that's sort of envisioned, so you're going to have a mixed outcome.

Jamie, you've asked your employees or maybe told all your employees to come back to work 5 days a week. Are they doing that?

60%, five days a week, 30%, 3 days a week. I mean 3 days a week, mandatory, we track it, and it includes coming out on Friday, 10% have always been working from home if it makes sense, 100% of our MD is required to go to work every day. I don't think you can lead people and work from home.

Neil Shen built the biggest and most successful venture capital business in China under the Sequoia China name. Now he has his own company. So is it easy as it was 10 years ago to invest in China and do you think it's going to be more complicated for western investors to invest in China in the near future?

Well, never been easy to invest in China.

You made it look easy.

You have to work very hard because they're choosing there, one that, there's a lot of competition. If you're looking at the work ethics, right? People talk about 996, 9 a.m. to 9:00 p.m. and 6 days a week. I think that's right to many of those start-up companies and also to large companies. And the competition is fierce. So in order for you to creating a strong return, you really have to find a way to position yourselves to providing value and to work as hard as your own CEOs. The second point I want to make is that you need to take a long-term view. And obviously, country just like in many others, you're seeing the economic and unit cycles up and down. And the very important thing is to obviously take a long term view, luckily venture capital and growth capital and private equity, which will -- been participating has been a long tail assets. But when you make an investment, take a longer-term view from a macro perspective as well on the macro perspective, and able to stick around and even some of those business might going up and down. I think that's probably the most important.

So let me ask you today, you were an early investor in ByteDance, which owns TikTok, is TikTok on going to ruin western society as we know it. Many people think that TikTok is going to destroy our youth and so forth. Why are you not worried about TikTok destroying society?