"Definitely Not" Like Financial Crisis: Brookfield's Flatt on AI, Private Credit | The Pulse 2/25
Speakers
Summary
- AI Infrastructure Demand: Bruce Flatt argues we are in the early stages of a massive infrastructure build-out (Data Centers, Power) comparable to the toll roads and pipelines of the past. Demand currently exceeds supply, and this is not a bubble yet.
- Private Credit Resilience: Flatt dismisses concerns about a "private credit bubble," noting it is too small relative to global credit to be systemic. He views bank balance sheets and real estate (outside of specific pockets) as healthy.
- FX & Macro Divergence: Deutsche Bank (Saravelos) sees Japan engaging in "financial suppression" (keeping rates low to manage debt), leading to a structurally weak Yen. Macquarie (Deverell) sees the USD remaining strong in the short term (3 months) due to Asian inflows, despite being overvalued long-term.
- The "Scare Trade": Recent market volatility regarding AI is viewed as noise. The consensus among speakers is that the AI investment cycle (CapEx) has years to run before a potential bust.
Trade Ideas
Investors are waiting for another "mic drop moment" from Nvidia, similar to May 2023 guidance, but the stock has underperformed the semiconductor index since October. The bar for positive surprises has become incredibly high. While the long-term AI thesis holds, the short-term setup requires "something amazing" to push the stock higher from here. WATCH (Wait for earnings clarity or a reset in expectations). A massive earnings beat reignites the rally immediately.
Flatt states explicitly, "Private credit is small... this is not a systemic issue." He argues bank balance sheets are in "excellent shape." The market fears a 2008-style contagion in private credit/commercial real estate. Flatt argues this fear is misplaced. If the systemic risk is near zero, the discount applied to alternative asset managers (who hold these assets) is an opportunity. LONG Alternative Asset Managers (BN / BX / KKR / OWL). A deep recession causing actual defaults in the underlying loan portfolios.
Bruce Flatt
CEO, Brookfield Asset Management
Flatt states, "We can't build them fast enough because the demand is so large." He compares AI data centers to the "toll roads and pipelines" of the modern economy. While software valuations fluctuate, the physical infrastructure (power, cooling, real estate) required to run AI models is contractually secured by creditworthy counterparties (hyperscalers/nations). This creates a defensive growth moat. LONG Brookfield and related infrastructure plays. If hyperscaler demand evaporates suddenly (unlikely per Flatt), contracts could be renegotiated.
George Saravelos
Editor-at-Large, CoinDesk
Saravelos notes that despite inflation, the Japanese government favors a policy of "low real rates" to manage their debt-to-GDP ratio. This is effectively "financial suppression." If the BOJ refuses to hike rates meaningfully to match global peers because they need to inflate away debt, the currency (Yen) acts as the release valve and depreciates. SHORT JPY (or Long USDJPY). A sudden, aggressive hawkish pivot by the BOJ or a massive risk-off event triggering safe-haven flows into Yen.
Rick Deverell
Editor, The Block
Deverell observes that while European investors are derisking, "Asia is doubling down in US exposure." Despite the dollar being fundamentally "expensive," capital flows from Asia and the US economy's relative resilience (no recession in sight) will prop up the Greenback for the next quarter. LONG USD (Tactical/Short-term). US data deterioration leading to aggressive Fed cuts sooner than expected.
Up Next
This Bloomberg Markets video, published February 25, 2026, features Neil Campling, Bruce Flatt, George Saravelos, Rick Deverell discussing NVDA, BKLN, BN, BEP, EQIX, BIP, JPY, FXY, USD, UUP. 5 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Neil Campling, Bruce Flatt, George Saravelos, Rick Deverell · Tickers: NVDA, BKLN, BN, BEP, EQIX, BIP, JPY, FXY, USD, UUP