1 00:00:02,600 --> 00:00:12,960 Speaker 1: Ye. Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:31,400 Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg. I 5 00:00:31,400 --> 00:00:33,599 Speaker 1: caught up with JP Morgan's Bob Michael yesterday. Had one 6 00:00:33,640 --> 00:00:35,800 Speaker 1: thing to say to me, enjoy the ride. There's too 7 00:00:35,920 --> 00:00:38,280 Speaker 1: much money in cash. It's been going into cash the 8 00:00:38,360 --> 00:00:41,000 Speaker 1: last three years waiting for the Fed to finish hiking rates. 9 00:00:41,200 --> 00:00:42,960 Speaker 1: They were supposed to finish hiking at the end of 10 00:00:42,960 --> 00:00:45,440 Speaker 1: this year, not last year. That money has yet to 11 00:00:45,520 --> 00:00:47,559 Speaker 1: come back into this market. I want to bring in 12 00:00:47,600 --> 00:00:52,280 Speaker 1: from London Marcus Ashworth Bloomberg Opinion columnists. So Marcus, has 13 00:00:52,360 --> 00:00:55,200 Speaker 1: that cash moved from the sidelines and into equities? It 14 00:00:55,320 --> 00:00:58,480 Speaker 1: sounds so cliche. Just walk me through it. Well, I 15 00:00:58,480 --> 00:01:01,160 Speaker 1: think it has. I think there's there's more to come. Really, 16 00:01:01,240 --> 00:01:03,840 Speaker 1: I mean, I appreciate what Tom is saying about. You know, 17 00:01:04,000 --> 00:01:05,680 Speaker 1: why would you want to buy the high here? But 18 00:01:06,000 --> 00:01:08,360 Speaker 1: and we are close to that selling May. We've got 19 00:01:08,400 --> 00:01:10,240 Speaker 1: another week or two, it's come out the month. Then 20 00:01:10,360 --> 00:01:13,440 Speaker 1: there's a little bit of moving around, going probably out 21 00:01:13,440 --> 00:01:15,920 Speaker 1: of equities today into bonds, which we've seen in the 22 00:01:15,920 --> 00:01:18,920 Speaker 1: price action. But the simple point is the dollar is 23 00:01:19,319 --> 00:01:22,640 Speaker 1: is very very strong. Why because US equities are very 24 00:01:22,720 --> 00:01:25,680 Speaker 1: high and strong and going stronger. And why is that? 25 00:01:25,720 --> 00:01:28,280 Speaker 1: Because the US GDP is going to be a better 26 00:01:28,319 --> 00:01:30,960 Speaker 1: print in quarter one than the market had initially expected. 27 00:01:31,240 --> 00:01:35,600 Speaker 1: The cold snap, the government shutdown that's past. Now, compared 28 00:01:35,640 --> 00:01:38,319 Speaker 1: to everyhe else in the rest of the world, US economy, 29 00:01:38,440 --> 00:01:41,040 Speaker 1: US equities are better than Marcus. You are an expert 30 00:01:41,040 --> 00:01:44,280 Speaker 1: at this, and you wrote an extremely important essay last 31 00:01:44,360 --> 00:01:47,000 Speaker 1: year and asset flows. I don't have it in front 32 00:01:47,000 --> 00:01:48,960 Speaker 1: of me, but I remember it was a jewel. The 33 00:01:49,000 --> 00:01:52,000 Speaker 1: bottom line is the Central Bank of the United States 34 00:01:52,520 --> 00:01:57,120 Speaker 1: reverse course. They've gone all dove essentially with price with 35 00:01:57,360 --> 00:02:01,920 Speaker 1: rate cut stability forever, and that's moved all money to 36 00:02:02,200 --> 00:02:06,160 Speaker 1: all assets at all times. How does that end. What's 37 00:02:06,200 --> 00:02:13,160 Speaker 1: the history of how a central bank driven move ends? Well? 38 00:02:13,200 --> 00:02:15,359 Speaker 1: I don't think The point is is that if you 39 00:02:15,400 --> 00:02:18,880 Speaker 1: listen to Clarita that FED is absolutely on hold. That 40 00:02:18,960 --> 00:02:21,120 Speaker 1: means that the big risk has gone. As you quite 41 00:02:21,160 --> 00:02:23,600 Speaker 1: clearly staid there, the Federal Reserve hiking has been removed, 42 00:02:23,600 --> 00:02:26,960 Speaker 1: and quantitative tightening is also about to be removed. Brexit 43 00:02:27,080 --> 00:02:29,440 Speaker 1: isn't happening for a bit. Oil is going better at 44 00:02:29,480 --> 00:02:31,880 Speaker 1: the moment. There is enough momentum behind the market that 45 00:02:32,560 --> 00:02:34,520 Speaker 1: with nothing else to do, you want to put market 46 00:02:34,919 --> 00:02:36,960 Speaker 1: money to work in the market. And that's what's happening. 47 00:02:37,080 --> 00:02:39,840 Speaker 1: The Fed is not going to hike rates for this 48 00:02:39,919 --> 00:02:42,079 Speaker 1: year and possibly next year, and the next move may 49 00:02:42,080 --> 00:02:44,520 Speaker 1: well be an ease, so that is an incentive to 50 00:02:44,520 --> 00:02:46,919 Speaker 1: get on board. And that's simply the lack of any 51 00:02:47,000 --> 00:02:49,800 Speaker 1: better do. Yes, there's always risks out there, but money 52 00:02:49,840 --> 00:02:51,240 Speaker 1: needs to be put to work, and that's what it's 53 00:02:51,320 --> 00:02:52,960 Speaker 1: what's happening. Well, that's the message coming from a lot 54 00:02:52,960 --> 00:02:55,000 Speaker 1: of people over the last few weeks. And let's be clear, 55 00:02:55,040 --> 00:02:57,200 Speaker 1: it's been the right message because the price action has 56 00:02:57,240 --> 00:03:00,560 Speaker 1: proved to prove that out to to oh higher on 57 00:03:00,560 --> 00:03:02,560 Speaker 1: the equity market for spreads, the grind tighter on high 58 00:03:02,600 --> 00:03:04,600 Speaker 1: yield as well. But Marcus, the cool on the dollar 59 00:03:04,680 --> 00:03:07,400 Speaker 1: is a little bit more interesting for me. Strong dollar 60 00:03:07,440 --> 00:03:09,080 Speaker 1: short over the last couple of days. But the truth 61 00:03:09,120 --> 00:03:11,600 Speaker 1: is we've been stuck in a really narrow training range 62 00:03:11,800 --> 00:03:14,560 Speaker 1: over much of the last six months, we can't seemingly 63 00:03:14,639 --> 00:03:19,480 Speaker 1: sustainably break one twelve on euro dollar zero nine as 64 00:03:19,520 --> 00:03:22,600 Speaker 1: I speak. What's your call there? Well, I'm afraid I'm 65 00:03:22,600 --> 00:03:24,280 Speaker 1: gonna have to say that the euro, you know, try 66 00:03:24,360 --> 00:03:26,919 Speaker 1: to bounce above one thirteen, it's failed. It heads back 67 00:03:26,960 --> 00:03:30,600 Speaker 1: down towards lower levels. Because the European economy is woeful 68 00:03:31,000 --> 00:03:33,160 Speaker 1: and it's continued to be worthful. There is no bounce 69 00:03:33,200 --> 00:03:35,600 Speaker 1: in sight. There's a little bit of a dust production jump, 70 00:03:35,600 --> 00:03:38,200 Speaker 1: but reality, look at orders and forward looking things. The 71 00:03:38,240 --> 00:03:42,200 Speaker 1: European economy has got no good news at Germany, bit Itaally, Bick, etcetera. 72 00:03:42,520 --> 00:03:44,240 Speaker 1: So if you look at what's happening for the euro, 73 00:03:44,360 --> 00:03:47,400 Speaker 1: it's weakning same time so sterling and it's all really 74 00:03:47,400 --> 00:03:50,280 Speaker 1: down to dollar strength. Why is that? Because the quarter 75 00:03:50,320 --> 00:03:52,720 Speaker 1: one GDP number on Friday is going to be strong. 76 00:03:53,400 --> 00:03:57,440 Speaker 1: Marcus As, thank you so much greatly perspective your SMPR 77 00:03:57,560 --> 00:04:14,960 Speaker 1: to record high and a few other industries. Joseph Stiglets 78 00:04:14,960 --> 00:04:18,279 Speaker 1: of Columbia University, the Nobel laureate. He is the liberal 79 00:04:18,360 --> 00:04:21,479 Speaker 1: that conservatives love to hate. Of course, he changed the 80 00:04:21,640 --> 00:04:26,719 Speaker 1: language of economics of no no, they no, no, no, no, 81 00:04:27,960 --> 00:04:32,520 Speaker 1: can't tie Stiglets. Krugman can't tie Stiglets. Shoels is the 82 00:04:32,560 --> 00:04:35,680 Speaker 1: liberal the conservatives love to hate. We like Professor Sticklets. 83 00:04:35,800 --> 00:04:38,880 Speaker 1: We do, okay, thank you. Anyways, Joe Stiglets out with 84 00:04:38,880 --> 00:04:41,839 Speaker 1: the new book, People Power and Profits. And there's like 85 00:04:42,040 --> 00:04:44,440 Speaker 1: thinner Stiglet books and there's thicker one. This is a 86 00:04:44,520 --> 00:04:47,720 Speaker 1: major effort by you. Clearly you're doing it because of 87 00:04:47,760 --> 00:04:50,599 Speaker 1: the time of Trump. But what was the catalyst for 88 00:04:50,680 --> 00:04:54,320 Speaker 1: you to write People Power and Profits? What the catalysts 89 00:04:54,360 --> 00:04:58,400 Speaker 1: were two things. One, Uh, we have these festering problems 90 00:04:58,440 --> 00:05:01,760 Speaker 1: growing inequality. I'd written about that, and after I wrote 91 00:05:01,800 --> 00:05:06,240 Speaker 1: about it, uh night back in twelve, the problems got 92 00:05:06,279 --> 00:05:10,400 Speaker 1: worse and worse, and now they've risen to the top 93 00:05:10,480 --> 00:05:14,440 Speaker 1: of the national agenda. But what worries me is we 94 00:05:14,520 --> 00:05:18,559 Speaker 1: don't have a deep enough diagnosis of well that's well said, 95 00:05:18,600 --> 00:05:21,760 Speaker 1: well said, and what to do about it. And if 96 00:05:21,800 --> 00:05:24,640 Speaker 1: we don't do something about it, it's gonna really tear 97 00:05:24,680 --> 00:05:26,800 Speaker 1: apart our country. And the book with a hundred pages 98 00:05:26,800 --> 00:05:29,760 Speaker 1: of footnotes is that diagnosis type of book? I should 99 00:05:29,800 --> 00:05:33,039 Speaker 1: point out. John Ferrell Krugman of CCN Why the Laureate 100 00:05:33,080 --> 00:05:36,919 Speaker 1: as Well, says Joseph Stigletz is an insanely great economist. 101 00:05:37,680 --> 00:05:40,159 Speaker 1: Krugman is as well. I want you to speak to 102 00:05:40,440 --> 00:05:44,040 Speaker 1: part of our audience that's conservative. They don't like liberals 103 00:05:44,120 --> 00:05:47,400 Speaker 1: like you, but they're miserable. Their kids are miserable, they're 104 00:05:47,440 --> 00:05:50,640 Speaker 1: grand maybe it's their their their parents are misible with 105 00:05:51,040 --> 00:05:55,200 Speaker 1: medications or whatever. Speak to conservatives right now about why 106 00:05:55,200 --> 00:05:57,560 Speaker 1: they need to read your book and start to think 107 00:05:57,640 --> 00:06:00,560 Speaker 1: like liberals of another time and place. Well, if we 108 00:06:00,640 --> 00:06:05,600 Speaker 1: go back, say to the years after World War two, 109 00:06:05,960 --> 00:06:10,200 Speaker 1: America was in that at that moment, creating the first 110 00:06:10,480 --> 00:06:14,799 Speaker 1: middle class society. Everybody thought of themselves as middle class, 111 00:06:14,960 --> 00:06:19,280 Speaker 1: and we were investing a lot in our roads. We 112 00:06:19,279 --> 00:06:24,320 Speaker 1: were investing in education. Uh. Spook Nick motivated us to 113 00:06:25,360 --> 00:06:29,920 Speaker 1: uh government to invest in R and D, and that 114 00:06:30,000 --> 00:06:34,160 Speaker 1: put us on the way to becoming the undisputed to 115 00:06:34,200 --> 00:06:42,560 Speaker 1: global champion in so many areas. Uh. Beginning around I 116 00:06:42,600 --> 00:06:47,520 Speaker 1: think we lost our course. Uh. We adopted a doctrine 117 00:06:47,600 --> 00:06:53,120 Speaker 1: that the market will solve all our problems. Uh it didn't. Uh. 118 00:06:53,279 --> 00:06:58,560 Speaker 1: What it did is lead to actually slower economic growth 119 00:06:59,200 --> 00:07:02,080 Speaker 1: at all of the benefits of the growth went to 120 00:07:02,160 --> 00:07:06,080 Speaker 1: the top one and that has meant that that middle 121 00:07:06,120 --> 00:07:09,400 Speaker 1: class lifestyle that I talked about before has fallen outer 122 00:07:09,520 --> 00:07:13,520 Speaker 1: reach of an increasing fraction of American So professors, is 123 00:07:13,560 --> 00:07:16,880 Speaker 1: a critique of capitalism or a critique of monopolistic behavior 124 00:07:16,920 --> 00:07:22,680 Speaker 1: and abuses of markets. Uh, it's a critique of late 125 00:07:22,680 --> 00:07:28,400 Speaker 1: twentieth century capitalism as critique of early twenty one century capitalism. 126 00:07:28,400 --> 00:07:31,760 Speaker 1: But that's why I called my book Progressive Capitalism for 127 00:07:31,800 --> 00:07:35,840 Speaker 1: an Age of Discontent, because I think the market is 128 00:07:35,880 --> 00:07:39,080 Speaker 1: the only way that you're going to deliver long term 129 00:07:39,240 --> 00:07:43,680 Speaker 1: economic growth. But it doesn't work with unfettered markets markets alone. 130 00:07:44,680 --> 00:07:49,040 Speaker 1: You need government, their collective action, people working together for 131 00:07:49,080 --> 00:07:51,600 Speaker 1: at least two things. One, you have to curb some 132 00:07:51,680 --> 00:07:54,800 Speaker 1: of the excesses, the excesses that we saw in the 133 00:07:54,920 --> 00:07:57,440 Speaker 1: run up to the Great Recession two thousand eight, the 134 00:07:57,440 --> 00:08:01,160 Speaker 1: financial sector, but also uh, the environment. You know, if 135 00:08:01,200 --> 00:08:04,400 Speaker 1: we didn't have good regulations for the environment, New York City, 136 00:08:04,600 --> 00:08:08,760 Speaker 1: Los Angeles would be as unbreathable as Delhi and Embajing 137 00:08:08,880 --> 00:08:12,680 Speaker 1: is today. But the second thing is unique government investment, 138 00:08:12,840 --> 00:08:16,960 Speaker 1: investment for infrastructure, for education, for R and D basic research, 139 00:08:17,360 --> 00:08:21,160 Speaker 1: not all the research, but the basic research. The discovery 140 00:08:21,160 --> 00:08:24,160 Speaker 1: of DNA the discovery of the kinds of things on 141 00:08:24,160 --> 00:08:27,680 Speaker 1: which everything builds. You mean, like fixing terminal five at JFK, 142 00:08:28,280 --> 00:08:30,720 Speaker 1: something like that. Joe Stiglets with a major book. This 143 00:08:30,800 --> 00:08:34,120 Speaker 1: is a thicker one, a deeper one. The subtitle Progressive 144 00:08:34,240 --> 00:08:37,960 Speaker 1: Capitalism for an Age of Discontent. The book is People 145 00:08:38,440 --> 00:08:57,200 Speaker 1: Power and Profits. Joseph Stigletts of Columbia University. It is 146 00:08:57,240 --> 00:09:00,520 Speaker 1: now time to speak with a famed investments for energist 147 00:09:00,559 --> 00:09:05,199 Speaker 1: and equity analyst of higher stock prices. The economist Julia 148 00:09:05,280 --> 00:09:09,960 Speaker 1: Cornado joins us with macro policy perspectives. Julia in any 149 00:09:10,480 --> 00:09:14,320 Speaker 1: level you know, Abel bernanke MANQ whatever the beg, which 150 00:09:14,320 --> 00:09:18,080 Speaker 1: is the British one volume folks on economics in every 151 00:09:18,120 --> 00:09:22,120 Speaker 1: beginning economics book include including Paul Krugman's wonderful two volumes. 152 00:09:22,480 --> 00:09:25,840 Speaker 1: There's one chapter buried in the back which nobody ever 153 00:09:25,880 --> 00:09:29,440 Speaker 1: reads about linking economics into the stock market. Are they 154 00:09:29,520 --> 00:09:33,360 Speaker 1: linked right now? Very much? Though? I mean, I think 155 00:09:33,360 --> 00:09:36,480 Speaker 1: we've been in a financialized world for the last couple 156 00:09:36,480 --> 00:09:38,800 Speaker 1: of decades, and it's something that the FED has been 157 00:09:38,840 --> 00:09:43,000 Speaker 1: catching up to. But clearly the rally we've seen has 158 00:09:43,040 --> 00:09:47,480 Speaker 1: its foundations. The recovery, the rally back in the pivots 159 00:09:47,800 --> 00:09:51,400 Speaker 1: by the FED and other central banks. That provides some 160 00:09:51,520 --> 00:09:55,440 Speaker 1: insurance against what I been a slowing global backdrop. Let 161 00:09:55,480 --> 00:09:57,719 Speaker 1: me ask you the same question answer Michael McKee, and 162 00:09:58,120 --> 00:10:00,960 Speaker 1: both of you informed in your unique way, is what 163 00:10:01,240 --> 00:10:06,240 Speaker 1: happens when the message changes? What's the experience of what happens. 164 00:10:06,280 --> 00:10:09,480 Speaker 1: It will be a speech in Dallas, It'll be cap 165 00:10:09,760 --> 00:10:13,800 Speaker 1: It'll be Caplet's fault, or Powell's fault, or that guy 166 00:10:13,920 --> 00:10:17,040 Speaker 1: up in Boston's fault. What happens when they get that 167 00:10:17,440 --> 00:10:22,079 Speaker 1: one sentence out there? Right particularly when as we watch 168 00:10:22,160 --> 00:10:26,320 Speaker 1: the earning season proceed, it's not all sunshine in roses 169 00:10:26,440 --> 00:10:30,200 Speaker 1: in corporate earnings, so it's not a disaster. But we 170 00:10:30,280 --> 00:10:35,080 Speaker 1: have SMP earnings tracking around four percent right now for 171 00:10:35,160 --> 00:10:38,760 Speaker 1: this year, which is a pretty subdued performance. So um, 172 00:10:38,800 --> 00:10:42,760 Speaker 1: if you don't have the Fed sort of endlessly devish, 173 00:10:43,360 --> 00:10:46,280 Speaker 1: then there may be some disappointment. So it is sort 174 00:10:46,280 --> 00:10:50,120 Speaker 1: of shaky foundations, I think. Um, the real backdrop is 175 00:10:50,200 --> 00:10:53,840 Speaker 1: that growth is slowing and earnings are harder to come 176 00:10:53,840 --> 00:10:56,880 Speaker 1: by in a late cycle with rising labor costs in 177 00:10:57,040 --> 00:11:01,040 Speaker 1: a slower global backdrop. So um, it makes next week 178 00:11:01,120 --> 00:11:04,120 Speaker 1: said in meeting that much more interesting. I don't expect 179 00:11:04,120 --> 00:11:06,760 Speaker 1: the FED to change its tone, but you've had some 180 00:11:06,800 --> 00:11:09,600 Speaker 1: people even get a little excited about the possibility that 181 00:11:09,640 --> 00:11:13,240 Speaker 1: FED could cut right, and I don't think that the 182 00:11:13,280 --> 00:11:17,160 Speaker 1: backdrop we're seeing conducive of that. And as Michael can make, 183 00:11:17,240 --> 00:11:20,640 Speaker 1: you mentioned the spread in opinions now, Julia is shocking 184 00:11:20,760 --> 00:11:24,439 Speaker 1: the the If you take a bell curve, folks of forecasts, 185 00:11:24,920 --> 00:11:28,800 Speaker 1: the tails are dominant right now, with people looking for 186 00:11:28,840 --> 00:11:32,680 Speaker 1: a better economy and rate rises and people looking for 187 00:11:32,920 --> 00:11:37,600 Speaker 1: real stagnation and sluggishness. And even as you say, Dr Cornado, 188 00:11:37,679 --> 00:11:42,120 Speaker 1: speculation of a rate cut, what's your all? I mean, 189 00:11:42,360 --> 00:11:44,880 Speaker 1: I'm kind of in the middle. I think I actually 190 00:11:44,960 --> 00:11:47,760 Speaker 1: do believe in a sort of soft landing, if you 191 00:11:47,880 --> 00:11:50,079 Speaker 1: if you want to use that phrase. I think growth 192 00:11:50,160 --> 00:11:53,200 Speaker 1: is gonna slow this year. I think inflation is going 193 00:11:53,240 --> 00:11:55,480 Speaker 1: to stay subdued, so there's no reason for the FED 194 00:11:55,559 --> 00:11:59,000 Speaker 1: to hike necessarily. But I also think that the FED 195 00:11:59,080 --> 00:12:02,120 Speaker 1: is done enough through pivot, and you've got Chinese stimulus 196 00:12:02,160 --> 00:12:05,200 Speaker 1: now that some of the worst case scenarios are likely 197 00:12:05,240 --> 00:12:08,480 Speaker 1: to be avoided. Uh So, I think that you know 198 00:12:08,600 --> 00:12:11,800 Speaker 1: that that's going to maybe disappoint markets at times, but 199 00:12:12,080 --> 00:12:14,760 Speaker 1: I think it's an open scenario for the Fed. On hold, 200 00:12:15,040 --> 00:12:19,319 Speaker 1: do American executives trying to prop up earnings and margins 201 00:12:19,360 --> 00:12:22,720 Speaker 1: and get decent organic revenue growth, are they going to 202 00:12:22,760 --> 00:12:27,079 Speaker 1: get help with a fiscal up of fiscal stimulus or 203 00:12:27,440 --> 00:12:31,280 Speaker 1: the advantages of the tax bill continuing. I mean, we 204 00:12:31,320 --> 00:12:33,199 Speaker 1: still have a little bit of a tail wind from 205 00:12:33,200 --> 00:12:36,800 Speaker 1: the tax bill, but I don't think we should expect 206 00:12:36,880 --> 00:12:41,720 Speaker 1: fiscal stimulus in this political environment. Um. In fact, we 207 00:12:41,760 --> 00:12:44,600 Speaker 1: have a fiscal cliff coming up in the fall, and 208 00:12:44,640 --> 00:12:47,599 Speaker 1: it will take all the political will in d C 209 00:12:48,440 --> 00:12:51,680 Speaker 1: just to you know, eliminate that fiscal cliff, which would 210 00:12:51,720 --> 00:12:55,280 Speaker 1: be a decline. Describe that. Describe the fiscal cliff. Describe 211 00:12:55,320 --> 00:12:58,400 Speaker 1: that for us. So they passed a two year increase 212 00:12:58,559 --> 00:13:02,880 Speaker 1: in government spending and it is scheduled to expire next 213 00:13:02,880 --> 00:13:05,600 Speaker 1: fiscal year, which would mean government spending would fall back 214 00:13:05,640 --> 00:13:08,920 Speaker 1: down to the prior level and that would be, uh, 215 00:13:09,080 --> 00:13:13,520 Speaker 1: you know, a decline in government spending. So the Congress 216 00:13:13,559 --> 00:13:16,560 Speaker 1: needs to agree to at least at a minimum, raised 217 00:13:16,640 --> 00:13:19,520 Speaker 1: spending back up to where it's been in the last 218 00:13:19,559 --> 00:13:24,280 Speaker 1: two years. So that's going to require bi partisanship in 219 00:13:24,320 --> 00:13:29,360 Speaker 1: an agreement. That's easy. That's that's a heavy lift. So 220 00:13:29,600 --> 00:13:33,240 Speaker 1: I expect I'll get there because nobody wants, uh, you know, 221 00:13:33,280 --> 00:13:36,400 Speaker 1: a headwind like that. But to expect some kind of 222 00:13:36,800 --> 00:13:42,840 Speaker 1: infrastructure package in this political climate, I think that's just 223 00:13:43,000 --> 00:13:46,280 Speaker 1: not going to materialize new things for the optimists. I 224 00:13:46,280 --> 00:13:48,160 Speaker 1: haven't talked about this in Asias, folks. It's good to 225 00:13:48,160 --> 00:13:52,800 Speaker 1: talk with Juliet Cornato macropolicy perspectives about his confidence has 226 00:13:52,840 --> 00:13:55,400 Speaker 1: really held up pretty well. I haven't looked at Michigan 227 00:13:55,440 --> 00:13:57,960 Speaker 1: confidence in a while. I'm going to take the Bloomberg 228 00:13:58,080 --> 00:14:01,719 Speaker 1: chart back to two thousand six and we exceed the 229 00:14:01,800 --> 00:14:05,439 Speaker 1: confidence of two thousand and six seven. That that that 230 00:14:05,440 --> 00:14:08,839 Speaker 1: that provides us with FED stability or even down the road, 231 00:14:08,880 --> 00:14:13,000 Speaker 1: a great rise. Right. Yeah, that's that's the very foundation 232 00:14:13,480 --> 00:14:17,199 Speaker 1: of our expectation that the economy is gonna hold up, 233 00:14:17,320 --> 00:14:21,200 Speaker 1: is that the virtuous cycle between the strong labor market 234 00:14:21,240 --> 00:14:24,040 Speaker 1: and consumer spending. And it doesn't have to be a 235 00:14:24,120 --> 00:14:27,080 Speaker 1: three percent performance that can can but that can pretty 236 00:14:27,080 --> 00:14:30,760 Speaker 1: easily deliver a two percent performance. So you do have 237 00:14:30,880 --> 00:14:34,800 Speaker 1: that virtuous cycle pretty well established and with the labor markets, 238 00:14:34,840 --> 00:14:37,840 Speaker 1: so strong. Consumers are feeling better than they felt in 239 00:14:37,880 --> 00:14:40,520 Speaker 1: a long time. It's been a long time coming when 240 00:14:40,520 --> 00:14:44,760 Speaker 1: consumers actually had a little bargaining power in the labor market. 241 00:14:44,760 --> 00:14:46,640 Speaker 1: You see that in the equity markets as well. Dr 242 00:14:46,680 --> 00:15:02,240 Speaker 1: coronetto things so much, Julia cornetto mecro policies perspective right now, 243 00:15:02,280 --> 00:15:06,800 Speaker 1: the hydro Carbon Interview of the day, Paul Sanky missoo O, Paul, 244 00:15:07,240 --> 00:15:10,080 Speaker 1: it always is fun to see a bidding war and 245 00:15:10,200 --> 00:15:13,560 Speaker 1: grizzled guys like you know, egos getting the way. Who's 246 00:15:13,560 --> 00:15:17,280 Speaker 1: got the bigger ego right now? Well, yeah, he said it. 247 00:15:17,320 --> 00:15:19,680 Speaker 1: I mean it's great. It's historic times here, Tom, and we've, 248 00:15:19,760 --> 00:15:22,040 Speaker 1: as you know, he's had a tough three four five 249 00:15:22,160 --> 00:15:25,440 Speaker 1: years waiting for some of this value to be realized 250 00:15:26,000 --> 00:15:28,680 Speaker 1: that we've seen in these deeply discounted our stocks. So 251 00:15:28,720 --> 00:15:30,720 Speaker 1: who's got the bigger ego? There's no question right here. 252 00:15:30,720 --> 00:15:35,200 Speaker 1: It's oxy CEO of Vicky Hollob who says of this 253 00:15:35,320 --> 00:15:37,800 Speaker 1: morning on her call that she is about to speak 254 00:15:37,840 --> 00:15:40,320 Speaker 1: to shareholders, but on the reggae FD hasn't spoken to 255 00:15:40,360 --> 00:15:42,800 Speaker 1: any I can tell you she's going to have some 256 00:15:42,840 --> 00:15:46,200 Speaker 1: pretty toughations. Well, you and your research note and this 257 00:15:46,280 --> 00:15:48,640 Speaker 1: is really important folks. Thank you writing from a lot 258 00:15:48,680 --> 00:15:51,960 Speaker 1: of experience on what kind of oil, what kind of 259 00:15:52,040 --> 00:15:56,000 Speaker 1: day to day tactical business is it. Oxie really doesn't 260 00:15:56,120 --> 00:16:01,960 Speaker 1: overlap with the anti Darko technological skill olds do that well, 261 00:16:02,000 --> 00:16:04,560 Speaker 1: you know, the former CEO of Boxy, Steve Chas and 262 00:16:04,600 --> 00:16:08,720 Speaker 1: really designed the company not to be offshore, um not 263 00:16:08,800 --> 00:16:11,200 Speaker 1: to be in Africa. If you remember during MRCONDO, the 264 00:16:11,240 --> 00:16:13,720 Speaker 1: stock was a big outperformer during the big oil spill 265 00:16:13,760 --> 00:16:17,160 Speaker 1: because Oxy was very much on shore US, on shore 266 00:16:17,240 --> 00:16:20,520 Speaker 1: Middle East and to the extent that Anadarko is a 267 00:16:20,640 --> 00:16:24,160 Speaker 1: very well known explorer, which Oxy didn't do, but also 268 00:16:24,600 --> 00:16:28,960 Speaker 1: in a massive MOZAMBIICAMERNG project and West Africa in Gulf 269 00:16:28,960 --> 00:16:31,840 Speaker 1: of Mexico. There really isn't a good fit here at all, 270 00:16:31,920 --> 00:16:34,440 Speaker 1: and people don't like the fit at all, whereas with 271 00:16:34,760 --> 00:16:37,800 Speaker 1: with Chevron, you you do have an excellent fit. So 272 00:16:37,840 --> 00:16:42,000 Speaker 1: it's a, to say the least, a brave move by Oxy. So, Paul, 273 00:16:42,040 --> 00:16:46,160 Speaker 1: if I'm a Anadarko shareholder and price aside, let's assume 274 00:16:46,200 --> 00:16:47,960 Speaker 1: the price, you know, the kind of trianglates we get 275 00:16:47,960 --> 00:16:51,840 Speaker 1: to each bid is fairly comparable, Which one do I prefer? 276 00:16:51,880 --> 00:16:54,640 Speaker 1: Do I prefer Chevron or Oxy? Well, I think you 277 00:16:54,720 --> 00:16:58,120 Speaker 1: certainly prefer Chevrons stock here because obviously you've got a bigger, 278 00:16:58,160 --> 00:17:01,160 Speaker 1: more credible bid from a bigger, more credible company in 279 00:17:01,280 --> 00:17:03,400 Speaker 1: terms of, you know, the overlap as we mentioned with 280 00:17:03,440 --> 00:17:07,400 Speaker 1: Anna Darker. I think in regards to the higher bid 281 00:17:07,440 --> 00:17:10,399 Speaker 1: for Oxy from Oxy, we've got to watch what happens 282 00:17:10,400 --> 00:17:13,560 Speaker 1: to Oxy's share price. That's actually holding up now, I 283 00:17:13,600 --> 00:17:17,080 Speaker 1: think partly because people think maybe Oxy did this to 284 00:17:17,119 --> 00:17:19,840 Speaker 1: fight off Exxon. I'm less certain that that's the case. 285 00:17:19,880 --> 00:17:22,159 Speaker 1: In fact, I doubt it, but that's certainly one market 286 00:17:22,280 --> 00:17:25,920 Speaker 1: story as the Oxy went after an a Darker rather 287 00:17:25,960 --> 00:17:30,320 Speaker 1: than lose itself to Exxon. Um. You know. So essentially 288 00:17:30,320 --> 00:17:32,320 Speaker 1: there's some tactical issues here as to why Oxy is 289 00:17:32,320 --> 00:17:35,400 Speaker 1: doing this. But secondly, the chances are that the credibility 290 00:17:35,440 --> 00:17:38,439 Speaker 1: of this bid is so damaging to the current Oxy 291 00:17:38,480 --> 00:17:41,080 Speaker 1: management that the company now becomes in play itself, and 292 00:17:41,119 --> 00:17:44,440 Speaker 1: therefore you Buyoxy on the basis and thinking over subsequent 293 00:17:45,160 --> 00:17:48,240 Speaker 1: to this bid. As a former banker myself, I'm thinking 294 00:17:48,280 --> 00:17:51,000 Speaker 1: about picking up the phone and making the cause and 295 00:17:51,000 --> 00:17:53,359 Speaker 1: trying to shake the tree. What other deals do you 296 00:17:53,359 --> 00:17:56,040 Speaker 1: think are possible in this space, you know, given we 297 00:17:56,080 --> 00:17:59,000 Speaker 1: have a bitting war here for a pretty attractive asset. Well, 298 00:17:59,040 --> 00:18:01,400 Speaker 1: it's known that we've had man change at Pioneer, which 299 00:18:01,440 --> 00:18:05,480 Speaker 1: is a shift back to to the previous CEO, Scott Sheffield. 300 00:18:05,880 --> 00:18:08,439 Speaker 1: You know, he's pretty much seen to be dressing the 301 00:18:08,480 --> 00:18:11,320 Speaker 1: company up for sale. We know in general that the 302 00:18:11,359 --> 00:18:14,119 Speaker 1: Permian needs to be consolidated by the biggest players. So 303 00:18:14,760 --> 00:18:16,840 Speaker 1: you have a number of players in the Permian who 304 00:18:16,840 --> 00:18:19,680 Speaker 1: are relatively smaller but have very good acreage. We're talking 305 00:18:19,680 --> 00:18:22,560 Speaker 1: about the con shows perhaps less willing to sell themselves 306 00:18:22,600 --> 00:18:25,360 Speaker 1: to diamondbacks, but then a whole raft is smaller companies, 307 00:18:25,600 --> 00:18:28,399 Speaker 1: and people question why Oxy didn't just do a you know, 308 00:18:28,520 --> 00:18:31,960 Speaker 1: for the less less risk arguably the same amount of 309 00:18:31,960 --> 00:18:34,680 Speaker 1: money they could have brought three Permian players and being 310 00:18:34,720 --> 00:18:38,560 Speaker 1: consistent with existing strategy. So but Permian is obviously the 311 00:18:38,600 --> 00:18:42,280 Speaker 1: hot area. Paulk you one final question within this hydrocarbon 312 00:18:42,400 --> 00:18:44,359 Speaker 1: roll up that you just described as maybe a what 313 00:18:44,480 --> 00:18:47,080 Speaker 1: if for the reality that we see right now, how 314 00:18:47,160 --> 00:18:50,359 Speaker 1: much of it is oil priced off the memory of 315 00:18:50,359 --> 00:18:53,560 Speaker 1: a hundred and ten to twenty nine back to the 316 00:18:53,560 --> 00:18:57,000 Speaker 1: glory of seventy four brand. How much is the price 317 00:18:57,160 --> 00:19:02,159 Speaker 1: of oil link into the action were from executives. Actually, 318 00:19:02,240 --> 00:19:04,960 Speaker 1: I don't think a whole lot, Tom, It's more the 319 00:19:04,960 --> 00:19:07,439 Speaker 1: scale of the opportunity because this morning, for example, Oxy 320 00:19:07,520 --> 00:19:09,600 Speaker 1: is talking all about the Permian and the attractions of 321 00:19:09,640 --> 00:19:12,119 Speaker 1: the Permian as the primary driver of the deal. The 322 00:19:12,160 --> 00:19:13,840 Speaker 1: other stuff is sort of, you know, an add on 323 00:19:13,880 --> 00:19:16,119 Speaker 1: that they feel they can do well with. There's a 324 00:19:16,160 --> 00:19:19,040 Speaker 1: synergy element here on both sides. So essentially, you know, 325 00:19:19,080 --> 00:19:23,639 Speaker 1: Anadarka has a famously lavish headquarters, the famous double sized 326 00:19:23,720 --> 00:19:28,200 Speaker 1: dancing stag statue outside. You know, there's there's definitely a 327 00:19:28,280 --> 00:19:30,560 Speaker 1: cost savings that can be known across the board here 328 00:19:30,600 --> 00:19:34,240 Speaker 1: from managements that have wildly overpaid themselves. I mean these 329 00:19:34,280 --> 00:19:37,800 Speaker 1: managements they're hated by shareholders for the amount and they've 330 00:19:37,800 --> 00:19:40,720 Speaker 1: paid themselves for not performing very well. So essentially it's 331 00:19:40,720 --> 00:19:43,239 Speaker 1: an industry that needs to be consolidated and cleaned up. 332 00:19:43,240 --> 00:19:46,879 Speaker 1: And the driver here is cost savings and you know, 333 00:19:47,440 --> 00:19:50,280 Speaker 1: synergy improvements really very much late what we saw in 334 00:19:50,280 --> 00:19:53,040 Speaker 1: the late nineties, Tom, when you had you know, struggling 335 00:19:53,080 --> 00:19:57,360 Speaker 1: managements that had high costs and poor performance, and eventually 336 00:19:57,400 --> 00:20:01,000 Speaker 1: the market takes them out, and that's essentially what's happening here. Paul, 337 00:20:01,040 --> 00:20:02,919 Speaker 1: Just real quickly, what does Chevron do here? Did they 338 00:20:02,920 --> 00:20:07,040 Speaker 1: come back? Yeah? I think that the deal has been 339 00:20:07,080 --> 00:20:09,359 Speaker 1: so well received that I can see them atting a 340 00:20:09,359 --> 00:20:11,520 Speaker 1: bit that the Oxy bit is not a knockout blow. 341 00:20:11,600 --> 00:20:14,440 Speaker 1: I mean, there's clearly a fiduciary duty. It's also hostile, 342 00:20:14,520 --> 00:20:17,800 Speaker 1: which is, you know, again, historically a very bad idea. 343 00:20:17,880 --> 00:20:20,600 Speaker 1: I mean, the last hostile might be of this scale 344 00:20:20,760 --> 00:20:25,760 Speaker 1: might be Texico spaghetti, which ended in the bankruptcy of Texica. UM, 345 00:20:25,760 --> 00:20:27,920 Speaker 1: but it's very unusual to go hostile. That's what makes 346 00:20:27,920 --> 00:20:30,679 Speaker 1: this bit of all the more remarkable. But you know, 347 00:20:30,720 --> 00:20:32,280 Speaker 1: I think that they can take a look at Oxy's 348 00:20:32,280 --> 00:20:36,600 Speaker 1: share price at Chevron see how the shareholders uh don't 349 00:20:36,640 --> 00:20:39,520 Speaker 1: like this deal or KNOXI standpoint and then and then 350 00:20:39,560 --> 00:20:41,480 Speaker 1: maybe bump a little bit and get the deal done. 351 00:20:42,320 --> 00:20:44,840 Speaker 1: Welcome bit from Anadarka's point of view, either, I don't think, Paul, 352 00:20:44,880 --> 00:20:47,520 Speaker 1: that was fantastic. Thanks so much for your context and 353 00:20:47,560 --> 00:20:49,760 Speaker 1: color about this transaction. Is probably not the last we're 354 00:20:49,800 --> 00:20:52,920 Speaker 1: going to hear about this deal. Paul Sanky from Miszoo's 355 00:20:52,920 --> 00:20:55,479 Speaker 1: Securities We love having them on talking all things energy 356 00:20:55,720 --> 00:20:58,399 Speaker 1: and we have got an old fashioned a deal at 357 00:20:58,440 --> 00:21:16,600 Speaker 1: war going on here. This is Bloomberg. We'll digress right now. 358 00:21:16,640 --> 00:21:19,320 Speaker 1: For earnings. It's an annual visit and very important always 359 00:21:19,359 --> 00:21:23,560 Speaker 1: for Bloomberg surveillance. They have always supported Bloomberg surveillance right 360 00:21:23,600 --> 00:21:26,240 Speaker 1: from the beginning. The c f A Institute. I'm a 361 00:21:26,280 --> 00:21:31,720 Speaker 1: member of the clan, the Chartered Financial and Analysts program. 362 00:21:31,760 --> 00:21:34,800 Speaker 1: It is three exams. It's a little hard, to say 363 00:21:34,840 --> 00:21:37,720 Speaker 1: the least. And we are honored that Paul Smith UH, 364 00:21:38,000 --> 00:21:42,280 Speaker 1: their president and chief executive officer, joins us UH today. 365 00:21:42,320 --> 00:21:45,200 Speaker 1: Paul the cf A Institute, and I want to get 366 00:21:45,400 --> 00:21:48,080 Speaker 1: right to the heart of so many younger people listening. 367 00:21:48,560 --> 00:21:51,120 Speaker 1: The question I get as a c f A all 368 00:21:51,200 --> 00:21:54,800 Speaker 1: the time is m B A or cf A. You 369 00:21:54,920 --> 00:21:57,000 Speaker 1: get this ten times a day. Yeah, I do. And 370 00:21:57,040 --> 00:21:58,920 Speaker 1: it's a great question. And and the answer, the owners 371 00:21:58,960 --> 00:22:01,480 Speaker 1: answer is it depends depends where you are in your 372 00:22:01,520 --> 00:22:04,480 Speaker 1: career and what you know you want to do. If 373 00:22:04,520 --> 00:22:07,200 Speaker 1: you know you want to be an investment management b 374 00:22:07,320 --> 00:22:10,040 Speaker 1: A c f A, if you're still at the point 375 00:22:10,080 --> 00:22:12,560 Speaker 1: of your career where you're not that sure and you 376 00:22:12,600 --> 00:22:15,240 Speaker 1: want to keep yourself general, and you want more of 377 00:22:15,880 --> 00:22:19,639 Speaker 1: a broader based financial education or a business education allied 378 00:22:19,640 --> 00:22:22,600 Speaker 1: to a financial education than NBA probably enjoys. The gentleman 379 00:22:22,600 --> 00:22:25,680 Speaker 1: from Yeah, so I went to Fucal School of Business, 380 00:22:25,720 --> 00:22:27,560 Speaker 1: that duke from a NBA, like most Like a lot 381 00:22:27,600 --> 00:22:30,000 Speaker 1: of people in my generation, that was the route. Now 382 00:22:30,040 --> 00:22:33,280 Speaker 1: I think there's I'm sensing that there is a lot 383 00:22:33,359 --> 00:22:36,639 Speaker 1: more demand for or attraction. I guess on a part 384 00:22:36,680 --> 00:22:38,560 Speaker 1: of young people for the CFA would have been the 385 00:22:38,640 --> 00:22:41,600 Speaker 1: numbers in terms of people sitting for the test over 386 00:22:41,600 --> 00:22:43,880 Speaker 1: the last five or ten years, well the last five years, 387 00:22:43,880 --> 00:22:46,680 Speaker 1: it's gone from about two hundred twenty thousand people sitting 388 00:22:46,720 --> 00:22:49,119 Speaker 1: the exams in any one twelve month period to about 389 00:22:49,119 --> 00:22:51,560 Speaker 1: three hundred and sixty thousand today. Most of that is 390 00:22:51,640 --> 00:22:54,400 Speaker 1: driven out of Asia, out of China and India, primarily 391 00:22:55,160 --> 00:22:57,080 Speaker 1: Here in the US, we have had growth, but it's 392 00:22:57,119 --> 00:22:59,840 Speaker 1: it's pretty anemic. It's sort of you know, alongside of 393 00:22:59,840 --> 00:23:02,639 Speaker 1: the economy really wants to percent pranum, that sort of 394 00:23:02,680 --> 00:23:05,439 Speaker 1: thing um. But I think, you know, I think for 395 00:23:05,560 --> 00:23:09,399 Speaker 1: young people the payback is just quicker. Obviously, cf A 396 00:23:09,480 --> 00:23:12,720 Speaker 1: costume maybe five grand if you fail one level let's 397 00:23:12,720 --> 00:23:15,240 Speaker 1: say which most people do on average, an NBA is 398 00:23:15,280 --> 00:23:18,320 Speaker 1: going to cost you multiples of that, and so um, 399 00:23:18,359 --> 00:23:21,680 Speaker 1: there's that angle to it. I think the other thing 400 00:23:21,680 --> 00:23:23,880 Speaker 1: which the NBA should sort of kind of think about, 401 00:23:23,960 --> 00:23:26,199 Speaker 1: is you can fail the cf A. No one's ever 402 00:23:26,240 --> 00:23:30,080 Speaker 1: met anyone who's failed the NBA. So from a perspective 403 00:23:30,160 --> 00:23:32,800 Speaker 1: of of what does it do for you as an individual, 404 00:23:32,840 --> 00:23:34,680 Speaker 1: I think it says. It says in a way a 405 00:23:34,720 --> 00:23:37,119 Speaker 1: little bit more about you than perhaps the average NBA. 406 00:23:37,520 --> 00:23:39,840 Speaker 1: I don't want to, you know, delay the program here, 407 00:23:40,080 --> 00:23:42,320 Speaker 1: rip up the script, but can we talk about that 408 00:23:42,480 --> 00:23:48,639 Speaker 1: question on level two? That was a tough one. I 409 00:23:49,240 --> 00:23:52,800 Speaker 1: won't waste their time on the hilarious of the hilarity 410 00:23:52,960 --> 00:23:56,439 Speaker 1: of that moment. Paul Smith, you are here for the 411 00:23:56,480 --> 00:24:00,040 Speaker 1: research Challenge. Full disclosure. I have had the honor and 412 00:24:00,160 --> 00:24:03,840 Speaker 1: I mean honor of judging the cf A Research Challenge. 413 00:24:03,840 --> 00:24:05,520 Speaker 1: And what this comes down to, folks, and this is 414 00:24:05,600 --> 00:24:09,800 Speaker 1: really important. Tom Keene has never written a twelve page 415 00:24:09,840 --> 00:24:14,880 Speaker 1: report on Disney. Paul Sweeney as in the real world, 416 00:24:15,280 --> 00:24:19,000 Speaker 1: and Paul Smith, this is people that really, really really 417 00:24:19,080 --> 00:24:22,800 Speaker 1: want to be like Paul Sweeney, right absolutely that that's 418 00:24:22,840 --> 00:24:25,280 Speaker 1: for them and it's just wonderful, Tom. I mean, as 419 00:24:25,320 --> 00:24:28,240 Speaker 1: you know, firstly to be surrounded by all these kids 420 00:24:28,280 --> 00:24:31,359 Speaker 1: who are nineteen twenty two years of age, who still 421 00:24:31,400 --> 00:24:34,880 Speaker 1: believe in our world, in our profession, haven't become old 422 00:24:34,920 --> 00:24:38,040 Speaker 1: and cynical, and that in itself is a real buzz 423 00:24:38,080 --> 00:24:41,280 Speaker 1: for me to be with these kids. And and they 424 00:24:41,280 --> 00:24:45,200 Speaker 1: are super smart. As you know as an ex judge, UM, 425 00:24:45,240 --> 00:24:48,600 Speaker 1: really focused on on what they can bring to our 426 00:24:48,640 --> 00:24:51,040 Speaker 1: profession and there our futures. And this is really a 427 00:24:51,240 --> 00:24:53,680 Speaker 1: global story. I know you do this, so talk about 428 00:24:54,200 --> 00:24:57,439 Speaker 1: the non US aspect. Yeah, well, it's it's nine schools 429 00:24:57,440 --> 00:25:02,240 Speaker 1: from around the world, um, and I think about half 430 00:25:02,240 --> 00:25:04,879 Speaker 1: of those are outside of the US. The final that 431 00:25:05,000 --> 00:25:08,920 Speaker 1: takes place tomorrow will be two schools from America Moscow 432 00:25:08,920 --> 00:25:16,639 Speaker 1: State University, UM, Lausanne University, Attano from Manila, and then 433 00:25:16,680 --> 00:25:18,400 Speaker 1: as I say too, from the US who are fighting 434 00:25:18,480 --> 00:25:20,960 Speaker 1: out the too from the America's to be precise, we're 435 00:25:21,000 --> 00:25:24,720 Speaker 1: fighting out today in New York, so we'll know tonight 436 00:25:24,760 --> 00:25:26,960 Speaker 1: who those will be. So it's a wonderful. It's a 437 00:25:26,960 --> 00:25:29,600 Speaker 1: wonderful way of bringing the world together. The final is 438 00:25:29,640 --> 00:25:32,160 Speaker 1: going to be going forward always here in New York City. 439 00:25:32,280 --> 00:25:36,639 Speaker 1: So for the non American universities and for those those students, 440 00:25:36,760 --> 00:25:39,640 Speaker 1: is wonderful opportunity for them to come here, to meet 441 00:25:39,680 --> 00:25:42,000 Speaker 1: guys like you and to be part of the world's 442 00:25:42,000 --> 00:25:46,000 Speaker 1: biggest financial system. We'll explain this is in level four, 443 00:25:46,240 --> 00:25:52,080 Speaker 1: Level five cf A Community Adjusted It. But Die Well, 444 00:25:52,400 --> 00:25:54,159 Speaker 1: I think you know, I was. I was listening. You 445 00:25:54,200 --> 00:25:57,080 Speaker 1: had you had Joe Stieglitz on earlier on and he 446 00:25:57,119 --> 00:25:59,680 Speaker 1: was talking, Yeah, but he was talking about he was 447 00:25:59,720 --> 00:26:03,119 Speaker 1: talking about the fact that UH and and many others 448 00:26:03,119 --> 00:26:05,399 Speaker 1: have done this over the last twelve months, how we 449 00:26:05,480 --> 00:26:08,399 Speaker 1: need to reattach finance to a sense of purpose. And 450 00:26:08,440 --> 00:26:11,080 Speaker 1: I think that's really what we try and do at 451 00:26:11,119 --> 00:26:13,120 Speaker 1: the c f A. That's our mission is to say 452 00:26:13,119 --> 00:26:15,320 Speaker 1: that there's a point to what we do, and it's 453 00:26:15,359 --> 00:26:18,159 Speaker 1: to help grow the societies and the communities that we 454 00:26:18,200 --> 00:26:21,239 Speaker 1: live in. It's not just to enrich ourselves. It's important here. 455 00:26:21,240 --> 00:26:24,560 Speaker 1: And I mentioned community adjusted because which is past suiting 456 00:26:24,600 --> 00:26:27,760 Speaker 1: from we work and all the fancy new unicorn and 457 00:26:27,840 --> 00:26:30,840 Speaker 1: metrics as well. Paul. To be fair here, the cf 458 00:26:30,880 --> 00:26:32,840 Speaker 1: A did a lot of naval gazing in two thousand, 459 00:26:33,080 --> 00:26:37,879 Speaker 1: two thou two thousand ten about how the cf A 460 00:26:37,960 --> 00:26:42,240 Speaker 1: Institute and others got us into this mess, Alice Stiglets, 461 00:26:42,280 --> 00:26:46,840 Speaker 1: we learned then, how better are we protected now in 462 00:26:46,920 --> 00:26:50,600 Speaker 1: terms of transparency of what everybody's doing in the world 463 00:26:50,600 --> 00:26:54,600 Speaker 1: of being counting? Um, I think the accounting profession has 464 00:26:55,040 --> 00:26:57,920 Speaker 1: um a lot of challenges going forward. I'm gonna I'm 465 00:26:58,280 --> 00:27:00,919 Speaker 1: an account and the CFA so like a lot of 466 00:27:01,200 --> 00:27:05,119 Speaker 1: charter holders where sympathy, yes, thank you, I'm a reformed 467 00:27:05,440 --> 00:27:09,960 Speaker 1: or recovering accountant. And I think the accounting profession has 468 00:27:09,960 --> 00:27:15,199 Speaker 1: a real challenge because so much of what the analyst 469 00:27:15,280 --> 00:27:19,400 Speaker 1: looks at today is non gap financial measures. And um, 470 00:27:19,960 --> 00:27:24,240 Speaker 1: there you are making the point earlier on about financial 471 00:27:24,280 --> 00:27:27,879 Speaker 1: technology and Netflix and all these companies that now have 472 00:27:28,040 --> 00:27:32,760 Speaker 1: balance sheets and value that is non substantive, and how 473 00:27:32,800 --> 00:27:37,040 Speaker 1: do we measure that as a profession? I actually, for 474 00:27:37,119 --> 00:27:39,240 Speaker 1: financial analysts, Tom, I sort of turn that into a 475 00:27:39,280 --> 00:27:42,240 Speaker 1: positive that I think that means that the human judgment 476 00:27:42,560 --> 00:27:46,520 Speaker 1: is back, that data is no longer king. What you 477 00:27:46,600 --> 00:27:50,320 Speaker 1: need to do is to use your head. And but 478 00:27:50,320 --> 00:27:52,720 Speaker 1: but I think the financial accounting profession needs to catch 479 00:27:52,800 --> 00:27:54,520 Speaker 1: up a little bit with the way the world works. Well, 480 00:27:54,560 --> 00:27:56,239 Speaker 1: Tom and I spent a lot of time looking at 481 00:27:56,240 --> 00:27:58,840 Speaker 1: the asset management business, and we know that the just 482 00:27:58,880 --> 00:28:01,520 Speaker 1: the head count in our set management is flattered down 483 00:28:01,520 --> 00:28:05,040 Speaker 1: at least in the US UM. You know, they move 484 00:28:05,119 --> 00:28:08,120 Speaker 1: towards a passive investing index and things like that. What 485 00:28:08,480 --> 00:28:11,359 Speaker 1: I'm surprised to still see or hear about the rise 486 00:28:11,400 --> 00:28:15,840 Speaker 1: in the c f A exam folks. Where they going right, Well, well, 487 00:28:15,880 --> 00:28:18,119 Speaker 1: that's a great question. I mean, obviously the developing world 488 00:28:18,200 --> 00:28:23,879 Speaker 1: into traditional jobs, so portfolio management, stock analysis. You know, 489 00:28:23,880 --> 00:28:26,760 Speaker 1: in the emerging market world, alpha can still be found 490 00:28:27,480 --> 00:28:29,400 Speaker 1: for all sorts of reasons that we don't have time 491 00:28:29,400 --> 00:28:32,800 Speaker 1: to go into. But but that's for sure. So traditional 492 00:28:32,880 --> 00:28:35,280 Speaker 1: jobs are growing in the developing world, in the in 493 00:28:35,320 --> 00:28:39,080 Speaker 1: the developing world, in the in America and in Western Europe, 494 00:28:39,480 --> 00:28:42,240 Speaker 1: people are moving much more into wealth management, private wealth 495 00:28:42,280 --> 00:28:47,280 Speaker 1: advisory business. That's a boom area clearly that involves our 496 00:28:47,280 --> 00:28:51,040 Speaker 1: members hugely, because if you're an individual, wealthy individual, you 497 00:28:51,120 --> 00:28:54,640 Speaker 1: deserve someone who has a fiduciary standard and the technical 498 00:28:54,640 --> 00:28:57,200 Speaker 1: and ethical ability to look after your money. So wealth 499 00:28:57,240 --> 00:28:59,840 Speaker 1: advisory in the West is a big business. What time 500 00:28:59,840 --> 00:29:03,360 Speaker 1: for one more question, which which I think is important. 501 00:29:03,360 --> 00:29:05,440 Speaker 1: I was mentioning in a meeting yesterday in Folks, the 502 00:29:05,440 --> 00:29:09,880 Speaker 1: cf A Institute I use every single day in some 503 00:29:09,960 --> 00:29:13,880 Speaker 1: kind of conversation, and I was waxing on philosophical putting 504 00:29:13,920 --> 00:29:17,200 Speaker 1: people to sleep about the value of the Financial Analyst 505 00:29:17,320 --> 00:29:21,400 Speaker 1: Journal and the academics that you're doing out of Charlottesville. 506 00:29:21,400 --> 00:29:23,920 Speaker 1: Tell us the state of that right now, right well? 507 00:29:24,160 --> 00:29:28,480 Speaker 1: Very healthy. Um new editor was appointed, Heidi Rabishama, about 508 00:29:28,640 --> 00:29:33,040 Speaker 1: eighteen months ago. She's trying to continue to improve the 509 00:29:33,120 --> 00:29:36,600 Speaker 1: f A J and making it much more insightful to practitioners. 510 00:29:36,960 --> 00:29:38,800 Speaker 1: I think there was a period maybe four or five 511 00:29:38,880 --> 00:29:41,320 Speaker 1: years ago tom ware it had it got a little 512 00:29:41,800 --> 00:29:44,480 Speaker 1: at Greek, was awful, lot of Greek in it, and 513 00:29:44,760 --> 00:29:46,800 Speaker 1: people were, as you say, we're using it as a 514 00:29:46,840 --> 00:29:51,080 Speaker 1: sleep aid rather than as a professional development tool. Hide 515 00:29:51,080 --> 00:29:55,320 Speaker 1: this done a fabulous job bringing that back to the practitioner. 516 00:29:55,400 --> 00:29:58,320 Speaker 1: Wonderful posts revisited. I gotta leave it there, postmid thank 517 00:29:58,320 --> 00:30:00,240 Speaker 1: you so much. He's the chief executive off for the 518 00:30:00,240 --> 00:30:02,920 Speaker 1: president of the cf A Institute. And a major shout 519 00:30:02,920 --> 00:30:06,600 Speaker 1: out to William Gross and Abby Joseph Cohen who wrote 520 00:30:06,640 --> 00:30:13,120 Speaker 1: there a few years ago. Thanks for listening to the 521 00:30:13,120 --> 00:30:19,640 Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, 522 00:30:20,000 --> 00:30:24,200 Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at 523 00:30:24,240 --> 00:30:28,520 Speaker 1: Tom Keane before the podcast. You can always catch us worldwide. 524 00:30:28,960 --> 00:30:30,040 Speaker 1: I'm Bloomberg Radio