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Speaker 1: When Harold James writes, people in economics stop and consider.

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Speaker 1: He is one of the great historians of the American

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Speaker 1: experiment and of the global experiment. Um truly iconic at Princeton,

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Speaker 1: and he's been given a most interesting job, which is

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Speaker 1: to be an historian of the I m F. Professor James,

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Speaker 1: wonderful to speak to you again. What are you doing for,

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Speaker 1: Madam Legarde. Well, it's great to speak with you, and

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Speaker 1: so I'm going to write to the history or helped

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Speaker 1: to write the history of the International Monetary Fund in

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Speaker 1: the century, so in the years of the enormous expansion

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Speaker 1: and the credit bubble, when people thought that the fund

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Speaker 1: was irrelevant, and then in the aftermath of the financial crisis,

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Speaker 1: when suddenly people want the fund again and need the fund.

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Speaker 1: It's an interesting organization because, as you mentioned, it has

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Speaker 1: gone in and out of favor. It is also morphed

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Speaker 1: over the years from Breton Woods to what it is today.

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Speaker 1: Can you go into it saying it is a success

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Speaker 1: or a failure or can you even judge it in

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Speaker 1: those terms? Well, it's really interesting. At the beginning, it

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Speaker 1: was supposed to be part of an overall security structure,

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Speaker 1: so that the the structure of the IMF exactly replicated

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Speaker 1: the United Nations organization. There were five permanent members on

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Speaker 1: the Security Council, and the five permanent members on the

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Speaker 1: Security Council were also the in the original plan going

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Speaker 1: to be the largest shareholder for the fund and have

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Speaker 1: the permanent seats on the board. But in practice the

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Speaker 1: Soviet Union never joined the I m F and trying

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Speaker 1: to have the revolution, so the the UN evolved in

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Speaker 1: a kind of different direction. But I think at the moment,

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Speaker 1: when you're faced with these big security issues, and many

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Speaker 1: of them have an economic and financial dimension, the security

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Speaker 1: world and the world of the financial flows and the

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Speaker 1: regulation and supervision of them come closer together again, and

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Speaker 1: in that sense they they fund have a has a

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Speaker 1: kind of new mission at the moment. Isn't it always though,

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Speaker 1: or hasn't it often been an organization in search of

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Speaker 1: a mission. It has had to morph. Uh, it's it's

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Speaker 1: goals in its its job over the years, absolutely right.

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Speaker 1: There have been long periods when people really wondered whether

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Speaker 1: you needed and I am aff at all. So it

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Speaker 1: was originally supposed to supervise the fixed exchange rate system,

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Speaker 1: and when President Nixon took the dollar off the gold

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Speaker 1: standards in nine and the fixed exchange rate system collapse.

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Speaker 1: People said you didn't really need the fund anymore, and

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Speaker 1: then for a decade it was looking for a role,

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Speaker 1: and then it found the role as the manager of

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Speaker 1: a death crisis. Professor James, is wonderful they have you

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Speaker 1: on today and with your teaching and study at Cambridge.

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Speaker 1: Most appropriate to ask you in our collective awe over

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Speaker 1: the President of the United States lecturing the British people

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Speaker 1: on whether they should stay in the Union. You're the

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Speaker 1: one to ask, should the President be lecturing the British

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Speaker 1: I think he should. I I think this is absolutely

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Speaker 1: right because the debates in Britain has has taken a

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Speaker 1: very very peculiar turn from at least from my perspective,

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Speaker 1: but I think many people think like this, that there's

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Speaker 1: a there's a discussion, as you know, about Britain leaving

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Speaker 1: the European Union. The vote in a referendum is on

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Speaker 1: the twenty th of June, and it looks very balanced

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Speaker 1: at the moment. There's a serious likelihood that the campaign

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Speaker 1: to win to do to leave might win, and but

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Speaker 1: it's it's very hard to see what what any positive

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Speaker 1: result of that would be UM. It presents enormous risks.

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Speaker 1: And incidentally, the I m F has also been pointing

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Speaker 1: out the risks of of Brexit. UM so it's it's

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Speaker 1: full of risks. And is there a risk of the

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Speaker 1: Prime Minister or the future Prime Minister of the United

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Speaker 1: Kingdom tries to tell Washington what to do. I didn't.

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Speaker 1: I didn't think that's the right kind of analogy to

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Speaker 1: to make for this, because one of the cases I

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Speaker 1: think that many people who are sympathetic to Brexit make

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Speaker 1: is that Britain doesn't really need Europe and Europe is

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Speaker 1: in decline. That Britain has a strong relationship with the

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Speaker 1: rest of the world, exports to China and India, but

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Speaker 1: above all has a really strong relationship to the United States.

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Speaker 1: And so the the hopes of the Brexit hears that

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Speaker 1: are often pinned on this idea. But those so called anglersphere.

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Speaker 1: But in those circumstances, it seems to be entirely appropriate

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Speaker 1: for the President of the United States to say, look,

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Speaker 1: this is not realistic. We're interested from this side of

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Speaker 1: the Atlantic in Britain, because Britain is part of Europe.

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Speaker 1: That is trying to meet common security challenges, common economic challenges.

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Speaker 1: Let's come back Harold James with us. He is a

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Speaker 1: historian for the International Monetary Phone and of course at

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Speaker 1: Princeton University. And I might point out an incredibly well

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Speaker 1: timed Harold James is our definitive scholar on Germany and

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Speaker 1: particularly on their banking system. We will speak to Harold

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Speaker 1: James about whether Deutsche Bank with all the great child

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Speaker 1: challenges of German banking, of course, German banking within a

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Speaker 1: time of negative interest rates something I know, Madame le Guard,

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Speaker 1: I mean, Madame lec Guard. If you're listening, I know

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Speaker 1: you want me to ask Harold James about negative interest

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Speaker 1: rates in Germany. And we'll do that. Michael McKee, Gainesville, Florida.

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Speaker 1: I'm Tom Keene in New York. We will continue with

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Speaker 1: Professor James. A churn to the market. It is a Friday,

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Speaker 1: summer day with a decided churn. I would point out

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Speaker 1: weekend one ten s euro one. All right, let's check

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Speaker 1: out with Michael bar Now I'll get the latest world

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Speaker 1: in initial headlines. Michael, Mike time, Thank you very much.

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Speaker 1: Government officials from around the world today will sign the

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Speaker 1: Paris Global Climate Agreement. The signing will be held during

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Speaker 1: a ceremony at the u N. Countries are required to

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Speaker 1: set non binding targets for reducing emissions. There's word President

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Speaker 1: Obama will become the first sitting US president to visit Rosiuma,

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Speaker 1: Japan since the atomic bomb was dropped on the city

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Speaker 1: in World War Two, as according to the Nik Business Daily,

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Speaker 1: that will take place in late May. President Obama is

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Speaker 1: in the UK today and we'll meet with British Prime

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Speaker 1: Minister David Cameron. And autopsy is scheduled today and to

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Speaker 1: the death of the singer was found dead by sheriff's

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Speaker 1: deputies who yesterday have been called to a suburban Minneapolis compound.

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Speaker 1: Global News twenty four hours a day, powered by our

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Speaker 1: twenty four hundred journalists more than one fifty news bureaus

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Speaker 1: from around the world. I am Michael Barr, Mike Tom, Michael,

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Speaker 1: thanks so much. I just gotta say, folks, on a Friday,

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Speaker 1: I'll speak for Michael McKee. We don't have a job,

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Speaker 1: Michael Mayo, Jeff Sex earlier we talked to and Harold

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Speaker 1: James now from Princeton. That is a wonderful thing. Stay

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Speaker 1: with us. Bloomberg Surveillance. The news update brought you by

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Speaker 1: is a Bloomberg Business Flash and I'm Karen my scale.

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Speaker 1: US stock index futures are a little changed on this

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Speaker 1: busy morning for earning. So let's go to the First

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Speaker 1: Word breaking news desk for today's morning call. And here's

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Speaker 1: Bill Maloney. Good morning Bill, Good morning Karen. That's right.

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Speaker 1: US futures remained quiet today. DOWN futures currently lowered by

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Speaker 1: four points, smps are unchanged, and NAZAC futures lower by

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Speaker 1: seven and a half. The U S tenual at one

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Speaker 1: point eight seven per cent on the US economic front

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Speaker 1: at nine forty five market US manufacturing p m I

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Speaker 1: and in other news, The Wallstreet General reported Valiant is

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Speaker 1: seeking Parago's Papa as new CEO, and Bernstein said Coca

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Speaker 1: Cola could be the next big target for a b

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Speaker 1: MBV regarded earnings last night, Alphabet, Microsoft, Starbucks, and Visa

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Speaker 1: are all trading lower pre market, Norfolk Southern is trading higher.

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Speaker 1: While today Honeywell raised the low end of EURIPS views,

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Speaker 1: G and American Airlines z EPs beat, Caterpillar cut the

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Speaker 1: high end of twenty sixteen sales views, and McDonald's revenue

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Speaker 1: EPs and Global Comp sales all topped estimates. Finally, some

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Speaker 1: of your Wallstreet upgrades and downgrade. American Express cut the

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Speaker 1: whole of that. Deutsche Bank at JP, morgan A d

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Speaker 1: M raised to neutral, Bunky cut to neutral, United Continental

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Speaker 1: cut to neutral at stern a G and your Folk

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Speaker 1: Southern raised to buy over at UBS live in the

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Speaker 1: first breaking newsdask on Bill Maloney car thanks Bill to

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Speaker 1: hear live breaking news over your Bloomberg type squawk A

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Speaker 1: go on your terminal. That's squ you a w K

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Speaker 1: go and that's a Bloomberg business flash. Tom and Mike Karen,

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Speaker 1: thanks so much Bloomberg Surveillance. This morning brought you by Investco.

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Speaker 1: Investing isn't about meeting benchmarks, It's about achieving goals. Find

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Speaker 1: out how invest goes high conviction approach can help visit

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Speaker 1: investco dot com slash high conviction Michael McKee and Gainesville Florida.

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Speaker 1: I'm Tom keenan New York and we are honored to

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Speaker 1: bring you Harold James of Princeton and now at the

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Speaker 1: i m F where he is i m F Historian,

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Speaker 1: Professor James. You are the definitive voice on Germany within

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Speaker 1: our country. The President meets the Queen today and work

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Speaker 1: within England. Tell me about the generational shift that you

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Speaker 1: perceive in Germany. There was a Bismarck Germany, there was

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Speaker 1: World War Two, and then there were the leaders of

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Speaker 1: our child. So it's Conrad at an Hour, Billy Brand

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Speaker 1: and the rest. What is the new Germany? Where are

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Speaker 1: they heading towards? It's a very uncertain Germany today. But

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Speaker 1: I think also it's a Germany that is conscious that

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Speaker 1: it's in a new position of leadership in Europe. And

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Speaker 1: Mrs mackeo is undoubtedly the European figure. So a long

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Speaker 1: time ago, Henry Kissinger is supposed to have asked the

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Speaker 1: question who do I call when I want to speak

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Speaker 1: to Europe? And there wasn't an answer at that time.

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Speaker 1: And now it's really clear that if the American President

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Speaker 1: wants to speak to Europe, he speaks to the Chancellor

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Speaker 1: of Germany. UM. But there's a kind of pushback against

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Speaker 1: Mrs Mantell in Germany. UM, in large part, I think

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Speaker 1: driven by the crisis that developed last summer, since the

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Speaker 1: flow of very very large numbers of Syrian and other

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Speaker 1: refugees into Germany. I don't I don't speak German, so

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Speaker 1: let me do it in French. Appoint mercle the deluge.

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Speaker 1: I mean, who who's next? There doesn't seem to be

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Speaker 1: anybody who can step in, so she's weakened, but she

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Speaker 1: she doesn't and can't go away. That's that's absolutely right

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Speaker 1: that there is no obvious alternative to Mrs Mantell, and

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Speaker 1: it's in part on her side a careful strategy. She's

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Speaker 1: destroyed one crown prince after another, so there's no obvious successor,

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Speaker 1: and there's no obvious reason why she should step down

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Speaker 1: at the moment, and I think most people are expecting

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Speaker 1: that she would go into the next election lead Germany

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Speaker 1: after the next election, put a new coalition together. She's

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Speaker 1: unpopular with the right of her party, but she's actually

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Speaker 1: very very popular with the left center party is with

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Speaker 1: the Social Democrats and bubble with the Green Party. Within

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Speaker 1: the political economics, you wrote an acclaim in folks, I

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Speaker 1: mean acclaimed book out of all things Deutsche Bank. Did

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Speaker 1: you realize the impact that book would have when you

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Speaker 1: when you wrote it, Well, it was at this this

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Speaker 1: very strange movement in the nineties when when everything was

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Speaker 1: changing politically, and you know, also the legacy of the

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Speaker 1: Second World War was being approached in a different way

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Speaker 1: and people were thinking about the big property transfer robberies

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Speaker 1: that have taken place, and that that was really a

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Speaker 1: major theme of that book and that sets up perfectly

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Speaker 1: the Deutsche Bank of Now. Maybe you're not prepared to

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Speaker 1: comment on this or particularly your affiliation with the International

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Speaker 1: Monetary Fund, but Professor James, can you comment on the

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Speaker 1: challenges of the new Deutsche Bank given that unique access

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Speaker 1: between Germany and London. Well, it's it's I think one

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Speaker 1: of those areas where there are obviously going to be

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Speaker 1: enormous issues if they that the British would leave the

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Speaker 1: EU because a lot of dutcher Banks operations international operations

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Speaker 1: shifted to London and in some ways Doutcher Bank isn't

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Speaker 1: really very much of a German bank anymore. But over

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Speaker 1: the past years it's been trying to do what they

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Speaker 1: they they've talked about it as a culture change or

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Speaker 1: a culture shift, and actually get back a bit from

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Speaker 1: this international investment banking that they pursued and really didn't

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Speaker 1: do very well at and it was very, very risky

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Speaker 1: um in two thousand and eight in the immediate aftermath

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Speaker 1: of Lehman. Obviously every international bank was was vulnerable, but

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Speaker 1: the vulnerability of Dutcher Bank was enormous and if it

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Speaker 1: had required a rescue by the German government at that point,

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Speaker 1: it would have really been too large to rescue. So

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Speaker 1: you know, the same kind of discussion in Germany as

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Speaker 1: you have in other countries. Those large banks have to

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Speaker 1: be safer, and the regulators are pushing in that direction. Well,

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Speaker 1: this kind of brings us back to where we started

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Speaker 1: with with the I m F. Is it going to

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Speaker 1: be needed even more than it has been in Europe

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Speaker 1: and under Battom Leguard, Is it actually going to play

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Speaker 1: a role. It's very peculiar that it said it was

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Speaker 1: needed in Europe Patrol. I mean, I think this is

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Speaker 1: going to be one of the big big questions when

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Speaker 1: you look at the long term legacy if the the institution,

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Speaker 1: because it would have been much better if Europe had

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Speaker 1: dealt with the situation on its own in when the

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Speaker 1: when the Great Crisis first first emerged, but the many

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Speaker 1: people in Europe, including the German government, then it didn't

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Speaker 1: feel the Europe have the technical capacity in the scale

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Speaker 1: of the outside judgment to be able to deal with

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Speaker 1: a complicated crisis in grease, and so the fund was

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Speaker 1: brought in at that point and it's it's it's involved

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Speaker 1: it in all kinds of issues that it really wasn't

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Speaker 1: ideally set up to face. This has been wonderful. Thank

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Speaker 1: you so much, Harold James and for Inston and I

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Speaker 1: am f historian as well. Michael McKeon Gainesville, Florida. I'm

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Speaker 1: Tom keane in New York. You're listening to Bloomberg's surveillance

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Speaker 1: coming up with all due respect. Highlight brought you by Landover.

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