1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jailey. We bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com, 5 00:00:23,920 --> 00:00:30,960 Speaker 1: and of course, on the Bloomberg terminal. Richard Hass has 6 00:00:31,000 --> 00:00:33,239 Speaker 1: a very busy Monday morning because he is at the 7 00:00:33,280 --> 00:00:36,960 Speaker 1: center of a raging debate of the past in Afghanistan. 8 00:00:37,040 --> 00:00:39,640 Speaker 1: He's at the Council on Foreign Relations. I can't say 9 00:00:39,720 --> 00:00:42,320 Speaker 1: enough about their website this morning to give you depth. 10 00:00:42,680 --> 00:00:44,800 Speaker 1: And also my book of the Summer and Number of 11 00:00:44,800 --> 00:00:48,240 Speaker 1: Summers Ago the World a brief introduction, I would suggest 12 00:00:48,240 --> 00:00:51,839 Speaker 1: Ambassador Hass. It needs an update, Richard Ass. I want 13 00:00:51,880 --> 00:00:53,479 Speaker 1: to get right to it, and I want to get 14 00:00:53,479 --> 00:00:56,200 Speaker 1: to the movement forward. As I'll speak to Thomas Barfield 15 00:00:56,800 --> 00:00:59,920 Speaker 1: coming up. Is this Taliban the same as the talib 16 00:01:00,040 --> 00:01:04,120 Speaker 1: and of two thousand two if anything gets worse, Tom, 17 00:01:04,160 --> 00:01:07,319 Speaker 1: because now it's had a chance to regroup, it now 18 00:01:07,400 --> 00:01:11,199 Speaker 1: has access to American arms, and it's proven it's its 19 00:01:11,360 --> 00:01:15,600 Speaker 1: resilience and the opposition in Afghanistan is if anything weaker 20 00:01:15,640 --> 00:01:17,679 Speaker 1: than it was, so it's at least as bad. There's 21 00:01:17,720 --> 00:01:20,160 Speaker 1: no sign, what you might say, of any mellowing by 22 00:01:20,200 --> 00:01:23,240 Speaker 1: the Taliban. A careful read of Richard Hass The world 23 00:01:23,440 --> 00:01:26,240 Speaker 1: is a vacuum gets filled. It's physics one O one 24 00:01:26,240 --> 00:01:28,920 Speaker 1: Investador House, I know you took three courses in physics. 25 00:01:29,240 --> 00:01:32,760 Speaker 1: It Overlain a few years ago. Is the vacuum going 26 00:01:32,800 --> 00:01:35,520 Speaker 1: to be filled by China with the forty seven mile 27 00:01:35,600 --> 00:01:40,679 Speaker 1: boarder they have constructed by the British in eight No, 28 00:01:40,880 --> 00:01:43,440 Speaker 1: the Chinese don't want to get into Afghanistan. What they 29 00:01:43,480 --> 00:01:46,440 Speaker 1: want tom is to keep essentially Afghanistan out of China. 30 00:01:46,800 --> 00:01:49,520 Speaker 1: They are worried about their own Muslim minorities. The last 31 00:01:49,520 --> 00:01:53,280 Speaker 1: thing they want is for them to be radicalized. Indeed, 32 00:01:53,320 --> 00:01:55,880 Speaker 1: none of the neighbors, with the exception of Pakistan, I 33 00:01:55,920 --> 00:01:58,680 Speaker 1: think is a lot of appethete for getting into Afghanistan. 34 00:01:58,920 --> 00:02:01,000 Speaker 1: They want to keep it orrisks, they want to keep 35 00:02:01,000 --> 00:02:03,280 Speaker 1: its gons, they want to keep its drugs out of 36 00:02:03,280 --> 00:02:06,600 Speaker 1: their country. Also, one other thing, they're worried about refugee flows. 37 00:02:06,800 --> 00:02:08,480 Speaker 1: And that's the other thing that people are going to 38 00:02:08,520 --> 00:02:11,000 Speaker 1: be focused on. Let's swing five hundred miles west to 39 00:02:11,200 --> 00:02:14,640 Speaker 1: Iran in the in the wonderful frontline effort that was 40 00:02:14,680 --> 00:02:18,720 Speaker 1: done a number of weeks ago. There it is sunny 41 00:02:18,840 --> 00:02:21,639 Speaker 1: and it is she is that ultimately what this will 42 00:02:21,680 --> 00:02:25,440 Speaker 1: be about. No, again, I don't see particular friction there 43 00:02:25,520 --> 00:02:31,280 Speaker 1: between Iran and Afghanistan. We've got problems with Iran, but 44 00:02:31,520 --> 00:02:33,480 Speaker 1: that's to do with everything they're doing in the region, 45 00:02:33,520 --> 00:02:37,640 Speaker 1: their nuclear program. This is uh Look, Iran has been 46 00:02:37,680 --> 00:02:40,760 Speaker 1: helpful in the past twenty years ago, Tom, the Iranians 47 00:02:40,760 --> 00:02:44,400 Speaker 1: are actually helpful and standing up a post Aliban government 48 00:02:44,440 --> 00:02:47,600 Speaker 1: in Afghanistan. Why they want to stable neighbor. They don't 49 00:02:47,639 --> 00:02:51,200 Speaker 1: want one that's producing and exporting drugs. So I don't 50 00:02:51,200 --> 00:02:53,040 Speaker 1: think Iran is the place to look either for the 51 00:02:53,080 --> 00:02:55,760 Speaker 1: problem here or for the solution. So Richard, where do 52 00:02:55,800 --> 00:02:58,000 Speaker 1: we look? We looked at the allies who feel somewhat 53 00:02:58,040 --> 00:03:01,200 Speaker 1: betrayed by the U S. No, the answer is there 54 00:03:01,320 --> 00:03:03,600 Speaker 1: is no solution to look for. This is now the 55 00:03:03,680 --> 00:03:07,360 Speaker 1: new reality in Afghanistan. It's going to be awful, awful 56 00:03:07,400 --> 00:03:11,200 Speaker 1: for Afghans. The danger is they invite terrorists back in, 57 00:03:11,360 --> 00:03:16,079 Speaker 1: or terrorists invite them themselves back in. Obviously, America's reputation 58 00:03:16,240 --> 00:03:20,480 Speaker 1: for consistency and reliability has taken a hit. I worry 59 00:03:20,480 --> 00:03:24,639 Speaker 1: about the long term consequences for Pakistan. It's ironic Pakistan 60 00:03:24,720 --> 00:03:27,960 Speaker 1: provided a sanctuary which kept the Taliban alive, helped bring 61 00:03:28,040 --> 00:03:30,800 Speaker 1: us to this point. It's quite possible some in the 62 00:03:30,800 --> 00:03:34,280 Speaker 1: Taliban may now want to go ahead and further radicalize Pakistan. 63 00:03:34,680 --> 00:03:36,560 Speaker 1: So in the medium to long run, I would I 64 00:03:36,560 --> 00:03:38,800 Speaker 1: would worry about that. But I think for the United States, 65 00:03:38,800 --> 00:03:41,200 Speaker 1: the focus has got to be on getting as many 66 00:03:41,240 --> 00:03:43,560 Speaker 1: Afghans who work with us out of that country. It's 67 00:03:43,560 --> 00:03:45,960 Speaker 1: outrageous that we would leave them behind, that we would 68 00:03:46,120 --> 00:03:48,520 Speaker 1: abandon them. And then I think we have to go 69 00:03:48,600 --> 00:03:52,080 Speaker 1: around the world trying to demonstrate that the awful scenes 70 00:03:52,120 --> 00:03:55,880 Speaker 1: that we're seeing in Afghanistan are not somehow representative of 71 00:03:55,880 --> 00:03:59,480 Speaker 1: the totality of American foreign policy. We've got to persuade 72 00:03:59,520 --> 00:04:02,400 Speaker 1: people that they should not read too much into this. Richard. 73 00:04:02,400 --> 00:04:04,400 Speaker 1: A lot of officials have said, this is not a 74 00:04:04,440 --> 00:04:07,360 Speaker 1: war we could win. We basically were keeping the peace 75 00:04:07,360 --> 00:04:11,360 Speaker 1: and sacrificing American soldiers and frankly soldiers of the Allies 76 00:04:11,400 --> 00:04:14,480 Speaker 1: to keep a peace that was unnatural in this nation. 77 00:04:14,800 --> 00:04:16,680 Speaker 1: What do you say to counter that why it was 78 00:04:16,720 --> 00:04:19,880 Speaker 1: important in your view, for US troops to remain in 79 00:04:19,920 --> 00:04:23,080 Speaker 1: Afghanistan at a much lower rate than they had been 80 00:04:23,160 --> 00:04:26,159 Speaker 1: say five ten years ago. Look, we had reduced the 81 00:04:26,240 --> 00:04:29,640 Speaker 1: US military presence to around three thousand. There hasn't been 82 00:04:29,640 --> 00:04:33,600 Speaker 1: an American combat debt for for eighteen months, so this 83 00:04:33,680 --> 00:04:37,120 Speaker 1: is a situation. I thought that for a relatively modest investment, 84 00:04:37,160 --> 00:04:40,120 Speaker 1: we were getting good results. The American presence was essential 85 00:04:40,160 --> 00:04:42,920 Speaker 1: to keep the eight nine thousand Allied troops there, and 86 00:04:42,960 --> 00:04:48,000 Speaker 1: they provided a psychological and military floor for the Afghans. 87 00:04:48,000 --> 00:04:49,760 Speaker 1: So no, it wasn't going to give you peace, It 88 00:04:49,880 --> 00:04:52,800 Speaker 1: wasn't going to give you a military victory. What it 89 00:04:52,839 --> 00:04:56,120 Speaker 1: was going to do is avoid bringing about exactly what 90 00:04:56,160 --> 00:04:58,560 Speaker 1: we're seeing on our screens. And I think sometimes in 91 00:04:58,640 --> 00:05:01,719 Speaker 1: foreign policy you've how to measure success not by what 92 00:05:01,800 --> 00:05:04,680 Speaker 1: you accomplish, but but but why what you avert? And 93 00:05:04,760 --> 00:05:07,960 Speaker 1: by that definition, this was a success and we undermined 94 00:05:08,040 --> 00:05:11,360 Speaker 1: our own policy. Richard hasas with all of your experience, 95 00:05:11,520 --> 00:05:14,279 Speaker 1: this comes back to and it's of our childhood Scoop 96 00:05:14,400 --> 00:05:18,000 Speaker 1: Jackson of Washington State and maybe on the late Donald 97 00:05:18,080 --> 00:05:23,599 Speaker 1: Rumsfeld and others, it's this thing called neo conservatism. How 98 00:05:23,640 --> 00:05:26,960 Speaker 1: do the neo conservative crew pick up the pieces in 99 00:05:27,080 --> 00:05:31,440 Speaker 1: your Washington a much or neo conservatives matter a whole 100 00:05:31,480 --> 00:05:34,520 Speaker 1: lot right now because they haven't an ambitious farm policy. 101 00:05:34,720 --> 00:05:37,520 Speaker 1: They want to transform the world. They're often want the 102 00:05:37,560 --> 00:05:39,600 Speaker 1: United States to act alone. I would think Tom the 103 00:05:39,600 --> 00:05:42,320 Speaker 1: biggest challenge for the United States right now, and by 104 00:05:42,320 --> 00:05:45,640 Speaker 1: the way, across his party lines, just like Afghanistan policy 105 00:05:46,200 --> 00:05:48,200 Speaker 1: was something that crossed party lines, is that we do 106 00:05:48,320 --> 00:05:52,440 Speaker 1: too little, that the United States essentially pulls back from 107 00:05:52,480 --> 00:05:56,880 Speaker 1: the world, focuses on our challenges here at home, and 108 00:05:57,320 --> 00:05:59,640 Speaker 1: essentially under reaches in the world. And if I were 109 00:06:00,000 --> 00:06:03,200 Speaker 1: wire Las crystal Ball, I would be more worried about 110 00:06:03,200 --> 00:06:07,080 Speaker 1: American underreach going forward than overreach. Well, I mean, did 111 00:06:07,120 --> 00:06:09,840 Speaker 1: you go to zacurious post American world? What does our 112 00:06:09,920 --> 00:06:16,320 Speaker 1: post Afghanistan world look like? Well, in Afghanistan, it looks horrific. Uh, 113 00:06:16,560 --> 00:06:18,120 Speaker 1: you know, we'reund the rest of the world. That's up 114 00:06:18,160 --> 00:06:20,120 Speaker 1: for GUS still for us to determine. Are we going 115 00:06:20,160 --> 00:06:22,839 Speaker 1: to stand by our allies, Are we going to stand 116 00:06:22,880 --> 00:06:25,320 Speaker 1: up to Russia and China? Are we going to actually 117 00:06:25,360 --> 00:06:29,640 Speaker 1: do more to combat climate change? To improve global health? 118 00:06:29,680 --> 00:06:33,920 Speaker 1: Machinery there's nothing about Afghanistan, TOM that stops UPS from 119 00:06:34,040 --> 00:06:38,680 Speaker 1: increasing our exports of COVID vaccines. There's nothing about Afghanistan, 120 00:06:38,760 --> 00:06:42,120 Speaker 1: TOM that stops UPS from joining the Asia Pacific Regional 121 00:06:42,160 --> 00:06:46,440 Speaker 1: trade Agreements. I can go on. So again, I disagree 122 00:06:46,480 --> 00:06:49,080 Speaker 1: fundamentally with what the last administration and this one have 123 00:06:49,160 --> 00:06:52,200 Speaker 1: done in Afghanistan, but that doesn't stop us from doing 124 00:06:52,279 --> 00:06:54,359 Speaker 1: other smart things in the world which are just to 125 00:06:54,400 --> 00:06:55,960 Speaker 1: sort of put a bow on this. You were talking 126 00:06:56,000 --> 00:06:58,400 Speaker 1: about this concern about allies and the perception of the 127 00:06:58,480 --> 00:07:01,080 Speaker 1: United States and the trustworthy US of some of the 128 00:07:01,120 --> 00:07:04,159 Speaker 1: assertions and involvement that the US has had. You're concerned 129 00:07:04,160 --> 00:07:07,320 Speaker 1: about under involvement with some of these other initiatives that 130 00:07:07,320 --> 00:07:09,920 Speaker 1: you're talking about, whether it's combating global warming, whether it's 131 00:07:09,960 --> 00:07:13,960 Speaker 1: combating the pandemic. How much cloud has President Biden lost 132 00:07:14,040 --> 00:07:17,679 Speaker 1: on the international stage among allies who already are somewhat 133 00:07:17,720 --> 00:07:21,440 Speaker 1: skeptical of the U s promises. Look, this is I'm 134 00:07:21,480 --> 00:07:23,360 Speaker 1: not going to sugarcoat it. This is this is a 135 00:07:23,440 --> 00:07:26,960 Speaker 1: bad thing. He gained some cloud by the original response 136 00:07:27,000 --> 00:07:31,480 Speaker 1: to COVID increasing vaccine production and distribution. He gained cloud 137 00:07:31,520 --> 00:07:35,360 Speaker 1: by the performance of the US economy. This is clearly 138 00:07:36,160 --> 00:07:38,960 Speaker 1: a setback. That said he's got three and a half 139 00:07:39,080 --> 00:07:42,400 Speaker 1: years to to go to to to make a record, 140 00:07:42,680 --> 00:07:46,200 Speaker 1: But there's no way this is anything but something significant 141 00:07:46,240 --> 00:07:48,840 Speaker 1: in the deficit columns. This this, this will hurt both 142 00:07:48,880 --> 00:07:51,720 Speaker 1: the reality and the perception of the United States in 143 00:07:51,760 --> 00:07:54,400 Speaker 1: the world, and it reinforces a narrative that was already 144 00:07:54,400 --> 00:07:57,600 Speaker 1: out there, which is that Disunited States is different than 145 00:07:57,640 --> 00:08:01,080 Speaker 1: the old United States that had tremendous staying power throughout 146 00:08:01,120 --> 00:08:04,160 Speaker 1: the Cold War. Richard tremendous pace in Project Syndicate over 147 00:08:04,160 --> 00:08:06,240 Speaker 1: the weekend. Thanks for writing now before we let you go, 148 00:08:06,840 --> 00:08:09,720 Speaker 1: a message for this administration. We've heard a limited amount 149 00:08:09,720 --> 00:08:11,880 Speaker 1: from the President over the weekend. What's your number one 150 00:08:11,920 --> 00:08:15,640 Speaker 1: question for them this morning? What more can they do 151 00:08:15,720 --> 00:08:18,840 Speaker 1: to help these Afghans who are trapped in the country 152 00:08:18,880 --> 00:08:22,840 Speaker 1: and are vulnerable. It's I just find that I find 153 00:08:22,880 --> 00:08:26,160 Speaker 1: it painful to to watch. I think we've got to 154 00:08:26,200 --> 00:08:28,400 Speaker 1: do more to help them. We can't simply be focused 155 00:08:28,640 --> 00:08:31,600 Speaker 1: on getting Americans out. And then the real question is 156 00:08:31,600 --> 00:08:33,400 Speaker 1: what we've been talking about here, how do we how 157 00:08:33,400 --> 00:08:37,760 Speaker 1: does this administration prove to the world that American foreign 158 00:08:37,760 --> 00:08:41,360 Speaker 1: policy should not be understood through this lens or or prison. 159 00:08:41,679 --> 00:08:43,959 Speaker 1: We have got to be active and we've got to 160 00:08:44,000 --> 00:08:47,400 Speaker 1: be smart elsewhere. We can't undo the mistakes we've made 161 00:08:47,440 --> 00:08:50,480 Speaker 1: in Afghanistan. Let's be blunt. Doesn't mean though, we have 162 00:08:50,559 --> 00:08:53,720 Speaker 1: to make mistakes elsewhere. Important words this morning, Richard, Thank you. 163 00:08:53,880 --> 00:09:02,320 Speaker 1: Richard has their Council on Foreign Relations President. Right now, 164 00:09:02,320 --> 00:09:05,640 Speaker 1: we're gonna digress with Christopher Morange. He's the Valley Funds, 165 00:09:06,360 --> 00:09:09,920 Speaker 1: their chief investment officer. Of where the value is right now, 166 00:09:10,000 --> 00:09:13,400 Speaker 1: Chris Marangie, where is the value going into September of 167 00:09:13,480 --> 00:09:16,960 Speaker 1: two thousand twenty one. Oh, it's certainly harder to find 168 00:09:16,960 --> 00:09:18,640 Speaker 1: than a year ago, but there is still value out 169 00:09:18,640 --> 00:09:20,679 Speaker 1: there in the market. And the question is is now 170 00:09:20,720 --> 00:09:23,320 Speaker 1: the time to jump back in the reflation trade if 171 00:09:23,360 --> 00:09:28,200 Speaker 1: you missed it nine months ago? And I think typically yes, 172 00:09:28,280 --> 00:09:32,320 Speaker 1: there are some areas that were um, perhaps exuberant uh 173 00:09:32,360 --> 00:09:36,400 Speaker 1: and have now corrected. UM. Still like areas like live 174 00:09:36,520 --> 00:09:40,160 Speaker 1: entertainment between we think we'll come back strongly again this 175 00:09:40,320 --> 00:09:44,560 Speaker 1: fall into next year. UM. You know as well as UH, 176 00:09:44,679 --> 00:09:48,720 Speaker 1: the consumer impulse to purchase is still there. UM. Obviously, 177 00:09:48,760 --> 00:09:51,120 Speaker 1: as we heard from Kate, you know, some supply chain 178 00:09:51,160 --> 00:09:53,360 Speaker 1: issues which are constraining of the ability to meet that 179 00:09:53,440 --> 00:09:56,240 Speaker 1: demand you've got, And folks on radio, you need to 180 00:09:56,280 --> 00:09:59,280 Speaker 1: understand that the secret weapon of Christopher Marange is all 181 00:09:59,320 --> 00:10:01,960 Speaker 1: the Manila full olders he's got over his left shoulder, 182 00:10:02,360 --> 00:10:06,760 Speaker 1: covering every company out there. What is the knowledge base 183 00:10:06,880 --> 00:10:10,680 Speaker 1: that you and Mario Gabelly have right now company to company? 184 00:10:10,760 --> 00:10:13,160 Speaker 1: Do you have a confidence in what you're hearing or 185 00:10:13,200 --> 00:10:15,720 Speaker 1: is it a mystery for you into the next round 186 00:10:15,720 --> 00:10:19,040 Speaker 1: of conference calls? Yeah, so, you know, we don't put 187 00:10:19,080 --> 00:10:21,400 Speaker 1: a lot of weight in things like the Empire in decks. 188 00:10:21,480 --> 00:10:23,680 Speaker 1: We you know, we're listening to what companies are saying 189 00:10:23,720 --> 00:10:26,000 Speaker 1: on their conference calls. What are they saying some of 190 00:10:26,000 --> 00:10:29,320 Speaker 1: those meetings, and and it's pretty much universally the demand 191 00:10:29,400 --> 00:10:32,160 Speaker 1: is there. It's hard to meet that demand. Um supply 192 00:10:32,240 --> 00:10:35,400 Speaker 1: chain issues affecting not just manufacturing companies, but you know, 193 00:10:35,520 --> 00:10:37,840 Speaker 1: service companies that just can't get the stuff to install 194 00:10:37,880 --> 00:10:40,600 Speaker 1: in people's homes for example. And and the concern one 195 00:10:40,640 --> 00:10:43,320 Speaker 1: concern is that could worsen is as the rest of 196 00:10:43,320 --> 00:10:45,680 Speaker 1: the world is China and Asia in particular, you know, 197 00:10:45,720 --> 00:10:49,439 Speaker 1: deal with the delta variant. How concerned are you about 198 00:10:49,480 --> 00:10:51,680 Speaker 1: margin pressures. This seems to be one of the dividing 199 00:10:51,720 --> 00:10:54,280 Speaker 1: factors between the bulls and the bears. Are the less 200 00:10:54,280 --> 00:11:00,840 Speaker 1: bullish of for US equities, Yeah, you know, the we 201 00:11:00,920 --> 00:11:03,360 Speaker 1: tend to focus. We we love companies obviously that have 202 00:11:03,760 --> 00:11:07,720 Speaker 1: uh pricing power. We've always focused on those kind of companies, UM, 203 00:11:07,760 --> 00:11:11,920 Speaker 1: you know, companies with the control scarce resources, whether that's uh, 204 00:11:12,080 --> 00:11:17,400 Speaker 1: you know, broadband, UM, consumative brand of products, UM, waste collection, 205 00:11:17,440 --> 00:11:20,040 Speaker 1: et cetera, and um. You know, they've been able to 206 00:11:20,559 --> 00:11:22,199 Speaker 1: take price and pass some of that probably through a 207 00:11:22,240 --> 00:11:24,440 Speaker 1: maintain margin. But yeah, it's gonna it's gonna be hard. 208 00:11:24,640 --> 00:11:26,560 Speaker 1: You know, a lot of companies benefited in the first 209 00:11:26,559 --> 00:11:29,720 Speaker 1: and second quarter from the tail winds of cutting causes 210 00:11:29,720 --> 00:11:32,280 Speaker 1: deeply in the crisis a year ago, and now those 211 00:11:32,280 --> 00:11:35,320 Speaker 1: costs are gonna start coming back, and so it is 212 00:11:35,320 --> 00:11:37,280 Speaker 1: something that we're watching and we're a little concerned about 213 00:11:37,280 --> 00:11:38,800 Speaker 1: for the next year. I don't think you're focused on 214 00:11:39,000 --> 00:11:42,199 Speaker 1: value right now. We're hearing a real bifurcation between those 215 00:11:42,200 --> 00:11:44,600 Speaker 1: who say it's time to keep leaning into the cyclical trade, 216 00:11:44,920 --> 00:11:48,400 Speaker 1: especially after the under underperformance of late and others who 217 00:11:48,400 --> 00:11:51,319 Speaker 1: say stick with big text, stick with some of these 218 00:11:51,400 --> 00:11:54,560 Speaker 1: names to just have incredible amounts of cash and relatively 219 00:11:54,960 --> 00:11:58,840 Speaker 1: small staffs compared to the overall revenue. Where do you 220 00:11:58,920 --> 00:12:02,000 Speaker 1: weigh in on this and why? Yeah, you know, I 221 00:12:02,360 --> 00:12:04,360 Speaker 1: tend to lead toward the former that that there's still 222 00:12:04,360 --> 00:12:06,880 Speaker 1: some likes to the to the cyclical trade. Um. You know, 223 00:12:06,920 --> 00:12:09,600 Speaker 1: there are you know, a few specific big tech names, 224 00:12:09,800 --> 00:12:13,079 Speaker 1: Glogle in particular, which we own, um that actually benefit 225 00:12:13,080 --> 00:12:15,240 Speaker 1: from both sides. They are both the reopening play and 226 00:12:15,280 --> 00:12:17,840 Speaker 1: a quarantine play. If you can keep both things. You know, 227 00:12:17,880 --> 00:12:20,160 Speaker 1: they are a major beneficiary of their turn of advertising, 228 00:12:20,200 --> 00:12:23,560 Speaker 1: particularly as really relates to things like travel, um and 229 00:12:23,640 --> 00:12:25,640 Speaker 1: so um. You know, you have to look company by 230 00:12:25,640 --> 00:12:28,560 Speaker 1: company and not just make judgments about individual sectors, which 231 00:12:28,559 --> 00:12:31,520 Speaker 1: is ya, all these Minila folders here, that's good. Let's 232 00:12:31,520 --> 00:12:33,720 Speaker 1: make a judgment about one of the wheelhouses of good 233 00:12:33,760 --> 00:12:37,520 Speaker 1: belly over the years, and that is this whole entertainment 234 00:12:37,679 --> 00:12:42,720 Speaker 1: streaming telephone, cell phone infrastructure. When you guys are way 235 00:12:42,720 --> 00:12:45,720 Speaker 1: out front on what John Malone wrought, where are you 236 00:12:45,880 --> 00:12:50,560 Speaker 1: now on all that stuff that we use every day? Yeah? 237 00:12:50,559 --> 00:12:51,959 Speaker 1: So you know, we used to define the world as 238 00:12:51,960 --> 00:12:55,240 Speaker 1: distribution versus content. Um. Yeah, that's a little bit of 239 00:12:55,320 --> 00:13:01,280 Speaker 1: uh of a fake um uh break. But I still 240 00:13:01,320 --> 00:13:04,880 Speaker 1: think distribution is very important. The broadband company's high pricing 241 00:13:04,880 --> 00:13:07,600 Speaker 1: power the warrior has been and always will be what 242 00:13:07,640 --> 00:13:10,080 Speaker 1: does the government do about that? And so far, you know, 243 00:13:10,080 --> 00:13:12,839 Speaker 1: the infrastructure Bill is probably a net positive for the 244 00:13:12,880 --> 00:13:15,720 Speaker 1: broadband companies to the extent that it funds you know, 245 00:13:15,760 --> 00:13:18,719 Speaker 1: additional build out and gets the additional customers. But but 246 00:13:18,800 --> 00:13:23,679 Speaker 1: that regulatory uh sort of democles is out there, and 247 00:13:23,760 --> 00:13:28,080 Speaker 1: obviously the fid administration seems to be swinging that more aggressively. Late. 248 00:13:28,160 --> 00:13:30,200 Speaker 1: On the content side, you know, a lot of questions 249 00:13:30,240 --> 00:13:32,960 Speaker 1: about what happens with theatrical and the streaming wars continue. 250 00:13:33,240 --> 00:13:34,640 Speaker 1: It was a little bit of a lake wabby gone 251 00:13:34,679 --> 00:13:36,600 Speaker 1: in the second quarter where pretty much all the streaming 252 00:13:36,600 --> 00:13:39,680 Speaker 1: services did a little bit better than everyone expected. But 253 00:13:39,720 --> 00:13:42,520 Speaker 1: that's probably gonna change at some point. The consumer will 254 00:13:42,679 --> 00:13:45,960 Speaker 1: have too many services choose from Chris, you mentioned policy, 255 00:13:46,240 --> 00:13:47,920 Speaker 1: and I do want to sort of end here where 256 00:13:47,920 --> 00:13:50,680 Speaker 1: we begin, which is Afghanistan, and how much that actually 257 00:13:50,800 --> 00:13:54,320 Speaker 1: does put a kink in a President Biden's ability to 258 00:13:54,840 --> 00:13:57,040 Speaker 1: push through his policy, to push through his three and 259 00:13:57,040 --> 00:13:59,760 Speaker 1: a half trillion dollar human infrastructure bill, let alone the 260 00:13:59,760 --> 00:14:03,000 Speaker 1: bipe partisan bill that has about five fifty billion dollars 261 00:14:03,000 --> 00:14:05,360 Speaker 1: of spending. How are you looking at this? You trading 262 00:14:05,400 --> 00:14:08,679 Speaker 1: on this in any way? Yeah? You know, I think 263 00:14:08,679 --> 00:14:12,560 Speaker 1: one of the when um, when it became probable that 264 00:14:12,640 --> 00:14:15,360 Speaker 1: Biden would get elected and was in fact elected, we 265 00:14:15,440 --> 00:14:20,280 Speaker 1: anticipated higher tax rates and built those into our company models. 266 00:14:20,600 --> 00:14:22,560 Speaker 1: And obviously we haven't seen that just yet. You know 267 00:14:22,640 --> 00:14:24,920 Speaker 1: that will have to be paid force in the in 268 00:14:24,920 --> 00:14:28,000 Speaker 1: the reconciliation, and so tax rates aren't going to go up, 269 00:14:28,280 --> 00:14:29,840 Speaker 1: but I think they probably go up less than maybe 270 00:14:29,840 --> 00:14:33,040 Speaker 1: we expected a year ago. Uh, and so that's a 271 00:14:33,160 --> 00:14:36,440 Speaker 1: sort of a plus. Um. But you know, this is 272 00:14:36,440 --> 00:14:39,320 Speaker 1: gonna put additional pressure on inflation, which we look at 273 00:14:39,520 --> 00:14:42,160 Speaker 1: and U I think we mentioned Afghanistan parked the price 274 00:14:42,200 --> 00:14:44,840 Speaker 1: that directly into the market, but you probably some additional 275 00:14:44,880 --> 00:14:47,440 Speaker 1: defense spending and the risk premium in general just has 276 00:14:47,480 --> 00:14:50,520 Speaker 1: to go up. Chrismin Ranky back in the office going 277 00:14:50,560 --> 00:14:52,680 Speaker 1: to say that, Chris, it's gonna catch out. Chrismin RANKI 278 00:14:52,720 --> 00:15:00,960 Speaker 1: that Betty funds the value. Let's get to the discussion 279 00:15:01,080 --> 00:15:03,360 Speaker 1: right now. What we're gonna do here is really focused 280 00:15:03,400 --> 00:15:06,840 Speaker 1: on setting up your end of August here into the 281 00:15:06,960 --> 00:15:09,840 Speaker 1: end of the third quarter in September. No one better 282 00:15:09,880 --> 00:15:12,880 Speaker 1: to do that than with someone managing real money, no 283 00:15:13,160 --> 00:15:16,720 Speaker 1: coorum is it invest goo And what's really interesting to 284 00:15:16,760 --> 00:15:19,080 Speaker 1: be you know, while you're in the crosshairs the hardest 285 00:15:19,120 --> 00:15:22,960 Speaker 1: part of the market right now, which is intermediate bonds. 286 00:15:23,760 --> 00:15:27,240 Speaker 1: What are you doing on the duration bet right now? 287 00:15:27,680 --> 00:15:31,760 Speaker 1: Is you, by portfolio mandate, are caught in the crosshairs 288 00:15:31,880 --> 00:15:36,880 Speaker 1: of this market right so on the duration mandate, we're 289 00:15:36,880 --> 00:15:40,160 Speaker 1: staying largely close to neutral. I think it makes sense 290 00:15:40,200 --> 00:15:42,400 Speaker 1: to have a bit of a steep neer on here 291 00:15:42,520 --> 00:15:46,320 Speaker 1: UM if you have more of a multisector account UM, 292 00:15:46,400 --> 00:15:49,520 Speaker 1: but from the duration standpoint, in our intermediate bond fund 293 00:15:49,600 --> 00:15:52,920 Speaker 1: vers staying clothed the neutral. And then we would recommend 294 00:15:53,120 --> 00:15:57,840 Speaker 1: for high yield UH portfolio managers to add some defensive 295 00:15:58,040 --> 00:16:02,680 Speaker 1: or you know, maybe UM other growth related asset managers 296 00:16:02,920 --> 00:16:05,800 Speaker 1: to add some defensive assets here, like the intermediate bond 297 00:16:05,800 --> 00:16:09,800 Speaker 1: fund or investment grade UM just because there are like you. 298 00:16:09,800 --> 00:16:12,280 Speaker 1: You are were just referring to a lot of blooming 299 00:16:12,320 --> 00:16:15,680 Speaker 1: and uncertainties around and you said, the ball market is 300 00:16:15,720 --> 00:16:18,360 Speaker 1: not reacting. It's all it's because we're waiting on Wednesday, 301 00:16:18,440 --> 00:16:20,880 Speaker 1: were waiting on the Emblom see minutes and the taper, 302 00:16:21,160 --> 00:16:23,880 Speaker 1: the big taper debata on timing. We all started to 303 00:16:23,920 --> 00:16:26,920 Speaker 1: say some discrimination just in terms of credit quality and 304 00:16:26,960 --> 00:16:29,080 Speaker 1: the degree to which you are exposed to things like 305 00:16:29,120 --> 00:16:31,400 Speaker 1: the doubts of variant. No Whill, is that encouraging for you? 306 00:16:31,520 --> 00:16:33,520 Speaker 1: Is that a healthy sign that the credit market is 307 00:16:33,520 --> 00:16:38,480 Speaker 1: functioning that way? So we are seeing it. So earning 308 00:16:38,560 --> 00:16:42,480 Speaker 1: the earning season was very healthy. Earnings growth was very strong. 309 00:16:43,040 --> 00:16:46,200 Speaker 1: UM where that strength came in was a little bit bifurcated, 310 00:16:46,240 --> 00:16:49,280 Speaker 1: but we expect overall the earnings growth to continue and 311 00:16:49,320 --> 00:16:52,720 Speaker 1: to and leveraging to continue. The delta variant we have 312 00:16:52,800 --> 00:16:55,000 Speaker 1: to watch very closely. Of course, we don't see it 313 00:16:55,120 --> 00:16:59,000 Speaker 1: necessarily impacting our base case for growth. Really the most 314 00:16:59,040 --> 00:17:02,880 Speaker 1: impact has been the supply destructions from it UM, and 315 00:17:02,920 --> 00:17:05,800 Speaker 1: that's something that we have to watch closely. But the 316 00:17:05,840 --> 00:17:08,600 Speaker 1: demand is still there, so ultimately that just kind of 317 00:17:08,640 --> 00:17:11,960 Speaker 1: maybe flattens the trajectory of growth, but that doesn't necessarily 318 00:17:12,040 --> 00:17:14,440 Speaker 1: take it away. Does it make sense, Noel to then 319 00:17:14,720 --> 00:17:20,320 Speaker 1: that high yield bonds are under performing investment grade? The 320 00:17:20,480 --> 00:17:25,120 Speaker 1: high yeld bonds, Yes, for um. For most of this year, 321 00:17:25,600 --> 00:17:28,080 Speaker 1: high yield bonds have done really well, triple seeds have 322 00:17:28,160 --> 00:17:33,160 Speaker 1: done really well. Premium and new issue has not necessarily 323 00:17:33,720 --> 00:17:36,720 Speaker 1: been very attractive lately, and I think that's why we're 324 00:17:36,720 --> 00:17:40,080 Speaker 1: seeing some of that um that peel back in in 325 00:17:40,160 --> 00:17:43,359 Speaker 1: high yield bonds, just taking a broader step back. Mark 326 00:17:43,400 --> 00:17:46,040 Speaker 1: Howard of b MP Pariva was on the show earlier 327 00:17:46,080 --> 00:17:47,760 Speaker 1: and he was saying that right now, where there is 328 00:17:47,800 --> 00:17:50,600 Speaker 1: no problem, you can keep leaning into risk, But longer 329 00:17:50,720 --> 00:17:55,040 Speaker 1: term we're setting ourselves up for some inequalities within the 330 00:17:55,080 --> 00:17:57,760 Speaker 1: markets and potential. I don't want to say bubbles, but 331 00:17:57,800 --> 00:18:01,960 Speaker 1: bubbles particularly with respect to you a certain credit borrowing. 332 00:18:02,240 --> 00:18:04,000 Speaker 1: What's your sense of that? Do you agree that this 333 00:18:04,080 --> 00:18:06,720 Speaker 1: is going to become a serious problem in a couple 334 00:18:06,720 --> 00:18:10,760 Speaker 1: of years time. So this is something that we definitely 335 00:18:10,800 --> 00:18:13,040 Speaker 1: have to watch and could be a problem in a 336 00:18:13,040 --> 00:18:15,280 Speaker 1: couple of years time. But what we're watching, i'd say 337 00:18:15,280 --> 00:18:17,760 Speaker 1: over the next three to six months, after we get 338 00:18:17,760 --> 00:18:20,359 Speaker 1: the taper announcement out of the way, and you know 339 00:18:20,440 --> 00:18:22,359 Speaker 1: whether or not it's going to be a taper tantrum 340 00:18:22,440 --> 00:18:24,359 Speaker 1: and whether or not we learn from history is up 341 00:18:24,359 --> 00:18:27,000 Speaker 1: for debate. But um, in the next three or six months, 342 00:18:27,000 --> 00:18:29,640 Speaker 1: we do want to stay nimble here because that's when 343 00:18:29,680 --> 00:18:32,560 Speaker 1: the FED hikes start to get priced in. That's when 344 00:18:32,560 --> 00:18:38,200 Speaker 1: the market turns to focus on the actual f MC mandate, 345 00:18:38,280 --> 00:18:41,520 Speaker 1: So employment coming down and whether or not inflation is 346 00:18:41,520 --> 00:18:44,639 Speaker 1: going to be transitory, and how sticky those sticking components 347 00:18:44,760 --> 00:18:47,480 Speaker 1: just can really be. So walk me through your approach 348 00:18:47,520 --> 00:18:49,400 Speaker 1: to floating right with that in mind, to a whow 349 00:18:49,560 --> 00:18:53,400 Speaker 1: what is it said? Right now? I'd have a little 350 00:18:53,400 --> 00:18:55,840 Speaker 1: bit of floating rate just to kind of take some 351 00:18:56,080 --> 00:19:00,240 Speaker 1: down some of your exposure to high yield be because 352 00:19:00,280 --> 00:19:03,719 Speaker 1: they're still is You're still getting compensated there. The demand 353 00:19:03,720 --> 00:19:06,359 Speaker 1: and technicals they are still very strong, still seeing for 354 00:19:06,520 --> 00:19:09,720 Speaker 1: in demand in both floating rate and investment grade and 355 00:19:09,840 --> 00:19:12,040 Speaker 1: some crossover in high yields. So I think it makes 356 00:19:12,080 --> 00:19:14,720 Speaker 1: sense to diversify, or I'm always kind of selling the 357 00:19:14,720 --> 00:19:18,040 Speaker 1: diversification picture because it does make sense here. There's still 358 00:19:18,119 --> 00:19:21,119 Speaker 1: a little bit of value to to be had in 359 00:19:21,280 --> 00:19:25,120 Speaker 1: the floating rate hed your conviction about the future, while 360 00:19:25,160 --> 00:19:27,119 Speaker 1: conviction about high rights or a hedge that we might 361 00:19:27,160 --> 00:19:30,720 Speaker 1: get them. Um, I think we're gonna see higher rates 362 00:19:30,760 --> 00:19:33,440 Speaker 1: from here. It's just gonna be a little bit messier, 363 00:19:33,720 --> 00:19:37,679 Speaker 1: um than you know, over the next several weeks, we 364 00:19:37,800 --> 00:19:40,600 Speaker 1: just have a lot of uncertainty and um, that's gonna 365 00:19:40,600 --> 00:19:44,440 Speaker 1: be definitely something to watch. If we get past the 366 00:19:44,520 --> 00:19:47,119 Speaker 1: taper and it kind of u is quiet, then I 367 00:19:47,400 --> 00:19:51,000 Speaker 1: expect the rates to continue to steepen out because we 368 00:19:51,119 --> 00:19:54,880 Speaker 1: do continue to expect growth to be robust, and that's 369 00:19:54,920 --> 00:19:59,000 Speaker 1: ultimately going to push this curve steeper. What is the 370 00:19:59,080 --> 00:20:02,199 Speaker 1: goal over the next three to five years. Is it 371 00:20:02,240 --> 00:20:06,320 Speaker 1: to clip a coupon or can you actually find total return? 372 00:20:08,760 --> 00:20:10,880 Speaker 1: I think you can find total return, but it's gonna 373 00:20:10,920 --> 00:20:15,760 Speaker 1: be more on a sector basis um or specific bond basis. 374 00:20:16,080 --> 00:20:18,280 Speaker 1: But over the next three or five years, while the 375 00:20:18,600 --> 00:20:20,760 Speaker 1: the you know, of course, when we get into the 376 00:20:20,800 --> 00:20:23,919 Speaker 1: five year scenario, it's hard, of course to call that 377 00:20:23,960 --> 00:20:27,240 Speaker 1: far out. But the ultimate goal would be to clip 378 00:20:27,280 --> 00:20:31,480 Speaker 1: the coupon, diversify ad where there is value and complacency 379 00:20:31,520 --> 00:20:36,240 Speaker 1: within markets and complacency within sectors. No, we've gotta leave 380 00:20:36,240 --> 00:20:38,359 Speaker 1: it that it's gonna catch up. And this fixed income market, 381 00:20:38,400 --> 00:20:47,359 Speaker 1: now i'll call him that invest portfolio manage you what 382 00:20:47,440 --> 00:20:49,639 Speaker 1: we've always tried to do here is John Lisa and 383 00:20:49,680 --> 00:20:52,359 Speaker 1: I are committed to bringing you the experts you know 384 00:20:52,480 --> 00:20:55,800 Speaker 1: on China, Folks, that the expert is Jonathan Spence and 385 00:20:55,880 --> 00:20:59,399 Speaker 1: its classic to Search for Modern China. What is the 386 00:20:59,440 --> 00:21:04,200 Speaker 1: Search for Modern China? For Afghanistan? It is Thomas Barfield 387 00:21:04,200 --> 00:21:07,520 Speaker 1: out of Penn and Harvard, holding court in anthropology at 388 00:21:07,560 --> 00:21:11,760 Speaker 1: Boston University, and he's president of the American Institute for 389 00:21:11,840 --> 00:21:16,119 Speaker 1: Afghanistan Studies and his red covered book, a cultural and 390 00:21:16,160 --> 00:21:20,840 Speaker 1: political history. Trust me, folks, this is the absolute singular 391 00:21:21,359 --> 00:21:25,960 Speaker 1: one volume on the real Afghanistan. Professor Barfield, thank you 392 00:21:26,000 --> 00:21:28,800 Speaker 1: so much for joining us. We're honored. I must ask 393 00:21:28,880 --> 00:21:34,800 Speaker 1: of the people of your institute. Are they safe in Afghanistan? Uh? 394 00:21:34,880 --> 00:21:38,920 Speaker 1: We don't know. My director got out to Delhi um 395 00:21:39,160 --> 00:21:42,000 Speaker 1: last week and we're trying to move our staffs there 396 00:21:42,000 --> 00:21:46,640 Speaker 1: if they have visas. But you know, all air traffic 397 00:21:46,680 --> 00:21:50,560 Speaker 1: has gone so um they're in safe houses in Kabble. 398 00:21:50,720 --> 00:21:53,960 Speaker 1: But we're watching what's what's going to happen, Professor Barfield, 399 00:21:54,040 --> 00:21:55,679 Speaker 1: just because the time I've got to get to the 400 00:21:55,680 --> 00:21:58,120 Speaker 1: advanced moment as we wait to hear from the President 401 00:21:58,119 --> 00:22:01,760 Speaker 1: in the coming hours. Or is is there a risk here? 402 00:22:01,920 --> 00:22:05,679 Speaker 1: Of a Sunni Shia civil war among the tribes that 403 00:22:05,800 --> 00:22:10,160 Speaker 1: you are expert on, including the Taliban and their dominance 404 00:22:10,440 --> 00:22:14,040 Speaker 1: versus to the west of Hussari and their relationship with Iran. 405 00:22:15,680 --> 00:22:19,800 Speaker 1: Probably not, because the Ars are too weak to take 406 00:22:19,840 --> 00:22:23,800 Speaker 1: on a central government. And also they're in the center 407 00:22:23,800 --> 00:22:26,359 Speaker 1: of the country. They don't border Iran. It's difficult to 408 00:22:26,440 --> 00:22:29,840 Speaker 1: run in if you don't have a sanctuary, as the 409 00:22:29,880 --> 00:22:33,080 Speaker 1: Taliban did in Pakistan. Is this the same Taliban as 410 00:22:33,160 --> 00:22:35,399 Speaker 1: twenty years ago or is it so different now? You 411 00:22:35,520 --> 00:22:38,720 Speaker 1: need to brief us on that distinction. That is what 412 00:22:38,840 --> 00:22:42,560 Speaker 1: everybody is waiting to see. Um. The talk out of 413 00:22:42,640 --> 00:22:49,240 Speaker 1: Doha is smoother. Um. Their opposition to even photographs and television, 414 00:22:50,160 --> 00:22:52,960 Speaker 1: you know in the nineteen nineties. Now they're very immediate 415 00:22:53,200 --> 00:22:57,840 Speaker 1: media savvy. Uh. They're big problem is, all right, they've 416 00:22:57,880 --> 00:23:01,080 Speaker 1: taken over the country, how do you govern it? And 417 00:23:01,480 --> 00:23:04,320 Speaker 1: they lacked the capacity to govern, And the question is 418 00:23:04,400 --> 00:23:07,520 Speaker 1: what kind of compromises are they willing to make to 419 00:23:07,640 --> 00:23:10,480 Speaker 1: keep the country functioning so that they can, you know, 420 00:23:11,080 --> 00:23:14,520 Speaker 1: have their ideology predominant and not to involved into a 421 00:23:14,560 --> 00:23:16,919 Speaker 1: civil war. Professor, That's exactly where I wanted to go 422 00:23:16,920 --> 00:23:18,800 Speaker 1: and I'm wondering if you could elaborate on that. I 423 00:23:18,840 --> 00:23:21,760 Speaker 1: was reading reports of civil servants just not showing up 424 00:23:21,800 --> 00:23:24,720 Speaker 1: to work because they were worried about the Taliban and 425 00:23:24,760 --> 00:23:27,159 Speaker 1: how they would be treated. The Taliban said, please come 426 00:23:27,200 --> 00:23:30,240 Speaker 1: back to work, try to restore confidence. They didn't all 427 00:23:30,280 --> 00:23:31,880 Speaker 1: come back to work, and then they started to take 428 00:23:31,880 --> 00:23:34,360 Speaker 1: a harder line and people started to come back out 429 00:23:34,400 --> 00:23:38,680 Speaker 1: of fear. The reports really highlight the difficulty in ruling 430 00:23:38,760 --> 00:23:41,679 Speaker 1: out of fear. Do you see any signs that the 431 00:23:41,720 --> 00:23:45,560 Speaker 1: Taliban is adjusting strategy or trying to consolidate power against 432 00:23:46,200 --> 00:23:49,959 Speaker 1: behind a ruler who can actually impose some sort of 433 00:23:50,000 --> 00:23:54,560 Speaker 1: discipline and also some sort of respect in the population. Well, 434 00:23:54,920 --> 00:23:57,959 Speaker 1: we don't even know who's a Taliban ruler, right, So 435 00:23:58,280 --> 00:24:00,480 Speaker 1: one of the thanks were looking for is what he is. 436 00:24:00,520 --> 00:24:04,640 Speaker 1: The Taliban government in the nineteen nineties, Mullah Omar never 437 00:24:04,720 --> 00:24:08,160 Speaker 1: even came to Cobble. He ran Afghanistan sort of out 438 00:24:08,160 --> 00:24:10,560 Speaker 1: of his bedroom in Condahart, all right. So you had 439 00:24:10,560 --> 00:24:12,560 Speaker 1: a government in Cobble and the guy that led it 440 00:24:12,640 --> 00:24:15,119 Speaker 1: not even bothering to show up in the capital. The 441 00:24:15,200 --> 00:24:18,480 Speaker 1: other thing is, if you go back Afghanistan, is seeing 442 00:24:18,520 --> 00:24:23,920 Speaker 1: these transitions before. When the Soviet back regime fell, essentially 443 00:24:23,920 --> 00:24:26,800 Speaker 1: the bureaucrats went to work for the Mujahadeen. So a 444 00:24:26,840 --> 00:24:29,959 Speaker 1: lot of the fear right now, how are we going 445 00:24:30,000 --> 00:24:33,560 Speaker 1: to be treated as the civil servants? But I I 446 00:24:33,680 --> 00:24:38,560 Speaker 1: remember being in the shower when the Mujahadeen shadow Minister 447 00:24:38,640 --> 00:24:41,520 Speaker 1: of Agriculture I wanted some statistics. He says, I'll ask 448 00:24:41,560 --> 00:24:44,160 Speaker 1: the ministry and cobbalize that. How can you do that? 449 00:24:44,400 --> 00:24:48,639 Speaker 1: He says, they serve whatever government And he got the 450 00:24:48,680 --> 00:24:51,399 Speaker 1: statistics he wanted, and they send a little nest to 451 00:24:51,520 --> 00:24:56,840 Speaker 1: come to power. Remember where bureaucracy. So we're what we're 452 00:24:56,840 --> 00:25:01,960 Speaker 1: watching that it's just unknowable because it's happened so fast. 453 00:25:03,119 --> 00:25:06,520 Speaker 1: Thomas Barfield, there is a professor at Boston University by 454 00:25:06,520 --> 00:25:09,399 Speaker 1: the name of Basevich who has sacrificed his son to 455 00:25:09,520 --> 00:25:12,399 Speaker 1: these wars. In the distance from base of Itch to 456 00:25:12,480 --> 00:25:17,240 Speaker 1: Barfield is a distance of can we export liberal democracy? 457 00:25:17,359 --> 00:25:20,560 Speaker 1: Have we learned a final lesson here in this debacle 458 00:25:20,640 --> 00:25:24,560 Speaker 1: that we cannot export liberal democracy at the risk of 459 00:25:24,560 --> 00:25:27,640 Speaker 1: our soldiers and at the risk of our debt and deficit. 460 00:25:29,040 --> 00:25:32,359 Speaker 1: I would say probably not. We probably learned a lesson 461 00:25:32,440 --> 00:25:35,280 Speaker 1: for the next ten years. But it's like the British 462 00:25:35,359 --> 00:25:38,280 Speaker 1: who got badly burned in the first Anglo Ascan Wars, 463 00:25:38,320 --> 00:25:42,159 Speaker 1: that they never go back in. They re invaded it 464 00:25:43,040 --> 00:25:45,080 Speaker 1: and then decided it was not a good idea and 465 00:25:45,080 --> 00:25:51,360 Speaker 1: went back out. Um countries like people kind those as 466 00:25:51,520 --> 00:25:56,200 Speaker 1: as things fade and sometimes not to remember the things 467 00:25:56,280 --> 00:26:01,159 Speaker 1: they should are. The Taliban tribal You're infinitive work is 468 00:26:01,200 --> 00:26:06,720 Speaker 1: the anthropology of Afghanistan. Is the Taliban part of the 469 00:26:06,760 --> 00:26:10,760 Speaker 1: tribes that you write about. No, that's one of their 470 00:26:10,800 --> 00:26:14,520 Speaker 1: advantages because they're not tribal. They can bring all of 471 00:26:14,520 --> 00:26:17,359 Speaker 1: these tribes that would otherwise be rivals with one another, 472 00:26:18,000 --> 00:26:20,400 Speaker 1: and they call for unity in the name of God. 473 00:26:20,480 --> 00:26:24,160 Speaker 1: Who can resist good? I mean the Taliban in nineties 474 00:26:24,240 --> 00:26:27,160 Speaker 1: with the first government in Afghani history that was ruled 475 00:26:27,160 --> 00:26:31,560 Speaker 1: by mullus Um. But the advantage they had was they 476 00:26:31,560 --> 00:26:35,120 Speaker 1: could say we do not represent tribe, their regional interest. 477 00:26:35,200 --> 00:26:37,960 Speaker 1: Even if you've done down a little bit, then maybe 478 00:26:37,960 --> 00:26:42,320 Speaker 1: they did um. And they seem to have really surprising 479 00:26:42,359 --> 00:26:45,320 Speaker 1: this time because it's historically and I would still looking 480 00:26:45,359 --> 00:26:47,760 Speaker 1: at the interviews the leaders are speaking and pushed out. 481 00:26:48,080 --> 00:26:51,040 Speaker 1: But they took the north First, that's the non Plushtun 482 00:26:51,119 --> 00:26:54,080 Speaker 1: region of the country. The ashraf Ghani regime had to 483 00:26:54,119 --> 00:26:58,320 Speaker 1: do something really bad to alienate all the non Plushtuns 484 00:26:58,359 --> 00:27:01,040 Speaker 1: in the north so that they were willing to a 485 00:27:01,119 --> 00:27:05,480 Speaker 1: lie with with with the Taliban. So um, it's it's 486 00:27:05,560 --> 00:27:08,600 Speaker 1: not tribal. A much needed level of detail there from 487 00:27:08,640 --> 00:27:12,439 Speaker 1: Thomas Bonfield. Thomas, thank you, Professor of anthropology at Boston 488 00:27:12,520 --> 00:27:15,960 Speaker 1: University and president of the American Institute for Afghanistan Studies. 489 00:27:21,800 --> 00:27:24,639 Speaker 1: There is no one, and I mean no one in 490 00:27:24,680 --> 00:27:29,680 Speaker 1: the investment community who is educated on what experts think 491 00:27:30,119 --> 00:27:35,280 Speaker 1: about stars, about Avian influenza and about the present pandemic. 492 00:27:35,640 --> 00:27:39,240 Speaker 1: And David Kotalk of Pennsylvania and Florida, he's somewhere out 493 00:27:39,240 --> 00:27:42,200 Speaker 1: west right now singing John Denver songs and he joins 494 00:27:42,280 --> 00:27:46,720 Speaker 1: us here from Cumberland Advisors. David, your latest UH memo 495 00:27:47,760 --> 00:27:54,520 Speaker 1: is striking for the three articles you attach on pediatric hospitalizations. Bonus, 496 00:27:54,920 --> 00:27:59,920 Speaker 1: you're living this in Florida. What have you learned? We've 497 00:28:00,080 --> 00:28:07,560 Speaker 1: learned that uncertainty is a powerful forecasting tool. It tells 498 00:28:07,720 --> 00:28:13,000 Speaker 1: you nothing. Risk is one thing. You can estimate it. 499 00:28:13,080 --> 00:28:16,080 Speaker 1: You can have science, you can measure things you can 500 00:28:16,119 --> 00:28:22,800 Speaker 1: create probabilities. Uncertainty does not permit that we are living 501 00:28:23,080 --> 00:28:27,480 Speaker 1: in uncertainty with delta and the variants, and we have 502 00:28:27,680 --> 00:28:31,960 Speaker 1: a massive failure in the public health system in the 503 00:28:32,040 --> 00:28:34,919 Speaker 1: United States and most of the world. And that was 504 00:28:35,000 --> 00:28:40,880 Speaker 1: the conclusion Tom and Lisa in Maine. David Kotok when 505 00:28:40,920 --> 00:28:43,200 Speaker 1: I look at when I when I look at where 506 00:28:43,200 --> 00:28:46,360 Speaker 1: we are right now at dovetails into economic data like 507 00:28:46,480 --> 00:28:50,560 Speaker 1: Empire manufacturing, which was very, very weak. Are you pricing, 508 00:28:50,600 --> 00:28:55,200 Speaker 1: in your view for a slowdown or disappointment in GDP. 509 00:28:56,680 --> 00:29:00,520 Speaker 1: The answer is yes, And the sentiment into haiters that 510 00:29:00,880 --> 00:29:07,560 Speaker 1: just came out drive that home very strongly. In our portfolios. 511 00:29:07,800 --> 00:29:11,640 Speaker 1: In our US et F models, we are up to 512 00:29:11,640 --> 00:29:16,200 Speaker 1: twenty eight percent cash and we have doubled the market 513 00:29:16,240 --> 00:29:19,840 Speaker 1: weight of the entire healthcare sector in the broad sense 514 00:29:19,880 --> 00:29:24,960 Speaker 1: of the word, because we believe that the variant evolution 515 00:29:25,560 --> 00:29:28,840 Speaker 1: and public health demands on the healthcare system and the 516 00:29:28,920 --> 00:29:35,360 Speaker 1: companies that provide the resources to fight COVID are going 517 00:29:35,440 --> 00:29:40,160 Speaker 1: to go on for several years. So the answer is yes, David. 518 00:29:41,120 --> 00:29:43,840 Speaker 1: Percent cash at a time when bulls cake get bullish 519 00:29:43,920 --> 00:29:47,120 Speaker 1: enough and our upgrading their forecasts what's the trigger, what's 520 00:29:47,120 --> 00:29:49,960 Speaker 1: the catalyst to cause a sell off that could actually 521 00:29:50,360 --> 00:29:54,280 Speaker 1: allow you to deploy some of that cash. We don't know. 522 00:29:54,640 --> 00:29:58,440 Speaker 1: We're looking at the sentiment collapsed, Lisa. That was a 523 00:29:58,680 --> 00:30:03,280 Speaker 1: very strong Michigan data and it also captured the huge 524 00:30:03,400 --> 00:30:07,880 Speaker 1: political divide in the country when you dissected the data. 525 00:30:08,360 --> 00:30:11,800 Speaker 1: And what do we know from Neil Ferguson's wonderful work 526 00:30:12,120 --> 00:30:18,080 Speaker 1: which Bloomberg has helped tell the world about, every single 527 00:30:18,120 --> 00:30:23,760 Speaker 1: pandemic has led to a recession following it, and every 528 00:30:23,840 --> 00:30:29,520 Speaker 1: single pandemic has had led to major structural political change 529 00:30:29,520 --> 00:30:33,880 Speaker 1: and geopolitical events. There's been no exception in history. Neil 530 00:30:34,120 --> 00:30:38,840 Speaker 1: established that in his work. And we don't know. We're 531 00:30:38,960 --> 00:30:42,800 Speaker 1: uncertain as to what's gonna come in this structure, but 532 00:30:42,960 --> 00:30:47,080 Speaker 1: we do know something is going to come. It's major changes. 533 00:30:47,520 --> 00:30:50,960 Speaker 1: I don't buy the two months recession we've just had, 534 00:30:51,280 --> 00:30:54,480 Speaker 1: but the NBER said it's over. I don't think we've 535 00:30:54,560 --> 00:30:57,320 Speaker 1: had the shock yet. Well, what would you say to 536 00:30:57,320 --> 00:31:00,560 Speaker 1: people who look at corporate earnings and say they're phenomenal, 537 00:31:00,680 --> 00:31:02,360 Speaker 1: who look at the fact that rates are going to 538 00:31:02,440 --> 00:31:04,560 Speaker 1: be low for a very long time and say there 539 00:31:04,680 --> 00:31:07,480 Speaker 1: is no alternative. I mean, there are some strong arguments 540 00:31:07,760 --> 00:31:11,720 Speaker 1: for risk right now. No, I would agree with that. 541 00:31:12,440 --> 00:31:15,440 Speaker 1: And when uncertainty gives way to some risk and we 542 00:31:15,480 --> 00:31:19,240 Speaker 1: can begin to measure more impacts, the answer would be s. 543 00:31:19,360 --> 00:31:21,840 Speaker 1: We just had a quarter where we had over fifty 544 00:31:21,840 --> 00:31:25,000 Speaker 1: dollars in earnings out and the SNP and the trend 545 00:31:25,120 --> 00:31:29,320 Speaker 1: is higher. By the way, when you shift labor share 546 00:31:29,560 --> 00:31:32,840 Speaker 1: away because you have sick people and dead people and 547 00:31:33,200 --> 00:31:37,600 Speaker 1: reluctant people to work, you alter the mix between capital 548 00:31:37,760 --> 00:31:41,720 Speaker 1: and labor. We're doing that. Capital wins. There's winners and 549 00:31:41,840 --> 00:31:45,920 Speaker 1: losers and bandemics, and the stock markets one of the winners. 550 00:31:45,960 --> 00:31:48,880 Speaker 1: I can see a longer term trajectory from the stock 551 00:31:48,920 --> 00:31:52,800 Speaker 1: market to six or seven thousand with three hundred dollars 552 00:31:52,800 --> 00:31:58,479 Speaker 1: in morning. David, I don't care who caught the biggest fish. Oh, 553 00:31:58,640 --> 00:32:01,280 Speaker 1: I can't go to that one because that one creates 554 00:32:01,280 --> 00:32:05,479 Speaker 1: a bunch of opinions. Let's just say we had great fishing, 555 00:32:05,600 --> 00:32:10,400 Speaker 1: great conversations, and it was nice to have the gathering back. 556 00:32:10,480 --> 00:32:16,120 Speaker 1: If I can add one very quick, please hudent vaccine 557 00:32:16,280 --> 00:32:21,520 Speaker 1: passport requirement. Guides, lodge and guests if they didn't want 558 00:32:21,520 --> 00:32:25,200 Speaker 1: to conform they couldn't come, and everybody was a team 559 00:32:25,280 --> 00:32:28,920 Speaker 1: player from all over the country. David Kotak, Stay Healthy, 560 00:32:29,040 --> 00:32:32,640 Speaker 1: David kote Cumberland Adviser c i O, and truly the 561 00:32:32,680 --> 00:32:36,440 Speaker 1: streets experts on collating call using in all of this 562 00:32:36,640 --> 00:32:41,840 Speaker 1: research on these medical issues. This is the Bloomberg Surveillance Podcast. 563 00:32:42,120 --> 00:32:45,440 Speaker 1: Thanks for listening. Join us live weekdays from seven to 564 00:32:45,560 --> 00:32:49,640 Speaker 1: ten am Eastern on Bloomberg Radio and on Bloomberg Television 565 00:32:50,000 --> 00:32:54,000 Speaker 1: each day from six to nine am for insight from 566 00:32:54,000 --> 00:32:58,560 Speaker 1: the best in economics, finance, investment, and international relations. And 567 00:32:58,680 --> 00:33:03,800 Speaker 1: subscribe to The VALA's podcast on Apple podcast, SoundCloud, Bloomberg 568 00:33:03,880 --> 00:33:07,200 Speaker 1: dot com, and of course on the terminal. I'm Tom 569 00:33:07,280 --> 00:33:17,000 Speaker 1: keene In. This is Bloomberg m