1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm Pim Fox. 2 00:00:08,760 --> 00:00:11,560 Speaker 1: Along with my co host Lisa Abramowitz. Each day we 3 00:00:11,640 --> 00:00:15,120 Speaker 1: bring you the most important, noteworthy, and useful interviews for 4 00:00:15,200 --> 00:00:17,840 Speaker 1: you and your money, whether you're at the grocery store 5 00:00:17,960 --> 00:00:20,720 Speaker 1: or the trading floor. Find the Bloomberg p m L 6 00:00:20,840 --> 00:00:30,760 Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. We 7 00:00:30,800 --> 00:00:35,000 Speaker 1: are broadcasting from the Bloomberg Interactive Broker's studios and it 8 00:00:35,200 --> 00:00:39,960 Speaker 1: is a pleasure to welcome the most recent recipient of 9 00:00:40,120 --> 00:00:46,000 Speaker 1: the Nobel Prize in Medicine. James Patrick Allison, perhaps better 10 00:00:46,040 --> 00:00:48,680 Speaker 1: known as Dr Jim Allison, joins us here in our 11 00:00:48,720 --> 00:00:52,239 Speaker 1: eleven Trio studios. Dr Allison, thank you very much for 12 00:00:52,320 --> 00:00:57,040 Speaker 1: being here and congratulations on your Nobel Prize. And I'm 13 00:00:57,040 --> 00:01:00,000 Speaker 1: wondering if you could just describe before you tell us 14 00:01:00,040 --> 00:01:02,640 Speaker 1: about how you play the harmonica, and you know you've 15 00:01:02,640 --> 00:01:06,039 Speaker 1: got a musical side that I think it's pretty interesting. 16 00:01:06,880 --> 00:01:10,760 Speaker 1: When did you learn that you had won the Nobel 17 00:01:10,880 --> 00:01:16,720 Speaker 1: Prize along with your counterpart in Japan? Yesterday morning? My 18 00:01:16,800 --> 00:01:21,200 Speaker 1: son called me about five thirty and so, Dad, you 19 00:01:21,280 --> 00:01:24,160 Speaker 1: did it, you know, And and uh, I thought, what 20 00:01:24,160 --> 00:01:26,039 Speaker 1: what I was just waking up, you know. And then 21 00:01:26,319 --> 00:01:30,119 Speaker 1: uh then a call came in from Sweden after that 22 00:01:30,560 --> 00:01:34,680 Speaker 1: and uh, you know, confirming it. So it's rather than 23 00:01:34,760 --> 00:01:39,559 Speaker 1: nice that my son was first though. Tell me, uh, well, 24 00:01:39,560 --> 00:01:41,959 Speaker 1: congratulations again, Dr Alison. Can you just give us a 25 00:01:41,959 --> 00:01:46,080 Speaker 1: sense of how hard it was to do the research 26 00:01:46,120 --> 00:01:48,160 Speaker 1: and persevere with it when a lot of people thought 27 00:01:48,160 --> 00:01:52,400 Speaker 1: that your field of immuno oncology was voodoo science. Yeah 28 00:01:52,480 --> 00:01:55,400 Speaker 1: it was. It was you know, voodoo or snake oil 29 00:01:55,520 --> 00:01:58,840 Speaker 1: or various terms were used. You know, I just didn't 30 00:01:58,880 --> 00:02:02,240 Speaker 1: pay much attention to that was just background noise. I 31 00:02:02,240 --> 00:02:06,400 Speaker 1: focused on really understanding mechanisms of how the immune system 32 00:02:06,440 --> 00:02:08,840 Speaker 1: worked until I had the details down and could just 33 00:02:09,320 --> 00:02:12,600 Speaker 1: knew exactly what I thought, at least exactly what we 34 00:02:12,639 --> 00:02:15,760 Speaker 1: needed to do. So what is this amano oncology. Well, 35 00:02:15,760 --> 00:02:19,280 Speaker 1: it's it's using your immune system, either targeting it or 36 00:02:19,320 --> 00:02:24,000 Speaker 1: in my case, just unleashing it to attack cancer cells. 37 00:02:24,040 --> 00:02:26,320 Speaker 1: Because you've got these cells called T cells that go 38 00:02:26,360 --> 00:02:28,200 Speaker 1: all around your body and they're kind of the soldiers 39 00:02:28,200 --> 00:02:31,280 Speaker 1: of the immune system and they recognize things that ought 40 00:02:31,280 --> 00:02:33,800 Speaker 1: not to be their virus infected cells or cancer cells 41 00:02:33,919 --> 00:02:38,920 Speaker 1: or whatever, recognize them Um, it's a wonderfully complex and 42 00:02:39,000 --> 00:02:42,560 Speaker 1: interesting process that I've been working on since nine two, 43 00:02:42,840 --> 00:02:47,200 Speaker 1: and um, you know, it's it's just a beautiful thing, 44 00:02:47,240 --> 00:02:50,880 Speaker 1: and we finally learned how to manipulate it, to direct 45 00:02:50,960 --> 00:02:55,560 Speaker 1: it to ourselves to actually attack cancer. Dr Allison as 46 00:02:55,680 --> 00:02:59,640 Speaker 1: the professor and also Chair of Immunology and Executive Director 47 00:03:00,000 --> 00:03:07,280 Speaker 1: of Immunotherapy at the MD Anderson Cancer Center, can you, uh, 48 00:03:07,520 --> 00:03:13,600 Speaker 1: maybe describe how your discovery can not only apply to 49 00:03:13,680 --> 00:03:17,000 Speaker 1: specific cancers that people may have, but for the whole 50 00:03:17,120 --> 00:03:23,160 Speaker 1: understanding of how to fight cancer when it's diagnosed. Yes, well, well, 51 00:03:23,400 --> 00:03:27,840 Speaker 1: this this approach is radically different from most approaches to 52 00:03:27,840 --> 00:03:31,600 Speaker 1: cancer theory, which target the cancer cell. This has the 53 00:03:31,720 --> 00:03:34,239 Speaker 1: therapy itself has nothing to do with the cancer cell 54 00:03:34,280 --> 00:03:36,640 Speaker 1: at all. It has to do with manipulating the immune 55 00:03:36,680 --> 00:03:40,520 Speaker 1: system just generally, so potentially it could work against any 56 00:03:40,600 --> 00:03:44,080 Speaker 1: kind of cancer, at least when I conceived of this 57 00:03:44,240 --> 00:03:46,400 Speaker 1: in the mid nineties, that was the idea. Since you're 58 00:03:46,400 --> 00:03:48,520 Speaker 1: not treating cancer, you're treating the immune system, it could 59 00:03:48,520 --> 00:03:52,160 Speaker 1: work against anything, and it turned out that that was 60 00:03:52,200 --> 00:03:55,839 Speaker 1: not quite right. But but it works very well well 61 00:03:55,880 --> 00:04:00,360 Speaker 1: against melanoma, for example, Patients that just get a a 62 00:04:00,440 --> 00:04:03,120 Speaker 1: single round of treatment with with the drug I developed, 63 00:04:04,480 --> 00:04:06,560 Speaker 1: and we're live ten years. I mean they're basically cured. 64 00:04:06,600 --> 00:04:09,640 Speaker 1: Their live ten years after therapy and when added to 65 00:04:09,720 --> 00:04:13,920 Speaker 1: a second drug that that Hanjo played a major role 66 00:04:13,960 --> 00:04:18,120 Speaker 1: in discovering. The response rates about sixty and we don't 67 00:04:18,120 --> 00:04:20,600 Speaker 1: know how long they're going. But it's been approved by 68 00:04:20,600 --> 00:04:24,640 Speaker 1: the FDA now not only for melanoma, but for lung cancer, 69 00:04:24,880 --> 00:04:30,160 Speaker 1: kidney cancer, bladder cancer, Hodgkinson and Foma, had neck cancer, 70 00:04:30,839 --> 00:04:35,320 Speaker 1: and the list goes on and on, merken cell cancering, um, 71 00:04:35,360 --> 00:04:39,000 Speaker 1: you know, so it is broadly applicable. But unfortunately, what 72 00:04:39,040 --> 00:04:41,440 Speaker 1: we've learned in the last few years since these approval 73 00:04:41,480 --> 00:04:44,359 Speaker 1: started coming in is there are cancers that don't response. 74 00:04:44,400 --> 00:04:48,640 Speaker 1: There's a clear blastoma and pancreatic cancer, and the response 75 00:04:48,760 --> 00:04:53,680 Speaker 1: rates and other cancers are um. You know, it's not everybody. 76 00:04:53,720 --> 00:05:00,000 Speaker 1: It's somewhere or in combinations up to our job now 77 00:05:00,000 --> 00:05:02,520 Speaker 1: hours to get that up as close to a percent 78 00:05:02,600 --> 00:05:05,640 Speaker 1: as we can and in as many kinds of cancer. 79 00:05:05,640 --> 00:05:09,560 Speaker 1: And that's the goal of the minotherapy platform and INMDI 80 00:05:09,560 --> 00:05:14,320 Speaker 1: Anderson that that run together with Dr pad biny Sharma, 81 00:05:14,440 --> 00:05:20,840 Speaker 1: who's an oncologist that yes, yes, Dr Allison, I'm wondering, 82 00:05:20,960 --> 00:05:24,279 Speaker 1: You've been working on this particular type of cancer treatment 83 00:05:24,320 --> 00:05:27,520 Speaker 1: for nearly four decades, and over that time, I'm wondering, 84 00:05:27,560 --> 00:05:30,479 Speaker 1: do you feel like we are much closer to a 85 00:05:30,560 --> 00:05:34,839 Speaker 1: fundamental breakthrough to make cancer less fatal? Yes, I think 86 00:05:34,839 --> 00:05:36,640 Speaker 1: we're are, and i think we're already there in some 87 00:05:36,720 --> 00:05:40,320 Speaker 1: kinds of cancer. As I said, six melanoma patients. When 88 00:05:40,320 --> 00:05:44,080 Speaker 1: we started this work, the median survival after diagnosis of 89 00:05:44,160 --> 00:05:47,560 Speaker 1: metastatic melanoma was eleven months. It was basically a death sentence, 90 00:05:47,600 --> 00:05:50,040 Speaker 1: and there were no drugs that had ever had any 91 00:05:50,080 --> 00:05:53,400 Speaker 1: impact on that at all until we came along. And now, 92 00:05:53,560 --> 00:05:56,480 Speaker 1: like I said, twenty percent of people alive ten years 93 00:05:57,080 --> 00:06:00,680 Speaker 1: after treatment, and you know even more when you're using combinations. 94 00:06:00,760 --> 00:06:04,719 Speaker 1: So uh, but there's you know, so this is a 95 00:06:04,800 --> 00:06:07,160 Speaker 1: fundamental shift and how to treat cancer. Again, you don't 96 00:06:07,520 --> 00:06:10,000 Speaker 1: treat the cancer, You treat the immune system and unleash 97 00:06:10,040 --> 00:06:12,840 Speaker 1: it to go after the cancer on its own. And 98 00:06:12,920 --> 00:06:16,880 Speaker 1: so this is going to be I would predict, not 99 00:06:16,880 --> 00:06:21,120 Speaker 1: not replace chemotherapy and radiation and things like that, but together. 100 00:06:21,480 --> 00:06:24,360 Speaker 1: That's the unique thing about immunotherapy is that it can 101 00:06:24,400 --> 00:06:27,760 Speaker 1: be used together with these other kinds of therapy to 102 00:06:27,800 --> 00:06:32,240 Speaker 1: improve their their efficacy. And the one thing that one 103 00:06:32,400 --> 00:06:35,120 Speaker 1: key thing that the immune therapy is offered that the 104 00:06:35,120 --> 00:06:37,120 Speaker 1: others don't is that once you've got a T cell, 105 00:06:37,880 --> 00:06:39,839 Speaker 1: you've got it for the rest of your life. Just 106 00:06:39,880 --> 00:06:43,760 Speaker 1: real quick, Which companies you're working on to develop actual applications? 107 00:06:44,320 --> 00:06:48,640 Speaker 1: A lot several companies, but key and helping us developers 108 00:06:48,600 --> 00:06:52,320 Speaker 1: a little company called Meta Acts. It's since been by 109 00:06:52,400 --> 00:06:55,320 Speaker 1: Bristol Myers squib so we do a lot of work 110 00:06:55,360 --> 00:06:57,240 Speaker 1: with them, but we also work with a number of 111 00:06:57,240 --> 00:07:02,200 Speaker 1: other companies. Dr jam Melissa, congratulations, Thank you so much 112 00:07:02,240 --> 00:07:05,039 Speaker 1: for joining us. Truly a pleasure to speak with you 113 00:07:05,080 --> 00:07:06,800 Speaker 1: and thank you for what you do. A lot of 114 00:07:06,839 --> 00:07:09,720 Speaker 1: people I know are very grateful. Dr Jim Allison, Professor 115 00:07:09,760 --> 00:07:12,920 Speaker 1: in Chair of Immunology at the MD Anderson Cancer Center 116 00:07:12,920 --> 00:07:18,680 Speaker 1: in Houston, also the winner of the Nobel Prize for Medicine, 117 00:07:18,760 --> 00:07:21,560 Speaker 1: Thank you so much and really an inspiration with respect 118 00:07:21,600 --> 00:07:24,600 Speaker 1: the perseverance for nearly four decades on something that a 119 00:07:24,640 --> 00:07:27,280 Speaker 1: lot of people dismissed. Really a pleasure having you here. 120 00:07:37,840 --> 00:07:42,320 Speaker 1: We are broadcasting from the Bloomberg Interactive Broker's studios. This 121 00:07:42,480 --> 00:07:45,760 Speaker 1: is the time we talk about trade. And indeed, after 122 00:07:45,920 --> 00:07:51,080 Speaker 1: yesterday's public airing of the details of the U S 123 00:07:51,280 --> 00:07:55,000 Speaker 1: m C A much more and much more. Yes, you 124 00:07:55,160 --> 00:07:59,440 Speaker 1: have new concessions for US farmers, new rules for digital commerce, 125 00:07:59,680 --> 00:08:03,320 Speaker 1: and rules for US content for automobiles. Here to help 126 00:08:03,400 --> 00:08:06,800 Speaker 1: us understand the trade agreement is Duncan Would, director of 127 00:08:06,840 --> 00:08:10,440 Speaker 1: the Mexico Institute at the Wilson Center, and he joins 128 00:08:10,560 --> 00:08:12,800 Speaker 1: us now from Washington. Do you see Duncan Wood, thank 129 00:08:12,800 --> 00:08:14,960 Speaker 1: you very much for being with us. What can you 130 00:08:15,000 --> 00:08:19,080 Speaker 1: tell us about the details of this agreement and what 131 00:08:19,160 --> 00:08:22,920 Speaker 1: do you believe the ramifications of the agreement will be 132 00:08:23,360 --> 00:08:26,640 Speaker 1: for all three of the economies Mexico, the United States, 133 00:08:26,680 --> 00:08:30,200 Speaker 1: and Canada. Well, let's say, yeah, that's a pretty big question, 134 00:08:30,240 --> 00:08:33,160 Speaker 1: considering the economy is to combine, their trade is more 135 00:08:33,200 --> 00:08:36,040 Speaker 1: than fort of one point four billion trillion dollars UM. 136 00:08:36,200 --> 00:08:38,760 Speaker 1: But what I can say is that I was happy 137 00:08:38,800 --> 00:08:42,280 Speaker 1: to see a continuation of general principles of NaSTA UM 138 00:08:42,320 --> 00:08:44,960 Speaker 1: in this new agreement. I think that we have actually 139 00:08:45,160 --> 00:08:48,439 Speaker 1: ensured that the free trade environment in North America will 140 00:08:48,480 --> 00:08:52,120 Speaker 1: continue pretty much across the board. UM. There are some 141 00:08:52,600 --> 00:08:57,760 Speaker 1: areas where the Trump administration was successful in in winning 142 00:08:57,760 --> 00:09:00,920 Speaker 1: concessions from his partners. Now to say that, obviously, you know, 143 00:09:00,920 --> 00:09:03,640 Speaker 1: we talked a lot about the dairy industry in Canada, 144 00:09:03,800 --> 00:09:07,040 Speaker 1: but we've also talked about the weakening of Chapter eleven 145 00:09:07,080 --> 00:09:11,920 Speaker 1: investor they dispute mechanisms UM and you know, and also 146 00:09:11,960 --> 00:09:15,000 Speaker 1: we've we've seen you know, this insistence on higher regional 147 00:09:15,080 --> 00:09:18,440 Speaker 1: content in the auto sector as well as um A 148 00:09:19,120 --> 00:09:22,839 Speaker 1: content a minimum content level of forty percent coming from 149 00:09:23,000 --> 00:09:26,040 Speaker 1: factories where works makes sixteen an hour or more. So, 150 00:09:26,480 --> 00:09:28,960 Speaker 1: you know, I think that perhaps the most interesting element 151 00:09:29,000 --> 00:09:31,760 Speaker 1: of all of this is to say that business is 152 00:09:31,760 --> 00:09:34,880 Speaker 1: going to accept it. Business is going to celebrate the 153 00:09:34,920 --> 00:09:39,079 Speaker 1: fact that they now have legal certainty that investments can 154 00:09:39,160 --> 00:09:42,160 Speaker 1: continue in the region, and they're going to work with 155 00:09:42,320 --> 00:09:45,439 Speaker 1: the rules of the of the new agreement to try 156 00:09:45,480 --> 00:09:48,319 Speaker 1: to deepen the integration that we've already seen in North America. 157 00:09:48,400 --> 00:09:51,240 Speaker 1: So I take it as a positive step forward. It's 158 00:09:51,320 --> 00:09:53,560 Speaker 1: far from perfect as an agreement, but which free trade 159 00:09:53,559 --> 00:09:56,600 Speaker 1: agreement is um and you know, this is one thing 160 00:09:56,640 --> 00:09:58,640 Speaker 1: that I think that you know, as we read be 161 00:09:58,880 --> 00:10:02,520 Speaker 1: the text and great. So we're finding that despite all 162 00:10:02,559 --> 00:10:05,360 Speaker 1: of the little irritance that are still there, um, and 163 00:10:05,480 --> 00:10:09,080 Speaker 1: some precedents that have been set which are uncomfortable for 164 00:10:09,120 --> 00:10:11,760 Speaker 1: free traders. It's a step in the right direction, all right. 165 00:10:11,960 --> 00:10:14,959 Speaker 1: One thing that I'm struggling with is does this agreement 166 00:10:15,200 --> 00:10:19,480 Speaker 1: move more toward freer trade with fewer barriers or more 167 00:10:19,520 --> 00:10:22,240 Speaker 1: towards sort of more protectionist approach. And I'm thinking in 168 00:10:22,240 --> 00:10:25,839 Speaker 1: particular the sixteen dollars an hour provision, which will effectively 169 00:10:26,160 --> 00:10:29,439 Speaker 1: either forced Mexico to dramatically increase pay or else produce 170 00:10:29,520 --> 00:10:33,200 Speaker 1: things in the US more. Yeah. I mean that you've 171 00:10:33,240 --> 00:10:38,880 Speaker 1: identified one of the clearest examples of a less free 172 00:10:38,880 --> 00:10:42,439 Speaker 1: trade approach. UM. And uh, you know, I think that 173 00:10:42,440 --> 00:10:44,280 Speaker 1: that's that's the thing that will stand out for for 174 00:10:44,280 --> 00:10:47,080 Speaker 1: a lot of people. UM. We also have to recognize 175 00:10:47,120 --> 00:10:50,200 Speaker 1: that the you know, the this new agreement doesn't resolve 176 00:10:50,280 --> 00:10:54,199 Speaker 1: the problems over Section to Study two on aluminum feel. Um, 177 00:10:54,240 --> 00:10:59,120 Speaker 1: it doesn't really resolve the dispute over the potential application 178 00:10:59,160 --> 00:11:02,080 Speaker 1: of Section two study to on or the automobile sector. 179 00:11:02,160 --> 00:11:06,160 Speaker 1: Because whilst Canada and Mexico have carved out UM an 180 00:11:06,160 --> 00:11:08,600 Speaker 1: exemption from that up to two points six million vehicles 181 00:11:08,640 --> 00:11:11,760 Speaker 1: a year UM, that they're still going to be subject 182 00:11:11,800 --> 00:11:14,360 Speaker 1: to it, which you know goes against the principles of 183 00:11:14,400 --> 00:11:17,199 Speaker 1: free trade. However, you know, on the positive side, I 184 00:11:17,240 --> 00:11:19,199 Speaker 1: would say this, what we've seen is we've seen a 185 00:11:19,280 --> 00:11:22,319 Speaker 1: modernization of a of an agreement that you know, is 186 00:11:22,360 --> 00:11:24,760 Speaker 1: more than two decades old, that was considered to be 187 00:11:24,800 --> 00:11:27,640 Speaker 1: an old Lady of free trade agreement. We've included new 188 00:11:27,640 --> 00:11:30,840 Speaker 1: issues so that the new agreement applies to areas of 189 00:11:31,120 --> 00:11:34,680 Speaker 1: digital trade, intellectual property. You know, there's some interesting work 190 00:11:34,720 --> 00:11:38,640 Speaker 1: there on on financial services, and so these are I mean, 191 00:11:38,679 --> 00:11:41,640 Speaker 1: it looks much more like a twenty first century free 192 00:11:41,640 --> 00:11:44,439 Speaker 1: trade agreement than the NAFTA did, and I would say 193 00:11:44,440 --> 00:11:47,480 Speaker 1: that that extends the reach of free trade in the 194 00:11:47,480 --> 00:11:51,080 Speaker 1: North American region. Can this agreement or parts of this 195 00:11:51,200 --> 00:11:57,240 Speaker 1: agreement be used in future negotiations with China? I think 196 00:11:57,280 --> 00:12:00,240 Speaker 1: that's certainly. Um. What's what's behind a lot of the year, 197 00:12:00,440 --> 00:12:02,600 Speaker 1: at least some of the language that's been there, um. 198 00:12:02,640 --> 00:12:05,839 Speaker 1: I mean, the most obvious stand out here is that 199 00:12:06,200 --> 00:12:09,000 Speaker 1: is the question of currency manipulation. There was no reason 200 00:12:09,080 --> 00:12:13,120 Speaker 1: to include currency manipulation provisions in a NAFTA. Biggest neither 201 00:12:13,160 --> 00:12:15,880 Speaker 1: Canada nor Mexico engage in that kind of behavior. But 202 00:12:16,040 --> 00:12:19,720 Speaker 1: clearly the United States wanted to establish a precedent whereby 203 00:12:19,800 --> 00:12:24,080 Speaker 1: they could take this language to any potential um future 204 00:12:24,080 --> 00:12:26,320 Speaker 1: free tech trade deal. And you know, the Japanese have 205 00:12:26,360 --> 00:12:29,200 Speaker 1: already um signals that they're nervous about that, they know 206 00:12:29,280 --> 00:12:31,719 Speaker 1: that that's coming to their for their their negotiations with 207 00:12:31,760 --> 00:12:34,560 Speaker 1: the United States. And of course this set the president 208 00:12:34,600 --> 00:12:37,360 Speaker 1: for China in particular, Dungan, I'm struck by the fact 209 00:12:37,400 --> 00:12:39,800 Speaker 1: that you think that disagreement will be good for US 210 00:12:39,960 --> 00:12:44,200 Speaker 1: energy companies. Can you explain? Yeah, I think that it 211 00:12:44,320 --> 00:12:46,960 Speaker 1: is that it's good for US energy companies because, first 212 00:12:46,960 --> 00:12:51,199 Speaker 1: of all, Mexico was excluded from the original provisions energy 213 00:12:51,200 --> 00:12:54,720 Speaker 1: provisions of the NAFTA UM and you know it, it's 214 00:12:54,920 --> 00:12:59,040 Speaker 1: specifically required that it was excluded from the free trade 215 00:12:59,440 --> 00:13:03,640 Speaker 1: of of of oil and gas because Mexico's system at 216 00:13:03,640 --> 00:13:07,000 Speaker 1: the time was a closed system UM. Since two thousands thirteen, 217 00:13:07,080 --> 00:13:10,200 Speaker 1: Mexico has opened up its oil and gas sector. Mexico 218 00:13:10,320 --> 00:13:15,720 Speaker 1: now has a market oriented energy sector and that has 219 00:13:15,760 --> 00:13:19,800 Speaker 1: been under threat with the With the new government's coming 220 00:13:19,800 --> 00:13:22,120 Speaker 1: into power in December in Mexico, the government of Andersman, 221 00:13:22,120 --> 00:13:25,360 Speaker 1: while lops Overdorf, who was opposed to private investment in 222 00:13:25,360 --> 00:13:29,280 Speaker 1: the oil and gas sector. But what this treaty ensures 223 00:13:29,720 --> 00:13:31,640 Speaker 1: is two things. One that there will continue to be 224 00:13:31,720 --> 00:13:34,839 Speaker 1: the free trade in molecules and electrons across the North 225 00:13:34,880 --> 00:13:39,920 Speaker 1: American space. And to that Chapter eleven um provisions in 226 00:13:39,920 --> 00:13:44,600 Speaker 1: in other words, investor states dispute settlement mechanisms will apply 227 00:13:45,120 --> 00:13:47,360 Speaker 1: continue to apply to the energy sector, in particular to 228 00:13:47,360 --> 00:13:49,640 Speaker 1: oil and gas. And so that gives a lot of 229 00:13:49,679 --> 00:13:52,960 Speaker 1: the investors American companies that are invested in Mexico, that 230 00:13:53,080 --> 00:13:55,600 Speaker 1: gives them legal certainty which they wouldn't have had otherwise. 231 00:13:55,960 --> 00:13:57,880 Speaker 1: Duncan Wood, thank you so much for joining us and 232 00:13:57,920 --> 00:14:00,920 Speaker 1: for analyzing uh the agreement to in such a short 233 00:14:01,000 --> 00:14:03,120 Speaker 1: period of time to give us such a deep insight. 234 00:14:03,200 --> 00:14:05,640 Speaker 1: Duncan Wood is director of the Mexico Institute at the 235 00:14:05,640 --> 00:14:19,560 Speaker 1: Wilson Center in Washington, d C. The topic now is 236 00:14:19,640 --> 00:14:23,400 Speaker 1: student loans and helping us here to understand this is 237 00:14:23,480 --> 00:14:26,320 Speaker 1: Brendan Coughlin. He is the president of consumer Lending at 238 00:14:26,440 --> 00:14:29,680 Speaker 1: Citizens Bank. Brendon, thanks very much for coming in. Maybe 239 00:14:29,720 --> 00:14:31,760 Speaker 1: just set this stage, because you know, I keep hearing 240 00:14:31,760 --> 00:14:34,640 Speaker 1: a lot of numbers like one and a half trillion 241 00:14:34,720 --> 00:14:40,160 Speaker 1: dollars in student loan debt. But the student loan market 242 00:14:40,600 --> 00:14:45,520 Speaker 1: includes private debt, it also includes debt that in many 243 00:14:45,560 --> 00:14:49,600 Speaker 1: cases is guaranteed by the federal government. Can you explain 244 00:14:49,840 --> 00:14:53,120 Speaker 1: the marketplace and what we're facing. Yeah, absolutely, and thanks 245 00:14:53,160 --> 00:14:55,600 Speaker 1: for having me here today for what's I think one 246 00:14:55,640 --> 00:14:58,720 Speaker 1: of the country's biggest challenges. The student loan um that 247 00:14:59,080 --> 00:15:01,640 Speaker 1: did just cross one point five trillion. It's growing at 248 00:15:01,640 --> 00:15:04,920 Speaker 1: about twice the pace of inflation, and projections put it 249 00:15:04,920 --> 00:15:08,440 Speaker 1: out at three trillion um in in just another ten years. 250 00:15:08,480 --> 00:15:11,200 Speaker 1: So just a very alarming situation that we're dealing with 251 00:15:11,360 --> 00:15:12,920 Speaker 1: here that the country is going to be living with 252 00:15:12,960 --> 00:15:15,840 Speaker 1: for a long time. You are right, when you get 253 00:15:15,880 --> 00:15:18,160 Speaker 1: a new loan to go first to go to school, 254 00:15:18,160 --> 00:15:21,400 Speaker 1: about of the time that that loan is issued by 255 00:15:21,400 --> 00:15:23,800 Speaker 1: the federal government through a variety of programs, and about 256 00:15:23,840 --> 00:15:26,600 Speaker 1: seven percent of the time it's issued by a bank 257 00:15:26,640 --> 00:15:29,720 Speaker 1: which has full underwriting UH and an assessment of your 258 00:15:29,720 --> 00:15:32,560 Speaker 1: ability to repay, versus the federal government, which which has 259 00:15:32,640 --> 00:15:36,240 Speaker 1: very very limited underwriting. So you just put out a 260 00:15:36,280 --> 00:15:40,440 Speaker 1: survey where you talked to a number of younger individuals 261 00:15:40,480 --> 00:15:44,160 Speaker 1: in America about their student debt loads. Regret is sort 262 00:15:44,200 --> 00:15:47,960 Speaker 1: of laced into every result of this survey, just to 263 00:15:48,040 --> 00:15:51,360 Speaker 1: regret that they incurred so much debt. I'm just wondering, 264 00:15:51,400 --> 00:15:53,200 Speaker 1: apart from going over some of the details of the 265 00:15:53,240 --> 00:15:57,640 Speaker 1: actual survey, what could they have done to ameliorate some 266 00:15:57,720 --> 00:16:00,440 Speaker 1: of these uh regrets. Yeah, you know, this is it's 267 00:16:00,480 --> 00:16:03,440 Speaker 1: it's highly emotional when when you're entering school and the 268 00:16:03,480 --> 00:16:07,000 Speaker 1: discussion between parents and children often is not detailed enough, 269 00:16:07,400 --> 00:16:09,880 Speaker 1: and folks don't understand what they're truly signing up for, 270 00:16:09,960 --> 00:16:13,520 Speaker 1: and they're not having the hard conversation of return on investment. 271 00:16:13,680 --> 00:16:16,120 Speaker 1: And as you make your choices, whether it's which school 272 00:16:16,200 --> 00:16:18,160 Speaker 1: or how much you're gonna pay, or how to pay 273 00:16:18,200 --> 00:16:20,400 Speaker 1: for it, and really all of it comes back to 274 00:16:20,440 --> 00:16:22,520 Speaker 1: that doing your homework and being more prepared so you 275 00:16:22,560 --> 00:16:25,920 Speaker 1: make these decisions eyes wide open um going into school. 276 00:16:26,360 --> 00:16:30,400 Speaker 1: How many smaller or I guess for profit universities do 277 00:16:30,400 --> 00:16:33,760 Speaker 1: you think would shutter if people did more of this 278 00:16:33,920 --> 00:16:37,280 Speaker 1: sort of risk reward but benefit analysis. Yeah, there's certainly 279 00:16:37,320 --> 00:16:40,120 Speaker 1: a handful of decent for profit schools, but but by 280 00:16:40,120 --> 00:16:43,840 Speaker 1: and large, many of them would be in real, real challenge. 281 00:16:43,840 --> 00:16:46,240 Speaker 1: If you looked at the return on investment on some 282 00:16:46,280 --> 00:16:48,240 Speaker 1: of these, and and did an assessment of the tuition 283 00:16:48,280 --> 00:16:51,840 Speaker 1: you'd pay versus the um the salary, and the graduation 284 00:16:51,920 --> 00:16:54,080 Speaker 1: rates coming out. And keep in mind the graduation rate 285 00:16:54,280 --> 00:16:58,120 Speaker 1: across the entire country, including four year public and private institutions, 286 00:16:58,400 --> 00:17:01,440 Speaker 1: is right around fifty. So most of our issue in 287 00:17:01,480 --> 00:17:05,440 Speaker 1: the country is that these kids are not matriculating to graduation. UM. 288 00:17:05,840 --> 00:17:07,440 Speaker 1: When you do get to graduation, you have a much 289 00:17:07,480 --> 00:17:10,520 Speaker 1: higher success rate of um of of of getting a 290 00:17:10,520 --> 00:17:13,520 Speaker 1: good job, but it's particularly exacerbated in the for profit sector. 291 00:17:13,720 --> 00:17:16,520 Speaker 1: For sure. There was a report there is a report 292 00:17:16,560 --> 00:17:21,359 Speaker 1: from the Brookings Institute about student loans, and one of 293 00:17:21,400 --> 00:17:27,639 Speaker 1: their conclusions is that by three forty percent of borrowers 294 00:17:28,000 --> 00:17:32,160 Speaker 1: made default on their student loans. We're talking about five 295 00:17:32,280 --> 00:17:37,320 Speaker 1: hundred and sixty billion dollars in unpaid debt. Does that 296 00:17:37,359 --> 00:17:40,680 Speaker 1: make sense to you? Well, so, the data, as as 297 00:17:40,760 --> 00:17:43,000 Speaker 1: we kicked off here, with most of the debt being 298 00:17:43,000 --> 00:17:45,960 Speaker 1: issued by the federal government, the data is not um 299 00:17:46,040 --> 00:17:49,320 Speaker 1: readily publicly available UM to digest in a way that 300 00:17:49,400 --> 00:17:53,480 Speaker 1: makes that easily answerable. But that does seem consistent with 301 00:17:53,560 --> 00:17:56,320 Speaker 1: all the information I've heard UM and and in the 302 00:17:56,359 --> 00:18:00,520 Speaker 1: federal portfolios, customers are considered performing even if they're on 303 00:18:00,800 --> 00:18:03,800 Speaker 1: a um A plan to repay, which could be as 304 00:18:03,840 --> 00:18:05,679 Speaker 1: little as a five dollar a month payment. So if 305 00:18:05,720 --> 00:18:07,919 Speaker 1: you owe seven hundred and you're paying five dollars a 306 00:18:07,960 --> 00:18:12,720 Speaker 1: month from from a statistical perspective, that's not considered um 307 00:18:12,720 --> 00:18:15,280 Speaker 1: in default. But you know, that's pretty darn close to 308 00:18:15,320 --> 00:18:17,240 Speaker 1: default in my book. So we've got a lot of 309 00:18:17,240 --> 00:18:19,640 Speaker 1: customers out there in the marketplace and the federal program 310 00:18:19,640 --> 00:18:21,840 Speaker 1: that are not paying back. You know, if you juxtapose 311 00:18:21,880 --> 00:18:24,520 Speaker 1: that against the banks, our default rate is about two 312 00:18:24,560 --> 00:18:27,960 Speaker 1: percent as a as an industry, Citizens is at below 313 00:18:28,000 --> 00:18:30,960 Speaker 1: one percent. So it's a very very stark difference between 314 00:18:31,200 --> 00:18:33,159 Speaker 1: bank loans and government loans. All right, I want to 315 00:18:33,200 --> 00:18:36,359 Speaker 1: get this more clear. So Brendan, you're the president of 316 00:18:36,359 --> 00:18:39,520 Speaker 1: Consumer Letting It Citizens Bank. We know that student loans 317 00:18:39,560 --> 00:18:42,280 Speaker 1: have become an increasing problem as its surges in the 318 00:18:42,320 --> 00:18:45,040 Speaker 1: total outstanding and people talk about how to drag on 319 00:18:45,040 --> 00:18:47,160 Speaker 1: the economy. Basically, these young people have so much debt 320 00:18:47,200 --> 00:18:49,120 Speaker 1: they can't save anything, and they can't spend on a house, 321 00:18:49,119 --> 00:18:52,800 Speaker 1: and they're they're they're postponing their family formations and not 322 00:18:52,800 --> 00:18:55,600 Speaker 1: having kids because they're really expensive. Um. One thing that 323 00:18:55,640 --> 00:18:59,359 Speaker 1: I'm wondering from you, how does a private organization play 324 00:18:59,400 --> 00:19:02,200 Speaker 1: in this space ace and profit from this space at 325 00:19:02,200 --> 00:19:04,919 Speaker 1: a time when there is such this this huge weight 326 00:19:05,080 --> 00:19:07,680 Speaker 1: out there that is sort of weighing down everything. Yeah. Look, 327 00:19:07,680 --> 00:19:10,360 Speaker 1: we we can't control the entire environment. Obviously. The biggest 328 00:19:10,359 --> 00:19:14,320 Speaker 1: issue here is the ever increasing tuition costs across the country, 329 00:19:14,640 --> 00:19:17,560 Speaker 1: and it's going faster than inflation. So the only place 330 00:19:17,600 --> 00:19:19,280 Speaker 1: that families are finding their way to pay for it 331 00:19:19,320 --> 00:19:22,840 Speaker 1: is either you know, postponing retirement or or taking out debt. 332 00:19:23,240 --> 00:19:25,800 Speaker 1: What we can do is is inside of the framework 333 00:19:25,800 --> 00:19:27,280 Speaker 1: of a bank. We've done a couple of things, so 334 00:19:27,320 --> 00:19:29,360 Speaker 1: we put a more affordable option out there than most 335 00:19:29,400 --> 00:19:32,320 Speaker 1: of the government programs, at least the ones that aren't subsidized. 336 00:19:32,560 --> 00:19:34,679 Speaker 1: So when you go to school, we will give you 337 00:19:34,720 --> 00:19:36,879 Speaker 1: a rate that's better, and we will underwrite you to 338 00:19:36,960 --> 00:19:39,639 Speaker 1: make sure we think you have a reasonably good chance 339 00:19:39,680 --> 00:19:41,480 Speaker 1: to pay the bank back, which is good for us 340 00:19:41,560 --> 00:19:43,160 Speaker 1: in the student hold on second, I want to want 341 00:19:43,160 --> 00:19:45,280 Speaker 1: to press you on that. So in other words, you decide, 342 00:19:45,400 --> 00:19:48,440 Speaker 1: is this person competent? Are they studying something that's actually 343 00:19:48,480 --> 00:19:50,520 Speaker 1: going to give them some leg up when they go 344 00:19:50,640 --> 00:19:52,760 Speaker 1: try to apply for a job. Are those some of 345 00:19:52,760 --> 00:19:54,680 Speaker 1: the things that you look at. We don't. We don't 346 00:19:54,880 --> 00:19:58,600 Speaker 1: look at their their intended degree. Um, there's a lot 347 00:19:58,600 --> 00:20:01,760 Speaker 1: of risk of redlining and unfair treatment on things like that. 348 00:20:01,760 --> 00:20:04,479 Speaker 1: But we do look at their income. Their parents are 349 00:20:04,480 --> 00:20:07,320 Speaker 1: typically co signing, which is forcing this conversation and the 350 00:20:07,359 --> 00:20:09,760 Speaker 1: family and the household around is this the right decision 351 00:20:09,760 --> 00:20:11,240 Speaker 1: for us? We both have some skin in the game. 352 00:20:11,320 --> 00:20:14,119 Speaker 1: Let's make sure so all those things lead to a 353 00:20:14,200 --> 00:20:17,840 Speaker 1: better and more informed decision, which dramatically improves the ability 354 00:20:17,880 --> 00:20:19,359 Speaker 1: to repay for the student at the end of it. 355 00:20:19,760 --> 00:20:22,199 Speaker 1: We've also introduced a refinance program when you come out 356 00:20:22,200 --> 00:20:25,200 Speaker 1: of school, which uh most folks surprisingly don't even know 357 00:20:25,240 --> 00:20:27,760 Speaker 1: about yet, um and spending the market for five or 358 00:20:27,800 --> 00:20:29,840 Speaker 1: six years. When you get out of school, if you 359 00:20:29,880 --> 00:20:32,040 Speaker 1: get a job, the first thing you should do is 360 00:20:32,040 --> 00:20:34,000 Speaker 1: look to trade in your old student loans because you 361 00:20:34,080 --> 00:20:37,159 Speaker 1: got underwritten when you're eighteen, living with your parents with 362 00:20:37,200 --> 00:20:40,000 Speaker 1: no credit score, and now you're gainfully employed, you've built 363 00:20:40,000 --> 00:20:41,960 Speaker 1: some credit and hopefully you're on the way to moving 364 00:20:42,000 --> 00:20:44,359 Speaker 1: out for mom and dad. Right, your profile could not 365 00:20:44,440 --> 00:20:47,119 Speaker 1: be more different than when you got that loan, and 366 00:20:47,160 --> 00:20:49,639 Speaker 1: we've been saving students about two and fifty dollars a 367 00:20:49,680 --> 00:20:52,040 Speaker 1: month on their student loan debt, which gets back to 368 00:20:52,040 --> 00:20:56,119 Speaker 1: your question around accelerating your ability to buy a home, household, formation, 369 00:20:56,240 --> 00:20:59,879 Speaker 1: getting married, having kids. Now, that refinancing that you just 370 00:21:00,000 --> 00:21:01,960 Speaker 1: spoke about, and I give you about twenty seconds here, 371 00:21:02,240 --> 00:21:06,760 Speaker 1: that refinancing could be for private student debt, but it 372 00:21:06,840 --> 00:21:11,480 Speaker 1: can also be for public for federal student debt. Right. 373 00:21:11,600 --> 00:21:15,800 Speaker 1: That's that's exactly correct. Consumers make no distinction between the two, 374 00:21:16,200 --> 00:21:18,920 Speaker 1: and um, we we will refinance either one of them 375 00:21:18,960 --> 00:21:21,240 Speaker 1: is in most of the industry that's in this business 376 00:21:21,280 --> 00:21:23,200 Speaker 1: will as well. You know, one of the stats the 377 00:21:23,240 --> 00:21:26,399 Speaker 1: survey put out was about sixty percent of students have 378 00:21:26,480 --> 00:21:29,159 Speaker 1: buyer's remorse on their decisions. So either they wish they 379 00:21:29,160 --> 00:21:31,680 Speaker 1: went to a less expensive school or in some cases 380 00:21:31,720 --> 00:21:33,840 Speaker 1: they wish they didn't go to school at all. So 381 00:21:33,960 --> 00:21:35,760 Speaker 1: once you've made that decision, it is what it is, 382 00:21:35,800 --> 00:21:38,679 Speaker 1: but you can take control of your finances, refinance it 383 00:21:38,720 --> 00:21:41,200 Speaker 1: and make it more affordable for you. Brendan Coughlin, thank 384 00:21:41,200 --> 00:21:44,040 Speaker 1: you so much for being here. Brendan Coughland is President 385 00:21:44,040 --> 00:21:47,520 Speaker 1: of Consumer deposits and lending for Citizens Bank in Providence, 386 00:21:47,600 --> 00:22:01,600 Speaker 1: Rode Island. The leader of Italy's Five Star movement, Luigi 387 00:22:01,640 --> 00:22:05,760 Speaker 1: de Mayo, has warned that Italy's government will not retreat 388 00:22:06,320 --> 00:22:11,000 Speaker 1: quote a millimeter from its spending plans amid pressures from 389 00:22:11,080 --> 00:22:14,679 Speaker 1: the European Union. Here to tell us more is Alberto Gallo, 390 00:22:14,960 --> 00:22:20,160 Speaker 1: partner portfolio manager for Algebras Macro Credit fund at Algebras, 391 00:22:20,240 --> 00:22:23,560 Speaker 1: and he's also a Bloomberg opinion column this and he 392 00:22:23,680 --> 00:22:27,760 Speaker 1: joins us, Now, Alberto, what if you make of Mr 393 00:22:27,800 --> 00:22:34,600 Speaker 1: Demio's statement? It looks a lot like the altitude the 394 00:22:34,640 --> 00:22:38,320 Speaker 1: type of posture that the former finance minister in Greece, 395 00:22:38,440 --> 00:22:45,280 Speaker 1: you know, Mr Barro Farkas had versus Europe, so very confrontational. Um. 396 00:22:45,280 --> 00:22:50,080 Speaker 1: And it is the opposite to his coalition partner Saldini 397 00:22:50,640 --> 00:22:52,919 Speaker 1: from the Northern League. So you have a government with 398 00:22:53,040 --> 00:22:56,399 Speaker 1: two parties. One has been voted in the south of 399 00:22:56,400 --> 00:22:59,000 Speaker 1: the country. Um. The other one has been voted in 400 00:22:59,040 --> 00:23:02,800 Speaker 1: the north, which is reached sure and more industrial. Um. 401 00:23:02,840 --> 00:23:06,400 Speaker 1: You know. Mr Demira has been falling behind in contensus 402 00:23:06,520 --> 00:23:11,159 Speaker 1: since the coalition started in Italy, while Mr Sylvenia has 403 00:23:11,200 --> 00:23:14,000 Speaker 1: been gaining, so I think this is a competition to 404 00:23:14,200 --> 00:23:18,040 Speaker 1: raise the voice against Europe, to try to gain back 405 00:23:18,080 --> 00:23:21,600 Speaker 1: some votes. There is an internal dynamic between Mr. Demia Mr. 406 00:23:21,640 --> 00:23:26,760 Speaker 1: Slvina are trying to raise for more consensus. However, the 407 00:23:27,440 --> 00:23:31,360 Speaker 1: you know, some of the business components of the country 408 00:23:31,400 --> 00:23:34,000 Speaker 1: are feeling the pain. As you know, yield go up 409 00:23:34,119 --> 00:23:38,560 Speaker 1: and investment drives up. So we you know, we think 410 00:23:38,600 --> 00:23:42,159 Speaker 1: that Indian Mrs Slvinia will win more consensus and this 411 00:23:42,240 --> 00:23:45,280 Speaker 1: could bring a more rational stand to the government to 412 00:23:45,320 --> 00:23:47,920 Speaker 1: the debate with Europe. So I guess you know, there's 413 00:23:47,920 --> 00:23:52,240 Speaker 1: the internal the deliberations about the votes that the Five 414 00:23:52,240 --> 00:23:55,040 Speaker 1: Star Party could pick up. These are there's the external 415 00:23:55,080 --> 00:23:58,080 Speaker 1: factor here, which is exactly as you're mentioning Albert Alberto, 416 00:23:58,480 --> 00:24:00,600 Speaker 1: the yields rising and if you look at ten year 417 00:24:00,600 --> 00:24:05,200 Speaker 1: Italian yields now rising to the highest since March. I'm wondering, 418 00:24:06,359 --> 00:24:09,840 Speaker 1: from your vantage point, are yields poised to go much higher? 419 00:24:10,200 --> 00:24:12,840 Speaker 1: In part because the European Union is fed up with 420 00:24:12,920 --> 00:24:17,320 Speaker 1: the Italian drama and it's withdrawing from its stimulus program. Anyway, 421 00:24:20,160 --> 00:24:24,000 Speaker 1: this is it's hard to understand and predict the dynamic 422 00:24:24,040 --> 00:24:27,280 Speaker 1: of every tweet. You know, of every statement generally the 423 00:24:27,320 --> 00:24:30,640 Speaker 1: consensus and you know very well this from the US 424 00:24:30,720 --> 00:24:34,000 Speaker 1: administration as well. I have no idea what you're talking about. 425 00:24:34,080 --> 00:24:38,720 Speaker 1: Other too, the consensus is very very short. You know, 426 00:24:38,840 --> 00:24:42,920 Speaker 1: US investors have gone into emerging market, but no one, 427 00:24:43,160 --> 00:24:46,400 Speaker 1: no one likes Europe. So there is a contents tous 428 00:24:46,440 --> 00:24:49,439 Speaker 1: saying that Yales would go to for four or five percent. 429 00:24:50,320 --> 00:24:53,199 Speaker 1: Having said that, the two point four percent number for 430 00:24:53,440 --> 00:24:56,800 Speaker 1: the budget deficitit is just point one percent higher than 431 00:24:56,920 --> 00:24:59,040 Speaker 1: last year. So you know last year we have two 432 00:24:59,080 --> 00:25:02,560 Speaker 1: point three percent def that Italy has a current account surplus, 433 00:25:02,880 --> 00:25:05,160 Speaker 1: which means that you know, the dest it comes from 434 00:25:05,240 --> 00:25:10,040 Speaker 1: interest costs UM. There's there's more experts than imports UM. 435 00:25:10,119 --> 00:25:13,240 Speaker 1: And there's eight trillion of savings that Italians have and 436 00:25:13,320 --> 00:25:16,040 Speaker 1: around seventy percent of bonds are held either by the 437 00:25:16,080 --> 00:25:20,320 Speaker 1: bank compitily through easyb purchases or by tellent institutions. So 438 00:25:20,840 --> 00:25:23,880 Speaker 1: really here the government is making an effort at creating 439 00:25:23,920 --> 00:25:29,720 Speaker 1: financial volatility, trying to gain contensus from public opinion, trying 440 00:25:29,760 --> 00:25:32,119 Speaker 1: to portray the EU as a as an enemy, and 441 00:25:32,160 --> 00:25:35,840 Speaker 1: we've seen this before in other countries. Having said that 442 00:25:35,960 --> 00:25:40,520 Speaker 1: the coalition is fragile um, it's not stable, and you 443 00:25:40,560 --> 00:25:44,160 Speaker 1: could see a point where the Northern supporters of Mr 444 00:25:44,200 --> 00:25:47,640 Speaker 1: Slbini say this is enough. You know, you're damaging our business. 445 00:25:47,800 --> 00:25:50,719 Speaker 1: You need to break up from Mr Demand who has 446 00:25:50,760 --> 00:25:54,480 Speaker 1: been promising effectively free income to uh to be unemployed 447 00:25:54,520 --> 00:25:58,160 Speaker 1: and very high spending which are unrealizable. And you can 448 00:25:58,200 --> 00:26:01,719 Speaker 1: see that from the latest declaration of success. You know 449 00:26:01,840 --> 00:26:05,320 Speaker 1: Mr Slovini is absent, so he's not taking a position 450 00:26:05,320 --> 00:26:08,320 Speaker 1: in favor of uh in in in extreme favor of 451 00:26:08,359 --> 00:26:11,320 Speaker 1: the budget is taking a much more moderate position. So 452 00:26:11,440 --> 00:26:14,400 Speaker 1: there's gonna be clearly stumble latility. But if you look 453 00:26:14,440 --> 00:26:19,840 Speaker 1: through that, there's potentially attractive opportunities also in other parts 454 00:26:19,840 --> 00:26:22,119 Speaker 1: of Europe, not necessarily in equally, but other parts that 455 00:26:22,160 --> 00:26:26,760 Speaker 1: are widening, that are falling in sympathy with with Italy. 456 00:26:27,200 --> 00:26:30,040 Speaker 1: You look at Spain, for example, or the UK, well 457 00:26:30,080 --> 00:26:33,960 Speaker 1: you have you have bond yield adjusted for currency in 458 00:26:34,000 --> 00:26:36,640 Speaker 1: the UK or in Spain, which are wider than many 459 00:26:36,680 --> 00:26:40,560 Speaker 1: emerging markets. You know, if you look at the Barclays bonds, 460 00:26:40,560 --> 00:26:43,800 Speaker 1: subbortinated bonds are wider than Ecuador. If you look at 461 00:26:43,840 --> 00:26:46,960 Speaker 1: the Spanish banks, you know they're wider than uh stub 462 00:26:47,040 --> 00:26:50,600 Speaker 1: story and African sovereigns. So there is a structural short 463 00:26:50,720 --> 00:26:55,200 Speaker 1: in Europe. Um, you don't need Europe to have extremely 464 00:26:55,280 --> 00:26:57,440 Speaker 1: high growth, you just need Europe not to break up 465 00:26:57,480 --> 00:27:00,639 Speaker 1: too and you get paid very well for that for that. 466 00:27:01,359 --> 00:27:03,520 Speaker 1: Alberto Guello, thank you so much for being with us, 467 00:27:03,600 --> 00:27:06,719 Speaker 1: and really interesting to think that even if Italy perhaps 468 00:27:06,800 --> 00:27:09,560 Speaker 1: is not a buy right now given the political uncertainty, 469 00:27:09,960 --> 00:27:14,359 Speaker 1: the relative widening of other areas in Europe do offer 470 00:27:14,400 --> 00:27:17,560 Speaker 1: some opportunities. Alberto Gaello, Partner and portfolio manager for the 471 00:27:17,600 --> 00:27:24,760 Speaker 1: Algebras Macro Credit Fund at Algebras Investments. Thanks for listening 472 00:27:24,760 --> 00:27:27,639 Speaker 1: to the Bloomberg P and L podcast. You can subscribe 473 00:27:27,680 --> 00:27:31,240 Speaker 1: and listen to interviews at Apple Podcasts, SoundCloud or whatever 474 00:27:31,320 --> 00:27:34,800 Speaker 1: podcast platform you prefer. I'm pim Fox. I'm on Twitter 475 00:27:35,080 --> 00:27:38,600 Speaker 1: at pim Fox. I'm on Twitter at Lisa Abramo. It's 476 00:27:38,640 --> 00:27:41,679 Speaker 1: one before the podcast. You can always catch us worldwide 477 00:27:41,680 --> 00:27:42,639 Speaker 1: on Bloomberg Radio.