1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul Swinge you. 2 00:00:05,360 --> 00:00:07,760 Speaker 1: Along with my co host Lisa Brahmas. Each day we 3 00:00:07,880 --> 00:00:10,440 Speaker 1: bring you the most noteworthy and useful interviews for you 4 00:00:10,520 --> 00:00:12,640 Speaker 1: and your money. Whether at the grocery store or the 5 00:00:12,640 --> 00:00:15,960 Speaker 1: trading floor. Find a Bloomberg Penl podcast on Apple podcast 6 00:00:16,120 --> 00:00:18,040 Speaker 1: or wherever you listen to podcasts, as well as at 7 00:00:18,079 --> 00:00:23,800 Speaker 1: Bloomberg dot com. All right, here's multiple choice question for 8 00:00:23,840 --> 00:00:26,000 Speaker 1: you on this Monday. Do you want to buy a 9 00:00:26,079 --> 00:00:29,600 Speaker 1: US Steepener gold, US equities or we work? If you 10 00:00:29,680 --> 00:00:31,480 Speaker 1: get a pre I p O. Luckily we're gonna have 11 00:00:31,520 --> 00:00:34,160 Speaker 1: a manage gonna answer that question. That's Hans Olsen, chief 12 00:00:34,200 --> 00:00:37,880 Speaker 1: investment officer a Fittisciary Trust with seventy eight million dollars 13 00:00:37,880 --> 00:00:40,760 Speaker 1: in assets under management. So cross asked that that was 14 00:00:40,800 --> 00:00:43,760 Speaker 1: your multiple choice question, which would you buy in ranking order? 15 00:00:44,920 --> 00:00:49,120 Speaker 1: We work gold, we work pre IPO, A Steepener gold 16 00:00:49,200 --> 00:00:53,959 Speaker 1: or US equities. Well, I'd have to do probably can 17 00:00:54,000 --> 00:00:58,600 Speaker 1: I get to pain by the way? Yeah? Okay, Well 18 00:00:58,640 --> 00:01:00,960 Speaker 1: that says a lot in then they have seven billion 19 00:01:01,000 --> 00:01:03,960 Speaker 1: dollars of assets under management. He has to buy everything 20 00:01:04,000 --> 00:01:07,000 Speaker 1: out there. So so why like it's my way of 21 00:01:07,040 --> 00:01:09,759 Speaker 1: trying to see, like, where is their actual value right now? Yeah? Yeah, 22 00:01:09,800 --> 00:01:11,839 Speaker 1: it's hard to find a lot of value any place 23 00:01:11,959 --> 00:01:14,920 Speaker 1: right now. And perhaps the areas that we find it 24 00:01:15,040 --> 00:01:19,000 Speaker 1: mostly would be in places like uh Europe, even the UK, 25 00:01:19,120 --> 00:01:22,679 Speaker 1: which is really a non consensus trade for sure. But 26 00:01:22,760 --> 00:01:25,399 Speaker 1: in the US, um you know, the earning scrowthon is there, 27 00:01:25,400 --> 00:01:28,480 Speaker 1: the multiples are expanding. It's been pretty tough. We're overweight 28 00:01:28,560 --> 00:01:31,400 Speaker 1: US equities for sure. We've tried to rotate more into 29 00:01:31,400 --> 00:01:34,880 Speaker 1: the low volatility types of names as a way to 30 00:01:35,000 --> 00:01:37,600 Speaker 1: do it responsibly. But but I have to say, Alex, 31 00:01:37,680 --> 00:01:40,720 Speaker 1: the environment right now is is not great for people 32 00:01:40,760 --> 00:01:43,360 Speaker 1: putting new money to work. We're speaking with Hans Olsen, 33 00:01:43,400 --> 00:01:47,040 Speaker 1: chief investment officer Fidishary Trust. Hans, just let's start maybe 34 00:01:47,040 --> 00:01:49,760 Speaker 1: just with your economic outlook. I mean, the U S 35 00:01:49,760 --> 00:01:52,559 Speaker 1: seems pretty solid, but we see some weird news. Alex 36 00:01:52,600 --> 00:01:54,360 Speaker 1: and I we were talking about earlier out of Germany 37 00:01:54,520 --> 00:01:56,400 Speaker 1: earlier today. So how do you view the kind of 38 00:01:56,400 --> 00:01:58,480 Speaker 1: the U S economy? Yeah, so the US company. If 39 00:01:58,520 --> 00:02:00,760 Speaker 1: we if I were to color code the US economy 40 00:02:01,360 --> 00:02:04,840 Speaker 1: with green being growth, yellow warning you know, danger, and 41 00:02:04,920 --> 00:02:07,720 Speaker 1: red recession I think we're probably going from green to 42 00:02:07,840 --> 00:02:10,240 Speaker 1: light green at the moment. So, whether it's the hard 43 00:02:10,320 --> 00:02:14,520 Speaker 1: data the soft data, we see a collection of of 44 00:02:14,600 --> 00:02:17,360 Speaker 1: surveys that all point to continued growth in the US 45 00:02:17,560 --> 00:02:21,320 Speaker 1: slower than what it's been, but continuing to grow. Is 46 00:02:21,360 --> 00:02:24,120 Speaker 1: your call on say U at UK equities and European equities, 47 00:02:24,160 --> 00:02:27,200 Speaker 1: is that based on a Brexit thing? Or is that 48 00:02:27,320 --> 00:02:29,920 Speaker 1: literally is that a value trade? Well, I think in 49 00:02:29,960 --> 00:02:33,160 Speaker 1: the in the UK, both in the UK and Europe, 50 00:02:33,440 --> 00:02:35,280 Speaker 1: you put the politics aside for a moment. If you 51 00:02:35,320 --> 00:02:38,720 Speaker 1: look at things like valuation and earnings growth, they're better, 52 00:02:38,760 --> 00:02:41,080 Speaker 1: They're more compelling than they are here in the United States. 53 00:02:41,320 --> 00:02:44,120 Speaker 1: It just happened to be wrapped in the difficult wrapper 54 00:02:44,200 --> 00:02:46,720 Speaker 1: of the politics. You know, our core assumption is that 55 00:02:46,760 --> 00:02:51,000 Speaker 1: perhaps Brexit won't be anywhere near as bad as people think. Um, 56 00:02:51,120 --> 00:02:54,480 Speaker 1: when you look at the statistics since the end of UM, 57 00:02:54,520 --> 00:02:57,119 Speaker 1: since the since the vote back in two thousand sixteen, 58 00:02:57,880 --> 00:03:01,000 Speaker 1: the one economy that has really defied expectations and the 59 00:03:01,040 --> 00:03:04,000 Speaker 1: popular narrative has been the UK economy, both in terms 60 00:03:04,000 --> 00:03:08,000 Speaker 1: of growth, inflation and the like. And uh, I'm not 61 00:03:08,040 --> 00:03:10,080 Speaker 1: so sure about what we couldn't see that continue to 62 00:03:10,120 --> 00:03:13,640 Speaker 1: happen even post Brexit. There will be some hiccups for sure, 63 00:03:14,040 --> 00:03:17,000 Speaker 1: but I'm not sure it will be as devastating as 64 00:03:17,040 --> 00:03:20,160 Speaker 1: people are are are postulating. So as you think about 65 00:03:20,160 --> 00:03:23,480 Speaker 1: your global portfolio, where are you kind of in the allocation? 66 00:03:23,480 --> 00:03:26,080 Speaker 1: How much risk are you taking these days? Um with 67 00:03:26,200 --> 00:03:28,840 Speaker 1: the portfolio. Yeah, so that's a good question because it's 68 00:03:28,880 --> 00:03:33,720 Speaker 1: really um an exercise in nuance increasingly UM So when 69 00:03:33,760 --> 00:03:36,240 Speaker 1: the US equity market, as I've said, we've we've been 70 00:03:36,360 --> 00:03:39,560 Speaker 1: rotating exposures, and where we have added exposure has been 71 00:03:39,600 --> 00:03:42,120 Speaker 1: to more of the low volatility names, right, trying to 72 00:03:42,120 --> 00:03:45,080 Speaker 1: stay away from any value biases. But but those companies 73 00:03:45,080 --> 00:03:48,840 Speaker 1: with dividends uh and have less of an attachment to 74 00:03:48,880 --> 00:03:51,040 Speaker 1: the overall market, so the data is lower to that 75 00:03:51,120 --> 00:03:54,080 Speaker 1: of the market. On the credit side, you know, we 76 00:03:54,200 --> 00:03:57,320 Speaker 1: have for some time been shorter in duration. We're lengthening 77 00:03:57,320 --> 00:03:59,440 Speaker 1: out the duration because I think there is a real 78 00:03:59,600 --> 00:04:01,720 Speaker 1: possible ability that in the next part of the cycle, 79 00:04:02,680 --> 00:04:06,200 Speaker 1: amazingly enough, the US we'll see negative interest rates. And 80 00:04:06,240 --> 00:04:07,600 Speaker 1: the other thing that we've been doing is we've been 81 00:04:07,840 --> 00:04:12,240 Speaker 1: pivoting up into higher quality credits to in an attempt 82 00:04:12,280 --> 00:04:14,880 Speaker 1: to get some sort of carry um, So it's kind 83 00:04:14,920 --> 00:04:17,760 Speaker 1: of a belt and suspenders type of exercise. So what 84 00:04:17,800 --> 00:04:19,560 Speaker 1: I would say to that is that you're not alone. 85 00:04:19,839 --> 00:04:22,280 Speaker 1: And what I mean by that is that low volatility 86 00:04:22,320 --> 00:04:24,880 Speaker 1: stocks have now inherently become more volatile because there's so 87 00:04:24,960 --> 00:04:26,719 Speaker 1: much ment now money into it for the reasons that 88 00:04:26,760 --> 00:04:28,840 Speaker 1: you said. You can make the same argument for going 89 00:04:28,920 --> 00:04:31,800 Speaker 1: up the safety curve when it comes to an investment grade, 90 00:04:32,160 --> 00:04:35,400 Speaker 1: and many argue that we're way overbought when it comes 91 00:04:35,400 --> 00:04:37,919 Speaker 1: to the long end. So how do you deal with that? 92 00:04:37,960 --> 00:04:39,920 Speaker 1: What do you say? Yeah, yeah, I think it all 93 00:04:39,920 --> 00:04:42,600 Speaker 1: depends upon what your benchmark duration is, right. So we're 94 00:04:42,640 --> 00:04:45,400 Speaker 1: we're not going out thirty years or twenty years. We're 95 00:04:45,400 --> 00:04:47,599 Speaker 1: really trying to stay right on the benchmark, and for 96 00:04:47,720 --> 00:04:51,320 Speaker 1: us that's probably going to be around four years five years, UM, 97 00:04:51,440 --> 00:04:53,960 Speaker 1: whereas we were two to three years before. So we've 98 00:04:54,000 --> 00:04:56,200 Speaker 1: we've lengked the note. And you're right, there's a lot 99 00:04:56,240 --> 00:04:59,080 Speaker 1: of money in movement. Money is trying to find a home. 100 00:04:59,320 --> 00:05:02,400 Speaker 1: Especially we're back to the Tina principle right where there 101 00:05:02,440 --> 00:05:06,200 Speaker 1: is no alternative equities. Um. So it's it's not a 102 00:05:06,240 --> 00:05:08,839 Speaker 1: perfect trade, but I think it's a trade and certainly 103 00:05:08,839 --> 00:05:11,040 Speaker 1: over the the the adject that we've seen over the 104 00:05:11,160 --> 00:05:14,120 Speaker 1: last week or so, those low ball names that we've 105 00:05:14,160 --> 00:05:17,560 Speaker 1: invested and have held up quite well relatively, you know, 106 00:05:17,600 --> 00:05:20,560 Speaker 1: they've they've outperformed by about three hundred basis points, which 107 00:05:20,600 --> 00:05:23,000 Speaker 1: is not bad in an environment like that. So, Hans, 108 00:05:23,040 --> 00:05:24,440 Speaker 1: what do you what do you expect to hear out 109 00:05:24,440 --> 00:05:26,120 Speaker 1: of Jackson Hole at the end of this week. A 110 00:05:26,120 --> 00:05:28,760 Speaker 1: lot of market participants think it's a very very important 111 00:05:28,800 --> 00:05:32,320 Speaker 1: time for Chairman Pal to articulate kind of how he 112 00:05:32,440 --> 00:05:35,720 Speaker 1: views the FED over the next you know, several quarters. Yeah, yeah, 113 00:05:35,760 --> 00:05:38,159 Speaker 1: I think I think the tell is going to be 114 00:05:38,800 --> 00:05:42,200 Speaker 1: Actually what there was a white paper that the I 115 00:05:42,400 --> 00:05:45,400 Speaker 1: m F released and it reads something like a guide 116 00:05:45,440 --> 00:05:49,280 Speaker 1: to deeply negative interest rates to fight Recession. It's it's 117 00:05:49,279 --> 00:05:52,240 Speaker 1: sort of it's eighty five page white paper that is 118 00:05:52,320 --> 00:05:55,120 Speaker 1: the that lays out the fund the foundations and the 119 00:05:55,120 --> 00:06:00,200 Speaker 1: fundamentals about how to position the concept of negative interest rates. 120 00:06:00,279 --> 00:06:02,720 Speaker 1: I think, particularly in the United States, and you're already 121 00:06:02,760 --> 00:06:05,719 Speaker 1: seeing some of the FED governors talk about it um 122 00:06:06,080 --> 00:06:09,720 Speaker 1: that it's not so unusual and that zero bound is 123 00:06:09,800 --> 00:06:12,520 Speaker 1: really just a number. I think we'll start to see 124 00:06:12,560 --> 00:06:17,360 Speaker 1: more of that conversation tumble out of Jackson hole without 125 00:06:17,360 --> 00:06:19,400 Speaker 1: a doubt, and we're sort of setting ourselves up for 126 00:06:19,440 --> 00:06:22,760 Speaker 1: the next cycle for I think higher probability of negative 127 00:06:22,760 --> 00:06:25,520 Speaker 1: interest rates, which when you think about the US in 128 00:06:25,560 --> 00:06:28,200 Speaker 1: the US, when you think about it in the reserve currency, 129 00:06:29,120 --> 00:06:33,240 Speaker 1: never never, but but a reserve like currency, the Swiss 130 00:06:33,240 --> 00:06:36,480 Speaker 1: franc they have negative interest rates. The entire German sovereign 131 00:06:36,560 --> 00:06:40,279 Speaker 1: curve is below zero um. And you know, we have 132 00:06:40,320 --> 00:06:44,120 Speaker 1: what sixteen seventeen trillion dollars worth of negative yielding debt 133 00:06:44,200 --> 00:06:47,400 Speaker 1: of both the sovereign and corporate variety in Europe. But 134 00:06:47,440 --> 00:06:49,000 Speaker 1: does that bring up M M T. And I say 135 00:06:49,000 --> 00:06:50,760 Speaker 1: that because I've been talking about this black Bock paper 136 00:06:50,800 --> 00:06:52,840 Speaker 1: all morning and probably boring Paul at this point, which 137 00:06:52,839 --> 00:06:55,840 Speaker 1: is basically they talked about just that helicopter money. You're 138 00:06:55,839 --> 00:06:58,160 Speaker 1: going to have to have coordinated monetary and physical policy 139 00:06:58,440 --> 00:07:00,840 Speaker 1: in order to get stuff done in the next recession. 140 00:07:00,880 --> 00:07:03,440 Speaker 1: I mean, is that basically what you think we're headed for? 141 00:07:03,640 --> 00:07:06,680 Speaker 1: To sailing and observations there. Number one, I think we've 142 00:07:06,680 --> 00:07:10,520 Speaker 1: come to the limits of monetary policy, and that's why 143 00:07:10,560 --> 00:07:13,240 Speaker 1: I think we're hearing about you know, the ideas of 144 00:07:13,280 --> 00:07:17,000 Speaker 1: another tax cut being floated this morning. And the other 145 00:07:17,040 --> 00:07:22,120 Speaker 1: thing is that, uh, you know, when we're running trillion 146 00:07:22,160 --> 00:07:25,720 Speaker 1: dollar plus uh deficits, which is what we're doing, especially 147 00:07:25,760 --> 00:07:27,520 Speaker 1: at this point in the cycle, when we're talking about 148 00:07:27,600 --> 00:07:30,280 Speaker 1: more tax cuts and we are talking about negative interest 149 00:07:30,360 --> 00:07:35,080 Speaker 1: rates even considering them, that is actually you know, modern 150 00:07:35,120 --> 00:07:38,240 Speaker 1: monetary theory, perhaps dressed up a little bit differently, but 151 00:07:38,320 --> 00:07:42,400 Speaker 1: that's effectively it. So I think we're kind of there 152 00:07:42,440 --> 00:07:46,160 Speaker 1: in many respects, and that's a really uncomfortable um um 153 00:07:46,280 --> 00:07:49,680 Speaker 1: thought to ponder. Interesting. Hans Aulsen, thank you so much 154 00:07:49,720 --> 00:07:54,000 Speaker 1: for joining us. Hans is chief investment officer for Fiduciary Trust, 155 00:07:54,040 --> 00:08:11,880 Speaker 1: joining us here on our Bloomberg Interactive Broker Studio. Let's 156 00:08:11,880 --> 00:08:14,160 Speaker 1: turn our attention now to gold that come out of 157 00:08:14,160 --> 00:08:17,680 Speaker 1: the commodity is up about year to date. So is 158 00:08:17,720 --> 00:08:20,120 Speaker 1: that just a move by investors for a safe haven 159 00:08:20,120 --> 00:08:23,040 Speaker 1: asthmet asset, is there's something else driving the commodity to 160 00:08:23,080 --> 00:08:26,920 Speaker 1: get those answers? We welcome Joe Cavatoni, Managing Director of 161 00:08:26,920 --> 00:08:29,040 Speaker 1: the World Gold Council US joints us here in our 162 00:08:29,040 --> 00:08:31,800 Speaker 1: Bloomberg Interact the Broker Studio. So Joe, thanks so much 163 00:08:31,840 --> 00:08:33,960 Speaker 1: for being here give us a sense of what is 164 00:08:34,080 --> 00:08:37,920 Speaker 1: driving gold here. So far, it's great to be here. 165 00:08:38,080 --> 00:08:41,480 Speaker 1: What's driving gold in two thousand eighteen into nineteen has 166 00:08:41,520 --> 00:08:45,840 Speaker 1: been pretty much risk and uncertainty, market risk and uncertainty, 167 00:08:46,240 --> 00:08:50,160 Speaker 1: a client or an investors inability to understand where really 168 00:08:50,320 --> 00:08:53,120 Speaker 1: the direction of the markets is going to go, and 169 00:08:53,440 --> 00:08:58,040 Speaker 1: hearing regular and ongoing updates of large systemic issues that 170 00:08:58,120 --> 00:09:01,959 Speaker 1: give them caution and concern. If it is talks about 171 00:09:02,160 --> 00:09:06,520 Speaker 1: implementation of potential tariffs, if there's concerns around negotiations with China, 172 00:09:07,080 --> 00:09:10,080 Speaker 1: whether there's a hard or soft exit, and Brexit, all 173 00:09:10,120 --> 00:09:13,120 Speaker 1: of these factors are all playing in now. Added as 174 00:09:13,160 --> 00:09:16,040 Speaker 1: of laid has been an increased concern, particularly in the 175 00:09:16,120 --> 00:09:19,040 Speaker 1: US market, over negative real rates or is that even 176 00:09:19,120 --> 00:09:22,760 Speaker 1: feasible or possible, so the rate moves, the dovish stance 177 00:09:22,800 --> 00:09:26,559 Speaker 1: of the FED all factoring in gold as an asset 178 00:09:26,720 --> 00:09:30,320 Speaker 1: is a global asset. So while we're seeing big risk 179 00:09:30,400 --> 00:09:33,360 Speaker 1: factors that are taking place in developed markets around the world, 180 00:09:33,400 --> 00:09:36,360 Speaker 1: maybe even the emerging markets, you're also seeing a shift 181 00:09:36,360 --> 00:09:41,000 Speaker 1: as well globally around the dollarization and monetary policy that's 182 00:09:41,080 --> 00:09:43,400 Speaker 1: leading central banks to be buyers so we're seeing investors 183 00:09:43,440 --> 00:09:46,600 Speaker 1: taking risk positions that are careful, and we're also seeing 184 00:09:46,600 --> 00:09:49,880 Speaker 1: central banks shifting their monetary policy to address it. So 185 00:09:49,920 --> 00:09:52,199 Speaker 1: I was coming gold back in the olden days two 186 00:09:52,520 --> 00:09:55,360 Speaker 1: nine for a few years. So I was part of 187 00:09:55,360 --> 00:09:57,520 Speaker 1: all that conversation of what we see gold hit two 188 00:09:57,600 --> 00:10:00,160 Speaker 1: thousand and if I have thought we'd hit negative rates 189 00:10:00,440 --> 00:10:02,640 Speaker 1: UH in many many countries and that we could see 190 00:10:02,640 --> 00:10:04,760 Speaker 1: it in the US, I would expect it easy goal 191 00:10:04,800 --> 00:10:07,679 Speaker 1: to be what does it tell you that we're not? 192 00:10:09,640 --> 00:10:11,360 Speaker 1: What does it tell us that we're not? What I 193 00:10:11,400 --> 00:10:15,319 Speaker 1: think we need to understand is that the demand cycle 194 00:10:15,400 --> 00:10:19,120 Speaker 1: for gold is driven and importantly needs to be understood 195 00:10:19,160 --> 00:10:23,560 Speaker 1: and driven by strategic factors. So what I think we 196 00:10:23,600 --> 00:10:26,960 Speaker 1: need to be careful and cautious of is momentum and 197 00:10:27,080 --> 00:10:31,320 Speaker 1: short term opportunity costs move the price fast and actually 198 00:10:31,440 --> 00:10:33,760 Speaker 1: in large percentage amounts. On a given day. We're almost 199 00:10:33,760 --> 00:10:36,960 Speaker 1: down one percent today. Let's not get caught up in that. 200 00:10:37,080 --> 00:10:39,480 Speaker 1: What I'd say is going back to your two thousand 201 00:10:39,640 --> 00:10:43,679 Speaker 1: nine timeline, and actually goal goes even further back some 202 00:10:43,840 --> 00:10:48,480 Speaker 1: five thousand years. I was talking about what I think 203 00:10:48,559 --> 00:10:51,520 Speaker 1: is important for people to understand is that in this 204 00:10:51,640 --> 00:10:54,840 Speaker 1: wave of demand increasing that we're seeing. This looks to 205 00:10:54,880 --> 00:10:58,920 Speaker 1: be investors taking a strategic position, overweight in their commodity 206 00:10:58,960 --> 00:11:03,400 Speaker 1: bucket and positioning for longer term systemic issues. So the 207 00:11:03,440 --> 00:11:07,559 Speaker 1: financial risk the longer term, it's going to be a slow, methodical, 208 00:11:07,800 --> 00:11:11,959 Speaker 1: continual increase in demand. Potentially, so will we get I'm 209 00:11:11,960 --> 00:11:15,480 Speaker 1: not entirely sure, but what we're seeing today are signals 210 00:11:15,520 --> 00:11:18,440 Speaker 1: telling us that gold as a relevant asset is going 211 00:11:18,480 --> 00:11:21,640 Speaker 1: to continue to remain very high. Our conversations, again with 212 00:11:21,679 --> 00:11:25,760 Speaker 1: institutional investors in particular, are about how much gold should 213 00:11:25,760 --> 00:11:27,920 Speaker 1: I have in my portfolio, not this question of do 214 00:11:28,000 --> 00:11:30,800 Speaker 1: I have a need for it in my portfolio. It's 215 00:11:30,920 --> 00:11:34,040 Speaker 1: being found more and more prevalent in the conversations with 216 00:11:34,080 --> 00:11:37,480 Speaker 1: institutional investors. What are the e t f s doing 217 00:11:37,600 --> 00:11:39,840 Speaker 1: with gold and how are they impacting the gold market? 218 00:11:40,360 --> 00:11:43,320 Speaker 1: The e t f s are proving to be exactly 219 00:11:43,360 --> 00:11:47,400 Speaker 1: what we know them to be, an exceptional vehicle for 220 00:11:47,520 --> 00:11:50,720 Speaker 1: investors to make a decision to invest in the precious 221 00:11:50,760 --> 00:11:54,760 Speaker 1: metal itself. They can own the gold through the exchange 222 00:11:54,760 --> 00:11:57,000 Speaker 1: traded fund, not only in the US market, which we 223 00:11:57,040 --> 00:11:59,719 Speaker 1: all know a lot about. But what we're seeing are 224 00:11:59,800 --> 00:12:04,319 Speaker 1: you K investors, German investors in particular, driving enormous amounts 225 00:12:04,320 --> 00:12:07,480 Speaker 1: of demand. So a year to date, about nine percent 226 00:12:07,520 --> 00:12:09,520 Speaker 1: of net new assets have flown into e T s. 227 00:12:09,559 --> 00:12:12,320 Speaker 1: With price appreciation, that pool is up to nearly one 228 00:12:12,840 --> 00:12:16,280 Speaker 1: thirty billion in overall holdings in e TF. So we're 229 00:12:16,320 --> 00:12:19,800 Speaker 1: seeing investors saying I need to make a strategic decision. 230 00:12:20,240 --> 00:12:22,920 Speaker 1: I want to own gold as a commodity or as 231 00:12:22,920 --> 00:12:27,760 Speaker 1: a precious metal or in a particular investment bucket, divorcing 232 00:12:27,800 --> 00:12:30,600 Speaker 1: themselves from concerning whether it's a commodity or it's not, 233 00:12:31,000 --> 00:12:34,080 Speaker 1: simply saying it's a core allocation of my portfolio. So 234 00:12:34,120 --> 00:12:35,880 Speaker 1: the e T s are enabling people to get it done. 235 00:12:36,280 --> 00:12:41,040 Speaker 1: Volumes are transparent, which is helpful and actually significant. So 236 00:12:41,080 --> 00:12:44,400 Speaker 1: if you need to buy, as an institution large percentages 237 00:12:44,440 --> 00:12:46,360 Speaker 1: of gold over a course of a day, you're going 238 00:12:46,400 --> 00:12:48,560 Speaker 1: to be able to get it done. Now, one last 239 00:12:48,559 --> 00:12:51,560 Speaker 1: point that I'll make is that in the US, while 240 00:12:51,600 --> 00:12:54,000 Speaker 1: we know that there are institutional flows that are going 241 00:12:54,000 --> 00:12:56,920 Speaker 1: into the exchange traded funds, don't overlook the amount of 242 00:12:57,080 --> 00:12:59,880 Speaker 1: retail investment that goes into these et s as well. 243 00:13:00,200 --> 00:13:02,080 Speaker 1: If you're looking at the big wires or you're looking 244 00:13:02,080 --> 00:13:05,160 Speaker 1: at the large platforms in the US. They all have 245 00:13:05,400 --> 00:13:09,160 Speaker 1: available on them some mechanism to exchange traded funds to 246 00:13:09,200 --> 00:13:11,800 Speaker 1: get access to gold, and there's plenty of choices today too. 247 00:13:12,200 --> 00:13:16,120 Speaker 1: What happens if the dollar doesn't depreciate. I think that 248 00:13:16,160 --> 00:13:19,520 Speaker 1: you need to understand that the dollar is one only 249 00:13:19,559 --> 00:13:23,000 Speaker 1: one factor. Remember, gold as a global asset is impacted 250 00:13:23,000 --> 00:13:25,880 Speaker 1: by demand in China and India, which makes up nearly 251 00:13:27,160 --> 00:13:31,719 Speaker 1: It's driven by European geo political risk or or or 252 00:13:31,760 --> 00:13:35,480 Speaker 1: economic concerns in those markets. So it's an important factor, 253 00:13:35,640 --> 00:13:38,640 Speaker 1: but it's not the only factor to take into consideration. 254 00:13:39,080 --> 00:13:41,800 Speaker 1: So the dollar has been kind of flatlining, right, But 255 00:13:41,880 --> 00:13:43,760 Speaker 1: where are we going with gold? We're seeing a noticeable 256 00:13:43,800 --> 00:13:46,480 Speaker 1: appreciation in the price. Why because the other factors are 257 00:13:46,559 --> 00:13:50,760 Speaker 1: kicking in again, stepping away from tactical short term concerning 258 00:13:50,760 --> 00:13:54,439 Speaker 1: issues which are important to understand, but understanding that financial 259 00:13:54,480 --> 00:13:56,720 Speaker 1: market and the risks that come along with that will 260 00:13:56,760 --> 00:13:59,800 Speaker 1: be driving long term. So just real, real quick, Joe, 261 00:14:00,280 --> 00:14:02,480 Speaker 1: you mentioned central bank buying. Just give us a sense 262 00:14:02,520 --> 00:14:06,400 Speaker 1: of how that works, what and just how it plays out. Basically, 263 00:14:06,440 --> 00:14:09,679 Speaker 1: they're buying the bullion outright in the bullying market. They 264 00:14:09,720 --> 00:14:12,640 Speaker 1: go into the OTC markets or the dealer market in 265 00:14:12,679 --> 00:14:16,880 Speaker 1: the European arena, for example, and ultimately they're they're continuing 266 00:14:17,160 --> 00:14:19,040 Speaker 1: I think it's now a nineteen year trend that we've 267 00:14:19,080 --> 00:14:21,920 Speaker 1: seen in terms of increased the levels of of gold 268 00:14:21,960 --> 00:14:25,040 Speaker 1: being added to the portfolio for monetary policy. So they're 269 00:14:25,040 --> 00:14:27,600 Speaker 1: buying the real stuff. They're buying the real stuff. Absolutely. 270 00:14:27,800 --> 00:14:29,840 Speaker 1: Joe Cavitoni, thanks so much for joining us. Joe's a 271 00:14:29,840 --> 00:14:32,880 Speaker 1: Managing director for the World Council uh US talking to 272 00:14:32,960 --> 00:14:35,240 Speaker 1: us all things about go get it, getting us updated 273 00:14:35,360 --> 00:14:37,960 Speaker 1: on gold and it's a nice chart for the year 274 00:14:38,080 --> 00:14:56,480 Speaker 1: looking at that. Boy in. One part of the economy 275 00:14:56,480 --> 00:14:59,880 Speaker 1: that remains very strong is the consumer um and let's 276 00:15:00,080 --> 00:15:02,720 Speaker 1: how the consumer is doing, particularly millennials and the younger 277 00:15:02,760 --> 00:15:05,400 Speaker 1: demos in terms of buying homes and getting mortgages and 278 00:15:05,400 --> 00:15:08,640 Speaker 1: all that fun stuff. With that, we welcome Vishaal gark. 279 00:15:08,640 --> 00:15:10,480 Speaker 1: He is a founder and CEO Better dot Com. He 280 00:15:10,560 --> 00:15:13,480 Speaker 1: joins us here in our Bloomberg Interactive Broker studio. Rochelle, 281 00:15:13,480 --> 00:15:15,520 Speaker 1: thanks so much for joining us. I wonder if you 282 00:15:15,520 --> 00:15:17,880 Speaker 1: could just give us just a brief description of what 283 00:15:18,040 --> 00:15:20,720 Speaker 1: Better dot Com is what are you guys doing. Uh, 284 00:15:20,920 --> 00:15:23,800 Speaker 1: thanks so much Paul and Lisa for having me better. 285 00:15:23,840 --> 00:15:29,200 Speaker 1: Dot com is revolutionizing access to homeownership UH for millennials, 286 00:15:29,480 --> 00:15:34,680 Speaker 1: and we're doing it by making the entire process better, faster, cheaper, 287 00:15:34,840 --> 00:15:37,760 Speaker 1: so you can get a better mortgage and by doing that, 288 00:15:37,800 --> 00:15:40,040 Speaker 1: you can get a better house. Uh. You can save 289 00:15:40,120 --> 00:15:42,440 Speaker 1: up to three thousand dollars or more on a typical 290 00:15:42,520 --> 00:15:45,880 Speaker 1: three thousand dollar house uh in just upfront fees because 291 00:15:45,880 --> 00:15:48,200 Speaker 1: we don't charge any commissions and we don't charge any 292 00:15:48,200 --> 00:15:52,000 Speaker 1: origination fees. And on top of that, UH, you can 293 00:15:52,000 --> 00:15:54,840 Speaker 1: save some money on your rate. So an average consumer 294 00:15:54,880 --> 00:15:57,000 Speaker 1: will save as much as a year on a three 295 00:15:57,600 --> 00:16:01,240 Speaker 1: dollar mortgage of compared to your tradition mortgage banks or 296 00:16:01,280 --> 00:16:04,720 Speaker 1: mortgage brokers. Because we take the commissions out of the process, 297 00:16:04,720 --> 00:16:07,480 Speaker 1: we've automated a huge chunk of the process. We made 298 00:16:07,520 --> 00:16:10,160 Speaker 1: everything much, much, much of it better. How do you 299 00:16:10,160 --> 00:16:14,440 Speaker 1: make money? Uh? We make money mostly by uh packaging 300 00:16:14,480 --> 00:16:18,520 Speaker 1: the loans and having investors who uh we have thirty 301 00:16:18,520 --> 00:16:21,240 Speaker 1: two investors on our platform with about seven billion dollars 302 00:16:21,280 --> 00:16:24,040 Speaker 1: of demand. A lot of the largest financial institutions in 303 00:16:24,040 --> 00:16:27,760 Speaker 1: the country who actually want to have mortgages that are 304 00:16:27,800 --> 00:16:30,960 Speaker 1: not originated by a commission loan officer or mortgage broker, 305 00:16:31,520 --> 00:16:34,320 Speaker 1: because those typically tend to perform much much better, and 306 00:16:34,400 --> 00:16:36,800 Speaker 1: so they pay us a premium for their mortgages and 307 00:16:36,960 --> 00:16:39,720 Speaker 1: that's how we pay the bills. UM. You know, today 308 00:16:39,720 --> 00:16:42,040 Speaker 1: we just announced that we raise a hundred and sixty 309 00:16:42,080 --> 00:16:45,600 Speaker 1: million dollars from some great investors American Express City Bank, 310 00:16:45,760 --> 00:16:50,160 Speaker 1: Ally Bank UH, the Health Plan of Ontario Pinebroke investors, 311 00:16:50,560 --> 00:16:53,400 Speaker 1: and a lot of that. You know, when it comes 312 00:16:53,400 --> 00:16:56,440 Speaker 1: down to is all of those banks and major investors 313 00:16:56,760 --> 00:16:59,400 Speaker 1: are investing in us UH for the reason that I 314 00:16:59,440 --> 00:17:02,680 Speaker 1: started the me five years ago. So five years ago, 315 00:17:02,760 --> 00:17:06,240 Speaker 1: my wife was pregnant with our second child. We were 316 00:17:06,560 --> 00:17:10,159 Speaker 1: shopping for houses just people do, UH, and it was 317 00:17:10,200 --> 00:17:12,399 Speaker 1: just a really tough process to get a mortgage. My 318 00:17:12,440 --> 00:17:14,840 Speaker 1: wife worked at a big bank and even there, it 319 00:17:14,880 --> 00:17:19,000 Speaker 1: took our sixty days to get a mortgage approval, and 320 00:17:19,080 --> 00:17:20,600 Speaker 1: we lost the house that we were going to buy 321 00:17:20,640 --> 00:17:22,720 Speaker 1: to an all cash buyer who actually even paid less 322 00:17:22,720 --> 00:17:26,439 Speaker 1: than we did. And UH, I thought that was fundamentally unfair. 323 00:17:26,760 --> 00:17:32,760 Speaker 1: Like branch visits, facts machines going at Kinko's, and like 324 00:17:33,119 --> 00:17:36,360 Speaker 1: literally UH sending my Social Security number and all these 325 00:17:36,359 --> 00:17:39,840 Speaker 1: documents over on security email had cost us the home 326 00:17:39,920 --> 00:17:41,720 Speaker 1: that we want to buy. So it's like, we're gonna 327 00:17:41,720 --> 00:17:45,280 Speaker 1: make this better. Seventy of Americans need a mortgage to 328 00:17:45,320 --> 00:17:51,440 Speaker 1: buy a home. And how is this thing that everywhere 329 00:17:51,480 --> 00:17:55,720 Speaker 1: everyone uses? How is this industry that's fifteen trillion dollars 330 00:17:55,720 --> 00:17:58,360 Speaker 1: in size exists as if the Internet was never invented. 331 00:17:59,200 --> 00:18:02,920 Speaker 1: Do millenns buy homes? They do? Their home ownership rate 332 00:18:03,200 --> 00:18:07,760 Speaker 1: is half of that of traditional UH generations before, like 333 00:18:07,840 --> 00:18:10,800 Speaker 1: the baby movers and like so on average, you know 334 00:18:11,720 --> 00:18:14,200 Speaker 1: of that those earlier generations were able to buy a home. 335 00:18:14,520 --> 00:18:17,760 Speaker 1: Right now millennials about thirty five percent of them own 336 00:18:17,800 --> 00:18:20,440 Speaker 1: a home, So there's this massive demand for them coming 337 00:18:20,840 --> 00:18:23,760 Speaker 1: people like that. Do you think a lot of it 338 00:18:23,800 --> 00:18:27,080 Speaker 1: has to do with challenges with student loans? Um They 339 00:18:27,280 --> 00:18:30,119 Speaker 1: have a ton of student loans, so instead of spending 340 00:18:30,119 --> 00:18:32,800 Speaker 1: the first fifteen years of their working lives saving up 341 00:18:32,840 --> 00:18:34,919 Speaker 1: money to get a down payment to buy a home, 342 00:18:35,080 --> 00:18:37,600 Speaker 1: they're paying off the loans for college. But there are 343 00:18:37,640 --> 00:18:40,600 Speaker 1: all these products that are out there that your traditional 344 00:18:40,600 --> 00:18:43,840 Speaker 1: mortgage broker doesn't know. Products by Fannie made that enable 345 00:18:43,960 --> 00:18:46,560 Speaker 1: first time home buyers to put as little as three 346 00:18:46,560 --> 00:18:50,280 Speaker 1: percent down to buy a home. And over half of 347 00:18:50,280 --> 00:18:54,480 Speaker 1: our customer base, particularly for those buying a home, is millennials, 348 00:18:54,680 --> 00:18:56,639 Speaker 1: and the average is thirty eight. And a lot of 349 00:18:56,680 --> 00:19:00,520 Speaker 1: them are just they they want, they're they're getting, they're 350 00:19:00,560 --> 00:19:04,240 Speaker 1: having kids, they're putting down roots. Um, they want to 351 00:19:04,280 --> 00:19:06,760 Speaker 1: have a play room that they can actually paint the 352 00:19:06,800 --> 00:19:11,239 Speaker 1: way the color they want. And so we see a 353 00:19:11,240 --> 00:19:14,280 Speaker 1: lot of millennials entering. They're actually the largest group of 354 00:19:14,800 --> 00:19:17,840 Speaker 1: home buyers this year. So as we've seen rates fall, 355 00:19:18,119 --> 00:19:20,640 Speaker 1: what kind of activity have you noticed? We have seen 356 00:19:20,720 --> 00:19:23,520 Speaker 1: demand go through the roof. Our business is up over 357 00:19:24,760 --> 00:19:26,960 Speaker 1: from the year before. We're on track to do over 358 00:19:27,000 --> 00:19:30,119 Speaker 1: five billion of mortgages this year and almost fifteen billion 359 00:19:30,240 --> 00:19:33,359 Speaker 1: or so next year. And it's an amazing time to 360 00:19:33,400 --> 00:19:36,680 Speaker 1: buy because rates being as low as they are, lower 361 00:19:36,720 --> 00:19:40,040 Speaker 1: than they've ever been in the past, means lower rates, 362 00:19:40,359 --> 00:19:43,640 Speaker 1: higher affordability. Higher affordability means you can buy a better 363 00:19:43,720 --> 00:19:46,400 Speaker 1: house for the same amount of money. Remember, a lot 364 00:19:46,400 --> 00:19:48,600 Speaker 1: of people are renting, but when you're renting, you're just 365 00:19:48,680 --> 00:19:53,840 Speaker 1: paying your landlords mortgage. Exactly. Homeownership. Homeownership that's kind of 366 00:19:53,880 --> 00:19:55,880 Speaker 1: been it's the issue about the millennials kind of being 367 00:19:55,960 --> 00:19:59,200 Speaker 1: underrepresented in home ownership, but the potentially upside there for 368 00:19:59,240 --> 00:20:02,000 Speaker 1: the housing market. Shall garg founder and CEO Better dot 369 00:20:02,040 --> 00:20:05,240 Speaker 1: Com joining us here in our Bloomberg Interactive Broker studio, 370 00:20:05,440 --> 00:20:21,840 Speaker 1: thank you so much better rhetor coming out of the 371 00:20:21,840 --> 00:20:24,280 Speaker 1: White House about trade. Let's see where the action is 372 00:20:24,520 --> 00:20:27,159 Speaker 1: with small Stock returned to Bloomberg Stocks editor Dave Wilson, Dave, 373 00:20:27,200 --> 00:20:28,840 Speaker 1: what are you looking at this morning? Well, I'm looking 374 00:20:28,880 --> 00:20:32,560 Speaker 1: at smaller companies doing a bit better than larger ones, 375 00:20:32,600 --> 00:20:35,080 Speaker 1: at least for the moment. The Russell two thousand index 376 00:20:35,200 --> 00:20:37,320 Speaker 1: up one point three percent. In the S and P 377 00:20:37,480 --> 00:20:40,840 Speaker 1: five hundreds up one point two percent. Now one of 378 00:20:40,840 --> 00:20:44,399 Speaker 1: the Russell's biggest games belongs to Empire Resorts, whose ticker 379 00:20:44,600 --> 00:20:48,800 Speaker 1: is n Y and why the casino owner has climbed 380 00:20:48,840 --> 00:20:53,359 Speaker 1: fifteen percent after its Malaysian majority owner offered to buy 381 00:20:53,400 --> 00:20:58,480 Speaker 1: the shares it doesn't already hold. Uh Saws ticker s 382 00:20:58,480 --> 00:21:00,719 Speaker 1: O n O is at a twelve and half percent. 383 00:21:01,000 --> 00:21:03,920 Speaker 1: The maker of audio equipment was raised that Raymond James 384 00:21:04,000 --> 00:21:07,800 Speaker 1: to the firm's top ratings. Strong By and tanker stocks 385 00:21:07,800 --> 00:21:12,359 Speaker 1: are higher after dry Ships chairman and CEO Georgia Economu, 386 00:21:12,520 --> 00:21:14,679 Speaker 1: agreed to buy the shares of his company that he 387 00:21:14,800 --> 00:21:19,159 Speaker 1: doesn't already own. Nordic American Tankers ticker and A T 388 00:21:19,520 --> 00:21:22,840 Speaker 1: has risen eight percent, and t K Tankers ticker t 389 00:21:23,240 --> 00:21:27,040 Speaker 1: n K has advanced six and a half percent. Now 390 00:21:27,080 --> 00:21:29,720 Speaker 1: A one of the Russell's steepest drops belongs to Revlon 391 00:21:30,000 --> 00:21:33,040 Speaker 1: ticker r e V. The cosmetics maker has fallen about 392 00:21:33,080 --> 00:21:36,520 Speaker 1: four and a half percent after gaining more than fifteen 393 00:21:36,520 --> 00:21:40,800 Speaker 1: percent on Thursday and Friday. The earlier advance followed our 394 00:21:40,920 --> 00:21:46,240 Speaker 1: report that Revlon hired Goldman Sachs to look at strategic alternatives. 395 00:21:46,640 --> 00:21:49,880 Speaker 1: Bloomber Stocks editor Davals and thank you so much. Well, 396 00:21:49,960 --> 00:21:53,440 Speaker 1: the tech companies are back down in Washington. This time 397 00:21:53,560 --> 00:21:57,520 Speaker 1: they're they're testifying in support of a Trump administration effort 398 00:21:57,560 --> 00:22:01,080 Speaker 1: to potentially punish France for enacting a three percent tax 399 00:22:01,119 --> 00:22:03,680 Speaker 1: on global tech companies. To get the latest, we welcome 400 00:22:03,760 --> 00:22:07,400 Speaker 1: Laura Davison laaras Congressional tax reporter for Bloomberg News, joining 401 00:22:07,440 --> 00:22:09,640 Speaker 1: us on the phone from Washington, d C. Laura, thanks 402 00:22:09,640 --> 00:22:11,720 Speaker 1: so much for joining us. So again, we got the 403 00:22:11,760 --> 00:22:13,920 Speaker 1: big tech companies in front of Washington, but a little 404 00:22:13,960 --> 00:22:17,880 Speaker 1: bit different tack today. What are they trying to get across? Yeah, 405 00:22:17,880 --> 00:22:21,160 Speaker 1: so they're really concerned about this, Uh, this tax that France, 406 00:22:21,240 --> 00:22:26,440 Speaker 1: France has passed that would target largely large US companies Google, Amazon, Facebook, um, 407 00:22:26,480 --> 00:22:28,840 Speaker 1: and and so the Trump administration has said, yes, we 408 00:22:29,040 --> 00:22:31,400 Speaker 1: are concerned about this. And you really see a kind 409 00:22:31,400 --> 00:22:33,680 Speaker 1: of for the first time, h tech companies and the 410 00:22:33,680 --> 00:22:37,560 Speaker 1: Trump administration really being in lockstep on an issue. Um 411 00:22:37,720 --> 00:22:40,160 Speaker 1: what could happen from this? Uh? The administration is looking 412 00:22:40,200 --> 00:22:43,280 Speaker 1: at some sort of retaliatory and measure against France to 413 00:22:43,320 --> 00:22:45,280 Speaker 1: sort of set a precedent of look, don't go after 414 00:22:45,640 --> 00:22:49,160 Speaker 1: our tech companies to raise revenue for your country. Uh. 415 00:22:49,280 --> 00:22:51,600 Speaker 1: Tech companies concerned that they could be taxed not only 416 00:22:51,680 --> 00:22:53,880 Speaker 1: from France, but that other countries could follow suit Spain, 417 00:22:54,000 --> 00:22:56,600 Speaker 1: New Zealand for example, and they could be suddenly hit 418 00:22:56,640 --> 00:22:59,399 Speaker 1: from for little taxes from from countries all over the world. 419 00:22:59,600 --> 00:23:02,760 Speaker 1: And so I'm calling tech versus Tannin's because one of 420 00:23:02,800 --> 00:23:05,440 Speaker 1: the things is wine that Trump has threatened to tax 421 00:23:06,720 --> 00:23:09,680 Speaker 1: of all wine coming from France and Europe. But in 422 00:23:09,920 --> 00:23:13,359 Speaker 1: all reality, like, what could we actually do to retaliate? 423 00:23:14,520 --> 00:23:16,680 Speaker 1: So there's a couple of different things. One would be tariffs, 424 00:23:16,680 --> 00:23:18,440 Speaker 1: and it could be on French wine or or other 425 00:23:18,480 --> 00:23:21,080 Speaker 1: sorts of French products. Know, the percent tariff on wine 426 00:23:21,119 --> 00:23:24,040 Speaker 1: would be uh, you know, that would be a goold measure, 427 00:23:24,480 --> 00:23:26,639 Speaker 1: but there's lots of you know, either smaller tariffs are 428 00:23:26,680 --> 00:23:29,679 Speaker 1: targeting a broad base of French exports. The other thing 429 00:23:29,720 --> 00:23:31,760 Speaker 1: is there is a section in the tax code that 430 00:23:31,840 --> 00:23:35,840 Speaker 1: actually would allow the US government to basically double the 431 00:23:37,080 --> 00:23:40,800 Speaker 1: tax on French citizens and French companies operating in the US. 432 00:23:40,880 --> 00:23:43,160 Speaker 1: So there's a several different things that are legal within 433 00:23:43,200 --> 00:23:46,040 Speaker 1: the scope of the possible that that the U s 434 00:23:46,040 --> 00:23:48,000 Speaker 1: could do to try to get friends France to back 435 00:23:48,040 --> 00:23:52,320 Speaker 1: down from this. So, Laura, how important or how much 436 00:23:52,359 --> 00:23:54,800 Speaker 1: of a financial risk or is this tax to some 437 00:23:54,840 --> 00:23:58,000 Speaker 1: of these big tech companies. So we haven't heard any 438 00:23:58,040 --> 00:24:01,360 Speaker 1: sort of specific numbers yet they're saying will cost millions 439 00:24:01,400 --> 00:24:05,760 Speaker 1: to comply. A representative from Amazon said that their profit 440 00:24:05,800 --> 00:24:07,960 Speaker 1: margins are usually less than three percent, so this three 441 00:24:07,960 --> 00:24:10,240 Speaker 1: percent tax from France would wipe out some of their 442 00:24:10,280 --> 00:24:14,120 Speaker 1: profit margins on those transactions. So it's at least kind 443 00:24:14,119 --> 00:24:17,040 Speaker 1: of on a an anecdotally, it would be both expensive 444 00:24:17,080 --> 00:24:19,320 Speaker 1: to to be able to track all this to comply 445 00:24:19,359 --> 00:24:21,080 Speaker 1: with the tax as well as it could wipe out 446 00:24:21,320 --> 00:24:24,880 Speaker 1: um to profits, profitability, or result in higher prices for consumers. 447 00:24:24,960 --> 00:24:26,800 Speaker 1: So play this out for me. So tech goes to 448 00:24:26,880 --> 00:24:29,120 Speaker 1: the d C. They're like, we hate this, this is bad. 449 00:24:29,280 --> 00:24:31,160 Speaker 1: Everyone in the US is like, totally, we don't want 450 00:24:31,160 --> 00:24:34,879 Speaker 1: France attack at taxes. This is terrible. Then what happens. 451 00:24:34,920 --> 00:24:36,919 Speaker 1: So what the US is trying to do is to 452 00:24:36,960 --> 00:24:40,280 Speaker 1: get France to back away from this tax and focus 453 00:24:40,359 --> 00:24:43,119 Speaker 1: more on this big global conversation that's happening with a 454 00:24:43,200 --> 00:24:46,800 Speaker 1: hundred thirty companies led by you know, G seven, G 455 00:24:46,960 --> 00:24:50,159 Speaker 1: twenty to come up with some way to tax Uh. 456 00:24:50,440 --> 00:24:53,800 Speaker 1: Basically issue is that companies no longer you know, makings 457 00:24:53,800 --> 00:24:56,480 Speaker 1: and earned profits in one country. With the digital economy, 458 00:24:56,480 --> 00:24:58,520 Speaker 1: things cross borders all the time and it's really hard 459 00:24:58,600 --> 00:25:02,159 Speaker 1: to to say which come which country can tax which profits. 460 00:25:02,240 --> 00:25:06,159 Speaker 1: So they're trying to have this big multilateral discussion UM 461 00:25:06,200 --> 00:25:08,040 Speaker 1: to come up with some rules that everyone in the 462 00:25:08,040 --> 00:25:10,760 Speaker 1: world basically can agree on. That's what the US wants, 463 00:25:10,760 --> 00:25:12,879 Speaker 1: and that's what they're trying to urge France and others 464 00:25:12,880 --> 00:25:15,440 Speaker 1: who want to go off on their own to do. So, Laura, 465 00:25:15,520 --> 00:25:16,879 Speaker 1: what just give us a sense a little bit of 466 00:25:17,040 --> 00:25:20,760 Speaker 1: backstory here. What was France really thinking here with this tax? 467 00:25:20,880 --> 00:25:24,480 Speaker 1: Was it simply a money grab for them? Well personally 468 00:25:24,520 --> 00:25:27,440 Speaker 1: that and and there's a lot of anger in Europe 469 00:25:27,480 --> 00:25:31,280 Speaker 1: at American at American tech companies who they feel are 470 00:25:31,320 --> 00:25:35,560 Speaker 1: aren't paying taxes, that they are using um tax savants 471 00:25:35,600 --> 00:25:38,280 Speaker 1: to to avoid paying what they should be owe. And 472 00:25:38,320 --> 00:25:40,199 Speaker 1: they said, look, you know, if if the you know, 473 00:25:40,320 --> 00:25:42,040 Speaker 1: the U. S. Government isn't gonna address this, if there 474 00:25:42,080 --> 00:25:44,119 Speaker 1: isn't some sort of global consensus, we just want to 475 00:25:44,119 --> 00:25:46,320 Speaker 1: move quickly and make sure that we're uh, you know, 476 00:25:46,359 --> 00:25:48,720 Speaker 1: getting a portion, you know, and being a first mover 477 00:25:48,800 --> 00:25:50,480 Speaker 1: on this, they're able to grab a bigger piece of 478 00:25:50,520 --> 00:25:52,240 Speaker 1: the pie than they would have if they you know, 479 00:25:52,320 --> 00:25:55,240 Speaker 1: did this in coordination with all the other countries. So 480 00:25:55,320 --> 00:25:58,080 Speaker 1: what's the counter to that? I mean, that sounds somewhat reasonable. 481 00:25:59,320 --> 00:26:02,200 Speaker 1: It does, though, mean then the then the answer is, uh, 482 00:26:02,320 --> 00:26:05,000 Speaker 1: you know, especially for France where US is a close ally, 483 00:26:05,160 --> 00:26:06,960 Speaker 1: you know, what are the negotiations like if you know 484 00:26:07,000 --> 00:26:09,760 Speaker 1: there are extremes tariffs, you know, how long can they 485 00:26:09,760 --> 00:26:12,320 Speaker 1: can they withstand those? Or you know, if if every 486 00:26:12,359 --> 00:26:14,560 Speaker 1: other country has agreed to this other set of principles, 487 00:26:14,760 --> 00:26:17,280 Speaker 1: you know, could that be something that that France uh 488 00:26:17,400 --> 00:26:21,520 Speaker 1: signs onto. This is really uh France kind of took 489 00:26:21,520 --> 00:26:25,160 Speaker 1: a bold step kind of, I think, with the other countries, 490 00:26:25,200 --> 00:26:27,000 Speaker 1: assuming that they would be willing to movee back down 491 00:26:27,000 --> 00:26:29,120 Speaker 1: on this if there was a larger consensus on something 492 00:26:29,160 --> 00:26:31,760 Speaker 1: that would be agreeable. Laura Davison, thank you so much 493 00:26:31,800 --> 00:26:34,880 Speaker 1: for joining us. Lars Congressional tax reporter for Bloomberg News, 494 00:26:34,960 --> 00:26:37,480 Speaker 1: joining us on the phone from Washington, d C. Thanks 495 00:26:37,520 --> 00:26:39,679 Speaker 1: for listening to the Bloomberg P and L podcast. You 496 00:26:39,720 --> 00:26:42,359 Speaker 1: can subscribe and listen to interviews at Apple Podcasts or 497 00:26:42,400 --> 00:26:45,399 Speaker 1: whatever podcast platform you prefer. M Paul Sweeney, I'm on 498 00:26:45,440 --> 00:26:48,080 Speaker 1: Twitter at pt Sweeney. I'm Lisa Bramoy. It's I'm on 499 00:26:48,119 --> 00:26:51,000 Speaker 1: Twitter at Lisa Bramoy. It's one before the podcast. You 500 00:26:51,000 --> 00:26:53,480 Speaker 1: can always catch us worldwide. I'm Bloomberg Radio.