1 00:00:00,040 --> 00:00:02,640 Speaker 1: Who you put your trust in matters. Investors have put 2 00:00:02,680 --> 00:00:07,040 Speaker 1: their trust and independent registered investment advisors to the two 3 00:00:07,040 --> 00:00:10,680 Speaker 1: and four trillion dollars. Why learn more at find your 4 00:00:10,760 --> 00:00:26,360 Speaker 1: Independent Advisor dot com. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:26,760 --> 00:00:30,480 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:30,520 --> 00:00:35,560 Speaker 1: insight from the best in economics, finance, investment and international relations. 7 00:00:35,960 --> 00:00:40,559 Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot com, and 8 00:00:40,640 --> 00:00:48,320 Speaker 1: of course on the Bloomberg Brian Belski with us with 9 00:00:48,400 --> 00:00:50,760 Speaker 1: Bemo Capital Markets that we're thrilled toy at the time 10 00:00:51,120 --> 00:00:53,080 Speaker 1: of Ian Bremer of you raise your group with us 11 00:00:53,080 --> 00:00:55,720 Speaker 1: this morning. Ian, we could talk for five hours. What 12 00:00:55,800 --> 00:00:58,000 Speaker 1: does italy mean? What does a reference to mean? What 13 00:00:58,000 --> 00:01:00,680 Speaker 1: does it mean for Chancellor Miracle? Well, look at another 14 00:01:00,760 --> 00:01:03,600 Speaker 1: self imposed end goal as we saw from former Prime 15 00:01:03,600 --> 00:01:08,440 Speaker 1: Minister Cameron in the UK. Rensey comes in, feels pretty strong, 16 00:01:08,880 --> 00:01:11,160 Speaker 1: uh and and thinks that you know, he's the guy 17 00:01:11,200 --> 00:01:14,080 Speaker 1: that can drive a reformist wave, is decisively repudiated and 18 00:01:14,120 --> 00:01:18,080 Speaker 1: effectively hoisted on by ego a little bit, you know, 19 00:01:18,160 --> 00:01:20,679 Speaker 1: I mean, I think Renzys actually did a reasonably effective 20 00:01:20,760 --> 00:01:22,280 Speaker 1: job and it was something there were a bunch of 21 00:01:22,280 --> 00:01:25,520 Speaker 1: reforms that Italy frankly needed. Um, it would have helped 22 00:01:25,560 --> 00:01:27,960 Speaker 1: the economy. But now at least kind of this is 23 00:01:28,000 --> 00:01:30,080 Speaker 1: back to the status quo anti. This is not in 24 00:01:30,120 --> 00:01:35,360 Speaker 1: that regard we're used to. If she's the last adults 25 00:01:35,360 --> 00:01:38,600 Speaker 1: and Madame Leguard was at Bloomberg on Friday, she made 26 00:01:38,680 --> 00:01:41,760 Speaker 1: very clear it's a new Europe. The last one standing 27 00:01:41,880 --> 00:01:45,080 Speaker 1: is Miracle. What does this mean for Angelo? Miracle? She 28 00:01:45,240 --> 00:01:48,840 Speaker 1: drives Europe to two thousand seventeen. Look, I mean, there's 29 00:01:48,920 --> 00:01:53,200 Speaker 1: no more force other than Mercle for stronger, tighter integration 30 00:01:53,480 --> 00:01:56,800 Speaker 1: of the EU as a whole. Uh. And obviously the 31 00:01:56,840 --> 00:02:00,520 Speaker 1: Transatlantic relationship, which is the most important in sort of 32 00:02:00,600 --> 00:02:04,640 Speaker 1: underpinning US led globalization, has been hitted. It's been decisively 33 00:02:04,720 --> 00:02:08,280 Speaker 1: repudiated both by everything in Europe over the last year, 34 00:02:08,639 --> 00:02:10,720 Speaker 1: UM as well as what the elections we just had 35 00:02:10,720 --> 00:02:14,560 Speaker 1: here three weeks ago. But Merco, Look, it looks certainly, 36 00:02:14,680 --> 00:02:18,519 Speaker 1: very very likely that Merco gets another term as chancellor 37 00:02:18,600 --> 00:02:22,000 Speaker 1: in Germany. Problem is her ability to lead is very 38 00:02:22,040 --> 00:02:26,400 Speaker 1: conductor Bremer. Brian Belski here's expert on equity markets. He's 39 00:02:26,440 --> 00:02:29,360 Speaker 1: been a confirmed Bowl. He's been right. We have a 40 00:02:29,360 --> 00:02:33,040 Speaker 1: new reflation from Mr Trump and others. Will that widen 41 00:02:33,120 --> 00:02:37,440 Speaker 1: The gap you study in international relations and political economics 42 00:02:37,520 --> 00:02:41,000 Speaker 1: is the Brian Belski has of a bull market gonna 43 00:02:41,040 --> 00:02:44,240 Speaker 1: be ever farther apart by the working class people of 44 00:02:44,360 --> 00:02:47,680 Speaker 1: Francie Lacuisse Genera. There's there's no reason to believe that 45 00:02:47,760 --> 00:02:51,840 Speaker 1: populism is losing momentum in Europe right now. It's constrained 46 00:02:51,880 --> 00:02:55,600 Speaker 1: significantly in Germany, the Austria when it was already the 47 00:02:55,639 --> 00:02:58,400 Speaker 1: two establishment parties had already been taken out of the map. 48 00:02:58,720 --> 00:03:01,720 Speaker 1: But if you ask me what driving it, it's identity 49 00:03:01,760 --> 00:03:05,200 Speaker 1: politics and concerns about immigrants and refugees, and it's the 50 00:03:05,200 --> 00:03:09,679 Speaker 1: hauling out of the class away beautifully, your corporate officers 51 00:03:09,720 --> 00:03:13,240 Speaker 1: that drive your world, do they care about Dr Bremer's world? 52 00:03:13,280 --> 00:03:14,520 Speaker 1: Sure they do. And I think one of the most 53 00:03:14,560 --> 00:03:17,680 Speaker 1: important things that that Dr Bremer talked about is is 54 00:03:17,720 --> 00:03:20,720 Speaker 1: how Merkel is going to tighten up the European Union. 55 00:03:20,760 --> 00:03:23,880 Speaker 1: And that probably needs to happen because what we need 56 00:03:23,919 --> 00:03:27,840 Speaker 1: to see is massive structural, fundamental reform in Europe. And 57 00:03:27,880 --> 00:03:31,120 Speaker 1: if she's able to tighten up the constraints of with 58 00:03:31,160 --> 00:03:33,160 Speaker 1: respect of what's happening in Europe, there's a better chance 59 00:03:33,200 --> 00:03:36,320 Speaker 1: to see fundamental reform because all we've seen to date 60 00:03:36,520 --> 00:03:38,880 Speaker 1: is really monetary policy. We need to see these companies 61 00:03:38,880 --> 00:03:41,960 Speaker 1: start to cut costs and structural reform themselves with respect 62 00:03:41,960 --> 00:03:44,240 Speaker 1: of the operative performance. I got a total of France, 63 00:03:44,280 --> 00:03:47,000 Speaker 1: a big oil company of five point six percent dividend. 64 00:03:47,520 --> 00:03:51,360 Speaker 1: Is Europe the ultimate straw hats and winner pick for you, 65 00:03:51,600 --> 00:03:54,400 Speaker 1: although it's never winter in Rome, France, No, because you know, 66 00:03:54,440 --> 00:03:57,200 Speaker 1: at the end of the day, to facilitate that dividend, 67 00:03:57,240 --> 00:03:59,080 Speaker 1: tom we need to be able to see cash flow. 68 00:03:59,120 --> 00:04:00,800 Speaker 1: And I'm not really events that a lot of these 69 00:04:00,800 --> 00:04:03,440 Speaker 1: European companies can continue on the cash flow front to 70 00:04:03,520 --> 00:04:06,040 Speaker 1: pay those types of dividends on the high end. But 71 00:04:06,320 --> 00:04:07,800 Speaker 1: at the end of the day, cash flow is also 72 00:04:07,880 --> 00:04:09,600 Speaker 1: being used to grow when we need to be able 73 00:04:09,640 --> 00:04:12,440 Speaker 1: to grow and expand the cash flow. And given the 74 00:04:12,480 --> 00:04:16,440 Speaker 1: constraints with respective business and regular increasing regulation, we think 75 00:04:16,480 --> 00:04:18,320 Speaker 1: over there it's going to be very difficult for a 76 00:04:18,360 --> 00:04:21,480 Speaker 1: lot of these companies to continue to grow period he 77 00:04:21,600 --> 00:04:23,599 Speaker 1: and if you look at France and do you think 78 00:04:23,600 --> 00:04:27,800 Speaker 1: the citizens of both these countries are pro euro. Uh 79 00:04:27,839 --> 00:04:29,920 Speaker 1: you know, I mean, I think in both France and 80 00:04:29,960 --> 00:04:32,920 Speaker 1: Italy right now you have populations that are moderately pro 81 00:04:33,040 --> 00:04:37,719 Speaker 1: euro and EU, but those numbers have been going down consistently. Um. 82 00:04:37,760 --> 00:04:40,440 Speaker 1: It's it's hard. There's there's little to be behind, right. 83 00:04:40,480 --> 00:04:44,760 Speaker 1: You see that Europe as a construct right now is failing. Um. 84 00:04:44,920 --> 00:04:47,359 Speaker 1: The reason that you put it together wasn't just to 85 00:04:47,400 --> 00:04:50,040 Speaker 1: have a common currency, it was actually have common values. 86 00:04:50,240 --> 00:04:53,600 Speaker 1: It was to bring these countries together, create a supernational identity, 87 00:04:53,760 --> 00:04:57,000 Speaker 1: and to create some level of loyalty for governance that 88 00:04:57,120 --> 00:05:00,960 Speaker 1: was above their individual countries. That that's obvious lead breaking down. 89 00:05:01,279 --> 00:05:05,760 Speaker 1: You saw that with the surprise when from Fillon over 90 00:05:05,800 --> 00:05:09,960 Speaker 1: Sarcose and Jupe in the Republican primaries. Um. And you 91 00:05:10,040 --> 00:05:14,360 Speaker 1: see it with Renzy incapable of of driving some level 92 00:05:14,400 --> 00:05:18,400 Speaker 1: of strong leadership. Brexit is still absolutely overwhelmingly the big 93 00:05:18,440 --> 00:05:22,159 Speaker 1: story here. Everything else's small change, in part because of 94 00:05:22,160 --> 00:05:23,680 Speaker 1: how big it has for them to leave, but also 95 00:05:23,760 --> 00:05:26,279 Speaker 1: because how much distraction is going to take from every 96 00:05:26,279 --> 00:05:30,600 Speaker 1: other political story for years now. The ability to drive 97 00:05:30,839 --> 00:05:35,080 Speaker 1: proactive political governance in Europe that would make the place 98 00:05:35,160 --> 00:05:37,880 Speaker 1: look like it's run better, that's so far from the 99 00:05:37,880 --> 00:05:41,080 Speaker 1: agenda today. Right, but you can we really say with 100 00:05:41,120 --> 00:05:44,159 Speaker 1: certainty that actually this referendum, so this huge no vote 101 00:05:45,200 --> 00:05:48,720 Speaker 1: is an anti establishment vote after all matter Renci has 102 00:05:48,720 --> 00:05:52,080 Speaker 1: been in power sure for two years, but he's hardly establishment. 103 00:05:52,200 --> 00:05:56,640 Speaker 1: Was it not a confusing actually a constitutional change and 104 00:05:56,800 --> 00:05:59,159 Speaker 1: it just meant that the government was focusing on the 105 00:05:59,160 --> 00:06:01,960 Speaker 1: wrong type of form. I think it's an anti a 106 00:06:02,120 --> 00:06:05,320 Speaker 1: leader that got over his skis right. I mean, he 107 00:06:05,440 --> 00:06:09,200 Speaker 1: originally made this not just a referendum on politics and 108 00:06:09,240 --> 00:06:12,560 Speaker 1: sweeping political reform that was you know, I mean they 109 00:06:12,560 --> 00:06:16,480 Speaker 1: were they were offering lessons on actually unpacking a reform 110 00:06:16,480 --> 00:06:19,200 Speaker 1: for think was a d forty five euros an hour. 111 00:06:19,800 --> 00:06:22,280 Speaker 1: People didn't understand it, but they did know that this 112 00:06:22,360 --> 00:06:26,479 Speaker 1: was something Rerenzi strongly wanted. Um and his popularity has 113 00:06:26,600 --> 00:06:29,799 Speaker 1: slipped to horrible levels over the course of the past 114 00:06:29,800 --> 00:06:31,599 Speaker 1: few months. The fact that he said this is no 115 00:06:31,680 --> 00:06:33,680 Speaker 1: longer about me, well, it sort of is about me 116 00:06:34,000 --> 00:06:38,600 Speaker 1: back and forth. Ultimately his ability to get what he 117 00:06:38,920 --> 00:06:42,520 Speaker 1: wanted in people. People have found all over the developed 118 00:06:42,560 --> 00:06:44,919 Speaker 1: world that they don't vote for policies. They vote for 119 00:06:45,000 --> 00:06:47,159 Speaker 1: leaders and then to support the policies that the leaders 120 00:06:47,160 --> 00:06:50,840 Speaker 1: that they that they like, actually give them. That's precisely 121 00:06:50,880 --> 00:06:53,800 Speaker 1: how Renzy went wrong here. He didn't have it, couldn't 122 00:06:53,800 --> 00:06:55,919 Speaker 1: maintain the support of the Italian people, and he didn't 123 00:06:55,960 --> 00:07:00,000 Speaker 1: lose just small lost sixty with se vote. That's that's 124 00:07:00,000 --> 00:07:16,480 Speaker 1: a problem. Without further ado, Olivier Blanchard, of course of 125 00:07:16,560 --> 00:07:20,600 Speaker 1: the Massachusetts Institute of Technology in Public Service at the 126 00:07:20,640 --> 00:07:24,680 Speaker 1: International Monetary Fund and now with Dr Posen at the 127 00:07:24,880 --> 00:07:29,920 Speaker 1: Peterson Institute UH Professor Blonchart, it has been too long. 128 00:07:30,120 --> 00:07:34,440 Speaker 1: I go back a number of years to your important effort. 129 00:07:35,000 --> 00:07:40,160 Speaker 1: What have we learned macro economic policy after the crisis? Folks? 130 00:07:40,160 --> 00:07:44,080 Speaker 1: This is a beautiful effort off of historic meetings at 131 00:07:44,120 --> 00:07:47,560 Speaker 1: the i m F, including the Laureate George Akerloft, the Lauria, 132 00:07:47,600 --> 00:07:53,520 Speaker 1: George Stiglets, Professor Blonchart, and others. Buried in your monograph 133 00:07:53,600 --> 00:07:56,320 Speaker 1: or your book, I should say, Professor, is a chapter 134 00:07:56,400 --> 00:08:00,400 Speaker 1: by Nora Rabini which is simply titled Fiscal pol See 135 00:08:00,720 --> 00:08:05,120 Speaker 1: that's what you've been writing on help Mr Trump and others. 136 00:08:05,440 --> 00:08:11,680 Speaker 1: What will be the new fiscal policy of the United States? Well, 137 00:08:11,720 --> 00:08:14,000 Speaker 1: you're asking what it should be or what it will be? 138 00:08:14,040 --> 00:08:21,520 Speaker 1: Which either so should they I think there has been 139 00:08:21,560 --> 00:08:25,040 Speaker 1: a shift over the last few years in terms of 140 00:08:25,080 --> 00:08:27,680 Speaker 1: thinking about fiscal policy, which is my tre policy has 141 00:08:27,680 --> 00:08:31,480 Speaker 1: been used a lot and and usefully, but it's coming 142 00:08:31,520 --> 00:08:34,080 Speaker 1: to to an end in terms of how much it 143 00:08:34,160 --> 00:08:36,480 Speaker 1: delivers in terms of the band. So there has been 144 00:08:36,480 --> 00:08:39,520 Speaker 1: a shift back to fiscal policy and avelnment in which 145 00:08:39,559 --> 00:08:43,559 Speaker 1: debt is indeed incredibly cheap to issue and you can 146 00:08:43,640 --> 00:08:46,920 Speaker 1: basically have large deficits and your debt will increase very slowly. 147 00:08:47,480 --> 00:08:51,160 Speaker 1: So in that context, I mean general in favor of 148 00:08:51,240 --> 00:08:56,319 Speaker 1: more aggressive fiscal policy, especially in countries where they still 149 00:08:56,400 --> 00:08:59,840 Speaker 1: very high unemployment and an output gap. They're basically you 150 00:09:00,040 --> 00:09:02,679 Speaker 1: can issue that the interest rate is less than the 151 00:09:02,760 --> 00:09:06,280 Speaker 1: growth rate. Conceptually you don't ever have to pay back, 152 00:09:06,320 --> 00:09:09,280 Speaker 1: but that it increases the men Today you can use 153 00:09:09,320 --> 00:09:12,040 Speaker 1: it for public investment. It's great. The issue is in 154 00:09:12,120 --> 00:09:15,800 Speaker 1: the US we're not there were full employment, So that 155 00:09:16,080 --> 00:09:19,680 Speaker 1: is there still an argument for larger fiscal deficits. I 156 00:09:19,720 --> 00:09:22,120 Speaker 1: think there's a there are two arguments. The first one 157 00:09:22,240 --> 00:09:25,760 Speaker 1: is for public investment, and this has been discussed a lot. 158 00:09:26,440 --> 00:09:29,000 Speaker 1: Uh you know what has suffered in the crisis because 159 00:09:29,040 --> 00:09:32,079 Speaker 1: it's the easiest thing to cut has been public investment, 160 00:09:32,160 --> 00:09:35,560 Speaker 1: so there's a lot of maintenance work to do. Maintenance 161 00:09:35,640 --> 00:09:37,920 Speaker 1: is something that only the state can do. It doesn't 162 00:09:38,000 --> 00:09:41,360 Speaker 1: year dollars, so it has to be financed by taxes 163 00:09:41,559 --> 00:09:45,319 Speaker 1: or by that. That's one. The other is this idea 164 00:09:45,360 --> 00:09:47,920 Speaker 1: that maybe, given that the economy has been running at 165 00:09:47,960 --> 00:09:50,840 Speaker 1: low speed for a while, running it at high speed 166 00:09:51,280 --> 00:09:53,800 Speaker 1: for a while as well might be useful. Some of 167 00:09:53,840 --> 00:09:56,400 Speaker 1: the people who have just given up may come back. 168 00:09:56,480 --> 00:09:59,960 Speaker 1: You know, labor force participation has dropped a lot. Maybe 169 00:10:00,160 --> 00:10:02,640 Speaker 1: we can get it up. So there's some argument for 170 00:10:03,040 --> 00:10:06,880 Speaker 1: pushing the machine a bit, having goth a bit above potential, 171 00:10:07,480 --> 00:10:10,520 Speaker 1: and then seeing whether it gives good results. There's a 172 00:10:10,600 --> 00:10:12,960 Speaker 1: denter that it leads to a bit more inflation. But 173 00:10:13,280 --> 00:10:16,560 Speaker 1: on net so from a normative point of view, yes, 174 00:10:16,600 --> 00:10:22,400 Speaker 1: some fiscal deficit maybe one more aimed that public investment descriptive. 175 00:10:22,920 --> 00:10:26,400 Speaker 1: God knows what's going to happen, and even God, even 176 00:10:26,480 --> 00:10:31,040 Speaker 1: God might be confused. Sorry, we're going with that all day. 177 00:10:31,120 --> 00:10:34,960 Speaker 1: That's the surveillance for Exclusive of the Morning from Olivia Blanchard. 178 00:10:35,160 --> 00:10:38,480 Speaker 1: God knows what will happen. Dr Plancharder. We were talking 179 00:10:38,480 --> 00:10:40,959 Speaker 1: with Carl Weinberg of High Frequency Economics at the top 180 00:10:41,000 --> 00:10:42,880 Speaker 1: of the show, and he wondered why we haven't seen 181 00:10:42,920 --> 00:10:46,200 Speaker 1: more refinancing of government debt given where we've seen interest 182 00:10:46,280 --> 00:10:47,720 Speaker 1: rates set for some time. Why do you think that 183 00:10:47,840 --> 00:10:52,640 Speaker 1: is the case? You mean we financing towards longer matuit. Yes, exactly, 184 00:10:53,400 --> 00:10:55,880 Speaker 1: I think it's I think it's coming, and I think 185 00:10:55,880 --> 00:10:58,960 Speaker 1: it's actually the time to do it. Uh. It would 186 00:10:58,960 --> 00:11:01,440 Speaker 1: put some question on on great which goes in the 187 00:11:01,440 --> 00:11:03,920 Speaker 1: opposite direction of what the Fed has been trying to do. 188 00:11:04,240 --> 00:11:06,440 Speaker 1: But from a treasury point of view, it clearly makes 189 00:11:06,440 --> 00:11:09,440 Speaker 1: sense to increase the matuity of a debt lock in 190 00:11:09,480 --> 00:11:12,640 Speaker 1: the lower rates before they increase. Yes, there has been 191 00:11:12,640 --> 00:11:16,360 Speaker 1: this conversation among central bankers, a call to have more 192 00:11:16,400 --> 00:11:20,000 Speaker 1: fiscal policy. When they look at what's happening in Washington 193 00:11:20,080 --> 00:11:23,280 Speaker 1: or what will be happening in Washington after January, presumably 194 00:11:24,200 --> 00:11:26,680 Speaker 1: what would they like to see? I mean, if they're 195 00:11:26,679 --> 00:11:29,040 Speaker 1: calling for fiscal policy and this is not it, what 196 00:11:29,040 --> 00:11:30,960 Speaker 1: what is the fiscal policy they would like to see? 197 00:11:31,920 --> 00:11:34,040 Speaker 1: Who are you talking when you say they, let's say, 198 00:11:34,080 --> 00:11:36,559 Speaker 1: let's say central bankers outside of the US. So, so 199 00:11:36,640 --> 00:11:40,360 Speaker 1: let's say they would they want to see responsible fiscal policy. 200 00:11:40,480 --> 00:11:44,760 Speaker 1: Responsible physical policy for me in Europe is an increase 201 00:11:44,800 --> 00:11:50,040 Speaker 1: in deficits aimed at things which are definitely useful, for example, 202 00:11:50,120 --> 00:11:52,920 Speaker 1: the financing of structural reforms. These can be very costly 203 00:11:53,000 --> 00:11:55,560 Speaker 1: to do. You may want to bribe some of the 204 00:11:55,600 --> 00:11:57,760 Speaker 1: people who lose in the reform in order to get 205 00:11:57,760 --> 00:12:01,680 Speaker 1: the reform through. Public investment is important they want to see. 206 00:12:01,679 --> 00:12:04,080 Speaker 1: I think of fiscal expansion, but aimed at the right things, 207 00:12:04,120 --> 00:12:06,360 Speaker 1: not just aimed at an increasing the size of a 208 00:12:06,400 --> 00:12:10,320 Speaker 1: government for example. Uh So, I think that's what they 209 00:12:10,320 --> 00:12:12,400 Speaker 1: want to do, but what they want to see there 210 00:12:12,720 --> 00:12:19,080 Speaker 1: in the US, I think that most people Democrats and 211 00:12:19,160 --> 00:12:22,079 Speaker 1: Republicans agreeve that there's a need for more public investment. 212 00:12:22,480 --> 00:12:26,640 Speaker 1: That should be the priority. Within this is the linkage 213 00:12:26,840 --> 00:12:31,400 Speaker 1: of fiscal policy to monetary policy. What strikes me, Professor, 214 00:12:32,000 --> 00:12:35,520 Speaker 1: is we spend our time on Bloomberg surveillance, in the 215 00:12:35,559 --> 00:12:39,800 Speaker 1: parlor game of central bank policy, in four point to 216 00:12:40,000 --> 00:12:43,880 Speaker 1: five of our time on god knows what a fiscal policy. 217 00:12:44,400 --> 00:12:49,240 Speaker 1: How will Cherry Yellen respond to any fiscal policy that 218 00:12:49,320 --> 00:12:53,920 Speaker 1: the Republicans do in Washington? How do you adapt to that? Well? 219 00:12:53,920 --> 00:12:55,840 Speaker 1: I think about two posts to a question. I think 220 00:12:55,880 --> 00:12:59,240 Speaker 1: the first one is indeed, I'm amazed, but understand why 221 00:13:00,000 --> 00:13:02,440 Speaker 1: the amount of time spent on looking at the minute 222 00:13:02,520 --> 00:13:06,400 Speaker 1: details of my Tree policy, where fiscal policy is does 223 00:13:06,440 --> 00:13:09,320 Speaker 1: not looked at, and how much work there has been 224 00:13:09,800 --> 00:13:14,920 Speaker 1: in improving extending my Trey policy with incredibly interesting discussions, 225 00:13:15,160 --> 00:13:17,679 Speaker 1: where at the same time on fiscal policy there has 226 00:13:17,720 --> 00:13:20,760 Speaker 1: been nearly no progress in terms of thinking about how 227 00:13:20,760 --> 00:13:23,520 Speaker 1: you do fisical policy in a world of flow growth, 228 00:13:23,920 --> 00:13:26,560 Speaker 1: low interest rates. I mean, something I've pushed for a 229 00:13:26,559 --> 00:13:30,319 Speaker 1: while is the idea of automatic stabilizers. The automatic stabilizers 230 00:13:30,360 --> 00:13:33,120 Speaker 1: we have are just the result of decisions which had 231 00:13:33,160 --> 00:13:37,000 Speaker 1: nothing to do with stabilization. There are in some countries 232 00:13:37,040 --> 00:13:39,800 Speaker 1: fairly strong in some countries, week there has been zero 233 00:13:39,880 --> 00:13:42,560 Speaker 1: discussion as to how to improve them. At the same 234 00:13:42,600 --> 00:13:45,320 Speaker 1: time we're thinking about the details of the Quey measure. 235 00:13:45,720 --> 00:13:49,000 Speaker 1: So there's an enormous asymmetry there, and I think it's 236 00:13:49,000 --> 00:13:53,360 Speaker 1: a major major flow in policy making. On what Janet 237 00:13:53,640 --> 00:13:56,520 Speaker 1: and should do. I mean, she should basically just keep 238 00:13:57,000 --> 00:14:01,960 Speaker 1: you know, her keep keep true to her mandate, which is, 239 00:14:02,360 --> 00:14:04,959 Speaker 1: if it turns out that the fiscal deficits are much 240 00:14:05,040 --> 00:14:09,560 Speaker 1: larger than reasonable, and they start putting pressure on inflation, 241 00:14:09,920 --> 00:14:12,000 Speaker 1: then she should increase in twest rates. It should not 242 00:14:12,040 --> 00:14:14,320 Speaker 1: be a war, should be the normal reaction of a 243 00:14:14,400 --> 00:14:17,280 Speaker 1: FED to an environment in which the men may be 244 00:14:17,400 --> 00:14:20,560 Speaker 1: too strong. If the fiscal deficits are the right size, 245 00:14:20,640 --> 00:14:23,040 Speaker 1: they don't put too much pressure, she may be able 246 00:14:23,040 --> 00:14:26,680 Speaker 1: to accommodate them. But clearly, if if things go wrong 247 00:14:26,760 --> 00:14:30,520 Speaker 1: in Congress and the deficits are very large, then the 248 00:14:30,520 --> 00:14:33,480 Speaker 1: FED is where it stops. And she has to not 249 00:14:33,640 --> 00:14:37,440 Speaker 1: because she's against the Trump administration, but because her mondate 250 00:14:37,560 --> 00:14:40,680 Speaker 1: is to limit the effect on inflation. She has to 251 00:14:40,760 --> 00:14:43,080 Speaker 1: increase interest rates if say war. And I'll use that 252 00:14:43,080 --> 00:14:45,080 Speaker 1: as a segway to talk about Donald Trump's tweets from 253 00:14:45,120 --> 00:14:48,160 Speaker 1: this weekend about China being a currency manipulator, and I 254 00:14:48,160 --> 00:14:50,960 Speaker 1: wonder about one of what your your thoughts are on that. 255 00:14:51,000 --> 00:14:53,840 Speaker 1: What seems like an opening salvo there from from Donald Trump. 256 00:14:54,760 --> 00:14:57,760 Speaker 1: Here we have we have labeling a country occurrency manipulator 257 00:14:57,880 --> 00:15:00,080 Speaker 1: or almost that via Twitter. What do you make of 258 00:15:00,120 --> 00:15:02,600 Speaker 1: what he's done here? And how potential damaging could that be? 259 00:15:03,640 --> 00:15:08,440 Speaker 1: You know, on all these statements and all these announcements, 260 00:15:08,480 --> 00:15:11,760 Speaker 1: the question is is it just words. Is it just 261 00:15:11,920 --> 00:15:16,400 Speaker 1: symbols or is it the beginning of a strategy. My 262 00:15:16,480 --> 00:15:19,240 Speaker 1: inclination is to think that the strategy is not in place, 263 00:15:19,280 --> 00:15:22,720 Speaker 1: and this is rather random. I think we're going to 264 00:15:22,760 --> 00:15:26,280 Speaker 1: see a lot of symbolic measures and declaring China occurrency 265 00:15:26,280 --> 00:15:28,720 Speaker 1: of manipulator, which does not make any sense in the 266 00:15:28,800 --> 00:15:33,480 Speaker 1: current context, is a symbolic measure. Accepting or taking the 267 00:15:33,560 --> 00:15:38,280 Speaker 1: phone call from the President of Taiwan is another symbolic measure. 268 00:15:38,960 --> 00:15:42,120 Speaker 1: Saving a thousand jobs somewhere is a symbolic measure of 269 00:15:42,120 --> 00:15:45,680 Speaker 1: the questions wherever we're going to go beyond that on China, 270 00:15:46,840 --> 00:15:50,640 Speaker 1: I would not play games. China can do things easily 271 00:15:51,120 --> 00:15:54,280 Speaker 1: which were cripple the US. And the example which has 272 00:15:54,280 --> 00:15:57,680 Speaker 1: been given the recent past is the iPhone and global 273 00:15:57,720 --> 00:16:01,440 Speaker 1: supply chains, which is that we have global supply chains, 274 00:16:02,240 --> 00:16:07,320 Speaker 1: trade wars nearly atomic wars. When you have global supply 275 00:16:07,400 --> 00:16:10,960 Speaker 1: chains and one other links is in your country, you 276 00:16:11,000 --> 00:16:14,240 Speaker 1: can basically stop the chain by stopping the link. So 277 00:16:14,360 --> 00:16:17,680 Speaker 1: by stopping one link in the iPhone chain, China can 278 00:16:17,720 --> 00:16:21,000 Speaker 1: stop the production of iPhones or less. I think in 279 00:16:21,080 --> 00:16:24,400 Speaker 1: the context of this, if you're going to go to 280 00:16:24,440 --> 00:16:27,720 Speaker 1: war or at least to battle, you have to understand 281 00:16:27,720 --> 00:16:30,320 Speaker 1: what the opponent can do. And David Girl, we would 282 00:16:30,320 --> 00:16:33,320 Speaker 1: be remiss if we did not speak to Professor Blanchard 283 00:16:33,800 --> 00:16:40,680 Speaker 1: of his France. Help me here, Professor Blanchard on populism 284 00:16:40,840 --> 00:16:44,920 Speaker 1: in France, How is it different than Italy or, for 285 00:16:45,000 --> 00:16:49,240 Speaker 1: that matter, the United States. I think it's different in 286 00:16:49,320 --> 00:16:52,920 Speaker 1: each in each country. In some countries it is immigration, 287 00:16:54,040 --> 00:16:57,840 Speaker 1: largely the Celian refugees in the case for example of Italy. 288 00:16:58,760 --> 00:17:01,040 Speaker 1: In France, I think it's a it's a different issue. 289 00:17:01,240 --> 00:17:04,240 Speaker 1: It's the feeling that the economy is not doing well, 290 00:17:04,640 --> 00:17:07,800 Speaker 1: and there's a poem of integration, not of the refugees, 291 00:17:08,040 --> 00:17:12,320 Speaker 1: but of people from North Africa who have gone the 292 00:17:12,359 --> 00:17:17,919 Speaker 1: second third generation generations from from North Africa, which are 293 00:17:17,960 --> 00:17:22,040 Speaker 1: not getting integrated. And I think that's the main source influence, 294 00:17:22,080 --> 00:17:24,399 Speaker 1: that's the main source of strength of the of the 295 00:17:24,480 --> 00:17:28,719 Speaker 1: extreme right. With the pleasure of hosting Madame Legarde here 296 00:17:28,800 --> 00:17:33,000 Speaker 1: last week at Bloomberg and she spoke about globalization, calls 297 00:17:33,040 --> 00:17:37,639 Speaker 1: for deglobalization and need for reevaluating trade frameworks, and I 298 00:17:37,680 --> 00:17:41,040 Speaker 1: wonder what you make of the state of globalization today. 299 00:17:41,160 --> 00:17:43,960 Speaker 1: Are are those who say that it's dead or that 300 00:17:44,000 --> 00:17:47,760 Speaker 1: we're onto something different. Are they saying that prematurely? Yeah, 301 00:17:47,880 --> 00:17:50,720 Speaker 1: I think it's not dead, but it has stopped moving. 302 00:17:51,359 --> 00:17:54,200 Speaker 1: That's very clear from the fact that the TPP will 303 00:17:54,200 --> 00:17:57,920 Speaker 1: not will not happen anytime soon. Uh is it going 304 00:17:58,119 --> 00:18:02,400 Speaker 1: back at this stage? Not very much. I think we're 305 00:18:02,440 --> 00:18:06,879 Speaker 1: seeing some tendencies. Uh. The way, Again, from a descriptive 306 00:18:06,880 --> 00:18:08,560 Speaker 1: point of view, I think we're probably going to be 307 00:18:08,680 --> 00:18:10,320 Speaker 1: We're not going to go in with us, but we're 308 00:18:10,320 --> 00:18:14,160 Speaker 1: going to go in neutral if we want to go forward. 309 00:18:14,200 --> 00:18:17,240 Speaker 1: Because clearly trade is good in general, we have to 310 00:18:17,280 --> 00:18:21,520 Speaker 1: think much harder about the losers from trade and accepting, 311 00:18:21,720 --> 00:18:25,520 Speaker 1: you know, more explicitly, and food programs, the notion that 312 00:18:25,600 --> 00:18:29,000 Speaker 1: we have to help these people adjust to to to 313 00:18:29,119 --> 00:18:32,280 Speaker 1: the world as it is. How culpable are policy makers 314 00:18:32,359 --> 00:18:36,120 Speaker 1: or policy making organizations of not recognizing that sooner? Why 315 00:18:36,119 --> 00:18:40,240 Speaker 1: did it take what we're seeing now to galvanize policymakers 316 00:18:40,320 --> 00:18:43,880 Speaker 1: to realize that that kind of conversation needs to happen, 317 00:18:43,920 --> 00:18:47,320 Speaker 1: that more inclusion, more economic inclusion around the world. But 318 00:18:47,480 --> 00:18:49,320 Speaker 1: you know, it's a it's a it's an interesting fact. 319 00:18:49,359 --> 00:18:52,520 Speaker 1: I mean, remember that fifteen years ago, but that was 320 00:18:52,560 --> 00:18:58,040 Speaker 1: dominating the discussion among policymakers was the Washington Consensus. Then 321 00:18:58,080 --> 00:19:01,040 Speaker 1: it took the financial crisis to show that the Washington 322 00:19:01,119 --> 00:19:05,320 Speaker 1: consensus in terms of positions on fiscal policy might withy 323 00:19:05,359 --> 00:19:09,840 Speaker 1: policy wasn't quite white. In terms of positions about flows 324 00:19:09,880 --> 00:19:14,920 Speaker 1: of capital wasn't quite right, and the adjustment took place. Uh. 325 00:19:14,960 --> 00:19:18,399 Speaker 1: And again the Washington consensus was about free trade because 326 00:19:18,440 --> 00:19:21,040 Speaker 1: free trade is good. Yes, they are losers, but they 327 00:19:21,040 --> 00:19:23,520 Speaker 1: can be compensated, so we don't have to worry. And 328 00:19:23,600 --> 00:19:26,720 Speaker 1: now I think we're seeing kind of the equivalent of 329 00:19:26,720 --> 00:19:29,640 Speaker 1: a financial crisis, but on the trade side, which is yes. 330 00:19:29,680 --> 00:19:33,040 Speaker 1: I mean, you know, the Washington consensus wasn't quite right. 331 00:19:33,600 --> 00:19:35,720 Speaker 1: Trade can be good, but they are losers and you 332 00:19:35,800 --> 00:19:38,639 Speaker 1: have to take those into account. Again, it takes, uh, 333 00:19:39,119 --> 00:19:42,720 Speaker 1: it takes the kind of crisis financial in one case 334 00:19:42,800 --> 00:19:48,000 Speaker 1: political now to actually make policy makers think harder. I 335 00:19:48,080 --> 00:19:51,080 Speaker 1: look Olivia. In the time that we've got left this morning, 336 00:19:51,880 --> 00:19:55,840 Speaker 1: it's so many people in America scratching their heads about 337 00:19:56,000 --> 00:20:01,120 Speaker 1: economics in America. Madame Lecguard spoke at Lumberg on Friday, 338 00:20:01,400 --> 00:20:05,960 Speaker 1: and she quite emotionally, quite heatedly talked about diversity talked 339 00:20:05,960 --> 00:20:10,120 Speaker 1: about our social fabric and economics, and she mentioned just 340 00:20:10,160 --> 00:20:13,440 Speaker 1: as one mathematical idea of the Genie coefficient and worrying 341 00:20:13,480 --> 00:20:18,119 Speaker 1: about inequality, which way is the Genie coefficient moving in 342 00:20:18,240 --> 00:20:24,840 Speaker 1: this United States of America? Which way is our inequality moving? Well, again, 343 00:20:24,880 --> 00:20:27,879 Speaker 1: the technical answer is actually in the very recent past 344 00:20:27,920 --> 00:20:30,639 Speaker 1: for Genee coefficient has moved the right way and it 345 00:20:30,720 --> 00:20:34,520 Speaker 1: has decreased. But it's clear that these very strong trend 346 00:20:35,080 --> 00:20:39,680 Speaker 1: towards more inequality if we let market forces just operate 347 00:20:39,760 --> 00:20:42,800 Speaker 1: on their own. One important point which I'm sure Madam 348 00:20:42,840 --> 00:20:46,159 Speaker 1: Legot made is that of how people focus on trade 349 00:20:46,200 --> 00:20:48,840 Speaker 1: because it's very visible. This is where plants are closed, 350 00:20:48,880 --> 00:20:52,080 Speaker 1: they moved to Mexico, they move elsewhere. The main source 351 00:20:52,160 --> 00:20:57,720 Speaker 1: of inequality is technological progress, which basically has made skills 352 00:20:58,119 --> 00:21:02,159 Speaker 1: much more important and put on kill workers at a disadvantage, 353 00:21:02,440 --> 00:21:04,960 Speaker 1: but that's much harder to see, so people have focused 354 00:21:05,000 --> 00:21:08,080 Speaker 1: on trade. Uh. There is in addition, and I think 355 00:21:08,119 --> 00:21:12,399 Speaker 1: it's a separate evolution, is the one percent, which basically 356 00:21:12,560 --> 00:21:15,879 Speaker 1: is obscene. Is comes from different forces, but it is 357 00:21:16,000 --> 00:21:18,920 Speaker 1: very visible and people react to that. So what has 358 00:21:18,960 --> 00:21:21,640 Speaker 1: to be done is deal with the one percent through 359 00:21:22,160 --> 00:21:26,719 Speaker 1: taxes and other measures, and then try really hard to 360 00:21:26,760 --> 00:21:30,320 Speaker 1: help people are losing from technological progress or from trade, 361 00:21:30,720 --> 00:21:35,359 Speaker 1: to be trained, to be compensated financially. I think that 362 00:21:35,480 --> 00:21:38,919 Speaker 1: we have to be honest. There are no magic solutions. 363 00:21:39,320 --> 00:21:41,639 Speaker 1: So there is going to be this tension between the 364 00:21:41,640 --> 00:21:43,680 Speaker 1: people who actually tell the truth and say, well, we'll 365 00:21:43,680 --> 00:21:45,800 Speaker 1: do the best we can. But we live in the 366 00:21:45,840 --> 00:21:47,640 Speaker 1: world in which there is going to be more risk. 367 00:21:47,680 --> 00:21:50,320 Speaker 1: It's going to be difficult to help everybody, and the 368 00:21:50,400 --> 00:21:52,280 Speaker 1: people are going to say, well, I know exactly how 369 00:21:52,320 --> 00:21:54,360 Speaker 1: to do it, trust me and not going to tell 370 00:21:54,400 --> 00:21:56,760 Speaker 1: you before I'm elected, but I'll do it. This is 371 00:21:56,760 --> 00:21:59,200 Speaker 1: an environment in which for many of the issues there 372 00:21:59,240 --> 00:22:01,920 Speaker 1: is no simple okay, we have to leave at their 373 00:22:01,920 --> 00:22:11,520 Speaker 1: Professor Blanchard, thank you so much. With the Peterson Institute, 374 00:22:13,320 --> 00:22:16,720 Speaker 1: who you put your trust in matters. Investors have put 375 00:22:16,720 --> 00:22:20,760 Speaker 1: their trust in independent registered investment advisors to the tune 376 00:22:20,760 --> 00:22:24,280 Speaker 1: of four trillion dollars. Why they see their roles to serve, 377 00:22:24,560 --> 00:22:27,919 Speaker 1: not sell. That's why Charles Schwab is committed to the 378 00:22:28,000 --> 00:22:34,120 Speaker 1: success over seven thousand independent financial advisors who passionately dedicate 379 00:22:34,200 --> 00:22:38,960 Speaker 1: themselves to helping people achieve their financial goals, learn more 380 00:22:39,480 --> 00:22:49,159 Speaker 1: and find your independent advisor dot com. Let's get to 381 00:22:49,240 --> 00:22:52,520 Speaker 1: the morning mustet. I'm Mr Trump, Robert J. Samuelson and 382 00:22:52,600 --> 00:22:57,240 Speaker 1: does terrific political economics and always puts in history. Mr 383 00:22:57,280 --> 00:23:00,560 Speaker 1: Samuelson says history matters. The often overlooked truth is that 384 00:23:00,640 --> 00:23:04,320 Speaker 1: the U. S economy, despite much rhetoric to the contrary, 385 00:23:04,560 --> 00:23:09,240 Speaker 1: is less globalized and virtually all other advanced countries trade 386 00:23:09,280 --> 00:23:13,680 Speaker 1: remains foreign policy. Who we trade with and how our 387 00:23:13,800 --> 00:23:18,200 Speaker 1: expressions of who we trade with UH, and how our 388 00:23:18,359 --> 00:23:23,000 Speaker 1: expressions of national purpose and power luages in galis with 389 00:23:23,080 --> 00:23:25,840 Speaker 1: the friend scene Rome professors in Galas. I look at 390 00:23:25,840 --> 00:23:30,000 Speaker 1: the new globalization of Donald Trump, how would you define that? 391 00:23:31,600 --> 00:23:33,520 Speaker 1: That's a very good question, because I'm not so sure 392 00:23:33,680 --> 00:23:36,240 Speaker 1: we have a new globalization of Donald Trump. I think 393 00:23:36,240 --> 00:23:40,879 Speaker 1: in doing the campaign he was the anti globalization UH. 394 00:23:41,000 --> 00:23:43,879 Speaker 1: The people he thinks of fine. His cabinets don't seem 395 00:23:44,080 --> 00:23:47,520 Speaker 1: to be very much against globalization, So I think that 396 00:23:47,840 --> 00:23:51,399 Speaker 1: there would be more rhetoric than substance. The only f 397 00:23:51,640 --> 00:23:55,280 Speaker 1: I have is regarding sort of long term foreign policy. 398 00:23:55,840 --> 00:24:00,400 Speaker 1: Donald Trump tends to be very much deloiented, and I 399 00:24:00,480 --> 00:24:03,800 Speaker 1: fear that he might be sacrificing long term benefits for 400 00:24:03,840 --> 00:24:07,080 Speaker 1: the United States in the exchange for some popular short 401 00:24:07,119 --> 00:24:10,560 Speaker 1: term deals. Right, Luigi, the heritage of your University of 402 00:24:10,640 --> 00:24:16,280 Speaker 1: Chicago partly is Jacob Weiner in absolutely classic nineteen forties 403 00:24:16,560 --> 00:24:22,000 Speaker 1: essay on mercantile is. Um, you mentioned Mr Trump makes deals? Okay, 404 00:24:22,040 --> 00:24:24,359 Speaker 1: I get that. Is this just a new form of 405 00:24:24,400 --> 00:24:28,639 Speaker 1: mercantilism for America. Actually, if we start looking at the 406 00:24:28,680 --> 00:24:31,720 Speaker 1: carrier deal, I fear it is. I think that I 407 00:24:31,840 --> 00:24:36,080 Speaker 1: regard the carrier deal is terrible. The intention was very 408 00:24:36,080 --> 00:24:39,960 Speaker 1: good to save jobs in America. But the adopery of 409 00:24:40,040 --> 00:24:42,480 Speaker 1: the way it has been done, the fact that does 410 00:24:42,520 --> 00:24:47,400 Speaker 1: not promote a new policy everybody, but gives a targeted 411 00:24:47,480 --> 00:24:51,840 Speaker 1: incentives and targeted fear because there is a fear of retaliation, 412 00:24:52,400 --> 00:24:57,760 Speaker 1: is basically the dawn of a chronic capitalist world. You know, 413 00:24:57,800 --> 00:25:00,879 Speaker 1: I look, Luigi at the economics of Donald Trump, and 414 00:25:00,880 --> 00:25:03,560 Speaker 1: it tells me that he needs advisors around him. Do 415 00:25:03,600 --> 00:25:10,639 Speaker 1: you have any confidence his advisors can massage the message? Um, 416 00:25:10,680 --> 00:25:15,480 Speaker 1: I'm not so sure. No, I don't have that confidence, Luigi. Uh. 417 00:25:15,520 --> 00:25:17,160 Speaker 1: You know, when I look at Rome and I look 418 00:25:17,200 --> 00:25:19,840 Speaker 1: at all that's going on, how does Italy fold into 419 00:25:19,840 --> 00:25:23,040 Speaker 1: Trump economics. I mean, the populism that we see in 420 00:25:23,080 --> 00:25:28,920 Speaker 1: Italy has to make Mr Trump adapt and adjust, doesn't it. Actually, 421 00:25:29,040 --> 00:25:31,639 Speaker 1: I think that the populace in Italy, have to say, 422 00:25:31,880 --> 00:25:34,320 Speaker 1: is better than the Trump's populace, because there is no 423 00:25:34,440 --> 00:25:39,600 Speaker 1: element of racism in uh In, in uh In, the 424 00:25:39,640 --> 00:25:42,879 Speaker 1: Fast Movement, there's no element of races in the in 425 00:25:42,880 --> 00:25:45,879 Speaker 1: the Sabini who tries to imitate le Pan the wise, 426 00:25:46,000 --> 00:25:49,520 Speaker 1: but in the most uh In, the biggest party of 427 00:25:49,560 --> 00:25:51,760 Speaker 1: the opposition, which is the Fast Movement, there is no 428 00:25:51,800 --> 00:25:55,520 Speaker 1: element of races. And it's not even necessarily antiglobalization, right, 429 00:25:55,520 --> 00:25:59,639 Speaker 1: be anti euro but not antiglobalization. So I take the 430 00:25:59,720 --> 00:26:03,720 Speaker 1: five Start movement popula is over trompakay Oh. That's an 431 00:26:03,720 --> 00:26:19,800 Speaker 1: important distinction. Well, as I've been saying, we've been focusing 432 00:26:19,840 --> 00:26:22,359 Speaker 1: on on Italy, the Italian referendum there. Last night, we 433 00:26:22,359 --> 00:26:24,399 Speaker 1: had the pleasure of speaking with Carl Weinberg, founder and 434 00:26:24,440 --> 00:26:27,800 Speaker 1: chief economist at High Frequency Economics last week before that 435 00:26:27,880 --> 00:26:30,280 Speaker 1: referendum took place, and it's a great pleasure to have 436 00:26:30,359 --> 00:26:32,359 Speaker 1: him back on the show now to talk about what 437 00:26:32,359 --> 00:26:35,280 Speaker 1: it means going forward in Italy, and indeed in Europe, 438 00:26:35,280 --> 00:26:36,800 Speaker 1: and Carl, great to have you with us. Good morning, 439 00:26:37,000 --> 00:26:39,800 Speaker 1: good morning, great to be here on this very exciting morning. Well, 440 00:26:39,840 --> 00:26:42,360 Speaker 1: I was struck by what Matteo Rensey said last night 441 00:26:42,359 --> 00:26:43,679 Speaker 1: in his speech. I guess we could call it a 442 00:26:43,680 --> 00:26:47,159 Speaker 1: concession speech last night, late last night he said, we 443 00:26:47,240 --> 00:26:49,919 Speaker 1: gave the Italians an opportunity to change, but we didn't 444 00:26:50,560 --> 00:26:53,639 Speaker 1: succeed his sense of what happened there. This is a country, though, Carl, 445 00:26:53,680 --> 00:26:56,560 Speaker 1: that does need to change. The economy remains in pretty 446 00:26:56,600 --> 00:26:59,520 Speaker 1: rough shape. Yeah, the economy is in pretty rough shape. 447 00:26:59,520 --> 00:27:01,879 Speaker 1: And the timing of all of this is awful because 448 00:27:02,119 --> 00:27:06,680 Speaker 1: banks are being mandated to raise new capital by ECB regulators, 449 00:27:07,000 --> 00:27:10,200 Speaker 1: and the idea of raising capital right now and the 450 00:27:10,200 --> 00:27:13,879 Speaker 1: politically turbulent climate in Italy is very, very difficult. It 451 00:27:13,920 --> 00:27:17,160 Speaker 1: complicates the problem of convincing foreigners to put money into 452 00:27:17,240 --> 00:27:21,280 Speaker 1: Italian banks at a time when Italy's participation in Europe 453 00:27:21,400 --> 00:27:25,080 Speaker 1: is I wouldn't necessarily say in doubt, but certainly at risk. 454 00:27:25,400 --> 00:27:28,600 Speaker 1: Do you think that any meaningful policy is going to 455 00:27:28,640 --> 00:27:31,560 Speaker 1: get made here over the next few months eighteen months, say, 456 00:27:31,640 --> 00:27:33,400 Speaker 1: as all of this is hammered out, or his politics 457 00:27:33,440 --> 00:27:37,560 Speaker 1: going to eclipse all well, politics is is eclipsing everything. 458 00:27:37,560 --> 00:27:40,760 Speaker 1: The most important piece of legislation on the books right 459 00:27:40,800 --> 00:27:43,760 Speaker 1: now is going to be first of all, to maintain 460 00:27:44,080 --> 00:27:47,399 Speaker 1: a stable government in power and not to go to elections. 461 00:27:47,680 --> 00:27:50,840 Speaker 1: And secondly, to do something about the election laws so 462 00:27:51,000 --> 00:27:54,080 Speaker 1: that the Five Star Party does not rise to power 463 00:27:54,160 --> 00:27:56,560 Speaker 1: when they do go to the poll and uh. And 464 00:27:56,600 --> 00:27:58,480 Speaker 1: that's that that's the big risk right now. And I 465 00:27:58,480 --> 00:28:00,280 Speaker 1: don't know how they do that or if they can 466 00:28:00,359 --> 00:28:03,919 Speaker 1: do that, but that's much more important than anything else. Um, Carl, 467 00:28:04,359 --> 00:28:08,360 Speaker 1: congratulations on your note this morning. It is especially acute 468 00:28:08,359 --> 00:28:13,280 Speaker 1: on Frankfurt. Mr Renzy and Mr dro help us with 469 00:28:13,400 --> 00:28:18,199 Speaker 1: the maths and the constraints that Mario Draggy faces. What 470 00:28:18,320 --> 00:28:21,320 Speaker 1: does he not want to do now that we see 471 00:28:21,359 --> 00:28:24,719 Speaker 1: this Italian defeat? Yeah, Tom, that's that's the key question 472 00:28:24,920 --> 00:28:28,080 Speaker 1: for the financial markets right now. Let's guess that Italy 473 00:28:28,119 --> 00:28:30,600 Speaker 1: is going to have some period of instability. The market 474 00:28:30,680 --> 00:28:33,000 Speaker 1: is believing that the ECB can come in as it 475 00:28:33,080 --> 00:28:36,439 Speaker 1: had before and just buy Italian bomb stabilize the market, 476 00:28:36,640 --> 00:28:39,600 Speaker 1: but it can't because it's limited in the amount of 477 00:28:39,640 --> 00:28:43,120 Speaker 1: Italian bonds that can have on its books for any reason. Whatsoever. 478 00:28:43,400 --> 00:28:47,040 Speaker 1: And that limit is somewhere around it's a tench more 479 00:28:47,240 --> 00:28:50,640 Speaker 1: because some bonds new bonds have collective action clauses that 480 00:28:50,760 --> 00:28:55,240 Speaker 1: allow a smaller majority to dictate terms. But the limit 481 00:28:55,320 --> 00:28:58,880 Speaker 1: is that if anybody owns more of an Italian bond, 482 00:28:59,160 --> 00:29:02,080 Speaker 1: they can call them. Do we know that limit? Do 483 00:29:02,120 --> 00:29:04,200 Speaker 1: we know where the e c B is or do 484 00:29:04,280 --> 00:29:08,320 Speaker 1: we know the delta to that limit? Yeah? Well, excuse me, David, 485 00:29:08,360 --> 00:29:15,080 Speaker 1: that was calculation. Do we know the do we know delta? T? Wow? 486 00:29:15,240 --> 00:29:17,520 Speaker 1: Do we know do we know the delta of Mr 487 00:29:17,600 --> 00:29:20,960 Speaker 1: drogs limit? Yeah? We don't have any Greek letters for 488 00:29:20,960 --> 00:29:23,640 Speaker 1: for this stuff, Tom. The e CBS making up English 489 00:29:23,680 --> 00:29:28,560 Speaker 1: letters for PSPP. And the limit is and the e 490 00:29:28,680 --> 00:29:33,000 Speaker 1: c B has already bought almost all of the Italian 491 00:29:33,040 --> 00:29:35,840 Speaker 1: bonds that it can buy without triggering this limit as 492 00:29:35,880 --> 00:29:38,640 Speaker 1: I figure it out, and the note that I've reported 493 00:29:38,680 --> 00:29:42,000 Speaker 1: to our high frequency economics readers this morning, Um, the 494 00:29:42,080 --> 00:29:44,920 Speaker 1: e c B has about twenty billion euros worth of 495 00:29:44,960 --> 00:29:48,280 Speaker 1: Italian government bonds that it can buy all right, in 496 00:29:48,320 --> 00:29:51,440 Speaker 1: addition to those that is committed to buy between now 497 00:29:51,480 --> 00:29:55,200 Speaker 1: in March under the current PSPT program. So if they 498 00:29:55,240 --> 00:29:57,920 Speaker 1: need to spend more than twenty billion euros to stabilize 499 00:29:57,920 --> 00:30:00,560 Speaker 1: the Italian bottom market. The only way they can do 500 00:30:00,600 --> 00:30:05,000 Speaker 1: that is to curtel the overall public sector bond purchase program. 501 00:30:05,360 --> 00:30:07,800 Speaker 1: In other words, at the limit of what they can do, 502 00:30:07,880 --> 00:30:11,680 Speaker 1: the ECBs BAZUKA is out of AMMO as far as 503 00:30:11,720 --> 00:30:14,600 Speaker 1: Italian bonds are concerned. And by the way, similar Mass 504 00:30:14,760 --> 00:30:18,360 Speaker 1: suggests that their demo regarding German bonds as well, so 505 00:30:18,560 --> 00:30:20,880 Speaker 1: PSTP has gone about as far as it can go. 506 00:30:21,320 --> 00:30:23,880 Speaker 1: People who are hoping for an extension or for an 507 00:30:23,880 --> 00:30:27,680 Speaker 1: emergency intervention to support Italy are going to be disappointed 508 00:30:27,720 --> 00:30:30,719 Speaker 1: if that's what they're counting on. Carl Weinberg with US 509 00:30:30,760 --> 00:30:33,760 Speaker 1: NOW of High Frequency Economics, Carl, I believe it was 510 00:30:33,880 --> 00:30:37,240 Speaker 1: Mr Schoebluff Germany out today saying we're in no mood 511 00:30:37,240 --> 00:30:41,760 Speaker 1: to retire bonds. Charles why plots of Geneva Paul Deguire 512 00:30:41,840 --> 00:30:46,680 Speaker 1: of LS have both begged for some form of retirement 513 00:30:47,080 --> 00:30:51,320 Speaker 1: of previous mistakes so that Europe can move on. We're 514 00:30:51,440 --> 00:30:56,120 Speaker 1: nowhere in sight of the decision to retire bad debt, 515 00:30:56,240 --> 00:31:00,440 Speaker 1: are we No? I don't think so. I think that uh, nobody, 516 00:31:00,480 --> 00:31:04,040 Speaker 1: particularly in Germany wants to contemplate the notion of borrowers 517 00:31:04,080 --> 00:31:07,400 Speaker 1: not living up to their obligations. So there's no sign 518 00:31:07,480 --> 00:31:10,880 Speaker 1: of debt relief anywhere that that I can see. UM. 519 00:31:11,000 --> 00:31:13,560 Speaker 1: One issue that hasn't come up so much in Europe, 520 00:31:13,560 --> 00:31:15,880 Speaker 1: and I'm surprised that it hasn't, has been the notion 521 00:31:15,960 --> 00:31:18,840 Speaker 1: of refinancing the debt of today's low interest rates. I 522 00:31:18,840 --> 00:31:21,320 Speaker 1: know there's been some talk of ultra long bonds and 523 00:31:21,640 --> 00:31:25,840 Speaker 1: that's been appealing to lenders. I'm sorry to borrowers to governments, 524 00:31:25,840 --> 00:31:28,240 Speaker 1: but it's hard to find lenders who are willing to 525 00:31:28,320 --> 00:31:30,560 Speaker 1: lend money for fifty or a hundred years at a time. 526 00:31:30,920 --> 00:31:33,280 Speaker 1: But what governments can do, and they haven't done much of, 527 00:31:33,680 --> 00:31:36,520 Speaker 1: is brought back their debt and rolled it over into new, 528 00:31:36,560 --> 00:31:40,040 Speaker 1: lower yielding debt, and that's something we might look forward to. 529 00:31:40,200 --> 00:31:43,080 Speaker 1: Why do you think that hasn't happened yet, UM, I 530 00:31:43,120 --> 00:31:45,520 Speaker 1: don't know. I think that there's some notion that it 531 00:31:45,600 --> 00:31:49,120 Speaker 1: might be disruptive to the bond markets. There's also the notion, 532 00:31:49,240 --> 00:31:52,000 Speaker 1: particularly in Germany, that you want to leave that higher 533 00:31:52,080 --> 00:31:55,120 Speaker 1: yield out. There is a social service to savers who 534 00:31:55,160 --> 00:31:57,280 Speaker 1: are planning for their retirement and This has been one 535 00:31:57,280 --> 00:32:00,840 Speaker 1: of Germany's complaints with the ECB at their low interest 536 00:32:00,920 --> 00:32:04,440 Speaker 1: rates have been denying German savors of interest income that 537 00:32:04,520 --> 00:32:07,400 Speaker 1: they need to fund their retirement and therefore that their 538 00:32:07,400 --> 00:32:11,520 Speaker 1: minetary policies and low interest rates have been disruptive. We 539 00:32:11,520 --> 00:32:14,640 Speaker 1: haven't talked yet about the Italian banks, obviously a huge 540 00:32:14,640 --> 00:32:18,320 Speaker 1: weight on that country. Montepasky evidently having meetings today with 541 00:32:18,320 --> 00:32:20,640 Speaker 1: with JP Morgan and others in this consortium at what 542 00:32:20,720 --> 00:32:23,680 Speaker 1: might happen next if if there has to be a 543 00:32:23,720 --> 00:32:26,760 Speaker 1: bail out here, Carl, is that something that Italy itself 544 00:32:26,760 --> 00:32:28,400 Speaker 1: would shoulder? Is it's something that would go to the 545 00:32:28,400 --> 00:32:31,840 Speaker 1: European stability mechanism. Who's gonna Who's gonna shoulder that? Yeah, well, 546 00:32:31,880 --> 00:32:34,200 Speaker 1: you've got all the right questions and there just aren't 547 00:32:34,200 --> 00:32:37,280 Speaker 1: a lot of answers. Were an unexplored territory. The single 548 00:32:37,360 --> 00:32:40,680 Speaker 1: resolution mechanism is barely a yield old year old right 549 00:32:40,720 --> 00:32:44,520 Speaker 1: now and hasn't been invoked. The notion of um bailing 550 00:32:44,640 --> 00:32:48,720 Speaker 1: in stakeholders before the government gets spelled and has to 551 00:32:48,800 --> 00:32:51,360 Speaker 1: be applied. And this would be for the very very 552 00:32:51,760 --> 00:32:55,680 Speaker 1: first time the government of Italy and principle cannot intervene 553 00:32:55,720 --> 00:32:57,880 Speaker 1: directly in banks, but of course would be able to 554 00:32:57,920 --> 00:32:59,880 Speaker 1: get an exception to do so, so there are all 555 00:33:00,000 --> 00:33:03,320 Speaker 1: out of questions. The timing of all of this is awful. 556 00:33:03,560 --> 00:33:07,040 Speaker 1: The Single regulator has asked Italian banks to raise more 557 00:33:07,120 --> 00:33:10,440 Speaker 1: capital by the end of this year. Obviously, in this 558 00:33:10,520 --> 00:33:14,120 Speaker 1: political climate it's hard for them to attract international investors 559 00:33:14,200 --> 00:33:17,400 Speaker 1: or investors at all into their system. The biggest contribution 560 00:33:17,480 --> 00:33:20,680 Speaker 1: the ECB can make right now is to delay the 561 00:33:20,720 --> 00:33:25,160 Speaker 1: deadlines for capital adequacy so that Italian banks can postpone 562 00:33:25,200 --> 00:33:28,440 Speaker 1: their issue of new capital of new equity shares until 563 00:33:28,440 --> 00:33:31,400 Speaker 1: a more stable econotic climate is there. That's something that 564 00:33:31,440 --> 00:33:34,000 Speaker 1: can happen. I don't know if it will. I Mean 565 00:33:34,040 --> 00:33:38,640 Speaker 1: and David to continue this conversation. UniCredit again trading under 566 00:33:38,680 --> 00:33:42,120 Speaker 1: two euros per share, trying to find new weakness this 567 00:33:42,160 --> 00:33:45,800 Speaker 1: morning one point nine eight euros. I don't like to 568 00:33:45,800 --> 00:33:49,000 Speaker 1: do this, but maybe today it is. Jermaine David. Un 569 00:33:49,120 --> 00:33:53,640 Speaker 1: Credit from its peak of Friday is down six point 570 00:33:53,720 --> 00:33:57,040 Speaker 1: five I usually don't want to do that with low 571 00:33:57,480 --> 00:34:01,840 Speaker 1: single digit stocks, but but maybe today it works. How 572 00:34:02,040 --> 00:34:04,320 Speaker 1: how wide would the contagion be here? Carl and I 573 00:34:04,800 --> 00:34:07,240 Speaker 1: use that term cautiously, but Tom mentioned UNI credit. We 574 00:34:07,280 --> 00:34:10,680 Speaker 1: have other sort of midsized Italian banks that are UH 575 00:34:10,719 --> 00:34:13,080 Speaker 1: in trouble as well. How far could this spread? Do 576 00:34:13,080 --> 00:34:15,759 Speaker 1: you think? Yeah? Well, I mean, the trouble with the 577 00:34:15,800 --> 00:34:19,400 Speaker 1: banks right now is that the regulator is demanding recapitalization. 578 00:34:19,760 --> 00:34:23,920 Speaker 1: The operational question is can these banks carry on without 579 00:34:23,960 --> 00:34:26,719 Speaker 1: recapitalizing right now? And the answer to that is yes, 580 00:34:26,760 --> 00:34:29,799 Speaker 1: they can. The position of the Italian banks and the 581 00:34:29,800 --> 00:34:33,000 Speaker 1: Bank of Italy has always been that the Italian banks 582 00:34:33,000 --> 00:34:35,600 Speaker 1: are well capitalized on their non performing I'm sorry, well 583 00:34:35,640 --> 00:34:38,160 Speaker 1: collateralized on their nonperforming loans and don't need to be 584 00:34:38,239 --> 00:34:42,319 Speaker 1: capitalized at all, let alone right now. So if we 585 00:34:42,400 --> 00:34:45,799 Speaker 1: can postpone the issue of recapitalization for a while, the 586 00:34:45,800 --> 00:34:49,640 Speaker 1: Italian banks can continue to operate and remain solvent and 587 00:34:49,800 --> 00:34:52,160 Speaker 1: um that probably is a more prudent way to go 588 00:34:52,400 --> 00:34:55,040 Speaker 1: than forcing them to sell shares in this environment. As 589 00:34:55,080 --> 00:34:57,719 Speaker 1: Tom described it, the timing is bad and later this 590 00:34:57,760 --> 00:34:59,840 Speaker 1: week we get a new unemployment data from Italy and 591 00:34:59,840 --> 00:35:03,840 Speaker 1: that projected to go up even more, especially among youth. 592 00:35:03,960 --> 00:35:07,320 Speaker 1: I mean, we talked about economics and policy and and 593 00:35:07,320 --> 00:35:09,840 Speaker 1: and and politics discreetly here, but we could see some 594 00:35:09,880 --> 00:35:12,719 Speaker 1: blending if this continues to worsen. Well, the blending is 595 00:35:12,800 --> 00:35:16,040 Speaker 1: very very clear. The Five Star movement right now is 596 00:35:16,080 --> 00:35:20,200 Speaker 1: tied with the Democratic Party and overall multiparty polling. I 597 00:35:20,239 --> 00:35:22,200 Speaker 1: know we distrust polls right now, but they're all we 598 00:35:22,239 --> 00:35:23,880 Speaker 1: have to go on. And if it came to a 599 00:35:23,960 --> 00:35:27,719 Speaker 1: runoff between Five Star and Mr Rindsey's Democratic Party, five 600 00:35:27,760 --> 00:35:30,560 Speaker 1: Star would win control of the next government by alliance slide. 601 00:35:30,920 --> 00:35:34,359 Speaker 1: And the Five Star is an anti europe party. It's 602 00:35:34,360 --> 00:35:37,160 Speaker 1: a party of well, I don't want to call it reform. 603 00:35:37,160 --> 00:35:38,960 Speaker 1: It's not really a right wing or a left wing. 604 00:35:39,000 --> 00:35:43,160 Speaker 1: It's kind of like, uh, this disparate bunch of views, 605 00:35:43,160 --> 00:35:46,319 Speaker 1: a right that would be very very challenging to the 606 00:35:46,360 --> 00:35:50,800 Speaker 1: notion of continuity and Italian politics, and in particular would 607 00:35:50,880 --> 00:35:55,080 Speaker 1: raise the question of leaving Europe explicitly. And if that happens, 608 00:35:55,400 --> 00:35:57,840 Speaker 1: and there are big questions out there for all bonds 609 00:35:57,840 --> 00:35:59,959 Speaker 1: in Europe and for a lot of our thinking about 610 00:36:00,000 --> 00:36:02,160 Speaker 1: European equity. So there are a lot of chips on 611 00:36:02,200 --> 00:36:05,040 Speaker 1: the table right now. The chip on the table that 612 00:36:05,280 --> 00:36:08,920 Speaker 1: focuses America and folks I walked twice, not once, but 613 00:36:09,000 --> 00:36:13,239 Speaker 1: twice down fifth avenue of this weekend past, Um, the 614 00:36:13,960 --> 00:36:18,719 Speaker 1: Gucci to Tiffany blockade and and Carl, how does the 615 00:36:18,760 --> 00:36:23,640 Speaker 1: Trump election? President Elect Trump? Obviously Asia focus this weekend, 616 00:36:24,000 --> 00:36:27,520 Speaker 1: but how does Mr Trump redound on Europe? What will 617 00:36:27,560 --> 00:36:31,239 Speaker 1: be the effect there? Well? You know, Um, I think 618 00:36:31,280 --> 00:36:34,000 Speaker 1: there are two questions there right. The first is, you know, 619 00:36:34,040 --> 00:36:37,520 Speaker 1: what will his policies toward Europe be? You know, the 620 00:36:37,560 --> 00:36:40,840 Speaker 1: Obama administration, I think has been pointing more towards Asia, 621 00:36:41,160 --> 00:36:43,480 Speaker 1: viewing Europe is done in Asia is the place where 622 00:36:43,480 --> 00:36:46,520 Speaker 1: growth is occurring on the planet. Um, it's not clear 623 00:36:46,600 --> 00:36:49,080 Speaker 1: that Mr Trump is outward looking at all as far 624 00:36:49,160 --> 00:36:52,719 Speaker 1: as US policy is concerned. So, and of course he's 625 00:36:52,800 --> 00:36:55,960 Speaker 1: very serious questions about the continuity of NATO, which in 626 00:36:56,080 --> 00:37:00,200 Speaker 1: turn supports the entire structure of Europe being able to 627 00:37:00,200 --> 00:37:03,759 Speaker 1: to grow without a huge commitment to defense and being 628 00:37:03,760 --> 00:37:06,480 Speaker 1: able to thrive. So we have a lot of questions 629 00:37:06,520 --> 00:37:10,200 Speaker 1: related from the coming from the Trump presidency into Europe, 630 00:37:10,239 --> 00:37:12,319 Speaker 1: and I think the first step before we can begin 631 00:37:12,400 --> 00:37:13,960 Speaker 1: to answer that is to wait and see who the 632 00:37:13,960 --> 00:37:16,680 Speaker 1: next Secretary of State is and what their world views 633 00:37:16,719 --> 00:37:19,560 Speaker 1: are and what kind of role of Congress is going 634 00:37:19,640 --> 00:37:22,080 Speaker 1: to take in all of this so just more questions 635 00:37:22,080 --> 00:37:25,160 Speaker 1: than answers right now. To the NATO Foreign ministers gathering 636 00:37:25,160 --> 00:37:27,360 Speaker 1: in Brussels this week, I believe Tuesday, I think, for 637 00:37:27,400 --> 00:37:30,960 Speaker 1: the first big political meeting since Donald Trump won, and 638 00:37:31,000 --> 00:37:33,080 Speaker 1: of course he's spoken to to the Secretary General of 639 00:37:33,160 --> 00:37:36,160 Speaker 1: NATO and assured him that the US's commitment remains strong. 640 00:37:36,520 --> 00:37:38,440 Speaker 1: Let me close your call by asking you about Brexit. 641 00:37:38,840 --> 00:37:42,000 Speaker 1: The court case, the Supreme Court case begins this week. 642 00:37:42,480 --> 00:37:45,440 Speaker 1: Four days of argument expected in London. What do you 643 00:37:45,480 --> 00:37:47,399 Speaker 1: expect there, What do you expect to hear in those 644 00:37:47,480 --> 00:37:51,480 Speaker 1: arguments before the UK Supreme Court. Well, the argument is 645 00:37:51,480 --> 00:37:55,280 Speaker 1: is clear. The public is presented a case and already 646 00:37:55,320 --> 00:37:58,640 Speaker 1: one in lower Court that only Parliament can pull Written 647 00:37:58,760 --> 00:38:02,000 Speaker 1: out of Europe because Parliament brought Britten into Europe by 648 00:38:02,040 --> 00:38:04,960 Speaker 1: an act of Parliament and only Parliament can undo its 649 00:38:04,960 --> 00:38:08,000 Speaker 1: own acts. You know, the legal interpretation of that was. 650 00:38:08,040 --> 00:38:10,640 Speaker 1: You know, in court anything can happen, But the clock 651 00:38:10,800 --> 00:38:14,239 Speaker 1: is really the most important constraint here. The reason that 652 00:38:14,320 --> 00:38:19,200 Speaker 1: Prime Minister May wants to dictate or trigger the negotiations 653 00:38:19,200 --> 00:38:21,800 Speaker 1: to leave Europe in March is that the UK's fiscal 654 00:38:21,880 --> 00:38:24,759 Speaker 1: year is March thirty one and all the adjustments on 655 00:38:24,800 --> 00:38:27,600 Speaker 1: the UK side can be easily implement or most easily 656 00:38:27,640 --> 00:38:30,279 Speaker 1: implemented at the end of the fiscal year, rather than 657 00:38:30,280 --> 00:38:33,200 Speaker 1: doing it in mid year. So she could lose a year. 658 00:38:34,000 --> 00:38:36,399 Speaker 1: And I said this now, we could lose a year 659 00:38:36,480 --> 00:38:39,960 Speaker 1: of progress toward Brexit if we don't get triggered by 660 00:38:40,000 --> 00:38:43,320 Speaker 1: the end of March, because it may be impossible for 661 00:38:43,440 --> 00:38:46,799 Speaker 1: Britain to disengage in mid fiscal year. I think that's 662 00:38:46,840 --> 00:38:49,440 Speaker 1: what I suspect that's what her thinking is on this. 663 00:38:49,760 --> 00:38:52,440 Speaker 1: So the clock is really the issue here. If Parliament 664 00:38:52,520 --> 00:38:56,279 Speaker 1: gets involved, we won't see the Article fifteen triggered by 665 00:38:56,840 --> 00:39:00,359 Speaker 1: the end of March. Carl, thank you for your time. 666 00:39:00,480 --> 00:39:05,160 Speaker 1: Carl Weinberg has been exceptionally value before and certainly during 667 00:39:05,200 --> 00:39:08,839 Speaker 1: and through the I I still don't have a name 668 00:39:09,000 --> 00:39:14,279 Speaker 1: for the crisis, Um, David, the great distortion there you go, 669 00:39:14,480 --> 00:39:17,239 Speaker 1: maybe the great this, the great that. Whatever does. Carl 670 00:39:17,280 --> 00:39:20,120 Speaker 1: Weinberg has been a huge voy David. What are your 671 00:39:20,160 --> 00:39:23,680 Speaker 1: thoughts and you're reading this weekend and particularly on Italy, Yeah, 672 00:39:23,760 --> 00:39:26,720 Speaker 1: you know. I I was very taken by the Bloomberg 673 00:39:26,800 --> 00:39:29,880 Speaker 1: Top Live blog, which, if if folks are professional clients, 674 00:39:29,880 --> 00:39:31,640 Speaker 1: they can get on the terminal, of course, could also 675 00:39:31,680 --> 00:39:34,920 Speaker 1: find it online. And I was struck by the turnout measures. 676 00:39:34,920 --> 00:39:37,560 Speaker 1: We haven't talked about that enough yet, but uh, it's 677 00:39:37,560 --> 00:39:39,200 Speaker 1: funny that there was talk of a sort of blue 678 00:39:39,200 --> 00:39:40,560 Speaker 1: line like we had here in the US was going 679 00:39:40,600 --> 00:39:43,480 Speaker 1: to be Italian expats voting, and they ended up voting 680 00:39:43,480 --> 00:39:45,560 Speaker 1: in much smaller numbers than than many would have thought. 681 00:39:45,640 --> 00:39:47,799 Speaker 1: And then really clear to me as the night war 682 00:39:47,880 --> 00:39:49,880 Speaker 1: on last night was the sort of geographic divide, the 683 00:39:49,920 --> 00:39:53,040 Speaker 1: sort of South divide in Italy. When you saw which 684 00:39:53,200 --> 00:39:55,120 Speaker 1: which parts of the country voted yes and which voted no, 685 00:39:55,239 --> 00:39:58,880 Speaker 1: that stood out to me stunning statement. Of course, Austria 686 00:39:59,000 --> 00:40:02,480 Speaker 1: going against pulism. Uh Ian Bremer of your raise your 687 00:40:02,480 --> 00:40:06,120 Speaker 1: group suggesting Austria not to put words in his mouth, 688 00:40:06,160 --> 00:40:08,480 Speaker 1: but I believe he thought was a sideshow given the 689 00:40:08,560 --> 00:40:11,520 Speaker 1: drama of Italy. And then of course it's onto France 690 00:40:12,120 --> 00:40:21,680 Speaker 1: here in the coming months. Thanks for listening to the 691 00:40:21,719 --> 00:40:27,719 Speaker 1: Bloomberg Surveillance podcast. Subscribe and listen to interviews on iTunes, SoundCloud, 692 00:40:28,120 --> 00:40:32,400 Speaker 1: or whichever podcast platform you prefer. I'm out on Twitter 693 00:40:32,480 --> 00:40:36,280 Speaker 1: at Tom Keene. David Gura is at David Gura before 694 00:40:36,280 --> 00:40:40,640 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg Radio. 695 00:40:53,080 --> 00:40:55,719 Speaker 1: Who you put your trust in matters. Investors have put 696 00:40:55,760 --> 00:41:00,160 Speaker 1: their trust and independent registered investment advisors to the two 697 00:41:00,160 --> 00:41:03,759 Speaker 1: and four trillion dollars. Why Learn more at find your 698 00:41:03,840 --> 00:41:06,600 Speaker 1: Independent Adviser dot com