1 00:00:00,080 --> 00:00:13,040 Speaker 1: Ye, Welcome to the Bloomberg Surveillance podcast. I'm Tom Keane 2 00:00:13,480 --> 00:00:17,560 Speaker 1: jay Ley. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:33,720 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg We're 5 00:00:33,720 --> 00:00:38,360 Speaker 1: watching em Currencies somewhat stable here, but as Hanky would 6 00:00:38,440 --> 00:00:43,320 Speaker 1: lecture at Johns Hopkins, they are log quadratic. Uh to 7 00:00:43,479 --> 00:00:46,280 Speaker 1: say the least, let me bring him in him without 8 00:00:46,320 --> 00:00:50,680 Speaker 1: further ado. After public service with President Reagan and with 9 00:00:50,800 --> 00:00:54,960 Speaker 1: some serious counsel to the Baltic States, Stephen Hanky has 10 00:00:55,000 --> 00:00:57,520 Speaker 1: done at all teaching at the Colorado School of Minds 11 00:00:57,880 --> 00:01:01,320 Speaker 1: at Berkeley and holding corn and I really mean this, 12 00:01:01,480 --> 00:01:08,560 Speaker 1: folks in applied economics at Johns Hopkins. Professor Hanky owns 13 00:01:08,840 --> 00:01:13,800 Speaker 1: when currencies unravel, and we welcome him now to Bloomberg Surveillance. Steves, 14 00:01:13,800 --> 00:01:16,479 Speaker 1: thank you so much for taking time with us today. 15 00:01:16,560 --> 00:01:21,280 Speaker 1: First of all, his contagion clicked in, well, it's certainly 16 00:01:21,440 --> 00:01:26,160 Speaker 1: clicked in last night. The half big currencies are becoming 17 00:01:26,200 --> 00:01:29,560 Speaker 1: more big by the day. We had the paso down 18 00:01:29,800 --> 00:01:35,199 Speaker 1: twelve percent against the greenback. Turkey's LARDN three Indian Route 19 00:01:35,200 --> 00:01:41,360 Speaker 1: PI record low against the us D, h Indonesian Rupe 20 00:01:41,560 --> 00:01:44,720 Speaker 1: a three year low, and the list goes on and on, 21 00:01:45,560 --> 00:01:49,480 Speaker 1: and I think Tom and Pim the key question or 22 00:01:50,280 --> 00:01:53,400 Speaker 1: is what's what's going on? And I think people are 23 00:01:53,440 --> 00:01:57,680 Speaker 1: just missing the boat here. The FED is tight, tight, tight. 24 00:01:58,640 --> 00:02:01,440 Speaker 1: And if we look at Milton Friedman and look at 25 00:02:01,440 --> 00:02:05,960 Speaker 1: our cues are quantities, we have broad money is growing 26 00:02:06,120 --> 00:02:09,959 Speaker 1: at a very modest pace four point seven percent year 27 00:02:10,040 --> 00:02:14,800 Speaker 1: over year measured on him for Center for Financial Stability 28 00:02:14,840 --> 00:02:17,919 Speaker 1: in New York UH. Then if we look at Bob 29 00:02:18,000 --> 00:02:22,280 Speaker 1: Mundell's TS prices, the most important price in the world 30 00:02:22,320 --> 00:02:26,280 Speaker 1: as a dollar euro rate, and it's at one sixteen now. 31 00:02:26,680 --> 00:02:31,680 Speaker 1: That's that's under my comfort zone of one forty. It's tight. 32 00:02:32,000 --> 00:02:37,160 Speaker 1: It's tight. The dollar is very strong. Gold is hovering 33 00:02:37,600 --> 00:02:40,440 Speaker 1: around the low end of my comfort zone, which is 34 00:02:40,440 --> 00:02:45,720 Speaker 1: about twelve an ounce. It's about twelve twelve now, So 35 00:02:45,960 --> 00:02:49,880 Speaker 1: we we have a very tight FED. That is strong 36 00:02:49,960 --> 00:02:55,880 Speaker 1: dollar putting massive pressure on the emerging market countries UH 37 00:02:55,919 --> 00:02:59,839 Speaker 1: and their half big currencies. So that's that's the over 38 00:03:00,040 --> 00:03:02,880 Speaker 1: all seen and it's not going to get any better. 39 00:03:03,000 --> 00:03:07,480 Speaker 1: And and it looks like the more the emerging market 40 00:03:07,560 --> 00:03:12,440 Speaker 1: currencies collapse, there there is an increased probability that will 41 00:03:12,440 --> 00:03:16,560 Speaker 1: will have some blowback in the big major markets. Professor Hanky, 42 00:03:16,800 --> 00:03:19,840 Speaker 1: is there something intrinsic about the value of the US 43 00:03:19,960 --> 00:03:23,040 Speaker 1: dollar that investors have missed over the last six to 44 00:03:23,120 --> 00:03:28,880 Speaker 1: twelve months. I don't think there's anything intrinsic. I think 45 00:03:28,880 --> 00:03:32,600 Speaker 1: you just have to follow Bob Mundel and look at prices. 46 00:03:32,680 --> 00:03:36,080 Speaker 1: And there are two big prices uh to look at, 47 00:03:36,120 --> 00:03:38,640 Speaker 1: and that's a dollar er rate in gold and then 48 00:03:38,920 --> 00:03:41,440 Speaker 1: and then beyond that you've got a lot of commodities. 49 00:03:41,480 --> 00:03:44,080 Speaker 1: I mean, all the base medals are done. Part of 50 00:03:44,080 --> 00:03:47,920 Speaker 1: the tightness, by the way, China is extremely tight now. 51 00:03:48,000 --> 00:03:52,200 Speaker 1: The big engine for growth in the world economy that 52 00:03:52,320 --> 00:03:55,560 Speaker 1: the last ten to twenty years has been China. And 53 00:03:56,120 --> 00:03:58,400 Speaker 1: if you look at the trend rate of growth and 54 00:03:58,440 --> 00:04:01,920 Speaker 1: the money supply since too COS and three in China, 55 00:04:02,120 --> 00:04:05,960 Speaker 1: the trend rate six for m TOO that's their broad 56 00:04:06,040 --> 00:04:10,280 Speaker 1: money major it's only growing at nine percent now. The 57 00:04:10,360 --> 00:04:13,160 Speaker 1: trend rate of growth for credit to their private sector 58 00:04:13,200 --> 00:04:16,320 Speaker 1: in China has been sixteen percent also and it's only 59 00:04:16,400 --> 00:04:20,440 Speaker 1: growing at nine now. And I think President g is 60 00:04:20,760 --> 00:04:25,320 Speaker 1: hit the panic button. They they've they've trying to unwind 61 00:04:25,360 --> 00:04:29,520 Speaker 1: the squeeze that they've put on and rescue things, but 62 00:04:29,920 --> 00:04:32,760 Speaker 1: it might be too little, too late. China is very 63 00:04:32,800 --> 00:04:36,160 Speaker 1: tight right now. So you've got the two the two 64 00:04:36,160 --> 00:04:40,320 Speaker 1: big elephants in the room said, the central bank in 65 00:04:40,440 --> 00:04:44,920 Speaker 1: China are very tight, and that's putting pressure on all 66 00:04:44,960 --> 00:04:50,040 Speaker 1: these half baked currencies and and half half bag countries. 67 00:04:50,120 --> 00:04:54,280 Speaker 1: Quite frankly, just come and glued. These carry trades unwind 68 00:04:54,480 --> 00:04:57,479 Speaker 1: very fast under these conditions. All right, So let's say 69 00:04:57,480 --> 00:05:01,679 Speaker 1: that Professor Stephen Hanky gets a call from the Central 70 00:05:01,680 --> 00:05:07,200 Speaker 1: Bank of Turkey. What does he say? Okay, here's here's 71 00:05:07,240 --> 00:05:10,760 Speaker 1: what's going on in Turkey. Uh. The inflation rate now 72 00:05:10,920 --> 00:05:14,800 Speaker 1: is I measure it very accurately, is a hundred and 73 00:05:14,839 --> 00:05:18,440 Speaker 1: one percent on an annual basis. The official rates fifteen 74 00:05:18,480 --> 00:05:22,520 Speaker 1: point eight five percent. So you have massive negative real 75 00:05:22,680 --> 00:05:26,200 Speaker 1: yields and the carry trade in Winding and Turkey. The 76 00:05:26,279 --> 00:05:30,160 Speaker 1: crisis will continue for a long time, as it's done 77 00:05:30,240 --> 00:05:34,200 Speaker 1: by the way in ninety four and two thousand and today. 78 00:05:34,400 --> 00:05:39,240 Speaker 1: The only way to stop this nightmare in Turkey is 79 00:05:39,320 --> 00:05:41,599 Speaker 1: to make the lira as good as gold, make it 80 00:05:41,720 --> 00:05:43,760 Speaker 1: a clone of gold. And you do that with a 81 00:05:43,880 --> 00:05:50,120 Speaker 1: currency board system. You fix the liras exchange uh and 82 00:05:50,240 --> 00:05:53,360 Speaker 1: make it freely convertable at a fixed rate with gold, 83 00:05:53,520 --> 00:05:56,680 Speaker 1: and you backed the lira a dent with gold reserves. 84 00:05:56,720 --> 00:05:59,599 Speaker 1: So the la literally is good as good as gold. 85 00:05:59,640 --> 00:06:03,920 Speaker 1: I think a thing I would stop the ham racking there, 86 00:06:04,279 --> 00:06:07,360 Speaker 1: Steve Stephen Hankey, with this focus of the Johns Hopkins University, 87 00:06:07,400 --> 00:06:10,680 Speaker 1: were thrilled to bring him to you today. Steve, there's 88 00:06:10,720 --> 00:06:14,720 Speaker 1: the mathematics of being log linear, a straight line on 89 00:06:14,800 --> 00:06:18,200 Speaker 1: a percent change. Why access and then things get ugly 90 00:06:18,320 --> 00:06:21,080 Speaker 1: and they curve, and then we go to the acclaimed 91 00:06:21,080 --> 00:06:24,760 Speaker 1: world of Professor Hanky, which is hyperbolas, which focuses at 92 00:06:24,839 --> 00:06:29,160 Speaker 1: moonshot think wheelbarrows of cash in Germany in World War Two. 93 00:06:29,320 --> 00:06:32,400 Speaker 1: Are any of these e M currencies on the edge 94 00:06:32,680 --> 00:06:37,720 Speaker 1: of hanky hyperbola? No, I don't think so, Tom, because 95 00:06:37,760 --> 00:06:41,280 Speaker 1: to get to those points, they're they're very rare. They're 96 00:06:41,320 --> 00:06:44,360 Speaker 1: they've actually only been fifty eight in the world history 97 00:06:44,520 --> 00:06:48,760 Speaker 1: that have gone to that hyperbola point and hit hyper 98 00:06:48,800 --> 00:06:54,000 Speaker 1: inflation where yes, inflation rates per month. And we have 99 00:06:54,120 --> 00:06:59,280 Speaker 1: one now, of course Venezezuela I'm major with high frequency 100 00:06:59,400 --> 00:07:02,960 Speaker 1: data that I'm plaction rate every day and it's running 101 00:07:03,000 --> 00:07:07,039 Speaker 1: sixty two thousand percent year every year, and the monthly 102 00:07:07,120 --> 00:07:10,520 Speaker 1: rate is a hundred seventy two. So this has been 103 00:07:10,560 --> 00:07:13,840 Speaker 1: going on since November of two thousand and sixteen. So 104 00:07:14,880 --> 00:07:19,360 Speaker 1: it hit, it hit your your point, Tom, and and 105 00:07:19,440 --> 00:07:23,520 Speaker 1: it's the only one that steve. What's the prescription here 106 00:07:23,520 --> 00:07:25,680 Speaker 1: for the I m F. I mean, you're one of 107 00:07:25,680 --> 00:07:28,600 Speaker 1: the giants in this racket, with the late Michael Moosa, 108 00:07:28,680 --> 00:07:32,720 Speaker 1: the late Rudy dorn Bush, Ken rogoff in the others 109 00:07:33,280 --> 00:07:35,960 Speaker 1: in the angst it's out there at Global Wall Street. 110 00:07:36,080 --> 00:07:39,560 Speaker 1: Is the institutions, particularly I m F can't come to 111 00:07:39,600 --> 00:07:43,200 Speaker 1: the rescue this time because of the new size of 112 00:07:43,400 --> 00:07:47,239 Speaker 1: em markets. Is that a valid worry or can leguard 113 00:07:47,320 --> 00:07:51,320 Speaker 1: get it done? I don't think size is the problem. 114 00:07:51,440 --> 00:07:54,520 Speaker 1: I think the I m F is just has wrong 115 00:07:54,600 --> 00:07:58,640 Speaker 1: headed thinking. I mean you look, for example, even at Venezezuela, 116 00:07:58,680 --> 00:08:01,400 Speaker 1: we just talked about the inflation. Right, you can measure 117 00:08:01,880 --> 00:08:05,440 Speaker 1: hyper inflations, and you can measure them very accurately. You 118 00:08:05,520 --> 00:08:10,000 Speaker 1: can't forecast the course or duration Tom of a of 119 00:08:10,040 --> 00:08:12,920 Speaker 1: a hyper inflation and the i m F just keeps 120 00:08:12,960 --> 00:08:18,000 Speaker 1: putting these inflation forecast out for Venezezuela. They they're a joke, 121 00:08:18,440 --> 00:08:23,360 Speaker 1: complete complete revelation of the incompetence of the I m F. 122 00:08:23,600 --> 00:08:26,520 Speaker 1: They say inflation is going to be a million percent 123 00:08:27,120 --> 00:08:29,120 Speaker 1: by the end of the year in Venezuela. And of 124 00:08:29,160 --> 00:08:33,839 Speaker 1: course the press, like good stenographers, just repeat this nonsense. 125 00:08:33,880 --> 00:08:37,560 Speaker 1: I mean, you cannot forecast hyper inflation period, that's the 126 00:08:37,640 --> 00:08:40,920 Speaker 1: end of the story. You can measure it very very accurately, 127 00:08:41,320 --> 00:08:46,239 Speaker 1: can't forecast it. So the solution on these exchange rate regimes, 128 00:08:46,559 --> 00:08:50,760 Speaker 1: they're done in Argentina. Now Macree called the I m 129 00:08:50,880 --> 00:08:55,000 Speaker 1: F fireman in and and it's been a complete disaster. 130 00:08:56,400 --> 00:08:59,280 Speaker 1: Everything has collapsed since the I m F has come down. 131 00:08:59,520 --> 00:09:02,959 Speaker 1: And mac Cree doesn't realize. I don't know why he 132 00:09:03,080 --> 00:09:06,440 Speaker 1: called the i m F because in two thousand and one, 133 00:09:06,600 --> 00:09:11,280 Speaker 1: remember we had the I m F suspending the program 134 00:09:11,280 --> 00:09:16,240 Speaker 1: to UH Argentina and this was Kohler was the manager 135 00:09:16,360 --> 00:09:20,080 Speaker 1: director then and and and I am at basically double 136 00:09:20,160 --> 00:09:26,680 Speaker 1: crossed Argentina and the complete meltdown during the crisis and 137 00:09:26,760 --> 00:09:30,040 Speaker 1: the huge bank runds in November of two thousand one. 138 00:09:31,120 --> 00:09:33,520 Speaker 1: I m F. We're gonna run out of time. I 139 00:09:33,520 --> 00:09:35,600 Speaker 1: gotta cut Steve hank you off, which is you gotta 140 00:09:35,640 --> 00:09:37,920 Speaker 1: talk about the Brazilian I do. But we're gonna We're 141 00:09:37,920 --> 00:09:40,079 Speaker 1: gonna come. We're gonna get Steve Hankey on as much 142 00:09:40,120 --> 00:09:43,319 Speaker 1: as we can through this interesting e M time again. 143 00:09:43,400 --> 00:10:01,440 Speaker 1: He is at Johns Hopkins University. President Donald Trump, of course, 144 00:10:01,480 --> 00:10:05,400 Speaker 1: sitting down for an exclusive Oval Office interview with Bloomberg, 145 00:10:05,760 --> 00:10:09,240 Speaker 1: and the President covered a variety of topics, including the 146 00:10:09,320 --> 00:10:12,720 Speaker 1: Russia probe, as well as trade policy and when it 147 00:10:12,800 --> 00:10:16,160 Speaker 1: comes to the trade talks with the European Union, the 148 00:10:16,200 --> 00:10:20,560 Speaker 1: President said that the European unions offered to scrap tariffs 149 00:10:20,600 --> 00:10:27,360 Speaker 1: on US made automobiles is not enough. It's not good enough, no, 150 00:10:28,320 --> 00:10:30,320 Speaker 1: because they do a lot more auto business than we 151 00:10:30,320 --> 00:10:32,800 Speaker 1: will ever do. In other words, well, first of all, 152 00:10:33,160 --> 00:10:35,680 Speaker 1: it's not just tariffs. They also barriers up to our cars. 153 00:10:35,679 --> 00:10:38,600 Speaker 1: They have they'll take the barriers down and they'll charge 154 00:10:38,640 --> 00:10:40,480 Speaker 1: us no text. But it's not good enough because they 155 00:10:40,480 --> 00:10:45,520 Speaker 1: will always sell more cars. Their cars, their habits, their 156 00:10:45,600 --> 00:10:48,360 Speaker 1: consumer habits are to buying their cars, not to buying 157 00:10:48,360 --> 00:10:52,600 Speaker 1: our cars. In response, the European Commission President Jean Claude 158 00:10:52,679 --> 00:10:57,480 Speaker 1: Junker said that the European Union will retaliate if President 159 00:10:57,559 --> 00:11:02,319 Speaker 1: Trump raises tariffs on europe Pan autos, and that is 160 00:11:02,360 --> 00:11:04,080 Speaker 1: a good time to bring in a gentleman who had 161 00:11:04,080 --> 00:11:08,000 Speaker 1: a conversation with the president yesterday. Under the earl portrait 162 00:11:08,120 --> 00:11:11,920 Speaker 1: of Andrew Jackson, painted in eighteen thirty five at the 163 00:11:11,960 --> 00:11:17,000 Speaker 1: Resolute Desk are John Michael Fait in conversation with the President. John, 164 00:11:17,040 --> 00:11:18,920 Speaker 1: what was the energy like in the room away from 165 00:11:18,960 --> 00:11:22,480 Speaker 1: the formal portraits, in the important comments and the president? 166 00:11:22,800 --> 00:11:26,679 Speaker 1: What was the backstory as you entered the Oval Office. Well, 167 00:11:26,720 --> 00:11:29,280 Speaker 1: there's a lot of energy, almost of the March energy 168 00:11:29,360 --> 00:11:32,679 Speaker 1: is there is with you and Pim, but it's it's 169 00:11:32,840 --> 00:11:35,199 Speaker 1: Trump is I think the main thing which comes through 170 00:11:35,240 --> 00:11:37,240 Speaker 1: the President of the moment is that he is someone 171 00:11:37,280 --> 00:11:40,280 Speaker 1: who's in a sense of doubling down on Donald Trump. 172 00:11:40,320 --> 00:11:43,200 Speaker 1: You know, he is not Other people may look at 173 00:11:43,200 --> 00:11:45,559 Speaker 1: what's happening in the Oval Office and think he's got 174 00:11:45,600 --> 00:11:48,480 Speaker 1: problems with the mid terms, he's got problems with Mueller. 175 00:11:49,120 --> 00:11:52,640 Speaker 1: He's got people resigning from his internal kind of a 176 00:11:52,720 --> 00:11:55,760 Speaker 1: set of advisors. From his point of view, it's almost 177 00:11:55,800 --> 00:11:58,960 Speaker 1: the opposite. He gives himself a grade A plus. He 178 00:11:59,040 --> 00:12:01,960 Speaker 1: claims he has the best happened. As ever, he's forging 179 00:12:01,960 --> 00:12:05,080 Speaker 1: ahead on everything. You know, he's just persuaded Mexico to 180 00:12:05,160 --> 00:12:09,800 Speaker 1: do well, and Canada's next. And as you said in 181 00:12:09,840 --> 00:12:11,560 Speaker 1: the clip, you know he's now moving on to the 182 00:12:11,720 --> 00:12:14,120 Speaker 1: w g O and Europe. And actually, I think you 183 00:12:14,160 --> 00:12:17,120 Speaker 1: know there is a like all these people, many politicians 184 00:12:17,120 --> 00:12:19,600 Speaker 1: trying to spin you things, think Trump genuinely believed that 185 00:12:19,640 --> 00:12:24,199 Speaker 1: he's achieving these things. And the better or worst, that 186 00:12:24,320 --> 00:12:25,800 Speaker 1: is the world we live in. If we were to 187 00:12:25,800 --> 00:12:29,000 Speaker 1: write a Bloomberg quick take or something you helped invent 188 00:12:29,040 --> 00:12:32,880 Speaker 1: the fourteen page wonder in the Economist magazine, what what 189 00:12:33,120 --> 00:12:35,640 Speaker 1: we say would be the response of Europe, the response 190 00:12:35,679 --> 00:12:39,760 Speaker 1: of China, of Canada, of Mexico to all of his trade, 191 00:12:40,480 --> 00:12:43,640 Speaker 1: not hysteria, but just trade discourse. Do they just does 192 00:12:43,800 --> 00:12:46,840 Speaker 1: turn to the president and say no, Well, it's interesting 193 00:12:47,200 --> 00:12:50,600 Speaker 1: you talk to business people and there is one bit 194 00:12:50,840 --> 00:12:53,600 Speaker 1: of business people where most business people want him to 195 00:12:53,679 --> 00:12:56,960 Speaker 1: succeed a bit um. So for instance with China, you 196 00:12:57,000 --> 00:12:59,360 Speaker 1: talk to most European business people and they will say 197 00:12:59,520 --> 00:13:03,000 Speaker 1: it is it would be wonderful if Donald Trump could 198 00:13:03,040 --> 00:13:06,880 Speaker 1: get China to open up. Um, and you might also 199 00:13:06,920 --> 00:13:09,440 Speaker 1: talk to American and European people who say it would 200 00:13:09,440 --> 00:13:11,280 Speaker 1: be very good if there were a fewer trade barriers 201 00:13:11,320 --> 00:13:14,480 Speaker 1: between American Europe. But and this is a very big 202 00:13:14,520 --> 00:13:17,080 Speaker 1: butt at the very least, he's playing with fire with 203 00:13:17,160 --> 00:13:19,600 Speaker 1: these things, because most people would still say the w 204 00:13:19,760 --> 00:13:23,880 Speaker 1: t O is incredibly useful and having a multilateral forum 205 00:13:24,120 --> 00:13:26,360 Speaker 1: increases the amount of free trade all the way around 206 00:13:26,360 --> 00:13:29,280 Speaker 1: the world, generally to the benefit of America as well. 207 00:13:30,000 --> 00:13:33,199 Speaker 1: Um And obviously nobody wants the trans Atlantic trade war, 208 00:13:33,440 --> 00:13:36,920 Speaker 1: and the Chinese for the moment showing every sign of 209 00:13:36,960 --> 00:13:40,920 Speaker 1: wanting to match Donald Trump tariff for tariff, So it 210 00:13:41,000 --> 00:13:44,920 Speaker 1: is a slightly more nuanced picture than that either he 211 00:13:44,920 --> 00:13:47,760 Speaker 1: would present all for that matter, his foes and a 212 00:13:47,800 --> 00:13:49,959 Speaker 1: lot of business people, I think quietly under their breath, 213 00:13:50,000 --> 00:13:53,400 Speaker 1: were condemning the trade war whilst desperately hoping that he succeeds, 214 00:13:53,480 --> 00:13:56,719 Speaker 1: especially with the Chinese. John michaels Wade, I want to say, 215 00:13:56,800 --> 00:13:59,000 Speaker 1: leave it to an Englishman to teach us about our 216 00:13:59,040 --> 00:14:02,200 Speaker 1: own role in history in the United States. Sometimes it 217 00:14:02,240 --> 00:14:06,599 Speaker 1: takes someone from the outside to have a clear perspective. 218 00:14:07,280 --> 00:14:12,280 Speaker 1: You've interviewed many world leaders, do you view Donald Trump 219 00:14:12,360 --> 00:14:15,920 Speaker 1: is different? But yes, he is entirely different. Um. I 220 00:14:15,920 --> 00:14:19,560 Speaker 1: think there are many world leaders who will try tom 221 00:14:19,920 --> 00:14:22,040 Speaker 1: who will try to sort of spin things or try 222 00:14:22,040 --> 00:14:24,120 Speaker 1: to say they're doing better. You know, Donald Trump gives 223 00:14:24,160 --> 00:14:26,760 Speaker 1: more impression of being a He's a sort of train 224 00:14:26,880 --> 00:14:30,040 Speaker 1: heading in every direction at once, and even when he's 225 00:14:30,080 --> 00:14:33,520 Speaker 1: trying to restrain himself, he finds it very difficult, and 226 00:14:34,160 --> 00:14:37,040 Speaker 1: some cases he kind obloviates and goes past things. In 227 00:14:37,640 --> 00:14:40,160 Speaker 1: other cases he just says what he thinks. And I 228 00:14:40,160 --> 00:14:43,320 Speaker 1: think that is the better or worth again to keep 229 00:14:43,360 --> 00:14:46,320 Speaker 1: part of his appeal to people, because I think to 230 00:14:46,400 --> 00:14:49,320 Speaker 1: his base he's someone who tries to say how he 231 00:14:49,360 --> 00:14:51,960 Speaker 1: sees it, and that is that is worth something to him. 232 00:14:52,000 --> 00:14:53,880 Speaker 1: And I think to any extent that he tried to 233 00:14:53,920 --> 00:14:57,120 Speaker 1: bottle it up. Um, he's changed on that. If you 234 00:14:57,160 --> 00:14:59,320 Speaker 1: want an example of one area though, where he has 235 00:14:59,400 --> 00:15:02,920 Speaker 1: become slightly more disciplined, but you can see it in 236 00:15:02,960 --> 00:15:06,480 Speaker 1: his eyes that he's straining at it. It's the fed 237 00:15:06,680 --> 00:15:08,960 Speaker 1: I think he has sort of accepted, after a degree 238 00:15:09,000 --> 00:15:12,760 Speaker 1: of annoyance about the fact that he can't control the 239 00:15:12,760 --> 00:15:16,080 Speaker 1: Federal Reserve. He's now accepted that that's probably a good thing. 240 00:15:16,160 --> 00:15:18,360 Speaker 1: That is good that presidents can't do that, and he 241 00:15:18,480 --> 00:15:21,680 Speaker 1: was polite about j Powell, but you can sense even 242 00:15:21,680 --> 00:15:24,840 Speaker 1: then he wants to be able to run it. John 243 00:15:24,840 --> 00:15:26,840 Speaker 1: Michael Twaitt with us, John, I want to switch gears here, 244 00:15:26,840 --> 00:15:30,360 Speaker 1: and of course we're looking for an exclusive and lengthy 245 00:15:30,560 --> 00:15:33,560 Speaker 1: long read from John Michael Twayton Company Monday. So I 246 00:15:33,600 --> 00:15:37,080 Speaker 1: was thinking of Alexis to Tokeville when I was thinking 247 00:15:37,160 --> 00:15:39,560 Speaker 1: of having an Englishman talk about America. That would be 248 00:15:39,640 --> 00:15:41,800 Speaker 1: very good and I often have to I often have 249 00:15:41,840 --> 00:15:44,680 Speaker 1: to endure Tom Keene talking about prisons. I think, no, no, 250 00:15:44,840 --> 00:15:46,840 Speaker 1: we're going to Britain right now, and I know we've 251 00:15:46,840 --> 00:15:49,440 Speaker 1: got a long read feature coming out five thousand words 252 00:15:49,480 --> 00:15:54,880 Speaker 1: on Monday. Theresa made dancing her way across Africa. But 253 00:15:55,000 --> 00:15:58,520 Speaker 1: except for that, John, we need a Britain update. Would 254 00:15:58,560 --> 00:16:02,840 Speaker 1: you explain to me what the incentive is for anybody 255 00:16:03,000 --> 00:16:08,040 Speaker 1: in Europe to put up with your Brexit debate? What's 256 00:16:08,240 --> 00:16:12,320 Speaker 1: what's there incentive even to become engaged in this domestic 257 00:16:12,400 --> 00:16:16,960 Speaker 1: foolishness of your United Kingdom. Well, you've actually you're actually 258 00:16:17,000 --> 00:16:19,760 Speaker 1: asking the key question, because what is happening at the 259 00:16:19,800 --> 00:16:23,360 Speaker 1: moment as the Europeans have just let it be, There's 260 00:16:23,440 --> 00:16:26,800 Speaker 1: there's a slight sign over the past kind of ten 261 00:16:26,880 --> 00:16:30,840 Speaker 1: days that the Europeans have moved a bit. Macrons begun 262 00:16:30,920 --> 00:16:33,160 Speaker 1: to say, look, it's a bit silly if Britain just 263 00:16:33,200 --> 00:16:36,840 Speaker 1: crashes out of this thing. Um. It's already pretty clear 264 00:16:36,920 --> 00:16:40,720 Speaker 1: that most of the burden of Brexit will be carried 265 00:16:40,760 --> 00:16:44,440 Speaker 1: by Britain, but it isn't. It's also not entirely in 266 00:16:44,760 --> 00:16:48,040 Speaker 1: Europe's interest. In France's Britain's neighbor. A lot of its 267 00:16:48,040 --> 00:16:51,760 Speaker 1: trade comes through France. It's not in France's interest to 268 00:16:51,840 --> 00:16:54,960 Speaker 1: have a complete sort of disaster on his on his doorstep. 269 00:16:55,680 --> 00:16:59,760 Speaker 1: So from business people, from politicians a bit there's at 270 00:16:59,840 --> 00:17:03,800 Speaker 1: least slightly more willingness to come in. But you are 271 00:17:03,840 --> 00:17:07,359 Speaker 1: basically right that what has happened is that from the 272 00:17:07,400 --> 00:17:10,320 Speaker 1: British point of view, every day is dominated by Brexit 273 00:17:10,320 --> 00:17:12,720 Speaker 1: headlines and what it means, and this it means. He 274 00:17:12,800 --> 00:17:15,600 Speaker 1: will visit the people who run France or Germany or 275 00:17:15,640 --> 00:17:18,680 Speaker 1: Italy and it's something they think about once every two 276 00:17:18,680 --> 00:17:22,520 Speaker 1: months because they've been very happy leaving this with Michelle Barnier, 277 00:17:22,640 --> 00:17:27,960 Speaker 1: who is the European Commissions negotiator. Michael's way, it's like 278 00:17:28,000 --> 00:17:30,720 Speaker 1: a digital Maven. I'm watching Theresa May to her second 279 00:17:30,800 --> 00:17:34,600 Speaker 1: dance off the Independent video. Why don't we have that video? 280 00:17:34,760 --> 00:17:38,200 Speaker 1: I mean, thanks to the Independent for giving me background 281 00:17:38,200 --> 00:17:41,520 Speaker 1: briefing for it is an amazing video. I don't think 282 00:17:41,520 --> 00:17:44,320 Speaker 1: even I tried to work out that maybe some people 283 00:17:44,359 --> 00:17:52,040 Speaker 1: may feel sympathy for Theresa John does the Have we 284 00:17:52,200 --> 00:17:56,800 Speaker 1: lost the perspective that the balance of power in Europe 285 00:17:56,880 --> 00:18:01,520 Speaker 1: has changed and will change because of the exit from 286 00:18:01,560 --> 00:18:05,320 Speaker 1: the European Union. Yes, I think what is happening is 287 00:18:05,359 --> 00:18:08,760 Speaker 1: that there are two. If we've had a somewhat Anglo 288 00:18:08,920 --> 00:18:12,639 Speaker 1: anglocentric conversation said, I think there's any harm in saying 289 00:18:12,640 --> 00:18:15,160 Speaker 1: this is I think from an Anglo centric point of view. 290 00:18:15,960 --> 00:18:18,600 Speaker 1: People used to talk a bit vaguely about an Anglo 291 00:18:18,640 --> 00:18:23,760 Speaker 1: sphere where obviously America is the predominant partner and Britain 292 00:18:24,000 --> 00:18:27,960 Speaker 1: plays the secondary role. But together they're probably greater than 293 00:18:28,000 --> 00:18:31,000 Speaker 1: the some of their parts. That has always helped America 294 00:18:31,080 --> 00:18:33,800 Speaker 1: having somebody else who's willing to stick up for roughly 295 00:18:33,800 --> 00:18:37,480 Speaker 1: the same things. But firstly, the agenda which they're both 296 00:18:37,520 --> 00:18:41,560 Speaker 1: pushing things like generally free trade, opening up things. Well, 297 00:18:41,640 --> 00:18:46,840 Speaker 1: that is no longer the priority of Donald Trump. Certainly. Secondly, 298 00:18:46,880 --> 00:18:49,640 Speaker 1: you've got America withdrawing from some areas of the world, 299 00:18:49,680 --> 00:18:52,320 Speaker 1: not wanting to do things. And thirdly, who've got Britain 300 00:18:53,000 --> 00:18:56,240 Speaker 1: coming out of its main forum to influence people, which 301 00:18:56,320 --> 00:18:58,679 Speaker 1: was the European Union. And so I think from the 302 00:18:58,720 --> 00:19:03,159 Speaker 1: point of view of that Anglo message, which is to 303 00:19:03,200 --> 00:19:04,840 Speaker 1: want to build out too big, I think there has 304 00:19:04,880 --> 00:19:08,040 Speaker 1: been a retreat. And it matters enormously that if you 305 00:19:08,080 --> 00:19:11,880 Speaker 1: talk to American politicians, the most valuable thing about Britain 306 00:19:12,000 --> 00:19:15,000 Speaker 1: was that it was the kind of friendly to American 307 00:19:15,200 --> 00:19:18,800 Speaker 1: voice inside the U. I have to leave their gn Michaels, 308 00:19:18,960 --> 00:19:23,080 Speaker 1: thank you so much. Congratulations on the many themes of 309 00:19:23,119 --> 00:19:39,320 Speaker 1: your conversation with the President of the United States. Right 310 00:19:39,320 --> 00:19:42,080 Speaker 1: now we speak with CBS is Margaret Brennan, who has 311 00:19:42,119 --> 00:19:46,120 Speaker 1: a spirited face and Nation Sunday morning. Of course you'll 312 00:19:46,119 --> 00:19:49,160 Speaker 1: hear it on Bloomberg Radio Sunday two PM. I mean 313 00:19:49,200 --> 00:19:53,679 Speaker 1: that speaks to the noise of this August Margaret in 314 00:19:53,800 --> 00:19:58,440 Speaker 1: Washington to see Christia Friedland so abruptly exit to try 315 00:19:58,480 --> 00:20:01,680 Speaker 1: to get this discussion at done. It's not a boring August, 316 00:20:01,800 --> 00:20:04,919 Speaker 1: is it. No. I don't think there is such a 317 00:20:04,920 --> 00:20:07,800 Speaker 1: thing as a boring August with the Trump administration um 318 00:20:07,800 --> 00:20:10,880 Speaker 1: and certainly this push to get a deal by today, 319 00:20:11,000 --> 00:20:14,360 Speaker 1: by Friday, so that they can move forward with presenting 320 00:20:14,359 --> 00:20:18,040 Speaker 1: to Congress some kind of proposal to overhaul NAFTA is 321 00:20:18,080 --> 00:20:21,240 Speaker 1: something that many, like the president son in law Jard Kushner, 322 00:20:21,280 --> 00:20:23,879 Speaker 1: are really pushing for. The hope is that it would 323 00:20:23,880 --> 00:20:27,520 Speaker 1: lift from the political pressure both from Mexico ahead of 324 00:20:27,520 --> 00:20:30,040 Speaker 1: their inauguration of their new president and ahead of those 325 00:20:30,440 --> 00:20:34,040 Speaker 1: upcoming elections in Canada in twenty nineteen. It's not clear 326 00:20:34,080 --> 00:20:36,440 Speaker 1: if they can win that gamble. There's so many themes 327 00:20:36,480 --> 00:20:38,920 Speaker 1: to talk about, Margaret, including what we're going to see 328 00:20:38,920 --> 00:20:41,640 Speaker 1: in an hour in fifty five minutes on Capitol Hill 329 00:20:42,280 --> 00:20:45,640 Speaker 1: with the Senator from Arizona. But to stay on trade. 330 00:20:46,320 --> 00:20:50,640 Speaker 1: You have an experience of these negotiations, and I would 331 00:20:50,680 --> 00:20:59,600 Speaker 1: suggest it's an experience of complexity. Does this administration do complexity? Uh? 332 00:20:59,640 --> 00:21:03,879 Speaker 1: They do in the sense that there is a number 333 00:21:03,920 --> 00:21:07,720 Speaker 1: of people within the administration with varying different views as 334 00:21:07,720 --> 00:21:09,960 Speaker 1: to how all of this should end up. But it 335 00:21:10,080 --> 00:21:14,960 Speaker 1: seems like fundamentally on this issue of NAFTA UM, it 336 00:21:15,080 --> 00:21:17,359 Speaker 1: comes back to some of the very basics that have 337 00:21:17,480 --> 00:21:21,720 Speaker 1: always stuck the relationship, including, you know, coming to some 338 00:21:21,800 --> 00:21:25,000 Speaker 1: kind of compromise with Canada over how their dairy farmers 339 00:21:25,080 --> 00:21:29,040 Speaker 1: policies are are protected UM up there, and as well 340 00:21:29,040 --> 00:21:32,680 Speaker 1: as this dispute mechanism that continues to be a sticking 341 00:21:32,720 --> 00:21:36,200 Speaker 1: point within the administration. It does appear that the President 342 00:21:36,280 --> 00:21:38,600 Speaker 1: has made a push, with the urging of his son 343 00:21:38,640 --> 00:21:41,359 Speaker 1: in law, Jared Kushner, to get the U. S. Trade 344 00:21:41,359 --> 00:21:45,280 Speaker 1: Representative to make some move to make compromise possible on NAFTA. UH. 345 00:21:45,400 --> 00:21:48,480 Speaker 1: The question, of course, is will the Canadians get on 346 00:21:48,560 --> 00:21:50,680 Speaker 1: board with what Mexico and the US have agreed to 347 00:21:50,760 --> 00:21:56,000 Speaker 1: at this point, Margaret, President Donald Trump has definitely boasted 348 00:21:56,040 --> 00:21:58,120 Speaker 1: of the performance of not only the U. S. Stock 349 00:21:58,160 --> 00:22:01,560 Speaker 1: market but the US economy. Do you get the sense 350 00:22:01,600 --> 00:22:05,280 Speaker 1: from talking to your sources in Washington that the political 351 00:22:05,400 --> 00:22:11,119 Speaker 1: establishment also feels that level of enthusiasm for American economic 352 00:22:11,200 --> 00:22:16,200 Speaker 1: power visa VI these trade negotiations. They have enthusiasm about 353 00:22:16,200 --> 00:22:19,200 Speaker 1: the economic power, but they've got great anxiety that all 354 00:22:19,200 --> 00:22:23,919 Speaker 1: of that could start being damaged or dissipate, particularly towards 355 00:22:23,920 --> 00:22:26,800 Speaker 1: the end of September as some of those retaliatory tariffs 356 00:22:26,840 --> 00:22:31,200 Speaker 1: start to bite in the heartland. Um, And there's really 357 00:22:31,240 --> 00:22:33,800 Speaker 1: no you know, even though you see these glimmers of 358 00:22:33,840 --> 00:22:38,240 Speaker 1: hope with say Europe or Canada and Mexico on potential 359 00:22:38,280 --> 00:22:42,400 Speaker 1: trade negotiations or even deals, the Chinese are such a 360 00:22:42,480 --> 00:22:46,879 Speaker 1: different group of negotiators and really I'm not hearing any 361 00:22:47,320 --> 00:22:50,520 Speaker 1: momentum on that front. And that is the trade dispute 362 00:22:50,520 --> 00:22:54,040 Speaker 1: that really could bite, And so there is anxiety around that. 363 00:22:54,080 --> 00:22:57,320 Speaker 1: There's this urge among Republicans to say, get something done 364 00:22:57,320 --> 00:23:00,840 Speaker 1: on trade where we can stand behind you, uh, you know, 365 00:23:01,359 --> 00:23:05,320 Speaker 1: uh and stand with you against China. But so far, um, 366 00:23:05,359 --> 00:23:07,359 Speaker 1: there's very little hope. And you heard that from the 367 00:23:07,400 --> 00:23:11,200 Speaker 1: President just this week, blaming China for what he says 368 00:23:11,280 --> 00:23:14,480 Speaker 1: is diplomacy faltering with North Korea. Margaret tell us about 369 00:23:14,480 --> 00:23:19,199 Speaker 1: Face the Nation Sunday mornings. We'll be tracking and continuing 370 00:23:19,240 --> 00:23:22,680 Speaker 1: to report on these services here in Washington for Senator 371 00:23:22,800 --> 00:23:26,119 Speaker 1: John McCain, and we will be speaking to former Secretary 372 00:23:26,119 --> 00:23:29,280 Speaker 1: of State and former Senator John Kerry this Sunday, who's 373 00:23:29,280 --> 00:23:31,440 Speaker 1: got a brand new book out. He spent a lot 374 00:23:31,480 --> 00:23:33,240 Speaker 1: of time with John McCain, even though the two of 375 00:23:33,280 --> 00:23:36,240 Speaker 1: them were opposite sides of the aisle and had very 376 00:23:36,280 --> 00:23:39,520 Speaker 1: different perspectives. You know, John Carey rocketed to fame as 377 00:23:39,560 --> 00:23:43,920 Speaker 1: a war protester, John McCain a prisoner of that war, 378 00:23:44,320 --> 00:23:48,159 Speaker 1: and the two found common cause in the nineties to say, 379 00:23:48,240 --> 00:23:51,680 Speaker 1: let's make peace, let's help find uh those missing in 380 00:23:51,800 --> 00:23:55,520 Speaker 1: action and use that toe hole to establish diplomatic relations 381 00:23:55,560 --> 00:23:58,879 Speaker 1: between the US and Vietnam. It's really an extraordinary story, 382 00:23:59,400 --> 00:24:02,200 Speaker 1: and and Terry tells us about that. Michael Brennan, thank 383 00:24:02,200 --> 00:24:04,280 Speaker 1: you so much. Of course, you can see Face a 384 00:24:04,400 --> 00:24:08,080 Speaker 1: Nation on CBS. Do that Sunday morning. You can listen 385 00:24:08,119 --> 00:24:10,639 Speaker 1: to Face the Nation Bloomberg Radio Sunday two PM in 386 00:24:10,640 --> 00:24:13,600 Speaker 1: New York, Washington, d C. And now Bloomberg one or 387 00:24:13,600 --> 00:24:17,960 Speaker 1: six one Boston, Newburyport. Face the Nation this Sunday at 388 00:24:18,000 --> 00:24:35,280 Speaker 1: two I'm Bloomberg Radio. We digress And if you go 389 00:24:35,359 --> 00:24:39,360 Speaker 1: to the Point Sky website Brian Kelly's invention, you will 390 00:24:39,400 --> 00:24:43,760 Speaker 1: find it a wonderfully eclectic set of articles. Mike or 391 00:24:43,800 --> 00:24:47,680 Speaker 1: Not is out moments ago with an article on how 392 00:24:47,720 --> 00:24:51,280 Speaker 1: they figure out what the flight path will be for 393 00:24:51,400 --> 00:24:54,399 Speaker 1: you when you go over oceans, just as that is 394 00:24:54,480 --> 00:24:57,440 Speaker 1: one idea of the richness of this. Joining us here 395 00:24:57,480 --> 00:24:59,840 Speaker 1: on a Labor Day weekend as we all traveled. Julian 396 00:25:00,080 --> 00:25:05,000 Speaker 1: Hell who was with the points uh Guy website, Julian, 397 00:25:05,200 --> 00:25:08,879 Speaker 1: just congratulations on what your website does in terms of 398 00:25:08,920 --> 00:25:13,280 Speaker 1: eclectic travel. But I've got one arch question, when does 399 00:25:13,320 --> 00:25:16,760 Speaker 1: this all end? There's been articles that JP Morgan is 400 00:25:16,880 --> 00:25:20,800 Speaker 1: overwhelmed by the success of their sapphire program. I'm sure 401 00:25:20,840 --> 00:25:24,200 Speaker 1: there's others like JP Morgan because we're all doing this, 402 00:25:24,400 --> 00:25:26,679 Speaker 1: we're all reading you guys, we're all trying to be 403 00:25:26,720 --> 00:25:29,679 Speaker 1: as smart about the use of the miles. Do you 404 00:25:29,720 --> 00:25:32,200 Speaker 1: guys feel like this is something where at some point 405 00:25:32,280 --> 00:25:36,600 Speaker 1: the banks are just gonna say no. You know, it's 406 00:25:36,640 --> 00:25:42,040 Speaker 1: a It's a good question because collecting travel rewards, especially 407 00:25:42,040 --> 00:25:45,520 Speaker 1: through credit cards, is a bigger business than ever, and 408 00:25:45,720 --> 00:25:50,560 Speaker 1: consumers are more educated than ever. Just last quarter, Chase 409 00:25:50,640 --> 00:25:55,119 Speaker 1: actually had over three hundred million dollars in unanticipated redemptions 410 00:25:55,600 --> 00:25:59,760 Speaker 1: by customers were using their points wiser than they otherwise expected. 411 00:25:59,800 --> 00:26:03,840 Speaker 1: So obviously it's partly part of the economic cycle in 412 00:26:03,920 --> 00:26:06,159 Speaker 1: general right now. We're at the height of it, and 413 00:26:06,160 --> 00:26:10,280 Speaker 1: credit card companies are doing great overall. Whether that will 414 00:26:10,400 --> 00:26:13,320 Speaker 1: change when things turn down, it is a possibility. But 415 00:26:13,800 --> 00:26:16,760 Speaker 1: on the other hand, consumers are just into travel, they're 416 00:26:16,840 --> 00:26:20,920 Speaker 1: into loyalty points. We certainly don't see the interests decreasing 417 00:26:20,920 --> 00:26:24,520 Speaker 1: anytime soon. Julian, how many miles a year do you fly? 418 00:26:26,400 --> 00:26:30,640 Speaker 1: I personally fly over a hundred thousand miles a year. Uh, 419 00:26:30,680 --> 00:26:33,960 Speaker 1: And that's actually a small compared to some of my 420 00:26:34,520 --> 00:26:36,720 Speaker 1: colleagues at the Points Guy. Some of them fly over 421 00:26:36,760 --> 00:26:39,000 Speaker 1: two hundred thousand miles a year. And I have to 422 00:26:39,040 --> 00:26:41,199 Speaker 1: tell you it is a lot of time on a plane, 423 00:26:41,240 --> 00:26:44,520 Speaker 1: but a lot of times that we are flying up front, 424 00:26:44,600 --> 00:26:47,040 Speaker 1: if you will, because we're reviewing business class in first 425 00:26:47,040 --> 00:26:54,640 Speaker 1: class cabins, it is a different experience. It's when you're 426 00:26:54,680 --> 00:26:58,199 Speaker 1: flying up front. The the upfront cabins, while economy in 427 00:26:58,240 --> 00:27:00,880 Speaker 1: the back has been worse than than the size, seat 428 00:27:00,960 --> 00:27:03,880 Speaker 1: sizes are smaller than ever. Upfront, the story is very 429 00:27:03,920 --> 00:27:07,840 Speaker 1: different where airlines are now competing for customers based on 430 00:27:08,080 --> 00:27:12,760 Speaker 1: luxury and comfort. So flying in business or first especially internationally, 431 00:27:12,840 --> 00:27:15,560 Speaker 1: is a whole different experience than it was even five 432 00:27:15,640 --> 00:27:18,600 Speaker 1: years ago. All right, Well, help Tom get all the 433 00:27:18,640 --> 00:27:22,520 Speaker 1: business class that he deserves. What kind of cards should 434 00:27:22,600 --> 00:27:25,160 Speaker 1: he be using and does he have to use more 435 00:27:25,200 --> 00:27:30,200 Speaker 1: than one card? Ideally he should be using more than 436 00:27:30,240 --> 00:27:34,479 Speaker 1: one card. And that's because to maximize your frequent flyer 437 00:27:34,560 --> 00:27:37,080 Speaker 1: points and miles, you want to be using a card 438 00:27:37,160 --> 00:27:41,520 Speaker 1: that earns bonus points on specific categories and then pick 439 00:27:41,640 --> 00:27:45,040 Speaker 1: that the right card out of your wallets, depending on 440 00:27:45,080 --> 00:27:47,040 Speaker 1: where you are. So if you've got saying but none 441 00:27:47,080 --> 00:27:51,840 Speaker 1: of the cards actually pay for tuition for tuition, it's 442 00:27:51,840 --> 00:27:55,680 Speaker 1: a little trickier. We do actually have a few stories 443 00:27:55,720 --> 00:27:58,560 Speaker 1: on the points go on how to maximize points when 444 00:27:58,600 --> 00:28:01,359 Speaker 1: you're paying for tuition, So Tom, you know, we you 445 00:28:01,400 --> 00:28:04,440 Speaker 1: can check those out. But when you're at a restaurant, 446 00:28:04,440 --> 00:28:05,840 Speaker 1: you want to make sure you use a card that's 447 00:28:05,880 --> 00:28:09,960 Speaker 1: getting bonus points, and restaurants you're shopping groceries, you want 448 00:28:10,000 --> 00:28:12,760 Speaker 1: to use the groceries card. Let's get back to one 449 00:28:12,760 --> 00:28:15,280 Speaker 1: of the news items of the moment, which is everybody 450 00:28:15,320 --> 00:28:18,120 Speaker 1: wants to do longer flights, which to me screams top 451 00:28:18,119 --> 00:28:20,760 Speaker 1: of the market. And whether it's Sydney to New York 452 00:28:20,840 --> 00:28:23,399 Speaker 1: or you know, you can name the long distance flight 453 00:28:23,960 --> 00:28:28,400 Speaker 1: did the airlines have the responsibility to not over expand 454 00:28:28,440 --> 00:28:33,360 Speaker 1: now like they've done in every other cycle before. That 455 00:28:33,560 --> 00:28:37,359 Speaker 1: is the question, because every other cycle, as you said, 456 00:28:37,640 --> 00:28:40,680 Speaker 1: the airlines have gone too far, too many flights, too 457 00:28:40,720 --> 00:28:43,960 Speaker 1: many seats, and it ends up being an oversupply and 458 00:28:44,040 --> 00:28:49,080 Speaker 1: non enomb Deman. Qantas is talking about this uh new 459 00:28:49,080 --> 00:28:52,360 Speaker 1: possible flight from Sydney to London, which would be over 460 00:28:52,440 --> 00:28:55,320 Speaker 1: ten thousand miles, the longest non stop in the world 461 00:28:55,360 --> 00:28:58,840 Speaker 1: if could happened now, the aircraft currently don't exist to 462 00:28:59,000 --> 00:29:03,240 Speaker 1: do that distance call detailed already right here, small detail, 463 00:29:03,600 --> 00:29:06,000 Speaker 1: but Airbus and Bowing are both working on versions of 464 00:29:06,080 --> 00:29:10,320 Speaker 1: their aircraft that could do it. Qantas in particular has 465 00:29:10,960 --> 00:29:14,960 Speaker 1: has this idea that they're going to do these ultra 466 00:29:15,080 --> 00:29:18,880 Speaker 1: long haul routes in an effort to when business. They 467 00:29:18,920 --> 00:29:21,400 Speaker 1: think they have the business model for it. It is. 468 00:29:21,560 --> 00:29:24,360 Speaker 1: It's a lot of resources into these very long haul 469 00:29:24,440 --> 00:29:27,560 Speaker 1: flights and whether it works is yet to me. I 470 00:29:27,720 --> 00:29:31,160 Speaker 1: noticed Pam American, I think just took out Chicago Shanghai. 471 00:29:31,400 --> 00:29:33,440 Speaker 1: You know they've got three or four choices, yes, but 472 00:29:33,520 --> 00:29:37,120 Speaker 1: they took one of them. Julian low cost carriers like 473 00:29:37,440 --> 00:29:45,320 Speaker 1: Norwegian Wow, tell us about the way, tell us about 474 00:29:45,480 --> 00:29:49,200 Speaker 1: low cost carriers, because I've had several people tell me 475 00:29:49,920 --> 00:29:54,600 Speaker 1: it works, and it works really well. You know, if 476 00:29:54,680 --> 00:29:58,000 Speaker 1: you from a passenger perspective, as long as you know 477 00:29:58,200 --> 00:30:00,360 Speaker 1: what you are getting into that when you book a 478 00:30:00,440 --> 00:30:04,040 Speaker 1: ticket on a low cost carrier, the ticket price is 479 00:30:04,160 --> 00:30:07,160 Speaker 1: not necessarily the end of the story. It may be 480 00:30:07,240 --> 00:30:10,360 Speaker 1: a very low price on the actual air fare, but 481 00:30:10,440 --> 00:30:12,960 Speaker 1: you've got to be aware that you may get charged extra, 482 00:30:13,400 --> 00:30:16,400 Speaker 1: not just for bags, but but certainly for meals, even 483 00:30:16,480 --> 00:30:19,280 Speaker 1: on international flights. Yeah, but okay, but we're talking like 484 00:30:19,440 --> 00:30:23,760 Speaker 1: three d bucks. The fly from continental Europe to l A. 485 00:30:24,920 --> 00:30:28,640 Speaker 1: It is amazing and it's it's low. The airfares right 486 00:30:28,720 --> 00:30:31,600 Speaker 1: now have are lower than they ever have been, especially 487 00:30:31,680 --> 00:30:35,560 Speaker 1: to Europe, even transcon from New York to l A. 488 00:30:36,440 --> 00:30:39,280 Speaker 1: When Jet Blue came in with Mint, their Mint products, 489 00:30:39,520 --> 00:30:42,959 Speaker 1: they drove the prices down, even of the first class experience. 490 00:30:43,080 --> 00:30:46,120 Speaker 1: So it is a great time from a consumer standpoint 491 00:30:46,240 --> 00:30:50,400 Speaker 1: to fly. There is uh, there are clouds on the horizon. 492 00:30:50,480 --> 00:30:53,440 Speaker 1: With the price of oil being higher now than it's 493 00:30:53,440 --> 00:30:55,400 Speaker 1: been over the last few years, that's gonna put a 494 00:30:55,520 --> 00:30:59,479 Speaker 1: pinch on some of these revenues. Sorry, some of these 495 00:30:59,520 --> 00:31:02,720 Speaker 1: expects is for the airline. I want to see what happened. 496 00:31:02,760 --> 00:31:06,520 Speaker 1: I want to circle back finally here, uh Julian to 497 00:31:06,920 --> 00:31:10,160 Speaker 1: the success that Chase has had. Do the other banks 498 00:31:10,320 --> 00:31:14,240 Speaker 1: want to be like Chase? Or are they learning from 499 00:31:14,400 --> 00:31:16,920 Speaker 1: Chase that they really don't want to go there because 500 00:31:16,960 --> 00:31:20,800 Speaker 1: of the huge expense of redemption. You know, It's it's 501 00:31:20,800 --> 00:31:23,440 Speaker 1: a little bit of a mixed bag because Chase, of course, 502 00:31:23,560 --> 00:31:28,240 Speaker 1: with its Chase Fire Reserve product that was extraordinarily popular 503 00:31:28,920 --> 00:31:31,280 Speaker 1: when it first came out, and they've had really good 504 00:31:31,360 --> 00:31:35,920 Speaker 1: retentions on that card, was a direct competitor to American Express, 505 00:31:36,280 --> 00:31:39,400 Speaker 1: who had their own Platinum card, which was a high 506 00:31:39,520 --> 00:31:43,560 Speaker 1: tier travel benefits card. So and and as a result 507 00:31:43,560 --> 00:31:45,959 Speaker 1: of American Express has felt the need to improve their 508 00:31:46,000 --> 00:31:48,880 Speaker 1: Platinum card. So there certainly is competition there. On the 509 00:31:49,000 --> 00:31:52,960 Speaker 1: other hand, where's Wells Fargo is an example. Yeah, Wells 510 00:31:53,000 --> 00:31:56,080 Speaker 1: Fargo just came out with a new propel Amex card, 511 00:31:56,360 --> 00:31:58,800 Speaker 1: but it's aimed at a very different segment of the market. 512 00:31:58,840 --> 00:32:01,960 Speaker 1: It's a no annual fee card. So the credit card 513 00:32:01,960 --> 00:32:05,160 Speaker 1: issuers have had to improve their products to compete. But 514 00:32:05,320 --> 00:32:08,520 Speaker 1: they're aiming for different segments of the market. This has 515 00:32:08,560 --> 00:32:10,880 Speaker 1: been wonderful. Julian and Kill thank you so much, greatly 516 00:32:10,920 --> 00:32:15,560 Speaker 1: appreciate it. With Brian Kelly over at the Points Guy website. 517 00:32:23,280 --> 00:32:27,360 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 518 00:32:27,560 --> 00:32:32,840 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 519 00:32:32,920 --> 00:32:37,120 Speaker 1: platform you prefer. I'm on Twitter at Tom Keane before 520 00:32:37,200 --> 00:32:41,400 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg Radio.