WEBVTT - Surveillance: Beginning to See Slowdown in Banking, Hintz Says 0:00:00.320 --> 0:00:04.160 Who you put your trust in matters. Investors have put 0:00:04.200 --> 0:00:07.640 their trust in independent registered investment advisors to the tune 0:00:07.640 --> 0:00:12.240 of four trillion dollars. Why learn more and find your 0:00:12.240 --> 0:00:27.960 independent advisor dot com. Welcome to the Bloomberg Surveillance Podcast. 0:00:28.360 --> 0:00:32.040 I'm Tom Keene with David Gura. Daily we bring you 0:00:32.120 --> 0:00:37.120 insight from the best in economics, finance, investment, and international relations. 0:00:37.560 --> 0:00:42.159 Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot com, and 0:00:42.200 --> 0:00:50.280 of course on the Bloomberg. A bevy of banking news 0:00:51.120 --> 0:00:55.040 this week a bebby. We've got the change in leadership 0:00:55.080 --> 0:00:58.080 at Wells Fargo of course announced yesterday, Deutsche Banks drama, 0:00:58.120 --> 0:01:01.040 the wrangling over its legal situation with the Department of 0:01:01.040 --> 0:01:03.200 Justice continuing, and then of course burnings out This morning, 0:01:03.200 --> 0:01:05.480 Tom from three the big banks, including Wells. We'll hear 0:01:05.520 --> 0:01:07.960 from City Group coming up at JP Morgan releasing its 0:01:08.000 --> 0:01:11.600 quarters report just minutes ago, the biggest US bank. Let 0:01:11.600 --> 0:01:13.480 me get that stuck up here right now. We had 0:01:13.480 --> 0:01:16.280 it before, a little bit of a lift, but uh, Christine, 0:01:16.280 --> 0:01:18.800 areper quite impressive. I was blown away by the thirteen 0:01:18.920 --> 0:01:23.199 percent r OE return on inequity. We'll have some chat 0:01:23.240 --> 0:01:26.400 on that here with Mr Hints. Brad Hints is at 0:01:26.440 --> 0:01:29.520 New York University of course years covering the banking and 0:01:29.560 --> 0:01:34.720 financial industry with Sanford Bernstein Professor n's good morning, Hi, 0:01:34.880 --> 0:01:36.600 how are you doing well? I think I'm good. I 0:01:36.600 --> 0:01:39.600 don't know how. Jamie Diamond's doing well here on ACCLAIM 0:01:39.680 --> 0:01:44.240 press conference and UH analyst calls as well. How badly 0:01:44.319 --> 0:01:49.560 does Mr Diamond and other bankers need a steeper yield curve? Well, 0:01:49.640 --> 0:01:52.920 it sounds h it sounds a couple of problems, right, 0:01:53.040 --> 0:01:55.200 It's not just steepness. If you notice the you'ld curve 0:01:55.240 --> 0:01:58.200 actually moved up, so it's wait, it actually went up 0:01:58.240 --> 0:02:02.920 across the entire curve. Um. But steepness will help them 0:02:03.040 --> 0:02:05.400 on their investment portfolio. Right now. You know I have this, 0:02:05.720 --> 0:02:08.400 I've got an investment portfolio. It's rolling off. I've got 0:02:08.520 --> 0:02:11.320 yield on that and port saying as it rolls off, 0:02:11.320 --> 0:02:13.959 my net interest gets squeezed. If if rates are low 0:02:14.000 --> 0:02:17.000 and the yield curve is is low and flat, as 0:02:17.040 --> 0:02:19.760 it starts to steepen, that solves one of the net 0:02:19.840 --> 0:02:23.520 interest margin problems. Of course, as the front end moves up, 0:02:23.720 --> 0:02:26.920 that helps my That helps my pricing in terms of loans, 0:02:27.000 --> 0:02:30.120 so that also helps me. So you know, the you know, 0:02:30.280 --> 0:02:33.520 the market has been focusing on the poor banks, you know, 0:02:33.560 --> 0:02:36.799 with their interest margins getting squeezed. This you know, if 0:02:36.840 --> 0:02:39.000 the if the moves are the right way, you know, 0:02:39.040 --> 0:02:40.680 it will take a lot of that pressure off them. 0:02:40.880 --> 0:02:43.960 They bring in a dollar, they bring in thirty five 0:02:44.080 --> 0:02:49.240 cents in operating income, which generates twenty two cents in 0:02:49.400 --> 0:02:53.280 net income. I would suggest, professor hints that borders on 0:02:53.400 --> 0:02:58.839 cartel return. That's why are the banks so beleaguered If 0:02:58.840 --> 0:03:01.120 I'm making twenty two it's on the dollar down at 0:03:01.160 --> 0:03:05.000 the bottom bottom bottom line. Well, it's a lot better 0:03:05.080 --> 0:03:07.680 than it, uh that that than we've seen in the 0:03:07.880 --> 0:03:11.360 in the past. And uh and and you know the 0:03:11.360 --> 0:03:14.200 banks have been struggling to beat their cost of capital. 0:03:14.680 --> 0:03:19.200 Uh you know the you know, with with luck, you know, 0:03:19.400 --> 0:03:22.560 this will be a somewhat better uh time for the 0:03:22.880 --> 0:03:25.200 for them going forward if rates continue to move in 0:03:25.200 --> 0:03:29.000 their direction. You know, it's you know, the third quarters 0:03:29.000 --> 0:03:33.640 are always you know, seasonally slower because because the markets 0:03:33.680 --> 0:03:35.720 tend to slow down in the summertime, right, So when 0:03:35.720 --> 0:03:37.880 you sort of look on quarter to quarter comparisons, at 0:03:37.960 --> 0:03:42.600 least on the investment banking site. Look a little bit funny, right, 0:03:42.920 --> 0:03:45.360 And and David, I've got to compare and contrast her 0:03:45.440 --> 0:03:49.720 Bank of America operating income is twenty seven, maybe twenty 0:03:49.800 --> 0:03:53.040 nine cents on the dollar and JP Morgan is thirty 0:03:53.080 --> 0:03:56.960 five or thirty six. That's that's in the game of finance. 0:03:57.000 --> 0:04:00.520 That's a big disparity in terms of profitability. Pulling back 0:04:00.560 --> 0:04:04.840 your fixed income trading at CHAP year over year four 0:04:04.840 --> 0:04:07.120 point three billion dollars, about a billion more than one 0:04:07.120 --> 0:04:10.600 analysts were expecting. Professor put that in some broader context 0:04:10.680 --> 0:04:12.480 for us. You're going into earnings today, a lot of 0:04:12.480 --> 0:04:14.400 people saying this is what to look for, look for 0:04:14.400 --> 0:04:18.159 the fixed income currencies and commodities. Sure, and you know 0:04:18.200 --> 0:04:20.680 what we saw over the summer was, you know, there's 0:04:20.680 --> 0:04:23.560 been you know that we've had very good credit uh 0:04:23.600 --> 0:04:26.760 in the credit markets, good volumes in there, and we've 0:04:27.040 --> 0:04:29.800 we've also had some positive movements in terms of credit 0:04:29.839 --> 0:04:33.159 spreads coming in the you know, Brexit um and you 0:04:33.200 --> 0:04:35.640 know caused a lot of volatilities. That's going to help 0:04:35.680 --> 0:04:38.279 in the gubbies and the sovereign side, and also going 0:04:38.320 --> 0:04:40.360 to pick it up in foreign exchange, So you know 0:04:40.640 --> 0:04:44.120 that's going to help the summer. So when you look 0:04:44.160 --> 0:04:46.400 at it, you know, last summer versus this summer, the 0:04:46.480 --> 0:04:48.760 year over a year, it's gonna look pretty good. When 0:04:48.760 --> 0:04:51.120 you start looking at some of the bank's quarter over quarter, 0:04:51.480 --> 0:04:53.280 you're not going to see the same thing, but you're 0:04:53.279 --> 0:04:55.560 going to have to recognize that. You know, summer is 0:04:55.560 --> 0:04:58.480 always slowed. This was a good summer for fixed income, 0:04:58.839 --> 0:05:00.560 and you know that's going to be a story that 0:05:00.600 --> 0:05:03.039 we're going to hear from these guys. The other issue 0:05:03.080 --> 0:05:05.280 you're going to hear is is investment banking right, and 0:05:05.360 --> 0:05:08.880 investment banking tends to be you know this this was 0:05:09.320 --> 0:05:13.040 we're beginning to see a slowdown and investment banking. We're 0:05:13.040 --> 0:05:15.279 talking with Axel Murk, the the co found of course 0:05:15.279 --> 0:05:17.839 of Merk Investments. We were talking about money market fund 0:05:17.880 --> 0:05:20.480 regulations that go into effect today. What effect do you 0:05:20.520 --> 0:05:22.320 think that's going to have here on on banks like 0:05:22.400 --> 0:05:30.200 JP Morgan um not Uh, everyone has seen that coming. Um. 0:05:30.240 --> 0:05:32.479 So you know, we've seen an adjustment in terms of 0:05:32.520 --> 0:05:35.600 issuance of commercial paper and that's actually affecting a lot 0:05:35.640 --> 0:05:38.800 in terms of the treasurers who who do financing. The 0:05:38.839 --> 0:05:41.720 banks are going to have have adjusted to that, and 0:05:41.760 --> 0:05:43.599 so you're going to see you know, where you do 0:05:43.680 --> 0:05:47.560 your financing, the tenor that you do for your financing. Um, 0:05:47.920 --> 0:05:50.960 it's it's not a surprise. I think most of the 0:05:51.000 --> 0:05:54.080 CFOs and treasures in America are are sort of well 0:05:54.080 --> 0:05:57.680 aware on this one. The concerns about credit persist here. 0:05:58.040 --> 0:06:01.760 On previous conference calls a lot of concerning consternation about 0:06:02.560 --> 0:06:05.479 energy credit in particular. Looking at the report that we 0:06:05.560 --> 0:06:09.680 got today, how much concern persists when it comes to 0:06:09.800 --> 0:06:15.200 credit and energy. Um, Well, we've seen the the the 0:06:15.440 --> 0:06:20.440 the oil prices recover. That doesn't solve credit problems in 0:06:20.520 --> 0:06:22.960 terms of troubled companies. It takes a while for these 0:06:22.960 --> 0:06:24.880 things to work their way through. So it's going to 0:06:24.920 --> 0:06:27.640 be a continuous It'll be people will ask questions, right, 0:06:27.680 --> 0:06:32.520 they'll they'll push on it. But the the the the 0:06:32.600 --> 0:06:37.680 immediacy is now gone. Right. The people we we we 0:06:37.800 --> 0:06:40.840 know there was a fire there, we're watching it. Right. 0:06:41.040 --> 0:06:43.640 It was when we saw smoke that the that the 0:06:43.680 --> 0:06:47.360 equity analysts began to get get very troubled. I want 0:06:47.360 --> 0:06:49.800 to go through four mumbo jumbo ideas we can do 0:06:49.839 --> 0:06:52.360 that with professor hints, I'm in the back of the 0:06:52.400 --> 0:06:55.680 class running a sea and Professor I got to get 0:06:55.680 --> 0:07:00.480 to a B plus fast fortress principles Tan your book 0:07:00.560 --> 0:07:04.480 fifty one three cents up eight percent, way out front 0:07:04.880 --> 0:07:10.320 of nominal GDP basil three tier one capital h billion 0:07:10.680 --> 0:07:16.480 eleven point nine firm s l R. I have no 0:07:16.560 --> 0:07:19.080 idea what that is, folks. It's a camera six point 0:07:19.160 --> 0:07:23.880 six and I love this one, Brad h q l 0:07:24.040 --> 0:07:28.560 A five thirty nine billion. All of this is footnoted 0:07:28.600 --> 0:07:32.200 and Joey Evangelista saving my butt today. Is this a 0:07:32.240 --> 0:07:35.480 fortress or is that just a marketing campaign? No, it's 0:07:35.480 --> 0:07:40.440 a fortress um the JPM and and you can you 0:07:40.480 --> 0:07:42.120 can say, you know most of the banks at this 0:07:42.160 --> 0:07:47.520 point and fortress balance sheets and you know, weaken with luck. 0:07:48.840 --> 0:07:51.040 If you can take this forward, the risk of the 0:07:51.040 --> 0:07:54.120 bank drops and you end up seeing the beta's going down. 0:07:54.400 --> 0:07:58.120 That hasn't happened, right, And because if you want the 0:07:58.160 --> 0:08:01.400 betas to go down, that's going to reduce the cost 0:08:01.440 --> 0:08:05.160 of capital. And these, you know, the somewhat anebic roes 0:08:05.240 --> 0:08:07.720 that you've seen from the banks may actually end up 0:08:08.560 --> 0:08:11.480 if they stay. If you know you'll you'll be beating 0:08:11.480 --> 0:08:13.760 your cost of capital. We're not there yet. There's still 0:08:13.800 --> 0:08:16.200 a lot of uncertainty on the banking side, but the 0:08:16.200 --> 0:08:19.200 credit risk to the banks has has gone down. Right there, 0:08:19.600 --> 0:08:21.640 They're sitting there with a lot of liquidity on their 0:08:21.640 --> 0:08:25.320 balance sheet. They're sitting with great capital positions. You know 0:08:25.440 --> 0:08:28.600 that that means that all of us can sleep well 0:08:28.640 --> 0:08:31.400 at night and the banking systems stable. Now, whether you 0:08:31.440 --> 0:08:33.520 want to invest in them, that's a different question. And 0:08:33.600 --> 0:08:36.000 Brad hints with us. Let's finish up here in JP 0:08:36.040 --> 0:08:39.160 Morgan and get Professor Hanson with his day. Brad and 0:08:39.240 --> 0:08:42.840 tell me about retail banking. Mr Diamond's killing it clearly 0:08:42.880 --> 0:08:45.520 within retail banking and those others doing it well and 0:08:45.960 --> 0:08:50.400 some better, some worse. David and I walked by David 0:08:50.400 --> 0:08:53.920 in Brooklyn. I'm in New York in excuse me, in Manhattan? 0:08:54.400 --> 0:08:58.200 And h did I say that? In Manhattan? When did 0:08:58.200 --> 0:09:05.320 the branches start closing down? Um, you've got you've got 0:09:05.320 --> 0:09:09.560 some some generational issues there, Tom right, which is uh, 0:09:09.600 --> 0:09:12.200 you know, I don't believe my twenty six year old 0:09:12.280 --> 0:09:17.000 son has ever visited a branch. He does everything electronically 0:09:17.040 --> 0:09:20.840 off of his cell phone. On the other hand, you know, yeah, 0:09:21.480 --> 0:09:24.880 I go over to my my little branch in New Vernon, 0:09:24.920 --> 0:09:28.360 New Jersey, and I know the people over there. So 0:09:28.559 --> 0:09:32.120 you know, there's the who the branch system has to 0:09:32.160 --> 0:09:37.000 be resized. JPM certainly is the dominant player in UH 0:09:37.000 --> 0:09:40.800 in New York City. UM. But you know, you you 0:09:41.280 --> 0:09:44.120 don't look only at the twenty year olds, right, and 0:09:44.160 --> 0:09:47.640 you recognize that the elder the elderly have all the 0:09:47.679 --> 0:09:50.680 wealth management. So keeping a few of those branches probably 0:09:50.679 --> 0:09:54.440 a good idea is the is the Boston merger thon 0:09:55.559 --> 0:09:58.840 is just one example, the merger thon of twenty or 0:09:58.880 --> 0:10:02.440 thirty years ago? Did that work out? What's for the 0:10:02.640 --> 0:10:08.000 for the banks as they rolled themselves? You remember names 0:10:08.080 --> 0:10:13.520 like n c NB, right, uh, I remember the Second 0:10:13.600 --> 0:10:22.200 National Bank of the United States. Um. Not as well 0:10:22.280 --> 0:10:25.880 as as people have had had hoped, but they did 0:10:25.960 --> 0:10:27.960 work for some. And you know, and we do know 0:10:28.000 --> 0:10:31.320 that their scale economics that exist in in in commercial banking, 0:10:31.559 --> 0:10:33.560 we still as the United States, we still have a 0:10:33.640 --> 0:10:37.960 very very fragmented banking system. Unfortunately, the large banks can't 0:10:37.960 --> 0:10:40.400 get larger, right, that's you know, the too large to 0:10:40.440 --> 0:10:42.959 fail problem, And so We're going to see a roll 0:10:43.080 --> 0:10:45.080 up of this. It's not going to happen right away, 0:10:45.120 --> 0:10:47.560 but it is. We're not seeing new banks being made 0:10:47.720 --> 0:10:50.640 right so the you know, they looking forward. You know, 0:10:50.679 --> 0:10:53.200 if you look, if you give a five year time horizon, 0:10:53.240 --> 0:10:55.760 you'd say, you know that the banking world will consider 0:10:55.840 --> 0:10:59.760 to consolidate. But it's going to consolidate below the large ones, right, 0:10:59.760 --> 0:11:03.600 it will consolidate at that next tier. Total credit card 0:11:03.640 --> 0:11:07.880 loans JP Morgan hundred and thirty three billion dollars. A 0:11:07.920 --> 0:11:10.120 few weeks back, our colleague Sam Grosbard wrote a piece 0:11:10.120 --> 0:11:13.640 for Bloomberg Business Week about the Chase Sapphire Reserve card. 0:11:13.720 --> 0:11:16.360 Demand incredibly high for this card, some that has a 0:11:16.400 --> 0:11:19.040 special plunk factor. They actually put metal in the middle 0:11:19.040 --> 0:11:21.199 of it to give it a special field of It 0:11:21.240 --> 0:11:23.760 is a wildly popular card. There is this competition Brad 0:11:23.800 --> 0:11:26.480 between City and JP Morgan when it comes to credit 0:11:26.480 --> 0:11:29.000 cards in the credit card space. How important is that 0:11:29.040 --> 0:11:33.000 to this bank going forward? Um very important to the City. 0:11:33.040 --> 0:11:37.360 Remember you know the City just did the Costco deal 0:11:37.559 --> 0:11:40.280 and that's that that's very very good for them. Credit 0:11:40.280 --> 0:11:42.120 cards are important for all of these banks. It's a 0:11:42.120 --> 0:11:46.520 major source of profitability, tough business right and and but 0:11:46.760 --> 0:11:50.400 it's it remains of one of the few areas where 0:11:50.400 --> 0:11:53.160 you can get very nice that interest margin off of 0:11:53.200 --> 0:11:59.120 a off of a portfolio. It's it's a core business 0:11:59.240 --> 0:12:02.360 of marketing, you know. And I think, JPM we can, 0:12:02.440 --> 0:12:04.079 you know, we can. We can say they've done it. 0:12:04.200 --> 0:12:06.960 They've done a great job with the Sapphire card. City's 0:12:07.000 --> 0:12:09.120 going on, you know, somewhat different idea which says we're 0:12:09.120 --> 0:12:11.959 gonna we're gonna tie in with with a costco, a 0:12:12.040 --> 0:12:16.200 retailer and pick up a portfolio that way. It's Brad 0:12:16.280 --> 0:12:18.240 has the scale for us is having you, and thank 0:12:18.280 --> 0:12:34.920 you so much, greatly appreciate it. Neil Duddy asked me 0:12:35.000 --> 0:12:37.160 this morning how do you do this? And then he said, 0:12:37.160 --> 0:12:40.200 why do you do this? This is why I do it. Daniel, 0:12:40.240 --> 0:12:42.440 you're gonna walked in the studio this morning and you 0:12:42.559 --> 0:12:46.600 think we'd speak with dr You're going about oil. One 0:12:46.600 --> 0:12:48.640 of his cottage industries is to be one of our 0:12:48.760 --> 0:12:53.640 great economic historians. The beginning of his classic Commanding Heights 0:12:54.240 --> 0:12:56.800 on an England Flat on its Back is one of 0:12:56.800 --> 0:13:00.920 the great moments in modern economic literature. And we're thrilled 0:13:00.960 --> 0:13:04.440 the doctor Organ joins us UM. This morning, Martin Wilf 0:13:04.480 --> 0:13:08.280 writes it up Dan in the Ft today about this 0:13:08.520 --> 0:13:12.160 failure of May to be like Thatcher. You are truly 0:13:12.200 --> 0:13:15.760 one of the experts on this beverage of the London 0:13:15.840 --> 0:13:21.719 School of Economics did a welfare study for England on 0:13:21.920 --> 0:13:27.480 want disease, ignorant squalor in idleness, and out of that 0:13:27.600 --> 0:13:31.040 came the welfare state of England. The Thatcher tore asunder, 0:13:31.480 --> 0:13:34.480 what is Prime Minister May trying to do now with 0:13:34.640 --> 0:13:37.400 the United Kingdom fled on its back. Of course, Uh, 0:13:37.600 --> 0:13:40.559 Thatcher tried to open the economy, make it competitive, but 0:13:40.640 --> 0:13:45.920 the welfare state, certainly UH continues and UH continues to 0:13:45.960 --> 0:13:47.439 be a very big part of the economy. So it 0:13:47.480 --> 0:13:50.640 hasn't gone away. I think Uh. Theresa May has a 0:13:50.679 --> 0:13:53.840 big problem, which is to define what is Britain going 0:13:53.880 --> 0:13:56.000 to be now? Now it's not going to be part 0:13:56.000 --> 0:13:58.160 of the EU. Is it gonna be little England or 0:13:58.200 --> 0:14:00.679 is it gonna be global England and some of it? 0:14:00.800 --> 0:14:04.040 And she's responding to the same pressures that you see 0:14:04.080 --> 0:14:07.240 across much of the industrial world. Of course, here in 0:14:07.280 --> 0:14:10.600 the United States is very vaccine and challenging question of 0:14:10.679 --> 0:14:13.840 immigration and all the emotions around it. I would suggest 0:14:13.920 --> 0:14:18.480 that Baroness Thatcher with Keith Joseph had a more organized, 0:14:18.520 --> 0:14:23.640 cohesive domestic politics to apply and to do. And that's 0:14:23.880 --> 0:14:26.880 that's absolutely run absolutely, you know, that's absolutely right, Tom, 0:14:26.960 --> 0:14:29.720 because they had had several years to think this through, 0:14:29.800 --> 0:14:33.840 to work at she's improvising, she's inherited this hand now 0:14:34.360 --> 0:14:37.640 and basically has uh that the rules of the road 0:14:37.840 --> 0:14:40.040 just are not clear. So there's been no time to 0:14:40.080 --> 0:14:43.000 think it out. So, as Martin Wolf points out, a 0:14:43.000 --> 0:14:45.600 lot of a rhetoric now is pulled from other places, 0:14:45.840 --> 0:14:49.360 even he suggests from Elizabeth Warren, just because of time here. 0:14:49.680 --> 0:14:52.480 Let's David Girl, have you switch over and talk about 0:14:52.480 --> 0:14:55.080 our American politics and the time that we've got with 0:14:55.200 --> 0:14:58.040 Dr Jurgen. Yeah. I mean, it's been phenomenal to to 0:14:58.200 --> 0:15:00.760 watch the last week on Old, the reporting in the 0:15:00.760 --> 0:15:03.600 New York Times, the story after story seeming to roll 0:15:03.640 --> 0:15:06.640 out here about Donald Trump, this campaign going off the 0:15:06.720 --> 0:15:09.680 rails more perhaps than it than it had been. You know, 0:15:09.680 --> 0:15:12.080 we were we were speaking with San Colindar yesterday about 0:15:12.120 --> 0:15:15.680 the prospects for congressional action for something happening in Washington 0:15:15.720 --> 0:15:19.000 next year. He is, let's say, pessimistic on the subject. 0:15:19.320 --> 0:15:21.080 When do we return to a place where there is 0:15:21.120 --> 0:15:25.040 governance happening in Washington? Again? Dr Yurgan, the question will 0:15:25.080 --> 0:15:28.840 we return to Well, I think that people point out 0:15:28.920 --> 0:15:31.920 that when Hillary Clinton was a Senator, she worked across 0:15:31.960 --> 0:15:36.960 the aisles and UH would be much you know, works 0:15:36.960 --> 0:15:40.360 with people. And of course, right almost from the beginning, 0:15:40.360 --> 0:15:44.840 there was this gulf between UH, the administration and UH 0:15:44.920 --> 0:15:48.120 and Congress. We saw it most One example that we 0:15:48.160 --> 0:15:51.920 saw just very recently was on this bill that lifted 0:15:52.280 --> 0:15:57.120 sovereign immunity UH towards Saudi Arabia and just a lack 0:15:57.160 --> 0:15:59.480 of communication. The day before the vote, the President sent 0:15:59.520 --> 0:16:02.720 to letters the results would be devastating for the United States, 0:16:02.720 --> 0:16:06.240 for our military personnel or diplomatic personnel. But there was 0:16:06.280 --> 0:16:09.920 no UH. There was no traction UH until the very 0:16:10.000 --> 0:16:12.120 last moment. I'm glad that you brought that up, that 0:16:12.200 --> 0:16:14.680 we can get into oil a little bit here, Tom, 0:16:15.000 --> 0:16:17.560 I I wonder what we've heard from the audies since 0:16:17.600 --> 0:16:20.920 that legislation was passed, Since that veto by President Obama 0:16:21.000 --> 0:16:23.000 was was overwritten. Of course, there were the warning warning 0:16:23.000 --> 0:16:25.320 signs beforehand from the Saudis that if this were to happen, 0:16:25.360 --> 0:16:28.240 they would sell off treasuries and and dead. What reaction 0:16:28.280 --> 0:16:30.960 have we seen and moving to oil here a bit? 0:16:31.080 --> 0:16:32.720 You know, what is that? What does that due to 0:16:32.760 --> 0:16:35.280 the region having this this new lawn. Plus I think 0:16:35.320 --> 0:16:37.920 it raises questions whether the US government is going to 0:16:37.960 --> 0:16:42.080 get sued from by you know, drone strikes things like that. 0:16:42.320 --> 0:16:44.600 I mean, that's the big concern. And so you saw 0:16:44.640 --> 0:16:47.960 twenty eight senators after the legislation was passed saying, you know, 0:16:48.000 --> 0:16:50.360 maybe we've got to look at some aspects of it. 0:16:50.680 --> 0:16:53.160 I think that this message from the Saudis was kind 0:16:53.160 --> 0:16:56.080 of shocked that that had passed. Uh. They have a 0:16:56.080 --> 0:16:58.720 lot of other things on their agenda right now. Particularly, 0:16:58.840 --> 0:17:00.720 I mean, this is a cop in the country that 0:17:00.760 --> 0:17:03.800 just invested three and a half billion dollars in uber uh. 0:17:04.119 --> 0:17:08.480 So thinking through that. Uh And meanwhile, of course they're 0:17:08.480 --> 0:17:13.000 moving ahead with this huge vision twenty thirty to remake 0:17:13.000 --> 0:17:15.439 their economy and no longer be dependent on oil. Did 0:17:15.480 --> 0:17:18.200 you think at my script today you say vision thirty 0:17:18.280 --> 0:17:22.440 Daniel or Urgan three years ago, power in two thousand 0:17:22.480 --> 0:17:25.320 and thirty. Of course, off your wonderful book the quest 0:17:25.359 --> 0:17:28.800 Where will this nation be in two thousand thirty our nation? 0:17:28.880 --> 0:17:32.560 Or saunding our nation? Um, that's what is that? That's 0:17:32.600 --> 0:17:38.280 fourteen years away. It's called three more Painful president. Well, 0:17:38.320 --> 0:17:41.080 it does raise the question of what a presidential election 0:17:41.160 --> 0:17:43.359 is going to be like in the future and what 0:17:43.560 --> 0:17:46.800 lessons are going to be taken away, uh from this 0:17:46.920 --> 0:17:51.479 campaign in terms of organization. Uh, you know, this is 0:17:51.640 --> 0:17:54.240 what we're seeing now unfolding is hardly anything that would 0:17:54.240 --> 0:17:57.520 have been imagined a year ago. And of course when 0:17:57.520 --> 0:17:59.400 you travel in the rest of the world, people are 0:17:59.680 --> 0:18:02.639 kind have been shocked watching this presidential election, saying what 0:18:02.880 --> 0:18:04.720 you're going to tell us about how to run a 0:18:04.720 --> 0:18:07.760 democracy with your scope of economics and history. We have 0:18:07.880 --> 0:18:10.320 Michael Kayson on at Georgetown the other day and on 0:18:10.600 --> 0:18:13.399 William Jennings. Bryan, do you look at this as a 0:18:13.480 --> 0:18:16.800 one off event or is there a permanence to what 0:18:16.880 --> 0:18:20.120 we've seen, the tumult that we've seen within the Republican Party. Well, 0:18:20.160 --> 0:18:24.000 I think that that. Obviously, they're very powerful forces that 0:18:24.000 --> 0:18:26.720 have come to the fore and these issues. I mean, 0:18:26.760 --> 0:18:29.840 what was the issue that really galvanized is immigration, even 0:18:29.920 --> 0:18:33.879 though apparently right now there is no net immigration coming 0:18:33.920 --> 0:18:38.119 from Mexico. Uh So I think these forces are there. 0:18:38.160 --> 0:18:40.919 And the thing is, we do need higher economic growth. 0:18:41.000 --> 0:18:45.600 We do need inclusiveness and and more entrepreneurial energy in 0:18:45.640 --> 0:18:48.040 our society, not just in Silicon Valley. What a joyous, 0:18:48.040 --> 0:18:52.399 surprising Friday, Daniel. You're gonna can't say enough about as 0:18:52.440 --> 0:18:55.800 most recent effort, the Quest m It is a synthesis 0:18:55.840 --> 0:18:58.960 of all that he's done and moves forward on this 0:18:59.080 --> 0:19:02.800 nation and our energy. Mr. Y, we we we almost 0:19:02.840 --> 0:19:13.200 were oil free. This we'll do that. Next to who 0:19:13.320 --> 0:19:17.000 you put your trust in matters, investors have put their 0:19:17.000 --> 0:19:20.359 trust in independent registered investment advisors to the tune of 0:19:20.440 --> 0:19:25.320 four trillion dollars. Why they see their role is to serve, 0:19:25.800 --> 0:19:29.040 not sell. That's why Charles Schwab is committed to the 0:19:29.080 --> 0:19:33.760 success of over seven thousand independent financial advisors who passionately 0:19:33.800 --> 0:19:38.200 dedicate themselves to helping people achieve their financial goals. Learn 0:19:38.240 --> 0:19:49.639 more and find your independent advisor dot com. We need 0:19:49.680 --> 0:19:54.000 to go to Boston and Michael McKee at a very 0:19:54.040 --> 0:19:59.600 important summitt at Toughs University. Good morning, Michael, Good morning Tom. 0:19:59.600 --> 0:20:02.000 And the good news for you is the Boston Bruins 0:20:02.000 --> 0:20:04.480 opened the season with a six to three win. Brad 0:20:04.520 --> 0:20:08.639 Marshan scores two goals, gets three assists to open the season. 0:20:08.880 --> 0:20:11.080 That's your report from Boston that I knew you wanted 0:20:11.119 --> 0:20:14.320 to have. Got that right. We're here with that from 0:20:14.400 --> 0:20:16.920 James from the it's our old friend, uh the Deed 0:20:16.920 --> 0:20:19.240 of the Fletcher School at Toughs University, and they are 0:20:19.320 --> 0:20:22.520 hosting a conference today on the future of Greece. It's 0:20:22.560 --> 0:20:25.800 Greece's turn, and we welcome the Admiral to the program. 0:20:25.840 --> 0:20:27.960 We came up for the for the conference because of 0:20:27.960 --> 0:20:29.679 course it's always great to talk to you about national 0:20:29.680 --> 0:20:34.199 security issues and graces. It's been a financial crisis for 0:20:34.240 --> 0:20:36.919 the world, but you also look at it, and you 0:20:37.040 --> 0:20:39.080 told us this before that it is a major national 0:20:39.160 --> 0:20:43.600 security issue given its geographic location exactly. You know, we're 0:20:43.680 --> 0:20:46.920 talking sports a minute ago. Think about baseball, think about 0:20:46.960 --> 0:20:50.720 the hot corner, the third base. Greece is kind of 0:20:50.720 --> 0:20:53.959 the hot corner for Europe. It's the closest to the 0:20:54.000 --> 0:20:58.000 batter in terms of offensive action, and so Greece is 0:20:58.040 --> 0:21:00.320 going to be the canary in the in the mind 0:21:00.359 --> 0:21:04.280 shaft in terms of refugees, terrorism, they're in a very 0:21:04.320 --> 0:21:07.240 precarious position, and we need to stand with Greece, and 0:21:07.280 --> 0:21:09.520 that's part of what this conference is about. Like, one 0:21:09.520 --> 0:21:13.800 of the questions that people have is we went into 0:21:13.840 --> 0:21:17.040 the crisis in two thousand nine, and in two thousand 0:21:17.000 --> 0:21:19.640 and ten they started with rescue plans, and they're still 0:21:19.720 --> 0:21:22.720 not out of it and things still seem to be deteriorating. 0:21:23.240 --> 0:21:25.119 I know you've been meeting for a day already on 0:21:25.160 --> 0:21:27.520 this have you have you come to any conclusions as 0:21:27.520 --> 0:21:30.560 to why, Well, it is a conference about Greece, so 0:21:30.600 --> 0:21:33.720 you'll allow me to reach into Greek mythology. Uh. One, 0:21:33.760 --> 0:21:36.240 it's like Sisyphus, you kind of roll the boulder up, 0:21:36.280 --> 0:21:38.360 you make progress, but it seems to kind of keep 0:21:38.400 --> 0:21:40.760 coming back down. And the other one less well known 0:21:40.800 --> 0:21:43.760 as Tantalus, who was tied to a tree, punished by 0:21:43.760 --> 0:21:46.919 the gods and dying of hunger and thirst, and the 0:21:46.960 --> 0:21:50.000 wind would glow apples almost within his reach, and the 0:21:50.040 --> 0:21:52.760 water would raise almost to his lips. So I think 0:21:52.760 --> 0:21:54.480 we've got a little bit of Sysiphus and a little 0:21:54.480 --> 0:21:57.200 bit of Tantalus going on. But I was in Greece 0:21:57.240 --> 0:21:59.679 a week ago, and I think we are beginning to 0:21:59.720 --> 0:22:01.920 turn corner there. I think we are going to see 0:22:02.520 --> 0:22:06.440 positive growth numbers there next year. Stamp tiny but positive. Well. 0:22:06.440 --> 0:22:09.320 One of the things people worry about with Greece's geographic 0:22:09.400 --> 0:22:12.639 location is obviously the introduction of bad guys into the region. 0:22:13.680 --> 0:22:15.720 In the early days of the crisis, there was a 0:22:15.720 --> 0:22:19.320 lot of talk about bringing in loans from China, bringing 0:22:19.320 --> 0:22:22.960 in loans from Russia. Never happened. Uh. What's the Greek 0:22:23.040 --> 0:22:26.320 feeling about the United States and about these other actors. 0:22:26.600 --> 0:22:29.359 They've never been a particularly great friend of the United States, 0:22:29.440 --> 0:22:32.800 but they haven't allied themselves with the other side either. Yeah. 0:22:32.840 --> 0:22:35.240 I think if you look at the long relationship of 0:22:35.280 --> 0:22:38.840 Greece with the United States, it's uh, it's overall pretty positive. 0:22:38.880 --> 0:22:42.680 And I'll stipulate I'm a Greek American, so I'm predisposed 0:22:42.720 --> 0:22:46.320 to think that way. But remember our values come from Greece. 0:22:46.359 --> 0:22:50.000 We have a long history of supporting them in independence, 0:22:50.200 --> 0:22:53.560 We have a World War Two history with Greece. And 0:22:53.680 --> 0:22:55.960 to answer the question of how it is today, I'd 0:22:56.040 --> 0:22:59.520 say it's some mixed picture. There are a number of 0:22:59.520 --> 0:23:01.359