WEBVTT - Surveillance: Deutsche Bank Will Survive, Albertson Says 0:00:00.080 --> 0:00:12.960 Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane 0:00:13.480 --> 0:00:17.560 jay Ley. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:31.080 Bloomberg dot Com, and of course on the Bloomberg Stephen Stanley, 0:00:31.080 --> 0:00:35.519 you're gonna push aggressively against this, Emirs Puerplant Morgan Stanley 0:00:35.520 --> 0:00:38.440 with the global selling equities. Mike Wilson has been cautious 0:00:38.840 --> 0:00:41.640 on equities as well. Lan Zettner has been below you 0:00:41.720 --> 0:00:44.479 on g d P. But you just flat out in 0:00:44.520 --> 0:00:48.000 a claridean way push against us. You think, if anything, 0:00:48.080 --> 0:00:52.200 we could get neutrality out of chairman political Yeah, I think. 0:00:52.240 --> 0:00:54.560 I mean I haven't. I thought all along that they 0:00:54.600 --> 0:00:56.840 were not going to ease in July, and I still 0:00:56.880 --> 0:00:59.800 feel that way. Um, and I think it's time. You know, 0:00:59.840 --> 0:01:02.600 the f has been, in my view, has been very coy, uh, 0:01:02.680 --> 0:01:05.839 particularly the leadership and kind of letting things play out 0:01:05.880 --> 0:01:08.640 and hoping that the data would kind of push the 0:01:08.680 --> 0:01:13.880 market away from the aggressive easing expectations. Perhaps and we've 0:01:13.880 --> 0:01:16.240 gotten some movement, but uh, I think with three weeks 0:01:16.280 --> 0:01:19.120 ago to the meeting, Uh, if if they are thinking 0:01:19.160 --> 0:01:21.559 they might not move, they're gonna need to tell us that. John. 0:01:21.600 --> 0:01:24.880 This brilliantly sets up the polarity that's out there. We've 0:01:24.880 --> 0:01:28.240 got Steve Stanley on the edge of solid. Maybe you 0:01:28.319 --> 0:01:31.120 diminished GDP, but not. And then what Morgan Stanley is 0:01:31.160 --> 0:01:33.560 saying is jaw dropping. The chairman of the fete's uncomfortable 0:01:33.560 --> 0:01:35.800 with the outlook. He's communicated that too, is Steven. I 0:01:35.840 --> 0:01:37.800 just wonder whether the outlook and the risks around it 0:01:37.840 --> 0:01:40.360 have diminished somewhat sufficiently enough over the last couple of 0:01:40.360 --> 0:01:42.240 weeks to say we don't need a right cut at 0:01:42.240 --> 0:01:44.120 the end of this month. Is that your view? That's 0:01:44.120 --> 0:01:46.120 my view. I mean, I think the number one risk 0:01:46.160 --> 0:01:49.280 obviously is the trade situation. And um, we were just 0:01:49.440 --> 0:01:51.760 coming off of the Mexico thing at the at the 0:01:51.840 --> 0:01:54.280 last FED meeting, and we were still waiting for the 0:01:54.280 --> 0:01:58.480 G twenty, And while there was certainly no final solution 0:01:59.040 --> 0:02:02.440 to the US China talks at the G twenty, I think, um, 0:02:02.480 --> 0:02:04.560 you know we we we got probably the best we 0:02:04.560 --> 0:02:06.840 can hope for. And I think since then you've also 0:02:06.920 --> 0:02:10.120 seen some improvement in the data. Obviously, after a week 0:02:10.160 --> 0:02:13.760 may pay all number. We got a better number in June. UM, 0:02:13.800 --> 0:02:16.760 it seems to me that the Q two GDP expectations 0:02:16.760 --> 0:02:18.600 are probably, if anything, a little better now than they 0:02:18.639 --> 0:02:22.040 were in the middle of June. UM. The inflation numbers 0:02:22.400 --> 0:02:25.400 still a little below two percent, but the latest readings 0:02:25.400 --> 0:02:28.920 on core inflation have been a little less soft than 0:02:28.960 --> 0:02:30.639 the numbers that we got earlier in the year. So 0:02:31.160 --> 0:02:33.240 at the margin, it seems to me that the risks 0:02:33.280 --> 0:02:35.480 are still there, but they're not quite as acute as 0:02:35.480 --> 0:02:38.320 they were, uh the last time they fed met. Being 0:02:38.360 --> 0:02:41.680 somewhat familiar with Morgan Stanley's thinking around the Federal Reserve, 0:02:41.760 --> 0:02:44.760 I think there's a belief that because there is limited ammunition, 0:02:44.760 --> 0:02:46.640 there is an incentive there to get ahead of a 0:02:46.639 --> 0:02:49.880 potential down term, because if you wait for it to materialize, 0:02:50.120 --> 0:02:52.080 you don't have the ammunition to address it. You need 0:02:52.120 --> 0:02:54.240 to do less with more, you need to be preensitive. 0:02:54.600 --> 0:02:56.960 So I'm just wondering whether that's a justification to go 0:02:57.000 --> 0:02:59.639 early and go big, even if the economic dates with 0:02:59.680 --> 0:03:02.160 the mode, but the realized states that may not warrant's 0:03:02.200 --> 0:03:04.600 hit you thought on that argument statement, Yeah, I think 0:03:04.639 --> 0:03:07.320 if if you believe that a downturn or even a 0:03:07.360 --> 0:03:11.080 significant slowing is is likely. Uh. Then I think that's 0:03:11.120 --> 0:03:15.079 exactly the FED playbook is to go hard, go early. UM. 0:03:15.680 --> 0:03:18.799 And I think there's there's no question that the market 0:03:18.800 --> 0:03:22.040 has kind of latched onto that way of thinking. But 0:03:22.120 --> 0:03:24.360 at the same time, I guess what I would you 0:03:24.400 --> 0:03:27.200 know look at is that the FED has acknowledged that 0:03:27.240 --> 0:03:30.720 their base case is still pretty pretty positive at this point. 0:03:30.800 --> 0:03:34.360 They see downside risks, but until unless or until they 0:03:34.400 --> 0:03:37.360 are more confident that those risks are likely to materialize, 0:03:37.400 --> 0:03:39.920 I just don't see them acting than this data dependency. 0:03:40.040 --> 0:03:42.560 What is the data that matters that gets them to 0:03:42.640 --> 0:03:45.840 some form of decision, whether it's some Morgan Stanley Barkley's 0:03:45.840 --> 0:03:49.440 fifty beeps or something more optimistic like where Steve Stanley is. 0:03:50.040 --> 0:03:55.000 I think most importantly at this point is growth because interesting, Yeah, 0:03:55.040 --> 0:03:59.120 the downside risks are around the growth, Uh, implications of 0:03:59.160 --> 0:04:02.280 trade uncertainty. I think so Q two GDP I've always 0:04:02.280 --> 0:04:04.640 thought was going to be a really important number, which 0:04:04.680 --> 0:04:06.880 and then within that, is it the consumption dynamic or 0:04:06.920 --> 0:04:10.320 is it really business dynamic off of the President's trade war? Right? Well, 0:04:10.360 --> 0:04:13.760 the risk the downside risks at this point are mainly 0:04:13.800 --> 0:04:17.400 related to the business sector. But if the consumer holds up, 0:04:17.560 --> 0:04:20.120 then we could probably afford to see a pause in 0:04:20.200 --> 0:04:22.320 business investment, which is I think what we're seeing. So 0:04:22.400 --> 0:04:24.320 it's really you know, I think that's why in some 0:04:24.360 --> 0:04:27.919 ways the labor report last Friday was pretty important because 0:04:27.920 --> 0:04:30.679 it tells us that the underpinnings for the consumers should 0:04:30.680 --> 0:04:33.719 remain solid. Stephen, It's a question for you if at 0:04:33.720 --> 0:04:35.559 the end of this month we don't get an interest 0:04:35.680 --> 0:04:38.360 right cut, but it's priced by the market at the moment, 0:04:38.400 --> 0:04:40.880 if they hold, will that be the equivalent of a 0:04:40.920 --> 0:04:44.960 hike for financial conditions? Well, there's there's definitely gonna have 0:04:45.000 --> 0:04:46.839 to be an adjustment, whether it occurs the day of 0:04:46.839 --> 0:04:49.040 the meeting or between now and then. I think, you know, 0:04:49.200 --> 0:04:51.880 certainly some of it could have could occur today. One 0:04:51.880 --> 0:04:55.880 thing that that I encouraged by was so last Friday 0:04:55.880 --> 0:04:58.080 we had a pretty significant adjustment in rates and in 0:04:58.160 --> 0:05:01.039 FED expectations, and the start market was down, but it 0:05:01.080 --> 0:05:03.320 really wasn't down that much. So I think what the 0:05:03.360 --> 0:05:06.760 FED is really concerned with is a big drop in 0:05:06.800 --> 0:05:10.599 stock prices, and you know, at least so far, it 0:05:10.680 --> 0:05:14.040 doesn't feel like that's necessarily in the cards, sound TRUMPI 0:05:14.120 --> 0:05:16.320 and Steve Stanley with us on the stock market and 0:05:16.360 --> 0:05:35.680 Sherman chief investment strategist Amer's Pierpont. We are thrilled in 0:05:35.680 --> 0:05:37.880 our studio to talk about the future of New York 0:05:37.920 --> 0:05:42.000 Wall Street. Robert Albertson of Sandler O'Neill, his decks of 0:05:42.080 --> 0:05:47.599 investment strategy for Sandler O'Neill our legendary. But John Farrow, 0:05:47.600 --> 0:05:51.360 as you mentioned yesterday, it was a legendary day as 0:05:51.400 --> 0:05:55.080 Sandler O'Neil taken out by Piper, Jeffrey and Mr Dunn 0:05:55.680 --> 0:05:58.800 at an emotional moment, marketing back to the courage of 0:05:59.080 --> 0:06:01.719 him and you. And there's to move forward off of 0:06:01.720 --> 0:06:05.080 September eleventh. What did you do yesterday? Look, I wasn't there, uh. 0:06:05.320 --> 0:06:08.320 I came after September eleventh, and I can tell you 0:06:08.440 --> 0:06:11.200 this is a firm with probably the deepest culture I've 0:06:11.240 --> 0:06:15.200 ever come across. UM. I always feel like an outsider. Frankly, 0:06:16.440 --> 0:06:19.120 it is a very solid place. We didn't get taken out. 0:06:19.800 --> 0:06:21.920 I think the better way to say this is we 0:06:22.000 --> 0:06:25.880 recognize change has to come to and it's tough, tougher 0:06:25.960 --> 0:06:29.640 for us, a private firm than most and very successful 0:06:29.640 --> 0:06:31.480 at what we do. But it made a lot of sense. 0:06:31.520 --> 0:06:33.400 You've gotta broad you gotta do two things. You gotta 0:06:33.400 --> 0:06:38.400 broaden your base, uh, products and services and contacts, and 0:06:38.440 --> 0:06:40.039 then you've got to make the most of them with 0:06:40.360 --> 0:06:43.720 very strong push on productivity, not cutting costs, but but 0:06:43.720 --> 0:06:46.520 but really finding ways to cross sell. And this Piper 0:06:46.600 --> 0:06:49.480 is the best. It really is the best match for 0:06:49.520 --> 0:06:51.320 those two things. And that's what you're going to see 0:06:51.320 --> 0:06:55.760 on Wall Street in general. Uh, shrinky just reliance on trading, shrinky, 0:06:55.839 --> 0:06:58.640 John reliance some balance sheet, Um, you've already seen it. 0:06:58.720 --> 0:07:02.360 And and then deeper deeper into the advisory with more 0:07:02.400 --> 0:07:04.920 balance Robert, this is a great story that came out 0:07:04.920 --> 0:07:07.440 of yesterday that Jimmy went across to the local Brooks 0:07:07.480 --> 0:07:10.760 Brothers store and just bought all the duck ties, all 0:07:10.800 --> 0:07:12.800 the times with ducks that he could get his hands on. 0:07:12.880 --> 0:07:16.200 Talk to me about his significance of doing just that yesterday. Well, 0:07:16.240 --> 0:07:19.960 his longtime friend and head of banking, um who perished. 0:07:20.560 --> 0:07:22.760 That was one of his favorite things, and that was 0:07:22.800 --> 0:07:26.920 in honor of him. Uh, and very touching, and it's 0:07:26.960 --> 0:07:29.000 an inside thing you need to know, but it tells 0:07:29.000 --> 0:07:32.280 you how although we can be as a firm as 0:07:32.320 --> 0:07:35.360 hard nosed anyone else on Wall Street, when it comes 0:07:35.400 --> 0:07:38.120 to competing and doing their own thing, there's a really 0:07:38.200 --> 0:07:43.960 soft spot based on that sad blemish that happened twenty 0:07:44.040 --> 0:07:46.880 years ago. Let us talk about the news you and 0:07:46.920 --> 0:07:49.880 I have seen. We showed film of Lehman Brothers earlier 0:07:49.920 --> 0:07:52.520 and embarrassed turns, and you and I talked about cotton 0:07:52.520 --> 0:07:55.760 in Illinois. How grave is the situation at Deutsche Bank. 0:07:56.640 --> 0:08:00.000 I can't tell because I no longer as an analyst 0:08:00.000 --> 0:08:03.200 follow it anymore. I'm on an analyst UM. I think 0:08:03.240 --> 0:08:05.320 it's been there for a long time, and my simple 0:08:05.440 --> 0:08:08.160 view is when they brought on bankers Trust, it was 0:08:08.160 --> 0:08:10.960 a big shift in their type of product. UM they 0:08:11.000 --> 0:08:13.880 stayed with it too long since because you look at 0:08:13.920 --> 0:08:16.840 the trendlines. I'm gonna send you those log hurts you 0:08:16.960 --> 0:08:19.200 go back ten fifteen years ago. Trading was the only 0:08:19.240 --> 0:08:21.960 thing you should ever consider doing. It was the strongest, 0:08:22.000 --> 0:08:26.480 most predictable voltile but most predictable revenue source that has 0:08:26.560 --> 0:08:30.520 changed dramatically and everyone has to adjust. I think that's 0:08:30.560 --> 0:08:35.040 a bigger part of their adjustment process than most UM 0:08:35.200 --> 0:08:38.520 and I would guess that they're going to survive and 0:08:38.520 --> 0:08:41.720 pull it off because they're finally facing the big elephant 0:08:41.760 --> 0:08:43.560 in the room, so to speak. And some good news 0:08:43.559 --> 0:08:45.800 for people affiliated with Deutsche Bank that the fixed in 0:08:45.800 --> 0:08:47.560 come trides this morning, we're tell that they will be 0:08:47.640 --> 0:08:50.480 keeping their jobs. This market has changed, Robert, I would 0:08:50.520 --> 0:08:53.200 love you're insight on it. It is crazy what I'm 0:08:53.200 --> 0:08:56.280 seeing in European markets right now, Emerging market Europe, so 0:08:56.400 --> 0:08:59.040 the likes of Poland, the Eastern European nations, the runny 0:08:59.120 --> 0:09:03.960 that we've seen in a fixed income market. Poland's note 0:09:04.480 --> 0:09:07.520 is very close to dropping below zero on the yield. 0:09:07.559 --> 0:09:09.560 Just think about that, we could have negative yields in 0:09:09.640 --> 0:09:15.560 Poland on ten year pages easter. They're they're doing like fops, 0:09:15.640 --> 0:09:19.840 just real, absolutely unreal centry bonds, some of the big 0:09:19.880 --> 0:09:22.040 centry bonds, some of the well known issues of them. 0:09:22.040 --> 0:09:26.080 They're returning almost through What do you make of this 0:09:26.280 --> 0:09:30.800 massive clamoring for fixed income income wherever you can get it, 0:09:31.120 --> 0:09:33.600 and the idea that the bond market is providing capital 0:09:33.640 --> 0:09:36.440 returns north of what the equity market is offering. Here, 0:09:36.720 --> 0:09:38.720 you gotta go back and look at how long we've 0:09:38.800 --> 0:09:41.559 been in abnormal interest rates, whether you want to call 0:09:41.600 --> 0:09:46.559 them abnormal or not, whatever, But um, there's been an obsession. Um, 0:09:46.600 --> 0:09:49.120 it is an addiction, and therefore nobody wants to change it. 0:09:49.160 --> 0:09:51.719 And everyone's frightened. And even the President thinks twenty the 0:09:51.840 --> 0:09:56.720 basis points will make or break as economy. It's silly. Um, 0:09:56.760 --> 0:09:59.480 that's not going to change whether you're an industrialized or 0:09:59.480 --> 0:10:02.200 an emerging market for for a while, that's for sure. 0:10:02.960 --> 0:10:05.400 Number two. The emerging market side of the world, let's 0:10:05.400 --> 0:10:08.600 call Poland and those um more like that, not that 0:10:08.640 --> 0:10:13.280 they're not industrialized, are much more focused on infrastructure, growth, 0:10:13.400 --> 0:10:17.520 good things that we all remember twenty fifty years ago. Uh, 0:10:17.559 --> 0:10:20.880 and it's gonna work. So they're a different world entirely, um, 0:10:20.880 --> 0:10:23.880 completely decoupled. Put those all into a bunch of folks 0:10:23.880 --> 0:10:27.959 called Europe EU. Oh my gosh, you really are setting 0:10:27.960 --> 0:10:30.400 it up. In the third thing, you break this thing 0:10:30.800 --> 0:10:35.079 potentially by all this nationalism hopefully dies down, but it's 0:10:35.120 --> 0:10:38.400 a global trend. Obviously I've got any more questions, but 0:10:38.480 --> 0:10:40.840 we don't at the time. Robert Albertson, thank you so much. 0:10:40.840 --> 0:10:44.520 With Sandal O'Neil. Congratulations to all of Sandal O'Neill. Thank 0:10:44.520 --> 0:10:48.880 you on their announcement yesterday with UH Piper Jeffrey Pipe, 0:10:48.880 --> 0:10:51.360 Piper Sandler is that we're going to call it per 0:10:51.400 --> 0:10:53.920 Sandler Companies. Very good. You have to get new business cards. 0:10:54.040 --> 0:10:57.600 Very good coming Robert Albert, thank you so much, greatly appreciated. 0:11:13.200 --> 0:11:16.360 Henrietta trust joins us one of our most popular guest 0:11:16.400 --> 0:11:21.040 director of Economic Policy Research UH and and thrilled that 0:11:21.080 --> 0:11:23.040 she could be with us. She's really got a with 0:11:23.160 --> 0:11:26.080 Veda and she's got a real visceral knowledge here. Henrietta 0:11:26.160 --> 0:11:29.280 I got is a great Washington watcher. How much does 0:11:29.400 --> 0:11:33.199 Washington roll up in the summer? I mean, before air conditioning, 0:11:33.240 --> 0:11:36.119 it was a total roll up. But like, is Washington 0:11:36.240 --> 0:11:39.360 like half asleep in July or is it like more 0:11:39.440 --> 0:11:43.679 bustling than it used to be? One of guys, July 0:11:43.960 --> 0:11:47.240 tends to be pretty busy. They do start work after 0:11:47.360 --> 0:11:49.120 the sun goes down. In a lot of cases, a 0:11:49.200 --> 0:11:52.400 lot of this stuff happens at night. But August is 0:11:52.400 --> 0:11:55.440 what everybody has definitely gone. So your calendars for July, 0:11:56.520 --> 0:11:58.600 I want to say it's the last day of session, 0:11:58.600 --> 0:12:00.240 then they'll be out. That's what John and I are 0:12:00.280 --> 0:12:07.040 doing we're booking, so we're gonna be on holidays. Okay, 0:12:07.160 --> 0:12:09.000 we need to get a serious update. We haven't done 0:12:09.000 --> 0:12:11.640 this in a while, folks, with all the distractions. Let's 0:12:11.640 --> 0:12:15.880 do it now, Henrietta, seriously, the position now of the 0:12:16.000 --> 0:12:20.520 United States of America against the threat of Huawei, How 0:12:20.520 --> 0:12:23.840 has it changed in the last number of days. It 0:12:23.880 --> 0:12:27.959 has not changed meaningfully at all. I think in the 0:12:28.080 --> 0:12:31.120 in the readout of the G twenty, there were two options. 0:12:31.200 --> 0:12:34.120 We could either assume that President Trump had reached a 0:12:34.160 --> 0:12:36.720 deal with President she and he was no longer serious 0:12:36.720 --> 0:12:40.960 about extracting systemic reformat of China, he wasn't concerned about 0:12:40.960 --> 0:12:44.160 the national security threat post by companies like Bawei and 0:12:44.240 --> 0:12:48.199 others in the high tech space, or the read out 0:12:48.200 --> 0:12:51.160 of the G twenty was overly optimistic to Rosie, and 0:12:51.200 --> 0:12:54.520 in fact, nothing had substantially changed in the last ten days. 0:12:54.559 --> 0:12:57.160 We've got a lot of evidence for the second scenario 0:12:57.320 --> 0:12:59.920 and not very much for the first. So Secretary Rob 0:13:00.080 --> 0:13:04.440 speaking at an export control restrictions conference, which is basically 0:13:04.440 --> 0:13:07.319 the future of the U S. China trade war, he said, look, 0:13:07.360 --> 0:13:09.800 we're gonna be relaxing a little bit of the restrictions 0:13:09.840 --> 0:13:14.600 mostly steered towards US sales of semi conductor chips and 0:13:14.760 --> 0:13:18.439 things that go into their tangible components that Huawei produces, 0:13:18.720 --> 0:13:21.600 but nothing that is associated with the future of Huawei, 0:13:21.720 --> 0:13:26.079 So their five gene networks, their ongoing efforts to expand 0:13:26.120 --> 0:13:32.440 into further visual and audio UH surveillance, the cyber security component, 0:13:32.520 --> 0:13:34.920 all that is still very much front and center um 0:13:35.000 --> 0:13:37.280 and I think there's actually a lot more to come, 0:13:37.720 --> 0:13:41.000 not just focused on Huawei, but on any high text 0:13:41.240 --> 0:13:47.920 sector that has business with China, so biotech, nanobiology, synthetic biology, 0:13:48.160 --> 0:13:54.360 um AI, anything in the future of the communications is 0:13:54.360 --> 0:13:56.439 what we're about to roll out with these export control 0:13:56.480 --> 0:13:59.120 restrictions and is becoming really complex are called with the 0:13:59.160 --> 0:14:02.840 National econom accoun SO Director Larry Cudlow on Friday, various 0:14:02.880 --> 0:14:04.679 members of the administration for quite a while said the 0:14:04.720 --> 0:14:07.280 Huawei issue was a separate issue from the trade discussion, 0:14:07.640 --> 0:14:10.280 and Henrietta Larry Caudlo said on Friday that it was 0:14:10.320 --> 0:14:14.080 the same story now part of the same negotiation. What 0:14:14.120 --> 0:14:17.040 do you think of that. I think it's very much 0:14:17.120 --> 0:14:21.080 something we saw with the Ztevan UH this time last year, earlier, 0:14:21.120 --> 0:14:24.800 even earlier than this last year. Um, the qu s 0:14:24.920 --> 0:14:30.040 China negotiations are so wide ranging, and the export control 0:14:30.120 --> 0:14:32.280 piece the future of high tech is what it's really 0:14:32.320 --> 0:14:34.360 all about. You know, we talked about tariffs a lot, 0:14:34.880 --> 0:14:38.080 but they're the window dressing to the underlying trade war, 0:14:38.320 --> 0:14:41.120 which is not just limited to um you know you 0:14:41.120 --> 0:14:43.920 don't buy enough soybeans from US, but about how you 0:14:44.400 --> 0:14:48.680 see China forcing transfer for sing I p sfts and 0:14:48.760 --> 0:14:51.880 to have a conversation where Huawei one of the main 0:14:51.960 --> 0:14:55.000 instigators and one of the areas of concern. You know, 0:14:55.040 --> 0:14:57.760 some other folks at the conference yesterday we're saying, look, 0:14:57.760 --> 0:15:00.160 we need to be on offense against China. We need 0:15:00.200 --> 0:15:02.920 to be proactive unless they're going to continue to steal 0:15:02.920 --> 0:15:06.880 our I P and advanced in a global fashion that 0:15:07.080 --> 0:15:09.640 in a way that leaves our high tech industry behind. Henry, 0:15:09.840 --> 0:15:11.520 we just seem to be blowing the lines between the 0:15:11.600 --> 0:15:14.880 job of the Commerce Secretary, the job of the Secretary 0:15:14.880 --> 0:15:16.880 of State, the job of the Treasury secretary. It seems 0:15:16.920 --> 0:15:21.320 to becoming one job. Absolutely. I'm so glad you mentioned that. 0:15:21.400 --> 0:15:24.360 So there's the executive order if you read it closely, 0:15:24.520 --> 0:15:28.560 that doesn't even mention Huawei but addresses the communications technology 0:15:28.560 --> 0:15:31.000 and systems going into the future, and has all these 0:15:31.320 --> 0:15:33.880 specific date for as you mentioned, the Department of Homeland 0:15:33.920 --> 0:15:38.280 Security to weigh in later this month. All these agencies, CEPIST, 0:15:38.360 --> 0:15:42.040 the SEC, the FCC, UM, you know, anybody with an 0:15:42.040 --> 0:15:44.560 axiom they're involved in this. I want to ask, can 0:15:44.600 --> 0:15:46.840 I ask your first or of condition? I'm the dumbest 0:15:46.880 --> 0:15:49.720 member of Congress and I'm asking Henry the treas an 0:15:49.760 --> 0:15:55.000 important question. What is Huawei actually done? And I'm using 0:15:55.000 --> 0:15:58.120 this word as an amateur criminal. I mean is it 0:15:58.200 --> 0:16:01.600 Are we worried about the future or have they actually 0:16:01.640 --> 0:16:06.120 done something bad? Now, Well, it depends on who you 0:16:06.160 --> 0:16:09.280 talk to. They they have sixty eight separate entities, so 0:16:09.280 --> 0:16:11.320 they do a lot of things, so it's not like 0:16:11.360 --> 0:16:14.960 there's just one. UM. Probably most concerning would be UM 0:16:15.000 --> 0:16:18.200 the fact that they provide surveillance that allows China to 0:16:18.720 --> 0:16:23.520 have its human rights abuses perpetuated, specifically with Muslim minorities 0:16:23.520 --> 0:16:26.840 in the Nations human rights. So it's a human rights 0:16:26.840 --> 0:16:31.280 angle on Western China, which is completely tangible. Is that 0:16:31.320 --> 0:16:34.880 all you have? No, certainly not. And then you have 0:16:35.240 --> 0:16:37.760 UM the fact that Huawei is trying to build out 0:16:37.880 --> 0:16:41.680 its future of wireless and that is something that the 0:16:41.760 --> 0:16:44.440 United States and our defense agencies have a big problem with. 0:16:44.560 --> 0:16:48.080 If Huawei is selling its hand sets and it's UM 0:16:48.160 --> 0:16:51.520 components not just to Iran, but to other nations, and 0:16:51.520 --> 0:16:58.440 then they're incorporating their potentially um sort of cyber security 0:16:58.520 --> 0:17:02.120 threat components to the general public, that becomes a major Now. 0:17:02.480 --> 0:17:05.040 But what I'm hearing there, jump in. But what I'm 0:17:05.160 --> 0:17:08.760 hearing their folks, is it's a future worry. It's not 0:17:08.800 --> 0:17:13.480 like a present tense. It's a persistent worrying, a persistent 0:17:13.520 --> 0:17:15.359 worry not just for the US government, for US as 0:17:15.359 --> 0:17:19.000 well and Riet. So we're creeping up to the campaign 0:17:19.040 --> 0:17:22.240 has already begun, really started a while ago, and I'm 0:17:22.280 --> 0:17:24.080 just wondering if this a story that's just going to 0:17:24.280 --> 0:17:27.320 drag on now with no real conclusion going into the 0:17:27.320 --> 0:17:31.040 back end of next year. That is absolutely my thesis, 0:17:31.160 --> 0:17:33.480 and frankly it has been since we passed the tax 0:17:33.520 --> 0:17:36.880 bill in December of two thousand seventeen. This administration will 0:17:36.920 --> 0:17:39.720 not be passing any other major legislation. They obviously kick 0:17:39.760 --> 0:17:41.960 at the U S m c A through, We're going 0:17:42.000 --> 0:17:43.879 to have a fight over the debt ceiling and the 0:17:43.920 --> 0:17:45.760 budget in the fall. That's going to eat up the 0:17:45.840 --> 0:17:48.159 last half of this year. The President won't get an 0:17:48.160 --> 0:17:51.040 infrastructure bill, he won't get a healthcare reform bill. What 0:17:51.119 --> 0:17:53.879 can he do on his own that doesn't require Congress? 0:17:53.920 --> 0:17:57.440 Two things, immigration and trade. They go hand in hand, 0:17:57.480 --> 0:17:59.840 and as as a president is better served to per 0:18:00.000 --> 0:18:03.360 spetuate the trade war going into he is to resolve it. Now. 0:18:03.800 --> 0:18:07.880 Are the people of Capitol Hill engage in the census 0:18:07.960 --> 0:18:12.919 citizenship question? You know? I think a lot of folks are. 0:18:13.000 --> 0:18:17.119 It's definitely not my wheelhouse, but is an area where 0:18:17.320 --> 0:18:20.959 if you are UM focused on jerrymandering, if you are 0:18:21.000 --> 0:18:24.200 focused on the election and who gets to vote, which 0:18:24.240 --> 0:18:26.280 I think a lot of folks are, from President former 0:18:26.280 --> 0:18:29.840 President Obama and Eric Holder um on down to the 0:18:29.920 --> 0:18:33.120 rank and file members UM and particularly the newer members 0:18:33.200 --> 0:18:36.159 of Congress in the House and the Democratic Caucus and 0:18:36.240 --> 0:18:39.040 folks like Elizabeth Warren. This is a major issue. It's 0:18:39.080 --> 0:18:41.480 about who gets to vote, and I think if you 0:18:41.520 --> 0:18:44.280 have time to spend on that, you definitely do. Not 0:18:44.400 --> 0:18:47.880 every member is super involved. It has become harshly part 0:18:47.920 --> 0:18:50.800 of it, but it is obviously very important question. This 0:18:50.920 --> 0:18:53.040 is great Harriet Trust, thank you for the briefing on 0:18:53.200 --> 0:19:11.080 WAWI is with Veta Partners. There was a company in 0:19:11.119 --> 0:19:16.000 the twenties very quiet on Fifth Avenue in New York. 0:19:16.480 --> 0:19:20.000 It was the Allen brothers and particularly Herbert Allen Sr. 0:19:20.760 --> 0:19:24.800 And then there wasn't now Herbert Allen Jr. And what 0:19:24.920 --> 0:19:30.119 they have done is quietly affect transactions in communication in media. 0:19:30.720 --> 0:19:36.639 You can go back four years to Time Warner, Charter Communications, Verizon, Senteen, 0:19:37.240 --> 0:19:40.080 HealthNet and on and on our Paul Sweeney knows is 0:19:40.760 --> 0:19:44.760 cold and he is with Allen and Company as Sun 0:19:44.840 --> 0:19:50.199 Valley Paul. Instead of the media confab today, what is 0:19:50.240 --> 0:19:54.840 accomplished by Allan here? Is it a Davos for media 0:19:55.080 --> 0:19:58.560 or is that off the mark? No, that's absolutely right 0:19:58.600 --> 0:20:01.480 on the mark. Tom. I think just this morning, sitting 0:20:01.480 --> 0:20:04.440 out here by the hotel where they're having the first sessions, 0:20:04.560 --> 0:20:08.879 John Malone, Barry Diller, Tim Armstrong, just you know, a 0:20:08.960 --> 0:20:13.800 whole host of media, telecom and UH technology executives have 0:20:13.920 --> 0:20:16.520 just passed biased and Uh it's really a place like 0:20:16.560 --> 0:20:19.600 it's Barry Diller's that he comes here to be stimulated 0:20:19.640 --> 0:20:22.639 to learn new ideas, new technology, and people speak and 0:20:22.720 --> 0:20:27.320 all that right. Yeah, people speak and and uh you 0:20:27.359 --> 0:20:29.200 know these I think a lot of these executives come 0:20:29.200 --> 0:20:32.080 here to just to just learn to think about new 0:20:32.080 --> 0:20:35.440 technologies where their businesses may be going. Um and then 0:20:35.480 --> 0:20:38.359 of course, um, you know, to really talk about deals. 0:20:38.359 --> 0:20:40.560 Should we be doing business with you, should we be 0:20:40.760 --> 0:20:43.399 merging with you, should we be acquiring you? Uh so 0:20:43.560 --> 0:20:46.399 a lot of that takes place at this point. I mean, Lisa, 0:20:46.480 --> 0:20:48.320 if I go out there, do I need to wear 0:20:48.400 --> 0:20:51.639 my wool rich Men's flannel over shirt John Richard Brothers, 0:20:51.920 --> 0:20:55.600 you need to wear that tomorrow with your bow tie. 0:20:55.600 --> 0:20:58.840 You need to. I will be tweeting that out big 0:20:58.880 --> 0:21:03.760 Red and Black check. I cannot wait. Very it's very 0:21:03.800 --> 0:21:08.600 Tom Keene, I love it. Please, I love Mumfords. All right, 0:21:08.920 --> 0:21:11.080 I'm revealing too much about myself. Paul Sweeney, I do 0:21:11.119 --> 0:21:13.320 want to talk a little bit about the urgency. Have 0:21:13.440 --> 0:21:17.679 you ever heard a higher degree of urgency among media 0:21:17.760 --> 0:21:21.639 executives than now? Yeah, it's a great question, because you 0:21:21.680 --> 0:21:24.600 know what these media executives are dealing with really over 0:21:24.600 --> 0:21:26.159 the last couple of years that they've never had to 0:21:26.160 --> 0:21:29.600 deal with, UM, is the likes of these big technology companies, 0:21:29.640 --> 0:21:33.119 whether it's Google or Facebook or Amazon or Apple really 0:21:33.160 --> 0:21:36.560 taking a very hard look at the media communications that 0:21:36.720 --> 0:21:39.680 entertainment businesses, and so you know, they've been encroaching those 0:21:39.680 --> 0:21:43.240 technology companies have been encroaching upon you know, the businesses 0:21:43.320 --> 0:21:47.119 that have historically been Time Warner, you know, Viacom, CBS, 0:21:47.640 --> 0:21:50.240 and these executives here really need to figure out how 0:21:50.280 --> 0:21:53.480 they react, how they adapt, Uh, do they partner, do 0:21:53.560 --> 0:21:56.520 they acquire? Do they sell? Many of the media companies 0:21:56.600 --> 0:21:59.199 like Time Warner, like twenty one century Fox, you know, 0:21:59.240 --> 0:22:01.040 in fact, they're the last couple of years have decided 0:22:01.080 --> 0:22:04.280 to sell their businesses instead of trying to go head 0:22:04.320 --> 0:22:06.200 to head. So they're winners and their losers. Here. I'm 0:22:06.200 --> 0:22:09.040 looking right now at Netflix bonds and they're up the most. Uh, 0:22:09.240 --> 0:22:12.120 they're they're at the highest levels on record because Netflix 0:22:12.160 --> 0:22:16.120 is a decided winner. Is it becoming clear who the losers? 0:22:16.160 --> 0:22:19.600 Maybe who in the media landscape may not exist five 0:22:19.680 --> 0:22:23.320 years from now? Um, well, I'm gonna utter Tom Keane's 0:22:23.359 --> 0:22:24.879 favorite word as relates to the M and A and 0:22:24.920 --> 0:22:27.119 not a scale. Um. You know a lot of the 0:22:27.200 --> 0:22:29.640 smaller companies out there, whether it's the lions Gate or 0:22:30.000 --> 0:22:32.439 uh an MGM or even a Sony Studios, you know, 0:22:32.600 --> 0:22:35.120 one of the main studios in Hollywood. Um, they're all 0:22:35.119 --> 0:22:37.360 thinking about their businesses and they're saying, we're just not 0:22:37.480 --> 0:22:40.000 big enough. And when we think about it relative to 0:22:40.040 --> 0:22:42.920