1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penel podcast. I'm Paul swing you. 2 00:00:05,360 --> 00:00:07,680 Speaker 1: Along with my co host Lisa Brahma Wicks. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money. Whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,959 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:20,200 Speaker 1: at Bloomberg dot com to get a sense of where 8 00:00:20,480 --> 00:00:22,959 Speaker 1: oil is going to go or could go in a 9 00:00:22,960 --> 00:00:26,079 Speaker 1: world that has heightened political tensions coming out of the 10 00:00:26,079 --> 00:00:29,159 Speaker 1: Mid East. We welcome Dr Ellen Wald. She's president of 11 00:00:29,200 --> 00:00:32,239 Speaker 1: Transversal Consulting. She's also a nonresident Senior Fellow at the 12 00:00:32,240 --> 00:00:36,000 Speaker 1: Atlantic Council's Global Energy Sector and a Bloomberg opinion contributor 13 00:00:36,200 --> 00:00:39,120 Speaker 1: based in Jacksonville. Dr Wall, thanks so much for joining 14 00:00:39,200 --> 00:00:41,840 Speaker 1: us again. Looking at the oil over the last couple 15 00:00:41,880 --> 00:00:43,960 Speaker 1: of days since the news broke out, we certainly saw 16 00:00:44,000 --> 00:00:45,879 Speaker 1: him move up in oil, but perhaps not as much 17 00:00:45,880 --> 00:00:49,279 Speaker 1: as some traders had been thinking, or some observers had 18 00:00:49,280 --> 00:00:51,800 Speaker 1: been thinking. What's the market telling us? Yeah, I think 19 00:00:51,840 --> 00:00:54,000 Speaker 1: that the market is telling us right now is that 20 00:00:54,680 --> 00:00:58,640 Speaker 1: war is a very unlikely possibility and we can see 21 00:00:58,680 --> 00:01:01,760 Speaker 1: that the prices win up after the event happened. We 22 00:01:01,800 --> 00:01:05,760 Speaker 1: saw rise about really less than four percent for Brent. 23 00:01:06,240 --> 00:01:09,240 Speaker 1: Brent was up, and that tells us that markets believed 24 00:01:09,280 --> 00:01:14,080 Speaker 1: that some sort of temporary disruption to oil supplies or 25 00:01:14,120 --> 00:01:17,800 Speaker 1: oil transportation was likely, but that some kind of big 26 00:01:17,880 --> 00:01:21,920 Speaker 1: military conflagration, some kind of of all out war situation 27 00:01:22,040 --> 00:01:26,559 Speaker 1: is really still a very unlikely possibility. Otherwise the market, 28 00:01:26,920 --> 00:01:28,640 Speaker 1: the price of oil would have gone out much more 29 00:01:28,640 --> 00:01:31,360 Speaker 1: and been much more sustained rise. In fact, we've really 30 00:01:31,400 --> 00:01:35,200 Speaker 1: seen prices come back down today. Brent was up about 31 00:01:35,240 --> 00:01:38,200 Speaker 1: a little over seventy much earlier this morning, but it 32 00:01:38,319 --> 00:01:41,679 Speaker 1: since come down quite a bit, as I think people 33 00:01:41,720 --> 00:01:44,880 Speaker 1: realize that there's a lot of rhetoric going back and forth, 34 00:01:45,120 --> 00:01:49,640 Speaker 1: but that really the tensions are really in this in 35 00:01:49,680 --> 00:01:53,480 Speaker 1: this rhetoric, that there's very little military activity. And in fact, 36 00:01:53,640 --> 00:01:56,280 Speaker 1: one of the interesting developments is that we've seen is 37 00:01:56,320 --> 00:01:59,680 Speaker 1: that the Saudis are sending their defense minister, who is 38 00:01:59,720 --> 00:02:03,760 Speaker 1: the brother of Crown Prince Mohammed bin Salman, to the 39 00:02:03,840 --> 00:02:07,480 Speaker 1: United States to try to deescalate uh these tensions. And 40 00:02:07,560 --> 00:02:09,799 Speaker 1: that's one of the reasons is that Saudi Arabia and 41 00:02:10,000 --> 00:02:13,120 Speaker 1: and you A particularly, they don't want to get involved 42 00:02:13,200 --> 00:02:16,560 Speaker 1: in a war because any kind of military action against 43 00:02:16,600 --> 00:02:19,280 Speaker 1: Iran is going to involve have to involve them, and 44 00:02:19,320 --> 00:02:21,200 Speaker 1: they don't want to be part of any even a 45 00:02:21,200 --> 00:02:25,200 Speaker 1: coalition against this, and so really, you know, they like 46 00:02:25,360 --> 00:02:28,000 Speaker 1: to kind of beat the war drone, but when push 47 00:02:28,040 --> 00:02:30,720 Speaker 1: comes to shove, they don't want a war. What about 48 00:02:30,800 --> 00:02:35,000 Speaker 1: Iraq voting to kick US troops out of the nation, 49 00:02:35,360 --> 00:02:38,960 Speaker 1: how could that potentially play into some of what's going on. 50 00:02:39,800 --> 00:02:42,000 Speaker 1: So this is a really interesting development. I think we 51 00:02:42,040 --> 00:02:45,360 Speaker 1: need to look at exactly what did actually happen in 52 00:02:45,440 --> 00:02:47,920 Speaker 1: the Iraqi parliament. One of the important things to remember 53 00:02:48,040 --> 00:02:50,919 Speaker 1: is that this is a temporary government that that Iraq 54 00:02:51,040 --> 00:02:54,160 Speaker 1: as their prime minister, and the government resigned UH several 55 00:02:54,200 --> 00:02:57,480 Speaker 1: weeks ago due to all of the political unrest that 56 00:02:57,520 --> 00:03:00,800 Speaker 1: have been going on there, particularly the fact that that 57 00:03:00,800 --> 00:03:04,040 Speaker 1: that particular government was seen as very much in favor 58 00:03:04,040 --> 00:03:07,480 Speaker 1: of Iran and supporting Iran's influence in the region, and 59 00:03:07,520 --> 00:03:10,799 Speaker 1: there have been massive protests against that. So what we 60 00:03:10,880 --> 00:03:12,880 Speaker 1: what we did see from what I understand, the vote 61 00:03:12,880 --> 00:03:16,360 Speaker 1: by the Rocki Parliament was basically to ask the Iraqi 62 00:03:16,400 --> 00:03:21,200 Speaker 1: government to cancel assistance to the US led anti Asis coalition, 63 00:03:21,760 --> 00:03:25,160 Speaker 1: to expel foreign troops from Iraq, file a complaint about 64 00:03:25,200 --> 00:03:28,640 Speaker 1: the US, and investigate the US bombings, and that this 65 00:03:28,720 --> 00:03:33,040 Speaker 1: isn't a binding um a binding legislation in anyway. It's 66 00:03:33,040 --> 00:03:36,160 Speaker 1: really kind of a resolution. But apparently they really can't 67 00:03:36,280 --> 00:03:39,920 Speaker 1: kick the U s out because the security agreement that 68 00:03:39,920 --> 00:03:43,120 Speaker 1: that the US and Iraq have after the war means 69 00:03:43,160 --> 00:03:44,760 Speaker 1: that they really need to give I think at least 70 00:03:44,800 --> 00:03:47,720 Speaker 1: a year's notice to actually leave. So this is really 71 00:03:47,760 --> 00:03:51,000 Speaker 1: a symbolic way of saying, um, you know, we we 72 00:03:51,080 --> 00:03:53,520 Speaker 1: don't approve of what you did. But keep in mind 73 00:03:53,560 --> 00:03:58,040 Speaker 1: also that um Kurdish element Kurdish members of parliament and 74 00:03:58,080 --> 00:04:00,360 Speaker 1: also Senday members of parliament. I think we're not even 75 00:04:00,560 --> 00:04:03,240 Speaker 1: really present or included in this, So it was really 76 00:04:03,240 --> 00:04:08,240 Speaker 1: a reflection of the elements of parliament who support Iran. Ellen, 77 00:04:08,280 --> 00:04:10,280 Speaker 1: what is the what do you think will happen in 78 00:04:10,400 --> 00:04:12,120 Speaker 1: terms of retaliation? I think that's kind of the next 79 00:04:12,240 --> 00:04:14,840 Speaker 1: up here. People are kind of, you know, sensing when 80 00:04:15,080 --> 00:04:19,000 Speaker 1: will Iran retaliate, how will it retaliate, and maybe how 81 00:04:19,240 --> 00:04:23,560 Speaker 1: this might escalate. What is your best guess at this point. Well, 82 00:04:23,560 --> 00:04:26,600 Speaker 1: that's that's really the big question on everyone's minds is 83 00:04:26,640 --> 00:04:28,880 Speaker 1: what's the response going to be. Are we going to 84 00:04:28,960 --> 00:04:33,359 Speaker 1: see some kind of drone strike like we saw on 85 00:04:33,960 --> 00:04:36,479 Speaker 1: a Ramco facilities. I mean, that was really kind of 86 00:04:36,480 --> 00:04:39,400 Speaker 1: a stunning event that we saw in September, because a 87 00:04:39,400 --> 00:04:41,880 Speaker 1: lot of people didn't believe that Iran had the capability 88 00:04:42,200 --> 00:04:44,960 Speaker 1: to do that, or they know how, or the knowledge 89 00:04:45,040 --> 00:04:48,840 Speaker 1: of the detailed knowledge of a Ramco facility. So it's 90 00:04:48,839 --> 00:04:51,880 Speaker 1: certainly possible that we might see and attempt at something 91 00:04:51,960 --> 00:04:54,680 Speaker 1: like that. There could be a cyber attack. We really 92 00:04:54,680 --> 00:04:58,599 Speaker 1: need to take into consideration what Iran is capable of 93 00:04:58,760 --> 00:05:01,560 Speaker 1: at this point. U clearly closing the Streets of Horror 94 00:05:01,560 --> 00:05:05,120 Speaker 1: moves would be a major deal. Most people do consider 95 00:05:05,200 --> 00:05:07,680 Speaker 1: that or would consider that an act of war. But 96 00:05:07,760 --> 00:05:11,760 Speaker 1: keep in mind that also harms Iran because they also 97 00:05:11,839 --> 00:05:14,760 Speaker 1: rely on the Streets of Horror moves to continue their 98 00:05:14,760 --> 00:05:17,920 Speaker 1: illicit oil trade, so that would also harm their ability 99 00:05:18,040 --> 00:05:21,479 Speaker 1: to make any money off of their oil. One of 100 00:05:21,520 --> 00:05:24,279 Speaker 1: the things I think we need to be really careful about, though, 101 00:05:24,440 --> 00:05:26,520 Speaker 1: is that there's a lot of traffic in the Persian 102 00:05:26,520 --> 00:05:30,560 Speaker 1: Gulf right now, even more and the previous attacks we 103 00:05:30,600 --> 00:05:34,680 Speaker 1: saw on tankers in the region. We're really just confined 104 00:05:34,760 --> 00:05:37,560 Speaker 1: to small tankers carrying crude to a products. But if 105 00:05:37,600 --> 00:05:40,120 Speaker 1: we did see an attack on an actual crude oil tanker, 106 00:05:40,320 --> 00:05:43,440 Speaker 1: that could cause not just an issue militarily, but it 107 00:05:43,440 --> 00:05:46,440 Speaker 1: could also cause an environmental disaster, and those are the 108 00:05:46,480 --> 00:05:49,440 Speaker 1: kinds of things have to be really careful about. Ellen Wald, 109 00:05:49,680 --> 00:05:51,719 Speaker 1: thank you so much for being with us as always 110 00:05:51,720 --> 00:05:55,240 Speaker 1: and sharing your insights. Elean Wald, president of Transversal Consulting 111 00:05:55,279 --> 00:05:58,200 Speaker 1: and a nonresident Senior Fellow at the Atlantic Council's Global 112 00:05:58,320 --> 00:06:14,120 Speaker 1: Energy Center, joining us give us some perspective, Well, the 113 00:06:14,200 --> 00:06:17,560 Speaker 1: rhetoric between the US and Iran is getting increasingly heated, 114 00:06:17,600 --> 00:06:19,159 Speaker 1: but you wouldn't know it if you took a look 115 00:06:19,240 --> 00:06:22,640 Speaker 1: at equities. Actually on the day, the NASDAC has now 116 00:06:22,760 --> 00:06:28,159 Speaker 1: turned marginally positive, up nine tenths of what one tenth 117 00:06:28,160 --> 00:06:30,919 Speaker 1: of a percentage point, and you're seeing the SMP just 118 00:06:31,000 --> 00:06:35,160 Speaker 1: barely negative, which raises a question, how concerning is it 119 00:06:35,520 --> 00:06:38,600 Speaker 1: that traders seem to be completely complacent the idea of 120 00:06:38,680 --> 00:06:41,440 Speaker 1: an escalating conflict and what has been described as a 121 00:06:41,440 --> 00:06:43,520 Speaker 1: tinder box of the Middle East. Joining US now, as 122 00:06:43,520 --> 00:06:46,000 Speaker 1: Phil Orlando, Chief Equity markets stragist and head of Client 123 00:06:46,040 --> 00:06:50,400 Speaker 1: portfolio Management Federated Investors, which oversees more than eighty billion 124 00:06:50,400 --> 00:06:53,320 Speaker 1: dollars in equities and joins us here in our interactive 125 00:06:53,320 --> 00:06:56,600 Speaker 1: broker studio. So, Phil, does that concern you? The complacency? 126 00:06:56,960 --> 00:07:01,280 Speaker 1: So the Dow Jones was down three hundred points or 127 00:07:01,320 --> 00:07:04,280 Speaker 1: so on Friday, so and I think that was appropriate. 128 00:07:04,360 --> 00:07:08,040 Speaker 1: And then waking up this morning the futures at five am, 129 00:07:08,120 --> 00:07:11,840 Speaker 1: we're down another couple hundred points. And I think what's 130 00:07:11,880 --> 00:07:14,080 Speaker 1: happened over the course of the last few hours that 131 00:07:14,160 --> 00:07:18,680 Speaker 1: investors have actually thought through this? What are the Iranians 132 00:07:18,720 --> 00:07:20,920 Speaker 1: gonna do? Are they going to declare war in the 133 00:07:20,960 --> 00:07:24,320 Speaker 1: United States? That would be suicidal? Uh? Do they have 134 00:07:24,480 --> 00:07:29,280 Speaker 1: the ability to have a deleterious impact on the energy market. 135 00:07:29,880 --> 00:07:32,360 Speaker 1: You've got something like twenty or twenty percent of the 136 00:07:32,400 --> 00:07:36,400 Speaker 1: world's crude flows through the straits of hormones. So could 137 00:07:36,840 --> 00:07:41,400 Speaker 1: uh that turn into a problem from us? Absolutely, But 138 00:07:41,800 --> 00:07:43,440 Speaker 1: we're in a very different place than they were in 139 00:07:43,440 --> 00:07:47,360 Speaker 1: the seventies. Uh we were, you know, we we're now 140 00:07:47,440 --> 00:07:49,520 Speaker 1: generating twelve and a half million barrels a day. We're 141 00:07:49,520 --> 00:07:51,840 Speaker 1: the largest oil producer in the world. I've heard this 142 00:07:51,960 --> 00:07:54,880 Speaker 1: argument that basically Iran doesn't have that many tools to 143 00:07:54,920 --> 00:07:58,000 Speaker 1: retaliate against the US. That said, if they were retaliated 144 00:07:58,040 --> 00:08:00,640 Speaker 1: in any form, which seems highly likely given their threats 145 00:08:00,680 --> 00:08:03,560 Speaker 1: and given their past trajectory, what's the risk on the 146 00:08:03,560 --> 00:08:07,960 Speaker 1: opposite side, that President Trump has some sort of massive response, uh, 147 00:08:08,040 --> 00:08:10,600 Speaker 1: to sort of prove a point, and it sort of 148 00:08:10,680 --> 00:08:13,280 Speaker 1: leads leads things. Uh from that, well, it's a fair 149 00:08:13,320 --> 00:08:16,440 Speaker 1: point leads so because he said publicly that that if 150 00:08:16,480 --> 00:08:20,120 Speaker 1: you do something, we're going to have a disproportionate response, 151 00:08:20,440 --> 00:08:23,720 Speaker 1: and could that escalate into you know, a military conflict. 152 00:08:23,760 --> 00:08:27,600 Speaker 1: Absolutely do I think we'll win that sure? But but uh, 153 00:08:27,920 --> 00:08:31,640 Speaker 1: from from an uncertainty standpoint, and I think that's the 154 00:08:31,680 --> 00:08:34,040 Speaker 1: point you're trying to get to, does that create a 155 00:08:34,080 --> 00:08:37,120 Speaker 1: potential air pocket for the market? Could stocks be down, 156 00:08:37,600 --> 00:08:39,640 Speaker 1: you know, four or five percent over the space of 157 00:08:39,640 --> 00:08:42,040 Speaker 1: a couple of weeks? Is this as this you know, 158 00:08:42,080 --> 00:08:44,360 Speaker 1: sort of plays out in the answer that's absolutely yes. 159 00:08:45,160 --> 00:08:47,560 Speaker 1: But but at the end of the day, do we 160 00:08:47,600 --> 00:08:50,320 Speaker 1: think that the United States ends up on top in 161 00:08:50,320 --> 00:08:52,480 Speaker 1: in in this scenario? I think the answer to that 162 00:08:52,559 --> 00:08:55,200 Speaker 1: question is also yes, and I think investors are sort 163 00:08:55,200 --> 00:08:57,719 Speaker 1: of looking through that in terms of what are the 164 00:08:57,800 --> 00:09:01,640 Speaker 1: underlying fundamentals of the market, and you know, could we know, 165 00:09:01,760 --> 00:09:04,000 Speaker 1: you know, could we see a couple of percent down? Look, 166 00:09:04,040 --> 00:09:07,640 Speaker 1: we're up forty percent since Christmas Eve a year ago. 167 00:09:08,320 --> 00:09:10,840 Speaker 1: I mean that's phenomenal. And if we give up five 168 00:09:10,880 --> 00:09:15,360 Speaker 1: percent here, okay, fine, it's probably healthy. It washes out 169 00:09:15,400 --> 00:09:18,079 Speaker 1: some weekends and then we start to work higher again. 170 00:09:18,160 --> 00:09:20,960 Speaker 1: So for you absolutely killed it with your bullish equity 171 00:09:21,000 --> 00:09:27,040 Speaker 1: call in again, market up significant in the calendar year. 172 00:09:27,559 --> 00:09:30,880 Speaker 1: What does the market do for an encore in Well, 173 00:09:31,280 --> 00:09:34,400 Speaker 1: in a word, higher, Uh not, We're not gonna be 174 00:09:34,480 --> 00:09:37,600 Speaker 1: up or percent again. Well, we're sort of in the 175 00:09:37,600 --> 00:09:39,720 Speaker 1: eight to ten percent neighborhood. We think we get up 176 00:09:39,760 --> 00:09:43,400 Speaker 1: to about the thirty five hundred level, which would be 177 00:09:43,480 --> 00:09:46,160 Speaker 1: on a total return basis, about ten percent from where 178 00:09:46,160 --> 00:09:48,640 Speaker 1: we started the year. Uh. We think there will be 179 00:09:48,679 --> 00:09:53,280 Speaker 1: potentially increased volatility and and certainly developments here in the 180 00:09:53,280 --> 00:09:58,000 Speaker 1: Middle East would qualify as as a source of of instability. Uh, 181 00:09:58,120 --> 00:10:02,520 Speaker 1: we've got this election coming up. Uh, that certainly could 182 00:10:02,520 --> 00:10:05,240 Speaker 1: be a problem. Do we do we consummate the China 183 00:10:05,320 --> 00:10:08,240 Speaker 1: deal the way we think we will. We've got a 184 00:10:08,280 --> 00:10:10,959 Speaker 1: positive view on that, but certainly you've got no way 185 00:10:10,960 --> 00:10:12,520 Speaker 1: of knowing if there are going to be any fits 186 00:10:12,520 --> 00:10:15,280 Speaker 1: and starts here. So there's any number of things that, uh, 187 00:10:15,720 --> 00:10:18,679 Speaker 1: could create roadblocks here that could create a little volatility 188 00:10:18,679 --> 00:10:21,320 Speaker 1: in the meantime. When you talk about air pockets lower 189 00:10:21,480 --> 00:10:24,760 Speaker 1: and that things should continue to grind higher despite those 190 00:10:24,800 --> 00:10:28,000 Speaker 1: air pockets, what would you be buying if there is 191 00:10:28,040 --> 00:10:31,120 Speaker 1: some sort of significant decline. Sure, so I'll take a 192 00:10:31,120 --> 00:10:33,320 Speaker 1: look at some of the things we did towards the 193 00:10:33,400 --> 00:10:36,360 Speaker 1: end of the year. Uh, we've gotten more aggressive and 194 00:10:36,400 --> 00:10:40,840 Speaker 1: domestic small cap, We've gotten more domestic aggressive in domestic 195 00:10:41,000 --> 00:10:44,920 Speaker 1: large cap value versus growth, took some profits in growth. 196 00:10:45,240 --> 00:10:49,160 Speaker 1: Value is underperformed growth by something like eleven percentage points 197 00:10:49,200 --> 00:10:52,720 Speaker 1: over the last year. And then emerging markets. Emerging markets 198 00:10:52,920 --> 00:10:57,240 Speaker 1: have underperformed the SMP by basis points in the last year. Uh. 199 00:10:57,280 --> 00:11:00,320 Speaker 1: This China US trade deal, that's gonna be good for China. 200 00:11:00,520 --> 00:11:02,800 Speaker 1: What's going on in the energy market right now with 201 00:11:02,920 --> 00:11:05,840 Speaker 1: higher energy prices, that's gonna be good for both Brazil 202 00:11:05,920 --> 00:11:08,240 Speaker 1: and Russia. Well, I've just mentioned three of the major 203 00:11:08,280 --> 00:11:11,559 Speaker 1: economies that comprise the emerging markets an index that we 204 00:11:11,679 --> 00:11:14,960 Speaker 1: just said is underperformed by basis points over the last year. 205 00:11:15,200 --> 00:11:17,439 Speaker 1: So so if I've got some fresh money to play with, 206 00:11:17,600 --> 00:11:20,960 Speaker 1: domestic small cap, domestic large cap, value, and emerging markets 207 00:11:20,960 --> 00:11:24,200 Speaker 1: are three areas that I've looked at well in filled 208 00:11:24,240 --> 00:11:26,440 Speaker 1: the as I think back in the performance that we 209 00:11:26,480 --> 00:11:29,160 Speaker 1: had in equity markets in twenty nineteen is essentially all 210 00:11:29,640 --> 00:11:32,040 Speaker 1: multiple expansion. We didn't have a whole lot of earnings growth. 211 00:11:32,640 --> 00:11:35,960 Speaker 1: How critical is it that we get the high single digit, 212 00:11:36,000 --> 00:11:38,079 Speaker 1: close to ten percent earnings growth that we're seeing and 213 00:11:38,160 --> 00:11:40,280 Speaker 1: also are expecting the SMP this year. So what what 214 00:11:40,440 --> 00:11:44,080 Speaker 1: happened last year in terms of earnings was not unexpected. 215 00:11:44,400 --> 00:11:46,760 Speaker 1: You think about that, we had about a twenty five 216 00:11:46,840 --> 00:11:51,199 Speaker 1: or thirty percent earnings increase eighteen over seventeen, largely because 217 00:11:51,200 --> 00:11:54,360 Speaker 1: of the fiscal policy changes. Last year should have been 218 00:11:54,920 --> 00:11:57,640 Speaker 1: a year of consolidation. From an earning standpoint, we were 219 00:11:57,679 --> 00:12:00,800 Speaker 1: roped sort of small, single digit. We'll probably end up 220 00:12:00,840 --> 00:12:03,640 Speaker 1: you know, three to five percent something like that. This year, 221 00:12:03,720 --> 00:12:06,000 Speaker 1: we think we're gonna be up you know, maybe eight 222 00:12:06,000 --> 00:12:09,560 Speaker 1: percent something like that. It's not gonna be phenomenal, but 223 00:12:09,920 --> 00:12:12,600 Speaker 1: we're gonna get more multiple expansion. And the reason for 224 00:12:12,640 --> 00:12:15,760 Speaker 1: that is core PC inflation sitting here at one point 225 00:12:15,800 --> 00:12:18,880 Speaker 1: six percent, benchmark ten year treasury yields are below one 226 00:12:19,040 --> 00:12:23,040 Speaker 1: one eight percent. In that kind of an environment, multiple 227 00:12:23,160 --> 00:12:27,600 Speaker 1: should comfortably be at eighteen or nineteen times earnings. So 228 00:12:27,600 --> 00:12:30,280 Speaker 1: so you know, investors did look at and say, well, 229 00:12:30,840 --> 00:12:33,240 Speaker 1: the average multiple in stocks over the last you know, 230 00:12:33,360 --> 00:12:36,920 Speaker 1: fifty seventy hundred years fourteen or fifteen times earnings. We're 231 00:12:36,960 --> 00:12:40,839 Speaker 1: sitting at seventeen times now. Therefore the market's overvalued. That 232 00:12:40,960 --> 00:12:43,880 Speaker 1: argument is flawed, and the reason it's flawed is that 233 00:12:44,120 --> 00:12:47,360 Speaker 1: the market does not trade at some multiple based upon 234 00:12:47,480 --> 00:12:52,239 Speaker 1: what history suggests. It's a function and inverse mathematical relationship 235 00:12:52,600 --> 00:12:55,400 Speaker 1: between where interest rates and inflation are on the one hand, 236 00:12:55,559 --> 00:12:57,960 Speaker 1: and where price earnings ratios are in the other. With 237 00:12:58,200 --> 00:13:01,760 Speaker 1: so with benign interest rate to an inflation we should 238 00:13:01,800 --> 00:13:04,360 Speaker 1: get more multiple expansion over the course of the next year. 239 00:13:04,559 --> 00:13:06,679 Speaker 1: Just real quick, here, what roles the Fed play? How 240 00:13:06,760 --> 00:13:10,760 Speaker 1: much more more juice does the Fed give us equities 241 00:13:10,800 --> 00:13:13,560 Speaker 1: if it cuts rates again? Feds done? Feds on hold, 242 00:13:13,679 --> 00:13:16,600 Speaker 1: We've seen the last of the Fed last year. We 243 00:13:16,640 --> 00:13:19,560 Speaker 1: will not see them change interest rates. In our view, 244 00:13:19,640 --> 00:13:21,880 Speaker 1: for the rest of this year. Upper band of the 245 00:13:21,880 --> 00:13:25,200 Speaker 1: funds rates days at one spot seven five. Okay, but 246 00:13:25,320 --> 00:13:26,800 Speaker 1: you don't think that it's gonna Do you think that 247 00:13:26,880 --> 00:13:29,360 Speaker 1: if they were to cut rates that would help stocks, Well, 248 00:13:29,920 --> 00:13:32,520 Speaker 1: it would. I don't know what the justification for that 249 00:13:32,559 --> 00:13:35,400 Speaker 1: would be, because we do expect that there will be 250 00:13:35,440 --> 00:13:39,040 Speaker 1: a re acceleration of both economic growth and corporate earnings 251 00:13:39,080 --> 00:13:41,240 Speaker 1: growth in the back half of the year. The first 252 00:13:41,320 --> 00:13:43,440 Speaker 1: quarter is going to be a problem, alright, Just just 253 00:13:43,480 --> 00:13:46,880 Speaker 1: to be clear that the whole Boeing shutdown situation is 254 00:13:46,880 --> 00:13:49,960 Speaker 1: going to have a derivative impact throughout the economy. Normal 255 00:13:50,080 --> 00:13:53,040 Speaker 1: first quarter seasonal stuff. We've got some you know, some 256 00:13:53,120 --> 00:13:55,920 Speaker 1: lagging stuff going with China trade. But as we get 257 00:13:56,000 --> 00:13:58,000 Speaker 1: through that, as we get to the middle of the year, 258 00:13:58,360 --> 00:14:01,079 Speaker 1: in our view, we're gonna start to see economic growth 259 00:14:01,080 --> 00:14:03,839 Speaker 1: in corporate during this growth start to accelerate. Philorlando, thank 260 00:14:03,840 --> 00:14:06,200 Speaker 1: you so much for joining us. Really appreciate you being 261 00:14:06,280 --> 00:14:09,520 Speaker 1: in our Bloomberg Interactive Broker studio. Phil Orlando, chief equity 262 00:14:09,559 --> 00:14:13,600 Speaker 1: market strategist and head of Client portfolio Management at Federated Investors. 263 00:14:30,080 --> 00:14:35,080 Speaker 1: You know, after increasing SMP five, investors are looking for 264 00:14:35,160 --> 00:14:38,400 Speaker 1: some places that might offer some better risk reward opportunity. 265 00:14:38,440 --> 00:14:41,960 Speaker 1: One of those areas has been emerging markets. We want 266 00:14:42,000 --> 00:14:43,760 Speaker 1: to talk emerging markets. We talked to our good friend 267 00:14:43,840 --> 00:14:46,960 Speaker 1: Eric Fine, portfolio manager for Emerging markets fixed income and 268 00:14:47,160 --> 00:14:50,120 Speaker 1: Van Eck, a Global based here in New York City. 269 00:14:50,400 --> 00:14:52,720 Speaker 1: Eric joins us here in our Bloomberg Interactive Broker studio. 270 00:14:52,800 --> 00:14:55,440 Speaker 1: So before we just get to a broad kind of 271 00:14:55,560 --> 00:14:59,400 Speaker 1: emerging markets view, as we head into what does the 272 00:14:59,480 --> 00:15:02,400 Speaker 1: last seven two hours in terms of geopolitical risk coming 273 00:15:02,400 --> 00:15:05,320 Speaker 1: out of the Mid East, how does that factor into 274 00:15:05,320 --> 00:15:07,960 Speaker 1: your modeling, your calculus as you just think about, you know, 275 00:15:08,240 --> 00:15:11,720 Speaker 1: emerging markets. Sure with Hi, Paul High, Lisa having near 276 00:15:11,880 --> 00:15:15,360 Speaker 1: thanks so so the UH, I'd say the first thing 277 00:15:15,400 --> 00:15:17,960 Speaker 1: is there are a lot of emerging market countries and 278 00:15:18,040 --> 00:15:20,400 Speaker 1: companies in the region that issue, and that's where I'm 279 00:15:20,440 --> 00:15:23,200 Speaker 1: more comfortable saying that there could be an impact UM. 280 00:15:23,360 --> 00:15:27,200 Speaker 1: And I would say that the countries that are UH 281 00:15:27,320 --> 00:15:31,640 Speaker 1: the most subject to this are Iraq Um, which is 282 00:15:31,720 --> 00:15:33,800 Speaker 1: now being threatened by sanctions. The bonds are down and 283 00:15:33,840 --> 00:15:37,440 Speaker 1: maybe another two points today and yields aren't that high there, right, 284 00:15:37,480 --> 00:15:40,160 Speaker 1: That's the thing for a lot of these UM for 285 00:15:40,200 --> 00:15:42,760 Speaker 1: a lot of countries that are ultimately dependent on some 286 00:15:42,840 --> 00:15:46,480 Speaker 1: bottom up development that can change quickly. Um um. You 287 00:15:46,640 --> 00:15:50,520 Speaker 1: often see the last price before the event as being 288 00:15:50,560 --> 00:15:53,440 Speaker 1: a generic price for risk in a low yield world. 289 00:15:53,720 --> 00:15:56,160 Speaker 1: Oh it's this rating, it's got this yield that yields 290 00:15:56,200 --> 00:15:58,240 Speaker 1: a little too high and own it not Oh, it's 291 00:15:58,240 --> 00:16:00,400 Speaker 1: got this bottom up specific fund im And also I 292 00:16:00,400 --> 00:16:04,120 Speaker 1: think sanctions risking Iraq um uh does is a real 293 00:16:04,160 --> 00:16:07,360 Speaker 1: issue and uh this really started with Iraq war and 294 00:16:07,360 --> 00:16:09,960 Speaker 1: and the sort of opening that that creates to Iran. 295 00:16:10,040 --> 00:16:12,040 Speaker 1: Let me put it that way. The natural um I'd 296 00:16:12,040 --> 00:16:14,840 Speaker 1: say Saudi is is another country that could be affected 297 00:16:14,880 --> 00:16:17,720 Speaker 1: by this, and that it's a regular issuer, and it 298 00:16:17,760 --> 00:16:23,880 Speaker 1: would seem reasonable to me to expect Iran to leverage 299 00:16:24,600 --> 00:16:28,920 Speaker 1: Yemen over over Saudi. That was the pea stalks look 300 00:16:29,000 --> 00:16:31,640 Speaker 1: like to me like they've broken down um and there 301 00:16:31,680 --> 00:16:34,120 Speaker 1: I think the issue is that Saudi's a regular issue 302 00:16:34,200 --> 00:16:36,960 Speaker 1: or they've got big fiscal deficits um and the yields 303 00:16:37,000 --> 00:16:39,120 Speaker 1: are really low. You have three percent yield, so a 304 00:16:39,160 --> 00:16:42,160 Speaker 1: lot of this isn't priced so regionally. I think there's 305 00:16:42,200 --> 00:16:45,200 Speaker 1: some very specific implications that are important and that are 306 00:16:45,240 --> 00:16:48,280 Speaker 1: generally adverse. And I think that the main names names 307 00:16:48,400 --> 00:16:51,520 Speaker 1: national names would be Iraq and uh uh and Saudi 308 00:16:52,000 --> 00:16:55,600 Speaker 1: um um. In terms of anything more broadly, UM, I 309 00:16:55,640 --> 00:16:58,360 Speaker 1: would say it's uh, it's it's a bit of a stretch. 310 00:16:58,440 --> 00:17:01,000 Speaker 1: I think you really have to First, I think one 311 00:17:01,040 --> 00:17:04,879 Speaker 1: should be reluctant to hang an entire portfolio thesis based 312 00:17:04,920 --> 00:17:06,960 Speaker 1: on developments in the Middle East. You know, it's just 313 00:17:07,040 --> 00:17:11,399 Speaker 1: really really trick um and uh um. And second, central 314 00:17:11,400 --> 00:17:14,480 Speaker 1: banks are so activated now UM that it's arguably a 315 00:17:14,560 --> 00:17:19,000 Speaker 1: positive UM. And Third, I caution that this is what happened. 316 00:17:19,240 --> 00:17:21,479 Speaker 1: As dramatic as it is, it is a line cross 317 00:17:21,840 --> 00:17:25,040 Speaker 1: UM is part of of of broader trends that have 318 00:17:25,119 --> 00:17:30,000 Speaker 1: already started. The borders that existed are being rethought UM. 319 00:17:30,040 --> 00:17:32,879 Speaker 1: And this and this didn't just start last week, Okay. 320 00:17:32,960 --> 00:17:37,600 Speaker 1: Arguably positive because it could potentially ignite the central banks 321 00:17:37,640 --> 00:17:41,320 Speaker 1: out there to stimulate further. Is that the idea, UM, 322 00:17:41,880 --> 00:17:44,920 Speaker 1: it's a reminder that to to the extent that central 323 00:17:44,960 --> 00:17:47,880 Speaker 1: banks were getting a little emboldened by growth, or we're 324 00:17:47,920 --> 00:17:49,439 Speaker 1: at risk of it, I think it's a little too 325 00:17:49,480 --> 00:17:51,720 Speaker 1: early to say that they were getting emboldened by by growth, 326 00:17:51,760 --> 00:17:53,520 Speaker 1: but to the extent that that was a scenario or 327 00:17:53,560 --> 00:17:55,720 Speaker 1: a month or two from now, maybe that's put back 328 00:17:55,760 --> 00:17:57,639 Speaker 1: a few more months. I don't think it's a complete 329 00:17:57,720 --> 00:17:59,720 Speaker 1: I don't think you're gonna see statements from central banks 330 00:18:00,080 --> 00:18:03,600 Speaker 1: on this, but it's we will be reminded of Central 331 00:18:03,640 --> 00:18:06,960 Speaker 1: bank forbearance. What are the big conundrums is how much 332 00:18:07,040 --> 00:18:10,600 Speaker 1: further the Federal Reserve than the ECB can can stimulate 333 00:18:10,800 --> 00:18:13,960 Speaker 1: global risk markets? And I have to wonder, you know, 334 00:18:14,160 --> 00:18:17,800 Speaker 1: doesn't at a certain point further rate cuts signal that 335 00:18:17,880 --> 00:18:20,639 Speaker 1: the economy is even worse than people expected, and it 336 00:18:20,680 --> 00:18:23,119 Speaker 1: doesn't really give that much of a boost to uh 337 00:18:23,280 --> 00:18:26,239 Speaker 1: sort of the relative valuations and risk assets. Wow. The 338 00:18:26,240 --> 00:18:29,480 Speaker 1: third question, and we're into this issue of the reversal rate. 339 00:18:29,480 --> 00:18:32,000 Speaker 1: I think it's the hugest question, and it's going to 340 00:18:32,080 --> 00:18:34,920 Speaker 1: be a question we're gonna be asking for years is 341 00:18:35,160 --> 00:18:39,280 Speaker 1: are we at the end? Are we? Is this experiment over? Um? 342 00:18:39,320 --> 00:18:43,840 Speaker 1: I would you know, I call myself a recovering economist, 343 00:18:43,880 --> 00:18:45,800 Speaker 1: so my and I'm going to give a you know 344 00:18:45,840 --> 00:18:48,560 Speaker 1: that kind of economics type of answer, which it depends, right, 345 00:18:48,600 --> 00:18:52,760 Speaker 1: it depends on this which like economists anonymous, there should 346 00:18:53,200 --> 00:18:55,440 Speaker 1: should be after the financial crisis, the global financials where 347 00:18:55,440 --> 00:18:57,560 Speaker 1: there should be like it's any bar in midtown, you know, 348 00:18:57,880 --> 00:19:01,760 Speaker 1: sitting on the end. I think the issue is clearest 349 00:19:01,840 --> 00:19:04,480 Speaker 1: in Europe, where you've seen a very dramatic increase in 350 00:19:04,520 --> 00:19:07,760 Speaker 1: the balance sheet and really no transmission into growth. It's 351 00:19:07,960 --> 00:19:10,560 Speaker 1: mercier in uh in in the U S where you 352 00:19:10,560 --> 00:19:15,000 Speaker 1: can see some success, but um, Europe has a uh. 353 00:19:15,000 --> 00:19:16,879 Speaker 1: Europe is really where I think that that issue is 354 00:19:16,880 --> 00:19:20,120 Speaker 1: coming to the four One way of putting your question 355 00:19:20,440 --> 00:19:22,880 Speaker 1: is or one way of answering your question is, yeah, 356 00:19:23,000 --> 00:19:25,400 Speaker 1: some of the central banks, maybe all of the developed ones, 357 00:19:25,440 --> 00:19:28,119 Speaker 1: but certainly I think Europe's at the forefront of the problems. 358 00:19:28,240 --> 00:19:33,919 Speaker 1: UM uh. They either high rates and uh and bankrupt governments, 359 00:19:34,040 --> 00:19:39,240 Speaker 1: or they cut rates and bankrupt financial systems, which are 360 00:19:39,280 --> 00:19:42,399 Speaker 1: contingent liability of governments. So that's a way of describing 361 00:19:42,600 --> 00:19:45,520 Speaker 1: the condom. If they keep interest rate slow, the financial 362 00:19:45,600 --> 00:19:49,120 Speaker 1: banking pensions is in the financial system, um UM doesn't 363 00:19:49,280 --> 00:19:53,399 Speaker 1: earn enough to remain solvent. Arguably right or that's a 364 00:19:53,480 --> 00:19:55,960 Speaker 1: challenge long term. I'm just a big picture theory theoretical, 365 00:19:56,000 --> 00:19:59,000 Speaker 1: so UM and uh UM. But if rates are raised 366 00:19:59,080 --> 00:20:02,639 Speaker 1: to a level that that the banking system, for example 367 00:20:02,640 --> 00:20:06,480 Speaker 1: in Europe, is probably lobbying for UM. Then government borrowing 368 00:20:06,480 --> 00:20:10,640 Speaker 1: costs become a real issue, particularly for the peripheral, higher 369 00:20:10,760 --> 00:20:14,080 Speaker 1: indebted countries. Now this is very theoretical, not really what 370 00:20:14,160 --> 00:20:16,200 Speaker 1: we do day to day. Any I think it's a 371 00:20:16,240 --> 00:20:18,640 Speaker 1: great question, what are you playing in what's your highest 372 00:20:18,640 --> 00:20:22,160 Speaker 1: conviction idea UM highest conviction ideas. Two groups of ideas. 373 00:20:22,240 --> 00:20:23,520 Speaker 1: One is I think it is going to be a 374 00:20:23,520 --> 00:20:26,359 Speaker 1: bumpy road, part partially because of the reasons Lisa mentioned 375 00:20:26,840 --> 00:20:29,560 Speaker 1: longer term, so maybe you know second, third quarter. And 376 00:20:29,560 --> 00:20:31,119 Speaker 1: one of the problems I have is a lot of 377 00:20:31,119 --> 00:20:32,720 Speaker 1: people think what I'm about to say is it will 378 00:20:32,720 --> 00:20:34,760 Speaker 1: have a good quarter or so and then then it 379 00:20:34,800 --> 00:20:37,239 Speaker 1: will be tricky. But one group of ideas is the 380 00:20:37,240 --> 00:20:39,560 Speaker 1: ones that that we think should last the whole year, 381 00:20:39,600 --> 00:20:41,199 Speaker 1: and they're similar to what we do what we did 382 00:20:41,280 --> 00:20:43,760 Speaker 1: last year. Things where we're waking up in the morning 383 00:20:43,800 --> 00:20:45,920 Speaker 1: and not thinking about these sorts of questions where we're 384 00:20:45,920 --> 00:20:48,400 Speaker 1: not thinking about Middle East developments, we're not thinking about 385 00:20:48,440 --> 00:20:51,200 Speaker 1: oil upper down or rates upper down. So Argentina comes 386 00:20:51,240 --> 00:20:53,600 Speaker 1: to mind. We're waking up in the morning and following Argentina, 387 00:20:53,680 --> 00:20:56,720 Speaker 1: we think there's too much pessimism that government's basically market 388 00:20:56,760 --> 00:21:00,640 Speaker 1: friendly and as and the biggest determined to remind people, 389 00:21:00,680 --> 00:21:04,240 Speaker 1: the biggest determined of present value in a dicing in 390 00:21:04,320 --> 00:21:08,560 Speaker 1: a potential default situation is nonpayment when you're and that's 391 00:21:08,560 --> 00:21:11,720 Speaker 1: when you should be discounting a zero payment at and 392 00:21:11,760 --> 00:21:13,399 Speaker 1: so you're losing a lot of money as long as 393 00:21:13,400 --> 00:21:16,159 Speaker 1: they're staying current, which all indications are they plan on it. 394 00:21:16,600 --> 00:21:18,320 Speaker 1: Um Um. I think that's a very very good situation, 395 00:21:18,359 --> 00:21:21,560 Speaker 1: but again, bottom up, uncorrelated. We're waking up looking doing 396 00:21:21,560 --> 00:21:26,040 Speaker 1: our day job. That's one Uruguay another really interesting local market, 397 00:21:26,080 --> 00:21:28,160 Speaker 1: not big part of the index, but we have significant 398 00:21:28,160 --> 00:21:31,400 Speaker 1: exposure there. You're getting around ten percent yields UM low 399 00:21:31,400 --> 00:21:34,120 Speaker 1: and declining inflation and a new government elected to deal 400 00:21:34,119 --> 00:21:36,159 Speaker 1: with their one problem fiscal But again I'm waking up 401 00:21:36,160 --> 00:21:38,320 Speaker 1: in the morning looking for the next few quarters. Are 402 00:21:38,320 --> 00:21:40,359 Speaker 1: they dealing with their fiscal programs? So those are some 403 00:21:40,440 --> 00:21:43,040 Speaker 1: of the unusual ones that could last for your Ukraine's 404 00:21:43,040 --> 00:21:46,200 Speaker 1: another one i am F program. The more mainstream ones 405 00:21:46,240 --> 00:21:49,000 Speaker 1: that could benefit UM but may not last the whole 406 00:21:49,080 --> 00:21:53,280 Speaker 1: year are Indonesia, Growth reform, South Africa, a lot of 407 00:21:53,280 --> 00:21:56,320 Speaker 1: bad News priced in and Brazil really can't say enough 408 00:21:56,320 --> 00:22:02,200 Speaker 1: good things about Brazil. Fine wonderful, wonderful synopsis, Zil, Argentina, Uruguay. 409 00:22:02,520 --> 00:22:04,840 Speaker 1: Some of the picks here, Eric Fine, portfolio manager of 410 00:22:04,920 --> 00:22:08,080 Speaker 1: Emerging Marcus Fixing Come Strategy at Vanneck Global, based in 411 00:22:08,160 --> 00:22:12,080 Speaker 1: New York. Joining us here in our interactive broker studios. 412 00:22:25,480 --> 00:22:28,480 Speaker 1: As time continues, we are piecing together the movie that 413 00:22:28,640 --> 00:22:31,560 Speaker 1: is Carlos Gones life. Joining us now is Alan Kat's 414 00:22:31,600 --> 00:22:36,040 Speaker 1: financial investigations team leader for Bloomberg News based in Paris, 415 00:22:36,200 --> 00:22:40,000 Speaker 1: and Alan Woman put out a piece this morning really 416 00:22:40,200 --> 00:22:44,639 Speaker 1: detailing everything we know about his arrest, his a hundred 417 00:22:44,720 --> 00:22:49,120 Speaker 1: days in solitary confinement through to his escape from Japan. 418 00:22:49,440 --> 00:22:51,680 Speaker 1: Can you give us a sense of sort of the 419 00:22:52,040 --> 00:22:55,920 Speaker 1: narrative here as it unfolds. So, the way it worked 420 00:22:55,920 --> 00:22:58,359 Speaker 1: with Carlos Gone was that he was arrested back in 421 00:22:58,400 --> 00:23:02,160 Speaker 1: November of twenty eighteen, and as you mentioned, he spent 422 00:23:02,200 --> 00:23:04,160 Speaker 1: a lot of time and saw their confinement. They kept 423 00:23:04,160 --> 00:23:07,520 Speaker 1: sort of releasing him and then re arresting him. Uh, 424 00:23:07,520 --> 00:23:10,600 Speaker 1: And there was a very sort of confusing period. Uh. 425 00:23:10,640 --> 00:23:14,479 Speaker 1: But things got a lot more pressure packed uh in 426 00:23:14,560 --> 00:23:17,399 Speaker 1: December of this year so he had already been either 427 00:23:17,480 --> 00:23:20,000 Speaker 1: in jail or under house arrest for for more than 428 00:23:20,040 --> 00:23:23,680 Speaker 1: a year, and UH this December he found out that 429 00:23:23,760 --> 00:23:28,120 Speaker 1: his trial was likely to be delayed, possibly in one 430 00:23:28,119 --> 00:23:30,520 Speaker 1: sort of leaving him in a legal limbo for at 431 00:23:30,600 --> 00:23:35,040 Speaker 1: least another year. Japanese prosecutors had begun interviewing UH some 432 00:23:35,119 --> 00:23:38,119 Speaker 1: of his family members, including his son Anthony, who they 433 00:23:38,119 --> 00:23:40,560 Speaker 1: also accused of having been involved in some of the 434 00:23:40,640 --> 00:23:44,160 Speaker 1: financial shenanigans. They claimed that that Carlos Gone was involved 435 00:23:44,320 --> 00:23:46,480 Speaker 1: in UH and he didn't there didn't seem to be 436 00:23:46,520 --> 00:23:49,920 Speaker 1: any way out, and that that appears to be sort 437 00:23:49,920 --> 00:23:52,720 Speaker 1: of the real motive for him to leave now. But 438 00:23:52,760 --> 00:23:55,840 Speaker 1: the other issue was an issue of opportunity. Right, so 439 00:23:55,960 --> 00:23:58,560 Speaker 1: when in any sort of spy caper, you know, Ocean's 440 00:23:58,560 --> 00:24:00,879 Speaker 1: eleven type scenario, you need to have sort of that 441 00:24:00,960 --> 00:24:03,960 Speaker 1: moment when the time is right to jump. And it 442 00:24:04,000 --> 00:24:07,119 Speaker 1: appears that he had been preparing this for months, dealing 443 00:24:07,160 --> 00:24:11,040 Speaker 1: with people who have been specialized for decades in you know, 444 00:24:11,119 --> 00:24:15,320 Speaker 1: ex fil trading, UH executives who are have been kidnapped 445 00:24:15,400 --> 00:24:19,080 Speaker 1: or re recovering abducted children, or fighting on various sides 446 00:24:19,080 --> 00:24:22,120 Speaker 1: of militia and during a civil war, UM, and he'd 447 00:24:22,119 --> 00:24:23,960 Speaker 1: been dealing with them for months. But one of the 448 00:24:24,000 --> 00:24:26,680 Speaker 1: things that came up just now was that there was 449 00:24:26,680 --> 00:24:30,040 Speaker 1: a combination of it was a holiday period in Japan, 450 00:24:30,119 --> 00:24:33,000 Speaker 1: so government offices were going to be closed for several 451 00:24:33,040 --> 00:24:36,280 Speaker 1: days at least, and one of the main groups that 452 00:24:36,320 --> 00:24:38,480 Speaker 1: have been sort of following Going every time he would 453 00:24:38,560 --> 00:24:41,920 Speaker 1: leave his apartment was where series of private investigators paid 454 00:24:41,960 --> 00:24:45,240 Speaker 1: for by Nissan Ghones lawyer had protested this was violating 455 00:24:45,280 --> 00:24:48,600 Speaker 1: his rights, and those investigators appears to have appeared to 456 00:24:48,600 --> 00:24:51,040 Speaker 1: have backed off, and so that gave Going this moment 457 00:24:51,119 --> 00:24:53,360 Speaker 1: the sort of golden chance he that he had to take, 458 00:24:53,440 --> 00:24:55,080 Speaker 1: or felt he had to take UH if he was 459 00:24:55,119 --> 00:24:56,600 Speaker 1: ever going to get out of Japan, And so he 460 00:24:56,640 --> 00:25:01,520 Speaker 1: did UH and amazingly was successful in Hi amazing stories. So, Allen, 461 00:25:01,560 --> 00:25:04,240 Speaker 1: I think the next big piece of news is Mr 462 00:25:04,280 --> 00:25:06,920 Speaker 1: Gohen is saying he's gonna have a press conference I 463 00:25:06,920 --> 00:25:09,320 Speaker 1: guess in Lebanon sometime this week. Give us the details 464 00:25:09,320 --> 00:25:11,960 Speaker 1: are what we know. Uh. He's going to speak in 465 00:25:12,040 --> 00:25:16,399 Speaker 1: Lebanon on Wednesday at three pm local time. UH. And 466 00:25:17,280 --> 00:25:20,600 Speaker 1: he claims, or through his lawyers mostly he claims that 467 00:25:21,040 --> 00:25:23,719 Speaker 1: he is going to use this to try to press 468 00:25:23,880 --> 00:25:29,359 Speaker 1: his case for why UH the allegations against him or untrue, 469 00:25:29,400 --> 00:25:33,160 Speaker 1: politically motivated part of a vendetta against him, both by 470 00:25:33,760 --> 00:25:38,280 Speaker 1: people within Nissan also UH from the Japanese government. UH 471 00:25:38,480 --> 00:25:42,320 Speaker 1: in large part because of his efforts who merge Nissan 472 00:25:42,640 --> 00:25:46,240 Speaker 1: with Renault. As you may know, Renault, the French carmaker, 473 00:25:46,240 --> 00:25:50,160 Speaker 1: ownscent of Nissan, nissancent of Renault. But in this alliance 474 00:25:50,160 --> 00:25:52,040 Speaker 1: that they've had for the last twenty years, Renault has 475 00:25:52,080 --> 00:25:53,960 Speaker 1: essentially had the upper hand for most of the time 476 00:25:54,040 --> 00:25:57,520 Speaker 1: since it essentially saves Nissan from bankruptcy when they when 477 00:25:57,560 --> 00:26:00,719 Speaker 1: they first did the deal. Um, So this press conference 478 00:26:00,760 --> 00:26:03,520 Speaker 1: is going to be going essentially going side of the 479 00:26:03,560 --> 00:26:07,680 Speaker 1: story now he's had He had one video press conference 480 00:26:07,680 --> 00:26:09,800 Speaker 1: that he did while he was still under house arrest 481 00:26:09,800 --> 00:26:12,639 Speaker 1: in Japan, which supposedly was going to unveil all sorts 482 00:26:12,640 --> 00:26:15,000 Speaker 1: of new information that was going to be terrible for 483 00:26:15,119 --> 00:26:18,439 Speaker 1: new sounding great for Carlos. Gone didn't really come up 484 00:26:18,440 --> 00:26:21,119 Speaker 1: with much new. So it's not clear, at least not 485 00:26:21,119 --> 00:26:23,560 Speaker 1: clear to me, that that there's necessarily going to be 486 00:26:23,560 --> 00:26:25,480 Speaker 1: a lot of new information or a lot of really 487 00:26:25,520 --> 00:26:28,080 Speaker 1: exculpatory information that that going is going to come out 488 00:26:28,080 --> 00:26:29,960 Speaker 1: with on Wednesday. But it's certainly going to be exciting. 489 00:26:30,280 --> 00:26:32,680 Speaker 1: It's certainly give me exciting exactly right, Alan Cats, thanks 490 00:26:32,720 --> 00:26:35,399 Speaker 1: so much for joining us Allen as a financial Investigations 491 00:26:35,400 --> 00:26:38,160 Speaker 1: team leader for Bloomberg News in our Paris bureau. What's 492 00:26:38,160 --> 00:26:42,640 Speaker 1: this fascinating story continuing to unfold? I'm really looking forward 493 00:26:42,640 --> 00:26:45,280 Speaker 1: to see what Mr Gohan says that this press conference 494 00:26:45,320 --> 00:26:48,000 Speaker 1: on Wednesday maybe gets more details as well as who 495 00:26:48,000 --> 00:26:51,320 Speaker 1: plays Carlos Cone in the upcoming roid biopic that we 496 00:26:51,320 --> 00:26:54,520 Speaker 1: can expect. Thanks for listening to the Bloomberg Piano podcast. 497 00:26:54,680 --> 00:26:57,280 Speaker 1: You can subscribe and listen to interviews at Apple Podcasts 498 00:26:57,359 --> 00:27:00,360 Speaker 1: or whatever podcast platform you prefer. On Paul Sween, I'm 499 00:27:00,359 --> 00:27:03,080 Speaker 1: on Twitter at pt Sweeney. I'm Lisa abram Woods. I'm 500 00:27:03,080 --> 00:27:05,960 Speaker 1: on Twitter at Lisa abram woits one. Before the podcast, 501 00:27:06,000 --> 00:27:08,600 Speaker 1: you can always catch us worldwide on'm Bloomberg Radio.