Speaker 1: Welcome to the Bloomberg Penel podcast. I'm Paul swing you.
Speaker 1: Along with my co host Lisa Brahma Wicks. Each day
Speaker 1: we bring you the most noteworthy and useful interviews for
Speaker 1: you and your money. Whether at the grocery store or
Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple
Speaker 1: podcast or wherever you listen to podcasts, as well as
Speaker 1: at Bloomberg dot com to get a sense of where
Speaker 1: oil is going to go or could go in a
Speaker 1: world that has heightened political tensions coming out of the
Speaker 1: Mid East. We welcome Dr Ellen Wald. She's president of
Speaker 1: Transversal Consulting. She's also a nonresident Senior Fellow at the
Speaker 1: Atlantic Council's Global Energy Sector and a Bloomberg opinion contributor
Speaker 1: based in Jacksonville. Dr Wall, thanks so much for joining
Speaker 1: us again. Looking at the oil over the last couple
Speaker 1: of days since the news broke out, we certainly saw
Speaker 1: him move up in oil, but perhaps not as much
Speaker 1: as some traders had been thinking, or some observers had
Speaker 1: been thinking. What's the market telling us? Yeah, I think
Speaker 1: that the market is telling us right now is that
Speaker 1: war is a very unlikely possibility and we can see
Speaker 1: that the prices win up after the event happened. We
Speaker 1: saw rise about really less than four percent for Brent.
Speaker 1: Brent was up, and that tells us that markets believed
Speaker 1: that some sort of temporary disruption to oil supplies or
Speaker 1: oil transportation was likely, but that some kind of big
Speaker 1: military conflagration, some kind of of all out war situation
Speaker 1: is really still a very unlikely possibility. Otherwise the market,
Speaker 1: the price of oil would have gone out much more
Speaker 1: and been much more sustained rise. In fact, we've really
Speaker 1: seen prices come back down today. Brent was up about
Speaker 1: a little over seventy much earlier this morning, but it
Speaker 1: since come down quite a bit, as I think people
Speaker 1: realize that there's a lot of rhetoric going back and forth,
Speaker 1: but that really the tensions are really in this in
Speaker 1: this rhetoric, that there's very little military activity. And in fact,
Speaker 1: one of the interesting developments is that we've seen is
Speaker 1: that the Saudis are sending their defense minister, who is
Speaker 1: the brother of Crown Prince Mohammed bin Salman, to the
Speaker 1: United States to try to deescalate uh these tensions. And
Speaker 1: that's one of the reasons is that Saudi Arabia and
Speaker 1: and you A particularly, they don't want to get involved
Speaker 1: in a war because any kind of military action against
Speaker 1: Iran is going to involve have to involve them, and
Speaker 1: they don't want to be part of any even a
Speaker 1: coalition against this, and so really, you know, they like
Speaker 1: to kind of beat the war drone, but when push
Speaker 1: comes to shove, they don't want a war. What about
Speaker 1: Iraq voting to kick US troops out of the nation,
Speaker 1: how could that potentially play into some of what's going on.
Speaker 1: So this is a really interesting development. I think we
Speaker 1: need to look at exactly what did actually happen in
Speaker 1: the Iraqi parliament. One of the important things to remember
Speaker 1: is that this is a temporary government that that Iraq
Speaker 1: as their prime minister, and the government resigned UH several
Speaker 1: weeks ago due to all of the political unrest that
Speaker 1: have been going on there, particularly the fact that that
Speaker 1: that particular government was seen as very much in favor
Speaker 1: of Iran and supporting Iran's influence in the region, and
Speaker 1: there have been massive protests against that. So what we
Speaker 1: what we did see from what I understand, the vote
Speaker 1: by the Rocki Parliament was basically to ask the Iraqi
Speaker 1: government to cancel assistance to the US led anti Asis coalition,
Speaker 1: to expel foreign troops from Iraq, file a complaint about
Speaker 1: the US, and investigate the US bombings, and that this
Speaker 1: isn't a binding um a binding legislation in anyway. It's
Speaker 1: really kind of a resolution. But apparently they really can't
Speaker 1: kick the U s out because the security agreement that
Speaker 1: that the US and Iraq have after the war means
Speaker 1: that they really need to give I think at least
Speaker 1: a year's notice to actually leave. So this is really
Speaker 1: a symbolic way of saying, um, you know, we we
Speaker 1: don't approve of what you did. But keep in mind
Speaker 1: also that um Kurdish element Kurdish members of parliament and
Speaker 1: also Senday members of parliament. I think we're not even
Speaker 1: really present or included in this, So it was really
Speaker 1: a reflection of the elements of parliament who support Iran. Ellen,
Speaker 1: what is the what do you think will happen in
Speaker 1: terms of retaliation? I think that's kind of the next
Speaker 1: up here. People are kind of, you know, sensing when
Speaker 1: will Iran retaliate, how will it retaliate, and maybe how
Speaker 1: this might escalate. What is your best guess at this point. Well,
Speaker 1: that's that's really the big question on everyone's minds is
Speaker 1: what's the response going to be. Are we going to
Speaker 1: see some kind of drone strike like we saw on
Speaker 1: a Ramco facilities. I mean, that was really kind of
Speaker 1: a stunning event that we saw in September, because a
Speaker 1: lot of people didn't believe that Iran had the capability
Speaker 1: to do that, or they know how, or the knowledge
Speaker 1: of the detailed knowledge of a Ramco facility. So it's
Speaker 1: certainly possible that we might see and attempt at something
Speaker 1: like that. There could be a cyber attack. We really
Speaker 1: need to take into consideration what Iran is capable of
Speaker 1: at this point. U clearly closing the Streets of Horror
Speaker 1: moves would be a major deal. Most people do consider
Speaker 1: that or would consider that an act of war. But
Speaker 1: keep in mind that also harms Iran because they also
Speaker 1: rely on the Streets of Horror moves to continue their
Speaker 1: illicit oil trade, so that would also harm their ability
Speaker 1: to make any money off of their oil. One of
Speaker 1: the things I think we need to be really careful about, though,
Speaker 1: is that there's a lot of traffic in the Persian
Speaker 1: Gulf right now, even more and the previous attacks we
Speaker 1: saw on tankers in the region. We're really just confined
Speaker 1: to small tankers carrying crude to a products. But if
Speaker 1: we did see an attack on an actual crude oil tanker,
Speaker 1: that could cause not just an issue militarily, but it
Speaker 1: could also cause an environmental disaster, and those are the
Speaker 1: kinds of things have to be really careful about. Ellen Wald,
Speaker 1: thank you so much for being with us as always
Speaker 1: and sharing your insights. Elean Wald, president of Transversal Consulting
Speaker 1: and a nonresident Senior Fellow at the Atlantic Council's Global
Speaker 1: Energy Center, joining us give us some perspective, Well, the
Speaker 1: rhetoric between the US and Iran is getting increasingly heated,
Speaker 1: but you wouldn't know it if you took a look
Speaker 1: at equities. Actually on the day, the NASDAC has now
Speaker 1: turned marginally positive, up nine tenths of what one tenth
Speaker 1: of a percentage point, and you're seeing the SMP just
Speaker 1: barely negative, which raises a question, how concerning is it
Speaker 1: that traders seem to be completely complacent the idea of
Speaker 1: an escalating conflict and what has been described as a
Speaker 1: tinder box of the Middle East. Joining US now, as
Speaker 1: Phil Orlando, Chief Equity markets stragist and head of Client
Speaker 1: portfolio Management Federated Investors, which oversees more than eighty billion
Speaker 1: dollars in equities and joins us here in our interactive
Speaker 1: broker studio. So, Phil, does that concern you? The complacency?
Speaker 1: So the Dow Jones was down three hundred points or
Speaker 1: so on Friday, so and I think that was appropriate.
Speaker 1: And then waking up this morning the futures at five am,
Speaker 1: we're down another couple hundred points. And I think what's
Speaker 1: happened over the course of the last few hours that
Speaker 1: investors have actually thought through this? What are the Iranians
Speaker 1: gonna do? Are they going to declare war in the
Speaker 1: United States? That would be suicidal? Uh? Do they have
Speaker 1: the ability to have a deleterious impact on the energy market.
Speaker 1: You've got something like twenty or twenty percent of the
Speaker 1: world's crude flows through the straits of hormones. So could
Speaker 1: uh that turn into a problem from us? Absolutely, But
Speaker 1: we're in a very different place than they were in
Speaker 1: the seventies. Uh we were, you know, we we're now
Speaker 1: generating twelve and a half million barrels a day. We're
Speaker 1: the largest oil producer in the world. I've heard this
Speaker 1: argument that basically Iran doesn't have that many tools to
Speaker 1: retaliate against the US. That said, if they were retaliated
Speaker 1: in any form, which seems highly likely given their threats
Speaker 1: and given their past trajectory, what's the risk on the
Speaker 1: opposite side, that President Trump has some sort of massive response, uh,
Speaker 1: to sort of prove a point, and it sort of
Speaker 1: leads leads things. Uh from that, well, it's a fair
Speaker 1: point leads so because he said publicly that that if
Speaker 1: you do something, we're going to have a disproportionate response,
Speaker 1: and could that escalate into you know, a military conflict.
Speaker 1: Absolutely do I think we'll win that sure? But but uh,
Speaker 1: from from an uncertainty standpoint, and I think that's the
Speaker 1: point you're trying to get to, does that create a
Speaker 1: potential air pocket for the market? Could stocks be down,
Speaker 1: you know, four or five percent over the space of
Speaker 1: a couple of weeks? Is this as this you know,
Speaker 1: sort of plays out in the answer that's absolutely yes.
Speaker 1: But but at the end of the day, do we
Speaker 1: think that the United States ends up on top in
Speaker 1: in in this scenario? I think the answer to that
Speaker 1: question is also yes, and I think investors are sort
Speaker 1: of looking through that in terms of what are the
Speaker 1: underlying fundamentals of the market, and you know, could we know,
Speaker 1: you know, could we see a couple of percent down? Look,
Speaker 1: we're up forty percent since Christmas Eve a year ago.
Speaker 1: I mean that's phenomenal. And if we give up five
Speaker 1: percent here, okay, fine, it's probably healthy. It washes out
Speaker 1: some weekends and then we start to work higher again.
Speaker 1: So for you absolutely killed it with your bullish equity
Speaker 1: call in again, market up significant in the calendar year.
Speaker 1: What does the market do for an encore in Well,
Speaker 1: in a word, higher, Uh not, We're not gonna be
Speaker 1: up or percent again. Well, we're sort of in the
Speaker 1: eight to ten percent neighborhood. We think we get up
Speaker 1: to about the thirty five hundred level, which would be
Speaker 1: on a total return basis, about ten percent from where
Speaker 1: we started the year. Uh. We think there will be
Speaker 1: potentially increased volatility and and certainly developments here in the
Speaker 1: Middle East would qualify as as a source of of instability. Uh,
Speaker 1: we've got this election coming up. Uh, that certainly could
Speaker 1: be a problem. Do we do we consummate the China
Speaker 1: deal the way we think we will. We've got a
Speaker 1: positive view on that, but certainly you've got no way
Speaker 1: of knowing if there are going to be any fits
Speaker 1: and starts here. So there's any number of things that, uh,
Speaker 1: could create roadblocks here that could create a little volatility
Speaker 1: in the meantime. When you talk about air pockets lower
Speaker 1: and that things should continue to grind higher despite those
Speaker 1: air pockets, what would you be buying if there is
Speaker 1: some sort of significant decline. Sure, so I'll take a
Speaker 1: look at some of the things we did towards the
Speaker 1: end of the year. Uh, we've gotten more aggressive and
Speaker 1: domestic small cap, We've gotten more domestic aggressive in domestic
Speaker 1: large cap value versus growth, took some profits in growth.
Speaker 1: Value is underperformed growth by something like eleven percentage points
Speaker 1: over the last year. And then emerging markets. Emerging markets
Speaker 1: have underperformed the SMP by basis points in the last year. Uh.
Speaker 1: This China US trade deal, that's gonna be good for China.
Speaker 1: What's going on in the energy market right now with
Speaker 1: higher energy prices, that's gonna be good for both Brazil
Speaker 1: and Russia. Well, I've just mentioned three of the major
Speaker 1: economies that comprise the emerging markets an index that we
Speaker 1: just said is underperformed by basis points over the last year.
Speaker 1: So so if I've got some fresh money to play with,
Speaker 1: domestic small cap, domestic large cap, value, and emerging markets
Speaker 1: are three areas that I've looked at well in filled
Speaker 1: the as I think back in the performance that we
Speaker 1: had in equity markets in twenty nineteen is essentially all
Speaker 1: multiple expansion. We didn't have a whole lot of earnings growth.
Speaker 1: How critical is it that we get the high single digit,
Speaker 1: close to ten percent earnings growth that we're seeing and
Speaker 1: also are expecting the SMP this year. So what what
Speaker 1: happened last year in terms of earnings was not unexpected.
Speaker 1: You think about that, we had about a twenty five
Speaker 1: or thirty percent earnings increase eighteen over seventeen, largely because
Speaker 1: of the fiscal policy changes. Last year should have been
Speaker 1: a year of consolidation. From an earning standpoint, we were
Speaker 1: roped sort of small, single digit. We'll probably end up
Speaker 1: you know, three to five percent something like that. This year,
Speaker 1: we think we're gonna be up you know, maybe eight
Speaker 1: percent something like that. It's not gonna be phenomenal, but
Speaker 1: we're gonna get more multiple expansion. And the reason for
Speaker 1: that is core PC inflation sitting here at one point
Speaker 1: six percent, benchmark ten year treasury yields are below one
Speaker 1: one eight percent. In that kind of an environment, multiple
Speaker 1: should comfortably be at eighteen or nineteen times earnings. So
Speaker 1: so you know, investors did look at and say, well,
Speaker 1: the average multiple in stocks over the last you know,
Speaker 1: fifty seventy hundred years fourteen or fifteen times earnings. We're
Speaker 1: sitting at seventeen times now. Therefore the market's overvalued. That
Speaker 1: argument is flawed, and the reason it's flawed is that
Speaker 1: the market does not trade at some multiple based upon
Speaker 1: what history suggests. It's a function and inverse mathematical relationship
Speaker 1: between where interest rates and inflation are on the one hand,
Speaker 1: and where price earnings ratios are in the other. With
Speaker 1: so with benign interest rate to an inflation we should
Speaker 1: get more multiple expansion over the course of the next year.
Speaker 1: Just real quick, here, what roles the Fed play? How
Speaker 1: much more more juice does the Fed give us equities
Speaker 1: if it cuts rates again? Feds done? Feds on hold,
Speaker 1: We've seen the last of the Fed last year. We
Speaker 1: will not see them change interest rates. In our view,
Speaker 1: for the rest of this year. Upper band of the
Speaker 1: funds rates days at one spot seven five. Okay, but
Speaker 1: you don't think that it's gonna Do you think that
Speaker 1: if they were to cut rates that would help stocks, Well,
Speaker 1: it would. I don't know what the justification for that
Speaker 1: would be, because we do expect that there will be
Speaker 1: a re acceleration of both economic growth and corporate earnings
Speaker 1: growth in the back half of the year. The first
Speaker 1: quarter is going to be a problem, alright, Just just
Speaker 1: to be clear that the whole Boeing shutdown situation is
Speaker 1: going to have a derivative impact throughout the economy. Normal
Speaker 1: first quarter seasonal stuff. We've got some you know, some
Speaker 1: lagging stuff going with China trade. But as we get
Speaker 1: through that, as we get to the middle of the year,
Speaker 1: in our view, we're gonna start to see economic growth
Speaker 1: in corporate during this growth start to accelerate. Philorlando, thank
Speaker 1: you so much for joining us. Really appreciate you being
Speaker 1: in our Bloomberg Interactive Broker studio. Phil Orlando, chief equity
Speaker 1: market strategist and head of Client portfolio Management at Federated Investors.
Speaker 1: You know, after increasing SMP five, investors are looking for
Speaker 1: some places that might offer some better risk reward opportunity.
Speaker 1: One of those areas has been emerging markets. We want
Speaker 1: to talk emerging markets. We talked to our good friend
Speaker 1: Eric Fine, portfolio manager for Emerging markets fixed income and
Speaker 1: Van Eck, a Global based here in New York City.
Speaker 1: Eric joins us here in our Bloomberg Interactive Broker studio.
Speaker 1: So before we just get to a broad kind of
Speaker 1: emerging markets view, as we head into what does the
Speaker 1: last seven two hours in terms of geopolitical risk coming
Speaker 1: out of the Mid East, how does that factor into
Speaker 1: your modeling, your calculus as you just think about, you know,
Speaker 1: emerging markets. Sure with Hi, Paul High, Lisa having near
Speaker 1: thanks so so the UH, I'd say the first thing
Speaker 1: is there are a lot of emerging market countries and
Speaker 1: companies in the region that issue, and that's where I'm
Speaker 1: more comfortable saying that there could be an impact UM.
Speaker 1: And I would say that the countries that are UH
Speaker 1: the most subject to this are Iraq Um, which is
Speaker 1: now being threatened by sanctions. The bonds are down and
Speaker 1: maybe another two points today and yields aren't that high there, right,
Speaker 1: That's the thing for a lot of these UM for
Speaker 1: a lot of countries that are ultimately dependent on some
Speaker 1: bottom up development that can change quickly. Um um. You
Speaker 1: often see the last price before the event as being
Speaker 1: a generic price for risk in a low yield world.
Speaker 1: Oh it's this rating, it's got this yield that yields
Speaker 1: a little too high and own it not Oh, it's
Speaker 1: got this bottom up specific fund im And also I
Speaker 1: think sanctions risking Iraq um uh does is a real
Speaker 1: issue and uh this really started with Iraq war and
Speaker 1: and the sort of opening that that creates to Iran.
Speaker 1: Let me put it that way. The natural um I'd
Speaker 1: say Saudi is is another country that could be affected
Speaker 1: by this, and that it's a regular issuer, and it
Speaker 1: would seem reasonable to me to expect Iran to leverage
Speaker 1: Yemen over over Saudi. That was the pea stalks look
Speaker 1: like to me like they've broken down um and there
Speaker 1: I think the issue is that Saudi's a regular issue
Speaker 1: or they've got big fiscal deficits um and the yields
Speaker 1: are really low. You have three percent yield, so a
Speaker 1: lot of this isn't priced so regionally. I think there's
Speaker 1: some very specific implications that are important and that are
Speaker 1: generally adverse. And I think that the main names names
Speaker 1: national names would be Iraq and uh uh and Saudi
Speaker 1: um um. In terms of anything more broadly, UM, I
Speaker 1: would say it's uh, it's it's a bit of a stretch.
Speaker 1: I think you really have to First, I think one
Speaker 1: should be reluctant to hang an entire portfolio thesis based
Speaker 1: on developments in the Middle East. You know, it's just
Speaker 1: really really trick um and uh um. And second, central
Speaker 1: banks are so activated now UM that it's arguably a
Speaker 1: positive UM. And Third, I caution that this is what happened.
Speaker 1: As dramatic as it is, it is a line cross
Speaker 1: UM is part of of of broader trends that have
Speaker 1: already started. The borders that existed are being rethought UM.
Speaker 1: And this and this didn't just start last week, Okay.
Speaker 1: Arguably positive because it could potentially ignite the central banks
Speaker 1: out there to stimulate further. Is that the idea, UM,
Speaker 1: it's a reminder that to to the extent that central
Speaker 1: banks were getting a little emboldened by growth, or we're
Speaker 1: at risk of it, I think it's a little too
Speaker 1: early to say that they were getting emboldened by by growth,
Speaker 1: but to the extent that that was a scenario or
Speaker 1: a month or two from now, maybe that's put back
Speaker 1: a few more months. I don't think it's a complete
Speaker 1: I don't think you're gonna see statements from central banks
Speaker 1: on this, but it's we will be reminded of Central
Speaker 1: bank forbearance. What are the big conundrums is how much
Speaker 1: further the Federal Reserve than the ECB can can stimulate
Speaker 1: global risk markets? And I have to wonder, you know,
Speaker 1: doesn't at a certain point further rate cuts signal that
Speaker 1: the economy is even worse than people expected, and it
Speaker 1: doesn't really give that much of a boost to uh
Speaker 1: sort of the relative valuations and risk assets. Wow. The
Speaker 1: third question, and we're into this issue of the reversal rate.
Speaker 1: I think it's the hugest question, and it's going to
Speaker 1: be a question we're gonna be asking for years is
Speaker 1: are we at the end? Are we? Is this experiment over? Um?
Speaker 1: I would you know, I call myself a recovering economist,
Speaker 1: so my and I'm going to give a you know
Speaker 1: that kind of economics type of answer, which it depends, right,
Speaker 1: it depends on this which like economists anonymous, there should
Speaker 1: should be after the financial crisis, the global financials where
Speaker 1: there should be like it's any bar in midtown, you know,
Speaker 1: sitting on the end. I think the issue is clearest
Speaker 1: in Europe, where you've seen a very dramatic increase in
Speaker 1: the balance sheet and really no transmission into growth. It's
Speaker 1: mercier in uh in in the U S where you
Speaker 1: can see some success, but um, Europe has a uh.
Speaker 1: Europe is really where I think that that issue is
Speaker 1: coming to the four One way of putting your question
Speaker 1: is or one way of answering your question is, yeah,
Speaker 1: some of the central banks, maybe all of the developed ones,
Speaker 1: but certainly I think Europe's at the forefront of the problems.
Speaker 1: UM uh. They either high rates and uh and bankrupt governments,
Speaker 1: or they cut rates and bankrupt financial systems, which are
Speaker 1: contingent liability of governments. So that's a way of describing
Speaker 1: the condom. If they keep interest rate slow, the financial
Speaker 1: banking pensions is in the financial system, um UM doesn't
Speaker 1: earn enough to remain solvent. Arguably right or that's a
Speaker 1: challenge long term. I'm just a big picture theory theoretical,
Speaker 1: so UM and uh UM. But if rates are raised
Speaker 1: to a level that that the banking system, for example
Speaker 1: in Europe, is probably lobbying for UM. Then government borrowing
Speaker 1: costs become a real issue, particularly for the peripheral, higher
Speaker 1: indebted countries. Now this is very theoretical, not really what
Speaker 1: we do day to day. Any I think it's a
Speaker 1: great question, what are you playing in what's your highest
Speaker 1: conviction idea UM highest conviction ideas. Two groups of ideas.
Speaker 1: One is I think it is going to be a
Speaker 1: bumpy road, part partially because of the reasons Lisa mentioned
Speaker 1: longer term, so maybe you know second, third quarter. And
Speaker 1: one of the problems I have is a lot of
Speaker 1: people think what I'm about to say is it will
Speaker 1: have a good quarter or so and then then it
Speaker 1: will be tricky. But one group of ideas is the
Speaker 1: ones that that we think should last the whole year,
Speaker 1: and they're similar to what we do what we did
Speaker 1: last year. Things where we're waking up in the morning
Speaker 1: and not thinking about these sorts of questions where we're
Speaker 1: not thinking about Middle East developments, we're not thinking about
Speaker 1: oil upper down or rates upper down. So Argentina comes
Speaker 1: to mind. We're waking up in the morning and following Argentina,
Speaker 1: we think there's too much pessimism that government's basically market
Speaker 1: friendly and as and the biggest determined to remind people,
Speaker 1: the biggest determined of present value in a dicing in
Speaker 1: a potential default situation is nonpayment when you're and that's
Speaker 1: when you should be discounting a zero payment at and
Speaker 1: so you're losing a lot of money as long as
Speaker 1: they're staying current, which all indications are they plan on it.
Speaker 1: Um Um. I think that's a very very good situation,
Speaker 1: but again, bottom up, uncorrelated. We're waking up looking doing
Speaker 1: our day job. That's one Uruguay another really interesting local market,
Speaker 1: not big part of the index, but we have significant
Speaker 1: exposure there. You're getting around ten percent yields UM low
Speaker 1: and declining inflation and a new government elected to deal
Speaker 1: with their one problem fiscal But again I'm waking up
Speaker 1: in the morning looking for the next few quarters. Are
Speaker 1: they dealing with their fiscal programs? So those are some
Speaker 1: of the unusual ones that could last for your Ukraine's
Speaker 1: another one i am F program. The more mainstream ones
Speaker 1: that could benefit UM but may not last the whole
Speaker 1: year are Indonesia, Growth reform, South Africa, a lot of
Speaker 1: bad News priced in and Brazil really can't say enough
Speaker 1: good things about Brazil. Fine wonderful, wonderful synopsis, Zil, Argentina, Uruguay.
Speaker 1: Some of the picks here, Eric Fine, portfolio manager of
Speaker 1: Emerging Marcus Fixing Come Strategy at Vanneck Global, based in
Speaker 1: New York. Joining us here in our interactive broker studios.
Speaker 1: As time continues, we are piecing together the movie that
Speaker 1: is Carlos Gones life. Joining us now is Alan Kat's
Speaker 1: financial investigations team leader for Bloomberg News based in Paris,
Speaker 1: and Alan Woman put out a piece this morning really
Speaker 1: detailing everything we know about his arrest, his a hundred
Speaker 1: days in solitary confinement through to his escape from Japan.
Speaker 1: Can you give us a sense of sort of the
Speaker 1: narrative here as it unfolds. So, the way it worked
Speaker 1: with Carlos Gone was that he was arrested back in
Speaker 1: November of twenty eighteen, and as you mentioned, he spent
Speaker 1: a lot of time and saw their confinement. They kept
Speaker 1: sort of releasing him and then re arresting him. Uh,
Speaker 1: And there was a very sort of confusing period. Uh.
Speaker 1: But things got a lot more pressure packed uh in
Speaker 1: December of this year so he had already been either
Speaker 1: in jail or under house arrest for for more than
Speaker 1: a year, and UH this December he found out that
Speaker 1: his trial was likely to be delayed, possibly in one
Speaker 1: sort of leaving him in a legal limbo for at
Speaker 1: least another year. Japanese prosecutors had begun interviewing UH some
Speaker 1: of his family members, including his son Anthony, who they
Speaker 1: also accused of having been involved in some of the
Speaker 1: financial shenanigans. They claimed that that Carlos Gone was involved
Speaker 1: in UH and he didn't there didn't seem to be
Speaker 1: any way out, and that that appears to be sort
Speaker 1: of the real motive for him to leave now. But
Speaker 1: the other issue was an issue of opportunity. Right, so
Speaker 1: when in any sort of spy caper, you know, Ocean's
Speaker 1: eleven type scenario, you need to have sort of that
Speaker 1: moment when the time is right to jump. And it
Speaker 1: appears that he had been preparing this for months, dealing
Speaker 1: with people who have been specialized for decades in you know,
Speaker 1: ex fil trading, UH executives who are have been kidnapped
Speaker 1: or re recovering abducted children, or fighting on various sides
Speaker 1: of militia and during a civil war, UM, and he'd
Speaker 1: been dealing with them for months. But one of the
Speaker 1: things that came up just now was that there was
Speaker 1: a combination of it was a holiday period in Japan,
Speaker 1: so government offices were going to be closed for several
Speaker 1: days at least, and one of the main groups that
Speaker 1: have been sort of following Going every time he would
Speaker 1: leave his apartment was where series of private investigators paid
Speaker 1: for by Nissan Ghones lawyer had protested this was violating
Speaker 1: his rights, and those investigators appears to have appeared to
Speaker 1: have backed off, and so that gave Going this moment
Speaker 1: the sort of golden chance he that he had to take,
Speaker 1: or felt he had to take UH if he was
Speaker 1: ever going to get out of Japan, And so he
Speaker 1: did UH and amazingly was successful in Hi amazing stories. So, Allen,
Speaker 1: I think the next big piece of news is Mr
Speaker 1: Gohen is saying he's gonna have a press conference I
Speaker 1: guess in Lebanon sometime this week. Give us the details
Speaker 1: are what we know. Uh. He's going to speak in
Speaker 1: Lebanon on Wednesday at three pm local time. UH. And
Speaker 1: he claims, or through his lawyers mostly he claims that
Speaker 1: he is going to use this to try to press
Speaker 1: his case for why UH the allegations against him or untrue,
Speaker 1: politically motivated part of a vendetta against him, both by
Speaker 1: people within Nissan also UH from the Japanese government. UH
Speaker 1: in large part because of his efforts who merge Nissan
Speaker 1: with Renault. As you may know, Renault, the French carmaker,
Speaker 1: ownscent of Nissan, nissancent of Renault. But in this alliance
Speaker 1: that they've had for the last twenty years, Renault has
Speaker 1: essentially had the upper hand for most of the time
Speaker 1: since it essentially saves Nissan from bankruptcy when they when
Speaker 1: they first did the deal. Um, So this press conference
Speaker 1: is going to be going essentially going side of the
Speaker 1: story now he's had He had one video press conference
Speaker 1: that he did while he was still under house arrest
Speaker 1: in Japan, which supposedly was going to unveil all sorts
Speaker 1: of new information that was going to be terrible for
Speaker 1: new sounding great for Carlos. Gone didn't really come up
Speaker 1: with much new. So it's not clear, at least not
Speaker 1: clear to me, that that there's necessarily going to be
Speaker 1: a lot of new information or a lot of really
Speaker 1: exculpatory information that that going is going to come out
Speaker 1: with on Wednesday. But it's certainly going to be exciting.
Speaker 1: It's certainly give me exciting exactly right, Alan Cats, thanks
Speaker 1: so much for joining us Allen as a financial Investigations
Speaker 1: team leader for Bloomberg News in our Paris bureau. What's
Speaker 1: this fascinating story continuing to unfold? I'm really looking forward
Speaker 1: to see what Mr Gohan says that this press conference
Speaker 1: on Wednesday maybe gets more details as well as who
Speaker 1: plays Carlos Cone in the upcoming roid biopic that we
Speaker 1: can expect. Thanks for listening to the Bloomberg Piano podcast.
Speaker 1: You can subscribe and listen to interviews at Apple Podcasts
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Speaker 1: on Twitter at pt Sweeney. I'm Lisa abram Woods. I'm
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Speaker 1: you can always catch us worldwide on'm Bloomberg Radio.