1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg PENL Podcast. I'm Paul swing you. 2 00:00:05,360 --> 00:00:07,680 Speaker 1: Along with my co host Lisa Brahma Waits. 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 --> 00:00:17,960 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:22,240 Speaker 1: at Bloomberg dot com. Casting live from the BNY Melon 8 00:00:22,320 --> 00:00:27,760 Speaker 1: Pershing Insight twenty nineteen conference. Our focus is on the 9 00:00:27,880 --> 00:00:31,200 Speaker 1: US largely, but China has taken front and center here, 10 00:00:31,680 --> 00:00:34,680 Speaker 1: particularly with the protests that have been ongoing in Hong Kong. 11 00:00:34,680 --> 00:00:37,559 Speaker 1: There's been a bit of a reprieve with some of 12 00:00:37,600 --> 00:00:42,160 Speaker 1: the calm being sort of inserted over some of the protests. 13 00:00:42,240 --> 00:00:46,920 Speaker 1: But yesterday, UH the Chief Executive of Hong Kong, Carrie Lamb, 14 00:00:47,080 --> 00:00:50,320 Speaker 1: was speaking about this issue. Listen to what she said 15 00:00:50,400 --> 00:00:53,800 Speaker 1: about the controversial law that spurred all of the protests. 16 00:00:53,840 --> 00:00:56,200 Speaker 1: Take a listen. I will not shy away from my 17 00:00:56,240 --> 00:01:00,720 Speaker 1: responsibility in introducing a piece of legislation. We are very 18 00:01:00,720 --> 00:01:04,640 Speaker 1: convinced of the justifications at causing this public outcry and 19 00:01:04,680 --> 00:01:09,160 Speaker 1: all these devisitives in society but sometimes as a political leader, 20 00:01:09,680 --> 00:01:13,959 Speaker 1: you cannot shy away from difficult decisions, not backing down 21 00:01:14,160 --> 00:01:17,600 Speaker 1: from this extradition a law that is what is causing 22 00:01:17,720 --> 00:01:21,560 Speaker 1: the unrest. Joining us now and Stevenson and Stevenson Yang, 23 00:01:21,880 --> 00:01:25,440 Speaker 1: co founder and research director at J Capital Research, also 24 00:01:25,800 --> 00:01:29,000 Speaker 1: a Bloomberg Opinion contributor, and thank you so much for 25 00:01:29,040 --> 00:01:31,880 Speaker 1: being with us. First of all, I just want to 26 00:01:31,880 --> 00:01:36,840 Speaker 1: get your take on sort of Hong Kong's chief executives 27 00:01:37,000 --> 00:01:42,760 Speaker 1: reluctance to back away from this controversial legislation. Hi, so 28 00:01:42,840 --> 00:01:45,880 Speaker 1: thanks for having me. Yeah, I think that I think 29 00:01:45,880 --> 00:01:49,280 Speaker 1: that we've known for thirty years now that the chief 30 00:01:49,320 --> 00:01:53,800 Speaker 1: executive of Hong Kong is essentially, I hate to say 31 00:01:53,800 --> 00:01:56,600 Speaker 1: it so bluntly, but a Chinese puppet. But the but 32 00:01:56,720 --> 00:01:59,840 Speaker 1: the the real shocker here is that the Hong Kong 33 00:02:00,040 --> 00:02:04,920 Speaker 1: LegCo and police have been so turned by the by 34 00:02:04,960 --> 00:02:09,080 Speaker 1: the Chinese interests. What do you mean by that, Well, 35 00:02:09,120 --> 00:02:11,880 Speaker 1: that that the Hong Kong police have reacted with a 36 00:02:12,000 --> 00:02:18,160 Speaker 1: level of violence that they never had used before. Um yeah, 37 00:02:18,200 --> 00:02:22,520 Speaker 1: and um uh, and and you know, sprang pepper spray 38 00:02:22,639 --> 00:02:25,560 Speaker 1: directly into people's faces. I think all of these things 39 00:02:25,600 --> 00:02:29,280 Speaker 1: really surprised Hong Kong people and dismayed them because you know, 40 00:02:29,320 --> 00:02:33,160 Speaker 1: this was a peaceful protest um and it was surprising 41 00:02:33,200 --> 00:02:35,480 Speaker 1: to see from Hong Kong police. As for the leg CO, 42 00:02:36,200 --> 00:02:39,400 Speaker 1: you know, to push through this incredibly unpopular law and 43 00:02:39,440 --> 00:02:43,080 Speaker 1: now they're now they're delaying the debate on it, but 44 00:02:43,280 --> 00:02:46,040 Speaker 1: probably we'll bring it up at you know, midnight when 45 00:02:46,080 --> 00:02:49,720 Speaker 1: there are no protesters around. Okay. Well, so you started 46 00:02:49,720 --> 00:02:52,920 Speaker 1: by saying that Hong Kong's chief executive has always been, 47 00:02:53,040 --> 00:02:58,000 Speaker 1: in your words, a puppet of Beijing. If that's the case, 48 00:02:58,440 --> 00:03:01,160 Speaker 1: then why is Jumping pushing this law now? Given what 49 00:03:01,200 --> 00:03:03,800 Speaker 1: it's what he's dealing with with respect to tariffs from 50 00:03:03,800 --> 00:03:08,640 Speaker 1: the US. Um. You know, I don't think he's the 51 00:03:08,639 --> 00:03:12,480 Speaker 1: most deft politician. I think it's an awkward time to be, uh, 52 00:03:12,520 --> 00:03:15,440 Speaker 1: to be seeing such huge protests in Hong Kong, particularly 53 00:03:15,520 --> 00:03:19,200 Speaker 1: with the taiwan Is primary and elections coming up, and 54 00:03:19,280 --> 00:03:22,480 Speaker 1: with the June fourth anniversary and with the trade talks. 55 00:03:22,480 --> 00:03:24,200 Speaker 1: You know, it wasn't a good time. I'm sure they 56 00:03:24,200 --> 00:03:29,280 Speaker 1: didn't anticipate it. Okay, So you think it was just 57 00:03:29,520 --> 00:03:33,480 Speaker 1: a mistake, a sort of political miscalculation, perhaps given the 58 00:03:33,520 --> 00:03:36,280 Speaker 1: fact that it's probably going to be get another complication 59 00:03:36,320 --> 00:03:40,880 Speaker 1: he's gonna have to deal with probably, Yeah, okay, Um, well, 60 00:03:40,920 --> 00:03:43,600 Speaker 1: I guess that then. I'm wondering what your perspective is 61 00:03:43,600 --> 00:03:47,440 Speaker 1: when it comes to the investment aspect of this, because 62 00:03:47,480 --> 00:03:51,640 Speaker 1: we already saw one property developer uh delay or or 63 00:03:51,720 --> 00:03:55,840 Speaker 1: withdraw from plans in Hong Kong due to the increasing 64 00:03:55,880 --> 00:03:59,800 Speaker 1: control of Beijing over the territory. Are you hearing about 65 00:04:00,000 --> 00:04:03,880 Speaker 1: there investment firms that say are are pulling back or 66 00:04:04,400 --> 00:04:07,440 Speaker 1: being a little more hesitant in their expansion plans in 67 00:04:07,480 --> 00:04:09,720 Speaker 1: the territory as a result of this idea that it 68 00:04:09,760 --> 00:04:17,119 Speaker 1: wouldn't necessarily be treated special from the mainland, I not really, Um. 69 00:04:17,160 --> 00:04:19,719 Speaker 1: You know, people are talking about it, but that's very 70 00:04:19,720 --> 00:04:23,320 Speaker 1: different from making plans corporate plans. I do think that 71 00:04:23,440 --> 00:04:27,320 Speaker 1: it adds to the general sense of of instability and 72 00:04:27,400 --> 00:04:31,599 Speaker 1: volatility and unpredictability with both Mainland and Hong Kong operations, 73 00:04:31,600 --> 00:04:33,560 Speaker 1: and so you will see a lot of companies that 74 00:04:33,640 --> 00:04:37,640 Speaker 1: are able to decamped to Singapore to do that instead. Okay, 75 00:04:37,640 --> 00:04:40,040 Speaker 1: So I guess that one question that I have is 76 00:04:40,440 --> 00:04:43,880 Speaker 1: how special is Hong Kong at this point from Beijing, 77 00:04:43,960 --> 00:04:48,240 Speaker 1: Given the fact that Jijian Ping of China has made 78 00:04:48,240 --> 00:04:52,800 Speaker 1: a concerted effort to open up markets to more international 79 00:04:52,880 --> 00:04:57,480 Speaker 1: firms in the mainland. See. I would disagree with that point. 80 00:04:57,520 --> 00:04:59,599 Speaker 1: I think that actually things have gone quite in the 81 00:04:59,640 --> 00:05:03,360 Speaker 1: other direction um since twelve when she didn't think took 82 00:05:03,440 --> 00:05:07,400 Speaker 1: over um. But as for as for Hong Kong's independence, 83 00:05:07,480 --> 00:05:09,679 Speaker 1: you know, there's a there's a very clear trend line, 84 00:05:09,720 --> 00:05:13,760 Speaker 1: and Hong Kong is destined to become just another mainland city. 85 00:05:14,040 --> 00:05:16,640 Speaker 1: The question is, you know, the future of the party, 86 00:05:16,720 --> 00:05:20,880 Speaker 1: the future of the Chinese economy, all those normal considerations. 87 00:05:20,920 --> 00:05:25,240 Speaker 1: But if if, if the Chinese mainland, if nothing else changes, 88 00:05:25,880 --> 00:05:29,480 Speaker 1: then Hong Kong will be sort of Shenjen in another 89 00:05:30,040 --> 00:05:33,120 Speaker 1: few years. I'm surprised to hear that you say things 90 00:05:33,160 --> 00:05:36,880 Speaker 1: have moved in the opposite direction, because so many big 91 00:05:36,960 --> 00:05:41,040 Speaker 1: for example banks, international banks have been expanding their arms 92 00:05:41,160 --> 00:05:45,120 Speaker 1: in China, and we've seen a number of distress debt investors, 93 00:05:45,200 --> 00:05:50,200 Speaker 1: for example, including Howard Marks in his firm, going into 94 00:05:50,360 --> 00:05:53,880 Speaker 1: China to invest more because they have more confidence that 95 00:05:53,960 --> 00:05:57,200 Speaker 1: they'll be able to be supported by the laws, etcetera. 96 00:05:57,240 --> 00:06:00,839 Speaker 1: There doesn't see, I mean, first of all, I would 97 00:06:00,920 --> 00:06:03,840 Speaker 1: point out that distress. Debt is about distress, it's not 98 00:06:04,000 --> 00:06:07,239 Speaker 1: it's not necessarily about the laws. Um. You know, ask 99 00:06:07,560 --> 00:06:10,279 Speaker 1: particularly why they go in and I think it's it's 100 00:06:10,360 --> 00:06:13,560 Speaker 1: much more about distress than about being supported by the laws. 101 00:06:13,560 --> 00:06:16,719 Speaker 1: But otherwise, let's just look at the macro numbers. There's 102 00:06:16,760 --> 00:06:21,280 Speaker 1: been an increase in public ownership or state ownership of 103 00:06:21,279 --> 00:06:24,160 Speaker 1: of asset, of key assets, and all sorts of industries. 104 00:06:24,279 --> 00:06:29,760 Speaker 1: Private ownership has declined. Uh F d I numbers are 105 00:06:29,880 --> 00:06:34,480 Speaker 1: very small compared to what they used to be. UM. 106 00:06:34,880 --> 00:06:38,720 Speaker 1: On the portfolio front, there are still you know, portfolio investment, 107 00:06:38,800 --> 00:06:43,280 Speaker 1: there's still increase in in money raised through I p 108 00:06:43,400 --> 00:06:47,200 Speaker 1: o s, but overall investment flows are starting to move 109 00:06:47,240 --> 00:06:50,200 Speaker 1: the other direction. This is really interesting to me. It's 110 00:06:50,200 --> 00:06:52,359 Speaker 1: also interesting that you say that Hong Kong is destined 111 00:06:52,400 --> 00:06:56,840 Speaker 1: to become another just outpost of the mainland. And I'm 112 00:06:56,880 --> 00:07:00,279 Speaker 1: wondering how far along in that evolution you think it 113 00:07:00,320 --> 00:07:05,000 Speaker 1: already is. UM. I would say that, um, you know, 114 00:07:05,080 --> 00:07:09,120 Speaker 1: things were fairly we're quite stable. Um. While the Chinese 115 00:07:09,120 --> 00:07:12,640 Speaker 1: economy was still sort of sailing along and then began 116 00:07:12,720 --> 00:07:17,200 Speaker 1: to get rocky and and getting rocky because because who 117 00:07:17,240 --> 00:07:20,960 Speaker 1: didn't tell and engaged in such a massive stimulus. Getting 118 00:07:21,080 --> 00:07:25,160 Speaker 1: rocky part really began with Sheeting Ping, so who also 119 00:07:25,200 --> 00:07:28,440 Speaker 1: has the most authoritarian and I would say politically clumsy 120 00:07:28,560 --> 00:07:31,840 Speaker 1: instincts of any of the leaders of the past two decades. 121 00:07:32,440 --> 00:07:36,680 Speaker 1: So it's I think it's coeval with with Sheding Ping's ascension. 122 00:07:36,760 --> 00:07:39,960 Speaker 1: I don't think it's necessarily his fault, although I do 123 00:07:40,040 --> 00:07:43,920 Speaker 1: think he has a tenere for politics. And Stevenson Yang, 124 00:07:43,960 --> 00:07:46,440 Speaker 1: thank you so much for for your comments. It's really 125 00:07:46,960 --> 00:07:51,000 Speaker 1: UH jarring to see these images of what I've heard 126 00:07:51,160 --> 00:07:54,320 Speaker 1: is hundreds of thousands of protesters in Hong Kong. UH. 127 00:07:54,480 --> 00:07:58,880 Speaker 1: Certainly yesterday we saw those coming out protesting this UH, 128 00:07:59,000 --> 00:08:02,800 Speaker 1: this extradition law that Hong Kong Chief Executive is still 129 00:08:02,840 --> 00:08:05,360 Speaker 1: doubling down on UH and saying she will not shy 130 00:08:05,400 --> 00:08:08,480 Speaker 1: away from controversial legislation. And Stevenson Yang is co founder 131 00:08:08,480 --> 00:08:11,960 Speaker 1: and research director at j Capital Research. She is also 132 00:08:12,080 --> 00:08:30,240 Speaker 1: a Bloomberg opinion contributor. Err In a Lovely Phoenix at 133 00:08:30,280 --> 00:08:33,200 Speaker 1: the Convention Center and I am here because I'm attending 134 00:08:33,280 --> 00:08:38,200 Speaker 1: the b n y Melon Pershing Insight Conference, which is 135 00:08:38,240 --> 00:08:44,760 Speaker 1: focused on reimagining business in particular for registered advisors. UH 136 00:08:44,800 --> 00:08:48,200 Speaker 1: and brokers as at cater to individuals trying to figure 137 00:08:48,240 --> 00:08:51,800 Speaker 1: out the landscape here at a time of incredible uncertainty. 138 00:08:51,840 --> 00:08:54,120 Speaker 1: I'm very lucky to have Jim Crowley with me, who 139 00:08:54,160 --> 00:08:57,400 Speaker 1: will become the chief executive officer of Pershing, which is 140 00:08:57,440 --> 00:09:01,880 Speaker 1: a b n Y melon company, come July first. Jim, 141 00:09:01,960 --> 00:09:04,480 Speaker 1: first of all, congratulations, Thank you very much. UM. I 142 00:09:04,520 --> 00:09:07,199 Speaker 1: wanted to start with your clients. Are more than two 143 00:09:07,240 --> 00:09:09,680 Speaker 1: thousand people here and I'm trying to figure out as 144 00:09:09,720 --> 00:09:12,600 Speaker 1: they try to reimagine themselves in a world with new 145 00:09:12,640 --> 00:09:16,200 Speaker 1: technologies and a great deal of uncertainty on the policy front, 146 00:09:16,720 --> 00:09:20,840 Speaker 1: what's their biggest concern Well, there are several You mentioned technology. 147 00:09:20,920 --> 00:09:24,200 Speaker 1: That's one. So the complexity of the technology environment and 148 00:09:24,240 --> 00:09:27,800 Speaker 1: the new technology that's coming to the financial services industry 149 00:09:28,080 --> 00:09:32,480 Speaker 1: is very disruptive. The regulatory change that's happening across the industry, 150 00:09:32,559 --> 00:09:34,920 Speaker 1: both in the advisory marketplace as well as the purple 151 00:09:35,000 --> 00:09:38,880 Speaker 1: dealer marketplace. And then the third thing is reimagining what 152 00:09:38,960 --> 00:09:42,439 Speaker 1: that client experience can be in the future, because consumers 153 00:09:42,520 --> 00:09:46,320 Speaker 1: have become so accustomed to a different kind of behavior, 154 00:09:46,360 --> 00:09:49,400 Speaker 1: a different kind of experience working with the fintech community. 155 00:09:49,640 --> 00:09:52,280 Speaker 1: So what does an experience today look like or or 156 00:09:52,400 --> 00:09:56,040 Speaker 1: or perhaps tomorrow look like? Uh from your point of view, 157 00:09:56,360 --> 00:09:59,520 Speaker 1: So experience for us means how well we get the 158 00:09:59,559 --> 00:10:02,320 Speaker 1: work done and how quickly we get it done. Was 159 00:10:02,360 --> 00:10:06,920 Speaker 1: the experience good? Did people leave the process feeling good 160 00:10:06,960 --> 00:10:10,080 Speaker 1: about what just happened? Was it easy to complete? The 161 00:10:10,120 --> 00:10:14,120 Speaker 1: financial services industry has long been an industry with very 162 00:10:14,120 --> 00:10:17,679 Speaker 1: complex regulations around it, many requirements around in terms of 163 00:10:17,800 --> 00:10:21,680 Speaker 1: data gathering and information about investors. And it is a 164 00:10:21,720 --> 00:10:24,319 Speaker 1: complex process, and so how can we simplify that all? 165 00:10:24,400 --> 00:10:26,600 Speaker 1: That's what we're really focused on. But is that different 166 00:10:26,640 --> 00:10:30,080 Speaker 1: than it's always been. No, it's not different than it's 167 00:10:30,200 --> 00:10:35,440 Speaker 1: always been. But the investors experience with other fintech providers 168 00:10:35,520 --> 00:10:40,120 Speaker 1: or other consumer businesses has changed what their expectation is. So, 169 00:10:40,440 --> 00:10:44,840 Speaker 1: how can we make it easier to um move money around? 170 00:10:45,240 --> 00:10:48,679 Speaker 1: How simple it is to make a purchase on Amazon 171 00:10:49,000 --> 00:10:52,000 Speaker 1: or on eBay? Can we move money as quickly and 172 00:10:52,040 --> 00:10:55,600 Speaker 1: as easily from a bank account to an investment account? 173 00:10:55,760 --> 00:10:57,480 Speaker 1: Those are the things that they expect us to do. 174 00:10:57,760 --> 00:10:59,760 Speaker 1: One thing that I'm wondering is if you could put 175 00:11:00,040 --> 00:11:03,120 Speaker 1: with some of the changes that the industry is facing 176 00:11:03,120 --> 00:11:05,560 Speaker 1: into perspective, because I know you've been You've been doing 177 00:11:05,600 --> 00:11:09,120 Speaker 1: this for a while, um, and I think that there 178 00:11:09,120 --> 00:11:13,440 Speaker 1: have always been sort of see changes over time, uh 179 00:11:13,800 --> 00:11:15,920 Speaker 1: in the financial industry, and a lot of people are 180 00:11:15,920 --> 00:11:19,319 Speaker 1: talking now about the sort of movement online and the 181 00:11:19,360 --> 00:11:22,880 Speaker 1: movement to people who are more accustomed to, uh interface 182 00:11:22,960 --> 00:11:25,880 Speaker 1: with with the web. How different is it? I mean, 183 00:11:25,880 --> 00:11:28,040 Speaker 1: is this is this a radical shift or is this 184 00:11:28,080 --> 00:11:30,400 Speaker 1: sort of in line with the evolutions that you've seen 185 00:11:30,960 --> 00:11:34,320 Speaker 1: over years? Well, what has happened over the time and 186 00:11:34,320 --> 00:11:37,679 Speaker 1: what has come with the whole online experiences what I 187 00:11:37,679 --> 00:11:40,760 Speaker 1: would describe as the digitization of the business. And so 188 00:11:41,520 --> 00:11:44,400 Speaker 1: a business that has long been driven by paper and 189 00:11:44,800 --> 00:11:48,640 Speaker 1: wet signatures, Now people expect to do it on their iPhone. 190 00:11:49,360 --> 00:11:51,960 Speaker 1: They don't expect to have to receive a piece of 191 00:11:51,960 --> 00:11:54,320 Speaker 1: paper in the mail and sign it and return it 192 00:11:54,679 --> 00:11:56,600 Speaker 1: and have it take a matter of days. That they 193 00:11:56,600 --> 00:11:59,280 Speaker 1: want things done in a matter of minutes, okay, And 194 00:11:59,640 --> 00:12:01,880 Speaker 1: so that that changes it. But what about from an 195 00:12:01,920 --> 00:12:04,679 Speaker 1: actual investment standpoint, because a lot of people talk about 196 00:12:04,679 --> 00:12:07,679 Speaker 1: millennials to the point where you know, people roll their 197 00:12:07,679 --> 00:12:10,280 Speaker 1: eyes at a certain point on all sides because you 198 00:12:10,320 --> 00:12:12,920 Speaker 1: can't talk to a group of people within a broad 199 00:12:13,040 --> 00:12:16,360 Speaker 1: range of ages as a monolith. But are there trends 200 00:12:17,040 --> 00:12:20,200 Speaker 1: in the way that they invest money that your clients 201 00:12:20,240 --> 00:12:23,600 Speaker 1: are increasingly dealing with it and trying to address. Well. 202 00:12:23,640 --> 00:12:26,320 Speaker 1: I think that there definitely is. People are very focused 203 00:12:26,360 --> 00:12:30,040 Speaker 1: on the costs of investing now, they're very focused on 204 00:12:30,120 --> 00:12:34,440 Speaker 1: social responsibility and having a real community around what they're 205 00:12:34,440 --> 00:12:37,600 Speaker 1: trying to do and how they're trying to invest. So 206 00:12:37,720 --> 00:12:40,120 Speaker 1: there are nuances to what people are doing and it 207 00:12:40,240 --> 00:12:43,520 Speaker 1: is impacting how assets are flowing through the different product 208 00:12:43,600 --> 00:12:47,480 Speaker 1: platforms that are out there today. And it's something that 209 00:12:47,760 --> 00:12:49,960 Speaker 1: you know, we don't have a direct at person, We 210 00:12:49,960 --> 00:12:53,120 Speaker 1: don't have a direct access to the market. Our job 211 00:12:53,240 --> 00:12:56,839 Speaker 1: is to help our clients, these advisory firms and businesses 212 00:12:56,880 --> 00:12:59,880 Speaker 1: to run their businesses more efficiently so they can serve 213 00:13:00,040 --> 00:13:02,640 Speaker 1: advisors more effectively. And so we have to have a 214 00:13:02,679 --> 00:13:06,400 Speaker 1: platform that allows for the different types of product choices 215 00:13:06,480 --> 00:13:10,080 Speaker 1: that these investors and advisors want in this new world. 216 00:13:10,160 --> 00:13:13,840 Speaker 1: When you talk about social responsibility, people talk about, you know, 217 00:13:14,120 --> 00:13:17,280 Speaker 1: a variety of schif funds. How are you seeing this 218 00:13:17,440 --> 00:13:19,720 Speaker 1: manifested Because a lot of E s G funds haven't 219 00:13:19,760 --> 00:13:23,959 Speaker 1: necessarily seen the degree of money to come in the 220 00:13:24,040 --> 00:13:27,760 Speaker 1: sort of his commensurate with the amount that it's talked about. Yeah, well, 221 00:13:27,800 --> 00:13:30,240 Speaker 1: I think, um, you know, a lot of these things 222 00:13:30,360 --> 00:13:34,560 Speaker 1: take longer to develop than you would necessarily think. I 223 00:13:34,600 --> 00:13:39,120 Speaker 1: think the marketing is perhaps sometimes ahead of the actual results. 224 00:13:39,840 --> 00:13:43,800 Speaker 1: But over well, I think that, um, you know, whether 225 00:13:43,880 --> 00:13:46,680 Speaker 1: it's whether you're an asset manager or whether you're any 226 00:13:46,679 --> 00:13:50,080 Speaker 1: one of the forty business providers that are here, I 227 00:13:50,120 --> 00:13:53,040 Speaker 1: think many times it takes longer to sort of realize 228 00:13:53,040 --> 00:13:55,920 Speaker 1: what you're trying to achieve. We had Ala Mallali here 229 00:13:56,000 --> 00:13:59,240 Speaker 1: yesterday from Ford. He made a great comment about profitable, 230 00:13:59,559 --> 00:14:01,880 Speaker 1: profitable old growth for all. I thought it was a 231 00:14:01,920 --> 00:14:05,280 Speaker 1: great comment because it really does get everyone aligned and 232 00:14:05,360 --> 00:14:08,680 Speaker 1: what we're trying to do and make certain that everyone 233 00:14:08,800 --> 00:14:11,240 Speaker 1: is a participant in the process. And I just thought 234 00:14:11,280 --> 00:14:13,600 Speaker 1: it was a wonderful comment and it really sort of 235 00:14:13,960 --> 00:14:16,480 Speaker 1: resonates with what the spirit is of this event to 236 00:14:16,559 --> 00:14:19,520 Speaker 1: bring all these business partners together, all the different clients 237 00:14:19,560 --> 00:14:23,320 Speaker 1: together to talk about reimagining the future. Thank you so 238 00:14:23,400 --> 00:14:26,280 Speaker 1: much for for hosting us, and thank you for being here. 239 00:14:26,840 --> 00:14:30,000 Speaker 1: Uh and uh wish you the best of luck surviving. 240 00:14:30,040 --> 00:14:31,800 Speaker 1: I think it's going to be hundred and ten today. 241 00:14:31,840 --> 00:14:33,920 Speaker 1: It was a hundred and eighteen at one point. Yes, 242 00:14:33,960 --> 00:14:36,400 Speaker 1: well let's stay inside and stay cool. Yeah, it's definitely 243 00:14:36,440 --> 00:14:38,680 Speaker 1: a nice and cool and a lot of really important 244 00:14:38,680 --> 00:14:42,440 Speaker 1: and interesting conversations take place here in the Phoenix conventions. 245 00:14:42,440 --> 00:14:46,200 Speaker 1: That are Jim Crowlett Crowley chief executive Officer, come to live. 246 00:14:46,320 --> 00:14:49,960 Speaker 1: One of Pershing, which is a b n Y Melon company, 247 00:14:50,440 --> 00:14:53,840 Speaker 1: joining us here in Phoenix hosting uh the b n 248 00:14:53,960 --> 00:15:15,880 Speaker 1: Y Melon Pushing Insight Conference. Of we are broadcasting from 249 00:15:15,880 --> 00:15:20,280 Speaker 1: the b n Y Melon Pershing Insight Conference. One question 250 00:15:20,320 --> 00:15:23,560 Speaker 1: people have is about President Trump and heading into the 251 00:15:24,200 --> 00:15:27,600 Speaker 1: elections of Democratic candidates. President Trump sat down with ABC 252 00:15:27,880 --> 00:15:32,960 Speaker 1: News Chief anchor George Stephanopolis yesterday. UH. He said that 253 00:15:33,120 --> 00:15:37,680 Speaker 1: it would he would take foreign information on opponents, saying 254 00:15:37,720 --> 00:15:41,560 Speaker 1: it's not an interference. If they have information, I think 255 00:15:41,600 --> 00:15:44,320 Speaker 1: I'd take it. If I thought there was something wrong, 256 00:15:44,760 --> 00:15:46,840 Speaker 1: I'd maybe go to the FBI if I thought there 257 00:15:46,920 --> 00:15:50,320 Speaker 1: was something wrong. Joining me now is Clint Watts, Distinguished 258 00:15:50,400 --> 00:15:54,240 Speaker 1: Research Fellow for the Foreign Policy Research Institute, also Senior 259 00:15:54,240 --> 00:15:57,320 Speaker 1: Fellow at the Center for Cyber and Homeland Security at 260 00:15:57,320 --> 00:16:02,120 Speaker 1: the George Washington University he is outside the capital in Washington, 261 00:16:02,200 --> 00:16:04,680 Speaker 1: d C. Currently, Clinton, what did you make of those 262 00:16:04,720 --> 00:16:09,200 Speaker 1: comments that President Trump made yesterday on ABC News. It 263 00:16:09,320 --> 00:16:12,120 Speaker 1: seems to affirm what we've always suspected is that the 264 00:16:12,120 --> 00:16:16,240 Speaker 1: president isn't worried about foreign interference in our elections. Uh. 265 00:16:16,320 --> 00:16:20,000 Speaker 1: He might even welcome uh opposition research as he calls it, 266 00:16:20,080 --> 00:16:22,720 Speaker 1: or what we would call data dumps hack can release. 267 00:16:23,320 --> 00:16:26,000 Speaker 1: And so when we look at it looks like we 268 00:16:26,120 --> 00:16:29,200 Speaker 1: might look to a replay of ten. It sends a 269 00:16:29,240 --> 00:16:33,840 Speaker 1: signal to adversaries that they can pretty much maneuver in 270 00:16:33,840 --> 00:16:37,080 Speaker 1: the way that Russia did. I think for allies now 271 00:16:37,120 --> 00:16:40,400 Speaker 1: they have to question should they start backing candidates uh 272 00:16:40,440 --> 00:16:42,520 Speaker 1: that they prefer in an election, but they want to 273 00:16:42,560 --> 00:16:47,320 Speaker 1: provide opposition research. It's also dangerous because the president hasn't 274 00:16:47,480 --> 00:16:50,440 Speaker 1: entirely divested from his businesses. And so if you're a 275 00:16:50,480 --> 00:16:53,240 Speaker 1: foreign adversary or an ally, or just want to influence 276 00:16:53,280 --> 00:16:56,560 Speaker 1: the election, uh, you know, information about the presidents of 277 00:16:56,560 --> 00:17:00,200 Speaker 1: business is, uh, what his relationships are overseas with other 278 00:17:00,920 --> 00:17:03,280 Speaker 1: uh entities? Why not dump that out of the open 279 00:17:03,360 --> 00:17:06,359 Speaker 1: or try and influence the election towards whichever candidate to 280 00:17:06,560 --> 00:17:08,960 Speaker 1: one and I think the final big thing is the 281 00:17:09,040 --> 00:17:11,440 Speaker 1: FBI has gone to great measures with the Foreign Influenced 282 00:17:11,440 --> 00:17:14,200 Speaker 1: Task Force to try and go out to democratic campaigns 283 00:17:14,200 --> 00:17:16,800 Speaker 1: and and brief them, give him a counter intelligence brief 284 00:17:16,840 --> 00:17:19,080 Speaker 1: and tell them what the rules of the road are 285 00:17:19,520 --> 00:17:23,040 Speaker 1: heading into The President basically said that, uh, the FBI 286 00:17:23,080 --> 00:17:26,040 Speaker 1: director was wrong and that he didn't necessarily think he 287 00:17:26,119 --> 00:17:28,240 Speaker 1: needed to do that. So it puts it puts our 288 00:17:28,400 --> 00:17:31,920 Speaker 1: entire election in the weird context where it seems that 289 00:17:32,040 --> 00:17:35,520 Speaker 1: everything's out the window, anything could go, and our institutions 290 00:17:35,520 --> 00:17:38,840 Speaker 1: are really incapable of protecting us because even at the 291 00:17:38,920 --> 00:17:43,000 Speaker 1: leadership level, they're getting mixed messages. Was was President Trump 292 00:17:43,160 --> 00:17:49,320 Speaker 1: saying this in that format somehow a signal or recognition 293 00:17:49,640 --> 00:17:53,680 Speaker 1: that there is a foreign entity or more than one 294 00:17:53,960 --> 00:17:56,760 Speaker 1: that is looking to have one of these data dumps 295 00:17:57,040 --> 00:18:00,440 Speaker 1: and have perhaps him on the receiving end. I don't 296 00:18:00,560 --> 00:18:04,040 Speaker 1: think it was a clear invite. I mean, my contacts 297 00:18:04,040 --> 00:18:06,560 Speaker 1: were why I came up yesterdays because his son was 298 00:18:06,840 --> 00:18:09,479 Speaker 1: at the Senate committee, you know, behind closed doors, talking 299 00:18:09,520 --> 00:18:13,679 Speaker 1: about what was his contacts, what was his relationship, what 300 00:18:13,720 --> 00:18:17,080 Speaker 1: was the information he'd relayed based on that Trump Tower meeting, 301 00:18:17,119 --> 00:18:19,679 Speaker 1: and so I think he was trying to rationalize what 302 00:18:19,800 --> 00:18:22,400 Speaker 1: his son did, what he might do, UH, to try 303 00:18:22,400 --> 00:18:26,119 Speaker 1: and essentially exonerate themselves for many scrutiny. But at the 304 00:18:26,160 --> 00:18:29,160 Speaker 1: same time it does speG the question is the president 305 00:18:29,240 --> 00:18:31,080 Speaker 1: opening up to anyone out there that might want to 306 00:18:31,119 --> 00:18:33,920 Speaker 1: help him. Hey, I'm open for business. I would love 307 00:18:33,920 --> 00:18:37,760 Speaker 1: any research on my my opponents. And it really just 308 00:18:37,840 --> 00:18:41,960 Speaker 1: puts American a position of weaken weakness to any authoritarian 309 00:18:42,000 --> 00:18:45,399 Speaker 1: adversary that wants to hack a candidate, or hack an institution, 310 00:18:45,480 --> 00:18:49,119 Speaker 1: maybe even hack one of our our intel agencies, and 311 00:18:49,160 --> 00:18:52,400 Speaker 1: try and drive a narrative that undermines the greater good 312 00:18:52,440 --> 00:18:56,960 Speaker 1: of the contract. So Clinton, you're a former FBI special agent, 313 00:18:57,119 --> 00:19:00,359 Speaker 1: You've worked in the U. S. Army, You've been when 314 00:19:00,400 --> 00:19:02,639 Speaker 1: you were in the FBI, you're part of the Joint 315 00:19:02,680 --> 00:19:05,399 Speaker 1: Terrorism Task Force. You've written this book messing with the enemy, 316 00:19:05,640 --> 00:19:08,920 Speaker 1: surviving in a social media world of hackers, terrorists, Russians, 317 00:19:08,960 --> 00:19:12,719 Speaker 1: and fake news. And I'm wondering whether there's any precedent 318 00:19:13,200 --> 00:19:18,920 Speaker 1: for a president of the United States to accept information 319 00:19:19,280 --> 00:19:23,200 Speaker 1: on perhaps an opponent, a political opponent, from foreign governments. 320 00:19:23,320 --> 00:19:26,639 Speaker 1: Is there a precedent history not that I'm aware of, 321 00:19:26,800 --> 00:19:30,280 Speaker 1: and it is violating the law. It was something that 322 00:19:30,320 --> 00:19:33,359 Speaker 1: came up in the Muller reports specifically said that the 323 00:19:33,480 --> 00:19:36,199 Speaker 1: only reason that they did not pursue charges against some 324 00:19:36,240 --> 00:19:38,639 Speaker 1: of the Trump campaign members was because they were unaware, 325 00:19:38,840 --> 00:19:41,160 Speaker 1: basically of what the stipulation is that you can't take 326 00:19:41,200 --> 00:19:44,720 Speaker 1: foreign help or foreign contributions UH in order to win 327 00:19:44,720 --> 00:19:48,080 Speaker 1: the election. This clearly seems to suggest that the president 328 00:19:48,119 --> 00:19:51,439 Speaker 1: does know this but doesn't care, you know, and is 329 00:19:51,440 --> 00:19:55,240 Speaker 1: willing to violate that. And it's it is without president. 330 00:19:55,320 --> 00:19:57,760 Speaker 1: And I also think it speaks to the degradation of 331 00:19:57,800 --> 00:20:00,680 Speaker 1: norms where, if you remember back out or received a 332 00:20:01,040 --> 00:20:04,560 Speaker 1: briefing book, which George Stephanopolis actually brings up in that 333 00:20:04,560 --> 00:20:08,160 Speaker 1: discussion with the president, Al Gore's campaign called the FBI 334 00:20:08,280 --> 00:20:11,240 Speaker 1: because they knew it was either stolen or pill from 335 00:20:11,240 --> 00:20:13,800 Speaker 1: materials and that was kind of the rules of the 336 00:20:13,880 --> 00:20:16,920 Speaker 1: road that everyone accepted. It just shows how far we've 337 00:20:17,000 --> 00:20:20,080 Speaker 1: changed in terms of our country about what we see 338 00:20:20,160 --> 00:20:24,000 Speaker 1: is acceptable in order to win an election, and by winning, 339 00:20:24,240 --> 00:20:26,480 Speaker 1: what are we really saying about our country as a whole. 340 00:20:27,160 --> 00:20:30,120 Speaker 1: So Clinton, just to just to sort of push back here, 341 00:20:30,560 --> 00:20:32,720 Speaker 1: what would you say to someone who said, well, what 342 00:20:32,800 --> 00:20:35,000 Speaker 1: does it matter, right, I mean, more information is better. 343 00:20:35,320 --> 00:20:38,840 Speaker 1: And you know, why should we self censor regardless of 344 00:20:38,840 --> 00:20:42,280 Speaker 1: what the sources of the information, If it's accurate, why 345 00:20:42,280 --> 00:20:45,159 Speaker 1: shouldn't it be a go. Because in the case of 346 00:20:45,200 --> 00:20:48,240 Speaker 1: foreign anversaries, they are trying to pursue something inside the 347 00:20:48,320 --> 00:20:52,479 Speaker 1: United States. So let's look back to they gave us 348 00:20:52,520 --> 00:20:56,560 Speaker 1: information about one candidate to distract from one candidate. We 349 00:20:56,600 --> 00:20:58,439 Speaker 1: don't really know the full spectrum of it. And the 350 00:20:58,480 --> 00:21:01,679 Speaker 1: goal was essentially the advanced Russian interests inside the United 351 00:21:01,720 --> 00:21:05,000 Speaker 1: States and abroun and they were successful in that. They've 352 00:21:05,000 --> 00:21:09,520 Speaker 1: been quite successful. Barring sanctions relief, Russia has gotten most 353 00:21:09,560 --> 00:21:13,400 Speaker 1: of the what they've wanted internationally. So this incentivizes every 354 00:21:13,400 --> 00:21:16,159 Speaker 1: country around the world to do criminal activity against the 355 00:21:16,200 --> 00:21:19,480 Speaker 1: United States in the form of hacking, to go at 356 00:21:20,080 --> 00:21:23,600 Speaker 1: political candidates and to even link up to political candidates 357 00:21:23,600 --> 00:21:26,920 Speaker 1: and possibly give them false information to create chaos inside 358 00:21:26,920 --> 00:21:29,600 Speaker 1: of our country, which suits their need. Really sets this 359 00:21:29,760 --> 00:21:32,479 Speaker 1: up in a position of weakness rather than a position 360 00:21:32,520 --> 00:21:35,680 Speaker 1: of strength with visa vir adversaries. So clin just real 361 00:21:35,760 --> 00:21:39,240 Speaker 1: quick here. Since you do specialize in UH hackers and 362 00:21:39,320 --> 00:21:42,480 Speaker 1: terrorists and and fake news. What are you expecting heading 363 00:21:42,480 --> 00:21:45,639 Speaker 1: into the elections. I mean, we're getting any indications of 364 00:21:45,760 --> 00:21:49,520 Speaker 1: just how rampant fake news and some mo the foreign 365 00:21:49,520 --> 00:21:54,159 Speaker 1: interference might be. The big change is really that most 366 00:21:54,240 --> 00:21:57,320 Speaker 1: of the authentic accounts and information I'm seeing pop up 367 00:21:57,400 --> 00:22:00,520 Speaker 1: right now, I think domestic and origin, pant foreign and 368 00:22:00,600 --> 00:22:02,199 Speaker 1: what what you're really going to see? I think from 369 00:22:02,240 --> 00:22:06,080 Speaker 1: Russia and others as a cost benefit calculation, they will 370 00:22:06,119 --> 00:22:08,879 Speaker 1: try and edge forward and push forward the candidates that 371 00:22:08,920 --> 00:22:12,840 Speaker 1: they prefer, which are largely populous candidates whether you're on 372 00:22:12,920 --> 00:22:17,439 Speaker 1: others either side of the political aisle, and they're probably 373 00:22:17,480 --> 00:22:20,200 Speaker 1: waiting to see how aggressive to be because they also 374 00:22:20,240 --> 00:22:23,000 Speaker 1: don't want to provoke a negative reaction from Afar. So 375 00:22:23,040 --> 00:22:26,280 Speaker 1: if you're China, uh Iran, Russia, which are the big 376 00:22:26,280 --> 00:22:28,199 Speaker 1: ones way always talking about, but even other countries like 377 00:22:28,240 --> 00:22:32,240 Speaker 1: Saudi and Israel that want to influence uh US politics, 378 00:22:32,240 --> 00:22:36,000 Speaker 1: they're making calculations right now. Going and doing offensive hacking 379 00:22:36,000 --> 00:22:39,280 Speaker 1: the way the Russian gr you did in sixteen could 380 00:22:39,320 --> 00:22:42,160 Speaker 1: provoke or even force like a President Trump to take 381 00:22:42,160 --> 00:22:45,000 Speaker 1: a retaliatory action, to have to mobilize to do something, 382 00:22:45,440 --> 00:22:47,439 Speaker 1: and they may not see the need to go that 383 00:22:47,520 --> 00:22:49,520 Speaker 1: far this time. If they think you're getting the outcome 384 00:22:49,560 --> 00:22:52,280 Speaker 1: they want, they're pretty happy right now about us fighting 385 00:22:52,320 --> 00:22:54,920 Speaker 1: each other. Clint Watts, thank you so much for being 386 00:22:54,920 --> 00:22:57,440 Speaker 1: with us. Clint Watts is Distinguished Research Fellow at the 387 00:22:57,480 --> 00:23:00,479 Speaker 1: Foreign Policy Research Institute. Is also see your fellow at 388 00:23:00,480 --> 00:23:03,439 Speaker 1: the Center for Cyber and Homeland Security at the George 389 00:23:03,480 --> 00:23:24,919 Speaker 1: Washington University. From Phoenix, Arizona. This is Bloomberg. Thank you 390 00:23:24,960 --> 00:23:28,280 Speaker 1: so much, Greg Jared Well. Yesterday on Bloomberg Television and 391 00:23:28,359 --> 00:23:31,639 Speaker 1: Bloomberg Radio, Paul Tutor Jones Uh, the co chair and 392 00:23:31,840 --> 00:23:35,440 Speaker 1: chief investment officer and of course founder of Tutor Investment Corp. 393 00:23:35,480 --> 00:23:39,879 Speaker 1: Was speaking on Bloomberg Radio and Bloomberg Television advising people 394 00:23:40,119 --> 00:23:43,040 Speaker 1: that they should pull out their playbook for when the 395 00:23:43,080 --> 00:23:46,679 Speaker 1: Fed cuts rates. So there's no playbook for this. The 396 00:23:46,760 --> 00:23:49,280 Speaker 1: only thing is is that because the Federal Reserve is 397 00:23:49,320 --> 00:23:52,440 Speaker 1: going to cut rates, he advises people go into stocks, 398 00:23:52,840 --> 00:23:56,639 Speaker 1: going to go long rates, go short the dollar, but 399 00:23:56,720 --> 00:23:59,840 Speaker 1: go along goal Joining me now, Matt Forrester, chief investment 400 00:24:00,000 --> 00:24:03,120 Speaker 1: officer at b N Y Melon's Lockwood Advisors, here at 401 00:24:03,200 --> 00:24:07,679 Speaker 1: the b N Y Melon Pershing Insight Conference of Do 402 00:24:07,720 --> 00:24:09,240 Speaker 1: you think that that's the way to go go along 403 00:24:09,240 --> 00:24:11,880 Speaker 1: stocks because if it's gonna cut rates, um, I think 404 00:24:12,400 --> 00:24:15,720 Speaker 1: it's going to depend on why the Fed ends up 405 00:24:15,960 --> 00:24:18,359 Speaker 1: communicating why they're cutting rates. I think that's going to 406 00:24:18,440 --> 00:24:21,080 Speaker 1: be a big part of how markets react to this. 407 00:24:21,440 --> 00:24:23,600 Speaker 1: I think it's an argument that you might want to 408 00:24:23,640 --> 00:24:25,800 Speaker 1: sell the first rate cut in terms of equities. The 409 00:24:25,800 --> 00:24:27,720 Speaker 1: other pieces of this I think are you know fully 410 00:24:27,720 --> 00:24:31,000 Speaker 1: intact and we've seen a pretty strong gold market. Um, 411 00:24:31,160 --> 00:24:34,080 Speaker 1: I think the bond trade is really interesting here, and 412 00:24:34,200 --> 00:24:35,800 Speaker 1: um that's the pieces that I think are going to 413 00:24:35,880 --> 00:24:39,280 Speaker 1: be We've had such a big decline in interest rates, 414 00:24:39,320 --> 00:24:41,640 Speaker 1: so I think I would want to make sure that 415 00:24:41,680 --> 00:24:45,360 Speaker 1: the fixed income portion of your portfolio is set up 416 00:24:45,400 --> 00:24:50,040 Speaker 1: properly in case the recessionary kind of forces continue to build. 417 00:24:50,560 --> 00:24:53,880 Speaker 1: We've seen so many different models quant models, whether it's 418 00:24:53,920 --> 00:24:56,400 Speaker 1: based on the yield curve or other measures that are 419 00:24:56,440 --> 00:25:00,320 Speaker 1: really warning that the probability of recession sometimes in the 420 00:25:00,400 --> 00:25:03,760 Speaker 1: in the market's time frame twelve to eighteen months is 421 00:25:03,840 --> 00:25:06,800 Speaker 1: really rising. So you know, in that environment, I think 422 00:25:06,840 --> 00:25:09,439 Speaker 1: it might be harder for stocks and they might react 423 00:25:09,480 --> 00:25:12,080 Speaker 1: well to an initial rate cut on you know, or 424 00:25:12,080 --> 00:25:14,439 Speaker 1: the prospect of some rate cuts. The question is how 425 00:25:14,440 --> 00:25:16,600 Speaker 1: they would react, you know, soon after that if it 426 00:25:16,680 --> 00:25:19,919 Speaker 1: looked like some of the recessionary forces were starting to build. 427 00:25:20,080 --> 00:25:23,240 Speaker 1: One thing that we neglect to talk about enough when 428 00:25:23,240 --> 00:25:27,160 Speaker 1: we talk about the FED cutting rates is the consequence 429 00:25:27,359 --> 00:25:31,920 Speaker 1: of a really long period of mirror zero rates. I mean, 430 00:25:31,920 --> 00:25:35,320 Speaker 1: we used to talk about this, but with retirees for example, 431 00:25:35,440 --> 00:25:37,320 Speaker 1: And I'm just wondering if you could give us a 432 00:25:37,359 --> 00:25:40,159 Speaker 1: sense of the scope of that problem. I wouldn't want 433 00:25:40,200 --> 00:25:42,240 Speaker 1: to say problem, but yeah, problem, because there's all these 434 00:25:42,240 --> 00:25:45,280 Speaker 1: people who are preparing to retire and they're struggling to 435 00:25:45,320 --> 00:25:47,800 Speaker 1: find a place to get income. Yeah, for sure. I 436 00:25:47,840 --> 00:25:50,560 Speaker 1: mean this is a really interesting uh you know, part 437 00:25:50,560 --> 00:25:53,840 Speaker 1: of the market is just retirees that are struggling with 438 00:25:53,880 --> 00:25:58,160 Speaker 1: this annuitization of all the funds that they have accumulated 439 00:25:58,240 --> 00:26:01,280 Speaker 1: over their lifetime. And so one of the stats that 440 00:26:01,520 --> 00:26:04,480 Speaker 1: isn't quite as well known. You hear a lot people 441 00:26:04,560 --> 00:26:09,160 Speaker 1: saying that, oh, well, there's ten thousand retirees per day, 442 00:26:09,400 --> 00:26:12,119 Speaker 1: you know, turning people turning sixty five in the United States. 443 00:26:12,440 --> 00:26:15,080 Speaker 1: Not all those people are retiring. But the interesting thing 444 00:26:15,119 --> 00:26:17,320 Speaker 1: about that, there's a researcher the st Louis Fed who 445 00:26:17,400 --> 00:26:20,280 Speaker 1: was who was calculated that that actual number is going 446 00:26:20,320 --> 00:26:24,800 Speaker 1: to rise between here and three or twenty four and 447 00:26:24,800 --> 00:26:27,280 Speaker 1: it's going to get close to twelve thousand a day. 448 00:26:27,320 --> 00:26:32,480 Speaker 1: So this is a really monumental demographic see change. Um. 449 00:26:32,520 --> 00:26:35,520 Speaker 1: You know, on top of fascinating statistics like we have 450 00:26:35,720 --> 00:26:38,399 Speaker 1: the lowest birth rate in thirty two years in the 451 00:26:38,480 --> 00:26:41,720 Speaker 1: United States. So you know, the the question is what 452 00:26:41,880 --> 00:26:44,560 Speaker 1: is the seed corn for future greath of growth going 453 00:26:44,600 --> 00:26:46,639 Speaker 1: to be, you know, and is the FED going to 454 00:26:46,720 --> 00:26:49,800 Speaker 1: be going to get out of this operating monetary policy 455 00:26:49,840 --> 00:26:53,160 Speaker 1: at a zero bound on you know, inflation and interest rates. 456 00:26:53,240 --> 00:26:55,600 Speaker 1: I think it is your really important questions. Does it 457 00:26:55,640 --> 00:26:57,760 Speaker 1: mean that sixty five really isn't the time for people 458 00:26:57,760 --> 00:27:00,200 Speaker 1: to retire it's more like eighty three? Well, that's only 459 00:27:00,240 --> 00:27:02,200 Speaker 1: what we've seen. Or if you look at the labor market, 460 00:27:02,200 --> 00:27:05,800 Speaker 1: the labor partition patient rate amongst older workers are fifty 461 00:27:05,800 --> 00:27:09,200 Speaker 1: five is one of the fastest growing parts of labor participation, 462 00:27:09,240 --> 00:27:12,200 Speaker 1: whereas the rest of the labor pool you know, continues 463 00:27:12,280 --> 00:27:15,679 Speaker 1: to shrink in terms of labor participation. UM. So clearly 464 00:27:15,720 --> 00:27:18,720 Speaker 1: there is some pressure on older workers to continue to 465 00:27:18,720 --> 00:27:20,760 Speaker 1: stay in the workforce. In order to continue to build 466 00:27:20,800 --> 00:27:24,960 Speaker 1: that retirement nesting so as people get older. One question 467 00:27:25,000 --> 00:27:26,600 Speaker 1: I have is what do they do in this environment 468 00:27:26,640 --> 00:27:29,520 Speaker 1: given a time of great uncertainty on a policy front, 469 00:27:29,520 --> 00:27:32,560 Speaker 1: where you have terrific you know, as Paultier Jones was saying, 470 00:27:32,600 --> 00:27:35,280 Speaker 1: could ship the United States into recession in his view, 471 00:27:35,520 --> 00:27:37,480 Speaker 1: you've got a FED that is poised to cut rates 472 00:27:37,480 --> 00:27:41,400 Speaker 1: at least based on market expectations. With someone with only 473 00:27:41,440 --> 00:27:43,880 Speaker 1: ten years left to say before they're supposed to retire, 474 00:27:44,400 --> 00:27:46,480 Speaker 1: what are they supposed to do with their allocations? I 475 00:27:46,520 --> 00:27:49,200 Speaker 1: think right now at this point in the cycle. Uh, 476 00:27:49,280 --> 00:27:50,560 Speaker 1: one of the things that we see a lot at 477 00:27:50,640 --> 00:27:53,520 Speaker 1: Lockwood is advisors may be reaching for a little bit 478 00:27:53,560 --> 00:27:56,280 Speaker 1: of yield, and I think that might be more dangerous trade. Again, 479 00:27:56,280 --> 00:27:59,600 Speaker 1: if we start seeing in a recessionary pressures build and 480 00:27:59,600 --> 00:28:02,000 Speaker 1: hopefully we're wrong, hopefully have more time to make these 481 00:28:02,040 --> 00:28:05,440 Speaker 1: kind of adjustments. But you know, if the recessionary forces 482 00:28:05,600 --> 00:28:09,040 Speaker 1: come faster than what markets expect, you know, some of 483 00:28:09,080 --> 00:28:11,800 Speaker 1: these credit porces in that their portfolio places where people 484 00:28:11,800 --> 00:28:14,400 Speaker 1: have reached to get that extra yield, you know, could 485 00:28:14,480 --> 00:28:17,040 Speaker 1: be could be really challenging. The other thing I needed 486 00:28:17,040 --> 00:28:18,800 Speaker 1: to think about it in terms of terms of a 487 00:28:18,840 --> 00:28:22,719 Speaker 1: global context. You know, we have you know, nearly eleven 488 00:28:22,760 --> 00:28:26,520 Speaker 1: trillion dollars globally and negative yielding debt and that's astonishing. 489 00:28:26,600 --> 00:28:29,480 Speaker 1: I mean, for here, Jim Crowley, you know, our CEO 490 00:28:29,640 --> 00:28:32,320 Speaker 1: CEO talk about there's only seven trillion dollars in the 491 00:28:32,320 --> 00:28:34,600 Speaker 1: wealth and that industry. Here in the United States, there's 492 00:28:34,600 --> 00:28:38,520 Speaker 1: almost eleven trillion dollars in UH, negative yielding debt. You know, 493 00:28:38,720 --> 00:28:41,120 Speaker 1: US rates don't look so bad, you know, when you 494 00:28:41,200 --> 00:28:43,920 Speaker 1: compare it in this kind of global context. Matt Forrester, 495 00:28:44,040 --> 00:28:45,959 Speaker 1: thank you so much as always for being with us. 496 00:28:46,000 --> 00:28:49,080 Speaker 1: Matt Forrester, chief Investment Officer at B and Y Melons 497 00:28:49,200 --> 00:28:53,520 Speaker 1: Lockwood Advisors. With a stunning statistic, UH that it's going 498 00:28:53,560 --> 00:28:56,760 Speaker 1: to be potentially in the near future, twelve thousand people 499 00:28:57,160 --> 00:29:00,160 Speaker 1: every day in the United States turning sixty five. I've 500 00:29:00,160 --> 00:29:03,480 Speaker 1: been entering at that retirement age. Thanks for listening to 501 00:29:03,520 --> 00:29:05,880 Speaker 1: the Bloomberg P and L podcast. You can subscribe and 502 00:29:05,960 --> 00:29:09,120 Speaker 1: listen to interviews at Apple Podcasts or whatever podcast platform 503 00:29:09,160 --> 00:29:12,240 Speaker 1: you prefer. I'm Paul Sweeney, I'm on Twitter at pt Sweeney. 504 00:29:12,280 --> 00:29:14,480 Speaker 1: I'm Lisa abram Woh. It's I'm on Twitter at Lisa 505 00:29:14,480 --> 00:29:17,200 Speaker 1: Abram woits one before the podcast, you can always catch 506 00:29:17,280 --> 00:29:19,080 Speaker 1: us worldwide. I'm Bloomberg Radio