1 00:00:09,840 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 2 00:00:13,960 --> 00:00:17,560 Speaker 1: we bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:28,960 Speaker 1: Bloomberg dot com, and of course on the Bloomberg. Let's 5 00:00:28,960 --> 00:00:31,560 Speaker 1: get to it. Widely anticipated for Global Wall Street. What 6 00:00:31,560 --> 00:00:34,320 Speaker 1: we're doing, our folks, is the kickoff for the new year. 7 00:00:34,360 --> 00:00:37,720 Speaker 1: I'm sorry it's now the Monday after Labor Day. When 8 00:00:37,720 --> 00:00:40,440 Speaker 1: Steve Eisman and I were kids, this is before young 9 00:00:40,520 --> 00:00:43,960 Speaker 1: Pharaoll's time, it was sort of that Wednesday Thursday after 10 00:00:44,120 --> 00:00:46,440 Speaker 1: Labor Day. And now Steve, it's like, now is the 11 00:00:46,520 --> 00:00:49,920 Speaker 1: kickoff for the year? Tell us just your basic position, 12 00:00:50,040 --> 00:00:53,080 Speaker 1: not trade by trade, but are you net long, net 13 00:00:53,200 --> 00:00:56,640 Speaker 1: short net cash? What's the tone you have going into 14 00:00:56,680 --> 00:01:01,200 Speaker 1: this fall? Slightly net long, but only slightly right now? 15 00:01:01,520 --> 00:01:03,680 Speaker 1: And your conviction is and we talked about this earlier, 16 00:01:03,680 --> 00:01:07,600 Speaker 1: wrapped around not a forecast of global recession, but all 17 00:01:07,600 --> 00:01:10,800 Speaker 1: the clouds that are out there from a summer of discontent. 18 00:01:11,200 --> 00:01:14,080 Speaker 1: You suggest that that folds into the autumn and into 19 00:01:14,120 --> 00:01:17,559 Speaker 1: next year. I mean, look, it's it's a very weird 20 00:01:17,640 --> 00:01:20,440 Speaker 1: market in the sense that everybody talks about that they're worried, 21 00:01:20,560 --> 00:01:22,440 Speaker 1: and yet the markets within a two to three percent 22 00:01:22,520 --> 00:01:25,520 Speaker 1: all times, so I don't know how worried they really are. 23 00:01:25,800 --> 00:01:28,080 Speaker 1: I'm in the triple leverage all cash. It's worked like 24 00:01:28,120 --> 00:01:32,200 Speaker 1: a um. But you know, like I said earlier on 25 00:01:32,200 --> 00:01:35,479 Speaker 1: the television show, we are with in my mind, without question, 26 00:01:35,520 --> 00:01:39,920 Speaker 1: in a global industrial slowdown slash recession. On the other hand, 27 00:01:39,959 --> 00:01:44,600 Speaker 1: that consumer is employed and healthy. So the question really 28 00:01:44,720 --> 00:01:47,520 Speaker 1: is is what's happening in the industrial side, which is 29 00:01:47,560 --> 00:01:50,600 Speaker 1: only by TENTA fifteen percent of the economy. Is that 30 00:01:50,920 --> 00:01:53,320 Speaker 1: a canary in the coal mine? Or we're gonna eventually 31 00:01:53,360 --> 00:01:56,559 Speaker 1: pull out of it and the recovery will extend longer. 32 00:01:56,680 --> 00:01:58,240 Speaker 1: And I don't know the answer to that question, but 33 00:01:58,280 --> 00:02:00,480 Speaker 1: it doesn't seem to be priced into the market. Let's 34 00:02:00,480 --> 00:02:02,440 Speaker 1: get your base case, Steve, and try and work that out. 35 00:02:02,480 --> 00:02:05,200 Speaker 1: So last week didn't really change anything for anyone. With 36 00:02:05,400 --> 00:02:07,960 Speaker 1: the manufacturing p M I, the I s M sub fifty, 37 00:02:08,040 --> 00:02:10,520 Speaker 1: the non manufacturing north of fifty, it's the same story. 38 00:02:10,560 --> 00:02:14,440 Speaker 1: Manufacturing looks soft and non manufacturing looks okay. And the 39 00:02:14,520 --> 00:02:17,480 Speaker 1: question is outstanding, as you point out, does it bleed 40 00:02:17,520 --> 00:02:20,640 Speaker 1: from one into another, from weakness into the resilience we 41 00:02:20,680 --> 00:02:23,360 Speaker 1: see in the service sector. Just to sign a probability 42 00:02:23,400 --> 00:02:24,720 Speaker 1: to that if you can, Steve, you've got to have 43 00:02:24,760 --> 00:02:26,560 Speaker 1: a base case in mind. Surely, what are you thinking 44 00:02:26,560 --> 00:02:30,000 Speaker 1: about that? Look, I'm just looking for singles. I mean, 45 00:02:30,240 --> 00:02:32,400 Speaker 1: one of the more interesting indicators is going to be 46 00:02:32,440 --> 00:02:35,440 Speaker 1: the earning season that will start in October. Um. You know, 47 00:02:35,480 --> 00:02:39,120 Speaker 1: the industrial company has reported week numbers in the second quarter, 48 00:02:39,200 --> 00:02:42,519 Speaker 1: but not terrible. My anticipation is that it will be 49 00:02:42,760 --> 00:02:46,080 Speaker 1: significantly worse this quarter and then we'll see how the 50 00:02:46,080 --> 00:02:49,160 Speaker 1: market reacts. Just in terms of the companies you're looking 51 00:02:49,200 --> 00:02:51,680 Speaker 1: at where you expect to see some pain. What are 52 00:02:51,680 --> 00:02:55,960 Speaker 1: you focused on at the moment, Steve? I mean what 53 00:02:56,040 --> 00:02:59,080 Speaker 1: am I focused on? You know what you'll see. What 54 00:02:59,160 --> 00:03:02,880 Speaker 1: you're seeing is the short cycle industrial companies have already 55 00:03:02,880 --> 00:03:06,840 Speaker 1: experienced fairly significant pain. Is that bleeding into the longer 56 00:03:06,880 --> 00:03:10,320 Speaker 1: cycle companies, and so that the problems in the industrial 57 00:03:10,360 --> 00:03:13,040 Speaker 1: sector are deepening. Well, we won't know that till October 58 00:03:13,080 --> 00:03:15,480 Speaker 1: when the company's report. So we can talk about the 59 00:03:15,520 --> 00:03:17,880 Speaker 1: European banks and other stories out there, but I want 60 00:03:17,960 --> 00:03:22,680 Speaker 1: your thoughts on the stocks to keep performing, keep doing 61 00:03:22,760 --> 00:03:25,600 Speaker 1: and they go go go until they not. Do you 62 00:03:25,680 --> 00:03:28,040 Speaker 1: frame an Amazon or an Apple if you want to 63 00:03:28,040 --> 00:03:31,000 Speaker 1: tell us if you're lowing short, that's great, you're long 64 00:03:31,120 --> 00:03:34,480 Speaker 1: both of them. But but when you participate in those 65 00:03:34,840 --> 00:03:37,760 Speaker 1: there's a belief by the the the Apple files that 66 00:03:37,800 --> 00:03:40,160 Speaker 1: will go on forever. But there's a lot of other 67 00:03:40,240 --> 00:03:43,440 Speaker 1: people out there saying I'm watching for something to break 68 00:03:43,680 --> 00:03:46,880 Speaker 1: or change. How do you watch for something to break 69 00:03:46,960 --> 00:03:50,560 Speaker 1: or change in something that's beloved by by the media 70 00:03:50,560 --> 00:03:54,560 Speaker 1: and by Wall Street, by the by investors. Look, that's 71 00:03:54,600 --> 00:03:58,080 Speaker 1: a very, very difficult question to answer. I mean, the 72 00:03:58,120 --> 00:04:01,880 Speaker 1: way I think about it is companies look great until 73 00:04:01,920 --> 00:04:06,520 Speaker 1: they don't. And all companies are more cyclical than you 74 00:04:06,600 --> 00:04:11,000 Speaker 1: think in a recession. So remember the dot com bubble, 75 00:04:11,840 --> 00:04:14,400 Speaker 1: and what broke the dot com bubble was not valuation. 76 00:04:14,440 --> 00:04:16,520 Speaker 1: What broke the dot com bubble was the recession and 77 00:04:16,520 --> 00:04:18,120 Speaker 1: the fact that some of the dot many of the 78 00:04:18,160 --> 00:04:22,640 Speaker 1: dot com companies, that revenue growth slowed. So as a group, 79 00:04:23,040 --> 00:04:24,880 Speaker 1: you know, I think it's more important to focus on 80 00:04:25,040 --> 00:04:28,359 Speaker 1: is there a recession coming than than not. So you 81 00:04:28,480 --> 00:04:31,920 Speaker 1: identify some secular growth themes that you think and maybe 82 00:04:32,000 --> 00:04:33,560 Speaker 1: going to come under a little bit more pressure than 83 00:04:33,640 --> 00:04:36,600 Speaker 1: some people think they will. Everything always comes under pression 84 00:04:36,680 --> 00:04:40,000 Speaker 1: or recession. That's proven time and time again. Um. You know, 85 00:04:40,040 --> 00:04:44,120 Speaker 1: in the meantime, the trends of a disruption will continue 86 00:04:44,120 --> 00:04:47,279 Speaker 1: whether we have a recession or not. But even the 87 00:04:47,320 --> 00:04:51,480 Speaker 1: disruptors will will experience some softness into recession. Shots at 88 00:04:51,480 --> 00:04:55,520 Speaker 1: the moment, Stave, lot of lots of shorts whereabounts. Well, 89 00:04:55,520 --> 00:05:00,359 Speaker 1: I'm sure a lot of European banks. Um, I'm still 90 00:05:00,360 --> 00:05:03,200 Speaker 1: short Zillo, which I've spoken on this show many, many times, 91 00:05:03,200 --> 00:05:07,800 Speaker 1: many times, and I'm sure it's some industrial companies. That's 92 00:05:07,800 --> 00:05:09,720 Speaker 1: for the European banks. For US as a sector. Ahead 93 00:05:09,720 --> 00:05:12,560 Speaker 1: of the e CP on Thursday. Some people think we 94 00:05:12,640 --> 00:05:15,520 Speaker 1: might get tearing on Thursday to offset some of the 95 00:05:15,520 --> 00:05:17,559 Speaker 1: paying for the banks. Does that change anything for you, Steve? 96 00:05:18,560 --> 00:05:20,400 Speaker 1: I mean, if there's tearing, I'm sure there'll be a 97 00:05:20,520 --> 00:05:24,040 Speaker 1: rally in the European banks. It's meaningless, it's utterly meaningless. 98 00:05:24,040 --> 00:05:29,640 Speaker 1: It's negative rates is just crushing and and I think 99 00:05:29,640 --> 00:05:33,880 Speaker 1: it's a massive policy mistake. Are the low nominal rates 100 00:05:33,880 --> 00:05:36,479 Speaker 1: in the United States as crushing? I mean on a 101 00:05:36,560 --> 00:05:40,880 Speaker 1: relative basis, they're not nearly as crushing, and the US 102 00:05:40,960 --> 00:05:45,600 Speaker 1: banks are much better, much better capitalized in the European banks. 103 00:05:45,640 --> 00:05:49,080 Speaker 1: But as I said earlier on the on the TV show, 104 00:05:49,160 --> 00:05:52,160 Speaker 1: there's a there's a bank conference taking place today and tomorrow, 105 00:05:52,760 --> 00:05:54,960 Speaker 1: and every pretty much every bank is going to report 106 00:05:55,680 --> 00:05:59,840 Speaker 1: on over the weekend. Comerica basically told you that the 107 00:06:00,000 --> 00:06:03,760 Speaker 1: early outings estments it's too high because because it interest rates. 108 00:06:03,760 --> 00:06:05,920 Speaker 1: And I think you're gonna say pretty much every single 109 00:06:05,960 --> 00:06:08,040 Speaker 1: bank get up and say more or less the same thing. 110 00:06:08,120 --> 00:06:10,160 Speaker 1: What do you do with Uber Lift in the coming 111 00:06:10,160 --> 00:06:14,800 Speaker 1: week company? If they can get but would you like 112 00:06:14,880 --> 00:06:17,599 Speaker 1: to have involvement in Uber and Lift is? I haven't 113 00:06:17,600 --> 00:06:19,760 Speaker 1: looked at either one at any depth. What about Twitter? 114 00:06:19,880 --> 00:06:21,720 Speaker 1: I mean, there's other people out there looking at Twitter, 115 00:06:21,760 --> 00:06:24,360 Speaker 1: and of course it's had a lovely bounce. I haven't. 116 00:06:24,400 --> 00:06:27,320 Speaker 1: I don't. I don't have much of wired you in 117 00:06:27,400 --> 00:06:31,240 Speaker 1: those kinds of stocks in Facebook, I'm in Google, I'm 118 00:06:31,240 --> 00:06:34,640 Speaker 1: in Amazon, and yeah, but Amazon is not Lift equivalent. 119 00:06:34,720 --> 00:06:37,080 Speaker 1: Come on, I'm talking about things that have never made 120 00:06:37,080 --> 00:06:38,960 Speaker 1: a dime. You know, They're like the Detroit Lions, they 121 00:06:39,040 --> 00:06:41,520 Speaker 1: ever got it done. Generally like to shy. I generally 122 00:06:41,520 --> 00:06:44,400 Speaker 1: like to shy away from such things. Okay, are you 123 00:06:44,400 --> 00:06:46,159 Speaker 1: going to buy the jets of the Giants and fix 124 00:06:46,279 --> 00:06:49,839 Speaker 1: New York's football problems? I don't have enough money to 125 00:06:49,880 --> 00:06:53,480 Speaker 1: do that, not even close. Maybe the Amazon Apple trade 126 00:06:53,480 --> 00:06:57,320 Speaker 1: will well work out, Steve Eisman, thank you, or Berman 127 00:06:57,720 --> 00:07:01,000 Speaker 1: update there on Apple Amazon, the EU bank you banking 128 00:07:01,080 --> 00:07:03,479 Speaker 1: think John is fastening? Do you really think, John, that 129 00:07:03,480 --> 00:07:05,960 Speaker 1: there will be this tier discussion in some form of 130 00:07:06,000 --> 00:07:07,640 Speaker 1: real queie? I mean there's going to be a real 131 00:07:07,680 --> 00:07:10,320 Speaker 1: tearing discussion. I think that many people hope the President 132 00:07:10,360 --> 00:07:12,720 Speaker 1: drug you can push it through. The problem is, though, 133 00:07:12,760 --> 00:07:14,920 Speaker 1: it's a double edged sword in some regard, isn't it, 134 00:07:14,960 --> 00:07:17,760 Speaker 1: Because if you deliver the tearing tom ultimately, what does 135 00:07:17,800 --> 00:07:20,360 Speaker 1: it do? It just opens up capacity for even lower 136 00:07:20,400 --> 00:07:23,960 Speaker 1: interest rates going forward from here. So it's negative rates 137 00:07:23,960 --> 00:07:26,440 Speaker 1: with some tearing. Okay, there's a little bit of pain, 138 00:07:26,600 --> 00:07:28,320 Speaker 1: a whole lot more pain still to come, because if 139 00:07:28,360 --> 00:07:30,200 Speaker 1: you introduced tearing, you can go a whole lot longer 140 00:07:30,680 --> 00:07:33,080 Speaker 1: with right. Strongly agree with that, and I think Mr 141 00:07:33,080 --> 00:07:50,880 Speaker 1: Eysmen alluded to that as well. John, Fire and Time 142 00:07:50,960 --> 00:07:53,160 Speaker 1: keen trying to help global Wall Street and all of 143 00:07:53,160 --> 00:07:57,560 Speaker 1: you listening as well. On the synthesis of markets economics 144 00:07:58,040 --> 00:08:01,560 Speaker 1: in the litmus paper known as the four Exchange System. 145 00:08:01,720 --> 00:08:04,720 Speaker 1: Dr Englander is out of McGill where he tried to 146 00:08:04,760 --> 00:08:07,720 Speaker 1: make the Montreal Canadians a few years ago and then 147 00:08:07,760 --> 00:08:12,120 Speaker 1: took a PhD at Yale University where he defined the 148 00:08:12,160 --> 00:08:17,440 Speaker 1: analysis of currency pairs and particularly cross esset pairs, all 149 00:08:17,560 --> 00:08:23,520 Speaker 1: the intertwined linkages beneath the major currency pairs and acclaimed 150 00:08:23,800 --> 00:08:27,400 Speaker 1: career at City Group and now even more advantageous to 151 00:08:27,520 --> 00:08:30,680 Speaker 1: be a standard charter where he's had a foreign exchange 152 00:08:30,680 --> 00:08:35,079 Speaker 1: Stephen Anglander with standard charter with a real not emerging 153 00:08:35,160 --> 00:08:38,719 Speaker 1: market but almost non US view. Steve Angler thrilled to 154 00:08:38,800 --> 00:08:42,080 Speaker 1: have you on with that. Let's get your dollar call. 155 00:08:42,760 --> 00:08:48,440 Speaker 1: Is everybody wrong about week dollar? I think the dollar 156 00:08:49,120 --> 00:08:51,760 Speaker 1: is not attractive, but it's very hard to sell. I 157 00:08:51,880 --> 00:08:56,280 Speaker 1: think September what we're seeing is that um asset market 158 00:08:56,360 --> 00:09:00,520 Speaker 1: piece has exploded all over and you know there's a 159 00:09:00,559 --> 00:09:03,480 Speaker 1: little bit of dollars selling, particularly against the merging markets 160 00:09:03,520 --> 00:09:07,079 Speaker 1: and high gilders. But there's also a sense that September 161 00:09:07,480 --> 00:09:12,319 Speaker 1: is calmed. In the approach to the UM Chinese celebration 162 00:09:12,400 --> 00:09:15,439 Speaker 1: of the seventies anniversary of the Communist Party, takeover. So 163 00:09:15,600 --> 00:09:18,640 Speaker 1: there's worries that the UM you know, October might be 164 00:09:18,720 --> 00:09:21,880 Speaker 1: more August than September. Well, within that is it in 165 00:09:21,920 --> 00:09:25,800 Speaker 1: your analysis across raids, the micro analysis of the FX market, 166 00:09:26,320 --> 00:09:28,360 Speaker 1: What is it telling you on a Monday morning in 167 00:09:28,440 --> 00:09:32,760 Speaker 1: September when is it? Is it an idiosyncratic mush or 168 00:09:32,880 --> 00:09:35,920 Speaker 1: is there an Englanders theme to what you're seeing? It's 169 00:09:35,960 --> 00:09:39,679 Speaker 1: standard charter. Look. I think that the you know what 170 00:09:39,920 --> 00:09:45,040 Speaker 1: you saw basically from May through August was an accumulation 171 00:09:45,120 --> 00:09:48,040 Speaker 1: of risk oppositions. Basically from the time Trump sent his 172 00:09:48,120 --> 00:09:51,440 Speaker 1: tweets at the beginning of May um you know, right 173 00:09:51,720 --> 00:09:53,599 Speaker 1: right through the end of August, all the news was 174 00:09:54,040 --> 00:09:57,199 Speaker 1: really bad. And I think, you know, right now you're 175 00:09:57,240 --> 00:09:59,679 Speaker 1: seeing the the unwind of this news. You know, we 176 00:10:00,040 --> 00:10:03,080 Speaker 1: we were along South Africa that did very well. Uh, 177 00:10:03,600 --> 00:10:06,160 Speaker 1: you know, a couple of other high yielders have done 178 00:10:06,200 --> 00:10:09,079 Speaker 1: well in the last couple of days. The you know 179 00:10:09,160 --> 00:10:11,000 Speaker 1: the question, you know, the question is everyone seems to 180 00:10:11,080 --> 00:10:13,520 Speaker 1: think that they'll be able to get out and everybody 181 00:10:13,600 --> 00:10:18,319 Speaker 1: knows the October first kind of UM calendar event that 182 00:10:18,440 --> 00:10:22,800 Speaker 1: once the Chinese UM you know, celebration is over, they 183 00:10:22,840 --> 00:10:25,440 Speaker 1: will not have to be as calming and asset markets 184 00:10:25,480 --> 00:10:27,400 Speaker 1: as they seem to want to be now, but it's 185 00:10:27,440 --> 00:10:30,800 Speaker 1: not stopping asset markets from moving. I'd say that there's 186 00:10:30,800 --> 00:10:34,760 Speaker 1: still is nervousness there. Things aren't you know, risk on 187 00:10:34,920 --> 00:10:37,840 Speaker 1: isn't bursting out. I mean, Euros trading kind of soggy, 188 00:10:38,040 --> 00:10:40,560 Speaker 1: and a bunch of other currencies are not going as 189 00:10:40,600 --> 00:10:42,800 Speaker 1: far as you would expect them to. But the market 190 00:10:42,880 --> 00:10:46,079 Speaker 1: seems relatively comfortable right now. Stave. What you're saying implies 191 00:10:46,160 --> 00:10:49,640 Speaker 1: that the remmbers in the driving scene right now, it's 192 00:10:49,679 --> 00:10:53,520 Speaker 1: not essentially what you're saying. Well, I look, I think 193 00:10:53,920 --> 00:10:57,000 Speaker 1: that and breaks it. But I think that's through. You know, 194 00:10:57,160 --> 00:11:01,680 Speaker 1: if he looks through um uh, you a maze. Through August, 195 00:11:01,840 --> 00:11:06,040 Speaker 1: it was mostly trade war c n Y reaction and 196 00:11:06,200 --> 00:11:09,959 Speaker 1: counter reaction. And my guess is that will be you know, 197 00:11:10,160 --> 00:11:12,760 Speaker 1: vuying to see which one is more important come October. 198 00:11:13,120 --> 00:11:16,760 Speaker 1: Um as you know one deadline, you know, one day 199 00:11:16,840 --> 00:11:19,640 Speaker 1: passes and the other one approaches. Steve, Steve, can I 200 00:11:19,720 --> 00:11:21,760 Speaker 1: conclude from your remarks in the last couple of minutes 201 00:11:21,800 --> 00:11:25,040 Speaker 1: that you think the stand down in Hong Kong, the 202 00:11:25,400 --> 00:11:27,480 Speaker 1: talks that were about to say between the United States 203 00:11:27,520 --> 00:11:30,319 Speaker 1: and China, the relative stability over the last week in 204 00:11:30,360 --> 00:11:33,199 Speaker 1: the Chinese currency. All of those things are just to 205 00:11:33,320 --> 00:11:36,319 Speaker 1: stabilize things ahead of a political event in China and 206 00:11:36,400 --> 00:11:41,199 Speaker 1: then after we get into October's game on again. Um. Yeah, look, 207 00:11:41,240 --> 00:11:43,520 Speaker 1: I'd say that you know, we we know the incentives 208 00:11:43,559 --> 00:11:45,800 Speaker 1: for things to be stable now, and it probably works 209 00:11:45,840 --> 00:11:48,400 Speaker 1: for the US as well to stabilize equity markets and 210 00:11:48,640 --> 00:11:53,439 Speaker 1: and you know, basically keep them close to all time highs. Um. 211 00:11:53,880 --> 00:11:56,160 Speaker 1: They'll probably feel each other out in October to see 212 00:11:56,240 --> 00:11:58,439 Speaker 1: how much room there's to negotiate. There's no guarantee that 213 00:11:58,480 --> 00:12:01,400 Speaker 1: things will fall apart, but they think that the incentives 214 00:12:01,480 --> 00:12:04,840 Speaker 1: to stabilize accent markets are much stronger in September than 215 00:12:04,880 --> 00:12:07,080 Speaker 1: they will be in two four. If you're just joining us, 216 00:12:07,120 --> 00:12:10,480 Speaker 1: Steven Angler with us, he's head of Global Canaries in 217 00:12:10,559 --> 00:12:13,120 Speaker 1: the coal Mine and Standard Charter. We're thrilled that he 218 00:12:13,160 --> 00:12:15,760 Speaker 1: could be with us this morning. Dr Anglander, where are 219 00:12:15,840 --> 00:12:18,160 Speaker 1: the canaries in the Clone coal mine? I mean, it's 220 00:12:18,200 --> 00:12:21,640 Speaker 1: the ultimate doom and gloom cliche. Steve Anglinder has never 221 00:12:21,720 --> 00:12:24,360 Speaker 1: been a doom and gloom guy. Are the coal mines 222 00:12:24,400 --> 00:12:28,880 Speaker 1: out there under the commit canaries? Lit up. Look, you know, 223 00:12:29,080 --> 00:12:33,319 Speaker 1: I think that the U S Economic data, Um. You know, 224 00:12:33,440 --> 00:12:35,840 Speaker 1: to say that they're mixed is a cliche, but they're 225 00:12:35,920 --> 00:12:39,680 Speaker 1: they're mixed with you know, some numbers more of a concentration, 226 00:12:39,720 --> 00:12:43,080 Speaker 1: and numbers looking soft doesn't guarantee that things are right. 227 00:12:43,160 --> 00:12:44,679 Speaker 1: But but what do you see and come out? What 228 00:12:44,720 --> 00:12:46,679 Speaker 1: do you see in Singapore? What do you see? I 229 00:12:46,760 --> 00:12:50,280 Speaker 1: spoke to the Chilean finance Minister this morning, Dr Lorraine. 230 00:12:50,360 --> 00:12:52,360 Speaker 1: What do you see in Chile? What do you see 231 00:12:52,400 --> 00:12:57,079 Speaker 1: in Singapore? What do you see in Kenya? Look, you know, 232 00:12:57,200 --> 00:12:59,959 Speaker 1: certainly what we're seeing in Asia and the Chinese trade 233 00:13:00,080 --> 00:13:02,120 Speaker 1: numbers that came out over the weekend tells you what 234 00:13:02,200 --> 00:13:05,199 Speaker 1: you're seeing because the things are soft. Um. You know, 235 00:13:05,280 --> 00:13:07,959 Speaker 1: things aren't great anywhere. You know Africa actually, you know, 236 00:13:08,040 --> 00:13:12,319 Speaker 1: it looks better than than many regions. Um. If you're 237 00:13:12,320 --> 00:13:15,760 Speaker 1: a commodity exporter and the biggest commodity produced a consumer 238 00:13:15,800 --> 00:13:18,280 Speaker 1: in the world is kind of sluggish, then you're going 239 00:13:18,320 --> 00:13:21,480 Speaker 1: to be sluggish. Um. But I'd say that the you know, 240 00:13:21,600 --> 00:13:24,680 Speaker 1: the the green shoots are just aren't there yet, certainly 241 00:13:24,720 --> 00:13:27,640 Speaker 1: not in Asia. Um. And even though some of the 242 00:13:27,840 --> 00:13:33,000 Speaker 1: countries around China should be benefiting from diversion of supply change, 243 00:13:33,080 --> 00:13:37,199 Speaker 1: the the the overall sort of angst and worry is 244 00:13:37,640 --> 00:13:40,000 Speaker 1: dominating that. So even there's things, aren't that. This is 245 00:13:40,040 --> 00:13:42,640 Speaker 1: why we love Steve Angler green shoots. When was the 246 00:13:42,760 --> 00:13:45,320 Speaker 1: last time, I mean, I think the Queen is using 247 00:13:45,400 --> 00:13:47,920 Speaker 1: green shoots with the Prime Minister John the last time 248 00:13:48,000 --> 00:13:50,280 Speaker 1: someone asked for tride on Kenya? You want to try 249 00:13:50,280 --> 00:13:52,600 Speaker 1: it on the Kenyan shilling and wanders the world. He's 250 00:13:52,640 --> 00:13:56,520 Speaker 1: the world can give you a trade on the as well. 251 00:13:56,640 --> 00:13:58,880 Speaker 1: You're trying to book a vacation. No, I'm not trying 252 00:13:58,960 --> 00:14:01,319 Speaker 1: to book a vacation. Just think where with Steve Angry, 253 00:14:01,320 --> 00:14:03,959 Speaker 1: he's like a giant in cross rates. Stave Thursday a 254 00:14:04,120 --> 00:14:06,240 Speaker 1: c B base case for you. You're looking for the 255 00:14:06,320 --> 00:14:10,079 Speaker 1: full package? What is it? You know? We don't think so. 256 00:14:10,360 --> 00:14:12,240 Speaker 1: We we think that they're going to do ten basis 257 00:14:12,280 --> 00:14:15,640 Speaker 1: points and hold off on quantitative easing UM, you know, 258 00:14:15,679 --> 00:14:18,080 Speaker 1: which would be a disappointment to the market. What I'd 259 00:14:18,120 --> 00:14:22,360 Speaker 1: say is that the UM market is, you know, just 260 00:14:22,480 --> 00:14:26,240 Speaker 1: looking at where employed volatility is, it's quite low going 261 00:14:26,360 --> 00:14:29,120 Speaker 1: into this event. Whereas they think that the outcomes are 262 00:14:29,160 --> 00:14:31,680 Speaker 1: pretty binary. They're either going to go in with both 263 00:14:31,760 --> 00:14:35,040 Speaker 1: hands because this is dragging his last chance or you know, 264 00:14:35,280 --> 00:14:40,200 Speaker 1: his desire for a big stimulus package will be rebuffed. Um. 265 00:14:40,800 --> 00:14:42,920 Speaker 1: You know we're we're kind of leaning towards a more 266 00:14:43,000 --> 00:14:46,440 Speaker 1: hawkish view. We should be good for the euro it 267 00:14:46,520 --> 00:14:49,080 Speaker 1: won't be great for bond markets, not just in Europe 268 00:14:49,120 --> 00:14:51,960 Speaker 1: but globally. Stave pretty much everyone I spoke to at 269 00:14:51,960 --> 00:14:53,920 Speaker 1: the back end of last week coming into this trading 270 00:14:53,960 --> 00:14:55,480 Speaker 1: week ahead of the a c base said to me 271 00:14:56,000 --> 00:14:58,400 Speaker 1: that if we don't get tearing with the right cut 272 00:14:58,440 --> 00:15:00,880 Speaker 1: from the c B this sturstay, the market is not 273 00:15:00,960 --> 00:15:03,120 Speaker 1: going to respond. Well. Is that your take to Staves? 274 00:15:03,600 --> 00:15:06,680 Speaker 1: I think, look, I think the market expect hearing. They 275 00:15:06,760 --> 00:15:10,440 Speaker 1: expect a rate cut. They got fifteen basis points priced 276 00:15:10,480 --> 00:15:12,920 Speaker 1: in more or less, so it means that ten isn't enough. 277 00:15:13,480 --> 00:15:15,400 Speaker 1: And I think that they want you know that there's 278 00:15:15,400 --> 00:15:18,800 Speaker 1: a strong expectation that they might reannounce QUE. So the 279 00:15:18,920 --> 00:15:21,760 Speaker 1: market is you know, they spent a month telling you 280 00:15:21,920 --> 00:15:24,960 Speaker 1: how great the package was going to be. UM, so 281 00:15:25,080 --> 00:15:28,920 Speaker 1: if they back off, now that's a major disappointment. Steve Englander, 282 00:15:29,040 --> 00:15:32,840 Speaker 1: can can you showing breakdown on the South African Ran 283 00:15:32,920 --> 00:15:37,000 Speaker 1: I mean it's been long run strong. Can you showing short? 284 00:15:37,080 --> 00:15:40,800 Speaker 1: South African ran We're now really on the resistance of 285 00:15:40,920 --> 00:15:44,160 Speaker 1: that chart. Can we break rather the support of that chart? 286 00:15:44,440 --> 00:15:46,800 Speaker 1: Can we break below it too? Ever stronger? Can you 287 00:15:46,920 --> 00:15:51,680 Speaker 1: showing uh? I'll tell you my You know, I have 288 00:15:51,760 --> 00:15:54,720 Speaker 1: as much chance of being Goldie for the Montreal Canadians 289 00:15:54,760 --> 00:15:57,680 Speaker 1: as they do for being able to tell you off 290 00:15:57,760 --> 00:16:01,360 Speaker 1: the cuff. I'll can you hidlings are is going? But 291 00:16:01,640 --> 00:16:03,480 Speaker 1: I would say that there's a number of stories in 292 00:16:03,560 --> 00:16:07,120 Speaker 1: Africa that we're looking at. Can you give us one 293 00:16:07,160 --> 00:16:10,720 Speaker 1: of those? Please? Seriously? Can you give us one of those? Ethiopia? 294 00:16:10,920 --> 00:16:14,680 Speaker 1: I mean strong growth economy served in a world backing 295 00:16:14,720 --> 00:16:17,200 Speaker 1: away from structure reform. They seem to be kind of 296 00:16:17,720 --> 00:16:20,440 Speaker 1: heading there. They're search standing out and so you're long 297 00:16:20,560 --> 00:16:24,880 Speaker 1: Ethiopia seriously, Well, we we'd like the Ethiopian economy and 298 00:16:25,000 --> 00:16:28,680 Speaker 1: typically that spills over into asset models over time. It's 299 00:16:28,680 --> 00:16:31,400 Speaker 1: not it's not a day trade. Okay, Well, I'm glad 300 00:16:31,440 --> 00:16:33,240 Speaker 1: to know it's not a day j Farrell was getting 301 00:16:33,280 --> 00:16:36,240 Speaker 1: out the ticket right now. Stephen Englander, thank you so much. 302 00:16:36,280 --> 00:16:38,800 Speaker 1: With standard charter and folks, I'm going to put out 303 00:16:39,000 --> 00:16:44,560 Speaker 1: the Rand shilling chart. You'll see it first on Bloomberg 304 00:16:46,240 --> 00:16:49,880 Speaker 1: Parity for no, No, it's a one way trade. Strong. 305 00:16:50,000 --> 00:16:54,960 Speaker 1: Can you shilling versus something African South? I don't know 306 00:16:55,200 --> 00:17:00,760 Speaker 1: the Ethiopia. What I think it's maybe the p A right. 307 00:17:02,360 --> 00:17:04,040 Speaker 1: We love do you know? We make jokes about it, 308 00:17:04,080 --> 00:17:06,920 Speaker 1: but they we We love having on guests with a 309 00:17:07,040 --> 00:17:13,560 Speaker 1: prodigious abilities, especially background at Frontier Marcus as well. Yeah, 310 00:17:13,800 --> 00:17:15,119 Speaker 1: she did more of that, to be honest with you. 311 00:17:28,720 --> 00:17:31,920 Speaker 1: Carl Weinberg with us right now with futures advancing, John 312 00:17:32,000 --> 00:17:35,879 Speaker 1: Ferrell driving futures higher up seven, up nine, futures now 313 00:17:36,000 --> 00:17:39,720 Speaker 1: up ten. We're not I'm not yet on a DOWD watch, 314 00:17:39,800 --> 00:17:42,359 Speaker 1: but we're getting lathered up. Carl Weinberg with us with 315 00:17:42,520 --> 00:17:45,840 Speaker 1: high frequency economics, and Carl, I've got a diverge in 316 00:17:45,920 --> 00:17:49,280 Speaker 1: a too short visit to your expertise in South America, 317 00:17:49,359 --> 00:17:53,199 Speaker 1: which has earned over decades of debt workout, is an 318 00:17:53,320 --> 00:17:57,080 Speaker 1: Argentinean debt workout this time the same as it's always been. 319 00:17:58,359 --> 00:18:00,240 Speaker 1: Do come you know you you flatter me. I'm not 320 00:18:00,359 --> 00:18:04,200 Speaker 1: really tracking Latin America that accurately right now, so I 321 00:18:04,320 --> 00:18:07,720 Speaker 1: have to take a pass on the Argentine question. Really Okay, well, 322 00:18:08,000 --> 00:18:11,120 Speaker 1: there it is, But is it idiosyncratic? Is it removed? 323 00:18:11,240 --> 00:18:13,280 Speaker 1: And when you look at all the other things that 324 00:18:13,320 --> 00:18:16,320 Speaker 1: are out there in the e M, are they still 325 00:18:16,600 --> 00:18:21,600 Speaker 1: idiosyncratic or they're tightening up into the autumn um Again, Tom, 326 00:18:21,640 --> 00:18:23,960 Speaker 1: I'm not tracking the Argentine situation. I'm going to take 327 00:18:23,960 --> 00:18:26,400 Speaker 1: a pass. It's not our area of expertise at high frequency. 328 00:18:26,720 --> 00:18:29,000 Speaker 1: You killing me, Carl. I've known it for a million years, 329 00:18:29,040 --> 00:18:33,720 Speaker 1: and it's just did I say something wrong? Was it? 330 00:18:34,240 --> 00:18:38,639 Speaker 1: Was it that barbecue in August? John Safe? I know 331 00:18:38,720 --> 00:18:40,960 Speaker 1: you're focused on the United States, and the main question 332 00:18:41,040 --> 00:18:42,920 Speaker 1: for many people is the weakness that is emerging and 333 00:18:43,000 --> 00:18:46,080 Speaker 1: manufacturing versus the resiliency that we see in the bulk 334 00:18:46,119 --> 00:18:48,840 Speaker 1: of the economy, and the fair is that one bleeds 335 00:18:48,880 --> 00:18:50,800 Speaker 1: into the other. Count Just frame that for us and 336 00:18:50,960 --> 00:18:53,120 Speaker 1: what you're tunn of your clients at the moment. Yeah, Well, 337 00:18:53,160 --> 00:18:55,320 Speaker 1: we do have some expertise at that high frequent at 338 00:18:55,359 --> 00:18:57,800 Speaker 1: high treason. You know, I'm quite a bit and there 339 00:18:57,800 --> 00:19:00,680 Speaker 1: we're watching the divergence between the I S Index and 340 00:19:00,800 --> 00:19:03,800 Speaker 1: the market index very carefully. The I S M, of course, 341 00:19:03,920 --> 00:19:07,040 Speaker 1: is the much longer established index and that's showing us 342 00:19:07,359 --> 00:19:10,159 Speaker 1: a reading that not only rose in the last report 343 00:19:10,240 --> 00:19:13,200 Speaker 1: to fifty five point six, but it also is consistent 344 00:19:13,280 --> 00:19:16,200 Speaker 1: with about a three percent trend and annualized GDP growth. 345 00:19:16,600 --> 00:19:19,359 Speaker 1: And that suggests the story that we've been pushing for 346 00:19:19,440 --> 00:19:21,119 Speaker 1: a long time and that we think the FED is 347 00:19:21,119 --> 00:19:23,560 Speaker 1: alluding to, which is that the U. S economy is 348 00:19:23,600 --> 00:19:26,760 Speaker 1: going to be okay. Maybe not quite that okay. The 349 00:19:27,359 --> 00:19:30,080 Speaker 1: index gives us reason to give some pause in that thinking. 350 00:19:30,320 --> 00:19:32,960 Speaker 1: But it's going to be okay despite the headwinds coming 351 00:19:33,000 --> 00:19:35,720 Speaker 1: from trade. Is it okay? I mean, this is really 352 00:19:35,760 --> 00:19:38,760 Speaker 1: important for us. The recessions negative GDP growth is an 353 00:19:38,840 --> 00:19:43,000 Speaker 1: okay economy, summer's secular stagnation, or can to be something 354 00:19:43,119 --> 00:19:45,800 Speaker 1: better than that? All blended in? Well, I think it's 355 00:19:45,840 --> 00:19:47,600 Speaker 1: going to be all blended in. That's a good way 356 00:19:47,640 --> 00:19:49,800 Speaker 1: to think about it. There is a slow down in 357 00:19:49,920 --> 00:19:53,120 Speaker 1: growth coming from demographics, There is a slowdown in growth 358 00:19:53,200 --> 00:19:55,760 Speaker 1: coming from technology. There are a number of reasons to 359 00:19:55,800 --> 00:19:58,399 Speaker 1: think that growth moving forward is not going to be 360 00:19:58,480 --> 00:20:00,760 Speaker 1: as brilliant as it has been in the past in 361 00:20:00,800 --> 00:20:04,040 Speaker 1: the United States and elsewhere in the world. But nonetheless, 362 00:20:04,080 --> 00:20:06,680 Speaker 1: there is still going to be growth on our forecast, 363 00:20:06,960 --> 00:20:09,719 Speaker 1: we think the economy is going to continue to expand, 364 00:20:10,280 --> 00:20:13,200 Speaker 1: albeit at a modest pace. Sped easing is going to 365 00:20:13,280 --> 00:20:15,120 Speaker 1: help that in the short term, and the longer term, 366 00:20:15,160 --> 00:20:17,600 Speaker 1: productivity growth is going to keep us moving. In some 367 00:20:17,760 --> 00:20:20,520 Speaker 1: immigration is going to keep us moving despite the demographics 368 00:20:20,920 --> 00:20:23,480 Speaker 1: and these headwinds from trade and tariffs, you know, they're 369 00:20:23,520 --> 00:20:26,480 Speaker 1: not forever. There are one time hit on the economy, 370 00:20:26,680 --> 00:20:28,639 Speaker 1: and we don't think those drags are going to get 371 00:20:28,720 --> 00:20:30,880 Speaker 1: any worse. Where those headwinds are going to get any 372 00:20:30,920 --> 00:20:33,720 Speaker 1: worse in the in the near future, is that the 373 00:20:33,760 --> 00:20:36,200 Speaker 1: case if tariffs go up again in October, is that 374 00:20:36,280 --> 00:20:40,080 Speaker 1: the case of tariffs on new products come in in December, Well, 375 00:20:40,160 --> 00:20:42,120 Speaker 1: that's already in the market, John, You know, I don't 376 00:20:42,160 --> 00:20:44,159 Speaker 1: think that's going to be a surprise to anybody, and 377 00:20:44,240 --> 00:20:47,320 Speaker 1: I think it's already in everybody's economic plans. What we 378 00:20:47,560 --> 00:20:50,720 Speaker 1: hear from people who are uh, you know, out in 379 00:20:50,800 --> 00:20:54,480 Speaker 1: the field is that this uncertainty for trade has created 380 00:20:54,720 --> 00:20:58,040 Speaker 1: a blip in investment, okay, and it's made it difficult 381 00:20:58,119 --> 00:21:01,480 Speaker 1: or impossible to invest. Some point those investments are going 382 00:21:01,560 --> 00:21:04,760 Speaker 1: to get made, and that at another point we're going 383 00:21:04,800 --> 00:21:07,359 Speaker 1: to reach the point where this drag, the reduction and 384 00:21:07,480 --> 00:21:10,200 Speaker 1: investment is going to stop. We want to not confuse 385 00:21:10,240 --> 00:21:12,840 Speaker 1: our second and our third derivatives here, So we think 386 00:21:12,920 --> 00:21:15,399 Speaker 1: that the hit is there and it's real, but as 387 00:21:15,480 --> 00:21:18,360 Speaker 1: long as it doesn't get any worse, it won't continue 388 00:21:18,400 --> 00:21:20,920 Speaker 1: to drag on GDP growth. When you say it's already 389 00:21:20,920 --> 00:21:23,440 Speaker 1: in the market, what do you mean by that specifically, Well, 390 00:21:23,480 --> 00:21:26,200 Speaker 1: I think everybody knows, you know, what the President's position is. 391 00:21:26,280 --> 00:21:28,359 Speaker 1: Everybody is pretty sure that we're going to see this 392 00:21:28,520 --> 00:21:31,200 Speaker 1: increase in tariffs coming. Uh, And I think that that's 393 00:21:31,240 --> 00:21:33,400 Speaker 1: the bet in the market. You know, to be wrong 394 00:21:33,760 --> 00:21:36,720 Speaker 1: would be the case in which the tariffs are not 395 00:21:36,880 --> 00:21:39,560 Speaker 1: imposed for some reason. That would be a positive shock. 396 00:21:39,680 --> 00:21:42,840 Speaker 1: So I think the worst, the worst outcomes are already 397 00:21:42,920 --> 00:21:46,040 Speaker 1: discounted in the markets. But for companies, of course, even 398 00:21:46,080 --> 00:21:48,840 Speaker 1: though no it's coming, they still, you know, are very 399 00:21:48,920 --> 00:21:51,720 Speaker 1: leary about making investment plans until they see what's actually 400 00:21:51,800 --> 00:21:55,119 Speaker 1: going to happen. So investment is depressed, but it's not 401 00:21:55,200 --> 00:21:58,560 Speaker 1: going to continue to decline. Carl, we didn't have time 402 00:21:58,600 --> 00:22:00,760 Speaker 1: to get to your wonderful martial and cross on the 403 00:22:00,880 --> 00:22:03,840 Speaker 1: Japanese sales tax. Will say that for Wednesday, Dr Weimberg 404 00:22:04,200 --> 00:22:21,320 Speaker 1: with high frequency economics and everything. But Argentina there she 405 00:22:21,600 --> 00:22:24,400 Speaker 1: is in London. Juris Raphael joins us right now, always 406 00:22:24,440 --> 00:22:28,359 Speaker 1: writing on Brexit with a wonderful sanity, and she drops 407 00:22:28,440 --> 00:22:32,760 Speaker 1: by to bring us forward to a probed Monday as well. Trades. 408 00:22:32,840 --> 00:22:34,960 Speaker 1: First of all, I've got to ask you what is 409 00:22:35,080 --> 00:22:39,640 Speaker 1: absolutely galvanized all in America. I'm sorry. It's not cricket, 410 00:22:39,760 --> 00:22:44,720 Speaker 1: it's not Brexit. It's the British Airways strike. The British people, 411 00:22:44,840 --> 00:22:47,879 Speaker 1: are they in support of the company, Are they in 412 00:22:48,040 --> 00:22:51,480 Speaker 1: support of American and Delta Airlines? Are they actually in 413 00:22:51,560 --> 00:22:54,359 Speaker 1: support of the pilots at British air all the planes 414 00:22:54,400 --> 00:22:57,240 Speaker 1: out for forty eight hours. I think the British people 415 00:22:57,240 --> 00:23:01,239 Speaker 1: will have very little patients for British Airways right now, 416 00:23:01,320 --> 00:23:04,480 Speaker 1: will probably be more on the side of the pilot. However, 417 00:23:04,600 --> 00:23:07,920 Speaker 1: you know, school holidays are over, many people are have 418 00:23:08,040 --> 00:23:11,880 Speaker 1: returned to work, so uh, you know, and of course 419 00:23:11,920 --> 00:23:15,360 Speaker 1: Brexit has dominated, uh the news cycle, so we'll see. 420 00:23:15,440 --> 00:23:18,359 Speaker 1: But I would suspect there'd be more sympathy with the 421 00:23:18,440 --> 00:23:21,880 Speaker 1: pilots on this one. Is it a unionized United Kingdom still? 422 00:23:22,000 --> 00:23:24,320 Speaker 1: I mean we're all coming out of Clement Atlie and 423 00:23:24,520 --> 00:23:29,080 Speaker 1: you know the labor is there a more union tone 424 00:23:29,320 --> 00:23:31,879 Speaker 1: in England that helps the pilots, do you know? I 425 00:23:31,920 --> 00:23:36,320 Speaker 1: mean union actual union membership is quite low. I would 426 00:23:36,920 --> 00:23:39,359 Speaker 1: get it wrong if I tried to statistic off the 427 00:23:39,440 --> 00:23:42,160 Speaker 1: top of my head. But we are a long way 428 00:23:42,400 --> 00:23:45,000 Speaker 1: from what it was before Thatcher came in broth the 429 00:23:45,080 --> 00:23:47,359 Speaker 1: backs of the back of the unions. But you know 430 00:23:48,520 --> 00:23:54,040 Speaker 1: there is a movement toward reviving um labor unions by 431 00:23:54,119 --> 00:23:56,440 Speaker 1: the Labor Party itself, which is still very reliant on 432 00:23:56,480 --> 00:23:58,320 Speaker 1: the union. So I think we're seeing, uh, you know, 433 00:23:58,359 --> 00:24:00,680 Speaker 1: we're seeing some of that enter back in to politics 434 00:24:00,760 --> 00:24:03,119 Speaker 1: and and I would bet it will feature in the 435 00:24:03,240 --> 00:24:06,520 Speaker 1: next election in some way as well. Truce Raphael of 436 00:24:06,600 --> 00:24:09,439 Speaker 1: course on Brexit. Truce what I do where I'm supposed 437 00:24:09,440 --> 00:24:11,840 Speaker 1: to be read in As I look at Bloomberg News, 438 00:24:11,880 --> 00:24:13,760 Speaker 1: the Brexit team, I look at your good work for 439 00:24:13,840 --> 00:24:16,720 Speaker 1: Bloomberg Opinion. I look at the Telegraph at times, the 440 00:24:16,800 --> 00:24:19,920 Speaker 1: Guardian UK even some of the other papers as well. 441 00:24:20,800 --> 00:24:25,399 Speaker 1: I'm lost. Does Boris Johnson is this great calculation that 442 00:24:25,560 --> 00:24:28,240 Speaker 1: the people of the United Kingdom are behind him? Is 443 00:24:28,320 --> 00:24:33,080 Speaker 1: that what this calculations about Yeah. I mean that, first 444 00:24:33,119 --> 00:24:34,720 Speaker 1: of all, I should say that we're all lost, even 445 00:24:34,760 --> 00:24:37,360 Speaker 1: those of us who are following it twenty four seven. 446 00:24:37,880 --> 00:24:42,400 Speaker 1: But I think that's broadly right, that he is calculating 447 00:24:42,440 --> 00:24:45,359 Speaker 1: that the people will stick with what they see as 448 00:24:45,400 --> 00:24:49,720 Speaker 1: a strong man, somebody who's abiding by the principle and 449 00:24:49,800 --> 00:24:53,520 Speaker 1: the result of the referendum, against what he's portraying as 450 00:24:53,560 --> 00:24:56,960 Speaker 1: the establishment, which is Parliament and of course the European Union. 451 00:24:57,359 --> 00:25:00,240 Speaker 1: That's his bet. That's how he's trying to uh you 452 00:25:00,440 --> 00:25:03,760 Speaker 1: fight the ground of the next election on the basis 453 00:25:03,920 --> 00:25:08,359 Speaker 1: of uh boris who's trying to deliver the referendum versus 454 00:25:08,400 --> 00:25:12,600 Speaker 1: Parliament versus the EU. However, there are signs that it's backfiring, 455 00:25:12,800 --> 00:25:15,880 Speaker 1: and I think this period in which Parliament is prorogued 456 00:25:16,200 --> 00:25:19,000 Speaker 1: is going to be key because we see boys saying 457 00:25:19,040 --> 00:25:22,399 Speaker 1: that he wants to deal um. He tried to use 458 00:25:22,480 --> 00:25:26,040 Speaker 1: this period for one rounding it up. The vote was 459 00:25:26,240 --> 00:25:31,480 Speaker 1: fifty two of forty eight percent Leave beating remain. If 460 00:25:31,520 --> 00:25:34,199 Speaker 1: the margin, does the Prime Minister want to do fifty 461 00:25:34,280 --> 00:25:37,359 Speaker 1: three or fifty four percent leave or is he hoping 462 00:25:37,480 --> 00:25:40,600 Speaker 1: for something bigger than that? When all this works out 463 00:25:40,680 --> 00:25:44,639 Speaker 1: towards a general election. Well, he does not want to 464 00:25:44,800 --> 00:25:49,120 Speaker 1: replay that referendum, and I think the polls um suggests 465 00:25:49,160 --> 00:25:52,200 Speaker 1: that that would be another closely fought referendum if it 466 00:25:52,320 --> 00:25:55,879 Speaker 1: was Leave versus Remain. He's hoping to stitch together a 467 00:25:56,040 --> 00:25:59,520 Speaker 1: new coalition for the Concervative Party which includes all of 468 00:25:59,560 --> 00:26:03,239 Speaker 1: those lead voters who were for the Labor Party before. Uh. 469 00:26:03,440 --> 00:26:07,280 Speaker 1: That's why he's also promising this huge raft of spending 470 00:26:07,800 --> 00:26:10,000 Speaker 1: on public services, which is not a very you know, 471 00:26:10,119 --> 00:26:13,719 Speaker 1: conservative thing to do, not something we normally see from 472 00:26:13,760 --> 00:26:15,879 Speaker 1: the Conservative Party. So he's hoping that will be his 473 00:26:15,960 --> 00:26:19,359 Speaker 1: new majority. Truce Raphael with his Bloomberg opinion. One day, Therese, 474 00:26:19,440 --> 00:26:22,160 Speaker 1: this is a number of months ago John Farrow and I. Folks. 475 00:26:22,200 --> 00:26:23,760 Speaker 1: You know, usually John and I are like, we're not 476 00:26:23,880 --> 00:26:26,560 Speaker 1: on speaking terms. This is one of those windows were 477 00:26:26,600 --> 00:26:29,280 Speaker 1: reaction in speaking terms. And so John goes, let's go 478 00:26:29,320 --> 00:26:31,160 Speaker 1: to breakfast, and I want to go to the McDonald's 479 00:26:31,200 --> 00:26:33,960 Speaker 1: over in Third Avenue, and of course, Therese he picks 480 00:26:34,000 --> 00:26:37,080 Speaker 1: some hoity toity place on Park Avenue. We walk in 481 00:26:37,160 --> 00:26:40,399 Speaker 1: and there's Nigel Farage sitting at the bar, you know, 482 00:26:40,520 --> 00:26:43,040 Speaker 1: having a morning bloody Mary or whatever Mr Farage was doing. 483 00:26:43,520 --> 00:26:46,639 Speaker 1: I mean, I mean, does Boris Johnson need Nigel Ferrage 484 00:26:46,920 --> 00:26:50,560 Speaker 1: and the arch Leavers or can he do this with 485 00:26:50,920 --> 00:26:55,080 Speaker 1: disaffected labor people alone? Now he wants Farage's voters, but 486 00:26:55,160 --> 00:26:59,120 Speaker 1: he doesn't want uh White Farage and wild like he's 487 00:26:59,160 --> 00:27:01,960 Speaker 1: a We talk to him. He's a nice guy. You know, 488 00:27:02,200 --> 00:27:07,159 Speaker 1: he knew what you know. Why does he not want Nigel, Well, 489 00:27:07,240 --> 00:27:10,159 Speaker 1: he doesn't want he Ultimately he wants he wants the 490 00:27:10,200 --> 00:27:13,040 Speaker 1: Conservative Party to be the Conservative Party. He doesn't want 491 00:27:13,080 --> 00:27:16,400 Speaker 1: it to be a coalition of Conservative Party and Brexit Party. 492 00:27:16,400 --> 00:27:20,200 Speaker 1: He'd like to bring Ferrage. I suspect for Age is 493 00:27:20,680 --> 00:27:24,680 Speaker 1: entourage Farrage's party back inside the Conservative Party somehow. I 494 00:27:24,760 --> 00:27:28,440 Speaker 1: don't think he wants a situation where Frage is capable 495 00:27:28,520 --> 00:27:31,840 Speaker 1: of cannibalizing the Conservative Party vote and which Johnson is 496 00:27:31,960 --> 00:27:34,359 Speaker 1: forced to do a deal with the Brexit Party to 497 00:27:34,520 --> 00:27:37,240 Speaker 1: cobble together a coalition in Parliament. He wants parts of 498 00:27:37,280 --> 00:27:39,600 Speaker 1: the Labor Party vote, especially in the North of England, 499 00:27:39,680 --> 00:27:42,720 Speaker 1: the Labor Leave voters. He wants those Brexit Party voters, 500 00:27:42,760 --> 00:27:45,400 Speaker 1: but he wants them all to be inside the tent 501 00:27:45,480 --> 00:27:48,439 Speaker 1: of the Conservative Party. But it's very hard Tom right 502 00:27:48,480 --> 00:27:50,600 Speaker 1: now to say what does the Conservative Party stand for. 503 00:27:50,680 --> 00:27:53,440 Speaker 1: It's very different from the Party of Margaret Thatcher. What 504 00:27:53,560 --> 00:27:55,959 Speaker 1: do you look for seriously in the next I mean, 505 00:27:56,080 --> 00:27:59,320 Speaker 1: it is a constitutional crisis in a nation without a 506 00:27:59,359 --> 00:28:02,199 Speaker 1: written kind institution. Do you look for a nod from 507 00:28:02,280 --> 00:28:05,280 Speaker 1: Buckingham Palace? I mean, what does an arch watcher like 508 00:28:05,440 --> 00:28:08,120 Speaker 1: you look for just in the next twenty four hours. Well, 509 00:28:08,160 --> 00:28:10,399 Speaker 1: I I'm actually in the next twenty four hours, I 510 00:28:10,440 --> 00:28:12,679 Speaker 1: don't think we're going to see, you know, a massive 511 00:28:12,720 --> 00:28:14,879 Speaker 1: shift over the next four weeks. I would look to 512 00:28:14,920 --> 00:28:17,560 Speaker 1: see whether he is willing to do a deal that 513 00:28:17,720 --> 00:28:20,480 Speaker 1: goes back to the EU's original plan of a Northern 514 00:28:20,600 --> 00:28:26,159 Speaker 1: Ireland or of sort of all Ireland UM agreement, so 515 00:28:26,280 --> 00:28:29,200 Speaker 1: that Northern Ireland stays with Ireland and the EU. This 516 00:28:29,320 --> 00:28:32,240 Speaker 1: is what the EU originally wanted. Remember Theresa May said no, 517 00:28:32,440 --> 00:28:34,479 Speaker 1: it must include all of the UK, and that's how 518 00:28:34,520 --> 00:28:36,280 Speaker 1: we ended up with the Irish backstop. I think if 519 00:28:36,280 --> 00:28:39,520 Speaker 1: we see Boris Johnson heading more toward the direction of 520 00:28:39,560 --> 00:28:43,280 Speaker 1: the original EU plan, then we're back into deal territory. 521 00:28:43,360 --> 00:28:45,480 Speaker 1: But he will lose his hard line Brexitter to lose 522 00:28:45,600 --> 00:28:48,360 Speaker 1: Nigel Farrage and his followers, and then he'll need the 523 00:28:48,440 --> 00:28:52,000 Speaker 1: labor MPs from the voting constituencies. That's what I'd be 524 00:28:52,080 --> 00:28:54,000 Speaker 1: looking at over the next few weeks. Over the next 525 00:28:54,080 --> 00:28:55,880 Speaker 1: twenty four hours, I think we've seen things go a 526 00:28:55,920 --> 00:28:59,600 Speaker 1: little bit quiet. For the next you're you're stuck at 527 00:28:59,680 --> 00:29:03,320 Speaker 1: terminal five, you're going nowhere. I recommend the fort Nhum 528 00:29:03,400 --> 00:29:06,360 Speaker 1: and Mason bar there on the first floor where you 529 00:29:06,360 --> 00:29:08,520 Speaker 1: can sit and that's not like a bar, folks with alcohol. 530 00:29:08,760 --> 00:29:10,920 Speaker 1: You can sit there and have forty seven cheeses from 531 00:29:10,960 --> 00:29:13,960 Speaker 1: Scotland or whatever it is. I'd recommend it from terminal 532 00:29:14,080 --> 00:29:17,000 Speaker 1: five and he throw Terse Rafael writing up on British 533 00:29:17,080 --> 00:29:20,280 Speaker 1: Air and also this small political matter in London called 534 00:29:20,320 --> 00:29:23,520 Speaker 1: Brexit as well for Bloomberg Opinion really really must read 535 00:29:24,200 --> 00:29:28,680 Speaker 1: as well. Thanks for listening to the Bloomberg Surveillance podcast. 536 00:29:29,080 --> 00:29:34,000 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 537 00:29:34,160 --> 00:29:38,440 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom 538 00:29:38,600 --> 00:29:42,400 Speaker 1: Keane before the podcast. You can always catch us worldwide. 539 00:29:42,920 --> 00:29:44,000 Speaker 1: I'm Bloomberg Radio