Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily
Speaker 1: we bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot com, and of course on the Bloomberg. Let's
Speaker 1: get to it. Widely anticipated for Global Wall Street. What
Speaker 1: we're doing, our folks, is the kickoff for the new year.
Speaker 1: I'm sorry it's now the Monday after Labor Day. When
Speaker 1: Steve Eisman and I were kids, this is before young
Speaker 1: Pharaoll's time, it was sort of that Wednesday Thursday after
Speaker 1: Labor Day. And now Steve, it's like, now is the
Speaker 1: kickoff for the year? Tell us just your basic position,
Speaker 1: not trade by trade, but are you net long, net
Speaker 1: short net cash? What's the tone you have going into
Speaker 1: this fall? Slightly net long, but only slightly right now?
Speaker 1: And your conviction is and we talked about this earlier,
Speaker 1: wrapped around not a forecast of global recession, but all
Speaker 1: the clouds that are out there from a summer of discontent.
Speaker 1: You suggest that that folds into the autumn and into
Speaker 1: next year. I mean, look, it's it's a very weird
Speaker 1: market in the sense that everybody talks about that they're worried,
Speaker 1: and yet the markets within a two to three percent
Speaker 1: all times, so I don't know how worried they really are.
Speaker 1: I'm in the triple leverage all cash. It's worked like
Speaker 1: a um. But you know, like I said earlier on
Speaker 1: the television show, we are with in my mind, without question,
Speaker 1: in a global industrial slowdown slash recession. On the other hand,
Speaker 1: that consumer is employed and healthy. So the question really
Speaker 1: is is what's happening in the industrial side, which is
Speaker 1: only by TENTA fifteen percent of the economy. Is that
Speaker 1: a canary in the coal mine? Or we're gonna eventually
Speaker 1: pull out of it and the recovery will extend longer.
Speaker 1: And I don't know the answer to that question, but
Speaker 1: it doesn't seem to be priced into the market. Let's
Speaker 1: get your base case, Steve, and try and work that out.
Speaker 1: So last week didn't really change anything for anyone. With
Speaker 1: the manufacturing p M I, the I s M sub fifty,
Speaker 1: the non manufacturing north of fifty, it's the same story.
Speaker 1: Manufacturing looks soft and non manufacturing looks okay. And the
Speaker 1: question is outstanding, as you point out, does it bleed
Speaker 1: from one into another, from weakness into the resilience we
Speaker 1: see in the service sector. Just to sign a probability
Speaker 1: to that if you can, Steve, you've got to have
Speaker 1: a base case in mind. Surely, what are you thinking
Speaker 1: about that? Look, I'm just looking for singles. I mean,
Speaker 1: one of the more interesting indicators is going to be
Speaker 1: the earning season that will start in October. Um. You know,
Speaker 1: the industrial company has reported week numbers in the second quarter,
Speaker 1: but not terrible. My anticipation is that it will be
Speaker 1: significantly worse this quarter and then we'll see how the
Speaker 1: market reacts. Just in terms of the companies you're looking
Speaker 1: at where you expect to see some pain. What are
Speaker 1: you focused on at the moment, Steve? I mean what
Speaker 1: am I focused on? You know what you'll see. What
Speaker 1: you're seeing is the short cycle industrial companies have already
Speaker 1: experienced fairly significant pain. Is that bleeding into the longer
Speaker 1: cycle companies, and so that the problems in the industrial
Speaker 1: sector are deepening. Well, we won't know that till October
Speaker 1: when the company's report. So we can talk about the
Speaker 1: European banks and other stories out there, but I want
Speaker 1: your thoughts on the stocks to keep performing, keep doing
Speaker 1: and they go go go until they not. Do you
Speaker 1: frame an Amazon or an Apple if you want to
Speaker 1: tell us if you're lowing short, that's great, you're long
Speaker 1: both of them. But but when you participate in those
Speaker 1: there's a belief by the the the Apple files that
Speaker 1: will go on forever. But there's a lot of other
Speaker 1: people out there saying I'm watching for something to break
Speaker 1: or change. How do you watch for something to break
Speaker 1: or change in something that's beloved by by the media
Speaker 1: and by Wall Street, by the by investors. Look, that's
Speaker 1: a very, very difficult question to answer. I mean, the
Speaker 1: way I think about it is companies look great until
Speaker 1: they don't. And all companies are more cyclical than you
Speaker 1: think in a recession. So remember the dot com bubble,
Speaker 1: and what broke the dot com bubble was not valuation.
Speaker 1: What broke the dot com bubble was the recession and
Speaker 1: the fact that some of the dot many of the
Speaker 1: dot com companies, that revenue growth slowed. So as a group,
Speaker 1: you know, I think it's more important to focus on
Speaker 1: is there a recession coming than than not. So you
Speaker 1: identify some secular growth themes that you think and maybe
Speaker 1: going to come under a little bit more pressure than
Speaker 1: some people think they will. Everything always comes under pression
Speaker 1: or recession. That's proven time and time again. Um. You know,
Speaker 1: in the meantime, the trends of a disruption will continue
Speaker 1: whether we have a recession or not. But even the
Speaker 1: disruptors will will experience some softness into recession. Shots at
Speaker 1: the moment, Stave, lot of lots of shorts whereabounts. Well,
Speaker 1: I'm sure a lot of European banks. Um, I'm still
Speaker 1: short Zillo, which I've spoken on this show many, many times,
Speaker 1: many times, and I'm sure it's some industrial companies. That's
Speaker 1: for the European banks. For US as a sector. Ahead
Speaker 1: of the e CP on Thursday. Some people think we
Speaker 1: might get tearing on Thursday to offset some of the
Speaker 1: paying for the banks. Does that change anything for you, Steve?
Speaker 1: I mean, if there's tearing, I'm sure there'll be a
Speaker 1: rally in the European banks. It's meaningless, it's utterly meaningless.
Speaker 1: It's negative rates is just crushing and and I think
Speaker 1: it's a massive policy mistake. Are the low nominal rates
Speaker 1: in the United States as crushing? I mean on a
Speaker 1: relative basis, they're not nearly as crushing, and the US
Speaker 1: banks are much better, much better capitalized in the European banks.
Speaker 1: But as I said earlier on the on the TV show,
Speaker 1: there's a there's a bank conference taking place today and tomorrow,
Speaker 1: and every pretty much every bank is going to report
Speaker 1: on over the weekend. Comerica basically told you that the
Speaker 1: early outings estments it's too high because because it interest rates.
Speaker 1: And I think you're gonna say pretty much every single
Speaker 1: bank get up and say more or less the same thing.
Speaker 1: What do you do with Uber Lift in the coming
Speaker 1: week company? If they can get but would you like
Speaker 1: to have involvement in Uber and Lift is? I haven't
Speaker 1: looked at either one at any depth. What about Twitter?
Speaker 1: I mean, there's other people out there looking at Twitter,
Speaker 1: and of course it's had a lovely bounce. I haven't.
Speaker 1: I don't. I don't have much of wired you in
Speaker 1: those kinds of stocks in Facebook, I'm in Google, I'm
Speaker 1: in Amazon, and yeah, but Amazon is not Lift equivalent.
Speaker 1: Come on, I'm talking about things that have never made
Speaker 1: a dime. You know, They're like the Detroit Lions, they
Speaker 1: ever got it done. Generally like to shy. I generally
Speaker 1: like to shy away from such things. Okay, are you
Speaker 1: going to buy the jets of the Giants and fix
Speaker 1: New York's football problems? I don't have enough money to
Speaker 1: do that, not even close. Maybe the Amazon Apple trade
Speaker 1: will well work out, Steve Eisman, thank you, or Berman
Speaker 1: update there on Apple Amazon, the EU bank you banking
Speaker 1: think John is fastening? Do you really think, John, that
Speaker 1: there will be this tier discussion in some form of
Speaker 1: real queie? I mean there's going to be a real
Speaker 1: tearing discussion. I think that many people hope the President
Speaker 1: drug you can push it through. The problem is, though,
Speaker 1: it's a double edged sword in some regard, isn't it,
Speaker 1: Because if you deliver the tearing tom ultimately, what does
Speaker 1: it do? It just opens up capacity for even lower
Speaker 1: interest rates going forward from here. So it's negative rates
Speaker 1: with some tearing. Okay, there's a little bit of pain,
Speaker 1: a whole lot more pain still to come, because if
Speaker 1: you introduced tearing, you can go a whole lot longer
Speaker 1: with right. Strongly agree with that, and I think Mr
Speaker 1: Eysmen alluded to that as well. John, Fire and Time
Speaker 1: keen trying to help global Wall Street and all of
Speaker 1: you listening as well. On the synthesis of markets economics
Speaker 1: in the litmus paper known as the four Exchange System.
Speaker 1: Dr Englander is out of McGill where he tried to
Speaker 1: make the Montreal Canadians a few years ago and then
Speaker 1: took a PhD at Yale University where he defined the
Speaker 1: analysis of currency pairs and particularly cross esset pairs, all
Speaker 1: the intertwined linkages beneath the major currency pairs and acclaimed
Speaker 1: career at City Group and now even more advantageous to
Speaker 1: be a standard charter where he's had a foreign exchange
Speaker 1: Stephen Anglander with standard charter with a real not emerging
Speaker 1: market but almost non US view. Steve Angler thrilled to
Speaker 1: have you on with that. Let's get your dollar call.
Speaker 1: Is everybody wrong about week dollar? I think the dollar
Speaker 1: is not attractive, but it's very hard to sell. I
Speaker 1: think September what we're seeing is that um asset market
Speaker 1: piece has exploded all over and you know there's a
Speaker 1: little bit of dollars selling, particularly against the merging markets
Speaker 1: and high gilders. But there's also a sense that September
Speaker 1: is calmed. In the approach to the UM Chinese celebration
Speaker 1: of the seventies anniversary of the Communist Party, takeover. So
Speaker 1: there's worries that the UM you know, October might be
Speaker 1: more August than September. Well, within that is it in
Speaker 1: your analysis across raids, the micro analysis of the FX market,
Speaker 1: What is it telling you on a Monday morning in
Speaker 1: September when is it? Is it an idiosyncratic mush or
Speaker 1: is there an Englanders theme to what you're seeing? It's
Speaker 1: standard charter. Look. I think that the you know what
Speaker 1: you saw basically from May through August was an accumulation
Speaker 1: of risk oppositions. Basically from the time Trump sent his
Speaker 1: tweets at the beginning of May um you know, right
Speaker 1: right through the end of August, all the news was
Speaker 1: really bad. And I think, you know, right now you're
Speaker 1: seeing the the unwind of this news. You know, we
Speaker 1: we were along South Africa that did very well. Uh,
Speaker 1: you know, a couple of other high yielders have done
Speaker 1: well in the last couple of days. The you know
Speaker 1: the question, you know, the question is everyone seems to
Speaker 1: think that they'll be able to get out and everybody
Speaker 1: knows the October first kind of UM calendar event that
Speaker 1: once the Chinese UM you know, celebration is over, they
Speaker 1: will not have to be as calming and asset markets
Speaker 1: as they seem to want to be now, but it's
Speaker 1: not stopping asset markets from moving. I'd say that there's
Speaker 1: still is nervousness there. Things aren't you know, risk on
Speaker 1: isn't bursting out. I mean, Euros trading kind of soggy,
Speaker 1: and a bunch of other currencies are not going as
Speaker 1: far as you would expect them to. But the market
Speaker 1: seems relatively comfortable right now. Stave. What you're saying implies
Speaker 1: that the remmbers in the driving scene right now, it's
Speaker 1: not essentially what you're saying. Well, I look, I think
Speaker 1: that and breaks it. But I think that's through. You know,
Speaker 1: if he looks through um uh, you a maze. Through August,
Speaker 1: it was mostly trade war c n Y reaction and
Speaker 1: counter reaction. And my guess is that will be you know,
Speaker 1: vuying to see which one is more important come October.
Speaker 1: Um as you know one deadline, you know, one day
Speaker 1: passes and the other one approaches. Steve, Steve, can I
Speaker 1: conclude from your remarks in the last couple of minutes
Speaker 1: that you think the stand down in Hong Kong, the
Speaker 1: talks that were about to say between the United States
Speaker 1: and China, the relative stability over the last week in
Speaker 1: the Chinese currency. All of those things are just to
Speaker 1: stabilize things ahead of a political event in China and
Speaker 1: then after we get into October's game on again. Um. Yeah, look,
Speaker 1: I'd say that you know, we we know the incentives
Speaker 1: for things to be stable now, and it probably works
Speaker 1: for the US as well to stabilize equity markets and
Speaker 1: and you know, basically keep them close to all time highs. Um.
Speaker 1: They'll probably feel each other out in October to see
Speaker 1: how much room there's to negotiate. There's no guarantee that
Speaker 1: things will fall apart, but they think that the incentives
Speaker 1: to stabilize accent markets are much stronger in September than
Speaker 1: they will be in two four. If you're just joining us,
Speaker 1: Steven Angler with us, he's head of Global Canaries in
Speaker 1: the coal Mine and Standard Charter. We're thrilled that he
Speaker 1: could be with us this morning. Dr Anglander, where are
Speaker 1: the canaries in the Clone coal mine? I mean, it's
Speaker 1: the ultimate doom and gloom cliche. Steve Anglinder has never
Speaker 1: been a doom and gloom guy. Are the coal mines
Speaker 1: out there under the commit canaries? Lit up. Look, you know,
Speaker 1: I think that the U S Economic data, Um. You know,
Speaker 1: to say that they're mixed is a cliche, but they're
Speaker 1: they're mixed with you know, some numbers more of a concentration,
Speaker 1: and numbers looking soft doesn't guarantee that things are right.
Speaker 1: But but what do you see and come out? What
Speaker 1: do you see in Singapore? What do you see? I
Speaker 1: spoke to the Chilean finance Minister this morning, Dr Lorraine.
Speaker 1: What do you see in Chile? What do you see
Speaker 1: in Singapore? What do you see in Kenya? Look, you know,
Speaker 1: certainly what we're seeing in Asia and the Chinese trade
Speaker 1: numbers that came out over the weekend tells you what
Speaker 1: you're seeing because the things are soft. Um. You know,
Speaker 1: things aren't great anywhere. You know Africa actually, you know,
Speaker 1: it looks better than than many regions. Um. If you're
Speaker 1: a commodity exporter and the biggest commodity produced a consumer
Speaker 1: in the world is kind of sluggish, then you're going
Speaker 1: to be sluggish. Um. But I'd say that the you know,
Speaker 1: the the green shoots are just aren't there yet, certainly
Speaker 1: not in Asia. Um. And even though some of the
Speaker 1: countries around China should be benefiting from diversion of supply change,
Speaker 1: the the the overall sort of angst and worry is
Speaker 1: dominating that. So even there's things, aren't that. This is
Speaker 1: why we love Steve Angler green shoots. When was the
Speaker 1: last time, I mean, I think the Queen is using
Speaker 1: green shoots with the Prime Minister John the last time
Speaker 1: someone asked for tride on Kenya? You want to try
Speaker 1: it on the Kenyan shilling and wanders the world. He's
Speaker 1: the world can give you a trade on the as well.
Speaker 1: You're trying to book a vacation. No, I'm not trying
Speaker 1: to book a vacation. Just think where with Steve Angry,
Speaker 1: he's like a giant in cross rates. Stave Thursday a
Speaker 1: c B base case for you. You're looking for the
Speaker 1: full package? What is it? You know? We don't think so.
Speaker 1: We we think that they're going to do ten basis
Speaker 1: points and hold off on quantitative easing UM, you know,
Speaker 1: which would be a disappointment to the market. What I'd
Speaker 1: say is that the UM market is, you know, just
Speaker 1: looking at where employed volatility is, it's quite low going
Speaker 1: into this event. Whereas they think that the outcomes are
Speaker 1: pretty binary. They're either going to go in with both
Speaker 1: hands because this is dragging his last chance or you know,
Speaker 1: his desire for a big stimulus package will be rebuffed. Um.
Speaker 1: You know we're we're kind of leaning towards a more
Speaker 1: hawkish view. We should be good for the euro it
Speaker 1: won't be great for bond markets, not just in Europe
Speaker 1: but globally. Stave pretty much everyone I spoke to at
Speaker 1: the back end of last week coming into this trading
Speaker 1: week ahead of the a c base said to me
Speaker 1: that if we don't get tearing with the right cut
Speaker 1: from the c B this sturstay, the market is not
Speaker 1: going to respond. Well. Is that your take to Staves?
Speaker 1: I think, look, I think the market expect hearing. They
Speaker 1: expect a rate cut. They got fifteen basis points priced
Speaker 1: in more or less, so it means that ten isn't enough.
Speaker 1: And I think that they want you know that there's
Speaker 1: a strong expectation that they might reannounce QUE. So the
Speaker 1: market is you know, they spent a month telling you
Speaker 1: how great the package was going to be. UM, so
Speaker 1: if they back off, now that's a major disappointment. Steve Englander,
Speaker 1: can can you showing breakdown on the South African Ran
Speaker 1: I mean it's been long run strong. Can you showing short?
Speaker 1: South African ran We're now really on the resistance of
Speaker 1: that chart. Can we break rather the support of that chart?
Speaker 1: Can we break below it too? Ever stronger? Can you
Speaker 1: showing uh? I'll tell you my You know, I have
Speaker 1: as much chance of being Goldie for the Montreal Canadians
Speaker 1: as they do for being able to tell you off
Speaker 1: the cuff. I'll can you hidlings are is going? But
Speaker 1: I would say that there's a number of stories in
Speaker 1: Africa that we're looking at. Can you give us one
Speaker 1: of those? Please? Seriously? Can you give us one of those? Ethiopia?
Speaker 1: I mean strong growth economy served in a world backing
Speaker 1: away from structure reform. They seem to be kind of
Speaker 1: heading there. They're search standing out and so you're long
Speaker 1: Ethiopia seriously, Well, we we'd like the Ethiopian economy and
Speaker 1: typically that spills over into asset models over time. It's
Speaker 1: not it's not a day trade. Okay, Well, I'm glad
Speaker 1: to know it's not a day j Farrell was getting
Speaker 1: out the ticket right now. Stephen Englander, thank you so much.
Speaker 1: With standard charter and folks, I'm going to put out
Speaker 1: the Rand shilling chart. You'll see it first on Bloomberg
Speaker 1: Parity for no, No, it's a one way trade. Strong.
Speaker 1: Can you shilling versus something African South? I don't know
Speaker 1: the Ethiopia. What I think it's maybe the p A right.
Speaker 1: We love do you know? We make jokes about it,
Speaker 1: but they we We love having on guests with a
Speaker 1: prodigious abilities, especially background at Frontier Marcus as well. Yeah,
Speaker 1: she did more of that, to be honest with you.
Speaker 1: Carl Weinberg with us right now with futures advancing, John
Speaker 1: Ferrell driving futures higher up seven, up nine, futures now
Speaker 1: up ten. We're not I'm not yet on a DOWD watch,
Speaker 1: but we're getting lathered up. Carl Weinberg with us with
Speaker 1: high frequency economics, and Carl, I've got a diverge in
Speaker 1: a too short visit to your expertise in South America,
Speaker 1: which has earned over decades of debt workout, is an
Speaker 1: Argentinean debt workout this time the same as it's always been.
Speaker 1: Do come you know you you flatter me. I'm not
Speaker 1: really tracking Latin America that accurately right now, so I
Speaker 1: have to take a pass on the Argentine question. Really Okay, well,
Speaker 1: there it is, But is it idiosyncratic? Is it removed?
Speaker 1: And when you look at all the other things that
Speaker 1: are out there in the e M, are they still
Speaker 1: idiosyncratic or they're tightening up into the autumn um Again, Tom,
Speaker 1: I'm not tracking the Argentine situation. I'm going to take
Speaker 1: a pass. It's not our area of expertise at high frequency.
Speaker 1: You killing me, Carl. I've known it for a million years,
Speaker 1: and it's just did I say something wrong? Was it?
Speaker 1: Was it that barbecue in August? John Safe? I know
Speaker 1: you're focused on the United States, and the main question
Speaker 1: for many people is the weakness that is emerging and
Speaker 1: manufacturing versus the resiliency that we see in the bulk
Speaker 1: of the economy, and the fair is that one bleeds
Speaker 1: into the other. Count Just frame that for us and
Speaker 1: what you're tunn of your clients at the moment. Yeah, Well,
Speaker 1: we do have some expertise at that high frequent at
Speaker 1: high treason. You know, I'm quite a bit and there
Speaker 1: we're watching the divergence between the I S Index and
Speaker 1: the market index very carefully. The I S M, of course,
Speaker 1: is the much longer established index and that's showing us
Speaker 1: a reading that not only rose in the last report
Speaker 1: to fifty five point six, but it also is consistent
Speaker 1: with about a three percent trend and annualized GDP growth.
Speaker 1: And that suggests the story that we've been pushing for
Speaker 1: a long time and that we think the FED is
Speaker 1: alluding to, which is that the U. S economy is
Speaker 1: going to be okay. Maybe not quite that okay. The
Speaker 1: index gives us reason to give some pause in that thinking.
Speaker 1: But it's going to be okay despite the headwinds coming
Speaker 1: from trade. Is it okay? I mean, this is really
Speaker 1: important for us. The recessions negative GDP growth is an
Speaker 1: okay economy, summer's secular stagnation, or can to be something
Speaker 1: better than that? All blended in? Well, I think it's
Speaker 1: going to be all blended in. That's a good way
Speaker 1: to think about it. There is a slow down in
Speaker 1: growth coming from demographics, There is a slowdown in growth
Speaker 1: coming from technology. There are a number of reasons to
Speaker 1: think that growth moving forward is not going to be
Speaker 1: as brilliant as it has been in the past in
Speaker 1: the United States and elsewhere in the world. But nonetheless,
Speaker 1: there is still going to be growth on our forecast,
Speaker 1: we think the economy is going to continue to expand,
Speaker 1: albeit at a modest pace. Sped easing is going to
Speaker 1: help that in the short term, and the longer term,
Speaker 1: productivity growth is going to keep us moving. In some
Speaker 1: immigration is going to keep us moving despite the demographics
Speaker 1: and these headwinds from trade and tariffs, you know, they're
Speaker 1: not forever. There are one time hit on the economy,
Speaker 1: and we don't think those drags are going to get
Speaker 1: any worse. Where those headwinds are going to get any
Speaker 1: worse in the in the near future, is that the
Speaker 1: case if tariffs go up again in October, is that
Speaker 1: the case of tariffs on new products come in in December, Well,
Speaker 1: that's already in the market, John, You know, I don't
Speaker 1: think that's going to be a surprise to anybody, and
Speaker 1: I think it's already in everybody's economic plans. What we
Speaker 1: hear from people who are uh, you know, out in
Speaker 1: the field is that this uncertainty for trade has created
Speaker 1: a blip in investment, okay, and it's made it difficult
Speaker 1: or impossible to invest. Some point those investments are going
Speaker 1: to get made, and that at another point we're going
Speaker 1: to reach the point where this drag, the reduction and
Speaker 1: investment is going to stop. We want to not confuse
Speaker 1: our second and our third derivatives here, So we think
Speaker 1: that the hit is there and it's real, but as
Speaker 1: long as it doesn't get any worse, it won't continue
Speaker 1: to drag on GDP growth. When you say it's already
Speaker 1: in the market, what do you mean by that specifically, Well,
Speaker 1: I think everybody knows, you know, what the President's position is.
Speaker 1: Everybody is pretty sure that we're going to see this
Speaker 1: increase in tariffs coming. Uh, And I think that that's
Speaker 1: the bet in the market. You know, to be wrong
Speaker 1: would be the case in which the tariffs are not
Speaker 1: imposed for some reason. That would be a positive shock.
Speaker 1: So I think the worst, the worst outcomes are already
Speaker 1: discounted in the markets. But for companies, of course, even
Speaker 1: though no it's coming, they still, you know, are very
Speaker 1: leary about making investment plans until they see what's actually
Speaker 1: going to happen. So investment is depressed, but it's not
Speaker 1: going to continue to decline. Carl, we didn't have time
Speaker 1: to get to your wonderful martial and cross on the
Speaker 1: Japanese sales tax. Will say that for Wednesday, Dr Weimberg
Speaker 1: with high frequency economics and everything. But Argentina there she
Speaker 1: is in London. Juris Raphael joins us right now, always
Speaker 1: writing on Brexit with a wonderful sanity, and she drops
Speaker 1: by to bring us forward to a probed Monday as well. Trades.
Speaker 1: First of all, I've got to ask you what is
Speaker 1: absolutely galvanized all in America. I'm sorry. It's not cricket,
Speaker 1: it's not Brexit. It's the British Airways strike. The British people,
Speaker 1: are they in support of the company, Are they in
Speaker 1: support of American and Delta Airlines? Are they actually in
Speaker 1: support of the pilots at British air all the planes
Speaker 1: out for forty eight hours. I think the British people
Speaker 1: will have very little patients for British Airways right now,
Speaker 1: will probably be more on the side of the pilot. However,
Speaker 1: you know, school holidays are over, many people are have
Speaker 1: returned to work, so uh, you know, and of course
Speaker 1: Brexit has dominated, uh the news cycle, so we'll see.
Speaker 1: But I would suspect there'd be more sympathy with the
Speaker 1: pilots on this one. Is it a unionized United Kingdom still?
Speaker 1: I mean we're all coming out of Clement Atlie and
Speaker 1: you know the labor is there a more union tone
Speaker 1: in England that helps the pilots, do you know? I
Speaker 1: mean union actual union membership is quite low. I would
Speaker 1: get it wrong if I tried to statistic off the
Speaker 1: top of my head. But we are a long way
Speaker 1: from what it was before Thatcher came in broth the
Speaker 1: backs of the back of the unions. But you know
Speaker 1: there is a movement toward reviving um labor unions by
Speaker 1: the Labor Party itself, which is still very reliant on
Speaker 1: the union. So I think we're seeing, uh, you know,
Speaker 1: we're seeing some of that enter back in to politics
Speaker 1: and and I would bet it will feature in the
Speaker 1: next election in some way as well. Truce Raphael of
Speaker 1: course on Brexit. Truce what I do where I'm supposed
Speaker 1: to be read in As I look at Bloomberg News,
Speaker 1: the Brexit team, I look at your good work for
Speaker 1: Bloomberg Opinion. I look at the Telegraph at times, the
Speaker 1: Guardian UK even some of the other papers as well.
Speaker 1: I'm lost. Does Boris Johnson is this great calculation that
Speaker 1: the people of the United Kingdom are behind him? Is
Speaker 1: that what this calculations about Yeah. I mean that, first
Speaker 1: of all, I should say that we're all lost, even
Speaker 1: those of us who are following it twenty four seven.
Speaker 1: But I think that's broadly right, that he is calculating
Speaker 1: that the people will stick with what they see as
Speaker 1: a strong man, somebody who's abiding by the principle and
Speaker 1: the result of the referendum, against what he's portraying as
Speaker 1: the establishment, which is Parliament and of course the European Union.
Speaker 1: That's his bet. That's how he's trying to uh you
Speaker 1: fight the ground of the next election on the basis
Speaker 1: of uh boris who's trying to deliver the referendum versus
Speaker 1: Parliament versus the EU. However, there are signs that it's backfiring,
Speaker 1: and I think this period in which Parliament is prorogued
Speaker 1: is going to be key because we see boys saying
Speaker 1: that he wants to deal um. He tried to use
Speaker 1: this period for one rounding it up. The vote was
Speaker 1: fifty two of forty eight percent Leave beating remain. If
Speaker 1: the margin, does the Prime Minister want to do fifty
Speaker 1: three or fifty four percent leave or is he hoping
Speaker 1: for something bigger than that? When all this works out
Speaker 1: towards a general election. Well, he does not want to
Speaker 1: replay that referendum, and I think the polls um suggests
Speaker 1: that that would be another closely fought referendum if it
Speaker 1: was Leave versus Remain. He's hoping to stitch together a
Speaker 1: new coalition for the Concervative Party which includes all of
Speaker 1: those lead voters who were for the Labor Party before. Uh.
Speaker 1: That's why he's also promising this huge raft of spending
Speaker 1: on public services, which is not a very you know,
Speaker 1: conservative thing to do, not something we normally see from
Speaker 1: the Conservative Party. So he's hoping that will be his
Speaker 1: new majority. Truce Raphael with his Bloomberg opinion. One day, Therese,
Speaker 1: this is a number of months ago John Farrow and I. Folks.
Speaker 1: You know, usually John and I are like, we're not
Speaker 1: on speaking terms. This is one of those windows were
Speaker 1: reaction in speaking terms. And so John goes, let's go
Speaker 1: to breakfast, and I want to go to the McDonald's
Speaker 1: over in Third Avenue, and of course, Therese he picks
Speaker 1: some hoity toity place on Park Avenue. We walk in
Speaker 1: and there's Nigel Farage sitting at the bar, you know,
Speaker 1: having a morning bloody Mary or whatever Mr Farage was doing.
Speaker 1: I mean, I mean, does Boris Johnson need Nigel Ferrage
Speaker 1: and the arch Leavers or can he do this with
Speaker 1: disaffected labor people alone? Now he wants Farage's voters, but
Speaker 1: he doesn't want uh White Farage and wild like he's
Speaker 1: a We talk to him. He's a nice guy. You know,
Speaker 1: he knew what you know. Why does he not want Nigel, Well,
Speaker 1: he doesn't want he Ultimately he wants he wants the
Speaker 1: Conservative Party to be the Conservative Party. He doesn't want
Speaker 1: it to be a coalition of Conservative Party and Brexit Party.
Speaker 1: He'd like to bring Ferrage. I suspect for Age is
Speaker 1: entourage Farrage's party back inside the Conservative Party somehow. I
Speaker 1: don't think he wants a situation where Frage is capable
Speaker 1: of cannibalizing the Conservative Party vote and which Johnson is
Speaker 1: forced to do a deal with the Brexit Party to
Speaker 1: cobble together a coalition in Parliament. He wants parts of
Speaker 1: the Labor Party vote, especially in the North of England,
Speaker 1: the Labor Leave voters. He wants those Brexit Party voters,
Speaker 1: but he wants them all to be inside the tent
Speaker 1: of the Conservative Party. But it's very hard Tom right
Speaker 1: now to say what does the Conservative Party stand for.
Speaker 1: It's very different from the Party of Margaret Thatcher. What
Speaker 1: do you look for seriously in the next I mean,
Speaker 1: it is a constitutional crisis in a nation without a
Speaker 1: written kind institution. Do you look for a nod from
Speaker 1: Buckingham Palace? I mean, what does an arch watcher like
Speaker 1: you look for just in the next twenty four hours. Well,
Speaker 1: I I'm actually in the next twenty four hours, I
Speaker 1: don't think we're going to see, you know, a massive
Speaker 1: shift over the next four weeks. I would look to
Speaker 1: see whether he is willing to do a deal that
Speaker 1: goes back to the EU's original plan of a Northern
Speaker 1: Ireland or of sort of all Ireland UM agreement, so
Speaker 1: that Northern Ireland stays with Ireland and the EU. This
Speaker 1: is what the EU originally wanted. Remember Theresa May said no,
Speaker 1: it must include all of the UK, and that's how
Speaker 1: we ended up with the Irish backstop. I think if
Speaker 1: we see Boris Johnson heading more toward the direction of
Speaker 1: the original EU plan, then we're back into deal territory.
Speaker 1: But he will lose his hard line Brexitter to lose
Speaker 1: Nigel Farrage and his followers, and then he'll need the
Speaker 1: labor MPs from the voting constituencies. That's what I'd be
Speaker 1: looking at over the next few weeks. Over the next
Speaker 1: twenty four hours, I think we've seen things go a
Speaker 1: little bit quiet. For the next you're you're stuck at
Speaker 1: terminal five, you're going nowhere. I recommend the fort Nhum
Speaker 1: and Mason bar there on the first floor where you
Speaker 1: can sit and that's not like a bar, folks with alcohol.
Speaker 1: You can sit there and have forty seven cheeses from
Speaker 1: Scotland or whatever it is. I'd recommend it from terminal
Speaker 1: five and he throw Terse Rafael writing up on British
Speaker 1: Air and also this small political matter in London called
Speaker 1: Brexit as well for Bloomberg Opinion really really must read
Speaker 1: as well. Thanks for listening to the Bloomberg Surveillance podcast.
Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or
Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom
Speaker 1: Keane before the podcast. You can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio