Speaker 1: Ye. Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene
Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
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Speaker 1: the equity market in the United States, we are still
Speaker 1: within one percent of an all time high. Will the
Speaker 1: equity market find continued support from the fundamentals, both the
Speaker 1: earnings and the data. I'm pleased to say here in
Speaker 1: New York, Monamaha, John joins US now Alliance is Global Investors,
Speaker 1: US investment strategist. Good morning to Mona. Good morning John.
Speaker 1: So let's explore that question, shall we, and try and
Speaker 1: answer it. Will we find support from the fundamentals? Yeah,
Speaker 1: you know, I think the market, you know, year to
Speaker 1: date up about from the December low up now, so
Speaker 1: really uh to to get a next leg higher, we're
Speaker 1: gonna have to see a really impressive set of fundamentals.
Speaker 1: What we're looking at and where we're seeing signs of
Speaker 1: optimism is probably more towards the second half of the year,
Speaker 1: when not only China potentially rebounds um not only where
Speaker 1: we might get some European stabilization and the US earning
Speaker 1: story unfold. But some of the geopolitical tensions that we've
Speaker 1: talked about um US China trade, maybe even something around
Speaker 1: Brexit starts to clear up as well. So I think
Speaker 1: in order to get another leg higher here, one we'd
Speaker 1: be hopeful for some sort of consolidation. I think that
Speaker 1: would be healthy. Uh. And then two, we'd really need
Speaker 1: to see the global picture improve, the global the global
Speaker 1: picture improve. But the fact is it's been a stunning rally.
Speaker 1: J and J earnings just came out. I guess they
Speaker 1: were midpoint John, you know, not much to talk about there.
Speaker 1: They delivered boring average goods. Fine, great, Great. Are you,
Speaker 1: as a strategist going to micro analyze every earnings report
Speaker 1: the revenue and margin dynamics? You know? I think generally
Speaker 1: the earnings picture here in the US, where we were
Speaker 1: in the last quarter, revisions were moving downward, downward, downward.
Speaker 1: Now we are starting to see some basing in that,
Speaker 1: and we're seeing Q one earnings, which started in earnest
Speaker 1: last Friday, really beating expectations here. So Q one expectations
Speaker 1: are negative four percent, probably going to get closer to
Speaker 1: It's an expectation function. And as Pharaoh knows, it's out
Speaker 1: six months up twelve months. What's the earnings view out
Speaker 1: six months or twelve months. It's going to drive John's
Speaker 1: two oh one k back to excellence. Yeah, you know,
Speaker 1: I think in the US we're looking at four to
Speaker 1: six percent earnings growth this year. And it's interesting when
Speaker 1: you run the analysis different earnings environments, the type of
Speaker 1: S and P returns you can get. In this negative
Speaker 1: tent positive tent earnings growth environment, you actually get high
Speaker 1: single digits mid team returns. It's only when you're negative
Speaker 1: negative earnings that you get this negative What just John
Speaker 1: is so important. You can have flat earnings and stocks
Speaker 1: go up and there's silence in the room. How can
Speaker 1: that be? But there it is. That's what the math says.
Speaker 1: You know where the sonets in the room right now
Speaker 1: is with the financials. Some of these names can report
Speaker 1: record quarterly earnings and we've done even sniff. We just
Speaker 1: sort of look away and it doesn't even matter. Bank
Speaker 1: for America coming out this morning with record quarterly earnings.
Speaker 1: The question still is, Okay, that's what we expect. Where's
Speaker 1: the growth and what am I willing to pay for
Speaker 1: these earnings. What's the answer to that. Yeah, you know,
Speaker 1: I think financials is a tough one because you have
Speaker 1: the flattening yield curve dynamic that's been going on from
Speaker 1: nearly five years now. Um, when you look at rates
Speaker 1: coming down, yields coming down actually supports many other sectors
Speaker 1: except the banks. Banks don't thrive necessarily in a flattening
Speaker 1: yield curve environment, and certainly when when yields are lower
Speaker 1: in some cases around the world, negative not great for
Speaker 1: banks here, and so I think that's the story behind
Speaker 1: why financials have lagged somewhat. I think now we may
Speaker 1: see a bit of catch up here, given that earnings
Speaker 1: are coming out ahead of expectations. But I think from
Speaker 1: a sector perspective, we see opportunities beyond financials, and in fact,
Speaker 1: you know, when we look at where you want to
Speaker 1: go for growth in a lower growth environment, we continue
Speaker 1: to see technology and discretionary in particular, where the U
Speaker 1: S consumer seems to be quite supported here. Uh. The
Speaker 1: other hand of our what we call our Barbell approach
Speaker 1: is really healthcare and staples. Those are sectors that have
Speaker 1: lagged this year but really are defensive. Do well in
Speaker 1: a slowing growth environment. To be clear here, though, you
Speaker 1: don't buy the bank bologument, the financial valuations are going
Speaker 1: to rewrite higher, you know, I think it'll be tough
Speaker 1: in an environment where yields are going lower potentially and
Speaker 1: the FED is off the table for two thousand nineteen,
Speaker 1: many are expecting their right next move to be a
Speaker 1: rate cut. So I think that's a tough environment for banks.
Speaker 1: I do buy the US consumer story, which I think
Speaker 1: it is a positive for banks. So let's talk about
Speaker 1: the regional till that you're looking. At the moment, there's
Speaker 1: a lot of people getting excited about the very small
Speaker 1: green shoots appearing in Europe, and slowly I can feel
Speaker 1: the bearish sentiment capitulating as the year progresses. Where do
Speaker 1: you stand on that, that whole Europe versus US debate
Speaker 1: that we've had for the last couple of years. Yeah,
Speaker 1: I know. It's interesting. We came into the year with
Speaker 1: another very clear barbell. On one hand of that barbell
Speaker 1: was the US best on the block from a developed
Speaker 1: market perspective. Other hand of that barbell was China and
Speaker 1: parts of em Now, China, you know, has performed phenomenally
Speaker 1: this year, UM markets up plus we're looking at Oh no,
Speaker 1: I'm just gonna say quickly on the European question, we
Speaker 1: are you know what John was alluding to. We're starting
Speaker 1: to kind of come around to as well. Europe may
Speaker 1: benefit if there is a resolution to trade. It's a
Speaker 1: great source of dividends potentially and clearly has lagged the
Speaker 1: markets and from evaluation perspective, starting to look somewhat interesting,
Speaker 1: but again very data dependent year to date. I mean
Speaker 1: Chinese stocks, this is in US dollars, John, they're up
Speaker 1: thirty one percent. It maybe they're up if you look
Speaker 1: at another is that a real stock market? I mean,
Speaker 1: does Alians actually say to people China to invest in
Speaker 1: China stocks? Is actually normal? Biddess dynamics, you know the
Speaker 1: they've opened up their a shares market that we think
Speaker 1: is a real story. UM will become a larger and
Speaker 1: larger part of the m c I index. We agree
Speaker 1: though a lot of the Chinese equity market retail driven,
Speaker 1: and so that can be more volatile than than the
Speaker 1: average market. Okay, Mona, thank you so much for coming
Speaker 1: and just lights from Alians. But today I like John
Speaker 1: what you're framing there between the europe US dynamic, which
Speaker 1: means almost a May June story. George Cassidy with this
Speaker 1: RBC Campital Markets. His research note is, you know, the
Speaker 1: occasional small bank, lots of regional work, and he doesn't
Speaker 1: look at the two big defails like Bank America gerod.
Speaker 1: If I could go to one slide in the Bank
Speaker 1: of America first presentation, the power point, I'm going to
Speaker 1: guess it's twenty pages. The digital build out page is
Speaker 1: just extraordinary. Are we underestimating the speed of digital growth
Speaker 1: within American banking? Tommy, you bring up a really good
Speaker 1: point because I was looking at that page as well
Speaker 1: this morning, and what took my breath away was the
Speaker 1: person to person payment. When I sent John Farrell money,
Speaker 1: you know I lose on Liverpool, I sent him in
Speaker 1: rather having to write him and check. And so that
Speaker 1: that growth has been very impressive. And I think you
Speaker 1: put your thumb on something here. As much as there
Speaker 1: was a threat from the you know, tech area of
Speaker 1: the financial tech companies two or three years ago, companies
Speaker 1: like Bank America, JP Morgan, even some of our big
Speaker 1: regionals are spending incredible amounts the money and are at
Speaker 1: the cutting edge. And Bank America's right there, as evidenced
Speaker 1: by slide five. I mean, Jared, compared to say, the
Speaker 1: rest of Europe, the United States well behind on this
Speaker 1: kind of initiative. That's still people in this country that
Speaker 1: regularly pay their rent with the check and the check
Speaker 1: book is something that many people in Europe don't have
Speaker 1: in their pocket anymore, Gerard. So I just wonder how
Speaker 1: much growth is left here. And it sounds like a law. John,
Speaker 1: You hear a great point. I'm always when I travel
Speaker 1: over to Europe, I'm always amazed at how much further
Speaker 1: along they are. And one thing I remind myself is
Speaker 1: that we have legacy systems in our banking industry, as
Speaker 1: you well know, and because we have fifty seven hundred
Speaker 1: banks still, you've got to convert all fifties seven hundred
Speaker 1: over to these new systems. It takes time, and as
Speaker 1: why Canada and Europe are well ahead of us in
Speaker 1: our banking technology. But to your point, there's a lot
Speaker 1: of growth coming from our banks in this area, So jareded,
Speaker 1: loads of growth coming. We've got to talk about a
Speaker 1: complete bank. Just how much this moves the overall dial?
Speaker 1: Does they shifted? It's all I think over time it
Speaker 1: does because as you know, there will be a less
Speaker 1: of a need for branches, and branches is probably where
Speaker 1: the branch delivery channel is one of the most expensive
Speaker 1: parts of a retail bank. And because of this technology,
Speaker 1: we just won't need as many branches over the next
Speaker 1: ten years, and those branches will transport themselves more into
Speaker 1: sales centers and doing everyday transactions. What is the job
Speaker 1: dynamic when all these people say we need expense control? Right?
Speaker 1: Is Gerardcassity looking at any given big bank. Let's say,
Speaker 1: if a round number a hundred and fifty employees, is
Speaker 1: it a hundred year a hundred there? Is it divisions
Speaker 1: where they're going to take out five or ten thousand
Speaker 1: or are we missing the point? It could be something bigger.
Speaker 1: I think it's a hundred here and a hundred there,
Speaker 1: because you might remember tom coming out of the financial crisis,
Speaker 1: the banks had thousands of employees working on bad credit,
Speaker 1: and as you know, credit quality today is very strong,
Speaker 1: and so those people were either let go or moved
Speaker 1: into other areas. So I think what you'll see it
Speaker 1: won't be entire divisions. Technology I think will complement the
Speaker 1: human element of it. But it will change, no doubt
Speaker 1: about it, over the next ten years. Let's get the
Speaker 1: earning school counts now. He was a really rough session
Speaker 1: for Goldman yesterday. The stock was down three point eight percent.
Speaker 1: Sock GM coming out cutting the price target for Goldman
Speaker 1: to a street love once seventy. We closed yesterday just
Speaker 1: south of two hundred. What's the story there? I think
Speaker 1: a big loser of this quarterly earning season so far.
Speaker 1: I would say that because they're so concentrated in the
Speaker 1: capital markets. We all know from all the big banks,
Speaker 1: trading revenues were down year of a year, whether it
Speaker 1: was an equity or fick. But because they don't have
Speaker 1: the diversity of revenues of JP Morgan, Bank America and
Speaker 1: City Group, their results were more concentrated in capital markets.
Speaker 1: And even those diversified revenue companies like a Bank America today,
Speaker 1: their revenues were acted by the market. So I think
Speaker 1: you're right Goldman was affected more because they're more concentrated
Speaker 1: in that business. Jeri Cassie, if you didn't know the name,
Speaker 1: I'm glad. John brought up Golden Sacks ten year track
Speaker 1: record with dividend five point four nine percent a year
Speaker 1: in any other industry. That's just totally unacceptable. What's the
Speaker 1: magic of Goldman Sacks at five point four per year?
Speaker 1: I think it still has amongst the trading community, in
Speaker 1: particular the hedge funds. UM. They still have an attraction.
Speaker 1: People know that they can trade. This name is very liquid,
Speaker 1: it's volatile because of the capital markets. It's not a
Speaker 1: boring bank to say say the least. So I think
Speaker 1: that's the attraction rather than a long term you know
Speaker 1: investor who wants to buy and hold here's your valuable
Speaker 1: drug cassidy, thank you so much. After Bank of American
Speaker 1: and RBC cap, let's bring in bloom Bag intelligence, maybe
Speaker 1: analyst either Rack and Athan on Netflix armies which come
Speaker 1: after the closing about Gaithera subscriptions. What would they look like? Yes, yes,
Speaker 1: it is always a story, um a subscriber story, and
Speaker 1: as always the focus will be on some sub numbers.
Speaker 1: Management has guided to about eight point nine million new
Speaker 1: additions for this quarter, about one point six million in
Speaker 1: the U S and the rest international. But I think
Speaker 1: the bigger question John this quarter is really going to
Speaker 1: be the two que guide, uh that there really two concerns.
Speaker 1: I think that the market is looking at one, is
Speaker 1: the rising competition, especially with a very aggressive price point
Speaker 1: coming in from the Disney Plus service. Uh and then
Speaker 1: a thirteen to eighteen percent price hike that is actually
Speaker 1: taking effect for domestic subscribers in two que So gather
Speaker 1: how difficult historically is it to get any kind of
Speaker 1: clarity of what's about to happen in the future where
Speaker 1: Netflix adjust priced. We have pretty noisy quarters. Um, yeah,
Speaker 1: it is. There has been some volatility in the past,
Speaker 1: but actually the last time that they instituted a price increase,
Speaker 1: we did not see a whole lot of turn So
Speaker 1: kind of just showing how with the breadth, the quality
Speaker 1: and the quantity of their content um users are willing
Speaker 1: to digest even substantial price hikes. Netflix is Netflix, But
Speaker 1: it's also to me a mystery. We sort of vastly
Speaker 1: understand the sweat at Disney, the sweat at the old
Speaker 1: Time Warner, etcetera, and HBO management change. How is Netflix
Speaker 1: management responding to everybody wanting to be part of their
Speaker 1: streaming world? So Netflix has I mean they've they've been
Speaker 1: asked this question quartering and quarter out, and they've always
Speaker 1: kind of downplayed the competitive threat. I mean at the
Speaker 1: end of the day, Tom, Netflix offers consumers and a
Speaker 1: very compelling entertainment experience at a relatively low cost, without
Speaker 1: commercials and on any device. And if you look at
Speaker 1: the global market and the secular shift to streaming, they're
Speaker 1: relatively underpenetrated. And that's something that you know, Netflix management
Speaker 1: drives home, quadring and quarter out. Okay, so let's talk
Speaker 1: about this sentulist shift to streaming. Let's talk about what
Speaker 1: is ultimately driving it. I can tell you from my
Speaker 1: own personal perspective, what drove me to cut the cord
Speaker 1: was because it costs less just to buy Hulu and
Speaker 1: to have all the channels on that. We're now going
Speaker 1: towards this world where I need Hulu, Disney plus Netflix,
Speaker 1: HBO am I just going back to the cost of
Speaker 1: cable again. Yeah, I mean, you know that is kind
Speaker 1: of becoming an existential question. But I think what's going
Speaker 1: to happen, especially with the new Disney services, it might
Speaker 1: actually end up accelerating cord cutting a little bit. At
Speaker 1: the end of the day. I mean, there are there's
Speaker 1: a whole plethora of services out there, but once the
Speaker 1: dust settles, stay in the next two to three years, time.
Speaker 1: I think what we're going to see is they're going
Speaker 1: to be winners and losers. But I see both both
Speaker 1: Netflix and Disney emerging as winners. What about the news side?
Speaker 1: You know all the YouTube TV is John mentioned Hulu
Speaker 1: and and and all those do they compete against each other?
Speaker 1: Are they essentially monopolistic activity? So what we've actually seen
Speaker 1: so those tom are what we refer to as the
Speaker 1: virtual m v P d s or they're basically live
Speaker 1: TV services over the internet. Um, they have those services
Speaker 1: have managed to rack up about eight million subscribers so far,
Speaker 1: which is which is a pretty substantial number. But we've
Speaker 1: also seen but they're they're essentially not making any money.
Speaker 1: Uh and at some point, and we've actually seen this,
Speaker 1: direct TV now and some of the other services have
Speaker 1: been raising prices gradually and with that there has been
Speaker 1: some increased churn. So I'm not sure everything is hunky
Speaker 1: dory on you know, the school TV services front, Jennifer.
Speaker 1: I think what she just said there's absolutely critical and
Speaker 1: and and that we're not sure it's all new territory. Yeah,
Speaker 1: just that simple. I mean, how many soccer games are
Speaker 1: you watching a weekend? John? Two or three? Oh? You lie,
Speaker 1: you're watching five six three Max. Okay, I mean sports
Speaker 1: get very quickly her. Sports is still a big draw
Speaker 1: with YouTube TV right. Sports is absolutely a big drawing
Speaker 1: And and um, you know that was the whole bed
Speaker 1: that Fox made when they kind of sold their entertainment
Speaker 1: assets but kept sports and kept news writes to catch
Speaker 1: you with your great update, gething Rock and A and
Speaker 1: then Bloomberg Intelligence media analysts. We can't be down to
Speaker 1: Netflix earnings coming after the closing Bolt MATCHI Zeddi with
Speaker 1: US Chief Fields Economists doing your bank. And the joy
Speaker 1: of his research report is it is beyond loaded, not
Speaker 1: only with charts but with intelligence charts. It's like a
Speaker 1: it's like a you know, three hour interview happening right now. Um, John,
Speaker 1: I want to go to something pretty obscure mental lozette
Speaker 1: to begin with. You really slice and dice inventory dynamics
Speaker 1: and business investment. Exactly where are the inventories of American
Speaker 1: business right now? Yeah, you're you're absolutely right. I think
Speaker 1: it's really important for the near term growth outlook, UM,
Speaker 1: on some measures inventories. You know that we've had a
Speaker 1: recently big inventory build in the back half of last year. Um,
Speaker 1: and some people I think have built in an inventory
Speaker 1: drag on growth in the first half of this year.
Speaker 1: When we look at it, it doesn't look like it's
Speaker 1: something that should significantly way on production. Instead, it looks
Speaker 1: to us like you had a big import increase ahead
Speaker 1: of people that were expecting tariffs UM and that that
Speaker 1: really has not built into manufacturing inventories. And if you
Speaker 1: look at the I s M, when manufacturing firms don't
Speaker 1: think that their inventories are too high at this point.
Speaker 1: So we do not see a big inventory drag coming
Speaker 1: in the coming quotas from from the US. And as
Speaker 1: a result of that, I think we're a bit above
Speaker 1: consensus on on US growth. We we expect two point
Speaker 1: three percent growth this year. We're consensus is probably a
Speaker 1: little bit closer to two looking at this year in
Speaker 1: our survey, we've got it about two point four for
Speaker 1: the median estimate going into next year. Is when a
Speaker 1: lot of people see the deceleration. Matt one point nine
Speaker 1: percent the median estimate there, what's we have some something
Speaker 1: very similar to that. I think you know, most people
Speaker 1: are looking out to they're expecting a modest fiscal drag
Speaker 1: versus the positive fiscal impulse you had this year, there's
Speaker 1: some delay in the tightenings from the said which can
Speaker 1: take about eighteen months to work its way through the system,
Speaker 1: and so we have one nine percent growth again next year.
Speaker 1: I think more maybe more interestingly as you go out
Speaker 1: to one, which is a very long time from now.
Speaker 1: But I think a lot of people expect a continued
Speaker 1: deceleration in the US and global economy. We actually have
Speaker 1: to pick up. And I think the reason is with
Speaker 1: the Fed on hold, with them not getting to restrictive stance,
Speaker 1: and with the fiscal not being either a strong either
Speaker 1: driver or a a drag. There's really no good reason, I
Speaker 1: don't think for the economy to deviate materially from two.
Speaker 1: You buried the punchline. Did I hear you say next
Speaker 1: year one point nine? We do. Yeah, if you add
Speaker 1: on any kind of Peter Hooper Deutsche Bank inflation calculation,
Speaker 1: you're talking about a sub four percent nominal GDP. Right,
Speaker 1: that's correct? Is now? You studied this at u c
Speaker 1: l A. You wanted they got a library out at
Speaker 1: U c l A. Folks like Game of Thrones. You
Speaker 1: went into the library U c l A. Is there
Speaker 1: any politician in the history of mankind that can deal
Speaker 1: with a four percent or less nominal g d P,
Speaker 1: don't they By definition they have to always revert to
Speaker 1: fiscal expanse. Yeah, I think you know, there is a
Speaker 1: new normal in terms of thinking about growth, both on
Speaker 1: the real and the nominal side. Um Whereas historically potential
Speaker 1: growth was three above, we now take a potential growth
Speaker 1: in real terms closer to two percent. And so along
Speaker 1: with that two percent real growth, you actually have pretty
Speaker 1: good labor market conditions. You have wage growth continue to
Speaker 1: pick up. We have the unemployment rate falling to three
Speaker 1: point six percent, which would be the lowest level in decades.
Speaker 1: And so all that from a you know, a voter perspective,
Speaker 1: from consumers perspective, actually think looks a lot better than
Speaker 1: you would expect given two real four percent nominal done.
Speaker 1: What Mr Lozettie just said there, I have never framed
Speaker 1: on the American economy. It's just absolutely original. Where we
Speaker 1: are given a suburb GDP shouldn't surprise you. Two percent
Speaker 1: real GDP is is basically potential in the minds of
Speaker 1: many for the US economy. This shouldn't come as a shock.
Speaker 1: It was unthinkable in my how do they have that
Speaker 1: run rate. It is a brand new world out there,
Speaker 1: but this is the new normal, absolutely it is. You know,
Speaker 1: we I think we're a little bit more optimistic on
Speaker 1: getting productivity a bit higher. There is this tendency as
Speaker 1: the labor market tens, as wage growth picks up and
Speaker 1: incentivizes businesses to do capex, and productivity move higher. Uh
Speaker 1: so we see potential a little bit above two. But
Speaker 1: we're absolutely right. The new normal is that potential growth
Speaker 1: is much lower than it's been historically. The FED fund
Speaker 1: rate is much lower than it's been historically. We think
Speaker 1: the FED is not at this point um and so
Speaker 1: for per markets, it's it's a new normal and thinking
Speaker 1: about how far the fact how much volatility you're gonna have.
Speaker 1: So just finally and quickly your assumption here, the base
Speaker 1: case for the trajectory for the US economy is based
Speaker 1: on a FED that goes nowhere, no heights next two years.
Speaker 1: It is, it is, And I think there's two countervailing
Speaker 1: forces here on on growth. We we're still pretty optimistic
Speaker 1: the labor market tight and wage growth picks up. On
Speaker 1: price inflation, on the other hand, we don't see that
Speaker 1: that moving to really higher, and in the context of
Speaker 1: the said reviewing their two percent inflation target, perhaps wanting
Speaker 1: to get inflation a bit higher if they moved to
Speaker 1: an average inflation targeting regime. We don't see them tightening
Speaker 1: as a result of that. This is wonderful path that
Speaker 1: was Zetti, thank you so much with Deutsche Bank. The
Speaker 1: mood in Paris this morning after what we would yesterday
Speaker 1: simply somber in the aftermath of the great fire that
Speaker 1: ripped through the cathedral of Notre Dame. The iconic structure
Speaker 1: took more than two hundred years to build. In just
Speaker 1: a few hours, that roof from back to medieval times
Speaker 1: it is gone, of course, the history extraordinary, from the
Speaker 1: liberation of Paris of the Nazis to the modern day.
Speaker 1: As well. French authorities they assess the damage and craft
Speaker 1: plans to rebuild the monument. Here is our Bob Moon.
Speaker 1: If there was any good news to report, His firefighters
Speaker 1: finally got control of the flames late into the night.
Speaker 1: It was word that they were able to save the
Speaker 1: two rectangular bell towers at the front of the twelfth
Speaker 1: century building, although it will undoubtedly be years before those
Speaker 1: bells are hurt again. It was considered the gem of
Speaker 1: French Gothic architecture, painstakingly constructed by hand, its cornerstone laid
Speaker 1: in eleven sixty three, and in the more than eight
Speaker 1: hundred fifty years since it had survived numerous challenges, ransacked, desecrated,
Speaker 1: and when it fell into serious disrepair, nearly the victim
Speaker 1: of calls to tear it down. It came through two
Speaker 1: World wars and through the will of the people. Notre
Speaker 1: Dame Cathedral has always managed to rise again. A dressing
Speaker 1: his shock nation last night, President Emmanuel mccron declared as
Speaker 1: her through a translator, we will rebuild this cathedral. The
Speaker 1: place we have it is the epicenter of our life.
Speaker 1: That was no overstatement. For centuries, all streets in Paris,
Speaker 1: all roads in France for that matter, led there. But
Speaker 1: during the French Revolution it was viewed as a symbol
Speaker 1: of oppression and fell victim to numerous acts of vandalism.
Speaker 1: People took swipes at it with axes and hammers, beheading
Speaker 1: many statues. It was there that Napoleon chose to be
Speaker 1: crowned emperor in eighteen o four, but by then the
Speaker 1: long neglected building on an island in the middle of
Speaker 1: the river Sende was plagued by a lead roof full
Speaker 1: of leaks. An architect, determined to say the dilapidated building,
Speaker 1: enlisted the help of a friend, writer Victor Hugo. His
Speaker 1: resulting novel, Notre Dame de Paris or Our Lady of Paris,
Speaker 1: was later republished in English as The Hunchback of Notre Dame.
Speaker 1: The book helps spark a movement for its restoration thanks
Speaker 1: to his rapturous descriptions of the architectural treasure has reflected
Speaker 1: in the nineteen thirty nine movie version of his classic story.
Speaker 1: In every city the stand cathedrals like this one, triumphal
Speaker 1: monuments of the past. They tower over the homes about
Speaker 1: people like mighty guardians, keeping alive the invincible faith of
Speaker 1: the Christian. Every art, every column, every statue is a
Speaker 1: carved leaf out of our history, a book in stone,
Speaker 1: glorifying the spirit of French. Hugo himself summed up its
Speaker 1: beauty with just three words, symphony in Stone. He helped
Speaker 1: make it one of the most popular tourist destinations in
Speaker 1: the world, with more visitors even than the Eiffel Tower.
Speaker 1: As Bloomberg News Paris reporter Greg Vescuzzi noted the most
Speaker 1: visited monuments in Paris, it's about, you know, fifty people
Speaker 1: a day can visit it. It's a terrible cultural loss.
Speaker 1: Perhaps it was the splendorous architecture that drew so many,
Speaker 1: or the trove of fine art and religious relic inside,
Speaker 1: among them the crown of Thorns, believed by Catholics to
Speaker 1: have been worn by Jesus Christ himself before his crucifixion.
Speaker 1: The Mayor of Paris had in a tweet that it
Speaker 1: and other relics had been saved, something in which New
Speaker 1: York Cardinal Timothy Dolan found special significance to see that
Speaker 1: reduced to ashes. Myle my, I remember our song from
Speaker 1: the ashes, we rise up. We want to rise up
Speaker 1: with Jesus at Easter, and I believe that there will
Speaker 1: be surrising from this dying. Much of the building's attraction,
Speaker 1: no doubt, was fascination with the heart tugging subject of
Speaker 1: Hugo's fictional story, shunned for his deformed appearance and death
Speaker 1: from his years of ringing the cathedral's bells. Kasimodo, big here,
Speaker 1: she made me dead. I can hear I've been lately.
Speaker 1: The ringing had been limited to a single bell and
Speaker 1: only on special occasions because of more than thirteen tons,
Speaker 1: that was concerned it could shake the tower more than
Speaker 1: it could withstand. A six point eight million dollar renovation
Speaker 1: project had been underway for the past couple of years,
Speaker 1: and much speculation has focused on that as a possible
Speaker 1: cause of the fire. Now, in many ways, they will
Speaker 1: be starting again from the ground up. Restoration expert Copoli
Speaker 1: Crouche is an associate dean at Indiana's University of Notre
Speaker 1: Dame and says it will take years to even start rebuilding.
Speaker 1: There has to be a complete understanding of the construction
Speaker 1: reconstruction of this building, which may take at least a
Speaker 1: period of five years. But again, the will of the
Speaker 1: people seems clear. People who see their lives reflected in
Speaker 1: a building. Journalism students Celia Hedeberg notes, they are drawn
Speaker 1: to it. Still. People have been standing here for hours
Speaker 1: now taking pictures. Earlier um a group of Catholic people
Speaker 1: gathered and started singing different songs. In passing. People are
Speaker 1: making half hearted jokes about how silly it is to
Speaker 1: be crying for a building, But to be honest, that's
Speaker 1: the case for a lot of people here. That's the
Speaker 1: case for so many people around the world. I'm Bob
Speaker 1: Moon Bloomberg Radio. 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.