WEBVTT - Draft Episode for May 24, 2021 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 0:00:09.240 --> 0:00:13.200 with Jonathan Ferrell and Lisa Brownwitz. Daily we bring you 0:00:13.320 --> 0:00:18.600 insight from the best and economics, finance, investment, and international relations. 0:00:18.960 --> 0:00:23.840 Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com, 0:00:23.920 --> 0:00:30.360 and of course on the Bloomberg terminal. We start strong 0:00:30.480 --> 0:00:33.680 with Carl Built. He's a former Prime Minister Sweden for 0:00:33.720 --> 0:00:37.440 an extended time uh their Minister of Foreign Affairs, but 0:00:37.600 --> 0:00:41.280 far more than that, he has applied his public life 0:00:41.640 --> 0:00:45.640 to the fractured continent, moving from Athens up to Vilnius. 0:00:45.720 --> 0:00:48.519 His work in Kosovo, his work and all of the 0:00:48.560 --> 0:00:51.960 Balkan states as well is noted. He has European Council 0:00:52.040 --> 0:00:55.040 on Foreign Relations coach here. Prime Minister, thank you so 0:00:55.160 --> 0:00:58.560 much for joining us today. There has to be a 0:00:58.640 --> 0:01:04.880 response less with the original assertive Belarus and far more 0:01:05.040 --> 0:01:09.679 from Moscow. What can Europe and European political leaders ask 0:01:09.760 --> 0:01:14.679 of Mr Putin this morning? Well, have you are entirely right? 0:01:14.680 --> 0:01:16.360 There has to be there has to be a very 0:01:16.400 --> 0:01:19.720 firm on So this is a pirish, is a banditry 0:01:20.240 --> 0:01:24.080 in air space and if this is tolerated by Lukashenko. 0:01:24.280 --> 0:01:26.960 It could happen everywhere in the world. So it's a 0:01:26.959 --> 0:01:30.959 threat to global as to the safety and security of 0:01:30.959 --> 0:01:33.959 global aspace everywhere, So firm action has to be taken. 0:01:34.000 --> 0:01:36.480 What can be done well, I mean your PIE leaders 0:01:36.480 --> 0:01:39.559 are meeting this uh, this evening in Bruscess for plan 0:01:39.680 --> 0:01:43.200 for other issues. Needless to say, I think they should 0:01:43.760 --> 0:01:48.320 declare bellarous a space unsafe. One should not fly through 0:01:48.400 --> 0:01:52.280 bellarous space because you might be subject to hijacking or 0:01:52.400 --> 0:01:55.840 god knows what this man is capable of doing, and 0:01:55.960 --> 0:01:58.760 then of course being it up in the relevanted national bodies. 0:01:59.080 --> 0:02:04.240 I k probably see what can be done within that context. 0:02:04.560 --> 0:02:07.720 That might also be a case for wider economic and 0:02:07.760 --> 0:02:12.840 financial sncious against belar Rush if he doesn't follow the 0:02:12.919 --> 0:02:18.600 international rection. Um Russia um, I mean Russia would be 0:02:18.680 --> 0:02:22.959 supporting of Belarush in this particular action. I don't think 0:02:22.960 --> 0:02:26.760 that particular think is nice, but they would be supporting Belarus. Yes, 0:02:27.280 --> 0:02:29.679 Carl Bill, you wrote an essay for foreign affairs. I 0:02:29.760 --> 0:02:32.160 want to play off of it years ago and that 0:02:32.320 --> 0:02:37.200 this event will reveal Belarus. This event will review Russia 0:02:37.760 --> 0:02:40.880 as they treat the Baltic States. We forget these distances. 0:02:40.919 --> 0:02:44.840 A hundred and sixteen miles from Minx to Vilnias, it's 0:02:44.880 --> 0:02:48.640 an hour and thirty minute flight to Stockholm. Describe the 0:02:48.840 --> 0:02:53.400 closenesses here of the tension, the geography of the tension, 0:02:53.600 --> 0:02:58.560 along with what this will reveal about these two states. Now, 0:02:58.639 --> 0:03:02.600 it's very true, men's convenience are very close and has 0:03:02.600 --> 0:03:05.040 a bad The fact, if if you look at the statistics, 0:03:05.320 --> 0:03:08.480 Belarus is the country in all of the world where 0:03:08.520 --> 0:03:12.480 you have the highest numbers of sharing in Lisa's relationship 0:03:12.960 --> 0:03:16.959 ship to the population. Because Belarius people are normally opinions. 0:03:17.400 --> 0:03:20.720 They like to go to shopping in Warsaw or Venus 0:03:20.880 --> 0:03:25.239 or whatever. But they got this tug. Uh. Look Asenko, 0:03:25.320 --> 0:03:27.440 who has been there forever since the fall of the 0:03:27.440 --> 0:03:30.560 Soviet Union, and he has been able to consolidate and 0:03:30.639 --> 0:03:34.040 authority and receive The economy is a sort of Soviet 0:03:34.480 --> 0:03:36.720 memborium more or less. I mean, it's depended upon a 0:03:36.720 --> 0:03:41.440 couple of huge state owned enterprises. The economy is miserable, 0:03:41.960 --> 0:03:44.520 all sorts of deficits. The Russians have debated them out 0:03:44.520 --> 0:03:47.360 now and then and and and and of course he 0:03:47.680 --> 0:03:53.000 completely manipulated an election. Uh nowst autumn, and since then 0:03:53.520 --> 0:03:57.160 he's been trying to preserve his power by very severe 0:03:57.240 --> 0:04:01.520 repression against a very decent be nation which, as you said, 0:04:01.760 --> 0:04:04.480 is close to us. I mean means is much closer 0:04:04.520 --> 0:04:08.320 to Stockholm, them, Brussels or London is um. So it's 0:04:08.320 --> 0:04:10.880 not it's not a far away country of weakly know nothing. 0:04:11.080 --> 0:04:15.000 It's nearby, and it concerns us. This is the political dilemma, 0:04:15.000 --> 0:04:16.839 isn't it. How do you punish howing your sanction the 0:04:16.880 --> 0:04:19.760 government without isolating the people? How do you do that? 0:04:19.800 --> 0:04:23.080 What kind of decisions do you make? Yeah, and the 0:04:23.160 --> 0:04:25.599 dilemma has also been another one if you look put 0:04:25.720 --> 0:04:28.360 back on the discussions over the years, if we sanction 0:04:28.440 --> 0:04:31.200 heavily in the Bellarous economy as a risk of the 0:04:31.240 --> 0:04:35.320 Russians picking up the entire thing, because Russia Moscow has 0:04:35.360 --> 0:04:38.960 been keen on integrating Bellarious even more closely than is 0:04:39.120 --> 0:04:42.719 the case, and it's in taking over this particular Bellarrus enterprise. 0:04:43.160 --> 0:04:46.400 So that that's been the considerations over for in this 0:04:46.480 --> 0:04:52.719 particular case. So there's a downside, two different sanctions. But 0:04:52.839 --> 0:04:54.840 I think in this particular case what is done is 0:04:55.000 --> 0:04:59.960 outrageous that the downside of doing nothing is far great 0:05:00.240 --> 0:05:04.920 than the downside that is there of these particular sanctions. Unfortunately, 0:05:05.040 --> 0:05:07.000 but that's the case. Do you think that europe Is 0:05:07.120 --> 0:05:11.520 United on had to respond to this too early to tell? 0:05:11.760 --> 0:05:15.800 I mean this happened literally hours ago, um, and I 0:05:16.160 --> 0:05:18.720 think prime ministers and presidents preparing to go to Brousses 0:05:18.760 --> 0:05:22.880 are still sort of discussing exactly what to do. But 0:05:23.200 --> 0:05:28.400 if I see what primarily in Lithuania's most directly effective 0:05:28.880 --> 0:05:32.200 or demanding. They are demanding the closing bears a space 0:05:32.240 --> 0:05:35.680 for EU flights. They are demanding the closure of the 0:05:35.800 --> 0:05:39.560 U S space for the Belar State airline. I think 0:05:39.720 --> 0:05:42.400 the Polish Prime Minister has said something along those lines. 0:05:42.440 --> 0:05:44.680 There's a sort of fairly stormy language coming out of 0:05:44.720 --> 0:05:48.400 brusss Or, but no action as it yet. UM Tony 0:05:48.400 --> 0:05:51.679 Lincoln Washington has come out and said that the decision 0:05:51.720 --> 0:05:55.400 making bodies of the International Civil Aviation Organization must be 0:05:55.480 --> 0:05:59.640 called in. I think they's still discussing exactly what can 0:05:59.680 --> 0:06:02.480 be done. This is raw, the unique situation. There's no 0:06:02.520 --> 0:06:05.960 blueprint for how you do it, but I think there 0:06:06.080 --> 0:06:09.000 is m The Greek Prime minister has to be added 0:06:09.040 --> 0:06:12.400 somewhat greater distance in ureography, but the flight that was 0:06:12.480 --> 0:06:15.280 hidek was coming from methods. The big Prime Minister bid 0:06:15.320 --> 0:06:17.960 Zadakis has also been very strong in his language. So 0:06:18.160 --> 0:06:21.000 something will come out, Carl. In the meantime, the Kremlin 0:06:21.040 --> 0:06:24.599 has said that this has not disrupted President Vladimir Putin's 0:06:24.600 --> 0:06:27.280 plan to meet with President Biden of the United States 0:06:27.320 --> 0:06:30.120 at the summit next month. What would you hope the 0:06:30.200 --> 0:06:33.359 US response could be or would be to some of this? 0:06:33.480 --> 0:06:35.720 How much will the US Do you expect the US 0:06:35.760 --> 0:06:41.640 to be working in tandem with Europeans, as represented by yourself, Well, 0:06:42.040 --> 0:06:44.839 I'm quite certain that will be close coordination across the Atlantic. 0:06:44.880 --> 0:06:48.919 There have been sort of a statement by Secondave Lincoln. 0:06:49.600 --> 0:06:51.640 There was a very strong statement by the way coming 0:06:51.640 --> 0:06:55.120 out of Senator Mandetta Mendelia, who is sort of shairman 0:06:55.160 --> 0:06:57.640 of the Senate Foreign the first committing together with the 0:06:57.720 --> 0:07:01.080 Chairman of the Foreign A first committees of the German 0:07:01.120 --> 0:07:04.279 Parliament and the UK Parliament and a couple of other parliaments, 0:07:04.480 --> 0:07:06.400 and they were calling for strong measures, and they were 0:07:06.400 --> 0:07:11.120 calling for transatlantic coordination. I think that will happen. I 0:07:11.160 --> 0:07:14.680 think we'll see EU and the US working together in 0:07:14.760 --> 0:07:18.120 the UK, working together on this Carl who is the 0:07:18.160 --> 0:07:20.960 center of power when it comes to determining the response 0:07:21.080 --> 0:07:24.520 of Europe to Belarus as well as frankly to Russia, 0:07:24.560 --> 0:07:29.440 which seems to be supporting Belarius's actions. I think it's 0:07:29.440 --> 0:07:32.960 gonna be Brussels also because of the fact that sort 0:07:33.000 --> 0:07:37.000 of the mi coincidence, the Hendson state in government are 0:07:37.080 --> 0:07:42.000 meeting in Brussels tonight, this evening and tomorrow, so you'll 0:07:42.040 --> 0:07:44.800 have all of the decision making power of the EU 0:07:44.960 --> 0:07:49.840 at one spot h this evening and tomorrow, so that 0:07:49.840 --> 0:07:55.880 that I think will be decisive. And then obviously talking 0:07:55.920 --> 0:07:59.160 to London, obviously talking to Washington. I need to go 0:07:59.280 --> 0:08:03.160 back primary st to the linkage here of Moscow in Minx. 0:08:03.200 --> 0:08:06.960 I mean, obviously we're gonna treat bell Belarus separately. Here 0:08:07.040 --> 0:08:11.120 they'll be outrage and action as well. How does NATO, 0:08:11.480 --> 0:08:18.320 how does Brussels link Moscow into their actions? I think 0:08:18.400 --> 0:08:21.080 NATO will probably sort of stay on the sidelines. This 0:08:21.160 --> 0:08:24.520 is not a sort of a militage, and I don't 0:08:24.520 --> 0:08:27.280 think we would like it to become a militage either. 0:08:27.520 --> 0:08:31.880 Bye bye bye, by the way, but the world of 0:08:31.880 --> 0:08:34.000 Moscow is going to be important. I think it's important 0:08:34.040 --> 0:08:37.840 for process of Washington suthetically a message to Russia that 0:08:37.960 --> 0:08:42.200 we see this as an infringement and form international routs 0:08:42.280 --> 0:08:46.240 that are importance to Russia as well, and we would 0:08:46.240 --> 0:08:49.959 expect them to not necessarily support US. I don't think 0:08:49.960 --> 0:08:52.960 they will do that, but to stay stay calm. We're 0:08:53.040 --> 0:08:57.240 actually is taking can't we gotta leave it there. Fantastic 0:08:57.280 --> 0:08:58.800 to catch up with you and one the morning for it. 0:08:58.880 --> 0:09:01.760 A story that is as much Bizarres that is serious, 0:09:01.840 --> 0:09:05.280 very much. So count bail the European Council and Foreign Relations. 0:09:05.280 --> 0:09:12.760 Thank you, said Mike Daba joins us. Now, Mike, is 0:09:12.760 --> 0:09:16.600 that what you anticipate? I do. Um. So we're gonna 0:09:16.640 --> 0:09:20.760 get a GP revision this week. Um. And we've got 0:09:20.840 --> 0:09:24.760 nominal aggregate demand running in about ten percent annualized race. 0:09:25.400 --> 0:09:27.920 Uh in the forecast as we move into Q two 0:09:28.000 --> 0:09:32.120 is for that to continue. So that is not sustainable. 0:09:32.400 --> 0:09:35.360 It's okay for now because the economy is coming out 0:09:35.360 --> 0:09:38.440 of the deep hole. But the idea here is that 0:09:38.480 --> 0:09:40.400 the thatt is going to be behind the curve when 0:09:40.400 --> 0:09:43.440 they do start the type of the process. The intention 0:09:43.600 --> 0:09:47.600 is to wait until we're essentially fully recovered in inflation 0:09:47.679 --> 0:09:50.599 is somewhat above target before they even get going and 0:09:50.800 --> 0:09:54.760 going on monetary tighten and that's quite different from what 0:09:54.840 --> 0:09:57.760 happened the past. So the risk is that there is 0:09:57.800 --> 0:10:02.360 some overshoot of potential and that the inflationary pressures proved 0:10:02.360 --> 0:10:05.439 to be a bit more persistent, maybe than some officials 0:10:05.800 --> 0:10:08.360 are out there making them to be. I mean, Michael Darty, 0:10:08.400 --> 0:10:11.160 you're one of the leading proponents of watching nominal GDP. 0:10:11.360 --> 0:10:14.800 The behavior of nominal GDP itself, as you say in 0:10:14.840 --> 0:10:18.160 your note, that is the real economy with the overlay 0:10:18.200 --> 0:10:22.640 of inflation on top. If and when the Fed titans, 0:10:22.640 --> 0:10:29.080 what is affected first, inflation or the real economy? Well, tom, 0:10:29.400 --> 0:10:34.520 asset markets will be impacted first, and so we're watching 0:10:34.840 --> 0:10:39.040 a few variables in addition to the behavior of nominal GDP. 0:10:39.120 --> 0:10:41.840 It's it's a bit back backward looking with the statistics 0:10:41.880 --> 0:10:44.480 that we get, but we can watch the inflation break 0:10:44.520 --> 0:10:47.559 even market that's been in a very steady upward ascent. 0:10:47.720 --> 0:10:50.360 It's recently pulled back just a touch, but you know, 0:10:50.440 --> 0:10:53.720 if you look at the behavior of those inflation compensation 0:10:53.800 --> 0:10:57.560 spreads from March of last year, it's been an incredible 0:10:57.800 --> 0:11:02.040 the rebound, and we're watching the behavior of broad money 0:11:02.120 --> 0:11:06.160 growing very rapidly, much more rapidly than what we saw 0:11:06.360 --> 0:11:10.720 to the oh seven o nine crash. And so you know, 0:11:10.800 --> 0:11:13.800 those those two variables and how they start to react 0:11:13.880 --> 0:11:16.959 once the Fed gets closer to either a taper work 0:11:17.080 --> 0:11:19.640 you know, after that down the road rate heights will 0:11:19.679 --> 0:11:23.080 be quite important to the nominal GDP outlook in our opinion, Mike, 0:11:23.160 --> 0:11:24.880 in the notes that I was reading over the weekend, 0:11:24.920 --> 0:11:29.400 there's increasing skepticism, frankly over the inflationary theme that we 0:11:29.480 --> 0:11:32.200 keep hearing, and a part of its stems from efforts 0:11:32.280 --> 0:11:34.160 on the part of Chinese as well as others to 0:11:34.240 --> 0:11:38.040 crack down on commodity prices, and frankly in China in particular, 0:11:38.280 --> 0:11:40.600 to reduce the amount of credit in the system. How 0:11:40.600 --> 0:11:43.160 does that play into your feeling the idea that inflation 0:11:43.280 --> 0:11:47.160 is global and they're global inflation pressures to tamp down 0:11:47.440 --> 0:11:52.199 some of what we've seen that's generated these higher prices. Yeah, absolutely, Well, 0:11:52.320 --> 0:11:55.520 you know, China is using some blunt tools to you know, 0:11:55.600 --> 0:11:59.160 to try to address the commodity price inflation. China was 0:11:59.200 --> 0:12:01.920 also the first into the COVID shock and it's been 0:12:01.960 --> 0:12:04.959 the first out. And you know, we like to watch 0:12:05.000 --> 0:12:09.319 industrial metals just as a broad property for global industrial demand, 0:12:10.000 --> 0:12:12.840 and they've obviously been in a in a very steep 0:12:12.880 --> 0:12:16.480 ascent here. As long as the global economy continues to recover, 0:12:16.600 --> 0:12:19.720 and obviously we have Europe and certainly parts of Asia 0:12:19.880 --> 0:12:22.480 way behind where the US and China are with the 0:12:22.679 --> 0:12:25.240 with the virus and the recovery. But as long as 0:12:25.240 --> 0:12:29.160 there is a global upswing uh taking shapes and that 0:12:29.400 --> 0:12:32.200 you know, that should be helpful for the commodity price backdrop, 0:12:32.280 --> 0:12:35.520 but it has been exaggerated in these markets are subject 0:12:35.679 --> 0:12:40.200 volatility and corrections, though from an investing standpoint, probably a 0:12:40.240 --> 0:12:42.599 bit of a dangerous place to be right now, My 0:12:42.760 --> 0:12:45.599 just quickly, how useful is China's credit impulse? Is just 0:12:45.640 --> 0:12:47.480 a guide for the broader Malka used to tell you 0:12:47.520 --> 0:12:52.040 something about manufacturing about Matzo's. Does it anymore? You know, 0:12:52.080 --> 0:12:56.480 it's a great question. It's it's you know, we watch it, 0:12:56.559 --> 0:13:00.199 will watch everything. I'm not sure that it's the a 0:13:00.320 --> 0:13:03.840 perfect predictor of what's going to happen with commodity prices. 0:13:03.920 --> 0:13:07.640 Probably more more coincident if anything. Minds out of gonna 0:13:07.640 --> 0:13:10.199 catch up, joining us from m Campound as chief economist 0:13:10.480 --> 0:13:20.680 and market strategist on the lightst in this market. Monamah 0:13:20.840 --> 0:13:24.520 John joins us right now with Alians. She's US investment 0:13:24.559 --> 0:13:28.640 strategist Mona. It's it's rude that we've barely talked about 0:13:28.640 --> 0:13:32.720 the equity markets today. I look at futures up twenty two, 0:13:33.040 --> 0:13:35.719 futures up one thirty. We make a joke about melt up. 0:13:35.960 --> 0:13:39.240 Are we prepared in a boom economy for a melt up? 0:13:40.640 --> 0:13:42.320 You know, Look, we've already had a bit of a 0:13:42.360 --> 0:13:44.120 melt up in the first half of the year, so 0:13:44.160 --> 0:13:46.839 it's hard for us to think about SMPS up eleven 0:13:46.840 --> 0:13:49.240 percent year to date for that to really annualize for 0:13:49.280 --> 0:13:52.520 another eleven percent, So we don't necessarily see another melt 0:13:52.600 --> 0:13:54.360 up happening. You know, keep in mind, on a year 0:13:54.360 --> 0:13:58.640 to date basis, UH value sectors like energy, financials, you know, 0:13:58.720 --> 0:14:04.079 parts of the material sector, industrials all up thirty plus. 0:14:04.120 --> 0:14:07.440 So while exceeding the SMP return, where we've really seen 0:14:07.480 --> 0:14:12.280 the laggards have been that tech and consumer discretionary and interestingly, 0:14:12.320 --> 0:14:15.120 as the inflationary pressures started to rise over the last 0:14:15.120 --> 0:14:18.480 few weeks, we've seen healthcare and staples sectors that have 0:14:18.600 --> 0:14:21.680 had pricing power really come to the forefront as well. So, 0:14:22.040 --> 0:14:24.240 you know, I think every sector has had its day 0:14:24.240 --> 0:14:26.080 in the sun. Last year, it's been TechEd. This year, 0:14:26.080 --> 0:14:28.600 it's been the value sectors. Some of the more defensive 0:14:28.640 --> 0:14:31.920 sectors have risen in inflationary environment. So all sectors have 0:14:31.960 --> 0:14:35.080 done their part to keep this market steady this year. 0:14:35.120 --> 0:14:37.760 But as we look towards the next six and twelve months, 0:14:37.840 --> 0:14:40.880 or really pricing in an environment where maybe growth isn't 0:14:40.920 --> 0:14:44.600 as strong although above trend, maybe the FED is in play, 0:14:44.680 --> 0:14:47.120 and maybe there's a different tax regime. So I do 0:14:47.160 --> 0:14:49.320 think you have to be a little bit more selective, 0:14:49.360 --> 0:14:52.200 cautious active as we head towards the second half of 0:14:52.200 --> 0:14:54.880 the year. Just getting some headlines crossing the Bloomberg guys 0:14:54.920 --> 0:14:56.840 that I want to be very delicate with, very very 0:14:56.880 --> 0:15:01.360 careful with. Comes from luftans A light boarding has been 0:15:01.360 --> 0:15:04.800 halted in Minsk due to a terror threat. This coming 0:15:04.840 --> 0:15:08.920 from Minsk Airport comments on a Lufthansa flight. A Lufthansa 0:15:09.000 --> 0:15:11.640 flight boarding has been halted in Minx due to a 0:15:11.760 --> 0:15:15.240 terror threat. This comes at a time of course where 0:15:15.240 --> 0:15:17.400 the Ryan Edge. Yet over the weekend on its way 0:15:17.400 --> 0:15:21.120 to Lithuania was grounded in Belarus under what is widely 0:15:21.160 --> 0:15:25.720 considered to be the false pretenses of a terror threat. Tom, 0:15:25.800 --> 0:15:28.280 I'm not connecting the two issues. Many pointing out the 0:15:28.320 --> 0:15:30.760 context for this headline this morning given the news flow 0:15:30.760 --> 0:15:33.680 OU swhere right now. The headline is that lufthans Is 0:15:33.720 --> 0:15:36.880 flight boarding has been halted in Minsk due to a 0:15:37.040 --> 0:15:40.800 terror threat that coming to from the Minsk airport. Commenting 0:15:40.800 --> 0:15:43.760 on that flight, we're coming on four pm in Minsk 0:15:43.920 --> 0:15:46.560 right now. Remember it's one time zone over, John, from 0:15:46.600 --> 0:15:50.960 continental Europe warsaw is I believe, within Europe. And then 0:15:51.000 --> 0:15:53.280 as you go east off you go to another seven 0:15:53.280 --> 0:15:56.080 hours from New York and they're going into prime time 0:15:56.120 --> 0:15:58.680 in Minx. Now, this is when in the afternoon you 0:15:58.840 --> 0:16:03.000 fly out to what forty fifty different geographies, So we're 0:16:03.000 --> 0:16:04.880 coming right into prime time, and this is when it 0:16:04.920 --> 0:16:08.720 becomes increasingly difficult and complex for airlines to operate within 0:16:08.800 --> 0:16:12.400 that country and over that airspace, Tom, because the threat 0:16:12.440 --> 0:16:14.720 of any kind of terror on an airline is something 0:16:14.800 --> 0:16:20.280 taken incredibly seriously by airlines. Yeah, I agree with that, John, 0:16:20.320 --> 0:16:22.720 I don't think the airlines are gonna stress very hard 0:16:22.760 --> 0:16:25.600 about this. I mean, these are easy calls to make. 0:16:25.640 --> 0:16:29.080 Maybe not as Guy Johnson mentioned c DG to Delhi, 0:16:29.120 --> 0:16:31.680 I mean what do you do with that? But um, yeah, 0:16:31.720 --> 0:16:34.520 I agree, these are easy, easy decisions for the airlines. 0:16:34.600 --> 0:16:37.360 It's much more the politics of the moment. It will 0:16:37.400 --> 0:16:42.320 be important. We'll continue to follow this a story with this. 0:16:42.480 --> 0:16:46.440 Monama John of Alliance is well, Mona, I haven't asked 0:16:46.440 --> 0:16:49.960 this quaint question in ages and use of cash. The 0:16:50.080 --> 0:16:55.080 use of cash has never been greater, isn't it. Yeah, 0:16:55.200 --> 0:16:58.680 you know absolutely. I think cash for companies now has 0:16:58.760 --> 0:17:01.520 has been very interesting. Of course, we're seeing certain sectors, 0:17:01.960 --> 0:17:03.680 uh for example, the A, T and T s of 0:17:03.680 --> 0:17:05.400 the world, to take their cash and move it away 0:17:05.480 --> 0:17:10.280 from dividends and into acquisitions. Interestingly, some companies are moving 0:17:10.320 --> 0:17:13.280 more and more into capex spending. But we really want 0:17:13.320 --> 0:17:15.760 to see to kind of take this economy to another 0:17:16.520 --> 0:17:19.000 through this next like higher and really kind of continue 0:17:19.040 --> 0:17:22.160 to drive it is more and more spending in capex 0:17:22.200 --> 0:17:25.480 in R and D, having more labor entered the workforce 0:17:25.520 --> 0:17:28.479 and support that as well, And so certainly it'll be 0:17:28.520 --> 0:17:31.320 interesting for those those investors that are looking for dividends 0:17:31.359 --> 0:17:34.040 to see if those dividends actually do hold. Share buy 0:17:34.119 --> 0:17:36.399 backs have been a big part of use of cash 0:17:36.400 --> 0:17:38.440 as well, um, and we're starting to see that come 0:17:38.440 --> 0:17:41.200 back as well. So certainly there's been shareholder friendly uses 0:17:41.200 --> 0:17:44.000 of cash and then corporation friendly uses of cash that 0:17:44.040 --> 0:17:46.960 really drives the economy. Um. That balance may be shifting 0:17:47.000 --> 0:17:50.359 more back towards the capex parts of the world, but 0:17:50.440 --> 0:17:52.160 we will see in the next six and twelve months 0:17:52.200 --> 0:17:54.760 if that trend holds as well. Not just to tie 0:17:54.840 --> 0:17:58.399 the idea of incredible cash piles, the dynamism of the 0:17:58.520 --> 0:18:01.840 U S economy, and frankly the of recovery with this 0:18:02.000 --> 0:18:06.840 existential threat, this exogenous threat coming from what happened in Belarus, 0:18:06.880 --> 0:18:10.280 the idea of how fragile our markets right now to 0:18:10.560 --> 0:18:14.479 some sort of unpredictable threat from the outside. Do you 0:18:14.560 --> 0:18:16.880 have any sense of that, I mean, the whole concept 0:18:16.880 --> 0:18:21.240 of price to perfection and people expecting things to keep 0:18:21.240 --> 0:18:24.800 going on a perfect trajectory. Yeah, it's a great point. Um. 0:18:24.840 --> 0:18:27.040 You know, keep in mind and we talk about corrections 0:18:27.040 --> 0:18:30.000 in the market, uh, and and any given year, you know, 0:18:30.080 --> 0:18:32.639 one to three corrections in the five to ten percent 0:18:32.760 --> 0:18:35.879 range are the norm. This year, we haven't yet gotten 0:18:35.880 --> 0:18:39.720 even one plus correction in the SMP five hundred UM. 0:18:39.800 --> 0:18:42.560 And you know, to your point that we could be 0:18:42.600 --> 0:18:45.840 set up for at least a period of consolidation after 0:18:45.880 --> 0:18:48.120 a really nice run, especially across some of these value 0:18:48.119 --> 0:18:50.960 sectors that we noted UM, and that could come. You know, 0:18:50.960 --> 0:18:53.119 what could spark that, well, we don't know yet, but 0:18:53.280 --> 0:18:55.919 perhaps it is something in the political regime or in 0:18:55.960 --> 0:18:59.439 the geopolitical realm that we're seeing UM coming to the 0:18:59.440 --> 0:19:01.880 forefront or more. You know, keep in mind, in this 0:19:02.280 --> 0:19:04.920 economy we've really seen this recovery, and we talked about 0:19:04.920 --> 0:19:07.359 the K shape recovery. There have been haves and have 0:19:07.560 --> 0:19:11.840 not There has been a diversion and income inequality, and 0:19:11.880 --> 0:19:15.119 that's certainly the case across countries as well. There's some 0:19:15.160 --> 0:19:18.520 countries that have really re emerged strongly, and there's certain 0:19:18.560 --> 0:19:20.920 economies and countries that are still struggling quite a bit. 0:19:21.040 --> 0:19:23.840 And so in that backdrop, in that environment, when there's 0:19:23.840 --> 0:19:27.040 this increasing tension between haves and have nots, there's an 0:19:27.080 --> 0:19:31.159 increasing percentage or probability that we do see more disruption, 0:19:31.720 --> 0:19:35.399 perhaps coming from a geopolitical event, or we talked about 0:19:35.440 --> 0:19:38.000 the terror threats, or just you know, people feeling a 0:19:38.000 --> 0:19:41.920 little bit more disengaged, disgruntled, and so certainly that's one 0:19:41.960 --> 0:19:44.080 to keep in mind. Hard to handicap, of course, from 0:19:44.080 --> 0:19:46.680 a market perspective, but keep in mind we maybe do 0:19:47.000 --> 0:19:49.359 for a little bit more severe of a pullback than 0:19:49.400 --> 0:19:51.840 even what we saw over the last few weeks. I've 0:19:51.840 --> 0:19:55.879 got to leave it there. Thank you as always of 0:19:55.960 --> 0:20:04.120 Alliance there. This has been a great joy for us 0:20:04.119 --> 0:20:07.920 to speak the different mayoral candidates of New York City. 0:20:07.920 --> 0:20:10.760 It is widely presumed to be a one party city. 0:20:10.840 --> 0:20:15.360 The Democrat UH mayoral candidates are plenty at Diane Morals 0:20:15.400 --> 0:20:19.200 joins us right now, and Diane has a certain voice, 0:20:19.200 --> 0:20:24.560 a certain approach to this is June is here, Diane, 0:20:24.560 --> 0:20:28.040 what have you changed in your campaign over the last 0:20:28.200 --> 0:20:31.000 number of days. What is your new message as you 0:20:31.080 --> 0:20:36.360 go to the middle of June. I guess my new message, 0:20:36.400 --> 0:20:39.920 which isn't really particularly new at all, UM, is that 0:20:39.960 --> 0:20:43.680 this campaign is actually intended to make sure that our 0:20:43.720 --> 0:20:46.480 city comes back in a way that we've never existed before, 0:20:46.840 --> 0:20:50.359 in a way that recognizes our collective interdependence. UM, and 0:20:50.400 --> 0:20:52.520 in a way that makes it possible for every New 0:20:52.600 --> 0:20:55.359 Yorker to live in dignity. We haven't quite lived up 0:20:55.400 --> 0:20:57.639 to the idea of being the greatest city in the world, 0:20:57.680 --> 0:21:00.119 and this is our moment to seize that opportunity. You've 0:21:00.160 --> 0:21:04.040 heard this from other candidates. Frankly, we've seen polarizing candidates 0:21:04.320 --> 0:21:07.399 and those looking for us out of the pandemic to 0:21:07.600 --> 0:21:10.960 come together. How do you link that with the budget 0:21:11.119 --> 0:21:15.400 realities of New York City? Well, you know, I think 0:21:15.400 --> 0:21:18.560 the budget realities are that while we won't look like 0:21:18.640 --> 0:21:21.200 we did in twenty nineteen, were still the wealthiest city 0:21:21.200 --> 0:21:23.840 in the country, if not the world. UM. And there 0:21:24.000 --> 0:21:26.880 is enough to go around. UM. And that we've seen 0:21:26.920 --> 0:21:29.080 throughout the course of the pandemic from a from a 0:21:29.119 --> 0:21:31.920 message of unity. We've seen who it was that kept 0:21:31.920 --> 0:21:33.880 the city operating. We've seen who it was that made 0:21:33.880 --> 0:21:35.880 it possible for so many of us who work comfortably 0:21:35.920 --> 0:21:38.560 from home. UM. And the reality of it is that 0:21:38.600 --> 0:21:40.760 those are the folks who are also right now the 0:21:40.800 --> 0:21:43.960 most vulnerable and have been the least protected. UM. And 0:21:44.040 --> 0:21:47.159 it's a both and situation. We can actually um, you know, 0:21:48.320 --> 0:21:50.520 make it possible for them to continue in their roles 0:21:50.520 --> 0:21:52.200 that that make it possible for the rest of us 0:21:52.200 --> 0:21:54.720 to exist, um, and make it possible for them to 0:21:54.760 --> 0:21:57.560 live in dignity, which raises a question about paying for 0:21:57.720 --> 0:22:00.879 proposals that will allow people to live into dignity of 0:22:01.000 --> 0:22:04.480 all income spheres. And the idea here is also that 0:22:04.560 --> 0:22:07.120 New York City is already a pretty high tax region, 0:22:07.320 --> 0:22:10.160 and there already has been discussions of ultra high net 0:22:10.160 --> 0:22:14.320 worth individuals moving to Florida, moving to Arizona, lower tax states. 0:22:14.320 --> 0:22:17.080 What's the tipping point in your mind for how high 0:22:17.080 --> 0:22:19.800 tax rates can go before you get this exodus that 0:22:19.800 --> 0:22:24.040 becomes counterproductive to the overall revenue of the city. UM. 0:22:24.080 --> 0:22:25.840 So I guess the first pushback I'll give on that 0:22:25.920 --> 0:22:28.080 question or the framing of that question, is this this 0:22:28.400 --> 0:22:30.639 the idea of this exodus. UM. I don't think that 0:22:30.680 --> 0:22:32.880 the numbers actually bear that out to be true. Um. 0:22:33.080 --> 0:22:35.000 We've seen that in the course of the last twelve 0:22:35.080 --> 0:22:37.639 fifteen months. Uh. You know, Wall Street has done this 0:22:37.720 --> 0:22:40.560 great and created more millionaires and more billionaires. UM. And 0:22:40.600 --> 0:22:43.240 actually the real estate market is is on an uptick 0:22:43.280 --> 0:22:45.280 here in New York City. So I don't think those 0:22:45.320 --> 0:22:48.800 indicators actually support the idea of a mass exodus. UM. 0:22:48.840 --> 0:22:50.920 I also think that there's a lot that we can 0:22:50.920 --> 0:22:53.000 do with what we have. UM. When we look at 0:22:53.000 --> 0:22:54.960 the resources of the city budget, I think there's a 0:22:54.960 --> 0:22:57.360 lot of reallocation and reinvestment that we could be doing 0:22:57.359 --> 0:22:59.240 with the dollars that we do have before we even 0:22:59.520 --> 0:23:03.760