1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penel podcast. I'm Paul swing you. 2 00:00:05,360 --> 00:00:07,640 Speaker 1: Along with my co host Lisa Brahma Wicks. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money, whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,959 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:22,200 Speaker 1: at Bloomberg dot com. Well, the impeachment process is ongoing 8 00:00:22,280 --> 00:00:24,919 Speaker 1: in Washington, d C. Today, and last week, four law 9 00:00:24,960 --> 00:00:28,400 Speaker 1: professors testified on the potential impeachment of President Trump. One 10 00:00:28,440 --> 00:00:31,360 Speaker 1: of those law professors joins us today, Noah Feldman, Professor 11 00:00:31,360 --> 00:00:34,639 Speaker 1: of law at Harvard University. He's also Bloomberg Opinion calumnist. 12 00:00:34,960 --> 00:00:37,599 Speaker 1: He's based in Boston, Massachusetts. He joins us here on 13 00:00:37,640 --> 00:00:41,120 Speaker 1: the phone. Now, thanks so much for joining us. Um again, 14 00:00:41,200 --> 00:00:45,440 Speaker 1: compelling testimony by you and your fellow professor's last week. 15 00:00:45,680 --> 00:00:49,960 Speaker 1: Just give us your sense, your takeaway of the testimony. 16 00:00:50,440 --> 00:00:54,320 Speaker 1: My takeaway is that we laid out a clear case 17 00:00:54,440 --> 00:00:59,240 Speaker 1: for why the framers wanted impeachment to exist at all, UM, namely, 18 00:00:59,560 --> 00:01:03,360 Speaker 1: the deal with a situation where a president distorted the 19 00:01:03,480 --> 00:01:06,800 Speaker 1: use of his office for ultimately purposes of his own 20 00:01:06,840 --> 00:01:09,679 Speaker 1: like reelection. That we talked about what high crimes and 21 00:01:09,720 --> 00:01:12,080 Speaker 1: misdemeanors really are, that they are, in essence, the abuse 22 00:01:12,120 --> 00:01:14,640 Speaker 1: of office, and then we suggested that if you believe 23 00:01:14,680 --> 00:01:17,039 Speaker 1: the stuff you've been watching on TV and reading about it, 24 00:01:17,120 --> 00:01:20,080 Speaker 1: if you believe that the allegations against President Trump are accurate, 25 00:01:20,680 --> 00:01:23,640 Speaker 1: then it would follow that impeachment would be appropriate. Do 26 00:01:23,720 --> 00:01:27,039 Speaker 1: you feel like you're speaking into an empty vacuum that 27 00:01:27,080 --> 00:01:29,679 Speaker 1: basically the only people who would hear you would be 28 00:01:29,680 --> 00:01:32,240 Speaker 1: people who agreed with you and everybody else you aren't 29 00:01:32,240 --> 00:01:35,360 Speaker 1: going to convince. I really hope not. You know, I 30 00:01:35,400 --> 00:01:39,080 Speaker 1: think it may be that sometimes, uh, in places where 31 00:01:39,080 --> 00:01:41,440 Speaker 1: people are obsessed with the impeachment, they think they know 32 00:01:41,480 --> 00:01:44,199 Speaker 1: all the details and they formed views already, which is fine. 33 00:01:44,280 --> 00:01:46,160 Speaker 1: But in most of the country, I think there's still 34 00:01:46,160 --> 00:01:48,360 Speaker 1: a lot of people who are trying to figure out 35 00:01:48,400 --> 00:01:50,760 Speaker 1: exactly what's going on, who are busy, people with some 36 00:01:50,880 --> 00:01:53,560 Speaker 1: jobs and lives who haven't been obsessively focused on this 37 00:01:53,640 --> 00:01:56,000 Speaker 1: until now, and so with any luck, but this provided 38 00:01:56,120 --> 00:01:59,440 Speaker 1: was just a clear statement of why it's worthwhile to 39 00:01:59,480 --> 00:02:03,080 Speaker 1: take this as seriously, why it's appropriate to take up 40 00:02:03,120 --> 00:02:05,400 Speaker 1: the valuable time with the American people on this issue, 41 00:02:05,440 --> 00:02:07,320 Speaker 1: and I think you know on that. In my sense, 42 00:02:07,360 --> 00:02:09,520 Speaker 1: at least from the mail and social media context that 43 00:02:09,520 --> 00:02:12,160 Speaker 1: I've connections that I'm getting, there are people who were 44 00:02:12,400 --> 00:02:15,440 Speaker 1: glad to hear it laid out simply and clearly. So No, 45 00:02:15,639 --> 00:02:18,679 Speaker 1: I think the consensus is that the House will likely 46 00:02:18,760 --> 00:02:21,040 Speaker 1: vote for impeachment. It will then go to the Senate 47 00:02:21,760 --> 00:02:25,240 Speaker 1: and then go along party lines. If a Republican senator 48 00:02:26,919 --> 00:02:32,320 Speaker 1: votes not to move forward with is that senator saying 49 00:02:32,760 --> 00:02:34,480 Speaker 1: that he or she does not believe that there were 50 00:02:34,520 --> 00:02:38,800 Speaker 1: impeachable offenses despite what you're saying, and some others are saying, 51 00:02:39,040 --> 00:02:42,480 Speaker 1: these really are impeachable defenses. Well, there are two things 52 00:02:42,520 --> 00:02:44,400 Speaker 1: that the senator could be saying. One would be I 53 00:02:44,400 --> 00:02:46,839 Speaker 1: think these things are in principle impeachable, but I don't 54 00:02:46,840 --> 00:02:49,600 Speaker 1: believe that the president did them, And a little hard 55 00:02:49,600 --> 00:02:51,480 Speaker 1: to believe that someone would have that view, given how 56 00:02:51,520 --> 00:02:53,639 Speaker 1: overwhelming the evidence is. But maybe somebody would think that, 57 00:02:53,760 --> 00:02:56,280 Speaker 1: maybe they'll say that, and you know, if that's the 58 00:02:56,280 --> 00:02:58,480 Speaker 1: case fair enough, you know, I mean, whether you believe 59 00:02:58,520 --> 00:03:00,840 Speaker 1: the evidence or not is very much ape of individual 60 00:03:00,840 --> 00:03:03,640 Speaker 1: credibility determination. The other thing they could be saying, as 61 00:03:03,680 --> 00:03:05,400 Speaker 1: you say, is that they think it's fine for the 62 00:03:05,440 --> 00:03:08,800 Speaker 1: president the United States to go out and use the 63 00:03:08,880 --> 00:03:12,080 Speaker 1: office of the presidency to try to get personal advantage 64 00:03:12,120 --> 00:03:15,480 Speaker 1: in an election through investigations from a foreign country of 65 00:03:15,520 --> 00:03:19,280 Speaker 1: his opponent. And I would be really saddened if any 66 00:03:19,320 --> 00:03:22,800 Speaker 1: member of the Senate believed that that was not impeachable conduct, 67 00:03:22,840 --> 00:03:26,040 Speaker 1: because it's just so clear from what the Framer said. 68 00:03:26,040 --> 00:03:27,720 Speaker 1: And it's also just even if you leave the Framers 69 00:03:27,720 --> 00:03:29,679 Speaker 1: out of it, it's just so obvious that that's the 70 00:03:29,800 --> 00:03:32,040 Speaker 1: kind of conduct that we can't tolerate in the president 71 00:03:32,040 --> 00:03:34,600 Speaker 1: because it's the start's re election. And so I really 72 00:03:34,600 --> 00:03:38,840 Speaker 1: hope that no senator would vote h not to you know, 73 00:03:38,960 --> 00:03:41,360 Speaker 1: vote to ecquit the president on that basis. There's an 74 00:03:41,400 --> 00:03:44,840 Speaker 1: interesting legal question here, and your prefer your perfect to 75 00:03:44,840 --> 00:03:48,680 Speaker 1: weigh in on this. Justice Roberts would be the third 76 00:03:49,280 --> 00:03:52,960 Speaker 1: justice to preside over an impeachment trial in the U. S. 77 00:03:52,960 --> 00:03:56,400 Speaker 1: Senate if it gets there. Um, he is overseeing the Senate, 78 00:03:56,440 --> 00:04:00,560 Speaker 1: but he is the first who has openly asked, with 79 00:04:00,600 --> 00:04:04,960 Speaker 1: the president who is potentially going to be impeached, what 80 00:04:05,000 --> 00:04:06,640 Speaker 1: do you think he's going to do if this comes 81 00:04:06,640 --> 00:04:09,960 Speaker 1: to pass. Chief Justice Roberts is someone who, throughout his 82 00:04:10,000 --> 00:04:13,760 Speaker 1: career has shown a very very deep commitment to protecting 83 00:04:14,160 --> 00:04:17,159 Speaker 1: the legitimacy of the Supreme Court by making sure that 84 00:04:17,200 --> 00:04:20,840 Speaker 1: it's not partisan. Now, the Court, of course is ideological. 85 00:04:20,880 --> 00:04:22,920 Speaker 1: Different people on the Court of different beliefs, including Chief 86 00:04:22,920 --> 00:04:25,720 Speaker 1: justus as Roberts. But there's a difference between being ideological, 87 00:04:25,760 --> 00:04:27,880 Speaker 1: which means you have values and ideas and they affect you, 88 00:04:28,160 --> 00:04:29,640 Speaker 1: and being part of it, which means you do what 89 00:04:29,760 --> 00:04:32,040 Speaker 1: the political party that you're affiliated with wants you to do. 90 00:04:32,600 --> 00:04:34,760 Speaker 1: And I think he will bend over backwards to make 91 00:04:34,760 --> 00:04:36,680 Speaker 1: sure that he is not partisan in any way, and 92 00:04:36,720 --> 00:04:38,640 Speaker 1: I think he will try very hard to be as 93 00:04:38,640 --> 00:04:41,320 Speaker 1: objective as he can be. I would add that his 94 00:04:41,360 --> 00:04:43,960 Speaker 1: powers are somewhat limited. Most things the Chief Justice does 95 00:04:44,040 --> 00:04:46,680 Speaker 1: in an impeachment hearing could be overturned by a bare 96 00:04:46,800 --> 00:04:49,200 Speaker 1: majority of the Senate on a vote. So if he 97 00:04:49,240 --> 00:04:52,000 Speaker 1: makes a decision on say, an evidence question, the Senate 98 00:04:52,000 --> 00:04:54,080 Speaker 1: could vote to override him in any moment. So one 99 00:04:54,120 --> 00:04:56,000 Speaker 1: thing he could do is if there's anything really controversial, 100 00:04:56,200 --> 00:04:58,280 Speaker 1: he could just turn to the Senators and say, okay, 101 00:04:58,560 --> 00:05:00,200 Speaker 1: you guys, vote on it. I'm not even gonna the 102 00:05:00,279 --> 00:05:02,359 Speaker 1: decision and have you overruled me? And that would be 103 00:05:02,400 --> 00:05:05,000 Speaker 1: one way for him to stay out of the crosshairs 104 00:05:05,040 --> 00:05:08,640 Speaker 1: of the partisan fight. So, uh no, it appears like 105 00:05:08,680 --> 00:05:11,160 Speaker 1: it's being reported that, you know, the House is trying 106 00:05:11,200 --> 00:05:13,920 Speaker 1: to move for a vote prior to them leaving for 107 00:05:14,480 --> 00:05:17,039 Speaker 1: recess on December twenty. Give us a sense of the 108 00:05:17,120 --> 00:05:19,719 Speaker 1: timing if that does occur and it goes to the Senate. 109 00:05:20,040 --> 00:05:22,520 Speaker 1: Give us a sense of the timing of what it 110 00:05:22,560 --> 00:05:26,040 Speaker 1: could be in the Senate. The trial Actually, well, when 111 00:05:26,040 --> 00:05:30,280 Speaker 1: the Senate comes back in January, you know, it can 112 00:05:30,400 --> 00:05:32,919 Speaker 1: take up that trial right away if it wants to, 113 00:05:33,120 --> 00:05:35,880 Speaker 1: or it can choose through its the majority leadership there 114 00:05:35,880 --> 00:05:38,560 Speaker 1: to to delay. That's very much a question in the 115 00:05:38,600 --> 00:05:42,320 Speaker 1: hands of the Senate. There's no nothing in the Constitution 116 00:05:42,360 --> 00:05:44,640 Speaker 1: that tells you how fast the Senate has to take 117 00:05:44,720 --> 00:05:46,960 Speaker 1: up the question. My guesses that they would probably take 118 00:05:46,960 --> 00:05:49,800 Speaker 1: it up pretty quickly. And then the question is how 119 00:05:49,880 --> 00:05:53,080 Speaker 1: full of trial would it be. The House traditionally sends 120 00:05:53,120 --> 00:05:54,760 Speaker 1: over some members of the House who are called the 121 00:05:54,800 --> 00:05:57,559 Speaker 1: impeachment managers, and they literally go over to the Senate 122 00:05:57,600 --> 00:06:00,600 Speaker 1: chamber and they argue the caves like prosecutors, and they 123 00:06:00,640 --> 00:06:04,039 Speaker 1: usually have the opportunity historically to call some witnesses and 124 00:06:04,080 --> 00:06:07,039 Speaker 1: then a defense is usually mounted by the president. But 125 00:06:07,080 --> 00:06:08,800 Speaker 1: we don't know if the president will mount a defense 126 00:06:08,839 --> 00:06:10,880 Speaker 1: here or not, and if he doesn't, it could be 127 00:06:10,880 --> 00:06:14,560 Speaker 1: a relatively short and compact process. And then again it's 128 00:06:14,640 --> 00:06:16,640 Speaker 1: up to the Senate to decide when they will go 129 00:06:16,800 --> 00:06:19,920 Speaker 1: for a vote, and then um, then that will happen. 130 00:06:19,960 --> 00:06:22,800 Speaker 1: So it could it could all happen relatively quickly. My 131 00:06:22,880 --> 00:06:24,760 Speaker 1: guess is that it would not be over by the 132 00:06:24,800 --> 00:06:26,719 Speaker 1: end of January, but I think it's highly probable that 133 00:06:26,760 --> 00:06:28,760 Speaker 1: it would be over some time by the end of February. 134 00:06:29,080 --> 00:06:31,440 Speaker 1: Now just quickly here, I'm wondering, can you tell us 135 00:06:31,440 --> 00:06:34,760 Speaker 1: a little bit about the experience of testifying and how 136 00:06:34,800 --> 00:06:38,240 Speaker 1: cold it was in the room. Yeah, I mean it 137 00:06:38,320 --> 00:06:40,920 Speaker 1: was a very strange experience, as you can imagine. First all, 138 00:06:40,960 --> 00:06:43,240 Speaker 1: it was weirdly cold in the room, and Doug Collins, 139 00:06:43,600 --> 00:06:46,440 Speaker 1: the ranking Republican on the committee, actually took some time 140 00:06:46,480 --> 00:06:48,840 Speaker 1: out of his public statement to say that it was 141 00:06:48,880 --> 00:06:51,000 Speaker 1: too cold, and also he didn't like his chair, So 142 00:06:51,040 --> 00:06:52,880 Speaker 1: that gives you some sense of the weirdness of it. 143 00:06:52,960 --> 00:06:57,520 Speaker 1: All um. You know, ultimately, their cameras are there, the 144 00:06:57,560 --> 00:06:59,560 Speaker 1: people are in the room, but your audience is not 145 00:06:59,600 --> 00:07:02,680 Speaker 1: just the sitting there. Your audience is also the broader public, 146 00:07:02,680 --> 00:07:05,640 Speaker 1: and especially the public that isn't obsessed with these hearings 147 00:07:05,640 --> 00:07:07,440 Speaker 1: and just wants to know what are you doing here? 148 00:07:07,440 --> 00:07:09,120 Speaker 1: And all you can really do is try to stay 149 00:07:09,120 --> 00:07:12,360 Speaker 1: your case simply and concisely. And I did that and 150 00:07:12,400 --> 00:07:14,880 Speaker 1: I'm happy I had a chance to do that. And then, 151 00:07:14,920 --> 00:07:16,840 Speaker 1: you know, the other side comes after you, and very 152 00:07:16,840 --> 00:07:18,920 Speaker 1: often they say something mean about you, and then they 153 00:07:19,200 --> 00:07:21,160 Speaker 1: don't actually ask you a question where you could respond, 154 00:07:21,200 --> 00:07:23,080 Speaker 1: and that's always a little frustrating, always feels a bit 155 00:07:23,120 --> 00:07:25,320 Speaker 1: like a cheap shot. No Felment, thank you so much 156 00:07:25,360 --> 00:07:27,520 Speaker 1: for being with us, and good advice to anyone who's 157 00:07:27,520 --> 00:07:30,440 Speaker 1: going to testify in front of Congress. Bring tea and 158 00:07:30,560 --> 00:07:33,840 Speaker 1: especially yes. No Feltment is Professor of laud at Harvard University, 159 00:07:33,880 --> 00:07:50,880 Speaker 1: also a Bloomberg opinion columnist, joining us by phone. As 160 00:07:50,880 --> 00:07:53,840 Speaker 1: the US and China push forward to some type of 161 00:07:53,880 --> 00:07:57,040 Speaker 1: trade deal, one of the fallouts we're seeing is maybe 162 00:07:57,040 --> 00:07:59,400 Speaker 1: each other's governments, you know, want to go beyond that. 163 00:07:59,520 --> 00:08:02,000 Speaker 1: Maybe what we're seeing here from China. So news coming 164 00:08:02,000 --> 00:08:03,960 Speaker 1: out today that Lisa and I agree is really really 165 00:08:04,000 --> 00:08:07,240 Speaker 1: important as we think about the negotiations between US and China, 166 00:08:07,240 --> 00:08:10,720 Speaker 1: and that's Chinese government taking further steps to remove foreign 167 00:08:10,720 --> 00:08:13,840 Speaker 1: technology from state agencies and other organizations. To get a 168 00:08:13,840 --> 00:08:15,720 Speaker 1: sense of how important that is, we welcome on and 169 00:08:15,800 --> 00:08:18,720 Speaker 1: Shrini Boston. He's a senior semi conductor and hardware analyst 170 00:08:18,960 --> 00:08:21,360 Speaker 1: for Bloomberg Intelligence, joining us here on a Bloomberg in 171 00:08:21,440 --> 00:08:24,560 Speaker 1: actor broker studio so on in Beijing, saying that they 172 00:08:24,560 --> 00:08:28,200 Speaker 1: may remove as many as twenty million computers at government 173 00:08:28,240 --> 00:08:31,480 Speaker 1: agencies with domestic products over the three years. That seems 174 00:08:31,480 --> 00:08:34,600 Speaker 1: like a big deal to me and to Lisa absolutely. Look, 175 00:08:34,640 --> 00:08:38,040 Speaker 1: it is a big deal, and effectively it is trying 176 00:08:38,040 --> 00:08:42,160 Speaker 1: to create an alternative ecosystem across the PC, semi conductor 177 00:08:42,160 --> 00:08:46,040 Speaker 1: and hardware food chains. It's not easy to do. It's 178 00:08:46,080 --> 00:08:48,479 Speaker 1: not going to be overnight. It's going to be particularly 179 00:08:48,559 --> 00:08:55,200 Speaker 1: painful because UM, Intel, Microsoft, UM, all the PC makers, 180 00:08:55,240 --> 00:08:59,520 Speaker 1: the motherboard makers, the driver makers, the UM the flash 181 00:08:59,520 --> 00:09:02,320 Speaker 1: software that goes into the firmware that goes into each 182 00:09:02,360 --> 00:09:05,440 Speaker 1: of these chips have been tested and tested again and 183 00:09:05,440 --> 00:09:08,800 Speaker 1: tested across every single combination over the past thirty years. 184 00:09:08,920 --> 00:09:13,560 Speaker 1: And we have this iterative sort of systemic knowledge that 185 00:09:13,720 --> 00:09:17,359 Speaker 1: is built up so that when a system is implemented 186 00:09:17,440 --> 00:09:24,480 Speaker 1: like a PC desktop in an average desk workers UM workstation, UM, 187 00:09:24,559 --> 00:09:27,320 Speaker 1: and this is not his or her main function, you 188 00:09:27,360 --> 00:09:30,480 Speaker 1: know it works, right, You can't afford to take those chances. 189 00:09:30,520 --> 00:09:34,640 Speaker 1: It works, it's stable for the most part, and it 190 00:09:34,720 --> 00:09:39,000 Speaker 1: just gets allows him or her to get stuff done. UM. 191 00:09:39,200 --> 00:09:42,600 Speaker 1: To go to an alternative platform means that you are 192 00:09:43,160 --> 00:09:45,640 Speaker 1: from the bottom of the stack, from the semiconductor that 193 00:09:45,760 --> 00:09:47,480 Speaker 1: is used to the top of the stack, which is 194 00:09:47,520 --> 00:09:50,040 Speaker 1: the operating system and the applications that run on it. 195 00:09:50,640 --> 00:09:54,400 Speaker 1: You are replacing that entire food chain and you're you're 196 00:09:54,520 --> 00:09:57,200 Speaker 1: giving a quality of service to that individual that is 197 00:09:57,920 --> 00:10:01,440 Speaker 1: air free, highly reliable, and what we call in the 198 00:10:01,480 --> 00:10:08,120 Speaker 1: industry seven nine reliable. It's not going to be it's 199 00:10:08,559 --> 00:10:11,960 Speaker 1: it's not going to be uh that reliable. Okay. That's 200 00:10:12,000 --> 00:10:15,240 Speaker 1: which is probably the reason why you're seeing Microsoft, Microsoft, Dell, 201 00:10:15,280 --> 00:10:18,960 Speaker 1: and HP shares doing nothing today. Basically, even though you 202 00:10:19,040 --> 00:10:22,640 Speaker 1: have China ordering all government offices and public institutions to 203 00:10:22,720 --> 00:10:24,880 Speaker 1: move forward a computer equipment and software and these will 204 00:10:24,880 --> 00:10:28,560 Speaker 1: be the companies that could potentially hurt from it. So 205 00:10:28,920 --> 00:10:31,439 Speaker 1: is it insignificant or is it just you know that 206 00:10:31,760 --> 00:10:34,079 Speaker 1: this sort of edifies a feeling that have been in 207 00:10:34,120 --> 00:10:36,920 Speaker 1: the market for a while, which is China is going 208 00:10:36,960 --> 00:10:41,199 Speaker 1: to gradually push in order to have its own technology 209 00:10:41,280 --> 00:10:46,559 Speaker 1: supersede international competitors. Yeah, the creating of the bifurcation is 210 00:10:46,600 --> 00:10:49,760 Speaker 1: a serious risk from our technology development track. When you're 211 00:10:49,760 --> 00:10:52,520 Speaker 1: trying to develop something on your own and then this 212 00:10:52,600 --> 00:10:56,320 Speaker 1: is a replay of the VHS Betamax story all over again, 213 00:10:56,640 --> 00:10:59,400 Speaker 1: separated by national boundaries. It is not good from our 214 00:10:59,400 --> 00:11:03,720 Speaker 1: technology development track for either side of the track, regardless 215 00:11:03,760 --> 00:11:07,040 Speaker 1: of how better or worse one technology might be. Okay, 216 00:11:07,080 --> 00:11:11,360 Speaker 1: but for tech ignorance like myself, Um, are we just 217 00:11:11,400 --> 00:11:14,040 Speaker 1: talking about a PC? Are we talking about cloud? Are 218 00:11:14,040 --> 00:11:17,520 Speaker 1: we talking about everything? It's everything, right, So we can 219 00:11:17,600 --> 00:11:22,640 Speaker 1: replace the Dell PC with a Chinese mainstake Lenovo, which 220 00:11:22,720 --> 00:11:25,400 Speaker 1: is a global market leader number one in PCs. Could 221 00:11:25,400 --> 00:11:28,360 Speaker 1: happen right away, right, except that what's powering the Lenovo PC, 222 00:11:28,520 --> 00:11:30,400 Speaker 1: it's still in next A D six. Okay, you say, 223 00:11:30,440 --> 00:11:32,080 Speaker 1: I don't want to use Intel, Let's go with the 224 00:11:32,120 --> 00:11:34,640 Speaker 1: other option m D which also is American. Then you 225 00:11:34,679 --> 00:11:37,160 Speaker 1: say I don't want to use Microsoft? What are your choices? 226 00:11:37,200 --> 00:11:39,200 Speaker 1: You use a Linux kernel? How many apps are on 227 00:11:39,320 --> 00:11:41,200 Speaker 1: the Linux kernel? How do you how are you going 228 00:11:41,200 --> 00:11:42,839 Speaker 1: to replace Excel? You say no, I'm going to go 229 00:11:42,920 --> 00:11:46,560 Speaker 1: to Google Docs. Wait, that's American too. Details details. So 230 00:11:47,000 --> 00:11:48,920 Speaker 1: you're stuck between a rock and a hard place, and 231 00:11:48,960 --> 00:11:52,120 Speaker 1: it's changes don't come easily and it's going to be painful. 232 00:11:52,160 --> 00:11:53,800 Speaker 1: All right, let's just step back a little bit. It 233 00:11:53,920 --> 00:11:57,680 Speaker 1: appears that we're moving ever so slowly towards a phase 234 00:11:57,720 --> 00:12:00,640 Speaker 1: one type of deal. What's the feeling on Silicon Valley 235 00:12:00,679 --> 00:12:04,200 Speaker 1: about trade just in general, our relationship with China? Is 236 00:12:04,240 --> 00:12:08,360 Speaker 1: it a big, big concern that this thing could go sideways? Look, 237 00:12:08,440 --> 00:12:12,960 Speaker 1: I think that, in my opinion, we're we're pricing in 238 00:12:13,040 --> 00:12:16,080 Speaker 1: for sure, uh, some sort of a deal, some sort 239 00:12:16,120 --> 00:12:19,920 Speaker 1: of a phase one deal. Hopefully that doesn't drop the 240 00:12:20,000 --> 00:12:22,320 Speaker 1: boat too much from current level of tariffs. Number one. 241 00:12:22,360 --> 00:12:27,400 Speaker 1: Number two is from a China Silicon Valley relationship. Again, 242 00:12:27,440 --> 00:12:29,440 Speaker 1: it's one of those don't if you do, don't if 243 00:12:29,440 --> 00:12:33,440 Speaker 1: you don't scenarios. You need them because they're twenty market 244 00:12:33,520 --> 00:12:36,480 Speaker 1: for all of our products and services. You need them 245 00:12:36,520 --> 00:12:40,640 Speaker 1: because they are a supply change, supply chain essential. But 246 00:12:40,800 --> 00:12:44,000 Speaker 1: we also recognize that this is not a healthy relationship 247 00:12:44,360 --> 00:12:47,520 Speaker 1: and that you have to move away from h TO 248 00:12:47,520 --> 00:12:50,959 Speaker 1: to a distributed manufacturing model for example, but that it's 249 00:12:50,960 --> 00:12:53,920 Speaker 1: going to cost more. Well, I will say this has 250 00:12:53,960 --> 00:12:56,400 Speaker 1: been a fascinating conversation and just to leave with this 251 00:12:56,480 --> 00:13:00,680 Speaker 1: tidbet analysts at Jeffrey's estimate that US to knowledge companies 252 00:13:00,720 --> 00:13:03,040 Speaker 1: generating as much as a hundred and fifty billion dollars 253 00:13:03,040 --> 00:13:05,920 Speaker 1: a year in revenues from China, which is the reason 254 00:13:06,000 --> 00:13:09,520 Speaker 1: why trade discussions and any mandate from Beijing should be 255 00:13:09,559 --> 00:13:12,480 Speaker 1: taken seriously, if not perhaps literally, at least if you 256 00:13:12,480 --> 00:13:14,640 Speaker 1: look at the stock price right now, A non street 257 00:13:14,679 --> 00:13:16,120 Speaker 1: of Austin, thank you so much for being with us, 258 00:13:16,120 --> 00:13:18,520 Speaker 1: an nonstret of Austin who saved his Yiddish for before 259 00:13:18,520 --> 00:13:22,320 Speaker 1: the segment, A senior semiconductor and hardware analyst for Bloomberg Intelligence. 260 00:13:37,360 --> 00:13:40,720 Speaker 1: We will certainly go down as a year for risk 261 00:13:40,960 --> 00:13:45,120 Speaker 1: on assets out performance across the board. The question is 262 00:13:45,120 --> 00:13:47,040 Speaker 1: is it time to take a little bit more risk 263 00:13:47,080 --> 00:13:51,040 Speaker 1: as we head into going forward. Right now, let's welcome 264 00:13:51,120 --> 00:13:55,600 Speaker 1: Luca Paolini, Chief strategist for pick Ta Asset Management over 265 00:13:55,640 --> 00:13:58,839 Speaker 1: two billion dollars assets under management, based in London, but 266 00:13:58,920 --> 00:14:01,400 Speaker 1: joining us here on our Bloomberg and Actor broker studio. Look, 267 00:14:01,520 --> 00:14:04,120 Speaker 1: thanks so much for joining us. You have a call 268 00:14:04,200 --> 00:14:08,400 Speaker 1: here where you're overweight emerging markets. So that's saying we 269 00:14:08,480 --> 00:14:10,640 Speaker 1: had a good run in twenty nineteen. I'm willing to 270 00:14:11,120 --> 00:14:13,920 Speaker 1: take a little bit more risk going forward. But actually 271 00:14:14,000 --> 00:14:16,000 Speaker 1: our view is letly different. We think the marketing next 272 00:14:16,040 --> 00:14:18,760 Speaker 1: year we actually struggle a little bit. We think that 273 00:14:18,800 --> 00:14:22,760 Speaker 1: the real trade for next year is more on sector 274 00:14:22,880 --> 00:14:25,400 Speaker 1: and regional allocations. So this year everything that could go 275 00:14:25,520 --> 00:14:27,920 Speaker 1: up went up. Next year, I think we have to 276 00:14:27,960 --> 00:14:30,440 Speaker 1: be most selective, and what we like is either the 277 00:14:30,480 --> 00:14:34,720 Speaker 1: extreme valuation of some markets or actually when we look 278 00:14:34,760 --> 00:14:39,280 Speaker 1: at them, or sectors and regions where we think there 279 00:14:39,360 --> 00:14:41,600 Speaker 1: is a solid earnest girls behind it. When you look 280 00:14:41,640 --> 00:14:46,440 Speaker 1: at value, you cannot avoid a conclusion that emerging markets Europe, 281 00:14:46,960 --> 00:14:50,520 Speaker 1: Japanese a different story, offer much better value than the US. 282 00:14:50,560 --> 00:14:52,760 Speaker 1: And so we think that this is where the value is. 283 00:14:52,800 --> 00:14:56,480 Speaker 1: Emerging markets Europe, even the UK, and much less in 284 00:14:56,520 --> 00:14:58,680 Speaker 1: the US. This is interesting. I'm thinking about it, and 285 00:14:58,720 --> 00:15:03,280 Speaker 1: I'm wondering whether it's actually accurate that everything has gone 286 00:15:03,320 --> 00:15:06,080 Speaker 1: up that's been riskings. We've seen the triple cs like behind, 287 00:15:06,360 --> 00:15:09,840 Speaker 1: and we have seen emerging markets like behind in part 288 00:15:10,000 --> 00:15:12,920 Speaker 1: because people have been concerned and showing some discretion. So 289 00:15:13,000 --> 00:15:16,880 Speaker 1: which areas within emerging market do you think people have 290 00:15:17,000 --> 00:15:19,400 Speaker 1: been leaving behind more than they showed? Right? And there 291 00:15:19,440 --> 00:15:21,880 Speaker 1: has to be a fundamental backdrop that supports this view 292 00:15:21,880 --> 00:15:23,320 Speaker 1: as well, Right, Yeah, I think when you look at 293 00:15:23,360 --> 00:15:27,480 Speaker 1: emerging markets, let's say two critical or key driving emerging 294 00:15:27,480 --> 00:15:32,479 Speaker 1: market performance is actually the dollar and global growth, especially 295 00:15:32,520 --> 00:15:35,280 Speaker 1: if especially emerging market growth. So what we see, and 296 00:15:35,320 --> 00:15:37,360 Speaker 1: maybe we're wrong on this, we expect the dollars to 297 00:15:37,400 --> 00:15:39,480 Speaker 1: pick and the reason why the dollar is going to 298 00:15:39,520 --> 00:15:42,880 Speaker 1: struggle next year is simple. Until recently, the US economy 299 00:15:43,000 --> 00:15:45,800 Speaker 1: was significantly outperformed. The FAT was acting a rate when 300 00:15:45,840 --> 00:15:48,480 Speaker 1: everybody was cutting rates. Now you're in a situation when 301 00:15:48,520 --> 00:15:51,880 Speaker 1: the FAT is cutting rates like everybody else where. US grows. 302 00:15:51,920 --> 00:15:53,600 Speaker 1: It's not very different from Europe. This court is going 303 00:15:53,680 --> 00:15:55,520 Speaker 1: to be one percent one point five, so there is 304 00:15:55,520 --> 00:15:57,760 Speaker 1: a convergence of growth, and the dollar is twenty percent 305 00:15:57,800 --> 00:15:59,480 Speaker 1: one expense. So we assume the dollar is going to 306 00:15:59,560 --> 00:16:02,240 Speaker 1: go down and global growth is weak, but I think 307 00:16:02,280 --> 00:16:05,000 Speaker 1: we start to see some kind of signal stabilization that's 308 00:16:05,040 --> 00:16:07,840 Speaker 1: normally a good combination from the emerging markets. And obviously 309 00:16:07,840 --> 00:16:10,800 Speaker 1: the evaluation is also very attractive. So within emerging markets, 310 00:16:10,840 --> 00:16:13,920 Speaker 1: are there certain markets you like more than others? We've 311 00:16:13,920 --> 00:16:16,840 Speaker 1: had some interesting performance Brazil and some others in Latin 312 00:16:16,880 --> 00:16:19,960 Speaker 1: America VERSUS Eastern Europe for example, Actually we continue to 313 00:16:20,040 --> 00:16:22,840 Speaker 1: prefer Russia. Russia has been if you look at the 314 00:16:22,840 --> 00:16:24,840 Speaker 1: past two years, been the best market in two years 315 00:16:24,840 --> 00:16:27,160 Speaker 1: in a row. And Russia actually as upper from the 316 00:16:27,240 --> 00:16:29,000 Speaker 1: US is ninety six, believe it or not in the 317 00:16:29,000 --> 00:16:31,600 Speaker 1: other terms, so we continue to be lived in Russia. 318 00:16:31,680 --> 00:16:35,000 Speaker 1: Emerging Asia is also interesting because the evaluation and if 319 00:16:35,040 --> 00:16:38,680 Speaker 1: you have any kind of um let's say c as 320 00:16:38,760 --> 00:16:41,280 Speaker 1: far in terms of trade war and distabilization in growth, 321 00:16:41,280 --> 00:16:44,200 Speaker 1: Emerging Asia actually would do much better on bonds. Russian 322 00:16:44,240 --> 00:16:47,720 Speaker 1: born and Mexican bonds by far the best opportunities. And 323 00:16:47,720 --> 00:16:50,240 Speaker 1: how do you like to get access or exposure to 324 00:16:50,360 --> 00:16:53,840 Speaker 1: these to these nations that basically local currency dead or 325 00:16:53,920 --> 00:16:57,000 Speaker 1: is it equities, or we prefer, as I said, we 326 00:16:57,320 --> 00:17:00,920 Speaker 1: for Russia and Mexico We like local cacy bonds because 327 00:17:01,240 --> 00:17:04,280 Speaker 1: you have the advantage of having a significant or let's 328 00:17:04,280 --> 00:17:06,960 Speaker 1: say rear rates roughly three or four percent and under 329 00:17:07,040 --> 00:17:10,160 Speaker 1: value currency and central bank accuntney rates. So the upside 330 00:17:10,200 --> 00:17:13,080 Speaker 1: for bonds emerging markets from the currency and form. From 331 00:17:13,080 --> 00:17:16,080 Speaker 1: the equity side, Asia is much more interesting, you know, Korean, 332 00:17:16,240 --> 00:17:19,480 Speaker 1: So it actually looks actually quite quite quite cheap, considering 333 00:17:19,560 --> 00:17:22,359 Speaker 1: that we mad just about to see some subidization global growth. 334 00:17:22,880 --> 00:17:25,960 Speaker 1: You say like financials, that's not a widely held view. 335 00:17:26,119 --> 00:17:28,040 Speaker 1: Folks walking through the door here, tell us about your 336 00:17:28,080 --> 00:17:30,679 Speaker 1: thoughts on the financials. I have to say that meeting 337 00:17:30,760 --> 00:17:34,560 Speaker 1: quite a few clients, quite a few attempted to buy 338 00:17:34,560 --> 00:17:37,480 Speaker 1: into financials. But financials, like Japan in the last way, 339 00:17:37,560 --> 00:17:40,439 Speaker 1: every time you get excited about it, you tend to 340 00:17:40,440 --> 00:17:43,240 Speaker 1: make a mistake. So now the question about financial is 341 00:17:43,280 --> 00:17:45,040 Speaker 1: really what are the kid drivers they could have is 342 00:17:45,080 --> 00:17:48,080 Speaker 1: Bonniels and basically the mark. So let's say financials do 343 00:17:48,240 --> 00:17:50,760 Speaker 1: well when when bonnie Els and market are going up. 344 00:17:50,760 --> 00:17:53,080 Speaker 1: This year, market is going up, but actually bonnie Els hasn't, 345 00:17:53,520 --> 00:17:56,080 Speaker 1: so we expected Bonnials to start going up next year. 346 00:17:56,359 --> 00:17:58,920 Speaker 1: And if this is this this is true, well all 347 00:17:59,040 --> 00:18:04,480 Speaker 1: the value kind of cyclical value stocks, financials, energy mining 348 00:18:04,840 --> 00:18:07,240 Speaker 1: can actually offer the potentially is a tactical code. Though 349 00:18:07,640 --> 00:18:10,760 Speaker 1: I wouldn't personally invest in financials over the next five years, 350 00:18:10,760 --> 00:18:12,280 Speaker 1: but over the next six or one month I think 351 00:18:12,320 --> 00:18:14,080 Speaker 1: could be could be a good trade. What about the 352 00:18:14,200 --> 00:18:16,000 Speaker 1: US equity is broadly a lot of people have been 353 00:18:16,000 --> 00:18:18,000 Speaker 1: saying that that's still going to remain the performer. Do 354 00:18:18,000 --> 00:18:20,639 Speaker 1: you agree? No, I think I think the prom that 355 00:18:20,720 --> 00:18:22,439 Speaker 1: with the with US eecurities is that there is no 356 00:18:22,560 --> 00:18:25,960 Speaker 1: question the US companies a much more profitable better around 357 00:18:25,960 --> 00:18:28,440 Speaker 1: the European Japanese one. We all know that that's that's 358 00:18:28,720 --> 00:18:31,520 Speaker 1: no news. I have a promin though, on in terms 359 00:18:31,560 --> 00:18:34,959 Speaker 1: of ernest growth, which is basically flat. Margins have picked, 360 00:18:35,320 --> 00:18:38,040 Speaker 1: wage growth is picking up. We are probably towards the 361 00:18:38,160 --> 00:18:39,879 Speaker 1: end of the business second, and you see that in 362 00:18:39,920 --> 00:18:43,440 Speaker 1: the curve. Default rates in a lot of indicators and 363 00:18:43,440 --> 00:18:45,720 Speaker 1: and the in evaluation see continue to be quite expensive. 364 00:18:45,720 --> 00:18:48,480 Speaker 1: So I think I personally the US we'll start to 365 00:18:48,520 --> 00:18:51,720 Speaker 1: want to perform next year, especially in dollar terms. We 366 00:18:52,000 --> 00:18:56,359 Speaker 1: respect the dollar to to decline real quick, treasury else rising. 367 00:18:56,560 --> 00:18:58,360 Speaker 1: We have two percent for the end of next year, 368 00:18:58,400 --> 00:19:01,000 Speaker 1: so a marginal increase notch, but you know you're not 369 00:19:01,000 --> 00:19:02,600 Speaker 1: gonna make a lot of money with once next year. 370 00:19:02,640 --> 00:19:05,000 Speaker 1: Now twenty more seconds. I'm just wondering, what did you 371 00:19:05,000 --> 00:19:08,480 Speaker 1: have for breakfast? Uh? Three cross on if you believe 372 00:19:08,480 --> 00:19:10,280 Speaker 1: it or not? Three al Mont cross on at four 373 00:19:10,280 --> 00:19:12,280 Speaker 1: o'clock because it's some kind of a jel leg issue. 374 00:19:13,200 --> 00:19:17,359 Speaker 1: Three croissants cross on three one must have been tiny 375 00:19:17,400 --> 00:19:21,040 Speaker 1: because I I don't think so, but he must be 376 00:19:21,119 --> 00:19:23,080 Speaker 1: a marathon runner. Thank you so much for being with us. 377 00:19:23,359 --> 00:19:27,480 Speaker 1: Really a wonderful information. Luca Paolini. He is chief strategistic peaked, 378 00:19:27,520 --> 00:19:30,479 Speaker 1: A asset management with more than two hundred billion dollars 379 00:19:30,560 --> 00:19:35,720 Speaker 1: under management normally in London today gracing our interactive Broger studios. 380 00:19:50,119 --> 00:19:53,680 Speaker 1: We've had the Opeque plus meeting. They are instituting a 381 00:19:53,840 --> 00:19:57,000 Speaker 1: further production cuts. We've already gotten me Saudi a Ramco 382 00:19:57,080 --> 00:19:59,719 Speaker 1: I p O, if you could call it that. Going forward, 383 00:20:00,080 --> 00:20:04,240 Speaker 1: the balance of oil prices be determined by supply or demand. 384 00:20:04,400 --> 00:20:06,280 Speaker 1: That is one of the key questions joining us now 385 00:20:06,480 --> 00:20:09,639 Speaker 1: Regina Mayor. She has global energy head for KPMG based 386 00:20:09,680 --> 00:20:12,280 Speaker 1: in Houston, Regina. I want to start there with the 387 00:20:12,359 --> 00:20:16,640 Speaker 1: supply demand side because Honestly, for the most of this year, Uh, 388 00:20:16,840 --> 00:20:19,320 Speaker 1: the demand side was driving things, and we're seeing that 389 00:20:19,359 --> 00:20:21,879 Speaker 1: again today with the prices dipping just a bit on 390 00:20:22,080 --> 00:20:26,840 Speaker 1: the heels of trade uncertainty going into will the supply 391 00:20:26,960 --> 00:20:30,479 Speaker 1: side start to take the helm. I think the supply 392 00:20:30,520 --> 00:20:34,760 Speaker 1: side is going to take be taken into um being 393 00:20:34,840 --> 00:20:39,120 Speaker 1: factored in largely because the market likes negative signals when 394 00:20:39,160 --> 00:20:41,639 Speaker 1: it comes to oil price. So given that we have 395 00:20:42,160 --> 00:20:46,760 Speaker 1: extensive supply overproduction numbers that are coming out, and especially 396 00:20:46,800 --> 00:20:49,439 Speaker 1: for Q one of next year, then we're seeing supply 397 00:20:49,520 --> 00:20:52,240 Speaker 1: factored into the downward pressure on the price. I see 398 00:20:52,280 --> 00:20:55,159 Speaker 1: supply and demand when they have an impact, it's a 399 00:20:55,200 --> 00:20:58,280 Speaker 1: downward pressure, which is very frustrating for the industry overall. 400 00:20:58,320 --> 00:21:00,000 Speaker 1: But I'm in a very barished mood when it comes 401 00:21:00,000 --> 00:21:03,119 Speaker 1: accrewed price. So, Regina, we you know, they had some 402 00:21:03,200 --> 00:21:06,440 Speaker 1: announcements about the cuts, but whenever I read OPEC or 403 00:21:06,480 --> 00:21:09,919 Speaker 1: OPEC plus, uh, you know, production cut announcements, Yeah, I 404 00:21:09,960 --> 00:21:11,359 Speaker 1: feel like we have to take them with a green 405 00:21:11,400 --> 00:21:14,520 Speaker 1: of salt. Do you think they will hold this time? 406 00:21:14,600 --> 00:21:17,320 Speaker 1: And if not, who will be the the bad actors 407 00:21:17,400 --> 00:21:21,840 Speaker 1: or actors? Compliance is definitely the name of the game 408 00:21:21,920 --> 00:21:24,840 Speaker 1: and probably the reason why the meeting took so much 409 00:21:24,880 --> 00:21:28,440 Speaker 1: longer than they had anticipated last week. The bad actors 410 00:21:28,560 --> 00:21:32,560 Speaker 1: are Russia in particular. I thought that their little fine 411 00:21:32,600 --> 00:21:37,919 Speaker 1: print agreement around declassifying condensate out of their numbers was 412 00:21:38,000 --> 00:21:40,879 Speaker 1: a nod toward Russia's non compliance and the fact that 413 00:21:40,920 --> 00:21:44,359 Speaker 1: they will continue to be noncompliant, but they're going to 414 00:21:44,400 --> 00:21:46,919 Speaker 1: calculate it differently so they don't look as bad as 415 00:21:46,960 --> 00:21:49,280 Speaker 1: they had perhaps in the past. And the U S 416 00:21:49,280 --> 00:21:52,399 Speaker 1: sanctions on Iran and Venezuela are only helping the OPEC 417 00:21:52,520 --> 00:21:55,359 Speaker 1: pictures overall. But Saudi is going to have to muscle 418 00:21:55,400 --> 00:21:56,879 Speaker 1: their way through it, and they're going to have to 419 00:21:56,880 --> 00:21:59,240 Speaker 1: be the ones that bear the brunt of the lion's 420 00:21:59,240 --> 00:22:01,280 Speaker 1: share of the cuts. Regina, you said that you have 421 00:22:01,280 --> 00:22:04,600 Speaker 1: a very barish take right now on the price of crude. 422 00:22:04,640 --> 00:22:07,479 Speaker 1: I'm looking at crewe traded in the n Imax flat 423 00:22:07,880 --> 00:22:10,320 Speaker 1: uh down just to touch three or four basis points 424 00:22:10,640 --> 00:22:14,320 Speaker 1: form from Friday. I'm trying to figure out what's driving that, 425 00:22:14,480 --> 00:22:16,040 Speaker 1: What where do you think that's going to be going? 426 00:22:16,040 --> 00:22:18,359 Speaker 1: In other words, are we headed? Is is a threshold 427 00:22:18,400 --> 00:22:23,560 Speaker 1: forty or the threat that the sort of threshold seventy dollars. Well, 428 00:22:23,600 --> 00:22:26,760 Speaker 1: I don't think it's either. I think the the OPEC 429 00:22:26,840 --> 00:22:30,000 Speaker 1: plus agreement helps us stay in this sort of not 430 00:22:30,160 --> 00:22:33,119 Speaker 1: too hot, not too cold, and I wouldn't say just 431 00:22:33,240 --> 00:22:36,080 Speaker 1: right in a goldilocks sense, but within a range that 432 00:22:36,119 --> 00:22:39,480 Speaker 1: people feel mostly comfortable with. If we can keep w 433 00:22:39,600 --> 00:22:41,440 Speaker 1: t I close to sixty, and if we can keep 434 00:22:41,440 --> 00:22:45,640 Speaker 1: Brent close to sixty, that is what producers are aiming for. 435 00:22:45,840 --> 00:22:48,359 Speaker 1: That's still not That means that US shale is still 436 00:22:48,480 --> 00:22:51,120 Speaker 1: not really in the money across the board and will 437 00:22:51,160 --> 00:22:53,560 Speaker 1: still continue to see a lot of pressure on capital 438 00:22:53,560 --> 00:22:56,800 Speaker 1: investment on the U S shale producers. So Regina, let's 439 00:22:56,800 --> 00:22:59,160 Speaker 1: shift gears just a little bit too. Saudi A Ramco, 440 00:22:59,520 --> 00:23:01,600 Speaker 1: the company priced it's I p O last week I 441 00:23:01,640 --> 00:23:04,760 Speaker 1: think thirty two reals each raising twenty five point six 442 00:23:04,920 --> 00:23:07,440 Speaker 1: billion dollars UH. That was at the top end of 443 00:23:07,480 --> 00:23:10,560 Speaker 1: the range here. So it's gonna start trading on Wednesday. 444 00:23:10,760 --> 00:23:15,160 Speaker 1: My concern is they have virtually no Western investors in 445 00:23:15,200 --> 00:23:20,200 Speaker 1: this transaction. What's the feeling within your world about how 446 00:23:20,280 --> 00:23:23,640 Speaker 1: this thing was structured? I really just kind of limiting 447 00:23:23,680 --> 00:23:26,639 Speaker 1: it to some of the Middle East. It's interesting I 448 00:23:26,720 --> 00:23:28,359 Speaker 1: was in a conference last week with a lot of 449 00:23:28,359 --> 00:23:32,080 Speaker 1: private equity investors here in Houston, and they were asking 450 00:23:32,359 --> 00:23:35,199 Speaker 1: would you invest in that deal? And most people in 451 00:23:35,240 --> 00:23:38,159 Speaker 1: the room said absolutely not. There are far less risky 452 00:23:38,240 --> 00:23:41,800 Speaker 1: places to put your capital within an energy context than 453 00:23:42,080 --> 00:23:45,320 Speaker 1: investing in that deal. They will have subscribers, and there 454 00:23:45,320 --> 00:23:47,760 Speaker 1: are a lot of sovereign wealth funds out there that 455 00:23:47,880 --> 00:23:50,280 Speaker 1: will place a bet and it will allow the South 456 00:23:50,280 --> 00:23:54,080 Speaker 1: East to monetize this asset and drive improvements in their 457 00:23:54,080 --> 00:23:57,240 Speaker 1: budgets that they need right to improve their their country 458 00:23:57,240 --> 00:23:59,760 Speaker 1: and their economy. But it's not going to necessarily be 459 00:23:59,800 --> 00:24:01,679 Speaker 1: some thing that's super complicated and that a lot of 460 00:24:01,720 --> 00:24:04,159 Speaker 1: Western investors are going to be knocking down the doors 461 00:24:04,200 --> 00:24:07,040 Speaker 1: to invest in. So back in the US with shell 462 00:24:07,160 --> 00:24:10,720 Speaker 1: producers under fire because this is just not economic for 463 00:24:10,760 --> 00:24:13,119 Speaker 1: them with oil prices where they are, we are seeing 464 00:24:13,160 --> 00:24:16,600 Speaker 1: capital expenditures fall pretty much across the board in the 465 00:24:16,600 --> 00:24:19,200 Speaker 1: shell patch. I'm trying to figure out though, why this 466 00:24:19,320 --> 00:24:22,680 Speaker 1: isn't bullish for prices, the idea that on the margins 467 00:24:22,720 --> 00:24:26,760 Speaker 1: you are seeing UH producers realize that things are going 468 00:24:26,800 --> 00:24:30,760 Speaker 1: to change that much, which is going to reduce supply. Yeah, 469 00:24:30,760 --> 00:24:33,080 Speaker 1: so there's a projection that US supply goes up to 470 00:24:33,119 --> 00:24:36,520 Speaker 1: thirteen and a half noion barrels per day. For I 471 00:24:36,560 --> 00:24:39,680 Speaker 1: think personally that projection is at risk because I am 472 00:24:39,760 --> 00:24:42,520 Speaker 1: seeing a slowdown in US shale production and I am 473 00:24:42,560 --> 00:24:45,359 Speaker 1: seeing a lack of capital. If you look at some 474 00:24:45,480 --> 00:24:47,720 Speaker 1: of the smaller players in US shale, and if you 475 00:24:47,760 --> 00:24:49,800 Speaker 1: look at some of the impairments that were recorded in 476 00:24:49,880 --> 00:24:52,320 Speaker 1: Q three, that's where you'll start to see it. It's 477 00:24:52,320 --> 00:24:54,280 Speaker 1: a treadmill that they've been on and they've had to 478 00:24:54,359 --> 00:24:57,359 Speaker 1: continue to invest to sort of stay a pace, and 479 00:24:57,440 --> 00:25:01,720 Speaker 1: that capital is drying up. So I, personally and UM 480 00:25:01,720 --> 00:25:04,960 Speaker 1: more bullish that US supply starts to get a little 481 00:25:04,960 --> 00:25:08,679 Speaker 1: bit constrained, which could help promote prices longer term and 482 00:25:08,720 --> 00:25:11,440 Speaker 1: could play into opex hands in the Saudi I p O, 483 00:25:11,480 --> 00:25:14,719 Speaker 1: which will be positive from an overall producer perspective. Regina, 484 00:25:14,720 --> 00:25:16,840 Speaker 1: thanks so much for joining us. We appreciate your thoughts. 485 00:25:16,840 --> 00:25:21,159 Speaker 1: Regina Mayor, Global Energy head at KPMG, talking all things oil. 486 00:25:21,640 --> 00:25:23,880 Speaker 1: Thanks for listening to the Bloomberg P and L podcast. 487 00:25:24,040 --> 00:25:26,680 Speaker 1: You can subscribe and listen to interviews at Apple Podcasts 488 00:25:26,760 --> 00:25:29,840 Speaker 1: or whatever podcast platform you prefer. Paul Sweeney, I'm on 489 00:25:29,880 --> 00:25:32,439 Speaker 1: Twitter at pt Sweeney. I'm Lisa A. Bram Woyds. I'm 490 00:25:32,440 --> 00:25:35,360 Speaker 1: on Twitter at Lisa A. Bram Woyds. One before the podcast, 491 00:25:35,359 --> 00:25:37,960 Speaker 1: you can always catch us worldwide on Bloomberg Radio