WEBVTT - Justice Roberts Will Avoid Partisanship At All Cost 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg Penel podcast. I'm Paul swing you. 0:00:05.360 --> 0:00:07.640 Along with my co host Lisa Brahma Wicks. Each day 0:00:07.720 --> 0:00:10.240 we bring you the most noteworthy and useful interviews for 0:00:10.280 --> 0:00:12.520 you and your money, whether at the grocery store or 0:00:12.560 --> 0:00:15.480 the trading floor. Find a Bloomberg Penl podcast on Apple 0:00:15.520 --> 0:00:17.959 podcast or wherever you listen to podcasts, as well as 0:00:17.960 --> 0:00:22.200 at Bloomberg dot com. Well, the impeachment process is ongoing 0:00:22.280 --> 0:00:24.919 in Washington, d C. Today, and last week, four law 0:00:24.960 --> 0:00:28.400 professors testified on the potential impeachment of President Trump. One 0:00:28.440 --> 0:00:31.360 of those law professors joins us today, Noah Feldman, Professor 0:00:31.360 --> 0:00:34.639 of law at Harvard University. He's also Bloomberg Opinion calumnist. 0:00:34.960 --> 0:00:37.599 He's based in Boston, Massachusetts. He joins us here on 0:00:37.640 --> 0:00:41.120 the phone. Now, thanks so much for joining us. Um again, 0:00:41.200 --> 0:00:45.440 compelling testimony by you and your fellow professor's last week. 0:00:45.680 --> 0:00:49.960 Just give us your sense, your takeaway of the testimony. 0:00:50.440 --> 0:00:54.320 My takeaway is that we laid out a clear case 0:00:54.440 --> 0:00:59.240 for why the framers wanted impeachment to exist at all, UM, namely, 0:00:59.560 --> 0:01:03.360 the deal with a situation where a president distorted the 0:01:03.480 --> 0:01:06.800 use of his office for ultimately purposes of his own 0:01:06.840 --> 0:01:09.679 like reelection. That we talked about what high crimes and 0:01:09.720 --> 0:01:12.080 misdemeanors really are, that they are, in essence, the abuse 0:01:12.120 --> 0:01:14.640 of office, and then we suggested that if you believe 0:01:14.680 --> 0:01:17.039 the stuff you've been watching on TV and reading about it, 0:01:17.120 --> 0:01:20.080 if you believe that the allegations against President Trump are accurate, 0:01:20.680 --> 0:01:23.640 then it would follow that impeachment would be appropriate. Do 0:01:23.720 --> 0:01:27.039 you feel like you're speaking into an empty vacuum that 0:01:27.080 --> 0:01:29.679 basically the only people who would hear you would be 0:01:29.680 --> 0:01:32.240 people who agreed with you and everybody else you aren't 0:01:32.240 --> 0:01:35.360 going to convince. I really hope not. You know, I 0:01:35.400 --> 0:01:39.080 think it may be that sometimes, uh, in places where 0:01:39.080 --> 0:01:41.440 people are obsessed with the impeachment, they think they know 0:01:41.480 --> 0:01:44.199 all the details and they formed views already, which is fine. 0:01:44.280 --> 0:01:46.160 But in most of the country, I think there's still 0:01:46.160 --> 0:01:48.360 a lot of people who are trying to figure out 0:01:48.400 --> 0:01:50.760 exactly what's going on, who are busy, people with some 0:01:50.880 --> 0:01:53.560 jobs and lives who haven't been obsessively focused on this 0:01:53.640 --> 0:01:56.000 until now, and so with any luck, but this provided 0:01:56.120 --> 0:01:59.440 was just a clear statement of why it's worthwhile to 0:01:59.480 --> 0:02:03.080 take this as seriously, why it's appropriate to take up 0:02:03.120 --> 0:02:05.400 the valuable time with the American people on this issue, 0:02:05.440 --> 0:02:07.320 and I think you know on that. In my sense, 0:02:07.360 --> 0:02:09.520 at least from the mail and social media context that 0:02:09.520 --> 0:02:12.160 I've connections that I'm getting, there are people who were 0:02:12.400 --> 0:02:15.440 glad to hear it laid out simply and clearly. So No, 0:02:15.639 --> 0:02:18.679 I think the consensus is that the House will likely 0:02:18.760 --> 0:02:21.040 vote for impeachment. It will then go to the Senate 0:02:21.760 --> 0:02:25.240 and then go along party lines. If a Republican senator 0:02:26.919 --> 0:02:32.320 votes not to move forward with is that senator saying 0:02:32.760 --> 0:02:34.480 that he or she does not believe that there were 0:02:34.520 --> 0:02:38.800 impeachable offenses despite what you're saying, and some others are saying, 0:02:39.040 --> 0:02:42.480 these really are impeachable defenses. Well, there are two things 0:02:42.520 --> 0:02:44.400 that the senator could be saying. One would be I 0:02:44.400 --> 0:02:46.839 think these things are in principle impeachable, but I don't 0:02:46.840 --> 0:02:49.600 believe that the president did them, And a little hard 0:02:49.600 --> 0:02:51.480 to believe that someone would have that view, given how 0:02:51.520 --> 0:02:53.639 overwhelming the evidence is. But maybe somebody would think that, 0:02:53.760 --> 0:02:56.280 maybe they'll say that, and you know, if that's the 0:02:56.280 --> 0:02:58.480 case fair enough, you know, I mean, whether you believe 0:02:58.520 --> 0:03:00.840 the evidence or not is very much ape of individual 0:03:00.840 --> 0:03:03.640 credibility determination. The other thing they could be saying, as 0:03:03.680 --> 0:03:05.400 you say, is that they think it's fine for the 0:03:05.440 --> 0:03:08.800 president the United States to go out and use the 0:03:08.880 --> 0:03:12.080 office of the presidency to try to get personal advantage 0:03:12.120 --> 0:03:15.480 in an election through investigations from a foreign country of 0:03:15.520 --> 0:03:19.280 his opponent. And I would be really saddened if any 0:03:19.320 --> 0:03:22.800 member of the Senate believed that that was not impeachable conduct, 0:03:22.840 --> 0:03:26.040 because it's just so clear from what the Framer said. 0:03:26.040 --> 0:03:27.720 And it's also just even if you leave the Framers 0:03:27.720 --> 0:03:29.679 out of it, it's just so obvious that that's the 0:03:29.800 --> 0:03:32.040 kind of conduct that we can't tolerate in the president 0:03:32.040 --> 0:03:34.600 because it's the start's re election. And so I really 0:03:34.600 --> 0:03:38.840 hope that no senator would vote h not to you know, 0:03:38.960 --> 0:03:41.360 vote to ecquit the president on that basis. There's an 0:03:41.400 --> 0:03:44.840 interesting legal question here, and your prefer your perfect to 0:03:44.840 --> 0:03:48.680 weigh in on this. Justice Roberts would be the third 0:03:49.280 --> 0:03:52.960 justice to preside over an impeachment trial in the U. S. 0:03:52.960 --> 0:03:56.400 Senate if it gets there. Um, he is overseeing the Senate, 0:03:56.440 --> 0:04:00.560 but he is the first who has openly asked, with 0:04:00.600 --> 0:04:04.960 the president who is potentially going to be impeached, what 0:04:05.000 --> 0:04:06.640 do you think he's going to do if this comes 0:04:06.640 --> 0:04:09.960 to pass. Chief Justice Roberts is someone who, throughout his 0:04:10.000 --> 0:04:13.760 career has shown a very very deep commitment to protecting 0:04:14.160 --> 0:04:17.159 the legitimacy of the Supreme Court by making sure that 0:04:17.200 --> 0:04:20.840 it's not partisan. Now, the Court, of course is ideological. 0:04:20.880 --> 0:04:22.920 Different people on the Court of different beliefs, including Chief 0:04:22.920 --> 0:04:25.720 justus as Roberts. But there's a difference between being ideological, 0:04:25.760 --> 0:04:27.880 which means you have values and ideas and they affect you, 0:04:28.160 --> 0:04:29.640 and being part of it, which means you do what 0:04:29.760 --> 0:04:32.040 the political party that you're affiliated with wants you to do. 0:04:32.600 --> 0:04:34.760 And I think he will bend over backwards to make 0:04:34.760 --> 0:04:36.680 sure that he is not partisan in any way, and 0:04:36.720 --> 0:04:38.640 I think he will try very hard to be as 0:04:38.640 --> 0:04:41.320 objective as he can be. I would add that his 0:04:41.360 --> 0:04:43.960 powers are somewhat limited. Most things the Chief Justice does 0:04:44.040 --> 0:04:46.680 in an impeachment hearing could be overturned by a bare 0:04:46.800 --> 0:04:49.200 majority of the Senate on a vote. So if he 0:04:49.240 --> 0:04:52.000 makes a decision on say, an evidence question, the Senate 0:04:52.000 --> 0:04:54.080 could vote to override him in any moment. So one 0:04:54.120 --> 0:04:56.000 thing he could do is if there's anything really controversial, 0:04:56.200 --> 0:04:58.280 he could just turn to the Senators and say, okay, 0:04:58.560 --> 0:05:00.200 you guys, vote on it. I'm not even gonna the 0:05:00.279 --> 0:05:02.359 decision and have you overruled me? And that would be 0:05:02.400 --> 0:05:05.000 one way for him to stay out of the crosshairs 0:05:05.040 --> 0:05:08.640 of the partisan fight. So, uh no, it appears like 0:05:08.680 --> 0:05:11.160 it's being reported that, you know, the House is trying 0:05:11.200 --> 0:05:13.920 to move for a vote prior to them leaving for 0:05:14.480 --> 0:05:17.039 recess on December twenty. Give us a sense of the 0:05:17.120 --> 0:05:19.719 timing if that does occur and it goes to the Senate. 0:05:20.040 --> 0:05:22.520 Give us a sense of the timing of what it 0:05:22.560 --> 0:05:26.040 could be in the Senate. The trial Actually, well, when 0:05:26.040 --> 0:05:30.280 the Senate comes back in January, you know, it can 0:05:30.400 --> 0:05:32.919 take up that trial right away if it wants to, 0:05:33.120 --> 0:05:35.880 or it can choose through its the majority leadership there 0:05:35.880 --> 0:05:38.560 to to delay. That's very much a question in the 0:05:38.600 --> 0:05:42.320 hands of the Senate. There's no nothing in the Constitution 0:05:42.360 --> 0:05:44.640 that tells you how fast the Senate has to take 0:05:44.720 --> 0:05:46.960 up the question. My guesses that they would probably take 0:05:46.960 --> 0:05:49.800 it up pretty quickly. And then the question is how 0:05:49.880 --> 0:05:53.080 full of trial would it be. The House traditionally sends 0:05:53.120 --> 0:05:54.760 over some members of the House who are called the 0:05:54.800 --> 0:05:57.559 impeachment managers, and they literally go over to the Senate 0:05:57.600 --> 0:06:00.600 chamber and they argue the caves like prosecutors, and they 0:06:00.640 --> 0:06:04.039 usually have the opportunity historically to call some witnesses and 0:06:04.080 --> 0:06:07.039 then a defense is usually mounted by the president. But 0:06:07.080 --> 0:06:08.800 we don't know if the president will mount a defense 0:06:08.839 --> 0:06:10.880 here or not, and if he doesn't, it could be 0:06:10.880 --> 0:06:14.560 a relatively short and compact process. And then again it's 0:06:14.640 --> 0:06:16.640 up to the Senate to decide when they will go 0:06:16.800 --> 0:06:19.920 for a vote, and then um, then that will happen. 0:06:19.960 --> 0:06:22.800 So it could it could all happen relatively quickly. My 0:06:22.880 --> 0:06:24.760 guess is that it would not be over by the 0:06:24.800 --> 0:06:26.719 end of January, but I think it's highly probable that 0:06:26.760 --> 0:06:28.760 it would be over some time by the end of February. 0:06:29.080 --> 0:06:31.440 Now just quickly here, I'm wondering, can you tell us 0:06:31.440 --> 0:06:34.760 a little bit about the experience of testifying and how 0:06:34.800 --> 0:06:38.240 cold it was in the room. Yeah, I mean it 0:06:38.320 --> 0:06:40.920 was a very strange experience, as you can imagine. First all, 0:06:40.960 --> 0:06:43.240 it was weirdly cold in the room, and Doug Collins, 0:06:43.600 --> 0:06:46.440 the ranking Republican on the committee, actually took some time 0:06:46.480 --> 0:06:48.840 out of his public statement to say that it was 0:06:48.880 --> 0:06:51.000 too cold, and also he didn't like his chair, So 0:06:51.040 --> 0:06:52.880 that gives you some sense of the weirdness of it. 0:06:52.960 --> 0:06:57.520 All um. You know, ultimately, their cameras are there, the 0:06:57.560 --> 0:06:59.560 people are in the room, but your audience is not 0:06:59.600 --> 0:07:02.680 just the sitting there. Your audience is also the broader public, 0:07:02.680 --> 0:07:05.640 and especially the public that isn't obsessed with these hearings 0:07:05.640 --> 0:07:07.440 and just wants to know what are you doing here? 0:07:07.440 --> 0:07:09.120 And all you can really do is try to stay 0:07:09.120 --> 0:07:12.360 your case simply and concisely. And I did that and 0:07:12.400 --> 0:07:14.880 I'm happy I had a chance to do that. And then, 0:07:14.920 --> 0:07:16.840 you know, the other side comes after you, and very 0:07:16.840 --> 0:07:18.920 often they say something mean about you, and then they 0:07:19.200 --> 0:07:21.160 don't actually ask you a question where you could respond, 0:07:21.200 --> 0:07:23.080 and that's always a little frustrating, always feels a bit 0:07:23.120 --> 0:07:25.320 like a cheap shot. No Felment, thank you so much 0:07:25.360 --> 0:07:27.520 for being with us, and good advice to anyone who's 0:07:27.520 --> 0:07:30.440 going to testify in front of Congress. Bring tea and 0:07:30.560 --> 0:07:33.840 especially yes. No Feltment is Professor of laud at Harvard University, 0:07:33.880 --> 0:07:50.880 also a Bloomberg opinion columnist, joining us by phone. As 0:07:50.880 --> 0:07:53.840 the US and China push forward to some type of 0:07:53.880 --> 0:07:57.040 trade deal, one of the fallouts we're seeing is maybe 0:07:57.040 --> 0:07:59.400 each other's governments, you know, want to go beyond that. 0:07:59.520 --> 0:08:02.000 Maybe what we're seeing here from China. So news coming 0:08:02.000 --> 0:08:03.960 out today that Lisa and I agree is really really 0:08:04.000 --> 0:08:07.240 important as we think about the negotiations between US and China, 0:08:07.240 --> 0:08:10.720 and that's Chinese government taking further steps to remove foreign 0:08:10.720 --> 0:08:13.840 technology from state agencies and other organizations. To get a 0:08:13.840 --> 0:08:15.720 sense of how important that is, we welcome on and 0:08:15.800 --> 0:08:18.720 Shrini Boston. He's a senior semi conductor and hardware analyst 0:08:18.960 --> 0:08:21.360 for Bloomberg Intelligence, joining us here on a Bloomberg in 0:08:21.440 --> 0:08:24.560 actor broker studio so on in Beijing, saying that they 0:08:24.560 --> 0:08:28.200 may remove as many as twenty million computers at government 0:08:28.240 --> 0:08:31.480 agencies with domestic products over the three years. That seems 0:08:31.480 --> 0:08:34.600 like a big deal to me and to Lisa absolutely. Look, 0:08:34.640 --> 0:08:38.040 it is a big deal, and effectively it is trying 0:08:38.040 --> 0:08:42.160 to create an alternative ecosystem across the PC, semi conductor 0:08:42.160 --> 0:08:46.040 and hardware food chains. It's not easy to do. It's 0:08:46.080 --> 0:08:48.479 not going to be overnight. It's going to be particularly 0:08:48.559 --> 0:08:55.200 painful because UM, Intel, Microsoft, UM, all the PC makers, 0:08:55.240 --> 0:08:59.520 the motherboard makers, the driver makers, the UM the flash 0:08:59.520 --> 0:09:02.320 software that goes into the firmware that goes into each 0:09:02.360 --> 0:09:05.440 of these chips have been tested and tested again and 0:09:05.440 --> 0:09:08.800 tested across every single combination over the past thirty years. 0:09:08.920 --> 0:09:13.560 And we have this iterative sort of systemic knowledge that 0:09:13.720 --> 0:09:17.359 is built up so that when a system is implemented 0:09:17.440 --> 0:09:24.480 like a PC desktop in an average desk workers UM workstation, UM, 0:09:24.559 --> 0:09:27.320 and this is not his or her main function, you 0:09:27.360 --> 0:09:30.480 know it works, right, You can't afford to take those chances. 0:09:30.520 --> 0:09:34.640 It works, it's stable for the most part, and it 0:09:34.720 --> 0:09:39.000 just gets allows him or her to get stuff done. UM. 0:09:39.200 --> 0:09:42.600 To go to an alternative platform means that you are 0:09:43.160 --> 0:09:45.640 from the bottom of the stack, from the semiconductor that 0:09:45.760 --> 0:09:47.480 is used to the top of the stack, which is 0:09:47.520 --> 0:09:50.040 the operating system and the applications that run on it. 0:09:50.640 --> 0:09:54.400 You are replacing that entire food chain and you're you're 0:09:54.520 --> 0:09:57.200 giving a quality of service to that individual that is 0:09:57.920 --> 0:10:01.440 air free, highly reliable, and what we call in the 0:10:01.480 --> 0:10:08.120 industry seven nine reliable. It's not going to be it's 0:10:08.559 --> 0:10:11.960 it's not going to be uh that reliable. Okay. That's 0:10:12.000 --> 0:10:15.240 which is probably the reason why you're seeing Microsoft, Microsoft, Dell, 0:10:15.280 --> 0:10:18.960 and HP shares doing nothing today. Basically, even though you 0:10:19.040 --> 0:10:22.640 have China ordering all government offices and public institutions to 0:10:22.720 --> 0:10:24.880 move forward a computer equipment and software and these will 0:10:24.880 --> 0:10:28.560 be the companies that could potentially hurt from it. So 0:10:28.920 --> 0:10:31.439 is it insignificant or is it just you know that 0:10:31.760 --> 0:10:34.079 this sort of edifies a feeling that have been in 0:10:34.120 --> 0:10:36.920 the market for a while, which is China is going 0:10:36.960 --> 0:10:41.199 to gradually push in order to have its own technology 0:10:41.280 --> 0:10:46.559 supersede international competitors. Yeah, the creating of the bifurcation is 0:10:46.600 --> 0:10:49.760 a serious risk from our technology development track. When you're 0:10:49.760 --> 0:10:52.520 trying to develop something on your own and then this 0:10:52.600 --> 0:10:56.320 is a replay of the VHS Betamax story all over again, 0:10:56.640 --> 0:10:59.400 separated by national boundaries. It is not good from our 0:10:59.400 --> 0:11:03.720 technology development track for either side of the track, regardless 0:11:03.760 --> 0:11:07.040 of how better or worse one technology might be. Okay, 0:11:07.080 --> 0:11:11.360 but for tech ignorance like myself, Um, are we just 0:11:11.400 --> 0:11:14.040 talking about a PC? Are we talking about cloud? Are 0:11:14.040 --> 0:11:17.520 we talking about everything? It's everything, right, So we can 0:11:17.600 --> 0:11:22.640 replace the Dell PC with a Chinese mainstake Lenovo, which 0:11:22.720 --> 0:11:25.400 is a global market leader number one in PCs. Could 0:11:25.400 --> 0:11:28.360 happen right away, right, except that what's powering the Lenovo PC, 0:11:28.520 --> 0:11:30.400 it's still in next A D six. Okay, you say, 0:11:30.440 --> 0:11:32.080 I don't want to use Intel, Let's go with the 0:11:32.120 --> 0:11:34.640 other option m D which also is American. Then you 0:11:34.679 --> 0:11:37.160 say I don't want to use Microsoft? What are your choices? 0:11:37.200 --> 0:11:39.200 You use a Linux kernel? How many apps are on 0:11:39.320 --> 0:11:41.200 the Linux kernel? How do you how are you going 0:11:41.200 --> 0:11:42.839 to replace Excel? You say no, I'm going to go 0:11:42.920 --> 0:11:46.560 to Google Docs. Wait, that's American too. Details details. So 0:11:47.000 --> 0:11:48.920 you're stuck between a rock and a hard place, and 0:11:48.960 --> 0:11:52.120 it's changes don't come easily and it's going to be painful. 0:11:52.160 --> 0:11:53.800 All right, let's just step back a little bit. It 0:11:53.920 --> 0:11:57.680 appears that we're moving ever so slowly towards a phase 0:11:57.720 --> 0:12:00.640 one type of deal. What's the feeling on Silicon Valley 0:12:00.679 --> 0:12:04.200 about trade just in general, our relationship with China? Is 0:12:04.240 --> 0:12:08.360 it a big, big concern that this thing could go sideways? Look, 0:12:08.440 --> 0:12:12.960 I think that, in my opinion, we're we're pricing in 0:12:13.040 --> 0:12:16.080 for sure, uh, some sort of a deal, some sort 0:12:16.120 --> 0:12:19.920 of a phase one deal. Hopefully that doesn't drop the 0:12:20.000 --> 0:12:22.320 boat too much from current level of tariffs. Number one. 0:12:22.360 --> 0:12:27.400 Number two is from a China Silicon Valley relationship. Again, 0:12:27.440 --> 0:12:29.440 it's one of those don't if you do, don't if 0:12:29.440 --> 0:12:33.440 you don't scenarios. You need them because they're twenty market 0:12:33.520 --> 0:12:36.480 for all of our products and services. You need them 0:12:36.520 --> 0:12:40.640 because they are a supply change, supply chain essential. But 0:12:40.800 --> 0:12:44.000 we also recognize that this is not a healthy relationship 0:12:44.360 --> 0:12:47.520 and that you have to move away from h TO 0:12:47.520 --> 0:12:50.959 to a distributed manufacturing model for example, but that it's 0:12:50.960 --> 0:12:53.920 going to cost more. Well, I will say this has 0:12:53.960 --> 0:12:56.400 been a fascinating conversation and just to leave with this 0:12:56.480 --> 0:13:00.680 tidbet analysts at Jeffrey's estimate that US to knowledge companies 0:13:00.720 --> 0:13:03.040 generating as much as a hundred and fifty billion dollars 0:13:03.040 --> 0:13:05.920 a year in revenues from China, which is the reason 0:13:06.000 --> 0:13:09.520 why trade discussions and any mandate from Beijing should be 0:13:09.559 --> 0:13:12.480 taken seriously, if not perhaps literally, at least if you 0:13:12.480 --> 0:13:14.640 look at the stock price right now, A non street 0:13:14.679 --> 0:13:16.120 of Austin, thank you so much for being with us, 0:13:16.120 --> 0:13:18.520 an nonstret of Austin who saved his Yiddish for before 0:13:18.520 --> 0:13:22.320 the segment, A senior semiconductor and hardware analyst for Bloomberg Intelligence. 0:13:37.360 --> 0:13:40.720 We will certainly go down as a year for risk 0:13:40.960 --> 0:13:45.120 on assets out performance across the board. The question is 0:13:45.120 --> 0:13:47.040 is it time to take a little bit more risk 0:13:47.080 --> 0:13:51.040 as we head into going forward. Right now, let's welcome 0:13:51.120 --> 0:13:55.600 Luca Paolini, Chief strategist for pick Ta Asset Management over 0:13:55.640 --> 0:13:58.839 two billion dollars assets under management, based in London, but 0:13:58.920 --> 0:14:01.400 joining us here on our Bloomberg and Actor broker studio. Look, 0:14:01.520 --> 0:14:04.120 thanks so much for joining us. You have a call 0:14:04.200 --> 0:14:08.400 here where you're overweight emerging markets. So that's saying we 0:14:08.480 --> 0:14:10.640 had a good run in twenty nineteen. I'm willing to 0:14:11.120 --> 0:14:13.920 take a little bit more risk going forward. But actually 0:14:14.000 --> 0:14:16.000 our view is letly different. We think the marketing next 0:14:16.040 --> 0:14:18.760 year we actually struggle a little bit. We think that 0:14:18.800 --> 0:14:22.760 the real trade for next year is more on sector 0:14:22.880 --> 0:14:25.400 and regional allocations. So this year everything that could go 0:14:25.520 --> 0:14:27.920 up went up. Next year, I think we have to 0:14:27.960 --> 0:14:30.440 be most selective, and what we like is either the 0:14:30.480 --> 0:14:34.720 extreme valuation of some markets or actually when we look 0:14:34.760 --> 0:14:39.280 at them, or sectors and regions where we think there 0:14:39.360 --> 0:14:41.600 is a solid earnest girls behind it. When you look 0:14:41.640 --> 0:14:46.440 at value, you cannot avoid a conclusion that emerging markets Europe, 0:14:46.960 --> 0:14:50.520 Japanese a different story, offer much better value than the US. 0:14:50.560 --> 0:14:52.760 And so we think that this is where the value is. 0:14:52.800 --> 0:14:56.480 Emerging markets Europe, even the UK, and much less in 0:14:56.520 --> 0:14:58.680 the US. This is interesting. I'm thinking about it, and 0:14:58.720 --> 0:15:03.280 I'm wondering whether it's actually accurate that everything has gone 0:15:03.320 --> 0:15:06.080 up that's been riskings. We've seen the triple cs like behind, 0:15:06.360 --> 0:15:09.840 and we have seen emerging markets like behind in part 0:15:10.000 --> 0:15:12.920 because people have been concerned and showing some discretion. So 0:15:13.000 --> 0:15:16.880 which areas within emerging market do you think people have 0:15:17.000 --> 0:15:19.400 been leaving behind more than they showed? Right? And there 0:15:19.440 --> 0:15:21.880 has to be a fundamental backdrop that supports this view 0:15:21.880 --> 0:15:23.320 as well, Right, Yeah, I think when you look at 0:15:23.360 --> 0:15:27.480 emerging markets, let's say two critical or key driving emerging 0:15:27.480 --> 0:15:32.479 market performance is actually the dollar and global growth, especially 0:15:32.520 --> 0:15:35.280 if especially emerging market growth. So what we see, and 0:15:35.320 --> 0:15:37.360 maybe we're wrong on this, we expect the dollars to 0:15:37.400 --> 0:15:39.480 pick and the reason why the dollar is going to 0:15:39.520 --> 0:15:42.880 struggle next year is simple. Until recently, the US economy 0:15:43.000 --> 0:15:45.800 was significantly outperformed. The FAT was acting a rate when 0:15:45.840 --> 0:15:48.480 everybody was cutting rates. Now you're in a situation when 0:15:48.520 --> 0:15:51.880 the FAT is cutting rates like everybody else where. US grows. 0:15:51.920 --> 0:15:53.600 It's not very different from Europe. This court is going 0:15:53.680 --> 0:15:55.520 to be one percent one point five, so there is 0:15:55.520 --> 0:15:57.760 a convergence of growth, and the dollar is twenty percent 0:15:57.800 --> 0:15:59.480 one expense. So we assume the dollar is going to 0:15:59.560 --> 0:16:02.240 go down and global growth is weak, but I think 0:16:02.280 --> 0:16:05.000 we start to see some kind of signal stabilization that's 0:16:05.040 --> 0:16:07.840 normally a good combination from the emerging markets. And obviously 0:16:07.840 --> 0:16:10.800 the evaluation is also very attractive. So within emerging markets, 0:16:10.840 --> 0:16:13.920 are there certain markets you like more than others? We've 0:16:13.920 --> 0:16:16.840 had some interesting performance Brazil and some others in Latin 0:16:16.880 --> 0:16:19.960 America VERSUS Eastern Europe for example, Actually we continue to 0:16:20.040 --> 0:16:22.840 prefer Russia. Russia has been if you look at the 0:16:22.840 --> 0:16:24.840 past two years, been the best market in two years 0:16:24.840 --> 0:16:27.160 in a row. And Russia actually as upper from the 0:16:27.240 --> 0:16:29.000 US is ninety six, believe it or not in the 0:16:29.000 --> 0:16:31.600 other terms, so we continue to be lived in Russia. 0:16:31.680 --> 0:16:35.000 Emerging Asia is also interesting because the evaluation and if 0:16:35.040 --> 0:16:38.680 you have any kind of um let's say c as 0:16:38.760 --> 0:16:41.280 far in terms of trade war and distabilization in growth, 0:16:41.280 --> 0:16:44.200 Emerging Asia actually would do much better on bonds. Russian 0:16:44.240 --> 0:16:47.720 born and Mexican bonds by far the best opportunities. And 0:16:47.720 --> 0:16:50.240 how do you like to get access or exposure to 0:16:50.360 --> 0:16:53.840 these to these nations that basically local currency dead or 0:16:53.920 --> 0:16:57.000 is it equities, or we prefer, as I said, we 0:16:57.320 --> 0:17:00.920 for Russia and Mexico We like local cacy bonds because 0:17:01.240 --> 0:17:04.280 you have the advantage of having a significant or let's 0:17:04.280 --> 0:17:06.960 say rear rates roughly three or four percent and under 0:17:07.040 --> 0:17:10.160 value currency and central bank accuntney rates. So the upside 0:17:10.200 --> 0:17:13.080 for bonds emerging markets from the currency and form. From 0:17:13.080 --> 0:17:16.080 the equity side, Asia is much more interesting, you know, Korean, 0:17:16.240 --> 0:17:19.480 So it actually looks actually quite quite quite cheap, considering 0:17:19.560 --> 0:17:22.359 that we mad just about to see some subidization global growth. 0:17:22.880 --> 0:17:25.960 You say like financials, that's not a widely held view. 0:17:26.119 --> 0:17:28.040 Folks walking through the door here, tell us about your 0:17:28.080 --> 0:17:30.679 thoughts on the financials. I have to say that meeting 0:17:30.760 --> 0:17:34.560 quite a few clients, quite a few attempted to buy 0:17:34.560 --> 0:17:37.480 into financials. But financials, like Japan in the last way, 0:17:37.560 --> 0:17:40.439 every time you get excited about it, you tend to 0:17:40.440 --> 0:17:43.240 make a mistake. So now the question about financial is 0:17:43.280 --> 0:17:45.040 really what are the kid drivers they could have is 0:17:45.080 --> 0:17:48.080 Bonniels and basically the mark. So let's say financials do 0:17:48.240 --> 0:17:50.760 well when when bonnie Els and market are going up. 0:17:50.760 --> 0:17:53.080 This year, market is going up, but actually bonnie Els hasn't, 0:17:53.520 --> 0:17:56.080 so we expected Bonnials to start going up next year. 0:17:56.359 --> 0:17:58.920 And if this is this this is true, well all 0:17:59.040 --> 0:18:04.480 the value kind of cyclical value stocks, financials, energy mining 0:18:04.840 --> 0:18:07.240 can actually offer the potentially is a tactical code. Though 0:18:07.640 --> 0:18:10.760 I wouldn't personally invest in financials over the next five years, 0:18:10.760 --> 0:18:12.280 but over the next six or one month I think 0:18:12.320 --> 0:18:14.080 could be could be a good trade. What about the 0:18:14.200 --> 0:18:16.000 US equity is broadly a lot of people have been 0:18:16.000 --> 0:18:18.000 saying that that's still going to remain the performer. Do 0:18:18.000 --> 0:18:20.639 you agree? No, I think I think the prom that 0:18:20.720 --> 0:18:22.439 with the with US eecurities is that there is no 0:18:22.560 --> 0:18:25.960 question the US companies a much more profitable better around 0:18:25.960 --> 0:18:28.440 the European Japanese one. We all know that that's that's 0:18:28.720 --> 0:18:31.520 no news. I have a promin though, on in terms 0:18:31.560 --> 0:18:34.959 of ernest growth, which is basically flat. Margins have picked, 0:18:35.320 --> 0:18:38.040 wage growth is picking up. We are probably towards the 0:18:38.160 --> 0:18:39.879 end of the business second, and you see that in 0:18:39.920 --> 0:18:43.440 the curve. Default rates in a lot of indicators and 0:18:43.440 --> 0:18:45.720 and the in evaluation see continue to be quite expensive. 0:18:45.720 --> 0:18:48.480 So I think I personally the US we'll start to 0:18:48.520 --> 0:18:51.720 want to perform next year, especially in dollar terms. We 0:18:52.000 --> 0:18:56.359 respect the dollar to to decline real quick, treasury else rising. 0:18:56.560 --> 0:18:58.360 We have two percent for the end of next year, 0:18:58.400 --> 0:19:01.000 so a marginal increase notch, but you know you're not 0:19:01.000 --> 0:19:02.600 gonna make a lot of money with once next year. 0:19:02.640 --> 0:19:05.000 Now twenty more seconds. I'm just wondering, what did you 0:19:05.000 --> 0:19:08.480 have for breakfast? Uh? Three cross on if you believe 0:19:08.480 --> 0:19:10.280 it or not? Three al Mont cross on at four 0:19:10.280 --> 0:19:12.280 o'clock because it's some kind of a jel leg issue. 0:19:13.200 --> 0:19:17.359 Three croissants cross on three one must have been tiny 0:19:17.400 --> 0:19:21.040 because I I don't think so, but he must be 0:19:21.119 --> 0:19:23.080 a marathon runner. Thank you so much for being with us. 0:19:23.359 --> 0:19:27.480 Really a wonderful information. Luca Paolini. He is chief strategistic peaked, 0:19:27.520 --> 0:19:30.479 A asset management with more than two hundred billion dollars 0:19:30.560 --> 0:19:35.720 under management normally in London today gracing our interactive Broger studios. 0:19:50.119 --> 0:19:53.680 We've had the Opeque plus meeting. They are instituting a 0:19:53.840 --> 0:19:57.000 further production cuts. We've already gotten me Saudi a Ramco 0:19:57.080 --> 0:19:59.719 I p O, if you could call it that. Going forward, 0:20:00.080 --> 0:20:04.240 the balance of oil prices be determined by supply or demand. 0:20:04.400 --> 0:20:06.280 That is one of the key questions joining us now 0:20:06.480 --> 0:20:09.639 Regina Mayor. She has global energy head for KPMG based 0:20:09.680 --> 0:20:12.280 in Houston, Regina. I want to start there with the 0:20:12.359 --> 0:20:16.640 supply demand side because Honestly, for the most of this year, Uh, 0:20:16.840 --> 0:20:19.320 the demand side was driving things, and we're seeing that 0:20:19.359 --> 0:20:21.879 again today with the prices dipping just a bit on 0:20:22.080 --> 0:20:26.840 the heels of trade uncertainty going into will the supply 0:20:26.960 --> 0:20:30.479 side start to take the helm. I think the supply 0:20:30.520 --> 0:20:34.760 side is going to take be taken into um being 0:20:34.840 --> 0:20:39.120 factored in largely because the market likes negative signals when 0:20:39.160 --> 0:20:41.639 it comes to oil price. So given that we have 0:20:42.160 --> 0:20:46.760 extensive supply overproduction numbers that are coming out, and especially 0:20:46.800 --> 0:20:49.439 for Q one of next year, then we're seeing supply 0:20:49.520 --> 0:20:52.240 factored into the downward pressure on the price. I see 0:20:52.280 --> 0:20:55.159 supply and demand when they have an impact, it's a 0:20:55.200 --> 0:20:58.280 downward pressure, which is very frustrating for the industry overall. 0:20:58.320 --> 0:21:00.000 But I'm in a very barished mood when it comes 0:21:00.000 --> 0:21:03.119