1 00:00:00,080 --> 00:00:12,960 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Ley. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:28,080 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg YEA, 5 00:00:33,240 --> 00:00:35,360 Speaker 1: what is going on in the market. It feels like 6 00:00:35,360 --> 00:00:37,600 Speaker 1: we're going back to January. The VIX has a ten handle, 7 00:00:37,680 --> 00:00:41,040 Speaker 1: the SMP five is just points away from a record high. 8 00:00:41,159 --> 00:00:42,680 Speaker 1: To discuss you want to us here in New York 9 00:00:42,760 --> 00:00:46,280 Speaker 1: is David Kotok, Cumbled Advisers, Chief investment officer and co 10 00:00:46,479 --> 00:00:49,040 Speaker 1: found a Good morning to David. Good morning John. It's 11 00:00:49,040 --> 00:00:52,520 Speaker 1: a pleasure to be here and we back at January. Well, 12 00:00:52,560 --> 00:00:55,240 Speaker 1: it certainly looks like it you just described it, but 13 00:00:55,440 --> 00:01:00,280 Speaker 1: remember February follows January, and we'll see what this next 14 00:01:00,320 --> 00:01:02,760 Speaker 1: two months it's going to bring. In January February, we 15 00:01:02,840 --> 00:01:05,800 Speaker 1: explored the concept with people like yourself as to whether 16 00:01:05,800 --> 00:01:07,880 Speaker 1: we were going to go into a new trading regime, 17 00:01:07,880 --> 00:01:11,320 Speaker 1: and you market regime of high volatility, lower returns. Is 18 00:01:11,360 --> 00:01:13,560 Speaker 1: that where we're at? And if we are, why are 19 00:01:13,560 --> 00:01:15,520 Speaker 1: we going back to a ten on the vix at 20 00:01:15,520 --> 00:01:19,160 Speaker 1: a record handy SMP five. Well, I remember that discussion 21 00:01:19,240 --> 00:01:22,480 Speaker 1: here along with a bunch of other folks who had 22 00:01:22,600 --> 00:01:26,640 Speaker 1: during that period of time and felt the same way. 23 00:01:27,600 --> 00:01:32,200 Speaker 1: One thing is different now. Trade is now war not 24 00:01:32,480 --> 00:01:38,080 Speaker 1: even threatened. Rhetoric number two. All the promises that Peter 25 00:01:38,160 --> 00:01:41,080 Speaker 1: Navarro made there will be no retaliation, there will be 26 00:01:41,160 --> 00:01:44,760 Speaker 1: no penalties, everybody's gonna have a negotiation. I think that 27 00:01:44,880 --> 00:01:49,760 Speaker 1: was March are proven wrong. And every single day we 28 00:01:49,840 --> 00:01:55,360 Speaker 1: get another anecdote of the effects of trade war and 29 00:01:55,440 --> 00:01:58,040 Speaker 1: how bad this can be. Ken lang Owned did an 30 00:01:58,040 --> 00:02:04,720 Speaker 1: interview here yesterday. Yeah, and he's right, he's got well here. 31 00:02:04,720 --> 00:02:08,360 Speaker 1: I mean he's trade words. We're headed for trouble. All 32 00:02:08,400 --> 00:02:11,920 Speaker 1: the warnings of history say so. And we now have 33 00:02:12,040 --> 00:02:16,720 Speaker 1: an administration which is entrenched in this policy and doesn't 34 00:02:16,720 --> 00:02:19,760 Speaker 1: have a way out. It's trying to do a bilateral 35 00:02:19,800 --> 00:02:22,200 Speaker 1: deal with Mexico. Then it's going to try to co 36 00:02:22,360 --> 00:02:27,600 Speaker 1: opt in Canada when it comes to China. I think 37 00:02:28,240 --> 00:02:33,400 Speaker 1: this adversary is patient, doesn't have our political issues, has 38 00:02:33,440 --> 00:02:39,400 Speaker 1: studied us exceptionally well, and is advancing faster than we are. 39 00:02:39,440 --> 00:02:43,640 Speaker 1: I read about how the rollout at five G in 40 00:02:43,800 --> 00:02:51,000 Speaker 1: China is light years ahead of the United States, and 41 00:02:51,080 --> 00:02:53,800 Speaker 1: you say to yourself, if China's gonna have this massive 42 00:02:53,919 --> 00:02:57,079 Speaker 1: bandwidth and roll out, and we're going to be busy 43 00:02:57,560 --> 00:03:02,360 Speaker 1: imposing tariffs and getting retalied. They were tariffs on soybeans 44 00:03:02,400 --> 00:03:06,320 Speaker 1: and lobsters, what does the matter with us? Okay, the 45 00:03:06,440 --> 00:03:08,240 Speaker 1: Good Morning I had to find the red button folks 46 00:03:08,280 --> 00:03:11,519 Speaker 1: on New good Morning. David um, if that's true, what 47 00:03:11,639 --> 00:03:13,800 Speaker 1: do I do with my investments? I mean you at 48 00:03:13,840 --> 00:03:17,560 Speaker 1: Ohio last night with a suburban vote radically changed from 49 00:03:17,600 --> 00:03:21,040 Speaker 1: the GOP traditional alliable. You've got all the Yanks with China. 50 00:03:21,240 --> 00:03:25,000 Speaker 1: You and John have just voiced. Does it change Cumberland 51 00:03:25,160 --> 00:03:30,959 Speaker 1: Advisors investment approach? Well, it has, and in that in 52 00:03:31,080 --> 00:03:34,480 Speaker 1: the US portfolios with et F portfolios, we are now 53 00:03:34,560 --> 00:03:38,160 Speaker 1: focused domestically. We are focused on small and mid caps. 54 00:03:38,440 --> 00:03:42,600 Speaker 1: We are staying away from international exposure which is at 55 00:03:42,760 --> 00:03:45,680 Speaker 1: risk to trade war. And we have a cash reserve. 56 00:03:46,280 --> 00:03:49,920 Speaker 1: And in the in the bond side, the treasury is 57 00:03:50,040 --> 00:03:54,280 Speaker 1: being flattened and suppressed by a tax effect which expires 58 00:03:54,400 --> 00:03:57,119 Speaker 1: on the fift September. Let's see what the yield curve 59 00:03:57,200 --> 00:04:00,640 Speaker 1: looks like. Are you gonna make like effort through there 60 00:04:00,640 --> 00:04:02,400 Speaker 1: when the dog days of August? Are you gonna make 61 00:04:02,440 --> 00:04:05,840 Speaker 1: your gold this year? A fishing two two days? That's 62 00:04:05,880 --> 00:04:09,200 Speaker 1: your record is kind of tough. I'll get a little 63 00:04:09,240 --> 00:04:11,120 Speaker 1: tired of my arms. So you moved to Florida to 64 00:04:11,200 --> 00:04:13,360 Speaker 1: do that? I get the idea what you saw in 65 00:04:13,400 --> 00:04:17,320 Speaker 1: Ohio last night? Is that gonna happen in Florida? Are 66 00:04:17,440 --> 00:04:21,039 Speaker 1: you gonna have the suburban voters of Florida walk away 67 00:04:21,080 --> 00:04:24,960 Speaker 1: from the GOP? Mr? Trump? I think that's an interesting question. 68 00:04:25,640 --> 00:04:28,880 Speaker 1: The congressman in my district where I live in Sarisoda's 69 00:04:29,000 --> 00:04:32,680 Speaker 1: Verne Buchanan, I think seven or eight term Republican. He's 70 00:04:32,760 --> 00:04:37,080 Speaker 1: running ads, walking down the street, holding hands with his granddaughter. 71 00:04:37,200 --> 00:04:41,360 Speaker 1: He doesn't mention Trump, he doesn't mention Republicans. He is 72 00:04:41,680 --> 00:04:45,240 Speaker 1: now worried. He's had a reason to be worried. So 73 00:04:45,440 --> 00:04:47,680 Speaker 1: then how does that affect your I mean, Phararell wants 74 00:04:47,720 --> 00:04:50,520 Speaker 1: to know this. Farrell, you don't understand John Farrell is 75 00:04:50,520 --> 00:04:53,680 Speaker 1: sleeping under a park bench in Central Park. If Sterling 76 00:04:53,720 --> 00:05:00,840 Speaker 1: goes to and he's wiped out, I know, though, so 77 00:05:00,960 --> 00:05:04,040 Speaker 1: much for Franzy summer place in Italy. But but what 78 00:05:04,200 --> 00:05:06,839 Speaker 1: I want to know is does all this mumbo jumbo 79 00:05:06,880 --> 00:05:09,400 Speaker 1: the John and I talked about every day on politics, 80 00:05:09,800 --> 00:05:13,279 Speaker 1: does it affect what we do in investment? I think 81 00:05:13,360 --> 00:05:16,760 Speaker 1: it raises risk profiles. I don't care where the vix goes. 82 00:05:16,880 --> 00:05:22,800 Speaker 1: It's a contemporaneous indicator. It has no forecast power. Everybody, Well, 83 00:05:23,279 --> 00:05:26,000 Speaker 1: if there's no distortion in a treasury curve, you would 84 00:05:26,040 --> 00:05:28,520 Speaker 1: look at the flatness of the curve and you would 85 00:05:28,560 --> 00:05:31,720 Speaker 1: say there's a message here. But we now find in 86 00:05:31,839 --> 00:05:36,320 Speaker 1: this tax code change that the purchases of strips are 87 00:05:36,440 --> 00:05:41,080 Speaker 1: consuming a great deal of the monthly action of the 88 00:05:41,200 --> 00:05:44,479 Speaker 1: thirty year bond. And it's because of a tax code 89 00:05:44,600 --> 00:05:49,760 Speaker 1: change which will expire on September. Anybody who's any corporation 90 00:05:49,800 --> 00:05:53,800 Speaker 1: has got to define benefit pension plan that's underfunded as 91 00:05:53,920 --> 00:05:58,720 Speaker 1: huge incentives right now today to buy long strips. They 92 00:05:58,760 --> 00:06:01,280 Speaker 1: get paid for doing so in a big way. Do 93 00:06:01,320 --> 00:06:02,560 Speaker 1: you know what I thought got lost in all the 94 00:06:02,600 --> 00:06:06,280 Speaker 1: tests the noise yesterday? Tom was Pimco and Dan Iverson 95 00:06:06,560 --> 00:06:09,279 Speaker 1: possibly one of the most talented portfolio managers on the planet, 96 00:06:09,640 --> 00:06:13,120 Speaker 1: turning cautious and defensive. This is where the sequent fund. Yeah, 97 00:06:15,560 --> 00:06:18,240 Speaker 1: Dan is a fantastic PM with a huge track record 98 00:06:18,600 --> 00:06:21,080 Speaker 1: over the last few years, and he has taken the 99 00:06:21,160 --> 00:06:24,000 Speaker 1: funds for a more defensive, cautious stance, and he says 100 00:06:24,080 --> 00:06:27,800 Speaker 1: the following um, the populist parties have already gained traction 101 00:06:27,839 --> 00:06:29,840 Speaker 1: across the globe. The major central banks are trying to 102 00:06:29,839 --> 00:06:32,240 Speaker 1: step away from accommodation they've provided for the markets for 103 00:06:32,320 --> 00:06:35,000 Speaker 1: many years. Their influence has been quickly replaced by that 104 00:06:35,120 --> 00:06:39,240 Speaker 1: of politics. His view, the fund's view for both equity 105 00:06:39,240 --> 00:06:41,760 Speaker 1: and fixed income investors, we think this means of returns 106 00:06:41,960 --> 00:06:45,000 Speaker 1: and unfortunately higher volatility. Now that might not be the 107 00:06:45,040 --> 00:06:47,600 Speaker 1: story of the morning, but that's the story they're anticipating. 108 00:06:47,960 --> 00:06:50,320 Speaker 1: And you know fixed income really really well, David, So 109 00:06:50,560 --> 00:06:52,800 Speaker 1: right now, the way that PIMCO would describe it is 110 00:06:52,880 --> 00:06:55,559 Speaker 1: that you can quite simply expose yourself to two pools 111 00:06:55,600 --> 00:06:58,599 Speaker 1: of assets. A pall of assets leverage to economic growth 112 00:06:58,640 --> 00:07:01,760 Speaker 1: here in the United States, more back securities, corporate credit. 113 00:07:02,040 --> 00:07:04,360 Speaker 1: Then a pool of assets that give you a hedge. Inky, 114 00:07:04,360 --> 00:07:07,160 Speaker 1: so we get it down to it, highly liquid treasuries, 115 00:07:07,520 --> 00:07:10,520 Speaker 1: things like treasury bills, et cetera, et cetera. How do 116 00:07:10,600 --> 00:07:13,040 Speaker 1: you want to balance yourself between those two poles? Of 117 00:07:13,120 --> 00:07:16,240 Speaker 1: assets through the duration of the ship. You just described 118 00:07:16,280 --> 00:07:19,880 Speaker 1: the classic bond manager's barbell. That's what we call it 119 00:07:20,040 --> 00:07:23,320 Speaker 1: as opposed to a ladder. If you're in a ladder today, 120 00:07:23,880 --> 00:07:27,600 Speaker 1: you are taking on risk. You think you're reducing risk 121 00:07:27,640 --> 00:07:30,960 Speaker 1: with the ladder, and you're failing. You're taking on risk 122 00:07:31,040 --> 00:07:33,280 Speaker 1: with the letter. You need a barbel. Now, how do 123 00:07:33,360 --> 00:07:38,280 Speaker 1: you do the barbell? Peace? Long, peace, short and in between. 124 00:07:38,360 --> 00:07:41,920 Speaker 1: You measure the duration of the whole, You measure the 125 00:07:42,080 --> 00:07:45,560 Speaker 1: yield curve for its sweet spot, and you match it. 126 00:07:46,160 --> 00:07:49,280 Speaker 1: Only you match it with a barbell, not linearly or 127 00:07:49,320 --> 00:07:52,280 Speaker 1: a ladder. That is a lot of technical jargon on like, 128 00:07:52,880 --> 00:07:55,280 Speaker 1: but but that's how you do it. What are we 129 00:07:55,360 --> 00:07:57,680 Speaker 1: doing in the barbell? When this curve gets fat like this? 130 00:07:58,480 --> 00:08:01,080 Speaker 1: You shorten and build one side of the bar bill 131 00:08:01,240 --> 00:08:03,840 Speaker 1: larger than the other, leans, lodge hard the fish. You're 132 00:08:03,880 --> 00:08:05,920 Speaker 1: out there with a bunch of people fishing. Yeah, we 133 00:08:06,040 --> 00:08:09,920 Speaker 1: had fifty folks. We had great conversation, divided views. Of course. 134 00:08:10,080 --> 00:08:12,240 Speaker 1: You see the shot of me and John Farron. We 135 00:08:12,320 --> 00:08:16,360 Speaker 1: went sturgeon fishing this weekend. Your sturgeon went viral? Did 136 00:08:16,480 --> 00:08:19,280 Speaker 1: go viral? Yes? And we and we decided that the 137 00:08:19,400 --> 00:08:22,040 Speaker 1: sturgeon is about the size of what we use for 138 00:08:22,160 --> 00:08:26,880 Speaker 1: bait fish. But Leans close. You're Leans Lodge. We're over Patrosian. 139 00:08:27,200 --> 00:08:32,640 Speaker 1: It's called vodka. You guys are permanently and invited. You 140 00:08:32,720 --> 00:08:35,439 Speaker 1: would be ten years if you came up. There's no 141 00:08:35,679 --> 00:08:38,559 Speaker 1: UK equivalent. It is so far in the middle of nowhere. 142 00:08:39,120 --> 00:08:41,480 Speaker 1: Did you go by private like one of those planes 143 00:08:41,559 --> 00:08:45,000 Speaker 1: with the pontoon things on it? You get to the 144 00:08:45,080 --> 00:08:47,640 Speaker 1: lake plane you want, You're gonna hold my hand. If 145 00:08:47,640 --> 00:08:51,200 Speaker 1: I do that, I will. I'll carry your bag. David Kotalk, 146 00:08:51,280 --> 00:08:55,520 Speaker 1: thank you so much, coming that with a bottle of Carosotic. 147 00:08:55,679 --> 00:08:58,440 Speaker 1: I'll be out there in the grumming canoe taking dramamine. 148 00:08:59,200 --> 00:09:15,040 Speaker 1: David Kotalk, humble of advisors. Why don't you bring in 149 00:09:15,080 --> 00:09:19,640 Speaker 1: our next guest and idiosyncratic em Pabla Goldberg blank Rock, 150 00:09:19,720 --> 00:09:21,439 Speaker 1: head of a merchant market. Dad, I'm sure, Pablo A. 151 00:09:21,440 --> 00:09:23,800 Speaker 1: You're gonna tell me some of these issues are idiosyncratic. 152 00:09:23,920 --> 00:09:30,559 Speaker 1: But Turkey, Argentina, Brazil, it's sounding gap, isn't it. Well? 153 00:09:30,640 --> 00:09:32,800 Speaker 1: I think they we need to separate these. I think 154 00:09:32,840 --> 00:09:36,240 Speaker 1: that there are idiosyncredic vulnerabilities to global factors. If you 155 00:09:36,280 --> 00:09:38,360 Speaker 1: want to put it like that. I think Argentina and 156 00:09:38,440 --> 00:09:40,680 Speaker 1: Turkey belong to the same camp. Brazil is a little 157 00:09:40,679 --> 00:09:43,040 Speaker 1: bit of a different story. Um, what is the trigger 158 00:09:43,120 --> 00:09:47,160 Speaker 1: to Argentina and Turkey? The trigger is you tighter financial 159 00:09:47,240 --> 00:09:50,959 Speaker 1: conditions globally. In that sense, it is not indiosy incredic issue. 160 00:09:51,120 --> 00:09:53,520 Speaker 1: What it is idiosyncratic is that these two countries have 161 00:09:53,720 --> 00:09:56,800 Speaker 1: been um, you know, in out of balance for for 162 00:09:57,000 --> 00:09:59,920 Speaker 1: some time, and now the market has indicated that is 163 00:10:00,000 --> 00:10:03,839 Speaker 1: time for reckoning. And the difference is that Argentina has 164 00:10:04,240 --> 00:10:06,280 Speaker 1: bidden the bullet, I mean, has gone to the I 165 00:10:06,480 --> 00:10:09,480 Speaker 1: m F, has tried to interest rates significantly, is lad 166 00:10:09,559 --> 00:10:12,480 Speaker 1: in the economy to the adjudgment, but Turkey is not. 167 00:10:12,840 --> 00:10:15,480 Speaker 1: And that's why now the pressure is on Turkey. Still 168 00:10:15,520 --> 00:10:18,000 Speaker 1: a wall of silence over the last forty eight hours, Pamp. 169 00:10:18,200 --> 00:10:21,119 Speaker 1: What are you expecting to say from the Turkish authorities 170 00:10:21,160 --> 00:10:24,400 Speaker 1: just in terms of policy response? Well, I think that 171 00:10:24,600 --> 00:10:27,600 Speaker 1: we're the Turkish authorities are working in three different camps 172 00:10:27,720 --> 00:10:30,400 Speaker 1: right that The first one is try to um you 173 00:10:30,480 --> 00:10:32,520 Speaker 1: know the case they go to gone to Washington. They're 174 00:10:32,520 --> 00:10:35,120 Speaker 1: trying to deal with this issue of the sanctions, because 175 00:10:35,200 --> 00:10:38,560 Speaker 1: that's quite important because for a country that has large 176 00:10:38,640 --> 00:10:43,240 Speaker 1: external funding needs, anything that can affect, you know, the 177 00:10:43,320 --> 00:10:48,560 Speaker 1: willingness of foreign lenders to roll over that debt would 178 00:10:48,559 --> 00:10:50,960 Speaker 1: be a complication. And of course the process of sanctions 179 00:10:51,440 --> 00:10:54,920 Speaker 1: or potential sanctions are the deterrent potentially to a cross 180 00:10:54,960 --> 00:10:57,360 Speaker 1: border landing. So that's one area of work that they're doing. 181 00:10:57,440 --> 00:11:01,319 Speaker 1: The other area of work is are they're gonna is 182 00:11:01,360 --> 00:11:04,079 Speaker 1: the central band gonna be racing grates who you know, 183 00:11:04,160 --> 00:11:06,440 Speaker 1: get ahead of the curve. And and and there's where 184 00:11:06,520 --> 00:11:09,160 Speaker 1: we are not being so much advantced yet. Look, give 185 00:11:09,240 --> 00:11:12,080 Speaker 1: us a clinic on any nation. In this case Turkey, 186 00:11:12,720 --> 00:11:15,839 Speaker 1: it has to debt. They have debt in Turkish lira 187 00:11:16,480 --> 00:11:18,679 Speaker 1: and they have debt in the US dollar. Both are 188 00:11:18,720 --> 00:11:23,480 Speaker 1: going up and yield priced down, yields dramatically higher on 189 00:11:23,600 --> 00:11:27,439 Speaker 1: Turkish debt. What does that mean for Turkish finance and 190 00:11:27,559 --> 00:11:32,240 Speaker 1: Turkish banks? Let me let me do another cut on 191 00:11:32,360 --> 00:11:34,000 Speaker 1: top of the one you've done. You you've done the 192 00:11:34,080 --> 00:11:36,160 Speaker 1: cut by currency. Let me do a cut by borrower. 193 00:11:36,320 --> 00:11:39,240 Speaker 1: Right there, sovereign dead, basically dead of the government. And 194 00:11:39,320 --> 00:11:42,960 Speaker 1: there's that of the corporate sector being banks and corporate 195 00:11:43,040 --> 00:11:46,679 Speaker 1: now financial corporate, where Turkey is heavily in debted, it 196 00:11:46,880 --> 00:11:49,720 Speaker 1: is in dollars. So that's one part of the quadrant 197 00:11:49,840 --> 00:11:51,160 Speaker 1: and the other part of the quadram that is the 198 00:11:51,640 --> 00:11:53,719 Speaker 1: actually corporate sector, the one that is so in that 199 00:11:53,880 --> 00:11:56,960 Speaker 1: it's not the government, it is the corporate sector. Um. 200 00:11:57,080 --> 00:11:59,200 Speaker 1: And the banks are in between, right. The banks are 201 00:11:59,280 --> 00:12:02,800 Speaker 1: the US who are just bringing dollars from abroad and 202 00:12:02,960 --> 00:12:06,280 Speaker 1: lending to the guys inside. So where we need to 203 00:12:06,360 --> 00:12:08,839 Speaker 1: put an eye on is on the corporate sector and 204 00:12:08,880 --> 00:12:11,640 Speaker 1: the rollovers. Now, if they fail to roll over and 205 00:12:11,720 --> 00:12:14,719 Speaker 1: they have payment problems, that's kind of eventually knock on 206 00:12:14,760 --> 00:12:16,680 Speaker 1: the banks. And that's why the banks have been suffering. 207 00:12:16,880 --> 00:12:19,880 Speaker 1: Do we see that within whatever is the short term 208 00:12:19,960 --> 00:12:23,280 Speaker 1: paper market in Turkey is the you know, the proverbial 209 00:12:23,360 --> 00:12:25,760 Speaker 1: canary in the coal mine. Is it some form of 210 00:12:25,840 --> 00:12:30,160 Speaker 1: Turkish library or bank commercial paper? Well, I mean if 211 00:12:30,160 --> 00:12:33,960 Speaker 1: you look at the sort of short term borrowing costs 212 00:12:34,000 --> 00:12:38,200 Speaker 1: in Turkey, of course they've gone up. We've seen uh, 213 00:12:38,360 --> 00:12:40,960 Speaker 1: sort of cross currency swaps going up. We have seen 214 00:12:41,600 --> 00:12:45,480 Speaker 1: spreads of turkeysh banks gone up. So that pressure is 215 00:12:45,520 --> 00:12:49,080 Speaker 1: pain felt through a system. Um. The question is, uh, 216 00:12:49,559 --> 00:12:52,640 Speaker 1: we are the point where women have some failures or 217 00:12:52,679 --> 00:12:54,880 Speaker 1: not and so far if you look at the data, 218 00:12:55,360 --> 00:12:57,760 Speaker 1: and now granted that the data has a couple of 219 00:12:57,880 --> 00:13:01,080 Speaker 1: months lag, but even an eg total and still whatevers 220 00:13:01,080 --> 00:13:04,040 Speaker 1: are going through. I think investors are worried will they 221 00:13:04,120 --> 00:13:07,400 Speaker 1: stop right or not? And that's probably where we have 222 00:13:07,800 --> 00:13:10,439 Speaker 1: not a daily information and that's bring everybody to be 223 00:13:10,440 --> 00:13:12,280 Speaker 1: a little apprehensive. So the other thing that I think 224 00:13:12,360 --> 00:13:14,599 Speaker 1: many people are worried about whether these technical issues just 225 00:13:14,679 --> 00:13:17,440 Speaker 1: become real fundamental issues paplow when you have short term 226 00:13:17,480 --> 00:13:21,720 Speaker 1: interest rates this high in countries like Argentina and essentially 227 00:13:21,720 --> 00:13:23,880 Speaker 1: a response will have to follow in a country like Turkey. 228 00:13:24,320 --> 00:13:26,720 Speaker 1: Essentially that's going to choke off growth, and that's going 229 00:13:26,800 --> 00:13:29,160 Speaker 1: to choke off NIX and then the whole thing just 230 00:13:29,240 --> 00:13:31,280 Speaker 1: sort of ends up in this big loop that it's 231 00:13:31,360 --> 00:13:33,439 Speaker 1: very hard to get out of. Pamplow. To what extent 232 00:13:33,559 --> 00:13:37,679 Speaker 1: were entering that kind of cycle, we you know, you're 233 00:13:37,760 --> 00:13:40,360 Speaker 1: totally right, and and this is an exercise of adjustment, 234 00:13:40,480 --> 00:13:42,400 Speaker 1: right and and and the big question when you go 235 00:13:42,480 --> 00:13:44,640 Speaker 1: into an exercise of adjustment is how to distribute the 236 00:13:44,720 --> 00:13:47,120 Speaker 1: cost of the adjustment. And this is what we are 237 00:13:47,679 --> 00:13:51,239 Speaker 1: seeing debated in Turkey today. I mean, in case of Argentina. 238 00:13:51,720 --> 00:13:54,160 Speaker 1: It is clear that the fiscal side is doing it adjustment, 239 00:13:54,400 --> 00:13:59,880 Speaker 1: but also the costumers are doing the adjustment on higher utility, terrests, etcetera. 240 00:14:00,440 --> 00:14:04,040 Speaker 1: Um the general the corporate sector through lower growth. UH. 241 00:14:04,480 --> 00:14:07,480 Speaker 1: In Turkey, the question is will the government fight back 242 00:14:07,559 --> 00:14:10,400 Speaker 1: the necessary adjustment as they did into thousand and seventeen. 243 00:14:10,480 --> 00:14:13,800 Speaker 1: Remember they did a massive push up in credit into 244 00:14:13,840 --> 00:14:17,559 Speaker 1: thousand and seventeen. Turkey grew seven percent when this economy 245 00:14:17,679 --> 00:14:21,400 Speaker 1: was already heavily dollarly indebted and with a large account deficits. 246 00:14:21,600 --> 00:14:23,320 Speaker 1: So are they going to try to the fire gravity 247 00:14:23,400 --> 00:14:26,360 Speaker 1: for longer, which actually stretches the court which you could 248 00:14:26,400 --> 00:14:29,760 Speaker 1: eventually break or not, or they're gonna buy the bullet 249 00:14:30,040 --> 00:14:31,880 Speaker 1: and just go through the slower and right now and 250 00:14:31,960 --> 00:14:34,920 Speaker 1: trying to distribute the judgment. The banks are in generally 251 00:14:35,040 --> 00:14:37,160 Speaker 1: solid and they will have good provisions to cover some 252 00:14:37,320 --> 00:14:39,440 Speaker 1: of the not performing loans that are going to go 253 00:14:39,600 --> 00:14:42,080 Speaker 1: up as the economy slow down as you indicate it 254 00:14:42,600 --> 00:14:44,960 Speaker 1: um so, but they usually are you going to do 255 00:14:45,080 --> 00:14:46,920 Speaker 1: it or you're just gonna fly back and you're gonna 256 00:14:46,920 --> 00:14:50,200 Speaker 1: make the situation worse. And I think that's where the 257 00:14:50,320 --> 00:14:52,760 Speaker 1: market is still debating because we're not seeing the right 258 00:14:52,800 --> 00:14:57,360 Speaker 1: reaction function by the government yet. What how does contagions start? 259 00:14:57,480 --> 00:14:59,680 Speaker 1: I mean, if we have all these events here there, 260 00:15:00,120 --> 00:15:02,480 Speaker 1: if you look back to Ecuador in Mexico two or 261 00:15:02,560 --> 00:15:06,040 Speaker 1: three times, and we all remember ninety eight, how does 262 00:15:06,160 --> 00:15:11,640 Speaker 1: contagion happen? We all remember ninety eight very well, unfortunately, 263 00:15:11,880 --> 00:15:16,880 Speaker 1: and contagion, contagion. The first thing about contagients happened, uh 264 00:15:17,400 --> 00:15:20,440 Speaker 1: when you spected in the list. So that's that's one 265 00:15:20,480 --> 00:15:23,360 Speaker 1: of the problems with contagion, right and uh and and 266 00:15:23,640 --> 00:15:28,640 Speaker 1: this happens when investors start to pair uh different countries 267 00:15:28,800 --> 00:15:31,720 Speaker 1: by sort of where they wulnerability lize and and and 268 00:15:31,840 --> 00:15:34,320 Speaker 1: then you guys start to separate the winners and losers. 269 00:15:34,720 --> 00:15:36,320 Speaker 1: I think that we have had a little bit of 270 00:15:36,400 --> 00:15:39,200 Speaker 1: contagion before in emerging markets, kind of when the dollars 271 00:15:39,200 --> 00:15:42,440 Speaker 1: started to move higher in April and May, we started 272 00:15:42,480 --> 00:15:45,160 Speaker 1: to see contagion. We saw some contingent from Argentina to 273 00:15:45,200 --> 00:15:48,080 Speaker 1: other countries. If anything, you could say that Turkey, you know, 274 00:15:48,480 --> 00:15:51,000 Speaker 1: having a minded on vulnerabilities, it is a little bit 275 00:15:51,080 --> 00:15:54,240 Speaker 1: of the effect of the contagion coming from Argentina. But 276 00:15:54,280 --> 00:15:56,840 Speaker 1: we're not seeing contingent from Turkey to the rest. At 277 00:15:56,880 --> 00:16:01,160 Speaker 1: this point, um, there's one you know line that is 278 00:16:01,600 --> 00:16:03,640 Speaker 1: women through some of the countries. That is the issue 279 00:16:03,680 --> 00:16:06,640 Speaker 1: of sanctions right today to look at the Russian ruble 280 00:16:07,080 --> 00:16:12,080 Speaker 1: is under pressure on expectations of potential higher sanctions to Russia. 281 00:16:12,160 --> 00:16:15,400 Speaker 1: So that is a new access that investors are dealing 282 00:16:15,480 --> 00:16:18,560 Speaker 1: with that all of a sudden from Washington, that could 283 00:16:18,600 --> 00:16:22,880 Speaker 1: be something that will impair the liquidity of some of 284 00:16:22,960 --> 00:16:25,160 Speaker 1: the markets. That will prevent some place to play in 285 00:16:25,240 --> 00:16:28,800 Speaker 1: significant markets. So that is things that could bring contagients 286 00:16:28,920 --> 00:16:31,160 Speaker 1: the public Goldberg, thank you. So it's the black Rock folks. 287 00:16:31,200 --> 00:16:34,120 Speaker 1: This will be out on our podcast on Spotify, Apple 288 00:16:34,240 --> 00:16:38,040 Speaker 1: Music as well. Public Goldberg just brilliant there on e 289 00:16:38,240 --> 00:16:58,440 Speaker 1: M as well, without cyphering its economics. And I want 290 00:16:58,480 --> 00:17:01,000 Speaker 1: to rip up the script here. Just spend a good 291 00:17:01,040 --> 00:17:05,119 Speaker 1: amount of time getting a clinic from Dr Weinberg on 292 00:17:05,280 --> 00:17:09,880 Speaker 1: why we can't clear markets anymore. Carl Weinberg is legendary 293 00:17:10,000 --> 00:17:12,520 Speaker 1: for his experience with many others and I think of 294 00:17:12,560 --> 00:17:16,320 Speaker 1: Bill Rhodes a City group over the years in saying 295 00:17:16,480 --> 00:17:20,560 Speaker 1: to troubled countries, you know what, you made some mistakes. 296 00:17:20,880 --> 00:17:23,800 Speaker 1: Here's how you work it out, and you usually work 297 00:17:23,840 --> 00:17:27,400 Speaker 1: it out, folks, by extending debt. Maybe there's a cram 298 00:17:27,520 --> 00:17:31,000 Speaker 1: down where somebody takes a loss up front to make 299 00:17:31,119 --> 00:17:34,640 Speaker 1: all benefit down the road. There's an interest rate workout 300 00:17:34,760 --> 00:17:38,960 Speaker 1: in other creative adventures as well. Carl, what happened? Why 301 00:17:39,080 --> 00:17:43,639 Speaker 1: can't we do this anymore? Well, um, we can. Uh. 302 00:17:43,880 --> 00:17:47,480 Speaker 1: The politics of it have become increasingly difficult, and a 303 00:17:47,600 --> 00:17:51,200 Speaker 1: lot of countries, even countries that still remain committed to 304 00:17:51,240 --> 00:17:54,800 Speaker 1: globalism within their own houses, are not willing to commit 305 00:17:54,880 --> 00:17:59,160 Speaker 1: domestic resources to international events. And I'm talking specifically about 306 00:17:59,240 --> 00:18:03,000 Speaker 1: Europe here where Um, while the nations of Europe presumably 307 00:18:03,040 --> 00:18:06,480 Speaker 1: are united in the Union, where they presumably share common 308 00:18:06,560 --> 00:18:09,399 Speaker 1: interests in common causes and think of themselves as Europeans 309 00:18:09,560 --> 00:18:15,919 Speaker 1: rather than Germans, Dutch or Italians, Nonetheless, when countries like Italy, Greece, Portugal, Spain, 310 00:18:16,119 --> 00:18:21,080 Speaker 1: Ireland get into financial difficulty, the politics are unfavorable to 311 00:18:21,200 --> 00:18:25,520 Speaker 1: burden sharing. Is part of this that we've eliminated, for 312 00:18:25,600 --> 00:18:30,440 Speaker 1: the most part fixed currencies, in that a disciplinarian was 313 00:18:30,520 --> 00:18:35,720 Speaker 1: the reality of selected fixed currencies which forced the politicians 314 00:18:35,840 --> 00:18:39,439 Speaker 1: hands well. I think that the recent Europe's not working. 315 00:18:39,960 --> 00:18:43,200 Speaker 1: Isn't the fixed currencies, it's all the things to support 316 00:18:43,280 --> 00:18:46,680 Speaker 1: fixed currencies that have not been implemented. The Europeans, to 317 00:18:46,760 --> 00:18:50,200 Speaker 1: their credit, have been making big strides recently, right better 318 00:18:50,280 --> 00:18:54,840 Speaker 1: late than never on things like banking union, on deposit insurance, 319 00:18:54,880 --> 00:18:59,480 Speaker 1: across borders, on shared risks, on burden sharing, on shared responsibilities, 320 00:18:59,720 --> 00:19:02,600 Speaker 1: but still have a way to go on fiscal responsibilities, 321 00:19:03,040 --> 00:19:05,439 Speaker 1: which is what makes it possible for the United States 322 00:19:05,520 --> 00:19:09,320 Speaker 1: to have a Massachusetts in New York and Arkansas and 323 00:19:09,400 --> 00:19:12,399 Speaker 1: the West Virginia all within the same nation, in the 324 00:19:12,480 --> 00:19:15,919 Speaker 1: same banking system without having to worry about capital flows 325 00:19:16,119 --> 00:19:19,240 Speaker 1: or currency adjustment. Do you worry? Do you worry about? 326 00:19:19,760 --> 00:19:22,639 Speaker 1: I guess this new theology of politics trumping all no 327 00:19:22,800 --> 00:19:27,439 Speaker 1: pun intended with a pacific rim or with idiosyncratic stories 328 00:19:27,520 --> 00:19:29,879 Speaker 1: like Argentina and Turkey. I mean they don't have the 329 00:19:29,920 --> 00:19:33,520 Speaker 1: europe excuse, do they? No, they don't, and there we have. 330 00:19:33,760 --> 00:19:35,840 Speaker 1: But the same basic thing is there. You know, the 331 00:19:35,920 --> 00:19:40,760 Speaker 1: domestic um response to any crisis, you know, is to um, 332 00:19:41,040 --> 00:19:43,480 Speaker 1: you know, blame the foreigner for its shut down on 333 00:19:43,640 --> 00:19:47,440 Speaker 1: foreign transactions and um, you know, try to clamp down 334 00:19:47,600 --> 00:19:49,880 Speaker 1: on the parts of the boat that are leaking, which 335 00:19:50,000 --> 00:19:53,119 Speaker 1: is uh maybe a first instance a good thing, but 336 00:19:53,520 --> 00:19:56,200 Speaker 1: when the credit flows or across borders, you have to 337 00:19:56,320 --> 00:19:59,359 Speaker 1: look across the border for cooperation and for a solution. 338 00:19:59,400 --> 00:20:02,479 Speaker 1: You can't close well well said, and it shows your 339 00:20:02,520 --> 00:20:07,119 Speaker 1: experience the phrase cop cooperation and solution. Are we not 340 00:20:07,400 --> 00:20:10,080 Speaker 1: solving some of these debt workouts because they're really not 341 00:20:10,320 --> 00:20:14,920 Speaker 1: that big of a crisis. Don't tell that to the Greeks, no, 342 00:20:15,119 --> 00:20:17,320 Speaker 1: And they certainly are very real to the countries that 343 00:20:17,400 --> 00:20:20,119 Speaker 1: are involved. And I think the most relevant example right 344 00:20:20,160 --> 00:20:23,920 Speaker 1: now is Italy, and I think everything that we've experienced 345 00:20:24,000 --> 00:20:26,959 Speaker 1: recently in Europe and as well in emerging markets, even 346 00:20:27,000 --> 00:20:29,400 Speaker 1: though Italy is not an emerging market comes to bear 347 00:20:29,440 --> 00:20:32,119 Speaker 1: when we think about Italy. We have a crushing public 348 00:20:32,200 --> 00:20:34,879 Speaker 1: sector debt, we have crushing private sector debt. We have 349 00:20:35,000 --> 00:20:38,760 Speaker 1: cross border cumulative balance of payments obligations which are hidden 350 00:20:38,800 --> 00:20:41,200 Speaker 1: in the e CBS a clearing system, the so called 351 00:20:41,240 --> 00:20:46,600 Speaker 1: target too. And then we have domestic politics where repuviation 352 00:20:46,720 --> 00:20:50,720 Speaker 1: of relationships and obligations seems to be the populous factor 353 00:20:50,760 --> 00:20:53,040 Speaker 1: that's winning the votes. So a government that comes in 354 00:20:53,160 --> 00:20:55,840 Speaker 1: on that kind of vote can't do the right thing 355 00:20:56,480 --> 00:20:59,560 Speaker 1: because it undermines its political base. Well, how do you 356 00:20:59,640 --> 00:21:02,560 Speaker 1: reas on to the idea and this moves on from 357 00:21:02,760 --> 00:21:06,600 Speaker 1: debt workouts, how do you respond to the idea of 358 00:21:06,920 --> 00:21:10,320 Speaker 1: Asia that learned their lessons in and they have a 359 00:21:10,359 --> 00:21:14,080 Speaker 1: bigger piggy bank and all that. How do you respond 360 00:21:14,119 --> 00:21:15,720 Speaker 1: to that? I mean, is that do you buy the 361 00:21:15,800 --> 00:21:19,680 Speaker 1: story that they're stealed for crisis? Yeah? I mean you 362 00:21:19,760 --> 00:21:22,240 Speaker 1: have to respond to that story on seven different levels. Right, 363 00:21:22,280 --> 00:21:25,040 Speaker 1: First of all, crises have always occurred. They're never going 364 00:21:25,160 --> 00:21:28,520 Speaker 1: to stop occurring. Their part of the human condition, all right, 365 00:21:28,600 --> 00:21:31,840 Speaker 1: that things get hot, they overheat, and then somebody has 366 00:21:31,920 --> 00:21:34,280 Speaker 1: to pay for it. So you're never going to eliminate crisis, 367 00:21:34,320 --> 00:21:37,040 Speaker 1: no matter how smart or sophisticated you are. But the 368 00:21:37,160 --> 00:21:39,200 Speaker 1: real story that I think you allude to, which is 369 00:21:39,280 --> 00:21:41,720 Speaker 1: the important one, which is that the growth in the world, 370 00:21:41,800 --> 00:21:44,600 Speaker 1: the economic growth, the population in the world, the money 371 00:21:44,640 --> 00:21:47,359 Speaker 1: in the world, the investment of the world, the future 372 00:21:47,359 --> 00:21:51,200 Speaker 1: of the world is now pivoted towards Asia. And Asia 373 00:21:51,280 --> 00:21:53,520 Speaker 1: is the new place where the action is for investors, 374 00:21:53,800 --> 00:21:57,040 Speaker 1: both for its rewards and for its risks. Because, as 375 00:21:57,119 --> 00:21:59,000 Speaker 1: we know, for us to have the investor risks can 376 00:21:59,040 --> 00:22:02,720 Speaker 1: breed opportunities. Carl Weinberg, thank you so much, greatly appreciate it. 377 00:22:02,800 --> 00:22:06,000 Speaker 1: This morning, Carl Weinberg with my frequency economics with a 378 00:22:06,040 --> 00:22:10,560 Speaker 1: little more thoughtful time constrained, uh idea from what we 379 00:22:10,680 --> 00:22:25,680 Speaker 1: see in the heat and all that, Fim Fox and 380 00:22:25,760 --> 00:22:28,840 Speaker 1: Tom Keenan. Now I really enjoyed Gina smiling with us 381 00:22:28,840 --> 00:22:32,000 Speaker 1: the Blueberg Economics and Bloomberg News, and she's written up 382 00:22:32,040 --> 00:22:34,680 Speaker 1: a bang up story about one of the major trends. 383 00:22:34,720 --> 00:22:36,600 Speaker 1: And you know, just to set this up for you, 384 00:22:37,200 --> 00:22:40,280 Speaker 1: Villain Bowder turned to me one day and he said, Tom, 385 00:22:40,400 --> 00:22:44,800 Speaker 1: this is secret and you can't say publicly, but we 386 00:22:44,920 --> 00:22:48,720 Speaker 1: have hired Catherine Man. And I felt so wonderful to 387 00:22:48,800 --> 00:22:51,639 Speaker 1: see Kathy Man out of brand Ice, who went to O. E. C. D. 388 00:22:52,280 --> 00:22:55,159 Speaker 1: With one of the giant books on trade and one 389 00:22:55,200 --> 00:22:58,639 Speaker 1: of the real theories of dysfunction China in the U 390 00:22:58,880 --> 00:23:02,159 Speaker 1: s to to leave the shop at City Group, tell 391 00:23:02,240 --> 00:23:05,600 Speaker 1: us what you learned about women as chief economists. So 392 00:23:05,720 --> 00:23:09,200 Speaker 1: women are increasingly becoming private sector chief economists, which is 393 00:23:09,320 --> 00:23:11,960 Speaker 1: a big deal because this his for a long time. 394 00:23:12,480 --> 00:23:15,680 Speaker 1: Just spend one of those ceilings that women have a 395 00:23:15,760 --> 00:23:18,119 Speaker 1: lot have had a lot of trouble cracking, and so 396 00:23:18,640 --> 00:23:22,320 Speaker 1: we're seeing Kathy Man at City Group, michelmar Cusin, and 397 00:23:25,800 --> 00:23:30,119 Speaker 1: Marian Stanley. Yeah, just across that, really across the globe, 398 00:23:30,160 --> 00:23:32,520 Speaker 1: we're seeing these women get these great, big jobs Janet 399 00:23:32,520 --> 00:23:35,800 Speaker 1: Henry at HSBC and so one of the things that's 400 00:23:35,840 --> 00:23:39,959 Speaker 1: really interesting is the women who are getting elevated now 401 00:23:40,040 --> 00:23:44,120 Speaker 1: they have these stellar resumes, they just have amazing histories 402 00:23:44,160 --> 00:23:47,240 Speaker 1: and economics, and they're really helping to elevate women sort 403 00:23:47,280 --> 00:23:49,800 Speaker 1: of behind them as well. They're sort of pulling women 404 00:23:49,880 --> 00:23:52,040 Speaker 1: up the career ladder. So I think that is a 405 00:23:52,119 --> 00:23:54,720 Speaker 1: positive sign for sort of gender equity in this field. 406 00:23:55,400 --> 00:23:57,680 Speaker 1: There sounds like there's a negative here too. There's like 407 00:23:57,760 --> 00:24:00,680 Speaker 1: a butt there's a big but, and that is that 408 00:24:00,760 --> 00:24:03,560 Speaker 1: there's a pipeline issue in economics. You know. I feel like, 409 00:24:04,119 --> 00:24:06,040 Speaker 1: you know, it's great to say we should hire women, 410 00:24:06,080 --> 00:24:08,280 Speaker 1: we should strive for gender equity, but the reality is 411 00:24:08,480 --> 00:24:11,119 Speaker 1: that there aren't as many women going into this field, 412 00:24:11,240 --> 00:24:13,920 Speaker 1: and if you just don't have the folks with the qualifications, 413 00:24:13,960 --> 00:24:16,000 Speaker 1: it's going to be hard to get near anything like 414 00:24:16,080 --> 00:24:18,359 Speaker 1: a quality. It's it's not even a reasonable goal to 415 00:24:18,440 --> 00:24:21,240 Speaker 1: ask banks or central banks to achieve. At this point, 416 00:24:21,720 --> 00:24:24,760 Speaker 1: you describe in your story a conversation that has had 417 00:24:24,800 --> 00:24:29,359 Speaker 1: between head hunters and one particular economists, one of if 418 00:24:29,359 --> 00:24:33,119 Speaker 1: you could just describe that. So I absolutely loved this anecdote. 419 00:24:33,119 --> 00:24:36,040 Speaker 1: So my my colleague Lucy Meekin in the UK talked 420 00:24:36,080 --> 00:24:38,480 Speaker 1: to Janet Henry and Janet was telling her that she 421 00:24:38,640 --> 00:24:42,040 Speaker 1: often gets this call from head hunters and they want 422 00:24:42,080 --> 00:24:44,359 Speaker 1: to hire women, or they want to hire economists, and 423 00:24:44,400 --> 00:24:46,320 Speaker 1: they say, you know, do you know anybody? Do you 424 00:24:46,359 --> 00:24:48,160 Speaker 1: know anyone would be good? And she's like, well, I'm 425 00:24:48,200 --> 00:24:50,159 Speaker 1: not interested, but here's a list. She'll give them a 426 00:24:50,240 --> 00:24:53,080 Speaker 1: list and then they'll say, but do you know any women? 427 00:24:53,880 --> 00:24:56,920 Speaker 1: And she just finds this happening again and again. And 428 00:24:57,080 --> 00:24:59,359 Speaker 1: I heard the same thing when I talked to Mary Daley, 429 00:24:59,480 --> 00:25:03,120 Speaker 1: who is senior vice president for research at San Francisco. 430 00:25:03,160 --> 00:25:06,119 Speaker 1: Fat can we roop up the script? Ms? Smile like 431 00:25:06,280 --> 00:25:09,840 Speaker 1: Folks is one of my former interns, and wandered through 432 00:25:09,880 --> 00:25:14,639 Speaker 1: the door. Brilliant tell us your experienced, Gina of just 433 00:25:14,840 --> 00:25:18,960 Speaker 1: what you described about economists, which is everybody's looking for 434 00:25:19,119 --> 00:25:21,160 Speaker 1: bright women. You came out of what was the school. 435 00:25:21,240 --> 00:25:23,600 Speaker 1: It was a small school, in the South Chapel Hill, 436 00:25:24,040 --> 00:25:26,520 Speaker 1: Chapel Hill. Excuse me, it's Chapel Hill, not U n 437 00:25:26,600 --> 00:25:31,320 Speaker 1: C Called Chapel Hill. Anyways, you came out and how 438 00:25:31,440 --> 00:25:34,320 Speaker 1: did you get I mean the rap here is women 439 00:25:34,400 --> 00:25:39,280 Speaker 1: don't take micro women don't do econometrics Bologney because you 440 00:25:39,520 --> 00:25:43,040 Speaker 1: did it. So what was it like for you being 441 00:25:43,119 --> 00:25:46,679 Speaker 1: in the trenches like Janet Andrey getting as smart as 442 00:25:46,720 --> 00:25:49,200 Speaker 1: you are? Yeah, you know so, I actually feel like 443 00:25:49,480 --> 00:25:52,879 Speaker 1: my experience is really emblematic of what we can You know. So, 444 00:25:53,080 --> 00:25:57,760 Speaker 1: I came from a small town, working class family in Pennsylvania, 445 00:25:58,000 --> 00:25:59,920 Speaker 1: and when I went to school, I never would have 446 00:26:00,040 --> 00:26:02,080 Speaker 1: occurred to me to study economics. I didn't think that 447 00:26:02,160 --> 00:26:04,800 Speaker 1: was a thing girls did. And so I study journalism 448 00:26:04,920 --> 00:26:07,200 Speaker 1: and I had a couple of really good professors who 449 00:26:07,280 --> 00:26:10,640 Speaker 1: really pushed me to look into economics, to look into accounting. 450 00:26:11,080 --> 00:26:14,719 Speaker 1: And then Tom Cantiliano, who runs the Bloomberg's internship program. 451 00:26:14,800 --> 00:26:18,520 Speaker 1: Tom Cantiliano really did me a solid and forcing me 452 00:26:18,600 --> 00:26:21,840 Speaker 1: to take accounting. Um, and I think those things. And 453 00:26:22,080 --> 00:26:24,520 Speaker 1: then obviously Tom, working with you when I was an intern, 454 00:26:24,640 --> 00:26:27,080 Speaker 1: you sort of forced me to read a book every 455 00:26:27,119 --> 00:26:29,640 Speaker 1: week about economic I would yell, just read a book 456 00:26:29,720 --> 00:26:32,280 Speaker 1: and you know, like some of the great interns we've had, 457 00:26:32,440 --> 00:26:35,040 Speaker 1: and I heard I heard the voice Colby Smith would 458 00:26:35,080 --> 00:26:37,480 Speaker 1: have been the same thing. Yeah, And so I think 459 00:26:37,560 --> 00:26:39,680 Speaker 1: I think that is consistent with what we heard and 460 00:26:39,720 --> 00:26:42,680 Speaker 1: reporting this story, which is women sort of you know, 461 00:26:43,040 --> 00:26:45,560 Speaker 1: often don't think of this as a field that is 462 00:26:45,760 --> 00:26:48,000 Speaker 1: open to them, but then mentors get them into it 463 00:26:48,080 --> 00:26:50,000 Speaker 1: and sort of pull them up the ladder. And I 464 00:26:50,119 --> 00:26:53,440 Speaker 1: think that that is what we see happening now. I 465 00:26:53,520 --> 00:26:57,159 Speaker 1: was gonna say, maybe they're just smarter. I don't know 466 00:26:57,240 --> 00:26:59,880 Speaker 1: if that's true, but I do think there's this intes 467 00:27:00,040 --> 00:27:03,640 Speaker 1: saying sort of untapped aptitude for economics um that women 468 00:27:03,720 --> 00:27:06,520 Speaker 1: can bring to the table, but that maybe isn't introduced 469 00:27:06,560 --> 00:27:09,120 Speaker 1: to them at early levels like high school or even 470 00:27:09,160 --> 00:27:11,399 Speaker 1: early college. But it doesn't not have to do with 471 00:27:11,520 --> 00:27:14,280 Speaker 1: the notion that and I've heard this, so I can't 472 00:27:14,320 --> 00:27:17,719 Speaker 1: really there's no documentation where men really operate because they 473 00:27:17,800 --> 00:27:21,719 Speaker 1: want to be right, they themselves want to be right, 474 00:27:22,160 --> 00:27:27,280 Speaker 1: whereas women are more interested in finding the correct solution 475 00:27:27,600 --> 00:27:32,080 Speaker 1: and it's not about them. So that is a really 476 00:27:32,160 --> 00:27:36,200 Speaker 1: interesting observation, only in the sense that it's actually really 477 00:27:36,320 --> 00:27:39,080 Speaker 1: squares with something. One of the women I was talking 478 00:27:39,240 --> 00:27:42,280 Speaker 1: to set for the story. So she Tatyana Avalova at 479 00:27:42,280 --> 00:27:46,280 Speaker 1: the Columbia University runs undergraduate Women in Economics and the 480 00:27:46,480 --> 00:27:48,680 Speaker 1: whole point of this program is to encourage folks to 481 00:27:48,760 --> 00:27:51,840 Speaker 1: study economics from from a younger age. And one thing 482 00:27:51,960 --> 00:27:54,280 Speaker 1: she says is we see women going into micro going 483 00:27:54,359 --> 00:27:57,320 Speaker 1: into applied and the reason is when you talk to them, 484 00:27:57,480 --> 00:28:00,960 Speaker 1: they can see the outcomes immediately. They like to see 485 00:28:01,040 --> 00:28:03,960 Speaker 1: that effect. Yeah, major shout out there to Susan Ah, 486 00:28:04,480 --> 00:28:06,480 Speaker 1: the first woman to win the John Bates Clark Award, 487 00:28:06,520 --> 00:28:09,560 Speaker 1: and we are honor Bloomberg to do the first interview 488 00:28:09,640 --> 00:28:11,879 Speaker 1: with her. Then can we shout out another woman in 489 00:28:12,000 --> 00:28:16,080 Speaker 1: economics who I'm sure I'm forgetting many We have to 490 00:28:16,160 --> 00:28:19,520 Speaker 1: mention Julia Cornado of BMP Perry but when she was 491 00:28:19,640 --> 00:28:23,159 Speaker 1: named head of North American Economics or BMP Parry. But 492 00:28:23,280 --> 00:28:25,800 Speaker 1: that was a huge deal, huge deal at the French 493 00:28:25,880 --> 00:28:28,160 Speaker 1: bank that would do that. Ginna, this is the most 494 00:28:28,200 --> 00:28:30,240 Speaker 1: important article to day. Thank you. So what are you 495 00:28:30,320 --> 00:28:33,160 Speaker 1: reading right now? I was just telling you I'm reading 496 00:28:33,240 --> 00:28:36,240 Speaker 1: a Nissim telebs foo by randomness again for one of 497 00:28:36,440 --> 00:28:38,880 Speaker 1: my classes at n y Uh. Do we agree she 498 00:28:38,960 --> 00:28:43,440 Speaker 1: needs to get a life? Yeah? Okay, Gina smile like 499 00:28:43,520 --> 00:29:00,960 Speaker 1: Bloomberg News. I'm Bloomberg Economics. Tom Keane, do you know 500 00:29:01,080 --> 00:29:03,600 Speaker 1: how you can go from growing up on a farm 501 00:29:03,680 --> 00:29:08,400 Speaker 1: in Iowa to running Bowing? You need to go to 502 00:29:08,560 --> 00:29:13,040 Speaker 1: Iowa State University. Yeah. That helps the crack Aerospace program 503 00:29:13,280 --> 00:29:16,800 Speaker 1: you do. And you know, one of the ways we're 504 00:29:16,800 --> 00:29:19,360 Speaker 1: going to learn all about this is with David Rubinstein 505 00:29:19,520 --> 00:29:22,320 Speaker 1: and the David Rubinstein Peer to peer Preview. It's brought 506 00:29:22,360 --> 00:29:25,960 Speaker 1: to you by Wells Fargo Technology Banking. Wells Fargo helps 507 00:29:26,080 --> 00:29:29,800 Speaker 1: business leaders find their moments of truth. A little outside 508 00:29:29,880 --> 00:29:33,720 Speaker 1: perspective can create a lot of clarity. And here with 509 00:29:33,880 --> 00:29:37,120 Speaker 1: his perspective is David Rubinstein. David, what was it like 510 00:29:37,560 --> 00:29:41,479 Speaker 1: interviewing the chief executive of Bowing? Did he explain how 511 00:29:41,600 --> 00:29:44,640 Speaker 1: he went from that farm to uh to be the 512 00:29:44,720 --> 00:29:47,680 Speaker 1: head of Bowing? To grow up on a farm and 513 00:29:47,760 --> 00:29:49,960 Speaker 1: milk the cows as you would expect in Iowa, and 514 00:29:50,080 --> 00:29:53,720 Speaker 1: then he got an internship at boeing Um one summer 515 00:29:53,800 --> 00:29:55,880 Speaker 1: and then ultimately got a job there when he graduated 516 00:29:55,920 --> 00:29:58,480 Speaker 1: from college. He's been at the company thirty three years, 517 00:29:59,000 --> 00:30:02,840 Speaker 1: but he's only fifties are years old. Amazingly, he is 518 00:30:02,920 --> 00:30:05,840 Speaker 1: able to increase the value of a company quite considerably 519 00:30:05,880 --> 00:30:08,560 Speaker 1: in three years. The stock is up about a hundred 520 00:30:08,560 --> 00:30:11,360 Speaker 1: and forty nine since he's been the CEO. But the 521 00:30:11,400 --> 00:30:13,640 Speaker 1: amazing part is not only that he's done that, but 522 00:30:13,760 --> 00:30:17,440 Speaker 1: he rides about a hundred and fifty miles a week 523 00:30:17,760 --> 00:30:21,880 Speaker 1: on his bike, about two hours a day. He's relentless, 524 00:30:22,080 --> 00:30:24,560 Speaker 1: and uh, you know, when you interview him, you realize 525 00:30:24,560 --> 00:30:26,480 Speaker 1: you might be able to overweight yourself because when you 526 00:30:26,520 --> 00:30:28,920 Speaker 1: look at him, he is so thin. He's in great shape. 527 00:30:28,960 --> 00:30:31,360 Speaker 1: But he says that riding a bike two hours a 528 00:30:31,440 --> 00:30:33,800 Speaker 1: day clears his mind, and obviously it must work. So 529 00:30:33,920 --> 00:30:36,840 Speaker 1: I begun to think maybe I should try that. Well, 530 00:30:36,880 --> 00:30:39,760 Speaker 1: it maybe would help everybody when they get on those 531 00:30:39,800 --> 00:30:43,120 Speaker 1: Boeing aircraft because the airlines have been cramming more and 532 00:30:43,200 --> 00:30:46,280 Speaker 1: more seats into those fuselages. What does he say about 533 00:30:46,320 --> 00:30:48,480 Speaker 1: the future of air traveler, We're gonna have to spend 534 00:30:48,560 --> 00:30:53,480 Speaker 1: so much time in the air Well, only the people 535 00:30:53,480 --> 00:30:55,160 Speaker 1: in the face of the earth have ever been on 536 00:30:55,240 --> 00:30:57,600 Speaker 1: the airline. It's hard to believe because the people we 537 00:30:57,680 --> 00:31:00,239 Speaker 1: know are flying all the time. But only and other 538 00:31:00,320 --> 00:31:01,959 Speaker 1: people on the face of the earth have ever been 539 00:31:02,000 --> 00:31:05,160 Speaker 1: on an airplane. So he's got a big market. His 540 00:31:05,240 --> 00:31:08,240 Speaker 1: biggest challenge, I think is that he's got a friend 541 00:31:08,280 --> 00:31:10,520 Speaker 1: of me, you might say, in China. He sells a 542 00:31:10,600 --> 00:31:13,880 Speaker 1: lot to China, but ultimately China probably will build its 543 00:31:13,960 --> 00:31:17,360 Speaker 1: own business in the aircraft area. Right now, it's been 544 00:31:17,480 --> 00:31:20,840 Speaker 1: largely a duopoly for the last years or so, which 545 00:31:20,920 --> 00:31:25,000 Speaker 1: is to say Airbus in Europe and and and Boeing 546 00:31:25,120 --> 00:31:28,240 Speaker 1: in the United States. In terms of major airline aircraft. 547 00:31:28,480 --> 00:31:31,200 Speaker 1: Obviously there there planes that are made made by others 548 00:31:31,280 --> 00:31:35,320 Speaker 1: for smaller regional things or for um business jets, but 549 00:31:35,440 --> 00:31:38,360 Speaker 1: those are the two dominant airlines aircraft companies, and I 550 00:31:38,440 --> 00:31:41,640 Speaker 1: suspect China will ultimately become a major one as well. David, 551 00:31:41,880 --> 00:31:46,400 Speaker 1: this guy is maybe more qualified than anyone from the Midwest. 552 00:31:46,480 --> 00:31:50,000 Speaker 1: The fabric of Iowa in Iowa State, on the University 553 00:31:50,000 --> 00:31:54,120 Speaker 1: of Washington and bowing to explain to the President United States, 554 00:31:54,720 --> 00:31:58,960 Speaker 1: how is trade policy? Obviously affects defense in commercial Boeing, 555 00:31:59,360 --> 00:32:02,880 Speaker 1: but Frank, he affects everything else as well. Did he 556 00:32:03,040 --> 00:32:08,400 Speaker 1: discuss the president in our new tariff tax policy? Well, 557 00:32:08,480 --> 00:32:10,560 Speaker 1: he has met with the President from time to time, 558 00:32:10,640 --> 00:32:14,440 Speaker 1: and I think he's been supportive of the President's tax proposal, 559 00:32:14,480 --> 00:32:18,000 Speaker 1: and Boeing was a big proponent of the tax cut. Obviously, 560 00:32:18,480 --> 00:32:21,640 Speaker 1: the tariffs are a different matter. He didn't say what 561 00:32:21,760 --> 00:32:25,240 Speaker 1: he said specifically to the President on a particular tariff, 562 00:32:25,440 --> 00:32:27,560 Speaker 1: but there's no doubt that he doesn't think this is 563 00:32:27,640 --> 00:32:30,640 Speaker 1: probably a great way to proceed. Um But he's not 564 00:32:30,760 --> 00:32:32,920 Speaker 1: a person who tries to seek a lot of public 565 00:32:33,000 --> 00:32:35,840 Speaker 1: attention for his views. He does operate very much in 566 00:32:35,920 --> 00:32:39,320 Speaker 1: the background in some respects, but he's a very charming person. 567 00:32:39,480 --> 00:32:43,840 Speaker 1: He's very um focused on philanthropy. Boeling has dramatically increased 568 00:32:43,920 --> 00:32:47,920 Speaker 1: philanthropy under his leadership. But again, he's very very much 569 00:32:47,960 --> 00:32:49,479 Speaker 1: on top of the job. He worked his way up 570 00:32:49,480 --> 00:32:51,960 Speaker 1: through the defense part of the business, now runs everything. 571 00:32:52,280 --> 00:32:55,840 Speaker 1: What's his style of Ellen Moleley Aerospace out of Kansas, 572 00:32:56,520 --> 00:32:59,800 Speaker 1: Kansas State. Rather, we had a style one ford and 573 00:33:00,000 --> 00:33:04,720 Speaker 1: all that. If you told me he was running a 574 00:33:05,360 --> 00:33:08,160 Speaker 1: agribusiness company, I wouldn't be shocked because he does have 575 00:33:08,320 --> 00:33:11,680 Speaker 1: a farmer kind of mindset in the sense that he's 576 00:33:11,880 --> 00:33:16,040 Speaker 1: he's very modest, unassuming, uh not louduh and and just 577 00:33:16,520 --> 00:33:18,600 Speaker 1: goes ahead and does what he thinks is right. And 578 00:33:19,000 --> 00:33:22,400 Speaker 1: uh salute solitude is something that's important to my guess 579 00:33:22,400 --> 00:33:24,600 Speaker 1: because he rides a bike so much. UM, I just 580 00:33:24,680 --> 00:33:26,360 Speaker 1: don't know how he can do it, but he obviously does. 581 00:33:26,400 --> 00:33:28,040 Speaker 1: A stock has done extremely well in the company is 582 00:33:28,080 --> 00:33:31,120 Speaker 1: not extremely well, David. These are delicate matters, but on 583 00:33:31,240 --> 00:33:35,080 Speaker 1: this historic day, we must ask you first of all 584 00:33:35,400 --> 00:33:39,240 Speaker 1: about if you, Carlisle, have any relationships with Tesla. We 585 00:33:39,280 --> 00:33:42,680 Speaker 1: don't want to step on those. But it's an absolutely 586 00:33:42,760 --> 00:33:45,960 Speaker 1: original morning, David, in my career to see the headlines 587 00:33:46,040 --> 00:33:48,800 Speaker 1: come across, I am familiar with it, but you do 588 00:33:48,960 --> 00:33:51,600 Speaker 1: not have a relationship with the company. I saw it. 589 00:33:52,200 --> 00:33:55,000 Speaker 1: I think it would be an incredible buy out. At 590 00:33:55,080 --> 00:33:58,040 Speaker 1: seventy billion dollars or so, that would be the largest 591 00:33:58,080 --> 00:34:02,400 Speaker 1: buyout ever done pure bio. But we'll see what happens. 592 00:34:02,680 --> 00:34:04,880 Speaker 1: We'll see what happens. But there has to be a 593 00:34:04,960 --> 00:34:11,000 Speaker 1: relationship with owning principal entrepreneur if you will, and his board. 594 00:34:11,520 --> 00:34:15,520 Speaker 1: How would you advise the board and a proper action 595 00:34:15,680 --> 00:34:20,759 Speaker 1: given all the transactions across the David Rubinstein career. While 596 00:34:20,800 --> 00:34:25,239 Speaker 1: the board obviously has to retain UM an independent um 597 00:34:25,719 --> 00:34:28,840 Speaker 1: set of advisors, because if the CEO of a publicly 598 00:34:28,880 --> 00:34:33,320 Speaker 1: traded company is leading a bio, you have some potential conflicts. 599 00:34:33,360 --> 00:34:36,080 Speaker 1: So you'd have to make certain that there's no other 600 00:34:36,320 --> 00:34:39,000 Speaker 1: offer that would come along from somebody other than the CEO, 601 00:34:39,520 --> 00:34:41,839 Speaker 1: and the CEO is going to lead it. The board 602 00:34:41,880 --> 00:34:44,680 Speaker 1: would have to make certain that everything is done fairly 603 00:34:44,840 --> 00:34:47,400 Speaker 1: so that it's not to the advantage just of the CEO. 604 00:34:48,280 --> 00:34:52,560 Speaker 1: David Rubinstein as someone that has an extensive list of 605 00:34:52,640 --> 00:34:59,120 Speaker 1: experience with companies going public, going private, and the operations 606 00:34:59,360 --> 00:35:03,520 Speaker 1: of aarious companies. If one of your portfolio companies c 607 00:35:03,680 --> 00:35:07,000 Speaker 1: e O s who maybe had a fifth of a company, 608 00:35:07,160 --> 00:35:12,239 Speaker 1: came out with a Twitter tweet about a potential UH 609 00:35:12,719 --> 00:35:16,920 Speaker 1: buy out at a specific price during market hours, what 610 00:35:17,080 --> 00:35:22,120 Speaker 1: would be your first call? It would be unusual to 611 00:35:22,160 --> 00:35:24,680 Speaker 1: think that that would happen. I haven't had that experience. 612 00:35:25,080 --> 00:35:27,600 Speaker 1: Carlisle's had hundreds of companies have owned if we've never 613 00:35:27,680 --> 00:35:32,040 Speaker 1: seen something like that, But you know, Mr Musk is 614 00:35:32,040 --> 00:35:34,480 Speaker 1: an unusual person. He's done some things that people didn't 615 00:35:34,520 --> 00:35:38,000 Speaker 1: think could be done before, including creating Tesla for nothing 616 00:35:38,520 --> 00:35:42,719 Speaker 1: and right. But what would you do well? I would 617 00:35:43,320 --> 00:35:45,279 Speaker 1: handle it in a way that would be private. I 618 00:35:45,360 --> 00:35:48,879 Speaker 1: probably wouldn't publicly say what I would do, fair enough, 619 00:35:48,960 --> 00:35:52,760 Speaker 1: David Rubinstein, thank you so much for those Thank you, Tesla, 620 00:35:52,760 --> 00:35:56,000 Speaker 1: and of course David Rubinstein peered up here tonight at 621 00:35:56,080 --> 00:36:06,279 Speaker 1: five pm and ten pm at Bloomberg Radio. Thanks for 622 00:36:06,400 --> 00:36:10,759 Speaker 1: listening to the Bloomberg Surveillance podcast. Subscribe and listen to 623 00:36:10,920 --> 00:36:16,640 Speaker 1: interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. 624 00:36:17,239 --> 00:36:20,520 Speaker 1: I'm on Twitter at Tom Keene before the podcast. You 625 00:36:20,600 --> 00:36:23,959 Speaker 1: can always catch us worldwide. I'm Bloomberg Radio