WEBVTT - Mallaby: U.K. uncertainty will be deep and prolonged

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<v Speaker 1>This is Bloomberg Surveillance because a road that's opened up

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<v Speaker 1>now with the British decision to leave it could need

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<v Speaker 1>to be more prosperous rope. They'll have to navigate a

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<v Speaker 1>political crisis and they'll have to figure out who the

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<v Speaker 1>next prime minister might be, and that's not really clear.

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<v Speaker 1>I think we can think of it as essentially a

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<v Speaker 1>decreasing relationship with economic distance. Bloomberg Surveillance your link to

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<v Speaker 1>the world of economics, finance, and investment on Bloomberg Radio.

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<v Speaker 1>Good morning. It is seven am on Wall Street and

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<v Speaker 1>in Washington, d C. Where Tom Keene and I are

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<v Speaker 1>presenting a special edition of Surveillance, live from the capital

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<v Speaker 1>of the United States. Later in the program, Tom an

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<v Speaker 1>extended interview with former FED Chairman Alan Greenspan about Brexit

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<v Speaker 1>central banks in the American economy. Extraordinary good fortune to

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<v Speaker 1>speak to Chairman Greenspan. You and I know he's been

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<v Speaker 1>cautious for months. I would suggest it's even increased, as

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<v Speaker 1>you can understand when you look at the screen this morning,

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<v Speaker 1>Mike at seven am. You always go through the data.

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<v Speaker 1>Why don't you do that? And I'll jump in with

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<v Speaker 1>a few observations I'll just start with the fact equities

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<v Speaker 1>to tier it is. Uh. It is a down trend

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<v Speaker 1>since the UM volumes started to pick up as more

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<v Speaker 1>people in it to their trading discs. Although um and

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<v Speaker 1>we should notice nowon in London, so people have been

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<v Speaker 1>trading for a while. Uh, it has been more of

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<v Speaker 1>a grind lower, nothing like the plunge on Friday. Chancellor

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<v Speaker 1>of the Exchequer George Osborne out today saying, uh, the

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<v Speaker 1>government has a contingency place in plan to shore up

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<v Speaker 1>the US UK economy, not convincing people. The pound right

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<v Speaker 1>now at one thirty two, ten off its lows, but

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<v Speaker 1>below Friday, and we're on a one handle watch there.

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<v Speaker 1>I mean, the vectors are all in the wrong direction.

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<v Speaker 1>But as Mike says, without the enthusiasm and anks that

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<v Speaker 1>we saw on Friday, the foot Sea is down one

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<v Speaker 1>hundred and two points right now. The volume of European

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<v Speaker 1>shares changing hands almost three times that any day average

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<v Speaker 1>for British equities, more than uh three times as well

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<v Speaker 1>British banks, helping to put the European Bank Index on

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<v Speaker 1>course for its biggest two day drop on record. It

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<v Speaker 1>is now down by seven point two percent on the day,

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<v Speaker 1>and you were mentioning some of the European banks. Deutsche

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<v Speaker 1>Bank getting hammered again, down nine point four percent to

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<v Speaker 1>twelve euros, just just over twelve euros. Let's color that,

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<v Speaker 1>and it just breaking down to a new low twelve

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<v Speaker 1>point one nine on euros. Let's color the trend of

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<v Speaker 1>Deutsche Bank is a proxy for our global Wall Street audience,

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<v Speaker 1>particularly the American audience. In drive time, down we go

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<v Speaker 1>at five am. There was the McKey bounce, There was bounce,

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<v Speaker 1>and then it just didn't happen, and then another bounce.

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<v Speaker 1>Let me get my official Bloomberg surveillance cursor out here.

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<v Speaker 1>At about six eighteen am Wall Street Time Up we

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<v Speaker 1>go a little bit and Mike, as we go to

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<v Speaker 1>the opening of the show, it ain't happening for the

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<v Speaker 1>European banks. Well, let's set it up now for the

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<v Speaker 1>rest of the markets. The stock six hundred is down

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<v Speaker 1>by three percent right now, a little over nine points.

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<v Speaker 1>The decks in Germany is off a hundred and eighty

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<v Speaker 1>points one point nine percent. Here in the U S

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<v Speaker 1>SMP features are off by fourteen seven tenths. It's the

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<v Speaker 1>seven tenths decline for Dow futures there down one seventeen

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<v Speaker 1>and Nasdaki Mani futures are off thirty four points eight

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<v Speaker 1>tenths of eight percent. The Euro trading at one ten

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<v Speaker 1>sixteen right now is down nine tenths. It's been as

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<v Speaker 1>low as one oh nine eighty four. Will keep an

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<v Speaker 1>eye on that. The yen one oh one sixty four

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<v Speaker 1>is weaker still today, and that is in contrast to

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<v Speaker 1>the Nike, which is the one major stock market in

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<v Speaker 1>the world. It was up today by about two point

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<v Speaker 1>four percent, three hundred and fifty seven points ten ure

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<v Speaker 1>no yield in the United States one point four seven percent,

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<v Speaker 1>the five year one even and fifty seven basis points

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<v Speaker 1>for the two year note yield. In the United Kingdom,

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<v Speaker 1>the two year is going for fifteen basis points. In

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<v Speaker 1>the ten year note yield is at nine basis points.

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<v Speaker 1>It's broken tom below one on the day. So the

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<v Speaker 1>question is where do we go from here? Is this

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<v Speaker 1>a tipping point into a greater global slowdown and recession.

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<v Speaker 1>Sebastian Maloby is Senior Fellow for International Economics at the

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<v Speaker 1>Council on Foreign Relations. Sebastian, you are raising that question

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<v Speaker 1>of whether the whole euro Zone whether the whole EU

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<v Speaker 1>and what that means for the global economy, Yes, thank you.

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<v Speaker 1>My sense is really that for the UK economy is

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<v Speaker 1>the extreme uncertainty which has only gotten worth over the

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<v Speaker 1>weekend with term more than both political parties, not just

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<v Speaker 1>the ruling Conservative party. Um. That that uncertainty looks like

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<v Speaker 1>it's going to be deep and it's going to be prolonged.

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<v Speaker 1>And I can't see any other like here than this

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<v Speaker 1>is going to really kill corporate investment, which was already

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<v Speaker 1>done before the vote, and that's going to have knock

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<v Speaker 1>on consequence for the UK economy, and so I'm very

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<v Speaker 1>pessimistic about that. I think when it comes to the

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<v Speaker 1>Euro you've got a very determined central bank which has

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<v Speaker 1>passed the credibility test with Greece more than once and

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<v Speaker 1>held the system together. I think there's going to be

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<v Speaker 1>new stresses and new challenges for the central bank in

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<v Speaker 1>an environment where they used a lot of policy ammunition already. Um.

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<v Speaker 1>But I think you know, you have to look at

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<v Speaker 1>yet the Spanish vote, which the election there could have

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<v Speaker 1>been worth. It could have produced a bigger result left

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<v Speaker 1>wing neo Marxist um. So you need another political shock.

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<v Speaker 1>I think within the euro Zone for this to get

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<v Speaker 1>scary for the European Central Bank that that should reassure

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<v Speaker 1>you a little bit. The Spanish elections, it tells you

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<v Speaker 1>that it isn't a uniform knee jerk populist response to

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<v Speaker 1>what's going on. Right coming off the British bird, there

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<v Speaker 1>were as many as seven countries in the rest of

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<v Speaker 1>the European Union where somebody or other in politics was

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<v Speaker 1>demanding an immediate referendum to copy the British one. The

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<v Speaker 1>question is whether those demands and those pressures UM actually

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<v Speaker 1>produced results. I mean, will that be votes of this

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<v Speaker 1>sort and the one vote there was schedule, which was

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<v Speaker 1>the Spanish election. UM. Europe has sailed through relatively unscathed.

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<v Speaker 1>Sebastian Malby with us as we begin our coverage is

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<v Speaker 1>our Bloomberg surveillance from Washington, brought you by Investco. Investco's

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<v Speaker 1>high conviction factor based strategies could help investors focus on

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<v Speaker 1>a high quality, low volatility and more. Learn more and

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<v Speaker 1>investco dot com slash high Convictions. Sebastian Mailby with us

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<v Speaker 1>with his magnificent book on the head shown Business UH.

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<v Speaker 1>The idea of his work UH in terms of being

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<v Speaker 1>a finalist for the Pulitzer Prize twice, but far more importantly, Sebastia,

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<v Speaker 1>your father, Sir Christopher, as ambassador to Germany UH and

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<v Speaker 1>indeed ambassador to France, you have a continental UK perspective

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<v Speaker 1>as a child, which you've always brought forward in your work.

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<v Speaker 1>The diplomacy here is about dialogue. Well that dialogue, you know.

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<v Speaker 1>The flinty is the word we use right now. Are

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<v Speaker 1>we going to have a flinty dialogue that Sir Christopher

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<v Speaker 1>never saw? I think Sir Christopher, who is now eighty

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<v Speaker 1>years old almost held his birthday will be next week, UM,

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<v Speaker 1>is feeling a bit depressed that his life's work of

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<v Speaker 1>British diplomacy and integration where the rest of the world

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<v Speaker 1>hasn't been delta a very severe setback. UM. I think

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<v Speaker 1>that the problem right now is not whether it's flinty

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<v Speaker 1>or whatever. It's just that there's no not going to

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<v Speaker 1>be any dialogue initially because the interlocutors have no idea

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<v Speaker 1>what they're gonna say. The kind of disarray politically within

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<v Speaker 1>the Leaf camp in Britain is so deep that they

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<v Speaker 1>didn't know what they want do. They want to have

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<v Speaker 1>more migration on a points based system, which is what

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<v Speaker 1>bit of you know, open to the world side of

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<v Speaker 1>their movement wanted or do they want less migration? Do

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<v Speaker 1>they want you know, are they going to take the

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<v Speaker 1>budget savings from sending money to Brussels and spend it

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<v Speaker 1>on the national health service or are they going to

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<v Speaker 1>cut government? Right? But on this Monday morning, when there's

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<v Speaker 1>a Bloomberg headline that Ubrew will not resign, that gets

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<v Speaker 1>my attention explained to us. European federalism. This is not

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<v Speaker 1>Alexander Hamilton's is it. Yeah. I mean the paradox of

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<v Speaker 1>European federalism is that really nobody wants it anymore. Um

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<v Speaker 1>uh you know, I mean the political temperature in Europe

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<v Speaker 1>has gone against it completely. But there's still a kind

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<v Speaker 1>of technocratic logic that says, when you've got a single

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<v Speaker 1>currency for nineteen of the countries, um, they need to

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<v Speaker 1>integrate fiscally, they need to coordinate tax eave and spending

0:08:59.679 --> 0:09:02.720
<v Speaker 1>and bank paid out funds and so forth. And that

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<v Speaker 1>pushes the system towards deeper integration, even when politically it's toxic.

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<v Speaker 1>Can it be done or can you? I guess the question?

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<v Speaker 1>And this is a longer question. We've all got a

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<v Speaker 1>minute left here before we have to take a break.

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<v Speaker 1>We'll come back and explore this even more death, But um,

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<v Speaker 1>can the integration of Europe on a trade and business

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<v Speaker 1>basis continue as it is? Or do they have to

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<v Speaker 1>do something like go back to individual currencies so that

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<v Speaker 1>they don't have this physically important question. You can't go

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<v Speaker 1>forward and you can't go back. I mean, that's the

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<v Speaker 1>truth of it. Exiting the Euro once you've denominated every

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<v Speaker 1>single contract in your economy and euros is so catastrophically

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<v Speaker 1>painful that Greece looked at that and decided not to

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<v Speaker 1>do it. I did it twice, so I mean going

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<v Speaker 1>back out of the Euro is prohibitively painful, but going

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<v Speaker 1>forward into integration is not something people are ready to do.

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<v Speaker 1>So I mean we're stuck, and that is I mean,

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<v Speaker 1>I think that the upshot of that is a long

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<v Speaker 1>period of muddle and slow growth in sort of the

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<v Speaker 1>Japanization of the Ursine. Well, we'll come back with Sebastian Melboy.

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<v Speaker 1>I was gonna put a very blunt question to you, Sebastian,

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<v Speaker 1>which I'll hold until we come back. Tom Keene and

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<v Speaker 1>I are live in Washington, d C a special edition

0:10:18.240 --> 0:10:20.720
<v Speaker 1>of Bloomberg Surveillance today as we keep track of what

0:10:20.880 --> 0:10:23.640
<v Speaker 1>is happening in the United States and around the world

0:10:24.080 --> 0:10:27.160
<v Speaker 1>post brexit. Tom Peter dear Terris from our data team

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<v Speaker 1>has a fascinating bit of information here. The last time

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<v Speaker 1>the pound was at this level in the SMP was

0:10:34.880 --> 0:10:38.040
<v Speaker 1>one eight three. Well, that would be a bear market

0:10:38.080 --> 0:10:40.040
<v Speaker 1>if we got back to that. We have the vectors

0:10:40.040 --> 0:10:42.240
<v Speaker 1>in the wrong direction, folks. Not the panic that we've

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<v Speaker 1>seen is today futures negative thirteen to futures negative one

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<v Speaker 1>twelve from Washington, Bloomberg Surveillance. All right, let's check in

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<v Speaker 1>with Michael Bart now and get the latest world in

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<v Speaker 1>national headlines. Mike, Tom, thank you very much. British Prime

0:10:58.559 --> 0:11:02.560
<v Speaker 1>Minister David Cameron will addrest Parliament today. Last week's vote

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<v Speaker 1>for Britain to leave the European Union has left the

0:11:04.800 --> 0:11:09.479
<v Speaker 1>UK looking rudderless. The attempt by opposition Labor Party lawmakers

0:11:09.520 --> 0:11:12.920
<v Speaker 1>to throw their leader, Jeremy Corban out comes on the

0:11:12.960 --> 0:11:15.440
<v Speaker 1>heels of Prime Minister Cameron announcing he will step down

0:11:15.480 --> 0:11:18.520
<v Speaker 1>by October. A new round of flooding is possible in

0:11:18.559 --> 0:11:21.520
<v Speaker 1>West Virginia and the same area where at least twenty

0:11:21.600 --> 0:11:25.000
<v Speaker 1>five people died in the past week. More heavy rains

0:11:25.000 --> 0:11:28.079
<v Speaker 1>are forecast and that has prompted a flash flood of

0:11:28.080 --> 0:11:31.560
<v Speaker 1>watch for more than twenty counties. Firefighters advanced on the

0:11:31.559 --> 0:11:34.400
<v Speaker 1>wildfire in central California that has killed two people and

0:11:34.440 --> 0:11:38.120
<v Speaker 1>destroyed about two hundred homes. Find your officialsy The blaze

0:11:38.160 --> 0:11:41.640
<v Speaker 1>that has charted about sixty eight square miles is about contained.

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<v Speaker 1>Global news twenty four hours a day, powered by more

0:11:44.559 --> 0:11:47.320
<v Speaker 1>than twenty hundred journalists and analysts and more than a

0:11:47.360 --> 0:11:51.280
<v Speaker 1>hundred twenty countries and Michaelabar. This is Bloomberg. Mike, Tom

0:11:51.320 --> 0:11:53.720
<v Speaker 1>and Michael, thanks so much, Thank you so much for

0:11:53.720 --> 0:11:56.040
<v Speaker 1>your comments of our work over the weekend. Michael and

0:11:56.080 --> 0:11:59.719
<v Speaker 1>I really appreciate that we are in Washington later this

0:12:00.000 --> 0:12:04.760
<v Speaker 1>earning a conversation with Alan Greenspan. This is Bloomberg Surveillance.

0:12:07.880 --> 0:12:10.240
<v Speaker 1>At nine am this morning, the former FITE chairman will

0:12:10.320 --> 0:12:15.040
<v Speaker 1>join Tom and many from this Bloomberg special edition Washington,

0:12:15.200 --> 0:12:23.440
<v Speaker 1>d C. Live on Bloomberg Radio, worldwide global business news

0:12:23.480 --> 0:12:26.400
<v Speaker 1>twenty four hours a day, at Bloomberg dot com, the

0:12:26.520 --> 0:12:29.640
<v Speaker 1>Radio plus mobile app, and on your radio. This is

0:12:29.640 --> 0:12:33.360
<v Speaker 1>a Bloomberg Business Flash and I'm Karin Moscow. This updates

0:12:33.360 --> 0:12:38.080
<v Speaker 1>brought to you by National Railty Providers of Satisfaction guaranteed

0:12:38.080 --> 0:12:41.360
<v Speaker 1>New York City realty investments. See them at n r

0:12:41.480 --> 0:12:45.800
<v Speaker 1>i A dot net. Mettronics says it'll buy Hardware International

0:12:45.880 --> 0:12:49.400
<v Speaker 1>of Framingham, Massachusetts for about one point one billion dollars.

0:12:49.640 --> 0:12:52.560
<v Speaker 1>Shares of European banks are trading lower this morning following

0:12:52.600 --> 0:12:55.920
<v Speaker 1>Thursday's historic vote for the UK to leave the European Union.

0:12:56.320 --> 0:12:59.000
<v Speaker 1>UK domestic banks are leading declines in the stock six

0:12:59.080 --> 0:13:01.880
<v Speaker 1>hundred as analysts on both sides of the Atlantic cut

0:13:01.880 --> 0:13:05.200
<v Speaker 1>earnings estimates for the biggest investment banks on the expectation

0:13:05.240 --> 0:13:07.760
<v Speaker 1>that security sales and major deals will be thwarted by

0:13:07.800 --> 0:13:12.000
<v Speaker 1>economic and political uncertainty and currency swings. Again. Stocks in

0:13:12.000 --> 0:13:14.440
<v Speaker 1>Europe are lower, with the DACKS in Germany down two percent,

0:13:14.520 --> 0:13:17.160
<v Speaker 1>CAP in Paris down one point nine percent, foot see

0:13:17.160 --> 0:13:20.960
<v Speaker 1>one down one point six percent. U stock index futures declining,

0:13:20.960 --> 0:13:24.560
<v Speaker 1>with SNP emny futures down fifteen points, DOW EMNY futures

0:13:24.559 --> 0:13:27.160
<v Speaker 1>down one D twenty six, and NAS documity futures down

0:13:27.160 --> 0:13:30.320
<v Speaker 1>about thirty seven ten year treasury of twenty six thirty seconds,

0:13:30.320 --> 0:13:33.160
<v Speaker 1>the yeld one point four six percent. Nimex screwed oil

0:13:33.200 --> 0:13:36.000
<v Speaker 1>down one percent or forty seven cents to forty seven nineteen.

0:13:36.040 --> 0:13:38.600
<v Speaker 1>A barrel comes gold up a ten percent or ten

0:13:38.600 --> 0:13:41.839
<v Speaker 1>dollar seventy cents to thirteen thirty three ten announced the

0:13:41.960 --> 0:13:44.240
<v Speaker 1>euro a dollar ten o four, the British pound a

0:13:44.280 --> 0:13:46.600
<v Speaker 1>dollar thirty two oh six, the yen one oh one

0:13:46.640 --> 0:13:49.520
<v Speaker 1>point six two. As a Bloomberg Business Flash, Tom and

0:13:49.559 --> 0:13:52.760
<v Speaker 1>Mike Karen, thanks so much. Michael McKee and Time Keenan

0:13:52.800 --> 0:13:57.520
<v Speaker 1>Washington will be speaking later today with Madeline Albright and

0:13:57.600 --> 0:14:01.760
<v Speaker 1>also with Alan Greenspan. Right now, Bastian Mallaby and the

0:14:01.840 --> 0:14:06.800
<v Speaker 1>spirit of his hugely awaited book of October the man

0:14:06.880 --> 0:14:09.679
<v Speaker 1>who knew the life and times of Alan Greenspan uh

0:14:09.720 --> 0:14:12.200
<v Speaker 1>and with agreement with his publisher, will not speak in

0:14:12.320 --> 0:14:15.520
<v Speaker 1>detail about the book. They're keeping that under wraps. I

0:14:15.520 --> 0:14:18.440
<v Speaker 1>guess we could ask a Sebastian who will play Alan

0:14:18.480 --> 0:14:21.720
<v Speaker 1>Greenspan in the movie, but let's keep that. Let's keep

0:14:21.720 --> 0:14:26.360
<v Speaker 1>away from that, Sebastian. Are central bankers today different? Have

0:14:26.480 --> 0:14:31.160
<v Speaker 1>they moved on to a new process that is removed

0:14:31.360 --> 0:14:35.520
<v Speaker 1>from the older bankers? Sorry, which I was trying to

0:14:35.520 --> 0:14:38.480
<v Speaker 1>say that that you maybe Utah could play Alan Greenspan

0:14:38.560 --> 0:14:42.400
<v Speaker 1>in the meat. I don't. I'm too tall and my

0:14:42.520 --> 0:14:45.960
<v Speaker 1>clarinet and my yes, that's true, that's true. I'm prescient

0:14:46.000 --> 0:14:50.440
<v Speaker 1>lee unintelligible, but I don't play clarinet like the German.

0:14:51.360 --> 0:14:54.920
<v Speaker 1>Are the bankers today, Sebastian, Are they a whole new

0:14:55.000 --> 0:14:59.800
<v Speaker 1>breed because of newsflow globalization of finance? Is it just

0:14:59.840 --> 0:15:04.520
<v Speaker 1>a whole new game? Well, I mean relative to back

0:15:04.560 --> 0:15:07.800
<v Speaker 1>when Alan Greenstein was starting out his public life in

0:15:07.840 --> 0:15:10.280
<v Speaker 1>the late sixties. Yes, absolutely. I mean, you know, he

0:15:10.720 --> 0:15:13.360
<v Speaker 1>became Nixon's advisor in the late sixties at a time

0:15:13.400 --> 0:15:15.600
<v Speaker 1>when the dollar was picked to gold, there were no

0:15:15.720 --> 0:15:19.920
<v Speaker 1>financial derivatives, banking was regulated, interest rates were capped, we

0:15:20.120 --> 0:15:23.840
<v Speaker 1>had regulation Q. And then during his public life of

0:15:23.960 --> 0:15:26.640
<v Speaker 1>four decades, you go right up to the eve of

0:15:26.680 --> 0:15:30.000
<v Speaker 1>the financial crash in two thousand and seven eight and so,

0:15:30.120 --> 0:15:32.920
<v Speaker 1>if you want to understand the making a modern finance,

0:15:32.960 --> 0:15:36.200
<v Speaker 1>and he's the guy who was at the center more

0:15:36.240 --> 0:15:40.320
<v Speaker 1>than anybody else. He for years and I covered him

0:15:40.360 --> 0:15:45.400
<v Speaker 1>for years, was insistent on the ability to use human

0:15:45.440 --> 0:15:49.840
<v Speaker 1>discretion in deciding what monetary policies should be. And even

0:15:49.840 --> 0:15:56.520
<v Speaker 1>physical reactions to downturns. Is that still a viable theory,

0:15:56.760 --> 0:15:59.160
<v Speaker 1>or there's a big move to try to push for

0:15:59.600 --> 0:16:05.120
<v Speaker 1>rules based policy making. Is green spans still the best

0:16:05.120 --> 0:16:09.080
<v Speaker 1>way too to make policy? Well, you know here, I'm

0:16:09.080 --> 0:16:11.880
<v Speaker 1>gonna push us back onto current events in order not

0:16:11.960 --> 0:16:14.520
<v Speaker 1>to bring down the theory of my publisher too much.

0:16:14.560 --> 0:16:16.800
<v Speaker 1>But I think that this question about discretion and central

0:16:16.840 --> 0:16:22.000
<v Speaker 1>banking maybe facing an interesting cast right now because you've

0:16:22.000 --> 0:16:25.200
<v Speaker 1>had this big market shark, because you've been reporting sterling

0:16:25.280 --> 0:16:27.760
<v Speaker 1>is down to you know, the lowest has been as

0:16:27.760 --> 0:16:30.920
<v Speaker 1>thad years. How the central bankers respond to that? And

0:16:31.000 --> 0:16:35.040
<v Speaker 1>my guess is that there's some overt um, you know,

0:16:35.160 --> 0:16:38.320
<v Speaker 1>a sort of lender of last resort liquidity provision trying

0:16:38.320 --> 0:16:41.720
<v Speaker 1>to stabilize all those banks whose shares have been falling today,

0:16:41.720 --> 0:16:44.400
<v Speaker 1>as you've been saying. So that's the thing that they're

0:16:44.440 --> 0:16:47.280
<v Speaker 1>kind of quite open about. There's also going to be

0:16:47.320 --> 0:16:51.080
<v Speaker 1>I think some exchange rate management, which they may not

0:16:51.120 --> 0:16:52.960
<v Speaker 1>be quite so open about because you created one way

0:16:53.040 --> 0:16:56.120
<v Speaker 1>bet for traders as you're obviously defending a level, so

0:16:56.200 --> 0:16:58.920
<v Speaker 1>there may be some covert decent of levels going on.

0:16:59.360 --> 0:17:01.680
<v Speaker 1>The Swiss Central Bank is the only one I'm aware

0:17:01.720 --> 0:17:04.600
<v Speaker 1>of that's been open and saying it's trying to prevent

0:17:04.640 --> 0:17:07.800
<v Speaker 1>the Swiss rank from appreciating too much. But when you

0:17:07.840 --> 0:17:11.480
<v Speaker 1>see the Japanese yen uh, you know, falling today as

0:17:11.480 --> 0:17:15.520
<v Speaker 1>opposed to rising, I mean I immediately imagine that you know,

0:17:15.560 --> 0:17:20.080
<v Speaker 1>that's the Bank of Japan acting. Well. You you end

0:17:20.160 --> 0:17:23.560
<v Speaker 1>up then with the fiscal authorities who are refusing to act.

0:17:24.119 --> 0:17:26.600
<v Speaker 1>So to take us back to Europe and the question

0:17:26.680 --> 0:17:29.000
<v Speaker 1>I wanted to ask you before the break, has the

0:17:29.000 --> 0:17:33.680
<v Speaker 1>Eurozone failed? I mean I think it's it's it's a

0:17:33.760 --> 0:17:38.160
<v Speaker 1>fail yet it's failed um and it's locked countries into

0:17:38.200 --> 0:17:41.200
<v Speaker 1>this rigid strait jacket where you know, Greece needs a

0:17:41.240 --> 0:17:44.679
<v Speaker 1>totally different interst rate structure than what Germany wants, and

0:17:44.760 --> 0:17:47.159
<v Speaker 1>Grease can't get out of it now. The problem is

0:17:47.200 --> 0:17:49.280
<v Speaker 1>that you know, getting out is even more painful, and

0:17:49.320 --> 0:17:52.280
<v Speaker 1>so I think Europe has to live in this straight jacket,

0:17:52.359 --> 0:17:55.600
<v Speaker 1>uncomfortable though it is, and I just don't see I

0:17:55.640 --> 0:17:58.720
<v Speaker 1>don't see an alternative to a painful, slow grind of

0:17:58.800 --> 0:18:03.440
<v Speaker 1>muddling through. This just going to be quite depressing. Sebastian.

0:18:03.480 --> 0:18:06.960
<v Speaker 1>I was in Mayfair the other day after the referendum.

0:18:06.960 --> 0:18:10.320
<v Speaker 1>Looking at non hedge fund people, you are the authority

0:18:10.400 --> 0:18:14.240
<v Speaker 1>on this, your wonderful book More Money than God is

0:18:14.240 --> 0:18:18.520
<v Speaker 1>a hedge fund game over. You know. I also with

0:18:18.520 --> 0:18:23.080
<v Speaker 1>with a bunch of very smart hedge fund people right

0:18:23.160 --> 0:18:25.199
<v Speaker 1>on the day before the vote, in the day of

0:18:25.400 --> 0:18:29.879
<v Speaker 1>the result, UM and everybody expected, especially when Sterling was

0:18:30.040 --> 0:18:33.280
<v Speaker 1>rising on the Thursday of the vote, that you know,

0:18:33.320 --> 0:18:35.000
<v Speaker 1>this is a done deal. We were going to vote

0:18:35.000 --> 0:18:36.920
<v Speaker 1>to stay in. And the shock the next morning was

0:18:37.000 --> 0:18:40.879
<v Speaker 1>quite probable. Of course, those smart people have got a

0:18:40.920 --> 0:18:43.440
<v Speaker 1>scenario for even stuff they don't expect, so I think

0:18:44.000 --> 0:18:46.560
<v Speaker 1>it was quite remarkable to see people, you know, I'm

0:18:46.720 --> 0:18:49.320
<v Speaker 1>at a conference. People were still you know, showing up

0:18:49.359 --> 0:18:51.520
<v Speaker 1>to the events. They were trading, but they kind of

0:18:51.560 --> 0:18:54.480
<v Speaker 1>had their strategy fixed assance. They didn't have to do

0:18:54.640 --> 0:18:57.200
<v Speaker 1>much more than just press the hit buttons, the sund button.

0:18:57.880 --> 0:19:00.320
<v Speaker 1>I get different opinions, you know, when I to my

0:19:00.400 --> 0:19:03.600
<v Speaker 1>friends in the industry as to whether the markets, whether

0:19:03.680 --> 0:19:07.280
<v Speaker 1>the whether the industry is um in some sort of

0:19:07.480 --> 0:19:10.480
<v Speaker 1>serious decline. I mean, I think, what's care is it

0:19:10.520 --> 0:19:15.160
<v Speaker 1>in a low interest rate environment where you know, returns

0:19:15.160 --> 0:19:18.080
<v Speaker 1>on most assets are going to be very low you're

0:19:18.080 --> 0:19:21.040
<v Speaker 1>doing pretty well if you're making six seven percent a year,

0:19:21.280 --> 0:19:25.440
<v Speaker 1>and yet that doesn't support the two and twenty traditional structure.

0:19:26.040 --> 0:19:29.320
<v Speaker 1>If you take two of the seven right off the bat,

0:19:29.359 --> 0:19:31.800
<v Speaker 1>and then you take the of the of the remainder

0:19:32.560 --> 0:19:37.560
<v Speaker 1>the hedge fund deal with the outside exact partner, that

0:19:37.600 --> 0:19:40.080
<v Speaker 1>has to be renegation. And I think that's why pressure

0:19:40.119 --> 0:19:43.840
<v Speaker 1>on the on the industry. I will be with the

0:19:43.920 --> 0:19:47.280
<v Speaker 1>Counsel of Foreign Relations, among other gifts again in his

0:19:47.359 --> 0:19:49.720
<v Speaker 1>book The Man Who Knew The Life and Times of

0:19:49.760 --> 0:19:54.159
<v Speaker 1>Alan Greenspan, Eagerly it waited for the Fall. Michael McKee

0:19:54.160 --> 0:19:58.240
<v Speaker 1>and Tom Keane, we are in Washington, a conversation later

0:19:58.800 --> 0:20:07.560
<v Speaker 1>with Alan Greenspan. Good at Morning, Littlebert Surveillance brought you

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