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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along

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Speaker 1: with Jonathan Ferrell and Lisa A. Brawmowitz Jailey. We bring

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Speaker 1: you insight from the best and economics, finance, investment, and

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Speaker 1: international relations. Find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg

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Speaker 1: dot Com, and of course, on the Bloomberg Terminal. Scott

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Speaker 1: cast that joins us now vice president and Global sector

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Speaker 1: lead for Technology Meter Intenni Communications at Third Bridge. Scott,

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Speaker 1: I want to start here. They have a great price,

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Speaker 1: He's secured a deal. Can they close this transaction? You know,

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Speaker 1: I think a lot of people are expecting that this

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Speaker 1: deal will close. I think yesterday at they're all hands meeting,

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Speaker 1: they've talked about within six months. UM. That seems somewhat arbitrary,

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Speaker 1: but it seems like the perception is that they in

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Speaker 1: fact will close this transaction. Musk has filed documentation related

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Speaker 1: to UH the elements of the financing. I think Morgan

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Speaker 1: Stanley is involved in that process. Will others come in

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Speaker 1: That remains to be seen, But I think the conventional

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Speaker 1: wisdom is in fact that this deal will be consumated. Scott.

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Speaker 1: You know, I I look at the back of the

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Speaker 1: envelope work here are claimed on and I want you

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Speaker 1: to do the back of the envelope work on where

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Speaker 1: a Tesla price generates the mother of all potential margin

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Speaker 1: calls in the history of Wall Street. Are people have

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Speaker 1: you know runned out nicely here? Tom Maloney and uh

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Speaker 1: and Creighton Harrison. And the bottom line is, if Tesla

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Speaker 1: goes down, how much is Mr Musk at risk given

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Speaker 1: fifty eight gazillion shares? Well, I haven't done that math Um,

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Speaker 1: but I can tell you that that would seem to

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Speaker 1: be a risk. Obviously if you look at UM the

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Speaker 1: source of Musk's wealth UM and some of this finance,

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Speaker 1: it is directly related UM to his holdings in Tesla.

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Speaker 1: So it would seem that would be a vulnerability UM

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Speaker 1: to the extent that UM he is potentially hedged that investment.

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Speaker 1: I don't have any direct knowledge of that. I would

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Speaker 1: encourage you to reach out to him or UM his

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Speaker 1: representatives on that front. That's the next question I'm gonna

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Speaker 1: directly Tom must if you've got that number. Yeah, of course,

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Speaker 1: we'll work on that in the break, Scott. I do

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Speaker 1: wonder though, how much Twitter is actually worth right, whether

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Speaker 1: we have a sense of how much Elon Musk is

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Speaker 1: over paying at a time when the board took this

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Speaker 1: deal and ran because it was probably the best deal

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Speaker 1: they could have gotten. Yeah, you know, that's a topic

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Speaker 1: that I think hasn't been talked about quite as much

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Speaker 1: UM and I think it's important to understand when this

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Speaker 1: whole process began. I think a lot of people just

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Speaker 1: as soon him No, Musk is looking to buy Twitter.

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Speaker 1: That's interesting. My take was kind of like, hey, this

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Speaker 1: is the beginning of a process. Twitter's board is now

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Speaker 1: obligated to engage with advisors and reach out to third

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Speaker 1: parties about their potential interests. I think what's noteworthy, as

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Speaker 1: you point out, is it doesn't seem like there was

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Speaker 1: much other um activity around participating in a buyout of

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Speaker 1: Twitter separate from what Musk is doing. And in fact,

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Speaker 1: what Musk indicated was, in fact that was the initial offer,

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Speaker 1: that was the last offer, that was the greed, the

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Speaker 1: agreed to offer. UM that I think strongly suggests that

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Speaker 1: this was by far not only the most compelling offer,

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Speaker 1: but perhaps the only one. Rage Scot, thank you, buddy.

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Speaker 1: As alway, it's gonna catch out brown waste is going

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Speaker 1: to join on a synatic level, President for Business Intelligence

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Speaker 1: at Grey Pam. Great to catch up with you, buddy.

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Speaker 1: We've been talking about this through the morning. With a

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Speaker 1: greater price now that board's going to recommend its shareholder

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Speaker 1: is I want to understand from musk financing position whether

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Speaker 1: this is a transaction you think is going to close

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Speaker 1: with eies or not. M M. It's a good question.

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Speaker 1: I really wonder what the plan is with respect of

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Speaker 1: the debt, because the company of this size can't really

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Speaker 1: sustain as much debt as their plan to rage, right,

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Speaker 1: So at the same time, it's pretty clear that what

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Speaker 1: he wants to do is something that would be shall

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Speaker 1: we say negative for the actual business advertising, which is

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Speaker 1: obviously our business. Uh And to say, um, you know,

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Speaker 1: I really really wonder because he's got to find equity

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Speaker 1: to take that out presumably, and then are the equity

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Speaker 1: other equity investors in the theater are going to be

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Speaker 1: as oriented around Musk would be on less advertising in

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Speaker 1: the business. Brian, is this thing that's answering to me? Brian?

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Speaker 1: Do you have a sense of what other interests there

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Speaker 1: is in equity ownership alongside Musk? I've only seen the

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Speaker 1: reports that you have. I'm sure, Um, you know clearly

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Speaker 1: there's a lot of couple out there, and so it's

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Speaker 1: not it's absolutely not implausible or impossible by any strategic imagination.

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Speaker 1: But I think it's just the thing that stands up

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Speaker 1: to me in this transuction. Brian, I'm holding up my

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Speaker 1: phone on radio here, folks worldwide, I'm holding up my

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Speaker 1: phone and I got Google play advertisement on Twitter with

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Speaker 1: a cut ci pie video. Forty two people had to

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Speaker 1: put this ad together. It's just promoted down at the bottom. Brian.

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Speaker 1: Is that what an elon musk add is gonna look

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Speaker 1: like on Twitter? You have to imagine. And I think

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Speaker 1: another big question is you're going to spend three years

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Speaker 1: properbularly sleeping on the floor of a Twitter headquarter. Maybe

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Speaker 1: not in San Francisco, but wherever they are helping them

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Speaker 1: involve what the product is. Um, They've got a very

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Speaker 1: capable people, of course. Um. The question an important question,

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Speaker 1: how involved does you really plan to be in involved?

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Speaker 1: What Twitter is? It's about two dollars and fifty cents

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Speaker 1: of down between where the price is in the pre

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Speaker 1: market at the moment, or about two dollars or so,

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Speaker 1: and what the offer prices. Is that pretty normal, Brian,

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Speaker 1: A two dollar spread like that? That that was really wide.

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Speaker 1: And again I understand the skepticism that they're given what

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Speaker 1: we've seen in the past. And again the example I've

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Speaker 1: just laid out as well as there's there's, this is

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Speaker 1: far greater. There's far greater uncertainty than other trendsactions I've

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Speaker 1: seen this nature, Brian. Great to catch out, Buddy, Let's

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Speaker 1: talk soon Brown Ways there of group, Pam. This is

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Speaker 1: a great joy right now. Michael Mayo joins us to

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Speaker 1: say he's senior equity Analystic Wells Fargo. Barely describes his

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Speaker 1: contribution to Bank and Financial Security Analysis long ago and

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Speaker 1: far away. I met him money was a credit Swiss

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Speaker 1: on one of his journeys that was fractious, to say

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Speaker 1: the least. And he joins us this morning with perspective

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Speaker 1: on City Group and the Jane Frasier challenge. Let's look

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Speaker 1: at the ratios and they're a little bit apples to

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Speaker 1: oranges here, but I got a City Group priced the

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Speaker 1: book of a zero point five five off the Bloomberg

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Speaker 1: JP Morgan shining Bright at one point four four and

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Speaker 1: Mike Mayo, I'm sorry Credit sweets, and I get it,

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Speaker 1: it's a different calculation. Is zero point for zero? Fortress

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Speaker 1: Fraser is pretty much on the cusp of being of

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Speaker 1: of of being a credit Swiss. Well, there's a chance

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Speaker 1: to do something about it. Today. Today is City Groups

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Speaker 1: annual shareholder Meeting. I had my one share of stock,

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Speaker 1: which allows me to ask questions at the annual meeting. Unfortunately, UM,

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Speaker 1: there's some issues with this meeting. First of all, it's

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Speaker 1: it's a virtual meeting, which they said they did for

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Speaker 1: the quote convenience of shareholders. How's it convenient when shareholders

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Speaker 1: cannot even attend in person. And then there's the formal

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Speaker 1: proposal proposal number one, the election of the board. I'm

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Speaker 1: saying fire City Groups board, at least fire the eleven

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Speaker 1: of fifteen members who were in place four years ago,

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Speaker 1: when at the same meeting, City Group said their restructuring

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Speaker 1: is done. Now today under the new CEO, city is

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Speaker 1: starting over ten billion dollars. That's my esment, over ten

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Speaker 1: billion dollars to restructure again, I mean, just fire the board.

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Speaker 1: This is Mike, Okay, let's be constructive here. You want

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Speaker 1: to throw Peter Blair Henry out in the street. He's

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Speaker 1: been a good guest about the course, his contribution to

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Speaker 1: New York University and all besides that he was a

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Speaker 1: good basketball player. You want to throw Peter Blair Henry

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Speaker 1: out in the street. What makes up a good board

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Speaker 1: for Jane Fraser? What are the new members have to

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Speaker 1: look like? Well, each individual person on City Groups board

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Speaker 1: maybe finding their own right, but collectively they failed to

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Speaker 1: get the job done. You need some new fresh perspectives.

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Speaker 1: You need people with finance experience, especially technology experience, governance,

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Speaker 1: and we need people who are going to be really

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Speaker 1: shareholders advocate. Because City Group for the last year, five years,

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Speaker 1: ten years, and fifty years has had worst in class

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Speaker 1: efficiency returns and stock market performance and tom as you

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Speaker 1: well know, we've talked about this a lot on the show.

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Speaker 1: Um City Group has not been looking after the interests

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Speaker 1: of shareholders. They've been protecting management employees. Might be a

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Speaker 1: great place to be a customer, but when it comes

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Speaker 1: to shareholders, they're getting the bad end of the stick. Mike,

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Speaker 1: can you be more specific about what you hope they do?

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Speaker 1: Is it called salaries? It cut staff as it shrink

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Speaker 1: in terms of the footprint and where their operations are,

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Speaker 1: as they invest in financial technology or is it something

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Speaker 1: more intangible from that? Well, the good news is that

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Speaker 1: the new CEO, Jane Fraser, has the potential to be

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Speaker 1: the ultimate change agent. So City Group is selling their

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Speaker 1: consumer operations in Asia. They look to sell their consumer

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Speaker 1: business in Mexico. I've been calling for that for a decade. Uh.

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Speaker 1: They are focused on gaining share there in a hundred countries.

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Speaker 1: They're looking at gaining share in banking, payments and capital

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Speaker 1: markets with multinational and cross border companies. That's a great goal.

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Speaker 1: They're more focused on that now. But I'm saying a

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Speaker 1: restructuring that stops at the management level is a restructuring

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Speaker 1: that does not go far enough. When it comes to

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Speaker 1: City Group, we're talking to yet another CEO with yet

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Speaker 1: another restructuring plan. At one point you have to say

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Speaker 1: who's overseeing the overseers and to that end, we need,

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Speaker 1: you know, fresh blood on the board. It will be

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Speaker 1: interesting to see if you know, any of the directors

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Speaker 1: you know get less than say nine get less approval

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Speaker 1: the eleven directors who were there uh four years ago

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Speaker 1: when they said everything's you know, hunky dory um. Will

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Speaker 1: they get a less approval rate than the four that

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Speaker 1: have been new since then. So this is the step

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Speaker 1: child of the earning season. It seems like in your view,

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Speaker 1: who is the winner of the bank earning season so far? Well,

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Speaker 1: I'll tell you I cannot believe Bank of America is

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Speaker 1: performing as well as they are. And here's another example

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Speaker 1: where I thought the CEO should be fired about a

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Speaker 1: decade ago, Brian Mornahan, and now he is on top.

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Speaker 1: This is a ten, fifteen and thirty years story. It's

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Speaker 1: been ten years of retouring with technology that allows them

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Speaker 1: to improve their profit margin. It's been fifteen years of

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Speaker 1: de risking since the global financial crisis, so their long quality, stronger,

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Speaker 1: longer and earty years since they formed a national bank

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Speaker 1: that allows them to gain Mike I said this on

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Speaker 1: air the other day. You gotta give Mr money in

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Speaker 1: a little bit of credit. Besides, he had great boxes

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Speaker 1: at Fenway Park. The bottom line is what he was

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Speaker 1: handed from Ken Lewis was absolutely as shambles, wasn't it. Yeah?

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Speaker 1: But also I would say if I went back, you

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Speaker 1: put me back in, you know, I'd still say he

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Speaker 1: should have been fired or not gotten the chairmanship. I

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Speaker 1: don't think he's ready to be but he has thrown

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Speaker 1: into the position better than any CEO that I've ever come.

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Speaker 1: What's your single best buy right now? It's Bank America,

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Speaker 1: Bank America, Bank America, Bank of America. I cannot believe

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Speaker 1: that with all these interest rate hikes that benefit Bank

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Speaker 1: of America more than any other large bank, that this

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Speaker 1: stock is damn so much. Okay, how's he doing on digital?

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Speaker 1: How's he doing compared to me? I mean, Jamie Diamond's

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Speaker 1: writing forty four pages on annual report. Brian moyne and

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Speaker 1: has given us one paragraph that's you know, seven people

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Speaker 1: have sanitized. How's he doing on digital? You know what?

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Speaker 1: Brian Wanahan does not talk to talk, but he walks

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Speaker 1: the walk, and I'd rather that over the alternative and

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Speaker 1: digital banking. Bank of America is one of the digital

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Speaker 1: banking leaders. You can talk about in New York Bank,

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Speaker 1: you can about fintech, you can talk about big tech.

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Speaker 1: But Bank of America is gaining market share digitally and

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Speaker 1: they're building deeper digital relationships in addition to acquiring new customers. Mike,

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Speaker 1: if you were wrong about Mona Ham back in the day,

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Speaker 1: why do you think you're not wrong about city now

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Speaker 1: and won't be in tenuous time. Well, I feel good

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Speaker 1: about Jane Frasier, you know, redirecting City and putting them

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Speaker 1: on a better long term path. I just don't feel

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Speaker 1: good enough that they are looking out for shareholders enough.

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Speaker 1: I'd like to see managers as City Group put more

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Speaker 1: skin in the game. Let's see them buy more City

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Speaker 1: Group stock. You know what Jamie Diamond would do back

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Speaker 1: in the day. Let's see the board put pressure on management.

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Speaker 1: Let's by the way, proposal number two today uh RE

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Speaker 1: confirmed their auditor KPMG. KPMG has been in place for

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Speaker 1: fifty three years, yet the new regulatory consent order says

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Speaker 1: they have internal deficiencies. Proposal number two, Vote no, Proposal

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Speaker 1: number three, they have a special comp plan, a transformational

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Speaker 1: bonus plan. Vote no, So vote no today. Proposal one

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Speaker 1: the election of directors, proposal to the auditor, and Proposal

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Speaker 1: three the compensation. So I just want to see someone

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Speaker 1: overseeing the overseers. So, um, yeah, you can. I need

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Speaker 1: someone to protect my interest owning you know, my John.

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Speaker 1: Do you think Mike Mayo got a fruitcake from City Group?

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Speaker 1: One Christmas didn't work out? It was a little still

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Speaker 1: even God that Mike, Thank you. We're gonna do earning

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Speaker 1: state side right now, and to get us started on this,

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Speaker 1: Liz and Saunders joins us to get equity coverage started

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Speaker 1: this morning. Chief investment strategist at Cheryles Schwab, Liziene, let

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Speaker 1: me start with the swab wheelhouse. What are we doing

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Speaker 1: with our money right now? We've got two once in

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Speaker 1: a lifetime events, a pandemic and a serious war. What

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Speaker 1: do you see him? Flows um fairly steady, and what

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Speaker 1: we're seeing is actually consistent with some broader industry data

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Speaker 1: on the interesting dynamic and relationship between attitudinal measures of sentiments.

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Speaker 1: So if you look at a survey like AII a

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Speaker 1: week ago that hit the lowest percentage of bulls since

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Speaker 1: two so and we find that what what our investors

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Speaker 1: are saying, the kinds of questions are asking suggest a

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Speaker 1: lot of concern. But when you look at flows, when

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Speaker 1: you look at a metric like the equity only put

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Speaker 1: call ratio, you have seen a pick up in some nervousness,

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Speaker 1: but nowhere near to the same degree as what you're

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Speaker 1: seeing in some of those attitudinal surveys. So not a

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Speaker 1: lot of shifting around of the money, but an expression

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Speaker 1: of concern and and that's the complete opposite of what

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Speaker 1: happened in March of when people were just dumping everything

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Speaker 1: but actually didn't express as much concern. So it's just

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Speaker 1: it's an interesting mirror image. Eric Beltuna is his new

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Speaker 1: book on John Bogel. Let me ask you the passive

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Speaker 1: active question right now, given the uncertainties out there the

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Speaker 1: epsilon in the back end of the algebra, does Liz

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Speaker 1: and Saunders go passive and hide or do you actually

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Speaker 1: try to find active management to get things done? We

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Speaker 1: we always advocate for a little bit of blend and

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Speaker 1: also depends on what your overall objectives are. But I

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Speaker 1: think the playing field is much more level now active

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Speaker 1: relative to passive. I think there's an improving opportunity for

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Speaker 1: active to add some relative performance here, and that's not

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Speaker 1: been the case obviously for many years. You're seeing a

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Speaker 1: widening out, more of a dispersion, even among some of

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Speaker 1: the large cap that you know, the Super seven kind

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Speaker 1: of names, much more dispersion in terms of performance, and

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Speaker 1: you're seeing it through earning season two. If you go

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Speaker 1: to the tails, the companies that have missed earnings by

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Speaker 1: at least twenty percent have gotten absolutely hammered versus the

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Speaker 1: companies that have beaten by more than have done better,

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Speaker 1: although odd as well as has typically been the case

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Speaker 1: over the past twenty years or so, But I think

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Speaker 1: there are opportunities now we're active for the first time

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Speaker 1: in a while, UM actually is playing on at least

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Speaker 1: a level field. Can you elaborate on that the fact

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Speaker 1: that upside beats on earnings have not been rewarded in

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Speaker 1: the way that they traditionally have. Do you view this

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Speaker 1: as frankly, investors being forward looking and seeing some danger ahead,

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Speaker 1: or do you view this as people being overly pessimistic

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Speaker 1: and not swooping into real opportunities. I think it is

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Speaker 1: in large part through the sentiment environment, but also where

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Speaker 1: we are in the cycle, the monetary policy cycle, rising

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Speaker 1: interest rates putting downward pressure on more highly valued segments

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Speaker 1: of the market. Some of the really heightened speculative money

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Speaker 1: that had fueled lower quality areas maybe not being is

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Speaker 1: playful in the market right now. So I think it's

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Speaker 1: it's a lot to do with where we are in

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Speaker 1: the cycle, but I think it is uh some sentiment,

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Speaker 1: and I think that does create opportunities. In fact, I

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Speaker 1: think this very pessiment sentiment environment, at least on the

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Speaker 1: attitudinal side, does provide some support for the market here.

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Speaker 1: It's one of the few positives that you can point

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Speaker 1: to is just that sentiment has shifted um towards the

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Speaker 1: Barrish camp. You typically need a catalyst for sentiment to

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Speaker 1: act as a contrarian indicator. I'm not sure we have

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Speaker 1: one eminently, but uh, that's not a bad backdrop that

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Speaker 1: if everybody was still wildly bullishare given the backdroplasianna of

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Speaker 1: the macro dominance, do you see an opportunity in big tech,

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Speaker 1: especially as we're expecting to see pretty strong runnings. Well,

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Speaker 1: it depends on how you define tech. Within tech, and

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Speaker 1: on a year today basis, last three or four months,

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Speaker 1: it's actually value factors that are outperforming. I look at

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Speaker 1: the Bloomberg factors on a on a day to day basis,

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Speaker 1: and there's that value dominance even in a sector like tech.

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Speaker 1: So I think you can still look in some of

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Speaker 1: the so called growthier sectors, but with a sort of

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Speaker 1: a value mindset. Is this misperception out there that if

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Speaker 1: you say value, you're looking for value, that you're limited

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Speaker 1: to the sectors or areas that happened to be housed

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Speaker 1: in the value indexes. You know a reverse examples of

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Speaker 1: that as utilities. Defensive sector obviously been doing well, but

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Speaker 1: utilities right now are more expensive by a pretty wide

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Speaker 1: margin than the SMP. That doesn't mean they've become growth stocks.

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Speaker 1: They still live in the value indexes. They just don't

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Speaker 1: offer a lot of value. So you can look for

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Speaker 1: value and quality and not limit yourselves to what lives

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Speaker 1: in the value index Those and UPS. I don't want

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Speaker 1: you to talk about individual stocks, but UBS plans to

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Speaker 1: quote double amount of share repurchase for this year giving

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Speaker 1: the use of cash update. So you know, we had

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Speaker 1: a record year UM last year. We were set up

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Speaker 1: for that, but you've seen some companies start to back

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Speaker 1: off of that, whether it's UH sort of the optics

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Speaker 1: or some sort of political pressure. But I agree with

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Speaker 1: you what you said I think was during the break.

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Speaker 1: Maybe nobody else heard it, but with you in in

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Speaker 1: my ear, I think you know, a company like UPS

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Speaker 1: is certainly a bell weather and especially in this kind

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Speaker 1: of market environment. UM, maybe that suggests that there aren't

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Speaker 1: more productive uses for the cash from a longer term

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Speaker 1: capital spending. UH standpoint UM to see more of their

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Speaker 1: commentary and John. What's so important he is to understand

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Speaker 1: that Lizzie and Saunders is a required listen on radio

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Speaker 1: on television because she's the only one I know has

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Speaker 1: actually read the FORMNI pages on led Zeppelin over her

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Speaker 1: left shoulder. And she's welcome back to so long as

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Speaker 1: she doesn't repeat anything now she might of head in

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Speaker 1: the commercial break. That's true from you guys. That's a

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Speaker 1: white fantastic right now. And yes the parchment is from

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Speaker 1: Cambridge in the London School of Economics, but far more

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Speaker 1: she is from the North of England. She has a

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Speaker 1: not acquaintance with the football team at Preston, North End.

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Speaker 1: She is the United Kingdom Ambassador to the United States.

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Speaker 1: Karen Pierce joins us with extraordinary service to our nation

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Speaker 1: at the United Nations. Karen, you are so qualified Ambassador

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Speaker 1: to this question. Is it every nation for itself right

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Speaker 1: now against Mr Putin? No? I think it would be

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Speaker 1: a huge mistake to think this is the end of

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Speaker 1: collective security. But Putin has done serious violence to the

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Speaker 1: international world order as well as to Ukraine. But those

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Speaker 1: bonds that bring NATO together, the ties that bring the

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Speaker 1: U n together, they're still there. There's damage because of

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Speaker 1: Mr Putin at the u N. But I don't think

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Speaker 1: this is the end of collective security among others. The

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Speaker 1: Times of London today notes a partition here of Ukraine

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Speaker 1: using British weapons. Does that bring the United Kingdom closer

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Speaker 1: to direct confrontation with Mr Putin? Um No, I don't.

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Speaker 1: I don't think so. Under the u N Charter, which

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Speaker 1: if you like, is the guide for international relations and

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Speaker 1: international affairs. Under the u N Charter, Ukraine has every

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Speaker 1: right to ask other countries for help, and we are

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Speaker 1: responding to that. Other NATO allies like the US obviously,

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Speaker 1: also France and Germany, Czech Republic. We're all responding so

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Speaker 1: that Ukraine can defend itself, not so that we can

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Speaker 1: go and fight the Russians, but so Ukraine has all

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Speaker 1: the tools she needs to defend herself. But you know,

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Speaker 1: let's be clear, we're in We're in this situation because

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Speaker 1: Mr Putin chose to violate international law and international norms

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Speaker 1: and invade Ukraine. In Bassador, this is a delicate question.

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Speaker 1: But I do wonder, in the face of some of

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Speaker 1: the unity that we see from the outside of NATO,

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Speaker 1: how delicate the conversations are with the US and the

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Speaker 1: United Kingdom with Germany about perhaps curtailing some of the

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Speaker 1: purchases of oil and gas from Russia. It's a difficult question,

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Speaker 1: more for countries like Germany them for the UK, we

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Speaker 1: only get around three to four percent of our fuel

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Speaker 1: from Russian hydro carbons, and the Germans obviously have a

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Speaker 1: match higher proportion. But gradually, over time we will work

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Speaker 1: out a transition away from Russian hydro carbons, away from dependency.

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Speaker 1: This is the sort of work that's been done in

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Speaker 1: G seven. It's not going to be overnight, but we

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Speaker 1: are going to accelerate that transition. How important is it

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Speaker 1: ambassador for nations like the US and like the United

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Speaker 1: Kingdom to help Germany in this transition to ease the

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Speaker 1: pain in the short term as Germany has come out

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Speaker 1: and basically said the Bundesbank but they're going to go

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Speaker 1: into recession if they actually ban immediately oil and gas

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Speaker 1: imports from Russia. We are all helping each other, just

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Speaker 1: as we have NATO on the collective security side. So

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Speaker 1: the G seven is helping countries like Germany manage this transition.

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Speaker 1: The UK and the US are doing more to get

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Speaker 1: l en G into Europe. When I was in Baltimore recently,

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Speaker 1: I was at the port. You can see a big

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Speaker 1: energy terminal there that will be piped to the UK

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Speaker 1: and we will pipe it on to Germany and other

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Speaker 1: countries in Europe. So we're trying very hard. We've also

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Speaker 1: released some of our strategic oil reserves. Ambassador from another

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Speaker 1: time and place, there is the British Navy, and I

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Speaker 1: think it's been undercovered here. Yes, there's a Black Sea

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Speaker 1: in the distance of the Black Sea and such, but

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Speaker 1: there's also the tensions of Finland and Sweden. Explain to

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Speaker 1: us what the United Kingdom can do to keep the

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Speaker 1: seas open of the Baltic Sea and then up north

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Speaker 1: across Norway to Russia. What can be the projection in

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Speaker 1: the United Kingdom can do to provide for peaceful northern seas.

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Speaker 1: That's such a good question keeping the seas open. And

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Speaker 1: of course it's not just in and around Europe that

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Speaker 1: freedom of navigation is under threat. We see that elsewhere

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Speaker 1: around the world. But you're absolutely right. Freedom of now

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Speaker 1: erigation has been a central plank of economic development of

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Speaker 1: nations for centuries. As you also say, Britain is a

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Speaker 1: maritime nation. That's our history, it's in our DNA. We

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Speaker 1: take freedom of navigation very seriously. We send our ships

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Speaker 1: round the world to uphold that right of freedom of navigation,

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Speaker 1: as does the United States. So a large part of

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Speaker 1: what we do in the Baltic Sea is about just

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Speaker 1: being there and asserting the right of freedom of navigation.

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Speaker 1: And but just to reflect on Germany's decisions over the

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Speaker 1: last couple of decades, many people warned them about their

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Speaker 1: dependence on Russian energy. Those warnings were ignored. They've clearly

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Speaker 1: made a policy mistake. The Greeks also made a policy

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Speaker 1: mistake twenty or so years ago, and they were punished

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Speaker 1: with austerity by the Europeans. They had to make some

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Speaker 1: terrible decisions that plunge their economy into a depression. What

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Speaker 1: are we treating Germany differently when they've made a policy

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Speaker 1: mistake and seemingly we have to wait for them to

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Speaker 1: make their adjustments when I think, really, primarily that's a

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Speaker 1: question for the European Union. Germany is still a member,

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Speaker 1: we of course are not. But I think also everything

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Speaker 1: we do now builds on what went before. We learned

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Speaker 1: from what went before, we learn how to do things better.

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Speaker 1: That's a continuous process. And Bassaida, thank you for your

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Speaker 1: time today, Ambassador account past. Then this is the Bloomberg

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Speaker 1: Surveillance Podcast. Thanks for listening. Join us live weekdays from

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00:26:30,200 --> 00:26:33,560
Speaker 1: seven to ten am Eastern on Bloomberg Radio and on

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00:26:33,640 --> 00:26:37,919
Speaker 1: Bloomberg Television each day from six to nine am for

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Speaker 1: insight from the best in economics, finance, investment, and international relations.

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Speaker 1: And subscribe to the Surveillance podcast on Apple podcast, SoundCloud,

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Speaker 1: Bloomberg dot com, and of course on the terminal. I'm

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Speaker 1: Tom Keene, and this is Bloomberg