1 00:00:09,840 --> 00:00:13,880 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Leye. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,600 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg two 5 00:00:27,680 --> 00:00:30,920 Speaker 1: pm Eastern. That's your main event. The Federal Reserve decides, 6 00:00:31,000 --> 00:00:34,880 Speaker 1: Chairman Powell delivers a news conference. Shortly thereafter, Johnny, Tom 7 00:00:34,880 --> 00:00:36,560 Speaker 1: and I in the studio. I'm pleased to say here 8 00:00:36,560 --> 00:00:40,960 Speaker 1: in New York, Tony Kriscenzi, Pimco market strategist and portfolio 9 00:00:41,400 --> 00:00:44,159 Speaker 1: manage a good morning to your Tony chant. Thanks for 10 00:00:44,200 --> 00:00:46,560 Speaker 1: having me here. Will they all? Won't they cut interest 11 00:00:46,640 --> 00:00:49,919 Speaker 1: rates in a couple of hours time. Yes, we think 12 00:00:49,960 --> 00:00:53,120 Speaker 1: it's highly probable the Federal Deserved did nothing to dissuade 13 00:00:53,159 --> 00:00:56,160 Speaker 1: the markets from thinking they'll be a move. And we 14 00:00:56,240 --> 00:00:58,800 Speaker 1: know from our conversations that we have regularly with Ben 15 00:00:58,840 --> 00:01:02,480 Speaker 1: Berninki that when the pocket has a very high probability 16 00:01:02,560 --> 00:01:06,600 Speaker 1: of a certain action, that the Federal Reserve need follow 17 00:01:06,680 --> 00:01:08,559 Speaker 1: through with it. And what could be called the hall 18 00:01:08,600 --> 00:01:11,679 Speaker 1: of mirrors effect, where the markets looking at the Fed 19 00:01:11,720 --> 00:01:13,640 Speaker 1: and the Feds looking back at the markets, and they 20 00:01:13,680 --> 00:01:16,120 Speaker 1: have to mirror what the markets are doing. So the 21 00:01:16,120 --> 00:01:18,560 Speaker 1: probability of what the markets have in for a hike 22 00:01:18,800 --> 00:01:22,520 Speaker 1: is that's too high for the Fed to say no today. 23 00:01:22,640 --> 00:01:27,320 Speaker 1: What's a Harkers cut a mistake? Uh? In this climate, 24 00:01:27,760 --> 00:01:31,000 Speaker 1: hawker Ish cut would be where the FED cuts and 25 00:01:31,040 --> 00:01:33,679 Speaker 1: then it does something like it's done in the past, 26 00:01:33,680 --> 00:01:36,120 Speaker 1: where it looks back and says, well, with these three 27 00:01:36,200 --> 00:01:40,000 Speaker 1: cuts now we think things will be fine. So if 28 00:01:40,040 --> 00:01:42,560 Speaker 1: they look back at the cuts and speak to what 29 00:01:42,680 --> 00:01:46,319 Speaker 1: they've done, and that would be a Harkets cut to 30 00:01:46,360 --> 00:01:48,400 Speaker 1: the day Chairman Paul is going to be in the 31 00:01:48,440 --> 00:01:51,160 Speaker 1: crucible of the press conference. Let's be honest. The furd 32 00:01:51,200 --> 00:01:54,600 Speaker 1: of the question makes sense the rest of what's the 33 00:01:54,760 --> 00:01:58,800 Speaker 1: question you want to ask? So he can define this 34 00:01:58,880 --> 00:02:03,480 Speaker 1: new phrase, Hawkers cut the press. I'm going after the 35 00:02:03,520 --> 00:02:06,640 Speaker 1: press today. Hawkers cut open for Jethro Tall about twenty 36 00:02:06,920 --> 00:02:10,080 Speaker 1: years ago, they were great Hawkers cut. How do you 37 00:02:10,200 --> 00:02:14,120 Speaker 1: phrase that to the chairman in a constructive way one can? 38 00:02:14,200 --> 00:02:17,240 Speaker 1: Michael McKee will be one of the best works. Michael 39 00:02:17,280 --> 00:02:20,960 Speaker 1: McKee will asked the question, but you would expect that 40 00:02:21,080 --> 00:02:24,680 Speaker 1: power will be evasive on the idea that the federal 41 00:02:24,720 --> 00:02:28,120 Speaker 1: reserve is finished and that this potentially is simply a 42 00:02:28,120 --> 00:02:32,400 Speaker 1: mid cycle insurance like adjustment. He will do everything he 43 00:02:32,520 --> 00:02:37,080 Speaker 1: can to leave his options open. And so those in 44 00:02:37,120 --> 00:02:40,519 Speaker 1: the room asking him questions to try to push and say, 45 00:02:40,639 --> 00:02:44,000 Speaker 1: do you really mean to tell us that you are 46 00:02:44,080 --> 00:02:47,160 Speaker 1: open to another cut in December on the eleventh when 47 00:02:47,160 --> 00:02:50,359 Speaker 1: you meet again, or or you're just trying to have 48 00:02:50,440 --> 00:02:54,720 Speaker 1: us think, uh, there'll be more cuts? Most likely UM 49 00:02:54,760 --> 00:02:58,160 Speaker 1: to be straight. Um that FED in this optionality in 50 00:02:58,200 --> 00:03:00,519 Speaker 1: the statement will probably say something that what has said 51 00:03:00,600 --> 00:03:03,720 Speaker 1: last time in its policy meeting, that will continue to 52 00:03:03,760 --> 00:03:07,840 Speaker 1: monitor the implications of incoming data and act as appropriate. 53 00:03:07,919 --> 00:03:11,639 Speaker 1: That still could mean doing nothing. And so it's it's 54 00:03:11,680 --> 00:03:13,800 Speaker 1: okay to say we are open to another cut and 55 00:03:13,840 --> 00:03:16,359 Speaker 1: not actually file through with it. And markets importantly only 56 00:03:16,360 --> 00:03:19,160 Speaker 1: price for thirty basis points more and cuts between now 57 00:03:19,200 --> 00:03:21,359 Speaker 1: and the end of next year. So you said, there's 58 00:03:21,360 --> 00:03:24,040 Speaker 1: not that much tension between the market basis and FED 59 00:03:24,080 --> 00:03:27,320 Speaker 1: forecasts right now, and he so Powell has been put 60 00:03:27,320 --> 00:03:30,600 Speaker 1: in a very good position by the rising market interest 61 00:03:30,680 --> 00:03:34,160 Speaker 1: rates recently and the re steepening of the yield curve. 62 00:03:34,200 --> 00:03:36,440 Speaker 1: I want to John three months terms. I did a 63 00:03:36,520 --> 00:03:39,200 Speaker 1: very careful study of it today and we are now 64 00:03:39,280 --> 00:03:41,960 Speaker 1: out with the question. As I said to Mr Consensi earlier, 65 00:03:42,120 --> 00:03:45,160 Speaker 1: have we broken the curve flattening cycle got to be 66 00:03:45,280 --> 00:03:48,280 Speaker 1: really careful though, now, because the FED is buying tabills. 67 00:03:49,080 --> 00:03:51,640 Speaker 1: Antonio just wonder if we can't take signal from when 68 00:03:51,800 --> 00:03:54,320 Speaker 1: the curve was inverting, whether we can take any signal 69 00:03:54,960 --> 00:03:58,080 Speaker 1: now The curve is stepening from a three month table 70 00:03:58,760 --> 00:04:01,440 Speaker 1: at the longer end of an extent, but the purchases 71 00:04:01,480 --> 00:04:04,920 Speaker 1: haven't happened in any meaningful size yet, and when the 72 00:04:05,160 --> 00:04:08,680 Speaker 1: problems will become acute more in January or so, when 73 00:04:08,720 --> 00:04:11,920 Speaker 1: the amount of bills available to be bought will be low, 74 00:04:12,000 --> 00:04:14,520 Speaker 1: and so when the FED is out there buying, yes, 75 00:04:14,560 --> 00:04:16,680 Speaker 1: it will have an impact on the curve for three 76 00:04:16,680 --> 00:04:18,880 Speaker 1: months TA bill, one month a bill especially two months 77 00:04:19,560 --> 00:04:23,240 Speaker 1: can't possibly be impacted by future FED purchases because these 78 00:04:23,480 --> 00:04:25,560 Speaker 1: bills will have matured. And so we would say that 79 00:04:25,640 --> 00:04:29,200 Speaker 1: the steepening relates more to confidence in the FED, confidence 80 00:04:29,240 --> 00:04:34,039 Speaker 1: in democracy and capitalism to extent that this faith that 81 00:04:35,240 --> 00:04:37,920 Speaker 1: companies people will wake up each and every day and 82 00:04:37,920 --> 00:04:40,839 Speaker 1: try to make a better living for themselves and produce 83 00:04:40,920 --> 00:04:45,920 Speaker 1: a better economic outcome. How with policy uncertainty down a little, 84 00:04:46,520 --> 00:04:49,400 Speaker 1: and I emphasize a little on Breaxit and China, let's 85 00:04:49,440 --> 00:04:51,640 Speaker 1: talk about that. Since the end of August, the beginning 86 00:04:51,640 --> 00:04:55,960 Speaker 1: of September, when the tenure treasury bottomed out, for risks 87 00:04:55,960 --> 00:05:01,320 Speaker 1: have receded, So repricing markets makes sense now. Whether risks 88 00:05:01,320 --> 00:05:04,080 Speaker 1: have diminished to the degree that you think that everything 89 00:05:04,240 --> 00:05:06,159 Speaker 1: is behind us, that the worst is behind us, and 90 00:05:06,200 --> 00:05:08,120 Speaker 1: that things are going to gradually get better from here 91 00:05:08,160 --> 00:05:10,719 Speaker 1: on out, I guess it's a very different judgment. Cold 92 00:05:10,720 --> 00:05:12,480 Speaker 1: where do you come down on that, Tony at the Mongment, 93 00:05:12,520 --> 00:05:14,760 Speaker 1: As you know, John in your home country in the UK, 94 00:05:14,920 --> 00:05:18,320 Speaker 1: even if breggsit, if the election goes as Boris Johnson 95 00:05:18,400 --> 00:05:21,360 Speaker 1: wants on December twelve, Frank Sinatra's birthday, by the way, 96 00:05:22,080 --> 00:05:28,080 Speaker 1: Amber to say that as an Italian um, if it 97 00:05:28,080 --> 00:05:31,280 Speaker 1: goes as expected, and it goes well, and bregsit and 98 00:05:31,279 --> 00:05:34,720 Speaker 1: and the UK does leave the European Union, as you know, 99 00:05:34,760 --> 00:05:36,840 Speaker 1: there's a transition period and there'll be a lot of 100 00:05:36,880 --> 00:05:39,720 Speaker 1: squabbles about that and a lot of uncertainties that could 101 00:05:39,720 --> 00:05:42,120 Speaker 1: cause businesses to say, well, I'm not so sure about 102 00:05:42,120 --> 00:05:46,320 Speaker 1: the future because trade agreements between the UK and the 103 00:05:46,320 --> 00:05:48,160 Speaker 1: rest of Europe will have to be rewritten. A lot 104 00:05:48,200 --> 00:05:50,000 Speaker 1: of things will have to be rewritten, and no one 105 00:05:50,040 --> 00:05:52,080 Speaker 1: will know what the writing will be, and so there 106 00:05:52,080 --> 00:05:54,919 Speaker 1: will be uncertainties there. And also with China because it 107 00:05:55,040 --> 00:05:56,880 Speaker 1: is an election year in the United States and there 108 00:05:56,880 --> 00:05:59,480 Speaker 1: will be it is a bipartisan issue and so it 109 00:05:59,560 --> 00:06:02,599 Speaker 1: will be there will be tensions and the remaining through 110 00:06:02,640 --> 00:06:05,520 Speaker 1: the election. And in the meantime, tony people are starting 111 00:06:05,560 --> 00:06:08,560 Speaker 1: to load upon risk just a little bit incrementally once again, 112 00:06:09,320 --> 00:06:11,960 Speaker 1: how yield spreads the tightest of the year in and 113 00:06:12,000 --> 00:06:14,159 Speaker 1: around those kind of levels now through engine A fifty 114 00:06:14,160 --> 00:06:16,839 Speaker 1: basis points. Good friend of yours, Mr Rivason and the 115 00:06:16,920 --> 00:06:19,839 Speaker 1: ft this week saying we don't like corporate credit risk. 116 00:06:20,480 --> 00:06:24,080 Speaker 1: Why doesn't PIMCO like corporate credit risk? Right now? Daran 117 00:06:24,080 --> 00:06:26,760 Speaker 1: iverson our group c IO is identified and as we 118 00:06:26,800 --> 00:06:29,560 Speaker 1: all have that the corporate credit markets, the risk is 119 00:06:29,640 --> 00:06:32,440 Speaker 1: part of the fixed income market. It has to do 120 00:06:32,520 --> 00:06:36,560 Speaker 1: with something that happened in the that's endemic to the 121 00:06:36,640 --> 00:06:39,359 Speaker 1: markets in general. That happened in the money market, that 122 00:06:39,480 --> 00:06:42,760 Speaker 1: the intermediaries, those who get between the buyer and the 123 00:06:42,800 --> 00:06:46,920 Speaker 1: seller aren't playing the traditional role. And in other words, 124 00:06:47,200 --> 00:06:49,280 Speaker 1: you saw in the money market when interest rates on 125 00:06:49,320 --> 00:06:52,200 Speaker 1: the short term part of the bond market moved up 126 00:06:52,240 --> 00:06:56,520 Speaker 1: towards ten percent, that was because intermediaries decided, well, we're 127 00:06:56,520 --> 00:06:58,720 Speaker 1: not going to participate in the way we used to. 128 00:06:58,839 --> 00:07:01,359 Speaker 1: This could happen in the corporate on market at a 129 00:07:01,440 --> 00:07:04,680 Speaker 1: time when there's a large amount of risk transfer. In 130 00:07:04,760 --> 00:07:07,480 Speaker 1: other words, when investors go to sell corporate bonds someday 131 00:07:07,560 --> 00:07:09,600 Speaker 1: when they have a reason to do so, and typically 132 00:07:09,640 --> 00:07:12,840 Speaker 1: this is a recession risk. Who is it that will 133 00:07:12,880 --> 00:07:16,880 Speaker 1: be wanting taking these hot potatoes each primary deal? Are 134 00:07:16,920 --> 00:07:21,120 Speaker 1: those who uh do a lot of this intermediary intermediation 135 00:07:21,520 --> 00:07:23,840 Speaker 1: will say I don't want it, you have it, you 136 00:07:23,920 --> 00:07:27,400 Speaker 1: take it risk in the corporate credit market in the 137 00:07:27,440 --> 00:07:31,320 Speaker 1: United States, there's the problems in the in the money market, 138 00:07:31,400 --> 00:07:35,880 Speaker 1: or endemic to the financial markets in general, because intermediaries are, 139 00:07:36,120 --> 00:07:40,440 Speaker 1: due to regulatory changes, are unwilling to house inventry. And 140 00:07:40,680 --> 00:07:42,800 Speaker 1: think of it this way. There no longer in the 141 00:07:42,960 --> 00:07:46,160 Speaker 1: storage business. There in the moving business. They will not 142 00:07:46,320 --> 00:07:49,080 Speaker 1: hold inventories, they will not hold the securities of the 143 00:07:49,120 --> 00:07:51,720 Speaker 1: world wants to sell to them. And so that's what 144 00:07:51,480 --> 00:07:54,360 Speaker 1: the warrior is real quickly here, then you're saying that 145 00:07:54,440 --> 00:07:57,200 Speaker 1: the repo uproar and the raging debate over this can 146 00:07:57,280 --> 00:08:01,240 Speaker 1: fold over into longer duration fixing cumb assets to all 147 00:08:01,840 --> 00:08:04,560 Speaker 1: all types of fixed income securities because of the lack 148 00:08:04,640 --> 00:08:07,320 Speaker 1: of liquidity in these other areas. If it happened in 149 00:08:07,360 --> 00:08:09,679 Speaker 1: the treasury market, can happen in the corporate bond market, 150 00:08:09,720 --> 00:08:15,240 Speaker 1: where many securities trade by appointment. Frank Sinatra December twelve, 151 00:08:15,360 --> 00:08:20,320 Speaker 1: the same day as the UK election, and so he 152 00:08:20,440 --> 00:08:23,680 Speaker 1: sings the song is famously uh old man river keeps 153 00:08:23,760 --> 00:08:26,080 Speaker 1: rolling along, so you could uh the best version of 154 00:08:26,080 --> 00:08:29,640 Speaker 1: ever in my opinion, and one of these emotional song. 155 00:08:30,120 --> 00:08:33,760 Speaker 1: But the ideas of capitalism, etcetera keeps rolling along the 156 00:08:33,800 --> 00:08:36,000 Speaker 1: UK and democracy will keep rolling along on that day. 157 00:08:36,120 --> 00:08:38,680 Speaker 1: SD you get back to two pm this afternoon, is 158 00:08:38,720 --> 00:08:40,880 Speaker 1: this going to be market moving? When they start defining 159 00:08:40,920 --> 00:08:43,440 Speaker 1: whatever in God's name of Hawker is cut, is Powell 160 00:08:44,320 --> 00:08:47,319 Speaker 1: meets what is likely to be his objective, there will 161 00:08:47,320 --> 00:08:50,199 Speaker 1: be no movement in the financial markets because it's already 162 00:08:50,200 --> 00:08:53,520 Speaker 1: priced for the idea that there could be a hawkish cut, 163 00:08:53,640 --> 00:08:56,760 Speaker 1: or that the federal reserves three cuts might be enough 164 00:08:56,840 --> 00:08:59,800 Speaker 1: with only about it one more cut price in between. 165 00:08:59,800 --> 00:09:01,880 Speaker 1: Now in the end of next year, it should be 166 00:09:02,080 --> 00:09:05,920 Speaker 1: a stable market. Yeah, well we'll see you. Thank you 167 00:09:06,000 --> 00:09:24,640 Speaker 1: so much. Appreciate that as well. So one place to say, 168 00:09:24,679 --> 00:09:27,640 Speaker 1: we can bring in David Kirkpatrick of Teconomy, the CEO 169 00:09:27,920 --> 00:09:30,240 Speaker 1: and founder and the author of that book You Love 170 00:09:30,400 --> 00:09:33,440 Speaker 1: The Facebook Effect. It ends with Zuckerberg at the end 171 00:09:33,480 --> 00:09:37,520 Speaker 1: of a driveway in California where his life is changing. 172 00:09:37,880 --> 00:09:40,200 Speaker 1: David Kirkpatrick. I thought of that moment as you end 173 00:09:40,200 --> 00:09:43,160 Speaker 1: your book illegiately and and just to cut to the 174 00:09:43,280 --> 00:09:46,160 Speaker 1: chase out bunch of a train wreck on a Kirkpatrick 175 00:09:46,280 --> 00:09:49,839 Speaker 1: meter was his testimony to Congress. I think it was 176 00:09:49,880 --> 00:09:53,600 Speaker 1: a big train wreck. I mean weirdly people said, um, 177 00:09:54,240 --> 00:09:56,560 Speaker 1: you know, he performed well, and some people liked it. 178 00:09:56,600 --> 00:09:59,040 Speaker 1: But I think he doesn't know what to say in 179 00:09:59,080 --> 00:10:03,880 Speaker 1: public because he's really unwilling to actually compromise in any 180 00:10:03,880 --> 00:10:06,880 Speaker 1: fundament where he's a genius. Come on, he got where 181 00:10:06,880 --> 00:10:08,920 Speaker 1: he got, as you show in the Facebook. In fact, 182 00:10:08,960 --> 00:10:13,280 Speaker 1: folks see it in theaters coming up. David, He's supposed 183 00:10:13,320 --> 00:10:17,760 Speaker 1: to hand off the business stuff to other people. Has 184 00:10:17,800 --> 00:10:23,160 Speaker 1: he done that? Well, yes, he has hand. I mean, basically, 185 00:10:23,200 --> 00:10:28,320 Speaker 1: all he cares about is the product and growth and growth, growth, growth. 186 00:10:28,360 --> 00:10:31,000 Speaker 1: That's the mantra that Facebook has always had and it 187 00:10:31,080 --> 00:10:34,400 Speaker 1: continues to have, and that's his obsession. Um. You know, 188 00:10:34,720 --> 00:10:38,040 Speaker 1: some people said, listening to his testimony that he didn't 189 00:10:38,040 --> 00:10:40,240 Speaker 1: even seem to understand what Liever was supposed to be 190 00:10:40,360 --> 00:10:42,840 Speaker 1: or how it was actually supposed to work. Um. You know, 191 00:10:42,880 --> 00:10:46,400 Speaker 1: he didn't answer many of the toughest questions. Um. But 192 00:10:46,400 --> 00:10:49,480 Speaker 1: but I think it's you know, what he goes to Washington, 193 00:10:49,559 --> 00:10:52,840 Speaker 1: what he really wants is just people to understand that 194 00:10:52,880 --> 00:10:55,440 Speaker 1: he's really doing a good thing. That's in his mind 195 00:10:55,760 --> 00:10:59,760 Speaker 1: what it's all about. He believes he is a a 196 00:11:00,000 --> 00:11:01,960 Speaker 1: gifts to the world. Facebook is a gift to the 197 00:11:02,000 --> 00:11:06,920 Speaker 1: world that we just don't understand. And if he believes 198 00:11:07,160 --> 00:11:09,560 Speaker 1: truly that if we just understood it, we wouldn't be 199 00:11:09,600 --> 00:11:11,720 Speaker 1: so critical of him. That's what we say every day 200 00:11:11,760 --> 00:11:15,120 Speaker 1: about John Farrell. David, It's always great to have you 201 00:11:15,160 --> 00:11:16,760 Speaker 1: with us on the program. Tom and I have thought 202 00:11:16,800 --> 00:11:20,079 Speaker 1: and talked about Inside Bill's Brain, which is this great 203 00:11:20,080 --> 00:11:24,280 Speaker 1: documentary about Bill Gates on Netflix, and within that documentary, 204 00:11:24,760 --> 00:11:27,920 Speaker 1: Bill Gates has asked about his performance down in Washington, 205 00:11:28,040 --> 00:11:31,520 Speaker 1: d C in the nineties and through the early two thousands, 206 00:11:32,080 --> 00:11:34,559 Speaker 1: and he uses one word to reflect on the younger 207 00:11:34,600 --> 00:11:39,080 Speaker 1: Bill Gates naive. Do you think Marks Zuckerberg is repeating 208 00:11:39,080 --> 00:11:41,000 Speaker 1: the errors that Bill Gates made when he had to 209 00:11:41,040 --> 00:11:44,199 Speaker 1: go to d C in the same way. Absolutely, I mean, 210 00:11:44,280 --> 00:11:47,120 Speaker 1: it's funny how much Gates has changed. And yes, I 211 00:11:47,160 --> 00:11:50,560 Speaker 1: absolutely think that analogy is completely apt, and the age 212 00:11:50,600 --> 00:11:53,079 Speaker 1: is not too dissimilar. Gates was a little older at 213 00:11:53,080 --> 00:11:58,319 Speaker 1: that time, so Zuckerberg. Actually, Zuckerberg's probably five to ten 214 00:11:58,400 --> 00:12:00,040 Speaker 1: years younger now that I think of it than it 215 00:12:00,320 --> 00:12:02,880 Speaker 1: was then. So you know, his age, he's just so young. 216 00:12:03,240 --> 00:12:06,400 Speaker 1: Let's face it, the guy worth billion dollars at age 217 00:12:06,440 --> 00:12:09,960 Speaker 1: thirty five or thirty six. And um, I think that also, 218 00:12:10,080 --> 00:12:12,680 Speaker 1: in his own mind, is a legitimizer of his behavior. 219 00:12:13,040 --> 00:12:16,120 Speaker 1: How could I be wrong if I'm so rich? I mean, really, so, 220 00:12:16,440 --> 00:12:19,600 Speaker 1: you know, I think there's a tragedy unfolding with this 221 00:12:19,640 --> 00:12:23,760 Speaker 1: company that is of monumental and historic scale. David Kirkpatrick, 222 00:12:24,000 --> 00:12:26,680 Speaker 1: it's a Facebook effect. David. There was a point in 223 00:12:26,760 --> 00:12:30,280 Speaker 1: the dorms of AMers College a few years ago were 224 00:12:30,320 --> 00:12:32,800 Speaker 1: you walked in some rich kid's room, and they had 225 00:12:32,840 --> 00:12:36,160 Speaker 1: the Apple you know, the mac, the little cub thing 226 00:12:36,240 --> 00:12:40,080 Speaker 1: now in the Smithsonian. Since that's time, Apple has been 227 00:12:40,160 --> 00:12:43,840 Speaker 1: rumored to die what fifteen times every time as a 228 00:12:43,880 --> 00:12:46,920 Speaker 1: product cycle. This is it. They're done, They're over. They're 229 00:12:46,920 --> 00:12:49,599 Speaker 1: really once again proving the resiliency here based on the 230 00:12:49,679 --> 00:12:53,040 Speaker 1: rumors on this new phone. Right, well, they are an 231 00:12:53,080 --> 00:12:56,640 Speaker 1: astonishingly resilient company. You joked before I came on that 232 00:12:56,679 --> 00:12:58,560 Speaker 1: you might have to run down to the Apple store 233 00:12:58,559 --> 00:13:02,640 Speaker 1: again later today. I actually I saw their new AirPod, 234 00:13:02,760 --> 00:13:04,439 Speaker 1: and I was thinking, you know, I have a perfectly 235 00:13:04,440 --> 00:13:07,000 Speaker 1: good AirPod, but I'm so reliant on it, and if 236 00:13:07,040 --> 00:13:09,880 Speaker 1: it worked even slightly better, you like, it would probably 237 00:13:09,920 --> 00:13:12,880 Speaker 1: be better. Therefore, it's worth it to spend twifty bucks 238 00:13:13,240 --> 00:13:16,040 Speaker 1: for a marginal increase of efficiency in my life. Yeah, 239 00:13:16,240 --> 00:13:19,199 Speaker 1: I mean face Apple's products, Like you almost said, Facebook, 240 00:13:19,320 --> 00:13:23,280 Speaker 1: Apple's products are the source of digital efficiency in my life. 241 00:13:23,760 --> 00:13:26,320 Speaker 1: And really, I mean I might think I'm addicted, I 242 00:13:26,400 --> 00:13:28,679 Speaker 1: might think that I'm overstressed because of all the things 243 00:13:28,760 --> 00:13:31,400 Speaker 1: I do, but I need it might work. Life depends 244 00:13:31,440 --> 00:13:33,880 Speaker 1: on it, and Apple facilitates it, and they do it 245 00:13:33,920 --> 00:13:38,840 Speaker 1: with enormous skill and capability. I mean, David, my entire 246 00:13:38,920 --> 00:13:41,160 Speaker 1: team wears AirPods so they don't have to talk to me. 247 00:13:41,320 --> 00:13:43,920 Speaker 1: You know, they in their ear all day, so you know, 248 00:13:43,960 --> 00:13:46,000 Speaker 1: I think they're busy. Okay, over there, I'm okay. Are 249 00:13:46,040 --> 00:13:50,600 Speaker 1: you okay? At Maria's on right now on Fox Biz 250 00:13:50,720 --> 00:13:56,840 Speaker 1: with zet Bill. It's my dog Bill with a superman. 251 00:13:56,880 --> 00:14:00,360 Speaker 1: How much you invoice in? I don't know, I'm not 252 00:14:00,520 --> 00:14:02,120 Speaker 1: you know, you know that Bill is free to do 253 00:14:02,160 --> 00:14:04,440 Speaker 1: what he wants. He can't get back to the conversation. 254 00:14:06,840 --> 00:14:09,000 Speaker 1: I want to talk about Facebook earnings as well after 255 00:14:09,040 --> 00:14:11,760 Speaker 1: the close. Any evidence so far, David, that the political 256 00:14:12,000 --> 00:14:16,840 Speaker 1: spotlight on Mark Zuckerberg is damaging the bottom line? Not really. 257 00:14:17,320 --> 00:14:19,680 Speaker 1: I mean, we've got to keep our ears closely attuned 258 00:14:19,720 --> 00:14:23,000 Speaker 1: to that because obviously their costs of remediating the many 259 00:14:23,040 --> 00:14:27,080 Speaker 1: harms they cause society are raising their their costs generally 260 00:14:27,160 --> 00:14:30,520 Speaker 1: a lot, but not so much that it's really had 261 00:14:30,560 --> 00:14:33,800 Speaker 1: a significant effect on a company whose profits are so monumental. 262 00:14:34,360 --> 00:14:38,200 Speaker 1: So so I don't think we'll see significant harm in 263 00:14:38,240 --> 00:14:42,840 Speaker 1: today's earnings. I think, you know, uh, growth revenues are 264 00:14:42,880 --> 00:14:46,760 Speaker 1: just powering forward. Although you see a massive shift over 265 00:14:46,840 --> 00:14:50,880 Speaker 1: time from the developed countries to the developing countries. I mean, really, 266 00:14:51,120 --> 00:14:54,200 Speaker 1: Americans are not using Facebook as much as they used to, 267 00:14:54,320 --> 00:14:56,440 Speaker 1: the same as true in Europe, and that is a 268 00:14:56,480 --> 00:14:58,960 Speaker 1: significant long term problem for them. On the other hand, 269 00:14:59,000 --> 00:15:02,400 Speaker 1: even to the degree we use it, we remain perfect 270 00:15:02,560 --> 00:15:06,360 Speaker 1: targets for advertising on Facebook because the advertisers don't have 271 00:15:06,800 --> 00:15:09,240 Speaker 1: a better place to go, and that continues to be 272 00:15:09,280 --> 00:15:11,200 Speaker 1: their ace in the whole. Well, David, let's explore the 273 00:15:11,240 --> 00:15:14,160 Speaker 1: analogy and the parallels with Microsoft a little bit further. 274 00:15:14,400 --> 00:15:16,400 Speaker 1: I forget the precise words you use, but it sounded 275 00:15:16,440 --> 00:15:18,800 Speaker 1: like something like tragedy and what was about to happen 276 00:15:18,800 --> 00:15:21,480 Speaker 1: with Facebook wasn't going to end very well. With Microsoft, 277 00:15:21,520 --> 00:15:24,720 Speaker 1: things have ended really, really well. In fact, arguably they've 278 00:15:24,760 --> 00:15:29,960 Speaker 1: got even better. Why does the movie end differently with Facebook? Well, 279 00:15:30,000 --> 00:15:32,600 Speaker 1: I'm not sure that it does. I'm not saying Facebook 280 00:15:32,760 --> 00:15:37,040 Speaker 1: inevitably will cannot respond to these social concerns and revive 281 00:15:37,080 --> 00:15:41,120 Speaker 1: itself somehow, But I think the key would be for 282 00:15:41,400 --> 00:15:45,480 Speaker 1: Zuckerberg to have some kind of fundamental revelation that he 283 00:15:45,640 --> 00:15:49,640 Speaker 1: thus far has not had about his need to change course. 284 00:15:50,200 --> 00:15:54,000 Speaker 1: And you know, a changing course probably would also entail 285 00:15:54,120 --> 00:15:57,720 Speaker 1: a significant hit to earnings over time. But then I 286 00:15:57,760 --> 00:16:00,280 Speaker 1: think they could possibly rebuild from their Look. They have 287 00:16:00,320 --> 00:16:03,160 Speaker 1: a service people want to use, and it's growing in 288 00:16:03,400 --> 00:16:05,800 Speaker 1: in the largest sense, you know, on a planetary level. 289 00:16:06,200 --> 00:16:09,040 Speaker 1: So I think they could revive. But I just don't 290 00:16:09,080 --> 00:16:11,640 Speaker 1: think yet they have the humility or, as we said earlier, 291 00:16:11,680 --> 00:16:13,800 Speaker 1: maybe the maturity to see what they need to do. 292 00:16:13,920 --> 00:16:17,800 Speaker 1: In February two thousand and fourteen, John Ferrell mentions Microsoft 293 00:16:17,800 --> 00:16:21,440 Speaker 1: folks David Kirkpatrick, one of the best practices that Mr 294 00:16:21,520 --> 00:16:27,000 Speaker 1: Nodela did is he revolutionized modern Microsoft. Wow. Uh gee, 295 00:16:27,000 --> 00:16:29,040 Speaker 1: I didn't know you were gonna ask about that. Well, 296 00:16:29,080 --> 00:16:32,920 Speaker 1: you know, I think interview i got Maria's dog into 297 00:16:32,920 --> 00:16:36,200 Speaker 1: the interview I'm doing. Okay. There's a humility at Microsoft 298 00:16:36,320 --> 00:16:40,480 Speaker 1: that is, you know. I recently was interviewing Brad Smith, 299 00:16:40,520 --> 00:16:43,640 Speaker 1: who's the number two of Microsoft stage about his new book, 300 00:16:43,640 --> 00:16:46,320 Speaker 1: which is really really excellent by the way. Uh, and 301 00:16:46,360 --> 00:16:49,800 Speaker 1: it's if there's enormous humility to his book, Microsoft has, 302 00:16:50,120 --> 00:16:52,400 Speaker 1: you know, I think you had to get rid of Bomber. 303 00:16:52,960 --> 00:16:55,480 Speaker 1: Bomber was a great leader in some ways, but he 304 00:16:55,520 --> 00:16:59,840 Speaker 1: had no humility. Uh. Satia recognizes that they are in 305 00:16:59,840 --> 00:17:04,440 Speaker 1: a position that requires a bigger picture view. And somehow 306 00:17:04,480 --> 00:17:07,000 Speaker 1: they had been a bomber, had positioned them in relation 307 00:17:07,040 --> 00:17:09,520 Speaker 1: to the cloud, that the raw material was there and 308 00:17:09,600 --> 00:17:11,399 Speaker 1: thought you had been a big part of it before 309 00:17:11,400 --> 00:17:14,600 Speaker 1: he became CEO. And you know they are now becoming 310 00:17:14,680 --> 00:17:17,280 Speaker 1: I think they're a genuine threat to Amazon as the 311 00:17:17,320 --> 00:17:20,960 Speaker 1: dominant cloud player. I wouldn't wouldn't rule out the possibility 312 00:17:21,280 --> 00:17:24,720 Speaker 1: that over the next few years, Microsoft could grow equally 313 00:17:24,760 --> 00:17:27,360 Speaker 1: strong and maybe even longer than Amazon. For a lot 314 00:17:27,359 --> 00:17:30,120 Speaker 1: of reasons. If Amazon gets very quickly, if Amazon gets 315 00:17:30,160 --> 00:17:32,280 Speaker 1: to a million employees, is out of signal for the 316 00:17:32,320 --> 00:17:35,960 Speaker 1: government to break up Amazon, breakup Microsoft, break up Bloomberg. 317 00:17:36,000 --> 00:17:41,880 Speaker 1: Surveillance were shot. A huge government pressure to break these 318 00:17:41,920 --> 00:17:45,320 Speaker 1: companies up is going to grow. I'm not a strong 319 00:17:45,359 --> 00:17:49,240 Speaker 1: believer that it's the right answer, but the pressure is real. 320 00:17:49,359 --> 00:17:51,960 Speaker 1: I mean. But the problem with Amazon and really some 321 00:17:52,080 --> 00:17:54,840 Speaker 1: expend all these companies is even though everybody loves to 322 00:17:54,880 --> 00:17:58,160 Speaker 1: complain about them and people in Washington hate their scale, 323 00:17:58,720 --> 00:18:02,040 Speaker 1: the average American wants to use their services, and that's 324 00:18:02,080 --> 00:18:06,440 Speaker 1: particularly true with Amazon. So politicians who start messing with Amazon, 325 00:18:06,680 --> 00:18:09,520 Speaker 1: you have to be very careful because customers, which are 326 00:18:09,600 --> 00:18:12,600 Speaker 1: voters are not gonna want too much change. This has 327 00:18:12,640 --> 00:18:15,199 Speaker 1: been wonderful. David. Thanks for a wide ranging fing here 328 00:18:15,240 --> 00:18:17,879 Speaker 1: this morning. Really good. I'm glad you mentioned Facebook. Seriously, 329 00:18:17,880 --> 00:18:21,760 Speaker 1: I would interview it was wide raging. I mean when 330 00:18:21,800 --> 00:18:25,280 Speaker 1: you do that, Patrick. I had Paul Kadrowski and David 331 00:18:25,359 --> 00:18:28,399 Speaker 1: Kirkpatrick on the day of the Facebook I p O 332 00:18:28,640 --> 00:18:32,600 Speaker 1: and they were both brilliant, and Kirkpatrick nailed it. Facebook 333 00:18:32,680 --> 00:18:35,560 Speaker 1: was going down in flames and he said there is 334 00:18:35,640 --> 00:18:53,960 Speaker 1: tangible growth, revenue and profit. This is a really important interview. 335 00:18:54,040 --> 00:18:56,480 Speaker 1: John's got a million questions for IRA Jersey at fixed 336 00:18:56,520 --> 00:18:59,919 Speaker 1: income IRA three months ten years spread, it's a pro spread. 337 00:19:00,000 --> 00:19:04,399 Speaker 1: Everybody looks at it. Inverted, inverted terribly. World's coming to 338 00:19:04,440 --> 00:19:08,280 Speaker 1: an end, summer into autumn, etcetera. It's come back out. 339 00:19:08,600 --> 00:19:11,480 Speaker 1: The tenure yield is higher than the three month Treasury 340 00:19:11,520 --> 00:19:15,719 Speaker 1: bill out to standard deviations off the president's election trend. 341 00:19:16,080 --> 00:19:19,560 Speaker 1: Can you say there's a breakout now away from inversion 342 00:19:19,640 --> 00:19:23,159 Speaker 1: and all that bloom? Well, I think yeah, the answer 343 00:19:23,200 --> 00:19:26,160 Speaker 1: is yes, absolutely. Now part of this has been engineered 344 00:19:26,200 --> 00:19:28,800 Speaker 1: by the Federal Reserve, because remember, the Federal Reserve is 345 00:19:28,800 --> 00:19:31,960 Speaker 1: going to be buying you know, sixty billion dollars of 346 00:19:32,000 --> 00:19:34,480 Speaker 1: tea bills a month over the next couple of months, 347 00:19:34,560 --> 00:19:36,840 Speaker 1: and in doing so, what they've done is that three 348 00:19:36,840 --> 00:19:40,439 Speaker 1: months TA bill yield has this dropped a ton so 349 00:19:40,560 --> 00:19:42,440 Speaker 1: actually on that day that they announced it to drop 350 00:19:42,560 --> 00:19:46,159 Speaker 1: ten basis points, so it uninverted and it kept on uninverting, 351 00:19:46,480 --> 00:19:50,399 Speaker 1: you know, primarily because of the Federal Reserve doing. You know, 352 00:19:50,680 --> 00:19:51,800 Speaker 1: I don't know what you want to call it, but 353 00:19:51,960 --> 00:19:54,840 Speaker 1: you know, not que is what what Jay pallis Ira 354 00:19:55,000 --> 00:19:56,800 Speaker 1: Jersey with us fixing him. And the reason I was 355 00:19:56,880 --> 00:19:58,760 Speaker 1: rattled John is because the only question I want to 356 00:19:58,800 --> 00:20:00,879 Speaker 1: ask him is when John and I go over to 357 00:20:00,880 --> 00:20:03,159 Speaker 1: do the election in Britain, We've got a delay and 358 00:20:03,240 --> 00:20:06,880 Speaker 1: see arsenal Man City, Oh that weekend. Yeah, yeah, that'll 359 00:20:07,040 --> 00:20:09,440 Speaker 1: that would be a fun match. I'm sending laughing because 360 00:20:09,440 --> 00:20:11,879 Speaker 1: our produced has got crazy at you for not introducing 361 00:20:11,880 --> 00:20:16,159 Speaker 1: our guest properly. I Jersey, the FED decides will be 362 00:20:16,960 --> 00:20:21,120 Speaker 1: I'm a Jersey of Blimberg Intelligence. Here's our chief US 363 00:20:21,200 --> 00:20:23,560 Speaker 1: right strategist and it's great to have you with a 364 00:20:23,600 --> 00:20:27,600 Speaker 1: Syrah good morning, good morning to talk about the FED 365 00:20:27,680 --> 00:20:32,000 Speaker 1: decision A whole Kish cut. Is that what you're looking for. Well, yeah, 366 00:20:32,000 --> 00:20:34,720 Speaker 1: so it would only be considered hawkish in that like 367 00:20:35,040 --> 00:20:37,080 Speaker 1: not hawkish, and that the Fed's next move is going 368 00:20:37,119 --> 00:20:40,640 Speaker 1: to be hiking, right, So it's hawkish relative to not easing. Um, 369 00:20:40,720 --> 00:20:42,359 Speaker 1: so I would say it's more like, like, does the 370 00:20:42,400 --> 00:20:45,720 Speaker 1: Fed turn to neutral instead of being in an easing mode? 371 00:20:45,800 --> 00:20:47,760 Speaker 1: And I think that the markets set up for that. 372 00:20:47,840 --> 00:20:50,360 Speaker 1: So when you look at what the market is currently pricing, 373 00:20:50,440 --> 00:20:53,600 Speaker 1: we're pricing a cut today and then not another cut 374 00:20:53,680 --> 00:20:56,080 Speaker 1: until May or June of next year. So basically the 375 00:20:56,080 --> 00:20:58,639 Speaker 1: markets priced for a long pause, and I think some 376 00:20:58,680 --> 00:21:00,840 Speaker 1: of the details around whether or not that's a realistic 377 00:21:00,920 --> 00:21:03,359 Speaker 1: outcome is something that the market's going to listen to, 378 00:21:03,480 --> 00:21:07,119 Speaker 1: particularly in the in the press conference afterwards. This is 379 00:21:07,119 --> 00:21:09,280 Speaker 1: really important because typically we go into these kind of 380 00:21:09,320 --> 00:21:11,800 Speaker 1: meetings with a little bit of tension between the market 381 00:21:11,840 --> 00:21:14,240 Speaker 1: and the Fed. We're saying there's not much tension relative 382 00:21:14,320 --> 00:21:17,399 Speaker 1: to previous matings this time around, Well, it doesn't seem 383 00:21:17,400 --> 00:21:19,800 Speaker 1: that way, you know. That. Being said, it also is 384 00:21:19,840 --> 00:21:22,399 Speaker 1: not it's not out of the question that the Federal 385 00:21:22,440 --> 00:21:25,359 Speaker 1: Reserve could wind up saying and sounding a little bit 386 00:21:25,359 --> 00:21:29,320 Speaker 1: more dubbish maybe than the market currently expects because you 387 00:21:29,359 --> 00:21:31,320 Speaker 1: could point to a lot of data, like even the 388 00:21:31,320 --> 00:21:34,440 Speaker 1: ADP data came out. Last month's data came out a 389 00:21:34,480 --> 00:21:36,879 Speaker 1: little bit better than expected, but the prior month was 390 00:21:36,920 --> 00:21:39,520 Speaker 1: revised down, so it actually winds up being closer to 391 00:21:39,560 --> 00:21:43,000 Speaker 1: a hundred thousand print instead of a hundred print. So 392 00:21:43,119 --> 00:21:45,720 Speaker 1: that means, you know, if if you're worried about the consumer, 393 00:21:45,840 --> 00:21:47,480 Speaker 1: you know, jobs is a thing that you could point 394 00:21:47,520 --> 00:21:49,520 Speaker 1: to that says, you know, it's still some fragility in 395 00:21:49,560 --> 00:21:52,400 Speaker 1: the market. Do we have an information vacuum today at 396 00:21:52,400 --> 00:21:55,280 Speaker 1: two because we're not getting all the other stuff we 397 00:21:55,359 --> 00:21:58,800 Speaker 1: typically get it a FED meeting. I don't think so, 398 00:21:58,840 --> 00:22:01,000 Speaker 1: maybe from two to two thirds, but you'll wind up 399 00:22:01,000 --> 00:22:06,080 Speaker 1: having enough information information after j PAL Now don't no forecast. 400 00:22:06,160 --> 00:22:08,280 Speaker 1: We know there's a ton of division on the fo 401 00:22:08,400 --> 00:22:12,439 Speaker 1: m C. We see in the dot plot. Well, I 402 00:22:12,480 --> 00:22:15,440 Speaker 1: just put out on Twitter shows the division. So Ira 403 00:22:15,520 --> 00:22:17,240 Speaker 1: talked to me about how the division comes out in 404 00:22:17,240 --> 00:22:19,760 Speaker 1: the news conference. Where is the challenge for CHAM and 405 00:22:19,760 --> 00:22:22,240 Speaker 1: PAL today, what's the biggest challenge? Well, first, I would 406 00:22:22,280 --> 00:22:25,080 Speaker 1: not be totally surprised if we saw one or two 407 00:22:25,119 --> 00:22:27,800 Speaker 1: descents of some members who didn't want to cut today 408 00:22:27,960 --> 00:22:29,639 Speaker 1: that would not surprise me at all. We saw a 409 00:22:29,680 --> 00:22:31,760 Speaker 1: couple of them back in July. It would not be 410 00:22:31,800 --> 00:22:35,720 Speaker 1: surprising if those same members ended up dissenting again today. 411 00:22:35,760 --> 00:22:39,000 Speaker 1: But that being said, you know, even if that happens, 412 00:22:39,200 --> 00:22:41,160 Speaker 1: I think j PAL then has to go out and say, look, 413 00:22:41,200 --> 00:22:44,080 Speaker 1: we have some members who think that the economy is 414 00:22:44,119 --> 00:22:46,920 Speaker 1: not doing that badly and therefore we shouldn't be cutting. 415 00:22:46,960 --> 00:22:49,040 Speaker 1: So you know, we're you know, we're going to be 416 00:22:49,119 --> 00:22:52,800 Speaker 1: data dependent from this time forward. Are we cutting into 417 00:22:52,920 --> 00:22:57,000 Speaker 1: negative real yields? Yes? Well so so really yields actually 418 00:22:57,040 --> 00:23:00,520 Speaker 1: have moved a little bit higher recently m esthetics so 419 00:23:00,520 --> 00:23:03,159 Speaker 1: so tenure really yields went from negative five basis points 420 00:23:03,160 --> 00:23:05,240 Speaker 1: to positive ten basis point. So it's not a lot, 421 00:23:05,280 --> 00:23:08,000 Speaker 1: but it's still enough to say that the market is 422 00:23:08,040 --> 00:23:11,919 Speaker 1: expecting some modest but not slowing growth from this point forward. 423 00:23:11,960 --> 00:23:15,119 Speaker 1: And that's I think that's an important important to this 424 00:23:15,160 --> 00:23:19,040 Speaker 1: because what you saw basically from November of eighteen through 425 00:23:19,119 --> 00:23:22,359 Speaker 1: the summer of this year was a slowing manufacturing sector. 426 00:23:22,720 --> 00:23:25,960 Speaker 1: That seems like maybe it's starting to stabilize a little 427 00:23:25,960 --> 00:23:27,600 Speaker 1: bit when you look at some of the survey data 428 00:23:27,680 --> 00:23:30,480 Speaker 1: like I S M new orders, if that turns like 429 00:23:30,520 --> 00:23:33,119 Speaker 1: it did in sixteen, then we can wind up with 430 00:23:33,160 --> 00:23:38,760 Speaker 1: a better economic environment going into fascinating thanks are we 431 00:23:38,800 --> 00:23:43,080 Speaker 1: going to be a different different afternoon today? It's it's 432 00:23:43,080 --> 00:23:48,160 Speaker 1: gonna be just jie, thank you so much. With Bloomberg intelligence. 433 00:24:02,400 --> 00:24:06,800 Speaker 1: Right now, we're gonna consider wester Ross. It'll be reporting 434 00:24:07,520 --> 00:24:10,280 Speaker 1: late on December twelveth Wester Ross will come in a 435 00:24:10,320 --> 00:24:15,600 Speaker 1: little late. Raphael is going right there. She's nailing it 436 00:24:15,680 --> 00:24:19,000 Speaker 1: with a Game of Thrones three theme onto December twelve. 437 00:24:19,160 --> 00:24:22,600 Speaker 1: What's House Targarian gonna do here? On December twelve? Trust 438 00:24:22,640 --> 00:24:24,320 Speaker 1: she'd let do that thing where I introduced the guest 439 00:24:24,359 --> 00:24:27,520 Speaker 1: first original, Let me try it, Let me try it? 440 00:24:27,560 --> 00:24:32,880 Speaker 1: Okayo bug opinion columnist. She's fabulous and she goes right 441 00:24:32,920 --> 00:24:36,080 Speaker 1: to John Snow, okay, what's gonna happen with the House 442 00:24:36,119 --> 00:24:38,960 Speaker 1: Targaryan on December twelve. I did have a reader who 443 00:24:39,119 --> 00:24:41,639 Speaker 1: sent me a note yesterday saying, uh, you know the 444 00:24:41,640 --> 00:24:45,320 Speaker 1: remainders are the Lanisters. How can you write so uh 445 00:24:45,600 --> 00:24:49,360 Speaker 1: leaving leaving aside you know who's going to benefit from 446 00:24:49,359 --> 00:24:52,400 Speaker 1: this winter? But December twelfth is uh, I would say 447 00:24:52,400 --> 00:24:54,960 Speaker 1: the most important election Britain has had in a generation. 448 00:24:55,000 --> 00:24:59,080 Speaker 1: It will determine not only Brexit, not only the how 449 00:24:59,119 --> 00:25:02,919 Speaker 1: and the win, but also really um the shape of 450 00:25:03,000 --> 00:25:09,280 Speaker 1: economic policy because we have two very different uh parties, 451 00:25:09,320 --> 00:25:13,719 Speaker 1: the government and the opposition, with with very divergent proposals 452 00:25:13,760 --> 00:25:17,159 Speaker 1: for how to run the British economy. Um, I wouldn't 453 00:25:17,200 --> 00:25:19,919 Speaker 1: say the Conservative one is a traditional conservative government by 454 00:25:19,960 --> 00:25:22,719 Speaker 1: any means. It's it's uh, you know, they've they've opened 455 00:25:22,720 --> 00:25:26,280 Speaker 1: the spending taps, but the labor offering is very radical 456 00:25:26,600 --> 00:25:30,119 Speaker 1: and so I think the the question for voters on 457 00:25:30,200 --> 00:25:32,719 Speaker 1: December twelve is is this a Brexit election or are 458 00:25:32,720 --> 00:25:35,600 Speaker 1: they voting on something much bigger than that? Is this 459 00:25:35,760 --> 00:25:40,360 Speaker 1: the first election where they become like Europe where it's 460 00:25:40,400 --> 00:25:46,160 Speaker 1: not just classically labor Tory, but that finally it's three 461 00:25:46,320 --> 00:25:49,480 Speaker 1: and four in five parties. Well, it did look for 462 00:25:49,520 --> 00:25:51,560 Speaker 1: a while like this would be a sort of four 463 00:25:51,600 --> 00:25:55,199 Speaker 1: party race with the Conservatives, the Labor Party, the newly 464 00:25:55,240 --> 00:25:58,680 Speaker 1: resurgent Liberal Democrat Party and Nigel Farage is Brexit Party. Now, 465 00:25:58,680 --> 00:26:03,000 Speaker 1: what's happened at Boris Johnson sealed his new deal with 466 00:26:03,040 --> 00:26:05,919 Speaker 1: the European Union is that the Brexit Party has fallen 467 00:26:05,960 --> 00:26:09,679 Speaker 1: back quite significantly in the polls um they were around 468 00:26:09,720 --> 00:26:13,840 Speaker 1: I think even the last I looked and we haven't 469 00:26:13,880 --> 00:26:16,919 Speaker 1: heard a lot from Farage, but the Conservatives are you know, 470 00:26:17,000 --> 00:26:20,399 Speaker 1: quietly and not so quietly, telling him, look back off, 471 00:26:20,440 --> 00:26:23,520 Speaker 1: you want Brexit. We're delivering Brexit. It would be you know, 472 00:26:23,640 --> 00:26:27,040 Speaker 1: crazy to to run against our deal. And indeed many 473 00:26:27,080 --> 00:26:32,240 Speaker 1: Brexit Party UM candidates and supporters are you know, wavering, 474 00:26:32,280 --> 00:26:33,960 Speaker 1: and some of them have said, look, this deal is 475 00:26:33,960 --> 00:26:35,680 Speaker 1: is good enough for us. So I think now we're 476 00:26:35,720 --> 00:26:39,000 Speaker 1: down to maybe three parties. We don't think the Liberal 477 00:26:39,040 --> 00:26:41,239 Speaker 1: Democrats are going to be strong enough to to to 478 00:26:41,240 --> 00:26:45,040 Speaker 1: get a majority by any stretch, but there is a 479 00:26:45,080 --> 00:26:48,359 Speaker 1: possibility that remain parties, if they did well enough, could 480 00:26:48,400 --> 00:26:51,320 Speaker 1: somehow cobble together a coalition. But really, at the moment, 481 00:26:51,400 --> 00:26:53,639 Speaker 1: this is Boris Johnson's election to lose. Told to me 482 00:26:53,680 --> 00:26:55,760 Speaker 1: about the campaigning to wrest the mistakes so many of 483 00:26:55,800 --> 00:26:58,960 Speaker 1: us made, myself included going into the nast election in 484 00:26:59,720 --> 00:27:01,720 Speaker 1: saying June of that year was believing it would be 485 00:27:01,760 --> 00:27:05,159 Speaker 1: a single issue election. Then the campaigning started and Jeremy 486 00:27:05,240 --> 00:27:08,560 Speaker 1: Corbyn hardly talked about the EU and Brexit. Is this 487 00:27:08,600 --> 00:27:10,719 Speaker 1: a lot more than just about Brexit this time around. 488 00:27:11,160 --> 00:27:13,720 Speaker 1: I think it will. It's always more than about Brexit 489 00:27:13,800 --> 00:27:17,000 Speaker 1: because you know, for voters, in their day to day lives, 490 00:27:17,040 --> 00:27:19,520 Speaker 1: what they really care about her you know, how how 491 00:27:20,119 --> 00:27:23,440 Speaker 1: crowded is their child's school classroom? Just Phillips the Labor 492 00:27:23,480 --> 00:27:26,159 Speaker 1: and he just stood up in Parliament and said, my 493 00:27:26,200 --> 00:27:28,439 Speaker 1: son is turning eleven. He can only go to school 494 00:27:28,480 --> 00:27:31,119 Speaker 1: four and a half days a week. His classroom is 495 00:27:31,240 --> 00:27:32,919 Speaker 1: you know, thirty kids in it. What are you going 496 00:27:32,960 --> 00:27:35,159 Speaker 1: to do about that? So the Labor will try to 497 00:27:35,240 --> 00:27:38,800 Speaker 1: make this election about those issues that will that will 498 00:27:38,880 --> 00:27:41,920 Speaker 1: undoubtedly resonate. But Labor has got a problem. It's Brexit 499 00:27:42,000 --> 00:27:47,000 Speaker 1: policy is a bit of a mess. Um entails a negotiation, 500 00:27:47,040 --> 00:27:52,000 Speaker 1: a renegotiation, it entails a referendum, maybe two referendums if 501 00:27:52,040 --> 00:27:55,399 Speaker 1: they if if they join with the Scottish National Party. 502 00:27:55,520 --> 00:27:58,439 Speaker 1: And that's not an easy cell because you capture in 503 00:27:58,440 --> 00:28:01,800 Speaker 1: your writing not only the elite of London and all 504 00:28:01,800 --> 00:28:05,080 Speaker 1: the you know, the hardy stuff we look at every day, 505 00:28:05,119 --> 00:28:08,479 Speaker 1: but also what the people are talking about. Take us 506 00:28:08,520 --> 00:28:10,840 Speaker 1: away from, you know, the day to day madness of 507 00:28:10,880 --> 00:28:14,560 Speaker 1: this and for our American audience, explain and you name 508 00:28:14,640 --> 00:28:17,440 Speaker 1: the village, you named the town, you name the city. 509 00:28:17,840 --> 00:28:22,600 Speaker 1: How are the people responding to December twelfth? I think 510 00:28:22,640 --> 00:28:26,440 Speaker 1: there was a time when people did not want another election. 511 00:28:26,480 --> 00:28:29,080 Speaker 1: There's been you know, four or three or four votes, 512 00:28:29,119 --> 00:28:33,040 Speaker 1: You've had referendums, you had the seen election. At this point, 513 00:28:33,119 --> 00:28:36,879 Speaker 1: they're so tired of the gridlock and parliament and hearing 514 00:28:36,920 --> 00:28:39,840 Speaker 1: about Brexit. I think everyone is resigned to having a 515 00:28:39,960 --> 00:28:43,400 Speaker 1: chance to change this parliament and move forward. But you know, 516 00:28:43,440 --> 00:28:46,080 Speaker 1: you want to talk about a town or place where 517 00:28:46,240 --> 00:28:51,160 Speaker 1: where it gets real. Wolverhampton in the Midlands, Brexit voting 518 00:28:51,200 --> 00:28:54,560 Speaker 1: area but Labor supporting. So what do those voters do. 519 00:28:54,560 --> 00:28:58,200 Speaker 1: Do they go with Boris Johnson or do they stick 520 00:28:58,280 --> 00:29:00,400 Speaker 1: with the Labor Party as their families all aways had 521 00:29:00,440 --> 00:29:03,200 Speaker 1: that that's going to be where this is going to decided. 522 00:29:03,440 --> 00:29:05,840 Speaker 1: Thank you so much. And this is a perspective we value. 523 00:29:05,880 --> 00:29:07,840 Speaker 1: I you know, have to read in on this folks, 524 00:29:07,880 --> 00:29:10,160 Speaker 1: to be honest. I think it's a soccer team. John 525 00:29:10,200 --> 00:29:14,000 Speaker 1: Farroll talks about about once every twelve or fourteen weeks. 526 00:29:14,080 --> 00:29:18,520 Speaker 1: But Chris Raphael, what is the affinity the attraction of 527 00:29:18,560 --> 00:29:23,760 Speaker 1: the Prime minister to people who are generationally in doubt 528 00:29:23,800 --> 00:29:28,400 Speaker 1: of the conservative elite of London. Yeah. I think this 529 00:29:28,480 --> 00:29:34,200 Speaker 1: Prime Minister is going to try to distance himself from 530 00:29:34,720 --> 00:29:38,080 Speaker 1: past Conservative governments. And one way he does that is say, 531 00:29:38,320 --> 00:29:41,600 Speaker 1: I will spend the money. Um, I'm not afraid to 532 00:29:41,720 --> 00:29:44,320 Speaker 1: port into in the NHS. New This is something Americans 533 00:29:44,360 --> 00:29:48,960 Speaker 1: I think. Um, you may not understand that the NHS 534 00:29:49,000 --> 00:29:51,480 Speaker 1: has an eight percent approval rating in this country. Eight 535 00:29:51,600 --> 00:29:55,240 Speaker 1: percent of people love the fact that they have health 536 00:29:55,240 --> 00:29:58,960 Speaker 1: care free at the point of delivery. It's taxpayer funded. 537 00:29:59,160 --> 00:30:00,960 Speaker 1: And you have a concern p bit of government that 538 00:30:01,080 --> 00:30:04,320 Speaker 1: is going, you know, full on towards spending more money 539 00:30:04,360 --> 00:30:06,560 Speaker 1: on that, more money on police, more money on education. 540 00:30:06,640 --> 00:30:09,000 Speaker 1: That's how he's going to try to win over those 541 00:30:09,120 --> 00:30:11,360 Speaker 1: voters who have said, you know, the Conservatives there for 542 00:30:12,200 --> 00:30:15,800 Speaker 1: uh you know, therefore the wealthy voters in the southeast 543 00:30:15,920 --> 00:30:18,400 Speaker 1: and uh, you know, he will try to appeal to that. 544 00:30:18,440 --> 00:30:20,240 Speaker 1: He's also going to try to peel to young voters. 545 00:30:20,240 --> 00:30:24,760 Speaker 1: A Conservatives have lost the youth vote, um in and 546 00:30:24,760 --> 00:30:28,400 Speaker 1: he's going to try to bring them back. Um and uh, 547 00:30:28,680 --> 00:30:30,880 Speaker 1: to the extent that he can do that, he's got 548 00:30:30,960 --> 00:30:33,000 Speaker 1: very good chances, trust, thank you. So much writing for 549 00:30:33,000 --> 00:30:35,479 Speaker 1: Bloomberg Opinion. Can't say enough about the game of Thronese 550 00:30:35,480 --> 00:30:38,560 Speaker 1: angle from twenty four hours ago, as Trres roth Field 551 00:30:38,600 --> 00:30:41,680 Speaker 1: dives into this election to December twelve. I learned a 552 00:30:41,680 --> 00:30:43,560 Speaker 1: lot there. Hope that it it was good for all of 553 00:30:43,560 --> 00:30:47,960 Speaker 1: you as well. She's with Bloomberg Opinion. Thanks for listening 554 00:30:48,000 --> 00:30:52,560 Speaker 1: to the Bloomberg Surveillance podcast. Subscribe and listen to interviews 555 00:30:52,600 --> 00:30:57,840 Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. 556 00:30:58,400 --> 00:31:01,720 Speaker 1: I'm on Twitter at tom Key before the podcast. You 557 00:31:01,760 --> 00:31:05,160 Speaker 1: can always catch us worldwide. I'm Bloomberg Radio.