1 00:00:09,880 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 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 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:28,240 Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg Paul 5 00:00:28,280 --> 00:00:30,800 Speaker 1: Lori Kelvin sin Is here made so much going on 6 00:00:30,880 --> 00:00:33,800 Speaker 1: in the previous hours this morning that it's nice just 7 00:00:33,840 --> 00:00:37,000 Speaker 1: to get cozy with Laurie here in radio to really 8 00:00:37,120 --> 00:00:42,479 Speaker 1: get focused on the plan forward. Let's review Q four 9 00:00:42,600 --> 00:00:47,760 Speaker 1: train wreck, double digit first half. What's the kelvinsin and 10 00:00:47,800 --> 00:00:50,519 Speaker 1: now what. I think we're gonna be range bound through 11 00:00:50,560 --> 00:00:52,879 Speaker 1: the end of the year, and my guess is that 12 00:00:52,960 --> 00:00:54,920 Speaker 1: the next move is lower. I think we're going to 13 00:00:55,000 --> 00:00:58,720 Speaker 1: have a tough reporting season. I don't anticipate a recession 14 00:00:58,760 --> 00:01:00,680 Speaker 1: heating up this year. I don't think we're going to 15 00:01:00,760 --> 00:01:03,440 Speaker 1: slip into one next year. But and so I do 16 00:01:03,520 --> 00:01:05,880 Speaker 1: think you'll get a rebound towards the end of the year. 17 00:01:06,319 --> 00:01:08,640 Speaker 1: Um and you know, look, if we're wrong about earning 18 00:01:08,680 --> 00:01:10,640 Speaker 1: season and it comes in a little bit better than expected, 19 00:01:10,840 --> 00:01:12,920 Speaker 1: I do think we've got valuation problems. I think we've 20 00:01:12,920 --> 00:01:15,080 Speaker 1: got crowding problems, and I think we're still confronted with 21 00:01:15,120 --> 00:01:18,200 Speaker 1: slowing growth next year. The investors I speak with are 22 00:01:18,319 --> 00:01:20,800 Speaker 1: very barish. I think they're inclined to take profits have 23 00:01:20,880 --> 00:01:23,440 Speaker 1: given the opportunity, So either way, I think we're going 24 00:01:23,480 --> 00:01:25,000 Speaker 1: to get a pull back before the end of the year. 25 00:01:25,040 --> 00:01:27,839 Speaker 1: And Paul's so important here. What's the guy's named John? 26 00:01:27,880 --> 00:01:31,840 Speaker 1: Who Paul? What's his name? I'm not sure. I can't remember. 27 00:01:32,640 --> 00:01:35,920 Speaker 1: This guy named John talked up the Bank of America 28 00:01:36,440 --> 00:01:39,240 Speaker 1: long only by side survey. It was defensive. I've heard 29 00:01:39,280 --> 00:01:42,000 Speaker 1: that hedge funds are defensive. What's the bet on the 30 00:01:42,040 --> 00:01:44,760 Speaker 1: street now? Are they defensive or not? So I think 31 00:01:44,800 --> 00:01:48,120 Speaker 1: there's a disconnect between what's in people's heads and what's 32 00:01:48,120 --> 00:01:51,200 Speaker 1: in people's portfolios. And when you get into side inside 33 00:01:51,200 --> 00:01:54,200 Speaker 1: people's heads, they say, look, we're late cycle, everything slowing. 34 00:01:54,240 --> 00:01:56,880 Speaker 1: Business copendance was great, it's you know, not fallowing off 35 00:01:56,880 --> 00:01:59,000 Speaker 1: a cliff. But we think things are slowing. But when 36 00:01:59,040 --> 00:02:01,400 Speaker 1: you look at what people own, you know they're they're 37 00:02:01,440 --> 00:02:04,760 Speaker 1: still heavily into cyclicals. Um. As I talked to people 38 00:02:04,760 --> 00:02:07,560 Speaker 1: about getting to the defensives, they're like, oh, the utilities 39 00:02:07,600 --> 00:02:10,240 Speaker 1: are too expensive, the staples are too fundamentally challenged. I 40 00:02:10,280 --> 00:02:13,280 Speaker 1: can't touch reads, but they have this itch to get defensive. 41 00:02:13,280 --> 00:02:15,200 Speaker 1: They just don't know how. So I think there's kind 42 00:02:15,200 --> 00:02:17,120 Speaker 1: of a a war going on with what they want 43 00:02:17,160 --> 00:02:19,880 Speaker 1: to do in their portfolios, but their inclination is to 44 00:02:19,919 --> 00:02:22,480 Speaker 1: get more defensive. So, Laurie, one of the areas that 45 00:02:22,560 --> 00:02:24,680 Speaker 1: has been under performing have been small caps. I know 46 00:02:24,720 --> 00:02:28,160 Speaker 1: people have been asking about is there some value opportunities 47 00:02:28,200 --> 00:02:29,840 Speaker 1: in small caps? Why the small cap stock has been 48 00:02:29,880 --> 00:02:32,399 Speaker 1: under performing, and what should investors be doing there. So, look, 49 00:02:32,400 --> 00:02:34,240 Speaker 1: I think the small caps have been under performing for 50 00:02:34,280 --> 00:02:38,680 Speaker 1: two very good reasons. They've deserved the underperformance that they've gotten. UM. First, 51 00:02:38,720 --> 00:02:41,519 Speaker 1: I think they've been having a tough time managing margin pressures, 52 00:02:41,520 --> 00:02:44,720 Speaker 1: and that's everything from labor costs to the tariff related 53 00:02:44,760 --> 00:02:48,000 Speaker 1: input costs UM. And you know we've seen this. The 54 00:02:48,200 --> 00:02:51,480 Speaker 1: revenue expectations have been fine, the earnings expectations didn't go 55 00:02:51,560 --> 00:02:52,880 Speaker 1: up in the first half of the year the way 56 00:02:52,880 --> 00:02:55,800 Speaker 1: the large caps did UM, and we think that's just 57 00:02:55,840 --> 00:02:58,280 Speaker 1: because small caps they just don't have as much bargaining 58 00:02:58,360 --> 00:03:01,120 Speaker 1: power with their suppliers, with their with their employee basis, 59 00:03:01,440 --> 00:03:03,760 Speaker 1: and they just can't manage through quite as well. I 60 00:03:03,760 --> 00:03:06,120 Speaker 1: think the second thing we've noticed is that the small 61 00:03:06,200 --> 00:03:08,399 Speaker 1: large trade is just starting to act like a very 62 00:03:08,400 --> 00:03:11,919 Speaker 1: cyclical trade again. So as u S economic surprises have deteriorated, 63 00:03:12,200 --> 00:03:14,560 Speaker 1: small caps have lagged. As you've seen a lot of 64 00:03:14,560 --> 00:03:17,320 Speaker 1: these economic indicators roll over and start to slow, small 65 00:03:17,360 --> 00:03:19,519 Speaker 1: caps have lagged. The small caps are telling you that 66 00:03:19,560 --> 00:03:22,920 Speaker 1: people are concerned about the economy. So another area that 67 00:03:23,040 --> 00:03:26,760 Speaker 1: I think people would like to have some maybe more exposure, 68 00:03:26,800 --> 00:03:29,480 Speaker 1: but they're just concerned about the political overhang. The regulatory 69 00:03:29,560 --> 00:03:32,760 Speaker 1: overhang is healthcare. Are there any areas within healthcare you 70 00:03:32,800 --> 00:03:35,520 Speaker 1: think your clients should be looking so I would say 71 00:03:35,560 --> 00:03:38,440 Speaker 1: not specific areas. Um. You know what we noticed in 72 00:03:38,520 --> 00:03:41,360 Speaker 1: April when Bernie Sanders was first starting to make some 73 00:03:41,360 --> 00:03:43,480 Speaker 1: some gains on Biden and the polling data you had 74 00:03:43,520 --> 00:03:46,080 Speaker 1: like a one week earthquake, and healthcare stocks If you 75 00:03:46,120 --> 00:03:49,600 Speaker 1: looked at the different industries, everything went down pretty similarly, 76 00:03:49,640 --> 00:03:51,200 Speaker 1: so there was really no place to hide in the 77 00:03:51,200 --> 00:03:53,760 Speaker 1: E t F data turned really negative. The way we're 78 00:03:53,760 --> 00:03:56,440 Speaker 1: approaching healthcare is were staying neutral, and I would say, 79 00:03:56,440 --> 00:03:58,800 Speaker 1: you know, within that neutral, it feels like a negative bias. 80 00:03:59,320 --> 00:04:02,440 Speaker 1: UM we think are cheap. The political risk is enormous. 81 00:04:02,480 --> 00:04:04,840 Speaker 1: I think that was confirmed over the past two nights. 82 00:04:04,880 --> 00:04:07,440 Speaker 1: This issue was a front and center. It is not 83 00:04:07,480 --> 00:04:10,040 Speaker 1: going to go away. Um. The only thing that really 84 00:04:10,040 --> 00:04:12,280 Speaker 1: looks cheap though, is the providers and services, which is 85 00:04:12,400 --> 00:04:14,760 Speaker 1: right at the epicenter of the policy debate that's heating 86 00:04:14,840 --> 00:04:17,880 Speaker 1: up right. Okay, if we take into Paul's good question, 87 00:04:18,560 --> 00:04:21,560 Speaker 1: we had the merger ab v or whatever. Okay, you've 88 00:04:21,560 --> 00:04:25,280 Speaker 1: got a company like Abbott Labs. They're doing physical stuff 89 00:04:25,279 --> 00:04:28,839 Speaker 1: and healthcare things, and then they got the whole farm 90 00:04:28,880 --> 00:04:33,159 Speaker 1: a drug oh kind of thing. Which area is a 91 00:04:33,200 --> 00:04:36,960 Speaker 1: more intelligent place to be for five years out look, 92 00:04:36,960 --> 00:04:38,640 Speaker 1: I would say, if you look at the equipment and 93 00:04:38,680 --> 00:04:41,800 Speaker 1: services side of the equations, I I can't you know, 94 00:04:41,839 --> 00:04:43,520 Speaker 1: I can't get bullish there. I mean, that's where we 95 00:04:43,560 --> 00:04:47,600 Speaker 1: see the most expensive valuations within healthcare. But this is critical. 96 00:04:47,640 --> 00:04:50,600 Speaker 1: It's it's not that it's a bad industry, it's just 97 00:04:50,720 --> 00:04:53,640 Speaker 1: completely that everybody's there. And when we look at long 98 00:04:53,720 --> 00:04:57,520 Speaker 1: only positioning data, large cap growth investors are already heavily 99 00:04:57,640 --> 00:04:59,760 Speaker 1: overweight that part of the market. So I'm just not 100 00:05:00,080 --> 00:05:02,880 Speaker 1: or who the incremental buyer is So, Laurie, do you 101 00:05:02,920 --> 00:05:04,720 Speaker 1: when you go around the country talking to clients, are 102 00:05:04,760 --> 00:05:07,159 Speaker 1: are you hearing anybody saying, you know, we're up six 103 00:05:07,680 --> 00:05:10,400 Speaker 1: on the SMP. I'm just taking my you know, baseballs 104 00:05:10,400 --> 00:05:12,640 Speaker 1: and going home. You know, most of the clients I 105 00:05:12,680 --> 00:05:15,040 Speaker 1: talked to can't do that. Frankly, they're just not allowed 106 00:05:15,080 --> 00:05:17,800 Speaker 1: to run that much cash in their portfolios. What they 107 00:05:17,800 --> 00:05:20,520 Speaker 1: are trying to do is figure out where to go next. 108 00:05:20,560 --> 00:05:22,680 Speaker 1: And I would say, what I'm hearing from some clients 109 00:05:22,760 --> 00:05:24,880 Speaker 1: is there's like, look, you know, we were not inclined 110 00:05:24,920 --> 00:05:27,360 Speaker 1: to take big sector bets. Anyway, we're probably less inclined 111 00:05:27,400 --> 00:05:30,280 Speaker 1: to do that. We're looking for the best opportunities within industries, 112 00:05:30,320 --> 00:05:33,039 Speaker 1: within sectors, you know, looking for things that have been 113 00:05:33,120 --> 00:05:35,760 Speaker 1: derisked from some of the big tensions that we've had, 114 00:05:36,000 --> 00:05:38,240 Speaker 1: you know, whether it's trade or the broader slowdown in 115 00:05:38,240 --> 00:05:41,000 Speaker 1: corporate confidence. UM. I think that a lot of people 116 00:05:41,000 --> 00:05:43,200 Speaker 1: that are struggling with what to do, they realized that 117 00:05:43,200 --> 00:05:45,280 Speaker 1: a lot of their winners, um, they've been in them 118 00:05:45,279 --> 00:05:47,599 Speaker 1: a long time, they're expensive. They're sort of hanging onto 119 00:05:47,640 --> 00:05:50,560 Speaker 1: a lot of them now, software stocks, for example, simply 120 00:05:50,600 --> 00:05:52,200 Speaker 1: because they don't feel like they have a lot of 121 00:05:52,200 --> 00:05:55,800 Speaker 1: better alternatives right now. I mean I look at it 122 00:05:56,160 --> 00:05:59,440 Speaker 1: all in all, Laurie, and and I just within range bound, 123 00:06:00,000 --> 00:06:03,560 Speaker 1: where's the opportunity, which sectors the opportunity. So in terms 124 00:06:03,600 --> 00:06:05,560 Speaker 1: of what we like, you know, we're still overweight on 125 00:06:05,600 --> 00:06:08,080 Speaker 1: financials and that's been a tough call, um, But we 126 00:06:08,160 --> 00:06:10,480 Speaker 1: do think the market is starting to get more interest 127 00:06:10,560 --> 00:06:13,400 Speaker 1: in dividends, and so I think financials really stands out 128 00:06:13,440 --> 00:06:15,960 Speaker 1: on that front. Financials are all still also still buying 129 00:06:16,000 --> 00:06:19,120 Speaker 1: back their shares pretty aggressively, and we think the banks 130 00:06:19,120 --> 00:06:21,560 Speaker 1: have generally been d risks, so we don't expect big 131 00:06:21,560 --> 00:06:23,120 Speaker 1: blow ups at the end of the cycle like we 132 00:06:23,240 --> 00:06:26,360 Speaker 1: got last time. UM. I still like consumer staple stocks 133 00:06:26,440 --> 00:06:29,320 Speaker 1: as a way to get defensive. They're not cheap on pe, 134 00:06:29,320 --> 00:06:32,240 Speaker 1: but they look really undervalue versus the market on cash flow. 135 00:06:32,279 --> 00:06:34,279 Speaker 1: They had a good earning season last time. I know 136 00:06:34,279 --> 00:06:36,800 Speaker 1: they've struggled a little bit out of the gate here, um, 137 00:06:36,839 --> 00:06:39,359 Speaker 1: but we do think they've spent the last year plus, 138 00:06:39,600 --> 00:06:41,839 Speaker 1: you know, getting their act together on pricing and they're 139 00:06:41,880 --> 00:06:43,919 Speaker 1: executing now. They've been doing a very good time of 140 00:06:43,960 --> 00:06:47,840 Speaker 1: getting costs down and they are so hated, so under 141 00:06:47,880 --> 00:06:50,240 Speaker 1: own so out of favor. Um, we think they're still 142 00:06:50,320 --> 00:06:52,919 Speaker 1: upside there. Lori Kelvasin, and thank you so much RBC 143 00:06:53,120 --> 00:06:55,760 Speaker 1: Capital Markets. As we get ready for the third quarter 144 00:06:55,760 --> 00:06:58,240 Speaker 1: of Q three they call it in the street Q 145 00:06:58,440 --> 00:07:16,160 Speaker 1: three right now nineteen, UM, let's get right to it 146 00:07:16,360 --> 00:07:20,680 Speaker 1: with Ambassador Robert Harmetts. He joins us some Kissinger associates. 147 00:07:20,680 --> 00:07:24,720 Speaker 1: We should have a two hour conversation with him this morning, 148 00:07:24,760 --> 00:07:27,600 Speaker 1: but I guess instead it'll be far too short. Ambassador, 149 00:07:27,640 --> 00:07:29,720 Speaker 1: Thank you so much for joining us very nicely with 150 00:07:29,760 --> 00:07:33,120 Speaker 1: you an open question of the President in Japan is 151 00:07:33,280 --> 00:07:37,480 Speaker 1: second trip in recent weeks as well. What is the 152 00:07:37,560 --> 00:07:42,560 Speaker 1: best American outcome out of this? Gummit? Well, the best 153 00:07:42,600 --> 00:07:45,720 Speaker 1: outcome would be to be able to reach agreement on 154 00:07:45,840 --> 00:07:50,320 Speaker 1: many of these so called structural issues between the US 155 00:07:50,360 --> 00:07:54,600 Speaker 1: and China. Intellectual property protection will be one, trade secrets 156 00:07:54,640 --> 00:07:59,000 Speaker 1: protections another question of uh levels of Chinese support for 157 00:07:59,040 --> 00:08:02,320 Speaker 1: state enterprises, but that is very unlikely to happen. I 158 00:08:02,360 --> 00:08:05,000 Speaker 1: don't think enough preparation has been done to enable that 159 00:08:05,080 --> 00:08:09,360 Speaker 1: to occur. So after that, the best option is to 160 00:08:09,600 --> 00:08:13,480 Speaker 1: at least have a truce that enables the negotiators to 161 00:08:13,560 --> 00:08:17,240 Speaker 1: get back to their conversations and at least try to 162 00:08:17,280 --> 00:08:20,200 Speaker 1: deal with them, recognizing that you can't resolve all these 163 00:08:20,240 --> 00:08:23,400 Speaker 1: issues in one negotiation, and so you need to resolve 164 00:08:23,520 --> 00:08:27,160 Speaker 1: some and then have a process, an ongoing process for 165 00:08:27,240 --> 00:08:29,800 Speaker 1: dealing with others over a sustained period of time. You 166 00:08:29,800 --> 00:08:32,360 Speaker 1: sound like you worked for Barack Obama, not Donald Trump. 167 00:08:32,720 --> 00:08:34,719 Speaker 1: With that there was a photo op today. I want 168 00:08:34,720 --> 00:08:37,199 Speaker 1: to go to the photo of yesterday at the Australian meeting, 169 00:08:37,559 --> 00:08:42,040 Speaker 1: which shows a divide in trade within the administration. Secretary Ross, 170 00:08:42,040 --> 00:08:45,679 Speaker 1: Secretary Minution Lawrence Cutlo not there. Down at the other 171 00:08:45,800 --> 00:08:48,800 Speaker 1: end of the table. Peter Navarro is, well, can you 172 00:08:48,880 --> 00:08:55,240 Speaker 1: get anything done in foreign policy with administration advisors that divided? Well, 173 00:08:55,400 --> 00:08:57,240 Speaker 1: part of the problem in the past, there have been 174 00:08:57,240 --> 00:09:02,040 Speaker 1: administrations that have divisions. But the problem that this administration 175 00:09:02,240 --> 00:09:06,600 Speaker 1: tends to have is it creates an uncertainty around where 176 00:09:06,640 --> 00:09:09,360 Speaker 1: it is at any given point, and it's very hard 177 00:09:09,440 --> 00:09:12,000 Speaker 1: for other countries to negotiate with the United States. If 178 00:09:12,040 --> 00:09:15,400 Speaker 1: they are asked to put their best offer on the table, 179 00:09:15,559 --> 00:09:18,280 Speaker 1: they make a deal, and then a little bit later, 180 00:09:18,559 --> 00:09:20,640 Speaker 1: a matter of weeks or months, the US comes back 181 00:09:20,640 --> 00:09:22,679 Speaker 1: and said, oh, we we know we made a deal 182 00:09:22,720 --> 00:09:25,960 Speaker 1: with you, but we want more and therefore it's very 183 00:09:26,040 --> 00:09:30,560 Speaker 1: hard when you're not consistent to be a trading partner 184 00:09:30,600 --> 00:09:32,880 Speaker 1: that is going to be able to make good deals 185 00:09:32,920 --> 00:09:36,439 Speaker 1: because people may not have confidence Chi'll adhere to the deal. Ambassador, 186 00:09:36,520 --> 00:09:39,360 Speaker 1: let me bring in my colleague Paul Sweeney and Nashville today. Paul, 187 00:09:39,640 --> 00:09:41,800 Speaker 1: Thanks Tom, Ambassador. I was wondering if you could put 188 00:09:41,840 --> 00:09:45,280 Speaker 1: us into the shoes of President g and the Chinese 189 00:09:45,280 --> 00:09:48,960 Speaker 1: delegation here in Osaka. What do you think China really 190 00:09:48,960 --> 00:09:52,840 Speaker 1: wants to achieve here? I do think the Chinese would 191 00:09:52,880 --> 00:09:57,960 Speaker 1: like to have some kind of stability in their economic 192 00:09:58,000 --> 00:10:01,240 Speaker 1: relationship with the United States, which means they're probably willing 193 00:10:01,280 --> 00:10:05,839 Speaker 1: to make some concessions. But I emphasize the words some. 194 00:10:06,880 --> 00:10:09,800 Speaker 1: I don't think that the US is likely to get 195 00:10:10,600 --> 00:10:14,680 Speaker 1: or the Chinese are likely to give everything that Washington 196 00:10:14,840 --> 00:10:18,240 Speaker 1: wants at this point, and they're not going to make 197 00:10:18,360 --> 00:10:22,199 Speaker 1: major concessions which undermine what they consider their core interests, 198 00:10:22,240 --> 00:10:25,400 Speaker 1: which is that the government will continue to support state enterprises. 199 00:10:25,880 --> 00:10:29,440 Speaker 1: The government of China wants China to be a major 200 00:10:29,520 --> 00:10:33,920 Speaker 1: competitive power in new technologies. China has a very different 201 00:10:33,960 --> 00:10:37,920 Speaker 1: system of protecting information from that of the United States. 202 00:10:37,920 --> 00:10:40,920 Speaker 1: So the Chinese are willing to make some concessions to 203 00:10:41,080 --> 00:10:44,959 Speaker 1: cool things down, but they're not willing to give everything 204 00:10:45,120 --> 00:10:49,080 Speaker 1: and engage in what they would consider domestically and be 205 00:10:49,160 --> 00:10:53,840 Speaker 1: criticized for which would be lopsided deals for the United 206 00:10:53,880 --> 00:10:57,360 Speaker 1: State favor of the United States, and are seen by 207 00:10:57,400 --> 00:11:01,480 Speaker 1: them to be making concessions greater than than they can 208 00:11:01,600 --> 00:11:04,080 Speaker 1: to meet their core interests. I've got one time time 209 00:11:04,120 --> 00:11:06,400 Speaker 1: for one final question, and i have to go back 210 00:11:06,440 --> 00:11:09,280 Speaker 1: to your important book and I'm going to say ten 211 00:11:09,280 --> 00:11:13,040 Speaker 1: twelve years ago on the debt and the deficit in 212 00:11:13,120 --> 00:11:18,000 Speaker 1: our extension abroad? Boy, is it much worse now? How 213 00:11:18,040 --> 00:11:21,200 Speaker 1: are we going to extend abroad with the growing debt 214 00:11:21,320 --> 00:11:24,960 Speaker 1: the growing deficit that we see forward? Well, the problem 215 00:11:25,040 --> 00:11:27,200 Speaker 1: is that people have paid so little attention to that 216 00:11:27,280 --> 00:11:30,800 Speaker 1: on both sides of the Aisle UH, largely because interest 217 00:11:30,880 --> 00:11:34,200 Speaker 1: rates are relatively low and we could actually technically continue 218 00:11:34,240 --> 00:11:37,880 Speaker 1: to borrow a lot of money because rates are low. 219 00:11:37,960 --> 00:11:40,640 Speaker 1: But the problem is if rates do go up, and 220 00:11:40,720 --> 00:11:43,640 Speaker 1: at some point they're likely to, then you have to 221 00:11:43,720 --> 00:11:46,280 Speaker 1: pay the piper. And the other question is how do 222 00:11:46,360 --> 00:11:48,520 Speaker 1: you use the money? And I think this is really 223 00:11:48,520 --> 00:11:51,720 Speaker 1: what's troublesome to me. If you're really worried about China 224 00:11:51,800 --> 00:11:56,000 Speaker 1: as a competitive then it seems to me you're doing 225 00:11:56,400 --> 00:11:59,079 Speaker 1: we should be doing what we did in the nineteen 226 00:11:59,200 --> 00:12:02,520 Speaker 1: fifties after spot Nik, which means invest a lot more 227 00:12:02,520 --> 00:12:05,520 Speaker 1: in education, invest a lot more in the national labs 228 00:12:05,679 --> 00:12:09,040 Speaker 1: and research and development, put a lot more into stem 229 00:12:09,080 --> 00:12:14,400 Speaker 1: cell research and strengthen um and Strengthen we've got we 230 00:12:14,480 --> 00:12:17,960 Speaker 1: got virtually anti science right now. Well, that's the problem. 231 00:12:18,120 --> 00:12:25,599 Speaker 1: We were worried about a competitive country like China accelerating 232 00:12:26,320 --> 00:12:29,560 Speaker 1: R and D and accelerating its competitive strengths and a 233 00:12:29,600 --> 00:12:32,600 Speaker 1: whole range of new technologies on the other end, and 234 00:12:32,679 --> 00:12:35,480 Speaker 1: we're trying to do things on the trade front. What 235 00:12:35,640 --> 00:12:39,400 Speaker 1: we should be doing, and parallel at least, is looking 236 00:12:39,440 --> 00:12:43,199 Speaker 1: at what we need to do on strengthening infrastructure, education, 237 00:12:43,440 --> 00:12:47,520 Speaker 1: R and D to strengthen our own competitive capability. That's 238 00:12:47,559 --> 00:12:50,240 Speaker 1: the way you really compete in this world, strengthen your 239 00:12:50,280 --> 00:12:53,559 Speaker 1: own competitive capability. And we're really barely focusing on that. 240 00:12:53,679 --> 00:12:56,320 Speaker 1: Two Sharpanese are but the government doesn't seem it's radio. 241 00:12:56,320 --> 00:12:58,440 Speaker 1: We gotta go to break Boba man, Thank you so much. 242 00:12:58,480 --> 00:13:01,400 Speaker 1: Too short to visit It's day. Robert Harmetts is with 243 00:13:01,559 --> 00:13:06,840 Speaker 1: Kissinger Associates, a former under Secretary of State for Economic Might. 244 00:13:06,880 --> 00:13:09,440 Speaker 1: I just made myself, but that's what it felt like, 245 00:13:09,520 --> 00:13:26,840 Speaker 1: economic might. There is a definitive essay this morning on 246 00:13:26,920 --> 00:13:30,520 Speaker 1: sir Jonathan. He is, of course exquisite in art and 247 00:13:30,559 --> 00:13:34,600 Speaker 1: design out of Newcastle, bring a Baha's tradition into all 248 00:13:34,679 --> 00:13:37,040 Speaker 1: he's done an Apple and that essay must be sure 249 00:13:37,200 --> 00:13:40,160 Speaker 1: over day of Bloomberg opinion. Sure, just what a tour defour? 250 00:13:40,200 --> 00:13:43,840 Speaker 1: Did you know he was resigning? Do you have this 251 00:13:44,000 --> 00:13:47,800 Speaker 1: essay in the camp? He is, Sir Jonathan, and the 252 00:13:48,240 --> 00:13:52,480 Speaker 1: impact here's immense. But as you partition beautifully in the essay, 253 00:13:53,160 --> 00:13:56,439 Speaker 1: he's a hardware guy. Is what this really about? His 254 00:13:56,520 --> 00:14:00,679 Speaker 1: Spotify's cleaning, Apple Music's clock. Is that inn is an 255 00:14:00,679 --> 00:14:03,559 Speaker 1: example of what's really going on here. Yeah, I think 256 00:14:03,559 --> 00:14:06,200 Speaker 1: that's right. I mean, I wouldn't put this directly on Spotify, 257 00:14:06,240 --> 00:14:08,240 Speaker 1: but I think it is true that if you look 258 00:14:08,320 --> 00:14:11,040 Speaker 1: at what's happening now in technology now, in the future 259 00:14:11,040 --> 00:14:15,120 Speaker 1: of technology, it's about software. It's not about these sort 260 00:14:15,160 --> 00:14:18,840 Speaker 1: of messianic cults of hardware designers who, as we heard 261 00:14:18,840 --> 00:14:22,320 Speaker 1: in the those opening videos, right obsess over, you know, 262 00:14:22,400 --> 00:14:27,080 Speaker 1: the curve of every smartphone angle and the lack of 263 00:14:27,120 --> 00:14:32,440 Speaker 1: events um. That kind of design, aesthetic taste is still important, 264 00:14:32,760 --> 00:14:35,960 Speaker 1: but hardware is just getting less important to the future 265 00:14:36,160 --> 00:14:38,520 Speaker 1: of technology in general, and so that means people like 266 00:14:38,640 --> 00:14:41,320 Speaker 1: Johnny I've are a little bit less relevant. Is there 267 00:14:41,400 --> 00:14:47,080 Speaker 1: a Johnny I've of software at Apple? That's an interesting question, 268 00:14:47,120 --> 00:14:50,000 Speaker 1: I mean, because I just read the best picks are movies, 269 00:14:50,480 --> 00:14:54,240 Speaker 1: and the wonder of picks are is there's three or 270 00:14:54,280 --> 00:14:57,920 Speaker 1: four guys with a different ethos each. Yeah, that I 271 00:14:57,960 --> 00:15:01,400 Speaker 1: think that's a good question, you know, certainly, look, Johnny 272 00:15:01,440 --> 00:15:04,640 Speaker 1: I've was the Johnny I've of software at Apple. He 273 00:15:04,880 --> 00:15:07,400 Speaker 1: was responsible for software in the last few years as 274 00:15:07,400 --> 00:15:11,960 Speaker 1: well software design um, and they obviously have a deeper 275 00:15:12,000 --> 00:15:15,520 Speaker 1: bench of folks who are working on on software. But no, 276 00:15:15,760 --> 00:15:18,640 Speaker 1: I don't think there is a sort of software guru 277 00:15:18,680 --> 00:15:20,840 Speaker 1: at Apple, which I think is telling both about Apple 278 00:15:20,880 --> 00:15:23,440 Speaker 1: the company and about the direction of the industry and 279 00:15:23,480 --> 00:15:26,200 Speaker 1: the software focus way that it's really the nerds that 280 00:15:26,240 --> 00:15:29,440 Speaker 1: are dictating the future of of technology now. So you're 281 00:15:29,520 --> 00:15:31,280 Speaker 1: in your column, you know that this is a you know, 282 00:15:31,280 --> 00:15:33,760 Speaker 1: a really interesting time for Apple. It's a pivotal time 283 00:15:34,120 --> 00:15:38,840 Speaker 1: as you know, the dependence on the iPhone begins to wane. 284 00:15:39,200 --> 00:15:42,360 Speaker 1: So I mean, it's just kind of senses that, you know, 285 00:15:42,520 --> 00:15:46,440 Speaker 1: is this kind of suggesting that services for Apple really 286 00:15:46,560 --> 00:15:50,360 Speaker 1: will be the area of focus going forward? Well, it 287 00:15:50,520 --> 00:15:53,440 Speaker 1: is in the near term. Look, I think the fundamental 288 00:15:53,520 --> 00:15:56,880 Speaker 1: issue for Apple is that there is no next big 289 00:15:56,920 --> 00:16:00,520 Speaker 1: thing and maybe there can never be an next big 290 00:16:00,520 --> 00:16:03,280 Speaker 1: thing as big as the iPhone. Right, So you have 291 00:16:03,400 --> 00:16:05,840 Speaker 1: this issue now where you know, Apple is a company 292 00:16:06,200 --> 00:16:08,840 Speaker 1: is generating more than half of its direct revenue and 293 00:16:08,920 --> 00:16:12,960 Speaker 1: significantly more of its indirect revenue from that one singular 294 00:16:13,040 --> 00:16:16,000 Speaker 1: product that Johnny I've and Steve Jobs and others were 295 00:16:16,040 --> 00:16:21,160 Speaker 1: responsible for making. And look the focus on Apple's focus 296 00:16:21,200 --> 00:16:23,640 Speaker 1: now on services, on things like Apple Music, on the 297 00:16:23,640 --> 00:16:27,040 Speaker 1: Apple TV Plus service that's coming, on video games that 298 00:16:27,200 --> 00:16:31,400 Speaker 1: is all ancillary. It is basically um kind of orbiting 299 00:16:31,440 --> 00:16:33,800 Speaker 1: moons around the iPhone. And if you look at where 300 00:16:33,840 --> 00:16:37,200 Speaker 1: the future of technology is going, it's in areas where 301 00:16:37,360 --> 00:16:41,560 Speaker 1: Apple has no presence and no heritage, right Artificial intelligence, 302 00:16:41,600 --> 00:16:45,800 Speaker 1: cloud computing, the Internet of things, autonomous driving. Apple is 303 00:16:45,840 --> 00:16:48,160 Speaker 1: in those areas, of course, but it's far from a 304 00:16:48,280 --> 00:16:51,160 Speaker 1: leader in any of them, and that's going to determine 305 00:16:51,160 --> 00:16:54,000 Speaker 1: who wins and loses in the future. I look sure 306 00:16:54,040 --> 00:16:56,360 Speaker 1: at the design of the Apple I saw Samsung at 307 00:16:56,640 --> 00:16:59,360 Speaker 1: last night. One of our great staff took some photos 308 00:16:59,360 --> 00:17:01,800 Speaker 1: in Washington with the Samsung phone. I was dazzled. As 309 00:17:01,800 --> 00:17:05,840 Speaker 1: well as a general statement, everybody I see has Johnny 310 00:17:05,880 --> 00:17:08,520 Speaker 1: I've in their hands. I mean, is a you know. 311 00:17:08,640 --> 00:17:10,199 Speaker 1: And then the stock has done what it's done, and 312 00:17:10,240 --> 00:17:12,600 Speaker 1: we don't need to turn this into a financial exercise 313 00:17:12,680 --> 00:17:15,720 Speaker 1: as well, except I want to go back to software. 314 00:17:15,920 --> 00:17:20,960 Speaker 1: It's almost as if Apple's botched the software game. Is 315 00:17:20,960 --> 00:17:23,040 Speaker 1: that too harsh of me to say? No? I think 316 00:17:23,040 --> 00:17:27,679 Speaker 1: that's completely fair. I think, um, what I said yesterday was, 317 00:17:27,720 --> 00:17:31,840 Speaker 1: do you want the company that makes iTunes right, which 318 00:17:31,880 --> 00:17:36,560 Speaker 1: is basically a much maligned software that's so bad that 319 00:17:36,760 --> 00:17:39,000 Speaker 1: even one of Apple's executives made fun of it on 320 00:17:39,119 --> 00:17:41,800 Speaker 1: stage earlier this right? Do you want that company to 321 00:17:41,840 --> 00:17:44,399 Speaker 1: make your driver less car? And I think that's the issue, 322 00:17:44,440 --> 00:17:48,119 Speaker 1: is that this is a company whose software expertise is 323 00:17:48,600 --> 00:17:50,639 Speaker 1: not great. You know, you and I were talking before 324 00:17:50,640 --> 00:17:53,439 Speaker 1: we came back about Jeffrey Fowler's landmark work at the 325 00:17:53,440 --> 00:17:57,200 Speaker 1: Washington Post on privacy and Google Chrome and all that. 326 00:17:57,840 --> 00:18:04,160 Speaker 1: In his brilliant article calls Safari's unmentioned just as an example. 327 00:18:04,720 --> 00:18:08,280 Speaker 1: Do they know that in COO? Well, I think Safari 328 00:18:08,440 --> 00:18:10,720 Speaker 1: suffers a little bit from the same problem that other 329 00:18:11,080 --> 00:18:14,240 Speaker 1: Apple technologies suffer from, which is it's designed to work 330 00:18:14,320 --> 00:18:18,360 Speaker 1: best with Apple hardware exactly, and Apple hardware is always 331 00:18:18,359 --> 00:18:21,200 Speaker 1: going to be a minority of the ways that people 332 00:18:21,320 --> 00:18:24,560 Speaker 1: interact with technology. Now right, You're you're talking about a 333 00:18:24,560 --> 00:18:27,960 Speaker 1: world in which Android phones are the primary way that uh, 334 00:18:28,160 --> 00:18:31,439 Speaker 1: billions of people around the world are getting online, and 335 00:18:31,520 --> 00:18:34,399 Speaker 1: Safari is absent there, so that that's really the problem 336 00:18:34,400 --> 00:18:38,560 Speaker 1: for Apple. So sure, is there any replacement for a 337 00:18:38,680 --> 00:18:44,000 Speaker 1: Johnny I've at Apple? There isn't. Obviously they filled the gap. 338 00:18:44,040 --> 00:18:47,719 Speaker 1: They they elevated some designers who have worked for Johnny 339 00:18:47,760 --> 00:18:50,679 Speaker 1: i for a long time to fill his role. Notably, 340 00:18:51,200 --> 00:18:55,040 Speaker 1: those designers will report to the chief operating officer at 341 00:18:55,040 --> 00:18:58,120 Speaker 1: Apple rather than to the chief executive officer, as Johnny 342 00:18:58,160 --> 00:19:02,280 Speaker 1: I've did, which shows you some thing about um, you know, 343 00:19:02,280 --> 00:19:07,000 Speaker 1: obviously the prominence of Johnny I've but also the more 344 00:19:07,560 --> 00:19:10,639 Speaker 1: I guess banal role for hardware going forward. No, I 345 00:19:10,640 --> 00:19:14,080 Speaker 1: don't think there is somebody who can replace Johnny. I've 346 00:19:14,160 --> 00:19:16,959 Speaker 1: obviously Apple will need to have a kind of common 347 00:19:17,000 --> 00:19:19,960 Speaker 1: design esthetic across its products. That's not going to change. 348 00:19:20,400 --> 00:19:23,720 Speaker 1: But there is no single kind of messianic cult of 349 00:19:23,760 --> 00:19:26,000 Speaker 1: the leader there. Thanks for the briefing. I'm gonna get 350 00:19:26,000 --> 00:19:28,920 Speaker 1: sure over these piece out on social as I can. 351 00:19:29,000 --> 00:19:32,119 Speaker 1: It is a spectacular piece something and I love to 352 00:19:32,119 --> 00:19:35,960 Speaker 1: say this, sir Jonathan's career at Apple, and he's going 353 00:19:36,000 --> 00:19:38,879 Speaker 1: to still consult the Apple. Come on, yes he is, 354 00:19:38,920 --> 00:19:41,240 Speaker 1: although it seemed like kind of a graceful way to 355 00:19:41,280 --> 00:19:45,040 Speaker 1: exit rather than a real really doing that with me too. 356 00:19:45,200 --> 00:19:49,120 Speaker 1: Sure over there, Thank you so much. As always, on technology, 357 00:19:49,480 --> 00:20:05,800 Speaker 1: US is a greater whole. A giant has entered the 358 00:20:05,840 --> 00:20:09,480 Speaker 1: studio in New York. If you are a songwriter in 359 00:20:09,560 --> 00:20:12,760 Speaker 1: this nation and part of ASCAP or B M E 360 00:20:12,960 --> 00:20:16,240 Speaker 1: or C. Sack, and if you are ever so lucky 361 00:20:16,400 --> 00:20:18,840 Speaker 1: as to make it and make it big, you will 362 00:20:18,880 --> 00:20:22,439 Speaker 1: be on a first name basis with Lawrence Ferrara. He 363 00:20:22,520 --> 00:20:25,440 Speaker 1: is at New York University, and he is the definitive 364 00:20:25,560 --> 00:20:29,239 Speaker 1: expert on copyright in the nation. You may not know 365 00:20:29,359 --> 00:20:33,480 Speaker 1: the name, but you know in any given case involving 366 00:20:33,800 --> 00:20:38,960 Speaker 1: Tom Petty James, Page of Led Zeppelin, Young Katie Perry. 367 00:20:39,080 --> 00:20:44,640 Speaker 1: They all end up retaining. Uh. Dr Ferrara is somebody 368 00:20:44,680 --> 00:20:47,200 Speaker 1: goes after their success, and we are honored that you 369 00:20:47,240 --> 00:20:51,400 Speaker 1: would join us today. Uh Lawrence Ferrara, we have copyright 370 00:20:51,560 --> 00:20:55,040 Speaker 1: and we all understand. Somebody's gonna steal a song. It 371 00:20:55,160 --> 00:20:58,480 Speaker 1: seems in the modern age it's come down to an 372 00:20:58,560 --> 00:21:05,920 Speaker 1: eight second riff, our chord change, a syncopation across three measures, 373 00:21:06,040 --> 00:21:08,920 Speaker 1: or even the melody. How did we get to such 374 00:21:09,000 --> 00:21:13,960 Speaker 1: acuity of studying? How of studying how we steal a song? 375 00:21:15,359 --> 00:21:19,520 Speaker 1: The acuity is a function of the fact that musicologists, 376 00:21:19,560 --> 00:21:23,080 Speaker 1: for example, have to dissect the music that's at issue. 377 00:21:23,480 --> 00:21:26,880 Speaker 1: Someone makes a claim, uh, for example, that a melody 378 00:21:26,920 --> 00:21:30,960 Speaker 1: has been copied. The key is to dissect it and 379 00:21:31,000 --> 00:21:33,680 Speaker 1: analyze it within the context of the whole and to 380 00:21:33,800 --> 00:21:38,119 Speaker 1: provide an opinion as to the substantiality of that of 381 00:21:38,200 --> 00:21:41,960 Speaker 1: that expression winning right now, just as a general statement, 382 00:21:42,040 --> 00:21:45,840 Speaker 1: case after case, who's winning right now? The established to 383 00:21:46,080 --> 00:21:49,119 Speaker 1: start where they're going after the money or the person 384 00:21:49,160 --> 00:21:52,760 Speaker 1: that says my song was stolen. It's really on a 385 00:21:52,800 --> 00:21:55,879 Speaker 1: case by case basis, because any particular yeah, that's right, 386 00:21:55,920 --> 00:21:58,639 Speaker 1: I think there's any particular trend. Take a look at 387 00:21:58,680 --> 00:22:01,359 Speaker 1: the led Zeppelin trial. Is Jimmy Page Star were to 388 00:22:01,440 --> 00:22:08,000 Speaker 1: have an a minor RIFFA and Spirit magical band of 389 00:22:08,119 --> 00:22:11,360 Speaker 1: five or six years ahead of time? Spirit says they 390 00:22:11,400 --> 00:22:15,639 Speaker 1: stole that riff from Taurus, Right, that's correct? And who 391 00:22:15,760 --> 00:22:18,919 Speaker 1: is it? Is the case been decided? Yes, I was 392 00:22:19,400 --> 00:22:22,359 Speaker 1: the music expert on behalf of Jimmy Page Robert Plant 393 00:22:22,600 --> 00:22:25,680 Speaker 1: at Warner Music, Warner Chapel Music. Uh, And that was 394 00:22:25,720 --> 00:22:28,360 Speaker 1: a few years ago, and the jury found on behalf 395 00:22:28,720 --> 00:22:31,440 Speaker 1: of led Zeppelin and Code? What did you learn from 396 00:22:31,440 --> 00:22:34,679 Speaker 1: that jury in their decision? How did they come to it? 397 00:22:34,720 --> 00:22:36,960 Speaker 1: If I go up Fifth Avenue right now to the 398 00:22:37,000 --> 00:22:41,199 Speaker 1: Metropolitan Museum of Art, there's the magisterial Guitar Show, and 399 00:22:41,280 --> 00:22:44,920 Speaker 1: buried their folks among all these fancy you know, Keith Richards, 400 00:22:44,960 --> 00:22:49,959 Speaker 1: Les Paul and uh, Jeff Beck's esquire and Springsteen's esquire. 401 00:22:50,240 --> 00:22:54,080 Speaker 1: There's a lousy crap acoustic guitar that Jimmy Page wrote 402 00:22:54,080 --> 00:22:57,480 Speaker 1: all these songs on. Sitting there with that guitar. He's 403 00:22:57,480 --> 00:23:01,080 Speaker 1: got eighties seven inspirational ideas in his and he stole 404 00:23:01,119 --> 00:23:04,280 Speaker 1: it from somebody? Is that what this comes down to, Well, 405 00:23:04,320 --> 00:23:07,719 Speaker 1: that would be the charge the you asked about. The jury. 406 00:23:08,160 --> 00:23:11,280 Speaker 1: The jury found that, in fact, to the extent there 407 00:23:11,320 --> 00:23:15,879 Speaker 1: are similarities. Those similarities represent expression, as you call it, 408 00:23:16,760 --> 00:23:21,399 Speaker 1: a descending line progression. In fact, in jazz theory books, 409 00:23:21,480 --> 00:23:25,640 Speaker 1: is called a descending line cliche. Uh. And and that's 410 00:23:25,680 --> 00:23:28,119 Speaker 1: because you're calling all the songs I wrote over the 411 00:23:28,200 --> 00:23:32,040 Speaker 1: York cliche. It's come on, it's a minor six aolion 412 00:23:32,119 --> 00:23:35,000 Speaker 1: breakdown out of the keys. See that. I get that. 413 00:23:35,160 --> 00:23:38,399 Speaker 1: But we've gotten into this madness that anybody can go 414 00:23:38,480 --> 00:23:41,960 Speaker 1: after anybody. I mean, Sam Smith was a total class act. 415 00:23:42,040 --> 00:23:45,160 Speaker 1: They had a Tom Petty issue, the late great Tom Petty. 416 00:23:45,240 --> 00:23:47,480 Speaker 1: And didn't they all get together and have beers and say, okay, 417 00:23:47,560 --> 00:23:50,840 Speaker 1: let's fix this. They did. Yes, Why can't that happen 418 00:23:50,960 --> 00:23:56,840 Speaker 1: more often? It does happen often, Okay, Seeing Paul, The 419 00:23:56,880 --> 00:23:59,879 Speaker 1: problem with this is Dr Ferrara doesn't always on radio, 420 00:24:00,240 --> 00:24:03,360 Speaker 1: and he's asking questions like he's in he's answering questions 421 00:24:03,359 --> 00:24:06,360 Speaker 1: like he's in court. Paul, jump in here. It's interesting, 422 00:24:06,400 --> 00:24:09,000 Speaker 1: I mean, Dr Ferrara, I mean, how widespread is this? 423 00:24:10,840 --> 00:24:15,480 Speaker 1: In my experience? Claims with respect to copyright infringement in 424 00:24:15,560 --> 00:24:20,800 Speaker 1: music have greatly increased over the last several years that 425 00:24:20,880 --> 00:24:23,520 Speaker 1: I've been doing this for about a quarter of a century, 426 00:24:24,080 --> 00:24:26,920 Speaker 1: and so over the last several years, there's no question 427 00:24:27,200 --> 00:24:29,240 Speaker 1: there was a digital is because of all the looping 428 00:24:29,240 --> 00:24:31,080 Speaker 1: in the digital and the rest of it. That's part 429 00:24:31,080 --> 00:24:35,200 Speaker 1: of it, I think, through social media and so forth. 430 00:24:35,920 --> 00:24:38,040 Speaker 1: I want to back up to first principle, what's a 431 00:24:38,119 --> 00:24:40,679 Speaker 1: song worth? I mean, what are they suing over I 432 00:24:40,720 --> 00:24:44,840 Speaker 1: mean stairway to having as iconic, etcetera. What's the total 433 00:24:45,000 --> 00:24:49,960 Speaker 1: all in value of the copyright of a given song. Well, 434 00:24:50,000 --> 00:24:54,399 Speaker 1: not every note or even passage in any work that 435 00:24:54,640 --> 00:24:59,240 Speaker 1: is under copyright protection is necessarily protected. Uh. There For example, 436 00:24:59,320 --> 00:25:03,760 Speaker 1: there can be uh portions like the descending chromatic scale 437 00:25:03,760 --> 00:25:06,399 Speaker 1: that you mentioned in that happens to be both in 438 00:25:06,480 --> 00:25:10,760 Speaker 1: taurists by spirit uh and in it Petoban I mean 439 00:25:10,880 --> 00:25:14,679 Speaker 1: Jimmy stole it from you know, Beethoven got it from Handle, etcetera, etcetera. 440 00:25:14,800 --> 00:25:17,320 Speaker 1: Heighten excuse me, Yeah, that's right. In fact, it goes 441 00:25:17,400 --> 00:25:21,720 Speaker 1: back to the seventeenth century opera composers in Venice and 442 00:25:21,800 --> 00:25:25,560 Speaker 1: a very famous opera by an English composer Henry purcell 443 00:25:26,040 --> 00:25:29,560 Speaker 1: uh in an opera that premiered in nine with the 444 00:25:29,640 --> 00:25:32,600 Speaker 1: same progression. What is the song worth today? I think 445 00:25:32,640 --> 00:25:35,680 Speaker 1: our audience doesn't understand it when Katie Perry trumps into 446 00:25:35,680 --> 00:25:38,200 Speaker 1: the super Bowl and things. Whatever the hit is, dark, 447 00:25:38,280 --> 00:25:41,520 Speaker 1: whatever it is, What is the song worth today? What? 448 00:25:41,640 --> 00:25:45,919 Speaker 1: What's the dollar vailue like a hit single? I'm not 449 00:25:46,000 --> 00:25:48,960 Speaker 1: an economics expert. I could not. That's okay, you're in radio. 450 00:25:49,040 --> 00:25:52,480 Speaker 1: You can be an expert without But but what are 451 00:25:52,480 --> 00:25:56,200 Speaker 1: they worth? Like twenty million dollars or two hundred million dollars? 452 00:25:56,280 --> 00:25:58,680 Speaker 1: What are you guys fighting about in court? Well, I'm 453 00:25:58,720 --> 00:26:03,840 Speaker 1: how much money I've engaged in the musicological aspects of 454 00:26:03,840 --> 00:26:06,920 Speaker 1: of two two songs that are an issue as far 455 00:26:07,000 --> 00:26:10,760 Speaker 1: as the monetary values that that's not part of my value. 456 00:26:10,760 --> 00:26:12,439 Speaker 1: Whack I mean, Paul, you want to step in your 457 00:26:12,440 --> 00:26:14,800 Speaker 1: main Paul. I heard you singing Landslide the other day 458 00:26:14,800 --> 00:26:16,760 Speaker 1: by you know Stevie Next. I thought it was a 459 00:26:16,800 --> 00:26:19,840 Speaker 1: great cover. Exactly, Well, yeah, of course, But you know 460 00:26:19,960 --> 00:26:22,480 Speaker 1: it's interesting. You know. The real question I think for 461 00:26:22,640 --> 00:26:24,600 Speaker 1: you know a lot of people is you know, where 462 00:26:24,680 --> 00:26:27,960 Speaker 1: and when does the creative process begin and end and 463 00:26:28,000 --> 00:26:29,879 Speaker 1: I'm just wondering how the courts kind of looked at 464 00:26:29,880 --> 00:26:33,320 Speaker 1: that over the over the years. How difficult is it 465 00:26:33,400 --> 00:26:37,040 Speaker 1: to prove that, uh, you know, one artist m perhaps 466 00:26:37,040 --> 00:26:41,000 Speaker 1: stole summer part of another artist's song. It could be 467 00:26:41,040 --> 00:26:44,320 Speaker 1: a challenge, and ultimately you you have to rely on 468 00:26:44,600 --> 00:26:49,080 Speaker 1: the in in my case, the objective musicological evidence as 469 00:26:49,200 --> 00:26:54,280 Speaker 1: to whether the similarities suggest copying, and then ultimately whether 470 00:26:54,320 --> 00:26:58,760 Speaker 1: that copying is substantial. The ultimate judge, though, uh, is 471 00:26:58,800 --> 00:27:03,760 Speaker 1: the jury or the judge who will decide whether they 472 00:27:03,960 --> 00:27:09,600 Speaker 1: believed that copying has taken just under a subjective that's right. Uh, 473 00:27:09,800 --> 00:27:13,439 Speaker 1: It's called the intrinsic analysis in the in the ninth Circuit, 474 00:27:13,600 --> 00:27:18,119 Speaker 1: which is understandably stop. Let me give you intrinsic analysis here. 475 00:27:18,160 --> 00:27:20,680 Speaker 1: I had the clearest memory. I had a coarse light 476 00:27:20,680 --> 00:27:24,600 Speaker 1: in my hand on a ninety degree day in Boulder, Colorado, 477 00:27:24,640 --> 00:27:27,000 Speaker 1: in a frat house, and I learned that George Harrison 478 00:27:27,400 --> 00:27:30,400 Speaker 1: was being sued over my sweet lord. And I'm like, 479 00:27:30,680 --> 00:27:34,440 Speaker 1: you gotta be kidding me. And yet that happens, right, 480 00:27:34,840 --> 00:27:38,520 Speaker 1: it does. It's a George Harrison, of course, And that's 481 00:27:38,560 --> 00:27:44,600 Speaker 1: back about had a bench trial and uh, and so 482 00:27:44,680 --> 00:27:48,399 Speaker 1: the judge's decision, who, by the way, was also an 483 00:27:48,400 --> 00:27:52,120 Speaker 1: opera composer, so a musician that judge found on behalf 484 00:27:52,600 --> 00:27:57,400 Speaker 1: of of the plaintiff. I'm still speechless over that. Thank 485 00:27:57,440 --> 00:27:59,200 Speaker 1: you so much for coming in, Lord Ferrer with this 486 00:27:59,280 --> 00:28:02,240 Speaker 1: with New York University folks. He is not I gotta 487 00:28:02,240 --> 00:28:06,280 Speaker 1: be careful here. He's not a He's the person you call, 488 00:28:07,000 --> 00:28:09,280 Speaker 1: you know, think about your kids. They get a hit single, 489 00:28:09,680 --> 00:28:12,480 Speaker 1: they make a lot of money, You're guaranteed somebody's gonna 490 00:28:12,520 --> 00:28:15,080 Speaker 1: call up and go after it. And Lawrence for is 491 00:28:15,080 --> 00:28:18,879 Speaker 1: truly on a musicology basis, on the notes on the chords, 492 00:28:18,880 --> 00:28:21,840 Speaker 1: expert on this. He is Professor of Music and emeritus 493 00:28:22,320 --> 00:28:26,199 Speaker 1: UH Professor at New York University, and of course a 494 00:28:26,240 --> 00:28:28,320 Speaker 1: lot of work as well with the Steinhardt Music and 495 00:28:28,440 --> 00:28:32,560 Speaker 1: Performing Arts as well. Thanks for listening to the Bloomberg 496 00:28:32,600 --> 00:28:38,560 Speaker 1: Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, 497 00:28:38,920 --> 00:28:43,120 Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at 498 00:28:43,160 --> 00:28:47,440 Speaker 1: Tom Keane before the podcast. You can always catch us worldwide. 499 00:28:47,880 --> 00:29:00,280 Speaker 1: I'm Bloomberg Radio two.