WEBVTT - Surveillance: Critical Year For Climate, Says Carney 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 0:00:09.240 --> 0:00:13.200 with Jonathan Ferrell and Lisa Brownwitz. Daily we bring you 0:00:13.320 --> 0:00:18.600 insight from the best and economics, finance, investment, and international relations. 0:00:18.960 --> 0:00:23.840 Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com, 0:00:23.920 --> 0:00:30.640 and of course on the Bloomberg terminal. We welcome all 0:00:30.680 --> 0:00:33.920 of you on Bloomberg Radio, on Bloomberg Television worldwide. To 0:00:34.040 --> 0:00:38.120 the very unretired Mark Karney of Canada and the United Kingdom, 0:00:38.120 --> 0:00:41.000 the former governor of the Bank of England went right 0:00:41.000 --> 0:00:43.760 back to work after that tenure with the U n 0:00:43.840 --> 0:00:47.440 Special Envoy for Climate Action and of course his work 0:00:47.760 --> 0:00:50.760 in other areas of finance. Governor Karney, thank you so 0:00:50.880 --> 0:00:55.360 much for joining us today. The Paris Accord unraveled, t 0:00:55.560 --> 0:00:59.680 p P unraveled. We now have she meeting with Biden 0:01:00.040 --> 0:01:04.120 resum or whatever, uh and they're gonna talk climate. What 0:01:04.360 --> 0:01:10.000 kind of agreement can we get from Biden g on climate? Well, first, Tom, 0:01:10.040 --> 0:01:16.920 thanks for having me on. Biden g Uh, Suga, Trudeau, Johnson, uh, 0:01:17.000 --> 0:01:20.280 forty world leaders coming to this summit that the presidents 0:01:20.319 --> 0:01:22.440 called for the next few days. I think we're gonna 0:01:22.480 --> 0:01:24.759 see we are going to see some big announcements from 0:01:24.800 --> 0:01:27.720 some of the G seven economies. I'll let them unveil 0:01:27.800 --> 0:01:30.240 those as they come. That's the first point. In the 0:01:30.280 --> 0:01:34.000 second m it is encouraging that the President g is 0:01:34.080 --> 0:01:37.560 part of this summit. It's also encouraging that the private 0:01:37.560 --> 0:01:40.319 sector is leading the way. And Uh. Part of what's 0:01:40.319 --> 0:01:41.960 coming out on the eve of the summit, as you know, 0:01:42.160 --> 0:01:44.840 is is a big, big announcement from the core of 0:01:44.880 --> 0:01:48.360 the financial sector. Governor Curney, I'm gonna make it real simple. 0:01:48.400 --> 0:01:51.680 You were born in the north northwest of the Northwest Territories. 0:01:51.680 --> 0:01:54.680 I'm suggest none of our authorities have ever been as 0:01:54.720 --> 0:01:57.919 far to the Arctic Circle as you. The Arctic Circle 0:01:58.000 --> 0:02:01.120 is melting and arcticle as gladi is moving. What is 0:02:01.160 --> 0:02:03.840 the urgency to a northern guy like you to get 0:02:03.880 --> 0:02:07.720 this done? Well, there's an urgent. Yeah, absolutely. Uh. We 0:02:07.800 --> 0:02:10.160 did drag the G seven up to a Callawood. You 0:02:10.240 --> 0:02:13.440 might remember Tom about eight years ago, so that they 0:02:13.480 --> 0:02:15.480 got close um and they started to see some of 0:02:15.480 --> 0:02:18.200 the impacts. Look, there is an urgency to this. Um. 0:02:18.360 --> 0:02:21.480 We're tracking as a world. You said Paris didn't succeed 0:02:21.600 --> 0:02:23.800 it succeeded in the objective a goot people in. But 0:02:24.400 --> 0:02:27.320 the policies are still consistent with the world. It's north 0:02:27.320 --> 0:02:30.280 of three degrees warming north to three degrees. So this 0:02:30.360 --> 0:02:34.640 is a critical year for action. There's tremendous momentum. Now 0:02:35.480 --> 0:02:39.480 we need to reinforce that momentum. And again, having seventy 0:02:39.520 --> 0:02:43.160 trillion of private capital coming behind that zero, which is 0:02:43.200 --> 0:02:46.000 what's been announced today, is the type of momentum the 0:02:46.040 --> 0:02:48.640 world needs. Let me ask a rude question, how do 0:02:48.680 --> 0:02:55.120 you convince the United States Senate? You can? Well, you first, 0:02:55.160 --> 0:02:58.760 it's in the United States interests directly in terms of 0:02:58.760 --> 0:03:01.760 the impacts of climate chain. It's also fundamentally, and I'll 0:03:01.760 --> 0:03:04.639 refer to the comments of Secretary Blincoln a couple of 0:03:04.720 --> 0:03:07.600 days ago, this is fundamentally an issue becoming an issue 0:03:07.639 --> 0:03:11.320 of competitiveness, of economic competitiveness. The world is moving in 0:03:11.320 --> 0:03:15.080 this direction. UH. The firms that that are innovating, that 0:03:15.160 --> 0:03:18.120 are lower carbon, that are part of the solution UH, 0:03:18.200 --> 0:03:21.200 and the financial institutions that are getting behind those solutions 0:03:21.240 --> 0:03:24.360 are doing very well. They will do much much better. 0:03:24.960 --> 0:03:27.360 This is where the world's headed. The question is pace 0:03:28.080 --> 0:03:31.480 the US, as in many things, should be the leader, 0:03:31.840 --> 0:03:34.200 can be the leader, and those countries that are the 0:03:34.280 --> 0:03:37.400 leader will reap reap the rewards as they should. I 0:03:37.400 --> 0:03:39.640 love that Tom still referring to you as governor County. 0:03:39.640 --> 0:03:41.280 Mark should continue doing that. Do you want me to 0:03:41.320 --> 0:03:43.640 keep that up? That's an American thing. I haven't done that. 0:03:44.240 --> 0:03:47.520 I haven't done that for CREWD Like you lads from Britain, 0:03:47.600 --> 0:03:49.760 we always do that. We had to put up with 0:03:49.800 --> 0:03:51.800 a lot of that in the news conferences on threaten 0:03:51.840 --> 0:03:54.720 NATO Street. I'll go with it, Governor Khanty. I remember 0:03:54.720 --> 0:03:58.120 a news conference at the back end you were fresh 0:03:58.120 --> 0:03:59.960 and your tenure the Bank of England, and everybody was 0:04:00.040 --> 0:04:03.040 worried about bubbles our swhere and why we needed higher 0:04:03.040 --> 0:04:05.280 interest rates, and I remember a line from you, we 0:04:05.400 --> 0:04:09.200 don't set a monetary policy for inside the circle line. Now, 0:04:09.200 --> 0:04:11.640 if you live in London or appreciate the underground system 0:04:11.680 --> 0:04:13.480 in London, you'll remember that quote and you'll know what 0:04:13.520 --> 0:04:15.400 it means. So Mark, I wanted you to help us 0:04:15.440 --> 0:04:17.320 understand the moment we're in right now as well, the 0:04:17.360 --> 0:04:21.520 financial instability, stability concerns that go with very low and 0:04:21.560 --> 0:04:25.720 exceptionally low interest rates for a long long time two things, John, 0:04:25.920 --> 0:04:29.920 thanks for remembering that we do set financial stability policy 0:04:29.960 --> 0:04:31.960 for inside the circle line or the equivalent in the 0:04:32.040 --> 0:04:34.880 US and Canada around the world. UM. So it is 0:04:35.200 --> 0:04:39.480 very important that authorities are focused on pockets of excess, 0:04:39.839 --> 0:04:42.200 making sure that they don't spread more broadly within the 0:04:42.200 --> 0:04:46.480 financial system UM and undermine the recovery, which well strong 0:04:46.520 --> 0:04:49.680 out of the gate. UH, particularly the United States is 0:04:49.760 --> 0:04:52.920 really just getting going UH and needs to be followed through. 0:04:53.200 --> 0:04:55.719 The word transitory keeps coming up again and again. You've 0:04:55.720 --> 0:04:58.320 been in a scene where you've seen above target inflation, 0:04:58.440 --> 0:05:03.080 not the three percent, think of turn a mark. How 0:05:03.120 --> 0:05:05.520 different is this moment? Do you think you face downside 0:05:05.600 --> 0:05:07.279 risk of growth at that time as well? Now we 0:05:07.320 --> 0:05:11.480 face upside risk to growth. How different is this moment? Uh? 0:05:11.839 --> 0:05:13.880 It is different. I mean we're in a unique situation 0:05:14.320 --> 0:05:16.480 given the nature of the pandemic. I won't list all 0:05:16.520 --> 0:05:18.960 the reasons why it's different, but in essence, it's a 0:05:19.000 --> 0:05:22.680 supply shock. It's hopefully a temporary supply shock. UM. Part 0:05:22.720 --> 0:05:26.440 of getting out of this whole is big fiscal much 0:05:26.480 --> 0:05:29.640 bigger than we saw two thousand eight nine, UM, and 0:05:29.680 --> 0:05:33.960 also a monetary policy that is explicitly targeting some degree 0:05:33.960 --> 0:05:38.040 of overshooting responsible overshoot of inflation. So it is quite different. 0:05:38.680 --> 0:05:42.600 But the combination of that mix is maximizing the prospects 0:05:43.080 --> 0:05:45.719 that we will get out of this. To loop back 0:05:45.760 --> 0:05:49.040 to the Biden summit, if I may, uh, it's important 0:05:49.160 --> 0:05:51.400 where the hand what are we handing off too? Though 0:05:51.640 --> 0:05:54.160 we'll get this initial pop in the economy, we need 0:05:54.200 --> 0:05:58.040 an investment driven recovery in order to really have traction, 0:05:58.120 --> 0:06:02.200 really have high paying jobs, and that investment driven recovery 0:06:02.800 --> 0:06:05.640 is going to be oriented. Part of it surround sustainability, 0:06:05.680 --> 0:06:08.920 a much more efficient economy. We need a financial sector 0:06:08.960 --> 0:06:12.240 that's there, and that's why having twenty eight trillion of 0:06:12.760 --> 0:06:16.200 balance sheet of banks led by you know, Morgan Stanley, 0:06:16.320 --> 0:06:21.559 Bank of America, City, HSBC and others announced today that's 0:06:21.640 --> 0:06:23.920 the kind of capital we're going to need in the 0:06:24.040 --> 0:06:27.599 US and globally to have a sustained recovery. So what 0:06:27.640 --> 0:06:31.240 are the negative consequences mark of the incredible amount of 0:06:31.240 --> 0:06:34.440 fiscal and monetary stimulus that have impumped into the economy 0:06:34.560 --> 0:06:39.159 over the past thirteen months. Is this just without harm? Well, no, 0:06:39.240 --> 0:06:43.640 I mean all these everything, I wouldn't say everything in moderation, Lisa, 0:06:43.720 --> 0:06:47.000 But everything needs to be calibrated. Uh. You know, the 0:06:47.040 --> 0:06:49.880 FED and other central banks will have to make as 0:06:49.880 --> 0:06:54.760 they always do, um, timely decisions on the tapering of 0:06:54.880 --> 0:06:58.560 stimulus tapering first and then uh in the fullest of 0:06:58.680 --> 0:07:02.600 time with the recovery that we want and deserve, withdrawal 0:07:02.600 --> 0:07:06.200 of some of that stimulus. Fiscal stimulus, UM in all 0:07:06.320 --> 0:07:10.840 jurisdictions needs to move more towards the type of support 0:07:11.200 --> 0:07:16.640 for private investment as opposed to sustaining individual consumption. I mean, 0:07:17.200 --> 0:07:20.120 I'm saying that after the measures that have been passed 0:07:20.120 --> 0:07:22.400 in the in the United States and elsewhere. So there 0:07:22.520 --> 0:07:27.240 is a pivot on both policies coming. But where policy 0:07:27.240 --> 0:07:29.560 stances today needs to needs to be seen through. But 0:07:29.600 --> 0:07:32.000 absolutely li So, Um, you know there are some tough 0:07:32.040 --> 0:07:34.680 decisions ahead. Go to Karney if it is an inflation. 0:07:35.040 --> 0:07:37.400 When going back to your issue. As a special envoy 0:07:37.480 --> 0:07:40.840 for the United Nations, Secretary Treasury Janet Yellen said that 0:07:40.880 --> 0:07:44.000 climate change was the biggest threat to markets. That was 0:07:44.120 --> 0:07:47.800 the biggest threat, frankly, existential threat the way that we operate, 0:07:47.840 --> 0:07:50.520 and we've seen the FED taking more active role. Can 0:07:50.560 --> 0:07:56.119 you dovetail how monetary policy fits in with climate policy well. 0:07:56.560 --> 0:08:01.240 First and foremost defense actions are related to financial stability 0:08:01.320 --> 0:08:04.119 risk what John was talking about earlier, um so making 0:08:04.160 --> 0:08:08.000 sure that as we're in this transition that lending investing 0:08:08.440 --> 0:08:10.760 is consistent with the industries of the future and not 0:08:10.920 --> 0:08:14.080 those of the past, and we don't build up large 0:08:14.120 --> 0:08:16.800 losses in the in the core of the system, monetary 0:08:16.840 --> 0:08:20.320 policy is going to have to uh largely, I think largely. 0:08:20.320 --> 0:08:22.960 Certainly in the United States. It's largely a question of 0:08:23.000 --> 0:08:27.520 the classics supply demand shifts in in the economy, so 0:08:27.680 --> 0:08:30.840 more traditional monetary policy, I will say, in the UK 0:08:31.080 --> 0:08:35.000 and in Europe. Uh. The way monetary policy has operated, 0:08:35.320 --> 0:08:37.640 the type of collateral that's used, the type of assets 0:08:37.679 --> 0:08:41.080 that are purchased, will be influenced by climate policy, and 0:08:41.120 --> 0:08:44.320 as a consequence, that will be yet another influence on 0:08:44.360 --> 0:08:49.400 the pricing of securities. Governor Karney, Christopher Friedland is making 0:08:49.480 --> 0:08:52.559 really quite a splash in your Canada, and I want 0:08:52.600 --> 0:08:55.400 to take it globally certainly G seven and G eight, 0:08:55.760 --> 0:08:59.520 but actually globally do we see in Canada as we 0:08:59.600 --> 0:09:03.079 come out of this pandemic a new interpretation of what 0:09:03.280 --> 0:09:07.559 government will do? Christoph Friedland has made worldwide news with 0:09:07.679 --> 0:09:13.439 a more liberal approach. Is out a tone of the future. Uh, 0:09:13.480 --> 0:09:17.160 it's uh. It's recognition aspects of the Canadian budget or 0:09:17.200 --> 0:09:20.640 recognition of uh, the inequalities that still exists in this 0:09:20.720 --> 0:09:23.800 economy and very important. I think the centerpiece element in 0:09:23.800 --> 0:09:30.079 that budget was is around childcare and universal childcare. And 0:09:30.080 --> 0:09:32.040 and you know, to speak as an economist, I mean 0:09:32.080 --> 0:09:35.480 we're moments from you talking about ranger causality and the 0:09:35.520 --> 0:09:38.520 time series analysis as speakers an economists. One of the things, 0:09:38.520 --> 0:09:41.120 of course, what that's doing, it's issue of social justice. 0:09:41.200 --> 0:09:44.480 It also is an issue of supply capacity of the economy. 0:09:44.880 --> 0:09:48.600 You know, more women can work, UH, border participation in 0:09:48.600 --> 0:09:50.960 the economy. That's that's good and is right and its just. 0:09:51.120 --> 0:09:55.320 But it also supports uh supports growth UM. But in Canada, 0:09:55.520 --> 0:09:57.560 as in the United States, what I was saying earlier, 0:09:57.720 --> 0:10:03.079 the shift from some board needs to come from immediate 0:10:03.080 --> 0:10:06.560 support to households during the course of the pandemic, which 0:10:06.600 --> 0:10:10.800 is still raging here. Unfortunately, the moment to that type 0:10:10.840 --> 0:10:14.920 of longer term growth UM and and a responsible fiscal 0:10:14.960 --> 0:10:17.760 policy that is consistent with longer term ARO. What's so 0:10:17.800 --> 0:10:20.520 great about this folks in these conversations that John, Lisa 0:10:20.520 --> 0:10:22.440 and I have as you get little windows for a 0:10:22.520 --> 0:10:26.160 split second, and how competent these people are. As Mark 0:10:26.240 --> 0:10:29.439 Kearney picks up on Granger causality and brings it right 0:10:29.480 --> 0:10:32.480 over to the political theory of his Canada, Mark Arney, 0:10:32.520 --> 0:10:34.720 I think John Farrow would agree with me that you 0:10:34.760 --> 0:10:38.360 are more qualified than any global thought leader. And I 0:10:38.400 --> 0:10:41.960 hate that phrase, Mark, to talk about what you learned 0:10:42.000 --> 0:10:45.400 in the United Kingdom. John Pharaoh is beat the table 0:10:45.840 --> 0:10:49.839 throughout this entire pandemic that there is a social contract 0:10:49.920 --> 0:10:53.920 in Europe and indeed in Boris Johnson's United Kingdom that 0:10:54.080 --> 0:10:57.560 is different than America. Out of this pandemic, are we 0:10:57.640 --> 0:11:02.760 shifting to a new social contract where we budget for 0:11:02.800 --> 0:11:08.800 they have not? I think we are. And the starting 0:11:08.920 --> 0:11:11.960 place is different, and I think you summarize a well, Tom. 0:11:12.760 --> 0:11:15.160 The starting place is different in Europe, it's different in Canada, 0:11:15.200 --> 0:11:18.880 different in the US, but the direction of travel is similar. 0:11:19.640 --> 0:11:23.360 We've learned through this pandemic that we don't have as 0:11:23.480 --> 0:11:27.760 resilient economies and societies. I mean, individuals have proven themselves 0:11:27.760 --> 0:11:30.559 to be resilient, to their great credit, but we haven't 0:11:31.520 --> 0:11:34.120 had the support, we haven't had the protections we need 0:11:34.720 --> 0:11:37.240 UH and and I can extend that analogy not just 0:11:37.240 --> 0:11:40.920 from financial stability to health and pandemics, but over to 0:11:41.000 --> 0:11:44.040 cyber UH and other issues where government needs to play 0:11:44.080 --> 0:11:47.400 a role. UM also playing a role in the adjustment 0:11:47.400 --> 0:11:50.440 of the economy. Now in the end, and we the 0:11:50.480 --> 0:11:54.320 economy needs to move to the future UM and the future, 0:11:54.400 --> 0:11:59.480 to grossly simplify, is sustainable and digital UM. So whereas 0:11:59.520 --> 0:12:02.800 we have the support, we also need UM, the dynamism 0:12:02.840 --> 0:12:05.480 and the openness in order to move forward, or else 0:12:05.520 --> 0:12:08.599 we're supporting livelihoods of the past, not not not of 0:12:08.679 --> 0:12:10.800 the future. We could save these questions for the end 0:12:10.800 --> 0:12:12.920 of the interview with that right now, So let's do it. 0:12:12.960 --> 0:12:15.080 Do you miss central banking? Do you miss the world? 0:12:15.080 --> 0:12:18.320 A central bankake? I'm gonna get to the Brexit question 0:12:18.360 --> 0:12:20.520 at a second. Don't worry, Tom, that's not a central banking. 0:12:21.360 --> 0:12:28.320 Do you miss it? Mam? You already feeling Mark? You know, John, Tom, 0:12:28.400 --> 0:12:30.719 at least I've been in this room for six months. Yes, 0:12:30.800 --> 0:12:36.360 I miss Mark. Are the are the maple leaves gonna 0:12:36.480 --> 0:12:40.120 finally break the whole the curse? If you will back 0:12:40.200 --> 0:12:43.319 in nineteen sixty seven. They haven't one cent your you. 0:12:44.360 --> 0:12:46.760 Conor McDavid and the oilers, they're going to spoil it 0:12:46.800 --> 0:12:50.760 for him. You heard it here. I'm going there at 0:12:50.760 --> 0:12:53.480 the oilers, Tom, Tom, I've I've silenced you. I can't 0:12:53.480 --> 0:12:57.200 believe it. He has silence. That's unbelievable. I've never seen 0:12:57.240 --> 0:13:00.200 that before. Just to ask a Brexit question. You want 0:13:00.200 --> 0:13:02.079 me to ask a Brexit question. I don't think Mark 0:13:02.160 --> 0:13:05.200 wants to answer a Brexit question. Mark Conney. Before you go, 0:13:05.280 --> 0:13:08.240 let's finish on the story in the UK. Things have 0:13:08.360 --> 0:13:11.240 changed so much the relationship with Europe. Has this ended 0:13:11.320 --> 0:13:15.200 up where you expected it to end up? Uh, it's 0:13:15.520 --> 0:13:19.240 I mean, we're more or less at this stage, but 0:13:19.440 --> 0:13:22.480 we're still in the in the early innings, to use 0:13:22.520 --> 0:13:25.520 the US expression um of the of the post. Obviously, 0:13:25.600 --> 0:13:28.959 the post Brexit relationship will take take a while to 0:13:29.000 --> 0:13:32.000 re establish some of those relationships, including in the financial sector. 0:13:32.360 --> 0:13:35.240 I think the interests are still very much aligned, and 0:13:35.280 --> 0:13:39.360 I would hope that over time the degree of openness 0:13:39.520 --> 0:13:43.480 cooperation will will increase from this base, which is which 0:13:43.520 --> 0:13:46.120 is lower than it should be. Uh, in the interests 0:13:46.120 --> 0:13:49.240 of both Europe and the UK. Governor County. This is 0:13:49.280 --> 0:13:50.920 the world of central banking, and I'm sure you don't 0:13:50.960 --> 0:13:53.880 miss those news conferences though, Mark County, you went Special 0:13:54.000 --> 0:13:57.720 Envoy for Climate Action FANCI, former banking and the Governor. 0:14:04.000 --> 0:14:05.880 We will reach the time at which we will taper 0:14:05.920 --> 0:14:10.199 asset purchases when we've made substantial further progress toward our 0:14:10.200 --> 0:14:13.600 goals from last December when we announced that guidance, and 0:14:13.640 --> 0:14:17.080 that would that would in all likelihood be before well 0:14:17.120 --> 0:14:19.640 before at the time we consider raising interest rates. We 0:14:19.960 --> 0:14:22.800 haven't you know, voted on that order, but that is 0:14:22.920 --> 0:14:24.480 the sense of the guidance, is that it would work 0:14:24.520 --> 0:14:27.600 in that way. The Chairman of the Feller Reserve System 0:14:27.680 --> 0:14:30.640 Jerome Powell, and that is a different Jerome Powell than 0:14:30.680 --> 0:14:33.400 when he was speaking early in his tenure. He has 0:14:33.520 --> 0:14:37.480 really grown into the conversation and the guidance forward. He 0:14:37.560 --> 0:14:41.040 gives guidance of David Rubinstein peer to peer conversations. This 0:14:41.120 --> 0:14:44.920 is a piercing interview off of the Economic Club of Washington. 0:14:45.000 --> 0:14:48.320 Look for tonight at nine pm and Mr Rubenstein joins 0:14:48.400 --> 0:14:52.040 us right now. David, what did you learn from Chairman Powell? 0:14:52.120 --> 0:14:55.040 He speaks a lot, he messages a lot. What was new. 0:14:55.200 --> 0:14:59.880 In your conversation, I think he made it very clear 0:15:00.120 --> 0:15:03.040 that interest rates are unlikely to go up until after. 0:15:04.760 --> 0:15:08.160 But the standard really is whether inflation gets to two 0:15:08.200 --> 0:15:11.360 percent or above and be can sustained at that level, 0:15:11.800 --> 0:15:14.720 and secondly, whether the unemployment rate goes down to what's 0:15:14.760 --> 0:15:17.840 called full employment. So if you get full employment, let's 0:15:17.840 --> 0:15:20.560 say four percent or four and a half percent, inflation 0:15:20.640 --> 0:15:22.680 is at two percent and appears to be going above 0:15:22.760 --> 0:15:24.880 two percent, then I think he would look at an 0:15:24.880 --> 0:15:27.520 interest rate increase, but he does not anticipate that happening 0:15:27.800 --> 0:15:32.440 before is over. David Rubinstein, the arc of your career 0:15:32.600 --> 0:15:36.240 from working for Carter Mondale years ago and and also 0:15:36.320 --> 0:15:40.520 the development with Carlyle of the allocation of capital. In 0:15:40.520 --> 0:15:45.560 your conversation, did you speak about the distortions to our 0:15:45.600 --> 0:15:51.840 capital incentives by negative real yields? Well, we didn't really 0:15:51.840 --> 0:15:55.600 talk about negative real yields because it just hasn't been 0:15:55.640 --> 0:15:58.840 something that they have really focused on. The offender reserves 0:15:58.920 --> 0:16:01.720 view is that negative yields is not a really good 0:16:01.720 --> 0:16:04.280 thing to do. Now we in effect have negative yields 0:16:04.280 --> 0:16:07.760 to some extent, But he's more focused on making certain 0:16:07.760 --> 0:16:11.640 the economy comes back to a full employment situation. That's 0:16:11.680 --> 0:16:14.960 his main focus. And I would say he's very confident 0:16:14.960 --> 0:16:17.400 in his position now, he's obviously been doing it for 0:16:17.440 --> 0:16:20.000 a while. I think he's got the confidence of the 0:16:20.040 --> 0:16:22.520 of the Federal Reserve Board, and I think he's got 0:16:22.520 --> 0:16:24.400 the confidence of the Secretary of Treasury, and I would 0:16:24.400 --> 0:16:26.560 say the President United States as well. I think he's 0:16:26.560 --> 0:16:28.360 done a very good job. And as we talked about, 0:16:28.600 --> 0:16:31.200 he doesn't talk in what I called FED speak. He's 0:16:31.200 --> 0:16:33.920 not an economist, and therefore he talks like a normal 0:16:34.000 --> 0:16:36.000 human being, and that's a good thing. So this is 0:16:36.040 --> 0:16:39.080 a hugely important deal. I really agree with David on that. 0:16:39.160 --> 0:16:41.880 And as I've said your own, Powell's really grown into 0:16:41.920 --> 0:16:45.320 being comfortable not doing FED speak. There is a question 0:16:45.360 --> 0:16:48.480 of whether also highlights how the Federal Reserve has transformed 0:16:48.880 --> 0:16:52.040 from controlling the monetary system or sort of setting rates 0:16:52.240 --> 0:16:56.360 to a much more popular body, basically trying to speak 0:16:56.400 --> 0:16:58.960 to a broader mandate. And I think about the meaning 0:16:59.040 --> 0:17:02.120 behind full ployment was that the message, David, that you 0:17:02.200 --> 0:17:07.560 got from share Powell. He is not in an ivory tower. 0:17:07.680 --> 0:17:10.040 He's not an economist. He spends a lot more time 0:17:10.160 --> 0:17:12.560 up on Capitol hill talking to members or talking with 0:17:12.640 --> 0:17:15.280 them on telephone than the normal FED chairman does. He 0:17:15.359 --> 0:17:18.439 regards that as part of his job. His mandate is 0:17:18.480 --> 0:17:21.120 not to worry about climate change or to worry about 0:17:21.160 --> 0:17:24.480 minority unemployment, but they do consider those factors, I think 0:17:24.520 --> 0:17:27.000 in an oblique way, and so I think he's much 0:17:27.040 --> 0:17:30.240 more sensitive to these issues than maybe some of his predecessors. 0:17:30.240 --> 0:17:32.480 In fact, he talked about in a prior interview and 0:17:32.520 --> 0:17:34.520 in this interview the fact that when he goes the 0:17:34.560 --> 0:17:37.120 FED every day and he often bikes in um, he 0:17:37.200 --> 0:17:39.919 drives past a kind of a homeless shelter or a 0:17:39.920 --> 0:17:42.520 home set of homeless tense, and it affects him and 0:17:42.560 --> 0:17:45.200 he obviously talks about it because he recognizes the impact 0:17:45.400 --> 0:17:47.600 of the economy has not been very good on many 0:17:47.600 --> 0:17:50.040 people in the lower part of the economic strata, and 0:17:50.080 --> 0:17:52.320 he does worry about that, even though it's not technically 0:17:52.320 --> 0:17:55.399 in his mandate. He also waited on cryptocurrencies, and this 0:17:55.560 --> 0:17:58.840 comes as a coin base went public and he talked them. 0:17:58.920 --> 0:18:02.480 He talked about them being a speculative asset. What's your 0:18:02.480 --> 0:18:04.640 sense of his view, I mean, do you think that 0:18:04.640 --> 0:18:07.439 that is the correct view right now? Or is this 0:18:07.600 --> 0:18:11.119 a future, not the future, but a future of an 0:18:11.240 --> 0:18:16.840 entire investing class. I would be surprised if it disappears. 0:18:17.000 --> 0:18:19.720 It seems to serve a purpose for some people, and 0:18:19.800 --> 0:18:22.399 I do think that, uh, it's likely to be around 0:18:22.400 --> 0:18:24.720 for a while. He did say that people aren't using 0:18:24.720 --> 0:18:26.600 it to pay bills and so forth, but actually, in 0:18:26.640 --> 0:18:29.919 some places now I think you can actually use cryptocurrency 0:18:29.960 --> 0:18:32.240 to pay for certain things. It's a small part of 0:18:32.240 --> 0:18:34.960 the economy, but I think they're watching it. They're monitoring it. 0:18:35.320 --> 0:18:38.400 His main job is to make certain that the economy 0:18:38.480 --> 0:18:41.080 comes back in a reasonable way without a lot of inflation, 0:18:41.400 --> 0:18:43.760 and I think he's very, very attentive to it. He 0:18:43.840 --> 0:18:45.760 did work at my firm for a number of years. 0:18:45.920 --> 0:18:47.760 I got to know him before he was in government, 0:18:47.920 --> 0:18:51.240 and I would say he's an incredibly hard working, very 0:18:51.320 --> 0:18:54.119 articulate person. I think I think that the fact that 0:18:54.119 --> 0:18:57.399 he has a close relationship with Janet Yellen is a plus. David, 0:18:57.480 --> 0:19:00.840 I must digress in that you were familiar with the 0:19:01.040 --> 0:19:04.640 entrepreneurial spirit of the Glazer family of Rochester, New York, 0:19:05.280 --> 0:19:09.320 the acuity and financial wisdom of Johnny Henry of the 0:19:09.359 --> 0:19:13.600 Fenway Group. All these people dabbled in English football. We 0:19:13.720 --> 0:19:18.360 have seen a complete debacle of people with a lot 0:19:18.400 --> 0:19:22.040 of money trying to impute a business plan on a 0:19:22.160 --> 0:19:26.960 culture in society. What is your observation of the collapse 0:19:27.119 --> 0:19:31.560 of this soccer league across Europe? What is your observation 0:19:32.040 --> 0:19:38.199 of how fancy guys got this so wrong? Well, a 0:19:38.200 --> 0:19:40.960 lot of American entrepreneurs did make a fair amount of 0:19:41.000 --> 0:19:46.720 money investing in European soccer, typically uh British British soccer teams, 0:19:46.760 --> 0:19:48.560 and a lot of people were surprised when the Glazier 0:19:48.600 --> 0:19:51.359 family originally bought Manchester United. It turned out to be 0:19:51.400 --> 0:19:53.800 a very good deal, and I think John Henry's investment 0:19:53.800 --> 0:19:56.280 turned out to be good too. Whether the new effort 0:19:56.440 --> 0:19:58.760 will work or not, it's too early to say, but 0:19:58.880 --> 0:20:02.560 it is interesting how so many wealthy people today want 0:20:02.600 --> 0:20:05.640 to invest in sports franchises, not so much because they 0:20:05.680 --> 0:20:08.000 love the sport, because they think it's a good investment. 0:20:08.240 --> 0:20:10.399 You know, a hundred years ago, or maybe seventy five 0:20:10.480 --> 0:20:13.240 years ago, people often bought sports teams because they really 0:20:13.240 --> 0:20:15.440 loved the sport. And while I wouldn't say these people 0:20:15.520 --> 0:20:18.960 dislike the sport, it's basically an investment kind of process. Now, 0:20:19.280 --> 0:20:21.560 David's a slow day. I gotta make some news quick here. 0:20:21.640 --> 0:20:23.879 How much do you love the Baltimore Orioles right now? 0:20:24.040 --> 0:20:28.600 My goodness, Well, I did grow up in Baltimore, and 0:20:28.640 --> 0:20:30.480 I am a big fan of the Baltimore Orioles and 0:20:30.520 --> 0:20:32.760 I am hopeful that they can live up to their 0:20:32.800 --> 0:20:35.480 glory days when I was a young person. And I'm 0:20:35.480 --> 0:20:39.399 sorry so how he stepped around that, Lisa, Yeah, the headlines, David. 0:20:39.480 --> 0:20:43.159 I just think the entrepreneurial spirit you would bring to 0:20:43.240 --> 0:20:48.960 the Orioles into an American league, it would be wonderful. Well, 0:20:49.440 --> 0:20:51.320 right now, I'm focused on this interview and the J 0:20:51.520 --> 0:20:55.919 Pal which is being broadcast tonight on Bloomberg TV. I 0:20:56.000 --> 0:21:01.240 spent an hour with him down well, and I wouldn't 0:21:01.240 --> 0:21:03.720 say that the producer on the show. The producer on 0:21:03.760 --> 0:21:05.760 the show is done a wonderful job of edding it down. 0:21:05.960 --> 0:21:07.919 And I should say, Kelly, I want to congratulate her 0:21:07.920 --> 0:21:11.639 and just getting engaged this weekend, So thank you for 0:21:12.119 --> 0:21:14.320 there for that and for all the good job you're 0:21:14.320 --> 0:21:16.600 doing and edding this interview down. I think it's look 0:21:16.680 --> 0:21:19.560 if you want to see j Pal and kind of 0:21:19.640 --> 0:21:21.679 up close and personally a good way to do it, 0:21:21.720 --> 0:21:24.639 because he really does open up. He's fairly frank, and 0:21:24.800 --> 0:21:26.439 I would say I have a good relationship with him, 0:21:26.480 --> 0:21:28.359 and I think he was fairly open about it. David, 0:21:28.440 --> 0:21:30.400 thank you so much for mentioning that, and of course, 0:21:30.440 --> 0:21:32.840 with Kelly's been doing for you and all these interviews 0:21:32.880 --> 0:21:36.560 from Jeff Bezos and on his well, David Rubinstein with 0:21:36.680 --> 0:21:40.879 Jerome Paul and as Mr Rubinstein mentions, it is a 0:21:40.960 --> 0:21:44.680 piercing and different interview than the usual that you hear 0:21:45.160 --> 0:21:55.040 from Jerom Poe. Abraham rock Berry joined this Now City 0:21:55.040 --> 0:21:58.639 Global head of FX Analysis. Now, Abrahim, the conversation that 0:21:58.760 --> 0:22:01.920 the debate is pretty simple. Has we just paused or 0:22:01.960 --> 0:22:04.080 are we set to reverse? What do you think it is? 0:22:04.119 --> 0:22:08.560 Abraham greater to me back on the show, Our view 0:22:08.640 --> 0:22:11.560 is that we're only pausing and that we are very 0:22:11.640 --> 0:22:14.600 much in what you called this exhaustion phase where a 0:22:14.680 --> 0:22:17.080 number of I think the more challenging trade that trends 0:22:17.080 --> 0:22:20.880 have exhausted just as much as maybe the stabilizing forces 0:22:20.920 --> 0:22:22.840 that we've seen over the last two weeks or so, 0:22:23.000 --> 0:22:26.880 with you know, rates probably finding just about a bottom, 0:22:27.119 --> 0:22:29.600 but also actually some of the more positive sentiment about 0:22:29.640 --> 0:22:33.320 maybe peak pessimism about the third COVID wave in Europe 0:22:33.400 --> 0:22:36.399