WEBVTT - Bloomberg Surveillance TV: January 21st, 2026 0:00:02.400 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.680 --> 0:00:15.480 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.480 --> 0:00:18.440 with Lisa Bromwitz and a Marie Hortenn. Join us each 0:00:18.520 --> 0:00:21.440 day for insight from the best in markets, economics, and 0:00:21.440 --> 0:00:24.759 geopolitics from our global headquarters in New York City. We 0:00:24.800 --> 0:00:27.479 are live on Bloomberg Television weekday mornings from six to 0:00:27.560 --> 0:00:31.040 nine am Eastern. Subscribe to the podcast on Apple, Spotify 0:00:31.240 --> 0:00:33.519 or anywhere else you listen, and as always on the 0:00:33.520 --> 0:00:35.880 Bloomberg Terminal and the Bloomberg Business App. 0:00:36.360 --> 0:00:38.680 We have the wonderful lineup of guests today, starting with 0:00:39.040 --> 0:00:41.280 the very own CEO of the Royal Bank of Canada, 0:00:41.560 --> 0:00:43.000 Dave Mackay, who joins us here. 0:00:43.040 --> 0:00:44.800 Dave, wonderful to see you. Thank you for being with us. 0:00:44.840 --> 0:00:45.720 It's great to be back. 0:00:46.120 --> 0:00:48.239 It's amazing at youears gone by already. 0:00:48.000 --> 0:00:50.160 Right, I mean, what's your impression so far of this jobos? 0:00:50.159 --> 0:00:51.840 It feels very different than previous ones. 0:00:52.040 --> 0:00:54.720 It's more intense. There's more leaders here than I think 0:00:54.720 --> 0:00:57.240 there's ever been. Over eight hundred and fifty CEOs, four 0:00:57.360 --> 0:01:01.800 hundred ministers, sixty five heads of state, so there's been 0:01:01.880 --> 0:01:03.840 a lot of dialogue already in the first kind of 0:01:03.840 --> 0:01:08.000 forty eight hours, a lot of joint business government leader dialogue, 0:01:08.000 --> 0:01:10.640 a run investment to your point, looking at making deals, 0:01:10.680 --> 0:01:14.560 looking at co investment, every country, looking at diversifying trade, 0:01:15.040 --> 0:01:18.200 bringing business leaders with them to talk about co investment 0:01:18.240 --> 0:01:21.840 or whether it's manufacturing investment, defense spend in Europe and Canada's 0:01:21.880 --> 0:01:24.039 going up, a lot of discussions about how do we 0:01:24.160 --> 0:01:27.560 spend eighty billion dollars in Canada on defense? You know 0:01:27.720 --> 0:01:28.880 what partners are we looking at? 0:01:28.959 --> 0:01:29.920 How do we use that. 0:01:31.680 --> 0:01:37.080 Defense spending lever to attract manufacturing investment, in automotive energy investment. 0:01:37.760 --> 0:01:40.600 So there's a lot of grand bargain discussions going on 0:01:41.640 --> 0:01:45.160 with business leaders with and haven't seen that before, and 0:01:45.200 --> 0:01:47.559 so it's different. It feels different. It's transactional to you said, 0:01:47.600 --> 0:01:49.960 but it's exciting. At the same time, there's opportunity here. 0:01:50.040 --> 0:01:52.320 Well you're talking about the excitement, and yet you are 0:01:52.520 --> 0:01:56.040 Royal Bank of Canada. You are expanding in the United States, 0:01:56.400 --> 0:01:59.120 and right now there is a breakdown in the relationship 0:01:59.160 --> 0:02:00.440 between these two trees. 0:02:00.880 --> 0:02:02.720 How problematic is that for you at. 0:02:02.600 --> 0:02:04.280 A time where you have been expanding in the United 0:02:04.280 --> 0:02:07.200 States and you do see flows at least in travel 0:02:07.800 --> 0:02:09.160 going me other direction a little bit. 0:02:10.080 --> 0:02:13.160 No, I think we're in this temporary world where we're 0:02:13.160 --> 0:02:16.280 trying to figure out how we're going to trade going forward. 0:02:16.280 --> 0:02:20.640 But I come back to the core of USMCA. Canada 0:02:20.720 --> 0:02:24.440 really helps America with affordability. We make things in Canadian dollars, 0:02:24.520 --> 0:02:26.480 we sell it to the US. The US buy is 0:02:26.480 --> 0:02:28.800 it that a thirty percent discount, but it's automotive parts, 0:02:28.840 --> 0:02:32.120 whether it's steel, aluminum, food, and a lot of our 0:02:32.120 --> 0:02:34.680 Canolagos the United States, and therefore we help keep prices 0:02:34.720 --> 0:02:36.080 down in the US. And if the US were to 0:02:36.080 --> 0:02:39.760 bring all of that back, it's inflationary, you shortage of 0:02:39.840 --> 0:02:41.480 labor in the United States. So as you look at 0:02:41.480 --> 0:02:44.600 the core of USMCA, it's good for America, and I 0:02:44.600 --> 0:02:47.000 think that gives me comfort that we will come to 0:02:47.760 --> 0:02:50.600 an arrangement going forward recognizing this is good for America. 0:02:50.720 --> 0:02:53.160 It's good for Canada obviously, but it's good for America 0:02:53.200 --> 0:02:55.960 and that's important to the President. There will be change, 0:02:56.000 --> 0:02:58.160 I don't think it will be the same agreement going forward, 0:02:58.400 --> 0:03:00.760 but the core of it, I think is so important 0:03:00.760 --> 0:03:03.639 to both sides, and that gives me comfort that we 0:03:03.880 --> 0:03:06.359 will continue to trade Canada, and you heard our Prime 0:03:06.360 --> 0:03:09.840 minister's message. I'm sure we'll talk about that has to 0:03:09.960 --> 0:03:12.720 diversified trade. I think we've relied on trade to the 0:03:12.800 --> 0:03:14.919 US substantially a big part of our economy. And I 0:03:14.960 --> 0:03:19.560 think that the conversations that are happening before Davos after Davos. 0:03:19.600 --> 0:03:22.560 In Davos are very much about here's what we're good at. 0:03:22.800 --> 0:03:25.760 Can we find a grand bargain deal. Can we expand 0:03:25.800 --> 0:03:29.200 trade across multiple countries where that's Europe, A lot of 0:03:29.200 --> 0:03:31.320 discussion with South Asia and Asia, and a lot of 0:03:31.360 --> 0:03:34.200 discussion with the Middle East, and investing in Canada. And 0:03:34.240 --> 0:03:37.360 what's different about Davos this year? Honestly, Lisa, it's risk 0:03:37.440 --> 0:03:37.960 on Canada. 0:03:38.800 --> 0:03:40.400 Let's talk about the Prime minister speech. 0:03:40.520 --> 0:03:42.720 The sharpest tone I've ever heard from Mark Carney about 0:03:42.760 --> 0:03:46.120 Donald Trump without mentioning Trump's name, He's talking about a 0:03:46.160 --> 0:03:48.600 new world order, saying these middle countries, if you're at 0:03:48.640 --> 0:03:51.280 the table prepared to get eaten. Does that make it 0:03:51.360 --> 0:03:54.920 harder when you're talking about things like watching the USMCA 0:03:55.160 --> 0:03:58.360 trade deal. Do you think that the relationship is going 0:03:58.400 --> 0:04:02.000 to become more challenging in Canada and the United States. 0:04:03.480 --> 0:04:06.360 I think relationships are about value exchange, and if there's 0:04:06.400 --> 0:04:08.960 good value exchange and you both see a benefit to that, 0:04:09.080 --> 0:04:11.240 then you're going to find the right place. So when 0:04:11.720 --> 0:04:14.160 just as I said, there's great value exchange, four hundred 0:04:14.200 --> 0:04:17.080 billion dollars go back and forth across the border every 0:04:17.160 --> 0:04:20.880 year because there's value. We're the number one trade relationship 0:04:21.480 --> 0:04:24.800 with thirty six states. Most of those are red states 0:04:24.839 --> 0:04:26.040 at the end of the day, So when we think 0:04:26.080 --> 0:04:30.239 about the importance of that relationship just beyond a federal 0:04:30.320 --> 0:04:33.599 level into the state level, it's really important. So I 0:04:33.600 --> 0:04:36.760 think you come back and you say it's good for America, 0:04:36.839 --> 0:04:39.680 it's good for Canada. That's the basis for exchange of 0:04:39.760 --> 0:04:41.919 value and going forward. Having said that, I think the 0:04:41.920 --> 0:04:45.760 Prime Minister is very clear that we haven't done our 0:04:45.880 --> 0:04:48.520 role in defending ourselves. We haven't invested enough of our 0:04:48.520 --> 0:04:51.320 GDP in defense, and you've seen that commitment to spend 0:04:51.320 --> 0:04:52.200 that money. 0:04:52.360 --> 0:04:53.080 We have to do that. 0:04:53.120 --> 0:04:56.279 We have to increasingly defend ourselves and are not just 0:04:56.320 --> 0:04:58.799 our economic security, it's our physical security. 0:04:58.839 --> 0:04:59.840 We have to play a bigger role. 0:05:00.080 --> 0:05:01.719 We have to defend the Arctic and we have to 0:05:01.760 --> 0:05:03.320 invest in the Arctic, and it's a big part of 0:05:03.360 --> 0:05:05.360 the commitment we've made to NATO and we've made to 0:05:05.400 --> 0:05:08.400 the United States that you'll see a greater investment from Canada. 0:05:08.400 --> 0:05:12.279 And we have to have dual use investments, not just military, 0:05:12.320 --> 0:05:15.599 but commercial and economic investments in the Arctic in Canada 0:05:15.640 --> 0:05:18.000 should play a role in doing that. So you're seeing 0:05:18.040 --> 0:05:20.480 that a big part of his speech yesterday. And we 0:05:21.080 --> 0:05:23.359 have to create scale. We're in a world of scale. 0:05:23.560 --> 0:05:26.160 Businesses needs scale, countries need scale, and I think the 0:05:26.200 --> 0:05:29.600 Prime Minister's message was we have to continue to diversify, 0:05:30.000 --> 0:05:32.160 but diversify in a way that you continue to build 0:05:32.200 --> 0:05:33.000 scale and what you need. 0:05:33.080 --> 0:05:34.680 So I think that's what I took away when he. 0:05:34.600 --> 0:05:37.920 Says diversify, does it mean maybe a new strategic partnership 0:05:37.960 --> 0:05:38.520 with China? 0:05:38.640 --> 0:05:40.040 Is that what you take from the Prime minister? 0:05:40.960 --> 0:05:42.719 You know, the Prime Mister was just in China a 0:05:42.720 --> 0:05:46.000 week ago and it was a very important delegation that 0:05:46.200 --> 0:05:48.960 he led to China to kind of reset the relationship 0:05:49.000 --> 0:05:51.720 after a better part of a decade where the relationship 0:05:51.760 --> 0:05:55.000 had separated, and part of it was to renew economic 0:05:55.080 --> 0:05:57.760 ties and to agree on areas where we definitely agree 0:05:57.880 --> 0:05:59.920 and to say these are areas where we might not agree, 0:06:00.000 --> 0:06:01.680 but let's focus on where we agree and where we 0:06:01.720 --> 0:06:03.200 can build a future together. 0:06:03.240 --> 0:06:04.719 And I think that was a very positive step. 0:06:04.760 --> 0:06:09.200 You saw China make a commitment to resume buying our 0:06:09.200 --> 0:06:11.960 canola oil, and that's very important market for Canola. The 0:06:12.000 --> 0:06:15.880 United States and China of big markets. We ceded a 0:06:15.920 --> 0:06:20.000 small part of our automotive market three percent to Chinese imports. 0:06:20.040 --> 0:06:24.200 That's an affordability issue. China will bring in affordable electric vehicles, 0:06:24.200 --> 0:06:25.960 So I think that's good for Canadians at the end 0:06:25.960 --> 0:06:28.239 of the day. So I think there's more to build 0:06:28.279 --> 0:06:31.480 on and I think it's part of diversifying across multiple countries. 0:06:31.600 --> 0:06:34.080 Okay, so we've gone all this time without talking about 0:06:34.080 --> 0:06:34.960 what you actually have done. 0:06:35.000 --> 0:06:37.320 You just had a year that's phenomenal. You had record. 0:06:37.080 --> 0:06:41.600 Revenues for any Canadian bank ever and you have grown tremendously. 0:06:41.720 --> 0:06:42.920 You beat all of your targets. 0:06:42.920 --> 0:06:45.960 I'm just wondering, when you're talking about diversifying businesses, does 0:06:46.000 --> 0:06:47.240 it go to your business as well? 0:06:47.279 --> 0:06:50.080 Are you expanding in places like China? Are you still 0:06:50.120 --> 0:06:52.120 planning to expand in the United States? 0:06:53.720 --> 0:06:57.279 Our second home markets, the United States. We've grown wonderfully 0:06:57.279 --> 0:06:59.159 in the United States. We just launched a whole new 0:06:59.279 --> 0:07:02.200 treasury management platform, the United States RBC clear that's had 0:07:02.240 --> 0:07:05.479 a great reception. Technology leaf we brought in twenty five 0:07:05.520 --> 0:07:09.280 billion dollars of new money from US senior corporate's fortune 0:07:09.360 --> 0:07:11.520 kind of five hundred. So the United States is our 0:07:11.560 --> 0:07:13.760 second home market and we continue to invest there. We 0:07:13.880 --> 0:07:17.080 lend significantly to US corporates, We lend in the mid 0:07:17.120 --> 0:07:19.680 corporate space, in the commercial space, and we have the 0:07:19.680 --> 0:07:21.880 fifth largest high net worth platform in the United States. 0:07:21.920 --> 0:07:24.360 So the US is very important to US, serving Americans, 0:07:24.360 --> 0:07:28.680 helping Americans grow. And I told the administration already yesterday 0:07:28.720 --> 0:07:31.680 that we've invested significant in the US economy and we're 0:07:31.720 --> 0:07:33.200 part of the solution, and we. 0:07:33.160 --> 0:07:36.000 Feel very welcome in the United States. So it's a 0:07:36.040 --> 0:07:37.080 big part of our strategy. 0:07:37.120 --> 0:07:40.160 To your point, our strategy has not included China up 0:07:40.240 --> 0:07:42.800 until now for all the reasons where we didn't have 0:07:42.840 --> 0:07:47.080 significant diplomatic ties. We didn't see the basis for that investment, 0:07:47.120 --> 0:07:49.560 and now we have to review that. I can't say 0:07:49.680 --> 0:07:52.920 how we would go back in, but if the trade 0:07:52.960 --> 0:07:56.920 continues to diversify and Canadian corporates invest in China, then 0:07:57.040 --> 0:07:58.840 we will have to be part of that. What I'm 0:07:58.880 --> 0:08:02.920 focused on now is the least significant investment commitments from 0:08:02.960 --> 0:08:05.000 the Middle East of Canada. I think one of the 0:08:05.000 --> 0:08:07.960 themes of Davos is Middle East is a great place 0:08:08.000 --> 0:08:11.320 to invest. Abu Dhabi, Dubai u Ate on that side, 0:08:11.440 --> 0:08:16.000 Riad and Saudi Arabia significant commitments on both sides, and 0:08:16.040 --> 0:08:18.720 you'll see a greater presence from RBC in the Middle 0:08:18.760 --> 0:08:20.480 East as well. So yes, to your point, it's a 0:08:20.520 --> 0:08:24.000 great question. You're seeing RBC become a more globally connected 0:08:24.000 --> 0:08:26.280 bank because Canada is going to become a more globally 0:08:26.280 --> 0:08:29.520 connected country. In the US is already incredibly globally connected country. 0:08:30.080 --> 0:08:42.880 Stay with us, Mulbloomberg. Savannah's coming up after this. We 0:08:42.960 --> 0:08:45.520 begin this out with stocks slightly lower following the biggest 0:08:45.520 --> 0:08:47.880 slide in three months of investors search for direction. The 0:08:47.880 --> 0:08:50.880 Morgan Stanley chairman and see Ted pick has Sino and 0:08:50.960 --> 0:08:51.800 he joined Usnaphomore. 0:08:51.880 --> 0:08:52.600 Ted, good to see. 0:08:52.480 --> 0:08:55.520 You guys, Thanks for having me. I'll like your mom 0:08:55.880 --> 0:08:57.600 like fading good, feeling pretty good. 0:08:57.600 --> 0:08:58.760 You're not going to be in the speech in about 0:08:58.800 --> 0:09:00.600 twenty eight minutes time. Avoid that. 0:09:01.040 --> 0:09:02.880 Yeah, I'll be with you, guys. 0:09:03.440 --> 0:09:05.559 Let's talk about how things are set up for twenty six. 0:09:05.640 --> 0:09:08.880 We've drawn a big distinction between the energy that's coming 0:09:08.880 --> 0:09:11.199 from European officials and the emotion they have about a 0:09:11.240 --> 0:09:13.559 place like Greenland, and the optimism that people have for 0:09:13.600 --> 0:09:17.400 the broader US economy, particularly from bankers regarding the pipeline 0:09:17.520 --> 0:09:19.280 and the amount of debt issuance we've seen over the 0:09:19.320 --> 0:09:21.280 past few months. The debt end to writing that you've 0:09:21.440 --> 0:09:23.640 really benefited from that's going to fund a lot of 0:09:23.640 --> 0:09:26.920 the transition. How ammed up are you about the year ahead? 0:09:27.120 --> 0:09:29.040 Well, thanks for having me, guys, great to see you. 0:09:29.679 --> 0:09:33.880 I'm pretty amped up. You know, we had several years 0:09:33.960 --> 0:09:35.760 where the emin ACTIVI who's going to get going? And 0:09:35.760 --> 0:09:38.720 then COVID happen and then retrooved, and it's taken a 0:09:38.720 --> 0:09:41.400 while for a tongue glue. But this kind of in 0:09:41.440 --> 0:09:45.800 this case literal noise speaks to c suite need to act, 0:09:46.160 --> 0:09:49.880 whether it's to reglobalize or reorient where your operations are, 0:09:50.040 --> 0:09:52.040 who you want to do business with, and as long 0:09:52.080 --> 0:09:54.320 as there's activity, we're busy. So cross border M and 0:09:54.320 --> 0:09:57.120 a large cap M and a going to be important 0:09:57.679 --> 0:09:59.720 AI access an accelerant to that too. If you want 0:09:59.720 --> 0:10:02.480 to act, you get after their productivity gains and embedded 0:10:02.480 --> 0:10:04.400 in AI. You have to have the wherewithal to do it. 0:10:04.600 --> 0:10:06.560 And if your market cap is thirty or forty billion, 0:10:06.960 --> 0:10:08.560 that's tough. You know, how do you take a couple 0:10:08.600 --> 0:10:10.920 of points off your income statement to do that year 0:10:10.960 --> 0:10:13.319 after year? But if you're two three hundred billion, maybe 0:10:13.360 --> 0:10:15.800 you got a shot. So people are thinking bigger. And 0:10:15.840 --> 0:10:18.440 then the sponsors, as you know, a couple thousand companies 0:10:18.480 --> 0:10:19.960 that have been sitting there that have a billion dollar 0:10:20.000 --> 0:10:23.240 market caps implied they need to come. And then very 0:10:23.240 --> 0:10:26.280 importantly have these great companies that have been private. And 0:10:26.280 --> 0:10:28.600 over the last fifteen years we've seen companies go public 0:10:28.840 --> 0:10:31.079 to defase options or effectively be secondaries. 0:10:31.200 --> 0:10:32.600 You may actually see great companies that. 0:10:32.559 --> 0:10:35.040 Are growth companies, some of them in the AI ecosystem, 0:10:35.080 --> 0:10:38.040 that want to go tap capital. So for the investment bank, 0:10:38.080 --> 0:10:40.640 a great period and for a wealth manager, leading wealth 0:10:40.640 --> 0:10:42.719 manager in the US and the world, you want to 0:10:42.720 --> 0:10:44.800 allocate your capital efficiently, so very exciting. 0:10:45.160 --> 0:10:46.800 Some pank some of those business lines. So let's just 0:10:46.800 --> 0:10:49.480 pick up on the IPO pipeline. The activity we could 0:10:49.480 --> 0:10:53.079 see later this year SpaceX open AI. We're talking about 0:10:53.080 --> 0:10:55.760 some absolute monsters. Even the team have been historically quite 0:10:55.800 --> 0:10:58.320 dominant in the tech sector. What are you doing right 0:10:58.360 --> 0:10:59.800 now to prepare for that moment that might be an. 0:10:59.760 --> 0:11:04.080 Office Well, these companies, you know, you bank them for 0:11:04.120 --> 0:11:06.720 a whole bunch of years and you get to know them. 0:11:07.320 --> 0:11:10.800 So there's a process, obviously the formal bakeoff process and 0:11:10.840 --> 0:11:12.320 then the go or no go decision. 0:11:12.720 --> 0:11:14.760 But typically the company has. 0:11:14.600 --> 0:11:16.000 A pretty good idea of what it wants to do 0:11:16.120 --> 0:11:19.200 ahead of time because it's selected its group. And the 0:11:19.240 --> 0:11:22.120 stakes are really high this round because as you say, 0:11:22.160 --> 0:11:25.360 these the implied market caps these companies are enormous, but 0:11:25.400 --> 0:11:28.880 also they are paradoxically they are very large but also 0:11:28.960 --> 0:11:30.960 mega growers. They have, you know, some of them have 0:11:31.280 --> 0:11:33.400 a little bit of a change the world field to them, 0:11:33.640 --> 0:11:35.520 so they could become must own. I mean, one of 0:11:35.600 --> 0:11:37.079 the things that you guys have talked a lot about 0:11:37.160 --> 0:11:39.320 is so much of the equity base has become either 0:11:39.400 --> 0:11:42.360 beta or it's become kind of the seven or eight names. 0:11:42.679 --> 0:11:44.959 What if there's some additional companies that three, four, or 0:11:45.000 --> 0:11:47.599 five hundred billion dollar market caps and trillion and a 0:11:47.600 --> 0:11:50.360 half dollars market cap. The active management community say is 0:11:50.360 --> 0:11:51.640 I want to own that. I want to own that 0:11:51.679 --> 0:11:53.480 from the time of the IPO. So I think it's 0:11:53.480 --> 0:11:55.720 not just Wall Street getting to know these companies. It's 0:11:55.760 --> 0:11:57.680 a whole bunch of investors who have either backed into 0:11:57.720 --> 0:11:59.880 early rounds or want to be there when the IPO. 0:12:00.440 --> 0:12:02.480 When we were speaking with you a year ago in 0:12:02.559 --> 0:12:05.160 these seats, you were talking about how it is going 0:12:05.200 --> 0:12:07.120 to be a great year for IPOs and M and A, 0:12:07.200 --> 0:12:08.880 and it was for your bottom line. 0:12:08.880 --> 0:12:09.920 You had an incredible year. 0:12:10.679 --> 0:12:12.679 There was, though, a lot of IPOs and a lot 0:12:12.720 --> 0:12:16.720 of deals that got stymied by Liberation Day and policy uncertainty. 0:12:17.200 --> 0:12:19.840 What has to go right for some of these deals 0:12:19.880 --> 0:12:23.839 to come to fruish and open ay anthropic SpaceX Well, I. 0:12:23.760 --> 0:12:25.440 Think part of the reason that these companies are so 0:12:25.559 --> 0:12:31.440 interesting to investors is they are not rushed to go public, 0:12:31.760 --> 0:12:33.600 So there has to be an element of being patient. 0:12:34.400 --> 0:12:36.440 If you're in and around the ecosystem. They don't have 0:12:36.520 --> 0:12:38.319 to come in the first half of twenty six I 0:12:38.360 --> 0:12:39.760 think come in the second half of twenty sixth. They 0:12:39.760 --> 0:12:42.240 could even come in twenty seven, but they are drawing 0:12:42.320 --> 0:12:45.719 a whole bunch of interest to names like them, derivative 0:12:45.760 --> 0:12:48.880 plays and the ecosystem. As you sort of disaggregate the 0:12:49.040 --> 0:12:51.080 entire AI daisy chain, where do you want to play? 0:12:51.280 --> 0:12:54.439 So the anticipation of the company going public almost is 0:12:54.960 --> 0:12:58.040 as important as the company itself coming. But whether they 0:12:58.040 --> 0:13:00.679 come LEASA in twenty six or twenty seven, they're going 0:13:00.720 --> 0:13:01.040 to come. 0:13:01.240 --> 0:13:01.920 They're going to come. 0:13:02.679 --> 0:13:05.120 It's sort of a dissonance right now when you talk 0:13:05.160 --> 0:13:07.400 to business leaders about how much enthusiasm there is for 0:13:07.480 --> 0:13:10.240 deals and for energy in the US economy, and then 0:13:10.240 --> 0:13:12.680 when you hear the policymakers, you hear uncertainty and you 0:13:12.760 --> 0:13:16.079 hear sell America. How do you square those two narratives 0:13:16.160 --> 0:13:17.920 at a time where you do hear a growing number 0:13:17.920 --> 0:13:21.079 of investors say they are diversifying away from US assets. 0:13:22.040 --> 0:13:25.000 I hear you guys talking about this a lot. I 0:13:25.000 --> 0:13:27.680 think there are two separate phenomena, but they're not exclusive. 0:13:28.200 --> 0:13:29.960 One is we got the arca history. 0:13:30.520 --> 0:13:32.160 You know, I've gone on about the end of the 0:13:32.200 --> 0:13:34.319 end of history and that things would get going again 0:13:34.679 --> 0:13:37.160 and the Nation States would be battling for a Gemini 0:13:37.320 --> 0:13:39.960 and kind of trying to you know, win out on 0:13:40.000 --> 0:13:42.679 the rise and fall nations. That's just a historical fact 0:13:42.679 --> 0:13:45.960 that kind of got there was an interregnum between Berlin, 0:13:46.000 --> 0:13:48.520 Wall and COVID. We're actually back to the balance of 0:13:48.640 --> 0:13:51.320 human history as we've all studied, and that means there's 0:13:51.360 --> 0:13:53.920 going to be the kind of stuff that we are 0:13:54.200 --> 0:13:56.319 living through right now. It's just been a while and 0:13:56.880 --> 0:14:00.000 I don't know necessarily that that is something we should 0:14:00.040 --> 0:14:04.760 expect to go away anytime soon. There's going to be renationalizing, nationalizing, 0:14:04.960 --> 0:14:06.840 and that means in some case they'll be higher country risk, 0:14:06.880 --> 0:14:10.679 they'll be maybe pockets of liquidity. There may be opportunistic 0:14:11.040 --> 0:14:15.439 transactions or allocations that happened. But after twenty years of 0:14:15.480 --> 0:14:18.199 financial oppression, we're back to live markets and. 0:14:18.160 --> 0:14:19.640 Live nation states. That's here. 0:14:19.840 --> 0:14:22.080 But at the same time, you have US capital markets 0:14:22.120 --> 0:14:23.800 which are more than half the capital stock. 0:14:24.040 --> 0:14:25.320 And the reality is very. 0:14:25.200 --> 0:14:30.440 Basically as we know, corporate health is excellent, consumer health 0:14:30.440 --> 0:14:33.600 at the top end is excellent, and obviously the administration 0:14:33.680 --> 0:14:36.520 is getting after housing for the bottom half of the 0:14:36.600 --> 0:14:40.040 k earnings as you know, grew eight percent this year, 0:14:40.040 --> 0:14:42.640 that could grow in the mid teams next year, that's 0:14:42.760 --> 0:14:44.120 double the long term average. 0:14:44.320 --> 0:14:47.600 That's pretty good. So good corporate, good. 0:14:47.360 --> 0:14:51.240 Consumer, excellent, capital markets, an easier FED the lowered by 0:14:51.240 --> 0:14:51.960 seventy five. 0:14:52.320 --> 0:14:53.360 Maybe there's more to go. 0:14:53.760 --> 0:14:56.680 Maybe it's a demand driven twenty twenty six, in which 0:14:56.720 --> 0:14:57.960 case the Fed doesn't have to move. 0:14:58.120 --> 0:14:58.680 We have good. 0:14:58.560 --> 0:15:01.400 Inflation, we keep on powering forwar growth. Or maybe it's 0:15:01.440 --> 0:15:05.120 supply side where they're spending, but there isn't the same 0:15:05.200 --> 0:15:07.960 kind of job creation and the federal help out, so 0:15:08.400 --> 0:15:11.640 they're downside cases. But just in the main oh, and 0:15:11.720 --> 0:15:14.760 the tailwinds of deregulation and the bill are kicking in. 0:15:15.080 --> 0:15:17.960 It kind of is hard to argue against the twenty 0:15:18.080 --> 0:15:20.400 six US led growth case. 0:15:20.600 --> 0:15:21.560 Now we can get a. 0:15:21.480 --> 0:15:23.760 Debate about where ASID prices should be, but in terms 0:15:23.800 --> 0:15:26.160 of just two years ago were talking about recession. Last 0:15:26.240 --> 0:15:28.800 year we weren't sure. Because the administrations come in, we're 0:15:28.800 --> 0:15:31.840 not talking about that today. So for our business, very simply, 0:15:32.120 --> 0:15:34.760 we write tickets to kind of two times GDP nominal, 0:15:35.040 --> 0:15:37.120 and so if you think about our Wealth and Investment Bank, 0:15:37.120 --> 0:15:39.360 if we're going to grow you know, five ten percent 0:15:39.440 --> 0:15:42.520 on a two times basis nominally, that should be pretty 0:15:42.520 --> 0:15:43.800 good for our business for doing our job. 0:15:43.920 --> 0:15:47.640 Culporate health is very good, it's excellent. Software in health 0:15:47.800 --> 0:15:49.680 is questionable. Right, can we talk about that. 0:15:49.800 --> 0:15:49.960 Right? 0:15:49.960 --> 0:15:51.400 The move in the last twenty four hours, the live 0:15:51.440 --> 0:15:54.120 market stuff, let's get into that. The move in Japan 0:15:54.160 --> 0:15:56.120 at the long end of the curve, is that a 0:15:56.160 --> 0:15:58.440 warning shot, is that the start of something bigger? 0:15:59.360 --> 0:16:01.560 Well, I mean this Japan trade has been talked about 0:16:01.600 --> 0:16:07.000 forever and uh and I would expect then in a 0:16:07.040 --> 0:16:12.680 lot of you know, highly indebted countries, you know off 0:16:12.680 --> 0:16:16.560 the Liz Trust moment, where the demographics are poor and 0:16:16.600 --> 0:16:19.200 you don't have the wherewithal our FIAT to kind of 0:16:19.200 --> 0:16:21.240 work your way through that, there could. 0:16:21.120 --> 0:16:23.520 Be some vulnerability. So what does that mean? 0:16:23.560 --> 0:16:26.160 That means if we're sort of do our economics meets 0:16:26.720 --> 0:16:28.600 you know, poly side thing. I think that means you 0:16:28.640 --> 0:16:31.680 want to get closer to places where you can act 0:16:31.800 --> 0:16:35.640 in your joint economic interest. And I think the Japanese 0:16:36.520 --> 0:16:39.520 examples one that we should continue to pay attention to. 0:16:39.760 --> 0:16:41.840 I wouldn't be surprised that we see pockets of that 0:16:42.240 --> 0:16:44.640 now and then when you know, there's a little talk 0:16:44.720 --> 0:16:47.480 of the bounty looks lousy, but we're going to inject 0:16:47.520 --> 0:16:50.120 a little stimulus and let's see I anyone notices, Yeah, 0:16:50.240 --> 0:16:52.240 they noticed, so you know you sort of have to 0:16:52.600 --> 0:16:54.760 you know, then then you just it's you know, it's 0:16:54.760 --> 0:16:57.840 a triballoon. It gets pulled back, and that's probably healthy 0:16:57.840 --> 0:16:59.280 for markets. You know, you see a lot of that's 0:16:59.320 --> 0:17:01.880 been bought act today. But that's different than the US 0:17:01.920 --> 0:17:06.000 Treasury phenomenon. Yeah, that's that's been hugely overblown. The reality 0:17:06.080 --> 0:17:09.320 is that when we did this a year ago, the 0:17:09.440 --> 0:17:11.840 Treasury Secretary is you know of anyone was talking about 0:17:11.840 --> 0:17:13.800 the ten year being so important to keep an eye on. 0:17:13.840 --> 0:17:16.160 I think the ten years around four fifty seven, four 0:17:16.240 --> 0:17:18.600 fifty five for sixty now it's a four twenty five 0:17:18.640 --> 0:17:20.720 four to thirty, so the ten years doing his job, 0:17:20.720 --> 0:17:24.040 there's some steepening. Yes, it's probably healthy. So I do 0:17:24.080 --> 0:17:27.320 think there's a conflation between kind of US Treasury phenomenon 0:17:27.400 --> 0:17:30.280 and the world, and I think there's a difference, and 0:17:30.440 --> 0:17:32.439 you know, we just have to continue to highlight the. 0:17:32.440 --> 0:17:33.520 Difference very quickly. 0:17:33.520 --> 0:17:37.080 Ten you spend time you grew up in Venezuela, New world. 0:17:37.119 --> 0:17:39.639 Now are you planning to maybe help facilitate companies go 0:17:39.720 --> 0:17:40.120 back in. 0:17:42.000 --> 0:17:45.159 Not prep for that question you lived in. Thank you 0:17:45.160 --> 0:17:45.560 so much. 0:17:46.440 --> 0:17:48.720 Interested because you have a different take, probably than every 0:17:48.720 --> 0:17:50.679 other CEO walking around this forum. 0:17:51.160 --> 0:17:54.680 Well that as well as an extraordinary place, has a 0:17:55.480 --> 0:17:59.639 proud but now in recent decades, very troubled history. But 0:18:00.119 --> 0:18:04.120 is you know, if you know your Monroe doctrine critical 0:18:04.480 --> 0:18:07.520 and has albeit as you've talked about it at length, 0:18:08.200 --> 0:18:12.800 it's it's it's more sulphuric, but very high, vast quantities 0:18:12.840 --> 0:18:16.200 of oil beneath the ground. So do I think Venezuela 0:18:16.240 --> 0:18:18.040 is going to be relevant? I think Latin America is 0:18:18.080 --> 0:18:20.800 going to be relevant. I think the Hemisphere is going 0:18:20.840 --> 0:18:24.239 to be relevant in its sort of thinking around how 0:18:24.359 --> 0:18:28.320