1 00:00:00,080 --> 00:00:07,400 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,119 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:47,159 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. All we're 11 00:00:47,200 --> 00:00:49,120 Speaker 2: gonna do is dive into earnings on a Friday. We've 12 00:00:49,120 --> 00:00:51,360 Speaker 2: got three earnings coming out City Group later, which in 13 00:00:51,400 --> 00:00:54,480 Speaker 2: itself will be fascinating. It was a reverse ten for 14 00:00:54,520 --> 00:00:57,080 Speaker 2: when stock split fifteen years ago, and they're still trying 15 00:00:57,120 --> 00:00:59,720 Speaker 2: to figure out to move forward. Wells Fargo with a 16 00:00:59,800 --> 00:01:03,959 Speaker 2: very different platform, always challenged Damiens chomping at the bit 17 00:01:04,000 --> 00:01:07,000 Speaker 2: to ask Allison Williams about that, But I'm gonna start 18 00:01:07,040 --> 00:01:12,600 Speaker 2: with Fortress Diamond. It just keeps continuing, Allison, you have 19 00:01:12,680 --> 00:01:16,800 Speaker 2: lived this. Harrison was running JP Morgan in this young 20 00:01:17,000 --> 00:01:20,720 Speaker 2: Turk Jamie Diamond at Bank one and the Midwest was 21 00:01:20,760 --> 00:01:23,160 Speaker 2: going to come in and save the day, Save the day. 22 00:01:23,200 --> 00:01:27,320 Speaker 2: He's built a juggernaut. Let's start with the JP Morgan distinction. 23 00:01:27,880 --> 00:01:30,199 Speaker 2: Why are they different this Friday morning. 24 00:01:31,080 --> 00:01:34,640 Speaker 3: I think they just continue to reap the benefit of 25 00:01:34,720 --> 00:01:37,440 Speaker 3: their investments. I think one of the things that JP 26 00:01:37,560 --> 00:01:41,520 Speaker 3: Morgan has done is, you know, being willing to spend 27 00:01:41,520 --> 00:01:43,480 Speaker 3: the money. You know, keep in mind, a couple of 28 00:01:43,560 --> 00:01:45,640 Speaker 3: years ago they said, look, we need to invest. We're 29 00:01:45,680 --> 00:01:49,520 Speaker 3: investing in technology. People were very upset about the operating costs. 30 00:01:49,600 --> 00:01:54,600 Speaker 3: But they're proving, and they're proving that those investments are 31 00:01:54,840 --> 00:01:56,080 Speaker 3: yielding results. 32 00:01:56,520 --> 00:01:59,639 Speaker 2: Trading at a twelve thirteen multiple, they're up sixteen percent 33 00:01:59,640 --> 00:02:02,720 Speaker 2: per year for the last ten years. Nobody's even close. 34 00:02:03,200 --> 00:02:07,360 Speaker 2: And I got a headline JP Morgan notch's profit on 35 00:02:07,680 --> 00:02:10,600 Speaker 2: visa gain is at the SaaS summer House north of 36 00:02:10,720 --> 00:02:12,840 Speaker 2: New York City, killing it for Jamie. 37 00:02:13,000 --> 00:02:15,120 Speaker 3: This is how they're paying for all the great things 38 00:02:15,120 --> 00:02:17,800 Speaker 3: that Damien was just referencing. So they had they had 39 00:02:17,840 --> 00:02:23,200 Speaker 3: an eight billion dollar gain related to tendering some visa shares. 40 00:02:23,240 --> 00:02:27,160 Speaker 3: They announced this actually even prior to their investor day. 41 00:02:27,200 --> 00:02:30,440 Speaker 3: So I think for the most part, investors saw this coming. 42 00:02:30,560 --> 00:02:33,080 Speaker 3: But you know, you sometimes you don't know who's watching 43 00:02:33,160 --> 00:02:36,120 Speaker 3: the stock and if they're seeing this extra billion and 44 00:02:36,240 --> 00:02:38,520 Speaker 3: expenses related to that gain, and if there could be 45 00:02:38,560 --> 00:02:41,280 Speaker 3: some negative reaction to that. But we think it's smart. 46 00:02:41,280 --> 00:02:44,320 Speaker 3: So they have this big eight billion dollar gain, they're 47 00:02:44,360 --> 00:02:47,920 Speaker 3: gonna pull forward some of their charitable contributions by you know, 48 00:02:48,480 --> 00:02:51,400 Speaker 3: funding that funding those contributions with shares, So we know 49 00:02:51,480 --> 00:02:55,720 Speaker 3: that that's a great tax advantage. But that is upping 50 00:02:55,720 --> 00:02:59,320 Speaker 3: their costs for the year by a billion, So we 51 00:02:59,400 --> 00:03:01,520 Speaker 3: think that that that's a smart move. I think on 52 00:03:01,560 --> 00:03:04,640 Speaker 3: the more negative side, Wells Fargo guiding up on their 53 00:03:04,680 --> 00:03:07,639 Speaker 3: cost which our investors are not going to be happy about. 54 00:03:08,360 --> 00:03:11,920 Speaker 3: These operating losses or not operating losses as they refer 55 00:03:12,000 --> 00:03:16,200 Speaker 3: to them, the customer remediation costs that relate to the 56 00:03:16,280 --> 00:03:19,360 Speaker 3: ongoing issues the asset cap that have been sort of 57 00:03:20,280 --> 00:03:22,000 Speaker 3: going on since about twenty sixteen. 58 00:03:22,280 --> 00:03:26,480 Speaker 1: I mean, look, Amy, net interest margin, op X, credit quality. 59 00:03:26,520 --> 00:03:29,240 Speaker 1: Who cares? All we care about are banking revenues and 60 00:03:29,280 --> 00:03:32,440 Speaker 1: trading results. Talk to us about fix trading, equity trading. 61 00:03:32,480 --> 00:03:34,400 Speaker 1: I mean it's been a pretty good quarter. No, I mean, 62 00:03:34,400 --> 00:03:36,720 Speaker 1: what's going on at JP Morgan. My man Matty Kolakowski 63 00:03:36,840 --> 00:03:39,120 Speaker 1: and securitized sales over there said he had a big quarter. 64 00:03:39,200 --> 00:03:39,880 Speaker 1: Is he getting paid? 65 00:03:40,840 --> 00:03:43,200 Speaker 3: Well, it is a good quarter. I mean, I think 66 00:03:43,520 --> 00:03:47,120 Speaker 3: there's one of the things that investors are really keying 67 00:03:47,200 --> 00:03:50,320 Speaker 3: on is the investment banking revenue. And perhaps that's just 68 00:03:50,360 --> 00:03:54,680 Speaker 3: because it relates to all of our businesses, because the 69 00:03:55,080 --> 00:03:59,040 Speaker 3: revenue itself, just investment banking is a huge lever for 70 00:03:59,160 --> 00:04:02,880 Speaker 3: JP Morgan, but does help trading, which is a bigger lever. 71 00:04:03,520 --> 00:04:07,200 Speaker 3: And we saw better than expected results two point five 72 00:04:07,200 --> 00:04:09,560 Speaker 3: billion on the investment banking revenue side, and that helped 73 00:04:09,600 --> 00:04:14,880 Speaker 3: fix trading better than expected, equities trading better than expected. Really, 74 00:04:14,920 --> 00:04:18,000 Speaker 3: we're seeing the lift from those strong equity markets as 75 00:04:18,040 --> 00:04:19,600 Speaker 3: well as credit trading on the fixed side. 76 00:04:19,800 --> 00:04:21,159 Speaker 1: So you know, I'm just kidding, right, I mean, it 77 00:04:21,160 --> 00:04:22,920 Speaker 1: does matter, but it matters more for Wells Fargo when 78 00:04:22,920 --> 00:04:25,120 Speaker 1: we're looking at op X and we're looking at fundamentals. 79 00:04:25,200 --> 00:04:26,920 Speaker 1: So talk to us a little bit about why that's 80 00:04:26,960 --> 00:04:28,719 Speaker 1: different there. I mean, this is something that's been going 81 00:04:28,720 --> 00:04:29,720 Speaker 1: on since twenty sixteen. 82 00:04:29,839 --> 00:04:33,600 Speaker 3: No, it's been forever. I mean when we think back 83 00:04:34,240 --> 00:04:37,400 Speaker 3: and they first announced these issues, and you know, for 84 00:04:37,440 --> 00:04:42,360 Speaker 3: those not familiar, there was a fake account scandal. We've 85 00:04:42,400 --> 00:04:46,400 Speaker 3: seen a complete turnover of management. We've seen a couple 86 00:04:46,480 --> 00:04:49,800 Speaker 3: of CEOs, the board's turnover, just years and years of 87 00:04:49,839 --> 00:04:52,359 Speaker 3: trying to get it right. This has never happened to 88 00:04:52,360 --> 00:04:52,760 Speaker 3: a bank. 89 00:04:52,800 --> 00:04:53,120 Speaker 4: This this. 90 00:04:54,640 --> 00:04:57,960 Speaker 3: You know, sort of the regulatory backlash, and so no 91 00:04:58,000 --> 00:04:59,640 Speaker 3: one knows when it's going to end. It just keeps 92 00:04:59,640 --> 00:05:02,640 Speaker 3: getting longer and longer, and we just keep seeing these 93 00:05:03,120 --> 00:05:05,960 Speaker 3: these costs and so we should be getting to the 94 00:05:06,000 --> 00:05:08,200 Speaker 3: tail end of those. But the fact that you know, 95 00:05:08,240 --> 00:05:10,040 Speaker 3: there's two things, so the costs are going to be 96 00:05:10,320 --> 00:05:13,400 Speaker 3: more than expected. The net interest income they've been guiding 97 00:05:13,480 --> 00:05:16,640 Speaker 3: down seven to nine percent, and now they're saying that 98 00:05:16,680 --> 00:05:19,320 Speaker 3: it's going to be on the higher end of that range. 99 00:05:19,640 --> 00:05:23,120 Speaker 3: Some of the banks that have more trading and have 100 00:05:23,320 --> 00:05:26,200 Speaker 3: talked about like there's an impact there kind of goes 101 00:05:26,240 --> 00:05:28,680 Speaker 3: out in the wash with fees. But we're going to 102 00:05:28,720 --> 00:05:30,800 Speaker 3: want to hear more detail from Wells. Why are they 103 00:05:31,520 --> 00:05:32,320 Speaker 3: a little bit more now? 104 00:05:32,440 --> 00:05:38,279 Speaker 2: You brought notes in Friday, we do Bloomberg Surveillance. 105 00:05:38,520 --> 00:05:42,120 Speaker 1: With Alison Williams. Come on prepared Alison. You know, look, 106 00:05:42,160 --> 00:05:43,800 Speaker 1: I mean for me, you know, I'm a fixed income guy, 107 00:05:43,800 --> 00:05:46,000 Speaker 1: and you know, for me, it's about credit quality. And 108 00:05:46,040 --> 00:05:48,080 Speaker 1: you know, I'm curious what are your takeaways here? I mean, 109 00:05:48,120 --> 00:05:49,800 Speaker 1: are they provisioning more? I mean, we're at that tail. 110 00:05:49,839 --> 00:05:51,719 Speaker 1: I mean one would think we're in the eleventh inning 111 00:05:51,760 --> 00:05:53,800 Speaker 1: of this of this of this cycle here in the US. 112 00:05:53,839 --> 00:05:56,360 Speaker 1: I mean, does anything stand out to you in terms 113 00:05:56,360 --> 00:05:58,840 Speaker 1: of credit quality on that end of the equation so far? 114 00:05:58,920 --> 00:06:01,440 Speaker 3: I mean, we haven't done fully into it, but it 115 00:06:01,480 --> 00:06:04,640 Speaker 3: looks like what we had expected, which is we're seeing 116 00:06:04,720 --> 00:06:07,080 Speaker 3: provisions for the credit card business and a lot of 117 00:06:07,080 --> 00:06:10,640 Speaker 3: that just relates to growth. You know, charge offs looked 118 00:06:10,680 --> 00:06:12,560 Speaker 3: like they were in those are kind of today's cause 119 00:06:12,640 --> 00:06:16,280 Speaker 3: they're as expected. But as those portfolios grow, you have 120 00:06:16,320 --> 00:06:18,680 Speaker 3: to reserve for the life of the loan, and cards 121 00:06:18,720 --> 00:06:20,960 Speaker 3: have the highest a loss rate of all the categories. 122 00:06:20,960 --> 00:06:22,680 Speaker 2: As you know, I want to go bigger, broader here. 123 00:06:22,720 --> 00:06:25,000 Speaker 2: Both of you got you know, a lot of experience 124 00:06:25,080 --> 00:06:26,880 Speaker 2: on this, and of course the carnage of the Great 125 00:06:26,920 --> 00:06:31,000 Speaker 2: Financial Crisis and that day where Jamie Diamond brought the 126 00:06:31,000 --> 00:06:33,480 Speaker 2: bear Stearns building for what ten bucks or one buck 127 00:06:33,560 --> 00:06:39,359 Speaker 2: or whatever it was, Allison Williams. JP Morgan has global aspirations. 128 00:06:40,279 --> 00:06:44,400 Speaker 2: Are the governments Allison Williams going to let JP Morgan 129 00:06:45,000 --> 00:06:48,400 Speaker 2: expand and be America's bank abroad. 130 00:06:49,120 --> 00:06:52,920 Speaker 3: I think the key thing from a regulatory standpoint really 131 00:06:52,960 --> 00:06:56,520 Speaker 3: relates to the capital standard. And you know, this is 132 00:06:56,560 --> 00:06:59,080 Speaker 3: something that all the US banks have been complaining a 133 00:06:59,120 --> 00:07:02,599 Speaker 3: little bit about because they look tougher than the implementation 134 00:07:03,000 --> 00:07:07,160 Speaker 3: of some other regions. So after the crisis, BOSEL came 135 00:07:07,200 --> 00:07:11,160 Speaker 3: out with some guidelines. All the different jurisdictions have implemented 136 00:07:11,200 --> 00:07:14,400 Speaker 3: them in their own way, and the US rules are 137 00:07:14,400 --> 00:07:17,440 Speaker 3: pretty tough. You know, we call it gold plating. In 138 00:07:17,560 --> 00:07:18,120 Speaker 3: terms of. 139 00:07:19,920 --> 00:07:23,040 Speaker 2: Five years, do you see JP Morgan dominant in Europe? 140 00:07:23,840 --> 00:07:27,119 Speaker 3: I mean they're pretty strong there now. Exactly, they're pretty 141 00:07:27,160 --> 00:07:31,360 Speaker 3: strong there now. So I think that the most interesting 142 00:07:31,360 --> 00:07:33,840 Speaker 3: thing for JP Morgan on the international front. People don't 143 00:07:33,840 --> 00:07:36,360 Speaker 3: talk a lot about, but they're looking to expand their 144 00:07:36,360 --> 00:07:39,120 Speaker 3: retail presence. They're looking to span their retail presence in 145 00:07:39,160 --> 00:07:39,840 Speaker 3: the UK. 146 00:07:40,000 --> 00:07:42,920 Speaker 2: The digital retail experiment in the United Kingdom work. 147 00:07:43,120 --> 00:07:46,120 Speaker 3: Yes, well, they haven't talked about it a lot, but 148 00:07:46,840 --> 00:07:48,680 Speaker 3: from what we hear, it's been meeting their metrics. 149 00:07:48,720 --> 00:07:50,480 Speaker 2: Ellison, thank you so much. We can't wait for you 150 00:07:50,520 --> 00:08:03,680 Speaker 2: to publish at Bloomberg Intelligence. If you're in the money business, 151 00:08:03,720 --> 00:08:08,240 Speaker 2: there is exactly one Whitney. He is Whitney Tilson. And 152 00:08:08,280 --> 00:08:11,360 Speaker 2: to put things in perspective, we'll sit over a beverage 153 00:08:11,360 --> 00:08:13,440 Speaker 2: of our choice and go, gee, someday I think I'll 154 00:08:13,440 --> 00:08:16,400 Speaker 2: climb kill him in Jarrow. Right, he's actually climb kill 155 00:08:16,440 --> 00:08:21,160 Speaker 2: him in Jarrow. The academics are bulletproof. He's a Baker scholar. 156 00:08:21,560 --> 00:08:25,080 Speaker 2: Which it's like planning for Billy Clearot at Harvard Hockey. 157 00:08:25,280 --> 00:08:29,600 Speaker 2: I mean yeah, it's like a Baker scholar. And he's 158 00:08:29,640 --> 00:08:33,480 Speaker 2: been on fire. The author of Poor Charlie's Almanac, The 159 00:08:33,480 --> 00:08:37,319 Speaker 2: witt and Wisdom of Charles T. Monger, Whitney Tilson has 160 00:08:37,360 --> 00:08:40,600 Speaker 2: been on fire about his Democratic Party. Let me make 161 00:08:40,679 --> 00:08:45,840 Speaker 2: clear he is a supporter of Democratic politics. Whitney, thank 162 00:08:45,840 --> 00:08:47,600 Speaker 2: you so much for joining. You've been a voice of 163 00:08:47,640 --> 00:08:51,720 Speaker 2: sanity for Republicans and Democrats out on Twitter. How'd the 164 00:08:51,720 --> 00:08:53,040 Speaker 2: president do last night? 165 00:08:55,120 --> 00:08:58,880 Speaker 5: Well, let me give you a football analogy. If I 166 00:08:58,960 --> 00:09:02,040 Speaker 5: told you that, hey, your favorite quarterback your favorite team 167 00:09:02,360 --> 00:09:05,040 Speaker 5: just completed a ten yard pass, you'd say great, moves 168 00:09:05,080 --> 00:09:07,520 Speaker 5: the chains one step closer to victory. But what if 169 00:09:07,559 --> 00:09:11,319 Speaker 5: I told you that you're down by fourteen with two 170 00:09:11,360 --> 00:09:13,360 Speaker 5: minutes to play at the fifty yard line, and your 171 00:09:13,440 --> 00:09:16,640 Speaker 5: quarterback has an obviously sprang dannkle if not a broken leg, 172 00:09:16,880 --> 00:09:18,880 Speaker 5: then you'd say, oh my god, that's terrible news that 173 00:09:18,920 --> 00:09:21,960 Speaker 5: we completed a ten yard pass. Because it's a hopeless situation. 174 00:09:22,080 --> 00:09:24,960 Speaker 5: Our only chance of victory is a couple hail Mary passes, 175 00:09:25,040 --> 00:09:28,680 Speaker 5: So completing a ten yard pass actually reduces our chances 176 00:09:28,679 --> 00:09:31,679 Speaker 5: of victory. So I hope that's not too complex of 177 00:09:31,720 --> 00:09:35,040 Speaker 5: an analogy. But Biden was solid last night. Couple little gaffs. 178 00:09:35,160 --> 00:09:38,400 Speaker 5: But the problem is is it did nothing to dispel 179 00:09:38,720 --> 00:09:42,360 Speaker 5: the concerns of eighty percent of American people that he's 180 00:09:42,480 --> 00:09:46,960 Speaker 5: too old for the job, and basically the belief of 181 00:09:47,120 --> 00:09:50,120 Speaker 5: now every single Democrat in Congress that he needs to 182 00:09:50,120 --> 00:09:52,280 Speaker 5: step aside to give us any chance of beating Trump. 183 00:09:52,280 --> 00:09:56,520 Speaker 2: In November, Whitney I observed first and the Kennedy Klan 184 00:09:56,880 --> 00:10:00,880 Speaker 2: at a Democratic invention in Boston garden across at a 185 00:10:00,960 --> 00:10:04,720 Speaker 2: senator from Illinois, a kid from Chicago take the trophy. 186 00:10:04,960 --> 00:10:09,760 Speaker 2: This is when Obama rose to national presidents versus an 187 00:10:09,840 --> 00:10:14,920 Speaker 2: elderly aging Ted Kennedy as well, that dialogue, that tension, 188 00:10:14,960 --> 00:10:18,720 Speaker 2: Whitney Tilson of the Democratic Convention as in Chicago soon 189 00:10:19,240 --> 00:10:24,960 Speaker 2: seems to have evaporated into an elite, almost tribal class. 190 00:10:25,280 --> 00:10:27,680 Speaker 2: Now you're on the edges of that, you're a donor, etc. 191 00:10:28,520 --> 00:10:32,199 Speaker 2: But does your party, and frankly the Republicans, do they 192 00:10:32,360 --> 00:10:35,160 Speaker 2: need to get back to an older and more fractious 193 00:10:35,600 --> 00:10:36,800 Speaker 2: convention process. 194 00:10:38,760 --> 00:10:43,040 Speaker 5: Well, look, I'm what I'm actually looking forward to when 195 00:10:43,080 --> 00:10:45,480 Speaker 5: Biden steps aside, And at this point it's a question 196 00:10:45,920 --> 00:10:49,400 Speaker 5: not of if, but when I think it's now ninety 197 00:10:49,440 --> 00:10:52,880 Speaker 5: five percent likely that he will step aside, And then 198 00:10:53,400 --> 00:10:56,400 Speaker 5: I think it would be a disastrous decision to simply 199 00:10:56,440 --> 00:11:02,400 Speaker 5: anoint Kamala Harris. I'm for supporting her if she earns 200 00:11:02,440 --> 00:11:05,320 Speaker 5: it and can demonstrate that she's got the idea's vision, 201 00:11:05,760 --> 00:11:08,959 Speaker 5: can capture the imagination of the American people and one 202 00:11:09,160 --> 00:11:12,760 Speaker 5: beat Donald Trump and two be a great president. But 203 00:11:12,880 --> 00:11:15,200 Speaker 5: they're also at least it does and if not twenty 204 00:11:15,240 --> 00:11:18,280 Speaker 5: other people whose names are being tossed around, and I 205 00:11:18,280 --> 00:11:22,360 Speaker 5: think there should be an incredibly exciting free for all. Yes, chaotic, 206 00:11:22,440 --> 00:11:25,080 Speaker 5: but it would rivet the attention of the nation, energize 207 00:11:25,080 --> 00:11:28,199 Speaker 5: the Democratic Party, and then in the next five weeks 208 00:11:28,240 --> 00:11:30,880 Speaker 5: going into the convention, hopefully we've narrowed that down and 209 00:11:30,960 --> 00:11:33,559 Speaker 5: what we're looking for. To your point, there is someone 210 00:11:33,559 --> 00:11:36,400 Speaker 5: who catches lightning in a bottle the way Obama did 211 00:11:37,160 --> 00:11:40,920 Speaker 5: and can becomes the clear front runner, can ride that 212 00:11:41,520 --> 00:11:44,080 Speaker 5: to not just I don't want to just beat Donald Trump. 213 00:11:44,160 --> 00:11:45,680 Speaker 5: I want to beat him like a rented mule and 214 00:11:45,679 --> 00:11:47,880 Speaker 5: throw him on the dustbin of history where he belongs. 215 00:11:48,400 --> 00:11:51,160 Speaker 5: So that's what I'm looking for. Now. Maybe we don't 216 00:11:51,160 --> 00:11:53,800 Speaker 5: get that, but right now I think Biden's got a 217 00:11:53,840 --> 00:11:57,520 Speaker 5: fifteen percent chance of beating Trump. If you just told me, hey, 218 00:11:57,520 --> 00:12:00,120 Speaker 5: we can find somebody who gives makes it a jump ball, 219 00:12:00,160 --> 00:12:04,080 Speaker 5: it's fifty to fifty. That's a massive improvement from sticking 220 00:12:04,080 --> 00:12:07,240 Speaker 5: with the You know, I want to switch horses if 221 00:12:07,280 --> 00:12:09,320 Speaker 5: I can shift the odds that much. But maybe we 222 00:12:09,360 --> 00:12:11,080 Speaker 5: can get it up to eighty or ninety percent and 223 00:12:11,200 --> 00:12:12,120 Speaker 5: really beat Trump. 224 00:12:12,360 --> 00:12:14,680 Speaker 1: Well, Waitney Tilts, then what you're suggesting here is that 225 00:12:14,720 --> 00:12:17,920 Speaker 1: the Democratic Party will not go to its backup quarterback. 226 00:12:17,960 --> 00:12:19,640 Speaker 1: I mean, that's interesting. So then what do they do? 227 00:12:19,640 --> 00:12:21,160 Speaker 1: Do they go to the free agency. I mean, do 228 00:12:21,240 --> 00:12:23,680 Speaker 1: they go to tilt, I mean Pritzker, I mean Newsome. 229 00:12:24,440 --> 00:12:26,440 Speaker 1: Who do you suggest here? Who's the favorite? 230 00:12:27,720 --> 00:12:27,880 Speaker 2: You know? 231 00:12:28,000 --> 00:12:31,840 Speaker 5: Honestly, I don't know, and I probably know half of 232 00:12:31,880 --> 00:12:33,880 Speaker 5: the twenty candidates who might throw their hats in the 233 00:12:33,960 --> 00:12:38,720 Speaker 5: ring personally, but all twenty are incredible. The Democrats have 234 00:12:38,760 --> 00:12:41,560 Speaker 5: an incredible bench. So to use a football analogy, again, 235 00:12:42,080 --> 00:12:44,199 Speaker 5: we've got a chance to hit the reset button and 236 00:12:44,240 --> 00:12:46,679 Speaker 5: instead of being down by fourteen with two minutes to play, 237 00:12:46,760 --> 00:12:48,920 Speaker 5: we can start the game all over again. So right there, 238 00:12:48,960 --> 00:12:52,520 Speaker 5: that's great news. Secondly, our quarterback with a broken leg 239 00:12:52,679 --> 00:12:54,559 Speaker 5: is out, so we got to find a new quarterback. 240 00:12:54,640 --> 00:12:58,160 Speaker 5: Now we've got a long time backup, but a lot 241 00:12:58,200 --> 00:13:01,680 Speaker 5: of questions about what there that that backup is the 242 00:13:01,720 --> 00:13:04,320 Speaker 5: best quarterback. So what We've got five weeks to have 243 00:13:04,360 --> 00:13:06,920 Speaker 5: a training camp and we put the word out anyone 244 00:13:06,960 --> 00:13:09,640 Speaker 5: who thinks they can be quarterback of our team come 245 00:13:09,679 --> 00:13:12,319 Speaker 5: to our training camp and we're gonna show us what 246 00:13:12,360 --> 00:13:15,840 Speaker 5: you got. And if Kamala Harris can you know, emerge 247 00:13:15,920 --> 00:13:19,400 Speaker 5: us from that process as that one most likely to 248 00:13:19,400 --> 00:13:21,600 Speaker 5: beat Trump and most likely to beat the Great, the 249 00:13:21,600 --> 00:13:25,400 Speaker 5: Great President, then I'm all in, But she or whoever 250 00:13:25,440 --> 00:13:27,080 Speaker 5: earns that job, they have to earn it. 251 00:13:27,360 --> 00:13:29,160 Speaker 2: Wait, I got to be quick here. It's a huge news. 252 00:13:29,280 --> 00:13:31,280 Speaker 2: I got to get to Michael Barr. You and Michael 253 00:13:31,360 --> 00:13:36,480 Speaker 2: Porter were definitive in studying how to jumpstart inner cities. 254 00:13:36,760 --> 00:13:41,240 Speaker 2: The Democrats are losing black and Hispanic youth to Republicans. 255 00:13:41,600 --> 00:13:44,839 Speaker 2: How does President Bidener, whoever runs, how do they get 256 00:13:44,880 --> 00:13:48,000 Speaker 2: back at the margin black and Hispanic youth. 257 00:13:49,920 --> 00:13:52,439 Speaker 5: Yeah, now it's a good question. At the end of 258 00:13:52,520 --> 00:13:56,560 Speaker 5: the day, I think young and especially young minority voters 259 00:13:57,080 --> 00:14:02,040 Speaker 5: are inclined to vote on the Democratic ticket, but they 260 00:14:02,080 --> 00:14:05,040 Speaker 5: share the same concerns that eighty percent of Americans share 261 00:14:05,160 --> 00:14:09,320 Speaker 5: that you know, a year ago, the majority of voters said, 262 00:14:09,320 --> 00:14:12,199 Speaker 5: we don't like either of these guys. Both. The message 263 00:14:12,240 --> 00:14:15,280 Speaker 5: to both parties was give us somebody fresh and new 264 00:14:15,320 --> 00:14:17,280 Speaker 5: and exciting. We don't like either of these guys. And 265 00:14:17,320 --> 00:14:21,040 Speaker 5: now only one party has the opportunity to deliver on 266 00:14:21,160 --> 00:14:23,320 Speaker 5: to give the American people what they've asked for. So 267 00:14:23,400 --> 00:14:27,040 Speaker 5: I think if we do that, a wide swath of voters, 268 00:14:27,120 --> 00:14:30,120 Speaker 5: not just young and minority voters, are going to vote 269 00:14:30,120 --> 00:14:32,040 Speaker 5: Democrat and carry us to victory. In November. 270 00:14:32,120 --> 00:14:35,040 Speaker 2: Wennie Tilson, thank you so much for joining us today. 271 00:14:35,160 --> 00:14:39,000 Speaker 2: Clearly a democratic donor and supporter of course, legendary with 272 00:14:39,040 --> 00:14:42,000 Speaker 2: a hedge fund work and also is academics out of 273 00:14:42,040 --> 00:14:50,160 Speaker 2: Harvard University. Right now on the equity markets in America. 274 00:14:50,320 --> 00:14:54,000 Speaker 2: Thrilled to bring Cam Dawson new edge wells. She'll be 275 00:14:54,040 --> 00:14:58,360 Speaker 2: spending both Saturday and Sunday at Brooklyn Crab having the 276 00:14:58,400 --> 00:15:03,240 Speaker 2: Crab cakes in Brooklyn. Kim Dawson yesterday was odd. Let's 277 00:15:03,240 --> 00:15:08,080 Speaker 2: not go over the details. Small caps win mag seven hammered. 278 00:15:08,200 --> 00:15:12,360 Speaker 2: Was it nothing more than a constructive adjustment on the 279 00:15:12,400 --> 00:15:13,040 Speaker 2: way higher? 280 00:15:14,080 --> 00:15:17,720 Speaker 6: Well, we do know that positioning got incredibly skewed, where 281 00:15:18,040 --> 00:15:21,920 Speaker 6: hedge funds were very positioned into large caps in tech 282 00:15:22,040 --> 00:15:25,560 Speaker 6: and growth and very underweight and short in small caps. 283 00:15:25,840 --> 00:15:28,640 Speaker 6: So part of this is just a positioning snap and 284 00:15:28,680 --> 00:15:31,640 Speaker 6: then a chase of that short covering. The question is 285 00:15:31,760 --> 00:15:34,960 Speaker 6: can it continue, and that really depends on the path 286 00:15:35,000 --> 00:15:38,080 Speaker 6: of yields. It's good to remember that small caps rally 287 00:15:38,160 --> 00:15:41,920 Speaker 6: twenty percent in November and December last year because the 288 00:15:41,960 --> 00:15:45,640 Speaker 6: tenure yield felled one hundred basis points. If yields can 289 00:15:45,680 --> 00:15:48,960 Speaker 6: continue to fall, small caps likely can continue to rally, 290 00:15:49,240 --> 00:15:51,600 Speaker 6: but maybe it only lasts a month or two because 291 00:15:51,600 --> 00:15:56,360 Speaker 6: there's still profitability issues, balance sheet issues, so a lot remainspeaki. 292 00:15:55,960 --> 00:15:57,920 Speaker 2: Yah, that's great, but the reality is a month or 293 00:15:57,960 --> 00:15:59,720 Speaker 2: two is long term for Damien. 294 00:16:00,920 --> 00:16:02,400 Speaker 1: Well, Cam, you know, talk to me a little bit 295 00:16:02,400 --> 00:16:04,160 Speaker 1: about you know what we just kind of take away 296 00:16:04,160 --> 00:16:06,160 Speaker 1: from this latest CPI print. I mean, are we really 297 00:16:06,200 --> 00:16:07,960 Speaker 1: thinking the Fed's going to move here in September? And 298 00:16:08,000 --> 00:16:10,000 Speaker 1: if it does, what's the dollar going to do off 299 00:16:10,040 --> 00:16:10,440 Speaker 1: the back of that. 300 00:16:11,400 --> 00:16:13,840 Speaker 6: Well, now we got this PPI print this morning that 301 00:16:13,960 --> 00:16:16,360 Speaker 6: came in hotter than expected, So now there's a big 302 00:16:16,480 --> 00:16:19,840 Speaker 6: question mark about where PCEE comes in, which is the 303 00:16:19,880 --> 00:16:23,760 Speaker 6: Fed's preferred inflation metric. So we think that the odds 304 00:16:23,840 --> 00:16:27,360 Speaker 6: of a September hike certainly went up after yesterday's data. 305 00:16:27,480 --> 00:16:29,960 Speaker 6: But if we have a couple more data points that 306 00:16:30,040 --> 00:16:32,880 Speaker 6: look like that PPI, maybe we do get pushed out 307 00:16:32,920 --> 00:16:36,520 Speaker 6: to November. So this is still a very data dependent FED, 308 00:16:36,720 --> 00:16:40,120 Speaker 6: and we could see this kind of saw pattern within 309 00:16:40,640 --> 00:16:43,560 Speaker 6: inflation data, which could keep us kind of in an 310 00:16:43,640 --> 00:16:44,440 Speaker 6: uncertain place. 311 00:16:44,520 --> 00:16:46,640 Speaker 1: Well, Kam, what I'm really asking is September December, it 312 00:16:46,640 --> 00:16:50,040 Speaker 1: doesn't matter. When the FED does eventually cut, what do 313 00:16:50,120 --> 00:16:52,400 Speaker 1: you think the dollar will do? Will it finally start 314 00:16:52,440 --> 00:16:55,320 Speaker 1: to depreciate relative to G ten and EM. 315 00:16:55,680 --> 00:16:58,320 Speaker 6: It certainly seems so, and we saw that in some 316 00:16:58,400 --> 00:17:01,120 Speaker 6: of the price action yesterday of US. The dollar dropped 317 00:17:01,160 --> 00:17:04,280 Speaker 6: a lot, and we saw a perking up of EM stocks. 318 00:17:04,720 --> 00:17:07,040 Speaker 6: And it's still very much in a down trend if 319 00:17:07,040 --> 00:17:09,320 Speaker 6: we look at EM versus S and P five hundred, 320 00:17:09,680 --> 00:17:12,480 Speaker 6: but there is some movement and action there. So if 321 00:17:12,520 --> 00:17:15,320 Speaker 6: there is follow through and the FEED is cutting more 322 00:17:15,440 --> 00:17:18,440 Speaker 6: and being more dubvish than other central banks, then yeah, 323 00:17:18,440 --> 00:17:20,919 Speaker 6: it could set up for a week er dollar. The 324 00:17:21,040 --> 00:17:23,600 Speaker 6: question is, though, if other central banks are having to 325 00:17:23,760 --> 00:17:26,720 Speaker 6: cut further, then the dollar may still be the best 326 00:17:26,880 --> 00:17:27,639 Speaker 6: game in town. 327 00:17:28,080 --> 00:17:28,280 Speaker 4: Kim. 328 00:17:28,720 --> 00:17:32,040 Speaker 2: Yesterday we had some diminished organic revenue growth, right, I 329 00:17:32,080 --> 00:17:35,880 Speaker 2: mean Dawson's house, it's just loaded with freedom Lake. Oh 330 00:17:36,119 --> 00:17:43,520 Speaker 2: Dorito's She's like the queen we had cam Yesterday's some 331 00:17:43,640 --> 00:17:48,840 Speaker 2: organic revenue growth shortfalls outside of the mag seven. Does 332 00:17:48,880 --> 00:17:53,560 Speaker 2: a pro like you extrapolate that revenue shortfall over to 333 00:17:53,600 --> 00:17:57,440 Speaker 2: those seven wonder stocks or is it discrete and separate. 334 00:17:58,440 --> 00:18:01,480 Speaker 6: I think this is so important and maybe the most 335 00:18:01,520 --> 00:18:05,359 Speaker 6: important trend or theme going into twenty twenty five is 336 00:18:05,359 --> 00:18:09,520 Speaker 6: that we're seeing pricing power fade. And it's really interesting 337 00:18:09,560 --> 00:18:13,200 Speaker 6: because as long as CPI remains weak, this is effectively 338 00:18:13,280 --> 00:18:17,200 Speaker 6: the market or the economy saying that companies cannot pass 339 00:18:17,240 --> 00:18:21,119 Speaker 6: through price increases to their end consumer. Look at the 340 00:18:21,240 --> 00:18:24,480 Speaker 6: chart of shipping costs and durable goods prices in twenty 341 00:18:24,520 --> 00:18:27,040 Speaker 6: twenty and twenty twenty one. They went right up together, 342 00:18:27,200 --> 00:18:30,119 Speaker 6: meaning that as shipping costs went up, durable goods prices 343 00:18:30,160 --> 00:18:33,160 Speaker 6: went up because it got passed through to the end customer. Now, 344 00:18:33,280 --> 00:18:37,199 Speaker 6: shipping costs are soaring, but durable goods prices aren't moving higher. 345 00:18:37,359 --> 00:18:39,560 Speaker 6: This means that companies are having to absorb them in 346 00:18:39,600 --> 00:18:42,399 Speaker 6: their margins, which means that there is very much risk 347 00:18:42,480 --> 00:18:44,680 Speaker 6: to the margin forecast in twenty twenty five. 348 00:18:44,720 --> 00:18:47,560 Speaker 1: APS estimates Why I'm so happy you brought up affordability, 349 00:18:47,560 --> 00:18:49,440 Speaker 1: and we know that home affordability here in the US 350 00:18:49,480 --> 00:18:51,040 Speaker 1: is really really poor right now. But I mean, if 351 00:18:51,040 --> 00:18:53,000 Speaker 1: you just look at some of the other other autos 352 00:18:53,040 --> 00:18:54,960 Speaker 1: for example, I mean or Travel for that matter, I 353 00:18:54,960 --> 00:18:57,600 Speaker 1: mean CAM talk to us about you know, just generally speaking, 354 00:18:57,680 --> 00:18:59,879 Speaker 1: FT back out all of those fixed costs, all of 355 00:18:59,880 --> 00:19:02,680 Speaker 1: the discretionary you know, what's left for the consumer today? 356 00:19:02,720 --> 00:19:04,159 Speaker 1: Have any spending power left? 357 00:19:04,800 --> 00:19:08,560 Speaker 6: We're certainly seeing or hearing anecdotes of them getting pinched. 358 00:19:08,560 --> 00:19:11,199 Speaker 6: Look at Delta's earnings from earlier this week saying that 359 00:19:11,359 --> 00:19:14,920 Speaker 6: they're seeing fading pricing power. I was at JFK yesterday. 360 00:19:15,040 --> 00:19:18,760 Speaker 6: Certainly seemed no evidence of a waning in demand, but 361 00:19:18,920 --> 00:19:22,679 Speaker 6: certainly there is signs that consumers are getting pinched. We 362 00:19:22,800 --> 00:19:26,119 Speaker 6: continue to hear this wonderful word choicefulness out of the 363 00:19:26,240 --> 00:19:26,560 Speaker 6: likes of. 364 00:19:26,560 --> 00:19:27,720 Speaker 2: People like j Walmart. 365 00:19:29,320 --> 00:19:30,080 Speaker 1: Come on, stop? 366 00:19:30,480 --> 00:19:33,520 Speaker 2: Was choicefulness in Graham, Dot and Koddle when you read 367 00:19:33,560 --> 00:19:34,280 Speaker 2: it in gam. 368 00:19:35,640 --> 00:19:39,280 Speaker 6: Certainly not. But again this is a reflection of consumers 369 00:19:39,359 --> 00:19:41,760 Speaker 6: hitting a wall as far as how much more price 370 00:19:41,840 --> 00:19:44,760 Speaker 6: increases that they can take, which means that companies are 371 00:19:44,800 --> 00:19:45,840 Speaker 6: taking it on the chin. 372 00:19:45,920 --> 00:19:48,800 Speaker 2: In margin Cam, it's Friday. I got to quote Doug 373 00:19:48,840 --> 00:19:51,199 Speaker 2: cass in a moment. Help me here, what's your new 374 00:19:51,240 --> 00:19:54,840 Speaker 2: adjustment off yard Denny's fifty eight hundred on SPX? Can 375 00:19:54,880 --> 00:19:56,840 Speaker 2: I get us six thousand aut of you this morning? 376 00:19:58,119 --> 00:19:59,960 Speaker 6: The one thing I'd note is that if we trade 377 00:20:00,119 --> 00:20:02,280 Speaker 6: to fifty eight hundred by the end of the year 378 00:20:02,480 --> 00:20:05,320 Speaker 6: and assuming that the market is right for their two 379 00:20:05,359 --> 00:20:08,280 Speaker 6: hundred and seventy seven dollars a share for twenty twenty 380 00:20:08,280 --> 00:20:11,520 Speaker 6: five earning sestiments, you would be training at a higher 381 00:20:11,520 --> 00:20:14,840 Speaker 6: pe multiple on the year head forward than you were 382 00:20:14,960 --> 00:20:16,600 Speaker 6: at the peak in twenty twenty one. 383 00:20:17,160 --> 00:20:17,359 Speaker 2: Thank you. 384 00:20:17,480 --> 00:20:19,480 Speaker 6: Never to say never, but that's pretty high. 385 00:20:19,600 --> 00:20:22,000 Speaker 2: Gotta go, Kim Dawson, Thank you so much for will 386 00:20:22,040 --> 00:20:36,320 Speaker 2: talking fifty eight hundred is well. This is a joy 387 00:20:36,400 --> 00:20:39,639 Speaker 2: and always an honor. Joining us. Iconic at Golden Sachs 388 00:20:39,680 --> 00:20:42,720 Speaker 2: for years is Robert Hormantz. He has a book I'm 389 00:20:42,720 --> 00:20:45,720 Speaker 2: going to mention here in a moment, but his work 390 00:20:45,840 --> 00:20:51,320 Speaker 2: has been profound on America's relationships, particularly across the broader 391 00:20:51,520 --> 00:20:54,399 Speaker 2: Middle East into China, where he'll be traveling too soon. 392 00:20:54,840 --> 00:20:58,679 Speaker 2: Ambassador Horrmantes joins us and do everything I can, Bob 393 00:20:58,800 --> 00:21:00,919 Speaker 2: not to say what do you have think think about Biden? 394 00:21:01,160 --> 00:21:03,800 Speaker 2: We don't have time to waste on that. I got 395 00:21:03,800 --> 00:21:06,440 Speaker 2: to go back to your book. It is the best 396 00:21:06,640 --> 00:21:11,760 Speaker 2: book on the domestic and fiscal responsibility of this nation. 397 00:21:12,560 --> 00:21:16,080 Speaker 2: Is we project a foreign policy? The only one that 398 00:21:16,119 --> 00:21:21,360 Speaker 2: can tire shoelaces is Richard Haas, who reformulated the consul 399 00:21:21,359 --> 00:21:25,280 Speaker 2: and foreign relations. With this debt and deficit, how do 400 00:21:25,359 --> 00:21:27,760 Speaker 2: we prosecute a foreign policy? 401 00:21:28,520 --> 00:21:30,600 Speaker 4: It's going to be more and more difficult. I think 402 00:21:30,680 --> 00:21:33,240 Speaker 4: you've put your finger on something. It's the elephant in 403 00:21:33,240 --> 00:21:35,199 Speaker 4: the room that no one wants to talk about, and 404 00:21:35,200 --> 00:21:41,000 Speaker 4: that is the inexorable increase in debt and deficits is 405 00:21:41,119 --> 00:21:44,560 Speaker 4: going to mean that, first of all, future generations are 406 00:21:44,560 --> 00:21:47,399 Speaker 4: going to inherit a huge debt and a huge interest burden. 407 00:21:47,840 --> 00:21:52,479 Speaker 4: But also the competition for money within the US government 408 00:21:52,560 --> 00:21:54,760 Speaker 4: is going to intensify. And if you need more money 409 00:21:54,760 --> 00:21:58,880 Speaker 4: for defense and national security, you're competing with a variety 410 00:21:58,960 --> 00:22:01,480 Speaker 4: of other parts so the government who want money for 411 00:22:01,640 --> 00:22:06,200 Speaker 4: their elements of their policy, like social issues, and we're 412 00:22:06,200 --> 00:22:09,000 Speaker 4: going to have a social problem if we cut those programs, 413 00:22:09,320 --> 00:22:11,920 Speaker 4: and we're going to have more and more security risks 414 00:22:11,960 --> 00:22:14,879 Speaker 4: if we don't fund security. And our allies see this 415 00:22:15,160 --> 00:22:18,520 Speaker 4: and they see us as less reliable as an ally 416 00:22:18,560 --> 00:22:20,000 Speaker 4: and less reliable fiscally. 417 00:22:20,200 --> 00:22:23,280 Speaker 2: Right, Bob, This is important when you and Secretary Clinton 418 00:22:23,280 --> 00:22:26,560 Speaker 2: and whatever you are, folks, Republican or Democrat. Clinton and 419 00:22:26,600 --> 00:22:30,679 Speaker 2: Hormet said, it's about economics, It's about our relationships across 420 00:22:30,720 --> 00:22:36,400 Speaker 2: the world. You're going to need someone encyclopedic on Asian derivatives, 421 00:22:36,600 --> 00:22:39,880 Speaker 2: swap rates and how they fold into the governments of Asia. Yes, 422 00:22:39,960 --> 00:22:44,240 Speaker 2: so the new under secretary for you is Under Secretary Damien. 423 00:22:44,000 --> 00:22:46,480 Speaker 1: Sasower, Bob, But I really want to know you were 424 00:22:46,600 --> 00:22:49,720 Speaker 1: just in China and we know that centement China is weak. 425 00:22:50,040 --> 00:22:53,120 Speaker 1: You know, just how weak is it? Unemployment, youth, unemployment, 426 00:22:53,200 --> 00:22:55,600 Speaker 1: the property sector. You know was what was your take? 427 00:22:55,640 --> 00:22:57,760 Speaker 1: Boots on the ground, well, booths on the ground. 428 00:22:58,040 --> 00:23:03,080 Speaker 4: The average Chinese, I think, is suffering from a series 429 00:23:03,119 --> 00:23:07,000 Speaker 4: of uncertainties that need to be cleared up. And they're having, 430 00:23:07,080 --> 00:23:09,520 Speaker 4: as you know, this so called third planet. They have 431 00:23:09,560 --> 00:23:12,760 Speaker 4: it every five years, and that sets policy for the 432 00:23:12,800 --> 00:23:15,480 Speaker 4: next five years. The whole Central Committee of the Communist 433 00:23:15,520 --> 00:23:17,959 Speaker 4: Party needs huge and brain gives a big speech, and 434 00:23:18,000 --> 00:23:20,560 Speaker 4: that essentially is a policy for the next five years. 435 00:23:20,880 --> 00:23:23,399 Speaker 4: They have to improve consumer confidence, They have to deal 436 00:23:23,920 --> 00:23:27,399 Speaker 4: with a very difficult real estate problem. They have with 437 00:23:27,480 --> 00:23:31,360 Speaker 4: huge amounts of debt, state and local debt. Foreign investment, 438 00:23:31,600 --> 00:23:35,760 Speaker 4: which they need in order to create jobs, is leaving 439 00:23:35,840 --> 00:23:39,560 Speaker 4: the country at a fairly rapid rate. The private sector 440 00:23:39,680 --> 00:23:42,440 Speaker 4: is feeling a lot of uncertainty. Which is the most 441 00:23:42,440 --> 00:23:45,080 Speaker 4: productive part of the economy is feeling a lot of 442 00:23:45,160 --> 00:23:48,439 Speaker 4: uncertainty because they're not quite sure what role the government 443 00:23:48,480 --> 00:23:51,280 Speaker 4: wants to play. Does it play a more involved role 444 00:23:51,960 --> 00:23:56,639 Speaker 4: in the economy, or does it give more latitude to 445 00:23:56,840 --> 00:24:00,960 Speaker 4: the private sector and private companies America companies and foreign 446 00:24:01,040 --> 00:24:03,680 Speaker 4: companies want to know what the rules of the game are, 447 00:24:04,680 --> 00:24:07,080 Speaker 4: not just today tomorrow, but over the next several years, 448 00:24:07,600 --> 00:24:09,960 Speaker 4: because some of them are, as i say, are leaving. 449 00:24:10,320 --> 00:24:12,760 Speaker 4: Some would be interested in coming, but they want to 450 00:24:12,760 --> 00:24:15,440 Speaker 4: make sure that the rules are such that they can 451 00:24:16,640 --> 00:24:19,399 Speaker 4: survive and that they're not interfered with in particularly in 452 00:24:19,440 --> 00:24:23,280 Speaker 4: the technology area, where China really wants to excel. But 453 00:24:23,400 --> 00:24:26,280 Speaker 4: you need not just Chinese companies, which are quite good 454 00:24:26,560 --> 00:24:29,679 Speaker 4: doing research, but you need to collaborate to a degree 455 00:24:29,680 --> 00:24:32,879 Speaker 4: with foreign companies and we and they are both pulling 456 00:24:32,880 --> 00:24:34,919 Speaker 4: apart on technology not coming together. 457 00:24:35,040 --> 00:24:35,159 Speaker 2: Well. 458 00:24:35,160 --> 00:24:37,240 Speaker 1: I agree with you on the level of uncertainty in 459 00:24:37,320 --> 00:24:40,840 Speaker 1: China about foreign policy, about domestic policy. But here's my 460 00:24:40,920 --> 00:24:42,840 Speaker 1: question for you. If there's one certainty in China, and 461 00:24:42,840 --> 00:24:45,720 Speaker 1: you begin this conversation by talking about debt levels and 462 00:24:45,760 --> 00:24:48,960 Speaker 1: how high they've gotten there, I mean, they're through the 463 00:24:49,000 --> 00:24:51,879 Speaker 1: roof in China. So you know, isn't president She's trying 464 00:24:51,880 --> 00:24:55,120 Speaker 1: to do the right thing. And why aren't markets rewarding 465 00:24:55,160 --> 00:24:57,040 Speaker 1: him for his efforts to try and bring down debt 466 00:24:57,119 --> 00:24:57,800 Speaker 1: levels in China. 467 00:24:58,040 --> 00:25:00,640 Speaker 4: That is one of the interesting things that doesn't get 468 00:25:00,720 --> 00:25:04,520 Speaker 4: very much publicity. He is not a big spender. I 469 00:25:04,600 --> 00:25:06,879 Speaker 4: knew him when he was head of Jijan Province Party 470 00:25:06,880 --> 00:25:10,880 Speaker 4: secretary and he took a very conservative view of spending 471 00:25:11,680 --> 00:25:13,720 Speaker 4: and what they're doing. And they used to for a 472 00:25:13,760 --> 00:25:16,679 Speaker 4: while to get growth going, spend money like crazy for 473 00:25:17,000 --> 00:25:21,160 Speaker 4: every kind of rose bridges. I said, they're not doing 474 00:25:21,160 --> 00:25:24,600 Speaker 4: that now. What they're doing now is keeping a relatively 475 00:25:24,640 --> 00:25:29,040 Speaker 4: conservative budget but spending it on a number of things 476 00:25:29,640 --> 00:25:33,800 Speaker 4: which increase what he calls the dynamic productive forces of 477 00:25:33,840 --> 00:25:37,639 Speaker 4: the economy, which is technology. So they're spending money, but 478 00:25:37,640 --> 00:25:41,240 Speaker 4: they're much more focused. It's much more on technology, both 479 00:25:41,280 --> 00:25:45,560 Speaker 4: for economic reasons and because advanced technologies like quantum and 480 00:25:46,400 --> 00:25:49,600 Speaker 4: AI are good for the military too, and they want 481 00:25:49,640 --> 00:25:50,560 Speaker 4: to build their military. 482 00:25:50,560 --> 00:25:52,760 Speaker 2: Tape we have a three hour conversation now. I just 483 00:25:52,800 --> 00:25:54,720 Speaker 2: like to talk about the new Modi and the future 484 00:25:54,760 --> 00:25:57,520 Speaker 2: of India, but we can't do that. You're going to 485 00:25:57,560 --> 00:25:59,399 Speaker 2: put me in the Harmatt's time out chair. But I 486 00:25:59,400 --> 00:26:01,360 Speaker 2: got to go here. It's a public service and that's 487 00:26:01,359 --> 00:26:04,359 Speaker 2: what we do at Bloomberg Surveillance. You've done it for 488 00:26:04,560 --> 00:26:08,120 Speaker 2: multiple party people. You're maybe associated a Democrat, but you've 489 00:26:08,119 --> 00:26:11,480 Speaker 2: done a lot of Republican service as well. You've been 490 00:26:11,520 --> 00:26:15,280 Speaker 2: around the block. I know you're seventy nine in holding, 491 00:26:16,080 --> 00:26:19,200 Speaker 2: but you're not. You're the same year as the president. 492 00:26:20,080 --> 00:26:24,960 Speaker 2: Your thoughts on your colleague Joe Biden and politics when 493 00:26:25,080 --> 00:26:28,960 Speaker 2: you at eighty one see Joe Biden, How do you 494 00:26:29,080 --> 00:26:32,840 Speaker 2: interpret that different from Damien sass Hour and Tom Keen 495 00:26:32,920 --> 00:26:34,480 Speaker 2: and all of our listeners and viewers. 496 00:26:34,840 --> 00:26:38,080 Speaker 4: Well, I'm pretty well staying away from the domestic politics, 497 00:26:38,720 --> 00:26:40,520 Speaker 4: and this tell us about. 498 00:26:40,320 --> 00:26:44,040 Speaker 2: The medical side that you're in great shape. 499 00:26:44,800 --> 00:26:47,760 Speaker 4: I mean, I would I'd make a broader point which 500 00:26:47,840 --> 00:26:51,800 Speaker 4: gets just what you're saying, that age really is not 501 00:26:53,000 --> 00:26:58,640 Speaker 4: the central issue. The issue for people, and I'm in 502 00:26:58,680 --> 00:27:03,040 Speaker 4: my eighties is how much energy you have and how 503 00:27:03,080 --> 00:27:07,119 Speaker 4: you project yourself and how well your mind works and 504 00:27:07,160 --> 00:27:10,280 Speaker 4: your body works. So I would say that all this 505 00:27:10,320 --> 00:27:13,800 Speaker 4: emphasis on how many, how old he is is not 506 00:27:13,920 --> 00:27:17,200 Speaker 4: really the issue, and people have to judge for themselves 507 00:27:18,200 --> 00:27:20,719 Speaker 4: the other elements of age. But I don't really want 508 00:27:20,760 --> 00:27:25,119 Speaker 4: to get into a domestic political base on if I 509 00:27:25,160 --> 00:27:27,320 Speaker 4: were a doctor, I would give you my prognosis, but 510 00:27:27,400 --> 00:27:27,720 Speaker 4: I'm not. 511 00:27:27,840 --> 00:27:32,240 Speaker 2: So is Secretary Blincoln running our foreign policy unit? 512 00:27:32,320 --> 00:27:36,679 Speaker 4: Almost singularly, I would say that Biden actually does know 513 00:27:36,800 --> 00:27:39,120 Speaker 4: farm policy quite well, and I thought gave a very 514 00:27:39,119 --> 00:27:43,040 Speaker 4: good press conference yesterday at the NATO. There were some mistakes, 515 00:27:43,080 --> 00:27:46,640 Speaker 4: but generally he had a pretty good command of the issues. 516 00:27:47,280 --> 00:27:50,160 Speaker 4: On the second part of the point, I think he's 517 00:27:50,359 --> 00:27:52,960 Speaker 4: very fortunate that he has Tony blinkoln who's the terrific 518 00:27:53,000 --> 00:27:56,160 Speaker 4: Secretary of State, and Jake Sullivan. Jake and I shared 519 00:27:56,240 --> 00:27:59,120 Speaker 4: offices when we worked for Hillary Clinton. He was her 520 00:27:59,160 --> 00:28:02,159 Speaker 4: farm policy advisor. I was for economic policy advisors, so 521 00:28:02,200 --> 00:28:06,199 Speaker 4: we worked very closely together. And he's extremely good and 522 00:28:06,240 --> 00:28:08,119 Speaker 4: he's got a really good team. I met with a 523 00:28:08,200 --> 00:28:11,880 Speaker 4: joint chap joint chiefs of staff about three or four 524 00:28:11,880 --> 00:28:16,400 Speaker 4: months ago to discuss the interaction between geo strategic issues 525 00:28:16,440 --> 00:28:22,560 Speaker 4: and geoeconomic issues, and they're very aware of the fact 526 00:28:22,600 --> 00:28:26,919 Speaker 4: that economics plays a key role in our geostrategic strategy, 527 00:28:27,000 --> 00:28:32,760 Speaker 4: and you need strong economic alliances to undergird political and 528 00:28:32,920 --> 00:28:36,600 Speaker 4: strategic alliances, and he gets I'm sure he's getting that 529 00:28:36,680 --> 00:28:38,480 Speaker 4: kind of advice from investor Harmetz. 530 00:28:38,480 --> 00:28:41,120 Speaker 2: Thank you so much for joining us today. Robert Hormantz's 531 00:28:41,120 --> 00:28:46,360 Speaker 2: Public service to the Nation. Vice Chairman Kissinger Associates. 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