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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along

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Speaker 1: with Jonathan Ferrell and Lisa Brownwitz. Daily we bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com,

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Speaker 1: and of course on the Bloomberg Terminal. The worlds attention

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Speaker 1: on the President of the United States and a two

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Speaker 1: point to five. You can really take your point there, John,

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Speaker 1: about the world will be attention here because this is

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Speaker 1: a sea change in terms of stimulus, and then as

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Speaker 1: we see on infrastructure. What I like about this John,

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Speaker 1: and particularly our next guest, is he is definitive as

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Speaker 1: the experienced deputy. I don't know anyone John of this

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Speaker 1: vintage who as deputy or special assistant has such an

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Speaker 1: interesting cross section of experience ends in the executive process

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Speaker 1: in Washington. That man is Brian da City joins us

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Speaker 1: right now, the White House Director of the National Economic Council,

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Speaker 1: Brian Good to catch up again. Let's just start right here.

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Speaker 1: Big plan, a lot of detail we need to work through.

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Speaker 1: I want to start with a simple one. Help me

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Speaker 1: understand how you'll measure success beyond just big terms like

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Speaker 1: closing the gap, closing the keg. How will you measure

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Speaker 1: success specifically in the years to come. Well, look, it's

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Speaker 1: good to be with you, guys. We have a major

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Speaker 1: infrastructure problem in the United States were globally when it

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Speaker 1: comes to our physical infrastructure, our roads are in bad

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Speaker 1: need of a pair. The typical person pays a thousand

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Speaker 1: dollars in extra cost in wasted time and fuel. And

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Speaker 1: if you think about modern infrastructure like broadband, one in

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Speaker 1: three households in rural areas of the country can't even

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Speaker 1: access high speed internet. This is all holding our economy back.

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Speaker 1: So as we think about coming out of this crisis

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Speaker 1: and rebuilding and building back better, as the President said,

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Speaker 1: we need to train our focus on a big, bold,

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Speaker 1: but also practical in smen in America, and that's what

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Speaker 1: the President is going to talk about today. The American

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Speaker 1: Jobs Plan is a historic capital investment in America, and

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Speaker 1: our metric of success will be can we make a

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Speaker 1: generational investment improve these things that matter to people's lives, uh,

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Speaker 1: the the way they commute, the way they interact with

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Speaker 1: their loved ones, the way they work and do so

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Speaker 1: in a way that actually creates millions of jobs in

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Speaker 1: the process. So that's the goal. That's the that's where

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Speaker 1: the President will be talking about today, and that's where

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Speaker 1: we'll be kicking off the legislative process. This, of course

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Speaker 1: is public sector investment. We need to talk about private

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Speaker 1: sector investment as well. And many people will be asking

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Speaker 1: Brian how writing the corporate tax right as we come

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Speaker 1: out of a crisis actually helps develop private investment in America. Well, look,

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Speaker 1: you talk about private investment, and I do want to

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Speaker 1: just make an important point. These public investments are among

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Speaker 1: the highest return investments in terms of spurring private investments.

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Speaker 1: So we know public investments in airports return several dollars

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Speaker 1: in private investments. Public investments in basic R and D

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Speaker 1: provide the backbone for innovation off what private investment flows.

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Speaker 1: So we know these are the kinds of high value

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Speaker 1: investments that can spur the kind of private investment we need.

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Speaker 1: We also think it's a reasonable thing to look at

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Speaker 1: how to cover the cost of that capital investment over

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Speaker 1: the long term. That's where the President's proposal comes in,

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Speaker 1: corporate tax reform. Let's end the race to the bottom internationally.

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Speaker 1: Let's have a competitive tax system that encourages domestic investment

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Speaker 1: and do so in a way that over fifteen years,

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Speaker 1: would raise sufficient revenue to cover this plan. Ryandece, you

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Speaker 1: will be in Pittsburgh, that is in the vicinity of

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Speaker 1: Connor Lambs sevente Congressional district. You need Connor Lamb's vote

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Speaker 1: to get this done. How are you going to amend

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Speaker 1: adjust establish the Texas to pay for this so that

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Speaker 1: Mr Lamb can be reelected. Look in districts like that

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Speaker 1: and all around the country, people see and feel why

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Speaker 1: we need this investment. Bridges are crumbling, schools are crumbling.

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Speaker 1: There are four thousand schools, including in that district, where

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Speaker 1: kids are drinking water from lead. Okay, but how are

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Speaker 1: you going to do the Texes? Brian, tell me how

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Speaker 1: Connor lama is going to vote for this given the

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Speaker 1: tax hesitancy from sea to shining Sea. Here's what I

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Speaker 1: would say. You look at the seventeen tax cut that

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Speaker 1: passed without a single Democratic vote. It was bad tax policy.

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Speaker 1: It's encouraged more profits and production to actually move overseas,

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Speaker 1: and it's deeply unpopular. What we're saying is we can

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Speaker 1: do better than that. We can create a competitive tax code.

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Speaker 1: We can raise revenue, and we can invest in things

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Speaker 1: that really matter to the American people. And so that's

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Speaker 1: the that's the basics of this. The corporate tax reforms

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Speaker 1: that we're talking about here would still leave the corporate

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Speaker 1: rate lower than any year since World War Two, other

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Speaker 1: than the last couple of years in the wake of

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Speaker 1: the Trump tax cut. So we're talking about a year

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Speaker 1: is reasonable and practical, and the investments would really change

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Speaker 1: the game for families in places like western Pennsylvania r

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Speaker 1: And there's a radical economic sea change under what you're

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Speaker 1: talking about. This idea that in the past there a

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Speaker 1: popular belief that the private sector was way more efficient

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Speaker 1: than the public sector. It was the way to generate growth.

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Speaker 1: This proposal questions that, basically saying it needs to come

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Speaker 1: from the government. Yes, it's infrastructure, but it's a lot

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Speaker 1: of other programs as well. What evidence are you pointing

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Speaker 1: to that public investing can be perhaps as efficient or

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Speaker 1: more efficient in generating growth and pushing this economy ahead.

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Speaker 1: Look at the end of the day, the private investment

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Speaker 1: and what is what drives the economy forward. But at core,

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Speaker 1: if we look back to great periods where America has

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Speaker 1: done great things, whether it's the building of the interstate

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Speaker 1: highway system or the space race in the nineteen sixties.

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Speaker 1: Well designed public investment can spur innovation at could spur productivity,

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Speaker 1: and it could spur job growth all around in America.

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Speaker 1: We know that's true in things like basic research. We

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Speaker 1: know it's true in things like physical infrastructure. And the

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Speaker 1: issue is that for forty years we have undermined those

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Speaker 1: basic drivers of economic growth. So this isn't about the

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Speaker 1: public versa private sector. This is about public sector investments

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Speaker 1: that we know will actually generate job growth, we know

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Speaker 1: will help spur innovation across the economy, and we have

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Speaker 1: done before as a country. This is not new. It's

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Speaker 1: just that we haven't done it in quite some time,

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Speaker 1: and we need to do it at historic scale, something

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Speaker 1: we haven't discussed. I found this morning bron is staying

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Speaker 1: local tax deductions. Can we sit on that just for

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Speaker 1: a moment. There are three House Democrats basically saying we

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Speaker 1: say no sell, no deal. What's your message for them

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Speaker 1: this morning? Look, the President is gonna put out his

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Speaker 1: plan today. He's going to talk about why we need

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Speaker 1: these investments, and he can talk about some of his

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Speaker 1: ideas on how to pay for it. He is eager

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Speaker 1: and we are eager now to hear from everyone about

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Speaker 1: their ideas. There's a lot of people who are going

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Speaker 1: to have ideas about how to structure those investments, people

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Speaker 1: who are gonna have ideas about how to pay for this.

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Speaker 1: Some people may argue that we don't need to pay

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Speaker 1: for portions of this. That's the conversation that we need

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Speaker 1: to move forward here. What the President is going to

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Speaker 1: be clear is that he wants input from Republicans and

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Speaker 1: Democrats alife. We want to find practical ways to move

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Speaker 1: this forward, but these are investments that we cannot afford

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Speaker 1: not to make. That's the message you're here from the

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Speaker 1: president and you want to stand from the Republican side.

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Speaker 1: They don't feel like you want their input whatsoever. They

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Speaker 1: were invited to the White House for the last one

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Speaker 1: point nine trily in dollar bill. They didn't feel like

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Speaker 1: they would listen to. Are you just saying that or

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Speaker 1: do you actually hear something from the Republican side you'd

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Speaker 1: like to include and if so, what is it. This

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Speaker 1: issue of infrastructure having creates a unique opportunity for us

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Speaker 1: to do work together and find common ground solutions. This

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Speaker 1: is an issue that four years you all know you've

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Speaker 1: been covering it. Democrats and Republicans, the business community, the

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Speaker 1: labor community have all been saying, can't we come together

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Speaker 1: and do something big on America's infrastructure. This has been

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Speaker 1: happening for years. We've been saying this, but we haven't

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Speaker 1: actually done it. We believe this is a unique opportunity.

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Speaker 1: This is a moment and we are absolutely committed to

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Speaker 1: the idea that we want to bring people together here

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Speaker 1: their ideas and find a way forward. Brian, I want

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Speaker 1: you to speak to the nation now, and frankly, Brian,

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Speaker 1: I'm worried about those loudsy bridges on Roots seven up

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Speaker 1: by Middlebury in Vermont, But Brian, I want you to

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Speaker 1: speak about this. How far behind we are in internet

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Speaker 1: and fast internet for our children learning across America. Is

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Speaker 1: this bill today gonna solve that problem? Look, this crisis

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Speaker 1: has exposed just how vulnerable we are as a country

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Speaker 1: to the fact that we don't have the basic infrastructure

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Speaker 1: backbone of the twenty century. We don't have high speed,

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Speaker 1: reliable internet for everyone. You know, there are kids around

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Speaker 1: the country who are sitting in McDonald's parking lots can

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Speaker 1: get all mine to try to What are we going

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Speaker 1: to do about in this bill today? It's gonna fix

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Speaker 1: the McDonald's parking lot to take my kid to Starbucks

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Speaker 1: reality we see in the island of Manhattan. Absolutely, this

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Speaker 1: bill is going to commit a hundred billion dollars to

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Speaker 1: get the goal of a pent access to affordable broadband

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Speaker 1: in this decade. It'll do it by building out the

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Speaker 1: physical the physical elements we need, particularly in rural and

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Speaker 1: remote areas. And it will do it by providing carrots

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Speaker 1: and sticks to carriers to make sure that there are

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Speaker 1: affordable plans available in every part of the country. We

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Speaker 1: can do this in this decade. We need a one

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Speaker 1: time investment of public capital, which will spur enormous amounts

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Speaker 1: of private capital and is also the right thing to

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Speaker 1: do so that our kids, and our families and our

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Speaker 1: businesses can actually get into the twenty one century economy. Brian,

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Speaker 1: this two point to five trillion dollar plan is thought

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Speaker 1: of as a wish list as much as it is

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Speaker 1: an outline for Biden's plans. How negotiable is this at

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Speaker 1: this point? Where can we see it going in terms

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Speaker 1: of the main non negotiable points. Well, I think if

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Speaker 1: you go through this plan. Every element of it reflects

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Speaker 1: serious and thoughtful work that has been done over the

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Speaker 1: course of years to identify where our gaps in our

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Speaker 1: infrastructure exist and how we could actually invest to solve them,

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Speaker 1: like the issue of broadband we were just talking about.

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Speaker 1: So what we're gonna do is we're gonna sit down

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Speaker 1: and ask people where do they see opportunity here and

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Speaker 1: where can we move move the ball forward. But what

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Speaker 1: the President is going to be uncompromising about is to say,

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Speaker 1: this is a moment where we need to make a

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Speaker 1: big capital investment in the country. Everybody recognizes that that's

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Speaker 1: the case. The question is can we actually get it done.

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Speaker 1: That's what the President is going to be saying, Brian,

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Speaker 1: let's finish on this two point to five trillion. And

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Speaker 1: in the White House statement the great challenges of our time,

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Speaker 1: the climate crisis and the ambitions of an autocratic China.

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Speaker 1: I found the last line there just absolutely fascinating. The

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Speaker 1: ambitions of an autocratic China. Can you span out specifically

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Speaker 1: to us how the challenge is posed by the Chinese

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Speaker 1: Communist Party have shaped this bill in front of us,

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Speaker 1: this plan. Well, one of the things the President is

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Speaker 1: going to talk about today is that this moment is bigger.

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Speaker 1: You've mentioned earlier that the world is watching that this

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Speaker 1: is a moment where the question is can democracy succeed

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Speaker 1: in delivering for for their people? And that's a question

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Speaker 1: that a lot of people are asking all around the world.

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Speaker 1: So part of what we're trying to do, your part

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Speaker 1: with the President is trying to do here is to

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Speaker 1: make clear what the stakes are. We are falling behind

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Speaker 1: in R and D, We're falling behind an investment in

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Speaker 1: supply chains and critical industries. But this is a moment

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Speaker 1: where we can show that American actually invest domestically in

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Speaker 1: our own domestic strength in a way that will provide

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Speaker 1: benefits to the world. We've already seen it with the

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Speaker 1: Rescue Plan. We passed the Rescue Plan. We've seen increases

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Speaker 1: in our own growth rate, but also spillovers in terms

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Speaker 1: of demand for the world. That is the essential role

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Speaker 1: that the American economy can play and American democracy can

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Speaker 1: play in the world. We just have to show that

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Speaker 1: we're up to the task. Great to catch up with you.

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Speaker 1: Let's talk again soon, specifically on China. We'd love to

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Speaker 1: continue that conversation. BRYANTSA the white House, National Economic Council

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Speaker 1: Director opening day used to be April ten. I don't

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Speaker 1: know when it was Cincinnati, but I tell you, Lisa,

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Speaker 1: it will be great to see all of sports get

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Speaker 1: back in some way or form, as we see with

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Speaker 1: the n C Double A right now. Yeah, My plans

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Speaker 1: have definitely have been charted out to try to get

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Speaker 1: everyone back, and not just for vaccinations. Where I know

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Speaker 1: that city Field, for example in New York City has

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Speaker 1: been in Yankee Citium for that matter, have been outfitted

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Speaker 1: as inoculation stations. There is a question of how baseball,

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Speaker 1: of how some of the other sports will look different

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Speaker 1: in a post pandemic era, Tom or a almost post

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Speaker 1: pandemic era, almost pandemic era. That is something we will

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Speaker 1: address down. Lisa, Bramwots and Tom Kenyan. We welcome all

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Speaker 1: of you, particularly Bloomberg eleven three oh in New York

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Speaker 1: and I must say up on Boston are Bloomberg affiliate

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Speaker 1: up in Boston as well joining us now. Derek Jeter

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Speaker 1: of the Miami Marlins are chief executive officer. He launching

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Speaker 1: himself into the stands a few years ago, the one

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Speaker 1: Yankee that red Sox fans due respect and also with us.

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Speaker 1: Anthony Shea with Loane Depot, the executive of the Marlins,

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Speaker 1: and the gentleman from Loan Depot, celebrate their announcement that

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Speaker 1: Loan Deepot will sponsor the stadium and will be very

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Speaker 1: visible for the Miami Marlins in this season. Anthony say,

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Speaker 1: from Sea to Shining Sea, you do loans for America,

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Speaker 1: you do financing for America. What is your advantage to

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Speaker 1: brand with Derek Jeter and the Miami Marlins. Well, good morning, Uh,

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Speaker 1: it is such an exciting day as I'm sitting here

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Speaker 1: at the new Loan People Park. I think our partnership

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Speaker 1: between two organizations, particularly with Derek, is just a natural fit.

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Speaker 1: We're just so enthusiastic about partnering up with Derek and

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Speaker 1: the Marlins organization and that we just couldn't do more

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Speaker 1: through Derek. It is the Miami Marlins, which you've worked

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Speaker 1: four in five years on to improve and to really

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Speaker 1: recast the franchise like you knew in New York. Where

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Speaker 1: are you on the path right now? Well, look, you know,

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Speaker 1: we we've made a lot of progress I think in

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Speaker 1: the three and a half years that we've been here,

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Speaker 1: but we still have a long way to go. You'll

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Speaker 1: you'll always hear me say we have a long way

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Speaker 1: to go, regardless of what happens during the course of

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Speaker 1: the season, but we're taking some positive strides forward, you know,

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Speaker 1: both on the baseball operations side and the business operation side,

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Speaker 1: and day like today is is extremely important to our

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Speaker 1: our organization and we could be happier with the partnership

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Speaker 1: that we have with Anthony and little people. You start

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Speaker 1: with the Citrus Series with Tampa, but then you've got

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Speaker 1: to get on the road and all the rest of

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Speaker 1: the grind of Major League Baseball. Derek Jeter, you were

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Speaker 1: affected by COVID last year and frankly into this year.

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Speaker 1: What precautions? What did you learn from that process that

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Speaker 1: you can bring forward? Is this nation heels? Yeah, I'll

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Speaker 1: tell you what you know, I said it at the time. Affected.

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Speaker 1: I don't even know if that's the right word to use.

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Speaker 1: I mean, we had, you know, eight team players as

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Speaker 1: positive in the in the span of a week. And

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Speaker 1: you know what I think we learned through it to

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Speaker 1: the course of that ordeal was but you can't take

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Speaker 1: anything for granted. I think there was a false sense

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Speaker 1: of security with our players because we were in somewhat

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Speaker 1: of a bubble, and it just takes one one case

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Speaker 1: that can can end up spreading throughout an entire team.

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Speaker 1: And and uh, you know, the health and safety of

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Speaker 1: you know, our players are coaches, our staff are fans

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Speaker 1: is extremely important to us. And uh, you know, you

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Speaker 1: learn from past mistakes and you move on. So we're

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Speaker 1: happy that. Uh, you know, I think baseball is an

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Speaker 1: industry up until this point has has uh stayed pretty

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Speaker 1: clear of COVID up into this point. What do you

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Speaker 1: think it's harder, Derek being part of a team that

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Speaker 1: won five World Series or running a baseball franchise as

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Speaker 1: the owner. That's a good question. I don't even know

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Speaker 1: how to answer that. They're both pretty difficult. I think

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Speaker 1: you know, you mentioned it. When you're on a team,

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Speaker 1: you're on a field and you have one goal and

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Speaker 1: that's to win a championship each and every year, and

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Speaker 1: nothing changes. It's the same thing here. I think the

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Speaker 1: difference probably is, you know, you're when you when you're playing,

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Speaker 1: it's that particular game, that particular day, and on the

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Speaker 1: business side, you're looking three, four, five years down the road.

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Speaker 1: So I think there's a lot of similarities. But at

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Speaker 1: the same time, you gotta have a little bit more patients, alright,

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Speaker 1: So more patients three or four or five years down

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Speaker 1: the low down the road. At a time when baseball

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Speaker 1: franchises across the nation have been really affected by the

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Speaker 1: COVID pandemic just because of the revenues that have not

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Speaker 1: come in, how will that affect the five year plan

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Speaker 1: as you see it right now? I don't think it

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Speaker 1: necessarily changes as much. I mean, you know, you look

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Speaker 1: at partnerships like the one we have right now with

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Speaker 1: with Anthony and Loan Depot. You know, you still have

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Speaker 1: to look at the the overall plan, and we're not

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Speaker 1: gonna change. You know, we said when we got here

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Speaker 1: what we're gonna do, wanted to build sustainable success and

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Speaker 1: that's on the field, it's off the field, and it's

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Speaker 1: partnerships like this that help us out. And you know,

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Speaker 1: on the field, I think we've done a pretty good

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Speaker 1: job of building an organization that you know, we can

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Speaker 1: be proud of. And it really made some strikes there

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Speaker 1: with the minor league sistem system, which is the foundation

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Speaker 1: of our success. So in that sense, you know, look,

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Speaker 1: everyone was affected, every industry was affected, and uh, you know,

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Speaker 1: moving forward, you just kinda have to bounce back from it.

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Speaker 1: Derek Jeter with us on Bloomberg Radio. We're thrilled to

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Speaker 1: let you know that the Miami Marlins Chief executive Officer,

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Speaker 1: Derek Jeter is with us with anthonyche they celebrate Loan

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Speaker 1: Depot's naming rights to the Miami Marlins franchise. Uh. To Anthony,

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Speaker 1: I want to link this first to you, Anthony, and

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Speaker 1: then to Mr Jeter, and that is the idea of

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Speaker 1: the spirit of Miami is personified by Mr Jeter. Anthony.

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Speaker 1: I don't know if you know this, but Jeter launched

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Speaker 1: himself into the stands and a follow ball seven and

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Speaker 1: a half games ahead of the Red Sox a million

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Speaker 1: years ago. What's the spirit Anthony that Loan Depot season

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Speaker 1: all of Florida in this building boom. Well, we as

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Speaker 1: America's lender. Uh, you certainly have become part of supporting

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Speaker 1: America's housing. Florida is a critically important state for not

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Speaker 1: only America, but certainly for Loan Depot. Is one of

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Speaker 1: our top customer base. In addition to the fact that, uh,

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Speaker 1: you know, Florida is a great great yachting capital of

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Speaker 1: the world which we personally and I personally enjoy and

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Speaker 1: having the opportunity to pair up with winners here is

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Speaker 1: just agree opportunity for us, Derek, to the kids today

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Speaker 1: play like you. I mean, I know it's like in

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Speaker 1: the ESPN question and I'm supposed to say that and

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Speaker 1: all that, but come on, Derek, you know I see

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Speaker 1: the nation and trying to get baseball front and center

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Speaker 1: to the kids today. Would they go into the stands

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Speaker 1: on a late night twelfth inning? Well, first of all,

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Speaker 1: I want to say, I don't appreciate you saying that

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Speaker 1: was a million years ago. It wasn't that long ago

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Speaker 1: like that, but uh, you know, look, it's it's the

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Speaker 1: game changes. It changes from every generation. I remember when

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Speaker 1: you know, I was younger, and and you know, one

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Speaker 1: great thing is you have access to a lot of

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Speaker 1: the ex players and they come in and tell you

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Speaker 1: how much the game change. So the game has changed,

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Speaker 1: but the game is exciting with a lot of exciting

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Speaker 1: young players that are in our organization and other organizations.

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Speaker 1: So I I I kinda find it kind of hard

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Speaker 1: to try to compare generations, but you know, there's a

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Speaker 1: lot of exciting players to watch out there. So the

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Speaker 1: players are exciting. Derek, there is a question of whether

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Speaker 1: we can shorten the games and whether or not perhaps

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Speaker 1: some of the breaks for commercials, for other things, some

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Speaker 1: of the waiting and that people are perhaps don't have

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Speaker 1: the attention span for should be eliminated. Do you support

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Speaker 1: that shortening the games? Taking measures? And what measures do

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Speaker 1: you think we should take? Well, I don't know if

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Speaker 1: you'd necessarily say shorten the games. I just say increasing

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Speaker 1: the action within the game. Look, I mean the games

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Speaker 1: are what three hours? Three and a half hours, So yeah,

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Speaker 1: there there are ways that you can shorten the games

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Speaker 1: to some extent. But I think it's just increasing the

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Speaker 1: action and get an opportunity to see how athletic baseball

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Speaker 1: players are. And so I think there are some some

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Speaker 1: minor rules changes tweaks that you'd be able to accomplish that. Derek,

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Speaker 1: I blame Nomar Garcia part. He played with the team

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Speaker 1: up to the northeast from where you were playing. He

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Speaker 1: gets out of the box. Every kid in America is

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Speaker 1: doing this with their hands, stretching out the beat. Do

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Speaker 1: we need a clock in baseball? I don't know if

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Speaker 1: you necessarily need a clock, you know what I mean?

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Speaker 1: They're I think they're you know, they're they're discussing some

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Speaker 1: pitch box and and but you know, one of the

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Speaker 1: great things about baseball is you know the game ever

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Speaker 1: know how long it's gonna be out there. It's a

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Speaker 1: family sport. You bring your entire family out and uh

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Speaker 1: be able to enjoy three hours with your family. But Derek,

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Speaker 1: you know the problem here, and I understand the naming rights.

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Speaker 1: You were struggling and you need to get a refight

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Speaker 1: through loan Depot and Anthony sheay, but then you rented

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Speaker 1: your house to Tom Brady. How is Tom Brady as

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Speaker 1: a tenant? I mean, should you have gone to loan

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Speaker 1: Depot or did it work out with Mr Brady as tenant?

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Speaker 1: You know what, it worked out actually, and I think

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Speaker 1: I deserve I deserve a Super Bowl ring for for

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Speaker 1: him renting my house. So there's a lot of championships

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Speaker 1: in that house. Yeah, Anthony, but Anthony, this is so important.

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Speaker 1: I mean, you know we've talked to Derek, and Derek

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Speaker 1: gets the FaceTime. Anthony. What you guys are efforting every

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Speaker 1: day at loan Depot and with your other efforts, you

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Speaker 1: sold the trade in that over the years. I why

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Speaker 1: you would explain now the advantage of the financing of

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Speaker 1: loan Depot that has brought you to these naming rights

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Speaker 1: with Mr Jeter. Well, that isn't that a softball pitch? Right? Um?

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Speaker 1: You know, we we are contemporary financial services company that

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Speaker 1: is built a lot of digital tools that help many

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Speaker 1: of our customers that are buying a home or refinancing

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Speaker 1: right there to do it very very fast and very easy.

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Speaker 1: Dot com will take care of you. Last word, do you, Anthony,

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Speaker 1: do you see a boom economy out there day to

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Speaker 1: day in the grind of loan depot? Do you witness

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Speaker 1: the boom economy? This show is predicting Yes, Uh, you know,

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Speaker 1: currently we are breaking records at our at our company,

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Speaker 1: interest rates are very very attractive. Although they're you know,

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Speaker 1: higher than they were three or four months ago, they're

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Speaker 1: still his historically very low. The housing boom is we're

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Speaker 1: in the middle of a now there's a very low inventory.

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Speaker 1: I think as we go through COVID, many of us

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Speaker 1: are realizing home is uh, home is everything. It's becoming

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Speaker 1: where we where we learned, when we go to school,

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Speaker 1: when we work out, So home I was lying, it's

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Speaker 1: not the last question Derek very quickly, do you, Derek Jeter,

431
00:21:58,000 --> 00:22:02,040
Speaker 1: how do we fix Red Sox pitching? Hey, we have

432
00:22:02,080 --> 00:22:04,680
Speaker 1: our own things that we're dealing with down here. I'll

433
00:22:04,720 --> 00:22:06,840
Speaker 1: let you guys deal with that one. Guys are right,

434
00:22:06,880 --> 00:22:09,400
Speaker 1: Derek Eater, Thank you so much for being whether Mr Shay,

435
00:22:09,480 --> 00:22:19,280
Speaker 1: Congratulations on your naming rights with the Miami Marls. Many

436
00:22:19,320 --> 00:22:23,680
Speaker 1: important conversations today, but none more important. Here is Francine

437
00:22:23,720 --> 00:22:27,520
Speaker 1: Liquoix in London with Christine Leguard of the e c B.

438
00:22:28,520 --> 00:22:31,360
Speaker 1: I'm like, since the e CBS last policy meeting, many

439
00:22:31,440 --> 00:22:35,440
Speaker 1: hero area countries have extended or even tightened lockdowns. Vaccinations

440
00:22:35,480 --> 00:22:38,320
Speaker 1: are only making small progress. Is there a point when

441
00:22:38,359 --> 00:22:41,280
Speaker 1: ever longer restrictions will actually harm in your area's ability

442
00:22:41,320 --> 00:22:44,960
Speaker 1: to recover because businesses will just give up. I would

443
00:22:44,960 --> 00:22:49,520
Speaker 1: observe that we have an economic situation overall, which in

444
00:22:49,560 --> 00:22:53,960
Speaker 1: this part of the world Europe is really marked by uncertainty,

445
00:22:54,560 --> 00:22:58,800
Speaker 1: and in that general macro economic situation that is marked

446
00:22:58,800 --> 00:23:02,439
Speaker 1: by uncertainty. What monetary policy has to do, and what

447
00:23:02,520 --> 00:23:05,240
Speaker 1: the e c B has to do is to provide

448
00:23:05,320 --> 00:23:08,960
Speaker 1: as much certainty as possible. And this is really the

449
00:23:09,080 --> 00:23:12,320
Speaker 1: aim of the most recent monetary policy decisions we have

450
00:23:12,440 --> 00:23:18,920
Speaker 1: taken clearly in in the in the scope of our mandate,

451
00:23:19,040 --> 00:23:21,679
Speaker 1: which is price stability. But I think that in the

452
00:23:22,000 --> 00:23:27,600
Speaker 1: very exceptional circumstances that we are encountering, providing a degree

453
00:23:27,600 --> 00:23:30,439
Speaker 1: of certainty is the best that we can do at

454
00:23:30,440 --> 00:23:33,600
Speaker 1: the moment, given the lockdowns and what's going on with

455
00:23:33,720 --> 00:23:36,080
Speaker 1: vaccines in Europe. And then got has the balance of

456
00:23:36,200 --> 00:23:39,679
Speaker 1: risk actually shifted since the last policy meeting? Well, our

457
00:23:39,720 --> 00:23:44,840
Speaker 1: balance of risk is still tilted to the downside in

458
00:23:44,880 --> 00:23:48,840
Speaker 1: the short term because we are seeing a degree of uncertainty.

459
00:23:48,920 --> 00:23:53,080
Speaker 1: We are seeing renewed lockdowns, We are seeing a vaccination

460
00:23:53,160 --> 00:23:56,359
Speaker 1: rollerut that is short of what we had expected, but

461
00:23:56,480 --> 00:23:59,679
Speaker 1: it is much more balanced in the medium in the

462
00:23:59,720 --> 00:24:04,080
Speaker 1: media term, and we expect the vaccination rollout to proceed.

463
00:24:04,160 --> 00:24:08,240
Speaker 1: We expect sufficient herd immunity to be reached at the

464
00:24:08,280 --> 00:24:12,479
Speaker 1: point in time in the future, and that leads us

465
00:24:13,040 --> 00:24:18,000
Speaker 1: to have rebalanced a bit our assessment of risks in

466
00:24:18,040 --> 00:24:20,800
Speaker 1: the medium term. So still downward in the short term

467
00:24:21,000 --> 00:24:24,160
Speaker 1: and more balanced in the medium term. Mario Drugging never

468
00:24:24,200 --> 00:24:26,439
Speaker 1: got to high crates. Can you imagine being in the

469
00:24:26,440 --> 00:24:30,760
Speaker 1: same position. We shall see. Future will tell as the

470
00:24:30,800 --> 00:24:34,280
Speaker 1: song would go, I would certainly hope that the economy

471
00:24:34,440 --> 00:24:36,760
Speaker 1: is going to pick up, that there will be a

472
00:24:36,840 --> 00:24:40,399
Speaker 1: turnaround in in the in the months to come, and

473
00:24:40,440 --> 00:24:43,560
Speaker 1: that we will be able to resume our sort of

474
00:24:44,680 --> 00:24:48,480
Speaker 1: less exceptional monetary policy going forward. But I'm not I'm

475
00:24:48,520 --> 00:24:51,600
Speaker 1: not seeing any kind of raise in the in the

476
00:24:51,600 --> 00:24:54,479
Speaker 1: near future for sure. But then again, what are markets

477
00:24:54,480 --> 00:24:56,280
Speaker 1: exactly playing out at the moment. They seem to be

478
00:24:56,280 --> 00:24:59,560
Speaker 1: continuing testing central banks, like how steep of a yield

479
00:24:59,600 --> 00:25:03,200
Speaker 1: curve is. Okay, they can test us as much as

480
00:25:03,200 --> 00:25:07,000
Speaker 1: they want. We have a mandate, we have an aim.

481
00:25:07,080 --> 00:25:09,560
Speaker 1: We're going to be rivetted to that, and we're going

482
00:25:09,640 --> 00:25:13,280
Speaker 1: to do what is required in order to deliver on that.

483
00:25:13,960 --> 00:25:17,240
Speaker 1: And we have exceptional circumstances to deal with at the moment,

484
00:25:17,840 --> 00:25:20,359
Speaker 1: and we have exceptional tools to use at the moment,

485
00:25:20,480 --> 00:25:23,400
Speaker 1: and a battery of those, and we will use them

486
00:25:23,480 --> 00:25:25,960
Speaker 1: as as and when needed in order to, as I said,

487
00:25:26,359 --> 00:25:30,879
Speaker 1: deliver on our mandate and deliver on our pledge to

488
00:25:30,960 --> 00:25:34,320
Speaker 1: the economy. Christine mcguard of the European Central Bank there

489
00:25:34,320 --> 00:25:36,480
Speaker 1: and the short in the medium term as well. For

490
00:25:36,880 --> 00:25:41,000
Speaker 1: very busy, busy morning here in America, and also in

491
00:25:41,119 --> 00:25:44,000
Speaker 1: London and across Europe. Francy laquad joins us right now,

492
00:25:44,320 --> 00:25:46,679
Speaker 1: start stage and screen and thrills. She could be with

493
00:25:46,760 --> 00:25:50,520
Speaker 1: us this morning. Francy. First of all, what is seventy

494
00:25:50,600 --> 00:25:54,120
Speaker 1: three degrees in March like in London. That's fair enough,

495
00:25:54,760 --> 00:25:57,120
Speaker 1: it's nice. This is when all the bridge actually come

496
00:25:57,119 --> 00:25:59,880
Speaker 1: out in general. But imagine after three months of luck.

497
00:26:00,160 --> 00:26:02,760
Speaker 1: I mean there was everyone in the parks. The rules

498
00:26:02,800 --> 00:26:06,080
Speaker 1: have changed, so people together, you can have six people together.

499
00:26:06,119 --> 00:26:08,200
Speaker 1: But I have to say it was a high. Yesterday

500
00:26:08,359 --> 00:26:13,480
Speaker 1: was the warmest March day I think in lost twenty years.

501
00:26:13,480 --> 00:26:18,200
Speaker 1: And everyone was out. And you take Eurostar underneath the channel,

502
00:26:18,280 --> 00:26:20,320
Speaker 1: you come out, folks and if you haven't done it,

503
00:26:20,440 --> 00:26:24,280
Speaker 1: the fields of France, the rural beauty as you go

504
00:26:24,320 --> 00:26:28,840
Speaker 1: into Paris and whatever, the northern trades. You know what,

505
00:26:28,920 --> 00:26:31,720
Speaker 1: I don't know what I'm like, Hey, it's French France

506
00:26:31,840 --> 00:26:35,080
Speaker 1: in Francine. I was actually reading Lamond an hour ago

507
00:26:35,160 --> 00:26:38,800
Speaker 1: in my fractured French. They're going to be in lockdown

508
00:26:39,080 --> 00:26:41,720
Speaker 1: while you're swimming in the Thames. Well, so we're not

509
00:26:41,760 --> 00:26:43,960
Speaker 1: allowed to go to France at the moment, right, Remember

510
00:26:44,440 --> 00:26:47,080
Speaker 1: there's lockdown there's lockdown. So what we heard just a

511
00:26:47,080 --> 00:26:49,400
Speaker 1: short while ago is that to the in France, both

512
00:26:49,400 --> 00:26:52,080
Speaker 1: of them actually could be set to extend restrictions. And

513
00:26:52,119 --> 00:26:54,520
Speaker 1: I think the French president is due to address the

514
00:26:54,600 --> 00:26:57,560
Speaker 1: nation at eight pm local time. But if you're in London,

515
00:26:57,960 --> 00:27:00,560
Speaker 1: we're coming out of lockdown. But again, the schools were

516
00:27:00,600 --> 00:27:03,159
Speaker 1: closed for three months, tom and you're absolutely not allowed

517
00:27:03,480 --> 00:27:07,000
Speaker 1: to leave, you know, for foreign leans unless absolutely necessary.

518
00:27:07,080 --> 00:27:10,439
Speaker 1: So you know, unless I had a very pressing reason

519
00:27:10,480 --> 00:27:12,800
Speaker 1: to go to Paris, I could not take that eurostart

520
00:27:12,800 --> 00:27:16,280
Speaker 1: to end up in Gaudino. So, Francine. Here in the US,

521
00:27:16,320 --> 00:27:19,280
Speaker 1: as you're probably well aware, we feel like we're emerging

522
00:27:19,359 --> 00:27:22,320
Speaker 1: from the end of this and people are getting out

523
00:27:22,320 --> 00:27:24,840
Speaker 1: and maybe it's just the weather, but the vaccines are

524
00:27:24,840 --> 00:27:27,639
Speaker 1: going so well here, and I think a lot of

525
00:27:27,680 --> 00:27:30,760
Speaker 1: folks here in the US were just shocked at the

526
00:27:30,800 --> 00:27:35,760
Speaker 1: inability of Europe in particular to manage its vaccine program.

527
00:27:35,800 --> 00:27:38,960
Speaker 1: What's the feeling on the ground, Well, you're right, Paul,

528
00:27:38,960 --> 00:27:41,119
Speaker 1: it's actually a disgrace. But this for you know, I

529
00:27:41,119 --> 00:27:43,800
Speaker 1: guess structural reasons. So if you look at what the

530
00:27:43,840 --> 00:27:46,360
Speaker 1: US did, I think you guys have double the vaccine

531
00:27:46,359 --> 00:27:48,920
Speaker 1: doses needed for the whole population, so you could vaccinate

532
00:27:48,960 --> 00:27:53,639
Speaker 1: everyone twice. Over the UK, we're doing. Okay. What Europe

533
00:27:53,640 --> 00:27:56,159
Speaker 1: decided to do is because you have the European Union

534
00:27:56,359 --> 00:27:59,560
Speaker 1: to you know, basically decided to to choose it as

535
00:27:59,560 --> 00:28:01,840
Speaker 1: a block. So they negotiate it as a block, and

536
00:28:02,160 --> 00:28:04,280
Speaker 1: they were late to the game. They were about three

537
00:28:04,280 --> 00:28:06,640
Speaker 1: months late. A lot of people don't want the vaccine,

538
00:28:06,680 --> 00:28:11,320
Speaker 1: so they're very, very behind, and they're worried about variants,

539
00:28:11,320 --> 00:28:13,560
Speaker 1: which is why we're in a third lockdown in Europe.

540
00:28:13,600 --> 00:28:15,800
Speaker 1: And it seems like that there's this stop and start

541
00:28:16,480 --> 00:28:19,160
Speaker 1: vaccine just because it's but you know, it's difficult. It's

542
00:28:19,160 --> 00:28:22,840
Speaker 1: many countries together and they didn't directly negotiate, but took

543
00:28:22,880 --> 00:28:25,840
Speaker 1: time and they probably negotiated badly. Franc La Clause, thank

544
00:28:25,880 --> 00:28:28,560
Speaker 1: you so much. On conversation with Christine Legard. Look for

545
00:28:28,600 --> 00:28:38,440
Speaker 1: that digitally across all of the Bloomberg platform. This is

546
00:28:38,440 --> 00:28:42,000
Speaker 1: an interview, a conversation. We're going to talk about one story,

547
00:28:42,080 --> 00:28:45,959
Speaker 1: but we've got to get to the general international boom

548
00:28:45,960 --> 00:28:49,760
Speaker 1: that's out there. Europe off on that, which means David

549
00:28:49,840 --> 00:28:51,680
Speaker 1: Harrold must have had a good year. He was in

550
00:28:51,800 --> 00:28:54,800
Speaker 1: like the hundred and fourteen percentile something like that. He

551
00:28:54,920 --> 00:28:57,560
Speaker 1: just did killer year. You know, it's like boom and

552
00:28:57,600 --> 00:29:00,880
Speaker 1: then there's a couple of years and then boom again.

553
00:29:00,960 --> 00:29:04,280
Speaker 1: David Harrow joining us with Harris Associates and of course

554
00:29:04,440 --> 00:29:08,040
Speaker 1: ok Mark International. Fun. David, it's all great, and let's

555
00:29:08,080 --> 00:29:10,920
Speaker 1: try to get to a general portfolio discussion in a moment.

556
00:29:11,640 --> 00:29:16,760
Speaker 1: You are visible with BMP, Perry bat and other selected banks,

557
00:29:16,800 --> 00:29:21,680
Speaker 1: including a small Zurich startup called Credit Swiss Group. Uh.

558
00:29:21,720 --> 00:29:26,120
Speaker 1: What was it like when you heard once again your

559
00:29:26,200 --> 00:29:31,960
Speaker 1: bank was really in trouble. Yeah, it's very frustrating. It's

560
00:29:32,080 --> 00:29:36,400
Speaker 1: very frustrating Tom that it's almost two step forwards, one

561
00:29:36,440 --> 00:29:40,360
Speaker 1: step backward, step forward, two step backwards because they make

562
00:29:40,560 --> 00:29:43,040
Speaker 1: progress in some areas, and they've done a very good

563
00:29:43,120 --> 00:29:45,320
Speaker 1: job in certain areas, and then you have these little

564
00:29:45,320 --> 00:29:48,760
Speaker 1: blow ups, David, frustrating. I mean, you and I we

565
00:29:48,800 --> 00:29:51,120
Speaker 1: eat at the same McDonald's. But before we go down

566
00:29:51,120 --> 00:29:53,880
Speaker 1: to Credit Switz and Zurich, it's fourteen dollars for a

567
00:29:54,000 --> 00:29:56,880
Speaker 1: number two value meal. David, you know this story, and

568
00:29:56,920 --> 00:29:59,440
Speaker 1: you know Zurich better than most anyone we speak to.

569
00:30:00,200 --> 00:30:02,640
Speaker 1: When did are they taken out of their misery. When

570
00:30:02,680 --> 00:30:07,160
Speaker 1: do they mate? When did they buy somebody else? Or

571
00:30:07,200 --> 00:30:10,160
Speaker 1: when does somebody buy them? Where does Credit Sweeze fit

572
00:30:10,320 --> 00:30:13,360
Speaker 1: in five, in ten years out? Well, to be honest

573
00:30:13,440 --> 00:30:15,840
Speaker 1: with you, I think it's quite obvious that the two

574
00:30:15,840 --> 00:30:19,560
Speaker 1: Swiss investment banks have trouble competing with the big will

575
00:30:19,600 --> 00:30:22,800
Speaker 1: call the Anglo banks, you know Morgan, Stanley, Goldman, Sachs,

576
00:30:22,920 --> 00:30:26,160
Speaker 1: JP Morgan, and there has been talking, as you know,

577
00:30:26,200 --> 00:30:29,920
Speaker 1: there has I mean, something I think can be done

578
00:30:30,160 --> 00:30:34,040
Speaker 1: with ubs this investment bank Credit suits. I mean, there's

579
00:30:34,080 --> 00:30:37,120
Speaker 1: just too much duplication there and I think there is

580
00:30:37,200 --> 00:30:40,160
Speaker 1: potential for there to be a Swiss powerhouse, but there

581
00:30:40,160 --> 00:30:43,680
Speaker 1: are technical difficulties to this. But I think one has to,

582
00:30:44,200 --> 00:30:47,040
Speaker 1: especially in light of what's happened in the last few weeks,

583
00:30:47,520 --> 00:30:51,480
Speaker 1: one has to really ask oneself whether there's something that

584
00:30:51,520 --> 00:30:54,880
Speaker 1: can be done to add critical mass to these investment

585
00:30:54,880 --> 00:30:58,440
Speaker 1: banks by putting them together. David I worked for Credit

586
00:30:58,800 --> 00:31:01,400
Speaker 1: Else By the way, Yes, so David I worked for

587
00:31:01,400 --> 00:31:03,600
Speaker 1: Credit Swiss for five years way back in the day.

588
00:31:03,640 --> 00:31:06,600
Speaker 1: But so I followed this story very closely and like

589
00:31:07,520 --> 00:31:10,640
Speaker 1: it just seems like the time and time again they

590
00:31:10,640 --> 00:31:13,240
Speaker 1: find themselves in situations that no bank would want to

591
00:31:13,240 --> 00:31:15,320
Speaker 1: find themselves, and they do it more frequently than others.

592
00:31:15,440 --> 00:31:18,480
Speaker 1: What is it about their culture? Do you think that

593
00:31:18,600 --> 00:31:22,479
Speaker 1: kind of puts them in positions where they're in, you know,

594
00:31:22,920 --> 00:31:25,640
Speaker 1: situations they just don't want to be in. Yeah, I

595
00:31:25,640 --> 00:31:27,800
Speaker 1: mean there have been periods of time, by the way,

596
00:31:27,800 --> 00:31:29,760
Speaker 1: where they have done very well. Don't forget during the

597
00:31:29,760 --> 00:31:32,760
Speaker 1: Global Financial Crisis they were one of the few banks

598
00:31:32,800 --> 00:31:36,520
Speaker 1: to come out relatively unscathed. They did a good job there.

599
00:31:36,560 --> 00:31:39,000
Speaker 1: But before that, if we go back into history, the

600
00:31:39,080 --> 00:31:41,040
Speaker 1: tech bubble, they did not do well. This is the

601
00:31:41,080 --> 00:31:44,520
Speaker 1: first time we actually made an investment credits after they

602
00:31:44,600 --> 00:31:47,440
Speaker 1: kind of collapsed after the tech bubble, they had a

603
00:31:47,560 --> 00:31:50,680
Speaker 1: change in management. We invested in it, actually did quite well,

604
00:31:50,760 --> 00:31:52,960
Speaker 1: sold out most of the stock, probably should have sold

605
00:31:52,960 --> 00:31:56,480
Speaker 1: it all out. And then, of course post the global

606
00:31:56,520 --> 00:31:59,719
Speaker 1: financial crisis is where you saw these banana pels and

607
00:31:59,760 --> 00:32:03,080
Speaker 1: what I think it's happened. You had Brady Dooyan a CEO, good,

608
00:32:03,120 --> 00:32:05,800
Speaker 1: good person, but he didn't take risk off the table.

609
00:32:05,920 --> 00:32:08,680
Speaker 1: He didn't change the culture like should have been done.

610
00:32:09,240 --> 00:32:12,200
Speaker 1: And then Tejon came in started to ruffled a lot

611
00:32:12,280 --> 00:32:14,400
Speaker 1: of feathers by the way. Don't forget when when t

612
00:32:14,840 --> 00:32:18,800
Speaker 1: TM came in, he ruffled a lot of fun. Yes,

613
00:32:18,880 --> 00:32:21,200
Speaker 1: and he should have ruffled a lot more, it looks like.

614
00:32:22,000 --> 00:32:24,160
Speaker 1: But I have to say, and I've been very public

615
00:32:24,200 --> 00:32:26,800
Speaker 1: about this. I mean, the chairman has been in place

616
00:32:26,840 --> 00:32:29,320
Speaker 1: where over ten years. He comes from a law and

617
00:32:29,480 --> 00:32:33,240
Speaker 1: entertainment experience, and all of this has happened under his watch.

618
00:32:33,280 --> 00:32:35,400
Speaker 1: He was the wrong person to be the top of

619
00:32:35,440 --> 00:32:41,440
Speaker 1: the organization. We argued vociferously for his removal last February

620
00:32:41,720 --> 00:32:44,440
Speaker 1: and March, and it didn't happen. And it's finally, you know,

621
00:32:44,520 --> 00:32:48,040
Speaker 1: we're onto his last month. There's a very very strong

622
00:32:48,240 --> 00:32:52,719
Speaker 1: banker coming into Credit Suite starting May first, and I

623
00:32:52,720 --> 00:32:55,840
Speaker 1: think it's it's literally like the Calvary, because you need

624
00:32:56,000 --> 00:33:00,880
Speaker 1: someone from the outside to go through that organization and

625
00:33:01,000 --> 00:33:05,520
Speaker 1: to change the culture, changing incentives um and so the

626
00:33:05,720 --> 00:33:09,720
Speaker 1: inherent strength this bank has can't come to the surface

627
00:33:10,000 --> 00:33:12,720
Speaker 1: instead of the weaknesses. Right now, the weaknesses are coming

628
00:33:12,760 --> 00:33:15,840
Speaker 1: to the surface. What needs to happen is the strength

629
00:33:16,000 --> 00:33:19,680
Speaker 1: needs to come to the surface. So David, you know,

630
00:33:19,720 --> 00:33:22,800
Speaker 1: obviously the Credit Swiss has got this tremendous private banking

631
00:33:23,080 --> 00:33:26,720
Speaker 1: franchise on a global scale. But I'll tell you the

632
00:33:26,760 --> 00:33:30,360
Speaker 1: investment banking chops that they have are very very strong

633
00:33:30,480 --> 00:33:32,920
Speaker 1: on a global scale. Are you of the opinion that

634
00:33:32,920 --> 00:33:36,320
Speaker 1: they should try to be a global investment bank or

635
00:33:36,320 --> 00:33:37,880
Speaker 1: do you kind of put them in the bucket of

636
00:33:37,960 --> 00:33:41,040
Speaker 1: a Deutsche Bank, where, you know what, they really just

637
00:33:41,080 --> 00:33:44,560
Speaker 1: focus on Europe. I think they should focus on the

638
00:33:44,640 --> 00:33:48,640
Speaker 1: franchises where they could develop a competitive advantage, and whether

639
00:33:48,720 --> 00:33:51,520
Speaker 1: that means certain segments in Europe or other certain segments

640
00:33:51,560 --> 00:33:55,560
Speaker 1: around the world. I don't think being a universal investment

641
00:33:55,600 --> 00:34:00,000
Speaker 1: bank um that. I don't believe they have the capability

642
00:34:00,400 --> 00:34:02,880
Speaker 1: to do that. And maybe if they did, put together

643
00:34:03,560 --> 00:34:07,520
Speaker 1: with with ubs would see that, but at this stage

644
00:34:08,200 --> 00:34:11,600
Speaker 1: there's no demonstration that they are capable of being a

645
00:34:11,680 --> 00:34:16,640
Speaker 1: full fledged global investment David, one more question on this,

646
00:34:17,080 --> 00:34:20,439
Speaker 1: this huge uproar, this margin, calling the billions billions loss

647
00:34:20,480 --> 00:34:23,120
Speaker 1: We still don't know all of it, folks. One thing

648
00:34:23,200 --> 00:34:27,680
Speaker 1: I noticed, David Harrow is the sense of geography. Nomurs

649
00:34:27,920 --> 00:34:32,319
Speaker 1: over there, credit suite is over there, and others who

650
00:34:32,400 --> 00:34:38,120
Speaker 1: did better are over here. Did geography play into some

651
00:34:38,280 --> 00:34:44,000
Speaker 1: of the allocation of these billions of losses? That's a

652
00:34:44,040 --> 00:34:47,720
Speaker 1: good question. I don't really have a clear answer to that. Um.

653
00:34:48,320 --> 00:34:50,440
Speaker 1: You know, the moral and credit suites are two very

654
00:34:50,440 --> 00:34:55,440
Speaker 1: different companies by the way, UM, I mean the Japanese

655
00:34:55,480 --> 00:34:59,960
Speaker 1: have always had this history of even the worst results

656
00:35:00,200 --> 00:35:03,719
Speaker 1: the Swiss credit suite in terms of investment banks, and

657
00:35:03,760 --> 00:35:05,840
Speaker 1: then you know what would happen is they would go

658
00:35:05,920 --> 00:35:10,000
Speaker 1: somewhere new, blow it up, retreat, and then go back

659
00:35:10,080 --> 00:35:13,480
Speaker 1: after a few years. You know, I think it might

660
00:35:13,520 --> 00:35:16,640
Speaker 1: have something to do with um in the client relationship

661
00:35:16,760 --> 00:35:21,400
Speaker 1: is something one could look at. We gotta switch at

662
00:35:21,400 --> 00:35:25,280
Speaker 1: the time we got left David Herold. The international in investment,

663
00:35:25,360 --> 00:35:27,560
Speaker 1: so much of it is predicated in a week dollar.

664
00:35:27,680 --> 00:35:33,319
Speaker 1: Can you succeed without a week dollar? Oh? Yes, yes

665
00:35:33,480 --> 00:35:36,279
Speaker 1: we can. We can't succeed without a week dollar. UM.

666
00:35:36,800 --> 00:35:41,839
Speaker 1: In fact, a strong dollar with a week foreign currencies

667
00:35:41,880 --> 00:35:44,040
Speaker 1: would would be would be good for my companies. You know,

668
00:35:44,080 --> 00:35:46,840
Speaker 1: for a long time, for a long time, you know

669
00:35:46,960 --> 00:35:51,400
Speaker 1: that we had this currency thing in our face. And

670
00:35:51,440 --> 00:35:56,759
Speaker 1: now perhaps some of its turning, meaning we had a

671
00:35:56,840 --> 00:36:00,680
Speaker 1: stronger dollar over the last four or five years. UM.

672
00:36:01,400 --> 00:36:06,120
Speaker 1: This eventually benefits foreign companies. But I think more importantly

673
00:36:06,920 --> 00:36:12,080
Speaker 1: is this notion of where the value place tend to be.

674
00:36:12,239 --> 00:36:16,120
Speaker 1: If you look outside of the United States, the negative

675
00:36:16,160 --> 00:36:19,920
Speaker 1: has been the weaker tech sector overseas and stronger what

676
00:36:20,000 --> 00:36:23,480
Speaker 1: will call kind of value place. And I think this

677
00:36:23,600 --> 00:36:26,880
Speaker 1: is what one of the things that will help UM

678
00:36:27,000 --> 00:36:31,280
Speaker 1: you know, foreign investment returns, is that the bubble what's

679
00:36:31,360 --> 00:36:35,479
Speaker 1: kind of blown from tech companies that don't make money.

680
00:36:35,480 --> 00:36:39,480
Speaker 1: And I want to differentiate between two things. Cash flow

681
00:36:39,560 --> 00:36:42,200
Speaker 1: streams are what make a company valuable, and some tech

682
00:36:42,239 --> 00:36:47,640
Speaker 1: companies have huge market values with low um cash flow streams,

683
00:36:47,640 --> 00:36:50,840
Speaker 1: and others have a cash flow stream that supports the

684
00:36:50,880 --> 00:36:54,160
Speaker 1: market value. And I think the rotation that we will

685
00:36:54,200 --> 00:36:57,880
Speaker 1: see the continue to come out of our those companies

686
00:36:58,080 --> 00:37:01,640
Speaker 1: which have low cash flow streams and high market values.

687
00:37:01,920 --> 00:37:05,840
Speaker 1: And what were we see the opposite high casual streams

688
00:37:05,840 --> 00:37:07,840
Speaker 1: and low market values is in a lot of the

689
00:37:07,880 --> 00:37:11,719
Speaker 1: European industrials and materials and financial companies. And this is

690
00:37:12,120 --> 00:37:16,000
Speaker 1: why I feel very very good about European equities over

691
00:37:16,040 --> 00:37:19,080
Speaker 1: the next twelve eighteen months. David Harrow, Thank yous from Positions.

692
00:37:19,280 --> 00:37:22,320
Speaker 1: Gotta leave it there, ok, Mark David Harrow in Chicago,

693
00:37:22,719 --> 00:37:27,720
Speaker 1: greatly appreciative. This is the Bloomberg Surveillance podcast. Thanks for listening.

694
00:37:28,080 --> 00:37:31,400
Speaker 1: Join us live weekdays from seven to ten am Eastern

695
00:37:31,640 --> 00:37:35,680
Speaker 1: on Bloomberg Radio and on Bloomberg Television each day from

696
00:37:35,760 --> 00:37:41,000
Speaker 1: six to nine am for insight from the best in economics, finance, investment,

697
00:37:41,160 --> 00:37:46,200
Speaker 1: and international relations. And subscribe to the Surveillance podcast on

698
00:37:46,280 --> 00:37:50,080
Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course, on

699
00:37:50,200 --> 00:38:02,000
Speaker 1: the terminal. I'm Tom Keene, and this is Bloomberg