WEBVTT - Surveillance: Global Risks Are Interconnected, Bremmer Says 0:00:00.080 --> 0:00:13.040 Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 0:00:13.480 --> 0:00:17.560 Jai Ley. We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:29.120 Bloomberg dot Com, and of course on the Bloomberg in Bramer. 0:00:29.200 --> 0:00:31.560 You write a group founder and president alongside Thomas at 0:00:31.600 --> 0:00:35.400 Bobell Access CEO. So Thomas talked to me about this report, 0:00:35.720 --> 0:00:37.839 what have we learned and what I've been working on 0:00:37.880 --> 0:00:40.479 with you write a group. So we're doing this report 0:00:40.760 --> 0:00:43.760 every year, which is basically asking many many people around 0:00:43.800 --> 0:00:46.400 the world, what are the top risks? And since we 0:00:46.440 --> 0:00:49.040 feel that the risk landscape has changed, we really wanted 0:00:49.120 --> 0:00:51.199 to have a partner that is also looking at the 0:00:51.240 --> 0:00:54.480 geopolitical dimension, because what you see is that the top 0:00:54.600 --> 0:00:59.800 risks remained the same climate, technology, geopolitical tensions, but what 0:01:00.160 --> 0:01:02.240 new is that they are interlinked and that there is 0:01:02.280 --> 0:01:06.120 a very big geopolitical component to it, which makes the 0:01:06.160 --> 0:01:09.040 combination of the two of us very interesting to understand 0:01:09.040 --> 0:01:10.800 these risks and see what can we do with them. 0:01:11.440 --> 0:01:13.319 Part of the risk is the financial risk. We've got 0:01:13.360 --> 0:01:15.319 the banks coming out right now in America, you have 0:01:15.400 --> 0:01:19.680 a massive sprawl of financial realities, and part of that 0:01:20.120 --> 0:01:23.760 is the actual assumption is coming down all those liabilities 0:01:23.800 --> 0:01:27.399 you about further our butter stuff against the low rate environment. 0:01:27.720 --> 0:01:31.320 How do you take the financial risk of this study 0:01:31.520 --> 0:01:35.520 in with the new actual assumption that's out there. The 0:01:35.600 --> 0:01:37.960 financial risk is very much linked to the third risk, 0:01:37.959 --> 0:01:40.160 which is the geopolitical risk because if you look and 0:01:40.240 --> 0:01:42.840 the social risk, if you look the low interest rate 0:01:43.160 --> 0:01:47.119 drive the fragmentation of society since uh, it is all 0:01:47.160 --> 0:01:50.720 about the retirement of people and how they can live 0:01:50.880 --> 0:01:54.279 going forward. Um, this touch is very much that topic. 0:01:54.520 --> 0:01:57.680 I mean, this is heart and center. I mean, the 0:01:57.720 --> 0:02:01.320 low economic growth, the low terminal whose we have all 0:02:01.440 --> 0:02:04.880 comes back to populism and the social discontent you have 0:02:04.960 --> 0:02:06.880 in this report now, I mean it's not a happy 0:02:07.000 --> 0:02:11.600 report in the sense that we know that the geopolitical risks, 0:02:11.880 --> 0:02:15.799 the technological risks, and the climate risks are all at 0:02:16.040 --> 0:02:19.919 very elevated levels. But they're hitting at a time when 0:02:19.919 --> 0:02:23.400 the economy is starting to slow really for the first 0:02:23.400 --> 0:02:26.880 time since the largest recession we've experienced in many decades. 0:02:27.240 --> 0:02:30.480 That that combination is going to make for a lot 0:02:30.520 --> 0:02:34.800 of crises, mostly inside countries, mostly making it harder for 0:02:34.840 --> 0:02:38.520 governments to respond effectively, but some across borders. And John 0:02:38.520 --> 0:02:40.120 with you to go up and f Yesterday, I just 0:02:40.160 --> 0:02:42.480 did a down the study of the I m F data. 0:02:42.760 --> 0:02:46.400 Only two countries have any kind of flat up vector, 0:02:46.480 --> 0:02:49.639 the United States and Spain. And other than that, it's 0:02:49.680 --> 0:02:52.720 a pretty ugly synchronized growth Slowan We'll take a look 0:02:52.720 --> 0:02:55.200 at Germany and Europe right now, it's onomably the weak economy, 0:02:55.240 --> 0:02:57.280 the weakest link in the U sign at the moment. 0:02:57.280 --> 0:02:59.800 And ye know to just aggressively loud Thomas speak to that. 0:03:00.080 --> 0:03:02.000 R US. We have many people come on this program 0:03:02.000 --> 0:03:04.600 and talk about how low rates are a problem, negative 0:03:04.639 --> 0:03:08.359 yields or an issue. You run acca just how much 0:03:08.360 --> 0:03:10.720 of an issue is this right now? No, it's it's 0:03:10.760 --> 0:03:12.560 a it's a big issue for the whole industry. I 0:03:12.560 --> 0:03:15.960 mean on our side as act, we have moved away 0:03:16.000 --> 0:03:19.359 from financial risks quite early on, So about three or 0:03:19.360 --> 0:03:22.200 four years ago we changed our portfolio from being eighty 0:03:22.280 --> 0:03:26.040 percent focused on financial markets to being eighty percent focused 0:03:26.040 --> 0:03:29.800 on technical risks, so buildings, health protection and so on. 0:03:30.120 --> 0:03:32.519 We are less we are less touched by it now. 0:03:32.720 --> 0:03:34.720 But when you look at the whole industry. It's a 0:03:34.720 --> 0:03:37.720 massive issue for the industry, but also for the states 0:03:37.880 --> 0:03:42.040 because the reaction power of the Europeans, if you're talking 0:03:42.080 --> 0:03:46.480 about Europe towards a new crisis, will be much lower 0:03:46.920 --> 0:03:48.480 than it used to be in two thousand night. Have 0:03:48.520 --> 0:03:51.360 you been able to lobby the European Central Bank its all? 0:03:51.480 --> 0:03:53.640 Have you had any discussions with policy makers? Have you've 0:03:53.680 --> 0:03:55.800 given them your perspective on what do you think the 0:03:55.840 --> 0:04:00.560 current monetary policy setting actually means for this business? Certainly, 0:04:00.680 --> 0:04:03.360 but the issue is, to my mind, a different one. 0:04:04.080 --> 0:04:07.680 The monetary policy is just a question of do I 0:04:07.720 --> 0:04:11.600 give enough room and free space for the states to 0:04:11.720 --> 0:04:15.280 actually pursue structural reforms. What we see today is that 0:04:15.800 --> 0:04:18.520 many of the European states have not pursued the structural 0:04:18.520 --> 0:04:21.240 reforms necessary, and therefore we come to an end of 0:04:21.279 --> 0:04:25.159 the monitor of policy. Ian. Then this is the geopolitics, 0:04:25.200 --> 0:04:26.919 and right now it's an upper we'll come back and 0:04:26.920 --> 0:04:29.800 talk about this in our next section. Right now, have 0:04:29.920 --> 0:04:32.520 you ever seen it like this? Are we just so 0:04:32.760 --> 0:04:35.560 benumb that we you know, it's this thing, this thing, 0:04:35.640 --> 0:04:37.360 this thing, this thing. Have you ever seen it like? No? 0:04:37.480 --> 0:04:40.320 Not in my lifetime, and it's in part of it's 0:04:40.400 --> 0:04:46.840 because inside governments you have such polarization that's really challenging 0:04:46.880 --> 0:04:51.120 the existing institutional framework of the country to so many 0:04:51.160 --> 0:04:54.920 countries country, but also because the U. S. China relationship 0:04:55.040 --> 0:04:58.919 has hit a tipping point. I mean, we've had twenty 0:04:58.960 --> 0:05:01.400 five plus year is where we haven't had to worry 0:05:01.480 --> 0:05:05.279 about the basic geopolitical fabric of the world. That's not true. 0:05:05.279 --> 0:05:07.800 And your Meredith Sumter has been outstanding. What is her 0:05:07.920 --> 0:05:10.800 latest on John? I mean, I don't even know where 0:05:10.839 --> 0:05:13.240 are you still in trade talks with China? I believe 0:05:13.279 --> 0:05:17.880 we're still in a guy shading face. No deal is 0:05:18.240 --> 0:05:21.360 no deal will phase one Phase A no deal is happening, 0:05:21.600 --> 0:05:24.719 But more importantly than no deal happening, the Chinese going 0:05:24.760 --> 0:05:30.280 increasingly their own way on technology, on supply chain, on standards, 0:05:30.680 --> 0:05:34.479 recognizing that the future, irrespective of who the American president is, 0:05:34.480 --> 0:05:37.279 is going to be discermined in their space by their rules. 0:05:37.480 --> 0:05:39.320 That's not a good place to be a global investor. 0:05:39.360 --> 0:05:41.640 We're gonna come back with Ian Bremer and Thomas Burrow 0:05:42.240 --> 0:05:44.279 here on our five Things you Need to Know really 0:05:44.279 --> 0:05:46.800 wrap it around their good research and report, but John, 0:05:47.240 --> 0:05:52.280 this is breaking news. The teenager Harvey Elliott of Liverpool 0:05:53.640 --> 0:05:58.719 banded fourteen days suspended outrage time out here for his 0:05:58.839 --> 0:06:05.560 impersonation of Mr Kane of the Todds Gina who sponsors Liverpool. No, 0:06:05.680 --> 0:06:08.240 I don't the gentleman sitting next to me, but I 0:06:08.240 --> 0:06:10.600 feel like you knew that already. Are we going to 0:06:10.680 --> 0:06:14.840 do this in the commercial break? Are we doing this live? Live? 0:06:14.880 --> 0:06:32.440 In the next segment, Alison Williams dropped behind in charge 0:06:32.480 --> 0:06:34.880 of all of banking analysis for Bloomberg. That's like a 0:06:34.960 --> 0:06:39.440 ginormous job. And she has joins us right now, two madmen, 0:06:40.200 --> 0:06:43.920 And there was the beginning of an adward of Hurts 0:06:44.160 --> 0:06:47.880 and Avis. My amateur take is JP Morgan is Hurts 0:06:48.040 --> 0:06:51.919 and Bank of America's Avis. What does Brian moynihan need 0:06:51.960 --> 0:06:56.920 to do to competitively find the ratios, the stock performance, 0:06:56.960 --> 0:07:02.080 the financial excellence of his her competitor. I think what 0:07:02.240 --> 0:07:06.719 he's showing is that he's getting there. So so wou'd say, 0:07:06.839 --> 0:07:09.479 you know, so JP Morgan is is executing at the 0:07:09.480 --> 0:07:12.760 top of all the banks. They have leading profitability, right, um, 0:07:12.920 --> 0:07:16.880 they are leaders and across all their businesses and so um, 0:07:16.920 --> 0:07:20.120 you know to your analogy. Others, UM are sort of 0:07:20.120 --> 0:07:23.160 on the path. I think for Bank of America, they 0:07:23.760 --> 0:07:27.800 the positives this quarter were one expense progress and two 0:07:27.880 --> 0:07:30.440 market share gains. And that's that's really what we're looking 0:07:30.480 --> 0:07:34.360 for in this environment because the revenue environment execution, it 0:07:34.360 --> 0:07:39.840 looks like really solid execution. UM. We see it elsewhere 0:07:39.840 --> 0:07:43.240 in selective businesses. UM. So UM. You know, there were 0:07:43.280 --> 0:07:46.120 there were some positives I think in City Groups quarter, 0:07:46.200 --> 0:07:47.800 but I think you know, if you look at City 0:07:47.800 --> 0:07:49.760 Group and Wells, I think the disappointment there is on 0:07:49.800 --> 0:07:52.480 the cost side. And so you know, both of those 0:07:52.480 --> 0:07:55.000 banks coming in a little higher than expected on costs 0:07:55.040 --> 0:07:58.800 and you know, looking to the future, whereas we're seeing 0:07:58.960 --> 0:08:01.520 you know, a Bank of America it happening UM today 0:08:01.560 --> 0:08:05.520 coming in below their guidance. JP Morgan yesterday also lowering 0:08:05.560 --> 0:08:08.520 their guidance on costs. And you know, we talked about costs, 0:08:08.560 --> 0:08:10.840 we talked about branches. But you know, to me, one 0:08:10.880 --> 0:08:13.760 of the interesting metrics that that shows us really what's 0:08:13.760 --> 0:08:17.240 happening is UM. You know, digital, We know that the 0:08:17.280 --> 0:08:19.840 cost of mobile banking is so much lower, and we're 0:08:19.880 --> 0:08:23.920 actually seeing an uptick in digital growth at both bank 0:08:23.960 --> 0:08:26.440 America and JK we went your market share. And you're 0:08:26.440 --> 0:08:28.320 too young to remember this, but I remember when they 0:08:28.440 --> 0:08:32.440 combined and merge banks and they were regionally distinct in separate. 0:08:32.760 --> 0:08:36.559 Is the future of market share that Bank of America 0:08:36.640 --> 0:08:39.800 will compete with JP Morgan for the same geography in 0:08:39.920 --> 0:08:43.800 Ohio or will they continue to partition out market share. 0:08:44.320 --> 0:08:48.960 I think that we are UM converging to broad coverage. Right. 0:08:49.000 --> 0:08:51.800 So to your point years ago, the way to get 0:08:51.840 --> 0:08:55.000 there was acquisition the bank you bought, Fleet Bank or whatever. 0:08:55.040 --> 0:08:58.199 The UM and especially Bank America has sort of a 0:08:58.559 --> 0:09:03.319 storied history of being built through UM acquisition. JP Morgan 0:09:03.400 --> 0:09:06.960 is sort of a couple of bigger combinations. But anyway, 0:09:07.320 --> 0:09:11.160 I think in a way the tax gift to banks, 0:09:11.200 --> 0:09:14.280 if you will, was that UM. With that announcement, we 0:09:14.360 --> 0:09:18.320 did get two major plans from JP Morgan Bank America saying, look, 0:09:18.360 --> 0:09:20.760 we're looking at what markets are we not in, what 0:09:20.880 --> 0:09:23.720 markets are we going in? And they're going into that 0:09:23.840 --> 0:09:26.679 market UM. And I think you know what's telling is 0:09:26.679 --> 0:09:30.720 our regional bank analysts saying that he is seeing share 0:09:30.760 --> 0:09:33.520 accruing to these bigger banks. And listen, just a final 0:09:33.640 --> 0:09:36.160 question on what is happening with the right sensitivity of 0:09:36.200 --> 0:09:38.880 some of these banks. Many of them were looking for 0:09:38.960 --> 0:09:42.520 two right cuts this year. So far, that's what we've had. 0:09:42.559 --> 0:09:45.679 We may well have more. How are the businesses holding up? 0:09:45.720 --> 0:09:48.000 What do the net interest margins look like? What does 0:09:48.080 --> 0:09:51.720 net interest income look like? So that was again another 0:09:51.760 --> 0:09:55.000 story of Bank America that holds holding up more positive 0:09:55.559 --> 0:09:58.199 And I think what we're seeing for Bank America and 0:09:58.600 --> 0:10:01.240 JP Morgan as well is as we're seeing a pick 0:10:01.320 --> 0:10:04.079 up on the consumer side of things, those are higher 0:10:04.120 --> 0:10:07.839 yielding assets. Um Also they tend to have a different 0:10:08.080 --> 0:10:11.040 uh sensitivity to rates, if you will, and so that 0:10:11.160 --> 0:10:13.960 is really helping them interest margins and net interest income 0:10:14.040 --> 0:10:16.240 hold up better. At the fact that we're getting better 0:10:16.240 --> 0:10:18.320 consumer loan ground. So when Tom puts his rent on 0:10:18.360 --> 0:10:20.760 his credit account at the end of each month, his 0:10:20.840 --> 0:10:23.800 interest rights aren't going down. That's essentially at Tom, they 0:10:23.840 --> 0:10:26.360 still high. You're interest right at the end of the month? 0:10:26.440 --> 0:10:28.800 Is still han your credit count? Yeah, it's like jen, 0:10:29.120 --> 0:10:32.120 I mean, it's like wicked genormous. Is it a record high? Now? 0:10:32.240 --> 0:10:36.080 Is that safe to say? I don't believe. Actually it's 0:10:36.120 --> 0:10:38.120 it's a record How I'll have to look and circle 0:10:38.160 --> 0:10:40.640 back with you. But what I would say is that 0:10:40.720 --> 0:10:44.160 when you look at those prices, they're inelastic, right, So 0:10:44.760 --> 0:10:48.400 even if they're not, you know, historic high versus their 0:10:48.440 --> 0:10:53.000 own history, they're certainly the highest across products. And as 0:10:53.120 --> 0:10:55.840 rates go up and down, you'll get things like commercial 0:10:55.880 --> 0:10:59.760 loans repricing a meeting you know very closely, whereas the 0:10:59.760 --> 0:11:02.400 car it is much more in as quick question is 0:11:02.480 --> 0:11:04.920 operating income in the middle of the income statement? Do 0:11:04.960 --> 0:11:07.800 you see that growth continuing forward the last five years 0:11:07.880 --> 0:11:11.040 recovery has been extraordinary? But does it still for these 0:11:11.080 --> 0:11:14.560 major banks continue to grow? Grow, grow, It should still 0:11:14.600 --> 0:11:17.000 continue to grow. The one question that we have, the 0:11:17.040 --> 0:11:20.160 one thing that would interrupt it relates to credit costs. 0:11:20.400 --> 0:11:24.199 Credit is solid. We barely even touch on it um 0:11:24.200 --> 0:11:26.880 over the last few earnings because it's been such a 0:11:26.920 --> 0:11:30.800 great story. Um. But you know a recession is coming 0:11:30.800 --> 0:11:33.240 one day, um and at that point, well we're going 0:11:33.280 --> 0:11:35.760 to have to see, you know, I guess how long 0:11:35.800 --> 0:11:38.800 out is it and how severe. Alison Williams always great 0:11:38.800 --> 0:11:41.560 to get your insight. Blimbag Intelligence is semior analyst on 0:11:41.600 --> 0:11:43.880 the US banks. As we get more bank earnings from 0:11:43.880 --> 0:11:46.559 the United States of America over the last twenty four 0:11:46.600 --> 0:11:48.600 hours and the next twenty four hours to bank America 0:11:48.720 --> 0:11:50.640 up in a pre market song by a little more 0:11:50.840 --> 0:12:08.280 than two percentage point. Tom Keenan John Farrow, had we 0:12:08.360 --> 0:12:11.040 now celebrate a new book out there, all of you 0:12:11.080 --> 0:12:13.840 know that listened to me every day. My joy of 0:12:13.880 --> 0:12:17.840 the Leader's bookshelf James trevidis from four or five six 0:12:17.960 --> 0:12:20.240 years ago. It was my book of the year at 0:12:20.240 --> 0:12:24.400 the time. Within it packed from generals, from admirals are 0:12:24.480 --> 0:12:27.520 forty fifty even sixty books you should read. If you 0:12:27.600 --> 0:12:30.800 read ton of them, you're a changed person. The adiral 0:12:30.840 --> 0:12:35.160 now has outdone himself. James Trevidis on Sailing True North. 0:12:35.280 --> 0:12:38.720 Ten Admirals and the Voyage of Character. It reminded me 0:12:38.840 --> 0:12:43.200 so much, Jim of Eric Larrabie's Commander in Chief, his 0:12:43.280 --> 0:12:47.359 wonderful book on f dr in all of his generals. 0:12:47.720 --> 0:12:51.120 But you take the admirals over time. You begin long 0:12:51.120 --> 0:12:54.080 ago and far away. How far back do you need 0:12:54.120 --> 0:12:58.120 to go to find an admiral of character? I think, 0:12:58.200 --> 0:13:02.360 to really a survey the seascape time, you've really got 0:13:02.360 --> 0:13:05.080 to go back over two thousand years ago, and you 0:13:05.120 --> 0:13:07.160 have to go to the ancient Greeks and the Battle 0:13:07.280 --> 0:13:11.800 of Solemnists, where the Greeks turned back the Persian invaders 0:13:11.840 --> 0:13:14.400 in a massive sea battle. And the admiral's name was 0:13:14.480 --> 0:13:18.120 the Mysticles. You bring it forward, and let's go right 0:13:18.120 --> 0:13:21.240 to where Larabie was in World War two, the extraordinary 0:13:21.320 --> 0:13:25.000 Nimits full disclosure, Nimits was worshiped in my house. Let's 0:13:25.040 --> 0:13:29.360 begin with what Nimitz wrought with spruance and the others 0:13:29.440 --> 0:13:34.280 after the debris of Pearl Harbor. The thing to understand 0:13:34.320 --> 0:13:39.240 about Chester nimitz Is is incredible resilience, which springs from 0:13:39.360 --> 0:13:42.640 deep reserves of character. Here's a man who has labored 0:13:42.679 --> 0:13:45.880 his way up the career ladder finally gets the call 0:13:45.960 --> 0:13:49.280 to take command of the most powerful military instrument on 0:13:49.320 --> 0:13:53.040 the planet, the Pacific Fleet of the United States. Yet 0:13:53.080 --> 0:13:56.360 the day he takes command, tom as you know, the 0:13:56.480 --> 0:14:00.319 fleet is smoking ruin in front of him in Pearl Harbor. 0:14:00.440 --> 0:14:04.040 The beautiful battleships sunk, the carriers are on the move 0:14:04.080 --> 0:14:06.800 out at sea to win the Japanese. He's forced to 0:14:06.840 --> 0:14:09.840 take demand on the deck of a diesel submarine, a 0:14:09.920 --> 0:14:15.120 tiny little diesel. He's not wearing those beautiful choker whites. 0:14:15.200 --> 0:14:19.440 He's wearing rumb tacks. He squares the shoulders, builds a 0:14:19.560 --> 0:14:22.680 team and takes on the Japanese Empire, Jans trevinas and 0:14:22.800 --> 0:14:25.560 we celebrate with the animal sailing true North. Let me 0:14:25.600 --> 0:14:29.520 bring in Captain Pharaoh. Did you call the admiral? Jim's 0:14:29.520 --> 0:14:33.920 called the Admiral Jim and the royalty checks I've gotten 0:14:34.000 --> 0:14:38.080 from can Jim? Can I just clean this up? Because 0:14:38.080 --> 0:14:40.960 he never really asks? Is it okay to call you Jim? 0:14:40.960 --> 0:14:42.800 We're going to call you Jim. He's also a bloom 0:14:42.800 --> 0:14:45.680 Bug opinion columnist. Now, I didn't know that you've written 0:14:45.720 --> 0:14:48.720 a really interesting piece Jim recently, a survivor's guy to 0:14:48.800 --> 0:14:51.160 testify in Congress, and imagine there might be some people 0:14:51.200 --> 0:14:53.800 in Washington, d C. That need to read that. So 0:14:53.880 --> 0:14:59.160 walk me through what your story is and the latest 0:14:59.200 --> 0:15:02.800 Bloomberg Opim in piece. Um, it's about the character and 0:15:02.880 --> 0:15:06.760 about the need for those who are facing a very 0:15:07.560 --> 0:15:11.080 a very changing moment in their lives. They're being called 0:15:11.120 --> 0:15:15.120 to testify in front of Congress, and they have to 0:15:15.160 --> 0:15:18.600 follow the truth without fear or favor wherever it goes. 0:15:19.000 --> 0:15:21.440 And some of these people will meet that challenge, and 0:15:21.520 --> 0:15:23.800 some of them will not will know so much more 0:15:24.280 --> 0:15:27.080 as a result of this unfolds in front of us. 0:15:27.240 --> 0:15:30.360 But what we're seeing is a tempt of character. The 0:15:30.480 --> 0:15:34.080 line Admiral Stevens and sailing true north is to sail 0:15:34.160 --> 0:15:37.720 true east across the Mediterranean to where there's a Russian 0:15:37.840 --> 0:15:41.360 navy at the end of the Mediterranean. The navy has 0:15:41.480 --> 0:15:44.440 nothing to do with Turkey and Syria, and yet it's 0:15:44.480 --> 0:15:48.560 got everything to do with Turkey and Syria. Tell me 0:15:48.680 --> 0:15:53.920 first of all about the Russian navy at the in Syria? 0:15:55.000 --> 0:15:58.840 Is it Lataki? Is that correct? It is? This is 0:15:58.880 --> 0:16:01.720 one of the boards on uh, the Syrian coast. But 0:16:01.880 --> 0:16:04.440 this uh, this portion of the Russian navy, tom as 0:16:04.480 --> 0:16:06.720 I think you know, comes down from the Black Sea. 0:16:07.160 --> 0:16:11.240 They have long had ambitions to dominate the eastern Mediterranean. 0:16:11.600 --> 0:16:15.600 They are launching cruise missiles ashore. They have marines ashore, 0:16:15.720 --> 0:16:19.080 just like we send our marines ashore. They provide air defense, 0:16:19.120 --> 0:16:22.440 they're part of the logistics chain that moves supplies to 0:16:22.480 --> 0:16:25.800 the Russian forces. They are very much integral to what 0:16:25.960 --> 0:16:29.680 is happening in Syria today. How how is our navy 0:16:29.800 --> 0:16:32.480 responding to this? I mean do we show the flag 0:16:33.040 --> 0:16:35.560 through the Bosphorus? I mean, folks, this is ancient stuff. 0:16:35.560 --> 0:16:39.480 This is like Crimean War eighteen fifty six amerals Tavitas. 0:16:39.600 --> 0:16:43.920 How does our navy respond to showing the flag? After 0:16:43.960 --> 0:16:48.680 the events of the last fourteen days, we are deploying 0:16:48.800 --> 0:16:52.200 a carrier battle group, which is an aircraft carrier and 0:16:52.360 --> 0:16:55.960 half a dozen ships through that eastern Mediterranean. Some of 0:16:56.000 --> 0:16:58.720 those ships, the destroyers, will break off and go through 0:16:58.720 --> 0:17:02.360 the Bosphorus into the Axe. As you know, aircraft carriers 0:17:02.360 --> 0:17:05.879 are not permitted to do so under the Montro Convention. 0:17:06.280 --> 0:17:09.280 So we'll send those smaller destroyers into the Black Sea 0:17:09.320 --> 0:17:13.040 show of force. We will be surveilling the Russian fleet 0:17:13.119 --> 0:17:16.400 off the coast. We'll be operating with our allies partners 0:17:16.400 --> 0:17:19.760 in France. This is really a NATO mission. The Mediterranean 0:17:19.920 --> 0:17:24.000 is our largest maritime border to the south, so you 0:17:24.040 --> 0:17:27.120 know those ways, Tom will continue to be very engaged 0:17:27.320 --> 0:17:30.040 from the sea in the Syrian crisis. What is the 0:17:30.119 --> 0:17:32.640 damage to our Pentagon by what we have seen from 0:17:32.680 --> 0:17:36.640 President Trump? Or is that overwrought by a media? Uh 0:17:36.880 --> 0:17:40.040 not without a proclivity to President Trump. Is there tangible 0:17:40.119 --> 0:17:44.879 damage to the Pentagon? I think there is. Unfortunately, and 0:17:45.240 --> 0:17:48.200 let's face it, in terms of damage to the president, 0:17:48.280 --> 0:17:51.480 this is a subject upon which you have agreement between 0:17:51.960 --> 0:17:57.040 Bernie Sanders and Lindsey Graham, between Mitch McConnell and Nancy Pelosi. 0:17:57.400 --> 0:18:00.840 This is not the left wing of the Democratic Party 0:18:00.880 --> 0:18:04.639 coming after President Trump. This is a failure of American's 0:18:04.640 --> 0:18:09.159 foreign policy. And it's pretty clearly understood that walking away 0:18:09.200 --> 0:18:12.199 from our allies in a scenario like this will have 0:18:12.320 --> 0:18:15.200 long term consequence. I mean, how do we walk this back? 0:18:15.200 --> 0:18:18.280 And I say this folks with great respect for say Cyprus, 0:18:18.840 --> 0:18:21.280 where the Turks and the Greeks for any number of 0:18:21.320 --> 0:18:24.320 time over three hundred years, have been able to walk 0:18:24.359 --> 0:18:27.480 back the tensions to some form of peace. I know 0:18:27.560 --> 0:18:30.280 they did this, Admiral, I believe in the nineteen eighties 0:18:30.800 --> 0:18:34.800 to good effect with Mr pap Andrea. But but how 0:18:35.080 --> 0:18:38.399 do we walk back the damage that you perceive in 0:18:38.440 --> 0:18:42.280 the last number of days. I would say we begin 0:18:42.400 --> 0:18:47.200 by trying to re establish US engagement in this crisis. 0:18:47.240 --> 0:18:51.680 And here I commend the Trump administration tomorrow to anchor Go, 0:18:52.080 --> 0:18:55.560 the Vice President and the Secretary of State. The Turks 0:18:55.640 --> 0:18:59.920 appreciate that kind of high level delegation that may help. Secondly, 0:19:00.040 --> 0:19:04.119 we use the NATO Alliance. Turkey values its membership in 0:19:04.160 --> 0:19:07.480 the NATO Alliance. They don't want to damage their standing 0:19:07.560 --> 0:19:10.200 in the alliance, so we need all of the NATO 0:19:10.320 --> 0:19:13.600 nations to contribute to putting pressure on Turkey. And third 0:19:13.640 --> 0:19:17.680 and finally, Tom, I think at this point economic sanctions 0:19:18.040 --> 0:19:21.960 plus keep a residual force at least in southern Syria 0:19:22.560 --> 0:19:24.840 and see if we can get to as ceasefire and 0:19:24.880 --> 0:19:27.280 move forward with the events. I'm sorry that we did 0:19:27.280 --> 0:19:30.720 not focus completely on Sailing True North. We'll have Admiral 0:19:30.800 --> 0:19:33.800 James Travitas on with us again. I really can't say 0:19:33.920 --> 0:19:37.560 enough of this. If there's one book that must be 0:19:37.600 --> 0:19:40.320 a required read out of his, the Leader's bookshelf as 0:19:40.480 --> 0:19:45.000 Larabee's Commander in Chief, on the fractious generals that FDR 0:19:45.080 --> 0:19:48.720 had to stare down with General Marshall and General Eisenhower 0:19:48.760 --> 0:19:53.560 at times. In the Admiral drives forward that conversation with 0:19:53.720 --> 0:19:57.600 ten admirals and the voyage of character Sailing True North. 0:19:57.960 --> 0:20:00.840 And we look forward to a further conversation on this 0:20:00.920 --> 0:20:19.200 with Bloomberg Opinion columnist James astra Vitas. This is a Joy. 0:20:19.280 --> 0:20:20.960 It has been far too long. We have to wait 0:20:21.000 --> 0:20:22.600 for him to wander out with a new book. And 0:20:22.640 --> 0:20:25.640 he's not writing. You know. It's not Nancy Drew. He's 0:20:25.680 --> 0:20:29.000 not He's not writing every six months. To back up, 0:20:29.520 --> 0:20:32.440 more than a decade ago, a guy named Bennett Galibo's 0:20:32.520 --> 0:20:34.920 got a shingle out of Black Rock, I believe still 0:20:34.960 --> 0:20:40.159 and Leo Tillman wrote a book Risk Management, which absolutely 0:20:40.320 --> 0:20:44.280 changed how we approach risk, in the thinking of risk, 0:20:44.359 --> 0:20:47.879 the intelligence of risk. It was hugely Matthew paul I 0:20:47.880 --> 0:20:50.880 would go over every coefficient and go can they add 0:20:50.880 --> 0:20:54.040 any more Greek letters to this equation? Mr Tillman has 0:20:54.080 --> 0:20:57.400 going on to us a storied career and consulting two 0:20:57.400 --> 0:21:02.200 companies on how to execute all the sixty thousand foot 0:21:02.320 --> 0:21:06.600 mumbo jumbo everybody talks about. With General Charles Jacoby, he 0:21:06.640 --> 0:21:10.560 has written Agility, How to Navigate the Unknown and Sees 0:21:10.680 --> 0:21:14.480 Opportunity in a world of disruption. Leo, it's another boring 0:21:14.520 --> 0:21:17.479 book on leadership, but what's great about it is you 0:21:17.560 --> 0:21:21.919 overlay it with this strange thing called execution. How do 0:21:22.040 --> 0:21:27.760 congratulations on agility? How do you execute all the fancy stuff? 0:21:27.800 --> 0:21:31.040 All these consultants talk about Well, first of all, it's 0:21:31.040 --> 0:21:33.520 it's such a pleasure to be here. As you said, 0:21:33.560 --> 0:21:37.480 we the our conversations on these subjects go back decades, 0:21:38.160 --> 0:21:41.800 and this is the latest thinking on what it takes 0:21:41.840 --> 0:21:46.400 to adapt to changing environments, adapting in terms of economic cycles, 0:21:46.440 --> 0:21:50.080 in terms of risk, etcetera. So when you think about agility, 0:21:50.160 --> 0:21:53.200 we define it as a three step process that is 0:21:53.240 --> 0:21:58.240 applicable to every company every investor, detect, assess, and respond 0:21:58.280 --> 0:22:01.760 to change. So when you talk about execution, it's about response, 0:22:02.080 --> 0:22:05.320 and that response has to be well thought out, and 0:22:05.359 --> 0:22:08.800 the company needs to be unified around a common objective. 0:22:09.200 --> 0:22:11.560 And then everybody needs to be part of the same team. 0:22:11.560 --> 0:22:14.280 And you've got a military feel to this with General Jacoba. 0:22:14.400 --> 0:22:19.720 You end the book with the leadership at Normandy and 0:22:19.920 --> 0:22:25.199 what it took to create organization at that hillacious moment. 0:22:26.119 --> 0:22:29.760 That's not the drama of corporate America, but the reality 0:22:29.800 --> 0:22:34.320 of corporate America's everybody talks to talk, but nobody does 0:22:34.359 --> 0:22:37.000 the doing, which you're acclaimed for. How do you get 0:22:37.080 --> 0:22:42.440 from the talk to the doing in agility and leadership, Well, 0:22:42.480 --> 0:22:46.000 amazingly enough, Invasion of Normandy was the combination of both 0:22:46.000 --> 0:22:49.080 strategic and tactical agility because by the time the D 0:22:49.200 --> 0:22:52.600 day came around, there were many years of preparation and 0:22:52.720 --> 0:22:56.359 planning in vision. So first part of it belongs to 0:22:56.480 --> 0:23:00.040 executives and boards of directors. What is your vision of 0:23:00.160 --> 0:23:03.320 this environment, what is your planning for this environment? And 0:23:03.359 --> 0:23:06.320 then when the execution comes, you need to make sure 0:23:06.440 --> 0:23:10.720 that your entire organization is empowered, that they unified around 0:23:10.760 --> 0:23:14.280 the same purpose and they're all growing in the same direction. 0:23:14.760 --> 0:23:18.680 So Normandy is one of the most unbelievable examples where 0:23:18.760 --> 0:23:23.399 that combination strategic agility, strategic top down planning and vision 0:23:23.720 --> 0:23:27.720 come together with decentralized execution. So there are there certain 0:23:27.920 --> 0:23:32.520 industries that lend themselves to being agile versus maybe not 0:23:32.680 --> 0:23:36.760 so agile. Well, look, we wrote the book that is 0:23:36.760 --> 0:23:40.879 applicable to any organization. We truly believe that this combination 0:23:40.920 --> 0:23:45.320 of strategic and tactical agility must be practiced in adapted 0:23:45.600 --> 0:23:48.760 at any organization that wants to thrive or even survive 0:23:49.240 --> 0:23:53.480 in this environment. Now, different components of it applied to 0:23:53.520 --> 0:23:57.800 different organizations. For instance, for smaller entrepreneurial companies, it's the 0:23:57.920 --> 0:24:01.640 strategic agility that matters most. Is their ability to detect 0:24:01.720 --> 0:24:05.280 what's going on the environment and quickly change. But for 0:24:05.480 --> 0:24:09.840