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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along

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Speaker 2: with Paul Sweeney. Join us each day for insight from

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Speaker 2: the best in economics, finance, investment, and international relations. You

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Speaker 2: can also watch the show live on YouTube. Visit the

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Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday

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Speaker 2: mornings from seven to ten am Eastern from our global

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Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify,

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Speaker 2: or anywhere else you listen. And always I'm Bloomberg Radio,

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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. Richard Clarita

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Speaker 2: comes back for more this morning. Thank you so much

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Speaker 2: for joining Bloomberg this morning.

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Speaker 3: As always, thanks for having me.

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Speaker 2: What changed yesterday? The fact that I understand there's some

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Speaker 2: geopolitical yield going on there is well, but we had

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Speaker 2: fixed income up yield down equities to the moon. What

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Speaker 2: was the FED signaling that gave markets confidence?

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Speaker 4: I think a couple things.

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Speaker 3: First of all, one could argue that, if anything, the

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Speaker 3: FMC statement itself maybe was a little bit less dubbish

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Speaker 3: than folks might have thought. But yet again, the press conference,

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Speaker 3: I think a fair reading of the press conference was

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Speaker 3: that it skewed a bit dubbish. Now, again, the moving

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Speaker 3: prices was quite small. The September cut was fully priced

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Speaker 3: in before the meeting, it's fully priced in after the meeting.

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Speaker 3: But this is a committee that cares about both sides.

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Speaker 4: Of the dual mandate.

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Speaker 3: They've made that clear now in the statement, and they

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Speaker 3: also made clear they're getting increasing confidence that inflation's on

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Speaker 3: a path to two. And finally that they actually discussed

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Speaker 3: at the meeting yesterday cutting rates at the meeting yesterday.

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Speaker 3: So all in, I think that's what the markets were

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Speaker 3: reacting to.

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Speaker 5: Tom Richard, there are folks in academia and in practice

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Speaker 5: in the marketplace that feel like the FED is already

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Speaker 5: behind the curve, that the real time data suggests that

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Speaker 5: the economy really is slowing, and by the time they

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Speaker 5: get cutting rates it may be too late. How do

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Speaker 5: you respond to that?

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Speaker 3: Well, good question, because I think that is a risk

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Speaker 3: they have been willing to take for a couple of years. Indeed,

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Speaker 3: Chirpal made that very clear of Jackson Hole in twenty

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Speaker 3: twenty two. As inflation has moved towards target from above,

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Speaker 3: they've increasingly and yesterday in the statement indicated that they

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Speaker 3: now are looking at both sides of the dual mandate.

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Speaker 4: That said, I agree with them.

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Speaker 3: I think the data coming in are certainly consistent with

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Speaker 3: an economy operating at or perhaps a bit above trend.

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Speaker 3: So I don't think they're in a danger zone here

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Speaker 3: of falling behind the curve. Moreover, they've made very clear

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Speaker 3: that if they do see any softening in the labor market,

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Speaker 3: looks like they won't hesitate to start cutting. So there's

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Speaker 3: risk management here. Agree, But I think I think think

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Speaker 3: they're in a good place.

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Speaker 2: You under sell this, you know, you got to get

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Speaker 2: some pr Richard. Basically, Richard Clarita made modern Columbia economics.

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Speaker 2: He took the heritage of a guy named Stiglitz, a

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Speaker 2: heritage of a guy named Phelps. There was some guy

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Speaker 2: doing fancy math at Princeton. He said, come on up

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Speaker 2: to Columbia, and what's amazing about this? Did you even

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Speaker 2: teach microeconomics at Colombia? Is still like Pierre Andre Chapori,

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Speaker 2: I mean, you got Mike, Well, how does microeconomics fit

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Speaker 2: in it Columbia? Unlike the madness at Chicago.

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Speaker 3: Well, I work in some micro in my classes. I

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Speaker 3: think it's best for all concern that I stick to

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Speaker 3: the stick to the macri. He also mentioned Bob Mundell,

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Speaker 3: who passed away not too long ago, a dear friend

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Speaker 3: and colleague. So at one point I think we had

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Speaker 3: four Nobel Laureates on the faculties.

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Speaker 2: So yeah, let's bring in our Nobel lawyate. Animong with

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Speaker 2: a question for the former vice chairman, Anamog of Chicago

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Speaker 2: in Bloomberg Economics.

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Speaker 1: Yeah, Richie mentioned that this committee is one that's very

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Speaker 1: focused on both sides of the mandate. And do you

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Speaker 1: think that going forward, you know, suppose that we do

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Speaker 1: have the Trump number two administration with what's happening with

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Speaker 1: the potentially higher tariffs, would that factor in into the

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Speaker 1: committee's September meeting deliberations or even November deliberations. Should they

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Speaker 1: turn preemptive?

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Speaker 2: Should we just leave the studio right exactly? That was

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Speaker 2: a totally unfair question. Rich Well.

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Speaker 3: First of all, An, as you know, I'm a big,

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Speaker 3: big fan of your work, So keep up the good work.

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Speaker 3: I think Jay Powell made it very clear yesterday he

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Speaker 3: got a couple of questions and he said, look, we're

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Speaker 3: going to base policy on achieving our mandate. I think

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Speaker 3: he mentioned he'd been at the FED for now four

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Speaker 3: presidential election cycles, so I don't think it will be

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Speaker 3: a factor. And I'm actually glad they clarify that because

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Speaker 3: there had been some meme in the markets that the

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Speaker 3: pal Fed might hold off doing anything to see how

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Speaker 3: the election turned out and that, and I think clearly

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Speaker 3: he set that aside.

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Speaker 2: And this was really something his voice changed. I'm sorry

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Speaker 2: this happens like man Q when he was at the

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Speaker 2: White House. Up you get upset, and all of a

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Speaker 2: sudden he go into Harvard lecture form when he got upset.

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Speaker 2: Bernanke used to do the same thing, And I asked

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Speaker 2: another question to make us look puny.

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Speaker 1: Yes, I want to push on that a little bit.

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Speaker 2: Rich.

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Speaker 1: You were there during the Trump first Trade War as

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Speaker 1: it was. I you understand you were brieved about the

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Speaker 1: inflationary impact of the first Trade War, and you probably

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Speaker 1: remember that the briefing was tilting toward saying that the

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Speaker 1: terrorists were inflationary, which didn't turn out to be. And

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Speaker 1: right now, the mainstream economy is Wall Street economis are

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Speaker 1: uniformally saying that it will be very inflationary. Again, what's

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Speaker 1: your thought on that, Well, there are.

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Speaker 4: A couple of things.

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Speaker 3: First, if anything, during my time at the FED before

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Speaker 3: the pandemic, inflation is running a little bit low. The

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Speaker 3: main thing that emerged at that point in twenty nineteen

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Speaker 3: was that the trade war. Concerns about the trade war

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Speaker 3: were very negative on economic activity and sentiment. I do

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Speaker 3: think the details will be important. I think that in particular,

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Speaker 3: there'd be an inclination depending on how there were structured,

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Speaker 3: if there were tariffs, to try to distinguish between if

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Speaker 3: it's moving up the price level like a value added tax,

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Speaker 3: whereas its inflationary. But I think the key thing for

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Speaker 3: your listeners to bear in mind is that's a decision

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Speaker 3: the Paler FED does not have to make now. They

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Speaker 3: made it very clear twenty twenty four rate decisions are

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Speaker 3: based on twenty twenty four data and outlook, they'll have

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Speaker 3: plenty of time to reassess and think about this as

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Speaker 3: they go into twenty twenty five. So good question, but

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Speaker 3: I don't think it will be a factor now.

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Speaker 6: You defended William McChesney. Martin Paul. One more question in

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Speaker 6: this section with rich clarity.

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Speaker 5: All right, let's assume the FED starts cutting in September.

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Speaker 5: Then what how do they prosecute this policy to get

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Speaker 5: rates down? Is that every other meeting?

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Speaker 2: Does that work well?

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Speaker 3: The TRIAD answers, it's data dependent, but I think they've

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Speaker 3: acknowledged that if they cut once, they will be thinking

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Speaker 3: there's more than one cut. We'll get good information on

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Speaker 3: that in the projections. We'll get another set of projections

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Speaker 3: in December. Here's what I think. I think they're basically

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Speaker 3: a couple scenarios. One is a very very soft landing,

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Speaker 3: you know, in the spirit of the Olympics, sticking the

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Speaker 3: soft landing. In that case, the econmomyist chugs along trend,

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Speaker 3: unemployment doesn't go up, inflation moves gradually down to two,

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Speaker 3: and then they can gradually cut rates as inflation falls.

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Speaker 7: You know.

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Speaker 3: Another scenarios the economy slows more sharply, and then I

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Speaker 3: think they can cut more rapidly. I do think the

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Speaker 3: bar right now is pretty high to hike rates, and

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Speaker 3: so I think if the economy gets stuck at inflation

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Speaker 3: at current levels, they they may not cut very many

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Speaker 3: times and keep rates at an elevated level. But importantly,

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Speaker 3: it could depend on the outcome of the election. But again,

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Speaker 3: that won't We won't know how that plays out until

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Speaker 3: twenty twenty five.

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Speaker 2: So Richard Clarin stay with us. You got so much

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Speaker 2: to talk about it. I'm going to look it up

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Speaker 2: right now. You can do this on the Bloomberg Professional Service,

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Speaker 2: the FOMC meetings. Paul there, it is January twenty ninth,

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Speaker 2: after the inauguration.

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Speaker 6: That'll be the meeting.

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Speaker 2: Put it on your calendar, Doctor Clarida, we're going to

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Speaker 2: have you back there January at twenty nine. Annawong, thank

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Speaker 2: you so much for joining us with Bloomberg Economics. Important questions,

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Speaker 2: tough questions on politics. She can answer them. You know,

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Speaker 2: we can't answer Wed questions. That's what I want. Yeah,

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Speaker 2: it's different. It's there's a different oxygen out there. What

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Speaker 2: a joint of Ana Wong with us from Chicago and

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Speaker 2: Bloomberg Economics. And we continue with the former vice Chairman

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Speaker 2: of the Federal Reserve System Richard Clarida. This morning, Richard,

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Speaker 2: you and I could turn this into a three hour

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Speaker 2: love fest. We don't have the time to do that,

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Speaker 2: so I'm just going to cut to the chase. I

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Speaker 2: was busting Annawan's chops about Frank Knight nineteen twenty one,

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Speaker 2: one hundred and thirty four pages. It's right of passage,

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Speaker 2: and it's where we really began to think in the

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Speaker 2: modern era of the unknown unknowns, the idea of what's

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Speaker 2: the mystery that's out there. We have a pandemic overlay

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Speaker 2: we're coming out of.

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Speaker 7: We have an.

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Speaker 2: Immigration dynamic we don't understand on the edge of Angus Deeton.

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Speaker 2: There's too many mysteries out of productivity. Yeah, there is

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Speaker 2: a mystery we have. What is Richard Claared isnwn unknown

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Speaker 2: If you were to sit down with the chairman this.

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Speaker 3: Morning, well that those three would certainly be on Those

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Speaker 3: three would certainly be on the list. I think that

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Speaker 3: an additional known unknown is the global fiscal outlook is terrible.

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Speaker 3: You know, twenty years ago, debt to GDP ratio was

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Speaker 3: forty percent.

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Speaker 4: It's north of one hundred now.

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Speaker 3: Debt service cost to exceed the defense budget in the US,

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Speaker 3: and so everyone acknowledges that global fiscal paths are unsustainable,

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Speaker 3: but there's no political will. So I think I think

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Speaker 3: that the known unknown is when and what brings about

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Speaker 3: the ultimate adjustment in fiscal policy, because it will happen eventually.

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Speaker 3: I don't know if it's next year, in ten years,

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Speaker 3: but I think, to me, that's the known unknown.

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Speaker 5: And you know, I'm of a certain vintage. I've heard

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Speaker 5: that my entire life. Yeah, we've had this little sharp

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Speaker 5: down in Lower Manhattan that ticks up the debt. I

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Speaker 5: remember that as a kid driving the piece, you know,

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Speaker 5: the east side, And when where will we see that?

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Speaker 5: The concerns about global debt.

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Speaker 3: So excellent point because why has it fallen? Why have

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Speaker 3: the bond market vigilant has been in hibernation. Some would

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Speaker 3: say they're extinct. And the simplest answer is because global

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Speaker 3: interest rates have fallen by more than debt has gone up.

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Speaker 3: So until recently it seemed like a free lunch to

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Speaker 3: politicians borrow. But your debt service costs go down because interest.

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Speaker 4: Rates are falling.

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Speaker 3: And so the point is, going forward, interest rates are

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Speaker 3: not going to be as low as they were in

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Speaker 3: the prior twenty years, and so the cast of that

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Speaker 3: debt service will be more evident, and so at some

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Speaker 3: point that will drive a political outcome.

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Speaker 4: But I do agree with you.

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Speaker 3: The can has been kicked down the road for a

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Speaker 3: long time and it may be a while.

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Speaker 4: But to me that's a non unknown.

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Speaker 6: And what is the fix?

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Speaker 5: Ultimately from an economic.

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Speaker 3: Physics, it depends on the country. But the usual if

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Speaker 3: your deficits are too large and your debt service costs

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Speaker 3: are too high, there's going to be some combination of

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Speaker 3: adjustments on revenues and adjustments on alays.

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Speaker 4: But neither party is running on.

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Speaker 3: A platform to address that, and so I think it

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Speaker 3: will not be It will not really be an issue

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Speaker 3: in the campaign way.

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Speaker 2: Lee was with this last hour stunning us with a

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Speaker 2: potential three handle on China GDP growth. I want to

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Speaker 2: go to a guy named Stiglitz who way back at

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Speaker 2: Stanford started to think about the little G of the

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Speaker 2: growth rate. Olivia, Blanchard and Stiglets have really focused on

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Speaker 2: the fact the global little G growth rate is better

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Speaker 2: than good to sustain our fiscal policy. Do you suggest

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Speaker 2: that we could see a diminished global growth rate that

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Speaker 2: finally upsets the apple cart?

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Speaker 3: It could be growth, or it could happen through the

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Speaker 3: interest rate channel. Remember Olivier's famous equation is it's about

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Speaker 3: R minus G, and so if G.

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Speaker 4: Falls or R goes up.

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Speaker 2: Can you figure Can you call Stockholm after the show

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Speaker 2: and say, can we get a shingle out for Blenchard

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Speaker 2: on our minus G.

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Speaker 6: Give it to Williams as well.

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Speaker 3: Okay, exactly, So what do we do when we have

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Speaker 3: two small G on our minus well exactly. And so

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Speaker 3: if you have too small a G, then it brings

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Speaker 3: forward the day of reckoning on fiscal adjustment.

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Speaker 4: I'll just leave it at that.

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Speaker 2: Okay, being careful, but this is real because Italy there

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Speaker 2: was a you know, with their demographics, it was like overdone.

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Speaker 2: Small g's done, and with the revolution of their politics,

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Speaker 2: they've got actually very good G. Because you're spending money

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Speaker 2: in that little quarter in Venice, buying.

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Speaker 6: Lots of stuff.

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Speaker 2: Little G matters in Italy.

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Speaker 5: How about in China though, I yeah, how big of

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Speaker 5: a concern is that for the global economy? Because I'll

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Speaker 5: look at too, something like their population. I mean, it's

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Speaker 5: just aging, and it's aging at a much higher rate

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Speaker 5: than a lot of other Yeah, populations. I don't see

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Speaker 5: that changing. So what does that mean for global growth?

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Speaker 3: Well, obviously China's global growth has been slowing.

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Speaker 4: We all remember when the number.

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Speaker 3: Was seven or eight, then it was five or six,

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Speaker 3: and now it's four or five. So now it's very

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Speaker 3: big economy. So four and a half percent growth in

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Speaker 3: China is still a big part of the global outlook.

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Speaker 3: I think the real difference, though, compared to the past

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Speaker 3: twenty years, is the way in which the Chinese economy

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Speaker 3: interacts with the rest of the global economy. Commodity prizes activity,

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Speaker 3: you know. I think everyone agrees the big era of

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Speaker 3: global hyper globalization is over, and so the way in

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Speaker 3: which Chinese growth drives the rest of the economy I

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Speaker 3: think is changing. And it's actually something we're looking at

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Speaker 3: closely at PIMCO.

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Speaker 6: We mentioned this yesterday. I busted your chops as Lawrence

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Speaker 6: Meyer PAULI wrote.

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Speaker 2: A little small book about the green Span fed where

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Speaker 2: it was Alan green Span and everybody follow I'm sorry,

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Speaker 2: q Pill, Jonathan.

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Speaker 6: Began Green And there's that troublemaker.

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Speaker 2: Catherine Mann descent.

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Speaker 3: To you, Pill is the chief economists.

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Speaker 6: He's went against a governor. Why can't you fed?

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Speaker 2: He as normal in Cuman as Catherine Mann's Bank of England.

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Speaker 3: Well, I will say that the Bank of England is

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Speaker 3: certainly beginning with my good friend and mentor Mervyn King

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Speaker 3: thirty plus years ago.

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Speaker 4: It was a point of.

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Speaker 3: Pride that their culture did not discourage dissense. And indeed,

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Speaker 3: I think it was one or two meetings when Mervyn

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Speaker 3: was outvoted.

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Speaker 4: In this case it was five to four.

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Speaker 3: But when the chief economist votes, it definitely gets the

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Speaker 3: it gets the headline. Sure, there are descents at the

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Speaker 3: FED during my time, we had several meetings where there

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Speaker 3: were three descents. But it is the case that in

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Speaker 3: the post green spanning and era that you refer to,

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Speaker 3: or green span and then post green Span, descents among

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Speaker 3: governors have been pretty rare on monetary policy. And that

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Speaker 3: that's an entire another show we could.

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Speaker 4: I won't spend time.

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Speaker 3: Talking about why that is. You may come back tomorrow, Okay, Well, okay, Rich.

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Speaker 2: Clarida, thank you so much for John Fair, Lisa brown Winson,

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Speaker 2: myself yesterday that decides, for Paul Sweeney and all. This

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Speaker 2: has just been very generous of you at this key

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Speaker 2: time for our monetary policy.

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Speaker 6: What are they going to do at the next meeting.

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Speaker 3: They're gonna they're gonna cut raids.

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Speaker 6: There you go, that's all we know. We'll leave it there. Eric,

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Speaker 6: be sure that gets a single best idea.

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Speaker 2: Rich Clarida of Pimcal of Columbia an extended conversation with WAYE.

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Speaker 6: Lee of Black Right.

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Speaker 2: Well, let's just start with the why why do we

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Speaker 2: see price up, yield down.

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Speaker 8: Well?

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Speaker 7: From the FED meeting yesterday. I think September is pretty

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Speaker 7: much a down deal. The bar for not cutting is

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Speaker 7: very high, so I think that's what markets got excited.

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Speaker 7: But importantly, the way that JPAW framed the reasons for

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Speaker 7: September cut is also why markets are happy with yesterday's meeting.

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Speaker 7: He characterized what's happening in labor market as normalization rather

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Speaker 7: than labor market weakening. And what is going to lead

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Speaker 7: to a September cut that is looking very likely. It's

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Speaker 7: more around better behaving inflation rather than weaker labor markets.

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Speaker 7: So I think that's a good combination for risk asses and.

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Speaker 2: A y access. It's lord rhythmic. You end up looking

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Speaker 2: in a curve is convexity? Is there literally a short

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Speaker 2: cover in bonds now? Is there literally an equity like

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Speaker 2: short cover where everybody goes OMG, yields are going lower?

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Speaker 7: Well, if you look at the hedge fund positioning, absolutely

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Speaker 7: a lot of the speculative positions went from short bonds

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Speaker 7: to long bounds. But I would observe that front end

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Speaker 7: of the curve has done better than the back end

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Speaker 7: of the curve, so mainly in response to kind of

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Speaker 7: markets pricing in more cuts. But our concern for the

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Speaker 7: back end of the curve, especially over a longer tem horizon,

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Speaker 7: still stays, which is a higher fiscal trajectory, higher m

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Speaker 7: premier which currently is still in the negative territory.

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Speaker 5: You know, you've got a great note out here, your

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Speaker 5: weekly note, Wayley, and I'm looking at your assets and review.

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Speaker 2: You know, one of the best.

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Speaker 5: Performers is gold here.

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Speaker 6: What do you make of that?

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Speaker 7: Well, I think if you look at what's been working

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Speaker 7: so far this year as a diversifier, is not your

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Speaker 7: go to good old duration in a portfolio, but rather

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Speaker 7: some of the other assets such as such as gold.

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Speaker 7: And on top of that, the negative correlation between gold

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Speaker 7: and real rate has helped there as well. Now having

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Speaker 7: said that, it's really hard to kind of think about

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Speaker 7: gold in the context of a longer term portfolio construction

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Speaker 7: simply because there's no cash flow to discount futer cash flow.

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Speaker 7: With now having said that, there is a case to

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Speaker 7: be made to allocate to gold in portfolio because of

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Speaker 7: the characteristics that it has exhibited as you observed as well.

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Speaker 5: So you know the central banks are certainly in focus

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Speaker 5: yesterday with the Fed today with the Bank of England

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Speaker 5: cutting interest rates. Traders believe that there'll be another rate

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Speaker 5: cut in November. What do you make of the Bank

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Speaker 5: of England?

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Speaker 7: Well, Bank of England is very interesting, right, so hasline

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Speaker 7: inflation is already at targets, but col inflation service inflation

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Speaker 7: is still somewhat sticky. You can talk about some of

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Speaker 7: the tailor swift effect and labor market a wage as well,

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Speaker 7: but broadly we see better behaving inflation and I think

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Speaker 7: that's what gave the Bank of England comfort to cut rates.

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Speaker 7: We think that there is more room for them to

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Speaker 7: cut than the fat because of a structurally weaker growth outlook,

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Speaker 7: which is why we prefer guilts over treasuries.

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Speaker 2: Right, welly, we want you to come back for the

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Speaker 2: next segment. I really want to focus on Asia and

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Speaker 2: China with your immense skill and heritage there.

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Speaker 6: But I got to asked the question.

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Speaker 2: You stumbled into it, and I hope that your badge

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Speaker 2: works at black Rock.

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Speaker 6: This morning you mentioned gold without cash flows. That reminds

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Speaker 6: me of bitcoin.

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Speaker 2: Is bitcoin developing as a gold equivalent.

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Speaker 7: Well, what we have seen is that it has the

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Speaker 7: ability to demonstrate a huge price appreciation but also depreciation, right,

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Speaker 7: so basically a lot of volatility. So I think a

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Speaker 7: case can be made, A tactical case can be made

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Speaker 7: for bitcoin from a speculative kind of perspective, not unlike

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Speaker 7: venture cap capital type of investment. But again, it's really

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Speaker 7: hard to think about kind of the longer term allocation

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Speaker 7: because there's no future cash flowing.

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Speaker 6: There's no future care.

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Speaker 2: I don't know how she gets launched Blackrock with because

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Speaker 2: they're likely first in the easiest I bust in your chaps, Wally,

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Speaker 2: I'm sorry, welly, what's the character of this ballmarket we have?

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Speaker 2: The rebound in video is gone from a one oh

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Speaker 2: four to a one twenty three.

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Speaker 6: Is this an AI celebration.

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Speaker 7: Well, let's not forget the AI nervousness that characterized the

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Speaker 7: fuel trading days before Yesterday. Is meaningful rebound. So I

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Speaker 7: think what we're experiencing right now is the code feet

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Speaker 7: that we're now used to before PEG companies reporting earnings.

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Speaker 7: This is the sixth quarter of chat GPT error and

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Speaker 7: every quarter they come in, they beat, and markets kind

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Speaker 7: of get reassured. Similar to April, market's got nervous, and

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Speaker 7: then the earnings were okay, and then we continue to

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Speaker 7: go from strength to strength. I think this is what

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Speaker 7: we're seeing right now. In Vidia is not reporting until

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Speaker 7: end of August, so I think there is still a

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Speaker 7: lot of anxiety, but excitement as well.

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Speaker 2: Can the tenure yield go under four percent? And how

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Speaker 2: does our world change with a three ninety eight ten

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Speaker 2: year yield?

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Speaker 7: Well, I think four percent three ninety eight these are

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Speaker 7: psychologically important levels. But we're talking about not far from

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Speaker 7: where we are right So given how volatile rates have been,

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Speaker 7: I think it's possible that you can break four percent,

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Speaker 7: especially given the pricing momentum. But I think the big

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Speaker 7: picture here is important, which is number one, rates have

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Speaker 7: been very volatile. Markets have been swinging from one narrative

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Speaker 7: to the other narrative in very quick succession. So I

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Speaker 7: think expect volosildia number two. Once we look through that

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Speaker 7: VOLATILIZI still're talking about higher than three pandemic rate levels

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Speaker 7: because of structurally inflationary forces. Let's not forget that.

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Speaker 2: With this Waley of black Rock, and of course with

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Speaker 2: all of her heritage from China, her ability to win

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Speaker 2: their most prestigious mathematics event two years in a row. Extraordinary,

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Speaker 2: thrilled she could join us.

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Speaker 6: Today, Wally.

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Speaker 2: In twenty fifteen, I walked down the stairs at the

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Speaker 2: Metropolitan Museum of Art and they're in a phenomenal a show.

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Speaker 2: China through the looking Glass was one of the few

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Speaker 2: extent nineteen sixties Chinese military uniforms. I guess they're extremely rare,

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Speaker 2: and it was from a China from another time and place.

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Speaker 2: There's talk that President g wants to take elements of

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Speaker 2: the malpast and drag it forward. Do you see that

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Speaker 2: in any way that after the Planum, China wants to

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Speaker 2: revert to a sixties or dare I say a fifties model?

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Speaker 8: Tom.

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Speaker 7: It doesn't take a math olympiads to see that growth

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Speaker 7: in China is slowing down, right, You look at the

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Speaker 7: latest Taichien PMI print that decreased versus the previous print

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Speaker 7: following disappointing Q two growth number. To your point, Plannont

441
00:23:40,720 --> 00:23:45,560
Speaker 7: came and went, State Council came and went, and Politburo

442
00:23:46,160 --> 00:23:49,959
Speaker 7: came and went, and they all paint a similar picture,

443
00:23:50,440 --> 00:23:55,000
Speaker 7: which is that they would support growth in a kind

444
00:23:55,000 --> 00:24:00,639
Speaker 7: of bite size fashion, including surprise Raycots, but we're not

445
00:24:00,920 --> 00:24:04,760
Speaker 7: talking about big Badjuka. So yes, we're looking at maybe

446
00:24:04,760 --> 00:24:08,439
Speaker 7: around five percent growth for this year, which is their targets.

447
00:24:08,520 --> 00:24:11,600
Speaker 7: But there is a huge amount of focus around median

448
00:24:11,760 --> 00:24:16,560
Speaker 7: term reform and that is a tradeoff median term progress

449
00:24:16,640 --> 00:24:19,520
Speaker 7: versus the near term, near term growth, which is why

450
00:24:19,520 --> 00:24:24,320
Speaker 7: we have a neutral allocation despite the appealing valuation opportunities

451
00:24:24,359 --> 00:24:24,840
Speaker 7: in China.

452
00:24:24,960 --> 00:24:27,560
Speaker 2: From where you said and the experts of Blackrock, I

453
00:24:27,600 --> 00:24:29,840
Speaker 2: just don't want to put this on you, but do

454
00:24:29,960 --> 00:24:33,320
Speaker 2: you see them going back to the standard formula of

455
00:24:33,480 --> 00:24:40,919
Speaker 2: state enterprises, is being the solution manufacturing industrial production or

456
00:24:40,920 --> 00:24:45,400
Speaker 2: can they actually jump start and make permanent a consumer revolution.

457
00:24:46,800 --> 00:24:50,720
Speaker 7: Well, consumer savings rate is one of the reasons why

458
00:24:50,840 --> 00:24:53,919
Speaker 7: they need to support Nearton growth because coming out of

459
00:24:53,960 --> 00:24:59,720
Speaker 7: the pandemic, consumers have not really boosted growth the way

460
00:24:59,760 --> 00:25:03,560
Speaker 7: that US consumers have and European consumers have. And this

461
00:25:03,720 --> 00:25:07,400
Speaker 7: is really in the context of high youth employment rate,

462
00:25:07,480 --> 00:25:10,320
Speaker 7: in the context of aging population, in the context of

463
00:25:10,440 --> 00:25:15,520
Speaker 7: still lingering deflationary fears, So consumers are not really kind

464
00:25:15,560 --> 00:25:18,320
Speaker 7: of picking up the battle, so to speak. And we

465
00:25:18,440 --> 00:25:22,720
Speaker 7: have seen manufacturing inside of things having to do more

466
00:25:22,920 --> 00:25:26,240
Speaker 7: heavy lifting. So indeed, I think we need to really

467
00:25:26,320 --> 00:25:30,600
Speaker 7: kind of think about how far consumers can support the economy.

468
00:25:30,640 --> 00:25:33,200
Speaker 7: And this is also why over the longer term, we're

469
00:25:33,200 --> 00:25:35,639
Speaker 7: looking at Chinese growth with a three handle by the

470
00:25:35,720 --> 00:25:38,800
Speaker 7: end of the decade because of the structural Stile is

471
00:25:38,880 --> 00:25:39,399
Speaker 7: talking about.

472
00:25:39,840 --> 00:25:43,760
Speaker 5: So, you know, it seems like their policy here of

473
00:25:43,960 --> 00:25:47,840
Speaker 5: isolating themselves, whether it's from a technology perspective or just

474
00:25:47,880 --> 00:25:51,520
Speaker 5: an overall economic perspective, whether it be in the context

475
00:25:51,600 --> 00:25:55,240
Speaker 5: of US tariffs, European tariffs, I just don't see how

476
00:25:55,240 --> 00:25:58,920
Speaker 5: the Chinese government feels like that is a viable long

477
00:25:59,000 --> 00:26:02,199
Speaker 5: term strategy. It would seem like they would want to

478
00:26:02,280 --> 00:26:06,560
Speaker 5: integrate with the global economy, not isolate themselves. Is that

479
00:26:06,600 --> 00:26:07,680
Speaker 5: part of your neutral call?

480
00:26:09,040 --> 00:26:12,760
Speaker 7: This is actually one of our mega forces that black

481
00:26:12,840 --> 00:26:19,760
Speaker 7: Rock has identified. Geopolitical fragmentation. Isolationist policies are possible, not

482
00:26:19,840 --> 00:26:22,720
Speaker 7: just in China, but you look at what's happening globally,

483
00:26:22,720 --> 00:26:25,320
Speaker 7: you look at what could happen in the US as well,

484
00:26:25,400 --> 00:26:28,240
Speaker 7: And this is why we're looking at an environment where

485
00:26:28,560 --> 00:26:34,040
Speaker 7: spheres of influences are moving further apart. The fragmentation of

486
00:26:34,200 --> 00:26:38,680
Speaker 7: supply chains creating inflationary pressure. This is also why, even

487
00:26:38,720 --> 00:26:41,680
Speaker 7: though we have had the last quarter of inflation better

488
00:26:41,720 --> 00:26:45,040
Speaker 7: behaving downside surprises, we think inflation is likely going to

489
00:26:45,400 --> 00:26:48,560
Speaker 7: actually settle at a higher level compared to before because

490
00:26:48,560 --> 00:26:53,760
Speaker 7: of frictions coming from isolationism, coming from the fragmentation of

491
00:26:53,880 --> 00:26:58,800
Speaker 7: supply chain, duplication of supply chain. So really, inflation protecting

492
00:26:59,040 --> 00:27:03,120
Speaker 7: portfolios is what we're thinking about for strategic as allocation.

493
00:27:03,600 --> 00:27:06,199
Speaker 2: Again, really, and not depend just on you, but the

494
00:27:06,240 --> 00:27:08,760
Speaker 2: greatest thinkers at Blackrock globally, and I know you've got

495
00:27:08,800 --> 00:27:12,400
Speaker 2: a huge Asian presence. You just set a three handle

496
00:27:13,080 --> 00:27:16,920
Speaker 2: on a run rate of China growth. I believe what

497
00:27:17,000 --> 00:27:21,000
Speaker 2: does that do to Vietnam? Frankly, what does that do

498
00:27:21,119 --> 00:27:26,400
Speaker 2: to Japan? That's an entirely new Asian regime, isn't it.

499
00:27:27,560 --> 00:27:31,840
Speaker 7: Well, what we have seen is whilst the experts from

500
00:27:32,080 --> 00:27:36,520
Speaker 7: exports from China to the US has decreased, the export

501
00:27:36,600 --> 00:27:41,320
Speaker 7: from Mexico, for example, to the US have overtaken that

502
00:27:41,520 --> 00:27:45,679
Speaker 7: from China. So I think there is a restructuring of

503
00:27:46,280 --> 00:27:50,840
Speaker 7: supply chain and trade relationships. Day is happening. It takes time,

504
00:27:51,119 --> 00:27:56,040
Speaker 7: but it is happening. So likes of Vnam you talked about,

505
00:27:56,080 --> 00:27:59,960
Speaker 7: but India and also Middle East and Mexico for them

506
00:28:00,080 --> 00:28:04,159
Speaker 7: matter are likely going to benefits as we think about

507
00:28:04,280 --> 00:28:10,320
Speaker 7: this fragmentation of the geopolitical relationships and a fragmentation of

508
00:28:10,400 --> 00:28:13,960
Speaker 7: supply chains, but elevating on a higher level, So that's

509
00:28:14,000 --> 00:28:17,479
Speaker 7: one of the mega forces. Other mega forces like aging

510
00:28:17,560 --> 00:28:21,359
Speaker 7: population also benefits these countries that I just talked about.

511
00:28:21,440 --> 00:28:25,320
Speaker 7: So really think about international diversification as we think about

512
00:28:25,320 --> 00:28:28,359
Speaker 7: portfolio construction in the context of everything that we distached.

513
00:28:29,200 --> 00:28:32,120
Speaker 5: Willie, I seen you in the Blackrock research. You guys

514
00:28:32,119 --> 00:28:36,159
Speaker 5: are overweight Japan, and that's something I have heard in

515
00:28:36,200 --> 00:28:36,800
Speaker 5: a long time.

516
00:28:41,000 --> 00:28:45,440
Speaker 7: Yes, we have been overweighted Japan for quite a long

517
00:28:45,480 --> 00:28:50,680
Speaker 7: time now. We prefer Japanese equities over JGB Japanese government bondes.

518
00:28:51,400 --> 00:28:53,960
Speaker 7: What we have seen this week is Bank of Japan

519
00:28:55,280 --> 00:28:58,800
Speaker 7: indicating that they are likely going to move faster on

520
00:28:58,840 --> 00:29:01,920
Speaker 7: the path of normalzation. And this is important because the

521
00:29:02,000 --> 00:29:06,000
Speaker 7: destination hasn't changed. Is the speed off normalization that seems

522
00:29:06,000 --> 00:29:09,080
Speaker 7: to be faster. But my most important takeaway from the

523
00:29:09,080 --> 00:29:12,800
Speaker 7: BOJ this week is that the backstop is still in place.

524
00:29:13,080 --> 00:29:16,200
Speaker 7: If data does not give them comfort to move fast,

525
00:29:16,320 --> 00:29:19,400
Speaker 7: they would slow down. So as important as we think

526
00:29:19,400 --> 00:29:23,760
Speaker 7: about the Japan call, but certainly risks have increased because

527
00:29:23,800 --> 00:29:27,080
Speaker 7: of the faster pace of normalization. I would know though

528
00:29:27,600 --> 00:29:30,880
Speaker 7: US dollar Japanese applees is just one percent lower compared

529
00:29:30,920 --> 00:29:33,200
Speaker 7: to the peak, So we like Japan on a currency

530
00:29:33,200 --> 00:29:34,520
Speaker 7: hatched basis for that reason.

531
00:29:34,840 --> 00:29:37,600
Speaker 2: This has been wonderful Wayley, thank you so much, particularly

532
00:29:37,600 --> 00:29:45,800
Speaker 2: in the comments on China. Jumana Bratacci. We are thrilled

533
00:29:45,800 --> 00:29:49,200
Speaker 2: that she's in Dubai driving all of our Middle Eastern

534
00:29:49,240 --> 00:29:53,640
Speaker 2: coverage with the leadership of Horizon in her program there,

535
00:29:53,680 --> 00:29:57,360
Speaker 2: but far more the spirit of speaking to people across

536
00:29:57,440 --> 00:30:00,480
Speaker 2: the Middle East, and we speak now with Juma about

537
00:30:00,480 --> 00:30:06,840
Speaker 2: her Lebanon and about what we see in Israel and such. Jumana,

538
00:30:06,960 --> 00:30:10,040
Speaker 2: first of all, to your many many contexts in Lebanon,

539
00:30:10,440 --> 00:30:14,640
Speaker 2: the tension north of Israel right now, the tension in Lebanon,

540
00:30:14,960 --> 00:30:16,320
Speaker 2: give us a description of that.

541
00:30:18,720 --> 00:30:21,720
Speaker 9: It's difficult to describe. I guess my size speaks for itself,

542
00:30:21,760 --> 00:30:25,240
Speaker 9: but overall, tension is possibly the highest it has been

543
00:30:25,960 --> 00:30:28,719
Speaker 9: in the last couple of decades. This is an extremely

544
00:30:29,680 --> 00:30:32,640
Speaker 9: fraud moment for the Middle East, given the events over

545
00:30:32,680 --> 00:30:35,840
Speaker 9: the last couple of days and the various fronts that

546
00:30:35,880 --> 00:30:38,880
Speaker 9: are opening up, not just within Gaza, but of course

547
00:30:38,960 --> 00:30:42,680
Speaker 9: now you have a new potential active front in Lebanon

548
00:30:43,080 --> 00:30:47,240
Speaker 9: after the Beirut strike that took out the right hand

549
00:30:47,360 --> 00:30:49,520
Speaker 9: man of the Hesbalaalider a couple of days ago. You

550
00:30:49,600 --> 00:30:52,520
Speaker 9: have a potentially new front opening up in Iran after

551
00:30:52,640 --> 00:30:55,200
Speaker 9: the air strike in Tehran the same night as the

552
00:30:55,200 --> 00:30:57,400
Speaker 9: Beirut air strike. And then of course you have the

553
00:30:57,440 --> 00:31:00,440
Speaker 9: ongoing Houthy attacks on the vessels. It's not for about

554
00:31:00,480 --> 00:31:04,760
Speaker 9: those as well. So you've got multi dimensional hotspots opening

555
00:31:04,880 --> 00:31:08,560
Speaker 9: up around the region, and there is serious concern that

556
00:31:08,800 --> 00:31:13,040
Speaker 9: there is a potential slippage. One miscalculation could have this

557
00:31:13,120 --> 00:31:16,160
Speaker 9: thing really blow up and end up in a scenario

558
00:31:16,160 --> 00:31:17,520
Speaker 9: where all sides ends up regretting.

559
00:31:17,640 --> 00:31:21,120
Speaker 2: And you're reporting on horizon as you speak to Emarati

560
00:31:21,360 --> 00:31:25,520
Speaker 2: leadership and for that matter, Arab leadership of the Levant,

561
00:31:26,000 --> 00:31:28,960
Speaker 2: who are they supporting, who are they focused on here

562
00:31:29,360 --> 00:31:31,280
Speaker 2: among the various parties.

563
00:31:32,920 --> 00:31:36,880
Speaker 9: Interesting you raise that, tom because it's very nuanced depending

564
00:31:36,960 --> 00:31:38,880
Speaker 9: on which country you speak to in the region. Now,

565
00:31:38,920 --> 00:31:42,600
Speaker 9: don't forget that many of the Gulf countries actually did

566
00:31:42,680 --> 00:31:47,400
Speaker 9: sign and Abraham accords in a normalization agreement with Israel

567
00:31:47,520 --> 00:31:50,400
Speaker 9: back in twenty twenty that includes the UE, that includes Bahana,

568
00:31:50,440 --> 00:31:54,480
Speaker 9: also includes Morocco as well, So they've been treading very

569
00:31:54,520 --> 00:31:58,320
Speaker 9: carefully on the subject of the war in Gaza. Of course,

570
00:31:58,440 --> 00:32:01,600
Speaker 9: Saudi Arabia as well, I've been playing a very fine

571
00:32:01,600 --> 00:32:04,920
Speaker 9: line diplomatically because, as we've been reporting over the last

572
00:32:05,000 --> 00:32:07,840
Speaker 9: few months, they have been working very closely on a

573
00:32:07,880 --> 00:32:10,840
Speaker 9: normalization deal that would coincide with the defense deal with

574
00:32:10,880 --> 00:32:12,440
Speaker 9: the US as well, So they don't want to give

575
00:32:12,520 --> 00:32:14,680
Speaker 9: up on that. But what the Saudi has told us

576
00:32:14,800 --> 00:32:17,200
Speaker 9: is that essentially they can't push forward with the normalization

577
00:32:17,320 --> 00:32:20,000
Speaker 9: deal while there are still boots on the ground in Gaza.

578
00:32:20,400 --> 00:32:23,280
Speaker 9: Other countries, you look at the likes of Egypt and Kuttar,

579
00:32:23,440 --> 00:32:26,320
Speaker 9: while their role throughout all of this has been to

580
00:32:26,360 --> 00:32:28,560
Speaker 9: play the role of the mediator to push forward the

581
00:32:28,640 --> 00:32:30,800
Speaker 9: cs FAR discussions, and I thought it was really telling

582
00:32:30,880 --> 00:32:33,800
Speaker 9: yesterday that the Prime Minister of Kutar, who also serves

583
00:32:33,800 --> 00:32:36,240
Speaker 9: as their foreign minister, put out a tweet right after

584
00:32:36,600 --> 00:32:40,160
Speaker 9: the killing of Ismayhanie saying that it is very difficult

585
00:32:40,200 --> 00:32:43,320
Speaker 9: to push forward with these negotiations if one of the

586
00:32:43,480 --> 00:32:46,800
Speaker 9: sides of the negotiators has been assassinated. So I think

587
00:32:46,800 --> 00:32:49,400
Speaker 9: there's a lot of pessimism now about the future of

588
00:32:49,400 --> 00:32:50,040
Speaker 9: these cs FAR.

589
00:32:50,080 --> 00:32:52,800
Speaker 5: Talks and Dremono. You mentioned, you know, some of the

590
00:32:52,840 --> 00:32:55,800
Speaker 5: countries Asa Kutar that are trying to act as mediators,

591
00:32:55,840 --> 00:32:59,640
Speaker 5: but it appears at this point the Israel has had

592
00:32:59,680 --> 00:33:03,640
Speaker 5: no interest in pursuing peace or at this moment even

593
00:33:03,680 --> 00:33:07,320
Speaker 5: you know, thinking about their relations with the US. Is

594
00:33:07,320 --> 00:33:09,000
Speaker 5: that a concern in your part of the.

595
00:33:08,920 --> 00:33:12,360
Speaker 9: World, It's definitely a concern. I think there are many

596
00:33:12,360 --> 00:33:15,920
Speaker 9: analysts out there who are questioning the full faith of

597
00:33:16,280 --> 00:33:21,040
Speaker 9: the Israeli government to actually engage in these cease fire discussions.

598
00:33:21,360 --> 00:33:25,360
Speaker 9: We know that there have been several many diplomatic attempts

599
00:33:25,400 --> 00:33:28,320
Speaker 9: to push forward to the discussions. Even Sector of State

600
00:33:28,360 --> 00:33:32,400
Speaker 9: Anthony Blincoln has been in Asia this past week, and

601
00:33:32,480 --> 00:33:35,680
Speaker 9: he gave some comments in Malaysia overnight saying the path

602
00:33:35,760 --> 00:33:38,479
Speaker 9: that the region is on is towards more conflict. It

603
00:33:38,560 --> 00:33:40,520
Speaker 9: has to make the right choices in the day ahead,

604
00:33:40,520 --> 00:33:42,959
Speaker 9: because those choices are the difference between staying on this

605
00:33:43,000 --> 00:33:46,240
Speaker 9: path of violence, of insecurity of suffering, or moving on

606
00:33:46,280 --> 00:33:49,160
Speaker 9: to something very different and much better. So the US

607
00:33:49,200 --> 00:33:52,960
Speaker 9: are still trying very hard to push forward to these discussions. France,

608
00:33:53,440 --> 00:33:56,240
Speaker 9: Germany or other countries looking to get involved as well.

609
00:33:56,400 --> 00:33:59,920
Speaker 9: And the feedback from the qataris even though they're pessimistic,

610
00:34:00,480 --> 00:34:02,520
Speaker 9: they still want to push on. But the question, the

611
00:34:02,560 --> 00:34:05,320
Speaker 9: other question is who is going to be representing Hamas

612
00:34:05,360 --> 00:34:08,160
Speaker 9: because two of the most senior figures have been eliminated

613
00:34:08,239 --> 00:34:08,920
Speaker 9: in the last two days.

614
00:34:09,040 --> 00:34:11,000
Speaker 2: Jermin I got one minute left and I just want

615
00:34:11,040 --> 00:34:14,719
Speaker 2: to take advantage of your encyclopedic knowledge of Lebanon. I

616
00:34:14,760 --> 00:34:17,560
Speaker 2: get out a map like an ugly American, and I'm

617
00:34:17,600 --> 00:34:22,080
Speaker 2: shocked that Haifa is sixty seventy miles from Bayrout. The distance, folks,

618
00:34:22,080 --> 00:34:25,920
Speaker 2: are so short. How far do you perceive that Israel

619
00:34:25,960 --> 00:34:30,640
Speaker 2: would move north across the Lebanese border? Is it one

620
00:34:30,719 --> 00:34:34,200
Speaker 2: or two miles like Syria and Turkey or do they

621
00:34:34,239 --> 00:34:35,920
Speaker 2: move into the suburbs.

622
00:34:35,440 --> 00:34:36,080
Speaker 6: Of Bay Route.

623
00:34:37,920 --> 00:34:40,759
Speaker 9: So the short answer is there was a war in

624
00:34:40,760 --> 00:34:42,759
Speaker 9: two thousand and six eleven. In two thousand and six,

625
00:34:42,840 --> 00:34:45,000
Speaker 9: a July war, and on the back of that it

626
00:34:45,040 --> 00:34:47,719
Speaker 9: was very costly war for both sides. A resolution was

627
00:34:47,760 --> 00:34:50,719
Speaker 9: put in place called Resolution seventeen on one, which dictated

628
00:34:51,200 --> 00:34:54,759
Speaker 9: that Hesbola has to move about thirty kilometers away from

629
00:34:54,760 --> 00:34:57,239
Speaker 9: the southern border north of the Litani River and give

630
00:34:57,320 --> 00:35:00,759
Speaker 9: up its arms. Obviously, the resolution hasn't been iplemented, but

631
00:35:01,440 --> 00:35:03,840
Speaker 9: the analyst within the community will say, Israel, I'm not

632
00:35:03,880 --> 00:35:06,799
Speaker 9: going to stop until seventeen oh one is implemented. And

633
00:35:06,880 --> 00:35:09,200
Speaker 9: even the prime minister, the Lebanese Prime Minister, is saying

634
00:35:09,440 --> 00:35:11,560
Speaker 9: it's time for seventeen oh one to be implemented. So

635
00:35:11,600 --> 00:35:12,680
Speaker 9: they just want to push back.

636
00:35:12,760 --> 00:35:15,400
Speaker 2: Hazballah, do you say that Jumana does that she stays

637
00:35:15,400 --> 00:35:16,279
Speaker 2: in kilometers.

638
00:35:17,200 --> 00:35:19,000
Speaker 6: We're nationwide in America.

639
00:35:19,480 --> 00:35:23,040
Speaker 2: I think my math is the American ac is eighteen

640
00:35:23,200 --> 00:35:25,239
Speaker 2: miles is what we were translating.

641
00:35:25,480 --> 00:35:26,879
Speaker 6: They are lost in translations.

642
00:35:26,920 --> 00:35:29,799
Speaker 2: Jumana Bitteci, thank you as so much, particularly for those

643
00:35:29,840 --> 00:35:33,799
Speaker 2: comments on your levin and she, of course delivers Horizon

644
00:35:33,960 --> 00:35:48,040
Speaker 2: each and every day in Dubai. Joining us now Wendy

645
00:35:48,080 --> 00:35:50,239
Speaker 2: Schiller with the history of this of course at Brown

646
00:35:50,360 --> 00:35:53,880
Speaker 2: University in the tub and Center. Wendy, I think I

647
00:35:53,920 --> 00:35:56,520
Speaker 2: said to you an hour or two ago. I can't

648
00:35:56,560 --> 00:36:00,279
Speaker 2: remember you know what Tom Hanks. Tom Hanks moved in

649
00:36:00,320 --> 00:36:04,560
Speaker 2: a prisoner's swap. But as I see the names leaking out,

650
00:36:04,800 --> 00:36:09,400
Speaker 2: speculation of who these names are, what is the difference

651
00:36:09,440 --> 00:36:15,160
Speaker 2: between the prisoners America and the Allies are getting versus

652
00:36:15,719 --> 00:36:17,920
Speaker 2: the prisoners that Russia is getting.

653
00:36:19,480 --> 00:36:21,560
Speaker 10: Well, the only thing we can interpret right now with

654
00:36:21,600 --> 00:36:24,760
Speaker 10: the knowledge we have, is that Putent values the release

655
00:36:24,800 --> 00:36:27,960
Speaker 10: of these prisoners.

656
00:36:26,840 --> 00:36:28,280
Speaker 8: Either for domestic reasons.

657
00:36:28,320 --> 00:36:32,759
Speaker 10: It could be internal politics within his own government. He

658
00:36:32,840 --> 00:36:35,879
Speaker 10: wants to show a that he can still be a

659
00:36:35,920 --> 00:36:40,880
Speaker 10: partner with other nations in reasonable negotiations in his mind,

660
00:36:41,719 --> 00:36:44,640
Speaker 10: and you can say that people were unduly detained in Russia,

661
00:36:44,960 --> 00:36:49,040
Speaker 10: the American hostages in particular. But nonetheless he is portraying

662
00:36:49,160 --> 00:36:52,120
Speaker 10: the image of somebody that people can work with. And

663
00:36:52,200 --> 00:36:55,920
Speaker 10: I don't think the timing is accidental. I think it's

664
00:36:55,920 --> 00:36:58,200
Speaker 10: an adjustment to what's going on in the American political

665
00:36:58,200 --> 00:37:01,319
Speaker 10: scene right now at the presidential level. And also, you know,

666
00:37:01,520 --> 00:37:03,600
Speaker 10: I think it reflects a little bit of the stalemate

667
00:37:03,680 --> 00:37:04,160
Speaker 10: in Ukraine.

668
00:37:04,239 --> 00:37:05,960
Speaker 2: Okay, I'm going to go there, because you went there,

669
00:37:06,080 --> 00:37:10,719
Speaker 2: Professor Schiller. Are you suggesting that this was sped up

670
00:37:10,880 --> 00:37:14,560
Speaker 2: because of the advent of Vice President Harris into our

671
00:37:14,600 --> 00:37:15,600
Speaker 2: presidential race.

672
00:37:17,000 --> 00:37:23,960
Speaker 10: I think that Putin recognizes he wants to be in

673
00:37:24,000 --> 00:37:28,160
Speaker 10: the mix with whoever wins the selection, and he doesn't

674
00:37:28,239 --> 00:37:31,880
Speaker 10: really gain from being demonized by the Democrats.

675
00:37:32,160 --> 00:37:36,160
Speaker 8: Biden, certainly, being what we call old school in terms of.

676
00:37:36,280 --> 00:37:38,120
Speaker 10: Sort of a Cold War and a product of the

677
00:37:38,120 --> 00:37:40,600
Speaker 10: Cold War, was doing quite a bit of that. I

678
00:37:40,600 --> 00:37:43,160
Speaker 10: don't think Harris will focus as much on that, and

679
00:37:43,200 --> 00:37:45,120
Speaker 10: certainly Trump doesn't do it at all.

680
00:37:45,480 --> 00:37:47,640
Speaker 8: So Poten wants to end up somewhere in.

681
00:37:47,560 --> 00:37:50,920
Speaker 10: The middle of that of that intellectual framing on what

682
00:37:51,000 --> 00:37:53,000
Speaker 10: kind of partner he can be and what really plays

683
00:37:53,000 --> 00:37:53,440
Speaker 10: in the world.

684
00:37:54,160 --> 00:37:56,680
Speaker 5: Tommy, have a read headline across the Bloomberg terminal correct

685
00:37:57,239 --> 00:38:00,880
Speaker 5: Wall Street Journal reporter to be really by Russia in

686
00:38:00,960 --> 00:38:03,440
Speaker 5: prisoner swap. So again, as you highlighted, tom this is

687
00:38:03,440 --> 00:38:04,480
Speaker 5: a fluid situation.

688
00:38:04,560 --> 00:38:07,000
Speaker 6: It's a fluid situation. I really want to emphasize this.

689
00:38:07,080 --> 00:38:09,759
Speaker 2: We believe in Bloomberg we don't do rumor, we don't

690
00:38:09,760 --> 00:38:13,760
Speaker 2: do speculation, but we're going to aggregate in legitimate news sources,

691
00:38:13,800 --> 00:38:16,319
Speaker 2: and we're doing that right now with the leadership of

692
00:38:16,320 --> 00:38:18,560
Speaker 2: our Jennifer Jacobs at Bloomberg News.

693
00:38:18,560 --> 00:38:19,960
Speaker 6: Incredibly fluid situation.

694
00:38:20,400 --> 00:38:23,680
Speaker 5: All right, let's move on Wendy, we're right smack in

695
00:38:23,680 --> 00:38:27,560
Speaker 5: the middle of this very contentious presidential election race. The

696
00:38:27,600 --> 00:38:31,480
Speaker 5: next issue I guess for VP Harris is to pick

697
00:38:31,480 --> 00:38:33,880
Speaker 5: a vice presidential candidate. What's the latest on that.

698
00:38:35,160 --> 00:38:38,520
Speaker 10: Well, we've heard that the governor of Pennsylvania, Joshapiro, I believe,

699
00:38:38,560 --> 00:38:39,520
Speaker 10: is meeting or talking.

700
00:38:39,600 --> 00:38:41,920
Speaker 8: You reported that onto her team.

701
00:38:43,000 --> 00:38:45,200
Speaker 10: If I had to guess, it's it's down to Mark

702
00:38:45,280 --> 00:38:46,800
Speaker 10: Kelly and Josh Shapiro.

703
00:38:47,719 --> 00:38:50,080
Speaker 8: It's easier to take a senator out of a state.

704
00:38:50,200 --> 00:38:53,240
Speaker 8: Arizona has a law that says the governor has to replace.

705
00:38:53,560 --> 00:38:56,920
Speaker 10: A senator with the same party person, so the Democrats

706
00:38:56,920 --> 00:38:59,759
Speaker 10: don't lose a seat and a special election or general

707
00:38:59,760 --> 00:39:01,879
Speaker 10: election and won't be helpful two more years for that seat.

708
00:39:02,080 --> 00:39:06,880
Speaker 10: So the Democrats actually are okay if Kelly leaves Arizona.

709
00:39:06,920 --> 00:39:09,600
Speaker 10: But Pennsylvania is I think a little trickier to estimate.

710
00:39:09,880 --> 00:39:11,879
Speaker 8: Is Josh Bureau stronger for Kamala.

711
00:39:11,600 --> 00:39:14,520
Speaker 10: Harris in Pennsylvania as governor with the machine that he's

712
00:39:14,520 --> 00:39:16,920
Speaker 10: built to win the governorship two years ago, or is

713
00:39:16,920 --> 00:39:20,239
Speaker 10: he better on a ticket to bring Pennsylvania but also

714
00:39:20,360 --> 00:39:23,640
Speaker 10: other states like Pennsylvania, And I think he's also an

715
00:39:23,680 --> 00:39:25,000
Speaker 10: observant Jewish person.

716
00:39:25,280 --> 00:39:27,440
Speaker 8: He has made that part of his persona.

717
00:39:28,080 --> 00:39:30,520
Speaker 10: It is resonated not only with Jewish munny, but also

718
00:39:30,560 --> 00:39:33,080
Speaker 10: with religious people have different religious backgrounds.

719
00:39:33,080 --> 00:39:35,759
Speaker 8: He talks about his faith a lot. So whether that's

720
00:39:35,760 --> 00:39:38,200
Speaker 8: good for Harris or not, We're not sure.

721
00:39:38,600 --> 00:39:41,560
Speaker 2: I have never written a song about this, but I'm

722
00:39:41,560 --> 00:39:44,840
Speaker 2: going to go there, Professor Schuler. In nineteen sixty, my

723
00:39:44,920 --> 00:39:47,160
Speaker 2: mother took me out to see Richard Nixon with a

724
00:39:47,200 --> 00:39:53,040
Speaker 2: three day beard will Republicans cigars, and there were a

725
00:39:53,120 --> 00:39:57,080
Speaker 2: beautiful spring morning with jfk in a lovely blue silk

726
00:39:57,160 --> 00:40:00,600
Speaker 2: suit and Missus Kennedy next to him. And guess what.

727
00:40:00,800 --> 00:40:03,080
Speaker 2: The entire uproar where I lived was.

728
00:40:03,880 --> 00:40:06,000
Speaker 6: Omg, he's Catholic.

729
00:40:06,760 --> 00:40:10,240
Speaker 2: And to speak to you in Providence and Brown University, folks,

730
00:40:10,520 --> 00:40:13,040
Speaker 2: I hate to say that was a huge deal. Then,

731
00:40:13,880 --> 00:40:16,600
Speaker 2: with great respect, Wendy Schiller, are we going to have

732
00:40:16,640 --> 00:40:19,920
Speaker 2: a huge deal if it's a Harris Shapiro ticket?

733
00:40:20,600 --> 00:40:22,000
Speaker 8: Yeah, I mean I think that's a factor.

734
00:40:22,000 --> 00:40:23,480
Speaker 10: I mean, nobody should put their head in the sand

735
00:40:23,560 --> 00:40:26,280
Speaker 10: and say, you know someone who's a woman of color

736
00:40:26,560 --> 00:40:28,400
Speaker 10: and a Jewish candidate.

737
00:40:28,440 --> 00:40:30,120
Speaker 8: Now Lieberman was Jewish ram.

738
00:40:29,880 --> 00:40:32,160
Speaker 2: With Gore Goodtories, thank you.

739
00:40:32,360 --> 00:40:34,960
Speaker 10: Right, you know, so we've had that before, and you

740
00:40:35,040 --> 00:40:37,160
Speaker 10: are not only time, you're right about nineteen sixty, but

741
00:40:37,239 --> 00:40:39,839
Speaker 10: certainly the primaries, the very few primaries that they had

742
00:40:39,880 --> 00:40:43,640
Speaker 10: the Democrats before that, Hubert Humphrey made an issue of

743
00:40:43,960 --> 00:40:47,000
Speaker 10: JFK's Catholicism, So you know, it wasn't just an issue

744
00:40:47,040 --> 00:40:48,880
Speaker 10: in America, was an issue in the Democratic Party at

745
00:40:48,920 --> 00:40:49,320
Speaker 10: that time.

746
00:40:49,600 --> 00:40:50,719
Speaker 8: So yes, I think.

747
00:40:50,800 --> 00:40:54,360
Speaker 10: And also let's not forget Israel, Gaza and the disaffected

748
00:40:54,840 --> 00:40:58,400
Speaker 10: younger voters and also people in Michigan of Palstinian and arascent.

749
00:40:58,800 --> 00:41:01,480
Speaker 10: You know, how will that play. Josh Burou is a

750
00:41:01,520 --> 00:41:03,719
Speaker 10: strong about sport of Israel. You know, if you have

751
00:41:03,800 --> 00:41:05,840
Speaker 10: to weigh who's going to bring you votes, who's going

752
00:41:05,920 --> 00:41:07,600
Speaker 10: to lose your votes? You know, if you have to

753
00:41:07,600 --> 00:41:09,960
Speaker 10: think about neutrality, I think Mark Kelly is a more

754
00:41:10,040 --> 00:41:12,239
Speaker 10: neutral choice than Joshapiro.

755
00:41:12,440 --> 00:41:15,720
Speaker 8: And Joshapiro himself may be thinking of running in twenty

756
00:41:15,760 --> 00:41:17,680
Speaker 8: eight Can he win through election in twenty six? So

757
00:41:18,200 --> 00:41:19,360
Speaker 8: very complicated calculating.

758
00:41:19,400 --> 00:41:21,480
Speaker 2: Yeah, okay, I gotta be quick here. Paul Strenia, how

759
00:41:21,520 --> 00:41:23,480
Speaker 2: many times have you seen top gun? Oh?

760
00:41:23,520 --> 00:41:24,240
Speaker 5: Too many accounts?

761
00:41:24,280 --> 00:41:26,920
Speaker 6: Come on? How many a dozen forty.

762
00:41:27,160 --> 00:41:29,760
Speaker 2: Professor Shuler, how many times have you seen Top Gun?

763
00:41:30,920 --> 00:41:33,320
Speaker 10: I've seen the Top Gun on and also Top Gun Maverick.

764
00:41:33,400 --> 00:41:35,680
Speaker 10: I think actually might be better than Top Gun.

765
00:41:35,760 --> 00:41:39,879
Speaker 2: Okay, you're telling me the Vice President's going to turn

766
00:41:39,920 --> 00:41:42,080
Speaker 2: down Top Gun from Arizona.

767
00:41:43,600 --> 00:41:46,239
Speaker 10: I'm saying that I think it's the same as you know.

768
00:41:46,280 --> 00:41:49,000
Speaker 10: It's a more neutral and I think a slightly safer

769
00:41:49,120 --> 00:41:51,920
Speaker 10: choice for lots of different reasons to pick Mark Kelly

770
00:41:52,080 --> 00:41:53,040
Speaker 10: over Joshear.

771
00:41:53,560 --> 00:41:56,160
Speaker 2: This has been wonderful. Professor Schuler is such a trooper

772
00:41:56,760 --> 00:42:01,319
Speaker 2: usually valuators. Civics textbook is defending, and we're thrilled to

773
00:42:01,360 --> 00:42:04,160
Speaker 2: have her on to give you a historical perspective.

774
00:42:04,040 --> 00:42:06,080
Speaker 6: Of these moments as well.

775
00:42:06,400 --> 00:42:09,600
Speaker 2: This is a Bloomberg Surveillance podcast, bringing you the best

776
00:42:09,600 --> 00:42:14,319
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777
00:42:14,440 --> 00:42:18,480
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778
00:42:18,600 --> 00:42:22,640
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779
00:42:22,680 --> 00:42:25,920
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780
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781
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782
00:42:33,800 --> 00:42:37,000
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