WEBVTT - US Reversal On ZTE Shows Weakness On Trade Negotiations: Miller 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:33.879 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. The 0:00:33.920 --> 0:00:36.000 tone is more positive in markets today and a lot 0:00:36.000 --> 0:00:39.400 of people are saying that this because the trade tensions 0:00:39.479 --> 0:00:43.640 between US and China have eased. Why, well, it all 0:00:43.680 --> 0:00:46.400 has to do with this company, ZTE Corporation. And here 0:00:46.440 --> 0:00:49.159 to tell us what happened and what the significance of 0:00:49.200 --> 0:00:52.240 this is is Leland Miller, chief executive of the China 0:00:52.360 --> 0:00:55.560 Beige Book International in New York. Leland, thank you so 0:00:55.640 --> 0:00:58.280 much for being with us. So just lay out in 0:00:58.320 --> 0:01:01.360 broad strokes what happened and why this is a huge 0:01:01.360 --> 0:01:03.760 deal in your opinion. Well, there's a lot of things 0:01:03.760 --> 0:01:05.520 that are going on on the on the trade side, 0:01:05.520 --> 0:01:08.600 and you've got the tariff list, multiple tariff lists. We've 0:01:08.640 --> 0:01:12.319 got investment protection regimes that have been rumored for a 0:01:12.360 --> 0:01:15.000 long time. Uh. You also have a crackdown on on 0:01:15.040 --> 0:01:18.640 certain corporates, and the one that China is really really 0:01:18.760 --> 0:01:21.480 upset about is this recent crackdown on z T, which 0:01:21.520 --> 0:01:23.760 is one of their major telecom firms. It's one of 0:01:23.760 --> 0:01:26.759 the two big ones along with Huawei. And what essentially 0:01:26.959 --> 0:01:30.800 was done over the past month until potentially UH pulled 0:01:31.400 --> 0:01:34.520 reversed by a tweet over the over the weekend, was 0:01:34.720 --> 0:01:41.200 a um A near life almost a ban UH lifetime 0:01:41.240 --> 0:01:44.400 ban of of the z T equipment. ZT was not 0:01:44.440 --> 0:01:46.959 gonna be sold United States. They were being punished for 0:01:47.040 --> 0:01:49.760 violation of US law. Essentially, the US was gonna put 0:01:49.840 --> 0:01:52.800 z T out of business and and now well hold on. 0:01:53.280 --> 0:01:57.760 So the Commerce Department enforced certain bands on z T 0:01:58.200 --> 0:02:01.320 products and the reason why was because they had been 0:02:01.320 --> 0:02:04.720 selling to Iran and North Korea. Is that right it is? 0:02:04.760 --> 0:02:06.840 And then they lied about it and were caught lying 0:02:06.880 --> 0:02:09.639 about it, and so this was a particularly egregious example 0:02:09.720 --> 0:02:12.040 of the Chinese cheating. You know, if the if the 0:02:12.200 --> 0:02:15.960 entire the entire U S. China trade push is about 0:02:16.240 --> 0:02:19.639 cutting down on China's cheating, then this was the ultimate 0:02:19.680 --> 0:02:24.280 example of brazenness and UH and cheating that hurt US 0:02:24.320 --> 0:02:26.679 consumers in U S. NAH security and so the reversal 0:02:26.720 --> 0:02:30.800 of this has significant repercussions beyond just a concession or 0:02:30.840 --> 0:02:34.519 a chip that the President is offering up. Z t 0:02:34.880 --> 0:02:40.160 E uses components that are made by Qualit, Common Intel correct. Correct, 0:02:40.760 --> 0:02:45.280 and those companies cannot sell those products to z T 0:02:45.520 --> 0:02:49.600 E because of current regulations. That was that was the 0:02:49.639 --> 0:02:54.160 recent decision. Yes, okay, so the President would have to 0:02:54.240 --> 0:02:58.480 reverse that in order to allow that that take place. Correct. 0:02:58.520 --> 0:03:01.480 And what's happening right now is is that the Commerce 0:03:01.480 --> 0:03:04.079 Department came out with a very strong language about how 0:03:04.400 --> 0:03:08.239 much ZT had transgressed over the past few years. Wilbur 0:03:08.360 --> 0:03:10.560 Ross had headed that up. And now what the tweet 0:03:10.600 --> 0:03:14.200 suggests is that President Trump has ordered Secretary Ross to 0:03:14.400 --> 0:03:17.520 reevaluate his conclusion on this and to find a way 0:03:17.520 --> 0:03:19.600 to get around it. So it puts Secretary Ross in 0:03:19.600 --> 0:03:22.720 a very difficult position here because some of the stuff 0:03:22.720 --> 0:03:25.800 he said is really impossible to walk back. All Right, 0:03:25.880 --> 0:03:27.920 So let's zoom out a little bit, because a lot 0:03:27.960 --> 0:03:29.839 of people are looking at this deal and saying, well, 0:03:29.960 --> 0:03:32.600 this is This shows that President Trump has taken a 0:03:32.639 --> 0:03:35.640 softer line with China, is perhaps not as interested in 0:03:35.680 --> 0:03:37.640 having a trade war that a lot of people say nobody, 0:03:37.680 --> 0:03:40.680 nobody can win. This is a good thing for world 0:03:40.760 --> 0:03:46.400 peace and world commerce. Why why is that not the case? Well, 0:03:46.560 --> 0:03:49.600 the question is, you know, what is the US side 0:03:49.680 --> 0:03:51.640 pushing for. I mean, that's been the question from day 0:03:51.680 --> 0:03:54.160 one and has not yet been answered. If this is 0:03:54.160 --> 0:03:59.720 pushing towards a more equal relationship, if this is pushing for, um, 0:03:58.400 --> 0:04:03.040 a reckoning on the trade theft to eliminate hurdles for 0:04:03.040 --> 0:04:05.960 the future, then all of this is good. Nobody wants 0:04:05.960 --> 0:04:08.440 a terror for nobody wants a trade war. But if 0:04:08.480 --> 0:04:12.360 you're if you're showing, if you're from the US perspective, 0:04:12.400 --> 0:04:15.320 if you're showing weakness that a foreign company can exert 0:04:15.360 --> 0:04:18.360 some economic leverage over you and have you reverse Nash 0:04:18.400 --> 0:04:21.560 security decisions, it's a problem. It's also a problem if 0:04:21.560 --> 0:04:24.400 you go into a trade negotiation thinking that the trade 0:04:24.400 --> 0:04:26.839 deficit is what you should be negotiating instead of market 0:04:26.880 --> 0:04:30.120 access or intellectual property theft or some of these other 0:04:30.160 --> 0:04:34.719 important things that really do affect businesses and consumers. So 0:04:34.880 --> 0:04:36.719 the question is what have we done this all for, 0:04:36.920 --> 0:04:40.280 And if it ends up being something that sort of 0:04:40.520 --> 0:04:42.920 dwindles out over the course of the next few weeks, 0:04:42.920 --> 0:04:44.920 and months, which which I don't think will happen. Then 0:04:45.160 --> 0:04:48.080 then you you're basically telling China that they've that they 0:04:48.120 --> 0:04:51.039 have a ready made formula for putting this behind them, 0:04:51.279 --> 0:04:53.320 and um, they don't have to to worry about these 0:04:53.360 --> 0:04:55.760 things which just a few weeks ago were worthy of 0:04:55.800 --> 0:04:58.039 a trade war. So it's it's it's all very bizarre. 0:04:58.680 --> 0:05:01.600 Does it also matter that it coincides with the visit 0:05:01.680 --> 0:05:05.880 to the United States and the Vice Premier Leu the 0:05:06.000 --> 0:05:09.560 Chinese trade negotiator, so that what was told by the 0:05:09.640 --> 0:05:11.480 Chinese to the U. S side was that they wouldn't 0:05:11.520 --> 0:05:14.039 have the delegation unless CT was taken care of. So 0:05:14.640 --> 0:05:17.520 the President wanted to make sure this trade delegation happened, 0:05:18.120 --> 0:05:22.479 not mostly because there was trade stuff to discuss to discuss, 0:05:22.720 --> 0:05:24.800 but also because North Korea is playing into this, and 0:05:24.880 --> 0:05:27.600 so you've got a few different issues at play here. 0:05:28.040 --> 0:05:30.240 You don't want disruption in front of the North Korea summit. 0:05:30.520 --> 0:05:32.760 You don't want any of this trade war stuff to 0:05:32.760 --> 0:05:34.680 blow up before the U. S has a plan in place, 0:05:34.720 --> 0:05:37.599 and they've been very slow getting the documents for three 0:05:37.600 --> 0:05:41.000 oh one ready, So the President apparently did not want 0:05:41.040 --> 0:05:43.719 to lose steam on this and and decided to to 0:05:43.800 --> 0:05:47.640 make the ZT decision. Um that said, all of this 0:05:48.360 --> 0:05:52.320 is part of a long process. And whether Leoho visits 0:05:52.440 --> 0:05:54.440 this week and they come to a mini bargain many 0:05:54.440 --> 0:05:57.880 many deal, not a bargain um, then you know this. 0:05:57.880 --> 0:05:59.159 This is something that's going to go on for a 0:05:59.160 --> 0:06:01.440 long time. I want to thank you very much for 0:06:01.520 --> 0:06:04.119 joining us. Leland Miller is the chief executive of China 0:06:04.360 --> 0:06:08.640 beige Book International. You can follow their work on Twitter 0:06:08.800 --> 0:06:12.760 at China beige Book. Talking about the President of the 0:06:12.839 --> 0:06:16.719 United States, Donald Trump and his tweet regarding ZTE Corp. 0:06:16.800 --> 0:06:34.800 And perhaps easing trade sanctions against the company. I want 0:06:34.800 --> 0:06:38.160 to pick up on what Dave mentioned, Scientific Games rising 0:06:38.200 --> 0:06:42.039 more than ten percent, so the shares also avoid Gaming 0:06:42.160 --> 0:06:48.480 and GM and several other gaming companies also rising significantly 0:06:48.560 --> 0:06:51.279 on the news that the Supreme Court struck down a 0:06:51.320 --> 0:06:55.080 federal law that bars gambling on individual sporting events. Joining 0:06:55.160 --> 0:06:57.760 US now, I am pleased to say Brian Eager, he 0:06:57.920 --> 0:07:01.680 is senior gaming and lodging analyst with Bloomberg Intelligence. Brian, 0:07:02.360 --> 0:07:05.120 how big of a deal is this decision by the U. S. 0:07:05.120 --> 0:07:08.240 Supreme Court? So if you think of the pool um 0:07:08.560 --> 0:07:12.239 of basically would have to date been illegal sports bets 0:07:12.240 --> 0:07:14.920 that have been taking place, and you you assign a 0:07:14.920 --> 0:07:18.240 reasonable wind whole rate to that, there's probably about a 0:07:18.280 --> 0:07:22.200 seven and a half billion dollar UH newly released revenue 0:07:22.240 --> 0:07:26.520 opportunity across h the across the states that would now 0:07:26.520 --> 0:07:29.080 have an opportunity to have legalized sports betting. Among those, 0:07:29.360 --> 0:07:31.600 New Jersey and Pennsylvania are kind of front of the line, 0:07:31.640 --> 0:07:35.480 New Jersey being the petitioner here in Pennsylvania having recently 0:07:35.720 --> 0:07:40.440 legalized on sports betting, but certainly an opportunity that both 0:07:40.520 --> 0:07:44.080 casino operators and the back end operators of sports books 0:07:44.080 --> 0:07:47.080 would all likely capitalize on. So who are some of 0:07:47.080 --> 0:07:49.760 the big winners? I mean, Lisa was mentioning some of 0:07:49.760 --> 0:07:53.680 the stocks, also adding BOYD Gaming, as she mentioned up 0:07:53.720 --> 0:07:56.880 a little bit more than three ten, National Gaming up 0:07:56.920 --> 0:07:59.920 four and a half percent, Empire Resorts higher by ten percent. 0:08:01.200 --> 0:08:03.080 So I would kind of breaking it down at least 0:08:03.200 --> 0:08:07.080 additionally into three categories. First, you've got operators like MGM 0:08:07.120 --> 0:08:10.440 and Caesars that have existing operations in Nevada and also 0:08:10.440 --> 0:08:13.360 an Atlantic city. Those are the two major public companies 0:08:13.360 --> 0:08:16.880 that have operations in the Atlantic City market, which is 0:08:16.920 --> 0:08:20.760 the petitioners here which be likely to benefit. Another subgroup 0:08:20.760 --> 0:08:23.160 which we used to kind of touched upon our companies 0:08:23.240 --> 0:08:27.960 like Churchill Downs, Boyd Gaming, National Gaming, El Dorado Resorts, 0:08:28.000 --> 0:08:31.480 which either have or are in the process of acquiring 0:08:31.560 --> 0:08:36.200 assets in the Pennsylvania market that stayed also legalized sports 0:08:36.200 --> 0:08:40.360 betting subject to the Supreme Courts repeal of pasta which 0:08:40.400 --> 0:08:43.400 happened today. And then the third group, Tim and Lisa 0:08:43.640 --> 0:08:47.319 is the operators of the various gaming systems of sports 0:08:47.320 --> 0:08:50.520 book operators. A couple comes to mind. William Hill, the 0:08:50.559 --> 0:08:55.760 British company operates of all the Vada based retail sports books. 0:08:55.760 --> 0:08:58.600 You've got the Stars group that acquired Sky Betting, and 0:08:58.640 --> 0:09:02.280 then you've got Scientific Game which Lisa mentioned, which recently 0:09:02.320 --> 0:09:05.480 acquired m i X Gaming, which has an open bet 0:09:05.480 --> 0:09:10.240 platform which has the ability although right now UH takes 0:09:10.280 --> 0:09:12.760 place in the UK to operate kind of the back 0:09:12.960 --> 0:09:16.000 end of the sports betting platforms. So you basically got 0:09:16.160 --> 0:09:19.160 you know, the Jersey operators, You've got the operators in 0:09:19.240 --> 0:09:22.040 other regional states, and then you've got the operators of 0:09:22.120 --> 0:09:26.480 the equipment and systems that could benefit from the expansion 0:09:26.520 --> 0:09:29.480 of sports books nationwide. Just to give a sense of 0:09:29.559 --> 0:09:34.199 how big a business this is. According to one research unit, 0:09:34.440 --> 0:09:38.000 Americans place a hundred and fifty billion dollars a year 0:09:38.040 --> 0:09:42.040 in illegal sports bets. Other research firms put that at 0:09:42.040 --> 0:09:45.000 a much lower amount. But I'm just wondering, from your 0:09:45.040 --> 0:09:48.320 perspective or most of these online do most people like 0:09:48.440 --> 0:09:50.839 to go to a venue? What's sort of the look 0:09:51.040 --> 0:09:55.400 of the most popular place to bet on individual teams? So, 0:09:55.520 --> 0:09:58.280 the sports books in Nevada, although they only generate about 0:09:58.280 --> 0:10:01.440 two of the total gaming revenue in that state, are 0:10:01.480 --> 0:10:05.040 big traffic generators. They're not necessarily a sizeable casino ways 0:10:05.120 --> 0:10:07.960 or generator, but they generate excitement that makes its way 0:10:08.040 --> 0:10:10.880 by way of casino play into the gaming portions of 0:10:10.920 --> 0:10:15.200 the casinos. You've got that portion right now. Gaming sports 0:10:15.240 --> 0:10:18.840 betting only legal on an unrestricted basis uh A Nevada. 0:10:19.160 --> 0:10:21.559 The hundred fifty billion dollar number you mentioned, that's the 0:10:21.600 --> 0:10:26.200 American Gaming Association estimate of that amount currently wagered illegally 0:10:26.679 --> 0:10:29.640 on sports betting. And so you put a five percent 0:10:29.760 --> 0:10:31.760 hold rate on that, you get that the seven and 0:10:31.760 --> 0:10:35.559 a half billion dollar revenue opportunity I mentioned. And to 0:10:35.600 --> 0:10:39.240 answer your other question, you know physical venues actual sports 0:10:39.240 --> 0:10:41.800 books UH where a lot of the action takes place. 0:10:41.800 --> 0:10:44.760 But all these companies, among them William Pill and others 0:10:44.800 --> 0:10:49.280 have kind of the mobile platforms UH the other ways, 0:10:49.320 --> 0:10:51.920 where within the state's legal bounds, you could use a 0:10:52.520 --> 0:10:56.080 mobile device, smartphone device, etcetera to place your bets. So 0:10:56.160 --> 0:10:59.120 certainly mobile is the direction of the future, even though 0:10:59.160 --> 0:11:02.160 there's there's a large physical presence of these sports books. 0:11:02.640 --> 0:11:04.719 I want to thank you very much for joining us 0:11:04.760 --> 0:11:08.920 and shedding light on this issue. Brian Edgar is our 0:11:09.080 --> 0:11:12.600 expert when it comes to gaming and lodging for Bloomberg Intelligence. 0:11:12.600 --> 0:11:15.480 He's our senior industry analysts and just taking a look 0:11:15.520 --> 0:11:17.560 once again at some of the stocks making moves as 0:11:17.559 --> 0:11:22.040 a result of the Supreme Court decision avoiding the ban 0:11:22.280 --> 0:11:40.880 on national sports. But well, just last week we learned 0:11:40.880 --> 0:11:44.600 that Alliance Bernstein is going to relocate about a thousand 0:11:44.600 --> 0:11:49.400 of its employees to UH to Memphis, Nashville, Tennessee. I 0:11:49.480 --> 0:11:52.120 beg your pardon, and perhaps it has to do with 0:11:52.200 --> 0:11:56.120 compensation levels and making the money go a little bit further. 0:11:56.240 --> 0:11:59.360 Here to tell us more about compensation and incentive pay 0:11:59.400 --> 0:12:02.680 in the financial industry is Alan Johnson, President Managing director 0:12:02.679 --> 0:12:06.240 and founder of Johnson Associates, Alan, thanks very much for 0:12:06.280 --> 0:12:09.640 being with us. What is the current trend in terms 0:12:09.720 --> 0:12:14.560 of compensation and head count in the financial services industry? 0:12:14.559 --> 0:12:16.280 Will get into the specifics later, but what is the 0:12:16.320 --> 0:12:21.680 general trend that you're seeing. Compensation is projected to be 0:12:22.640 --> 0:12:25.720 higher in two thousand and eighteen, and sentives are probably 0:12:25.720 --> 0:12:30.080 going to be up five or ten percent. Um Uh, 0:12:30.240 --> 0:12:34.120 it's probably more of a mixed bag. And um in 0:12:34.200 --> 0:12:39.800 recruiting and employment, probably more outside the traditional money centers, 0:12:39.920 --> 0:12:43.559 more more in other parts of the country of the world. Um, 0:12:43.600 --> 0:12:45.000 So it's got that's a little bit more of a 0:12:45.040 --> 0:12:48.680 mixed bag. But clearly compensation is trending up for two 0:12:48.679 --> 0:12:51.160 thousand and eighteen. Yeah. Alan, Well, if it weren't, I'd 0:12:51.200 --> 0:12:53.800 be shocked because pretty much across the board we've seen 0:12:54.000 --> 0:12:56.960 gains over the past twelve months. And Allen, I'm so 0:12:56.960 --> 0:12:58.800 glad you could join us, because really, if you want 0:12:58.800 --> 0:13:00.360 to know what's going on in Wall Street, just check 0:13:00.440 --> 0:13:02.640 the bonuses and that will tell you everything you need 0:13:02.679 --> 0:13:04.680 to know. And I was looking just to dig into 0:13:04.720 --> 0:13:08.600 the details. I noticed that hedge funds, the average bonus 0:13:08.960 --> 0:13:12.360 was a zero to five increase from last year, whereas 0:13:12.360 --> 0:13:17.040 private equity was five to ten higher than last year. 0:13:17.080 --> 0:13:19.080 Can you talk a little bit about that and sort 0:13:19.080 --> 0:13:21.600 of what this tells you as far as private equity 0:13:21.640 --> 0:13:25.320 being more of the place to be right now. Well, 0:13:25.360 --> 0:13:28.520 private equity is continuing its momentum from the last three 0:13:28.640 --> 0:13:32.640 or four years, the up the the higher markets. They 0:13:32.679 --> 0:13:36.480 have had great realizations of prior investments. They have been 0:13:36.520 --> 0:13:39.480 able to go out in fund raise. So private equity 0:13:39.720 --> 0:13:43.240 is clicking on all cylinders. Hedge funds have had a 0:13:43.360 --> 0:13:46.880 very difficult run in the last several years. There we're 0:13:46.880 --> 0:13:49.600 projecting they're going to be up only slightly, perhaps zero 0:13:49.679 --> 0:13:52.440 to five incentives for this year, and again it's their 0:13:52.480 --> 0:13:56.679 fundamental business model of trying to beat the markets is 0:13:57.520 --> 0:14:01.040 much harder UM, so they're one of the two different ends. 0:14:01.080 --> 0:14:03.800 Private equity continues to be on a roll of hedge funds. 0:14:04.280 --> 0:14:08.640 Hopefully the volatility will help them, but it's a question mark. Well, Alan, 0:14:08.960 --> 0:14:11.800 maybe shift your attention now to investment in commercial banking 0:14:12.120 --> 0:14:15.760 and UM you say that the incentive pay would be 0:14:15.840 --> 0:14:20.880 generally in line with the entire firm's performance. Correct, Yes, 0:14:21.040 --> 0:14:24.800 the the banks have done better. They don't get the 0:14:24.840 --> 0:14:27.040 attention that they once did on their pay, but they 0:14:27.080 --> 0:14:31.240 continue to do well. What's different than the past that 0:14:31.280 --> 0:14:34.120 we all remember is that today it's somewhat of the 0:14:34.160 --> 0:14:38.680 boring parts of the commercial banking, which is commercial lending, retail, 0:14:39.080 --> 0:14:44.240 credit cards, cars, things that are steady and profitable um, 0:14:44.400 --> 0:14:46.760 but not as much of their business is the more 0:14:47.000 --> 0:14:50.600 um risky parts of the business that they used to 0:14:50.640 --> 0:14:53.440 do so well ahead. One thing I'm wondering is how 0:14:53.480 --> 0:14:57.800 the bonuses at US banks compared to those at European 0:14:57.920 --> 0:15:01.920 banks and whether you've seen in a pretty big attrition 0:15:02.120 --> 0:15:06.760 out of European banks and into into the US ones. Now, 0:15:06.800 --> 0:15:09.880 that's a very good question. The US banks continue to 0:15:10.080 --> 0:15:12.960 not only a business but all pay perspective, continue to 0:15:13.560 --> 0:15:16.280 move ahead. The European banks have kind of been in 0:15:16.360 --> 0:15:19.600 lembo now for a number of years. We saw Deutsche 0:15:19.640 --> 0:15:23.640 Bank cutting back and others, so they have not had 0:15:23.680 --> 0:15:25.840 the progress that the US banks have had in the 0:15:25.920 --> 0:15:29.080 last five or so years, either from a business results, 0:15:29.080 --> 0:15:34.360 stock price, or pay um. They are lagging UM significantly well. 0:15:34.360 --> 0:15:36.040 But I have to wonder just you know, with Deutch 0:15:36.040 --> 0:15:38.080 a bank, for example, I'd heard a while back that 0:15:38.120 --> 0:15:40.680 they were actually offering some huge bonuses to try to 0:15:40.720 --> 0:15:44.360 get talented people to come join them, given how much 0:15:44.400 --> 0:15:46.760 bad press they've gotten. And I wonder if you do 0:15:46.880 --> 0:15:50.600 see more sort of one off huge compensation offers from 0:15:50.600 --> 0:15:53.600 banks that are looking to sort of revive their franchise. 0:15:55.520 --> 0:15:57.520 You certainly don't see that as much in the United 0:15:57.560 --> 0:16:00.040 States because they don't need to to do the have 0:16:00.160 --> 0:16:01.800 and they don't want to. I think they don't need 0:16:01.840 --> 0:16:03.720 you because sorry to break in, but they don't need 0:16:03.760 --> 0:16:05.520 to because there are so many people looking for jobs 0:16:05.520 --> 0:16:07.920 that they can hire. Uh, most of them are got 0:16:07.960 --> 0:16:11.120 a pretty stable um cadre of senior people. They don't 0:16:11.200 --> 0:16:14.000 really need. They don't need the savior at this point. 0:16:14.160 --> 0:16:17.680 They're they're they're certainly looking for really good people, and 0:16:17.680 --> 0:16:20.480 they're certainly going to pay a lot for expensive people, 0:16:20.480 --> 0:16:23.520 but they don't need the savior you mentioned. If you're 0:16:23.680 --> 0:16:27.160 more troubled or more um in a in a fall, 0:16:27.280 --> 0:16:29.520 you're more likely to go out and spend an awful 0:16:29.520 --> 0:16:34.240 lot of money a free agent um and perhaps overpay um. 0:16:34.400 --> 0:16:37.120 The U S banks historically have always done that, but 0:16:37.160 --> 0:16:39.360 it certainly in the last five years or more they 0:16:39.400 --> 0:16:42.000 have not felt the need to or weren't allowed to 0:16:42.040 --> 0:16:44.640 do that. Um, So you know you're right if you're 0:16:44.680 --> 0:16:46.880 If you're going to hear an outsized number, it's not 0:16:47.000 --> 0:16:50.160 likely to be a brand name US Bank. It's likely 0:16:50.200 --> 0:16:53.960 to be somebody from probably from Europe. All Right, just 0:16:54.040 --> 0:16:56.680 really quickly, about thirty seconds. I don't know if you 0:16:56.680 --> 0:16:59.680 saw the news, Goldman Sachs is just announcing that to 0:17:00.160 --> 0:17:03.120 heads out of the three that lead the securities division 0:17:03.200 --> 0:17:06.480 are planning to retire. Just really quickly. Is this is 0:17:06.480 --> 0:17:11.320 this a significant thing? Um? I think it's a significant 0:17:12.200 --> 0:17:15.600 move for those two individuals. But certainly Goldman traditionally has 0:17:15.640 --> 0:17:17.679 had duel heads and a lot of businesses to give 0:17:17.760 --> 0:17:20.520 them a deeper bench. Um So, I don't think it 0:17:20.640 --> 0:17:24.560 tells you anything that they continue to rotate quality people 0:17:24.600 --> 0:17:28.400 through these jobs, and they've been I think the biggest 0:17:28.440 --> 0:17:31.840 practitioner of having dual heads, which they have. Their view 0:17:31.880 --> 0:17:34.720 is we need a deeper bench than relying on a 0:17:34.880 --> 0:17:37.080 you know, just a single person most of the time. 0:17:37.400 --> 0:17:40.600 So they still have somebody left from that team. Allan Johnson, 0:17:40.640 --> 0:17:42.680 thank you so much for joining us today. Always a 0:17:42.720 --> 0:17:45.040 pleasure and always important to take a look at what 0:17:45.080 --> 0:17:47.800 those bonuses are showing us about Wall Street Allan Johnson, 0:17:47.920 --> 0:18:06.639 managing director and founder of Johnson Associates, the shares of 0:18:06.960 --> 0:18:09.560 n XP Semiconductor. They are hired by about nine and 0:18:09.560 --> 0:18:13.359 a half percent after Chinese regulators have restarted their review 0:18:13.440 --> 0:18:19.320 of Quacom's application to acquire an XP Semiconductors. They previously 0:18:19.359 --> 0:18:23.119 had shelved this work in reaction to growing trade tensions 0:18:23.160 --> 0:18:25.679 with the United States. This according to people familiar with 0:18:25.720 --> 0:18:29.000 the matter, So better who better than Victoria Espinel, the 0:18:29.040 --> 0:18:32.440 president and the chief executive of the Business Software Alliance 0:18:32.440 --> 0:18:35.400 b s a UH to tell us a little bit 0:18:35.440 --> 0:18:38.320 more about what's going on when it comes to trade, 0:18:38.359 --> 0:18:42.200 intellectual property and technology between the United States and China. 0:18:42.320 --> 0:18:45.439 She's also the president of Software dot org and she 0:18:45.480 --> 0:18:48.920 can be followed on Twitter at Victoria Espinel. She joins 0:18:49.000 --> 0:18:51.040 us in our eleven three oh studios. Victoria, thank you 0:18:51.080 --> 0:18:54.240 very much for being with us UM. Just to give 0:18:54.240 --> 0:18:56.720 people the background prior to being the head of the 0:18:56.720 --> 0:18:59.720 the b s a UM, you or the United States 0:18:59.800 --> 0:19:04.399 in Collectual Property Enforcement Coordinator for the White House UH, 0:19:04.440 --> 0:19:07.199 and you were appointed by President Barack Obama back in 0:19:07.240 --> 0:19:10.160 September of two thousand nine. So what is your take 0:19:10.240 --> 0:19:14.879 on the back and forth over intellectual property and technology 0:19:14.880 --> 0:19:18.040 issues between the United States and China that currently are 0:19:18.040 --> 0:19:20.800 in the headlines. So this has been a long standing 0:19:20.840 --> 0:19:23.200 issue UM. In fact, before my time at the White House, 0:19:23.240 --> 0:19:26.879 I was a trade negotiator UM under the President Bush's 0:19:26.840 --> 0:19:29.240 administration from two thousand and one to two thousand seven, 0:19:29.240 --> 0:19:31.879 and I was the chief Intellectual property trade negotiator for 0:19:31.920 --> 0:19:35.240 the United States. But these concerns between the United and 0:19:35.440 --> 0:19:38.959 United States and China have predated even my time at USTR. 0:19:39.359 --> 0:19:42.240 And so this is I think we're seeing what may 0:19:42.280 --> 0:19:45.960 becoming close to the culmination of a long history of 0:19:46.040 --> 0:19:49.199 concerns where some things in China have gotten better, but 0:19:49.320 --> 0:19:54.000 other things have have gotten worse potentially. And I think 0:19:54.040 --> 0:19:56.719 speaking from the respective of the software industry, well, we 0:19:56.800 --> 0:19:59.520 definitely have concerns about intellectual property in China. I think 0:19:59.560 --> 0:20:02.560 there are a are types of market access barriers that 0:20:02.600 --> 0:20:06.040 are potentially even more concerning, so for example, joint venture 0:20:06.119 --> 0:20:10.000 rules or the cybersecurity regulations that China has in place. 0:20:10.840 --> 0:20:15.240 All that said, China is an incredibly important, perhaps the 0:20:15.280 --> 0:20:18.520 most important bilateral trading partner that we have with the 0:20:18.600 --> 0:20:21.800 United States, and so what I think is important for 0:20:21.920 --> 0:20:24.639 everyone to remember at this point is what we really 0:20:24.680 --> 0:20:27.480 need is for the United States in China to be 0:20:27.560 --> 0:20:31.639 having a constructive dialogue and be working together on solutions 0:20:31.640 --> 0:20:34.360 that are going to benefit both of us. I don't 0:20:34.359 --> 0:20:38.480 think it's it is it's not beneficial for China or 0:20:38.520 --> 0:20:41.879 the United States to be harmed in this process. Um. 0:20:41.920 --> 0:20:44.200 And the second point I would make is it's about 0:20:44.200 --> 0:20:46.600 the United States in China, but it's also about the 0:20:46.600 --> 0:20:49.080 global economy. And so one thing that I think would 0:20:49.119 --> 0:20:51.679 be very helpful that we're not seeing that much of 0:20:51.720 --> 0:20:54.040 at the moment is for the United States to be 0:20:54.119 --> 0:20:57.320 working with other countries as well. This is not just 0:20:57.440 --> 0:20:59.920 about the United States in China. This is about making 0:21:00.040 --> 0:21:03.600 the global economy work well. And I think, um, while 0:21:03.600 --> 0:21:07.359 it has been hardening to see the administration working through 0:21:07.480 --> 0:21:11.399 organizations like the World Trade Organization to a certain extent, um, 0:21:11.440 --> 0:21:14.000 I think the more that we the United States can 0:21:14.000 --> 0:21:16.639 be building alliances and we the United States can be 0:21:16.640 --> 0:21:20.359 working constructively with a range of countries, including with China, 0:21:20.480 --> 0:21:23.360 that's ultimately that's going to be helpful for everyone. So 0:21:23.760 --> 0:21:26.960 one sort of battle that's being waged between China and 0:21:27.000 --> 0:21:30.600 the US aside from the very clear headlines about trade 0:21:30.640 --> 0:21:34.439 tensions is over artificial intelligence, and China has made a 0:21:34.480 --> 0:21:37.840 real concerted effort to push forward any new technology on 0:21:37.880 --> 0:21:40.960 that front. The White House had a meeting last week 0:21:41.240 --> 0:21:43.240 where it had the executive of some of the leading 0:21:43.240 --> 0:21:46.679 tech companies in the US, and White House officials said, listen, 0:21:46.800 --> 0:21:51.480 if you want to experiment develop artificial intelligence, go crazy. 0:21:51.600 --> 0:21:53.679 We are going to have a very light touch with 0:21:53.720 --> 0:21:56.600 respect to regulating this. What is the cutting edge of 0:21:56.680 --> 0:21:59.479 artificial intelligence? And how important is this sort of lazy, 0:21:59.560 --> 0:22:03.960 fair at tude by US representatives. So I think artificial 0:22:03.960 --> 0:22:07.879 intelligence is already and will become even more important to 0:22:08.000 --> 0:22:10.600 our economy. So then the same way that trans software 0:22:10.600 --> 0:22:13.320 transformed every sector of the economy. I mean, software is 0:22:13.600 --> 0:22:16.240 like electricity, It is used by literally everyone, I think 0:22:16.240 --> 0:22:19.400 eventually artificial intelligence is going to rise to that same 0:22:19.480 --> 0:22:23.159 level of being a truly transformative technology in terms there 0:22:23.200 --> 0:22:25.800 are a lot of different kinds of artificial intelligence. And 0:22:25.880 --> 0:22:27.840 so one of the things that you're reading the headlines 0:22:27.880 --> 0:22:32.119 in terms of China's investments and research, um, you know, 0:22:32.200 --> 0:22:35.840 China is investing significant amounts of money, not just at 0:22:35.840 --> 0:22:38.000 the central level, but at the prevential level. At the 0:22:38.040 --> 0:22:40.200 same time, in the United States, more through the private 0:22:40.240 --> 0:22:44.160 sector and through UM we are also having significant investments 0:22:44.160 --> 0:22:48.359 in artificial intelligence. And speaking for the software industry, I 0:22:48.359 --> 0:22:50.760 think what we are most focused on is how you 0:22:50.760 --> 0:22:54.920 can use artificial intelligence to try to help people make 0:22:54.960 --> 0:22:58.440 decisions better, So decisions that people are already making, how 0:22:58.480 --> 0:23:00.199 to make how to give them the tools that they 0:23:00.200 --> 0:23:03.399 are making those decisions more quickly and with more information. 0:23:03.680 --> 0:23:07.080