WEBVTT - Fed Readies to Cut and In Conversation with Iraq's PM 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.160 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen, and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:47.240 the Bloomberg Terminal, and the Bloomberg Business App. One of 0:00:47.280 --> 0:00:49.400 the great things I do when I lecture is I 0:00:49.479 --> 0:00:54.360 talk about critical thinking skills. These are developed mostly by 0:00:54.400 --> 0:01:00.480 having a greater sense of correlations and interdependencies between different ideas, 0:01:00.880 --> 0:01:01.680 holding the high. 0:01:01.560 --> 0:01:02.960 Ground on that from B and HY. 0:01:03.080 --> 0:01:07.840 Jeff Reu joins us in studio, usually askanced in London. 0:01:07.959 --> 0:01:09.120 Jeff thrilled to heavy. 0:01:09.000 --> 0:01:11.039 In our studios. This morning way too short. We could 0:01:11.080 --> 0:01:13.039 do an hour which this morning. 0:01:13.080 --> 0:01:13.720 Thanks so much. 0:01:14.120 --> 0:01:17.319 Is the market ahead of the Fed? I've never seen 0:01:17.440 --> 0:01:18.720 such an ex post. 0:01:18.680 --> 0:01:20.000 X into a jumble? 0:01:20.760 --> 0:01:27.200 Is this constructive for markets to have this communicative uncertainty. 0:01:27.520 --> 0:01:31.080 Well, what's constructive for markets might not be as constructive 0:01:31.160 --> 0:01:32.920 for the FED. I think there's a bit of a 0:01:32.920 --> 0:01:36.440 dissonance there, and the fed's message, whatever it is not 0:01:36.520 --> 0:01:40.000 too so. So the fed's priority responsibility almost is not 0:01:40.000 --> 0:01:43.480 to induce panic, and the market should not be going 0:01:43.520 --> 0:01:45.399 into thinking that it can actually drive the FED in 0:01:45.440 --> 0:01:47.840 that direction. So I think now that's where we need 0:01:47.880 --> 0:01:51.200 to draw the fine line tomorrow. But you know, ultimately, 0:01:51.400 --> 0:01:53.640 if you ask me, is pricing a bit too assertive, 0:01:53.840 --> 0:01:56.120 a bit too airing on the side of the hard landing, Yes, 0:01:56.120 --> 0:01:59.680 it is right. So we clearly would be want to 0:01:59.680 --> 0:02:01.200 be on the side of that for the time being. 0:02:01.200 --> 0:02:03.040 And the rest of the world is watching right because 0:02:03.480 --> 0:02:06.520 in the past, if the US, you know, sneezes, the 0:02:06.520 --> 0:02:08.440 world catches a cold. But looking at how other central 0:02:08.480 --> 0:02:10.120 backs are behaving right now, I'm not so sure. 0:02:10.840 --> 0:02:11.240 Jeffrey. 0:02:11.280 --> 0:02:14.600 I know that I was in your shoes years ago. 0:02:14.680 --> 0:02:16.680 I know that your salesforce is running. You are all 0:02:16.680 --> 0:02:19.360 around the United States and this week talking to clients. 0:02:19.680 --> 0:02:20.960 What's your number one message? 0:02:21.120 --> 0:02:24.520 So number one message is, well, firstly, you know, from 0:02:24.680 --> 0:02:28.160 my side of the pond, can a conversation on fiscal 0:02:28.240 --> 0:02:31.200 happen at some point. You know, it's not like in Europe. 0:02:31.240 --> 0:02:33.600 You know, the conversations on fiscal are taking place in 0:02:33.639 --> 0:02:36.440 earnest and in fairness, It's not like you're presenting a 0:02:36.440 --> 0:02:39.000 good example either. But that is the concern because the 0:02:39.080 --> 0:02:40.880 US is the reserve asset at the end of the day, 0:02:41.120 --> 0:02:44.440 and the second side is is so going back to 0:02:44.480 --> 0:02:47.000 the hard landing conversation, how is the economy actually doing? 0:02:47.040 --> 0:02:49.840 And how's business investment doing? You know, how is how 0:02:50.720 --> 0:02:55.240 a household's behaving. I was in a Texas yes, yeah, 0:02:55.240 --> 0:02:58.640 it was my first time there. Yeah, and as far 0:02:58.680 --> 0:03:01.240 as I could tell, again just to speak from personal experience, 0:03:01.280 --> 0:03:06.040 you know that. So clearly a lot going on investment, construction, 0:03:06.480 --> 0:03:09.480 taking advantage you know, of the states and natural resources 0:03:09.520 --> 0:03:11.600 in terms of land in it and the light. So 0:03:11.639 --> 0:03:14.200 you're clearly there, whereas if you look at Europe, you know, 0:03:14.240 --> 0:03:16.240 if you look at you know the investment intent you're 0:03:16.280 --> 0:03:19.120 going on there, you just highlighted some pulling of investment 0:03:19.160 --> 0:03:21.880 or lack of investment you going through, so you can 0:03:21.919 --> 0:03:24.280 see a bit of a divergence. So that begs the 0:03:24.360 --> 0:03:26.400 question if there's that much going on in the US 0:03:26.480 --> 0:03:28.160 right now, wise market pricing and hard landing. 0:03:28.240 --> 0:03:30.240 Okay, it's just I'm going to tear up here. I 0:03:30.240 --> 0:03:34.040 got Jeffrey you in Texas. Where do you go with that? 0:03:34.600 --> 0:03:35.040 Jeff You? 0:03:35.360 --> 0:03:39.120 What does it then say about productivity differentials? Trudeau's flat 0:03:39.160 --> 0:03:43.200 on his back after a disaster in Montreal, Germany's flat. 0:03:43.040 --> 0:03:44.560 On its back, et cetera. 0:03:44.640 --> 0:03:47.880 So I got a labor dynamic, a capital guide dynamic. 0:03:48.440 --> 0:03:51.200 I got total fact or productivity, whatever you want to 0:03:51.240 --> 0:03:55.120 call it. But how do you overlay productivity and the 0:03:55.280 --> 0:03:57.120 confidence to be in the markets? 0:03:57.400 --> 0:03:57.680 US? 0:03:57.840 --> 0:04:00.480 Productivity a right? So if you just do it simple 0:04:00.640 --> 0:04:04.280 equation nominal growth or sorry, so potential growth, of which 0:04:04.320 --> 0:04:07.400 productivity is the key factor, plus demographics plus your inflation 0:04:07.440 --> 0:04:08.880 target is your terminal rate? 0:04:08.960 --> 0:04:09.120 Right? 0:04:09.160 --> 0:04:13.640 Just for bog standard Central Bank US productivity warrants justifies 0:04:13.920 --> 0:04:15.600 us exceptionalism. That's my message. 0:04:15.600 --> 0:04:17.400 Okay, So Chair Jones is a stand for if he 0:04:17.440 --> 0:04:19.840 flies over to your London School of economics, he's got 0:04:19.880 --> 0:04:23.320 to be sharkins in in the bottom line on productivity, 0:04:23.440 --> 0:04:25.080 is America is different? 0:04:25.360 --> 0:04:26.760 Is it just because we don't believe in. 0:04:26.720 --> 0:04:31.120 Austerity with our multi trillion dollar budgets. 0:04:30.680 --> 0:04:33.799 No, because America believes in its people. America has people, 0:04:33.800 --> 0:04:35.760 has the talent, and continues to attract that. That is 0:04:35.760 --> 0:04:38.240 the fundamental difference. Yes, there's a bit of a demographic 0:04:38.320 --> 0:04:42.280 argument there, But how it fosters productivity through innovation, that's 0:04:42.400 --> 0:04:44.680 that's a lesson you badly need to learn. Look at 0:04:44.720 --> 0:04:48.680 the Office Budget Responsibilities report based on the baseline scenario 0:04:48.880 --> 0:04:51.159 right now for UK productivity and this is the power 0:04:51.160 --> 0:04:53.800 of compounding. Right has UK's debt to GDP ratio in 0:04:53.839 --> 0:04:56.640 twenty seventy five at two hundred and seventy percent. If 0:04:56.680 --> 0:04:59.440 you lower the productivity basedline by one percentage point, it 0:04:59.480 --> 0:05:01.520 goes the six one hundred and fifty percent. If you 0:05:01.680 --> 0:05:04.479 increase the productivity baseline by one percent and the baselines 0:05:04.480 --> 0:05:05.719 one and a half so to two and a half, 0:05:05.760 --> 0:05:07.800 which probably the US is not far from, then you 0:05:07.839 --> 0:05:10.880 can keep to GDP ratio below one hundred percent. That's 0:05:10.920 --> 0:05:11.960 what the US has going for. 0:05:12.040 --> 0:05:14.160 It is Stiglit's little g Yeah. 0:05:14.200 --> 0:05:18.240 Stiglan's just screams about growth rate as being the key dynamic. 0:05:18.400 --> 0:05:20.320 Jeffrey, what do you tell our good friends in Texas 0:05:20.360 --> 0:05:24.640 about Europe, Middle East in Africa in terms of opportunities. 0:05:24.640 --> 0:05:25.680 What do you tell our friends. 0:05:25.400 --> 0:05:28.640 In well Europe right now it's you know, I'm struggling 0:05:28.680 --> 0:05:30.719 to get my head around your evaluations in the currency 0:05:31.200 --> 0:05:34.479 and the exchange, in the currency and equity markets. I 0:05:34.480 --> 0:05:36.240 thought the UCB was hawkish last week, you know, to 0:05:36.279 --> 0:05:38.240 be honest, and look at all the bad news and 0:05:38.279 --> 0:05:40.320 in terms of data on the corporate level and an 0:05:40.360 --> 0:05:42.880 aggregate level, why are you still hawkish? And they can say, well, 0:05:42.880 --> 0:05:44.599 we don't have a growth mandate, we're different from the FED. 0:05:44.800 --> 0:05:46.880 Fair enough, right, But then you should take a step 0:05:46.920 --> 0:05:50.680 back look at drag use report, how he highlighted compesitiveist 0:05:50.920 --> 0:05:53.920 issues and the like. So you know that's that really 0:05:54.040 --> 0:05:55.720 is a message that he's trying to hammer home. Can 0:05:55.760 --> 0:05:57.960 you deal with it? You know, So let's see in 0:05:58.040 --> 0:06:00.320 terms of the UK finally getting to some kind of 0:06:00.320 --> 0:06:02.760 political normalcy, I would say, but the budget up ahead 0:06:02.800 --> 0:06:05.880 again focusing on growth and productivity. Middle East. No, to 0:06:05.880 --> 0:06:07.840 be honest, now, that over the last few years has 0:06:07.880 --> 0:06:09.960 been the big change. You know, it's what our clients 0:06:10.000 --> 0:06:12.640 have been highlighting where the opportunity is. You know, there 0:06:12.720 --> 0:06:14.560 is a plan there to boost things. Of course, oil 0:06:14.560 --> 0:06:16.680 price is very much in focus right now, clients are 0:06:16.720 --> 0:06:19.599 looking for proxies, but medium longer term capital flows and 0:06:19.600 --> 0:06:21.279 the Middle East clearly as benefiting. 0:06:21.839 --> 0:06:25.840 Jeffrey, you are on China, so a lot of. 0:06:25.800 --> 0:06:28.760 Clients asking about President She's comments last week. They will 0:06:28.839 --> 0:06:31.240 hit the growth target. Let's just look at simple mathematics, 0:06:31.320 --> 0:06:33.279 right So if you look at the growth data for 0:06:33.360 --> 0:06:36.080 Q one and Q two and probably Q three below 0:06:36.560 --> 0:06:39.400 the target on an annualized basis, then Q four has 0:06:39.440 --> 0:06:41.640 to be strong. We cannot discount that, you know, at 0:06:41.640 --> 0:06:44.159 this point, I think the one thing China from an 0:06:44.200 --> 0:06:47.760 asset allocation basis has going for it is investment relative 0:06:47.800 --> 0:06:49.800 to benchmark is quite low right now. I think at 0:06:49.800 --> 0:06:52.440 this point, especially commodities market less so oil, but maybe 0:06:52.480 --> 0:06:57.440 industrial commodities Aussie dollar, you cannot afford to discount the 0:06:57.560 --> 0:07:00.480 risk of a major boost in Q four. Yes, it's 0:07:00.480 --> 0:07:03.080 probably a tactical plate rather than structuring the same. 0:07:03.160 --> 0:07:03.520 I can't. 0:07:03.600 --> 0:07:05.240 I mean, I don't know how the totalized, folks, but 0:07:05.320 --> 0:07:07.039 I'm in the You can't on this. 0:07:07.600 --> 0:07:10.280 When the facts change, She's going to change. 0:07:10.400 --> 0:07:12.960 I mean, I'm sorry, it's the same old story going 0:07:13.000 --> 0:07:15.880 back and lay they going to have a strategy, But 0:07:15.960 --> 0:07:20.600 would you suggest that Beijing will capitulate to realities allowing 0:07:20.600 --> 0:07:22.800 an FDI, allow an investment. 0:07:23.360 --> 0:07:27.240 So the recent announcement, you know, allowing foreign investment into 0:07:27.240 --> 0:07:29.240 healthcare into China for example. You know that is a 0:07:29.280 --> 0:07:31.520 very large market. So you look at the demographics of 0:07:31.680 --> 0:07:35.160 the premiere. Ever since he's been appointed, has been stressing 0:07:35.200 --> 0:07:38.440 need for FDI and the like, allowing visa free travel 0:07:38.480 --> 0:07:41.200 to China for business person, that kind of facilitation. That 0:07:41.280 --> 0:07:45.280 message is there. But going back to mathematics, capitulation to mathematics, right, 0:07:45.360 --> 0:07:47.360 especially if you believe in the growth target, you have 0:07:47.360 --> 0:07:49.320 to realize reality and accelerate everything. 0:07:49.400 --> 0:07:51.560 Jeffrey, you thank you so much for joining us. 0:07:51.600 --> 0:07:52.320 Thank you. It's a pleasure. 0:07:52.480 --> 0:07:54.720 So he hasn't been here since seventeen eighty four. Now 0:07:54.920 --> 0:07:56.720 that's a big It goes back to ya. 0:07:56.800 --> 0:07:59.160 I know it's number one Wall Street, the best address 0:07:59.280 --> 0:07:59.960 on global water. 0:08:00.080 --> 0:08:01.400 Jeffrey, thank you so much. 0:08:01.440 --> 0:08:12.720 He is with b and wife. 0:08:14.280 --> 0:08:17.640 This is what Bloomberg Surveillance is about. Advancing the conversation, 0:08:18.400 --> 0:08:22.200 the quality of the debate today, an economics finance investment 0:08:22.280 --> 0:08:25.840 in all The only reason it's here is because Texas 0:08:25.920 --> 0:08:30.440 is number one in the NCAA Football ratings. Ed, Heyman's 0:08:30.480 --> 0:08:33.400 having the best September is he's ever go get them 0:08:33.440 --> 0:08:37.120 log arts and you've got the fight and Texas aggy's 0:08:37.160 --> 0:08:39.640 coming up here. My father was at A and M 0:08:39.720 --> 0:08:43.480 so college station will do it to you here in 0:08:43.600 --> 0:08:46.640 a distance, Ed, you are here within your horrifically busy 0:08:46.679 --> 0:08:51.760 schedule to explain a shift. What did Julian and Manuel 0:08:51.840 --> 0:08:55.680 and your team at Evercore is I do to convince 0:08:55.760 --> 0:09:00.000 you to move to a construct economic outcome for mister Powell. 0:09:01.920 --> 0:09:07.520 Some of data dog as you know. And I'd been 0:09:07.640 --> 0:09:12.880 lugging around a recession forecast for about a year and 0:09:14.360 --> 0:09:18.920 my kids were laughing at me. My wife was kidding 0:09:18.920 --> 0:09:22.360 me about it, and I d I just I couldn't 0:09:22.360 --> 0:09:27.080 take it. And the fourth quarter's coming up more substantly. 0:09:27.840 --> 0:09:31.640 Fourth quarters coming up in a couple of weeks, and 0:09:31.679 --> 0:09:33.600 it's gonna be positive. 0:09:33.800 --> 0:09:34.079 Yep. 0:09:34.920 --> 0:09:37.040 So I have to change my forecast again to push 0:09:37.080 --> 0:09:41.880 it out. And anecdotal is coming in pretty strong. UH 0:09:41.960 --> 0:09:45.959 unemployment claims, which is the best government data has been strong. 0:09:47.080 --> 0:09:47.160 UH. 0:09:47.760 --> 0:09:51.760 System's got a lot of liquidity in it, and money's 0:09:51.800 --> 0:09:57.400 not tight, as you know, yep. And so I decided 0:09:57.440 --> 0:10:01.120 I should retreat to fight another day. 0:10:02.160 --> 0:10:06.000 So if a recession is not in the imminent you 0:10:06.040 --> 0:10:09.720 know future, what is what should the FED do tomorrow? 0:10:09.760 --> 0:10:10.360 Do you think. 0:10:11.800 --> 0:10:13.440 I don't really care right now? 0:10:13.600 --> 0:10:14.200 You don't really care? 0:10:14.240 --> 0:10:14.520 Okay? 0:10:14.600 --> 0:10:17.319 I mean I don't care in the sense that if 0:10:17.320 --> 0:10:22.839 they don't do fifty, I'll be shocked. Okay, because I've 0:10:22.840 --> 0:10:25.640 been at this so long, and the FED picks out 0:10:25.640 --> 0:10:30.040 somebody like Timors to communicate, frankly to me and you, 0:10:31.880 --> 0:10:38.160 this is not a situation where they're peddling their own view. 0:10:39.000 --> 0:10:41.319 And Timorus has said over and over the FED is 0:10:41.360 --> 0:10:46.760 going to do fifty, and if he's if they don't 0:10:46.760 --> 0:10:48.280 do fifty, go back. 0:10:48.360 --> 0:10:50.200 We got to stop. This is very important. 0:10:50.480 --> 0:10:52.760 Nick Timro is not standing with the Wall Street Journal 0:10:52.800 --> 0:10:56.320 and Colby Smith at the FT full disclosure. Colby worked 0:10:56.320 --> 0:10:58.920 for surveillance for years. We're really proud of what she's 0:10:58.960 --> 0:11:05.320 done at the T Okay, this is really really important. 0:11:05.400 --> 0:11:08.160 They've lost control of communication. 0:11:08.720 --> 0:11:08.880 Now. 0:11:08.880 --> 0:11:12.200 We had Arthur Burns smoke signals from his pipe, we 0:11:12.240 --> 0:11:16.439 had Greenspran with we're all on the same page, one line, 0:11:16.880 --> 0:11:20.880 and we're now where we are for everybody nationwide, listening 0:11:21.280 --> 0:11:27.160 worldwide listening. What's Ed Hyman's best communication model for our 0:11:27.280 --> 0:11:28.040 central bank? 0:11:28.920 --> 0:11:32.320 Timorous? Nick Tamros, You think they should be doing it 0:11:32.360 --> 0:11:33.120 through the media. 0:11:33.600 --> 0:11:35.000 That's the way they do it, they know. 0:11:35.080 --> 0:11:38.360 But what do you recommend we do to write my game? 0:11:38.960 --> 0:11:39.160 Game? 0:11:39.240 --> 0:11:39.360 Oh? 0:11:39.360 --> 0:11:39.800 Come on? 0:11:40.520 --> 0:11:43.360 Should we be more fractious like the Bank of England? 0:11:43.920 --> 0:11:47.440 We are what we are? The Bank of England first, 0:11:47.480 --> 0:11:51.360 the of the Buddhist Bank. They would actually try and 0:11:52.200 --> 0:11:53.360 mislead people. 0:11:53.760 --> 0:11:58.120 Fair, I will give you you cut and you say 0:11:58.160 --> 0:12:02.840 you're in these and or Piden and then Volker was 0:12:03.480 --> 0:12:06.040 close to the vest and then. 0:12:05.960 --> 0:12:11.319 Green Span came in and introduced the transparency program. 0:12:11.000 --> 0:12:11.840 Which we have today. 0:12:12.600 --> 0:12:15.920 But you know it's it's going to happen tomorrow, right 0:12:16.040 --> 0:12:19.760 and twenty five or fifty. It's not a killer one 0:12:19.880 --> 0:12:20.440 where the other. 0:12:21.040 --> 0:12:23.400 So how do you think about this US economy in 0:12:23.400 --> 0:12:25.720 the context of the global economy? We've heard about the 0:12:25.800 --> 0:12:29.760 US exceptionalism. Is that something you buy into is it 0:12:29.880 --> 0:12:31.800 new or is it it. 0:12:31.880 --> 0:12:36.960 Is not particularly new? I tend to buy into that story. 0:12:37.080 --> 0:12:41.040 But there have been plenty of plenty of ink spilled 0:12:41.080 --> 0:12:44.720 on this that the US really is an exceptional place 0:12:45.760 --> 0:12:52.440 and compared to Europe, which is not a particularly high bar. Right, 0:12:50.880 --> 0:12:55.960 and then China, I've almost lost touch with China. 0:12:56.760 --> 0:12:58.960 Well let me go there in your acclaimed note, folks 0:12:59.000 --> 0:13:01.760 who protect the copyright of all our guests to get 0:13:01.880 --> 0:13:06.480 Edheim and Julian Emmanuel's work, go to evercore isid. I'm sorry. 0:13:06.480 --> 0:13:10.040 The second derivative on China isn't pretty. You've got China 0:13:10.200 --> 0:13:14.320 M two China Bank loans ugly, ugly ugly. Do you 0:13:14.360 --> 0:13:18.160 have a faith that Beijing could clear the market, almost 0:13:18.160 --> 0:13:21.000 in a Hyekian way? They could come in say we 0:13:21.080 --> 0:13:25.199 got this wrong, straighten it out and rebuild FDI in investment. 0:13:26.080 --> 0:13:32.440 Yes, but no, they're not doing it. And so every 0:13:32.559 --> 0:13:36.080 day in the past, particularly the past two or three months, 0:13:36.559 --> 0:13:41.440 I thought they might come in any day and clear 0:13:41.520 --> 0:13:45.960 the boards. And I've waited and waited and waited, and 0:13:46.200 --> 0:13:50.520 we survey twenty one companies that have sales in China, 0:13:51.640 --> 0:13:54.800 and that survey is twenty nine on a zero to 0:13:54.920 --> 0:13:59.319 one hundred. It's been as high as seventy nine. It's 0:13:59.360 --> 0:14:03.040 been really wrong. And the US sort of a equivalent 0:14:03.240 --> 0:14:07.560 is forty eight. So I mean twenty nine is really bad. 0:14:07.640 --> 0:14:10.920 Yet you still see time and time again. Elon Musk, 0:14:11.160 --> 0:14:15.280 Tim Cook making the pilgrimage to China, because no matter 0:14:15.720 --> 0:14:17.520 what you say, it's still there. 0:14:17.559 --> 0:14:18.440 It's still big. 0:14:18.600 --> 0:14:21.320 The middle class presumably is great. It's all the arguments 0:14:21.360 --> 0:14:22.760 that we've heard of the last twenty or thirty years 0:14:22.800 --> 0:14:26.320 are still true. But the government doesn't seem to be open. 0:14:26.640 --> 0:14:27.440 I guess as. 0:14:27.280 --> 0:14:28.360 It used to be. 0:14:29.360 --> 0:14:32.280 I'm a big China fan, Okay. I'm on the board 0:14:32.320 --> 0:14:36.680 of the China Institute. I have many friends who are Chinese. 0:14:37.000 --> 0:14:43.000 I want to encourage US Chinese relations. But I'm at 0:14:43.000 --> 0:14:45.680 the end of my rope and I'm not sure if 0:14:45.680 --> 0:14:46.480 I'll ever go back. 0:14:47.520 --> 0:14:47.880 Wow. 0:14:48.520 --> 0:14:51.680 And is that simply a reflection of the political environment 0:14:51.720 --> 0:14:55.320 where all you talk about is tariffs here, tariff's there, 0:14:55.480 --> 0:14:57.600 and then on the other side of President g you 0:14:57.640 --> 0:14:58.640 know again, I'm not sure. 0:14:58.960 --> 0:15:00.360 I'm not sure they'll make come back. 0:15:00.520 --> 0:15:01.960 Yeah, okay, uh. 0:15:02.640 --> 0:15:05.040 And we got to finish strong here. We got too 0:15:05.080 --> 0:15:07.360 much going on. The Dow up one hundred points now 0:15:07.440 --> 0:15:11.560 up eighty eight points. The University of Texas is one 0:15:11.560 --> 0:15:14.640 of the few schools in the planet that actually make 0:15:14.760 --> 0:15:21.400 money at sports. Football contributes, basketball contributes, baseball pops six 0:15:21.440 --> 0:15:26.200 million dollars a year at the University a Texas. 0:15:26.240 --> 0:15:28.480 Where is your University of Texas right? 0:15:28.560 --> 0:15:30.600 I mean it's it's I've had the privilege of talking 0:15:30.600 --> 0:15:33.640 to Michael Dell about this, and it just seems like 0:15:33.760 --> 0:15:38.120 everything's moving in the right direction for the academics, the 0:15:38.240 --> 0:15:40.760 athletics of the University of Texas. 0:15:40.840 --> 0:15:42.000 What do you see there right now? 0:15:42.040 --> 0:15:47.000 It's a great school and he shouldn't uh say the 0:15:47.040 --> 0:15:52.040 truth and the truth still set you free? Whoa on 0:15:52.080 --> 0:15:55.920 the tower of the University of Texas. It's just the 0:15:55.960 --> 0:15:59.560 school that does a great job for kids, and I'm 0:15:59.640 --> 0:16:03.280 proud to have gone there. Academically, it's really good. 0:16:03.880 --> 0:16:06.760 Yeaports together like you know, the only equivalent I could 0:16:06.760 --> 0:16:08.120 think of its Michigan. 0:16:08.200 --> 0:16:11.800 Where they do you know, there's place and you know. 0:16:12.320 --> 0:16:15.840 They had football coaches making one tenth of what ed 0:16:15.920 --> 0:16:19.000 Hymen's making. That's a problem, but the answer is that 0:16:19.200 --> 0:16:20.200 they're you know, it's. 0:16:20.000 --> 0:16:22.240 Like a real deal Catholic. 0:16:21.880 --> 0:16:24.600 Like Dukes as well. A generous of you to come 0:16:24.640 --> 0:16:27.760 in again. We wanted to get Julian Emmanuel, but he 0:16:27.840 --> 0:16:29.720 was so we got. 0:16:29.520 --> 0:16:31.840 You to thank you. 0:16:31.960 --> 0:16:37.680 Edmenqu Si with a view to move away from economic 0:16:37.800 --> 0:16:49.280 slowdown to someplace new. We will look for the data. 0:16:51.640 --> 0:16:55.920 A very important interview for all of America within the 0:16:55.960 --> 0:17:00.000 election and the distraction of domestic debate versus our four 0:17:00.120 --> 0:17:05.040 in policy future. Jermani Bertecci had a wonderful conversation with 0:17:05.200 --> 0:17:08.919 the Prime Minister of Iraq, Mohammad Shia al Sudani on 0:17:09.000 --> 0:17:12.120 the tensions of Iraq Iran in the Middle East. 0:17:12.240 --> 0:17:12.879 Let's listen. 0:17:14.560 --> 0:17:19.000 The understanding of this relationship between Iraq and Iran is 0:17:19.040 --> 0:17:23.159 based on mutual interests and mutual respect. Iran is a 0:17:23.200 --> 0:17:27.320 neighboring country and we share one four hundred kilometers and 0:17:27.359 --> 0:17:30.960 that's in our interest to have a close relationship, especially 0:17:30.960 --> 0:17:34.920 that Iran has been supportive of the political process and 0:17:35.119 --> 0:17:39.639 our efforts in combating terrorism. Of course, Iraq is the 0:17:39.680 --> 0:17:42.959 only country in the region that has a special relationship 0:17:43.040 --> 0:17:46.960 between Iran and the United States, and we try through 0:17:46.960 --> 0:17:52.159 this positive characteristic to help in bringing opinions closer. And 0:17:52.240 --> 0:17:56.439 we are interested to have stability in the region away 0:17:56.480 --> 0:18:00.920 from the access policy. We don't want the tense relationships 0:18:00.960 --> 0:18:04.159 and the stances of other countries of the world to 0:18:04.240 --> 0:18:08.760 impact the Iraqi situation. This is our diplomatic effort and 0:18:08.880 --> 0:18:13.280 movements in terms of our bilateral and regional ties. 0:18:15.000 --> 0:18:18.960 The Prime Minister of Iraq Mohammad Shia el Saddani there 0:18:19.440 --> 0:18:23.240 and the distinction always made within the levant and over 0:18:23.320 --> 0:18:27.679 towards Persia is Shia versus Sunni, and it is unusual 0:18:27.720 --> 0:18:31.040 to have a Shia Prime Minister of Iraq as in 0:18:31.160 --> 0:18:35.240 Iran versus a Sunni heritage Jamani Bertecci joins us now 0:18:35.280 --> 0:18:41.560 from Dubai Jamani. Most people across America this morning are 0:18:41.680 --> 0:18:46.000 unaware that there's accountable half a million who lost their 0:18:46.080 --> 0:18:51.080 lives in the Iraq Iranian War of the nineteen eighties. 0:18:51.720 --> 0:18:55.679 How does Iraq and Iran begin to communicate now? 0:18:57.800 --> 0:19:00.320 It's such an interesting perspective that you bring in, and 0:19:00.359 --> 0:19:04.200 that is true the War of the eighties, very historical 0:19:04.240 --> 0:19:06.280 war in the region that probably doesn't get a lot 0:19:06.280 --> 0:19:09.560 of airtime. But the situation today is very different. That 0:19:09.680 --> 0:19:12.639 you have to remember there are a couple of things 0:19:12.640 --> 0:19:16.440 that bind Iraq and Iran together. It's starting with religious 0:19:16.720 --> 0:19:19.400 religious binds. And you've got to think about the two 0:19:19.520 --> 0:19:23.520 holiest site for Shia Islam. That's Najaf and Kharabala. They 0:19:23.520 --> 0:19:26.280 both fall in Iraq. So that is always going to 0:19:26.320 --> 0:19:28.400 be the case, and that's always going to be that 0:19:28.440 --> 0:19:31.280 religious draw and that religious tie that brings them together. 0:19:31.480 --> 0:19:34.240 But increasingly what we are seeing, especially in the last 0:19:34.280 --> 0:19:38.120 couple of years, is they've got politically a lot closer. 0:19:38.400 --> 0:19:40.640 And I had the opportunity to speak with the Prime 0:19:40.680 --> 0:19:43.159 Minister of the course of the weekend, and it is 0:19:43.200 --> 0:19:47.439 worth noting that he does enjoy a parliamenting majority. But 0:19:47.520 --> 0:19:50.840 the reason he enjoys that parliamenting majority is because he's 0:19:50.880 --> 0:19:55.720 been given legitimacy by political groups that are closely supported 0:19:55.760 --> 0:20:00.520 and affiliated to Iran. And so it is very worthy 0:20:00.680 --> 0:20:03.200 that just in the last couple of years, Iraq has 0:20:03.280 --> 0:20:06.520 fostered much closer political relationships to Iran. And one of 0:20:06.520 --> 0:20:09.320 the concerns in the region is that there are several 0:20:09.400 --> 0:20:13.800 non state actors that are again operating within this so 0:20:13.960 --> 0:20:16.800 called axis of resistance, that have been carrying on attacks, 0:20:16.920 --> 0:20:19.680 either US targets or Israeli targets. 0:20:19.720 --> 0:20:24.200 Well, your leadership of the conversation in Dubai, how does 0:20:24.600 --> 0:20:31.280 Sunni Middle East react to a combined Shia Iran and Iraq? 0:20:31.720 --> 0:20:36.520 How does Saudi Arabia, How does UAE create the rest 0:20:36.680 --> 0:20:40.159 out of frankly to the west to Morocco. How do 0:20:40.280 --> 0:20:42.560 they respond to this combination. 0:20:44.160 --> 0:20:48.399 So the impression that I got from speaking to the 0:20:48.400 --> 0:20:51.040 Prime Minister is that they see themselves as somewhat of 0:20:51.040 --> 0:20:53.760 a mediator. Now you will remember again this went under 0:20:53.800 --> 0:20:57.399 the radar, but there was somewhat of a mediation that 0:20:57.480 --> 0:20:59.959 took place between Saudi Arabia and Iran a couple of 0:21:00.080 --> 0:21:04.200 years ago. And everyone gave China the credit for hosting 0:21:04.320 --> 0:21:07.000 the talks between the two countries, but of course one 0:21:07.000 --> 0:21:10.080 being Signy and one being shira But in reality it 0:21:10.240 --> 0:21:13.600 was Iraq operating behind the scenes, going in between the two. 0:21:13.640 --> 0:21:15.760 Now you have to remember there's another link between Iraq 0:21:15.800 --> 0:21:17.879 and Saudi Arabian that is, of course, they're the second 0:21:17.960 --> 0:21:21.480 largest oil producer within OPEK. They're a very important member 0:21:21.480 --> 0:21:24.040 of OPEK. There's a lot of focus obviously within OPAK 0:21:24.080 --> 0:21:28.359 to support oil prices right now, and so Iraq is 0:21:28.440 --> 0:21:32.640 pitching itself as a country that can mediate between oil 0:21:32.680 --> 0:21:36.240 countries and the Gulf and also one that looks to 0:21:36.760 --> 0:21:41.320 enjoy bilateral security relationships with the US once the full 0:21:41.359 --> 0:21:43.240