WEBVTT - US Waits on Iran to Confirm Talks as Ceasefire Winds Down 0:00:02.520 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business app. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.200 us live on YouTube. 0:00:27.600 --> 0:00:30.720 This is the making the Sausage, folks. I have never 0:00:30.800 --> 0:00:35.479 forgiven leguard at Gorgieva for dropping the printing of the 0:00:35.560 --> 0:00:38.920 three books of the IMF World Bank Meetings in the spring. 0:00:39.360 --> 0:00:42.440 I would dutifully paw the airline would tilt to the 0:00:42.560 --> 0:00:45.240 left when I had them on the airline, and I 0:00:45.280 --> 0:00:48.600 would actually read these things, the Bluebook, the Green Book, 0:00:48.880 --> 0:00:51.440 the Brown Book, whatever. And the Green Book is on 0:00:51.520 --> 0:00:55.200 financial stability. The only one left who reads a pdf 0:00:55.360 --> 0:00:58.360 eighty four pages cover to cover the Green Book is 0:00:58.400 --> 0:01:01.760 Alexis Crow, and she joins us right now with the 0:01:01.920 --> 0:01:05.800 PwC thing. You're at the meetings, and I love your 0:01:05.800 --> 0:01:09.480 note because you nail it was the unspoken not spoken there. 0:01:09.520 --> 0:01:11.320 That's always the most important thing. 0:01:11.640 --> 0:01:14.000 Thanks so much, Tom for having me. Yeah, it's always 0:01:14.000 --> 0:01:17.320 fascinating to find out what the Straussian silences are. And 0:01:17.360 --> 0:01:21.880 there obviously everyone's focused on the war currently energy markets, 0:01:21.920 --> 0:01:26.240 fiscal response, monetary policy. People are not asking as you 0:01:26.319 --> 0:01:29.919 highlight on financial stability, which is often the most interesting report. 0:01:30.000 --> 0:01:31.920 So I go to box one that the Paul what 0:01:32.000 --> 0:01:36.800 you do here cliff notes, Okay, executive summary boring. You 0:01:36.800 --> 0:01:39.160 go to box one point one, which is like the 0:01:39.200 --> 0:01:44.360 appendix of eighty four NERD PhD pages. Rising Japanese government 0:01:44.400 --> 0:01:49.280 bond yields could affect global asset allocation, which goes again too. 0:01:49.360 --> 0:01:53.040 These distortions in the yield bark the unspoken to. 0:01:53.000 --> 0:01:56.360 Me one of so these imbalances. There was actually a 0:01:56.400 --> 0:02:00.760 fantastic panel on imbalances. The fiscal imbalances are are very clear. 0:02:02.040 --> 0:02:04.120 I would say that when we look though at where 0:02:04.160 --> 0:02:06.720 equity markets are, one of the reasons why we see 0:02:06.720 --> 0:02:10.240 the Nikke hitting historic high last week SMP as well 0:02:10.600 --> 0:02:12.640 is because of the fiscal We think. 0:02:12.440 --> 0:02:15.400 Of the bonuses PwC has gotten in Seoul. I mean 0:02:15.480 --> 0:02:16.720 Korea's happened. 0:02:17.560 --> 0:02:20.120 It did crash twelve percent right at the start of 0:02:20.120 --> 0:02:23.200 the conflict. The cosby yep, but it's coming back, it's 0:02:23.200 --> 0:02:25.280 coming back, but it's again. I think off the back 0:02:25.320 --> 0:02:29.160 of this fiscal impulse, where we are is that financial 0:02:29.200 --> 0:02:33.119 markets are expecting this bigots to open and we'll pay 0:02:33.160 --> 0:02:33.440 for that. 0:02:33.480 --> 0:02:35.280 Down the line, Alexis. 0:02:35.280 --> 0:02:37.480 We had another guest earned a week that was at 0:02:37.480 --> 0:02:39.440 the IMF and the World Bank Spring meetings, and they 0:02:39.639 --> 0:02:43.600 highlighted the maybe the disconnect between the concern they felt 0:02:43.639 --> 0:02:47.880 at those meetings about geopolitics, about globally economic risk. In fact, 0:02:47.880 --> 0:02:49.600 the markets are hitting all time highs here. 0:02:50.040 --> 0:02:51.440 What do you make of that again? 0:02:51.600 --> 0:02:53.600 I mean, I think if we look at when you've 0:02:53.639 --> 0:02:57.960 had shocks to demand, whether it was concerns on the 0:02:58.000 --> 0:03:01.520 initial waves of protectionism Trump. We know in twenty eighteen 0:03:01.960 --> 0:03:05.200 the sudden economic stops related to the pandemic Russia, Ukraine. 0:03:05.560 --> 0:03:08.400 Even in the wake of Liberation Day, governments have stood 0:03:08.440 --> 0:03:11.320 in and said we will support households and consumers. We've 0:03:11.360 --> 0:03:15.000 seen Madame Legarde yesterday actually highlighting that some of those 0:03:15.040 --> 0:03:17.880 measures need to be very tailored to the lowest part 0:03:17.919 --> 0:03:20.760 of the income distribution, otherwise monetary policy will have to 0:03:20.800 --> 0:03:23.680 step in and over titan. So it is building up 0:03:23.680 --> 0:03:25.920 in balances, but we just keep kicking the check in 0:03:25.960 --> 0:03:26.600 the overdraft. 0:03:26.639 --> 0:03:30.480 Down the line, how about the sense of the US 0:03:30.560 --> 0:03:35.200 as a safe haven that took a big hit last year, 0:03:36.680 --> 0:03:40.480 have we removed that risk? Or how does the participants 0:03:40.520 --> 0:03:42.560 in that meeting, how did they view the US These days. 0:03:42.440 --> 0:03:45.480 It's really fascinating to watch the performance of safe haven 0:03:45.480 --> 0:03:48.560 assets coming out of this conflict. So right at the 0:03:48.560 --> 0:03:50.920 start of the conflict, I would say yields on the 0:03:50.960 --> 0:03:53.640 tenure absolutely should have been falling more than they did. 0:03:54.040 --> 0:03:57.000 Dxy should have rallied and should continue to rally more 0:03:57.040 --> 0:04:00.000 than it has. The shekel hit a thirty year high 0:04:00.200 --> 0:04:05.560 against the dollar yesterday. So this debasement trade, the diversification trade, 0:04:05.600 --> 0:04:08.120 some of these numbers tell me, is not over. Okay, 0:04:08.600 --> 0:04:11.800 it's certainly not as dramatic as it was in the 0:04:11.800 --> 0:04:15.840 wake of Liberation Day, but for qualitative reasons and quantitative reasons, 0:04:15.840 --> 0:04:17.280 investors are looking elsewhere. 0:04:18.880 --> 0:04:22.120 But it just seems like the dollar, you know, certainly 0:04:22.160 --> 0:04:26.239 when we had the war kickoff, well the xy innx 0:04:26.279 --> 0:04:29.120 popped right back to one hundred from ninety six level, 0:04:29.200 --> 0:04:31.159 so it seemed like it had that safe haven. But 0:04:31.200 --> 0:04:33.080 now we're kind of bleeding off a little bit here 0:04:33.240 --> 0:04:33.760 in the dollar. 0:04:33.839 --> 0:04:35.760 Yet again it is and if you look at where 0:04:35.800 --> 0:04:37.440 we are, if you look at a five year average, 0:04:37.480 --> 0:04:40.840 it's not as impressive. You came up nine hundred basis 0:04:40.839 --> 0:04:44.800 points right after the start of January twenty twenty five 0:04:44.880 --> 0:04:46.240 with the expectation. 0:04:45.760 --> 0:04:46.760 Of drag et cetera. 0:04:47.520 --> 0:04:50.760 So I would say it's it's not as impressive as 0:04:50.839 --> 0:04:52.719 one would think private credit. 0:04:52.720 --> 0:04:55.200 How much of a concern is it to Global Wall 0:04:55.240 --> 0:04:57.120 Street here? I mean, we've had a lot of folks, 0:04:57.640 --> 0:05:00.400 including the banks that just reported saying it's not issue, 0:05:00.400 --> 0:05:03.000 even the regional banks that just report it not an issue. 0:05:03.200 --> 0:05:04.800 How did the folks at the IMF and the World 0:05:04.800 --> 0:05:05.479 Bank think about that? 0:05:05.760 --> 0:05:08.480 Still, I think the consensus is not systemic because it 0:05:08.560 --> 0:05:12.800 is a slender part of the overall lending platform. It's 0:05:12.839 --> 0:05:15.279 not that jesibs are it's not a heavy part of 0:05:15.320 --> 0:05:19.360 their lending. But interestingly enough, you had several Central Bank 0:05:19.400 --> 0:05:24.000 deputy governors and governors saying, guess what, there were also 0:05:24.200 --> 0:05:27.400 moments in credit markets that were also a slender part 0:05:27.400 --> 0:05:29.839 of the credit market that had a contagion effect and 0:05:29.880 --> 0:05:32.680 had a runnable scenario, So we have to look out 0:05:32.720 --> 0:05:32.960 for that. 0:05:33.240 --> 0:05:34.000 I would say. 0:05:34.160 --> 0:05:36.839 The other thing that people were not talking about is 0:05:36.960 --> 0:05:40.799 dreg in the US traditional banking sector and the impact 0:05:40.800 --> 0:05:44.200 that that might have further down the line, you actually 0:05:44.200 --> 0:05:48.960 have the US jesibs having very healthy profitability not necessarily 0:05:49.000 --> 0:05:52.479 needing to reduce capital requirements, and that I think is 0:05:52.520 --> 0:05:54.720 something that was silent that should be spoken about. 0:05:54.880 --> 0:05:59.080 Can I rip up the script? Rip okay? You darken 0:05:59.120 --> 0:06:02.960 the doors saying wandered down? I think it was Yeah, 0:06:03.120 --> 0:06:06.960 she played golf there. I tried, you tried. Do you 0:06:07.000 --> 0:06:10.279 have a favorite soccer team? Do you have a football team? 0:06:10.480 --> 0:06:13.920 I liked Liverpool, Liverpool they always when, they never when 0:06:13.960 --> 0:06:16.800 was the last day in Liverpool? I mean, they're always good. 0:06:16.920 --> 0:06:17.960 This is my teenage day. 0:06:18.080 --> 0:06:20.880 Coventry came up, which is they're coming up from the 0:06:20.920 --> 0:06:25.760 minor leagues. Uh, Wolver something was declined yesterday and the 0:06:25.800 --> 0:06:29.600 Tots are about ready to go down, which is unbelievable. 0:06:30.160 --> 0:06:32.920 What state of the United Kingdom? I mean, the King 0:06:33.040 --> 0:06:37.520 Charles was really emotional about the Queen's hundredth birthday. I think, 0:06:37.560 --> 0:06:39.320 are they still coming over to America? 0:06:39.520 --> 0:06:40.000 I think so? 0:06:40.320 --> 0:06:43.520 I mean, what is a state of your United Kingdom 0:06:43.520 --> 0:06:45.360 with all your brilliant academics there. 0:06:46.200 --> 0:06:49.360 Well, it's benefiting from a little bit of an offset 0:06:49.400 --> 0:06:52.159 from the US. Right, You've had record numbers of US 0:06:52.200 --> 0:06:56.680 applications for seasonship in the UKA and residency. So it 0:06:56.760 --> 0:06:57.640 is still benefiting. 0:06:57.839 --> 0:06:59.400 And you know what, Tom, it's. 0:06:59.440 --> 0:07:02.960 Asset management that thrives and lives on. It's not the 0:07:03.000 --> 0:07:07.120 traditional investment banking, not traditional insurance, but asset management. Because 0:07:07.160 --> 0:07:09.760 hedge fund wives would prefer to live in London to Frankfurt, 0:07:10.560 --> 0:07:14.440 and so this is actually something it's actually quite robust 0:07:14.720 --> 0:07:16.440 that The difference here, and you're going to hate me 0:07:16.480 --> 0:07:20.120 for this, the difference here is that the conversation generally 0:07:20.160 --> 0:07:22.800 tends to be quite myopic in contrast with the rest 0:07:22.840 --> 0:07:25.080 of the continent. So you're still looking back to the 0:07:25.120 --> 0:07:27.760 Brexit question and the referendum question. 0:07:28.480 --> 0:07:32.560 This is a basic question for Americans. If Roger becomes 0:07:32.640 --> 0:07:35.760 Prime minister, does he trumpify the United Kingdom? 0:07:36.040 --> 0:07:38.040 What does that look like? We've talked about this in the. 0:07:38.000 --> 0:07:45.480 Past, But does that mean, you know, an acceleration of 0:07:45.600 --> 0:07:49.480 the foundations and the institutions and questioning institutional integrity. I mean, 0:07:49.480 --> 0:07:52.000 I think that's that's one question mark. The other thing 0:07:52.280 --> 0:07:54.800 that we should think about is the rise of the 0:07:54.880 --> 0:07:56.520 right is not your dad's GOP. 0:07:57.000 --> 0:07:58.080 The rise of the right. 0:07:58.000 --> 0:08:02.400 Is not traditional obviously less fair uh free markets, and 0:08:02.480 --> 0:08:05.600 so what we work with our clients to think about, 0:08:05.760 --> 0:08:08.720 is where can the government actually intervene, even if you've 0:08:08.760 --> 0:08:11.640 been supportive of a government into your business, And how 0:08:11.640 --> 0:08:13.520 does your share price take a tumble off the back 0:08:13.560 --> 0:08:13.720 of that? 0:08:14.160 --> 0:08:17.160 Can you get tickets for Paul to Royal Birkdale Golf 0:08:17.200 --> 0:08:19.640 Club July? Nice? Pretty sure? 0:08:19.680 --> 0:08:21.120 Open Champion, the Open champ. 0:08:21.200 --> 0:08:25.239 It's my favorite, isn't it like the worst? Like rough 0:08:25.280 --> 0:08:27.440 and all that. It's just weather. 0:08:27.560 --> 0:08:31.400 It's just weather the United Kingdom. You know it's nay 0:08:31.440 --> 0:08:33.079 when it's nay golf, So that's how they do it. 0:08:33.160 --> 0:08:35.360 It's going. I mean, is it a long walk from 0:08:35.400 --> 0:08:37.200 Saint Andrews to the fancy golf clubs? 0:08:37.200 --> 0:08:39.880 I think it's like no, it's right there, it's right there, 0:08:39.920 --> 0:08:40.400 right there. 0:08:40.480 --> 0:08:40.720 Yeah. 0:08:40.880 --> 0:08:44.000 I mean, you shank your ball on number eighteen, you're 0:08:44.080 --> 0:08:47.679 right in front of the last class exactly. 0:08:48.600 --> 0:08:50.240 Thank you so much for coming in today. Well you 0:08:50.280 --> 0:08:53.080 could make this like a three hour conversation here. What's 0:08:53.120 --> 0:08:56.960 going on? Is PwC optimistic on the American economy? Just 0:08:57.000 --> 0:08:57.800 as simple as. 0:08:57.679 --> 0:09:00.640 That demand is strong? Right, demand is strong, and it's 0:09:00.679 --> 0:09:04.720 it's still teetering on that twin engine of AI related 0:09:04.760 --> 0:09:08.439 investment spend data centers, but also consumption. Consumption is strong 0:09:08.480 --> 0:09:09.199 across income. 0:09:09.440 --> 0:09:12.320 You're seeing a productivity thing pop in. Whether it is or. 0:09:12.360 --> 0:09:15.200 Is not a bad debate is still out for the 0:09:15.280 --> 0:09:17.679 highest skilled part of the income or for the highest 0:09:17.720 --> 0:09:21.040 skilled part of the skilled distribution. I have not seen 0:09:21.080 --> 0:09:23.320 the productivity impact thatmer from AI. 0:09:23.559 --> 0:09:23.880 Correct. 0:09:23.960 --> 0:09:28.960 I agree? I agree? Okay, Thank you, Rick. Alexis Crow 0:09:29.080 --> 0:09:32.720 always so much for being with us this morning air 0:09:32.800 --> 0:09:36.560 with PwC with some really really good perspective. Of course, 0:09:36.559 --> 0:09:40.800 her attendance at the IMF meeting's partner Chief Economists PwC 0:09:41.040 --> 0:09:46.560 us stay with us. More from Bloomberg Surveillance coming up 0:09:46.760 --> 0:09:47.319 after this. 0:09:54.559 --> 0:09:58.160 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:09:58.240 --> 0:10:01.360 weekday afternoons from seven to ten AM's durn Listen on 0:10:01.480 --> 0:10:04.880 Apple Karplay and Android Otto with the Bloomberg Business up, 0:10:05.040 --> 0:10:06.800 or watch us live on YouTube. 0:10:07.080 --> 0:10:09.840 They're really good. Becha Wasser in here in Washington quickly 0:10:09.880 --> 0:10:12.640 here on the meetings to come up in Islam about 0:10:12.679 --> 0:10:17.360 as well. She is definitive on defense at Bloomberg Economics. 0:10:17.360 --> 0:10:22.360 Becca will the military representatives of Iran show up? Or 0:10:22.440 --> 0:10:26.840 is it basically the politicians and the theology that shows. 0:10:26.640 --> 0:10:30.480 Up well, I think great now Iran is sending who 0:10:30.480 --> 0:10:33.640 it is that they can send. There has been significant 0:10:33.679 --> 0:10:36.320 changes in their leadership, to say the least, after US 0:10:36.320 --> 0:10:40.840 and Israeli strikes on keynodes of the Iranian system. So 0:10:41.080 --> 0:10:43.440 I think who they get is who they get. But 0:10:43.640 --> 0:10:45.920 you know, the US is sending the vice presidents, and 0:10:45.960 --> 0:10:48.320 so one would hope that they would come at a similar, 0:10:48.400 --> 0:10:49.640 if not comparable level. 0:10:50.320 --> 0:10:52.240 Becca if there is no peace agreement. 0:10:52.559 --> 0:10:56.600 We understand that the ceasefire, as per President Trump ends 0:10:57.320 --> 0:11:02.480 tomorrow Wednesday evening Washington time. Is the expectation that hostilities 0:11:02.480 --> 0:11:04.680 will resume if there is no extension. 0:11:05.960 --> 0:11:08.160 I think if there is no extension of the ceasefire, 0:11:08.240 --> 0:11:10.760 we can expect to see the blockade continue. We can 0:11:10.840 --> 0:11:15.080 also expect to see additional strikes. President Trump himself has 0:11:15.360 --> 0:11:18.720 threatened that strikes would continue if a deal was not struck. 0:11:19.040 --> 0:11:22.600 This could be read as political pressure put on ran 0:11:22.760 --> 0:11:25.000 to get them to come to the negotiating table and 0:11:25.040 --> 0:11:28.600 capitulate to his demands and to make concessions in those 0:11:28.679 --> 0:11:32.960 negotiating negotiations. But I think really what it comes down 0:11:33.000 --> 0:11:37.840 to is if there is no deal, hostilities will escalate 0:11:38.080 --> 0:11:41.000 and we can see this conflict go on for a 0:11:41.040 --> 0:11:45.400 little bit longer, if not a much longer period of time, Becka. 0:11:45.480 --> 0:11:48.120 President Trump has recently tweeted that the blockade has been 0:11:48.120 --> 0:11:50.920 a tremendous success and that the US totally controls the 0:11:50.960 --> 0:11:54.760 Strait of Hoour moves is that the feeling in kind 0:11:54.760 --> 0:11:57.800 of wider circles there because it doesn't seem to be 0:11:57.880 --> 0:12:00.520 much oil flowing in around of the strait these days. 0:12:01.679 --> 0:12:04.080 Well, I think it depends on what circles you are 0:12:04.160 --> 0:12:06.760 talking to. If you are talking to the US military. 0:12:06.840 --> 0:12:10.200 US Central Command has said that twenty seven ships have 0:12:10.320 --> 0:12:14.839 been disabled or diverted, but if you look at data, 0:12:14.960 --> 0:12:19.400 for example, from Lloyd's lists, they suggest that about twenty 0:12:19.480 --> 0:12:21.880 six ships have actually been able to make it through 0:12:21.920 --> 0:12:25.960 the blockade despite US enforcement. So at the end of 0:12:25.960 --> 0:12:28.760 the day, the question of is the straight open or closed? 0:12:28.840 --> 0:12:31.240 It seems as though it's largely closed. But the folks 0:12:31.240 --> 0:12:34.959 who really decide whether it's open or the shippers, Becka. 0:12:34.800 --> 0:12:37.880 Do we have any understanding And I've seen this way 0:12:37.920 --> 0:12:41.720 that way in the zeitgeist. Are we running out of missiles? 0:12:41.760 --> 0:12:45.040 Just as simple as that, I can't get a straight answer. 0:12:45.040 --> 0:12:45.840 What do you see? 0:12:46.880 --> 0:12:49.880 So the answer is no, the United States is not 0:12:50.040 --> 0:12:53.360 running out of missiles. However, what it is doing is 0:12:53.400 --> 0:12:58.520 it is mortgaging its future in terms of security with missiles. 0:12:58.520 --> 0:13:02.760 There are sufficient stockpiles for today for what is needed, 0:13:02.920 --> 0:13:07.520 but what is dwindling is the rate of those stockpiles. 0:13:07.760 --> 0:13:10.320 So this means that the US military might be less 0:13:10.320 --> 0:13:13.800 prepared for potential future crises that they might face, which 0:13:13.840 --> 0:13:16.400 is why there's so much effort going on to rebuilding 0:13:16.440 --> 0:13:19.000 those stockpiles and why you see such an emphasis on 0:13:19.120 --> 0:13:21.960 munitions and the current DOO D budget. 0:13:22.120 --> 0:13:24.520 I was in Washington yesterday. I wonder at the office, 0:13:24.600 --> 0:13:27.079 you know, I mean looking for Becca. I can't find her. 0:13:27.240 --> 0:13:28.840 I mean, you know, she's just a player. She's deep 0:13:28.880 --> 0:13:32.240 and let you exactly. She's probably in some bunker somewhere 0:13:32.679 --> 0:13:35.839 and there's Tony Cabaco there. Becca. From where you sit, 0:13:36.600 --> 0:13:41.400 is the Pentagon communicating with the press upset that we 0:13:41.520 --> 0:13:44.960 have where the normal press is not invited into the 0:13:45.000 --> 0:13:47.920 press conferences? Are we getting the full picture? 0:13:49.480 --> 0:13:51.400 I mean, I think we're getting a certain level of 0:13:51.400 --> 0:13:55.599 transparency with those continued press conferences that we've seen. Secretary 0:13:55.640 --> 0:13:59.040 of Defense Pete Hegseth and Chairman of the Joint Chiefs 0:13:59.080 --> 0:14:02.839 of Staff Dan Caine run But that doesn't mean that. 0:14:02.840 --> 0:14:03.680 It's the full picture. 0:14:03.720 --> 0:14:05.959 They're giving the good news story that they want to give, 0:14:06.000 --> 0:14:08.320 they're giving the data that they want to provide. The 0:14:08.360 --> 0:14:11.679 transparency is welcome, But until you have a free press 0:14:11.679 --> 0:14:15.439 who can actually question whether the statistics are real, whether 0:14:15.520 --> 0:14:17.960 they are getting the full story, that's when you know 0:14:18.000 --> 0:14:19.520 you're missing a critical step. 0:14:19.760 --> 0:14:23.200 So what's your question to the Secretary of Defense right now? 0:14:24.640 --> 0:14:27.600 Are you prepared for future crises? You can do what 0:14:27.640 --> 0:14:30.200 you need to do for today, but are you able 0:14:30.280 --> 0:14:34.360 to have the stockpiles, the readiness for what might happen 0:14:34.560 --> 0:14:37.680 potentially for higher and conflict in the Indo Pacific? 0:14:37.920 --> 0:14:38.520 Are you ready? 0:14:38.640 --> 0:14:40.480 Listen, when you go to brand Ice, you say, you 0:14:40.480 --> 0:14:43.400 don't say the Pacific Ocean, you say the Indo Pacific. 0:14:43.400 --> 0:14:46.200 That's the way they roll at Brandi's beck that what 0:14:46.240 --> 0:14:49.680 you're telling me is this trip of President Trump to China. 0:14:50.320 --> 0:14:52.480 I guess they're going to wander buy and see President 0:14:52.520 --> 0:14:55.160 g I mean, this is like a big deal, right, 0:14:55.240 --> 0:14:57.359 This is not like some you know, may distraction. 0:14:58.560 --> 0:15:01.080 No, it's a huge deal. It's a huge deal, and 0:15:01.120 --> 0:15:04.840 it's something that frankly, President Trump has prioritized and made 0:15:04.840 --> 0:15:07.640 an equally big deal about, in part because he's tried 0:15:07.640 --> 0:15:11.120 to play both sides a conciliatory tone towards China that 0:15:11.360 --> 0:15:13.120 is a little bit different than what we've seen in 0:15:13.200 --> 0:15:16.640 previous administrations, will at the same time trying to be 0:15:16.840 --> 0:15:19.960 tough on China on certain issues. We've seen that initially 0:15:20.000 --> 0:15:22.800 with tariffs witch have since come down. So at the 0:15:22.920 --> 0:15:24.920 end of the day, it really is going to be 0:15:25.000 --> 0:15:28.120 quite telling about what the future of that relationship looks like, 0:15:28.560 --> 0:15:32.080 as well as the view of what American power is 0:15:32.320 --> 0:15:35.040 around the globe. That's what that meeting is going to 0:15:35.040 --> 0:15:36.840 help us determine. 0:15:36.400 --> 0:15:40.520 Beca should we be concerned or should we question the 0:15:40.560 --> 0:15:43.560 fact that Secretary of State Rubio and the State Department 0:15:43.600 --> 0:15:46.360 appear to be nowhere in sight as it relates to 0:15:46.400 --> 0:15:49.320 what's going on in ouran and then negotiations and I 0:15:49.320 --> 0:15:50.840 don't know Secretary stuff. 0:15:52.040 --> 0:15:55.320 I think President Trump has decided who his point people are. 0:15:55.400 --> 0:15:59.240 He has been very, very dependent on Steve Whitcoff, on 0:15:59.320 --> 0:16:03.920 Jared Kush, as well as making Vice President jd Vance 0:16:04.040 --> 0:16:07.360 own part of this file so you know, I would 0:16:07.360 --> 0:16:09.560 probably say three is a crowd. If you add one 0:16:09.600 --> 0:16:11.840 more in, it might get a little bit complicated. But 0:16:11.920 --> 0:16:14.680 I also think that Secretary of State Rubio has a 0:16:14.800 --> 0:16:17.360 number of different files that he is in charge of, 0:16:17.720 --> 0:16:20.400 including those in the Western hemisphere, and I think he's 0:16:20.440 --> 0:16:23.520 quite content to work on those, in part because of 0:16:23.560 --> 0:16:25.680 how contentious these negotiations are. 0:16:25.840 --> 0:16:27.960 Are we going to have a final question? Backer are 0:16:28.000 --> 0:16:30.960 we going to have a budget shock because of all this? 0:16:31.320 --> 0:16:32.840 I mean, that's a hard of what you're doing for 0:16:32.880 --> 0:16:36.160 Annawang and all of economics. Are we just do we 0:16:36.200 --> 0:16:39.480 need to be stealed for a defense budget shock? 0:16:41.040 --> 0:16:43.200 I mean, I just look at the request. It's a 0:16:43.280 --> 0:16:47.240 one point five trillion dollar request. Does the Pentagon expect 0:16:47.280 --> 0:16:51.040 to get that much? Probably not. It's a maximalist request 0:16:51.080 --> 0:16:53.200 at this point in time. But if you look at 0:16:53.400 --> 0:16:56.960 the enormous amount of missiles that have been expended just 0:16:57.040 --> 0:16:59.240 in the Iran conflict alone, if you look at the 0:16:59.320 --> 0:17:04.840 levels of readiness with double tap carrier deployment, you are 0:17:04.960 --> 0:17:06.919 going to expect to see a bill for that. And 0:17:06.920 --> 0:17:08.840 that's a bill that's going to come do later, not 0:17:09.000 --> 0:17:11.240 right now. So I do think that there is going 0:17:11.280 --> 0:17:12.679 to be a little bit of a shock, but it 0:17:12.800 --> 0:17:14.280 is going to compound over time. 0:17:14.440 --> 0:17:17.159 Spectacular brief Beka Wasser, thank you, thank you, thank you. 0:17:17.200 --> 0:17:20.000 With Bloomberg Economics, they are on defense, answering a lot 0:17:20.040 --> 0:17:22.919 of the questions of Paul and I have because it's confusing. 0:17:23.200 --> 0:17:25.040 Oh yeah, yeah, you know, that's all there. 0:17:24.960 --> 0:17:29.760 Is to it. Stay with us. More from Bloomberg Surveillance 0:17:29.840 --> 0:17:31.160 coming up after this. 0:17:38.440 --> 0:17:42.000 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:17:42.080 --> 0:17:45.240 weekday afternoons from seven to ten am Eastern Listen on 0:17:45.320 --> 0:17:49.000 Applecarplay and Android Otto with the Bloomberg Business app, or 0:17:49.119 --> 0:17:50.640 watch us live on YouTube. 0:17:51.040 --> 0:17:54.359 Troy Gaisky with us here, who on a ninety day 0:17:54.400 --> 0:17:56.639 basis looks at all the stocks he's losing money on. 0:17:56.760 --> 0:18:00.520 He's chief market strategies, future standard. I haven't asked this 0:18:00.640 --> 0:18:03.919 on air yet. Would you prefer twice a year or 0:18:03.960 --> 0:18:08.919 four times a year earnings report on amalgamated chin strap 0:18:08.960 --> 0:18:12.119 that you're you know, on way too many shares of Yeah. 0:18:12.119 --> 0:18:15.240 Look, I would say one of the advantages we've seen 0:18:15.680 --> 0:18:18.920 for in one of the drivers of companies going private 0:18:19.000 --> 0:18:22.199 or staying private longer. We could talk about them re 0:18:22.320 --> 0:18:26.679 ipoing later has been you can focus more on medium 0:18:26.720 --> 0:18:29.240 to long term growth, right, because it's all about growth 0:18:29.240 --> 0:18:32.359 in the equity part of capital structure, you know, the 0:18:32.640 --> 0:18:35.080 continuous quarterly reporting. This put a lot of pressure on 0:18:35.119 --> 0:18:38.480 management to be a little too short term focused. So 0:18:38.520 --> 0:18:40.760 that could be a healthy development tom but obviously capital 0:18:40.760 --> 0:18:42.200 markets are going to brush back really hard. 0:18:42.840 --> 0:18:45.879 Interesting to say. The least Paul's been talking about on 0:18:46.040 --> 0:18:49.960 morning is Troy Guyeski is streuture standard? Are you going 0:18:50.040 --> 0:18:53.960 to participate? Is this the right phrase? The musk ipo? 0:18:54.200 --> 0:18:58.440 Oh, that's right, SpaceX, right, are we Yeah, yeah. 0:18:58.560 --> 0:19:01.359 We'll look so through some of our our venture capital portfolios. 0:19:01.400 --> 0:19:04.160 We have exposure on behalf of clients and so yes, 0:19:04.760 --> 0:19:08.399 there will be participation in that on the behalf of 0:19:08.480 --> 0:19:10.639 our clients. But in terms of taking a position in 0:19:10.680 --> 0:19:13.399 the IPO itself, the answer is no. You know, our 0:19:13.440 --> 0:19:16.680 liquid multi strategy really doesn't trade I pos out of 0:19:16.760 --> 0:19:21.080 the open and look, we wish the best for those 0:19:21.200 --> 0:19:24.119 late stage private offerings, but as you know, you know, 0:19:24.240 --> 0:19:27.760 as they get funded later and later, the valuations tend 0:19:27.800 --> 0:19:29.679 to creep up, up and up and up. I mean, 0:19:29.720 --> 0:19:32.600 the one advantage SpaceX has over open AI and entropic. 0:19:33.080 --> 0:19:36.280 In this race of jillion dollar I pos is, there 0:19:36.440 --> 0:19:40.280 is some diversification benefit. If you look at open A andthropic, 0:19:40.600 --> 0:19:42.800 you know, they're very similar to hyperscalers, but at least 0:19:42.840 --> 0:19:45.239 in SpaceX you're getting a different growth vertical that can 0:19:45.280 --> 0:19:50.120 provide some degree diversification and may cause institutions to pay 0:19:50.119 --> 0:19:51.800 a bit more All vertical. 0:19:52.280 --> 0:19:56.440 Yeah, that's you know, say vertical. It's impressive, Troy. 0:19:56.480 --> 0:19:58.119 We had to sell off in the market, you know, 0:19:58.240 --> 0:20:00.879 right around the beginning end of the Rand war, but 0:20:00.920 --> 0:20:07.560 then we had a sharp rebound here blinked you miss there? Right? 0:20:07.760 --> 0:20:08.840 What do you make of that there? 0:20:08.880 --> 0:20:11.080 Yeah, you know it's really crazy. You know when you 0:20:11.200 --> 0:20:17.560 go back in really, since the Eurozone crisis, every correction slash. 0:20:17.359 --> 0:20:20.440 Bear market, mini bear market has been V shaped, with 0:20:20.640 --> 0:20:23.520 the exception of twenty twenty two, right, And you think 0:20:23.560 --> 0:20:26.520 about the reason that wasn't V shaped. Is it just 0:20:26.600 --> 0:20:29.400 took so long for markets to just to materially higher 0:20:29.400 --> 0:20:30.960 front end rates. And the Fed's going from zero to 0:20:31.000 --> 0:20:33.520 five and a quarter and they're draining money supply at 0:20:33.560 --> 0:20:35.280 the fastest pace since the Great Depression. 0:20:35.359 --> 0:20:36.480 And that was an accident. 0:20:36.600 --> 0:20:40.399 Obviously, this time was on purpose, you know when you 0:20:40.440 --> 0:20:43.160 think of the technicals behind that. So we talked about 0:20:43.200 --> 0:20:45.600 this in the past to some extent. Where you have 0:20:45.760 --> 0:20:48.720 a long only buyer base, or a retail buyer base 0:20:49.040 --> 0:20:52.360 that's been conditioned to never sell right, just hold through. 0:20:53.040 --> 0:20:55.800 Then what happens is you get this seismic shift. 0:20:56.040 --> 0:21:00.240 Tariffs, Iran war, The large multi strate hedge funds start 0:21:00.320 --> 0:21:04.280