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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. Should

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Speaker 1: we talk to somebody who actually manages real money? I mean,

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Speaker 1: that's part of the charm of Bob Michael and others here.

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Speaker 1: There's people that are strategists only, and then there's people

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Speaker 1: that actually enjoy losing money when things go wrong. This

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Speaker 1: dog log normal, I mean, Jim Karen join us in

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Speaker 1: New York. Morgan Stanley Investment Management, Fixed Income Portfolio Manage

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Speaker 1: to Jim, Great to see you. Let's talk about some

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Speaker 1: of the challenges out there at the moment. Are you

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Speaker 1: happy with some of the toad has been deployed? Um?

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Speaker 1: Not not from the fat not so far. I mean

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Speaker 1: interest rate cutting, interest rates, it's like you know, bringing

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Speaker 1: a knife to a gunfight, you know at this point,

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Speaker 1: because it's really about the credit markets. And you know,

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Speaker 1: what we apply whenever these crisis events happen is what

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Speaker 1: we call a triple A framework. And the triple A

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Speaker 1: framework is affordability of credit, accessibility of credit, and then

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Speaker 1: risk appetite. All three of these have to have to

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Speaker 1: work together. Affordability, the FED can lower interest rates, and

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Speaker 1: as as you're bringing up earlier, interest rates are actually

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Speaker 1: lower for investment grade credit to day, so the borrowing

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Speaker 1: costs is low and that's good. Um, the accessibility. Are

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Speaker 1: the capital markets open? Are they able to issue their

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Speaker 1: debt that needs to get going again? And then will

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Speaker 1: people actually buy those bonds? Is the other question, Jim,

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Speaker 1: How worries should I be about the small to medium

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Speaker 1: sized enterprises? Otherwise viable business has gone through a really,

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Speaker 1: really tough time right now. Can they make it to

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Speaker 1: the middle of the year. Isn't that actually a big question? So, Jonathan,

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Speaker 1: I'm glad you're talking about that. Not a lot of

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Speaker 1: people are. That is the most important thing that we

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Speaker 1: should talk about at this point. The large corporations and

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Speaker 1: investment grade and all these indices, they can access to

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Speaker 1: capital markets, plenty of liquidity. They have no problems. Small

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Speaker 1: and midsized business. This is a life blood of the U.

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Speaker 1: S economy. They employ six the people. This is jobs.

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Speaker 1: Jobs feeds into consumption. Consumption feeds into g D p.

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Speaker 1: What we need to see is more support mechanisms for

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Speaker 1: these for these businesses to get bridge loans, because these

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Speaker 1: are these are as. I like to say, these are

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Speaker 1: ten thousand companies that borrow from ten thousand banks that

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Speaker 1: you've never heard of, that really are the lifeblood. But

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Speaker 1: Jim Karen, how do you do the X axis if

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Speaker 1: we're talking about a medical event. I mean, to be fair,

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Speaker 1: this virus could be good news, clear itself medically from

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Speaker 1: a realological standpoint in weeks and we move on. I

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Speaker 1: doubt that, but hey, that's one theory. How do you

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Speaker 1: do the X axis of assistance to small business? Well,

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Speaker 1: I think you overdo it to to make sure that

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Speaker 1: we don't have a big problem. Right. So, so so

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Speaker 1: the way that you do these things is you have

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Speaker 1: to start to come up with these lending problems, Like

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Speaker 1: the ECB has a nice toolkit to lend directly to

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Speaker 1: these small and midsized enterprise. The way that it works,

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Speaker 1: you know, for the FED is they may have to

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Speaker 1: open up certain programs where they tell the big banks,

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Speaker 1: like remember remember September two thousand, A team we had

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Speaker 1: a big spike and repo rates. That's the big banks,

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Speaker 1: not lending to the small banks, who then lent to

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Speaker 1: the who then lent to small business. What we need

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Speaker 1: to do is have some regulatory changes to make sure

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Speaker 1: liquidity is flowing so that these small businesses can roll

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Speaker 1: over their loans and these midsize and small banks can

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Speaker 1: also continue to make these bridge loans and make sure

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Speaker 1: that their backstop so that the credit can continue to flow.

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Speaker 1: And if that, if that works over the next couple

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Speaker 1: of months, we get through the virus, then we have

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Speaker 1: a viable business to bounce back. If not, we don't

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Speaker 1: have a viable business. This is critical. It's called building

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Speaker 1: the bridge to get to the middle of the year.

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Speaker 1: We've got a health shock, a health crisis. It will pass,

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Speaker 1: and it probably will pass by the middle of this year.

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Speaker 1: It all depends on what state these small and medium

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Speaker 1: sized enterprises are actually in once we get there, and

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Speaker 1: that will define the shape of the recovery. Absolutely that

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Speaker 1: will define the upslope. I want to get my hands

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Speaker 1: around the risk we face between now and then. If

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Speaker 1: I don't see these tools deployed, are we talking about

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Speaker 1: bankruptcys and sames? Are we talking about airlines going under?

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Speaker 1: I don't want to lay on thick. This show has

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Speaker 1: been really, really careful over the last couple of weeks,

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Speaker 1: just to be very, very delicate about the position we're in.

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Speaker 1: But I think that questions we need to ask you. Yeah,

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Speaker 1: So so it goes back to risk, appetite and willingness

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Speaker 1: to land. Right. So what we see here is that

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Speaker 1: demand is not being destroyed, but it's being delayed. I mean,

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Speaker 1: we we came into this event, you know, with relatively

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Speaker 1: strong footing, and I think that most people would see

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Speaker 1: this as a viable opportunity to make these loans to

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Speaker 1: get people to the middle of the year, because it's

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Speaker 1: gonna be a good it's gonna be a good investment,

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Speaker 1: it's gonna be a good opportunity. So it's not like

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Speaker 1: this is ah, this is an event that took place

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Speaker 1: and we don't know what the end looks like. We

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Speaker 1: believe that we do know what the end looks like.

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Speaker 1: It's a question of the time and the passing the virus.

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Speaker 1: Really important observation, John. This came after my six hour

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Speaker 1: day yesterday. My last interview was with Alan Blinder of Princeton,

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Speaker 1: the former vice chair and LISA vice chairman. Blinder was

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Speaker 1: adamant Okay, it's a supply shock, it's a virus, but

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Speaker 1: guess what, it's still a demand discussion, is Mr Karen mentioned? Well, absolutely,

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Speaker 1: because whether people are going to travel matters with these

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Speaker 1: companies and whether they're going to survive. I'm wondering there

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Speaker 1: was so much discussion about lending moving away from banks

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Speaker 1: to private equity, to private credit to smaller firms, and

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Speaker 1: isn't this sort of stress testing them. Aren't they supposed

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Speaker 1: to be swooping in here and actually fulfilling their function.

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Speaker 1: So at least this is this is a good point here, right,

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Speaker 1: So the regulatory environment has pushed these the banks out

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Speaker 1: of that business and it's gone more to the private side,

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Speaker 1: more to private equity and things like that to create financing. Well,

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Speaker 1: these these guys are not the JP Morgan's, They're not

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Speaker 1: the Bank of American's right there. Not the big banks

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Speaker 1: that have to make these loans or that you can

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Speaker 1: regulate to force them to make these loans. These are

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Speaker 1: private entities. So the liquidity may not be asked forthcoming.

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Speaker 1: But in some senses, some of these private equity firms

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Speaker 1: have so much capital that's willing to deploy that they

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Speaker 1: may do it on an opportunistic basis, but not on

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Speaker 1: a regulatory, you know basis. So in other words, the

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Speaker 1: FED loses control as the overall regulator of the banks

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Speaker 1: to actually enact this policy. So it's really now up

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Speaker 1: to the animal spirits to, you know, to actually take

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Speaker 1: this on. There's also a question of how much time

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Speaker 1: some of these businesses have until they run out of

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Speaker 1: cash or face material debt maturities. Do we have a

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Speaker 1: sense of that because in China there were statistics that

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Speaker 1: a lot of companies, millions even could run out of

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Speaker 1: cash in six days, right, So we don't We don't

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Speaker 1: have good data on the small and midsized businesses, right

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Speaker 1: because Wall Street typically you know, looks at large cap

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Speaker 1: companies and that's and that's typically the way it goes.

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Speaker 1: But what I do know is that more small in

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Speaker 1: mid sized businesses. You know a lot of these a

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Speaker 1: lot of these businesses put you know that they're working

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Speaker 1: capitals their credit card, right, they put things on their

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Speaker 1: credit card, they pay off their bills at the end

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Speaker 1: of the month. So really what we have to start

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Speaker 1: to look for is stresses maybe in some of the

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Speaker 1: asset BacT markets that you know, the credit card markets

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Speaker 1: and loan markets. In those ways, we have to start

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Speaker 1: to be a little bit more creative to see how

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Speaker 1: these small and midsized businesses access the credit markets and

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Speaker 1: access liquidity. And that's what we need to be supportive of.

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Speaker 1: So far, what I can tell you is I'm not

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Speaker 1: seeing any stresses in the repo market, which is good,

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Speaker 1: really really good news. So this is not looking like

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Speaker 1: two thousand and eight. This is not a systemic event

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Speaker 1: at this point. All I'm bringing up are the sign

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Speaker 1: posts of risk that we should start to look at. Um.

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Speaker 1: So far, so good, but we also have to start

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Speaker 1: to look at some of the credit card data and

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Speaker 1: some of the loan defaults and things like that in

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Speaker 1: the smaller sized in the smaller size banks. Jim, let's

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Speaker 1: talk about these markets and get a co from you. Ny.

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Speaker 1: Basis points is the yield on the US tenure treasury?

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Speaker 1: Should I get used to these kind of numbers now?

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Speaker 1: The treasury market, I got used to it pretty quickly

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Speaker 1: out from Germany and Europe and Japan. Do I need

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Speaker 1: to get used to that hit in the United States?

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Speaker 1: I think, sadly the answer is yes, especially if the

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Speaker 1: FED by most economists now we're calling for another fifty

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Speaker 1: basis point rate cut, you know, relatively soon. So if

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Speaker 1: the Fed funds rates at you know, fifty basis points

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Speaker 1: in you know, a couple of months time, or say

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Speaker 1: maybe even weeks time. Um, Yeah, you're gonna be looking

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Speaker 1: at the tenure note around one percent. Could the yield

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Speaker 1: curve steep? And yes, Um, is inflation going to come

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Speaker 1: back in any big way to to push longer term

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Speaker 1: yield higher anytime soon? Probably not so. And if we're

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Speaker 1: looking at higher yields, we have to look towards the

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Speaker 1: second half of the year hard to see what the

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Speaker 1: path of the virus actually takes. But the answer is

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Speaker 1: absolutely these are just numbers, right, one percent not imagine

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Speaker 1: it's just the number ninety bass point nine bays, But

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Speaker 1: it's just a number. It could go lower, um, But

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Speaker 1: but I think there are limitations before it starts to

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Speaker 1: actually hurt the markets much. It's the fetes that imply, oh, absolutely,

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Speaker 1: you think another twenty five. Well, I, you know, I

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Speaker 1: can't make a call on whether they go twenty five

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Speaker 1: or not. It's gonna depend on what's happening in all

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Speaker 1: the other markets. But I I don't I don't rule

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Speaker 1: that out. Jim Cannon to catch up near this morning

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Speaker 1: moldering Stanley Investment Management Fixed Incomepan folio manager. The idea

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Speaker 1: tell them that the fetty still implay after the fifty

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Speaker 1: extraordinary absolute extrema weeks away. I love what Mr Karen said.

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Speaker 1: They're about forget full faith and credit and look at

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Speaker 1: the credit markets. Is the point over the next number

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Speaker 1: of weeks headline across the Bloomberg. And this really shows

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Speaker 1: not the specificity of cancelations, but there are two or

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Speaker 1: three different pilgrimages in Saudi Arabia and the amra Is.

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Speaker 1: It's it's considered like a secondary pilgrimage because it's not compulsory,

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Speaker 1: but it's where anybody goes to Mecca. And they've canceled

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Speaker 1: the entire omber pilgrimage moment in Saudi Arabia. That's a

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Speaker 1: big deal. It's a broader statement than just canceling one

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Speaker 1: specific thing like the I M Fringe series put together

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Speaker 1: tho it's a series of gatherings that ultimately of being canceled.

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Speaker 1: And this is playing into the economic impact, not just

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Speaker 1: in the Middle Eas, not just in Asia, but all

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Speaker 1: little perspective. This morning, as we bring in our good

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Speaker 1: guest Howard Dean of Courses, Dr Dean of Albert Einstein

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Speaker 1: Medical School, the former governor of Vermont, and he and

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Speaker 1: I are of a vintage where we remember the extraordinary

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Speaker 1: events of ninety two, which was George McGovern and I

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Speaker 1: would point out Dr Dean that it was the six

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Speaker 1: Amendment where it was guaranteed that the ut of America

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Speaker 1: would show up and vote. They didn't show up yesterday,

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Speaker 1: did they, Dr Dean? No, they didn't. And I'm stretching

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Speaker 1: in my head and figuring out why. I've been reading

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Speaker 1: Twitter as I often do, and there's a lot of

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Speaker 1: young people on Twitter expressing disappointment because many of them

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Speaker 1: are for Bernie, but they didn't vote. And I don't

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Speaker 1: understand why. I don't get this. They have a candidate

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Speaker 1: that's very exciting for them. It doesn't happen all the time.

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Speaker 1: Young people elected Barack Obama in two thousand and eight,

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Speaker 1: the only time in my lifetime where more people under

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Speaker 1: thirty five voter than over sixty five. So I do

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Speaker 1: not understand what's going on. I would suggest Vice President

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Speaker 1: Biden is not doesn't have the former president's electricity of

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Speaker 1: speaking and events and all that does Vice President by

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Speaker 1: need the youth vote to defeat Donald Trump? I think

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Speaker 1: he does. Um, we weren't party really is young, dark,

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Speaker 1: and female. I mean, if you look at the Three

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Speaker 1: Paths election in two thousand eighteen, two thousand seventeen in Virginia.

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Speaker 1: In two thousand nineteen in Virginia, the legislators were transformed. Uh,

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Speaker 1: and the average age I think of the Democratic Caucus

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Speaker 1: went down about ten years in the single election in

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Speaker 1: the House. So, but our core group is young, of color,

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Speaker 1: and female, and so we need those groups to turn out.

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Speaker 1: If those groups turn out, we went. If they don't

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Speaker 1: turn out, we lose. It's just as simple as that. Well,

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Speaker 1: how would let's talk about what was actually happening out

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Speaker 1: the former Vice president Joe Biden. It was the African

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Speaker 1: American vote overwhelmingly in his faith and now two months

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Speaker 1: ago it fount like that would be the story. But

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Speaker 1: eight days ago it felt like that maybe some of

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Speaker 1: that was slipping. What has happened in the last seven days,

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Speaker 1: It's not entirely clear, but it's more than the African

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Speaker 1: American But the African American votes started all this in

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Speaker 1: South Carolina, but donal throughout the South. He just got

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Speaker 1: enormous numbers. And I can't conclude anything but this is

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Speaker 1: this association with the only African American president we've ever

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Speaker 1: had in this country. Um. But there's more to it

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Speaker 1: than that. Uh to win in places like Texas. Uh

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Speaker 1: and in Massachusetts, which is just shocking. In Minnesota that

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Speaker 1: was not the African American vote that carried him. There

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Speaker 1: was others. UM. I think some of this is just

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Speaker 1: voters saying, look, we've had enough of the drama and

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Speaker 1: the corruption and the every day Let's just get somebody

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Speaker 1: who's we know. And even if it's Joe, who may

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Speaker 1: not be that exciting when he showed he could win

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Speaker 1: in South Carolina currently struck a struck a match. I.

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Speaker 1: I've never seen anything like this in eleven decades, I

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Speaker 1: mean eleven cycles. Here. Do you expect in the next

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Speaker 1: four hours that this race goes down to two? No,

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Speaker 1: Elizabeth is probably going to stay in. She thinks it's

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Speaker 1: gonna be a broker convention and she can be the peacemaker. UM.

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Speaker 1: I don't know what Mike Bloomberg is going to do,

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Speaker 1: of course, Uh. I think he's considering his options. He

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Speaker 1: has enough money to stay in as long as he

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Speaker 1: wants to, and his goals are really broader than just

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Speaker 1: becoming president. His ads have been absolutely fantastic in terms

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Speaker 1: of ripping up Trump, and you know, he gets a

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Speaker 1: great he gets it's a big discount on those ads

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Speaker 1: as long as he's a candidate. So I have no

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Speaker 1: idea what either one of them are going to do.

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Speaker 1: And so far as I've assumed, it's going to be

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Speaker 1: a four person race into the next big weekend, because

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Speaker 1: I've been asked about this before and I've said repeatedly,

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Speaker 1: we're not going to know until two weeks and the

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Speaker 1: the next week is important to Michigan and big states

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Speaker 1: like that. So this is not over by any speci

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Speaker 1: of imagination. Yeah, and Dr Dean Michael Bloomberg has said

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Speaker 1: he's come out and said, uh that the only way

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Speaker 1: that he could win is in a contest, contested convention

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Speaker 1: where the super delegates come together and meet Michael Bloomberg,

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Speaker 1: founder and Geordie owner of Bloomberg LP. I'm wondering, from

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Speaker 1: your perspective, what is the likelihood that we will get

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Speaker 1: a candidate determined by a brokered convention which has not

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Speaker 1: been used for decades, Not since nineteen fifty two. I

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Speaker 1: think it's very unlikely. Um. Frankly, the optics is that

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Speaker 1: are awful. Whoever the losing candidate would be in a

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Speaker 1: broken convention with their supporters would have a very hard

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Speaker 1: time getting behind the winner. Um. I just am not

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Speaker 1: for brokered conventions. The super delegates has never elected a president.

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Speaker 1: Has always been done without this help of the super delegates.

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Speaker 1: Super delegates really are only there elect will attend the convention,

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Speaker 1: which they didn't used to do until they were super delegates.

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Speaker 1: Howard Dean, what kind of vice president does a seventies

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Speaker 1: something year old gentleman from Delaware need? I mean, what's

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Speaker 1: I mean? I know it's way too premature to talk

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Speaker 1: vice president. What What's And Bernie has already said this.

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Speaker 1: Bernie has said we cannot have two old white guys

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Speaker 1: at the top of the ticket. He's absolutely right. I'm

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Speaker 1: hoping we're gonna have a young woman of color on

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Speaker 1: the ticket. I can think of a number in the

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Speaker 1: governor of New Mexico is a Hispanic. As a Senator

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Speaker 1: from Nevada, Stacy Abrams, of course, is highly well thought of.

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Speaker 1: So there are plenty of well qualified women. I think

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Speaker 1: it's important that we have a woman and I think

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Speaker 1: it's probably what's your okay, great, but you know some

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Speaker 1: people listening this would say you're gonna hand President Trump

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Speaker 1: a second term. I mean, maybe that's President Trump's greatest hope.

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Speaker 1: What is the evidence America will actually elect a woman

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Speaker 1: as president or vice president? This is not just about winning,

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Speaker 1: it's also about change in the country and if we

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Speaker 1: have to be run fear of voters who won't vote

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Speaker 1: for women, and this country is in deep trouble. All

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Speaker 1: those people are already voting for Trump and we're not

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Speaker 1: going to get their votes back. I've never thought that

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Speaker 1: the way of winning this election is to take to

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Speaker 1: a few Trump votes back. There will be some. The

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Speaker 1: way of winning this election is to gin up our

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Speaker 1: base like crazy and give young people, people of color,

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Speaker 1: and women are reason to vote. Now, that's what's so

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Speaker 1: disturbing about yesterday. That's really remarkable with Joe Biden did,

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Speaker 1: but it's incredibly disturbing the young people didn't vote, and

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Speaker 1: it didn't just hurt Bernie Sanders, that hurt everybody. It's

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Speaker 1: sat or even having this conversation. I'm used to female

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Speaker 1: leaders in the UK. We've had female prime ministers, we've

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Speaker 1: had leading Dr Dean has got decades. It's a simple observation.

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Speaker 1: I think it's satur revenues conversation. Howard, let's talk about

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Speaker 1: drumming up the base. I thought the base was fired up.

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Speaker 1: I thought it has been for the last three or

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Speaker 1: four years. Have we got to get the guys in

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Speaker 1: the middle. The guys in the middle are going to

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Speaker 1: probably vote with us, especially with the candidate like buying

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Speaker 1: because they're sick of Trump. But I don't again, I don't.

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Speaker 1: I think you win races by firing up your base.

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Speaker 1: That's how Obama one um, you know so, I I

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Speaker 1: think that's the key. Now, the guys in the middle,

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Speaker 1: you know, they'll they'll they make up their own decisions. Look,

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Speaker 1: we can't stand for nothing as a party. I don't

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Speaker 1: want to be like Jeremy Corban because that was obviously

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Speaker 1: a disaster, but we do have to stand for something.

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Speaker 1: Dr Dean. I have to wonder. One big question has

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Speaker 1: been turnout and how much can we read into the

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Speaker 1: levels of turnout that we've gotten within these uh these

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Speaker 1: early votes A lot. I am stunned and thrilled with

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Speaker 1: the turnout among African Americans were stunned and thrilled by

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Speaker 1: Bernie's turnout in Nevada among Latinos. So this is clearly

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Speaker 1: really important part. I'm not worried about turnout among people

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Speaker 1: of color. I am worried about people young people. Uh.

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Speaker 1: And this is that yesterday's result made me, makes me

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Speaker 1: very nervous, and I think we have some work to do.

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Speaker 1: How do we greatly value your Thank you so much?

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Speaker 1: He's a former chairman of the d n C. The

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Speaker 1: consensus for the private sector Friday is a hundred and

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Speaker 1: sixty thousand. I love this. We can just about throw

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Speaker 1: that out the window too. So there you go from

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Speaker 1: Peter book far to get an excellence on which part

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Speaker 1: of this we should throw out the window, we go

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Speaker 1: to Julia Cornado, of course, how to give us perspective? Julie,

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Speaker 1: I thought of you yesterday, I mean the historic moment

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Speaker 1: of an emergency FED rate cut, with your work at

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Speaker 1: the FED and with your wonderful academics at Texas, how

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Speaker 1: did you frame the historical moment of that fifty basis

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Speaker 1: point cut? Well? Come, it was, you know, we had

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Speaker 1: anticipated and given the signal of the G seven call,

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Speaker 1: we thought they wouldn't want to not deliver um. It's

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Speaker 1: it's I think we saw the market reaction was not Uh,

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Speaker 1: it's a panasy monetary policy in this situation is not

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Speaker 1: going to fix the problem. The laryngitis at your fighting fighting, Julia,

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Speaker 1: is it kinesiean or monitorist laryngitis? Well, but I'm hoping

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Speaker 1: he's not coronavirus. Well, we'll get a test it. We'll

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Speaker 1: get official surveillance test kit for your Thank you for

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Speaker 1: being a trooper and being out with us. Let's go

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Speaker 1: here a bit more dr Coronado and then we'll cut

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Speaker 1: it short so you can go have a drama scotch

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Speaker 1: to get through the morning. Julia. When we when we

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Speaker 1: look at the economics of the moment, how do you

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Speaker 1: extrapolate forward? I mean, your timeline becomes so changed. How

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Speaker 1: do you look forward one week or to the Friday

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Speaker 1: jobs report or even at one quarter. Well, as you mentioned,

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Speaker 1: the job report is going to be a little bit stale.

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Speaker 1: Um and you know, the sectors that we're gonna look

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Speaker 1: for in the coming months will be say, leisure and hospitality, travel.

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Speaker 1: These sectors are going to be tremendously hit in the

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Speaker 1: next few months, both in spending probably bleeding into hiring.

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Speaker 1: So we are going to see us slowdown in activity

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Speaker 1: in Q two. We're going to say this in claims

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Speaker 1: in the next couple of weeks that claims are going

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Speaker 1: to start to lift a little bit high. Here, we

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Speaker 1: could probably see a little lifting claims. Yes, Um, you know,

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Speaker 1: we think about the sectors that are going to be hit.

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Speaker 1: Some of these people aren't going to be eligible for

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Speaker 1: an unemployment insurance. You're going to see probably the hourly

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Speaker 1: workers get laid off first. So um, it may not

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Speaker 1: show up in entirely in claims, but you you know,

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Speaker 1: you you probably would expect a little bit of a

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Speaker 1: lifting claims. Yes, Junia, it's been such a big focus

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Speaker 1: of this program over the last couple of weeks. How

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Speaker 1: do we support the small and medium sized enterprises to

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Speaker 1: make sure they don't have to lay off people for

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Speaker 1: what could be just a temporary economic shock. How do

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Speaker 1: we do that? That's really a fiscal question. I mean,

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Speaker 1: we really need a coordinated fiscal response here. We need

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Speaker 1: some liquidity, maybe through the Small Business Administration, through SEMA.

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Speaker 1: You know, there's all kinds of ways that the federal

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Speaker 1: government could get money in a targeted fashion to affected areas.

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Speaker 1: I don't see any evidence that the administration has plans

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Speaker 1: for that. Um I think we need to start talking

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Speaker 1: about that, because why let this economic hit sort of

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Speaker 1: spread and deep and in the way you're describing if

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Speaker 1: you want to ensure this this shock Julia as a

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Speaker 1: former FED researcher at the Central Bank in Washington. I'm

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Speaker 1: just trying to understand how they're modeling out the potential

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Speaker 1: effects of the coronavirus, what data they're looking at, what

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Speaker 1: they're responding to. Clearly they were responding to a material

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Speaker 1: shift and expectations going forward stocks trying to take that

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Speaker 1: and figure out whether that means recession? How likely do

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Speaker 1: you think that is the outcome here? So I think

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Speaker 1: modeling the direct effects is easier, say, you know, you

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Speaker 1: can think about the interruption and activity in certain sectors,

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Speaker 1: what we're seeing, how it's likely to spread. The knock

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Speaker 1: on effects through confidence are the things that the FED

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Speaker 1: is trying to ensure again, right, the hit to consumer confidence,

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Speaker 1: a broader sense of you know, pull back in business

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Speaker 1: investment in consumers ending. So I think that's what the

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Speaker 1: FET is trying to keep on the tracks, which has

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Speaker 1: been pretty good in recent years, very resilient to a

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Speaker 1: lot of bad news. So I think that's the aim um.

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Speaker 1: If that gets hit and we see consumers just sort

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Speaker 1: of hunker down, then you're in trouble. Dr. Cornado and

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Speaker 1: micro economics. One of the great great moments is when

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00:21:20,240 --> 00:21:22,640
Speaker 1: you have to try to figure out income and substitution

430
00:21:22,720 --> 00:21:26,800
Speaker 1: effects and at least to all sorts of ambiguities. What's

431
00:21:26,800 --> 00:21:30,600
Speaker 1: the arch ambiguity for chairman power right now? Is it

432
00:21:30,680 --> 00:21:35,600
Speaker 1: ambiguity about the dollar? About no inflation? Yes, inflation? I mean,

433
00:21:35,960 --> 00:21:40,879
Speaker 1: what's the unknown out there for the chairman? Well, and

434
00:21:41,040 --> 00:21:43,399
Speaker 1: Thomas's you know, you're you're putting your finger on it.

435
00:21:43,480 --> 00:21:47,760
Speaker 1: The income and substitution effects in an older society, lower

436
00:21:47,800 --> 00:21:50,760
Speaker 1: interest rates can be you know, more painful to the

437
00:21:50,800 --> 00:21:54,960
Speaker 1: older generation replying on that income, and they can you know,

438
00:21:55,119 --> 00:21:57,760
Speaker 1: sometimes have to save more as a result, so you

439
00:21:57,800 --> 00:22:01,280
Speaker 1: get less bang for your buck. Mine, Julia, you're you're

440
00:22:01,320 --> 00:22:03,680
Speaker 1: being come on, get the piece of chalk in your

441
00:22:03,680 --> 00:22:06,840
Speaker 1: hand to get some vixed vapor rub to get you

442
00:22:06,920 --> 00:22:11,160
Speaker 1: through the day. Dr Coronado, you're in a classroom right

443
00:22:11,200 --> 00:22:15,320
Speaker 1: now and you're looking at an actuarial assumption that's going

444
00:22:15,359 --> 00:22:18,600
Speaker 1: to four percent or even three point eight percent. That's

445
00:22:18,600 --> 00:22:23,840
Speaker 1: gonna turn on its head our American financial society, isn't it?

446
00:22:23,840 --> 00:22:26,920
Speaker 1: It will? Yes, and we are I mean, Tom yesterday

447
00:22:27,000 --> 00:22:30,480
Speaker 1: was a dramatic day. The drop in yields at the

448
00:22:30,560 --> 00:22:34,320
Speaker 1: ten year point below one per cent um. It's astonishing

449
00:22:34,320 --> 00:22:37,159
Speaker 1: where we are. And of course for the FED, you know,

450
00:22:37,240 --> 00:22:40,199
Speaker 1: forget the income and substitution effects. They're out of AMMO.

451
00:22:40,520 --> 00:22:44,520
Speaker 1: You know, they're they're running out of tools. Uh and uh.

452
00:22:44,560 --> 00:22:47,440
Speaker 1: And that's that's I think there may be that kind

453
00:22:47,480 --> 00:22:50,800
Speaker 1: of existential worry in the markets, this realization that, oh

454
00:22:50,800 --> 00:22:54,600
Speaker 1: my goodness, here we are now even the FED is

455
00:22:55,080 --> 00:23:01,800
Speaker 1: out of AMMO. Are we questioning the Fed? Put Um?

456
00:23:01,840 --> 00:23:06,320
Speaker 1: I think there's a little bit more underlying concern about

457
00:23:06,359 --> 00:23:09,359
Speaker 1: that now. I mean, obviously the Fed can do KWIE

458
00:23:09,480 --> 00:23:13,560
Speaker 1: and they will if they have to. Um. You know,

459
00:23:13,640 --> 00:23:16,719
Speaker 1: the impact of that is less powerful when yields are

460
00:23:16,760 --> 00:23:19,840
Speaker 1: already as low as they are, so, you know, I

461
00:23:20,600 --> 00:23:22,760
Speaker 1: a lot of the clients I talked to, Yeah, there's

462
00:23:22,760 --> 00:23:26,240
Speaker 1: a lot more discussion about what comes next, what's the

463
00:23:26,320 --> 00:23:28,280
Speaker 1: FED gonna do and what is the impact going to be?

464
00:23:28,840 --> 00:23:31,520
Speaker 1: You know, we have a real shock here, this coronavirus.

465
00:23:31,560 --> 00:23:34,399
Speaker 1: It's transitory, but it's real. We know it's going to

466
00:23:34,520 --> 00:23:38,480
Speaker 1: hit the economy, so you know, the the ability of

467
00:23:38,520 --> 00:23:41,399
Speaker 1: the FED to ensure us against this. You know, I

468
00:23:41,440 --> 00:23:44,160
Speaker 1: was hoping with the G seven announcement that we were

469
00:23:44,200 --> 00:23:47,920
Speaker 1: seeing more evidence of the kind of fiscal monetary coordination

470
00:23:48,280 --> 00:23:50,399
Speaker 1: that we're gonna need when we get a real shock

471
00:23:50,520 --> 00:23:53,600
Speaker 1: that's the deeral lower bound. But we really didn't seem

472
00:23:53,680 --> 00:23:56,240
Speaker 1: much follow through on the fiscal side, certainly not in

473
00:23:56,280 --> 00:24:00,800
Speaker 1: the US. So you know, I think that's the realities

474
00:24:00,840 --> 00:24:02,760
Speaker 1: that fiscal policy makers are going to have to pick

475
00:24:02,800 --> 00:24:05,440
Speaker 1: up the ball here. Julia, you're a trooper to be

476
00:24:05,480 --> 00:24:10,760
Speaker 1: with today. Nurse Amy emails in Dr Coronado and suggests

477
00:24:10,800 --> 00:24:13,920
Speaker 1: you go to the Joe Koi School and Hospital uh

478
00:24:14,080 --> 00:24:17,440
Speaker 1: there for your your laryngitis, and she recommends you put

479
00:24:17,520 --> 00:24:20,120
Speaker 1: vix on your eyelids, and that's usually a good way

480
00:24:21,800 --> 00:24:24,800
Speaker 1: on your eyelid. That's from the Joe. She she's a

481
00:24:25,320 --> 00:24:30,560
Speaker 1: nurse staph nurse of the front. That's from you know,

482
00:24:30,600 --> 00:24:33,840
Speaker 1: that's from Dr. Thank you. Coming out of the macro

483
00:24:34,000 --> 00:24:37,320
Speaker 1: policy prospectives, President I found out our guests come on

484
00:24:37,359 --> 00:24:39,160
Speaker 1: with us when they're sick, and you know, it's really

485
00:24:39,480 --> 00:24:41,080
Speaker 1: because they de tended to be on a program, and

486
00:24:41,080 --> 00:24:43,280
Speaker 1: I think that's a beautiful thing. Did we pair We

487
00:24:43,400 --> 00:24:50,239
Speaker 1: probably dated. Jared Burstein with us right now. And if

488
00:24:50,280 --> 00:24:54,320
Speaker 1: you're curious about Vice President Biden's path forward on economics

489
00:24:54,359 --> 00:24:57,159
Speaker 1: and policy, there's no one better to speak to you,

490
00:24:57,280 --> 00:25:02,280
Speaker 1: senior fellow Center and Budget and Policy Administration, UM Policy Priorities,

491
00:25:02,600 --> 00:25:07,040
Speaker 1: former chief economists of course, with the Vice President, Jared.

492
00:25:07,119 --> 00:25:09,720
Speaker 1: Did you speak to the Vice President last night or

493
00:25:09,760 --> 00:25:13,680
Speaker 1: in the recent days and how's he doing. I haven't, Uh,

494
00:25:13,680 --> 00:25:16,359
Speaker 1: he's been a little busy. I've talked to folks on

495
00:25:16,440 --> 00:25:19,159
Speaker 1: the campaign, and I thought what was interesting to me

496
00:25:19,280 --> 00:25:23,720
Speaker 1: is that these folks were feeling strong even before South Carolina.

497
00:25:23,800 --> 00:25:25,960
Speaker 1: They believe that South Carolina was going to turn the

498
00:25:26,040 --> 00:25:32,080
Speaker 1: tithes and events have proven them correct. Define establishment Democratic

499
00:25:32,160 --> 00:25:36,199
Speaker 1: Party economics and how it can defeat the president of

500
00:25:36,240 --> 00:25:39,560
Speaker 1: the United States. There has to be a strategy. My

501
00:25:39,640 --> 00:25:42,480
Speaker 1: guess is after four years ago it will be more overt.

502
00:25:43,000 --> 00:25:47,199
Speaker 1: What will that strategy be to defeat Donald Trump? So

503
00:25:47,320 --> 00:25:49,199
Speaker 1: that's a two part question. Let me start with the

504
00:25:49,240 --> 00:25:52,080
Speaker 1: first part, which is easier, about the economic I think

505
00:25:52,119 --> 00:25:54,320
Speaker 1: the way to think about the economics in this case

506
00:25:54,480 --> 00:25:57,720
Speaker 1: is building on what exists versus introducing a lot of

507
00:25:57,760 --> 00:26:00,640
Speaker 1: new things. So if you listen to Biden's agenda, he's

508
00:26:00,680 --> 00:26:03,840
Speaker 1: talking about building on the Affordable Care Act, planning a

509
00:26:03,920 --> 00:26:06,960
Speaker 1: path towards universal coverage, but not trying to leap frog

510
00:26:07,000 --> 00:26:09,879
Speaker 1: there quickly. If you look at his progressive tax ideas,

511
00:26:09,880 --> 00:26:12,359
Speaker 1: they're building on the code as it exists. How did

512
00:26:12,400 --> 00:26:15,359
Speaker 1: that beat Donald Trump? Well, it's a return to a

513
00:26:15,440 --> 00:26:19,679
Speaker 1: more established, normal set of procedures, and it's a belief

514
00:26:19,840 --> 00:26:22,640
Speaker 1: that what the country craves is a lot less chaos

515
00:26:22,680 --> 00:26:25,600
Speaker 1: and a lot more order from someone who's had a

516
00:26:25,640 --> 00:26:28,159
Speaker 1: lot of experience in government. One thing that marked the

517
00:26:28,200 --> 00:26:32,119
Speaker 1: primaries was the lack of younger voters turning out. And

518
00:26:32,160 --> 00:26:34,639
Speaker 1: this is the reason perhaps that some people are pointing

519
00:26:34,680 --> 00:26:38,240
Speaker 1: to Sanders not performing as well as he was expected to.

520
00:26:38,359 --> 00:26:41,359
Speaker 1: And I'm just wondering, if you take this forward, and

521
00:26:41,400 --> 00:26:43,320
Speaker 1: you take this idea that we're probably going to see

522
00:26:43,320 --> 00:26:47,960
Speaker 1: Bernie Sanders still very much in the race, how significant

523
00:26:48,040 --> 00:26:49,800
Speaker 1: is it to you that we've got a two party,

524
00:26:50,160 --> 00:26:53,400
Speaker 1: two candidate race at this point where one of them

525
00:26:53,440 --> 00:26:56,280
Speaker 1: ignites the younger voters, which is the key democraphic and

526
00:26:56,320 --> 00:26:58,680
Speaker 1: it's not Joe Biden. What does it say about Joe

527
00:26:58,680 --> 00:27:02,080
Speaker 1: Biden's chances? I think what it says is all of

528
00:27:02,080 --> 00:27:04,760
Speaker 1: the function of something nobody knows the answer to which

529
00:27:04,840 --> 00:27:08,680
Speaker 1: is that if Joe Biden ends up being the nominee,

530
00:27:08,680 --> 00:27:10,760
Speaker 1: and you make a great point, this is ain't done yet,

531
00:27:11,320 --> 00:27:14,159
Speaker 1: will those voters switch over or will they sit on

532
00:27:14,200 --> 00:27:16,879
Speaker 1: their hands. It's kind of a protest vote. I think

533
00:27:16,960 --> 00:27:20,240
Speaker 1: the anxiety about Trump having four more years is enough

534
00:27:20,280 --> 00:27:23,080
Speaker 1: to keep people from sitting on their hands in that context.

535
00:27:23,240 --> 00:27:26,119
Speaker 1: But that is the big question. There's another question to

536
00:27:26,359 --> 00:27:29,399
Speaker 1: which is that Bernie Sanders also still has quite a

537
00:27:29,440 --> 00:27:32,040
Speaker 1: bit of support and quite a few votes. How likely

538
00:27:32,119 --> 00:27:34,639
Speaker 1: is it that we're heading toward a brokered convention, a

539
00:27:34,720 --> 00:27:38,639
Speaker 1: sort of worst case scenario for Democrats trying to give

540
00:27:38,800 --> 00:27:42,160
Speaker 1: voters conviction that they actually had a choice in who

541
00:27:42,320 --> 00:27:45,600
Speaker 1: ended up being the candidate. You know, it's a fair question.

542
00:27:45,640 --> 00:27:47,600
Speaker 1: I gotta say, I'm an economist that I don't know

543
00:27:47,640 --> 00:27:49,760
Speaker 1: that I have a great answer for you. I will

544
00:27:49,800 --> 00:27:52,360
Speaker 1: say this, one thing that really struck me about last

545
00:27:52,440 --> 00:27:56,600
Speaker 1: night's vote is that late deciders broke towards Biby. That

546
00:27:56,680 --> 00:28:00,640
Speaker 1: happened even in Massachusetts state, eating campaign a lot where

547
00:28:00,680 --> 00:28:03,679
Speaker 1: he beat uh Center Warren. So that leads me to

548
00:28:03,800 --> 00:28:06,360
Speaker 1: believe that there is an electability case to be made.

549
00:28:06,400 --> 00:28:09,639
Speaker 1: Their people are people are just thinking that he's the

550
00:28:09,680 --> 00:28:12,560
Speaker 1: one who can most reliably be Trump, and I think

551
00:28:12,600 --> 00:28:15,280
Speaker 1: that probably does put some wind in the final Gared,

552
00:28:15,320 --> 00:28:17,919
Speaker 1: you're not doing market economics where you're gaming tense of

553
00:28:17,920 --> 00:28:21,119
Speaker 1: a percent and real GDP, etcetera. But how do you

554
00:28:21,240 --> 00:28:24,080
Speaker 1: envision the economy going into it? It's you know the

555
00:28:24,119 --> 00:28:26,639
Speaker 1: folks that GDP statistics come out. I don't have it

556
00:28:26,680 --> 00:28:28,679
Speaker 1: in front of me job, but Jared, but I'm going

557
00:28:28,760 --> 00:28:31,120
Speaker 1: to suggest we're gonna get a g d V reports

558
00:28:31,160 --> 00:28:34,560
Speaker 1: three days before the election, whatever, but we're gonna have

559
00:28:34,600 --> 00:28:37,560
Speaker 1: a two percent economy or could it be gloomier to

560
00:28:37,640 --> 00:28:44,280
Speaker 1: the benefit of a Democratic candidate. Certainly, the coronavirus is

561
00:28:44,640 --> 00:28:46,560
Speaker 1: a huge concern. I saw and I said pole this

562
00:28:46,600 --> 00:28:49,520
Speaker 1: morning that I must admit surprise me, which is that

563
00:28:49,680 --> 00:28:54,160
Speaker 1: the coronavirus impact was high on the minds of lots

564
00:28:54,160 --> 00:28:56,080
Speaker 1: of voters, and by the way, that tended to break

565
00:28:56,080 --> 00:29:00,720
Speaker 1: towards Biden. Uh So, it is Uh, definitely likely. I

566
00:29:00,720 --> 00:29:04,760
Speaker 1: would say that the economy will be growing considerably slower,

567
00:29:04,840 --> 00:29:08,360
Speaker 1: well below trend by the time when people are making

568
00:29:08,440 --> 00:29:11,240
Speaker 1: up their votes. And by the way, if, if, even

569
00:29:11,280 --> 00:29:13,040
Speaker 1: if we we don't have to have a recession for

570
00:29:13,160 --> 00:29:16,080
Speaker 1: unemployment to start to rise. This grossery is cut by half,

571
00:29:16,080 --> 00:29:19,880
Speaker 1: which is the Goldman Sachs forecastpoy R could be closer

572
00:29:19,920 --> 00:29:24,240
Speaker 1: to and that's still low, but it's half point about

573
00:29:24,240 --> 00:29:26,800
Speaker 1: where we are, and we'll be watching claims tomorrow on that.

574
00:29:26,880 --> 00:29:29,400
Speaker 1: Jared Bernstein, thank you so much, greatly, appreciate your time.

575
00:29:29,440 --> 00:29:32,360
Speaker 1: Looking forward to seeing you in Washington again. Of course,

576
00:29:33,040 --> 00:29:35,920
Speaker 1: Dr Bernstein with the Vice President a number of years

577
00:29:35,960 --> 00:29:43,800
Speaker 1: ago with the Obama administration right now comments in a

578
00:29:43,920 --> 00:29:47,640
Speaker 1: well timed discussion with David Rubinstein. You know him, of

579
00:29:47,680 --> 00:29:50,600
Speaker 1: course from Carlisle. Some of you will know him from

580
00:29:50,600 --> 00:29:54,040
Speaker 1: some of his public service, particularly with the administration of

581
00:29:54,600 --> 00:29:57,959
Speaker 1: UH President Carter. This was a few years ago, and

582
00:29:58,000 --> 00:30:01,720
Speaker 1: now he has become a TV star with piercing interviews

583
00:30:02,320 --> 00:30:07,080
Speaker 1: with an eclectic group of world thought leaders and decision makers.

584
00:30:07,120 --> 00:30:09,240
Speaker 1: And I always bring up, of course, is I thought

585
00:30:09,280 --> 00:30:13,160
Speaker 1: definitive interview with Mr Bezos. Um it will be tonight

586
00:30:13,360 --> 00:30:16,680
Speaker 1: nine o'clock on Bloomberg Television. I want to begin first

587
00:30:16,800 --> 00:30:20,240
Speaker 1: with Mr Rubinstein talking to his good guest, the governor

588
00:30:20,760 --> 00:30:24,120
Speaker 1: of Saudi Arabia's sovereign Well It's fund. Let's listen in.

589
00:30:24,720 --> 00:30:27,080
Speaker 1: Now you have said, I think publicly you would like

590
00:30:27,120 --> 00:30:29,080
Speaker 1: it to be the largest sovereign wealth fund in the

591
00:30:29,080 --> 00:30:31,080
Speaker 1: world at some point, and you like it to get

592
00:30:31,080 --> 00:30:35,600
Speaker 1: to a trillion dollars to trillion trillion dollars. So when

593
00:30:35,640 --> 00:30:37,160
Speaker 1: do you think you'll be able to get to two

594
00:30:37,160 --> 00:30:40,640
Speaker 1: trillion dollars? The number looks really big because you know

595
00:30:40,720 --> 00:30:47,280
Speaker 1: the largest Southern well fund today is about one trillion. Uh.

596
00:30:47,520 --> 00:30:51,720
Speaker 1: We think that it's very much achievable by twenty thirty.

597
00:30:52,160 --> 00:30:54,880
Speaker 1: All those different things require a big staff to manage.

598
00:30:54,880 --> 00:30:57,000
Speaker 1: How big is the p i F staff today? When

599
00:30:57,000 --> 00:31:01,040
Speaker 1: we started this was forty people today of more than

600
00:31:01,120 --> 00:31:06,200
Speaker 1: seven hundred by year, and alatargetists to have more than

601
00:31:06,600 --> 00:31:12,240
Speaker 1: one thousand full time employees. M P if this deserves

602
00:31:12,400 --> 00:31:14,840
Speaker 1: at least a one hour conversation, it could be one

603
00:31:14,880 --> 00:31:18,160
Speaker 1: of those panels where I would discuss this in Mr Rubinstein. Instead,

604
00:31:18,240 --> 00:31:21,000
Speaker 1: we've got too few minutes to talk about this, David,

605
00:31:21,000 --> 00:31:24,000
Speaker 1: there's any number of ways to go here with this

606
00:31:24,080 --> 00:31:27,160
Speaker 1: effort by Saudi Arabia, what makes this effort of a

607
00:31:27,200 --> 00:31:32,080
Speaker 1: sovereign wealth fund different from so many others were aware of? Well,

608
00:31:32,160 --> 00:31:34,360
Speaker 1: this sovereign wealth fund came out of the blue in

609
00:31:34,400 --> 00:31:36,880
Speaker 1: many respects. Some of the well known sovereign wealth funds

610
00:31:36,960 --> 00:31:39,959
Speaker 1: like the Kuwait Investment Authority, the Abu Dhabi Investment Authority,

611
00:31:39,960 --> 00:31:42,920
Speaker 1: the Government of Singapore Investment Company, they have been around

612
00:31:43,000 --> 00:31:46,960
Speaker 1: for decades, generations in some cases. The Sovereign Wealth Fund

613
00:31:46,960 --> 00:31:50,240
Speaker 1: and Saudi Arabia is relatively new, while Um the head

614
00:31:50,240 --> 00:31:54,760
Speaker 1: of it, Mr Al Romanon has um been the head

615
00:31:54,800 --> 00:31:56,840
Speaker 1: just for a couple of years. It actually was started

616
00:31:56,960 --> 00:31:59,280
Speaker 1: p i F Fund in seventy one, but it was

617
00:31:59,360 --> 00:32:03,320
Speaker 1: relatively under his leadership. It's now becoming, as he hopes,

618
00:32:03,640 --> 00:32:06,080
Speaker 1: one of the biggest in the world. He was an

619
00:32:06,080 --> 00:32:09,000
Speaker 1: investment a commercial banker in Saudi Arabia. He's a native

620
00:32:09,000 --> 00:32:13,160
Speaker 1: of Saudi Arabia and he was picked by MBS to

621
00:32:13,680 --> 00:32:16,280
Speaker 1: leave the p i F Fund and he's built it

622
00:32:16,360 --> 00:32:19,000
Speaker 1: up into a very very considerable force. Obviously, the I

623
00:32:19,120 --> 00:32:22,360
Speaker 1: p O of Saudi Aramco given it more resources, and

624
00:32:22,400 --> 00:32:24,400
Speaker 1: I should say he was also appointed to be the

625
00:32:24,480 --> 00:32:27,200
Speaker 1: chairman of Saudi ARAMCO in addition to the job he

626
00:32:27,240 --> 00:32:29,600
Speaker 1: now has as being the head of p IF, So

627
00:32:29,720 --> 00:32:32,440
Speaker 1: he's got two big jobs in Saudi Arabia. Now. Is

628
00:32:32,480 --> 00:32:36,040
Speaker 1: the Sovereign Wealth Fund a bolt on to the House

629
00:32:36,120 --> 00:32:40,080
Speaker 1: of Flizara, bolt onto the royal family or can it

630
00:32:40,200 --> 00:32:44,080
Speaker 1: be discreet and also separate from the social debates of

631
00:32:44,160 --> 00:32:48,000
Speaker 1: the kingdom. Well, they've hired a lot of investment professionals

632
00:32:48,000 --> 00:32:49,440
Speaker 1: from the West, so they have a lot of people

633
00:32:49,480 --> 00:32:52,320
Speaker 1: as well from Saudi Arabia. It's designed to get the

634
00:32:52,360 --> 00:32:55,360
Speaker 1: highest rate of return that you can legally do without

635
00:32:55,400 --> 00:32:58,080
Speaker 1: taking undue risk. But it also has a different mission.

636
00:32:58,280 --> 00:33:01,760
Speaker 1: They also want to uh uh have people come into

637
00:33:01,840 --> 00:33:04,920
Speaker 1: Saudi Arabian invest there, so they might invest with people

638
00:33:05,240 --> 00:33:08,120
Speaker 1: who will invest in the kingdom as well as people

639
00:33:08,120 --> 00:33:10,280
Speaker 1: who will invest and get good rates returning outside. So

640
00:33:10,320 --> 00:33:12,600
Speaker 1: it's got a dual mission in that sense. Just because

641
00:33:12,640 --> 00:33:15,080
Speaker 1: of time, David Rue was saying, give us one vignette

642
00:33:15,080 --> 00:33:18,200
Speaker 1: of this important conversation. What was something that surprised you

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Speaker 1: from the governor. I think it's surprising that he doesn't

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Speaker 1: seem to be under undue stress. I mean, if him

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Speaker 1: on my case. So I was running as the chairman

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Speaker 1: of the Saudi Aramco and also running the p IF

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Speaker 1: and and and MBS is deeply involved in both of them.

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Speaker 1: You think he would have been under more stress, but

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Speaker 1: he seems to be relatively relaxed about what he's doing

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Speaker 1: and I think a very engaging person. He's come to

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Speaker 1: be well known in the investment world in recent years.

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Speaker 1: In fact, we did this interview at a large private

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Speaker 1: equity conference, and um, you know he tends private equity conferences.

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Speaker 1: He's involved in a lot of investments directly. He's on

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Speaker 1: the board of Uber, where the fund made a direct

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Speaker 1: investment before they went into division fund, and he is

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Speaker 1: the person who, with MBS, made the decision to I

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Speaker 1: went to the Vision Division Fund, the first one that

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Speaker 1: they committed forty five billion dollars to it. David Rubinstein

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Speaker 1: one final question. You were brought up in a regime

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Speaker 1: of six, seven and eight percent rates. I don't want to,

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Speaker 1: you know, give away Mr Rubenstein's young age, but this

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Speaker 1: was a few years ago. How does your world spin

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Speaker 1: with a ten year yield of point nine five to two.

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Speaker 1: It's hard to believe because you're referring to days when

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Speaker 1: I was in the cart administration, when interest rates were

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Speaker 1: much much higher. It's hard to believe that the Treasury

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Speaker 1: is now below one one point oh, but that's the

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Speaker 1: world we live in, and I suspect it could go

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Speaker 1: lower because I'm not sure we've seen the last of

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Speaker 1: the interest rates declines from the from the Federal Reserve. David,

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Speaker 1: Thank you so much, David Rubinstein. Peer to peer conversations

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Speaker 1: with a gentleman from the Carlisle Group. This is an

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Speaker 1: extremely important interview, particularly for our global audience, Saudi Arabia's

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Speaker 1: public investment funds, Yassir al Ramaya and their governor. Thanks

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Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen

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Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform

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Speaker 1: you prefer. I'm on Twitter at Tom Keene before the podcast.

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Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio