WEBVTT - Ryanair CEO Calls British Airways' Recovery Plan 'Incompetent' 0:00:00.240 --> 0:00:04.040 Runt you by Bank of America Mary Lynch. With virtual reality, 0:00:04.320 --> 0:00:09.719 virtually everything will change. Discover opportunities in a transforming world 0:00:10.160 --> 0:00:14.440 VI of a mL dot Com slash VR, Mary Lynch, 0:00:14.520 --> 0:00:28.120 Pierced Fenner and Smith Incorporated. Ye. Welcome to the Bloomberg 0:00:28.160 --> 0:00:32.360 Surveillance Podcast. I'm Tom Keene with David Gura. Daily we 0:00:32.440 --> 0:00:36.080 bring you insight from the best of economics, finance, investment, 0:00:36.120 --> 0:00:42.200 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:42.280 --> 0:00:49.960 Bloomberg dot Com, and of course, on the Bloomberg d 0:00:50.080 --> 0:00:51.800 We beginning this point with the bias left Vich. He's 0:00:51.800 --> 0:00:54.320 the chief US Equity Strategic City and joins us in 0:00:54.360 --> 0:00:57.560 our Bloomberg eleven three oh studios. We see the tweet 0:00:57.560 --> 0:01:00.480 this morning piece together. What happened over these last nine 0:01:00.560 --> 0:01:03.480 days between the business meetings in Saudi Arabia, moving on 0:01:03.520 --> 0:01:05.520 to Europe, the Native Summit, at the g semit, at 0:01:05.720 --> 0:01:08.479 seven Summit, after that, what's your takeaway from that about 0:01:08.480 --> 0:01:10.720 the state of the integrity of the alliance between the 0:01:10.800 --> 0:01:12.720 US and Europe and what does that say to you 0:01:12.720 --> 0:01:15.319 about the direction of the U S economy. I'm not 0:01:15.360 --> 0:01:18.200 sure the two are necessarily rely Yeah, I would say 0:01:18.319 --> 0:01:21.720 probably the the alliance is you know, is fine. Um, 0:01:22.000 --> 0:01:25.840 I think they're you know, ebbsom and flows of of 0:01:25.880 --> 0:01:29.200 that alliance. And and there there's certainly differences between for example, 0:01:29.520 --> 0:01:32.400 the way George Bush conducted himself, George W. Bush conducted 0:01:32.440 --> 0:01:35.000 himself with Europe, the way Obama did, and now the 0:01:35.000 --> 0:01:38.039 way Trump is doing it. And it tends to you know, 0:01:38.680 --> 0:01:42.560 move along with the with the various people involved. I've 0:01:42.560 --> 0:01:44.080 always said that, you know, I've been going to Europe 0:01:44.080 --> 0:01:46.600 for you know, close to thirty years, and and there's 0:01:46.680 --> 0:01:49.840 kind of this you're either neutral about the US off 0:01:49.880 --> 0:01:52.480 European or you're really negative about the US off your 0:01:52.480 --> 0:01:56.080 European They're never almost a little bit positive about the 0:01:56.160 --> 0:01:57.680 US because then I guess you have to get up 0:01:57.720 --> 0:02:01.160 your European citizenship or something. Um. And I joke about 0:02:01.160 --> 0:02:03.400 it a little bit. But there tends to be a 0:02:03.480 --> 0:02:07.800 lot of the political differences show up in the relationships 0:02:08.040 --> 0:02:11.840 that that are even conversation with investors. It's not even 0:02:12.000 --> 0:02:15.120 about the leaders of the country. So there's certainly a 0:02:15.200 --> 0:02:18.360 more i don't know, progressive mindset maybe in Europe that 0:02:18.400 --> 0:02:22.320 doesn't necessarily exist in the US. Fully, there's obviously different 0:02:22.360 --> 0:02:25.240 political sizes in the US, but it's much more entrenched 0:02:25.280 --> 0:02:27.200 in Europe. And I think that tends to come to 0:02:27.200 --> 0:02:31.120 the four when you have different leaders who have different perspectives. 0:02:31.280 --> 0:02:34.120 At this stage, four months into this this administration does 0:02:34.120 --> 0:02:35.640 a tweet like the one this morning or the one 0:02:35.760 --> 0:02:40.040 last week about UH automakers German automakers comment about German 0:02:40.040 --> 0:02:42.120 automakers not a tweet, but but a common doesn't have 0:02:42.200 --> 0:02:44.520 much of an effect on your your world, not really. 0:02:44.800 --> 0:02:48.200 I mean there there's there was. I think initially when 0:02:48.200 --> 0:02:51.519 the tweets came out and the people were and I 0:02:51.560 --> 0:02:53.120 don't know if those novel are knew it, just it 0:02:53.240 --> 0:02:56.040 had an immediate reaction in the markets. And then they've 0:02:56.080 --> 0:02:58.200 been having fewer and fewer impacts in the market, and 0:02:58.440 --> 0:03:00.400 that was kind of our thought process that have eventually 0:03:00.400 --> 0:03:02.680 it would kind of fade into the background. Um, it 0:03:02.720 --> 0:03:05.959 doesn't help, but it's I don't think it's a dominant feature. 0:03:05.960 --> 0:03:08.760 I think we care more about economic progress. Jim Bullard 0:03:08.760 --> 0:03:10.400 of the St. Louis FID was never view by Bloomberg 0:03:10.400 --> 0:03:12.640 guests to Day and talked about how this new administration 0:03:12.639 --> 0:03:14.600 will have to fill the expectations it's it's laid out 0:03:14.600 --> 0:03:17.160 in the stock market has for what it intends to do. 0:03:17.320 --> 0:03:19.800 How heavily does that way on you. So, you know, 0:03:19.840 --> 0:03:21.880 we we track a lot of different things in the 0:03:22.040 --> 0:03:25.320 in the stock market, including let's say high tax versus 0:03:25.320 --> 0:03:29.079 low tax performance stocks. We look at the um the 0:03:30.040 --> 0:03:33.880 interest expense deductibility potentially being removed. You know, how's that 0:03:33.919 --> 0:03:37.600 affecting stocks that have that kind of exposure. And most 0:03:37.600 --> 0:03:39.560 of the Trump trades have pretty much rolled off. So 0:03:39.680 --> 0:03:42.960 the idea that this is being priced in the market UM, 0:03:43.000 --> 0:03:45.760 I think is antiquated. With all due respect to Mr Bullard, 0:03:45.800 --> 0:03:47.960 I think he's wrong on that on that front. To 0:03:48.920 --> 0:03:52.440 the city up, good morning, every good morning, David, Tom 0:03:52.440 --> 0:03:55.560 glad you survived the three weekend, made it up with 0:03:55.640 --> 0:03:58.480 that incident and we watched all Pirates of the Caribbean. 0:03:58.560 --> 0:04:00.960 You did. It's like there's eight of our Yeah, not 0:04:01.040 --> 0:04:03.120 the new one, I hope, Yeah, I got I got 0:04:03.200 --> 0:04:07.600 ice shadow on that. It's great for radio. The one 0:04:07.640 --> 0:04:09.840 thing on the data screen that's there, and I know 0:04:09.880 --> 0:04:12.520 the record highs inequities and all that sp and not 0:04:12.640 --> 0:04:16.839 the doubt yet is curve flattening? What is kurve flattening 0:04:16.880 --> 0:04:19.719 signal to a guy like you. In my mind, it's 0:04:19.800 --> 0:04:22.520 more about global flows of money than it is about 0:04:22.520 --> 0:04:26.400 economic trend. Now I'm probably not. I can find people 0:04:26.400 --> 0:04:28.240 who will say the other side of that argument, that 0:04:28.279 --> 0:04:32.320 there's something wrong economically. Um. The reason I say that 0:04:32.440 --> 0:04:35.320 is because what is what's your competition to a tune 0:04:35.360 --> 0:04:38.560 a quarter tenure yield in the world today? Point oh 0:04:38.600 --> 0:04:41.040 four and J G B's uh point for on a 0:04:41.080 --> 0:04:44.560 bund yield of equivalent duration um. And I think if 0:04:44.600 --> 0:04:47.720 there's a problem, chances are tenure treasuries would rally or 0:04:47.760 --> 0:04:50.160 the dollarwood rally. So if you're a foreign investor, buying 0:04:50.160 --> 0:04:53.240 the US isn't a particularly bad trade. And just very quickly, folks, 0:04:53.279 --> 0:04:58.200 that's price up, yield down. So the curve is flatter 0:04:58.320 --> 0:05:01.760 from the land of Lefkovitch because the tenure yield is 0:05:02.080 --> 0:05:05.480 lower rather than higher. Would you be a steeper curve 0:05:05.800 --> 0:05:08.280 we have all the fet is also raising rates on 0:05:08.320 --> 0:05:10.080 the short end, So okay, we need to have a 0:05:10.120 --> 0:05:13.120 moment of silence. David, it's the crunch time for the 0:05:13.160 --> 0:05:18.680 cif A exams. It's coming up this weekend. All cf 0:05:18.680 --> 0:05:21.360 A candidates had a miserable Memorial Day weekend and we 0:05:21.440 --> 0:05:24.000 say good morning to all of them. They haven't slept. 0:05:24.279 --> 0:05:26.360 They say best of luck as well. There's like eight 0:05:26.400 --> 0:05:28.400 thousand of them at City Group. Right, did they get 0:05:28.400 --> 0:05:30.360 the week off? I don't think they have the week off, 0:05:30.360 --> 0:05:32.560 And I've had associates who've definitely taken a couple of 0:05:32.600 --> 0:05:36.160 days off for it. Uh. They're going back to your 0:05:36.160 --> 0:05:39.240 points about the yield curve flattening. I think it's it's 0:05:39.360 --> 0:05:42.800 less from my perspective about the economy. UM, most of 0:05:42.839 --> 0:05:45.560 the data that I look at UM is still pretty supportive. 0:05:45.600 --> 0:05:48.120 The one area that's squishy, call it is the autos. 0:05:48.240 --> 0:05:52.000 But if I look at capital spending, intention, hiring intentions, 0:05:52.240 --> 0:05:55.599 new order trends, UM, consumer sentiment, all the kinds of 0:05:55.600 --> 0:05:58.560 things that you'd like to be seeing are are suggesting 0:05:58.760 --> 0:06:01.840 that we aren't necessarily in the economy. And again, autos 0:06:01.640 --> 0:06:03.560 is an area that there's been a little bit of 0:06:04.279 --> 0:06:09.560 tension around prime subprime loans and uh and and retail 0:06:09.600 --> 0:06:12.520 sales trans inventory. There is some issues in autos and 0:06:12.600 --> 0:06:15.240 we're monitoring carefully. Yeah, this great note out a couple 0:06:15.240 --> 0:06:18.280 of weeks back on growth. Looking at growth as you've 0:06:18.279 --> 0:06:20.080 been thinking about it chewing it over as we've seen 0:06:20.080 --> 0:06:22.240 the White House continue to reiterate, we're gonna see three percent? 0:06:22.960 --> 0:06:24.920 What what new? What? What new things have you come 0:06:24.920 --> 0:06:27.040 to inclusion on what what have you learned here? Thinking 0:06:27.080 --> 0:06:29.600 about growth in such detail. So we were we were 0:06:29.600 --> 0:06:31.479 thinking about a longer term perspective when were wroth at 0:06:31.480 --> 0:06:33.640 the pieces called growth, and the one you're highlighting was 0:06:33.720 --> 0:06:36.880 called growth growth My kingdom for growth, UM and and 0:06:36.960 --> 0:06:39.320 the idea was more around what are the long term 0:06:39.400 --> 0:06:42.240 drivers of growth? And historically it's been things like population growth, 0:06:42.320 --> 0:06:46.080 income growth, productivity, and innovation. Now I think innovation is 0:06:46.120 --> 0:06:49.000 still pretty darned healthy out there. UM. I was out 0:06:49.000 --> 0:06:51.440 in California last week, and you know stle Com values 0:06:51.480 --> 0:06:55.800 humming UM. But if you look at the demographics, they've 0:06:55.839 --> 0:06:58.960 clearly weakened the The birth rates are down, population growth 0:06:59.080 --> 0:07:02.479 is down, still adding eighty two million people globally every year, 0:07:02.560 --> 0:07:06.640 but off off of larger base, the percentage increases decline UM. 0:07:07.440 --> 0:07:09.920 Income growth was a big story in emerging markets over 0:07:09.960 --> 0:07:13.120 the past decade plus and and it's still happening. It's 0:07:13.200 --> 0:07:15.240 not as aggressive, but it's still happening again off a 0:07:15.320 --> 0:07:18.600 higher base. UM. And the one area that's probably the 0:07:18.680 --> 0:07:20.640 most disturbing and I think is the one that causes 0:07:20.720 --> 0:07:24.200 angst amongst economists around the world is productivity is just 0:07:24.760 --> 0:07:28.360 seemingly not there despite all this investment in technology. And 0:07:28.440 --> 0:07:30.080 I'm not sure if it's because people are sitting at 0:07:30.200 --> 0:07:32.400 you know, watching you know, looking at their Facebook feeds 0:07:32.880 --> 0:07:34.720 h during the day and seeing what their friends had 0:07:34.760 --> 0:07:37.600 for lunch, um, or you know, or they're playing candy 0:07:37.640 --> 0:07:40.800 Crush instead of working at their desks. I just don't know, um, 0:07:41.400 --> 0:07:43.200 But but there there is some you know, you made 0:07:43.200 --> 0:07:47.080 a common earlier in on TV Tom about Marty Felstone. 0:07:47.160 --> 0:07:49.240 I know that Harvard there are spending a lot of 0:07:49.320 --> 0:07:51.680 time trying to understand why we're not seeing all this 0:07:51.760 --> 0:07:55.800 productivity benefits. Maybe we're measuring widgets per man hour correct 0:07:55.840 --> 0:07:59.000 incorrectly in this kind of service based economy with with 0:07:59.160 --> 0:08:02.240 new digital tech achnology. And I have sympathy to that 0:08:02.360 --> 0:08:05.440 view because it does seem like things are much more productive. 0:08:05.480 --> 0:08:07.600 You can sit there in the cab, pay your bills, 0:08:08.000 --> 0:08:10.680 you know, off your phone through your bank account with 0:08:10.720 --> 0:08:13.360 mobile so I mean that that's much more productive than 0:08:13.400 --> 0:08:15.280 sitting at home at night writing check Okay, but David, 0:08:15.280 --> 0:08:17.200 where are you on this? Because to me, it's a 0:08:17.280 --> 0:08:20.400 partition of American society as much as we saw on 0:08:20.480 --> 0:08:23.360 the reporting of a mobile day weekend, there's a group 0:08:23.400 --> 0:08:26.880 of society that's taking advantage of what Tobias just mentioned 0:08:27.440 --> 0:08:29.200 as a whole another group that's just being loved by 0:08:29.240 --> 0:08:31.880 the wayside. And I suppose too, there's the argument as well, Tobias, 0:08:32.920 --> 0:08:34.559 how are we getting any better at measuring this? Do 0:08:34.559 --> 0:08:37.040 you do you see signs that we are? No, I 0:08:37.120 --> 0:08:38.800 don't see any. But I don't see signs we're getting 0:08:38.800 --> 0:08:40.839 better at measuring And I think this is I think 0:08:40.880 --> 0:08:43.199 this is where economists are struggling. I've talked to a 0:08:43.280 --> 0:08:45.280 number of them and they have not kind of found 0:08:45.320 --> 0:08:48.679 the holy grail on this um. But you know, to 0:08:49.000 --> 0:08:52.000 your point, time, I think innovation over time has always 0:08:52.080 --> 0:08:53.959 left some people behind. I mean, when I went back 0:08:53.960 --> 0:08:57.160 in the ninet thirties, I think was close to um 0:08:57.440 --> 0:08:59.920 of the American workforce was working down on the form. 0:09:00.120 --> 0:09:02.360 Today it's less than two percent. Productivities up more than 0:09:02.400 --> 0:09:06.520 tenfold through a whole bunch of measures, including mechanized farming, 0:09:06.600 --> 0:09:12.360 including anti fungus type UM pesticides including UH modified c 0:09:12.640 --> 0:09:15.320 that can that can survive different temperature swings. So there's 0:09:15.320 --> 0:09:19.040 a lot of different things going on that allows people 0:09:19.760 --> 0:09:21.559 to to kind of move elsewhere. The question is, and 0:09:21.600 --> 0:09:23.520 I think this is the fair one, are we retraining 0:09:23.640 --> 0:09:26.079 people fast enough well for that new economy? And the 0:09:26.120 --> 0:09:28.280 answer is probably know in The answer is that's where 0:09:28.360 --> 0:09:32.480 every article ends upgoing. Is this mystery of retraining and 0:09:32.600 --> 0:09:36.120 almost career shift, which is a theme under its own, 0:09:36.679 --> 0:09:51.480 Or Tobias Levkovich of sitting David Gurr and and with 0:09:51.640 --> 0:09:54.400 you on a Tuesday, four day workwate somebody said a 0:09:54.520 --> 0:09:57.880 younger soul, David said, what's a holiday length and work week? 0:09:58.920 --> 0:10:01.120 And you know, I said, well, you gotta live it. 0:10:01.200 --> 0:10:03.199 You know how it is. Folks, you're like working five 0:10:03.320 --> 0:10:05.679 days and you work four days and they tell you 0:10:05.800 --> 0:10:08.240 to squeeze in five days or six days, and that's 0:10:08.280 --> 0:10:10.800 how you get to a holiday length and at work week. 0:10:10.840 --> 0:10:14.480 He knows about that. He's an academic professor. That was 0:10:14.559 --> 0:10:22.920 a little sarcasm there, Professor Calamarus at Columbia University Hard Work, CHERYLS. Calamaris, 0:10:22.960 --> 0:10:27.880 who's planning a sixth sabbatical reforming financial regulation after Dodd 0:10:27.960 --> 0:10:31.760 Frank is a small but important book. If you wrote 0:10:31.840 --> 0:10:36.280 this book for the believers in a more conservative free 0:10:36.320 --> 0:10:39.920 market take on regulation, what's in this book for liberals? 0:10:40.320 --> 0:10:44.320 What's in this book for Democrats that support UM? Senator 0:10:44.400 --> 0:10:48.760 Warren Speaker Pelosi? Why do they need to read this book? Actually, Tom, 0:10:48.920 --> 0:10:51.000 at the end of the book, I try to argue 0:10:51.080 --> 0:10:55.839 that it's exactly directed to them, because, UM, some of 0:10:55.920 --> 0:10:59.920 the concerns the ineffectiveness of regulation, not just the high 0:11:00.040 --> 0:11:03.640 costs of regulation, and also the collapse of due process 0:11:03.720 --> 0:11:08.319 in regulation should particularly be concerns for Democrats, especially now 0:11:08.440 --> 0:11:11.480 that they're not in power. So we've had eight years 0:11:11.600 --> 0:11:14.120 of the Obama administration. They don't worry about process the 0:11:14.200 --> 0:11:16.600 Democrats when they're in control, but they're not in control 0:11:16.720 --> 0:11:19.240 right now. Trump is going to point, for example, at 0:11:19.320 --> 0:11:21.640 least five and maybe all seven of the governors of 0:11:21.679 --> 0:11:26.439 the FED, and now the discretion the unlimited discretionary uh 0:11:26.679 --> 0:11:30.319 sort of moment to moment cough cask process of regulation 0:11:30.800 --> 0:11:34.880 is going to be in the people's hands that he appoints. 0:11:35.200 --> 0:11:38.359 So I think that it's an attractive time for Democrats 0:11:38.440 --> 0:11:41.920 to be thinking about due process given that, UH, some 0:11:42.120 --> 0:11:44.520 of their concerns about the Trump administration. So I I 0:11:44.640 --> 0:11:47.840 really do feel that this is a bipartisan story. Um. 0:11:48.440 --> 0:11:51.079 And I wouldn't even describe this as a conservative set 0:11:51.120 --> 0:11:53.280 of principles. I would just describe it as a rational 0:11:53.360 --> 0:11:56.800 set of principles. The the the academic literature over the 0:11:56.880 --> 0:12:02.319 past nine years has now evaluated the regulatory reforms, and 0:12:02.480 --> 0:12:06.920 the evaluation is very negative. The regulatory reforms aren't accomplishing 0:12:07.000 --> 0:12:10.520 what they wanted to accomplish by their own lights. They're 0:12:10.559 --> 0:12:13.960 doing it at very high cost and having pretty much 0:12:14.040 --> 0:12:18.000 destroyed due process uh in the regulatory sphere. So I 0:12:18.080 --> 0:12:20.599 think it's a it's a failure across the board. What 0:12:20.760 --> 0:12:22.559 lessons can we can we learn? What lessons can we 0:12:22.679 --> 0:12:25.280 draw from what's happened with the so called fiduciary rule. 0:12:25.360 --> 0:12:27.480 This is something that was in the prominence of Department 0:12:27.520 --> 0:12:28.920 of Labor for some time. We have a new Labory 0:12:28.960 --> 0:12:31.040 Secretary who has expressed some desire for the sec to 0:12:31.120 --> 0:12:35.160 take on a role in its implementation and oversight. Uh. Indeed, 0:12:35.160 --> 0:12:36.920 it seems like we may be headed in that that direction. 0:12:37.120 --> 0:12:39.360 What does that city about the level of complexity associated 0:12:39.360 --> 0:12:41.800 with financial regulation now that you have two different agencies 0:12:42.320 --> 0:12:44.559 fighting this truth war over who's gonna oversee a rule 0:12:44.679 --> 0:12:46.800 like that one? It's an excellent question. I mean, I 0:12:46.880 --> 0:12:49.480 think there are two things that leap to mind. One is, 0:12:50.400 --> 0:12:54.720 once people are used to something and have already gone 0:12:54.800 --> 0:12:58.880 through spending the costs to adopt it, especially the large players, 0:12:59.320 --> 0:13:01.280 they want to keep with the status quo. So you're 0:13:01.320 --> 0:13:04.559 seeing that having already implemented some changes or about to 0:13:04.640 --> 0:13:07.480 implement them, having paid the cost of it, they now 0:13:07.559 --> 0:13:10.040 don't want to have to think again about whether the 0:13:10.080 --> 0:13:13.520 fiduciary rule makes sense. Um. I think that there's another 0:13:13.679 --> 0:13:18.760 piece to it, which is that specific to the fiduciary rule, 0:13:18.840 --> 0:13:21.640 that there are some arguments in favor of it. Um, 0:13:21.800 --> 0:13:23.800 it's a trade off. It's not clear that it's a 0:13:23.840 --> 0:13:26.000 good idea, but it's not clear that it's a terrible idea. 0:13:26.040 --> 0:13:30.640 So I think I was very encouraged that, um, we're 0:13:30.720 --> 0:13:33.760 now going to have from the Labor Department, uh, a 0:13:33.920 --> 0:13:36.560 sort of thoughtful review. That's what they should be doing. 0:13:36.760 --> 0:13:39.400 Is the president on board. I can't figure out if 0:13:39.480 --> 0:13:45.880 he's a conservative liberal, regulationist deregulationist. Depends on the tweet, Yeah, 0:13:46.280 --> 0:13:47.960 what is it? You gotta you gotta are you gonna 0:13:48.040 --> 0:13:51.240 join his staff. Can we make some news here this morning? UM, 0:13:52.040 --> 0:13:55.800 I have not been approved. Let's just leave it at that. 0:13:56.160 --> 0:13:59.160 And but I would say that I would be willing 0:13:59.240 --> 0:14:01.520 to because I think that this is a time where 0:14:01.559 --> 0:14:04.520 we have to come together. And I think that the 0:14:04.600 --> 0:14:08.599 President is uh not fully formed. His views are not 0:14:08.720 --> 0:14:11.960 fully formed on exactly what to do in financial regulation. 0:14:12.040 --> 0:14:15.960 But I think his instinct is right, which is that there's, um, 0:14:16.480 --> 0:14:19.880 there's been a lack of discipline in terms of cost 0:14:19.920 --> 0:14:23.640 benefit analysis on regulation, and so I think that his 0:14:24.120 --> 0:14:27.800 his action so far on the regulatory front um have 0:14:27.920 --> 0:14:32.080 actually been very encouraging. And as I would emphasize, you 0:14:32.160 --> 0:14:34.120 have to also ask who's in charge now in the 0:14:34.200 --> 0:14:37.920 Treasury Department. Mutan doesn't really seem to know much about 0:14:38.160 --> 0:14:42.160 financial regulation yet, and he doesn't have an under secretary. 0:14:42.200 --> 0:14:44.560 In fact, now I don't even think there's one that's 0:14:44.600 --> 0:14:48.800 been named. Because can you pass the litmus test? I'm 0:14:48.840 --> 0:14:53.400 not sure. Well, you know, I think Nick Burns, who 0:14:53.480 --> 0:14:57.840 joined policy, are you on the ugly list? I maybe 0:14:58.520 --> 0:15:02.600 I don't know. I did know. I criticized the idea 0:15:02.640 --> 0:15:06.600 of Chinese currency manipulation in two thousand and fifteen, that's 0:15:06.640 --> 0:15:09.080 been the main, the main thing. So you never know, 0:15:09.600 --> 0:15:11.760 how do you teach finance differently than you did in 0:15:11.880 --> 0:15:14.000 two thousand six. You don't need a face lift to 0:15:14.040 --> 0:15:17.360 do that, but how do you teach the troops differently 0:15:17.440 --> 0:15:20.480 than you did in June or in April of two 0:15:20.520 --> 0:15:25.440 thousand seven. You know, UH finance has sort of um 0:15:25.880 --> 0:15:31.000 fallen off a cliff UH in NBA curriculums, mainly because 0:15:31.160 --> 0:15:36.120 of the change in UH jobs that happened in two 0:15:36.200 --> 0:15:39.240 thousand seven, and so a lot of the teaching has 0:15:39.320 --> 0:15:43.880 to do with trying to think through UM how crises occur. 0:15:44.320 --> 0:15:46.960 And I've been teaching, of course for twenty years called 0:15:46.960 --> 0:15:52.000 emerging financial markets, which is all about how things tectonic 0:15:52.480 --> 0:15:56.120 shifts happen in different countries. So it was very natural 0:15:56.240 --> 0:15:58.680 for me. I I feel like it actually helped my 0:15:59.160 --> 0:16:04.880 class because it made risk and systemic risk really was 0:16:04.960 --> 0:16:07.000 brought to life by the crisis. So for me it 0:16:07.120 --> 0:16:11.080 was actually good news. But for much of our teaching 0:16:11.160 --> 0:16:13.800 and finance, I have to say, I think that it 0:16:14.000 --> 0:16:17.240 was a little bit overconfident that we thought that it was. Ah, well, 0:16:17.320 --> 0:16:23.440 it's also normal and it's also just about technical details, 0:16:23.840 --> 0:16:27.440 whereas In fact, people started asking very basic questions, do 0:16:28.080 --> 0:16:32.360 do banks know what they're doing? Um? Do people have 0:16:32.520 --> 0:16:35.520 a way to quantify risk on a forward looking basis 0:16:35.600 --> 0:16:39.440 that's useful? So these were really fundamental questions. I think 0:16:39.480 --> 0:16:42.520 the curriculum has been affected. But from my class, this 0:16:42.800 --> 0:16:46.240 was really grisp from my mills, because that's that's really 0:16:46.280 --> 0:16:48.120 what I like to teach. I wanna ask you about 0:16:48.440 --> 0:16:50.760 Alan Meltzer. He passed away on May the eighth. We 0:16:50.800 --> 0:16:53.160 were very closely do something on the show, and then 0:16:53.480 --> 0:16:56.600 the president fired as FBI director and things got busy 0:16:56.640 --> 0:16:58.400 the following morning. I know that you you knew him 0:16:58.440 --> 0:17:00.280 well and every worked on the shadow Open Market Committe 0:17:00.360 --> 0:17:02.000 with what should we know about him? And in his 0:17:02.120 --> 0:17:04.440 legacy Again, he passed away on May the eight. Well, 0:17:04.880 --> 0:17:09.200 Allen was an amazingly diverse and hard working person. I 0:17:09.320 --> 0:17:11.639 was with him in the hospital. Uh just you know 0:17:11.840 --> 0:17:13.920 a couple of days before he died, and he was 0:17:14.000 --> 0:17:16.560 working in the I c U. He was working on 0:17:16.680 --> 0:17:20.080 his new book with pen and paper, with the oxygen 0:17:20.280 --> 0:17:24.119 hooked up and very very weak. UM. So he was 0:17:24.240 --> 0:17:27.840 just somebody who had an incredible dedication. He worked on 0:17:28.119 --> 0:17:32.280 issues as diverse as um what's the link between monetary 0:17:32.359 --> 0:17:37.240 policy and inflation or the political economy of elections? Why 0:17:37.480 --> 0:17:42.160 sometimes growth versus redistribution wins in an election. He also 0:17:42.280 --> 0:17:45.920 worked on reform of the international financial institutions, the I 0:17:46.080 --> 0:17:49.840 m F, the World Bank, etcetera. UM. He worked though 0:17:50.320 --> 0:17:55.600 on many other issues. UM he founded the Shadow Open 0:17:55.680 --> 0:18:00.320 Market Committee. UM. You know, just an amazing contribute. What 0:18:00.480 --> 0:18:03.639 was his work with Carl Brunner of the University of Rochester. 0:18:04.160 --> 0:18:08.280 The Carnegie Rochester series was legendary for all in economics. 0:18:08.680 --> 0:18:11.760 What was Carl Brunner Elor Meltzer's legacy. Well, you know, 0:18:12.240 --> 0:18:16.280 I was at Allen's apartment and I noticed several pictures 0:18:16.320 --> 0:18:19.480 in his office of Carl Brunner. Still so, Carl Brunner 0:18:19.600 --> 0:18:22.800 was an incredible influence on Allen and not all of us. 0:18:23.000 --> 0:18:27.000 And it was a personal partnership of dedication to public 0:18:27.080 --> 0:18:32.159 policy old school style, right people who saw problems at 0:18:32.200 --> 0:18:35.560 that time in the seventies, people were saying that inflation 0:18:35.720 --> 0:18:39.560 wasn't caused by monetary policy, and Carl and Alan, I 0:18:39.680 --> 0:18:43.760 think we're absolutely dedicated to showing that wasn't true. In 0:18:43.760 --> 0:18:49.520 the Carnegie Rochester Public Policy series was really unique very valuable. 0:18:49.560 --> 0:18:52.480 Charles Collenyers, thank you so much for Columbia. David. My 0:18:52.720 --> 0:18:56.760 great Allen Meltzer memory was somebody holding an umbrella over 0:18:56.840 --> 0:18:59.480 his head in the pouring rain at Jackson Hole and 0:18:59.600 --> 0:19:02.280 his lee upset that he's wasting time. My TV said 0:19:02.880 --> 0:19:05.639 Mr Meltzer. There's too many panels, aren't there? In heat? 0:19:05.720 --> 0:19:08.719 God fear Tom. That used to be simpler, there were 0:19:08.840 --> 0:19:14.320 fewer panels. In honor of Allan Meltzer. Charles calumeres with 0:19:14.400 --> 0:19:23.200 thoughts there. This is Bloomberg Brunt you by Bank of 0:19:23.280 --> 0:19:27.840 America Mary Lynch. With virtual reality, virtually everything will change. 0:19:28.359 --> 0:19:32.920 Discover opportunities in a transforming world. VI of a mL 0:19:33.040 --> 0:19:38.600 dot Com, slash VR, Mary Lynch, Pierced Fenner and Smith Incorporated. 0:19:44.080 --> 0:19:47.879 There's something new from Bloomberg. It's called Lens. Starting right now, 0:19:48.040 --> 0:19:51.360 you can use the Bloomberg iOS app off your iPhone 0:19:51.520 --> 0:19:56.120 or iPad, or our new Google Chrome extension to read 0:19:56.160 --> 0:19:59.919 any news story on any website, scan it, and then 0:20:00.200 --> 0:20:04.280 instantly see the news stories relevant market data from Bloomberg. 0:20:04.640 --> 0:20:07.680 In addition, see all the bios of the key people 0:20:08.160 --> 0:20:11.320 mentioned in the story. It's called Lens, and it is 0:20:11.440 --> 0:20:14.480 just that a lens into the people and the data 0:20:14.640 --> 0:20:18.879 of any story you may be reading. Again, Lens brings 0:20:18.880 --> 0:20:22.119 you the power of Bloomberg's news and data. Download or 0:20:22.200 --> 0:20:25.520 io s app or search for the Bloomberg extension at 0:20:25.560 --> 0:20:28.879 the Chrome Store to try lens out. Learn more at 0:20:28.920 --> 0:20:37.680 Bloomberg dot com slash lens. David Harrow with US from Chicago. 0:20:37.800 --> 0:20:41.920 He invests in large cap internationals and is known he'll 0:20:41.960 --> 0:20:44.200 have an off You're here and off You're there, but 0:20:44.760 --> 0:20:49.240 has put together just a terrific long term track record. David, 0:20:49.320 --> 0:20:52.880 good morning. What is your appetite for international stocks right now? 0:20:53.320 --> 0:20:57.359 Has all the easy money been made? No? First of all, 0:20:57.400 --> 0:21:00.880 it's never easy to make money time. You know that. Um, 0:21:01.200 --> 0:21:05.000 there's always the beauty of having the globe at your disposal, 0:21:05.080 --> 0:21:07.920 as you are always able to find a place or 0:21:08.000 --> 0:21:12.840 a pocket where there's value where perhaps fear and fright 0:21:12.960 --> 0:21:16.080 have caused opportunity. And I think if you're looking at 0:21:16.119 --> 0:21:20.480 the differential that European equities still sell at from evaluation 0:21:20.560 --> 0:21:24.560 differential perspective to US equities as an example, there's still 0:21:24.640 --> 0:21:28.720 some opportunity there. So we're not seeing fire sale prices 0:21:28.920 --> 0:21:32.520 like we did after Brexit or in February. But we're 0:21:32.560 --> 0:21:37.360 seeing some reasonable valuations, especially in some of the European 0:21:37.520 --> 0:21:41.240 continental blue chips and financials. Where are the other places 0:21:41.280 --> 0:21:45.120 and pockets you're you're looking at outside of the Eurozone. Well, 0:21:45.240 --> 0:21:47.920 we have increased our m exposure a little bit, but 0:21:48.000 --> 0:21:51.760 again this is all driven from bottom up valuation. Uh, 0:21:52.160 --> 0:21:55.919 some places are easier than others. UM, we have an 0:21:55.920 --> 0:21:59.479 exposure to I've got a few good quality Mexican stocks 0:21:59.520 --> 0:22:03.200 Group or all of Visa is an example. UM. And 0:22:03.359 --> 0:22:06.399 we we actually have in our large camp strategy at 0:22:06.520 --> 0:22:09.320 Chinese stock I do which is not of course the 0:22:09.440 --> 0:22:12.399 leading search engine in China, but one of the leaders 0:22:12.480 --> 0:22:16.120 and artificial intelligence, one of the top two or three 0:22:16.160 --> 0:22:20.520 players and artificial intelligence in the world. So, and they're 0:22:20.560 --> 0:22:24.879 not owned, there's not a direct government ownership, which always 0:22:24.920 --> 0:22:28.479 scares us. Of course, there are some government influence because 0:22:28.600 --> 0:22:32.840 of how the Chinese regulates the Internet, but it's it's 0:22:32.920 --> 0:22:36.600 not owned by government entities, which is which is the 0:22:36.800 --> 0:22:40.800 case for a great deal of the Chinese stocks. Is 0:22:40.880 --> 0:22:42.840 China a place you're looking to more and more for 0:22:43.400 --> 0:22:45.960 companies that are innovative. You mentioned that company doing work 0:22:46.040 --> 0:22:49.639 on yes search, but also AI and I wonder if 0:22:49.680 --> 0:22:52.040 if if that's increasingly the place you look to for 0:22:52.280 --> 0:22:56.240 for new novel technology. Well, it's kind of tough because 0:22:56.359 --> 0:22:59.959