1 00:00:00,120 --> 00:00:02,920 Speaker 1: Brought you by Bank of America, Mary Lynch. Investing in 2 00:00:03,000 --> 00:00:07,840 Speaker 1: local communities, economies and a sustainable future. That's a power 3 00:00:08,080 --> 00:00:12,360 Speaker 1: of global connections. Mary Lynch, Pierce Fenner, and Smith Incorporated 4 00:00:12,760 --> 00:00:26,400 Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:26,440 --> 00:00:29,920 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:29,960 --> 00:00:34,800 Speaker 1: insight from the best of economics, finance, investment, and international relations. 7 00:00:35,240 --> 00:00:40,760 Speaker 1: Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, 8 00:00:40,800 --> 00:00:47,960 Speaker 1: and of course, on the Bloomberg Born On a Monday, 9 00:00:48,000 --> 00:00:50,840 Speaker 1: the eighth of May. This is Bloomberg Surveillance on Bloomberg Radio. 10 00:00:50,880 --> 00:00:53,400 Speaker 1: David Gura in New York, Tom Keen in Paris, where 11 00:00:53,400 --> 00:00:56,000 Speaker 1: plans are underway for the inauguration of a new president, 12 00:00:56,080 --> 00:00:59,960 Speaker 1: Centrist Dimmanuel MCom on s percent of the votes yesterday. 13 00:01:00,040 --> 00:01:03,080 Speaker 1: Far right candidate Marine Leapann had Th mccuonne will take 14 00:01:03,080 --> 00:01:05,839 Speaker 1: office on Sunday. In between now and then, we expect 15 00:01:05,840 --> 00:01:08,720 Speaker 1: to get details on who will comprise his cabinet, and 16 00:01:08,760 --> 00:01:11,000 Speaker 1: we'll be France's next Prime minister. On the show today, 17 00:01:11,000 --> 00:01:14,240 Speaker 1: a host of great guests from France economists, political scientists 18 00:01:14,520 --> 00:01:16,480 Speaker 1: and investors and Rocher Charma will join us here in 19 00:01:16,480 --> 00:01:20,240 Speaker 1: New York, the chief global strategist at Morgan Stanley. I 20 00:01:20,280 --> 00:01:23,479 Speaker 1: believe my co host Tom Keane has made his way 21 00:01:23,480 --> 00:01:26,080 Speaker 1: from the TV studio to the radio. Sto, Tom, we 22 00:01:26,160 --> 00:01:31,559 Speaker 1: have Bravo yesterday. That was a marathon performance, but well done. 23 00:01:31,560 --> 00:01:35,280 Speaker 1: You was wonderful to capture the moment. David Gura on 24 00:01:35,319 --> 00:01:38,039 Speaker 1: the River Sin as all of our listeners know that 25 00:01:38,160 --> 00:01:41,600 Speaker 1: had the privilege of coming U to France, to be 26 00:01:41,680 --> 00:01:44,920 Speaker 1: on the sand by the Eiffel Tower. Uh, it was 27 00:01:45,040 --> 00:01:48,160 Speaker 1: just absolutely fabulous. And then to walk over later that 28 00:01:48,280 --> 00:01:52,240 Speaker 1: evening to the Chasa Lise and to see the celebration, 29 00:01:52,800 --> 00:01:55,760 Speaker 1: the horns hawky and the flags waving was really something. 30 00:01:55,840 --> 00:01:58,280 Speaker 1: And of course we all saw the drama the Louver 31 00:01:59,280 --> 00:02:02,840 Speaker 1: as well. David, what was the view from the U 32 00:02:03,000 --> 00:02:06,680 Speaker 1: S What was your takeaway from the festivities in France? Yeah, 33 00:02:06,720 --> 00:02:08,200 Speaker 1: I mean I think that we we were all looking 34 00:02:08,200 --> 00:02:10,520 Speaker 1: to see obviously what this would mean domestically, what this 35 00:02:10,560 --> 00:02:12,560 Speaker 1: is gonna mean for politics in France. But for those 36 00:02:12,600 --> 00:02:14,640 Speaker 1: of us who watched what happened in the Netherlands unfold 37 00:02:14,639 --> 00:02:17,360 Speaker 1: and wondered if we would see a similar move away 38 00:02:17,360 --> 00:02:20,360 Speaker 1: from from the populist currence in France. It was confirmation 39 00:02:20,400 --> 00:02:23,480 Speaker 1: with the fact that maybe the strength of that populist 40 00:02:23,480 --> 00:02:25,720 Speaker 1: movement wasn't what we thought it was just a few 41 00:02:25,760 --> 00:02:28,320 Speaker 1: months ago. Let me bring in our steam Gas. I 42 00:02:28,320 --> 00:02:30,200 Speaker 1: guess if you start strong, would you like to do 43 00:02:30,240 --> 00:02:34,119 Speaker 1: at Bloomberg Surveillance. You can do no better in France 44 00:02:34,240 --> 00:02:38,600 Speaker 1: than Maurice Levy, his decades of experience at Publiss, his 45 00:02:39,200 --> 00:02:43,280 Speaker 1: visibility within the world at Davos and other organizations, but 46 00:02:43,360 --> 00:02:46,920 Speaker 1: of course, far more importantly his affection for his France more. 47 00:02:46,919 --> 00:02:49,280 Speaker 1: Its wonderful to have you with us, with David Gura 48 00:02:49,320 --> 00:02:52,359 Speaker 1: and in New York. You gave us a wonderful history 49 00:02:52,440 --> 00:02:56,520 Speaker 1: lesson earlier of de gal through this fifth Republic, we 50 00:02:56,600 --> 00:03:00,320 Speaker 1: spoke of a sixth Republic and the generational change. How 51 00:03:00,360 --> 00:03:04,160 Speaker 1: does Mr mccam bring the rest of France towards them? 52 00:03:04,200 --> 00:03:07,720 Speaker 1: It is a fractuous nation, isn't it. First of all, 53 00:03:07,760 --> 00:03:10,360 Speaker 1: thank you for having me. I'm very happy to share 54 00:03:10,400 --> 00:03:14,280 Speaker 1: if you use and what happened. I think that imagine mccon, 55 00:03:14,840 --> 00:03:17,880 Speaker 1: we disrupt everything, and they will try at least to 56 00:03:18,000 --> 00:03:22,880 Speaker 1: disrupt everything. We never had a president so young in 57 00:03:22,960 --> 00:03:28,520 Speaker 1: France since Napoleon, and we never had someone who has 58 00:03:28,680 --> 00:03:32,360 Speaker 1: the will and the determination to change things and to 59 00:03:32,400 --> 00:03:36,160 Speaker 1: address the real issues. We are facing a lot of 60 00:03:36,720 --> 00:03:41,480 Speaker 1: problems and issues, and if you look only at the 61 00:03:41,560 --> 00:03:45,360 Speaker 1: internal situation of France, we need to fix an employment 62 00:03:45,400 --> 00:03:48,440 Speaker 1: which is a very high, more than ten percent. We 63 00:03:48,480 --> 00:03:52,440 Speaker 1: need to fix the depth which is more than one percent. 64 00:03:52,680 --> 00:04:01,520 Speaker 1: We need to fix the taxes and all the social 65 00:04:01,600 --> 00:04:06,920 Speaker 1: charges which are weighing too much in the growth of 66 00:04:07,040 --> 00:04:11,119 Speaker 1: our country, and we have to change liberal laws. When 67 00:04:11,160 --> 00:04:14,200 Speaker 1: you look at everything that he has on his plate, 68 00:04:14,720 --> 00:04:18,440 Speaker 1: you can see that it is a big, big undertaking 69 00:04:18,560 --> 00:04:23,000 Speaker 1: that he has in front of him. So we all 70 00:04:23,120 --> 00:04:26,320 Speaker 1: wish that it will be successful. We are all very 71 00:04:26,400 --> 00:04:31,839 Speaker 1: supportive because it is hope that happened yesterday, more than 72 00:04:31,880 --> 00:04:35,799 Speaker 1: the election, more than any of the former election. Maybe 73 00:04:35,800 --> 00:04:38,880 Speaker 1: the only one which is comparable and very different at 74 00:04:38,920 --> 00:04:42,680 Speaker 1: the same time is when Mita has been elected in 75 00:04:42,800 --> 00:04:49,200 Speaker 1: eighty one, as the Socialists have been out of government 76 00:04:49,279 --> 00:04:53,359 Speaker 1: for more than twenty years, it was huge for a 77 00:04:53,440 --> 00:04:57,920 Speaker 1: lot of for half of France. Here it's something which 78 00:04:58,040 --> 00:05:02,640 Speaker 1: is very different because it is first and foremost with 79 00:05:02,720 --> 00:05:07,360 Speaker 1: the young generation, and you have seen that yesterday at 80 00:05:07,440 --> 00:05:12,839 Speaker 1: the Louver with all these young black blob as we say, 81 00:05:13,000 --> 00:05:18,080 Speaker 1: where you have the Black, the Arabs and the Caucasian 82 00:05:18,240 --> 00:05:22,960 Speaker 1: the classication together and this has been the first since 83 00:05:23,600 --> 00:05:28,320 Speaker 1: the World Cup of and we see that there is 84 00:05:29,279 --> 00:05:33,280 Speaker 1: a momentum of hope which is quite uniquet. We're bringing 85 00:05:33,360 --> 00:05:35,320 Speaker 1: David Curry in New York. David More, it's great to 86 00:05:35,320 --> 00:05:36,680 Speaker 1: speak with you once again. Of course we know of 87 00:05:36,760 --> 00:05:40,080 Speaker 1: your your background in advertising. The message so important to you. 88 00:05:40,440 --> 00:05:43,280 Speaker 1: What was it about this candidate's message that resonated so 89 00:05:43,320 --> 00:05:46,599 Speaker 1: well and so widely in France. I think that the 90 00:05:46,640 --> 00:05:49,560 Speaker 1: message was himself. I think that the message was not 91 00:05:49,680 --> 00:05:53,640 Speaker 1: so much because when you go through the program, it 92 00:05:53,760 --> 00:06:00,240 Speaker 1: has not been a program which came as one un 93 00:06:00,520 --> 00:06:05,680 Speaker 1: solid program at the beginning of his journey. It was himself. 94 00:06:05,720 --> 00:06:10,600 Speaker 1: It was the rejuvenation and I think that the fact 95 00:06:10,720 --> 00:06:15,680 Speaker 1: that it was rejuvenating and breaking down all the silos. 96 00:06:15,720 --> 00:06:18,840 Speaker 1: And it was also this very important message which was 97 00:06:19,240 --> 00:06:24,159 Speaker 1: negosh need what no left, not right and it didn't 98 00:06:24,160 --> 00:06:28,320 Speaker 1: want to be portrayed as a representative of the right 99 00:06:28,360 --> 00:06:31,520 Speaker 1: wing or the left wing. He didn't want to be 100 00:06:31,600 --> 00:06:39,360 Speaker 1: seen as a socialist and no at a as only conservative, 101 00:06:40,279 --> 00:06:43,719 Speaker 1: and I think that the Negosh need what is probably 102 00:06:43,760 --> 00:06:47,719 Speaker 1: what has been the most important message which has been 103 00:06:47,760 --> 00:06:51,440 Speaker 1: well received by most of the young people. They didn't 104 00:06:51,960 --> 00:06:58,720 Speaker 1: see with the old parties, a representation of the hopes 105 00:06:58,960 --> 00:07:02,560 Speaker 1: and who they are. It was some sixty four some 106 00:07:02,720 --> 00:07:06,680 Speaker 1: years ago that you came from Morocco explained to us 107 00:07:07,360 --> 00:07:11,160 Speaker 1: where the ghosts of the Arab world will will go 108 00:07:11,840 --> 00:07:14,880 Speaker 1: for France if we look at Algiers, the collapse of 109 00:07:14,880 --> 00:07:18,760 Speaker 1: Algiers and all of the decolonization, what will happen now 110 00:07:19,160 --> 00:07:22,640 Speaker 1: to that historic tension that we see in Paris and 111 00:07:22,720 --> 00:07:26,840 Speaker 1: frankly polarizing around all of France. How will that change 112 00:07:26,920 --> 00:07:31,720 Speaker 1: under mcrow? When I arrived, there was a Chinda and 113 00:07:31,800 --> 00:07:34,760 Speaker 1: that was the first born in Morocco because my family 114 00:07:35,000 --> 00:07:39,400 Speaker 1: was a refugee because of the war. So it's I'm 115 00:07:39,440 --> 00:07:43,400 Speaker 1: not a fair representative. I understand that, but you've lived that, 116 00:07:43,720 --> 00:07:47,520 Speaker 1: You've lived showing up yes, definitely, And I think that 117 00:07:49,720 --> 00:07:57,120 Speaker 1: along the years we have created the situation where we 118 00:07:57,240 --> 00:08:05,520 Speaker 1: opposed generation to generation, communities to other communities, and instead 119 00:08:05,560 --> 00:08:08,680 Speaker 1: of trying to unite the people and to create one 120 00:08:08,720 --> 00:08:14,640 Speaker 1: single country with one single community, everything that has been done, 121 00:08:15,280 --> 00:08:20,160 Speaker 1: if you look at the last fifty years was to 122 00:08:20,280 --> 00:08:29,120 Speaker 1: fragment the country not only between refugees and French roots people, 123 00:08:29,600 --> 00:08:34,520 Speaker 1: it is also between the people coming from the countryside 124 00:08:34,600 --> 00:08:36,920 Speaker 1: and the people in the cities, the people of the 125 00:08:37,040 --> 00:08:40,240 Speaker 1: universities and the people who have no education of very 126 00:08:40,240 --> 00:08:45,360 Speaker 1: little education. All these has created the situation where we 127 00:08:45,520 --> 00:08:51,520 Speaker 1: have a highly fragmented country. And despite the will that 128 00:08:52,040 --> 00:08:56,560 Speaker 1: a Lord of sar Cozy or even she had had 129 00:08:56,800 --> 00:09:01,960 Speaker 1: to change the situation, no one has clearly a dry 130 00:09:02,400 --> 00:09:04,199 Speaker 1: So I was talking to David Kerr about to see 131 00:09:04,200 --> 00:09:06,400 Speaker 1: the other day David can jump in here very quickly 132 00:09:06,520 --> 00:09:09,360 Speaker 1: because David, this is where Mr McCraw has to be 133 00:09:09,400 --> 00:09:13,320 Speaker 1: different than these previous leaders. Yeah, you know you mentioned 134 00:09:13,360 --> 00:09:14,840 Speaker 1: here more he's just a moment ago that he's going 135 00:09:14,920 --> 00:09:18,079 Speaker 1: to try to disrupt everything. How difficult is it going 136 00:09:18,120 --> 00:09:19,600 Speaker 1: to be for him to do all of this. We 137 00:09:19,640 --> 00:09:22,240 Speaker 1: can talk about the minutia of getting parliamentary votes and 138 00:09:22,400 --> 00:09:24,640 Speaker 1: all that, but just to keep up this momentum, how 139 00:09:24,679 --> 00:09:29,160 Speaker 1: hard is that everything? We start with the choice of 140 00:09:29,880 --> 00:09:34,080 Speaker 1: the Prime minister, because mccon would not be able to 141 00:09:34,200 --> 00:09:36,640 Speaker 1: run for election and he will not be able to 142 00:09:36,760 --> 00:09:40,280 Speaker 1: do anything. Els that one or two speeches on TV 143 00:09:41,040 --> 00:09:43,680 Speaker 1: to for the lationship. Would you serve as Prime Minister. 144 00:09:44,040 --> 00:09:47,480 Speaker 1: I'm sure you're on the short list. I'm not because 145 00:09:47,559 --> 00:09:51,079 Speaker 1: what he needs to do first, I'm too old. And 146 00:09:51,200 --> 00:09:53,440 Speaker 1: the second aspect is what he needs to do is 147 00:09:53,480 --> 00:09:58,440 Speaker 1: to have somebody who is experienced with the political parties 148 00:09:58,920 --> 00:10:02,320 Speaker 1: and who knows how to run elicious lative election, which 149 00:10:02,360 --> 00:10:06,120 Speaker 1: is very different from a presidential and he has to 150 00:10:06,280 --> 00:10:11,240 Speaker 1: have somebody who really very well versed. He has some options, 151 00:10:11,559 --> 00:10:15,360 Speaker 1: and the probably that he's one of the options to leave, 152 00:10:15,360 --> 00:10:17,079 Speaker 1: We've got to leave it there. Thank you so much, 153 00:10:17,120 --> 00:10:20,679 Speaker 1: Thank you generous, Thank you Bloomberg. Today, I'm Bloomberg Television, 154 00:10:20,720 --> 00:10:24,280 Speaker 1: of Bloomberg Radio. He needs no introduction worldwide. Marias Lee, 155 00:10:24,320 --> 00:10:27,120 Speaker 1: they of course of Boobliss, David Gurr and New York. 156 00:10:27,160 --> 00:10:30,959 Speaker 1: I'm Tom Keene in Paris. Stay with us. This is Bloomberg. 157 00:10:44,040 --> 00:10:46,640 Speaker 1: Continue to cover and analyze the results of the French 158 00:10:46,679 --> 00:10:48,959 Speaker 1: election yesterday. Richard Datis joins us now formerly of the 159 00:10:48,960 --> 00:10:51,679 Speaker 1: Booblist Group, now chairman of Richard Datius and Associates. Here 160 00:10:51,720 --> 00:10:54,000 Speaker 1: in our Bloomberg eleven three oh studios in New York. 161 00:10:54,000 --> 00:10:55,920 Speaker 1: It's great to have you with us, and I wonder 162 00:10:55,880 --> 00:10:58,760 Speaker 1: if we could start with just your sense of the 163 00:10:59,080 --> 00:11:01,800 Speaker 1: lasting effects of this campaign For an outside observer here 164 00:11:01,840 --> 00:11:04,520 Speaker 1: in New York, it lasted a long time. Just judging 165 00:11:04,559 --> 00:11:07,360 Speaker 1: from that that last debate, it was at times acrimonious. 166 00:11:07,480 --> 00:11:08,800 Speaker 1: Where do we go from here? How do how do 167 00:11:08,800 --> 00:11:12,760 Speaker 1: we move past the legacy of this campaign? We we 168 00:11:13,000 --> 00:11:17,959 Speaker 1: definitely understood now that move than I would say to 169 00:11:18,280 --> 00:11:22,800 Speaker 1: million people in France are ready to vote for an 170 00:11:22,840 --> 00:11:27,079 Speaker 1: extreme And this is I think, unfoldedly the first lesson, 171 00:11:27,880 --> 00:11:32,120 Speaker 1: populism is really next door. And despite the election of 172 00:11:33,200 --> 00:11:39,360 Speaker 1: President mccron, we still be very cautious about what these people, 173 00:11:39,480 --> 00:11:45,000 Speaker 1: these voters could represent and could also make as a 174 00:11:45,120 --> 00:11:49,240 Speaker 1: constraint for the new elected president. Two, I would say, 175 00:11:49,280 --> 00:11:52,120 Speaker 1: implement what he has in mind. So this is I think. 176 00:11:52,120 --> 00:11:55,480 Speaker 1: And for the first lesson, the second lesson is that 177 00:11:56,200 --> 00:12:00,760 Speaker 1: France and this is the half full glass I say, 178 00:12:00,800 --> 00:12:03,520 Speaker 1: which we have to think in mind. To keep in mind, 179 00:12:04,080 --> 00:12:08,319 Speaker 1: is that a very young, talented man who came from 180 00:12:08,360 --> 00:12:12,040 Speaker 1: the private sector, not at all from the political system, 181 00:12:12,160 --> 00:12:15,640 Speaker 1: very audacious, was able to make it, which means that 182 00:12:15,760 --> 00:12:18,800 Speaker 1: France is able or so to achieve great things and 183 00:12:18,840 --> 00:12:22,240 Speaker 1: some people are still are now dreaming and hoping that. 184 00:12:22,440 --> 00:12:24,720 Speaker 1: I would say, in addition of the American dream, you 185 00:12:24,720 --> 00:12:27,160 Speaker 1: can have the French dream. So everything is possible also 186 00:12:27,200 --> 00:12:31,360 Speaker 1: in France, which I think it's very positive and and 187 00:12:32,000 --> 00:12:35,800 Speaker 1: I think that the new elected president, thanks to his days, 188 00:12:36,400 --> 00:12:39,120 Speaker 1: very audacious. Thanks to his I would say, he has 189 00:12:39,120 --> 00:12:41,560 Speaker 1: nothing to lose at the end of that day. So 190 00:12:41,720 --> 00:12:43,559 Speaker 1: I hope that he will be able to implement the 191 00:12:43,600 --> 00:12:47,560 Speaker 1: reforms which are really absolutely needed in France for years 192 00:12:47,600 --> 00:12:50,640 Speaker 1: and years and years. Let's tackle those in kind. Listening 193 00:12:50,679 --> 00:12:52,679 Speaker 1: to the speech by the president elect last night, he 194 00:12:52,720 --> 00:12:55,000 Speaker 1: said he hoped that voters would never have to way 195 00:12:55,120 --> 00:12:58,160 Speaker 1: voting for extremist candidates. Again, when you look at Marine 196 00:12:58,200 --> 00:13:00,920 Speaker 1: Lapan and what happens next to her and to her party, 197 00:13:01,120 --> 00:13:04,360 Speaker 1: what do you say She's she's positioning herself as the 198 00:13:04,360 --> 00:13:06,839 Speaker 1: opposition figure here says that her party will be the 199 00:13:06,840 --> 00:13:09,839 Speaker 1: opposition party. What what's your sense of the future of 200 00:13:09,840 --> 00:13:12,640 Speaker 1: the National Front in France. You know, she's a tough cookie, 201 00:13:13,000 --> 00:13:16,560 Speaker 1: and she knew how to reinvent the party, and she 202 00:13:16,640 --> 00:13:20,760 Speaker 1: knew how to attract more voters. And even yesterday she 203 00:13:20,880 --> 00:13:24,960 Speaker 1: opened a window saying that maybe she will even rebrand 204 00:13:25,000 --> 00:13:28,560 Speaker 1: the party. So she sees herself and she has a 205 00:13:28,559 --> 00:13:32,720 Speaker 1: great window of opportunity because the Right Party is quite divided. 206 00:13:33,400 --> 00:13:37,600 Speaker 1: The Socialist Party is also more than divided, so she 207 00:13:37,720 --> 00:13:41,320 Speaker 1: has huge room to become, I would say, the first 208 00:13:41,360 --> 00:13:45,920 Speaker 1: party of opposition. And this is quite scary because, as 209 00:13:45,960 --> 00:13:50,600 Speaker 1: you perfectly said, the presidential debate was really a demonstration 210 00:13:51,080 --> 00:13:54,920 Speaker 1: that she doesn't care about even lying, even putting wrong 211 00:13:55,120 --> 00:13:59,680 Speaker 1: facts on the table, just to destabilize everyone. Unfortunately, people, 212 00:14:00,120 --> 00:14:05,520 Speaker 1: friends who are job less, hopeless. It's it's an easy, easy, easy, 213 00:14:05,640 --> 00:14:10,480 Speaker 1: I would say, community to say, duced with his fake's arguments. Richard, 214 00:14:10,520 --> 00:14:14,280 Speaker 1: good morning from your Paris. Wonderful to have your respective 215 00:14:14,920 --> 00:14:17,680 Speaker 1: uh today. This has been one of my themes here. 216 00:14:18,400 --> 00:14:21,680 Speaker 1: Is there a tinge of Anglo American and Mr McCraw 217 00:14:21,880 --> 00:14:24,640 Speaker 1: or is he going to be a uniquely French president? 218 00:14:25,080 --> 00:14:27,200 Speaker 1: Oh no, I think he will be a global leader. 219 00:14:27,440 --> 00:14:31,280 Speaker 1: I think he is definitely and I hope that the 220 00:14:31,720 --> 00:14:34,640 Speaker 1: very In two weeks, as you know, the G seven 221 00:14:35,040 --> 00:14:38,640 Speaker 1: meetings happened in Sicilia, and this will be for him 222 00:14:38,720 --> 00:14:42,720 Speaker 1: the best opportunity to show to his pairs from the US, 223 00:14:43,480 --> 00:14:46,760 Speaker 1: including the U S President, including the Prime Minister of 224 00:14:46,840 --> 00:14:51,040 Speaker 1: Canada and many others who sent him nice congratulations message 225 00:14:51,280 --> 00:14:55,760 Speaker 1: yesterday that they have to count with him. And and 226 00:14:55,880 --> 00:14:59,200 Speaker 1: he's a global citizen, so you know, during his campaign 227 00:14:59,240 --> 00:15:02,640 Speaker 1: he did very well in the US, he did very 228 00:15:02,680 --> 00:15:05,760 Speaker 1: well in the UK with the French jas Bora. So 229 00:15:05,840 --> 00:15:10,320 Speaker 1: I think he has a definitely a vision to be 230 00:15:10,480 --> 00:15:12,600 Speaker 1: part of the globe. Richards will come back in just 231 00:15:12,640 --> 00:15:15,600 Speaker 1: a moment, David Gura, it's a guess that we would 232 00:15:15,680 --> 00:15:19,160 Speaker 1: always speak to in Paris. But you're joining his intendance 233 00:15:19,240 --> 00:15:21,680 Speaker 1: in our studios in New York City's John Tucker. And 234 00:15:21,720 --> 00:15:23,520 Speaker 1: I joined his company very much here in our Bloomberg 235 00:15:23,520 --> 00:15:25,720 Speaker 1: eleventh three oh studis Richard Attius with us here chairman 236 00:15:25,720 --> 00:15:29,040 Speaker 1: of Richard Addis and Associates. And I was looking back 237 00:15:29,240 --> 00:15:31,960 Speaker 1: reading rereading a profile by Alyssa Reubin of The New 238 00:15:32,040 --> 00:15:34,120 Speaker 1: York Times of the now president elect, and she wrote, 239 00:15:34,400 --> 00:15:38,080 Speaker 1: he's gambling that his postpartisan philosophy matches the national mood. 240 00:15:38,640 --> 00:15:40,880 Speaker 1: What was it about politics in France at this point 241 00:15:40,880 --> 00:15:44,600 Speaker 1: that encouraged voters to look outside the traditional party system? 242 00:15:44,600 --> 00:15:47,760 Speaker 1: Where does the Republican Party, the Socialist Party go from here? 243 00:15:47,760 --> 00:15:50,200 Speaker 1: In light of the fact that this upstart party has 244 00:15:50,240 --> 00:15:55,640 Speaker 1: seen its candidate become the next president. In fact, uh 245 00:15:56,000 --> 00:16:00,400 Speaker 1: VCS was really predictable for more than one year. I 246 00:16:00,400 --> 00:16:05,000 Speaker 1: would say all the French citizens were explaining that they 247 00:16:05,000 --> 00:16:09,760 Speaker 1: were not anymore attracted by the traditional political parties. So 248 00:16:09,880 --> 00:16:14,200 Speaker 1: definitely they have to reinvent themselves, no questions. And the 249 00:16:14,280 --> 00:16:18,360 Speaker 1: reason why Emmanuel Macron was elected is that definitely he 250 00:16:18,440 --> 00:16:21,480 Speaker 1: symbolized not just the fact that he's a young potential leader, 251 00:16:21,520 --> 00:16:24,400 Speaker 1: but he's really a centrist. So he's a guy who 252 00:16:24,440 --> 00:16:28,160 Speaker 1: was able to be a catalyst between I would say, 253 00:16:28,200 --> 00:16:31,640 Speaker 1: some leaders from the right party and some leaders from 254 00:16:31,680 --> 00:16:34,640 Speaker 1: the left party. And this is happening so today, and 255 00:16:35,000 --> 00:16:37,920 Speaker 1: you know, many people say it France is an unmanageable 256 00:16:37,960 --> 00:16:40,560 Speaker 1: country for years, but why it was? It is an 257 00:16:40,600 --> 00:16:45,600 Speaker 1: unmanageable country because the French people, frankly speaking, they want 258 00:16:45,640 --> 00:16:48,080 Speaker 1: to do not to be seen as left or right. 259 00:16:48,520 --> 00:16:51,320 Speaker 1: They are much more open and they want to be 260 00:16:51,360 --> 00:16:54,400 Speaker 1: seen more as a centrists. And this is what is happening. 261 00:16:54,640 --> 00:16:58,400 Speaker 1: So if in six weeks from now, Emmanuel mccron is 262 00:16:58,440 --> 00:17:03,480 Speaker 1: able to win the parliament elections, this will be a 263 00:17:03,520 --> 00:17:07,960 Speaker 1: tremendous change in the whole political field in France because 264 00:17:08,000 --> 00:17:11,199 Speaker 1: a party which was created just a year ago able 265 00:17:11,240 --> 00:17:16,080 Speaker 1: to get the majority. This will really show that the 266 00:17:16,080 --> 00:17:18,880 Speaker 1: whole landscape, the political landscape, has changed, and I think 267 00:17:18,920 --> 00:17:22,720 Speaker 1: this will happen, and this could happen because this is 268 00:17:22,720 --> 00:17:26,920 Speaker 1: the only way to really fight and resist against the extremism, 269 00:17:27,160 --> 00:17:30,200 Speaker 1: because the Front National is just not a populist party, 270 00:17:30,320 --> 00:17:33,280 Speaker 1: is an extremist party, and this has to be understood. 271 00:17:33,320 --> 00:17:37,520 Speaker 1: You know, when when you watch the presidential debate a 272 00:17:37,520 --> 00:17:41,560 Speaker 1: few days ago, you really realized that Marine le pen 273 00:17:42,280 --> 00:17:46,760 Speaker 1: is not Maybe she customized herself with some cosmetic to 274 00:17:46,880 --> 00:17:49,240 Speaker 1: be a little bit different from her the perception we 275 00:17:49,320 --> 00:17:52,040 Speaker 1: had from her father, but in fact I think she's 276 00:17:52,119 --> 00:17:56,880 Speaker 1: absolutely identical. She was a pathological liar during this election. 277 00:17:56,960 --> 00:18:00,280 Speaker 1: I can't tell you really by saying some facts which 278 00:18:00,280 --> 00:18:03,720 Speaker 1: are absolutely wrong. It was not about fake news. It 279 00:18:03,800 --> 00:18:07,800 Speaker 1: was about fake informations which were really really dangerous for 280 00:18:07,880 --> 00:18:10,399 Speaker 1: people who are just watching. And you have no clue 281 00:18:10,640 --> 00:18:13,600 Speaker 1: about what is really the reality of the economy, the 282 00:18:13,680 --> 00:18:18,040 Speaker 1: reality of many other aspects of the French economy and 283 00:18:18,080 --> 00:18:21,879 Speaker 1: the French I would say position in foreign policy, Richard, 284 00:18:21,880 --> 00:18:24,240 Speaker 1: how how do you how do you keep political engagement 285 00:18:24,520 --> 00:18:26,679 Speaker 1: high in France. In other words, you have enthusiasm for 286 00:18:26,720 --> 00:18:30,159 Speaker 1: a young candidate now president elect. You look though at 287 00:18:30,160 --> 00:18:32,399 Speaker 1: a court of the French electric staining from voting in 288 00:18:32,400 --> 00:18:35,440 Speaker 1: this election, pushing ahead of the parliamentary election. That Mr 289 00:18:35,480 --> 00:18:37,639 Speaker 1: McConn is going to need people to stay engaged with 290 00:18:37,640 --> 00:18:40,760 Speaker 1: what he's doing. It's it's a very important question, you know. 291 00:18:40,840 --> 00:18:44,520 Speaker 1: He I think today Emmanuel mccon should do whatever is 292 00:18:44,520 --> 00:18:49,520 Speaker 1: possible to become a brand. When Prime Minister Trudeau Trudeau 293 00:18:49,720 --> 00:18:53,480 Speaker 1: was elected in Canada, I remember that many people were 294 00:18:53,520 --> 00:18:57,119 Speaker 1: asking is Canada could become again a brand thanks to 295 00:18:57,359 --> 00:19:00,679 Speaker 1: Trudeau who would like to play a big role. Definitely. 296 00:19:00,920 --> 00:19:03,760 Speaker 1: This is the same opportunity which is offered to Emmanuel 297 00:19:03,840 --> 00:19:07,480 Speaker 1: mcron So he has to become a brand, and he 298 00:19:07,600 --> 00:19:11,919 Speaker 1: has to support and to make friends. Becoming back I 299 00:19:11,920 --> 00:19:14,480 Speaker 1: would say on the on the global road Map, and 300 00:19:14,600 --> 00:19:18,040 Speaker 1: this will I think encourage many people to come back 301 00:19:18,080 --> 00:19:22,440 Speaker 1: in in supporting politics and be interested by politics because 302 00:19:23,320 --> 00:19:27,920 Speaker 1: he will be a new voice, a new language, and 303 00:19:28,040 --> 00:19:31,320 Speaker 1: I think he will not just reinvent the political field, 304 00:19:31,520 --> 00:19:36,200 Speaker 1: but he has also to reinvent the dialogue between the society, 305 00:19:36,600 --> 00:19:40,600 Speaker 1: the use and the political leaders. For me, he is 306 00:19:40,680 --> 00:19:46,719 Speaker 1: probably a potential public private partnership you know symbol. And 307 00:19:46,960 --> 00:19:49,560 Speaker 1: because he knows very well the private sector, he is 308 00:19:50,240 --> 00:19:54,000 Speaker 1: probably the first elected president and the first president who 309 00:19:54,119 --> 00:19:57,800 Speaker 1: is really coming from a great experience in the private sector. 310 00:19:58,280 --> 00:20:02,199 Speaker 1: So we need to reconsiderate the civil society and the 311 00:20:02,240 --> 00:20:06,600 Speaker 1: political society, the prime minister position and friends, Richard explain 312 00:20:06,640 --> 00:20:09,960 Speaker 1: to our global audience what the prime minister does in 313 00:20:10,119 --> 00:20:13,800 Speaker 1: France and will it be someone like Mr McCraw or 314 00:20:13,840 --> 00:20:18,320 Speaker 1: do is he bringing someone from his diverse outside. This is, 315 00:20:18,400 --> 00:20:21,160 Speaker 1: as you know, since you're in Paris, the most important 316 00:20:21,240 --> 00:20:23,679 Speaker 1: question that everyone is asking today is who will be 317 00:20:23,760 --> 00:20:26,040 Speaker 1: the next prime minister. Prime Minister in France is a 318 00:20:26,160 --> 00:20:28,720 Speaker 1: very important job. He's a guy who is running the government. 319 00:20:29,080 --> 00:20:31,719 Speaker 1: He's a guy who is implementing i would say, the 320 00:20:31,840 --> 00:20:35,880 Speaker 1: strategy and the policies, and he has more less full 321 00:20:35,920 --> 00:20:37,920 Speaker 1: power to run the country at the end of the day, 322 00:20:37,960 --> 00:20:43,360 Speaker 1: because he's not just a ghost of the president. And 323 00:20:43,359 --> 00:20:46,360 Speaker 1: and this is why everyone is waiting to know who 324 00:20:46,400 --> 00:20:48,639 Speaker 1: will be the next prime minister, which would be probably 325 00:20:48,760 --> 00:20:51,440 Speaker 1: announced in one week from now, but also who will 326 00:20:51,480 --> 00:20:54,560 Speaker 1: be the winning party in the parliament election in six 327 00:20:54,600 --> 00:20:58,359 Speaker 1: weeks from now, because by definition the winner, the party 328 00:20:58,400 --> 00:21:01,359 Speaker 1: who will win, will have to run the government. Having 329 00:21:01,440 --> 00:21:04,639 Speaker 1: said that, and I would say that the French people 330 00:21:04,680 --> 00:21:07,960 Speaker 1: are expecting two things. Number one, to have the next 331 00:21:07,960 --> 00:21:11,320 Speaker 1: prime minister to be someone with a solid experience, to 332 00:21:11,480 --> 00:21:14,040 Speaker 1: bring a great expense on the table, next to a 333 00:21:14,119 --> 00:21:18,359 Speaker 1: young leader who Emmanuel Marquin is not so experienced to 334 00:21:18,440 --> 00:21:21,240 Speaker 1: be honest in politics because he started three years ago, 335 00:21:21,320 --> 00:21:25,600 Speaker 1: which is yesterday. And too they need someone very solid 336 00:21:25,680 --> 00:21:29,080 Speaker 1: who will be able to resist in these difficult times 337 00:21:29,080 --> 00:21:34,000 Speaker 1: of terrorism, of really dealing with Isis. And this is 338 00:21:34,000 --> 00:21:38,359 Speaker 1: what people are expecting, I know, as the ugly American Richard, 339 00:21:38,400 --> 00:21:41,720 Speaker 1: which you've called me three times before. In Paris, the 340 00:21:41,760 --> 00:21:43,879 Speaker 1: world ends at the Arc de tree Off, I believe, 341 00:21:43,920 --> 00:21:47,280 Speaker 1: to the south, there's a whole another France. How is 342 00:21:47,400 --> 00:21:50,520 Speaker 1: Mr McCray to be taken in the cities like Leon 343 00:21:51,320 --> 00:21:54,359 Speaker 1: or Niece or too long? Tell me about Leon and 344 00:21:54,560 --> 00:21:58,480 Speaker 1: what this election means for the second city of this nation, 345 00:21:59,520 --> 00:22:03,240 Speaker 1: you know, I think when you look at different cities, 346 00:22:03,960 --> 00:22:07,800 Speaker 1: Emmanuel mccron was elected with a very high ranking, except 347 00:22:07,840 --> 00:22:11,000 Speaker 1: in the southeast of France, you know, and excepting Corsica, 348 00:22:11,880 --> 00:22:18,000 Speaker 1: where even he was more less fifty two for for 349 00:22:19,000 --> 00:22:24,800 Speaker 1: UM Marine Leepen. Why France is very divided, as you 350 00:22:24,920 --> 00:22:28,720 Speaker 1: also saw during the first round, the north was really 351 00:22:28,800 --> 00:22:32,000 Speaker 1: voting more for Marine Deepen, where the south and the 352 00:22:32,040 --> 00:22:37,080 Speaker 1: west was more voting for UM Emmanuel mccron. Why that, 353 00:22:37,680 --> 00:22:40,960 Speaker 1: because it's depends on the demography of of the of 354 00:22:41,040 --> 00:22:44,320 Speaker 1: the country. In the north you have many people who 355 00:22:44,359 --> 00:22:49,000 Speaker 1: are very low income, many job less. They lost jobs 356 00:22:49,000 --> 00:22:51,960 Speaker 1: because they were working in mining industries, in all these 357 00:22:52,000 --> 00:22:56,000 Speaker 1: industries which are disappearing, and because they are hopeless, they 358 00:22:56,080 --> 00:22:59,760 Speaker 1: think that voting for Marine Deepen they have nothing to lose. 359 00:22:59,760 --> 00:23:01,600 Speaker 1: On ab she will be the one who would bring 360 00:23:01,600 --> 00:23:05,879 Speaker 1: a solution. So I have to say that in big 361 00:23:05,920 --> 00:23:10,800 Speaker 1: cities like Lyon, like Bordeaux, like to lose, people will 362 00:23:10,840 --> 00:23:13,800 Speaker 1: support Emanuel Macron. The problem is not about the big cities. 363 00:23:13,960 --> 00:23:17,679 Speaker 1: The problem is about even some small cities where you 364 00:23:17,800 --> 00:23:22,960 Speaker 1: have unemployment rate which is exceeding and this is where 365 00:23:23,160 --> 00:23:27,240 Speaker 1: definitely you find a lot of silos of potential I 366 00:23:27,240 --> 00:23:31,000 Speaker 1: would say populism and people ready to vote for extremism 367 00:23:31,080 --> 00:23:33,159 Speaker 1: because they have nothing to do to do. And the 368 00:23:33,200 --> 00:23:36,439 Speaker 1: second point is about immigration. In France, you have a 369 00:23:36,440 --> 00:23:39,080 Speaker 1: lot of immigration so it depends on where you will 370 00:23:39,119 --> 00:23:42,720 Speaker 1: find this immigration. In the south east of France you 371 00:23:42,960 --> 00:23:45,600 Speaker 1: find a lot of immigration issues and this is why 372 00:23:45,600 --> 00:23:48,480 Speaker 1: people are voting for Mari Independent. Richard Greater speak with you. 373 00:23:48,480 --> 00:23:51,160 Speaker 1: Thank you very much, Especiality Chairman of Virginalities and Associates, 374 00:23:51,240 --> 00:23:59,840 Speaker 1: Joining me here in New York. Brought you by Bank 375 00:24:00,000 --> 00:24:04,000 Speaker 1: of America. Mary Lynch. Dedicated to bringing our clients insights 376 00:24:04,000 --> 00:24:07,639 Speaker 1: and solutions to meet the challenges of a transforming world. 377 00:24:08,080 --> 00:24:11,800 Speaker 1: That's the power of global connections. Mary Lynch, Pierce Feeder 378 00:24:11,920 --> 00:24:21,359 Speaker 1: and Smith Incorporated Member s I p C. There's something 379 00:24:21,400 --> 00:24:24,800 Speaker 1: new from Bloomberg. It's called Lens. 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And as they 393 00:25:16,800 --> 00:25:22,359 Speaker 1: consider transactions and they consider the aesthetic of this nation. 394 00:25:23,240 --> 00:25:26,439 Speaker 1: No one at all has any perspective on this in 395 00:25:26,440 --> 00:25:30,040 Speaker 1: the linkolage to government like Renault du Trey, his chairman 396 00:25:30,440 --> 00:25:34,320 Speaker 1: lvmh and so much to do with design the aesthetic 397 00:25:34,359 --> 00:25:37,000 Speaker 1: of this nation of course with his public service as 398 00:25:37,040 --> 00:25:39,679 Speaker 1: well a member of parliament for a long time. I 399 00:25:39,720 --> 00:25:43,200 Speaker 1: want to talk about your politics, uh sir, first, which 400 00:25:43,280 --> 00:25:47,040 Speaker 1: is what do you imagine the parliament elections will be 401 00:25:47,160 --> 00:25:51,439 Speaker 1: June eleven and j How fractious will that process be? 402 00:25:52,440 --> 00:25:54,960 Speaker 1: I think the French people are going to be a recoient. 403 00:25:55,440 --> 00:25:59,520 Speaker 1: They're going to follow up, you know, yesterday's vote and 404 00:25:59,640 --> 00:26:04,480 Speaker 1: gives a new president majority at you'll get a majority. 405 00:26:04,960 --> 00:26:07,720 Speaker 1: That's what has been happening four years and years of 406 00:26:08,040 --> 00:26:11,680 Speaker 1: the Fiefs Republic, and it totally makes sense. You don't 407 00:26:11,720 --> 00:26:15,639 Speaker 1: want to have a new president if two weeks or 408 00:26:15,680 --> 00:26:19,280 Speaker 1: three weeks later you deprive him have any power. And 409 00:26:19,359 --> 00:26:22,720 Speaker 1: that's exactly what would happen if the president was not 410 00:26:23,000 --> 00:26:28,480 Speaker 1: in the capacity of forming a new cabinet within the 411 00:26:28,520 --> 00:26:31,320 Speaker 1: technology of this nation, and by that I mean a 412 00:26:31,359 --> 00:26:35,360 Speaker 1: broad sense of technology, including the world class French design 413 00:26:35,400 --> 00:26:39,119 Speaker 1: technology which you've helped to invent so many of that 414 00:26:39,320 --> 00:26:42,760 Speaker 1: included ERICTIONE was with us that it's simply about the 415 00:26:42,880 --> 00:26:47,520 Speaker 1: labor relationship and the productivity and a better economic growth 416 00:26:47,880 --> 00:26:51,800 Speaker 1: will come from a better labor agreement. Are you optimistic 417 00:26:52,240 --> 00:26:55,680 Speaker 1: that you can see a revolution and capitalism and labor 418 00:26:55,720 --> 00:26:58,560 Speaker 1: relations in the nation. I think the next cabinet is 419 00:26:58,600 --> 00:27:04,400 Speaker 1: going to be at war, war against terrorism, war against unemployment. 420 00:27:04,520 --> 00:27:07,359 Speaker 1: Those are the two main issues. We have two copuies 421 00:27:07,520 --> 00:27:10,200 Speaker 1: and of course if we want, you know, the companies 422 00:27:10,560 --> 00:27:14,760 Speaker 1: to create more jobs, we have to add some flexibility 423 00:27:14,920 --> 00:27:18,679 Speaker 1: in our labor organization. That's not easy because a lot 424 00:27:18,720 --> 00:27:23,480 Speaker 1: of employees consider that if the bus, you know, has 425 00:27:23,560 --> 00:27:30,040 Speaker 1: more ability to get free of employees, it's bringing less 426 00:27:30,080 --> 00:27:33,320 Speaker 1: security to them. But that's the way it works. You know. 427 00:27:33,400 --> 00:27:36,399 Speaker 1: We have to introduce more flexibility and that's something that 428 00:27:36,440 --> 00:27:38,720 Speaker 1: a lot of people are understanding. So we have to 429 00:27:38,800 --> 00:27:42,280 Speaker 1: go fast to what is going to be an efficient 430 00:27:42,600 --> 00:27:45,080 Speaker 1: labor system. If you're just joining us works from No 431 00:27:45,240 --> 00:27:48,400 Speaker 1: Detroit with us of LVMH David please jump in from 432 00:27:48,400 --> 00:27:50,800 Speaker 1: New York City. Yeah, let me just get your perspective 433 00:27:50,800 --> 00:27:53,159 Speaker 1: on why this candidate in particular was so attractive to 434 00:27:53,200 --> 00:27:56,040 Speaker 1: people in the business community in France. He was young, 435 00:27:56,080 --> 00:28:00,720 Speaker 1: he's untested. What what made him attractive to you and others? First, 436 00:28:00,880 --> 00:28:04,439 Speaker 1: is a very pragmatic person. You know, it's not ideological, 437 00:28:04,640 --> 00:28:10,679 Speaker 1: it's not sinking according to abstract patterns. He's just trying 438 00:28:10,720 --> 00:28:14,560 Speaker 1: to make sure that what's going to be done is working. 439 00:28:15,040 --> 00:28:18,240 Speaker 1: We need that. The two main parties of Socialist Party 440 00:28:18,240 --> 00:28:21,720 Speaker 1: and the Republican parties are dead. You know, they have 441 00:28:21,840 --> 00:28:24,760 Speaker 1: not been able to fix the issues. They have been 442 00:28:24,800 --> 00:28:28,680 Speaker 1: governing for years and years and people are really upset 443 00:28:28,840 --> 00:28:32,000 Speaker 1: with what they've been doing. So people want something new 444 00:28:32,640 --> 00:28:37,520 Speaker 1: and mc coin is embodying a fresh and innovative approach 445 00:28:37,600 --> 00:28:41,120 Speaker 1: of politics, much more pragmatic, being able, you know, to 446 00:28:41,240 --> 00:28:44,880 Speaker 1: gather all the people who are in favor of progress 447 00:28:44,880 --> 00:28:49,080 Speaker 1: of modernisation, and that's the hope is raising today And 448 00:28:49,200 --> 00:28:52,160 Speaker 1: what what would you like him to do? There's the hope, 449 00:28:52,480 --> 00:28:54,720 Speaker 1: there's the good will, there's the sense of change. But 450 00:28:54,800 --> 00:28:59,040 Speaker 1: what concretely can he do for business in France. Um, 451 00:28:59,240 --> 00:29:02,320 Speaker 1: First to love our taxes, you know, because we have 452 00:29:02,600 --> 00:29:05,920 Speaker 1: a complex tax system. For instance, it's going to bring 453 00:29:05,960 --> 00:29:11,720 Speaker 1: back the profit tax to which is much better than 454 00:29:11,840 --> 00:29:17,160 Speaker 1: thirty three percent. He's going to suppress, um the main 455 00:29:17,320 --> 00:29:20,680 Speaker 1: part of our I s F, which is the tax 456 00:29:20,880 --> 00:29:25,680 Speaker 1: our wealth, so that's also highly expected. He's going to 457 00:29:26,160 --> 00:29:30,600 Speaker 1: introduce a flat tax for all the income coming from capital. 458 00:29:31,400 --> 00:29:34,760 Speaker 1: He's going to simplify and he's going to lower the 459 00:29:34,800 --> 00:29:37,640 Speaker 1: tax burden, and that's of course is highly expected from 460 00:29:37,680 --> 00:29:42,600 Speaker 1: the corporations. Second, is going to find the right balance 461 00:29:42,680 --> 00:29:49,880 Speaker 1: between social fairness and economic efficiency. So he wants to 462 00:29:49,960 --> 00:29:54,280 Speaker 1: invest in technologies, he wants to invest in research and development. 463 00:29:54,600 --> 00:29:57,440 Speaker 1: He doesn't think that the free market is able to 464 00:29:57,480 --> 00:30:01,360 Speaker 1: achieve everything. He believes in role for you know, the 465 00:30:01,520 --> 00:30:06,400 Speaker 1: state and especially encouraging research. That's why he launched his 466 00:30:07,040 --> 00:30:11,080 Speaker 1: call to American searcher you know, to come in France 467 00:30:11,160 --> 00:30:15,160 Speaker 1: and and set it down here. So he's a very 468 00:30:15,240 --> 00:30:19,960 Speaker 1: modern guy, upen to plobalization, but feeling that there are 469 00:30:20,000 --> 00:30:23,959 Speaker 1: some losers in the glorization process and that something has 470 00:30:24,000 --> 00:30:26,520 Speaker 1: to be done for them. No discussion. Mr Detroit could 471 00:30:26,520 --> 00:30:29,240 Speaker 1: be possible without talking to you about the French ascetic 472 00:30:29,240 --> 00:30:32,240 Speaker 1: where it's whether it's Air France commercials or what you've 473 00:30:32,240 --> 00:30:36,880 Speaker 1: done at LVMH explained to our world audience what it 474 00:30:36,920 --> 00:30:40,880 Speaker 1: means to have the American icon. Five guys, Hamburgers on 475 00:30:40,920 --> 00:30:45,280 Speaker 1: the chances are you? Are you still threatening? That's not true. 476 00:30:45,280 --> 00:30:48,320 Speaker 1: It's France, it is true. Five guys on chancey, Liz, 477 00:30:48,480 --> 00:30:50,520 Speaker 1: You've got I mean the Disney stores. They're fine, They've 478 00:30:50,560 --> 00:30:54,920 Speaker 1: got Disneyland here. Is there still a worry of American 479 00:30:55,000 --> 00:30:58,880 Speaker 1: commerce and design invading your friends? We we I've been 480 00:30:58,960 --> 00:31:02,040 Speaker 1: leaving a t in New York City and personal school, 481 00:31:02,040 --> 00:31:05,040 Speaker 1: and you're just walking through Madison Avenue where you can 482 00:31:05,080 --> 00:31:07,840 Speaker 1: see a lot of Italian and French brands, and all 483 00:31:07,840 --> 00:31:11,200 Speaker 1: those shops are expressing our lifestyle and all the view. 484 00:31:11,720 --> 00:31:14,080 Speaker 1: I'm not shocked by the fact that you can have 485 00:31:14,120 --> 00:31:17,640 Speaker 1: an American brand in the chance it is. The question 486 00:31:17,920 --> 00:31:21,560 Speaker 1: is is the food good? You know, that's a real question. 487 00:31:22,000 --> 00:31:26,480 Speaker 1: If people like the Hamburgers, they will buy American Hamburgers. 488 00:31:26,600 --> 00:31:30,040 Speaker 1: If it's bullshit, they will get to another brand. So 489 00:31:30,080 --> 00:31:33,480 Speaker 1: the question is to bring some quality food. What people 490 00:31:33,480 --> 00:31:36,440 Speaker 1: are very reluctant about is to have this kind of 491 00:31:36,560 --> 00:31:41,760 Speaker 1: industrial food, and sometimes it's assimilated, you know, to global 492 00:31:41,840 --> 00:31:45,040 Speaker 1: companies which are not so careful about the provenance, you know, 493 00:31:45,120 --> 00:31:49,120 Speaker 1: the origin of the vegetables, of the meat, of everything 494 00:31:49,160 --> 00:31:53,200 Speaker 1: which makes a good French meal. And so I'm we 495 00:31:53,240 --> 00:31:56,000 Speaker 1: are in a global world. But in the same time, 496 00:31:57,120 --> 00:32:00,280 Speaker 1: people in France they want to defend to protect they 497 00:32:00,360 --> 00:32:03,960 Speaker 1: are the and they believe that this lifestyle and NDMH 498 00:32:04,080 --> 00:32:06,520 Speaker 1: of course is a good example of that is able 499 00:32:06,560 --> 00:32:10,200 Speaker 1: to be appealing to a large number of consumers all 500 00:32:10,200 --> 00:32:12,040 Speaker 1: over the world. We see a transaction. I don't know 501 00:32:12,040 --> 00:32:14,120 Speaker 1: if you're aware of this, but the transaction of Coach 502 00:32:14,320 --> 00:32:18,680 Speaker 1: buying Kate Spain today within the United States give us 503 00:32:18,720 --> 00:32:21,520 Speaker 1: a sense of the spirit of luxury right now. I 504 00:32:21,600 --> 00:32:24,160 Speaker 1: was in the Gucci store next to Mr Trump's aboat 505 00:32:24,320 --> 00:32:26,640 Speaker 1: the other day and it was knee deep in people. 506 00:32:26,800 --> 00:32:29,360 Speaker 1: It was the buzz they're going with this brand or 507 00:32:29,400 --> 00:32:31,800 Speaker 1: the other brand. I know Selin doing well and Louis 508 00:32:31,880 --> 00:32:35,400 Speaker 1: Vuton the same way with your retail. But this, but 509 00:32:35,480 --> 00:32:39,280 Speaker 1: this is important, David, and that is the aspiration of 510 00:32:39,440 --> 00:32:42,680 Speaker 1: Mr McCraw and the new capitalism that is out there, 511 00:32:43,120 --> 00:32:47,080 Speaker 1: you know, the essence of lifestyle products. It's a mixed 512 00:32:47,080 --> 00:32:52,760 Speaker 1: between heritage and innovation, disception and heritage. When some companies 513 00:32:52,760 --> 00:32:55,440 Speaker 1: are able to mix those two dimensions, which are appealing 514 00:32:55,440 --> 00:32:57,840 Speaker 1: to two parts about our brain. We want to be 515 00:32:58,120 --> 00:33:00,480 Speaker 1: comforted by what comes from the back us, but in 516 00:33:00,520 --> 00:33:02,600 Speaker 1: the same time, we want to be excited by what 517 00:33:02,880 --> 00:33:07,200 Speaker 1: is looking forward, which is presenting a new visage phase 518 00:33:07,400 --> 00:33:10,280 Speaker 1: of the future. So that's exactly what those companies are 519 00:33:10,280 --> 00:33:13,320 Speaker 1: able to do. Like you know, when Vito is asking 520 00:33:13,400 --> 00:33:16,160 Speaker 1: to mark shack ups to come in and you know, 521 00:33:16,880 --> 00:33:21,840 Speaker 1: get the dusts maybe out. Yeah, So it's it's always 522 00:33:21,840 --> 00:33:25,480 Speaker 1: a question of high quality products first and then a 523 00:33:25,600 --> 00:33:29,200 Speaker 1: cultural content. What consumers too, they are looking for is 524 00:33:29,280 --> 00:33:34,800 Speaker 1: mainly culture. It's functionality, price and the celebrity matter like 525 00:33:35,080 --> 00:33:38,240 Speaker 1: used to sometimes it can help, but it's not the 526 00:33:38,440 --> 00:33:40,880 Speaker 1: sense of those brands. The sense of those brands is 527 00:33:40,920 --> 00:33:45,880 Speaker 1: his artisanal craftsmanship, know how, coming from you know, the 528 00:33:46,000 --> 00:33:49,080 Speaker 1: ages which has been protected. It's part of our common 529 00:33:49,120 --> 00:33:52,320 Speaker 1: patrim one. You know, it's part of what mankind has 530 00:33:52,360 --> 00:33:57,320 Speaker 1: been able to preserve over the last decades. And I 531 00:33:57,360 --> 00:33:59,320 Speaker 1: think that a lot of consumers, whether it is in 532 00:33:59,360 --> 00:34:02,959 Speaker 1: North American out in Asia are fond of this French 533 00:34:03,120 --> 00:34:07,760 Speaker 1: and Italian lifestyle because it's it's meaning happiness, you know, 534 00:34:08,080 --> 00:34:11,719 Speaker 1: a well balanced life, and I think that's the key 535 00:34:11,719 --> 00:34:15,200 Speaker 1: of this success. Thank you so much. Tray with lvmh 536 00:34:15,360 --> 00:34:31,080 Speaker 1: from Paris. This is Bloomberg. David Guray in New York. 537 00:34:31,080 --> 00:34:33,360 Speaker 1: Tom Keene is in Paris. This is Bloomberg Surveillance on 538 00:34:33,400 --> 00:34:35,680 Speaker 1: Bloomberg Radio Pleasure. Now to be joined by Richier Sharma, 539 00:34:36,000 --> 00:34:37,960 Speaker 1: author of the book The Rise and Fall of Nations, 540 00:34:38,000 --> 00:34:40,440 Speaker 1: Forces of Change in a Post Crisis World, which will 541 00:34:40,480 --> 00:34:43,239 Speaker 1: be available in paperback next month, I believe, contributor to 542 00:34:43,239 --> 00:34:45,439 Speaker 1: the New York Times editorial page as well in chief 543 00:34:45,480 --> 00:34:47,840 Speaker 1: Global strategist at Morgan Stanley. Great to have you with 544 00:34:47,920 --> 00:34:51,479 Speaker 1: us in our Bloomberg eleven Trio studios. Let me start 545 00:34:51,480 --> 00:34:54,319 Speaker 1: with a with a broad question here this was seen 546 00:34:54,360 --> 00:34:57,560 Speaker 1: as a referendum on populism. Are our reports of its 547 00:34:57,560 --> 00:34:59,640 Speaker 1: death prematurity? You think that this was the death knell? 548 00:34:59,719 --> 00:35:02,400 Speaker 1: Or you're still concerned about the degree to which it 549 00:35:02,480 --> 00:35:04,640 Speaker 1: is a current around the world. No, I think like 550 00:35:04,680 --> 00:35:06,920 Speaker 1: I'm still concerned about that, but I feel that, you know, 551 00:35:07,000 --> 00:35:09,840 Speaker 1: like it's very interesting, which is that of all places 552 00:35:09,960 --> 00:35:12,279 Speaker 1: where populism seems to have sort of taken a break, 553 00:35:12,280 --> 00:35:15,960 Speaker 1: it's in Europe, because there was so much pessimism about, um, 554 00:35:16,000 --> 00:35:19,840 Speaker 1: what what happened in Europe regarding populism, and in fact, 555 00:35:20,200 --> 00:35:22,160 Speaker 1: like I think it's quite remarkable that this sort of 556 00:35:22,200 --> 00:35:25,160 Speaker 1: adds to the narrative that the European continent is not 557 00:35:25,239 --> 00:35:28,440 Speaker 1: a continent which is permanently doomed for crisis, but as 558 00:35:28,480 --> 00:35:31,239 Speaker 1: a continent where, in fact a recovery is underway, and 559 00:35:31,320 --> 00:35:33,880 Speaker 1: this political narrative is likely to change for the better. 560 00:35:34,320 --> 00:35:36,960 Speaker 1: And this is something which is likely to keeping improving 561 00:35:37,000 --> 00:35:39,480 Speaker 1: sentiment in Europe. I mean, for the first time, the 562 00:35:39,520 --> 00:35:42,799 Speaker 1: European economy now since the crisis, is growing at a 563 00:35:42,840 --> 00:35:45,680 Speaker 1: pace which is even faster than the United States. And 564 00:35:45,719 --> 00:35:48,120 Speaker 1: I think that, like for me, that's the big story. 565 00:35:48,719 --> 00:35:50,560 Speaker 1: You have a person now who who has been imbuted 566 00:35:50,600 --> 00:35:52,000 Speaker 1: with a lot of hope, a lot of people hope 567 00:35:52,040 --> 00:35:55,320 Speaker 1: that he does change the way the economy works in France, 568 00:35:55,400 --> 00:35:58,280 Speaker 1: changes the way that the tax system is structured, etcetera, etcetera. 569 00:35:58,719 --> 00:36:00,560 Speaker 1: How much time do you think the people of France 570 00:36:00,560 --> 00:36:02,319 Speaker 1: and investors are willing to give him to do that? 571 00:36:02,360 --> 00:36:04,400 Speaker 1: If anything, these last few months have been a cautionary 572 00:36:04,440 --> 00:36:07,960 Speaker 1: tale here in the US investor enthusiasm and optimism matched 573 00:36:08,000 --> 00:36:11,800 Speaker 1: by the realities of governance, the realities of Washington, you know, 574 00:36:12,320 --> 00:36:14,239 Speaker 1: Like I was slightly sort of different take here, which 575 00:36:14,239 --> 00:36:16,880 Speaker 1: is the fact that I think that there that expectations 576 00:36:16,920 --> 00:36:19,200 Speaker 1: out of him are rather low, even though he's one 577 00:36:19,200 --> 00:36:21,279 Speaker 1: a very decisive victory in the second round. If you 578 00:36:21,320 --> 00:36:23,680 Speaker 1: read much of the commentary, it is laid in with 579 00:36:23,719 --> 00:36:25,799 Speaker 1: a lot of skepticism, a lot of people sort of 580 00:36:25,840 --> 00:36:28,840 Speaker 1: saying that there's not much that he can do his uh, 581 00:36:28,920 --> 00:36:31,680 Speaker 1: he has to now win the parliamentary elections, and so 582 00:36:31,760 --> 00:36:34,920 Speaker 1: many sort of parallels being drawn with other leaders around 583 00:36:34,960 --> 00:36:38,680 Speaker 1: the world, from Rerenzy in Italy to Sarkozy himself last decade, 584 00:36:38,960 --> 00:36:40,840 Speaker 1: that so many leaders have come up, you know, with 585 00:36:40,920 --> 00:36:43,000 Speaker 1: so much promise, and I've been able to deliver a little. 586 00:36:43,080 --> 00:36:45,520 Speaker 1: So the good news is that there's a lot of 587 00:36:45,520 --> 00:36:48,239 Speaker 1: pessimism about what he can do, so the bar is 588 00:36:48,320 --> 00:36:50,960 Speaker 1: quite low. And yet the mood in France seems to 589 00:36:51,000 --> 00:36:53,319 Speaker 1: be turning. As I've been saying that I think that 590 00:36:53,719 --> 00:36:56,000 Speaker 1: the battle for Europe is over, but the battle for 591 00:36:56,040 --> 00:36:59,160 Speaker 1: France has just begun, which is that in France there's 592 00:36:59,200 --> 00:37:03,000 Speaker 1: a very strong constituency in support of a single currency 593 00:37:03,040 --> 00:37:05,279 Speaker 1: of the Euro, and that's something which I think even 594 00:37:05,520 --> 00:37:08,959 Speaker 1: Lepine realized and shifted her campaign in the last few 595 00:37:08,960 --> 00:37:12,200 Speaker 1: weeks to being more sort of anti immigrant than anti 596 00:37:12,280 --> 00:37:16,120 Speaker 1: Europe per se. But within France there's a deep divide 597 00:37:16,120 --> 00:37:18,720 Speaker 1: about how much and what to do with the welfare state, 598 00:37:18,760 --> 00:37:21,120 Speaker 1: but at least that debate has begun. France has the 599 00:37:21,239 --> 00:37:24,840 Speaker 1: largest welfare state of any country in the world, with 600 00:37:24,920 --> 00:37:27,759 Speaker 1: the possible exception of North Korea. Right so, in terms 601 00:37:27,800 --> 00:37:30,120 Speaker 1: of its government spending at the trade of GDP is 602 00:37:30,160 --> 00:37:33,720 Speaker 1: a staggeringly high fifty seven percent, and on every metric, 603 00:37:33,800 --> 00:37:37,120 Speaker 1: France has been losing out to the other countries, even 604 00:37:37,160 --> 00:37:39,960 Speaker 1: within Europe in per capita income terms. That has trailed 605 00:37:39,960 --> 00:37:43,239 Speaker 1: the growth of other European countries. Its labor costs have 606 00:37:43,320 --> 00:37:46,000 Speaker 1: gone up at a time in other countries from uh 607 00:37:46,200 --> 00:37:48,719 Speaker 1: Spain to Portugal have been cutting back on their labor 608 00:37:48,760 --> 00:37:52,040 Speaker 1: costs to get more competitiveness, and a lot of people 609 00:37:52,040 --> 00:37:54,400 Speaker 1: are leaving France. I think that last year the largest 610 00:37:54,480 --> 00:37:57,520 Speaker 1: number of millionaires that left any country in the world 611 00:37:57,840 --> 00:38:01,240 Speaker 1: was France. UH some twelve th millionaires or something left France. 612 00:38:01,320 --> 00:38:04,360 Speaker 1: So this is a country that is in deep need 613 00:38:04,480 --> 00:38:08,399 Speaker 1: for change. And the fact that you had Philan who 614 00:38:08,440 --> 00:38:11,200 Speaker 1: managed to pull nearly twenty in the first round, and 615 00:38:11,239 --> 00:38:16,120 Speaker 1: he's really a very sort of classic right winger in 616 00:38:16,200 --> 00:38:19,680 Speaker 1: terms of a Thatcherite kind of person, and he would 617 00:38:19,680 --> 00:38:22,719 Speaker 1: have possibly won this election had it not been for 618 00:38:22,760 --> 00:38:26,319 Speaker 1: the scandal which derailed him um in the last couple 619 00:38:26,320 --> 00:38:29,440 Speaker 1: of months, the personal scandal regarding his finances. So I 620 00:38:29,440 --> 00:38:31,360 Speaker 1: think that this is a country which is moving in 621 00:38:31,400 --> 00:38:34,680 Speaker 1: the right direction. It remains divided, but the fact that 622 00:38:35,080 --> 00:38:38,279 Speaker 1: so many French people are sort of now voting for 623 00:38:38,400 --> 00:38:43,600 Speaker 1: agendas that are quite reformist is I think a major 624 00:38:43,680 --> 00:38:48,359 Speaker 1: step forward for a deeply socialistic country. Tom, I want 625 00:38:48,360 --> 00:38:51,320 Speaker 1: to bring you in in Paris. Yeah, we're in Paris. 626 00:38:51,400 --> 00:38:55,000 Speaker 1: We think many of the uber drivers of Paris who 627 00:38:55,000 --> 00:38:58,360 Speaker 1: have been shocked David Gura find us on the radio 628 00:38:58,440 --> 00:39:01,719 Speaker 1: dial here in Paris. Jonas I know is listening from 629 00:39:01,719 --> 00:39:04,520 Speaker 1: had he just sent me in a note as well? 630 00:39:04,760 --> 00:39:08,000 Speaker 1: For sure? Is France an emerging market? Is there just 631 00:39:08,120 --> 00:39:12,920 Speaker 1: so much untapped technology and will that if they excuse me, 632 00:39:12,960 --> 00:39:15,680 Speaker 1: if they do find the will are they the ultimate 633 00:39:15,760 --> 00:39:19,560 Speaker 1: emerging market, But it depends how you define and like 634 00:39:19,640 --> 00:39:21,480 Speaker 1: emerging market. I guess what you're trying to say is 635 00:39:21,480 --> 00:39:23,440 Speaker 1: that there's a lot of growth potential for this country 636 00:39:23,440 --> 00:39:25,759 Speaker 1: if they managed to get things right. Yeah. Sure, I 637 00:39:25,760 --> 00:39:27,440 Speaker 1: think that a couple of things which France has in 638 00:39:27,480 --> 00:39:30,759 Speaker 1: its favor where it shares some characteristics you can argue 639 00:39:30,760 --> 00:39:33,319 Speaker 1: with other emerging market says the fact that it's demographics 640 00:39:33,320 --> 00:39:35,839 Speaker 1: some better than the rest of the continent. That at 641 00:39:35,880 --> 00:39:39,080 Speaker 1: least that you see, it's demographics are far superior compared 642 00:39:39,120 --> 00:39:42,840 Speaker 1: to Germany as far as uh birth rates are concerned. 643 00:39:43,200 --> 00:39:45,800 Speaker 1: Immigration is a is a much bigger issue because France 644 00:39:45,800 --> 00:39:48,880 Speaker 1: has a pretty poor track record in terms of assimilating immigrants, 645 00:39:48,960 --> 00:39:51,080 Speaker 1: let's say, compared to Anglo Saxon nations such as the 646 00:39:51,120 --> 00:39:54,520 Speaker 1: United States or uh u K. But the other place 647 00:39:54,560 --> 00:39:56,160 Speaker 1: I guess where you can say that France is a 648 00:39:56,160 --> 00:39:59,960 Speaker 1: bit like emerging market is the fact that it's products 649 00:40:00,000 --> 00:40:02,440 Speaker 1: of it is also quite high. Just the fact that 650 00:40:02,480 --> 00:40:04,440 Speaker 1: people aren't allowed to work that much when you have 651 00:40:04,760 --> 00:40:07,840 Speaker 1: sort of you know, like a work week which curbs 652 00:40:07,880 --> 00:40:09,960 Speaker 1: working as at thirty five hours a week. So I 653 00:40:10,000 --> 00:40:12,040 Speaker 1: think that yeah, in terms of the potential for France 654 00:40:12,080 --> 00:40:15,560 Speaker 1: to do better from here with superior demographics and the 655 00:40:15,560 --> 00:40:18,600 Speaker 1: fact that productivity can is relatively high. Just that people 656 00:40:18,640 --> 00:40:21,480 Speaker 1: don't work as much, I think, yeah, in the Africa, 657 00:40:21,560 --> 00:40:24,720 Speaker 1: you can call it that. And Maurice Leevey of System 658 00:40:24,800 --> 00:40:27,440 Speaker 1: was adamant about the thirty five hour work week in 659 00:40:27,480 --> 00:40:30,439 Speaker 1: the need to make that a piece of history for sure. 660 00:40:30,480 --> 00:40:32,359 Speaker 1: Just because of the urgency of last week, I think 661 00:40:32,360 --> 00:40:34,799 Speaker 1: we need to turn to your claim call on the 662 00:40:34,840 --> 00:40:38,120 Speaker 1: commodity cycle. What did you make of the plummet in 663 00:40:38,239 --> 00:40:42,799 Speaker 1: commodities iron ore and such, but particularly in hydrocarbons last week? 664 00:40:42,880 --> 00:40:44,960 Speaker 1: What did it signal? Well? I think that you know, 665 00:40:44,960 --> 00:40:47,040 Speaker 1: as far as oil is concerned, I've been saying that 666 00:40:47,560 --> 00:40:49,320 Speaker 1: a lot of people suffer from what we call the 667 00:40:49,360 --> 00:40:52,120 Speaker 1: anchoring bias, which that all because the price of oil 668 00:40:52,160 --> 00:40:54,800 Speaker 1: went up two hundred and uh forty dollars a battle 669 00:40:54,920 --> 00:40:57,600 Speaker 1: last decade. We tend to often think of the fact 670 00:40:57,600 --> 00:40:59,880 Speaker 1: that the price of oil today is very low compared 671 00:40:59,880 --> 00:41:02,239 Speaker 1: to those highs. But as I've been pointing out that 672 00:41:02,320 --> 00:41:04,920 Speaker 1: if you look at the long term price of oil 673 00:41:05,000 --> 00:41:08,760 Speaker 1: in inflation adjusted terms, the price you get is around 674 00:41:08,840 --> 00:41:11,880 Speaker 1: where you are today, around a battle. So from a 675 00:41:11,920 --> 00:41:15,200 Speaker 1: long term historical perspective, the price of oil today is 676 00:41:15,200 --> 00:41:17,760 Speaker 1: not low. It is in line with its long term history, 677 00:41:17,840 --> 00:41:19,600 Speaker 1: just that it's low compared to where we got to 678 00:41:20,120 --> 00:41:24,200 Speaker 1: last decade at the fag end of a massive commodity supercycle. 679 00:41:24,360 --> 00:41:27,800 Speaker 1: So in that regard, I think that oil is following 680 00:41:27,840 --> 00:41:30,600 Speaker 1: the classic historical pattern, which that it had a massive 681 00:41:30,640 --> 00:41:32,840 Speaker 1: boom and then a bust, and then if history is 682 00:41:32,880 --> 00:41:36,480 Speaker 1: any guide, it will basically trade in a broad range 683 00:41:36,719 --> 00:41:39,279 Speaker 1: for a long time to come around its historical means. 684 00:41:39,320 --> 00:41:41,319 Speaker 1: So I think the price of oil is set to 685 00:41:41,360 --> 00:41:44,680 Speaker 1: trade within a thirty to sixty battle for a long 686 00:41:44,760 --> 00:41:48,080 Speaker 1: time to come. And after having sort of gravitated towards 687 00:41:48,120 --> 00:41:49,880 Speaker 1: the high end of the range, we are possibly now 688 00:41:49,920 --> 00:41:52,200 Speaker 1: headed towards the lower end of the range. And the 689 00:41:52,239 --> 00:41:55,520 Speaker 1: big surprise has been just how productive US shale is 690 00:41:55,600 --> 00:41:58,919 Speaker 1: and the US oil industry is. So I think that's 691 00:41:58,960 --> 00:42:01,080 Speaker 1: the one big sort of driver as far as oil 692 00:42:01,160 --> 00:42:05,840 Speaker 1: is concerned, the larger commodity complex. On that, my concerns 693 00:42:05,840 --> 00:42:09,240 Speaker 1: still revolve around China. As I've said, is that China's 694 00:42:09,280 --> 00:42:12,160 Speaker 1: grow trajectory has been on a downtrend since the start 695 00:42:12,200 --> 00:42:14,400 Speaker 1: of a decade. The way I describe it it is 696 00:42:14,400 --> 00:42:18,320 Speaker 1: that China's grow trajectory resembles a ping pong ball bouncing 697 00:42:18,320 --> 00:42:20,439 Speaker 1: down the stairs, which is that the trend is down. 698 00:42:20,800 --> 00:42:23,200 Speaker 1: But every time the trend tends to accelerate a bit, 699 00:42:23,560 --> 00:42:26,239 Speaker 1: they inject more credit, more stimulus into the economy, so 700 00:42:26,280 --> 00:42:28,760 Speaker 1: you get a bounce up and then the decline begins. 701 00:42:28,840 --> 00:42:31,480 Speaker 1: I think that's exactly what's happened over the last year. 702 00:42:31,560 --> 00:42:35,080 Speaker 1: That in jan Fab of last year, UH fears that 703 00:42:35,120 --> 00:42:38,480 Speaker 1: the China would have a massive hard landing were sort 704 00:42:38,520 --> 00:42:42,120 Speaker 1: of uh really growing, so they injected massive amounts of 705 00:42:42,160 --> 00:42:46,840 Speaker 1: credit and stimulus into the economy to rescue the economy. 706 00:42:47,160 --> 00:42:51,440 Speaker 1: That led to UH some rebounded in industrial activity, and 707 00:42:51,480 --> 00:42:53,600 Speaker 1: we've seen a bounce up in commodity prices on the 708 00:42:53,600 --> 00:42:55,840 Speaker 1: back of that. But now as growth seems to have 709 00:42:55,880 --> 00:42:59,440 Speaker 1: peaked in China, that downtrend in growth has resumed. So 710 00:42:59,520 --> 00:43:02,399 Speaker 1: I think that that's really the path that commodities are 711 00:43:02,400 --> 00:43:06,080 Speaker 1: likely to follow. The broad UH point here being that 712 00:43:06,239 --> 00:43:09,799 Speaker 1: after they have a big boom bus cycle, commodities tend 713 00:43:09,840 --> 00:43:12,520 Speaker 1: to trade in a wide range for a long period 714 00:43:12,520 --> 00:43:14,799 Speaker 1: of time and sort of don't go back to the 715 00:43:14,840 --> 00:43:18,719 Speaker 1: old highs for a generation for sure. Sure. Sitting with 716 00:43:18,800 --> 00:43:22,319 Speaker 1: David in New York and and share, I guess I 717 00:43:22,360 --> 00:43:25,719 Speaker 1: want to talk about the correlations within the market, and 718 00:43:25,800 --> 00:43:30,240 Speaker 1: not so much equities, bonds, currencies, commodities, but the correlations 719 00:43:30,239 --> 00:43:34,000 Speaker 1: of the actions of chair yelling with the market. Are 720 00:43:34,040 --> 00:43:37,760 Speaker 1: we tantrum like or setting us are setting ourselves up 721 00:43:37,840 --> 00:43:41,120 Speaker 1: for further tantrums? Well, it could be because I think that, 722 00:43:41,440 --> 00:43:43,439 Speaker 1: you know, like the I think there are two sort 723 00:43:43,440 --> 00:43:46,600 Speaker 1: of conflicting forces in the marketplace. One is the fact 724 00:43:46,600 --> 00:43:49,440 Speaker 1: that now finally it seems that the US is at 725 00:43:49,440 --> 00:43:51,960 Speaker 1: full employment, and I find that fascinating. There's so much 726 00:43:52,000 --> 00:43:55,799 Speaker 1: talk about robots displacing jobs and other things going on, 727 00:43:55,920 --> 00:43:57,600 Speaker 1: but the fact of the matter is that the US 728 00:43:57,680 --> 00:44:02,480 Speaker 1: today is uh at about full employment and that should 729 00:44:02,520 --> 00:44:05,240 Speaker 1: finally lead to wages going higher. We've seen an uptick 730 00:44:05,280 --> 00:44:07,279 Speaker 1: in wages, but so far wage growth has been quite 731 00:44:07,280 --> 00:44:09,799 Speaker 1: disappointing compared to where it should have been at this 732 00:44:09,880 --> 00:44:13,080 Speaker 1: stage of the economic cycle. On the other hand, I 733 00:44:13,120 --> 00:44:16,960 Speaker 1: think that the deflationy forces from China continue to blow, 734 00:44:17,080 --> 00:44:18,719 Speaker 1: and I think that even though we have seen a 735 00:44:18,760 --> 00:44:20,600 Speaker 1: secession in that in the last year, as we just 736 00:44:20,600 --> 00:44:23,640 Speaker 1: discussed with commodity prices going up and Chinese sort of 737 00:44:24,040 --> 00:44:27,040 Speaker 1: producer prices skyrocketing. But I think that we are seeing 738 00:44:27,080 --> 00:44:29,360 Speaker 1: a reversal of that. So I think that that play 739 00:44:29,520 --> 00:44:32,480 Speaker 1: is going to continue that sort of uh conflict which 740 00:44:33,040 --> 00:44:35,520 Speaker 1: on one and I see US wages going up on 741 00:44:35,560 --> 00:44:38,799 Speaker 1: the other hand, because commodity prices are unlikely to do 742 00:44:38,920 --> 00:44:41,920 Speaker 1: much in the foreseable future and if anything, they go 743 00:44:41,960 --> 00:44:45,520 Speaker 1: to the bottom of the trading range. I think that 744 00:44:45,520 --> 00:44:48,919 Speaker 1: that's what is what keeps sort of things interesting here where, 745 00:44:48,960 --> 00:44:52,240 Speaker 1: you know, and that's why the tenure is barely moving 746 00:44:52,320 --> 00:44:54,640 Speaker 1: in the last few weeks. But the partition here, as 747 00:44:54,680 --> 00:44:57,160 Speaker 1: you know from our reading Hans Rhetoric or your colleague 748 00:44:57,200 --> 00:45:00,200 Speaker 1: at Morgan Stanley, is the dollar dynamics, which to be 749 00:45:00,239 --> 00:45:04,520 Speaker 1: different between Europe and the dollar dynamics with Asia ex Japan. 750 00:45:05,160 --> 00:45:08,920 Speaker 1: Is Asia ex Japan the ultimate alpha opportunity of the 751 00:45:08,960 --> 00:45:11,120 Speaker 1: rest of this year. Yeah, I mean in terms of 752 00:45:11,120 --> 00:45:13,399 Speaker 1: the fact that you know, like we don't like talking 753 00:45:13,440 --> 00:45:15,719 Speaker 1: about regions and that way, because I think that you know, 754 00:45:15,719 --> 00:45:19,120 Speaker 1: there's we're among friends, we're among friends. But I think 755 00:45:19,160 --> 00:45:22,240 Speaker 1: that But my concern is that I think emerging markets, 756 00:45:22,239 --> 00:45:25,200 Speaker 1: including Asia X Japan have natural momentum going up because 757 00:45:25,239 --> 00:45:28,279 Speaker 1: they're all reviving after you know, like a long sort 758 00:45:28,320 --> 00:45:31,120 Speaker 1: of drought and time out in the wilderness. But the 759 00:45:31,160 --> 00:45:34,080 Speaker 1: problem there, like I keep my one eye out on, 760 00:45:34,200 --> 00:45:36,640 Speaker 1: is China. That's the one thing which could still derail 761 00:45:37,040 --> 00:45:39,960 Speaker 1: the Asia x Japan story because China is still very 762 00:45:40,000 --> 00:45:42,680 Speaker 1: dominant in that region. And if Chinese growth so far 763 00:45:42,719 --> 00:45:45,160 Speaker 1: as slowing down after sort of having peaked in the 764 00:45:45,160 --> 00:45:47,279 Speaker 1: first quarter, but if that were to really slow down 765 00:45:47,280 --> 00:45:50,000 Speaker 1: any further, that's the one thing which could sort of 766 00:45:50,000 --> 00:45:52,160 Speaker 1: throw a monkey range into that trade. Let me bring 767 00:45:52,160 --> 00:45:56,600 Speaker 1: in surveillance x Keen in New York. David, thank you. 768 00:45:57,640 --> 00:45:59,520 Speaker 1: Let me ask you about the the U S relationship 769 00:45:59,560 --> 00:46:02,280 Speaker 1: with China at this point. We watched the summit unfolded 770 00:46:02,320 --> 00:46:04,719 Speaker 1: marl Laga more more than a month ago. Now, I 771 00:46:04,960 --> 00:46:07,800 Speaker 1: spoke with the Secretary of Commerce last week. Part David, 772 00:46:07,840 --> 00:46:11,080 Speaker 1: Marlago is so April. It's so April now, I know 773 00:46:11,160 --> 00:46:14,799 Speaker 1: as we push on, push on Bedminster, the new the 774 00:46:14,840 --> 00:46:19,279 Speaker 1: new White House North Secretary Ross telling me last week 775 00:46:19,320 --> 00:46:22,120 Speaker 1: that the strategic and economic dialogue is going to continue. 776 00:46:22,320 --> 00:46:24,279 Speaker 1: What's your sense of the relationship here and as you 777 00:46:24,280 --> 00:46:27,080 Speaker 1: look at the prospects for Chinese growth. How dependent are 778 00:46:27,120 --> 00:46:29,680 Speaker 1: they upon that relationship with the US. Well, I think 779 00:46:29,680 --> 00:46:31,799 Speaker 1: that they are very dependent because you know, there's still 780 00:46:31,880 --> 00:46:34,280 Speaker 1: very much in you know, like an export par house. 781 00:46:34,600 --> 00:46:37,239 Speaker 1: They're the largest exporters in the world, and if they 782 00:46:37,280 --> 00:46:39,880 Speaker 1: were ever to be any sort of trade skirmishes with 783 00:46:39,920 --> 00:46:43,160 Speaker 1: the US or any sort of uh god forbid, trade war, 784 00:46:43,280 --> 00:46:45,480 Speaker 1: that would have a major destabilizing effect on the global 785 00:46:45,520 --> 00:46:47,880 Speaker 1: economy and particularly on China. So I think that everyone 786 00:46:47,920 --> 00:46:50,239 Speaker 1: here needs to trade with care. I think that's what's 787 00:46:50,280 --> 00:46:52,040 Speaker 1: going on. I know this is like, this is the 788 00:46:52,040 --> 00:46:56,120 Speaker 1: broader question, which is that in November, uh, the entire 789 00:46:56,160 --> 00:46:59,680 Speaker 1: discussion was about what effect would Trump have on markets? 790 00:46:59,680 --> 00:47:01,680 Speaker 1: And we think in the markets was all about the 791 00:47:01,680 --> 00:47:04,840 Speaker 1: Trump administration. Here we are in me and it's amazing, 792 00:47:05,000 --> 00:47:07,120 Speaker 1: you know, like how investors have moved on, which is 793 00:47:07,120 --> 00:47:09,879 Speaker 1: that in the in the in the marketplace now there 794 00:47:09,960 --> 00:47:12,759 Speaker 1: is very little discussion about the Trump effect. It was 795 00:47:12,840 --> 00:47:15,760 Speaker 1: all gone back to sort of assessing each asset class 796 00:47:15,840 --> 00:47:18,719 Speaker 1: or each trend on its own, and very little discussion 797 00:47:18,719 --> 00:47:21,680 Speaker 1: about Trump. So I find this amazing disconnect that that 798 00:47:21,840 --> 00:47:26,440 Speaker 1: in the in the general political discourse, no conversation can 799 00:47:26,480 --> 00:47:28,880 Speaker 1: begin or end without a discussion about what Trump is 800 00:47:28,920 --> 00:47:33,319 Speaker 1: doing or what the Trump administration is doing in the marketplace. 801 00:47:33,360 --> 00:47:35,600 Speaker 1: You know, like we UH, we had a whole bunch 802 00:47:35,640 --> 00:47:37,839 Speaker 1: of our team which attended the I m F World 803 00:47:37,840 --> 00:47:41,839 Speaker 1: Bank Conferences in d C last months, and they came 804 00:47:41,840 --> 00:47:44,200 Speaker 1: back with the impression that very few people there are 805 00:47:44,200 --> 00:47:46,520 Speaker 1: now talking about Trump anymore or the effect that Trump 806 00:47:46,560 --> 00:47:49,200 Speaker 1: is having. So we've gone from this amazing sort of 807 00:47:49,640 --> 00:47:53,480 Speaker 1: discussion in UH November where everything was about you know, 808 00:47:53,480 --> 00:47:55,400 Speaker 1: what will happen, you know what effect will Trump have 809 00:47:55,520 --> 00:47:58,520 Speaker 1: on every single relationship in the world, And now we 810 00:47:58,520 --> 00:48:00,360 Speaker 1: have gone to that place where people are like, you 811 00:48:00,400 --> 00:48:03,319 Speaker 1: know what, there's not that much he can make a 812 00:48:03,320 --> 00:48:05,480 Speaker 1: difference to. So people have gone back to sort of 813 00:48:05,480 --> 00:48:08,480 Speaker 1: looking at each trend UH individually and from a very 814 00:48:08,480 --> 00:48:11,960 Speaker 1: economic standpoint. Now you're gonna watch that that menuet unfold 815 00:48:12,760 --> 00:48:14,560 Speaker 1: later this month at the G seven in Italy. You 816 00:48:14,880 --> 00:48:17,279 Speaker 1: have President Trump traveling there to meet with his counterparts, 817 00:48:17,320 --> 00:48:21,160 Speaker 1: his first trip trip overseas. I imagine we're going to 818 00:48:21,200 --> 00:48:23,080 Speaker 1: see play out there. We've seen that play out before 819 00:48:23,080 --> 00:48:26,520 Speaker 1: with his trips. The Treasury Secretary has taken trips the 820 00:48:26,560 --> 00:48:28,440 Speaker 1: Secretary of State has taken there will be a lot 821 00:48:28,440 --> 00:48:31,720 Speaker 1: of counterparts curious as to what this president thinks about 822 00:48:31,719 --> 00:48:33,799 Speaker 1: the world order, what he's going to do, What are 823 00:48:33,800 --> 00:48:36,080 Speaker 1: you going to be watching for? Well, I think that 824 00:48:36,120 --> 00:48:38,120 Speaker 1: in terms of you know, like, you know what the 825 00:48:38,200 --> 00:48:41,120 Speaker 1: dynamics are, you know, how exactly like it plays itself out. 826 00:48:41,160 --> 00:48:43,560 Speaker 1: But my feeling is that from a financial market standpoint, 827 00:48:43,600 --> 00:48:45,480 Speaker 1: this is going to be a basic non event, which 828 00:48:45,520 --> 00:48:47,600 Speaker 1: is the fact that you know, G seven meetings have 829 00:48:48,160 --> 00:48:50,600 Speaker 1: long ceased to have any effect as far as investors 830 00:48:50,640 --> 00:48:53,440 Speaker 1: are concerned. And I think that I know that you 831 00:48:53,520 --> 00:48:57,200 Speaker 1: will be intense focus in the in the political space 832 00:48:57,280 --> 00:48:59,720 Speaker 1: and in the media about Trump and how he's interacting 833 00:48:59,719 --> 00:49:01,840 Speaker 1: with other leaders and stuff at that. But from a 834 00:49:01,880 --> 00:49:05,440 Speaker 1: financial market standpoint, I think that people are you know, like, uh, 835 00:49:05,480 --> 00:49:08,400 Speaker 1: we've got to separate that discussion completely from the political theater. 836 00:49:08,680 --> 00:49:11,360 Speaker 1: For sure. I gotta make money to get home, right now? 837 00:49:11,560 --> 00:49:14,040 Speaker 1: Do I need to go short oil? Nobody seems to 838 00:49:14,040 --> 00:49:17,919 Speaker 1: be predicting forty two or even to preach forty thirty 839 00:49:18,040 --> 00:49:22,040 Speaker 1: nine oil. What is that likelihood the probability of breaking 840 00:49:22,080 --> 00:49:24,399 Speaker 1: out of the Mother of All ranges? Well, I think 841 00:49:24,400 --> 00:49:27,960 Speaker 1: that the probability is high, which is the fact that 842 00:49:27,960 --> 00:49:30,640 Speaker 1: the that the dynamic on the oil market still seems 843 00:49:30,640 --> 00:49:33,000 Speaker 1: as if you know, prices want to get lower. And 844 00:49:33,800 --> 00:49:35,960 Speaker 1: I think you rightly point out very few people are 845 00:49:36,000 --> 00:49:39,000 Speaker 1: prepared for lower prices because everyone's been thinking that the 846 00:49:39,120 --> 00:49:41,000 Speaker 1: risk is to the upside. So yeah, I mean, if 847 00:49:41,000 --> 00:49:44,400 Speaker 1: you want to buy downside sort of a breakout stuff, 848 00:49:44,760 --> 00:49:48,359 Speaker 1: it's possibly better than buying an upside option. Here are 849 00:49:48,360 --> 00:49:52,120 Speaker 1: you watching OPEC, what's the likelihood that production freezes continued? Well, 850 00:49:52,160 --> 00:49:53,680 Speaker 1: I think that you know, I mean like they will 851 00:49:53,719 --> 00:49:55,840 Speaker 1: likely continue, But I think the part of OPEC is 852 00:49:56,000 --> 00:50:00,239 Speaker 1: greatly overstated. I think that you know, well that pick 853 00:50:00,280 --> 00:50:02,200 Speaker 1: makes for great headlines and what happens there, but I 854 00:50:02,200 --> 00:50:04,480 Speaker 1: really feel the power is overstated. And in the end, 855 00:50:04,520 --> 00:50:07,520 Speaker 1: it's back to the same discussion that uh, you know 856 00:50:07,560 --> 00:50:09,440 Speaker 1: that do they want to lose more market share to 857 00:50:09,600 --> 00:50:13,120 Speaker 1: US shale because it's come back in such a big 858 00:50:13,120 --> 00:50:15,160 Speaker 1: way and seemed to be much more productive than people 859 00:50:15,200 --> 00:50:17,799 Speaker 1: that expected. I'm not quite sure they want to do that. 860 00:50:18,239 --> 00:50:22,120 Speaker 1: Your your classic reshers breakout nations in pursuit of the 861 00:50:22,160 --> 00:50:26,839 Speaker 1: next economic miracle? Where is the next economic miracle? Could 862 00:50:26,840 --> 00:50:31,279 Speaker 1: it be the recovery of Venezuela, of the absolute heartbreaking 863 00:50:31,400 --> 00:50:34,279 Speaker 1: bottom or is it some other story Now, I think 864 00:50:34,320 --> 00:50:36,719 Speaker 1: that Latin America in general is doing much better. I 865 00:50:36,719 --> 00:50:38,440 Speaker 1: think it's a continent which you know, we don't talk 866 00:50:38,480 --> 00:50:41,200 Speaker 1: about that much, but it's the one continent still following 867 00:50:41,239 --> 00:50:44,839 Speaker 1: the economic orthodox model. I was in Brazil last month. 868 00:50:44,880 --> 00:50:46,719 Speaker 1: I was really impressed by the kind of reforms that 869 00:50:46,760 --> 00:50:49,080 Speaker 1: Brazil is carrying out with it's back to the wall. 870 00:50:49,160 --> 00:50:51,960 Speaker 1: But that's the story that all countries which have their 871 00:50:52,000 --> 00:50:53,719 Speaker 1: back to the wall are the countries which carry out 872 00:50:53,760 --> 00:50:56,760 Speaker 1: economic reforms, because that's the only time that they seem 873 00:50:56,840 --> 00:50:58,719 Speaker 1: to do, and that's what's going on. But I think 874 00:50:58,719 --> 00:51:01,000 Speaker 1: the big trend in the world it is that the 875 00:51:01,080 --> 00:51:04,280 Speaker 1: US market seems to be hitting a relative peak compared 876 00:51:04,320 --> 00:51:06,640 Speaker 1: to the rest of the world, with the dollar also 877 00:51:06,640 --> 00:51:10,440 Speaker 1: showing signs of exhaustion. So I think the opportunities are international, 878 00:51:10,600 --> 00:51:13,800 Speaker 1: whether it's Europe, it's Japan, it's parts of emerging markets. 879 00:51:14,080 --> 00:51:16,680 Speaker 1: I'm finding much more opportunity international now than here in 880 00:51:16,719 --> 00:51:19,160 Speaker 1: the United States. For sure. Thank you so much, as 881 00:51:19,200 --> 00:51:21,279 Speaker 1: always for thank you from Paris. I'm sure David will 882 00:51:21,360 --> 00:51:24,239 Speaker 1: greet us out here, but It's just wonderful, folks, to 883 00:51:24,320 --> 00:51:27,720 Speaker 1: have Mr Sherma with us of Morgan's Daddy. Global coverage 884 00:51:27,719 --> 00:51:30,040 Speaker 1: continuing here on Bloomberg Surveilance for Shere Scharman, the Global 885 00:51:30,440 --> 00:51:32,640 Speaker 1: head of Strategy at Morgan Stanley, the author of The 886 00:51:32,719 --> 00:51:34,960 Speaker 1: Rise and Fall of Nations and Incredible Forces of Change 887 00:51:34,960 --> 00:51:37,160 Speaker 1: in a post crisis world. As I said out in Hardback, 888 00:51:37,200 --> 00:51:40,280 Speaker 1: now available in paperback next month. Look for his columns 889 00:51:40,560 --> 00:51:51,920 Speaker 1: in The New York Times monthly as well. Thanks for 890 00:51:52,000 --> 00:51:56,080 Speaker 1: listening to the Bloomberg Surveillance podcast. Subscribe and listen to 891 00:51:56,160 --> 00:52:02,240 Speaker 1: interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. 892 00:52:02,800 --> 00:52:05,839 Speaker 1: I'm on Twitter at Tom Keene. David Gura is at 893 00:52:05,960 --> 00:52:10,799 Speaker 1: David Gura. Before the podcast, you can always catch us worldwide. 894 00:52:11,000 --> 00:52:25,120 Speaker 1: I'm Bloomberg Radio, brought you by Bank of America Mary Lynch, 895 00:52:25,239 --> 00:52:29,480 Speaker 1: dedicated to bringing our clients insights and solutions to meet 896 00:52:29,520 --> 00:52:33,000 Speaker 1: the challenges of a transforming world. That's the power of 897 00:52:33,040 --> 00:52:38,120 Speaker 1: global connections. Mary Lynch, Pierce, Feeder and Smith Incorporated Member 898 00:52:38,760 --> 00:52:39,440 Speaker 1: s I p C.