1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, Podcasts, Radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,240 Speaker 1: on Apple car Play or Android Auto with the Bloomberg 4 00:00:21,320 --> 00:00:24,840 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:25,280 --> 00:00:27,040 Speaker 1: or watch us live on YouTube. 6 00:00:27,240 --> 00:00:31,040 Speaker 2: Stephen Parker's in charge of thoughtful conversations for JP Morgan 7 00:00:31,120 --> 00:00:33,559 Speaker 2: Private Bank and can we get Jamie Diamond in a 8 00:00:33,600 --> 00:00:36,400 Speaker 2: bow tie? For those of you on radio, Parker's just 9 00:00:36,680 --> 00:00:40,080 Speaker 2: rocking the fashion bow tie here. It's allowed a brace 10 00:00:40,280 --> 00:00:43,760 Speaker 2: thing I never wear. It's a lot for me. Jamie 11 00:00:43,760 --> 00:00:46,800 Speaker 2: Diamond chance I'll never get in the bow I would 12 00:00:46,840 --> 00:00:47,000 Speaker 2: love it. 13 00:00:47,040 --> 00:00:49,199 Speaker 3: I mean, Tom, if there's anybody who can convince him 14 00:00:49,200 --> 00:00:49,960 Speaker 3: it's got I. 15 00:00:49,840 --> 00:00:52,240 Speaker 2: Said, if I see it in Central Park when he's 16 00:00:52,360 --> 00:00:56,360 Speaker 2: running and I'm not, I'll see if I can get it. Doug, 17 00:00:56,520 --> 00:00:59,760 Speaker 2: what are you hearing from your clients JP Morgan Private Bank? 18 00:00:59,800 --> 00:01:02,120 Speaker 2: I want to know the team of people. You have 19 00:01:02,640 --> 00:01:05,280 Speaker 2: your ears to the rail. What are you hearing from 20 00:01:05,360 --> 00:01:08,479 Speaker 2: JP Morgan investors with you? Yeah? 21 00:01:08,520 --> 00:01:10,800 Speaker 3: So the big question We've obviously had a couple of 22 00:01:10,920 --> 00:01:13,880 Speaker 3: years of very strong equity market performance, and the question 23 00:01:14,000 --> 00:01:16,960 Speaker 3: is whether or not this continues. I think the two 24 00:01:16,959 --> 00:01:19,399 Speaker 3: biggest themes, and we talked about this in our outlook, 25 00:01:19,720 --> 00:01:22,240 Speaker 3: are questions around AI and are we in a bubble? 26 00:01:22,400 --> 00:01:23,920 Speaker 2: Can that momentum continue? 27 00:01:24,160 --> 00:01:26,120 Speaker 3: And then the second one is kind of the countervailing 28 00:01:26,160 --> 00:01:30,560 Speaker 3: force of increasing global fragmentation and what that means. And 29 00:01:30,600 --> 00:01:33,160 Speaker 3: then on top of that, you sprinkle on some questions 30 00:01:33,160 --> 00:01:36,360 Speaker 3: around midterm election politics and policy, how is that going 31 00:01:36,400 --> 00:01:40,320 Speaker 3: to impact us? And there's some I think healthy skepticism 32 00:01:40,760 --> 00:01:42,520 Speaker 3: around the outlook. 33 00:01:42,120 --> 00:01:44,720 Speaker 2: For equity markets, but we think the opportunity remains. 34 00:01:45,160 --> 00:01:49,320 Speaker 4: Steve, are your clients bringing up geopolitical concerns? I mean 35 00:01:49,360 --> 00:01:51,920 Speaker 4: are they actually talking about and saying how do I 36 00:01:51,960 --> 00:01:52,800 Speaker 4: position myself? 37 00:01:52,840 --> 00:01:54,920 Speaker 2: Now? You know, on the margin a little bit? 38 00:01:54,920 --> 00:01:57,080 Speaker 3: Although I think we've done a pretty good job training 39 00:01:57,120 --> 00:02:02,880 Speaker 3: clients to remember that geopolitical events rarely have long term 40 00:02:02,920 --> 00:02:04,400 Speaker 3: structural impacts on markets. 41 00:02:04,400 --> 00:02:06,279 Speaker 2: You may see, you know, a short term. 42 00:02:06,120 --> 00:02:08,440 Speaker 3: Market dislocation, but the fact that we had, you know, 43 00:02:08,520 --> 00:02:10,920 Speaker 3: the bombing of the nuclear facility in Iran and what 44 00:02:10,960 --> 00:02:13,440 Speaker 3: happened in Venezuela and oil markets have barely moved is 45 00:02:13,440 --> 00:02:16,560 Speaker 3: sort of a reminder that you shouldn't over index on geopolitics. 46 00:02:16,560 --> 00:02:19,320 Speaker 3: Now in a world that's increasingly fragmented, we are getting 47 00:02:19,400 --> 00:02:22,200 Speaker 3: questions around what you can do in your portfolio to diversify, 48 00:02:22,800 --> 00:02:25,080 Speaker 3: and we do think the goal remains the best way 49 00:02:25,160 --> 00:02:28,600 Speaker 3: to continue to do that. Gold Gold at JP Morgan. 50 00:02:28,680 --> 00:02:31,640 Speaker 2: I'm shocked. Yeah, I can't imagine the vault under the 51 00:02:31,639 --> 00:02:34,440 Speaker 2: new building. Do you see it? It must be like 52 00:02:34,720 --> 00:02:38,680 Speaker 2: fort Diamond or Fortress Diamond, something like that. Tell me 53 00:02:38,720 --> 00:02:41,480 Speaker 2: how you fit ETFs in are the days gone where 54 00:02:41,480 --> 00:02:45,640 Speaker 2: you do individual security analysis and by individual stocks at 55 00:02:45,680 --> 00:02:48,280 Speaker 2: a private bank. No, the answer is no. I mean 56 00:02:48,800 --> 00:02:49,840 Speaker 2: that's not my role. 57 00:02:49,880 --> 00:02:52,400 Speaker 3: But we have a great team of equity strategists and 58 00:02:52,440 --> 00:02:54,880 Speaker 3: researchers and we think they're still a great So you not. 59 00:02:54,919 --> 00:02:57,000 Speaker 2: Just going to the ETF, you know, do this to 60 00:02:57,120 --> 00:02:59,640 Speaker 2: this own tening. Yes, it's a balance. 61 00:02:59,680 --> 00:03:02,760 Speaker 3: I mean, whether it's single stocks or active managers and 62 00:03:02,800 --> 00:03:05,160 Speaker 3: then passive strategies, it's not a one or the other 63 00:03:05,200 --> 00:03:07,320 Speaker 3: in our view. It's a combination of the two and 64 00:03:07,320 --> 00:03:10,400 Speaker 3: focusing on where can you use passive exposure in the 65 00:03:10,440 --> 00:03:13,360 Speaker 3: most efficient markets and where are the opportunities where you're 66 00:03:13,400 --> 00:03:16,640 Speaker 3: going to see greater dispersion less efficiency. That's where single 67 00:03:16,720 --> 00:03:19,320 Speaker 3: names or active managers can come into play. And one 68 00:03:19,360 --> 00:03:21,360 Speaker 3: of the things we've been talking around with this AI 69 00:03:21,480 --> 00:03:24,720 Speaker 3: story and the AI beneficiaries is this broadens out the 70 00:03:24,760 --> 00:03:28,320 Speaker 3: opportunity in active management related to identifying who are going 71 00:03:28,360 --> 00:03:30,680 Speaker 3: to be the biggest winners in that space beyond the 72 00:03:30,720 --> 00:03:31,320 Speaker 3: tech sector. 73 00:03:31,400 --> 00:03:33,680 Speaker 2: I think will be a story that will play out 74 00:03:33,680 --> 00:03:34,760 Speaker 2: over the next couple of years. 75 00:03:35,120 --> 00:03:37,520 Speaker 4: I want to get back to gold. Why are you 76 00:03:37,600 --> 00:03:39,960 Speaker 4: so high on gold? I mean, some are saying, really 77 00:03:40,000 --> 00:03:42,360 Speaker 4: like gold at five thousand dollars an ounce, Is that 78 00:03:42,400 --> 00:03:43,760 Speaker 4: a possibility for this year? 79 00:03:43,960 --> 00:03:44,240 Speaker 2: It is? 80 00:03:44,280 --> 00:03:46,720 Speaker 3: We actually think our target is fifty two hundred for 81 00:03:46,760 --> 00:03:48,880 Speaker 3: the end of the year. We've been bullish on gold 82 00:03:49,000 --> 00:03:51,720 Speaker 3: since the beginning of last year, and many people thought 83 00:03:51,760 --> 00:03:54,520 Speaker 3: that we were too bullish then and too bullish now. 84 00:03:55,320 --> 00:03:57,920 Speaker 3: To us, it's really a kind of a multifaceted story. 85 00:03:58,000 --> 00:04:00,680 Speaker 3: The biggest driver of what we think will will lead 86 00:04:00,720 --> 00:04:04,720 Speaker 3: to upsiding gold is the diversification of central bank balance sheets, 87 00:04:04,720 --> 00:04:06,880 Speaker 3: and last year was an important reminder with everything that 88 00:04:06,920 --> 00:04:09,840 Speaker 3: we saw with the weakness of the dollar, central banks 89 00:04:09,880 --> 00:04:12,720 Speaker 3: around the world are looking to diversify. That's a big 90 00:04:12,760 --> 00:04:14,880 Speaker 3: source of demand. And then on top of that, in 91 00:04:14,920 --> 00:04:18,800 Speaker 3: this world of greater fragmentation and political uncertainty. Gold is 92 00:04:18,839 --> 00:04:22,200 Speaker 3: where people are looking as that diversification benefit. 93 00:04:22,360 --> 00:04:25,440 Speaker 4: When we hear investing in gold, break it down because 94 00:04:25,760 --> 00:04:29,520 Speaker 4: what are some good ways people can get exposure to 95 00:04:29,560 --> 00:04:32,080 Speaker 4: gold without going out and buying the bars and sticking 96 00:04:32,080 --> 00:04:33,239 Speaker 4: them under their beds. 97 00:04:33,440 --> 00:04:35,839 Speaker 3: Yeah, I mean, generally speaking, we want our clients to 98 00:04:36,040 --> 00:04:38,880 Speaker 3: we prefer exposure to the metal itself rather than to 99 00:04:38,920 --> 00:04:41,040 Speaker 3: the gold miners. And you can do that either by 100 00:04:41,040 --> 00:04:44,320 Speaker 3: buying physical gold or buying ETFs that represent ownership in 101 00:04:44,640 --> 00:04:47,479 Speaker 3: the physical commodity. But it's a commodity over equity story 102 00:04:47,480 --> 00:04:48,240 Speaker 3: in this case. 103 00:04:48,800 --> 00:04:51,520 Speaker 4: And any other precious metals that you're high on right now, 104 00:04:51,520 --> 00:04:54,880 Speaker 4: because look, silver, silver actually outperformed gold. We know last 105 00:04:54,960 --> 00:04:57,040 Speaker 4: year that seems to still be on a tear. Copper's 106 00:04:57,040 --> 00:04:59,320 Speaker 4: been going crazy, platinum ten. I mean, it's kind of 107 00:04:59,360 --> 00:05:01,520 Speaker 4: like pick a pick a metal, any metal, right. 108 00:05:01,560 --> 00:05:04,159 Speaker 3: Yeah, I mean, it's been a fantastic run for the 109 00:05:04,160 --> 00:05:07,680 Speaker 3: commodity sector in metals, and specific from the precious metal perspective, 110 00:05:07,680 --> 00:05:09,440 Speaker 3: gold is our preferred way to play it. But one 111 00:05:09,440 --> 00:05:11,520 Speaker 3: of the things that we are looking at is the 112 00:05:11,520 --> 00:05:13,719 Speaker 3: broadening to some of the more industrial metals. We do 113 00:05:13,800 --> 00:05:15,880 Speaker 3: think part of our outlook for twenty twenty six is 114 00:05:15,880 --> 00:05:19,479 Speaker 3: a broadening of this growth story, a cyclical recovery. And 115 00:05:19,520 --> 00:05:22,440 Speaker 3: obviously with the investment in infrastructure and AI, you know 116 00:05:22,760 --> 00:05:26,120 Speaker 3: those industrial metals are going to be beneficiaries. 117 00:05:26,200 --> 00:05:29,200 Speaker 2: How do you define quality? The word's way overused right now. 118 00:05:29,240 --> 00:05:31,480 Speaker 2: It's driving me nuts. I mean, is it a ratio basis? 119 00:05:31,560 --> 00:05:35,839 Speaker 2: You look at financial ratios to consider quality? Yeah? 120 00:05:35,839 --> 00:05:37,719 Speaker 3: I think when you think about quality, a lot of 121 00:05:37,720 --> 00:05:39,880 Speaker 3: it comes down to balance sheets, and you want to 122 00:05:39,880 --> 00:05:41,560 Speaker 3: look at things like leverage. You want to look at 123 00:05:41,560 --> 00:05:43,640 Speaker 3: things like cash flows. You know, that's the way that 124 00:05:43,640 --> 00:05:45,680 Speaker 3: we're thinking of cash flow stumbling. 125 00:05:45,760 --> 00:05:47,920 Speaker 2: Is free cash flow growth stumbling? Right now? I don't 126 00:05:47,960 --> 00:05:48,520 Speaker 2: see it? No? 127 00:05:48,920 --> 00:05:50,839 Speaker 3: I mean, you know, on the margin, when you look 128 00:05:50,839 --> 00:05:53,960 Speaker 3: at the the Hyperscalers as an example, where you've seen 129 00:05:54,000 --> 00:05:57,680 Speaker 3: these mega cash flows, Yes, part of that cash flow 130 00:05:57,800 --> 00:06:00,600 Speaker 3: is now being redirected more towards investment, but not to 131 00:06:00,640 --> 00:06:02,000 Speaker 3: a degree that gets this concern. 132 00:06:02,120 --> 00:06:04,800 Speaker 2: I'm sizing the control. Nice of you to wake up 133 00:06:04,839 --> 00:06:07,960 Speaker 2: side and he notes that my oldest son is named Cashlow. 134 00:06:08,240 --> 00:06:10,560 Speaker 2: I mean it works out great, Okay, can we go 135 00:06:10,680 --> 00:06:14,400 Speaker 2: further academic questions? Do it what's it like to sit 136 00:06:14,560 --> 00:06:17,760 Speaker 2: on the edge of the south lawn at UVA? And 137 00:06:18,320 --> 00:06:22,320 Speaker 2: my grandfather would talk about UVa's Commerce school. You have, 138 00:06:22,400 --> 00:06:25,080 Speaker 2: it's one of the most prestigious degrees in America. This 139 00:06:25,279 --> 00:06:30,320 Speaker 2: is Beck pre depression almost what's a bs E commerce? 140 00:06:30,360 --> 00:06:32,440 Speaker 2: You look how many a study looking out in the 141 00:06:32,520 --> 00:06:33,800 Speaker 2: lawn at UVA. 142 00:06:34,080 --> 00:06:37,000 Speaker 3: You know, Charlottesville is a distracting place for a number 143 00:06:37,000 --> 00:06:39,400 Speaker 3: of reasons. It's one of the one of the best 144 00:06:39,400 --> 00:06:41,760 Speaker 3: places in the world. But we've got some of the 145 00:06:41,760 --> 00:06:44,080 Speaker 3: best professors in the world. And you know, someday I 146 00:06:44,120 --> 00:06:44,640 Speaker 3: hope to the. 147 00:06:44,760 --> 00:06:47,720 Speaker 2: Really crank is still an old school twentieth century commerce, 148 00:06:47,800 --> 00:06:50,520 Speaker 2: aren't they They are? And one of the liberal arts 149 00:06:50,560 --> 00:06:52,440 Speaker 2: with the fancy stuff. Yeah. 150 00:06:52,440 --> 00:06:54,039 Speaker 3: And one of the great things about the school is 151 00:06:54,040 --> 00:06:56,560 Speaker 3: that they bring together you know, kind of traditional academics 152 00:06:56,600 --> 00:06:58,880 Speaker 3: with practitioners who come back and so you get out. 153 00:06:58,760 --> 00:06:59,800 Speaker 2: Of the that's the best. 154 00:07:00,000 --> 00:07:02,159 Speaker 4: That's what I would wantify were a student people out there, 155 00:07:02,160 --> 00:07:04,200 Speaker 4: like in the industry, who are coming in and teaching. 156 00:07:04,200 --> 00:07:05,640 Speaker 2: How do you bring it to life? How do you 157 00:07:05,720 --> 00:07:08,640 Speaker 2: apply these theories? Do you talk Greek in Latin with 158 00:07:08,680 --> 00:07:09,320 Speaker 2: Bob Michael? 159 00:07:11,120 --> 00:07:13,560 Speaker 3: You know, Alpha Beta that's about alpha. That's about as 160 00:07:13,600 --> 00:07:15,960 Speaker 3: far as I get. Sean Parker, thank you so much. 161 00:07:16,160 --> 00:07:18,840 Speaker 2: In charge of Greek letters at JP Morgan Private Bank, 162 00:07:18,880 --> 00:07:22,880 Speaker 2: he's co head of Global Investment Strategy. Stay with us. 163 00:07:23,080 --> 00:07:26,320 Speaker 5: More from Bloomberg Surveillance coming up after this. 164 00:07:33,560 --> 00:07:37,160 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live 165 00:07:37,240 --> 00:07:40,360 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 166 00:07:40,480 --> 00:07:43,840 Speaker 1: Apple Karplay and Android Atto with the Bloomberg Business app, 167 00:07:44,040 --> 00:07:45,760 Speaker 1: or watch us live on YouTube. 168 00:07:46,000 --> 00:07:49,200 Speaker 2: Hugely qualified to speak of the continent, and we talked 169 00:07:49,200 --> 00:07:54,520 Speaker 2: to Ibrah Mobari and Goldner about Iran. Alexis Crow has 170 00:07:54,600 --> 00:07:59,640 Speaker 2: an earned credibility at PwC. Her workout of Saint Andrews 171 00:07:59,640 --> 00:08:02,680 Speaker 2: in the low in the School of Economics is noted 172 00:08:03,480 --> 00:08:09,440 Speaker 2: and also a great perspective to write blistering, nasty notes 173 00:08:09,480 --> 00:08:15,720 Speaker 2: for PwC, where people in Europe go, oh, how rude? Okay, 174 00:08:15,800 --> 00:08:19,480 Speaker 2: So in Europe you don't mince any words. If they 175 00:08:19,480 --> 00:08:23,120 Speaker 2: don't seize the moment, now, now's the time. What a 176 00:08:23,240 --> 00:08:26,000 Speaker 2: mccrawl met's and the rest of them, What a starmer 177 00:08:26,120 --> 00:08:29,480 Speaker 2: in the whole craziness in the UK. What do they 178 00:08:29,560 --> 00:08:34,240 Speaker 2: need to do? In twenty twenty six to change the debate. 179 00:08:34,679 --> 00:08:38,559 Speaker 6: Thanks so much Tom for having me here. We highlight 180 00:08:38,600 --> 00:08:41,640 Speaker 6: this is the key investing theme for twenty twenty six 181 00:08:42,320 --> 00:08:45,800 Speaker 6: is the moment for Europe to seize on the savings 182 00:08:45,840 --> 00:08:49,200 Speaker 6: and investment Union and really actually moving to close the 183 00:08:49,240 --> 00:08:52,880 Speaker 6: private pensions gap, where pensioners in Europe in the private 184 00:08:52,880 --> 00:08:55,520 Speaker 6: space hold less than ten x of what they have 185 00:08:55,600 --> 00:08:59,240 Speaker 6: in the United States. So for macroeconomic reasons, right, just 186 00:08:59,360 --> 00:09:03,840 Speaker 6: slowing growth, demographic reasons, geopolitical forces that you mention of 187 00:09:03,880 --> 00:09:08,360 Speaker 6: the US withdrawal and isolationism means that Europe is going 188 00:09:08,440 --> 00:09:10,600 Speaker 6: to have to step up spending on infro and we've 189 00:09:10,600 --> 00:09:14,200 Speaker 6: seen this obviously with the Merits team and Germany actually 190 00:09:14,200 --> 00:09:17,600 Speaker 6: ticking up in growth. And we see this across the 191 00:09:17,600 --> 00:09:21,520 Speaker 6: board with insurance companies needing to find assets that will 192 00:09:21,559 --> 00:09:22,920 Speaker 6: generate returns over the long kit. 193 00:09:23,000 --> 00:09:25,160 Speaker 2: I don't see it. I got a droggy letter out 194 00:09:25,160 --> 00:09:27,840 Speaker 2: that everybody hangs on, and I'm sure you read every 195 00:09:27,880 --> 00:09:30,160 Speaker 2: word of it and responded to it. Le Guard's been 196 00:09:30,160 --> 00:09:33,040 Speaker 2: talking this up for years and on and on and on. 197 00:09:33,559 --> 00:09:36,600 Speaker 2: I'm a cafe Saint Regie in Paris and everybody around 198 00:09:36,600 --> 00:09:40,280 Speaker 2: me is fifty years old and retired. That's the reality. 199 00:09:41,280 --> 00:09:44,640 Speaker 2: They don't want I'm sorry, they don't want to work. 200 00:09:44,800 --> 00:09:46,920 Speaker 2: That's all there is to it. Woh, those are fighting 201 00:09:46,960 --> 00:09:49,840 Speaker 2: words too. I'm sitting there at the cafe having a 202 00:09:49,880 --> 00:09:57,319 Speaker 2: perfect omelet. Everybody's reading the FIGUREO and whatever, and they're 203 00:09:56,000 --> 00:10:01,040 Speaker 2: they all retire at fifty years old. That's a stereotype, 204 00:10:01,080 --> 00:10:01,400 Speaker 2: all right. 205 00:10:01,440 --> 00:10:03,880 Speaker 6: So we've got the situation in France, and France usually 206 00:10:03,920 --> 00:10:07,360 Speaker 6: sits a little bit between northern and southern Europe, particularly 207 00:10:07,360 --> 00:10:10,360 Speaker 6: on the fiscal side. What you do have is a 208 00:10:10,360 --> 00:10:13,360 Speaker 6: cultural shift where Germany has removed the debt break as 209 00:10:13,400 --> 00:10:16,439 Speaker 6: we know, Italy has also remarkably reduced the fiscal deficit. 210 00:10:17,080 --> 00:10:19,760 Speaker 6: So the situation in France, which you acknowledge, yes, it's 211 00:10:19,800 --> 00:10:23,080 Speaker 6: a hot button topic. Unfortunately it's their own version of 212 00:10:23,080 --> 00:10:26,840 Speaker 6: myopia when it comes to the policy debate. However, you 213 00:10:26,960 --> 00:10:30,280 Speaker 6: have a record high labor force participation rate actually coming 214 00:10:30,360 --> 00:10:33,840 Speaker 6: out of COVID. You've actually got record amounts of capital 215 00:10:33,840 --> 00:10:36,760 Speaker 6: coming into the startup space, a lot that the Maccoon 216 00:10:36,800 --> 00:10:39,480 Speaker 6: government has done in the Orange economy. French workers are 217 00:10:39,480 --> 00:10:43,000 Speaker 6: actually working more hours. They're working more hours on the weekends. 218 00:10:43,000 --> 00:10:46,720 Speaker 6: We actually see this in OECD data. What I think 219 00:10:46,840 --> 00:10:49,920 Speaker 6: really needs to happen, Tom, is that you've got to 220 00:10:50,080 --> 00:10:53,880 Speaker 6: have consolidation of Eurozone lenders. That's where we really start 221 00:10:53,920 --> 00:10:57,600 Speaker 6: to see the ability to move non performing assets out 222 00:10:57,600 --> 00:11:00,920 Speaker 6: of banks that are earning negative yields and into a 223 00:11:00,960 --> 00:11:02,600 Speaker 6: different type of financial assets. 224 00:11:02,600 --> 00:11:04,800 Speaker 2: So, Paul Donovan at UBS talks about this, are you 225 00:11:04,880 --> 00:11:06,880 Speaker 2: talking about a bank roll up? I don't see it. 226 00:11:06,920 --> 00:11:09,040 Speaker 2: I mean, I mean, David Harrow and I have been 227 00:11:09,080 --> 00:11:12,440 Speaker 2: waiting a long time to see cross border bank mergers. 228 00:11:12,720 --> 00:11:13,920 Speaker 6: I still think this can happen. 229 00:11:14,360 --> 00:11:15,280 Speaker 2: Okay, okay. 230 00:11:15,679 --> 00:11:17,880 Speaker 4: How much is the ECB a part of everything that 231 00:11:17,880 --> 00:11:19,440 Speaker 4: you're talking about and a part of sort of this 232 00:11:19,640 --> 00:11:22,200 Speaker 4: leg up perhaps that Europe can take in twenty twenty six. 233 00:11:22,280 --> 00:11:25,600 Speaker 6: Thank you, Alexis So, I actually think, I actually think 234 00:11:25,640 --> 00:11:28,880 Speaker 6: some of the coordination between regional lenders and the central 235 00:11:28,880 --> 00:11:31,960 Speaker 6: Bank is underestimated right in the extent to which they 236 00:11:31,960 --> 00:11:34,679 Speaker 6: can drive this forward. You speak to some of the 237 00:11:34,679 --> 00:11:38,520 Speaker 6: g sub CEOs in the Eurozone, they're very focused on this, 238 00:11:38,679 --> 00:11:41,360 Speaker 6: and so I actually think their coordination with the ECB 239 00:11:41,520 --> 00:11:44,840 Speaker 6: can move this forward. We've seen Madame Legarde actually say hey, 240 00:11:44,920 --> 00:11:47,280 Speaker 6: we need to have more sovereignty. When it comes to 241 00:11:47,320 --> 00:11:51,040 Speaker 6: payment systems, maybe we should move off certain US credit 242 00:11:51,120 --> 00:11:52,960 Speaker 6: card providers and I think that's real. 243 00:11:53,960 --> 00:11:58,000 Speaker 2: Tell me about James Diamond and he's got a digital 244 00:11:58,080 --> 00:12:01,360 Speaker 2: experiment in the United Kingdom, and the American banks going 245 00:12:01,400 --> 00:12:05,120 Speaker 2: to Europe and do American banking culturally can network this 246 00:12:05,160 --> 00:12:06,280 Speaker 2: is what you're expert at. 247 00:12:06,440 --> 00:12:10,640 Speaker 6: It's interesting, so not only just on that the digital 248 00:12:10,679 --> 00:12:13,000 Speaker 6: asset side, but just on the consumer bank side. It's 249 00:12:13,000 --> 00:12:15,240 Speaker 6: actually speaking about this last night with a client. I mean, 250 00:12:15,679 --> 00:12:19,400 Speaker 6: American banks can do retail very well, and so I 251 00:12:19,400 --> 00:12:21,400 Speaker 6: think there is space to do that not only in 252 00:12:21,440 --> 00:12:25,480 Speaker 6: the UK, but also across the Eurozone. The other side 253 00:12:25,520 --> 00:12:27,720 Speaker 6: of this as well is when we talk about the 254 00:12:27,760 --> 00:12:30,840 Speaker 6: ability to close the pensions gap and take a book out. 255 00:12:30,679 --> 00:12:31,320 Speaker 2: Of Wall Street. 256 00:12:32,720 --> 00:12:36,080 Speaker 6: What I think also needs to happen is you've also 257 00:12:36,120 --> 00:12:38,720 Speaker 6: going to see Latin American banks coming in and supporting 258 00:12:38,720 --> 00:12:42,880 Speaker 6: pension and investments. So it's not just European banks. I 259 00:12:42,880 --> 00:12:44,920 Speaker 6: do think that American banks will have a space. 260 00:12:45,080 --> 00:12:48,839 Speaker 2: Alexis Crower this PwC. We continue an extended conversation here. 261 00:12:48,880 --> 00:12:51,640 Speaker 2: We had Golnar Mount a Valley in earlier from London 262 00:12:51,640 --> 00:12:53,880 Speaker 2: and Iran. But this is a real a trade and 263 00:12:53,920 --> 00:12:59,480 Speaker 2: it lines up for the transatlantic So I talked to Pharaoh. Yeah, okay, 264 00:12:59,520 --> 00:13:02,160 Speaker 2: he's gotten leader hos in this year. Oh I'm so happy. 265 00:13:02,280 --> 00:13:04,680 Speaker 2: Over to Davos. They're going to be over in Davos, Bramo. 266 00:13:05,200 --> 00:13:07,920 Speaker 2: I think Amory Horden is going as well. Okay, because 267 00:13:07,920 --> 00:13:09,040 Speaker 2: the President will be there. 268 00:13:09,400 --> 00:13:10,160 Speaker 4: That's going crazy. 269 00:13:10,200 --> 00:13:12,040 Speaker 2: I've been there when the President was there, so I 270 00:13:12,080 --> 00:13:14,120 Speaker 2: have this. You're gonna love this, Alexis. You know what 271 00:13:14,160 --> 00:13:16,320 Speaker 2: it's like. They call me up at the at the 272 00:13:16,320 --> 00:13:18,680 Speaker 2: World Economic Forum and they go time, we want you 273 00:13:18,720 --> 00:13:21,480 Speaker 2: to do a seminar, and doctor Schwab wants you to 274 00:13:21,520 --> 00:13:24,440 Speaker 2: do it. So they line me up with this total 275 00:13:25,120 --> 00:13:32,680 Speaker 2: killer seminar, anticipation packed room unfortunately two rooms over against 276 00:13:32,679 --> 00:13:35,920 Speaker 2: the Secretary of Treasury Steve Mnutian got to spur of 277 00:13:35,920 --> 00:13:39,760 Speaker 2: the moment notice telling people all that the entire room 278 00:13:39,880 --> 00:13:43,760 Speaker 2: was me, four panelists, and Adam Toobs sitting in the 279 00:13:43,760 --> 00:13:47,560 Speaker 2: middle of the room empty. That's how Davis rolls. Sometimes 280 00:13:47,679 --> 00:13:48,160 Speaker 2: I would. 281 00:13:47,960 --> 00:13:50,160 Speaker 4: Have sat in your session though. Don't worry, Tom, but 282 00:13:50,520 --> 00:13:54,360 Speaker 4: when you look at geopolitical tensions right now. We were 283 00:13:54,360 --> 00:13:56,920 Speaker 4: talking earlier in the show about how the US market 284 00:13:57,120 --> 00:14:00,480 Speaker 4: has really largely been ignoring what's happening in Venezuela and Iran, 285 00:14:00,520 --> 00:14:03,080 Speaker 4: and at least for US in Greenland. Is Europe going 286 00:14:03,080 --> 00:14:06,520 Speaker 4: through the same thing? Are they no longer thinking Ukraine? 287 00:14:06,720 --> 00:14:09,360 Speaker 4: Are they no longer thinking are they now not thinking Iran? 288 00:14:10,000 --> 00:14:11,960 Speaker 6: Great question, Alexis, and I think we really have to 289 00:14:12,000 --> 00:14:15,920 Speaker 6: retract back outwards and say global markets and global markets 290 00:14:16,400 --> 00:14:18,800 Speaker 6: by and large do not care about geopolitics. 291 00:14:18,960 --> 00:14:20,000 Speaker 2: Is shrug it off? Right? 292 00:14:20,280 --> 00:14:24,160 Speaker 6: Interesting that the single largest spike that we had in 293 00:14:24,200 --> 00:14:27,640 Speaker 6: the Vics and the volatility index happened when investors and 294 00:14:27,640 --> 00:14:30,160 Speaker 6: market participants were concerned about an unwinding in the carry 295 00:14:30,160 --> 00:14:35,480 Speaker 6: trade with Japan. So it's not geopolitics. It is monetary 296 00:14:35,480 --> 00:14:35,800 Speaker 6: thank you. 297 00:14:36,080 --> 00:14:36,960 Speaker 7: That really. 298 00:14:39,360 --> 00:14:42,720 Speaker 6: It is our addiction to the cost of money. It's cinra, 299 00:14:42,880 --> 00:14:46,920 Speaker 6: it's Jackson Hole. Now, of course, what's interesting, the elephant 300 00:14:46,920 --> 00:14:48,920 Speaker 6: in the room is what happens when some of these 301 00:14:48,920 --> 00:14:53,200 Speaker 6: two converge right and political risk monetary policy. And that's 302 00:14:53,240 --> 00:14:55,200 Speaker 6: something that we're facing in the United States today. 303 00:14:55,680 --> 00:14:57,720 Speaker 2: Okay, can we do it? Audible? I gotta do this. 304 00:14:57,760 --> 00:15:00,640 Speaker 2: I mean, Alexis, folks, you look at her bio it's like, Okay, 305 00:15:00,880 --> 00:15:03,440 Speaker 2: did you have any fun in school? Like all she 306 00:15:03,600 --> 00:15:06,840 Speaker 2: did was work. It was like ghetto life Alexis Crow 307 00:15:07,120 --> 00:15:11,000 Speaker 2: where this's was PwC. I got all these these these 308 00:15:11,240 --> 00:15:14,560 Speaker 2: the hot air Alexis and I'm sure PwC. It's the 309 00:15:14,640 --> 00:15:20,280 Speaker 2: same way AI AI AI AI EIO From where you said, 310 00:15:20,600 --> 00:15:25,840 Speaker 2: is AI going to replace intellectual input into the service 311 00:15:25,880 --> 00:15:27,920 Speaker 2: sector of the United States of America. 312 00:15:28,040 --> 00:15:29,600 Speaker 6: I know this is some of your headlines on the 313 00:15:29,680 --> 00:15:32,560 Speaker 6: data on our surrounding labor markets and the banks here. 314 00:15:34,200 --> 00:15:38,720 Speaker 6: When we think about the growth of private assets, private markets, 315 00:15:38,840 --> 00:15:43,840 Speaker 6: alternative assets, and the need for highly specialized analysis and 316 00:15:43,880 --> 00:15:48,720 Speaker 6: intelligence surrounding this, that's the type of job that AI 317 00:15:48,920 --> 00:15:52,200 Speaker 6: doesn't touch. It can augment, but it doesn't necessarily touch. 318 00:15:52,240 --> 00:15:54,200 Speaker 6: So I think we're going to have to move higher 319 00:15:54,280 --> 00:15:57,680 Speaker 6: up the skill chain. Actually, where markets are growing in 320 00:15:57,800 --> 00:15:59,880 Speaker 6: terms of private markets means that you will have to do. 321 00:16:00,760 --> 00:16:04,120 Speaker 2: But somebody at LSCU did differential equations that I didn't. 322 00:16:04,560 --> 00:16:08,119 Speaker 2: Is the whiz kid from your LC is he threatened 323 00:16:08,320 --> 00:16:08,960 Speaker 2: by AI. 324 00:16:09,200 --> 00:16:12,800 Speaker 6: It's at twenty four years old. It's all about relationships. 325 00:16:12,840 --> 00:16:15,000 Speaker 6: This is the one thing that we're training people to do. 326 00:16:15,080 --> 00:16:17,680 Speaker 6: It's all about the way in which you engage with clients, 327 00:16:18,040 --> 00:16:20,960 Speaker 6: the way in which you can be nimble and flexibly respond. 328 00:16:21,360 --> 00:16:24,880 Speaker 6: And that's not something that's necessarily taught in the classrooms. 329 00:16:25,600 --> 00:16:27,840 Speaker 4: You're a linguist. I mean I'm looking at your bio 330 00:16:28,240 --> 00:16:35,080 Speaker 4: all right, obviously English, French, Spanish, fluent working knowledge of Italiano. 331 00:16:35,280 --> 00:16:37,880 Speaker 2: Yeah. Well, Goldner is the same way she has four languages. 332 00:16:37,920 --> 00:16:40,240 Speaker 2: If you only have four languages to it, you can't 333 00:16:40,320 --> 00:16:41,760 Speaker 2: rock and Portuguese. 334 00:16:41,840 --> 00:16:42,360 Speaker 3: Let us not be. 335 00:16:42,640 --> 00:16:44,320 Speaker 4: And I have another question for you, alexis just quickly. 336 00:16:44,360 --> 00:16:46,240 Speaker 4: We'll get back to business in a moment. Do people 337 00:16:46,280 --> 00:16:50,040 Speaker 4: call you Alexa because it really frustrates me, like by accident, 338 00:16:50,080 --> 00:16:51,680 Speaker 4: they just they want to call you Alexa. And then 339 00:16:51,680 --> 00:16:53,880 Speaker 4: there Alexa goes on. If it's in the room, you 340 00:16:53,920 --> 00:16:54,560 Speaker 4: get that a lot. 341 00:16:54,720 --> 00:16:56,640 Speaker 6: I can't think that perturbs me more as Alex. 342 00:16:58,000 --> 00:17:00,440 Speaker 4: Alex is kind of cool. It's a cool factor. Alex, 343 00:17:00,640 --> 00:17:02,200 Speaker 4: just don't call me Alexis you know we're. 344 00:17:02,120 --> 00:17:05,560 Speaker 2: Sweeney I talked duke basketball. This is Lisa. This is 345 00:17:05,680 --> 00:17:07,720 Speaker 2: just like, you know, the level of girl talk this 346 00:17:07,760 --> 00:17:09,480 Speaker 2: week is just between blue jeans. 347 00:17:09,520 --> 00:17:13,080 Speaker 4: I mean, Tom's just trying to jump in here. Earlier 348 00:17:13,119 --> 00:17:14,840 Speaker 4: when we were talking about oil and the Strait of 349 00:17:14,840 --> 00:17:16,719 Speaker 4: her Moves. I saw you next to me like nodding 350 00:17:16,720 --> 00:17:19,760 Speaker 4: your head. Talk to me about oil and a market 351 00:17:19,800 --> 00:17:22,199 Speaker 4: there that seems to be ignoring all of the geopolitical 352 00:17:22,320 --> 00:17:23,000 Speaker 4: risk around it. 353 00:17:23,080 --> 00:17:23,800 Speaker 2: Okay, it was. 354 00:17:23,800 --> 00:17:28,680 Speaker 6: Right to ignore Venezuela Venezuela, and so market participants completely 355 00:17:28,800 --> 00:17:32,040 Speaker 6: underestimate or overestimate the extent to which Iran and Venezuela 356 00:17:32,080 --> 00:17:34,880 Speaker 6: can bring supply to the market. So maximum, I think 357 00:17:34,960 --> 00:17:37,560 Speaker 6: Venezuela can bring his point seven million per day, which 358 00:17:37,640 --> 00:17:40,320 Speaker 6: is a dent and global oil supply of one hundred 359 00:17:40,680 --> 00:17:43,800 Speaker 6: or demand of one hundred. So I was nodding because 360 00:17:43,920 --> 00:17:47,280 Speaker 6: twenty percent of a global daily final demand comes from 361 00:17:47,320 --> 00:17:49,920 Speaker 6: the Straits of Horn Moves. And to your colleagues's point, 362 00:17:49,960 --> 00:17:52,280 Speaker 6: it doesn't necessarily just need to be Iran that would 363 00:17:52,280 --> 00:17:54,920 Speaker 6: take in action. Any congestion in the Straits of Horror 364 00:17:54,920 --> 00:17:57,879 Speaker 6: Moves could stop that. It's not only twenty percent, it's 365 00:17:57,920 --> 00:18:02,040 Speaker 6: also the lowest cost, right, so it's integral. As we know, 366 00:18:02,200 --> 00:18:05,040 Speaker 6: this has become integral to European final demand as well. 367 00:18:05,200 --> 00:18:09,320 Speaker 2: Alexis Crow driving the market higher. Futures up eleven ten 368 00:18:09,320 --> 00:18:11,640 Speaker 2: to twenty minutes of the opening here Nacy Cup half 369 00:18:11,680 --> 00:18:15,080 Speaker 2: a percent as well. One final question, So the wind 370 00:18:15,840 --> 00:18:19,560 Speaker 2: a breeze at St Andrews is fifteen miles an hour? Okay, 371 00:18:19,800 --> 00:18:21,760 Speaker 2: so you were asconsd up at St Andrews. You got 372 00:18:21,760 --> 00:18:25,480 Speaker 2: a visceral feel for Scotland. I see Farage your reform 373 00:18:25,600 --> 00:18:30,760 Speaker 2: coming on in Scotland. Can Farage pull off this parliamentary miracle? 374 00:18:31,160 --> 00:18:33,040 Speaker 6: I know we chatted about this the last time. I 375 00:18:33,080 --> 00:18:35,200 Speaker 6: think it is possible. It is possible. 376 00:18:35,240 --> 00:18:37,320 Speaker 2: I agree, and I got a lot of people telling 377 00:18:37,359 --> 00:18:39,199 Speaker 2: me it's not possible. I think it's possible. A lot 378 00:18:39,200 --> 00:18:44,320 Speaker 2: of people said bruggsit was impossible. Yeah, oh day, thank you. 379 00:18:44,560 --> 00:18:47,440 Speaker 2: This is wonderful. Are you going? Are you going to Dabos? 380 00:18:47,480 --> 00:18:48,280 Speaker 2: Are you going to be with it? 381 00:18:48,359 --> 00:18:50,159 Speaker 6: I will not be there. 382 00:18:51,400 --> 00:18:54,480 Speaker 2: I'm not going to be there either, Okay. Lisa Matteo said, 383 00:18:54,520 --> 00:18:56,960 Speaker 2: you can't come. So it's a trip. 384 00:18:57,000 --> 00:18:58,920 Speaker 4: It's just such a trip to get there. 385 00:18:59,240 --> 00:19:02,120 Speaker 2: It is, but you know, well, with the Sikorski it's easier. 386 00:19:03,119 --> 00:19:08,080 Speaker 4: Okay, maybe for you Alexis Alex Crow, thank you so 387 00:19:08,480 --> 00:19:10,200 Speaker 4: much with PwC. 388 00:19:10,480 --> 00:19:12,320 Speaker 2: Greatly appreciated. Stay with us. 389 00:19:12,560 --> 00:19:16,000 Speaker 5: More from Bloomberg surveillance coming up after this. 390 00:19:23,040 --> 00:19:26,639 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us Live 391 00:19:26,680 --> 00:19:29,879 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 392 00:19:29,920 --> 00:19:33,320 Speaker 1: Apple Karplay and Android Otto with the Bloomberg Business app, 393 00:19:33,520 --> 00:19:35,240 Speaker 1: or watch us live on YouTube. 394 00:19:35,520 --> 00:19:38,400 Speaker 2: The phrases rip up the script, and when we are 395 00:19:38,520 --> 00:19:42,000 Speaker 2: so advantaged to have a guest within common wisdom, we 396 00:19:42,119 --> 00:19:44,560 Speaker 2: rip up the script. For the iber Robari, I'm supposed 397 00:19:44,600 --> 00:19:46,639 Speaker 2: to say, what's the dollar going to do? What does 398 00:19:46,760 --> 00:19:50,960 Speaker 2: Japan do? Our Sunday evening as they look at intervention 399 00:19:51,119 --> 00:19:54,320 Speaker 2: here to one point fifty eight en he was definitive 400 00:19:54,359 --> 00:19:59,200 Speaker 2: with Catherine Mann and Willenbauder. It's City Group holding courts 401 00:19:59,240 --> 00:20:04,359 Speaker 2: at Absolute Strategy Research. Now, Ibram, today's conversation is different. 402 00:20:04,800 --> 00:20:08,199 Speaker 2: You were born in Tehran. All of my work and interviews, 403 00:20:08,200 --> 00:20:13,480 Speaker 2: including with our goldner Montevali, is Americans are wildly ignorant 404 00:20:14,320 --> 00:20:17,320 Speaker 2: of Persia. I mean, it's just it's breath taking the 405 00:20:17,440 --> 00:20:21,960 Speaker 2: tension with the Arab's history back to biblical times. But 406 00:20:22,040 --> 00:20:24,320 Speaker 2: I want to bring it to the modern point. What 407 00:20:24,600 --> 00:20:29,960 Speaker 2: upsets you most about the rote media coverage of Iran? 408 00:20:30,720 --> 00:20:34,800 Speaker 2: Right now? Hmm? That is a very loaded question. 409 00:20:35,240 --> 00:20:38,480 Speaker 7: And I think like many Iranians abroad, and I'm mindful 410 00:20:38,480 --> 00:20:40,879 Speaker 7: that I grew up outside of Iran. So it is 411 00:20:41,000 --> 00:20:45,879 Speaker 7: the perspective of a deeply vested and interested outsider. It 412 00:20:45,960 --> 00:20:48,600 Speaker 7: is a It is a moment with a potent mix 413 00:20:48,640 --> 00:20:53,439 Speaker 7: of hope and apprehension about the developments there. And that 414 00:20:53,560 --> 00:20:58,439 Speaker 7: is perhaps the area where the media sometimes misses the 415 00:20:58,480 --> 00:21:02,639 Speaker 7: balance of risk and the potential for improvement. So this 416 00:21:03,320 --> 00:21:07,600 Speaker 7: the most recent developments in Iran brought with them probably 417 00:21:07,680 --> 00:21:12,840 Speaker 7: untold levels of unusual violence that didn't quite fit the 418 00:21:12,840 --> 00:21:15,600 Speaker 7: pattern that we've had that we've had in the past. 419 00:21:16,040 --> 00:21:19,359 Speaker 7: And that is again something that is both enormously risky 420 00:21:19,600 --> 00:21:22,480 Speaker 7: but perhaps as a price that needs to be paid for. 421 00:21:22,600 --> 00:21:26,000 Speaker 2: Shannon o'neillo to Council on Foreign Relations makes clear that 422 00:21:26,119 --> 00:21:30,200 Speaker 2: Venezuela has been torn asunder. I don't hear that about Iran. 423 00:21:30,280 --> 00:21:33,840 Speaker 2: With all of your family contacts there, the heritage of 424 00:21:33,880 --> 00:21:37,760 Speaker 2: your grandparents and your parents, with whatever their politics was, 425 00:21:37,760 --> 00:21:41,040 Speaker 2: as a shy eccident years ago, is the state of 426 00:21:41,119 --> 00:21:46,200 Speaker 2: Iranian society still there? If there was some form of change, 427 00:21:46,680 --> 00:21:50,920 Speaker 2: is there a bedrock foundation to rebuild a more democratic, 428 00:21:51,000 --> 00:21:54,639 Speaker 2: more capitalistic rand and I think that's the million dollar question. 429 00:21:55,200 --> 00:21:58,800 Speaker 7: And to be quite frank, I am from a far 430 00:21:59,119 --> 00:22:03,240 Speaker 7: more concerned about the risks disability in Iran versus Venezuela. 431 00:22:03,520 --> 00:22:08,080 Speaker 7: Iran is a multi ethnic, multi religious, multi lingual country 432 00:22:08,080 --> 00:22:10,240 Speaker 7: that has been held together by a combination of a 433 00:22:10,800 --> 00:22:14,679 Speaker 7: Persian majority culture and governance. And the exact question of 434 00:22:14,720 --> 00:22:18,520 Speaker 7: whether that minimum of governance, because we know governance right 435 00:22:18,520 --> 00:22:21,280 Speaker 7: now in Iran has been weak and weakening for many years, 436 00:22:21,320 --> 00:22:24,240 Speaker 7: whether that could be torn apart as opposed to rebuild 437 00:22:24,680 --> 00:22:26,280 Speaker 7: for a better word, when you look at. 438 00:22:26,240 --> 00:22:29,159 Speaker 2: The geography, Alexis wants to jump in here, let me 439 00:22:29,200 --> 00:22:32,040 Speaker 2: make this real quick. When you look at the geography, 440 00:22:32,600 --> 00:22:36,880 Speaker 2: Venezuela is ten miles from Paul Sweeney and Aruba. It's 441 00:22:36,960 --> 00:22:40,680 Speaker 2: not Cuba, but it's close to so many Americans. It 442 00:22:40,760 --> 00:22:43,240 Speaker 2: is the far side of the world. Do you feel 443 00:22:43,240 --> 00:22:47,480 Speaker 2: that way about it? Or can America extend out there 444 00:22:47,600 --> 00:22:50,040 Speaker 2: and avoid the missteps of Iraq? 445 00:22:51,760 --> 00:22:54,680 Speaker 7: So I think it's it will be challenging to map 446 00:22:54,720 --> 00:22:56,880 Speaker 7: out what the Middle East looks like the day after, 447 00:22:57,560 --> 00:23:01,439 Speaker 7: and developments there extremely fluid. The very fact that we 448 00:23:01,600 --> 00:23:07,639 Speaker 7: hear that the Saudis and that the Qataris were reluctant 449 00:23:07,640 --> 00:23:10,600 Speaker 7: to open their land and airspace to the US to intervene. 450 00:23:10,920 --> 00:23:13,040 Speaker 7: The fact that they are talking to Turkey and Pakistan 451 00:23:13,680 --> 00:23:17,359 Speaker 7: about new alliances. That's a very different environment between Saudi 452 00:23:17,359 --> 00:23:20,600 Speaker 7: and Iran than we've learned to even even not so 453 00:23:20,640 --> 00:23:21,080 Speaker 7: long ago. 454 00:23:21,359 --> 00:23:22,120 Speaker 2: And that again. 455 00:23:21,960 --> 00:23:25,840 Speaker 7: Speaks to the major risk for more instability that were 456 00:23:25,840 --> 00:23:29,359 Speaker 7: obviously illustrated, most extremely in the Iraq case. It doesn't 457 00:23:29,359 --> 00:23:31,199 Speaker 7: have to get as bad as it did back then, 458 00:23:31,320 --> 00:23:34,720 Speaker 7: but I, as Bill Aboute used to say, no matter 459 00:23:34,760 --> 00:23:37,959 Speaker 7: how bad things are, they can always get worse. So 460 00:23:38,000 --> 00:23:39,480 Speaker 7: I think that is a risk we have to keep 461 00:23:39,480 --> 00:23:41,720 Speaker 7: in mind for Iran. Despite the hope that I have for. 462 00:23:41,720 --> 00:23:44,800 Speaker 4: A better future and no military action at least right 463 00:23:44,800 --> 00:23:46,800 Speaker 4: now from the US, what we do have these tariffs 464 00:23:46,800 --> 00:23:51,159 Speaker 4: twenty five percent tariffs on countries doing business with Iran, 465 00:23:51,200 --> 00:23:53,320 Speaker 4: which sort of puts China in a weird spot and 466 00:23:53,400 --> 00:23:56,840 Speaker 4: I guess risks yet further clashing between the US and China. 467 00:23:56,880 --> 00:24:00,480 Speaker 4: But what do those tariffs really mean to people living 468 00:24:00,480 --> 00:24:02,720 Speaker 4: in Iran and having to deal with the day to day. 469 00:24:02,840 --> 00:24:04,800 Speaker 2: Well, that's a keyp on. I mean, it don't mean 470 00:24:04,800 --> 00:24:05,400 Speaker 2: anything good. 471 00:24:06,119 --> 00:24:08,840 Speaker 7: So I think that action is a signal, is a 472 00:24:08,880 --> 00:24:12,639 Speaker 7: symbolic signal of support. It is a perhaps a message 473 00:24:12,680 --> 00:24:16,800 Speaker 7: towards Russia and China. But when it comes to I 474 00:24:16,840 --> 00:24:19,159 Speaker 7: think the key aspect, which is to show support to 475 00:24:19,240 --> 00:24:22,840 Speaker 7: the population, there's absolutely no benefit. If anything, there is 476 00:24:23,080 --> 00:24:28,760 Speaker 7: some disservice to the protesters, which have of course been 477 00:24:28,960 --> 00:24:30,280 Speaker 7: suffering from the sanction. 478 00:24:30,440 --> 00:24:32,680 Speaker 2: So it's the IOGC that has benefit. Let us turn 479 00:24:32,760 --> 00:24:36,720 Speaker 2: to the currency market and what we see from foreign exchange. 480 00:24:36,720 --> 00:24:38,639 Speaker 2: But thank you so much for all of Bloomberg for 481 00:24:38,680 --> 00:24:41,800 Speaker 2: these comments this morning. If Mark's with us, and we 482 00:24:41,800 --> 00:24:44,440 Speaker 2: welcome all of you around the world here to a 483 00:24:44,560 --> 00:24:47,720 Speaker 2: skill set of the broader economics, why won't the dollar 484 00:24:48,119 --> 00:24:51,119 Speaker 2: we can further, it's just ninety nine y x y 485 00:24:51,920 --> 00:24:55,080 Speaker 2: Is it just the yenders? There something more global to 486 00:24:55,280 --> 00:24:56,440 Speaker 2: dollar resiliency. 487 00:24:57,600 --> 00:25:01,440 Speaker 7: I would say it's two factors, and one of them 488 00:25:02,040 --> 00:25:05,280 Speaker 7: is that the US economy looks pretty good, and that 489 00:25:05,400 --> 00:25:08,000 Speaker 7: is an environment where, for example, the FED may not 490 00:25:08,119 --> 00:25:10,040 Speaker 7: need to be cutting interest rates anymore at all. 491 00:25:11,200 --> 00:25:13,040 Speaker 2: We have we're seeing science. 492 00:25:12,800 --> 00:25:14,879 Speaker 7: That even the labor market, which was the weak spot, 493 00:25:15,119 --> 00:25:16,960 Speaker 7: may be starting to stabilize. 494 00:25:16,960 --> 00:25:19,120 Speaker 2: So it's good news in the US. 495 00:25:19,480 --> 00:25:23,159 Speaker 7: That is part of the picture, and encouragingly, it's not 496 00:25:23,200 --> 00:25:24,920 Speaker 7: so much that it's bad news in the rest of 497 00:25:24,960 --> 00:25:27,720 Speaker 7: the world, but simply that global investors had been positioned 498 00:25:27,880 --> 00:25:30,720 Speaker 7: for some further dollar dollar downside. But I would I 499 00:25:30,720 --> 00:25:35,000 Speaker 7: would overall characterize it still as in, as in it 500 00:25:35,080 --> 00:25:37,720 Speaker 7: is carrying a whiff of maybe not as much debasement 501 00:25:37,760 --> 00:25:38,960 Speaker 7: as people had worried about. 502 00:25:39,960 --> 00:25:42,680 Speaker 4: So you're thinking, maybe no action from the US FED 503 00:25:42,920 --> 00:25:47,080 Speaker 4: this year? Are you in the camp with JPM where 504 00:25:47,119 --> 00:25:48,880 Speaker 4: they are predicting perhaps execurity. 505 00:25:49,440 --> 00:25:52,320 Speaker 2: That's jp Morgan Morgan, I do that. 506 00:25:52,880 --> 00:25:53,920 Speaker 3: I know he knows that. 507 00:25:55,080 --> 00:25:57,080 Speaker 4: But next year, what are we looking at here? Maybe 508 00:25:57,119 --> 00:25:58,800 Speaker 4: a hike? I mean, is that in the cards? 509 00:25:59,320 --> 00:26:01,320 Speaker 2: I think it could be on the cards. Yes, I 510 00:26:01,320 --> 00:26:01,639 Speaker 2: think that. 511 00:26:02,200 --> 00:26:04,720 Speaker 7: Of course, we have many questions that we're debating hotly 512 00:26:04,760 --> 00:26:08,119 Speaker 7: about the future of the FED and its leadership. But 513 00:26:08,200 --> 00:26:10,560 Speaker 7: I think the place towards right now for signals for 514 00:26:10,680 --> 00:26:14,679 Speaker 7: the future is Australia. Because in Australia we saw the 515 00:26:14,800 --> 00:26:19,560 Speaker 7: smallest signs of inflation possibly starting to rise again, and 516 00:26:19,600 --> 00:26:21,720 Speaker 7: as soon as that happened, the center back moved from 517 00:26:21,720 --> 00:26:24,520 Speaker 7: cutting interest rates to potentially stignaling a hike that could 518 00:26:24,600 --> 00:26:27,080 Speaker 7: come as early as next month, so as soon as 519 00:26:27,080 --> 00:26:29,360 Speaker 7: inflation in the US, which is dormant and very benign, 520 00:26:29,560 --> 00:26:31,760 Speaker 7: but as soon as inflation is starting to rise, I 521 00:26:31,760 --> 00:26:36,639 Speaker 7: think the Fed would be would find it relatively easy. 522 00:26:36,560 --> 00:26:38,320 Speaker 2: To move towards the hiking buyers. 523 00:26:38,600 --> 00:26:40,800 Speaker 7: But for the time being, it's about pricing our cuts, 524 00:26:40,840 --> 00:26:42,000 Speaker 7: not yet moving towards that. 525 00:26:42,200 --> 00:26:44,200 Speaker 2: Yeah, and I see some Marzie dollars strength here. I 526 00:26:44,200 --> 00:26:46,160 Speaker 2: haven't looked at this in ages. I mean, the last 527 00:26:46,160 --> 00:26:47,919 Speaker 2: time I looked at this the veronicas we're at the 528 00:26:47,920 --> 00:26:51,800 Speaker 2: top of the charts. Okay, Australia's rocking. It does that 529 00:26:51,960 --> 00:26:54,600 Speaker 2: signal a China recovery? Can I go to simplest big 530 00:26:55,000 --> 00:26:57,399 Speaker 2: time Keen one on one and we just said China 531 00:26:57,440 --> 00:27:00,879 Speaker 2: basebook in and they said the gloomer and China way overplayed. 532 00:27:00,960 --> 00:27:02,760 Speaker 2: Is that why Australia is poppin'. 533 00:27:03,560 --> 00:27:05,800 Speaker 7: It is one of the reasons, even though I would 534 00:27:05,840 --> 00:27:08,320 Speaker 7: put it more down to domestic strength. So the Australian 535 00:27:08,320 --> 00:27:11,040 Speaker 7: housing market is strong, consumer spending is growing six to 536 00:27:11,119 --> 00:27:13,880 Speaker 7: seven percent a year at the moment. Unemployment never rolls, 537 00:27:14,200 --> 00:27:16,399 Speaker 7: so I think there's a big domestic element. But at 538 00:27:16,400 --> 00:27:19,760 Speaker 7: the same time, there's a potential Asian reflation story out there, 539 00:27:19,880 --> 00:27:21,960 Speaker 7: and again it's a little bit similar to pricing out 540 00:27:22,160 --> 00:27:24,119 Speaker 7: cuts in the Earth. I think it's pricing out maybe 541 00:27:24,200 --> 00:27:26,919 Speaker 7: the doom in China as opposed to a real strengthening. 542 00:27:27,040 --> 00:27:30,680 Speaker 7: But between Korea, China, Japan, I do see upside potential 543 00:27:30,680 --> 00:27:31,120 Speaker 7: over there. 544 00:27:31,040 --> 00:27:33,720 Speaker 2: Too, Abermerbari, thank you so much, really appreciate it. With 545 00:27:33,760 --> 00:27:36,240 Speaker 2: the Absolute Strategy researcher, thank you so much for the 546 00:27:36,280 --> 00:27:40,439 Speaker 2: comments of your family and your experiences with Persia and 547 00:27:40,560 --> 00:27:42,680 Speaker 2: with uh Iran. Stay with us. 548 00:27:42,920 --> 00:27:46,120 Speaker 5: More from Bloomberg Surveillance coming up after this. 549 00:27:53,400 --> 00:27:56,960 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 550 00:27:57,040 --> 00:28:01,040 Speaker 1: weekday afternoons from seven to ten am Eastern on Applecarplay 551 00:28:01,080 --> 00:28:04,320 Speaker 1: and Android Otto with the Bloomberg Business app, or watch 552 00:28:04,400 --> 00:28:05,520 Speaker 1: us live on YouTube. 553 00:28:05,680 --> 00:28:10,040 Speaker 2: Lindsay Newman is with G zero Media and geopolitical risk 554 00:28:10,160 --> 00:28:14,119 Speaker 2: expert and joins us from King's College, which is a 555 00:28:14,119 --> 00:28:19,199 Speaker 2: good place to be for this analysis. King's College, Lindsay, 556 00:28:19,200 --> 00:28:24,240 Speaker 2: as you well know, owns the study of war. Are 557 00:28:24,280 --> 00:28:25,000 Speaker 2: we at war? 558 00:28:27,400 --> 00:28:30,840 Speaker 8: Venezuela No, I mean absolutely absolutely not. 559 00:28:30,880 --> 00:28:32,359 Speaker 2: Look for Trump. 560 00:28:32,640 --> 00:28:39,000 Speaker 8: Venezuela was always about how he defines US national security, 561 00:28:39,440 --> 00:28:43,040 Speaker 8: And it was never about a turnover and power there 562 00:28:43,160 --> 00:28:47,560 Speaker 8: or democratic transition. It wasn't about domestic politics for Venezuela. 563 00:28:47,640 --> 00:28:50,360 Speaker 8: It was about national security as defined by Trump and 564 00:28:50,360 --> 00:28:55,400 Speaker 8: his administration, around immigration, principally around drugs and narco trafficking, 565 00:28:55,440 --> 00:28:58,120 Speaker 8: and of course around energy assets. And that's why we 566 00:28:58,160 --> 00:29:00,280 Speaker 8: see what we see unfolding right now, which which is 567 00:29:00,640 --> 00:29:03,560 Speaker 8: you have to hold sort of a confluence of conflicting 568 00:29:03,600 --> 00:29:06,160 Speaker 8: ideas in your mind, which is, on the one hand, 569 00:29:06,880 --> 00:29:09,320 Speaker 8: Trump is pleased with the outcome of the removal of 570 00:29:09,400 --> 00:29:12,800 Speaker 8: Nicholas Maduro, But who stays at top of Venezuela right 571 00:29:12,800 --> 00:29:16,800 Speaker 8: now while It'sdelsia Rodriguez his number two, somebody who herself 572 00:29:16,880 --> 00:29:20,040 Speaker 8: is under sanctioned by the US. And that's what we're 573 00:29:20,040 --> 00:29:23,160 Speaker 8: seeing unfold And the big question, Tom, which is what 574 00:29:23,160 --> 00:29:25,800 Speaker 8: you were just hitting on, is about political risk and 575 00:29:25,840 --> 00:29:28,320 Speaker 8: sort of the classic sense of political risk. Why is 576 00:29:28,360 --> 00:29:30,320 Speaker 8: the market not yet responding? Well, there's not that much 577 00:29:30,440 --> 00:29:34,760 Speaker 8: vulnerable investable assets in Venezuela at this moment in time. 578 00:29:35,240 --> 00:29:38,080 Speaker 8: But the question is our investors going to go back in? 579 00:29:38,120 --> 00:29:39,760 Speaker 8: And Trump certainly hopes the answers yes. 580 00:29:39,800 --> 00:29:43,000 Speaker 2: I mean I really get emotional folks when I walk 581 00:29:43,080 --> 00:29:46,200 Speaker 2: by in any given town some memorial to the people 582 00:29:46,720 --> 00:29:52,160 Speaker 2: who participated, injured, died in Vietnam, and they call it 583 00:29:52,200 --> 00:29:57,480 Speaker 2: a conflict, which drives me absolutely call it okay. So 584 00:29:57,520 --> 00:30:00,719 Speaker 2: there's Alexus with the proper question, lindsay, knew, what do 585 00:30:00,760 --> 00:30:03,280 Speaker 2: you call this stuff? Is this like, are we doing 586 00:30:03,360 --> 00:30:07,120 Speaker 2: police actions with our military? Yeah? 587 00:30:07,160 --> 00:30:08,960 Speaker 8: And Tom, Looking in my line of work, there is 588 00:30:08,960 --> 00:30:11,960 Speaker 8: a difference between war and conflict, and words matter. When 589 00:30:12,000 --> 00:30:14,800 Speaker 8: you say things like tension, it's very different than you know, 590 00:30:14,960 --> 00:30:17,880 Speaker 8: riots and vandalism and violent riots is a very different 591 00:30:17,920 --> 00:30:20,200 Speaker 8: thing than protests, for example, when we look at in 592 00:30:20,240 --> 00:30:22,920 Speaker 8: the case of Iran, it's a very relevant conversation to 593 00:30:22,960 --> 00:30:25,360 Speaker 8: be had. Look, this is a world in which you know, 594 00:30:25,520 --> 00:30:28,360 Speaker 8: we knew Trump and his administration were going to be 595 00:30:28,400 --> 00:30:31,320 Speaker 8: more ambitious this time around. It depends where you know, 596 00:30:31,360 --> 00:30:34,320 Speaker 8: whether you approve of or you like what he's doing. 597 00:30:34,600 --> 00:30:36,960 Speaker 8: We knew when he set out that executive orders on 598 00:30:37,080 --> 00:30:40,000 Speaker 8: day one in office about foreign policy. This is not 599 00:30:40,040 --> 00:30:43,440 Speaker 8: an America First that's isolationist. This is an America first 600 00:30:43,440 --> 00:30:46,160 Speaker 8: that is looking to remake the world in the image 601 00:30:46,200 --> 00:30:49,000 Speaker 8: of what Donald Trump and his administration view as how 602 00:30:49,040 --> 00:30:51,120 Speaker 8: it should be. That's what we see going on right 603 00:30:51,120 --> 00:30:56,160 Speaker 8: now in Greenland, Venezuela, all these locations where there is activity, 604 00:30:56,480 --> 00:31:00,360 Speaker 8: whether it is hot activity or whether it's diplomas, that's 605 00:31:00,360 --> 00:31:02,640 Speaker 8: happening right now. But the point being is that this 606 00:31:02,680 --> 00:31:06,280 Speaker 8: administration is using a vast array of tools in its toolkit, 607 00:31:06,440 --> 00:31:09,840 Speaker 8: not just sanctions and tariffs like we saw during the 608 00:31:09,880 --> 00:31:13,959 Speaker 8: first Trump administration, but it has demonstrated a willingness to 609 00:31:14,320 --> 00:31:16,480 Speaker 8: force posture and to deploy force. 610 00:31:17,160 --> 00:31:20,200 Speaker 4: Lindsay, there's this decision now, at least for the moment, 611 00:31:20,880 --> 00:31:24,920 Speaker 4: a military action has been paused against Iran. So the 612 00:31:25,040 --> 00:31:27,760 Speaker 4: US now turning to economic pressure on Iran, rolling out 613 00:31:28,000 --> 00:31:32,480 Speaker 4: a host of new sanctions. Is that going to get 614 00:31:32,520 --> 00:31:35,600 Speaker 4: the job done? What kind of sanctions are we looking 615 00:31:35,640 --> 00:31:37,479 Speaker 4: at to move the needle here with Iran? 616 00:31:38,600 --> 00:31:40,640 Speaker 8: Yeah, Alex, this is, as you rightfully point out, the 617 00:31:40,680 --> 00:31:44,080 Speaker 8: Trump administration imposed twenty five percent secondary tariffs this week 618 00:31:44,120 --> 00:31:48,280 Speaker 8: and then just yesterday imposed fairly limited sanctions on targeted 619 00:31:48,280 --> 00:31:52,920 Speaker 8: individuals within the Iran regime. The story here is that 620 00:31:53,600 --> 00:31:55,800 Speaker 8: it seems as though we were very close to a 621 00:31:55,840 --> 00:31:58,600 Speaker 8: limited military action going ahead in the middle of this week, 622 00:31:58,920 --> 00:32:01,480 Speaker 8: that at the last moment, and there was an intervention 623 00:32:01,760 --> 00:32:04,280 Speaker 8: for Trump that suggested, you know, this was not going 624 00:32:04,320 --> 00:32:06,040 Speaker 8: to reach its aims and there was going to be 625 00:32:06,480 --> 00:32:09,600 Speaker 8: vulnerability for USUS. It's a person on the region. This 626 00:32:09,720 --> 00:32:11,280 Speaker 8: is not the end of the story. We know that 627 00:32:11,320 --> 00:32:14,800 Speaker 8: the USS Abraham Lincoln is moving within the region as 628 00:32:14,800 --> 00:32:18,440 Speaker 8: we speak. But the issue here is a lot of 629 00:32:18,480 --> 00:32:21,040 Speaker 8: this rest. Now the ball is somewhat in Iran's court. 630 00:32:21,400 --> 00:32:24,480 Speaker 8: Roan is somewhat in a double bind because now that 631 00:32:25,240 --> 00:32:28,920 Speaker 8: the pressure is sort of alleviated, what will Iran do 632 00:32:29,080 --> 00:32:31,680 Speaker 8: as people leave their homes and the Internet comes back on. 633 00:32:32,000 --> 00:32:35,320 Speaker 8: They will have to continue to apply repression. That is 634 00:32:35,360 --> 00:32:38,320 Speaker 8: their only lever right now. And if doing so means 635 00:32:38,320 --> 00:32:41,160 Speaker 8: that the US continues to watch and then say well 636 00:32:41,280 --> 00:32:44,040 Speaker 8: this is no longer acceptable, then we can still be 637 00:32:44,080 --> 00:32:47,280 Speaker 8: back in the world of some sort of action. 638 00:32:47,320 --> 00:32:49,880 Speaker 2: Can I do a nerd academic question? Well, please do, 639 00:32:50,160 --> 00:32:54,240 Speaker 2: and now clothes for Lindsay Newman at King's College, London, lindsay, 640 00:32:54,400 --> 00:32:57,560 Speaker 2: what is it like to work in a program with 641 00:32:57,680 --> 00:33:02,640 Speaker 2: the halo of Sir Lawrence Friedman and merediths hovering over you? 642 00:33:02,680 --> 00:33:06,520 Speaker 2: At King's College? He owns the high ground of this 643 00:33:06,600 --> 00:33:11,920 Speaker 2: analysis what's like working there with emeredis Professor Lawrence Friedman. 644 00:33:13,000 --> 00:33:16,360 Speaker 8: Well, obviously it goes without saying, you know that he is, 645 00:33:16,920 --> 00:33:19,200 Speaker 8: you know, one of the greats, and I am a 646 00:33:19,280 --> 00:33:22,280 Speaker 8: visiting research fellow. So my affiliation is, you know, fairly 647 00:33:22,280 --> 00:33:24,520 Speaker 8: flexible and quite I have quite a lot of freedom 648 00:33:24,560 --> 00:33:26,240 Speaker 8: in what I do. But it's you know, it's a 649 00:33:26,240 --> 00:33:29,760 Speaker 8: wonderful institution that has been at the forefront of all 650 00:33:29,800 --> 00:33:31,840 Speaker 8: forms of these, you know, all forms of conflict and 651 00:33:31,880 --> 00:33:34,520 Speaker 8: war as we were talking about earlier and thinking around 652 00:33:34,560 --> 00:33:36,760 Speaker 8: that for for you know, as long as as long 653 00:33:36,800 --> 00:33:37,520 Speaker 8: as we've been doing this. 654 00:33:37,760 --> 00:33:40,400 Speaker 2: I can't say enough folks about Lawrence Freedman. I've done 655 00:33:40,400 --> 00:33:42,080 Speaker 2: a bunch of things with them over the years, and 656 00:33:42,120 --> 00:33:46,000 Speaker 2: with Thomas Shelling at Maryland and at Harvard, I mean, 657 00:33:46,160 --> 00:33:49,360 Speaker 2: Thomas Shelling and Lawrence Friedman on the high ground on 658 00:33:49,560 --> 00:33:52,400 Speaker 2: conflict and war. Lindsey Newman, thank you so much for 659 00:33:52,480 --> 00:33:53,000 Speaker 2: joining us. 660 00:33:53,480 --> 00:33:58,320 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 661 00:33:58,440 --> 00:34:02,240 Speaker 1: and anywhere else you get your podcasts. Listen live each 662 00:34:02,240 --> 00:34:06,200 Speaker 1: weekday seven to ten am Eastern on Bloomberg dot Com, 663 00:34:06,240 --> 00:34:10,040 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 664 00:34:10,320 --> 00:34:13,400 Speaker 1: You can also watch us live every weekday on YouTube 665 00:34:13,760 --> 00:34:15,760 Speaker 1: and always on the Bloomberg Terminal