1 00:00:00,080 --> 00:00:13,040 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane 2 00:00:13,480 --> 00:00:17,560 Speaker 1: jay Ley. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:29,000 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. It's 5 00:00:29,080 --> 00:00:32,280 Speaker 1: always good when Julian Emmanuel comes into with BT I 6 00:00:32,400 --> 00:00:36,479 Speaker 1: g here at the Bloomberg Interactive Broker Studios because if 7 00:00:36,520 --> 00:00:39,720 Speaker 1: you go through his research note he writes he doesn't 8 00:00:39,760 --> 00:00:42,640 Speaker 1: write like a fourteen page special where you're you know, 9 00:00:42,880 --> 00:00:45,040 Speaker 1: you're like god, I we should write shorter. There are 10 00:00:45,080 --> 00:00:48,960 Speaker 1: these little gorgeous bursts. Let's start with a look back. 11 00:00:49,560 --> 00:00:52,839 Speaker 1: It was a bear market. A lot of people aren't 12 00:00:52,840 --> 00:00:56,200 Speaker 1: saying that. They're saying it was just Q four, but 13 00:00:56,280 --> 00:00:58,800 Speaker 1: it was a real bear market, no question about it. 14 00:00:58,880 --> 00:01:01,280 Speaker 1: And and from our point, if you that's part of 15 00:01:01,320 --> 00:01:04,679 Speaker 1: the story of why the rebound the first six months 16 00:01:04,680 --> 00:01:07,560 Speaker 1: of this year has been you know, so strong and 17 00:01:07,600 --> 00:01:09,800 Speaker 1: has caught a lot of people by is the rebound 18 00:01:09,800 --> 00:01:12,960 Speaker 1: And this goes back a fancy technical analysis, a bounce 19 00:01:13,280 --> 00:01:19,160 Speaker 1: in a an intermediate bounce within a bear market. Uh No, 20 00:01:19,560 --> 00:01:21,920 Speaker 1: we actually think that if you look at it the 21 00:01:22,200 --> 00:01:29,679 Speaker 1: big picture since the bottom in two thousand and nine. 22 00:01:29,319 --> 00:01:33,640 Speaker 1: You might remember them. I do remember, um, the two 23 00:01:33,880 --> 00:01:37,120 Speaker 1: d week moving average has been the support line for 24 00:01:37,160 --> 00:01:39,880 Speaker 1: every one of these sell offs you touched right from that. 25 00:01:40,000 --> 00:01:43,600 Speaker 1: So from our point of view, the the secular bowl 26 00:01:43,640 --> 00:01:49,240 Speaker 1: market is intact pending further developments. But that's the default, 27 00:01:49,240 --> 00:01:52,320 Speaker 1: all right. So the SMPS up six percent plus a 28 00:01:52,400 --> 00:01:55,560 Speaker 1: year to date. One of the areas that has really 29 00:01:55,680 --> 00:01:58,960 Speaker 1: lagged has been energy. Is there any love there? I 30 00:01:58,960 --> 00:02:00,400 Speaker 1: know there's been some M and A in the space 31 00:02:00,440 --> 00:02:03,400 Speaker 1: people looking for value, but for the average investor, is 32 00:02:03,400 --> 00:02:05,400 Speaker 1: there anything in the energy space that you think they 33 00:02:05,440 --> 00:02:08,720 Speaker 1: should be looking at? Well? I think you are now 34 00:02:08,919 --> 00:02:11,519 Speaker 1: under five percent of the weight in the S and 35 00:02:11,560 --> 00:02:14,920 Speaker 1: P five in the energy space. You are, you know, 36 00:02:15,200 --> 00:02:18,280 Speaker 1: knocking on the door of sixty dollars w t I. 37 00:02:18,919 --> 00:02:23,560 Speaker 1: The fact that geopolitical tension looks to be rising, not 38 00:02:23,800 --> 00:02:29,000 Speaker 1: declining UM against the backdrop of if you actually have 39 00:02:29,360 --> 00:02:32,560 Speaker 1: some sort of at least repproach mont of of a 40 00:02:32,600 --> 00:02:35,920 Speaker 1: sort this weekend in Osaka, the likelihood is the is 41 00:02:35,919 --> 00:02:39,280 Speaker 1: the global economy will be backstop and it's a very 42 00:02:39,320 --> 00:02:45,519 Speaker 1: positive situation for energy shares. Totally unloved. Are they what's 43 00:02:45,560 --> 00:02:47,520 Speaker 1: the valuation here? I mean, this is something where I 44 00:02:47,520 --> 00:02:49,720 Speaker 1: feel like, you know, they're pricing in a lot of 45 00:02:49,800 --> 00:02:52,560 Speaker 1: risk here. There's uncertainty about where oil is gonna go. 46 00:02:52,600 --> 00:02:54,120 Speaker 1: Am I getting if I go in here? Am I 47 00:02:54,120 --> 00:02:57,359 Speaker 1: getting in a good valuation? Do you think it's It's 48 00:02:57,400 --> 00:03:01,720 Speaker 1: sort of fair? Um. But but what's important is is 49 00:03:02,200 --> 00:03:06,959 Speaker 1: at the energy stocks have had a historical tendency to 50 00:03:07,360 --> 00:03:10,440 Speaker 1: you know, at least play along with the oil price 51 00:03:10,960 --> 00:03:14,160 Speaker 1: um or if not outperformed on the upside and under 52 00:03:14,160 --> 00:03:17,360 Speaker 1: perform on the downside, they are more volatile. You haven't 53 00:03:17,360 --> 00:03:20,000 Speaker 1: seen that this cycle. And so from our point of view, 54 00:03:20,120 --> 00:03:22,799 Speaker 1: when you think about the fact that there is a 55 00:03:23,000 --> 00:03:25,799 Speaker 1: capital allocation going on in the former event M and 56 00:03:25,880 --> 00:03:29,160 Speaker 1: A and buy backs, it's an area that to us 57 00:03:29,560 --> 00:03:32,400 Speaker 1: is likely having under consolidation. I put you in a 58 00:03:32,440 --> 00:03:35,680 Speaker 1: group with our Gina Martin Adams at Bloomberg Intelligence and 59 00:03:35,680 --> 00:03:37,920 Speaker 1: that you've encouraged to be in. The markets are thick 60 00:03:37,960 --> 00:03:41,160 Speaker 1: and thin. There's been nuances of a Julian a manual view. 61 00:03:41,240 --> 00:03:44,080 Speaker 1: But you've been You've been in the game since Leam 62 00:03:44,160 --> 00:03:48,640 Speaker 1: and Lowe. Okay, great rejustify now why I need to 63 00:03:48,720 --> 00:03:51,920 Speaker 1: own shares, not sell the shares I own, and even 64 00:03:51,960 --> 00:03:54,640 Speaker 1: put new cash to work. I mean, set out the 65 00:03:54,720 --> 00:03:57,760 Speaker 1: next twenty four months of why I need to be 66 00:03:57,800 --> 00:04:01,160 Speaker 1: in the market because there is likely to be a recession. 67 00:04:01,240 --> 00:04:05,040 Speaker 1: Number one and and you know true bear markets are 68 00:04:05,760 --> 00:04:08,720 Speaker 1: He's better looking than Tony Dwyer. Yeah, I mean, I 69 00:04:08,720 --> 00:04:12,360 Speaker 1: mean he sounds like Tony Dwyer of candicaltinuity, but but 70 00:04:12,440 --> 00:04:16,279 Speaker 1: he's better looking. Continue and again think about it. We 71 00:04:16,400 --> 00:04:19,320 Speaker 1: know there isn't going to be a recession because President Trump, 72 00:04:19,640 --> 00:04:23,040 Speaker 1: like every other president at this point in their cycle 73 00:04:23,080 --> 00:04:27,039 Speaker 1: in office, is thinking behind every decision, how do I 74 00:04:27,160 --> 00:04:30,599 Speaker 1: get reelected? And the way you get collected is making 75 00:04:30,640 --> 00:04:34,480 Speaker 1: sure the economy keeps growing and against interest rates. At 76 00:04:34,480 --> 00:04:38,520 Speaker 1: this level, stocks represent values? Could they represent? Is it 77 00:04:38,640 --> 00:04:41,680 Speaker 1: because they're great or because there's no place else to 78 00:04:41,839 --> 00:04:45,599 Speaker 1: go with my money? I think that's been part of 79 00:04:45,640 --> 00:04:49,320 Speaker 1: the message of the last several months, particularly given our 80 00:04:49,400 --> 00:04:53,360 Speaker 1: clients have become much more concerned with global yields ten 81 00:04:53,480 --> 00:04:56,839 Speaker 1: years out, thirty years out, a hundred years out being 82 00:04:56,880 --> 00:04:59,760 Speaker 1: as low as they are. See how Greenfield's trained himself. 83 00:05:00,320 --> 00:05:02,440 Speaker 1: He comes in here from bt I G and he's 84 00:05:02,440 --> 00:05:06,120 Speaker 1: got on the ready and blue striped. So we don't 85 00:05:06,160 --> 00:05:10,159 Speaker 1: know what the politics evolves given the debate at all. 86 00:05:10,440 --> 00:05:12,320 Speaker 1: So Julian, if i'm you know, we're looking at these 87 00:05:12,400 --> 00:05:14,200 Speaker 1: yields that are you know, around the world, you know, 88 00:05:14,240 --> 00:05:16,839 Speaker 1: it's just so low no matter where you look. Do 89 00:05:16,880 --> 00:05:18,520 Speaker 1: I need to go to emerging markets here to get 90 00:05:18,520 --> 00:05:22,080 Speaker 1: some return, get some yield? Well, we think emerging markets 91 00:05:22,080 --> 00:05:25,120 Speaker 1: are interesting here simply because there's a lot of reasons 92 00:05:25,480 --> 00:05:28,440 Speaker 1: to think that the dollar has come off the boil um, 93 00:05:28,520 --> 00:05:31,640 Speaker 1: and the FED certainly is one of them. But again, 94 00:05:32,200 --> 00:05:35,080 Speaker 1: the way we're looking at look the event risk over 95 00:05:35,120 --> 00:05:38,040 Speaker 1: the next number of days is that you're reasonably fully 96 00:05:38,080 --> 00:05:40,240 Speaker 1: priced in the near term in the S and P five. 97 00:05:41,080 --> 00:05:43,599 Speaker 1: Things don't move in a straight line. They haven't for 98 00:05:43,640 --> 00:05:47,040 Speaker 1: the last two years. But in places like China, there 99 00:05:47,240 --> 00:05:50,920 Speaker 1: is upside um in the event that there is at 100 00:05:50,960 --> 00:05:55,280 Speaker 1: least a reasonable sense of a possible deal healthcare. I 101 00:05:55,320 --> 00:05:58,080 Speaker 1: have no idea where the regulatory framework is going to 102 00:05:58,120 --> 00:06:01,240 Speaker 1: go for healthcare. I've got Canada. It's on stage saying, 103 00:06:01,360 --> 00:06:02,920 Speaker 1: you know, we need to do this with health care, 104 00:06:02,920 --> 00:06:04,919 Speaker 1: We need to do that with healthcare. It seems like 105 00:06:04,960 --> 00:06:08,960 Speaker 1: there's a tremendous amount of regulatory and political overhang for healthcare. 106 00:06:09,520 --> 00:06:11,960 Speaker 1: Do I even dare get my toe into that space? 107 00:06:12,400 --> 00:06:18,760 Speaker 1: So unlike the last election cycle, healthcare came into the 108 00:06:18,800 --> 00:06:22,480 Speaker 1: cycle expensive and it had a very good run. Not 109 00:06:22,640 --> 00:06:25,360 Speaker 1: the case this time. Healthcare is cheap on both an 110 00:06:25,400 --> 00:06:28,599 Speaker 1: absolute and relative basis. So from our point of view, 111 00:06:28,600 --> 00:06:30,920 Speaker 1: when you think about the fact that at least over 112 00:06:30,960 --> 00:06:35,280 Speaker 1: the next year, the likelihood of legislation is reasonably low 113 00:06:35,600 --> 00:06:38,920 Speaker 1: because of gridlock, because of the election cycle, we think 114 00:06:39,480 --> 00:06:42,760 Speaker 1: you nibble on healthcare. Here we're overweight. I want to 115 00:06:42,800 --> 00:06:45,200 Speaker 1: go to my good Friendship Cramer over at the Dust 116 00:06:45,200 --> 00:06:50,599 Speaker 1: Star CNBC. He was brilliant the other night talking about derivatives, 117 00:06:50,600 --> 00:06:54,880 Speaker 1: which is your expertise, Julian, and the addiction people have 118 00:06:55,080 --> 00:06:59,120 Speaker 1: of using put options to protect their gains and to 119 00:06:59,200 --> 00:07:02,320 Speaker 1: protect their position. And Jim of course was saying, this 120 00:07:02,360 --> 00:07:05,080 Speaker 1: is a really good way to spend away your gains. 121 00:07:05,560 --> 00:07:09,000 Speaker 1: You put out money on the put to protect your gains, 122 00:07:09,279 --> 00:07:11,320 Speaker 1: and you've got to keep doing it every ninety days 123 00:07:11,320 --> 00:07:14,480 Speaker 1: and becomes an addiction and the gains vaporized. Do you 124 00:07:14,480 --> 00:07:17,680 Speaker 1: agree with that view? I I'm clearly in the camp 125 00:07:17,720 --> 00:07:21,880 Speaker 1: with Jim on this put options and options strategy in 126 00:07:21,920 --> 00:07:25,600 Speaker 1: general definitely have their place, but for the average buy 127 00:07:25,680 --> 00:07:29,280 Speaker 1: and hold investor, it's not really the way to go 128 00:07:30,280 --> 00:07:33,600 Speaker 1: because you're a long term thinker, and if you're rolling 129 00:07:33,720 --> 00:07:37,080 Speaker 1: something over and you're paying attention to the screen every day, 130 00:07:37,200 --> 00:07:40,240 Speaker 1: what's the price might put? You lose sight of the 131 00:07:40,240 --> 00:07:43,120 Speaker 1: bigger picture. And the bigger picture is that the equity 132 00:07:43,160 --> 00:07:45,840 Speaker 1: markets have been rising for ten years. There isn't going 133 00:07:45,880 --> 00:07:48,320 Speaker 1: to be a recession, and we expect jump in here. 134 00:07:48,360 --> 00:07:50,960 Speaker 1: This is important. And it's also I got to redo 135 00:07:51,000 --> 00:07:54,600 Speaker 1: the put every X number of weeks months and that 136 00:07:54,680 --> 00:07:57,480 Speaker 1: costs me a price, And am I right? I lose 137 00:07:57,720 --> 00:08:01,720 Speaker 1: a bit some most of alpha of your proprietary of 138 00:08:01,800 --> 00:08:04,600 Speaker 1: your potential, of your gain on your core position. I 139 00:08:04,680 --> 00:08:06,000 Speaker 1: think you know, what I've heard from a lot of 140 00:08:06,040 --> 00:08:08,440 Speaker 1: investors is, you know, just have a you know, discipline 141 00:08:08,480 --> 00:08:11,120 Speaker 1: trading strategy. At the stocks down xpercent, I do this, 142 00:08:11,200 --> 00:08:13,400 Speaker 1: it is down this, I I do that as opposed 143 00:08:13,440 --> 00:08:17,120 Speaker 1: to get paying for options unless you're gonna be actively trading. 144 00:08:17,120 --> 00:08:19,960 Speaker 1: I guess you know, right, And and again you know, 145 00:08:20,040 --> 00:08:21,840 Speaker 1: there are plenty of people that we talked to that 146 00:08:21,840 --> 00:08:25,520 Speaker 1: are very active traders, and there's a definite use for 147 00:08:25,600 --> 00:08:28,680 Speaker 1: options in the portfolio strategy. But for the most part, 148 00:08:28,720 --> 00:08:32,040 Speaker 1: what we've said throughout this bullmarket is that you need 149 00:08:32,080 --> 00:08:36,000 Speaker 1: to envision yourself to be a buyer down ten to 150 00:08:36,080 --> 00:08:39,160 Speaker 1: fiftcent in the market. And if you can't say that 151 00:08:39,240 --> 00:08:42,440 Speaker 1: now this close to the highs, then the strategy is 152 00:08:42,720 --> 00:08:49,680 Speaker 1: trim a little bit of your whole things. You'll sleep better. Yeah, Tom, 153 00:08:49,960 --> 00:08:53,920 Speaker 1: Tom's triple cash, you know, triple so you know, I 154 00:08:54,080 --> 00:08:57,360 Speaker 1: really don't care, but but I think it's a really 155 00:08:57,880 --> 00:09:00,720 Speaker 1: I mean, people are sold this. It's a call writing 156 00:09:00,760 --> 00:09:03,520 Speaker 1: the soul this thing every day and I'm like it, 157 00:09:03,600 --> 00:09:05,960 Speaker 1: As you mentioned, I was like, where's the math and 158 00:09:06,040 --> 00:09:09,240 Speaker 1: the answers? The mask not there once you're right, but 159 00:09:09,360 --> 00:09:12,200 Speaker 1: the other seven times you're you're buying a put up. 160 00:09:12,280 --> 00:09:14,680 Speaker 1: Shein't got nothing to do with right, which which actually 161 00:09:15,160 --> 00:09:18,600 Speaker 1: for for people that you know, have that view that 162 00:09:19,040 --> 00:09:21,440 Speaker 1: on a one or two month time frame, you know 163 00:09:21,520 --> 00:09:24,920 Speaker 1: you want to hedge. We tend to like things, you know, 164 00:09:25,000 --> 00:09:27,720 Speaker 1: where you're selling an option and buying an option. Julian 165 00:09:27,720 --> 00:09:45,120 Speaker 1: Emmanuel bt I G thank you for that satisfaction. We 166 00:09:45,160 --> 00:09:48,239 Speaker 1: need to go to a soccer Japan. Now for team coverage, 167 00:09:48,559 --> 00:09:50,360 Speaker 1: we do that with our Sean Donna and working for 168 00:09:50,400 --> 00:09:53,560 Speaker 1: Brendan Murray with really one of the toughest speeds at Bloomberg, 169 00:09:53,640 --> 00:09:56,200 Speaker 1: which is the whole international trade thing. So we go 170 00:09:56,280 --> 00:10:00,560 Speaker 1: to Sean Donna. Now on Red Sox Yankees baseball in London. Sean, 171 00:10:00,640 --> 00:10:02,560 Speaker 1: what do you think I mean? I watched the Red 172 00:10:02,559 --> 00:10:05,280 Speaker 1: Sox White Sox last night is an afternoon game, and 173 00:10:05,280 --> 00:10:08,320 Speaker 1: I watched it. Sales lost it. Have you given up 174 00:10:08,320 --> 00:10:11,640 Speaker 1: on the Red Sox for this season? Sean? Oh, that's 175 00:10:11,640 --> 00:10:14,040 Speaker 1: a tough question to lead me in with Tom, I'm 176 00:10:14,040 --> 00:10:16,960 Speaker 1: a longtime Red Sox fan. You clearly picked up on that. 177 00:10:17,440 --> 00:10:20,199 Speaker 1: I Uh, like, this is just not the season, is it. 178 00:10:20,200 --> 00:10:22,280 Speaker 1: It's a it's a tough one for the Red Sox. See, 179 00:10:22,320 --> 00:10:24,200 Speaker 1: I used to live in London. I would have loved 180 00:10:24,200 --> 00:10:27,040 Speaker 1: taking my kid to see that game. Uh in London. 181 00:10:27,200 --> 00:10:30,600 Speaker 1: But my kid and I were trading text messages yesterday 182 00:10:30,640 --> 00:10:33,600 Speaker 1: and neither of us is too confident in the series. 183 00:10:33,640 --> 00:10:36,840 Speaker 1: Are we too confident going into the match in Osaka? 184 00:10:36,960 --> 00:10:40,240 Speaker 1: We've got on Saturday an exceptional meeting and the breaking 185 00:10:40,280 --> 00:10:43,800 Speaker 1: news at Huawei is now part of the discussion how 186 00:10:43,800 --> 00:10:47,840 Speaker 1: will the US team react to the Chinese insistence that 187 00:10:47,960 --> 00:10:51,400 Speaker 1: Huawei be part of the discussion. Well, I think we 188 00:10:51,520 --> 00:10:53,280 Speaker 1: I think first of all, we got a big question here, 189 00:10:53,320 --> 00:10:56,480 Speaker 1: and that is whether these preconditions that the Wall Street 190 00:10:56,559 --> 00:11:00,679 Speaker 1: Journal is reporting are really preconditions for or a bigger 191 00:11:00,760 --> 00:11:04,120 Speaker 1: grand bargain. That's something that will come later. What we're 192 00:11:04,160 --> 00:11:06,960 Speaker 1: really expecting, what we've been leading up to here in 193 00:11:07,600 --> 00:11:10,760 Speaker 1: uh in Osak, and we expect to happen on Saturday. Still, 194 00:11:10,800 --> 00:11:13,679 Speaker 1: I think is U is a is a short term truce, 195 00:11:13,800 --> 00:11:17,160 Speaker 1: that's a resumption of talks of pausing tariffs uh and 196 00:11:17,240 --> 00:11:20,480 Speaker 1: another effort to try and and push and see a deal. 197 00:11:20,520 --> 00:11:24,320 Speaker 1: There's no doubt that the Chinese want to see Huawei 198 00:11:24,520 --> 00:11:27,800 Speaker 1: um addressed as part of that. But I think it's 199 00:11:27,840 --> 00:11:30,080 Speaker 1: pretty clear from the U S side that President Trump 200 00:11:30,080 --> 00:11:32,240 Speaker 1: would be under a lot of pressure are and would 201 00:11:32,240 --> 00:11:36,240 Speaker 1: be heavily criticized were he to abandon the case against 202 00:11:36,320 --> 00:11:39,280 Speaker 1: Huawei in the next forty eight hours just to get 203 00:11:39,559 --> 00:11:42,240 Speaker 1: some more talks with the Chinese. So Sean, I mean, 204 00:11:42,280 --> 00:11:46,000 Speaker 1: from the Chinese perspective, what would they consider to be 205 00:11:46,160 --> 00:11:49,640 Speaker 1: a successful G twenty are they would they be equally 206 00:11:49,679 --> 00:11:52,120 Speaker 1: as content with just kicking the can down the road. 207 00:11:54,000 --> 00:11:57,040 Speaker 1: I think at this point both sides really do want 208 00:11:57,040 --> 00:11:59,400 Speaker 1: to see a pause in this's and and a bit 209 00:11:59,440 --> 00:12:02,360 Speaker 1: of a cease fire, a bit of a regrouping on 210 00:12:02,440 --> 00:12:05,440 Speaker 1: both sides. We know the Chinese and negotiating team has 211 00:12:05,480 --> 00:12:08,120 Speaker 1: been going through some some revamping. They've run in some 212 00:12:08,200 --> 00:12:12,200 Speaker 1: new players. Uh. Some senior administration officials on the U 213 00:12:12,280 --> 00:12:15,079 Speaker 1: s I have been noting that in the last few days, 214 00:12:16,080 --> 00:12:21,360 Speaker 1: we know that neither side is ready for a full 215 00:12:21,360 --> 00:12:25,480 Speaker 1: blown escalation uh and the kind of final market, the 216 00:12:25,600 --> 00:12:29,559 Speaker 1: negative financial market reaction that you'd likely get from that. 217 00:12:29,679 --> 00:12:32,800 Speaker 1: So they want to manage the markets in the next 218 00:12:32,800 --> 00:12:35,200 Speaker 1: four y eight hours as much as anything. And that 219 00:12:35,280 --> 00:12:37,520 Speaker 1: applies to both of them, I think. But at the 220 00:12:37,640 --> 00:12:40,360 Speaker 1: end of the day, both these leaders Donald Trump and 221 00:12:40,400 --> 00:12:42,760 Speaker 1: chij and Ping need to come out of this looking 222 00:12:42,880 --> 00:12:46,080 Speaker 1: strong for their domestic audiences. They need to make sure 223 00:12:46,120 --> 00:12:50,280 Speaker 1: that they haven't given in or surrendered anything at the 224 00:12:50,280 --> 00:12:55,079 Speaker 1: table here in Osaka. Is this some multilateral meeting? I mean, 225 00:12:55,120 --> 00:12:59,160 Speaker 1: have we given up the Pittsburgh, the G twenty Pittsburgh 226 00:12:59,160 --> 00:13:05,360 Speaker 1: of President Obama and we just is multilateral done? That's 227 00:13:05,360 --> 00:13:08,000 Speaker 1: a really good question. Donald Trump certainly and the people 228 00:13:08,040 --> 00:13:11,320 Speaker 1: around him like John Bolton, would certainly like multilateralism to 229 00:13:11,400 --> 00:13:16,120 Speaker 1: be a done deal. But there's still the rest of 230 00:13:16,160 --> 00:13:18,040 Speaker 1: the world, and the rest of the world still want 231 00:13:18,240 --> 00:13:21,679 Speaker 1: is still pretty heavily invested in these things, including the 232 00:13:22,360 --> 00:13:27,240 Speaker 1: hosts here this week, Japan and Shinzo Abe, who has 233 00:13:27,280 --> 00:13:30,760 Speaker 1: really put a lot of effort into into getting some 234 00:13:30,840 --> 00:13:33,320 Speaker 1: kind of result out of this. But there's no doubt 235 00:13:33,400 --> 00:13:35,400 Speaker 1: that the big message we're all going to be taken 236 00:13:35,440 --> 00:13:39,000 Speaker 1: away from this is that it's the G two that matters. 237 00:13:39,120 --> 00:13:41,640 Speaker 1: It's it's the U S and China and and the 238 00:13:41,640 --> 00:13:45,680 Speaker 1: rest of the world is really just watching them and 239 00:13:45,720 --> 00:13:48,160 Speaker 1: trying to figure out where they're doing. So, Sean, let's 240 00:13:48,160 --> 00:13:49,959 Speaker 1: assume we we do the kick the can down down 241 00:13:50,000 --> 00:13:53,120 Speaker 1: the road. Is there any scenario or how likely do 242 00:13:53,120 --> 00:13:55,400 Speaker 1: you think we get a meaningful trade deal in a 243 00:13:55,480 --> 00:14:01,240 Speaker 1: relatively near future between us, like five years. I think 244 00:14:01,320 --> 00:14:04,839 Speaker 1: five years you might get to something. I look what 245 00:14:05,000 --> 00:14:08,920 Speaker 1: you're talking trade, Well, I think you know, the Red 246 00:14:08,960 --> 00:14:11,040 Speaker 1: Sox had had a big win last year and we're 247 00:14:11,040 --> 00:14:14,520 Speaker 1: still you know, we're still there, uh, and we're still 248 00:14:14,559 --> 00:14:18,440 Speaker 1: happy with that. I think Donald Trump still needs to 249 00:14:18,480 --> 00:14:21,640 Speaker 1: get a big win with China. Uh and Uh. I 250 00:14:21,680 --> 00:14:26,160 Speaker 1: think that still pays more political dividends for him going 251 00:14:26,200 --> 00:14:31,280 Speaker 1: into than a long grinded trade war and an escalation 252 00:14:31,480 --> 00:14:34,520 Speaker 1: that may batter to the U. S economy going into 253 00:14:34,560 --> 00:14:37,560 Speaker 1: the election. Sean, you're too young to remember Red Sox gloom, 254 00:14:37,560 --> 00:14:40,120 Speaker 1: true gloom. We leased to look. We didn't look back 255 00:14:40,120 --> 00:14:44,160 Speaker 1: to last year's Sean, we look back to six. It 256 00:14:44,280 --> 00:14:47,920 Speaker 1: was a few years eighteen. Listen to you. No, no, 257 00:14:47,960 --> 00:14:51,440 Speaker 1: not that, Sean, Thank you so much. Sean Donnan leading 258 00:14:51,440 --> 00:14:54,680 Speaker 1: all of our trade coverage in Osaka and a really 259 00:14:54,760 --> 00:14:58,520 Speaker 1: daunting Java. They'll be working through the weekend, no doubt 260 00:14:58,640 --> 00:15:13,400 Speaker 1: as well to bring in our next guest show. She's 261 00:15:13,440 --> 00:15:16,640 Speaker 1: cleared her schedule. Clear the schedule, they say. Her people 262 00:15:16,680 --> 00:15:19,200 Speaker 1: talk to our people, and she cleared her schedule. Let 263 00:15:19,200 --> 00:15:21,160 Speaker 1: me read this an entirety, Paul, to bring in a 264 00:15:21,240 --> 00:15:27,360 Speaker 1: qualified person. Power on the new flight deck displays new 265 00:15:27,440 --> 00:15:30,880 Speaker 1: large flight deck displays inside the first seven thirty seven 266 00:15:30,920 --> 00:15:35,040 Speaker 1: Max have now come to life, glowing panels, indicating that 267 00:15:35,160 --> 00:15:39,040 Speaker 1: power is now flowing through the first airplane on the 268 00:15:39,120 --> 00:15:43,480 Speaker 1: production line. Power on is an important mitlestone because it 269 00:15:43,560 --> 00:15:47,000 Speaker 1: is the first time systems on the airplane are integrated 270 00:15:47,760 --> 00:15:51,800 Speaker 1: and talking to each other, said Ms Kelly, seven thirty 271 00:15:51,840 --> 00:15:55,240 Speaker 1: seven Max flight at First Flight, leader for airplane development. 272 00:15:55,280 --> 00:15:57,520 Speaker 1: I have no idea what our title is. Power on 273 00:15:57,720 --> 00:16:01,880 Speaker 1: is a step in airplane production. It typically happens during 274 00:16:02,040 --> 00:16:06,000 Speaker 1: final assembly, after all sections of the airplane are brought 275 00:16:06,080 --> 00:16:11,840 Speaker 1: together and the wiring is connected it it's built, it's 276 00:16:11,840 --> 00:16:14,360 Speaker 1: ready to go. Turn on a switch and it's ready 277 00:16:14,360 --> 00:16:16,120 Speaker 1: to fly. But we have some problems with the seven 278 00:16:16,200 --> 00:16:19,880 Speaker 1: thirty seven Max, Brook Sutherland. She covers all things industrial 279 00:16:19,920 --> 00:16:22,880 Speaker 1: for Bloomberg Opinion. Brooke, thanks so much for joining us. Boy. 280 00:16:23,000 --> 00:16:26,760 Speaker 1: Paris seems like a lifetime ago. You know, it was 281 00:16:26,800 --> 00:16:30,040 Speaker 1: a good week for Boeing in Paris. I got sale 282 00:16:30,040 --> 00:16:33,600 Speaker 1: of two seven Max jets, maybe the beginning of a 283 00:16:33,680 --> 00:16:37,000 Speaker 1: turn there. Then we get news that there may be 284 00:16:37,080 --> 00:16:39,480 Speaker 1: more problems with the Max. What's the latest with Boeing. 285 00:16:39,720 --> 00:16:43,160 Speaker 1: So the latest report is it's another issue with the 286 00:16:43,240 --> 00:16:46,080 Speaker 1: flight computer on the seven seven Max. But this is 287 00:16:46,160 --> 00:16:50,359 Speaker 1: separate from that m CAST system, the Maneuvering Characteristics augmentation 288 00:16:50,440 --> 00:16:54,080 Speaker 1: system that was causing I didn't remember that written and 289 00:16:54,200 --> 00:16:58,600 Speaker 1: enough memorize that. But no, that was at the heart 290 00:16:58,640 --> 00:17:01,560 Speaker 1: of the two fatal crashes of airplane, both on the 291 00:17:01,560 --> 00:17:04,159 Speaker 1: Ethiopian Airline flight and the Lion air flight. Now, so 292 00:17:04,280 --> 00:17:07,920 Speaker 1: this is a separate issue, but again involving the software 293 00:17:07,960 --> 00:17:12,160 Speaker 1: again forcing that airplane into a dive downward. The last 294 00:17:12,160 --> 00:17:14,879 Speaker 1: thing you want to hear is another issue causing the 295 00:17:14,920 --> 00:17:18,119 Speaker 1: plane to unexpectedly dive in a way that pilots cannot 296 00:17:18,119 --> 00:17:21,159 Speaker 1: get a handle on exactly what is happening there. You 297 00:17:21,240 --> 00:17:23,560 Speaker 1: brought up the I a G order. They only signed 298 00:17:23,560 --> 00:17:25,680 Speaker 1: a letter of intent, so they do have a fair 299 00:17:25,680 --> 00:17:27,800 Speaker 1: amount of wiggle room to get out of that if 300 00:17:27,840 --> 00:17:30,560 Speaker 1: in fact there was something wrong with the Max. Airbus 301 00:17:30,640 --> 00:17:33,520 Speaker 1: has already said they would like very much to compete 302 00:17:33,560 --> 00:17:36,120 Speaker 1: for that order and to fill it. Um. So if 303 00:17:36,119 --> 00:17:38,199 Speaker 1: you're I A G right now, I have to be wondering, 304 00:17:38,240 --> 00:17:40,280 Speaker 1: you know how you feel about all of this, and 305 00:17:40,320 --> 00:17:42,720 Speaker 1: you they really sort of state their own credibility on 306 00:17:42,800 --> 00:17:44,800 Speaker 1: the Max. Maybe it's a question for the nerd at 307 00:17:44,800 --> 00:17:47,439 Speaker 1: the cel times it knows everything about all these planes. 308 00:17:47,440 --> 00:17:49,760 Speaker 1: It's unfair to you, Brooke, but I'm going to try. 309 00:17:50,040 --> 00:17:53,000 Speaker 1: Is there one computer on board? Because I remember the 310 00:17:53,000 --> 00:17:56,480 Speaker 1: Space Shuttle it has like five computer redundancy. How do 311 00:17:56,520 --> 00:17:59,480 Speaker 1: they actually I don't want to catch you unawares, But 312 00:17:59,760 --> 00:18:03,120 Speaker 1: how do they actually do this? There are different software 313 00:18:03,160 --> 00:18:05,879 Speaker 1: systems doing different things, and as you were talking about earlier, 314 00:18:05,920 --> 00:18:07,800 Speaker 1: they're meant to all talk to each other, but there 315 00:18:07,800 --> 00:18:10,560 Speaker 1: are different steps in this process. So my understanding is 316 00:18:10,600 --> 00:18:15,359 Speaker 1: the actual UM software system was you know, built by 317 00:18:15,520 --> 00:18:18,560 Speaker 1: Rockwell Collins, which is now in by United Technologies. But 318 00:18:18,600 --> 00:18:21,280 Speaker 1: Boeing set the criteria at least for m casts as 319 00:18:21,280 --> 00:18:23,240 Speaker 1: far as how that works, so how they wanted that 320 00:18:23,280 --> 00:18:26,920 Speaker 1: to actually UM you know, interact with the airplane. So 321 00:18:26,960 --> 00:18:29,199 Speaker 1: there's a lot of different steps involved here. But I 322 00:18:29,240 --> 00:18:32,360 Speaker 1: think you know, certainly in a time when you have 323 00:18:32,520 --> 00:18:35,280 Speaker 1: some concernation about whether or not planes are getting too 324 00:18:35,280 --> 00:18:41,639 Speaker 1: smart and getting to rudder Tom, there are some people 325 00:18:41,680 --> 00:18:43,159 Speaker 1: that think that you should. I mean, I think there 326 00:18:43,240 --> 00:18:45,520 Speaker 1: is a fine line between obviously you want software, you 327 00:18:45,560 --> 00:18:48,560 Speaker 1: want innovation, but you also fundamentally the pilots have to 328 00:18:48,560 --> 00:18:50,760 Speaker 1: be the ones ultimately in control of the airplane. What 329 00:18:50,880 --> 00:18:53,000 Speaker 1: you don't want is situations like what happened with these 330 00:18:53,040 --> 00:18:56,159 Speaker 1: Boeing systems, where it's they can't bring it back to 331 00:18:56,400 --> 00:18:58,280 Speaker 1: a point of control. Pick this up. But I want 332 00:18:58,280 --> 00:19:00,320 Speaker 1: to make clear and I don't have an in front 333 00:19:00,359 --> 00:19:03,359 Speaker 1: of me. I believe the news article today was a 334 00:19:03,440 --> 00:19:09,760 Speaker 1: pilot in simulator saying they simulated a catastrophic loss. Whatever 335 00:19:09,800 --> 00:19:14,000 Speaker 1: that means. Yeah, this is serious, I wondered Brooke. I think, 336 00:19:14,680 --> 00:19:16,920 Speaker 1: I guess it goes to if you're an investor saying, 337 00:19:16,920 --> 00:19:19,280 Speaker 1: when is the seven thirty seven going to be back 338 00:19:19,280 --> 00:19:20,720 Speaker 1: in the air. And I guess some of the recent 339 00:19:20,720 --> 00:19:22,439 Speaker 1: reports I had seen over the last several days were 340 00:19:22,440 --> 00:19:25,960 Speaker 1: suggesting maybe December. Do you think that's now at risk? 341 00:19:26,480 --> 00:19:29,120 Speaker 1: So the Bank of America analysts how to report out 342 00:19:29,119 --> 00:19:31,560 Speaker 1: this morning that his timeline is still six to nine 343 00:19:31,600 --> 00:19:34,120 Speaker 1: months total for the grounding. So remember it was grounded 344 00:19:34,200 --> 00:19:36,159 Speaker 1: in March, that that would put us in sort of 345 00:19:36,200 --> 00:19:38,560 Speaker 1: that September December time frame, and he does not think 346 00:19:38,600 --> 00:19:42,160 Speaker 1: that this swings that timeline. What Boeing has said is they, 347 00:19:42,440 --> 00:19:44,280 Speaker 1: you know, don't want to put to find a parameter 348 00:19:44,320 --> 00:19:46,480 Speaker 1: on it. They just expect the plane flying by the 349 00:19:46,600 --> 00:19:49,800 Speaker 1: end of the year. Now. Reports indicate that their conversations 350 00:19:49,800 --> 00:19:52,399 Speaker 1: with suppliers that they've been a lot more aggressive about 351 00:19:52,440 --> 00:19:55,480 Speaker 1: their timeline for getting that plane backup and flying again. 352 00:19:55,560 --> 00:19:58,400 Speaker 1: So I honestly, I think it's anybody's guess at this point. 353 00:19:58,480 --> 00:20:01,960 Speaker 1: I just think if you are the European regulators or 354 00:20:02,000 --> 00:20:04,879 Speaker 1: the Canadian regulators and you hear about yet another issue 355 00:20:04,920 --> 00:20:08,040 Speaker 1: that we're not discovered in the initial certification process, that's 356 00:20:08,040 --> 00:20:10,040 Speaker 1: got to make you say we're going to do an 357 00:20:10,080 --> 00:20:12,480 Speaker 1: even deeper dive than we were already planning. Their pr 358 00:20:12,600 --> 00:20:14,520 Speaker 1: of course, they like every other major company, have a 359 00:20:14,600 --> 00:20:19,639 Speaker 1: pier website. They've flown thirty billion passengers b equivalent to 360 00:20:19,760 --> 00:20:22,320 Speaker 1: everyone on Earth flying four times on a Boeing seven 361 00:20:22,440 --> 00:20:26,040 Speaker 1: thirty seven. Do they need the seven thirty seven Max? 362 00:20:26,880 --> 00:20:29,639 Speaker 1: They need the seven thirty seven or a plane like it. 363 00:20:29,800 --> 00:20:31,600 Speaker 1: I don't know that they need the Max. So what 364 00:20:31,640 --> 00:20:33,960 Speaker 1: they've said is they want this. They expected to fly 365 00:20:34,080 --> 00:20:36,040 Speaker 1: for the next couple of decades. They think that the 366 00:20:36,119 --> 00:20:41,600 Speaker 1: business not so much. I disagree. I think they need 367 00:20:41,640 --> 00:20:43,480 Speaker 1: to come up with a true successor to the seven 368 00:20:43,520 --> 00:20:46,960 Speaker 1: thirty seven because a lot of these software problems. This 369 00:20:47,119 --> 00:20:50,119 Speaker 1: system was installed because they had to change the design 370 00:20:50,119 --> 00:20:54,680 Speaker 1: and plane to accommodate fuel to bigger engines that are 371 00:20:54,720 --> 00:20:57,119 Speaker 1: pitched for an X number of feet in front of 372 00:20:57,119 --> 00:21:01,399 Speaker 1: the wings. And I I don't disagree with you. I 373 00:21:01,440 --> 00:21:03,399 Speaker 1: just think the pressure is building on the company to 374 00:21:03,480 --> 00:21:05,280 Speaker 1: come up with a real successor. They've said that they 375 00:21:05,320 --> 00:21:08,280 Speaker 1: don't feel like they need to accelerate their timeline. I don't. 376 00:21:08,320 --> 00:21:10,520 Speaker 1: I don't agree with that that they didn't flying the 377 00:21:10,600 --> 00:21:12,760 Speaker 1: Nashville this afternoon on a seven thirty seven. I'm just 378 00:21:12,760 --> 00:21:14,680 Speaker 1: gonna get on board like I always do. It'll get 379 00:21:14,760 --> 00:21:16,440 Speaker 1: but it's not. But it's not a Max. It's a 380 00:21:16,480 --> 00:21:23,320 Speaker 1: battle design, so it doesn't have engine. You're a Gate's option, 381 00:21:23,680 --> 00:21:26,200 Speaker 1: You're a Gate d c A. You've got to get 382 00:21:26,240 --> 00:21:28,840 Speaker 1: home because you got to go over the math homework. 383 00:21:29,359 --> 00:21:31,800 Speaker 1: You look out and it's a seven thirty seven Max. 384 00:21:32,359 --> 00:21:36,680 Speaker 1: Are you gonna fly it? Sure? Well, okay, if they've 385 00:21:36,680 --> 00:21:38,560 Speaker 1: got one customer, you know what? I think Paul is 386 00:21:38,640 --> 00:21:40,720 Speaker 1: right though, like you don't have that much choice because 387 00:21:40,880 --> 00:21:43,359 Speaker 1: it's a duopoly. It's Boeing or At the end of 388 00:21:43,359 --> 00:21:47,160 Speaker 1: the day, Brooks Southern. Then we're talking all things industrial 389 00:21:47,320 --> 00:22:04,159 Speaker 1: America to all of our audience worldwide, across this nation 390 00:22:04,680 --> 00:22:07,640 Speaker 1: and particularly for one or six one FM Boston from 391 00:22:07,640 --> 00:22:10,840 Speaker 1: the Bloomberg Interactive Broker Studios in New York. This is 392 00:22:10,880 --> 00:22:13,120 Speaker 1: not only the interview of the day of your weekend 393 00:22:13,160 --> 00:22:16,320 Speaker 1: it's the interview of the day as you go within 394 00:22:16,400 --> 00:22:21,119 Speaker 1: your house, within your home, staggering from fashion acquisition to 395 00:22:21,280 --> 00:22:25,920 Speaker 1: fashion acquisition. The name Joseph A Buddha is legendary. He's 396 00:22:25,960 --> 00:22:30,040 Speaker 1: single handedly bought brought a correct brown in beige back 397 00:22:30,119 --> 00:22:34,760 Speaker 1: to Fashion Bosweeney way before fending. He single handedly dressed 398 00:22:34,800 --> 00:22:37,880 Speaker 1: men out of whatever the slum they were in, out 399 00:22:37,880 --> 00:22:41,359 Speaker 1: of watching Kevin Costner and Bull Durham and he was 400 00:22:41,440 --> 00:22:44,480 Speaker 1: absolutely definitive. So what we're gonna do is Paul's gonna 401 00:22:44,520 --> 00:22:46,760 Speaker 1: dump into the business pen. I'm gonna do a nostalgia 402 00:22:46,800 --> 00:22:49,240 Speaker 1: thing at the beginning. But first of all, we welcome 403 00:22:49,359 --> 00:22:52,399 Speaker 1: Joseph A. Boot from London. Are you sitting behind the 404 00:22:52,440 --> 00:22:57,439 Speaker 1: Red Sox of the Yankees? Dugout? Good morning to you 405 00:22:57,480 --> 00:22:59,919 Speaker 1: and good after Tom and Paul. How are you got 406 00:23:00,280 --> 00:23:01,960 Speaker 1: very good? Where are you going to the game? That's 407 00:23:01,960 --> 00:23:04,840 Speaker 1: all I want to know. Yeah, yeah, well, um yeah. 408 00:23:05,000 --> 00:23:07,600 Speaker 1: Fortunately I'll be going to both games, which is historic. 409 00:23:09,480 --> 00:23:11,520 Speaker 1: But I will be wearing a two. I don't want 410 00:23:11,520 --> 00:23:13,399 Speaker 1: to offend any New York listeners, but I will be 411 00:23:13,440 --> 00:23:15,600 Speaker 1: wearing my Red Sox hat. That would be good now 412 00:23:15,680 --> 00:23:18,160 Speaker 1: he liked it. My roots. That's it's my roots too, 413 00:23:18,200 --> 00:23:20,760 Speaker 1: and we'll go that your roots are the same as mine. 414 00:23:20,840 --> 00:23:23,879 Speaker 1: When we were kids from different backgrounds, you would go 415 00:23:23,920 --> 00:23:27,640 Speaker 1: down Newberry Street and there was a historical building up 416 00:23:27,640 --> 00:23:30,879 Speaker 1: on a pedestal sounded by a moat of green grass. 417 00:23:30,920 --> 00:23:33,960 Speaker 1: Thank you Rachel Slade for a great article at Boston Magazine. 418 00:23:34,720 --> 00:23:38,840 Speaker 1: And it was Louise and Louise folks defined in America 419 00:23:39,600 --> 00:23:42,560 Speaker 1: what was to come? Always five years and twenty years 420 00:23:42,560 --> 00:23:45,560 Speaker 1: ahead of time. Joseph of Bood, What did you learn 421 00:23:45,600 --> 00:23:49,560 Speaker 1: in Louise and where did it go? Right? Well? I 422 00:23:49,640 --> 00:23:53,280 Speaker 1: worked it for for eight years, actually twelve years and 423 00:23:53,760 --> 00:23:56,840 Speaker 1: four years in college and eight years after. And I 424 00:23:56,960 --> 00:23:59,080 Speaker 1: didn't know at the time, but it was considered one 425 00:23:59,119 --> 00:24:02,680 Speaker 1: of the top three men's stores in the world. People 426 00:24:02,720 --> 00:24:05,920 Speaker 1: from all over the world came to understand where fashion 427 00:24:06,000 --> 00:24:09,120 Speaker 1: was going. So if that was my undergraduate work, um, 428 00:24:09,160 --> 00:24:11,840 Speaker 1: it was an amazing experience. Tom. I have to tell 429 00:24:11,880 --> 00:24:14,720 Speaker 1: you there are very few stores like it today, and 430 00:24:15,000 --> 00:24:20,960 Speaker 1: it was they were the best for men's wear. So, Joseph, 431 00:24:21,000 --> 00:24:25,720 Speaker 1: you're you're in London right now as you walk the streets, 432 00:24:26,320 --> 00:24:28,400 Speaker 1: how do you compare kind of the men's fashions you're 433 00:24:28,400 --> 00:24:30,239 Speaker 1: seeing today versus kind of what you see in New 434 00:24:30,320 --> 00:24:33,560 Speaker 1: York and the rest of the US. Yeah. Well, certainly 435 00:24:33,640 --> 00:24:36,399 Speaker 1: London is is considered one of the fashion capitals. And 436 00:24:36,440 --> 00:24:40,720 Speaker 1: I always use London as inspiration, not competition. And basically 437 00:24:40,760 --> 00:24:42,800 Speaker 1: what I mean as I'll walk down Savole Row, which 438 00:24:42,960 --> 00:24:46,240 Speaker 1: really is the origin of great men's wear, modern men's 439 00:24:46,240 --> 00:24:49,119 Speaker 1: wear from around the world, so I take I take 440 00:24:49,280 --> 00:24:52,760 Speaker 1: inspiration from it. I do think that European men tend 441 00:24:52,800 --> 00:24:55,480 Speaker 1: to be a little bolder about their fashion statements than 442 00:24:55,560 --> 00:24:59,480 Speaker 1: we Americans. But American men have made great improvements over 443 00:24:59,520 --> 00:25:02,800 Speaker 1: these last twenty years. And Tom, you certainly know the 444 00:25:02,960 --> 00:25:05,240 Speaker 1: history of the things that that I've been through in 445 00:25:05,280 --> 00:25:08,000 Speaker 1: the history of men's wear. Uh, And we've seen this 446 00:25:08,040 --> 00:25:11,720 Speaker 1: evolution where the millennials are now starting to get dressed again, 447 00:25:11,760 --> 00:25:14,800 Speaker 1: that they're making custom suits and they're getting dressed up 448 00:25:14,840 --> 00:25:17,680 Speaker 1: because they know that the suit, even though it's changing, 449 00:25:18,240 --> 00:25:20,800 Speaker 1: is something that they need in their wardrobe. I mean, 450 00:25:20,800 --> 00:25:23,200 Speaker 1: I'm looking at your website. I mean, you've got sport 451 00:25:23,240 --> 00:25:26,240 Speaker 1: coats here I can't wear. I mean they're way too 452 00:25:27,000 --> 00:25:29,639 Speaker 1: their way to aggressive. Are we dressing up more for 453 00:25:29,720 --> 00:25:32,160 Speaker 1: work now? And I don't mean Joseph, I mean fancy 454 00:25:32,160 --> 00:25:35,359 Speaker 1: pants Manhattan, I mean coast to coast Josephood, are we 455 00:25:35,480 --> 00:25:38,720 Speaker 1: dressing up more to work to keep the job? I 456 00:25:38,840 --> 00:25:41,240 Speaker 1: think so. I think it's that face to face experience 457 00:25:41,280 --> 00:25:44,320 Speaker 1: and first impressions are lasting. I think that's key, and 458 00:25:44,359 --> 00:25:46,679 Speaker 1: the young guy is figuring out that he needs to 459 00:25:46,680 --> 00:25:49,520 Speaker 1: present himself well. So it's not just all internet based. 460 00:25:49,840 --> 00:25:53,760 Speaker 1: It's face to face. It's instinct, it's intuition, and people 461 00:25:53,800 --> 00:25:56,320 Speaker 1: want to have confidence in the people they're doing business with. 462 00:25:56,440 --> 00:25:59,280 Speaker 1: And I know both of you guys have a sense 463 00:25:59,320 --> 00:26:02,720 Speaker 1: of style and taste, and you realize that dressing appropriate 464 00:26:03,240 --> 00:26:06,840 Speaker 1: is really important. That yet I mean, I mean, you 465 00:26:06,880 --> 00:26:08,399 Speaker 1: know they think I'm terrible. I mean the all the 466 00:26:08,440 --> 00:26:10,560 Speaker 1: reason for New Jersey. Hi, are you wearing your double 467 00:26:10,600 --> 00:26:13,879 Speaker 1: breasted suit today? That's all I wear? I mean, I do. 468 00:26:14,080 --> 00:26:17,640 Speaker 1: I got that from Letterman. Actually, well, I can tell 469 00:26:17,680 --> 00:26:19,720 Speaker 1: you with your leave you're wearing the bow tie today, 470 00:26:19,720 --> 00:26:23,680 Speaker 1: I think. But uh, you know, that's a certain style, 471 00:26:23,760 --> 00:26:26,560 Speaker 1: that's a professional style that a lot of guys are deaf. 472 00:26:26,680 --> 00:26:28,600 Speaker 1: They have their own personal style, and that's what I 473 00:26:28,680 --> 00:26:31,320 Speaker 1: like to support the individual guy, the guy that wants 474 00:26:31,400 --> 00:26:34,240 Speaker 1: his own style are we buying customers? Are we buying 475 00:26:34,320 --> 00:26:38,240 Speaker 1: Joseph a good customer, were buying off the wreck? Yeah, Well, 476 00:26:38,280 --> 00:26:41,400 Speaker 1: it's interesting. The biggest part of our growth right now 477 00:26:41,560 --> 00:26:45,040 Speaker 1: is in the custom business. We're seeing guys and you 478 00:26:45,160 --> 00:26:48,639 Speaker 1: probably remember this that men used to buy custom only 479 00:26:48,680 --> 00:26:52,080 Speaker 1: because they had to. Now guys are buying custom because 480 00:26:52,119 --> 00:26:54,840 Speaker 1: they want to they want to personalize and stylize. So 481 00:26:55,400 --> 00:26:58,520 Speaker 1: our factory in New Bedford, Massachusetts is the largest in 482 00:26:58,600 --> 00:27:01,320 Speaker 1: North America. We've got a about eight hundred people there 483 00:27:01,400 --> 00:27:05,600 Speaker 1: and the production now is all custom. So it's a 484 00:27:05,680 --> 00:27:08,480 Speaker 1: huge growth opportunity for us. So just have talked to 485 00:27:08,520 --> 00:27:10,800 Speaker 1: us a little bit and we talk about retail. Across 486 00:27:10,840 --> 00:27:13,240 Speaker 1: the retail spectrum, it's really been challenged the bricks and 487 00:27:13,240 --> 00:27:16,280 Speaker 1: mortar retail versus the online. How's that impact the kind 488 00:27:16,280 --> 00:27:20,160 Speaker 1: of the fashion business? Well, it's interesting if you talk 489 00:27:20,200 --> 00:27:22,960 Speaker 1: about the category that we work in and tailored, it's 490 00:27:23,119 --> 00:27:26,200 Speaker 1: very difficult to buy a suit online and to get 491 00:27:26,280 --> 00:27:30,160 Speaker 1: your measurements correct. So retail, the bricks and mortars, their 492 00:27:30,240 --> 00:27:33,760 Speaker 1: salvation is relevance. Their salvation is to make it theater, 493 00:27:34,280 --> 00:27:37,040 Speaker 1: to create an environment that just doesn't look like a 494 00:27:37,119 --> 00:27:40,439 Speaker 1: place to just buy stuff, you really have to create 495 00:27:40,440 --> 00:27:43,959 Speaker 1: an environment, especially for the new consumer that is entertainment. 496 00:27:44,040 --> 00:27:46,280 Speaker 1: So as we look to our stores in the future, 497 00:27:46,800 --> 00:27:49,560 Speaker 1: that aspect becomes more and more crucial. But we know 498 00:27:49,720 --> 00:27:52,200 Speaker 1: the value of having bricks and mortar where people can 499 00:27:52,240 --> 00:27:55,960 Speaker 1: come in, touch, see and feel. That's really important, especially 500 00:27:55,960 --> 00:27:58,880 Speaker 1: when you're dealing with expensive clothing and the way things 501 00:27:58,920 --> 00:28:01,840 Speaker 1: need to fit. When you look Joseph's bood at the 502 00:28:01,880 --> 00:28:05,000 Speaker 1: future of our of our retail industry, and I mean 503 00:28:05,040 --> 00:28:07,400 Speaker 1: you're in new bed for your offer cushion at Avenue. 504 00:28:07,880 --> 00:28:11,680 Speaker 1: It's a really basic, massively historic town. I gotta get 505 00:28:11,760 --> 00:28:13,800 Speaker 1: dressed up because they got a business meeting at tiam 506 00:28:13,840 --> 00:28:18,040 Speaker 1: Maria's downtown and everybody's got that pressure coast to coast. 507 00:28:18,119 --> 00:28:21,320 Speaker 1: I mean it's there all the time. Where are we 508 00:28:21,440 --> 00:28:26,119 Speaker 1: in five years in fashion? I mean, where's the trend. 509 00:28:26,400 --> 00:28:28,680 Speaker 1: I'm looking out of our studios here and how everyone's 510 00:28:28,760 --> 00:28:31,600 Speaker 1: dressed and come out. It still looks like casual day 511 00:28:31,880 --> 00:28:33,919 Speaker 1: on the West Coast. We're all trying to look like 512 00:28:34,000 --> 00:28:37,119 Speaker 1: Kevin Costner. When does this end? Yeah, well, I think 513 00:28:37,200 --> 00:28:39,560 Speaker 1: that I think what's happening with the younger guy. If 514 00:28:39,600 --> 00:28:42,080 Speaker 1: you talk five years down the line, the suit will 515 00:28:42,120 --> 00:28:45,040 Speaker 1: continue to evolve to be worn differently. A lot of 516 00:28:45,040 --> 00:28:47,560 Speaker 1: guys are wearing suit with sneakers. It's not my favorite 517 00:28:47,640 --> 00:28:53,120 Speaker 1: look and Patty more than trendy, it's more fat than trend. 518 00:28:53,480 --> 00:28:55,280 Speaker 1: But there's nothing like a pair of you know, I 519 00:28:55,320 --> 00:28:57,560 Speaker 1: just was on German Street here in London and they 520 00:28:57,600 --> 00:29:01,280 Speaker 1: have the greatest shoe stores you've every yep, and those 521 00:29:01,320 --> 00:29:03,640 Speaker 1: English shoes look great with a pair of jeans and 522 00:29:03,720 --> 00:29:07,000 Speaker 1: a casual jacket. They have real character to them. So 523 00:29:07,240 --> 00:29:09,560 Speaker 1: I think I've always tried to add character to close 524 00:29:10,040 --> 00:29:12,600 Speaker 1: and I think that we will continue to evolve in style. 525 00:29:12,760 --> 00:29:15,800 Speaker 1: But I do think dressing up is always appropriate for 526 00:29:15,840 --> 00:29:19,040 Speaker 1: the for the appropriate occasion. The aboot Keen rule of 527 00:29:19,120 --> 00:29:21,560 Speaker 1: sneakers as you can only wear sneakers of the suit 528 00:29:21,600 --> 00:29:25,760 Speaker 1: if you own a Tesla. So just just real quickly 529 00:29:25,760 --> 00:29:27,080 Speaker 1: before we go, I want you to spend a little 530 00:29:27,080 --> 00:29:28,719 Speaker 1: bit more time talking about which I think is one 531 00:29:28,720 --> 00:29:30,920 Speaker 1: of the coolest parts of you and your story is 532 00:29:31,040 --> 00:29:37,280 Speaker 1: your manufacturing plant in Massachusetts. It's just amazing. Yes. Well, um, 533 00:29:37,320 --> 00:29:40,320 Speaker 1: when I launched the collection thirty years ago, Paul, it 534 00:29:40,480 --> 00:29:44,400 Speaker 1: was really important for an American designer to make in America. 535 00:29:44,560 --> 00:29:47,239 Speaker 1: It's very cool to make in America today. You know 536 00:29:47,280 --> 00:29:51,120 Speaker 1: it seems oh coron. But for me, from way back 537 00:29:51,480 --> 00:29:55,320 Speaker 1: in seven, the idea of being an American designer to 538 00:29:55,440 --> 00:29:58,720 Speaker 1: make in America was great. And my partners were Italian 539 00:29:58,760 --> 00:30:02,640 Speaker 1: and we were able to really import Italian manufacturing technology 540 00:30:03,000 --> 00:30:05,120 Speaker 1: into the heart of New England, into New Bedford. So 541 00:30:05,160 --> 00:30:08,080 Speaker 1: I always say, we have an Italian factory uh in 542 00:30:08,120 --> 00:30:10,920 Speaker 1: New Bedford, Massachusetts. But it's an amazing place. Uh and 543 00:30:11,000 --> 00:30:13,479 Speaker 1: it's uh, you know, the longest in North America. As 544 00:30:13,520 --> 00:30:15,760 Speaker 1: I said, we gotta go with jose Joseph, I got 545 00:30:15,760 --> 00:30:18,840 Speaker 1: one major complaint your website, s court. Nobody on your 546 00:30:18,880 --> 00:30:22,440 Speaker 1: website has a dad bud, you know, they're all like, 547 00:30:23,360 --> 00:30:27,200 Speaker 1: they're all like these studs. Well, I want you to 548 00:30:27,200 --> 00:30:29,440 Speaker 1: come into our store and we will personally fit you. 549 00:30:29,760 --> 00:30:33,920 Speaker 1: Here we go. This is like, Joseph, a bank by 550 00:30:34,000 --> 00:30:37,080 Speaker 1: four gets six free or whatever. Joseph Booth, thank you, 551 00:30:37,200 --> 00:30:40,920 Speaker 1: Thank you so much. Thanks for listening to the Bloomberg 552 00:30:41,000 --> 00:30:46,960 Speaker 1: Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, 553 00:30:47,320 --> 00:30:51,520 Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at 554 00:30:51,560 --> 00:30:55,840 Speaker 1: Tom Keane. Before the podcast, you can always catch us worldwide. 555 00:30:56,280 --> 00:31:03,480 Speaker 1: I'm Bloomberg Radio.