WEBVTT - Surveillance: EM Valuations Are Very Cheap, Memani Says 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Lee. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:29.240 Bloomberg dot Com, and of course on the Bloomberg My 0:00:29.320 --> 0:00:31.760 Book of the Summer. His name is Robin Roger. If 0:00:31.760 --> 0:00:33.920 you do not know him, he is a Nodding acquaintance 0:00:34.440 --> 0:00:38.199 with India as a former RBI governor, but also a 0:00:38.360 --> 0:00:41.120 dynamo at the University of Chicago. And I can't say 0:00:41.200 --> 0:00:45.199 enough about the Third Pillar. It's March and it's already 0:00:45.240 --> 0:00:48.880 my book of the summer. Rockgoo, congratulations on the third Pillar. 0:00:48.960 --> 0:00:53.680 And throughout your book on community as a discussion of education, 0:00:53.840 --> 0:00:57.920 seamlessly throughout four hundred pages. Let me cut to the chase. 0:00:58.160 --> 0:01:01.680 Your Chicago is so lead. These parents out on the 0:01:01.680 --> 0:01:04.960 West Coast weren't even trying to get their kids and 0:01:05.080 --> 0:01:08.200 the professor Roger and Chicago. They were looking at other 0:01:08.280 --> 0:01:12.600 lower schools like that one in Cambridge in Massachusetts as well. 0:01:12.840 --> 0:01:17.320 Ruggle just simply your thoughts on the desperation to buy 0:01:17.480 --> 0:01:23.360 academics in America. Well, this is very worrisome, right because 0:01:23.760 --> 0:01:27.320 on the one hand, we already have isquing of opportunities. 0:01:27.600 --> 0:01:29.800 You have to go to the elite schools to get 0:01:29.840 --> 0:01:34.680 those elite jobs and and then you get you know, zillions, 0:01:34.720 --> 0:01:37.880 But for most of us out there, it's very hard 0:01:37.959 --> 0:01:40.600 to even take the first step. And then you read 0:01:40.720 --> 0:01:43.920 that it's not just about legacies, it's not just about 0:01:43.959 --> 0:01:48.200 preparation schools, which helps you prepare your applications, but it's 0:01:48.240 --> 0:01:52.960 about buying your way in illegally through corruption. That that 0:01:52.960 --> 0:01:55.640 that's really a blow to the system and we need 0:01:55.680 --> 0:01:59.080 to clean this up as quickly as possible. It's not 0:01:59.160 --> 0:02:01.600 happening you for us. Are you had the most interesting 0:02:01.720 --> 0:02:03.880 childhood in India. I won't go into it all, but 0:02:04.200 --> 0:02:06.560 like many others, you traveled around the world with your 0:02:06.560 --> 0:02:11.000 father and diplomacy and enforcement for India as well, and 0:02:11.040 --> 0:02:13.639 you are acculiar ware of the path for you through 0:02:13.760 --> 0:02:17.919 university in India and then onto your acclaimed world excellence. 0:02:18.480 --> 0:02:22.240 Is the place those students took. Is it a place 0:02:22.400 --> 0:02:25.240 from someone in the middle class or is it a 0:02:25.320 --> 0:02:28.560 place of someone who just went below that level of 0:02:28.800 --> 0:02:32.040 whatever school and they just eaked out not going to 0:02:32.120 --> 0:02:36.400 that fancy school. Well, I think it is a concern 0:02:36.600 --> 0:02:40.639 that so many people don't get a chance to really 0:02:40.680 --> 0:02:43.600 get into these school schools. First, you need a level 0:02:43.760 --> 0:02:47.280 of ambition in some of these schools outside the big cities, 0:02:47.320 --> 0:02:50.640 which tells you really the way to progress is to 0:02:50.720 --> 0:02:54.120 go to these high these ivy League schools, and from 0:02:54.200 --> 0:02:56.960 there get those wonderful jobs. Many students don't even have 0:02:57.080 --> 0:03:00.920 the ambition because they don't have access to good college 0:03:00.960 --> 0:03:04.200 counselors who tell them that's out there waiting for you. 0:03:04.480 --> 0:03:07.880 There are lots of scholarships, please do apply. And even 0:03:07.919 --> 0:03:11.519 if they they do, hear that the next step of 0:03:11.560 --> 0:03:15.800 doing the college tests, of writing the good applications, of 0:03:16.040 --> 0:03:20.040 getting past those hurdles is very difficult. So when you 0:03:20.160 --> 0:03:23.800 hear that there are separate tracks here, I think it 0:03:23.840 --> 0:03:27.960 creates a whole lot of new anxiety over and above 0:03:28.000 --> 0:03:33.200 what we already have. Professor, Does this feed populism? Do 0:03:33.320 --> 0:03:36.680 these kind of scandals the idea that actually the elite 0:03:36.720 --> 0:03:39.280 and the rich and get whatever they want will lead 0:03:39.480 --> 0:03:44.200 to people voting to more extreme parties, of course, because 0:03:44.600 --> 0:03:47.760 I think the sense that the system is cued, even 0:03:47.840 --> 0:03:50.960 before you add on corruption to it, is already there 0:03:51.480 --> 0:03:55.600 that the elite look after themselves. I call it the UH. 0:03:56.080 --> 0:04:00.760 We have a meritocracy, but it's a hereditary meritocracy. Only 0:04:00.840 --> 0:04:03.680 the children of the successful get a chance at being 0:04:03.720 --> 0:04:08.840 successful because of the extreme importance of a really good education. 0:04:09.320 --> 0:04:12.760 So given that, when you add on to that corruption 0:04:12.840 --> 0:04:16.599 and after all, what is populism, it's ultimately the corruption 0:04:16.600 --> 0:04:19.440 of the elite. They're not working for us, they're working 0:04:19.440 --> 0:04:23.080 for themselves. It leads to a significant amount of distrust 0:04:23.080 --> 0:04:26.320 in the system. So my sense is this is one 0:04:26.360 --> 0:04:29.359 of those scandals which is which has to be cleaned 0:04:29.400 --> 0:04:35.600 up very very quickly. Professor, again, congratulations on your book, 0:04:35.640 --> 0:04:39.320 which is fantastic, which is both tom and ized book 0:04:39.520 --> 0:04:42.119 of the year. When you look actually at central banks, 0:04:42.120 --> 0:04:43.760 and you said this in the past that you don't 0:04:43.760 --> 0:04:46.760 believe central banks should do any more, Quei if there 0:04:46.839 --> 0:04:49.440 was a downturn around the corner, what do you think 0:04:49.440 --> 0:04:54.800 they should do instead? Well, certainly the the US Central Bank, 0:04:54.880 --> 0:04:58.440 the FED, and UH and and China still have some 0:04:58.520 --> 0:05:02.039 room to cut interest rates. I think part of the 0:05:02.080 --> 0:05:05.640 normalization was in a sense to create some of that buffer. 0:05:06.200 --> 0:05:09.080 Of course, the problem with both the CB and the 0:05:09.080 --> 0:05:11.919 Bank of Japan, is they already into negative interest rates. 0:05:12.440 --> 0:05:15.479 As far as Quee goes, They've pretty much done what 0:05:15.520 --> 0:05:18.800 they could and whatever modest effect is that it has had, 0:05:19.080 --> 0:05:22.480 it's pretty much out there. There's very little more ammunition 0:05:22.520 --> 0:05:25.480 in the central bank tank, and so my guess is 0:05:25.600 --> 0:05:27.839 we have to look for other instruments in those countries. 0:05:27.920 --> 0:05:30.440 I mean, Professor, this is extraordinary. If you look at 0:05:30.440 --> 0:05:34.040 a college like Carleton College in Minnesota, this is an 0:05:34.080 --> 0:05:37.520 acclaim liberal arts institution of the Midwest, just like you're 0:05:37.839 --> 0:05:54.440 in Chicago. Brian Levitt joins us in the early morning 0:05:54.480 --> 0:05:58.080 down here Oppenheimer Severia investment strategies. Brian, let's start that 0:05:58.120 --> 0:06:02.279 which treasuries, Yeldner, it's an nineteen loves. What's driving things, 0:06:02.520 --> 0:06:04.840 what's driving the lower rates is just to slow down 0:06:04.839 --> 0:06:08.440 in global economic activity. Um, you know this was sort 0:06:08.480 --> 0:06:11.600 of we preordain, We sort of expected this. I mean, 0:06:11.640 --> 0:06:13.880 you had a lot of stimulus last year, drove rates 0:06:13.920 --> 0:06:17.120 to three five, FED raised rates a couple of times, 0:06:17.160 --> 0:06:19.680 and that starts to slow down economic activity. You see 0:06:19.760 --> 0:06:22.000 rates back down. We've been in the low for long 0:06:22.120 --> 0:06:24.280 camp for a while now. We believe interest rates are 0:06:24.279 --> 0:06:26.880 going to remain low. For a very long period of time. 0:06:26.960 --> 0:06:29.680 That's what happens in a world where there were just 0:06:29.720 --> 0:06:33.480 growth stars. So so does equities dovetail in the lower 0:06:33.560 --> 0:06:36.160 rates or does a dovetail into slow g d P, 0:06:36.440 --> 0:06:40.400 which means lousy earnings. So earnings are likely to be 0:06:40.560 --> 0:06:43.080 good enough. UM growth is likely to be good enough 0:06:43.160 --> 0:06:45.560 to support corporate earnings. But we're still in an environment 0:06:45.560 --> 0:06:47.560 where rates are so low that stocks are very cheap 0:06:47.560 --> 0:06:50.960 to bonds, and I expect that with modest earnings growth, 0:06:51.120 --> 0:06:54.040 some multiple expansion equity market should continue to do. This 0:06:54.080 --> 0:06:56.400 is really important, fo Brian, you and I've done this before. 0:06:56.480 --> 0:06:59.280 Let's walk to it again. When a process stocks are 0:06:59.360 --> 0:07:03.160 cheap to bonds, what does that mean on dividend versus 0:07:03.279 --> 0:07:06.640 yield on PE multiple? I mean take that right back 0:07:06.640 --> 0:07:08.640 to Lewis Ruth Kaiser one oh one. I think an 0:07:08.640 --> 0:07:10.600 easy way to do it is to just flip the 0:07:10.640 --> 0:07:14.040 price earnings ratio over and look at the earnings. He 0:07:14.080 --> 0:07:16.040 has a price to earnings ratio of ten using a 0:07:16.160 --> 0:07:19.560 round number ten divided by one. Right, flip it one 0:07:19.600 --> 0:07:22.800 divided by ten compared to a two, and so one 0:07:22.800 --> 0:07:24.640 divided by ten compared to a two and a half 0:07:24.680 --> 0:07:28.040 percent treasury rate and you're gonna you're gonna look pretty attractive. 0:07:28.080 --> 0:07:31.120 So the SMP earnings gilts probably close to around five 0:07:31.160 --> 0:07:34.880 percent compared to two six to seven on treasuries. Was 0:07:34.920 --> 0:07:36.880 that too much math now thought that was? That was 0:07:36.880 --> 0:07:43.320 a great stop. Let's let Tom enjoy his food. I 0:07:43.360 --> 0:07:45.520 think there's something that front strates a lot of people 0:07:45.800 --> 0:07:47.760 on Wall straights when people turn around and say, the 0:07:47.800 --> 0:07:50.679 bond market is telling me something. Is there a sinister 0:07:50.720 --> 0:07:52.960 message in the bond market the equity market doesn't know about. 0:07:53.000 --> 0:07:54.840 Can we just clear that up right now? Well, the 0:07:54.840 --> 0:07:57.320 bond market is telling you that we're going back to 0:07:57.400 --> 0:08:01.560 an environment of very modest growth but modest inflation, and 0:08:01.600 --> 0:08:05.000 we see that in the inflation numbers, and paradoxically, that's 0:08:05.040 --> 0:08:07.640 actually in a better environment for equity. Jonathan. If you 0:08:07.680 --> 0:08:11.000 remember last year, very good growth, but what we would 0:08:11.040 --> 0:08:16.320 call bad policy, federal reserve raising interest rates, the administration 0:08:16.400 --> 0:08:19.440 fighting a trade war. This year, what the market is 0:08:19.440 --> 0:08:22.680 focused on is slower growth, but better policy. The federal 0:08:22.720 --> 0:08:25.640 reserve is backed off, We're hoping to get some clarity 0:08:25.680 --> 0:08:27.880 on trade, and the market is enthused by that. This 0:08:27.920 --> 0:08:30.520 is a theme for Oppenheimer coming into I've heard it 0:08:30.560 --> 0:08:32.199 from you, I've heard it from Christian and multiple times, 0:08:32.200 --> 0:08:33.719 and I've had it now for several months. What I 0:08:33.760 --> 0:08:36.920 haven't seen yet is the better policy for the markets 0:08:36.960 --> 0:08:39.040 at least work for the economy. I haven't seen the 0:08:39.040 --> 0:08:41.760 bottoming bottom AUP process come through in China in a 0:08:41.800 --> 0:08:44.520 clear weight right yet. Do you see it? Well, you're 0:08:44.520 --> 0:08:47.360 starting to see stabilization in Chinese growth, so you're starting 0:08:47.400 --> 0:08:49.880 to see some credit growth. You have a purchasing manager's 0:08:49.920 --> 0:08:52.880 index that's hovering around forty nine and a half, so 0:08:52.920 --> 0:08:57.000 we're getting closer to that expansion territory perhaps of recent 0:08:57.000 --> 0:08:59.840 turn and industrial production. So it looks like we're getting 0:08:59.840 --> 0:09:02.720 to stabilization and Chinese growth back to my trend level. 0:09:02.840 --> 0:09:05.800 But remember policy moves take some time to work through 0:09:06.240 --> 0:09:08.800 the economy, so we would expect to see that second half. 0:09:09.120 --> 0:09:11.199 This is why, quite frankly, the US is slowing. We 0:09:11.360 --> 0:09:13.640 raised rates and that's working its way through the system. 0:09:13.800 --> 0:09:16.160 When John trades, it's like a three day trade as 0:09:16.160 --> 0:09:19.560 a long term trade, and I would suggest here Lappenheimer funds, 0:09:20.080 --> 0:09:22.120 you know a long term trade is like five years 0:09:22.200 --> 0:09:24.960 or even ten years. In two months we're up eleven 0:09:25.000 --> 0:09:29.000 point four s. How do you Christian and the rest 0:09:29.000 --> 0:09:32.160 of your team, how do you answer the question? Wait 0:09:32.160 --> 0:09:35.720 a minute, I'm up double digit go to cash? Well, look, 0:09:35.800 --> 0:09:38.960 first of all, we had a very difficult fall in winter, 0:09:39.160 --> 0:09:41.720 so we've been recovering ground from what was a pretty 0:09:41.800 --> 0:09:44.920 nasty correction. You're gonna take to do your compare and 0:09:44.960 --> 0:09:48.319 contress well, right, And the reality is, I mean, investors 0:09:48.360 --> 0:09:51.679 can try and trade, they can try to move into cash, 0:09:51.720 --> 0:09:53.959 but they've got to make multiple decisions, right, They've got 0:09:53.960 --> 0:09:55.839 to know when to get into cash. They got to 0:09:55.880 --> 0:09:57.920 know when to get out of cash. The realities, I 0:09:57.960 --> 0:10:00.320 believe we're in a secular bowl market. I've I've been 0:10:00.360 --> 0:10:03.200 told you get three secular bull markets in your life. 0:10:03.200 --> 0:10:09.040 The first one I was too young, the next one 0:10:09.040 --> 0:10:11.040 I'm likely to be. I'm just saying we've got a 0:10:11.040 --> 0:10:13.320 live audience here, and everyone's face is just We're like, 0:10:13.400 --> 0:10:17.119 what is he talking about? It's sort of like imus, 0:10:17.160 --> 0:10:19.959 you know, it's like it's a hotel full of people 0:10:20.000 --> 0:10:22.000 here right now. It's a beautiful thing. It's it's just 0:10:23.080 --> 0:10:26.760 I'm happy to have it. Car. Does that make me Bernard? Yes? 0:10:27.040 --> 0:10:30.080 So so anyway, um, this is the one. This is 0:10:30.120 --> 0:10:32.840 the middle secular bull market in my life, at least 0:10:32.880 --> 0:10:35.760 as I view it. And you know, secular bull markets 0:10:35.800 --> 0:10:38.280 are ultimately going to end with either extreme excess in 0:10:38.280 --> 0:10:42.439 the system, valuations that are incredibly excessive, or a policy mistake, 0:10:42.480 --> 0:10:44.320 and none of those seem apparent. Let's talk about your 0:10:44.320 --> 0:10:46.640 regional bus right now. What would it be? Well, I 0:10:46.640 --> 0:10:49.120 would favor in the United States, I would favor true growth. 0:10:49.760 --> 0:10:54.360 I'm favoring Cleveland this morning. Can we can we wait? 0:10:54.440 --> 0:10:59.000 Can we wait? Region? Because let's just wait. We've got 0:10:59.040 --> 0:11:01.440 a bit of time later today this Can I just 0:11:01.480 --> 0:11:09.240 say that my eleven year old daughter that Mr what's 0:11:09.240 --> 0:11:13.040 his name? Beckham Beckham jam Jr. Not the soccer player 0:11:13.120 --> 0:11:17.160 football moved from Giants to Brown's. Everyone is shocked, continued 0:11:17.200 --> 0:11:20.800 his daughter devastated. But Jabrill Peppers, Michigan guy coming in 0:11:20.840 --> 0:11:23.280 New York. So she gonna change her Giants tattoo to 0:11:23.280 --> 0:11:26.679 a Brown's tattoo. She did ask for Beckham Brown's jersey 0:11:26.720 --> 0:11:28.600 for a birthday. What did the Giants get in return? 0:11:30.080 --> 0:11:33.560 What did they get? Mr? Mannigan returned? So they get 0:11:33.559 --> 0:11:36.800 the number seventeen pick in this draft, The number pick 0:11:36.840 --> 0:11:39.800 in this draft and Jabrill Peppers, the safety who came 0:11:39.800 --> 0:11:43.320 out of Michigan Patterson Catholic High School. But it's interesting, 0:11:43.360 --> 0:11:45.280 and is it really would you suggest that, folks, this 0:11:45.320 --> 0:11:47.559 really goes to all the sports, including John we'll talk 0:11:47.600 --> 0:11:52.400 about Juventus, Juve, Juventus, we'll talk about there when yesterday. 0:11:52.520 --> 0:11:55.200 But Brian, it goes to the management trying to call 0:11:55.240 --> 0:11:57.600 a locker room and they think they're gonna do that 0:11:57.679 --> 0:12:01.200 by moving this gifted wide receiver. Well, I suspect that's 0:12:01.280 --> 0:12:07.080 that's what they're thinking. Um, it's also a check on 0:12:07.160 --> 0:12:09.880 the surveillance locker room. I suppose it's a team that 0:12:09.920 --> 0:12:12.680 thinks they need to rebuild, and so that's this is 0:12:13.000 --> 0:12:17.200 talking about Blimberg surveillance giants. I'm just trying to work 0:12:17.240 --> 0:12:19.560 that we talk about a real sport. Can we talk 0:12:19.600 --> 0:12:24.120 about Uventus a real sport. Christian Christiano Ronaldo needs to 0:12:24.160 --> 0:12:27.360 score three goals. That's exactly what he does. Juventus wins. 0:12:27.400 --> 0:12:31.480 They can to score three goals and win three nil. 0:12:31.559 --> 0:12:35.200 Ronaldo scores all three stunning comeback over in Turin in Italy. 0:12:35.679 --> 0:12:40.719 The stock this morning Juventus up sixteen percent, just up 0:12:40.760 --> 0:12:43.640 sixteen percent, just off that win. And the market can 0:12:43.760 --> 0:12:46.600 move off the back of it the equivalent of two 0:12:46.640 --> 0:12:49.640 times what the club paid for him. Two times what 0:12:49.679 --> 0:12:51.240 the club paid for him, We're up about two d 0:12:51.440 --> 0:12:55.160 forty million euros in market cap on the day. Does 0:12:55.240 --> 0:12:57.840 Manchester City have the same dynamics with a year they're 0:12:57.880 --> 0:12:59.920 having so Manchester City and events, I think probably the 0:13:00.120 --> 0:13:01.880 vor it's for the for the tournament. Now an outside 0:13:01.960 --> 0:13:05.000 Barcelona like to Cleveland Browns. What can I tell you 0:13:05.080 --> 0:13:09.560 my regional view? Now? Can you seconds? Thirty seconds? Week? 0:13:09.920 --> 0:13:12.640 We're very favorable on the emerging markets. Last year was 0:13:12.679 --> 0:13:17.080 the US above trend, China below, China stabilizing US slowing 0:13:17.320 --> 0:13:20.679 policy accommodative around the world. That should be supportive for Nocoba. 0:13:20.880 --> 0:13:22.800 This is really important. We'll come back and talk about 0:13:22.800 --> 0:13:26.960 the international expertise of Oppenheimer Funds and Brian Levitt's view 0:13:27.040 --> 0:13:42.400 on emerging markets as well. It is a joy to 0:13:42.440 --> 0:13:46.640 be at Oppenheimer Funds with our expertise in the international investment. 0:13:46.640 --> 0:13:49.280 Of course, those of us have a certain vintage. Remember 0:13:49.440 --> 0:13:54.000 Oppenheimer Funds from a few years ago with definitive equity 0:13:54.080 --> 0:13:57.640 and particularly growth equity at work as well and hosting 0:13:57.720 --> 0:14:01.280 is today Christian MoManI, head of the shop here. Wonderful 0:14:01.400 --> 0:14:05.080 day have you here, and you get surveillance yeoman's duty today. 0:14:05.120 --> 0:14:07.880 We're gonna give that to Francis like wa freezing on 0:14:07.920 --> 0:14:11.280 the green at Westminster. I think for our audience we 0:14:11.360 --> 0:14:15.240 sort of perceive New York to Istanbul, which is not 0:14:15.440 --> 0:14:18.280 quite as far as New York to Buenos series. You 0:14:18.400 --> 0:14:21.880 just flew in from Argentina and you had a brilliant insight. 0:14:22.000 --> 0:14:26.960 Christians always their bankrupt pastos at forty two and the 0:14:27.080 --> 0:14:30.080 hotels are packed. How can that be? Well? So, I 0:14:30.520 --> 0:14:34.560 think that's very interesting. That is they have a crisis, 0:14:34.680 --> 0:14:37.880 and it was a crisis created by the Machrie government 0:14:37.920 --> 0:14:41.760 by depending too much to fund the fiscal deficit from 0:14:41.760 --> 0:14:46.640 external sources. Beyond that, I think there is the draw 0:14:46.680 --> 0:14:50.640 down in the economy is relatively modest. If Makri can 0:14:50.720 --> 0:14:54.240 win the win the election, and there's decent chance for 0:14:54.400 --> 0:14:57.800 that despite the economic debacco, he can implement lots of 0:14:57.800 --> 0:15:01.960 structural changes. The most in instinct thing that I observed 0:15:01.960 --> 0:15:08.600 there is Argentina uses Venezuela more than anybody else. I 0:15:08.880 --> 0:15:12.840 think that is one of the REASONSOS know what they're 0:15:12.880 --> 0:15:18.080 saying is well, if Christina comes back, Kush Nurse come back, 0:15:18.880 --> 0:15:23.760 then we will be another Venezuela as well. So that 0:15:23.880 --> 0:15:27.320 is a that is a good election platform. Bottom line is, 0:15:27.560 --> 0:15:29.960 you know the country is going through an adjustment. They 0:15:29.960 --> 0:15:32.160 are in a sort of a recession. But I don't 0:15:32.160 --> 0:15:34.920 think the recession is as deep as people suspect. Is 0:15:34.960 --> 0:15:38.560 there opportunity there for traditional investors or is it the 0:15:38.600 --> 0:15:42.360 prevailance a fancy alternative fund people that know more than 0:15:42.400 --> 0:15:45.560 I do. No. I think the companies are dirt cheap. 0:15:45.640 --> 0:15:49.840 If we've met an agricum company and they generated almost 0:15:49.920 --> 0:15:52.960 ninety million dollars in free cash flow in dollar terms, 0:15:53.000 --> 0:15:56.640 because they exports its dollars trading at seven hundred seven 0:15:56.680 --> 0:16:00.320 hundred seventy million dollars in market cap, that's a ashaan 0:16:00.440 --> 0:16:05.280 cash yield, which is significantly, significantly cheaper than anywhere else 0:16:05.280 --> 0:16:06.760 in the world. So how do you think about Latin 0:16:06.800 --> 0:16:08.720 American in general? I mean, do you really need to 0:16:08.760 --> 0:16:12.480 break it down country by country, company by company, or 0:16:12.520 --> 0:16:14.280 do you have a macro view of Latin America that 0:16:14.320 --> 0:16:16.920 you need to be longer or unexposed. I think the 0:16:17.560 --> 0:16:21.640 thing in Latin America is important, but the larger context 0:16:21.760 --> 0:16:26.200 is emerging markets. Valuations in emerging markets, as Argentina and 0:16:26.240 --> 0:16:30.240 other places show valuations and emerging markets are very cheap 0:16:30.360 --> 0:16:33.480 relative to the developed work, especially the US, and that's 0:16:33.520 --> 0:16:37.200 the primary reason why we want to be in in 0:16:37.240 --> 0:16:40.880 emerging markets. And as as the company that I was 0:16:40.920 --> 0:16:44.480 talking about, it's really not about Argentina as much as 0:16:44.520 --> 0:16:48.680 it is about a dollar exporter in Argentina who has 0:16:49.000 --> 0:16:53.840 significant cost advantages. So emerging market investing for US has 0:16:53.880 --> 0:16:58.080 always been about companies rather than geographies or countries. How 0:16:58.080 --> 0:17:00.840 about also in the context of your emerging mark CA thesis, 0:17:01.000 --> 0:17:03.240 as you just stated, how concern are you bout just 0:17:03.280 --> 0:17:07.159 slowing global economy something specifically China, and then also you 0:17:07.200 --> 0:17:10.200 know Europe as well, Um, how is that impacting kind 0:17:10.200 --> 0:17:13.640 of your view of emerging markets. Well, so global economy 0:17:13.720 --> 0:17:16.760 is slowing down for sure, I mean US is slowing down, 0:17:16.880 --> 0:17:20.760 China will slow down, Europe has definitely slowed down. Having 0:17:20.760 --> 0:17:25.480 said that, the slowdown is not catastrophic, So China is 0:17:25.520 --> 0:17:27.720 not going to go to four percent, It's gonna be 0:17:28.320 --> 0:17:32.160 still be higher than six percent, and Europe hopefully stabilizes 0:17:32.200 --> 0:17:35.320 around you know, for the whole year around one percent 0:17:35.560 --> 0:17:38.600 US probably too. So the global economy is slowing down, 0:17:38.640 --> 0:17:42.399 but it is not slowing down catastrophically. Policy, on the 0:17:42.400 --> 0:17:46.399 other hand, is going to be meaningfully more supportive in 0:17:46.440 --> 0:17:49.160 two thousand nineteen than it had it was in two 0:17:49.200 --> 0:17:52.000 thousand and eighteen, and that's what gets the markets higher 0:17:52.200 --> 0:17:54.679 very quickly. My idea of international investment used to be 0:17:54.720 --> 0:17:57.800 to buy a case of Molson Golden Nail out of Canada. 0:17:57.960 --> 0:18:01.080 It's changed a little bit. Christian say the least, do 0:18:01.200 --> 0:18:03.840 you just go into e M now and let you 0:18:03.880 --> 0:18:07.040 guys allocate, or you have to be supple and go 0:18:07.160 --> 0:18:10.040 in and out. So you missed two thousand eighteen and 0:18:10.080 --> 0:18:12.960 try to get two thou well. So I think if 0:18:13.000 --> 0:18:15.760 you are a long term investor and you're looking for 0:18:15.960 --> 0:18:19.160 growth in your portfolio for the next two or three decades, 0:18:19.200 --> 0:18:22.879 which is a lot of people need, the real growth 0:18:22.920 --> 0:18:25.560 in the world is only going to come from emerging market. 0:18:26.840 --> 0:18:28.440 You just have to lean and say, you know, you'll 0:18:28.480 --> 0:18:31.320 have the five year period that we have had over 0:18:31.359 --> 0:18:34.760 the last five years, it's been a very subpar, but 0:18:34.880 --> 0:18:37.399 that's not the context. The context is you want to 0:18:37.440 --> 0:18:39.480 be in this market for the long term growth we're 0:18:39.520 --> 0:18:41.959 gonna come back. He's got so many frequent flyer miles 0:18:41.960 --> 0:18:45.159 on the surveillance credit card that we're gonna bring Christian 0:18:45.200 --> 0:18:50.080 money back just in fluent from Buenos Aires. That doesn't 0:18:51.080 --> 0:19:07.399 doesn't failed at that, you know, House Democrats. Uh, Now 0:19:07.440 --> 0:19:09.680 they're obviously back in control of the House, and they're 0:19:09.680 --> 0:19:15.440 actually taking another stab at legislation protecting young undocumented immigrants, 0:19:15.440 --> 0:19:17.960 while at the same time expending those protections to immigrants 0:19:17.960 --> 0:19:20.840 that are covered by other programs. To help us kind 0:19:20.880 --> 0:19:24.359 of breakdown this story, we're joined by Laura Francis, Laura's 0:19:24.359 --> 0:19:28.679 Bloomberg Law senior legal editor. Laura, thanks so much for 0:19:28.760 --> 0:19:32.520 joining us. Um What is the status of this latest 0:19:32.560 --> 0:19:37.440 iteration of immigration legislation. So it was just introduced yesterday, 0:19:37.560 --> 0:19:40.760 there was a lot of fanfare by the Democrats, so 0:19:40.800 --> 0:19:42.600 we'll have to see kind of where it's going to 0:19:42.720 --> 0:19:45.520 go from here. I would imagine that with the Democrats 0:19:45.520 --> 0:19:47.400 and control of the House, they're really going to make 0:19:47.400 --> 0:19:50.760 a push to get this bill through committee and onto 0:19:50.760 --> 0:19:54.919 the House floor. Is there any Republican support either in 0:19:55.000 --> 0:19:58.399 the House or the Senate for this There has not 0:19:58.600 --> 0:20:02.400 been vocalized publican support. I think there are some Republicans 0:20:02.440 --> 0:20:07.119 who are willing to work with the Democrats to expand 0:20:07.160 --> 0:20:10.399 this bill and kind of add some provisions that maybe 0:20:10.440 --> 0:20:14.920 include border security, interior enforcement, that kind of thing. They're 0:20:14.920 --> 0:20:18.040 not willing to throw it out, but I don't think 0:20:18.080 --> 0:20:20.399 they want to see it pass in its current form. 0:20:20.640 --> 0:20:23.919 But but okay, I get that. But essentially anything the 0:20:23.960 --> 0:20:26.840 House proposes is dead on a rival, right, I mean, 0:20:27.000 --> 0:20:30.560 this is the definition of grid luck. It can be 0:20:30.680 --> 0:20:35.840 especially with immigration. Any immigration bill introduced by either party 0:20:35.920 --> 0:20:39.679 and either side of Congress, it faces an uphill battle. 0:20:40.160 --> 0:20:42.159 So how do you handle that every day? Do you 0:20:42.200 --> 0:20:45.199 medicate every morning before you go into the land of 0:20:45.240 --> 0:20:51.520 grid luck? I can't speak from members of Congress, UM, 0:20:51.880 --> 0:20:56.679 it's it's a perpetual challenge with any immigration legislation UM, 0:20:56.720 --> 0:21:01.240 because immigration bills have not moved in Congress in so 0:21:01.280 --> 0:21:05.800 many years. Anything that gets introduced is mired in all 0:21:05.800 --> 0:21:09.439 these complicated factors. Is the bill going to be too small? 0:21:09.600 --> 0:21:12.919 Is the bill going to be too big? And it 0:21:13.160 --> 0:21:16.400 kind of puts everyone at a standstill until something finally 0:21:16.840 --> 0:21:20.720 kind of breaks that political logjam. So so, Laura, is 0:21:20.720 --> 0:21:23.479 is there some middle road here where we could uh 0:21:23.960 --> 0:21:27.240 or the Congress kid bringing some you know, some money, uh, 0:21:27.320 --> 0:21:30.280 some language about border security, about a wall or just 0:21:30.640 --> 0:21:34.080 border security broadly defined, to help push this legislation through. 0:21:34.119 --> 0:21:36.840 Is there any middle ground there? I think there could 0:21:36.920 --> 0:21:42.160 be this time around. In past congresses, Republicans have insisted 0:21:42.280 --> 0:21:46.000 on we need enforcement first before we provide any kind 0:21:46.000 --> 0:21:51.280 of legalization to undocumented immigrants. This time there they change 0:21:51.280 --> 0:21:53.240 your tune a little bit where they're saying, we still 0:21:53.280 --> 0:21:56.520 need that enforcement, but we are willing to attach it 0:21:56.560 --> 0:21:59.240 to legalization. So I think that may be a ground 0:21:59.280 --> 0:22:03.240 for them to work together on, not this exact bill, 0:22:03.320 --> 0:22:06.200 but maybe using this as a jumping point to something 0:22:06.240 --> 0:22:09.240 more comprehensive. To a grizzled pro like you. When you 0:22:09.280 --> 0:22:12.639 see a new number eight point six jillion dollars to 0:22:12.720 --> 0:22:16.359 build another X feed of wall, translate that for the 0:22:16.480 --> 0:22:20.560 jaded on Capitol Hill, what does that actually mean? So, 0:22:21.400 --> 0:22:24.680 what what you're seeing is the president's budget proposal, and 0:22:25.200 --> 0:22:28.159 that's really just kind of his wish list for what 0:22:28.200 --> 0:22:32.880 he wants to see happen. It's very rare that Congress 0:22:32.960 --> 0:22:36.360 gives him anything that close to what he's asking for, 0:22:36.440 --> 0:22:39.119 and especially with the wall, which has already been the 0:22:39.160 --> 0:22:44.000 subject of so much contention. Um, it's it's highly unlikely 0:22:44.080 --> 0:22:46.760 that that's actually going to pass through Congress. Laura Francis, 0:22:46.760 --> 0:22:49.879 thank you so much, greatly appreciate the budget wish list 0:22:50.480 --> 0:23:10.440 conversation in Washington. Paul Swunian, time king with Oppenheimer Funds. 0:23:10.440 --> 0:23:12.400 We do this once a year and it is spectacular. 0:23:12.520 --> 0:23:16.960 We thank them for their hospitality and a good food. 0:23:17.160 --> 0:23:19.680 To say the least. I'm a little shaky right now, Paul, 0:23:19.800 --> 0:23:23.120 after the avocado toast, I mean, after the second tray 0:23:23.160 --> 0:23:25.560 of it. I think this is the interview of the 0:23:25.600 --> 0:23:29.000 day for about all this investment stuff. Christina Boris with 0:23:29.160 --> 0:23:32.600 this head of client research at Oppenheimer Funds, which means 0:23:33.560 --> 0:23:37.040 know your client, which is actually go out and talk 0:23:37.200 --> 0:23:41.800 to people about their fears. Now, we could rip up 0:23:41.800 --> 0:23:45.720 the script and spend the entire uh interview talking about 0:23:45.760 --> 0:23:47.960 how to get into college. But that'll be a theme 0:23:48.359 --> 0:23:51.040 maybe for another time with you. I'm sure people walking 0:23:51.080 --> 0:23:53.240 to go I gotta get my kid into slippery rocket? 0:23:53.280 --> 0:23:56.240 What do I do? But forget about that. What's the 0:23:56.320 --> 0:24:03.200