1 00:00:00,120 --> 00:00:02,920 Speaker 1: Brought you by Bank of America Mary Lynch. Investing in 2 00:00:03,000 --> 00:00:07,960 Speaker 1: local communities, economies and a sustainable future. That's a power 3 00:00:08,080 --> 00:00:12,360 Speaker 1: of global connections. Mary Lynch, Pierce Fenner and Smith Incorporated 4 00:00:12,760 --> 00:00:26,400 Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:26,440 --> 00:00:29,920 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:29,960 --> 00:00:34,800 Speaker 1: insight from the best of economics, finance, investment, and international relations. 7 00:00:35,240 --> 00:00:40,760 Speaker 1: Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, 8 00:00:40,800 --> 00:00:48,479 Speaker 1: and of course, on the Bloomberg. William Rhodes Bill Rhodes, 9 00:00:48,520 --> 00:00:51,479 Speaker 1: former senior vice chairman at City Group, now the CEO 10 00:00:51,479 --> 00:00:54,560 Speaker 1: of William Rhodes Global Advisors and the author of Banker 11 00:00:54,600 --> 00:00:56,680 Speaker 1: to the World, Leadership Lessons from the front Lines of 12 00:00:56,720 --> 00:00:59,320 Speaker 1: Global Finance. He joins us here in our Bloomberg eleven 13 00:00:59,360 --> 00:01:01,360 Speaker 1: three oh studio in New York. Great to see you, 14 00:01:01,400 --> 00:01:04,240 Speaker 1: Thanks for for being here. And let's start with some 15 00:01:04,240 --> 00:01:07,480 Speaker 1: some contrast here. There's conversation in the US about what 16 00:01:07,600 --> 00:01:10,640 Speaker 1: might happen to financial regulation when you look at sort 17 00:01:10,680 --> 00:01:14,000 Speaker 1: of regulatory objectives in the US versus what's going on 18 00:01:14,080 --> 00:01:16,560 Speaker 1: in Europe. How wide, how yawning a gap is there 19 00:01:16,560 --> 00:01:19,160 Speaker 1: between the two perspectives. Well, I think there's a lot 20 00:01:19,160 --> 00:01:21,720 Speaker 1: of concern in Europe as to what the new administration 21 00:01:21,800 --> 00:01:23,399 Speaker 1: here in the United States is going to do on 22 00:01:23,440 --> 00:01:27,320 Speaker 1: the regulatory front. I don't see uh that the administration, 23 00:01:27,400 --> 00:01:30,800 Speaker 1: if it wanted to, has the votes uh to overturned 24 00:01:31,319 --> 00:01:34,400 Speaker 1: Dodd Frank. But I think what will happen is on 25 00:01:34,520 --> 00:01:37,240 Speaker 1: the regulatory side with the FED, which is the chief 26 00:01:37,280 --> 00:01:41,160 Speaker 1: regulator of the banking system. UH, that you'll you'll have 27 00:01:41,440 --> 00:01:44,920 Speaker 1: a change of policy compared to what Dan Trulo did, 28 00:01:45,240 --> 00:01:49,559 Speaker 1: who's now uh, you know, resigned effectively from uh from 29 00:01:49,560 --> 00:01:52,200 Speaker 1: that position at the FED, UH to the new person 30 00:01:52,240 --> 00:01:55,560 Speaker 1: who's going to be the senior regulator, I think, particularly 31 00:01:55,600 --> 00:01:58,520 Speaker 1: in the area of small to medium sized banks. And 32 00:01:58,560 --> 00:02:01,920 Speaker 1: we'll just have to see where that goes. And UH 33 00:02:01,960 --> 00:02:04,440 Speaker 1: one of the big questions is will they ease up 34 00:02:04,440 --> 00:02:07,080 Speaker 1: on stress tests for all banks? And that is not 35 00:02:07,240 --> 00:02:12,120 Speaker 1: clear even in Europe. Apart from the concern about what 36 00:02:12,160 --> 00:02:16,960 Speaker 1: we're gonna do here, UH, the situation is different, you know, 37 00:02:17,040 --> 00:02:19,720 Speaker 1: from what the U is on the plate in the 38 00:02:19,840 --> 00:02:23,720 Speaker 1: UK and continental Europe, because you may see some easing 39 00:02:23,760 --> 00:02:26,680 Speaker 1: up in the UK. A lot of the German banks 40 00:02:26,720 --> 00:02:30,120 Speaker 1: are calling for and easing up on some of this 41 00:02:30,200 --> 00:02:34,200 Speaker 1: regulatory environment in Europe, the roads. If we had time 42 00:02:34,200 --> 00:02:36,600 Speaker 1: here to consider the legacy of Dan Torulo at this point, 43 00:02:36,600 --> 00:02:38,960 Speaker 1: how he shaped that that job, and indeed what what 44 00:02:39,080 --> 00:02:41,799 Speaker 1: his successor how how the how his successor may following 45 00:02:41,800 --> 00:02:46,079 Speaker 1: his footsteps. Well, I think Dan Trulo UH felt that 46 00:02:46,680 --> 00:02:51,280 Speaker 1: the big banks in particular UM had really missed the 47 00:02:51,760 --> 00:02:55,880 Speaker 1: economy up going into the Great Recession, and his way 48 00:02:55,960 --> 00:02:59,960 Speaker 1: of dealing with this was to constantly raise capital standards 49 00:03:00,440 --> 00:03:02,840 Speaker 1: UH in many different ways. And at the at the 50 00:03:02,880 --> 00:03:07,920 Speaker 1: same time, UH insist that that the banks UH, you know, 51 00:03:08,400 --> 00:03:11,880 Speaker 1: do very tough stress testing at least twice a year. 52 00:03:12,280 --> 00:03:15,880 Speaker 1: And the question is will that UH will let particular 53 00:03:16,520 --> 00:03:21,320 Speaker 1: to rule or mandate change under a new regulator who 54 00:03:21,360 --> 00:03:24,280 Speaker 1: will be appointed there by the administration. And in my 55 00:03:24,360 --> 00:03:27,840 Speaker 1: answer I think is yes. You've written recently about reputational risk, 56 00:03:27,919 --> 00:03:29,600 Speaker 1: looking at all of the risks that banks face, and 57 00:03:29,639 --> 00:03:32,480 Speaker 1: so we're saying the reputational risk is paramount in terms 58 00:03:32,480 --> 00:03:36,960 Speaker 1: of importance the institutions themselves. Does the government have power 59 00:03:37,000 --> 00:03:39,600 Speaker 1: to sort of enforced or make a bank care more 60 00:03:39,640 --> 00:03:41,840 Speaker 1: about reputational risk wors That's something that has to come 61 00:03:41,840 --> 00:03:46,680 Speaker 1: from within. Well. Basically, reputational risk UH, in my mind, 62 00:03:46,760 --> 00:03:49,720 Speaker 1: is the most serious risk at all, because if you 63 00:03:49,760 --> 00:03:52,720 Speaker 1: lose your reputation, you can go out of business. And 64 00:03:52,800 --> 00:03:55,840 Speaker 1: that's been a big challenge to the banking sector here 65 00:03:55,840 --> 00:03:58,000 Speaker 1: in the United States and in Europe coming out of 66 00:03:58,000 --> 00:04:03,720 Speaker 1: the Great Recession. UH. And every institution has a different history, 67 00:04:03,800 --> 00:04:07,320 Speaker 1: different traditions, and they basically have to set up their 68 00:04:07,320 --> 00:04:11,720 Speaker 1: own cultural arrangement UH. The regular at you can't do 69 00:04:11,760 --> 00:04:14,520 Speaker 1: that or supervisor, but what they can do is track 70 00:04:15,240 --> 00:04:18,800 Speaker 1: whether the institution is keeping up with its own UH, 71 00:04:19,080 --> 00:04:22,160 Speaker 1: with its own UH you know, set of rules. And 72 00:04:22,720 --> 00:04:25,560 Speaker 1: this I think is key because if regulation in effect 73 00:04:26,200 --> 00:04:31,640 Speaker 1: UH is downgraded, there's all more importance for reputational risk UH, 74 00:04:31,720 --> 00:04:34,560 Speaker 1: which is based on culture and conduct. And I think 75 00:04:34,600 --> 00:04:36,080 Speaker 1: that was one of the failures of so many of 76 00:04:36,120 --> 00:04:39,120 Speaker 1: the institutions coming up to the Great Recession. And so 77 00:04:39,279 --> 00:04:42,039 Speaker 1: I think the idea of having a good culture will 78 00:04:42,120 --> 00:04:45,640 Speaker 1: reflect in the conduct and the regulators and supervisors are 79 00:04:45,680 --> 00:04:49,279 Speaker 1: going to follow that. And those institutions that don't emphasize 80 00:04:49,520 --> 00:04:53,240 Speaker 1: culture and conduct are our real rest going forward. Bill 81 00:04:53,320 --> 00:04:56,680 Speaker 1: Rods with US Bill Rhodes Associates courses, work with William 82 00:04:56,760 --> 00:05:01,160 Speaker 1: Rhodes Associates and his work with City Bank for years. 83 00:05:01,200 --> 00:05:04,279 Speaker 1: Good morning everyone, Bloomberg Surveillance, Bill Rhodes. Are there too 84 00:05:04,320 --> 00:05:07,799 Speaker 1: many banks? Is where we're really heading here is mergers, 85 00:05:07,960 --> 00:05:11,600 Speaker 1: whether the European banks wanted or not, and frankly the 86 00:05:11,680 --> 00:05:15,360 Speaker 1: US regionals as well. Every we're still in a state Allah, 87 00:05:15,440 --> 00:05:18,280 Speaker 1: Andrew Jackson where there's too many banks. Well, I think 88 00:05:18,320 --> 00:05:20,520 Speaker 1: you're going to see more in the way of merger 89 00:05:20,839 --> 00:05:24,159 Speaker 1: between small and medium sized banks in the United States, 90 00:05:24,160 --> 00:05:26,920 Speaker 1: and I think definitely in Europe, particularly in a country 91 00:05:27,000 --> 00:05:30,719 Speaker 1: like uh like Italy, because you basically have too many 92 00:05:30,720 --> 00:05:33,800 Speaker 1: banks in Italy and a number of them have capital gaims. 93 00:05:34,120 --> 00:05:36,080 Speaker 1: What are we waiting for? Do they like to go 94 00:05:36,120 --> 00:05:39,240 Speaker 1: to lunch or something? I mean, what is taking so long? 95 00:05:39,320 --> 00:05:41,840 Speaker 1: If it's so obvious to everyone that there are too 96 00:05:41,839 --> 00:05:45,000 Speaker 1: many banks? Well, I think banks tend to move slowly, 97 00:05:45,080 --> 00:05:48,320 Speaker 1: and the governments, particularly in Europe, uh, you know, have 98 00:05:48,400 --> 00:05:51,960 Speaker 1: been very slow uh to to really realize this. And 99 00:05:51,960 --> 00:05:54,599 Speaker 1: and this is a role also for the European Central Bank, 100 00:05:54,640 --> 00:05:57,359 Speaker 1: which is the chief regulator under the Banking Union. And 101 00:05:57,400 --> 00:05:59,680 Speaker 1: I think there's been a big difference since its move 102 00:06:00,120 --> 00:06:04,159 Speaker 1: from European Banking Authority to the UH to the ECB, 103 00:06:04,279 --> 00:06:07,440 Speaker 1: the European Central Bank. The problem there is is a 104 00:06:07,440 --> 00:06:10,440 Speaker 1: lot of disagreement on resolution as to what do you 105 00:06:10,480 --> 00:06:12,960 Speaker 1: do if a bank has a problem and how you 106 00:06:13,040 --> 00:06:15,680 Speaker 1: do it. And we're seeing that in the case of 107 00:06:15,680 --> 00:06:18,279 Speaker 1: Italy where they put together UH, you know, a bad 108 00:06:18,760 --> 00:06:22,839 Speaker 1: bank type fund UH and you know, it's not clear 109 00:06:22,880 --> 00:06:25,760 Speaker 1: how that's gonna work. And we've had similar situations in 110 00:06:25,839 --> 00:06:29,960 Speaker 1: Portugal and and that needs to be regularized over time. Plus, 111 00:06:30,320 --> 00:06:34,320 Speaker 1: the third leg of the Banking Union's UH stool here 112 00:06:34,360 --> 00:06:37,680 Speaker 1: so as to speak, was deposit insurance, and there's not 113 00:06:37,720 --> 00:06:40,200 Speaker 1: even discussions on that because they're still trying to work 114 00:06:40,200 --> 00:06:43,000 Speaker 1: out what they're gonna do on resolution. And that's key 115 00:06:43,080 --> 00:06:45,800 Speaker 1: for the economy of Italy in particular. And even in 116 00:06:45,839 --> 00:06:48,320 Speaker 1: a country like Spain where you've seen a lot of progress, 117 00:06:48,800 --> 00:06:51,840 Speaker 1: UH you have you have a problem UH with one 118 00:06:51,880 --> 00:06:55,000 Speaker 1: of the medium sized banks, Banco Popular, over the last 119 00:06:55,040 --> 00:06:58,120 Speaker 1: few weeks. They had to come forward and say that 120 00:06:58,200 --> 00:07:01,760 Speaker 1: they had missed declaring six under a million dollars of 121 00:07:01,880 --> 00:07:05,280 Speaker 1: past two loans in the proper fashion, and so the 122 00:07:05,320 --> 00:07:07,600 Speaker 1: CEO was forced out by the board. So there's still 123 00:07:07,640 --> 00:07:10,120 Speaker 1: a lot of work to do, particularly in southern Europe. 124 00:07:10,280 --> 00:07:12,080 Speaker 1: When you look at banks on on each side of 125 00:07:12,120 --> 00:07:14,400 Speaker 1: the Atlantic, when you look at the leadership of those banks, 126 00:07:14,440 --> 00:07:16,280 Speaker 1: can you look at it in a binary way? Is 127 00:07:16,320 --> 00:07:19,680 Speaker 1: there a crying stately t M school and then you've 128 00:07:19,720 --> 00:07:21,360 Speaker 1: got the U S executives as well or is it? 129 00:07:21,400 --> 00:07:23,160 Speaker 1: Is it more multifaceted than that when it comes to 130 00:07:23,240 --> 00:07:26,480 Speaker 1: leadership of banks, Well, leadership is key in banking, just 131 00:07:26,520 --> 00:07:29,080 Speaker 1: like it is in business, and it will depend on 132 00:07:29,160 --> 00:07:33,840 Speaker 1: the institution. John Crime inherited a very difficult situation. I 133 00:07:33,880 --> 00:07:37,200 Speaker 1: think he's doing what he can, uh, and it's it's 134 00:07:37,200 --> 00:07:39,240 Speaker 1: going to take a while for Deutsche to come back, 135 00:07:39,320 --> 00:07:42,520 Speaker 1: which they will come back, um. And the reason is 136 00:07:43,000 --> 00:07:45,960 Speaker 1: that the American banks started much earlier in two thousand 137 00:07:46,040 --> 00:07:49,320 Speaker 1: nine to raise capital and write off bad loans. And 138 00:07:49,400 --> 00:07:52,920 Speaker 1: so I think that's really the lead that the American 139 00:07:52,960 --> 00:07:57,480 Speaker 1: banking system has over the European banking system. How prospective, 140 00:07:57,520 --> 00:07:59,680 Speaker 1: how forward looking or banks at this point they still 141 00:07:59,720 --> 00:08:02,280 Speaker 1: cleaning up? What's what's happened to load these couple of 142 00:08:02,360 --> 00:08:04,320 Speaker 1: years back? Or are they able to look forward now 143 00:08:04,360 --> 00:08:06,200 Speaker 1: and to sort of chart a new course what they 144 00:08:06,240 --> 00:08:09,720 Speaker 1: want banking to be, how they want leadership to look like. Well, 145 00:08:09,720 --> 00:08:11,880 Speaker 1: I think in the American banking system, yes, they are 146 00:08:11,920 --> 00:08:17,720 Speaker 1: looking forward and uh they very much want to move ahead. 147 00:08:17,920 --> 00:08:21,920 Speaker 1: They feel that they they're properly capitalized and uh so 148 00:08:22,200 --> 00:08:25,400 Speaker 1: it's a different mentality than with a number of the 149 00:08:25,400 --> 00:08:29,280 Speaker 1: European banks, you know, Deutsche Bank. Uh it's just had 150 00:08:29,320 --> 00:08:31,600 Speaker 1: to raise new capital and probably have to raise some more. 151 00:08:31,960 --> 00:08:35,480 Speaker 1: Credit Suite had to raise capital just recently. They didn't 152 00:08:35,480 --> 00:08:37,040 Speaker 1: think they were going to have to. And then, of 153 00:08:37,040 --> 00:08:39,240 Speaker 1: course you have the situation of Royal Bank of Scotland, 154 00:08:39,240 --> 00:08:41,800 Speaker 1: which is still basically in the hands of the government, 155 00:08:42,120 --> 00:08:44,160 Speaker 1: and that you have to remember when we got to 156 00:08:44,280 --> 00:08:47,800 Speaker 1: the uh to the Great Recession, the largest bank in 157 00:08:47,840 --> 00:08:51,240 Speaker 1: the world was Royal Bank of Scotland. Are the banks 158 00:08:51,360 --> 00:08:56,079 Speaker 1: represented in the Trump administration, Well, certainly Goldman Sachs is represented. 159 00:08:56,880 --> 00:09:00,640 Speaker 1: That's just the the affectation of the time. Very quickly, 160 00:09:00,679 --> 00:09:04,559 Speaker 1: here are the banks. Do they have a visible representative 161 00:09:04,679 --> 00:09:08,600 Speaker 1: in this administration? Well, I think this president has been 162 00:09:08,679 --> 00:09:11,839 Speaker 1: very open to inviting uh, you know, heads of the 163 00:09:11,880 --> 00:09:15,520 Speaker 1: private sector, and one of them is Jamie Diamond, and 164 00:09:15,559 --> 00:09:18,960 Speaker 1: I think Jamie uh is one that that this president 165 00:09:19,000 --> 00:09:22,720 Speaker 1: listens to as well as his economic team. And certainly, uh, 166 00:09:22,800 --> 00:09:24,920 Speaker 1: if you want to say who's the best bank or around, 167 00:09:25,600 --> 00:09:28,480 Speaker 1: Jamie is right there for that title. Okay, Bill Roads, 168 00:09:28,520 --> 00:09:31,520 Speaker 1: thank you so much. William Rose Global Advisors with us 169 00:09:31,520 --> 00:09:45,880 Speaker 1: today David Duratt and Tom Keene in New York. This 170 00:09:45,960 --> 00:09:48,520 Speaker 1: is Polmpics Felance on Bloombergreen. Just a few hours ago, 171 00:09:48,559 --> 00:09:51,439 Speaker 1: he's announced it's by parties in agreement on a spending 172 00:09:51,440 --> 00:09:53,320 Speaker 1: bill that could keep the government open until the end 173 00:09:53,320 --> 00:09:56,240 Speaker 1: of September at one point one trillion dollar spending. But 174 00:09:56,320 --> 00:09:58,240 Speaker 1: always good to get perspective on what's going on in 175 00:09:58,280 --> 00:10:01,200 Speaker 1: Washington from Greg Valley, a chief global strategy to Horizon Investments. 176 00:10:01,240 --> 00:10:03,199 Speaker 1: He joins us this morning from our Bloomberg not None 177 00:10:03,200 --> 00:10:06,360 Speaker 1: one Studios in Washington, DC. Gregg out with his latest note, 178 00:10:06,360 --> 00:10:08,760 Speaker 1: saying this is a sign that both parties actually can 179 00:10:09,360 --> 00:10:11,800 Speaker 1: work together. Greg, as I say, classic good deal where 180 00:10:11,800 --> 00:10:14,400 Speaker 1: neither side is happy. I think so, David, and he 181 00:10:14,520 --> 00:10:17,640 Speaker 1: called me a hopeless optimist, but I do think it's 182 00:10:17,679 --> 00:10:19,880 Speaker 1: not a bad deal. The Democrats got a lot of 183 00:10:19,880 --> 00:10:23,240 Speaker 1: what they wanted. No money for a while, money for NIH, 184 00:10:23,840 --> 00:10:27,800 Speaker 1: no no cuts for planned parenthood, and Trump and the 185 00:10:27,840 --> 00:10:30,040 Speaker 1: Republicans got what they want. They got a lot more 186 00:10:30,080 --> 00:10:34,239 Speaker 1: money for defense, they got some money for UH border security, 187 00:10:34,840 --> 00:10:38,480 Speaker 1: and most importantly, we avoided a shutdown. What does this 188 00:10:38,480 --> 00:10:41,480 Speaker 1: this say about how Congress will work on the Trump 189 00:10:41,480 --> 00:10:43,280 Speaker 1: agenda going forward? Here in other ways, now that we 190 00:10:43,320 --> 00:10:45,319 Speaker 1: have spending out of the way, we're getting spending out 191 00:10:45,360 --> 00:10:46,920 Speaker 1: of the way. What does it say about how they'll 192 00:10:46,960 --> 00:10:49,360 Speaker 1: work on continue to work on healthcare, continue to work 193 00:10:49,360 --> 00:10:51,679 Speaker 1: on taxes, from any other big issues. Well, I don't 194 00:10:51,720 --> 00:10:55,120 Speaker 1: want to get to euphoric, but I because I think 195 00:10:55,160 --> 00:10:58,120 Speaker 1: the health bill is in trouble. It might make it 196 00:10:58,160 --> 00:11:01,080 Speaker 1: in the Senate, but boy, I just don't support for 197 00:11:01,200 --> 00:11:03,120 Speaker 1: something like this in the Senate where a lot of 198 00:11:03,160 --> 00:11:07,920 Speaker 1: moderate Republicans think it's radioactive. But I would say the 199 00:11:07,960 --> 00:11:10,760 Speaker 1: tax cuts are still alive. It's gonna take months and 200 00:11:10,800 --> 00:11:12,760 Speaker 1: months and months. But I think if we can get 201 00:11:12,760 --> 00:11:14,880 Speaker 1: a deal like this on the budget shutdown, it does 202 00:11:14,920 --> 00:11:18,600 Speaker 1: show both parties can compromise. You mentioned that there's no 203 00:11:18,640 --> 00:11:21,920 Speaker 1: money for the wall, that fortification on the southern border explicitly, 204 00:11:21,960 --> 00:11:24,280 Speaker 1: but there is one point five billion in here for 205 00:11:24,360 --> 00:11:27,200 Speaker 1: border security. What is that going to be used for. Yeah, 206 00:11:27,240 --> 00:11:32,040 Speaker 1: I think of electronics stuff, more careful screening. Uh maybe 207 00:11:32,040 --> 00:11:35,439 Speaker 1: more helicopter airplane flights over the border. I mean it's 208 00:11:35,480 --> 00:11:39,160 Speaker 1: had a chilling impact on the illegal immigration already. So 209 00:11:39,280 --> 00:11:41,840 Speaker 1: I think Trump, who always wants to claim a victory, 210 00:11:42,040 --> 00:11:45,079 Speaker 1: no matter, no matter what, Trump can claim some victory 211 00:11:45,120 --> 00:11:48,320 Speaker 1: on this. Uh. Greg, I'm going to rip up the 212 00:11:48,320 --> 00:11:51,040 Speaker 1: script here. Peter Brackott in Los Angeles just retreats a 213 00:11:51,080 --> 00:11:54,680 Speaker 1: photo from a big atrium in Manila of the Trump Tower, 214 00:11:55,320 --> 00:11:59,160 Speaker 1: and it's a big, sprawling screen or photo I'm gonna guess, 215 00:11:59,160 --> 00:12:04,000 Speaker 1: fifty ft long of Ivanka Trump selling the Trump Tower 216 00:12:04,200 --> 00:12:08,040 Speaker 1: real estate. How are we doing on the interesting relationship 217 00:12:08,600 --> 00:12:12,400 Speaker 1: of government and private enterprise of our president? Give us 218 00:12:12,400 --> 00:12:15,959 Speaker 1: an update? Well, Tom, I mean, there's conflicts everywhere, whether 219 00:12:16,040 --> 00:12:19,040 Speaker 1: it's his kids, whether it's his wife, whether it's him 220 00:12:19,040 --> 00:12:22,880 Speaker 1: personally and his hotels and golf courses. There's conflicts everywhere. 221 00:12:22,920 --> 00:12:26,319 Speaker 1: And I tell my clients, Look, there's gonna be controversies 222 00:12:26,720 --> 00:12:30,880 Speaker 1: ad nauseum. However, I think the climate for investors, the 223 00:12:30,960 --> 00:12:33,880 Speaker 1: climate for the market as a whole, is pretty good. 224 00:12:34,080 --> 00:12:39,000 Speaker 1: Did President Bush Sr. Have the same conflicts as he 225 00:12:39,120 --> 00:12:42,400 Speaker 1: was an oil guy? In Texas. That's a different era. 226 00:12:42,559 --> 00:12:45,720 Speaker 1: I mean, Trump breaks the rules. He's pretty far outside 227 00:12:45,720 --> 00:12:48,520 Speaker 1: of the box on a lot of stuff. But you knows, 228 00:12:48,640 --> 00:12:51,559 Speaker 1: as you and I and David have talked before, that 229 00:12:51,679 --> 00:12:56,400 Speaker 1: this is a very very pro business, pro Wall Street administration. 230 00:12:56,880 --> 00:12:59,800 Speaker 1: We've seen signs of that everywhere. So I think again, 231 00:12:59,800 --> 00:13:02,640 Speaker 1: if we take the narrow prism of what this means 232 00:13:02,720 --> 00:13:05,680 Speaker 1: for the markets, this is not a bad story. What 233 00:13:05,760 --> 00:13:08,600 Speaker 1: do you make of the prison did Tete news, the 234 00:13:08,640 --> 00:13:11,880 Speaker 1: President inviting him to the White House. Obviously we're familiar 235 00:13:11,920 --> 00:13:15,160 Speaker 1: with his background and record thus far, the controversy surrounding 236 00:13:15,160 --> 00:13:16,920 Speaker 1: all of this, Why why do this when you look 237 00:13:16,920 --> 00:13:19,000 Speaker 1: at leaders whom he could invite, when you look at 238 00:13:19,000 --> 00:13:22,240 Speaker 1: geo political significance, this seems small compared to others. Why 239 00:13:22,280 --> 00:13:24,240 Speaker 1: do this to you? Yeah, it's Trump being Trump. You 240 00:13:24,280 --> 00:13:26,880 Speaker 1: know he had they had of Egypt Dan who has 241 00:13:26,920 --> 00:13:32,520 Speaker 1: a similarly uh unfavorable human rights record, and then he 242 00:13:32,720 --> 00:13:37,520 Speaker 1: is attracted to very very strong dictators who sometimes trample 243 00:13:37,600 --> 00:13:40,920 Speaker 1: on human rights. That's just that's just Trump being Trump. 244 00:13:41,720 --> 00:13:43,880 Speaker 1: I want to ask you about the role that his 245 00:13:43,960 --> 00:13:46,000 Speaker 1: advisers are playing at this point, especially when it comes 246 00:13:46,040 --> 00:13:49,640 Speaker 1: to tax reformer home four of them form. But we 247 00:13:49,720 --> 00:13:52,280 Speaker 1: saw Gary Cohne there and and Treasury Sectory Steve Manusian 248 00:13:52,360 --> 00:13:55,120 Speaker 1: rolling out being the face of this tax reform plan. 249 00:13:55,200 --> 00:13:56,480 Speaker 1: And we know that Steve Minusan is going to be 250 00:13:56,480 --> 00:13:59,080 Speaker 1: at the Milk and Global Conference this week talking more 251 00:13:59,120 --> 00:14:01,640 Speaker 1: about it. What why picked them to do it? How 252 00:14:01,679 --> 00:14:04,000 Speaker 1: are they doing and what's the message that they're carrying here? 253 00:14:04,080 --> 00:14:06,440 Speaker 1: These two guys, Well, first of all, Tom made a choke, 254 00:14:06,520 --> 00:14:09,839 Speaker 1: but it was half serious, I'm sure, And that this 255 00:14:09,920 --> 00:14:13,439 Speaker 1: group is really understaffed. I mean they don't even have 256 00:14:13,640 --> 00:14:17,440 Speaker 1: a third of the aids that they need in all 257 00:14:17,600 --> 00:14:20,760 Speaker 1: the government agencies to get things done. That said, I 258 00:14:20,800 --> 00:14:24,880 Speaker 1: think Cone in particular is first rate. He knows Washington, 259 00:14:25,200 --> 00:14:27,760 Speaker 1: he knows how to get things done. I think he's 260 00:14:27,800 --> 00:14:30,400 Speaker 1: going to be a major driver on this bill. And 261 00:14:31,240 --> 00:14:33,320 Speaker 1: I do think that, you know, people like to knock 262 00:14:33,480 --> 00:14:36,720 Speaker 1: Goldman Sachs, but if you're an investor, if you're just 263 00:14:36,840 --> 00:14:40,200 Speaker 1: looking at the markets, having a Goldman Sachs dominance in 264 00:14:40,240 --> 00:14:43,120 Speaker 1: this White House is a good story. Oh good dude, 265 00:14:43,280 --> 00:14:45,040 Speaker 1: I just gonna ask you who you're listening to. Of 266 00:14:45,080 --> 00:14:46,960 Speaker 1: the two of them, I've been struck by how more 267 00:14:47,000 --> 00:14:49,360 Speaker 1: at ease. Steve Nustian seems now when he's speaking starting 268 00:14:49,360 --> 00:14:51,200 Speaker 1: at that i F conference before the the i m 269 00:14:51,240 --> 00:14:53,280 Speaker 1: F meeting. Yeah, the word on manut In a month 270 00:14:53,360 --> 00:14:55,600 Speaker 1: or so ago is that he had a lot to learn, 271 00:14:55,640 --> 00:14:58,800 Speaker 1: that there was there were many aspects of tax refor 272 00:14:58,840 --> 00:15:01,040 Speaker 1: him he was not familiar with. But I think he's 273 00:15:01,040 --> 00:15:04,640 Speaker 1: a quick study. I think Cone has sharp elbows, and 274 00:15:05,000 --> 00:15:08,200 Speaker 1: also as a quick study, I wouldn't underestimate either of 275 00:15:08,240 --> 00:15:10,880 Speaker 1: these two guys, gregor thank you so much, great VILLI 276 00:15:10,880 --> 00:15:15,880 Speaker 1: here with the Surrison Investments writing a really sharp elbow, 277 00:15:15,920 --> 00:15:18,880 Speaker 1: you know, talking about sharp elbows. A sharp elbow. Morning 278 00:15:18,920 --> 00:15:22,040 Speaker 1: note David Garrow from Greg Villier. He really cuts to 279 00:15:22,120 --> 00:15:27,800 Speaker 1: the chase. We could live exquisitely, David Garrow. Trump Tower, Manila, 280 00:15:28,160 --> 00:15:33,600 Speaker 1: the philippines most illustrious residential skyscraper. Show room is open 281 00:15:33,680 --> 00:15:37,920 Speaker 1: for viewing by appointment only. I can't read the floor number. 282 00:15:38,000 --> 00:15:43,480 Speaker 1: Pacific Star Building, Maccatty. I believe it is Maccatty City 283 00:15:43,760 --> 00:15:49,880 Speaker 1: and MS Trump is there. The younger, the younger, she's um, 284 00:15:49,920 --> 00:15:53,520 Speaker 1: I guess we'll welcoming you. Do you have a price 285 00:15:53,560 --> 00:15:56,160 Speaker 1: on any of this? Down below there's a white banner 286 00:15:57,000 --> 00:16:01,880 Speaker 1: something about Ivanka Trump find jewelry collection. I'm not kidding. 287 00:16:02,080 --> 00:16:04,400 Speaker 1: I mean, I'm sure I'm missing some of this, but 288 00:16:04,440 --> 00:16:08,320 Speaker 1: there it is. Anyways, it's a new world. David gur 289 00:16:08,440 --> 00:16:11,600 Speaker 1: and Tom Keene stay with us worldwide coast to coast. 290 00:16:11,960 --> 00:16:29,000 Speaker 1: This is Bloomberg. David bringing our distinguished guest from Southeast Asia. Yeah, 291 00:16:29,040 --> 00:16:30,720 Speaker 1: great to have with us. And yeah, Gary zz he's 292 00:16:30,760 --> 00:16:33,480 Speaker 1: the head of Emerging Markets Asia Economic Research at Shape Morgan. 293 00:16:33,520 --> 00:16:35,520 Speaker 1: He's the former head of the China division at the 294 00:16:35,520 --> 00:16:38,000 Speaker 1: International Monetary Fund. He joins us on our phone line. 295 00:16:38,000 --> 00:16:40,320 Speaker 1: Great to speak with you once again. And let's let's 296 00:16:40,320 --> 00:16:43,320 Speaker 1: dig into emerging markets in Asia here for a moment. 297 00:16:43,360 --> 00:16:45,680 Speaker 1: When when when you look at them, when you consider them, 298 00:16:45,720 --> 00:16:47,800 Speaker 1: do you do that exclusive of China? How big a 299 00:16:47,880 --> 00:16:52,040 Speaker 1: role does China play in the region generally? I mean 300 00:16:52,200 --> 00:16:55,200 Speaker 1: it's it's very big. I think if you look at 301 00:16:55,680 --> 00:17:01,600 Speaker 1: you know, just China's exports uh to um countries that 302 00:17:01,640 --> 00:17:04,800 Speaker 1: are not to the non emerging market countries, so to 303 00:17:04,920 --> 00:17:08,639 Speaker 1: the G three countries. Let's say us in Japan, and 304 00:17:08,880 --> 00:17:12,280 Speaker 1: you look at you know, what goes into China from 305 00:17:12,320 --> 00:17:16,879 Speaker 1: the region to support that trade. It's massive. Uh So 306 00:17:17,040 --> 00:17:21,359 Speaker 1: into regional trade. If you break down the uh, you know, 307 00:17:21,440 --> 00:17:24,320 Speaker 1: the emerging markets Asia as a whole, I would say 308 00:17:24,320 --> 00:17:29,240 Speaker 1: about third of the trade that countries do outside of 309 00:17:29,320 --> 00:17:33,160 Speaker 1: China in the region is essentially related to the demand 310 00:17:33,760 --> 00:17:36,560 Speaker 1: uh that goes from you know, not the exports that 311 00:17:37,440 --> 00:17:40,840 Speaker 1: China does t G three countries. Then there is, of course, 312 00:17:40,880 --> 00:17:45,479 Speaker 1: you know, China's own demand for domestic consumption UH, and 313 00:17:45,560 --> 00:17:49,280 Speaker 1: that's rising. Uh. It's still not the big driver of 314 00:17:49,600 --> 00:17:52,639 Speaker 1: exports that come out from the region into China, but 315 00:17:52,720 --> 00:17:55,560 Speaker 1: it's but it's getting there. UM. So you know, but 316 00:17:56,040 --> 00:17:59,280 Speaker 1: if you take the two together, it's uh, it's it's 317 00:17:59,320 --> 00:18:02,240 Speaker 1: it's it's a pretty big here for the rest of 318 00:18:02,240 --> 00:18:05,399 Speaker 1: the division. What what happens to China. We talked to 319 00:18:05,400 --> 00:18:08,280 Speaker 1: a lot of investors and economists here in the US 320 00:18:08,480 --> 00:18:11,040 Speaker 1: who say that trade policy, US trade policy is a 321 00:18:11,119 --> 00:18:14,680 Speaker 1: huge X factor for US investors from where you sit, 322 00:18:15,119 --> 00:18:17,720 Speaker 1: For investors in Asia, how does the rhetoric from the 323 00:18:17,760 --> 00:18:21,120 Speaker 1: White House ring out across across the Pacific? How big 324 00:18:21,119 --> 00:18:24,240 Speaker 1: an X factor is it for you? It's it's it's 325 00:18:24,320 --> 00:18:25,880 Speaker 1: it's it's a big thing. I mean, if you think 326 00:18:25,920 --> 00:18:29,600 Speaker 1: about where we were just before the elections, let's say 327 00:18:29,600 --> 00:18:33,480 Speaker 1: in November six, we have gone through almost about four 328 00:18:33,560 --> 00:18:38,840 Speaker 1: or five months before that offer reasonably strong UM, you know, 329 00:18:38,880 --> 00:18:44,679 Speaker 1: emerging market out performance happen, out performance versus developed markets, UM, 330 00:18:44,800 --> 00:18:48,119 Speaker 1: you know, growth which had been sliding down. I'm talking 331 00:18:48,119 --> 00:18:51,879 Speaker 1: about overall emerging market stuff for good Husbands ten right up, 332 00:18:51,920 --> 00:18:56,359 Speaker 1: Good Husband fifteen had begun to stabilize and show some recovery. 333 00:18:57,080 --> 00:19:00,520 Speaker 1: And you know people had if you if you looked 334 00:19:00,520 --> 00:19:03,480 Speaker 1: at their two thousand and seventeen and eighteen forecasts back 335 00:19:03,520 --> 00:19:07,719 Speaker 1: in November of CCUND succeed, almost everyone would be looking 336 00:19:07,800 --> 00:19:12,600 Speaker 1: at some modest recovery taking place across the emerging market world. 337 00:19:12,640 --> 00:19:16,159 Speaker 1: And that was essentially that was driving this out performance 338 00:19:16,200 --> 00:19:20,400 Speaker 1: of emerging market assets versus t massets. And then came UH, 339 00:19:20,600 --> 00:19:24,760 Speaker 1: the surprise election result and the influence that people drew. 340 00:19:24,880 --> 00:19:28,959 Speaker 1: The twofold right one more that um, you would get 341 00:19:29,000 --> 00:19:33,959 Speaker 1: a fiscally phiscal stimulus in UH in the in the 342 00:19:34,080 --> 00:19:37,080 Speaker 1: US to push up US growth, and that would have 343 00:19:37,200 --> 00:19:43,000 Speaker 1: the inevitable foundsequence and raising global financial typical refracial conditions, 344 00:19:43,080 --> 00:19:45,720 Speaker 1: which was bad for Asia. And the other one was 345 00:19:45,760 --> 00:19:48,679 Speaker 1: that it could most to be accompanied by trade projectionism, 346 00:19:48,880 --> 00:19:51,880 Speaker 1: which was directly by So the combination of two of them. 347 00:19:51,960 --> 00:19:56,600 Speaker 1: You saw November and December a significant amount of capital 348 00:19:56,600 --> 00:20:00,119 Speaker 1: housers that left emerging market including an issue. So it 349 00:20:00,400 --> 00:20:04,040 Speaker 1: doesn't matter what the rhetoric is. And as a rhetoric 350 00:20:04,119 --> 00:20:08,840 Speaker 1: calmed down over January severy much. You saw capital flows 351 00:20:08,920 --> 00:20:12,560 Speaker 1: back into the marsh boxing right. You wrote wonderful work 352 00:20:13,000 --> 00:20:15,520 Speaker 1: over ten years ago with s Y Perscade for the 353 00:20:15,520 --> 00:20:19,960 Speaker 1: International Monetary Fund. You were focused on growth. We all 354 00:20:20,000 --> 00:20:23,760 Speaker 1: are now and there is a mystery to emerging market 355 00:20:23,840 --> 00:20:27,159 Speaker 1: growth is the global To use two big words, is 356 00:20:27,160 --> 00:20:31,679 Speaker 1: the globalization yonder and the capitalism of e M. The 357 00:20:31,840 --> 00:20:35,080 Speaker 1: same now is when you wrote those iconic pieces with 358 00:20:35,200 --> 00:20:41,760 Speaker 1: done Away in in prisade Um, I think the biggest 359 00:20:41,840 --> 00:20:44,280 Speaker 1: change that is taking place, I would say, But the 360 00:20:44,440 --> 00:20:48,000 Speaker 1: when we had written that piece and now is that 361 00:20:48,160 --> 00:20:51,480 Speaker 1: at that point in time all of us sort of 362 00:20:52,000 --> 00:20:57,560 Speaker 1: thought that globalization or the extension of trade me slow down. 363 00:20:57,960 --> 00:21:01,720 Speaker 1: But it wouldn't you know the sup here uh. If 364 00:21:01,720 --> 00:21:04,520 Speaker 1: you look at what happened since two thousands and ten, 365 00:21:05,040 --> 00:21:08,920 Speaker 1: a global trade has has languaged and over the last 366 00:21:08,920 --> 00:21:13,199 Speaker 1: two years in volume terms, its turned negative. In the 367 00:21:13,280 --> 00:21:16,800 Speaker 1: last two years. Also, global trade has expanded at a 368 00:21:16,920 --> 00:21:21,919 Speaker 1: place lower than GDP, which hasn't happened over twenty thirty years. 369 00:21:22,280 --> 00:21:24,480 Speaker 1: And if you look at the emerging market growth, and 370 00:21:25,040 --> 00:21:27,760 Speaker 1: I usually do this when I'm making a presentation, I 371 00:21:27,800 --> 00:21:32,040 Speaker 1: have emerging market real GDP growth and I have global 372 00:21:32,080 --> 00:21:35,480 Speaker 1: trade growth. Uh you know, the two lines are basically 373 00:21:35,480 --> 00:21:39,119 Speaker 1: the same lines. Uh So, in a sense, emerging markets 374 00:21:39,119 --> 00:21:43,320 Speaker 1: over that period from early two thousand IULD say two 375 00:21:43,359 --> 00:21:49,080 Speaker 1: thousand and ten benefited enormously from you know, I use 376 00:21:49,160 --> 00:21:53,560 Speaker 1: the word easy growth uh so to speak, but really 377 00:21:53,680 --> 00:21:57,320 Speaker 1: emerging markets didn't really have to do any major uh 378 00:21:57,440 --> 00:22:02,960 Speaker 1: structural reforms since enemy what about the growth? And now 379 00:22:03,000 --> 00:22:06,639 Speaker 1: that that that two percent three percentage points of growth 380 00:22:06,720 --> 00:22:10,920 Speaker 1: that globalization gave emerging markets has gone, and now it's 381 00:22:10,960 --> 00:22:14,280 Speaker 1: a hard stuff. You have to go back and do 382 00:22:14,359 --> 00:22:16,760 Speaker 1: the ones that you have postponed over the last ten 383 00:22:16,880 --> 00:22:20,600 Speaker 1: years because you had that cover, which was globalization delivering 384 00:22:20,640 --> 00:22:23,280 Speaker 1: you two hundred step and the basis points of growth. 385 00:22:24,160 --> 00:22:27,720 Speaker 1: And that's where I think we are that emerging markets 386 00:22:27,840 --> 00:22:32,720 Speaker 1: really need to rebalance their growth drivers. You know, I'm 387 00:22:32,760 --> 00:22:37,840 Speaker 1: not saying that you abandon experts, but you can't completely 388 00:22:37,840 --> 00:22:40,600 Speaker 1: rely only on one engine of growth, which is experts. 389 00:22:40,640 --> 00:22:43,560 Speaker 1: You have to start looking at domestic demand as a 390 00:22:43,560 --> 00:22:48,920 Speaker 1: source of growth. And unfortunately, apart from China, I don't 391 00:22:48,960 --> 00:22:53,920 Speaker 1: see any emerging market actually shifting their design of policy 392 00:22:53,960 --> 00:22:59,280 Speaker 1: and reforms UH to move towards more domestically driven growth. 393 00:22:59,720 --> 00:23:02,600 Speaker 1: Is the role of central banking changing in emerging markets 394 00:23:02,600 --> 00:23:08,399 Speaker 1: as you see it? Um, you know, he hasn't no 395 00:23:08,560 --> 00:23:12,159 Speaker 1: understand that if you went back, let's say, you know 396 00:23:12,400 --> 00:23:16,359 Speaker 1: early too housing central banks at that point in time 397 00:23:16,480 --> 00:23:20,720 Speaker 1: in emerging market had multiple objectives someone's development. You have 398 00:23:20,760 --> 00:23:23,919 Speaker 1: to develop capital markets, some was protective, you have to 399 00:23:23,960 --> 00:23:27,200 Speaker 1: protect your banking sector. And then there was a very 400 00:23:27,359 --> 00:23:31,600 Speaker 1: uneasy balance between you know, do you support the government's 401 00:23:31,640 --> 00:23:35,480 Speaker 1: fiscal profligacy or your don I think the emerging market 402 00:23:35,800 --> 00:23:40,440 Speaker 1: banking central banks today have most of them have different 403 00:23:40,600 --> 00:23:44,080 Speaker 1: I've gone to a point where financial stability and prices 404 00:23:44,080 --> 00:23:47,119 Speaker 1: are basically what they should focus on. Let's continue with 405 00:23:47,240 --> 00:23:51,400 Speaker 1: your hunger. I sees from Singapore today JP Morgan Emerging 406 00:23:51,480 --> 00:23:55,479 Speaker 1: Market Asia Economic research UH for the bank and of 407 00:23:55,480 --> 00:23:58,320 Speaker 1: course with his sterling career at the International Monetary Fund 408 00:23:58,800 --> 00:24:01,280 Speaker 1: years ago, that's a very importan in comment there and 409 00:24:01,400 --> 00:24:04,080 Speaker 1: the new growth for emerging markets. David's going to be 410 00:24:04,160 --> 00:24:07,840 Speaker 1: very very uh different for em coming up. Let's continue 411 00:24:07,840 --> 00:24:10,680 Speaker 1: our conversation with Young Garzes, head of Emerging Markets Asia, 412 00:24:10,760 --> 00:24:13,960 Speaker 1: Economic researcher JP Morgan, formerhead of the China division at 413 00:24:13,960 --> 00:24:16,320 Speaker 1: the International Monetary Fund, with us on our phone line 414 00:24:16,560 --> 00:24:20,200 Speaker 1: sponsored by Specium Enterprise, your nationwide provider of scalable fiber 415 00:24:20,240 --> 00:24:23,560 Speaker 1: network services and managed clouds solutions. A few minutes ago 416 00:24:23,600 --> 00:24:25,560 Speaker 1: we were talking about the role of central banks. Let 417 00:24:25,600 --> 00:24:29,199 Speaker 1: me ask you about communication and transparency. Are are we 418 00:24:29,240 --> 00:24:33,400 Speaker 1: getting anything close to a more transparent, more communicative Chinese 419 00:24:33,400 --> 00:24:39,119 Speaker 1: Central Bank? Good trying. I think the big change took place, 420 00:24:39,280 --> 00:24:42,920 Speaker 1: you know when uh in two thousand sixteen, they shifted 421 00:24:42,960 --> 00:24:46,840 Speaker 1: to a basket bag and the first few days, we're 422 00:24:46,920 --> 00:24:50,720 Speaker 1: really disconcerting to the market because no one really knew 423 00:24:51,240 --> 00:24:55,200 Speaker 1: what this new animal meant um and he saw that 424 00:24:55,280 --> 00:24:58,760 Speaker 1: destruction in the market, and the Chinese authorities looked at 425 00:24:58,760 --> 00:25:02,000 Speaker 1: the destruction, and one of the lessons I've learned was 426 00:25:02,040 --> 00:25:05,960 Speaker 1: that it needed to be properly communicated. And I think 427 00:25:06,320 --> 00:25:09,960 Speaker 1: that over that period of time, So, you know, December 428 00:25:10,040 --> 00:25:13,800 Speaker 1: two thousands of teen, uh, you know, twoout two thousands succeed. 429 00:25:13,960 --> 00:25:18,080 Speaker 1: I think they have tried, uh to communicate, you know 430 00:25:18,200 --> 00:25:21,720 Speaker 1: better at least the you know, thesex part of the 431 00:25:22,160 --> 00:25:25,119 Speaker 1: foreign exchange part of their policy. Uh. And if you 432 00:25:25,119 --> 00:25:27,920 Speaker 1: look at I know how markets have reacted. The market 433 00:25:28,000 --> 00:25:31,920 Speaker 1: have accepted, um, you know, much of their arguments and 434 00:25:32,280 --> 00:25:35,880 Speaker 1: use and and you know, even in January February this year, 435 00:25:36,359 --> 00:25:38,879 Speaker 1: when one has one you know, but we're over concerns 436 00:25:38,960 --> 00:25:42,840 Speaker 1: that the US called label China and fex manipulator. You 437 00:25:43,000 --> 00:25:48,080 Speaker 1: did not see the market react, uh, you know assciously 438 00:25:48,160 --> 00:25:51,560 Speaker 1: as it you know, back then in the early days 439 00:25:51,560 --> 00:25:53,280 Speaker 1: of the basket PEC. So I would say, at least 440 00:25:53,320 --> 00:25:56,399 Speaker 1: in the part of the fun they have tried to communicate, 441 00:25:56,440 --> 00:26:00,520 Speaker 1: and the communication is becoming much better to day down 442 00:26:00,680 --> 00:26:03,000 Speaker 1: in the bast. After your tenure with the I m F, 443 00:26:03,040 --> 00:26:04,680 Speaker 1: you went to India. I believe you worked with JP 444 00:26:04,800 --> 00:26:07,120 Speaker 1: Morgan there. I wanted to get your sense of sort 445 00:26:07,119 --> 00:26:10,000 Speaker 1: of how this demonetization process is going. I had the 446 00:26:10,000 --> 00:26:12,160 Speaker 1: pleasure of talking with Martia sent a couple of weeks 447 00:26:12,200 --> 00:26:15,160 Speaker 1: back here in New York on his perspective on on 448 00:26:15,200 --> 00:26:17,920 Speaker 1: what he thought was a rather botched operation there. How's 449 00:26:17,920 --> 00:26:20,040 Speaker 1: it playing out now? That that several months have elapsed, 450 00:26:21,760 --> 00:26:25,359 Speaker 1: so you know, um, you still have a significitant amount 451 00:26:25,440 --> 00:26:28,040 Speaker 1: of excess libility sitting with the bank. So if you 452 00:26:28,080 --> 00:26:32,080 Speaker 1: think about how the monetization started, you could no longer 453 00:26:32,560 --> 00:26:35,280 Speaker 1: use your existing notes, so you have to go to 454 00:26:35,359 --> 00:26:38,760 Speaker 1: a bank deposit those notes. So the first thing that 455 00:26:38,840 --> 00:26:41,880 Speaker 1: happened was that bank deposits just went through the roof, 456 00:26:42,320 --> 00:26:45,880 Speaker 1: almost like additional eight percentage points of GDP came into 457 00:26:45,880 --> 00:26:50,760 Speaker 1: the banks. Then, over the course of the period, uh, 458 00:26:51,160 --> 00:26:55,080 Speaker 1: people withdrew cash and given that there were limits to 459 00:26:55,160 --> 00:26:58,760 Speaker 1: how much cash you could draw, just the physical limits something. Uh, 460 00:26:59,200 --> 00:27:02,680 Speaker 1: it's going to take our senses that another twelve eighteen 461 00:27:02,720 --> 00:27:06,320 Speaker 1: months before all of the cash that people require will 462 00:27:06,359 --> 00:27:09,959 Speaker 1: be the systems. So the first impact on the banking 463 00:27:10,040 --> 00:27:13,040 Speaker 1: system as being that you know that eight percentage points 464 00:27:13,080 --> 00:27:16,840 Speaker 1: in additional deposit has slowly gone down, perhaps to around 465 00:27:16,880 --> 00:27:21,280 Speaker 1: five and a half percentage points uh at present, but 466 00:27:21,400 --> 00:27:24,800 Speaker 1: it's still a very large amount of liquidity sitting in 467 00:27:24,840 --> 00:27:27,800 Speaker 1: the backing system. And that's clearly what there is a 468 00:27:27,920 --> 00:27:31,440 Speaker 1: backup India. So you know, um, you know, apart from 469 00:27:31,520 --> 00:27:35,480 Speaker 1: the growth impact, another such thing there is this uh, 470 00:27:35,520 --> 00:27:38,800 Speaker 1: you know, a huge amount of litility setting and it 471 00:27:38,960 --> 00:27:42,399 Speaker 1: is going to pay another twelve months to do participate. 472 00:27:42,800 --> 00:27:44,840 Speaker 1: And so you know what does the rb I do 473 00:27:45,720 --> 00:27:49,199 Speaker 1: at this point? And that's where I think is the 474 00:27:49,240 --> 00:27:51,800 Speaker 1: biggest concern at this point in time, just from looking 475 00:27:51,960 --> 00:27:54,159 Speaker 1: looking at it from a markets point of view that 476 00:27:54,280 --> 00:27:56,600 Speaker 1: Jerseys I brought this up with William Rhodes this morning. 477 00:27:56,680 --> 00:27:58,760 Speaker 1: Let me ask you the same question. Give us a 478 00:27:58,840 --> 00:28:02,000 Speaker 1: state of the tigers. There was an iconic moment where 479 00:28:02,040 --> 00:28:05,439 Speaker 1: these nations coming from a low base that were the 480 00:28:05,480 --> 00:28:11,080 Speaker 1: Asian tigers out tiger ish are the Asian tigers I think, 481 00:28:11,200 --> 00:28:12,919 Speaker 1: I think at this point in time, and not at 482 00:28:12,960 --> 00:28:15,119 Speaker 1: this point in time. For quite some time, they have 483 00:28:15,440 --> 00:28:19,159 Speaker 1: been caught in what is typically known as middle income craft. 484 00:28:20,280 --> 00:28:23,880 Speaker 1: That they reached very quickly the middle income group, and then, 485 00:28:24,800 --> 00:28:27,800 Speaker 1: as as in the case with many middle income countries, 486 00:28:27,840 --> 00:28:32,080 Speaker 1: particularly in Latin America, UH, the next set of reforms 487 00:28:32,119 --> 00:28:34,440 Speaker 1: that you need to do to make the next leap 488 00:28:34,920 --> 00:28:38,760 Speaker 1: that never really came forthcoming. I mean, people got comfortable 489 00:28:38,840 --> 00:28:43,640 Speaker 1: with their middle income status and no longer was that 490 00:28:43,880 --> 00:28:47,240 Speaker 1: hunger to keep growth to keep at the at the 491 00:28:47,320 --> 00:28:51,960 Speaker 1: six seven percent level. UH. And there was an acceptance 492 00:28:52,000 --> 00:28:55,040 Speaker 1: that well, growth is going to snowdown, and the society 493 00:28:55,080 --> 00:29:00,240 Speaker 1: and the politics and the economy essentially have accepted at 494 00:29:00,960 --> 00:29:03,560 Speaker 1: middle level of growth. So I think at this point 495 00:29:03,640 --> 00:29:05,960 Speaker 1: in time, as a general statement, you know, not going 496 00:29:06,000 --> 00:29:09,040 Speaker 1: through diffree countries, but a general statement, it's sort of 497 00:29:09,400 --> 00:29:13,200 Speaker 1: in that typical middle and contract that these uh you know, 498 00:29:13,240 --> 00:29:17,560 Speaker 1: old Asian tigers have been caught into right now when 499 00:29:17,560 --> 00:29:19,280 Speaker 1: you look at and when you look at emerging markets, 500 00:29:19,320 --> 00:29:23,000 Speaker 1: broadly emerging markets in Asia, where is their opportunity that 501 00:29:23,080 --> 00:29:25,600 Speaker 1: might be ignored or not known about too many investors 502 00:29:25,640 --> 00:29:28,120 Speaker 1: here in the States. We talk a lot about China, 503 00:29:28,200 --> 00:29:31,400 Speaker 1: we talk a lot about India, increasingly about India. What 504 00:29:31,680 --> 00:29:33,720 Speaker 1: are some of the smaller markets that are particularly interesting 505 00:29:33,760 --> 00:29:36,960 Speaker 1: to you right now? Right so, I would say that, 506 00:29:37,040 --> 00:29:39,800 Speaker 1: you know, keep looking at I mean, start looking at 507 00:29:39,800 --> 00:29:43,560 Speaker 1: the Indonesia for example. Uh you know there you know, 508 00:29:43,920 --> 00:29:46,959 Speaker 1: in depending upon rich side, whether you're a fixed income 509 00:29:47,320 --> 00:29:53,080 Speaker 1: UH investor or equity investor, you have opportunities for example 510 00:29:53,200 --> 00:29:56,240 Speaker 1: that in the sense that this is one economy where 511 00:29:56,800 --> 00:30:01,040 Speaker 1: despite political and sensing these in political pressures, have so 512 00:30:01,040 --> 00:30:06,320 Speaker 1: so far have not abandoned macro economic stability for short 513 00:30:06,400 --> 00:30:09,320 Speaker 1: term growth. Uh So I think there's a lot of 514 00:30:09,360 --> 00:30:13,920 Speaker 1: comfort a fixed income investors drive derived from that commitment 515 00:30:14,240 --> 00:30:17,120 Speaker 1: to macro economy stability. At the same time they have 516 00:30:17,280 --> 00:30:21,000 Speaker 1: been slowly pushing on you know, dinostis and the economy 517 00:30:21,080 --> 00:30:25,280 Speaker 1: or expanding economy through infrastructures, etcetera, cetera, etcetera, And so 518 00:30:25,360 --> 00:30:27,840 Speaker 1: there is space for equity investors. So I would say, 519 00:30:28,120 --> 00:30:32,160 Speaker 1: you know, look at Indonesia. Uh, you know, their commitment 520 00:30:32,320 --> 00:30:34,400 Speaker 1: so far, despite the fact that you know, you have 521 00:30:34,440 --> 00:30:37,920 Speaker 1: elections coming into that ninety as an India, Uh, you 522 00:30:37,960 --> 00:30:41,320 Speaker 1: should you know, you should start looking at that beyond 523 00:30:41,480 --> 00:30:45,320 Speaker 1: the Asian Amber. I would say, uh, you know, although 524 00:30:45,360 --> 00:30:49,160 Speaker 1: the you know, the Turkey and Busil stands out that 525 00:30:49,880 --> 00:30:53,240 Speaker 1: I mean just in case of in the case of Brazil, Uh, 526 00:30:53,280 --> 00:30:56,560 Speaker 1: you know, if they even do half of the structural 527 00:30:56,680 --> 00:31:01,120 Speaker 1: reforms that they're witting too, uh, it is a big 528 00:31:01,160 --> 00:31:05,200 Speaker 1: deal an economy of the sides of Prasil. Uh, similar 529 00:31:05,280 --> 00:31:07,200 Speaker 1: to the Turkish. I mean, they don't really need to 530 00:31:07,240 --> 00:31:10,160 Speaker 1: do all goog froms even if they do half of them. H. 531 00:31:10,360 --> 00:31:13,560 Speaker 1: These guys could be a very strong account Younger, Thank 532 00:31:13,600 --> 00:31:17,440 Speaker 1: you so much. Younger. Disease with JP Morgan, Singapore Thank 533 00:31:17,480 --> 00:31:25,680 Speaker 1: you so much for joining us. Brought you by Bank 534 00:31:25,720 --> 00:31:29,760 Speaker 1: of America. Mary Lynch. Dedicated to bringing our clients insights 535 00:31:29,760 --> 00:31:33,400 Speaker 1: and solutions to meet the challenges of a transforming world. 536 00:31:33,880 --> 00:31:37,600 Speaker 1: That's the power of global connections. Mary Lynch, Pierce Feeder 537 00:31:37,680 --> 00:31:47,160 Speaker 1: and Smith Incorporated Member s I p C. There's something 538 00:31:47,160 --> 00:31:50,600 Speaker 1: new from Bloomberg. It's called Lens. Starting right now, you 539 00:31:50,600 --> 00:31:53,840 Speaker 1: can use the Bloomberg Io s app off your iPhone 540 00:31:53,960 --> 00:31:58,600 Speaker 1: or iPad, or our new Google Chrome extension to read 541 00:31:58,640 --> 00:32:02,560 Speaker 1: any news story on any website. Scan it, and then 542 00:32:02,640 --> 00:32:06,760 Speaker 1: instantly you see the news stories relevant market data from Bloomberg. 543 00:32:07,080 --> 00:32:10,200 Speaker 1: In addition, see all the bios of the key people 544 00:32:10,640 --> 00:32:13,840 Speaker 1: mentioned in the story. It's called lens, and it is 545 00:32:13,880 --> 00:32:17,000 Speaker 1: just that, a lens into the people and the data 546 00:32:17,080 --> 00:32:21,360 Speaker 1: of any story you may be reading. Again, Lens brings 547 00:32:21,360 --> 00:32:24,600 Speaker 1: you the power of Bloomberg's news and data. Download or 548 00:32:24,640 --> 00:32:28,040 Speaker 1: Io s app or search for the Bloomberg extension at 549 00:32:28,040 --> 00:32:31,360 Speaker 1: the Chrome Store to try lens out. Learn more at 550 00:32:31,360 --> 00:32:39,040 Speaker 1: Bloomberg dot com. Slash lens everything. You just got short 551 00:32:39,160 --> 00:32:42,880 Speaker 1: term David in the room when Anthony Krisensi walks and 552 00:32:42,920 --> 00:32:47,520 Speaker 1: we get short term, A very short term. Do you 553 00:32:47,560 --> 00:32:49,880 Speaker 1: want to bring him in. Yeah, I'd love to, Tony 554 00:32:49,920 --> 00:32:55,120 Speaker 1: portfolio manature. This is not stochastic, technical and starcastic. Fibonacci 555 00:32:55,160 --> 00:32:58,200 Speaker 1: has left the building, Tony to see great to see here. 556 00:32:58,760 --> 00:33:01,400 Speaker 1: How would you write your optimist m about the economy, 557 00:33:01,400 --> 00:33:05,400 Speaker 1: about the market on this Monday, the first of May. Um, Well, 558 00:33:05,440 --> 00:33:08,760 Speaker 1: we'd say that markets are to a great extent fully 559 00:33:08,800 --> 00:33:12,640 Speaker 1: priced for the future of what is to come in Washington. 560 00:33:12,880 --> 00:33:15,320 Speaker 1: What happened over the weekend with the deal on the 561 00:33:15,360 --> 00:33:19,160 Speaker 1: budget was nothing surprising. What markets are hoping for and 562 00:33:19,240 --> 00:33:20,960 Speaker 1: what the leap of faith is all about in the 563 00:33:20,960 --> 00:33:23,880 Speaker 1: equity markets since November is the possibility that there will 564 00:33:23,920 --> 00:33:27,360 Speaker 1: be some change in Washington from what we've seen not 565 00:33:27,520 --> 00:33:29,920 Speaker 1: just in recent months but for for years now, which 566 00:33:29,960 --> 00:33:34,000 Speaker 1: is in action on the things that would ultimately boost productivity, 567 00:33:34,040 --> 00:33:36,840 Speaker 1: which is to say, the ability of human beings. And 568 00:33:36,880 --> 00:33:38,640 Speaker 1: aren't as many of them entering the lay before these 569 00:33:38,720 --> 00:33:41,080 Speaker 1: days because of the aging of the population to produce 570 00:33:41,360 --> 00:33:45,840 Speaker 1: and demand purchase goods and services, it's difficult for government 571 00:33:45,920 --> 00:33:48,800 Speaker 1: to do that. Uh, And so we'd say we'd lack 572 00:33:48,840 --> 00:33:51,480 Speaker 1: optimism about the long term story. And by the way, 573 00:33:51,520 --> 00:33:54,200 Speaker 1: on this we will be holding in Newport Beach a 574 00:33:54,320 --> 00:33:57,920 Speaker 1: secular form next week. Larry Summers, a former Treasury secretary, 575 00:33:57,920 --> 00:34:00,560 Speaker 1: will be there and also new English former HOW speaker 576 00:34:00,680 --> 00:34:03,600 Speaker 1: along with Ben Bernankey. Excuse me, was that a seamst 577 00:34:03,600 --> 00:34:07,200 Speaker 1: plug like Samers? Did you see? HOW? Employ global and 578 00:34:07,240 --> 00:34:14,640 Speaker 1: worldwide radio? The idea times to say that one should 579 00:34:14,640 --> 00:34:17,560 Speaker 1: be very thoughtful and think think of those names I mentioned. 580 00:34:17,560 --> 00:34:19,839 Speaker 1: They're all thinking long term. But this is I'm really 581 00:34:19,840 --> 00:34:21,719 Speaker 1: glad you bring himse up. Let's part it right now. 582 00:34:21,920 --> 00:34:26,719 Speaker 1: Larry Summers, Laurence Summers, president of Harvard, former Secretary of Treasury, 583 00:34:26,840 --> 00:34:30,000 Speaker 1: has a secular stagnation feel, which I'm going to say 584 00:34:30,120 --> 00:34:34,279 Speaker 1: is more behavioral and more economic output. Chairman Bernanke has 585 00:34:34,280 --> 00:34:36,920 Speaker 1: a feel. I'll be interviewing him on Wednesday, Folks look 586 00:34:37,000 --> 00:34:39,120 Speaker 1: for that. He's got a feeling which is a linkage 587 00:34:39,160 --> 00:34:43,959 Speaker 1: of financial into the monetary system, which view is preponderant 588 00:34:44,080 --> 00:34:48,319 Speaker 1: right now. At PIMCO, we'd say that this the the 589 00:34:48,560 --> 00:34:51,720 Speaker 1: fiscal authority is not is not has not yet taken 590 00:34:51,719 --> 00:34:54,040 Speaker 1: over from the monetary authority, which is to say that 591 00:34:54,080 --> 00:34:57,480 Speaker 1: it's the monetary authority that's been carrying the load for 592 00:34:57,600 --> 00:35:00,640 Speaker 1: years by putting more enough money in the system to 593 00:35:00,719 --> 00:35:03,840 Speaker 1: keep it going, but it's it's it's insufficient to boost 594 00:35:04,239 --> 00:35:06,719 Speaker 1: the ability of human beings and the numbers of human 595 00:35:06,719 --> 00:35:10,920 Speaker 1: beings to produce goods and services. And so Bamburnanki understands 596 00:35:10,960 --> 00:35:14,600 Speaker 1: that in the end, productivity is likely to keep the 597 00:35:14,640 --> 00:35:17,359 Speaker 1: economy from moving at the low level of it half 598 00:35:17,360 --> 00:35:19,960 Speaker 1: percent gain the past five years on average, from moving 599 00:35:20,640 --> 00:35:23,520 Speaker 1: at a quicker pace. And so he's skeptical. He's voiced it, 600 00:35:23,520 --> 00:35:25,920 Speaker 1: and you'll probably hear that Wednesday about the ability of 601 00:35:25,920 --> 00:35:29,280 Speaker 1: government to boost the economic growth on a permanent basis, 602 00:35:29,280 --> 00:35:32,000 Speaker 1: and hence the interest rates will likely stay low. So 603 00:35:32,040 --> 00:35:34,440 Speaker 1: the Fed's neutral rate, where it's neither putting its foot 604 00:35:34,440 --> 00:35:37,000 Speaker 1: on the gas or the break where the Fed says 605 00:35:37,000 --> 00:35:38,840 Speaker 1: it's two point nine percent these days it used to 606 00:35:38,840 --> 00:35:41,719 Speaker 1: be four in a quarter. It probably is still low 607 00:35:41,800 --> 00:35:44,279 Speaker 1: and likely to stay low, although creeping up toward that 608 00:35:44,440 --> 00:35:46,480 Speaker 1: level who knows. Low twos is what we'd say over 609 00:35:46,520 --> 00:35:49,160 Speaker 1: the in the years to come. So come come later 610 00:35:49,200 --> 00:35:51,400 Speaker 1: this week, you'll you'll put on your tevas and shorts 611 00:35:51,400 --> 00:35:53,000 Speaker 1: and head to Newport Beach. Sit in that giant room 612 00:35:53,040 --> 00:35:55,640 Speaker 1: which looks like an HBS classroomers and we all gather around. 613 00:35:55,719 --> 00:35:57,279 Speaker 1: What do you want to hear from New Gingrich. It's 614 00:35:57,280 --> 00:35:58,719 Speaker 1: it's interesting to be that he's going to be there. 615 00:35:58,719 --> 00:36:00,560 Speaker 1: What's what's the top question and that you have for 616 00:36:00,560 --> 00:36:02,719 Speaker 1: the former Speaker of the House about where things you're heading. 617 00:36:02,760 --> 00:36:06,319 Speaker 1: I'd like to know genuinely whether he believes that the 618 00:36:06,360 --> 00:36:11,280 Speaker 1: Trump administration will be successful in engineering a productivity miracle. 619 00:36:12,080 --> 00:36:14,960 Speaker 1: I'm sure that he's got his view on the ability 620 00:36:14,960 --> 00:36:17,520 Speaker 1: of the Trump administration to push through legislation that will 621 00:36:17,560 --> 00:36:20,720 Speaker 1: benefit the economy in the short run, for example tax 622 00:36:20,760 --> 00:36:23,839 Speaker 1: cuts for individuals and corporations. But does he believe that 623 00:36:23,920 --> 00:36:27,320 Speaker 1: government will be able to engage well enough to boost 624 00:36:27,360 --> 00:36:30,120 Speaker 1: growth on a permanent basis. That is the idea behind 625 00:36:30,160 --> 00:36:34,600 Speaker 1: a secular form or anyone looking out over long term horizon. 626 00:36:34,640 --> 00:36:36,960 Speaker 1: It's important to have that as a guardrail. So, for example, 627 00:36:37,000 --> 00:36:39,680 Speaker 1: if we have a view Pimco that indust rates will 628 00:36:39,719 --> 00:36:42,440 Speaker 1: stay low because of this secular stagnation at Larry Summer 629 00:36:42,440 --> 00:36:44,760 Speaker 1: speaks to that will guide us when we're thinking about 630 00:36:44,760 --> 00:36:47,279 Speaker 1: short term fluctuations in the economy that could come from 631 00:36:47,320 --> 00:36:50,840 Speaker 1: the administration in Washington pushing through a tax cut that 632 00:36:51,000 --> 00:36:54,319 Speaker 1: boost growth in the short run and and hence we 633 00:36:54,320 --> 00:36:56,640 Speaker 1: don't want to get fooled by that. A miracle is 634 00:36:56,680 --> 00:36:59,040 Speaker 1: something you hope for, but it's not something you necessarily 635 00:36:59,080 --> 00:37:02,480 Speaker 1: count on. When you saw that tax proposal unveiled last week, 636 00:37:02,480 --> 00:37:05,440 Speaker 1: how worried were you about what's baked into that? The 637 00:37:06,200 --> 00:37:08,759 Speaker 1: promise and it is that for members of this administration 638 00:37:08,760 --> 00:37:10,160 Speaker 1: that we're gonna get the kind of growth that they 639 00:37:10,200 --> 00:37:13,719 Speaker 1: say we're gonna get, one should be deeply skeptical that 640 00:37:14,160 --> 00:37:17,160 Speaker 1: we'll be able to achieve. As I'm pointing out here, 641 00:37:17,160 --> 00:37:19,759 Speaker 1: if something good in the long run. Think of the 642 00:37:19,840 --> 00:37:22,760 Speaker 1: US budget. It's four trillion dollars. Two point five trillion 643 00:37:22,800 --> 00:37:27,279 Speaker 1: of it goes towards entitlements, so security, Medicare, UH and 644 00:37:28,000 --> 00:37:29,960 Speaker 1: Medicaid and so on and so forth. One point five 645 00:37:29,960 --> 00:37:32,320 Speaker 1: trillion remains. Half of that one point five trillion is 646 00:37:32,320 --> 00:37:34,560 Speaker 1: in defense, which he sees moving upwards. So there's no 647 00:37:34,600 --> 00:37:37,400 Speaker 1: money to pull from that toward all these endeavors. At 648 00:37:37,440 --> 00:37:41,800 Speaker 1: least six billion of discretionary spending money that we need 649 00:37:42,680 --> 00:37:44,920 Speaker 1: UH for various things, and so there isn't enough money 650 00:37:44,960 --> 00:37:48,160 Speaker 1: percolating over the weekend. Was the usual, They're not going 651 00:37:48,239 --> 00:37:50,440 Speaker 1: to raise rates three four or five times, whatever the 652 00:37:50,480 --> 00:37:54,720 Speaker 1: number is. Lars Christiansen, Markets and Money Advisory in Europe 653 00:37:55,000 --> 00:37:56,839 Speaker 1: writing up, they're not going to raise rates at all? 654 00:37:57,320 --> 00:38:01,240 Speaker 1: What is the nudge right now? The chair yelling could 655 00:38:01,320 --> 00:38:06,240 Speaker 1: really disappoint the g D p Optimus almost be boxed 656 00:38:06,280 --> 00:38:09,320 Speaker 1: into a corner where she can't raise rates X number 657 00:38:09,320 --> 00:38:13,680 Speaker 1: of times. Well, the FED still believes that the nairou 658 00:38:14,000 --> 00:38:16,719 Speaker 1: the non accelerating inflation rate of unemployment for where the 659 00:38:16,719 --> 00:38:19,560 Speaker 1: full employment level is is about four point seven. The 660 00:38:19,640 --> 00:38:23,600 Speaker 1: job is reported less month was four point five uh 661 00:38:23,640 --> 00:38:26,600 Speaker 1: and is just estimated in this coming Friday to show 662 00:38:26,600 --> 00:38:31,000 Speaker 1: a four point six print for April. It's below since 663 00:38:31,040 --> 00:38:33,840 Speaker 1: it's below nirouh, and since the FED is filled with 664 00:38:33,920 --> 00:38:37,520 Speaker 1: Phillips curve advocates, in other words, individuals that believe growth 665 00:38:37,560 --> 00:38:41,359 Speaker 1: will ultimately lead to inflation, the FED will decide that 666 00:38:41,400 --> 00:38:46,040 Speaker 1: for risk management purposes, to keep moving, although gradually, so 667 00:38:46,040 --> 00:38:48,719 Speaker 1: so long as there's progress, meaning job growth more than 668 00:38:48,800 --> 00:38:52,439 Speaker 1: one hundred thousand per month, the FED will continued Why 669 00:38:52,480 --> 00:38:54,920 Speaker 1: one hundred thousand, because and job growth is average over 670 00:38:55,000 --> 00:38:56,960 Speaker 1: two hundred, because the labor force only grows by that 671 00:38:57,000 --> 00:38:59,200 Speaker 1: amount has the last few years, and so anything above 672 00:38:59,280 --> 00:39:01,560 Speaker 1: one hundred coaches. The job is right there, Tony, Are you, 673 00:39:01,600 --> 00:39:04,960 Speaker 1: as Mr Short term guy? Are you just saying to yourself, 674 00:39:05,080 --> 00:39:07,040 Speaker 1: I'm going to frame two or three or even four 675 00:39:07,120 --> 00:39:09,439 Speaker 1: rad hunts, not a year up, but just x out. 676 00:39:10,000 --> 00:39:12,360 Speaker 1: You're in the mood of saying they've got to go higher. 677 00:39:12,840 --> 00:39:16,800 Speaker 1: So long as it seems that the economic growth is aboff, 678 00:39:17,640 --> 00:39:19,919 Speaker 1: Stafford say it will be through twenty Well, you saw 679 00:39:19,920 --> 00:39:22,879 Speaker 1: a friday in anyone that saw the data Employment Costs 680 00:39:22,880 --> 00:39:27,680 Speaker 1: Index of Comprehensive survey of businesses on wages and salaries 681 00:39:27,680 --> 00:39:29,840 Speaker 1: and all the v I was looking at the Rangers. 682 00:39:30,200 --> 00:39:33,280 Speaker 1: It is the best, the highest, the fastest game in 683 00:39:33,440 --> 00:39:36,040 Speaker 1: eight years, and for waging salaries seven years. And so 684 00:39:36,120 --> 00:39:39,000 Speaker 1: there is some movement. And so long as this progress, 685 00:39:39,120 --> 00:39:42,440 Speaker 1: um Janet Yale will say, let's on risk management from 686 00:39:42,640 --> 00:39:46,040 Speaker 1: christ management purposes. Let's keep going one minute. What's the 687 00:39:46,160 --> 00:39:48,719 Speaker 1: question you would ask Ben Bernankey, I've got some work 688 00:39:48,760 --> 00:39:50,360 Speaker 1: to do. How can you get ready for this interview? 689 00:39:50,920 --> 00:39:53,440 Speaker 1: It's it's regarding and since he'll be talking with Larry 690 00:39:53,440 --> 00:39:55,920 Speaker 1: Summers next week this idea of seculo stagnation, does he 691 00:39:56,000 --> 00:39:59,240 Speaker 1: think we can get out of this funk? The government 692 00:40:00,160 --> 00:40:02,439 Speaker 1: enough because he knows he wanted to hand the ball 693 00:40:02,480 --> 00:40:05,040 Speaker 1: over to the physical authority but couldn't, and so does 694 00:40:05,080 --> 00:40:07,319 Speaker 1: he think that they will ever have? I promise you 695 00:40:07,440 --> 00:40:13,480 Speaker 1: I'll ask the question. It's about fifty mother, I'll give 696 00:40:13,560 --> 00:40:16,919 Speaker 1: your credit. Folks. This is what we do all the time. 697 00:40:17,120 --> 00:40:19,480 Speaker 1: We make fun of it, you know, we we kid 698 00:40:19,480 --> 00:40:23,000 Speaker 1: about it, folks. But Tony Krissenzi is truly the smartest 699 00:40:23,040 --> 00:40:27,920 Speaker 1: guy on short term paper. I know bust his chops 700 00:40:28,160 --> 00:40:32,040 Speaker 1: constantly about this, but he's exquisite on the dynamics of 701 00:40:32,080 --> 00:40:34,480 Speaker 1: the short term market. And I will be honored to 702 00:40:34,560 --> 00:40:37,880 Speaker 1: ask to ask Chairman Bernanky a question from Anthony Krissenzi 703 00:40:38,440 --> 00:40:53,080 Speaker 1: of PIMCO. Tony, thank you so much for joining us today. 704 00:40:55,040 --> 00:40:57,320 Speaker 1: And this is gonna be fun. We're gonna spending extending 705 00:40:57,360 --> 00:40:59,640 Speaker 1: amount of time with Douglas Cass in Florida with Sea 706 00:40:59,640 --> 00:41:03,280 Speaker 1: Breeze UH partners. Mr Cass said he would not agree 707 00:41:03,320 --> 00:41:04,840 Speaker 1: to come on until the Yankees were two and a 708 00:41:04,840 --> 00:41:07,480 Speaker 1: half games in front of the Boston Red Sox and 709 00:41:07,520 --> 00:41:10,840 Speaker 1: he joins us this morning. Doug, you got to admit 710 00:41:10,920 --> 00:41:14,280 Speaker 1: the American League East is just a lot of fun 711 00:41:14,440 --> 00:41:17,680 Speaker 1: already in May, boys this fun. I think we had 712 00:41:17,680 --> 00:41:21,440 Speaker 1: his six players batting over three hundred tied foot Baltimore 713 00:41:21,480 --> 00:41:25,440 Speaker 1: fifteen and eight and you're young. Yeah, yeah, I love this. 714 00:41:25,680 --> 00:41:27,960 Speaker 1: I love the new Yankee. It was a matter. It 715 00:41:28,080 --> 00:41:30,680 Speaker 1: was It's just a matter of time, you know, until 716 00:41:30,719 --> 00:41:34,840 Speaker 1: the Deadwood, the old veterans were taken off the rosters. 717 00:41:34,960 --> 00:41:38,520 Speaker 1: But you're right, baseball is really fun. It's not just 718 00:41:38,600 --> 00:41:40,520 Speaker 1: the Yankees. And I you know, I sat in the 719 00:41:40,560 --> 00:41:43,719 Speaker 1: doug Cast seats at Yankee Stadium last year, folks. I 720 00:41:43,800 --> 00:41:47,000 Speaker 1: paid for them, folks, and just understand. And I watched 721 00:41:47,080 --> 00:41:49,799 Speaker 1: Mr Girardi to his magic and the dugout and Mr 722 00:41:49,840 --> 00:41:53,239 Speaker 1: Gardner of left field. He's an enthusiastic guy. He's going 723 00:41:53,280 --> 00:41:56,120 Speaker 1: the whole game. I mean, you think it was an 724 00:41:56,120 --> 00:42:00,480 Speaker 1: ice hockey game or something. He's mating two. I think, 725 00:42:02,080 --> 00:42:05,760 Speaker 1: you know, by the way my tickets. I'm a Bleacher creature, 726 00:42:05,920 --> 00:42:09,640 Speaker 1: So I know. I was kidding with the rock Star seats, 727 00:42:09,800 --> 00:42:12,640 Speaker 1: which were fun. Help us here with your rock star call. 728 00:42:12,719 --> 00:42:15,640 Speaker 1: You are short, You're cautious, No you're not, You're long, 729 00:42:16,120 --> 00:42:20,120 Speaker 1: and your long Twitter state the case for a vailue 730 00:42:20,200 --> 00:42:24,320 Speaker 1: for Twitter. Look, Twitter is a business that has plenty 731 00:42:24,320 --> 00:42:27,840 Speaker 1: of awards, but there's a free cash flow and there's 732 00:42:27,239 --> 00:42:33,600 Speaker 1: a valuable user base. UM. You buy cyclical companies at 733 00:42:33,719 --> 00:42:37,720 Speaker 1: or near their trough um UH. Twitter is no longer 734 00:42:37,760 --> 00:42:41,280 Speaker 1: in the roading business. Their stability in Ibadan free cash 735 00:42:41,320 --> 00:42:44,359 Speaker 1: flow second quarter should be a trough. As they said, 736 00:42:44,400 --> 00:42:47,839 Speaker 1: the massive user base at three million is a big 737 00:42:47,920 --> 00:42:51,319 Speaker 1: number and it's growing in the last quarter. Usually have 738 00:42:51,400 --> 00:42:55,879 Speaker 1: value engagement is fine. It's a bite size morsel. UM. 739 00:42:56,520 --> 00:43:02,760 Speaker 1: The equity capitalization UH plus net cash is only about 740 00:43:02,840 --> 00:43:05,319 Speaker 1: nine billion dollars. I think you can see a third 741 00:43:05,360 --> 00:43:08,480 Speaker 1: team to fourteen billion dollar bit ultimately for the company. 742 00:43:08,719 --> 00:43:11,400 Speaker 1: You have to remember that Google, Facebook, and Apple likely 743 00:43:11,440 --> 00:43:15,759 Speaker 1: suitors have basically a zero cost of capital David and Tom, 744 00:43:15,880 --> 00:43:19,839 Speaker 1: so it's immediately a creative to an acquiring company. It's 745 00:43:19,880 --> 00:43:22,960 Speaker 1: easy to kill four hundred million or so in stock 746 00:43:23,000 --> 00:43:26,799 Speaker 1: based compensation for another public company as the groom, and 747 00:43:26,840 --> 00:43:30,680 Speaker 1: it's probably also a creative for private equity of the 748 00:43:30,719 --> 00:43:35,239 Speaker 1: stock is short UM and this is a very good 749 00:43:35,280 --> 00:43:40,440 Speaker 1: example of a stock UM where the chart is lousy. 750 00:43:41,400 --> 00:43:46,520 Speaker 1: There's universal hatred the former. The initial investors hate the 751 00:43:46,520 --> 00:43:49,960 Speaker 1: company of the former managers hate the company, the analysts 752 00:43:50,000 --> 00:43:54,120 Speaker 1: hate the company. Um, this strategists hate the company. I 753 00:43:54,200 --> 00:43:57,239 Speaker 1: love this company. Are there other tech companies you like 754 00:43:57,320 --> 00:43:59,600 Speaker 1: as well? Or is Twitter occupying sort of a place 755 00:43:59,640 --> 00:44:05,560 Speaker 1: alone in your portfolio? Twitter as a sole position? Um? Meanwhile, 756 00:44:05,640 --> 00:44:07,719 Speaker 1: you know they have a UM I have failed to 757 00:44:07,760 --> 00:44:10,360 Speaker 1: mention they have a net cash position at two billion dollars. 758 00:44:11,600 --> 00:44:17,319 Speaker 1: It's huge. We round up here, Doug. Just you know 759 00:44:18,080 --> 00:44:22,120 Speaker 1: it's two thousand seventeen. We round up. Help us here 760 00:44:22,160 --> 00:44:24,480 Speaker 1: with your short call. People know you, Doug cast for 761 00:44:24,560 --> 00:44:28,200 Speaker 1: caution on the market. You've enjoyed a market that goes goes, 762 00:44:28,239 --> 00:44:35,480 Speaker 1: goes goes reaffirmed caution, UM, let me give you some 763 00:44:35,600 --> 00:44:41,560 Speaker 1: new thoughts and limit my sound bites. I basically feel 764 00:44:41,600 --> 00:44:45,800 Speaker 1: that we continue to see abroad and important market top 765 00:44:46,160 --> 00:44:50,440 Speaker 1: that's being put in. But tops are processes, and it's 766 00:44:50,480 --> 00:44:53,400 Speaker 1: important to recognize that there are a number of structural 767 00:44:53,440 --> 00:44:58,480 Speaker 1: influences like risk, parity, volatility, trending, the popularity of exchange 768 00:44:58,520 --> 00:45:02,200 Speaker 1: of exchange, trade of funds. This. These are all serving 769 00:45:02,239 --> 00:45:04,800 Speaker 1: to extend the rally beyond where it might have stopped 770 00:45:04,840 --> 00:45:08,359 Speaker 1: without them, particularly in a small universe of stocks like 771 00:45:08,440 --> 00:45:11,920 Speaker 1: the Fang stocks double A f A n G type. 772 00:45:12,480 --> 00:45:14,520 Speaker 1: You had a technical analyst. I sent you an email 773 00:45:14,520 --> 00:45:17,919 Speaker 1: on in the early hours around six fifteen years old 774 00:45:17,920 --> 00:45:21,120 Speaker 1: this morning, who talked about the widen participation in the market, 775 00:45:21,160 --> 00:45:25,400 Speaker 1: and I respectfully disagree. In total return terms, the Fang 776 00:45:25,440 --> 00:45:29,880 Speaker 1: stocks accounted for a third of the SMPS gained this year. Apple, 777 00:45:29,960 --> 00:45:33,880 Speaker 1: the stock the top stock by market, cop Cat obviously 778 00:45:34,320 --> 00:45:38,040 Speaker 1: was responsible for more than ten percent of them return. 779 00:45:38,200 --> 00:45:40,520 Speaker 1: So the one thing that Bob Farrell, my friend and 780 00:45:40,960 --> 00:45:45,200 Speaker 1: legendary technical analyst Marylynch, taught me is that a narrowing 781 00:45:45,480 --> 00:45:49,040 Speaker 1: advance or breath is not a market friendly condition. Look, 782 00:45:49,080 --> 00:45:52,240 Speaker 1: investing is getting harder and harder, even though the averages 783 00:45:52,280 --> 00:45:55,719 Speaker 1: seemed to be elevated. Um, it's not easier in a 784 00:45:55,760 --> 00:45:59,440 Speaker 1: world dominated by these quand funds, machines and algoes and 785 00:45:59,480 --> 00:46:02,480 Speaker 1: how else explain high profile hedge fund closures in the 786 00:46:02,560 --> 00:46:05,640 Speaker 1: last couple of years. Compare This whole thing is reminiscent 787 00:46:05,719 --> 00:46:11,719 Speaker 1: of portfolio insurance, which caused the We remember that you 788 00:46:12,000 --> 00:46:15,080 Speaker 1: call this portfolio insurance Part two, Doug. It was a 789 00:46:15,080 --> 00:46:17,239 Speaker 1: few years ago you were a small startup friend kid 790 00:46:17,280 --> 00:46:21,480 Speaker 1: or Peabody as a housing analyst. As you know, for 791 00:46:21,719 --> 00:46:25,560 Speaker 1: the jillion young bucks are studying for the CFA exam, 792 00:46:25,600 --> 00:46:28,320 Speaker 1: which will be here in June. Is there a future 793 00:46:28,480 --> 00:46:33,520 Speaker 1: in the securities analysis that you were weaned one? I 794 00:46:33,560 --> 00:46:36,160 Speaker 1: think that the business is more as as we moved 795 00:46:36,280 --> 00:46:44,239 Speaker 1: towards this parity volatility, trending, quantitative strategies, and the explosion 796 00:46:44,280 --> 00:46:49,120 Speaker 1: on the popularity of exchange traded funds. It's becoming increasingly 797 00:46:49,200 --> 00:46:53,560 Speaker 1: hard for even the brightest hedgehoggers to differentiate themselves and 798 00:46:53,719 --> 00:46:58,960 Speaker 1: add value. Um So I think the business will contract 799 00:46:59,040 --> 00:47:01,680 Speaker 1: in size, will always be a place with c f 800 00:47:01,800 --> 00:47:06,120 Speaker 1: A ers. Will the business come inside? I'm fascinated, And folks, 801 00:47:06,200 --> 00:47:09,439 Speaker 1: let's frame this for our radio audience worldwide. The by 802 00:47:09,520 --> 00:47:13,000 Speaker 1: side takes the research and uses it. The cell side 803 00:47:13,080 --> 00:47:15,960 Speaker 1: sells the research for commission dollars, et cetera. There's a 804 00:47:16,080 --> 00:47:18,920 Speaker 1: raging debate in London how you're going to pay people 805 00:47:19,440 --> 00:47:22,960 Speaker 1: on the cell side for their intellectual work or Doug, 806 00:47:23,000 --> 00:47:26,799 Speaker 1: would you predict that the intellectuals will go directly in 807 00:47:27,239 --> 00:47:31,200 Speaker 1: to the by side where they have their own securities analysis. 808 00:47:31,320 --> 00:47:33,160 Speaker 1: That's a great question, you know, it's my only good 809 00:47:33,160 --> 00:47:34,480 Speaker 1: one this week. I got it out of the way. 810 00:47:34,880 --> 00:47:38,480 Speaker 1: Bernanke doesn't get any good questions. The investment business is 811 00:47:38,480 --> 00:47:42,760 Speaker 1: this great pendulum. When I graduated business school at Warden UM, 812 00:47:42,920 --> 00:47:46,279 Speaker 1: I went to work in the research department at Putnam Management. 813 00:47:47,160 --> 00:47:53,520 Speaker 1: We had extraordinary analyst Jeff Taback who has yes, Larry 814 00:47:53,560 --> 00:47:57,960 Speaker 1: Haverty who's now with Rebellion Company. UM. Just just a 815 00:47:58,080 --> 00:48:03,600 Speaker 1: bunch of in a cadre of nine to ten, solid guy. 816 00:48:03,840 --> 00:48:07,760 Speaker 1: We rare. Our original research was better than the street 817 00:48:07,800 --> 00:48:10,800 Speaker 1: at that point. UM. And that was true for Fido, 818 00:48:11,160 --> 00:48:14,440 Speaker 1: it was true for Mass Financial Services UM and a 819 00:48:14,520 --> 00:48:19,160 Speaker 1: number of other money management firms that changed UM. And 820 00:48:19,440 --> 00:48:24,600 Speaker 1: it's sort of it was an inflection point during this 821 00:48:24,880 --> 00:48:29,279 Speaker 1: this Spitzer induced legislation period which was the outgrowth of 822 00:48:29,320 --> 00:48:32,799 Speaker 1: the bear market, and and and UM. I think it's 823 00:48:33,000 --> 00:48:38,279 Speaker 1: so you saw UM a contraction on the research on 824 00:48:38,320 --> 00:48:41,680 Speaker 1: the south side UM and I think that that's going 825 00:48:41,760 --> 00:48:44,200 Speaker 1: to continue. And I think that we're going to revert 826 00:48:44,280 --> 00:48:47,080 Speaker 1: back to the seventies where where Putnam and fed all 827 00:48:47,160 --> 00:48:49,800 Speaker 1: these in house research was superior to that in Maryland. 828 00:48:49,920 --> 00:48:52,000 Speaker 1: I can put your lapels out again, like you got 829 00:48:52,000 --> 00:48:53,920 Speaker 1: in the closet, David Girl. I want to point out 830 00:48:53,920 --> 00:48:56,080 Speaker 1: that the only reason Doug Cass took the job at 831 00:48:56,120 --> 00:49:02,839 Speaker 1: Putnam was to get Red Sax tickets. I really I 832 00:49:02,960 --> 00:49:06,760 Speaker 1: enjoyed the games at Fenway doug when the Red Sox 833 00:49:06,800 --> 00:49:11,840 Speaker 1: weren't playing Chris back down there in fifth place in 834 00:49:11,920 --> 00:49:14,000 Speaker 1: the sixteen League. We won't go there. Let me go 835 00:49:14,040 --> 00:49:16,800 Speaker 1: to another shorter years announced here in April. I'm shorting 836 00:49:16,840 --> 00:49:18,680 Speaker 1: the tax reform news, which appears to be an all 837 00:49:18,719 --> 00:49:21,360 Speaker 1: in bed on supply side economics, his ability to catalyze 838 00:49:21,400 --> 00:49:24,840 Speaker 1: domexic economic growth. How are you regarding what's going on 839 00:49:24,840 --> 00:49:29,600 Speaker 1: in Washington these days? Well, this whole stock market rises 840 00:49:29,640 --> 00:49:34,120 Speaker 1: a function, David, of the animal spirits being elevated. Would 841 00:49:34,120 --> 00:49:37,600 Speaker 1: you always point out our dumber then, right? I said, 842 00:49:37,640 --> 00:49:40,200 Speaker 1: The reason they call it animal spirits rather than human 843 00:49:40,239 --> 00:49:44,160 Speaker 1: spirits is because animals are a lot dumber than humans. Um. So, 844 00:49:44,200 --> 00:49:46,840 Speaker 1: the administration has made this promise of tax reform and 845 00:49:46,920 --> 00:49:51,719 Speaker 1: physical initiatives. Um to me, the Trump's tax reforms are 846 00:49:51,880 --> 00:49:54,240 Speaker 1: are dead on arrival. It's a one page or twelve 847 00:49:54,280 --> 00:49:57,960 Speaker 1: bullet points, which shows a lack of critical thinking. It's 848 00:49:58,000 --> 00:50:00,480 Speaker 1: simply a wish list with no details that it is 849 00:50:00,520 --> 00:50:03,880 Speaker 1: really not a proposal. It should be called an outline 850 00:50:04,400 --> 00:50:08,600 Speaker 1: as so much as unspecified So I worry about Black swans, 851 00:50:08,640 --> 00:50:11,640 Speaker 1: but I'm also worrying today about are an Orange swan. 852 00:50:12,320 --> 00:50:14,400 Speaker 1: And my bottom line is that Trump is going to 853 00:50:14,440 --> 00:50:19,080 Speaker 1: make market volatility and economic uncertainty great again. Um. I 854 00:50:19,080 --> 00:50:22,800 Speaker 1: think he's almost taking a mythical path in his tax reform. 855 00:50:22,920 --> 00:50:25,480 Speaker 1: You know, he may be able to temporarily hold up 856 00:50:25,760 --> 00:50:30,200 Speaker 1: the sweep of automation and globalization, but cajoling a few 857 00:50:30,200 --> 00:50:33,960 Speaker 1: companies to keep jobs at home by bolstering inefficient and 858 00:50:34,719 --> 00:50:38,960 Speaker 1: competitive enterprises is likely only to temporary stable off market forces. 859 00:50:39,200 --> 00:50:41,360 Speaker 1: Douglas cast joining us from Florida. Doug, I want to 860 00:50:41,440 --> 00:50:44,880 Speaker 1: rip up the script here. You recently dined at maral Lago. 861 00:50:45,000 --> 00:50:48,480 Speaker 1: How is maral Lago perceived by the locals of Florida? 862 00:50:48,800 --> 00:50:51,279 Speaker 1: How is it perceived away from what we see with 863 00:50:51,400 --> 00:50:55,200 Speaker 1: the President. Well, I'm right in the middle of Palm Beach. 864 00:50:55,239 --> 00:50:57,279 Speaker 1: I live on the island, so I'm like, I'm out 865 00:50:57,320 --> 00:51:00,120 Speaker 1: to eight blocks or nine blocks from marl Lago, and 866 00:51:00,200 --> 00:51:03,360 Speaker 1: the first reaction is that it's a disaster traffic wise. 867 00:51:03,920 --> 00:51:09,759 Speaker 1: I mean, there's can there's basically three bridges that go 868 00:51:09,920 --> 00:51:12,480 Speaker 1: from the island of Palm Beach to West Palm Beach, 869 00:51:12,760 --> 00:51:16,480 Speaker 1: two of which are being renovated, including the south the 870 00:51:16,520 --> 00:51:21,000 Speaker 1: southern uh Boulevard bridge, which goes directly you could see 871 00:51:21,480 --> 00:51:24,240 Speaker 1: Moral Lago from there. So it is a total disaster. 872 00:51:25,000 --> 00:51:28,680 Speaker 1: And when the President of China se um, he stayed 873 00:51:28,719 --> 00:51:30,600 Speaker 1: at the O Hotel, which is down the block of 874 00:51:30,680 --> 00:51:34,480 Speaker 1: Mara Lago. I mean there were barricades, cement barricades twenty 875 00:51:34,520 --> 00:51:37,319 Speaker 1: ft high. So the traffic is terrible. So that's the 876 00:51:37,360 --> 00:51:40,440 Speaker 1: first thing. The second thing is for people that are 877 00:51:40,480 --> 00:51:43,279 Speaker 1: site of sort of trump Sinco fans, and I don't 878 00:51:43,640 --> 00:51:46,799 Speaker 1: I'm trying to be objective. Uh, it's attracted a lot 879 00:51:46,840 --> 00:51:49,560 Speaker 1: more people to Moral Law go into Trumpet to Nashville 880 00:51:49,600 --> 00:51:54,200 Speaker 1: golf course, and as a result, he's doubled the initiation fee. 881 00:51:54,480 --> 00:51:56,719 Speaker 1: So people seem to like the fact that they could 882 00:51:56,719 --> 00:52:00,000 Speaker 1: cold board and socialize with the president at the same 883 00:52:00,040 --> 00:52:03,200 Speaker 1: time the traffic is difficult for those are my general reactions. 884 00:52:03,200 --> 00:52:05,839 Speaker 1: I've been there three times. I was there the night 885 00:52:06,200 --> 00:52:10,000 Speaker 1: the president, she was there, You were there, yes, and um, 886 00:52:10,120 --> 00:52:13,000 Speaker 1: I actually I'm a Democrat, but I was. You know, 887 00:52:13,000 --> 00:52:18,560 Speaker 1: I have Republican friends to my friend surveillance, highly placed Republican. 888 00:52:18,640 --> 00:52:20,200 Speaker 1: I will mention his name, but we were at the 889 00:52:20,280 --> 00:52:23,080 Speaker 1: number one table and we could see President she and 890 00:52:23,200 --> 00:52:27,160 Speaker 1: our president right in front of us. It was exciting. 891 00:52:27,280 --> 00:52:29,160 Speaker 1: Is the food as good as at the White House? Course? 892 00:52:29,239 --> 00:52:36,040 Speaker 1: But that's marvel sensation. Okay, we'll go with that. Doug Cass, 893 00:52:36,040 --> 00:52:40,720 Speaker 1: thank you so much for a briefing on the immediately 894 00:52:40,880 --> 00:52:43,400 Speaker 1: of being There's nothing like being there. Doug Cass is 895 00:52:43,520 --> 00:52:46,719 Speaker 1: certainly there. We thank him for making clear his political 896 00:52:46,760 --> 00:52:59,520 Speaker 1: affiliations as well. Thanks for listening to the Bloomberg Surveillance podcast. 897 00:53:00,040 --> 00:53:05,200 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 898 00:53:05,280 --> 00:53:09,600 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom Keene. 899 00:53:09,680 --> 00:53:14,040 Speaker 1: David Gura is at David Gura. Before the podcast, you 900 00:53:14,080 --> 00:53:28,520 Speaker 1: can always catch us worldwide on Bloomberg Radio, brought you 901 00:53:28,560 --> 00:53:32,239 Speaker 1: by Bank of America. Mary Lynch dedicated to bringing our 902 00:53:32,280 --> 00:53:35,880 Speaker 1: clients insights and solutions to meet the challenges of a 903 00:53:35,880 --> 00:53:40,319 Speaker 1: transforming world. That's the power of global connections. Mary Lynch, 904 00:53:40,440 --> 00:53:44,759 Speaker 1: Pierce Feeder and Smith Incorporated Member s I p C.