Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene
Speaker 1: with David Gura. Daily we bring you insight from the
Speaker 1: best of economics, finance, investment, and international relations. Find Bloomberg
Speaker 1: Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, and of course,
Speaker 1: on the Bloomberg Henry Coffin with us now in our
Speaker 1: Bloomberg eleven three studios, formerly with Tommon Brothers. He's the
Speaker 1: author of the book Tectonic Shifts in Financial Markets, People,
Speaker 1: Policies and Institutions. He's the president of Henry Coffman and Company.
Speaker 1: Great to see him once again. You uh. The waiting
Speaker 1: continues here we we we await a decision from the president.
Speaker 1: Who will be the next fed Share. Perhaps they'll be
Speaker 1: fed Share Jenny Ellen renewed for a second term, perhaps
Speaker 1: it will be someone else. What should a president, what
Speaker 1: should a Treasury secretary? What should a chief of staff
Speaker 1: be considering at this point as they make this to decision,
Speaker 1: as they pick the next FED chair, what what should
Speaker 1: they be considering? Broadly speaking, Well, they want the first
Speaker 1: of all, have an awareness of the candidates experience. Financial
Speaker 1: experience is very helpful. Having an academic background in banking, finance,
Speaker 1: and economic theory is also extremely helpful. Being able to
Speaker 1: manage others around the chair, meaning the other members of
Speaker 1: the Board of Governors or the f O m C,
Speaker 1: who are usually PhD s. Those people have to be led,
Speaker 1: they have to be managed, to have to be influenced,
Speaker 1: and someone coming from the outside with limited experience will
Speaker 1: have some problems in doing that. Is that the hardest
Speaker 1: thing to assess in advance. We talk about John Taylor,
Speaker 1: the professor at Stanford, with a lot of government experience.
Speaker 1: Kevin worsh It's hard to estimate how somebody will be
Speaker 1: able to interact with others on the board, or bring
Speaker 1: them on board, or work with them. How do you
Speaker 1: just begin to to figure out how somebody might do
Speaker 1: with that. Well, some of these people, uh John Taylor,
Speaker 1: of course, who was Under Secretary of the Treasury, so
Speaker 1: he has had considerable government experience. When you go back
Speaker 1: through the history of the Federal Reserve chairs, uh. Bill Martin,
Speaker 1: who was the first prominent one in the postwar period,
Speaker 1: began in nineteen fifty one and served for the longest
Speaker 1: until nineteen sixty eight. He had been at the Treasury.
Speaker 1: He had been chairman of the New York Stock Exchange.
Speaker 1: He had also been the head of the Exploit Import Bank.
Speaker 1: He had considerable background and knowledge and took a lot
Speaker 1: of courses. On the other hand, Uh. There thereafter you
Speaker 1: had Author Burns, who was second, who was the chairman
Speaker 1: of the the Economic Advisors at one time, was an
Speaker 1: expert on business cycles and saw it. And but nevertheless,
Speaker 1: I can recite all of these for you with their
Speaker 1: background and experience, A good many of them had to
Speaker 1: check it experience. As chair we have all that experience,
Speaker 1: with all that knowledge and managing, they didn't perform as
Speaker 1: well as they should have. I want to talk one
Speaker 1: more question the fed that we got to get to
Speaker 1: extremely important headlines for Global Wall Street and we're honored
Speaker 1: to have you here. Uh. Dr Kaufman, let me reducts
Speaker 1: the question from television earlier. Can John Taylor be a
Speaker 1: dove or is he so rules bound that we're going
Speaker 1: to be hawk hawk hawk? Uh. The little I know
Speaker 1: about John Taylor, you can only be a dove if
Speaker 1: it fits within his formula, within his formula. Uh. And
Speaker 1: you don't think there's enough fungibility in the formula or
Speaker 1: within his Boston speech recently to calm those that worry
Speaker 1: about a restrictive John Taylor, there there is a certain
Speaker 1: amount that can give within his formula. And as I
Speaker 1: said to you before, here we are in two thousand seventeen.
Speaker 1: The unemployment rate is four and a half but below
Speaker 1: four and a half percent, and labor compensation hasn't got up.
Speaker 1: Isn't that an extraordinary event over the last eight nine years.
Speaker 1: One of our things to talk about here are the
Speaker 1: headlines in all of global Wall Street. We say good
Speaker 1: morning to you in London on Radio London, of course,
Speaker 1: in Awakening East Coast and at New York, but truly
Speaker 1: to all of our listeners worldwide. David, why don't you
Speaker 1: run through these important headlines from the Securities and Exchange Commits.
Speaker 1: We were speaking with Ben Bayne that last week about
Speaker 1: what the SEC was considering with regard to these Miffed rules,
Speaker 1: and we're getting some more clarity on that this morning.
Speaker 1: The SEC is saying it's going to ask for public
Speaker 1: comments on the market impact of these new MIFED rules.
Speaker 1: The SEC is going to give a thirty month reprieve
Speaker 1: to u S firms on EU research rules. And here
Speaker 1: the annoucement addressing me fed conflict with EU on on
Speaker 1: payments issues in particular. So those are the main headlines
Speaker 1: here that we're getting from the Security Exchange Commission in Washington.
Speaker 1: Of course, Henry Kaufman, with his legendary work and modern work,
Speaker 1: I should say it's Salomon Brothers some years ago, is
Speaker 1: a perfect person to speak about the ft. Had the
Speaker 1: article yesterday Robin Wigglesworth. Uh, the the idea of Bank
Speaker 1: of America becoming an investment advisor to accept hard dollars,
Speaker 1: to accept cash because they've got to worry Bank of America,
Speaker 1: New York, San Francisco. Uh, the Carolinas has to worry
Speaker 1: about their London clients. This is a real international issue,
Speaker 1: isn't it. It is an important issue. But the issue
Speaker 1: is how do you maintain the independence of research? How
Speaker 1: do you hold research accountable to be always objective? Can
Speaker 1: you have two regimes? A New York regime of compensation
Speaker 1: to the south Side, etcetera, and a separate regime in
Speaker 1: Europe and particularly in the city. I think that's exceedingly difficult,
Speaker 1: really auditorialized, David. But we're going there right now. And
Speaker 1: as I told you, the only way research can be
Speaker 1: objective in a cell research environment is when the head
Speaker 1: of research sits in the senior management with all the
Speaker 1: other leaders on executive I'm going to hope that James
Speaker 1: Diamonds listening to this conversation this morning. What is your
Speaker 1: advice to Mr Diamond? He's got four hundred and twenty
Speaker 1: two reports and he's got to figure out what to
Speaker 1: do with a dynamic between London and New York. What
Speaker 1: is your advice to Jamie Diamond? I advise is bring
Speaker 1: the head of research into the senior management so that
Speaker 1: he oversees the extent to which objectivity is maintained in analysis.
Speaker 1: Because if you sit on top of the other four
Speaker 1: or five, if that who comes up but defended, but
Speaker 1: come on off of vocal rule and Dodd Frank. The
Speaker 1: Europeans want to police global wall streets intellectual output. That's irrefutable.
Speaker 1: That's what they want to do, and we see that
Speaker 1: through MEFO to this is absolutely critical. Do you agree
Speaker 1: with the Europeans that we should police research or should
Speaker 1: the SEC stand up and say no, we're not going
Speaker 1: to do this longer than the thirty month headline this morning? Well,
Speaker 1: I I would say, research should be policed for its objectivity,
Speaker 1: otherwise it doesn't serve well the client, and it doesn't
Speaker 1: serve well the institution ultimately, and it will always be
Speaker 1: then looked at as being sell side research. And the
Speaker 1: definition of sell side research is to push the product,
Speaker 1: to push the item, to push the underwriting, to push
Speaker 1: the sale or the purchase of stock, and the the
Speaker 1: the investor ultimately becomes aware of this very quickly. We'll
Speaker 1: come back up with you in just a moment. But
Speaker 1: how seismic it change? Do you think this is gonna be?
Speaker 1: There so much concerned about what it's gonna mean for
Speaker 1: for jobs and for this part of the economy as well.
Speaker 1: How worried are you about the implementation of these rules? Well,
Speaker 1: I I really think, uh, the number of people in
Speaker 1: research is going to diminish. It's going to diminish, not
Speaker 1: only because of what you're talking about, but we were
Speaker 1: we're creating more exchange traded funds. We are at the
Speaker 1: same time doing much more. We've got much more money
Speaker 1: going into Van Gone and all of the passive investment.
Speaker 1: Let's do this. Let's come back and talk about this.
Speaker 1: We're honored if Henry Kaufman with us. With these important
Speaker 1: headlines from the Security and Exchange Commission, they will ask
Speaker 1: for public comments on method. Uh. They don't put it down.
Speaker 1: They don't pump the ball down the street. They go
Speaker 1: the thirty months three zero thirty months reprieved the U
Speaker 1: S firms on European research rules. I think that's a
Speaker 1: critical headline and they make clear, uh, Wall Street firms
Speaker 1: can accept research payments from EU clients. Much more on
Speaker 1: this important issue with Dr Kaufman. I think the doll
Speaker 1: was like twelve points when Henry Kaufman started his career.
Speaker 1: Where was the doubt when you walked in the Wall
Speaker 1: Street door? Oh my goodness, I walked into Wall Street
Speaker 1: door door in January of nineteen sixty two, I walked
Speaker 1: into Sottomon. It must have been in the hundreds. Hundreds, Yeah,
Speaker 1: I would say the middle. We'll look that up with
Speaker 1: David Wilson has that statistic available. He has actually memorized. Um.
Speaker 1: I sure everybody wants to know that you just celebrated
Speaker 1: your ninetieth birthday. What is the key to Kaufman longevity?
Speaker 1: As people know as we go through this, I don't
Speaker 1: do this, doctor Doom Bologna. You've always been an upbeat
Speaker 1: guy forgetting about the cliches of another time and space.
Speaker 1: What is the Kaufman longevity formula? Gura and I are
Speaker 1: taking notes? Well, I suspect it's have good genes. Uh,
Speaker 1: and it sound like a glass come out help me here?
Speaker 1: Is it like a glass of tomato juice every morning?
Speaker 1: And and stay active, stay active, don't retire. It would
Speaker 1: be one of them. Stay active, David, Why don't you
Speaker 1: jump in here with Henry Kaufman after these SEC headlines
Speaker 1: too many other topics. Yeah, we're looking ahead to the
Speaker 1: CCB meetings. They've been listening to what that policy makers
Speaker 1: have been saying, and I noticed that more and more
Speaker 1: of them are talking about the role the technology is
Speaker 1: playing when it comes to productivity and wage growth and
Speaker 1: all of that. As you see what's what's the role
Speaker 1: the technology is playing in the economy, And when you
Speaker 1: look at the data, that is a very key issue
Speaker 1: which hasn't been appreciated. There is a tectonic shift occurring
Speaker 1: actually which I didn't bring out in the book. And
Speaker 1: that's the and and that's the following. We have seen
Speaker 1: very little increase in wages in the last eight nine years,
Speaker 1: but we seen an extraordinary increase in corporate profits, I bill,
Speaker 1: and it's I believe what is occurring is a great
Speaker 1: obsolescence in labor, in the value of labor as the
Speaker 1: result of automation, robots, UH, factories that can be built
Speaker 1: all over the world rather than in one place, and
Speaker 1: the technological increase that has occurred with such rapidity that
Speaker 1: it is marginalizing labor. Much in the old days, in
Speaker 1: the nineteen fifties, in the nineteen early sixties, there were unions,
Speaker 1: unions that of course UH got higher wages for their
Speaker 1: members and they constrained corporate profits somewhat. That has gone here,
Speaker 1: and it's a really long term social problem. As is
Speaker 1: widening up occurs. Ask yourself the simple question, has labor
Speaker 1: compensation remains modest? What kind of corporate pensions going to
Speaker 1: be there years from down to help in retirements? Well,
Speaker 1: we're there right now, Alicia Mannell up at Boston College,
Speaker 1: has of people not actually justified in their retirement. Within
Speaker 1: these broader issues is our quest for hard data. You
Speaker 1: are one of the leaders of looking at hard data.
Speaker 1: Do you observe in service and goods inflation? The hard
Speaker 1: data that can let a set of good central bankers
Speaker 1: raise rates. Now, I I think, as you know, Mrs
Speaker 1: ms Yell raises the question, and she hasn't got an answer,
Speaker 1: why isn't the inflation rate higher? So here's a policymaker
Speaker 1: at the highest level is highly uncertain for this relatively
Speaker 1: modest growth in abric compensation. And I it comes from
Speaker 1: really the fact that labor is becoming more obsolescent. Robots
Speaker 1: are replacing labor. Uh. I saw recently a garbage struck.
Speaker 1: In my days, in garbage struck used to be manned
Speaker 1: by a driver and two men. Now I saw a
Speaker 1: garbage struck with a driver moving along. There weren't the
Speaker 1: two men. And what happened there was a crane that
Speaker 1: picked up the garbage pail, dumped it and put it down.
Speaker 1: As now, in about twenty years there won't even be
Speaker 1: a driver on that on that car. And if you
Speaker 1: you don't have to split your imagination far, in twenty
Speaker 1: five years a lot of taxis will be driven without
Speaker 1: a driver. And this goes on and on. A friend
Speaker 1: of mine who was just in Japan told me of
Speaker 1: a robot walking into a patient's room gives the patient
Speaker 1: a pill if the patient doesn't take the bill, an
Speaker 1: attendant comes a little and then the robot picks up
Speaker 1: the patient and puts him in a wheelchair. Now this
Speaker 1: is really but in this replacement that's going, well, we've
Speaker 1: got a circle back. Here's the point. You're ninety years old,
Speaker 1: you're not in a wheelchair. We want to know why. Well,
Speaker 1: let's leave with your Henry caufin with us and what
Speaker 1: will happen and again uh soon. It is a wonderful book.
Speaker 1: I can't say enough about tectonic shifts in financial markets,
Speaker 1: people policies, and institutions, and I would really emphasize the
Speaker 1: people part of it. It's a beautiful book. You just
Speaker 1: want to buy the book because it feels so good.
Speaker 1: From Paul Gray McMillan as well. But the real issue here,
Speaker 1: for particularly those of you of a younger vintage, it
Speaker 1: is a beautiful way to get a sense of history
Speaker 1: of where we were and how we got the two
Speaker 1: thousand seven in beyond, it's even got a lot on
Speaker 1: Walter Riston, which is a very good thing as well.
Speaker 1: Henry Kaufman, of course for years with Solomon Brothers and
Speaker 1: with an association with Lehman Brothers, which we didn't have
Speaker 1: time to talk about, but we'll do that another time.
Speaker 1: We do uh economics, finance, investment, international relations, we do politics,
Speaker 1: and we do our military, and I think, David, we
Speaker 1: get more misinformation and we struggle more to get informed
Speaker 1: guests on the military than any other thing we deal with.
Speaker 1: And that's why we were on a day of Admiral
Speaker 1: James Travitis with us at Tufts and General Kimmitt comes
Speaker 1: on as a really interesting guy in general with a
Speaker 1: c f A, an important financial degree. And it's also
Speaker 1: why we have George Friedman on because he read James
Speaker 1: as a kid. He knows every book, every ship, even worse,
Speaker 1: you knows where every boat is. And literally, David, it
Speaker 1: could be a three hour conversation. Absolutely. George Freeman here
Speaker 1: with us in our eleven three studios in the Earth,
Speaker 1: the founder and chairman of Political Future. Let's get to
Speaker 1: that in just a minute. First, let me ask you
Speaker 1: about the news of the day. We've been following what's
Speaker 1: been going on in Northern Spain, waiting to hear from
Speaker 1: the president of the region a little bit later about
Speaker 1: the path forward. There could be a call for for
Speaker 1: new elections there. What do you make of of what's
Speaker 1: playing out there. Where do you think this is leading to,
Speaker 1: not just in Spain, in this region and in Spain,
Speaker 1: but in Europe generally? What is it? What is it?
Speaker 1: What's the message about the integrity or the health of
Speaker 1: the European experiment? Well where this comes from his two
Speaker 1: thousand eight. This is the really important part of two
Speaker 1: thousand and eight. I hate to say this the people
Speaker 1: in the market, but that was a preface. What has
Speaker 1: happened is that it has created massive inequalities in Europe,
Speaker 1: failed economies, um a lot of pretense by the elite,
Speaker 1: and now you're seeing fragmentation. Scotland almost seceded from the Okay,
Speaker 1: now Catalonia. These are two three hundred year arrangements that
Speaker 1: are coming. Apart the Italians, there will be others coming.
Speaker 1: So what we're seeing here is what economic is all about.
Speaker 1: It becomes politics, and it becomes politics where the whole
Speaker 1: you know, you're talking about tectonic shifts, Mr Kaufman, this
Speaker 1: is a tectonic shift. We think two thousand and eight
Speaker 1: is over because interest rates are savalizing. Oh no, Catalogna
Speaker 1: is two thousand eight large. Our politics playing a greater
Speaker 1: role in the economy in policy than they have in
Speaker 1: the past. I think of just what happened with Brexit,
Speaker 1: what happened with the U S election, the rise of
Speaker 1: populism that we saw. When when you look at the economy,
Speaker 1: how big role is politics playing at this point? Well,
Speaker 1: the economy is politics. The tax code, the regulations of
Speaker 1: the political pressures all affected. Uh when things are rolled,
Speaker 1: the stable is is feeling that did the markets operate
Speaker 1: on their own? But historically, I mean, what made the
Speaker 1: Great expansion possible was World War Two and that was
Speaker 1: pretty political and that's set the stage for a generation
Speaker 1: of growth Vietnam intern I think we should rip up
Speaker 1: the scripture. Dr Kissinger, among others, has talked about the
Speaker 1: refugee migrant moment in Europe is to be almost transcentry,
Speaker 1: to go across centuries of historical experiment, and we've seen
Speaker 1: recently the politics of Austria, the politics of the Czech Republic.
Speaker 1: How does George Friedman filter not so much the fact
Speaker 1: of migrants and refugees in Europe, but the scale of it,
Speaker 1: the amplitude of the last twelve months, and the breathtaking
Speaker 1: indifference by the elite to the entire process, because from
Speaker 1: a European point of view, the Germans and the German
Speaker 1: elite were very generous, but they weren't going to live
Speaker 1: in the same neighborhoods with them. The people who wanted
Speaker 1: I thought the migrants should come in were very kind,
Speaker 1: but they weren't going to be the ones paying the
Speaker 1: price of social dislocation and everything else. Like when I
Speaker 1: moved to the Bronx from Hungary. Uh, everybody was very
Speaker 1: kind to me, but they weren't living there and it
Speaker 1: was a tough neighborhood. So the issue here is I
Speaker 1: came here fifty two, I was wek united. They think
Speaker 1: you are a communist. I mean, was it the enough
Speaker 1: a shift that you were the little kid that was
Speaker 1: a comy because that's how we felt, were the kids
Speaker 1: in fifty six and the debris after that. No, we
Speaker 1: were afraid of the Puerto Ricans, and we were afraid
Speaker 1: of the Italians, and we were afraid of Irish and
Speaker 1: they were afraid of us. So when you have immigration,
Speaker 1: you have social instability. And so the people who didn't
Speaker 1: want it were regarded as immoral, you know, you know,
Speaker 1: dark people who don't understand that they're evil. This ripped
Speaker 1: here of apart. It wasn't the migration, but the manner
Speaker 1: in which the same people have out of Trump we're presented.
Speaker 1: So we have a massive split between the elite, who
Speaker 1: sees themselves as moral judges, and the working class and
Speaker 1: poorer who see themselves bearing the burden of the generosity
Speaker 1: of the elite. Let me ask you about the negotiations
Speaker 1: over NAFTA, and we're talking about politics being the economy
Speaker 1: and perhaps vice versa. There, what do you make of
Speaker 1: the signaling that we've seen here? You have negotiation teams
Speaker 1: from these three countries working on rehashing that deal. All
Speaker 1: the while you have one of the three nations set
Speaker 1: of states raising the spectrum terminating the deal. Uh, there's
Speaker 1: some political signaling, if if any, how optimistic are you
Speaker 1: that this process is going to play out? And how
Speaker 1: destabilizing would it be to have no trade deal for
Speaker 1: any period of time between these three countries. I'll give
Speaker 1: one fact. The largest export partner of California is Mexico.
Speaker 1: The card largest export partner of Texas is Mexico. You've
Speaker 1: got the largest Republican, the largest Democratic UH representatives in
Speaker 1: Washington and the last thing they want is anything that
Speaker 1: screws up NAFTA. So every doesn't matter what the negotiators do,
Speaker 1: and it doesn't much matter what the President wants. This
Speaker 1: is going to be decided ultimately in Congress. Can you
Speaker 1: say this about tax reform? Can you say the same
Speaker 1: thing about Texas. It doesn't have that kind of coalition.
Speaker 1: It doesn't have that. It doesn't have California and Texas
Speaker 1: the first and the second largest delegations pulling in others
Speaker 1: saying basically, we don't want a basic change. Okay, Texas
Speaker 1: guy other than Austin, Good morning Austin Texas. Good morning,
Speaker 1: Mr Dell. Other than Austin, Texas. How many Democrats are
Speaker 1: left in Texas? Would all be je No? The state? Uh,
Speaker 1: he would devel the state because all the Democrats became Republicans.
Speaker 1: This was always a conservative state. It was a conservative
Speaker 1: democratic strait, and now it's what it was. Really changed.
Speaker 1: It somewhat is the tension between Senator Cruz and Senator Cornyn.
Speaker 1: But the Trump movement itself hasn't changed the safe that much.
Speaker 1: You don't see a shift in the Trump I mean,
Speaker 1: I just saw an MSNBC banner talking about the overnight
Speaker 1: polling and the president's at new low. And in all
Speaker 1: of that, do you see in your neck of the woods? Uh,
Speaker 1: people walking away from the president or is he still
Speaker 1: had that core base? They don't know what to walk to.
Speaker 1: So the problem that we really have is, Okay, my
Speaker 1: neighbors in Hayes County, I have problems with Trump. The
Speaker 1: problem is the system hasn't presented an alternative. The alternative
Speaker 1: is going back to Obama. They really didn't like Obama.
Speaker 1: So in Texas you've got them locked in and the
Speaker 1: party has marked in very quickly. Here one more question
Speaker 1: to the Democrats. Have anybody that understands the five sided
Speaker 1: walls of the Pentagon? Are there any William Cohen or
Speaker 1: John Carries out there that actually understand you gotta budget
Speaker 1: this stuff? Well, I think the basic problem of the
Speaker 1: think tanks in Washington. They're really smart people all work
Speaker 1: the think tanks. The think tanks are funded by various
Speaker 1: corporate interests there. They're going to put that out. The
Speaker 1: days when you had independent defense analysts in both parties
Speaker 1: were limited. The best people there you have with the
Speaker 1: former generals. They're not working for the think tanks. They
Speaker 1: do know the budget, and that's I think one of
Speaker 1: the most smart things that Trump did. He reached down,
Speaker 1: got a group of generals to run it, and they
Speaker 1: hadn't spend their time at Berking's, in Heritage and everywhere else.
Speaker 1: Gideon Rosa's Foreign Affairs magazine leads off with an article
Speaker 1: on Afghanistan. Does George Freeman have an Afghanistan policy? Leave? Look?
Speaker 1: We can't wait, That's what David Girl's policy is. I mean, look,
Speaker 1: we we can't. We can't. We have no strategy, we
Speaker 1: have no goals that are achievable. We are there because
Speaker 1: it's harder politically to leave than to stay, So we
Speaker 1: leave a token number of troops that aren't gonna do anything.
Speaker 1: So George Freeman, thank you for letting me monopolize a conversation.
Speaker 1: Girls over there doing his taxes while on the gird doctrine.
Speaker 1: The news slow this morning is extraordinary and too short
Speaker 1: to visit with Arthur love At, the former chairman of
Speaker 1: the SEC, Arthur I was amazed at the forty eight
Speaker 1: hour news slow of an SEC really saying something about
Speaker 1: the changing of how research gets paid in London. Henry
Speaker 1: Kaufman said this morning there has to be one model.
Speaker 1: Do you agree there needs to be one global model
Speaker 1: for research, intellectual and sell side compensation or could Wall
Speaker 1: Street in New York go to loone. I think it
Speaker 1: would be spectacular if we could have one model, but
Speaker 1: just judging from different cultures, it is unlikely that we
Speaker 1: will wind up with one model. I think as far
Speaker 1: as myfort is concerned. The flashpoint obviously are on research payments,
Speaker 1: which ends the practice of asset managers receiving research were
Speaker 1: free from banks and brokers in return for placing trades
Speaker 1: with them. Now, how are you going to make sure
Speaker 1: that that really holds? And I think the whole question
Speaker 1: of the responsibility that goes with becoming an investment advisor,
Speaker 1: which is what the Bank of America Merrill Lynch has done.
Speaker 1: I suspect that if they go ahead on this, we're
Speaker 1: going to see all of the major players file as
Speaker 1: investment advisors and that carries with responsibilities that they've never had.
Speaker 1: To say, exactly a big change or what does this
Speaker 1: say to you about timing and out the the SEC's
Speaker 1: ability to reckon with what's happening here in just a
Speaker 1: matter of months this no action relief. Jake Layton says
Speaker 1: the chairman. The SEC designed with input from a range
Speaker 1: of market participants to reduce confusion and operational difficulties. We're
Speaker 1: looking at thirty months, a period of thirty months during
Speaker 1: which we could get common from participants in the marketplace.
Speaker 1: Why did this happen sooner? Uh? This is such a
Speaker 1: difficult area and a mistake has implications not just for
Speaker 1: US markets but for global markets. I think Jay Clayton
Speaker 1: has done a superb job of responding to many of
Speaker 1: the issues that have UH acted the SEC. And I
Speaker 1: think he's taking the right steps here because if he miscalculates,
Speaker 1: as I said before, the implications to global markets conclude great.
Speaker 1: I think done exactly what he should do. Arthur, you
Speaker 1: mentioned the cultural realities of a transatlantic global Wall Street,
Speaker 1: the city, and and the rest is well. One final question,
Speaker 1: if we may in two rushed a morning, there is
Speaker 1: the cultural difference of just stay and American at Barclays,
Speaker 1: a British British British bank. Just think of Premier football, folks.
Speaker 1: Is Jeff Staley's tenure under threat because of the miserable
Speaker 1: results this morning in the stock down seven? You'd have
Speaker 1: to say that about any CEO of a company with
Speaker 1: that kind of stock performance. I don't know enough about
Speaker 1: the culture, the management culture within the company to say
Speaker 1: one way or the other. But in these days any
Speaker 1: company that Joe's results and disappointing such as this, the
Speaker 1: CEO has got to be very, very careful and look
Speaker 1: behind Arthur. Thank you so much on short notice this morning,
Speaker 1: and really on it to me an historic day for
Speaker 1: the Securities and Exchange Commission honor to speak with their
Speaker 1: former chairman, Arthur Lovett. Thanks for listening to the Bloomberg
Speaker 1: Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at
Speaker 1: Tom Keene. David Gura is at David Gura. Before the podcast,
Speaker 1: you can always catch us worldwide. I'm Bloomberg Radio.