WEBVTT - Bloomberg Wall Street Week - June 28th, 2024 0:00:00.280 --> 0:00:02.599 This is Bloomberg Wall Street Week. 0:00:02.680 --> 0:00:07.280 The global push into infrastructure, breaking the IPO logjam in text. 0:00:07.160 --> 0:00:09.200 The financial stories that shape. 0:00:08.880 --> 0:00:12.040 Are were cutting inflation without losing jobs? Do we need 0:00:12.119 --> 0:00:14.520 rate cuts? And if so? How many? Investing in a 0:00:14.560 --> 0:00:16.120 time of geopolitical turmoil. 0:00:16.200 --> 0:00:18.560 Through the eyes of the most influential voices. 0:00:18.720 --> 0:00:22.480 Ten Roguoff economists at Harvard former FDIC had Shila Bert 0:00:22.640 --> 0:00:27.360 ge CEO, Larry Kulp, San Francisco fed President Mary Daily Bloomberg. 0:00:26.840 --> 0:00:30.560 Wall Street Week with David Weston from Bloomberg Radio. 0:00:30.320 --> 0:00:33.720 To President's debate, the Yen struggles and voters head to 0:00:33.760 --> 0:00:36.680 the polls in France. This is Bloomberg Wall Street Week. 0:00:36.840 --> 0:00:37.720 I'm David Weston. 0:00:38.920 --> 0:00:39.320 This week. 0:00:39.440 --> 0:00:40.360 Roger Altman of. 0:00:40.320 --> 0:00:43.160 Evercore on what's at stake in the US elections? 0:00:43.520 --> 0:00:47.240 Did voters are queasy? Your sour about the economy? 0:00:47.560 --> 0:00:50.800 Very lovely of the Peterson Institute on the Chinese economy 0:00:51.040 --> 0:00:52.080 on the eve of the. 0:00:52.080 --> 0:00:54.880 Third plumm He needs to find a way to restore 0:00:55.040 --> 0:00:57.520 confidence while also helping to transition. 0:00:57.960 --> 0:01:00.400 And Ray McGuire of Lozard on the wad wave of 0:01:00.440 --> 0:01:02.120 investment needs coming our. 0:01:01.960 --> 0:01:05.560 Way one would be generative AI in the drop down box. 0:01:05.600 --> 0:01:07.200 There is a mount of capital that we're going to 0:01:07.240 --> 0:01:09.679 need to ploy in order to support generative AI. 0:01:22.600 --> 0:01:24.399 We begin with the markets, where the S and P 0:01:24.480 --> 0:01:27.080 five hundred reach for yet another record high on Friday, 0:01:27.120 --> 0:01:30.319 but fell down to give up eight tens percent for 0:01:30.360 --> 0:01:32.800 the week. Overall still and end of the quarter at 0:01:32.840 --> 0:01:35.040 fifty four to sixty, and that is just above the 0:01:35.040 --> 0:01:38.120 Bloomberg L's year end media number of fifty four to fifty. 0:01:38.400 --> 0:01:41.240 The NAAZAC was up point twenty four percent on the week, 0:01:41.480 --> 0:01:44.720 while the yield and the tenure gained thirteen basis points, 0:01:44.720 --> 0:01:46.880 almost all of it on Friday, to end the week 0:01:46.959 --> 0:01:49.640 at four point three eight percent. For the perspective of 0:01:49.680 --> 0:01:52.200 someone putting real money to work for almost twenty four 0:01:52.280 --> 0:01:55.520 years as CIO of the California State Teacher's Retirement System, 0:01:55.720 --> 0:01:57.920 welcome back now a longtime friend of Wall Street Week, 0:01:57.960 --> 0:01:59.920 he is mister Chris Aylman. So, Chris, great to have 0:01:59.920 --> 0:02:01.640 you back with us. Thank you for being with us. 0:02:01.680 --> 0:02:03.760 So let's start with those elves, because you've been a 0:02:03.760 --> 0:02:05.800 fan of the elves for a good long time. You 0:02:05.960 --> 0:02:08.520 worked on getting us to reintroduce them. Here, figure out 0:02:08.520 --> 0:02:10.880 how to do it right now? If you listen to 0:02:10.880 --> 0:02:13.040 the Blueberg elves. They say basically, you can put your 0:02:13.080 --> 0:02:14.799 pencil down and go home for the rest of the year. 0:02:14.840 --> 0:02:16.160 We're just gonna be flat for the rest of the year. 0:02:16.160 --> 0:02:17.120 Does that make sense, you. 0:02:17.080 --> 0:02:18.240 Know, David, I think it does. 0:02:18.360 --> 0:02:21.520 This is a good example of summer aduldrums. Sell them 0:02:21.560 --> 0:02:24.359 may and go away. I really think people should pay 0:02:24.360 --> 0:02:26.720 attention to these elves. I mean it is a bit 0:02:26.760 --> 0:02:29.919 different than back with Lewis ru Kaiser, but they were 0:02:30.080 --> 0:02:33.120 very predictive and powerful. And the fact that they're saying 0:02:33.639 --> 0:02:35.720 that this is where the market may be at the 0:02:35.840 --> 0:02:36.480 end of the year. 0:02:37.000 --> 0:02:38.160 Look at the French election. 0:02:38.280 --> 0:02:41.200 Look how non US and particularly Europe has sold off 0:02:41.240 --> 0:02:44.280 in anticipation in that election. I think we're going to 0:02:44.320 --> 0:02:47.239 see a lot of volatility in the fall and concern 0:02:47.880 --> 0:02:51.440 about how this election goes. Last night was I had nightmares. 0:02:51.480 --> 0:02:54.520 That was not a good feeling after that. So I 0:02:54.639 --> 0:02:57.440 just think the market is really capped out in here 0:02:57.480 --> 0:03:01.160 and probably it may hit another highway, but it's going 0:03:01.240 --> 0:03:03.519 to be trading sideways for a while. 0:03:03.800 --> 0:03:04.760 So go below the. 0:03:04.720 --> 0:03:07.000 Top line number to what's going on below. Because it's 0:03:07.000 --> 0:03:09.880 a pretty concentrated market. It's really just envidiing a couple 0:03:10.000 --> 0:03:12.320 other related stocks driving it is that going to continue? 0:03:12.400 --> 0:03:14.200 Is there going to be any broadening this market at all? 0:03:15.520 --> 0:03:17.880 Everybody would like to see it, but the Russell two 0:03:17.880 --> 0:03:20.560 thousand is not confirming, and I don't think you will. 0:03:20.639 --> 0:03:24.240 It isn't It is an AI market that is the 0:03:24.240 --> 0:03:27.760 whole focus, that is the growth potential, and at the 0:03:27.840 --> 0:03:30.080 start we're just going to see, as we're already seeing 0:03:30.080 --> 0:03:33.240 now with some of the early products, some value but 0:03:33.400 --> 0:03:35.920 not a lot of revenue. And so I don't think 0:03:35.960 --> 0:03:39.040 the rest of the market. The economy is okay despite 0:03:39.080 --> 0:03:42.720 what you're last night. The economy is okay, but it's 0:03:42.720 --> 0:03:46.520 not gangbusters. So I think that that the broad market 0:03:46.800 --> 0:03:50.200 stocks are going to have decent returns, but the earnings 0:03:50.240 --> 0:03:52.560 are not going to add a bunch of boosts in 0:03:52.680 --> 0:03:57.000 the summertime, and we will probably as we keep waiting 0:03:57.040 --> 0:04:00.360 for the FED to take action. The market is moving 0:04:00.440 --> 0:04:03.040 okay with a FED at four and a half on 0:04:03.080 --> 0:04:05.680 that thirty year bond, and obviously they only control the 0:04:05.720 --> 0:04:09.200 short end at five. I look at a full fiscal year, 0:04:09.320 --> 0:04:12.360 so June thirty today we close the books into my 0:04:12.440 --> 0:04:15.040 career here and I have to tell you that the 0:04:15.120 --> 0:04:18.720 market was up twenty five percent year over year at 0:04:18.800 --> 0:04:24.200 June thirty, non US up over almost fifteen tremendous returns. 0:04:24.360 --> 0:04:26.560 I just don't see the gas to take it farther. 0:04:27.120 --> 0:04:28.719 Of course, at custors, you put a lot of money 0:04:28.800 --> 0:04:30.720 to work for a long time. I mean, and you 0:04:30.800 --> 0:04:33.960 got to have a long term time horizon given what 0:04:33.960 --> 0:04:36.799 you're doing with pensions. There is the market indicating something 0:04:36.880 --> 0:04:39.479 longer term about AI and what it could mean for 0:04:39.520 --> 0:04:40.520 fundamental growth. 0:04:40.880 --> 0:04:41.040 Yeah. 0:04:41.040 --> 0:04:43.839 Absolutely, I mean you look at at Nvidia, that stock 0:04:43.880 --> 0:04:47.679 alone is up two hundred percent one year return right now. 0:04:48.240 --> 0:04:54.240 That expectation of opportunistic growth and the expectation of efficiency 0:04:54.279 --> 0:04:57.960 in the markets and in the economy, Wall Street is 0:04:58.000 --> 0:05:01.880 always overshooting and over stimistic. And you already saw some 0:05:02.600 --> 0:05:07.200 sellback two weeks ago in Nvidia because almost every mutual 0:05:07.240 --> 0:05:10.400 fund I look at even some of the value funds 0:05:10.760 --> 0:05:12.520 hold in Vidia in their holdings. 0:05:12.600 --> 0:05:13.800 You couldn't afford not to. 0:05:14.440 --> 0:05:17.120 But that's going to run out of gas because it's 0:05:17.160 --> 0:05:19.920 the old question of fear of missing out. I think 0:05:19.960 --> 0:05:23.080 it's finally reaching the point. It's got tremendous grow threate 0:05:23.160 --> 0:05:27.000 twenty five percent in sales, but the recognition is it 0:05:27.040 --> 0:05:28.280 can't go to the moon. 0:05:28.240 --> 0:05:29.760 And where are the other stocks? 0:05:29.800 --> 0:05:33.040 So I think the market the narrow leadership is always 0:05:33.080 --> 0:05:35.520 a concern, but we're not going to see that broad 0:05:35.600 --> 0:05:38.279 build out for a while. I think June thirty is 0:05:38.320 --> 0:05:41.240 a classic time for four h one k investors to 0:05:41.360 --> 0:05:45.080 grab that statement and then diversify. They're going to find 0:05:45.120 --> 0:05:48.760 their overweight stocks, and they're probably overweight tech stocks. This 0:05:48.960 --> 0:05:51.520 is a good time to rebalance and to move some money, 0:05:51.600 --> 0:05:53.599 a little bit into bonds and a little bit into 0:05:53.640 --> 0:05:55.039 other types of mutual funds. 0:05:55.520 --> 0:05:57.760 Chris, thanks so much for being with us today, for 0:05:57.880 --> 0:05:59.800 all you've contributed to Wall Street Weeks through the years, 0:05:59.800 --> 0:06:01.880 and for spending part of your very last day on 0:06:01.920 --> 0:06:04.040 the job of Counselor's here with us. We look forward 0:06:04.040 --> 0:06:06.240 to seeing Chris again in his new life. Longtime friend 0:06:06.240 --> 0:06:10.000 of Wall Street Week, he is mister Chris Almen. This week, 0:06:10.080 --> 0:06:13.080 Bloomberg Invests convened in Lower Manhattan to talk with some 0:06:13.120 --> 0:06:16.040 of the leaders of Global Wall Street about what investors 0:06:16.080 --> 0:06:19.600 should be thinking about. We talked with Ray maguire, president 0:06:19.600 --> 0:06:22.599 of Lazard, and started with what he sees is driving 0:06:22.600 --> 0:06:25.440 the need for investment over the next few years. 0:06:25.800 --> 0:06:30.719 That goes to kind of a macro opportunities that we have, 0:06:30.800 --> 0:06:33.480 and I would put him in five categories. One would 0:06:33.480 --> 0:06:36.440 be generative AI in the drop down box there is 0:06:36.480 --> 0:06:38.520 the amount of capital that we're going to need deploy 0:06:38.600 --> 0:06:42.200 in order to support generative AI data centers as an example. 0:06:42.839 --> 0:06:47.400 Renewable energy or energy transition would be another of a 0:06:47.440 --> 0:06:50.240 macro trend and the drop down box and renewable energy 0:06:50.279 --> 0:06:53.600 and energy transition is how do we invest in the 0:06:53.680 --> 0:06:57.080 infrastructure that's going to allow us to remain competitive and 0:06:57.279 --> 0:07:00.440 energy transition and also be effective in how we go 0:07:00.480 --> 0:07:05.040 about energy transition. The other is this has taken on 0:07:05.080 --> 0:07:14.560 a different nomenclature dependent upon who's communicating. It's either enshuring, fringesuring, deglobalization, 0:07:14.760 --> 0:07:18.960 or what I would call reglobalization. And the reglobalization means 0:07:19.000 --> 0:07:23.560 how do we invest in US manufacturing. Remember we peaked 0:07:23.960 --> 0:07:27.239 in US manufacturing in June of nineteen seventy nine, where 0:07:27.280 --> 0:07:30.720 one in five Americans worked in a factory in the 0:07:30.760 --> 0:07:34.560 manufacturing bay said Ey, it's probably one in twenty. And 0:07:35.000 --> 0:07:38.080 much of the dependence that we have in the manufacturing 0:07:38.080 --> 0:07:40.040 world for all the things that we do or dependent 0:07:40.120 --> 0:07:43.440 upon the supply chain, So reglobalization, it's going to be 0:07:43.440 --> 0:07:45.440 another factor. The other factor that I would look to 0:07:45.600 --> 0:07:49.600 is the largest growing population that exists in North America 0:07:49.720 --> 0:07:53.120 is sixty five years and older, and so how we 0:07:53.440 --> 0:07:56.760 drop down box, how do we engage in healthcare for 0:07:56.800 --> 0:08:01.200 that demographic, How do we manage the trench of wealth 0:08:02.000 --> 0:08:08.480 or not in the last of cybersecurity, macro themes, and 0:08:08.600 --> 0:08:10.560 the investment that we will have to make from the 0:08:10.600 --> 0:08:14.800 private sectors, investment that we also today see being led 0:08:14.840 --> 0:08:19.520 by what's taking place in Washington, the IRA as an 0:08:19.520 --> 0:08:23.640 example of the Chips Act. Fundamental to how we compete 0:08:23.680 --> 0:08:24.280 going forward. 0:08:24.760 --> 0:08:26.320 Just where I wanted to go, which is the role 0:08:26.360 --> 0:08:29.000 of private versus public as we go forward. As you 0:08:29.040 --> 0:08:31.120 look at from your point of view at LAZARD, what 0:08:31.240 --> 0:08:33.200 it's the right role for the government, what's the right 0:08:33.240 --> 0:08:36.239 role for the private sector in supplying the capital that's needed. 0:08:37.200 --> 0:08:39.480 It's going to have to be a partnership, especially for 0:08:39.600 --> 0:08:44.199 the elements of the macro transit order for us to compete, 0:08:44.800 --> 0:08:46.880 it's going to have to be public private partnerships, which 0:08:46.880 --> 0:08:49.040 we're seen in many ways. I think with the IRA 0:08:49.200 --> 0:08:52.080 and with the Chips Act and look at a number 0:08:52.200 --> 0:08:56.200 of private enterprises that are involved in that with the 0:08:56.240 --> 0:08:59.480 support of the government. So there's those partnerships, and each 0:08:59.520 --> 0:09:02.000 one of these macro themes is going to have to 0:09:02.040 --> 0:09:07.080 be public private partnerships. As we reglobalize, how do we 0:09:07.160 --> 0:09:11.360 invest in the elements of that reglobalization. The way that 0:09:11.400 --> 0:09:14.280 we do that is through we need government policy that's 0:09:14.320 --> 0:09:17.040 going to be supportive, and then we need private enterprise 0:09:17.120 --> 0:09:20.200 to partner, and across the spectrum you're going to see 0:09:20.200 --> 0:09:24.280 public private partnerships that lead our ability to remain competitive. 0:09:24.400 --> 0:09:25.680 Let me pick up on one of the things you've mentioned 0:09:25.720 --> 0:09:29.560 a couple times is workers, the number of workers, trained workers, 0:09:29.559 --> 0:09:33.200 specificlarly trained works or to grow as an economy, you 0:09:33.320 --> 0:09:36.680 need more laborers. In the recent past, it appears that 0:09:36.679 --> 0:09:40.199 we've been sustained to some extent by legal immigration, actually 0:09:40.400 --> 0:09:43.120 legal migrants being added as a workforce. What's the role 0:09:43.160 --> 0:09:46.240 of immigration in terms of the growth of this economy. 0:09:46.400 --> 0:09:48.040 So as you look at some of those huge projects 0:09:48.080 --> 0:09:50.640 where you need the workers and also the trained workers. 0:09:51.160 --> 0:09:55.880 Well, apart from the political implication that first of all, 0:09:55.920 --> 0:09:58.640 we need to make certain that the workforce that we 0:09:58.720 --> 0:10:01.120 currently have as a workforce that is trained to be 0:10:01.200 --> 0:10:06.320 able to address the huge opportunities the demand for labor. 0:10:07.240 --> 0:10:10.400 In my senses that as you think about the IRA 0:10:10.760 --> 0:10:13.679 and you think about projects like Gateway, and you think 0:10:13.720 --> 0:10:19.400 about the organizations today that train the labor, that there's 0:10:19.480 --> 0:10:22.319 a tremendous opportunity for us to continue to invest in that. 0:10:23.000 --> 0:10:26.200 Unions as an example, how do we invest in that 0:10:26.240 --> 0:10:27.599 and how do we make sure that the unions is 0:10:27.600 --> 0:10:32.160 supportive so they can go train the workforce, reducing the 0:10:32.240 --> 0:10:35.680 requirements that you have a college degree in order to 0:10:35.760 --> 0:10:37.720 do some of the work that's going to be necessary. 0:10:37.800 --> 0:10:42.480 So workforce training is critical. By the same token, workforce 0:10:42.520 --> 0:10:45.520 housing is going to be critical. So for seventy two 0:10:45.520 --> 0:10:49.080 thousand people commuting into this geography, where do you house them? 0:10:49.440 --> 0:10:51.760 That's going to be part of the overall thought process 0:10:51.800 --> 0:10:54.320 and part of the overall architecture is we think about 0:10:54.640 --> 0:10:57.640 projects like Gateway, and as I think about what gateways, 0:10:57.720 --> 0:11:03.840 the implications of Gateway were found and exciting in a 0:11:03.880 --> 0:11:07.640 reflection of what we can do when we decide to 0:11:08.880 --> 0:11:14.559 invest in this country and invest in the most important 0:11:14.559 --> 0:11:16.680 part of the country, which is the talent. 0:11:17.520 --> 0:11:19.880 When we talk about things like generative AI as well 0:11:19.920 --> 0:11:23.240 as energy transition. It's hard to have that discussion without 0:11:23.240 --> 0:11:26.320 talking about China somehow, because China has really put a 0:11:26.320 --> 0:11:30.560 lot of investment into those There's obviously national security issues 0:11:30.559 --> 0:11:32.960 of the China at the same time, how can we 0:11:33.080 --> 0:11:34.520 get along if I can put it that way with 0:11:34.679 --> 0:11:37.719 China in terms of economies, so that we both get 0:11:37.720 --> 0:11:41.800 the best of it without conceding or compromising our national security. 0:11:42.040 --> 0:11:43.920 So I would say when it comes to generator of 0:11:44.000 --> 0:11:49.120 AI that we are ahead in the actual general of AI, 0:11:49.880 --> 0:11:54.280 the technology of generative AI, and if you look at 0:11:54.600 --> 0:11:57.520 who are the architects of that, they reside in this country. 0:11:58.240 --> 0:12:00.640 So I take confidence in that when it comes to 0:12:01.280 --> 0:12:05.960 the energy sources that are necessary for energy transition. As 0:12:06.000 --> 0:12:09.840 an example, seventy to ninety percent of the raw materials 0:12:09.920 --> 0:12:17.680 necessary for renewable energy energy transition is refined by China, 0:12:18.760 --> 0:12:21.640 and so as we think about that, we'll have to 0:12:21.679 --> 0:12:23.760 reduce our exposure to the supply chain. 0:12:24.280 --> 0:12:28.880 That was Ray McGuire of Lizard coming up. The Chinese 0:12:28.880 --> 0:12:32.319 Communist Party begins its Third Party Plenum next month in Beijing. 0:12:32.720 --> 0:12:34.959 We go over the state of the Chinese economy and 0:12:35.040 --> 0:12:38.120 what will be on the agenda with Mary Lovely, senior 0:12:38.160 --> 0:12:40.080 fellow of the Peterson Institute. 0:12:40.480 --> 0:12:45.040 He has put his money down on innovation and so 0:12:45.200 --> 0:12:46.640 called high quality development. 0:12:48.200 --> 0:12:50.439 That's next on Wall Street Week on Bloomberg. 0:12:51.840 --> 0:12:56.080 This is Bloomberg Wall Street Week with David Weston from 0:12:56.200 --> 0:13:00.680 Bloomberg Radio. 0:13:03.800 --> 0:13:06.360 This is Wall Street Week. I'm David Weston. Next month, 0:13:06.480 --> 0:13:09.520 the Chinese Communist Party will hold its delayed plan on 0:13:09.640 --> 0:13:12.600 economic issues for a preview of what we should look for. 0:13:12.640 --> 0:13:16.240 We welcome now very Lovely, Peterson Institute for International Economics, 0:13:16.400 --> 0:13:18.880 Senior Fellow. So, Mary, welcome back. Great to have you 0:13:18.960 --> 0:13:21.440 here now. As I understand, typically this Third Plan and 0:13:21.720 --> 0:13:24.079 does focus on some ecademic issues. Going back in history, 0:13:24.160 --> 0:13:26.880 there were some major announcements coming out. This one's been 0:13:26.880 --> 0:13:28.880 delayed a year. Do we know why I was delayed? 0:13:29.720 --> 0:13:32.280 Well, I think it was delayed because the president president, 0:13:32.360 --> 0:13:35.600 she was focused on other events, and there may be 0:13:35.760 --> 0:13:37.960 more in the background that we don't know. One of 0:13:37.960 --> 0:13:40.400 the interesting things about the Third Planum is that it 0:13:40.440 --> 0:13:45.000 allows for a bit of horse trading economic reforms, as 0:13:45.080 --> 0:13:48.600 China needs to undertake create some winners and losers, and 0:13:48.679 --> 0:13:52.520 so the planem allows a chance for multiple issues we 0:13:52.559 --> 0:13:54.560 put on this table on the same time, so that 0:13:54.640 --> 0:13:56.880 maybe I lose in some ways, I win in others. 0:13:57.120 --> 0:14:00.240 So it allows some political bargaining to have and that 0:14:00.360 --> 0:14:03.000 may allow us to see some real progress. 0:14:03.480 --> 0:14:05.719 Mary, let me put you in President G's chair right 0:14:05.720 --> 0:14:07.920 now as he looks at his economy. What do you 0:14:07.920 --> 0:14:10.400 think his top priorities are. We have the property issues 0:14:10.400 --> 0:14:14.120 you described, local government, You've got use unemployment, which is 0:14:14.120 --> 0:14:17.880 an issue. You've got deflation in a lot of places. 0:14:18.040 --> 0:14:20.840 But what do you think are the big priorities for him? 0:14:21.280 --> 0:14:24.280 Well, we've written recently about what we think of as 0:14:24.360 --> 0:14:29.680 China's stuck transition. So China is transitioning from its old 0:14:29.720 --> 0:14:32.120 growth model to a new growth model, a new growth 0:14:32.160 --> 0:14:35.800 model that really is just being born. And President she 0:14:35.960 --> 0:14:39.200 himself has warned about breaking the old before building the new. 0:14:39.640 --> 0:14:42.640 So I think that's really his problem right now. We 0:14:42.720 --> 0:14:48.120 see weak domestic demand, low consumer sentiment, well business sentiment, 0:14:48.560 --> 0:14:51.120 some signs of exit of foreign investors. 0:14:51.400 --> 0:14:53.280 So we have some work to do on the short 0:14:53.360 --> 0:14:55.560 run to revive the economy in the short run. 0:14:56.440 --> 0:14:59.720 A little bit longer term, there's lots and lots of challenges. 0:15:00.280 --> 0:15:05.400 He has put his money down on innovation and so 0:15:05.480 --> 0:15:10.680 called high quality development. This encompasses reforms to very broad 0:15:10.680 --> 0:15:15.400 sectors of the economy. But nevertheless, these things are things 0:15:15.400 --> 0:15:17.560 that need to be done, and the changes need to 0:15:17.560 --> 0:15:20.360 be made now. So he needs to find a way 0:15:20.400 --> 0:15:24.320 to restore confidence while also helping to transition to an 0:15:24.360 --> 0:15:29.840 economy that's really built on investment, greening the system, building 0:15:29.840 --> 0:15:32.680 a more sustainable system, and building a more equal system. 0:15:33.400 --> 0:15:35.960 Mary tell us about the relationship between the Chinese economy 0:15:36.000 --> 0:15:37.240 and the economies of the rest of the world, and 0:15:37.280 --> 0:15:39.600 particularly start with the United States in particular. So a 0:15:39.680 --> 0:15:42.080 lot of talk about US so called Second China Shock, 0:15:42.400 --> 0:15:45.280 a lot of concern about subsidies of businesses over there 0:15:45.360 --> 0:15:48.640 with experts United States. I could start with evs, electric vehicles. 0:15:48.640 --> 0:15:50.560 By the way, Europe's concerned about that as well. How 0:15:50.560 --> 0:15:52.000 big an issue is that for China. 0:15:52.480 --> 0:15:55.120 Over China, it's a very big issue, and we've seen 0:15:55.160 --> 0:15:59.200 this in their diplomatic response to the US claims of 0:15:59.280 --> 0:16:03.200 overcapacity city. They have consistently said that the world needs 0:16:03.240 --> 0:16:08.800 their green energy products. They've doubled down on their strategy. 0:16:08.920 --> 0:16:12.400 It's not unusual in China for there to be lots 0:16:12.400 --> 0:16:15.160 of sort of ramp and growth, particularly because a lot 0:16:15.160 --> 0:16:17.840 of industrial policy is uncoordinated. 0:16:17.880 --> 0:16:18.800 It's done through the. 0:16:18.680 --> 0:16:22.040 Provinces, and then there's a period of rationalization, and we're 0:16:22.080 --> 0:16:25.080 seeing some of that right now, as some firms are 0:16:25.120 --> 0:16:28.920 surely going to exit because of weak earnings or even 0:16:29.400 --> 0:16:33.280 losses that overwhelmed their ability to stay in business. So 0:16:34.320 --> 0:16:38.280 we're seeing China rationalize at the same time that we're 0:16:38.280 --> 0:16:41.760 seeing the West say, hey, no way are we going 0:16:41.800 --> 0:16:44.080 to experience what we experienced before. 0:16:44.200 --> 0:16:47.760 We're going to take preventative steps. And we saw President Biden. 0:16:48.280 --> 0:16:52.760 Just a few weeks ago levy tariffs on evs, solar, 0:16:53.560 --> 0:16:56.920 medical equipment, and other products as a way to get 0:16:56.960 --> 0:17:00.880 ahead of this so called new wave of Chinese exports. 0:17:01.160 --> 0:17:03.880 Let's talk about those preventative measures, as you call them. 0:17:04.240 --> 0:17:06.359 I wonder, as far as you can discern, what is 0:17:06.560 --> 0:17:10.120 US policy economically, specifically with respect to China right now. 0:17:10.240 --> 0:17:12.000 There was a time when we talked about decoupling. He 0:17:12.119 --> 0:17:14.400 said decoupling was way too much because it's too large 0:17:14.400 --> 0:17:16.720 an economy, that it was de risking. But it seems 0:17:16.760 --> 0:17:19.240 like we're de risking an awful lot of what China's 0:17:19.280 --> 0:17:19.919 trying to give us. 0:17:20.960 --> 0:17:21.240 Yeah. 0:17:21.359 --> 0:17:24.080 I mean every step we take seems to be more 0:17:24.119 --> 0:17:28.000 toward decoupling really than de risking. And the reason I 0:17:28.040 --> 0:17:32.159 say that is because de risking would have a specific targets. 0:17:33.600 --> 0:17:37.720 You know, when President Biden puts tariffs on medical supplies 0:17:37.760 --> 0:17:39.880 coming out of China, in some sense, that's a bit 0:17:39.960 --> 0:17:43.200 de risking because we saw during the pandemic that we 0:17:43.200 --> 0:17:47.560 were overrelianed on China for personal protective equipment and other 0:17:47.600 --> 0:17:48.679 medical supplies. 0:17:49.240 --> 0:17:51.680 So that would be a form de risking. But we 0:17:51.760 --> 0:17:52.520 see so. 0:17:52.680 --> 0:17:58.040 Many different approaches to moving away from China, Marriott. 0:17:58.080 --> 0:17:59.560 We have an election going on here in the United 0:17:59.560 --> 0:18:02.800 States coming up in November, and of course President Trump 0:18:02.800 --> 0:18:05.200 when he was president, really took a very strong stance 0:18:05.240 --> 0:18:07.639 on China. It's not at all clear that President Biden 0:18:07.680 --> 0:18:09.760 backed off that for all the reasons you just described, 0:18:09.800 --> 0:18:12.040 in some ways even went further with it. How much 0:18:12.080 --> 0:18:13.840 of a difference do you think it makes in US 0:18:13.920 --> 0:18:16.919 China relations which man is the next president United States? 0:18:17.359 --> 0:18:21.240 I think it makes profound difference. President Biden has been 0:18:22.080 --> 0:18:25.439 more effective, I think in terms of hitting China in 0:18:25.520 --> 0:18:29.400 ways that matter for US security, in particular the export 0:18:29.440 --> 0:18:33.280 controls and the key to the success of the export 0:18:33.320 --> 0:18:37.680 controls has been coordination with other nations, in particular Japan 0:18:38.359 --> 0:18:40.600 and Europe, who hold key. 0:18:40.440 --> 0:18:42.520 Parts of the semiconductor supply chain. 0:18:43.080 --> 0:18:47.240 Without that coordination, the export controls would not be effective. 0:18:48.520 --> 0:18:51.800 President Trump is promising ten percent tacks across the board 0:18:51.880 --> 0:18:56.000 on all nations, so called flat sixty on China. This 0:18:56.040 --> 0:18:58.119 is a clear signal to the other nations that the 0:18:58.240 --> 0:19:02.639 US is in it for itself, American first, and I 0:19:02.680 --> 0:19:05.720 think it would really undermine a lot of the policies 0:19:05.720 --> 0:19:08.800 that we're taking to push back on Chinese policies that 0:19:08.840 --> 0:19:12.960 we think are unfair, but also to diversify the global economy. 0:19:13.400 --> 0:19:16.320 So I think it is a vitally important election for 0:19:16.520 --> 0:19:17.639 US Tina relations. 0:19:18.000 --> 0:19:19.640 Mary, it's always such a treat to have you. Thank 0:19:19.640 --> 0:19:21.760 you so much for your time. That is Mary Lovely 0:19:21.880 --> 0:19:26.040 of the Peterson Institute. American voters will choose between two 0:19:26.359 --> 0:19:28.960 very different approaches to business and the economy at the 0:19:29.000 --> 0:19:32.360 polls this November. For his views on the possible consequences, 0:19:32.440 --> 0:19:35.399 we welcome back now Roger Oltman. He's founder and senior 0:19:35.480 --> 0:19:38.159 chairman of Evercore. So Roger, always great to have you 0:19:38.200 --> 0:19:40.600 with us. We're looking forward to this election. In whichever 0:19:40.640 --> 0:19:43.280 he is doing. At this point, we do increasingly hear 0:19:43.480 --> 0:19:47.159 very different points of view between on the one hand, Bidenomics, 0:19:47.240 --> 0:19:49.600 which I think did take a departure from some of 0:19:49.680 --> 0:19:53.080 the neoliberalism sort of less regulation, less government of bolvement 0:19:53.480 --> 0:19:55.720 on the one hand, and then President Trump now is 0:19:55.760 --> 0:19:57.960 talking about things that sounds like merketfulism. He wants to 0:19:57.960 --> 0:20:00.399 all to be tariffs. Give us your sense, somebody a 0:20:00.520 --> 0:20:03.560 veteran of both Wall Street and Washington, what's at stake here? 0:20:03.960 --> 0:20:10.200 Well, there are, as you say, two very different visions, and. 0:20:12.280 --> 0:20:13.960 Voters will have the chance. 0:20:13.800 --> 0:20:20.960 To render a verdict, so to speak, on President Biden's 0:20:21.040 --> 0:20:25.840 record because it's right now, whereas President Trump's was a. 0:20:25.760 --> 0:20:26.800 Few years ago. 0:20:27.160 --> 0:20:31.119 There are two main takeaways from the question of Biden's record. 0:20:32.960 --> 0:20:36.199 On the one hand, I think most presidents, including the 0:20:36.200 --> 0:20:38.960 two I serve David would be very. 0:20:38.760 --> 0:20:43.360 Proud to have the basics of his record. 0:20:44.119 --> 0:20:49.640 Sixteen million new jobs created, an unemployment rate below four 0:20:49.680 --> 0:20:53.280 percent for one of the longest stretches in American history, 0:20:55.680 --> 0:21:01.120 huge increases in private investment and consisting growth. Even at 0:21:01.160 --> 0:21:05.640 this very moment four years after this recovery, began, which 0:21:05.640 --> 0:21:08.320 would have been in the second half of twenty twenty, 0:21:09.000 --> 0:21:14.359 as COVID lessened it a bit. We're growing at about 0:21:14.359 --> 0:21:17.320 two point seven two point seventy five percent right this minute, 0:21:18.040 --> 0:21:20.440 and to be doing that this late in a recovery 0:21:21.160 --> 0:21:27.040 is remarkable. On the other hand, we can see that 0:21:27.200 --> 0:21:32.000 voters are queasy or sour about the economy and at 0:21:32.000 --> 0:21:36.040 the moment rating Trump more highly than President Biden on 0:21:36.119 --> 0:21:37.680 the economy. 0:21:37.760 --> 0:21:38.640 And why is that? 0:21:39.000 --> 0:21:42.760