WEBVTT - Yuan Devaluation Unlikely, Don’t Hit Panic Button: BBH’s Thin 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Abramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:32.239 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Well 0:00:32.280 --> 0:00:34.760 as Greg Jarrett was just mentioning the dollar showing strength 0:00:34.760 --> 0:00:38.000 at least against the Japanese end right now one ten forty, 0:00:38.360 --> 0:00:42.840 also strength against the pounds sterling at one fifty three. 0:00:43.280 --> 0:00:45.680 Here to tell us more about exchange rates and the 0:00:45.760 --> 0:00:49.159 US dollars, Dr Win Thin, Global head of Emerging Markets 0:00:49.320 --> 0:00:53.000 FX for Brown Brothers Harriman uh Win Thin, thanks very 0:00:53.080 --> 0:00:55.320 much for being with us. The strength of the US 0:00:55.600 --> 0:00:59.800 dollar is that going to continue against emerging market uh, 0:01:00.000 --> 0:01:04.160 currencies such as Mexico and Brazil, as well as Indonesia, 0:01:04.280 --> 0:01:07.280 Malaysia and so on. Yes, but first of all, thanks 0:01:07.360 --> 0:01:10.120 thanks for having me. It's always a pleasure. Um. Yes, 0:01:10.400 --> 0:01:14.840 uh I look for continued e M weakness. Um, it's 0:01:14.840 --> 0:01:16.760 for a riot of reasons. You know. Obviously the big 0:01:16.800 --> 0:01:19.680 stories is higher U S rates, but I think what's 0:01:19.680 --> 0:01:24.000 really given this UH, this last leg lower in the 0:01:24.000 --> 0:01:27.600 e M pushes the is the rising trade tensions, you know, 0:01:27.640 --> 0:01:30.640 and strong global growth, strong global trade flows are are 0:01:30.680 --> 0:01:33.399 really bullish for em and with all the risks that 0:01:33.400 --> 0:01:36.880 are out there, all the tip for tat um uncertainty, 0:01:36.920 --> 0:01:39.959 but where where the US WE stands, that's all hurting 0:01:40.000 --> 0:01:44.080 the emerging markets. So yes, it's a broad based dollar rally. 0:01:44.080 --> 0:01:46.800 It's not just against the e M, it's also been 0:01:46.880 --> 0:01:51.000 rallied against the majors. So um that broad based rallually 0:01:51.040 --> 0:01:54.440 being driven by the US interest rate outlook. So when 0:01:54.480 --> 0:01:56.560 you know, one thing that I'm struck by is the 0:01:56.640 --> 0:01:59.920 strengthening dollar has been a trend for many weeks now 0:02:00.200 --> 0:02:04.320 and people have been adjusting to that. The rapid depreciation 0:02:04.400 --> 0:02:07.720 of the Chinese un however, seems to be picking up speed. 0:02:07.760 --> 0:02:12.680 Has been the biggest weekly drop since tu in that currency, 0:02:13.000 --> 0:02:15.239 and you just have to wonder, you know, is this 0:02:15.760 --> 0:02:19.040 UH an active devaluation by the Chinese government or does 0:02:19.040 --> 0:02:23.720 this signal further and and rapidly deteriorating outlook for the 0:02:23.800 --> 0:02:27.760 Chinese economy. Well, I think it's uh. Two thinks that 0:02:27.840 --> 0:02:30.240 it's still early on so I don't want to tell 0:02:30.360 --> 0:02:32.720 the alarm bells. It's it's certainly uh, you know, raising 0:02:32.760 --> 0:02:35.079 eyebrows the speed of the move this week. But what 0:02:35.200 --> 0:02:38.040 I've noted and what I've been telling our clients is 0:02:38.080 --> 0:02:41.240 that this is a short period of you want under 0:02:41.240 --> 0:02:44.560 performance follows a long extended period of you want a performance. 0:02:44.639 --> 0:02:46.720 And when the rest of em was selling off in 0:02:46.960 --> 0:02:49.920 uh do out most of Q two UM, the Chinese 0:02:50.000 --> 0:02:55.000 one was really holding up pretty well. It was almost unchanged. 0:02:55.240 --> 0:02:56.560 I would say a year to date, if you look 0:02:56.600 --> 0:02:59.480 at your w c RS page, the Chinese you want 0:02:59.520 --> 0:03:02.840 is the fifth best performing currency is down only one 0:03:04.040 --> 0:03:07.399 against the dollar year to date. That compares to minus 0:03:07.400 --> 0:03:10.040 for past though, minus seventeen and a half a turkey. 0:03:10.480 --> 0:03:12.160 So I just want to keep things sort of in 0:03:12.160 --> 0:03:14.000 in perspective. The other thing I would also add is 0:03:14.000 --> 0:03:17.160 if you look at China's real effective exchange rate that 0:03:17.240 --> 0:03:21.959 is just for the trade inflation, et cetera. UM, it's 0:03:22.000 --> 0:03:23.240 done at the b I S. If you look on 0:03:23.280 --> 0:03:25.960 your on your page, you carry that b I S 0:03:26.080 --> 0:03:30.560 DCNR index. UM, it's it's been rising this past year, 0:03:30.560 --> 0:03:33.840 and that's because the yuan is outperforming. That is is 0:03:34.240 --> 0:03:36.520 it's training partners. The currency of its trading partners have 0:03:36.520 --> 0:03:39.480 been weakening much more than yuan, and so the in 0:03:39.560 --> 0:03:43.840 real effective terms, the yu want's actually appreciating. So again, 0:03:43.880 --> 0:03:46.120 just things that sort of think about you know, I 0:03:46.200 --> 0:03:48.440 know that you know these headlines, but you know, and 0:03:48.640 --> 0:03:50.400 you have to think a sort of longer view that. 0:03:50.680 --> 0:03:52.840 Uh and look, remember just that they're also reminded one 0:03:52.840 --> 0:03:54.680 there in two thousands of team the last time China 0:03:54.720 --> 0:03:57.280 shock the marks of evaluation, it ends up having contend 0:03:57.320 --> 0:04:00.840 with the massive cap rout flows out of China, know, uh, 0:04:00.960 --> 0:04:03.080 and it really roys CAPA marks. I don't think that's 0:04:03.080 --> 0:04:04.600 something they want to do right now. So for now, 0:04:04.880 --> 0:04:07.120 I think it's just sort of regular adjustment. Well, I 0:04:07.120 --> 0:04:09.320 mean to talk about some of those headlines, I just 0:04:09.360 --> 0:04:11.800 want to think give you one of them. China think 0:04:11.840 --> 0:04:14.760 tank warns of financial panic risk and leaked note. I 0:04:14.800 --> 0:04:18.279 mean there was a leaked report by a Chinese government 0:04:18.279 --> 0:04:21.560 backed think tank talking about how with the rising defaulse, 0:04:21.640 --> 0:04:25.279 with the trade tensions, liquidity shortages, China's looking pretty shaky 0:04:25.360 --> 0:04:28.800 right now. What do you make of China? Like the 0:04:28.800 --> 0:04:34.000 rest of them is struggling um with a global environment 0:04:34.000 --> 0:04:35.719 that's that's not as friendly as it used to be. 0:04:35.960 --> 0:04:37.800 Of course, China has its own domestic issues with the 0:04:37.800 --> 0:04:40.919 banking sector, financials that I totally agree with that. My 0:04:40.960 --> 0:04:42.839 base case has always been that that that it will 0:04:43.000 --> 0:04:46.040 moddle through and I think that and the reason that's 0:04:46.080 --> 0:04:48.160 one of the main things that I feel that evaluation 0:04:48.360 --> 0:04:51.320 is unlikely is that's just gonna add just more uncertain 0:04:51.400 --> 0:04:55.800 to the mix. Um they really in times uncertainty. I 0:04:55.800 --> 0:05:00.000 think in general, the Chinese policy makers seemed a favor stability, 0:05:00.000 --> 0:05:01.920 at least appearance of stability, and I think I'd be 0:05:02.000 --> 0:05:04.000 sort of pushing the panic button if they were the 0:05:04.080 --> 0:05:07.320 value now. So um, you know again it's keep we 0:05:07.320 --> 0:05:08.640 gotta keep buying this. You know a lot of people 0:05:08.640 --> 0:05:11.159 in calling for disaster and from China's last pan twenty years, 0:05:11.200 --> 0:05:13.240 and you'll continue to model through and then that's that's 0:05:13.240 --> 0:05:16.440 still my basic case. Win. Then give you about twenty seconds. 0:05:16.560 --> 0:05:20.920 If emerging market currencies continue to weaken against the US dollar, 0:05:21.120 --> 0:05:23.279 all things being equal, isn't that going to be better 0:05:23.320 --> 0:05:28.160 for their exports? Uh? It's better for their exports, yes, Um, 0:05:28.200 --> 0:05:30.960 But again it's for instance, a lot of these countries 0:05:30.960 --> 0:05:33.160 that have taken on a lot of external debt in dollars, 0:05:33.440 --> 0:05:36.440 so it becomes much more owners to repay that actor 0:05:36.560 --> 0:05:40.520 in finance excellent nets. So there's pros and cons um 0:05:40.600 --> 0:05:44.680 you know. To me, I think the emerging markets just 0:05:44.680 --> 0:05:49.240 prefer a stable global environment, free trade, the currencies you 0:05:49.279 --> 0:05:52.080 know rise, their currencies fall. But I think the possible 0:05:52.080 --> 0:05:53.520 making the in which is like some clarity out of 0:05:53.520 --> 0:05:55.920 the US. They like they have to step back from 0:05:56.360 --> 0:05:59.479 uh this this trade war talk, um, and you know 0:05:59.480 --> 0:06:02.040 that's what the US will take care of themselves. Dr Winton, 0:06:02.120 --> 0:06:04.320 thank you so much for being with us. Dr Winton, 0:06:04.480 --> 0:06:07.880 global head of Emerging Markets and Effects at Brown Brothers Harriman, 0:06:08.000 --> 0:06:11.560 coming to us UH in New York and some some 0:06:11.640 --> 0:06:15.640 good insight and good perspective when people start to wring 0:06:15.720 --> 0:06:19.080 their hands over this really rapid evaluation of the UN 0:06:19.160 --> 0:06:22.279 given the fact that it has appreciated for the most part. 0:06:22.440 --> 0:06:40.920 In recent months, the US Food and Drug Administration has 0:06:40.920 --> 0:06:45.680 approved g W Pharmaceuticals treatment for two rare forms of 0:06:45.839 --> 0:06:50.080 childhood epilepsy. Now the treatment, it's a liquid. It's made 0:06:50.120 --> 0:06:53.440 from a compound in the marijuana plant. And to tell 0:06:53.600 --> 0:06:56.200 us more about this, we've got the chief executive of 0:06:56.360 --> 0:06:59.920 g W Pharmaceuticals, Justin go over, Justin, thank you very 0:07:00.040 --> 0:07:03.560 much for being with us. Tell us about this treatment 0:07:03.760 --> 0:07:09.320 and is it epidialects or epity Alex, I beg your part. 0:07:09.360 --> 0:07:12.040 That's correct, it's epidialects, So thank you very much for 0:07:12.080 --> 0:07:16.240 having me on your show. Yes, the treatment is called epidialects. 0:07:16.400 --> 0:07:21.560 It is made from a molecule called cannabi dial, which 0:07:21.680 --> 0:07:24.800 is a part of the cannabis plant that does not 0:07:25.080 --> 0:07:30.360 make you high. So it's a purified um cannabi dial 0:07:30.520 --> 0:07:34.160 formulation administered to children in the form of an oral solution. 0:07:35.160 --> 0:07:39.080 We have developed this treatment within the field of childhood 0:07:39.080 --> 0:07:45.320 onset epilepsy, conducted three controlled clinical trials published in leading 0:07:45.360 --> 0:07:48.680 medical journals, and obviously delighted earlier this week that the 0:07:48.760 --> 0:07:52.640 FDA has approved this medication. The types of conditions that 0:07:52.680 --> 0:07:56.120 we treat, these two examples of that are called lenox 0:07:56.120 --> 0:07:59.400 gasto syndrome and travase syndrome are two of the most 0:07:59.440 --> 0:08:04.840 difficult forms of epilepsy to treat, often uh commencing in 0:08:05.000 --> 0:08:09.400 very early childhood, characterized by seizures that tend not to 0:08:09.440 --> 0:08:13.160 respond to other anti epileptic drugs. So it's a real breakthrough. 0:08:13.400 --> 0:08:16.360 The first medicine approved by FDA derived from the cannabis 0:08:16.360 --> 0:08:19.000 plant and the first and a new type of anti 0:08:19.040 --> 0:08:23.920 epileptic drug. So I see that the Drug Enforcement Administration 0:08:24.120 --> 0:08:27.880 has yet to reclassify this form of cannabis and that 0:08:28.000 --> 0:08:30.200 it has to do so before it can be put 0:08:30.280 --> 0:08:32.400 to market. Can you give us a sense of how 0:08:32.440 --> 0:08:35.079 long that could take and what the outreach has been 0:08:35.120 --> 0:08:38.320 like there? Yes, So it's important to say that this 0:08:38.400 --> 0:08:42.160 is not a political issue. It's very much a procedural 0:08:42.280 --> 0:08:47.240 one that follows the FDA's approval. So under the rate 0:08:47.280 --> 0:08:51.360 relevant regulations, the d e A has up to ninety 0:08:51.480 --> 0:08:57.960 days um to what is termed reschedule this product Epidialects, 0:08:58.040 --> 0:09:00.600 so that it can be prescribed by for positions and 0:09:00.640 --> 0:09:05.200 available through pharmacy. So um, the the FDA will have 0:09:05.280 --> 0:09:08.320 made a recommendation to the d e A as to 0:09:08.400 --> 0:09:12.040 the schedule which they believe epidialect should be placed into. 0:09:12.320 --> 0:09:16.400 The d e A will currently be reviewing that recommendation 0:09:16.880 --> 0:09:19.320 and will rule on that within a ninety day period. 0:09:19.400 --> 0:09:22.839 So what that means commercially is that the product will 0:09:22.920 --> 0:09:26.160 be available. We believe in the early fall of this year, 0:09:27.559 --> 0:09:30.960 could this could this drug to be used to treat 0:09:31.160 --> 0:09:37.120 other types of conditions well, our focus for epidialects has 0:09:37.200 --> 0:09:42.120 very much been in within the epilepsy arena and specifically 0:09:42.160 --> 0:09:47.600 within these two forms of childhood epilepsy. UM. I think 0:09:47.640 --> 0:09:50.400 it's fair to say that our focus for future development 0:09:50.400 --> 0:09:54.880 of this product falls within the epilepsy arena. So there 0:09:54.920 --> 0:09:59.760 are several other forms of epilepsy, particularly those in childhood, 0:10:00.559 --> 0:10:04.720 which summer suffer similar we have suffer similar situations with 0:10:04.840 --> 0:10:08.160 regard to seizures that are difficult to control. So there 0:10:08.200 --> 0:10:10.400 really continues to be an unmet need within the field 0:10:10.400 --> 0:10:14.880 of epilepsy, and our focus remains dedicated towards addressing those 0:10:14.920 --> 0:10:18.400 patient needs. I mean, more broadly, I would say that 0:10:18.440 --> 0:10:22.599 there are within the cannabis plant and within our own pipeline, 0:10:22.640 --> 0:10:26.800 a range of other molecules which we call cannabinoids that 0:10:26.880 --> 0:10:29.720 may not be epidone X, but maybe different molecules within 0:10:29.720 --> 0:10:33.760 the plant that may well have applications and other disease areas. 0:10:33.840 --> 0:10:36.480 And I certainly can provide a few examples well, but 0:10:36.559 --> 0:10:38.800 justin before you get into that, I think that one 0:10:38.840 --> 0:10:43.160 reason why we found this so particular particularly interesting is 0:10:43.200 --> 0:10:48.400 because the FDA has been slow to approve medications that 0:10:48.440 --> 0:10:51.920 are based on cannabis or marijuana. And I'm wondering, you know, 0:10:51.960 --> 0:10:54.800 you've been in the industry, the pharmaceutical industry for nearly 0:10:54.840 --> 0:10:58.920 two decades. Was the process of getting this drug approved 0:10:59.320 --> 0:11:02.960 different when it comes to dealing with the FDA. Well, 0:11:03.240 --> 0:11:05.160 i'd firstly, I would say, I think, I mean, the 0:11:05.200 --> 0:11:08.160 FDA will be the first agency in the world to 0:11:08.280 --> 0:11:11.920 have approved epidialects, So I'm not sure I would say 0:11:11.920 --> 0:11:14.440 that they've been slow. In fact, I think this review 0:11:14.480 --> 0:11:18.080 timeline has been rapid, and the engagement that we've had 0:11:18.080 --> 0:11:20.920 with FDA over the last five years as we've developed 0:11:20.960 --> 0:11:23.920 this medicine has been very constructive. Indeed, so I think 0:11:24.200 --> 0:11:27.160 where I think, uh, And you saw statements from FDA 0:11:27.240 --> 0:11:30.319 ear earlier this week which I think ring true with us, 0:11:30.360 --> 0:11:33.160 which is when when it comes to the rigors of science, 0:11:33.640 --> 0:11:37.680 when it comes to looking at the cannabis plant and 0:11:37.920 --> 0:11:43.480 identifying molecules from it that may be developed as prescription medications. Um, 0:11:43.520 --> 0:11:46.280 you know, the FDA are willing to assess and potentially 0:11:46.280 --> 0:11:49.880 approve those kinds of medications and engage constructively. I think 0:11:50.160 --> 0:11:53.120 what they have been pointing out is that that's a 0:11:53.160 --> 0:11:58.199 different process and a different way of of approaching patients 0:11:58.720 --> 0:12:03.120 treatment uh to um, you know, marijuana per se. So 0:12:03.440 --> 0:12:07.040 I think it's what what this approval does do, is 0:12:07.080 --> 0:12:10.240 it it very much signals the fact that if one 0:12:10.559 --> 0:12:15.679 looks at cannabis and tries to apply rate modern pharmaceutical 0:12:15.720 --> 0:12:18.880 principles to components of the cannabis plant, that f d 0:12:19.040 --> 0:12:23.280 A will and have shown themselves to engage very constructively 0:12:23.360 --> 0:12:25.800 with industry. Thank you so much for being with us. 0:12:25.800 --> 0:12:31.760 Justin go Over, chief executive of GW Pharmaceuticals based in California, 0:12:31.880 --> 0:12:36.160 coming to us after having their drug based aimed at 0:12:36.200 --> 0:12:57.000 curing epilepsy approved by the FDA. Congratulations. Our next guest 0:12:57.360 --> 0:13:01.440 has a fascinating story and he over sees a fascinating company. 0:13:01.520 --> 0:13:04.040 So I'm very glad to bring in Abe and Kuma, 0:13:04.120 --> 0:13:07.360 his chief executive and co founder of Nyanza, which is 0:13:07.360 --> 0:13:09.080 based in San Francisco, but he joins us here in 0:13:09.080 --> 0:13:13.920 our eleven three oh studios. Abe, your company is uh 0:13:14.200 --> 0:13:16.640 pretty pretty significant and it does business with a lot 0:13:16.640 --> 0:13:20.200 of the biggest companies out there. But I want to 0:13:20.200 --> 0:13:22.600 start with your story because you hadn't even seen a 0:13:22.640 --> 0:13:26.840 computer when you were growing up in Ghana before arriving 0:13:27.040 --> 0:13:30.559 in the US. Tell us a little bit about that. Sure. 0:13:30.800 --> 0:13:33.320 First of all, thanks for having me, um. So I 0:13:33.320 --> 0:13:35.079 grew up in Ghana. As you mentioned, I went to 0:13:35.160 --> 0:13:37.839 high school in Ghana, but moved to the United States 0:13:37.840 --> 0:13:40.680 for college. And so I went to college at Caltech 0:13:40.920 --> 0:13:45.439 in southern California, where I, without seeing a computer, I 0:13:45.520 --> 0:13:48.640 did the crazy thing of deciding to major in computer 0:13:48.679 --> 0:13:52.079 science and electrical engineering and so and so far it's 0:13:52.080 --> 0:13:56.360 worked out great. Yeah, that's what everybody does, right. You know, 0:13:56.440 --> 0:13:58.640 you don't know, you don't have a computer growing up, 0:13:58.640 --> 0:14:01.600 and you decide comp you there's technology is where it's at. 0:14:01.720 --> 0:14:03.160 Like you go to cal Tech and then you go 0:14:03.200 --> 0:14:05.000 to Harvard Business School and then you've become a chief 0:14:05.000 --> 0:14:08.760 executive of a tech Yeah. Right, that's those no stumbling 0:14:08.760 --> 0:14:12.280 blocks there right now there you go. Um, let's talk 0:14:12.320 --> 0:14:16.760 a little bit about how you decided that the founding 0:14:16.840 --> 0:14:20.520 the answer that this company serves a need. What did 0:14:20.520 --> 0:14:24.240 you see out there and what caused you to think 0:14:24.640 --> 0:14:27.200 I can solve this problem? For sure? So, so I 0:14:27.200 --> 0:14:30.040 started your answer, first of all with a group of 0:14:30.160 --> 0:14:32.880 very talented UM other individuals as well. Um I have 0:14:32.920 --> 0:14:36.320 two other co founders, um Dan and on and both immigrants, 0:14:36.520 --> 0:14:39.200 both immigrants, UM a couple of m I T pH 0:14:39.320 --> 0:14:43.280 d s. The problem that we saw was basically sort 0:14:43.280 --> 0:14:47.600 of a melding of what's happening within large businesses today. 0:14:47.800 --> 0:14:53.520 Right within large businesses, there there is an untapped opportunity 0:14:53.600 --> 0:14:56.560 to actually make sense of the data that's flowing freely 0:14:56.600 --> 0:15:00.160 on their networks today. Data is the new oil, and 0:15:00.280 --> 0:15:03.160 what we do is we enable our customers actually makes 0:15:03.200 --> 0:15:06.920 sense of the data on their networks to solve a 0:15:07.040 --> 0:15:10.360 number of different business problems. One of the core business 0:15:10.440 --> 0:15:12.680 problems we allow them to use the data for is 0:15:12.720 --> 0:15:16.880 around user experience and performance management. In the world where 0:15:17.400 --> 0:15:21.160 things are growing from the types and diversity of devices 0:15:21.200 --> 0:15:24.720 connecting to their networks and the growth of IoT devices, 0:15:25.280 --> 0:15:29.040 a lot of customers have the ability to harness and 0:15:29.120 --> 0:15:33.160 generate tremendous new business value on the database on their networks. 0:15:33.480 --> 0:15:35.640 Think about what we do as being akin to what 0:15:35.800 --> 0:15:39.160 Google does with websites right. Google allows you to make 0:15:39.240 --> 0:15:42.840 sense out of your websites. Google allows you to make 0:15:43.000 --> 0:15:46.920 sense out of the data that UM your people are 0:15:46.920 --> 0:15:49.800 searching on the Internet for we're doing something similar with 0:15:49.880 --> 0:15:52.640 the data on computer networks. I don't think though of 0:15:52.800 --> 0:15:57.600 Google Search as having artificial intelligence sort of algorithms trying 0:15:57.640 --> 0:16:02.040 to parse out and turn in large codes in the 0:16:02.080 --> 0:16:04.720 same way. I mean, perhaps that is the case, but 0:16:04.800 --> 0:16:07.080 when you're talking, I wonder how important it is to 0:16:07.120 --> 0:16:11.560 have some sort of intelligence in analyzing the data for 0:16:11.760 --> 0:16:14.240 say an uber or what are the other companies you 0:16:14.240 --> 0:16:17.680 work with? Yeah, so so what Whether it's um Uber 0:16:17.840 --> 0:16:22.720 leveraging our technology for driving user experience on their computer networks. 0:16:23.080 --> 0:16:28.200 Whether it is large universities um whether it's Stanford, whether 0:16:28.360 --> 0:16:32.240 it's USC, whether it's Notre Dame leverage internet technology to 0:16:32.440 --> 0:16:35.000 generate insights for the I T teams to better support 0:16:35.080 --> 0:16:38.360 the students and the end users. Whether it's a large 0:16:38.480 --> 0:16:42.280 global manufacturing organization leveraging the data on their networks in 0:16:42.440 --> 0:16:46.960 order to effectively um UM if um UM drive the 0:16:47.000 --> 0:16:51.200 manufacturing process because of the device land themselves, big data, 0:16:51.760 --> 0:16:56.920 machine learning AI. It's all about making It allows us, 0:16:56.960 --> 0:16:59.480 It allows our customers to see the invisible. It allows 0:16:59.480 --> 0:17:01.720 our customers to make sense of invisible of what's happening 0:17:01.760 --> 0:17:06.760 on their networks. By bringing you know, all this disparate 0:17:07.119 --> 0:17:11.320 unstructured data, making sense of it to solve different business problems. 0:17:11.359 --> 0:17:14.359 One of those could be performance, another one could be, um, 0:17:14.680 --> 0:17:18.639 you know, improving the manufacturing process. Let's say I'm the 0:17:18.680 --> 0:17:22.680 Atlanta Braves, I come to you, I say I need help. 0:17:23.560 --> 0:17:26.960 You tell me great and tell people the story. Yeah. 0:17:27.000 --> 0:17:30.000 So you know, whether it's the Atlanta Braves, whether it's 0:17:30.040 --> 0:17:33.159 a large public venue that has lots and lots of 0:17:33.240 --> 0:17:37.280 users leveraging the network. What we allow a company like 0:17:37.400 --> 0:17:40.520 the Atlanta Braves to do is to actually ask questions 0:17:40.560 --> 0:17:43.400 out of the data that's on their networks, right, ask 0:17:43.520 --> 0:17:46.879 questions about, Hey, for this particular game or for this 0:17:46.960 --> 0:17:50.200 particular time on the network, what were people actually doing, 0:17:50.560 --> 0:17:53.480 all in an anonymised fashion, right. And so one of 0:17:53.520 --> 0:17:56.920 the things with big data and data sciences, while there's 0:17:56.920 --> 0:17:59.359 a fair bit of insights to clean out of that data, 0:18:00.080 --> 0:18:03.720 companies that enable that data transformation also have a big 0:18:03.760 --> 0:18:07.159 responsibility in terms of respecting sort of the privacy of 0:18:07.200 --> 0:18:09.440 the users on their networks. And so for Atlanta Braves, 0:18:09.480 --> 0:18:11.399 we give them the tools in order to sort of 0:18:11.440 --> 0:18:13.880 ask questions of the networks and also give a world 0:18:13.880 --> 0:18:17.600 class user experience off for their fans. Well done. Thanks 0:18:17.680 --> 0:18:19.800 very much for being with us and giving us a 0:18:19.800 --> 0:18:23.639 look inside the world of analyzing data on Internet systems 0:18:23.640 --> 0:18:27.080 that are Internet networks that are based inside of corporations. 0:18:27.160 --> 0:18:31.600 Much appreciated. Aba h on Kuma. He is the chief 0:18:31.640 --> 0:18:35.760 executive and the co founder of Nyanswa, joining us here 0:18:35.760 --> 0:18:52.080 in our eleven three oh studios. I do want to 0:18:52.160 --> 0:18:56.280 just get a note here in on emerging markets because 0:18:56.400 --> 0:19:00.879 the MSCI Emerging Markets Currency Index is now ropping today 0:19:01.440 --> 0:19:04.480 for the biggest one day drop. It's the biggest since 0:19:05.200 --> 0:19:08.080 March of last year. And our next guest has a 0:19:08.080 --> 0:19:10.400 really interesting theory as to why. Dr Brendan Brown joins 0:19:10.440 --> 0:19:12.879 US now chief economist and head of Economic research at 0:19:12.920 --> 0:19:17.520 Mitsubishi u f J Securities. Dr Brown, so, how do 0:19:17.560 --> 0:19:20.080 you interpret the weakness we've seen in emerging markets assets? 0:19:20.200 --> 0:19:23.840 Interpreted for the the emerging market weakness as being a first 0:19:24.000 --> 0:19:28.119 sign of a credit cycle turning globally And you have 0:19:28.160 --> 0:19:31.960 to remember that the emerging markets have been the absolute 0:19:32.080 --> 0:19:37.560 focal point of the credit inflation in this cycle. It's 0:19:37.600 --> 0:19:39.760 been where the hunt for yield has been at its 0:19:39.760 --> 0:19:43.800 greatest and where the various forms of financial engineering and 0:19:43.960 --> 0:19:48.639 leverage have been the greatest. Okay, so this could be 0:19:49.119 --> 0:19:52.240 sort of the canary in the coalbine that more than 0:19:52.280 --> 0:19:54.040 a canary in a cor mine. Even the emerging market 0:19:54.119 --> 0:19:58.560 economies these days PPP exchange rates account for six world GDP, 0:19:58.800 --> 0:20:01.399 so so this was this could actually a signal a 0:20:01.480 --> 0:20:05.399 real turning point. I'm just wondering how this relates to 0:20:06.160 --> 0:20:10.199 monetary policies, which, yes, the US is tightening um, but 0:20:10.600 --> 0:20:12.879 the e c B is still holding on so well. 0:20:12.880 --> 0:20:16.040 I would make a general observation that monetary normalization at 0:20:16.080 --> 0:20:18.280 this point is a fiction. Even in the US, we 0:20:18.359 --> 0:20:22.000 have interest rates well below rate of inflation, negative real 0:20:22.040 --> 0:20:24.119 interest rates, So from a point of view of money 0:20:24.160 --> 0:20:28.440 supply from a central bank side of the equation, there 0:20:28.560 --> 0:20:30.920 is really no normalization taking place. That maybe a bit 0:20:31.080 --> 0:20:33.920 less in the US and elsewhere, but monetary policy is 0:20:33.960 --> 0:20:37.000 still set at a pretty inflation redial. But there's another 0:20:37.480 --> 0:20:40.480 there's another dynamic in monetary policy, and that's what's happening 0:20:40.520 --> 0:20:42.760 on the credit side. You can have for central bank 0:20:42.800 --> 0:20:45.280 still with their foot down on the accelerator, but if 0:20:45.280 --> 0:20:48.200 the credit cycle is turning, the accelerator doesn't work so well. 0:20:48.240 --> 0:20:50.679 And may even actually not work at some point, and 0:20:50.720 --> 0:20:55.800 I think that's where we're approaching. Then, Okay, I'm just 0:20:55.800 --> 0:20:58.760 going to do a brief list of, you know, supposedly 0:20:58.800 --> 0:21:01.080 the problems in the world. Right, Okay, So you've got 0:21:01.440 --> 0:21:05.399 the Brexit negotiations between the UK and the European Union. 0:21:05.560 --> 0:21:08.280 They seem to be a mess. You have the political 0:21:08.320 --> 0:21:13.159 situation in Italy and the potential for some kind of 0:21:14.119 --> 0:21:17.320 challenge to the European Union in the euro and Angela 0:21:17.400 --> 0:21:21.600 Merkel in Germany facing political uh pressure. Um, you had 0:21:21.600 --> 0:21:26.800 a change of government in Spain recently. You have the 0:21:26.920 --> 0:21:31.280 issues related to Venezuela and oil politics in the Middle East. 0:21:31.400 --> 0:21:33.359 I raise all of the trade wars in the United 0:21:33.400 --> 0:21:36.120 States and NAFTA and child I raise all these things. 0:21:36.200 --> 0:21:38.240 At the same time, we haven't seen a big sell 0:21:38.280 --> 0:21:43.359 off in stock prices, and I'm wondering why, well, stock 0:21:43.400 --> 0:21:47.440 prices are not where this all starts. I mean, yes, 0:21:47.480 --> 0:21:49.280 we can all talk about the bubble and the fangs 0:21:49.359 --> 0:21:52.679 or whatever, but either I think the core of the 0:21:52.720 --> 0:21:56.439 asset inflation process is in the credit markets. It's in 0:21:56.480 --> 0:21:59.119 the irrational strategies we see for leverage. It's in the 0:21:59.200 --> 0:22:03.320 financial engine nearing, which camouflages believe ridge and that's that's 0:22:03.440 --> 0:22:06.440 where the irrational forces are. By the bye, you get 0:22:06.480 --> 0:22:08.679 asset prices which may be too high, but that's not 0:22:08.880 --> 0:22:11.280 where the unwinding starts, or it may and it may 0:22:11.400 --> 0:22:13.719 unwind at any time, I think. Just to take your 0:22:13.720 --> 0:22:17.119 points about Europe, the key point to watch there is 0:22:17.240 --> 0:22:20.840 that the mercle era is coming to an end and 0:22:21.000 --> 0:22:24.600 Germany is almost certainly or know nothing certain in politics, 0:22:24.640 --> 0:22:27.520 but it's going to swing towards the right away from 0:22:27.560 --> 0:22:32.280 the center euro center and and and that presents a 0:22:32.400 --> 0:22:36.240 big change in the set of opportunities for Italy on 0:22:36.119 --> 0:22:38.480 the one hand, and also for the UK. And my 0:22:38.600 --> 0:22:41.760 view in the UK and Brexit is that everyone will 0:22:41.800 --> 0:22:44.440 remain quiet amongst the Brexiteers in the UK until Britain 0:22:44.480 --> 0:22:46.160 is actually out of the door next March. But that's 0:22:46.160 --> 0:22:49.920 when the fun starts. But the fun will start, hopefully 0:22:50.000 --> 0:22:52.040 when Merkel is also going out for the door quite soon. 0:22:52.440 --> 0:22:55.040 So you know, you're saying that the the the asset 0:22:55.080 --> 0:22:57.600 inflation that's really most important is in the credit markets 0:22:57.600 --> 0:23:00.360 are where you need to really focus. Um. A lot 0:23:00.359 --> 0:23:01.840 of people have been looking to the U S HIG 0:23:01.880 --> 0:23:04.720 yield bond market as the canary in the coal mine 0:23:04.720 --> 0:23:07.600 of cracks forming in credit markets globally, and you just 0:23:07.680 --> 0:23:11.119 really haven't seen it. Why, what I would say was 0:23:11.119 --> 0:23:14.600 two points there. Clearly in the US market, how yield 0:23:14.800 --> 0:23:16.880 is related to a price of equity, So if you're 0:23:16.880 --> 0:23:19.720 still in the middle of a real bull market in equities, 0:23:20.160 --> 0:23:23.119 that sort of keeps for high yield market up. The 0:23:23.160 --> 0:23:25.639 second point, which is more strange, is well, we're not 0:23:25.680 --> 0:23:29.000 so strange, is that we had that volatility sell off 0:23:29.040 --> 0:23:32.119 in February, but volatility is a way back down again. 0:23:32.800 --> 0:23:35.600 I there is a key mathematical relationship, of course, which 0:23:35.600 --> 0:23:38.439 every quant will tell you between rising volatility and the 0:23:38.480 --> 0:23:42.480 price of hw yuel bonds, so that that's an accident 0:23:42.520 --> 0:23:44.199 waiting to happen at some point in the future, but 0:23:44.240 --> 0:23:46.120 it's not happened yet. So I think for key pressures 0:23:46.160 --> 0:23:48.320 have been on the emerging markets rather than on the 0:23:48.400 --> 0:23:50.479