WEBVTT - AFL-CIO Won’t Support USMCA Without Mexico Wage Fix (Podcast) 0:00:02.640 --> 0:00:05.320 Welcome to the Bloomberg Penel podcast. I'm Paul swing you. 0:00:05.360 --> 0:00:07.680 Along with my co host Lisa Brahma Waits. Each day 0:00:07.720 --> 0:00:10.240 we bring you the most noteworthy and useful interviews for 0:00:10.280 --> 0:00:12.520 you and your money. Whether at the grocery store or 0:00:12.560 --> 0:00:15.480 the trading floor. Find a Bloomberg Penl podcast on Apple 0:00:15.520 --> 0:00:17.960 podcast or wherever you listen to podcasts, as well as 0:00:17.960 --> 0:00:24.400 at Bloomberg dot com. We have talked about President Trump's 0:00:24.440 --> 0:00:28.280 what he calls his biggest trade negotiation achievement to date, 0:00:28.360 --> 0:00:31.319 which is the U S m c A that is 0:00:31.400 --> 0:00:36.320 the new NAFTA. But interestingly, the largest federation of unions 0:00:36.360 --> 0:00:40.680 in the United States is going to oppose this deal 0:00:40.960 --> 0:00:43.599 if there is an early vote called Joining us now 0:00:43.640 --> 0:00:47.080 to talk about that and in general about the backdrop 0:00:47.159 --> 0:00:50.080 for labor as Richard Trumka, president of the a f 0:00:50.200 --> 0:00:52.800 l c I, oh, thank you so much for being 0:00:52.840 --> 0:00:55.000 with us. So let's start with the U S m 0:00:55.040 --> 0:00:57.960 c A trade agreement. Why won't the a f l 0:00:58.080 --> 0:01:02.200 c I O support this this treaty if an early 0:01:02.280 --> 0:01:05.679 vote is pursued. Well, first of all, the labor movement 0:01:05.760 --> 0:01:10.119 is committed to ensuring that trade union deals benefit working people. 0:01:10.840 --> 0:01:15.400 That requires you have strong labor provisions and strong enforcement provisions. 0:01:15.760 --> 0:01:19.240 In order for this to work, Mexico has to abandon 0:01:19.720 --> 0:01:24.639 its low wage model, and it requires Mexico to change 0:01:24.640 --> 0:01:28.440 its laws, enforce its laws, and then have the resources 0:01:28.560 --> 0:01:32.280 necessary and the will necessary to do that. If we're 0:01:32.319 --> 0:01:37.000 forced to vote on NAP on the new NAFTA before 0:01:37.160 --> 0:01:40.479 they have changed their laws, effectively put them in place, 0:01:40.680 --> 0:01:43.319 and started to enforce them, we would have no choice 0:01:43.319 --> 0:01:46.640 but to impose them because the old system, the old 0:01:46.720 --> 0:01:50.840 low wage model of such jobs out of the United States, 0:01:50.880 --> 0:01:54.360 would remain in place. So the agreement itself says they 0:01:54.400 --> 0:01:56.560 have to be in place first. We don't want to 0:01:56.600 --> 0:01:59.440 premature vote. If we're forced to, we would have to 0:01:59.440 --> 0:02:03.480 oppose a that point. So, Richard, you talk about greater enforcement, 0:02:03.800 --> 0:02:06.880 does that mean that the negotiations of the agreement need 0:02:06.960 --> 0:02:11.320 to be opened back up the There are a number 0:02:11.320 --> 0:02:14.080 of ways to do enforcement. In fact, the agreement so 0:02:14.200 --> 0:02:18.360 far Paul could be looked at as having less enforcement 0:02:18.680 --> 0:02:23.120 than previous agreements. And here's how under the current system, 0:02:23.600 --> 0:02:27.560 you when of two countries have a dispute, they in panel, 0:02:27.680 --> 0:02:30.600 they go to a mechanism that they go through. They 0:02:30.600 --> 0:02:34.160 try to solve it. If they can't, they put together 0:02:34.240 --> 0:02:38.200 a panel. That panel acts like an arbitrator. That arbitrator 0:02:38.280 --> 0:02:41.600 makes a decision that is binding on them the new law, 0:02:41.680 --> 0:02:46.079 the new negotiated. When abandoned those panels, either party has 0:02:46.160 --> 0:02:49.720 the ability to block the paneling of those of the 0:02:49.720 --> 0:02:54.040 panel and therefore block any mechanism. There's no no way 0:02:54.080 --> 0:02:56.120 to enforce the Act at that point or the trade 0:02:56.160 --> 0:02:59.000 agreement at that point, so it has to be changed. 0:02:59.040 --> 0:03:02.639 You can do some of it in the implementing language. Uh. 0:03:02.680 --> 0:03:04.920 And we've been told a lot of that will be done, 0:03:05.280 --> 0:03:08.040 although we haven't seen it yet to be able to 0:03:08.080 --> 0:03:12.160 evaluate it. If he didn't, it isn't done. It isn't changed. Uh. 0:03:12.280 --> 0:03:15.440 And the ability to force the agreement isn't there. It's 0:03:15.440 --> 0:03:18.359 a useless agreement and it will actually be worse than 0:03:18.360 --> 0:03:21.280 the current When do we have Richard Trump cut from 0:03:21.320 --> 0:03:25.840 your perspective? Is representing thousands of workers out there? Do 0:03:25.919 --> 0:03:28.960 you think President Trump's policies have been good in general 0:03:29.040 --> 0:03:36.520 for them? You know, if you look at things, uh objectively, 0:03:36.600 --> 0:03:39.280 some of the stuff he's done, you could say that 0:03:39.360 --> 0:03:42.920 he's made a lot of our members lives harder. You know, 0:03:43.000 --> 0:03:47.400 he denied paychecks the federal workforce while he made him work. 0:03:48.040 --> 0:03:51.720 He jammed through a corporate tax cut on the backs 0:03:51.720 --> 0:03:57.120 of working people that encourages further outsourcing and automation. Uh. 0:03:57.160 --> 0:03:59.680 If you look at that, he's made our our pockets 0:03:59.680 --> 0:04:03.119 fly her. He just changed the rule that took over 0:04:03.160 --> 0:04:06.600 time away from over two million people, and he's made 0:04:06.600 --> 0:04:11.600 our jobs more dangerous. He slashed the number of safety regulations, 0:04:11.920 --> 0:04:15.440 He slashed the number of OCEHA inspectors. Just last month, 0:04:15.480 --> 0:04:20.159 he gutted the rule requiring employers to submit detailed reports 0:04:20.200 --> 0:04:23.520 on all workplace injuries. And so you can make the 0:04:23.600 --> 0:04:28.200 case that workers along those lines are worse off. We'll 0:04:28.200 --> 0:04:30.680 have my richard. As it relates to China, are you 0:04:30.720 --> 0:04:34.000 satisfied with the President's trade stance towards China or do 0:04:34.040 --> 0:04:37.240 you have any concerns? Well, you know, first of all, 0:04:37.240 --> 0:04:39.680 I paud the president for being willing to take trade 0:04:39.720 --> 0:04:43.320 on and actually talk about changing after that. That's an 0:04:43.360 --> 0:04:46.560 important step. So I give him credit for that. I 0:04:46.680 --> 0:04:50.160 also give him credit for for looking at China. You know, 0:04:50.680 --> 0:04:55.360 trade relationships are an opportunity really to strengthen democracies, to 0:04:55.520 --> 0:04:59.040 stimulate economies, and to uplift the well being a people 0:04:59.080 --> 0:05:02.840 here around the world. But they can also be used 0:05:02.880 --> 0:05:07.479 the other way to harm people and to undermine those rights. UH. 0:05:07.520 --> 0:05:10.720 And right now China has been doing that. We have 0:05:10.800 --> 0:05:14.080 the worst deficit, the largest deficite we've ever had in 0:05:14.120 --> 0:05:18.279 the world, uh four hundred and nineteen billion dollars in 0:05:18.400 --> 0:05:22.560 growing uh. And so looking at that relationship, trying to 0:05:22.640 --> 0:05:26.200 change it is very very important, and we'll continue to 0:05:26.240 --> 0:05:29.320 work with the administration try to make sure that that 0:05:29.400 --> 0:05:34.000 relationship gets right it because currently it's off course Richard, 0:05:34.040 --> 0:05:36.200 a lot of people say there has been too much 0:05:36.240 --> 0:05:40.520 emphasis placed on trade as the sort of villain here 0:05:40.560 --> 0:05:42.839 in terms of people losing their jobs, and that really 0:05:42.839 --> 0:05:46.719 the issue is automation. Uh. The lot of jobs previously 0:05:47.120 --> 0:05:50.159 that we're unionized and UH and that that gave people 0:05:50.320 --> 0:05:55.560 decent salaries are now eliminated through automation. How are you, 0:05:55.839 --> 0:05:57.680 as the head of the a f l c I O, 0:05:58.040 --> 0:06:01.520 addressing that, Well, we have a committee on the Future 0:06:01.560 --> 0:06:05.880 of Work that looks at not only automation, but artificial intelligence, 0:06:06.040 --> 0:06:09.679 robotics and everything else that goes along with it changing 0:06:09.720 --> 0:06:13.400 our ways. But you have to understand one thing, I 0:06:13.440 --> 0:06:19.720 don't except your original premise, because by design, NAPTA distorted 0:06:19.760 --> 0:06:23.880 the power relationships in favor of global employers over workers. 0:06:24.320 --> 0:06:27.840 It weakened workers bargaining power, and it encouraged the d 0:06:27.960 --> 0:06:32.799 industrialization of the US economy. UH. Those that caused wage 0:06:32.800 --> 0:06:37.479 stagnation that continues to this very day. It's a tandem. 0:06:37.920 --> 0:06:41.159 You can't just say it's only trade, but trade is 0:06:41.200 --> 0:06:46.360 a significant portion of wage stagnation and job loss. Automation 0:06:46.839 --> 0:06:49.800 actually can be a job creator in the future if 0:06:49.839 --> 0:06:53.479 we do things right. We're changing our apprentice programs to 0:06:53.600 --> 0:06:57.480 train our people are members for the jobs of the future. 0:06:57.839 --> 0:07:01.760 We're working with universities like Carnegie Mellon and m I 0:07:01.839 --> 0:07:07.280 T the leaders in artificial intelligence, robotics, UH and New 0:07:07.680 --> 0:07:10.760 the Thing the jobs of the future, to get in 0:07:10.800 --> 0:07:13.480 front of that curve so that we figure out how 0:07:13.520 --> 0:07:17.760 those things affect people. Here's a simple question, Lisa, Uh. 0:07:18.640 --> 0:07:21.840 Right now, we have a system that is leaving more 0:07:21.840 --> 0:07:28.200 and more and more people behind inequalities. Growing, artificial intelligence, robotics, 0:07:28.560 --> 0:07:31.480 all the automation, all of those things can accelerate that 0:07:31.560 --> 0:07:35.480 process if it's not done right. And what happens when 0:07:35.480 --> 0:07:39.120 a system no longer can provide a rising standard of 0:07:39.160 --> 0:07:43.440 living from majority of its citizens, a growing majority of existence. 0:07:43.680 --> 0:07:47.840 What happens to that system, It's actually a threat to 0:07:48.000 --> 0:07:50.560 democracy itself, and so we're trying to get in front 0:07:50.560 --> 0:07:55.680 of it, harness it, and make sure that communities, people 0:07:55.720 --> 0:07:58.720 in the community benefit from automation and not just a 0:07:58.800 --> 0:08:01.960 very few people at the very top. Richard Trumpka, thank 0:08:01.960 --> 0:08:04.440 you so much. Richard Trumpka, President at the a f 0:08:04.560 --> 0:08:06.560 l C i OH based on Washington, d C. Joining 0:08:06.640 --> 0:08:10.400 us to discuss the new NAFTA, which is winding its 0:08:10.400 --> 0:08:29.800 way through the congressional approval process. The U. S Treasury 0:08:29.840 --> 0:08:33.360 curve today inverts for the first time since two thousand seven. 0:08:33.720 --> 0:08:36.520 The move follows FED policy shift earlier in the week, 0:08:36.559 --> 0:08:40.040 as well as gloomier economic data, particularly out of Europe today. 0:08:40.240 --> 0:08:42.720 To help us kind of wind through this issue, we 0:08:42.760 --> 0:08:44.920 have Matt Egan. Matt is a portfolio manager and co 0:08:45.000 --> 0:08:47.880 head of the full Discretion team at Loomas Sales and 0:08:47.920 --> 0:08:50.000 Companies based in Boston, but Matt joins us in our 0:08:50.040 --> 0:08:54.040 Bloomberg Interactive Broker studio. Matt, welcome to Bloomberg. Thank you. 0:08:54.120 --> 0:08:56.760 What do you make of this yield curve? News today? 0:08:56.920 --> 0:08:58.679 A bit surprising to me. I think there's a lot 0:08:58.720 --> 0:09:01.800 of pessimism built into the Yeld curve. UM. You know, 0:09:01.960 --> 0:09:05.680 clearly the data has been weak, UM, and you know, 0:09:05.760 --> 0:09:08.120 there's definitely been centered in the manufacturing side of the 0:09:08.320 --> 0:09:11.240 of the global economy. And I guess in some ways 0:09:11.240 --> 0:09:13.920 it's not too surprising because there's been a lot of 0:09:13.920 --> 0:09:16.640 distortions thrown into that side of the economy through the 0:09:16.679 --> 0:09:20.040 trade war that being in last year. And it's not 0:09:20.120 --> 0:09:24.880 surprising it's affecting places like Germany, you know, more because 0:09:24.920 --> 0:09:27.679 they feed into that, you know, that manufacturing cycle on 0:09:27.720 --> 0:09:30.079 the earliest stages. So what does it say to you 0:09:30.480 --> 0:09:33.520 the fact that the Fed is holding off on rate 0:09:33.600 --> 0:09:37.679 hikes is not enough to give people a boost in 0:09:37.760 --> 0:09:41.120 terms of their longer inflation expectations and their longer term 0:09:41.160 --> 0:09:44.760 growth expectations. This is really fascinating. I think the FED 0:09:44.880 --> 0:09:48.760 is um paying closer attention to this or opening this 0:09:48.840 --> 0:09:52.719 up for broader dialogue. And I was UM watching. I mean, 0:09:52.760 --> 0:09:56.560 everybody probably pays attention to the Monetary Policy Forum in Farry, right, 0:09:56.559 --> 0:09:58.920 everybody's got down on their calendar, but it came out 0:09:59.160 --> 0:10:02.880 nine year old has so, but I think what was 0:10:02.920 --> 0:10:06.120 interesting is they came out pretty forcefully. We're talking about, hey, 0:10:06.160 --> 0:10:09.640 we're gonna really take a look at our monetary policy 0:10:09.640 --> 0:10:13.400 and our ability to both fight recessions and drive inflation. 0:10:13.880 --> 0:10:17.200 And they started talking about, uh, you know, concepts like 0:10:17.280 --> 0:10:21.480 average inflation targeting. And I think that there's a good 0:10:21.559 --> 0:10:23.800 chance over the next year or so where they some 0:10:23.800 --> 0:10:28.679 somehow adopt some formal policy revolving around that too, because 0:10:28.679 --> 0:10:30.720 I think, I mean, to a certain extent, this is 0:10:30.720 --> 0:10:33.080 what their m O has been, right, They've been going 0:10:33.160 --> 0:10:35.520 lower for longer, trying to get inflation up. They've talked 0:10:35.520 --> 0:10:38.640 about it. In some ways, you could say they haven't 0:10:38.640 --> 0:10:42.200 been successful. It's been a failure, and so I think 0:10:42.200 --> 0:10:45.160 they're they're sensitive to that. And um, you know, it's 0:10:45.200 --> 0:10:47.600 an open question whether a central bank can really drive 0:10:47.679 --> 0:10:49.760 up inflation or not. I mean, Japan has been trying 0:10:49.760 --> 0:10:52.640 to do this for years. Uh so, but there's a 0:10:52.679 --> 0:10:56.120 feeling that they have to do something, and I think 0:10:56.200 --> 0:10:59.480 that it it has broader implications though well I'm not 0:10:59.720 --> 0:11:03.520 I'm fixed income expert like Lisa. However, I do know 0:11:03.679 --> 0:11:07.640 that an inverted yield curve oftentimes suggests a recession. Do 0:11:07.679 --> 0:11:10.640 you think that now is a higher probability than maybe 0:11:11.040 --> 0:11:14.679 three to six months ago. It is certainly a higher probability. 0:11:14.440 --> 0:11:18.280 I think that the inversion of the yield curve means 0:11:18.360 --> 0:11:20.920 less than it used to when it when it was 0:11:20.960 --> 0:11:24.160 in um what it would mean before. I think because 0:11:24.240 --> 0:11:27.199 of the unusual nature of monetary policy and how it's 0:11:27.240 --> 0:11:31.520 being affected. Uh, but relative to say three or four 0:11:31.679 --> 0:11:34.720 months ago, is clearly that you know, the probability recession 0:11:34.800 --> 0:11:38.080 has risen. I personally think that if I had to 0:11:38.120 --> 0:11:40.320 guess the net next rate hike, it's going to be 0:11:40.440 --> 0:11:44.480 up rather than down, because I think this is similar 0:11:44.520 --> 0:11:48.360 to two thousands fifteen sixteen, a mid cycle correction. Uh. 0:11:48.440 --> 0:11:51.560 It's mainly coming through the inventory channels, and you know, 0:11:51.600 --> 0:11:53.920 this may be a leap, but I think we're going 0:11:53.960 --> 0:11:56.199 to see it bottoming here. Problem with that is the 0:11:56.280 --> 0:11:59.280 market is looking at the data and hasn't inflected up yet, 0:11:59.320 --> 0:12:04.360 and that's disconcerting. So as a fixed income investor, is 0:12:04.360 --> 0:12:06.680 this a good time to go into risk your corporate 0:12:06.679 --> 0:12:09.400 debt considering the fact that the FED is backstopping the 0:12:09.440 --> 0:12:12.080 market and that you think that there's over that there's 0:12:12.120 --> 0:12:15.040 too much pessimism baked into the into markets. Right now. 0:12:15.280 --> 0:12:18.040 I do. I think that there is too much pessimism 0:12:18.080 --> 0:12:23.040 baked into concerns about the economy. I think, uh my, 0:12:23.040 --> 0:12:26.480 my mantra recently has been bad news is good news 0:12:26.520 --> 0:12:29.360 for risky assets to the extent that it keeps central 0:12:29.360 --> 0:12:32.680 bankers on the sidelines. And that still holds true even today, 0:12:32.800 --> 0:12:34.960 even given how much stimulus and how long there are 0:12:35.000 --> 0:12:38.600 already has been zero rates. It holds true today. Uh 0:12:38.640 --> 0:12:41.360 And and I think, um, you know, when when you 0:12:41.400 --> 0:12:44.360 think of what usually would drive our recession or or 0:12:44.400 --> 0:12:46.800 an unwind, and say that the credit market, it will 0:12:46.800 --> 0:12:49.000 talk about high yield and things like that, it's usually 0:12:49.000 --> 0:12:52.680 the FED raining on everybody's parade, right tightening policy, And 0:12:52.679 --> 0:12:55.040 they're far from I mean, it depends on you know, 0:12:55.080 --> 0:12:57.680 how you perceive that, but I would say they are 0:12:57.840 --> 0:13:02.520 certainly not tight. And so I think that based on 0:13:02.559 --> 0:13:04.680 the way the FED is kind of approaching things, this 0:13:05.000 --> 0:13:08.400 new regime in central bank monetary policy, you know, being 0:13:08.440 --> 0:13:11.839 so close to the zero zero lower bound, the surprise 0:13:12.000 --> 0:13:18.000 might be that the expansion lasts longer than people people 0:13:18.000 --> 0:13:21.199 really think it. I think it can so just between 0:13:21.240 --> 0:13:23.600 investment grade and hi yield just right now, How how 0:13:23.600 --> 0:13:27.120 are you allocated. So I'm pretty sanguine on on high yield. 0:13:27.160 --> 0:13:30.920 You know what, fundamentally what drives hi yield risk premiums 0:13:31.000 --> 0:13:33.959 is default risk through the cycle, and as far as 0:13:34.000 --> 0:13:36.760 we can look at look out into the future, over 0:13:36.800 --> 0:13:38.560 the next twelve months or so, the faults are going 0:13:38.600 --> 0:13:41.600 to stay low and spread. You know, it's surprisingly like 0:13:41.640 --> 0:13:44.680 even though spreads seemed tight, they're right on the screws 0:13:44.720 --> 0:13:46.920 for where they should be in terms of the premium 0:13:46.960 --> 0:13:50.880 that you should earn. Matt Igan, we continue to listen 0:13:51.040 --> 0:13:53.160 to your conversation. We're excited to continue to listen to 0:13:53.200 --> 0:13:56.880 your conversation on real yield The Bloomber Television Show today 0:13:57.160 --> 0:14:01.280 at twelve thirty Eastern time. Eader Today Matt Egan, portfolio 0:14:01.320 --> 0:14:05.240 manager and cohead of Loomis Sales Full Discretion Team. Really 0:14:05.360 --> 0:14:08.080 interesting to get some perspective. Perhaps there is too much 0:14:08.080 --> 0:14:10.880 pessimism baked into markets at a time when there really 0:14:10.960 --> 0:14:14.040 isn't an evidence that we're super close to a recession 0:14:14.280 --> 0:14:33.560 or an uptick in uh in default. The pain just 0:14:33.760 --> 0:14:39.360 continues in Germany's manufacturing sector. Really disappointing data today which 0:14:39.360 --> 0:14:42.840 is sending bond yields lower across the world German bond 0:14:42.920 --> 0:14:46.880 yields UH ensuring in ten years yields now negative for 0:14:46.880 --> 0:14:49.240 the first time since two thousands sixteen. Joining us out 0:14:49.280 --> 0:14:52.920 to discuss h is Marcus Ashworth, Bloomberg opinion columnist covering 0:14:53.080 --> 0:14:56.480 the European markets, joining us from our London studios. So Marcus, 0:14:56.840 --> 0:14:59.600 just give us a sense of why this particular data 0:15:00.120 --> 0:15:04.240 point was so important from markets. Well, in some senses, 0:15:04.280 --> 0:15:08.400 I'm not sure it's quite as interesting as perhaps people 0:15:08.480 --> 0:15:10.840 think it is, because this is a continuation of a 0:15:10.880 --> 0:15:16.120 trend when a trend was expected to reverse. In a sense, 0:15:16.160 --> 0:15:19.040 it's surprising because people thought we'd seen the bottom or 0:15:19.280 --> 0:15:22.080 close to the bottom. The signs out of China, signs 0:15:22.080 --> 0:15:26.280 out of other other aspects, indeed services and wages, which 0:15:26.440 --> 0:15:30.080 suggest the German economy is doing pretty well. Um, and 0:15:30.120 --> 0:15:33.200 that the whole bad news from last year of the 0:15:33.320 --> 0:15:37.080 diesel emissions, the rhine level being too low, and again 0:15:37.080 --> 0:15:40.800 indeed China had sort of played out. So it is disappointing. 0:15:41.240 --> 0:15:43.200 But then sentiment, sentiment, and this is then the day. 0:15:43.240 --> 0:15:45.240 This is what it is. It's a person managers survey, 0:15:45.320 --> 0:15:48.880 it's an expectation. Uh. But slightly more concerning is that 0:15:48.880 --> 0:15:53.280 that that France has reversed, but services aren't doing too badly, 0:15:53.880 --> 0:15:56.320 which is the largest share of the economy. So I 0:15:56.360 --> 0:15:59.200 think what everyone's realized that everyone was hoping and banking 0:15:59.200 --> 0:16:00.600 on this, and we've had a of us spit the 0:16:00.680 --> 0:16:04.480 dummy moment where everyone's gone, bunt yields won't go below zero, 0:16:04.520 --> 0:16:07.960 will they, and everyone's sort of reverse. We've also got 0:16:07.960 --> 0:16:10.760 this China Italy talks going on at the moment that's 0:16:10.800 --> 0:16:14.400 causing a few bits of nervousness. And much more importantly 0:16:14.400 --> 0:16:16.720 actually is looked to the States, look to the US. 0:16:16.960 --> 0:16:19.520 The U s yields are dropping and therefore there's less 0:16:19.600 --> 0:16:23.240 excuse to defend even indeed people were that level of 0:16:23.440 --> 0:16:27.040 positive tenure bunt yields. So the combination all this, I 0:16:27.040 --> 0:16:29.400 wouldn't read too much into that one particle number is 0:16:29.400 --> 0:16:32.080 what I'm saying. I think the US move is probably 0:16:32.160 --> 0:16:35.360 here actually more important. So Marcos, you mentioned France, just 0:16:35.360 --> 0:16:37.240 give us an update what's going on there, because it 0:16:37.320 --> 0:16:40.600 is not just Germany. No, um, well, France has had 0:16:40.920 --> 0:16:46.000 this is La jone, there's yellow vests, h problems, should 0:16:46.000 --> 0:16:48.280 we say, which is morph into more of a problem. 0:16:48.360 --> 0:16:50.880 It's become it's got out of hand. It's turning into 0:16:50.920 --> 0:16:53.840 much more of a left wing than allegedly initially right 0:16:53.840 --> 0:16:57.080 wing movement. But the point is that it's not going away, 0:16:57.200 --> 0:17:01.600 and we have ongoing every weekend. We have real problems 0:17:01.640 --> 0:17:05.320 here and it's really hitting confidence in France and clearly 0:17:05.720 --> 0:17:09.320 also France, which is far less dependent on China. Per se. 0:17:09.320 --> 0:17:12.119 It's based implicity say that Germany's dependent on China, but 0:17:12.240 --> 0:17:16.080 certainly they're less dependent and they are, you know, looking 0:17:16.080 --> 0:17:18.159 at different errors and therefore we're showing this is the 0:17:18.280 --> 0:17:23.639 global manufacturing slowdown is not backing away. Both France and 0:17:23.680 --> 0:17:27.720 Germany are very alliance on orders for their manufacturing across 0:17:27.760 --> 0:17:31.439 the world. And it's a sign that growth everywhere is 0:17:31.480 --> 0:17:34.640 dipping and that that has to surprised people because people 0:17:34.680 --> 0:17:37.320 had expected a bit of a bounce this month and 0:17:37.400 --> 0:17:39.320 doesn't look like we're getting it just yet. Anyway, what 0:17:39.359 --> 0:17:41.720 does this mean for the ECBAT Can they raise rates ever? Again? 0:17:44.359 --> 0:17:46.160 If you speak to anyone how you say, I mean, 0:17:46.440 --> 0:17:48.080 I used to help you, and you know I always 0:17:48.160 --> 0:17:49.520 used to say to you that that the easy people 0:17:49.480 --> 0:17:52.720 will never raise rates in my lifetime, and certainly I'm 0:17:52.720 --> 0:17:55.400 talking about my children's are posting my grandchildren's life done now, 0:17:55.800 --> 0:17:58.199 so you know, no, of course they can't. And the 0:17:58.240 --> 0:18:01.040 thing is they try bless them to up constantly leasing 0:18:01.560 --> 0:18:04.320 with all the right reasons, just a year too late. 0:18:04.440 --> 0:18:06.600 They've done it in twenty seventeen. Everyone has sort of 0:18:06.880 --> 0:18:10.040 backed it, but they waited because everything has to pan out. 0:18:10.080 --> 0:18:13.600 By the time they waited, the cycler turned and they're 0:18:13.600 --> 0:18:15.680 looking rather foolish at the moment. The point is that 0:18:15.880 --> 0:18:19.600 they also try to preempt by getting some extra cheap 0:18:19.359 --> 0:18:22.919 super bank funding. But then the media music that that 0:18:22.960 --> 0:18:25.040 the rates going to raise as much as forty maybe 0:18:25.080 --> 0:18:29.399 even fifty basis points for banks funding themselves previously, and 0:18:29.400 --> 0:18:31.200 they had the reverse effects. So they try to be 0:18:31.280 --> 0:18:33.879 dovish and end up being having the reverse effects. So 0:18:33.920 --> 0:18:37.000 they are stump. But look, the reason why we're still 0:18:37.000 --> 0:18:39.760 debating this is because the ECB is not the problem. 0:18:39.840 --> 0:18:43.400 It's a lack of fiscal response in Europe. The monitor 0:18:43.400 --> 0:18:47.159 response is played out. They try to tighten or stop 0:18:47.200 --> 0:18:49.280 being so dovish is the correct way of putting it, 0:18:49.800 --> 0:18:52.440 and still they have to keep on pumping money in 0:18:52.440 --> 0:18:54.639 the banks, pumping money. Ever, you know, they haven't got 0:18:54.720 --> 0:18:56.600 rid of their problems. They didn't do tarp or tell 0:18:56.680 --> 0:19:00.200 for whole after different things, and they're left as bad 0:19:00.200 --> 0:19:02.800 as they were five years ago. So Marcus, let's just 0:19:02.880 --> 0:19:04.920 stay in Germany for a moment, real quickly. What's the 0:19:04.960 --> 0:19:07.120 latest on Deutsche Bank. I know they're out some news 0:19:07.119 --> 0:19:09.600 saying hey, we're going to start growing again, But really 0:19:09.640 --> 0:19:11.720 I think what's going on there? And is it the 0:19:11.720 --> 0:19:15.199 commerce deal almost a fitter complete? Well, you know it is, 0:19:15.320 --> 0:19:17.639 and well and this is this is what funny is 0:19:17.640 --> 0:19:20.919 not the right right word here because it's very unfunny. 0:19:20.960 --> 0:19:24.280 But you know, Ireland essentially got bankrupted by the sense 0:19:24.280 --> 0:19:28.240 that they had to collapse their banks, Greece likewise, Cyprus likewise, 0:19:28.320 --> 0:19:31.560 Italy clearly ongoing. And yet it seems Germany, when it 0:19:31.600 --> 0:19:34.040 comes to Germany, they can they can beat out their 0:19:34.040 --> 0:19:37.240 own two banks. These are two drunks being lashed together 0:19:37.480 --> 0:19:39.800 to try and stay standing. And and and it's not 0:19:39.880 --> 0:19:42.080 a good not a good look. And I think that 0:19:42.080 --> 0:19:44.399 the you know, Deutsche Bank has got a whole world 0:19:44.400 --> 0:19:48.200 of level three as an unmarked remarkable assets and a 0:19:48.440 --> 0:19:50.320 vaster of the book which is beyond the size of 0:19:50.320 --> 0:19:54.160 all comprehension comments Bank has got huge positions in Italian bonds, 0:19:54.800 --> 0:19:58.400 and both of them have got a over competitive banking 0:19:58.440 --> 0:20:01.439 market domestic too many branch is too much toff, not 0:20:01.560 --> 0:20:04.600 enough capital, no chance of making And the keyword here 0:20:04.760 --> 0:20:08.920 is profit ever on their business models and lumping together. Yes, 0:20:08.960 --> 0:20:10.720 to keep going for a bit longer, but it doesn't 0:20:10.760 --> 0:20:15.639 solve anyone's problems. Wow, that is a stark review of 0:20:15.800 --> 0:20:18.200 German banking. But you know, I think it's probably pretty 0:20:18.200 --> 0:20:20.200 spot on because I think not and shared by many 0:20:20.240 --> 0:20:22.159 people and shared by many people. It's you know, you 0:20:22.160 --> 0:20:24.040 put two bad banks together, what do you have? Maybe 0:20:24.119 --> 0:20:40.679 you know one bigger bad bank. Well, there was a 0:20:40.800 --> 0:20:44.280 conference earlier this week in Boston, Massachusetts. Not an investor 0:20:44.320 --> 0:20:49.080 conference per se, but a conference entitled Inside Quantum Technologies. 0:20:49.119 --> 0:20:51.320 This is the first conference dedicated to the business of 0:20:51.400 --> 0:20:56.480 quantum computing, quantum cryptography, and quantum sensors. To get a 0:20:56.480 --> 0:20:58.800 sense of all that quantum stuff, and all that stuff means. 0:20:59.000 --> 0:21:02.040 Let's welcome our guess, Alan Meckler. Allen is a managing 0:21:02.080 --> 0:21:05.080 partner of assam Off Ventures. He joins us in our 0:21:05.080 --> 0:21:08.160 bloom Brick Interactive Brooker Studio. Alan, thank you so much. 0:21:08.600 --> 0:21:13.240 Can you just define briefly what quantum technology is for 0:21:13.240 --> 0:21:17.359 for me at least, and I think our audience that 0:21:17.600 --> 0:21:20.719 that's actually quite hard to do. In a few words, 0:21:21.080 --> 0:21:24.040 I first saw, I'm not a scientist or a technologist. 0:21:24.080 --> 0:21:28.280 I've just been good at spotting trends and doing shows 0:21:28.280 --> 0:21:31.520 on them. But essentially, if you a lot of people, 0:21:31.560 --> 0:21:34.320 I'm sure only and listening, I've heard of super computing, 0:21:34.760 --> 0:21:39.480 and this would uh, quantum computing would make super computing 0:21:39.480 --> 0:21:42.280 look like stone age in terms of the speed and 0:21:42.320 --> 0:21:45.320 the rapidity of and and and the and the depth 0:21:45.440 --> 0:21:49.600 of of what it can solve and um. It has 0:21:49.720 --> 0:21:55.439 huge ramifications for all kinds of security, cybersecurity, uh, and 0:21:55.560 --> 0:21:58.320 the threat to being able if and getting into the 0:21:58.320 --> 0:22:00.359 wrong hands, being able to open up bank counts, and 0:22:00.400 --> 0:22:02.280 all kinds of things. All Right, so let's talk about 0:22:02.280 --> 0:22:05.840 some of the practical applications of this incredibly abstract concept, 0:22:06.160 --> 0:22:10.160 because there are incredibly practical applications, from three D printing 0:22:10.200 --> 0:22:12.720 to some of the pharmaceutical advancements. I want to talk 0:22:12.720 --> 0:22:15.600 about three D printing in particular, because a lot of 0:22:15.600 --> 0:22:18.119 people were expecting that everyone would have a three D 0:22:18.200 --> 0:22:20.679 printer in their home, they would print their chocolate bars, 0:22:20.720 --> 0:22:23.520 they would print their chairs, they would print their you 0:22:23.520 --> 0:22:27.520 know tables. How much has three D printing actually gained 0:22:27.520 --> 0:22:32.840 traction and wear? Three D printing most is most significant 0:22:32.960 --> 0:22:37.000 in uh AN actual manufacturing. There was a theory and 0:22:37.600 --> 0:22:39.719 a lot of companies went out of business that there 0:22:39.760 --> 0:22:42.399 would be three D printer in every home, maybe up 0:22:42.440 --> 0:22:46.000 through two thousand, fifteen or sixteen. But the real benefit 0:22:46.080 --> 0:22:48.359 of it is and and and the real power and 0:22:48.359 --> 0:22:51.080 and where the money is being made is very expensive 0:22:51.119 --> 0:22:54.360 three D printers several hundred thousand to a million dollars 0:22:54.359 --> 0:22:58.159 that print in medals, and and and and other materials, 0:22:58.160 --> 0:23:02.080 but are revolutionizing the way certain types of manufacturing are 0:23:02.119 --> 0:23:05.879 taking place. For example, probably within four or five years, 0:23:05.920 --> 0:23:08.920 fifty percent of every jet engine will be three D printed. 0:23:09.200 --> 0:23:10.840 There are a lot of reasons what we could go 0:23:10.880 --> 0:23:14.240 into why that is. But you can make it more efficiently, 0:23:14.320 --> 0:23:16.840 you can make it lighter, you can make it faster 0:23:17.200 --> 0:23:21.960 and less expensively than traditional manufacturing ways. So we talked 0:23:21.960 --> 0:23:25.600 about some of the practical applications of quantum computing and technologies. 0:23:25.720 --> 0:23:27.159