WEBVTT - Surveillance: Debt Ceiling with Dimon 0:00:05.120 --> 0:00:07.119 This is the Bloomberg Surveillance Podcast. 0:00:07.160 --> 0:00:11.000 I'm Tom Keen, along with Jonathan Farrow and Lisa Abramowitz. 0:00:11.280 --> 0:00:15.760 Join us each day for insight from the best and economics, geopolitics, 0:00:15.760 --> 0:00:20.720 finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, 0:00:20.960 --> 0:00:25.400 Spotify and anywhere you get your podcasts, and always on 0:00:25.520 --> 0:00:29.840 Bloomberg dot Com, the Bloomberg Terminal and the Bloomberg Business App. 0:00:30.120 --> 0:00:35.159 Lisa Bramwitz and Tom Keen right now, and what we'd like. 0:00:35.159 --> 0:00:37.920 To do is go to Paris. And it is a 0:00:38.000 --> 0:00:38.479 Paris of. 0:00:38.560 --> 0:00:42.319 JP Morgan that is important in World War One. They 0:00:42.320 --> 0:00:44.920 I'm going to get the pronunciation wrong in Francine. Lacua 0:00:45.040 --> 0:00:48.919 is gonna correct me. It is Catore's plus vendome and 0:00:49.000 --> 0:00:52.479 it was the commitment of the JP Morgan bank to 0:00:52.600 --> 0:00:55.400 France in the heat of World War One. She is 0:00:55.520 --> 0:00:59.600 joined in Paris with James Steman, Our Francy and Laclosx. 0:00:59.640 --> 0:01:00.840 How is like pronunciation? 0:01:01.000 --> 0:01:04.880 Fancye Tom full marks for French pronunciation. You're almost French. 0:01:05.000 --> 0:01:07.160 I'm so excited for you. I am delighted to be 0:01:07.280 --> 0:01:11.600 joined by Jamie Diamond. JP Morgan Chairman and Chief executive officer, 0:01:11.720 --> 0:01:14.800 Thank you for joining us. As always, debt ceiling or 0:01:14.880 --> 0:01:16.720 banking turmoil? What are you most. 0:01:16.480 --> 0:01:17.679 Worried about you'd be here? 0:01:19.880 --> 0:01:22.960 Well, I think the debt steeling is potentially catastrophic. Yeah, 0:01:23.000 --> 0:01:25.800 so that's a whole different issue. Hopefully won't happen. You know, 0:01:25.840 --> 0:01:28.160 the banking crisis I still believe will kind of sort 0:01:28.200 --> 0:01:31.240 its way through, and it's not anything like eight or 0:01:31.520 --> 0:01:34.560 nine owing a couple of people off size, with all 0:01:34.600 --> 0:01:37.320 these various things which you knew about. So hopefully you 0:01:37.360 --> 0:01:38.720 know it's getting near the tail end of that. 0:01:39.000 --> 0:01:40.880 But if you're Janet Yellen right now, what would you 0:01:40.920 --> 0:01:41.480 do differently? 0:01:42.520 --> 0:01:44.480 I don't know. I think we need to finish the 0:01:44.480 --> 0:01:47.080 bank crisis. I think we've been we've had an uncertain 0:01:47.120 --> 0:01:50.040 policy on mergers. This first horizon deal. I think we 0:01:50.080 --> 0:01:52.040 have to assume they'll be a little bit more so, 0:01:52.120 --> 0:01:54.920 you know, whatever the FDI C, the occ the Fellow Reserve, 0:01:55.320 --> 0:01:59.080 you know, whatever they need to do to make it better, 0:01:59.120 --> 0:02:02.280 they should do be thoughtful, be very forward looking. You'll 0:02:02.320 --> 0:02:04.880 not be surprised constantly because some of these things have 0:02:04.880 --> 0:02:07.240 been known about for quite a while. And so we've 0:02:07.240 --> 0:02:10.960 handled three SVB signature first Republic and. 0:02:11.720 --> 0:02:15.519 So yes, asking, but I think it's very important. 0:02:15.560 --> 0:02:17.959 The regional banks who I've been speaking to like every 0:02:18.040 --> 0:02:20.560 day for the last week, they're quite strong. You know, 0:02:20.600 --> 0:02:22.640 they're quite worried because of the you know, run and 0:02:22.680 --> 0:02:25.800 deposited all that, but their financial results are good. The 0:02:25.919 --> 0:02:28.920 financial results are gonna be good, okay next quarter. You know, 0:02:29.040 --> 0:02:32.320 they're earning money. They get a very good clientele, very diversified. 0:02:32.919 --> 0:02:35.120 Uh uh, and they're they're quite strong. 0:02:35.160 --> 0:02:37.400 So Jenny for like a comprehensive solution. So if you're 0:02:37.440 --> 0:02:39.520 asking Jennet Young to get the job done, what does 0:02:39.560 --> 0:02:40.519 that look like that solution? 0:02:40.760 --> 0:02:41.880 Ask for compreend solution. 0:02:42.680 --> 0:02:45.760 Why not just be prepared for problems? There's no, we 0:02:45.760 --> 0:02:46.880 don't need a comprehend solution. 0:02:47.680 --> 0:02:50.920 What do we need right now? Do we regulators to 0:02:50.960 --> 0:02:52.680 look at short sellers of banks? 0:02:53.080 --> 0:02:55.640 Yes, you know, like, look, my folks are telling me 0:02:55.680 --> 0:02:58.240 that that's not the problem. The short selling ban if 0:02:58.240 --> 0:03:01.320 you actually analyze stocks and short doesn't seem that big 0:03:01.360 --> 0:03:05.000 a deal. I think they may partially wrong because, as 0:03:05.040 --> 0:03:07.400 you know, some people are unscrupulous and they use other 0:03:07.480 --> 0:03:08.520 means to go short. 0:03:08.919 --> 0:03:10.880 I think that if you look at the detail. 0:03:11.240 --> 0:03:15.120 The SEC has the enforcement capability to look at what 0:03:15.160 --> 0:03:19.680 people are doing by name, in options, derivatives, short sales, 0:03:20.040 --> 0:03:22.200 and they should go if someone's doing anything wrong, people 0:03:22.200 --> 0:03:24.760 are in collusion, or people going short and then making 0:03:24.760 --> 0:03:27.400 a tweet about a bank, they should go after them 0:03:27.600 --> 0:03:29.720 and vigorously, and they should be punished to the full 0:03:29.720 --> 0:03:32.200 extental law allows it. So I think it's possible to 0:03:32.240 --> 0:03:34.520 taking place. We have no evidence of it, but you know, 0:03:34.560 --> 0:03:37.440 my experience in life has been don't assume too much. 0:03:37.640 --> 0:03:39.200 Do you think that they're looking into it? 0:03:39.520 --> 0:03:41.040 I hope so. I don't know. 0:03:42.040 --> 0:03:44.480 When you look at some of the position of JP Morgan, 0:03:44.520 --> 0:03:46.840 of course you didn't really buy any long dated bonds, 0:03:46.920 --> 0:03:48.760 and at the time a lot of people said, look 0:03:48.760 --> 0:03:52.360 stop boarding cash. Do you think regulators and investors had 0:03:52.480 --> 0:03:55.280 pushed some of these banks to take unwarranted risk. 0:03:56.080 --> 0:03:59.280 Yes, I do, but let's be clear the people to blame, 0:03:59.400 --> 0:04:02.400 or the banks and the bank boards and things like that. 0:04:03.040 --> 0:04:05.320 Having said that, I think there would be the humility 0:04:05.320 --> 0:04:09.320 on the part of regulators. That the Federal Reserve itself 0:04:09.440 --> 0:04:13.600 never forecasts going up. Not one Fed governor forecast it. 0:04:13.920 --> 0:04:15.920 And whether you forecast it or not, you should be 0:04:15.920 --> 0:04:18.840 stress testing people for it. Their stress tests always had 0:04:18.880 --> 0:04:22.120 low rates. We always knew about uninsured deposits, and there 0:04:22.120 --> 0:04:25.360 were huge incentives that banks to put securities in health 0:04:25.360 --> 0:04:30.359 and maturity, lower capital requirements, huge incentives own treasuries, lower 0:04:30.400 --> 0:04:33.679 capital requirements, and they counted for liquidity. And I'm hoping 0:04:33.800 --> 0:04:35.720 all that gets looked at, and they should look at 0:04:35.720 --> 0:04:37.200 and say, oh, okay, we're a little bit part of 0:04:37.200 --> 0:04:39.720 the problem as opposed to just pointing fingers. 0:04:39.920 --> 0:04:42.000 So this is what not a regulation problem, it's a 0:04:42.000 --> 0:04:43.159 supervision problem. 0:04:43.520 --> 0:04:43.960 Yeah, it's a. 0:04:43.960 --> 0:04:47.480 Little bit of both. They become very related. I mean, 0:04:47.560 --> 0:04:51.600 supervisors look at are you doing the right thing by 0:04:51.640 --> 0:04:54.200 regulations and so, and like even the stress tests, I've 0:04:54.200 --> 0:04:56.599 always thought that you know, when you have one stress 0:04:56.640 --> 0:04:59.640 test and you have a company completely focused on that 0:04:59.680 --> 0:05:01.960 for three months, you know, does it lull people have a 0:05:02.040 --> 0:05:04.520 false sense of security that all these other things aren't 0:05:04.520 --> 0:05:07.520 gonna happen. And all these other things in history always happen, 0:05:07.880 --> 0:05:09.040 and so you know, I think it was a little 0:05:09.040 --> 0:05:11.400 bit of a mistake that one stress test. I'm not 0:05:11.400 --> 0:05:13.840 asking to do many at this level of detail, but 0:05:14.080 --> 0:05:16.400 you know, our stress test is two hundred thousand pages long. 0:05:16.839 --> 0:05:19.359 Do you think that last one hundred thousand pages added value? 0:05:19.480 --> 0:05:20.440 And my view is it did not. 0:05:21.240 --> 0:05:23.240 Do you think? But things will change because of this 0:05:23.320 --> 0:05:24.200 is just like a catalyst. 0:05:24.240 --> 0:05:25.479 We's gonna get worse for banks. 0:05:26.120 --> 0:05:29.240 I think that people they're just more regulations and more 0:05:29.320 --> 0:05:32.360 rules and more requirements. I hope they do it very 0:05:32.360 --> 0:05:35.480 thoughtfully because you know, if you we love the community banks, 0:05:35.520 --> 0:05:38.320 the regional banks, we're the biggest banks of those folks. 0:05:38.560 --> 0:05:41.800 But you know, if you overdo certain rules, requirements, regulations. 0:05:42.000 --> 0:05:43.720 You know, some of these community banks tell me to have, 0:05:43.920 --> 0:05:46.800 you know, more compliance people than loan officers, you know, 0:05:46.920 --> 0:05:48.600 and so at one point you make it harder for 0:05:48.640 --> 0:05:51.000 them to do business. There are already hundreds of rules 0:05:51.000 --> 0:05:53.279 in place in a lot of ways, it's the mix 0:05:53.320 --> 0:05:55.200 of the rules. If you're gonna change the liquidity and 0:05:55.240 --> 0:05:57.560 maybe not capital. If're gonna change capital and maybe not liquidity. 0:05:57.760 --> 0:05:59.520 If you're gonna add t LAC, then maybe you should 0:05:59.560 --> 0:06:01.400 do something with deposit insurance. 0:06:01.600 --> 0:06:02.000 They should. 0:06:02.080 --> 0:06:04.440 They should sit down and have a very thoughtful conversation 0:06:04.480 --> 0:06:06.880 about what those things are and what we want the 0:06:06.920 --> 0:06:09.200 outcome to be. If you look at the present outcome, 0:06:09.440 --> 0:06:11.640 a lot of things are leaving banks and they should 0:06:12.000 --> 0:06:13.680 you know, I'm not And if that's what they want, 0:06:13.720 --> 0:06:15.680 so be it. But that should be done with the forethought. 0:06:15.920 --> 0:06:18.320 That should not be done because you just putting rules 0:06:18.320 --> 0:06:20.920 and regulations in place and you don't know the consequences. 0:06:21.040 --> 0:06:22.560 The mortgage business, for example, is. 0:06:22.760 --> 0:06:25.320 You know, largely not largely, eighty percent out of banks today, 0:06:25.560 --> 0:06:27.599 and just be careful about what you what you wish for. 0:06:28.080 --> 0:06:30.920 So you bought First Republic, you've had I imagine how 0:06:31.000 --> 0:06:32.720 a good look at what's inside? It's what did you 0:06:32.760 --> 0:06:33.520 find out? 0:06:33.960 --> 0:06:35.640 Yeah, no, we had to go look before we bought it. 0:06:35.960 --> 0:06:38.440 Okay, that's reassuring. But anything that you shigned. 0:06:38.240 --> 0:06:40.240 Up to eight hundred people working around the clock for 0:06:40.279 --> 0:06:42.799 a long time to look at something like that. 0:06:42.839 --> 0:06:45.160 And and in reality, look, they did some things. 0:06:44.960 --> 0:06:47.279 Really well, like if you talk to their customers, I've 0:06:47.279 --> 0:06:51.040 getten calls and emails and great great culture, great customers 0:06:51.040 --> 0:06:54.039 and things like that. Their credit is kind of pristine. 0:06:54.520 --> 0:06:56.480 You know, that's good. So of course we marked all 0:06:56.520 --> 0:06:58.120 the market and roll in very good shape. And we've 0:06:58.120 --> 0:07:01.640 had all the in trade exposure together. We've got thousands 0:07:01.640 --> 0:07:03.960 of people now going out learning about what. 0:07:03.960 --> 0:07:04.479 Their best is. 0:07:04.560 --> 0:07:06.080 We want the best of both about the kind of 0:07:06.080 --> 0:07:08.720 company that comes in our highway, our way or the highway, 0:07:09.040 --> 0:07:11.760 and so there's no surprise there. You know, it's if 0:07:11.920 --> 0:07:14.240 it had to make sense for shareholders. But you know, 0:07:14.320 --> 0:07:17.080 this notion, this notion that it was unbelieva in it 0:07:17.120 --> 0:07:19.160 was a nice thing for shows that's why I have 0:07:19.240 --> 0:07:21.480 to do that. But we also really did it to 0:07:21.840 --> 0:07:23.960 assimilate the bank in a way that's very safe for 0:07:24.000 --> 0:07:28.440 the system and didn't cost uninsured deposits, didn't cost the ft, 0:07:28.640 --> 0:07:30.960 it costs the FDA C as little as possible. But 0:07:31.000 --> 0:07:32.680 I also want to point out I'd be fine if 0:07:32.720 --> 0:07:33.960 they want to change the rules a little bit to 0:07:33.960 --> 0:07:36.400 make it easier for a regional bank to buy a 0:07:36.440 --> 0:07:38.480 big bank. And the other thing about big banks, which 0:07:38.560 --> 0:07:41.120 again is I know, I know, but the thing about 0:07:41.120 --> 0:07:43.240 big banks, we need healthy big banks. We are the 0:07:43.320 --> 0:07:45.840 best banking system in the world, you know, and you 0:07:45.920 --> 0:07:48.760 want that very big, yeah, but we're not. Banks are 0:07:48.760 --> 0:07:51.560 becoming smaller or smaller as a part of the global system. 0:07:51.840 --> 0:07:53.840 So when they look at banks, they say, oh, it's big, 0:07:54.280 --> 0:07:56.440 But when you look at the banking system to the system, 0:07:56.800 --> 0:07:59.640 mortgage have left, a lot of private credits left, certain 0:07:59.680 --> 0:08:02.040 trading functional left, A lot of things are gonna leave. 0:08:02.320 --> 0:08:04.520 You have Apple, you have the neo banks. You have 0:08:05.160 --> 0:08:06.680 you better be a little more thoughtful about when you 0:08:06.720 --> 0:08:09.240 say we, you mean banking per se and so. 0:08:09.920 --> 0:08:13.280 But the US, the Americans, should not fear too much 0:08:13.320 --> 0:08:15.520 finance consolidation in your hands. 0:08:15.880 --> 0:08:18.400 No, because you know, most of our size accrues to 0:08:18.440 --> 0:08:21.000 our clients. So if you look at you know we 0:08:21.040 --> 0:08:23.920 do most large small banks can't do. We do like 0:08:24.240 --> 0:08:26.920 banking large corporations of fifty countries around the world to 0:08:26.920 --> 0:08:29.600 move ten trillion dollars a day. You know, it's hard. 0:08:29.680 --> 0:08:31.840 So these are these are big, complex things. We're not 0:08:31.880 --> 0:08:34.080 big and complex. We want to be for big and 0:08:34.080 --> 0:08:36.720 complex because the Pee we serve a bigger comp We 0:08:36.800 --> 0:08:40.720 bank countries, the World Bank. You know, we do a 0:08:40.720 --> 0:08:43.040 lot of things. And yes, we also bank consumers in the 0:08:43.080 --> 0:08:45.600 United States. So but I want the community banks to thrive. 0:08:45.840 --> 0:08:47.440 I mean, like I said, we want to do everything 0:08:47.520 --> 0:08:49.920 can help them. We didn't want this to happen. We 0:08:49.960 --> 0:08:52.839 didn't cause to happen. The second happened, we knew it 0:08:52.920 --> 0:08:53.880 was bad for old banks. 0:08:54.360 --> 0:08:55.360 Are you too big to fail. 0:08:57.360 --> 0:08:59.440 I don't know what that word means anymore. I mean, 0:08:59.480 --> 0:09:01.600 we're not gonna fail, and I don't know if that means. 0:09:01.720 --> 0:09:03.640 But we certainly didn't mean it to be an advantage. 0:09:03.679 --> 0:09:06.760 Like so, you know, we've asked all our people when 0:09:06.800 --> 0:09:10.600 this crisis happened, I don't want anyone listing any client 0:09:10.880 --> 0:09:13.320 or any bank or from any of the any bank's, 0:09:13.760 --> 0:09:15.480 regional bank or community bank, et cetera. 0:09:15.600 --> 0:09:18.360 So is there anything else that you'd that you'd be buying. 0:09:18.400 --> 0:09:19.920 I mean some of the smaller banks fault, you know, 0:09:20.040 --> 0:09:20.840 fun that's it. 0:09:21.160 --> 0:09:23.120 No, I mean, we're gonna have a lot of blowback 0:09:23.160 --> 0:09:25.040 and having bought this one, but it was the right 0:09:25.040 --> 0:09:26.080 thing to do, you know. 0:09:26.160 --> 0:09:27.320 But we'll get the blowback. 0:09:27.360 --> 0:09:29.960 But again, my job is this people at this thing 0:09:29.960 --> 0:09:32.240 they always look at like the financial deal. Forget the 0:09:32.240 --> 0:09:36.439 financial deal. Eight hundred people working around the clock. Ten 0:09:36.559 --> 0:09:42.280 thousand people deployed now to consolidate systems, risk fraud, credit payments, branches, 0:09:42.320 --> 0:09:45.720 real estate vendors, technology. It's a lot of work, you know, 0:09:45.800 --> 0:09:47.880 and it just tracks us from those other things. And so, 0:09:48.600 --> 0:09:50.240 you know, like I said, we did it. It was 0:09:50.400 --> 0:09:53.360 marginally benefits for shareholders. It was good for the system. 0:09:53.440 --> 0:09:55.840 But and you know we got now we have to 0:09:55.840 --> 0:09:57.280 be prepared for the other side of that mountain. 0:09:57.400 --> 0:09:59.680 How worried are you about the dead ceiling? So Donald Trump, 0:09:59.720 --> 0:10:02.520 Yester the town Halicynna did not seem too worried, and 0:10:02.559 --> 0:10:04.560 to actually told Republicans to stick to their guns. 0:10:04.559 --> 0:10:07.840 Well, it's one more thing he does know very much about. 0:10:09.760 --> 0:10:13.040 It may be put in two categories. One is actual default. 0:10:13.760 --> 0:10:17.000 That is potentially catastrophic. And you can go through a 0:10:17.000 --> 0:10:21.640 million ways, but everyone, anyone's anyone knows that's potentially catastrophic. 0:10:21.880 --> 0:10:24.239 And I don't think that's gonna happen because it gets catastropericy. 0:10:24.240 --> 0:10:26.400 And the closer you get to it, you will have panic. 0:10:26.720 --> 0:10:29.240 And so the closer you get you have markets get volatile. 0:10:29.320 --> 0:10:32.079 Maybe there's Doc mar go down the treasury. Markets will 0:10:32.080 --> 0:10:33.080 have their own problems. 0:10:33.200 --> 0:10:33.920 It's amazing. 0:10:33.960 --> 0:10:37.120 You already have certain T bills it's trading three percent 0:10:37.200 --> 0:10:38.560 and right next to them five percent. 0:10:38.960 --> 0:10:39.839 This is not good. 0:10:40.120 --> 0:10:43.080 And people just remember the American financial system is the 0:10:43.160 --> 0:10:46.560 foundation to the to the global economics system. And so 0:10:46.960 --> 0:10:49.599 and the closer we get more panic, we might get downgraded. 0:10:49.720 --> 0:10:51.640 The last time we were downgrade. We had like sixty 0:10:51.640 --> 0:10:54.560 five or seventy percent debt to GDP. Now it's one 0:10:54.640 --> 0:10:57.240 hundred and five. Now our deficits are two or three 0:10:57.280 --> 0:10:59.880 times that that we had back then. So you know, 0:11:00.080 --> 0:11:02.800 we better be very careful. And I wish we didn't 0:11:02.800 --> 0:11:05.640 get through at all. I'm respectful of both sides who 0:11:05.720 --> 0:11:07.559 you know, one side wants to use the makeup for 0:11:07.720 --> 0:11:09.760 we've got jam down their throats, you know. And I 0:11:10.040 --> 0:11:11.719 would love to get rid of the debt ceiling thing, 0:11:11.760 --> 0:11:13.719 but please negotiate a deal. 0:11:14.040 --> 0:11:15.280 Do you think that it'll be at the end of 0:11:15.320 --> 0:11:17.360 the day of the markets that will spur a deal 0:11:17.960 --> 0:11:19.400 that we have to get to the point where there's 0:11:19.480 --> 0:11:20.320 where there's panic. 0:11:20.559 --> 0:11:23.920 It's a really bad idea because panic becomes something that 0:11:24.040 --> 0:11:27.320 is not good and it could affect other markets around 0:11:27.320 --> 0:11:29.360 the world. But yes, at the end of the day, 0:11:29.400 --> 0:11:31.640 if it gets to that panic point, people have to react, 0:11:32.280 --> 0:11:35.199 and we've seen that before. Another thing about markets is 0:11:35.200 --> 0:11:37.960 always remember panic is the one thing that scares people 0:11:38.679 --> 0:11:42.400 like they take irrational decisions. I remember, even in eight 0:11:42.720 --> 0:11:46.280 people are selling certain securities at forty percent of what 0:11:46.320 --> 0:11:46.920 they would. 0:11:46.679 --> 0:11:49.040 Be worth if we had a great depression. 0:11:49.960 --> 0:11:52.320 But they were like, I want out, I want cash. 0:11:52.440 --> 0:11:55.320 I'm not betting my family's money on this and my 0:11:55.360 --> 0:11:58.360 company's money. People will panic, and again we got to 0:11:58.400 --> 0:12:01.079 be very careful about getting close situation that causes that. 0:12:01.320 --> 0:12:03.080 Do you get a call from Janet yelling about this? 0:12:03.160 --> 0:12:04.560 I'm not gonna talk about personal calls. 0:12:04.559 --> 0:12:07.240 I'm getting We've all spoken about that's youlling, I mean 0:12:07.280 --> 0:12:08.880 everyone's that's. 0:12:08.679 --> 0:12:12.120 Everyone's no for big banks, are you ready? Actually, how 0:12:12.120 --> 0:12:14.160 do you prepare for possible? 0:12:14.280 --> 0:12:17.400 Have a group of people who are very smart we're 0:12:17.440 --> 0:12:21.480 looking at again, it's very unfortunate, it's time consuming. Hopefully 0:12:21.559 --> 0:12:26.120 won't happen, but it affects contracts, collateral clearing houses, clients, 0:12:26.520 --> 0:12:29.280 and affect clients differently around the world. You have to 0:12:29.280 --> 0:12:31.480 then anticipate what people are going to do, which is 0:12:31.640 --> 0:12:34.880 very different than the legality of it. And you know, 0:12:34.960 --> 0:12:37.080 and the closer we get, the more those kind of 0:12:37.080 --> 0:12:39.000 that war room will start. Now it's taking place once 0:12:39.000 --> 0:12:42.080 a week, but my guess is sometimes. 0:12:42.120 --> 0:12:42.960 Call it May twenty. 0:12:43.000 --> 0:12:45.440 First it'll be every day, and then it'll be three 0:12:45.440 --> 0:12:48.720 times a day, and then it'll be much more conversations 0:12:48.760 --> 0:12:50.720 with clients. But what they need to do to help 0:12:50.840 --> 0:12:54.400 get them through it and things like that. It's very unfortunate. 0:12:54.679 --> 0:12:56.200 It should never happen this way. 0:12:56.559 --> 0:12:58.560 Fortress Diamond is always about the balance sheet. Should there 0:12:58.640 --> 0:13:02.240 be a special commission looking at debts in the US 0:13:02.480 --> 0:13:03.439 that you should run? 0:13:03.960 --> 0:13:04.160 Oh? 0:13:04.200 --> 0:13:06.360 God, no, why not? I don't want to. 0:13:08.080 --> 0:13:12.360 On China, they went after tech, they're looking out at finance. 0:13:12.600 --> 0:13:15.320 What kind of message does it tell companies that want 0:13:15.320 --> 0:13:16.240 to do business there. 0:13:16.800 --> 0:13:18.760 Well, I think we say they're looking at finance. It's 0:13:18.800 --> 0:13:19.480 been very limited. 0:13:19.480 --> 0:13:23.640 They've been very much more careful about touching the financial system. 0:13:23.880 --> 0:13:28.200 Who we're outsiders. But look, this is a serious subject 0:13:28.679 --> 0:13:31.520 and anything that relates to national security. I'm a patriot first, 0:13:31.559 --> 0:13:33.880 and I'm going to salute my government, So put that. 0:13:34.000 --> 0:13:36.840 But put that aside. What the government should do and 0:13:36.880 --> 0:13:38.800 it wants to do, and is now say they are 0:13:38.840 --> 0:13:41.360 going to do, is have conversations. They're gonna be tough, 0:13:41.720 --> 0:13:44.600 but they should be thoughtful. Certain things are really national security, 0:13:45.000 --> 0:13:48.080 certain things are not, you know, and we shouldn't confuse 0:13:48.120 --> 0:13:51.560 the two Americans. Shine of a lot of common interest climate, 0:13:51.960 --> 0:13:56.520 nuclear pliferation, anti terrorism, global stability, you know, and we 0:13:56.559 --> 0:13:59.520 have differences. You know, we're capitalists, they're not, you know, 0:13:59.600 --> 0:14:02.960 And it's okay, we could short that out, but we 0:14:03.040 --> 0:14:05.920 need to keep the Western alliances together, not just around 0:14:06.120 --> 0:14:11.200 war and Ukraine, but around strategic economic relationships, including trade, 0:14:11.640 --> 0:14:12.520 including trade. 0:14:12.559 --> 0:14:13.640 We can't take trade. 0:14:13.400 --> 0:14:15.920 Off the table every time we talk to Europe or 0:14:15.960 --> 0:14:17.679 Asian and stuff like that. So I would go back 0:14:17.679 --> 0:14:20.840 into TPP, I would surround the world. I'd want to 0:14:20.880 --> 0:14:24.240 keep the world safe for democracy, and I want to 0:14:24.320 --> 0:14:27.040 have open markets, particularly Europe. And I mean I was 0:14:27.080 --> 0:14:29.400 here last time is when we passed Iraq. A lot 0:14:29.400 --> 0:14:31.680 of great things that act, but there are things I 0:14:31.680 --> 0:14:34.160 don't like, like too much social engineering side of it, 0:14:34.480 --> 0:14:35.680 but also a pistol off all of. 0:14:35.600 --> 0:14:38.120 Our allies put on the China side. So if they 0:14:38.160 --> 0:14:40.480 if they start doing more noise on finance, does that 0:14:40.560 --> 0:14:41.520 hurt Chinese growth? 0:14:42.360 --> 0:14:47.600 Like probably, I think you've already seen it's not trade, 0:14:47.600 --> 0:14:50.680 but you've seen investment going both ways coming down. And 0:14:52.440 --> 0:14:54.200 that's okay in the short run and the long run, 0:14:54.280 --> 0:14:57.040 we should say what and the government's got to decide 0:14:57.200 --> 0:15:00.560 this is not gonna be business companies designed, should they? 0:15:00.640 --> 0:15:04.080 So when Congress criticizes business sometimes there may be truth 0:15:04.120 --> 0:15:07.120 to that. They have to decide what is okay, what's 0:15:07.160 --> 0:15:07.640 not okay? 0:15:07.640 --> 0:15:09.320 What do they want? What security? 0:15:09.480 --> 0:15:13.280 And that's around trade, that's around investment, that's around sharing ipay, I. 0:15:13.240 --> 0:15:14.840 Give you a million pounds or maybe you take it, 0:15:14.960 --> 0:15:16.920 you know, your own million pounds? Where'd you invest. 0:15:17.280 --> 0:15:23.160 Organ I wouldn't buy sovereign debt anywhere? Why, I think 0:15:23.200 --> 0:15:28.560 there's too much The amount of fiscal stimus took place 0:15:28.600 --> 0:15:31.200 and still surging through the system, the amount of QI. 0:15:31.480 --> 0:15:34.600 These were extraordinary numbers, and not just in the US, 0:15:34.640 --> 0:15:36.920 but in Europe and in other parts of the world. Now, 0:15:36.960 --> 0:15:40.480 when I say extraordinary, I mean extraordinary, And therefore I 0:15:40.480 --> 0:15:42.880 think there's a chance you have more inflation than people think. 0:15:43.200 --> 0:15:45.880 So while the FED controls short rates, they don't completely 0:15:45.880 --> 0:15:48.960 control longer rates, and then you could see longer rates 0:15:49.000 --> 0:15:52.600 ticking up because of higher inflation, and even if there's 0:15:52.600 --> 0:15:54.520 a mild recession, they continue to tick up. You know 0:15:54.520 --> 0:15:56.640 a lot of US experience that in the seventies and eighties, 0:15:57.000 --> 0:15:58.760 and I would be a little worried about that. So 0:15:58.880 --> 0:16:01.200 rates are kind of low, spreads still kind of low, okay. 0:16:00.920 --> 0:16:02.400 So you're not putting them in suffering. 0:16:02.400 --> 0:16:05.920 Where are you putting that million I'm central banks. 0:16:07.440 --> 0:16:10.240 For stability. If you look at fragmentation, I mean, the 0:16:10.320 --> 0:16:12.440 world seems a little bit odd, like equities are doing 0:16:12.440 --> 0:16:14.680 one thing, but we keep on being told there's a recession. 0:16:14.960 --> 0:16:17.560 Why is there this massive adusyncrasy. 0:16:18.040 --> 0:16:18.960 That's the contradiction. 0:16:19.560 --> 0:16:24.280 There's still consumers in America job unemployed three point five percent. 0:16:24.640 --> 0:16:26.920 Home prizes have gone up for ten to fifteen years. 0:16:27.880 --> 0:16:30.120 Stock prize has gone in for ten to fifteen years. 0:16:30.320 --> 0:16:32.560 They have a trillion dollars more in their checking accounts. 0:16:32.720 --> 0:16:35.360 They're spending that money. You see it in travel, you 0:16:35.400 --> 0:16:37.520 see it in restaurants, you see it, and you've been 0:16:37.560 --> 0:16:39.240 around here and you see in hotels, you see it. 0:16:39.360 --> 0:16:41.960 That's all good, but the excess money is being spent down. 0:16:42.600 --> 0:16:44.920 So the bite of that is going to happen later 0:16:44.960 --> 0:16:47.080 this year early next year. And the bite of QT 0:16:47.200 --> 0:16:50.080 hasn't happened yet. So if you have higher inflation, so 0:16:50.280 --> 0:16:52.480 I think it's a reasonable thing to say those things 0:16:52.480 --> 0:16:53.720 are coming to fruition. 0:16:54.400 --> 0:16:56.040 Maybe sometime in the end of the year. 0:16:56.440 --> 0:16:58.320 We don't know the effect of that, you know, if 0:16:58.360 --> 0:17:00.120 there's I mean, I would take a mild recession and 0:17:00.160 --> 0:17:06.400 happily right now, I am far more concerned about geopolitics, Ukraine, trade, 0:17:06.920 --> 0:17:10.560 you know, Russia, our relays with China, et cetera. And 0:17:10.600 --> 0:17:13.240 I always have to mind all of our public America 0:17:13.240 --> 0:17:16.960 has a seventy five thousand per person GDP, China's is fifteen. 0:17:17.320 --> 0:17:19.200 We have all the food warn and energy we want. 0:17:19.400 --> 0:17:22.159 They import ten million barrels of oil a day. I 0:17:22.160 --> 0:17:24.359 mean it's not They're not a ten for giant and 0:17:24.359 --> 0:17:25.439 that's a four foot pigmy. 0:17:25.720 --> 0:17:27.320 We have to manage ourselves back. I think we can 0:17:27.320 --> 0:17:29.080 grow more and more thoughtful. 0:17:29.560 --> 0:17:31.240 So you know, a lot of people say it's commercial 0:17:31.240 --> 0:17:33.560 real estates. I mean we talk about nothing else. Everybody 0:17:33.600 --> 0:17:36.000 knows that that could break. Is there something that we're 0:17:36.000 --> 0:17:36.920 not seeing that could break? 0:17:36.960 --> 0:17:38.919 I think it's amazing when you talk about Marcus that 0:17:39.320 --> 0:17:42.199 sometimes it's and the press sometimes like a bunch of 0:17:42.240 --> 0:17:45.320 birds flocking to one thing with endless comments about it. 0:17:45.760 --> 0:17:46.840 Yes, that's an issue. 0:17:47.000 --> 0:17:49.720 So you know, if you look at office real estate 0:17:50.080 --> 0:17:53.000 in be and C real estate with private problem Chicago, 0:17:54.440 --> 0:18:00.000