1 00:00:00,080 --> 00:00:13,040 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:33,400 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. Let's 5 00:00:33,400 --> 00:00:35,960 Speaker 1: get you back up to speed with that ECB rate decision. 6 00:00:36,000 --> 00:00:38,960 Speaker 1: Shall we rates unchanged? But they've always was always this 7 00:00:39,080 --> 00:00:42,240 Speaker 1: suspicion that maybe they tweaked forward guidance, and they have done. 8 00:00:42,400 --> 00:00:44,400 Speaker 1: The forward guidange used to be the e C B 9 00:00:44,560 --> 00:00:46,960 Speaker 1: c S rates as a present level for as long 10 00:00:47,240 --> 00:00:49,680 Speaker 1: as needed, or at least through the end of the 11 00:00:49,720 --> 00:00:52,920 Speaker 1: new guidance essentially is that rates at present or lower 12 00:00:53,000 --> 00:00:55,600 Speaker 1: levels for as long as needed. So that's an extension 13 00:00:55,720 --> 00:00:59,400 Speaker 1: and strengthening of forward guidance. So that story wants story 14 00:00:59,480 --> 00:01:03,320 Speaker 1: two on rates. If they introduce a lower interest rates. 15 00:01:03,560 --> 00:01:06,440 Speaker 1: They've ordered a review of options, including a tiered system 16 00:01:06,600 --> 00:01:08,840 Speaker 1: for rates, so that would offset some of the paying 17 00:01:08,840 --> 00:01:11,680 Speaker 1: for the financials. Good news sort of financials, good news 18 00:01:11,680 --> 00:01:13,720 Speaker 1: for the bank. So you're a weaker down by a tenth. 19 00:01:14,000 --> 00:01:17,440 Speaker 1: Banks up on the stocks, fifty euro stocks fifty up 20 00:01:17,440 --> 00:01:20,360 Speaker 1: by a little more than two percent, So that's forward guidance, 21 00:01:20,440 --> 00:01:24,280 Speaker 1: that's rates. Let's talk about asset purchases. ECB staff also 22 00:01:24,720 --> 00:01:29,440 Speaker 1: examining options for potential new asset buying, so under consideration, 23 00:01:29,880 --> 00:01:32,919 Speaker 1: a review of options on rates included in a tiered 24 00:01:32,959 --> 00:01:37,440 Speaker 1: system for rates and options for potential new asset buying 25 00:01:37,560 --> 00:01:42,280 Speaker 1: as well. So qui under consideration, tearing under consideration, and 26 00:01:42,360 --> 00:01:45,000 Speaker 1: it looks like this could all come Lisa Bravits as 27 00:01:45,000 --> 00:01:47,520 Speaker 1: soon as September. This is exactly what the market was 28 00:01:47,560 --> 00:01:50,000 Speaker 1: expecting though, right, I mean, honestly, this is this is 29 00:01:50,040 --> 00:01:53,920 Speaker 1: pretty much Uh. They figured the ECB would being trying 30 00:01:53,960 --> 00:01:57,400 Speaker 1: to assemble some sort of package to really hit the 31 00:01:57,400 --> 00:02:00,160 Speaker 1: Eurozone and try to ignite some growth. This how it 32 00:02:00,160 --> 00:02:02,560 Speaker 1: confirms that. Yeah. I think it's really encouraging though to 33 00:02:02,560 --> 00:02:04,880 Speaker 1: see the bank stocks up by two point nine percent 34 00:02:04,920 --> 00:02:07,440 Speaker 1: in Europe. Less focused on the euro for me at least, 35 00:02:07,480 --> 00:02:10,160 Speaker 1: just looking at the financials and the equities responding positively 36 00:02:10,720 --> 00:02:13,639 Speaker 1: to this decision. Basically, the the idea, the implication here 37 00:02:13,720 --> 00:02:16,440 Speaker 1: being that that the ECB understands the pain that would 38 00:02:16,440 --> 00:02:18,880 Speaker 1: be inflicted on the banks if it didn't do some 39 00:02:18,960 --> 00:02:23,240 Speaker 1: sort of alleviation of the steep discount rate given the 40 00:02:23,280 --> 00:02:25,840 Speaker 1: fact that they would have to pay zero point five 41 00:02:26,000 --> 00:02:29,360 Speaker 1: percent on their deposits held overnight if they did lower 42 00:02:29,440 --> 00:02:31,639 Speaker 1: rates without tearing, the idea that they wouldn't have to 43 00:02:31,680 --> 00:02:34,320 Speaker 1: pay all of that is giving some confidence to European 44 00:02:34,320 --> 00:02:36,440 Speaker 1: banks at least. I would also say my other interpretation 45 00:02:36,480 --> 00:02:38,800 Speaker 1: of this decision as well, I don't think they've held 46 00:02:38,840 --> 00:02:42,000 Speaker 1: off until September because they get the staff forecast. I 47 00:02:42,040 --> 00:02:45,040 Speaker 1: think they've hold off. They're holding off until September because 48 00:02:45,040 --> 00:02:47,080 Speaker 1: they haven't really agreed on the parameters for a new 49 00:02:47,080 --> 00:02:50,080 Speaker 1: asset purchase program. Is pretty clear that they're still examining 50 00:02:50,080 --> 00:02:52,640 Speaker 1: options for that. That headline has come across the Bloomberg 51 00:02:52,919 --> 00:02:55,799 Speaker 1: also pretty clear over the last few months since President 52 00:02:55,880 --> 00:02:59,480 Speaker 1: drag first head up the idea of tearing if rates 53 00:02:59,520 --> 00:03:02,320 Speaker 1: went eve and lower, it looks like they're still reviewing 54 00:03:02,360 --> 00:03:04,360 Speaker 1: that too. So I think the reasons to hold off 55 00:03:04,440 --> 00:03:08,239 Speaker 1: until September are not about forecast. It's about actually coming 56 00:03:08,280 --> 00:03:10,560 Speaker 1: to an agreement about the parameters for new bond buying 57 00:03:10,880 --> 00:03:13,400 Speaker 1: and whether you introduced hearing and coming out with a 58 00:03:13,520 --> 00:03:16,880 Speaker 1: full guns of blazing package to say here's what we 59 00:03:17,000 --> 00:03:20,359 Speaker 1: got and shark and are let's get this started. I 60 00:03:20,400 --> 00:03:22,400 Speaker 1: mean really, and it's not just going to be one 61 00:03:22,440 --> 00:03:24,760 Speaker 1: little blip of a move and then sort of trickle 62 00:03:24,840 --> 00:03:26,919 Speaker 1: out the rest. Let's bring in Semas Shash now were 63 00:03:26,960 --> 00:03:29,519 Speaker 1: principal global investors chief strategies seem a great timing with 64 00:03:29,600 --> 00:03:32,520 Speaker 1: us on the program. Your interpretation of the decision in 65 00:03:32,560 --> 00:03:35,760 Speaker 1: the last ten minutes, Yeah, not too dissimil to what 66 00:03:35,800 --> 00:03:37,920 Speaker 1: you've said. I mean, I think maybe what happened this 67 00:03:37,960 --> 00:03:41,280 Speaker 1: morning was given the very weak iPhone number and then 68 00:03:41,320 --> 00:03:44,160 Speaker 1: also the week here nights from yesterday, but that perhaps 69 00:03:44,200 --> 00:03:48,200 Speaker 1: the market had raised slightly their expectations for every cup today. 70 00:03:48,240 --> 00:03:50,800 Speaker 1: But in truth this has really met expectations. I think 71 00:03:50,800 --> 00:03:52,520 Speaker 1: they have done some pretty good staff in terms of 72 00:03:52,520 --> 00:03:54,800 Speaker 1: an auncual tearing as you said that it's very important 73 00:03:54,840 --> 00:03:58,280 Speaker 1: for banks because up till now you've had easily policy 74 00:03:58,280 --> 00:04:00,560 Speaker 1: which is really been undermined by generally to rate not 75 00:04:00,640 --> 00:04:04,080 Speaker 1: really helping banks. So that's certainly positive and with potential 76 00:04:04,120 --> 00:04:05,800 Speaker 1: for que You know, I don't think anyone was really 77 00:04:05,800 --> 00:04:08,360 Speaker 1: expecting an announcement today, but the fact is that they 78 00:04:08,400 --> 00:04:11,160 Speaker 1: are layering the laying the groundwork or something to be 79 00:04:11,240 --> 00:04:14,640 Speaker 1: done at least some more details in September. It may 80 00:04:14,680 --> 00:04:17,599 Speaker 1: be that it's really left for Christine regards to actually 81 00:04:17,640 --> 00:04:19,640 Speaker 1: bring it into force, and really the market just wants 82 00:04:19,640 --> 00:04:21,800 Speaker 1: to know that, and I think from here on there's 83 00:04:22,080 --> 00:04:24,760 Speaker 1: a lot of focus on what are they likely to buy? 84 00:04:24,880 --> 00:04:27,440 Speaker 1: And we know from previous times that the corporate bond 85 00:04:27,440 --> 00:04:30,240 Speaker 1: purchase program was the most effective, and that is what 86 00:04:30,279 --> 00:04:32,279 Speaker 1: the market is frexing on, so seeming let's focus on 87 00:04:32,320 --> 00:04:34,320 Speaker 1: that just for a moment. As we know and pointed 88 00:04:34,320 --> 00:04:37,800 Speaker 1: out by Mergy investments of the high grade market in 89 00:04:37,920 --> 00:04:41,280 Speaker 1: the European credit market right now of financials, do you 90 00:04:41,320 --> 00:04:43,960 Speaker 1: think there's a possibility that the ECB could start buying 91 00:04:44,000 --> 00:04:46,200 Speaker 1: the debt of the companies that they also have to regulate. 92 00:04:48,400 --> 00:04:50,160 Speaker 1: I think that may well be a step too far 93 00:04:50,200 --> 00:04:52,839 Speaker 1: at this stage. I think there's so many umt of 94 00:04:52,960 --> 00:04:56,920 Speaker 1: various constraints constructions that they are under that that may 95 00:04:56,960 --> 00:04:59,520 Speaker 1: have to be a step further. And you may only 96 00:04:59,560 --> 00:05:02,599 Speaker 1: see that once the market or the economy continues to weaken. 97 00:05:02,640 --> 00:05:05,880 Speaker 1: You don't feel like aner deposit is really helping banks. 98 00:05:05,920 --> 00:05:08,239 Speaker 1: So I think that's that's further step in the same 99 00:05:08,279 --> 00:05:11,240 Speaker 1: way that you know, we hear all the circulations. Are 100 00:05:11,360 --> 00:05:13,520 Speaker 1: the ECB ever been to buy equities. I think you 101 00:05:13,600 --> 00:05:16,160 Speaker 1: need to your really drastic deterioration in the economy before 102 00:05:16,200 --> 00:05:18,880 Speaker 1: they go down that road. So let's say the ECB 103 00:05:19,279 --> 00:05:22,120 Speaker 1: does come through with what the market is currently expecting, 104 00:05:22,360 --> 00:05:26,200 Speaker 1: a rate cut, tearing and some sort of format for 105 00:05:26,320 --> 00:05:29,760 Speaker 1: what further asset purchases would look for, look like, will 106 00:05:29,760 --> 00:05:32,760 Speaker 1: that work? Will that? Will that actually jumps out the 107 00:05:32,760 --> 00:05:37,400 Speaker 1: European economy? Well, you know, I think that's a key 108 00:05:37,480 --> 00:05:40,520 Speaker 1: question because what we have here is you have Montro policy. 109 00:05:40,560 --> 00:05:43,159 Speaker 1: Really it's at the walls of its effectiveness, so you 110 00:05:43,160 --> 00:05:45,640 Speaker 1: can only move the das so much. A lot of 111 00:05:45,640 --> 00:05:47,880 Speaker 1: it's going to be via the communication and simply you know, 112 00:05:48,000 --> 00:05:50,240 Speaker 1: if they were to just do a rate cut and 113 00:05:50,279 --> 00:05:53,040 Speaker 1: maybe tearing, that's simply not enough. It definitely needs the 114 00:05:53,200 --> 00:05:55,080 Speaker 1: quite I think for me, when I look at as 115 00:05:55,160 --> 00:05:58,200 Speaker 1: the classes, the key beneficiary assuming all of that comes in, 116 00:05:58,360 --> 00:06:00,320 Speaker 1: is going to be the credit side. Um And it's 117 00:06:00,320 --> 00:06:03,360 Speaker 1: not a fundamental it's simply a technical move and that's 118 00:06:03,360 --> 00:06:06,960 Speaker 1: what the markets happened. But that from the fundamentals, I 119 00:06:07,000 --> 00:06:10,720 Speaker 1: am very gubious this is going to really push Europe 120 00:06:10,800 --> 00:06:13,320 Speaker 1: out of the kind of stagnation that we are seeing 121 00:06:13,480 --> 00:06:15,120 Speaker 1: in just the next year. Yes, s, I think you've 122 00:06:15,160 --> 00:06:18,120 Speaker 1: touched on something really important, just a supply story. Are 123 00:06:18,120 --> 00:06:20,200 Speaker 1: you going to buy the supply story? If they buy 124 00:06:20,240 --> 00:06:22,520 Speaker 1: more corporate debt will be less corporate debt for other 125 00:06:22,520 --> 00:06:24,800 Speaker 1: people to buy yours a going lower that may well 126 00:06:24,839 --> 00:06:28,240 Speaker 1: apply to credit on the sovereigns. What fascinates me is 127 00:06:28,240 --> 00:06:31,440 Speaker 1: whether you buy the effectiveness story, because ultimately that would 128 00:06:31,440 --> 00:06:34,200 Speaker 1: mean you sell ten year buns because you believe the 129 00:06:34,200 --> 00:06:37,960 Speaker 1: ECB policy will work. Are you essentially saying seeing on 130 00:06:38,000 --> 00:06:41,320 Speaker 1: the sovereign side, don't expect higher bund yields on longer 131 00:06:41,360 --> 00:06:45,120 Speaker 1: maturities anytime soon. No, I don't think this can be 132 00:06:45,480 --> 00:06:47,320 Speaker 1: any meetings or thing on on buns. I mean, I 133 00:06:47,360 --> 00:06:49,000 Speaker 1: think you know there's keeping of you know, you simply 134 00:06:49,040 --> 00:06:52,720 Speaker 1: cannot cite the technicals, so they may well I think, 135 00:06:53,279 --> 00:06:56,120 Speaker 1: you know, especially if he comes in and be surprising marketing, 136 00:06:56,160 --> 00:06:58,240 Speaker 1: you could see your slightly down the bund deal. But 137 00:06:58,320 --> 00:07:01,599 Speaker 1: they have to be close to best law. Um. You know, 138 00:07:01,640 --> 00:07:03,600 Speaker 1: we all know that the peripheral yields are the ones 139 00:07:03,640 --> 00:07:06,120 Speaker 1: are gonna be the key beneficiaries for any ECG move 140 00:07:06,640 --> 00:07:09,840 Speaker 1: and the boon side the kind of France, they may 141 00:07:09,880 --> 00:07:11,680 Speaker 1: not be the key beneficiaries that I fee that we 142 00:07:11,720 --> 00:07:14,920 Speaker 1: could see some movement from Italy from Spain still, but 143 00:07:14,960 --> 00:07:17,200 Speaker 1: there's you said Germany. It could be a different question, 144 00:07:17,600 --> 00:07:19,679 Speaker 1: seem I. Do you agree with Larry Fink of Black 145 00:07:19,800 --> 00:07:25,040 Speaker 1: Rock that the ECB should buy equities? You know, I 146 00:07:25,080 --> 00:07:27,080 Speaker 1: think that there is certainly case, but I think there's 147 00:07:27,080 --> 00:07:28,880 Speaker 1: a very big difference between Europe and the U S 148 00:07:28,920 --> 00:07:31,920 Speaker 1: And the key thing is this in the US, whereas 149 00:07:31,920 --> 00:07:35,680 Speaker 1: a lot of retail investors are in equity, in Europe, 150 00:07:35,680 --> 00:07:37,480 Speaker 1: it is simply not the case because they have a 151 00:07:38,000 --> 00:07:41,120 Speaker 1: smaller holding of equities related to the US. So if 152 00:07:41,160 --> 00:07:44,160 Speaker 1: the ECB buy equities, it actually has less of an 153 00:07:44,160 --> 00:07:46,680 Speaker 1: impact on the underlying economy than it would do in 154 00:07:46,680 --> 00:07:49,400 Speaker 1: the US. There is less of a reason. The ECB 155 00:07:49,480 --> 00:07:53,800 Speaker 1: is also under major constraints politically, illegally, um So I 156 00:07:53,960 --> 00:07:56,080 Speaker 1: think that that is actually the last step in the 157 00:07:56,160 --> 00:08:00,320 Speaker 1: Roadman Ta right now down three basis points, fresh record 158 00:08:00,120 --> 00:08:02,040 Speaker 1: low on a ten year maturity in the bond market, 159 00:08:02,040 --> 00:08:06,520 Speaker 1: you'll yield negative forty one basis points. Lisa Ramots yields 160 00:08:06,520 --> 00:08:09,640 Speaker 1: grinding even lower on the continent. Well, and this really 161 00:08:09,720 --> 00:08:13,160 Speaker 1: raises a question Seema about the efficacy as we were 162 00:08:13,200 --> 00:08:16,160 Speaker 1: just talking about, because if you look at market expectations, 163 00:08:16,640 --> 00:08:19,080 Speaker 1: it is that the ECB will be ineffective. I mean, 164 00:08:19,080 --> 00:08:21,360 Speaker 1: you're seeing the yield curve shrink, given the fact that 165 00:08:21,400 --> 00:08:24,040 Speaker 1: you're seeing that ten year boon yield dropped to all 166 00:08:24,080 --> 00:08:26,080 Speaker 1: time record lows if you look at five year, five 167 00:08:26,120 --> 00:08:29,320 Speaker 1: year forward break even raids. I'm just wondering, you know, 168 00:08:29,440 --> 00:08:33,480 Speaker 1: will this effectively hurt the recovery of the euro Zone 169 00:08:33,520 --> 00:08:38,199 Speaker 1: of the ECB doubles down and add stimulus here. I mean, 170 00:08:38,360 --> 00:08:40,080 Speaker 1: I don't know if it would necessarily hurt, but I 171 00:08:40,200 --> 00:08:42,560 Speaker 1: think that maybe, you know, maybe we're am looking at 172 00:08:42,559 --> 00:08:45,920 Speaker 1: the wrong wrong indicator, which is the key stimulus is 173 00:08:45,920 --> 00:08:48,640 Speaker 1: going to come in through the Euro and I think 174 00:08:48,679 --> 00:08:51,120 Speaker 1: maybe that's what they're trying to move here. Um, you know, 175 00:08:51,200 --> 00:08:54,440 Speaker 1: so far this is it's on expectation to you. Wait, 176 00:08:54,520 --> 00:08:56,800 Speaker 1: this is important, hold on a second. So in other words, 177 00:08:56,800 --> 00:09:01,360 Speaker 1: currency wars, yeah, and you know, I mean let's say, 178 00:09:01,480 --> 00:09:03,640 Speaker 1: let's say, for example, that Jegy had done stoping today 179 00:09:03,679 --> 00:09:06,160 Speaker 1: is something pretty aggressive in terms of rate cuts. We 180 00:09:06,240 --> 00:09:08,839 Speaker 1: know that there would be some kind of response from 181 00:09:08,840 --> 00:09:11,920 Speaker 1: the Use administration. Now today we haven't got that, and 182 00:09:11,960 --> 00:09:13,320 Speaker 1: I think they're gonna be keeping an eye on what 183 00:09:13,400 --> 00:09:16,240 Speaker 1: the FED does next week and that may actually load 184 00:09:16,320 --> 00:09:18,360 Speaker 1: someder ground rates of what they do in September. But 185 00:09:18,440 --> 00:09:20,080 Speaker 1: I do think that the currency side, when you get 186 00:09:20,120 --> 00:09:22,440 Speaker 1: to a point where montropology is losing inspectiveness, and it 187 00:09:22,480 --> 00:09:26,120 Speaker 1: certainly is that it's walls in many countries, then you're 188 00:09:26,160 --> 00:09:28,959 Speaker 1: only route to hit the economy is via the currency. 189 00:09:29,000 --> 00:09:31,040 Speaker 1: And as you said that in RT current I seem 190 00:09:31,040 --> 00:09:33,080 Speaker 1: a greater to catcher with you, Michelle the Principal Global 191 00:09:33,160 --> 00:09:45,560 Speaker 1: Investors Chief strategist. I think my focus at the moment 192 00:09:45,640 --> 00:09:48,120 Speaker 1: leads to the prospect of lobal rates in Europe. My 193 00:09:48,200 --> 00:09:50,960 Speaker 1: first question how will the bank's tolerates it? And to 194 00:09:51,000 --> 00:09:54,079 Speaker 1: see the financials on the euro stocks fifty up by 195 00:09:54,120 --> 00:09:57,920 Speaker 1: a round about two point four four percent, I think 196 00:09:57,920 --> 00:10:00,760 Speaker 1: it is encouraging on the idea that they also implement 197 00:10:00,880 --> 00:10:05,400 Speaker 1: tearing if they drop rates in September. That's someone encouraging. Yeah. 198 00:10:05,440 --> 00:10:08,640 Speaker 1: It basically is an expectation that the ECB recognizes the 199 00:10:08,679 --> 00:10:10,600 Speaker 1: pain that they would be inflicting on the banks that 200 00:10:10,640 --> 00:10:14,720 Speaker 1: they already have, and that they would lighten the cost 201 00:10:14,880 --> 00:10:17,760 Speaker 1: that they wouldn't have to necessarily pay banks UH the 202 00:10:17,880 --> 00:10:20,680 Speaker 1: full negative zero point five repay their zero point five 203 00:10:20,720 --> 00:10:24,480 Speaker 1: pc deposit rate for all of their assets. So we'll see, 204 00:10:24,600 --> 00:10:26,800 Speaker 1: let's bring a Jeremy stretch show. We see IBC header 205 00:10:26,840 --> 00:10:30,360 Speaker 1: G ten FX strategy. Jeremy really thoughts ahead of that 206 00:10:30,400 --> 00:10:34,640 Speaker 1: news conference in twenty eight minutes time, Well, obviously the 207 00:10:34,640 --> 00:10:37,319 Speaker 1: the headlines have you've just been discussing, and I think 208 00:10:37,320 --> 00:10:40,160 Speaker 1: in a sense it looks increasingly likely that to drive 209 00:10:40,240 --> 00:10:42,880 Speaker 1: you we use his penultimate meeting to effectively through the 210 00:10:42,960 --> 00:10:46,480 Speaker 1: kitchen sincat. This will be underlying backdrop in order to 211 00:10:46,520 --> 00:10:49,600 Speaker 1: facilitate as better as best a condition as possible to 212 00:10:49,640 --> 00:10:54,240 Speaker 1: hand over to his successor after his last meeting October UM. 213 00:10:54,280 --> 00:10:57,760 Speaker 1: So I think you're right to laud the prospect of 214 00:10:57,800 --> 00:11:00,880 Speaker 1: tearing because I think that was one particular concern in 215 00:11:00,920 --> 00:11:04,280 Speaker 1: relation to the negative deposit rates spectrum, because the ECB 216 00:11:04,360 --> 00:11:06,959 Speaker 1: has been the only of the negative yielding center banks 217 00:11:07,000 --> 00:11:11,000 Speaker 1: to avoid that scenario thus far. Um. But it seems 218 00:11:11,000 --> 00:11:12,640 Speaker 1: to be the case that you know ten basis point 219 00:11:12,679 --> 00:11:15,040 Speaker 1: is very much baked in four September. The question is 220 00:11:15,080 --> 00:11:19,040 Speaker 1: will draw you allow the market to discuss or consider 221 00:11:19,160 --> 00:11:21,520 Speaker 1: more than that, and of course if he does, then 222 00:11:21,559 --> 00:11:24,760 Speaker 1: that will be a catalyst for the Euro to continue 223 00:11:24,760 --> 00:11:27,840 Speaker 1: to retreat, and of course that will be interesting. Uh. 224 00:11:27,840 --> 00:11:29,560 Speaker 1: And I will be keeping my eye on Mr Trump's 225 00:11:29,559 --> 00:11:31,760 Speaker 1: Twitter feed to just to see if he has an 226 00:11:31,760 --> 00:11:34,040 Speaker 1: early early response to this. Well, Jeremy, I want to 227 00:11:34,040 --> 00:11:36,160 Speaker 1: pick up on that because Sima Chaw was just on 228 00:11:36,280 --> 00:11:39,800 Speaker 1: a principal global investors since she was saying, Uh, this 229 00:11:40,160 --> 00:11:43,840 Speaker 1: essentially is a bid to weaken the euro, because we 230 00:11:43,840 --> 00:11:46,280 Speaker 1: were talking about the potential efficacy and if you look 231 00:11:46,600 --> 00:11:50,200 Speaker 1: at German markets right now, European markets, it isn't a 232 00:11:50,200 --> 00:11:55,240 Speaker 1: material boost inflation expectations, yield curve flatter, Uh, Inflation rates 233 00:11:55,360 --> 00:11:59,320 Speaker 1: over the next ten years not materially higher. I'm just wondering, 234 00:11:59,559 --> 00:12:02,640 Speaker 1: do you think that this is just a reignition of 235 00:12:02,720 --> 00:12:06,680 Speaker 1: currency warriors. Well, of course Mr Dragon will be asked 236 00:12:06,679 --> 00:12:08,720 Speaker 1: about the currency today, and as ever, he will always 237 00:12:08,720 --> 00:12:10,680 Speaker 1: back that back and say that the ECP has no 238 00:12:10,800 --> 00:12:14,400 Speaker 1: specific intention on the currency. But of course implicit to 239 00:12:14,559 --> 00:12:19,080 Speaker 1: their inflation assumptions are the influence of imported prices and 240 00:12:19,120 --> 00:12:21,000 Speaker 1: of course if you are going to cheapen up the Euro, 241 00:12:21,080 --> 00:12:23,560 Speaker 1: then you would get higher imported prices and find some 242 00:12:23,640 --> 00:12:26,840 Speaker 1: stimulus on the inflation side. So in a sense, it's 243 00:12:26,840 --> 00:12:30,960 Speaker 1: it's sort of an implied process, but it does raise 244 00:12:31,040 --> 00:12:35,600 Speaker 1: the risk of adding to already a relatively feeble atmosphere 245 00:12:35,600 --> 00:12:38,720 Speaker 1: in terms of the currency world, because of course these 246 00:12:39,040 --> 00:12:43,240 Speaker 1: tensions in terms of currency levels are becoming much more politicized, 247 00:12:43,280 --> 00:12:46,000 Speaker 1: and I think that is something that markets will remain 248 00:12:46,080 --> 00:12:48,640 Speaker 1: very mindful of, even if as a as a say 249 00:12:48,720 --> 00:12:51,480 Speaker 1: Mr Dragon will push back against any explicit commitment on 250 00:12:51,720 --> 00:12:54,240 Speaker 1: currency values. Jeremy, we're a week less than a week 251 00:12:54,360 --> 00:12:56,679 Speaker 1: away from what we could get a right cut from 252 00:12:56,679 --> 00:12:58,960 Speaker 1: the fellow Reserve. I just wonder if we've had enough 253 00:12:59,000 --> 00:13:00,760 Speaker 1: today from the e C and we don't know what 254 00:13:00,800 --> 00:13:02,560 Speaker 1: comes in the news conference, but just so far, if 255 00:13:02,559 --> 00:13:04,800 Speaker 1: you can make a judgment that would be welcome, Whether 256 00:13:04,800 --> 00:13:08,360 Speaker 1: we've had enough from the ECB so far to insulate 257 00:13:08,360 --> 00:13:11,640 Speaker 1: the euro from strength. If the Federal Reserve comes out 258 00:13:11,679 --> 00:13:17,080 Speaker 1: swinging next week, well, it's it's it is interesting to 259 00:13:17,559 --> 00:13:19,360 Speaker 1: know to sort of think about the sort of the 260 00:13:19,440 --> 00:13:23,080 Speaker 1: juxtaposition between the interplay of central banks, and I think 261 00:13:23,080 --> 00:13:24,800 Speaker 1: that was one of the reasons why it made sense 262 00:13:24,840 --> 00:13:26,880 Speaker 1: for the c B two to row back from policy 263 00:13:26,920 --> 00:13:29,440 Speaker 1: action now and to wait and to see what the 264 00:13:29,480 --> 00:13:31,200 Speaker 1: federal Reserve we're going to do now. Of course, the 265 00:13:31,240 --> 00:13:33,080 Speaker 1: U c B would also argue they need to consider 266 00:13:33,160 --> 00:13:36,840 Speaker 1: these other package of majures to go with the negative 267 00:13:36,880 --> 00:13:39,520 Speaker 1: rate story. Um, I think we've we've obviously seen the 268 00:13:39,559 --> 00:13:42,280 Speaker 1: market which has has been anticipating and assuming that there 269 00:13:42,320 --> 00:13:46,120 Speaker 1: would bear and coming from the Eurozone, alongside the macro 270 00:13:46,200 --> 00:13:48,880 Speaker 1: weakness of that has been keeping the euro on the defensive. 271 00:13:49,440 --> 00:13:51,680 Speaker 1: I guess the question is how how low can we go? 272 00:13:51,760 --> 00:13:53,880 Speaker 1: And I think if we do see a print in 273 00:13:53,920 --> 00:13:55,880 Speaker 1: the upper one tens at this point, I think it 274 00:13:55,920 --> 00:13:58,640 Speaker 1: may well be the case of just sort of looking 275 00:13:58,640 --> 00:14:00,760 Speaker 1: to lighten some of those eurosual positions, and we may 276 00:14:00,800 --> 00:14:02,679 Speaker 1: well see a little bit of a constructed by US 277 00:14:02,720 --> 00:14:05,480 Speaker 1: coming back in which might just ease the burden a 278 00:14:05,600 --> 00:14:08,560 Speaker 1: little bit for Mr Powell next week. So, Jeremy, I 279 00:14:08,640 --> 00:14:12,679 Speaker 1: want to sort of discuss the consequences of a potential 280 00:14:12,679 --> 00:14:15,800 Speaker 1: currency war race to the bottom in terms of what 281 00:14:15,840 --> 00:14:18,680 Speaker 1: you do as an investor. Wouldn't you just double down 282 00:14:18,679 --> 00:14:21,680 Speaker 1: on emerging markets and the riskiest currencies could develop markets 283 00:14:21,720 --> 00:14:23,840 Speaker 1: are all racing to try to make their currencies as 284 00:14:23,880 --> 00:14:28,560 Speaker 1: weak as possible. Well in the world where there is 285 00:14:28,560 --> 00:14:31,520 Speaker 1: this perception of trying to cheapen currency and or by 286 00:14:31,640 --> 00:14:35,440 Speaker 1: virtue of monitor policy stimulus, then of course then carry 287 00:14:35,560 --> 00:14:38,080 Speaker 1: is potentially king. So you're you are coming back to 288 00:14:38,520 --> 00:14:41,760 Speaker 1: looking at those high ulding markets. And I was discussing 289 00:14:42,160 --> 00:14:44,960 Speaker 1: Turkey with with your colleagues on television a little bit 290 00:14:44,960 --> 00:14:47,400 Speaker 1: earlier in the context of even with the more aggressive 291 00:14:47,480 --> 00:14:49,720 Speaker 1: rate cuts that we've seen from these center bank today, 292 00:14:50,000 --> 00:14:53,800 Speaker 1: you've still got a very substantial real yield level compared 293 00:14:53,840 --> 00:14:55,880 Speaker 1: to elsewhere. So I think there is going to be 294 00:14:55,880 --> 00:14:59,240 Speaker 1: a case for investors to continue to look in general 295 00:14:59,400 --> 00:15:02,640 Speaker 1: for opportunities in high uning markets. But I think it 296 00:15:02,760 --> 00:15:04,400 Speaker 1: is very much the case that you need to be 297 00:15:04,840 --> 00:15:07,640 Speaker 1: wary of some of the specific idiocy and cracking issues 298 00:15:07,640 --> 00:15:10,360 Speaker 1: and some of those nations. But ultimately, in a world 299 00:15:10,440 --> 00:15:13,720 Speaker 1: where the developed markets or the developed currencies are seemingly 300 00:15:13,760 --> 00:15:18,960 Speaker 1: under obvious pressure and or external downside this, then investors 301 00:15:18,960 --> 00:15:21,720 Speaker 1: may well continue to look for those high uling alternatives 302 00:15:21,760 --> 00:15:23,560 Speaker 1: as well. So Jeremy, I don't know if you read it, 303 00:15:23,600 --> 00:15:26,480 Speaker 1: but there was a story yesterday by my colleague Craig 304 00:15:26,520 --> 00:15:30,040 Speaker 1: torres about a professional worrying unit in the New York 305 00:15:30,080 --> 00:15:32,920 Speaker 1: Federal Reserve, a woman who has a unit whose job 306 00:15:32,920 --> 00:15:35,080 Speaker 1: it is just to think, what is the Federal Reserve 307 00:15:35,160 --> 00:15:39,320 Speaker 1: doing wrong? What could potentially go bust in financial markets? 308 00:15:39,520 --> 00:15:41,800 Speaker 1: And I would guess that she may be tearing her 309 00:15:41,840 --> 00:15:45,480 Speaker 1: hair out as she listens to this conversation, thinking, Wow, 310 00:15:45,560 --> 00:15:48,760 Speaker 1: people are being encouraged to lever up, double down on 311 00:15:48,920 --> 00:15:55,080 Speaker 1: carry trades. What's the potential consequence of that longer term? Well, 312 00:15:55,080 --> 00:15:58,200 Speaker 1: of course, we are an environment where the assumption is 313 00:15:58,240 --> 00:16:01,880 Speaker 1: that inflation is relatively benign or if not dead, and 314 00:16:01,960 --> 00:16:05,080 Speaker 1: so if there were to be some degree of consequence 315 00:16:05,080 --> 00:16:08,320 Speaker 1: of an inflation respector coming back into the marketplace, then 316 00:16:08,680 --> 00:16:12,600 Speaker 1: clearly that would create enormous degrees of instability. And of course, 317 00:16:13,080 --> 00:16:15,440 Speaker 1: as we as we well know, when you're looking at 318 00:16:16,000 --> 00:16:18,840 Speaker 1: your markets or less liquid markets than of course there 319 00:16:18,920 --> 00:16:22,000 Speaker 1: is that liquidity risk, and that of course is one 320 00:16:22,000 --> 00:16:24,960 Speaker 1: of the one of the sort of the legacies of 321 00:16:24,520 --> 00:16:27,000 Speaker 1: the post crisis well over ten years ago when we 322 00:16:27,120 --> 00:16:29,960 Speaker 1: had those difficulties in terms of liquidity. So it is 323 00:16:30,200 --> 00:16:32,320 Speaker 1: you know, it is this sort of fear or perception 324 00:16:32,360 --> 00:16:35,680 Speaker 1: of revisiting some of the some of the mistakes of 325 00:16:35,720 --> 00:16:38,560 Speaker 1: the past, which I guess will be causing some consternation 326 00:16:38,600 --> 00:16:41,040 Speaker 1: for those that are played too to worry about what 327 00:16:41,080 --> 00:16:43,880 Speaker 1: could go wrong. Jeremy. We're very much in an easing 328 00:16:43,920 --> 00:16:48,000 Speaker 1: cycle now, Australia cutting rates, South Africa cutting rates, South 329 00:16:48,080 --> 00:16:51,920 Speaker 1: Korea cutting rates, Indonesia cutting rates. The ECB team one up, 330 00:16:51,960 --> 00:16:55,560 Speaker 1: the Federal Reserve next week, slipping under the radar, and 331 00:16:55,600 --> 00:16:59,360 Speaker 1: no one's really talking about it. The Bank of Japan, Jeremy, 332 00:16:59,520 --> 00:17:02,480 Speaker 1: you expect think anything from the bo J anytime soon. 333 00:17:04,280 --> 00:17:05,960 Speaker 1: That's a very good question. In a sense, they have 334 00:17:06,080 --> 00:17:08,680 Speaker 1: You're You're absolutely right. They have been sort of left 335 00:17:08,720 --> 00:17:10,600 Speaker 1: out of the sort of the market discussion for some 336 00:17:10,760 --> 00:17:13,720 Speaker 1: considerable time. Um. And we are in an environment where 337 00:17:13,760 --> 00:17:15,880 Speaker 1: the sort of the macro story remains under a little 338 00:17:15,880 --> 00:17:18,520 Speaker 1: bit of threat. And obviously there's there's this ongoing issue 339 00:17:18,560 --> 00:17:22,080 Speaker 1: regarding the consumption tax hike that's coming through and how 340 00:17:22,080 --> 00:17:24,720 Speaker 1: that will impact on the on the consumer side. UM. 341 00:17:24,760 --> 00:17:26,240 Speaker 1: So I think it is going to be a case 342 00:17:26,320 --> 00:17:29,840 Speaker 1: that markets will be watching out for, perhaps the the 343 00:17:29,840 --> 00:17:33,760 Speaker 1: Bank of Japan looking to continue to extend its own 344 00:17:33,840 --> 00:17:36,520 Speaker 1: balance sheets. So in a sense, it has been the 345 00:17:36,520 --> 00:17:39,600 Speaker 1: one central banket. It's been off the radar screen. I 346 00:17:39,640 --> 00:17:42,879 Speaker 1: think invariably markets have become accustomed to the Bank of 347 00:17:42,920 --> 00:17:46,680 Speaker 1: Japan always consistently arguing that we'll get to its inflation 348 00:17:46,720 --> 00:17:49,840 Speaker 1: target over the over the rainbow, almost as we speak, 349 00:17:49,840 --> 00:17:52,400 Speaker 1: but never actually achieving it. And I think still that's 350 00:17:52,480 --> 00:17:54,560 Speaker 1: the presumption, and so the the Bank of Japan will 351 00:17:54,600 --> 00:17:58,280 Speaker 1: continue to remain exceptionally easy. But I think it's it's 352 00:17:58,320 --> 00:18:00,320 Speaker 1: not the sort of the pre eminent story in terms 353 00:18:00,320 --> 00:18:02,879 Speaker 1: of the global central bank cycle. As we as we 354 00:18:02,960 --> 00:18:04,800 Speaker 1: turn to speak, Jeremy Gright to catch you with you, 355 00:18:04,880 --> 00:18:19,240 Speaker 1: Jeremy stretch that c I PC head of Strategy. Well, 356 00:18:19,280 --> 00:18:23,399 Speaker 1: Saturday Night Live has become an institution. Since nineteen seventy five, 357 00:18:23,480 --> 00:18:26,600 Speaker 1: Louren Michaels has brought SNL into our living rooms each 358 00:18:26,720 --> 00:18:30,160 Speaker 1: Saturday night. David Rubinstein, Carlisle Group, co founder and host 359 00:18:30,200 --> 00:18:33,760 Speaker 1: of Peer to Peer Conversations, sat down with Mr Michaels. 360 00:18:34,200 --> 00:18:35,960 Speaker 1: Take a listen to what they had to say. So 361 00:18:36,040 --> 00:18:39,160 Speaker 1: from seventy five the late seventies or early eighties, how 362 00:18:39,160 --> 00:18:41,560 Speaker 1: has humor changed or the people who laughed at the 363 00:18:41,600 --> 00:18:43,800 Speaker 1: same kind of things or certain things you can make 364 00:18:43,800 --> 00:18:46,520 Speaker 1: fun of now you couldn't or vice versa. There's almost 365 00:18:46,520 --> 00:18:48,600 Speaker 1: nothing we did in the seventies that I could do now. 366 00:18:49,240 --> 00:18:51,760 Speaker 1: Gilda Rodner would not be able to play Rose Amazona 367 00:18:51,800 --> 00:18:55,399 Speaker 1: down and John Belushi would not be able to play Japanese. Uh. 368 00:18:55,800 --> 00:18:58,120 Speaker 1: Garret Morris Julry News for the heart of hearing would 369 00:18:58,119 --> 00:19:01,320 Speaker 1: have been making fun of a handicap. So it's it's 370 00:19:01,400 --> 00:19:05,639 Speaker 1: just all values change. And then I always said that 371 00:19:05,880 --> 00:19:10,800 Speaker 1: between the movie Arthur and the movie Arthur to alcoholism 372 00:19:10,920 --> 00:19:14,520 Speaker 1: became a disease and no one wanted to laugh at 373 00:19:14,560 --> 00:19:18,520 Speaker 1: drunks anymore, whereas for two years they had left the drunk. 374 00:19:19,359 --> 00:19:24,680 Speaker 1: That's David Rubinstein speaking with SNLS Lauren Michael's David Rubinstein, 375 00:19:24,760 --> 00:19:28,120 Speaker 1: Carloud Group, co founder and host of Peer to Peer Conversations. 376 00:19:28,600 --> 00:19:32,320 Speaker 1: You can hear that tonight on Bloomberg Radio at five pm. David, 377 00:19:32,320 --> 00:19:35,920 Speaker 1: thanks so much for joining us. Just a fascinating discussion 378 00:19:35,960 --> 00:19:38,520 Speaker 1: I'm sure you had uh with Lauren. Could you just 379 00:19:38,560 --> 00:19:42,919 Speaker 1: give us a key takeaways that you had from your conversation? Well, 380 00:19:43,000 --> 00:19:46,520 Speaker 1: Lauren is somebody who has I've been running this show 381 00:19:46,560 --> 00:19:49,840 Speaker 1: more or last for forty years. Um he started and 382 00:19:49,920 --> 00:19:51,920 Speaker 1: for five years he ran it, and then he took 383 00:19:51,960 --> 00:19:55,000 Speaker 1: five years five years off to do some producing of 384 00:19:55,080 --> 00:19:57,959 Speaker 1: movies in Hollywood and so forth, and other TV shows, 385 00:19:58,160 --> 00:19:59,720 Speaker 1: and then he came back. So he's been running it 386 00:19:59,800 --> 00:20:02,320 Speaker 1: for forty years. Think about how many people have been 387 00:20:02,359 --> 00:20:05,000 Speaker 1: at the top of their profession for forty years. But 388 00:20:05,119 --> 00:20:08,119 Speaker 1: this show has sustained itself because he's been able to 389 00:20:08,160 --> 00:20:10,840 Speaker 1: figure out what makes people laugh and to evolve that. 390 00:20:10,920 --> 00:20:13,160 Speaker 1: As he said, it's different than it was years ago. 391 00:20:13,520 --> 00:20:16,399 Speaker 1: But he's a very smart person, very much has his 392 00:20:16,560 --> 00:20:18,800 Speaker 1: finger on the pulse of what's funny and what is 393 00:20:18,800 --> 00:20:21,679 Speaker 1: not funny. And obviously his political humor recently has got 394 00:20:21,720 --> 00:20:24,920 Speaker 1: an enormous amount of attention talking about the enormous amount 395 00:20:24,920 --> 00:20:27,480 Speaker 1: of tension around political humor and the things that you 396 00:20:27,480 --> 00:20:29,760 Speaker 1: could say in the seventies versus not today, by the way, 397 00:20:29,800 --> 00:20:34,720 Speaker 1: that was hysterical. I'm wondering how their approach to political 398 00:20:34,760 --> 00:20:36,920 Speaker 1: news has shifted. I mean, other things that they can 399 00:20:36,960 --> 00:20:39,119 Speaker 1: do now or can't do now, that they used to 400 00:20:39,160 --> 00:20:42,040 Speaker 1: be able to do. There. I think that they are 401 00:20:42,080 --> 00:20:46,000 Speaker 1: willing to take on both sides, Democrats, Republicans, everybody, and 402 00:20:46,080 --> 00:20:47,960 Speaker 1: they think they feel they can make fun of virtually 403 00:20:47,960 --> 00:20:52,639 Speaker 1: anybody in politics, because politicians probably have a lower public 404 00:20:52,760 --> 00:20:55,159 Speaker 1: esteem than they did many years ago, and therefore I 405 00:20:55,160 --> 00:20:58,640 Speaker 1: don't think they upset that many people when they attack politicians. 406 00:20:58,840 --> 00:21:01,560 Speaker 1: But obviously you're the one being attacked, or you're the 407 00:21:01,600 --> 00:21:03,960 Speaker 1: supporters of the one being attacked, yes you're not happy. 408 00:21:04,240 --> 00:21:07,199 Speaker 1: But generally the political humor is what they find is 409 00:21:07,240 --> 00:21:09,280 Speaker 1: the most appealing thing that they put on the air. 410 00:21:09,640 --> 00:21:11,159 Speaker 1: So I think they're going to continue to do that. 411 00:21:11,200 --> 00:21:15,320 Speaker 1: And obviously many politicians are pretty good, uh, examples of 412 00:21:15,400 --> 00:21:18,280 Speaker 1: people that you can make fun of. So, David, one 413 00:21:18,280 --> 00:21:20,000 Speaker 1: of the things you mentioned, or one of the things 414 00:21:20,040 --> 00:21:22,480 Speaker 1: I find so fascinating about Lord Michaels is that he's 415 00:21:22,520 --> 00:21:24,960 Speaker 1: been at the top of his game for so long. 416 00:21:25,040 --> 00:21:27,720 Speaker 1: It's you rarely see that in any walk off life, 417 00:21:27,560 --> 00:21:30,040 Speaker 1: much less show business. Did you get a sense of 418 00:21:30,080 --> 00:21:34,960 Speaker 1: what continues to drive Lauren Michaels. Well, he's driven by 419 00:21:35,400 --> 00:21:38,399 Speaker 1: I think the fact that he is a perfectionist. He 420 00:21:38,560 --> 00:21:41,119 Speaker 1: likes being the top of the profession. He let me 421 00:21:41,160 --> 00:21:43,920 Speaker 1: come to one of the shows that he was producing. 422 00:21:43,960 --> 00:21:47,359 Speaker 1: I saw he's deeply involved in every detail he's on 423 00:21:47,400 --> 00:21:50,200 Speaker 1: the set. He goes through every script, he goes through 424 00:21:50,240 --> 00:21:53,720 Speaker 1: all the rehearsals, so he is pretty much a hands 425 00:21:53,720 --> 00:21:56,840 Speaker 1: on person very often for forty years. Some people tend 426 00:21:56,840 --> 00:21:59,560 Speaker 1: to kick themselves upstairs a bit and aren't has involved 427 00:21:59,560 --> 00:22:01,639 Speaker 1: in the DTL, but he's involved in everything, and I 428 00:22:01,680 --> 00:22:03,920 Speaker 1: think that's one of the keys to his success. What 429 00:22:03,960 --> 00:22:07,840 Speaker 1: was the most surprising thing that you learned from the interview? Well, 430 00:22:07,880 --> 00:22:10,280 Speaker 1: the most surprising thing, I guess is that um he 431 00:22:10,680 --> 00:22:14,040 Speaker 1: um doesn't really want to say what who's the funniest 432 00:22:14,080 --> 00:22:16,480 Speaker 1: person of all time? Or what was the funniest show. 433 00:22:16,480 --> 00:22:20,119 Speaker 1: He's very reluctant to the point out one show versus another, 434 00:22:20,160 --> 00:22:23,920 Speaker 1: one comedian versus another, So um he wouldn't say Eddie 435 00:22:23,960 --> 00:22:27,199 Speaker 1: Murphy's funnier than the Gilda Radner or so forth. Um. 436 00:22:27,240 --> 00:22:29,040 Speaker 1: He obviously has his views on that, but he didn't 437 00:22:29,080 --> 00:22:31,000 Speaker 1: really want to talk about that, in part because I 438 00:22:31,040 --> 00:22:34,080 Speaker 1: don't think he really wants to pick between the various comedians. 439 00:22:34,080 --> 00:22:36,119 Speaker 1: If you look at the comedians he's had over the 440 00:22:36,160 --> 00:22:39,160 Speaker 1: forty years, it's it's virtually anybody who's been funny over 441 00:22:39,160 --> 00:22:42,160 Speaker 1: the last forty years in television or in movies has 442 00:22:42,160 --> 00:22:44,000 Speaker 1: been on that show. And I guess he does as 443 00:22:44,000 --> 00:22:45,840 Speaker 1: one of the like saying which of your children do 444 00:22:45,880 --> 00:22:47,879 Speaker 1: you like the most? And nobody wants to answer that question. 445 00:22:48,000 --> 00:22:50,439 Speaker 1: Nobody wants to answer that question. Have you watched S 446 00:22:50,480 --> 00:22:53,520 Speaker 1: and L for a long time? Personally, I've watched it 447 00:22:53,560 --> 00:22:55,920 Speaker 1: for a long time and I'm glad they haven't made 448 00:22:55,920 --> 00:23:00,320 Speaker 1: fun of me yet, but I suspent something point you will. So, David, 449 00:23:00,359 --> 00:23:03,120 Speaker 1: going forward, what do you think Lauren Michael's next five 450 00:23:03,200 --> 00:23:05,240 Speaker 1: to ten years? I don't want to think forty years. 451 00:23:05,240 --> 00:23:08,080 Speaker 1: But is he plan on doing this for the foreseeable future? 452 00:23:09,600 --> 00:23:11,960 Speaker 1: Like many people at the top of the profession who've 453 00:23:11,960 --> 00:23:13,840 Speaker 1: done it for a while, they are reluctant to say 454 00:23:13,840 --> 00:23:16,080 Speaker 1: when they're going to step down, because when you say that, 455 00:23:16,320 --> 00:23:18,560 Speaker 1: you've become a bit of a lame duck. Um. He 456 00:23:18,720 --> 00:23:22,160 Speaker 1: is in pretty good health mentally physically, it's clear he 457 00:23:22,200 --> 00:23:24,359 Speaker 1: has a great work quotition, So I don't see him 458 00:23:24,400 --> 00:23:26,760 Speaker 1: slowly down any time soon. And in this eight day 459 00:23:26,760 --> 00:23:28,880 Speaker 1: and age, you can work to your eight I think 460 00:23:28,880 --> 00:23:31,760 Speaker 1: he's in mid seventies now, you can work your eighties 461 00:23:31,760 --> 00:23:33,560 Speaker 1: and people are still saying, okay, if you can do 462 00:23:33,560 --> 00:23:35,520 Speaker 1: the job, fine, So I think he'll be there for 463 00:23:35,600 --> 00:23:37,800 Speaker 1: quite some time, and the ratings are good, so why 464 00:23:37,800 --> 00:23:39,320 Speaker 1: would anybody want to get rid of them? If you're 465 00:23:39,320 --> 00:23:42,000 Speaker 1: a Comcast, which is the owner of NBC. That's right, 466 00:23:42,080 --> 00:23:44,480 Speaker 1: the ratings are good. That's always the bottom line. David Rubinstein, 467 00:23:44,520 --> 00:23:47,960 Speaker 1: thank you so much for joining us. David Rubinstein, Carlisle Group, 468 00:23:48,000 --> 00:23:51,000 Speaker 1: co founder and host of Peer to Peer Conversations. You 469 00:23:51,000 --> 00:23:54,400 Speaker 1: can hear that tonight on Bloomberg Radio at five pm 470 00:23:54,560 --> 00:24:07,640 Speaker 1: Wall Street Time. Well, one of the things that big 471 00:24:07,680 --> 00:24:10,960 Speaker 1: technology has to deal with, I think, which is new 472 00:24:11,080 --> 00:24:17,760 Speaker 1: for Silicon Valley is regulatory oversight by US politicians and regulators. Historically, 473 00:24:18,080 --> 00:24:20,640 Speaker 1: Washington has taken a fairly light touch to Silicon Valley, 474 00:24:20,680 --> 00:24:23,080 Speaker 1: but that may be changing. To get a sense of 475 00:24:23,080 --> 00:24:25,600 Speaker 1: how this might develop, we welcome our good friends Shira Overday, 476 00:24:25,720 --> 00:24:29,800 Speaker 1: Bloomberg Opinion Colmas covering all things technology. She joins us 477 00:24:29,840 --> 00:24:32,720 Speaker 1: here in our Bloomberg Interactive Broker studio. Sure, thanks so 478 00:24:32,800 --> 00:24:36,280 Speaker 1: much for joining us. It seems like things have changed 479 00:24:36,320 --> 00:24:38,359 Speaker 1: a little bit. The rhetoric coming out of Washington has 480 00:24:38,440 --> 00:24:40,000 Speaker 1: changed a little bit as it relates to big tech. 481 00:24:40,040 --> 00:24:41,960 Speaker 1: What do you make of it? I think that's a 482 00:24:42,119 --> 00:24:44,960 Speaker 1: correct assessment. I mean, particularly the last couple of years 483 00:24:45,560 --> 00:24:48,240 Speaker 1: there has been I think a little bit more focus 484 00:24:48,600 --> 00:24:52,280 Speaker 1: among the public and people like me and lawmakers about 485 00:24:52,320 --> 00:24:56,000 Speaker 1: some of the downsides of technology. Right that the focus, 486 00:24:56,040 --> 00:24:58,320 Speaker 1: I think in the prior decade had been about all 487 00:24:58,359 --> 00:25:01,359 Speaker 1: these great things that technolog G had brought us, you know, 488 00:25:01,440 --> 00:25:07,040 Speaker 1: iPhones and breaking down barriers between people and and kind 489 00:25:07,040 --> 00:25:09,879 Speaker 1: of removing the power of distribution from the hands of 490 00:25:09,920 --> 00:25:12,400 Speaker 1: the elites. And those things are all true, but we're 491 00:25:12,400 --> 00:25:15,159 Speaker 1: also thinking about G there were some bad things that 492 00:25:15,200 --> 00:25:17,680 Speaker 1: went along with that, and I think now you're seeing 493 00:25:18,000 --> 00:25:21,399 Speaker 1: that big technology companies, particularly in Washington, which is I 494 00:25:21,440 --> 00:25:24,640 Speaker 1: think new for Silicon Valley, big tech companies are now 495 00:25:24,720 --> 00:25:27,480 Speaker 1: this punching bag. It's literally the only bipartisan issue in 496 00:25:27,480 --> 00:25:31,679 Speaker 1: Washington is to criticize big technology companies for um for 497 00:25:31,800 --> 00:25:35,880 Speaker 1: their downsides. Again, I think both real and somewhat imagined. 498 00:25:35,920 --> 00:25:39,600 Speaker 1: In some cases, big tech has become a verbal punching 499 00:25:39,600 --> 00:25:44,480 Speaker 1: bag as to actual action. Perhaps they're missing with their 500 00:25:44,520 --> 00:25:48,399 Speaker 1: punches because so far, certainly there doesn't seem to be 501 00:25:48,480 --> 00:25:51,000 Speaker 1: much of an impact on share price, it doesn't seem 502 00:25:51,000 --> 00:25:52,960 Speaker 1: to be much of an impact on the bottom line, 503 00:25:53,359 --> 00:25:55,920 Speaker 1: and frankly, lobbying costs may have ticked up a bit 504 00:25:56,200 --> 00:25:58,879 Speaker 1: on part of big tech because it has hit a record, 505 00:25:59,080 --> 00:26:01,600 Speaker 1: but other than that, it seems rather ineffectual. Well, this 506 00:26:01,760 --> 00:26:05,440 Speaker 1: US Department of Justice inquiry, which they announced on Tuesday, 507 00:26:05,800 --> 00:26:09,199 Speaker 1: be somewhat different. So I think it's easy to be 508 00:26:09,280 --> 00:26:14,520 Speaker 1: cynical and I am to write about the speed of 509 00:26:14,640 --> 00:26:19,439 Speaker 1: Washington relative to rhetoric. But I do think that this 510 00:26:19,560 --> 00:26:22,560 Speaker 1: kind of broad tech reckoning it is having an impact. So, 511 00:26:23,520 --> 00:26:27,840 Speaker 1: just to pull out a couple of examples, Amazon last 512 00:26:27,920 --> 00:26:30,800 Speaker 1: year announced that it was increasing the minimum wage for 513 00:26:30,840 --> 00:26:34,159 Speaker 1: all of its workers fifteen dollars an hour. And you 514 00:26:34,160 --> 00:26:36,000 Speaker 1: know that may have been a business decision, right, the 515 00:26:36,080 --> 00:26:38,120 Speaker 1: labor market is tight, and that may have been kind 516 00:26:38,119 --> 00:26:41,120 Speaker 1: of a decision to attract a better caliber of workers 517 00:26:41,119 --> 00:26:44,040 Speaker 1: on Amazon's part, But it also came after the company 518 00:26:44,040 --> 00:26:49,040 Speaker 1: faced high degree of criticism, particularly from Bernie Sanders, the 519 00:26:49,240 --> 00:26:54,560 Speaker 1: now Democratic presidential candidate, for working conditions, particularly of the 520 00:26:54,600 --> 00:26:57,040 Speaker 1: warehouse workers, people who work in the warehouses. Right, So 521 00:26:57,119 --> 00:27:01,320 Speaker 1: that's a case where um, political red rick probably did 522 00:27:01,320 --> 00:27:06,679 Speaker 1: have an impact. Um, if you look at Facebook's earnings yesterday, Again, 523 00:27:07,040 --> 00:27:09,600 Speaker 1: if you look at Facebook's top line, you can say, well, 524 00:27:09,680 --> 00:27:12,359 Speaker 1: the FTC find them five billion dollars and it didn't matter. 525 00:27:12,560 --> 00:27:15,960 Speaker 1: There's been all these privacy headaches and scandals and it 526 00:27:16,000 --> 00:27:19,800 Speaker 1: didn't matter. But Facebook is talking about a sort of 527 00:27:19,880 --> 00:27:23,880 Speaker 1: step down in growth over time, including late this year 528 00:27:24,480 --> 00:27:27,960 Speaker 1: and into next year, and it blamed in part some 529 00:27:28,119 --> 00:27:32,840 Speaker 1: of these privacy changes that either it's implementing because of 530 00:27:32,840 --> 00:27:35,879 Speaker 1: all these scandals or that are being imposed on it 531 00:27:35,920 --> 00:27:39,400 Speaker 1: from the outside. Like in Europe there's been last year 532 00:27:39,440 --> 00:27:43,080 Speaker 1: they implemented a fairly strict data privacy law, and Facebook 533 00:27:43,119 --> 00:27:46,000 Speaker 1: has said that is having an impact on our ability 534 00:27:46,040 --> 00:27:51,600 Speaker 1: to highly target these ads based on our human surveillance machine, 535 00:27:51,920 --> 00:27:54,639 Speaker 1: and that's resulting in kind of a slower rate of 536 00:27:54,720 --> 00:27:58,120 Speaker 1: revenue growth. So I think those are some examples where yeah, 537 00:27:58,119 --> 00:28:00,000 Speaker 1: there's a lot of rhetoric and a lot of below 538 00:28:00,000 --> 00:28:03,520 Speaker 1: any um in political capitals all over the world, but 539 00:28:03,720 --> 00:28:07,720 Speaker 1: some of these privacy and broad tech reckonings are actually 540 00:28:07,720 --> 00:28:11,000 Speaker 1: having an impact on business. So when we talk about 541 00:28:11,040 --> 00:28:15,399 Speaker 1: big tech, we think about Google, Amazon, Facebook, Apple, Is 542 00:28:15,440 --> 00:28:19,000 Speaker 1: there a sense that one is more at risk than 543 00:28:19,080 --> 00:28:21,680 Speaker 1: the others others? I mean, you mentioned Facebook and that 544 00:28:21,800 --> 00:28:24,719 Speaker 1: seems like one because we're talking about people's privacy and 545 00:28:24,880 --> 00:28:28,040 Speaker 1: their personal communications. Is there a sense that one might 546 00:28:28,080 --> 00:28:29,800 Speaker 1: be more at risk than the other. It's a little 547 00:28:29,840 --> 00:28:33,480 Speaker 1: bit hard to know, because the issue with antitrust investigations 548 00:28:33,840 --> 00:28:36,600 Speaker 1: is that you just they're so unpredictable. You have no 549 00:28:36,680 --> 00:28:38,960 Speaker 1: sense of where they're going to lead. And if you 550 00:28:39,000 --> 00:28:44,240 Speaker 1: give government investigators basically power to dig up every email 551 00:28:44,360 --> 00:28:47,200 Speaker 1: that Mark Zuckerberg and Jeff Bezos has ever have ever sent, 552 00:28:47,880 --> 00:28:51,040 Speaker 1: who knows what they will find. But saying that, I 553 00:28:51,080 --> 00:28:54,800 Speaker 1: think it's generally thought that both Google and Facebook are 554 00:28:54,840 --> 00:28:58,200 Speaker 1: maybe a little bit more exposed than Amazon and Apple 555 00:28:58,840 --> 00:29:03,120 Speaker 1: um in part because of the size and just kind 556 00:29:03,160 --> 00:29:06,840 Speaker 1: of global span of their businesses. And also they're both 557 00:29:06,880 --> 00:29:10,200 Speaker 1: these kind of ad machines that basically have their hooks 558 00:29:10,240 --> 00:29:15,800 Speaker 1: into just about every corner of the Internet economy. So, 559 00:29:15,840 --> 00:29:18,680 Speaker 1: as I mentioned before, lobbying costs on part of big 560 00:29:18,680 --> 00:29:21,600 Speaker 1: tech have reached record levels, not only for big tech 561 00:29:21,640 --> 00:29:24,960 Speaker 1: but just for any industry whatsoever. Certainly trying to make 562 00:29:25,000 --> 00:29:27,400 Speaker 1: their influence felt in Washington, d C. What do they 563 00:29:27,400 --> 00:29:30,920 Speaker 1: want to see? Well, I think they want to influence 564 00:29:31,000 --> 00:29:34,320 Speaker 1: any kind of legislative action, right, So, I mean there's 565 00:29:34,360 --> 00:29:36,680 Speaker 1: another way of phrases is are they conceding there will 566 00:29:36,720 --> 00:29:39,880 Speaker 1: be legislative action, and they're basically going to propose some 567 00:29:39,920 --> 00:29:42,760 Speaker 1: sort of self regulatory mechanism. And if that's the case, 568 00:29:42,880 --> 00:29:46,520 Speaker 1: what is it, Yes, I do that is exactly what 569 00:29:46,560 --> 00:29:50,320 Speaker 1: they want. Like any company, right, the tech companies, they 570 00:29:50,360 --> 00:29:54,200 Speaker 1: realize there is probably going to be both federal and 571 00:29:54,400 --> 00:29:58,080 Speaker 1: state legislation in the United States that impacts their business, 572 00:29:58,080 --> 00:30:00,400 Speaker 1: and so they're trying to have a hand and in 573 00:30:00,400 --> 00:30:05,480 Speaker 1: influencing the outcome of that legislation. So there's privacy legislation 574 00:30:05,840 --> 00:30:09,760 Speaker 1: that's being considered both in Congress and in multiple states. 575 00:30:09,800 --> 00:30:13,480 Speaker 1: California past a what seems like a fairly strict kind 576 00:30:13,480 --> 00:30:19,720 Speaker 1: of online privacy regulation. Recently other states are considering similar things. 577 00:30:19,760 --> 00:30:25,560 Speaker 1: There's all kinds of activity around political election advertisements that 578 00:30:25,680 --> 00:30:30,600 Speaker 1: also affect the big tech companies again these antitrust investigations. 579 00:30:31,160 --> 00:30:34,640 Speaker 1: Congress is also engaged in its own antitrust investigations of 580 00:30:34,640 --> 00:30:37,880 Speaker 1: big tech companies. So on multiple fronts, you see the 581 00:30:37,880 --> 00:30:42,400 Speaker 1: big tech companies again like any giant industry before, at banking, energy, 582 00:30:42,720 --> 00:30:47,000 Speaker 1: they're trying to influence lawmakers and to make sure that 583 00:30:47,080 --> 00:30:50,200 Speaker 1: if there is legislation pass that affects their business, that 584 00:30:50,280 --> 00:30:54,520 Speaker 1: they try to control any downside. We've even heard some 585 00:30:55,200 --> 00:30:58,040 Speaker 1: you know, some of the politicians, probably most likely like 586 00:30:58,400 --> 00:31:02,000 Speaker 1: uh Senator Elizabeth warren't talk about potentially breaking up big tech. 587 00:31:02,760 --> 00:31:06,720 Speaker 1: Is that even remote risk? Do you think I'll go 588 00:31:06,760 --> 00:31:08,560 Speaker 1: back to say, I don't know, because you just don't 589 00:31:08,560 --> 00:31:11,320 Speaker 1: know what happens when these anti trust investigators get involved. 590 00:31:11,360 --> 00:31:16,440 Speaker 1: I think right now that doesn't feel like a serious possibility. 591 00:31:16,480 --> 00:31:20,440 Speaker 1: But we'll see. The nature of investigations is that they're unpredictable. 592 00:31:20,520 --> 00:31:22,600 Speaker 1: You know one thing that strikes me as you're talking. 593 00:31:22,640 --> 00:31:25,200 Speaker 1: I'm thinking, you know, these big tech executives, they have 594 00:31:25,320 --> 00:31:28,360 Speaker 1: to get ahead, both in terms of legislative action, but 595 00:31:28,440 --> 00:31:31,120 Speaker 1: also from a public relations standpoint. They have to come 596 00:31:31,120 --> 00:31:34,160 Speaker 1: out and say privacy is important. We don't want bad 597 00:31:34,240 --> 00:31:38,560 Speaker 1: actors some smaller companies that operate in the tech space 598 00:31:38,640 --> 00:31:41,360 Speaker 1: or using your data for things that are bad. We 599 00:31:41,520 --> 00:31:44,479 Speaker 1: don't hear all the protections that we have. Are you 600 00:31:44,560 --> 00:31:48,040 Speaker 1: expecting statements like that in the earnings and I'm thinking 601 00:31:48,040 --> 00:31:50,720 Speaker 1: Amazon reporting earnings after the bell. Is that something that 602 00:31:50,760 --> 00:31:53,480 Speaker 1: they that you expect them to do, or or that 603 00:31:53,520 --> 00:31:57,080 Speaker 1: they should do. I think the tech companies, you can 604 00:31:57,120 --> 00:32:01,000 Speaker 1: see it. They are now very concerned about their public 605 00:32:01,040 --> 00:32:05,440 Speaker 1: perception and companies. Let's take Apple as an example. They 606 00:32:05,440 --> 00:32:09,760 Speaker 1: have made um kind of data privacy and explicit marketing 607 00:32:09,800 --> 00:32:13,440 Speaker 1: pitch to its customers, saying, you're worried about the safety 608 00:32:13,480 --> 00:32:17,000 Speaker 1: of you and your kids online. We're worried about that too. 609 00:32:17,680 --> 00:32:21,320 Speaker 1: Here ways that we are implementing kind of data privacy 610 00:32:21,520 --> 00:32:26,280 Speaker 1: protections and encryption on our gadgets. Please buy them. And 611 00:32:26,320 --> 00:32:28,440 Speaker 1: I think you can go on down the list and 612 00:32:28,800 --> 00:32:31,240 Speaker 1: of all of these tech companies, they realize they need 613 00:32:31,280 --> 00:32:34,960 Speaker 1: to project the image to their customers and potential customers 614 00:32:34,960 --> 00:32:38,719 Speaker 1: and advertisers and other business allies that they are taking 615 00:32:38,840 --> 00:32:43,240 Speaker 1: seriously concerns that these companies are too big, hurting the economy, 616 00:32:43,320 --> 00:32:48,160 Speaker 1: hurting workers, hurting competition, hurting privacy. They know this, and 617 00:32:48,360 --> 00:32:52,040 Speaker 1: so yeah, they are engaged in kind of image burnishing efforts. 618 00:32:52,840 --> 00:32:56,240 Speaker 1: Sure overday, Thank you. I know you've been crazy busy 619 00:32:56,400 --> 00:32:59,480 Speaker 1: and we always love getting our insights as we do 620 00:32:59,680 --> 00:33:02,400 Speaker 1: also reading your columns. You can find them on the 621 00:33:03,000 --> 00:33:06,200 Speaker 1: on the terminal O P I N go, or you 622 00:33:06,240 --> 00:33:10,280 Speaker 1: can go online Bloomberg dot com, slash Opinion. Sharah Oviday 623 00:33:10,400 --> 00:33:14,240 Speaker 1: is a technology columnist and she is basically glued to 624 00:33:14,360 --> 00:33:16,520 Speaker 1: her computer. It actually just came with her and it's 625 00:33:16,520 --> 00:33:18,800 Speaker 1: sort of stuck to her back as she writes her 626 00:33:19,440 --> 00:33:23,160 Speaker 1: column of the week. But definitely interesting to say. What's 627 00:33:23,160 --> 00:33:29,800 Speaker 1: gonna happen with the Amazon ear next? Thanks for listening 628 00:33:29,840 --> 00:33:34,400 Speaker 1: to the Bloomberg Surveillance Podcast. Subscribe and listen to interviews 629 00:33:34,440 --> 00:33:39,680 Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. 630 00:33:40,240 --> 00:33:43,560 Speaker 1: I'm on Twitter at Tom Keane before the podcast. You 631 00:33:43,600 --> 00:34:00,240 Speaker 1: can always catch us worldwide. I'm Bloomberg Radio.