1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Farrell and Lisa Brownowitz Jaily we bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com 5 00:00:23,920 --> 00:00:30,760 Speaker 1: and of course on the Bloomberg Termament. We continue our discussion, folks, 6 00:00:30,840 --> 00:00:33,720 Speaker 1: John Farrell, Lisa bramwa to myself and now is a 7 00:00:33,800 --> 00:00:36,960 Speaker 1: conversation that could be two hours long, because there is 8 00:00:37,080 --> 00:00:40,720 Speaker 1: no one with a family more qualified on Russia and 9 00:00:40,760 --> 00:00:44,239 Speaker 1: the fears of Mr Putin than William Browder. Yes, he 10 00:00:44,360 --> 00:00:48,479 Speaker 1: is founder, chief executive officer of Hermitage Capital Management, But 11 00:00:48,600 --> 00:00:52,120 Speaker 1: what you don't know is his family's heritage back to 12 00:00:52,520 --> 00:00:57,320 Speaker 1: the height of mathematics in America and before that, courage 13 00:00:57,800 --> 00:01:02,720 Speaker 1: on continental Europe, Central Europe and the bravery of fighting 14 00:01:02,800 --> 00:01:06,119 Speaker 1: off Tyranny. Bill Browder honored to have you with Bloomberg 15 00:01:06,160 --> 00:01:10,679 Speaker 1: Surveillance today. What would Earl Browders say? What would he 16 00:01:11,000 --> 00:01:17,039 Speaker 1: say long ago to standing up to Vladimir Putin? Well, so, 17 00:01:17,319 --> 00:01:19,560 Speaker 1: just just to make it clear, so my grandfather was 18 00:01:19,600 --> 00:01:26,800 Speaker 1: the General secretary of the American Communist Party, and at 19 00:01:26,800 --> 00:01:30,479 Speaker 1: a time when when Russia and America were at war 20 00:01:30,600 --> 00:01:34,200 Speaker 1: with the Nazis the moment that the war ended, um 21 00:01:34,319 --> 00:01:37,480 Speaker 1: Uh Stalin kicked my grandfather out of the Communist Party 22 00:01:37,520 --> 00:01:39,520 Speaker 1: for being too much of a capitalist and then started 23 00:01:39,560 --> 00:01:44,520 Speaker 1: murdering his followers all over all over Eastern Europe and 24 00:01:44,640 --> 00:01:47,119 Speaker 1: other places. And and there's a famous car we are 25 00:01:47,160 --> 00:01:49,040 Speaker 1: we returned. I don't mean to interrupt, Bill, but this 26 00:01:49,120 --> 00:01:53,240 Speaker 1: is so so important with your perspective. Are we returning 27 00:01:53,320 --> 00:01:57,080 Speaker 1: to that tyranny? Um There's there's no question that we're 28 00:01:57,120 --> 00:02:01,000 Speaker 1: returning to that year. And Vladimir Putin um is is 29 00:02:01,000 --> 00:02:06,360 Speaker 1: a nineteen thirties style European dictator who is doing exactly 30 00:02:06,560 --> 00:02:08,400 Speaker 1: I wouldn't compare him so much to Stalin as I 31 00:02:08,400 --> 00:02:10,880 Speaker 1: would compare him to Hitler. Um what we have going 32 00:02:10,919 --> 00:02:13,160 Speaker 1: on right in this minute, as we as we speak 33 00:02:13,680 --> 00:02:17,480 Speaker 1: um is is the equivalent of when Adolf Hitler was 34 00:02:17,560 --> 00:02:21,959 Speaker 1: taking a chunk of of Czechoslovakia and everybody was trying 35 00:02:21,960 --> 00:02:23,520 Speaker 1: to figure out what to do, and first they tried 36 00:02:23,520 --> 00:02:25,600 Speaker 1: to appease him and it didn't work, and then we 37 00:02:25,680 --> 00:02:28,639 Speaker 1: ended up with with the World War two. Glandimer Putin 38 00:02:28,840 --> 00:02:32,760 Speaker 1: is starting with Ukraine. And make no no mistake about it, 39 00:02:32,880 --> 00:02:35,240 Speaker 1: this is not the end goal. He he has gotten 40 00:02:35,280 --> 00:02:37,960 Speaker 1: bigger things in his sight. He wants, he wants to 41 00:02:38,040 --> 00:02:41,959 Speaker 1: dominate the European continent, and he will move further. Bill, 42 00:02:42,000 --> 00:02:44,960 Speaker 1: are you surprised that the US hasn't joined the reporting, 43 00:02:44,960 --> 00:02:47,800 Speaker 1: at least from the Financial Times saying the EU is 44 00:02:47,840 --> 00:02:53,239 Speaker 1: preparing to freeze the assets of Putin and Lavrov Um. Well, 45 00:02:53,600 --> 00:02:55,120 Speaker 1: first of all, i should say that I'm surprised that 46 00:02:55,160 --> 00:02:57,040 Speaker 1: europe has taken such a step. I mean, I've spent 47 00:02:57,080 --> 00:03:00,000 Speaker 1: the last ten years in a conflict with Gladom Reputin 48 00:03:00,400 --> 00:03:02,720 Speaker 1: trying to get the Europeans to do the bare minimum 49 00:03:02,720 --> 00:03:05,840 Speaker 1: things in terms of human rights abuse so on in Russia, 50 00:03:06,120 --> 00:03:09,840 Speaker 1: and the European Union has always been on the back foot, 51 00:03:09,960 --> 00:03:12,160 Speaker 1: never doing the right thing in the in the US 52 00:03:12,200 --> 00:03:16,000 Speaker 1: has always been the the country taking the lead on this, 53 00:03:16,440 --> 00:03:18,480 Speaker 1: and so I'm very surprised that the European unions done this. 54 00:03:18,560 --> 00:03:21,040 Speaker 1: I'm very happy that the European Union has done this. 55 00:03:21,200 --> 00:03:24,600 Speaker 1: If it's for real, um and uh, and I'm sure 56 00:03:24,639 --> 00:03:28,240 Speaker 1: that the US will will will quickly uh come into 57 00:03:28,240 --> 00:03:30,600 Speaker 1: conformity with it. I don't think that it's uh, it's 58 00:03:30,639 --> 00:03:33,680 Speaker 1: just if you were to look around. Uh, you know, 59 00:03:33,720 --> 00:03:36,240 Speaker 1: two weeks ago, the Germans were not even ready to 60 00:03:36,280 --> 00:03:39,920 Speaker 1: supply any military equipment to the Ukrainians other than five 61 00:03:39,920 --> 00:03:42,520 Speaker 1: thousand helmets, and now they're saying Vladimir Putin it's a 62 00:03:42,520 --> 00:03:45,760 Speaker 1: pretty big staff bill. Given your intimate experience with the 63 00:03:45,760 --> 00:03:49,640 Speaker 1: financial system of Russia and the subsequent problems that can 64 00:03:49,760 --> 00:03:52,680 Speaker 1: emerge there, what's your view on how effective some of 65 00:03:52,720 --> 00:03:55,720 Speaker 1: these sanctions, some of these asset phreezes could be at 66 00:03:55,720 --> 00:03:57,840 Speaker 1: a time when so far it seems like they have 67 00:03:58,040 --> 00:04:02,000 Speaker 1: not caused Vladimir Putin are retreat in any way. Well, 68 00:04:02,000 --> 00:04:04,560 Speaker 1: so far they haven't sanctioned Vladimir Putin. I mean, so, 69 00:04:05,240 --> 00:04:06,960 Speaker 1: first of all, it's very important that that when they 70 00:04:07,000 --> 00:04:11,160 Speaker 1: say they're sanctioning Gladim Reputin, they're sanctioning also his trustees. 71 00:04:11,320 --> 00:04:14,520 Speaker 1: Because Gladim Reputin, it's it's very symbolic to say we're 72 00:04:14,520 --> 00:04:18,080 Speaker 1: sanctioned Vladim Reputin. He doesn't have He's an extremely rich man. 73 00:04:18,120 --> 00:04:20,520 Speaker 1: He's worth i would say more than two billion dollars, 74 00:04:20,520 --> 00:04:22,280 Speaker 1: but none of that money is held in his own name, 75 00:04:22,839 --> 00:04:24,800 Speaker 1: is held in the name of people he trusts on 76 00:04:24,880 --> 00:04:28,359 Speaker 1: handshake agreements. I called him all the Garth trustees. And 77 00:04:28,360 --> 00:04:31,160 Speaker 1: so unless you're to sanction the top fifty aligars at 78 00:04:31,160 --> 00:04:33,120 Speaker 1: the same time, you're not. I'm actually going to get 79 00:04:33,160 --> 00:04:35,640 Speaker 1: his money. However, if you do, if you were to 80 00:04:35,680 --> 00:04:38,920 Speaker 1: sanction those people, um, you're you're hitting him exactly where 81 00:04:38,920 --> 00:04:41,320 Speaker 1: it counts. Putin, he doesn't care if you sanction a 82 00:04:41,400 --> 00:04:43,720 Speaker 1: Russian bank or if you do something to the oil industry. 83 00:04:44,000 --> 00:04:46,320 Speaker 1: He cares about his own money. And if you actually 84 00:04:46,360 --> 00:04:48,680 Speaker 1: get his money, then then then he's he's going to 85 00:04:48,760 --> 00:04:51,599 Speaker 1: stop and pay attention, because what you know, he's he's spent. 86 00:04:51,760 --> 00:04:54,640 Speaker 1: He's worked very hard for the last twenty years, torturing, killing, 87 00:04:54,720 --> 00:04:57,240 Speaker 1: hospit taking hostage people and to try to get all 88 00:04:57,279 --> 00:04:59,880 Speaker 1: their money, um, and to have all the money taken 89 00:04:59,880 --> 00:05:02,520 Speaker 1: a way. That's twenty years of hard work for a dictator. 90 00:05:02,600 --> 00:05:04,880 Speaker 1: And so that would work, that would have a real 91 00:05:05,000 --> 00:05:07,840 Speaker 1: and serious and dramatic effect. Bill. I want to get 92 00:05:07,880 --> 00:05:09,440 Speaker 1: to headlines with John Ferrell and I want you to 93 00:05:09,480 --> 00:05:13,400 Speaker 1: stay with us. But very importantly, your hermatage Capital is 94 00:05:13,440 --> 00:05:16,760 Speaker 1: based off St. Petersburg and one of the glorious museums 95 00:05:16,760 --> 00:05:20,159 Speaker 1: of the world. That's two hundred and fifty miles from Estonia. 96 00:05:20,560 --> 00:05:23,360 Speaker 1: At what risks are the Baltic states based on your 97 00:05:23,400 --> 00:05:29,560 Speaker 1: experience of Russia, UM, well so in my estimation. So 98 00:05:29,640 --> 00:05:33,920 Speaker 1: after Putin is done with Ukraine, UM, assuming he gets 99 00:05:33,960 --> 00:05:37,600 Speaker 1: done with Ukraine, and that's not a given. The Ukrainians 100 00:05:37,600 --> 00:05:40,760 Speaker 1: are fighting like Allen and and actually having some success 101 00:05:40,760 --> 00:05:44,279 Speaker 1: at the moment. But assuming he's done with Ukraine, UM, 102 00:05:44,400 --> 00:05:47,080 Speaker 1: then his next goal is going to be to test 103 00:05:47,160 --> 00:05:50,160 Speaker 1: the resolve of the United States and many countries in 104 00:05:50,200 --> 00:05:53,440 Speaker 1: the EU to defend the Baltics. We we have that 105 00:05:53,560 --> 00:05:56,920 Speaker 1: we're all members of NATO. It's NATO is a one 106 00:05:57,000 --> 00:06:01,120 Speaker 1: for all, all for one military defense organization and and 107 00:06:01,640 --> 00:06:04,880 Speaker 1: gladi Reprutin in his mind doesn't believe that we will 108 00:06:04,920 --> 00:06:09,560 Speaker 1: all come and defend Estonia or Lithuania. He doesn't believe 109 00:06:09,600 --> 00:06:11,440 Speaker 1: that America want to go to war with Russia to 110 00:06:11,480 --> 00:06:13,919 Speaker 1: defend the country most people have never heard of. But 111 00:06:14,000 --> 00:06:16,560 Speaker 1: I would love your reaction to these headlines in real time, 112 00:06:16,600 --> 00:06:18,680 Speaker 1: so allow me to bring them to you. As you know, 113 00:06:18,680 --> 00:06:20,920 Speaker 1: a little bit earlier this morning, there were talks between 114 00:06:21,240 --> 00:06:24,320 Speaker 1: the Russian leader and the Chinese leader. According to State TV, 115 00:06:24,440 --> 00:06:28,320 Speaker 1: the Chinese urged Russia and Ukraine to negotiate to address problems. 116 00:06:28,480 --> 00:06:30,880 Speaker 1: We just had a headline moments ago. Let me read 117 00:06:30,920 --> 00:06:32,560 Speaker 1: that out for you and then I'd love your reaction. 118 00:06:33,000 --> 00:06:35,880 Speaker 1: Russia is ready to send a delegation to Minsk for 119 00:06:36,040 --> 00:06:39,240 Speaker 1: Ukraine talks. This according to Winter Facts. They're ready to 120 00:06:39,279 --> 00:06:43,919 Speaker 1: send their defense minister, foreign minister for delegation for talks. 121 00:06:43,920 --> 00:06:47,080 Speaker 1: This according to inter Facts. But just as you react 122 00:06:47,080 --> 00:06:49,120 Speaker 1: to that, what is your first reaction? What does that mean? 123 00:06:49,120 --> 00:06:51,599 Speaker 1: How would you interpret that kind of report? The Chinese 124 00:06:51,600 --> 00:06:53,920 Speaker 1: were spoken to the Russians. We're getting a headline now 125 00:06:53,960 --> 00:06:56,440 Speaker 1: from Into Facts they're ready for talks. I'm thinking about 126 00:06:56,480 --> 00:06:58,680 Speaker 1: what their objectives are at the moment, how the Ukrainians 127 00:06:58,720 --> 00:07:02,159 Speaker 1: might receive a statement like what are you thinking about? Well? 128 00:07:02,200 --> 00:07:04,280 Speaker 1: On one hand, we could say, wow, good news, Okay, 129 00:07:04,680 --> 00:07:07,560 Speaker 1: there's talks now, um, But but the reality is, and 130 00:07:07,600 --> 00:07:10,520 Speaker 1: I've been involved in all sorts of ugly conflicts and 131 00:07:10,560 --> 00:07:14,360 Speaker 1: negotiations with the Russians. They stick this stuff out there 132 00:07:14,400 --> 00:07:16,120 Speaker 1: to try to give a little bit of hope. You 133 00:07:16,280 --> 00:07:19,120 Speaker 1: remember a couple of weeks ago they said we're we're 134 00:07:19,200 --> 00:07:22,120 Speaker 1: we're withdrawing our troops in the border. And remember that 135 00:07:22,120 --> 00:07:24,920 Speaker 1: that bunch of pictures of a few tanks going back, 136 00:07:25,160 --> 00:07:27,040 Speaker 1: and everyone that the markets went up. Everyone reads the 137 00:07:27,080 --> 00:07:29,600 Speaker 1: side of relief and it meant nothing. The Russians can 138 00:07:29,640 --> 00:07:32,080 Speaker 1: do talks. They should have been doing talks all along. 139 00:07:32,400 --> 00:07:36,280 Speaker 1: Um I I wouldn't. I would put like a two 140 00:07:36,280 --> 00:07:38,600 Speaker 1: percent probability that this leads to the end of the 141 00:07:38,680 --> 00:07:43,400 Speaker 1: conflict in any It's it's pure theater in my mind, 142 00:07:43,520 --> 00:07:46,200 Speaker 1: but you know maybe I I'd love to be proven wrong. Well, 143 00:07:46,240 --> 00:07:49,120 Speaker 1: this market is responding to that theater. Not a big move, sir, 144 00:07:49,200 --> 00:07:51,120 Speaker 1: But Tom, we've seen in a move of about a 145 00:07:51,240 --> 00:07:53,000 Speaker 1: third of one percent, a quarter of one percent into 146 00:07:53,040 --> 00:07:56,520 Speaker 1: positive territory on the SMP looking at Tenure Bundo. It's 147 00:07:56,520 --> 00:07:58,360 Speaker 1: now with the high set a session up five faces 148 00:07:58,360 --> 00:08:00,920 Speaker 1: points to about positive and t two off the back 149 00:08:00,920 --> 00:08:02,800 Speaker 1: of the headline from into facts Tom that Russia is 150 00:08:02,800 --> 00:08:06,000 Speaker 1: ready to send a delegation to Minsk for Ukraine silks. 151 00:08:06,120 --> 00:08:08,320 Speaker 1: Some of the haven ratio is doing well as well. 152 00:08:08,400 --> 00:08:10,840 Speaker 1: Swiss Frank a little bit weaker. Bill Brodder and the 153 00:08:10,920 --> 00:08:14,840 Speaker 1: markets be a tool against Vladimir Putin. The markets in 154 00:08:14,880 --> 00:08:18,080 Speaker 1: a broader sense, the actions of London, the City, the 155 00:08:18,160 --> 00:08:21,760 Speaker 1: actions of Wall Street, the actions of corporate managers, boards 156 00:08:21,800 --> 00:08:25,440 Speaker 1: of directors exiting Russian companies. Does any of it have 157 00:08:25,600 --> 00:08:29,280 Speaker 1: power over his decisions? I think it all has power. 158 00:08:29,320 --> 00:08:32,360 Speaker 1: I mean, Vladimer Putin has spent twenty years recruiting all 159 00:08:32,400 --> 00:08:36,080 Speaker 1: of these uh Gerhard Schroeder's and the town former Italian 160 00:08:36,120 --> 00:08:39,360 Speaker 1: prime minister and Austrian foreign minister, you know, and and 161 00:08:39,400 --> 00:08:42,720 Speaker 1: all of a sudden, after twenty years building up his credibility, 162 00:08:42,760 --> 00:08:46,000 Speaker 1: they've all in one fell swoop designed from their from 163 00:08:46,000 --> 00:08:50,120 Speaker 1: their positions. Um, markets have have an enormous effect on 164 00:08:50,200 --> 00:08:52,720 Speaker 1: Vladimir Putin. He's got to have enough money to do 165 00:08:52,800 --> 00:08:54,839 Speaker 1: all this stuff, and and so we we got it. 166 00:08:54,920 --> 00:08:58,000 Speaker 1: So everyone says Russia has got six hundred billion of 167 00:08:58,800 --> 00:09:02,000 Speaker 1: hard currency reserves. Well let me tell you something, UM, 168 00:09:02,040 --> 00:09:05,600 Speaker 1: if if he's totally isolated from that, they can burn 169 00:09:05,600 --> 00:09:08,400 Speaker 1: through that real quick. The words that's been used by 170 00:09:08,600 --> 00:09:13,079 Speaker 1: some of our guests has been pria. If he's a prior, 171 00:09:13,840 --> 00:09:16,760 Speaker 1: how will we know he's separated? And what will that mean? 172 00:09:16,760 --> 00:09:20,319 Speaker 1: With all your knowledge? Bill Browder of Moscow in St. Petersburg, 173 00:09:20,920 --> 00:09:24,760 Speaker 1: how will the domestic Russian elite and the less elite, 174 00:09:25,160 --> 00:09:31,719 Speaker 1: react to Vladimir Putin as prior as removed. Well, I 175 00:09:31,720 --> 00:09:34,000 Speaker 1: mean they're they're not happy at all. The Russians love to, 176 00:09:34,480 --> 00:09:38,800 Speaker 1: you know, travel to Paris and Italy and all these 177 00:09:38,800 --> 00:09:41,160 Speaker 1: places and spend their money and live it up and 178 00:09:41,200 --> 00:09:43,559 Speaker 1: pop the champagne and buy properties and doing all this 179 00:09:43,640 --> 00:09:45,679 Speaker 1: kind of stuff. And now all of a sudden, you 180 00:09:45,720 --> 00:09:47,559 Speaker 1: know that they're they're not going to be welcome and 181 00:09:47,600 --> 00:09:50,240 Speaker 1: their their bank accounts will be closed and and it's 182 00:09:50,240 --> 00:09:52,440 Speaker 1: gonna be you know, it's it's not a lot of 183 00:09:52,480 --> 00:09:55,000 Speaker 1: fun for the Russian elite to be in in this position. 184 00:09:55,040 --> 00:09:57,480 Speaker 1: But I should point out that Putin doesn't really care 185 00:09:57,840 --> 00:10:00,040 Speaker 1: about what his people think about him. He doesn't he 186 00:10:00,080 --> 00:10:02,480 Speaker 1: doesn't want to be overthrown by his people. But he's 187 00:10:02,520 --> 00:10:05,160 Speaker 1: running a dictatorship, and anybody who says a bad word 188 00:10:05,160 --> 00:10:09,439 Speaker 1: about him on the telephone and in private, um, we'll 189 00:10:09,480 --> 00:10:12,480 Speaker 1: get into trouble. And so it's not like these people 190 00:10:12,520 --> 00:10:14,760 Speaker 1: are gonna if they're unhappy because they can't go to 191 00:10:14,920 --> 00:10:17,600 Speaker 1: skiing in course of all France, Um, there they have 192 00:10:17,679 --> 00:10:20,640 Speaker 1: any impact on him. But they're they're definitely not happy. 193 00:10:20,679 --> 00:10:23,160 Speaker 1: And there's been demonstrations all over Russia over the last 194 00:10:23,160 --> 00:10:26,600 Speaker 1: twenty four hours byular people saying this is not good. Bill, 195 00:10:26,640 --> 00:10:29,920 Speaker 1: you were talking about the theater that you are basically 196 00:10:30,120 --> 00:10:33,520 Speaker 1: interpreting this as that, basically he's putting out a neugget 197 00:10:33,559 --> 00:10:36,160 Speaker 1: of hope. Who is the hope for? Is it for 198 00:10:36,240 --> 00:10:39,400 Speaker 1: the US, Is it for Europe? Or is it for China? 199 00:10:40,440 --> 00:10:42,960 Speaker 1: Now it's not for China. China, China has got nothing 200 00:10:43,000 --> 00:10:45,960 Speaker 1: to do with this. Um. The purpose of this is 201 00:10:46,000 --> 00:10:48,839 Speaker 1: that he's seen how really as super angry everybody has 202 00:10:48,880 --> 00:10:52,120 Speaker 1: become around the world. And I think he's surprised that 203 00:10:52,200 --> 00:10:54,880 Speaker 1: the Europeans have stepped up and done all these dramatic 204 00:10:54,920 --> 00:10:57,640 Speaker 1: things like put his name on a sanctions list and 205 00:10:57,640 --> 00:11:00,200 Speaker 1: and uh. The best way of of trying to like 206 00:11:00,960 --> 00:11:05,760 Speaker 1: create some divisions among allies is to hang out a 207 00:11:05,800 --> 00:11:09,200 Speaker 1: tiny little fig leaf of hope so that everyone says, 208 00:11:09,240 --> 00:11:10,960 Speaker 1: wait a second, maybe we shouldn't be so tough, Maybe 209 00:11:10,960 --> 00:11:12,920 Speaker 1: we shouldn't follow through on that, Maybe we shouldn't do 210 00:11:13,040 --> 00:11:16,079 Speaker 1: the next terrible thing, Maybe we shouldn't cut them off 211 00:11:16,080 --> 00:11:19,280 Speaker 1: from swift, let's negotiate that. That's how he that's how 212 00:11:19,320 --> 00:11:21,240 Speaker 1: he plays this game. And then he hopes that in 213 00:11:21,360 --> 00:11:23,360 Speaker 1: two weeks time, we've all you know, all of our 214 00:11:23,960 --> 00:11:27,080 Speaker 1: uh you know, outrage has subsided to it to to 215 00:11:27,120 --> 00:11:29,160 Speaker 1: a point that he just carries on doing what he's doing. 216 00:11:29,400 --> 00:11:32,320 Speaker 1: But but he doesn't have us all aligned together trying 217 00:11:32,320 --> 00:11:34,400 Speaker 1: to cause him trouble. But we're lucking to have you 218 00:11:34,440 --> 00:11:37,640 Speaker 1: with the Sismonic Thank you very much for your situation 219 00:11:38,720 --> 00:11:47,960 Speaker 1: of what we've tried to do the last number of 220 00:11:48,000 --> 00:11:50,600 Speaker 1: days with our wonderful team is bringing you authorities like 221 00:11:50,720 --> 00:11:54,600 Speaker 1: General Hodges, infantry on the ground for the U. S Army, 222 00:11:54,679 --> 00:11:58,040 Speaker 1: a U S Army putting seven thousand more troops into Europe. 223 00:11:58,080 --> 00:12:01,360 Speaker 1: I believe this morning or last night, we just showed 224 00:12:01,360 --> 00:12:04,120 Speaker 1: you Bill Browder with all of his family's heritage of 225 00:12:04,160 --> 00:12:08,439 Speaker 1: Eastern Europe, the difficulties of Stalin and Ford, and now 226 00:12:08,480 --> 00:12:13,040 Speaker 1: we do the same thing from Ukrainian village in Chicago, Illinois. 227 00:12:13,520 --> 00:12:16,560 Speaker 1: If you are Ukraine or from Eastern Europe, there is 228 00:12:16,640 --> 00:12:21,640 Speaker 1: a huge position in Chicago, Illinois of people watching this crisis. 229 00:12:21,960 --> 00:12:25,680 Speaker 1: One of those is a daughter of Chicago, Natalie Drusco, 230 00:12:25,840 --> 00:12:28,600 Speaker 1: joins us in Puerto Rico at a swarming. She's a 231 00:12:28,640 --> 00:12:31,880 Speaker 1: former Ukraine Minister of Finance and of course her service 232 00:12:31,920 --> 00:12:35,920 Speaker 1: to Puerto Rico with their financial issues as well. Natalie, 233 00:12:35,920 --> 00:12:38,120 Speaker 1: thank you so much for joining us. You are one 234 00:12:38,160 --> 00:12:42,160 Speaker 1: of the lead members of Ukraine. There's no question about 235 00:12:42,160 --> 00:12:45,120 Speaker 1: that one. Have you learned in your phone calls to 236 00:12:45,320 --> 00:12:49,280 Speaker 1: Kiev and all of Ukraine in the recent hours, It 237 00:12:49,360 --> 00:12:54,160 Speaker 1: has been a horrible night and morning in Kiev. Uh. 238 00:12:53,280 --> 00:12:58,760 Speaker 1: The bombing has taken everyone by surprise with its intensity. Um. 239 00:12:59,000 --> 00:13:04,200 Speaker 1: Most people are in bunkers, in bomb shelters, spent the 240 00:13:04,280 --> 00:13:08,120 Speaker 1: night in those bomb shelters right now being advised to 241 00:13:08,160 --> 00:13:12,480 Speaker 1: stay there. Uh. And as you probably know, I think, Uh, 242 00:13:12,600 --> 00:13:15,160 Speaker 1: it's fair to share with you that there is an 243 00:13:15,200 --> 00:13:19,960 Speaker 1: incredible disappointment with the strength and with the urgency of 244 00:13:20,000 --> 00:13:24,199 Speaker 1: the Western response to what is in essence and unprovoked 245 00:13:24,240 --> 00:13:28,119 Speaker 1: genocide of the Ukrainian people. What does the Ukrainian community 246 00:13:28,160 --> 00:13:32,760 Speaker 1: of America need from President Biden. Well, this is what 247 00:13:32,800 --> 00:13:35,679 Speaker 1: the Ukrainian community in Ukraine needs. The Ukrainian Community of 248 00:13:35,679 --> 00:13:38,760 Speaker 1: America supports that. But what we need from President Biden 249 00:13:38,840 --> 00:13:42,280 Speaker 1: from all of the Western democracies is much more urgent, 250 00:13:42,720 --> 00:13:48,040 Speaker 1: much deeper, much broader financial sanctions, sanctions against energy companies, 251 00:13:48,440 --> 00:13:53,120 Speaker 1: sanctions to end the disinformation in the media, world, and 252 00:13:53,200 --> 00:13:57,320 Speaker 1: on top of that, much more massive support for the 253 00:13:57,440 --> 00:14:01,160 Speaker 1: Ukrainian military that is defending its self. No one is 254 00:14:01,240 --> 00:14:04,640 Speaker 1: asking for US boots on the ground, but yes, we 255 00:14:04,720 --> 00:14:08,520 Speaker 1: need more ammunition, we need more javelins, we need more stingers, 256 00:14:08,840 --> 00:14:11,439 Speaker 1: and they need to be trucked in from our eastern 257 00:14:11,440 --> 00:14:15,040 Speaker 1: flank in in NATO, so that the Ukrainian military can 258 00:14:15,080 --> 00:14:18,760 Speaker 1: do its job, and not only defending Ukrainians, but frankly 259 00:14:18,800 --> 00:14:22,240 Speaker 1: all of Europe, because if it doesn't end in Ukraine, 260 00:14:22,600 --> 00:14:26,920 Speaker 1: and if it doesn't end with democracy in Ukraine, everyone 261 00:14:26,960 --> 00:14:29,760 Speaker 1: else will be will be involved later anyway, Not only 262 00:14:30,880 --> 00:14:33,800 Speaker 1: can you talk a little bit about the defense attempts 263 00:14:33,800 --> 00:14:38,320 Speaker 1: and the defense efforts in Kiev, in the broader Ukrainian region, 264 00:14:38,560 --> 00:14:41,160 Speaker 1: Given the fact that there is a conscription among all 265 00:14:41,160 --> 00:14:44,360 Speaker 1: men I believe the age eighteen to sixty, how forceful 266 00:14:44,560 --> 00:14:48,280 Speaker 1: is it, How quickly is it assembling? First of all, 267 00:14:48,280 --> 00:14:50,840 Speaker 1: it's important to note that people were lining up yesterday, 268 00:14:50,880 --> 00:14:55,240 Speaker 1: even before that to volunteer their services. Ukrainians are extraordinarily 269 00:14:55,400 --> 00:14:58,440 Speaker 1: committed to defending their peace and freedom. This is not 270 00:14:58,520 --> 00:15:00,680 Speaker 1: the first time in thirty years, but this is certainly 271 00:15:00,720 --> 00:15:04,600 Speaker 1: worse than anything we experienced in two thousands fourteen or 272 00:15:04,640 --> 00:15:07,960 Speaker 1: prior to that. I will tell you that um men 273 00:15:08,000 --> 00:15:10,240 Speaker 1: are not being allowed to leave. I have heard the 274 00:15:10,280 --> 00:15:12,640 Speaker 1: stories and spoken to people who are trying to leave 275 00:15:12,680 --> 00:15:15,800 Speaker 1: with their families. Men are taken out of the buses 276 00:15:15,840 --> 00:15:18,640 Speaker 1: and told to go serve, and frankly, it's only fair. 277 00:15:19,000 --> 00:15:22,520 Speaker 1: Everyone needs to serve. At this point, the only hope 278 00:15:22,560 --> 00:15:26,120 Speaker 1: we have is that the Ukrainian military continues what has 279 00:15:26,120 --> 00:15:31,480 Speaker 1: been an extraordinarily um successful defense thus far in in 280 00:15:31,600 --> 00:15:36,120 Speaker 1: terms of what's happening on the ground. Natalie, you are 281 00:15:36,240 --> 00:15:39,960 Speaker 1: arguably in the Western world, the definitive expert on small 282 00:15:40,000 --> 00:15:43,800 Speaker 1: business in Ukraine up to Belarus with your Horizon Capital 283 00:15:43,880 --> 00:15:48,120 Speaker 1: as well. Please your opinion of how Mr Putin if 284 00:15:48,120 --> 00:15:52,160 Speaker 1: he takes Ukraine and if we assume he's taken Belarus, 285 00:15:52,640 --> 00:15:57,240 Speaker 1: what is his threat to the Baltic States. There's no 286 00:15:57,320 --> 00:16:00,480 Speaker 1: question that President Putin has explained to the world very 287 00:16:00,520 --> 00:16:03,280 Speaker 1: clearly that he believes the collapse of the Civiet Union 288 00:16:03,520 --> 00:16:06,400 Speaker 1: was a mistake. It is also very clear that he 289 00:16:06,440 --> 00:16:10,520 Speaker 1: has absolutely no problem attacking unprovoked peaceful countries, as he's 290 00:16:10,520 --> 00:16:13,520 Speaker 1: doing right now in Ukraine. So obviously the Baltics should 291 00:16:13,520 --> 00:16:18,720 Speaker 1: be very concerned that their next extraordinarily concerned Natalie. One 292 00:16:18,720 --> 00:16:21,560 Speaker 1: more question, I may and an arduous warning for you 293 00:16:21,680 --> 00:16:25,760 Speaker 1: and the news flow as well. We have sanctions. I 294 00:16:25,800 --> 00:16:28,280 Speaker 1: don't mean to be trite, but from where you sit 295 00:16:28,400 --> 00:16:35,080 Speaker 1: and with your experience, to sanctions work, Sanctions that are 296 00:16:35,200 --> 00:16:39,400 Speaker 1: weak end or are doled out too slowly will not 297 00:16:39,480 --> 00:16:43,040 Speaker 1: work because this is not about the effort. Cannot be about, 298 00:16:43,120 --> 00:16:44,880 Speaker 1: you know, seeing what happens in a month or two 299 00:16:44,920 --> 00:16:47,080 Speaker 1: in the Russian economy. What we need to do our 300 00:16:47,120 --> 00:16:51,440 Speaker 1: sanctions that create such a dire response to what they're 301 00:16:51,440 --> 00:16:54,640 Speaker 1: doing that it causes the elites in Russia to think twice. 302 00:16:54,720 --> 00:16:57,080 Speaker 1: If it doesn't cause President Putin to do so, at 303 00:16:57,160 --> 00:17:01,080 Speaker 1: least it causes the elites. Therefore, all of the banking 304 00:17:01,120 --> 00:17:06,840 Speaker 1: system swift. It has to be eliminating the sanctioning all 305 00:17:06,840 --> 00:17:08,960 Speaker 1: the state owned energy companies, and it has to be 306 00:17:09,000 --> 00:17:12,600 Speaker 1: done immediately. It cannot be done in ranches. Hundreds of 307 00:17:12,640 --> 00:17:15,960 Speaker 1: people are dying every hour. We do not have time 308 00:17:16,280 --> 00:17:19,480 Speaker 1: for tranches. It also needs to be more than money. 309 00:17:19,800 --> 00:17:22,760 Speaker 1: It needs to be kicking out and ending our diplomatic 310 00:17:22,760 --> 00:17:26,159 Speaker 1: relationships with Russia. There should not be a diplomat of 311 00:17:26,240 --> 00:17:30,360 Speaker 1: Russia enjoying peace and democracy in our western countries if 312 00:17:30,359 --> 00:17:34,160 Speaker 1: they will not allow Ukrainians to joy peace and democracy. 313 00:17:34,200 --> 00:17:36,480 Speaker 1: So there are a variety of things, and it needs 314 00:17:36,520 --> 00:17:41,120 Speaker 1: to be massive, urgent, meaningful, and it will have an effect. 315 00:17:41,600 --> 00:17:45,399 Speaker 1: But dolling it out in tranches over a period of 316 00:17:45,440 --> 00:17:48,919 Speaker 1: weeks absolutely not not. I remember first talking to you 317 00:17:48,960 --> 00:17:51,960 Speaker 1: about eight years ago and it's saddening that we're having 318 00:17:51,960 --> 00:17:55,280 Speaker 1: this conversation still into it again eight years later. Natalie, 319 00:17:55,359 --> 00:17:59,040 Speaker 1: Thank you, Natalie Jarresco that the former Ukraine Finance Minister 320 00:18:06,080 --> 00:18:09,119 Speaker 1: John on the liquidity of the financial system of Europe. 321 00:18:09,480 --> 00:18:11,879 Speaker 1: We have the right guests. Let's get to Tony Chris Sensei, 322 00:18:12,040 --> 00:18:15,359 Speaker 1: market strategist and portfolio manager at PIMCO. Tell you what 323 00:18:15,400 --> 00:18:17,880 Speaker 1: I'd love straight off the bat is just your observations 324 00:18:18,080 --> 00:18:19,800 Speaker 1: in the last twenty four hours, how the market has 325 00:18:19,800 --> 00:18:24,320 Speaker 1: been functioning, what you've been seeing. It does seem investors 326 00:18:24,359 --> 00:18:26,639 Speaker 1: are doing what they often do, which is take a 327 00:18:26,720 --> 00:18:28,600 Speaker 1: leap of faith. In fact, all of the debt that 328 00:18:28,680 --> 00:18:31,080 Speaker 1: exists in the world exists in part because of that 329 00:18:31,200 --> 00:18:34,680 Speaker 1: leap of faith. Investors have to have confidence in cash flows, 330 00:18:34,680 --> 00:18:39,280 Speaker 1: whether it be to bond investors, to equity investors being dividends, buyback, etcetera. 331 00:18:40,119 --> 00:18:43,280 Speaker 1: Seems they're retaining that. Uh, and we we know that 332 00:18:43,359 --> 00:18:49,040 Speaker 1: over time human beings, generally speaking, sure remarkable ability to adapt. 333 00:18:49,480 --> 00:18:51,840 Speaker 1: That's the phrase keep calm and carry on is a 334 00:18:51,920 --> 00:18:55,920 Speaker 1: phrase you of course attributed to England in the World 335 00:18:55,920 --> 00:18:59,240 Speaker 1: War Two. And Winston Churchill is if there's a feeling 336 00:18:59,359 --> 00:19:03,080 Speaker 1: that investors tend to have. And so it's not a 337 00:19:03,200 --> 00:19:06,679 Speaker 1: shock that the echoes from recent inflation data at the 338 00:19:06,720 --> 00:19:10,880 Speaker 1: FED at least are louder than the rumblings in Ukraine. 339 00:19:11,080 --> 00:19:15,399 Speaker 1: It's said state of affairs. But this finance and the 340 00:19:15,440 --> 00:19:18,400 Speaker 1: way things are tony just right now and the here 341 00:19:18,440 --> 00:19:20,680 Speaker 1: and now, there is an issue that things are moving 342 00:19:20,720 --> 00:19:24,639 Speaker 1: so quickly that sometimes parts of the marks markets actually 343 00:19:24,680 --> 00:19:27,240 Speaker 1: do break, and people are looking for potential nodes of 344 00:19:27,240 --> 00:19:31,159 Speaker 1: a contagion, particularly in money markets with the Russian sanctions 345 00:19:31,160 --> 00:19:34,879 Speaker 1: on particular oligarchs, particularly with a flight to cash amid 346 00:19:35,000 --> 00:19:37,600 Speaker 1: all the uncertainty. Have you seen any signs of that? 347 00:19:37,680 --> 00:19:40,000 Speaker 1: Are you looking for that? As we do see all 348 00:19:40,040 --> 00:19:43,840 Speaker 1: of these developments really evolving in real time, there remains 349 00:19:44,119 --> 00:19:48,560 Speaker 1: ample financial liquidity in in the global financial system, clearly 350 00:19:48,640 --> 00:19:52,640 Speaker 1: in Europe, also Asia, and of course the United States. 351 00:19:52,640 --> 00:19:55,920 Speaker 1: So the the easiest cage to look at is the 352 00:19:55,960 --> 00:20:01,080 Speaker 1: repo overnight transactions. The exchange that occurs betwe swen uh 353 00:20:01,200 --> 00:20:05,040 Speaker 1: two parties between securities in cash that's still extraordinarily low, 354 00:20:05,400 --> 00:20:08,480 Speaker 1: reflecting the surfeit of money that exists in the system. 355 00:20:08,520 --> 00:20:11,879 Speaker 1: And even if there were some tightening of conditions in 356 00:20:11,920 --> 00:20:14,840 Speaker 1: that realm, we would expect the central banks to do 357 00:20:14,920 --> 00:20:17,800 Speaker 1: what they always do is, which is read up printing presses, 358 00:20:18,280 --> 00:20:21,000 Speaker 1: and they've certainly shown a remarkable ability to do that 359 00:20:21,040 --> 00:20:24,119 Speaker 1: in the last decade or so, so perhaps liquidity is 360 00:20:24,359 --> 00:20:27,240 Speaker 1: consistent or at least ample. However, there has been a 361 00:20:27,320 --> 00:20:31,120 Speaker 1: huge divergence right now going between the US and Europe 362 00:20:31,240 --> 00:20:34,359 Speaker 1: with respect to what the impact from the Ukrainian conflict 363 00:20:34,640 --> 00:20:36,600 Speaker 1: could be. We just get this headline at the ECB 364 00:20:36,680 --> 00:20:40,000 Speaker 1: s Lane sees the Ukrainian war shaving up to zero 365 00:20:40,000 --> 00:20:43,159 Speaker 1: point four percent from the g d P. This is 366 00:20:43,200 --> 00:20:46,600 Speaker 1: according to Reuter's how much have you shifted your view 367 00:20:46,840 --> 00:20:49,119 Speaker 1: on how quickly the e c B could move versus 368 00:20:49,119 --> 00:20:54,520 Speaker 1: the Federal reserve on the On the margin, we think 369 00:20:54,560 --> 00:20:58,880 Speaker 1: that the stress reduced, of course, increases the downside risk 370 00:20:58,920 --> 00:21:02,399 Speaker 1: to global economic both. PIMCO will hold a quarterly meeting 371 00:21:02,520 --> 00:21:04,400 Speaker 1: in about a week and a half in Newport Beach 372 00:21:04,400 --> 00:21:08,240 Speaker 1: and around the world be a video with its investment 373 00:21:08,359 --> 00:21:11,440 Speaker 1: professionals to discuss the matter. But we currently have penciled 374 00:21:11,480 --> 00:21:13,720 Speaker 1: in the growth rate of in the mid threes or 375 00:21:13,760 --> 00:21:16,399 Speaker 1: so for the US this year and close to four 376 00:21:16,760 --> 00:21:20,199 Speaker 1: somewhere in high threes for Europe. The downside risk, of 377 00:21:20,240 --> 00:21:23,440 Speaker 1: course emerges from a drop in confidence in Europe more 378 00:21:23,520 --> 00:21:26,159 Speaker 1: than it would be in the United States, and the 379 00:21:26,200 --> 00:21:29,239 Speaker 1: impact of energy costs, which is greater in Europe than 380 00:21:29,280 --> 00:21:31,560 Speaker 1: it will be in the United States, and so there 381 00:21:31,640 --> 00:21:34,480 Speaker 1: is some impact there, but it's probably too soon to 382 00:21:34,520 --> 00:21:38,440 Speaker 1: say that the numbers will calm down. And importantly, looking 383 00:21:38,440 --> 00:21:42,240 Speaker 1: at the two years story, one should remain sanguine right 384 00:21:42,240 --> 00:21:45,680 Speaker 1: now with a high degree of caution about the the 385 00:21:46,000 --> 00:21:49,920 Speaker 1: the predictability of that though with respect to the global 386 00:21:49,960 --> 00:21:53,280 Speaker 1: album and that's what markets scene three reflecting with the 387 00:21:53,320 --> 00:21:56,760 Speaker 1: current information it has, things could change very rapidly, and 388 00:21:56,840 --> 00:22:01,159 Speaker 1: so we'd say about the outlook, there's a degree of uncertainty, 389 00:22:01,200 --> 00:22:03,280 Speaker 1: and so one wants to have portfolios at a liquid, 390 00:22:03,880 --> 00:22:07,159 Speaker 1: resilient and agile on this climate. Does that mean more cash, Tony, 391 00:22:08,440 --> 00:22:11,439 Speaker 1: a little more cash, not to say, uh, sell everything, 392 00:22:11,520 --> 00:22:16,360 Speaker 1: of course, we think right now, just simply maintaining flexibility. 393 00:22:16,480 --> 00:22:21,880 Speaker 1: This might mean choosing more liquid assets, staying in, staying invested, 394 00:22:21,960 --> 00:22:24,679 Speaker 1: but simply choosing or liquid assets. For example, on the 395 00:22:24,680 --> 00:22:28,679 Speaker 1: credit markets, an institutional investor could choose a credit index 396 00:22:28,880 --> 00:22:32,280 Speaker 1: rather than cash instruments because the amount of money on 397 00:22:32,359 --> 00:22:35,199 Speaker 1: the bid and offer, so called quote depth, tends to 398 00:22:35,200 --> 00:22:39,360 Speaker 1: be rather large in comparison. Sony always wantedful to catch 399 00:22:39,440 --> 00:22:43,359 Speaker 1: up with you important moments, Johns, thank you, sir of 400 00:22:43,480 --> 00:22:53,160 Speaker 1: Pimcoake C. Michan joins us. Now for principal global Investors, Seeming. 401 00:22:53,240 --> 00:22:56,000 Speaker 1: Let's start there, the difficulty to stay level headed in 402 00:22:56,040 --> 00:22:59,840 Speaker 1: a moment like this one. Yeah, you see the bullets 403 00:22:59,880 --> 00:23:01,560 Speaker 1: and to you see the headlines, and of course the 404 00:23:01,640 --> 00:23:03,960 Speaker 1: knee jeck reaction is going to be to go straight 405 00:23:04,000 --> 00:23:06,880 Speaker 1: into cash. But when we look at previous geo political 406 00:23:06,960 --> 00:23:09,120 Speaker 1: crisis in the way that the market is reacted, it's 407 00:23:09,160 --> 00:23:11,560 Speaker 1: really down to the macro backdrop. So if you are 408 00:23:11,640 --> 00:23:15,399 Speaker 1: to see its significant deterioration in the macro backdrop because 409 00:23:15,440 --> 00:23:18,639 Speaker 1: of the surgeonal prices, then yes, you know we should 410 00:23:18,680 --> 00:23:21,840 Speaker 1: be fleeing for St. Favan's. However, if you're not going 411 00:23:21,880 --> 00:23:24,359 Speaker 1: to see a very significant move inflation and you're not 412 00:23:24,400 --> 00:23:26,919 Speaker 1: going to see the FED moving from its path, then 413 00:23:26,960 --> 00:23:29,240 Speaker 1: I think the macro back droop actually still stays pretty 414 00:23:29,280 --> 00:23:31,840 Speaker 1: solid and this is probably a good time to keep 415 00:23:31,920 --> 00:23:34,879 Speaker 1: your head and stay in the game. Seema, how will 416 00:23:34,920 --> 00:23:38,679 Speaker 1: the centerbying some particularly Chairman Powell, are just yield in 417 00:23:38,720 --> 00:23:42,600 Speaker 1: the next six months. I understand there's massive uncertainty, but 418 00:23:42,800 --> 00:23:46,359 Speaker 1: what will you be listening for from the Chairman, the 419 00:23:46,440 --> 00:23:51,520 Speaker 1: President's and the governors. Look, they've clearly got very This 420 00:23:51,560 --> 00:23:53,760 Speaker 1: is they're all already facing a dilever and this is 421 00:23:53,800 --> 00:23:56,800 Speaker 1: just simply increase that dilever. We need to be hearing 422 00:23:56,800 --> 00:23:59,040 Speaker 1: out for what they're going to say about financial conditions. 423 00:23:59,480 --> 00:24:02,200 Speaker 1: But really, given the uncertainty and the fact that they 424 00:24:02,240 --> 00:24:04,720 Speaker 1: have said that they're very much data dependent, it's very 425 00:24:04,720 --> 00:24:07,840 Speaker 1: difficult to see that this conflict is going to push 426 00:24:07,920 --> 00:24:11,280 Speaker 1: the Fed office path within the near future. Once you 427 00:24:11,320 --> 00:24:12,960 Speaker 1: get into the second half of the year, then it 428 00:24:13,000 --> 00:24:15,840 Speaker 1: gives in time to redien analyze to see what the 429 00:24:15,840 --> 00:24:19,160 Speaker 1: repercussions are if it is still continuing, and at that point, 430 00:24:19,280 --> 00:24:21,240 Speaker 1: that's when you could see maybe a pause and the 431 00:24:21,320 --> 00:24:25,320 Speaker 1: fat if you are having consumer start to really react 432 00:24:25,320 --> 00:24:28,200 Speaker 1: to a rise in all prices. But until then, actually 433 00:24:28,200 --> 00:24:30,119 Speaker 1: we don't see much of a change. And what the 434 00:24:30,119 --> 00:24:32,920 Speaker 1: phot was planning to do for weeks, that divergence between 435 00:24:32,920 --> 00:24:35,720 Speaker 1: the u US and the European Union, it has been 436 00:24:35,720 --> 00:24:39,439 Speaker 1: caused for some people to shift their assets into European equities. 437 00:24:39,760 --> 00:24:43,560 Speaker 1: How much does the development with Russia invading Ukraine change 438 00:24:43,600 --> 00:24:47,000 Speaker 1: that equation for you Well, you know, when we came 439 00:24:47,040 --> 00:24:51,199 Speaker 1: into attribution to I know, the consensus view as they 440 00:24:51,200 --> 00:24:55,159 Speaker 1: looked at valuations, Europe look looking a lot cheaper technicals 441 00:24:55,160 --> 00:24:57,880 Speaker 1: and fundamentals. Maybe the growth story was looking that much stronger, 442 00:24:57,960 --> 00:25:00,880 Speaker 1: But actually we maintained and overweight to US versus you're 443 00:25:01,000 --> 00:25:04,720 Speaker 1: because of the concerns around the conflict and also because 444 00:25:04,760 --> 00:25:07,719 Speaker 1: of concerns around natural gas prices. Now we know that 445 00:25:07,800 --> 00:25:10,080 Speaker 1: Europe is more vulnerable to any kind of move. So 446 00:25:10,200 --> 00:25:14,000 Speaker 1: if anything, this is just confirmed our our concerns about 447 00:25:14,040 --> 00:25:18,040 Speaker 1: Europe and actually increases our conviction that the US is 448 00:25:18,040 --> 00:25:20,399 Speaker 1: probably the safest place to be sitting and seem with 449 00:25:20,480 --> 00:25:21,879 Speaker 1: just a word on the banks trade if you can 450 00:25:21,920 --> 00:25:23,919 Speaker 1: as well because that's come up so many times in 451 00:25:23,960 --> 00:25:26,600 Speaker 1: the European story over the last few weeks. Bank of 452 00:25:26,640 --> 00:25:28,800 Speaker 1: America put out a note this morning. Don't like them. 453 00:25:28,800 --> 00:25:32,400 Speaker 1: Obviously the upside is limited now for yields on buns. 454 00:25:32,760 --> 00:25:35,400 Speaker 1: The dollars set to get stronger, growth set to decelerate 455 00:25:35,400 --> 00:25:38,359 Speaker 1: in Europe. Any words of advice for people who are 456 00:25:38,400 --> 00:25:42,800 Speaker 1: sitting there in European banks still seema, Look, I think 457 00:25:42,800 --> 00:25:45,679 Speaker 1: you need to have some some exposure to value, and 458 00:25:45,720 --> 00:25:47,679 Speaker 1: I think really it's could be quality value. If you're 459 00:25:47,680 --> 00:25:49,280 Speaker 1: going to be in banks, look at like quality, what 460 00:25:49,320 --> 00:25:51,720 Speaker 1: are the bound shoots, what have the cash the cash 461 00:25:51,720 --> 00:25:54,840 Speaker 1: prior of these places. Overall, though we don't think that 462 00:25:54,840 --> 00:25:57,160 Speaker 1: that's the best place to be. We don't see considerable 463 00:25:57,280 --> 00:25:59,560 Speaker 1: upside to yield from him. Maybe a little bit, but 464 00:25:59,640 --> 00:26:01,560 Speaker 1: not too much. So we think there are all the 465 00:26:01,640 --> 00:26:03,840 Speaker 1: sect two whould be preferable and art energy. If you 466 00:26:03,880 --> 00:26:07,159 Speaker 1: have any concerns about your political shocks or inflation, probably energies, 467 00:26:07,200 --> 00:26:11,159 Speaker 1: you've got a place to be sitting of Principal Global Investors. Sama. 468 00:26:11,480 --> 00:26:15,800 Speaker 1: Thank you. This is the Bloomberg Surveillance Podcast. Thanks for listening. 469 00:26:16,160 --> 00:26:19,480 Speaker 1: Join us live weekdays from seven to ten am Eastern 470 00:26:19,720 --> 00:26:23,800 Speaker 1: on Bloomberg Radio and on Bloomberg Television each day from 471 00:26:23,840 --> 00:26:29,080 Speaker 1: six to nine am for insight from the best in economics, finance, investment, 472 00:26:29,240 --> 00:26:34,240 Speaker 1: and international relations. And subscribe to the Surveillance podcast on 473 00:26:34,359 --> 00:26:38,159 Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course, on 474 00:26:38,280 --> 00:26:42,399 Speaker 1: the terminal. I'm Tom Keene, and this is Bloomberg