WEBVTT - Surveillance: Ukraine Talks with Browder 0:00:05.120 --> 0:00:09.200 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 0:00:09.240 --> 0:00:13.200 with Jonathan Farrell and Lisa Brownowitz Jaily we bring you 0:00:13.320 --> 0:00:18.600 insight from the best and economics, finance, investment and international relations. 0:00:18.960 --> 0:00:23.840 Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com 0:00:23.920 --> 0:00:30.760 and of course on the Bloomberg Termament. We continue our discussion, folks, 0:00:30.840 --> 0:00:33.720 John Farrell, Lisa bramwa to myself and now is a 0:00:33.800 --> 0:00:36.960 conversation that could be two hours long, because there is 0:00:37.080 --> 0:00:40.720 no one with a family more qualified on Russia and 0:00:40.760 --> 0:00:44.239 the fears of Mr Putin than William Browder. Yes, he 0:00:44.360 --> 0:00:48.479 is founder, chief executive officer of Hermitage Capital Management, But 0:00:48.600 --> 0:00:52.120 what you don't know is his family's heritage back to 0:00:52.520 --> 0:00:57.320 the height of mathematics in America and before that, courage 0:00:57.800 --> 0:01:02.720 on continental Europe, Central Europe and the bravery of fighting 0:01:02.800 --> 0:01:06.119 off Tyranny. Bill Browder honored to have you with Bloomberg 0:01:06.160 --> 0:01:10.679 Surveillance today. What would Earl Browders say? What would he 0:01:11.000 --> 0:01:17.039 say long ago to standing up to Vladimir Putin? Well, so, 0:01:17.319 --> 0:01:19.560 just just to make it clear, so my grandfather was 0:01:19.600 --> 0:01:26.800 the General secretary of the American Communist Party, and at 0:01:26.800 --> 0:01:30.479 a time when when Russia and America were at war 0:01:30.600 --> 0:01:34.200 with the Nazis the moment that the war ended, um 0:01:34.319 --> 0:01:37.480 Uh Stalin kicked my grandfather out of the Communist Party 0:01:37.520 --> 0:01:39.520 for being too much of a capitalist and then started 0:01:39.560 --> 0:01:44.520 murdering his followers all over all over Eastern Europe and 0:01:44.640 --> 0:01:47.119 other places. And and there's a famous car we are 0:01:47.160 --> 0:01:49.040 we returned. I don't mean to interrupt, Bill, but this 0:01:49.120 --> 0:01:53.240 is so so important with your perspective. Are we returning 0:01:53.320 --> 0:01:57.080 to that tyranny? Um There's there's no question that we're 0:01:57.120 --> 0:02:01.000 returning to that year. And Vladimir Putin um is is 0:02:01.000 --> 0:02:06.360 a nineteen thirties style European dictator who is doing exactly 0:02:06.560 --> 0:02:08.400 I wouldn't compare him so much to Stalin as I 0:02:08.400 --> 0:02:10.880 would compare him to Hitler. Um what we have going 0:02:10.919 --> 0:02:13.160 on right in this minute, as we as we speak 0:02:13.680 --> 0:02:17.480 um is is the equivalent of when Adolf Hitler was 0:02:17.560 --> 0:02:21.959 taking a chunk of of Czechoslovakia and everybody was trying 0:02:21.960 --> 0:02:23.520 to figure out what to do, and first they tried 0:02:23.520 --> 0:02:25.600 to appease him and it didn't work, and then we 0:02:25.680 --> 0:02:28.639 ended up with with the World War two. Glandimer Putin 0:02:28.840 --> 0:02:32.760 is starting with Ukraine. And make no no mistake about it, 0:02:32.880 --> 0:02:35.240 this is not the end goal. He he has gotten 0:02:35.280 --> 0:02:37.960 bigger things in his sight. He wants, he wants to 0:02:38.040 --> 0:02:41.959 dominate the European continent, and he will move further. Bill, 0:02:42.000 --> 0:02:44.960 are you surprised that the US hasn't joined the reporting, 0:02:44.960 --> 0:02:47.800 at least from the Financial Times saying the EU is 0:02:47.840 --> 0:02:53.239 preparing to freeze the assets of Putin and Lavrov Um. Well, 0:02:53.600 --> 0:02:55.120 first of all, i should say that I'm surprised that 0:02:55.160 --> 0:02:57.040 europe has taken such a step. I mean, I've spent 0:02:57.080 --> 0:03:00.000 the last ten years in a conflict with Gladom Reputin 0:03:00.400 --> 0:03:02.720 trying to get the Europeans to do the bare minimum 0:03:02.720 --> 0:03:05.840 things in terms of human rights abuse so on in Russia, 0:03:06.120 --> 0:03:09.840 and the European Union has always been on the back foot, 0:03:09.960 --> 0:03:12.160 never doing the right thing in the in the US 0:03:12.200 --> 0:03:16.000 has always been the the country taking the lead on this, 0:03:16.440 --> 0:03:18.480 and so I'm very surprised that the European unions done this. 0:03:18.560 --> 0:03:21.040 I'm very happy that the European Union has done this. 0:03:21.200 --> 0:03:24.600 If it's for real, um and uh, and I'm sure 0:03:24.639 --> 0:03:28.240 that the US will will will quickly uh come into 0:03:28.240 --> 0:03:30.600 conformity with it. I don't think that it's uh, it's 0:03:30.639 --> 0:03:33.680 just if you were to look around. Uh, you know, 0:03:33.720 --> 0:03:36.240 two weeks ago, the Germans were not even ready to 0:03:36.280 --> 0:03:39.920 supply any military equipment to the Ukrainians other than five 0:03:39.920 --> 0:03:42.520 thousand helmets, and now they're saying Vladimir Putin it's a 0:03:42.520 --> 0:03:45.760 pretty big staff bill. Given your intimate experience with the 0:03:45.760 --> 0:03:49.640 financial system of Russia and the subsequent problems that can 0:03:49.760 --> 0:03:52.680 emerge there, what's your view on how effective some of 0:03:52.720 --> 0:03:55.720 these sanctions, some of these asset phreezes could be at 0:03:55.720 --> 0:03:57.840 a time when so far it seems like they have 0:03:58.040 --> 0:04:02.000 not caused Vladimir Putin are retreat in any way. Well, 0:04:02.000 --> 0:04:04.560 so far they haven't sanctioned Vladimir Putin. I mean, so, 0:04:05.240 --> 0:04:06.960 first of all, it's very important that that when they 0:04:07.000 --> 0:04:11.160 say they're sanctioning Gladim Reputin, they're sanctioning also his trustees. 0:04:11.320 --> 0:04:14.520 Because Gladim Reputin, it's it's very symbolic to say we're 0:04:14.520 --> 0:04:18.080 sanctioned Vladim Reputin. He doesn't have He's an extremely rich man. 0:04:18.120 --> 0:04:20.520 He's worth i would say more than two billion dollars, 0:04:20.520 --> 0:04:22.280 but none of that money is held in his own name, 0:04:22.839 --> 0:04:24.800 is held in the name of people he trusts on 0:04:24.880 --> 0:04:28.359 handshake agreements. I called him all the Garth trustees. And 0:04:28.360 --> 0:04:31.160 so unless you're to sanction the top fifty aligars at 0:04:31.160 --> 0:04:33.120 the same time, you're not. I'm actually going to get 0:04:33.160 --> 0:04:35.640 his money. However, if you do, if you were to 0:04:35.680 --> 0:04:38.920 sanction those people, um, you're you're hitting him exactly where 0:04:38.920 --> 0:04:41.320 it counts. Putin, he doesn't care if you sanction a 0:04:41.400 --> 0:04:43.720 Russian bank or if you do something to the oil industry. 0:04:44.000 --> 0:04:46.320 He cares about his own money. And if you actually 0:04:46.360 --> 0:04:48.680 get his money, then then then he's he's going to 0:04:48.760 --> 0:04:51.599 stop and pay attention, because what you know, he's he's spent. 0:04:51.760 --> 0:04:54.640 He's worked very hard for the last twenty years, torturing, killing, 0:04:54.720 --> 0:04:57.240 hospit taking hostage people and to try to get all 0:04:57.279 --> 0:04:59.880 their money, um, and to have all the money taken 0:04:59.880 --> 0:05:02.520 a way. That's twenty years of hard work for a dictator. 0:05:02.600 --> 0:05:04.880 And so that would work, that would have a real 0:05:05.000 --> 0:05:07.840 and serious and dramatic effect. Bill. I want to get 0:05:07.880 --> 0:05:09.440 to headlines with John Ferrell and I want you to 0:05:09.480 --> 0:05:13.400 stay with us. But very importantly, your hermatage Capital is 0:05:13.440 --> 0:05:16.760 based off St. Petersburg and one of the glorious museums 0:05:16.760 --> 0:05:20.159 of the world. That's two hundred and fifty miles from Estonia. 0:05:20.560 --> 0:05:23.360 At what risks are the Baltic states based on your 0:05:23.400 --> 0:05:29.560 experience of Russia, UM, well so in my estimation. So 0:05:29.640 --> 0:05:33.920 after Putin is done with Ukraine, UM, assuming he gets 0:05:33.960 --> 0:05:37.600 done with Ukraine, and that's not a given. The Ukrainians 0:05:37.600 --> 0:05:40.760 are fighting like Allen and and actually having some success 0:05:40.760 --> 0:05:44.279 at the moment. But assuming he's done with Ukraine, UM, 0:05:44.400 --> 0:05:47.080 then his next goal is going to be to test 0:05:47.160 --> 0:05:50.160 the resolve of the United States and many countries in 0:05:50.200 --> 0:05:53.440 the EU to defend the Baltics. We we have that 0:05:53.560 --> 0:05:56.920 we're all members of NATO. It's NATO is a one 0:05:57.000 --> 0:06:01.120 for all, all for one military defense organization and and 0:06:01.640 --> 0:06:04.880 gladi Reprutin in his mind doesn't believe that we will 0:06:04.920 --> 0:06:09.560 all come and defend Estonia or Lithuania. He doesn't believe 0:06:09.600 --> 0:06:11.440 that America want to go to war with Russia to 0:06:11.480 --> 0:06:13.919 defend the country most people have never heard of. But 0:06:14.000 --> 0:06:16.560 I would love your reaction to these headlines in real time, 0:06:16.600 --> 0:06:18.680 so allow me to bring them to you. As you know, 0:06:18.680 --> 0:06:20.920 a little bit earlier this morning, there were talks between 0:06:21.240 --> 0:06:24.320 the Russian leader and the Chinese leader. According to State TV, 0:06:24.440 --> 0:06:28.320 the Chinese urged Russia and Ukraine to negotiate to address problems. 0:06:28.480 --> 0:06:30.880 We just had a headline moments ago. Let me read 0:06:30.920 --> 0:06:32.560 that out for you and then I'd love your reaction. 0:06:33.000 --> 0:06:35.880 Russia is ready to send a delegation to Minsk for 0:06:36.040 --> 0:06:39.240 Ukraine talks. This according to Winter Facts. They're ready to 0:06:39.279 --> 0:06:43.919 send their defense minister, foreign minister for delegation for talks. 0:06:43.920 --> 0:06:47.080 This according to inter Facts. But just as you react 0:06:47.080 --> 0:06:49.120 to that, what is your first reaction? What does that mean? 0:06:49.120 --> 0:06:51.599 How would you interpret that kind of report? The Chinese 0:06:51.600 --> 0:06:53.920 were spoken to the Russians. We're getting a headline now 0:06:53.960 --> 0:06:56.440 from Into Facts they're ready for talks. I'm thinking about 0:06:56.480 --> 0:06:58.680 what their objectives are at the moment, how the Ukrainians 0:06:58.720 --> 0:07:02.159 might receive a statement like what are you thinking about? Well? 0:07:02.200 --> 0:07:04.280 On one hand, we could say, wow, good news, Okay, 0:07:04.680 --> 0:07:07.560 there's talks now, um, But but the reality is, and 0:07:07.600 --> 0:07:10.520 I've been involved in all sorts of ugly conflicts and 0:07:10.560 --> 0:07:14.360 negotiations with the Russians. They stick this stuff out there 0:07:14.400 --> 0:07:16.120 to try to give a little bit of hope. You 0:07:16.280 --> 0:07:19.120 remember a couple of weeks ago they said we're we're 0:07:19.200 --> 0:07:22.120 we're withdrawing our troops in the border. And remember that 0:07:22.120 --> 0:07:24.920 that bunch of pictures of a few tanks going back, 0:07:25.160 --> 0:07:27.040 and everyone that the markets went up. Everyone reads the 0:07:27.080 --> 0:07:29.600 side of relief and it meant nothing. The Russians can 0:07:29.640 --> 0:07:32.080 do talks. They should have been doing talks all along. 0:07:32.400 --> 0:07:36.280 Um I I wouldn't. I would put like a two 0:07:36.280 --> 0:07:38.600 percent probability that this leads to the end of the 0:07:38.680 --> 0:07:43.400 conflict in any It's it's pure theater in my mind, 0:07:43.520 --> 0:07:46.200 but you know maybe I I'd love to be proven wrong. Well, 0:07:46.240 --> 0:07:49.120 this market is responding to that theater. Not a big move, sir, 0:07:49.200 --> 0:07:51.120 But Tom, we've seen in a move of about a 0:07:51.240 --> 0:07:53.000 third of one percent, a quarter of one percent into 0:07:53.040 --> 0:07:56.520 positive territory on the SMP looking at Tenure Bundo. It's 0:07:56.520 --> 0:07:58.360 now with the high set a session up five faces 0:07:58.360 --> 0:08:00.920 points to about positive and t two off the back 0:08:00.920 --> 0:08:02.800 of the headline from into facts Tom that Russia is 0:08:02.800 --> 0:08:06.000 ready to send a delegation to Minsk for Ukraine silks. 0:08:06.120 --> 0:08:08.320 Some of the haven ratio is doing well as well. 0:08:08.400 --> 0:08:10.840 Swiss Frank a little bit weaker. Bill Brodder and the 0:08:10.920 --> 0:08:14.840 markets be a tool against Vladimir Putin. The markets in 0:08:14.880 --> 0:08:18.080 a broader sense, the actions of London, the City, the 0:08:18.160 --> 0:08:21.760 actions of Wall Street, the actions of corporate managers, boards 0:08:21.800 --> 0:08:25.440 of directors exiting Russian companies. Does any of it have 0:08:25.600 --> 0:08:29.280 power over his decisions? I think it all has power. 0:08:29.320 --> 0:08:32.360 I mean, Vladimer Putin has spent twenty years recruiting all 0:08:32.400 --> 0:08:36.080 of these uh Gerhard Schroeder's and the town former Italian 0:08:36.120 --> 0:08:39.360 prime minister and Austrian foreign minister, you know, and and 0:08:39.400 --> 0:08:42.720 all of a sudden, after twenty years building up his credibility, 0:08:42.760 --> 0:08:46.000 they've all in one fell swoop designed from their from 0:08:46.000 --> 0:08:50.120 their positions. Um, markets have have an enormous effect on 0:08:50.200 --> 0:08:52.720 Vladimir Putin. He's got to have enough money to do 0:08:52.800 --> 0:08:54.839 all this stuff, and and so we we got it. 0:08:54.920 --> 0:08:58.000 So everyone says Russia has got six hundred billion of 0:08:58.800 --> 0:09:02.000 hard currency reserves. Well let me tell you something, UM, 0:09:02.040 --> 0:09:05.600 if if he's totally isolated from that, they can burn 0:09:05.600 --> 0:09:08.400 through that real quick. The words that's been used by 0:09:08.600 --> 0:09:13.079 some of our guests has been pria. If he's a prior, 0:09:13.840 --> 0:09:16.760 how will we know he's separated? And what will that mean? 0:09:16.760 --> 0:09:20.319 With all your knowledge? Bill Browder of Moscow in St. Petersburg, 0:09:20.920 --> 0:09:24.760 how will the domestic Russian elite and the less elite, 0:09:25.160 --> 0:09:31.719 react to Vladimir Putin as prior as removed. Well, I 0:09:31.720 --> 0:09:34.000 mean they're they're not happy at all. The Russians love to, 0:09:34.480 --> 0:09:38.800 you know, travel to Paris and Italy and all these 0:09:38.800 --> 0:09:41.160 places and spend their money and live it up and 0:09:41.200 --> 0:09:43.559 pop the champagne and buy properties and doing all this 0:09:43.640 --> 0:09:45.679 kind of stuff. And now all of a sudden, you 0:09:45.720 --> 0:09:47.559 know that they're they're not going to be welcome and 0:09:47.600 --> 0:09:50.240 their their bank accounts will be closed and and it's 0:09:50.240 --> 0:09:52.440 gonna be you know, it's it's not a lot of 0:09:52.480 --> 0:09:55.000 fun for the Russian elite to be in in this position. 0:09:55.040 --> 0:09:57.480 But I should point out that Putin doesn't really care 0:09:57.840 --> 0:10:00.040 about what his people think about him. He doesn't he 0:10:00.080 --> 0:10:02.480 doesn't want to be overthrown by his people. But he's 0:10:02.520 --> 0:10:05.160 running a dictatorship, and anybody who says a bad word 0:10:05.160 --> 0:10:09.439 about him on the telephone and in private, um, we'll 0:10:09.480 --> 0:10:12.480 get into trouble. And so it's not like these people 0:10:12.520 --> 0:10:14.760 are gonna if they're unhappy because they can't go to 0:10:14.920 --> 0:10:17.600 skiing in course of all France, Um, there they have 0:10:17.679 --> 0:10:20.640 any impact on him. But they're they're definitely not happy. 0:10:20.679 --> 0:10:23.160 And there's been demonstrations all over Russia over the last 0:10:23.160 --> 0:10:26.600 twenty four hours byular people saying this is not good. Bill, 0:10:26.640 --> 0:10:29.920 you were talking about the theater that you are basically 0:10:30.120 --> 0:10:33.520 interpreting this as that, basically he's putting out a neugget 0:10:33.559 --> 0:10:36.160 of hope. Who is the hope for? Is it for 0:10:36.240 --> 0:10:39.400 the US, Is it for Europe? Or is it for China? 0:10:40.440 --> 0:10:42.960 Now it's not for China. China, China has got nothing 0:10:43.000 --> 0:10:45.960 to do with this. Um. The purpose of this is 0:10:46.000 --> 0:10:48.839 that he's seen how really as super angry everybody has 0:10:48.880 --> 0:10:52.120 become around the world. And I think he's surprised that 0:10:52.200 --> 0:10:54.880 the Europeans have stepped up and done all these dramatic 0:10:54.920 --> 0:10:57.640 things like put his name on a sanctions list and 0:10:57.640 --> 0:11:00.200 and uh. The best way of of trying to like 0:11:00.960 --> 0:11:05.760 create some divisions among allies is to hang out a 0:11:05.800 --> 0:11:09.200 tiny little fig leaf of hope so that everyone says, 0:11:09.240 --> 0:11:10.960 wait a second, maybe we shouldn't be so tough, Maybe 0:11:10.960 --> 0:11:12.920 we shouldn't follow through on that, Maybe we shouldn't do 0:11:13.040 --> 0:11:16.079 the next terrible thing, Maybe we shouldn't cut them off 0:11:16.080 --> 0:11:19.280 from swift, let's negotiate that. That's how he that's how 0:11:19.320 --> 0:11:21.240 he plays this game. And then he hopes that in 0:11:21.360 --> 0:11:23.360 two weeks time, we've all you know, all of our 0:11:23.960 --> 0:11:27.080 uh you know, outrage has subsided to it to to 0:11:27.120 --> 0:11:29.160 a point that he just carries on doing what he's doing. 0:11:29.400 --> 0:11:32.320 But but he doesn't have us all aligned together trying 0:11:32.320 --> 0:11:34.400 to cause him trouble. But we're lucking to have you 0:11:34.440 --> 0:11:37.640 with the Sismonic Thank you very much for your situation 0:11:38.720 --> 0:11:47.960 of what we've tried to do the last number of 0:11:48.000 --> 0:11:50.600 days with our wonderful team is bringing you authorities like 0:11:50.720 --> 0:11:54.600 General Hodges, infantry on the ground for the U. S Army, 0:11:54.679 --> 0:11:58.040 a U S Army putting seven thousand more troops into Europe. 0:11:58.080 --> 0:12:01.360 I believe this morning or last night, we just showed 0:12:01.360 --> 0:12:04.120 you Bill Browder with all of his family's heritage of 0:12:04.160 --> 0:12:08.439 Eastern Europe, the difficulties of Stalin and Ford, and now 0:12:08.480 --> 0:12:13.040 we do the same thing from Ukrainian village in Chicago, Illinois. 0:12:13.520 --> 0:12:16.560 If you are Ukraine or from Eastern Europe, there is 0:12:16.640 --> 0:12:21.640 a huge position in Chicago, Illinois of people watching this crisis. 0:12:21.960 --> 0:12:25.680 One of those is a daughter of Chicago, Natalie Drusco, 0:12:25.840 --> 0:12:28.600 joins us in Puerto Rico at a swarming. She's a 0:12:28.640 --> 0:12:31.880 former Ukraine Minister of Finance and of course her service 0:12:31.920 --> 0:12:35.920 to Puerto Rico with their financial issues as well. Natalie, 0:12:35.920 --> 0:12:38.120 thank you so much for joining us. You are one 0:12:38.160 --> 0:12:42.160 of the lead members of Ukraine. There's no question about 0:12:42.160 --> 0:12:45.120 that one. Have you learned in your phone calls to 0:12:45.320 --> 0:12:49.280 Kiev and all of Ukraine in the recent hours, It 0:12:49.360 --> 0:12:54.160 has been a horrible night and morning in Kiev. Uh. 0:12:53.280 --> 0:12:58.760 The bombing has taken everyone by surprise with its intensity. Um. 0:12:59.000 --> 0:13:04.200 Most people are in bunkers, in bomb shelters, spent the 0:13:04.280 --> 0:13:08.120 night in those bomb shelters right now being advised to 0:13:08.160 --> 0:13:12.480 stay there. Uh. And as you probably know, I think, Uh, 0:13:12.600 --> 0:13:15.160 it's fair to share with you that there is an 0:13:15.200 --> 0:13:19.960 incredible disappointment with the strength and with the urgency of 0:13:20.000 --> 0:13:24.199 the Western response to what is in essence and unprovoked 0:13:24.240 --> 0:13:28.119 genocide of the Ukrainian people. What does the Ukrainian community 0:13:28.160 --> 0:13:32.760 of America need from President Biden. Well, this is what 0:13:32.800 --> 0:13:35.679 the Ukrainian community in Ukraine needs. The Ukrainian Community of 0:13:35.679 --> 0:13:38.760 America supports that. But what we need from President Biden 0:13:38.840 --> 0:13:42.280 from all of the Western democracies is much more urgent, 0:13:42.720 --> 0:13:48.040 much deeper, much broader financial sanctions, sanctions against energy companies, 0:13:48.440 --> 0:13:53.120 sanctions to end the disinformation in the media, world, and 0:13:53.200 --> 0:13:57.320 on top of that, much more massive support for the 0:13:57.440 --> 0:14:01.160 Ukrainian military that is defending its self. No one is 0:14:01.240 --> 0:14:04.640 asking for US boots on the ground, but yes, we 0:14:04.720 --> 0:14:08.520 need more ammunition, we need more javelins, we need more stingers, 0:14:08.840 --> 0:14:11.439 and they need to be trucked in from our eastern 0:14:11.440 --> 0:14:15.040 flank in in NATO, so that the Ukrainian military can 0:14:15.080 --> 0:14:18.760 do its job, and not only defending Ukrainians, but frankly 0:14:18.800 --> 0:14:22.240 all of Europe, because if it doesn't end in Ukraine, 0:14:22.600 --> 0:14:26.920 and if it doesn't end with democracy in Ukraine, everyone 0:14:26.960 --> 0:14:29.760 else will be will be involved later anyway, Not only 0:14:30.880 --> 0:14:33.800 can you talk a little bit about the defense attempts 0:14:33.800 --> 0:14:38.320 and the defense efforts in Kiev, in the broader Ukrainian region, 0:14:38.560 --> 0:14:41.160 Given the fact that there is a conscription among all 0:14:41.160 --> 0:14:44.360 men I believe the age eighteen to sixty, how forceful 0:14:44.560 --> 0:14:48.280 is it, How quickly is it assembling? First of all, 0:14:48.280 --> 0:14:50.840 it's important to note that people were lining up yesterday, 0:14:50.880 --> 0:14:55.240 even before that to volunteer their services. Ukrainians are extraordinarily 0:14:55.400 --> 0:14:58.440 committed to defending their peace and freedom. This is not 0:14:58.520 --> 0:15:00.680 the first time in thirty years, but this is certainly 0:15:00.720 --> 0:15:04.600 worse than anything we experienced in two thousands fourteen or 0:15:04.640 --> 0:15:07.960 prior to that. I will tell you that um men 0:15:08.000 --> 0:15:10.240 are not being allowed to leave. I have heard the 0:15:10.280 --> 0:15:12.640 stories and spoken to people who are trying to leave 0:15:12.680 --> 0:15:15.800 with their families. Men are taken out of the buses 0:15:15.840 --> 0:15:18.640 and told to go serve, and frankly, it's only fair. 0:15:19.000 --> 0:15:22.520 Everyone needs to serve. At this point, the only hope 0:15:22.560 --> 0:15:26.120 we have is that the Ukrainian military continues what has 0:15:26.120 --> 0:15:31.480 been an extraordinarily um successful defense thus far in in 0:15:31.600 --> 0:15:36.120 terms of what's happening on the ground. Natalie, you are 0:15:36.240 --> 0:15:39.960 arguably in the Western world, the definitive expert on small 0:15:40.000 --> 0:15:43.800 business in Ukraine up to Belarus with your Horizon Capital 0:15:43.880 --> 0:15:48.120 as well. Please your opinion of how Mr Putin if 0:15:48.120 --> 0:15:52.160 he takes Ukraine and if we assume he's taken Belarus, 0:15:52.640 --> 0:15:57.240 what is his threat to the Baltic States. There's no 0:15:57.320 --> 0:16:00.480 question that President Putin has explained to the world very 0:16:00.520 --> 0:16:03.280 clearly that he believes the collapse of the Civiet Union 0:16:03.520 --> 0:16:06.400 was a mistake. It is also very clear that he 0:16:06.440 --> 0:16:10.520 has absolutely no problem attacking unprovoked peaceful countries, as he's 0:16:10.520 --> 0:16:13.520 doing right now in Ukraine. So obviously the Baltics should 0:16:13.520 --> 0:16:18.720 be very concerned that their next extraordinarily concerned Natalie. One 0:16:18.720 --> 0:16:21.560 more question, I may and an arduous warning for you 0:16:21.680 --> 0:16:25.760 and the news flow as well. We have sanctions. I 0:16:25.800 --> 0:16:28.280 don't mean to be trite, but from where you sit 0:16:28.400 --> 0:16:35.080 and with your experience, to sanctions work, Sanctions that are 0:16:35.200 --> 0:16:39.400 weak end or are doled out too slowly will not 0:16:39.480 --> 0:16:43.040 work because this is not about the effort. Cannot be about, 0:16:43.120 --> 0:16:44.880 you know, seeing what happens in a month or two 0:16:44.920 --> 0:16:47.080 in the Russian economy. What we need to do our 0:16:47.120 --> 0:16:51.440 sanctions that create such a dire response to what they're 0:16:51.440 --> 0:16:54.640 doing that it causes the elites in Russia to think twice. 0:16:54.720 --> 0:16:57.080 If it doesn't cause President Putin to do so, at 0:16:57.160 --> 0:17:01.080 least it causes the elites. Therefore, all of the banking 0:17:01.120 --> 0:17:06.840 system swift. It has to be eliminating the sanctioning all 0:17:06.840 --> 0:17:08.960 the state owned energy companies, and it has to be 0:17:09.000 --> 0:17:12.600 done immediately. It cannot be done in ranches. Hundreds of 0:17:12.640 --> 0:17:15.960 people are dying every hour. We do not have time 0:17:16.280 --> 0:17:19.480 for tranches. It also needs to be more than money. 0:17:19.800 --> 0:17:22.760 It needs to be kicking out and ending our diplomatic 0:17:22.760 --> 0:17:26.159 relationships with Russia. There should not be a diplomat of 0:17:26.240 --> 0:17:30.360 Russia enjoying peace and democracy in our western countries if 0:17:30.359 --> 0:17:34.160 they will not allow Ukrainians to joy peace and democracy. 0:17:34.200 --> 0:17:36.480 So there are a variety of things, and it needs 0:17:36.520 --> 0:17:41.120 to be massive, urgent, meaningful, and it will have an effect. 0:17:41.600 --> 0:17:45.399 But dolling it out in tranches over a period of 0:17:45.440 --> 0:17:48.919 weeks absolutely not not. I remember first talking to you 0:17:48.960 --> 0:17:51.960 about eight years ago and it's saddening that we're having 0:17:51.960 --> 0:17:55.280 this conversation still into it again eight years later. Natalie, 0:17:55.359 --> 0:17:59.040 Thank you, Natalie Jarresco that the former Ukraine Finance Minister 0:18:06.080 --> 0:18:09.119 John on the liquidity of the financial system of Europe. 0:18:09.480 --> 0:18:11.879 We have the right guests. Let's get to Tony Chris Sensei, 0:18:12.040 --> 0:18:15.359 market strategist and portfolio manager at PIMCO. Tell you what 0:18:15.400 --> 0:18:17.880 I'd love straight off the bat is just your observations 0:18:18.080 --> 0:18:19.800 in the last twenty four hours, how the market has 0:18:19.800 --> 0:18:24.320 been functioning, what you've been seeing. It does seem investors 0:18:24.359 --> 0:18:26.639 are doing what they often do, which is take a 0:18:26.720 --> 0:18:28.600 leap of faith. In fact, all of the debt that 0:18:28.680 --> 0:18:31.080 exists in the world exists in part because of that 0:18:31.200 --> 0:18:34.680 leap of faith. Investors have to have confidence in cash flows, 0:18:34.680 --> 0:18:39.280 whether it be to bond investors, to equity investors being dividends, buyback, etcetera. 0:18:40.119 --> 0:18:43.280 Seems they're retaining that. Uh, and we we know that 0:18:43.359 --> 0:18:49.040 over time human beings, generally speaking, sure remarkable ability to adapt. 0:18:49.480 --> 0:18:51.840 That's the phrase keep calm and carry on is a 0:18:51.920 --> 0:18:55.920 phrase you of course attributed to England in the World 0:18:55.920 --> 0:18:59.240 War Two. And Winston Churchill is if there's a feeling 0:18:59.359 --> 0:19:03.080 that investors tend to have. And so it's not a 0:19:03.200 --> 0:19:06.679 shock that the echoes from recent inflation data at the 0:19:06.720 --> 0:19:10.880 FED at least are louder than the rumblings in Ukraine. 0:19:11.080 --> 0:19:15.399 It's said state of affairs. But this finance and the 0:19:15.440 --> 0:19:18.400 way things are tony just right now and the here 0:19:18.440 --> 0:19:20.680 and now, there is an issue that things are moving 0:19:20.720 --> 0:19:24.639 so quickly that sometimes parts of the marks markets actually 0:19:24.680 --> 0:19:27.240 do break, and people are looking for potential nodes of 0:19:27.240 --> 0:19:31.159 a contagion, particularly in money markets with the Russian sanctions 0:19:31.160 --> 0:19:34.879 on particular oligarchs, particularly with a flight to cash amid 0:19:35.000 --> 0:19:37.600 all the uncertainty. Have you seen any signs of that? 0:19:37.680 --> 0:19:40.000 Are you looking for that? As we do see all 0:19:40.040 --> 0:19:43.840 of these developments really evolving in real time, there remains 0:19:44.119 --> 0:19:48.560 ample financial liquidity in in the global financial system, clearly 0:19:48.640 --> 0:19:52.640 in Europe, also Asia, and of course the United States. 0:19:52.640 --> 0:19:55.920 So the the easiest cage to look at is the 0:19:55.960 --> 0:20:01.080 repo overnight transactions. The exchange that occurs betwe swen uh 0:20:01.200 --> 0:20:05.040 two parties between securities in cash that's still extraordinarily low, 0:20:05.400 --> 0:20:08.480 reflecting the surfeit of money that exists in the system. 0:20:08.520 --> 0:20:11.879 And even if there were some tightening of conditions in 0:20:11.920 --> 0:20:14.840 that realm, we would expect the central banks to do 0:20:14.920 --> 0:20:17.800 what they always do is, which is read up printing presses, 0:20:18.280 --> 0:20:21.000 and they've certainly shown a remarkable ability to do that 0:20:21.040 --> 0:20:24.119 in the last decade or so, so perhaps liquidity is 0:20:24.359 --> 0:20:27.240 consistent or at least ample. However, there has been a 0:20:27.320 --> 0:20:31.120 huge divergence right now going between the US and Europe 0:20:31.240 --> 0:20:34.359 with respect to what the impact from the Ukrainian conflict 0:20:34.640 --> 0:20:36.600 could be. We just get this headline at the ECB 0:20:36.680 --> 0:20:40.000 s Lane sees the Ukrainian war shaving up to zero 0:20:40.000 --> 0:20:43.159 point four percent from the g d P. This is 0:20:43.200 --> 0:20:46.600 according to Reuter's how much have you shifted your view 0:20:46.840 --> 0:20:49.119 on how quickly the e c B could move versus 0:20:49.119 --> 0:20:54.520 the Federal reserve on the On the margin, we think 0:20:54.560 --> 0:20:58.880 that the stress reduced, of course, increases the downside risk 0:20:58.920 --> 0:21:02.399 to global economic both. PIMCO will hold a quarterly meeting 0:21:02.520 --> 0:21:04.400 in about a week and a half in Newport Beach 0:21:04.400 --> 0:21:08.240 and around the world be a video with its investment 0:21:08.359 --> 0:21:11.440 professionals to discuss the matter. But we currently have penciled 0:21:11.480 --> 0:21:13.720 in the growth rate of in the mid threes or 0:21:13.760 --> 0:21:16.399 so for the US this year and close to four 0:21:16.760 --> 0:21:20.199 somewhere in high threes for Europe. The downside risk, of 0:21:20.240 --> 0:21:23.440 course emerges from a drop in confidence in Europe more 0:21:23.520 --> 0:21:26.159 than it would be in the United States, and the 0:21:26.200 --> 0:21:29.239 impact of energy costs, which is greater in Europe than 0:21:29.280 --> 0:21:31.560 it will be in the United States, and so there 0:21:31.640 --> 0:21:34.480 is some impact there, but it's probably too soon to 0:21:34.520 --> 0:21:38.440 say that the numbers will calm down. And importantly, looking 0:21:38.440 --> 0:21:42.240 at the two years story, one should remain sanguine right 0:21:42.240 --> 0:21:45.680 now with a high degree of caution about the the 0:21:46.000 --> 0:21:49.920 the predictability of that though with respect to the global 0:21:49.960 --> 0:21:53.280 album and that's what markets scene three reflecting with the 0:21:53.320 --> 0:21:56.760 current information it has, things could change very rapidly, and 0:21:56.840 --> 0:22:01.159 so we'd say about the outlook, there's a degree of uncertainty, 0:22:01.200 --> 0:22:03.280 and so one wants to have portfolios at a liquid, 0:22:03.880 --> 0:22:07.159 resilient and agile on this climate. Does that mean more cash, Tony, 0:22:08.440 --> 0:22:11.439 a little more cash, not to say, uh, sell everything, 0:22:11.520 --> 0:22:16.360 of course, we think right now, just simply maintaining flexibility. 0:22:16.480 --> 0:22:21.880 This might mean choosing more liquid assets, staying in, staying invested, 0:22:21.960 --> 0:22:24.679 but simply choosing or liquid assets. For example, on the 0:22:24.680 --> 0:22:28.679 credit markets, an institutional investor could choose a credit index 0:22:28.880 --> 0:22:32.280 rather than cash instruments because the amount of money on 0:22:32.359 --> 0:22:35.199 the bid and offer, so called quote depth, tends to 0:22:35.200 --> 0:22:39.360 be rather large in comparison. Sony always wantedful to catch 0:22:39.440 --> 0:22:43.359 up with you important moments, Johns, thank you, sir of 0:22:43.480 --> 0:22:53.160 Pimcoake C. Michan joins us. Now for principal global Investors, Seeming. 0:22:53.240 --> 0:22:56.000