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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Find the Bloomberg Markets

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Speaker 1: Podcast on Apple Podcast or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. It is time now for

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Speaker 1: Bloomberg Opinion. Let's bring in Bloomberg Opinion columnist and of

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Speaker 1: course editor in chief emeritus of Bloomberg News, also the

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Speaker 1: co founder child Be said Bloomberg News, Matt Winkler. Matt, welcome,

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Speaker 1: We're speaking to you in the Bloomberg Interactive Broker's studio.

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Speaker 1: Your latest column. Trump inherited the world's best economy in

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Speaker 1: twenties seventeen and helped make it one of the worst.

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Speaker 1: That's the main contention of the column. Matt explain to

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Speaker 1: those who don't fully understand what the president could have

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Speaker 1: done to actually hurt the economy, as everyone knows by now.

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Speaker 1: And it's by the way, great to be with you, Vonnie.

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Speaker 1: The coronavirus pandemic was something that all of us had

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Speaker 1: to prepare for. When I say all of US, every

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Speaker 1: country free. Uh. There was no question about that. And

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Speaker 1: instead of preparing, the Trump administration, led by Trump himself,

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Speaker 1: was defying science, muddling the message. UH. He was constantly

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Speaker 1: attacking people for all kinds of reasons, and so there

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Speaker 1: was massive confusion. So instead of any kind of coordinated

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Speaker 1: attempt to contain the virus, UH, it was essentially every

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Speaker 1: state was on its own. And some states did a

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Speaker 1: very good job shutting down, like New York and New Jersey, UH,

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Speaker 1: in Massachusetts and pretty much all of New England. But

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Speaker 1: other states UH took Trump's message and said, we can

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Speaker 1: open the economy. We don't have to fear about anything.

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Speaker 1: In fact, Trump himself said the virus would go away.

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Speaker 1: That confusion made it possible for the economy to actually

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Speaker 1: be hit in all kinds of ways, because instead of

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Speaker 1: a coordinated effort like you had in France or Germany

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Speaker 1: or any number of developed nations, you had a completely

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Speaker 1: confused one. And so our jobless numbers are off the charts,

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Speaker 1: as you know, I mean four plus unemployment in April

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Speaker 1: even as down to eleven. That's more than three times

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Speaker 1: the UK's rate. So we are leading, as you know,

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Speaker 1: in total number of cases, and we are leading in

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Speaker 1: debts um for a country that historically has prided itself

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Speaker 1: on its science, prided itself on its medical care, we're

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Speaker 1: a complete mess now. And there's no sign that our

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Speaker 1: unemployment rate, which is the worst than Sari Truan was

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Speaker 1: in the White House, is going to get anything close

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Speaker 1: to what it was before the pandemic started. So, yes,

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Speaker 1: it's a combination of all these things, and clearly he

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Speaker 1: has made it much worse than it had to be.

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Speaker 1: So I guess, you know, this is my first pandemic,

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Speaker 1: global pandemic. So but I was just shocked the fact

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Speaker 1: that it is a national problem. Why do we not

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Speaker 1: have a national slash federal response. I was shocked to

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Speaker 1: see governors basically, as you say, kind of having to

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Speaker 1: fend for themselves and some doing better than others. Why

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Speaker 1: do you think initially there wasn't and there still is

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Speaker 1: not today, a you know, coherent federal response because of

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Speaker 1: leadership at the top. Because there was contempt for a shutdown,

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Speaker 1: which was what was required. There was contempt for universal masking,

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Speaker 1: which was the message from on high. So the federal

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Speaker 1: government essentially abdicated its responsibility to Americans and left it

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Speaker 1: to the states to figure it out. Um. And so

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Speaker 1: that's why we're dealing with this the way we are.

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Speaker 1: Not the case in the UK, not the case in France,

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Speaker 1: not the case in Germany, not the case really anywhere else.

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Speaker 1: Certainly not the case in Hong Kong, which has a

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Speaker 1: great record because they have experience going all the way

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Speaker 1: back to the beginning of this century with stars. Uh,

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Speaker 1: and they know that masks work, which is why the

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Speaker 1: pandemic basically has disappeared into insignificance in Hong Kong, which

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Speaker 1: is one of the most densely populated places on the earth.

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Speaker 1: So if Hong Kong would do it, we certainly could

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Speaker 1: have two. But are you know federal response was non existent.

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Speaker 1: The richest country in the world that can borrow at

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Speaker 1: probably the lowest rate in the world and from anybody

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Speaker 1: and hold onto it for the longest time. Why isn't

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Speaker 1: there more anger Matt at the fact that one thirty

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Speaker 1: thousand Americans have died. I'm sure some of them would

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Speaker 1: have died anyway, but perhaps not that money. Well, I

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Speaker 1: think there is anger, Um, you know, I think, uh,

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Speaker 1: there was an assumption at the beginning of the year

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Speaker 1: before the pandemics art that it was a very good

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Speaker 1: chance Trump would have a second term um because the

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Speaker 1: economy was relatively speaking, doing well. That is no longer

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Speaker 1: the case. I mean, you read Bloomberg or any any

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Speaker 1: other news organization right now, and every pole in every

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Speaker 1: so called battleground state shows the tide has shifted dramatically

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Speaker 1: away from him. So I have to believe a lot

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Speaker 1: of this has to do with the pandemic itself, is

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Speaker 1: that he's so bungled it, mishandled it, and compounded the

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Speaker 1: suffering for so many people that even people who were

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Speaker 1: willing to give him a chance again have no longer

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Speaker 1: come around to that view. Is there a chance, Matt,

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Speaker 1: that this, you know, not only impacts the president but

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Speaker 1: also perhaps the Republican Party in generals as we think

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Speaker 1: about the Senate in Yeah, look, it's sort of really

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Speaker 1: above my knowledge to to go further or on politics,

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Speaker 1: but yeah, it stands to reason that the president's enablers

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Speaker 1: are going to be in the same political peril as

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Speaker 1: he will be because they're part of the problem. So

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Speaker 1: if you have governors, for example, who said you don't

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Speaker 1: need to wear a mask, we should reopen the economy

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Speaker 1: made something that should have been a scientific matter a

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Speaker 1: political issue. Those people who are mostly Republicans are going

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Speaker 1: to probably pay for that mistake, which is what it is.

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Speaker 1: It's a mistake. But you point up in your column

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Speaker 1: that Funds, Sorry, Matt, you point out in your column

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Speaker 1: that Funds Italy and Spain were similarly victimized. But their

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Speaker 1: unemployment is about half the percentage of Americans out of work,

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Speaker 1: which is a phenomenal track record. Really, what about the

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Speaker 1: UK though you don't really criticize Boris Johnson and yet

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Speaker 1: their husband severe criticism of how he's handled a crisis. Well,

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Speaker 1: I think that's right, except that he actually did get

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Speaker 1: delivit nineteen. He suffered, his voters saw that he suffered,

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Speaker 1: and when he recovered, fortunately uh, he did have a message,

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Speaker 1: and the message was we have to do this in

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Speaker 1: a concerted way. So the UK may have been slow initially,

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Speaker 1: and there may have been some skepticism at the top,

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Speaker 1: but the UK did actually uh come around and has

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Speaker 1: been uh since then. Since Boris Johnson was victimized, they

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Speaker 1: have had a pretty good record. And their unemployment rate,

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Speaker 1: of course is you know, well below ours, and also

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Speaker 1: their economy is is performing better for the time being.

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Speaker 1: Matt Winkler, thanks so much for joining us. We appreciate that.

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Speaker 1: Matt Winkler's co founder of Bloomberg News and editor in

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Speaker 1: chief emeritus of Bloomberg News. Fascinating columns just kind of

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Speaker 1: comparing the US response to the pandemic versus other countries

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Speaker 1: around the world and the particulars it relates to the

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Speaker 1: economic impact. And you look at data such as unemployment

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Speaker 1: for example, and likely a GDP print that we're gonna

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Speaker 1: get soon, it's gonna be the US does not compare well. Uh,

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Speaker 1: and Matt's com kind of calls that out. You can

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Speaker 1: see Matt's work at Bloomberg dot com slash Opinion, plus

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Speaker 1: if you're on the terminal O P I n go,

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Speaker 1: you can see all of Matt's opinion work plus that

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Speaker 1: of Bloomberg Opinion, some great great work put out daily

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Speaker 1: basis by the good folks at Bloomberg Opinion. Well, this

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Speaker 1: COVID pandemic and the resulting economic dislocation has impacted all

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Speaker 1: sorts of industries. That includes the residential real estate business

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Speaker 1: in markets across the country, including a lot of luxury markets.

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Speaker 1: To get the latest, we welcome. Best Friedman. She's CEO

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Speaker 1: Brown Harris Stevens. Best, thanks so much for joining us here.

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Speaker 1: Give us a snapshot. Let's start with Manhattan kind of

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Speaker 1: the real estate market here. This was a market that

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Speaker 1: was hit early and hit very hard by the pandemic.

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Speaker 1: Where are we now, good morning, Thank you for having me. Well,

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Speaker 1: you know, we just opened up on June set, which

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Speaker 1: meant real estate professionals or were able to show. So

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Speaker 1: that's been very good. But it's slow and steady. You know,

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Speaker 1: people are still trying to figure things out. We're very

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Speaker 1: much in the discovery mode after months of being shut down,

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Speaker 1: not being able to show properties, and so now everybody's

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Speaker 1: trying to figure out what they're gonna do. Are they

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Speaker 1: gonna rent, are they going to sell? Do they want

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Speaker 1: to buy? And so agents are trying to work through

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Speaker 1: all that, and we're seeing new properties come on the

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Speaker 1: market every day, a lot of rentals as well, and

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Speaker 1: so at this point we're still looking at the data

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Speaker 1: and trying to figure out what's going to be in

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Speaker 1: the next quarter, in this quarter, the third quarter, so

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Speaker 1: it's still new and um slow and steady is what

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Speaker 1: I would say about New York City. But other markets

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Speaker 1: like Palm Beach. You know, our Connecticut market has done

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Speaker 1: incredibly well. There's been you know, there's not enough supply there.

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Speaker 1: Uh And the Hampton's another market that's done very well. Uh.

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Speaker 1: So New York, yes, has been harder because of you know,

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Speaker 1: it's the city, it's vertical living. It offers different challenges

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Speaker 1: that other places don't have. Because we're getting into elevators,

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Speaker 1: were in lobbies with each other, you know. So, um,

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Speaker 1: it's gonna be a little bit slower for our recovery best.

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Speaker 1: You know. Anecdotally, I think a lot of people thought,

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Speaker 1: are particularly people who would lived through the Great Financial

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Speaker 1: Crisis in New York City, that there would be a

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Speaker 1: big downdraft in prices because people were suddenly put out

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Speaker 1: of work or they were, you know, uncertain about their future.

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Speaker 1: Perhaps they needed to spend money on medical bills or

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Speaker 1: put money aside with their parents or what have you.

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Speaker 1: Did that happen? Could that happen still? I mean, I

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Speaker 1: think it's possible. You know, we're still trying to unravel

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Speaker 1: all of this. I think there's a lot of credence

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Speaker 1: in the ability of the BED and the Treasury to

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Speaker 1: bring about this economic recovery. So that's been good. But

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Speaker 1: you know, people businesses are going to close down. We

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Speaker 1: know restaurants will um And I think there's a lot

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Speaker 1: of uncertainty as this pandemic looms. We're seeing upticks in

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Speaker 1: other places where it has been mismanaged by certain governors

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Speaker 1: for sure, um And I think it's going to take

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Speaker 1: a little bit of time to figure out where everybody is.

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Speaker 1: Um and And again we have to keep in mind

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Speaker 1: in New York City as far as prices go for

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Speaker 1: real estate, before the pandemic, we work already in a

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Speaker 1: price correction and we were doing very well. The market

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Speaker 1: was fluid and we were correcting. Um and So now

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Speaker 1: I do expect there'll be a further correction as this

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Speaker 1: all untangled in some places. You know, it depends and

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Speaker 1: when there's oversupply, Uh, people are going to have to

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Speaker 1: adjust their prices because we know not all square feed

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Speaker 1: are created equally, depends on what's available. Yeah, let's talk

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Speaker 1: about the concern about it maybe a intermediate or longer

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Speaker 1: term exodus from New York City. I live here in

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Speaker 1: North Jersey and the real estate market, particularly on the

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Speaker 1: high end, is really really heated up as New Yorkers

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Speaker 1: look to get out of the city for various reasons,

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Speaker 1: pandemic related. What's your longer term view of New York.

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Speaker 1: Some folks are suggesting this is the beginning of a

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Speaker 1: very dark period for uh New York real estate. You know,

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Speaker 1: I'll be honest, you know, I am. I do have

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Speaker 1: my earns. Uh. You know, we had had been facing

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Speaker 1: headwinds when it came to all this legislation in Albany

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Speaker 1: before this pandemic hit. I'm sure you know the fat,

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Speaker 1: the salt deduction, the cap was an issue, that the

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Speaker 1: push up in the mansion tax. And now there's this

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Speaker 1: looming Pieta tear tax that's push a lot of New

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Speaker 1: Yorkers out already, and so now you have the pandemic

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Speaker 1: um which is kind of a big bowl of bad

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Speaker 1: for New Yorkers. But do I think everybody's gonna leave

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Speaker 1: and it's gonna be a mass exodus? You know, I

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Speaker 1: don't have a crystal ball. I don't believe. So. I

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Speaker 1: think quality of life matters to people in New York

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Speaker 1: City is a place where people just want to live

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Speaker 1: because of the culture in the theater and the food.

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Speaker 1: We know what New York city is about you know,

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Speaker 1: it is the greatest city in the world. So I

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Speaker 1: do think some people may leave for a period of time.

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Speaker 1: But I don't see it like the seventies where this

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Speaker 1: is there was this like white flight out of the city.

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Speaker 1: I think we'll have a little bit of a mixed bac.

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Speaker 1: Some people will leave, some people will come back. Some

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Speaker 1: people may want to double down here like me, you know,

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Speaker 1: and stay here and uh, you know, and wait while

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Speaker 1: the city gets back together. But we are facing headwinds.

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Speaker 1: There's no if and or butts about that. We have

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Speaker 1: a lot of issues, um that we're trying to grapple with.

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Speaker 1: So the amount of high rises that get built in

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Speaker 1: New York is quite phenomenal, and you know, in many

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Speaker 1: cases the number of apartments per floor is been pretty massive.

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Speaker 1: So you see these huge numbers of people in buildings.

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Speaker 1: Will that continue bes or will developers have to figure

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Speaker 1: out new ways of spacing people out. I mean, that's

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Speaker 1: that's it's a question mark. I mean I don't think

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Speaker 1: I don't think they. I think people may gravitate towards

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Speaker 1: maybe living in buildings that have less people in it

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Speaker 1: for a time. But I may and maybe some developers

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Speaker 1: will start to build buildings with that have less people

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Speaker 1: on the floor, you know, But I don't I think

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Speaker 1: it's going to be hard to do that. I don't

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Speaker 1: know if the economics will make sense. And what are

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Speaker 1: you asking price per square foot if you only have

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Speaker 1: fifteen units in a building, um, and you know, just

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Speaker 1: to cost the building in land in New York City

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Speaker 1: all has to make sense for people. So I don't

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Speaker 1: know if they're going to reinvent that. They may look

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Speaker 1: at things differently. They may set up the space differently

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Speaker 1: and make sure people have enough, maybe have outdoor space,

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Speaker 1: or have home offices and the things that people are

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Speaker 1: looking for. But I don't know if they're going to

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Speaker 1: rejigger how they how they're you know, building buildings. That's

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Speaker 1: a question you know that we'll see as this UM

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Speaker 1: as we go down the line with the pandemic. I

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Speaker 1: don't know. The good question though, and interesting best how

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Speaker 1: about the international buyer on the margin? Over the last

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Speaker 1: you know, ten years, the international buyers really pushed the

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Speaker 1: high end of the New York real estate market up.

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Speaker 1: As I looked down when I was in our Bloomberg

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Speaker 1: office to look down fifty seven Street, we'd see all

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Speaker 1: these just ridiculously tall towers that just stick out of

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Speaker 1: nowhere or blight on the skyline in my personal opinion,

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Speaker 1: but and I was my understanding was a lot of

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Speaker 1: international buyers were supporting those types of buildings. Where is

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Speaker 1: the international buyer today? Yeah, we call that. That's been

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Speaker 1: called billionaires row just so you know, um, you know,

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Speaker 1: you know, the internet national buyers. We're not seeing a

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Speaker 1: lot of that. The only thing I have heard of

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Speaker 1: recently was early on when the pandemic hit, there was

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Speaker 1: an investor from South America that bought a block of

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Speaker 1: units that a project on the West Side side unseen. Um.

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Speaker 1: Other than that, I have heard very little about any

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Speaker 1: international buyers in New York City. Um. I think that's

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Speaker 1: dried up a bit, and I wonder, you know when

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Speaker 1: that will will that come back and when? But you know,

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Speaker 1: the majority of projects, if you ask developers, typically they

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Speaker 1: say of the people that bought were international and the

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Speaker 1: rest were domestic. So you know, but I do think

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Speaker 1: that that's that's very quiet right now, and I think

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Speaker 1: it's a it's a it's a real point to consider this.

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Speaker 1: Where are your popular areas right now in New York

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Speaker 1: City and and and just more generally the twice state areas.

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Speaker 1: You know, I would say we're seeing a lot of

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Speaker 1: the West Side is very busy. Downtown is always a

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Speaker 1: place where we I spoke to an agent yesterday who's

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Speaker 1: in a bidding more on something downtown. Um, and that's

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Speaker 1: not the I've heard a few different agents tell me

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Speaker 1: that they're you know, embidding more as with stuff in

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Speaker 1: downtown areas. Thank you so much for speaking with us today.

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Speaker 1: Phenomenal intelligence there from Best Friedman and A Brown, Harris

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Speaker 1: Stevens Well andres Manuel Lopez Obradador or am Low is

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Speaker 1: coming to the United States that he is the President

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Speaker 1: of Mexico and the president is coming to a visit

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Speaker 1: President Trump today to get a sense of kind of

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Speaker 1: what the agenda might be and what the outcomes could be.

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Speaker 1: We welcome Duncan Would, Director of the Wilson Centers Mexico Institute. Duncan,

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Speaker 1: thanks so much for joining us here. What is the

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Speaker 1: purpose of this trip, Well, the official purposes is actually

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Speaker 1: to celebrate the coming into force of the U S

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Speaker 1: n p A agreement, which began last last week on

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Speaker 1: July one. But a lot of people are questioning really

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Speaker 1: why it's necessary to come up and talk about this

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Speaker 1: once all the hard work has been done. And so

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Speaker 1: the Mexican government and the US government has said that

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Speaker 1: there is an important opportunity to discuss bilateral relations in

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Speaker 1: the context of the pandemic, but unfortunately really don't have

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Speaker 1: much more detail than that. We suspect that there will

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Speaker 1: be conversations about drugs and organized crime in Mexico. We

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Speaker 1: suspect that there will be conversations about ongoing collaboration on

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Speaker 1: stopping Central American migration UM And the most, perhaps the

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Speaker 1: most intriguing part of the visit is going to be

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Speaker 1: a dinner that will be held at the White House

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Speaker 1: tonight where anders Manuel Lobrosovador, President of Mexico, and President

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Speaker 1: Donald Trump will sit down with about twenty business leaders

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Speaker 1: from both countries. And what we expect is that in

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Speaker 1: that dinner a lot of awkward questions could be raised

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Speaker 1: by the US business community about the way that President

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Speaker 1: Lobosovador is running the Mexican economy, and in particular regulatory

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Speaker 1: and legislative changes that are threatening the certainty that investors

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Speaker 1: have enjoyed up to this point. Well, what certainty have

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Speaker 1: investors enjoyed. It feels like it's been such a volatile

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Speaker 1: time and the relationship between President Trump and Amlow has

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Speaker 1: been extremely strained. And secondary to that question, what changed.

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Speaker 1: Amlow is now suddenly a fan of President Trump. It's

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Speaker 1: an extraordinary relationship that we've seen developing over the past

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Speaker 1: few years. I remember that back in two thousand and eighteen,

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Speaker 1: when Lopez Overdor was still a candidate for the presidency,

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Speaker 1: he published a book called A Year Trump, which translates

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Speaker 1: into Listen Up Trump, where he provided responses to all

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Speaker 1: of President Trump's that attacks, verbal attacks on Mexico and

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Speaker 1: the President. Lobos Overdoor, as a candidate, had said that

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Speaker 1: he was a man that could stand up to Trump.

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Speaker 1: Immediately after winning that victory in July of twenty eighteen

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Speaker 1: in the presidential election, the two men, however, began to

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Speaker 1: develop a relationship um Some people even speculated this would

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Speaker 1: develop into a some kind of bromance. They seem to

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Speaker 1: be so friendly with each other and andress Manuel Lobos

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Speaker 1: Overdor has consistently said that he wants a relationship with

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Speaker 1: mutual respect with the United States, and every time that

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Speaker 1: there has been provocation from the northern side of the border.

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Speaker 1: Then anders Manuel has refused to respond, instead saying that

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Speaker 1: he wants relationships of love and peace with the world.

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Speaker 1: And so what we've seen is that over time Donald

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Speaker 1: Trump has actually come to recognize Lopez Overdored as a friend,

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Speaker 1: as a partner, and you know, that's that's an extraordinary

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Speaker 1: achievement in many ways. But what I think a lot

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Speaker 1: of people are questioning is whether or not this will

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Speaker 1: play out well for the Mexican president, both at home

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Speaker 1: and here in the United States, in particular with Mexican

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Speaker 1: migrant communities who have been left out of this visit.

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Speaker 1: And you know, let's not forget that those same Mexican

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Speaker 1: migrants are sending record levels of remittencies back to their

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Speaker 1: families in Mexico at a time when they leave it

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Speaker 1: the most duncan what's the feeling in Mexico about this visit?

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Speaker 1: I mean, we have a U S presidential election just

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Speaker 1: four months away here, I mean, is there a concern

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Speaker 1: here that this is just a political stunt by amald

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Speaker 1: in support of President Trump. So there's all kinds of

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Speaker 1: speculation in Mexico. Back in I think it was April

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Speaker 1: of this year, um, Mexico came to a deal with

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Speaker 1: with Opeque plus on cutting oil production, but it wasn't

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Speaker 1: able to deliver as much of a cut as the

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Speaker 1: OPEC plus was demanding. And in that case, President Trump

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Speaker 1: said that the United States would cut its production even

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Speaker 1: more so as to compensate for Mexico not being able

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Speaker 1: to deliver, and in exchange, Mexico kind of owed the

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Speaker 1: United States of favor. And in Mexico a lot of

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Speaker 1: people are saying, is this the favor that Donald Trump demanded?

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Speaker 1: We have no evidence of that the case. However, what

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Speaker 1: we do see is that there is a lot of

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Speaker 1: concern amongst the intellectual elites in Mexico that this does

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Speaker 1: set of a bad precedent, in particular because um, in

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Speaker 1: addition to meeting with President Trump during what is clearly

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Speaker 1: a you know, a very vibrant and dynamic campaign year,

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Speaker 1: electoral year here in the United States, there is no

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Speaker 1: meeting planned with candidate former Vice President Joe Biden, and

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Speaker 1: the folks from the Biden campaign have been coming out

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Speaker 1: and tweeting that they don't think that this is appropriate,

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Speaker 1: that they think this is the wrong time for Amlow

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Speaker 1: to come to UH to Washington. So it has become

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Speaker 1: highly controversial in that way. But let me just tell

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Speaker 1: you one thing, Amlow. Does a president love the redor

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Speaker 1: does seem to have his finger on the pulse of

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Speaker 1: the Mexican electorate because fift of Mexicans support him making

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Speaker 1: the trip at this time, very very briefly were of time.

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Speaker 1: But how is Mexico doing on coronavirus? Unfortunately, Mexically is

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Speaker 1: doing extremely badly. Um you know, I mean here in

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Speaker 1: the United States, we faced enormous problems. In Mexico, we

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Speaker 1: have a terrible situation. We're seeing the number of dead

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Speaker 1: rising over We're seeing that the reporting is really inadequate,

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Speaker 1: so we really don't know the full extent of the crisis.

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Speaker 1: And certainly the Mexican healthcare system, he's under enormous strain,

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Speaker 1: and so this is a true crisis for the country

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Speaker 1: and in fact, it is a true crisis for the

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Speaker 1: Mexican president, and many people have speculated that's another reason

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Speaker 1: why he wants to distract attention and con visit the

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Speaker 1: United States. At this point, we have to live there

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Speaker 1: with Duncan, thank you for all of the intelligence. Duncan

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Speaker 1: would is director of the Mexico Institute at the Wilson

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Speaker 1: Center of Washington, d C. And of course we will

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Speaker 1: be keeping an eye out on all of those meetings

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Speaker 1: today with am Low, and of course the dinner this

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Speaker 1: evening as well. Now, let's turn back to the markets

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Speaker 1: and bring in somebody who can tell us exactly what's

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Speaker 1: going on, not just in the United States but internationally.

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Speaker 1: Clive Gilmore is CEO and group ce IO at Montreal

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Speaker 1: Investment Partners about forty one and a half billion dollars

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Speaker 1: in assets under management, and he joins US. Now, Clive,

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Speaker 1: thanks for joining. We're seeing a continued creep higher. In fact,

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Speaker 1: it's it's more like a cantor hire these days, the

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Speaker 1: odd day where we're seeing a down day. What's the

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Speaker 1: basis for the simism in this market? Yeah, thank you.

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Speaker 1: I think the key issue is one of liquidity. I

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Speaker 1: think it's been taught about quite a bit because as

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Speaker 1: we know, the backdrop economically is not a good one.

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Speaker 1: The jury is still out as to which country is

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Speaker 1: dealing with the COVID nineteen issue better. Certainly, there's been

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Speaker 1: the pickup of cases in the US, and if you've

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Speaker 1: just been looking at that data, you wouldn't believe that

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Speaker 1: the US market would go up, but it clearly has

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Speaker 1: been going up. But I think the point that I'd

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Speaker 1: really make is the difference between the type of stocks

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Speaker 1: that are going up. Um. I don't know if you're

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Speaker 1: aware of this, but if you look at global equities,

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Speaker 1: that's the US combined with all the international opportunities. The

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Speaker 1: biggest difference between so called value and growth stops historically

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Speaker 1: was in the fourth quarter of where the difference for

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00:23:49,200 --> 00:23:53,320
Speaker 1: fourteen percent. To put that into context, today, we're only

432
00:23:53,359 --> 00:23:57,560
Speaker 1: in early July and the difference between growth and value

433
00:23:57,920 --> 00:24:01,720
Speaker 1: is over. In other words, growth stops are out performing

434
00:24:01,760 --> 00:24:05,760
Speaker 1: value starts by globally year to date. So it's really

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00:24:05,800 --> 00:24:09,359
Speaker 1: a reflection of liquidity and trying to find the type

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00:24:09,359 --> 00:24:13,040
Speaker 1: of companies that are short term beneficiaries. What's happening with

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00:24:13,119 --> 00:24:17,199
Speaker 1: COVID nineteen allied to the fact that discount rates have

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00:24:17,280 --> 00:24:20,440
Speaker 1: come down so much and their future growth companies obviously

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00:24:21,440 --> 00:24:23,800
Speaker 1: so Clive, where do you see when you and your

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00:24:23,840 --> 00:24:27,080
Speaker 1: team look globally, Are there areas of the globe that

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00:24:27,160 --> 00:24:31,560
Speaker 1: you see and markets that you see compelling opportunity here?

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00:24:31,720 --> 00:24:34,640
Speaker 1: Or is the risk from the pandemic just too much

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00:24:34,640 --> 00:24:39,480
Speaker 1: of an unknown right now? Well, Clearly, the jury is

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00:24:39,520 --> 00:24:41,720
Speaker 1: out as to what will happen, as I said, and

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Speaker 1: it's difficult therefore put to pinpoint exactly how the next

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Speaker 1: two years will work out. However, one thing that it

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00:24:48,920 --> 00:24:52,520
Speaker 1: seems clear to me is nations with a greater creditor

448
00:24:52,640 --> 00:24:56,800
Speaker 1: status or companies with strong balance sheets are likely to

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00:24:56,800 --> 00:24:59,280
Speaker 1: be in a better position looking forward. And if you

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00:24:59,320 --> 00:25:02,720
Speaker 1: look at that objectively, then you're left with a number

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00:25:02,720 --> 00:25:04,920
Speaker 1: of countries which would seem to put their head above

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00:25:04,960 --> 00:25:07,920
Speaker 1: the parapet as being interesting on a long term basis.

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00:25:08,400 --> 00:25:10,440
Speaker 1: You may be surprised to him you say that one

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00:25:10,440 --> 00:25:13,040
Speaker 1: of those is Japan, and the reason for that is

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Speaker 1: that for years people have complained about return on equity

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00:25:16,760 --> 00:25:20,080
Speaker 1: in Japan, in part because Japanese companies don't have optimal

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00:25:20,119 --> 00:25:22,879
Speaker 1: balance sheets. But that cash now is proven to be

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00:25:23,000 --> 00:25:27,080
Speaker 1: very valuable because whilst they can have operational leverage that's

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00:25:27,080 --> 00:25:29,840
Speaker 1: a change in revenue and its impact on profit, they're

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00:25:29,920 --> 00:25:34,520
Speaker 1: unlikely to have the problems related to financial leverage. And

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00:25:34,640 --> 00:25:38,160
Speaker 1: from a country point of view, obviously there are countries

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00:25:38,200 --> 00:25:43,120
Speaker 1: like Norway, Switzerland, Singapore, even Australia and New Zealand that

463
00:25:43,200 --> 00:25:47,720
Speaker 1: have a much stronger fiscal position as nations themselves which

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00:25:47,760 --> 00:25:51,000
Speaker 1: you'd expect to be beneficiaries. A quick word here on

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Speaker 1: Hong Kong. You notice I admitted it from that list. Clearly,

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Speaker 1: Hong Kong does have a strong financial position, but there

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Speaker 1: are various concerns within the Hong Kong framework, its proximity

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00:26:03,280 --> 00:26:06,440
Speaker 1: to China being the obvious one. The issue with the peg,

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00:26:06,480 --> 00:26:08,760
Speaker 1: which I think you've raised before, which I think is

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00:26:08,800 --> 00:26:12,639
Speaker 1: a fascinating one because the Chinese remembe is believed to

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00:26:12,680 --> 00:26:15,680
Speaker 1: be pegged against a basket of currencies, and the Hong

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00:26:15,760 --> 00:26:19,120
Speaker 1: Kong dollar only against the US dollar. So even if

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00:26:19,960 --> 00:26:22,639
Speaker 1: President Trump wasn't saying what he was saying about the peg,

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00:26:23,080 --> 00:26:25,400
Speaker 1: but maybe pressure on the Hong Kong dollar peg at

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00:26:25,400 --> 00:26:28,280
Speaker 1: some point anyway, So I think perhaps Hong Kong is

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00:26:28,359 --> 00:26:30,720
Speaker 1: not the optimal place to look for in Asia, but

477
00:26:30,840 --> 00:26:33,840
Speaker 1: perhaps sing a pore in Japan. Do you really think

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00:26:33,920 --> 00:26:35,800
Speaker 1: that this time might be different when it comes to

479
00:26:35,840 --> 00:26:41,720
Speaker 1: the Hong Kong peg though, Clive, Yes, Actually, look, people

480
00:26:41,720 --> 00:26:44,080
Speaker 1: have always said the whole point of a peg, right

481
00:26:44,320 --> 00:26:48,200
Speaker 1: is if it breaks, it will never hold again. You can't.

482
00:26:48,320 --> 00:26:50,720
Speaker 1: It's very difficult to repeg because no one believes it's

483
00:26:50,720 --> 00:26:54,520
Speaker 1: ever going to hold. So I think that the community

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00:26:54,560 --> 00:26:59,240
Speaker 1: worldwide of investors and the monetary community more generally believe

485
00:26:59,359 --> 00:27:02,200
Speaker 1: that the Hong Kong dollar PEG is going to hold.

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00:27:02,320 --> 00:27:06,320
Speaker 1: But as I said, there's a pressure anyway, because for

487
00:27:06,520 --> 00:27:10,720
Speaker 1: some time the Chinese government will wanted to renimdify trade

488
00:27:11,040 --> 00:27:14,040
Speaker 1: within Hong Kong, and that means in the long term

489
00:27:14,119 --> 00:27:17,160
Speaker 1: you would expect greater integration with Hong Kong and China.

490
00:27:17,520 --> 00:27:19,520
Speaker 1: And if that's the case, it's difficult to believe that

491
00:27:19,560 --> 00:27:23,040
Speaker 1: one currency could be against a basket impurity, the euro

492
00:27:23,200 --> 00:27:25,840
Speaker 1: for example, and the other currency could be pegg nearly

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00:27:25,880 --> 00:27:27,880
Speaker 1: against the U. S. Dollar. That seems to make very

494
00:27:27,920 --> 00:27:31,240
Speaker 1: little sense to the long term. Clive Gilmore thanks so

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00:27:31,320 --> 00:27:34,320
Speaker 1: much for joining us. We appreciate it. As always. Claud Gilmore,

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Speaker 1: CEO and group ce IO at Montreal Investment Partners say

497
00:27:38,640 --> 00:27:41,359
Speaker 1: about forty one billion dollars on the management based in London,

498
00:27:41,359 --> 00:27:45,680
Speaker 1: giving us as always a very broad perspective on global

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00:27:45,920 --> 00:27:50,320
Speaker 1: investing around the world where opportunities might be. And again,

500
00:27:50,359 --> 00:27:53,680
Speaker 1: as Clive was saying that there's certainly lots of uncertainty

501
00:27:53,680 --> 00:27:56,200
Speaker 1: out there as it relates to the pandemic, but also

502
00:27:56,320 --> 00:27:59,480
Speaker 1: some opportunities out there. Again, we have central banks around

503
00:27:59,640 --> 00:28:02,560
Speaker 1: the lobe providing liquidity. It's not just about to reserve

504
00:28:02,600 --> 00:28:04,199
Speaker 1: at the e c B, the Bank of Japan and

505
00:28:04,240 --> 00:28:07,680
Speaker 1: others providing tremendous amounts of liquidity in this market. And uh,

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Speaker 1: you know, as many strategists have stated, it's kind of

507
00:28:10,160 --> 00:28:13,200
Speaker 1: a backstop for risk assets and we're seeing that in

508
00:28:13,240 --> 00:28:15,240
Speaker 1: the market again today as the SNP is up about

509
00:28:15,240 --> 00:28:19,200
Speaker 1: seven tenths at one percent. Thanks for listening to Bloomberg

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00:28:19,240 --> 00:28:22,639
Speaker 1: Markets podcast. You can subscribe and listen to interviews at

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00:28:22,640 --> 00:28:26,239
Speaker 1: Apple Podcasts or whatever a podcast platform you prefer. I'm

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00:28:26,320 --> 00:28:29,280
Speaker 1: Bonnie Quinn. I'm on Twitter at Bonnie Quinn, and I'm

513
00:28:29,280 --> 00:28:32,360
Speaker 1: Paul Sweeney. I'm on Twitter at pt Sweeney. Before the podcast,

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00:28:32,400 --> 00:28:34,920
Speaker 1: you can always catch us worldwide at Bloomberg Radio