WEBVTT - P&L: Lieberman Says We'll See a Strong Third Party Before 2020 0:00:04.760 --> 0:00:08.080 Welcome to the Bloomberg pm L podcast. I'm Pim Fox. 0:00:08.119 --> 0:00:11.200 Along with my co host Lisa Abramowitz. Each day we 0:00:11.280 --> 0:00:14.480 bring you the most important, noteworthy, and useful interviews for 0:00:14.520 --> 0:00:16.880 you and your money, whether at the grocery store or 0:00:16.920 --> 0:00:20.680 the trading floor. Find the Bloomberg p L podcast on iTunes, 0:00:20.840 --> 0:00:30.080 SoundCloud and at Bloomberg dot com. It is my pleasure 0:00:30.240 --> 0:00:36.080 to bring in former Senator Joe Lieberman. Uh. You have founded, 0:00:36.159 --> 0:00:39.440 or you're the co chairman of a nonpartisan advocacy group 0:00:40.080 --> 0:00:44.200 called No Labels that's meeting um to sort of figure 0:00:44.200 --> 0:00:49.560 out how to chart a center political new way forward. 0:00:49.720 --> 0:00:51.080 Can you tell us a little bit about how this 0:00:51.120 --> 0:00:54.600 came about? Sure, can, and thanks for having me on. 0:00:54.680 --> 0:00:57.920 We're holding a big conference were calling at the summit. 0:00:58.000 --> 0:01:01.560 We actually called it seven after the year of the 0:01:01.600 --> 0:01:06.440 Constitutional Convention, to remind everybody that the people at the 0:01:06.440 --> 0:01:10.280 Constitutional Convention had tremendous disagreements. They almost broke up with 0:01:10.360 --> 0:01:13.480 three or four times, but they came to the center 0:01:13.560 --> 0:01:16.920 and negotiated a compromise in the national interest. Uh, and 0:01:17.000 --> 0:01:21.640 therefore we have our country. We haven't our leaders and 0:01:21.680 --> 0:01:25.160 representatives in Washington haven't been doing that for too long, 0:01:25.240 --> 0:01:27.720 and therefore a lot of our problems have gone unsolved 0:01:27.760 --> 0:01:31.040 and a lot of opportunities not seized to make life better. 0:01:31.760 --> 0:01:35.120 And a lot of that expressed itself in the election 0:01:35.240 --> 0:01:38.640 where uh Donald Trump was elected. Really, in my opinion, 0:01:38.800 --> 0:01:42.720 is a change candidate against the status quo and maybe 0:01:42.760 --> 0:01:46.000 somebody who based on his business background, could could make 0:01:46.040 --> 0:01:49.920 things work. And so today no labels means put aside 0:01:49.960 --> 0:01:53.400 your label a Democrat, Republican, liberal, conservative, where all Americans 0:01:53.880 --> 0:01:56.680 let's work together to get something done for the country. 0:01:56.720 --> 0:02:01.680 We're announcing today uh fifty members of Congress, pretty evenly 0:02:01.720 --> 0:02:05.640 divided between Republicans and Democrats, whore signed on to working 0:02:05.680 --> 0:02:09.280 together across party lines. And we're also um building a 0:02:09.280 --> 0:02:13.800 political Action committee to support people in Congress who stand 0:02:13.880 --> 0:02:17.200 up to their party leadership or interest groups and and 0:02:17.360 --> 0:02:19.320 vote in a way that they think is best for 0:02:19.360 --> 0:02:22.680 their constituents or their country. We think the election of 0:02:22.760 --> 0:02:25.840 Donald Trump really shakes up the system in a way. 0:02:25.880 --> 0:02:27.880 I didn't support them, but I would tell you it 0:02:27.919 --> 0:02:30.600 shakes up the system in a way that gives us 0:02:30.600 --> 0:02:34.080 an opportunity to help him do what we think he 0:02:34.120 --> 0:02:38.480 wants to do well. And and speaking about that election, 0:02:38.960 --> 0:02:42.400 Senator Lieberman, do you think that these first steps are 0:02:42.440 --> 0:02:47.120 sort of the beginnings of a new political party that's 0:02:47.160 --> 0:02:49.320 not where that's the Grant's a great question. A few 0:02:49.360 --> 0:02:52.239 people here have raised the question in our feeling. Governor 0:02:52.320 --> 0:02:55.160 Huntsman of Utah, the former governor Republican and I have 0:02:55.320 --> 0:02:59.200 our co chairs. That's not our intention. Our intention really 0:03:00.160 --> 0:03:02.600 is to make the two party system work better, like 0:03:02.680 --> 0:03:04.920 it has for a lot of our history, and it 0:03:05.000 --> 0:03:08.200 always does when the center right and the senator left 0:03:08.639 --> 0:03:11.600 gets together. But I'll tell you if something like this 0:03:12.240 --> 0:03:17.440 doesn't work to help the government produce for the American people, 0:03:18.280 --> 0:03:20.480 I think there will be a third party before the 0:03:20.520 --> 0:03:24.359 next presidential election, and it will be a contender. It 0:03:24.360 --> 0:03:27.800 will be a strong party. Senator Lieberman, what if you 0:03:27.800 --> 0:03:30.880 could point to some specific goals you have. I note, 0:03:30.919 --> 0:03:34.200 for example, that no Labels has called for a bipartisan 0:03:34.360 --> 0:03:37.520 seating at the State of the Union address. I mean, 0:03:37.640 --> 0:03:39.360 is that the kind of stuff that you think people 0:03:39.400 --> 0:03:42.280 really want you to come together on. Well, that's really 0:03:42.360 --> 0:03:46.000 small process things, uh, And it can't hurt and that's 0:03:46.040 --> 0:03:49.880 happened over over the years. But the truth is, are 0:03:50.000 --> 0:03:53.640 are we? We are really about process. But we for 0:03:53.760 --> 0:03:56.000 the first time put out what we call a national 0:03:56.040 --> 0:04:01.920 Strategic Agenda, and we try to form four big goals 0:04:01.960 --> 0:04:05.680 for the country and uh state them in a way 0:04:05.760 --> 0:04:09.400 that that most Republicans and Democrats could at least agree 0:04:09.400 --> 0:04:11.960 on the goal. And then you start to negotiate. So, 0:04:12.000 --> 0:04:15.640 what are the goals? Million new jobs in ten years. 0:04:15.920 --> 0:04:19.760 Actually that's a goal that President Electrump was already embraced. Second, 0:04:20.320 --> 0:04:22.600 but it's that But that's never not a goal, right, 0:04:22.640 --> 0:04:24.640 I mean, you never come out and hear people say, oh, no, 0:04:24.760 --> 0:04:26.800 we don't want to create jobs. So what is different 0:04:26.839 --> 0:04:29.599 about your approach than the approach that other presidents and 0:04:29.680 --> 0:04:33.480 the current president elective status? Okay, fair question. And and 0:04:33.560 --> 0:04:36.440 here's what we're saying with these four goals. When you 0:04:36.560 --> 0:04:40.160 when you're not doing anything, when your business is failing 0:04:40.480 --> 0:04:43.320 or whatever, Uh, the first thing you try to do 0:04:43.400 --> 0:04:45.560 is decide where do we want to go? We said goals. 0:04:45.880 --> 0:04:48.800 And in the political process, if you can get people 0:04:49.040 --> 0:04:52.000 to buy into the goals, then you can sit down 0:04:52.120 --> 0:04:55.760 and negotiate how you're going to achieve as much of 0:04:55.760 --> 0:04:59.080 those goals as you possibly can. And and that's why 0:04:59.160 --> 0:05:03.200 we started there. Incidentally, we invited all the presidential candidates 0:05:03.200 --> 0:05:05.479 to a convention we hold in New Hampshire last year. 0:05:05.880 --> 0:05:08.400 Donald Trump was one of eight to address us. At 0:05:08.440 --> 0:05:12.599 that time they were over twenty running, and he accepted 0:05:12.640 --> 0:05:15.560 are he signed our pledge to go for one of 0:05:15.600 --> 0:05:18.560 these goals, and what it means is to convene a 0:05:18.680 --> 0:05:22.960 process of leaders, hopefully in both parties in Congress, to 0:05:23.040 --> 0:05:26.720 begin to negotiate one of the problems in Washington. Has 0:05:26.760 --> 0:05:30.400 too many people in Congress today or in the White 0:05:30.400 --> 0:05:33.920 House have said, I'm only gonna accept this if it's 0:05:33.960 --> 0:05:37.120 exactly the way I want it, if it's a dent 0:05:37.240 --> 0:05:40.000 of what I want. And when you do that, you 0:05:40.080 --> 0:05:43.000 usually end up with zero percent. And of course it's 0:05:43.040 --> 0:05:45.919 the country that suffers. Senator Lieberman, do you think that 0:05:45.960 --> 0:05:48.120 it was a mistake for the Democrats to reelect or 0:05:48.200 --> 0:05:52.800 re select Nancy Pelosi as the as a minority leader 0:05:52.800 --> 0:05:57.080 of the United States House of Representatives. Again, Well, and 0:05:57.440 --> 0:05:59.680 that's up to the House Democrats. I know, I don't. 0:05:59.680 --> 0:06:01.960 I don't think it's really I wouldn't say it's a mistake. 0:06:02.839 --> 0:06:04.640 I think the question is, now, what are the House 0:06:04.680 --> 0:06:07.200 Democrats do and what are the House Republicans do it. Look, 0:06:07.480 --> 0:06:10.880 I've talked to members of Congress of both political parties 0:06:10.920 --> 0:06:14.120 since the election, and their voices in each caucus that 0:06:14.160 --> 0:06:17.760 are are all too familiar. Some Democrats are saying, we 0:06:17.839 --> 0:06:22.719 must go into resistance, we must oppose everything that President 0:06:22.760 --> 0:06:25.920 Trump passed Ford and then some Republicans are saying, let's 0:06:25.960 --> 0:06:28.680 do what Obama did at the beginning of his term. 0:06:28.760 --> 0:06:33.279 Let's just ram it down the Democrats throats. We've got uh, 0:06:33.360 --> 0:06:36.280 we've got majorities in both houses. Well, if that, if 0:06:36.320 --> 0:06:41.159 those voices dominate, then really nothing's gonna get done. And 0:06:41.160 --> 0:06:43.880 and President Trump will not have the record I think 0:06:43.880 --> 0:06:46.680 he wants to have, and the country will not have 0:06:46.839 --> 0:06:51.320 the help that it voted for in the last election. 0:06:51.520 --> 0:06:56.120 So really it depends on what leaders Polosi, Ryan McConnell 0:06:56.120 --> 0:07:00.440 and Schumer do. Uh and um, that's what we want 0:07:00.440 --> 0:07:02.120 to help him do it, which is the right thing? 0:07:02.800 --> 0:07:06.480 One If you could speak to the issue of combining 0:07:07.160 --> 0:07:10.760 the work that the Department of Defense does along with 0:07:10.840 --> 0:07:13.080 the veterans administration, I know that's one of your goals 0:07:13.080 --> 0:07:16.320 of combining records. Why you want to do that? Oh, 0:07:16.360 --> 0:07:18.760 outside of our playbook. And let me just say about 0:07:18.760 --> 0:07:22.840 the playbook that we we combined. Uh, we actually tested 0:07:22.880 --> 0:07:24.720 a lot of ideas. Some of them are big, some 0:07:24.800 --> 0:07:27.360 of them are kind of middle sizes are small. But 0:07:27.400 --> 0:07:32.040 the each command majority support from the American people, and 0:07:32.080 --> 0:07:33.920 that was one of But what about the Congress. You 0:07:33.920 --> 0:07:38.400 think they're going to pass this? Well hopefully, Uh, you know, 0:07:38.480 --> 0:07:40.880 because it does. It makes sense that it saves money 0:07:40.920 --> 0:07:44.280 and it probably and it serves both the active duty 0:07:44.320 --> 0:07:48.360 military and the veterans better. It avoids the sort of 0:07:48.800 --> 0:07:51.640 spending twice for the same kind of record keeping. I 0:07:51.680 --> 0:07:55.160 want to thank you very much. Former US Senator, Democrat 0:07:55.160 --> 0:07:59.239 and independent from a Connecticut, former vice presidential candidate Joe Lieberman. 0:07:59.320 --> 0:08:14.640 He is the coach chairman of No Labels. All right, 0:08:14.640 --> 0:08:17.440 we're gonna learn more about the world of a Wall 0:08:17.480 --> 0:08:21.600 Street analysts. We have Land and Nuyen are Bloomberg FX 0:08:21.680 --> 0:08:24.560 reporter joining us now, Lanna and thanks very much for 0:08:24.640 --> 0:08:28.480 coming in. Uh seventeen cat fines that will slay you 0:08:28.640 --> 0:08:30.960 every time. No, that may not be the headline of 0:08:30.960 --> 0:08:33.600 a Bank of America Mary Lynch report, but it might 0:08:33.640 --> 0:08:37.320 be one day. Well, they haven't stooped quite that far yet, PIM. 0:08:37.400 --> 0:08:40.000 But what analysts are trying to do here is really 0:08:40.000 --> 0:08:43.680 trying to hook readers. They're trying to make bold, short 0:08:43.800 --> 0:08:47.520 calls in contrarian reports. So I spoke to David wu 0:08:47.600 --> 0:08:50.320 from Bank of America and uh, he's very feisty, as 0:08:50.360 --> 0:08:53.120 you know. Um, but I think the bank is trying 0:08:53.120 --> 0:08:55.840 to spread this ethos across all of its analysts have 0:08:55.960 --> 0:08:58.360 some guts. If you have an interesting call, you go 0:08:58.400 --> 0:09:00.400 all the way, don't play it safe, and don't reel 0:09:00.440 --> 0:09:02.360 it back to be part of the consensus. Okay, So 0:09:02.400 --> 0:09:04.679 if they haven't gone as low as seventeen cat fines 0:09:04.720 --> 0:09:06.960 that will slay you every time. How low have they gone? 0:09:07.800 --> 0:09:09.720 I don't know if it's low, but they've done what 0:09:10.040 --> 0:09:12.040 we in the news business do. They've got you know, 0:09:12.120 --> 0:09:16.280 focused on shorter reports, tighter stories, and um, you know, 0:09:16.360 --> 0:09:19.680 tighter thematic pieces and better headlines. I think so why now, 0:09:19.760 --> 0:09:22.320 why is there this push to sort of be more 0:09:22.480 --> 0:09:26.880 consumer friendly? Well, if you know, they're listening to what 0:09:26.920 --> 0:09:29.080 happened after the financial crisis, a lot of people have 0:09:29.160 --> 0:09:31.680 lost their jobs. There are fewer people out there churning 0:09:31.720 --> 0:09:34.720 out these twenty page, you know, thirty page reports. So 0:09:34.760 --> 0:09:37.760 they really got to be smarter with their time, get 0:09:37.800 --> 0:09:41.160 people reading the reports, and build a following by being amusing, 0:09:41.200 --> 0:09:44.160 being interesting, and lighthearted in addition to obviously being smart. 0:09:44.600 --> 0:09:48.400 For your story, you spoke with the global research head 0:09:48.520 --> 0:09:52.480 of Bank of America, Merrill Lyncha Candice Browning. What did 0:09:52.520 --> 0:09:56.320 she say? She was interesting? She said, basically, I want 0:09:56.360 --> 0:09:58.920 my people to be bold. I want them to talk 0:09:58.920 --> 0:10:01.120 about what's not already price in the market. I want 0:10:01.120 --> 0:10:03.240 them to be out of consensus, not just you know, 0:10:03.320 --> 0:10:05.679 going against consensus for the sake of it, but really 0:10:06.120 --> 0:10:07.920 um looking to see what the next move in the 0:10:07.920 --> 0:10:10.079 market is going to be. Because everything that's in the 0:10:10.160 --> 0:10:12.200 market and in the price right now is already priced in. 0:10:12.320 --> 0:10:15.199 So um. She was pretty tough about that. She said, 0:10:15.520 --> 0:10:18.400 make a big call, you know, stand out from the herd, 0:10:18.880 --> 0:10:21.360 or else you won't stick arount and catchy titles, right. 0:10:21.360 --> 0:10:23.360 I mean, for example, one report, I guess it was 0:10:23.360 --> 0:10:27.960 published what last year last November called the Great Divorce? Right? 0:10:28.040 --> 0:10:31.960 This was written by Mr Woo. Yes, well, so my 0:10:32.120 --> 0:10:37.560 question is how do these analysts make money for the banks, 0:10:37.600 --> 0:10:40.240 and how much of that is the issue here? So 0:10:40.360 --> 0:10:42.800 right now, they make money for the bank by being 0:10:42.880 --> 0:10:45.240 part of an add on service of perks. Right, So 0:10:45.320 --> 0:10:48.319 if you and I do a deal and Bank America 0:10:48.320 --> 0:10:50.720 as your bank, then probably the third research in on 0:10:50.760 --> 0:10:53.000 the side without a separate fee. It's just part of 0:10:53.040 --> 0:10:56.520 the cost of being a client. But eventually banks may 0:10:56.520 --> 0:10:58.960 need to, especially in Europe, we'll we'll need to start 0:10:59.040 --> 0:11:01.800 charging a fee, either directly or as part of a 0:11:01.800 --> 0:11:05.480 commission for research. So it means that the researchers have 0:11:05.600 --> 0:11:08.600 to really jostle to stand out because eventually you may 0:11:08.720 --> 0:11:10.760 have to put a price tag on each research report. 0:11:11.200 --> 0:11:14.040 So that's that's really the issue here is that increasingly 0:11:14.360 --> 0:11:18.600 there has to be justification for this research and its value, 0:11:18.600 --> 0:11:21.560 and there has to be a loyal following otherwise it 0:11:21.600 --> 0:11:24.800 could very well get cut. Precisely, it's the quality of 0:11:24.800 --> 0:11:27.880 the ideas, but it's also the following of the analysts 0:11:27.880 --> 0:11:30.240 and the ability of the analysts to engage the readers, 0:11:30.240 --> 0:11:32.680 which sometimes means they have to put in some song 0:11:32.760 --> 0:11:35.840 lyrics or use Bob Dylan as a you know, a 0:11:35.880 --> 0:11:38.880 way to hook readers. Obviously the analysis has to be 0:11:38.920 --> 0:11:41.000 good as well, but it doesn't hurt to, you know, 0:11:41.040 --> 0:11:43.360 throw in a couple of fun touches. So does this mean, 0:11:43.400 --> 0:11:45.559 for example, that we're going to hear Kit Jukes of 0:11:45.559 --> 0:11:48.960 Associotation Arel and he's been a guest on Bloomberg for 0:11:49.080 --> 0:11:53.120 a variety of subjects. Does that mean he's going to 0:11:53.200 --> 0:11:56.640 start to sing those Bob Dylan lyrics as well as 0:11:56.679 --> 0:12:00.000 Latin proverbs as he offers him in his notes to clients. 0:12:00.200 --> 0:12:02.560 I don't know if he'll sing them in audio form, 0:12:02.640 --> 0:12:05.960 but he's certainly one person that if you want to 0:12:06.000 --> 0:12:10.760 model UH analyst research with flair, definitely look at Kit Jukes. 0:12:11.040 --> 0:12:13.920 Was just looking right now. His current report from today 0:12:13.960 --> 0:12:16.600 compares the US dollar to the myth of Icarus, So 0:12:16.720 --> 0:12:18.959 you know, he's very literary in addition to being pretty 0:12:19.040 --> 0:12:22.720 musical as well. Um So, going forward, is there a 0:12:22.720 --> 0:12:28.480 particular area, a particular subject of analysis that lends itself 0:12:28.520 --> 0:12:32.439 to lyrics and is it? Is it f X or 0:12:32.480 --> 0:12:34.760 is it across all this? I think it's across all disciplines. 0:12:34.840 --> 0:12:37.199 I think if you're writing about financial markets, which can 0:12:37.240 --> 0:12:39.680 be very technical, you need to throw a little spice 0:12:39.679 --> 0:12:42.120 in there that doesn't hurt in any discipline to write 0:12:42.160 --> 0:12:45.640 with a flair and entertainment in addition to good analysis 0:12:45.640 --> 0:12:49.000 and smart comments. Lenan Nunion, thank you so much. For 0:12:49.080 --> 0:12:52.360 joining us. Lenan Nunion h f X reporter here at 0:12:52.400 --> 0:12:57.200 Bloomberg News. Really fascinating story about how the culture is changing, 0:12:57.240 --> 0:13:01.440 not just among mainstream media but also on Wall Street. 0:13:13.080 --> 0:13:16.360 I want to bring in my colleague by Bloomberg Gadfly 0:13:16.840 --> 0:13:22.000 fellow columnist Marcus Ashworth. He is in London covering European 0:13:22.240 --> 0:13:24.960 Marcus markets, and Marcus, thank you so much for being 0:13:25.000 --> 0:13:28.080 with us. Uh. You know, I've got to say I'm 0:13:28.160 --> 0:13:31.400 sort of surprised at the lack of a market reaction 0:13:31.880 --> 0:13:35.800 to the Italian referendum. Yes, this has been sort of expected. Yes, 0:13:35.840 --> 0:13:37.880 people were saying it's not as big of an issue 0:13:37.960 --> 0:13:41.000 as Brexit or the U S presidential vote. But even still, 0:13:42.360 --> 0:13:45.160 I think you might finance because the European Central Bank 0:13:45.240 --> 0:13:47.640 of learned their lessons and they know how to control 0:13:47.720 --> 0:13:51.720 markets ever better. So I think certainly there was the 0:13:51.960 --> 0:13:56.360 central banks are in very early supporting the bond market. 0:13:56.559 --> 0:13:58.840 And wait, you're saying that actually that they were buying 0:13:59.080 --> 0:14:01.600 that the Europeans on Bank was out there buying actively 0:14:01.679 --> 0:14:06.280 buying both the euro as well as as well as 0:14:06.280 --> 0:14:09.320 potentially government bonds, don't I don't know in the currency 0:14:09.320 --> 0:14:14.000 and I would doubt that on the currency secret no, no, no, 0:14:14.040 --> 0:14:18.480 that that they would be buying the Italian government bonds UM, 0:14:18.520 --> 0:14:22.760 and that would be something which is reasonably widely expected. 0:14:23.160 --> 0:14:26.400 They had flagged it up beforehand, and though I cannot 0:14:26.440 --> 0:14:29.920 confirm for sure, it seems all likelihood would point to that, 0:14:30.000 --> 0:14:33.480 and the price action would would suggest that no one's 0:14:33.520 --> 0:14:36.880 prepared to use the expression and fight the FED. But 0:14:36.920 --> 0:14:38.920 it's the same sort of story here the Youran Central 0:14:38.920 --> 0:14:40.880 Bank and made it very clear that are on a 0:14:40.880 --> 0:14:43.920 negative reaction, they would be in supporting their perfectly titled 0:14:43.920 --> 0:14:49.560 to It's all part of their PSPP public sector purchasing program, 0:14:49.640 --> 0:14:53.440 and we may find out on Thursday that they could 0:14:53.480 --> 0:14:59.040 even increase UM or tweak the purchasing of Italian bonds 0:14:59.320 --> 0:15:02.680 pro rata all the other bonds, and indeed extend QUEWI 0:15:02.800 --> 0:15:06.120 as well. So this is this was to be expected, um. 0:15:06.520 --> 0:15:08.800 Even so, though I agree with you in a sense 0:15:08.880 --> 0:15:12.520 that everyone had expecting a wilder reaction, and it really 0:15:12.560 --> 0:15:15.120 wasn't until the States came in when they wanted to 0:15:15.120 --> 0:15:17.120 sell bonds off anyway, that there's been a little bit 0:15:17.120 --> 0:15:19.720 more price action for the downside. Well, and sort of 0:15:20.320 --> 0:15:23.880 to your point, yes, Italian government debt could be purchased 0:15:24.000 --> 0:15:26.400 by the European Central Bank. But I'm looking at Manto 0:15:26.440 --> 0:15:30.600 Paschi bonds and they dropped, yes, but they dropped by 0:15:30.720 --> 0:15:33.440 less than three cents on the dollar, which was surprising. 0:15:33.800 --> 0:15:36.160 You know, there was not a huge move in other words, um, 0:15:36.200 --> 0:15:38.720 and there was all this talk about Italian banking crisis 0:15:38.960 --> 0:15:41.840 leading up to this vote, where people just wrong or 0:15:41.960 --> 0:15:45.320 is there still potentially more risk here than people are 0:15:45.320 --> 0:15:49.440 pricing in. Um. Yeah, the liquidity or illiquidity on mont 0:15:49.560 --> 0:15:53.160 Apache is to be seen to be believed. It's completely 0:15:53.160 --> 0:15:56.440 controlled market. That's just a by bond by back, so 0:15:56.480 --> 0:15:59.120 anyone wish to get out had their chance. Now it's 0:15:59.120 --> 0:16:03.200 a very care controlled market because they're about to do 0:16:03.480 --> 0:16:08.120 a major stock recapitalization. So um, it's impressive, but I 0:16:08.160 --> 0:16:11.080 think the lead managers on on the equity deal will 0:16:11.120 --> 0:16:13.680 be keeping a very careful eye on on price and 0:16:13.720 --> 0:16:17.240 most of a passion. The reality is is that the 0:16:17.240 --> 0:16:19.840 authorities or the lead managers want to come in and 0:16:19.880 --> 0:16:23.640 buy a chunk of these bonds with the market sharply 0:16:23.680 --> 0:16:27.680 upwards so that there's less active short sellers and these 0:16:27.720 --> 0:16:29.440 types of things. Is that's very hard to sort of 0:16:29.440 --> 0:16:32.240 get liquidity on these types of results. Marcus, I want 0:16:32.240 --> 0:16:34.480 if you could come into on the reaction from other 0:16:34.520 --> 0:16:39.760 European governments and markets to the Italian vote. Yeah, I 0:16:39.800 --> 0:16:42.960 think that's it's all around. It's it's we've taken some 0:16:43.040 --> 0:16:46.920 of the political risk out because even though it was 0:16:46.920 --> 0:16:50.720 the worst result expected in some senses, Um, it would 0:16:50.760 --> 0:16:54.560 be very carefully controlled both by the e CP beforehand. 0:16:55.080 --> 0:16:57.320 And I think you know Italy has been here before 0:16:57.360 --> 0:17:01.040 with technocratic governments in Ramsey him in and not necessary 0:17:01.280 --> 0:17:04.080 on a full man day anyway. So and that last, 0:17:04.119 --> 0:17:07.040 I think that the last popularly elected prime minister in 0:17:07.119 --> 0:17:10.240 Italy was Sylvia Berlsconi back in two thousand and eight. 0:17:10.280 --> 0:17:13.760 They have not had a popularly elected government for eight years. Indeed, 0:17:13.840 --> 0:17:17.640 So in that sense that we have seen this movie before, Um, 0:17:17.800 --> 0:17:21.280 the Finance minister probably or someone either that or the 0:17:21.280 --> 0:17:23.879 Culture minister or possibly one of the Senate leaders will 0:17:23.920 --> 0:17:26.719 come in. So UM, you know that it's not going 0:17:26.720 --> 0:17:29.080 to be any rash decisions made. That the president is 0:17:29.960 --> 0:17:34.600 has the electoral ability to control when elections are called 0:17:34.840 --> 0:17:37.880 to a degree, Um, and I think that they will 0:17:37.920 --> 0:17:40.920 try everywhere they possibly can. The one thing is a surprise, 0:17:40.920 --> 0:17:43.440 I suppose, is the size of the vote that it's 0:17:43.560 --> 0:17:46.720 it's quite clear that Renzi is going to step down permanently, 0:17:47.400 --> 0:17:49.159 whereas it had been expected he might have been a 0:17:49.200 --> 0:17:51.199 sort of called back, a bit like James Brown too, 0:17:51.640 --> 0:17:53.840 to come back to the stage. But doesn't look like that. 0:17:54.320 --> 0:17:56.960 His career is probably over for now. Marcus, your point 0:17:56.960 --> 0:18:01.720 about the liquidity and Monte Depachis is an important one, 0:18:02.000 --> 0:18:04.760 and just more broadly looking at the market, I mean, 0:18:05.000 --> 0:18:08.240 is there a particular gauge that you are looking at 0:18:08.320 --> 0:18:11.760 to indicate truly the level of risk or so that 0:18:11.800 --> 0:18:14.800 you think of is the most accurate reflection of of 0:18:14.840 --> 0:18:17.480 the risk out there. Honestly, probably the best thing to 0:18:17.520 --> 0:18:19.240 look at in this sense, because the bond market is 0:18:19.280 --> 0:18:21.560 so liquid and so tightly controlled and kepting, is the 0:18:21.560 --> 0:18:25.919 equity price, because that's what's going to be raised five times. 0:18:26.680 --> 0:18:28.600 But not just with Mount Tapache, but in general. I 0:18:28.640 --> 0:18:31.440 was looking at Italian financial stocks this morning and they 0:18:31.440 --> 0:18:33.800 were down, but not by that much. There's still above 0:18:34.400 --> 0:18:36.760 the average since the beginning of to Lie, So it 0:18:36.800 --> 0:18:38.680 doesn't seem to be that people are pricing in any 0:18:38.800 --> 0:18:41.520 any kind of banking crisis well, I thought they are 0:18:41.560 --> 0:18:43.840 from there they are that they're doing in a different 0:18:43.880 --> 0:18:47.760 way because the worst case scenario Italy can't can't bail 0:18:47.800 --> 0:18:51.240 itself out as it's trying to without state aid. But 0:18:51.400 --> 0:18:56.199 it's Atlante bailout fund and by this UM non public 0:18:56.240 --> 0:19:00.760 sector bailout of Montitapache, which will involve five times equity 0:19:00.800 --> 0:19:06.240 recap potentially, you know, was supposed to be announced from today. Um. 0:19:06.400 --> 0:19:08.960 The only other way out is as a major state bailout. 0:19:09.040 --> 0:19:11.200 I mean, Spain had a sort of forty billion hand 0:19:11.200 --> 0:19:13.520 out from the EU and obviously that's what Renzi was 0:19:13.520 --> 0:19:16.280 trying to avoid. But the the reality of things have 0:19:16.400 --> 0:19:19.560 got so bad down here that um, if they weren't 0:19:19.600 --> 0:19:22.320 able to make it a private sector bailout, then there 0:19:22.359 --> 0:19:24.719 would be a bailion of junior bond holders and there 0:19:24.760 --> 0:19:28.640 would be a some form of states EU lead all 0:19:28.680 --> 0:19:34.520 around package for indeed, for UM for the whole banking sector, 0:19:34.560 --> 0:19:36.080 and it wouldn't us be once of the past, you 0:19:36.160 --> 0:19:38.800 would be a much wider thing. But you know, UNI 0:19:38.840 --> 0:19:41.679 Credit got a result this morning. It sold its pioneer 0:19:41.680 --> 0:19:46.879 asset management unit to very large French concern a Mundy, 0:19:47.040 --> 0:19:49.680 which manages over a trillion euros. So in that sense, 0:19:49.720 --> 0:19:52.640 that's that's that's the progress. They're instant timing and announcing 0:19:52.680 --> 0:19:55.320 it there, so that I think there's every chance still 0:19:55.800 --> 0:19:57.840 that this deal is going to get away. It just 0:19:57.920 --> 0:20:01.280 needs to convince a a corner stone equity beds behind 0:20:01.320 --> 0:20:04.360 Mount Apache that builds confidence that then have to sell 0:20:04.480 --> 0:20:08.200 less of the equity than they were. We're thinking everything 0:20:08.240 --> 0:20:13.040 trips favorably if a technocratic government comes in um and 0:20:13.440 --> 0:20:15.159 seems to sort of level the playing field and we 0:20:15.200 --> 0:20:17.800 can move on from this. But it's a very carefully, 0:20:17.880 --> 0:20:21.760 very managed thing. And then you know, selling short monster 0:20:21.840 --> 0:20:24.000 Apacchi bonds is is not really going to get you 0:20:24.080 --> 0:20:25.960 very far. But one you can't borrow them, and to 0:20:26.119 --> 0:20:29.280 that they've already had the major debt to equity switch. 0:20:29.400 --> 0:20:33.040 So got it all right, Thanks very much. Marcus Ashworth 0:20:33.240 --> 0:20:36.520 is a gad Fly columnist for Bloomberg News covering a 0:20:36.560 --> 0:20:39.440 European markets and you know, Lisa, I was looking at 0:20:39.480 --> 0:20:44.240 the Italian government debt public debt GDP. My favorite quote 0:20:44.240 --> 0:20:46.240 of the day after Brexit it took three days from 0:20:46.240 --> 0:20:48.639 markets to shake it off with Trump, three hours with 0:20:48.720 --> 0:21:05.760 Italy three minutes. This is Bloomberg. Well, imagine that Italian 0:21:05.800 --> 0:21:08.479 voters go to the polls and they vote no, want 0:21:08.520 --> 0:21:12.520 a referendum to reform the way their government works. You'd 0:21:12.520 --> 0:21:15.920 think that the euro would fall. Not so euro right 0:21:15.960 --> 0:21:18.919 now higher by about a half percent versus the dollar 0:21:19.080 --> 0:21:22.919 at one oh seven. Also the dollar weakening against the 0:21:22.960 --> 0:21:26.240 British pound at one seven. Let's find out more from 0:21:26.240 --> 0:21:29.120 Mark Chandler. He is Global head of Currency Strategy at 0:21:29.160 --> 0:21:32.680 Brown Brothers Harriman. Alright, Mark Chandler, what's the answer. Why 0:21:32.800 --> 0:21:36.359 is the euro rallying? Well? Two eason? Same? One. I 0:21:36.359 --> 0:21:40.560 think is that this referendum results was largely expected. All 0:21:40.560 --> 0:21:44.760 the polls that came out beforehand suggested that the referendum 0:21:44.800 --> 0:21:47.399 was gonna be rejected, and it was rejected by about 0:21:47.520 --> 0:21:51.439 basically a sixty vote. What this doesn't mean, though, and 0:21:51.440 --> 0:21:52.960 this is I think the you're is able to rally, 0:21:53.240 --> 0:21:55.439 is that does not mean that this is a victory 0:21:55.440 --> 0:21:59.520 for the anti establishment of anti elite forces in Italy. 0:22:00.000 --> 0:22:03.800 A former prime minister, Monty, who is also an EU commissioner, 0:22:03.880 --> 0:22:07.880 came out against the referendum. So the members of Rendi's 0:22:07.920 --> 0:22:12.200 own political party and the Commerce magazine, which is no liberal, 0:22:12.640 --> 0:22:15.560 no like left wing kind of magazine. They also came 0:22:15.600 --> 0:22:19.080 out against the referendum. And so I think that the 0:22:19.160 --> 0:22:21.960 situation is, this is Italy. I mean, we're talking about 0:22:21.960 --> 0:22:24.520 a country that has something like sixty three or sixty 0:22:24.560 --> 0:22:27.160 four government since the end of World War Two. This 0:22:27.240 --> 0:22:30.879 is not about populism and nationalism. This is about idiosyncratic 0:22:30.960 --> 0:22:35.119 Italian things. And so Italian bonds have suffered, Italian stocks 0:22:35.119 --> 0:22:37.800 have suffered. But after that knee jerk reaction, the euro 0:22:37.880 --> 0:22:41.800 really hasn't. Yeah, the German finance minister had a great 0:22:41.880 --> 0:22:44.960 quote basically saying, yeah, this is Italy. They know they're 0:22:45.000 --> 0:22:47.560 they're used to this type of thing. They'll work it out. Um. 0:22:47.720 --> 0:22:50.240 But there still is a lot of talk about how 0:22:50.280 --> 0:22:53.960