WEBVTT - US Jobless Claims Rise Less Than Estimates 0:00:00.040 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.280 us live on YouTube. 0:00:27.520 --> 0:00:30.400 I can't emphasize enough, folks, when we learned this decades 0:00:30.440 --> 0:00:33.319 ago with Bloomberg on the economy, you make your luck. 0:00:33.479 --> 0:00:36.920 Paul and I are committed to getting voices. We don't 0:00:36.920 --> 0:00:39.920 know when we need them. Right now, we get lucky. 0:00:40.000 --> 0:00:42.920 We have Mona Mahajen with us with Everard Jones. She 0:00:43.040 --> 0:00:47.280 has the most prestigious finance computer degree in America. Good morning, 0:00:47.600 --> 0:00:50.720 Palo Alto. This is out of Wharton's School, the double 0:00:50.760 --> 0:00:54.920 degree Finance and computer science. As mister Zuckerberg blows up, 0:00:55.160 --> 0:00:57.240 Hey I Mona, We're going to rip up the script 0:00:57.240 --> 0:00:59.200 here with you, and don't give me you can do it. 0:00:59.760 --> 0:01:03.760 I know that. What do you tell Edward Jones producers 0:01:03.960 --> 0:01:08.880 and clients about the plan of AI? Is there a 0:01:08.920 --> 0:01:11.200 path or are we making it up as we go 0:01:11.280 --> 0:01:12.000 in America? 0:01:13.200 --> 0:01:16.400 Yeah? Thanks Tom, and look, AI we think is here 0:01:16.480 --> 0:01:20.200 to stay. There is certainly a roadmap ahead of us 0:01:20.240 --> 0:01:23.880 that looks in our view pretty robust. And in fact, 0:01:24.080 --> 0:01:28.320 we're in year three of the AI we think cycle 0:01:28.440 --> 0:01:31.319 or supercycle, and in fact chat GBT was launched almost 0:01:31.319 --> 0:01:34.800 three years ago this month, and so as we look forward, 0:01:34.880 --> 0:01:37.720 you know, what we tell our clients is, look, we've 0:01:37.720 --> 0:01:40.640 had three years of tech and AI outperforming the rest 0:01:40.720 --> 0:01:42.760 of the market, and twenty twenty five was no exception. 0:01:42.880 --> 0:01:45.559 As we look into twenty twenty six and beyond, yes, 0:01:45.640 --> 0:01:48.680 we want to own parts of the tech and AI market, 0:01:48.720 --> 0:01:52.240 but we want to make sure that we have diversification 0:01:52.280 --> 0:01:57.360 in our portfolios. Because YESTERDAI starts with infrastructure players, hyperscalers, 0:01:57.440 --> 0:01:59.800 data centers, but hopefully over time it goes to those 0:02:00.040 --> 0:02:03.120 actors that benefit from the productivity gains, and that's where 0:02:03.160 --> 0:02:04.640 we'll see some of the market games as well. 0:02:04.720 --> 0:02:08.720 With a geography, the history, the character of Edward Jones 0:02:09.320 --> 0:02:13.840 is America through the filter of Edward Jones buying the 0:02:13.880 --> 0:02:14.840 AI story. 0:02:16.440 --> 0:02:20.280 You know, certainly as we look across industries and sectors, 0:02:20.280 --> 0:02:24.639 we are starting to see AI adoption ramp up. So 0:02:24.840 --> 0:02:27.680 we are continuing to feel like this is a story 0:02:27.720 --> 0:02:30.080 that is here to stay, and we liken it to 0:02:30.680 --> 0:02:33.280 what we saw back in the late nineties with the 0:02:33.360 --> 0:02:37.800 Internet and dot com revolution. Now we would say probably, 0:02:37.800 --> 0:02:40.160 and I heard Dan Ives on your station talk about 0:02:40.160 --> 0:02:42.280 it, it's a ninety five era. We'd probably say we're a 0:02:42.280 --> 0:02:45.839 little bit further along, maybe ninety six ninety seven. But nonetheless, 0:02:46.000 --> 0:02:50.400 we think that this is a technological innovation that will 0:02:50.480 --> 0:02:53.960 have impact on all sectors and all industries and the 0:02:54.040 --> 0:02:54.720 job market by the. 0:02:54.720 --> 0:02:59.399 Way, as well, Mona, we've had some really really good 0:02:59.440 --> 0:03:01.799 earnings growth coming out of Corporate America this year. The 0:03:01.800 --> 0:03:04.760 third quarter numbers are really strong. In particular, Is the 0:03:04.800 --> 0:03:08.359 earnings growth story good enough to support this market going 0:03:08.360 --> 0:03:10.520 forward in twenty six, Yeah. 0:03:10.360 --> 0:03:13.280 It's a great call out look s and P. Five hundred. 0:03:13.320 --> 0:03:16.519 Returns are typically driven by two things, one earnings growth, 0:03:16.840 --> 0:03:19.799 two valuation expansion, and so as we look out in 0:03:19.800 --> 0:03:22.560 the year head the scope for valuation expansion in our 0:03:22.639 --> 0:03:25.320 view isn't as strong, especially in those parts of market 0:03:25.360 --> 0:03:28.120 that have already experienced tremendous kind of valuation gains, and 0:03:29.040 --> 0:03:30.760 most of those are in the growth and tech parts 0:03:30.800 --> 0:03:33.440 of market. There are parts of the market that probably 0:03:33.480 --> 0:03:36.200 will benefit as a FED continues to cut rates to 0:03:36.240 --> 0:03:40.120 see valuation expansion. But the main leg of the stool 0:03:40.160 --> 0:03:43.000 that we're leaning on for gains going forward is earnings 0:03:43.000 --> 0:03:45.720 growth toierpoint, And in fact, we're ending twenty twenty five 0:03:45.760 --> 0:03:49.080 with a pretty strong almost ten percent earnings growth picture, 0:03:49.120 --> 0:03:51.600 and we're looking at twenty twenty six and seeing another 0:03:51.960 --> 0:03:55.280 potential double digit for S ANDP earnings growth. So not 0:03:55.360 --> 0:03:58.320 a bad backdrop in from that perspective from a market 0:03:58.480 --> 0:03:59.640 gains outlook. 0:04:00.120 --> 0:04:03.040 So Mona talk to us about that. We're going to 0:04:03.080 --> 0:04:05.640 hear from the Fed next Wednesday, when Bloomberg will have 0:04:05.680 --> 0:04:08.840 full coverage of that. Of course, how important is the 0:04:08.920 --> 0:04:12.360 rate cutting cycle to stocks in twenty twenty six. I'm 0:04:12.360 --> 0:04:15.560 not sure what's been baked in and what hasn't been Yeah, 0:04:15.600 --> 0:04:15.880 you know. 0:04:16.360 --> 0:04:19.000 We think that markets are pricing in a FED that 0:04:19.120 --> 0:04:21.800 is going to take the Fed funds rate to a 0:04:21.839 --> 0:04:24.359 neutral level, and we think that's a reasonable base case. 0:04:24.400 --> 0:04:28.040 You know, at four percent or so, we're still relatively 0:04:28.080 --> 0:04:31.800 restrictive if you think inflation ends up in this two 0:04:31.880 --> 0:04:35.320 and a half to three percent range or maybe over 0:04:35.360 --> 0:04:36.000 time two two. 0:04:35.920 --> 0:04:36.440 And a half. 0:04:37.080 --> 0:04:40.120 Historically, the Fed likes to bring rates about one hundred 0:04:40.120 --> 0:04:43.360 bases points above inflation. So anywhere in this three and 0:04:43.400 --> 0:04:46.040 a half percent range we think makes sense for a 0:04:46.160 --> 0:04:48.680 terminal FED funds rate. And we do think, you know, 0:04:48.720 --> 0:04:53.400 as a FED lowers rates the economic impact usually we 0:04:53.440 --> 0:04:55.440 see it with a lag, so three to six months 0:04:55.520 --> 0:04:58.320 later you can start seeing consumer demand pick up. Of 0:04:58.320 --> 0:05:01.640 course corporate and consumer borrow start to pick up as well, 0:05:02.040 --> 0:05:03.760 and so we do think parts of the market that 0:05:03.880 --> 0:05:08.120 are more economically sensitive cyclically sensitive, you have the scope 0:05:08.160 --> 0:05:09.720 to play some catch up. 0:05:09.680 --> 0:05:13.080 Here Mona, thank you, thank you, thank you for coming on. 0:05:13.720 --> 0:05:17.880 Stay with us. More from Bloomberg Surveillance coming up after this. 0:05:25.160 --> 0:05:28.720 You're listening to the Bloomberg Surveillance podcast. Catch us Live 0:05:28.800 --> 0:05:31.960 weekday afternoons from seven to ten am Eastern Listen on 0:05:32.040 --> 0:05:35.719 Applecarplay and Android Auto with the Bloomberg Business app, or 0:05:35.880 --> 0:05:37.360 watch us live on YouTube. 0:05:37.560 --> 0:05:40.680 Neil Sharon joins us here from the University of York 0:05:40.720 --> 0:05:44.919 and of course London as well. He's a capital economics 0:05:45.000 --> 0:05:47.640 what's the signal headline at the top of your outlook 0:05:47.680 --> 0:05:51.560 for next year? Given the upside down world of Stormer 0:05:51.839 --> 0:05:53.240 in the United Kingdom. 0:05:53.200 --> 0:05:56.240 Well, the UKs is kind of cold, wet island that 0:05:56.240 --> 0:05:58.480 doesn't really work for the global economy. I have to say, 0:05:58.520 --> 0:05:59.960 I think the Bank of England's going to cut more 0:06:00.120 --> 0:06:01.960 markets are pricing in. That's the big call for next 0:06:02.040 --> 0:06:04.760 year for the UK. I think the big issue globally 0:06:05.360 --> 0:06:09.159 is whether the US can continue to outperform develop markets, 0:06:09.160 --> 0:06:11.560 and I think the answer is it probably will. Yes. 0:06:11.839 --> 0:06:14.159 Is it the AI story which has been such a 0:06:14.200 --> 0:06:16.520 theme over the last two or three years, and I'm 0:06:16.560 --> 0:06:19.520 not sure if it feels worn out, but there's definitely 0:06:19.520 --> 0:06:22.640 a little bit more cross winds cross current headwinds for 0:06:22.880 --> 0:06:23.559 the AI story. 0:06:23.680 --> 0:06:24.840 I think that's right. I think there is a bit 0:06:24.880 --> 0:06:27.720 more kind of caution, I would say, and you pick 0:06:27.760 --> 0:06:29.680 that up when you go and speak to clients. There's 0:06:29.680 --> 0:06:31.840 certainly more caution. But my view is it's got a 0:06:31.880 --> 0:06:34.080 lot further to run. Whether it's got a lot further 0:06:34.120 --> 0:06:37.920 to run in markets or whether there's some air inflating 0:06:37.920 --> 0:06:39.600 in the markets, I think is another question. But in 0:06:39.600 --> 0:06:43.039 the real equity, I think this is a generational technology. 0:06:43.200 --> 0:06:45.960 It should be regarded as a general purpose technology. It 0:06:46.000 --> 0:06:48.719 will transform productivity growth over the long run, and the 0:06:48.839 --> 0:06:49.679 US is at the anger. 0:06:50.080 --> 0:06:52.440 You've very publicly written about this. It's in your note 0:06:52.440 --> 0:06:55.599 for the for twenty twenty six as well. There is 0:06:55.600 --> 0:06:59.280 a reality of a sharp disinflation, if not price decline 0:06:59.400 --> 0:07:04.680 in China. How is the deflation exported to the West. 0:07:05.080 --> 0:07:08.720 Well, profoundly so. If you look at Chinese export prices 0:07:08.760 --> 0:07:11.960 since twenty twenty two, they've fallen by about the twenty percent. 0:07:12.800 --> 0:07:14.360 Export prices from the rest of the world have been 0:07:14.360 --> 0:07:17.800 broadly flat over that period, down twenty percent in China. 0:07:17.840 --> 0:07:20.960 And this is a manifestation of the over investment that's 0:07:20.960 --> 0:07:22.520 going on in China. It used to go into the 0:07:22.560 --> 0:07:25.360 property sector, obviously properties now and it's back. It's now 0:07:25.360 --> 0:07:28.600 going into the manufacturing sector, and manufacturer is a cutting 0:07:28.640 --> 0:07:32.200 price to shift volume, and it's flooding global markets. And 0:07:32.280 --> 0:07:34.400 the US is obviously pushed back the tariffs. The rest 0:07:34.440 --> 0:07:36.040 of the world has not really decided what it's going 0:07:36.080 --> 0:07:36.600 to do about it. 0:07:36.640 --> 0:07:39.040 In your history of central banks, is that enough of 0:07:39.080 --> 0:07:43.360 a tertiary or secondary idea that the FED can justify 0:07:43.560 --> 0:07:44.640 multiple rate cuts? 0:07:44.680 --> 0:07:46.920 I don't think so, not in and of itself. No, 0:07:47.400 --> 0:07:49.880 it will perhaps zero point one point two percent off 0:07:49.880 --> 0:07:52.840 of headline inflation in advances. Yeah, it's not. It's not 0:07:52.840 --> 0:07:53.240 a big deal. 0:07:53.320 --> 0:07:56.160 We've got that CFA, it's teen swots, don't. 0:07:55.960 --> 0:07:56.400 Worry about it. 0:07:56.440 --> 0:07:57.160 Don't worry about it. 0:07:57.360 --> 0:08:01.760 So it's China and net positive negative for this economy 0:08:01.800 --> 0:08:04.000 here going forward here, I'm just not sure where are 0:08:04.040 --> 0:08:07.320 we selling them stuff? Are they giving us supply coming 0:08:07.320 --> 0:08:08.040 out of the China. 0:08:08.080 --> 0:08:11.240 Well, I think we're definitely through the phase where the 0:08:11.280 --> 0:08:13.600 rest of the world had decided that globalization was an 0:08:13.720 --> 0:08:17.200 unalloyed good thing, right, that we should embrace it, and 0:08:17.240 --> 0:08:19.760 I think we're much more cognizant of the downside. Yes, 0:08:19.840 --> 0:08:20.840 we get to consumes. 0:08:21.680 --> 0:08:23.160 I'm still a globalization guy. 0:08:23.800 --> 0:08:25.800 I don't know, but I think that the thing that 0:08:25.840 --> 0:08:27.800 has changed, and they don't teach this in economics, and 0:08:27.800 --> 0:08:32.080 they should do, is the intersection between economics and national security. 0:08:32.200 --> 0:08:35.000 The point that is the issue that has people in 0:08:35.040 --> 0:08:36.800 the US are waking up to and people in Europe 0:08:36.800 --> 0:08:37.880 are just starting to wake up. 0:08:37.960 --> 0:08:41.920 So the modern military industrial complex is that enough of 0:08:41.960 --> 0:08:45.720 a fiscal oomph to make nominal GDP in any given country, 0:08:46.040 --> 0:08:48.000 including the US, better than good. 0:08:49.040 --> 0:08:51.640 It's probably in the case of the US, Yes, it's 0:08:51.640 --> 0:08:53.959 providing quite a lot of support to demand in the US. 0:08:54.000 --> 0:08:56.920 If you look at the share of government spending taken 0:08:56.960 --> 0:08:59.840 up by the military. See, the big question is will 0:08:59.840 --> 0:09:02.560 it all this transformed growth prospects in Europe? And we've 0:09:02.559 --> 0:09:05.640 seen a big fiscal expansion or planned expansion and fysical 0:09:05.640 --> 0:09:06.600 expansion in Germany. 0:09:06.679 --> 0:09:10.040 It's right, what does ye expect? 0:09:10.559 --> 0:09:11.920 It's not going top it's not going to make a 0:09:11.960 --> 0:09:15.240 big difference. So we've raised our growth forecast for next 0:09:15.320 --> 0:09:18.400 year from zero point five percent. You're on your growth 0:09:18.440 --> 0:09:21.720 in Germany and GDP to one percent. So it's barely moving. 0:09:22.120 --> 0:09:23.160 It's unbelievable. 0:09:23.240 --> 0:09:26.960 Well, I mean, it's growth all right. Central banks. It 0:09:26.960 --> 0:09:30.040 seems like central banks around the globe are cutting raising 0:09:30.040 --> 0:09:31.400 with the exception of the Bank of Japan. 0:09:32.480 --> 0:09:33.400 How impactful z. 0:09:33.480 --> 0:09:35.680 F for twenty twenty six global growth? 0:09:35.720 --> 0:09:37.880 Well, the key question here is that you've got to 0:09:37.920 --> 0:09:40.760 look at what central banks will do with policy versus 0:09:40.840 --> 0:09:44.360 what's priced into the market. Okay, and my bet is 0:09:44.400 --> 0:09:46.040 that the market has got a bit too carried away 0:09:46.040 --> 0:09:48.679 with the idea of federates next year. US economy is 0:09:48.720 --> 0:09:52.160 holding up reasonably well. Yes, employment is slowing, but productivity 0:09:52.160 --> 0:09:55.840 growth is accelerating. Inflation is still probably a bit too 0:09:55.920 --> 0:09:58.000 high for comfort. You've got a fiscal deficit of six 0:09:58.000 --> 0:10:01.400 percent of GDP. So my bad is that the Fed 0:10:01.480 --> 0:10:03.840 does not cut by the four that the four twenty 0:10:03.880 --> 0:10:07.400 five BIFs that are comedy priced into markets. In contrast, 0:10:07.800 --> 0:10:10.160 I don't think the market's quite taking seriously that the 0:10:10.240 --> 0:10:12.920 prospect we might get lower rates, particularly in the UK, 0:10:13.000 --> 0:10:14.440 but also in the Euros next year. 0:10:14.720 --> 0:10:17.480 I did an event yesterday. I'll talk about it later, folks, 0:10:17.559 --> 0:10:22.320 David Kotok and Kathleen stuffs and global interdependence. McKee was there, Yeah, 0:10:22.440 --> 0:10:25.440 the conversation with low brainer mckey's for the heavyweight. I know, 0:10:25.559 --> 0:10:29.280 I know, and I'm sitting there and up comes Catherine Man. 0:10:29.280 --> 0:10:31.280 I get a big Catheryne manor hug. That's where they 0:10:31.360 --> 0:10:35.400 racket id yep. And it reminded me of the wonderful 0:10:35.440 --> 0:10:37.920 descent of the Bank of England. Neil, you're one of 0:10:37.920 --> 0:10:41.679 the greatest transatlantic people I know. Do you embrace that 0:10:41.720 --> 0:10:45.480 the FED should enjoy the descent of Catherine Man in 0:10:45.520 --> 0:10:46.559 the Bank of England? 0:10:46.800 --> 0:10:47.359 Absolutely? 0:10:47.440 --> 0:10:47.600 Yes. 0:10:47.760 --> 0:10:50.400 I think that what we've we've perhaps suffered from with 0:10:50.440 --> 0:10:52.760 monetary policy and in the fiscal policy over the past 0:10:53.200 --> 0:10:55.600 decade or so is perhaps kind of groups group think. 0:10:56.360 --> 0:10:58.600 So I think the ex that you get some descent 0:10:59.000 --> 0:11:03.160 within within policymakers. That's a good thing. It should life 0:11:03.200 --> 0:11:05.439 in the debate, it should shaft in policymakers' minds. It 0:11:05.440 --> 0:11:07.079 should lead to better policy outcomes. 0:11:07.679 --> 0:11:11.880 From where you sit from a distance, the uproar over 0:11:11.960 --> 0:11:15.960 Kevin Hasset right now, if you look at if you 0:11:16.080 --> 0:11:19.720 look at the debate, can the presidents and the governors 0:11:19.800 --> 0:11:22.079 push against any given new chairman? 0:11:22.840 --> 0:11:25.440 Well, I think this is an existential question hanging over 0:11:25.520 --> 0:11:29.440 markets in twenty twenty six. In theory, one voice in 0:11:29.480 --> 0:11:32.040 twelve that votes, one voice in nineteen on the committee. 0:11:32.320 --> 0:11:34.840 The question is that how dominant does that voice become? 0:11:34.960 --> 0:11:38.000 How and to what extent can it shift attitudes on 0:11:38.040 --> 0:11:41.120 the committee. My sense is that Hasset might end up 0:11:41.160 --> 0:11:44.720 being a bit more orthodox than some people expect. It 0:11:44.800 --> 0:11:48.559 looks to me from a distance like an old school Republican, 0:11:49.640 --> 0:11:52.280 perhaps talking a good game to get the nomination. But 0:11:52.360 --> 0:11:54.120 let's see, how was. 0:11:54.120 --> 0:11:55.880 He ecuonomy over in London? What's it like in London 0:11:55.880 --> 0:11:57.480 these days? How are folks feeling over there? 0:11:57.840 --> 0:12:01.040 Well, londoner comes to New York. Expensive in New York. 0:12:01.040 --> 0:12:04.280 I'll tell you that thirteen bucks for a sandwich from 0:12:04.320 --> 0:12:06.840 pred It's not that it's not that expensive in London. 0:12:07.440 --> 0:12:10.160 The UK economy is in a place where it's not 0:12:10.520 --> 0:12:12.720 you know, it doesn't feel terrible, but it's not great either. 0:12:12.760 --> 0:12:15.199 We're looking at the norm though for England. 0:12:15.280 --> 0:12:18.439 I mean it's northern Europe I think, I think particularly 0:12:18.600 --> 0:12:20.640 compared to if you look at the growth performance of 0:12:20.640 --> 0:12:23.920 the US economy versus not just the UK, but Europe 0:12:23.920 --> 0:12:26.800 more generally concerned into Europe, it's night and day over 0:12:26.800 --> 0:12:29.400 the past decade. You plot pot a child of GDP 0:12:29.600 --> 0:12:31.000 and look at the register it's opened up. 0:12:31.360 --> 0:12:34.480 Lisa, can you take the other sweet greens for like 0:12:34.520 --> 0:12:40.280 a pre launch for it's like a scandal here it is, 0:12:41.559 --> 0:12:44.200 there's no cop it's just like what it's like the 0:12:44.240 --> 0:12:46.679 green stuff? Yeah, twenty bucks. 0:12:47.040 --> 0:12:50.480 But there's an interesting point here where everyone is obsessed 0:12:50.480 --> 0:12:52.240 with the kind of affordability and cost of living and 0:12:52.679 --> 0:12:55.160 politicians are saying, well, inflation is coming down, and the 0:12:55.240 --> 0:12:57.880 point is it's not that inflation's going out. The price 0:12:58.000 --> 0:12:58.880 level is still. 0:13:00.240 --> 0:13:03.880 That's Stephen Roach just wrote a brilliant substeck on this 0:13:04.040 --> 0:13:06.439 overt eale Youni versu thank you for we're going to 0:13:06.520 --> 0:13:09.120 do more on that first level as it come on down. Okay, 0:13:09.200 --> 0:13:11.160 are you are you moving to New York? 0:13:11.360 --> 0:13:13.840 I wish I was callorforda evil hosterday. 0:13:14.040 --> 0:13:16.959 I loved that, miss sir and Capital Economics. Thank you 0:13:17.080 --> 0:13:20.920 so much for Darkning. The dory is from Always London. 0:13:21.360 --> 0:13:25.400 Stay with us. More from Bloomberg Surveillance coming up after this. 0:13:32.600 --> 0:13:36.520 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:13:36.559 --> 0:13:39.840 starting at seven am Eastern on Applecarplay and Android Auto 0:13:40.000 --> 0:13:42.920 with the Bloomberg Business app. You can also listen live 0:13:43.040 --> 0:13:46.559 on Amazon Alexa from our flagship New York station, Just 0:13:46.640 --> 0:13:50.760 say Alexa play Bloomberg eleven thirty We go ever stronger. 0:13:50.840 --> 0:13:54.480 In this eight o'clock hour, Heidi Crabo reticker with his 0:13:54.640 --> 0:14:00.360 senior fellow of g Economics at the Council on Foreign Relations. Heidi, 0:14:00.480 --> 0:14:03.760 I don't even know where to begin other than is 0:14:03.840 --> 0:14:08.800 a complete amateur. Paul, Let's talk to mister Putin. Yeah shocked, 0:14:09.000 --> 0:14:15.160 nothing got done? No, Heidi, did we expect any other outcome? So? 0:14:15.360 --> 0:14:18.360 I think, you know it's it's exactly as you said. 0:14:18.640 --> 0:14:24.520 This is really you know, a question over the team 0:14:24.920 --> 0:14:30.200 that's been sent in particularly you know Witkoff and believing 0:14:30.280 --> 0:14:34.120 Putin and falling you know, again and again for you know, 0:14:34.640 --> 0:14:38.640 the dangled promises of investment, while it's clear that Putin 0:14:38.720 --> 0:14:41.480 is playing for time and and helping for a fracture 0:14:41.480 --> 0:14:44.200 in NATO, because this from the beginning has not just 0:14:44.320 --> 0:14:47.720 been about Ukraine. It's been about fracturing NATO, which is 0:14:47.760 --> 0:14:51.680 a much bigger picture item for Vladimir Putin. 0:14:52.480 --> 0:14:57.000 To what extent should President Trump get involved here? I mean, 0:14:57.160 --> 0:15:02.680 mister Whittaker, mister Rubio meeting with Putin, that just doesn't 0:15:02.720 --> 0:15:05.160 feel like that's a recipe for really moving the ball 0:15:06.040 --> 0:15:06.600 forward here. 0:15:07.840 --> 0:15:10.000 Well, you have, I mean, you have sort of a 0:15:10.160 --> 0:15:16.120 divided approach to within the Trump sphere with witkof Vance 0:15:16.200 --> 0:15:19.520 and Jared Kushner on one side. You've got Rubio trying 0:15:19.600 --> 0:15:23.960 to play Kate into a certain extent and steer the 0:15:24.160 --> 0:15:28.160 ship back on in negotiations to a better place. And 0:15:28.400 --> 0:15:31.360 I think at the end of the day, Trump wants 0:15:31.600 --> 0:15:36.760 to be he has this cork constraint that he does 0:15:36.840 --> 0:15:39.920 not want a visible Ukrainian defeat on his watch. He 0:15:40.000 --> 0:15:42.800 wants a Nobel Priest prize. So I think in terms 0:15:42.840 --> 0:15:47.760 of his getting involved, you know, he wants concessions from Ukraine, 0:15:48.000 --> 0:15:50.360 but he doesn't want to preside over a collapse. 0:15:50.440 --> 0:15:52.720 Okay, Heidi, you know it's just us. It's like forty 0:15:52.760 --> 0:15:56.600 two people listening coast to coast and worldwide as well. Heidi, 0:15:57.040 --> 0:16:00.920 What would Colin Powell do? What would Robert Gates do? 0:16:01.480 --> 0:16:06.160 What would Secretary Rice do? Or selected other Democratic State 0:16:06.240 --> 0:16:09.560 Department diplomacy people. Would they go over there and hope 0:16:09.600 --> 0:16:12.720 for something so that any given president can win a 0:16:12.840 --> 0:16:14.320 prize like price Patrol. 0:16:14.840 --> 0:16:15.600 I expect. 0:16:17.600 --> 0:16:19.560 We're looking you know, you know, we're looking at a 0:16:19.680 --> 0:16:23.680 very different approach to foreign policy and particularly visa v Russia. 0:16:23.960 --> 0:16:25.880 We knew that coming in, you know, when Trump came 0:16:25.920 --> 0:16:28.120 into office, that that that that he was looking for 0:16:28.240 --> 0:16:31.360 a very different relationship with Vladimir Putin. I think, you know, 0:16:31.440 --> 0:16:37.160 looking at way's traditional, you know, strong Republicans and Democrats 0:16:37.200 --> 0:16:39.920 would deal would deal with this would probably be to 0:16:40.000 --> 0:16:42.040 make sure that Ukraine, first of all, was in the room. 0:16:42.560 --> 0:16:46.400 You know, Ukraine and the Europeans have really been completely 0:16:46.560 --> 0:16:49.680 sidelined in this. It's been a you know, a you know, 0:16:50.240 --> 0:16:54.720 a strong a strong man. Trump and Putin divided, you know, 0:16:54.840 --> 0:16:57.760 dividing Europe play right now. And I think, you know, 0:16:57.920 --> 0:17:00.720 Zelensky has it right. It's there could be a moment 0:17:01.080 --> 0:17:04.440 for an opportunity to end the war, and there is 0:17:04.520 --> 0:17:07.520 a lot of diplomatic activity going on. But we have 0:17:08.240 --> 0:17:10.480 we have not put pressure on Russia. I mean, the 0:17:10.560 --> 0:17:14.119 Europeans are putting pressure on Russia, but the United States 0:17:14.280 --> 0:17:17.080 is really not. We haven't we haven't been as aggressive 0:17:17.119 --> 0:17:17.840 with sanctions. 0:17:18.440 --> 0:17:18.920 We haven't. 0:17:19.160 --> 0:17:26.920 You know, we haven't really backed our allies in supporting Ukraine. 0:17:27.640 --> 0:17:33.280 And certainly if the US, the US is putting certain 0:17:33.320 --> 0:17:37.000 pressure on for example, India for buying for continuing to 0:17:37.080 --> 0:17:42.320 buy Russian Russian oil, but it really isn't putting the 0:17:42.560 --> 0:17:44.639 it isn't really putting the thumb on the pressure on 0:17:44.840 --> 0:17:48.760 Vladimir Putin. And I just don't think absent that you're 0:17:48.760 --> 0:17:49.840 going to see any movement. 0:17:50.440 --> 0:17:52.520 Okay, so we're seeing no movement. I think Paul and 0:17:52.560 --> 0:17:55.520 I are asking the same question where we say in. 0:17:55.600 --> 0:18:01.680 February, well in February, I mean coming up on the 0:18:01.840 --> 0:18:03.000 on the anniversary of this. 0:18:03.359 --> 0:18:06.000 I mean, does Lenski run out? I mean serious stuff. 0:18:06.080 --> 0:18:08.440 Does the Leznsky run out of money? Does he go 0:18:08.520 --> 0:18:11.320 out and sink six more oil? Tankers out in the 0:18:11.400 --> 0:18:14.239 Black Sea or orherever? Is it a drone war? I mean, 0:18:14.320 --> 0:18:17.520 where are we in this? I think all of us listening, Heidi, 0:18:17.680 --> 0:18:20.680 with your wonderful work at the consul and Foreign Relations. 0:18:21.119 --> 0:18:24.439 The bottom line is we're benumbed by this, Lisa. How 0:18:24.480 --> 0:18:25.640 long has it been? Three years? 0:18:26.320 --> 0:18:26.720 The wars? 0:18:26.800 --> 0:18:27.840 Three years? Four years? 0:18:27.920 --> 0:18:28.280 Three years? 0:18:28.359 --> 0:18:31.880 Yeah, yeah, Heidi, it's you know, it's yeah in America, 0:18:32.040 --> 0:18:34.240 wars four years, that's it. Yeah, you know, that's what 0:18:34.359 --> 0:18:37.640 was a problem with Vietnam. Heidi. Where are we which? 0:18:37.880 --> 0:18:41.159 Which ghost are we fighting? In February? We're just going 0:18:41.200 --> 0:18:43.680 to have Ukraine run out of money? Is one talking point. 0:18:45.160 --> 0:18:48.200 So you know, I do think there are more people 0:18:48.560 --> 0:18:51.919 in the United States and certainly in Europe paying attention 0:18:52.160 --> 0:18:55.680 to this because you know, for Europe this is pretty existential. 0:18:56.000 --> 0:18:58.040 But there is this ticking time bomb in the back, 0:18:58.359 --> 0:19:00.840 in the background, which is where's money going to come 0:19:00.920 --> 0:19:05.240 from to pay for not only the military, you know, 0:19:05.359 --> 0:19:09.520 the acquisition of arms and the arming of Ukraine, but 0:19:09.640 --> 0:19:14.280 also just for reconstruction, for paying pensions. And the IMF 0:19:14.440 --> 0:19:17.080 was just there and they reached an agreement on a 0:19:17.200 --> 0:19:22.400 new a new facility for eight point one billion dollars 0:19:22.440 --> 0:19:25.160 and that's smaller than I think. 0:19:25.359 --> 0:19:26.840 You know, Ukraine was hoping for. 0:19:27.200 --> 0:19:30.479 And they've tagged the financing gap for the next three 0:19:30.560 --> 0:19:32.639 years at one hundred and thirty six and a half 0:19:33.119 --> 0:19:33.919 billion dollars. 0:19:34.320 --> 0:19:35.399 That is huge. 0:19:36.320 --> 0:19:39.200 Just in you know, twenty six twenty seven, they're looking 0:19:39.240 --> 0:19:42.520 at sixty three billion of a financing gap, which means 0:19:42.600 --> 0:19:44.880 the Europeans, since the US is not going to be there, 0:19:45.520 --> 0:19:47.680 the Europeans really need to step up. They either have 0:19:47.800 --> 0:19:50.960 to pay it out of their budgets or they have 0:19:51.080 --> 0:19:55.960 to look to this reparation loan that's been under negotiation 0:19:56.119 --> 0:19:57.040 for a very long time. 0:19:57.320 --> 0:19:59.480 Do you've got to continue this conversation. Just bring in 0:19:59.600 --> 0:20:03.960 Heidi about Retika. She's with the console on foreign relations. 0:20:04.280 --> 0:20:07.640 Stay with us. More from Bloomberg Surveillance coming. 0:20:07.480 --> 0:20:08.359 Up after this. 0:20:15.560 --> 0:20:19.439 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:20:19.480 --> 0:20:22.800 starting at seven am Eastern on Applecarplay and Android Auto 0:20:22.920 --> 0:20:25.880 with the Bloomberg Business app. You can also listen live 0:20:25.960 --> 0:20:29.520 on Amazon Alexa from our flagship New York station, Just 0:20:29.600 --> 0:20:33.200 say Alexa play Bloomberg eleven thirty the newspaper. 0:20:33.320 --> 0:20:35.119 So I mean they're lighting the tree tonight. Are you 0:20:35.200 --> 0:20:36.160 going to the tree lighting? 0:20:36.240 --> 0:20:38.040 Lisa, No, it's a madhouse. 0:20:38.119 --> 0:20:38.760 It's a mad house. 0:20:39.160 --> 0:20:41.000 Tree is almost as big. I don't know if you 0:20:41.080 --> 0:20:43.760 know this. The tree is almost as big as scarlet foods. 0:20:44.000 --> 0:20:48.399 Is a blackyard now here. It's it's ginormous. 0:20:48.440 --> 0:20:50.200