1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,000 Speaker 1: us live on YouTube. 6 00:00:27,080 --> 00:00:30,560 Speaker 2: We start strong with Frankly Folks. The most important interview 7 00:00:30,600 --> 00:00:33,960 Speaker 2: of the day. Acid allocators are Diamond does and every 8 00:00:34,000 --> 00:00:37,880 Speaker 2: firm's got ten twenty thirty people loving. They want to 9 00:00:37,920 --> 00:00:41,519 Speaker 2: get out there and allocate your assets. Steve chiveron is 10 00:00:41,520 --> 00:00:45,199 Speaker 2: it federated federate inter medicine? He does it with a 11 00:00:45,479 --> 00:00:50,440 Speaker 2: shocking clarity and directness. Are we over diversified right now? 12 00:00:50,479 --> 00:00:50,960 Speaker 2: O wise? 13 00:00:51,000 --> 00:00:55,520 Speaker 3: One depends on where you're investing. I think in the US, 14 00:00:55,640 --> 00:00:58,440 Speaker 3: I think investors are about right. I think being overweight 15 00:00:58,480 --> 00:01:01,280 Speaker 3: the US. I think that home bio is actually appropriate 16 00:01:01,360 --> 00:01:04,880 Speaker 3: right now. And I think the non US equity outperformance 17 00:01:04,920 --> 00:01:08,800 Speaker 3: of the first half will prove to be relatively short lived. 18 00:01:09,440 --> 00:01:12,039 Speaker 2: I was in you say the worst is behind US. 19 00:01:12,240 --> 00:01:14,440 Speaker 3: Worst of the tariffun certainty. Yeah, I agree, I think 20 00:01:14,440 --> 00:01:17,240 Speaker 3: it is, and I think you're in a de escalation 21 00:01:17,360 --> 00:01:20,959 Speaker 3: phase there. I wasn't surprised by the presidents kind of 22 00:01:21,000 --> 00:01:23,600 Speaker 3: slapping around of Europe on Friday. There was a little 23 00:01:23,640 --> 00:01:27,360 Speaker 3: bit of complacency I think, both amongst the negotiating parties 24 00:01:27,360 --> 00:01:29,920 Speaker 3: and the market that you know, once he had de escalated, 25 00:01:29,959 --> 00:01:32,480 Speaker 3: that was it and you could kind of slow walk it. 26 00:01:32,560 --> 00:01:34,720 Speaker 3: So he needed to kind of shock the system a 27 00:01:34,760 --> 00:01:38,280 Speaker 3: little bit. I also wasn't surprised when that had its 28 00:01:38,319 --> 00:01:41,200 Speaker 3: intended effect and he pushed back out to July. But 29 00:01:41,680 --> 00:01:45,640 Speaker 3: Tom talking to investors outside the United States, they were 30 00:01:45,720 --> 00:01:49,320 Speaker 3: shockingly under allocated to the US. You know, you have 31 00:01:49,600 --> 00:01:51,880 Speaker 3: folks on the mainland with maybe only twenty percent in 32 00:01:52,000 --> 00:01:56,160 Speaker 3: US equities, which is sixty percent, seventy percent of the 33 00:01:56,200 --> 00:01:59,560 Speaker 3: global market cap of the kind of MSCI world or 34 00:01:59,680 --> 00:02:02,680 Speaker 3: MSCA country world. And so I think there's still buyers 35 00:02:02,720 --> 00:02:05,080 Speaker 3: to come into this market. And I think the most 36 00:02:05,120 --> 00:02:09,320 Speaker 3: likely outcome here is a slow Sole crushing grind higher 37 00:02:09,320 --> 00:02:12,480 Speaker 3: in US equities that will pull the skeptics in over 38 00:02:12,480 --> 00:02:13,239 Speaker 3: the course of the year. 39 00:02:13,560 --> 00:02:17,120 Speaker 2: Sol Crushing Grind that was on Everston Lincoln Palmer's third album, 40 00:02:17,960 --> 00:02:20,000 Speaker 2: Crazy Crushing. 41 00:02:20,160 --> 00:02:22,239 Speaker 4: There's a reserve going to do here, given some of 42 00:02:22,280 --> 00:02:24,560 Speaker 4: the economic data we're seeing here and some of the 43 00:02:25,240 --> 00:02:29,120 Speaker 4: I guess some of the uncertainty that from the tariff discussions. 44 00:02:29,919 --> 00:02:33,399 Speaker 3: You know, look, I find some of the rhetoric uncertainty 45 00:02:33,440 --> 00:02:38,160 Speaker 3: out of the Federal Reserve a little surprising. I get 46 00:02:38,200 --> 00:02:40,840 Speaker 3: wanting to be patient. I think that's right. I think 47 00:02:40,840 --> 00:02:44,720 Speaker 3: if you think thoughtfully about any impact of tariffs, the 48 00:02:44,760 --> 00:02:47,359 Speaker 3: impacts are much more severe on growth than they are inflation. 49 00:02:47,919 --> 00:02:49,680 Speaker 3: And I think you have an economy that has slowed 50 00:02:49,680 --> 00:02:52,560 Speaker 3: in a consumer that's under some pressure. So I hear 51 00:02:52,600 --> 00:02:54,960 Speaker 3: them talk about patients, I think they're going to cut 52 00:02:54,960 --> 00:02:56,280 Speaker 3: this year. They just don't know it yet. 53 00:02:56,400 --> 00:03:00,600 Speaker 2: You have an advantage of adults, it federated. Are people 54 00:03:00,680 --> 00:03:03,760 Speaker 2: old and grizzled? I mean, you're doing asset allocation and 55 00:03:03,800 --> 00:03:06,919 Speaker 2: that and your clear memo is by American, by technology. 56 00:03:07,360 --> 00:03:09,600 Speaker 2: Is that what your portfolio managers are doing. 57 00:03:09,840 --> 00:03:12,480 Speaker 3: That's what we did this cycle. I mean, you know, 58 00:03:13,160 --> 00:03:14,679 Speaker 3: we said at the beginning of the year I was 59 00:03:14,720 --> 00:03:17,840 Speaker 3: on this show that we were strapping ourselves to the mast. 60 00:03:17,919 --> 00:03:21,000 Speaker 3: We weren't going to get caught in the emotional you know, turmoil, 61 00:03:21,160 --> 00:03:24,720 Speaker 3: and that we wanted to add to equities through the distress. 62 00:03:24,840 --> 00:03:27,600 Speaker 3: And we did and where we added Tom was in 63 00:03:27,680 --> 00:03:30,440 Speaker 3: large cap growth. You got the mag seven and the 64 00:03:30,520 --> 00:03:34,280 Speaker 3: large cap Growth index somewhere around six multiple points below 65 00:03:34,280 --> 00:03:38,080 Speaker 3: it's three year average. You don't pass on a six 66 00:03:38,200 --> 00:03:41,840 Speaker 3: multiple point discount with companies that are generating the kind 67 00:03:41,880 --> 00:03:43,960 Speaker 3: of cash flow and growth that those companies are. And 68 00:03:44,000 --> 00:03:46,800 Speaker 3: so that was the buy this time around. I'll tell 69 00:03:46,800 --> 00:03:48,680 Speaker 3: you I still think and I know it's been waiting 70 00:03:48,720 --> 00:03:51,280 Speaker 3: for goodou, but I think the second half story is 71 00:03:51,280 --> 00:03:54,600 Speaker 3: going to be ones where small caps and cyclicals assert 72 00:03:54,680 --> 00:03:55,520 Speaker 3: themselves as well. 73 00:03:56,560 --> 00:04:01,040 Speaker 4: So what do we we had the U that downgraded, 74 00:04:01,120 --> 00:04:03,120 Speaker 4: I mean, does that kind of call into any question 75 00:04:04,320 --> 00:04:07,040 Speaker 4: recession risk here? I mean? Or we're just kind of 76 00:04:07,040 --> 00:04:08,880 Speaker 4: a slowing economy grind higher. 77 00:04:09,320 --> 00:04:13,600 Speaker 3: As goes the US consumer goes the US economy, and 78 00:04:13,720 --> 00:04:16,680 Speaker 3: as goes the US labor market goes the US consumer. 79 00:04:17,600 --> 00:04:17,800 Speaker 5: You know. 80 00:04:17,880 --> 00:04:20,600 Speaker 3: And here's the thing, and here's why I don't buy 81 00:04:20,680 --> 00:04:24,560 Speaker 3: into the kind of recession views. Companies had a wonderful 82 00:04:24,600 --> 00:04:27,640 Speaker 3: excuse if they wanted it to lay off workers last month. 83 00:04:28,040 --> 00:04:31,240 Speaker 3: They had terriff uncertainty, they had growth slowed downs, They 84 00:04:31,240 --> 00:04:32,800 Speaker 3: could have slashed their guidance. 85 00:04:32,839 --> 00:04:33,279 Speaker 2: They didn't. 86 00:04:33,279 --> 00:04:36,400 Speaker 3: They pulled it in some cases, and they didn't take it. 87 00:04:36,440 --> 00:04:38,839 Speaker 3: And I think this is the lesson of twenty twenty 88 00:04:39,200 --> 00:04:42,279 Speaker 3: when folks, you know, companies fired folks and then it 89 00:04:42,320 --> 00:04:44,560 Speaker 3: took them three years and thirty percent more to hire 90 00:04:44,560 --> 00:04:47,760 Speaker 3: them back. And so unless you see that labor market break, 91 00:04:48,320 --> 00:04:51,280 Speaker 3: I don't think you have recession on the table. I'd 92 00:04:51,279 --> 00:04:53,360 Speaker 3: also say Paul, that you know there's this there's this 93 00:04:53,560 --> 00:04:57,000 Speaker 3: wonderful romanticism around the bond vigilantes, and that's what's pushing 94 00:04:57,080 --> 00:05:00,520 Speaker 3: yields up. But that doesn't explain German bunniel. That doesn't 95 00:05:00,520 --> 00:05:04,080 Speaker 3: explain Japanese government bond yields. And if that really is 96 00:05:04,080 --> 00:05:08,240 Speaker 3: a story of three separate bond market issues, would you 97 00:05:08,440 --> 00:05:12,640 Speaker 3: rather buy the bond when they're raising debt to buy bullets, 98 00:05:12,680 --> 00:05:15,279 Speaker 3: or would you rather buy the US treasury where they're 99 00:05:15,320 --> 00:05:16,839 Speaker 3: raising debt to stimulate. 100 00:05:16,480 --> 00:05:18,920 Speaker 2: I don't care. The reason we hedge in is I 101 00:05:18,960 --> 00:05:21,000 Speaker 2: want you to talk about it is a new way. 102 00:05:21,080 --> 00:05:22,960 Speaker 2: I did this the other day at a fabulous meeting 103 00:05:23,040 --> 00:05:27,480 Speaker 2: with your good competitor PIMCO, and we talked about all 104 00:05:27,520 --> 00:05:32,080 Speaker 2: these new derivative instruments. Federated and your good competitor, PIMCOH 105 00:05:32,480 --> 00:05:37,920 Speaker 2: Fidelity and others are incredibly vanilla you avoid the derivative plague. 106 00:05:38,000 --> 00:05:41,440 Speaker 2: Right now, we got lots of buy right strategies. Everybody's 107 00:05:41,480 --> 00:05:44,839 Speaker 2: got a buffer thing going in that tell me about 108 00:05:45,000 --> 00:05:50,240 Speaker 2: asset allocation and the solution being all these gimmicky investments. 109 00:05:50,839 --> 00:05:51,080 Speaker 5: Yeah. 110 00:05:51,120 --> 00:05:55,080 Speaker 3: Look, I think for very specific client needs, whether it's 111 00:05:55,200 --> 00:05:58,599 Speaker 3: enhancing income or you've got real risk aversion, you know, 112 00:05:58,680 --> 00:06:01,800 Speaker 3: derivatives can play a role over the long run in 113 00:06:01,880 --> 00:06:06,960 Speaker 3: terms of building sustainable, quiet wealth, if you will. The 114 00:06:07,000 --> 00:06:10,960 Speaker 3: story is about staying invested. I mean everything around that 115 00:06:11,160 --> 00:06:13,919 Speaker 3: is just behavioral. It's about staying invested. So the question 116 00:06:14,080 --> 00:06:17,240 Speaker 3: is how do you understand the client, how do you 117 00:06:17,320 --> 00:06:20,840 Speaker 3: understand what their what their risk tolerance is, and then 118 00:06:20,920 --> 00:06:24,480 Speaker 3: build them a long term asset allocation and then be 119 00:06:24,600 --> 00:06:28,200 Speaker 3: tactical enough tom that you don't whips all your way 120 00:06:28,200 --> 00:06:31,760 Speaker 3: out of returns, but you provide the client with enough 121 00:06:31,760 --> 00:06:33,960 Speaker 3: comfort to say, Okay, we're not just sitting here blindly. 122 00:06:34,000 --> 00:06:35,360 Speaker 3: Because at the end of the day, the story is 123 00:06:35,400 --> 00:06:39,159 Speaker 3: really simple. Just because it's difficult doesn't mean that it's complicated. 124 00:06:39,320 --> 00:06:42,400 Speaker 3: Investing is difficult because it's hard to stay invested, it's 125 00:06:42,400 --> 00:06:45,400 Speaker 3: hard to stay unemotional, but it's not nearly as complicated 126 00:06:45,440 --> 00:06:47,200 Speaker 3: as we make it out to be. That's just us 127 00:06:47,760 --> 00:06:49,520 Speaker 3: making ourselves feel better that it's hard. 128 00:06:49,720 --> 00:06:52,640 Speaker 2: See how he gets he just ramps it up there. 129 00:06:52,760 --> 00:06:55,880 Speaker 2: Sure he gets a totally mental engage like stand up. 130 00:06:56,680 --> 00:06:58,320 Speaker 2: That was brilliant. I think we're going to use that 131 00:06:58,400 --> 00:07:01,200 Speaker 2: on single best idea to Steve shiveron Thank you so 132 00:07:01,320 --> 00:07:04,560 Speaker 2: much with feeder airms. What you just heard there, folks, Karanzi. 133 00:07:04,760 --> 00:07:08,640 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 134 00:07:08,680 --> 00:07:11,960 Speaker 1: starting at seven am Eastern on Applecarplay. 135 00:07:11,200 --> 00:07:13,640 Speaker 6: And Android Auto with the Bloomberg Business app. 136 00:07:13,720 --> 00:07:16,760 Speaker 1: You can also listen live on Amazon Alexa from our 137 00:07:16,800 --> 00:07:21,320 Speaker 1: flagship New York station, Just say Alexa play Bloomberg eleven thirty. 138 00:07:21,640 --> 00:07:24,160 Speaker 2: He is definitive as a public service of the nation. 139 00:07:24,320 --> 00:07:28,440 Speaker 2: Nicholas Burns joins us now with this work across our 140 00:07:28,480 --> 00:07:32,800 Speaker 2: State Department, our diplomacy for decades, culminating and extended to 141 00:07:32,840 --> 00:07:37,040 Speaker 2: her duty as ambassador to China. We welcome Nick Burns 142 00:07:37,040 --> 00:07:38,960 Speaker 2: of Wellesley, Massachusetts this morning. 143 00:07:39,400 --> 00:07:39,640 Speaker 5: Nick. 144 00:07:39,800 --> 00:07:42,960 Speaker 2: What I loved great about your eight day work week 145 00:07:43,400 --> 00:07:46,880 Speaker 2: in China was there you would be working doing the 146 00:07:46,920 --> 00:07:50,400 Speaker 2: diplomatic thing in Beijing, and then you get on the 147 00:07:50,520 --> 00:07:54,160 Speaker 2: train here's a caption. Folks, most people in China. Folks 148 00:07:54,200 --> 00:07:57,880 Speaker 2: like me, we go to Hong Kong, Shanghai, to blocks 149 00:07:57,880 --> 00:07:59,920 Speaker 2: of Beijing, and we say we went to China. Nick 150 00:08:00,080 --> 00:08:04,280 Speaker 2: Burns has done further. We crossed the Yellow River at 151 00:08:04,320 --> 00:08:07,400 Speaker 2: Hanan at one hundred and ninety one miles an hour 152 00:08:07,960 --> 00:08:11,600 Speaker 2: on the high speed train. What do we most get wrong, 153 00:08:11,720 --> 00:08:17,200 Speaker 2: Nick Burns, about the inner China that you experienced, Well. 154 00:08:17,080 --> 00:08:19,640 Speaker 7: Good morning, Tom, and it's great pleasure to be with 155 00:08:19,680 --> 00:08:23,600 Speaker 7: you after a long, long stretch. You know, China is 156 00:08:23,840 --> 00:08:26,960 Speaker 7: a multifacet society. On the one hand, you have the 157 00:08:26,960 --> 00:08:30,680 Speaker 7: Communist Party of China, major competitor of the United States 158 00:08:30,680 --> 00:08:34,640 Speaker 7: and military, tech, economic, human rights ground. So I had 159 00:08:34,640 --> 00:08:37,560 Speaker 7: a you know, kind of a combative relationship at times 160 00:08:37,600 --> 00:08:40,280 Speaker 7: with that government, and we had to be aggressive in 161 00:08:40,360 --> 00:08:43,560 Speaker 7: holding the line. On the other hand, the other job 162 00:08:43,600 --> 00:08:45,720 Speaker 7: of being an ambassador is not just to the government 163 00:08:45,760 --> 00:08:48,120 Speaker 7: of China, to the to the one point four billion 164 00:08:48,160 --> 00:08:52,400 Speaker 7: people of China. And I found the Chinese people outside 165 00:08:52,440 --> 00:08:58,120 Speaker 7: the Communist Party to be extraordinarily entrepreneurial, to be very 166 00:08:58,240 --> 00:09:01,960 Speaker 7: very hard working, creative, innovative, and very civil when you 167 00:09:02,040 --> 00:09:06,439 Speaker 7: met them. My wife, Liby and I didn't encounter any 168 00:09:06,559 --> 00:09:09,720 Speaker 7: direct anti americanism when you're talking to the Chinese people. 169 00:09:09,720 --> 00:09:11,880 Speaker 7: I encountered a lot of it when I work with 170 00:09:11,920 --> 00:09:15,240 Speaker 7: the government of China, and so we decided that, you know, 171 00:09:15,240 --> 00:09:17,040 Speaker 7: we had to travel in China to get to know 172 00:09:17,280 --> 00:09:23,040 Speaker 7: party secretaries, governors, business leaders, universities, and we went most 173 00:09:23,080 --> 00:09:27,120 Speaker 7: often by high speed rail because they have a magnificent 174 00:09:27,160 --> 00:09:30,280 Speaker 7: trains and that's how you get to know people on 175 00:09:30,320 --> 00:09:33,480 Speaker 7: the train and see the countryside and get to understand 176 00:09:33,520 --> 00:09:34,000 Speaker 7: the country. 177 00:09:34,120 --> 00:09:37,239 Speaker 2: Do we have a knowledge behind those red doors in Beijing? 178 00:09:37,480 --> 00:09:40,280 Speaker 2: Is it like when we were with the Russians before 179 00:09:40,320 --> 00:09:44,360 Speaker 2: the collapse where our intelligence was lacking. Is there's a 180 00:09:44,400 --> 00:09:47,199 Speaker 2: mystery to ji in the government or do we actually 181 00:09:47,280 --> 00:09:50,400 Speaker 2: have a handle on what's going on? Well, I'd say 182 00:09:50,440 --> 00:09:50,959 Speaker 2: two things. 183 00:09:51,000 --> 00:09:53,640 Speaker 7: First, you know, we had daily contact with the government 184 00:09:53,720 --> 00:09:56,280 Speaker 7: of China, and you I spend a lot of time 185 00:09:56,320 --> 00:09:59,760 Speaker 7: with a Chinese leadership, with ministers, for instance, and so 186 00:09:59,840 --> 00:10:03,040 Speaker 7: you do get to know them. But the party, the 187 00:10:03,080 --> 00:10:07,000 Speaker 7: Communist Party, which is so powerful right now, is very 188 00:10:07,000 --> 00:10:11,679 Speaker 7: good at being opaque and Chinese politicians, political leaders do 189 00:10:11,720 --> 00:10:15,079 Speaker 7: not reveal the private side of them of their lives 190 00:10:14,920 --> 00:10:16,920 Speaker 7: as they do in the United States and most. 191 00:10:16,760 --> 00:10:17,640 Speaker 2: Of the rest of the world. 192 00:10:17,679 --> 00:10:22,400 Speaker 7: So there is a lack of transparency there and sometimes 193 00:10:22,440 --> 00:10:25,000 Speaker 7: it's a guessing game. But we did our best, obviously 194 00:10:25,080 --> 00:10:27,080 Speaker 7: and working with them to get a sense of what 195 00:10:27,160 --> 00:10:30,600 Speaker 7: their motivations were. You know, we were as I said before, 196 00:10:31,240 --> 00:10:33,959 Speaker 7: I figured about eighty percent of my job was competing 197 00:10:34,120 --> 00:10:36,319 Speaker 7: with China on behalf of the United States, and maybe 198 00:10:36,360 --> 00:10:41,280 Speaker 7: twenty percent was working on climate change and working on fentanyl, 199 00:10:41,360 --> 00:10:44,640 Speaker 7: which is a critical issue for US and on the 200 00:10:44,679 --> 00:10:48,719 Speaker 7: cooperative side. And so this is not an easy relationship 201 00:10:48,720 --> 00:10:49,720 Speaker 7: for the United States. 202 00:10:50,720 --> 00:10:55,640 Speaker 4: Nicholas, how do you think that the Chinese government wants 203 00:10:55,679 --> 00:10:58,040 Speaker 4: to proceed with the US? Do they want to engage 204 00:10:58,080 --> 00:11:01,240 Speaker 4: with the West or are they comfortable? And what's kind 205 00:11:01,240 --> 00:11:05,240 Speaker 4: of becoming I guess a new Cold war, certainly technological 206 00:11:05,400 --> 00:11:07,320 Speaker 4: Cold war between China and the West. How do they 207 00:11:07,320 --> 00:11:08,000 Speaker 4: want to approach it? 208 00:11:08,760 --> 00:11:12,120 Speaker 7: That's such a fascinating subject. On the one hand, given 209 00:11:12,120 --> 00:11:15,040 Speaker 7: the fact that China has the world's largest export economy 210 00:11:15,040 --> 00:11:18,400 Speaker 7: and manufacturing economy, they have to have ties with the 211 00:11:18,480 --> 00:11:21,720 Speaker 7: United States, Japan, Korea, and Europe because that's the market 212 00:11:22,120 --> 00:11:25,079 Speaker 7: for their economy and that keeps their GDP growth rate up, 213 00:11:25,480 --> 00:11:28,480 Speaker 7: So there is a sense a part of China inc. 214 00:11:28,880 --> 00:11:31,680 Speaker 7: Which wants to be integrated with the rest of the world. 215 00:11:31,440 --> 00:11:34,199 Speaker 7: But you're right. I mean what has emerged over the 216 00:11:34,280 --> 00:11:38,240 Speaker 7: last several years is a very close strategic partnership between 217 00:11:38,320 --> 00:11:41,640 Speaker 7: China and Russia and at times when they're on in 218 00:11:41,679 --> 00:11:45,559 Speaker 7: North Korea as well, and that's a formidable set of countries. 219 00:11:45,880 --> 00:11:48,320 Speaker 7: What they're trying to do, which Chijinping is trying to do, 220 00:11:48,480 --> 00:11:51,760 Speaker 7: is offset the real strength of the United States in 221 00:11:51,840 --> 00:11:55,200 Speaker 7: global competition, and that is that we have alliances in 222 00:11:55,240 --> 00:11:59,720 Speaker 7: the East Asia with Japan, South Korea, the Philippines, Thailand, 223 00:12:00,679 --> 00:12:04,120 Speaker 7: in Australia. These are treaty alliances and that gives us 224 00:12:04,200 --> 00:12:07,360 Speaker 7: a weight and leverage over the Chinese that they don't have, 225 00:12:07,400 --> 00:12:10,360 Speaker 7: and so they've tried to offset it with these other relationships. 226 00:12:10,840 --> 00:12:13,760 Speaker 7: But Russia and North Korea and Iran are not the 227 00:12:13,840 --> 00:12:18,360 Speaker 7: economic powers that Japan. Certainly is that India is as 228 00:12:18,400 --> 00:12:20,840 Speaker 7: a partner of the United States. So I think that's 229 00:12:20,880 --> 00:12:24,560 Speaker 7: our big advantage. Maybe that's the number one lesson that 230 00:12:24,640 --> 00:12:28,000 Speaker 7: I learned or relearned as ambassador to China. I'd also 231 00:12:28,080 --> 00:12:30,680 Speaker 7: been ambassador to NATO that we have to count on 232 00:12:30,720 --> 00:12:33,520 Speaker 7: our allies, and we have to be respectful of our 233 00:12:33,559 --> 00:12:37,120 Speaker 7: allies and build those relationships. That's the best way I 234 00:12:37,160 --> 00:12:38,600 Speaker 7: think to deter the Chinese. 235 00:12:38,880 --> 00:12:42,840 Speaker 4: Well, that does not perhaps is the view of the 236 00:12:42,880 --> 00:12:47,160 Speaker 4: Trump administration in terms of how the Trump administration is 237 00:12:47,200 --> 00:12:50,400 Speaker 4: treating US allies. Here does President she in the Chinese 238 00:12:50,440 --> 00:12:54,960 Speaker 4: government view that is potentially an opening to weaken the US, 239 00:12:55,160 --> 00:12:56,480 Speaker 4: I guess influence globally. 240 00:12:57,600 --> 00:13:01,360 Speaker 7: I think they do. You'll remember after April second, when 241 00:13:01,360 --> 00:13:04,720 Speaker 7: the President made his President Trump made his major tariff announcements, 242 00:13:04,720 --> 00:13:07,600 Speaker 7: the Chinese were very quick to say, to the Japanese 243 00:13:07,640 --> 00:13:10,640 Speaker 7: and South Koreans in particular, let's all get together the 244 00:13:10,679 --> 00:13:13,160 Speaker 7: three of US, China, South Korea, and Japan against the 245 00:13:13,240 --> 00:13:16,640 Speaker 7: United States. Of course, Japan and South Korea would not 246 00:13:16,760 --> 00:13:21,080 Speaker 7: have it, but they're seeking. The Chinese are seeking those openings. 247 00:13:21,120 --> 00:13:26,600 Speaker 7: And as the United States in a way diminishes our 248 00:13:26,679 --> 00:13:29,160 Speaker 7: faith in our alliances, the Chinese see that's a real 249 00:13:29,280 --> 00:13:34,079 Speaker 7: vulnerability for the United States. As we demolished USAID, the 250 00:13:34,200 --> 00:13:37,559 Speaker 7: US Agency for International Development, I think was a major 251 00:13:37,640 --> 00:13:41,120 Speaker 7: mistake to fire eight thousand people in two weeks. That 252 00:13:41,160 --> 00:13:44,280 Speaker 7: doesn't make much sense. The Chinese swooped in and began 253 00:13:44,360 --> 00:13:47,439 Speaker 7: to tell countries South, listen, if the United States is 254 00:13:47,520 --> 00:13:50,640 Speaker 7: not going to work with you or help you, we will. 255 00:13:50,880 --> 00:13:55,040 Speaker 7: And so we're in a battle for global influence against China, 256 00:13:55,040 --> 00:13:58,640 Speaker 7: there's no question, and we need a usaid, We need 257 00:13:58,679 --> 00:14:00,880 Speaker 7: our alliances to be compared in that battle. 258 00:14:00,960 --> 00:14:05,200 Speaker 2: We continue with Nicholas Burne's ambassador to China here up 259 00:14:05,280 --> 00:14:07,960 Speaker 2: until the recent months, with all of his work in 260 00:14:08,000 --> 00:14:11,839 Speaker 2: American diplomacy as well. We all await a book. I'm 261 00:14:11,840 --> 00:14:13,800 Speaker 2: sure it's coming out here in two or three years, 262 00:14:13,800 --> 00:14:16,280 Speaker 2: and we can find a free time to do it, 263 00:14:17,000 --> 00:14:19,520 Speaker 2: Nick Burns, just as simple as I can. As you 264 00:14:19,600 --> 00:14:25,480 Speaker 2: mentioned allies earlier, is Vietnam our ally? 265 00:14:25,640 --> 00:14:28,000 Speaker 7: I think Vietnam not in the strict sense of the word. 266 00:14:28,000 --> 00:14:29,800 Speaker 7: When I use the word ally as a diplomat, it's 267 00:14:29,800 --> 00:14:33,240 Speaker 7: a treaty ally, a military ally like the NATO countries 268 00:14:33,320 --> 00:14:36,480 Speaker 7: or Japan. Vietnam's a partner, and it's a country that 269 00:14:37,560 --> 00:14:40,120 Speaker 7: the years China has had to live next door to 270 00:14:40,240 --> 00:14:43,560 Speaker 7: China for all of its history, has a difficult, complicated 271 00:14:43,640 --> 00:14:47,160 Speaker 7: relationship with China. So Vietnam wants to be our military partner, 272 00:14:47,760 --> 00:14:49,960 Speaker 7: but at the same time, like all the other countries 273 00:14:49,960 --> 00:14:53,320 Speaker 7: of Southeast Asia, China's their lead trade partner. They have 274 00:14:53,400 --> 00:14:56,120 Speaker 7: to live with China, and so the Vietnamese are engaged 275 00:14:57,000 --> 00:15:00,480 Speaker 7: like the Malaysians and the Singaporeans and the end it's 276 00:15:00,800 --> 00:15:04,160 Speaker 7: kind of a balancing act between the United States and China. 277 00:15:04,360 --> 00:15:08,200 Speaker 2: So how will this play out in the you know, 278 00:15:08,320 --> 00:15:13,000 Speaker 2: you can call it non multilateral, pseudo bilateral, unilateral Trump 279 00:15:13,040 --> 00:15:16,880 Speaker 2: approach to McKinley trade history, I mean, I mean, I 280 00:15:17,200 --> 00:15:23,640 Speaker 2: don't understand how we battle the natural leakages of a 281 00:15:23,680 --> 00:15:27,840 Speaker 2: bilateral agreement. As trade goes to Vietnam, trade goes to Malaysia, 282 00:15:28,080 --> 00:15:31,520 Speaker 2: trade goes to Mexico for that matter, that's a given right. 283 00:15:32,920 --> 00:15:34,840 Speaker 7: Well, you know, I think there's a little bit of 284 00:15:34,880 --> 00:15:38,440 Speaker 7: a contradiction I would say in President Trump's policy. On 285 00:15:38,480 --> 00:15:42,160 Speaker 7: the one hand, President Trump is right to use tariffs 286 00:15:42,680 --> 00:15:46,000 Speaker 7: as a way to try to push the Chinese to 287 00:15:46,040 --> 00:15:48,880 Speaker 7: be more fair minded in the way they treat American 288 00:15:48,920 --> 00:15:52,880 Speaker 7: companies because they mistreat American companies. The Chinese and President 289 00:15:52,960 --> 00:15:56,000 Speaker 7: Biden put major tariffs on one hundred percent on Chinese 290 00:15:56,040 --> 00:15:59,400 Speaker 7: evs for instance, on China just a year ago. But 291 00:15:59,440 --> 00:16:02,560 Speaker 7: the problem is when President Trump went out and put 292 00:16:02,600 --> 00:16:04,920 Speaker 7: those one hundred and forty five percent tariffs on China. 293 00:16:05,000 --> 00:16:09,440 Speaker 7: He also put tariffs on Japan, South Korea, European Union, Canada, 294 00:16:09,440 --> 00:16:12,840 Speaker 7: and Mexico. Those are our natural allies. They all have 295 00:16:12,960 --> 00:16:15,560 Speaker 7: the same problems with China as we do on trade. 296 00:16:15,560 --> 00:16:17,680 Speaker 7: I think it would have been a better strategy to 297 00:16:17,680 --> 00:16:20,440 Speaker 7: we have really forced on China and had some and 298 00:16:21,000 --> 00:16:25,040 Speaker 7: coalesced with the Japanese, South Koreans and Europeans. It would 299 00:16:25,080 --> 00:16:28,240 Speaker 7: have given us more weight at the negotiating table with 300 00:16:28,280 --> 00:16:28,840 Speaker 7: the Jenese. 301 00:16:29,200 --> 00:16:31,520 Speaker 2: Nick Burns, I've got to ask you about my essay 302 00:16:31,520 --> 00:16:33,320 Speaker 2: of the year three years ago. You were off in 303 00:16:33,400 --> 00:16:36,640 Speaker 2: some train somewhere having a long weekend with the panda's 304 00:16:37,160 --> 00:16:40,080 Speaker 2: outside check do Kai. I'm not going to butcher the 305 00:16:40,120 --> 00:16:47,000 Speaker 2: pronunciation Nick Kaiji c Ai xia acclaim Chinese dissident wrote 306 00:16:47,040 --> 00:16:51,560 Speaker 2: for Foreign Affairs magazine and essay the weakness of Jijingping. 307 00:16:51,840 --> 00:16:55,680 Speaker 2: I was thunderstruck Nick Burns by that essay and the 308 00:16:55,920 --> 00:17:00,760 Speaker 2: idea of almost the thugism, the simplicity of the Chinese 309 00:17:00,800 --> 00:17:05,879 Speaker 2: government are they what's the process you witnessed as ambassador 310 00:17:06,680 --> 00:17:09,640 Speaker 2: of the parochialism of the Xi regime. 311 00:17:11,000 --> 00:17:14,119 Speaker 7: Well, I remember that essay as well, and I was 312 00:17:14,160 --> 00:17:18,320 Speaker 7: impressed by it. I would say this, Dung Chow Ping's 313 00:17:18,520 --> 00:17:21,879 Speaker 7: great insight after Miles's death half century ago was that 314 00:17:22,000 --> 00:17:25,560 Speaker 7: China could not afford one man rule. Mao nearly ruined 315 00:17:25,640 --> 00:17:30,840 Speaker 7: China with the Culture Revolution, and so Dung practice collective leadership. 316 00:17:30,880 --> 00:17:31,560 Speaker 2: That's all gone. 317 00:17:31,640 --> 00:17:34,360 Speaker 7: Now China's back to one man rule, and the one 318 00:17:34,400 --> 00:17:38,159 Speaker 7: man is Shixin Ping. And on the one hand, he's experienced, 319 00:17:38,200 --> 00:17:42,600 Speaker 7: he's obviously very smart, he's very ambitious, he's very strategicly 320 00:17:42,680 --> 00:17:45,960 Speaker 7: directed in terms of Chinese power. But on the other hand, 321 00:17:46,520 --> 00:17:49,600 Speaker 7: he surrounded himself with people who have worked for him 322 00:17:49,640 --> 00:17:51,960 Speaker 7: in the past. There are no peers around him. No 323 00:17:52,000 --> 00:17:55,360 Speaker 7: one's perfect, and so you see Shixin Ping making some 324 00:17:55,440 --> 00:17:58,960 Speaker 7: considerable mistakes. I'll just cite one. He went after the 325 00:17:59,040 --> 00:18:03,120 Speaker 7: Chinese tech intre in twenty twenty one twenty twenty three, 326 00:18:03,280 --> 00:18:06,720 Speaker 7: so that a lot of the tech entrepreneurs who made 327 00:18:06,800 --> 00:18:10,800 Speaker 7: China wealthy, like Jack ma of Alibama, were banished from 328 00:18:10,800 --> 00:18:13,800 Speaker 7: the country. Jack mad lives in Tokyo. So you see 329 00:18:13,840 --> 00:18:17,320 Speaker 7: the weaknesses and some of these strategic eras because you 330 00:18:17,400 --> 00:18:20,320 Speaker 7: don't have people around him to say you know, that 331 00:18:20,640 --> 00:18:23,240 Speaker 7: might not be the best thing to do to question him. 332 00:18:23,640 --> 00:18:26,000 Speaker 7: And I think, you know, as I've participated in our 333 00:18:26,040 --> 00:18:29,200 Speaker 7: own government, we're always better when you have people around 334 00:18:29,240 --> 00:18:31,640 Speaker 7: the American president who can say, you know, mister President, 335 00:18:32,359 --> 00:18:34,280 Speaker 7: I know you want to go down that road roade A, 336 00:18:34,480 --> 00:18:36,520 Speaker 7: but road B is going to be the easier place 337 00:18:37,160 --> 00:18:40,280 Speaker 7: root for you. That doesn't happen in China nowadays, and 338 00:18:40,760 --> 00:18:43,520 Speaker 7: you know, it's kind of a closed leadership. He does 339 00:18:43,600 --> 00:18:46,720 Speaker 7: travel a lot, but he's never lived overseas, he's never 340 00:18:46,760 --> 00:18:49,119 Speaker 7: been in business, so you see some of the limitations 341 00:18:49,119 --> 00:18:50,440 Speaker 7: in Chinese decision making. 342 00:18:51,000 --> 00:18:54,120 Speaker 4: So where does a Commnis party under Ji go from here? 343 00:18:54,200 --> 00:18:55,760 Speaker 4: I mean, he's been in office for as long as 344 00:18:55,880 --> 00:19:00,320 Speaker 4: many people can remember. What's the consensus about how the 345 00:19:00,440 --> 00:19:03,320 Speaker 4: leadership in China plays out? How much longer does he 346 00:19:03,359 --> 00:19:05,679 Speaker 4: stay in power? Does he enjoy the support of the people, 347 00:19:06,240 --> 00:19:06,879 Speaker 4: what's next? 348 00:19:07,960 --> 00:19:12,840 Speaker 7: Well, you know again, Dung Chaoping's practice was that general 349 00:19:12,880 --> 00:19:15,000 Speaker 7: Secretary is of the Commonist Party, the President of China 350 00:19:15,760 --> 00:19:18,240 Speaker 7: would stay in office for no more than two five 351 00:19:18,320 --> 00:19:21,320 Speaker 7: year terms, so ten years. And that was the case 352 00:19:21,359 --> 00:19:24,439 Speaker 7: for forty years, and Chichin Ping is now well beyond that. 353 00:19:25,200 --> 00:19:28,320 Speaker 7: My own impression is that he's probably president for life. 354 00:19:28,840 --> 00:19:31,320 Speaker 7: He's a Since I'm sixty nine, I can say he's 355 00:19:31,320 --> 00:19:35,000 Speaker 7: a relatively young man at seventy one. But still, you know, 356 00:19:35,119 --> 00:19:38,639 Speaker 7: when people get close to eighty, you know all bets 357 00:19:38,640 --> 00:19:41,400 Speaker 7: are off in terms of health, and so you got 358 00:19:41,400 --> 00:19:46,399 Speaker 7: to worry about well, you have to actually be concerned 359 00:19:46,520 --> 00:19:50,040 Speaker 7: about stability when your leader gets older. And there's no 360 00:19:50,760 --> 00:19:54,880 Speaker 7: root of secession, there's no transfer power prescribed in Chinese law. 361 00:19:55,440 --> 00:19:58,040 Speaker 7: They're going to have to make up happens when xin 362 00:19:58,080 --> 00:20:00,000 Speaker 7: Ping leaves power and how he leaves power. 363 00:20:00,160 --> 00:20:03,280 Speaker 2: Nicholas burns with us an extended conversation. We continue with 364 00:20:03,320 --> 00:20:05,639 Speaker 2: him for a little bit more. Heir Paul swinging in 365 00:20:05,640 --> 00:20:08,680 Speaker 2: time keen across the nation. Good morning, as we speak 366 00:20:08,720 --> 00:20:11,439 Speaker 2: to our former ambassador of China. How he did his 367 00:20:11,480 --> 00:20:14,720 Speaker 2: first diplomacy at the Duck Pond in Wellesley, Massachusetts a 368 00:20:14,720 --> 00:20:20,120 Speaker 2: few years ago. What was your first day like, newly minted, 369 00:20:20,600 --> 00:20:25,200 Speaker 2: four languages, fancy degrees and there you were You were 370 00:20:25,240 --> 00:20:29,160 Speaker 2: not wearing bermuda shorts and socks in Mauritania, were you? 371 00:20:29,440 --> 00:20:31,680 Speaker 2: What was your first day like in Mauritania? 372 00:20:32,760 --> 00:20:36,160 Speaker 7: Well, referring to my first job overseas for the US 373 00:20:36,240 --> 00:20:39,840 Speaker 7: government nineteen eighty forty five years ago in the Sahara Desert. 374 00:20:40,400 --> 00:20:43,600 Speaker 7: I was an intern, hoping to then take the oath 375 00:20:43,600 --> 00:20:46,320 Speaker 7: of office and become a full fledged diplomat. And so 376 00:20:46,359 --> 00:20:50,280 Speaker 7: they sent me to this tiny outpost, New Walkshot, Mauritania, 377 00:20:50,320 --> 00:20:52,359 Speaker 7: where we had a two person embassy, and I was 378 00:20:52,359 --> 00:20:56,000 Speaker 7: the second person, you know, doing all the different jobs. 379 00:20:56,520 --> 00:21:00,040 Speaker 7: And it was fascinating. I mean, I must say I 380 00:21:00,040 --> 00:21:02,680 Speaker 7: had wanted to go in the US government in college 381 00:21:02,720 --> 00:21:05,480 Speaker 7: and grad school. And when you finally get in and 382 00:21:05,520 --> 00:21:09,680 Speaker 7: you stand beside the American flag and you're there helping 383 00:21:09,720 --> 00:21:13,439 Speaker 7: to preside over July fourth celebrations, there's an immense pride 384 00:21:14,040 --> 00:21:17,080 Speaker 7: in serving our government. And I hope that you know, 385 00:21:17,160 --> 00:21:20,840 Speaker 7: with all the attack federal government by Elon Musk and others, 386 00:21:21,280 --> 00:21:24,920 Speaker 7: I hope people listening to us will know that the civils, 387 00:21:24,960 --> 00:21:27,840 Speaker 7: the foreign service officers, the military officers, we all take 388 00:21:27,840 --> 00:21:29,040 Speaker 7: an oath to the Constitution. 389 00:21:29,200 --> 00:21:31,760 Speaker 2: So what do you need? Nick Burns from Marco Rubio, 390 00:21:31,880 --> 00:21:34,600 Speaker 2: here's a guy. Everybody adores him. He's one of the 391 00:21:34,600 --> 00:21:38,240 Speaker 2: few people in Washington. It's not worth a gazillion dollars. 392 00:21:38,680 --> 00:21:42,280 Speaker 2: Marco Ruby of Florida, he's serving in the crucible of 393 00:21:42,320 --> 00:21:46,199 Speaker 2: the emotions of President Trump hour by hour. What is 394 00:21:46,200 --> 00:21:50,600 Speaker 2: your counsel to, Marco Rubio for those kids starting out 395 00:21:50,720 --> 00:21:54,960 Speaker 2: in the most coveted job in America. 396 00:21:53,760 --> 00:21:56,479 Speaker 7: That you can believe that young people who join and 397 00:21:56,560 --> 00:22:00,320 Speaker 7: middle aged people the federal government are non partisan, take 398 00:22:00,320 --> 00:22:02,960 Speaker 7: an oath to be nonpartisan. It's actually a law, the 399 00:22:03,000 --> 00:22:06,760 Speaker 7: Hatch Act of nineteen fifty two. And I served across 400 00:22:06,800 --> 00:22:11,160 Speaker 7: I served Republican presidents and Democratic presidents. I never asked 401 00:22:11,160 --> 00:22:13,520 Speaker 7: any of my colleagues, hey, what party do you belong to, 402 00:22:13,600 --> 00:22:16,520 Speaker 7: because it would have been really inappropriate to that. And 403 00:22:16,560 --> 00:22:20,560 Speaker 7: what bothers me about the mass firing of our civil 404 00:22:20,600 --> 00:22:24,639 Speaker 7: servants in Washington is that there's somehow this suspicion that 405 00:22:24,680 --> 00:22:28,359 Speaker 7: they're all Democrats and progressives, which is absolutely not the case. 406 00:22:28,359 --> 00:22:31,320 Speaker 7: People just want to serve the country. So I do think, 407 00:22:31,400 --> 00:22:37,239 Speaker 7: respectfully sectary Rubio and President Trump, they've really weakened the 408 00:22:37,280 --> 00:22:39,760 Speaker 7: ability of the United States to put good people in 409 00:22:39,840 --> 00:22:42,520 Speaker 7: the field on the military side, on the million side. 410 00:22:42,600 --> 00:22:45,000 Speaker 2: Paul, get one more question in here, but I forgot 411 00:22:45,040 --> 00:22:48,200 Speaker 2: to tell you Paul Burns's people said, we can't ask 412 00:22:48,240 --> 00:22:49,200 Speaker 2: about the red sox. 413 00:22:49,720 --> 00:22:52,160 Speaker 7: No, we don't. 414 00:22:52,000 --> 00:22:55,720 Speaker 4: Ask so Nick, just real quickly here, what's the view 415 00:22:55,760 --> 00:22:58,600 Speaker 4: of the people you talk to outside of the US government, 416 00:22:58,600 --> 00:23:01,040 Speaker 4: in foreign governments, what's their view of the US these days? 417 00:23:01,119 --> 00:23:04,800 Speaker 7: Well, I think, you know, there's a sense that the 418 00:23:04,920 --> 00:23:08,720 Speaker 7: United States is withdrawing from I would say, what made 419 00:23:08,760 --> 00:23:11,760 Speaker 7: us create our alliances. So people in NATO are really 420 00:23:11,800 --> 00:23:14,080 Speaker 7: worried that the United States is no longer going to be. 421 00:23:14,600 --> 00:23:15,480 Speaker 2: The leader of NATO. 422 00:23:15,720 --> 00:23:18,880 Speaker 7: The Ukrainians are worried that We're going to leave them 423 00:23:18,960 --> 00:23:22,000 Speaker 7: high and dry to face the Russian War a machine. 424 00:23:22,600 --> 00:23:26,440 Speaker 7: The Japanese and Filipinos are wondering will the United States 425 00:23:26,560 --> 00:23:30,399 Speaker 7: be there if China continues to press against their borders. 426 00:23:30,440 --> 00:23:32,840 Speaker 7: And so I think the United States has become kind 427 00:23:32,840 --> 00:23:37,520 Speaker 7: of a risk our government. It's the unpredictability of our government. 428 00:23:38,480 --> 00:23:41,480 Speaker 7: The seesaw back and forth in terms of what the 429 00:23:41,560 --> 00:23:46,000 Speaker 7: leader says, our leader says, and that worries me. I 430 00:23:46,160 --> 00:23:48,480 Speaker 7: you know, listen, I'm going to patriotic American. I want 431 00:23:48,480 --> 00:23:50,480 Speaker 7: President Trump to succeed in the world. I want his 432 00:23:50,560 --> 00:23:52,959 Speaker 7: government to succeed in the world. Who wouldn't if you're 433 00:23:53,000 --> 00:23:56,040 Speaker 7: an American citizen, but I think there's a disquiet and 434 00:23:56,160 --> 00:23:59,640 Speaker 7: uncertainty about sometimes the direction that our government is heading, 435 00:23:59,640 --> 00:24:01,400 Speaker 7: in part the other terrorf issue. 436 00:24:01,640 --> 00:24:04,359 Speaker 2: Nick Burns, thank you so much generous time with us 437 00:24:04,359 --> 00:24:07,800 Speaker 2: this morning. Investor Burns, of course to China and the 438 00:24:07,920 --> 00:24:15,360 Speaker 2: Mauritania a few years ago. 439 00:24:16,119 --> 00:24:19,720 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 440 00:24:19,800 --> 00:24:21,920 Speaker 1: weekday afternoons from seven to ten am. 441 00:24:21,920 --> 00:24:25,119 Speaker 6: He's durn Listen on Applecarplay and Android Otto with the 442 00:24:25,160 --> 00:24:28,360 Speaker 6: Bloomberg Business app, or watch us live on YouTube. 443 00:24:28,720 --> 00:24:31,240 Speaker 2: Paul and I both agreed we desperately need to talk 444 00:24:31,280 --> 00:24:35,359 Speaker 2: to Jane Foley. She's at Rabobank. Absolutely definitive and cross 445 00:24:35,400 --> 00:24:39,439 Speaker 2: currents of the foreign exchange market. Jane is a weaker 446 00:24:39,720 --> 00:24:41,880 Speaker 2: dollar vector in place. 447 00:24:42,080 --> 00:24:44,199 Speaker 5: Well it would appear to be so. I mean, you know, 448 00:24:44,359 --> 00:24:46,359 Speaker 5: it is going to be difficult for the Fed because 449 00:24:46,359 --> 00:24:48,840 Speaker 5: the weekid dollar is a course inflationary. But what we 450 00:24:48,920 --> 00:24:52,240 Speaker 5: appear still to have is an awful lot of investors 451 00:24:52,280 --> 00:24:55,639 Speaker 5: really really evaluating those dollar trades, those po pro dollar 452 00:24:55,680 --> 00:24:58,919 Speaker 5: trades really of the last few years when everyone was 453 00:24:59,280 --> 00:25:02,080 Speaker 5: very much of the with buy America. Right now, it 454 00:25:02,240 --> 00:25:05,000 Speaker 5: seems that the theme for this year and it's still ongoing, 455 00:25:05,160 --> 00:25:08,720 Speaker 5: is that people are reevaluating options elsewhere, whether or not 456 00:25:08,760 --> 00:25:11,399 Speaker 5: that be defense in Europe or you know, Japan, and 457 00:25:11,400 --> 00:25:14,440 Speaker 5: with the Japanese JGB market perhaps a little bit topsy 458 00:25:14,520 --> 00:25:17,200 Speaker 5: turvy at the moment, but certainly Japanese assets have been 459 00:25:17,400 --> 00:25:20,600 Speaker 5: you know, on the radar again of investors this year. 460 00:25:20,640 --> 00:25:23,480 Speaker 5: And I think the weaker dollar is just a mimicking 461 00:25:23,720 --> 00:25:26,840 Speaker 5: of this commentary that we've been hearing, you know, quite 462 00:25:26,880 --> 00:25:30,520 Speaker 5: a lot that you know, buy America. The story of 463 00:25:30,560 --> 00:25:33,879 Speaker 5: the past few years has been really reevaluated. 464 00:25:33,960 --> 00:25:35,800 Speaker 2: Okay, Jimi and s sorry, taught me how to do this. 465 00:25:35,880 --> 00:25:39,000 Speaker 2: I brought up Taiwan dollar, a boy, Korean Wan and 466 00:25:39,119 --> 00:25:43,760 Speaker 2: sing dollar. I'm sorry, Jane. Those charts are elegant strong, 467 00:25:43,880 --> 00:25:50,200 Speaker 2: Singapore strong, Taiwan strong. Career. What are the ramifications if 468 00:25:50,240 --> 00:25:56,120 Speaker 2: they break break through to new currency strength versus the dollar. 469 00:25:57,160 --> 00:25:59,800 Speaker 5: Well, they don't necessarily want that, you know, this is 470 00:25:59,800 --> 00:26:03,040 Speaker 5: that be of significant mover and executic pressure, you know, 471 00:26:03,080 --> 00:26:05,680 Speaker 5: on their economies if that were the case. But certainly 472 00:26:06,320 --> 00:26:08,280 Speaker 5: that's been an idea which has been very much caught 473 00:26:08,359 --> 00:26:11,840 Speaker 5: up in you know, speculator's minds over the last few weeks. 474 00:26:11,880 --> 00:26:15,280 Speaker 5: Clearly we do need to see some of the progress 475 00:26:15,320 --> 00:26:18,440 Speaker 5: made on trade deals between the US and a variety 476 00:26:18,480 --> 00:26:22,080 Speaker 5: of other countries for this type of speculation, you know, 477 00:26:22,160 --> 00:26:24,639 Speaker 5: to be put to better at least to have, you know, 478 00:26:24,880 --> 00:26:27,439 Speaker 5: a little bit better of an anchor. So that's what 479 00:26:27,480 --> 00:26:30,159 Speaker 5: we need to see. There's been a lot of speculation 480 00:26:30,320 --> 00:26:33,640 Speaker 5: as to whether or not currencies are would form part 481 00:26:33,960 --> 00:26:36,920 Speaker 5: of these trade deals, whether or not the weeker dollar 482 00:26:37,480 --> 00:26:41,000 Speaker 5: that Trump has been talking about in previous years is 483 00:26:41,040 --> 00:26:43,679 Speaker 5: going to be part of that, And that's what the 484 00:26:43,720 --> 00:26:47,560 Speaker 5: market is is sort of a little bit frightened about. 485 00:26:48,160 --> 00:26:50,840 Speaker 5: But certainly, you know, I would have thought that if 486 00:26:50,880 --> 00:26:53,680 Speaker 5: Trump wanted a week a dollar to make American experts cheaper, 487 00:26:53,680 --> 00:26:55,720 Speaker 5: which has been part of his manager you know, for 488 00:26:55,840 --> 00:26:59,560 Speaker 5: a long time, he would want that under his control. 489 00:26:59,640 --> 00:27:02,600 Speaker 5: And and I think what we've seen recently this year 490 00:27:02,720 --> 00:27:06,040 Speaker 5: is not a dollar weakening because you know, Trump wants 491 00:27:06,040 --> 00:27:08,959 Speaker 5: it to weaken. It's been a dollar weekening because market 492 00:27:08,960 --> 00:27:12,600 Speaker 5: investors have been reevaluating the value that they're now seeing 493 00:27:12,960 --> 00:27:16,440 Speaker 5: in US assets as opposed to assets elsewhere. And that's 494 00:27:16,480 --> 00:27:17,840 Speaker 5: not necessarily what the treasure you want. 495 00:27:17,960 --> 00:27:19,879 Speaker 2: Well, I'm not going to sing dollar. This from the 496 00:27:19,880 --> 00:27:22,760 Speaker 2: second week of April, it's been a five percent strengthening 497 00:27:23,200 --> 00:27:26,480 Speaker 2: of Singapore dollar. It's a wicked elegant chart. I went 498 00:27:26,520 --> 00:27:29,200 Speaker 2: to logs for Jane Foley. You know, that's the way 499 00:27:29,240 --> 00:27:32,960 Speaker 2: we roll, and it's our two standard deviations strength here 500 00:27:33,320 --> 00:27:36,840 Speaker 2: the trend is in place. Weaker US dollar. 501 00:27:36,600 --> 00:27:38,960 Speaker 4: Week or US dollar see that in a Bloomberg Dollar 502 00:27:39,040 --> 00:27:42,639 Speaker 4: index are still plumbing some lows here, Jane. A lot 503 00:27:42,680 --> 00:27:45,160 Speaker 4: of Americans are getting ready to come over to Europe 504 00:27:45,200 --> 00:27:48,040 Speaker 4: for summer holiday. Here, they're not like in the euro 505 00:27:48,119 --> 00:27:51,080 Speaker 4: here at one thirteen. How high can a euro go here? 506 00:27:52,400 --> 00:27:54,760 Speaker 5: Well, you know that of course is a big question. 507 00:27:54,880 --> 00:27:57,080 Speaker 5: If we go back a month or so. There were 508 00:27:57,480 --> 00:27:59,480 Speaker 5: some views out there thinking, oh, you know, your a 509 00:27:59,520 --> 00:28:02,040 Speaker 5: dollar is a course you know for one twenty this year. 510 00:28:02,040 --> 00:28:05,280 Speaker 5: I still think that one twenty is a fair way off. 511 00:28:05,320 --> 00:28:08,000 Speaker 5: I mean, we've got to consider this from the ECB's 512 00:28:08,000 --> 00:28:11,120 Speaker 5: perspective too, or from the Eurozone perspective. I mean, think 513 00:28:11,119 --> 00:28:13,920 Speaker 5: about Germany. Yes, there was that loosening of the debt 514 00:28:13,960 --> 00:28:15,879 Speaker 5: breaker a couple of months ago. Yes, you know that 515 00:28:15,960 --> 00:28:21,120 Speaker 5: really has reinvigorated investor interest and you know, defense, infrastructure etc. 516 00:28:21,440 --> 00:28:24,639 Speaker 5: In the outlook for German growth in the coming years. 517 00:28:24,640 --> 00:28:27,440 Speaker 5: But you know, the bundesbankers warn that Germany you could 518 00:28:27,480 --> 00:28:31,479 Speaker 5: still see recession this year. Most big forecasters think that 519 00:28:31,480 --> 00:28:35,000 Speaker 5: that boost to German growth won't start until next year. 520 00:28:35,040 --> 00:28:38,040 Speaker 5: And we've still got the headwinds possibly of trade wars 521 00:28:38,080 --> 00:28:42,360 Speaker 5: coming through as well. So if Germany sees recession this year, 522 00:28:42,400 --> 00:28:44,440 Speaker 5: well you know these heb definitely you don't want to 523 00:28:44,440 --> 00:28:47,680 Speaker 5: see a Euro strengthening significantly. And I think if we 524 00:28:47,760 --> 00:28:51,040 Speaker 5: did see the Euro, you know, ratcheting up at a 525 00:28:51,080 --> 00:28:53,640 Speaker 5: pace from these sorts of levels, we could see a 526 00:28:53,640 --> 00:28:57,560 Speaker 5: more duvish ECB to try and counter some of that move. 527 00:28:57,640 --> 00:28:59,840 Speaker 5: So yes, we might see one twenty. I don't think 528 00:29:00,080 --> 00:29:01,760 Speaker 5: going to see it this year. Would we see it 529 00:29:02,080 --> 00:29:04,560 Speaker 5: by the end of next year, well, certainly, colk, But 530 00:29:04,600 --> 00:29:07,040 Speaker 5: that would, of course, we depend on how that growth 531 00:29:07,080 --> 00:29:10,400 Speaker 5: engine starts to work in Germany and the rest of 532 00:29:10,440 --> 00:29:10,960 Speaker 5: Europe too. 533 00:29:11,440 --> 00:29:14,360 Speaker 4: Boy, I got a lot of pounds sterling coins and 534 00:29:14,440 --> 00:29:17,840 Speaker 4: script scrolling all away. You know, all all my jewors 535 00:29:17,840 --> 00:29:21,200 Speaker 4: here too. It's up Tom, like eleven point four percent. 536 00:29:21,640 --> 00:29:26,200 Speaker 2: Is this is the folks, This is why you watch surveillance. 537 00:29:26,280 --> 00:29:30,000 Speaker 2: Michael bar Lisa Matteo Paul. While you were yapping with Jane, 538 00:29:30,160 --> 00:29:33,400 Speaker 2: I did what Jane does every day. I looked at 539 00:29:33,440 --> 00:29:36,240 Speaker 2: an air mess tie. I go over to Paris. Yep, 540 00:29:36,560 --> 00:29:39,960 Speaker 2: take United fifty seven, go over to Paris. And that 541 00:29:40,120 --> 00:29:43,160 Speaker 2: bow tie right now is two hundred and forty euros. 542 00:29:43,560 --> 00:29:47,160 Speaker 2: If it's one point fifteen, if it's one point one 543 00:29:47,160 --> 00:29:50,760 Speaker 2: point five, it's two hundred and seventy six dollars. And 544 00:29:50,800 --> 00:29:53,400 Speaker 2: if it goes to one point two zero, Jane Foley 545 00:29:53,440 --> 00:29:56,040 Speaker 2: knows it goes to two hundred and eighty eight dollars. 546 00:29:56,040 --> 00:29:58,680 Speaker 2: That's real. I mean that is real money. That is 547 00:29:58,840 --> 00:30:02,680 Speaker 2: twelve dollars increase because of Macron. There's no other way 548 00:30:02,720 --> 00:30:04,200 Speaker 2: to put it. And get one more in here to 549 00:30:04,280 --> 00:30:07,040 Speaker 2: Jane Fowley while I prep the tire, I'm not going 550 00:30:07,120 --> 00:30:07,400 Speaker 2: to buy. 551 00:30:07,520 --> 00:30:09,760 Speaker 4: Yeah, I do not think so. So talk to us 552 00:30:09,760 --> 00:30:12,800 Speaker 4: about the pound sterling, Jane, what's the story there? 553 00:30:14,080 --> 00:30:16,920 Speaker 5: Well, of course, we did see that stronger than expected 554 00:30:17,120 --> 00:30:20,320 Speaker 5: CPI inflation data last week two, and we saw retail 555 00:30:20,360 --> 00:30:23,520 Speaker 5: sales managing to a bit a bit be hit my 556 00:30:23,680 --> 00:30:26,760 Speaker 5: robust too than the market had expected. And of course, 557 00:30:26,800 --> 00:30:28,720 Speaker 5: if we go back a couple of weeks before that 558 00:30:28,760 --> 00:30:31,920 Speaker 5: we had the GDP data for the first quarter coming 559 00:30:32,000 --> 00:30:34,880 Speaker 5: in a little bit more robust, and of course there's 560 00:30:34,920 --> 00:30:37,560 Speaker 5: been the news that the UK did manage to sign 561 00:30:37,600 --> 00:30:39,480 Speaker 5: a trade deal with the US and also in the 562 00:30:39,520 --> 00:30:42,840 Speaker 5: same week with one in India as well, So there 563 00:30:42,840 --> 00:30:45,840 Speaker 5: has been a fair amount of better than expected news 564 00:30:45,840 --> 00:30:48,240 Speaker 5: for the UK. I think that has given Sterling a 565 00:30:48,240 --> 00:30:49,800 Speaker 5: little bit of a fillip and we see that and 566 00:30:49,880 --> 00:30:53,600 Speaker 5: setting in in cable, you know, above the recent range, 567 00:30:53,760 --> 00:30:57,680 Speaker 5: and so Sterling's had some decent news. Now that's not 568 00:30:57,720 --> 00:31:01,160 Speaker 5: to say that we are not going to have those headwinds. 569 00:31:01,240 --> 00:31:02,959 Speaker 5: We know that growth this year and it's still going 570 00:31:03,000 --> 00:31:06,280 Speaker 5: to be difficult in June. We've got the Chancellor again. 571 00:31:06,400 --> 00:31:09,240 Speaker 5: She has to do a spending review in June. 572 00:31:09,280 --> 00:31:09,880 Speaker 8: That's going to be. 573 00:31:09,840 --> 00:31:13,479 Speaker 5: Tough because UK dad is so high. So it's not 574 00:31:13,520 --> 00:31:17,400 Speaker 5: all plain sailing, but Sterling certainly has seen some benefit recently. 575 00:31:17,680 --> 00:31:21,560 Speaker 2: Have you recovered from Tottenham winning the Europa Jane? I 576 00:31:21,560 --> 00:31:22,680 Speaker 2: mean it was too much. 577 00:31:23,920 --> 00:31:26,440 Speaker 5: Well we had the Crystal Palace winning a big match. 578 00:31:26,480 --> 00:31:29,560 Speaker 5: Did you see that it's my local team. Well that's 579 00:31:29,600 --> 00:31:31,600 Speaker 5: just a road from me, so that was pretty good. 580 00:31:31,680 --> 00:31:35,400 Speaker 2: Have you watched ted Lasso or they filmed the TV 581 00:31:35,480 --> 00:31:36,920 Speaker 2: show at Crystal Palace. 582 00:31:38,040 --> 00:31:40,400 Speaker 5: I didn't see that though, so much to watch for me. 583 00:31:40,480 --> 00:31:42,479 Speaker 2: You have to watch ted Lasso. You'll love it. They 584 00:31:42,560 --> 00:31:46,560 Speaker 2: filmed in Crystal Palace. They're you know, I mean Crystal 585 00:31:46,560 --> 00:31:49,760 Speaker 2: Palace one on What's Next? World's going to a mess? 586 00:31:49,840 --> 00:31:52,760 Speaker 2: Jane Fowley, thank you so much, greatly appreciate. 587 00:31:53,240 --> 00:31:57,120 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 588 00:31:57,160 --> 00:31:59,000 Speaker 1: starting at seven am Eastern. 589 00:31:58,720 --> 00:32:02,120 Speaker 6: On Apple Corplay and with the Bloomberg Business App. 590 00:32:02,200 --> 00:32:05,240 Speaker 1: You can also listen live on Amazon Alexa from our 591 00:32:05,280 --> 00:32:09,800 Speaker 1: flagship New York station, Just say Alexa play Bloomberg eleven thirty. 592 00:32:10,400 --> 00:32:12,480 Speaker 2: Huge response from the Hendry out of Trace is on 593 00:32:12,920 --> 00:32:14,920 Speaker 2: let's bring it in with Veda partners here on the 594 00:32:14,960 --> 00:32:17,840 Speaker 2: madness in Washington between the left, the right, the center, 595 00:32:17,880 --> 00:32:22,160 Speaker 2: and four other flavors. So well, Henrietta, quickly here. You 596 00:32:22,200 --> 00:32:24,520 Speaker 2: were on a number of times ago and you said 597 00:32:24,560 --> 00:32:27,960 Speaker 2: sixty three congressional seats are in play. Do you stand 598 00:32:28,000 --> 00:32:29,600 Speaker 2: by that or is it a different number? 599 00:32:30,960 --> 00:32:34,160 Speaker 8: If I'm not mistaken, it's actually sixty nine. That's based 600 00:32:34,160 --> 00:32:38,000 Speaker 8: off of the Florida First and Florida. 601 00:32:37,760 --> 00:32:41,760 Speaker 9: Six special elections that happened two months ago or so, 602 00:32:42,600 --> 00:32:46,720 Speaker 9: and it puts at risk basically any district that's our 603 00:32:46,880 --> 00:32:51,160 Speaker 9: plus five orient Jeffrey's view R plus ten or more. 604 00:32:51,800 --> 00:32:53,840 Speaker 2: Very cool. Let's move on just as the new slow 605 00:32:53,880 --> 00:32:58,120 Speaker 2: is extraordinary. I think America, including Tom Keane, is ignorant 606 00:32:58,520 --> 00:33:01,760 Speaker 2: about the nuances of the GOP Senate. We love to 607 00:33:01,840 --> 00:33:06,280 Speaker 2: parse the House. We know that story. How divided is 608 00:33:06,320 --> 00:33:11,400 Speaker 2: the Senate for the senator from the Dakotas, This is. 609 00:33:11,360 --> 00:33:12,320 Speaker 8: An interesting question. 610 00:33:12,480 --> 00:33:15,200 Speaker 9: Kevin Kramer, who I assume we're talking about, or he 611 00:33:15,240 --> 00:33:18,680 Speaker 9: could be speaking about later. Thune is different in that 612 00:33:19,160 --> 00:33:22,440 Speaker 9: there are members who are actively benefiting from things like 613 00:33:22,480 --> 00:33:25,640 Speaker 9: the Inflation Reduction Act, from the clean energy subsidies that 614 00:33:25,720 --> 00:33:29,120 Speaker 9: came from a purely Democrat only past bill, who are 615 00:33:29,200 --> 00:33:32,360 Speaker 9: extraordinarily opposed to the president's tariffs but are unwilling to 616 00:33:32,480 --> 00:33:33,160 Speaker 9: rain him in. 617 00:33:33,440 --> 00:33:35,840 Speaker 8: And the Senators from the Dakota's represent that faction. 618 00:33:36,440 --> 00:33:39,240 Speaker 9: So they are out there, you know, going to Canada 619 00:33:39,600 --> 00:33:44,320 Speaker 9: trying to pass legislation to almost provide something that the 620 00:33:44,320 --> 00:33:46,720 Speaker 9: Republican Party can talk about that is not related to 621 00:33:46,760 --> 00:33:49,440 Speaker 9: the tariffs and not related to the President's maybe more 622 00:33:49,440 --> 00:33:52,400 Speaker 9: social items on his agenda, and that's really what they're 623 00:33:52,480 --> 00:33:54,800 Speaker 9: representing right now. When you say Dakota's that's who I 624 00:33:54,800 --> 00:33:55,040 Speaker 9: think of. 625 00:33:55,600 --> 00:33:58,480 Speaker 4: How about just in tariffs in general, Henriette, we have again, 626 00:33:58,600 --> 00:34:01,040 Speaker 4: once again, we're seeing this playbook play out time and 627 00:34:01,080 --> 00:34:05,200 Speaker 4: time again, announced big tariffs, big headlines, and never more 628 00:34:05,440 --> 00:34:09,279 Speaker 4: them back as it relates to Europeers, what's the how 629 00:34:09,320 --> 00:34:10,840 Speaker 4: do you think this whole tariff thing is going to 630 00:34:10,840 --> 00:34:13,800 Speaker 4: play out? Because it has been the number one item 631 00:34:13,880 --> 00:34:15,840 Speaker 4: on the President's agenda since. 632 00:34:15,680 --> 00:34:18,560 Speaker 8: They won, since the nineteen eighties. 633 00:34:19,040 --> 00:34:22,280 Speaker 9: My view is that Liberation two point zero is coming. 634 00:34:22,400 --> 00:34:26,160 Speaker 9: Liberation Day two point zero is fast approaching, and it 635 00:34:26,200 --> 00:34:27,799 Speaker 9: doesn't have to just be July ninth. 636 00:34:28,040 --> 00:34:30,120 Speaker 8: Think about what is coming down the pipe. 637 00:34:30,280 --> 00:34:34,560 Speaker 9: Number one, we have sectoral tariffs across pharmaceuticals and semiconductors. 638 00:34:34,760 --> 00:34:37,160 Speaker 8: The comment period is over. Those tariffs could hit at 639 00:34:37,200 --> 00:34:37,760 Speaker 8: any moment. 640 00:34:38,000 --> 00:34:42,440 Speaker 9: The pharmaceutical sector and the European Union are heavily concerned 641 00:34:42,520 --> 00:34:44,680 Speaker 9: about those tariffs hitting in the next two to three weeks, 642 00:34:44,680 --> 00:34:45,920 Speaker 9: if not before. 643 00:34:45,800 --> 00:34:46,640 Speaker 8: Those would come in. 644 00:34:46,840 --> 00:34:49,879 Speaker 9: If history is president at twenty five percent rates, that's 645 00:34:49,880 --> 00:34:51,480 Speaker 9: what the president has tariffed. 646 00:34:51,280 --> 00:34:54,399 Speaker 8: Aluminum, steel automobiles and everything else on with the national 647 00:34:54,480 --> 00:34:55,240 Speaker 8: security tariffs. 648 00:34:55,239 --> 00:34:58,000 Speaker 9: So those are pending, and there are a litany of 649 00:34:58,000 --> 00:34:59,800 Speaker 9: those that will come for the remainder of the summer 650 00:35:00,120 --> 00:35:03,920 Speaker 9: to the rest of this year across lumber, copper, trucking, 651 00:35:04,120 --> 00:35:08,680 Speaker 9: air jets, cargo, et cetera. Then we have July ninth, 652 00:35:09,200 --> 00:35:13,000 Speaker 9: and what's happening already is that even nations that we 653 00:35:13,040 --> 00:35:15,960 Speaker 9: are close to or should have trade deals with, as 654 00:35:16,600 --> 00:35:21,320 Speaker 9: suggested by Secretaries Bessett and Lutnik, are nowhere near completion. Indeed, 655 00:35:21,360 --> 00:35:24,880 Speaker 9: South Korea, the one that I anticipated or I understood 656 00:35:24,960 --> 00:35:27,640 Speaker 9: Lutnik and Bessett. We're talking about weeks ago when they 657 00:35:27,680 --> 00:35:29,920 Speaker 9: started saying trade deals could be announced, you know, just 658 00:35:29,960 --> 00:35:33,160 Speaker 9: a week after Liberation Day, are nowhere near completed. They 659 00:35:33,200 --> 00:35:35,680 Speaker 9: have an election on June third, and they're saying they 660 00:35:35,719 --> 00:35:38,400 Speaker 9: need a delay beyond July ninth. The same is true 661 00:35:38,440 --> 00:35:40,839 Speaker 9: for Japan, who doesn't even have a date for their 662 00:35:40,880 --> 00:35:43,640 Speaker 9: election yet. So when I think about what's coming down 663 00:35:43,640 --> 00:35:47,040 Speaker 9: the pike for investors, it's more tires, both sectoral and 664 00:35:47,239 --> 00:35:50,520 Speaker 9: a hike specifically with the EU above their current ten 665 00:35:50,560 --> 00:35:52,759 Speaker 9: percent rate, I think the President's itching to get to 666 00:35:52,800 --> 00:35:55,960 Speaker 9: twenty at least, if not higher, as evidenced by his 667 00:35:56,560 --> 00:35:58,440 Speaker 9: forty eight hours of considering fifty percent. 668 00:35:59,280 --> 00:36:01,160 Speaker 4: How does all this CAFF talk, How is it playing 669 00:36:01,200 --> 00:36:04,879 Speaker 4: out politically? Is there any feedback, any polling that people care? 670 00:36:05,160 --> 00:36:07,480 Speaker 4: Are they concerned that the fundation is going to hit? 671 00:36:07,600 --> 00:36:10,520 Speaker 2: Let me stop and say, this is the question of 672 00:36:10,560 --> 00:36:12,520 Speaker 2: the more than's the key questions. 673 00:36:13,600 --> 00:36:14,680 Speaker 8: I'm so glad you ask. 674 00:36:14,800 --> 00:36:18,280 Speaker 9: You know, we cover all kinds of macroeconomic policy items, 675 00:36:18,320 --> 00:36:20,720 Speaker 9: and we can talk about wonky stuff like current policy 676 00:36:20,719 --> 00:36:25,719 Speaker 9: baseline or carried interest, tax rates. The American public understands tariffs. 677 00:36:25,960 --> 00:36:28,319 Speaker 9: What's shocking to me is to go and you know, 678 00:36:28,440 --> 00:36:30,720 Speaker 9: go to my local grocery store. See the front page 679 00:36:30,760 --> 00:36:34,160 Speaker 9: news and the side advert is for buy your appliances 680 00:36:34,200 --> 00:36:37,400 Speaker 9: now before the tarifs hit, buy them now before President 681 00:36:37,400 --> 00:36:39,360 Speaker 9: Trump implements Liberation Day tarifs. 682 00:36:39,360 --> 00:36:42,160 Speaker 8: I mean those are front page news items in states 683 00:36:42,200 --> 00:36:45,560 Speaker 8: like Louisiana. The American public knows what taris are. 684 00:36:45,920 --> 00:36:48,480 Speaker 9: They know for sure that they are now tax cut, 685 00:36:48,640 --> 00:36:49,680 Speaker 9: and they know that they're coming. 686 00:36:49,840 --> 00:36:52,640 Speaker 2: The history of this with McKinley taking it back to 687 00:36:52,719 --> 00:36:56,160 Speaker 2: someone that the president worships, Henry, it to Troy's McKinley 688 00:36:56,800 --> 00:37:02,200 Speaker 2: quarters or years after his heavy tariffs repealed them. Do 689 00:37:02,280 --> 00:37:05,040 Speaker 2: we even get to heavy tariffs or do you just 690 00:37:05,120 --> 00:37:11,880 Speaker 2: assume Hill verbally retrench retreat at some point like too. 691 00:37:12,840 --> 00:37:14,680 Speaker 8: I feel really startling that we need to stop. 692 00:37:15,320 --> 00:37:16,799 Speaker 9: I know I just did it, but like we need 693 00:37:16,840 --> 00:37:18,640 Speaker 9: to concentrate on the fact that these tariffs are on. 694 00:37:19,200 --> 00:37:21,600 Speaker 9: Y'all have some great reporting and charts in the Bloomberg 695 00:37:21,760 --> 00:37:24,520 Speaker 9: terminal today about exactly how much money is coming into 696 00:37:24,520 --> 00:37:27,880 Speaker 9: customs and border patrol just now for this month. It 697 00:37:27,960 --> 00:37:30,640 Speaker 9: is just starting to hit. Those prices will be passed 698 00:37:30,680 --> 00:37:33,440 Speaker 9: on to consumers, whether that's at Costco or Walmart. And 699 00:37:33,480 --> 00:37:36,960 Speaker 9: as I mentioned, the American public, Republicans, Democrats, and independents 700 00:37:36,960 --> 00:37:39,600 Speaker 9: have a very negative view of these tariffs. They don't 701 00:37:39,680 --> 00:37:42,239 Speaker 9: like when you know, Peter Tomorrow comes out and says 702 00:37:42,239 --> 00:37:43,120 Speaker 9: these are tax cuts. 703 00:37:43,360 --> 00:37:45,799 Speaker 8: We know that they're not. We know that inflation is real, 704 00:37:45,840 --> 00:37:47,680 Speaker 8: and now it's because of the tariffs. 705 00:37:48,160 --> 00:37:50,000 Speaker 2: I got to do this morning. Henry Ritta, thank you 706 00:37:50,400 --> 00:37:52,480 Speaker 2: so much. I just can't say enough about it. We're 707 00:37:52,520 --> 00:37:54,799 Speaker 2: Kenny of the Trey's there and the key item there 708 00:37:54,800 --> 00:37:57,040 Speaker 2: at the beginning, she's taken out from sixty three to 709 00:37:57,120 --> 00:37:59,600 Speaker 2: sixty nine seats in play as we go to the 710 00:37:59,640 --> 00:38:02,320 Speaker 2: mid terms of two thousand twenty six. 711 00:38:08,920 --> 00:38:12,840 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 712 00:38:12,880 --> 00:38:15,480 Speaker 1: starting at seven am Eastern on applecar. 713 00:38:15,160 --> 00:38:17,840 Speaker 6: Play and Android Auto with the Bloomberg Business app. 714 00:38:17,920 --> 00:38:20,880 Speaker 1: You can also watch us live every weekday on YouTube 715 00:38:20,920 --> 00:38:23,040 Speaker 1: and always on the Bloomberg terminal. 716 00:38:23,320 --> 00:38:26,040 Speaker 2: He's the newspapers with Lisa Motev. She and I are 717 00:38:26,040 --> 00:38:30,280 Speaker 2: doing battling prime stories. Her stories are uglier than mine. 718 00:38:30,280 --> 00:38:32,560 Speaker 10: It's a stressful time, let me tell you, especially for 719 00:38:32,600 --> 00:38:35,880 Speaker 10: the girls. Okay, so we have this trend right wealthy 720 00:38:35,880 --> 00:38:39,400 Speaker 10: people buying sports teams. Well, that could be taking a 721 00:38:39,400 --> 00:38:41,439 Speaker 10: little bit of a time out because the house builder 722 00:38:41,480 --> 00:38:44,600 Speaker 10: we've talked about is targeting tax breaks for team owners. 723 00:38:45,080 --> 00:38:47,719 Speaker 10: So what it does It includes the tech to the 724 00:38:47,760 --> 00:38:49,719 Speaker 10: tax fot. It could cut in half the tax write 725 00:38:49,760 --> 00:38:52,560 Speaker 10: off that is potentially worth hundreds of millions of dollars 726 00:38:52,640 --> 00:38:55,400 Speaker 10: to some team owners. This according to The New York Times, 727 00:38:55,440 --> 00:38:58,520 Speaker 10: I mean NFL, NBA, other major leaguers. They've been able 728 00:38:58,560 --> 00:39:01,200 Speaker 10: to write off like the entire value of their team's quote, 729 00:39:01,239 --> 00:39:06,960 Speaker 10: intangible assets, player contracts, media rights, sponsorships over fifteen years, 730 00:39:06,960 --> 00:39:09,600 Speaker 10: so now that could change, And what they're saying is 731 00:39:09,600 --> 00:39:12,560 Speaker 10: that maybe that could stop cooling this trend of wealthy 732 00:39:12,600 --> 00:39:14,560 Speaker 10: people wanting to buy teams because they won't get as 733 00:39:14,640 --> 00:39:15,120 Speaker 10: much of a tax. 734 00:39:15,280 --> 00:39:17,680 Speaker 2: So we've heard this before, Paul, Right, yep, sure you 735 00:39:17,719 --> 00:39:19,359 Speaker 2: know this circles around Yep. 736 00:39:20,120 --> 00:39:22,160 Speaker 4: Been there, It's been there, it's been there. 737 00:39:23,719 --> 00:39:26,520 Speaker 2: I watched some ball this weekend, and I'm not sure 738 00:39:26,560 --> 00:39:29,160 Speaker 2: I understand the correlation of money to it, other than 739 00:39:29,960 --> 00:39:32,799 Speaker 2: there's teams that are loaded and there's teams that are not. 740 00:39:33,200 --> 00:39:35,440 Speaker 4: Well it's I mean, they've the NFL. 741 00:39:35,480 --> 00:39:37,000 Speaker 2: They brought private equity. 742 00:39:36,840 --> 00:39:40,000 Speaker 4: Now invest in the NFL, so that's we're having to 743 00:39:40,120 --> 00:39:41,600 Speaker 4: ten percent of these franchises. 744 00:39:41,600 --> 00:39:43,200 Speaker 2: So we're seeing a lot of that in the NFL. 745 00:39:43,400 --> 00:39:45,720 Speaker 2: Is there a week group like in Major League Baseball 746 00:39:45,760 --> 00:39:49,279 Speaker 2: p there are week teams, but no week franchises. The 747 00:39:49,360 --> 00:39:52,400 Speaker 2: values is so cool. It's not Chicago White Sox, you know. 748 00:39:52,640 --> 00:39:53,920 Speaker 4: I mean, I just kind of feel like, even if 749 00:39:53,920 --> 00:39:56,080 Speaker 4: you're in a small market like Jacksonville, you know, the 750 00:39:56,160 --> 00:40:00,439 Speaker 4: value creation there is extraordinary. So we'll see, all right. 751 00:40:00,320 --> 00:40:03,720 Speaker 10: So we go from sports, Yeah, I can okay, Okay, 752 00:40:04,400 --> 00:40:08,080 Speaker 10: business trips. Okay, you mentioned you have one coming out right, Okay, 753 00:40:08,239 --> 00:40:10,720 Speaker 10: I have one coming up next week. Tom's here. 754 00:40:11,760 --> 00:40:15,440 Speaker 4: No, We're going to the nation's capital to the National Shores, 755 00:40:16,160 --> 00:40:18,919 Speaker 4: the Gay Lord Resort down there just outside of DC 756 00:40:19,120 --> 00:40:21,480 Speaker 4: for an event. Alex Steele and I will be there. 757 00:40:21,640 --> 00:40:24,440 Speaker 2: Very cool. Yeah, so you pick up. 758 00:40:25,200 --> 00:40:27,880 Speaker 10: You're that business trip right next week, I'm going to 759 00:40:27,880 --> 00:40:29,960 Speaker 10: San Francisco. Tom's staying here, yeah. 760 00:40:30,880 --> 00:40:32,320 Speaker 4: John Tumer is going nowhere. 761 00:40:32,520 --> 00:40:34,960 Speaker 2: So the golf So you're the one that has a 762 00:40:34,960 --> 00:40:35,640 Speaker 2: golf streams. 763 00:40:35,719 --> 00:40:36,000 Speaker 5: Okay. 764 00:40:38,520 --> 00:40:41,920 Speaker 10: So the question that's coming up from this story is 765 00:40:42,080 --> 00:40:44,920 Speaker 10: do you bring a plus one on your business trips? 766 00:40:45,560 --> 00:40:49,840 Speaker 10: So that's the question blended travel right, leisure is like 767 00:40:49,880 --> 00:40:53,240 Speaker 10: a big thing now business leisure. But a new study 768 00:40:53,280 --> 00:40:55,759 Speaker 10: is saying that gen z ers and millennials they're more 769 00:40:56,120 --> 00:40:59,960 Speaker 10: likely to bring a friend or spouse, and they say 770 00:41:00,160 --> 00:41:03,080 Speaker 10: that they won't tell their boss because they're afraid what 771 00:41:03,080 --> 00:41:05,400 Speaker 10: their boss might say. So then they have their friend 772 00:41:05,480 --> 00:41:08,400 Speaker 10: or spouse kind of dipping and ducking and hiding the boss. 773 00:41:08,160 --> 00:41:08,960 Speaker 2: On the trap. 774 00:41:10,040 --> 00:41:11,920 Speaker 10: But they're just talking about this whole idea, and it 775 00:41:11,920 --> 00:41:14,360 Speaker 10: brings a question like would you bring do you bring 776 00:41:14,560 --> 00:41:17,080 Speaker 10: a spouse? Or a plus one on a business trip. 777 00:41:17,239 --> 00:41:20,320 Speaker 10: Is it okay? Some companies are actually saying they encourage 778 00:41:20,360 --> 00:41:24,080 Speaker 10: it because it makes things more enjoyable and brings stress 779 00:41:24,160 --> 00:41:24,760 Speaker 10: level down. 780 00:41:25,120 --> 00:41:26,879 Speaker 4: So yeah, I got a plus one? 781 00:41:27,000 --> 00:41:27,400 Speaker 8: You got it? 782 00:41:27,440 --> 00:41:27,680 Speaker 5: Okay? 783 00:41:27,840 --> 00:41:29,920 Speaker 4: Sure, the going down to DC. 784 00:41:30,160 --> 00:41:31,839 Speaker 10: And you're not a gen z and Rolani. 785 00:41:33,120 --> 00:41:34,400 Speaker 2: Trend, do what I want to do. 786 00:41:34,480 --> 00:41:35,960 Speaker 4: I'm at that point in my life when this. 787 00:41:36,160 --> 00:41:37,920 Speaker 2: Is it's more stressful. 788 00:41:38,480 --> 00:41:41,279 Speaker 10: You think it's more stress Yeah, because look if. 789 00:41:41,200 --> 00:41:44,000 Speaker 2: I in London for five days and take plus one 790 00:41:44,040 --> 00:41:48,400 Speaker 2: with me, she's like plus Bond Street plus. Let's go 791 00:41:48,480 --> 00:41:51,400 Speaker 2: over to Dublin the Guinness, Let's go look at some 792 00:41:51,560 --> 00:41:56,480 Speaker 2: museum and get you know, a zillion dollars. You do, 793 00:41:56,680 --> 00:42:00,480 Speaker 2: it's definitely more stressful. That's one more. 794 00:42:00,719 --> 00:42:03,120 Speaker 10: Okay, Big Memorial Day box office. Not sure if you 795 00:42:03,160 --> 00:42:05,120 Speaker 10: went out to the movies, but a lot of people did. 796 00:42:05,320 --> 00:42:08,440 Speaker 10: Three hundred and twenty six million dollars in North America. 797 00:42:08,480 --> 00:42:13,399 Speaker 10: That's between Lilo and Stitch and the Mission Impossible movie. Big, big, big. 798 00:42:14,440 --> 00:42:16,840 Speaker 10: The theaters needed it. This was like kind of boosts 799 00:42:16,840 --> 00:42:17,400 Speaker 10: that they wanted. 800 00:42:17,560 --> 00:42:19,439 Speaker 4: Yeah, I mean it's I think as we get farther 801 00:42:19,480 --> 00:42:21,960 Speaker 4: and farther from the pandemic getting a little bit closer 802 00:42:21,960 --> 00:42:25,760 Speaker 4: to normalization. I'm not sure normalization is pre pandemic levels, 803 00:42:25,800 --> 00:42:28,280 Speaker 4: but it's gonna be a it's gonna be a continue 804 00:42:28,320 --> 00:42:31,120 Speaker 4: to be a big, big, important window for these movies. 805 00:42:31,280 --> 00:42:35,400 Speaker 2: The newspapers Lisa Manteo a strong start to the week. 806 00:42:35,760 --> 00:42:40,600 Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, 807 00:42:40,719 --> 00:42:44,480 Speaker 1: and anywhere else you get your podcasts. Listen live each 808 00:42:44,520 --> 00:42:48,360 Speaker 1: weekday seven to ten am Easter and on Bloomberg dot Com, 809 00:42:48,480 --> 00:42:52,320 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 810 00:42:52,600 --> 00:42:55,719 Speaker 1: You can also watch us live every weekday on YouTube 811 00:42:56,000 --> 00:42:58,000 Speaker 1: and always on the Bloomberg terminal