Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.
Speaker 1: Along with my co host Lisa A. Bramowitz. Each day
Speaker 1: we bring you the most important, noteworthy, and useful interviews
Speaker 1: for you and your money, whether you're at the grocery
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Speaker 1: Now for more details about how technology companies have been
Speaker 1: embroiled in the Russian meddling in the US election, I
Speaker 1: want to bring in Garrett. Garrett Davincy is our technology
Speaker 1: reporter in Washington, d C. Today, Uh joining us now.
Speaker 1: You can follow Garrett on Twitter at Garrett d h
Speaker 1: Garrett mentioning Twitter. Let's begin their Twitter has identified and
Speaker 1: removed about accounts that were linked to something called the
Speaker 1: Internet Research Agency. Uh. Maybe just use that as a
Speaker 1: jumping off point to explain what is it that's being
Speaker 1: investigated and what do we know so far about social
Speaker 1: media and collusion with Russian actors and um, the U
Speaker 1: S election in November. So yeah, we have three hearings
Speaker 1: over the next two days, one today to tomorrow, and
Speaker 1: in all three of them, representatives of Twitter, Google, and
Speaker 1: Facebook will face questions from lawmakers. You mentioned Twitter, You
Speaker 1: mentioned the ira A, the Internet Research Agency, So that
Speaker 1: is the shadowy organization that has been linked to the
Speaker 1: Kremlin that you know, the public has known about for
Speaker 1: several years now, you know, dating back to even but
Speaker 1: all this information that the tech companies have disclosed, they
Speaker 1: disclosed the whole new raft of information last night Twitter
Speaker 1: mentioning those accounts. As you mentioned Facebook talking about UM
Speaker 1: on six million Americans may have seen content that was
Speaker 1: generated or shared by Russian linked actors. Now those numbers
Speaker 1: are both bigger than what had been disclosed up into
Speaker 1: this point. And we just saw Senator Mark Warner, who
Speaker 1: is the top Democrat Democrat on the Senate Intelligence Committee
Speaker 1: who will be interviewing these UM companies tomorrow, saying, you know,
Speaker 1: in the scrum to reporters at Congress, just now that
Speaker 1: you know, all this information that's been released kind of
Speaker 1: shows to him that maybe the story is going to
Speaker 1: keep getting bigger than what we know right now. He said,
Speaker 1: you know, they disclosed a certain amount earlier, and now
Speaker 1: they're disclosing more. He called um you know, the attempts
Speaker 1: by the tech companies that kind of get ahead of
Speaker 1: the story is just incremental changes. So you know, the
Speaker 1: tech companies are really up for for sort of a
Speaker 1: real grilling from lawmakers today and tomorrow. Garrett. You know,
Speaker 1: we think about President Trump's administration as being anti regulation
Speaker 1: or at least pro deregulation. What's the appetite right now
Speaker 1: to increase regulation around the tech companies? Relating to uh,
Speaker 1: some of this investigation into Russia's interference in the election.
Speaker 1: I mean you're seeing, you know, the Democrats, in part
Speaker 1: to Killer have a put forward a bill sponsored by
Speaker 1: two Democrats as well as Republican Senator John McCain. So
Speaker 1: there is some bipartisan efforting there to sort of regulate
Speaker 1: the advertising on online um, you know, social networks such
Speaker 1: as these, and kind of bring the standards that we
Speaker 1: have for radio and television up to the level on
Speaker 1: you know, the online up to the level we have
Speaker 1: for these other mediums. A lot of other senators and
Speaker 1: congress people have sort of expressed, you know, they're not
Speaker 1: so sure. They they want to kind of see how
Speaker 1: these hearings go before they take a stand, and that's
Speaker 1: really one of the things that that's up for debate here.
Speaker 1: We have some people in Congress saying, you know, this
Speaker 1: is the bill that we need to regulate advertising on
Speaker 1: these systems, make sure that um users of the social
Speaker 1: networks know when something is political, when it's and who
Speaker 1: it's been funded by and other people. Not so sure yet?
Speaker 1: What's the cost benefit analysis is something like this, Garrett,
Speaker 1: not to the companies, but to the nefarious agents that
Speaker 1: were placing these ads. I mean, it's relative the inexpensive
Speaker 1: to put these ads and this kind of content up online. Correct.
Speaker 1: It's another question that we will be you know, hearing
Speaker 1: a lot of people talking about and debating in the
Speaker 1: next couple of days, which is, if you have a
Speaker 1: small amount of money and you know, a consorted, concerted
Speaker 1: group of people trying to use that money to buy
Speaker 1: advertisements and then sharing it organically as well, how much
Speaker 1: impact can you really have? I mean, the amount of
Speaker 1: money that was involved one hundred thousand dollars that Facebook
Speaker 1: has been able to find. You know, we were not
Speaker 1: sure there could be more but one dollars. I mean,
Speaker 1: this is a drop in the bucket for the amount
Speaker 1: of money that has spent on these platforms every day.
Speaker 1: On Google it was significantly even less than that, So
Speaker 1: you know, it's hard to know exactly how much of
Speaker 1: an impact these Russian trolls so to speak, actually had
Speaker 1: on the election. Garrett, I'm sure you've read through the testimony,
Speaker 1: because these big tech giants have released pre released some
Speaker 1: of what they're going to say. Can you give us
Speaker 1: a flavor of the approach that they're taking. The approach
Speaker 1: that they're taking is to kind of, you know, try
Speaker 1: to show that they're being transparent and say, you know,
Speaker 1: their Facebook's general counsel, who will be testifying, you know,
Speaker 1: use very strong language. He said it was, you know,
Speaker 1: an affront to democracy that this kind of thing has happened,
Speaker 1: that they're very upset about it, that they really want
Speaker 1: to work with lawmakers to change it. But what they
Speaker 1: also want to do is make sure that, you know,
Speaker 1: the regulations aren't too strict and don't go too far
Speaker 1: for them that may inhibit them to actually do their business.
Speaker 1: You know, one thing that came out this morning, the
Speaker 1: Internet Um lobbying group that represents these these three companies
Speaker 1: and a few other ones, said, you know, we need
Speaker 1: these laws if they are to come forward, to apply generally,
Speaker 1: not to just carve out our three companies because we're
Speaker 1: the biggest names in this fight. Garrett Devinc, thank you
Speaker 1: so much for joining us. Garrett Devinc is a technology
Speaker 1: reporter for Bloomberg News. He's in Washington, d C. Today
Speaker 1: because that is where the action is at, with Facebook, Twitter,
Speaker 1: and Google all heading to Congress to talk about what
Speaker 1: they're doing, uh to counter false news, fake news, as
Speaker 1: well as UH perhaps uh international agents trying to interfere
Speaker 1: with US elections. Will be following that throughout the day.
Speaker 1: The testimony is in the afternoon, and we will bring
Speaker 1: that live to you on Bloomberg Television. Now, want to
Speaker 1: visit with the Noah Felmanoah is the Felix Frankfurt Professor
Speaker 1: of Law of Harvard University. Is also a Bloomberg of
Speaker 1: You columnist, and he is also the author of a
Speaker 1: new book on James Madison, on the president of the
Speaker 1: Presidency of James Madison. The book is entitled The Three
Speaker 1: Lives of James Madison, Genius, Partisan and President. No thank
Speaker 1: you very much for being with us. Um. You know,
Speaker 1: before we get into James Madison, let's talk about just
Speaker 1: something a little bit more, uh, sort of immediate, and
Speaker 1: this is the indictments that were handed down by Robert
Speaker 1: Mueller on yesterday for Paul Manafort and Mr Gates and
Speaker 1: and just the ongoing investigation. What do you make of this?
Speaker 1: Where do you think this all leads? And and why
Speaker 1: is this is starting with an indictment of Manafort. It's
Speaker 1: started with Manaphort because he is vulnerable if the allegations
Speaker 1: in the indictment are true. He's exposed himself to up
Speaker 1: to eighty years in prison by essentially lobbying for foreign governments,
Speaker 1: not telling anybody about it, keeping the money overseas, not
Speaker 1: paying taxes on it, and then laundering it to pay
Speaker 1: for things like renovations on his Hampton's house. So he's
Speaker 1: a weak link. And since he was for some period
Speaker 1: of time, for some months, charement of the campaign, it's
Speaker 1: a logical thing from a prosecutor's perspective. You start with
Speaker 1: the weak link. Where it's going. We still don't know
Speaker 1: enough to be certain. It's very clear that the Russians
Speaker 1: were trying to make contacts all over the Trump campaign,
Speaker 1: and the guilty plea of George Papadopoulos offers ample evidence
Speaker 1: of that. U The question is was there collusion back?
Speaker 1: You know, did the Trump campaign do anything going back,
Speaker 1: and it's really much too soon to know that. We
Speaker 1: don't yet have direct evidence that that did happen, um,
Speaker 1: And that's what the investigation is going to turn on.
Speaker 1: If they can find that, it will look like a
Speaker 1: success from Aller, and if not, like a success for
Speaker 1: the president. You know, No, I want to pick up
Speaker 1: on that point because you really highlighted that in your
Speaker 1: column that certainly President Trump seems to view this as
Speaker 1: a who wins and who loses type of UH investigation
Speaker 1: were as arguably Robert Muller views this as trying to
Speaker 1: find out what happened and the truth. And I'm wondering
Speaker 1: how important is it to sort of see it through
Speaker 1: President Trump's lens in in order to figure out whether
Speaker 1: this will be effective? And even if Trump is impeached,
Speaker 1: a lot of people think that he will not get
Speaker 1: expelled from office because the Senate won't convict him. You know,
Speaker 1: like anything where there are two perspectives, it's really important
Speaker 1: to see it from both directions. And so from from
Speaker 1: mother's perspective, you know, his career as a public servant
Speaker 1: comes to fruition whether he gets the president or not.
Speaker 1: You know, he is going to try to find out
Speaker 1: what actually happened and provide evidence. And that's how prosecutors
Speaker 1: typically are are brought up to see things. But from
Speaker 1: the president's perspective, and really this is the perspective it's
Speaker 1: most relevant to our polity as a nation. The question
Speaker 1: is does he go down or not? You know, does
Speaker 1: he end up in history as as Nixon, or did
Speaker 1: the end up in history as Bill Clinton bruised and
Speaker 1: battered but nevertheless acquitted by the Senate. And so I
Speaker 1: think it's hard, you know, for an elected official not
Speaker 1: to see things in those terms. No, as far as
Speaker 1: the role of the special prosecutor goes in this, is
Speaker 1: there any possibility that the prosecutor will be wrong in
Speaker 1: going after certain people in the sense that we focus
Speaker 1: on the president, but maybe it had nothing to do
Speaker 1: with decisions made by Donald Trump. You know, prosecutors are
Speaker 1: a human believe it or not, and they make mistakes too.
Speaker 1: In the case of Manaford, assuming that the allegations are
Speaker 1: are true, and there's no reason really to doubt that
Speaker 1: at this stage, the prosecu will will pick up some
Speaker 1: scalps of people who are criminals and have done things
Speaker 1: wrong um and should probably be punished for that, but
Speaker 1: who may not ultimately lead back to the big investigation,
Speaker 1: and that for the prosecut that's the kind of mistake
Speaker 1: that you're talking about. I think it's where you go
Speaker 1: after somebody, you try to flip them and they've done
Speaker 1: nothing to tell and that may be true, and that
Speaker 1: happens to prosecutors um and then you know, the bad
Speaker 1: luck is to the people who committed the crimes in
Speaker 1: the first place and made themselves vulnerable to being charged
Speaker 1: and might otherwise never have been charged. Do you think
Speaker 1: the Attorney General Jeff Sessions is at risk here? I
Speaker 1: haven't heard anything thus far suggesting that he is personally
Speaker 1: at risk, especially because the key meeting in which the
Speaker 1: President apparently pushed Comey was one in which Sessions wasn't present. So,
Speaker 1: you know, I think Sessions looks bad around this, but
Speaker 1: I don't yet have any indication that he himself is
Speaker 1: directly in the line fire. You know. I just also
Speaker 1: want to follow up in this whole winner versus loser
Speaker 1: kind of way that President Trump seems to be viewing this.
Speaker 1: I mean, there is another aspect to this. We're gonna
Speaker 1: get elections midterm elections next year, and there is a
Speaker 1: good chance that should this escalate based on the popularity
Speaker 1: rankings of President Trump yesterday, that this could definitely impede
Speaker 1: the Republican's position in Senate, in Congress more broadly. What
Speaker 1: what do you? What do you? What's your take on that? Well,
Speaker 1: you're absolutely right that in principle, if the President's popularity
Speaker 1: goes down even further, that should have a gravitational pull
Speaker 1: on other Republican candidates. It is, however, really important to
Speaker 1: remember that the first midterm elections in any presidential term
Speaker 1: almost always result in a significant loss of seats for
Speaker 1: the president's party. You know what happened to build Contentent,
Speaker 1: happened to Barack Obama. It's it's quite normal, and so
Speaker 1: there's going to be some pull regardless. Um, the question
Speaker 1: is will that be very disproportionate? And if you look
Speaker 1: at the way the districts are designed, it's not certain
Speaker 1: that Trump's unpopularity will pull down repub into that much
Speaker 1: further in many House races, because many House districts are
Speaker 1: gerrymandered such that they're overwhelmingly Democrats or overwhelmingly Republican, and
Speaker 1: the base may not care. No, just quickly and in
Speaker 1: your book, The Three Lives of James Madison, Genius, Partisan
Speaker 1: and President. Would you say that James Madison is one
Speaker 1: of the first presidents to really understand the power public
Speaker 1: opinion and what was then the media. Yeah. Absolutely, It
Speaker 1: was in um It was in John Adams's presidency that
Speaker 1: he and Jefferson decided they needed to start a newspaper
Speaker 1: of their own, essentially a republican newspaper to go against
Speaker 1: the federalist newspaper that was being run by Alexander Hamilton's
Speaker 1: and they wrote very explicitly about this. In fact, Madison
Speaker 1: wrote a very famous essay called public Opinion where he
Speaker 1: basically said, you know, we didn't think it was going
Speaker 1: to work this way under the Constitution. We thought that,
Speaker 1: you know, everyone would do his own research. But now
Speaker 1: we understand that the media affects the way people think,
Speaker 1: and so if you want to actually ensure that the
Speaker 1: Constitution is followed, it's not enough to rely on the
Speaker 1: government officials. He was thinking of the Adams administration actually
Speaker 1: have to rely on the media to inform the people.
Speaker 1: Sounds fascinating. A new book, The Three Lives of James Madison, Genious, Partisan,
Speaker 1: and President, by Noah Feldman, who just joined us. Felix Frankfurter,
Speaker 1: professor of law at Harvard University, also able recue columnist.
Speaker 1: This is Bloomberg. Just last week, more than voters in Lombardy,
Speaker 1: that's the home to Italy's financial capital Milan, and the
Speaker 1: Veneto region around Venice, they voted yes in a non
Speaker 1: binding referendum to somehow access more autonomy from the state
Speaker 1: of Italy. Here to help us understand exactly what's going
Speaker 1: on is Roberto Maroni. He is the president of the
Speaker 1: region of Lombardy and he is also a former Interior
Speaker 1: Minister of the Italian Republic in the Roberta Lomoni, President,
Speaker 1: thank you very much for being with us. What can
Speaker 1: you describe for people the difference between the referendum that
Speaker 1: was held in Italy about autonomy in these two regions
Speaker 1: and the referendum the balloting that went on in Catalonia.
Speaker 1: It's a very simple. The referendum in Catalonia was something
Speaker 1: against the Spanish constitution. What we did in Lombardi and
Speaker 1: Vnito is something too uh to make the Italian constitutes
Speaker 1: to apply the Italian constitution, in particular reform of the
Speaker 1: constitution which took place sixteen years ago. The reform was
Speaker 1: we the regions can ask for more powers, more competences
Speaker 1: and more money. In these last sixteen years, no regions
Speaker 1: got new competencens, new powers. Why because the Italian government
Speaker 1: was always against giving money and competency. That's why we
Speaker 1: did the referendum. It's a non binding referendum, yes, but
Speaker 1: from a political viewpoint, this gave me power. More than
Speaker 1: three million Lomber people went to vote, and this is
Speaker 1: the difference in any negotiating, tough negotiation with the government.
Speaker 1: President Maroni, can you just take a step back and explain,
Speaker 1: is it a coincidence that we're seeing these independence or
Speaker 1: autonomy movements in the economic capitals of a number of
Speaker 1: European regions, Because the Catalonia region is also the economic
Speaker 1: capital of Spain, much like Lombardy. I don't think it's
Speaker 1: a coincidence. The problem is that Europe is not working.
Speaker 1: The governance of Europe from a political viewpoint, is not working.
Speaker 1: It's a sum of individual member states. Each of them
Speaker 1: is working as individual member states. We have nothing such
Speaker 1: as the US system federal system, and this uh is
Speaker 1: means that many important regions such as Catalonia Lombardi and
Speaker 1: Ventito want Europe to change. I think, I hope that
Speaker 1: what is happening in Europe is hurt by the European Union,
Speaker 1: the European commissioned, the European Parliament, because we need to
Speaker 1: change the governance of Europe from a europe from a
Speaker 1: political viewpoint. This is the signal I think people has
Speaker 1: done with our referendum and also in Catalonia. What would
Speaker 1: you like to see changed? Because I believe that one
Speaker 1: of the points during the referendum was that the two
Speaker 1: regions account for about thirty percent of the economic output
Speaker 1: of Italy, that includes industrial, agricultural services, finance and so on.
Speaker 1: Do you want more of the tax money to day
Speaker 1: in northern Italy rather than go to places in southern
Speaker 1: Italy and Sicily, Yes, exactly. We pay a lot of taxes. Uh.
Speaker 1: If you the difference between what we pay in taxes
Speaker 1: and what we get back from the state from the
Speaker 1: government is a huge amount of taxes is fifty four
Speaker 1: billion euros per year. The difference I want at least
Speaker 1: half of this amount, twenty seven billion euros. So we'll
Speaker 1: let me to lower the level of taxation for companies,
Speaker 1: to increase investments from abroad and to put Lombardy on
Speaker 1: the top of the regions in Europe. I'm trying to understand.
Speaker 1: You were saying Europe is not working. The European Union
Speaker 1: is not working, and so that's why the economic powerhouses
Speaker 1: in Europe are sort of putting their foot down. What
Speaker 1: would you like to see on a European Union level
Speaker 1: that would make it work? What we call the Europe
Speaker 1: of the Regions, not of twenty eight twenty nine eight
Speaker 1: member states. We have ten million people. We would be
Speaker 1: the sixth country in Europe um, but we don't count.
Speaker 1: We as Lombardy region don't have any power to interfere
Speaker 1: with European decisions. That's why we want to Europe to
Speaker 1: move from what is now twenty eight member states into
Speaker 1: the Europe of the Region's taken into account, then Lombardy,
Speaker 1: Catalonia and regions are something special. That's our our vision,
Speaker 1: President Modony, and that that's highly radical. That's basically saying,
Speaker 1: break up Italy, break up Spain. It's not about them,
Speaker 1: it's Lombardy and it's got a lot. Is that you're
Speaker 1: asking for We are asking in uh uh were What
Speaker 1: we want is that Lombardi event of the regions, the
Speaker 1: power the powerful regions in Europe can be taken into
Speaker 1: account more than what is now. We don't have nothing
Speaker 1: against Italy. Of course, our ferendum was inside the nation
Speaker 1: Italian nation. But I think that it will be useful
Speaker 1: or so for Italy and the regions in the South.
Speaker 1: If if Lombardi is more has more money and more
Speaker 1: competencence and power have So it seems to be that
Speaker 1: there's this conflict between the political unity, let's say of
Speaker 1: Italy or even in Spain, with the economic and financial reality,
Speaker 1: which is this is all about money. Right, your rich region,
Speaker 1: you don't want that money to go to regions that
Speaker 1: have less money. Yet I don't want money to go
Speaker 1: to the Italian government because they don't use our money
Speaker 1: the right way. I am willing to give money to
Speaker 1: the regions directly to the regions of the South in
Speaker 1: a bit to be relationship. This is what is useful
Speaker 1: for the South. This is my vision. And now we
Speaker 1: are trying to uh with the government to find a solution,
Speaker 1: a common solution, not against the government, not against Italy,
Speaker 1: but for the help of the original of the South.
Speaker 1: Robert to Maroni thank you so much for being with us.
Speaker 1: President of the Region of Lombardy, which is his presidency
Speaker 1: is based in Milan in Italy, but he's joining us
Speaker 1: in our Bloomberg eleven three studios in New York focused
Speaker 1: on fixed income is brought to by PIMCO for investors
Speaker 1: who demand more than the markets deliver. All investments contain
Speaker 1: risk and may lose value. Consult your investment professional before investing,
Speaker 1: well before we do anything where we go on, check
Speaker 1: in with Simon Ballard. Here's our global credit strategist for
Speaker 1: Bloomberg News based in London. Simon, always a pleasure. I'm
Speaker 1: going to give you a choice here. This is, you know,
Speaker 1: the trifecta. You get to talk either about inflation or
Speaker 1: deflation in the Eurozone, Italy and what the effects of
Speaker 1: quantitative easing have had on the economy or not. And
Speaker 1: the alternative for Germany, the Nationalist party that won seats
Speaker 1: in the Bundestag calling for a lawsuit to question quantitative
Speaker 1: eything from the ECB. Which one of those, uh, do
Speaker 1: you want to kick off? Whichever one we pick, we're
Speaker 1: all gonna We're gonna come back to inflation. I think, indeed,
Speaker 1: go for it the all the lack of inflation, and
Speaker 1: the and and the fact that the you know, the
Speaker 1: e c B. Here we are four years into into
Speaker 1: quantitative easing and they're still trying to chase that two
Speaker 1: percent close to target that that they're wanting. So um,
Speaker 1: you know, be it bit directly in Germany, Beard in Italy.
Speaker 1: You know, the lack of inflation is what's keeping monetary
Speaker 1: policy accommodative um at these sort of levels, which is
Speaker 1: continuing to fuel equities higher and risk assets generally sort
Speaker 1: of keeping the keeping the flames going. Simon, when you
Speaker 1: talk to band fund managers, are they basically asleep? Are
Speaker 1: they basically I don't care, just put it on an
Speaker 1: autopilot by everything. I don't care. There's nothing that could
Speaker 1: shake this until they see a catalyst, until they feel
Speaker 1: there's a catalyst for change. Then yes, to a certain extent,
Speaker 1: there is that, although you do sense that they're becoming
Speaker 1: a little bit more how should I put it, a
Speaker 1: little bit more discerning in their approach to risk. And
Speaker 1: we've seen you know, a couple of high yield deals recently,
Speaker 1: sub investment grade deals having a little bit more of
Speaker 1: investor push back. There was a deal from from Shop Direct.
Speaker 1: Last week, um It had an fr entranch. Investors came
Speaker 1: back said the risks, the covenants associated with the name
Speaker 1: were a little bit too much for them to stomach,
Speaker 1: so they pulled back and they cut the fr entranch
Speaker 1: end floating floating rate notes, right, I apologize as a
Speaker 1: floating rate notes. So they went with a fixed rate
Speaker 1: coupon trance. The yield on that was had had to
Speaker 1: be pushed back from seven to seven and three quarter
Speaker 1: percent may not seem a huge amount, but in the
Speaker 1: context of a have a multi hundred billion dollar hundred
Speaker 1: hundred billion pounds transaction, it is. It just shows that
Speaker 1: investors have become a little bit more concerned about the
Speaker 1: underlying credit fundamental So they're not just chasing yield in
Speaker 1: this environment. They are looking at the you know, the
Speaker 1: the risk reward that they potentially will be left holding
Speaker 1: if and when inflation starts pick up, if and when
Speaker 1: yields start to to to rise more significantly. Simon, is
Speaker 1: there any clear understanding as to why it would cost
Speaker 1: twice as much to borrow money from the UH from
Speaker 1: the markets in France and it does in Germany? Looking
Speaker 1: at ten year yields. I mean basically there you're just
Speaker 1: going to look at the fundamental risks. And while France
Speaker 1: has improved significantly or did improve significantly with Mr Macron
Speaker 1: being voted into the into the into the Lias Palace,
Speaker 1: you know, a couple of question marks have started to
Speaker 1: come in his the Macron rally. Just as we had
Speaker 1: the Trump rally that faded, the Macron rally has faded
Speaker 1: to a certain extent. So you've got a greater degree
Speaker 1: of social security costs and and basically weaker economic growth
Speaker 1: within the within the thing. But does that really affect
Speaker 1: people's opinion when it comes to the ability of the
Speaker 1: French government to repay its debts. I mean they're going
Speaker 1: to repay them in Euros, as is Germany, as is Italy,
Speaker 1: Spain and so on. Doesn't someone say, gee, this just
Speaker 1: doesn't make any sense for so long that Spain, you know,
Speaker 1: the tenure at one four seven, the US is at
Speaker 1: two three seven, and we don't have anybody yet that's
Speaker 1: trying to secede. No, absolutely, and to a certain extent,
Speaker 1: if you look at your the level of absolute European
Speaker 1: yields versus the U s, you'd argue that from a
Speaker 1: fundamental perspective, you want to buy in the US all
Speaker 1: day long because of the you know, the improving story
Speaker 1: um and and the higher yields there in the US.
Speaker 1: At the end of the day, European investors are sort
Speaker 1: of obliged to hold European or euro denominated assets UM.
Speaker 1: And the longer that the ECB continues to sort of
Speaker 1: pump prime the economy with quantity divis ng UM, you know,
Speaker 1: the lower those or certainly those low level of yields
Speaker 1: will will persist. Simon. We did get results out of
Speaker 1: BNP Pariba today that showed declines in their debt trading revenues.
Speaker 1: This kind of follows what we've been seeing. Uh and
Speaker 1: you are just shot a proprietary trading group in London. Um,
Speaker 1: there has been a market deterioration in volumes a relative
Speaker 1: to the same period last year. How does this play
Speaker 1: into the calculus at all? Well, again, you know what
Speaker 1: we've seen here is a reiteration across the banking section
Speaker 1: and across many industries. Should we say of the challenging
Speaker 1: market conditions that the traders and investors face um and
Speaker 1: I think you know the numbers that we had from
Speaker 1: BNP while equities we were fairly buoyant. On the fixed
Speaker 1: income side, you know, margins continue to be to be pressed.
Speaker 1: And until we start to see the CB getting into
Speaker 1: sort of rate tightening, into into interest rate raising mode um,
Speaker 1: then margins in the financial sector we're going to remain
Speaker 1: going to squeezed. I'm just wondering on a broader market perspective,
Speaker 1: the fact that volumes have been coming down, that people
Speaker 1: haven't had conviction, does that matter? Are people caring about
Speaker 1: bond market liquidity anymore? People don't don't care about bond
Speaker 1: market liquidity at the moment. They're quite happy to just hold,
Speaker 1: but they will do when the market reverses and they're
Speaker 1: trying to look for a bid. Well that makes that
Speaker 1: that makes sense. Any comments about the Alternative for Germany
Speaker 1: Party and their call for a lawsuit questioning ANCLA Merkel's
Speaker 1: reliance on the ECB, Yeah, you know again, I guess
Speaker 1: you know, the the a f D and generally, you know,
Speaker 1: the populist rising that we've seen across Europe, the protectionist
Speaker 1: type of rhetoric that we've seen coming into politics over
Speaker 1: the course of I guess the last couple of years
Speaker 1: now um. It's really just helped take the headlines away
Speaker 1: from from Spain and Catalonia um as Pogumo ends up
Speaker 1: in in Belgium. But again I think it just underscores
Speaker 1: the the the the problems of a cross the Eurozone
Speaker 1: um at the moment um in terms of each individual
Speaker 1: nation wanting to ensure that it has its own economic
Speaker 1: growth and solid foundations for future, for future improvements. Simon Ballard,
Speaker 1: thank you so much for joining us. Simon Ballard is
Speaker 1: a global credit strategist for Bloomberg. Coming to us from London.
Speaker 1: Thanks for listening to the Bloomberg P and L podcast.
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