1 00:00:09,880 --> 00:00:13,040 Speaker 1: Welcome to the Bloomberg Surveillance podcast and I'm Tom Keene. 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Daily we bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,840 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. Joining 5 00:00:27,920 --> 00:00:29,920 Speaker 1: us right now is David mal Pass. Here is Mr 6 00:00:29,960 --> 00:00:33,080 Speaker 1: Trump's selection his World Bank president. He's come in under 7 00:00:33,120 --> 00:00:36,200 Speaker 1: some controversy and then he has had to focus on 8 00:00:36,280 --> 00:00:40,800 Speaker 1: this horrific virus. He is a physicist from Colorado College. David, 9 00:00:40,840 --> 00:00:42,920 Speaker 1: I want you to look right now at the inertial 10 00:00:43,000 --> 00:00:46,480 Speaker 1: force of this ugly pandemic. How is your world bank 11 00:00:46,640 --> 00:00:52,560 Speaker 1: adapting to the momentum of this pandemic? Hi? Hi, Tom, 12 00:00:53,000 --> 00:00:56,880 Speaker 1: and John and Lisa. So the adapt the world banks 13 00:00:56,960 --> 00:00:59,840 Speaker 1: doing okay. People are able to work from home. We 14 00:01:00,080 --> 00:01:03,320 Speaker 1: gotten a lot of programs out over a hundred programs 15 00:01:03,360 --> 00:01:08,160 Speaker 1: that are directly at the health emergency. The problem is 16 00:01:08,280 --> 00:01:11,920 Speaker 1: that developing countries are under immense pressure because of the 17 00:01:12,000 --> 00:01:16,320 Speaker 1: global recession, that economic shutdown in the advanced countries, and 18 00:01:16,400 --> 00:01:20,759 Speaker 1: the pandemic itself is still spreading through countries. Uh. And 19 00:01:20,840 --> 00:01:23,920 Speaker 1: they also entered this problem with a lot of debt 20 00:01:24,040 --> 00:01:26,760 Speaker 1: already on their books. So those are the problems that 21 00:01:26,800 --> 00:01:30,880 Speaker 1: we're trying to address as we as the recession deepens, 22 00:01:30,920 --> 00:01:33,720 Speaker 1: and then we hope find the other side and we 23 00:01:33,840 --> 00:01:37,200 Speaker 1: come out of it. In your distinguished career at bear Sterns, 24 00:01:37,200 --> 00:01:40,080 Speaker 1: and particularly David, as you build out that world best 25 00:01:40,200 --> 00:01:44,200 Speaker 1: Latin American coverage at bear Sterns, there was a mechanism 26 00:01:44,319 --> 00:01:47,640 Speaker 1: for challenges in the third world in the emerging markets. 27 00:01:48,080 --> 00:01:51,360 Speaker 1: Are the mechanisms there right now or do we just 28 00:01:51,440 --> 00:01:54,120 Speaker 1: have to go to a debt suspension? I mean, can 29 00:01:54,160 --> 00:01:56,240 Speaker 1: we use the processes in the e M that we 30 00:01:56,320 --> 00:02:00,200 Speaker 1: have available or is this a new territory. I think 31 00:02:00,240 --> 00:02:02,920 Speaker 1: we have to look at new territory because the debt 32 00:02:03,000 --> 00:02:06,320 Speaker 1: itself has changed. In the nineteen eighties, I was in 33 00:02:06,360 --> 00:02:09,520 Speaker 1: the regular administration and there was a Latin debt crisis 34 00:02:09,600 --> 00:02:13,680 Speaker 1: that had come from the petro dollar recycling. Remember, the 35 00:02:13,680 --> 00:02:17,400 Speaker 1: oil prices had been high and so the banks could uh. 36 00:02:17,560 --> 00:02:20,720 Speaker 1: The banks had a lot of deposits and they would 37 00:02:20,800 --> 00:02:24,200 Speaker 1: lend those to the developing world, and the problem was 38 00:02:24,320 --> 00:02:27,080 Speaker 1: they didn't get paid back when oil prices went low. 39 00:02:27,400 --> 00:02:32,359 Speaker 1: So it was a bank crisis because they couldn't the 40 00:02:32,760 --> 00:02:36,760 Speaker 1: bank deposits were a big portion of the capitalization of 41 00:02:36,800 --> 00:02:41,000 Speaker 1: the banks or they were critical. Um, it was syndicated loans. 42 00:02:41,040 --> 00:02:44,800 Speaker 1: So this is quite different. There's euro bonds involved. Uh. 43 00:02:44,880 --> 00:02:49,480 Speaker 1: There so a lot more commercial creditors than in in 44 00:02:49,520 --> 00:02:54,040 Speaker 1: the past. Uh. And also the nature of the debt China. 45 00:02:54,320 --> 00:02:57,480 Speaker 1: China is a much bigger player in this. They weren't 46 00:02:57,680 --> 00:03:02,000 Speaker 1: really a creditor in the nineteen eighties. So that those 47 00:03:02,040 --> 00:03:05,000 Speaker 1: two changes mean you have to look at a different process. 48 00:03:05,639 --> 00:03:09,440 Speaker 1: What we're doing is a suspension of debt payments. Now 49 00:03:09,880 --> 00:03:14,760 Speaker 1: that that that's the official bilateral creditors, and we're encouraging 50 00:03:14,800 --> 00:03:20,120 Speaker 1: the commercial creditors to stop taking payments from the poorest countries. Uh. 51 00:03:20,200 --> 00:03:23,760 Speaker 1: That that's a response to the crisis. David, you do 52 00:03:23,800 --> 00:03:27,440 Speaker 1: not represent the Trump administration, but you were certainly selected 53 00:03:27,440 --> 00:03:30,080 Speaker 1: by the president to take over this important task at 54 00:03:30,120 --> 00:03:34,360 Speaker 1: the World Bank. Great, he's going after other institutions, his 55 00:03:34,440 --> 00:03:38,320 Speaker 1: own CDC, He's going after the World Health Organization for 56 00:03:38,360 --> 00:03:40,800 Speaker 1: all I know, he's going to go after the World Bank. 57 00:03:41,120 --> 00:03:44,880 Speaker 1: How should your institution respond to a president who is 58 00:03:45,000 --> 00:03:50,560 Speaker 1: not an internationalist? One correction Toime, I wasn't selected by him. 59 00:03:50,600 --> 00:03:53,280 Speaker 1: I was proposed by him to the World Community. I 60 00:03:53,360 --> 00:03:56,600 Speaker 1: was happy to be elected noted that board by the 61 00:03:56,640 --> 00:04:00,200 Speaker 1: Board and Governors of the World Bank unanimously. And it's 62 00:04:00,240 --> 00:04:03,280 Speaker 1: been going well in terms of the changes that we're 63 00:04:03,320 --> 00:04:06,400 Speaker 1: making at the World Bank that can help countries with growth, 64 00:04:06,680 --> 00:04:10,040 Speaker 1: with better living standards, with all the things that were 65 00:04:10,080 --> 00:04:13,640 Speaker 1: that we're trying to do, climate, education, health, uh and 66 00:04:13,880 --> 00:04:16,240 Speaker 1: on down the line. Poverty is a big part of 67 00:04:16,279 --> 00:04:20,200 Speaker 1: the problem. Um so if you if you boil it down, 68 00:04:20,360 --> 00:04:25,400 Speaker 1: we want to have international cooperation among the various organizations, 69 00:04:25,440 --> 00:04:29,080 Speaker 1: but the drive for growth has to come from individual countries. 70 00:04:29,400 --> 00:04:31,479 Speaker 1: So that's what we're trying hard to do at the 71 00:04:31,480 --> 00:04:35,599 Speaker 1: World Bank. Are we have country offices in almost all 72 00:04:35,600 --> 00:04:39,760 Speaker 1: of the developing countries, and those offices work with the 73 00:04:39,800 --> 00:04:42,800 Speaker 1: governments to find out what will work best for the 74 00:04:42,880 --> 00:04:45,960 Speaker 1: countries and then we can help fund it with grants 75 00:04:46,360 --> 00:04:49,480 Speaker 1: and loans. You know, the World Bank heavily is doing grants, 76 00:04:49,600 --> 00:04:52,960 Speaker 1: which helps a lot with the net positive flow into 77 00:04:53,000 --> 00:04:56,120 Speaker 1: the poorest countries. That's what we want others to do. 78 00:04:56,200 --> 00:04:58,719 Speaker 1: You know, it's it's hard to say you're going to 79 00:04:58,800 --> 00:05:04,080 Speaker 1: make a own to a country that's that's in extreme poverty. 80 00:05:04,160 --> 00:05:06,920 Speaker 1: Because where they're going to get the resources to pay 81 00:05:06,920 --> 00:05:10,839 Speaker 1: it back, So we try to shift the balance towards grants, David, 82 00:05:10,839 --> 00:05:13,360 Speaker 1: that seems to be a theme throughout the world, certainly 83 00:05:13,360 --> 00:05:16,440 Speaker 1: in Europe, the idea of grants not loans. We're also 84 00:05:16,480 --> 00:05:18,880 Speaker 1: talking about debt reduction, and you have been on the 85 00:05:18,920 --> 00:05:21,120 Speaker 1: record saying that you do think that there needs to 86 00:05:21,120 --> 00:05:23,960 Speaker 1: be some debt reduction throughout the developing world. How big 87 00:05:24,000 --> 00:05:27,760 Speaker 1: a haircut are you talking about. Well, we we need 88 00:05:27,800 --> 00:05:30,479 Speaker 1: to do the analysis of countries and what their debt 89 00:05:30,560 --> 00:05:34,359 Speaker 1: sustainability levels are, how much debt can they support, and 90 00:05:34,360 --> 00:05:37,800 Speaker 1: then reduce the amounts of debt to that. But right now, 91 00:05:37,920 --> 00:05:41,760 Speaker 1: the bigger, the immediate problem is the need for transparency. 92 00:05:42,120 --> 00:05:44,599 Speaker 1: One thing that's going on in the market is debt 93 00:05:44,720 --> 00:05:49,120 Speaker 1: rescheduling and restructuring where people don't know what the terms are, 94 00:05:49,760 --> 00:05:53,760 Speaker 1: and that means other creditors are reluctant to participate. Uh, 95 00:05:53,800 --> 00:05:57,279 Speaker 1: if there's if there's not knowledge of the terms. When 96 00:05:57,320 --> 00:06:01,320 Speaker 1: I'm saying terms, for example, governments in the poorest countries 97 00:06:01,360 --> 00:06:05,200 Speaker 1: are sometimes borrowing money and it's never disclosed how much 98 00:06:05,320 --> 00:06:08,320 Speaker 1: they're supposed to pay. Then the government leaves and the 99 00:06:08,400 --> 00:06:10,839 Speaker 1: people of the country are left with the burden of 100 00:06:10,880 --> 00:06:13,960 Speaker 1: the debt. That's something that's a cycle, that a debt 101 00:06:14,000 --> 00:06:16,760 Speaker 1: cycle that we have to get out of because the 102 00:06:16,839 --> 00:06:20,440 Speaker 1: politicians or the leaders can benefit from the immediate loan, 103 00:06:20,800 --> 00:06:22,760 Speaker 1: but then it's very hard for the people of the 104 00:06:22,800 --> 00:06:26,839 Speaker 1: country to repay that. David in the news this weekend 105 00:06:26,920 --> 00:06:30,680 Speaker 1: Listalize article in the Washington Post on Lebanon was heartbreaking. 106 00:06:31,120 --> 00:06:35,320 Speaker 1: How can you affect assistance to a Lebanon It's being 107 00:06:35,440 --> 00:06:42,160 Speaker 1: absolutely crushed right now. These are tough, tough challenges. Lebanon 108 00:06:42,200 --> 00:06:45,880 Speaker 1: had taken deposits into its banking system and paid a 109 00:06:46,040 --> 00:06:49,359 Speaker 1: very high interest rate. I think you know, I'll test 110 00:06:49,400 --> 00:06:52,560 Speaker 1: your history, but remember the SNL crisis long ago in 111 00:06:52,600 --> 00:06:55,920 Speaker 1: the US. You had this elevated interest rate that made 112 00:06:55,960 --> 00:06:59,320 Speaker 1: it look good for depositors, but then when they began 113 00:06:59,360 --> 00:07:03,200 Speaker 1: to withdraw, it created a banking crisis. Um, what we're 114 00:07:03,240 --> 00:07:07,360 Speaker 1: doing in Lebanon is trying to support the social safety 115 00:07:07,360 --> 00:07:12,520 Speaker 1: net that means actual cash to actual people, individual people, 116 00:07:12,960 --> 00:07:15,160 Speaker 1: rather than trying to run it through the government in 117 00:07:15,160 --> 00:07:18,760 Speaker 1: the banking system, which is so problematic now. David, don't 118 00:07:18,760 --> 00:07:22,760 Speaker 1: test Tom's history. Will be here all day. He'll start, David, 119 00:07:22,800 --> 00:07:24,640 Speaker 1: you know how this works. We'll be here for a 120 00:07:24,640 --> 00:07:27,480 Speaker 1: long long time. You know as well as I do 121 00:07:27,520 --> 00:07:29,760 Speaker 1: that everybody wants to receive a grant. Nobody wants to 122 00:07:29,800 --> 00:07:32,840 Speaker 1: receive a loan. When you say there needs to be haircuts, 123 00:07:33,320 --> 00:07:38,400 Speaker 1: who are you speaking to? That the the official bilateral 124 00:07:38,480 --> 00:07:43,480 Speaker 1: creditors right now, and so that's uh, that's uh institutions 125 00:07:43,520 --> 00:07:47,320 Speaker 1: in the US government institutions that are lending heavily. More 126 00:07:47,360 --> 00:07:50,920 Speaker 1: than half of it now is China. Chinese institutions that 127 00:07:50,960 --> 00:07:55,160 Speaker 1: have lent to these countries. Uh. They what they're doing 128 00:07:55,280 --> 00:07:59,080 Speaker 1: right now is putting the debt payments at the end 129 00:07:59,120 --> 00:08:01,679 Speaker 1: of the term. They're they're pushing it down the down 130 00:08:01,680 --> 00:08:04,960 Speaker 1: the line rather than reducing it, so the net present 131 00:08:05,040 --> 00:08:08,680 Speaker 1: value is being preserved. At some point, you have to 132 00:08:08,760 --> 00:08:11,760 Speaker 1: reduce the net present value in order to create light 133 00:08:11,880 --> 00:08:14,200 Speaker 1: at the end of the tunnel for the poorest countries. 134 00:08:14,560 --> 00:08:19,320 Speaker 1: That's what we're that's what I've proposed. Also, the commercial creditors, 135 00:08:19,640 --> 00:08:23,280 Speaker 1: the G twenties already asked them to do comparable treatment, 136 00:08:23,560 --> 00:08:27,840 Speaker 1: meaning they would be reducing the net present value of 137 00:08:27,960 --> 00:08:31,320 Speaker 1: the of the of their loans or of what's owed 138 00:08:31,320 --> 00:08:34,800 Speaker 1: to them we're talking about, remember, the poorest countries. So 139 00:08:35,400 --> 00:08:38,880 Speaker 1: given the pandemic, it doesn't make much sense for the 140 00:08:39,000 --> 00:08:42,880 Speaker 1: wealthier countries and creditors to get back all of their 141 00:08:42,920 --> 00:08:46,040 Speaker 1: money from the poorest countries and the people in those countries. 142 00:08:46,160 --> 00:08:47,920 Speaker 1: We could just as well be talking about Europe, but 143 00:08:47,920 --> 00:08:50,880 Speaker 1: we're talking about much much poorer countries. David, of course, 144 00:08:51,160 --> 00:08:52,760 Speaker 1: and you have a lot of empathy for what they're 145 00:08:52,760 --> 00:08:55,160 Speaker 1: going through right now, and I can sense that when 146 00:08:55,200 --> 00:08:58,320 Speaker 1: you send this message to the Chinese Communist Party, how 147 00:08:58,360 --> 00:09:04,600 Speaker 1: receptive are they? Yeah, They're They're receptive. President She has 148 00:09:04,600 --> 00:09:07,120 Speaker 1: said he wants to fully participate and he wants all 149 00:09:07,200 --> 00:09:11,440 Speaker 1: Chinese agencies to put fully participate in the suspension initiative. 150 00:09:12,080 --> 00:09:15,320 Speaker 1: Then that gets into the details of what that means. 151 00:09:15,400 --> 00:09:18,199 Speaker 1: So that's why what I've tried to do in the 152 00:09:18,280 --> 00:09:21,520 Speaker 1: G seven meetings last Monday a week ago, and in 153 00:09:21,559 --> 00:09:25,840 Speaker 1: the G twenty on Saturday, is be very specific about 154 00:09:25,880 --> 00:09:30,000 Speaker 1: the need for the transparency. I'll give you one example. 155 00:09:30,360 --> 00:09:33,960 Speaker 1: Central banks have been making deposits into other central banks 156 00:09:34,240 --> 00:09:38,280 Speaker 1: and not not labeling it alone, so you make you know, 157 00:09:38,600 --> 00:09:40,800 Speaker 1: I'll just put money in your bank account, but it's 158 00:09:40,840 --> 00:09:43,319 Speaker 1: really still my money. But it's not alone to you 159 00:09:44,120 --> 00:09:48,000 Speaker 1: that that needs to have more transparency on that practice, 160 00:09:48,320 --> 00:09:51,880 Speaker 1: so that others when they're lending or giving grants to 161 00:09:51,920 --> 00:09:55,679 Speaker 1: these countries know what the totality of the debt is. 162 00:09:56,000 --> 00:09:57,960 Speaker 1: So a lot of the work that we're doing this 163 00:09:58,040 --> 00:10:00,559 Speaker 1: month and next month, what the World Bank is, what 164 00:10:00,720 --> 00:10:04,080 Speaker 1: I've had people doing is put on the websites all 165 00:10:04,120 --> 00:10:07,839 Speaker 1: the information that we have and then invite more information. 166 00:10:08,000 --> 00:10:10,720 Speaker 1: We can shine shine a lot of light on this 167 00:10:10,800 --> 00:10:16,160 Speaker 1: and make progress. The reason it's so important is countries 168 00:10:16,240 --> 00:10:20,200 Speaker 1: can then invite investment into their countries with the knowledge 169 00:10:20,320 --> 00:10:23,560 Speaker 1: that it's that it's transparent, that the investor the new 170 00:10:23,600 --> 00:10:26,800 Speaker 1: money coming in knows what it's getting. Devin mouth Pass 171 00:10:26,880 --> 00:10:29,440 Speaker 1: fantastic to catch obvious, incredible inside and got to get 172 00:10:29,480 --> 00:10:31,360 Speaker 1: you back on the program soon, Tavid mouth Pass there 173 00:10:31,400 --> 00:10:38,240 Speaker 1: the World Bank President Casta nicol to now Intelligence Deputy 174 00:10:38,240 --> 00:10:40,800 Speaker 1: director of research constant great to catch up and you 175 00:10:40,880 --> 00:10:43,120 Speaker 1: just want me through that. Have we got an agreement 176 00:10:43,160 --> 00:10:46,320 Speaker 1: on size and what does the discussion around strings attached 177 00:10:46,400 --> 00:10:50,520 Speaker 1: sound like? Going into this evening, it seems that we 178 00:10:50,559 --> 00:10:53,280 Speaker 1: have made some progress on the size of the actual 179 00:10:53,320 --> 00:10:56,800 Speaker 1: recovery funds with these three nine billion in grants being 180 00:10:56,800 --> 00:11:00,480 Speaker 1: proposed to by Chean Michel, the Council President. But as 181 00:11:00,520 --> 00:11:03,280 Speaker 1: you just outlined, I think the question of kind of scrutiny, 182 00:11:03,360 --> 00:11:06,280 Speaker 1: let's say, for you know, economic reforms on the ground, 183 00:11:06,600 --> 00:11:08,840 Speaker 1: as well as the question of the rule of law 184 00:11:08,880 --> 00:11:11,640 Speaker 1: when we're looking at the overall budget for Europe that 185 00:11:11,800 --> 00:11:13,840 Speaker 1: is obviously still very much in the open and I 186 00:11:13,880 --> 00:11:15,720 Speaker 1: think that's what we should be focusing on in the 187 00:11:15,840 --> 00:11:18,959 Speaker 1: in the coming hours. Dr Nichol. There are there been 188 00:11:19,040 --> 00:11:22,479 Speaker 1: changes since World War Two and how Europe does business, 189 00:11:22,480 --> 00:11:25,320 Speaker 1: how Europe gets along. Is this one of those changes 190 00:11:25,679 --> 00:11:29,840 Speaker 1: or is that asking too much? I think I think 191 00:11:29,880 --> 00:11:31,320 Speaker 1: that's a good way of looking at it to be, 192 00:11:31,480 --> 00:11:35,400 Speaker 1: to be honest, because this is politically transformative. What what 193 00:11:35,400 --> 00:11:38,000 Speaker 1: what leaders are trying to couple together here. Let's make 194 00:11:38,000 --> 00:11:40,200 Speaker 1: no mistake in terms of the overall size of the 195 00:11:40,200 --> 00:11:42,920 Speaker 1: money that we're looking at, it probably won't be enough, 196 00:11:43,040 --> 00:11:45,240 Speaker 1: So we'll be back to to to this point what 197 00:11:45,440 --> 00:11:47,439 Speaker 1: in a couple of months, in a in a year 198 00:11:47,520 --> 00:11:50,400 Speaker 1: or two from now. But I think the politically transformative 199 00:11:50,480 --> 00:11:53,120 Speaker 1: moment is this idea of going to the to the 200 00:11:53,160 --> 00:11:57,080 Speaker 1: market together as the European Union showing solidarity and also 201 00:11:57,120 --> 00:12:01,240 Speaker 1: applying greater scrutiny for economic reform in those in those 202 00:12:01,240 --> 00:12:03,319 Speaker 1: member states that are receiving the funds. So I think 203 00:12:03,320 --> 00:12:06,400 Speaker 1: we shouldn't underestimate the political importance of what's going on 204 00:12:06,440 --> 00:12:08,080 Speaker 1: here right now. That seems to be the argument from 205 00:12:08,080 --> 00:12:10,640 Speaker 1: market participants as well, casting that it's not about size, 206 00:12:10,640 --> 00:12:13,000 Speaker 1: it's about signal. And if this isn't enough, we've got 207 00:12:13,040 --> 00:12:16,200 Speaker 1: a mechanism to come back and do it again. That's 208 00:12:16,200 --> 00:12:20,280 Speaker 1: the takeaway. Overwhelmingly, that's the consensus. Custon. Do you believe 209 00:12:20,320 --> 00:12:22,480 Speaker 1: that's the case. Is there any reason to believe that 210 00:12:22,480 --> 00:12:25,240 Speaker 1: this is just a one off? No? No, I think 211 00:12:25,240 --> 00:12:29,480 Speaker 1: that is the case, because you know, setting precedent in 212 00:12:29,520 --> 00:12:31,560 Speaker 1: the in the process of European integration, if you look 213 00:12:31,600 --> 00:12:35,360 Speaker 1: at it historically, UM, it has has always been very important. 214 00:12:35,720 --> 00:12:37,520 Speaker 1: That of course, doesn't mean and I think that's the 215 00:12:37,559 --> 00:12:39,920 Speaker 1: warning sign. That doesn't mean that the next round and 216 00:12:39,960 --> 00:12:42,240 Speaker 1: the next steps that are still ahead of us will 217 00:12:42,280 --> 00:12:45,320 Speaker 1: happen without conflict. Right So it doesn't mean that we're 218 00:12:45,320 --> 00:12:50,040 Speaker 1: getting a deal today that basically sorts everything out going forward. Um. 219 00:12:50,080 --> 00:12:53,800 Speaker 1: The closer we integrate, the more political conflict will play 220 00:12:53,800 --> 00:12:55,640 Speaker 1: out on the European stage, and I think we're getting 221 00:12:55,640 --> 00:12:58,360 Speaker 1: a first stage, the first taste of that already in 222 00:12:58,400 --> 00:13:02,599 Speaker 1: these negotiations right now, of via concept tom politically transformative 223 00:13:02,640 --> 00:13:05,800 Speaker 1: another way of saying, is it a Hamiltonian moment and 224 00:13:05,840 --> 00:13:08,280 Speaker 1: the question of the frugal four and how they really 225 00:13:08,320 --> 00:13:11,920 Speaker 1: feel towards the Southern states. Have there been any material 226 00:13:12,200 --> 00:13:16,160 Speaker 1: concessions on the part of their attitude toward some of 227 00:13:16,200 --> 00:13:19,240 Speaker 1: the southern states, and talking about Italy and Spain that 228 00:13:19,400 --> 00:13:24,560 Speaker 1: are transformative in these negotiations, Carson, I think what is 229 00:13:24,559 --> 00:13:28,280 Speaker 1: transformative here is the fact that even from the Bastian Cooks, 230 00:13:28,280 --> 00:13:30,600 Speaker 1: the chancel of Austriy Mascult to the Prime Minister of 231 00:13:30,640 --> 00:13:34,920 Speaker 1: the Netherlands, nobody has ever questioned the very idea of 232 00:13:34,920 --> 00:13:37,120 Speaker 1: a recovery fund. That to me is the main, the 233 00:13:37,160 --> 00:13:40,320 Speaker 1: main movement. We're fighting over, you know, five billion in 234 00:13:40,360 --> 00:13:43,920 Speaker 1: Grandson in grants, we're fighting over the exact level of 235 00:13:43,920 --> 00:13:46,880 Speaker 1: scrutiny and the government's mechanism to I'm sure that that's 236 00:13:46,880 --> 00:13:50,000 Speaker 1: all good, that's that's all fine, But the very idea 237 00:13:50,080 --> 00:13:52,960 Speaker 1: that in this exceptional situation the North of Europe that 238 00:13:53,080 --> 00:13:55,480 Speaker 1: depends so heavily on the Single Market has to show 239 00:13:55,520 --> 00:13:58,560 Speaker 1: solidarity with itself that had never really been questioned. And 240 00:13:58,600 --> 00:14:00,640 Speaker 1: I think that to me is the is the change here, 241 00:14:01,120 --> 00:14:04,760 Speaker 1: But Carson, this is important. Is Brussels changed by this 242 00:14:05,160 --> 00:14:08,880 Speaker 1: or is another bare way until the next meeting. I 243 00:14:08,920 --> 00:14:12,640 Speaker 1: think the most important thing that's changing is members states politics, 244 00:14:12,640 --> 00:14:14,880 Speaker 1: domestic politics and the member states. And we've seen that 245 00:14:14,960 --> 00:14:17,960 Speaker 1: over the last five to ten years everywhere across Europe. 246 00:14:17,960 --> 00:14:20,280 Speaker 1: Were usually focused on the bad news, the rise of 247 00:14:20,320 --> 00:14:22,760 Speaker 1: populism and so on and so forth, but you've also 248 00:14:22,800 --> 00:14:24,560 Speaker 1: seen I mean, if you look at France, for instance, 249 00:14:24,560 --> 00:14:27,040 Speaker 1: the emergence you know of of a staunchly pro European 250 00:14:27,120 --> 00:14:29,640 Speaker 1: leader like like McCall, the change of heart that we've 251 00:14:29,640 --> 00:14:31,960 Speaker 1: seen from Angela Machael in Germany on the last meters 252 00:14:31,960 --> 00:14:34,920 Speaker 1: of her chansonship, that is, that is encouraging news. And 253 00:14:34,960 --> 00:14:37,080 Speaker 1: so to me, the most important thing is what happened, 254 00:14:37,200 --> 00:14:39,640 Speaker 1: is what's happening in the party systems of the most 255 00:14:39,680 --> 00:14:42,640 Speaker 1: important member states, and they're indeed things have been happening. 256 00:14:42,680 --> 00:14:44,280 Speaker 1: Cars and I hear you. The debate is about the 257 00:14:44,320 --> 00:14:46,800 Speaker 1: size of this is not about the concept, and just 258 00:14:46,840 --> 00:14:48,880 Speaker 1: by the very nature of the conversation right now. That 259 00:14:49,000 --> 00:14:51,960 Speaker 1: is progress for the Europeans. On the final question though 260 00:14:51,960 --> 00:14:54,360 Speaker 1: about the s evening, this has to be ratified at 261 00:14:54,400 --> 00:14:57,200 Speaker 1: home for Prime Minister Rutter. How hard is he going 262 00:14:57,200 --> 00:14:59,640 Speaker 1: to be this evening when it comes to strings attached 263 00:14:59,800 --> 00:15:02,720 Speaker 1: to the grants they'll hand out. Yeah, I think that 264 00:15:02,800 --> 00:15:05,080 Speaker 1: will be. That will be the key thing, of course, 265 00:15:05,120 --> 00:15:06,880 Speaker 1: because he needs to be able to go home to 266 00:15:06,920 --> 00:15:09,520 Speaker 1: the Netherlands and remember that we're going into an election 267 00:15:09,600 --> 00:15:13,760 Speaker 1: year the marche Um and he's under massive pressure, of 268 00:15:13,760 --> 00:15:16,120 Speaker 1: course from from the populist power right at home. So 269 00:15:16,160 --> 00:15:17,520 Speaker 1: he needs to be able to go home and say 270 00:15:17,560 --> 00:15:19,560 Speaker 1: we're not just putting money on the table, but we're 271 00:15:19,560 --> 00:15:22,600 Speaker 1: actually gaining influence in the direction of better and more 272 00:15:22,640 --> 00:15:25,160 Speaker 1: sustainable economic policies in the South. And if you can 273 00:15:25,200 --> 00:15:26,960 Speaker 1: say that, then I think that's the pathway to would 274 00:15:26,960 --> 00:15:29,720 Speaker 1: deal casta Nicol that's and no Intelligence Deputy Director of 275 00:15:29,880 --> 00:15:35,240 Speaker 1: RESET first all that Dr Furman could join us, uh 276 00:15:35,320 --> 00:15:38,480 Speaker 1: this morning. There's never been an Act ten, whether you 277 00:15:38,560 --> 00:15:42,400 Speaker 1: do it virtual or in class, Jason this fall that 278 00:15:42,640 --> 00:15:46,760 Speaker 1: has the magnitude of the changes we're seeing. How will 279 00:15:46,800 --> 00:15:50,960 Speaker 1: we come out of these magnitude of changes, the magnitude 280 00:15:50,960 --> 00:15:57,800 Speaker 1: of fiscal policy, the magnitude of monetary intrusion into our system. Well, 281 00:15:57,800 --> 00:15:59,600 Speaker 1: first of all, will come out a lot better if 282 00:15:59,640 --> 00:16:03,200 Speaker 1: we have a big magnitude. Then if we don't have 283 00:16:03,600 --> 00:16:07,720 Speaker 1: a big magnitude, all the evidence of the last experience 284 00:16:07,800 --> 00:16:13,840 Speaker 1: we had was going early, going big. You don't regret that, Um, 285 00:16:13,920 --> 00:16:16,760 Speaker 1: you never regret that. I think a second thing, Tom, 286 00:16:16,840 --> 00:16:19,320 Speaker 1: is we have to admit we're just uncertain. We don't 287 00:16:19,320 --> 00:16:21,920 Speaker 1: know the path this virus is going to take. We 288 00:16:21,960 --> 00:16:25,000 Speaker 1: don't know you know, what the pace of the recovery 289 00:16:25,080 --> 00:16:27,480 Speaker 1: is going to be. It's very different in different states, 290 00:16:27,880 --> 00:16:30,520 Speaker 1: and you need to build that uncertainty into your policy. 291 00:16:30,600 --> 00:16:35,600 Speaker 1: Have it just automatically based on economic condition. We have 292 00:16:35,640 --> 00:16:39,720 Speaker 1: a labor economics. Dr Furman did his move from furlough 293 00:16:40,080 --> 00:16:44,120 Speaker 1: to I think layoff to now outright firings give us 294 00:16:44,160 --> 00:16:46,640 Speaker 1: the tone you see in the American labor economy in 295 00:16:46,640 --> 00:16:52,120 Speaker 1: the coming months. Will there be a wave of terminations, yeah, Tom, 296 00:16:52,120 --> 00:16:56,680 Speaker 1: I think there's two downturns. One is the temporary layoff 297 00:16:56,760 --> 00:17:01,480 Speaker 1: downturn that's like a natural disaster, and that's been getting 298 00:17:01,520 --> 00:17:05,680 Speaker 1: better quickly. There's a second downturn, though, which is people 299 00:17:05,680 --> 00:17:09,320 Speaker 1: who have been fired, people whose businesses have gone bankrupt. 300 00:17:09,880 --> 00:17:14,240 Speaker 1: That downturn is getting worse a little bit every month. 301 00:17:14,720 --> 00:17:18,880 Speaker 1: The fact that we're still seeing two million people claiming 302 00:17:18,960 --> 00:17:24,960 Speaker 1: unemployment insurance, including the pandemic unemployment insurance, every week months 303 00:17:25,000 --> 00:17:29,639 Speaker 1: after the shutdown, is very worrying about that second recession, 304 00:17:29,840 --> 00:17:32,560 Speaker 1: which is sort of a normal recession and one that 305 00:17:32,640 --> 00:17:36,600 Speaker 1: won't solve itself very quickly. Jason, Given the fact that 306 00:17:36,600 --> 00:17:38,680 Speaker 1: we do not seem to be having the virus fully 307 00:17:38,720 --> 00:17:41,040 Speaker 1: under control in the United States, given the fact that 308 00:17:41,080 --> 00:17:44,920 Speaker 1: we've seen record numbers of cases over the past few weeks, 309 00:17:44,920 --> 00:17:48,720 Speaker 1: how concerned are you about also an accelerating wave of bankruptcies, 310 00:17:48,760 --> 00:17:51,359 Speaker 1: because some people are suggesting perhaps we've seen the peak 311 00:17:51,640 --> 00:17:56,720 Speaker 1: when it comes to default. I'm worried about I mean, 312 00:17:56,760 --> 00:18:00,400 Speaker 1: I mean, look, first of all, ultimately, bankruptcies are one 313 00:18:00,440 --> 00:18:03,720 Speaker 1: of the functional things in the American economic system. We're 314 00:18:03,720 --> 00:18:06,680 Speaker 1: better at bankruptcies and other countries we're better at having 315 00:18:06,720 --> 00:18:10,919 Speaker 1: companies operate within it um that being had. If a 316 00:18:10,920 --> 00:18:13,560 Speaker 1: lot of companies go bankrupt at once, if they don't 317 00:18:13,600 --> 00:18:17,800 Speaker 1: have the financing to get through the bankruptcy and continue operating, 318 00:18:18,240 --> 00:18:21,000 Speaker 1: that's what I'm really worried about and so want this. 319 00:18:21,520 --> 00:18:24,000 Speaker 1: You know, for some companies, maybe the airlines should go 320 00:18:24,119 --> 00:18:26,720 Speaker 1: through bankruptcy. That might be the right way to handle 321 00:18:27,280 --> 00:18:29,879 Speaker 1: um their situation, but it would need to be done 322 00:18:30,359 --> 00:18:33,360 Speaker 1: in an orderly and managed way. And yes, I think 323 00:18:33,359 --> 00:18:35,480 Speaker 1: there's a lot more of them ahead of us, Jason, 324 00:18:35,520 --> 00:18:38,480 Speaker 1: can you link the extension of the six hundred dollars 325 00:18:38,520 --> 00:18:42,280 Speaker 1: of enhanced unemployment benefits with the corporate health of America? 326 00:18:42,359 --> 00:18:46,320 Speaker 1: This idea that corporate profitability has been bolstered by those 327 00:18:46,440 --> 00:18:49,760 Speaker 1: enhancement employment benefits? How much could that be threatened if 328 00:18:49,760 --> 00:18:55,880 Speaker 1: there isn't an extension A lot. This is an amazing 329 00:18:56,520 --> 00:18:59,679 Speaker 1: downturn where there's a huge hit to the U s 330 00:18:59,680 --> 00:19:04,000 Speaker 1: eCOM ME, but consumer spending is right back where it 331 00:19:04,160 --> 00:19:08,560 Speaker 1: was twelve months ago. Why is that? That's because disposable 332 00:19:08,600 --> 00:19:11,600 Speaker 1: personal income is right back where it was, if not 333 00:19:11,680 --> 00:19:14,040 Speaker 1: a little bit higher than it was twelve months ago. 334 00:19:14,640 --> 00:19:18,879 Speaker 1: Why has income not fallen because of those unemployment insurance benefits? 335 00:19:18,920 --> 00:19:22,200 Speaker 1: So um, this is a recession completely unlike the last 336 00:19:22,200 --> 00:19:25,960 Speaker 1: one where you saw a huge decline UM in consumer spending. 337 00:19:26,080 --> 00:19:29,840 Speaker 1: Here we've had the v shaped recovering consumer spending. It's 338 00:19:29,880 --> 00:19:33,160 Speaker 1: been supported by the unemployment benefits um If they went 339 00:19:33,200 --> 00:19:34,919 Speaker 1: away right now, it would be a big blow to 340 00:19:34,960 --> 00:19:38,400 Speaker 1: the economent Jason, what's so interesting here is if it's 341 00:19:38,400 --> 00:19:41,760 Speaker 1: a natural disaster, and if we can be optimistic that 342 00:19:41,840 --> 00:19:44,160 Speaker 1: there will be a cure, there will be a better America, 343 00:19:44,200 --> 00:19:47,639 Speaker 1: there'll be a better health, etcetera. What portion of the 344 00:19:47,760 --> 00:19:52,000 Speaker 1: slowdown is strictly exogenous and drifts away or is any 345 00:19:52,040 --> 00:19:54,760 Speaker 1: of it indogenous? And we really have to worry about 346 00:19:54,800 --> 00:19:59,840 Speaker 1: an effect, a permanent effect on the American economy. I 347 00:20:00,000 --> 00:20:03,399 Speaker 1: am worried that that natural disaster covers part of what 348 00:20:03,440 --> 00:20:07,560 Speaker 1: we're seeing, But then you get the additional induced sort 349 00:20:07,560 --> 00:20:12,560 Speaker 1: of normal recession that that causes. And you know, I 350 00:20:12,640 --> 00:20:15,520 Speaker 1: have in my head a model where we get back 351 00:20:16,240 --> 00:20:19,800 Speaker 1: about half of what we lost or two thirds of 352 00:20:19,840 --> 00:20:23,399 Speaker 1: what we lost relatively quickly, and then the rest of 353 00:20:23,440 --> 00:20:27,520 Speaker 1: it is a slog that takes years. So you know, 354 00:20:27,720 --> 00:20:29,800 Speaker 1: just six digits. I don't want to pin you down here, 355 00:20:29,840 --> 00:20:32,160 Speaker 1: but how much stimulus do we need in the next 356 00:20:32,160 --> 00:20:35,280 Speaker 1: couple of weeks. We've got an operative number of one trillion, 357 00:20:35,640 --> 00:20:38,160 Speaker 1: maybe one and a half trillion. We see a deficit 358 00:20:38,200 --> 00:20:40,280 Speaker 1: out to four trillion. I mean, of those good numbers 359 00:20:40,320 --> 00:20:45,080 Speaker 1: to you, are we low ball in the need? You know, 360 00:20:45,119 --> 00:20:48,760 Speaker 1: if you did a well designed piece of legislation, I 361 00:20:48,840 --> 00:20:53,640 Speaker 1: think about one point five trillion would be sufficient. If 362 00:20:53,640 --> 00:20:56,639 Speaker 1: you throw in a bunch of nonsense which is likely 363 00:20:56,680 --> 00:21:01,320 Speaker 1: to happen in Congress, and then you probably need brilliant 364 00:21:01,640 --> 00:21:05,400 Speaker 1: Did you see how the professor from Harvard demigrates our politicians, 365 00:21:05,480 --> 00:21:08,200 Speaker 1: calling it in a bunch of nonsense that doesn't happen 366 00:21:08,200 --> 00:21:10,439 Speaker 1: in the United Kingdom. Well, he's not in government anymore, 367 00:21:10,440 --> 00:21:12,479 Speaker 1: so it doesn't have to be as diplomatic, does he 368 00:21:12,520 --> 00:21:14,320 Speaker 1: Isn't that the cheap guy to all this? Once you leave, 369 00:21:14,359 --> 00:21:19,720 Speaker 1: Tommy can say, Jason, carry on. Just to be clear, 370 00:21:19,800 --> 00:21:21,119 Speaker 1: by the way, I think the bulk of what's going 371 00:21:21,160 --> 00:21:25,520 Speaker 1: to be in there is gonna be good. Some other stuff, 372 00:21:25,680 --> 00:21:27,359 Speaker 1: don't wait, Jason, if we quote you will put that 373 00:21:27,400 --> 00:21:29,760 Speaker 1: on the end. We promise, just to wrap things up, Jason, 374 00:21:29,800 --> 00:21:32,280 Speaker 1: the experience of the last ten years, the nature of 375 00:21:32,359 --> 00:21:34,879 Speaker 1: that particular crisis was so different to the nature of 376 00:21:34,920 --> 00:21:37,280 Speaker 1: this one. Are there any lessons learned from a very 377 00:21:37,280 --> 00:21:40,680 Speaker 1: shallow recovery in the previous ten years? For the recovery 378 00:21:40,680 --> 00:21:42,960 Speaker 1: we were about to endure the one in front of us. Now, 379 00:21:44,680 --> 00:21:47,720 Speaker 1: there were some things we could have done, stating local 380 00:21:47,760 --> 00:21:50,800 Speaker 1: governments continued to cut back, it took about half a 381 00:21:50,840 --> 00:21:53,679 Speaker 1: point of growth. Need to make sure they continue to 382 00:21:53,720 --> 00:21:58,679 Speaker 1: be supported. Left time the stimulus ended prematurely. Need to 383 00:21:58,720 --> 00:22:03,280 Speaker 1: continue it as long as it needed. But you know, 384 00:22:03,359 --> 00:22:05,520 Speaker 1: I think there may be some sort of speed limit 385 00:22:05,560 --> 00:22:08,320 Speaker 1: to how quickly people can reconnect to jobs, even if 386 00:22:08,320 --> 00:22:11,919 Speaker 1: you have a lot of demand. And so, you know, 387 00:22:12,000 --> 00:22:16,840 Speaker 1: we just need to be prepared for a lengthy recovery process, 388 00:22:17,040 --> 00:22:19,240 Speaker 1: but do our best to speed it. One final question. 389 00:22:19,280 --> 00:22:21,480 Speaker 1: You know the work of Jared Bernstein and others assisting 390 00:22:21,600 --> 00:22:25,240 Speaker 1: Vice President Biden. His Vice President Biden called upon you 391 00:22:25,359 --> 00:22:30,520 Speaker 1: for analysis of his new economic policy. I'm certainly in 392 00:22:30,560 --> 00:22:34,399 Speaker 1: touch with people in the Biden camp, but um, you know, 393 00:22:34,520 --> 00:22:36,320 Speaker 1: they think they have a lot of good ideas. You 394 00:22:36,359 --> 00:22:40,000 Speaker 1: didn't tell him it was a bunch of nonsense. Uh, 395 00:22:40,160 --> 00:22:42,399 Speaker 1: you know, like like everything, there are things I like, 396 00:22:42,600 --> 00:22:45,280 Speaker 1: what I like, parts they don't like. Jason will let 397 00:22:45,320 --> 00:22:46,639 Speaker 1: you go. It's always great to catch you with the 398 00:22:46,760 --> 00:22:52,000 Speaker 1: Jayson firm and that of the Hobbit Kennedy School. Daniel lives. 399 00:22:52,280 --> 00:22:55,240 Speaker 1: These would Wedbush Securities, and as you know, folks has 400 00:22:55,280 --> 00:22:58,160 Speaker 1: been quite optimistic. You know, it's by the dip, Dan, 401 00:22:58,280 --> 00:23:00,800 Speaker 1: It's all there is to it. Where do you buy 402 00:23:00,840 --> 00:23:05,280 Speaker 1: a dip? How do you judge that? As a fundamental analyst, Yeah, 403 00:23:05,320 --> 00:23:08,600 Speaker 1: it's a great question. And I fundamentally view that the 404 00:23:08,800 --> 00:23:11,639 Speaker 1: stocks in terms of fang and tech, there's still a 405 00:23:11,720 --> 00:23:15,520 Speaker 1: twenty plus move higher over the next six to nine months. 406 00:23:15,560 --> 00:23:18,000 Speaker 1: It looks at the secular growth stories and right now, 407 00:23:18,000 --> 00:23:21,000 Speaker 1: if you look at cloud, e commerce and some other 408 00:23:21,080 --> 00:23:23,760 Speaker 1: areas of tech, you're really seeing a lot of these 409 00:23:23,800 --> 00:23:27,360 Speaker 1: growth stories accelerated by twelve et months and in my opinion, 410 00:23:27,359 --> 00:23:31,080 Speaker 1: the rereading protect is still in the middle innings. So Dan, 411 00:23:31,200 --> 00:23:34,000 Speaker 1: let's go exactly the are to a cloud computing is 412 00:23:34,040 --> 00:23:36,760 Speaker 1: that the main driver of some of the gains to 413 00:23:36,840 --> 00:23:39,040 Speaker 1: come that you're expecting. And of course this comes ahead 414 00:23:39,080 --> 00:23:43,000 Speaker 1: of IBM reporting earnings after the bell Microsoft Wednesday, and 415 00:23:43,040 --> 00:23:45,639 Speaker 1: then the week after with Google and Amazon and the rest. 416 00:23:47,240 --> 00:23:49,760 Speaker 1: I think right now the post of job for cloud 417 00:23:49,800 --> 00:23:52,320 Speaker 1: continues to be in the Dell and Microsoft, and that's 418 00:23:52,320 --> 00:23:54,280 Speaker 1: why I think that's a stock. Ultimately it's gonna be 419 00:23:54,320 --> 00:23:58,040 Speaker 1: two trillion as we go into next year. You look 420 00:23:58,119 --> 00:24:01,400 Speaker 1: what's happening in terms of growth, the only of workwords 421 00:24:01,400 --> 00:24:04,359 Speaker 1: from the cloud today that's going to next two years 422 00:24:04,359 --> 00:24:08,720 Speaker 1: getting accelerated because of the COVID pandemic. You look at Microsoft, 423 00:24:08,840 --> 00:24:12,439 Speaker 1: the a wuspiece for Amazon, look at GCP for Google. 424 00:24:12,520 --> 00:24:15,720 Speaker 1: These are keys to some of the reratings on valuations 425 00:24:15,760 --> 00:24:18,040 Speaker 1: of big tech, and it speaks to a broader theme. 426 00:24:18,560 --> 00:24:21,439 Speaker 1: There's a lack of secular growth stories out there, and 427 00:24:21,480 --> 00:24:24,440 Speaker 1: that's why, in my opinion, tech the path still much 428 00:24:24,560 --> 00:24:28,280 Speaker 1: higher even despite some of these speed bumps, and of 429 00:24:28,320 --> 00:24:31,160 Speaker 1: course the haters will continue to hate the route. Dan 430 00:24:31,320 --> 00:24:34,000 Speaker 1: some people saying that Amazon's growth leaves it out of 431 00:24:34,080 --> 00:24:37,639 Speaker 1: path to be bigger than the entire global retail sector combined. 432 00:24:38,160 --> 00:24:41,159 Speaker 1: Question is this a retail company or is this a 433 00:24:41,160 --> 00:24:45,240 Speaker 1: cloud computing company? Given where its profits are coming from. 434 00:24:45,280 --> 00:24:48,479 Speaker 1: I mean, from a profit it's obviously cloud. Uh. You know, 435 00:24:48,640 --> 00:24:51,000 Speaker 1: of course e commerce and claud that's been one two 436 00:24:51,040 --> 00:24:54,679 Speaker 1: punch and that's why what's made them so unique and 437 00:24:54,720 --> 00:24:57,680 Speaker 1: obviously will be a focus next week where when they're 438 00:24:58,200 --> 00:25:00,280 Speaker 1: in front of Congress. But I think if you look 439 00:25:00,320 --> 00:25:02,280 Speaker 1: at the next leg of the story, and I think 440 00:25:02,280 --> 00:25:04,400 Speaker 1: part of the rerating. It's not just the e commerce, 441 00:25:04,440 --> 00:25:06,560 Speaker 1: it is cloud in terms of on the A w 442 00:25:06,760 --> 00:25:08,800 Speaker 1: S side, we believe a trillion hours is going to 443 00:25:08,840 --> 00:25:11,720 Speaker 1: be spending cloud over the next decade. And that's why 444 00:25:11,760 --> 00:25:14,680 Speaker 1: you're seeing not just Microsoft AWS, but the whole work 445 00:25:14,720 --> 00:25:18,080 Speaker 1: from home space and a lot even cybersecurity memes that 446 00:25:18,119 --> 00:25:21,440 Speaker 1: continue to see all time hives here, Dann, I look 447 00:25:21,440 --> 00:25:24,120 Speaker 1: at Apple, but I know they each got their own story. 448 00:25:24,640 --> 00:25:29,600 Speaker 1: Are these companies under owned or over owned by institutions? 449 00:25:31,000 --> 00:25:35,120 Speaker 1: I think institutionally speaking, it's still a bit under own. 450 00:25:35,640 --> 00:25:38,480 Speaker 1: I think many have been skeptical of the rallies, and 451 00:25:38,560 --> 00:25:40,240 Speaker 1: I think when I look at Apple, I think that 452 00:25:40,400 --> 00:25:43,080 Speaker 1: is the next leg because when you go into iPhone twelve, 453 00:25:43,080 --> 00:25:45,720 Speaker 1: but I still think the super psycho and extended one. 454 00:25:46,359 --> 00:25:50,000 Speaker 1: I ultimately think from a rerating perspective, that's something where 455 00:25:50,280 --> 00:25:53,119 Speaker 1: both case were at five five on Apple, and I 456 00:25:53,119 --> 00:25:56,920 Speaker 1: think institutionally you're starting to start seem more buying as 457 00:25:56,960 --> 00:25:59,679 Speaker 1: you get some of these quarters. Let's stop here. This 458 00:25:59,760 --> 00:26:03,120 Speaker 1: is really important. Dan I has explained to our audience 459 00:26:03,200 --> 00:26:07,040 Speaker 1: the pressure to own a given stay how blue chip 460 00:26:07,080 --> 00:26:10,480 Speaker 1: company et cetera, like Apple, whatever, the pressure to own 461 00:26:10,520 --> 00:26:13,080 Speaker 1: it if you're an institution, how does that work on 462 00:26:13,200 --> 00:26:17,680 Speaker 1: June thirty, September thirty or twelve thirty one? Yeah, I 463 00:26:17,680 --> 00:26:22,720 Speaker 1: mean especially look so much waiting on the index, you underperform, 464 00:26:22,760 --> 00:26:25,080 Speaker 1: and if you make the bet going against some of 465 00:26:25,119 --> 00:26:28,080 Speaker 1: these names, which has been the wrong bet. Ultimately, as 466 00:26:28,119 --> 00:26:30,399 Speaker 1: a fund manager, you're trying to figure out what fond 467 00:26:30,440 --> 00:26:33,200 Speaker 1: you're using on your resume. So I think that's been 468 00:26:33,240 --> 00:26:36,919 Speaker 1: the issue here, is that the path continues to be 469 00:26:37,040 --> 00:26:41,359 Speaker 1: higher even though the valuation during a new stratosphere. It 470 00:26:41,480 --> 00:26:45,199 Speaker 1: comes down to this is really a new age for technology, 471 00:26:45,440 --> 00:26:47,480 Speaker 1: and that's why you're seeing the strong get stronger in 472 00:26:47,880 --> 00:26:50,560 Speaker 1: terms of the fang names, strong and stronger and a 473 00:26:50,560 --> 00:26:54,760 Speaker 1: lot bigger. At what point does regulatory risk return? And 474 00:26:54,840 --> 00:26:57,280 Speaker 1: I think that's the drum rollings next week when you 475 00:26:57,359 --> 00:27:01,600 Speaker 1: have appearing in front of Congress with Cook, Bezos and 476 00:27:01,640 --> 00:27:04,240 Speaker 1: the others. And I do think that drummill starts to 477 00:27:04,320 --> 00:27:06,879 Speaker 1: increase going into the fall right now streaks you and 478 00:27:07,000 --> 00:27:09,159 Speaker 1: his background noise, but a lot that's also going to 479 00:27:09,240 --> 00:27:12,679 Speaker 1: be the political makeup if you have a Biden presidency 480 00:27:12,680 --> 00:27:15,880 Speaker 1: and the Democratic controlled Senate, that starts to become more 481 00:27:15,880 --> 00:27:18,520 Speaker 1: of a risk right now a background risk because of 482 00:27:18,680 --> 00:27:21,200 Speaker 1: fines that I think next week we'll get a better 483 00:27:21,280 --> 00:27:24,359 Speaker 1: sense in terms of how sharp teeth are in terms 484 00:27:24,359 --> 00:27:26,960 Speaker 1: of pressing this issue. And Dan, we've heard about regulatory 485 00:27:27,040 --> 00:27:28,720 Speaker 1: risk for a long time and it hasn't come to 486 00:27:28,760 --> 00:27:30,720 Speaker 1: the fore in any real policy, certainly not in the 487 00:27:30,800 --> 00:27:34,480 Speaker 1: United States. Which company do you think is most susceptible 488 00:27:34,600 --> 00:27:38,800 Speaker 1: to actual regulatory risk in the next year? Well, I 489 00:27:38,840 --> 00:27:42,440 Speaker 1: think right now it is Amazon and Google. I mean 490 00:27:42,440 --> 00:27:45,119 Speaker 1: those are the one front and center. Of course Apple 491 00:27:45,240 --> 00:27:49,680 Speaker 1: been on the App Store, but especially also what's happening 492 00:27:49,680 --> 00:27:51,760 Speaker 1: in terms of the EU, because it's on both sides 493 00:27:51,800 --> 00:27:54,119 Speaker 1: of the pond in terms of the threats. And I 494 00:27:54,119 --> 00:27:57,120 Speaker 1: think that's also why preemptively you're going to see these 495 00:27:57,119 --> 00:27:59,439 Speaker 1: CEOs get in front of Congress, because I think they 496 00:27:59,480 --> 00:28:01,960 Speaker 1: will be ending a lot of time physically, as was 497 00:28:02,160 --> 00:28:04,879 Speaker 1: virtually in the two or two area code, over the 498 00:28:04,880 --> 00:28:07,280 Speaker 1: next three or six months. Jana, I have thank you 499 00:28:07,320 --> 00:28:10,879 Speaker 1: so much. Thanks for listening to the Bloomberg Surveillance podcast. 500 00:28:11,240 --> 00:28:16,159 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 501 00:28:16,320 --> 00:28:21,040 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom Keane. 502 00:28:21,560 --> 00:28:25,240 Speaker 1: Before the podcast you can always catch us worldwide. I'm 503 00:28:25,280 --> 00:28:26,160 Speaker 1: Bloomberg Radio.