1 00:00:00,120 --> 00:00:02,920 Speaker 1: Brought you by Bank of America Mary Lynch. Investing in 2 00:00:03,000 --> 00:00:07,840 Speaker 1: local communities, economies and a sustainable future. That's the power 3 00:00:08,080 --> 00:00:12,360 Speaker 1: of global connections. Mary Lynch, Pierce Fenner, and Smith Incorporated 4 00:00:12,760 --> 00:00:27,400 Speaker 1: member s I p C. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:27,840 --> 00:00:31,520 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:31,560 --> 00:00:36,600 Speaker 1: insight from the best in economics, finance, investment, and international relations. 7 00:00:37,000 --> 00:00:41,600 Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and 8 00:00:41,680 --> 00:00:49,400 Speaker 1: of course, on the Bloomberg Bomb Formats. Is the vice 9 00:00:49,479 --> 00:00:52,280 Speaker 1: chairman of Kissinger Associate's former Under Secretary of State for 10 00:00:52,320 --> 00:00:54,960 Speaker 1: Economic Growth, Energy, and the Environment. He joins us now 11 00:00:54,960 --> 00:00:57,400 Speaker 1: in Bloomberg eleven three studios. But I'm good to see you, 12 00:00:57,400 --> 00:00:59,200 Speaker 1: good to be here as always. Let's start with this 13 00:00:59,280 --> 00:01:01,720 Speaker 1: meeting in Florida. Uh, we've seen the president try to 14 00:01:01,720 --> 00:01:04,200 Speaker 1: forge priest relationships with world leaders a few times now 15 00:01:04,600 --> 00:01:08,160 Speaker 1: since he took office. What's gonna be particularly different about 16 00:01:08,160 --> 00:01:12,080 Speaker 1: this encounter in Florida. Well, he's going to have to 17 00:01:12,120 --> 00:01:17,080 Speaker 1: take the measure of President Shijin Ping, who's a very formidable, 18 00:01:17,280 --> 00:01:21,720 Speaker 1: very skillful, very authoritative guy. He knows what he's doing. 19 00:01:21,800 --> 00:01:24,440 Speaker 1: He's been in office for quite some time, he has 20 00:01:24,480 --> 00:01:27,040 Speaker 1: a lot of power. He knows that he wants to 21 00:01:27,080 --> 00:01:31,280 Speaker 1: get out of this meeting, and I think Donald Trump 22 00:01:31,319 --> 00:01:32,800 Speaker 1: is going to have to do a lot of listening. 23 00:01:32,800 --> 00:01:35,839 Speaker 1: He doesn't know much about China, and I suspect Hijin 24 00:01:35,920 --> 00:01:39,480 Speaker 1: Ping will make a number of points about Chinese policy 25 00:01:39,600 --> 00:01:43,440 Speaker 1: that may be new to Trump's ears. So I think 26 00:01:43,440 --> 00:01:46,320 Speaker 1: it would be useful. I know Chijin Ping reasonably well. 27 00:01:46,319 --> 00:01:48,080 Speaker 1: I've met him a number of times. He's a very 28 00:01:48,080 --> 00:01:52,960 Speaker 1: impressive person and a very a very strong figure, and 29 00:01:53,520 --> 00:01:57,400 Speaker 1: he will be articulate in explaining China's views. Where China 30 00:01:57,440 --> 00:02:00,360 Speaker 1: can work with the US and where China feel it 31 00:02:00,440 --> 00:02:02,800 Speaker 1: can't work with the US. There are various areas. I 32 00:02:02,800 --> 00:02:06,160 Speaker 1: think they do want to work on North Korea. They 33 00:02:06,160 --> 00:02:08,520 Speaker 1: don't have as much influence as we perhaps think they do, 34 00:02:08,560 --> 00:02:10,880 Speaker 1: but they do have some. They certainly want to work 35 00:02:10,880 --> 00:02:13,760 Speaker 1: in dealing with terrorism. They want to work on climate 36 00:02:13,760 --> 00:02:17,280 Speaker 1: to the extent Trump wants to work on climate, and 37 00:02:17,480 --> 00:02:22,560 Speaker 1: they're now developing this very very ambitious, very I think 38 00:02:22,639 --> 00:02:27,560 Speaker 1: positive generally notion of increasing infrastructure in the region, and 39 00:02:27,639 --> 00:02:30,080 Speaker 1: a lot of American companies would like to participate in this. 40 00:02:30,360 --> 00:02:33,640 Speaker 1: The question is is Trump going to be willing to 41 00:02:33,720 --> 00:02:36,560 Speaker 1: allow that kind of participation to occur. So President Trump 42 00:02:36,560 --> 00:02:39,079 Speaker 1: doesn't know China well. On whom is he relying to 43 00:02:38,760 --> 00:02:41,359 Speaker 1: to to inform him on how the country works today? 44 00:02:41,560 --> 00:02:44,240 Speaker 1: He has some very capable people on the National Security 45 00:02:44,280 --> 00:02:48,240 Speaker 1: Council staff that will do this. Uh he He also 46 00:02:48,280 --> 00:02:52,240 Speaker 1: seems to be relying on his son in law, Jared Kushner. 47 00:02:52,280 --> 00:02:56,239 Speaker 1: I don't know how it is in a rock he'll 48 00:02:56,280 --> 00:02:59,120 Speaker 1: be dealing with China. But there are good people on 49 00:02:59,160 --> 00:03:02,280 Speaker 1: the National Secure Council staff, but the State Department is 50 00:03:02,320 --> 00:03:05,919 Speaker 1: not at full complement. A lot of the China experts 51 00:03:05,960 --> 00:03:09,880 Speaker 1: are there in the State Department among Foreign service officers, 52 00:03:09,919 --> 00:03:13,720 Speaker 1: but there is not an Assistant Secretary for the Far East, 53 00:03:13,840 --> 00:03:17,520 Speaker 1: non assistant secretary for many other functions as well. But 54 00:03:17,639 --> 00:03:19,600 Speaker 1: I suspect he'll get some good advice, but he has 55 00:03:19,639 --> 00:03:22,160 Speaker 1: to listen to the advice. He has to understand the 56 00:03:22,240 --> 00:03:26,359 Speaker 1: history of U. S. China relations, and he has to 57 00:03:26,400 --> 00:03:30,680 Speaker 1: measure his words very carefully because he has to be understood. 58 00:03:31,120 --> 00:03:34,040 Speaker 1: And if he appears not to really understand what's going 59 00:03:34,080 --> 00:03:37,320 Speaker 1: on in China, not to have any sense of Chinese history. 60 00:03:37,360 --> 00:03:40,840 Speaker 1: To make statements like he has in the past, I 61 00:03:40,880 --> 00:03:43,360 Speaker 1: think it will cause a lot of confusion. This is 62 00:03:43,360 --> 00:03:47,560 Speaker 1: a very important meeting because almost nothing constructive will be 63 00:03:47,640 --> 00:03:50,280 Speaker 1: dying internationally in the world over the next four to 64 00:03:50,480 --> 00:03:54,360 Speaker 1: eight to twelve years without a substantial measure of US 65 00:03:54,480 --> 00:03:57,840 Speaker 1: Chinese cooperation. He has to figure out a framework with 66 00:03:57,960 --> 00:04:01,960 Speaker 1: President Shooting Ping four. That kind of cooperation China is 67 00:04:02,120 --> 00:04:04,560 Speaker 1: very important. Americans should understand it. You can't push them 68 00:04:04,600 --> 00:04:09,800 Speaker 1: around there there they have strong nationalistic pressures. Internally in China, 69 00:04:09,840 --> 00:04:12,400 Speaker 1: they won't be pushed around. The way you deal with 70 00:04:12,480 --> 00:04:15,480 Speaker 1: them is to work with them in a constructive fashion. 71 00:04:16,000 --> 00:04:18,960 Speaker 1: Trump's negotiating tactics may work in the real estate area, 72 00:04:19,200 --> 00:04:21,719 Speaker 1: they're probably not going to work, almost certainly not going 73 00:04:21,800 --> 00:04:24,440 Speaker 1: to work in dealing with China if he takes that 74 00:04:24,480 --> 00:04:27,760 Speaker 1: sort of pugnacious approach that he sometimes does. Performance. You've 75 00:04:27,760 --> 00:04:29,839 Speaker 1: been partied to meetings like this before, you say, met 76 00:04:29,839 --> 00:04:32,400 Speaker 1: that the Chinese president several times as well. How do 77 00:04:32,480 --> 00:04:35,040 Speaker 1: they unfold what's what's going to happen here? How much 78 00:04:35,160 --> 00:04:37,200 Speaker 1: is the formality going to eclipse the opportunity here for 79 00:04:37,240 --> 00:04:38,719 Speaker 1: these two leaders to get to know each other on 80 00:04:38,720 --> 00:04:40,720 Speaker 1: any sort of personal level. Well, I suspect this will 81 00:04:40,760 --> 00:04:43,240 Speaker 1: be somewhat less formal than the meetings, given the sets 82 00:04:43,320 --> 00:04:45,880 Speaker 1: they were in Washington, given the setting, But they have 83 00:04:46,000 --> 00:04:47,880 Speaker 1: to get to know one another, and the best way 84 00:04:47,880 --> 00:04:52,120 Speaker 1: of doing that is for President Trump to listen to 85 00:04:52,279 --> 00:04:55,119 Speaker 1: President Hinjin Ping and hear what he has to say 86 00:04:56,120 --> 00:04:59,640 Speaker 1: first before weighing in with his thoughts. He can learn 87 00:05:00,400 --> 00:05:03,640 Speaker 1: uh a lot about China from listening to President She 88 00:05:04,240 --> 00:05:06,479 Speaker 1: and then say what he has to say. But the 89 00:05:06,520 --> 00:05:09,320 Speaker 1: United States has a problem. That is, we really don't 90 00:05:09,320 --> 00:05:12,279 Speaker 1: have an Asian strategy yet, we haven't put it together. 91 00:05:12,480 --> 00:05:14,800 Speaker 1: Is it that we want to be tough on trade? 92 00:05:14,880 --> 00:05:18,400 Speaker 1: What is our position in the on the question of 93 00:05:18,440 --> 00:05:21,400 Speaker 1: the islands and the South China Sea? What is our 94 00:05:21,400 --> 00:05:25,320 Speaker 1: position on Korea? The Chinese will have and do have 95 00:05:25,800 --> 00:05:28,640 Speaker 1: a strategy. We may or may not agree with the strategy, 96 00:05:28,680 --> 00:05:30,880 Speaker 1: but they have developed a strategy over a number of 97 00:05:30,920 --> 00:05:34,800 Speaker 1: years for the region and for the world. President She 98 00:05:34,920 --> 00:05:37,839 Speaker 1: announced a lot of that in Davos. We don't have 99 00:05:38,040 --> 00:05:40,640 Speaker 1: one yet, we haven't taken the time to put one together. 100 00:05:41,080 --> 00:05:43,920 Speaker 1: That puts President Trump at a disadvantage. He'll be making 101 00:05:43,920 --> 00:05:46,679 Speaker 1: a number of statements, But the Chinese are gonna wonder 102 00:05:46,960 --> 00:05:49,279 Speaker 1: are they part of a broader strategy or they ad 103 00:05:49,279 --> 00:05:52,920 Speaker 1: hoc and are they going to be follow it up? 104 00:05:52,920 --> 00:05:55,320 Speaker 1: Are they going to be ad hoc and then change 105 00:05:55,560 --> 00:05:57,720 Speaker 1: the next day or the next week, which creates a 106 00:05:57,760 --> 00:06:02,320 Speaker 1: sense of unreliability and and and misunderstanding. Well, what's the 107 00:06:02,360 --> 00:06:04,839 Speaker 1: worst press conference you ever had? Were you on a 108 00:06:04,920 --> 00:06:07,920 Speaker 1: plane traveling somewhere and you said, geez, I wish the 109 00:06:07,960 --> 00:06:12,159 Speaker 1: press wasn't here. Did that ever happen to Ambassador Worm answer? 110 00:06:12,400 --> 00:06:15,280 Speaker 1: I always like the press being there because I think 111 00:06:15,360 --> 00:06:20,039 Speaker 1: you normally could on planes have good conversations with the 112 00:06:20,080 --> 00:06:23,560 Speaker 1: press on an informal, off the record basis and explain 113 00:06:23,640 --> 00:06:28,440 Speaker 1: not just what the policy is or was, but give background. 114 00:06:28,480 --> 00:06:31,719 Speaker 1: And I think it's important to have background so the 115 00:06:31,720 --> 00:06:34,000 Speaker 1: press can understand not just what the policy is, but 116 00:06:34,240 --> 00:06:36,960 Speaker 1: how you got there, what the basis of the policy. Critically, 117 00:06:37,279 --> 00:06:41,520 Speaker 1: is Secretary Tillison's policy a new policy or do you 118 00:06:41,560 --> 00:06:44,760 Speaker 1: look at it as bombing him back to John Hay 119 00:06:44,880 --> 00:06:49,040 Speaker 1: or do you know Secretary Route or whoever. I think 120 00:06:49,160 --> 00:06:52,640 Speaker 1: he would be far better served by bringing the press 121 00:06:52,640 --> 00:06:56,760 Speaker 1: along on his trips. Every Secretary of State I've traveled with, 122 00:06:56,839 --> 00:06:59,680 Speaker 1: and I've traveled with seven or eight of them have 123 00:07:00,040 --> 00:07:07,680 Speaker 1: always starting with Rogers Vote to Panama. That was a 124 00:07:07,720 --> 00:07:11,520 Speaker 1: lovely trip in those days. But you know, with Secretary 125 00:07:11,640 --> 00:07:16,960 Speaker 1: Kissinger and and many other subsequent Secretary Kissinger, they've always 126 00:07:17,480 --> 00:07:20,760 Speaker 1: found a way of working with the press. Not the 127 00:07:20,760 --> 00:07:22,880 Speaker 1: press always agrees with them or they always agree with 128 00:07:22,920 --> 00:07:26,040 Speaker 1: the press, but they were able to use the fact 129 00:07:26,080 --> 00:07:29,520 Speaker 1: that the press was on the plane to give background information, 130 00:07:29,800 --> 00:07:33,480 Speaker 1: not just the policy, but why the policy was put 131 00:07:33,560 --> 00:07:37,600 Speaker 1: forward the way it was. What are the underlying reasons 132 00:07:37,680 --> 00:07:40,600 Speaker 1: for the policy, what are the underlying facts? To give 133 00:07:40,600 --> 00:07:43,320 Speaker 1: the press background so they can write their stories. They 134 00:07:43,360 --> 00:07:45,680 Speaker 1: may agree or not agree, but at least you can 135 00:07:45,720 --> 00:07:48,600 Speaker 1: give them background, get to know them, and it works 136 00:07:48,720 --> 00:07:50,640 Speaker 1: very well. It always worked for me, it always worked 137 00:07:50,680 --> 00:07:53,720 Speaker 1: for a number of the secretaries I've traveled with, and 138 00:07:53,840 --> 00:07:58,440 Speaker 1: I think that the American people deserve to have a 139 00:07:58,560 --> 00:08:02,000 Speaker 1: press traveling with the Secretary of State so they can 140 00:08:02,080 --> 00:08:07,080 Speaker 1: communicate the policies more clearly and thoughtfully and with sufficient background. 141 00:08:07,720 --> 00:08:11,080 Speaker 1: That's does Rex Taylerson have more of a worldview, world 142 00:08:11,080 --> 00:08:13,200 Speaker 1: outlook than this white as you talked about not having 143 00:08:13,200 --> 00:08:15,360 Speaker 1: the strategy here going into this meeting with China at 144 00:08:15,440 --> 00:08:18,840 Speaker 1: least not knowing it. Where's that Where's that strategy being devised? 145 00:08:19,760 --> 00:08:23,920 Speaker 1: I assume it's being devised primarily in the National Security 146 00:08:23,920 --> 00:08:27,480 Speaker 1: Council among National Security Council staff. But if they're wise, 147 00:08:27,680 --> 00:08:31,600 Speaker 1: they will call on the experts in the State Department 148 00:08:31,600 --> 00:08:34,000 Speaker 1: who know China very well. Many of them have served 149 00:08:34,000 --> 00:08:36,559 Speaker 1: a long time in China, and I think they can 150 00:08:36,600 --> 00:08:40,200 Speaker 1: add a great deal to the thought process that goes 151 00:08:40,280 --> 00:08:44,040 Speaker 1: into putting together what the President says and and putting 152 00:08:44,040 --> 00:08:47,280 Speaker 1: together a strategy. If that's indeed what they intend to do. 153 00:08:47,360 --> 00:08:50,360 Speaker 1: But since you don't have a lot of people at 154 00:08:50,440 --> 00:08:53,280 Speaker 1: higher levels, it's become a very difficult process to put 155 00:08:53,280 --> 00:08:56,040 Speaker 1: a strategy together. Let's come back with Ambassador harm Mats 156 00:08:56,040 --> 00:08:58,640 Speaker 1: of Kissinger Associates. Of course, this public service to the 157 00:08:58,679 --> 00:09:04,160 Speaker 1: Obama administration some important thoughts. They're linking uh State Department 158 00:09:04,200 --> 00:09:07,000 Speaker 1: matters into Treasury and fiscal policy. Maybe coming back, we'll 159 00:09:07,040 --> 00:09:10,160 Speaker 1: talk about some of the constraints that any administration were 160 00:09:10,240 --> 00:09:15,040 Speaker 1: to have with the dynamics of our debt and deficits. 161 00:09:15,120 --> 00:09:17,760 Speaker 1: Let's rip up the script. I mean, come on, David, 162 00:09:17,880 --> 00:09:21,640 Speaker 1: you have no sleep. You know your team, one our 163 00:09:21,720 --> 00:09:26,120 Speaker 1: executive producers gonna achieve sainthood. So let's rip up the 164 00:09:26,120 --> 00:09:31,440 Speaker 1: script of Robert Pimtz Bob the French election. We are 165 00:09:31,559 --> 00:09:36,719 Speaker 1: distant from Shirock Mitterran Valerie just started to staying. I 166 00:09:36,800 --> 00:09:39,320 Speaker 1: just got an email from Anthony from Sparta. He wants 167 00:09:39,360 --> 00:09:41,640 Speaker 1: to hear my French. He loved it on TV this 168 00:09:41,679 --> 00:09:48,959 Speaker 1: morning tonight. There's a debate. There's all people debating exact mole. 169 00:09:49,080 --> 00:09:53,280 Speaker 1: They're becoming American like, but they're not. You know, the 170 00:09:53,320 --> 00:09:56,960 Speaker 1: French are not becoming American like. They are not. But 171 00:09:57,200 --> 00:09:59,920 Speaker 1: there is a very bright star on the French horizon. 172 00:10:00,080 --> 00:10:05,640 Speaker 1: Emmanuel mccron. Macron was the economic minister in the alarmed 173 00:10:05,760 --> 00:10:08,680 Speaker 1: government earlier on. I know him very well. He's a 174 00:10:08,760 --> 00:10:12,400 Speaker 1: very good friend. He used to work for Rothschild. He's 175 00:10:12,440 --> 00:10:16,160 Speaker 1: an internationalist. He's a fresh new face on the horizon. 176 00:10:16,679 --> 00:10:19,080 Speaker 1: He's doing very well in the polls and I do 177 00:10:19,240 --> 00:10:22,520 Speaker 1: believe that if he were elected president of France, it 178 00:10:22,559 --> 00:10:25,600 Speaker 1: would be a very positive boost for France and a 179 00:10:25,679 --> 00:10:29,800 Speaker 1: very positive boost for Europe and for French American relations. 180 00:10:29,920 --> 00:10:33,200 Speaker 1: I think he's a new rising star and a very 181 00:10:33,240 --> 00:10:38,320 Speaker 1: positive force on the French political scene. What's the central 182 00:10:38,360 --> 00:10:40,079 Speaker 1: issue here in this election is it? Is it to 183 00:10:40,160 --> 00:10:42,800 Speaker 1: membership in the EU? Can you paint with his broader 184 00:10:42,840 --> 00:10:46,000 Speaker 1: brushes that I think it's much more the economy and 185 00:10:46,040 --> 00:10:48,000 Speaker 1: how to deal with the economy. How to get the 186 00:10:48,080 --> 00:10:52,160 Speaker 1: economy going on a sustained basis, uh that would be 187 00:10:52,240 --> 00:10:55,040 Speaker 1: number one. The second is how to work with the 188 00:10:55,120 --> 00:11:00,880 Speaker 1: other major EU partners. Assuming Merkel is re elected, or 189 00:11:00,920 --> 00:11:03,640 Speaker 1: at least as the head of a coalition that's reelected 190 00:11:03,720 --> 00:11:06,640 Speaker 1: may be different from the one she has now, she 191 00:11:06,679 --> 00:11:09,160 Speaker 1: would be an important partner. The Dutch have come through 192 00:11:09,360 --> 00:11:13,720 Speaker 1: without moving to this populace right that some people feared. 193 00:11:14,320 --> 00:11:16,880 Speaker 1: So it may well be that the rising tide of 194 00:11:16,920 --> 00:11:20,840 Speaker 1: the populace right is now receding, and it would received 195 00:11:20,920 --> 00:11:24,120 Speaker 1: a lot further if Matt Crown were elected. So I 196 00:11:24,160 --> 00:11:26,840 Speaker 1: think working with the other Europeans is important, and also 197 00:11:27,400 --> 00:11:33,480 Speaker 1: strengthening NATO. The French understand. I believe that a strong NATO, 198 00:11:33,760 --> 00:11:37,840 Speaker 1: a coherent EU, strong relationship with the US all are 199 00:11:37,960 --> 00:11:40,680 Speaker 1: very important to the future of France. And you need 200 00:11:40,720 --> 00:11:43,440 Speaker 1: someone who is pragmatic to do that. So bring about 201 00:11:43,520 --> 00:11:45,280 Speaker 1: Uncle a Merca. We last spoke. I think before she 202 00:11:45,280 --> 00:11:47,080 Speaker 1: went to the White House, and we were talking about 203 00:11:47,080 --> 00:11:49,440 Speaker 1: what you were going to be observing as all of 204 00:11:49,480 --> 00:11:52,280 Speaker 1: that unfolded. Uh, I'm sure you watched it. I'm sure 205 00:11:52,280 --> 00:11:54,360 Speaker 1: you listen to the to the press conference after US 206 00:11:54,679 --> 00:11:57,120 Speaker 1: Ambassador Harmon at the steam was coming out of this 207 00:11:57,640 --> 00:12:01,120 Speaker 1: so much. He was melting ice trying to be diplomatic. 208 00:12:01,160 --> 00:12:03,560 Speaker 1: I was trying to be diplomatic. But where where does 209 00:12:03,600 --> 00:12:06,320 Speaker 1: that relationship go from from what we sought the White House? Well, 210 00:12:06,320 --> 00:12:09,480 Speaker 1: what I don't understand is that Trump does not seem 211 00:12:09,559 --> 00:12:14,480 Speaker 1: to have the background, um, the historical background to really 212 00:12:14,559 --> 00:12:18,920 Speaker 1: understand the origins of Native the origins of the EU, 213 00:12:19,080 --> 00:12:22,120 Speaker 1: and why they're so important to the US. The US 214 00:12:22,240 --> 00:12:25,880 Speaker 1: was a great power after World War Two, impart because 215 00:12:25,880 --> 00:12:28,680 Speaker 1: it had a strong economy and a strong military, but 216 00:12:28,760 --> 00:12:33,240 Speaker 1: it was also great power because it developed strong alliances. 217 00:12:33,320 --> 00:12:36,960 Speaker 1: It worked to strengthen European unity, which was important for 218 00:12:37,000 --> 00:12:41,120 Speaker 1: stability in Europe and also to counter the spread of 219 00:12:41,800 --> 00:12:46,320 Speaker 1: Soviet Communism during the Cold War. Now we need Europe 220 00:12:46,360 --> 00:12:49,679 Speaker 1: as a partner, UH, to deal with a number of 221 00:12:49,800 --> 00:12:52,680 Speaker 1: things that Putin is doing in various parts of Europe. 222 00:12:52,679 --> 00:12:58,920 Speaker 1: He's trying to undermine European cohesion cause fragmentation within European 223 00:12:58,960 --> 00:13:02,520 Speaker 1: countries and among them, and certainly in NATO. We need 224 00:13:02,559 --> 00:13:05,760 Speaker 1: a strong Europe to resist that kind of thing. And 225 00:13:05,760 --> 00:13:09,240 Speaker 1: and that's really what he has to understand, that that 226 00:13:09,400 --> 00:13:11,480 Speaker 1: a strong Europe can be a big asset. If you 227 00:13:11,520 --> 00:13:14,120 Speaker 1: want to make America great again, you need to have 228 00:13:14,320 --> 00:13:20,640 Speaker 1: also great allies, great friendships, great partnerships, and that should 229 00:13:20,640 --> 00:13:23,959 Speaker 1: be part of a make America great strategy if that's 230 00:13:24,000 --> 00:13:26,640 Speaker 1: the strategy he wants to pursue. But you're not going 231 00:13:26,679 --> 00:13:29,480 Speaker 1: to be great if you have only a strong economy 232 00:13:29,520 --> 00:13:32,080 Speaker 1: and a strong military and you have weak allies. That 233 00:13:32,160 --> 00:13:34,880 Speaker 1: will not make America great again. He's got to make 234 00:13:34,920 --> 00:13:38,040 Speaker 1: sure our allies are great again. Working with Merkel, working 235 00:13:38,040 --> 00:13:41,760 Speaker 1: with Macrol if he's elected, working with other European leaders 236 00:13:41,840 --> 00:13:44,360 Speaker 1: is very definitely a part of that process, or at 237 00:13:44,440 --> 00:13:48,679 Speaker 1: least should be in the need of strategy for doing it. Ambassador, 238 00:13:48,840 --> 00:13:50,520 Speaker 1: Thank you so much, kind of you to come into 239 00:13:50,720 --> 00:13:54,120 Speaker 1: just so much to talk about um just an extraordinary 240 00:13:54,160 --> 00:13:58,240 Speaker 1: time and the Crystal much more from our Washington News bureau. 241 00:14:10,800 --> 00:14:14,240 Speaker 1: Eli Lake, Who's Bloomberg View column last night came out 242 00:14:14,280 --> 00:14:16,560 Speaker 1: in the afternoon percolated in the afternoon. It really blew 243 00:14:16,640 --> 00:14:20,240 Speaker 1: up about four pm UH last night over Susan Rice 244 00:14:20,280 --> 00:14:25,760 Speaker 1: of the Obama administration requesting the names and documents that 245 00:14:25,800 --> 00:14:28,960 Speaker 1: have been blacked out had been redacted. Mr Lake joins 246 00:14:29,040 --> 00:14:32,360 Speaker 1: us right now, I know David's got some important questions. Eli. 247 00:14:32,720 --> 00:14:36,000 Speaker 1: I look at the Google feed and it's just as 248 00:14:36,040 --> 00:14:40,560 Speaker 1: polarized as you would imagine. Susan Rice unmasked Trump team. 249 00:14:40,600 --> 00:14:43,960 Speaker 1: The latest wire tap bombshell turns out to be another 250 00:14:44,080 --> 00:14:47,680 Speaker 1: dud unmasking reporter. This is bigger than Trump that of 251 00:14:47,720 --> 00:14:51,120 Speaker 1: course some Fox News insider, which is it, Eli Lake? 252 00:14:51,440 --> 00:14:57,560 Speaker 1: Who should take comfort from your Bloomberg view piece? At 253 00:14:57,640 --> 00:15:01,640 Speaker 1: this point, I'm really reluctant to right to say, you 254 00:15:01,680 --> 00:15:03,480 Speaker 1: know where the story is going to end, because I'm 255 00:15:03,480 --> 00:15:08,400 Speaker 1: still reporting it. UM. I think it's important for the 256 00:15:08,400 --> 00:15:13,560 Speaker 1: Trump supporters to recognize that this was a unique situation. 257 00:15:13,720 --> 00:15:19,240 Speaker 1: After the election, there were credible allegations that UM that 258 00:15:19,320 --> 00:15:21,760 Speaker 1: there was credible information I should say, an intelligence community 259 00:15:21,800 --> 00:15:25,600 Speaker 1: had concluded the Russians tried to influence the election. There 260 00:15:25,840 --> 00:15:29,720 Speaker 1: was an active FBI investigation that was confirmed last months 261 00:15:30,240 --> 00:15:33,520 Speaker 1: UH into the Trump campaign to see if they UH 262 00:15:33,680 --> 00:15:37,040 Speaker 1: collaborated in some way with the Russians in this influenced operation. 263 00:15:37,440 --> 00:15:39,400 Speaker 1: Susan Rice would have had to have known about that. 264 00:15:40,000 --> 00:15:43,520 Speaker 1: And even though we my my reporting says that she 265 00:15:43,720 --> 00:15:47,240 Speaker 1: was asking for information to be on mass on us, 266 00:15:47,400 --> 00:15:49,600 Speaker 1: the US person, to be on maths that were affiliated 267 00:15:49,600 --> 00:15:51,160 Speaker 1: with the Trump transition that did not have to do 268 00:15:51,200 --> 00:15:54,280 Speaker 1: with Russia. At the same time, this is the environment, 269 00:15:54,360 --> 00:15:57,800 Speaker 1: the backdrop, and it was relevant in that sense of 270 00:15:57,800 --> 00:16:01,000 Speaker 1: a national in the in the national security sense, particularly 271 00:16:01,080 --> 00:16:02,640 Speaker 1: if we were to believe other reports in the New 272 00:16:02,720 --> 00:16:04,280 Speaker 1: York Times and other places that there was a lot 273 00:16:04,280 --> 00:16:07,960 Speaker 1: of intelligence coming in after the election that did show 274 00:16:08,000 --> 00:16:10,520 Speaker 1: that there were more contacts and meetings and so forth 275 00:16:10,560 --> 00:16:14,440 Speaker 1: between Trump World and Russia. On the other hand, none 276 00:16:14,480 --> 00:16:20,160 Speaker 1: of that has amounted to the impeachable offense of collusion. Uh. 277 00:16:20,200 --> 00:16:22,840 Speaker 1: This has been stated by people like James Clapper, who 278 00:16:22,920 --> 00:16:27,560 Speaker 1: was Barack Obama's Director of National Intelligence. And it appears 279 00:16:27,600 --> 00:16:31,040 Speaker 1: that what we're learning now is that the standard for 280 00:16:31,720 --> 00:16:35,160 Speaker 1: a national security advisor to ask who a U S 281 00:16:35,200 --> 00:16:37,920 Speaker 1: person is who is incidentally collected there's no warrant on 282 00:16:37,960 --> 00:16:40,800 Speaker 1: this person, UH in in a in a routine kind 283 00:16:40,800 --> 00:16:44,280 Speaker 1: of wire tap of a foreign target or criminal target 284 00:16:45,320 --> 00:16:50,160 Speaker 1: is so loose that it pretty much you could you 285 00:16:50,200 --> 00:16:52,440 Speaker 1: could you can pretty much look to see anything and 286 00:16:52,920 --> 00:16:55,920 Speaker 1: you would get your request. It appears fulfilled, which is 287 00:16:55,960 --> 00:16:59,800 Speaker 1: what happened in this National Security Council review that started 288 00:17:00,160 --> 00:17:03,359 Speaker 1: under the Trump administration of this policy known as unmaking. 289 00:17:04,000 --> 00:17:07,040 Speaker 1: And that right there is something that ought to wary 290 00:17:07,200 --> 00:17:11,000 Speaker 1: Democrats as well as Republicans, because right now the president 291 00:17:11,040 --> 00:17:13,840 Speaker 1: of Democrat as a president is Sonald Trump. He's a Republican. 292 00:17:14,280 --> 00:17:18,440 Speaker 1: And if indeed, you know, the rules are so laxed 293 00:17:18,480 --> 00:17:22,480 Speaker 1: that you can uh have a back door loophole to 294 00:17:22,520 --> 00:17:26,520 Speaker 1: go around the very strict procedures for surveilling US persons 295 00:17:26,560 --> 00:17:29,200 Speaker 1: by going to a stupid sport known as the FISA court, well, 296 00:17:29,240 --> 00:17:31,000 Speaker 1: then this is something that Trump could then do to 297 00:17:31,080 --> 00:17:34,680 Speaker 1: his domestic opposition. And Democrats should be interested in geting 298 00:17:34,720 --> 00:17:37,199 Speaker 1: the bombo. And I'm actually happy to say that at 299 00:17:37,280 --> 00:17:40,160 Speaker 1: least the ranking Democrats in the Senate and House Intelligence 300 00:17:40,160 --> 00:17:42,240 Speaker 1: committees are now saying that this is something worth looking 301 00:17:42,240 --> 00:17:45,840 Speaker 1: at you. This is great, Uh, the surveillance and friends, 302 00:17:45,880 --> 00:17:49,040 Speaker 1: I guess that's what we'll call it, David, Right, we 303 00:17:49,080 --> 00:17:52,879 Speaker 1: need a new couch Eli Here's what I'm struggling with. 304 00:17:53,320 --> 00:17:56,080 Speaker 1: You've got the credible information, you've got the FBI investigation, 305 00:17:56,119 --> 00:17:59,560 Speaker 1: you've got the independent reporting by a number of journalism organizations. 306 00:18:00,200 --> 00:18:01,720 Speaker 1: Would there be those who say, look, this is a 307 00:18:01,760 --> 00:18:04,040 Speaker 1: national security advisor looking into something that would have been 308 00:18:04,040 --> 00:18:05,719 Speaker 1: of great concern. You could have outlined this in your 309 00:18:05,760 --> 00:18:09,560 Speaker 1: piece as well. There's nothing here to indicate you're kind 310 00:18:09,560 --> 00:18:11,240 Speaker 1: of alluding to this moment to go that that Susan 311 00:18:11,320 --> 00:18:14,280 Speaker 1: Rice did anything wrong. We're illegal? Am I right in 312 00:18:14,280 --> 00:18:18,320 Speaker 1: reading that correctly? Well? Illegal? I think it's I think 313 00:18:18,720 --> 00:18:20,639 Speaker 1: when I've talked to experts about this, you know the 314 00:18:20,720 --> 00:18:24,480 Speaker 1: law and the procedures, I think it's it's it's legal 315 00:18:24,560 --> 00:18:27,440 Speaker 1: for a natural security advisor to make these unmapped requests, 316 00:18:27,440 --> 00:18:31,120 Speaker 1: and the bar is very low. Improper is a different questions. 317 00:18:31,359 --> 00:18:34,840 Speaker 1: And because this is a key point here, I think 318 00:18:34,880 --> 00:18:39,000 Speaker 1: people are missing. This is stuff that is so shrouded 319 00:18:39,040 --> 00:18:42,680 Speaker 1: in state secrecy. We rarely really get much of an 320 00:18:42,680 --> 00:18:47,000 Speaker 1: insight into how this process works. Every few years, when 321 00:18:47,320 --> 00:18:50,639 Speaker 1: the FIE the law is reauthorized in Congress, there are 322 00:18:50,720 --> 00:18:53,760 Speaker 1: hearings and the leaders of the intelligence community make a 323 00:18:53,800 --> 00:18:56,920 Speaker 1: show of saying that there are great that the intelligence 324 00:18:56,920 --> 00:19:00,200 Speaker 1: community takes great pains to redact the names of s 325 00:19:00,280 --> 00:19:04,840 Speaker 1: persons who were incidentally collected in eavesdropping and monitoring in 326 00:19:04,840 --> 00:19:08,080 Speaker 1: that kind of thing. But if it turns out that 327 00:19:08,160 --> 00:19:12,240 Speaker 1: a political appointee can pretty much request to unmask that 328 00:19:12,359 --> 00:19:16,439 Speaker 1: information at any time, well then it's worth finding you know, 329 00:19:16,720 --> 00:19:19,920 Speaker 1: the origins of this policy, how long this has been 330 00:19:19,920 --> 00:19:22,959 Speaker 1: going on, and hopefully a sense to reform it, So 331 00:19:23,040 --> 00:19:26,679 Speaker 1: I would separate the questions of illegal and improper. And 332 00:19:26,720 --> 00:19:29,240 Speaker 1: if it did turn out that in fact, Susan Rice 333 00:19:29,600 --> 00:19:32,640 Speaker 1: was doing more than just asking for the end the information, 334 00:19:32,760 --> 00:19:36,320 Speaker 1: but was spreading that around to Democrats for any kind 335 00:19:36,359 --> 00:19:39,000 Speaker 1: of political advantage, or that she had something to do, 336 00:19:39,040 --> 00:19:40,399 Speaker 1: and I'm not reporting this, I want to make this 337 00:19:40,520 --> 00:19:43,200 Speaker 1: very clear. She had something to do with leaking um, 338 00:19:43,280 --> 00:19:45,359 Speaker 1: the identity of Mike Flynn, who did end up in 339 00:19:45,400 --> 00:19:48,320 Speaker 1: the newspaper in his phone calls with the Russian ambassador, 340 00:19:48,600 --> 00:19:50,399 Speaker 1: and that forced him to resign. That did have a 341 00:19:50,440 --> 00:19:54,040 Speaker 1: huge political effect. Um, then that reason, she really isn't 342 00:19:54,040 --> 00:19:56,520 Speaker 1: a bit of trouble here. So I want to make 343 00:19:56,520 --> 00:19:59,359 Speaker 1: it very clear that the thing that I'm reporting on 344 00:19:59,520 --> 00:20:01,840 Speaker 1: right now is in and of itself it doesn't appear 345 00:20:01,880 --> 00:20:04,320 Speaker 1: to be illegal, but it may very well be improper. 346 00:20:04,359 --> 00:20:06,520 Speaker 1: And I'm starting to think that the real scandal here 347 00:20:06,960 --> 00:20:08,840 Speaker 1: is the fact that it's not illegal, that it may 348 00:20:08,880 --> 00:20:11,760 Speaker 1: be standard operating procedure. And how long has this been 349 00:20:11,800 --> 00:20:14,000 Speaker 1: going on? Is the question? Can you introduce us here 350 00:20:14,040 --> 00:20:16,080 Speaker 1: to a principle you mentioned in the piece. That's Ezra 351 00:20:16,200 --> 00:20:17,879 Speaker 1: co and Wattnick the name that I don't think we'll 352 00:20:17,920 --> 00:20:20,359 Speaker 1: be familiar to many of our of our listeners, but 353 00:20:20,520 --> 00:20:23,000 Speaker 1: is is or was wielding a pretty heavy hand on 354 00:20:23,040 --> 00:20:25,800 Speaker 1: the National Security Council as an advisor to to the president. 355 00:20:26,040 --> 00:20:28,080 Speaker 1: Who is he? What do we know about his background 356 00:20:28,160 --> 00:20:31,439 Speaker 1: and why was he the one conducting this investigation? Well, 357 00:20:31,480 --> 00:20:33,600 Speaker 1: he's a Defense intelligence I mean he's a he's a 358 00:20:33,600 --> 00:20:38,040 Speaker 1: former Defense Intelligence Agency officer. UM. He was brought in 359 00:20:38,280 --> 00:20:40,960 Speaker 1: originally by Mike flann and I have to say that, 360 00:20:41,000 --> 00:20:43,159 Speaker 1: you know, what he was doing was well within his 361 00:20:43,240 --> 00:20:47,320 Speaker 1: remit as the UM National Security Council's Director for Intelligence, 362 00:20:47,320 --> 00:20:50,440 Speaker 1: which is to review policies like this, which is when 363 00:20:51,000 --> 00:20:53,760 Speaker 1: the White House, you know, what is the procedure for 364 00:20:53,840 --> 00:20:56,720 Speaker 1: unmasking US persons in these reports? And that's when he 365 00:20:57,520 --> 00:21:01,840 Speaker 1: discovered the what the kinds of phenomenal anomalies and then 366 00:21:01,920 --> 00:21:04,920 Speaker 1: and made this available to the General Council. Um, he's 367 00:21:04,960 --> 00:21:07,480 Speaker 1: somebody who has gotten recently, you know, there's been some 368 00:21:07,520 --> 00:21:10,320 Speaker 1: interest to him among you know, sort of the progressive 369 00:21:10,320 --> 00:21:14,800 Speaker 1: and liberal media. Um. Although I have to say at 370 00:21:14,840 --> 00:21:17,639 Speaker 1: this point, Um, the argument that you know, what he 371 00:21:17,680 --> 00:21:19,560 Speaker 1: was doing is improper, I have not seen it. I'm 372 00:21:19,880 --> 00:21:22,320 Speaker 1: you know, we're all reporting his story out. But you know, 373 00:21:22,760 --> 00:21:25,760 Speaker 1: eventually he hands the information over, the General Council says, 374 00:21:25,760 --> 00:21:28,080 Speaker 1: all right, we want you to stop the investigation. At 375 00:21:28,080 --> 00:21:31,080 Speaker 1: this point he complied with that as I've I can, 376 00:21:31,119 --> 00:21:34,280 Speaker 1: I can report and you know, and kind of continued on. 377 00:21:34,359 --> 00:21:37,680 Speaker 1: But the idea that it was improper to review this 378 00:21:37,880 --> 00:21:41,560 Speaker 1: stuff for a policy like this, I mean, that's exactly 379 00:21:41,600 --> 00:21:44,520 Speaker 1: what the Director for Intelligence or what I think it's called, 380 00:21:44,560 --> 00:21:48,199 Speaker 1: the classified Executive Secretariat, it is supposed to do. As 381 00:21:48,200 --> 00:21:50,720 Speaker 1: an asshole security Council. It's not it's not really out 382 00:21:50,720 --> 00:21:52,840 Speaker 1: of the ordinary. And you know, and for that job 383 00:21:52,880 --> 00:21:55,600 Speaker 1: he was qualified. What happens here next day lie with 384 00:21:55,600 --> 00:21:58,080 Speaker 1: with the Chairman of the House Intelligence Committe, Devin Nonez. 385 00:21:58,880 --> 00:22:01,879 Speaker 1: We've seen what you sort of characterizes as bizarre behavior 386 00:22:01,960 --> 00:22:03,760 Speaker 1: him going back and forth to the White House. Obviously 387 00:22:03,760 --> 00:22:06,280 Speaker 1: this could be all tied up into that, but he's 388 00:22:06,320 --> 00:22:09,240 Speaker 1: lost the confidence of some of his colleagues on the hill. 389 00:22:10,000 --> 00:22:11,359 Speaker 1: What are the next steps do you think for the 390 00:22:11,400 --> 00:22:13,720 Speaker 1: for the chairman of the House Intelligence Committee. Well, I 391 00:22:13,720 --> 00:22:16,640 Speaker 1: wrote a very tough column last week because I thought that, 392 00:22:16,800 --> 00:22:18,960 Speaker 1: you know, the story that he had told the press, 393 00:22:19,000 --> 00:22:21,960 Speaker 1: and specifically in an interview with me, it was very 394 00:22:22,000 --> 00:22:23,800 Speaker 1: misleading because he made it appear that he was in 395 00:22:23,960 --> 00:22:27,439 Speaker 1: forming President Trump of new information when you know, his 396 00:22:27,480 --> 00:22:30,520 Speaker 1: own White House had been uh you know, knew about 397 00:22:30,560 --> 00:22:32,600 Speaker 1: it and discovered it and so forth. That said, I 398 00:22:32,680 --> 00:22:35,840 Speaker 1: also understand that the Chairman had his own independent sources 399 00:22:35,880 --> 00:22:38,360 Speaker 1: before all of this, that we're telling him that there 400 00:22:38,440 --> 00:22:41,840 Speaker 1: was you know, improper in mass unmasking going on, and 401 00:22:41,880 --> 00:22:45,040 Speaker 1: that there um were a number of kind of intelligence 402 00:22:45,040 --> 00:22:47,520 Speaker 1: reports that were making their way to the White House 403 00:22:47,520 --> 00:22:51,760 Speaker 1: setting that that that had improper details about the Trump transition. 404 00:22:52,160 --> 00:22:54,199 Speaker 1: But that said, you know, the fact that it was 405 00:22:54,400 --> 00:22:57,280 Speaker 1: he made it appear that he was forming the president 406 00:22:57,320 --> 00:23:00,360 Speaker 1: of something he didn't know. Um, I thought was uh 407 00:23:00,640 --> 00:23:03,400 Speaker 1: count miss leading and deceptive, and I did burn him 408 00:23:03,400 --> 00:23:06,040 Speaker 1: on noting my diet I criticized him very harshly a 409 00:23:06,040 --> 00:23:09,040 Speaker 1: column last week on that said, the fact that now 410 00:23:09,080 --> 00:23:12,879 Speaker 1: it's come out, um that Susan Rice had requested in 411 00:23:13,240 --> 00:23:15,680 Speaker 1: dozens of the cases. You know, this kind of unmasking 412 00:23:15,760 --> 00:23:19,520 Speaker 1: in some ways vindicates is initial concerns about this, which 413 00:23:19,800 --> 00:23:22,760 Speaker 1: because it's very classified and because it's a really complex 414 00:23:22,760 --> 00:23:26,920 Speaker 1: issue and most people covering it our political orders. Yeah, 415 00:23:27,080 --> 00:23:28,840 Speaker 1: we're gonna have to leave it there, Eli, Thank you 416 00:23:28,920 --> 00:23:33,080 Speaker 1: so much. Really appreciate the sequence of Bloomberg View columns 417 00:23:33,080 --> 00:23:35,240 Speaker 1: that we've seen from Mr Like Eli like writing for 418 00:23:35,320 --> 00:23:47,880 Speaker 1: Bloomberg View, making national news brought you by Bank of America, 419 00:23:48,000 --> 00:23:52,200 Speaker 1: Mary Lynch, dedicated to bringing our clients insights and solutions 420 00:23:52,520 --> 00:23:55,800 Speaker 1: to meet the challenges of a transforming world. That's the 421 00:23:55,880 --> 00:24:01,000 Speaker 1: power of global connections. Mary Lynch, Pierce Federan Smith Incorporated, 422 00:24:01,160 --> 00:24:06,919 Speaker 1: Member s I p C. So I'm gonna make this 423 00:24:07,000 --> 00:24:08,600 Speaker 1: very quick because David Girl has got to get to 424 00:24:08,600 --> 00:24:11,040 Speaker 1: her esteem. Guest here who's taken an oath to be 425 00:24:11,119 --> 00:24:13,879 Speaker 1: brief with us, uh today, here's the deal. Many of 426 00:24:13,920 --> 00:24:16,240 Speaker 1: you know that I consider the Verizon a o L 427 00:24:16,320 --> 00:24:19,280 Speaker 1: transaction to be one of the great transactions of this 428 00:24:19,400 --> 00:24:21,919 Speaker 1: Era by Tim Armstrong. I put it in a class 429 00:24:21,920 --> 00:24:26,480 Speaker 1: with Pete Peterson's Blackstone transaction. It's just an amazing deal 430 00:24:26,520 --> 00:24:30,160 Speaker 1: to bring a O l over to Verizon. Forget about that. 431 00:24:30,200 --> 00:24:33,520 Speaker 1: What you need to know, David Gura is Kelly Potter 432 00:24:33,760 --> 00:24:38,120 Speaker 1: is out of Lawrence Academy playing hockey for Connecticut College. 433 00:24:38,359 --> 00:24:42,560 Speaker 1: And the uproar is, Tim, nothing has changed from when 434 00:24:42,600 --> 00:24:46,560 Speaker 1: you were coaching hockey at CC. North Dakota is gonna 435 00:24:46,600 --> 00:24:50,600 Speaker 1: get rid of women's hockey. Nothing's changed in the women's sports, 436 00:24:51,000 --> 00:24:55,040 Speaker 1: of this women's sports milieu in twenty years. Tom, let 437 00:24:55,040 --> 00:24:57,160 Speaker 1: me tell you something. First, great to be back here 438 00:24:57,320 --> 00:25:01,320 Speaker 1: and the Lawrence Academy, Connecticut College, but more importantly women's 439 00:25:01,560 --> 00:25:04,520 Speaker 1: ice hockey. You know, I coach women's ice hockey during 440 00:25:04,640 --> 00:25:06,439 Speaker 1: played lacrosse there, but also in the winter, I used 441 00:25:06,480 --> 00:25:08,680 Speaker 1: to coach the women's ice hockey team. And look, the 442 00:25:08,720 --> 00:25:11,320 Speaker 1: bottom line is, uh, you know, women's sports is an 443 00:25:11,320 --> 00:25:14,439 Speaker 1: amazing uh since Title nine, but there's a lot more 444 00:25:14,480 --> 00:25:18,640 Speaker 1: work to be done. Said, well, it's funny we own 445 00:25:18,720 --> 00:25:21,240 Speaker 1: makers dot Com, which is number one women's leadership brand 446 00:25:21,240 --> 00:25:23,600 Speaker 1: in the world. And uh, I just think that the 447 00:25:23,680 --> 00:25:27,000 Speaker 1: women's leadership movement right now has a lot of energy 448 00:25:27,040 --> 00:25:29,760 Speaker 1: behind it. And the North Dakota situation you just brought 449 00:25:29,800 --> 00:25:31,639 Speaker 1: up is exactly the type of thing that needs to 450 00:25:31,680 --> 00:25:35,200 Speaker 1: get addressed. Things David flabbergast. Could you see them take 451 00:25:35,280 --> 00:25:39,000 Speaker 1: men's basketball away from U n C. David, Would that happen? 452 00:25:39,160 --> 00:25:41,119 Speaker 1: It wouldn't happen. Let's take an old thing get started. 453 00:25:41,520 --> 00:25:44,440 Speaker 1: All right, this is the rebranding. You've gotten some flag 454 00:25:44,520 --> 00:25:46,639 Speaker 1: for this, Uh, the rebranding of the company of Yahoo 455 00:25:46,680 --> 00:25:48,440 Speaker 1: and AO. I'll tell us a bit about the branding. 456 00:25:48,520 --> 00:25:50,000 Speaker 1: What this company is gonna look like a lot of 457 00:25:50,000 --> 00:25:52,560 Speaker 1: people wondering what shape it's gonna take. Sure, So David, 458 00:25:52,560 --> 00:25:55,200 Speaker 1: good to see you again. And Uh. One thing that 459 00:25:55,600 --> 00:25:57,840 Speaker 1: we're talking about today is the launch of a new 460 00:25:57,880 --> 00:26:01,640 Speaker 1: B two B name, which is essentially House of Brands supporter. 461 00:26:02,119 --> 00:26:04,960 Speaker 1: We uh, we'll touch about over a billion consumers once 462 00:26:05,000 --> 00:26:07,720 Speaker 1: the Yahoo deal closes. Where we have a house of 463 00:26:07,760 --> 00:26:10,399 Speaker 1: brand strategy, which is we have about twenty major brands, 464 00:26:10,440 --> 00:26:14,840 Speaker 1: which include a O L, Yahoo, Tech, Crunch, uh On, Gadget, 465 00:26:15,119 --> 00:26:18,520 Speaker 1: Movie Phone. So we have a really big digital portfolio. 466 00:26:18,720 --> 00:26:21,800 Speaker 1: And like a Berkshire Hathaway or Procter and Gamble, oath 467 00:26:21,960 --> 00:26:25,199 Speaker 1: is the name that we're taking that basically supports those brands. 468 00:26:25,200 --> 00:26:28,560 Speaker 1: As a consumer, you probably won't see Oath a lot um. 469 00:26:28,640 --> 00:26:30,760 Speaker 1: You'll see our brand. So if you are a sports fan, 470 00:26:30,800 --> 00:26:33,200 Speaker 1: you'll see Yahoo Sports. If your finance fan, you'll see 471 00:26:33,480 --> 00:26:36,159 Speaker 1: Yahoo Finance. If you're into tech, you'll see tech Crunch. 472 00:26:36,560 --> 00:26:38,680 Speaker 1: So we wanted to have a values based brand that 473 00:26:38,720 --> 00:26:41,440 Speaker 1: holds everything together. It's really the Oath is the soil 474 00:26:41,520 --> 00:26:44,200 Speaker 1: that great brands grow out of. And our mission statement 475 00:26:44,280 --> 00:26:47,360 Speaker 1: is build brands people love, and that's a long term commitment. 476 00:26:47,480 --> 00:26:50,159 Speaker 1: Oath is a commitment word, and that's why we decided 477 00:26:50,200 --> 00:26:52,480 Speaker 1: to name the company from a B two B standpoint Oath. 478 00:26:52,680 --> 00:26:54,919 Speaker 1: How much did this blueprint change? Is you're building this 479 00:26:55,000 --> 00:26:57,800 Speaker 1: house of brands over these last many months. Of course, 480 00:26:57,840 --> 00:26:59,560 Speaker 1: you had the the Yahoo hacking, you were going through 481 00:26:59,600 --> 00:27:02,119 Speaker 1: all of that, the deal was being reevaluated and changed. 482 00:27:02,520 --> 00:27:05,040 Speaker 1: How was your vision for this this combined company changed? 483 00:27:05,080 --> 00:27:08,240 Speaker 1: You know, the vision stayed basically the same, which is 484 00:27:08,280 --> 00:27:11,560 Speaker 1: we're betting on two simple principles. One is that the 485 00:27:11,560 --> 00:27:14,800 Speaker 1: world is going to get connected by software and by 486 00:27:14,840 --> 00:27:17,640 Speaker 1: mobile phones, and the second is that brands are gonna 487 00:27:17,640 --> 00:27:20,040 Speaker 1: matter even more when that happens because the level of 488 00:27:20,080 --> 00:27:22,040 Speaker 1: noise in the world that brands are going to continue 489 00:27:22,080 --> 00:27:25,320 Speaker 1: to pop out and there's a chance to grow global brands. 490 00:27:25,760 --> 00:27:28,440 Speaker 1: The Yahoo data breach that happened, I think is something 491 00:27:28,480 --> 00:27:30,840 Speaker 1: that's happened a lot to a lot of companies. It's 492 00:27:30,840 --> 00:27:33,639 Speaker 1: something that yeah, Who's done a great job working through 493 00:27:33,760 --> 00:27:36,560 Speaker 1: and we're focused now on basically, you know, launching the 494 00:27:36,600 --> 00:27:39,119 Speaker 1: next series of great brands for the world. Facebook, I 495 00:27:39,160 --> 00:27:41,760 Speaker 1: believe the other day did a Snapchat equivalent. Not that 496 00:27:41,760 --> 00:27:45,119 Speaker 1: I'm in Tim, I'm sorry, I'm not a snap I'm sorry, 497 00:27:45,160 --> 00:27:48,280 Speaker 1: but but help me here with how you compete with Facebook, 498 00:27:48,320 --> 00:27:50,880 Speaker 1: compete with Google and the other juggernauts. Yeah, so our 499 00:27:50,920 --> 00:27:54,080 Speaker 1: strategy is interesting. So we we have a different strategy 500 00:27:54,119 --> 00:27:56,200 Speaker 1: than competing head on with them. We're partners with them. 501 00:27:56,240 --> 00:27:58,240 Speaker 1: So Huffing a Post, which we own, is the largest 502 00:27:58,240 --> 00:28:02,400 Speaker 1: distributed news source on Facebook. We have big deals with Google, 503 00:28:02,600 --> 00:28:06,800 Speaker 1: with Amazon, uh, with Apple. So we look at those 504 00:28:06,840 --> 00:28:09,280 Speaker 1: and be honest with you, I look at them as uh, 505 00:28:09,480 --> 00:28:12,760 Speaker 1: really a distribution source for our business. So we basically 506 00:28:12,760 --> 00:28:15,520 Speaker 1: both put content all over those distributions sources and we 507 00:28:15,680 --> 00:28:19,639 Speaker 1: monetize with them also. So I love those companies and 508 00:28:19,720 --> 00:28:21,800 Speaker 1: our content people love those companies, and we're going to 509 00:28:21,880 --> 00:28:25,560 Speaker 1: work in that ecosystem. We partner with everyone in that 510 00:28:25,680 --> 00:28:27,639 Speaker 1: in the space, So we're we're not looking to compete, 511 00:28:27,680 --> 00:28:30,080 Speaker 1: We're looking to differentiate. Kim, how are you processing what 512 00:28:30,080 --> 00:28:31,960 Speaker 1: we're seeing with YouTube right now? Obviously you care a 513 00:28:32,000 --> 00:28:33,600 Speaker 1: lot about ad revenue as well as you look to 514 00:28:33,640 --> 00:28:36,040 Speaker 1: this new to this new brand, But you see the 515 00:28:36,119 --> 00:28:39,120 Speaker 1: difficulty that YouTube and Google is facing, uh, you know, 516 00:28:39,600 --> 00:28:42,360 Speaker 1: monitoring what's being put out on YouTube. Talk about the 517 00:28:42,360 --> 00:28:44,600 Speaker 1: complexity there and how you make sure that what happens 518 00:28:44,640 --> 00:28:46,520 Speaker 1: there isn't happening with your brands as well. So I 519 00:28:46,520 --> 00:28:49,400 Speaker 1: think you know, we're we're a brand company. We're building 520 00:28:49,440 --> 00:28:51,600 Speaker 1: brands people love. So from our standpoint, we want to 521 00:28:51,600 --> 00:28:53,920 Speaker 1: be in a brand safe environment and really scaled. I 522 00:28:53,960 --> 00:28:56,280 Speaker 1: think the tension point you're saying at the YouTube's and 523 00:28:56,280 --> 00:28:59,040 Speaker 1: and Facebook is you know that they're they're dealing with 524 00:28:59,120 --> 00:29:02,280 Speaker 1: billions of humors and trying to connect you know, millions 525 00:29:02,360 --> 00:29:04,320 Speaker 1: or hundreds of millions of videos at the same time 526 00:29:04,320 --> 00:29:06,640 Speaker 1: and try to monetize them. To be honest with you, 527 00:29:06,680 --> 00:29:08,640 Speaker 1: the things that have been happening recently are probably a 528 00:29:08,720 --> 00:29:12,120 Speaker 1: natural outcome of the scale we face it, um, you know. Also, 529 00:29:12,200 --> 00:29:14,600 Speaker 1: but the flip side of it, the silver lining is 530 00:29:14,640 --> 00:29:17,200 Speaker 1: it is if we can solve those issues as an 531 00:29:17,240 --> 00:29:19,760 Speaker 1: industry and all the companies can solve them. You know, 532 00:29:20,160 --> 00:29:22,200 Speaker 1: you can either have smaller scale and not have all 533 00:29:22,200 --> 00:29:23,840 Speaker 1: those problems, or you can have big scale and be 534 00:29:23,840 --> 00:29:26,520 Speaker 1: connected to billions of consumers and fix that and then 535 00:29:26,560 --> 00:29:29,280 Speaker 1: having a wonderful business. And I think we're heading towards 536 00:29:29,280 --> 00:29:32,560 Speaker 1: the wonderful business side. Um. But I think the advertisers 537 00:29:32,600 --> 00:29:35,760 Speaker 1: are speaking. They want brand, trusted environments. Who's gonna put 538 00:29:35,800 --> 00:29:39,080 Speaker 1: Twitter out of their misery? I think I'm I'm a 539 00:29:39,120 --> 00:29:41,440 Speaker 1: big believer in Twitter and big believer in the management 540 00:29:41,440 --> 00:29:45,120 Speaker 1: team at Twitter and very close with them. So I'm 541 00:29:45,240 --> 00:29:47,520 Speaker 1: guessing that their their misery is going to turn to 542 00:29:47,600 --> 00:29:49,320 Speaker 1: joy at some point, and it's going to be self 543 00:29:49,360 --> 00:29:52,600 Speaker 1: resurrected from how those guys are doing and girls are 544 00:29:52,600 --> 00:29:54,600 Speaker 1: doing their work. Did you notice, David, he didn't answer 545 00:29:54,600 --> 00:30:00,120 Speaker 1: that question. If you want to follow timbarks drinking, Thank 546 00:30:00,160 --> 00:30:03,400 Speaker 1: you so much for the oath discussion a year particularly 547 00:30:03,480 --> 00:30:06,240 Speaker 1: after inside, I'm gonna tweet this out. Good morning Serious 548 00:30:06,240 --> 00:30:09,880 Speaker 1: sex TEMN Channel one nineteen in North Dakota as we 549 00:30:09,920 --> 00:30:25,120 Speaker 1: looked at women's North Dakota hockey David, why don't you 550 00:30:25,160 --> 00:30:26,920 Speaker 1: bring him in? All and Ruskins over on the phone 551 00:30:26,920 --> 00:30:29,480 Speaker 1: with a Queen of England trying to explain to the 552 00:30:29,600 --> 00:30:32,480 Speaker 1: week sterlink tour. Yeah, we'll get to that in just 553 00:30:32,560 --> 00:30:34,240 Speaker 1: a month. Let me ask you about the South African 554 00:30:34,280 --> 00:30:35,680 Speaker 1: rand first, if I could. We saw a piece of 555 00:30:35,720 --> 00:30:38,440 Speaker 1: breaking news here Bloomberg breaking uh in exclusive this morning. 556 00:30:38,480 --> 00:30:40,480 Speaker 1: The head of South Africa's treasury has asked to leave 557 00:30:40,480 --> 00:30:42,480 Speaker 1: his post at the end of this month, a year 558 00:30:42,480 --> 00:30:44,280 Speaker 1: before his contract runs out. So it seems like we're 559 00:30:44,280 --> 00:30:47,280 Speaker 1: getting compounding bad news out of South Africa. We've seen 560 00:30:47,280 --> 00:30:49,240 Speaker 1: the weakening of the rand here over these last seven 561 00:30:49,280 --> 00:30:52,520 Speaker 1: days and down eleven precent. I think, what's your sense 562 00:30:52,520 --> 00:30:54,440 Speaker 1: of where things are going here? And I mentioned the compounding? 563 00:30:55,080 --> 00:30:59,040 Speaker 1: Is there there more yet to happen? It's definitely yes, absolutely, yeah. 564 00:30:59,040 --> 00:31:00,880 Speaker 1: I think we're at a little bit of pivot point here. 565 00:31:01,040 --> 00:31:03,560 Speaker 1: You know, the market I guess is talking about is 566 00:31:03,560 --> 00:31:07,280 Speaker 1: there some sort of Dilma moment as it were, whereby 567 00:31:07,400 --> 00:31:10,600 Speaker 1: you know, you'd have a change in leadership and you know, 568 00:31:11,320 --> 00:31:14,040 Speaker 1: change in philosophy to some extential perhaps even some of 569 00:31:14,080 --> 00:31:16,840 Speaker 1: the old god coming back in, the old Finance minister 570 00:31:16,920 --> 00:31:21,080 Speaker 1: coming back in seen as relatively credible, and the rand 571 00:31:21,080 --> 00:31:25,440 Speaker 1: could perhaps rally substantially from here. We alternatively, we continue 572 00:31:25,480 --> 00:31:27,480 Speaker 1: on the path we've just set over the last few days, 573 00:31:27,480 --> 00:31:29,960 Speaker 1: in which case, you know, dollar rand I think will 574 00:31:30,000 --> 00:31:33,080 Speaker 1: be up well into the four teens before we know it. 575 00:31:33,880 --> 00:31:35,840 Speaker 1: I imagine you've looked at with the reading agencies have 576 00:31:35,920 --> 00:31:37,480 Speaker 1: had to say here. Of course they're putting it, putting 577 00:31:37,520 --> 00:31:40,320 Speaker 1: South Africa unnoticed. What stood out to you from from 578 00:31:40,360 --> 00:31:43,560 Speaker 1: from those commentaries, Well, the actions have been pretty quick, 579 00:31:43,840 --> 00:31:46,560 Speaker 1: so you know, look, you know, to some extent to 580 00:31:46,680 --> 00:31:50,480 Speaker 1: your earlier question, there's a lot up in the air 581 00:31:50,520 --> 00:31:53,160 Speaker 1: in terms of the political direction where as to where 582 00:31:53,160 --> 00:31:55,840 Speaker 1: South Africa goes. And in some sense, I don't think, 583 00:31:56,120 --> 00:31:58,800 Speaker 1: you know, it makes a lot of sense to change 584 00:31:58,880 --> 00:32:01,880 Speaker 1: ratings right at this very moment when you can wait 585 00:32:02,240 --> 00:32:05,840 Speaker 1: a few weeks and perhaps have much more information, so 586 00:32:06,360 --> 00:32:07,640 Speaker 1: that that is a bit of a stand up. But 587 00:32:07,680 --> 00:32:09,320 Speaker 1: at the same time, of course you've got you know 588 00:32:09,360 --> 00:32:12,080 Speaker 1: what the smp S actions already, You've got let's see 589 00:32:12,080 --> 00:32:15,720 Speaker 1: where Moodies go. Is it one notch two notches. Um, 590 00:32:15,800 --> 00:32:19,040 Speaker 1: you know it. It is substantial. Of course, if South 591 00:32:19,080 --> 00:32:22,720 Speaker 1: Africa uses its investment grade. Okay, help our rookie ffects 592 00:32:22,760 --> 00:32:27,200 Speaker 1: traders listening worldwide. Where does a guy like you enter 593 00:32:27,280 --> 00:32:32,960 Speaker 1: the trade long South African rand strong ran week US dollar? 594 00:32:33,680 --> 00:32:38,120 Speaker 1: Does Allen Ruskin wait for a press release, a Bloomberg headline? 595 00:32:38,400 --> 00:32:41,800 Speaker 1: Do you do it technically? How do you do this? Tom? 596 00:32:41,840 --> 00:32:44,280 Speaker 1: I think the South African rand is not a currency 597 00:32:44,320 --> 00:32:47,240 Speaker 1: for rookies. I would say that as a warning point, 598 00:32:48,000 --> 00:32:50,680 Speaker 1: you know, because this thing flies around. Really we've seen 599 00:32:50,720 --> 00:32:53,760 Speaker 1: you know, seven eight percent move in in roughly a week, 600 00:32:53,840 --> 00:32:57,240 Speaker 1: So that tells you that. Um, certainly, if you're thinking 601 00:32:57,280 --> 00:33:00,640 Speaker 1: in terms of yield and carry, you don't really want 602 00:33:00,680 --> 00:33:03,280 Speaker 1: to just have your all your eggs in one basket 603 00:33:03,320 --> 00:33:05,360 Speaker 1: and in a currency like the South African rand. So 604 00:33:05,600 --> 00:33:09,880 Speaker 1: that's a starting point right now. It's unfortunately much more 605 00:33:09,960 --> 00:33:14,240 Speaker 1: of a political story than an economic story. So you know, 606 00:33:14,320 --> 00:33:17,000 Speaker 1: typically I like it more when we're reacting to data, 607 00:33:17,080 --> 00:33:20,160 Speaker 1: when we're looking at the broader macro environment, which I 608 00:33:20,160 --> 00:33:23,520 Speaker 1: think is still actually slightly friendly for carry. We've had 609 00:33:23,560 --> 00:33:25,280 Speaker 1: a very good run for carry, but it's still I 610 00:33:25,280 --> 00:33:28,360 Speaker 1: think slightly friendly in the South African rand naturally lends 611 00:33:28,400 --> 00:33:31,480 Speaker 1: itself to be in that basket. But right now I'd 612 00:33:31,480 --> 00:33:33,880 Speaker 1: be very cautious because, as I said, we're at a pivoct. Really, 613 00:33:33,880 --> 00:33:36,720 Speaker 1: we could be at thirteen on good political news or 614 00:33:36,760 --> 00:33:38,800 Speaker 1: so called good political news, and we could be at 615 00:33:38,800 --> 00:33:41,120 Speaker 1: fourteen and a half quite easily in a heartbeat. I 616 00:33:41,160 --> 00:33:42,400 Speaker 1: thought there was a good piece of the Wall Street 617 00:33:42,480 --> 00:33:44,560 Speaker 1: Journal this mooeting looking at the Chinese currency. I want 618 00:33:44,560 --> 00:33:45,640 Speaker 1: to ask you a bit about that as we had 619 00:33:45,680 --> 00:33:47,360 Speaker 1: to these meetings on on Friday. In the lead of 620 00:33:47,360 --> 00:33:49,200 Speaker 1: that piece was there's a new twist in the persistent 621 00:33:49,280 --> 00:33:52,120 Speaker 1: argument that China is keeping its currency artificially low against 622 00:33:52,120 --> 00:33:56,640 Speaker 1: the dollar, the un has actually been rising. As again, 623 00:33:56,680 --> 00:33:58,080 Speaker 1: as we head to those meetings this Friday, what are 624 00:33:58,120 --> 00:33:59,840 Speaker 1: we seeing with the currency and sort of what would 625 00:33:59,840 --> 00:34:02,160 Speaker 1: the nsequences be if the US does in fact label 626 00:34:02,240 --> 00:34:05,360 Speaker 1: a trying out currency manipulator. Well, I think the U 627 00:34:05,440 --> 00:34:08,160 Speaker 1: s has been in a tricky situation because the old 628 00:34:08,200 --> 00:34:11,319 Speaker 1: story where you saw a lot of pressure for dollar 629 00:34:11,480 --> 00:34:14,520 Speaker 1: Chinese to go down and the Chinese were resistant of that, 630 00:34:14,480 --> 00:34:17,920 Speaker 1: they were resistant of Chinese currency strength kind of flipped 631 00:34:17,920 --> 00:34:19,759 Speaker 1: on its head and has flipped on his head for 632 00:34:19,840 --> 00:34:23,479 Speaker 1: quite a while, whereby the currencies, if anything, too weak 633 00:34:23,560 --> 00:34:26,640 Speaker 1: and was weakening faster than they would have wanted, and 634 00:34:26,680 --> 00:34:28,840 Speaker 1: they were trying to resist it that way around, in 635 00:34:28,880 --> 00:34:31,360 Speaker 1: which case that was pretty much consistent with what the 636 00:34:31,440 --> 00:34:33,640 Speaker 1: U S would want anyway. So the US has found 637 00:34:33,680 --> 00:34:36,359 Speaker 1: itself in a in a somewhat difficult position. And I think, 638 00:34:36,400 --> 00:34:39,800 Speaker 1: you know, even people who said, okay, you know the currency, 639 00:34:40,040 --> 00:34:42,719 Speaker 1: the Chinese currency is misvalued, have had to rethink. And 640 00:34:42,800 --> 00:34:44,359 Speaker 1: you know, people like the I m F, I think, 641 00:34:44,400 --> 00:34:46,799 Speaker 1: said okay, you know we're closer to fair value here, 642 00:34:47,000 --> 00:34:50,120 Speaker 1: don't you, Brink has led. I'll give you a just 643 00:34:50,239 --> 00:34:53,600 Speaker 1: BC credit on a weak sterling call. If anything, you've 644 00:34:53,640 --> 00:34:57,200 Speaker 1: been more aggressive about it our suggestion than he just BC. 645 00:34:57,400 --> 00:35:00,320 Speaker 1: You're getting to have some more company right now. Is 646 00:35:00,360 --> 00:35:04,240 Speaker 1: it about weak sterling or is it about strong dollar? 647 00:35:05,320 --> 00:35:07,320 Speaker 1: A little bit of both really, but I'd say, actually, 648 00:35:07,640 --> 00:35:09,080 Speaker 1: you know, if you had to put more weight, it 649 00:35:09,160 --> 00:35:12,480 Speaker 1: was at least as much really on a stronger dollars story, 650 00:35:12,640 --> 00:35:15,600 Speaker 1: and that is not panning out quite according to plan, 651 00:35:15,719 --> 00:35:18,680 Speaker 1: of course. But I think you know, the good news Tim, 652 00:35:18,800 --> 00:35:22,359 Speaker 1: just to interrupt there was was that it's nice when 653 00:35:22,400 --> 00:35:25,960 Speaker 1: you forecast currencies and you like both legs really, so 654 00:35:26,080 --> 00:35:30,000 Speaker 1: in that sense, we like both. This is really important, David, currencies. 655 00:35:30,040 --> 00:35:32,400 Speaker 1: You don't talk about one currency. You've heard me scream 656 00:35:32,440 --> 00:35:35,399 Speaker 1: about this. It's about a pair. And if you get 657 00:35:35,400 --> 00:35:38,200 Speaker 1: them both going in the right direction, that's where you 658 00:35:38,280 --> 00:35:41,439 Speaker 1: make the alpha. That's a that's a cardinal rule. That's 659 00:35:41,480 --> 00:35:44,719 Speaker 1: not said enough exactly, Tim. So I think, look, I 660 00:35:44,719 --> 00:35:47,200 Speaker 1: think both are gonna work in that direction. I e. 661 00:35:47,360 --> 00:35:50,440 Speaker 1: Sterling will be somewhat weaker in and of itself really 662 00:35:50,719 --> 00:35:55,040 Speaker 1: and the dollars should be somewhat stronger. But it's a 663 00:35:55,120 --> 00:35:58,600 Speaker 1: case of somewhat right. I think we're you know, looking 664 00:35:58,640 --> 00:36:02,879 Speaker 1: now at a dollar moves which are more contained than 665 00:36:02,920 --> 00:36:05,279 Speaker 1: we would have anticipated at this point in time. And 666 00:36:05,320 --> 00:36:08,319 Speaker 1: given what the Feds actually the catalyst to get strong dollar, 667 00:36:08,440 --> 00:36:11,080 Speaker 1: to get the February dollar we're supposed to have be 668 00:36:11,160 --> 00:36:14,000 Speaker 1: a mayor junior or September dollar, well, I think a 669 00:36:14,040 --> 00:36:17,040 Speaker 1: couple of things time. I think firstly, the Fed hopefully 670 00:36:17,600 --> 00:36:21,759 Speaker 1: you know, still more in play than the market that projects. 671 00:36:21,920 --> 00:36:24,719 Speaker 1: And I think that that that's a pretty comfortable call 672 00:36:24,800 --> 00:36:27,200 Speaker 1: at this point. So we're talking, uh, you know, Ray 673 00:36:27,239 --> 00:36:29,839 Speaker 1: takes in June and September and then a balance sheet 674 00:36:29,880 --> 00:36:33,719 Speaker 1: action towards the end of the year. So that is 675 00:36:33,760 --> 00:36:36,160 Speaker 1: all consistent with the stronger dollar story. But we need 676 00:36:36,160 --> 00:36:39,120 Speaker 1: the back end in general to play to play ball 677 00:36:39,160 --> 00:36:40,840 Speaker 1: in all of this, right, we have to keep in 678 00:36:40,880 --> 00:36:45,080 Speaker 1: mind that the tenure has been incredibly well behaved, really 679 00:36:45,160 --> 00:36:47,960 Speaker 1: and I think if tenure heels and the broader heeled 680 00:36:47,960 --> 00:36:50,839 Speaker 1: curve backs up, then you know the story kicks into 681 00:36:50,840 --> 00:36:55,600 Speaker 1: gear and with with more gusta with the euro with Strala, 682 00:36:55,600 --> 00:36:57,040 Speaker 1: we had the speech by to reason, We've got to 683 00:36:57,120 --> 00:36:59,960 Speaker 1: EU meeting tomorrow again hammering out what the price is 684 00:37:00,040 --> 00:37:02,680 Speaker 1: going to be here for for brexit. How how long 685 00:37:02,800 --> 00:37:05,719 Speaker 1: terms can you be on currency amidst all of the 686 00:37:05,920 --> 00:37:07,680 Speaker 1: much nations that we're going to see here over these 687 00:37:07,719 --> 00:37:10,399 Speaker 1: next two years. Yeah, I think you know, some people 688 00:37:10,440 --> 00:37:13,640 Speaker 1: would say, look in this respect, when you're looking at 689 00:37:13,880 --> 00:37:16,879 Speaker 1: a to your political profile, you can actually be quite 690 00:37:16,920 --> 00:37:20,600 Speaker 1: long term. But you're still reading the tea leaves. You're 691 00:37:20,640 --> 00:37:22,640 Speaker 1: still trying to get a sense of, you know, is 692 00:37:22,680 --> 00:37:26,959 Speaker 1: the EU twenty seven which is looking for the UK 693 00:37:27,200 --> 00:37:30,440 Speaker 1: to first set up some sort of divorce rules before 694 00:37:30,480 --> 00:37:33,000 Speaker 1: we actually come up with a new set of trade rules, 695 00:37:33,120 --> 00:37:35,480 Speaker 1: or you know, is the UK winning and we're actually 696 00:37:35,480 --> 00:37:37,239 Speaker 1: doing this all in parallel kind of thing. So I 697 00:37:37,280 --> 00:37:40,320 Speaker 1: think you're constantly kind of making some sort of judgment 698 00:37:40,360 --> 00:37:44,480 Speaker 1: about who's got the upper hand as far as the 699 00:37:44,480 --> 00:38:00,520 Speaker 1: politics is concerned. It McAuley of City good bit, take 700 00:38:00,520 --> 00:38:02,799 Speaker 1: good morning, good morning, time, get to be with you. 701 00:38:02,960 --> 00:38:06,719 Speaker 1: Did you change your auto recommendations yesterday off of one 702 00:38:06,800 --> 00:38:10,080 Speaker 1: month's auto sales? Now? You know, our our views, you know, 703 00:38:10,120 --> 00:38:13,000 Speaker 1: has been pretty consistent of mid seventeen million auto sales 704 00:38:13,040 --> 00:38:17,040 Speaker 1: with a peak coming in eighteen and sixteen million is 705 00:38:17,040 --> 00:38:20,319 Speaker 1: our nineteen estimate. Um, you know last year in March, 706 00:38:20,400 --> 00:38:22,960 Speaker 1: in March sixteen we also had about a sixteen and 707 00:38:22,960 --> 00:38:25,880 Speaker 1: a half million SAR. The full year ended up at 708 00:38:25,920 --> 00:38:28,760 Speaker 1: seventeen and a half. Of these fluctuations are not that uncommon. 709 00:38:28,840 --> 00:38:30,360 Speaker 1: Um you know on February we were seventeen and a 710 00:38:30,400 --> 00:38:32,239 Speaker 1: half a million. We do see a bit more downside 711 00:38:32,280 --> 00:38:35,319 Speaker 1: now is we're approaching the peak based on our latest work. 712 00:38:35,400 --> 00:38:37,400 Speaker 1: But um, yes, they's number did not call us to 713 00:38:37,480 --> 00:38:40,000 Speaker 1: change our Our opinion is you know, there's a partial 714 00:38:40,040 --> 00:38:44,279 Speaker 1: differentiation of revenue units is compared to price and then 715 00:38:44,320 --> 00:38:47,839 Speaker 1: in the auto world, there's also size of car. How 716 00:38:47,960 --> 00:38:50,960 Speaker 1: critical is it that they can't sell the big cars, 717 00:38:51,000 --> 00:38:53,960 Speaker 1: so they're starting to give away a lot of incentives. 718 00:38:54,040 --> 00:38:58,040 Speaker 1: What does that do down the income statement? Sure? So, 719 00:38:58,040 --> 00:39:00,319 Speaker 1: so the companies recover, like four and GM, we think 720 00:39:00,360 --> 00:39:03,000 Speaker 1: the majority of profits in North America come from the 721 00:39:03,040 --> 00:39:06,080 Speaker 1: pickup truck segments, and pickups we think has actually a 722 00:39:06,200 --> 00:39:09,760 Speaker 1: very unique supplied demand imbalance. We have seen com pricing 723 00:39:09,760 --> 00:39:13,759 Speaker 1: pressure in sedan segments even crossover segments now since last year. 724 00:39:13,840 --> 00:39:17,080 Speaker 1: So some of this incentives rising affordability head to win 725 00:39:17,200 --> 00:39:21,239 Speaker 1: our natural later cycle pressure points that we see. Why 726 00:39:21,280 --> 00:39:24,520 Speaker 1: did GM confirm their twenty seventeen guidance last week instead 727 00:39:24,560 --> 00:39:26,400 Speaker 1: of all the negativity that we read about them on 728 00:39:26,480 --> 00:39:29,360 Speaker 1: the auto sector Because the pickup trucks have a unique 729 00:39:29,360 --> 00:39:31,880 Speaker 1: supply demand in balance, and we think that continues. And 730 00:39:31,880 --> 00:39:34,600 Speaker 1: that's why despite costs for peak auto for the past 731 00:39:34,640 --> 00:39:38,279 Speaker 1: three years, right three years um, your profits in North 732 00:39:38,320 --> 00:39:40,839 Speaker 1: America from domestic O e m's like GM and Ford 733 00:39:40,840 --> 00:39:43,160 Speaker 1: have been strong. So I think the pickup trucks story 734 00:39:43,160 --> 00:39:46,880 Speaker 1: is frankly highly overlooked. In his whole debate about the cycle, 735 00:39:47,239 --> 00:39:50,040 Speaker 1: how weird are you about the glut. You've got a 736 00:39:50,040 --> 00:39:51,840 Speaker 1: glat of new vehicles, a glat of old vehicles, and 737 00:39:51,840 --> 00:39:53,960 Speaker 1: you've got companies here who are trying to reinvent their 738 00:39:54,000 --> 00:39:56,040 Speaker 1: product lines. It seems like that's a recipe for for 739 00:39:56,040 --> 00:39:58,479 Speaker 1: a lot of trouble. Yeah, I mean, you are seeing 740 00:39:58,480 --> 00:40:00,640 Speaker 1: awf leaves of volume again pret now fill this later 741 00:40:00,719 --> 00:40:03,080 Speaker 1: point in the cycle, and some affordability had warned the 742 00:40:03,160 --> 00:40:05,920 Speaker 1: report we published actually last night, we're kind of making 743 00:40:05,920 --> 00:40:08,640 Speaker 1: the argument that if you look at affordability historically, even 744 00:40:08,680 --> 00:40:10,640 Speaker 1: if you account, you know, for some of the pressures 745 00:40:10,680 --> 00:40:13,160 Speaker 1: that are incrementally occurring, we don't think we're in some 746 00:40:13,200 --> 00:40:16,160 Speaker 1: sort of unshottered territory in terms of monthly payments and 747 00:40:16,200 --> 00:40:19,400 Speaker 1: auto sales and how they relate to the current macro economy. 748 00:40:19,480 --> 00:40:22,000 Speaker 1: They have consumer confidence, disposable income, So we don't think 749 00:40:22,000 --> 00:40:24,480 Speaker 1: we're in some sort of unshotted territory. But at this 750 00:40:24,760 --> 00:40:26,880 Speaker 1: kind of seventh eighth ending of the cycle, you should 751 00:40:26,960 --> 00:40:30,400 Speaker 1: start to see some you know, pressure points in select segments, 752 00:40:30,400 --> 00:40:33,000 Speaker 1: and and kind of our point is all that's happening 753 00:40:33,000 --> 00:40:36,440 Speaker 1: and all that's been absorbed. Um, But the pickup truck story, 754 00:40:36,440 --> 00:40:38,480 Speaker 1: which is the anchor for earnings. Again, the majority we 755 00:40:38,520 --> 00:40:40,759 Speaker 1: think of GM and Ford um had does not get 756 00:40:40,760 --> 00:40:42,879 Speaker 1: the attention in public. There's a lot of times people 757 00:40:43,040 --> 00:40:45,000 Speaker 1: equated to housing or oil, and we think it's a 758 00:40:45,080 --> 00:40:48,760 Speaker 1: much bigger story than than that. With this, we continue 759 00:40:48,800 --> 00:40:52,000 Speaker 1: each I did a chart of US car inflation price change, 760 00:40:52,320 --> 00:40:55,319 Speaker 1: if you will, really real to see some real price 761 00:40:55,360 --> 00:40:59,319 Speaker 1: erosion year over year in used cars. How linked are 762 00:40:59,360 --> 00:41:02,399 Speaker 1: the equity shares of the big auto companies to use 763 00:41:02,480 --> 00:41:07,640 Speaker 1: card dynamics. There's certainly some some exposure from a lending perspective. 764 00:41:07,719 --> 00:41:11,000 Speaker 1: We saw, you know, Ford had an impact late last year. Well, 765 00:41:12,239 --> 00:41:14,160 Speaker 1: I need to interrupt because this is so important. I'm 766 00:41:14,200 --> 00:41:16,680 Speaker 1: sorry didn't get into my puny brain. It's do you 767 00:41:16,719 --> 00:41:20,880 Speaker 1: agree with Steve Iceman that there is a subprime auto 768 00:41:21,120 --> 00:41:25,400 Speaker 1: challenge in the markets? I mean, we have seen delinquencies 769 00:41:25,480 --> 00:41:27,120 Speaker 1: generally rise. I mean we don't think that we haven't 770 00:41:27,120 --> 00:41:30,480 Speaker 1: seen data on subprime deminquency that seems um kind of 771 00:41:30,520 --> 00:41:33,359 Speaker 1: again as an outlying relative to the past. And there's 772 00:41:33,400 --> 00:41:35,919 Speaker 1: been a lot of articles written about subprime lending being 773 00:41:35,920 --> 00:41:37,960 Speaker 1: pulled back in the fourth quarter, which is fine, and 774 00:41:38,000 --> 00:41:40,319 Speaker 1: we want to see rational lending behavior. So what we're 775 00:41:40,320 --> 00:41:42,759 Speaker 1: looking for is, if there is a problem, if there 776 00:41:42,840 --> 00:41:45,719 Speaker 1: is a higher delinquency rate in subprime, we want to 777 00:41:45,719 --> 00:41:47,600 Speaker 1: see the industry kind of pulled back on that. Has 778 00:41:47,640 --> 00:41:49,320 Speaker 1: been a lot of reports that that did occur in 779 00:41:49,360 --> 00:41:51,240 Speaker 1: the fourth quarter because what the market want, the equat 780 00:41:51,280 --> 00:41:53,680 Speaker 1: prices of these companies want to see, Tom is they 781 00:41:53,719 --> 00:41:57,239 Speaker 1: want to see different behavior than prior cycles. They want 782 00:41:57,239 --> 00:42:00,320 Speaker 1: to see, you know, production cutsift sales are weaker, reduction 783 00:42:00,360 --> 00:42:02,759 Speaker 1: cuts are okay to maintain the inventory. They want to 784 00:42:02,760 --> 00:42:05,160 Speaker 1: see you start pint lending, to your question, kind of 785 00:42:05,160 --> 00:42:07,040 Speaker 1: get pulled back if that becomes an issue. And that's 786 00:42:07,040 --> 00:42:09,520 Speaker 1: what we think is the bigger story, UM, because you 787 00:42:09,560 --> 00:42:11,040 Speaker 1: know these docks, you know, like if you look at 788 00:42:11,040 --> 00:42:14,000 Speaker 1: GM earnings going from three dollars to over six dollars, 789 00:42:14,160 --> 00:42:16,560 Speaker 1: they only have an earnings problem. They have a multiple 790 00:42:16,600 --> 00:42:18,840 Speaker 1: problem on their equity prices. And I think part of 791 00:42:18,880 --> 00:42:22,000 Speaker 1: it is how will these companies react in a post 792 00:42:22,040 --> 00:42:24,960 Speaker 1: peak environment to someone these kind of natural pressure points 793 00:42:24,960 --> 00:42:27,000 Speaker 1: for the curve. But now we have not been in 794 00:42:27,040 --> 00:42:28,720 Speaker 1: the view that there's some sort of an auto bubble 795 00:42:28,760 --> 00:42:31,560 Speaker 1: there for lending. UM, although at this point in the cycle, 796 00:42:31,640 --> 00:42:34,760 Speaker 1: you are you know, you do type of cities, pressure points. 797 00:42:34,400 --> 00:42:36,799 Speaker 1: What's the financing picture look like to you? Quickly? We'll 798 00:42:36,840 --> 00:42:38,200 Speaker 1: come back and talk more in a moment. In the 799 00:42:38,239 --> 00:42:40,040 Speaker 1: last thirty seconds we got here before the break. Has 800 00:42:40,080 --> 00:42:43,160 Speaker 1: the financing picture look yeah, it's okay. I mean we 801 00:42:43,160 --> 00:42:44,840 Speaker 1: think we're seeing the linquent is kind of you know, 802 00:42:44,880 --> 00:42:47,200 Speaker 1: move up a little bit to use car pricing pressures 803 00:42:47,239 --> 00:42:49,360 Speaker 1: having a bit of an impact. If you're you know, 804 00:42:49,440 --> 00:42:51,640 Speaker 1: long pick off the trucks which has a lot less 805 00:42:51,719 --> 00:42:54,120 Speaker 1: leasing than sedance, we think you're in better shape, which 806 00:42:54,120 --> 00:42:56,920 Speaker 1: is why in our selectivity we prefer the max pick 807 00:42:57,000 --> 00:42:59,719 Speaker 1: up exposure that you can find. But generally we're seeing 808 00:42:59,719 --> 00:43:01,960 Speaker 1: what you typically see you know at this stage later 809 00:43:02,080 --> 00:43:04,840 Speaker 1: on in the cycle. Um. But you know, as the 810 00:43:04,920 --> 00:43:08,120 Speaker 1: last cycle proved um, you know, use vehicle prices strengthen 811 00:43:08,239 --> 00:43:10,640 Speaker 1: very quickly after the last procession because you know, card 812 00:43:10,640 --> 00:43:13,360 Speaker 1: density came down quickly, so some there's some natural hedges 813 00:43:13,440 --> 00:43:16,960 Speaker 1: here in terms of the cyclical exposure reentertainment Colley, So 814 00:43:17,040 --> 00:43:18,600 Speaker 1: do you go thrill to have them on today? After 815 00:43:18,640 --> 00:43:21,800 Speaker 1: the shock yesterday of the auto report will continue with 816 00:43:21,880 --> 00:43:25,480 Speaker 1: Mr mccaulley and talk about individual securities here in a 817 00:43:25,560 --> 00:43:27,360 Speaker 1: moment any time. I want to ask you about what 818 00:43:27,400 --> 00:43:30,200 Speaker 1: we heard from David Einhorn if green Light Capital last 819 00:43:30,239 --> 00:43:32,320 Speaker 1: week at proposal that he made for a new share 820 00:43:32,320 --> 00:43:34,279 Speaker 1: of structure for GM. How did you react to what 821 00:43:34,840 --> 00:43:37,560 Speaker 1: he's proposed on the heels of that announcement. What more 822 00:43:37,560 --> 00:43:39,560 Speaker 1: information do we have about how that might play out 823 00:43:39,560 --> 00:43:43,360 Speaker 1: and what management thinks of it. Rating agency said that 824 00:43:43,400 --> 00:43:45,479 Speaker 1: there will be a risk of of GM's credit ratings 825 00:43:45,520 --> 00:43:47,920 Speaker 1: falling below investment grade, which would be a serious issue 826 00:43:47,920 --> 00:43:50,120 Speaker 1: at this stage of the cycle for any company. So 827 00:43:50,160 --> 00:43:52,000 Speaker 1: we don't really have a formal view, but what we 828 00:43:52,040 --> 00:43:53,960 Speaker 1: wrote in a note is that the root of the 829 00:43:54,000 --> 00:43:57,239 Speaker 1: GM problem is a perception problem tied to pick up 830 00:43:57,320 --> 00:44:00,399 Speaker 1: trucks and believe it or not, technology and the real 831 00:44:00,400 --> 00:44:03,480 Speaker 1: opportunity have to take their loss making card business, we 832 00:44:03,520 --> 00:44:06,680 Speaker 1: think into something that's much better um in the past, 833 00:44:06,719 --> 00:44:09,000 Speaker 1: you know, buy backs and dividends and certain things that 834 00:44:09,120 --> 00:44:11,000 Speaker 1: we're not really helpful to the stock. And with all 835 00:44:11,040 --> 00:44:13,200 Speaker 1: the view on the last proposal, but well, I think 836 00:44:13,200 --> 00:44:15,000 Speaker 1: the rating agencies with a key voice here, we have 837 00:44:15,040 --> 00:44:16,719 Speaker 1: to kind of see how this play is out. But 838 00:44:16,760 --> 00:44:18,359 Speaker 1: what we really want to focus on was the root 839 00:44:18,400 --> 00:44:20,680 Speaker 1: of the problem, which is a perception problem that we 840 00:44:20,719 --> 00:44:22,520 Speaker 1: think is really the cause of of you know, where 841 00:44:22,600 --> 00:44:26,520 Speaker 1: valuations stand today. Help me with with some fact checking here. 842 00:44:27,120 --> 00:44:29,800 Speaker 1: We've heard from the CEOs of GM and Ford. They've 843 00:44:29,880 --> 00:44:32,719 Speaker 1: you know, made some moves, perhaps not in light of 844 00:44:32,719 --> 00:44:34,960 Speaker 1: what the President has said or asked them to do, 845 00:44:35,000 --> 00:44:37,080 Speaker 1: but they've decided to keep some factories here, move some 846 00:44:37,120 --> 00:44:39,360 Speaker 1: production here to the US, and that's been in the 847 00:44:39,360 --> 00:44:41,560 Speaker 1: works for for a long time. Something that struck me 848 00:44:41,560 --> 00:44:44,239 Speaker 1: when I heard Mark Fields talk after one of these 849 00:44:44,239 --> 00:44:45,840 Speaker 1: one of these news items, was this is something that 850 00:44:45,880 --> 00:44:49,560 Speaker 1: made financial sense, didn't have anything to do with with politics. 851 00:44:50,160 --> 00:44:52,239 Speaker 1: Is there truth to that is? And if that's the case, 852 00:44:52,680 --> 00:44:54,319 Speaker 1: why did it take the company so long to do 853 00:44:54,360 --> 00:44:57,200 Speaker 1: what it's done? Sure? Yeah, no, absolutely. And there's something 854 00:44:57,200 --> 00:44:59,760 Speaker 1: we wrote about even last night that well, we're watching 855 00:44:59,760 --> 00:45:03,440 Speaker 1: for how does the industry react as auto sales plateau? 856 00:45:03,480 --> 00:45:05,200 Speaker 1: And I mean to be talking last segments about some 857 00:45:05,239 --> 00:45:07,480 Speaker 1: of the pressure points that you're seeing. And certainly, you know, 858 00:45:07,480 --> 00:45:09,400 Speaker 1: one of the questions we've gotten for an investors of 859 00:45:09,440 --> 00:45:12,640 Speaker 1: the past few years is why are automakers adding capacity 860 00:45:12,760 --> 00:45:15,799 Speaker 1: when auto sales are plaque coming? You see companies take 861 00:45:15,880 --> 00:45:19,400 Speaker 1: that back, Yeah, you kind of score point for rational 862 00:45:19,480 --> 00:45:22,560 Speaker 1: behavior whause exactly what you want to see um at 863 00:45:22,560 --> 00:45:25,120 Speaker 1: this point of the cycle. So there's a lot of 864 00:45:25,120 --> 00:45:27,960 Speaker 1: capacity coming in and we have to watch that very carefully. Yeah, 865 00:45:27,960 --> 00:45:29,640 Speaker 1: I gotta look at a chart, and if I want 866 00:45:29,680 --> 00:45:31,479 Speaker 1: to look at a long term chart to get forward, 867 00:45:31,480 --> 00:45:33,160 Speaker 1: because they're the only ones that didn't go out of business, 868 00:45:33,200 --> 00:45:35,600 Speaker 1: I guess I could look at the Europeans as well. 869 00:45:36,120 --> 00:45:39,080 Speaker 1: Sell me here, and why is an institution or a 870 00:45:39,120 --> 00:45:43,480 Speaker 1: long term retail investor I want to own these dogs? 871 00:45:43,640 --> 00:45:47,480 Speaker 1: I mean they're cyclical, six percent total return for four 872 00:45:47,600 --> 00:45:50,520 Speaker 1: in the last ten years. Help me? Or are they 873 00:45:50,520 --> 00:45:52,919 Speaker 1: going to become like the airline stocks where they grow 874 00:45:53,000 --> 00:45:56,480 Speaker 1: up and finally deliver massive cash flow or is it 875 00:45:56,520 --> 00:46:01,319 Speaker 1: the same old cyclical story of metal benders in Detroit? Short? 876 00:46:01,320 --> 00:46:03,279 Speaker 1: So clear, you know we we don't recommend Ford where 877 00:46:03,320 --> 00:46:05,560 Speaker 1: neutral on Ford have been for the last few years, 878 00:46:05,560 --> 00:46:08,680 Speaker 1: but the GM we we do recommend sisty one dollar 879 00:46:08,760 --> 00:46:10,640 Speaker 1: price target. And here's the thing that most of the 880 00:46:10,680 --> 00:46:13,600 Speaker 1: profits here come from a segment that is bigger than 881 00:46:13,600 --> 00:46:15,799 Speaker 1: it's been in many many years. Pick up trucks. Three 882 00:46:15,800 --> 00:46:20,200 Speaker 1: players have over market share. Think about how fragmented the 883 00:46:20,239 --> 00:46:22,920 Speaker 1: global automotive industry is, and you have these companies and 884 00:46:22,920 --> 00:46:25,759 Speaker 1: this is why we're seeing earnies confirmations in spite of 885 00:46:25,800 --> 00:46:27,360 Speaker 1: all the pressure points that we talked about in the 886 00:46:27,400 --> 00:46:29,680 Speaker 1: last segment. Um At the same time, you have, I think, 887 00:46:29,719 --> 00:46:32,319 Speaker 1: but what is an overlooked that's call a self help 888 00:46:32,400 --> 00:46:34,879 Speaker 1: story over the longer term where you know a lot 889 00:46:34,920 --> 00:46:37,919 Speaker 1: of talk to me about autonomous and shared mobility connected cards. 890 00:46:37,960 --> 00:46:39,520 Speaker 1: We do a lot of work on this, and a 891 00:46:39,520 --> 00:46:42,120 Speaker 1: lot of investors tend to you rightfully focus on the 892 00:46:42,160 --> 00:46:45,080 Speaker 1: suppliers who will provide content on these more advanced vehicles, 893 00:46:45,120 --> 00:46:47,680 Speaker 1: but there's not as much attention on who the future 894 00:46:47,719 --> 00:46:51,719 Speaker 1: mobility providers and specifically the mobility networks of tomorrow are 895 00:46:51,800 --> 00:46:53,640 Speaker 1: going to be. And we think that that in the 896 00:46:53,760 --> 00:46:57,760 Speaker 1: automaker space, there's gonna be some select opportunities, winners and losers, 897 00:46:58,040 --> 00:47:00,160 Speaker 1: and we think GM is one of those opportunities. Me 898 00:47:00,280 --> 00:47:03,399 Speaker 1: here though with their GM dividend payout ratio, they got 899 00:47:03,400 --> 00:47:07,759 Speaker 1: five six seven gazillion dollars in free cash flow. They're 900 00:47:07,840 --> 00:47:10,000 Speaker 1: running it like they did thirty years ago. When do 901 00:47:10,080 --> 00:47:13,879 Speaker 1: I get a real dividend payout from these people? Yeah? 902 00:47:13,920 --> 00:47:16,480 Speaker 1: I mean they're paying on a pretty healthy dividend of 903 00:47:16,680 --> 00:47:19,080 Speaker 1: about two and a half billion per year, they're buying backstops, 904 00:47:19,080 --> 00:47:22,279 Speaker 1: they've got a pretty um tight capital allocation policy from 905 00:47:22,440 --> 00:47:25,160 Speaker 1: all free cash flow going to shareholders and either investing 906 00:47:25,200 --> 00:47:28,239 Speaker 1: in UM this year incremental six and fimillion dollars just 907 00:47:28,360 --> 00:47:31,600 Speaker 1: an autonomous UM technology alone. So we actually we're seeing 908 00:47:31,640 --> 00:47:34,560 Speaker 1: investment and we're seeing some pretty decent kind of capital returns. 909 00:47:35,040 --> 00:47:36,960 Speaker 1: Thank you so much it Tay mcaulley with US was 910 00:47:37,000 --> 00:47:39,960 Speaker 1: sitting greatly appreciate it. Any auto. This is what we 911 00:47:40,040 --> 00:47:42,360 Speaker 1: love to do. This is what this is what surveillance 912 00:47:42,400 --> 00:47:45,680 Speaker 1: is about. Jamie Butters one day, who's a genius on 913 00:47:45,920 --> 00:47:54,399 Speaker 1: the whole Detroit thing, and then an expert like Mr mccaulley. 914 00:47:56,239 --> 00:48:00,560 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 915 00:48:00,680 --> 00:48:05,719 Speaker 1: listen to interviews on iTunes, SoundCloud, or whichever podcast platform 916 00:48:05,880 --> 00:48:09,440 Speaker 1: you prefer. I'm out on Twitter at Tom Keene, David 917 00:48:09,480 --> 00:48:13,120 Speaker 1: Gura is at David Gura. Before the podcast, you can 918 00:48:13,239 --> 00:48:29,480 Speaker 1: always catch us worldwide. I'm Bloomberg Radio, brought you by 919 00:48:29,719 --> 00:48:33,480 Speaker 1: Bank of America Mary Lynch, dedicated to bringing our clients 920 00:48:33,560 --> 00:48:37,720 Speaker 1: insights and solutions to meet the challenges of a transforming world. 921 00:48:38,200 --> 00:48:42,040 Speaker 1: That's the power of global connections. Mary Lynch Pierce Federan 922 00:48:42,080 --> 00:48:45,480 Speaker 1: Smith Incorporated, Member s I p C,