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Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you

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Speaker 1: along with my co host Lisa Brahma Wicks. Each day

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Speaker 1: we bring you the most noteworthy and useful interviews for

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Speaker 1: you and your money. Whether at the grocery store or

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Speaker 1: the trading floor, find a Bloomberg Penl podcast on Apple

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Speaker 1: Podcast or wherever you listen to podcasts, as well as

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Speaker 1: at Bloomberg dot com. When there are crises, there's a

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Speaker 1: question of leadership. How should a leader go around getting

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Speaker 1: people to come together and get past the difficulties they're

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Speaker 1: they're currently dealing with. To answer that question, we have

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Speaker 1: David McCourt, founder and Chief executive officer of Granahan McCourt Capital,

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Speaker 1: also the chair of National Broadband Ireland, an entrepreneur for

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Speaker 1: years in the technology, media and telecommunications space who has

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Speaker 1: been a top many companies, many production outfits. Reading Rainbow

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Speaker 1: you want an Emmy for It? I loved that show

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Speaker 1: when I was a little kid. You're also the author

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Speaker 1: of Total Rethink Why Entrepreneurs should Act like Revolutionaries. When

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Speaker 1: you're leading through a crisis, how do you even begin

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Speaker 1: to think about first steps? When messaging your to your staff,

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Speaker 1: to the people who you are leading. Thanks Thanks Lisa. Well,

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Speaker 1: I think the first thing you want to do, Lisa

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Speaker 1: is make your issue and the people you're leading issue

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Speaker 1: the same. That's the very first thing you want to do.

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Speaker 1: And you want to have empathy, and you want to

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Speaker 1: spend as much time listening as you do talking, and

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Speaker 1: you want to be consistent. And I think those are

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Speaker 1: the things you're seeing. Some people in the business will

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Speaker 1: do very very well and some excuse me, and some

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Speaker 1: not to do well at all. And I think on

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Speaker 1: the on the government side, we're seeing a real inconsistency

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Speaker 1: around those types of leadership qualities, which is contributing to

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Speaker 1: the chaos and the problems we're having right now, which

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Speaker 1: are obviously not only affecting us as a society it

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Speaker 1: has it's just not good business as well. So it's interesting, David.

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Speaker 1: You know technology, we think about social media, the ways

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Speaker 1: leaders can communicate as so different today. It used to be,

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Speaker 1: you know, you would hear from the White House via

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Speaker 1: some formal press release with the White House stationary. Now

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Speaker 1: it's it's it's a tweet. How has technology changed maybe

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Speaker 1: how leaders get their message across to their followers. Well,

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Speaker 1: it's it's changed everything, right, Uh, Paul, I mean it's

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Speaker 1: it's it's changed overnight. We've all changed the way we

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Speaker 1: do business. But I think I think the big change

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Speaker 1: is yet to come and there's a couple of things

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Speaker 1: that have to happen. Number One, we have to make

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Speaker 1: sure we get connectivity to everyone because right now it's

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Speaker 1: a big urban world divide. Is roughly three million people

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Speaker 1: a week that are moving from ral to urban because

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Speaker 1: rural life in America and other parts of the world

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Speaker 1: where I do business the UK and Ireland has just

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Speaker 1: been decimated. And we need to make connectivity human, right

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Speaker 1: like Keanan water not so they get Netflix, so they

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Speaker 1: have educational opportunities, health care opportunities, jobs, products and services

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Speaker 1: to make their lives better. So that's the big change

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Speaker 1: right now. It's zoom calls, and it's it's you know,

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Speaker 1: being able to use social media to communicate. And when

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Speaker 1: you think of social media, Paul, I think you want

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Speaker 1: to really be thinking of that. That is Internet two

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Speaker 1: point oh. Right. Internet one point oh was was was

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Speaker 1: just moving once and zero is more efficiently. Internet two

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Speaker 1: point oh was was people communicating with machines uh at pace.

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Speaker 1: But Internet three point oh when machines are communicating with

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Speaker 1: machines at scale. That's going to be a total game

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Speaker 1: change of all businesses, all your listeners that are gonna

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Speaker 1: have to rethink the businesses when that happens. And of course,

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Speaker 1: to make it fair, we have to make sure we

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Speaker 1: have connectivity to everyone. And I would argue that a

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Speaker 1: lot of people are already making this shift mentally right now,

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Speaker 1: based on what we've experienced with the pandemic, with more

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Speaker 1: people working from home, trying to homeschool or not home schooling.

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Speaker 1: But I'm just wondering, you know, especially as we get

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Speaker 1: the jobs report tomorrow. As a leader, how do you

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Speaker 1: offer reassurance to people that they're not going to become obsolete,

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Speaker 1: they're not going to be earning much much less. How

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Speaker 1: do you give that kind of confidence and rally support

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Speaker 1: at a time of such massive technological transformation. Well maybe

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Speaker 1: maybe that that might be the wrong question, because I

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Speaker 1: don't think we can if we don't make real changes,

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Speaker 1: because there's some systemic problems that we're not dealing with.

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Speaker 1: Our education, that training is relatively flat for last fifty years.

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Speaker 1: If you saw a classroom fifty years ago, in years

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Speaker 1: start pitch of a classroom today, they look alike. The

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Speaker 1: types of jobs we need in America are at a

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Speaker 1: slope upward slope that's deeper than it's ever been. The

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Speaker 1: traditional jobs are at a downward slope that sleep steeper

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Speaker 1: than we've ever seen. So we can't give people a

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Speaker 1: fake sense of confidence. We need to get people ready

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Speaker 1: for the jobs of the future, and and we're not

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Speaker 1: really doing that. So so you said that people have

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Speaker 1: already made that the jump. People have made the jump

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Speaker 1: that have a job. So if you have a job,

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Speaker 1: like like the three of us do, then you can

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Speaker 1: make the change. You can adjust your life, you can

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Speaker 1: do zoom calls, you can do an interview on Bloomberg

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Speaker 1: Radio from in Los Angeles right now when you're in

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Speaker 1: New York. But if you don't have a job after

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Speaker 1: this is over, you're gonna be going into a market

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Speaker 1: with the jobs aren't ever coming back, and the need

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Speaker 1: for training for new jobs has never been so steep.

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Speaker 1: So I think we have to address the systemic issues

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Speaker 1: rapidly um as opposed to pretending that everything is going

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Speaker 1: to be okay. Because we have unemployment at the levels

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Speaker 1: we have this pandemic that you know is as fearful

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Speaker 1: as the one of nineteen eighteen. We have riots that

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Speaker 1: are that are far more expansive than the nine. So

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Speaker 1: we've got a lot of things going on that we

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Speaker 1: have to deal with, and the best way to deal

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Speaker 1: with it, I think is not to give people confidence

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Speaker 1: that it's gonna be okay, give people confidence that we're

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Speaker 1: really going to address the systemic issues that we have.

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Speaker 1: I think that's that's what the game changes, and I

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Speaker 1: think that's what everybody wants to hear. And by the way,

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Speaker 1: I know, this is the business show, so it's good

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Speaker 1: to business. The the it's good for business that we

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Speaker 1: give people their dignity and we give people a sense

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Speaker 1: that we're going to address these systemic employment issues. That's

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Speaker 1: my view anyway. David McCourt, thank you so much for

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Speaker 1: joining us. We really appreciate your thoughts and Commentsary David McCourt.

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Speaker 1: He is the founder and CEO of Granahan McCourt Capital,

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Speaker 1: also chairman of the National Broadbad Ireland and Lisa Also.

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Speaker 1: He's also the author of Total Rethink Why Entrepreneurs Should

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Speaker 1: Act Like Revolutionaries. There's certainly need, Lisa, I think we

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Speaker 1: can all agree as we look around what's going on

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Speaker 1: over the last several months and really over the last

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Speaker 1: we can have as a really to some of the

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Speaker 1: civil unrest for leadership both at the national level, UH

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Speaker 1: and at the local level as well. Yeah, this is

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Speaker 1: a scary time. It's a scary time for everyone, and

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Speaker 1: it has brought about a lot of changes rapidly, people

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Speaker 1: saying that it is accelerated, brought forward by years, some

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Speaker 1: of the trends that we had seen, in addition to

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Speaker 1: shattering a lot of people's notions of safety, of healthcare

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Speaker 1: and and beyond. And and there's a question of how

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Speaker 1: we get beyond this, Who will bring us there? How

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Speaker 1: do we get the confidence and the support in order

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Speaker 1: to build whatever comes next? And Paul, that's going to

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Speaker 1: be something that we continue to ask throughout the months ahead. Boy.

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Speaker 1: Airline stocks are just ripping today, America Airlines up almost United,

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Speaker 1: up about four Delta, up about eleven percent. And that's

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Speaker 1: on news that American Airlines says it's gonna boosting in

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Speaker 1: July by about seventy as demand goes back stronger than expected.

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Speaker 1: Mary Steinenstein, us airlines reporter for Bloomberg News, joins us. Mary,

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Speaker 1: give us a sense of how what really American is

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Speaker 1: saying here about the demand side of their business, well,

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Speaker 1: they're saying that they've seen demand come back a little

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Speaker 1: bit quicker than they had expected, particularly in domestic markets

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Speaker 1: and particularly in states that have already lifted some of

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Speaker 1: the quarantine rules, like Florida and like Texas. They're seeing

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Speaker 1: a lot of people who want to travel to UM

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Speaker 1: to destinations like beaches, amusement parks that may be reopening

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Speaker 1: things like that, and they're also seeing a little bit

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Speaker 1: of improvement in domestic business demand. All right, so this

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Speaker 1: is actually coming off a very difficult period. How much

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Speaker 1: ahead of expectations is the surge and demand the American

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Speaker 1: Airlines is describing here. They didn't really put out a

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Speaker 1: lot of numbers in terms of what they had expected

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Speaker 1: versus what they're seeing, UM, but you know, they what

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Speaker 1: they're doing is they're going to increase the number of

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Speaker 1: flights on their busiest days next months to four thousand,

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Speaker 1: and that's up from twenty three hundred in June. So

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Speaker 1: they've been planning clearly, you know, for around that twenty

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Speaker 1: three d June level, and now that all of a

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Speaker 1: sudden they're bumping up to four thousand UM And part

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Speaker 1: of the reason for that is they're saying that their

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Speaker 1: load factor, the percentage of seats filled for plane climbed

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Speaker 1: to fifty five percent last week, down from in April,

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Speaker 1: or up from fIF in April. And what's important to

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Speaker 1: note was before COVID, load factors on US airlines were

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Speaker 1: like in the high eighty percent, So they've fallen a lot.

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Speaker 1: They're still way below where they were a year ago,

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Speaker 1: but they definitely are on the uptick. Are they gonna

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Speaker 1: be selling middle seats? Is anybody can buy a middle

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Speaker 1: seat anymore? You know? Um long term? All the airlines

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Speaker 1: have said they can't block middle seats long term. Right now,

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Speaker 1: the only airlines that are guaranteeing the block middle seats

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Speaker 1: are Delta and Jet Blue. The others are saying, you know,

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Speaker 1: we'll space you out as best we can UM or

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Speaker 1: will allow you to move when that's possible so that

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Speaker 1: you're not sitting next to other people. But yet clearly

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Speaker 1: that's going to have to go away because they can't

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Speaker 1: make money by blocking off a third of the seats

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Speaker 1: on their planes. Well, Mary, I'm curious about the liability

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Speaker 1: of airline carriers if someone does get sick on one

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Speaker 1: of their flights. Could they be held liable if they

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Speaker 1: don't provide masks and if they don't require a certain

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Speaker 1: level of air filtration and sanitation. Right, A lot of

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Speaker 1: the airlines, effect all the airlines have enacted very sophisticated,

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Speaker 1: very up to date UM cleaning processes for their aircraft.

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Speaker 1: And they'll tell you that the filters on their planes

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Speaker 1: are our hospital quality filters, and that the air is

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Speaker 1: recirculated very often. It's not like once a flight that

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Speaker 1: the air recirculates or that just recirculates air within the cabin.

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Speaker 1: Um they're doing, you know, electrostatic cleaning. UM, they're taking

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Speaker 1: all kinds of steps. Most of them are will give

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Speaker 1: you a mask in a little packet of disinfectant when

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Speaker 1: you get on the plane. UM. A number of them

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Speaker 1: are requiring masks to board the aircraft. And so I think,

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Speaker 1: you know, as long as they are complying with CDC

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Speaker 1: recommendations and doing everything that they can, I'm not sure

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Speaker 1: how viable UM a lawsuit would be about them, although

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Speaker 1: I'm not a legal expert. Mary, what's the you mentioned

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Speaker 1: load factors in the high eighties. It seems like every

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Speaker 1: flight I've been on in the last couple years has

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Speaker 1: been a load factor. What's the load factor they need

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Speaker 1: to to kind of break even start making money. UM.

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Speaker 1: That's a big question that everybody asked, is what what

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Speaker 1: do you need to be break even? UM? You know,

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Speaker 1: the airlines today are all still burning through millions of

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Speaker 1: dollars a day. UM. The the government aid they got

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Speaker 1: helped them with some payroll costs. But you know, although

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Speaker 1: you have this bright outlook or brightened outlook on more flights,

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Speaker 1: you know, all these airlines are still UM, plan need

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Speaker 1: to cut jobs. You know, United and American and both

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Speaker 1: said we're going to cut our management and support staff.

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Speaker 1: They have tens of thousands of employees who have already

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Speaker 1: taken leaves or early retirement UM. And they are mostly

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Speaker 1: offering a second round now of leave for employees to take.

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Speaker 1: So although it, you know, it looks a little bit brighter,

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Speaker 1: the industry is still hurting a lot and it's going

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Speaker 1: to be a long lasting impact that the carriers are saying,

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Speaker 1: you know, we know when demand improves and we come

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Speaker 1: out of this, we're just gonna be a lot smaller

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Speaker 1: than we were before it happened. I want to talk

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Speaker 1: about the roots that the airlines are willing to fly.

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Speaker 1: How much is this really just focused on domestic flights

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Speaker 1: and how limited our flights to areas that have been

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Speaker 1: harder hit by COVID? And then of course there's a

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Speaker 1: question of international travel. How are the airline carriers dealing

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Speaker 1: with that? Right? The airlines have not added a lot

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Speaker 1: of international travel. Um. You know, right after um, the

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Speaker 1: COVID pandemic really started spreading, Um, they basically stopped all

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Speaker 1: the international flying, I mean playing. Airlines like American was

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Speaker 1: making a handful of flights internationally each week, so it

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Speaker 1: was a very very small amount. They are adding back, um,

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Speaker 1: some international routes now, um, but they're also delaying some

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Speaker 1: international routes. For example, American has added back a few

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Speaker 1: for June, but they've delayed by another month until July

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Speaker 1: or beyond, a whole lot more of the international routes

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Speaker 1: that they had had planned to start. Part of the

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Speaker 1: reason for that is there's confusion about well, you know

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Speaker 1: what country is listed the restrictions. What countries are gonna

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Speaker 1: cause me to quarantine for fourteen days when I get there?

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Speaker 1: You know what? Tourist attractions in Europe are open. So

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Speaker 1: there's a lot of confusion, and so people are more

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Speaker 1: hesitant to book internationally, UM, domestically. UM. You know. The

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Speaker 1: only place that is got a quarantine requirement when you

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Speaker 1: fly there in places Hawaii, and that's really dampening down

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Speaker 1: travel to Hawaii. Southwest for example, has not restarted uh,

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Speaker 1: their primary Hawaii service yet because of that. Mary Schlagenstein,

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Speaker 1: thank you so much. She covers all things airlines for

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Speaker 1: us at Bloomberg News. Well's another difficult jobless claims number today.

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Speaker 1: We're looking about forty million people since the beginning of

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Speaker 1: the pandemic have fouled jobs claims. Real question is how

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Speaker 1: are the gig economy employees being counted here and how

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Speaker 1: are they faring during this economy? For that, we're welcome, Uh,

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Speaker 1: We're pleased to have John Chuangu, CEO and co founder

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Speaker 1: of Aquinutu discusses the gig economy. So, John, thanks so

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Speaker 1: much for joining us here. Give us a sense of

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Speaker 1: how gig economy employees are faring here in this economic environment. Yeah,

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Speaker 1: gig economy employees are not uh, not doing well. They

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Speaker 1: are a very large part of the record numbers of

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Speaker 1: unemployed people uh that we're having. Um, and more importantly,

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Speaker 1: because they are not really part of the social safety net.

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Speaker 1: Um they do not get, they have a lot more

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Speaker 1: difficulty getting an employment and by large they do not

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Speaker 1: have sick pay and they do not have health insurance

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Speaker 1: from their employer, so they are they are definitely hurting

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Speaker 1: more um than the average employee. Well, so I'm wondering

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Speaker 1: going forward whether we're going to see a sea change

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Speaker 1: in some of the lack of protections that gig workers

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Speaker 1: have based on the fact that the government has had

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Speaker 1: to step in in big in a big way to

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Speaker 1: back up these workers and may push employee employers to

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Speaker 1: do more. I certainly hope. So right now, there's a

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Speaker 1: great deal of inequality in corporate America, even in some

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Speaker 1: of the biggest, most richest American companies. You have really

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Speaker 1: two classes of employees, one regular w two employees who

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Speaker 1: get who might get great benefits and retirement plan ends

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Speaker 1: and lots of perks. But then you have the contingent

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Speaker 1: contractors who are who are combined you know, gig gig

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Speaker 1: economy employees as well as temporary contractors, and they do

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Speaker 1: not get benefits, and that that really needs to change,

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Speaker 1: and it's it's changing by companies on their own taking

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Speaker 1: some initiatives. They've been some companies taking steps a few

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Speaker 1: a few ones recently, UM, but it might take government

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Speaker 1: involvement to really change it. You have initiatives like a

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Speaker 1: B five in California, UM where some UM where the

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Speaker 1: where the California government has basically passed laws making it

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Speaker 1: a lot more difficult to hire people as ten ninety

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Speaker 1: nine or contractors, which will kind of force UM at

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Speaker 1: least basic employment protections on a lot of UM businesses.

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Speaker 1: And and and I think we shall support that because

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Speaker 1: it's only fair for the workers. So John, I guess

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Speaker 1: you know we saw over the last several year as

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Speaker 1: I think about Uber and Lift and other gig economy companies,

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Speaker 1: you know, a real sense that, gee, this is a

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Speaker 1: real cool way to think about work. It's flexible. I

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Speaker 1: can work when I want, where I want, kind of

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Speaker 1: set my own hours, be my own boss. There's a big,

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Speaker 1: big move towards the gig economy. And I always joke

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Speaker 1: that anytime you walk into a Starbucks anywherewhere around the country,

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Speaker 1: it seems like the entire Starbucks is people with you know,

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Speaker 1: computers open doing a certain gig economy jobs. That's going

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Speaker 1: to change at all. On the other side of this pandemic. Look,

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Speaker 1: there's a really big opportunity here to make the gig

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Speaker 1: economy great. That's sort of flexibility that you're talking about,

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Speaker 1: and the easy access the jobs is wonderful and we

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Speaker 1: should really be proud of of economy that has created

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Speaker 1: this and the entrepreneurship that has UH has built UH

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Speaker 1: such flexibility and work. Now there is a downside though,

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Speaker 1: because um as they built these systems, they did very quickly,

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Speaker 1: and they wanted to have the as much HOSS advantage

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Speaker 1: as possible, so they decided to pay people as contractors,

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Speaker 1: which means you don't pay employment taxes, and you don't

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Speaker 1: do minimum wage, and you don't overtime laws. As an

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Speaker 1: effect you and and you cut out all the social services. Well,

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Speaker 1: this has a really big impact, and it's been magnified

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Speaker 1: by the pandemic. So my hope is what these companies

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Speaker 1: will do, maybe with some prodding from the government, is

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Speaker 1: keep the gig economy and keep all the great benefits,

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Speaker 1: but add the social protections such as minimum wage, unemployment insurance,

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Speaker 1: you know, overtime laws that all companies have really provided

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Speaker 1: their workers for the last hundred years if something. If

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Speaker 1: if companies like McDonald's and Starbucks and Walmart to pride

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Speaker 1: these protections UM for their employees, I'm sure gig economy

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Speaker 1: companies can do the same. John, I'm sure you've heard

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Speaker 1: this argument. UH. And just to give some perspective, you

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Speaker 1: co founded this company in while you are an under

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Speaker 1: graduated at Harvard. UH. It's fascinating to see how much

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Speaker 1: the world has transformed in that time with the focus

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Speaker 1: on the gig economy. What do you say to people

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Speaker 1: who counter your argument about protections and say that this

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Speaker 1: market would but not be nearly as dynamic if companies

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Speaker 1: had to pay the kind of overhead required of companies

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Speaker 1: that do have full time, non gig workers. No, I

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Speaker 1: I I disagree with that UM UH Fully Basically, America

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Speaker 1: wants companies that could provide value to consumers and pay

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Speaker 1: their workers a fair wage. UH. They do not want

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Speaker 1: UM to UM participate in businesses that mistreat their workers UM.

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Speaker 1: And that's why many American companies that are the most

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Speaker 1: successful have managed to do both. UM. What gig economy

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Speaker 1: companies are saying is that, hey, we can't UM provide

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Speaker 1: great value to customers unless we underpay our workers. And

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Speaker 1: if that is the case, which is not the case,

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Speaker 1: but if that was the case, Uh, then there should

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Speaker 1: be no gig economy because you cannot essentially provide great

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Speaker 1: services while miss treating your workers. Americans don't want that.

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Speaker 1: John Joying, thank you so much for being with those,

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Speaker 1: co founder, chairman and chief executive officer of aquand here

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Speaker 1: in New York talking about that gig economy, which has

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Speaker 1: very much been in focus. And Paul, when we parse

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Speaker 1: the jobs data tomorrow, one big question mark is a

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Speaker 1: number of people receiving the pandemic unemployment insurance, a separate

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Speaker 1: bucket that covers the gig workers. Well. After the significant

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Speaker 1: sell off we saw in March, in most financial markets,

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Speaker 1: it's been extraordinary rebound for a lot of the riskiest

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Speaker 1: assets out that. Do you think about the equity markets

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Speaker 1: up nearly off the lows. Uh. It's also applied to

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Speaker 1: certain extents to the emerging markets. And let's get the

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Speaker 1: latest for all things emerging markets. We turned to Damien Sassaur.

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Speaker 1: He's the chief Emerging Markets credit streat just for Bloomberg Intelligence.

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Speaker 1: So Damian, give us a sense of kind of how

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Speaker 1: your markets, the riskier assets classes out there emerging markets

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Speaker 1: have performed over the last week or so. Yeah, you know,

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Speaker 1: I mean they're definitely snapping back. But you know, look,

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Speaker 1: I mean, Paul, we've worked together for four year now,

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Speaker 1: four years now, you know. So in my prior lifetime,

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Speaker 1: you know, you're aware I ran a large asset manager

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Speaker 1: with a focus on em but more importantly to focus

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Speaker 1: on the frontier markets. Right. So when it comes to

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Speaker 1: pitching numerous projects, you know the folks down at Connecticut

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Speaker 1: and seven nineteen Street, I'm talking about the World Bank

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Speaker 1: and the i m F now for funding for development

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Speaker 1: of power deals or agriculture. I mean, I can tell

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Speaker 1: you without fail, multilaterals, including all their x in banks

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Speaker 1: and the financial institutions that support them, they must manage

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Speaker 1: their own balance sheet risk and this means managing exposure

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Speaker 1: across countries and sectors. Paul. So you know, when we

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Speaker 1: talk about debt relief from the G seven, and we

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Speaker 1: talk about all the IMF lending facilities that are going

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Speaker 1: on for the me the debate isn't about relief, It's

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Speaker 1: about how the relief is delivered. And I've got two

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Speaker 1: words for you here, transparency and control and I fear

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Speaker 1: when the dust those we're going to have little of

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Speaker 1: either to lean on when times gets off. All right, well,

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Speaker 1: let's talk about the current situation and who needs the

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Speaker 1: debt relief the most. As an investor, if you channel

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Speaker 1: where you were back from two thousand sixteen, where would

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Speaker 1: you be looking for, you know, the best place to

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Speaker 1: basically put your equity in and and say you deserve

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Speaker 1: some sort of relief And I want to be part

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Speaker 1: of your upside. I mean, is there is there a

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Speaker 1: country that you say is deserving? Is that of that?

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Speaker 1: I mean plenty of them. The problem is the problem

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Speaker 1: is how to institutions price that risk? Okay, so let

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Speaker 1: me give you an example here. The I m F

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Speaker 1: is preparing a new credit line with Ecuador. But Lennon Moreno,

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Speaker 1: the president is not going to seek re election, and

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Speaker 1: if he doesn't, there's a reasonable chance that the new

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Speaker 1: government won't be as pro reform. So how does the IMF?

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Speaker 1: How does the World Bank price that risk that the

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Speaker 1: next administration might very well reject any you know, loans

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Speaker 1: they agree to today? Right, so this is a country

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Speaker 1: that's going to have as much as eight billion in

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Speaker 1: an eight billion dollar budget gap. I mean they once

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Speaker 1: went a hundred and eighty years without repaying a bund.

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Speaker 1: They're obviously not a good creditor, you know, So you know,

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Speaker 1: I mean that's that's the risk when you deal with

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Speaker 1: you know, frontier and emerging markets and all that's going

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Speaker 1: on here in the world. And for me again, it

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Speaker 1: comes down to, you know what we're seeing from the

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Speaker 1: G seven This is more forbearance than debt reduction, right,

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Speaker 1: it's not real debt relief. I mean, does the G

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Speaker 1: seven expect to realistically get paid back on these loans?

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Speaker 1: Does the I m F? And more importantly, you know

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Speaker 1: how does the World Bank and political risk instore is

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Speaker 1: out their guard against all of these risks. I mean,

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Speaker 1: it's very difficult to price your Lisa. So what is

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Speaker 1: the market for some of these frontier countries, Damien? I mean,

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Speaker 1: is it is? It is the I m F, the backstop,

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Speaker 1: is that the last lender of last resort or can

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Speaker 1: some of these folks go to say China and go

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Speaker 1: to their check book. Well, you know what it comes

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Speaker 1: down to the two words I mentioned previously, transparency and control.

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Speaker 1: So on the China front, it's all about transparency. You know,

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Speaker 1: we need to know what the debt stock looks like

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Speaker 1: for a potential borrow before lending to them, that's just

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Speaker 1: has to upen and you know right now we don't

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Speaker 1: have much of that right. And then it comes down

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Speaker 1: to control. Even if the moons and the moneys do

431
00:24:06,160 --> 00:24:08,720
Speaker 1: reach who you know, you know that country sures you

432
00:24:08,760 --> 00:24:10,600
Speaker 1: know who's going to control it? You know who's going

433
00:24:10,640 --> 00:24:12,119
Speaker 1: to disperse it? Is it going to go to the

434
00:24:12,119 --> 00:24:13,840
Speaker 1: places that the I m F and the World Bank

435
00:24:13,920 --> 00:24:15,919
Speaker 1: and and and the slenders wanted to go? You know,

436
00:24:15,960 --> 00:24:19,480
Speaker 1: are we going to trust that the municipalities, the governments

437
00:24:19,480 --> 00:24:21,320
Speaker 1: that are in power are going to do that for

438
00:24:21,359 --> 00:24:24,600
Speaker 1: them as an extension of them. You know, the verdict

439
00:24:24,640 --> 00:24:26,280
Speaker 1: is still owed. And you know, these are the real

440
00:24:26,359 --> 00:24:28,480
Speaker 1: challenges that go hand in hand with trying to provide

441
00:24:28,640 --> 00:24:31,560
Speaker 1: relief to all of these markets that so desperately needed. Paul,

442
00:24:32,160 --> 00:24:34,720
Speaker 1: this all sounds pretty bad, and it seems like you

443
00:24:34,720 --> 00:24:37,720
Speaker 1: wouldn't want to invest in developing markets. And yet if

444
00:24:37,760 --> 00:24:41,439
Speaker 1: you take a look at developing market currencies, they've been

445
00:24:41,440 --> 00:24:44,320
Speaker 1: on a tear recently. I mean they've been gating quite

446
00:24:44,320 --> 00:24:45,760
Speaker 1: a bit. And this has to do with the dollar,

447
00:24:45,840 --> 00:24:49,080
Speaker 1: which is weekend pretty steadily. How much can you just

448
00:24:49,200 --> 00:24:52,679
Speaker 1: go into a basket VM currencies here based on a

449
00:24:52,720 --> 00:24:56,760
Speaker 1: week or dollar call going forward and nothing else. I mean,

450
00:24:56,800 --> 00:24:58,480
Speaker 1: I wouldn't do that. I mean, I'd be taking with

451
00:24:58,480 --> 00:25:00,399
Speaker 1: the market different I'm sure. I mean, I you know me,

452
00:25:00,480 --> 00:25:02,960
Speaker 1: I'm a risk averse guy. Look, there's no question about it,

453
00:25:03,000 --> 00:25:04,840
Speaker 1: you know, and you invested in the market marrow and

454
00:25:04,920 --> 00:25:06,800
Speaker 1: may and go away, and I was wrong. I'm the

455
00:25:06,800 --> 00:25:08,280
Speaker 1: first one to say that mean and say, you know,

456
00:25:08,359 --> 00:25:10,440
Speaker 1: but I'm I'm a prudent man having worked in these

457
00:25:10,480 --> 00:25:12,760
Speaker 1: markets and knowing what the real risks are. And you know,

458
00:25:12,880 --> 00:25:15,480
Speaker 1: what you're seeing an emerging market, specifically on the equity side,

459
00:25:15,560 --> 00:25:17,440
Speaker 1: is very much what we're seeing here in US equity

460
00:25:17,840 --> 00:25:20,720
Speaker 1: US equities, where it's it's it's all at the top,

461
00:25:20,800 --> 00:25:23,119
Speaker 1: you know, it's it's it's the Ali Baba's, it's the

462
00:25:23,119 --> 00:25:26,040
Speaker 1: ten cents, it's the Taiwan semiconductors that are getting fatter.

463
00:25:26,280 --> 00:25:29,200
Speaker 1: It's not the smaller commodity producers we might find in

464
00:25:29,240 --> 00:25:31,119
Speaker 1: many of these countries that make them tick. And so

465
00:25:31,440 --> 00:25:34,440
Speaker 1: it's not everyone participating. And I think you know that

466
00:25:34,680 --> 00:25:36,760
Speaker 1: we're seeing that here in the US obviously as well.

467
00:25:37,680 --> 00:25:40,000
Speaker 1: So I see Brent crude here pushing close to forty

468
00:25:40,000 --> 00:25:42,280
Speaker 1: dollars a big rebound. What does that mean is that

469
00:25:42,400 --> 00:25:45,040
Speaker 1: significant enough movers that oil still low not to be

470
00:25:45,119 --> 00:25:47,679
Speaker 1: much of a help for some of these exporting emerging

471
00:25:47,720 --> 00:25:49,920
Speaker 1: market companies. Well, Paul, I mean you have to look

472
00:25:49,920 --> 00:25:51,560
Speaker 1: at the average price over a period of time. So

473
00:25:51,600 --> 00:25:53,639
Speaker 1: when things got really bad for a period there, you

474
00:25:53,640 --> 00:25:55,520
Speaker 1: know a lot of people weren't as overly concerned. I

475
00:25:55,520 --> 00:25:57,560
Speaker 1: mean I wasn't as overly concerned. People still need to

476
00:25:57,560 --> 00:25:59,520
Speaker 1: power their you know, know, their cars and their plants

477
00:25:59,520 --> 00:26:01,560
Speaker 1: and everything us that goes hand in hand. So so

478
00:26:01,800 --> 00:26:03,879
Speaker 1: you know what I think, you know, we're taking a

479
00:26:03,880 --> 00:26:06,200
Speaker 1: step back and now realizing, you know, what are Saudi

480
00:26:06,200 --> 00:26:08,280
Speaker 1: Arabia and Russia? What did the OPEC plus going to

481
00:26:08,359 --> 00:26:10,280
Speaker 1: do here? You know, are they going to be successful

482
00:26:10,280 --> 00:26:13,600
Speaker 1: in pushing these production cuts forward? We know Nigeria and

483
00:26:13,680 --> 00:26:16,080
Speaker 1: Iraq have you know, they're on the out because they've

484
00:26:16,080 --> 00:26:18,639
Speaker 1: been producing far too much based on what they've agreed to.

485
00:26:19,040 --> 00:26:20,800
Speaker 1: And so you know, I do think that you know,

486
00:26:20,800 --> 00:26:22,840
Speaker 1: Saudi and Russia have regained a little bit of a

487
00:26:22,880 --> 00:26:24,560
Speaker 1: toe hold here in the market. I think that should

488
00:26:24,560 --> 00:26:27,320
Speaker 1: but provide some stability and support and hopefully that's the

489
00:26:27,320 --> 00:26:29,800
Speaker 1: next leg we see where the commodity producers begin to

490
00:26:29,840 --> 00:26:34,360
Speaker 1: participate in the recovery. How much does the emerging markets

491
00:26:34,440 --> 00:26:38,360
Speaker 1: dead investment industry rely on the FED and the ECB

492
00:26:38,600 --> 00:26:42,520
Speaker 1: continuing to just absolutely blow away the market with as

493
00:26:42,600 --> 00:26:45,560
Speaker 1: much cash as they possibly can and absorb any excess

494
00:26:45,600 --> 00:26:48,280
Speaker 1: government debt. In other words, how much does it rely

495
00:26:48,600 --> 00:26:52,040
Speaker 1: on a suppression of yields in the developed markets. I mean,

496
00:26:52,080 --> 00:26:54,439
Speaker 1: that's the great question, right And I think the market

497
00:26:54,440 --> 00:26:57,560
Speaker 1: pricing of the financial assets that investable are very much

498
00:26:57,560 --> 00:26:59,359
Speaker 1: a function of what we're seeing here with the FED.

499
00:26:59,600 --> 00:27:02,680
Speaker 1: But the real economies are just not feeling it yet,

500
00:27:02,840 --> 00:27:05,760
Speaker 1: because there's still a hunger for dollars. There's a dollars

501
00:27:05,920 --> 00:27:08,639
Speaker 1: you know, onshore in many of these economies that you know,

502
00:27:09,000 --> 00:27:11,760
Speaker 1: they you know, they they've they've gotten hit so very

503
00:27:11,800 --> 00:27:14,760
Speaker 1: badly by the pandemic. I mean, food prices, energy prices,

504
00:27:14,800 --> 00:27:17,000
Speaker 1: I mean, and now you know, you know, the governments

505
00:27:17,000 --> 00:27:20,120
Speaker 1: are coming after local corporates and households, taxing them more

506
00:27:20,480 --> 00:27:22,639
Speaker 1: because they can't meet their budget depth. You know, so

507
00:27:22,920 --> 00:27:26,119
Speaker 1: it's really becoming very painful. You know, it's not about

508
00:27:26,119 --> 00:27:29,640
Speaker 1: helicopter money in these markets. It's about directing the capital

509
00:27:29,640 --> 00:27:31,760
Speaker 1: to those that need it most in an effica you know,

510
00:27:31,880 --> 00:27:34,040
Speaker 1: just in the right way. And you know that's where

511
00:27:34,080 --> 00:27:35,639
Speaker 1: things are getting a bit muddled, and that's where the

512
00:27:35,680 --> 00:27:38,119
Speaker 1: challenges line. And so yeah, I'm sorry to be the

513
00:27:38,160 --> 00:27:40,959
Speaker 1: dead horse here, but you know that's my focus and

514
00:27:41,000 --> 00:27:43,240
Speaker 1: it's and it's you know, I'm laser focused on it.

515
00:27:43,280 --> 00:27:47,280
Speaker 1: To to coach on Sarah, I gotta say, I've I've

516
00:27:47,359 --> 00:27:49,440
Speaker 1: I've got to be fascinating. Unfortunately, I would love to

517
00:27:49,440 --> 00:27:52,119
Speaker 1: speak with you all afternoon, and actually particularly about the

518
00:27:52,119 --> 00:27:53,920
Speaker 1: movement that we're seeing in the bond market today, because

519
00:27:53,920 --> 00:27:56,679
Speaker 1: I think it's fascinating. It is very unusual. It does

520
00:27:56,760 --> 00:27:58,840
Speaker 1: not go here with a broader narrative. You see the

521
00:27:58,880 --> 00:28:01,680
Speaker 1: long bond sell off even though you don't see inflation

522
00:28:01,760 --> 00:28:04,760
Speaker 1: expectations picking up twenty seconds. Any thoughts on that are

523
00:28:04,760 --> 00:28:07,520
Speaker 1: you interesting? Premium? I mean, we need some of it, right,

524
00:28:07,560 --> 00:28:09,520
Speaker 1: I mean, obviously I don't know if this is more

525
00:28:09,560 --> 00:28:13,200
Speaker 1: inflation expectations or growth expectations yet because it's early going.

526
00:28:13,480 --> 00:28:15,359
Speaker 1: But this is the steepener that and steepening move that

527
00:28:15,440 --> 00:28:16,879
Speaker 1: a lot of you know, a lot of Wall Street

528
00:28:16,880 --> 00:28:19,240
Speaker 1: House has been calling for and I expected to continue

529
00:28:19,240 --> 00:28:20,720
Speaker 1: at least for a little bit longer. But we're hitting

530
00:28:20,760 --> 00:28:23,080
Speaker 1: some technical levels if you ask my man our Jersey

531
00:28:23,119 --> 00:28:26,639
Speaker 1: so but people look out. We're hitting technical levels, folks,

532
00:28:26,640 --> 00:28:29,359
Speaker 1: same as as our chief Emerging Markets credit Strategies for

533
00:28:29,359 --> 00:28:32,680
Speaker 1: Bloomberg Intelligence. Thank you so much. I find this so interesting, Paul.

534
00:28:32,720 --> 00:28:34,760
Speaker 1: I mean, I'm just looking at this, and I'm thinking,

535
00:28:35,040 --> 00:28:36,960
Speaker 1: you know, is it inflation? But you're not saying at

536
00:28:37,000 --> 00:28:39,160
Speaker 1: the break evens, you're not seeing it stocks, you're not

537
00:28:39,200 --> 00:28:42,960
Speaker 1: seeing it in high credit risk priced in by the derivatives. Interesting.

538
00:28:43,080 --> 00:28:47,600
Speaker 1: I wonder who's selling. Thanks for listening to the Bloomberg

539
00:28:47,600 --> 00:28:49,800
Speaker 1: P and L podcast. You can subscribe and listen to

540
00:28:49,840 --> 00:28:53,080
Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer.

541
00:28:53,480 --> 00:28:56,240
Speaker 1: Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa

542
00:28:56,280 --> 00:28:59,400
Speaker 1: abram Woids. I'm on Twitter at Lisa bramwoit's one before

543
00:28:59,400 --> 00:29:02,200
Speaker 1: the podcast. You can always catch us worldwide on Bloomberg

544
00:29:02,280 --> 00:29:06,240
Speaker 1: Radio m