1 00:00:09,880 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Lee. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,200 Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg Now. 5 00:00:27,200 --> 00:00:29,720 Speaker 1: Presidents Evanuel and mccohan Donald Trump have agreed to a 6 00:00:29,800 --> 00:00:33,479 Speaker 1: truth in their dispute over digital taxes. This will prevent 7 00:00:33,520 --> 00:00:35,919 Speaker 1: any punitive tariffs through the end of the year. Now 8 00:00:36,120 --> 00:00:40,240 Speaker 1: is the agreement lasting or merely delaying an inevitable conflict? 9 00:00:40,280 --> 00:00:41,839 Speaker 1: While joining us now and delighted to say, is the 10 00:00:41,840 --> 00:00:46,559 Speaker 1: French finance minister his he is is holding talks this 11 00:00:46,640 --> 00:00:49,080 Speaker 1: afternoon also with Steve Nuchen and the o c D 12 00:00:49,159 --> 00:00:52,040 Speaker 1: Secretary General. So Minister, thank you for joining us. How 13 00:00:52,040 --> 00:00:56,240 Speaker 1: would you describe the current relationship between Europe, France specifically 14 00:00:56,280 --> 00:00:59,840 Speaker 1: and the US. I think that due to d for 15 00:01:00,080 --> 00:01:03,960 Speaker 1: a good phone call between Prisident Trump and President mcn 16 00:01:04,640 --> 00:01:07,800 Speaker 1: we are now in a good mood, a good mood 17 00:01:07,880 --> 00:01:12,880 Speaker 1: for negotiating and try to find a compromise between the 18 00:01:13,000 --> 00:01:16,000 Speaker 1: US and France, Between the US and Europe, I think 19 00:01:16,000 --> 00:01:18,920 Speaker 1: that the choice is quite clear. Either we go the 20 00:01:18,959 --> 00:01:23,400 Speaker 1: way of having many national taxes everywhere in the world, 21 00:01:23,760 --> 00:01:27,320 Speaker 1: especially in Europe. You already have the French national taxation 22 00:01:27,760 --> 00:01:31,920 Speaker 1: on digital activities, but you also have the British, the Italian, Spanish, 23 00:01:32,000 --> 00:01:36,640 Speaker 1: the Australian thinking about that possibility, or having also decided 24 00:01:36,920 --> 00:01:40,240 Speaker 1: a national taxation. H you go the way of an 25 00:01:40,280 --> 00:01:43,280 Speaker 1: international solution. And I really think that this is in 26 00:01:43,319 --> 00:01:47,560 Speaker 1: the interest of both the United States and Europe to 27 00:01:47,680 --> 00:01:50,880 Speaker 1: pay the way for a compromise to decide about an 28 00:01:50,880 --> 00:01:56,240 Speaker 1: international digital taxation by the end of twenty because it 29 00:01:56,240 --> 00:01:59,040 Speaker 1: would be far more efficient and it would be fairer. 30 00:01:59,440 --> 00:02:01,040 Speaker 1: But I mean, it's do you think you will get 31 00:02:01,240 --> 00:02:04,880 Speaker 1: digital tax resolution and agreement whatever we call it this afternoon, 32 00:02:05,360 --> 00:02:07,720 Speaker 1: and will that avoid a trade war? Is it a 33 00:02:07,840 --> 00:02:10,480 Speaker 1: you know, we either get an agreement or actually it's 34 00:02:10,520 --> 00:02:14,480 Speaker 1: going to be a tough, tough environment between the EU 35 00:02:14,600 --> 00:02:18,280 Speaker 1: and the US. We are working on an agreement with 36 00:02:18,600 --> 00:02:22,399 Speaker 1: Stephen Menuchin. We have an excellent relationship with Stephen Menuchin, 37 00:02:22,480 --> 00:02:25,720 Speaker 1: and I hope that we can get a compromise in 38 00:02:25,720 --> 00:02:28,680 Speaker 1: in a few hours and turning into a trade war 39 00:02:29,080 --> 00:02:33,280 Speaker 1: between the US and Europe would be foolish. It would 40 00:02:33,280 --> 00:02:36,720 Speaker 1: be a stupidity, both from an economic and a political 41 00:02:36,800 --> 00:02:40,040 Speaker 1: point of view. So everyone is trying to make a 42 00:02:40,040 --> 00:02:43,360 Speaker 1: move in the direction of the other for the sake 43 00:02:43,440 --> 00:02:46,920 Speaker 1: of finding a compromise, working on an international solution and 44 00:02:46,960 --> 00:02:49,880 Speaker 1: avoiding a trade war. Nobody wants a trade war between 45 00:02:49,919 --> 00:02:52,760 Speaker 1: the US and Europe. Okay, But has France agreed to 46 00:02:52,800 --> 00:02:55,560 Speaker 1: suspend digital tax until the end of the year. France 47 00:02:55,720 --> 00:02:59,040 Speaker 1: has agreed on one single thing. We have a national taxation. 48 00:02:59,560 --> 00:03:03,560 Speaker 1: Under the national taxation on digital activities, all the companies, 49 00:03:03,560 --> 00:03:06,760 Speaker 1: either the American but the European or the Chinese ones 50 00:03:07,160 --> 00:03:12,440 Speaker 1: have to pre pay in April and in November. We 51 00:03:12,480 --> 00:03:16,120 Speaker 1: are ready to postpone the pre payment of April and 52 00:03:16,360 --> 00:03:19,640 Speaker 1: November till the end of the year with the view 53 00:03:19,800 --> 00:03:22,480 Speaker 1: of finding an international solution. And either there is an 54 00:03:22,480 --> 00:03:25,880 Speaker 1: international solution at the end of in that case we 55 00:03:25,919 --> 00:03:29,959 Speaker 1: would get read of the national taxation and replaced the 56 00:03:30,040 --> 00:03:33,960 Speaker 1: national taxation by the international solution. The ministers is to 57 00:03:34,080 --> 00:03:37,720 Speaker 1: avoid tariffs that President Trump has said he wouldn't pose 58 00:03:37,760 --> 00:03:40,080 Speaker 1: on France and on Europe. And if it is, it 59 00:03:40,120 --> 00:03:42,920 Speaker 1: is a message we're sending that actually tariffs work. The 60 00:03:43,000 --> 00:03:45,480 Speaker 1: threat of tariffs from the U s work. It would 61 00:03:45,480 --> 00:03:47,720 Speaker 1: be the case if we would have decided to withdraw 62 00:03:47,800 --> 00:03:50,960 Speaker 1: all taxation, but we have not decided to withdraw all taxation. 63 00:03:51,360 --> 00:03:55,240 Speaker 1: We have just proposed not to have the pre payment 64 00:03:55,440 --> 00:03:58,840 Speaker 1: of April, not to have the pre payment of November, 65 00:03:59,240 --> 00:04:03,160 Speaker 1: and post owner all the payment till the end of December, 66 00:04:03,920 --> 00:04:08,480 Speaker 1: with clearly the purpose of having an international solution by 67 00:04:08,480 --> 00:04:11,520 Speaker 1: the end of twenty And you can see that this 68 00:04:11,640 --> 00:04:14,200 Speaker 1: is a fair compromise. This is a move in the 69 00:04:14,240 --> 00:04:18,599 Speaker 1: direction of the US concern and this paves the way 70 00:04:18,720 --> 00:04:21,599 Speaker 1: for a compromise at the o c D level. And 71 00:04:21,720 --> 00:04:24,520 Speaker 1: if we are ready to go this way, we would 72 00:04:24,520 --> 00:04:29,600 Speaker 1: have one single international taxation of all digital activities instead 73 00:04:29,600 --> 00:04:33,440 Speaker 1: of having many national taxations all over the world. Minister, 74 00:04:33,560 --> 00:04:37,279 Speaker 1: what will it take for the US to tax their companies, 75 00:04:37,400 --> 00:04:40,760 Speaker 1: their tech companies fairly? But you know, this is one 76 00:04:41,120 --> 00:04:44,359 Speaker 1: key point I want to make clear to our American 77 00:04:44,480 --> 00:04:49,080 Speaker 1: friends that the national French taxation is not a discriminatory one. 78 00:04:49,440 --> 00:04:54,159 Speaker 1: It's not against the US companies. It's a taxation on 79 00:04:54,279 --> 00:04:58,640 Speaker 1: digital activities. Because the digital companies are making huge profits 80 00:04:58,720 --> 00:05:02,400 Speaker 1: and paying less TA. Nobody can accept that. But you 81 00:05:02,520 --> 00:05:05,480 Speaker 1: have in the scope of the French taxation, American companies, 82 00:05:05,839 --> 00:05:10,080 Speaker 1: European ones and Chinese ones. This is not a discriminary 83 00:05:10,160 --> 00:05:13,720 Speaker 1: option to all countries in Europe need to spend more 84 00:05:13,760 --> 00:05:17,280 Speaker 1: fiscally to get us out of this growth but slow 85 00:05:17,320 --> 00:05:19,680 Speaker 1: growth that we're seeing for the trend to really take 86 00:05:19,720 --> 00:05:24,840 Speaker 1: out slow glow, slow growth and the slowdown in the 87 00:05:24,839 --> 00:05:28,560 Speaker 1: Eurozona is a failure for all of us. Nobody can 88 00:05:28,640 --> 00:05:32,200 Speaker 1: be satisfied with a nerverwage level of growth of around 89 00:05:32,320 --> 00:05:35,320 Speaker 1: one one point two. This is not enough. It is 90 00:05:35,360 --> 00:05:39,440 Speaker 1: not enough to fund the fight against climate change. This 91 00:05:39,600 --> 00:05:42,960 Speaker 1: is not enough to ensure prosperity for our citizens and 92 00:05:43,040 --> 00:05:46,440 Speaker 1: to create new jobs. So once again I'm calling to 93 00:05:46,960 --> 00:05:52,279 Speaker 1: support the monetary policy by a more ambitious fiscal policy 94 00:05:52,720 --> 00:05:55,279 Speaker 1: in all the countries that do have the fiscal space 95 00:05:55,320 --> 00:05:57,320 Speaker 1: to do so. This is the case for Germany, and 96 00:05:57,360 --> 00:06:00,680 Speaker 1: I've been discussing the point with my friend or have shorts, 97 00:06:00,839 --> 00:06:03,279 Speaker 1: the German finance minister many times. We have the next 98 00:06:03,279 --> 00:06:06,560 Speaker 1: tent relationship. But on this very specific point, I'm just 99 00:06:06,760 --> 00:06:10,720 Speaker 1: asking Germany to spend more public money because they do 100 00:06:10,880 --> 00:06:16,880 Speaker 1: have the fiscal space. When France is taking very difficult 101 00:06:16,920 --> 00:06:21,040 Speaker 1: decisions to improve its economic situation and to improve its 102 00:06:21,080 --> 00:06:24,440 Speaker 1: economic model. I think that's also a fair and balanced dealer. 103 00:06:24,680 --> 00:06:27,080 Speaker 1: On the one hand, those who do have the fiscal 104 00:06:27,160 --> 00:06:31,080 Speaker 1: space should invest more, and France that have that has 105 00:06:31,120 --> 00:06:36,440 Speaker 1: to introduce strong reforms, will continue to introduce very strong reforms. 106 00:06:36,560 --> 00:06:38,480 Speaker 1: But do you believe Germany will do so. When you 107 00:06:38,520 --> 00:06:41,000 Speaker 1: speak to German officials, they say, well, we're already doing 108 00:06:41,040 --> 00:06:43,599 Speaker 1: a lot in green barns, so they feel at this 109 00:06:43,640 --> 00:06:46,880 Speaker 1: point they've done enough. I fully recognize that they have 110 00:06:47,040 --> 00:06:50,839 Speaker 1: done more, and I take that into account. Of course, 111 00:06:51,160 --> 00:06:54,960 Speaker 1: this is the truth. The German government has decided to 112 00:06:55,000 --> 00:06:59,000 Speaker 1: spend some more money and deeply convinced that they can 113 00:06:59,040 --> 00:07:02,120 Speaker 1: do more and that it would be better for growth 114 00:07:02,160 --> 00:07:05,840 Speaker 1: in Germany and growth within the Eurozone. When I'm talking 115 00:07:05,880 --> 00:07:10,000 Speaker 1: to the CEOs of German companies, I think that the 116 00:07:10,040 --> 00:07:13,720 Speaker 1: CEOs of German companies, many of them are waiting also 117 00:07:13,880 --> 00:07:17,840 Speaker 1: for more investments from the German government. Well, when you 118 00:07:17,880 --> 00:07:22,000 Speaker 1: look at Europe and France, a lot of international investors 119 00:07:22,000 --> 00:07:24,120 Speaker 1: look at the strikes that have been going on. Once 120 00:07:24,160 --> 00:07:27,760 Speaker 1: the pension reform is actually dealt with, what comes next, 121 00:07:27,800 --> 00:07:30,920 Speaker 1: and know you're worried that actually frances is not ready 122 00:07:30,960 --> 00:07:34,280 Speaker 1: to be fully reformed. I'm not true. I think that 123 00:07:34,400 --> 00:07:37,280 Speaker 1: we are on the right track. Of course, we are 124 00:07:37,320 --> 00:07:40,840 Speaker 1: facing difficulties, but we are facing difficulties because we are 125 00:07:40,840 --> 00:07:45,800 Speaker 1: introducing strong reforms. We have already we formed the taxation 126 00:07:45,840 --> 00:07:48,240 Speaker 1: system in France with a total of the whole of 127 00:07:48,280 --> 00:07:51,080 Speaker 1: the French taxation system for the sake of having more 128 00:07:51,120 --> 00:07:54,920 Speaker 1: money for innovation and investments. We have also introduced a 129 00:07:55,000 --> 00:07:58,920 Speaker 1: very important reform on the labor market, and now this 130 00:07:59,080 --> 00:08:02,800 Speaker 1: is time to have a full of a whole and 131 00:08:02,880 --> 00:08:07,160 Speaker 1: we foundation of the French pension system, which is based 132 00:08:07,200 --> 00:08:12,320 Speaker 1: on solidarity. We will stick to that reform and stick 133 00:08:12,400 --> 00:08:15,320 Speaker 1: to that willingness, because this is a matter of justice. 134 00:08:15,760 --> 00:08:19,440 Speaker 1: You know, in our reform, all the people that are 135 00:08:19,520 --> 00:08:23,440 Speaker 1: less paid will have better pensions, and that's exactly the 136 00:08:23,480 --> 00:08:27,960 Speaker 1: purpose of this reform. We are facing social difficulties, we 137 00:08:28,040 --> 00:08:32,120 Speaker 1: are facing strikes, but you know, we will not spare 138 00:08:32,400 --> 00:08:37,000 Speaker 1: efforts to convince the French people that this reform is 139 00:08:37,080 --> 00:08:40,760 Speaker 1: a fair one and a necessary one. Can France benefit 140 00:08:41,000 --> 00:08:44,640 Speaker 1: from Brexit? Have you seen? You know an attraction of 141 00:08:44,679 --> 00:08:47,400 Speaker 1: talent to Paris and else west of all fronts will 142 00:08:47,440 --> 00:08:51,880 Speaker 1: benefit and is already benefiting from its reforms. When you're 143 00:08:51,920 --> 00:08:54,160 Speaker 1: looking at the situation, we have one of the best 144 00:08:54,200 --> 00:08:56,480 Speaker 1: level of growth within the yours on one point three. 145 00:08:56,600 --> 00:08:59,040 Speaker 1: This is not enough, but we are in the right direction. 146 00:08:59,480 --> 00:09:01,880 Speaker 1: We are in jobs. This is also a very good 147 00:09:01,920 --> 00:09:05,400 Speaker 1: result coming from the decisions taken by President Macon and 148 00:09:05,600 --> 00:09:09,880 Speaker 1: taken by the government. As far as the Brexity is concerned, 149 00:09:10,480 --> 00:09:13,640 Speaker 1: we want to keep a very strong and positive political 150 00:09:13,720 --> 00:09:17,120 Speaker 1: relationship with the UK. I deeply regret the decision taken 151 00:09:17,120 --> 00:09:20,240 Speaker 1: by the UK to go out of the EU, but 152 00:09:20,400 --> 00:09:24,160 Speaker 1: on one very specific point, which is finance or strategic 153 00:09:24,200 --> 00:09:28,600 Speaker 1: purpose is to become within the euro Zone the first 154 00:09:28,640 --> 00:09:32,360 Speaker 1: financial center. We want to be very attractive. And when 155 00:09:32,360 --> 00:09:35,160 Speaker 1: you're looking at the very last decision of many important 156 00:09:35,160 --> 00:09:39,320 Speaker 1: banks like Jippy Morgan, the fact that they're putting some 157 00:09:39,400 --> 00:09:43,160 Speaker 1: new jobs four hundred fifty for Gippy Morgan in Paris 158 00:09:43,360 --> 00:09:45,840 Speaker 1: is very good news for France. But what if the 159 00:09:45,960 --> 00:09:49,319 Speaker 1: UK don't follow the European regulation and you know we're 160 00:09:49,360 --> 00:09:51,240 Speaker 1: going to start into this debate, but what if you 161 00:09:51,320 --> 00:09:55,679 Speaker 1: if you have huge competition Course Wolls, and I've been 162 00:09:55,720 --> 00:10:00,120 Speaker 1: explaining that to the Chancellor of the Exchequare. We have 163 00:10:00,400 --> 00:10:03,120 Speaker 1: once again a very good relationship. We want to be 164 00:10:03,280 --> 00:10:06,080 Speaker 1: in a positive matter of the future between the UK 165 00:10:06,160 --> 00:10:09,360 Speaker 1: and Phone, the UK and Europe. But everybody can understand 166 00:10:09,760 --> 00:10:12,679 Speaker 1: that's the holds of the Single Market will remain the 167 00:10:12,679 --> 00:10:14,800 Speaker 1: holds of the Single Market and we do not want 168 00:10:14,800 --> 00:10:18,559 Speaker 1: to take any kind of decision that might jibiodize or 169 00:10:18,840 --> 00:10:21,800 Speaker 1: weaken the rules of the Single market. Minister, thanks so 170 00:10:21,880 --> 00:10:24,280 Speaker 1: much for your very thoughtful analysis on some of these 171 00:10:24,280 --> 00:10:38,600 Speaker 1: points were in finance, Mr Bruno. It has become an 172 00:10:38,640 --> 00:10:40,880 Speaker 1: annual visitor Davos, and of course you're doing this to 173 00:10:40,960 --> 00:10:43,920 Speaker 1: the President. Scheduled to have a press conference here, I'm 174 00:10:43,920 --> 00:10:46,280 Speaker 1: gonna say forty five minutes, maybe a little bit longer 175 00:10:46,280 --> 00:10:49,400 Speaker 1: than that. Scheduled to leave here in the New York 176 00:10:49,480 --> 00:10:51,880 Speaker 1: six o'clock hour, but I'm told that may be delayed 177 00:10:51,880 --> 00:10:54,680 Speaker 1: because the lane child has to get from our set back. 178 00:10:54,720 --> 00:10:56,840 Speaker 1: To be sure. The President cats on Air Force one 179 00:10:57,400 --> 00:11:00,560 Speaker 1: with Grace Secretary. Thank you so that you for joining 180 00:11:00,600 --> 00:11:02,480 Speaker 1: us again to be here. We have a three hour 181 00:11:02,559 --> 00:11:04,640 Speaker 1: conversation with you that we're going to cram into a 182 00:11:04,679 --> 00:11:07,120 Speaker 1: generous two blocks as well. I do want to speak 183 00:11:07,440 --> 00:11:10,280 Speaker 1: on your Taiwan. You are the great voice of the 184 00:11:10,280 --> 00:11:13,880 Speaker 1: Thai when he's in America. I want to go right 185 00:11:13,920 --> 00:11:17,959 Speaker 1: now with Viviana just mentioning Boeing to the reality I 186 00:11:18,200 --> 00:11:23,320 Speaker 1: and all Americans saw. This is the reality. Major US newspaper, 187 00:11:23,679 --> 00:11:26,520 Speaker 1: small little article I'm going to pick on American airlines 188 00:11:26,679 --> 00:11:29,839 Speaker 1: make at the airline wrong. The stewardess is a flight attendance? 189 00:11:29,880 --> 00:11:33,160 Speaker 1: Are afraid to get on a seven thirty seven Max? 190 00:11:33,520 --> 00:11:38,160 Speaker 1: Did blowing? Did bowing blow it? Because they didn't realize 191 00:11:38,360 --> 00:11:42,400 Speaker 1: dat emotion in that newspaper. Our concern at the Department 192 00:11:42,400 --> 00:11:47,000 Speaker 1: of Transportation is always safety. Safety is number one. So 193 00:11:47,040 --> 00:11:50,439 Speaker 1: when this seven thirties seven Max plane was grounded on 194 00:11:50,559 --> 00:11:56,040 Speaker 1: March uh, the f a A is a data based organization, 195 00:11:56,760 --> 00:12:01,320 Speaker 1: and their data showed that it as necessary to ground 196 00:12:01,360 --> 00:12:05,480 Speaker 1: that plane. To restore ground in ungrounding rights to this 197 00:12:05,559 --> 00:12:10,160 Speaker 1: plane requires a great deal of preparation for us at 198 00:12:10,160 --> 00:12:13,079 Speaker 1: the Department of Transportation and at the f a A. 199 00:12:13,200 --> 00:12:17,760 Speaker 1: There's no timetable. The first and foremost concern always is safety. 200 00:12:17,800 --> 00:12:21,319 Speaker 1: And I'll explain why because they're too What you mentioned 201 00:12:21,400 --> 00:12:25,439 Speaker 1: is very important. If the consuming public, if the passenger 202 00:12:25,600 --> 00:12:29,920 Speaker 1: it's there, yeah, does not have confidence in this plane, 203 00:12:30,280 --> 00:12:37,680 Speaker 1: they will not go all your conversation. Let me just finished, continued, No, 204 00:12:37,840 --> 00:12:40,400 Speaker 1: let me this is important because we need to This 205 00:12:40,440 --> 00:12:43,600 Speaker 1: needs to be a collaborative effort. We are working with 206 00:12:43,760 --> 00:12:48,280 Speaker 1: international aviation authorities. They need to work with us. We 207 00:12:48,360 --> 00:12:52,640 Speaker 1: need to work with them because if other aviation authorities 208 00:12:52,880 --> 00:12:56,600 Speaker 1: don't have the confidence and don't allow the bowing seven 209 00:12:57,000 --> 00:13:02,439 Speaker 1: seven fly, then we cannot fly. Boeing cannot bowing amount 210 00:13:02,440 --> 00:13:07,719 Speaker 1: of Secretary, did Boeing misjudge the American public? I think 211 00:13:07,760 --> 00:13:12,840 Speaker 1: it's always always important to understand your customer. And so 212 00:13:12,960 --> 00:13:16,080 Speaker 1: again I'm just gonna say, from our point of view, 213 00:13:16,400 --> 00:13:19,719 Speaker 1: safety is number one. There's no timetable. We want this 214 00:13:19,760 --> 00:13:24,800 Speaker 1: plane to be safe, and the issue here is safety. Secretary. 215 00:13:24,880 --> 00:13:26,800 Speaker 1: I mean, we have this bizarre situation where we have 216 00:13:26,840 --> 00:13:28,880 Speaker 1: the f A A saying that actually the plane will 217 00:13:28,880 --> 00:13:30,640 Speaker 1: be ready to fly, and we have no The f 218 00:13:30,800 --> 00:13:33,319 Speaker 1: A has never said that. Now, the f A has 219 00:13:33,360 --> 00:13:36,199 Speaker 1: never said that. We have a new f A administrator. 220 00:13:36,960 --> 00:13:39,800 Speaker 1: He's just come on board in August twelve of this year. 221 00:13:40,240 --> 00:13:47,240 Speaker 1: He's a very experienced pilot and he ran aviation operations 222 00:13:47,240 --> 00:13:50,240 Speaker 1: for major airline. So you're right, let me rephrase it. 223 00:13:50,280 --> 00:13:52,200 Speaker 1: So their countries that came out and saying even if 224 00:13:52,240 --> 00:13:54,800 Speaker 1: the f a A A lets this plane fly, they may 225 00:13:54,800 --> 00:13:59,480 Speaker 1: not follow suit. We understand that which has lost credibility 226 00:14:00,080 --> 00:14:03,280 Speaker 1: I had other regulators, I hope not. We work. The 227 00:14:03,360 --> 00:14:07,320 Speaker 1: f a A works very, very hard to still remain 228 00:14:07,720 --> 00:14:11,400 Speaker 1: the gold standard of aviation safety. You know, the FAA 229 00:14:11,640 --> 00:14:14,960 Speaker 1: has traditioned been a leader and in fact, it through 230 00:14:15,000 --> 00:14:19,240 Speaker 1: its practices, lifted up the record and the standard for 231 00:14:19,280 --> 00:14:23,840 Speaker 1: aviation safety throughout the world. So they are very cognizant 232 00:14:23,880 --> 00:14:27,480 Speaker 1: of their leadership role. And we want to work. We 233 00:14:27,600 --> 00:14:30,120 Speaker 1: meaning the U. S. Department of Transportation and the f 234 00:14:30,200 --> 00:14:33,480 Speaker 1: a A, want to work with our international partners because 235 00:14:33,520 --> 00:14:37,360 Speaker 1: their trust, their confidence is very critical. Secretary, Has the 236 00:14:37,360 --> 00:14:39,920 Speaker 1: FAA become too differential, too many I don't think so. 237 00:14:40,560 --> 00:14:42,080 Speaker 1: I don't think so. I think if you look at 238 00:14:42,120 --> 00:14:45,120 Speaker 1: the raft of emails that have come out, which are 239 00:14:45,120 --> 00:14:51,600 Speaker 1: actually quite disturbing, quite uncomplimentary, Yes, they show a derisive 240 00:14:52,120 --> 00:14:55,840 Speaker 1: factor disdaining for the regulators, which I think is a problem. 241 00:14:56,000 --> 00:14:57,520 Speaker 1: And then I don't want to talk about the dinner 242 00:14:57,520 --> 00:14:59,480 Speaker 1: table the Senate Majority leader, but I do want to 243 00:14:59,520 --> 00:15:03,000 Speaker 1: speak ab what you, as a Washington pro are hearing 244 00:15:03,080 --> 00:15:07,480 Speaker 1: from our legislators about giving up the great American franchise 245 00:15:07,560 --> 00:15:10,440 Speaker 1: of engineering, which is the bowing of Seattle, whole debate 246 00:15:10,440 --> 00:15:12,920 Speaker 1: whether they should have moved to Chicago. Are we at 247 00:15:13,040 --> 00:15:18,600 Speaker 1: risk of sacrificing engineering trust to air Bus? Absolutely not. 248 00:15:19,520 --> 00:15:24,080 Speaker 1: I think most airline airliners would like to have more 249 00:15:24,120 --> 00:15:29,720 Speaker 1: than one airline manufacturer number one, number two. Uh. You know, 250 00:15:29,760 --> 00:15:34,160 Speaker 1: Airbus has a full backlog of orders. If you wanted 251 00:15:34,200 --> 00:15:36,720 Speaker 1: to order a plane today, you would have to wait 252 00:15:36,760 --> 00:15:40,280 Speaker 1: four years, and so the backlock is quite extensive. So 253 00:15:40,360 --> 00:15:43,120 Speaker 1: I think we're not at that stage. We are working 254 00:15:43,160 --> 00:15:48,240 Speaker 1: with the international aviation authorities and the communities, we know 255 00:15:48,400 --> 00:15:51,400 Speaker 1: their opinions being a lot. I want Secretary Child to 256 00:15:51,440 --> 00:15:53,240 Speaker 1: be sure that we never get rid of the Boeing 257 00:15:53,360 --> 00:15:56,120 Speaker 1: seven seven. That's her major. Don't get rid of the 258 00:15:56,240 --> 00:16:00,240 Speaker 1: glorious old planes. But how close is the max? You know, 259 00:16:00,760 --> 00:16:02,440 Speaker 1: when is it going to be cleared to flag? And 260 00:16:02,440 --> 00:16:05,040 Speaker 1: how close are we to that? Well, again, we're not 261 00:16:05,200 --> 00:16:09,560 Speaker 1: making any predictions. We're not having any timetables because again, 262 00:16:09,600 --> 00:16:12,800 Speaker 1: to us, safety is number one, and the families of 263 00:16:12,880 --> 00:16:17,200 Speaker 1: those who loved lost loved ones they deserve that. Have 264 00:16:17,320 --> 00:16:19,520 Speaker 1: you spoken to Elon Musk about his projects. When it 265 00:16:19,520 --> 00:16:22,280 Speaker 1: comes to Hyperlie, I've talked to Elon mus about many 266 00:16:22,280 --> 00:16:26,600 Speaker 1: other projects. He's very interesting. So he's talked about like 267 00:16:26,720 --> 00:16:30,120 Speaker 1: flying cars, for example. I've talked to him about that. 268 00:16:30,440 --> 00:16:33,400 Speaker 1: You know, he is so prescient and so far sided. 269 00:16:33,640 --> 00:16:38,040 Speaker 1: He's talking about a vision that I couldn't even imagine. 270 00:16:38,040 --> 00:16:40,720 Speaker 1: When we're done with the interim, guy will come back 271 00:16:40,720 --> 00:16:43,200 Speaker 1: to you. Let's very important. I can talk more about 272 00:16:43,240 --> 00:16:45,000 Speaker 1: that if you want. We're gonna come back here and 273 00:16:45,040 --> 00:16:48,000 Speaker 1: talk about so many other important topics including tell me 274 00:16:48,040 --> 00:16:49,400 Speaker 1: what we're gonna do is go to break and I 275 00:16:49,520 --> 00:16:50,880 Speaker 1: do want to come back to you and talk about 276 00:16:50,880 --> 00:16:54,720 Speaker 1: transportation and particularly railroads, and also of course what we 277 00:16:54,840 --> 00:16:57,880 Speaker 1: see in China. The Secretary Child, thank you so much 278 00:16:57,920 --> 00:17:00,360 Speaker 1: for joining us here at Thank you to it is 279 00:17:00,440 --> 00:17:16,800 Speaker 1: all very wonderful John Para and Tom Keenan. We're here 280 00:17:16,840 --> 00:17:20,040 Speaker 1: with David Rubinstein as well. Much much going on. We 281 00:17:20,119 --> 00:17:22,359 Speaker 1: welcome all eve this morning, of course recovering from a 282 00:17:22,720 --> 00:17:25,680 Speaker 1: length to presidential press conference. A lot of different topics here. 283 00:17:25,720 --> 00:17:28,640 Speaker 1: We'll touch on that with David Rubenstein and the Carlisle 284 00:17:28,720 --> 00:17:31,600 Speaker 1: Group as well, co founder and co chairman, but far 285 00:17:31,720 --> 00:17:34,919 Speaker 1: more media tycoon with this peer to peer which has 286 00:17:34,920 --> 00:17:37,920 Speaker 1: been on Bloomberg here it's a great success, is well, 287 00:17:38,320 --> 00:17:41,439 Speaker 1: this is an interesting valley. Who in the valley is 288 00:17:41,480 --> 00:17:45,199 Speaker 1: on the Rubinstein wish list of peer to peer? And 289 00:17:45,240 --> 00:17:47,080 Speaker 1: so I know you want to talk to Gretta. Everybody 290 00:17:47,080 --> 00:17:50,720 Speaker 1: else does well, but who's the dream interview for Rubinstein 291 00:17:50,840 --> 00:17:54,000 Speaker 1: in Happy Valley? I've never interviewed you. I think that 292 00:17:54,000 --> 00:17:57,359 Speaker 1: would that would be it could be a change and 293 00:17:57,359 --> 00:18:00,240 Speaker 1: I'd like to interview you. So, um, you know have 294 00:18:00,359 --> 00:18:03,480 Speaker 1: some questions. Uh so does some other people you know 295 00:18:03,560 --> 00:18:06,480 Speaker 1: the line? So uh, there are a lot of interesting 296 00:18:06,560 --> 00:18:09,040 Speaker 1: CEOs and heads of state here. Some of them do interviews, 297 00:18:09,040 --> 00:18:11,960 Speaker 1: some don't do interviews. So uh, you know we've had 298 00:18:12,000 --> 00:18:16,600 Speaker 1: I think here there's several British Prime ministers. Boris Johnson's here, Um, 299 00:18:16,640 --> 00:18:20,400 Speaker 1: I think THREESA A is here, Tony Blair is here, Uh, 300 00:18:20,560 --> 00:18:22,719 Speaker 1: David Cameron's here. So it'd be interesting to get all 301 00:18:22,720 --> 00:18:24,359 Speaker 1: four of them on a panel, wouldn't I want to 302 00:18:24,359 --> 00:18:26,600 Speaker 1: talk about a panel I would have with you right now, 303 00:18:26,680 --> 00:18:29,480 Speaker 1: maybe a few others within the Carlisle world. And that 304 00:18:29,720 --> 00:18:33,960 Speaker 1: is this strange words. Scale. Where is scale going within 305 00:18:34,000 --> 00:18:39,960 Speaker 1: our transactions and our combinations. Well, scale has UH. For 306 00:18:40,000 --> 00:18:42,720 Speaker 1: a while. Before the Great Recession buy out, the sizes 307 00:18:42,760 --> 00:18:44,880 Speaker 1: were fairly big, and some of those didn't work out. 308 00:18:44,880 --> 00:18:46,919 Speaker 1: The biggest ones that we went to the recession, and 309 00:18:47,000 --> 00:18:50,360 Speaker 1: people have been nervous about doing too large a pure buyout. 310 00:18:50,800 --> 00:18:53,239 Speaker 1: Though the biggest buyouts have ever done, some of them 311 00:18:53,280 --> 00:18:55,639 Speaker 1: have worked out. Mike saw Michael Dwll he's here and 312 00:18:55,680 --> 00:18:57,600 Speaker 1: he did maybe the biggest buyout, maybe one of the 313 00:18:57,600 --> 00:19:01,680 Speaker 1: most successful ever. But generally buyouts have been recent years 314 00:19:01,680 --> 00:19:03,639 Speaker 1: and the big ones have been in the five to 315 00:19:03,760 --> 00:19:06,560 Speaker 1: ten billion dollar range. There have been very few fifteen 316 00:19:06,600 --> 00:19:09,400 Speaker 1: twenty billion dollar one. Some are now reported to be 317 00:19:09,400 --> 00:19:13,560 Speaker 1: being considered. But uh, it's harder to do a billion 318 00:19:13,560 --> 00:19:15,520 Speaker 1: dollar buyout. And it talked to me about how much 319 00:19:15,520 --> 00:19:17,520 Speaker 1: things have changed over the last several decades and got 320 00:19:17,520 --> 00:19:18,960 Speaker 1: back to when you started and what it was like. 321 00:19:19,640 --> 00:19:23,399 Speaker 1: There's more firms with more money doing more of the 322 00:19:23,440 --> 00:19:26,200 Speaker 1: things that you've always been doing. Does that make it harder? Well, 323 00:19:26,200 --> 00:19:29,640 Speaker 1: if there's a bifurcation there when I started, Carl twovate 324 00:19:29,680 --> 00:19:31,840 Speaker 1: equi firms in the world. Now they're eight thousand, five hundred, 325 00:19:32,080 --> 00:19:34,080 Speaker 1: but there are three or four that are really at 326 00:19:34,080 --> 00:19:36,840 Speaker 1: the very largest size, and there maybe another ten that 327 00:19:36,880 --> 00:19:39,240 Speaker 1: can do very large deals as well, and so those 328 00:19:39,280 --> 00:19:41,560 Speaker 1: are seeing the biggest deals and getting the best financing 329 00:19:41,560 --> 00:19:44,400 Speaker 1: and so forth. So it's different. The biggest changes since 330 00:19:44,440 --> 00:19:47,920 Speaker 1: I started Carlisle with others is one, they're more investors 331 00:19:47,960 --> 00:19:50,440 Speaker 1: interested in this retail as well as sovereign wealth funds, 332 00:19:50,480 --> 00:19:53,840 Speaker 1: which didn't really exist that much before. Secondly, the large 333 00:19:53,840 --> 00:19:56,560 Speaker 1: private equity firms are now publicly traded and so they 334 00:19:56,600 --> 00:19:59,879 Speaker 1: have their own um public uh you know. Following you 335 00:20:00,000 --> 00:20:02,600 Speaker 1: also see the large private infirms doing more than private equity, 336 00:20:02,760 --> 00:20:05,920 Speaker 1: private credit, infrastructure, real estate, so they're diversified a fair 337 00:20:05,920 --> 00:20:08,840 Speaker 1: a bit. And those are some of the biggest changes. 338 00:20:08,960 --> 00:20:11,720 Speaker 1: But also rates of return have come down. It used 339 00:20:11,720 --> 00:20:13,800 Speaker 1: to be in private equity people want to net internal 340 00:20:13,840 --> 00:20:16,520 Speaker 1: rates return. Today if you can get a net internal 341 00:20:16,560 --> 00:20:19,280 Speaker 1: rates return of for Adam, people were happy with that 342 00:20:19,320 --> 00:20:21,439 Speaker 1: because interest rates are so low. I'm told now that 343 00:20:21,520 --> 00:20:24,000 Speaker 1: rising capital is the easy part. Deploying it is a 344 00:20:24,000 --> 00:20:25,960 Speaker 1: whole lot tougher. Is that the right way thinking about 345 00:20:25,960 --> 00:20:28,760 Speaker 1: things at the moment. Well, the people that have to 346 00:20:28,880 --> 00:20:31,840 Speaker 1: raise the money don't say it's easy, but it's not 347 00:20:31,920 --> 00:20:35,119 Speaker 1: as hard as it has been historically. Because private equity 348 00:20:35,160 --> 00:20:38,119 Speaker 1: has now been accepted as a real asset, avansis not alternative. 349 00:20:38,280 --> 00:20:41,560 Speaker 1: It's mainstream in many ways. And also the sovereign wealth 350 00:20:41,560 --> 00:20:43,600 Speaker 1: funds and the US public pension must have so much 351 00:20:43,640 --> 00:20:46,600 Speaker 1: money and they've made so much money on public equity 352 00:20:46,600 --> 00:20:48,879 Speaker 1: returns and also private equity returns, they have to deploy it, 353 00:20:49,000 --> 00:20:51,080 Speaker 1: and they're giving it to private equity firms in part 354 00:20:51,119 --> 00:20:53,200 Speaker 1: because you see it as a hedge against the recession 355 00:20:53,320 --> 00:20:55,800 Speaker 1: if it ever happens. People think that private firms can 356 00:20:55,800 --> 00:20:58,440 Speaker 1: work through the recession the way they did last time reasonably. Well, 357 00:20:58,680 --> 00:21:01,919 Speaker 1: what is your counsel to the successful tech firms? You're 358 00:21:01,960 --> 00:21:05,639 Speaker 1: wonderful interview a few years ago with Jeff Bezos and others. 359 00:21:05,680 --> 00:21:08,600 Speaker 1: They have an immense challenge of ample free cash flow, 360 00:21:09,200 --> 00:21:12,560 Speaker 1: above average revenue growth. As a general statement as well, 361 00:21:13,000 --> 00:21:16,200 Speaker 1: what is the Rubens thing to do list for them 362 00:21:16,280 --> 00:21:20,320 Speaker 1: strategically to get out ten years? Well, it's amazing what 363 00:21:20,359 --> 00:21:23,480 Speaker 1: the tech companies have done. Um, just take Tim Cook 364 00:21:23,760 --> 00:21:26,520 Speaker 1: when he took over, was about a three billion dollar 365 00:21:26,560 --> 00:21:29,040 Speaker 1: market cap. It's now about one point three trillion, more 366 00:21:29,080 --> 00:21:31,520 Speaker 1: or less. I was adding a hundred billion a week 367 00:21:32,600 --> 00:21:35,800 Speaker 1: Sadella when he took over, maybe market cap at three 368 00:21:35,840 --> 00:21:38,600 Speaker 1: fifty to four hundred billion, now about one point two 369 00:21:38,680 --> 00:21:42,360 Speaker 1: or three trillion UM. These sizes are just staggering. And 370 00:21:42,560 --> 00:21:46,560 Speaker 1: uh of Herbstein, the famous member of the US Council 371 00:21:46,600 --> 00:21:49,680 Speaker 1: Economic Advisor under President Nixon one, said if something can't 372 00:21:49,800 --> 00:21:52,919 Speaker 1: keep going on forever, it won't. So at some point, 373 00:21:53,040 --> 00:21:55,439 Speaker 1: at some point, I don't know when, h it probably 374 00:21:55,480 --> 00:21:58,119 Speaker 1: can't keep going on at this size. Generally, when you 375 00:21:58,160 --> 00:22:00,639 Speaker 1: have something something this big, and you have it this 376 00:22:00,680 --> 00:22:03,719 Speaker 1: is profitable, usually the US government comes along and says, hey, 377 00:22:03,760 --> 00:22:05,480 Speaker 1: you're having too much fun here. We need to do 378 00:22:05,560 --> 00:22:07,760 Speaker 1: something about that. But that doesn't seem to be happening 379 00:22:07,840 --> 00:22:09,720 Speaker 1: right now. Let's talk about what has happened over the 380 00:22:09,760 --> 00:22:12,399 Speaker 1: last year. Some red flags coming out of private markets 381 00:22:12,400 --> 00:22:14,680 Speaker 1: as they looked become public, and the biggest one was 382 00:22:14,760 --> 00:22:18,720 Speaker 1: way work lessons learned from last year? What aren't they? Well? 383 00:22:18,760 --> 00:22:21,320 Speaker 1: I think when you have a fund that is very 384 00:22:21,400 --> 00:22:24,440 Speaker 1: very very big UM like the Soft Bank Fund, the 385 00:22:24,640 --> 00:22:27,600 Speaker 1: Vision Fund UM, you have to deploy large amounts of 386 00:22:27,640 --> 00:22:30,119 Speaker 1: capital and you can probably put too much money into 387 00:22:30,200 --> 00:22:32,240 Speaker 1: one deal. And I think in that particular case it 388 00:22:32,280 --> 00:22:34,920 Speaker 1: appears that a lot of money was put in at 389 00:22:35,000 --> 00:22:37,480 Speaker 1: probably a higher valuation should be the case. And then 390 00:22:37,480 --> 00:22:40,520 Speaker 1: there were other concerns as well about corporate governance and 391 00:22:40,560 --> 00:22:42,600 Speaker 1: so forth. But you know, they're mistakes that are made 392 00:22:42,600 --> 00:22:44,600 Speaker 1: in every generation. That this wasn't the first time this 393 00:22:44,640 --> 00:22:46,359 Speaker 1: kind of thing has ever happened. It won't be the last. 394 00:22:46,600 --> 00:22:48,120 Speaker 1: But I think a lot of people have learned something 395 00:22:48,119 --> 00:22:51,040 Speaker 1: from that deal. David Ruinstein, you are a great student 396 00:22:51,160 --> 00:22:54,480 Speaker 1: of this nation's history. We had an extraordinary press conference 397 00:22:54,520 --> 00:22:58,679 Speaker 1: in the president United States today. You've contributed to Ford's Theater, 398 00:22:58,840 --> 00:23:02,280 Speaker 1: to the wonderful museum next to it. You've greatly contributed 399 00:23:02,600 --> 00:23:05,359 Speaker 1: to our Library of Congress as well. What is your 400 00:23:05,400 --> 00:23:11,680 Speaker 1: study about this nation moves forward from the process of impeachment. Well, 401 00:23:11,720 --> 00:23:14,840 Speaker 1: it's a very strange situation if you were to come 402 00:23:15,160 --> 00:23:18,920 Speaker 1: into this planet from Mars and say, or from England, 403 00:23:19,160 --> 00:23:21,720 Speaker 1: or from England or any place, and say you have 404 00:23:21,880 --> 00:23:25,320 Speaker 1: a president of the United States who's being impeached, only 405 00:23:25,359 --> 00:23:28,439 Speaker 1: the third president who's been impeached, and a trial is 406 00:23:28,480 --> 00:23:31,240 Speaker 1: going on in the Senate. Yet the economy is going 407 00:23:31,280 --> 00:23:34,080 Speaker 1: along very well. The business community seems to be not 408 00:23:34,240 --> 00:23:36,960 Speaker 1: affected by the what's going on in the Senate right now. 409 00:23:37,000 --> 00:23:38,879 Speaker 1: I was at the breakfast with the President this morning 410 00:23:39,000 --> 00:23:41,320 Speaker 1: before the press conference, and it was clear that the 411 00:23:41,320 --> 00:23:44,520 Speaker 1: Business Committee is pretty supportive of his policies, you know, 412 00:23:44,680 --> 00:23:47,200 Speaker 1: So I it's it's it's a hard thing to kind 413 00:23:47,200 --> 00:23:50,840 Speaker 1: of uh explain that outsiders that the economy is doing 414 00:23:50,880 --> 00:23:52,919 Speaker 1: so well and the president has a lot of support 415 00:23:52,920 --> 00:23:55,680 Speaker 1: in the business community for sure, yet he's being impeached 416 00:23:55,720 --> 00:23:58,000 Speaker 1: and and tried in the Senate. It's hard to understand. 417 00:23:58,080 --> 00:23:59,960 Speaker 1: It's fun question just quickly. You were in that matsing 418 00:24:00,040 --> 00:24:02,520 Speaker 1: this morning with the President of United States, did anyone 419 00:24:02,520 --> 00:24:06,480 Speaker 1: ask him about impeachment? Well, no, there was that question 420 00:24:06,560 --> 00:24:09,040 Speaker 1: was not asked. A single question. Well it wasn't. There 421 00:24:09,119 --> 00:24:12,440 Speaker 1: was no opportunity for questions really because the President came 422 00:24:12,480 --> 00:24:15,960 Speaker 1: and made up talk and then his daughter, Ivanka made 423 00:24:16,040 --> 00:24:18,880 Speaker 1: up talk about what she's doing in the jobs, job 424 00:24:18,960 --> 00:24:22,239 Speaker 1: creation area with Tim Cook and Jenny Vermetti. So when 425 00:24:22,280 --> 00:24:24,879 Speaker 1: they finished that, it was you know, that was they 426 00:24:24,960 --> 00:24:28,680 Speaker 1: kept the mic away from room. But I would say 427 00:24:28,720 --> 00:24:31,080 Speaker 1: that that's probably not the audience that's gonna probably ask 428 00:24:31,160 --> 00:24:33,960 Speaker 1: those questions. It would be my guests. And so I 429 00:24:34,000 --> 00:24:36,199 Speaker 1: think the audience that would probably ask those questions, are 430 00:24:36,480 --> 00:24:38,240 Speaker 1: you know, probably the press people and they weren't not 431 00:24:38,400 --> 00:24:40,440 Speaker 1: in that room, and maybe for good reason. To David, 432 00:24:40,440 --> 00:24:43,439 Speaker 1: great to see you Ribinstein there, the Carlisle Group, co 433 00:24:43,560 --> 00:24:47,160 Speaker 1: founder and coach most of host of pairs to pair, 434 00:24:47,240 --> 00:24:49,680 Speaker 1: we should say as well, he sits in this scene 435 00:24:49,800 --> 00:25:02,960 Speaker 1: quite a lot too. Great lineup of guests, ready pleased 436 00:25:02,960 --> 00:25:05,200 Speaker 1: to say that. Right next to us here in Dallas, Switzerland, 437 00:25:05,359 --> 00:25:08,639 Speaker 1: live on Bliemback Radio and on Bloomberg Television is James Gorman, 438 00:25:08,680 --> 00:25:12,080 Speaker 1: Morgan Stanley c Mr Gorman. Good day to you, Thanks 439 00:25:12,119 --> 00:25:14,240 Speaker 1: for having it's John and Tom. Great to be great 440 00:25:14,280 --> 00:25:16,800 Speaker 1: to have you with us. I'm still really from some 441 00:25:16,960 --> 00:25:19,680 Speaker 1: comments we got from Bob Prince of Bridgewater thirty minutes ago, 442 00:25:20,440 --> 00:25:22,680 Speaker 1: who said that the boom bust cycle as we know it, 443 00:25:23,480 --> 00:25:27,480 Speaker 1: it's done, it's over. Please stay back to that, you'd 444 00:25:27,560 --> 00:25:29,680 Speaker 1: have to kill fear and greed. I think for that 445 00:25:29,840 --> 00:25:31,879 Speaker 1: to be true. Do you think we have done? No? 446 00:25:32,080 --> 00:25:34,800 Speaker 1: I don't I think you know. I mean, listen, there's 447 00:25:35,040 --> 00:25:37,880 Speaker 1: there's a reason we've had cycles going back thousands of years, 448 00:25:37,960 --> 00:25:40,240 Speaker 1: and I don't think that stops. We we happen to 449 00:25:40,320 --> 00:25:44,679 Speaker 1: be in a very benign period with relatively relatively uh 450 00:25:45,359 --> 00:25:49,960 Speaker 1: global stability and you know, relatively strong economic growth around 451 00:25:49,960 --> 00:25:52,800 Speaker 1: the world, not spectacular well obviously Europe slower than the US, 452 00:25:53,200 --> 00:25:56,520 Speaker 1: but for you know, geopolitically, this this isn't a bad decade. 453 00:25:56,560 --> 00:26:00,359 Speaker 1: But no, I think, um, I don't think there's cycles 454 00:26:00,400 --> 00:26:01,720 Speaker 1: are done. I want to get to the nuts and 455 00:26:01,800 --> 00:26:04,240 Speaker 1: bolts of your bank, your operations strategy in a moment. 456 00:26:04,400 --> 00:26:06,120 Speaker 1: I also want your view on the Federal Reserve too, 457 00:26:06,720 --> 00:26:10,240 Speaker 1: the balance sheet expansion. Is it QI or is it 458 00:26:10,359 --> 00:26:12,760 Speaker 1: not QUE? That debate is raging on Wall Street at 459 00:26:12,800 --> 00:26:15,440 Speaker 1: the moment. What is James Gorman's call on that? What 460 00:26:15,640 --> 00:26:18,480 Speaker 1: is it? Well, you know, the fit only has two 461 00:26:18,560 --> 00:26:20,480 Speaker 1: real tools that they're working with at the moment, and 462 00:26:20,560 --> 00:26:24,040 Speaker 1: they're pretty much exhausted the rates, So that's that's the reality. 463 00:26:24,080 --> 00:26:25,840 Speaker 1: So they've only got the balance set that they're working with, 464 00:26:25,960 --> 00:26:27,480 Speaker 1: and it is a form of QUI. I mean, it 465 00:26:27,560 --> 00:26:31,280 Speaker 1: has been subsidizing process. It's been helping the markets along, 466 00:26:31,560 --> 00:26:33,200 Speaker 1: and they've done it for good reason. I mean, when 467 00:26:33,200 --> 00:26:36,800 Speaker 1: they raised rates, what was it months ago, the markets 468 00:26:36,800 --> 00:26:39,320 Speaker 1: stoker scarce. So I think the fetters just bringing things 469 00:26:39,359 --> 00:26:41,199 Speaker 1: back in line. What are the implications of that at 470 00:26:41,240 --> 00:26:42,959 Speaker 1: the moment. If the Fed keeps saying it's not que 471 00:26:43,400 --> 00:26:45,960 Speaker 1: but many people, including yourself, believe it is. No Kashkari 472 00:26:46,040 --> 00:26:48,320 Speaker 1: the Minneapolis Fed is getting his head around it. He 473 00:26:48,359 --> 00:26:50,960 Speaker 1: doesn't understand why people are calling it QUI. You're taking 474 00:26:50,960 --> 00:26:53,800 Speaker 1: a wrist free asset reserves and transferring it for another 475 00:26:53,800 --> 00:26:58,120 Speaker 1: wrist free asset t bills, no duration involved, no risk involved. 476 00:26:59,000 --> 00:27:03,560 Speaker 1: How is it queens providing liquidity to the market? Right? 477 00:27:03,560 --> 00:27:06,840 Speaker 1: They're providing a nondepending to say we here. That's basically 478 00:27:06,920 --> 00:27:09,080 Speaker 1: the message. It's a message of confidence as much as 479 00:27:09,119 --> 00:27:12,200 Speaker 1: it is of activity. I want to move to the triumph, 480 00:27:12,359 --> 00:27:14,960 Speaker 1: which is Morgan Stanley of the X number of years 481 00:27:15,040 --> 00:27:18,840 Speaker 1: under your tenure in wealth management, the margins you have received, 482 00:27:18,880 --> 00:27:22,160 Speaker 1: your statements the other day of improving margins as well. 483 00:27:23,080 --> 00:27:27,240 Speaker 1: Everybody in this valley wants to be James Gorman. Everybody 484 00:27:27,320 --> 00:27:30,160 Speaker 1: I know wants to get into wealth management. They want 485 00:27:30,200 --> 00:27:33,080 Speaker 1: to catch up with what you saw X number of 486 00:27:33,160 --> 00:27:36,480 Speaker 1: years ago. Do you worry that we will compete away 487 00:27:36,560 --> 00:27:39,399 Speaker 1: the profits in the business that if everybody gets in 488 00:27:39,800 --> 00:27:42,639 Speaker 1: like wheat farmers in Kansas. Kansas is a state James 489 00:27:42,840 --> 00:27:44,960 Speaker 1: in the middle of the nation. If we if we 490 00:27:45,440 --> 00:27:49,440 Speaker 1: I think is familiar with familiar with a citizen since 491 00:27:49,480 --> 00:27:54,679 Speaker 1: two thousand four, Well, don't want to be made everybody, 492 00:27:55,000 --> 00:27:58,439 Speaker 1: but everybody wants to get into wealth management. Is there 493 00:27:58,440 --> 00:28:00,760 Speaker 1: a risk that you compete away the margins and the 494 00:28:00,840 --> 00:28:03,920 Speaker 1: Morgan Stanley margins come down, down, down, Yeah, there's a 495 00:28:03,960 --> 00:28:06,119 Speaker 1: difference between wanting to do it and being able to 496 00:28:06,200 --> 00:28:10,160 Speaker 1: do it exactly what cost effectively scale matters in wealth management. 497 00:28:10,200 --> 00:28:12,960 Speaker 1: We made that calls and thank you we we made 498 00:28:13,000 --> 00:28:16,159 Speaker 1: that call ten years ago. There are some monster players 499 00:28:16,200 --> 00:28:18,320 Speaker 1: in wealth management, whether it's on the direct side with 500 00:28:18,440 --> 00:28:20,720 Speaker 1: what twelve and a Merrier Trade have now done, what 501 00:28:20,840 --> 00:28:23,920 Speaker 1: Fidelity has done obviously, and what the big full service 502 00:28:24,040 --> 00:28:26,840 Speaker 1: terms like ours have done. It's very hard to replicate 503 00:28:26,920 --> 00:28:28,960 Speaker 1: that I mean to be I want to be in 504 00:28:29,000 --> 00:28:31,439 Speaker 1: this space is a very expensive proposition. So then how 505 00:28:31,520 --> 00:28:34,119 Speaker 1: does scale go? How does the great Gorman roll up 506 00:28:34,160 --> 00:28:36,359 Speaker 1: go in the industry? What do you need to acquire? 507 00:28:36,520 --> 00:28:38,400 Speaker 1: If they want to be a wanna be? They go, 508 00:28:38,560 --> 00:28:41,080 Speaker 1: we want to be Gorman, and you go your want 509 00:28:41,120 --> 00:28:43,480 Speaker 1: to be, We're gonna take you in for value for all. 510 00:28:44,240 --> 00:28:47,480 Speaker 1: When does that process begins. There are very few assets 511 00:28:47,560 --> 00:28:49,560 Speaker 1: out there that you can buy, and if you're buying 512 00:28:49,600 --> 00:28:51,120 Speaker 1: them from a small base, where are you going to 513 00:28:51,160 --> 00:28:53,600 Speaker 1: get the scale synergies from it? So it's really the 514 00:28:53,680 --> 00:28:56,800 Speaker 1: planers like House who can keep consolidating. I think again, 515 00:28:56,920 --> 00:29:00,240 Speaker 1: for entrance into this space extremely expensive. I wouldn't reckon Meender. 516 00:29:00,360 --> 00:29:03,200 Speaker 1: It's easy for us to sit here now and say congratulations, James, 517 00:29:03,240 --> 00:29:04,960 Speaker 1: great call. This was the right call. It was obvious, 518 00:29:05,040 --> 00:29:07,160 Speaker 1: but ten years ago it wasn't. You made that call 519 00:29:07,280 --> 00:29:09,600 Speaker 1: to scale up wealth management pulled back from fixed income 520 00:29:09,640 --> 00:29:13,240 Speaker 1: trading as well. Ten years later. To Tom's point, do 521 00:29:13,360 --> 00:29:15,400 Speaker 1: you need a new play? Does there need to be 522 00:29:15,480 --> 00:29:17,880 Speaker 1: a change in strategy after you've done that for ten years, 523 00:29:17,960 --> 00:29:20,200 Speaker 1: had the success or do you see the setup as 524 00:29:20,240 --> 00:29:24,080 Speaker 1: it stands as having some real durability for another decade. Yeah, 525 00:29:24,400 --> 00:29:27,040 Speaker 1: it's It's a good question and something you're you're constantly 526 00:29:27,040 --> 00:29:30,000 Speaker 1: got to challenge yourself. Just because you've done and it's worked, 527 00:29:30,720 --> 00:29:32,400 Speaker 1: it doesn't mean it's going to work in the future. 528 00:29:32,760 --> 00:29:34,760 Speaker 1: You know, somebody asked me this question on TV a 529 00:29:34,840 --> 00:29:36,400 Speaker 1: couple of years ago, and I said, what about we 530 00:29:36,480 --> 00:29:38,840 Speaker 1: make some money? That's a strategy that's when we're a 531 00:29:38,880 --> 00:29:41,320 Speaker 1: subtemper cent r a week. Now the firm is operating 532 00:29:41,360 --> 00:29:45,280 Speaker 1: eleven r R OTC. These are good numbers, these are 533 00:29:45,360 --> 00:29:48,800 Speaker 1: very solid numbers, record earnings. But now I'm constantly looking 534 00:29:48,880 --> 00:29:52,320 Speaker 1: for ways to grow, particularly wealthiness in management without shrinking 535 00:29:52,360 --> 00:29:55,680 Speaker 1: the Immersement bank. Investment bank is phenomenal equity sales and 536 00:29:55,760 --> 00:29:57,560 Speaker 1: trading number one business in the world, air M and 537 00:29:57,600 --> 00:30:01,280 Speaker 1: a business ec M phenomenal businesses, but there's not obvious 538 00:30:01,320 --> 00:30:03,360 Speaker 1: ways in which you'd acquire and grow on that space. 539 00:30:03,560 --> 00:30:06,240 Speaker 1: Wealth and asset management different categories. Let's take her away. 540 00:30:06,640 --> 00:30:09,000 Speaker 1: Raise the target, Yeah, gave a massive lift to the 541 00:30:09,040 --> 00:30:11,480 Speaker 1: stock last week. Still some questions on how you would 542 00:30:11,520 --> 00:30:13,479 Speaker 1: chieve that. How do you go about getting that target? 543 00:30:13,640 --> 00:30:15,680 Speaker 1: You know we had we had questions when a wealth 544 00:30:15,760 --> 00:30:18,200 Speaker 1: management margins with six percent on whether we could get 545 00:30:18,200 --> 00:30:21,239 Speaker 1: to fifteen and the twenty eight, So, you know, how 546 00:30:21,320 --> 00:30:24,240 Speaker 1: did you affect that game shift? Though? Uh, you know, 547 00:30:24,360 --> 00:30:26,320 Speaker 1: it's a whole bunch of It's a whole bunch of things, 548 00:30:26,440 --> 00:30:29,920 Speaker 1: from restructuring the field operations to bringing more product the 549 00:30:30,000 --> 00:30:33,640 Speaker 1: clients wanted to use, to providing more asset based pricing, 550 00:30:34,320 --> 00:30:37,400 Speaker 1: you know, professionalized in the organization than obviously buying smot money. 551 00:30:37,520 --> 00:30:40,959 Speaker 1: Let's go McKenzie and when in hindsight that looks brilliant, 552 00:30:41,000 --> 00:30:43,640 Speaker 1: let's go on McKenzie right now, on you. The strategy 553 00:30:43,760 --> 00:30:45,680 Speaker 1: is the following and one of them is do nothing. 554 00:30:46,160 --> 00:30:52,480 Speaker 1: Morgan Stanley, acquire banking, Morgan Stanley build banking. There's a 555 00:30:52,560 --> 00:30:55,680 Speaker 1: small firm Goldman. They're trying to do that. And then 556 00:30:55,720 --> 00:30:58,120 Speaker 1: the other thing is do nothing and stay focused. Which 557 00:30:58,160 --> 00:31:02,760 Speaker 1: of those three is the Gorman? Uh? Well, you know 558 00:31:02,920 --> 00:31:05,640 Speaker 1: I'm going to give you an unsatisfactory answer, but you can't. 559 00:31:05,840 --> 00:31:07,840 Speaker 1: You have to look at what the returns would be 560 00:31:07,880 --> 00:31:10,600 Speaker 1: in the strategy. Obviously, if you could acquire a bank, 561 00:31:11,040 --> 00:31:13,000 Speaker 1: but we already have a hundred and fifty billion dollars 562 00:31:13,040 --> 00:31:15,200 Speaker 1: the deposits with the tent largest bank I think or 563 00:31:15,320 --> 00:31:18,120 Speaker 1: eleventh in the country, if you could acquire a bank 564 00:31:18,600 --> 00:31:21,080 Speaker 1: at the right price, under the right those valuations out 565 00:31:21,080 --> 00:31:23,920 Speaker 1: there right now, can you a regional or superregional? And 566 00:31:23,960 --> 00:31:25,960 Speaker 1: then you've got to ask it for a specific institution, 567 00:31:26,000 --> 00:31:28,920 Speaker 1: what does it really bring you? So merely acquiring a bank, 568 00:31:29,000 --> 00:31:30,800 Speaker 1: there are there are in this kind in the US, 569 00:31:30,800 --> 00:31:33,440 Speaker 1: there are four thousand banks. So you've got to have 570 00:31:33,560 --> 00:31:36,120 Speaker 1: something that brings real scale of the institution. Doing that 571 00:31:36,240 --> 00:31:38,040 Speaker 1: has to be, you know, with the right kind of 572 00:31:38,080 --> 00:31:41,560 Speaker 1: economic returns versus building yourself. Currently, Tim, what we're doing 573 00:31:41,640 --> 00:31:44,000 Speaker 1: is number being on that list. We're building it ourselves, 574 00:31:44,440 --> 00:31:47,400 Speaker 1: and we're building the online presence. In banking. We've got, 575 00:31:47,480 --> 00:31:49,680 Speaker 1: as I said, a hundred and fifty beans in deposits. 576 00:31:49,720 --> 00:31:52,360 Speaker 1: We've got a huge mortgage book because our clients want 577 00:31:52,400 --> 00:31:54,760 Speaker 1: to deal with Morgan's what is your distinction versus Mr 578 00:31:54,840 --> 00:31:59,480 Speaker 1: Solomon's Planet Goldman Sachs in terms of building an online presence? Well, 579 00:31:59,520 --> 00:32:02,200 Speaker 1: I really want to comment on on Golden That wouldn't 580 00:32:02,200 --> 00:32:03,800 Speaker 1: I want you to tell me the distinction of the 581 00:32:03,880 --> 00:32:06,479 Speaker 1: Gorman way versus what others are doing. I just imagine 582 00:32:06,520 --> 00:32:10,080 Speaker 1: Mr Solomon won't be commenting on Mr gold because we 583 00:32:10,240 --> 00:32:16,520 Speaker 1: are Boomberg rude continue now that we've set the parameters listen. 584 00:32:16,600 --> 00:32:21,080 Speaker 1: But I won't comment on Goldman strategy obviously. But we're 585 00:32:21,160 --> 00:32:25,160 Speaker 1: building both core capability throughout financial advisors. And when you 586 00:32:25,240 --> 00:32:28,680 Speaker 1: open a financial advisor relationship, why wouldn't you want your 587 00:32:28,720 --> 00:32:32,080 Speaker 1: banking assets in that relationship. So if you're borrowing on margin, 588 00:32:32,440 --> 00:32:34,479 Speaker 1: maybe the better decision is to take out a home 589 00:32:34,520 --> 00:32:37,160 Speaker 1: equity line of credit. That's a banking product, So it's 590 00:32:37,240 --> 00:32:39,400 Speaker 1: mingling of that to make it easier for the client. 591 00:32:39,800 --> 00:32:42,920 Speaker 1: At the same time, we are building our digital capability 592 00:32:43,000 --> 00:32:44,720 Speaker 1: to go online banking, which I guess is what's some 593 00:32:44,800 --> 00:32:46,800 Speaker 1: of our committed Where there are doubts though, and we 594 00:32:46,880 --> 00:32:49,480 Speaker 1: won't name names. Let's talk about your own strategy. Is 595 00:32:49,480 --> 00:32:52,400 Speaker 1: whether you can build this out get scale organically. You 596 00:32:52,480 --> 00:32:54,840 Speaker 1: think we can, Yeah, well we I mean we have. 597 00:32:55,280 --> 00:32:57,400 Speaker 1: I mean we've got a look at the Soleumn deal 598 00:32:57,480 --> 00:33:01,760 Speaker 1: we did. We've got six million clients between asset wealth Management, 599 00:33:01,800 --> 00:33:04,320 Speaker 1: the asset management and then the share Works program solding. 600 00:33:04,600 --> 00:33:07,239 Speaker 1: We've got enormal scale as an organization. What we need 601 00:33:07,400 --> 00:33:09,880 Speaker 1: is more product coming through it. That's really what we need. 602 00:33:09,960 --> 00:33:12,320 Speaker 1: What our clients are calling what you just described as 603 00:33:12,400 --> 00:33:16,320 Speaker 1: a future for American finance. How does it differ from 604 00:33:16,360 --> 00:33:21,200 Speaker 1: the superstore concept that went down in Flames decades ago. Yeah, 605 00:33:21,320 --> 00:33:23,200 Speaker 1: that's a that's a very good question. I think you've 606 00:33:23,240 --> 00:33:25,719 Speaker 1: got to be very careful about building too much complexity 607 00:33:26,160 --> 00:33:29,920 Speaker 1: into these institutions. Number Two, you've got to have management 608 00:33:29,960 --> 00:33:32,160 Speaker 1: that to deal with running, are used to running and 609 00:33:32,280 --> 00:33:37,120 Speaker 1: capable of running not just products, but running organizations. And 610 00:33:37,280 --> 00:33:42,719 Speaker 1: historically our industry didn't have professionalized management. They professionalized super producers. 611 00:33:43,240 --> 00:33:46,400 Speaker 1: So like sitting, you better management that a G or 612 00:33:46,440 --> 00:33:49,200 Speaker 1: an IBM or one of the great American companies would 613 00:33:49,200 --> 00:33:52,320 Speaker 1: have a Microsoft that kind of capability. So we're we're 614 00:33:52,400 --> 00:33:55,920 Speaker 1: investing as much time time on building management capability as 615 00:33:56,000 --> 00:33:59,480 Speaker 1: we are around business. What's the new superproducer look like? 616 00:33:59,560 --> 00:34:01,960 Speaker 1: To go re till John the superproducers? How do you 617 00:34:02,200 --> 00:34:05,960 Speaker 1: build new superproducers which are the lifeline of that huge 618 00:34:06,040 --> 00:34:09,239 Speaker 1: revenue into the bigger profit. You give them teams. I mean, 619 00:34:09,280 --> 00:34:12,480 Speaker 1: our best teams under our top producers have as many 620 00:34:12,560 --> 00:34:16,279 Speaker 1: as people working on them. Because how can I be 621 00:34:17,160 --> 00:34:21,120 Speaker 1: the industry expert on foreign exchange, municipal bonds, growth style. 622 00:34:22,800 --> 00:34:27,000 Speaker 1: That's all right, you guys can do this something modest. 623 00:34:27,040 --> 00:34:30,440 Speaker 1: I can't do this and out You're in ear innique 624 00:34:30,480 --> 00:34:33,160 Speaker 1: capability around you right when you go to see when 625 00:34:33,200 --> 00:34:35,360 Speaker 1: you go to see a specialist, don't you see specialist? 626 00:34:35,360 --> 00:34:37,880 Speaker 1: There are groups of people who have got capabilities that 627 00:34:38,040 --> 00:34:40,440 Speaker 1: make up the full medical needs that we're all going 628 00:34:40,520 --> 00:34:43,440 Speaker 1: to have. So I'm all about building out expertise in 629 00:34:43,520 --> 00:34:48,799 Speaker 1: a collaborative, team based approach, optimized headcountred jobs. When yeah, yeah, 630 00:34:48,960 --> 00:34:51,759 Speaker 1: why James, we were setting the table for the coming year, 631 00:34:51,800 --> 00:34:54,919 Speaker 1: and we're you know, we're we're we've been um, we've 632 00:34:54,960 --> 00:34:58,880 Speaker 1: been cautious. That's sort of our strategy. We're disciplined and cautious. 633 00:34:58,960 --> 00:35:02,640 Speaker 1: And to be finally honest, we had very little attrition 634 00:35:03,080 --> 00:35:05,200 Speaker 1: the last couple of years. We've had almost no attrition. 635 00:35:05,280 --> 00:35:07,480 Speaker 1: Nobody's leaving. And we got to the end of there 636 00:35:07,480 --> 00:35:09,320 Speaker 1: and we said, what does this really add up? And 637 00:35:09,360 --> 00:35:11,600 Speaker 1: we were about to promote hundred and thirty We just 638 00:35:11,680 --> 00:35:14,279 Speaker 1: promote a hundred and thirty new managing directors. You've got 639 00:35:14,360 --> 00:35:17,239 Speaker 1: a great capacity for these. Speaking of promotions, number two 640 00:35:17,280 --> 00:35:21,040 Speaker 1: at the bank, here's it gonna be. Who's going to 641 00:35:21,080 --> 00:35:22,919 Speaker 1: be out? Number two? If I told you that, I'd 642 00:35:22,960 --> 00:35:24,200 Speaker 1: have to kill you, John. When are we going to 643 00:35:24,280 --> 00:35:26,719 Speaker 1: get getting along? Weight? So we thought that this morning 644 00:35:26,760 --> 00:35:29,640 Speaker 1: we left. I just wanted to make some news. When 645 00:35:29,640 --> 00:35:31,279 Speaker 1: are we going to find that will eventually name a 646 00:35:31,360 --> 00:35:34,520 Speaker 1: president or presidents? And uh, you know, I'm committed, and 647 00:35:34,600 --> 00:35:36,800 Speaker 1: I think you guys have reported and others are reported. 648 00:35:36,800 --> 00:35:38,759 Speaker 1: We've got we've got a tremendous team of folks are 649 00:35:38,800 --> 00:35:41,560 Speaker 1: in their late forties early fifties. Are David Weston is 650 00:35:41,640 --> 00:35:45,400 Speaker 1: relaunching Wall Street Week. Part of what you do, what 651 00:35:45,560 --> 00:35:48,360 Speaker 1: part of what you do is to bring the fabric 652 00:35:48,480 --> 00:35:51,200 Speaker 1: of what Luru Kaiser did years ago back? Can we 653 00:35:51,360 --> 00:35:54,279 Speaker 1: make investment fun again? Like lou died years ago? How 654 00:35:54,360 --> 00:35:56,680 Speaker 1: did the Natian do that? He made it a conversation 655 00:35:57,040 --> 00:36:00,319 Speaker 1: rather than a series of you know, he took people 656 00:36:00,360 --> 00:36:02,719 Speaker 1: away from what the daily movement in the prices were 657 00:36:03,120 --> 00:36:06,840 Speaker 1: and he made the conversation around thematics, around personalities, around 658 00:36:06,960 --> 00:36:09,279 Speaker 1: larger trends, and that made a bit more interesting. I 659 00:36:09,360 --> 00:36:12,360 Speaker 1: think just seeing the endless uh you know, series of 660 00:36:12,480 --> 00:36:17,320 Speaker 1: numbers getting thrown at the public, they numb over sounds 661 00:36:17,360 --> 00:36:20,120 Speaker 1: like the surveillance manifesto. James Gorman, thank you so much. 662 00:36:20,200 --> 00:36:23,800 Speaker 1: He is with Morgan standing. Thanks. Thanks Chief executive officers 663 00:36:23,920 --> 00:36:38,840 Speaker 1: as well. That then interview after interview, a heated debate 664 00:36:39,200 --> 00:36:42,479 Speaker 1: about what do you do after bond price up, yield down, 665 00:36:42,960 --> 00:36:45,520 Speaker 1: equity prices to the moon? I mean, there's Apple up 666 00:36:45,520 --> 00:36:48,080 Speaker 1: another hundred billion today, we'll know what the market opening. 667 00:36:48,200 --> 00:36:50,800 Speaker 1: Let's bring a Scott Modest shower cooking him. Partners Global 668 00:36:51,000 --> 00:36:55,480 Speaker 1: ce Io. We're booke handing two radically different comments. Want 669 00:36:55,520 --> 00:36:58,240 Speaker 1: from you to start the week basically saying this market 670 00:36:58,320 --> 00:37:00,520 Speaker 1: was like a Ponzi scheme, and we end the week 671 00:37:01,280 --> 00:37:03,400 Speaker 1: middle of the week so far with bought Prince of 672 00:37:03,440 --> 00:37:06,560 Speaker 1: Bridgewater saying it's the end of the boom bust cyclist, 673 00:37:06,640 --> 00:37:09,120 Speaker 1: we know it. Yeah. I find that really interesting because, 674 00:37:09,120 --> 00:37:11,880 Speaker 1: first off, Bridgewater, the people there are very smart smart. 675 00:37:12,600 --> 00:37:17,239 Speaker 1: But you know, look, if you take the history of 676 00:37:17,280 --> 00:37:21,839 Speaker 1: the United States since the late seventies, um I would 677 00:37:21,960 --> 00:37:26,640 Speaker 1: call monetary policy a policy of bubble to bubble. For instance, 678 00:37:26,800 --> 00:37:30,120 Speaker 1: you know, to save the the economy after the stock 679 00:37:30,200 --> 00:37:34,400 Speaker 1: market crash, right, the Fed cut rates and overinflated commercial 680 00:37:34,480 --> 00:37:36,160 Speaker 1: real estate and then we had to bail out the 681 00:37:36,239 --> 00:37:39,759 Speaker 1: banks with the Resolution Trust Corporation. So then once things 682 00:37:39,800 --> 00:37:44,040 Speaker 1: calmed down again, investors no longer thought that commercial real 683 00:37:44,200 --> 00:37:47,719 Speaker 1: estate was safe, and they inflated the internet bubble to 684 00:37:48,120 --> 00:37:50,440 Speaker 1: the wealth effect to keep the economy going, and then 685 00:37:50,480 --> 00:37:53,800 Speaker 1: of course it went bust, and so then people didn't 686 00:37:53,800 --> 00:37:57,040 Speaker 1: feel safe in stock so they started buying homes and 687 00:37:57,280 --> 00:38:00,960 Speaker 1: we played that out in a bust. And so where 688 00:38:01,120 --> 00:38:02,759 Speaker 1: my attitude is when you look at the amount of 689 00:38:02,880 --> 00:38:07,560 Speaker 1: leverage in corporate America and where we are today. You've 690 00:38:07,960 --> 00:38:10,879 Speaker 1: you definitely are inflating a bubble here in credit. Let's 691 00:38:10,880 --> 00:38:12,960 Speaker 1: talk about the quote that you sent out to clients 692 00:38:13,080 --> 00:38:15,319 Speaker 1: a long note. I've read it. Here's a quote from 693 00:38:15,360 --> 00:38:17,200 Speaker 1: it the time. It gets heart to predict, but it 694 00:38:17,239 --> 00:38:18,680 Speaker 1: reminds me a lot of the lead up to two 695 00:38:18,719 --> 00:38:21,320 Speaker 1: thousand and one and two thousand and two. Then you 696 00:38:21,400 --> 00:38:23,640 Speaker 1: pointed out the term palmsy scheme, where the only reason 697 00:38:23,719 --> 00:38:26,320 Speaker 1: investors keep having to risk is the fair the prices 698 00:38:26,480 --> 00:38:29,239 Speaker 1: will be higher tomorrow. With that in mind, you've made 699 00:38:29,280 --> 00:38:32,719 Speaker 1: this call it de risking or you're staying long risk. 700 00:38:33,120 --> 00:38:35,240 Speaker 1: Do you know. I gotta tell you something. We started 701 00:38:35,320 --> 00:38:38,520 Speaker 1: de risking back in two thousand eighteen. And I can 702 00:38:38,600 --> 00:38:41,000 Speaker 1: tell you that I was an investment genius in two 703 00:38:41,040 --> 00:38:45,160 Speaker 1: thousand eighteen, but when the FED pivoted, you had to 704 00:38:45,200 --> 00:38:49,160 Speaker 1: ask yourself a question, uh and and And I'm guided 705 00:38:49,200 --> 00:38:52,440 Speaker 1: a lot by behavioral finance and the work of Danny Khneman, 706 00:38:52,480 --> 00:38:55,920 Speaker 1: who won the Nobel Prize um. One of the biggest 707 00:38:56,000 --> 00:38:59,759 Speaker 1: mistakes asset managers are asset allocators make is they try 708 00:38:59,840 --> 00:39:03,280 Speaker 1: to do too many tactical trades and so what Danny 709 00:39:03,320 --> 00:39:06,160 Speaker 1: would say is, look five years into the future, what 710 00:39:06,280 --> 00:39:09,600 Speaker 1: do you see coming, and don't change what you're doing 711 00:39:10,200 --> 00:39:14,000 Speaker 1: to try to catch a tack a tactical move. So, 712 00:39:14,360 --> 00:39:17,560 Speaker 1: you know, and so in nine in two thousand nineteen 713 00:39:17,680 --> 00:39:20,360 Speaker 1: is an investment manager I look like an idiot because 714 00:39:20,400 --> 00:39:23,760 Speaker 1: we've trailed a lot of other people who have basically 715 00:39:23,880 --> 00:39:26,560 Speaker 1: just said, hey, you know, wave in corporate debt, wave 716 00:39:26,680 --> 00:39:29,239 Speaker 1: in high yield. Uh you know, let's go for it, 717 00:39:29,520 --> 00:39:32,960 Speaker 1: and uh, you know someday, you know, the musical stop. 718 00:39:33,040 --> 00:39:36,920 Speaker 1: But is the elasticity when the music stops something anyone 719 00:39:37,040 --> 00:39:41,240 Speaker 1: can manage, including smaller investors listening on Bloomberg Radio, watching 720 00:39:41,280 --> 00:39:45,400 Speaker 1: on Bloomberg TV. Is the elasticity or malieability of the 721 00:39:45,480 --> 00:39:48,680 Speaker 1: system there so we can respond and react when we 722 00:39:48,800 --> 00:39:51,200 Speaker 1: get that, or is it a jump condition where it's 723 00:39:51,200 --> 00:39:52,960 Speaker 1: going to be ugly? You know? One of one of 724 00:39:53,040 --> 00:39:56,480 Speaker 1: my colleagues at Guggenheim likes to say that asset prices 725 00:39:56,560 --> 00:39:59,440 Speaker 1: go up on an escalator and they come down and 726 00:39:59,480 --> 00:40:03,120 Speaker 1: they at out in an elevator. Right. So the problem is, 727 00:40:03,160 --> 00:40:06,400 Speaker 1: since no nobody I know is smart enough to figure 728 00:40:06,400 --> 00:40:10,800 Speaker 1: out when the music stops, you know, I think that's 729 00:40:10,840 --> 00:40:14,520 Speaker 1: a really difficult thing for people to try to time. 730 00:40:15,280 --> 00:40:19,359 Speaker 1: And uh, you know, here's an example. If two days 731 00:40:19,440 --> 00:40:22,799 Speaker 1: from now or early next week, Uh, there's an announcement 732 00:40:22,920 --> 00:40:25,520 Speaker 1: from the Federal Reserve or in the FED meeting online 733 00:40:25,560 --> 00:40:29,720 Speaker 1: see that they're thinking about tapering the bill purchase program. 734 00:40:30,480 --> 00:40:33,040 Speaker 1: Remember what happened when we talked about tapering QUI in 735 00:40:33,120 --> 00:40:36,320 Speaker 1: two thousand. We didn't even eat the act the taper tantrum, 736 00:40:36,360 --> 00:40:38,160 Speaker 1: and this is going to be called the minor tempertum. 737 00:40:38,880 --> 00:40:43,040 Speaker 1: Carry on? Is this que then? James Stanleyaniel See said 738 00:40:43,040 --> 00:40:45,799 Speaker 1: exactly the same thing. Any people disagree with you that, well, 739 00:40:46,160 --> 00:40:47,600 Speaker 1: I mean, I gotta tell you something. When I talk 740 00:40:47,640 --> 00:40:50,560 Speaker 1: to people at the FED and other believers that don't 741 00:40:50,600 --> 00:40:52,880 Speaker 1: think this is QUEI, they say, oh, well they're the 742 00:40:52,960 --> 00:40:57,920 Speaker 1: FETE isn't buying longer term duration assets to affect the 743 00:40:57,960 --> 00:41:00,880 Speaker 1: shape of the term structure of interest rates. And my 744 00:41:01,040 --> 00:41:03,480 Speaker 1: response to that is, look, I think the official name 745 00:41:03,520 --> 00:41:07,759 Speaker 1: of q E is large scale asset purchases, right, and 746 00:41:08,040 --> 00:41:11,279 Speaker 1: this looks like large scale. I spoke to and John 747 00:41:11,360 --> 00:41:13,319 Speaker 1: this is important. I spoke to Ken Rogoff two hours 748 00:41:13,320 --> 00:41:15,640 Speaker 1: ago in a panel here and web and he alluded 749 00:41:15,680 --> 00:41:18,919 Speaker 1: definitely to what Mr Miners saying. The idea that look 750 00:41:19,080 --> 00:41:21,560 Speaker 1: is QUI, it's not q He doesn't matter. The fact 751 00:41:21,680 --> 00:41:26,320 Speaker 1: is they're affecting the process which changes the behavior of 752 00:41:26,440 --> 00:41:29,040 Speaker 1: the market. No, West Scott. What I want to try 753 00:41:29,080 --> 00:41:32,719 Speaker 1: and understand is what is the risk of getting it wrong? Well, 754 00:41:32,920 --> 00:41:34,840 Speaker 1: what's the risk of saying it's QUI if it's not 755 00:41:35,000 --> 00:41:36,759 Speaker 1: que And what's the risk of saying it's not q 756 00:41:37,000 --> 00:41:39,720 Speaker 1: when it is QE? Is this just debate, a debate 757 00:41:39,800 --> 00:41:44,680 Speaker 1: just a half behind closed doors. I think whatever label 758 00:41:44,760 --> 00:41:48,160 Speaker 1: we put on it, the consequences are the same. And 759 00:41:48,320 --> 00:41:51,560 Speaker 1: that is that when you put liquidity into the system 760 00:41:51,600 --> 00:41:53,719 Speaker 1: and you create money, which is what the central bank 761 00:41:53,880 --> 00:41:56,919 Speaker 1: is doing, it doesn't matter what you buy. You could 762 00:41:56,920 --> 00:42:01,000 Speaker 1: buy baseball cards, right, But that liquidity eeks out into 763 00:42:01,120 --> 00:42:04,880 Speaker 1: other asset categories and so you get inflated prices in 764 00:42:05,000 --> 00:42:08,080 Speaker 1: other areas. And you know, as I've talked about in 765 00:42:08,120 --> 00:42:11,000 Speaker 1: the recent peace corporate bonds, uh, you know, with central 766 00:42:11,040 --> 00:42:14,560 Speaker 1: banks in Europe and Asia running negative interest rates and 767 00:42:14,680 --> 00:42:17,640 Speaker 1: the FED pumping out liquidity, you know, it's just the 768 00:42:17,719 --> 00:42:21,000 Speaker 1: incremental stretch for yell just keeps compressing risk. Ask John 769 00:42:21,080 --> 00:42:23,480 Speaker 1: I invested in baseball cards years ago. I failed. I 770 00:42:23,560 --> 00:42:26,160 Speaker 1: bought I bought oilcam BOYD where I should have bought Lenny. 771 00:42:28,560 --> 00:42:34,000 Speaker 1: I want to get to the baseball John's question about 772 00:42:34,200 --> 00:42:37,920 Speaker 1: the news you've made here, Scott minored about Ponzi scheme 773 00:42:38,080 --> 00:42:41,000 Speaker 1: that assumes under Ponzi under what we know of Bernie 774 00:42:41,080 --> 00:42:44,320 Speaker 1: made Off, there's someone ill out there, there's someone evil, 775 00:42:44,600 --> 00:42:48,040 Speaker 1: there's someone bordering on civil or criminal violation. Who is 776 00:42:48,120 --> 00:42:51,200 Speaker 1: that person without a minored Ponzi school, Well, I mean, 777 00:42:51,440 --> 00:42:54,920 Speaker 1: I'm not so sure that when Himan Minsky framed the 778 00:42:55,040 --> 00:42:57,880 Speaker 1: comment about a Ponzi market that he was thinking that 779 00:42:57,960 --> 00:43:01,400 Speaker 1: there was some nefarious activity going on. It's more of 780 00:43:01,600 --> 00:43:06,200 Speaker 1: a an investor behavior which is being encouraged, if you 781 00:43:06,239 --> 00:43:09,640 Speaker 1: want to find out by the Fed, because we're just 782 00:43:09,960 --> 00:43:14,200 Speaker 1: you know every time. Look, there was a debate back 783 00:43:14,239 --> 00:43:17,799 Speaker 1: in December. You know, do we have a power plate? Right? 784 00:43:18,440 --> 00:43:22,080 Speaker 1: We do? It was delivered silver plutter. Yeah, so we're 785 00:43:22,160 --> 00:43:24,480 Speaker 1: we're operating back in that mode again. Before you go 786 00:43:24,800 --> 00:43:27,480 Speaker 1: made a conviction tride, Big cost made a lot of headlines. 787 00:43:28,080 --> 00:43:29,480 Speaker 1: What do you put your money? What's the number one 788 00:43:29,480 --> 00:43:35,719 Speaker 1: conviction tride right now? For silver? Silver? Silver? Why not gold, 789 00:43:36,400 --> 00:43:38,719 Speaker 1: because when you look at the relative values of silver 790 00:43:38,840 --> 00:43:43,560 Speaker 1: and gold, UH, silver today is about, let's say, sixty 791 00:43:45,160 --> 00:43:49,120 Speaker 1: below its prior peak. Gold is getting very close to 792 00:43:49,200 --> 00:43:51,480 Speaker 1: its prior peak and go exponential like we've seen in 793 00:43:51,600 --> 00:43:54,040 Speaker 1: some of the non precious metals. I think there's a 794 00:43:54,120 --> 00:43:57,680 Speaker 1: high probability of that. It's got fantastic conversation, a lot 795 00:43:57,719 --> 00:44:00,440 Speaker 1: of headlines made this way from the cookonhut Global h 796 00:44:10,040 --> 00:44:13,920 Speaker 1: Shnelli Boss joining us from UH Davos. Seems like yesterday 797 00:44:13,960 --> 00:44:18,160 Speaker 1: global warming, climate change on the forefront. Today the focus 798 00:44:18,280 --> 00:44:22,760 Speaker 1: moving more to markets, with monetary policy in UH in focus. 799 00:44:22,880 --> 00:44:24,880 Speaker 1: Can you give us a sense of just the mood 800 00:44:25,440 --> 00:44:28,520 Speaker 1: today as people speak about the economy, which is generally 801 00:44:28,600 --> 00:44:32,879 Speaker 1: good and the industry policy which still remains concerning to them. Yeah, 802 00:44:33,000 --> 00:44:37,200 Speaker 1: it's funny, Lisa, because what's generally good, we're definitely seeing 803 00:44:37,200 --> 00:44:39,520 Speaker 1: a lot of some of the um you know, the 804 00:44:39,600 --> 00:44:43,640 Speaker 1: high minds here thinking of very significant risks in the 805 00:44:43,760 --> 00:44:47,080 Speaker 1: market and credit markets in particular, a lot of bad 806 00:44:47,160 --> 00:44:50,839 Speaker 1: feelings towards central bankers here. Of course, negative interest rates 807 00:44:50,880 --> 00:44:54,080 Speaker 1: are really causing a lot of European banks to bleed 808 00:44:54,320 --> 00:44:57,640 Speaker 1: and offset some of these costs to consumers, and once 809 00:44:57,680 --> 00:44:59,920 Speaker 1: they all set those costs of consumers, it becomes unclear 810 00:45:00,040 --> 00:45:02,239 Speaker 1: year to a lot more people how good it is 811 00:45:02,320 --> 00:45:06,120 Speaker 1: for the economy. Meanwhile, in the US, the federal reserves policy, 812 00:45:06,520 --> 00:45:09,480 Speaker 1: a lot of folks believe that, you know, while the 813 00:45:09,560 --> 00:45:13,000 Speaker 1: low interest rates have inflated asset prices, that there could 814 00:45:13,080 --> 00:45:15,880 Speaker 1: be real issues in the future. We talked to CEO 815 00:45:16,280 --> 00:45:19,320 Speaker 1: of Barclays, Just sal Daley, who had said, you know, 816 00:45:19,760 --> 00:45:22,120 Speaker 1: Oxford just issued a hundred year bonnet a little over 817 00:45:22,160 --> 00:45:24,040 Speaker 1: two percent, and I don't think that's a good a 818 00:45:24,080 --> 00:45:28,360 Speaker 1: good thing. Interesting stionally, we saw earlier this week numbers 819 00:45:28,400 --> 00:45:31,719 Speaker 1: out of ubs disappointing. Once again. What's the feeling over 820 00:45:32,040 --> 00:45:34,279 Speaker 1: in Davos as it relates to just kind of the 821 00:45:34,440 --> 00:45:37,799 Speaker 1: European banking sector. You're you know, talking about negative interest 822 00:45:37,880 --> 00:45:40,120 Speaker 1: rates awful tough way to kind of run a bank, 823 00:45:40,760 --> 00:45:42,400 Speaker 1: for sure, And it depends on who you're talking to. 824 00:45:42,560 --> 00:45:46,120 Speaker 1: I had mentioned just daily before, and there's some optimism 825 00:45:46,200 --> 00:45:49,800 Speaker 1: there around the investment bank, which is surprising because just 826 00:45:49,920 --> 00:45:52,080 Speaker 1: a year ago everybody was a little worried across Well 827 00:45:52,120 --> 00:45:55,200 Speaker 1: Street about the investment banking businesses. But the trading figures 828 00:45:55,200 --> 00:45:57,480 Speaker 1: in the fourth quarter for the big US banks was 829 00:45:57,480 --> 00:46:01,879 Speaker 1: a blowout. Meanwhile, over at UBS, wealth management is tied 830 00:46:01,920 --> 00:46:05,440 Speaker 1: to market sentiment. Of course, they want to expand very 831 00:46:05,480 --> 00:46:08,640 Speaker 1: aggressively in lending. They're really worried about interest rates, and 832 00:46:08,640 --> 00:46:12,120 Speaker 1: they're worried about growing their their net new money at 833 00:46:12,120 --> 00:46:16,200 Speaker 1: a time when growth has been slowing generally around the world. 834 00:46:16,560 --> 00:46:21,680 Speaker 1: Remember at UBS, their US assets have been kind of sluggish, 835 00:46:22,000 --> 00:46:24,280 Speaker 1: where they really brought in a lot of these assets 836 00:46:24,320 --> 00:46:28,080 Speaker 1: in China, where we're seeing another host of issues. So 837 00:46:28,280 --> 00:46:31,160 Speaker 1: right now it seems like the banking sector has been 838 00:46:31,280 --> 00:46:34,719 Speaker 1: challenged by negative interest rates. Was there anything positive that 839 00:46:34,800 --> 00:46:37,400 Speaker 1: people said considering the fact that we currently are facing 840 00:46:37,440 --> 00:46:41,320 Speaker 1: an economy that seems to be copacetic. Oh boy, I 841 00:46:41,440 --> 00:46:43,360 Speaker 1: was looking for the bad stuff. I have to be honest, 842 00:46:43,680 --> 00:46:46,879 Speaker 1: and I know I'm you know, That's that's typically how 843 00:46:47,000 --> 00:46:50,200 Speaker 1: it works, right People are looking for the for sort 844 00:46:50,200 --> 00:46:52,480 Speaker 1: of what what's the problem that we're not foreseeing? But 845 00:46:52,560 --> 00:46:55,040 Speaker 1: I'm wondering, are we going to see an unexpected upside? 846 00:46:55,080 --> 00:46:57,320 Speaker 1: I mean, honestly, that's sort of the the sort of 847 00:46:57,480 --> 00:46:59,520 Speaker 1: flip side of all of the pesmas and that we've 848 00:46:59,560 --> 00:47:02,319 Speaker 1: seen over past decade has been that people have been 849 00:47:02,360 --> 00:47:05,160 Speaker 1: caught off guards by the positive and I'm wondering the 850 00:47:05,200 --> 00:47:07,880 Speaker 1: banking sector having been so beaten up at least when 851 00:47:07,920 --> 00:47:10,279 Speaker 1: it comes to the stock price. Uh, could there be 852 00:47:10,600 --> 00:47:14,120 Speaker 1: a perhaps surprise on the upside if the economy continues 853 00:47:14,160 --> 00:47:17,680 Speaker 1: to stabilize or is the fundamental business model or were 854 00:47:17,680 --> 00:47:20,840 Speaker 1: they basically saying the fundamental business model is so challenged 855 00:47:21,040 --> 00:47:24,560 Speaker 1: by negative interest rates, by the overhang of debt that 856 00:47:24,680 --> 00:47:27,960 Speaker 1: hasn't been gotten rid of or whatever from from another era, 857 00:47:28,440 --> 00:47:30,960 Speaker 1: that it's going to be hard regardless. Listen, the one 858 00:47:31,000 --> 00:47:35,279 Speaker 1: thing that surprising, uh, just in general, remember Trump is here. 859 00:47:35,640 --> 00:47:38,479 Speaker 1: That's changed the entire tone of Davos. People are falling 860 00:47:38,520 --> 00:47:40,600 Speaker 1: around Trump. Will Barross is just sitting in the main 861 00:47:40,719 --> 00:47:44,200 Speaker 1: lobby and everybody is and remember banks CEOs, we're all 862 00:47:44,280 --> 00:47:47,279 Speaker 1: with Trump. Just this morning, apparently at the dinner last 863 00:47:47,360 --> 00:47:50,800 Speaker 1: night with Trump, everybody was really just going around the 864 00:47:50,840 --> 00:47:53,400 Speaker 1: table talking about how they use the tax cuts, that 865 00:47:53,480 --> 00:47:56,560 Speaker 1: they're creating jobs. And today I heard somebody tell me 866 00:47:56,600 --> 00:47:58,880 Speaker 1: they're like, you know what if Europe starts to do 867 00:47:58,960 --> 00:48:01,520 Speaker 1: a fiscal stimula us to the likes of the US, 868 00:48:01,600 --> 00:48:03,600 Speaker 1: and we could be in much better place. And so 869 00:48:03,880 --> 00:48:06,160 Speaker 1: you're asking the upside, It's like, yeah, we have to 870 00:48:06,200 --> 00:48:08,440 Speaker 1: look for bad things here because all of these guys 871 00:48:08,560 --> 00:48:11,680 Speaker 1: think things are pretty rosy. There's not a whole we 872 00:48:11,920 --> 00:48:13,839 Speaker 1: we really have to dig when we talk to these 873 00:48:13,880 --> 00:48:17,920 Speaker 1: folks about what the And again, there are really significant 874 00:48:18,000 --> 00:48:21,680 Speaker 1: risks out there, but generally the tone here is good 875 00:48:22,000 --> 00:48:25,320 Speaker 1: and people don't believe that there are huge risks. And 876 00:48:25,440 --> 00:48:29,279 Speaker 1: I think that Trump frankly has been received very with 877 00:48:29,360 --> 00:48:32,719 Speaker 1: a very friendly audience here in Davos. Uh, it'snal either. 878 00:48:32,800 --> 00:48:35,000 Speaker 1: I've seen reports from Bloomberg News that there are about 879 00:48:35,000 --> 00:48:38,680 Speaker 1: a hundred and seventeen billionaires in Davos this week. So 880 00:48:38,840 --> 00:48:42,480 Speaker 1: it's a good time nineteen okay, hundred nineteen. So it's 881 00:48:42,480 --> 00:48:44,920 Speaker 1: a good time to be a private banker. And we're 882 00:48:44,920 --> 00:48:48,560 Speaker 1: seeing across the global financial services business businesses focus on 883 00:48:49,200 --> 00:48:51,680 Speaker 1: private wealth management. Is that a trend that when you 884 00:48:51,840 --> 00:48:54,400 Speaker 1: listen to these bank CEOs that we're speaking to Bloomberg 885 00:48:54,760 --> 00:48:56,320 Speaker 1: Radio and TV this morning. Is that a trend that 886 00:48:56,520 --> 00:48:59,560 Speaker 1: is likely to continue? Oh? Absolutely? Uh. And it's funny 887 00:48:59,600 --> 00:49:01,640 Speaker 1: because a lot of the billionaires and Davos are not 888 00:49:01,760 --> 00:49:05,720 Speaker 1: even coming to the World Economic Forum, and bankers at QBS, Credit, Speace, 889 00:49:05,800 --> 00:49:09,760 Speaker 1: Colman Sex. They're all here because you can have dinners 890 00:49:09,800 --> 00:49:12,240 Speaker 1: at night or just around town. It's beautiful. It's forty 891 00:49:12,280 --> 00:49:16,919 Speaker 1: degrees here right now, South fahre Kneit and so yes, 892 00:49:17,040 --> 00:49:19,560 Speaker 1: private banking is still a very big business because right 893 00:49:19,600 --> 00:49:23,680 Speaker 1: now the world's billionaires are also owners of major assets 894 00:49:23,760 --> 00:49:27,120 Speaker 1: and major companies. And so if you're looking at investment banking, 895 00:49:27,400 --> 00:49:29,640 Speaker 1: if you buddy up with a billionaire, you're able to 896 00:49:29,800 --> 00:49:31,920 Speaker 1: advise them on how they sell their company, how they 897 00:49:31,960 --> 00:49:34,680 Speaker 1: take out a loan against it, are their margin loans involved, 898 00:49:35,120 --> 00:49:39,560 Speaker 1: how do they structure their their their assets, what's tax efficient. 899 00:49:39,560 --> 00:49:43,759 Speaker 1: There's just so many ways to use this clientele with 900 00:49:43,880 --> 00:49:45,800 Speaker 1: some advice. Just buddy up with a billionaire and you 901 00:49:45,800 --> 00:49:49,040 Speaker 1: should be fine. Thank you, Snell bas over In Davos 902 00:49:49,320 --> 00:49:51,600 Speaker 1: for Bloomberg Television and Bloomberg Radio. Thank you so much 903 00:49:51,640 --> 00:49:54,280 Speaker 1: for being with us. Thanks for listening to the Bloomberg 904 00:49:54,360 --> 00:49:59,279 Speaker 1: Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, 905 00:49:59,640 --> 00:50:04,239 Speaker 1: sound Cloud, or whichever podcast platform you prefer. I'm on 906 00:50:04,320 --> 00:50:07,880 Speaker 1: Twitter at Tom Keene Before the podcast, you can always 907 00:50:07,960 --> 00:50:10,720 Speaker 1: catch us worldwide. I'm Bloomberg Radio