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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Ley.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg with

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Speaker 1: us here in New York and Police to say Savena Subramanium.

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Speaker 1: Bank of America, Merrill Lynch, head of US Equity Strategy,

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Speaker 1: Good morning to Savita, Good morning. What are you talent

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Speaker 1: clients at the moment about December? That line in the

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Speaker 1: sand when terrorists could go on? What is it? A

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Speaker 1: hundred and sixty billion dollars a Chinese impulse? What's the

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Speaker 1: message at the moment? And it's mostly consumer goods, which

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Speaker 1: is which is different from what we've seen in the past.

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Speaker 1: You know, I think the messages that if we get

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Speaker 1: some sort of a skinny deal, I think we could

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Speaker 1: see a really strong wrong rally in the more cyclical

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Speaker 1: areas of the market, because my sense is that the

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Speaker 1: market is actually pricing in a fairly dire scenario on trade.

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Speaker 1: I mean, if you look at what's expensive within the

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Speaker 1: SMP five hundred, it's utilities, it's consumer staples. These are

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Speaker 1: you know, the recession stocks of the SMP five hundred.

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Speaker 1: It's not machinery and and you know retailers. Those are

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Speaker 1: the stocks that are really cheap. So my sense is

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Speaker 1: that the market is actually pricing in not a great

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Speaker 1: outcome from from the tariff scenario. Now now here, I

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Speaker 1: think is where it gets interesting. I don't see the

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Speaker 1: trade war ending, even if we get some kind of

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Speaker 1: skinny deal. I think what it turns into is more

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Speaker 1: of a tech war. UM. So I think we're shifting

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Speaker 1: from this trade war tariffs on you know, soybeans, to

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Speaker 1: and to an environment where I think the real war

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Speaker 1: is around technology, UM, intellectual property, national security, and I

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Speaker 1: think that could could continue for a lot longer. You

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Speaker 1: actively talent claunch the need to position that fundio I

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Speaker 1: was the equity allocation with regards to those kind of

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Speaker 1: consents that you have. Absolutely, I mean, I think the

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Speaker 1: way to think about this is the tech which hasn't

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Speaker 1: been a market leader for you know, ten years running

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Speaker 1: now UM is one of the areas that could actually

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Speaker 1: take it on the chin in the near term. I mean,

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Speaker 1: not only do you have tariffs, not only do you

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Speaker 1: have the idea of you know, tech companies having to

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Speaker 1: dislocate their supply chain, but you also have bipartisan support

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Speaker 1: to regulate tech companies. So you know, what I worry

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Speaker 1: about within tech is the same thing that we saw

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Speaker 1: in financials back in two thousand five. So there's should

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Speaker 1: I sell my Amazon and Apple? That's all I want

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Speaker 1: to know. So I think if you're worried about the

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Speaker 1: next year or two, I don't see Amazon and Apple

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Speaker 1: or you know, just fang stocks in general. Are big

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Speaker 1: cap tech companies as retaining their leadership. I think there's

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Speaker 1: even when their regular growth if you look at the

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Speaker 1: nominal g D be called Ethan Harris has and and

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Speaker 1: your team, you're telling me to get out of revenue

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Speaker 1: growth stocks with that are double digit inn sure, and

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Speaker 1: go over to something with a much less revenue growth

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Speaker 1: stream scheme. Now here's the thing I think that the

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Speaker 1: I mean you you, we all kind of know this.

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Speaker 1: But the second derivative story for tech is less positive

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Speaker 1: than it has been fast. That's calculus talk on our

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Speaker 1: Wednesday folks. Just but but I think the second derivative

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Speaker 1: story for you know, potent to some of the more

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Speaker 1: cyclical areas of the market could actually recover nicely if

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Speaker 1: we see any sort of a you know, resolution on

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Speaker 1: trade in the near term. So so, I guess when

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Speaker 1: I look at it, I think, Okay, here's your tech

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Speaker 1: companies that have crushed it for ten years, but now

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Speaker 1: they're super crowded, they're arguably a little bit more expensive

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Speaker 1: than than they happened in the past, and we're seeing

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Speaker 1: a lot of different catalysts that could unseat that. I

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Speaker 1: love what you're saying, and I love your smart, smart

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Speaker 1: research deck about how we're gonna have this big shift

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Speaker 1: to international big shift a small and big cap. What

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Speaker 1: will be the pri some catalyst to make that occur?

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Speaker 1: Is it as simple as FED policy or do we

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Speaker 1: have to get more equity in nature or yield nature?

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Speaker 1: In our analysis, I don't know if it's has to

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Speaker 1: do with the FED. I mean, so, I think the

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Speaker 1: biggest driver for rotations in style are the contours of

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Speaker 1: the profit cycle. That's what we found in our quant work.

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Speaker 1: And you know, I think what's important here is we've

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Speaker 1: gone from an environment of very very slow decelerating growth

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Speaker 1: to what looks like a reasonable acceleration in growth in

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Speaker 1: two thousand twenty. And here's why I say that. So

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Speaker 1: if you look at two thousand nineteen, this year, it's

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Speaker 1: been flat earnings growth. We've had a flat year on

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Speaker 1: on SMP earnings. Next year, without a lot of great

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Speaker 1: economic delivery, we're likely to see a better year and

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Speaker 1: amidst that pickup. This has historically been the biggest driver

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Speaker 1: for value cycles, over growth cycles, for small, over large,

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Speaker 1: for rest of world over us is just the idea

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Speaker 1: that we get some kind of a pickup in profit cycle.

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Speaker 1: Let's get your rival White survey to financials, consumer discretionary industrials,

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Speaker 1: utilities that you rove a weights into. Those are overweighting

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Speaker 1: sight into the conversations you're having at the moment. Where's

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Speaker 1: the pushback coming from you? So the pushback is, why

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Speaker 1: the heck are you overweight utilities because it's really expensive

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Speaker 1: and it looks like a bond um. I guess utilities

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Speaker 1: is our hedge against you know, things not going well

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Speaker 1: over the next twelve months and utilities. What I like

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Speaker 1: about it is that it's got a dividend yield that's

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Speaker 1: a you know, a couple of percentage points higher than

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Speaker 1: bond yields and um and it's basically, you know, it

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Speaker 1: gives you what you think you're getting, regulated earnings growth

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Speaker 1: relatively smooth. The real pushback that we get is on financials,

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Speaker 1: because financials, everybody thinks we need the yield curve to

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Speaker 1: steep in in order for financials to work, And here

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Speaker 1: I totally disagree. I don't think you need the yield

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Speaker 1: curve to steep in. I think financials is going to

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Speaker 1: start to be acknowledged as a high quality dividend yield sector,

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Speaker 1: which is something that we haven't really seen it as

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Speaker 1: in a very long time. It was the less ever

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Speaker 1: toxic sector back in two thousand seven, and I think

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Speaker 1: that's how investors are painting it today. But the truth

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Speaker 1: is the leverage ray show has been. You know, it's

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Speaker 1: a shadow of its former self. These companies are arguably

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Speaker 1: over capitalized, and their shareholder yield, if you add up

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Speaker 1: share buy backs and dividend yield, shareholder yield for financials

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Speaker 1: is the highest of all eleven sectors. You and I've

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Speaker 1: talked about this many times. For this to work, you

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Speaker 1: need a perception shift. You need investors to sit there

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Speaker 1: and agree with you, not think that everything is just

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Speaker 1: about a ten year yield of a shape and yield curve.

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Speaker 1: You've seen evidence of that this year because actually some

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Speaker 1: of these big names are more straighted, performed really rather

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Speaker 1: well through. Is that already starting to happen. I think

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Speaker 1: you're starting to get that acknowledgement that these are different

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Speaker 1: companies than what what we saw in two thousand and eight.

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Speaker 1: And then you know also just the idea that they've

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Speaker 1: been so shunned for so many years that their underweight

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Speaker 1: positions are now arguably risky. If the stocks start to

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Speaker 1: move at all, I think that investors are going to

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Speaker 1: be forced to start adding exposure. I mean, financials is

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Speaker 1: a sect where the average institutional manager is two standard

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Speaker 1: deviations below his or her relative exposure to the sector.

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Speaker 1: So that means that they basically hate financials right now.

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Speaker 1: You're gonna have to leave it there, Thank you, Superman.

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Speaker 1: Really optimistic view in really stating that the shift will occur.

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Speaker 1: That's been a huge debate. John on the show. Let's

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Speaker 1: get to Lensley Vinja Murray, who joins US now Sheffield

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Speaker 1: United as two points had Leslie vin Ja Murray knew

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Speaker 1: that Chatham House head of US and America's program. Don't worry, Leslie,

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Speaker 1: We're not going to continue that conversation. We are awaiting.

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Speaker 1: We are awaiting a bilateral between Chancellor Angela Merkel and

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Speaker 1: a President of the United States, Donald Trump, taking place

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Speaker 1: just outside of London, England. We're going to bring that

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Speaker 1: to our listeners in just a moment when it begins.

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Speaker 1: But let's see, what are you looking for outside of

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Speaker 1: the body language in the spectacle, what are you listening

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Speaker 1: for when these two start talking. Well, I mean, I

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Speaker 1: think you know the big thing right now is are

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Speaker 1: we going to see a unity and cohesion? And of course,

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Speaker 1: you know, the relationship between angel and Donald Trump has

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Speaker 1: not been the easiest one. Of course, it's now being

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Speaker 1: sort of overtaken, at least optically by the relationship between

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Speaker 1: Trump and Macron. I think there's more to say about that,

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Speaker 1: but I think we will still be looking to say,

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Speaker 1: you know, are they on the same page? Will they

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Speaker 1: speak to internal issues in the alliance, the question of Turkey.

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Speaker 1: I think that's probably less likely, But I really do

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Speaker 1: think that this is this going to be, you know,

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Speaker 1: can they waive the flag as it were of NATO

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Speaker 1: and forward that come in front lessa you're such a

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Speaker 1: student of this, the US and then folding in the

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Speaker 1: European Prison. I look at it as a fossil of SPD.

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Speaker 1: The liberals being Billy, Bryant and Conrad added an hour's

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Speaker 1: in the mix. And of course Helmet Cole had changed

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Speaker 1: German politics. Does the President perceive Ms Miracle as a

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Speaker 1: conservative or is he have a greater affinity to those

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Speaker 1: in Germany even more servative? You know, I don't, to

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Speaker 1: be very honest, I don't think Donald Trump is is

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Speaker 1: thinking in quite this way. I think he hasn't a

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Speaker 1: view of Germany in general that's driven by his antagonismic

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Speaker 1: front right absolutely, and you know, in terms of sort

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Speaker 1: of drilling down and thinking where does she stand? Because

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Speaker 1: just not motivating this president because Johnny does it with

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Speaker 1: the Prime Minister Johnson, but he just can't translate that

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Speaker 1: over to some of these other nations were looking at Jeermany.

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Speaker 1: I thought it was fascinating yesterday here in the President

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Speaker 1: called out Germany by name Leslie, referring to the lack

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Speaker 1: or the failure of getting the military spending up to

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Speaker 1: two percent of GDP in the country and basically threatening

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Speaker 1: to use trade as a tool to push the Germans

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Speaker 1: to spend more on military. Leslie this is something new

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Speaker 1: that I don't think many people have been thinking about

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Speaker 1: at all in the last couple of years, as the

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Speaker 1: President has made this book push. How are you thinking

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Speaker 1: about that in the last twenty four hours. Yeah, I mean,

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Speaker 1: and remember it's not just the last twenty four hours.

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Speaker 1: Donald Trump has has linked sanctions to national security concerns

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Speaker 1: for a little while right now, and I think for

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Speaker 1: many of us this is very distressing because, of course,

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Speaker 1: especially when it comes to America's relationship with its most

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Speaker 1: important allies, the idea that you would link questions of

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Speaker 1: trade um to national security concerns is is contrary to

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Speaker 1: you know, what we've what we've witnessed over the last

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Speaker 1: seven decades. So it's it is a very significant shift.

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Speaker 1: It's one that's getting traction. He's taking it to the

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Speaker 1: next level. UM. But I don't think that it really plays.

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Speaker 1: It doesn't play. You know, this is not the U. S.

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Speaker 1: China relationship. I don't think it plays actually back home

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Speaker 1: in the same way. But and it and it alienates,

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Speaker 1: but it is um it's another thing driving a wedge

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Speaker 1: through America, and it's European partners. We welcome all of

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Speaker 1: you coast to coast and worldwide. A good conversation with Leslie,

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Speaker 1: Vinja Murray of Chatham House and expertise across the Atlantic

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Speaker 1: from London on the United States, Chan Fero and Tom

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Speaker 1: Keene futures of fifteen down futures. We await the symbolism,

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Speaker 1: a huge symbolism of the leader of Germany in the

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Speaker 1: United States of America at the Seventh Needle Meetings channel.

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Speaker 1: Let's least to continue this conversation, shall we. I think

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Speaker 1: the President quite rightly identifies a problem. He's identified a

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Speaker 1: problem with China that many people agree with him on.

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Speaker 1: They need to open up. They have been stealing i P.

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Speaker 1: There has been forced technology transfer. The disagreement has been

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Speaker 1: about the approach and as you say, is alienated allies.

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Speaker 1: We see the same thing with NATO. They've all pledged

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Speaker 1: to get military spending up to two percentage GDP, and

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Speaker 1: let's be quite honest, some people, even the Germans, haven't

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Speaker 1: done enough to get themselves there. But once again, the

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Speaker 1: President identifies a problem. Then he's criticized for his approach.

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Speaker 1: But letslie, I think many people are asking the following question. Okay,

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Speaker 1: criticize his approach, but what did previous administrations do, and

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Speaker 1: why should we continue at that very same approach if

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Speaker 1: we are just going to end up with the same results.

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Speaker 1: What do you say back to that, Leslie, Well, first

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Speaker 1: of all, you know, let's let's break that down. M

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Speaker 1: on the on the question of European contributions to defense

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Speaker 1: spending hitting that two percent target. This is something that

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Speaker 1: preceded Donald Trump. Um the increase in European spending. What proceeded,

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Speaker 1: you know, began really in fourteen. It's it's continued and

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Speaker 1: taken on more steam, and it's certainly gotten a lot

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Speaker 1: more visibility because of the rhetorical line taken by the president,

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Speaker 1: very aggressive rhetorical line. But that you know that push

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Speaker 1: dates pre dates the president on China absolutely. You know,

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Speaker 1: people have been wanting to level the playing field with

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Speaker 1: China for some time and Donald Trump has certainly been

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Speaker 1: the person that has taken us He's driven it forward,

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Speaker 1: and I think it's game changing regardless of what we

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Speaker 1: see who we see in the White House post does

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Speaker 1: the president change international American rather foreign relations? Is it

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Speaker 1: so seismic, this different approach by the gentleman from Manhattan

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Speaker 1: that it's a permanent change to how America addresses its

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Speaker 1: foreign policy. You know, this is the question that everybody

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Speaker 1: wants to an answer to. We've been certainly discussing it,

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Speaker 1: frankly all morning at Chatham House. Um uh, and it's

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Speaker 1: it's it's clearly the case that he's taken some things

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Speaker 1: that I think we're a long term, long time coming

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Speaker 1: America's relationship with China, reorienting it, taking a harder line

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Speaker 1: on trade, um and and driven them forward. And I

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Speaker 1: do think that the style and the attention that he's

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Speaker 1: given to those changes, you know, they predate the president,

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Speaker 1: but he's made them front and center. Will we see

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Speaker 1: the continued style of diplomacy that we've seen it under

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Speaker 1: this president? I don't think so. I think it's very

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Speaker 1: hard to imagine any anybody other than this President m

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Speaker 1: pursuing kind of diplomacy that he's pursued with America's allies.

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Speaker 1: But will America ask for more on the global stage, Yes,

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Speaker 1: I think it will. Of its allies as well as

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Speaker 1: of its adversaries going to continue to be put in

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Speaker 1: that second, that second bracket. Dr Vinjabinry absolutely nails us

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Speaker 1: about this idea of substance versus style, and so much

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Speaker 1: of the reporting, John ignores the substance that could be

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Speaker 1: permanent of this absolutely unique president and whether things are

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Speaker 1: going to change, Leslie, I think is an important point.

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Speaker 1: I just look at the situation and wonder what the

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Speaker 1: electorate actually wants, what the demands of the electorate will be.

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Speaker 1: Do they want to go back to the old way

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Speaker 1: of doing things, which is getting countries together in Europe,

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Speaker 1: playing nicely and saying to China please open up? Or

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Speaker 1: do they want this more confrontational approach from their leader

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Speaker 1: here in America. Is that what they want on the

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Speaker 1: international stage. What's your perception of what the electorate wants

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Speaker 1: to see, Leslie, I don't think that people are behind

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Speaker 1: I think, you know, there's there's a peeling off of

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Speaker 1: support for this style of trade wars because it's so

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Speaker 1: far not delivered any results. Um. It's you know, it's

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Speaker 1: a destabilized it's it's raised protectionism has gotten worse, the

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Speaker 1: numbers aren't getting better. Um. And so I think that

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Speaker 1: people are aware that now this is an issue, but

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Speaker 1: is it really changing the playing fields, really leveling the

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Speaker 1: playing field as Donald Trump taking on the bigger issues.

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Speaker 1: I think Americans are pretty aware that, you know, it's

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Speaker 1: the right issue, but it's the wrong approach. We thank you.

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Speaker 1: They're looking for a more strategic approach. We thank you

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Speaker 1: for listening. Dr Vinja Murray with us here from Chadow Mouse.

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Speaker 1: Jay John is a supporter of the President United States.

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Speaker 1: We're thrilled. I think he's I think he's taking advantage

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Speaker 1: of municipal bonds. Jay emails in and says the President

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Speaker 1: is more like Churchill and the US Founders. He considers

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Speaker 1: the European leaders smug and self righteous. I mean, leslie.

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Speaker 1: That is a perception of Republicans and Democrats in America.

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Speaker 1: Do did you buy the idea European leaders have a

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Speaker 1: smugness about America? Yeah? First of all, is it a

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Speaker 1: perception of Republicans? And I think that's a broad you know,

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Speaker 1: too far, too broad. ABRESHI data that's coming out of

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Speaker 1: serious places like the Chicago Council, like Pe. The vast

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Speaker 1: majority of Americans want to be a native, They want

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Speaker 1: to cooperate with Europe, they want to be internationally engaged.

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Speaker 1: There are certain things that they don't want to do

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Speaker 1: any more troop deployments. They'd like to see scaled back. Um.

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Speaker 1: But I you know, to sort of the Republican Party.

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Speaker 1: I don't think is in any way anti European um,

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Speaker 1: and the question of smugness is really again it's I'm

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Speaker 1: not so sure how helpful it is. I think there's

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Speaker 1: always been a admiration of European leaders. But in regardless

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Speaker 1: what Americans thing of the president, nobody likes to see,

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Speaker 1: you know, the president being talked about out um negatively

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Speaker 1: because it sort of reflects badly on the entire country.

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Speaker 1: So it's incredibly complicated. I want to explore this relationship

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Speaker 1: with China in the United States just a little bit further.

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Speaker 1: There are some people that might argue time is up.

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Speaker 1: The labor arbor trage has taken place, the plants have

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Speaker 1: been built on the mainland. Western multinationals will do anything

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Speaker 1: to keep a foothold in the country now, despite the

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Speaker 1: fact that seems to be serious allegations of human rights

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Speaker 1: violations in the mainland at the moment, with the exception

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Speaker 1: of big tech and perhaps finance as well, I think

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Speaker 1: at the moment, gaining entry to this market is perhaps

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Speaker 1: not the issue it once was. It's keeping access, and

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Speaker 1: I think keeping access may well be the issue in

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Speaker 1: the next few decades. China is not going to become

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Speaker 1: more like the United States. And a question I've been

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Speaker 1: thinking about, Leslie, is how does a multinational company succeed

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Speaker 1: navigating what the Economist and the last weekend called two

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Speaker 1: spheres of influence, the American sphere of influence and the

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Speaker 1: Chinese sphere of influence. And I think about it in

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Speaker 1: the following terms, how does a multinational company please a

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Speaker 1: progressive consumer in the way than a country like America

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Speaker 1: and a repressive state abroad in a country like China.

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Speaker 1: How does that kind of company succeed on the global

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Speaker 1: state in a coming ten years? How do they do that? Leslie?

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Speaker 1: I think it is difficult, because, of course, consumers in

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Speaker 1: the West are becoming much more tuned to issues of

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Speaker 1: labor standards, of environmental regulations, of you know, a number

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Speaker 1: of what we might consider progressive policies are really becoming

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Speaker 1: things that people individual certainly in the States in Europe,

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Speaker 1: are taking very very seriously, and they want to know

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Speaker 1: when they're buying from a multinational when they're engaging that

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Speaker 1: that China is hitting the same standard that they would

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Speaker 1: expect of an American company back home. So it's it's complicated,

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Speaker 1: but I think that the harder choices, you know, for

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Speaker 1: for multinationals are are balancing governments and not really not

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Speaker 1: necessarily balancing consumers. On the human rights question, very tricky. Right,

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Speaker 1: Clearly there's now more pressure coming out of Congress on

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Speaker 1: the human rights question. Uh know, human rights is something

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Speaker 1: that America had takes very seriously, American to take seriously,

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Speaker 1: but but selectively. It's always been selective. Um. And if

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Speaker 1: you look even at the most recent legislation, there are

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Speaker 1: exceptions written in saying that you know that the president

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Speaker 1: can and the weaker bill could could waive sanctions, um,

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Speaker 1: if he determined that this would be in the national

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Speaker 1: interest to do so. So. Even the legislation, which is

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Speaker 1: potentially very powerful if it if it becomes a part

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Speaker 1: of law, has exceptions written and that and that's pretty

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Speaker 1: much the story of America's human rights to point. Well, Leslie,

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Speaker 1: I don't mean to put you on the spot, but

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Speaker 1: I think this is an important question. If China wasn't

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Speaker 1: the world's second largest economy, if it didn't have the

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Speaker 1: consumer base that so many of these companies want access to,

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Speaker 1: if we had these kind of allegations of human rights

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Speaker 1: abuses in any other country would we be looking at

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Speaker 1: doing a trade deal with them. Um, it's it's clearly

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Speaker 1: a very difficult issue. And again China is not the

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Speaker 1: only country in which human rights are a very serious issue,

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Speaker 1: which is in no um way, shape or form to

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Speaker 1: diminish them. Think about North Korea right, Think about the

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Speaker 1: Commission of Inquiry that was released UH investigating the human

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Speaker 1: rights abuses in North Korea, and that at the moment

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Speaker 1: it's pretty much been set aside in order to try

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Speaker 1: and engage, you know, selectively again with talks on the

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Speaker 1: non proliferation issues. So America when engages abroad, has a

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Speaker 1: set of priorities and it tries to balance them, and

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Speaker 1: of course human rights is a through line, but it

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Speaker 1: has been selectively applied in China is not the only

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Speaker 1: country in which, you know, there's a sort of oscillation

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Speaker 1: based on a range of a range of interests. Lessie Benjaminy,

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Speaker 1: thank you so much. With Chad A mouse would greatly

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Speaker 1: appreciate it. This morning. Jane Farley jointing US now founding

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Speaker 1: in from London, the capital of global foreign exchange. Rabbit

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Speaker 1: bankhead of ex Strategy, Jane why sterling up here ahead

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Speaker 1: of some serious event risk next week. Well, I think

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Speaker 1: the market thinks that perhaps the event risk is is

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Speaker 1: relatively muted. Now. We've got to remember, of course, that

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Speaker 1: although there is still over a week, just over a

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Speaker 1: week to go until the election, there's been lots of

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Speaker 1: reports and in the UK suggesting that Boris Johnson's advisors

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Speaker 1: have really been tried to keep a lid on what

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Speaker 1: he can say. Now, if you go back to the

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Speaker 1: twenty seventeen election, at that point, certainly at the beginning

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Speaker 1: of that election campaign, PM May, the previous Tory Prime minister,

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Speaker 1: had at least a ten point lead, and then that

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Speaker 1: lead narrowed and of course, if you remember, we ended

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Speaker 1: up and she didn't manage to have a majority at

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Speaker 1: that election. So it seems that or list these are

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Speaker 1: the reports which have been circulated, it seems that Johnson's

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Speaker 1: advisors are taking note from that and are telling him

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Speaker 1: only to give one word short sort of popular responses,

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Speaker 1: and also to say very little. Now. The market seems

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Speaker 1: to be inferring that if that policy remains, then he

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Speaker 1: can hold on to this lead in the polls, meaning

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Speaker 1: that if he gets into power next week, he will

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Speaker 1: have sufficient votes to push his withdrawal agreement through Parliament. Now,

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Speaker 1: for now, the markets associating that withdrawal agreement to mean

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Speaker 1: that there will not be in no deal brexit. But

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Speaker 1: of course next year the trade talks have to start

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Speaker 1: and that might bring back the threat of a nodal

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Speaker 1: Brexit if they don't go well. So, Jane, let's talk

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Speaker 1: about the polls and how the polls translate into seats.

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Speaker 1: I think this is a big challenge for a lot

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Speaker 1: of people. The polls have been pretty consistent over the

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Speaker 1: last couple of weeks, maybe even the last couple of months.

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Speaker 1: The Conservatives in the low forties, the Labor Party in

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Speaker 1: the low thirties. How does that number translate into seats one, Well,

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Speaker 1: it's quite complicated. And the reason for that, as you know,

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Speaker 1: of course, is because in the UK it's it's the

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Speaker 1: first past the post system, meaning that really the election

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Speaker 1: has really been fought over just a finite number of

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Speaker 1: seats that could go either way. Now, from from that

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Speaker 1: point of view, it's difficult to extrapolate the percentage that

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Speaker 1: we see in many of the polls back to what

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Speaker 1: it means for seats. But last week there was a

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Speaker 1: pole that did extrapolate that and suggest that it meant

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Speaker 1: a very comfortable at working majority for for P M. Johnson.

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Speaker 1: That Since then, some other poles have suggested that maybe

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Speaker 1: that leads is not what it will be in reality

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Speaker 1: for Johnson, perhaps because the Labor Party manifesto had plenty

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Speaker 1: of popular content and perhaps that should give up additional

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Speaker 1: support for the Labor Party. But generally speaking, some pulses

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Speaker 1: are suggesting that as a rule of fum, as long

430
00:23:44,280 --> 00:23:47,680
Speaker 1: as the Tories are around about nine points percentage points

431
00:23:47,720 --> 00:23:50,040
Speaker 1: ahead of Labor in both the poles that were seen,

432
00:23:50,280 --> 00:23:52,920
Speaker 1: that will mean that he could have a majority. Jane Fold,

433
00:23:52,960 --> 00:23:55,560
Speaker 1: you talk about event risk. Me putting up the Christmas

434
00:23:55,600 --> 00:23:57,800
Speaker 1: tree is event risk. It's that ugly. I got to

435
00:23:57,840 --> 00:24:00,760
Speaker 1: pay for the thing. What's the trade right now? Is

436
00:24:00,800 --> 00:24:05,560
Speaker 1: there an opportunistic pair you can recommend into the end

437
00:24:05,640 --> 00:24:09,360
Speaker 1: of the year to play through January in February, Well,

438
00:24:09,440 --> 00:24:11,920
Speaker 1: I think it probably has to be sterling, and we

439
00:24:12,119 --> 00:24:15,439
Speaker 1: we a lot of good news in terms of Brexit

440
00:24:15,600 --> 00:24:17,960
Speaker 1: is already in the price of sterling. But I think

441
00:24:18,000 --> 00:24:20,480
Speaker 1: if if Johnson wins, I think would probably go higher

442
00:24:20,560 --> 00:24:24,119
Speaker 1: maybe two one thirty two. So very much obviously depends

443
00:24:24,160 --> 00:24:27,240
Speaker 1: on the election. Aside from that, um, you know, I'm

444
00:24:27,280 --> 00:24:29,399
Speaker 1: still quite bearish on currency sly alsin. You saw that

445
00:24:29,480 --> 00:24:33,159
Speaker 1: move again this week in the some better news and

446
00:24:33,200 --> 00:24:34,560
Speaker 1: what to missit him from the r b A and

447
00:24:34,600 --> 00:24:38,119
Speaker 1: then some worst news overnight in the form of their GDP.

448
00:24:38,480 --> 00:24:40,359
Speaker 1: I think that's going to be a very interesting story

449
00:24:40,440 --> 00:24:42,720
Speaker 1: next year, more cuts potentially from the r b A

450
00:24:43,000 --> 00:24:45,440
Speaker 1: and maybe contributing, So that's going to be very interesting

451
00:24:45,520 --> 00:24:47,399
Speaker 1: story into the new year. And then of course the

452
00:24:47,440 --> 00:24:50,920
Speaker 1: Swedish Krona and write heike potentially at this month's bump

453
00:24:50,960 --> 00:24:54,240
Speaker 1: from the ricks back just kinda go further up on

454
00:24:54,280 --> 00:24:56,440
Speaker 1: the back of that. So that's a very interesting story

455
00:24:56,520 --> 00:24:59,520
Speaker 1: as well. Do you play croner versus the euro or

456
00:24:59,640 --> 00:25:02,119
Speaker 1: versus the dollar or versus something else, I don't know.

457
00:25:03,119 --> 00:25:05,120
Speaker 1: I think it's generally versus the chrona, and that's because,

458
00:25:05,119 --> 00:25:07,560
Speaker 1: of course the trade links between Sweden and the Europe

459
00:25:07,600 --> 00:25:10,560
Speaker 1: are so strong, so and that's more meaningful really for

460
00:25:11,040 --> 00:25:17,080
Speaker 1: the Swedish economy abandon abandoning negative interest rates. We're starting

461
00:25:17,119 --> 00:25:19,120
Speaker 1: to see it, aren't we, Jane and I just wonder

462
00:25:19,160 --> 00:25:20,800
Speaker 1: whether we're going to see a whole lot more on

463
00:25:20,880 --> 00:25:23,560
Speaker 1: a bigger stage let's say the ECB, what is the

464
00:25:23,600 --> 00:25:26,359
Speaker 1: attitude on the continent at the moment towards negative interest

465
00:25:26,480 --> 00:25:27,960
Speaker 1: rates and a place like the Ricks Bank, at a

466
00:25:28,000 --> 00:25:30,440
Speaker 1: place like the u c B, well, the Rick Bank.

467
00:25:30,480 --> 00:25:32,879
Speaker 1: I think it's a really interesting example because you could say,

468
00:25:32,880 --> 00:25:35,000
Speaker 1: we'll look hold on a minute. Why why would they

469
00:25:35,040 --> 00:25:37,359
Speaker 1: possibly hike interest rates when you've got the biggest trading

470
00:25:37,440 --> 00:25:39,840
Speaker 1: partner in having cut interest rates to see the Arizona

471
00:25:39,920 --> 00:25:44,520
Speaker 1: course where we have growth arguably slipping in Sweden? Why

472
00:25:44,600 --> 00:25:46,520
Speaker 1: would they hike interest rates now? And one of their

473
00:25:46,560 --> 00:25:48,960
Speaker 1: big concerns, and they're quite candid about it, is that

474
00:25:49,080 --> 00:25:53,199
Speaker 1: they are concerned about the level of household debt now

475
00:25:53,600 --> 00:25:57,080
Speaker 1: asset pross inflation like in in In many countries, since

476
00:25:57,119 --> 00:25:59,600
Speaker 1: the global for natural crissis has been strong, house prices

477
00:25:59,800 --> 00:26:02,280
Speaker 1: have gone up quite a lot. And as as individuals

478
00:26:02,359 --> 00:26:05,600
Speaker 1: have to chase house prices better to get on that property,

479
00:26:05,720 --> 00:26:08,840
Speaker 1: or chase pause prices higher to get on that property ladder,

480
00:26:09,119 --> 00:26:12,520
Speaker 1: they've ended up with a large amount of disposable debt

481
00:26:12,640 --> 00:26:15,320
Speaker 1: as a percentage of disposable income. And that's the case

482
00:26:15,400 --> 00:26:19,879
Speaker 1: in many codes of failure at New Zealand, UM, various

483
00:26:19,920 --> 00:26:22,840
Speaker 1: countries around the globe. Canada another one. So that is

484
00:26:22,880 --> 00:26:25,560
Speaker 1: a big concern. And it seems that bit the pushback

485
00:26:25,960 --> 00:26:30,000
Speaker 1: against negative eels really is spreading. We see more conversation

486
00:26:30,520 --> 00:26:35,119
Speaker 1: UM in Japan, UM in the Eurozone, UM. And and

487
00:26:35,800 --> 00:26:38,960
Speaker 1: this is part of what what's informing the RBA's decision

488
00:26:39,200 --> 00:26:41,920
Speaker 1: and probably one of the reasons why the RBA have said, look,

489
00:26:42,040 --> 00:26:45,040
Speaker 1: we're not going to cut to interestrates to five, well,

490
00:26:45,080 --> 00:26:48,080
Speaker 1: do content divising instead. Very good, Jane Folly, where this

491
00:26:48,240 --> 00:26:51,680
Speaker 1: informing us with good conversation less Vinja Murray before this

492
00:26:51,840 --> 00:26:54,639
Speaker 1: special edition of Bloomberg Surveillance, as John Farrell and I

493
00:26:54,760 --> 00:26:58,880
Speaker 1: in New York awaited an important discussion of the Chancellor

494
00:26:58,920 --> 00:27:01,960
Speaker 1: of Germany the President of the United States, John, I

495
00:27:02,040 --> 00:27:05,040
Speaker 1: believe the President will of other bilaterals, and I believe

496
00:27:05,240 --> 00:27:08,520
Speaker 1: even with them being so far behind their schedule, he

497
00:27:08,720 --> 00:27:13,640
Speaker 1: has a separate press conference at this point scheduled later

498
00:27:13,800 --> 00:27:16,560
Speaker 1: in the New York afternoon. The day is already running

499
00:27:16,560 --> 00:27:18,680
Speaker 1: a little bit, like what do you think we're behind.

500
00:27:18,720 --> 00:27:20,879
Speaker 1: I think we're behind like a solid half hour on

501
00:27:21,000 --> 00:27:25,840
Speaker 1: the schedule. We welcome all of you. Jane Foley still

502
00:27:25,880 --> 00:27:28,600
Speaker 1: with us with Robbo Bank giving us wonderful perspective on

503
00:27:28,680 --> 00:27:31,320
Speaker 1: the litmus paper of the system. We thank her for

504
00:27:31,480 --> 00:27:34,760
Speaker 1: appearance here. UH Today as well, John and I are

505
00:27:34,840 --> 00:27:38,320
Speaker 1: looking at a set of newsflow. We haven't talked much

506
00:27:38,320 --> 00:27:41,760
Speaker 1: about impeachment as well. John, I would point out that

507
00:27:41,920 --> 00:27:46,480
Speaker 1: this impeachment committee hearing today is original. We actually have

508
00:27:46,600 --> 00:27:50,439
Speaker 1: people that know what they're talking about. For law professors

509
00:27:50,800 --> 00:27:54,440
Speaker 1: Jonathan Turley UH in the Washington Examiner writing up with

510
00:27:54,520 --> 00:27:59,520
Speaker 1: a really piercing essay about the narrowness of this impeachment

511
00:27:59,600 --> 00:28:04,000
Speaker 1: proceeding historically not he's not pro Trump, but he certainly

512
00:28:04,119 --> 00:28:07,479
Speaker 1: tilts towards a more Republican bands. And Noah Feldman, who

513
00:28:07,520 --> 00:28:10,600
Speaker 1: writes for Bloomberg Opinion, has been a huge value to

514
00:28:10,680 --> 00:28:14,000
Speaker 1: me with his history of the Supreme Court. Dr Feldman

515
00:28:14,040 --> 00:28:16,320
Speaker 1: will be I haven't heard a decent argument yet as

516
00:28:16,400 --> 00:28:19,280
Speaker 1: to why this is not a lose lose situation for

517
00:28:19,359 --> 00:28:22,120
Speaker 1: the Democrats at the moment. How did they come out

518
00:28:22,480 --> 00:28:24,800
Speaker 1: looking good from all of this and looking good with

519
00:28:24,840 --> 00:28:26,919
Speaker 1: the electorate, Because in the court of public opinion, that's

520
00:28:26,960 --> 00:28:28,920
Speaker 1: what matters here, And of the last month or so,

521
00:28:29,200 --> 00:28:30,480
Speaker 1: it's not clear to me in the polls that that

522
00:28:30,600 --> 00:28:32,920
Speaker 1: bringing the Court of public opinion along with them. I

523
00:28:33,080 --> 00:28:35,560
Speaker 1: don't disagree with that, but I would suggest there are

524
00:28:35,680 --> 00:28:38,760
Speaker 1: different electorates out there, and from day one year and

525
00:28:38,800 --> 00:28:43,240
Speaker 1: Speaker Pelosi fighting the process the entire way. Speaker Pelosi,

526
00:28:43,720 --> 00:28:46,120
Speaker 1: it was finally caved in, if you will, and they're

527
00:28:46,120 --> 00:28:49,880
Speaker 1: speaking to a certain electorate riveted by this. And John,

528
00:28:49,920 --> 00:28:53,479
Speaker 1: to your point in Jim Glassman on Job's Day mentioned

529
00:28:53,520 --> 00:28:56,360
Speaker 1: this in his travels for JP Morgan. There's a huge

530
00:28:56,440 --> 00:28:58,840
Speaker 1: part of the country where it's like, Okay, what do

531
00:28:58,880 --> 00:29:01,000
Speaker 1: you have, John, Eddie, Peter Port coming out And about

532
00:29:01,200 --> 00:29:03,480
Speaker 1: five or I missed that, Please said that. Jane Fully

533
00:29:03,480 --> 00:29:05,360
Speaker 1: of Rubber Bank is still with us. So Jane, let's

534
00:29:05,360 --> 00:29:08,680
Speaker 1: talk about it. Labor market data coming up through the

535
00:29:08,800 --> 00:29:12,280
Speaker 1: week tomorrow, initial jobless claims, the payrolls report is coming

536
00:29:12,400 --> 00:29:14,720
Speaker 1: up on Friday. So Jane, what are your thoughts? What

537
00:29:14,720 --> 00:29:17,680
Speaker 1: are you looking for in the job's numbers in America? Well,

538
00:29:17,760 --> 00:29:19,480
Speaker 1: I think this is going to be fascinating one because

539
00:29:19,520 --> 00:29:21,440
Speaker 1: of course this week we haven't had a particularly good

540
00:29:21,520 --> 00:29:24,080
Speaker 1: data fund the manufacturing sector. And the question is, you know,

541
00:29:24,240 --> 00:29:26,520
Speaker 1: is this weakness in the manufacturing searcher is it pushing

542
00:29:26,560 --> 00:29:29,160
Speaker 1: into or will it push into the labor market. And

543
00:29:29,640 --> 00:29:31,480
Speaker 1: if that's the case, you know, I do think that

544
00:29:31,560 --> 00:29:34,240
Speaker 1: the market will begin to take a different view on

545
00:29:34,520 --> 00:29:37,760
Speaker 1: the Federal Reserve, begin to be worried about the pals

546
00:29:38,040 --> 00:29:40,760
Speaker 1: class half full outlook on the economy. So I think

547
00:29:41,080 --> 00:29:44,000
Speaker 1: the payrolls number, if it is weaker than expected, if

548
00:29:44,040 --> 00:29:47,400
Speaker 1: there are signs that there are softening there, um, you know,

549
00:29:47,480 --> 00:29:50,960
Speaker 1: I think that would be quite a nasty signal. Jane,

550
00:29:51,000 --> 00:29:52,280
Speaker 1: I look at the feeder, and I look at the

551
00:29:52,360 --> 00:29:55,280
Speaker 1: meeting to December, and then there's a January twenty nine meeting.

552
00:29:55,680 --> 00:29:58,360
Speaker 1: I mean, I think I'm guilty of this. The media

553
00:29:58,400 --> 00:30:01,920
Speaker 1: focuses on the next event, obviously, Are you focused on

554
00:30:02,040 --> 00:30:04,720
Speaker 1: December eleven? Is the be all end all? Or is

555
00:30:04,760 --> 00:30:07,160
Speaker 1: it much more into the meetings of two thousand twenty

556
00:30:08,200 --> 00:30:10,640
Speaker 1: I think it's really the meetings of two thousand and twenties.

557
00:30:10,680 --> 00:30:12,960
Speaker 1: But I think we all need to watch very carefully

558
00:30:13,200 --> 00:30:15,760
Speaker 1: at the rhetoric, watch the guidance, watch any watch out

559
00:30:15,800 --> 00:30:18,400
Speaker 1: for any shifts. And therefore it is going to be

560
00:30:18,400 --> 00:30:20,560
Speaker 1: and I think all about twenty But I don't think

561
00:30:20,600 --> 00:30:23,080
Speaker 1: that we can overlook any of the meetings that are

562
00:30:23,120 --> 00:30:25,400
Speaker 1: coming up. I think they could all provide quite interesting

563
00:30:25,440 --> 00:30:28,760
Speaker 1: clues potentially hugely valuable. Jane Foley, thank you so much

564
00:30:28,800 --> 00:30:32,000
Speaker 1: for joining us on the dusk rubble Bank in London,

565
00:30:35,120 --> 00:30:40,320
Speaker 1: Bloomberg Opinion informed perspectives and expert data driven commentary on

566
00:30:40,480 --> 00:30:44,080
Speaker 1: breaking news. Good morning everyone, time Keene in New York.

567
00:30:44,200 --> 00:30:47,520
Speaker 1: This is the interview of Day on the American military

568
00:30:47,640 --> 00:30:50,680
Speaker 1: and of course our extension across the Atlantic in the

569
00:30:50,840 --> 00:30:54,800
Speaker 1: history the seventieth anniversary of NATO. It is without question

570
00:30:55,000 --> 00:30:59,000
Speaker 1: a timely interview on the state of the Pentagon in Washington.

571
00:30:59,160 --> 00:31:01,800
Speaker 1: We do this with Jane strevidis what you need to

572
00:31:01,840 --> 00:31:05,920
Speaker 1: know within the heritage of Supreme Allied Commander. It started

573
00:31:06,000 --> 00:31:11,720
Speaker 1: in ninete with a gentleman named Eisenhower. The Esteem Ridgeway followed,

574
00:31:12,240 --> 00:31:15,560
Speaker 1: and then onto some wonderful names from the past, including

575
00:31:15,640 --> 00:31:19,040
Speaker 1: General Haig, General Galvin, and I really want to mention

576
00:31:19,200 --> 00:31:23,440
Speaker 1: John shalikash Filly as well. And they're all generals. And

577
00:31:23,520 --> 00:31:27,760
Speaker 1: then someone from the Sea shows up, the Admiral. Admiral strevidis,

578
00:31:27,920 --> 00:31:30,840
Speaker 1: what was it like to be the first Navy guy

579
00:31:31,160 --> 00:31:34,440
Speaker 1: in the room? What what was the body language? Is

580
00:31:34,640 --> 00:31:38,520
Speaker 1: a gentleman of the Navy walked in the NATO door. Yeah,

581
00:31:38,560 --> 00:31:42,680
Speaker 1: it was bad. I had a sense of fifteen generals

582
00:31:42,760 --> 00:31:47,400
Speaker 1: spinning in their grade. Uh. Really a shock to the system.

583
00:31:47,480 --> 00:31:50,680
Speaker 1: In fact, my memoir of those NATO days as Supreme

584
00:31:50,760 --> 00:31:53,640
Speaker 1: Commander is called the Accidental Admiral, and I think that's

585
00:31:53,680 --> 00:31:55,400
Speaker 1: what everyone thought. It was just some kind of a

586
00:31:55,840 --> 00:32:00,240
Speaker 1: huge computer error that delivered me to those shores. Well,

587
00:32:00,320 --> 00:32:02,240
Speaker 1: we are honored to have you with us today, and

588
00:32:02,400 --> 00:32:06,040
Speaker 1: certainly to distill what we've observed, I would go back,

589
00:32:06,200 --> 00:32:10,240
Speaker 1: Admiral to the suits and ties politicking as they do,

590
00:32:10,920 --> 00:32:14,040
Speaker 1: and we should say that Admiral Stevidus was vetted briefly

591
00:32:14,120 --> 00:32:16,840
Speaker 1: as a vice president or candidate along the last path.

592
00:32:17,480 --> 00:32:19,560
Speaker 1: But I would say, James to Vidas that there was

593
00:32:19,680 --> 00:32:26,600
Speaker 1: the gentle dodging of Russian missiles involved with Turkey, and

594
00:32:26,680 --> 00:32:30,160
Speaker 1: then the photo opportunity of Mr Radwan next to Mr Trump.

595
00:32:30,680 --> 00:32:34,360
Speaker 1: Explain how NATO and the serious business of the military

596
00:32:34,920 --> 00:32:40,160
Speaker 1: should adjust to Russian missiles in Turkey. Yeah. Let's let's

597
00:32:40,320 --> 00:32:44,080
Speaker 1: make a point first, which is NATO is a military alliance, Tom,

598
00:32:44,280 --> 00:32:48,720
Speaker 1: but your point, its center of gravity is decidedly political,

599
00:32:49,160 --> 00:32:51,960
Speaker 1: and what we're seeing our centrifugal forces pulling out the

600
00:32:52,000 --> 00:32:56,640
Speaker 1: Alliance today, Francis mccron calling it brain dead. Trump sending

601
00:32:56,680 --> 00:33:00,400
Speaker 1: out ambivalent signals about Article five and where we come

602
00:33:00,480 --> 00:33:04,680
Speaker 1: to Turkey Urdwan leaning out of the Alliance buying Russian

603
00:33:04,920 --> 00:33:09,480
Speaker 1: missile systems. We can't integrate those with NATO ear defenses.

604
00:33:09,760 --> 00:33:13,680
Speaker 1: And by the way, he's also conducting joint patrols on

605
00:33:13,840 --> 00:33:18,040
Speaker 1: the Syrian Turkish border with Russia in the Russian Armed Forces.

606
00:33:18,120 --> 00:33:21,040
Speaker 1: So this is a moment of real UH discord within

607
00:33:21,120 --> 00:33:24,520
Speaker 1: the Alliance. Does the Pentagon have the president's ear? I

608
00:33:24,560 --> 00:33:28,640
Speaker 1: mean he is established a tone which I have said

609
00:33:28,760 --> 00:33:32,880
Speaker 1: has Republican and Democrats support, which is is he said

610
00:33:33,040 --> 00:33:36,560
Speaker 1: shape up to Europe that resonates with a certain American public.

611
00:33:37,120 --> 00:33:42,040
Speaker 1: How does his tone resonate with his Pentagon Um, It's

612
00:33:42,080 --> 00:33:45,920
Speaker 1: a mixed picture. In one example was just last week

613
00:33:45,960 --> 00:33:49,240
Speaker 1: when he issued a series of pardons for UH some

614
00:33:49,400 --> 00:33:51,680
Speaker 1: of the Special Forces members who were accused of war

615
00:33:51,800 --> 00:33:55,560
Speaker 1: crose Um. That was a real point of disagreement on NATO.

616
00:33:56,240 --> 00:33:59,880
Speaker 1: The Pentagon is glad that the President presses the Ally

617
00:34:00,160 --> 00:34:03,280
Speaker 1: to spend more and is having some positive result there,

618
00:34:03,800 --> 00:34:08,200
Speaker 1: but the Pentagon is also concerned about his lack of enthusiasm,

619
00:34:08,280 --> 00:34:12,560
Speaker 1: shall we say for supporting Article five, because that undermines

620
00:34:12,680 --> 00:34:17,800
Speaker 1: the confidence of our partners across the Atlantic, the different

621
00:34:18,040 --> 00:34:20,360
Speaker 1: people that we have in NATO, and we have the

622
00:34:20,440 --> 00:34:24,040
Speaker 1: images of our youth for those younger of substantial American

623
00:34:24,120 --> 00:34:27,359
Speaker 1: presidents in Germany with the tension of a divided East

624
00:34:27,400 --> 00:34:31,040
Speaker 1: and West Germany and the complexities of Berlin and the

625
00:34:31,160 --> 00:34:34,680
Speaker 1: Iron Curtain. But if I look at the two hundred

626
00:34:34,680 --> 00:34:38,440
Speaker 1: and sixty six Financial Management Supports Center, part of the

627
00:34:38,520 --> 00:34:43,560
Speaker 1: twenty one Theater Sustainment Command, what do we actually do

628
00:34:43,719 --> 00:34:48,080
Speaker 1: in Europe today, Admiral Um. First and foremost, we have

629
00:34:48,960 --> 00:34:53,359
Speaker 1: training exercises where we integrate with our partners and Tom.

630
00:34:53,440 --> 00:34:57,720
Speaker 1: That's where we trained to go forward and fight in Afghanistan,

631
00:34:57,800 --> 00:35:00,600
Speaker 1: where NATO was fully engaged when I commanded that mission,

632
00:35:00,880 --> 00:35:04,640
Speaker 1: hundred and fifty thousand NATO troops in Afghanistan. So Europe

633
00:35:04,719 --> 00:35:09,000
Speaker 1: is where we train, equipped and organized those forces. Secondly,

634
00:35:09,200 --> 00:35:13,440
Speaker 1: logistics you just mentioned logistics, Um, the logistic ability to

635
00:35:13,520 --> 00:35:16,279
Speaker 1: move those troops forward to not only Afghanistan, but to

636
00:35:16,360 --> 00:35:21,319
Speaker 1: the Balkans, to the Libyan campaign, to maritime operations off

637
00:35:21,320 --> 00:35:24,000
Speaker 1: the coast of East Africa for piracy. All that is

638
00:35:24,120 --> 00:35:28,560
Speaker 1: centered in the NATO command structure, which is in Europe.

639
00:35:28,600 --> 00:35:32,040
Speaker 1: So I'd say we still need those bases all closed.

640
00:35:32,080 --> 00:35:34,399
Speaker 1: Tom By saying at the height of the Cold War

641
00:35:34,480 --> 00:35:37,040
Speaker 1: you mentioned General Galvin. At the height of the Cold War,

642
00:35:37,480 --> 00:35:42,320
Speaker 1: he had four hundred bases all around Europe. Um today

643
00:35:42,400 --> 00:35:47,200
Speaker 1: we're down to something like serious basis, so we've already

644
00:35:47,280 --> 00:35:51,120
Speaker 1: reduced that based structure. By I'd say it's about right

645
00:35:51,160 --> 00:35:54,879
Speaker 1: where it is. Do they want us there? So much

646
00:35:54,960 --> 00:35:58,719
Speaker 1: of the tone that I'm hearing in the endless interviews

647
00:35:58,760 --> 00:36:02,839
Speaker 1: of suits and ties and occasional dresses in London. Here

648
00:36:02,920 --> 00:36:06,480
Speaker 1: at at the Grove north of London, at Watford, we

649
00:36:06,600 --> 00:36:10,320
Speaker 1: avoid the question do they want us there? What is

650
00:36:10,400 --> 00:36:13,359
Speaker 1: your belief on that right now, Admiral I think they

651
00:36:13,600 --> 00:36:18,400
Speaker 1: very strongly want us their President Macrone's comments about NATO

652
00:36:18,480 --> 00:36:22,839
Speaker 1: being brain dead are really driven by a dwindling confidence

653
00:36:22,960 --> 00:36:25,759
Speaker 1: that the Europeans have in whether the US will come

654
00:36:25,880 --> 00:36:28,520
Speaker 1: forward or not. That's why it's so important for the

655
00:36:28,600 --> 00:36:31,920
Speaker 1: President to step up on this Article five, even as

656
00:36:32,000 --> 00:36:36,040
Speaker 1: he correctly continues to press with the Europeans to spend more. So.

657
00:36:36,880 --> 00:36:39,719
Speaker 1: At the end of the day, Europe again is a

658
00:36:39,840 --> 00:36:43,880
Speaker 1: political Alliance. Its center of gravity is confidence in Article

659
00:36:44,080 --> 00:36:47,719
Speaker 1: five UM. The Europeans want us there, but they're a

660
00:36:47,840 --> 00:36:50,600
Speaker 1: little less confident than they were saved five to ten

661
00:36:50,680 --> 00:36:52,560
Speaker 1: years ago. What did you work on that? What is

662
00:36:52,600 --> 00:36:55,120
Speaker 1: the task of General Walters now of the United States

663
00:36:55,200 --> 00:36:58,160
Speaker 1: Air Force, with his leadership for America at NATO. What

664
00:36:58,320 --> 00:37:00,440
Speaker 1: is his task given what the was it in the

665
00:37:00,520 --> 00:37:06,080
Speaker 1: seven less First of all, his principal operational task is

666
00:37:06,120 --> 00:37:11,000
Speaker 1: to continue the uh the operations in Afghanistan, where we

667
00:37:11,080 --> 00:37:15,040
Speaker 1: have twenty thousand NATO troops, much reduced but still a

668
00:37:15,200 --> 00:37:17,960
Speaker 1: very significant mission. Secondly, he'll want to keep his eye

669
00:37:18,000 --> 00:37:20,040
Speaker 1: on the Balkans. Thirdly, I want to keep his eye

670
00:37:20,080 --> 00:37:24,160
Speaker 1: on the Arctic. And fourthly, who want to deter Russia.

671
00:37:24,239 --> 00:37:26,560
Speaker 1: What he is trying to do at the political level,

672
00:37:26,680 --> 00:37:30,720
Speaker 1: working with the Secretary General of NATO, Yen Stoltenberg of Norway,

673
00:37:31,000 --> 00:37:35,080
Speaker 1: is to convince the Secretary General in those men and

674
00:37:35,160 --> 00:37:39,280
Speaker 1: women in suits and dresses, to convince the United States

675
00:37:39,400 --> 00:37:43,239
Speaker 1: to continue to move forward. He has both a diplomatic

676
00:37:43,440 --> 00:37:45,879
Speaker 1: and a military role to play. And by the way,

677
00:37:45,960 --> 00:37:48,680
Speaker 1: General Todd Walters was part of my team when I

678
00:37:48,800 --> 00:37:51,799
Speaker 1: was NATO commander. He's a superb officer and a great

679
00:37:51,880 --> 00:37:54,160
Speaker 1: choice for the job. A Stevides, Thank you so much.

680
00:37:54,160 --> 00:37:58,600
Speaker 1: Sioneer four years a Supreme Allied Commander Europe for the

681
00:37:58,760 --> 00:38:02,719
Speaker 1: United States Navy for uh, the United States of America.

682
00:38:02,840 --> 00:38:04,960
Speaker 1: James Travitas and I really can't say enough about his

683
00:38:05,040 --> 00:38:08,680
Speaker 1: new book, strong book, tens or so chapters on admirals.

684
00:38:08,760 --> 00:38:11,920
Speaker 1: I commend to you, folks the single chapter on the

685
00:38:12,040 --> 00:38:19,560
Speaker 1: Gentleman from Submarines at Murick over Paul. As you know,

686
00:38:19,719 --> 00:38:25,239
Speaker 1: there's any number of views, the yes year, next year, Yes,

687
00:38:25,920 --> 00:38:28,360
Speaker 1: US media forecast, all these kind of things you have

688
00:38:28,440 --> 00:38:31,080
Speaker 1: to read, And the answer is you actually read. Brian

689
00:38:31,160 --> 00:38:33,279
Speaker 1: Weezer a pivotal in this on the United Kingdom. But

690
00:38:33,400 --> 00:38:35,040
Speaker 1: but we're on the U S. Why don't you even

691
00:38:35,080 --> 00:38:38,759
Speaker 1: big in Brian on the nuances of a nice executive

692
00:38:38,840 --> 00:38:42,800
Speaker 1: summary of of of the path forward? Exactly? Brian Weezer,

693
00:38:42,880 --> 00:38:46,080
Speaker 1: he is a group and global president business intelligence. He

694
00:38:46,320 --> 00:38:50,120
Speaker 1: is the go to person when we're talking global advertising. Brian,

695
00:38:50,160 --> 00:38:52,160
Speaker 1: thanks so much for joining us on the phone. So

696
00:38:52,280 --> 00:38:55,640
Speaker 1: let's talk about first of all, a pretty good year

697
00:38:55,800 --> 00:38:59,920
Speaker 1: for advertising, right, Yeah, no, it's it's definitely a diverse

698
00:39:00,040 --> 00:39:04,919
Speaker 1: from yere. Uh you know, it's unusually strong as ten

699
00:39:05,120 --> 00:39:07,480
Speaker 1: was too, and you could be big question for while

700
00:39:07,640 --> 00:39:10,920
Speaker 1: was it so unusually strong? And the reality is that

701
00:39:11,600 --> 00:39:15,719
Speaker 1: there's so many digital based digital first digital athemic marketers,

702
00:39:15,880 --> 00:39:18,919
Speaker 1: the likes of Amazon, like Facebook as a marketer again

703
00:39:19,000 --> 00:39:23,160
Speaker 1: not as a seller of advertising. Dozens of companies are

704
00:39:23,200 --> 00:39:27,319
Speaker 1: probably driving almost all the growth, and it skewing growth

705
00:39:27,360 --> 00:39:29,440
Speaker 1: into digital and so it makes it look like we

706
00:39:29,520 --> 00:39:34,520
Speaker 1: have a really healthy advertising market, but it's not sustainable

707
00:39:34,560 --> 00:39:37,680
Speaker 1: at these levels. So, Brian, is this just a story

708
00:39:37,680 --> 00:39:40,279
Speaker 1: as we think about global advertising? You mentioned some of

709
00:39:40,320 --> 00:39:42,239
Speaker 1: the big digital players. Is this just a game of

710
00:39:42,320 --> 00:39:44,719
Speaker 1: the haves and have nots that you know, if you're

711
00:39:44,719 --> 00:39:47,080
Speaker 1: a Google on a Facebook, life is great. But if

712
00:39:47,120 --> 00:39:51,040
Speaker 1: you're a CBS or you know, a Comcast or Disney

713
00:39:51,160 --> 00:39:53,680
Speaker 1: and you've got broadcast in cable networks, it's not such

714
00:39:53,680 --> 00:39:56,120
Speaker 1: a good story. That's a good way to put it.

715
00:39:56,280 --> 00:40:01,880
Speaker 1: I it's not exactly h terribly for uh, you know,

716
00:40:02,080 --> 00:40:05,440
Speaker 1: TV centric media owners. It's just not necessarily going to

717
00:40:05,480 --> 00:40:08,520
Speaker 1: be much of a growth market uh anytime soon. And

718
00:40:08,600 --> 00:40:11,239
Speaker 1: I think if we look at print is really it's

719
00:40:11,239 --> 00:40:15,680
Speaker 1: all bad. Uh, you know, radio is kind of stable

720
00:40:16,000 --> 00:40:20,719
Speaker 1: outdoors are really helping me, um, which may surprise some. Um,

721
00:40:21,200 --> 00:40:25,200
Speaker 1: but yeah, I haven't had not the general Brian. One

722
00:40:25,239 --> 00:40:27,000
Speaker 1: of your great things that group em and of course

723
00:40:27,080 --> 00:40:29,880
Speaker 1: before that pivotal was the idea of traditional TV is

724
00:40:29,920 --> 00:40:32,040
Speaker 1: not dead. Everybody calling for the death of TV and

725
00:40:32,080 --> 00:40:34,640
Speaker 1: you're saying no, no, no, what I'm seeing And I

726
00:40:34,760 --> 00:40:38,879
Speaker 1: mentioned this earlier, folks, My anecdotal evidence is pretty much

727
00:40:38,920 --> 00:40:41,759
Speaker 1: everybody in a planet, in some way or another is

728
00:40:41,880 --> 00:40:49,920
Speaker 1: using YouTube. In your analysis, do you fit in YouTube revenue? Yeah? Absolutely, um. Now,

729
00:40:50,400 --> 00:40:53,520
Speaker 1: YouTube is still primarily something you would bucket into the

730
00:40:53,719 --> 00:40:57,560
Speaker 1: digital or line item because the vast majority of spending

731
00:40:57,719 --> 00:41:01,839
Speaker 1: is meant to be comparable to into related advertising. Um.

732
00:41:02,040 --> 00:41:05,279
Speaker 1: And it's a big piece of of spending absolutely well.

733
00:41:05,360 --> 00:41:08,440
Speaker 1: Compare it to the small slices. Is YouTube brand wiser?

734
00:41:08,520 --> 00:41:13,520
Speaker 1: Is YouTube bigger than newspapers? Not yet? Not yet um uh.

735
00:41:13,960 --> 00:41:17,520
Speaker 1: But that said, uh, it's not hard to imagine YouTube

736
00:41:17,520 --> 00:41:20,560
Speaker 1: being bigger than newspapers. That's deadline to think about some

737
00:41:20,680 --> 00:41:23,960
Speaker 1: point soon because at the end of the day, newspapers

738
00:41:24,040 --> 00:41:29,280
Speaker 1: continue to shrink by double digits. Even including newspapers digital revenues.

739
00:41:29,360 --> 00:41:34,360
Speaker 1: You know, we're estimating about twelve billion on newspapers today. Um,

740
00:41:34,440 --> 00:41:38,680
Speaker 1: I don't have a YouTube. Vious doesn't disclose its numbers,

741
00:41:38,800 --> 00:41:42,120
Speaker 1: but yeah, YouTube is probably not that far from newspapers.

742
00:41:42,480 --> 00:41:45,560
Speaker 1: So Brian, let's let's talk about the ad agencies here. Um.

743
00:41:46,080 --> 00:41:49,600
Speaker 1: You know, there's been a concern that maybe they're getting disintermediated,

744
00:41:49,719 --> 00:41:51,040
Speaker 1: that you don't really need to go to a big

745
00:41:51,080 --> 00:41:52,440
Speaker 1: ad agency. All you need to do is kind of

746
00:41:52,480 --> 00:41:54,960
Speaker 1: go to Google or Facebook and they'll put the dollars

747
00:41:55,040 --> 00:41:58,160
Speaker 1: worth you know, the people are what's your call or

748
00:41:58,200 --> 00:42:02,440
Speaker 1: what's your thought about how the big ad agencies at WPPS,

749
00:42:02,520 --> 00:42:06,319
Speaker 1: omni comms, how did they fit into the mix going forward? Yeah, well,

750
00:42:06,360 --> 00:42:10,839
Speaker 1: generally the largest marketers certainly benefit from having agencies. There's

751
00:42:10,920 --> 00:42:14,520
Speaker 1: reasons why many of them choose to do certain parts

752
00:42:14,560 --> 00:42:18,279
Speaker 1: of their marketing activities themselves, whether that's the creative or

753
00:42:18,320 --> 00:42:20,800
Speaker 1: the media slide um, you know, and they've got to

754
00:42:20,880 --> 00:42:24,359
Speaker 1: consider the there's pros and cons to doing so right. Yes,

755
00:42:24,440 --> 00:42:28,320
Speaker 1: you can probably faster in some ways, Um, if you

756
00:42:28,360 --> 00:42:32,080
Speaker 1: do everything yourself, but then maybe the choices aren't as

757
00:42:32,600 --> 00:42:36,080
Speaker 1: involving as broad or deep knowledge base as if you're

758
00:42:36,160 --> 00:42:39,360
Speaker 1: using an externality. It's the very same issue that I

759
00:42:39,400 --> 00:42:42,680
Speaker 1: think every industry has their professional services that have with

760
00:42:42,840 --> 00:42:46,400
Speaker 1: respect in sourcing versus outsourcing. UM. Just today though, you

761
00:42:46,480 --> 00:42:50,200
Speaker 1: know one of our competitors, uh just Story and ad

762
00:42:50,280 --> 00:42:53,960
Speaker 1: Week about Cody, which is the many um obviously packaged

763
00:42:54,000 --> 00:42:58,680
Speaker 1: goods company just sending their media back to an agency.

764
00:42:59,200 --> 00:43:02,440
Speaker 1: UM and just interesting. So that happens all the time too.

765
00:43:03,239 --> 00:43:06,120
Speaker 1: I mean, what's so interesting? Years we're all experiencing new

766
00:43:06,200 --> 00:43:09,719
Speaker 1: ways of delivering these messages to us and you know,

767
00:43:10,160 --> 00:43:12,680
Speaker 1: like Brian, let's just go through them now. Given sports meet,

768
00:43:13,040 --> 00:43:16,120
Speaker 1: they're now staying with the sports event on part of

769
00:43:16,239 --> 00:43:21,160
Speaker 1: the screen as they show the ad who's winning. When

770
00:43:21,239 --> 00:43:24,280
Speaker 1: they do that, does X on mobile sending a message

771
00:43:24,360 --> 00:43:29,000
Speaker 1: win or do they lose? You know? I think the

772
00:43:29,120 --> 00:43:32,560
Speaker 1: long term health of the business, uh, for any given

773
00:43:32,640 --> 00:43:36,560
Speaker 1: medium will definitely benefit from uh, you know, trying to

774
00:43:36,600 --> 00:43:39,880
Speaker 1: put a consumer experience first. I think that this has

775
00:43:39,920 --> 00:43:45,520
Speaker 1: been a problem in the United States. Commercial is a problem.

776
00:43:46,200 --> 00:43:49,680
Speaker 1: Unfortunately much large advertisers look on the term basis it

777
00:43:50,040 --> 00:43:54,520
Speaker 1: doesn't necessarily proved to be less effective. But I would

778
00:43:54,600 --> 00:43:58,720
Speaker 1: argue that if the consumer experience is really negative, generally

779
00:43:59,360 --> 00:44:02,960
Speaker 1: will make at a less desirable environment over time. Oh

780
00:44:03,080 --> 00:44:07,080
Speaker 1: you spentioned time. What's the appropriate time ad for Brian Weezer?

781
00:44:07,160 --> 00:44:12,120
Speaker 1: Three seconds? That's a good thing to try to be brief. No, no,

782
00:44:12,320 --> 00:44:15,000
Speaker 1: but but I'm at the ad links is three seconds?

783
00:44:15,080 --> 00:44:17,880
Speaker 1: Or can we get out to fifteen seconds? Is that

784
00:44:18,000 --> 00:44:22,080
Speaker 1: too long? Now? You know, it totally depends. I just

785
00:44:22,160 --> 00:44:24,919
Speaker 1: saw someone who's a tick talking off the Bloomberg former

786
00:44:24,960 --> 00:44:28,440
Speaker 1: TikTok TikTok, but so doing a TikTok thing where you

787
00:44:28,480 --> 00:44:31,520
Speaker 1: can imagine a three second ad uh fitting really well.

788
00:44:34,600 --> 00:44:37,600
Speaker 1: But in traditional TV, you know, the idea of two

789
00:44:37,600 --> 00:44:41,440
Speaker 1: minute ad break has generally worked. Um, So it really

790
00:44:41,520 --> 00:44:43,239
Speaker 1: just depends on the medium. In the context in which

791
00:44:43,320 --> 00:44:45,680
Speaker 1: the most of the well sports is still king. I

792
00:44:45,760 --> 00:44:48,279
Speaker 1: see that Fox sold all their ads maybe like five

793
00:44:48,320 --> 00:44:51,279
Speaker 1: point six million dollars in each or something like that.

794
00:44:51,560 --> 00:44:55,440
Speaker 1: So Brian sports is still there, right, Yeah, I think so.

795
00:44:56,080 --> 00:44:59,400
Speaker 1: There's been maybe over investment in some respects in sports

796
00:44:59,440 --> 00:45:02,200
Speaker 1: on the part of the of networks. Um, it is

797
00:45:02,320 --> 00:45:06,640
Speaker 1: still the environment that will capture more live viewing. UM,

798
00:45:07,440 --> 00:45:10,440
Speaker 1: it's still really important. It's you know, tennifcent of all

799
00:45:10,520 --> 00:45:15,560
Speaker 1: TV viewing is sports, and it probably has disproportionate value.

800
00:45:16,160 --> 00:45:17,800
Speaker 1: We've got to leave it there. Brand Wiser, thank you

801
00:45:17,920 --> 00:45:21,840
Speaker 1: so much. Thanks for listening to the Bloomberg Surveillance podcast.

802
00:45:22,239 --> 00:45:27,160
Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or

803
00:45:27,320 --> 00:45:31,600
Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom

804
00:45:31,760 --> 00:45:35,600
Speaker 1: Keane before the podcast. You can always catch us worldwide.

805
00:45:36,080 --> 00:45:37,160
Speaker 1: I'm Bloomberg Radio