1 00:00:05,800 --> 00:00:08,720 Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 2 00:00:08,760 --> 00:00:11,520 Speaker 1: Along with my co host Lisa Bramowitz. Each day we 3 00:00:11,640 --> 00:00:15,120 Speaker 1: bring you the most important, noteworthy, and useful interviews for 4 00:00:15,200 --> 00:00:17,840 Speaker 1: you and your money, whether you're at the grocery store 5 00:00:17,960 --> 00:00:20,720 Speaker 1: or the trading floor. Find the Bloomberg p m L 6 00:00:20,840 --> 00:00:32,800 Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. US 7 00:00:32,840 --> 00:00:35,680 Speaker 1: equities are heading deeper into the red, with the down 8 00:00:35,720 --> 00:00:39,600 Speaker 1: Jones Industrial Index down eight tenths of one percent after 9 00:00:39,640 --> 00:00:42,640 Speaker 1: President Trump said that he was calling off his summit 10 00:00:42,680 --> 00:00:46,280 Speaker 1: with North Korean leader Kim Jong un. Here to talk 11 00:00:46,320 --> 00:00:49,560 Speaker 1: about the implications of this is the Banker to the World. 12 00:00:49,680 --> 00:00:52,440 Speaker 1: He should know about what to expect from this, as 13 00:00:52,479 --> 00:00:55,240 Speaker 1: he has been in a lot of these types of negotiations. 14 00:00:55,680 --> 00:00:58,800 Speaker 1: Bill Rhodes. He is the President, chief executive officer of 15 00:00:58,800 --> 00:01:01,360 Speaker 1: William Rhodes Global Eiser is also the author of the 16 00:01:01,360 --> 00:01:04,479 Speaker 1: book Banker to the World Leadership Lessons from the front 17 00:01:04,560 --> 00:01:09,280 Speaker 1: Lines of Global Finance. Bill Uh, I gather you weren't 18 00:01:09,280 --> 00:01:12,840 Speaker 1: all that surprised that these have become some complicated discussions 19 00:01:12,840 --> 00:01:15,200 Speaker 1: between North Korea and UH the US, But what did 20 00:01:15,200 --> 00:01:17,200 Speaker 1: you make of today's announcement. First of all, it's great 21 00:01:17,240 --> 00:01:19,640 Speaker 1: to be with you guys. Again, I'm not surprised because 22 00:01:19,720 --> 00:01:22,319 Speaker 1: I know Korea quite well. I restructured their dead I 23 00:01:22,440 --> 00:01:25,840 Speaker 1: led to discussions on the chorus FDA, the Free trade 24 00:01:25,840 --> 00:01:30,920 Speaker 1: Agreement UH. And the North always, whether it be the 25 00:01:31,000 --> 00:01:33,920 Speaker 1: grandfather who started the dynasty, Kim Il Song or his 26 00:01:33,959 --> 00:01:37,000 Speaker 1: son Kim Jong il has passed to this one, they 27 00:01:37,000 --> 00:01:42,720 Speaker 1: always agree to do things on the nucle disarmament and 28 00:01:42,760 --> 00:01:44,560 Speaker 1: then they back off on it as soon as they 29 00:01:44,560 --> 00:01:47,160 Speaker 1: get the goodies from US. Uh, you know, in the 30 00:01:47,200 --> 00:01:52,480 Speaker 1: sense of food, grain, whatever. And so UH I was 31 00:01:52,560 --> 00:01:55,880 Speaker 1: highly skeptical from the beginning that he would be willing 32 00:01:55,920 --> 00:01:58,800 Speaker 1: to give up the one thing he's got, which is 33 00:01:59,160 --> 00:02:02,840 Speaker 1: you know, is nuclear weapon and missile capacity as a 34 00:02:02,840 --> 00:02:05,800 Speaker 1: as a chip uh and agree to do a Libya 35 00:02:05,880 --> 00:02:09,440 Speaker 1: type thing where you know, Cadafe gave up everything. The 36 00:02:09,520 --> 00:02:12,240 Speaker 1: question is where do we go from here? And UH, 37 00:02:12,360 --> 00:02:14,840 Speaker 1: we still have a big problem in Korea and what 38 00:02:14,880 --> 00:02:17,160 Speaker 1: are we gonna do about it? Uh? And so I 39 00:02:17,160 --> 00:02:19,160 Speaker 1: think what we have to do is lean on China 40 00:02:19,200 --> 00:02:21,760 Speaker 1: because remember on your show, I mentioned again and again 41 00:02:21,800 --> 00:02:25,040 Speaker 1: the linkage between China UH and Korea and I've done 42 00:02:25,040 --> 00:02:28,920 Speaker 1: our eds on it because of their energy comes in 43 00:02:29,000 --> 00:02:31,920 Speaker 1: from China. And so if we don't get the Chinese 44 00:02:31,960 --> 00:02:36,680 Speaker 1: willing to do the sanctions, there's there's no push to 45 00:02:36,760 --> 00:02:38,680 Speaker 1: go ahead with US. But the US has been pushing 46 00:02:38,720 --> 00:02:40,799 Speaker 1: them to do this, and North Korea, as so far 47 00:02:40,840 --> 00:02:43,359 Speaker 1: as I can tell, hasn't really gotten anything yet from 48 00:02:43,360 --> 00:02:46,440 Speaker 1: the US, and China seems to be working and playing 49 00:02:46,520 --> 00:02:51,520 Speaker 1: ball with the US on trade negotiations. What broke down here? Why? Now? 50 00:02:52,160 --> 00:02:55,160 Speaker 1: I think a couple of things. One you saw over 51 00:02:55,200 --> 00:02:59,560 Speaker 1: the last few weeks, Uh Kim Kim jong loons made 52 00:02:59,560 --> 00:03:03,200 Speaker 1: to trips to China. The Chinese or orchestrating this to 53 00:03:03,240 --> 00:03:06,440 Speaker 1: a great degree, and the Chinese are using this as 54 00:03:06,480 --> 00:03:09,080 Speaker 1: a pawn, the chip in the negotiations on trade with 55 00:03:09,120 --> 00:03:11,840 Speaker 1: the US. UH. And I think we've been a little 56 00:03:11,919 --> 00:03:14,840 Speaker 1: naive in the administration thinking that we could get the 57 00:03:14,880 --> 00:03:18,840 Speaker 1: boast the best out of both worlds because we're asking 58 00:03:18,880 --> 00:03:23,720 Speaker 1: the Chinese to reverse their policy, longstanding policy of taking 59 00:03:23,760 --> 00:03:27,240 Speaker 1: advantage when the be intellectual property on trade. UH. And 60 00:03:27,280 --> 00:03:29,799 Speaker 1: then expect, uh, you know, as we begin to push 61 00:03:29,880 --> 00:03:33,120 Speaker 1: him as we should push them, then expect that uh, 62 00:03:33,639 --> 00:03:36,839 Speaker 1: we're gonna get Chi Jin pain to push Kim Jong 63 00:03:36,960 --> 00:03:39,680 Speaker 1: un to do a deal with us, So you really 64 00:03:39,720 --> 00:03:43,040 Speaker 1: can't break that link between the two. And I think 65 00:03:43,360 --> 00:03:45,680 Speaker 1: that if that was a view of the administration, and 66 00:03:45,760 --> 00:03:48,680 Speaker 1: some people think it was, it was naive. UH. The 67 00:03:48,760 --> 00:03:50,880 Speaker 1: other thing is, I think when we deal with the Chinese, 68 00:03:51,320 --> 00:03:54,000 Speaker 1: we need a common front. And all the stories you're 69 00:03:54,040 --> 00:03:58,839 Speaker 1: picking up in Washington. You've got the minutein UH and 70 00:03:58,920 --> 00:04:02,280 Speaker 1: the Larry Cudlow and discussions on one side wanting to, 71 00:04:02,480 --> 00:04:06,480 Speaker 1: you know, be more favorable to China. And then you 72 00:04:06,480 --> 00:04:10,600 Speaker 1: you've got Leightheiser, who is the trade represent representative, tough 73 00:04:10,640 --> 00:04:13,840 Speaker 1: guy on trade UH and Peter Navarro who always had 74 00:04:13,840 --> 00:04:16,919 Speaker 1: a problem with China on the other side, with Wilbur Ross, 75 00:04:17,080 --> 00:04:20,720 Speaker 1: Commerce Secretary in the middle, and UH. What we've got 76 00:04:20,720 --> 00:04:23,520 Speaker 1: to understand is that getting Kim Jong un to the 77 00:04:23,560 --> 00:04:26,720 Speaker 1: table UH is important, but you've got to have some 78 00:04:26,800 --> 00:04:29,719 Speaker 1: preconditions there on the basis of what is his view 79 00:04:29,760 --> 00:04:32,800 Speaker 1: of denuclearization And from what I can pick up, his 80 00:04:32,880 --> 00:04:35,480 Speaker 1: view is step by step, which is what the Chinese 81 00:04:35,480 --> 00:04:38,200 Speaker 1: have been advocating for years with the Six Party talks, 82 00:04:38,600 --> 00:04:40,760 Speaker 1: and we thought we would go in there. John Bolton 83 00:04:40,839 --> 00:04:43,080 Speaker 1: was saying we're going to get a Kadafi type deal 84 00:04:43,200 --> 00:04:47,279 Speaker 1: where he just gives it up UH for uh, you know, 85 00:04:47,360 --> 00:04:50,080 Speaker 1: removal of sanctions. So I think we've got ourselves a 86 00:04:50,080 --> 00:04:54,279 Speaker 1: difficult situation here, and with the trade with China is 87 00:04:54,360 --> 00:04:57,760 Speaker 1: key noting to the Chinese economy, but to our economy 88 00:04:57,760 --> 00:05:01,040 Speaker 1: and the world economy. So I hope the administration can 89 00:05:01,080 --> 00:05:04,480 Speaker 1: get its act together on how they're gonna work on 90 00:05:04,560 --> 00:05:08,000 Speaker 1: both sides here, because there is that linkage between China 91 00:05:08,080 --> 00:05:10,839 Speaker 1: and North Korea and you can't doubt it. The other 92 00:05:10,920 --> 00:05:13,640 Speaker 1: problem we have is you have a very nice person 93 00:05:13,680 --> 00:05:17,240 Speaker 1: who's president of South Korea, but his one goal in 94 00:05:17,320 --> 00:05:19,240 Speaker 1: life because I know him going back to when his 95 00:05:19,400 --> 00:05:22,080 Speaker 1: chief of staff of a former president, President Noe, that 96 00:05:22,200 --> 00:05:26,440 Speaker 1: his one goal in life is reconciliation with North Korea 97 00:05:26,720 --> 00:05:31,440 Speaker 1: and UH, so he'll virtually do anything to get that reconciliation. 98 00:05:32,000 --> 00:05:35,200 Speaker 1: So it's a very very difficult point where we're at. 99 00:05:35,640 --> 00:05:37,880 Speaker 1: And since we're talking about trade, I should mention that 100 00:05:37,960 --> 00:05:40,080 Speaker 1: one of the things that I think we need to 101 00:05:40,080 --> 00:05:43,840 Speaker 1: really move on. I was with President uh Prime Minister 102 00:05:43,880 --> 00:05:46,320 Speaker 1: Trudeau last week. I sat with him in the diets 103 00:05:46,360 --> 00:05:49,520 Speaker 1: of the New York Economic Club and He was making 104 00:05:49,520 --> 00:05:52,880 Speaker 1: the point that you know they'll be flexible in Canada, 105 00:05:53,520 --> 00:05:55,680 Speaker 1: but also they got to be realistic. He says, they'll 106 00:05:55,720 --> 00:05:59,120 Speaker 1: be patient, but uh, we need a deal on after. 107 00:05:59,240 --> 00:06:01,360 Speaker 1: And one of the things it troubles me is at 108 00:06:01,360 --> 00:06:05,200 Speaker 1: the elections in Mexico or coming up July one, and 109 00:06:05,279 --> 00:06:09,280 Speaker 1: you have a candidate there who basically says, if this 110 00:06:09,320 --> 00:06:11,400 Speaker 1: isn't done by the time he takes office in December, 111 00:06:11,440 --> 00:06:14,919 Speaker 1: he's gonna want tougher conditions. The topics are a trade 112 00:06:15,040 --> 00:06:19,400 Speaker 1: political instability not only in Asia but also closer to 113 00:06:19,480 --> 00:06:25,640 Speaker 1: home between Mexico, Canada, the United States, ongoing renegotiations of NAFTA, 114 00:06:25,800 --> 00:06:29,560 Speaker 1: as well as deterioration in the Turkish Lera. Here to 115 00:06:29,600 --> 00:06:32,400 Speaker 1: help us understand more about this is Bill Rhodes. He 116 00:06:32,520 --> 00:06:35,520 Speaker 1: is Banker to the World. His book is called Banker 117 00:06:35,560 --> 00:06:38,520 Speaker 1: to the World Leadership Lessons from the front Lines of 118 00:06:38,600 --> 00:06:42,680 Speaker 1: Global Finance. And Bill, I would just offer that your 119 00:06:42,720 --> 00:06:47,080 Speaker 1: book not only is about what you have done in 120 00:06:47,120 --> 00:06:51,240 Speaker 1: the world of finance, but whom you have met, the 121 00:06:51,360 --> 00:06:55,120 Speaker 1: people that you have met and interacted with, And I 122 00:06:55,160 --> 00:06:59,160 Speaker 1: think that that's a key element to bring out because 123 00:07:00,440 --> 00:07:02,880 Speaker 1: most action is done by people it's not something that 124 00:07:02,920 --> 00:07:04,920 Speaker 1: falls from the sky. And I'm wondering if you could 125 00:07:04,920 --> 00:07:09,000 Speaker 1: just describe for us what you believe is the sort 126 00:07:09,040 --> 00:07:12,800 Speaker 1: of issue when it relates to the Mexican economy and 127 00:07:13,000 --> 00:07:18,000 Speaker 1: the upcoming Mexican presidential elections and the people involved. Well, 128 00:07:18,000 --> 00:07:20,680 Speaker 1: this is a big election year for Latin America. We 129 00:07:20,760 --> 00:07:24,360 Speaker 1: all we already had this the blackle down in Venezuela, 130 00:07:24,480 --> 00:07:28,240 Speaker 1: where you know, a dishonest election where less than half 131 00:07:28,240 --> 00:07:31,320 Speaker 1: the people even showed up to vote. We have Mexico, 132 00:07:31,360 --> 00:07:35,520 Speaker 1: as you mentioned, we also have Columbia, and we have Brazil. UH. 133 00:07:35,560 --> 00:07:39,360 Speaker 1: This is the biggest election year in recent history in 134 00:07:39,440 --> 00:07:41,880 Speaker 1: Latin America. So what happens here is key as far 135 00:07:41,920 --> 00:07:48,200 Speaker 1: as Mexico goes. Lopezo Brador, who's to the far left UH, 136 00:07:48,320 --> 00:07:51,760 Speaker 1: is running ahead in the polls. UM. Now some of 137 00:07:51,800 --> 00:07:54,120 Speaker 1: the candidates have have dropped out, and we'll have to 138 00:07:54,160 --> 00:07:57,360 Speaker 1: see what finally happens. But the election is is basically 139 00:07:57,360 --> 00:08:00,440 Speaker 1: almost a month away. It's it's July first, and he's 140 00:08:00,480 --> 00:08:05,320 Speaker 1: made statements that on two areas, one that UH that 141 00:08:05,440 --> 00:08:08,640 Speaker 1: he's going to look at the the oil contracts have 142 00:08:08,720 --> 00:08:10,800 Speaker 1: been given out by the pinion Yet of government which 143 00:08:10,840 --> 00:08:13,600 Speaker 1: has helped the Mexican economy grow, to see if they 144 00:08:13,640 --> 00:08:17,120 Speaker 1: were done fairly or in a corrupt way, which is 145 00:08:17,360 --> 00:08:21,040 Speaker 1: you know, concerned people. And then the other thing is, uh, 146 00:08:21,280 --> 00:08:23,280 Speaker 1: since we don't seem to be able to reach an 147 00:08:23,280 --> 00:08:28,160 Speaker 1: agreement with Pinioneto and Trudeau in Canada, Uh, what will 148 00:08:28,200 --> 00:08:31,080 Speaker 1: happen with NAFTA and after's key to all three countries 149 00:08:31,160 --> 00:08:34,640 Speaker 1: and not only economically but security was and so it's 150 00:08:34,640 --> 00:08:41,000 Speaker 1: a very concerning situation. Uh. And uh, the Mexicans are concerned. Uh, 151 00:08:41,080 --> 00:08:43,800 Speaker 1: we should be concerned here and I know the Canadians 152 00:08:44,200 --> 00:08:48,160 Speaker 1: just having sat with with Prime Minister Trudeau uh on 153 00:08:48,320 --> 00:08:51,160 Speaker 1: the diets when he spoke last week. And by the way, 154 00:08:51,200 --> 00:08:54,280 Speaker 1: I think I was very much impressed because he says 155 00:08:54,280 --> 00:08:57,120 Speaker 1: he'll be patient, uh to get this thing done because 156 00:08:57,120 --> 00:09:01,560 Speaker 1: it's so important, but it's got to get done. So 157 00:09:02,040 --> 00:09:04,400 Speaker 1: you know we're talking about Maxo. I want to I 158 00:09:04,400 --> 00:09:07,720 Speaker 1: want to just shift in general to emerging markets. You 159 00:09:07,760 --> 00:09:12,360 Speaker 1: mentioned Venezuela also clearly there in a crisis of humanitarian, political, 160 00:09:12,440 --> 00:09:17,040 Speaker 1: and economic proportions. The Turkish lira, meanwhile, is continuing to 161 00:09:17,120 --> 00:09:20,640 Speaker 1: fall out of bed, down about four percent today, even 162 00:09:20,720 --> 00:09:25,720 Speaker 1: after the emergency rate hike yesterday by the Turkish Central Bank. UM. 163 00:09:25,760 --> 00:09:30,839 Speaker 1: Given your experience with restructuring debt and helping Brazil during 164 00:09:31,120 --> 00:09:34,360 Speaker 1: the the e M crisis in the late nineteen nineties 165 00:09:34,600 --> 00:09:37,679 Speaker 1: and as vice chair of senior vice chair of City Group, 166 00:09:38,000 --> 00:09:41,040 Speaker 1: you know how significant is this? Are we heading toward 167 00:09:41,080 --> 00:09:44,600 Speaker 1: another emerging markets crisis of that magnitude? I think it's 168 00:09:44,640 --> 00:09:48,319 Speaker 1: a very good Uh, it's a very good question. I 169 00:09:48,360 --> 00:09:51,120 Speaker 1: was with Paul Krugman a week ago in Argentina at 170 00:09:51,160 --> 00:09:53,640 Speaker 1: a conference and he and I were talking about it, 171 00:09:53,640 --> 00:09:55,880 Speaker 1: and I noticed he's come out with tweets since Yes, 172 00:09:55,960 --> 00:09:58,679 Speaker 1: he has said that it is. It's actually resonate. Resonates 173 00:09:59,080 --> 00:10:01,880 Speaker 1: because he and I I on the private sector side, 174 00:10:01,920 --> 00:10:03,880 Speaker 1: he in academia, were the two who called the Asian 175 00:10:03,880 --> 00:10:08,360 Speaker 1: financial crisis UH, and mine came out in the Financial 176 00:10:08,360 --> 00:10:12,240 Speaker 1: Times article. His came out with a paper or study. 177 00:10:12,960 --> 00:10:16,319 Speaker 1: I would say there are similarities, but there are big differences. 178 00:10:16,640 --> 00:10:20,000 Speaker 1: I think the similarities are as you get some of 179 00:10:20,000 --> 00:10:23,320 Speaker 1: this UH liquidity what's been slashing around now to get 180 00:10:23,400 --> 00:10:25,560 Speaker 1: us out of the Great recession. I've said this on 181 00:10:25,640 --> 00:10:29,920 Speaker 1: your program before and Bloomberg Television. We're gonna see rates 182 00:10:29,960 --> 00:10:31,719 Speaker 1: go up in the United States, which we are, the 183 00:10:31,800 --> 00:10:34,599 Speaker 1: quantitative easing is being ratchant back and some of this 184 00:10:34,720 --> 00:10:36,720 Speaker 1: search and reach for yield is is going to come 185 00:10:36,720 --> 00:10:39,480 Speaker 1: back and hit us. And one of the groups that 186 00:10:40,000 --> 00:10:42,320 Speaker 1: took advantage of this a number of countries in the 187 00:10:42,360 --> 00:10:47,120 Speaker 1: emerging markets borrowed heavily in foreign currency, sometimes short term 188 00:10:47,160 --> 00:10:49,920 Speaker 1: as in the case of Turkey, in the case of Argentina, 189 00:10:50,040 --> 00:10:55,400 Speaker 1: longer term and UH. Those countries who have fiscal deficits 190 00:10:55,920 --> 00:10:59,120 Speaker 1: UH and aren't prepared to face this I think could 191 00:10:59,120 --> 00:11:02,960 Speaker 1: be in trouble, particularly if we see the FED continuing 192 00:11:03,040 --> 00:11:06,160 Speaker 1: to raise interest rates, which I think they will UH, 193 00:11:06,200 --> 00:11:09,640 Speaker 1: and the quantitative eas in going out. Just having come 194 00:11:09,640 --> 00:11:14,200 Speaker 1: back from Argentina, President Macari was very much the darling 195 00:11:14,200 --> 00:11:17,959 Speaker 1: of the markets. But he has a program called Gradualismo, 196 00:11:18,600 --> 00:11:21,800 Speaker 1: which is gradual reform. And the problem is when you 197 00:11:21,800 --> 00:11:24,520 Speaker 1: get into difficult situations, you can't be gradually about it. 198 00:11:24,600 --> 00:11:27,200 Speaker 1: You've got to be more upfront. And I think he 199 00:11:27,240 --> 00:11:29,480 Speaker 1: did the proper thing, although it was tough for him 200 00:11:29,520 --> 00:11:31,040 Speaker 1: to do, to call in the I m F to 201 00:11:31,080 --> 00:11:33,719 Speaker 1: get some support so he can implement the rest of 202 00:11:33,760 --> 00:11:38,240 Speaker 1: the reforms. So Argentina was the one over the last 203 00:11:38,240 --> 00:11:40,880 Speaker 1: few weeks where interest rates went up to they raised 204 00:11:40,880 --> 00:11:43,720 Speaker 1: them three times. UH. The I m F and we 205 00:11:43,760 --> 00:11:46,880 Speaker 1: came one week, which caught the imagination. But Turkey, and 206 00:11:46,960 --> 00:11:50,120 Speaker 1: something I said twice on Bloomberg Television over the last 207 00:11:50,160 --> 00:11:53,320 Speaker 1: three months, Turkey has been hanging out there because their 208 00:11:53,360 --> 00:11:56,840 Speaker 1: heavy borrow is a private sector short term and they 209 00:11:56,880 --> 00:11:59,280 Speaker 1: haven't moved interest rates up fast enough, and so you 210 00:11:59,320 --> 00:12:03,760 Speaker 1: have tremendous pressure on the Turkish lira. UH. And Urvan 211 00:12:03,920 --> 00:12:06,400 Speaker 1: keeps telling the central bank not to raise interest rates 212 00:12:06,440 --> 00:12:09,280 Speaker 1: because his view of the of the of of of 213 00:12:09,800 --> 00:12:13,320 Speaker 1: economics is that central bank should have low interest rates 214 00:12:13,320 --> 00:12:16,800 Speaker 1: and then you won't have any inflation. Well, unfortunately, I 215 00:12:16,840 --> 00:12:19,840 Speaker 1: don't think Devon ever took a course in economics. But 216 00:12:19,880 --> 00:12:22,800 Speaker 1: that's another situation. And so I think that what you 217 00:12:22,880 --> 00:12:26,640 Speaker 1: have here is you have the possibility of those countries 218 00:12:27,320 --> 00:12:30,320 Speaker 1: UH that could have problems. And the other element to 219 00:12:30,360 --> 00:12:34,520 Speaker 1: throw in this is that if the price of oil 220 00:12:35,480 --> 00:12:38,760 Speaker 1: sticks in between seventy and eighty, that'll be big for 221 00:12:38,800 --> 00:12:42,520 Speaker 1: the oil exporters, except as well where the production has collapsed, 222 00:12:42,520 --> 00:12:48,200 Speaker 1: which I forecast in my early eighteen January oh ed. 223 00:12:48,640 --> 00:12:50,800 Speaker 1: But I think that what will happen is those countries 224 00:12:50,840 --> 00:12:53,520 Speaker 1: who are importers are going to be hit. So that's 225 00:12:53,600 --> 00:12:56,080 Speaker 1: kind of a triple whammy. So we just have about 226 00:12:56,559 --> 00:12:59,760 Speaker 1: forty five seconds here. Who is the next shooter drop 227 00:12:59,800 --> 00:13:03,920 Speaker 1: which nation in developing markets? Not clear because it's going 228 00:13:03,960 --> 00:13:06,880 Speaker 1: to depend. Also if you have an ease up in 229 00:13:07,120 --> 00:13:11,240 Speaker 1: uh by Opec uh and the Russians are talking about 230 00:13:11,360 --> 00:13:15,720 Speaker 1: maybe easing up somewhat to keep the price from going 231 00:13:15,760 --> 00:13:18,800 Speaker 1: too high in the South East. Han agreed. So it's 232 00:13:18,840 --> 00:13:21,600 Speaker 1: it's not clear. But just in general, a lot of 233 00:13:21,600 --> 00:13:24,760 Speaker 1: the African countries have barred very heavily in foreign currency, 234 00:13:25,240 --> 00:13:27,680 Speaker 1: and I think that uh a number of them are 235 00:13:27,880 --> 00:13:31,520 Speaker 1: oil importers, so they could have they could have problems. 236 00:13:32,040 --> 00:13:34,360 Speaker 1: So we have to see how this, you know, this 237 00:13:34,480 --> 00:13:38,400 Speaker 1: uncertainty uh that we're facing unfolds, but it's something that 238 00:13:38,480 --> 00:13:41,640 Speaker 1: needs to be watched without a doubt. And uh, you know, 239 00:13:41,679 --> 00:13:46,040 Speaker 1: I see people on on TV and radio and everything saying, oh, 240 00:13:46,080 --> 00:13:48,600 Speaker 1: this is not going to be a problem. I think 241 00:13:48,640 --> 00:13:51,600 Speaker 1: it could be a problem. It depends on how every 242 00:13:51,640 --> 00:13:55,640 Speaker 1: individual country handles. But if you told anyone even at 243 00:13:55,679 --> 00:13:59,080 Speaker 1: the beginning of this year that Argentina would be asking 244 00:13:59,160 --> 00:14:02,000 Speaker 1: for a standby line, they'd have laughed at you because 245 00:14:02,000 --> 00:14:04,760 Speaker 1: they have just bought those hundred year bonds and they Yeah. 246 00:14:04,880 --> 00:14:06,920 Speaker 1: Bill Rhodes unfortunately have to live it there. You could 247 00:14:06,920 --> 00:14:09,720 Speaker 1: continue for another hour. Bill Rhodes, President, chief executive officer 248 00:14:09,960 --> 00:14:13,400 Speaker 1: of William R. Rhodes Global Advisors, author of Banker to 249 00:14:13,440 --> 00:14:17,199 Speaker 1: the World, also former Seatre, Vice chair of City Group, 250 00:14:17,440 --> 00:14:20,200 Speaker 1: has been in all of these negotiations. A wonderful voice 251 00:14:20,280 --> 00:14:37,680 Speaker 1: on this day. This is Bloomberg. Shares of General Motors 252 00:14:37,840 --> 00:14:40,640 Speaker 1: higher today as well as Ford Motor. General Motors up 253 00:14:40,680 --> 00:14:43,280 Speaker 1: about seven tenths of a percent. Forward Motor up nearly 254 00:14:43,320 --> 00:14:46,880 Speaker 1: one percent. This comes after the Trump administration is trying 255 00:14:46,920 --> 00:14:50,720 Speaker 1: to use national security laws to consider imposing new tariffs 256 00:14:51,160 --> 00:14:55,160 Speaker 1: on vehicle and automobile parts imports. Here to tell us 257 00:14:55,200 --> 00:14:58,120 Speaker 1: more about this is Alan Boum. He is principal of 258 00:14:58,160 --> 00:15:02,600 Speaker 1: Boum and Associates and based in West Bloomfield, Michigan, and 259 00:15:02,640 --> 00:15:04,720 Speaker 1: he joins us now. Alan, thank you very much for 260 00:15:04,920 --> 00:15:10,200 Speaker 1: being with us. If these tariffs of as much as 261 00:15:10,200 --> 00:15:13,000 Speaker 1: on automobile imports, where do you put in place? What 262 00:15:13,080 --> 00:15:18,880 Speaker 1: would that do to US automobile manufacturers? Oh? Chaos, because 263 00:15:19,280 --> 00:15:24,320 Speaker 1: us automobile manufacturers is obviously a broad term, UM. And 264 00:15:24,440 --> 00:15:26,760 Speaker 1: you know, let's take the clock back to the nineteen 265 00:15:26,880 --> 00:15:31,560 Speaker 1: eighties when the Japanese were importing huge amounts of products 266 00:15:31,600 --> 00:15:35,880 Speaker 1: into the US, and we had voluntary agreements which in 267 00:15:35,960 --> 00:15:40,800 Speaker 1: fact worked far better than even the people at the 268 00:15:40,840 --> 00:15:43,360 Speaker 1: time thought. And what I mean by that is Toyota 269 00:15:43,360 --> 00:15:47,280 Speaker 1: and Nissan and Honda to start and others later established 270 00:15:47,280 --> 00:15:51,520 Speaker 1: production here in the US, and that it matters where 271 00:15:51,520 --> 00:15:54,440 Speaker 1: the vehicles come from, because if you're producing here in 272 00:15:54,480 --> 00:15:58,280 Speaker 1: the US, your supply is obviously much better than when 273 00:15:58,320 --> 00:16:01,560 Speaker 1: you're trying to get products from Japan, where a lot 274 00:16:01,600 --> 00:16:03,960 Speaker 1: of other markets might be trying to do it. And 275 00:16:04,000 --> 00:16:08,680 Speaker 1: so the result was, UM that the Japanese UH had 276 00:16:08,800 --> 00:16:14,320 Speaker 1: tremendous products, they were very efficient, and UH really presented 277 00:16:14,440 --> 00:16:21,040 Speaker 1: presented huge problems for the Detroit Three. So, Allen, I'm 278 00:16:21,080 --> 00:16:26,000 Speaker 1: just wondering, I'm sure after the reports have come out now, UH, 279 00:16:26,040 --> 00:16:27,960 Speaker 1: that there will be a host of lobbyists that will 280 00:16:27,960 --> 00:16:30,400 Speaker 1: head to President Trump's office and try to convince him 281 00:16:30,680 --> 00:16:33,920 Speaker 1: to either go through with the tariffs or to abandon 282 00:16:33,960 --> 00:16:37,760 Speaker 1: them all together. So I'm wondering General Motors and Ford, 283 00:16:37,800 --> 00:16:39,960 Speaker 1: for example, are they going to be for these or 284 00:16:40,040 --> 00:16:44,800 Speaker 1: against these? Well, obviously it depends upon uh, you know, 285 00:16:44,840 --> 00:16:48,800 Speaker 1: how they're put together. Uh. Just how Canada and Mexico 286 00:16:48,920 --> 00:16:52,880 Speaker 1: fit into all this. Um Ford, for example, brings in, 287 00:16:53,360 --> 00:16:56,560 Speaker 1: uh the Eco Sport from Turkey. Uh. They're talking about 288 00:16:56,680 --> 00:16:59,840 Speaker 1: bringing in the Focus, which is now no longer produced 289 00:17:00,040 --> 00:17:04,600 Speaker 1: in Michigan from China. Um and GM brings in the 290 00:17:04,800 --> 00:17:10,160 Speaker 1: Envision from China as well. UM. So all automakers are 291 00:17:10,240 --> 00:17:15,520 Speaker 1: global um and there it's not just their assembly footprint 292 00:17:15,600 --> 00:17:20,439 Speaker 1: but their supplier footprint. And this could be very destructive 293 00:17:20,760 --> 00:17:24,640 Speaker 1: to their relationships with their suppliers who are used to 294 00:17:24,680 --> 00:17:28,240 Speaker 1: a certain process. And that could mean higher prices for 295 00:17:28,359 --> 00:17:32,520 Speaker 1: the automakers to buy from the suppliers, and obviously that 296 00:17:32,600 --> 00:17:36,240 Speaker 1: gets backed on. So alan who is actually arguing for 297 00:17:36,280 --> 00:17:39,040 Speaker 1: these I mean, who's lobbying President Trump saying this is 298 00:17:39,080 --> 00:17:45,200 Speaker 1: a fantastic idea. Uh that's interesting question because I think 299 00:17:45,280 --> 00:17:47,959 Speaker 1: it's much more from the political side than it is 300 00:17:48,000 --> 00:17:51,960 Speaker 1: the business side. Uh. You know, this is obviously some 301 00:17:52,160 --> 00:17:56,920 Speaker 1: of the UH labor organizations might be comfortable with this, 302 00:17:57,359 --> 00:18:02,160 Speaker 1: but I say might because of the the unintended consequences, 303 00:18:02,480 --> 00:18:05,640 Speaker 1: and of course the other thing. Using this national security 304 00:18:06,400 --> 00:18:10,400 Speaker 1: law as part of the justification creates a whole lot 305 00:18:10,440 --> 00:18:14,840 Speaker 1: of problems in terms of legal and trade policy. And 306 00:18:14,920 --> 00:18:19,280 Speaker 1: of course this is a cliche, but it's true. Business 307 00:18:19,359 --> 00:18:24,560 Speaker 1: hates uncertainty, and this is clearly uncertain Alan. Is it 308 00:18:24,640 --> 00:18:28,120 Speaker 1: possible that this is also somehow entwined in the ongoing 309 00:18:28,200 --> 00:18:33,439 Speaker 1: NAFTA negotiations? Oh sure, and uh, you know that is 310 00:18:33,800 --> 00:18:38,080 Speaker 1: uh for all of the automakers. That's a critical thing. 311 00:18:38,119 --> 00:18:40,600 Speaker 1: You know. I was reading something this morning, uh, and 312 00:18:40,640 --> 00:18:44,920 Speaker 1: it said that eight million vehicles are are imported into 313 00:18:44,960 --> 00:18:47,040 Speaker 1: the US. And I looked at that and said, oh, 314 00:18:47,119 --> 00:18:50,440 Speaker 1: that's crazy. And then I realized that they were talking 315 00:18:50,480 --> 00:18:54,600 Speaker 1: about Canada and Mexico, which were half of that. Um. 316 00:18:54,800 --> 00:18:57,639 Speaker 1: And you know, we don't even think of those as imports. 317 00:18:57,800 --> 00:19:01,720 Speaker 1: NAFTA is obviously a fact of life. UM. And so yes, 318 00:19:01,800 --> 00:19:06,880 Speaker 1: there are four million imports from outside DAFTA. But clearly 319 00:19:06,920 --> 00:19:10,399 Speaker 1: the NAFTA processes is absolutely critical to the industry. And 320 00:19:10,440 --> 00:19:13,560 Speaker 1: again I go back to the supplier base where uh, 321 00:19:13,960 --> 00:19:16,080 Speaker 1: you know, the automakers have said, if you want to 322 00:19:16,119 --> 00:19:20,159 Speaker 1: supply US, we want the Mexico price or the China price, 323 00:19:20,600 --> 00:19:24,800 Speaker 1: and oftentimes that is meant suppliers have opened up new 324 00:19:24,840 --> 00:19:29,159 Speaker 1: plans in low cost UH locations. So, Ellen, when you 325 00:19:29,240 --> 00:19:32,200 Speaker 1: head into Detroit and meet with people at the big 326 00:19:32,320 --> 00:19:35,879 Speaker 1: US carmakers, is the feeling that this will all just 327 00:19:35,920 --> 00:19:38,960 Speaker 1: settle down and that it's mostly just a trade negotiation 328 00:19:39,000 --> 00:19:43,960 Speaker 1: tactic or is there real fear? Well, the you know, 329 00:19:44,000 --> 00:19:47,840 Speaker 1: there's so much uncertainty day to day in what the 330 00:19:47,920 --> 00:19:51,640 Speaker 1: policy is. And I go back to Mike Cliche, I mean, 331 00:19:51,720 --> 00:19:55,720 Speaker 1: look at the fuel economy is situation. The automakers want 332 00:19:55,800 --> 00:20:00,600 Speaker 1: some relief, but they didn't want relief that would get 333 00:20:00,640 --> 00:20:04,919 Speaker 1: the hornets going in in California to get legislaed, to 334 00:20:04,960 --> 00:20:08,960 Speaker 1: get the lawsuits going, and more uncertainty. And so now 335 00:20:08,960 --> 00:20:12,520 Speaker 1: they're saying, wait a minute, we really mean that we 336 00:20:12,720 --> 00:20:15,520 Speaker 1: just wanted a little little things on the edges here. 337 00:20:15,600 --> 00:20:18,840 Speaker 1: Please don't don't don't draw the whole system into the 338 00:20:19,000 --> 00:20:23,680 Speaker 1: correct Alan, and that's that's where we are Allan, thank 339 00:20:23,680 --> 00:20:25,640 Speaker 1: you so much for joining us. It's always fun having 340 00:20:25,680 --> 00:20:30,160 Speaker 1: you on. Alan Baum is the principle of Baum and Associates, 341 00:20:30,200 --> 00:20:33,639 Speaker 1: which is based in West Bloomfield, Michigan. Uh and is 342 00:20:33,720 --> 00:20:37,440 Speaker 1: a firm that's focused on automotive research for the analysis 343 00:20:37,440 --> 00:20:42,919 Speaker 1: of auto sales. Really interesting discussion and definitely uncertainty the 344 00:20:43,080 --> 00:21:00,240 Speaker 1: word of the day and the year, maybe the decade. 345 00:21:04,240 --> 00:21:08,000 Speaker 1: Donald Trump. President Donald Trump is set to as sign 346 00:21:08,240 --> 00:21:13,480 Speaker 1: a revamp of Dodd Frank financial legislation. He has expected 347 00:21:13,520 --> 00:21:15,399 Speaker 1: to sign that at the White House. We will of 348 00:21:15,400 --> 00:21:18,879 Speaker 1: course bring that to live. Uh. The final vote in 349 00:21:18,880 --> 00:21:22,160 Speaker 1: the House it was to fifty eight to one fifty 350 00:21:22,280 --> 00:21:26,320 Speaker 1: nine in favor. It was a bipartisan Senate crafted bill 351 00:21:26,520 --> 00:21:30,280 Speaker 1: and is designed to loosen regulations for many community banks 352 00:21:30,320 --> 00:21:34,560 Speaker 1: and regional lenders, including custodian banks such as a State Street. 353 00:21:34,760 --> 00:21:37,240 Speaker 1: Here to tell us more about this is our own 354 00:21:37,320 --> 00:21:40,359 Speaker 1: Arnold Cucuda. He is our banking and credit analyst for 355 00:21:40,640 --> 00:21:44,640 Speaker 1: Bloomberg Intelligence. Arnold, thank you very much for being here. 356 00:21:45,119 --> 00:21:46,920 Speaker 1: Maybe just tell people a little bit about I believe 357 00:21:46,920 --> 00:21:49,960 Speaker 1: there's sort of three areas that this is really going 358 00:21:50,000 --> 00:21:53,360 Speaker 1: to effect. Yes, so this bill is actually it's it's 359 00:21:53,400 --> 00:21:56,560 Speaker 1: more about helping the regional banks. So anybody really under 360 00:21:56,560 --> 00:22:00,960 Speaker 1: two billion of assets? Right, So basically the systemically important 361 00:22:00,960 --> 00:22:04,439 Speaker 1: financial institution threshold, which used to be a fifty billion, 362 00:22:04,600 --> 00:22:08,600 Speaker 1: is now going up. So what up to Basically what 363 00:22:08,640 --> 00:22:11,280 Speaker 1: that means is less regulation for those banks that fall 364 00:22:11,320 --> 00:22:15,679 Speaker 1: between this. Now for some of the bigger banks, like uh, 365 00:22:15,840 --> 00:22:18,880 Speaker 1: you know, I look more at them, the US systemically 366 00:22:18,920 --> 00:22:23,040 Speaker 1: important banks. So in that area State Street and Bank 367 00:22:23,080 --> 00:22:26,200 Speaker 1: in New York, they're going to get some capital relief 368 00:22:26,440 --> 00:22:29,440 Speaker 1: in terms of um, you know, not counting Central bank 369 00:22:29,520 --> 00:22:31,680 Speaker 1: deposits at at the FED and the e c B 370 00:22:32,160 --> 00:22:34,760 Speaker 1: from their denominator of of a ratio, which basically it 371 00:22:34,760 --> 00:22:39,840 Speaker 1: will help boost that ratio for those banks. So definitely 372 00:22:40,600 --> 00:22:42,720 Speaker 1: helped to some regional banks. And people have been saying 373 00:22:42,720 --> 00:22:45,800 Speaker 1: that we might see a consolidation in smaller banks as 374 00:22:45,800 --> 00:22:47,320 Speaker 1: a result of this. I want to shift gears a 375 00:22:47,359 --> 00:22:49,960 Speaker 1: little bit because we are seeing uh the shareholder meeting 376 00:22:50,000 --> 00:22:54,520 Speaker 1: of Deutsche Bank unfold and it shares down nearly five 377 00:22:54,600 --> 00:22:58,520 Speaker 1: percent in Germany. Uh, you know right now after announcing 378 00:22:58,520 --> 00:23:01,840 Speaker 1: that it would uh cut more than seven thousand people. 379 00:23:02,640 --> 00:23:05,080 Speaker 1: I think one big question is what's its plan? I mean, 380 00:23:05,080 --> 00:23:07,680 Speaker 1: what's its strategy? What does it want to be? Yes, 381 00:23:07,760 --> 00:23:10,679 Speaker 1: we know it wants to cut costs. What next? Well, 382 00:23:10,760 --> 00:23:13,359 Speaker 1: so it's it's funny because it was supposed to be 383 00:23:13,440 --> 00:23:15,959 Speaker 1: no more, no more crying, you know, faith and Christian. 384 00:23:16,440 --> 00:23:19,080 Speaker 1: But you know, I guess. You know, even though investors 385 00:23:19,080 --> 00:23:21,479 Speaker 1: got what they wanted, Uh, still you know, do what 386 00:23:21,520 --> 00:23:24,080 Speaker 1: do what they say? Still don't like it. So uh 387 00:23:24,080 --> 00:23:26,720 Speaker 1: the strategy is UM. You know, today was kind of 388 00:23:26,720 --> 00:23:29,160 Speaker 1: a reiteration and kind of filling in the blanks of hey, 389 00:23:29,240 --> 00:23:31,399 Speaker 1: you know, the new CEO came on board and said, hey, 390 00:23:31,600 --> 00:23:34,800 Speaker 1: we're gonna shift focus, you know, cut um our reliance 391 00:23:34,840 --> 00:23:37,359 Speaker 1: on the corporate investment bank. But it's it's only just 392 00:23:37,400 --> 00:23:40,840 Speaker 1: a little bit, right, so they're currently seen they had 393 00:23:40,840 --> 00:23:43,400 Speaker 1: about fifty percent revenue coming from the corporate investment bank. 394 00:23:44,520 --> 00:23:47,760 Speaker 1: That will be you know, uh sorry, uh they sent 395 00:23:47,800 --> 00:23:50,360 Speaker 1: from non c IB that'll go to So it's really 396 00:23:50,359 --> 00:23:52,800 Speaker 1: only your small shift. And in terms of the cuts 397 00:23:53,080 --> 00:23:56,760 Speaker 1: coming in equities of head count there that you know, 398 00:23:57,240 --> 00:23:59,160 Speaker 1: it kind of makes sense there because you know that's 399 00:23:59,160 --> 00:24:03,000 Speaker 1: an area that they've act UM technology UM. I guess 400 00:24:03,040 --> 00:24:06,119 Speaker 1: investments were lagging there UM And I think that carries 401 00:24:06,160 --> 00:24:08,080 Speaker 1: over into the whole firm where you're seeing leaks of 402 00:24:08,080 --> 00:24:11,040 Speaker 1: oh they had you know, posting collateral of of a couple, 403 00:24:11,280 --> 00:24:14,360 Speaker 1: you know, dozen billions and stuff. While you know these 404 00:24:14,359 --> 00:24:18,399 Speaker 1: for huge mistakes, they accidentally transferred millions in some cases 405 00:24:18,440 --> 00:24:22,040 Speaker 1: billions of dollars to other places mistakenly and had to 406 00:24:22,320 --> 00:24:24,239 Speaker 1: you know, beg for it back. I mean they say 407 00:24:24,280 --> 00:24:25,720 Speaker 1: they caught it in a few minutes. But you know, 408 00:24:25,880 --> 00:24:29,520 Speaker 1: just this kind of stuff happening is a little bit baffling, 409 00:24:29,560 --> 00:24:32,440 Speaker 1: to be honest. So, um, you know, it just goes 410 00:24:32,520 --> 00:24:35,400 Speaker 1: underscore kind of the the investment in technology that has 411 00:24:35,440 --> 00:24:37,760 Speaker 1: been lacking. And you know, even as they're cutting back, 412 00:24:38,119 --> 00:24:40,560 Speaker 1: they still need to do this kind of stuff. Right, 413 00:24:40,600 --> 00:24:43,120 Speaker 1: So even though maybe in cash equities where it makes 414 00:24:43,160 --> 00:24:45,119 Speaker 1: sense to pull back, you know, in other areas of 415 00:24:45,119 --> 00:24:47,639 Speaker 1: the firms, they still need to continue this um technology 416 00:24:47,680 --> 00:24:50,720 Speaker 1: investment just to keep up and comply with regulation. Right. 417 00:24:50,800 --> 00:24:53,359 Speaker 1: So arnold, what kind of bank would Deutsche Bank b 418 00:24:53,760 --> 00:24:57,920 Speaker 1: after they eliminate these seven thousand positions? Well, I mean, 419 00:24:58,080 --> 00:25:00,600 Speaker 1: so the thing is there there there ski ailing back 420 00:25:00,840 --> 00:25:03,639 Speaker 1: to not be global everywhere, but they're still going to 421 00:25:03,720 --> 00:25:05,879 Speaker 1: have a big presence. So it's kind of like, you know, 422 00:25:05,920 --> 00:25:07,919 Speaker 1: they're trying to show, hey, we're doing something, but you 423 00:25:07,920 --> 00:25:10,000 Speaker 1: know it's the sum. It may feel like it's not enough, 424 00:25:10,160 --> 00:25:12,520 Speaker 1: and and I guess you know, you see that today 425 00:25:12,560 --> 00:25:15,639 Speaker 1: where the stock is down almost six percent, and um, 426 00:25:15,680 --> 00:25:17,119 Speaker 1: you know, so so they are saying, hey, we are 427 00:25:17,160 --> 00:25:20,560 Speaker 1: cutting back, but you know what, are they doing this 428 00:25:20,640 --> 00:25:23,440 Speaker 1: for the shareholders or are they doing this because they 429 00:25:23,440 --> 00:25:26,800 Speaker 1: have an internal vision of what they really believe Deutsche 430 00:25:26,800 --> 00:25:29,960 Speaker 1: Bank can be in the next three to five years. Uh. Yeah, 431 00:25:30,000 --> 00:25:33,200 Speaker 1: so they have to do this in terms of Um, 432 00:25:33,640 --> 00:25:36,119 Speaker 1: the problem with Crying, they said, is, hey, there was 433 00:25:36,160 --> 00:25:38,760 Speaker 1: a vision John cry In, the former chief executive. He's 434 00:25:38,840 --> 00:25:42,879 Speaker 1: replaced by Christian Saving. Correct, Yes, so, um, the problem 435 00:25:42,920 --> 00:25:45,080 Speaker 1: with him is okay, fine, he set us on a course, 436 00:25:45,560 --> 00:25:49,360 Speaker 1: but he didn't execute in terms of the cost implementation 437 00:25:49,440 --> 00:25:52,479 Speaker 1: and things weren't going fast enough. So um, you know, 438 00:25:52,800 --> 00:25:56,160 Speaker 1: going with an insider Christian Saving in this case, Um, 439 00:25:56,359 --> 00:25:59,320 Speaker 1: kind of, it's really a continuation of the strategy almost, 440 00:25:59,359 --> 00:26:02,000 Speaker 1: although it's put more hard numbers and you know, so 441 00:26:02,000 --> 00:26:04,120 Speaker 1: so for him to execute, he has to come in 442 00:26:04,520 --> 00:26:06,919 Speaker 1: at this you know, billion of costs for this year, 443 00:26:07,080 --> 00:26:10,119 Speaker 1: twenty two billion next year. But it's it's only you know, 444 00:26:10,440 --> 00:26:13,280 Speaker 1: maybe going down to twenty one billion one. But in 445 00:26:13,359 --> 00:26:16,959 Speaker 1: terms of what is your profitability at that standpoint? And 446 00:26:17,040 --> 00:26:20,120 Speaker 1: then the whole issue is, uh, for Deutsche Bank, they 447 00:26:20,160 --> 00:26:24,000 Speaker 1: don't have like a great thing outside of the corporate 448 00:26:24,000 --> 00:26:27,280 Speaker 1: investment bank asset management. Yes, good, but it's very small. 449 00:26:27,359 --> 00:26:29,520 Speaker 1: They the i P at a quarter of it um. 450 00:26:29,560 --> 00:26:32,200 Speaker 1: But you know, unlike like a UBS or a Credit 451 00:26:32,240 --> 00:26:34,440 Speaker 1: Swiss which said all right, we're gonna scale back the 452 00:26:34,480 --> 00:26:37,280 Speaker 1: investment bank trading. Oh wow, this we have this great 453 00:26:37,320 --> 00:26:40,879 Speaker 1: wealth management business, highly profitable and uh you know, steady 454 00:26:40,920 --> 00:26:43,760 Speaker 1: business for Deutsche Bank where you have his core Germany, 455 00:26:44,119 --> 00:26:46,760 Speaker 1: and the returns they're are very meager, right, and so 456 00:26:46,960 --> 00:26:49,399 Speaker 1: and they're kind of more going into there with you know, 457 00:26:49,600 --> 00:26:53,159 Speaker 1: they they had the strategy reversal of Okay, initially they 458 00:26:53,160 --> 00:26:56,320 Speaker 1: wanted to sell post Bank. Now they're they said they're 459 00:26:56,320 --> 00:26:59,080 Speaker 1: gonna keep it and now they've more integrated it with 460 00:26:59,160 --> 00:27:02,040 Speaker 1: their with their core Blue bank in Germany. So but 461 00:27:02,040 --> 00:27:04,359 Speaker 1: but they are making progress, they're right. So they are 462 00:27:04,480 --> 00:27:07,200 Speaker 1: making progress there, and so you know, they expect going 463 00:27:07,240 --> 00:27:09,720 Speaker 1: forward that they'll have some expense savings down the line 464 00:27:10,200 --> 00:27:13,040 Speaker 1: um and and in terms of kind of adding to 465 00:27:13,080 --> 00:27:15,680 Speaker 1: the pool of profitability, they can add the post bank 466 00:27:15,800 --> 00:27:19,200 Speaker 1: um profitability to to help pay for their um you know, 467 00:27:19,240 --> 00:27:22,280 Speaker 1: additional two of one coupons. They're they're a T one cocos. Yeah, 468 00:27:22,359 --> 00:27:25,640 Speaker 1: talking about their cocos I'm looking right now at their 469 00:27:25,640 --> 00:27:31,760 Speaker 1: six perpetual bonds. Uh that mature well, their perpetuals uh. 470 00:27:31,840 --> 00:27:34,280 Speaker 1: And I remember people were watching these back in early 471 00:27:35,200 --> 00:27:39,080 Speaker 1: they tanked unconcerns that Deutsche Bank would have to raise 472 00:27:39,119 --> 00:27:42,000 Speaker 1: more capital and these could potentially be wiped out. They 473 00:27:42,040 --> 00:27:45,440 Speaker 1: since recover their value, but they've been declining, and I'm 474 00:27:45,440 --> 00:27:48,640 Speaker 1: wondering what this means. Does it mean that that investors 475 00:27:48,800 --> 00:27:52,280 Speaker 1: think that perhaps Deutsche Bank will be forced to raise 476 00:27:52,359 --> 00:27:55,800 Speaker 1: more capital again and that they will somehow be pressured 477 00:27:55,840 --> 00:27:59,280 Speaker 1: on that front. Well, there's definitely concern right. Um, you 478 00:27:59,280 --> 00:28:01,440 Speaker 1: know in the US marketing, I followed the seven and 479 00:28:01,480 --> 00:28:04,159 Speaker 1: halfs and stuff, but the dB seven and a halfs 480 00:28:04,160 --> 00:28:07,440 Speaker 1: and basically that that's down ten points on the year, 481 00:28:07,760 --> 00:28:10,159 Speaker 1: right and peeking out about a hundred and seven. Now 482 00:28:10,200 --> 00:28:12,760 Speaker 1: it's about nineties seven. So it's kind of steady decline 483 00:28:13,200 --> 00:28:15,720 Speaker 1: and you know one, yeah, but I mean still training 484 00:28:15,720 --> 00:28:19,400 Speaker 1: about parts. It's not like okay, hey, you know there anytime. 485 00:28:19,480 --> 00:28:21,520 Speaker 1: It's not gonna go bust any time, but you know 486 00:28:21,640 --> 00:28:24,640 Speaker 1: when at your annual showhold meeting where you're like where 487 00:28:24,640 --> 00:28:27,000 Speaker 1: the CEO is like we intend to pay the coupon, 488 00:28:27,200 --> 00:28:30,160 Speaker 1: I mean that's not a great scene. That's the big 489 00:28:30,160 --> 00:28:32,960 Speaker 1: news is that we're gonna remain current on our debt. Yes, 490 00:28:34,680 --> 00:28:37,320 Speaker 1: so um, but but but the concern is, hey, if 491 00:28:37,320 --> 00:28:39,280 Speaker 1: you have a bank that you know, the past three 492 00:28:39,360 --> 00:28:43,720 Speaker 1: years you had negative earnings, right, and so basically you're 493 00:28:43,760 --> 00:28:46,720 Speaker 1: in search of profit and so the pool to pay 494 00:28:46,720 --> 00:28:50,000 Speaker 1: these profits, you know, unless your firm is profitable, you're 495 00:28:50,040 --> 00:28:52,640 Speaker 1: not adding to that, right. So there definitely is concerned 496 00:28:52,640 --> 00:28:55,080 Speaker 1: that hey, maybe you know there there might you know, 497 00:28:55,120 --> 00:28:58,800 Speaker 1: the firm might have to kind of um stop paying coupons, right, 498 00:28:58,840 --> 00:29:01,160 Speaker 1: And so there's Ligalymking certain So in terms of where 499 00:29:01,160 --> 00:29:03,520 Speaker 1: their capital is right now, um, they're about a hundred 500 00:29:03,520 --> 00:29:06,239 Speaker 1: and fifty basis points above kind of where they need 501 00:29:06,280 --> 00:29:10,160 Speaker 1: to be. So capital looks okay, but but you remember, 502 00:29:10,440 --> 00:29:12,400 Speaker 1: you know last year they did an a billion capital 503 00:29:12,480 --> 00:29:15,560 Speaker 1: rays right, And so Deutsch has a history of setting 504 00:29:15,560 --> 00:29:18,480 Speaker 1: targets kind of falling short and then saying we don't 505 00:29:18,520 --> 00:29:21,960 Speaker 1: need capital. Oh huge capital rays right. So you can't 506 00:29:21,960 --> 00:29:24,120 Speaker 1: have this cycle repeating. And I think that's why you 507 00:29:24,160 --> 00:29:26,240 Speaker 1: have this new Seeo in place and hopefully he can 508 00:29:26,480 --> 00:29:28,520 Speaker 1: you know, turn their ship around. But even even the 509 00:29:28,520 --> 00:29:31,720 Speaker 1: target that you're spying to is not not all that 510 00:29:31,760 --> 00:29:34,240 Speaker 1: all in swaring and I think you know the six 511 00:29:34,280 --> 00:29:37,000 Speaker 1: percent stock down today, the reaction to that is, you 512 00:29:37,040 --> 00:29:38,960 Speaker 1: know it's not an on spine target, but can you 513 00:29:39,000 --> 00:29:41,880 Speaker 1: even get there? Right? That's I think the issue are 514 00:29:41,960 --> 00:29:44,800 Speaker 1: not just just a one last thing on on Deutsche Bank. 515 00:29:44,840 --> 00:29:47,840 Speaker 1: I'm looking at various league tagles, whether it's US investment 516 00:29:47,880 --> 00:29:52,920 Speaker 1: grade corporates, are high yield or even European bonds, loans, 517 00:29:53,080 --> 00:29:56,480 Speaker 1: equity or offerings and so on. They're not in the top. 518 00:29:56,760 --> 00:29:59,880 Speaker 1: They're not number one in anything. Well, I mean fixing 519 00:30:00,040 --> 00:30:02,880 Speaker 1: come is where they're strong at right and uh, but 520 00:30:03,040 --> 00:30:06,440 Speaker 1: you know they have lost talent over the years. Um. 521 00:30:07,560 --> 00:30:09,360 Speaker 1: I guess looking back you can say, hey, you know, 522 00:30:09,400 --> 00:30:12,640 Speaker 1: they had a lot of really good entrepreneurial uh folks 523 00:30:12,760 --> 00:30:14,960 Speaker 1: you know who are able to find, you know, ways 524 00:30:15,000 --> 00:30:17,480 Speaker 1: to make money, but you know at what cost? Right, 525 00:30:17,680 --> 00:30:19,440 Speaker 1: And I think that's what they're paying for right now, 526 00:30:19,560 --> 00:30:22,440 Speaker 1: is Hey, you know, maybe sometimes the right compliance was 527 00:30:22,480 --> 00:30:25,080 Speaker 1: in place, or or sometimes they you know, they kind 528 00:30:25,080 --> 00:30:27,280 Speaker 1: of bordered on the close of the edge and so 529 00:30:27,400 --> 00:30:29,640 Speaker 1: but you know, fixed income is still an area that 530 00:30:29,640 --> 00:30:32,200 Speaker 1: they're strong and although you know kind of they didn't 531 00:30:32,160 --> 00:30:34,920 Speaker 1: announced they're going to pull back in the US rates, 532 00:30:35,240 --> 00:30:37,040 Speaker 1: but some you know in the credit you know that's 533 00:30:37,160 --> 00:30:39,880 Speaker 1: that's a strong area structured credit that that's what they're gonna, 534 00:30:39,960 --> 00:30:42,240 Speaker 1: you know, still keep and they say they still are 535 00:30:42,240 --> 00:30:45,040 Speaker 1: going to maintain a global presence. So thank you so 536 00:30:45,120 --> 00:30:47,280 Speaker 1: much for being with us. An important story. We will 537 00:30:47,320 --> 00:30:50,360 Speaker 1: continue to follow it. Arnold Kukuda is a banking and 538 00:30:50,400 --> 00:30:54,200 Speaker 1: credit analyst for Bloomberg Intelligence, talking Deutsche Bank on this 539 00:30:54,240 --> 00:31:10,280 Speaker 1: day when they do have their annual shareholder meeting. What 540 00:31:10,360 --> 00:31:13,280 Speaker 1: we also are waiting for from the White House and 541 00:31:13,360 --> 00:31:16,720 Speaker 1: from Congress is some kind of infrastructure bill, which we 542 00:31:16,760 --> 00:31:19,040 Speaker 1: had been talking about and then it kind of died 543 00:31:19,080 --> 00:31:21,640 Speaker 1: down as we talked about everything else. Joining us now 544 00:31:21,760 --> 00:31:24,120 Speaker 1: is someone who knows a lot about the needs of 545 00:31:24,200 --> 00:31:27,280 Speaker 1: the U s infrastructure, Gary Nomic. He has a vice 546 00:31:27,280 --> 00:31:30,720 Speaker 1: president of Engineering and American Water based in where he's 547 00:31:30,720 --> 00:31:33,120 Speaker 1: at New Jersey. Gary, thank you so much for being 548 00:31:33,400 --> 00:31:37,160 Speaker 1: with us. You know, we've heard not that much about 549 00:31:37,200 --> 00:31:39,719 Speaker 1: the infrastructure plan that we have in this country. Do 550 00:31:39,760 --> 00:31:42,520 Speaker 1: you have a better sense of what's happening and what 551 00:31:42,680 --> 00:31:45,160 Speaker 1: needs to get done? When we talk about the aging 552 00:31:45,240 --> 00:31:48,479 Speaker 1: infrastructure of the United States. At first, it's a pleasure 553 00:31:48,560 --> 00:31:51,560 Speaker 1: to be here, happy, happy to be with you. UM. 554 00:31:51,680 --> 00:31:57,880 Speaker 1: The infrastructure situation is one with a lot of needs 555 00:31:58,000 --> 00:32:00,880 Speaker 1: and a lot of support among the among the public, 556 00:32:00,960 --> 00:32:03,960 Speaker 1: and I think it's fair to say that UM, to 557 00:32:04,160 --> 00:32:07,840 Speaker 1: solve our problem, it's going to take a unified effort 558 00:32:07,920 --> 00:32:12,040 Speaker 1: not only from the federal government but also local funding 559 00:32:12,120 --> 00:32:17,160 Speaker 1: and private capital sources. The American Society of Civil Engineers 560 00:32:17,800 --> 00:32:21,320 Speaker 1: came out with their report and it rates our drinking 561 00:32:21,400 --> 00:32:26,800 Speaker 1: water UM infrastructure as a Grade D and so we 562 00:32:26,800 --> 00:32:29,640 Speaker 1: we have work to do now. I'll also say that, 563 00:32:30,280 --> 00:32:33,440 Speaker 1: to use a bad pun the glasses maybe half full, 564 00:32:33,640 --> 00:32:37,760 Speaker 1: is that we're blessed in the United States with plentiful 565 00:32:37,800 --> 00:32:40,960 Speaker 1: supply in many places and you can go UH many 566 00:32:40,960 --> 00:32:44,280 Speaker 1: places and not worry about the quality of the water 567 00:32:44,400 --> 00:32:49,120 Speaker 1: you drink. But our infrastructure is aging. We are facing 568 00:32:49,720 --> 00:32:54,080 Speaker 1: UM extreme weather events that our water systems need to 569 00:32:54,120 --> 00:32:57,880 Speaker 1: be resilient to. So so we have our challenges UH, 570 00:32:57,920 --> 00:33:00,920 Speaker 1: and it's going to take continued funding to to meet 571 00:33:00,920 --> 00:33:05,680 Speaker 1: the needy. Is the infrastructure that exists in the United 572 00:33:05,720 --> 00:33:10,720 Speaker 1: States ready to withstand an upcoming hurricane season? One of 573 00:33:10,800 --> 00:33:14,040 Speaker 1: the UH. One of the unique things about drinking water 574 00:33:14,200 --> 00:33:18,840 Speaker 1: is that it's so local. There are fifty thousand water 575 00:33:19,000 --> 00:33:22,960 Speaker 1: utilities across the country because water is so heavy to move. 576 00:33:23,040 --> 00:33:26,080 Speaker 1: It's not like electricity where you can send an electron 577 00:33:26,240 --> 00:33:29,320 Speaker 1: from Florida to Michigan. So it's all local, so fair 578 00:33:29,920 --> 00:33:33,880 Speaker 1: fair answer to that question is that many places are ready, 579 00:33:34,000 --> 00:33:38,200 Speaker 1: but there are there are probably towns that need to 580 00:33:38,200 --> 00:33:42,360 Speaker 1: do work to be ready for that. UM My company, 581 00:33:42,360 --> 00:33:47,120 Speaker 1: American Water, where we have a continuous UH investment program 582 00:33:47,160 --> 00:33:51,160 Speaker 1: capital investment. We're going to be investing over seven million, 583 00:33:51,240 --> 00:33:55,320 Speaker 1: seven billion dollars over the next five years for these 584 00:33:55,400 --> 00:33:59,840 Speaker 1: type of preparedness things, both the sustainability and the resiliency 585 00:33:59,840 --> 00:34:04,200 Speaker 1: of our assets. Gary, you also formerly worked at the 586 00:34:04,320 --> 00:34:08,759 Speaker 1: US Environmental Protection Agency, and putting money into the infrastructure 587 00:34:08,840 --> 00:34:12,680 Speaker 1: is one thing. Having oversight and making sure that the 588 00:34:12,719 --> 00:34:15,680 Speaker 1: regulations are such that people are ensured to get clean 589 00:34:15,719 --> 00:34:19,160 Speaker 1: water is another. I'm wondering do you feel like the 590 00:34:19,200 --> 00:34:21,400 Speaker 1: current e p A is doing what it needs to 591 00:34:21,440 --> 00:34:26,480 Speaker 1: be doing to make sure that Americans have clean drinking water? UM. 592 00:34:27,440 --> 00:34:31,040 Speaker 1: I think the the e p A, and speaking mainly 593 00:34:31,360 --> 00:34:36,719 Speaker 1: on the health protection side, UH, the e p A 594 00:34:36,800 --> 00:34:43,000 Speaker 1: I think has been UH proactive and and appropriate there 595 00:34:43,000 --> 00:34:48,200 Speaker 1: are There are ninety contaminants that are regulated, and there 596 00:34:48,200 --> 00:34:51,160 Speaker 1: are many others that they're giving health guidance. And for 597 00:34:51,440 --> 00:34:56,040 Speaker 1: utilities like ourselves, we take that guidance and we proactively 598 00:34:57,080 --> 00:34:59,759 Speaker 1: try to take measures that are protective of the of 599 00:34:59,800 --> 00:35:03,080 Speaker 1: the customers that we serve. Gary. Is there any estimate 600 00:35:03,160 --> 00:35:05,960 Speaker 1: as to how much needs to be spent in order 601 00:35:06,000 --> 00:35:10,760 Speaker 1: to secure the nation's infrastructure? Yes, UM, there have been 602 00:35:10,800 --> 00:35:14,440 Speaker 1: several studies. UM e p A has done, one of 603 00:35:14,440 --> 00:35:18,640 Speaker 1: the American Water Works Association, also the American Society's Civil 604 00:35:18,680 --> 00:35:21,839 Speaker 1: Engineers have come up with slightly different numbers, but they 605 00:35:21,840 --> 00:35:26,200 Speaker 1: all converge around a really really big number, somewhere around 606 00:35:26,600 --> 00:35:31,600 Speaker 1: a trillion dollars over the next twenty to twenty five years. 607 00:35:31,680 --> 00:35:36,360 Speaker 1: And the perception is that the amount of investment on 608 00:35:36,480 --> 00:35:41,160 Speaker 1: average in the US that's happening is probably about half 609 00:35:41,400 --> 00:35:46,600 Speaker 1: of what the long term sustainable target should be. So 610 00:35:46,680 --> 00:35:52,160 Speaker 1: there is what is called the infrastructured gap. So I'm 611 00:35:52,200 --> 00:35:56,040 Speaker 1: just wanting you You said earlier that water and sort 612 00:35:56,080 --> 00:35:58,000 Speaker 1: of whether there could be a disruption really is a 613 00:35:58,000 --> 00:36:01,359 Speaker 1: local issue, and I'm wondering and given the fact that 614 00:36:01,400 --> 00:36:04,680 Speaker 1: we have seen some climate disruptions and increase in the 615 00:36:04,719 --> 00:36:08,280 Speaker 1: amount of hurricanes, etcetera. I'm wondering whether there are certain 616 00:36:08,320 --> 00:36:12,080 Speaker 1: regions in the United States that you view as more 617 00:36:12,239 --> 00:36:15,600 Speaker 1: vulnerable to some sort of disruption in the face of 618 00:36:16,320 --> 00:36:21,040 Speaker 1: some storm or frankly just rising tides. There are certainly 619 00:36:21,840 --> 00:36:28,359 Speaker 1: areas like coastal cities that have the potential impact from 620 00:36:28,960 --> 00:36:33,440 Speaker 1: climate change in sea level rise. But our our company, 621 00:36:34,040 --> 00:36:38,800 Speaker 1: American Waterworks, serves over two hundred water systems all across 622 00:36:38,840 --> 00:36:41,120 Speaker 1: the country, so we see it all, and I think 623 00:36:41,680 --> 00:36:44,880 Speaker 1: just about everywhere there's something we need to be worried 624 00:36:44,920 --> 00:36:49,400 Speaker 1: about by. By its nature, water plants are near near rivers, 625 00:36:49,520 --> 00:36:55,400 Speaker 1: very awesome, subject to flooding, um or or droughts or 626 00:36:55,400 --> 00:36:59,279 Speaker 1: you know, wildfires out west. Well, to comfort you a 627 00:36:59,280 --> 00:37:04,400 Speaker 1: little bit again, because many utilities are doing the proactive investment. 628 00:37:04,600 --> 00:37:07,480 Speaker 1: Give you example, we have a treatment plan in central 629 00:37:07,480 --> 00:37:11,400 Speaker 1: New Jersey which was built in the fifties with a floodwall. However, 630 00:37:12,080 --> 00:37:15,719 Speaker 1: um the storms have been higher than they used to be, 631 00:37:15,760 --> 00:37:19,439 Speaker 1: and so we're investing thirty seven million dollars to raise 632 00:37:19,520 --> 00:37:23,520 Speaker 1: the floodwall above a level um the historic level to 633 00:37:23,640 --> 00:37:26,800 Speaker 1: protect it in the future. So it's really all about 634 00:37:26,960 --> 00:37:35,080 Speaker 1: this proactive investment UM by cities, by UH companies like 635 00:37:35,200 --> 00:37:38,040 Speaker 1: ours to be to be proactive on on many of 636 00:37:38,040 --> 00:37:42,719 Speaker 1: those needs. Carry would the creation of an infrastructure bank 637 00:37:42,760 --> 00:37:46,479 Speaker 1: at the federal level be useful to jump starting much 638 00:37:46,560 --> 00:37:51,360 Speaker 1: greater expenditure of money on the private side to help 639 00:37:51,440 --> 00:37:54,960 Speaker 1: infrastructure be improved. I think it can be. I think 640 00:37:54,960 --> 00:38:01,400 Speaker 1: it's in all of the above solution where UM federal 641 00:38:01,520 --> 00:38:07,160 Speaker 1: funds or and or things like UM loan guarantees by 642 00:38:07,200 --> 00:38:09,960 Speaker 1: the states and so forth, they can leverage that funding 643 00:38:10,080 --> 00:38:14,640 Speaker 1: to bring in higher amounts of investment. Is all. H 644 00:38:15,000 --> 00:38:17,799 Speaker 1: is all a positive step. The need is so big 645 00:38:17,840 --> 00:38:21,719 Speaker 1: that it's going to take an all of the above commitment. 646 00:38:22,560 --> 00:38:25,680 Speaker 1: Local communities are going to need to recognize the true 647 00:38:25,760 --> 00:38:28,799 Speaker 1: cost of the service and the true cost of of 648 00:38:29,400 --> 00:38:32,960 Speaker 1: investing in it, and the federal government can can, as 649 00:38:33,000 --> 00:38:35,759 Speaker 1: you said, help jump start that. All right, Since you're 650 00:38:35,760 --> 00:38:38,160 Speaker 1: an expert in water, I I need you to admit 651 00:38:38,239 --> 00:38:43,439 Speaker 1: something on public radio UM right now that anyone who 652 00:38:43,440 --> 00:38:45,360 Speaker 1: grew up in New York and has traveled to Florida 653 00:38:45,440 --> 00:38:49,400 Speaker 1: knows New York City has the best tasting water, doesn't it. UM. 654 00:38:49,440 --> 00:38:53,319 Speaker 1: I've been told that we have some places we might 655 00:38:53,360 --> 00:38:56,560 Speaker 1: give you, uh, we might give you a taste steff 656 00:38:56,600 --> 00:39:01,719 Speaker 1: to run for the money. Really where oh um, I'm 657 00:39:01,719 --> 00:39:03,680 Speaker 1: trying to think where we've won awards. I know we 658 00:39:04,000 --> 00:39:06,480 Speaker 1: every states generally have a best Tasting I think we 659 00:39:06,600 --> 00:39:10,560 Speaker 1: wore may have warn Yeah, yeah, we have the best 660 00:39:10,600 --> 00:39:15,800 Speaker 1: tasting awards. Um, all matter. I guess of Palette, New York, certainly, 661 00:39:16,040 --> 00:39:19,080 Speaker 1: uh certainly was strong because it was an upland source. 662 00:39:19,200 --> 00:39:23,040 Speaker 1: So uh, I guess a lot of people would uh 663 00:39:23,480 --> 00:39:26,960 Speaker 1: would support your conclusion. I think we're going to leave it. 664 00:39:26,960 --> 00:39:30,480 Speaker 1: They're very diplomatic. Well done. Gary now Mick is the 665 00:39:30,560 --> 00:39:35,680 Speaker 1: vice president of engineering for American Water and also a 666 00:39:35,880 --> 00:39:39,640 Speaker 1: pretty good water taster. I would imagine h absolutely has 667 00:39:39,680 --> 00:39:42,160 Speaker 1: the best aging water, I mean, compared to Florida. Certainly. 668 00:39:45,760 --> 00:39:48,279 Speaker 1: Thanks for listening to the Bloomberg P and L podcast. 669 00:39:48,600 --> 00:39:52,520 Speaker 1: You can subscribe and listen to interviews at Apple Podcasts, SoundCloud, 670 00:39:52,640 --> 00:39:56,080 Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm 671 00:39:56,120 --> 00:40:00,000 Speaker 1: on Twitter at pim Fox, I'm on Twitter at Lisa 672 00:40:00,000 --> 00:40:02,400 Speaker 1: I'm all it's one before the podcast. You can always 673 00:40:02,440 --> 00:40:04,480 Speaker 1: catch us worldwide on Bloomberg Radio.