1 00:00:03,360 --> 00:00:06,840 Speaker 1: This is Bloomberg Surveillance. If you look at the percentage 2 00:00:06,840 --> 00:00:08,880 Speaker 1: of what's bought online, it's still small. It's about ten 3 00:00:08,920 --> 00:00:11,360 Speaker 1: percent in the US today, and so I think it's 4 00:00:11,400 --> 00:00:14,120 Speaker 1: more and more people are enlightened to the benefit of 5 00:00:14,320 --> 00:00:16,919 Speaker 1: e commerce. Amazon is going to continue to gain. Shared 6 00:00:17,000 --> 00:00:20,759 Speaker 1: exports are important, but certainly they're far more important for 7 00:00:20,880 --> 00:00:23,119 Speaker 1: Europe than they are for North America. One of the 8 00:00:23,160 --> 00:00:25,040 Speaker 1: reasons why I think the economy has been a bit 9 00:00:25,079 --> 00:00:28,400 Speaker 1: more resilient is because we're left dependent on experts with 10 00:00:28,520 --> 00:00:32,159 Speaker 1: history basically shows is that as you approach November and 11 00:00:32,200 --> 00:00:35,879 Speaker 1: as it becomes increasingly clear who's going to win, markets 12 00:00:35,880 --> 00:00:37,920 Speaker 1: tend to calm down and they tend to take on 13 00:00:38,080 --> 00:00:42,120 Speaker 1: a longer time horizon. Bloomberg Surveillance your link to the 14 00:00:42,159 --> 00:00:47,600 Speaker 1: world of economics, finance, and investment. On Bloomberg Radio, Good Morning, 15 00:00:47,640 --> 00:00:49,680 Speaker 1: I might com McKey along with Tom Keene. It is 16 00:00:49,760 --> 00:00:53,520 Speaker 1: seven am on Wall Street, six am in Madison, Milwaukee, 17 00:00:53,560 --> 00:00:57,600 Speaker 1: and Sheboygan Tank Cruiz embarrasses Donald Trump and Bernie Sanders 18 00:00:57,680 --> 00:01:00,880 Speaker 1: Jounpson's Hillary Clinton in the Wisconsin primary. And he's question 19 00:01:00,960 --> 00:01:05,160 Speaker 1: this morning is doesn't matter. One question we will address today. 20 00:01:05,400 --> 00:01:07,840 Speaker 1: It is noon in Dublin, where it appears Fiser will 21 00:01:07,880 --> 00:01:12,600 Speaker 1: not be headquartered. Fiser has called off its deal with Allerghan, 22 00:01:13,280 --> 00:01:17,360 Speaker 1: both companies seeing some market reaction. Fiser shares up seven 23 00:01:17,360 --> 00:01:21,520 Speaker 1: tenths this morning. Alegan By down by the same amountain 24 00:01:21,959 --> 00:01:25,160 Speaker 1: early trading, but for the most part, equities are higher 25 00:01:25,200 --> 00:01:28,000 Speaker 1: around the world. The stock six hundred is about a 26 00:01:28,080 --> 00:01:31,000 Speaker 1: point higher two tenths of eight percent. The docks is 27 00:01:31,280 --> 00:01:33,840 Speaker 1: UH right now in his turn lower. I'm sorry not 28 00:01:34,160 --> 00:01:36,880 Speaker 1: that's the exception to the rule thirty two points three 29 00:01:36,920 --> 00:01:41,280 Speaker 1: tenths of eight percent. We are seeing futures higher in 30 00:01:41,319 --> 00:01:43,959 Speaker 1: the US after two down days, although they've lost some 31 00:01:44,000 --> 00:01:46,479 Speaker 1: altitude in the last half hour. So SMP features off 32 00:01:46,480 --> 00:01:49,160 Speaker 1: By is up by four points two tenths of eight percent. 33 00:01:49,200 --> 00:01:52,280 Speaker 1: Now even he's up by twenty four a tenth that NASDAC. 34 00:01:52,320 --> 00:01:55,640 Speaker 1: Even he's eight points higher, about two tenths on the day. 35 00:01:55,720 --> 00:01:58,560 Speaker 1: Bond yields are higher this morning one point seven four 36 00:01:58,640 --> 00:02:02,200 Speaker 1: for your tenure, the five year one point one nine percent, 37 00:02:02,360 --> 00:02:06,160 Speaker 1: and seventy four basis points for the two year. Note. 38 00:02:06,480 --> 00:02:10,520 Speaker 1: By the way, the yen uh is trading near seventeen 39 00:02:10,600 --> 00:02:13,440 Speaker 1: year high one ten twenty nine we get the FEDS 40 00:02:13,560 --> 00:02:17,600 Speaker 1: March meeting minutes this afternoon, not expected to tell us much. Uh. 41 00:02:18,040 --> 00:02:20,240 Speaker 1: We already have had so many FED speakers telling us 42 00:02:20,240 --> 00:02:23,280 Speaker 1: what they thought of the meeting. Uh. We are one 43 00:02:23,520 --> 00:02:26,079 Speaker 1: uh and now going to take a quick look at 44 00:02:26,520 --> 00:02:30,840 Speaker 1: this Fighter and alegand deal that isn't happening. It was 45 00:02:30,880 --> 00:02:33,960 Speaker 1: all set to happen until the administration came out with 46 00:02:34,000 --> 00:02:38,920 Speaker 1: new rules uh blocking making it more difficult to do inversions. 47 00:02:39,160 --> 00:02:42,000 Speaker 1: Cities Global head of m and A co head Peter 48 00:02:42,120 --> 00:02:45,640 Speaker 1: Tay is with us here in studio. Basically, what the 49 00:02:45,639 --> 00:02:49,120 Speaker 1: administration says is you have to you can only buy 50 00:02:49,120 --> 00:02:52,000 Speaker 1: a company that's a quarter of your size, But if 51 00:02:52,080 --> 00:02:55,640 Speaker 1: companies have been involved in previous deals, then you can't 52 00:02:55,680 --> 00:02:58,440 Speaker 1: count that as as part of the thing. Uh. Does 53 00:02:58,480 --> 00:03:01,880 Speaker 1: this have implications significant beyond the fiser alec ideal because 54 00:03:01,880 --> 00:03:04,840 Speaker 1: Alegan had rolled up a number of companies. Yeah, that's right. Um, 55 00:03:05,000 --> 00:03:08,440 Speaker 1: there's there's no question that that that the that the 56 00:03:08,520 --> 00:03:13,239 Speaker 1: new proposed legislation is is going to continue what I 57 00:03:13,280 --> 00:03:17,120 Speaker 1: would characterize as as a fairly strong anti inversion rhetoric 58 00:03:17,760 --> 00:03:21,079 Speaker 1: off the hill. Um, that no doubt will have a 59 00:03:21,160 --> 00:03:25,000 Speaker 1: chilling effect on these types of transactions, the specific the 60 00:03:25,080 --> 00:03:28,120 Speaker 1: specific proposal which you're referring to, the sort of anti 61 00:03:28,360 --> 00:03:33,840 Speaker 1: serial inverter UH proposal. It may indeed have an effect 62 00:03:33,880 --> 00:03:36,920 Speaker 1: on on particularly in areas like pharma where we've seen 63 00:03:36,960 --> 00:03:41,120 Speaker 1: significant roll ups or in consolidation within the industry, But 64 00:03:41,360 --> 00:03:44,080 Speaker 1: I don't think that that you take a look at 65 00:03:44,160 --> 00:03:47,600 Speaker 1: at a specific piece of it. I think the totality 66 00:03:47,640 --> 00:03:50,800 Speaker 1: of the anti inversion rhetoric is really what's what's going 67 00:03:50,840 --> 00:03:54,480 Speaker 1: to have that chilling effect? And and there's no question 68 00:03:54,520 --> 00:03:56,240 Speaker 1: that we're going to see a slowdown in these types 69 00:03:56,240 --> 00:03:58,800 Speaker 1: of deals. Well is it a chilling effect or a freeze? 70 00:03:58,880 --> 00:04:03,040 Speaker 1: Because we have had people complain about inversions and the 71 00:04:03,080 --> 00:04:06,960 Speaker 1: Treasury Department issue regulations for a number of years now, 72 00:04:07,000 --> 00:04:08,800 Speaker 1: and the lawyers always come back with another way to 73 00:04:08,800 --> 00:04:11,960 Speaker 1: get around well, I think I think that the important 74 00:04:11,960 --> 00:04:14,720 Speaker 1: thing for us to bear in mind is is UH 75 00:04:14,880 --> 00:04:18,600 Speaker 1: companies will continue, presumably to act within the rules that 76 00:04:18,640 --> 00:04:20,839 Speaker 1: are proposed to them and are given to them, and 77 00:04:20,839 --> 00:04:23,080 Speaker 1: and to the extent that the that the playing field 78 00:04:23,120 --> 00:04:25,200 Speaker 1: is defined in a certain way, I think companies are 79 00:04:25,200 --> 00:04:28,440 Speaker 1: going to work to maximize value and maximizing value for 80 00:04:28,480 --> 00:04:32,440 Speaker 1: their shareholders. Does absolutely mean avoiding paying tax to the 81 00:04:32,440 --> 00:04:34,839 Speaker 1: extent that they can within the rules that are put 82 00:04:34,880 --> 00:04:37,240 Speaker 1: before them. Peter Y where the city of David mel 83 00:04:37,279 --> 00:04:40,120 Speaker 1: passed with us as well from Semia Global Bloomberg Surveillance. 84 00:04:40,160 --> 00:04:43,560 Speaker 1: This morning brought you buy Investco. Investco believes it's time 85 00:04:43,600 --> 00:04:48,000 Speaker 1: to bench the benchmarks to consider active management and factor 86 00:04:48,080 --> 00:04:52,279 Speaker 1: based strategies. Find out more and investco dot com slash 87 00:04:52,839 --> 00:04:56,760 Speaker 1: high conviction. Invest call i m v s CEO Investco 88 00:04:57,200 --> 00:05:00,600 Speaker 1: dot com slash high conviction. This is great. We've got 89 00:05:00,600 --> 00:05:03,000 Speaker 1: a banker, a guy doing m and as with us 90 00:05:03,040 --> 00:05:06,360 Speaker 1: and also uh, David mal passed with a terrific view 91 00:05:06,400 --> 00:05:11,039 Speaker 1: of financial and economic history. David Peter Tag's world is 92 00:05:11,080 --> 00:05:14,800 Speaker 1: like chapter twenty two in every general economic book. It's like, well, 93 00:05:14,800 --> 00:05:17,320 Speaker 1: we really don't want to talk about finance, but it's 94 00:05:17,360 --> 00:05:20,640 Speaker 1: over there. What's the good that comes out of mergers 95 00:05:20,720 --> 00:05:26,440 Speaker 1: and acquisitions for an economy and society? So financial transactions 96 00:05:26,520 --> 00:05:29,320 Speaker 1: make a lot of sense when they're driven by growth 97 00:05:29,320 --> 00:05:32,280 Speaker 1: and by synergy. We're talking about that on your excellent 98 00:05:32,360 --> 00:05:35,720 Speaker 1: TV show at six am. This is a radio shows. Okay, 99 00:05:37,080 --> 00:05:44,000 Speaker 1: who gets who gets credits? Michael McKey is a star. Uh, 100 00:05:44,440 --> 00:05:48,640 Speaker 1: so so synergy is really important in transactions. What we 101 00:05:48,760 --> 00:05:51,640 Speaker 1: worry about, though, is if you have an artificial environment, 102 00:05:51,640 --> 00:05:53,440 Speaker 1: then you get more and more of them done by 103 00:05:53,440 --> 00:05:57,679 Speaker 1: financial engineering. So I guess my thought is consolidation makes 104 00:05:57,680 --> 00:06:00,520 Speaker 1: sense in a growing world. But what we have right 105 00:06:00,560 --> 00:06:04,360 Speaker 1: now is consolidations taking place in a flat world. And 106 00:06:04,400 --> 00:06:08,760 Speaker 1: that's more concerning. Uh. Would you agree that we're seeing 107 00:06:08,880 --> 00:06:12,880 Speaker 1: less of an effort, to um peter too, to put 108 00:06:12,920 --> 00:06:17,680 Speaker 1: companies together for strategic reasons than for just trying to 109 00:06:17,680 --> 00:06:21,720 Speaker 1: prop up the stock prices. I actually I disagree with that. UM. 110 00:06:22,240 --> 00:06:26,640 Speaker 1: I think that certainly, the as as we are communicating 111 00:06:26,680 --> 00:06:29,800 Speaker 1: with boards and as we are advising boards, we start 112 00:06:29,880 --> 00:06:34,039 Speaker 1: with the fundamental premise of does a particular transaction have 113 00:06:34,160 --> 00:06:38,440 Speaker 1: a strategic merit? And and David quite correctly gripped that 114 00:06:38,520 --> 00:06:41,800 Speaker 1: as being central to the argument for any transaction, and 115 00:06:41,839 --> 00:06:45,000 Speaker 1: I think, I think, frankly that is the basis on 116 00:06:45,040 --> 00:06:48,120 Speaker 1: which good deals are are are put together. But the 117 00:06:48,160 --> 00:06:52,279 Speaker 1: linkagure the red butts my first day, folks, The linkagere 118 00:06:52,320 --> 00:06:56,720 Speaker 1: peter between finance and economics at the revenue line is 119 00:06:56,760 --> 00:07:00,839 Speaker 1: that animal spirit of unit growth and price stability, or 120 00:07:00,880 --> 00:07:03,760 Speaker 1: even a little bit of inflation, the goose machine and oil, 121 00:07:03,800 --> 00:07:06,880 Speaker 1: the machine greasing machine, and on we go. Where are 122 00:07:06,960 --> 00:07:11,960 Speaker 1: we right now transaction to transaction given nominal GDP in 123 00:07:12,240 --> 00:07:15,120 Speaker 1: unit challenges? I mean, is it a different M and 124 00:07:15,200 --> 00:07:18,440 Speaker 1: A this year, next year, the year following than previous 125 00:07:18,560 --> 00:07:22,760 Speaker 1: years because nominal GDP isn't what it used to be. Well, 126 00:07:22,760 --> 00:07:25,440 Speaker 1: I think, and we talked about this a little earlier 127 00:07:25,480 --> 00:07:27,920 Speaker 1: this morning. I think that the that the drive for 128 00:07:28,000 --> 00:07:31,400 Speaker 1: growth and the imperative for growth which investors are demanding 129 00:07:31,480 --> 00:07:34,800 Speaker 1: from corporate and demanding is the operative word. They are 130 00:07:34,840 --> 00:07:38,840 Speaker 1: absolutely demanding growth and it's and it's a change from 131 00:07:38,840 --> 00:07:41,600 Speaker 1: where we came out of the global financial crisis, where 132 00:07:41,640 --> 00:07:47,040 Speaker 1: investors were demanding security, return of capital, deleveraging, cost cutting. 133 00:07:47,440 --> 00:07:50,560 Speaker 1: Today that demand has shifted in investors are looking for 134 00:07:50,560 --> 00:07:54,480 Speaker 1: companies to grow, and as they explore the opportunities to grow, 135 00:07:54,640 --> 00:07:56,760 Speaker 1: M and A has to be part of I think, folks, 136 00:07:56,880 --> 00:08:00,040 Speaker 1: this is fabulous you're hearing I mean demanding. There's no 137 00:08:00,160 --> 00:08:03,120 Speaker 1: mincing words here. People want the growth if the if 138 00:08:03,160 --> 00:08:04,600 Speaker 1: the economy is not going to give it to him. 139 00:08:04,640 --> 00:08:08,440 Speaker 1: David Peter mentioned that Canadian pension fund DOT that's involved 140 00:08:08,760 --> 00:08:12,200 Speaker 1: UH in the Glencore transaction. So so you've got a 141 00:08:12,280 --> 00:08:16,920 Speaker 1: desperation by people who have long liabilities, meaning pension funds 142 00:08:17,480 --> 00:08:19,960 Speaker 1: have to have growth over a long period of time, 143 00:08:20,240 --> 00:08:24,400 Speaker 1: and so they're they're willing to They're they're they're looking 144 00:08:24,520 --> 00:08:28,200 Speaker 1: for these transactions. So my concern is, if you don't 145 00:08:28,240 --> 00:08:30,920 Speaker 1: have enough nominal growth in the world, you're not going 146 00:08:30,960 --> 00:08:35,040 Speaker 1: to get the returns you need to meet your liability stream. 147 00:08:35,360 --> 00:08:38,160 Speaker 1: Let me quickly ask Peter while we have them here 148 00:08:38,520 --> 00:08:40,800 Speaker 1: in those story on Bloomberg today about how the Justice 149 00:08:40,800 --> 00:08:43,800 Speaker 1: Department is getting more active in anti trust. Put it 150 00:08:43,840 --> 00:08:46,600 Speaker 1: all together, and is it just gonna be harder to 151 00:08:46,760 --> 00:08:50,120 Speaker 1: sell companies on the idea of M and A or 152 00:08:50,160 --> 00:08:51,760 Speaker 1: is it just going to change the structure of the 153 00:08:51,800 --> 00:08:53,959 Speaker 1: deal such that you're gonna have to put a lot 154 00:08:54,000 --> 00:08:57,360 Speaker 1: more earnest money basically break up in breakup fees because 155 00:08:57,400 --> 00:08:59,600 Speaker 1: the risks are so much higher. Well, I think I 156 00:08:59,640 --> 00:09:03,920 Speaker 1: think the as as a as a practitioner in this space, 157 00:09:03,960 --> 00:09:07,160 Speaker 1: who's who's been doing it for twenty five or thirty years. 158 00:09:07,600 --> 00:09:11,760 Speaker 1: We've seen rules change both in a direction which makes 159 00:09:11,760 --> 00:09:14,880 Speaker 1: transactions easier, in directions which make them harder. Uh, the 160 00:09:14,960 --> 00:09:20,040 Speaker 1: regulatory environment whether it's antitrust, whether it's anti inversion, whether 161 00:09:20,200 --> 00:09:24,080 Speaker 1: it is UH the FCC, whether it's cifious. All of 162 00:09:24,120 --> 00:09:27,480 Speaker 1: these various elements come get brought to bear on a 163 00:09:27,480 --> 00:09:31,360 Speaker 1: particular transaction and a particular company. We'll work within all 164 00:09:31,360 --> 00:09:33,760 Speaker 1: of that. I'm sorry, Mike, I just want to get 165 00:09:33,800 --> 00:09:36,600 Speaker 1: this and I think it's critically important for our understanding 166 00:09:36,600 --> 00:09:39,280 Speaker 1: the City Group. Define the new globalization for City Group. 167 00:09:39,640 --> 00:09:43,320 Speaker 1: You're one of our our global platforms. There's a changing 168 00:09:44,080 --> 00:09:46,760 Speaker 1: big too big de fail banking millia. Right now, define 169 00:09:47,040 --> 00:09:50,720 Speaker 1: global reach for City Group right now. Group. City Group 170 00:09:50,880 --> 00:09:53,840 Speaker 1: is uh AS as we all know, is present in 171 00:09:54,040 --> 00:09:56,720 Speaker 1: well over a hundred countries. We we have an enormous 172 00:09:56,720 --> 00:10:00,600 Speaker 1: global fit print, but it is reflective of our client base. 173 00:10:00,920 --> 00:10:05,160 Speaker 1: Our clients are equally global, and that that includes US 174 00:10:05,240 --> 00:10:08,280 Speaker 1: clients with global operations, but it includes we have Chinese 175 00:10:08,320 --> 00:10:10,960 Speaker 1: clients who are who are trying to do transactions and 176 00:10:11,080 --> 00:10:13,600 Speaker 1: who we are assisting in a variety of different ways. 177 00:10:13,920 --> 00:10:18,120 Speaker 1: We think about the economy as being a global angy 178 00:10:18,200 --> 00:10:21,160 Speaker 1: and and and something we're participating in, not just from you. 179 00:10:21,400 --> 00:10:24,000 Speaker 1: Don't be a stranger, Mike. We gotta do a Hamilton's program. 180 00:10:24,040 --> 00:10:27,120 Speaker 1: We gotta have Peter Tagan with Bob Sinch. Okay, we 181 00:10:27,400 --> 00:10:30,200 Speaker 1: can describe Lake Moraine and hey, I'm maybe get Mike 182 00:10:30,240 --> 00:10:33,160 Speaker 1: Milbury to call in from Colgod. That would thank you 183 00:10:33,200 --> 00:10:36,559 Speaker 1: so much. Uh. With City Group emergers and acquisitions, we 184 00:10:36,600 --> 00:10:39,679 Speaker 1: will continue with David mal passed. Much to talk about, 185 00:10:39,679 --> 00:10:44,439 Speaker 1: particularly with our Central Bank futures up fo the yield 186 00:10:44,480 --> 00:10:47,960 Speaker 1: one point seven four percent. I'm watching yen one point 187 00:10:48,000 --> 00:10:53,440 Speaker 1: three three stronger yet. Time now to check in with 188 00:10:53,440 --> 00:10:56,360 Speaker 1: Michael Barr and get the latest world in national headline. Michael, Mike, Tom, 189 00:10:56,400 --> 00:10:59,480 Speaker 1: thank you very much, Ted Cruz and Bernie Sanders one 190 00:10:59,559 --> 00:11:01,920 Speaker 1: in the whisk aunts in primary. Now. The candidates have 191 00:11:01,960 --> 00:11:04,520 Speaker 1: their eyes on the Delegate Rich New York primary on 192 00:11:04,640 --> 00:11:07,960 Speaker 1: April nineteen. It will be a chance for front runners 193 00:11:08,000 --> 00:11:10,840 Speaker 1: Donald Trump and Hillary Clinton to bounce back from last 194 00:11:11,000 --> 00:11:14,679 Speaker 1: night's losses. Trump is campaigning tonight on Long Island. San 195 00:11:14,720 --> 00:11:16,760 Speaker 1: Francisco is about to become the first place in the 196 00:11:16,800 --> 00:11:20,560 Speaker 1: country to require businesses to provide fully paid leave for 197 00:11:20,760 --> 00:11:24,719 Speaker 1: new parents. The measure, approved unanimously by the Board of Supervisors, 198 00:11:24,720 --> 00:11:27,560 Speaker 1: will give new mothers and fathers six weeks of fully 199 00:11:27,600 --> 00:11:31,280 Speaker 1: paid time off. Idaho's governor veto legislation that would have 200 00:11:31,360 --> 00:11:35,160 Speaker 1: expressly permitted the use of the Bible in public school instruction. 201 00:11:35,520 --> 00:11:38,400 Speaker 1: Global News twenty four hours a day, powered by our 202 00:11:38,480 --> 00:11:41,920 Speaker 1: twenty four hundred journalists and more than one fifty bureaus 203 00:11:41,920 --> 00:11:45,160 Speaker 1: from around the world. I'm Michael Barr, Mike, Tom and Michael. 204 00:11:45,160 --> 00:11:48,920 Speaker 1: Thanks so much. Oil West Texas thirty seven exactly up 205 00:11:48,920 --> 00:11:51,360 Speaker 1: a dollar eleven. It's a nice bounce off the challenges 206 00:11:51,400 --> 00:11:56,440 Speaker 1: of yesterday. Brent crude four. So watching oil very much 207 00:11:56,440 --> 00:12:01,359 Speaker 1: this morning. A goal twelve from New York with David Malpass. 208 00:12:01,480 --> 00:12:08,079 Speaker 1: This is Bloomberg's Surveillance. Bloomberg Surveillance brought to by scn B. 209 00:12:08,240 --> 00:12:10,520 Speaker 1: The Bank for Business is on the mood up. Are 210 00:12:10,559 --> 00:12:12,640 Speaker 1: you looking for the right banking partner? Go to scnb 211 00:12:12,760 --> 00:12:15,160 Speaker 1: dot com to learn more. Now open in Long Island City. 212 00:12:15,200 --> 00:12:16,920 Speaker 1: Get your business moving with s CNB.