Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along
Speaker 1: with Jonathan Ferrell and Lisa Brownowitz. Daily we bring you
Speaker 1: insight from the best and economics, finance, investment, and international relations.
Speaker 1: Find Bloomberg Surveillance on Apple, podcast, SoundCloud, Bloomberg dot Com,
Speaker 1: and of course on the Bloomberg terminal. Why have we
Speaker 1: not seen more fallout, especially in such a jderary market, Peter.
Speaker 1: She has been writing a lot about that head of
Speaker 1: macro strategy at Academy Securities, and we're so glad you're
Speaker 1: actually in studio with us, which is fabulous. It is
Speaker 1: wonderful to have you on this pre Thanksgiving week, Peter.
Speaker 1: How much are you seeing, uh, some sort of I
Speaker 1: don't know, whales, and how much you're seeing something where
Speaker 1: it's a realistic pricing action of institutions having fully adopted
Speaker 1: a crypto asset, even if it does lose favor to
Speaker 1: some degree. I think we have one more big leg
Speaker 1: down in crypto. I think we're going to see some
Speaker 1: selling off in bitcoin. I think of the things that
Speaker 1: supported it recently are the fact that there are a
Speaker 1: lot of whales who have invested interest in keeping it
Speaker 1: higher and there's all this talk about bitcoin maximalist, right,
Speaker 1: so there is a theory that okay, ft T the
Speaker 1: tokens that was where a lot of the trouble was
Speaker 1: maybe bitcoins, the quote unquote safe part of crypto. I
Speaker 1: think that narrative is going to get hurt a little bit.
Speaker 1: Um and all the stuff that's been going on with
Speaker 1: a great scale trust so GBTC has been feeding into
Speaker 1: that a little bit. So people I believe have been
Speaker 1: selling that to buy bitcoin. I think that's going to
Speaker 1: turn out to be a mistake as well. Why isn't
Speaker 1: this a broader market story? How can this be so
Speaker 1: contained given that this story really grew up in the
Speaker 1: era of free money. So I think earlier this year
Speaker 1: it's a great question, but I think earlier this year
Speaker 1: they were kind of tied together because you had a
Speaker 1: lot of people who are invested in crypto, they're invested
Speaker 1: in disruptive stocks. They all were doing it on margins,
Speaker 1: so every time one sneeze it would, you know, drag
Speaker 1: down everything else that got shaken out a little bit.
Speaker 1: So we're better off right now. I think the next
Speaker 1: leg of this is going to be, Wow, what happens
Speaker 1: to the economy. You start looking at the amount of
Speaker 1: money that was being spent by even FTX on advertising
Speaker 1: crypto as a whole. Right, I think this is going
Speaker 1: to feed into the economy. I think the wealth effect
Speaker 1: is real. Right this time we've lost three trillion dollars
Speaker 1: down to just under a trillion, Right, there's been huge
Speaker 1: wealth effects. I think this is going to bleed into
Speaker 1: the economy. Generally, that's gonna be bad. I think it's
Speaker 1: going to turn out to be good for energy usage though, Peter,
Speaker 1: thanks so much for coming in. You have an August firm,
Speaker 1: hugely conservative Academy and security as a former Adimals and
Speaker 1: the like as well. They hang on every bit of
Speaker 1: when Sheer publishes on rates risk and Taylor Swift, how
Speaker 1: that sell? You know, we got to do some clickbait too,
Speaker 1: even in our bid, because well, why do we sell
Speaker 1: bitcoin to a conservative shop like Academy. These people are
Speaker 1: gonna say it's unregulated, it can't be regulated, it's foreign.
Speaker 1: How do you sell bitcoin is a legit thing to
Speaker 1: a bunch of conservative people Academy. So unfortunately I've been
Speaker 1: fairly negative on it. But I think we're having these
Speaker 1: conversations where do we step in, When does it get
Speaker 1: interesting for our firm to explore it. It's really gonna
Speaker 1: down to regulation. Do the regulators come out and create
Speaker 1: an environment that you can feel comfortable with? Right and
Speaker 1: right now? It's just not there. One of my big
Speaker 1: takeaways has been for the last year, you talk something
Speaker 1: as simple as where something domiciled? And where are you
Speaker 1: and I are in the same page on this? Ali
Speaker 1: Baba is hanging out the Cayman Islands trying to play
Speaker 1: by a different rule book. I'm gonna defend Gary Gunsler
Speaker 1: here right now? What does he regulate? Where's the domicile?
Speaker 1: I think that's really the key issue, right You've got
Speaker 1: to have some sort of domicile here. And the big
Speaker 1: question I think a lot of people are talking about,
Speaker 1: even whether it's these gray sale trust is where is
Speaker 1: the bitcoins? We talk about spotty tfs blah blah blah. Right,
Speaker 1: It's like, how do you confirm on a daily basis
Speaker 1: that what you think you hold in the crypto world
Speaker 1: is legitimately there without maybe publishing it and exposing yourself
Speaker 1: to thefter hacking. So I think that's really the key
Speaker 1: is most other assets you understand whether you own it,
Speaker 1: whether it's an equity, whether it's gold, you can pretty
Speaker 1: easily prove it. That's been the hard part with crypto.
Speaker 1: I think that's what's going to have to get to
Speaker 1: the heart of regulation is how do we verify this?
Speaker 1: How do we get comfortable that we are auditing something
Speaker 1: and regulating something that's actually there. Neil Kashkari has been
Speaker 1: talking about how this is just a ponzi scheme. He
Speaker 1: doesn't really think that there's any they're they're here, and
Speaker 1: he's been very vocal about that on Twitter and in lecturers.
Speaker 1: How much is the banking industry leveraged to the bitcoin
Speaker 1: and and and frankly to the crypto story, not necessarily
Speaker 1: by borrowing money to invest in crypto, but in building
Speaker 1: up teams of people designed to trade it, designed to
Speaker 1: invest in I don't think the banks have really put
Speaker 1: that much effort into it. I think they're building out,
Speaker 1: but it's a small part of their business. The other
Speaker 1: part of this I do think people made a mistake
Speaker 1: is every time some bank announced they were doing something
Speaker 1: on crypto, everyone right, oh, this is great, they're adopting.
Speaker 1: If they're adopting, no, no, banks are very smart right.
Speaker 1: If there's a bit offered to be made, if there's
Speaker 1: some trading revenue be made, they're going to get involved.
Speaker 1: That's not a commitment to it. So I think banks
Speaker 1: can pull back if this doesn't work out. And to me,
Speaker 1: bitcoin is always about adoption, the rate of adoption. When
Speaker 1: you want to get bullish on it, you see adoption
Speaker 1: coming up. I just don't see it going up anytime soon.
Speaker 1: In fact, I see it dropping is more and more
Speaker 1: people question why they want to be in this space.
Speaker 1: What's your call for two thousand three, Let's get out
Speaker 1: in front of your year ahead report? Uh, Taylor swift
Speaker 1: into it? I'm not sure about that. I think crypto
Speaker 1: going down will be subten thousand on bitcoin calling subten
Speaker 1: thou definitely. I think that actually potentially happens even this year.
Speaker 1: I like rates, though, I think yields are actually probably
Speaker 1: the easiest trade. I want to be long yields right now.
Speaker 1: I think treasuries are going to rally. I think the
Speaker 1: economy is rolling over, the data is rolling over, and
Speaker 1: as Hockey says, the Fed wants to talk, the markets
Speaker 1: are starting not to listen to it. So I love
Speaker 1: owning bonds here well, but we were talking to Carl
Speaker 1: Weinberg earlier and he says, quantitative tightening. What about quantitative tightening?
Speaker 1: So to me, quantitative tightening is a little bit the
Speaker 1: opposite of quantitative easing, in fact, almost exact opposite, and
Speaker 1: I find quantitative easing easier to explain. It's like if
Speaker 1: you have these Newton cradle right where you drop this
Speaker 1: one ball and stuff shoots out at the end. So
Speaker 1: that's what happened. It shoots out and where it really
Speaker 1: exposed itself at the riskiest end of the spectrum, right,
Speaker 1: So everything the person winds up having to make a choice.
Speaker 1: I have to either buy longer duration assets, riskier assets,
Speaker 1: less liquid assets, and it really comes out at the
Speaker 1: far end. That's why I think crypto did so well,
Speaker 1: all these disruptive stocks. So when it comes back in,
Speaker 1: it's not going to express itself in yields. It's going
Speaker 1: to be in the riskiest assets. I think stocks can
Speaker 1: still lag from here and it's not going to express
Speaker 1: itself regardless of what we're doing on the quantitative tightening
Speaker 1: and the bond markets up yield down. Stocks don't play no,
Speaker 1: I think not. I think maybe we get a little
Speaker 1: surge in stocks um after we get through this cryptodebacco
Speaker 1: where people get back to comfortable. Oh, lower yields is
Speaker 1: good for stocks, then I think the reality is gonna
Speaker 1: be no, No, yields are going lower because the economy
Speaker 1: has rolled over. We've done too much. We have these problems,
Speaker 1: and quantitative tightening I think is more impactful on equities
Speaker 1: and risk assets than spawns. I mean, never more came
Speaker 1: out Taylor Swift with Jack getting off in the National.
Speaker 1: I mean what they did Peter during the pandemic. She
Speaker 1: just said I'm not I'm not laying low for the pandemic.
Speaker 1: And they just created and creating created. Look at the
Speaker 1: payoff now, it's been phenomenal. I think one question that's
Speaker 1: been coming up directly to our businesses what does this
Speaker 1: do for EM and A activity. Right, We've already had
Speaker 1: DC that doesn't like M and A activity, And now
Speaker 1: all of a sudden you've got Live Nation these companies,
Speaker 1: you know, getting reported on. I think it's going to
Speaker 1: be interesting and I think that's gonna be a headwind
Speaker 1: for M and A next year. We're really prepared to
Speaker 1: talk about Taylor Swift. Is that really what we're doing here.
Speaker 1: I wasn't that prepared, but I figured out the influence
Speaker 1: of the national on What she did here acoustically was stunning.
Speaker 1: I mean, I mean anthonas my hero, but you know,
Speaker 1: I'm not an expert in Taylor Swift. I will say
Speaker 1: that the controversy over some of the ticket sales is
Speaker 1: going to be something that song alicit off fairs. Moment
Speaker 1: I heard it, boom, Taylor Swift. Oh, I'm not actually share.
Speaker 1: Thank you so much with Academy Securities right now. And
Speaker 1: if you're taking notes on the equity market, get out
Speaker 1: the pad, get out the paper, because Katie Kaminski, she
Speaker 1: researched strategist that Alpha simplex is a turtle. She is
Speaker 1: a turtle trader from way back, which is trend matters. Katie.
Speaker 1: Everybody would kill for your performance this year. Still up,
Speaker 1: what is the trend forward or our trends breaking? Now? Yeah,
Speaker 1: it's tom. It's been a phenomenal year for trend in
Speaker 1: a year where things are very uncertain. Um. What we
Speaker 1: have noticed though, is that we're going through an inflection
Speaker 1: point right now like we saw earlier this summer. We're
Speaker 1: starting to see that shorter term signals and longer term
Speaker 1: signals are kind of at odds UM, and so I
Speaker 1: think we, just like the rest of the market, are
Speaker 1: looking for a pivot to the next big trend. Uh
Speaker 1: so far um, You're looking at a day like today,
Speaker 1: the dollar is coming back a little bit, that may
Speaker 1: not be over UM, and of course short bond signals
Speaker 1: are still there in the data. Well, Katie, can you
Speaker 1: elaborate on that, this sort of pivot point that you
Speaker 1: see in terms of short term and longer term signals?
Speaker 1: What is that pivoting us too? Right, We've come from
Speaker 1: an era where bonds have been all over the place,
Speaker 1: but we rally. Recently we saw stocks being rally both
Speaker 1: stocks and bonds rallying. What's the new pivot? What's that
Speaker 1: new reality? Well, the thing is we've really the challenge
Speaker 1: has been that we've had a mixed signal, so there's
Speaker 1: no clear signal net at this point. And that's where
Speaker 1: I say we're definitely at an inflection point. But if
Speaker 1: I had to look a little closer at what has
Speaker 1: changed the most, optimism has come into signals at a
Speaker 1: level that is consistent with what we've seen recently. So
Speaker 1: you've seen more positive signals and equities, especially around the
Speaker 1: CPI print. You're also seeing a little bit more reversion
Speaker 1: out of the dollar trade, but that's still there. So
Speaker 1: that's why I kind of said it's a balance between
Speaker 1: what do we see shorter term and longer term, and
Speaker 1: the longer term signals are still definitely saying that there's
Speaker 1: some things to worry about ahead, especially the curve, the
Speaker 1: yield curve being inverted recently. Katy, you've nailed it with
Speaker 1: bonds in particular. You went short bonds, which has been
Speaker 1: the widowmaker for so many years, and this was one
Speaker 1: of the areas where absolutely knocked it out of the
Speaker 1: park with nearly forty percent returns so far this year.
Speaker 1: How much do you buy this conviction that we're feeling
Speaker 1: in Wall Street that that's going to be the biggest
Speaker 1: area of out performance by ten year, by thirty year
Speaker 1: treasuries and you're gonna just do really well next year.
Speaker 1: So we did some research this year on bonds. It
Speaker 1: was called the short of shorting bonds. And one of
Speaker 1: the things that we need to think about if we're
Speaker 1: moving into a much more focused on rising rates and
Speaker 1: higher rates environment, is that bonds are not going to
Speaker 1: behave under inflationary pressures like they did in the past,
Speaker 1: and this year was just the first data point to
Speaker 1: show us that that's the case. And I think what
Speaker 1: has been the most fascinating to me is how we
Speaker 1: avoid thinking about long bias and so many of us
Speaker 1: are so dependent on being long bonds. We forgot what
Speaker 1: it's like to actually think about how do you deal
Speaker 1: with actually shorting bonds and how do you deal with
Speaker 1: bonds and valuation versus inflation? And I think that is
Speaker 1: going to be the key question for all investors in
Speaker 1: the next few years. What's great a trend following, folks?
Speaker 1: And this is rumored folks, Liverpool maybe up for sale
Speaker 1: John Henry, owner the Red Sox arch Turtle trader. Rumor
Speaker 1: has it Henry may sell Liverpool to Kaminski. We'll have
Speaker 1: to see on that is well. We get a lot
Speaker 1: of emails Katie when you're when you're on with us.
Speaker 1: Are moving averages helpful to trend followers? Yes, I mean
Speaker 1: I think the way we think about it, moving averages
Speaker 1: give you one way to measure the strength of a trend.
Speaker 1: These days, we use a wide range of different methods.
Speaker 1: Some of it is based on machine learning, some of
Speaker 1: it is based on different types of breakout signals. But
Speaker 1: the point is in environments where the world is very uncertain,
Speaker 1: you have to turn to what the market is doing
Speaker 1: as opposed to what it should do, because frankly, a
Speaker 1: few people actually know what it should do these days,
Speaker 1: because it's so volatile and unclear what the future is
Speaker 1: actually going to hold under this inflationary environment. Katie, thank
Speaker 1: you so much. Katie Kaminski, arguably the number one performance
Speaker 1: of Rayance Girls this year at alphason Plus. Right now,
Speaker 1: we're going to turn to some of the focus on
Speaker 1: the year ahead. One of the biggest consensus calls go
Speaker 1: along bonds. David Riley, chief of US was strategist at
Speaker 1: Blue Bay Asset Management. Here to weigh in, is this
Speaker 1: year number one as well? Ten year, thirty year, The
Speaker 1: longer the better. M Yeah. I do think it's going
Speaker 1: to be a year when duration actually pays off and
Speaker 1: it will make sense to be long duration. I'm actually
Speaker 1: more inclined to go in terms of the Treasury curve
Speaker 1: towards the five year point, and that's because I do
Speaker 1: think that it's more likely than not that the US
Speaker 1: economy goes into recession. I think we'll probably could therefore
Speaker 1: get some balls deepening in the curve. Normally you'd express
Speaker 1: that at the very short end, but we don't really
Speaker 1: know how far and how fast inflation we fall, and
Speaker 1: therefore we don't really know at what point does the
Speaker 1: FED start considering ray cards. I think the five year
Speaker 1: is probably quite a good sort of sweet spot, and
Speaker 1: with that would also be buying some high grade credit
Speaker 1: at this level as well. See he likes the five
Speaker 1: year action, That's what he was just saying right there. Well,
Speaker 1: thank you, dud. I do wonder, though, at what point
Speaker 1: you're looking at a return to the old normal, right
Speaker 1: at this idea that we're going back to an inflation
Speaker 1: that's sub two percent or even two and other people
Speaker 1: pushing back, where do you say to them, Look, we're
Speaker 1: not going to have a high inflation regime for a
Speaker 1: very long time, and bonds will be able to reassert
Speaker 1: themselves in a way that we're used to. M Well,
Speaker 1: because I do think that we are at all very
Speaker 1: close to the peak in inflation. And yeah, I think
Speaker 1: it's right to highlight just how much uncertainty we do
Speaker 1: have in terms of how far and how fast inflation
Speaker 1: falls and that's obviously very critical for the fair and
Speaker 1: other central banks, and therefore for the outlook for the
Speaker 1: BOB market. But I don't see a sort of self
Speaker 1: fulfilling or self perpetuating ways price spiral. And if you
Speaker 1: think we're going into recession, as I think we are
Speaker 1: going into not only a European but also US and
Speaker 1: global recession, UM, that's very negative and all sorts of
Speaker 1: ways and and and Saturday people are going to be
Speaker 1: losing their jobs on the back about that. But we
Speaker 1: know from experience that does bring inflation down. Inflation is
Speaker 1: going to be coming down, it's just about the pace
Speaker 1: and the magnitude of that through next year. David tell
Speaker 1: me about the value of cash here, if we're quote
Speaker 1: unquote going into a recession, is cash good or is
Speaker 1: cash trash? UM? I do think that as we go
Speaker 1: into recession, I think what is going to be of
Speaker 1: particular value is to have liquidity within portfolios. That some
Speaker 1: of that's going to come from having holdings of UM cash.
Speaker 1: But I also think it means a bias towards UM
Speaker 1: credit call fixed income, which is now giving you a yield.
Speaker 1: I mean, one of the key differences. There's a lot
Speaker 1: of differences. But one of the key differences going into
Speaker 1: three compared to when we went into two, when we
Speaker 1: went into this year, is that we're actually starting with
Speaker 1: much higher levels of yield and that's giving you an
Speaker 1: inconcussion which you otherwise wouldn't you know, didn't have at
Speaker 1: the start of two. So you have some liquidity, have
Speaker 1: some cash. I think a bias towards the more liquid securities,
Speaker 1: but I don't think it's an inviting I think that
Speaker 1: our opportunities out there for you to deploy cash. I
Speaker 1: wouldn't be holding too much care. David. We need you
Speaker 1: to get back to England around I know that's what
Speaker 1: you're really focused on. Here. We thank you for coming on.
Speaker 1: We've got people outside. There's a ticketing snare for at
Speaker 1: the stadium. I players down worldwide. But also in minute
Speaker 1: three with McGuire and answering David, somebody talks about a
Speaker 1: Stone banker of a penalty. Can I mean Phararell's not here, David,
Speaker 1: save us? What does stone barker me? You've called me
Speaker 1: out there, Tom. I'm not sure what actually means, but
Speaker 1: it sounds like it's a nailed on um penalty that
Speaker 1: has been conceded and by the way you described it,
Speaker 1: um it sounds that may have been conceded by England,
Speaker 1: which would rather be in keeping with the start that
Speaker 1: England often make two World Cup tournaments, a lot of
Speaker 1: the build up and then some disappointment when the game
Speaker 1: gets underway. Let's hope I'm wrong and let's hope it's
Speaker 1: different this time around. David Riley with piercing analysis. They're
Speaker 1: in for John Farrell as well, David Riley, Blue Bay
Speaker 1: Asset managic. Right now, we're going to stop the show.
Speaker 1: And we made a decision here at least fifteen years
Speaker 1: ago to say, yes, we do economics, financing and investment,
Speaker 1: but far more we do international relations, not knowing the
Speaker 1: world would be turned upside down as we have seen
Speaker 1: in the recent decades. Providing leadership worldwide on that has
Speaker 1: been Richard hass He's President of the Council on Foreign Relations.
Speaker 1: Full disclosure, I'm a member. When I pay my dues,
Speaker 1: I think I'm behind my dudes. Richard Hospul, Well, we'll
Speaker 1: go there another time. He is the bitcoin that payment
Speaker 1: was the bitcoin worked out. Richard hass is retiring, pulling
Speaker 1: away from truly his Counsel and Foreign Relations Richard has
Speaker 1: thank you so much for joining us so much to
Speaker 1: talk about today. Where must the Council on Foreign Relations
Speaker 1: go to lead as fractious international diplomacy. Well, Tom freshwell,
Speaker 1: I'm not retiring from anything. I'm departing the Council after
Speaker 1: twenty years, but I'm gonna stay active in the public conversation,
Speaker 1: both about this country's role in the world as well
Speaker 1: as about the future of American democracy. But I think
Speaker 1: it's healthy for institutions despite what's going on in Disney.
Speaker 1: I think it's kind of healthy for institutions every now
Speaker 1: and then to have a change in uh in leadership.
Speaker 1: I think for the Council, it's simply to continue to
Speaker 1: be a resource on a wide range of challenges, whether
Speaker 1: it's the revival of geopolitics or global issues. We are
Speaker 1: we're just finishing up a the COP twenty seven meeting
Speaker 1: in Charmel Shake, and quite honestly, I think it's almost
Speaker 1: a complete and utter, utter failure. And I also think
Speaker 1: increasingly we need to look at the relationship between America
Speaker 1: internally and America externally and whether we're ever gonna be
Speaker 1: positioned to again lead the world because this world is
Speaker 1: not going to organize itself to meet the challenges it
Speaker 1: faces without an involved and effective United States. So I
Speaker 1: think the the inbox in this field is as full
Speaker 1: as it's ever been. I agree that strongly in folks,
Speaker 1: A brief here, two hundred forty pages is Richard Hass.
Speaker 1: The bill of obligations is he, and we go in
Speaker 1: search of the will of America to move forward. Richard Hass,
Speaker 1: the new administration, the new Congress, the new presidency two
Speaker 1: years out, do they have the will to find their
Speaker 1: bill of obligations? I don't see a lot of it. Tom,
Speaker 1: I'll be honest, you know, I don't think we're off
Speaker 1: to a great start. The new Republican House of Representatives
Speaker 1: seems much more interested in politics than policy, and investigations
Speaker 1: than legislation. I think for the next two years it's
Speaker 1: going to be extraordinarily difficult for the Biden administration to
Speaker 1: get legislation passed really about anything. I think you're going
Speaker 1: to see there for an emphasis on foreign policy, where
Speaker 1: presidents traditionally have more discretion than they do on things domestic,
Speaker 1: and probably a greater emphasis on regulation on executive action
Speaker 1: again to essentially find ways to do things without requiring
Speaker 1: Congress to to join in this fractius global order. How
Speaker 1: confident are you that the US remain close to Europe,
Speaker 1: at least as close to Europe as they have traditionally
Speaker 1: basis of the recent fissures not only with respect to
Speaker 1: exactly how to deal with the energy crisis, but also
Speaker 1: with tech investments and some of the the the bills
Speaker 1: that Congress has passed so far that really focused in
Speaker 1: the US to good question is I think it's a
Speaker 1: mixed record. On one hand, if this administration, the Biden administration,
Speaker 1: stands for anything and it's a it's an alliance first
Speaker 1: foreign policy, and I think the entire management of the
Speaker 1: Ukraine crisis, the Russian crisis has been has been pretty good.
Speaker 1: You also see your growth in trans Atlantic trade, whether
Speaker 1: it because of energy or a d emphasis on trading
Speaker 1: with adversaries or re emphasis on trading with with UH
Speaker 1: with friends. Where I'm worried about over the long term
Speaker 1: is not so much Russia as it is China, and
Speaker 1: I think there could be a growing split between what
Speaker 1: you might call American economic pressure on China, almost economic warfare,
Speaker 1: and Europe, led by Germany looking to China in many
Speaker 1: ways to compensate for the loss of economic ties with Russia.
Speaker 1: And if there were to ever be a crisis over Taiwan,
Speaker 1: this divergence across the Atlantic one makes a crisis more
Speaker 1: likely because China may not fear sanctions, or if there
Speaker 1: were a crisis in the United States wanted to introduce sanctions,
Speaker 1: I could imagine a big transatlantic split. This is really important,
Speaker 1: especially as German Chancellor all Off Souls just went to
Speaker 1: China with a bunch of executives of big industrial companies.
Speaker 1: How much do you give credence? Then the softening in
Speaker 1: tone that we've heard at least recently with the US
Speaker 1: and China and Tony blinking blinking heading over there early
Speaker 1: next year. Look, I think it's good. I'm an old
Speaker 1: fashioned diplomat, so I actually happened to believe in diplomacy.
Speaker 1: I think that's progress. I thought the meeting in Bali
Speaker 1: was a useful exchange. I think it's useful to have
Speaker 1: follow up. But let's not kid ourselves. These countries are
Speaker 1: in very different pages. The question is whether they can
Speaker 1: set up some rules of the road about how to
Speaker 1: limit their differences over Taiwan. So it doesn't lead to
Speaker 1: complic But I don't see any sign, for example, that
Speaker 1: China is lending a hand to deal with North Korea,
Speaker 1: which is busy building up nuclear weapons and shooting off missiles.
Speaker 1: I don't see the China's helping with Iran. We can
Speaker 1: go around the world, so geo politically, the two countries
Speaker 1: are not on the same page. China is still not
Speaker 1: helping with with with climate much. So again, to me,
Speaker 1: the real question of the United States and China with
Speaker 1: these talks is whether they can avoid negatives more than
Speaker 1: a chief positives. Richard Hasash, I grew up with part
Speaker 1: of the house being a middle twentieth century isolation is
Speaker 1: what was called a Chicago Tribune Midwest isolationism, something I'm
Speaker 1: sure you saw west of Overland, Ohio. And when I
Speaker 1: look at where we are today, Richard hass, we have
Speaker 1: a new isolationism. It's always there, but this time it's
Speaker 1: different color. The character of America's new isolationism, right, we're
Speaker 1: seeing it Tom and it doesn't respect party lines. We're
Speaker 1: seeing it in both the Republican Party and the Democratic Party.
Speaker 1: You see in the Republican Party a kind of flirtation
Speaker 1: with Russia, this talk about conditioning or limiting aid to
Speaker 1: Ukraine on the progressive side of the Democratic Party again
Speaker 1: and in patience over money spent for foreign policy or
Speaker 1: national security abroad, wanting to see more at home. What's
Speaker 1: missing on both sides of the aisle is an appreciation
Speaker 1: of two things. One is that money spent on foreign
Speaker 1: policy is good for us here at home. We are
Speaker 1: not going to do well in a world that unravels
Speaker 1: and to use my favorite word, in a world and
Speaker 1: in disarray. Secondly, what ails us at home for the
Speaker 1: most part is not a lack of resources being spent.
Speaker 1: You look at how much we're spending domestically, that's not
Speaker 1: the problem. It's how we spend money is the issue,
Speaker 1: much more than how how much we spend. Plus increasingly
Speaker 1: is you know better than anybody. What's crowding out a
Speaker 1: lot of useful forms of domestic spending is not national security.
Speaker 1: It's servicing our debt. And that's something. If people on
Speaker 1: the left and the right wanted to free up money
Speaker 1: to devote to domestic causes, they could focus very much
Speaker 1: on the size of America's death. Richard Hoss, thank you
Speaker 1: so much. With the council and his Council on Foreign Relations.
Speaker 1: The new book, The Bill of Obligations, is the will
Speaker 1: out there to move forward into the next decade. This
Speaker 1: is the Bloomberg Surveillance Podcast. Thanks for listening. Join us
Speaker 1: live weekdays from seven to ten am Eastern on Bloomberg
Speaker 1: Radio and on Bloomberg Television each day from six to
Speaker 1: nine am for insight from the best in economics, finance, investment,
Speaker 1: and international relations. And subscribe to the Surveillance podcast on
Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course on
Speaker 1: the terminal. I'm Tom Keene, and this is Bloomberg