1
00:00:00,080 --> 00:00:12,960
Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene

2
00:00:13,480 --> 00:00:17,560
Speaker 1: Jay Leye. We bring you insight from the best in economics, finance, investment,

3
00:00:18,000 --> 00:00:23,520
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

4
00:00:23,600 --> 00:00:34,080
Speaker 1: Bloomberg dot com, and of course on the Bloomberg. The

5
00:00:34,080 --> 00:00:36,000
Speaker 1: Federal Reserve then the main event, the f O m

6
00:00:36,040 --> 00:00:38,760
Speaker 1: C almost certain to raise rates a quarter point at

7
00:00:38,800 --> 00:00:41,760
Speaker 1: the close of a two day meeting today, investors focused

8
00:00:41,800 --> 00:00:45,120
Speaker 1: on whether the panel will signal one or two additional hikes.

9
00:00:45,120 --> 00:00:48,839
Speaker 1: In Johnny Guess to discusses. Alan Ruskin, Deutsche Bank Global

10
00:00:48,920 --> 00:00:51,599
Speaker 1: co Head of Effect Strategy and good morning to you, sir,

11
00:00:51,760 --> 00:00:53,159
Speaker 1: and thank you for giving us your time. What are

12
00:00:53,159 --> 00:00:57,560
Speaker 1: you looking for? Good morning? Yes, well, I'm with the market.

13
00:00:57,600 --> 00:01:00,880
Speaker 1: I think in pursuing the startup session really as to

14
00:01:00,920 --> 00:01:03,400
Speaker 1: whether the medium dots in a two thousand and eight

15
00:01:04,240 --> 00:01:08,920
Speaker 1: we'll actually sort of move up another twenty five basis point. Um.

16
00:01:08,959 --> 00:01:10,440
Speaker 1: You know, I think the key there is, you know,

17
00:01:10,560 --> 00:01:13,960
Speaker 1: really particularly what pals dot does. We think Powell has

18
00:01:14,040 --> 00:01:17,800
Speaker 1: been so far really in the camp of expecting three

19
00:01:17,840 --> 00:01:20,240
Speaker 1: rate hikes this year. He could easily shift to four

20
00:01:20,319 --> 00:01:22,120
Speaker 1: ray tips because that's the case, then I think the

21
00:01:22,160 --> 00:01:24,959
Speaker 1: market will actually take this orchest Allan, it's somewhat interesting

22
00:01:25,000 --> 00:01:27,480
Speaker 1: that the market and yourself are still obsessed over the

23
00:01:27,520 --> 00:01:32,119
Speaker 1: dots when shamp Hower doesn't want us to be. Um. Why, well,

24
00:01:32,160 --> 00:01:35,320
Speaker 1: I think it's the clearest signal of the feds intentions. Um,

25
00:01:35,560 --> 00:01:38,600
Speaker 1: we have a lot of sympathy in general in terms

26
00:01:38,600 --> 00:01:41,760
Speaker 1: of you know, Chairman Pal suggesting we look otherwise. Is

27
00:01:41,920 --> 00:01:43,959
Speaker 1: you know it really is there such a difference when

28
00:01:44,319 --> 00:01:48,000
Speaker 1: you know seven or eight members expect a hike in

29
00:01:48,040 --> 00:01:51,560
Speaker 1: two thousand and eighteen, you know, there's not really a

30
00:01:51,640 --> 00:01:55,080
Speaker 1: particular shift or I don't think it necessarily raises the

31
00:01:55,120 --> 00:01:58,120
Speaker 1: odds of uh, you know, say four ray tykes in

32
00:01:58,120 --> 00:02:01,120
Speaker 1: two thousand and eighteen significant, But nonetheless, I think the

33
00:02:01,160 --> 00:02:02,640
Speaker 1: mark is going to take it that way. Alan, Do

34
00:02:02,680 --> 00:02:04,760
Speaker 1: you think the Federal Reserve has the appetite to really

35
00:02:04,800 --> 00:02:09,720
Speaker 1: tighten financial conditions and move through neutral? Um? Yes, I

36
00:02:09,760 --> 00:02:11,560
Speaker 1: think I do. But I think it's you know, one

37
00:02:11,560 --> 00:02:14,280
Speaker 1: step at a time. First, get to neutral, See what

38
00:02:14,400 --> 00:02:17,360
Speaker 1: financial conditions are, see the states of the economy is seeing,

39
00:02:17,360 --> 00:02:20,480
Speaker 1: particularly where we are an inflation, and then if need be,

40
00:02:20,639 --> 00:02:24,400
Speaker 1: if the economy is still humming, along above trend rates

41
00:02:24,400 --> 00:02:28,840
Speaker 1: of growth, and that would be indicative of future inflation.

42
00:02:28,960 --> 00:02:32,720
Speaker 1: Maybe moving above target then absolutely they'll hike and they'll move.

43
00:02:33,080 --> 00:02:35,680
Speaker 1: And it just seems to me we've got a question

44
00:02:35,720 --> 00:02:38,200
Speaker 1: their appetite for two things, their appetite to move through

45
00:02:38,280 --> 00:02:41,760
Speaker 1: neutral and their appetite to to tolerate above target inflation.

46
00:02:41,840 --> 00:02:44,880
Speaker 1: How how do you balance those two things? Allen, Yeah,

47
00:02:44,960 --> 00:02:47,440
Speaker 1: I think you know the sense spoken about the idea

48
00:02:47,480 --> 00:02:50,000
Speaker 1: of being symmetric in terms of the inflation target, and

49
00:02:50,040 --> 00:02:53,080
Speaker 1: they've suggested that, Yes, you know, we've lived through a

50
00:02:53,080 --> 00:02:55,160
Speaker 1: period where inflation is being below targets, so we can

51
00:02:55,160 --> 00:02:57,600
Speaker 1: live through a period where inflation is above target. I

52
00:02:57,600 --> 00:02:59,959
Speaker 1: think that's a lot easier said than done. I think

53
00:03:00,080 --> 00:03:02,720
Speaker 1: if inflation starts to move above target, and if they

54
00:03:02,840 --> 00:03:05,320
Speaker 1: start tolerating it, the bond market is going to do

55
00:03:05,360 --> 00:03:07,120
Speaker 1: the tightening for them, and I think that's going to

56
00:03:07,160 --> 00:03:10,119
Speaker 1: be make life very difficult for the FIT. I think

57
00:03:10,120 --> 00:03:12,600
Speaker 1: the FED rather should be in charge of things and

58
00:03:12,680 --> 00:03:15,160
Speaker 1: directing things on the short term, rather than leading the

59
00:03:15,200 --> 00:03:17,600
Speaker 1: bond market take control. We're just gonna take a ten

60
00:03:17,680 --> 00:03:19,600
Speaker 1: second break from the Fed to bring Tom keanean for

61
00:03:19,639 --> 00:03:22,880
Speaker 1: the other big headline NAFTA, when's the World Cup? Tom Kane,

62
00:03:22,919 --> 00:03:24,280
Speaker 1: what do you think about that? You know, I've been

63
00:03:24,320 --> 00:03:26,480
Speaker 1: watching the news, Flaw was just watching it. We'll get

64
00:03:26,600 --> 00:03:29,080
Speaker 1: there having fun folks with the world. You really beginning

65
00:03:29,080 --> 00:03:32,120
Speaker 1: to US, Canada and Mexico. You and I going in six.

66
00:03:32,360 --> 00:03:35,080
Speaker 1: People are making wall jokes and that, and of course

67
00:03:35,120 --> 00:03:38,560
Speaker 1: the Guardian just looking here as Canada, USA and Mexico,

68
00:03:39,040 --> 00:03:42,800
Speaker 1: and I've seen others that are USA, Mexico and in Canada.

69
00:03:42,920 --> 00:03:44,880
Speaker 1: It's called the United Bid. For our listeners that don't

70
00:03:44,880 --> 00:03:46,880
Speaker 1: know what we're talking about, it's just across the Bloomberg

71
00:03:46,920 --> 00:03:49,480
Speaker 1: big headline that the United States, Canada, Mexico won the

72
00:03:49,520 --> 00:03:54,560
Speaker 1: bid to host. From now we go from eighteen KATA

73
00:03:54,720 --> 00:04:02,600
Speaker 1: twenty two to NAFTA. It it's still around the United States.

74
00:04:02,640 --> 00:04:04,840
Speaker 1: The United States gets the final, so they split up

75
00:04:04,840 --> 00:04:06,240
Speaker 1: the games. The bulk of the games will be in

76
00:04:06,240 --> 00:04:08,680
Speaker 1: the United States, and I believe the final will be

77
00:04:08,680 --> 00:04:12,520
Speaker 1: in New Jersey. Oh really, yeah? Way ahead? Did this? That?

78
00:04:12,680 --> 00:04:15,280
Speaker 1: I am Ellen Ruskin. We've been we've been looking at

79
00:04:15,280 --> 00:04:17,480
Speaker 1: this and maybe it's the World Cup of Central Banks

80
00:04:17,480 --> 00:04:20,240
Speaker 1: as well, and the World Cup of Central Bank Centers.

81
00:04:20,240 --> 00:04:24,359
Speaker 1: Around that the distractions of June, but the reality of

82
00:04:24,400 --> 00:04:27,760
Speaker 1: when they actually address balance sheets. Are we going to

83
00:04:27,839 --> 00:04:32,440
Speaker 1: hear a balance sheet discussion today? I think we'll hear

84
00:04:32,480 --> 00:04:34,719
Speaker 1: a little bit about it. You know, what you're seeing

85
00:04:34,839 --> 00:04:39,320
Speaker 1: is some tightening of liquidity way ahead of what was anticipated,

86
00:04:39,560 --> 00:04:43,719
Speaker 1: and consequently is seeing the funds rate sort of move

87
00:04:43,839 --> 00:04:47,840
Speaker 1: up and move up in relation to the rate that's

88
00:04:47,839 --> 00:04:50,839
Speaker 1: paid on access. So I think what you're certainly going

89
00:04:50,920 --> 00:04:54,600
Speaker 1: to see is that I O sorry, that I O

90
00:04:54,720 --> 00:04:58,159
Speaker 1: E R rate moving up about twenty basis points, and

91
00:04:58,680 --> 00:05:02,080
Speaker 1: that would be still consist with the funds rate really

92
00:05:02,120 --> 00:05:04,440
Speaker 1: sort of tracking in the middle of its target, so

93
00:05:05,000 --> 00:05:07,800
Speaker 1: between a new target of say one point seven five

94
00:05:07,839 --> 00:05:10,839
Speaker 1: percent in two percent. It's really a technical measure and

95
00:05:10,920 --> 00:05:13,200
Speaker 1: people shouldn't get too confused about it, but it could

96
00:05:13,200 --> 00:05:15,760
Speaker 1: confuse a few people. There is a measure that our

97
00:05:15,800 --> 00:05:18,279
Speaker 1: audience looks at coast to coast, and it's not a

98
00:05:18,360 --> 00:05:23,640
Speaker 1: technical measure. It's the paycheck after inflation. I see curves,

99
00:05:23,720 --> 00:05:26,400
Speaker 1: the curve flattening this morning, where we may break through

100
00:05:26,480 --> 00:05:30,560
Speaker 1: the new flatness off of those wage data yesterday. To

101
00:05:30,680 --> 00:05:34,080
Speaker 1: a guy like you, are you interested in the nominal wage?

102
00:05:34,160 --> 00:05:37,719
Speaker 1: Pretty good? Are you? More interested in the inflation dynamic

103
00:05:37,800 --> 00:05:43,120
Speaker 1: underneath it, Tom, I'm interested in both. I think what's

104
00:05:43,920 --> 00:05:46,599
Speaker 1: usually taken for granted this the idea that if you

105
00:05:46,680 --> 00:05:51,760
Speaker 1: have wage inflation, you'll necessarily have CPI inflation. And similarly,

106
00:05:51,800 --> 00:05:55,640
Speaker 1: in the CPI syde, if you have CPI related inflation

107
00:05:55,680 --> 00:05:58,440
Speaker 1: that you have wage inflation. That's not necessarily the case really,

108
00:05:58,480 --> 00:06:01,480
Speaker 1: so there's a more confused dynamic is underneath it, obviously,

109
00:06:01,520 --> 00:06:03,920
Speaker 1: for as you rightly points out, for the person in

110
00:06:03,960 --> 00:06:07,760
Speaker 1: the streets, the real ways really ultimately counts more. I

111
00:06:07,760 --> 00:06:10,160
Speaker 1: would say this, though, one has to be careful about

112
00:06:10,200 --> 00:06:13,600
Speaker 1: the noise around CPI, the headline CPI at beast as

113
00:06:13,640 --> 00:06:16,159
Speaker 1: it relates to energy prices in particular. So there's a

114
00:06:16,160 --> 00:06:18,320
Speaker 1: good reason I think why we look at core inflation

115
00:06:18,360 --> 00:06:20,880
Speaker 1: in particular and try to strip out energy prices and

116
00:06:20,960 --> 00:06:23,440
Speaker 1: the noise behind that. Alan, let's kind of trade from you,

117
00:06:23,520 --> 00:06:25,359
Speaker 1: just to wrap things up. You're a dollar one sevent

118
00:06:25,600 --> 00:06:27,960
Speaker 1: fifty eight. We go into the FED meeting later this afternoon,

119
00:06:28,000 --> 00:06:30,600
Speaker 1: and easy piece decision tomorrow. Do you want to buy

120
00:06:30,640 --> 00:06:33,880
Speaker 1: us out? You're a dollar going into Friday? I think

121
00:06:33,920 --> 00:06:37,200
Speaker 1: probably it's a buyer actually. So we've had the last

122
00:06:37,320 --> 00:06:40,400
Speaker 1: four ray types we've had, three of them have been

123
00:06:40,480 --> 00:06:43,400
Speaker 1: sort of buy the rumor, still the fact. And you

124
00:06:43,440 --> 00:06:45,800
Speaker 1: know that means really that the fed raisers raised two

125
00:06:45,960 --> 00:06:49,080
Speaker 1: heels tend to go down and the dollar has tended

126
00:06:49,120 --> 00:06:51,760
Speaker 1: to go down. And I think we're in for another

127
00:06:51,800 --> 00:06:54,960
Speaker 1: one of those events, really, mostly because we've got the

128
00:06:54,960 --> 00:06:58,040
Speaker 1: easy be As a follow up, Alan Ruskin going to

129
00:06:58,080 --> 00:07:00,360
Speaker 1: catch up with your Dodge Banks glob Or cohead of

130
00:07:00,440 --> 00:07:16,800
Speaker 1: Effects strategy right now. There may be a transaction announced

131
00:07:16,800 --> 00:07:18,520
Speaker 1: today or at least a bit, I should say, in

132
00:07:18,560 --> 00:07:21,240
Speaker 1: a offer. And this is after a T and T

133
00:07:21,440 --> 00:07:24,960
Speaker 1: time Warner Ian Whittakers with Librarium, and it's been looking

134
00:07:25,440 --> 00:07:28,120
Speaker 1: at the media frenzy to come. Some would say one

135
00:07:28,160 --> 00:07:31,200
Speaker 1: big roll up Ian Whittaker. Would you expect to hear

136
00:07:31,280 --> 00:07:34,920
Speaker 1: from Mr robertson Comcast today of an all cash effort

137
00:07:35,000 --> 00:07:40,200
Speaker 1: for Fox. I think it's definitely a strong possibility that's

138
00:07:40,240 --> 00:07:43,520
Speaker 1: the case. There's no doubt that people wait and see

139
00:07:43,520 --> 00:07:45,360
Speaker 1: what happened with this court case. If you look at

140
00:07:45,360 --> 00:07:48,160
Speaker 1: the ruling court case, would definitely seemed to open the

141
00:07:48,200 --> 00:07:53,080
Speaker 1: way for vertical integration to happen much more aggressively in

142
00:07:53,080 --> 00:07:55,880
Speaker 1: the media sector, And there's always been this sort of

143
00:07:56,600 --> 00:07:58,680
Speaker 1: case if you look at Comcast that they're interested in

144
00:07:58,720 --> 00:08:04,040
Speaker 1: the Fox effects that Disney we're also interested in. So yeah,

145
00:08:04,760 --> 00:08:07,840
Speaker 1: the short answers, yes, I would, and I guess, and

146
00:08:07,920 --> 00:08:10,400
Speaker 1: the clothes in the price section. Comcast down in the

147
00:08:10,440 --> 00:08:13,600
Speaker 1: pre market by three and a half percent, Disney trading lower,

148
00:08:13,640 --> 00:08:17,200
Speaker 1: Fox trading positive because we're expecting a bid in war.

149
00:08:17,440 --> 00:08:19,400
Speaker 1: What is the kind of price that you think is

150
00:08:19,400 --> 00:08:22,120
Speaker 1: going to take to get Mr Murdoch to say, Okay,

151
00:08:22,160 --> 00:08:26,000
Speaker 1: I'll take an all cash deal from you, Mr roberts Um.

152
00:08:26,040 --> 00:08:29,320
Speaker 1: I think there are various sort of of segments in

153
00:08:29,440 --> 00:08:32,520
Speaker 1: terms of what, you know, what sort of or Mr

154
00:08:32,600 --> 00:08:34,920
Speaker 1: Murdoch will be considering. I mean, an all cash offer

155
00:08:35,960 --> 00:08:37,560
Speaker 1: when you look at her first night, would seem to

156
00:08:37,559 --> 00:08:40,839
Speaker 1: be to the preferred route. However, yeah, there may be

157
00:08:40,920 --> 00:08:44,480
Speaker 1: a case here where Fox, for example, the original deal

158
00:08:44,520 --> 00:08:46,679
Speaker 1: with Disney would take a stake at Disney. Is there

159
00:08:46,720 --> 00:08:49,679
Speaker 1: anything there maybe Fox would like still to keep a

160
00:08:49,720 --> 00:08:52,240
Speaker 1: steak here in something like a Comcast in order to

161
00:08:52,280 --> 00:08:55,240
Speaker 1: have a little bit of influence. So I think you've

162
00:08:55,240 --> 00:08:59,440
Speaker 1: got to sort of way up those sort of of

163
00:08:59,440 --> 00:09:03,520
Speaker 1: of thoughts about what exactly is the end game of

164
00:09:03,600 --> 00:09:05,960
Speaker 1: Fox here? Is it just to maximize the price, in

165
00:09:06,000 --> 00:09:08,640
Speaker 1: which case a premium on top of what Disney has

166
00:09:08,640 --> 00:09:11,640
Speaker 1: offered that would be that would be fantastic, Or is

167
00:09:11,640 --> 00:09:14,920
Speaker 1: there something else which it is affecting their thinking here?

168
00:09:15,280 --> 00:09:17,320
Speaker 1: And these are all times that we expect. These are

169
00:09:17,320 --> 00:09:21,280
Speaker 1: all bids that we expect. Yesterday, traditional media got a

170
00:09:21,320 --> 00:09:24,240
Speaker 1: green light to take on tech, get bigger, get better,

171
00:09:24,880 --> 00:09:27,599
Speaker 1: and effectively try and take on the likes of Netflix

172
00:09:27,679 --> 00:09:30,480
Speaker 1: and Amazon Video, et cetera. Do you see in the

173
00:09:30,559 --> 00:09:32,400
Speaker 1: future in a tie up between one of the big

174
00:09:32,400 --> 00:09:35,480
Speaker 1: tech firms and one of the big media companies. It's

175
00:09:35,480 --> 00:09:38,880
Speaker 1: definitely possible if you look at first of all, because

176
00:09:38,880 --> 00:09:41,040
Speaker 1: the tech firms have the have the five power in

177
00:09:41,160 --> 00:09:43,760
Speaker 1: terms of the market app but also as well just

178
00:09:43,800 --> 00:09:46,280
Speaker 1: because if you actually look at what's happening in the

179
00:09:46,720 --> 00:09:50,120
Speaker 1: sort of in a tech space, increasingly what the players

180
00:09:50,120 --> 00:09:53,800
Speaker 1: are trying to get into, certainly likes of Google and Facebook,

181
00:09:54,120 --> 00:09:56,760
Speaker 1: they're trying to actually expand their video off things now

182
00:09:57,679 --> 00:10:02,240
Speaker 1: does are a good reason for that sort of video advertising?

183
00:10:02,280 --> 00:10:05,600
Speaker 1: Online video advertising growing very quickly, but you need content

184
00:10:05,679 --> 00:10:07,800
Speaker 1: for that. And if you look at these companies at

185
00:10:07,800 --> 00:10:09,719
Speaker 1: the moment, they don't really have much in the way

186
00:10:09,720 --> 00:10:12,240
Speaker 1: of content. Now they've been trying to pull up some

187
00:10:12,280 --> 00:10:15,280
Speaker 1: of that, but the the organic efforts, this is a

188
00:10:15,320 --> 00:10:19,240
Speaker 1: classic situation where organically it's going to be extremely difficult

189
00:10:19,240 --> 00:10:20,400
Speaker 1: to do so, so if you want to go at

190
00:10:20,440 --> 00:10:24,080
Speaker 1: up scale, you have to go and acquire that. That

191
00:10:24,240 --> 00:10:26,679
Speaker 1: to me would suggest that at some point soon we're

192
00:10:26,679 --> 00:10:28,800
Speaker 1: going to start to see some of these tech companies,

193
00:10:28,920 --> 00:10:33,520
Speaker 1: you know, seriously considering looking at buying content assets. Revenue

194
00:10:33,600 --> 00:10:37,559
Speaker 1: ian is made up of price and units. Isn't there

195
00:10:37,600 --> 00:10:41,920
Speaker 1: a basically a global price war in media right now?

196
00:10:41,960 --> 00:10:44,720
Speaker 1: Do they have a revenue persistency they can use to

197
00:10:44,800 --> 00:10:50,079
Speaker 1: calculate all these mergers to come. I think it really

198
00:10:50,120 --> 00:10:54,880
Speaker 1: depends on which particular segment that you're looking for. If

199
00:10:54,880 --> 00:10:57,800
Speaker 1: you if you've got something, for example, like a pay

200
00:10:57,880 --> 00:11:01,960
Speaker 1: TV operator, it should actually be quite a simple calculation.

201
00:11:02,000 --> 00:11:05,120
Speaker 1: That is exactly that it is subscribers times your average

202
00:11:05,200 --> 00:11:08,760
Speaker 1: revenue per user, and that should give you of total

203
00:11:08,920 --> 00:11:11,560
Speaker 1: revenues and so forth. I think for some other things

204
00:11:11,679 --> 00:11:13,760
Speaker 1: it's a little bit sort of it's a little bit

205
00:11:13,760 --> 00:11:16,960
Speaker 1: more difficult because let's say, for example, you you are

206
00:11:17,000 --> 00:11:19,880
Speaker 1: a tech company, you want to buy content, and therefore

207
00:11:19,920 --> 00:11:22,600
Speaker 1: what you're trying to do is that you're thinking about

208
00:11:22,600 --> 00:11:25,760
Speaker 1: this from the longer term strategic candle. Does the question

209
00:11:25,760 --> 00:11:28,120
Speaker 1: mark of does it help you to expand into new markets?

210
00:11:28,360 --> 00:11:31,520
Speaker 1: Does it help you to protect your existing share? That

211
00:11:31,640 --> 00:11:34,560
Speaker 1: sort of thing can be a lot more difficult to

212
00:11:34,960 --> 00:11:38,400
Speaker 1: actually calculate, and I think there's always sort of the

213
00:11:38,440 --> 00:11:41,640
Speaker 1: issue here that I think, particularly for something like content,

214
00:11:42,200 --> 00:11:44,400
Speaker 1: where people have this sort of view of how it

215
00:11:44,400 --> 00:11:47,960
Speaker 1: can be monetized, but it's not exactly sort of pinned

216
00:11:48,000 --> 00:11:52,600
Speaker 1: down sort of in a quite a rigorous, vigorous scientific calculation.

217
00:11:53,440 --> 00:11:56,680
Speaker 1: But if you if you're big in terms of market capit,

218
00:11:56,720 --> 00:12:00,640
Speaker 1: temptation is always just as it were splash, my gosh,

219
00:12:02,600 --> 00:12:05,840
Speaker 1: you think, Ian, Thank you so much, Ian, what a care.

220
00:12:05,920 --> 00:12:10,559
Speaker 1: With a great brief this morning from Libraham on merger acquisitions,

221
00:12:10,640 --> 00:12:28,240
Speaker 1: transactions to come as well. Lisa pigs gets as smarter

222
00:12:28,360 --> 00:12:30,520
Speaker 1: as we've done my great defend day today. She does

223
00:12:30,559 --> 00:12:34,160
Speaker 1: that with a really important research note. Always with some

224
00:12:34,240 --> 00:12:38,520
Speaker 1: good charts, lindsay, what's the most important chart for Chairman Powell?

225
00:12:39,520 --> 00:12:41,959
Speaker 1: I think right now the chairman is very much focused

226
00:12:42,080 --> 00:12:45,840
Speaker 1: on the rising trend in inflation as you just reported,

227
00:12:45,880 --> 00:12:48,400
Speaker 1: the p p I up stronger than expected yesterday, of

228
00:12:48,400 --> 00:12:51,160
Speaker 1: the CPI continuing to show an upward trend, and the

229
00:12:51,200 --> 00:12:54,480
Speaker 1: Chairman is very much focused on that rise in inflation.

230
00:12:54,840 --> 00:12:57,120
Speaker 1: Of course, there will be many Committee members that will

231
00:12:57,160 --> 00:13:00,720
Speaker 1: be focused on the pc Their preferred your of inflation

232
00:13:01,000 --> 00:13:04,400
Speaker 1: remains just at that two percent target. You've got a

233
00:13:04,440 --> 00:13:08,920
Speaker 1: gorgeous little yellow dotty line there at the FEDS two target.

234
00:13:09,520 --> 00:13:12,360
Speaker 1: Within the game, you know, the parlor game of what

235
00:13:12,440 --> 00:13:15,120
Speaker 1: you do and the FED work and all that. They're

236
00:13:15,160 --> 00:13:18,439
Speaker 1: allowed to overshoot, aren't they. If that's the case, how

237
00:13:18,520 --> 00:13:23,080
Speaker 1: much overshoot can they overshoot? They certainly are allowed to overshoot.

238
00:13:23,280 --> 00:13:26,400
Speaker 1: It's not about reaching that two percent target for one month.

239
00:13:26,800 --> 00:13:29,240
Speaker 1: It's about reaching it and sustaining it. And of course

240
00:13:29,280 --> 00:13:32,079
Speaker 1: there will be volatility months a month, which suggests that

241
00:13:32,160 --> 00:13:36,560
Speaker 1: inflation could temporarily read above that two percent objective. And

242
00:13:36,600 --> 00:13:38,679
Speaker 1: I think the Committee would be very comfortable with a

243
00:13:38,760 --> 00:13:42,200
Speaker 1: temporary rise somewhere between two to two and a half percent,

244
00:13:42,720 --> 00:13:46,960
Speaker 1: particularly given that there still is a number of skeptics

245
00:13:47,000 --> 00:13:49,880
Speaker 1: on the FED that this is only a temporary bout

246
00:13:49,920 --> 00:13:53,959
Speaker 1: of inflation and the longer term directional pressures may still

247
00:13:54,000 --> 00:13:56,000
Speaker 1: be to the downside. So I do think there is

248
00:13:56,080 --> 00:13:58,120
Speaker 1: quite a bit of wiggle room in terms of the

249
00:13:58,160 --> 00:14:02,240
Speaker 1: Fed's objective that would allow inflation to temporarily overshoot. And lindsay,

250
00:14:02,240 --> 00:14:05,480
Speaker 1: what are the consequences of moving through neutral, going from

251
00:14:05,480 --> 00:14:08,480
Speaker 1: an a combinensive stance to something that's a little bit

252
00:14:08,480 --> 00:14:12,000
Speaker 1: more restrictive, real tightning. Oh, I think there's a big

253
00:14:12,000 --> 00:14:14,920
Speaker 1: resk to the economy right now. We're still struggling to

254
00:14:15,000 --> 00:14:18,680
Speaker 1: main two percent issues and growth on the U S economy.

255
00:14:18,679 --> 00:14:21,200
Speaker 1: And remember, since the end of the financial crisis, we've

256
00:14:21,240 --> 00:14:23,880
Speaker 1: been trending at just two point two percent, which is

257
00:14:23,920 --> 00:14:27,280
Speaker 1: the weakest pace of a recovery since post World War

258
00:14:27,320 --> 00:14:31,200
Speaker 1: two history. So we're still talking about very moderate condition.

259
00:14:31,680 --> 00:14:34,640
Speaker 1: And should the FED get overly aggressive, they could easily

260
00:14:34,720 --> 00:14:37,960
Speaker 1: pull the rug out from under the domestic economy. Come on,

261
00:14:38,000 --> 00:14:40,320
Speaker 1: the game change yesterday, lindsay. I mean you've been doing

262
00:14:40,320 --> 00:14:42,840
Speaker 1: this for ages, and the game changed yesterday with that

263
00:14:42,960 --> 00:14:45,520
Speaker 1: inflation and just in wage growth. I'm looking at the

264
00:14:45,560 --> 00:14:48,240
Speaker 1: two's ten spread, folks, and I'm going to do a

265
00:14:48,280 --> 00:14:51,200
Speaker 1: fifty day I don't know if it gets back far enough.

266
00:14:51,240 --> 00:14:54,360
Speaker 1: Fifty day inter day, Yeah, the fifty day inter day,

267
00:14:54,400 --> 00:14:56,920
Speaker 1: and we are now on an inter day basis, we're

268
00:14:57,840 --> 00:15:00,120
Speaker 1: lo lo loo. Yes, we just hit it. Would us

269
00:15:00,160 --> 00:15:03,440
Speaker 1: hit a new low intra day on the two s

270
00:15:03,440 --> 00:15:07,840
Speaker 1: tend spread and lindsay it came off inflation adjusted wage growth,

271
00:15:08,000 --> 00:15:11,760
Speaker 1: it's just not there. And the rationalization as well inflations

272
00:15:11,840 --> 00:15:17,320
Speaker 1: up of my audience knows real wages are going nowhere.

273
00:15:17,680 --> 00:15:20,520
Speaker 1: How do they raise into that? Oh, And that's one

274
00:15:20,560 --> 00:15:23,080
Speaker 1: of the conundrums that the FED is facing. When we

275
00:15:23,120 --> 00:15:25,880
Speaker 1: talk about inflation, we usually look at it from the

276
00:15:25,920 --> 00:15:29,400
Speaker 1: standpoint of the wage price spiral, meaning that the economy

277
00:15:29,800 --> 00:15:33,120
Speaker 1: covering businesses are expanding, they start to draw down the

278
00:15:33,120 --> 00:15:36,360
Speaker 1: pool of available labor, and wages start to increase. That's

279
00:15:36,400 --> 00:15:40,120
Speaker 1: the typical improvement cycle. But we're simply not seeing that.

280
00:15:40,200 --> 00:15:43,200
Speaker 1: And without that growth, it's going to be very difficult

281
00:15:43,240 --> 00:15:45,760
Speaker 1: for the FED to justify a rate increase beyond what's

282
00:15:45,760 --> 00:15:50,120
Speaker 1: already priced in meaning June and September, particularly as the

283
00:15:50,160 --> 00:15:53,400
Speaker 1: curve continues to flatten. Now, I'm certainly not suggesting that

284
00:15:53,520 --> 00:15:56,960
Speaker 1: it's a simplistic one to one correlation, but when you're

285
00:15:57,000 --> 00:16:00,120
Speaker 1: talking about a forty fifty basis points spread, which in

286
00:16:00,160 --> 00:16:02,920
Speaker 1: twos and tens, and the FED is threatening to raise

287
00:16:02,960 --> 00:16:05,960
Speaker 1: an additional fifty basis points. Well, we could be talking

288
00:16:06,000 --> 00:16:08,960
Speaker 1: about an inverted curve by the end of the year. Lindsay,

289
00:16:09,040 --> 00:16:10,600
Speaker 1: is there a bite point? And I know it's a

290
00:16:10,600 --> 00:16:12,360
Speaker 1: bit of a juvenile question because there won't be a

291
00:16:12,440 --> 00:16:15,960
Speaker 1: number and share powers mind all those that he gets nervous,

292
00:16:16,000 --> 00:16:18,200
Speaker 1: But just in terms of a range, if you can

293
00:16:18,200 --> 00:16:20,560
Speaker 1: give me a range, lindsay, when does the Federal Reserve

294
00:16:20,920 --> 00:16:23,280
Speaker 1: really start to get nervous? Because they've laid it out,

295
00:16:23,520 --> 00:16:25,400
Speaker 1: whether you think they should or shouldn't, they have laid

296
00:16:25,400 --> 00:16:27,200
Speaker 1: it out that they are watching the yield curve and

297
00:16:27,200 --> 00:16:29,640
Speaker 1: they don't want it to invert. So with two stands

298
00:16:29,680 --> 00:16:32,320
Speaker 1: at forty basis points, is it somewhere between ten and

299
00:16:32,400 --> 00:16:35,240
Speaker 1: twenty somewhere between zero and twenty that they start to

300
00:16:35,240 --> 00:16:38,320
Speaker 1: get a little bit nervous and back off? Oh, I

301
00:16:38,360 --> 00:16:40,880
Speaker 1: think they should already be very nervous. Interesting, I think

302
00:16:41,000 --> 00:16:43,760
Speaker 1: I think forty basis points is an alarming signal to

303
00:16:43,760 --> 00:16:46,000
Speaker 1: the FED that the long end of the curve is

304
00:16:46,000 --> 00:16:49,680
Speaker 1: not buying into the feds very optimistic assessment of where

305
00:16:49,680 --> 00:16:52,360
Speaker 1: conditions are headed. So I think at this point the

306
00:16:52,400 --> 00:16:55,200
Speaker 1: FED should be very nervous. And again when we talk

307
00:16:55,240 --> 00:16:57,720
Speaker 1: about what the FED should do versus what they will do,

308
00:16:58,120 --> 00:17:01,520
Speaker 1: we do expect to interest rate, but they should maybe

309
00:17:01,560 --> 00:17:04,719
Speaker 1: back off. Even at this point, it will be more interesting,

310
00:17:04,800 --> 00:17:10,960
Speaker 1: Lindsay as we stagger into September. November eight December, Lindsay

311
00:17:11,240 --> 00:17:14,160
Speaker 1: pie and Dr Pieza, thank you so much with stephile

312
00:17:14,160 --> 00:17:32,880
Speaker 1: this morning. This is joy within the blur of thinking

313
00:17:33,160 --> 00:17:37,920
Speaker 1: and analysis and within everybody's saying. Just the simple historic

314
00:17:38,040 --> 00:17:41,879
Speaker 1: moment of a handshake in Singapore was extraordinary. There's been

315
00:17:41,920 --> 00:17:46,959
Speaker 1: a real effort for careful analysis of what went on before,

316
00:17:47,520 --> 00:17:50,960
Speaker 1: what's going on right now, and possibly what we will

317
00:17:50,960 --> 00:17:54,440
Speaker 1: know of the future. Eli Lake with brilliant essays for

318
00:17:54,520 --> 00:17:56,760
Speaker 1: Bloomberger Opinion, and I told our team we've got to

319
00:17:56,800 --> 00:17:59,520
Speaker 1: get Mr Lake on. Eli. Let me ask you an

320
00:17:59,520 --> 00:18:03,800
Speaker 1: open question just to get things started. Now, what in

321
00:18:03,840 --> 00:18:08,680
Speaker 1: this effort to bring North Korea into a modern age. Well,

322
00:18:08,720 --> 00:18:10,640
Speaker 1: first of all, thank you very much for that very

323
00:18:10,720 --> 00:18:14,160
Speaker 1: kind of introduction. UM I think now what is I mean?

324
00:18:14,240 --> 00:18:18,520
Speaker 1: Trump said it he um intends on having people like

325
00:18:18,560 --> 00:18:22,639
Speaker 1: Mike Pompeo meet with North Korean counterparts for a series

326
00:18:22,680 --> 00:18:27,119
Speaker 1: of meetings to actually hammer out some details and basic

327
00:18:27,200 --> 00:18:30,680
Speaker 1: details like a time frame for what next steps are

328
00:18:30,680 --> 00:18:34,280
Speaker 1: going to be taken by the Koreans the nuclearization. Um.

329
00:18:34,400 --> 00:18:38,120
Speaker 1: You know, Trump announced the end of military exercises, which

330
00:18:38,160 --> 00:18:41,240
Speaker 1: he called war games and said were expensive and very provocative,

331
00:18:41,320 --> 00:18:45,359
Speaker 1: which UM, I think was unwise to call them war games.

332
00:18:45,400 --> 00:18:49,280
Speaker 1: But um, that said, he announced some of the possessions,

333
00:18:49,280 --> 00:18:51,840
Speaker 1: and we should acknowledge here that the North Koreans also

334
00:18:51,960 --> 00:18:55,840
Speaker 1: gave up some hostages that they had taken, um, of

335
00:18:55,880 --> 00:19:01,320
Speaker 1: course after effectively killing Otto warm beer a year. Um.

336
00:19:01,359 --> 00:19:04,399
Speaker 1: And also you know, they have blown up one of

337
00:19:04,400 --> 00:19:06,919
Speaker 1: their test sites. And then Trump mentioned, although we have

338
00:19:07,000 --> 00:19:08,760
Speaker 1: to get more details on it, that there will be

339
00:19:08,760 --> 00:19:13,000
Speaker 1: another missile testing site that they will decommission. So it's

340
00:19:13,000 --> 00:19:15,520
Speaker 1: the North Korean and the and and and most important,

341
00:19:15,520 --> 00:19:18,720
Speaker 1: it's been seven months and they haven't tested any nuclear

342
00:19:18,720 --> 00:19:22,400
Speaker 1: devices or any missiles. UM. All of that, so far,

343
00:19:22,560 --> 00:19:27,280
Speaker 1: so good. My issue is that I think that Trump

344
00:19:27,320 --> 00:19:31,320
Speaker 1: could have gotten all of this and not engaged in

345
00:19:31,400 --> 00:19:37,480
Speaker 1: the over the top, sick of fun flattery that was

346
00:19:37,640 --> 00:19:40,760
Speaker 1: on display in Singapore. Because Tim Jong Luon is a

347
00:19:40,800 --> 00:19:44,119
Speaker 1: monster and we should be clear about that. He doesn't

348
00:19:44,119 --> 00:19:45,639
Speaker 1: have to say he's a monster, but he doesn't have

349
00:19:45,680 --> 00:19:49,400
Speaker 1: to say that the North Korean people love their dear

350
00:19:49,520 --> 00:19:51,960
Speaker 1: leader and all of this other stuff which we just

351
00:19:52,040 --> 00:19:54,359
Speaker 1: had Stephen nor Bern and we're looking at condos on

352
00:19:54,359 --> 00:19:57,160
Speaker 1: the beaches in North Korea. Eli, like one of your

353
00:19:57,359 --> 00:20:01,720
Speaker 1: cottage industries is a linkage of international nations to the Pentagon.

354
00:20:02,200 --> 00:20:05,720
Speaker 1: How will the various and sundry brass at the Pentagon

355
00:20:06,359 --> 00:20:10,760
Speaker 1: react to the military exercises? Cruteld. Vice President Pence had

356
00:20:10,760 --> 00:20:15,000
Speaker 1: to manage that message yesterday. I don't think that that's

357
00:20:15,000 --> 00:20:17,000
Speaker 1: going to be really much of a problem. Can have

358
00:20:18,080 --> 00:20:23,600
Speaker 1: a strong tradition in America of civilian control of the military. UM.

359
00:20:23,600 --> 00:20:26,959
Speaker 1: When the Pentagon doesn't like something is there, like anything

360
00:20:26,960 --> 00:20:29,840
Speaker 1: else in Washington, they will leak about it. But I

361
00:20:29,880 --> 00:20:32,800
Speaker 1: don't necessarily think that the idea that we're going to

362
00:20:32,840 --> 00:20:35,439
Speaker 1: be calling off the military exercise is as part of

363
00:20:35,440 --> 00:20:39,240
Speaker 1: this diplomatic exercise is going to be something that's I

364
00:20:39,240 --> 00:20:40,760
Speaker 1: think there, m let me goel like this. I think

365
00:20:40,760 --> 00:20:43,000
Speaker 1: they have much bigger fish to fry. They want to

366
00:20:43,040 --> 00:20:46,200
Speaker 1: make sure that they end um. You know, the sort

367
00:20:46,200 --> 00:20:49,800
Speaker 1: of series of cuts that we're breathing between Obama and

368
00:20:49,920 --> 00:20:54,440
Speaker 1: Republican Congress, Um, you know, as part of the military

369
00:20:54,480 --> 00:20:56,400
Speaker 1: as part of an effort to try to balance the budget.

370
00:20:56,480 --> 00:20:59,199
Speaker 1: That was something that you know, military leaders really didn't like,

371
00:20:59,400 --> 00:21:01,560
Speaker 1: and they managed to get Trump sort of move off

372
00:21:01,560 --> 00:21:03,959
Speaker 1: of that as well as a Republican Congress. I'd love

373
00:21:03,960 --> 00:21:06,040
Speaker 1: it if you could help us sort of pass through

374
00:21:06,040 --> 00:21:09,000
Speaker 1: the noise from reality, because you have President Trump who's

375
00:21:09,000 --> 00:21:11,359
Speaker 1: known to go back on his words sometimes, Kim Jong un,

376
00:21:11,440 --> 00:21:15,160
Speaker 1: who has been fairly unreliable in the past as well. Uh,

377
00:21:15,200 --> 00:21:17,840
Speaker 1: this was a handshake. There was nothing that concrete that

378
00:21:17,880 --> 00:21:21,400
Speaker 1: was agreed to. What what did we move forward? I mean,

379
00:21:21,400 --> 00:21:25,840
Speaker 1: what concrete can we cling to that is not noise? Well,

380
00:21:25,880 --> 00:21:28,960
Speaker 1: as I said, I think that if we continue to

381
00:21:29,000 --> 00:21:32,520
Speaker 1: see the streak of no tests from North Korea, that's

382
00:21:32,560 --> 00:21:36,160
Speaker 1: a good thing. And that's actually a marker. And in

383
00:21:36,200 --> 00:21:39,600
Speaker 1: some ways, even though I was been critical of Trump

384
00:21:39,640 --> 00:21:42,199
Speaker 1: on this because as I said, um, you know, I

385
00:21:42,240 --> 00:21:45,480
Speaker 1: think the nature of these regimes really matters, uh, in

386
00:21:45,600 --> 00:21:48,240
Speaker 1: terms of the durability of these kinds of arrangements. But

387
00:21:48,840 --> 00:21:52,880
Speaker 1: to his credit, you know, deciding to suspend UH and

388
00:21:52,960 --> 00:21:57,000
Speaker 1: call off the South Drea U S military exercises. It's

389
00:21:57,040 --> 00:21:59,800
Speaker 1: something that can also easily be turned on. So it's

390
00:21:59,800 --> 00:22:03,320
Speaker 1: some thing that if if there is anything that that

391
00:22:03,480 --> 00:22:05,520
Speaker 1: that suggests the North Koreans are not living up to

392
00:22:05,600 --> 00:22:07,720
Speaker 1: their word. It's not like he gave away something that

393
00:22:07,760 --> 00:22:12,040
Speaker 1: he can't take take back. And in that respect, um,

394
00:22:12,080 --> 00:22:14,119
Speaker 1: you know, you could argue that it was it was

395
00:22:14,119 --> 00:22:17,560
Speaker 1: a good chip to sort of play um. But again,

396
00:22:17,840 --> 00:22:20,879
Speaker 1: I my concern here is that at the end of

397
00:22:20,880 --> 00:22:24,080
Speaker 1: the day, the format, the formula that this deal is

398
00:22:24,119 --> 00:22:27,160
Speaker 1: the same as every other attempt, which is, we will

399
00:22:27,720 --> 00:22:31,080
Speaker 1: give security guarantees to your terrible regime if you give

400
00:22:31,160 --> 00:22:35,000
Speaker 1: up these news and I don't, and it hasn't worked

401
00:22:35,040 --> 00:22:38,480
Speaker 1: so far, and I don't know if that's a great

402
00:22:38,560 --> 00:22:42,080
Speaker 1: bargain down the line, because it really does make the

403
00:22:42,160 --> 00:22:46,639
Speaker 1: United States and the other western civilized great powers that

404
00:22:46,760 --> 00:22:52,200
Speaker 1: support it kind of, you know, partners in a crime

405
00:22:52,240 --> 00:22:56,280
Speaker 1: against North Korean people. And that is even though I

406
00:22:56,800 --> 00:22:59,840
Speaker 1: understand that statesmanship is all about choices and hard choices,

407
00:23:00,240 --> 00:23:03,480
Speaker 1: and if you really can get a verifiable agreement where

408
00:23:04,080 --> 00:23:06,879
Speaker 1: they get rid of their nuclear weapons and end that

409
00:23:07,000 --> 00:23:08,920
Speaker 1: kind of threat to the United States and the West

410
00:23:08,960 --> 00:23:12,440
Speaker 1: Coast United States and Japan, that's a good thing. If

411
00:23:12,480 --> 00:23:16,200
Speaker 1: you can add to you know, stabilizing tensions on the peninsula,

412
00:23:16,320 --> 00:23:18,480
Speaker 1: that's a good thing, and it may in fact be

413
00:23:18,520 --> 00:23:21,119
Speaker 1: worth it. But in the end, I don't think it's durable,

414
00:23:21,160 --> 00:23:23,880
Speaker 1: because sooner or later all of these kinds of hearings

415
00:23:23,920 --> 00:23:26,720
Speaker 1: fall and just keep in line. Sob Eton signed all

416
00:23:26,800 --> 00:23:29,719
Speaker 1: kinds of arms control agreements with the United States, including

417
00:23:29,800 --> 00:23:33,560
Speaker 1: Ronald Reagan. But in the end it didn't stop Barris

418
00:23:33,640 --> 00:23:37,840
Speaker 1: Eelsen from ultimately collapsing the Soviet Union because eventually the

419
00:23:37,880 --> 00:23:40,560
Speaker 1: people who had to live under that evil empire decided

420
00:23:40,760 --> 00:23:44,359
Speaker 1: enough as enough. You know, we had Stephen Nurper of

421
00:23:44,440 --> 00:23:46,879
Speaker 1: Columbia University on earlier in the show, and he was

422
00:23:46,920 --> 00:23:51,040
Speaker 1: talking about how this meeting in Singapore changed the calculus

423
00:23:51,080 --> 00:23:54,680
Speaker 1: for China and for Russia, and I'm wondering what your

424
00:23:54,680 --> 00:23:56,960
Speaker 1: perspective is. I mean, this was viewed as a win

425
00:23:57,080 --> 00:24:00,160
Speaker 1: for China, the US reducing troops there. Do you think

426
00:24:00,320 --> 00:24:03,159
Speaker 1: that this gives the US a leg up in negotiations

427
00:24:03,240 --> 00:24:07,640
Speaker 1: with China about trade. I'm not entirely sure it does.

428
00:24:07,840 --> 00:24:10,000
Speaker 1: I mean, what we've seen so far and it's hard

429
00:24:10,040 --> 00:24:12,879
Speaker 1: to know what goes on in detail in those negotiations.

430
00:24:12,960 --> 00:24:18,359
Speaker 1: Is that Trump intervened to UM save ZT, their second

431
00:24:18,440 --> 00:24:22,920
Speaker 1: largest telecom company, UM after you know, a process had

432
00:24:23,000 --> 00:24:27,320
Speaker 1: completed that basically said Americans could not buy equipment from

433
00:24:27,359 --> 00:24:30,200
Speaker 1: them or sell equipment to them because of a lot

434
00:24:30,240 --> 00:24:33,360
Speaker 1: of things, including serious national security risks that they're basically

435
00:24:33,359 --> 00:24:36,720
Speaker 1: putting bugs in there, uh, you know, various kinds of

436
00:24:36,760 --> 00:24:40,920
Speaker 1: switches in circus and stuff. So in that respect, I

437
00:24:40,960 --> 00:24:43,040
Speaker 1: think that a big thing in the background was that

438
00:24:43,119 --> 00:24:46,240
Speaker 1: it was helpful to have the Chinese on board encouraging

439
00:24:46,320 --> 00:24:50,760
Speaker 1: Kim to participate in this diplomacy. Now it's possible that

440
00:24:51,119 --> 00:24:54,960
Speaker 1: because Trump, if Trump really has forged a personal and

441
00:24:55,040 --> 00:24:59,280
Speaker 1: good relationship with Tim Jong n, then you know, maybe

442
00:24:59,320 --> 00:25:01,000
Speaker 1: he will be able to say, listen, it's in your

443
00:25:01,040 --> 00:25:03,520
Speaker 1: interest and we don't need China to encourage you to

444
00:25:03,560 --> 00:25:06,520
Speaker 1: do this. But until you know, in the last year

445
00:25:06,520 --> 00:25:08,359
Speaker 1: and a half, that's that has been the dynamics. So

446
00:25:08,400 --> 00:25:11,000
Speaker 1: I don't know that it helps. How does Secretary Maddis

447
00:25:11,040 --> 00:25:13,040
Speaker 1: respond to the last two or three or four days,

448
00:25:14,600 --> 00:25:17,359
Speaker 1: I don't know. I don't think that. Sometimes Secretary Maddis

449
00:25:17,359 --> 00:25:21,120
Speaker 1: has has two nicknames. One of them is the Warrior Monks,

450
00:25:21,160 --> 00:25:24,359
Speaker 1: because he is a true intellectual and reads all kinds

451
00:25:24,359 --> 00:25:27,199
Speaker 1: of things, particularly from ancient history. Uh. The other is

452
00:25:27,240 --> 00:25:30,480
Speaker 1: mad Dog Madnis and and he has talked eloquently before

453
00:25:30,560 --> 00:25:34,600
Speaker 1: about the very nature of war. Um. But I don't

454
00:25:34,600 --> 00:25:36,760
Speaker 1: think that he is that kind of caricature. I think

455
00:25:36,800 --> 00:25:40,199
Speaker 1: that he would see the strategic value if there's a

456
00:25:40,280 --> 00:25:45,040
Speaker 1: chance to get the nuclearization. Maddis is not a typical neocon.

457
00:25:45,200 --> 00:25:48,720
Speaker 1: He's not somebody like I say myself, who really cares

458
00:25:48,760 --> 00:25:52,280
Speaker 1: a lot about the internal dynamics of these themes that

459
00:25:52,320 --> 00:25:53,960
Speaker 1: you negotiate with. I think he's much more of a

460
00:25:54,000 --> 00:25:56,840
Speaker 1: kind of cold eyed realist in that regard. So I

461
00:25:56,880 --> 00:25:59,119
Speaker 1: don't necessarily think that Maddis has has hard burned about this.

462
00:25:59,240 --> 00:26:01,640
Speaker 1: I think he has much hard bird about the treatment

463
00:26:01,720 --> 00:26:04,680
Speaker 1: of Trump is shown to us allies at the G

464
00:26:04,840 --> 00:26:07,680
Speaker 1: seven and Native ELI like thank you so much. I

465
00:26:07,680 --> 00:26:10,680
Speaker 1: love seeing your work with Tim like Tim O'Brien or

466
00:26:10,720 --> 00:26:14,960
Speaker 1: others at Bloomberg Opinion. Eli like I put it out

467
00:26:15,000 --> 00:26:24,240
Speaker 1: on Twitter. I get that story out again. Thanks for

468
00:26:24,320 --> 00:26:28,720
Speaker 1: listening to the Bloomberg Surveillance podcast. Subscribe and listen to

469
00:26:28,880 --> 00:26:34,600
Speaker 1: interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer.

470
00:26:35,160 --> 00:26:38,520
Speaker 1: I'm on Twitter at Tom Keane before the podcast. You

471
00:26:38,520 --> 00:26:41,920
Speaker 1: can always catch us worldwide. I'm Bloomberg Radio