WEBVTT - Expect Kavanaugh To Deflect With 'Settled Law' Jargon 0:00:05.800 --> 0:00:08.360 Welcome to the Bloomberg P and L Podcast. I'm Pim 0:00:08.400 --> 0:00:11.200 Fox along with my co host Lisa A. Brahmowitz. Each 0:00:11.240 --> 0:00:14.440 day we bring you the most important, noteworthy, and useful 0:00:14.480 --> 0:00:17.079 interviews for you and your money, whether you're at the 0:00:17.120 --> 0:00:20.360 grocery store or the trading floor. Find the Bloomberg P 0:00:20.520 --> 0:00:33.120 M L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. 0:00:33.120 --> 0:00:37.800 Even before the first words of Brett Kavanaugh, the President's 0:00:37.880 --> 0:00:42.320 nominee to the U. S. Supreme Court, Democrats we're pressing 0:00:42.360 --> 0:00:46.200 the Republicans on the Senate Judiciary Committee to adjourn the hearing, 0:00:47.080 --> 0:00:52.800 citing the late release of documents related to Brett Kavanaugh. 0:00:53.040 --> 0:00:55.040 Now Here to tell us more about this is our 0:00:55.120 --> 0:00:59.680 legal analyst and the co host of Bloomberg Politics Policy Power, 0:00:59.760 --> 0:01:03.600 and none other than my colleague June grossoe June, was 0:01:03.680 --> 0:01:06.679 this expected on the part of the Democrats. Yes, they 0:01:06.720 --> 0:01:08.840 were going to try to bring up the fact. It's 0:01:08.840 --> 0:01:10.880 not just that they got by the way. Forty two 0:01:10.920 --> 0:01:14.680 tho documents were released last night by the attorney who's 0:01:14.720 --> 0:01:18.880 reviewing the documents of when Kavanaugh was in the Bush 0:01:18.880 --> 0:01:22.839 White House as its secretary to President George W. Bush. 0:01:23.120 --> 0:01:25.639 So they didn't They knew that they hadn't gotten hundreds 0:01:25.680 --> 0:01:28.479 of thousands of documents that they've requested from those years, 0:01:28.520 --> 0:01:32.760 and that could contain um different kinds of issues related to, 0:01:32.840 --> 0:01:36.039 for example, the torture problems that they were that they 0:01:36.600 --> 0:01:39.640 encountered in the Bush White House. So there's a lot 0:01:40.319 --> 0:01:44.000 or comments that Brett Kavanaugh had written while he was 0:01:44.280 --> 0:01:46.600 a counselor in the White House. We don't know exactly 0:01:46.600 --> 0:01:48.600 what it be, but would be all the emails and 0:01:48.640 --> 0:01:51.720 all those those things that go back and forth between 0:01:51.800 --> 0:01:55.160 him and his position of power as far as that's concerned, 0:01:55.400 --> 0:01:58.000 and other people as to the positions the George W. 0:01:58.080 --> 0:02:01.200 Bush White House took. So it wasn't so much opinions 0:02:01.280 --> 0:02:04.240 as in legal opinions, but other kinds of things. What 0:02:04.400 --> 0:02:06.200 what side was he on it? And some of those 0:02:06.200 --> 0:02:10.040 issues he bypassed. He got around during his confirmation hearings 0:02:10.040 --> 0:02:11.720 for the d. C. Circuit Court of Appeals. So they 0:02:11.760 --> 0:02:14.680 wanted all those documents, and as you know, this has 0:02:14.720 --> 0:02:17.680 been a rush to push this through. The Republicans said 0:02:17.720 --> 0:02:19.920 they wanted to do it right after Labor Day. They 0:02:19.919 --> 0:02:22.320 want him on the court in time for the session 0:02:22.360 --> 0:02:24.840 in October, so it has been a big rush, and 0:02:25.160 --> 0:02:26.840 so they complained about it, and they tried to get 0:02:26.880 --> 0:02:28.840 the hearings put off, but it was we know it's 0:02:28.880 --> 0:02:31.320 to no avail. Chuck Grassley basically said, I'm gonna listen 0:02:31.360 --> 0:02:33.840 to you, and then he ruled he's the chairman of 0:02:33.880 --> 0:02:37.000 the of the Judiciary Committee. But in addition to the 0:02:37.080 --> 0:02:43.600 release of the documents, they're also classified as committee confidential exactly. 0:02:43.720 --> 0:02:46.760 So so that's a good question, and I don't know 0:02:46.800 --> 0:02:48.920 the real answer to that, because if they want, you 0:02:49.120 --> 0:02:51.320 think that you want they want to ask questions about it, 0:02:51.480 --> 0:02:55.080 they're going to have to somehow make reference to it 0:02:55.120 --> 0:02:56.960 without revealing what was in it. It sounds like an 0:02:56.960 --> 0:03:00.720 impossible situation if they're classified as committee confident reality, because 0:03:00.760 --> 0:03:02.760 that means that the committee only, it's with the committee 0:03:02.760 --> 0:03:06.120 eyes only, so the public doesn't have access to that. 0:03:06.280 --> 0:03:09.440 So query whether they can really ask him any questions 0:03:09.480 --> 0:03:12.440 on that. So there doesn't seem to be at least 0:03:12.480 --> 0:03:16.519 anything procedurally that the Democrats on the Committee can do. No, 0:03:16.720 --> 0:03:19.440 there's nothing they can do really, because it's it's a 0:03:19.560 --> 0:03:23.480 question of the Republicans are in control of the committee, 0:03:23.800 --> 0:03:27.000 and Chuck grass Lee is in control of the committee, 0:03:27.040 --> 0:03:29.480 and what he says and the way they vote will 0:03:29.480 --> 0:03:33.320 always be Republican heavy, unless some Republican decides all of 0:03:33.360 --> 0:03:36.200 a sudden to vote with the Democrats, which is unlikely. 0:03:36.600 --> 0:03:39.680 And we should also mention that the fifty one forty 0:03:39.840 --> 0:03:44.560 nine GOP control of the Senate looks to be confirmed 0:03:44.640 --> 0:03:50.360 because Arizona's governor will appoint a Senator to replace the 0:03:50.440 --> 0:03:53.560 late John McCain right. And it doesn't look like either 0:03:53.760 --> 0:03:58.360 of the female Republican senators that Democrats have targeted as 0:03:58.440 --> 0:04:01.760 perhaps saying, for example, Susan Collins of Maine, that they 0:04:01.760 --> 0:04:05.040 would vote with the Democrats because they are pro choice. 0:04:05.960 --> 0:04:08.280 It doesn't seem like that's going to happen. Susan Collins 0:04:08.280 --> 0:04:10.720 of Maine at least said that she asked Brett Kavanaugh 0:04:10.800 --> 0:04:13.640 about row View weight and he said it was settled law. 0:04:13.960 --> 0:04:18.120 Now that's a phrase that lawyers and especially people trying 0:04:18.120 --> 0:04:20.920 to become judges like to use to say, but it 0:04:20.960 --> 0:04:23.680 means really not much. It means that as of now 0:04:23.880 --> 0:04:26.880 it's settled, and that's a precedent. But they can also 0:04:26.960 --> 0:04:29.760 overturn any precedent. In this last Supreme Court term, we 0:04:30.160 --> 0:04:33.560 saw Judge Gorzich, who had talked about settled law and 0:04:33.800 --> 0:04:37.920 respecting precedent, be in the majority to overturn a forty 0:04:38.000 --> 0:04:41.839 year old precedent about union fees. So that really means nothing. 0:04:42.160 --> 0:04:43.960 So it's just a way to kind of get rid 0:04:44.000 --> 0:04:46.640 of the question. It's it's a he will have many, 0:04:46.680 --> 0:04:49.000 many ways to get rid of the question. He's been 0:04:49.040 --> 0:04:52.880 in intensive they call them really murder boards, and it's 0:04:52.920 --> 0:04:55.280 sort of like every you're sitting there and they just 0:04:55.320 --> 0:04:58.360 throw every question that you can possibly imagine. And CNN 0:04:58.440 --> 0:05:03.240 is reported that they all had protesters and shouted things 0:05:03.279 --> 0:05:05.200 at him and did different things to make him at 0:05:05.279 --> 0:05:08.080 ease for when he's in front of this committee, and 0:05:08.200 --> 0:05:10.200 there were even protesters this morning that had to be 0:05:10.560 --> 0:05:12.880 carried out. So he is prepared and he's going to 0:05:13.000 --> 0:05:17.000 have answers. For example, I can't talk about a case 0:05:17.080 --> 0:05:20.240 that's going to come before me. Well, I respect settled precedent, 0:05:20.279 --> 0:05:21.720 but how can I you know, I can't talk about 0:05:21.720 --> 0:05:24.240 something that's going to happen in the future. And you'll 0:05:24.279 --> 0:05:27.360 hear those the same things you heard from Judge Chief 0:05:27.480 --> 0:05:30.480 Judge now Chief Justice John Roberts. He's going to have 0:05:30.520 --> 0:05:34.240 some baseball analogies, talking about calling only calling balls and 0:05:34.279 --> 0:05:36.800 strikes and being like an umpire. Those are in some 0:05:36.880 --> 0:05:40.679 of the prepared remarks that we had to look at. Now. 0:05:41.200 --> 0:05:46.919 The Trump administration has also cited executive privilege in order 0:05:47.080 --> 0:05:51.720 to prevent about a hundred thousand pages of records from 0:05:51.760 --> 0:05:55.400 his time as the White House Counsel in the George W. 0:05:55.560 --> 0:06:00.680 Bush administration. Yes, and that's unusual because I don't know 0:06:00.760 --> 0:06:04.960 of another time where executive privilege was injected as part 0:06:05.040 --> 0:06:08.720 of Supreme Court hearings. I mean, usually all those documents 0:06:08.720 --> 0:06:12.400 by that time are revealed, and I don't remember another 0:06:12.800 --> 0:06:16.800 hearing where there was this late, late, you know, display 0:06:17.000 --> 0:06:22.200 of documents, documents overnight. Now not even their staff can 0:06:22.240 --> 0:06:26.479 get through documents overnight. And as we've mentioned, they're they're 0:06:26.600 --> 0:06:29.800 still marked by executive privilege, so they're supposed to be 0:06:29.839 --> 0:06:33.320 just for the committee only. But um that that is 0:06:33.320 --> 0:06:38.840 a very unusual kind of declaration, you might say, And 0:06:38.960 --> 0:06:41.920 it's going to keep all those documents, which are the 0:06:42.000 --> 0:06:44.080 kind of documents that Democrats would like to get their 0:06:44.120 --> 0:06:47.760 hands on. Um. Senaer to Einstein said today some she 0:06:47.839 --> 0:06:49.880 said something, well, we would like to prove, you know, 0:06:50.040 --> 0:06:52.039 have the documents we'd like to prove. We know that 0:06:52.040 --> 0:06:53.799 you're at this position, but we don't have any proof 0:06:53.800 --> 0:06:56.920 of it yet. Thank you very much. June Grasso are 0:06:57.040 --> 0:07:00.960 legal analyst, co host of Politics Policy Our and lot 0:07:16.800 --> 0:07:20.480 the shares of Nike. They are down nearly three percent today. 0:07:20.560 --> 0:07:23.480 Here to tell us more about the company and it's 0:07:23.560 --> 0:07:28.559 new ad campaign that will feature a Colin Kaepernick, Let's 0:07:28.720 --> 0:07:31.480 turn to Bert Flickinger. He is the managing director for 0:07:31.480 --> 0:07:34.440 a strategic resource group. You can follow Birt on Twitter 0:07:34.960 --> 0:07:39.080 at Bert Underscore Flickinger. Bert Flickinger, why do you think 0:07:39.160 --> 0:07:43.200 Nike has turned to Colin Kaepernick for a new ad campaign? 0:07:43.920 --> 0:07:46.680 Him Nike's law, some of it's cool and cache and 0:07:46.720 --> 0:07:52.080 it's trying to recover it on the thirtie anniversary to 0:07:52.280 --> 0:07:57.960 just Do It campaign that started Ignaminous Lee after Gary Gilmore, 0:07:58.440 --> 0:08:02.120 the murderer of you Utag gas station attendant and um 0:08:02.360 --> 0:08:07.000 Utah motel clerk told the prison firing squad just to 0:08:07.080 --> 0:08:09.440 pull the trigger and just do it and kill him. 0:08:09.480 --> 0:08:13.160 And and then that became the genesis of the Nike 0:08:13.720 --> 0:08:17.160 just do It do It ads in in which which 0:08:17.200 --> 0:08:20.840 continued and this will certainly sell more sneakers, but as 0:08:20.880 --> 0:08:24.680 you reference on the Bloomberg terminal, Nikes down almost three 0:08:24.720 --> 0:08:29.080 percent double what ADDI does is down. And while Nike 0:08:29.240 --> 0:08:36.239 has the big box to pay the most famous athletes, UH, teams, universities, 0:08:36.320 --> 0:08:39.600 et cetera. UH, students who we're seeing from around the 0:08:39.640 --> 0:08:44.080 world are wearing New Balance, wearing Puma, wearing the Adida 0:08:44.280 --> 0:08:47.480 three stripe. UH, and Nike's going the wrong way and 0:08:47.480 --> 0:08:50.960 and him. A big part of this is Nike was 0:08:51.000 --> 0:08:55.600 a really socially responsible company in the in the eighties 0:08:55.600 --> 0:08:58.959 and nineties. UH with with it just let Me Play 0:08:59.000 --> 0:09:02.080 campaign that lives Stolan and Joe McCarthy and Dan Widen 0:09:02.160 --> 0:09:06.840 of Wide and Kennedy did UH to help help oppressed 0:09:07.200 --> 0:09:12.280 women and girls and get resources through sports, et cetera. 0:09:12.920 --> 0:09:17.719 And UH. Now NI Nike seems to be following controversy, 0:09:17.720 --> 0:09:22.000 which is okay to certainly take a stand commercially, but 0:09:22.000 --> 0:09:25.439 but Nike needs to go back to its roots and 0:09:26.320 --> 0:09:29.760 really get behind women and girls, which which is over 0:09:29.840 --> 0:09:33.640 half the market that UH Nikes ignored to its peril 0:09:34.120 --> 0:09:38.360 UH and also pressure on its stock prices. You referenced, well, 0:09:38.400 --> 0:09:41.240 what do you mean by Nike strategy? Do they have 0:09:41.320 --> 0:09:45.079 a strategy to combat Audidas or Adidas however you want 0:09:45.120 --> 0:09:49.200 to describe it, or Puma that may be held in 0:09:49.320 --> 0:09:51.760 higher esteem when it comes to things like social media 0:09:52.280 --> 0:09:58.160 and controversy. This the strategy PIM in my view, financially 0:09:58.200 --> 0:10:03.000 is has been stripped my in America of UH being 0:10:03.040 --> 0:10:08.160 the one major shoe manufacturer that that does virtually that 0:10:08.280 --> 0:10:12.000 does all its manufacturing offshore and a lot of controversy 0:10:12.040 --> 0:10:17.559 in terms of factory casualties UH and and other really 0:10:17.600 --> 0:10:22.880 bad problems. And UH Nike originally with with the just 0:10:23.080 --> 0:10:28.480 do it UH with a Michael Jordan's campaign. Ultimately UH 0:10:28.559 --> 0:10:33.200 later Derek Jeter UH really world renowned and respected athletes 0:10:33.240 --> 0:10:36.880 eclipsed what Converse had been doing, UH in the great 0:10:37.000 --> 0:10:41.280 Magic Johnson and Larry Bird commercials produced by Spike Lee 0:10:41.920 --> 0:10:45.280 and now UH, it's it's more to your point, social 0:10:45.320 --> 0:10:49.040 and digital and connective media for Nike to get attention 0:10:49.280 --> 0:10:53.760 getting attention cells shoes, but isn't necessarily covering all of 0:10:54.200 --> 0:10:59.280 the key cornerstones of social responsibility, especially with women and girls. 0:10:59.040 --> 0:11:04.800 Is Nike become a large UH corporate corporation similar to 0:11:04.880 --> 0:11:08.920 what Warren Beatty did, is Mrs Leo Farnsworth and heaven 0:11:08.960 --> 0:11:12.280 can wait. Why can't we do everything right? And Nike 0:11:12.400 --> 0:11:15.000 doesn't seem to be doing everything right. Nike just seems 0:11:15.040 --> 0:11:19.160 to be just doing it, or maybe don't just doing 0:11:19.200 --> 0:11:21.839 it in terms of all the right things. Well, Bert, 0:11:21.920 --> 0:11:24.400 what would you suggest that they do that they're not doing? 0:11:25.600 --> 0:11:29.920 The big thing is UH for for example, was with 0:11:29.960 --> 0:11:37.520 it Drri's UH who coached more Olympic women's ice hockey 0:11:37.559 --> 0:11:41.320 stars and UH contending for a national championship on thirty 0:11:41.400 --> 0:11:45.319 eight thousand a year. Whether whether it's Cornell or IVY 0:11:45.360 --> 0:11:48.599 League or n c a A or women's NBA or 0:11:48.960 --> 0:11:54.280 or or women's soccer pro leagues. UH, Neither neither the NHL, 0:11:54.400 --> 0:11:57.280 nor the END nor the NBA, UH nor any of 0:11:57.320 --> 0:12:01.439 the other U leagues are sponsoring women's and girls sports. 0:12:01.480 --> 0:12:04.480 None of them were giving them the resources. That's where 0:12:04.480 --> 0:12:06.560 you think Nike ought to be putting its money and 0:12:06.640 --> 0:12:10.400 its strategy behind women's sports. Yeah, and they him they 0:12:10.520 --> 0:12:13.280 get the return because women make over half of the 0:12:13.320 --> 0:12:19.280 purchase decisions. And in terms of participation in sports, whether 0:12:19.280 --> 0:12:24.080 it's field hockey, ice hockey, UH football worldwide are called 0:12:24.120 --> 0:12:27.520 soccer in the US. That's the key to Nike's future. 0:12:27.720 --> 0:12:32.320 Audi DA and others see it on Nike apparently is 0:12:32.360 --> 0:12:36.600 obtusely missing it when Nike really got it years ago 0:12:36.679 --> 0:12:39.840 to be a worldwide leader. Now it's a laggern Well 0:12:40.040 --> 0:12:44.080 in that context, Bert Flickinger, how did Adidas or Audi 0:12:44.200 --> 0:12:52.480 does succeed in fashion with the stand smith sneaker which 0:12:52.520 --> 0:12:56.040 is a retro Look, how did they succeed at this? 0:12:56.360 --> 0:13:01.559 And Nike miss it? This stand Stan Smith and UH 0:13:02.000 --> 0:13:07.120 you us open and uh the retro Addi DA's regard, 0:13:07.240 --> 0:13:12.240 regardless of the sport, is really connecting, particularly with students 0:13:12.559 --> 0:13:16.280 junior high school, high school, UH, community college, college, young 0:13:16.320 --> 0:13:20.280 adults who look at look at the history. It's one 0:13:20.280 --> 0:13:23.600 of the reasons night Nike after in my view, UH 0:13:23.720 --> 0:13:29.600 anti competitive and UH pricing and potentially predatory practices in 0:13:29.640 --> 0:13:32.959 my professional view, knocked Converse out. Converse was a leader 0:13:32.960 --> 0:13:36.360 and doing what you're saying with with retro shoes, and 0:13:36.400 --> 0:13:39.960 Converse was really the innovator. Nike bought them out of bankruptcy, 0:13:40.040 --> 0:13:44.240 but didn't continue the great legacy that was built by 0:13:44.240 --> 0:13:48.240 the Converse company. And so Audi Dai Radidas has seized 0:13:48.240 --> 0:13:50.960 that mental and capitalized on it and and Adi. Is 0:13:50.960 --> 0:13:53.000 it too late, though, Bird, Is it too late for 0:13:53.120 --> 0:13:57.000 Nike to use converse as a wedge to drive those 0:13:57.080 --> 0:14:00.400 kinds of sales? Give you about twenty seconds in news 0:14:00.440 --> 0:14:05.080 conversus a wedge. What we're seeing in Japan, throughout Asia 0:14:05.240 --> 0:14:09.199 and in Europe is converse is still extremely popular, especially 0:14:09.200 --> 0:14:13.640 with young women, and that's the key catalyst for for 0:14:13.760 --> 0:14:16.560 Nike's growth beyond the Nike brand. All right, well we've 0:14:16.559 --> 0:14:18.400 got to leave it there, but thanks very much to 0:14:18.480 --> 0:14:38.720 Bert Flickings. You're talking about Nike the pain when it 0:14:38.760 --> 0:14:41.880 comes to emerging markets. Here to help us understand the 0:14:41.880 --> 0:14:45.560 pain and perhaps mitigate some of our concerns. As Damian 0:14:45.640 --> 0:14:50.560 sass Our, chief Emerging market strategist for Bloomberg Intelligence, Damian, 0:14:50.800 --> 0:14:54.840 you are the most popular person at Bloomberg because you 0:14:54.920 --> 0:14:58.280 are the expert for emerging markets, and boy, they have 0:14:58.400 --> 0:15:02.920 been grabbing the headlines, whether it is Turkey, Argentina and 0:15:03.040 --> 0:15:06.160 South Africa. Maybe we should start with South Africa since 0:15:06.600 --> 0:15:09.440 I think you kind of I have done Argentina to death. 0:15:09.480 --> 0:15:11.800 We'll get to that. I'm sure what is going on 0:15:11.840 --> 0:15:14.000 in South Africa and then we'll even go to Asia. 0:15:14.000 --> 0:15:16.920 But what's happening in South Africa. So South Africa reported 0:15:16.960 --> 0:15:19.880 GDP that came in well below expectations today they were 0:15:19.960 --> 0:15:23.280 down point seven quarter of a quarter. That's the second 0:15:23.280 --> 0:15:27.120 consecutive quarter of declining GDP growth, which effectively puts the 0:15:27.160 --> 0:15:30.520 economy in recession. Um, look, I mean this is this 0:15:30.600 --> 0:15:33.880 is this is long in the coming. I mean, agricultural 0:15:33.960 --> 0:15:36.960 production in South Africa has been teetering on the brink 0:15:36.960 --> 0:15:39.720 of disaster for some time. It's slow considerably. Um. We 0:15:39.760 --> 0:15:42.440 did see a bounce back in the mining in mining 0:15:42.440 --> 0:15:44.640 output this this quarter, which is a good thing, but 0:15:45.200 --> 0:15:47.920 consumption just remains at historical lows and so you know, 0:15:48.040 --> 0:15:50.240 it's just not hitting households where it matters most. And 0:15:50.280 --> 0:15:53.120 so you're seeing, um, you're seeing slowering growth, you're seeing 0:15:53.120 --> 0:15:55.600 inflation chick up, and you're just seeing the fundamentals weekend, 0:15:55.880 --> 0:15:59.640 So is this because of domestic issues or is this 0:16:00.000 --> 0:16:03.200 anything larger that's happening? Where is there just a trigger? 0:16:03.320 --> 0:16:06.840 Right the dollar gets stronger and then that triggers heightened 0:16:08.040 --> 0:16:10.880 focus on the domestic problems. Well, I mean it's had 0:16:10.920 --> 0:16:13.360 porks journals for some time in South Africa at this 0:16:13.400 --> 0:16:16.160 stage is all about confidence in credibility, right, Ramaphois has 0:16:16.200 --> 0:16:18.080 taken over now for Zoom that he's been in power 0:16:18.080 --> 0:16:20.440 for you know, more than a year, but his ability 0:16:20.480 --> 0:16:23.600 to enact these structural reforms that are designed to reduce 0:16:23.680 --> 0:16:25.840 leverage and improve growth just aren't. We're just we're just 0:16:25.880 --> 0:16:28.040 not seeing that. And it's not it's not gaining the 0:16:28.120 --> 0:16:30.840 credence with offshore creditors and so what you're seeing our 0:16:30.840 --> 0:16:33.800 portfolio outflows and it's much the same as Turkey and 0:16:33.880 --> 0:16:36.480 Argentina and much of emerging markets. You're just seeing you know, 0:16:36.840 --> 0:16:38.560 I don't want to call it hot money, but foreign 0:16:38.600 --> 0:16:40.960 investors who had invested in some of the local equity 0:16:41.000 --> 0:16:43.720 and bond markets heading for the hills. And so we've 0:16:43.760 --> 0:16:45.680 seen three point two I believe three. Are they heading 0:16:45.680 --> 0:16:47.760 for the hills because they're losing money or are they 0:16:47.800 --> 0:16:50.600 heading for the hills because they just fed up? Well, no, 0:16:50.760 --> 0:16:52.920 I think I think it depends on where they where 0:16:52.920 --> 0:16:54.640 they got in. I know that a lot of people 0:16:54.840 --> 0:16:58.680 have look emerging market practitioners who have been you know, 0:16:58.760 --> 0:17:00.560 involved in the space for are the better part of 0:17:00.560 --> 0:17:02.440 the last few decades know that now is the time 0:17:02.440 --> 0:17:04.399 when you want to be looking at emerging markets because 0:17:04.440 --> 0:17:07.400 e M always overshoots to the upside on the downside, 0:17:07.680 --> 0:17:10.639 and so it had overshot to the upside um. And 0:17:10.720 --> 0:17:12.800 so people who are getting in in those kind of 0:17:13.000 --> 0:17:15.159 you know, the nine things, so to speak, probably are 0:17:15.200 --> 0:17:16.920 feeling quite a bit of the pain and they're not 0:17:17.000 --> 0:17:20.280 unlikely to return anytime soon. But someone's got to take 0:17:20.320 --> 0:17:23.880 those trades off their hands. And there are veteran emerging 0:17:23.960 --> 0:17:28.280 market investors who were just thrilled to take someone else's money. Well, 0:17:28.320 --> 0:17:30.600 I think it's the distress in the macro community. It's 0:17:30.720 --> 0:17:33.840 it's the the the incremental tolerance for risk from a 0:17:33.840 --> 0:17:36.760 long only emerging market investor is going to be very 0:17:36.760 --> 0:17:39.359 small at this stage. But if you're an event driven, 0:17:39.520 --> 0:17:44.200 bottom up fundamental UH investor with a long term horizon, 0:17:44.720 --> 0:17:46.520 now might be a time to take a look. The same. 0:17:46.680 --> 0:17:48.800 The same goes for global macro guys. There's plenty of 0:17:48.840 --> 0:17:52.280 relative value opportunities when e M volatility takes up like 0:17:52.280 --> 0:17:54.160 this and you overshoot to the one side or the other, 0:17:54.200 --> 0:17:56.639 and so you want to just focus on South Africa, 0:17:56.720 --> 0:17:58.720 You want to go somewhere else. You want to go Indonesia, 0:17:58.760 --> 0:18:02.160 you want to go or Key, Argentina, is. So let's 0:18:02.200 --> 0:18:04.320 talk about Turkey, right, because on a relative basis, and 0:18:04.320 --> 0:18:06.360 we have touched on this last week, you know, you've 0:18:06.400 --> 0:18:09.960 got um, you've got you know, uh, five year CDs 0:18:10.080 --> 0:18:12.680 in Turkey trading at six hundred basis points. That's five 0:18:12.760 --> 0:18:16.919 year default protection against you know, effectively you know, Turkey 0:18:16.960 --> 0:18:19.720 defaulting on its dollar obligations, whereas in a place like 0:18:19.840 --> 0:18:23.160 Argentina you see that same risk trading at eight hundred 0:18:23.160 --> 0:18:27.240 basis points, meaning it's more expensive to heade your to 0:18:27.240 --> 0:18:30.160 to protect against default. Now, I would argue that despite 0:18:30.200 --> 0:18:33.240 all of the shortcomings of both nations, from a fundamental perspective, 0:18:34.400 --> 0:18:36.760 Argentina is doing a lot of the right things. It's 0:18:36.760 --> 0:18:38.880 appealing to the i m F, it's trying to enact 0:18:38.920 --> 0:18:42.440 structural reform, whereas in Turkey they're just rejecting a lot 0:18:42.520 --> 0:18:45.320 of you know, a lot of the and the good 0:18:45.359 --> 0:18:47.399 advice of people who have been there before, the I 0:18:47.560 --> 0:18:49.880 m F included, and and they're kind of shutting away 0:18:49.880 --> 0:18:52.080 their offshore creditors and and and leaving them with a 0:18:52.080 --> 0:18:53.560 bit of a bad taste in their mouth. And so 0:18:54.040 --> 0:18:56.800 I don't think you're gonna see investors return to Turkey. 0:18:57.640 --> 0:19:00.359 You know for quite some time, whereas in Argentina, I 0:19:00.400 --> 0:19:03.000 think there's there's there's more of a reason to to 0:19:03.320 --> 0:19:06.240 to look there. And and like I just said, Argentine 0:19:06.320 --> 0:19:08.840 is trading way cheaper than Turkey is right now. So 0:19:08.880 --> 0:19:11.160 from a relative perspective, you might see the global macro 0:19:11.200 --> 0:19:14.320 communities start to look at these opportunities and and so yeah, 0:19:14.359 --> 0:19:16.159 you know, on a duration neutral basis, if you're a 0:19:16.280 --> 0:19:19.000 risk tolerant type of investor, that might be one way 0:19:19.000 --> 0:19:22.400 to approach the market. So based on your experience, there 0:19:22.440 --> 0:19:26.960 are event driven or distressed investors that are probably looking 0:19:27.040 --> 0:19:31.040 to book air tickets from wherever their headquarters are, seriously 0:19:31.080 --> 0:19:34.320 to Buenos Aires to get on the ground and start 0:19:34.359 --> 0:19:37.520 talking to people and going and meeting people that need 0:19:37.560 --> 0:19:39.480 cap Well, that's been going on, I mean, I mean, 0:19:39.680 --> 0:19:41.119 if you just look at some of the bigger private 0:19:41.119 --> 0:19:43.280 equity shops. I mean just today we you know, um 0:19:43.400 --> 0:19:46.440 we saw um oak Tree, you know, and they basically 0:19:46.480 --> 0:19:49.120 decided to take two point four billion of non performing 0:19:49.160 --> 0:19:52.080 loans off the hands of China Huarrong Asset Management, which 0:19:52.080 --> 0:19:54.359 by the way, is one of the largest issuers of 0:19:54.400 --> 0:19:56.200 emerging market dollar debt. I mean, they're one of the 0:19:56.200 --> 0:19:59.439 biggest constituents in the broad Bloomberg Berkley's you know e 0:19:59.600 --> 0:20:01.760 m aggri get index. And so you know the fact 0:20:01.800 --> 0:20:03.200 that you know, you've got a guy like j Wan 0:20:03.240 --> 0:20:05.720 Trap who you know is on the record as having said, 0:20:05.760 --> 0:20:08.119 you know, there is a bunch of you know, the 0:20:08.800 --> 0:20:10.680 stress market is going to be coming back pretty soon. 0:20:10.960 --> 0:20:12.560 You know, for him to start putting money to work 0:20:12.640 --> 0:20:16.520 in China in local currency non performing loans, I think 0:20:16.560 --> 0:20:18.760 that's relevant in today's day and age. So there is 0:20:18.760 --> 0:20:21.560 an appetite for risk. It just depends on the type 0:20:21.560 --> 0:20:23.959 of investor. And and that's what we're saying. We need 0:20:24.000 --> 0:20:26.640 to see sort of a stronghand weekend exchange go on here. 0:20:26.880 --> 0:20:30.119 Well done, Thanks very much. Always a pleasure, Damian sassaur Our, 0:20:30.200 --> 0:20:35.600 chief Emerging market strategist for Bloomberg Intelligence. Always a value 0:20:35.640 --> 0:20:53.399 your participation in your thoughts, much appreciated. Trade talks between 0:20:53.400 --> 0:20:57.680 the United States and Canada are scheduled to reopen tomorrow, 0:20:57.960 --> 0:21:03.640 this coming after the President threatened Ottawa with expulsion from 0:21:03.640 --> 0:21:07.879 the North American Free Trade Agreement. And to tell us 0:21:07.920 --> 0:21:10.680 more about what's going on with these negotiations is our 0:21:10.720 --> 0:21:14.679 own Sean donnan Our, senior reporter for Trade and Globalization 0:21:14.760 --> 0:21:18.000 for Bloomberg Sean, thank you very much for being with 0:21:18.119 --> 0:21:22.280 us today. What exactly is different this week than last 0:21:22.320 --> 0:21:26.800 week when it comes to trade and negotiations with Canada, Well, 0:21:27.080 --> 0:21:29.399 you're right, it's Vu all over again in terms of 0:21:29.480 --> 0:21:32.880 racing towards to save NAFTA, if you will. The big 0:21:32.880 --> 0:21:35.959 story last week was was the Trump administration striking a 0:21:35.960 --> 0:21:38.879 deal with with Mexico that it rolled out on Monday, 0:21:38.920 --> 0:21:42.639 and then trying hurriedly to get Canada to join that. 0:21:43.000 --> 0:21:46.640 I think the big story this week is how Canada 0:21:47.040 --> 0:21:51.040 can can fit into Donald Trump's expectations but also react 0:21:51.680 --> 0:21:53.840 to what has been some pretty heated rhetoric over the 0:21:53.880 --> 0:21:56.879 last couple of days. Trump clearly is trying to raise 0:21:56.920 --> 0:22:00.200 the pressure on Canada UH to get to the able 0:22:00.240 --> 0:22:03.200 but also to kind of exceed to this deal on 0:22:03.200 --> 0:22:05.679 on his terms, and it's hard to see how Canada 0:22:05.760 --> 0:22:08.760 can do that for its own domestic political reasons. He's 0:22:08.760 --> 0:22:12.440 also involved Richard Trumka, the president of the a f 0:22:12.560 --> 0:22:16.480 l C I O Union. That's right, absolutely so. I mean, 0:22:16.640 --> 0:22:19.919 the one of the problems that Donald Trump faces is 0:22:19.960 --> 0:22:22.520 that no one wants a NAFTA without Canada, and that 0:22:22.640 --> 0:22:27.040 of course gives some leverage to UH to Canada. And 0:22:27.080 --> 0:22:29.840 one of those people over the weekend became Richard TRUMPKA, 0:22:29.880 --> 0:22:33.240 who had given the sort of lukewarm welcome UH last 0:22:33.280 --> 0:22:36.440 week to to to the NAFTA deal, and then over 0:22:36.480 --> 0:22:40.040 the weekend said he couldn't see a role for a 0:22:40.160 --> 0:22:43.439 NAFTA deal without Canada, which was in direct opposition to 0:22:43.480 --> 0:22:46.800 the President who just the day before had tweeted that 0:22:46.880 --> 0:22:50.760 he UH didn't see any legal reason why Canada had 0:22:50.800 --> 0:22:52.879 to be involved. Again, this is this question of leverage. 0:22:52.920 --> 0:22:56.040 Who's got the leverage in these negotiations. Trump clearly thinks 0:22:56.080 --> 0:22:59.320 he can he can plow ahead, but Congress, the US 0:22:59.359 --> 0:23:03.280 business community, the anto US labor movement all would like 0:23:03.320 --> 0:23:05.679 to see Canada in this deal, and that obviously changes 0:23:05.720 --> 0:23:10.160 the equation. Is the President and negotiators for the administration 0:23:10.560 --> 0:23:14.040 using previous trade agreements in order to try to get 0:23:14.080 --> 0:23:18.160 this leverage. And I'm referencing, for example, the publication of 0:23:18.200 --> 0:23:23.399 the recently renegotiated free trade deal with South Korea. Yeah, 0:23:23.720 --> 0:23:25.520 so I think one of the themes that I am 0:23:25.680 --> 0:23:29.560 so over the weekend UH yesterday on Monday on Labor Day, UH, 0:23:29.720 --> 0:23:33.320 the U S Trade representatives off. It's finally published essentially 0:23:33.320 --> 0:23:38.600 the the text of renegotiated deal with South Korea. This 0:23:38.680 --> 0:23:41.840 was one of Donald Trump's targets to kind of rip 0:23:41.920 --> 0:23:44.560 up and and rework these these what he calls these 0:23:44.640 --> 0:23:47.760 terrible trade agreements. And the answer is, what we've learned 0:23:47.760 --> 0:23:50.480 from this is that it's a pretty mild rewrite of 0:23:50.480 --> 0:23:52.399 of that trade agreement. There's no one in the business 0:23:52.440 --> 0:23:55.520