1 00:00:05,120 --> 00:00:08,480 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along 2 00:00:08,520 --> 00:00:12,360 Speaker 1: with Jonathan Farrell and Lisa Abramowitz. Join us each day 3 00:00:12,400 --> 00:00:16,880 Speaker 1: for insight from the best an economics, geopolitics, finance and investment. 4 00:00:17,280 --> 00:00:22,119 Speaker 1: Subscribe to Bloomberg Surveillance on demand on Apple, Spotify, and 5 00:00:22,320 --> 00:00:26,600 Speaker 1: anywhere you get your podcasts, and always on Bloomberg dot Com, 6 00:00:26,640 --> 00:00:29,880 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. 7 00:00:30,600 --> 00:00:33,400 Speaker 2: Joining us now from Washington is Judy Sue, the acting 8 00:00:33,520 --> 00:00:36,280 Speaker 2: US Secretary of Labor, responding to the labor market report 9 00:00:36,320 --> 00:00:38,479 Speaker 2: from about an hour and fifteen minutes ago. Secretary Sue, 10 00:00:38,520 --> 00:00:41,040 Speaker 2: fantastic to catch up with you. Just your first reaction 11 00:00:41,320 --> 00:00:43,760 Speaker 2: to the payrolls report from earlier this morning and whether 12 00:00:43,760 --> 00:00:45,960 Speaker 2: we're seeing broad based strength in this economy or something 13 00:00:46,280 --> 00:00:47,760 Speaker 2: that's showing us things are slimming down. 14 00:00:49,440 --> 00:00:52,000 Speaker 3: Good morning, Jonathan, Thank you very much. This is a 15 00:00:52,040 --> 00:00:55,880 Speaker 3: good job report. It represents steady and stable growth, which 16 00:00:55,920 --> 00:00:59,120 Speaker 3: is what we want. It shows that the president's policies 17 00:00:59,320 --> 00:01:03,080 Speaker 3: bid nomice is working. It's combined with a three point 18 00:01:03,160 --> 00:01:06,759 Speaker 3: six percent unemployment rate. Many predictions were that it would 19 00:01:06,760 --> 00:01:10,240 Speaker 3: not get below four percent right after the pandemic induced 20 00:01:10,600 --> 00:01:14,520 Speaker 3: economic crisis for a long time, and these policies have 21 00:01:14,800 --> 00:01:17,440 Speaker 3: defied that. And in fact, we've seen less than four 22 00:01:17,480 --> 00:01:20,840 Speaker 3: percent unemployment for seventeen consecutive months now, which is the 23 00:01:20,880 --> 00:01:22,920 Speaker 3: longest duration since the nineteen sixties. 24 00:01:23,200 --> 00:01:24,759 Speaker 2: We know we've got a bit of tension out there 25 00:01:24,760 --> 00:01:26,480 Speaker 2: in the labor market at the moment, and you've been 26 00:01:26,480 --> 00:01:28,160 Speaker 2: involved in some of that, so I want to build 27 00:01:28,200 --> 00:01:29,840 Speaker 2: on some of it with you. We have a tentative 28 00:01:29,840 --> 00:01:32,560 Speaker 2: agreement covering West Coast Port workers that's been an issue 29 00:01:32,560 --> 00:01:34,080 Speaker 2: for a while. I know you've had some involvement, so 30 00:01:34,120 --> 00:01:36,760 Speaker 2: congratulations for that. We now have a new issue, so 31 00:01:36,800 --> 00:01:39,360 Speaker 2: let's talk about that one, the potential for three hundred 32 00:01:39,360 --> 00:01:42,880 Speaker 2: thousand UPS workers to go on strike. How involved are 33 00:01:42,920 --> 00:01:45,920 Speaker 2: you in those discussions with the union and UPS? 34 00:01:47,080 --> 00:01:49,960 Speaker 3: Yeah, thank you, Johnathan. Thanks for mentioning the port because 35 00:01:50,000 --> 00:01:52,960 Speaker 3: those parties worked very hard for over a year and 36 00:01:53,240 --> 00:01:55,320 Speaker 3: did reach a tentative agreement recently. It still has to 37 00:01:55,360 --> 00:01:57,640 Speaker 3: be ratified, so the process is not over, but it 38 00:01:57,720 --> 00:02:01,120 Speaker 3: demonstrates that collective bargaining were and that you can reach 39 00:02:01,160 --> 00:02:03,840 Speaker 3: agreements that are as the President often says, good for 40 00:02:03,960 --> 00:02:06,880 Speaker 3: workers where companies can profit, and that's good for the 41 00:02:06,920 --> 00:02:10,560 Speaker 3: economy as a whole, and there remain other negotiations that 42 00:02:10,600 --> 00:02:11,120 Speaker 3: are going on. 43 00:02:11,240 --> 00:02:11,400 Speaker 4: Right. 44 00:02:11,440 --> 00:02:14,679 Speaker 3: That's what it means to be in an economy where 45 00:02:14,760 --> 00:02:17,800 Speaker 3: workers have some power, where unions are at the table 46 00:02:18,080 --> 00:02:21,000 Speaker 3: and we are monitoring the negotiations, but trust that the 47 00:02:21,040 --> 00:02:22,120 Speaker 3: parties are going to do what they. 48 00:02:22,040 --> 00:02:24,000 Speaker 2: Need to do. Have you spoken to ups? Have you 49 00:02:24,040 --> 00:02:26,000 Speaker 2: spoken to the union involved this week? 50 00:02:27,360 --> 00:02:30,080 Speaker 3: Yeah, I've been in touch with both parties. I've also 51 00:02:30,200 --> 00:02:33,480 Speaker 3: just in my role as Acting Secretary, talked to parties 52 00:02:33,480 --> 00:02:37,320 Speaker 3: to these negotiations as well as unions and employers across 53 00:02:37,320 --> 00:02:40,560 Speaker 3: the economy. And so again I'm hopeful and know that 54 00:02:41,200 --> 00:02:44,000 Speaker 3: that they're going to continue to do what they need 55 00:02:44,040 --> 00:02:46,320 Speaker 3: to do and that a fair contract is something that 56 00:02:47,320 --> 00:02:49,840 Speaker 3: everybody hopes that there's there can be win wins, as 57 00:02:49,840 --> 00:02:50,959 Speaker 3: we saw at the Port Cercaly. 58 00:02:51,040 --> 00:02:52,920 Speaker 2: So I've heard that word thrown around quite a lot 59 00:02:52,960 --> 00:02:56,360 Speaker 2: by this administration. This word fair and language is important, 60 00:02:56,400 --> 00:02:57,040 Speaker 2: it's meaningful. 61 00:02:57,280 --> 00:02:58,160 Speaker 4: What would fair be. 62 00:03:00,400 --> 00:03:00,600 Speaker 5: Right? 63 00:03:00,760 --> 00:03:04,400 Speaker 3: So this president has been very clear that fairness and 64 00:03:04,480 --> 00:03:06,920 Speaker 3: equity is very important and that we can build an 65 00:03:06,960 --> 00:03:09,800 Speaker 3: economy to this fair and equitable meaning from the bottom 66 00:03:09,880 --> 00:03:11,760 Speaker 3: up in the middle out right where nobody gets left 67 00:03:11,760 --> 00:03:14,200 Speaker 3: behind where we invest in the middle class. You know, 68 00:03:14,240 --> 00:03:17,639 Speaker 3: Bidenomics is all about investing in America and in particular 69 00:03:17,680 --> 00:03:22,200 Speaker 3: industries like semiconductors and manufacturing and infrastructure, but also investing 70 00:03:22,200 --> 00:03:26,240 Speaker 3: in American workers and also increasing competition to decrease prices. 71 00:03:26,480 --> 00:03:28,640 Speaker 3: All those things are part of what President Biden believes 72 00:03:28,720 --> 00:03:32,000 Speaker 3: is fair and what we believe. This jobs report demonstrates 73 00:03:32,040 --> 00:03:33,600 Speaker 3: that a strong and fair economy can be. 74 00:03:33,880 --> 00:03:35,720 Speaker 2: That's so great, But we have to define what it 75 00:03:35,720 --> 00:03:39,040 Speaker 2: means for ups specifically, and this agreement they're going to 76 00:03:39,080 --> 00:03:41,440 Speaker 2: try and strike with this union, what would a fair 77 00:03:41,680 --> 00:03:43,720 Speaker 2: white increase be? Can you put a number on it? 78 00:03:44,640 --> 00:03:46,400 Speaker 3: Well, I will say the same thing that I said 79 00:03:46,440 --> 00:03:48,240 Speaker 3: when I was out the ports talking to the parties. 80 00:03:48,400 --> 00:03:50,200 Speaker 3: A fair contract is one that the members are going 81 00:03:50,240 --> 00:03:54,600 Speaker 3: to ratify. So a fair contract is something that workers 82 00:03:54,760 --> 00:03:55,920 Speaker 3: choose at the end of the day. 83 00:03:56,600 --> 00:03:58,200 Speaker 4: And again that process. 84 00:03:57,800 --> 00:04:00,000 Speaker 3: Is important for the parties to be able to negotiate, 85 00:04:00,320 --> 00:04:02,120 Speaker 3: to be able to stay at the bargaining table, and 86 00:04:02,200 --> 00:04:04,080 Speaker 3: to be able to resolve issues. And I do believe, 87 00:04:04,120 --> 00:04:06,160 Speaker 3: and as has been shown time and time again, there 88 00:04:06,160 --> 00:04:07,640 Speaker 3: are win win solutions. 89 00:04:07,160 --> 00:04:08,960 Speaker 2: There, don't We have to be careful there though, if 90 00:04:09,000 --> 00:04:15,200 Speaker 2: we start saying things like fair is whatever the union wants, right. 91 00:04:15,080 --> 00:04:17,360 Speaker 3: So I mean at the bargaining table, right, there's all 92 00:04:17,440 --> 00:04:20,800 Speaker 3: kinds of issues that we have seen throughout history that 93 00:04:21,279 --> 00:04:24,919 Speaker 3: when workers can bargain alongside employers who are committed to 94 00:04:25,200 --> 00:04:27,360 Speaker 3: you know, employers who understand that the best investment they 95 00:04:27,360 --> 00:04:29,880 Speaker 3: can make as an investment in their workers. There's all 96 00:04:30,000 --> 00:04:32,560 Speaker 3: kinds of things that can happen when it comes to 97 00:04:32,600 --> 00:04:35,520 Speaker 3: wages and working conditions and benefits. And those are the 98 00:04:35,640 --> 00:04:38,280 Speaker 3: kinds of things we want for every American worker, right. 99 00:04:38,320 --> 00:04:41,520 Speaker 3: We want stable work, we want a path to the 100 00:04:41,560 --> 00:04:45,760 Speaker 3: middle class. We want security and retirement, we want health benefits, 101 00:04:45,760 --> 00:04:48,279 Speaker 3: we want leave. Those are all things that the President 102 00:04:48,320 --> 00:04:50,720 Speaker 3: has prioritized, and I think those are all elements of 103 00:04:50,720 --> 00:04:52,040 Speaker 3: what it means to have a good job. 104 00:04:52,200 --> 00:04:54,040 Speaker 2: There are issues you're working on, Secretary, So I know 105 00:04:54,120 --> 00:04:57,280 Speaker 2: that your nomination hasn't been progressing. So that take you 106 00:04:57,320 --> 00:05:01,800 Speaker 2: from Acting Secretary of Labor to Secretary of Labor. What's 107 00:05:01,800 --> 00:05:03,560 Speaker 2: going on with that? Can you give us some information 108 00:05:03,640 --> 00:05:05,880 Speaker 2: on the timeline you're hoping that this gets out with? 109 00:05:07,360 --> 00:05:10,599 Speaker 3: So the President has expressed great confidence in me. He's 110 00:05:10,600 --> 00:05:13,840 Speaker 3: nominated me to serve as US Labor Secretary. I am 111 00:05:13,920 --> 00:05:16,839 Speaker 3: doing that job. The confirmation question is certainly one for 112 00:05:16,880 --> 00:05:19,680 Speaker 3: the Senate, but I've also appreciated the broad support I've 113 00:05:19,680 --> 00:05:21,919 Speaker 3: had from a number of Senators, and we remain hopeful 114 00:05:22,200 --> 00:05:24,919 Speaker 3: about confirmation. And meanwhile, I am here to do the 115 00:05:25,000 --> 00:05:26,839 Speaker 3: job and do what the President asks, which has helped 116 00:05:26,880 --> 00:05:29,600 Speaker 3: him finish the job. And we're again seeing progress and 117 00:05:29,640 --> 00:05:31,600 Speaker 3: continued growth, and we know we have more work to do, 118 00:05:31,640 --> 00:05:33,440 Speaker 3: and I'm all in to help get that done. 119 00:05:33,480 --> 00:05:36,080 Speaker 2: Do you concern it's holding up the Department's agenda at all? 120 00:05:37,560 --> 00:05:40,680 Speaker 3: No, So the work the Department continues full steam. We 121 00:05:40,800 --> 00:05:43,479 Speaker 3: are you know, we have enforcement work to do to 122 00:05:43,560 --> 00:05:47,559 Speaker 3: ensure that every worker gets the wages that they're owed 123 00:05:47,680 --> 00:05:49,800 Speaker 3: and comes home healthy and safe at the end of 124 00:05:49,839 --> 00:05:54,240 Speaker 3: the day. We are laser focused on connecting employers who 125 00:05:54,279 --> 00:05:58,160 Speaker 3: need workers to the good jobs that are being created 126 00:05:58,160 --> 00:06:01,760 Speaker 3: in the economy to people who are looking for those jobs. 127 00:06:01,760 --> 00:06:04,200 Speaker 3: So that's another big party for us, and those are 128 00:06:04,320 --> 00:06:08,000 Speaker 3: very important and we will continue to do them and 129 00:06:08,040 --> 00:06:10,200 Speaker 3: I'm proud to lead the Department in these efforts. 130 00:06:10,360 --> 00:06:12,200 Speaker 2: Secretly say, we're happy to catch up with you this morning. 131 00:06:12,360 --> 00:06:14,240 Speaker 2: Following the Piro Report. Thanks for being with us. 132 00:06:24,880 --> 00:06:27,159 Speaker 1: Uncertainty is an order and that is a good place 133 00:06:27,200 --> 00:06:30,640 Speaker 1: to start with. Randall Krassner, Randy, the Bloomberg interns have 134 00:06:30,720 --> 00:06:33,719 Speaker 1: invaded the building. I was speaking to a whip smart 135 00:06:34,040 --> 00:06:39,400 Speaker 1: intern yesterday, newly admitted after reading Krosner out of Babson College, 136 00:06:39,520 --> 00:06:43,080 Speaker 1: the Pride of Wellesley, Massachusetts, and that intern he said, 137 00:06:43,080 --> 00:06:45,479 Speaker 1: what should I read? And I said, You've got to 138 00:06:45,480 --> 00:06:50,520 Speaker 1: read Peter Bernstein. It's required at Chicago on risk and uncertainty. 139 00:06:51,080 --> 00:06:55,080 Speaker 1: Tell me right now how uncertain you are about the 140 00:06:55,120 --> 00:07:00,839 Speaker 1: American economy, the American labor economy, this jobs report pandemic. 141 00:07:02,600 --> 00:07:05,640 Speaker 6: I think the uncertainty is pretty high because, you know, 142 00:07:05,680 --> 00:07:10,000 Speaker 6: as you guys were discussing before, it seems like the 143 00:07:10,120 --> 00:07:13,280 Speaker 6: labor markets should have started to slow down a bit, 144 00:07:13,920 --> 00:07:16,280 Speaker 6: but we haven't seen much evidence of that. Certainly, the 145 00:07:16,320 --> 00:07:19,880 Speaker 6: ADP numbers yesterday and other data suggest that the lave 146 00:07:19,920 --> 00:07:21,280 Speaker 6: market's still pretty hot. 147 00:07:21,960 --> 00:07:22,160 Speaker 1: Yeah. 148 00:07:22,240 --> 00:07:25,000 Speaker 6: The long and variable lags is my you know, great 149 00:07:25,440 --> 00:07:31,640 Speaker 6: predecessor at University of Chicago, Treatman, had talked about. But man, 150 00:07:31,720 --> 00:07:34,440 Speaker 6: these are really getting to be very long on lags. 151 00:07:34,440 --> 00:07:36,320 Speaker 6: You start to think, you start to see something by 152 00:07:36,360 --> 00:07:39,360 Speaker 6: Now that's the uncertainty. How high is the FED going 153 00:07:39,400 --> 00:07:41,320 Speaker 6: to have to go? Because the fen's not going to 154 00:07:41,400 --> 00:07:43,280 Speaker 6: quit into the labor market if. 155 00:07:43,240 --> 00:07:45,720 Speaker 1: The FED in the mystery is how high do they 156 00:07:45,800 --> 00:07:50,880 Speaker 1: have to go? Are these normal meetings forward or the 157 00:07:50,920 --> 00:07:55,080 Speaker 1: PhDs the people that worship your financial economics? Do they 158 00:07:55,080 --> 00:07:58,960 Speaker 1: have to amend every discussion? Is they get out to 159 00:07:59,080 --> 00:08:00,160 Speaker 1: November one meets. 160 00:08:01,680 --> 00:08:01,800 Speaker 5: Well? 161 00:08:01,800 --> 00:08:03,000 Speaker 6: I think what they've got to do is try to 162 00:08:03,040 --> 00:08:06,400 Speaker 6: see are there some structural changes in the economy, and 163 00:08:06,440 --> 00:08:08,960 Speaker 6: I think there have been at least some changes, whether 164 00:08:08,960 --> 00:08:14,000 Speaker 6: they're permanent structural or not so sure about probably something structural. 165 00:08:14,080 --> 00:08:17,280 Speaker 6: For the labor market, we certainly see lower labor force participation. 166 00:08:17,360 --> 00:08:19,360 Speaker 6: A lot of older workers have said, there's no way 167 00:08:19,360 --> 00:08:21,600 Speaker 6: I'm going back into the labor market. I don't care 168 00:08:21,640 --> 00:08:24,000 Speaker 6: that wages are high. I know too many people who 169 00:08:24,040 --> 00:08:26,280 Speaker 6: didn't make it through COVID. I want to see my kids, 170 00:08:26,320 --> 00:08:31,120 Speaker 6: my grandkids. We also have seen with the very low 171 00:08:31,160 --> 00:08:35,439 Speaker 6: interest rates during during the pandemic and just coming out 172 00:08:35,440 --> 00:08:39,040 Speaker 6: of it, that everybody refinanced. So normally you have the 173 00:08:39,040 --> 00:08:43,040 Speaker 6: transmission mechanism of monetary policy having an impact on interest 174 00:08:43,080 --> 00:08:45,560 Speaker 6: rates and so having an impact on people's payments and houses, 175 00:08:45,559 --> 00:08:51,400 Speaker 6: et cetera. But so many people refinance into very low 176 00:08:51,679 --> 00:08:54,880 Speaker 6: fixed thirty year mortgages. It doesn't matter as much to 177 00:08:54,960 --> 00:08:57,440 Speaker 6: the economy that interest rates are going up. 178 00:08:57,880 --> 00:08:58,760 Speaker 4: Because people aren't. 179 00:08:58,760 --> 00:09:01,280 Speaker 6: People's income is not being affected by that, or at 180 00:09:01,320 --> 00:09:04,280 Speaker 6: least a smaller fraction of people's income is affected by 181 00:09:04,280 --> 00:09:04,839 Speaker 6: that than normal. 182 00:09:04,960 --> 00:09:06,719 Speaker 2: So, Randy, with that in mind, what's the appropriate role 183 00:09:06,720 --> 00:09:08,640 Speaker 2: of the feder Reserve with that as your backdrop, is 184 00:09:08,679 --> 00:09:11,880 Speaker 2: it to just keep pushing or acknowledge everything you just acknowledged. 185 00:09:13,120 --> 00:09:15,800 Speaker 6: Well, it might mean that they need to go further 186 00:09:16,040 --> 00:09:17,760 Speaker 6: than in the past. Now, I don't think they're going 187 00:09:17,800 --> 00:09:19,200 Speaker 6: to have to go as far as in the late 188 00:09:19,240 --> 00:09:23,400 Speaker 6: seventies early nineteen eighties, because fortunately they started before inflation 189 00:09:23,480 --> 00:09:26,280 Speaker 6: expectations got out of control, because that's what happened back then. 190 00:09:26,800 --> 00:09:30,839 Speaker 4: Inflation was in the load double digits. 191 00:09:30,800 --> 00:09:33,760 Speaker 6: And they had to bring in astrates to fifteen twenty 192 00:09:33,760 --> 00:09:38,600 Speaker 6: percent because the feathered lost credibility. Inflation expectation expectations went out, 193 00:09:38,640 --> 00:09:39,760 Speaker 6: but really not that much. 194 00:09:40,080 --> 00:09:41,440 Speaker 4: So that's a positive. 195 00:09:41,720 --> 00:09:43,679 Speaker 6: But it may need mean that they need to do 196 00:09:43,760 --> 00:09:46,720 Speaker 6: more work in raising rates to get the same impact 197 00:09:46,840 --> 00:09:48,880 Speaker 6: on the economy of sort of slowing taking some of 198 00:09:48,880 --> 00:09:51,679 Speaker 6: the heat, particularly out of the wage demands. 199 00:09:51,760 --> 00:09:54,040 Speaker 2: So, Randy, this debate often comes down to one or 200 00:09:54,040 --> 00:09:56,760 Speaker 2: two hikes. Now twenty five to fifty basis points is 201 00:09:56,880 --> 00:09:59,199 Speaker 2: it's nothing. What kind of numbers are you talking about 202 00:09:59,280 --> 00:09:59,840 Speaker 2: thinking about? 203 00:10:01,320 --> 00:10:05,560 Speaker 6: Well, I certainly I think we'll see what the data 204 00:10:05,559 --> 00:10:07,600 Speaker 6: say about the labor market. Maybe the labor market's about 205 00:10:07,640 --> 00:10:10,719 Speaker 6: to crack. Certainly that they don't suggest it. But if 206 00:10:10,720 --> 00:10:13,520 Speaker 6: it doesn't, they're going to keep at it. And you know, 207 00:10:13,520 --> 00:10:14,160 Speaker 6: I think they're going to. 208 00:10:14,200 --> 00:10:14,679 Speaker 4: End the year. 209 00:10:14,960 --> 00:10:16,520 Speaker 6: Those are the sticks and they will to five. 210 00:10:17,880 --> 00:10:20,560 Speaker 1: Okay, Randy, this is great. We're gonna get a jobs report, 211 00:10:20,920 --> 00:10:23,680 Speaker 1: we're going to talk about all the knobabbel and that. 212 00:10:23,800 --> 00:10:26,040 Speaker 1: But I want to bring it over to finance. I 213 00:10:26,040 --> 00:10:27,839 Speaker 1: want to bring it over to what you actually teach 214 00:10:27,840 --> 00:10:30,760 Speaker 1: at the Booth school. Can you tell the students at 215 00:10:30,800 --> 00:10:33,920 Speaker 1: Booth entering last week of August, whenever it is they 216 00:10:33,920 --> 00:10:36,880 Speaker 1: get through their eight week orientation, can you tell them 217 00:10:36,880 --> 00:10:40,520 Speaker 1: that we've reached financial stability. 218 00:10:41,720 --> 00:10:42,400 Speaker 4: We're not sure. 219 00:10:42,760 --> 00:10:45,600 Speaker 6: So it gets back to the uncertainty that you had 220 00:10:45,600 --> 00:10:48,920 Speaker 6: talked about before, because obviously, with the very rapid increase 221 00:10:48,960 --> 00:10:52,240 Speaker 6: in interest rates. We've had an impact on banks like 222 00:10:52,280 --> 00:10:56,760 Speaker 6: Silicon Valley banks. They thought they were geniuses by buying 223 00:10:57,040 --> 00:11:00,600 Speaker 6: long dated securities. That was fine until just rates went 224 00:11:00,679 --> 00:11:03,480 Speaker 6: up so much that the valuable securities plummeted. And uh, 225 00:11:03,920 --> 00:11:07,160 Speaker 6: You've got some other other institutions that also have a 226 00:11:07,200 --> 00:11:10,319 Speaker 6: lot of effectively long term fixed rate things in their 227 00:11:10,559 --> 00:11:14,599 Speaker 6: talent sheet. Long term is commercial real estate, particularly commercial 228 00:11:14,480 --> 00:11:17,280 Speaker 6: real estate. That's I think going to be a challenge. 229 00:11:17,400 --> 00:11:20,040 Speaker 6: And so we're going to see how that that plays out. 230 00:11:20,360 --> 00:11:22,480 Speaker 6: And I think when we start getting the next round 231 00:11:22,480 --> 00:11:24,680 Speaker 6: of bank earning reports right there may be a little 232 00:11:24,720 --> 00:11:25,720 Speaker 6: bit of tumult around that. 233 00:11:25,840 --> 00:11:27,960 Speaker 1: I mean, I'm not going to miss words, Professor Krausner. 234 00:11:28,040 --> 00:11:30,800 Speaker 1: I look at the stress Trust. The stress tests is 235 00:11:30,840 --> 00:11:33,199 Speaker 1: a comedy. I mean, I just I just don't think 236 00:11:33,240 --> 00:11:37,040 Speaker 1: they had any value at all. But after SVB from 237 00:11:37,040 --> 00:11:41,920 Speaker 1: where you sit, have we seen a new enhanced financial supervision? 238 00:11:42,320 --> 00:11:44,440 Speaker 1: Is there something new in the religion of looking at 239 00:11:44,480 --> 00:11:46,960 Speaker 1: the banks after what we saw a number of weeks ago. 240 00:11:48,280 --> 00:11:50,280 Speaker 6: I think one thing that they are now focusing on 241 00:11:50,400 --> 00:11:55,000 Speaker 6: is interest rate risk. So other signatories to the so 242 00:11:55,080 --> 00:11:58,600 Speaker 6: called Basil three regulations the capital standards that came out 243 00:11:58,640 --> 00:12:03,120 Speaker 6: from from the financial crisis. Virtually everybody has an important 244 00:12:03,200 --> 00:12:07,800 Speaker 6: rule related to interest rates and interest rate risk. We 245 00:12:07,840 --> 00:12:10,360 Speaker 6: didn't have that in the US, and so I think 246 00:12:10,400 --> 00:12:12,440 Speaker 6: that's going to be the key thing that changes. And 247 00:12:12,480 --> 00:12:15,360 Speaker 6: my hunches at my former colleagues at the FED and 248 00:12:15,440 --> 00:12:18,920 Speaker 6: the other regulators are keenly focused on that issue now 249 00:12:19,040 --> 00:12:19,839 Speaker 6: and they weren't before. 250 00:12:20,080 --> 00:12:22,920 Speaker 2: Randy Steiklaus jobs repul seven minutes to why we'll catch 251 00:12:23,000 --> 00:12:24,400 Speaker 2: up with Randy christ went just a moment to get 252 00:12:24,400 --> 00:12:25,319 Speaker 2: his reaction to that. 253 00:12:30,760 --> 00:12:33,240 Speaker 1: We're going to see some bond market movement. Here is 254 00:12:33,400 --> 00:12:35,920 Speaker 1: we digest this data? Joining us on Lindsay Pigs, a 255 00:12:36,000 --> 00:12:39,360 Speaker 1: chief economist at Stefel as well, and to me, it's 256 00:12:39,360 --> 00:12:43,240 Speaker 1: a hallmark announcement. Lindsay, with the revisions, let me go 257 00:12:43,280 --> 00:12:46,400 Speaker 1: through the math again, it's simple to Eldra can handle this, Lindsay. 258 00:12:46,480 --> 00:12:49,480 Speaker 1: I can't do the differentuential equations like you, and that 259 00:12:49,600 --> 00:12:52,679 Speaker 1: is two hundred and nine thousand, take away one hundred 260 00:12:52,679 --> 00:12:55,880 Speaker 1: and ten thousand. Can you frame this out with the revisions? 261 00:12:56,040 --> 00:12:58,200 Speaker 1: Is a sub one hundred thousand report? 262 00:12:59,000 --> 00:13:01,800 Speaker 7: Well, I do think it fell well short of expectations, 263 00:13:01,960 --> 00:13:05,840 Speaker 7: but that being said, it's still a solid headline number, 264 00:13:06,200 --> 00:13:09,160 Speaker 7: and for the FED, the focus is not that top 265 00:13:09,200 --> 00:13:12,760 Speaker 7: line non farm pail WORL report. They're looking at the details. 266 00:13:12,760 --> 00:13:16,040 Speaker 7: They're looking at the inflationary components, and with the unemployment 267 00:13:16,080 --> 00:13:20,600 Speaker 7: rate declining, wage growth gaining momentum. This is the exact 268 00:13:20,640 --> 00:13:23,280 Speaker 7: opposite of what the FED wanted to see. This keeps 269 00:13:23,320 --> 00:13:26,439 Speaker 7: the FED on the path for an additional rate increase 270 00:13:26,520 --> 00:13:29,360 Speaker 7: later this month, and depending on what we see from 271 00:13:29,360 --> 00:13:33,080 Speaker 7: the inflation data next week, we could see another rate 272 00:13:33,160 --> 00:13:34,760 Speaker 7: increase shortly thereafter. 273 00:13:34,880 --> 00:13:37,720 Speaker 1: Our audiences on radio and television are saying, wait, wage 274 00:13:37,720 --> 00:13:41,280 Speaker 1: growth four point four percent, take away five or six 275 00:13:41,320 --> 00:13:44,520 Speaker 1: percent inflation, depending on whether I'm buying stake this weekend, 276 00:13:45,000 --> 00:13:48,319 Speaker 1: And the answer is they're not getting ahead. Which nominal 277 00:13:48,480 --> 00:13:51,679 Speaker 1: wage growth does a FED need to see? Three point 278 00:13:51,720 --> 00:13:55,000 Speaker 1: five percent? Dare I say two point nine percent? How 279 00:13:55,040 --> 00:13:56,920 Speaker 1: low do we have to bring down wage growth? 280 00:13:57,600 --> 00:14:00,480 Speaker 7: I think? I think if we saw a two handle, 281 00:14:00,559 --> 00:14:03,000 Speaker 7: the FED would be very comfortable with that. I think 282 00:14:03,040 --> 00:14:05,840 Speaker 7: that would give the FED confidence that we're on a 283 00:14:05,880 --> 00:14:09,600 Speaker 7: sustainable downward trajectory. That's what the FED wants to see. 284 00:14:09,640 --> 00:14:12,160 Speaker 7: It's not about getting inflation under control from eight down 285 00:14:12,200 --> 00:14:15,640 Speaker 7: to six. It's continuing that trajectory back to that two 286 00:14:15,720 --> 00:14:16,679 Speaker 7: percent time, giving. 287 00:14:16,520 --> 00:14:20,720 Speaker 1: The access that on a two point nine percent nominal 288 00:14:20,880 --> 00:14:23,040 Speaker 1: wage growth, we're distant from that. 289 00:14:23,040 --> 00:14:23,440 Speaker 4: Aren't we? 290 00:14:23,640 --> 00:14:26,800 Speaker 7: Absolutely? Absolutely, And one of the biggest fears for the 291 00:14:26,840 --> 00:14:30,320 Speaker 7: FED is that wages are continuing to rise. Growth is 292 00:14:30,360 --> 00:14:34,680 Speaker 7: continuing to accelerate without any improvements in productivity, and so 293 00:14:34,800 --> 00:14:37,720 Speaker 7: there we start to see this wage price spiral leaving 294 00:14:37,760 --> 00:14:41,560 Speaker 7: the economy behind. Growth is slowing, we know that, but 295 00:14:41,640 --> 00:14:45,360 Speaker 7: if underlying wage components continue to increase, what is the 296 00:14:45,400 --> 00:14:47,920 Speaker 7: economy gaining from that? It goes back to the old 297 00:14:47,920 --> 00:14:50,600 Speaker 7: adage of we could hire a million workers to make windows, 298 00:14:50,640 --> 00:14:54,600 Speaker 7: a million workers to break windows. If the supply of 299 00:14:54,720 --> 00:14:56,960 Speaker 7: labor falls short of that, wages go up, but we're 300 00:14:57,000 --> 00:14:58,520 Speaker 7: not adding anything to the economy. 301 00:14:58,640 --> 00:15:01,200 Speaker 1: Want to make clear, we've really got of flightiness on 302 00:15:01,240 --> 00:15:03,440 Speaker 1: the data screen as well. Right now red and green 303 00:15:03,480 --> 00:15:06,080 Speaker 1: in the screen features a negative eight Nasdaq barely to 304 00:15:06,120 --> 00:15:07,000 Speaker 1: the green side. 305 00:15:07,480 --> 00:15:08,200 Speaker 5: As well. 306 00:15:08,280 --> 00:15:10,560 Speaker 1: In the yield space, there is some movement four point 307 00:15:10,640 --> 00:15:12,520 Speaker 1: ninety six percent of the two year the ten year 308 00:15:12,640 --> 00:15:15,640 Speaker 1: yield four point zero four percent. These are all new 309 00:15:15,720 --> 00:15:18,000 Speaker 1: numbers for me. They're really a shock to see in 310 00:15:18,040 --> 00:15:22,480 Speaker 1: this high four point zero one percent as well, how 311 00:15:22,520 --> 00:15:25,360 Speaker 1: many quarters of you know, as you say, two oh 312 00:15:25,520 --> 00:15:29,440 Speaker 1: nine is still a substantial non firm payrolls number. But 313 00:15:29,520 --> 00:15:31,760 Speaker 1: if we developed a three month moving average of one 314 00:15:31,840 --> 00:15:34,320 Speaker 1: hundred and ninety thousand, my reading is that doesn't get 315 00:15:34,320 --> 00:15:35,200 Speaker 1: it done for the FED. 316 00:15:35,480 --> 00:15:36,400 Speaker 3: Well, there's still. 317 00:15:36,160 --> 00:15:38,640 Speaker 7: Got to sustain where wages. At that point, we. 318 00:15:38,800 --> 00:15:40,800 Speaker 1: Have to see inge everything on wages. 319 00:15:40,880 --> 00:15:45,240 Speaker 7: Well, inflation wages, that's one component of inflation, but we 320 00:15:45,360 --> 00:15:47,480 Speaker 7: need to get that under control. We need to see 321 00:15:47,480 --> 00:15:50,880 Speaker 7: some of that tight labor market conditions ease so that 322 00:15:50,920 --> 00:15:54,160 Speaker 7: the FED feels more confident that wages will begin to ease. 323 00:15:54,440 --> 00:15:56,600 Speaker 7: Now that doesn't mean that they're going to tackle overall 324 00:15:56,640 --> 00:16:00,200 Speaker 7: inflation then, just by getting the labor market to to 325 00:16:00,680 --> 00:16:05,040 Speaker 7: become less tight. There's other components of inflation, but that's 326 00:16:05,120 --> 00:16:08,120 Speaker 7: the component that the Fed mean control. That will determine 327 00:16:08,160 --> 00:16:11,680 Speaker 7: the terminal level. The other components of inflation will determine 328 00:16:11,680 --> 00:16:14,880 Speaker 7: how long the FED is forced to maintain that elevated 329 00:16:14,960 --> 00:16:15,480 Speaker 7: level of rating. 330 00:16:15,640 --> 00:16:19,280 Speaker 1: Give us a steephul granularity of what mister McKee talked about, 331 00:16:19,320 --> 00:16:21,640 Speaker 1: which is a racial makeup of jobs. You saw some 332 00:16:21,760 --> 00:16:26,520 Speaker 1: higher unemployment, some jumps in unemployment among minorities, and also 333 00:16:26,640 --> 00:16:30,560 Speaker 1: on the education basis as well. The stereotype within financial 334 00:16:30,640 --> 00:16:33,880 Speaker 1: media is we have a lot of service sector bartenders 335 00:16:33,880 --> 00:16:37,360 Speaker 1: and waitresses still being employed. Biat s are a different 336 00:16:37,400 --> 00:16:38,000 Speaker 1: story here. 337 00:16:38,280 --> 00:16:41,320 Speaker 7: Well, I think there's two different storylines. Certainly when we 338 00:16:41,360 --> 00:16:45,120 Speaker 7: look at where the most unemployment is gaining momentum, that's 339 00:16:45,160 --> 00:16:48,520 Speaker 7: at the lower skills level. We're starting to see technology 340 00:16:48,560 --> 00:16:51,160 Speaker 7: replace those lower skills. This was something that was happening 341 00:16:51,200 --> 00:16:53,640 Speaker 7: before the pandemic, but this is a trend that has 342 00:16:53,640 --> 00:16:57,400 Speaker 7: certainly been exacerbated more recently. But I also think that 343 00:16:57,520 --> 00:17:01,600 Speaker 7: we haven't yet seen that cyclical component suggesting that weakness 344 00:17:01,960 --> 00:17:04,640 Speaker 7: is lurking around the corner just yet. As we heard 345 00:17:04,640 --> 00:17:08,720 Speaker 7: about leisure and hospitality still posting a sizable increase this month, 346 00:17:09,119 --> 00:17:11,840 Speaker 7: that would be assumed to be the one area where 347 00:17:11,840 --> 00:17:17,120 Speaker 7: we would start to see that weakness gain credibility gain evidence, 348 00:17:17,280 --> 00:17:19,119 Speaker 7: but we haven't seen that quite yet. 349 00:17:19,400 --> 00:17:22,440 Speaker 1: Is it still a pandemic tinged report? 350 00:17:24,200 --> 00:17:26,280 Speaker 7: I don't know if we can necessarily say that the 351 00:17:26,280 --> 00:17:30,480 Speaker 7: pandemic is influencing this report, but I think the aftermath 352 00:17:30,520 --> 00:17:34,639 Speaker 7: of the pandemic, the change in psychology is impacting this 353 00:17:34,760 --> 00:17:38,320 Speaker 7: report because we're still seeing millions of workers sitting on 354 00:17:38,359 --> 00:17:42,280 Speaker 7: the sideline, not actively participating as we would expect in 355 00:17:42,320 --> 00:17:45,000 Speaker 7: the traditional manner in the labor force. So we do 356 00:17:45,160 --> 00:17:48,320 Speaker 7: need to still think about providing an incentive to pull 357 00:17:48,359 --> 00:17:51,240 Speaker 7: some of those sideline workers in. That may help to 358 00:17:51,320 --> 00:17:55,639 Speaker 7: expand the labor supply and then organically reduce wages. But 359 00:17:55,680 --> 00:17:58,040 Speaker 7: we're not going to see that downward pressure unless we 360 00:17:58,080 --> 00:18:01,960 Speaker 7: see demand for labor precipitous decline or the supply of 361 00:18:02,040 --> 00:18:03,600 Speaker 7: workers dramatically increased. 362 00:18:03,680 --> 00:18:06,560 Speaker 1: We do you, Thank you so much, Lindsay from Steford. 363 00:18:17,760 --> 00:18:19,800 Speaker 2: We can catch up with Christian Horner, the team principal 364 00:18:20,000 --> 00:18:23,040 Speaker 2: for Red Bull Racing. Christian, wonderful to catch up with you, sir. 365 00:18:23,119 --> 00:18:26,360 Speaker 2: Going into race weekend in Silverston. Can we start there? 366 00:18:26,359 --> 00:18:28,720 Speaker 2: As my colleague Tom pointed out, just how special is 367 00:18:28,760 --> 00:18:30,879 Speaker 2: this race, this circuit for you and the team. 368 00:18:31,400 --> 00:18:33,800 Speaker 4: Well, look, it's one of the best circuits on the tour. 369 00:18:34,520 --> 00:18:37,960 Speaker 5: It's fast, it's demanding, it's source of men out from 370 00:18:38,000 --> 00:18:41,960 Speaker 5: the boys, it's a big challenge, and it's it's old school. 371 00:18:42,000 --> 00:18:43,440 Speaker 4: I mean, this track goes back. 372 00:18:43,240 --> 00:18:46,720 Speaker 5: To just after the Second World War, so an old 373 00:18:46,760 --> 00:18:50,480 Speaker 5: airfield with a brims of road converted into a racing 374 00:18:50,520 --> 00:18:52,840 Speaker 5: circuit that has developed over the years, but. 375 00:18:52,800 --> 00:18:54,840 Speaker 4: It's one of the big tests for the drivers and 376 00:18:54,880 --> 00:18:55,400 Speaker 4: the teams. 377 00:18:55,920 --> 00:18:59,000 Speaker 2: Max was absolutely dominant last weekend. There was this amazing 378 00:18:59,040 --> 00:19:00,760 Speaker 2: moment at the end of the with a couple of 379 00:19:00,840 --> 00:19:03,280 Speaker 2: laps to go, he came in for a pit stop 380 00:19:03,640 --> 00:19:06,399 Speaker 2: just to get the quickest lap. Christin, can you describe 381 00:19:06,520 --> 00:19:09,520 Speaker 2: the guy that you're working with every single day? How 382 00:19:09,560 --> 00:19:10,920 Speaker 2: special is Max Verstappen. 383 00:19:12,040 --> 00:19:12,800 Speaker 4: I think what we're. 384 00:19:12,600 --> 00:19:14,960 Speaker 5: Witnessing at the moment is a sportsman that's just a 385 00:19:15,200 --> 00:19:17,399 Speaker 5: really at the top of his game, and you know, 386 00:19:17,440 --> 00:19:20,159 Speaker 5: he's a joy to work with, and he continues to 387 00:19:20,240 --> 00:19:24,560 Speaker 5: surprise us with the levels that he's that he's reaching, 388 00:19:24,600 --> 00:19:26,919 Speaker 5: and you know the hype that he's hitting. 389 00:19:27,000 --> 00:19:30,120 Speaker 4: So yeah, as I. 390 00:19:30,080 --> 00:19:33,960 Speaker 5: Say, nothing is, nothing is, he continues just to continue 391 00:19:34,000 --> 00:19:35,080 Speaker 5: to surprise us at the moment. 392 00:19:35,160 --> 00:19:37,040 Speaker 4: But he's in the form of his life and I 393 00:19:37,040 --> 00:19:37,960 Speaker 4: think there's more to come. 394 00:19:38,359 --> 00:19:41,000 Speaker 1: Christian, I think Americans are fascinated by this. I look 395 00:19:41,000 --> 00:19:45,040 Speaker 1: at the wonderful coverage Sky Sports is doing and basically 396 00:19:45,080 --> 00:19:48,440 Speaker 1: they forget about vers step and five minutes into the race, 397 00:19:48,760 --> 00:19:51,239 Speaker 1: to look at all the Netflix sub races and all 398 00:19:51,280 --> 00:19:54,199 Speaker 1: that baloney. We have an America, a guy for the 399 00:19:54,240 --> 00:19:58,680 Speaker 1: Los Angeles Angels in baseball name O Tony, who's once 400 00:19:58,720 --> 00:20:01,639 Speaker 1: in a generation, is for stepping like that. 401 00:20:03,119 --> 00:20:06,200 Speaker 4: I think, Look, we're in a healthy period of Formula one. 402 00:20:06,240 --> 00:20:09,160 Speaker 5: We've got Lewis Hamilton, the most successful driver of all 403 00:20:09,200 --> 00:20:12,439 Speaker 5: time out there. We've got Fernando Orlonzo that's doing it 404 00:20:12,480 --> 00:20:15,199 Speaker 5: for the old guys. And you know, we've got this 405 00:20:15,280 --> 00:20:18,119 Speaker 5: emergence of Max the staff, and I think only in 406 00:20:18,160 --> 00:20:21,000 Speaker 5: time will history judge just how good he is. But 407 00:20:21,119 --> 00:20:24,400 Speaker 5: what we're seeing at the moment is certainly something pretty special, 408 00:20:24,440 --> 00:20:26,720 Speaker 5: particularly with the rot results that he's ratcheting up. 409 00:20:26,960 --> 00:20:29,919 Speaker 2: Christian, talk to me about how, from a manager's perspective, 410 00:20:30,080 --> 00:20:33,360 Speaker 2: you maintain harmony within the team. When he took that 411 00:20:33,520 --> 00:20:36,080 Speaker 2: point for the quickest lap last weekend, that was taken 412 00:20:36,080 --> 00:20:39,960 Speaker 2: away from Checko, his teammate within Red Bull, Christian, can 413 00:20:39,960 --> 00:20:41,920 Speaker 2: you tell me as a manager how you're maintaining the 414 00:20:41,960 --> 00:20:44,800 Speaker 2: harmony when you have to provide the resources for someone 415 00:20:44,840 --> 00:20:48,560 Speaker 2: who's dominant Max and maintain the confidence of his teammate. 416 00:20:49,400 --> 00:20:50,080 Speaker 4: Well, I think he's just. 417 00:20:50,040 --> 00:20:52,359 Speaker 5: Dealing with openness and honesty, and I think got Max 418 00:20:52,640 --> 00:20:55,520 Speaker 5: uh deserved or urged himself the opportunity to have a 419 00:20:55,600 --> 00:20:57,800 Speaker 5: go at that fastest lab. 420 00:20:57,880 --> 00:20:59,680 Speaker 4: He created a pitstof for himself. 421 00:21:00,440 --> 00:21:01,679 Speaker 5: He was going to have a go at it on 422 00:21:01,720 --> 00:21:03,920 Speaker 5: the on al tars and for us it's actually less 423 00:21:03,960 --> 00:21:06,400 Speaker 5: risk to put him on a set of newer tars and. 424 00:21:06,359 --> 00:21:10,120 Speaker 4: Take the PIDs stop. So yeah, he earns himself that right. 425 00:21:10,160 --> 00:21:12,200 Speaker 5: And I think the relationship between the two guys is 426 00:21:12,640 --> 00:21:14,880 Speaker 5: is strong and the most important thing is that they 427 00:21:14,920 --> 00:21:17,840 Speaker 5: talk to each other. They communicate. When there's an issue, 428 00:21:17,960 --> 00:21:19,879 Speaker 5: they talk about it. We get it on the table 429 00:21:19,960 --> 00:21:21,840 Speaker 5: and and get it addressed. 430 00:21:21,920 --> 00:21:23,760 Speaker 2: Can we expect check Out to be racing for red 431 00:21:23,760 --> 00:21:24,400 Speaker 2: Bull next year? 432 00:21:24,440 --> 00:21:27,080 Speaker 4: Then Christian, Yeah, he's got a contract. 433 00:21:27,119 --> 00:21:28,639 Speaker 5: He's with us till you know, till the end of 434 00:21:28,680 --> 00:21:31,440 Speaker 5: twenty four so and we're happy other than atother contract, 435 00:21:31,440 --> 00:21:35,000 Speaker 5: we're happy with you know, the overall performance of him. 436 00:21:35,040 --> 00:21:38,960 Speaker 5: He's had some difficult Saturdays recently, but his racing has 437 00:21:39,000 --> 00:21:41,720 Speaker 5: been great and hopefully the confidence from that podium in 438 00:21:41,760 --> 00:21:44,280 Speaker 5: Austria is going to put him, you know, back on 439 00:21:44,320 --> 00:21:45,440 Speaker 5: the pace here on Saturday. 440 00:21:45,600 --> 00:21:47,840 Speaker 2: Let's talk about someone else on the grid who's unhappy. 441 00:21:48,000 --> 00:21:52,880 Speaker 2: Lewis Hamilton unhappy with the dominance of Red Bull. Unsurprisingly Christian, 442 00:21:52,880 --> 00:21:55,520 Speaker 2: he's had some recommendations on what they can do about that. 443 00:21:55,600 --> 00:21:57,240 Speaker 2: Maybe we can set a time limit for when we 444 00:21:57,280 --> 00:22:00,119 Speaker 2: start to plan for next year's race. Car Chris, and 445 00:22:00,200 --> 00:22:02,040 Speaker 2: what's your response to people who were fed up with 446 00:22:02,080 --> 00:22:04,080 Speaker 2: the dominance of your team. 447 00:22:04,640 --> 00:22:06,800 Speaker 5: Well, look, it's flat threading in many respects. The sport 448 00:22:06,880 --> 00:22:08,959 Speaker 5: goes in cycles. I mean Mercedes, I mean how many 449 00:22:09,040 --> 00:22:10,560 Speaker 5: years did they dominate and nobody got. 450 00:22:10,440 --> 00:22:13,760 Speaker 4: Anywhere near seeing them for about seven years. 451 00:22:13,840 --> 00:22:18,640 Speaker 5: So we're we're performing at an incredibly high level. 452 00:22:18,640 --> 00:22:21,600 Speaker 4: The team is doing his job and. 453 00:22:21,880 --> 00:22:24,240 Speaker 5: The others you know, will be putting a target on 454 00:22:24,359 --> 00:22:26,119 Speaker 5: us and they'll be trying to catch. 455 00:22:26,160 --> 00:22:27,400 Speaker 4: And I think. 456 00:22:27,240 --> 00:22:29,479 Speaker 5: With stability of the rules that the field is going 457 00:22:29,520 --> 00:22:33,560 Speaker 5: to converge. It's onny a matter of times. So and 458 00:22:33,560 --> 00:22:36,080 Speaker 5: so yeah, I think trying to get everybody to start 459 00:22:36,119 --> 00:22:38,640 Speaker 5: to design their car at you know, a start, they 460 00:22:38,840 --> 00:22:42,639 Speaker 5: would would just be impossible to manage and police. 461 00:22:43,080 --> 00:22:46,040 Speaker 1: Christian, our producer, are the guy that tells us what 462 00:22:46,080 --> 00:22:49,000 Speaker 1: to do every day. Grew up in Western Australia. So 463 00:22:49,040 --> 00:22:50,880 Speaker 1: he says, we're not doing the interview, if we don't 464 00:22:50,920 --> 00:22:54,359 Speaker 1: talk about your third driver, Daniel Riccardo. I think the 465 00:22:54,440 --> 00:22:58,359 Speaker 1: people looking at Daniel Riccardo in America are saying, what 466 00:22:58,400 --> 00:23:00,480 Speaker 1: does this guy do? Do you do you want to 467 00:23:00,520 --> 00:23:04,439 Speaker 1: retain a third driver like Daniel Ricardo or is it 468 00:23:04,480 --> 00:23:06,840 Speaker 1: a good feeling for Red Bull if he goes off 469 00:23:07,040 --> 00:23:08,680 Speaker 1: to someone else's is rumored. 470 00:23:09,880 --> 00:23:12,320 Speaker 5: Well, I gave him that chance because I I thought 471 00:23:12,359 --> 00:23:15,000 Speaker 5: Formula one still needed Daniel and I think that he's. 472 00:23:14,800 --> 00:23:19,280 Speaker 4: Still got more to give. We know how talented he is. 473 00:23:19,320 --> 00:23:22,560 Speaker 5: He just needs to rediscover his form and his mojo, 474 00:23:22,680 --> 00:23:25,080 Speaker 5: which he seems to be doing certainly in a virtual world. 475 00:23:25,080 --> 00:23:28,000 Speaker 4: And he's testing our car in the real world. 476 00:23:27,760 --> 00:23:30,639 Speaker 5: On Tuesday and Wednesday of next week, and you know, 477 00:23:30,680 --> 00:23:33,199 Speaker 5: we'll start to see where he's at in relation to 478 00:23:33,240 --> 00:23:34,040 Speaker 5: the race drivers. 479 00:23:34,080 --> 00:23:35,440 Speaker 4: So it'd be great to. 480 00:23:35,359 --> 00:23:38,239 Speaker 5: See Daniel back on the grid next year, even if 481 00:23:38,280 --> 00:23:39,280 Speaker 5: he's not in a repel car. 482 00:23:40,240 --> 00:23:43,040 Speaker 1: Christian a sensitive issue which we see in the danger 483 00:23:43,119 --> 00:23:46,160 Speaker 1: of Formula one and all the safety efforts that are made. 484 00:23:46,520 --> 00:23:50,200 Speaker 1: There have been two really difficult deaths in Formula one, 485 00:23:50,280 --> 00:23:54,679 Speaker 1: including a tragedy recently, I believe in Belgium. What do 486 00:23:54,720 --> 00:23:58,200 Speaker 1: you do day to day, tick by tick to make 487 00:23:58,240 --> 00:24:03,320 Speaker 1: the sports safer. What's the next thing to make it safer? 488 00:24:03,520 --> 00:24:05,760 Speaker 5: Well, look, I think the FIA do a great job 489 00:24:05,800 --> 00:24:07,320 Speaker 5: in terms of the safety of these cars. 490 00:24:07,359 --> 00:24:10,119 Speaker 4: It's just you know, compared to where they were just 491 00:24:10,160 --> 00:24:10,959 Speaker 4: even a few years ago. 492 00:24:11,000 --> 00:24:13,920 Speaker 5: If you look at Roman Grossan's accident in Bahrain, thing 493 00:24:14,000 --> 00:24:15,760 Speaker 5: that a human could actually survive that. 494 00:24:15,960 --> 00:24:19,639 Speaker 4: Is is beyond belief. But you know, you can always 495 00:24:19,680 --> 00:24:20,119 Speaker 4: do more, and. 496 00:24:20,119 --> 00:24:24,159 Speaker 5: The FIA are constantly pushing us, you know, with the cars, 497 00:24:24,200 --> 00:24:26,560 Speaker 5: but also now the circuits. I think they you know, 498 00:24:26,560 --> 00:24:29,560 Speaker 5: there's circuits that we need to look at because we 499 00:24:29,600 --> 00:24:34,240 Speaker 5: can only take the car so far. But you know, 500 00:24:34,840 --> 00:24:37,040 Speaker 5: I think still more that we can do as a 501 00:24:37,080 --> 00:24:38,320 Speaker 5: collective with the FIA. 502 00:24:38,560 --> 00:24:41,679 Speaker 1: On certain circuits there seem to be I mean I 503 00:24:41,720 --> 00:24:44,840 Speaker 1: was barefoled last week watching every minute of it and 504 00:24:45,040 --> 00:24:48,000 Speaker 1: and really, you know what your team did, and I 505 00:24:48,080 --> 00:24:51,080 Speaker 1: look at I guess it's called the stewards where the 506 00:24:51,119 --> 00:24:53,439 Speaker 1: track isn't working out and people are going off the 507 00:24:53,480 --> 00:24:56,359 Speaker 1: track and there's twelve hundred violations. I mean, we don't 508 00:24:56,359 --> 00:24:59,160 Speaker 1: see that in American sport. Are we going to see 509 00:24:59,160 --> 00:25:03,080 Speaker 1: that again? It's Ulverstone where the quality of the driving 510 00:25:03,200 --> 00:25:05,880 Speaker 1: is so good that the track doesn't fit the excellence 511 00:25:06,200 --> 00:25:07,000 Speaker 1: of the drivers. 512 00:25:08,080 --> 00:25:08,840 Speaker 4: Yeah, hopefully not. 513 00:25:08,960 --> 00:25:11,560 Speaker 5: I mean I think that was something that needs to 514 00:25:11,560 --> 00:25:14,159 Speaker 5: be addressed moving forward. I think the problem is is 515 00:25:14,320 --> 00:25:16,760 Speaker 5: and it was, you know, two corners that are inviting 516 00:25:16,800 --> 00:25:18,760 Speaker 5: the drivers to go out there, and of course they 517 00:25:18,800 --> 00:25:19,760 Speaker 5: can't see the lines. 518 00:25:19,800 --> 00:25:23,600 Speaker 4: They're driving by feeling. I think that if there. 519 00:25:23,440 --> 00:25:26,679 Speaker 5: Was a piece of gravel strip there or you know, 520 00:25:26,720 --> 00:25:28,240 Speaker 5: something like that, they wouldn't. 521 00:25:27,920 --> 00:25:29,720 Speaker 4: Go near it. If there was a wall where they 522 00:25:29,720 --> 00:25:30,480 Speaker 4: certainly wouldn't go. 523 00:25:31,200 --> 00:25:34,199 Speaker 5: So yeah, I think that there's things that can be 524 00:25:34,240 --> 00:25:37,720 Speaker 5: done to, you know, to improve the situation. Hopefully it 525 00:25:37,720 --> 00:25:41,000 Speaker 5: won't be an issue here, but you've got to stay 526 00:25:41,000 --> 00:25:41,560 Speaker 5: in the lines. 527 00:25:41,800 --> 00:25:44,920 Speaker 2: I do want to finish on safety and the track. Christian, 528 00:25:45,119 --> 00:25:47,560 Speaker 2: there are some worries that maybe we have some protests, 529 00:25:47,920 --> 00:25:51,560 Speaker 2: the climate change protesters that we've seen protests various sports 530 00:25:51,600 --> 00:25:54,399 Speaker 2: in the UK over the last few years. You're concerned 531 00:25:54,440 --> 00:25:57,200 Speaker 2: about that over the weekend. What have your conversations been 532 00:25:57,240 --> 00:25:59,240 Speaker 2: with the FIA over the last couple of days and 533 00:25:59,280 --> 00:26:02,920 Speaker 2: your own drivers going into the weekends with regards to that, Well, look, 534 00:26:02,960 --> 00:26:03,360 Speaker 2: it is a. 535 00:26:03,280 --> 00:26:06,280 Speaker 4: Big concern because you run on a cricket page, sure. 536 00:26:06,080 --> 00:26:08,560 Speaker 5: At tennis court, you know there's only a there's only 537 00:26:08,600 --> 00:26:10,720 Speaker 5: a batner ball out there. You run on a Formula 538 00:26:10,720 --> 00:26:13,440 Speaker 5: one track, you know there's twenty cars going around, the 539 00:26:13,440 --> 00:26:15,200 Speaker 5: speeds are closer to two hundred miles an hour, and 540 00:26:15,280 --> 00:26:18,600 Speaker 5: from a safety point of view, it is unimaginable or 541 00:26:18,640 --> 00:26:24,840 Speaker 5: unthinkable that people would put themselves into and the drivers 542 00:26:24,880 --> 00:26:30,399 Speaker 5: at such risk. So I really hope that you know, 543 00:26:30,480 --> 00:26:33,960 Speaker 5: nobody does anything stupid this weekend. You know, Formula One 544 00:26:34,240 --> 00:26:37,400 Speaker 5: is taking sustainability and is pushing that message and driving 545 00:26:37,840 --> 00:26:40,280 Speaker 5: with fully sustainable fuels that we have coming from twenty 546 00:26:40,320 --> 00:26:43,080 Speaker 5: twenty six. We're doing more than any other industry to 547 00:26:43,720 --> 00:26:48,439 Speaker 5: champion that, and I'd be really disappointed to see, you know, 548 00:26:48,520 --> 00:26:49,280 Speaker 5: somebody try. 549 00:26:49,119 --> 00:26:52,480 Speaker 4: And upset what is going to be probably one. 550 00:26:52,359 --> 00:26:55,479 Speaker 5: Of the biggest events sporting events on the British calendar 551 00:26:55,520 --> 00:26:55,880 Speaker 5: this year. 552 00:26:56,040 --> 00:26:59,040 Speaker 2: Christian, I've loved our conversations. We've loved our conversations. Let's 553 00:26:59,040 --> 00:27:02,040 Speaker 2: continue them. Luck for the race weekend. As a Ferrari fan, 554 00:27:02,080 --> 00:27:03,960 Speaker 2: you know that I don't quite mean that, but good. 555 00:27:03,880 --> 00:27:07,720 Speaker 4: Luck, good luck, I mean it. This weekend of Red 556 00:27:07,760 --> 00:27:08,640 Speaker 4: Bull Racing. 557 00:27:09,280 --> 00:27:13,159 Speaker 1: Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify, and 558 00:27:13,280 --> 00:27:17,480 Speaker 1: anywhere else you get your podcasts. Listen live every weekday, 559 00:27:17,760 --> 00:27:21,240 Speaker 1: starting at seven am Eastern. I'm Bloomberg dot com, the 560 00:27:21,359 --> 00:27:25,879 Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You 561 00:27:25,920 --> 00:27:29,959 Speaker 1: can watch us live on Bloomberg Television and always I'm 562 00:27:30,000 --> 00:27:34,000 Speaker 1: the Bloomberg Terminal. Thanks for listening. I'm Tom Keen, and 563 00:27:34,119 --> 00:27:35,679 Speaker 1: this is Bloomberg