1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,200 --> 00:00:13,039 Speaker 1: with Jonathan Farrell and Lisa A. Brawnowitz. Daily we bring 3 00:00:13,080 --> 00:00:17,159 Speaker 1: you insight from the best and economics, finance, investment, and 4 00:00:17,239 --> 00:00:23,320 Speaker 1: international relations. Find Bloomberg Surveillance on Apple Podcast, SoundCloud, Bloomberg 5 00:00:23,360 --> 00:00:29,600 Speaker 1: dot Com, and of course on the Bloomberg terminal. John 6 00:00:29,640 --> 00:00:31,640 Speaker 1: Farrell and I are committed to a global stance as 7 00:00:31,680 --> 00:00:34,519 Speaker 1: we go to the World Cup and now representing Denmark 8 00:00:34,520 --> 00:00:37,159 Speaker 1: who is in the World Cup. Torson Slock joins us. 9 00:00:37,280 --> 00:00:40,159 Speaker 1: He's chief economist at Apollo Global Management. Far more than 10 00:00:40,200 --> 00:00:43,240 Speaker 1: that his leadership in economics with Peter Hooper at Deutsche 11 00:00:43,240 --> 00:00:46,400 Speaker 1: Bank over the years and going over to the dark side. 12 00:00:46,400 --> 00:00:49,960 Speaker 1: What what was it change like going Deutsche Bank to Apollo? 13 00:00:50,400 --> 00:00:56,120 Speaker 1: I mean expect on a given Monday when you walked 14 00:00:56,120 --> 00:00:58,960 Speaker 1: in the door to Apollo from a major bank with 15 00:00:59,120 --> 00:01:02,600 Speaker 1: your majors sess there, what was that like? Well, my 16 00:01:02,680 --> 00:01:04,880 Speaker 1: job is to watch the economic data and watch financial 17 00:01:04,920 --> 00:01:07,920 Speaker 1: markets and with that backroup, that's really the same thing 18 00:01:07,920 --> 00:01:11,399 Speaker 1: I do. Well talk about inflation, unemployment and the things 19 00:01:11,400 --> 00:01:14,000 Speaker 1: that you guys talk about. What's going on? Things getting better? 20 00:01:14,040 --> 00:01:15,720 Speaker 1: Are they getting worse. Are the central banks going to 21 00:01:15,760 --> 00:01:19,360 Speaker 1: react differently? The job in is really very similar, very good. 22 00:01:19,440 --> 00:01:22,080 Speaker 1: How how important is the next inflation data after the 23 00:01:22,120 --> 00:01:25,200 Speaker 1: festivities we saw yesterday? I think it's very important because 24 00:01:25,200 --> 00:01:26,800 Speaker 1: what I think is the key issue at the moment 25 00:01:27,000 --> 00:01:30,480 Speaker 1: is the sequencing of hitting the fits dual mandate. So 26 00:01:30,560 --> 00:01:33,679 Speaker 1: what that means that is, yesterday we've got confirmation that 27 00:01:33,720 --> 00:01:36,240 Speaker 1: we have seen now inflation come down from the peak 28 00:01:36,280 --> 00:01:40,000 Speaker 1: in June without an increase in the unemployment rate. That's 29 00:01:40,000 --> 00:01:42,400 Speaker 1: of course telling you that we might actually have a 30 00:01:42,480 --> 00:01:45,000 Speaker 1: scenario where we could have a soft landing because we 31 00:01:45,040 --> 00:01:47,440 Speaker 1: are now seeing inflation begin to come down. Admittedly seven 32 00:01:47,480 --> 00:01:49,760 Speaker 1: point seven is still very elevated, but at least it's 33 00:01:49,800 --> 00:01:53,360 Speaker 1: coming down without the fear increasing the infloma rate because 34 00:01:53,400 --> 00:01:55,720 Speaker 1: the fits dual mandate and Jaypal has been very clear 35 00:01:55,760 --> 00:01:58,120 Speaker 1: about this, we need to see a softening the labor market, 36 00:01:58,160 --> 00:02:00,680 Speaker 1: and we have really not seen any meaning softening. So 37 00:02:00,720 --> 00:02:03,600 Speaker 1: the sequencing happens to be in the right way for markets. 38 00:02:03,640 --> 00:02:06,800 Speaker 1: Name first, inflation is coming down without even seeing an 39 00:02:06,800 --> 00:02:09,200 Speaker 1: increase in the plan. Let's explore that further. So we 40 00:02:09,240 --> 00:02:11,600 Speaker 1: may have seen peak inflation year over a year where's 41 00:02:11,639 --> 00:02:15,120 Speaker 1: the bottom out at next year. So obviously there's a 42 00:02:15,200 --> 00:02:17,400 Speaker 1: very long road. If you compare with what happened in 43 00:02:17,440 --> 00:02:19,880 Speaker 1: the mid nineteen seventies, it took two years in nineteen 44 00:02:19,880 --> 00:02:22,440 Speaker 1: seventy four to get inflation back from the peak to 45 00:02:22,800 --> 00:02:25,560 Speaker 1: where it was before. So if it also takes two years, 46 00:02:25,600 --> 00:02:27,800 Speaker 1: then of course we still have very long road ahead 47 00:02:27,800 --> 00:02:29,480 Speaker 1: of us, and that of course could be associated with 48 00:02:29,520 --> 00:02:32,000 Speaker 1: all kinds of sharks, including of course not only do 49 00:02:32,040 --> 00:02:34,760 Speaker 1: your political sharks, but also to commodity prices and other 50 00:02:34,800 --> 00:02:37,360 Speaker 1: parts of the CPI conplat This is hard to predictive, course, 51 00:02:37,360 --> 00:02:39,400 Speaker 1: but it is. There's something about the nature, the characteristic 52 00:02:39,440 --> 00:02:42,200 Speaker 1: of this inflation story that means it will be difficult 53 00:02:42,240 --> 00:02:44,079 Speaker 1: to go back to the low inflation of the previous 54 00:02:44,200 --> 00:02:46,360 Speaker 1: right game. So there's a number of arguments why you 55 00:02:46,400 --> 00:02:49,520 Speaker 1: could have inflation potentially higher in the long run. First 56 00:02:49,520 --> 00:02:52,480 Speaker 1: of all, you have, of course demographics and immigration that 57 00:02:52,480 --> 00:02:55,079 Speaker 1: looks quite different now you had very little immigration during 58 00:02:55,080 --> 00:02:58,000 Speaker 1: the pandemic, and also the demographics also suggesting that we 59 00:02:58,000 --> 00:03:00,720 Speaker 1: could have a more permanent upward push on inflation. You 60 00:03:00,800 --> 00:03:05,120 Speaker 1: also have that deglobalization that if there is less globalization 61 00:03:05,240 --> 00:03:07,480 Speaker 1: in the future. That's also going to imply that this 62 00:03:07,520 --> 00:03:10,400 Speaker 1: stuff that we buy and to installs and that we 63 00:03:10,440 --> 00:03:13,560 Speaker 1: purchase will of course be more expensive. And finally, technology 64 00:03:13,760 --> 00:03:16,680 Speaker 1: might not be contributing with as much productivity growth as 65 00:03:16,720 --> 00:03:18,560 Speaker 1: it has not historically. So that is all arguing for 66 00:03:18,680 --> 00:03:21,080 Speaker 1: that might be some structural pressures, but it is important 67 00:03:21,080 --> 00:03:22,960 Speaker 1: that the reason why inflation is high at the moment 68 00:03:23,080 --> 00:03:25,679 Speaker 1: it is probably also very importantly for cychnical reasons. So yes, 69 00:03:25,880 --> 00:03:27,400 Speaker 1: as you're saying, John, we need to get down with 70 00:03:27,440 --> 00:03:30,000 Speaker 1: inflation towards two. But it is certainly a long road 71 00:03:30,000 --> 00:03:33,720 Speaker 1: we have ahead of us. Do you aggregate your economic 72 00:03:33,840 --> 00:03:37,720 Speaker 1: analysis or as you mentioned technology, are we now a 73 00:03:37,840 --> 00:03:42,680 Speaker 1: polarized America, a polarized Denmark, a polarized world of the 74 00:03:42,760 --> 00:03:46,200 Speaker 1: technology haves and the technology have not. Well, the main 75 00:03:46,240 --> 00:03:48,320 Speaker 1: implication of that, of course is what an impact has 76 00:03:48,320 --> 00:03:50,800 Speaker 1: on inflation. So of course, one very important debate is 77 00:03:50,800 --> 00:03:53,400 Speaker 1: when you invest, for example, in renewable energy, that's of 78 00:03:53,440 --> 00:03:56,840 Speaker 1: course very big debate about is that inflation area disinflasionary 79 00:03:56,920 --> 00:04:02,360 Speaker 1: because all investment, all capic spending, should be disinflationary. So 80 00:04:02,440 --> 00:04:05,120 Speaker 1: in that sense, there's some very important differences across the 81 00:04:05,160 --> 00:04:07,680 Speaker 1: Atlanting Ocean. In terms of what is the investment outlook 82 00:04:07,880 --> 00:04:12,240 Speaker 1: for the US relative to Euros. Capital deepening dominic customer 83 00:04:12,320 --> 00:04:14,880 Speaker 1: missour has been very good. And let's the idea that 84 00:04:14,920 --> 00:04:17,760 Speaker 1: there's some things going on post pandemic, supply side, demand 85 00:04:17,800 --> 00:04:20,800 Speaker 1: side and all that. But are we seeing a capital 86 00:04:20,880 --> 00:04:25,320 Speaker 1: deepening that we're I would say it's invisible almost right now. Well, 87 00:04:25,320 --> 00:04:27,560 Speaker 1: at least we're seeing very significant capital deepening in the 88 00:04:27,640 --> 00:04:30,440 Speaker 1: interes transition, and that's of course very important because that's 89 00:04:30,480 --> 00:04:32,799 Speaker 1: ultimately the goal with that is to lower energy prices, 90 00:04:33,000 --> 00:04:35,960 Speaker 1: which also really should be disinflationary for inflation. But it's 91 00:04:36,000 --> 00:04:38,080 Speaker 1: true that this is certainly a very important team also 92 00:04:38,160 --> 00:04:40,880 Speaker 1: for the long run outlook for inflation. But I still 93 00:04:40,880 --> 00:04:43,159 Speaker 1: say that in the near term the inflation outlook is 94 00:04:43,160 --> 00:04:46,360 Speaker 1: mainly driven by the cyclical drivers of inflation, naming the 95 00:04:46,520 --> 00:04:49,159 Speaker 1: risk that the US economy is overheating. And that's of 96 00:04:49,160 --> 00:04:51,080 Speaker 1: course the whole reason why they fed is raising rates 97 00:04:51,080 --> 00:04:52,840 Speaker 1: and except to try to cool things down, and they 98 00:04:52,839 --> 00:04:55,400 Speaker 1: haven't really been very successful at cooling things down. They 99 00:04:55,400 --> 00:04:57,360 Speaker 1: have cooled down the good sector or the interest rate 100 00:04:57,360 --> 00:05:00,400 Speaker 1: sensitive components of GDP, but that's only about GDP, the 101 00:05:00,440 --> 00:05:05,760 Speaker 1: service sector, airlines, packed hotels, restaurants, concerts, spawning events, It's 102 00:05:05,760 --> 00:05:08,919 Speaker 1: all packed everywhere. The Shouter conversation a big pace of 103 00:05:08,960 --> 00:05:11,599 Speaker 1: this as well. You mentioned the sequencing. Can you compare 104 00:05:11,640 --> 00:05:15,240 Speaker 1: and contrast the sequencing you're talking about in America and 105 00:05:15,279 --> 00:05:18,000 Speaker 1: what you're saying to what you're also seeing developing Europe 106 00:05:18,120 --> 00:05:20,920 Speaker 1: because we both sent a different story there. Yeah, very 107 00:05:21,080 --> 00:05:23,480 Speaker 1: that's very important because in Europe you're actually seeing inflasion 108 00:05:23,520 --> 00:05:26,200 Speaker 1: is still going up, but economic activity is starting to 109 00:05:26,520 --> 00:05:29,159 Speaker 1: slow down. In fact, if you look at your Bloomberg 110 00:05:29,240 --> 00:05:32,200 Speaker 1: screency it will see, of course contentious expects that both 111 00:05:32,200 --> 00:05:34,640 Speaker 1: Europe and German in particular will be in a recession 112 00:05:35,160 --> 00:05:37,920 Speaker 1: next year. So the conclusion is, of course that if 113 00:05:37,960 --> 00:05:39,880 Speaker 1: you have a very different situation in Europe where it's 114 00:05:39,880 --> 00:05:41,719 Speaker 1: just going to take a little bit longer before you 115 00:05:41,760 --> 00:05:44,039 Speaker 1: begin to see inflation come down, then it becomes a 116 00:05:44,040 --> 00:05:46,760 Speaker 1: debate about, well, is it the case that inflation is 117 00:05:46,760 --> 00:05:49,120 Speaker 1: going to stay higher for longer in the US or 118 00:05:49,160 --> 00:05:51,880 Speaker 1: in the U Area and stacks flation in Europe base case. Now, 119 00:05:52,320 --> 00:05:55,200 Speaker 1: at least today it looks like Europe is facing a 120 00:05:55,240 --> 00:05:58,800 Speaker 1: lot more head winds than the US, because Europe unfortunately 121 00:05:58,839 --> 00:06:01,039 Speaker 1: is facing inflasion that's a higher levels. There are some 122 00:06:01,160 --> 00:06:03,560 Speaker 1: very important issues about that. The composition of inflation in 123 00:06:03,560 --> 00:06:06,040 Speaker 1: Europe consists more of energy, about two thirds of inflation 124 00:06:06,040 --> 00:06:08,520 Speaker 1: in Europe's energy and only a third in the US. 125 00:06:08,560 --> 00:06:10,200 Speaker 1: So if energy prices once we get to the other 126 00:06:10,240 --> 00:06:12,840 Speaker 1: side of February two thousand twenty three, once we get 127 00:06:12,880 --> 00:06:16,120 Speaker 1: to US out of Russia's invasion of Ukraine, the twelve 128 00:06:16,200 --> 00:06:18,680 Speaker 1: month window will begin to no longer take into account 129 00:06:18,680 --> 00:06:20,720 Speaker 1: the big spike that we had an enterprise effects can 130 00:06:21,000 --> 00:06:23,400 Speaker 1: That's exactly when you begin to see European inflation potentially 131 00:06:23,400 --> 00:06:25,640 Speaker 1: coming down a lot harder. So that's why the rate 132 00:06:25,680 --> 00:06:27,640 Speaker 1: space as of a lot of debate of course about 133 00:06:28,000 --> 00:06:31,159 Speaker 1: bonds attractive at these levels if European inflation is potentially 134 00:06:31,200 --> 00:06:33,479 Speaker 1: coming down very very quickly once we get into the 135 00:06:33,480 --> 00:06:36,599 Speaker 1: second quarter of next year. So are you, in summary 136 00:06:36,839 --> 00:06:40,640 Speaker 1: an optimistic tone for Apollo management? Are you telling them 137 00:06:40,680 --> 00:06:44,400 Speaker 1: that transactions can be a benefit now? Are you telling 138 00:06:44,440 --> 00:06:47,760 Speaker 1: them to build cash, to use cash, to keep cash. 139 00:06:47,800 --> 00:06:49,719 Speaker 1: Whether the way I look at it is that in 140 00:06:49,839 --> 00:06:52,560 Speaker 1: March of two thousand twenty the window of opportunity in 141 00:06:52,640 --> 00:06:55,680 Speaker 1: my view was only open for about two weeks, the 142 00:06:55,720 --> 00:06:57,600 Speaker 1: window of opportunity were doing things. At the moment, it 143 00:06:57,640 --> 00:07:00,240 Speaker 1: is probably more like two years, maybe even three. In 144 00:07:00,279 --> 00:07:02,440 Speaker 1: other words, there's a lot of distress. How you markets, 145 00:07:02,480 --> 00:07:04,720 Speaker 1: I sent shut down? Capital Markets, I sent you to 146 00:07:04,760 --> 00:07:07,240 Speaker 1: shut down. And that's where private equa in private capital, 147 00:07:07,279 --> 00:07:10,040 Speaker 1: of course is playing a very very important role as stabilizer, 148 00:07:10,400 --> 00:07:13,280 Speaker 1: stepping in and doing things. Where's the paint? It's the 149 00:07:13,320 --> 00:07:15,920 Speaker 1: question we've been asking around this table and the price 150 00:07:15,920 --> 00:07:17,600 Speaker 1: that we're gonna pay for and to basis points of 151 00:07:17,680 --> 00:07:20,160 Speaker 1: tiening in eight months, is it really just the move 152 00:07:20,320 --> 00:07:23,600 Speaker 1: on SMPT, moving on ASTAC. Well, unless you know the 153 00:07:23,640 --> 00:07:25,920 Speaker 1: debate about all his long and variable lacks. I mean, 154 00:07:25,960 --> 00:07:27,840 Speaker 1: it's still not clear to me personally what the exactly 155 00:07:27,880 --> 00:07:29,760 Speaker 1: that means. But at this point you still say, okay, well, 156 00:07:29,800 --> 00:07:32,840 Speaker 1: where are these long and variable legs? We are now well, 157 00:07:32,960 --> 00:07:34,240 Speaker 1: depending on how you look at it, but we're at 158 00:07:34,280 --> 00:07:36,920 Speaker 1: least six nine months into these long and variable lects 159 00:07:36,960 --> 00:07:39,600 Speaker 1: and we really really haven't seen much impact yet. So 160 00:07:39,760 --> 00:07:42,840 Speaker 1: absolutely the pain he really here is that if inflation 161 00:07:42,840 --> 00:07:45,080 Speaker 1: does not come down, the FED will have to go 162 00:07:45,360 --> 00:07:48,160 Speaker 1: and potentially go a lot more. Do you follow Denmark football? Oh? 163 00:07:48,200 --> 00:07:50,480 Speaker 1: Absolutely I have. I should have warned my red shirt. 164 00:07:50,680 --> 00:07:53,400 Speaker 1: It's a great story. I mean, this guy, Christian Ericson 165 00:07:53,600 --> 00:07:58,520 Speaker 1: had a heart attack. He's come back and Denmark has 166 00:07:58,520 --> 00:08:01,119 Speaker 1: whipped France a number of times and one of maybe 167 00:08:01,160 --> 00:08:04,520 Speaker 1: the most exciting pairing. Such a classy player, and he's 168 00:08:04,560 --> 00:08:06,800 Speaker 1: one of the best players on team, and he plays 169 00:08:06,840 --> 00:08:09,360 Speaker 1: so well today. I love him. He's great. I mean, 170 00:08:09,360 --> 00:08:12,480 Speaker 1: it's just, folks, this is really something. This guy John 171 00:08:12,560 --> 00:08:15,720 Speaker 1: and I'm not exaggerating. He literally almost died on the field, 172 00:08:15,800 --> 00:08:18,679 Speaker 1: not at all, that's not an exaggeration. Came very close, 173 00:08:18,760 --> 00:08:20,240 Speaker 1: and it's great to see him back on the field. 174 00:08:20,320 --> 00:08:22,840 Speaker 1: And they're in the bracket with France, who they've already 175 00:08:22,840 --> 00:08:25,280 Speaker 1: shown they can beat. I mean, it's just that's the 176 00:08:25,320 --> 00:08:28,960 Speaker 1: one game teach you've got on this. I'm working. I'm working, folks. 177 00:08:29,000 --> 00:08:31,680 Speaker 1: I've got my cliff notes out. I've been discussing just 178 00:08:31,720 --> 00:08:33,560 Speaker 1: how much things are going to shut down in Europe 179 00:08:33,679 --> 00:08:36,240 Speaker 1: on a trading flows and how much market volume is 180 00:08:36,240 --> 00:08:39,360 Speaker 1: going to roll over going into Christmas. Well, Denmark is 181 00:08:39,360 --> 00:08:42,160 Speaker 1: being friends on a Saturday. There's a Thanksgiving Saturday and 182 00:08:42,160 --> 00:08:43,920 Speaker 1: Williamsburg watching with all my buddies. Is that what you're 183 00:08:43,920 --> 00:08:48,560 Speaker 1: gonna do. It's a special bar for Denmark. We're going 184 00:08:48,600 --> 00:08:53,920 Speaker 1: to get serveret toss and this was awesome. Thank you, 185 00:08:53,960 --> 00:09:05,760 Speaker 1: sir Torsten Slock. They have a polite management. Let's go 186 00:09:05,840 --> 00:09:09,800 Speaker 1: back to December eighteen. One of the greatest calls in 187 00:09:09,880 --> 00:09:13,640 Speaker 1: equity market strategy the modern times Benjamin Laidler of HSBC 188 00:09:14,280 --> 00:09:17,160 Speaker 1: to shut up the bottoms in. He absolutely nailed it 189 00:09:17,400 --> 00:09:20,200 Speaker 1: with E Toro Today and their global market strategists. He 190 00:09:20,240 --> 00:09:23,640 Speaker 1: has published this morning the bottom is in, then, Laidler, 191 00:09:23,880 --> 00:09:28,000 Speaker 1: is this like Christmas Eve of two thousand eighteen. Yeah, 192 00:09:28,000 --> 00:09:30,600 Speaker 1: it is. I do think the bottoms in um for 193 00:09:30,600 --> 00:09:32,960 Speaker 1: a lot of reasons. I think earning to hang in there. 194 00:09:33,120 --> 00:09:36,120 Speaker 1: I think that sentiments very poor, evaluations are low. We've 195 00:09:36,120 --> 00:09:40,000 Speaker 1: got wild cards like China improving, and now crucially the 196 00:09:40,040 --> 00:09:42,640 Speaker 1: inflations fever is sort of beginning to break and that's 197 00:09:42,640 --> 00:09:45,440 Speaker 1: giving some visibility on the top of the cycle. That's 198 00:09:45,480 --> 00:09:48,320 Speaker 1: not enough to get us off on the next boat market, 199 00:09:48,400 --> 00:09:51,600 Speaker 1: but it's absolutely enough to tell us that the bottom 200 00:09:51,679 --> 00:09:55,199 Speaker 1: is in. So I think that's a similarity. With the 201 00:09:55,280 --> 00:09:57,880 Speaker 1: difference is that then it was a v shaped recovery. 202 00:09:58,200 --> 00:09:59,679 Speaker 1: This I think it's going to be more like a you. 203 00:10:00,400 --> 00:10:03,920 Speaker 1: But this is absolutely the necessary first step. And you know, 204 00:10:04,000 --> 00:10:06,120 Speaker 1: we learned a lot of things yesterday. One of them 205 00:10:06,200 --> 00:10:08,280 Speaker 1: was you've got to be in it to win it, um, 206 00:10:08,480 --> 00:10:12,720 Speaker 1: So I do think investors need to be in this market. Ben, 207 00:10:12,760 --> 00:10:17,160 Speaker 1: What is the character or the human behavior of those 208 00:10:17,280 --> 00:10:20,439 Speaker 1: loaded in cash? There's a lot of cash out there 209 00:10:20,520 --> 00:10:24,720 Speaker 1: right now. I have prospectives portfolios of five percent four percent, 210 00:10:24,920 --> 00:10:28,000 Speaker 1: who are in seven percent cash, et cetera. How all 211 00:10:28,160 --> 00:10:31,960 Speaker 1: cash respond? Yeah, tough to criticize that. I mean, there's 212 00:10:32,000 --> 00:10:35,640 Speaker 1: been a historic year for the failure of diversification. You know, 213 00:10:35,720 --> 00:10:39,760 Speaker 1: basically nothing's worked apart from cash. So I'm sympathetic. But 214 00:10:40,240 --> 00:10:42,560 Speaker 1: we're going into the end of the year. Historically the 215 00:10:42,559 --> 00:10:45,120 Speaker 1: best seasonality of the year. You can pour cold water 216 00:10:45,240 --> 00:10:47,199 Speaker 1: on that, you know many times, but like, don't think 217 00:10:47,240 --> 00:10:50,079 Speaker 1: you can this year, after such a historically bad year 218 00:10:50,120 --> 00:10:52,920 Speaker 1: across all asset classes, there was so much cash on 219 00:10:52,960 --> 00:10:57,560 Speaker 1: the sidelines and looking forward to a less bad three 220 00:10:58,400 --> 00:11:01,959 Speaker 1: I think those are the ingredients for Christmas continuing to 221 00:11:02,000 --> 00:11:04,440 Speaker 1: come early. And then there were some curious moves yesterday 222 00:11:04,480 --> 00:11:06,720 Speaker 1: as well. A lot of people picking on say a 223 00:11:06,760 --> 00:11:09,640 Speaker 1: company called Carvana, which operates an online platform for bank 224 00:11:09,760 --> 00:11:12,840 Speaker 1: used cars running more than on a CPI print, the 225 00:11:12,840 --> 00:11:15,679 Speaker 1: show to use car prices absolutely plunging. So Ben, can 226 00:11:15,720 --> 00:11:17,800 Speaker 1: you help me understand the moves that I should get 227 00:11:17,840 --> 00:11:19,920 Speaker 1: on the train with and the ones I should avoid. Yeah, 228 00:11:20,120 --> 00:11:23,840 Speaker 1: I think that's a reflection of evaluation relief, blower bond yields, 229 00:11:24,280 --> 00:11:27,320 Speaker 1: and just you know, to my just how aggressively underweight 230 00:11:27,920 --> 00:11:29,720 Speaker 1: a lot of people are. So you know, when you 231 00:11:29,760 --> 00:11:31,280 Speaker 1: get the biggest bank to your back, where do you 232 00:11:31,280 --> 00:11:33,320 Speaker 1: get the most leaveries of stuff that collapse the most? 233 00:11:33,559 --> 00:11:36,199 Speaker 1: Were evaluations are being under the most pressure. That's why 234 00:11:36,200 --> 00:11:38,520 Speaker 1: you saw some relief from yesterday. That doesn't mean you 235 00:11:38,520 --> 00:11:41,040 Speaker 1: should chase it. I still think, you know, this is 236 00:11:41,080 --> 00:11:42,800 Speaker 1: a market where you want to be invested, but you 237 00:11:42,800 --> 00:11:45,480 Speaker 1: want to be reasonably defensive. It's gonna be two steps forward, 238 00:11:45,520 --> 00:11:47,240 Speaker 1: one step back. I mean, we may have seen the 239 00:11:47,280 --> 00:11:49,240 Speaker 1: peak for inflation, but I do think it's going to 240 00:11:49,280 --> 00:11:51,640 Speaker 1: be a it's going to be a bump pieces on 241 00:11:51,720 --> 00:11:55,360 Speaker 1: march down. Um, so you know, staying those defensives and 242 00:11:55,480 --> 00:11:58,560 Speaker 1: as we get some more validation that inflation just continues 243 00:11:58,600 --> 00:12:01,160 Speaker 1: to come down and we get to the top of 244 00:12:01,160 --> 00:12:03,520 Speaker 1: that red cycle and begin to look to sort of 245 00:12:03,520 --> 00:12:05,920 Speaker 1: cuts later in twenty three, you just keep adding risk, 246 00:12:06,000 --> 00:12:09,160 Speaker 1: and risk is probably bigger tech in traditional rate dentatives 247 00:12:09,280 --> 00:12:12,960 Speaker 1: like like real estate. I'm not convinced by um the 248 00:12:13,040 --> 00:12:15,000 Speaker 1: sort of disruptive tech names you know at this point, 249 00:12:15,000 --> 00:12:17,160 Speaker 1: even though that's what led the rally yesterday. Let's talk 250 00:12:17,200 --> 00:12:19,120 Speaker 1: about leadership. You touched on it. You're calling the Santa 251 00:12:19,200 --> 00:12:21,719 Speaker 1: rally two weeks before Thanksgiving, Christmas has come early. Let's 252 00:12:21,760 --> 00:12:23,800 Speaker 1: build on that the tech names that you do want 253 00:12:23,840 --> 00:12:25,920 Speaker 1: to own then, and where you're starting to be encouraged 254 00:12:25,960 --> 00:12:27,440 Speaker 1: by some of the work that's being done by the 255 00:12:27,480 --> 00:12:30,360 Speaker 1: c suite. We've seen cuts at places like Meta. We 256 00:12:30,400 --> 00:12:32,559 Speaker 1: saw a report from the Journal yesterday that Amazon was 257 00:12:32,559 --> 00:12:34,640 Speaker 1: getting in on the cuss cunning act as well. Where 258 00:12:34,640 --> 00:12:35,960 Speaker 1: do you want to be? Where do you want to avoid? 259 00:12:36,559 --> 00:12:37,880 Speaker 1: So I think it's a bit of a barber as 260 00:12:37,920 --> 00:12:40,680 Speaker 1: I say, right now, those traditionals are value names. I 261 00:12:40,720 --> 00:12:43,240 Speaker 1: think they continue to the continue to do well right 262 00:12:43,320 --> 00:12:45,400 Speaker 1: both on the defensive and sort of healthcare names, but 263 00:12:45,520 --> 00:12:48,360 Speaker 1: also some of these sort of depressed um some of 264 00:12:48,400 --> 00:12:51,600 Speaker 1: these depressed banks but I think looking forward, I think 265 00:12:51,600 --> 00:12:53,319 Speaker 1: next year is gonna be very different to this year. 266 00:12:53,360 --> 00:12:57,120 Speaker 1: This year was all about um, massive evaluation, de ratings 267 00:12:57,120 --> 00:12:59,319 Speaker 1: and earning holding reasonably firm. I think next year is 268 00:12:59,320 --> 00:13:01,280 Speaker 1: the opposite. I think onlying is gonna come under more 269 00:13:01,280 --> 00:13:03,520 Speaker 1: pressure and you're gonna get some and you're gonna get 270 00:13:03,520 --> 00:13:06,400 Speaker 1: some evaluation relief. I think that's a much better environment 271 00:13:06,760 --> 00:13:09,920 Speaker 1: for for big tech with these dominant market shows, these 272 00:13:09,920 --> 00:13:12,640 Speaker 1: big margins. He's strong cash for portress balance sheet and 273 00:13:12,640 --> 00:13:14,800 Speaker 1: evaluations that will already come down a long way. So 274 00:13:14,960 --> 00:13:17,240 Speaker 1: Ben find a question. Then you're calling for ray cuts 275 00:13:17,360 --> 00:13:20,520 Speaker 1: in twenty three, what's behind that call? Right cuts in 276 00:13:20,559 --> 00:13:22,360 Speaker 1: the end of twenty three, I think just think markets 277 00:13:22,400 --> 00:13:24,720 Speaker 1: are going to start discounting that you know, reasonably early. 278 00:13:25,360 --> 00:13:28,559 Speaker 1: I think every inflation lead indicated, there's not a single 279 00:13:28,600 --> 00:13:31,680 Speaker 1: inflation lead indicator. There's not meaningful office hides at this 280 00:13:31,760 --> 00:13:35,800 Speaker 1: point across housing, labor markets, car prices, inflation expectation to 281 00:13:35,800 --> 00:13:38,240 Speaker 1: community prices. I think that's going to continue to move 282 00:13:38,720 --> 00:13:41,800 Speaker 1: in our direction through through three. That's gonna take a 283 00:13:41,840 --> 00:13:45,080 Speaker 1: lot of the pressure off the bread um, and we 284 00:13:45,120 --> 00:13:47,760 Speaker 1: may get that. I think the question is do we 285 00:13:47,800 --> 00:13:50,199 Speaker 1: get how quickly do we get those rate cuts. I 286 00:13:50,240 --> 00:13:52,960 Speaker 1: think we're looking for an extended pause as long as 287 00:13:53,040 --> 00:13:55,000 Speaker 1: inflation numbers keep drifting down. I think the market is 288 00:13:55,040 --> 00:13:57,960 Speaker 1: going to start discounting cuts later in three reasonly early. 289 00:13:58,160 --> 00:14:00,480 Speaker 1: A better week for Ben later of et Ben. Thank 290 00:14:00,520 --> 00:14:08,160 Speaker 1: you sir as always, this is a joy and we 291 00:14:08,200 --> 00:14:10,920 Speaker 1: did not set ourselves up with a massive market move 292 00:14:11,520 --> 00:14:14,280 Speaker 1: to have in the studios. Also, Lignos Global had of 293 00:14:14,280 --> 00:14:17,800 Speaker 1: Foreign Exchange Strategy at the Royal Bank of Canada RBC. 294 00:14:18,120 --> 00:14:21,400 Speaker 1: She attends from Europe, where she is definitive and the 295 00:14:21,440 --> 00:14:25,200 Speaker 1: linkage of ECB dynamics with the foreign exchange market. Let's 296 00:14:25,240 --> 00:14:27,840 Speaker 1: start right there, because I've been I've had a real 297 00:14:27,880 --> 00:14:31,160 Speaker 1: dearth of euro analysis. What is your call and euro 298 00:14:31,680 --> 00:14:34,760 Speaker 1: given the last twenty four hours play, so it's a 299 00:14:34,800 --> 00:14:37,640 Speaker 1: really interesting moment and actually slightly painful for me because 300 00:14:37,680 --> 00:14:39,600 Speaker 1: I went long You're a dollar a couple of weeks ago, 301 00:14:39,720 --> 00:14:42,960 Speaker 1: got stopped on a little move lower and now pretty 302 00:14:43,000 --> 00:14:47,400 Speaker 1: neutral and watching this rally. But I think yesterday's cp 303 00:14:47,520 --> 00:14:50,240 Speaker 1: I actually gave a lot of people a green light 304 00:14:50,280 --> 00:14:52,440 Speaker 1: to do something they wanted to do already. For me, 305 00:14:52,520 --> 00:14:55,160 Speaker 1: what was striking was listening to our head of spot 306 00:14:55,160 --> 00:14:56,760 Speaker 1: in Europe and a head of spot in North America 307 00:14:56,840 --> 00:14:58,960 Speaker 1: ahead of the number, talking about what they were going 308 00:14:59,000 --> 00:15:01,280 Speaker 1: to do. I've got to say, the difference in opinion 309 00:15:01,320 --> 00:15:04,680 Speaker 1: between Europe and the US is incredible. Shaped it. People 310 00:15:04,720 --> 00:15:08,120 Speaker 1: in Europe really think we're near the end, right, and 311 00:15:08,160 --> 00:15:10,640 Speaker 1: they've been waiting to play that, and this CPI was 312 00:15:10,680 --> 00:15:12,800 Speaker 1: kind of hanging over them. I think even if we'd 313 00:15:12,800 --> 00:15:15,120 Speaker 1: had an inline number, we would have seen people selling 314 00:15:15,200 --> 00:15:17,120 Speaker 1: US d Is that because the news has been better 315 00:15:17,160 --> 00:15:20,480 Speaker 1: in Europe relative to expectations? What is it not at all? 316 00:15:20,520 --> 00:15:23,080 Speaker 1: I think people are just so itching to see the 317 00:15:23,200 --> 00:15:25,800 Speaker 1: end of this fed hiking cycle. And maybe there's just 318 00:15:25,920 --> 00:15:28,760 Speaker 1: more doom and gloom. Maybe there's just more pessimism about 319 00:15:28,760 --> 00:15:30,200 Speaker 1: the state of the U. S economy than I think 320 00:15:30,240 --> 00:15:32,320 Speaker 1: you feel here right here in New York City. But 321 00:15:32,400 --> 00:15:34,840 Speaker 1: it's the difference in opinion between Europe and the US 322 00:15:34,880 --> 00:15:37,200 Speaker 1: at the moment I think is the biggest I've ever seen. 323 00:15:37,240 --> 00:15:40,480 Speaker 1: You mentioned earlier you were stopped out, which is jargoning 324 00:15:40,560 --> 00:15:42,720 Speaker 1: for some people. You set up a trade, you believe 325 00:15:42,760 --> 00:15:46,160 Speaker 1: in stronger euro it comes back you have to you're 326 00:15:46,240 --> 00:15:49,680 Speaker 1: forced out of your trade essentially, and you're on the sidelines. 327 00:15:50,000 --> 00:15:52,880 Speaker 1: How much of the market is on the sidelines for 328 00:15:52,920 --> 00:15:56,280 Speaker 1: this week dollar moment exactly? I think there'll be a 329 00:15:56,320 --> 00:15:58,840 Speaker 1: lot of people in that position, and heading into your end, 330 00:15:59,120 --> 00:16:02,000 Speaker 1: people who have had an incredibly strong performance on the 331 00:16:02,040 --> 00:16:05,480 Speaker 1: back of being long dollars are now scrambling thinking okay, 332 00:16:05,520 --> 00:16:07,160 Speaker 1: do I take it off? I had a lot of 333 00:16:07,160 --> 00:16:09,400 Speaker 1: conviction in this trade. A lot of people I spoke 334 00:16:09,480 --> 00:16:11,520 Speaker 1: to earlier in the week were convinced we go higher 335 00:16:11,560 --> 00:16:14,160 Speaker 1: in three and I think there's a lot of fomo 336 00:16:14,240 --> 00:16:16,400 Speaker 1: in the market right now, people whether in the equity 337 00:16:16,440 --> 00:16:20,600 Speaker 1: market on trying to get how does formal express itself 338 00:16:20,600 --> 00:16:23,320 Speaker 1: in for an exchange? I think our viewers and listeners like, really, 339 00:16:23,800 --> 00:16:27,560 Speaker 1: what our lunch is longer in London when that happens, 340 00:16:27,680 --> 00:16:30,000 Speaker 1: you know, more than anything, it's the fact that effects 341 00:16:30,120 --> 00:16:32,560 Speaker 1: is so liquid, you can put on big positions quickly, 342 00:16:32,880 --> 00:16:34,640 Speaker 1: and I think it might be an easier way for 343 00:16:34,640 --> 00:16:37,440 Speaker 1: a lot of people to reposition their portfolios. Hence we've 344 00:16:37,440 --> 00:16:39,840 Speaker 1: seen this interesting when you did that at Clarages a 345 00:16:39,840 --> 00:16:42,720 Speaker 1: couple of years ago, you were lunch of Clarages, you 346 00:16:42,840 --> 00:16:46,280 Speaker 1: put on a sterling trade. How would you reset this morning. So, look, 347 00:16:46,320 --> 00:16:48,720 Speaker 1: the trade I've been looking at, which I actually really like, 348 00:16:49,000 --> 00:16:52,480 Speaker 1: is across long euro sterling, so buying the euros selling 349 00:16:52,480 --> 00:16:54,800 Speaker 1: the pound. Not because I'm from the UK and just 350 00:16:55,000 --> 00:16:58,200 Speaker 1: very gloomy about our prospects, but I think you've kind 351 00:16:58,200 --> 00:16:59,960 Speaker 1: of got to strip the dollar out of the equation. 352 00:17:00,000 --> 00:17:02,600 Speaker 1: And at the moment we still have another CPI print 353 00:17:02,640 --> 00:17:05,160 Speaker 1: before the December FOMC. We had a bit of a 354 00:17:05,160 --> 00:17:08,280 Speaker 1: head fake earlier this year August September cp I. So 355 00:17:08,960 --> 00:17:10,800 Speaker 1: I've got to be honest, it's a great move if 356 00:17:10,840 --> 00:17:12,640 Speaker 1: you caught it, and had I been in two weeks ago, 357 00:17:12,680 --> 00:17:15,320 Speaker 1: I would be writing it now today. I think it's 358 00:17:15,320 --> 00:17:17,439 Speaker 1: a little harder to buy euro dollar at these levels. 359 00:17:17,520 --> 00:17:19,400 Speaker 1: I like longer a stuff. So is there a positioning 360 00:17:19,440 --> 00:17:22,000 Speaker 1: stories that fundamentals on the euro side? He said, it 361 00:17:22,040 --> 00:17:24,120 Speaker 1: wasn't just pessimism on the sterling side. What is it? 362 00:17:24,400 --> 00:17:26,840 Speaker 1: So what I find really interesting is all the investors 363 00:17:26,840 --> 00:17:29,040 Speaker 1: I speak to, nobody is actually positive on the Euro. 364 00:17:29,359 --> 00:17:31,480 Speaker 1: People might be bullish euro dollar kers, they're barish on 365 00:17:31,520 --> 00:17:33,880 Speaker 1: the US dollar, but nobody is positive on the urine. 366 00:17:33,920 --> 00:17:36,160 Speaker 1: It's not that I think cyclically Europe is looking great 367 00:17:36,160 --> 00:17:38,639 Speaker 1: a lot of people worry about three and the winter 368 00:17:38,680 --> 00:17:40,800 Speaker 1: there how we're going to get through with gas inventories. 369 00:17:41,359 --> 00:17:44,359 Speaker 1: What I think is really interesting is European investors potentially 370 00:17:44,400 --> 00:17:47,040 Speaker 1: repatriating money back home. And if we start to see 371 00:17:47,040 --> 00:17:48,840 Speaker 1: that in size, you could get a lot of euro 372 00:17:48,880 --> 00:17:51,800 Speaker 1: buying from that domestic shift in assets. Where's the e 373 00:17:51,920 --> 00:17:54,200 Speaker 1: M trade right now? Where's the opportunity for a number 374 00:17:54,240 --> 00:17:56,879 Speaker 1: of big figures profit in the e M. Well, you 375 00:17:56,960 --> 00:17:59,080 Speaker 1: touched on crewed earlier, Tom, and I think we're seeing 376 00:17:59,160 --> 00:18:02,720 Speaker 1: some really interesting mops and commodity markets and the wait, wait, wait, 377 00:18:02,760 --> 00:18:05,920 Speaker 1: wait stop. What she's saying there, folks, is she has 378 00:18:05,920 --> 00:18:09,000 Speaker 1: Heleima Croft to help her out here. Link Elsa and 379 00:18:09,080 --> 00:18:13,119 Speaker 1: Helma together and the Helenma Croft oil trade. What do 380 00:18:13,160 --> 00:18:16,560 Speaker 1: you do in foreign exchange? Exactly? So we really like 381 00:18:16,680 --> 00:18:18,920 Speaker 1: the Mexican pace. I have liked it all year. Still 382 00:18:18,960 --> 00:18:21,320 Speaker 1: think that has a bit further to run. Brazil's tricky 383 00:18:21,359 --> 00:18:24,400 Speaker 1: at the moment, given the finance minister from the World Cup. 384 00:18:24,440 --> 00:18:26,640 Speaker 1: I mean, Brazil's are real uncertainty in the World Cup, 385 00:18:26,840 --> 00:18:29,679 Speaker 1: John Roll, Let's do the World Cup right now. The 386 00:18:29,800 --> 00:18:32,840 Speaker 1: heartbeat of foreign exchange worldwide. City of London. What on 387 00:18:32,880 --> 00:18:35,679 Speaker 1: earth is going to happen to volumes in London in 388 00:18:35,720 --> 00:18:39,119 Speaker 1: a couple of weeks off the cliff, you know, heading 389 00:18:39,119 --> 00:18:43,600 Speaker 1: into Christmas it always gets a little bit quieter. Imagine 390 00:18:43,600 --> 00:18:45,840 Speaker 1: how much worse it's going to get. Well, we'll have 391 00:18:45,920 --> 00:18:50,120 Speaker 1: to wait and see. T K Nuts Dollar Mexico twenty 392 00:18:50,200 --> 00:18:52,840 Speaker 1: I remember when it was a parameter for American politics 393 00:18:53,200 --> 00:18:55,960 Speaker 1: nineteen point four three. How many big figures can you 394 00:18:56,000 --> 00:18:59,440 Speaker 1: make your strong Mexico? Well, I think what's interesting about 395 00:18:59,480 --> 00:19:01,919 Speaker 1: Mexico is really the carry that you pick up, and 396 00:19:01,920 --> 00:19:03,720 Speaker 1: I think that's why a lot of people have bought it. 397 00:19:03,880 --> 00:19:05,560 Speaker 1: It's not so much the spot move, but it's the 398 00:19:05,600 --> 00:19:09,000 Speaker 1: fact that you get that very mustive really guild, particularly 399 00:19:09,040 --> 00:19:11,680 Speaker 1: if we're now pricing in lower yields for the US. 400 00:19:12,119 --> 00:19:14,080 Speaker 1: I know you've been traveling, but we'd be thrilled to 401 00:19:14,080 --> 00:19:19,880 Speaker 1: have Yan Dooha for her World Cup covers. I think 402 00:19:19,880 --> 00:19:22,600 Speaker 1: it is all over it as well. Helma's Oh, here's 403 00:19:22,600 --> 00:19:25,680 Speaker 1: a Lina calling right now. Lona Kavassin is down't yeah, 404 00:19:26,160 --> 00:19:39,280 Speaker 1: you know, we could do an RBC obviously. That is 405 00:19:39,320 --> 00:19:43,320 Speaker 1: the same with Tina Fordham, founder and geopolitical strategist Fordham 406 00:19:43,320 --> 00:19:46,800 Speaker 1: global foresight with some serious abilities, including support of the 407 00:19:46,960 --> 00:19:51,200 Speaker 1: University of Cambridge foreign policy effort. Why is she on it? 408 00:19:51,200 --> 00:19:55,600 Speaker 1: It's real simple. Tina Fordham wrote a blistering op ed 409 00:19:55,720 --> 00:19:59,600 Speaker 1: in the Financial Times about the future of America. Tina, 410 00:19:59,680 --> 00:20:03,919 Speaker 1: you do say, use parenthetically from a removed distance, the 411 00:20:03,960 --> 00:20:07,000 Speaker 1: phrase civil war. But what you say is this could 412 00:20:07,080 --> 00:20:10,400 Speaker 1: be a take no prisoners Congress. What do you mean 413 00:20:10,520 --> 00:20:16,040 Speaker 1: that a Republican Congress will be take no prisoners? Well, 414 00:20:16,080 --> 00:20:20,840 Speaker 1: that's me trying to be diplomatic, tom Um. But in 415 00:20:20,840 --> 00:20:23,800 Speaker 1: in this blistering as you called it, op ed piece 416 00:20:24,359 --> 00:20:27,040 Speaker 1: for the FT Alphabel, what I really wanted to do 417 00:20:27,160 --> 00:20:31,800 Speaker 1: was um poke a little bit at um, particularly u 418 00:20:31,920 --> 00:20:37,159 Speaker 1: S investors complacency about a divided Congress being kind of 419 00:20:37,400 --> 00:20:41,680 Speaker 1: reflexively a good thing. We had Elon Musk coming out 420 00:20:41,720 --> 00:20:44,480 Speaker 1: and saying that, and people resorting to what I consider 421 00:20:44,600 --> 00:20:49,080 Speaker 1: some pretty sloppy shortcuts in our thinking when the Republic 422 00:20:49,280 --> 00:20:52,560 Speaker 1: as we know it really faces some serious pressures. Now, 423 00:20:52,640 --> 00:20:54,680 Speaker 1: my peace came out the day of the mid terms, 424 00:20:54,920 --> 00:21:00,720 Speaker 1: and since then, um, the less qualified contingent, shall we say, 425 00:21:00,840 --> 00:21:04,199 Speaker 1: they called this candidate quality in fact in the in 426 00:21:04,240 --> 00:21:08,359 Speaker 1: the parlance um didn't perform very well, and I think 427 00:21:08,840 --> 00:21:11,800 Speaker 1: a lot of the those with fire in their bellies 428 00:21:11,800 --> 00:21:16,119 Speaker 1: have been somewhat chastened. But we still have a number 429 00:21:16,200 --> 00:21:20,600 Speaker 1: of underlying indicators in the US support for political violence, 430 00:21:21,119 --> 00:21:23,760 Speaker 1: you know, the polarization that we've all just sort of 431 00:21:23,880 --> 00:21:26,960 Speaker 1: got used to that are alarming. But I think that 432 00:21:27,040 --> 00:21:30,280 Speaker 1: there were some real reasons for optimism coming out to 433 00:21:30,640 --> 00:21:33,879 Speaker 1: the Air Against the political Air Against led by Tim Keene. 434 00:21:33,880 --> 00:21:36,240 Speaker 1: As it were a two party system, we have learned 435 00:21:36,240 --> 00:21:38,040 Speaker 1: in the last couple of days that were a four 436 00:21:38,080 --> 00:21:42,119 Speaker 1: party system of extremists and two moderate parties. You agree 437 00:21:42,119 --> 00:21:47,040 Speaker 1: with that that it's a four party America. Well, our 438 00:21:47,080 --> 00:21:50,560 Speaker 1: structure is built for a two party system, but within 439 00:21:50,680 --> 00:21:55,800 Speaker 1: each of those parties we have contingents UM which may 440 00:21:55,960 --> 00:22:00,120 Speaker 1: come into any kind of agreement on anything extremely difficult 441 00:22:00,000 --> 00:22:03,479 Speaker 1: on the so called Maga Republicans UM didn't do as 442 00:22:03,520 --> 00:22:07,359 Speaker 1: well as hoped, but they're still hugely influential. And I 443 00:22:07,400 --> 00:22:10,440 Speaker 1: suppose what I'm thinking about the most right now, because 444 00:22:10,440 --> 00:22:12,119 Speaker 1: it's that time of year when we have to do 445 00:22:12,160 --> 00:22:15,760 Speaker 1: the the year ahead outlook is who's going to run America? 446 00:22:15,920 --> 00:22:19,199 Speaker 1: And from where I sit here in London and in Europe. 447 00:22:19,280 --> 00:22:21,560 Speaker 1: What does that mean for the for the future of 448 00:22:22,000 --> 00:22:26,760 Speaker 1: the international system? Um, Trump there is less likely to 449 00:22:26,880 --> 00:22:29,600 Speaker 1: be to return to the White House. I can tell 450 00:22:29,600 --> 00:22:33,639 Speaker 1: you that people here really breathed a sigh of relief. 451 00:22:34,000 --> 00:22:37,000 Speaker 1: But the race is wide open, um, and that you 452 00:22:37,040 --> 00:22:40,840 Speaker 1: know that that is a new variable, I suppose one 453 00:22:40,880 --> 00:22:43,439 Speaker 1: that we hadn't really got our heads around. Let's turn 454 00:22:43,480 --> 00:22:45,679 Speaker 1: to the G twenty and talk about the international story 455 00:22:46,080 --> 00:22:49,200 Speaker 1: the president with some renewed confidence. Some people might say, 456 00:22:49,240 --> 00:22:50,560 Speaker 1: after this week, how do you think that's going to 457 00:22:50,600 --> 00:22:55,040 Speaker 1: play out next week? Well, Biden is entitled I think 458 00:22:55,040 --> 00:22:57,320 Speaker 1: to have a bit of swagger in his step. I 459 00:22:57,359 --> 00:23:00,359 Speaker 1: know that's an unfashionable thing to say, but you know, 460 00:23:00,440 --> 00:23:04,840 Speaker 1: I'm all about providing an analytical framework. Um. You know, 461 00:23:04,880 --> 00:23:08,159 Speaker 1: the president's party normally gets hammered in mid terms, and 462 00:23:08,200 --> 00:23:13,199 Speaker 1: Democrats performed better than anybody thought. Um. Personally, I'm not 463 00:23:13,359 --> 00:23:17,320 Speaker 1: excited about the fact that we have such an elderly leadership. 464 00:23:17,440 --> 00:23:20,119 Speaker 1: I think a gerontocracy for a country that's still quite 465 00:23:20,119 --> 00:23:23,399 Speaker 1: young is worrying. But when Biden goes to to the 466 00:23:23,480 --> 00:23:26,760 Speaker 1: G twenty, Um, you know Putin is going to to 467 00:23:26,840 --> 00:23:29,960 Speaker 1: be there by by a zoom. I think that's remarkable, 468 00:23:30,520 --> 00:23:34,159 Speaker 1: a remarkable change from a few months ago when we 469 00:23:34,160 --> 00:23:38,520 Speaker 1: were talking about, you know, with genuine concern whether UM 470 00:23:38,720 --> 00:23:42,359 Speaker 1: Beijing's announcement in February of a friendship without limits with 471 00:23:42,440 --> 00:23:45,560 Speaker 1: Russia was going to be a major change to the 472 00:23:45,600 --> 00:23:50,760 Speaker 1: weights in the international system. UM China is not UM 473 00:23:50,880 --> 00:23:53,800 Speaker 1: using any of its global political capital to help Russia. 474 00:23:54,040 --> 00:23:58,240 Speaker 1: Russia finds itself marginalized, and we can when we look 475 00:23:58,280 --> 00:24:01,520 Speaker 1: at these kind of big macro dynamic mixed UM. India 476 00:24:01,600 --> 00:24:05,240 Speaker 1: also has you know, not hesitated to be critical to 477 00:24:05,359 --> 00:24:08,560 Speaker 1: use its vote at the u N and Saudi which 478 00:24:08,560 --> 00:24:11,520 Speaker 1: had aligned with Russia, or at least that's how it 479 00:24:11,560 --> 00:24:15,280 Speaker 1: was perceived at OPEC, UM seems to be trying to 480 00:24:15,280 --> 00:24:18,080 Speaker 1: to kind of adjust there. So you know, we're looking 481 00:24:18,119 --> 00:24:22,560 Speaker 1: at a shift in the planetary weights in the global 482 00:24:22,600 --> 00:24:26,720 Speaker 1: solar system and a much more marginalized role for for Russia, 483 00:24:26,760 --> 00:24:30,840 Speaker 1: which has been a spoiler UM really since since the 484 00:24:30,840 --> 00:24:33,720 Speaker 1: collapse of the Soviet Union, since Putin came to power 485 00:24:33,720 --> 00:24:36,800 Speaker 1: in two thousand. Briefly, if you can, we understand now 486 00:24:36,880 --> 00:24:38,960 Speaker 1: it's been confirmed a meeting between the President of the 487 00:24:39,000 --> 00:24:41,800 Speaker 1: United States and the Chinese leader on Monday ahead of 488 00:24:41,840 --> 00:24:44,800 Speaker 1: the G twenty. We often talk about deliverables. Are there 489 00:24:44,840 --> 00:24:50,159 Speaker 1: any gun into this? I don't think we should expect deliverables. Um, 490 00:24:50,440 --> 00:24:53,520 Speaker 1: this is a time, you know, I've just talked about 491 00:24:53,560 --> 00:24:57,640 Speaker 1: some of the tensions in the relationship. Biden goes not 492 00:24:57,720 --> 00:25:01,480 Speaker 1: as as somebody who you know was um defeated in 493 00:25:01,680 --> 00:25:04,960 Speaker 1: mid terms, but as someone who I think intends to 494 00:25:04,960 --> 00:25:09,240 Speaker 1: to run again. Um. He has cloud and the U 495 00:25:09,320 --> 00:25:13,600 Speaker 1: S and China on climate and particularly it was an 496 00:25:13,600 --> 00:25:15,879 Speaker 1: area of cooperation. So I think they're gonna want to 497 00:25:15,920 --> 00:25:19,720 Speaker 1: find a bottom to you know, this relationship, you know, 498 00:25:19,880 --> 00:25:23,320 Speaker 1: find a floor, uh, and move on from there. China 499 00:25:23,400 --> 00:25:26,920 Speaker 1: is not happy about the US cramping its style on 500 00:25:26,920 --> 00:25:31,280 Speaker 1: on tech, but I think, you know, there's the US 501 00:25:31,320 --> 00:25:35,360 Speaker 1: has stood its ground in a way that commands more 502 00:25:35,440 --> 00:25:39,199 Speaker 1: respect on the world stage, particularly after the fiasco, the 503 00:25:39,240 --> 00:25:42,760 Speaker 1: withdrawal in Afghanistan, right, that was a huge blow. Tina. 504 00:25:42,800 --> 00:25:48,400 Speaker 1: Thank you, Tina Affordham Global Foresight. This is the Bloomberg 505 00:25:48,480 --> 00:25:52,840 Speaker 1: Surveillance Podcast. Thanks for listening. Join us live weekdays from 506 00:25:52,880 --> 00:25:56,320 Speaker 1: seven to ten Ami Eastern. I'm Bloomberg Radio and I'm 507 00:25:56,320 --> 00:26:00,639 Speaker 1: Bloomberg Television. Each day from six to nine AM for 508 00:26:00,880 --> 00:26:05,800 Speaker 1: insight from the best in economics, finance, investment, and international relations. 509 00:26:06,280 --> 00:26:10,879 Speaker 1: And subscribe to the Surveillance podcast on Apple podcast, SoundCloud, 510 00:26:11,080 --> 00:26:14,680 Speaker 1: Bloomberg dot com, and of course, on the terminal. I'm 511 00:26:14,720 --> 00:26:17,399 Speaker 1: Tom Keene, and this is Bloomberg.