1 00:00:06,320 --> 00:00:12,960 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Leye. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:33,400 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. We're 5 00:00:33,400 --> 00:00:36,479 Speaker 1: beginning them with a story of volatility. The volatility appears 6 00:00:36,479 --> 00:00:38,239 Speaker 1: to be on the front pages of most of the 7 00:00:38,280 --> 00:00:41,760 Speaker 1: international newspapers. You don't really see it in the market. 8 00:00:41,840 --> 00:00:45,199 Speaker 1: In the United States, the VIX index very briefly traded 9 00:00:45,280 --> 00:00:48,240 Speaker 1: with an eleven handle this morning. So where is the vault? 10 00:00:48,320 --> 00:00:50,680 Speaker 1: I feel like it's seen again. Let's bring into Bias 11 00:00:50,760 --> 00:00:54,000 Speaker 1: Left Kovic, City Chief US equity strategist. Good morning to Bias, 12 00:00:54,040 --> 00:00:57,160 Speaker 1: Good morning, I'm very well the front pages of most 13 00:00:57,160 --> 00:00:59,600 Speaker 1: of the newspapers freaking out as they usually do. To Bias. 14 00:01:00,040 --> 00:01:02,720 Speaker 1: Don't see it in the market, do you not? Really? Um? 15 00:01:03,160 --> 00:01:05,759 Speaker 1: You mentioned the VIX. We we track our Panicky four 16 00:01:05,760 --> 00:01:08,560 Speaker 1: a model, which is more a proprietary model looking at positioning, 17 00:01:08,920 --> 00:01:10,880 Speaker 1: and we're seeing kind of neutral levels. Back if you 18 00:01:10,880 --> 00:01:14,040 Speaker 1: went to January, everybody was really excited and that's kind 19 00:01:14,040 --> 00:01:16,640 Speaker 1: of fallen off with some inflation fears back in February, 20 00:01:17,040 --> 00:01:19,680 Speaker 1: and investors now are getting buffetted, if you like, by 21 00:01:19,959 --> 00:01:22,280 Speaker 1: concerns on let's say trade. But on the other side, 22 00:01:22,319 --> 00:01:24,800 Speaker 1: they're saying, hey, earnings are pretty good, buybacks are pretty good, 23 00:01:25,040 --> 00:01:26,920 Speaker 1: so they're not that rattled. No, so we have this 24 00:01:27,000 --> 00:01:29,960 Speaker 1: story where the secular growth story holds up. You see 25 00:01:29,959 --> 00:01:32,080 Speaker 1: that in tech, where the earnings have been terrific. Text 26 00:01:32,080 --> 00:01:35,080 Speaker 1: stocks all time highs, and that's that record high small 27 00:01:35,120 --> 00:01:37,280 Speaker 1: caps in the United States off the back of a 28 00:01:37,280 --> 00:01:40,240 Speaker 1: stronger domestic economy that russell at all time high. So 29 00:01:40,280 --> 00:01:42,319 Speaker 1: set me up for summer. To b us your note 30 00:01:42,400 --> 00:01:45,520 Speaker 1: this morning, tourists often head out for summer. I read 31 00:01:45,520 --> 00:01:48,120 Speaker 1: that earlier in the week. Yeah, a lot of that 32 00:01:48,120 --> 00:01:50,240 Speaker 1: had to do with we got this little fear last 33 00:01:50,240 --> 00:01:53,680 Speaker 1: week around Italy and everybody kind of bolted from cyclicals. 34 00:01:54,080 --> 00:01:56,920 Speaker 1: They backed off their financials as bond yields moved in 35 00:01:57,240 --> 00:01:59,240 Speaker 1: kind of as a as a function of the safe 36 00:01:59,240 --> 00:02:02,840 Speaker 1: have and trade. So investors don't have great conviction in 37 00:02:03,120 --> 00:02:06,240 Speaker 1: their positions. The one area they do is intact where 38 00:02:06,280 --> 00:02:08,200 Speaker 1: they feel very comfortab about the long term growth story. 39 00:02:08,280 --> 00:02:12,240 Speaker 1: But my only argument there would be everybody knows that already. 40 00:02:12,360 --> 00:02:14,120 Speaker 1: You know, what's your incremental piece of good news. It's 41 00:02:14,120 --> 00:02:16,640 Speaker 1: going to drive those stocks even higher. You mentioned small 42 00:02:16,680 --> 00:02:19,160 Speaker 1: caps wasn't a risk trade, it was a dollar trade. 43 00:02:19,480 --> 00:02:21,239 Speaker 1: As the dollar went up, it kind of dragged the 44 00:02:21,320 --> 00:02:24,120 Speaker 1: small caps up with them. They're they're very sensitive to 45 00:02:24,240 --> 00:02:26,720 Speaker 1: those currency moves. So it's not even that people are 46 00:02:26,720 --> 00:02:29,799 Speaker 1: that excited about the small cap growth domestic economy story, 47 00:02:29,800 --> 00:02:32,120 Speaker 1: because I could have made that argument three or four 48 00:02:32,160 --> 00:02:33,959 Speaker 1: or five months ago and they weren't participating in the 49 00:02:34,040 --> 00:02:39,040 Speaker 1: same way. So it's more a currency issue. In general, 50 00:02:39,120 --> 00:02:42,880 Speaker 1: investors have been kind of looking for something that's going 51 00:02:42,919 --> 00:02:46,040 Speaker 1: to get them really excited. You can't cough until John coughs, 52 00:02:46,080 --> 00:02:48,639 Speaker 1: and he can't cough till I cough. Well, I think 53 00:02:48,680 --> 00:02:53,760 Speaker 1: everybody will ever again. If you can find me good 54 00:02:53,800 --> 00:02:57,880 Speaker 1: allergy medicine, I'm buying that stock. Tom Tom Kane has 55 00:02:57,880 --> 00:03:01,160 Speaker 1: got some good meds I have, And you know it's 56 00:03:01,280 --> 00:03:09,040 Speaker 1: it's it's shaking forever um Tobias. When we look at 57 00:03:09,240 --> 00:03:11,600 Speaker 1: the spirit of the equity markets, there's got to be 58 00:03:11,600 --> 00:03:14,240 Speaker 1: an opportunity, it's got to be a value. Which sector 59 00:03:14,840 --> 00:03:16,560 Speaker 1: is the one where you go? You know this hasn't 60 00:03:16,600 --> 00:03:20,519 Speaker 1: moved like Amazon. There's a real opportunity here either to 61 00:03:20,760 --> 00:03:24,040 Speaker 1: make a total return or to protect myself of things 62 00:03:24,120 --> 00:03:26,080 Speaker 1: fall apart, which is that sector. So if I have 63 00:03:26,120 --> 00:03:27,919 Speaker 1: to think about protect they're a little different. If I 64 00:03:28,000 --> 00:03:30,359 Speaker 1: have to think about protection, it's it's things like farm 65 00:03:30,440 --> 00:03:33,360 Speaker 1: in biotech where they really drive to beat of a 66 00:03:33,360 --> 00:03:38,560 Speaker 1: different drummer, and it's a function of pipelines, FDA approval, 67 00:03:38,720 --> 00:03:42,440 Speaker 1: those kind of factors. Um. They're they're defensive and in 68 00:03:42,480 --> 00:03:44,560 Speaker 1: the in the generic sense, but they also have this 69 00:03:44,640 --> 00:03:49,040 Speaker 1: kind of relationship to increase volatility if we get it um. 70 00:03:49,120 --> 00:03:51,080 Speaker 1: On the other side, I think areas like energy have 71 00:03:51,120 --> 00:03:53,680 Speaker 1: been left a bit in the dust here. People have 72 00:03:53,680 --> 00:03:56,480 Speaker 1: have very low conviction in the ability for the industry 73 00:03:56,520 --> 00:03:59,680 Speaker 1: to maintain profitability and at the same time that the 74 00:04:00,000 --> 00:04:03,800 Speaker 1: industry can't actually put in more production in the premium 75 00:04:03,800 --> 00:04:07,440 Speaker 1: basin right now because there's all these pipeline bottlenecks. I mean, 76 00:04:07,880 --> 00:04:09,880 Speaker 1: all Street Journal had a great charter lumber. Today, I 77 00:04:09,920 --> 00:04:13,760 Speaker 1: took it off the Bloomberg terminal and did inflation adjusted lumber, 78 00:04:14,240 --> 00:04:17,120 Speaker 1: and we're really very peaky. Are we seeing a commodity 79 00:04:17,200 --> 00:04:21,479 Speaker 1: turn including oil, including lumber, etcetera. So I know that 80 00:04:21,480 --> 00:04:24,240 Speaker 1: you followed Morse's work pretty closely at City, and they 81 00:04:24,240 --> 00:04:27,400 Speaker 1: do believe that commodities are are probably an interesting area 82 00:04:27,440 --> 00:04:30,640 Speaker 1: to go. The one risk would be very powerful dollar 83 00:04:30,760 --> 00:04:33,760 Speaker 1: that would hurt commodities. UM, we don't see the reason 84 00:04:33,880 --> 00:04:36,440 Speaker 1: for a very powerful dollars. I don't see a particularly 85 00:04:36,440 --> 00:04:39,080 Speaker 1: great reason for for a horrible dollar either. So we're 86 00:04:39,080 --> 00:04:41,320 Speaker 1: gonna kind of trade around here, and that gives commodities 87 00:04:41,320 --> 00:04:44,359 Speaker 1: the ability to UH to continue moving higher. So we 88 00:04:44,400 --> 00:04:46,640 Speaker 1: do like material stocks as well, but energies one where 89 00:04:46,680 --> 00:04:50,040 Speaker 1: I think investors have extremely low belief in the disciplined 90 00:04:50,080 --> 00:04:54,200 Speaker 1: industry UM, which almost can't get undisciplined in its capital 91 00:04:54,279 --> 00:04:58,000 Speaker 1: spending activity in midwestern Texas simply because they can't move 92 00:04:58,040 --> 00:04:59,919 Speaker 1: the oil right now, can we spend a little bit 93 00:04:59,920 --> 00:05:03,279 Speaker 1: a on talking about another convictions right? Um sector convictions 94 00:05:03,360 --> 00:05:05,240 Speaker 1: right for a lot of people, financials, and it just 95 00:05:05,600 --> 00:05:07,800 Speaker 1: isn't delivering. Um. You spend a little bit of time 96 00:05:07,800 --> 00:05:10,280 Speaker 1: researching this over the last week, and I mentioned the 97 00:05:10,400 --> 00:05:12,640 Speaker 1: last few years as well, just why isn't that delivering? 98 00:05:12,640 --> 00:05:14,480 Speaker 1: Why is it a story of seven seen and the 99 00:05:14,600 --> 00:05:16,919 Speaker 1: eight seen? So so I think part of the reason 100 00:05:16,960 --> 00:05:19,560 Speaker 1: for financials, and I can't necessarily tell you what everybody thinks, 101 00:05:19,600 --> 00:05:21,359 Speaker 1: but I think part of the reason for financials is 102 00:05:21,400 --> 00:05:24,760 Speaker 1: that UM it's viewed as an industry potentially under attack, 103 00:05:25,200 --> 00:05:29,640 Speaker 1: similarly retail, similar to energy with technology changes, so fintech 104 00:05:29,720 --> 00:05:32,640 Speaker 1: the idea that you could, you know, pay without using 105 00:05:32,680 --> 00:05:36,119 Speaker 1: your credit card and some other system for whatever product 106 00:05:36,200 --> 00:05:38,560 Speaker 1: you want to buy, that they're being bypassed. The same 107 00:05:38,600 --> 00:05:40,080 Speaker 1: thing on the lending side, if you go to some 108 00:05:40,120 --> 00:05:45,240 Speaker 1: of the you know, crowdfunding lending UM alternatives. We think 109 00:05:45,279 --> 00:05:47,960 Speaker 1: that's all fair and dandy and that people who have 110 00:05:48,000 --> 00:05:50,640 Speaker 1: this perspective, But the big story in our mind is 111 00:05:50,640 --> 00:05:54,839 Speaker 1: a pickup that's coming in in commercial industrial lending. That 112 00:05:55,040 --> 00:05:57,599 Speaker 1: usually has about a six quarter lag from when you 113 00:05:57,640 --> 00:06:00,080 Speaker 1: see change and lending standards. So if you were all 114 00:06:00,120 --> 00:06:02,880 Speaker 1: back in late in early twenty six rather there was 115 00:06:02,920 --> 00:06:05,680 Speaker 1: a lot of pressure around the energy sector causing disruption 116 00:06:05,680 --> 00:06:09,280 Speaker 1: in credit markets, and that showed up in terms of 117 00:06:09,360 --> 00:06:11,960 Speaker 1: learning activity in the latter part of last year. Six 118 00:06:12,040 --> 00:06:15,359 Speaker 1: quarters later. That started inflecting in the first quarter, and 119 00:06:15,400 --> 00:06:19,520 Speaker 1: we would expect a meaningful improvement in the next couple 120 00:06:19,520 --> 00:06:22,640 Speaker 1: of three quarters in learning activity for commercial industrial loans. 121 00:06:23,000 --> 00:06:24,760 Speaker 1: That's a function of M and A. It's a function 122 00:06:24,800 --> 00:06:28,520 Speaker 1: of of major capital aspenditures that you can't go out 123 00:06:28,520 --> 00:06:32,640 Speaker 1: and borrow ten billion dollars in some crowdfunding aspect, you 124 00:06:32,680 --> 00:06:34,440 Speaker 1: have to go to the syndicates of the banks. It's 125 00:06:34,440 --> 00:06:38,559 Speaker 1: the tax plan a big factor. It helps at the margin. 126 00:06:38,640 --> 00:06:41,720 Speaker 1: So one of the really distinctive and divergent trends, as 127 00:06:41,760 --> 00:06:44,560 Speaker 1: we saw in May, the Senior Loan Officer survey from 128 00:06:44,600 --> 00:06:47,320 Speaker 1: the Followerserve Board come out showing further easing and credit 129 00:06:47,400 --> 00:06:50,120 Speaker 1: standards in an environment where we're seeing Wait a minute, 130 00:06:50,160 --> 00:06:53,320 Speaker 1: but the feather raising rates bonules are higher, credit spreads 131 00:06:53,320 --> 00:06:56,320 Speaker 1: of widened some degree. Um. Isn't that kind of the 132 00:06:56,360 --> 00:07:00,839 Speaker 1: exact opposite direction. Um. So what a lot of banks 133 00:07:00,839 --> 00:07:03,240 Speaker 1: told you when they got the tax cuts was that 134 00:07:03,279 --> 00:07:05,240 Speaker 1: they would use about half of the savings and the 135 00:07:05,279 --> 00:07:08,919 Speaker 1: tax cuts to be more competitive and provide better terms 136 00:07:08,920 --> 00:07:12,000 Speaker 1: to corporate lenders. And that's exactly what they seem to 137 00:07:12,040 --> 00:07:15,040 Speaker 1: be doing. Levich Greta can't shop me this morning. Cities 138 00:07:15,120 --> 00:07:18,320 Speaker 1: chief US equity strategist with a cough like the rest 139 00:07:18,320 --> 00:07:34,400 Speaker 1: of us with us John Taft, he is vice chairman 140 00:07:34,440 --> 00:07:38,400 Speaker 1: of Baird among other services, working with RBC and Mini 141 00:07:38,480 --> 00:07:42,280 Speaker 1: Eppo shops before that, but much more. Also on his 142 00:07:42,400 --> 00:07:46,720 Speaker 1: important book of X number of years ago called Stewardship, which, 143 00:07:46,800 --> 00:07:51,320 Speaker 1: to give you a perspective, Taft the Republican at a 144 00:07:51,320 --> 00:07:54,720 Speaker 1: blurb from one B. Frank Barney Frank. How did that 145 00:07:54,840 --> 00:07:57,320 Speaker 1: come about? How did Barney Frank? You know, you look 146 00:07:57,320 --> 00:07:58,720 Speaker 1: at the back of the book and you go Barney 147 00:07:58,720 --> 00:08:01,800 Speaker 1: Frank's telling us shot up and read John Taft, how 148 00:08:01,840 --> 00:08:04,760 Speaker 1: did that happen? Yeah? And he wrote about how surprised 149 00:08:04,800 --> 00:08:08,560 Speaker 1: it was that John Taft had something he felt worth endorsing. 150 00:08:08,960 --> 00:08:13,600 Speaker 1: Actually it came about because during the financial crisis, I 151 00:08:13,680 --> 00:08:19,080 Speaker 1: testified to his committee in favor of a fiduciary standard 152 00:08:19,080 --> 00:08:22,880 Speaker 1: of care for financial advisors providing advice to individual investors. 153 00:08:23,600 --> 00:08:26,800 Speaker 1: And uh, well, you say, what a shock. But Tom, today, 154 00:08:26,880 --> 00:08:31,520 Speaker 1: almost ten years later, we're still debating whether that's a 155 00:08:31,560 --> 00:08:34,720 Speaker 1: good idea. Why do we need a fiduciary care act? 156 00:08:34,840 --> 00:08:37,200 Speaker 1: If we have prudent man rule from Mr Putnam a 157 00:08:37,200 --> 00:08:40,640 Speaker 1: few years before the test And this has been the 158 00:08:40,720 --> 00:08:44,880 Speaker 1: debate going on for the last ten years. Here's what's 159 00:08:44,960 --> 00:08:47,440 Speaker 1: what's happening today. Though we're in a good place anyway, 160 00:08:47,520 --> 00:08:50,000 Speaker 1: that's how Barney Frank came to came to normally around 161 00:08:50,000 --> 00:08:53,600 Speaker 1: the fiduciary standard. But what's happened is the SEC was 162 00:08:53,679 --> 00:08:56,760 Speaker 1: given by Barney Frank and his committee the authority to 163 00:08:56,840 --> 00:09:01,960 Speaker 1: write a fiduciary rule. They didn't. Then the Department of 164 00:09:02,040 --> 00:09:04,520 Speaker 1: Labor under Tom Perez came in and wrote a rule 165 00:09:04,559 --> 00:09:06,320 Speaker 1: that quite frankly, I would think was one of the 166 00:09:06,400 --> 00:09:09,040 Speaker 1: worst pieces of financial regulation to come out of the 167 00:09:09,040 --> 00:09:12,720 Speaker 1: financial crisis that now has been thrown out by a court. 168 00:09:12,920 --> 00:09:17,680 Speaker 1: And mercifully, the SEC under Jay Clayton is stepping through 169 00:09:17,679 --> 00:09:22,199 Speaker 1: the four and there and they've proposed regulation best interest 170 00:09:22,280 --> 00:09:25,959 Speaker 1: exactly what you're talking about, the Putnam formulation. Why do 171 00:09:26,000 --> 00:09:29,040 Speaker 1: you need a financial finucier rule If there's a regulation 172 00:09:29,120 --> 00:09:32,319 Speaker 1: saying you have to put clients interests first without regard 173 00:09:32,400 --> 00:09:35,840 Speaker 1: to your own financial situation, that's what the SEC is doing. 174 00:09:36,120 --> 00:09:39,520 Speaker 1: The SEC knows what he's doing. And finally we may 175 00:09:39,559 --> 00:09:43,160 Speaker 1: get a rule that has a uniform and higher level 176 00:09:43,480 --> 00:09:46,480 Speaker 1: of investor protection than we've had in the past. That'll 177 00:09:46,520 --> 00:09:48,760 Speaker 1: be good for everybody, good for the industry, and good 178 00:09:48,800 --> 00:09:52,000 Speaker 1: for clients. And you mentioned Jake Clayton and he's we've 179 00:09:52,000 --> 00:09:54,199 Speaker 1: had him in for interviews and also of course his 180 00:09:54,240 --> 00:09:56,360 Speaker 1: work at the Economic Club of New York. And I 181 00:09:56,400 --> 00:09:59,680 Speaker 1: would mention the chairman Levitt is a fan of what 182 00:09:59,720 --> 00:10:03,360 Speaker 1: he's seas in Germany, Clayton, and that speaks to normalcy 183 00:10:03,679 --> 00:10:07,760 Speaker 1: within regulation, normalcy within Washington, and it speaks to a 184 00:10:07,800 --> 00:10:11,240 Speaker 1: normalcy which is the fabric of the Taft family going 185 00:10:11,320 --> 00:10:14,960 Speaker 1: back to President and Chief Justice taff and frankly long 186 00:10:15,000 --> 00:10:18,439 Speaker 1: before that as well. Do you see a normalcy out 187 00:10:18,520 --> 00:10:23,120 Speaker 1: there within political and financial America right now? I so 188 00:10:23,120 --> 00:10:26,920 Speaker 1: I'm gonna answer the question yes, but I mean yes 189 00:10:26,960 --> 00:10:29,880 Speaker 1: and no. So here's what I mean. If you look 190 00:10:30,000 --> 00:10:38,000 Speaker 1: at the political UH dialogue, the process, the dysfunctionality UH 191 00:10:38,160 --> 00:10:41,760 Speaker 1: at the highest levels of our political leadership, you would say, no, 192 00:10:42,000 --> 00:10:46,080 Speaker 1: we're as far away from what my family represented in 193 00:10:46,120 --> 00:10:49,439 Speaker 1: their six decades of public services you can get. On 194 00:10:49,480 --> 00:10:53,439 Speaker 1: the other hand, if you look at the actual policies 195 00:10:53,640 --> 00:10:57,560 Speaker 1: coming out, in particular in the financial sector. So a 196 00:10:57,640 --> 00:11:01,079 Speaker 1: year ago, Secretary of Treasury and the new oution signaled 197 00:11:01,200 --> 00:11:04,040 Speaker 1: what the Trump Administration's going to do, and they've been 198 00:11:04,120 --> 00:11:08,720 Speaker 1: executing it. And guess what, it actually makes sense. It's 199 00:11:08,800 --> 00:11:16,080 Speaker 1: reasonable and appropriate. The pendulum of financial regulation swung much 200 00:11:16,240 --> 00:11:21,040 Speaker 1: too far to the excessive side of the equations to 201 00:11:21,080 --> 00:11:24,480 Speaker 1: financial crisis, and now we're just correcting it back to 202 00:11:24,600 --> 00:11:27,160 Speaker 1: a level that's appropriate. But you listen to the Elizabeth 203 00:11:27,160 --> 00:11:29,480 Speaker 1: Warrens of the Earth world and it's like the end 204 00:11:29,559 --> 00:11:32,679 Speaker 1: of Western humanity. I want to go back to incentives here, 205 00:11:32,679 --> 00:11:35,240 Speaker 1: which is something you've had to deal with across wealth 206 00:11:35,280 --> 00:11:38,559 Speaker 1: management at over we C and with your stewardship Bart. 207 00:11:38,640 --> 00:11:41,600 Speaker 1: And that is the idea that I hear this from 208 00:11:41,679 --> 00:11:44,520 Speaker 1: people all the time, and that executives today are so 209 00:11:44,600 --> 00:11:50,319 Speaker 1: incentivized off of their income statement and off of profit 210 00:11:50,880 --> 00:11:53,880 Speaker 1: that labor is not getting their fair share. If we 211 00:11:54,000 --> 00:11:57,400 Speaker 1: gone is a pendulum gone so far that executives are 212 00:11:57,440 --> 00:12:02,080 Speaker 1: only representing themselves. The issue greater good, the issue that 213 00:12:02,559 --> 00:12:08,520 Speaker 1: financial institutions have been dealing with since the partnership model 214 00:12:09,440 --> 00:12:14,720 Speaker 1: went away, since people who own and ran financial services 215 00:12:14,760 --> 00:12:17,840 Speaker 1: firm no longer had their own capital at risk, is 216 00:12:17,880 --> 00:12:22,160 Speaker 1: the agency problem. There's an asymmetric ward system, i e. 217 00:12:22,480 --> 00:12:24,720 Speaker 1: The chance to make lots of money if things go well, 218 00:12:24,880 --> 00:12:28,240 Speaker 1: but you lose nothing if things go poorly. That is 219 00:12:28,520 --> 00:12:32,240 Speaker 1: the asymmetric compensation system that prevails today at Wall Street. 220 00:12:33,400 --> 00:12:36,240 Speaker 1: One of the things that I've experienced recently, Tom, since 221 00:12:36,240 --> 00:12:38,640 Speaker 1: I went back to work at Robert W. Beard, which 222 00:12:38,640 --> 00:12:44,160 Speaker 1: is a hundred percent owned by its employees, is having 223 00:12:44,160 --> 00:12:46,200 Speaker 1: your own capital at risk again. And you know what, 224 00:12:46,240 --> 00:12:49,960 Speaker 1: it makes a complete difference. Um, it's not reasonable to 225 00:12:50,040 --> 00:12:54,400 Speaker 1: expect that today, but we need incentive systems that recreate 226 00:12:54,480 --> 00:12:57,640 Speaker 1: that with this. John Taft of Minneapolis, of course, and 227 00:12:58,480 --> 00:13:01,920 Speaker 1: his good work. John Ferrell, my colleague, really doesn't understand 228 00:13:02,000 --> 00:13:04,559 Speaker 1: the Minnesota vikings, so we have them reading I Did 229 00:13:04,600 --> 00:13:06,640 Speaker 1: It my Way, A remarkable journey to the Hall of 230 00:13:06,640 --> 00:13:10,760 Speaker 1: Fame by Bud Grant. But within that, John, is the idea, 231 00:13:11,000 --> 00:13:15,800 Speaker 1: John Farrell, that that London global Wall Street is different. 232 00:13:15,840 --> 00:13:19,240 Speaker 1: Do you do, John Taft, do you distinguished between how 233 00:13:19,240 --> 00:13:22,480 Speaker 1: we're doing this in America between what we're seeing in 234 00:13:22,480 --> 00:13:25,720 Speaker 1: the city in London. I don't. I don't know the 235 00:13:25,800 --> 00:13:28,960 Speaker 1: London environment. I can tell you that how you do 236 00:13:29,040 --> 00:13:32,959 Speaker 1: things in New York is different from the heartland. How 237 00:13:33,000 --> 00:13:34,760 Speaker 1: you do things in the Heartland. You asked me that 238 00:13:34,840 --> 00:13:39,559 Speaker 1: question on on your show earlier today. In other words, uh, 239 00:13:39,679 --> 00:13:43,240 Speaker 1: we keep focusing on a half dozen financial institutions based 240 00:13:43,280 --> 00:13:45,679 Speaker 1: here in New York or in a major financial system guilt. 241 00:13:45,760 --> 00:13:49,600 Speaker 1: There are tens of thousands of financial institutions across the 242 00:13:49,600 --> 00:13:54,080 Speaker 1: country who have their own capital at risk and who 243 00:13:54,120 --> 00:13:59,520 Speaker 1: serve middle market and individual clients. And that's the Wall 244 00:13:59,559 --> 00:14:01,960 Speaker 1: Street that we don't pay attention to. Is that true 245 00:14:01,960 --> 00:14:05,200 Speaker 1: in England? Is that? Is it a London focus or 246 00:14:05,240 --> 00:14:08,200 Speaker 1: is it just like Canada more consolidate And there's very 247 00:14:08,240 --> 00:14:10,720 Speaker 1: much London focus in the UK across the board, and 248 00:14:10,760 --> 00:14:13,400 Speaker 1: not just in finance. That's been the accusation against the 249 00:14:13,520 --> 00:14:15,680 Speaker 1: UK for ages. Just to wrap things up with you, John, 250 00:14:15,760 --> 00:14:18,800 Speaker 1: you mentioned Senator Warren and her pushing back against a 251 00:14:18,840 --> 00:14:21,480 Speaker 1: little bit of deregulation to what extent is there still 252 00:14:21,520 --> 00:14:24,800 Speaker 1: just a political football and about points scoring. I think 253 00:14:24,880 --> 00:14:27,880 Speaker 1: it's entirely a political football and about point scoring, because 254 00:14:27,920 --> 00:14:31,560 Speaker 1: if you look at what's going on in deregulation, honestly done, 255 00:14:31,840 --> 00:14:35,400 Speaker 1: it is tweaking. It is not whole scale scaling back 256 00:14:35,480 --> 00:14:38,480 Speaker 1: do Frank and the tweaks are appropriate, and the tweaks 257 00:14:38,520 --> 00:14:43,040 Speaker 1: will remove irritance and impediments to financial institution in tuitions 258 00:14:43,120 --> 00:14:45,359 Speaker 1: doing what they're supposed to do, which is to facilitate 259 00:14:45,440 --> 00:14:48,160 Speaker 1: economic growth. John' taft. Great to have a bit of 260 00:14:48,160 --> 00:14:52,040 Speaker 1: presidential blood around the table in New York City, great 261 00:14:52,080 --> 00:14:56,080 Speaker 1: great grandfather John. Yes, amazing, And it was also Chief 262 00:14:56,120 --> 00:14:59,320 Speaker 1: Justice John Ferro. This is a real distinguishing feature. Yeah, 263 00:14:59,400 --> 00:15:01,840 Speaker 1: that's what he really wanted to do, but he did 264 00:15:01,880 --> 00:15:06,000 Speaker 1: the the the political band first. Right to have you 265 00:15:06,000 --> 00:15:08,480 Speaker 1: with us, Bunce, Chairman of BET, Thank you very much. 266 00:15:20,880 --> 00:15:25,560 Speaker 1: Shannon O'Neil has been wonderful and Latin American studies on Mexico, 267 00:15:25,640 --> 00:15:29,280 Speaker 1: but much more on overall Latin America on some of 268 00:15:29,320 --> 00:15:32,720 Speaker 1: the dynamics here. She's at the Council on Foreign Relations 269 00:15:32,720 --> 00:15:37,120 Speaker 1: where she is the Nelson and David Rockefeller Senior Fellow 270 00:15:37,160 --> 00:15:40,320 Speaker 1: for Latin American Studies, and we're honored that she can 271 00:15:40,400 --> 00:15:43,880 Speaker 1: join us now this morning. Shannon, is Brazil just simply 272 00:15:43,920 --> 00:15:47,280 Speaker 1: the usual Brazilian politics or is there something else going 273 00:15:47,360 --> 00:15:51,800 Speaker 1: on this time? Well, good morning, Tom, nice to join you. 274 00:15:51,800 --> 00:15:53,880 Speaker 1: You know, it makes a bit of both. There are 275 00:15:54,160 --> 00:15:56,800 Speaker 1: particular things that are happening right now. We have seen 276 00:15:57,280 --> 00:16:01,280 Speaker 1: some very serious strikes go nationwide. Truckers pull over and 277 00:16:01,320 --> 00:16:04,600 Speaker 1: stop delivering goods, to the point where millions of chickens 278 00:16:04,600 --> 00:16:07,480 Speaker 1: were dying because there was no feed. Airplanes weren't taking 279 00:16:07,480 --> 00:16:09,400 Speaker 1: off because there was no fuel. So we've seen some 280 00:16:09,800 --> 00:16:13,760 Speaker 1: immediate disruptions in the economy, but it's also these bigger 281 00:16:13,800 --> 00:16:16,480 Speaker 1: fundamental issues that I think investors are finally looking at 282 00:16:16,480 --> 00:16:19,840 Speaker 1: the ones you mentioned. And Brazil has incredibly high debt 283 00:16:19,880 --> 00:16:23,040 Speaker 1: to GDP ratio, so as people look to rising interest 284 00:16:23,120 --> 00:16:25,360 Speaker 1: rates the United States and more globally, this is a 285 00:16:25,400 --> 00:16:28,000 Speaker 1: country that's going to get hit hard. Well, Shannon, I 286 00:16:28,040 --> 00:16:30,120 Speaker 1: think you bring up an important point because a lot 287 00:16:30,160 --> 00:16:32,680 Speaker 1: of people look at Brazil. I think that the story 288 00:16:32,720 --> 00:16:34,800 Speaker 1: of the last ten years was a commodity story, but 289 00:16:35,040 --> 00:16:36,800 Speaker 1: actually a lot of the growth came off the back 290 00:16:36,800 --> 00:16:40,080 Speaker 1: of credit, didn't it, Shannon. It did. Credit was a 291 00:16:40,080 --> 00:16:42,640 Speaker 1: big part of a consumption was a real engine for 292 00:16:42,760 --> 00:16:45,320 Speaker 1: Brazil for many of these years. We saw through that 293 00:16:45,440 --> 00:16:48,600 Speaker 1: the two thousands, you know, thirty million people come into 294 00:16:48,600 --> 00:16:51,720 Speaker 1: the middle class, start buying those first refrigerators and cars 295 00:16:51,760 --> 00:16:54,920 Speaker 1: and other kinds of appliances and the like. And now 296 00:16:55,040 --> 00:16:58,760 Speaker 1: that has been fading. Um. So that engine um was 297 00:16:59,240 --> 00:17:01,640 Speaker 1: that dying part of the recessions they've gone through, and 298 00:17:01,680 --> 00:17:04,159 Speaker 1: the real question is can they pull back out of it, um, 299 00:17:04,200 --> 00:17:07,720 Speaker 1: and can they really restart that engine. His Trump trade 300 00:17:08,000 --> 00:17:14,520 Speaker 1: action and discourse allowed an entree for China into Brazil, 301 00:17:14,760 --> 00:17:19,280 Speaker 1: or at the margin, a greater China investment into Brazil. 302 00:17:21,359 --> 00:17:25,160 Speaker 1: China has been investing in Brazil all along, but primarily 303 00:17:25,359 --> 00:17:29,120 Speaker 1: in their natural resources, both in the actual resources themselves 304 00:17:29,440 --> 00:17:32,240 Speaker 1: and then somewhat in the logistics to get those resources 305 00:17:32,280 --> 00:17:35,840 Speaker 1: out of Brazil and to China. So you know, energy 306 00:17:36,080 --> 00:17:39,400 Speaker 1: and soy and beef and all sorts of things to 307 00:17:39,400 --> 00:17:43,200 Speaker 1: to provide for the Chinese people, but in also their market. 308 00:17:43,240 --> 00:17:46,359 Speaker 1: So that's really where they are thinking about investing. But 309 00:17:46,400 --> 00:17:49,359 Speaker 1: the fact of the United States is closing itself and 310 00:17:49,480 --> 00:17:53,040 Speaker 1: go into more protection stands means Brazil has been looking elsewhere. 311 00:17:53,040 --> 00:17:55,119 Speaker 1: They first have been looking towards their neighbors and to 312 00:17:55,280 --> 00:17:58,199 Speaker 1: the EU. But if those countries don't respond, and they 313 00:17:58,200 --> 00:18:00,439 Speaker 1: will look to China. Okay, But you know not that 314 00:18:00,480 --> 00:18:02,399 Speaker 1: you're looking at the currency day to day on your 315 00:18:02,400 --> 00:18:06,639 Speaker 1: Bloomberg gap on your cell phone, Shannon. But M and 316 00:18:06,720 --> 00:18:11,119 Speaker 1: I see some dynamics in Argentina. We see the horror true, 317 00:18:11,119 --> 00:18:15,200 Speaker 1: you know, no jokes. I mean of Venezuela. The stability 318 00:18:15,280 --> 00:18:18,879 Speaker 1: of the region is suspect to say the least, is 319 00:18:18,880 --> 00:18:22,440 Speaker 1: it business is usual in Latin America. Are we really 320 00:18:22,480 --> 00:18:27,439 Speaker 1: waiting here for some exogenous or endogenous shock to upset 321 00:18:27,520 --> 00:18:32,440 Speaker 1: this very large nation of Brazil. Well, this year in 322 00:18:32,520 --> 00:18:35,480 Speaker 1: Latin America, two out of every three voters is going 323 00:18:35,480 --> 00:18:38,240 Speaker 1: to the polls to elect a new president. And most 324 00:18:38,280 --> 00:18:40,359 Speaker 1: of these are not going to be incumbents. There's not 325 00:18:40,480 --> 00:18:42,480 Speaker 1: re election, so the new people coming in. So this 326 00:18:42,720 --> 00:18:45,680 Speaker 1: is a really pivotal moment in the region. And as 327 00:18:45,720 --> 00:18:49,119 Speaker 1: you mentioned, there are these big problems. Most voters are 328 00:18:49,119 --> 00:18:51,480 Speaker 1: going to go to the poll for domestic reasons. So 329 00:18:51,520 --> 00:18:53,879 Speaker 1: when you think about Brazil, they are going to go 330 00:18:54,000 --> 00:18:57,600 Speaker 1: because they're tired of recession, They're tired of the corruption 331 00:18:57,680 --> 00:19:00,680 Speaker 1: of their political class. They're going quite angry, and they're 332 00:19:00,720 --> 00:19:03,760 Speaker 1: looking for someone to vote for as an outsider. And 333 00:19:03,840 --> 00:19:06,919 Speaker 1: that is really the challenge because Brazil in order to 334 00:19:06,960 --> 00:19:09,240 Speaker 1: manage it, in order to work with Congress to get 335 00:19:09,240 --> 00:19:12,800 Speaker 1: the structural reforms that Brazil needs and investors want things 336 00:19:12,800 --> 00:19:15,159 Speaker 1: like pension reform, and they're like, you have to have 337 00:19:15,200 --> 00:19:17,679 Speaker 1: this compromise. I think that too, is why we're seeing 338 00:19:17,720 --> 00:19:20,600 Speaker 1: the rail being hit. People are looking towards two thousand 339 00:19:20,680 --> 00:19:24,080 Speaker 1: eighteen for Brazil, and they're seeing more paralysis on the 340 00:19:24,119 --> 00:19:27,359 Speaker 1: policy side. Shannon, with us with the Console Foreign Relations 341 00:19:27,400 --> 00:19:30,240 Speaker 1: and and for briefings on so many of these topics. 342 00:19:30,240 --> 00:19:32,600 Speaker 1: You can really start with the website of Mr Hassa's 343 00:19:33,200 --> 00:19:36,679 Speaker 1: Council on Foreign Relations. Shannon, you wrote a definitive post 344 00:19:37,240 --> 00:19:40,400 Speaker 1: literally within the last forty eight hours. Mexico knows how 345 00:19:40,440 --> 00:19:43,080 Speaker 1: to fight a trade war. Does Mr Trump know that? 346 00:19:43,240 --> 00:19:46,720 Speaker 1: Is he aware that Mexico and their brethren to the north, 347 00:19:46,800 --> 00:19:51,359 Speaker 1: the Canadians, actually may have a cogent in organized response 348 00:19:51,800 --> 00:19:55,720 Speaker 1: to Trump's NAFTA discussions. I don't know if he was 349 00:19:55,760 --> 00:19:57,520 Speaker 1: prepared for it, but I can tell you that the 350 00:19:57,560 --> 00:20:00,480 Speaker 1: Midwest farmers and they act businesses, they definitelyly know that 351 00:20:00,640 --> 00:20:03,560 Speaker 1: Mexico and Canada have a few cards up their sleeve. 352 00:20:03,680 --> 00:20:07,920 Speaker 1: And already we've seen Mexico step forward and and targets 353 00:20:08,000 --> 00:20:13,000 Speaker 1: specific congressional district and specific products. So it's potatoes and 354 00:20:13,080 --> 00:20:18,280 Speaker 1: apples and cheese and pork and specific products. So we're 355 00:20:18,280 --> 00:20:20,040 Speaker 1: starting to see that, and you're going to see members 356 00:20:20,040 --> 00:20:23,640 Speaker 1: of Congress already their constituents start calling them saying, look, 357 00:20:23,680 --> 00:20:25,680 Speaker 1: we we have these big tariffs on our product. Can 358 00:20:25,680 --> 00:20:28,320 Speaker 1: you do something. I mean, I mean within this is 359 00:20:28,760 --> 00:20:32,880 Speaker 1: the age old question of now versus when you were 360 00:20:32,880 --> 00:20:35,879 Speaker 1: first studying this years ago. And I go back again, 361 00:20:35,960 --> 00:20:38,320 Speaker 1: folks to a piece on mercatilism a few days ago 362 00:20:38,359 --> 00:20:42,560 Speaker 1: from Katherine Rample and the Washington Post. And Katherine Rample 363 00:20:42,600 --> 00:20:49,000 Speaker 1: makes a distinction of Finnish goods policies versus inputs policies. 364 00:20:49,480 --> 00:20:52,240 Speaker 1: Describe your expertise, and you've written about this in your 365 00:20:52,280 --> 00:20:56,840 Speaker 1: books of the input back and forth at the Mexican border. 366 00:20:58,760 --> 00:21:01,320 Speaker 1: But one of the interesting things that nafta broad about, 367 00:21:01,320 --> 00:21:03,640 Speaker 1: which we don't talk a lot about, but it's not 368 00:21:03,800 --> 00:21:06,000 Speaker 1: just that we import and export to each other, but 369 00:21:06,320 --> 00:21:08,320 Speaker 1: what we're sending back and forth are what are called 370 00:21:08,359 --> 00:21:10,840 Speaker 1: intermediate goods. So the pieces and parts that will come 371 00:21:10,880 --> 00:21:14,199 Speaker 1: together to make a car or a plane or medical 372 00:21:14,200 --> 00:21:17,400 Speaker 1: devices are a whole host of things. And that has 373 00:21:17,440 --> 00:21:20,320 Speaker 1: allowed companies off in US companies but off on Mexican 374 00:21:20,400 --> 00:21:24,159 Speaker 1: companies to create things that are better and cheaper and 375 00:21:24,200 --> 00:21:27,240 Speaker 1: able to compete with goods from China or the Europe 376 00:21:27,320 --> 00:21:30,040 Speaker 1: or anywhere else in the world. And these terrorists that 377 00:21:30,080 --> 00:21:32,720 Speaker 1: Trump is putting in on steel and aluminum, and perhaps 378 00:21:32,760 --> 00:21:36,000 Speaker 1: the ones that come after. That is disrupting this process. 379 00:21:36,040 --> 00:21:39,359 Speaker 1: And the challenge is it's going to make US companies 380 00:21:39,840 --> 00:21:43,040 Speaker 1: less competitive visa v the products that are made in 381 00:21:43,080 --> 00:21:46,359 Speaker 1: places like Asia, and that is what is breaking down 382 00:21:46,480 --> 00:21:50,840 Speaker 1: with these beginning parrats. Your classic Two Nations Indivisible ends 383 00:21:50,880 --> 00:21:55,360 Speaker 1: with a chapter which is deciding our mutual future. I'm 384 00:21:55,400 --> 00:21:58,600 Speaker 1: not sure that the president administration is a mutual future 385 00:21:58,680 --> 00:22:03,160 Speaker 1: with Mexico. Let's flip it. Does Mexico have a mutual 386 00:22:03,280 --> 00:22:05,919 Speaker 1: future with the United States of America or is it 387 00:22:05,960 --> 00:22:11,000 Speaker 1: just simply they don't have a choice. There is destiny 388 00:22:11,000 --> 00:22:14,000 Speaker 1: and geography, so they will always be tied to the 389 00:22:14,040 --> 00:22:17,520 Speaker 1: United States. But they will begin to pivot away from 390 00:22:17,560 --> 00:22:20,040 Speaker 1: the United States, and we have will start seeing that. 391 00:22:20,119 --> 00:22:24,480 Speaker 1: On trade, they just revamped and modernize their trade agreement 392 00:22:24,520 --> 00:22:27,880 Speaker 1: with the European Union. Um they will start looking towards China. 393 00:22:27,920 --> 00:22:31,560 Speaker 1: They'll start looking more broadly if we don't treat them well. 394 00:22:31,600 --> 00:22:34,240 Speaker 1: And they too, are going about to go through an 395 00:22:34,240 --> 00:22:36,640 Speaker 1: election in their country, and we could see a very 396 00:22:36,760 --> 00:22:41,040 Speaker 1: different slate of bureaucrats and others that will not be 397 00:22:41,160 --> 00:22:43,520 Speaker 1: quite as forgiving of the United States and some of 398 00:22:43,560 --> 00:22:47,440 Speaker 1: our eccentricities. Recently, in terms of rhetoric towards that nation. 399 00:22:47,480 --> 00:22:49,439 Speaker 1: So I think we're gonna see a real change in 400 00:22:49,600 --> 00:22:52,280 Speaker 1: US Mexico relations going forward. Shannon, thank you so much. 401 00:22:52,920 --> 00:22:56,879 Speaker 1: The council formulations of Rockefeller Senior Fellow really definitive on 402 00:22:56,960 --> 00:23:13,199 Speaker 1: Mexico and of course on Brazil. Yeah, it is a 403 00:23:13,359 --> 00:23:16,080 Speaker 1: joy as always to have Kenna Letta walked through the 404 00:23:16,080 --> 00:23:18,520 Speaker 1: door Pim Fox in Orlando and Tom Keene in New York. 405 00:23:19,200 --> 00:23:21,280 Speaker 1: And he has a wonderful new book out on the 406 00:23:21,400 --> 00:23:24,840 Speaker 1: advertising business and of course on media, which is as 407 00:23:24,920 --> 00:23:27,960 Speaker 1: we all know, exploding and blowing up in that and 408 00:23:28,000 --> 00:23:32,520 Speaker 1: it's a piercing read called Frenemies, the epic destruction disruption 409 00:23:33,160 --> 00:23:35,600 Speaker 1: of the ad business and everything else and the everything 410 00:23:35,600 --> 00:23:39,240 Speaker 1: else we'll talk about. But on this historic day, taking 411 00:23:39,320 --> 00:23:44,000 Speaker 1: us back to nineteen, Mrs Robinson was number one for 412 00:23:44,160 --> 00:23:48,000 Speaker 1: Simon and Garfunkele and every single family in America in 413 00:23:48,119 --> 00:23:53,680 Speaker 1: June of nine. In the spring of nine was reeling. 414 00:23:53,960 --> 00:23:55,960 Speaker 1: Is the only other way Ken that I can put it, 415 00:23:56,000 --> 00:23:58,719 Speaker 1: including the Pim Fox family and the time Keene family, 416 00:23:59,480 --> 00:24:02,200 Speaker 1: from the events of the moment you were living them 417 00:24:02,280 --> 00:24:05,760 Speaker 1: in real time as a young buck working for one 418 00:24:05,920 --> 00:24:09,040 Speaker 1: Robert Fitzgerald Kennedy, weren't you. You were not in Los 419 00:24:09,080 --> 00:24:11,359 Speaker 1: Angeles on the state, you know. I was at the 420 00:24:11,400 --> 00:24:15,639 Speaker 1: old Shelburne Hotel and working for Bobby Kennedy and helping 421 00:24:16,000 --> 00:24:19,879 Speaker 1: working with others to help him be victorious the New 422 00:24:19,960 --> 00:24:22,920 Speaker 1: York state primary in a couple of weeks after California. 423 00:24:23,320 --> 00:24:26,679 Speaker 1: We had a meeting that night with his natural national organizer, 424 00:24:27,119 --> 00:24:31,040 Speaker 1: Jack English and some others, and they're probably seven or 425 00:24:31,080 --> 00:24:33,840 Speaker 1: eight people in the room, and we actually were worried 426 00:24:34,560 --> 00:24:37,000 Speaker 1: because despite the bump he was getting from the victory 427 00:24:37,000 --> 00:24:40,160 Speaker 1: in California, were worried that he was being sandwiched between 428 00:24:40,640 --> 00:24:42,800 Speaker 1: Jeane McCarthy on the left of him in New York 429 00:24:42,920 --> 00:24:46,399 Speaker 1: and hug Humphrey on the right of him, and with 430 00:24:46,400 --> 00:24:49,840 Speaker 1: with regular Democrats, and we worried that maybe Bobby Kennedy 431 00:24:49,840 --> 00:24:52,560 Speaker 1: couldn't win in New York. And but we were going 432 00:24:52,600 --> 00:24:54,800 Speaker 1: to organize like hell over the next two weeks. And 433 00:24:54,840 --> 00:24:57,840 Speaker 1: we went to bed probably at one o'clock, and then 434 00:24:57,920 --> 00:25:00,359 Speaker 1: we were awakened at two or three in the morning 435 00:25:00,760 --> 00:25:05,359 Speaker 1: with the news. I take great issue with the way 436 00:25:05,640 --> 00:25:09,080 Speaker 1: Robert F. Kennedy is treated in the movies and in 437 00:25:09,160 --> 00:25:13,560 Speaker 1: the television today to the portrayals of Robert F. Kennedy. 438 00:25:13,720 --> 00:25:17,720 Speaker 1: Capture the Robert F. Kennedy that you knew. Well, I 439 00:25:17,720 --> 00:25:19,760 Speaker 1: didn't really know him that well. I was, I was 440 00:25:19,800 --> 00:25:22,960 Speaker 1: in my twenties and and um, I mean I spent 441 00:25:23,720 --> 00:25:25,639 Speaker 1: a little time with him, but very little time. I 442 00:25:25,680 --> 00:25:27,760 Speaker 1: think if I walked down the street, you wouldn't recognize me. 443 00:25:27,840 --> 00:25:30,720 Speaker 1: But okay, but you know you were within the zeitgey stomach. 444 00:25:30,760 --> 00:25:32,920 Speaker 1: Come on, yeah, no, I was. I gave up a 445 00:25:33,000 --> 00:25:35,040 Speaker 1: job to go to work for him, so I I 446 00:25:35,119 --> 00:25:37,679 Speaker 1: believed in him, and I some of it is captured. 447 00:25:37,720 --> 00:25:43,639 Speaker 1: I mean Tim Tim m Um and no, no Tim Russey, 448 00:25:43,760 --> 00:25:47,280 Speaker 1: not not Tim Russet. But um, what's his name? Chris 449 00:25:47,760 --> 00:25:52,600 Speaker 1: Matthews wrote a book, celebratory book about Robert. Uh. There've 450 00:25:52,640 --> 00:25:55,640 Speaker 1: been other books, I mean the best probably his author, 451 00:25:55,800 --> 00:25:59,760 Speaker 1: Lessenger's biography, Robert Kennedy. Uh. Does he get the full 452 00:26:00,000 --> 00:26:02,720 Speaker 1: at it? I don't know. I mean it seems to 453 00:26:02,760 --> 00:26:05,920 Speaker 1: me he's an iconic figure today and in that sense 454 00:26:05,960 --> 00:26:07,840 Speaker 1: does get the credit and the show he deserves to be. 455 00:26:08,160 --> 00:26:13,800 Speaker 1: What was St. Patrick's Cathedral like? It was actually amazing, 456 00:26:13,840 --> 00:26:16,320 Speaker 1: it was it was mobbed, It was very, very hot, 457 00:26:16,400 --> 00:26:20,600 Speaker 1: and my job that day was to rotate every fifteen 458 00:26:20,600 --> 00:26:24,760 Speaker 1: minutes the people who stood around the casket of Bobby Kennedy. 459 00:26:24,920 --> 00:26:28,200 Speaker 1: And I'll never forget it um, because it was so 460 00:26:28,240 --> 00:26:34,560 Speaker 1: stultifyingly hot. And and Prince Bradsley well Um, who was 461 00:26:34,720 --> 00:26:39,679 Speaker 1: married to Jacqueline and Ass's sister, he came and he 462 00:26:39,720 --> 00:26:43,960 Speaker 1: stood at the casket and a beautiful light blue shirt 463 00:26:44,040 --> 00:26:49,000 Speaker 1: and suit and hair immacate lee comb and within fifteen 464 00:26:49,000 --> 00:26:52,560 Speaker 1: minutes he had dissolved into sweat. And then we all 465 00:26:52,720 --> 00:26:55,600 Speaker 1: left the church. Is a very moving Teddy Kennedy gave 466 00:26:55,840 --> 00:26:58,320 Speaker 1: a wonderful speech, and we got on the train and 467 00:26:58,359 --> 00:27:01,800 Speaker 1: went to Washington. And as you sped by people on 468 00:27:01,880 --> 00:27:05,800 Speaker 1: the Amtrak train sitting there, people would just lined up, 469 00:27:05,840 --> 00:27:08,280 Speaker 1: thousands of people all the way down to Washington on 470 00:27:08,400 --> 00:27:11,639 Speaker 1: the on the train beside the train tracks. It's a 471 00:27:11,720 --> 00:27:17,280 Speaker 1: moving death. Kennell LETTA strangely, I remember that day because 472 00:27:17,359 --> 00:27:19,680 Speaker 1: my mother and father took me as a young seven 473 00:27:19,760 --> 00:27:24,080 Speaker 1: year old to stay in front of St. Patrick's Cathedral 474 00:27:24,760 --> 00:27:28,840 Speaker 1: on that Saturday, and uh, I remember hearing through the 475 00:27:28,880 --> 00:27:32,760 Speaker 1: doors Andy Williams seeing the battle him of the Republic, 476 00:27:33,880 --> 00:27:36,399 Speaker 1: and uh, I'm wondering if you could just describe what 477 00:27:36,560 --> 00:27:40,879 Speaker 1: that spring was like because Martin Luther King had just 478 00:27:40,960 --> 00:27:47,000 Speaker 1: been assassinated in April, Bobby Kennedy had only decided to run. 479 00:27:47,040 --> 00:27:52,080 Speaker 1: I believe it was in March, and this, uh, the 480 00:27:52,119 --> 00:27:54,720 Speaker 1: assassination of Bobby Kennedy at the Ambassador Hotel in Los 481 00:27:54,720 --> 00:27:58,840 Speaker 1: Angeles was coming in the very you know, late evening 482 00:27:58,880 --> 00:28:03,280 Speaker 1: early morning of June June five. What was it like 483 00:28:03,359 --> 00:28:06,399 Speaker 1: that spring? Well, you know, the thing you have to 484 00:28:06,480 --> 00:28:11,440 Speaker 1: overlay over all of this is the Vietnam War and 485 00:28:11,440 --> 00:28:15,080 Speaker 1: and the anger among the populace, not just that Martin 486 00:28:15,119 --> 00:28:18,840 Speaker 1: Luther King being assassinated and then of course Robert Kennedy 487 00:28:18,840 --> 00:28:22,080 Speaker 1: being assassinated, but this feeling that the country was being 488 00:28:22,080 --> 00:28:26,200 Speaker 1: assassinated by this war where eventually over fifty thou Americans 489 00:28:26,240 --> 00:28:30,720 Speaker 1: lost their lives uh in the needless war, and people 490 00:28:30,760 --> 00:28:34,159 Speaker 1: were protesting, and people are angry, so angry at President 491 00:28:34,240 --> 00:28:36,879 Speaker 1: Lyndon Johnson that he was he was compelled to step 492 00:28:36,920 --> 00:28:39,440 Speaker 1: down and say I will not run for re election, 493 00:28:39,880 --> 00:28:44,440 Speaker 1: so angry that they allowed Richard Nixon uh to win 494 00:28:45,040 --> 00:28:48,480 Speaker 1: election over you. Bert Humphrey. Uh, they were angry with you. 495 00:28:48,520 --> 00:28:51,160 Speaker 1: But Humphrey for supporting Lyndon Johnson. So it was it 496 00:28:51,240 --> 00:28:55,840 Speaker 1: was a country just split apart, much as it is today. 497 00:28:56,000 --> 00:28:58,960 Speaker 1: Uh over you know, people who like Trump and people 498 00:28:58,960 --> 00:29:02,600 Speaker 1: who don't. UM. So it was it was a it 499 00:29:02,640 --> 00:29:06,040 Speaker 1: was an uncomfortable time and then caused civil rights um 500 00:29:06,200 --> 00:29:09,480 Speaker 1: and and after Martin Luther King's death, it was people were, 501 00:29:10,040 --> 00:29:13,120 Speaker 1: you know, protesting and angry. And then of course Robert 502 00:29:13,200 --> 00:29:16,440 Speaker 1: Kennedy did this miraculous thing in Indiana where he stood 503 00:29:16,480 --> 00:29:21,360 Speaker 1: up before a largely black audience and talked movingly about 504 00:29:21,400 --> 00:29:25,280 Speaker 1: Martin Luther King and his death and how the way 505 00:29:25,280 --> 00:29:30,719 Speaker 1: to celebrate his life is not to destroy property and protests, 506 00:29:30,720 --> 00:29:34,520 Speaker 1: but to join the political and political struggle to change America. 507 00:29:35,680 --> 00:29:38,040 Speaker 1: Kennel let her. You grew up in Coney Island. You've 508 00:29:38,040 --> 00:29:42,760 Speaker 1: described yourself as a semi juvenile delinquent whose fastball, I 509 00:29:42,800 --> 00:29:46,760 Speaker 1: believe is what got you into State University of Oswego. Uh. 510 00:29:46,880 --> 00:29:49,320 Speaker 1: Do you miscovering politics? We're gonna talk about your book, 511 00:29:49,320 --> 00:29:52,959 Speaker 1: But do you miscovering politics? No? I I don't. I 512 00:29:53,000 --> 00:29:54,800 Speaker 1: love doing it. I mean I have a graduate degree 513 00:29:54,800 --> 00:29:57,360 Speaker 1: in political science and I thought that would be my life, 514 00:29:57,760 --> 00:30:03,280 Speaker 1: you know, in government. Um, State part maybe foreign diplomat. Um. 515 00:30:03,360 --> 00:30:06,000 Speaker 1: And then you know, your life takes these twists, and 516 00:30:06,040 --> 00:30:09,880 Speaker 1: suddenly I'm writing about the media and I love doing that. 517 00:30:10,320 --> 00:30:11,959 Speaker 1: We're gonna come back and talk. There's a lot of 518 00:30:12,120 --> 00:30:14,680 Speaker 1: there's some empty offices at the State Department right now. 519 00:30:15,320 --> 00:30:18,120 Speaker 1: We had to guess yesterday, Canner said, Mr Prompeo is 520 00:30:18,160 --> 00:30:20,120 Speaker 1: so concerned he had to bring a third of the 521 00:30:20,200 --> 00:30:22,760 Speaker 1: CIA over just to get through the coming weeks. It 522 00:30:22,800 --> 00:30:25,440 Speaker 1: was so I would never get past Donald Trump. I don't. 523 00:30:25,480 --> 00:30:27,680 Speaker 1: I'm just trying to think of you taking a meeting 524 00:30:27,720 --> 00:30:29,959 Speaker 1: with the President the United States. No, I've I've had 525 00:30:30,000 --> 00:30:33,120 Speaker 1: my meeting Trump when he was here. Yeah, well you 526 00:30:33,160 --> 00:30:35,880 Speaker 1: know very quickly here. What was it like meeting with 527 00:30:36,040 --> 00:30:39,480 Speaker 1: citizen Trump? Well, citizen Trump back in the in the 528 00:30:39,600 --> 00:30:42,800 Speaker 1: seventies and eighties. Um, I remember writing a profile of 529 00:30:42,960 --> 00:30:46,720 Speaker 1: Roy Kone was one of his hero his mentor, and 530 00:30:46,720 --> 00:30:50,960 Speaker 1: and who is probably the single most disgusting him being 531 00:30:51,000 --> 00:30:54,560 Speaker 1: I've ever met and and Donald Trump kept saying to me, 532 00:30:54,600 --> 00:30:56,440 Speaker 1: he's my match. Everything I learned from him, and what 533 00:30:56,480 --> 00:31:01,440 Speaker 1: did he learn from roycon attack? Never apology, gizs sue 534 00:31:01,640 --> 00:31:04,400 Speaker 1: the masters don't pay you a bill, fim Fox in Orlando. 535 00:31:04,440 --> 00:31:06,480 Speaker 1: I'm Tom Kennan, New York and with this Kennel Letta 536 00:31:06,920 --> 00:31:08,720 Speaker 1: the new must treat I will have to read it 537 00:31:08,800 --> 00:31:12,240 Speaker 1: cover to cover very selfishly because it's about the media 538 00:31:12,280 --> 00:31:15,200 Speaker 1: business and about the ad business. Friend of mees Front 539 00:31:15,240 --> 00:31:17,480 Speaker 1: of Me is the epic consruption of the ad business. 540 00:31:17,600 --> 00:31:20,600 Speaker 1: And Ken, I hit your world in your book three 541 00:31:20,680 --> 00:31:22,880 Speaker 1: days ago when I had a bit part in the 542 00:31:22,880 --> 00:31:26,880 Speaker 1: background on Billions on Showtime and the response from the 543 00:31:26,960 --> 00:31:29,720 Speaker 1: family and you know people was was stunning. I mean, 544 00:31:29,960 --> 00:31:34,200 Speaker 1: all the rules are broken by Netflix, by Showtime, by HBO. 545 00:31:34,800 --> 00:31:37,200 Speaker 1: Is that the beginning of the trend? And just simply 546 00:31:37,280 --> 00:31:39,040 Speaker 1: Kenna Letta with the Front of Me is out there. 547 00:31:39,240 --> 00:31:41,880 Speaker 1: Where are we in five years? Well, that's a really 548 00:31:41,920 --> 00:31:45,200 Speaker 1: good question. And if I were arrogant enough to try 549 00:31:45,200 --> 00:31:47,520 Speaker 1: and answer, predict where we'd be in finn You wrote 550 00:31:47,560 --> 00:31:49,200 Speaker 1: the book and you don't know. I don't know, and 551 00:31:49,280 --> 00:31:52,200 Speaker 1: know as anyone I interviewed, and I interviewed over four people. 552 00:31:52,640 --> 00:31:55,800 Speaker 1: The truth is it's changing so fast and people are 553 00:31:55,800 --> 00:31:58,240 Speaker 1: throwing stuff up against the wall to see what sticks. 554 00:31:58,640 --> 00:32:02,080 Speaker 1: That there's a bet that the ads, which are deemed 555 00:32:02,120 --> 00:32:05,320 Speaker 1: to be interrupted and annoying, particularly on your cell phone. 556 00:32:05,880 --> 00:32:07,840 Speaker 1: Um that what you have to do is don't do 557 00:32:07,880 --> 00:32:10,800 Speaker 1: an AD, but do a service. So you offer someone something. 558 00:32:11,400 --> 00:32:13,680 Speaker 1: Can we know you're walking via Barney's. You know, we 559 00:32:13,720 --> 00:32:15,920 Speaker 1: know you bought a sport jacket two weeks ago. If 560 00:32:15,960 --> 00:32:18,840 Speaker 1: you walk two blocks to the Barney's now, we'll give 561 00:32:18,880 --> 00:32:22,600 Speaker 1: you twenty off on your next sport jacket. And you say, 562 00:32:22,640 --> 00:32:25,040 Speaker 1: is that an AD or is that an offer they're 563 00:32:25,040 --> 00:32:27,360 Speaker 1: offering me? And it may be attractive. On the other hand, 564 00:32:27,600 --> 00:32:29,600 Speaker 1: you may say, how the hell they know so much 565 00:32:29,640 --> 00:32:32,440 Speaker 1: about me. The art theme of all the people you 566 00:32:32,520 --> 00:32:35,200 Speaker 1: talked to in your book, including Sir Martin Soil and 567 00:32:35,360 --> 00:32:39,160 Speaker 1: others in the ad business, is this bat and wonderment 568 00:32:39,360 --> 00:32:43,719 Speaker 1: of what young kids will do. Old people watch old media. 569 00:32:44,000 --> 00:32:46,840 Speaker 1: It's off a cliff with the young people. What will 570 00:32:46,880 --> 00:32:49,720 Speaker 1: the young people do when they're older? Well, we know, 571 00:32:49,960 --> 00:32:51,560 Speaker 1: we don't know what they'll do with Oh, we know 572 00:32:51,600 --> 00:32:53,440 Speaker 1: what they're doing now. And one of the things they're 573 00:32:53,440 --> 00:32:57,200 Speaker 1: doing now is that Americans, many of them young and 574 00:32:57,280 --> 00:33:01,120 Speaker 1: technologically proficient, use ad block to block ads on their 575 00:33:01,160 --> 00:33:04,240 Speaker 1: cell phones. We also know that people who have PVRs, 576 00:33:04,480 --> 00:33:09,479 Speaker 1: according to Nielsen, of them who record a program skip 577 00:33:09,600 --> 00:33:12,560 Speaker 1: the ads. That's and they know, we know they watch 578 00:33:13,000 --> 00:33:18,400 Speaker 1: things like Roku and Netflix and HBO and shown don't 579 00:33:18,440 --> 00:33:22,200 Speaker 1: have ads that don't have ads so and and YouTube 580 00:33:22,360 --> 00:33:25,280 Speaker 1: that often doesn't have that. So so they're growing up 581 00:33:25,520 --> 00:33:29,920 Speaker 1: younger people in a world where advertising becomes less important 582 00:33:29,920 --> 00:33:33,840 Speaker 1: and in fact is perceived not as a subsidy for media, 583 00:33:33,920 --> 00:33:37,760 Speaker 1: which it really is, but as an annoyance. Can I 584 00:33:37,960 --> 00:33:41,320 Speaker 1: let us? In the book you speak about really a 585 00:33:41,320 --> 00:33:45,280 Speaker 1: lot of different conflicting emotions that exist, and that is 586 00:33:45,320 --> 00:33:47,640 Speaker 1: one of the things that advertising tries to do, which 587 00:33:47,680 --> 00:33:51,800 Speaker 1: is to tug at people's emotions and generate emotions. Um, 588 00:33:51,960 --> 00:33:55,040 Speaker 1: what what are emotions? What feelings did you come out 589 00:33:55,080 --> 00:33:58,640 Speaker 1: of after writing the book? Well, I mean I came 590 00:33:58,680 --> 00:34:01,160 Speaker 1: out as as I look close sleeve at the ads. 591 00:34:01,240 --> 00:34:05,200 Speaker 1: So many ads, including the celebrated ads super Bowl ads, 592 00:34:05,320 --> 00:34:08,279 Speaker 1: or the Coca Cola little Kids standing on a hill, 593 00:34:08,360 --> 00:34:11,520 Speaker 1: which which was the end scene of of Madman, the 594 00:34:11,520 --> 00:34:15,480 Speaker 1: show Madman, I felt, I felt, I feel that emotionally 595 00:34:15,480 --> 00:34:19,120 Speaker 1: manipulative and they annoy me. Um. On the other hand, 596 00:34:19,120 --> 00:34:21,320 Speaker 1: there are brilliant ads that you go back to the 597 00:34:21,400 --> 00:34:26,480 Speaker 1: Volkswagen ad that Bill Bernback created or leave these Rybred ads. 598 00:34:26,920 --> 00:34:30,640 Speaker 1: They were brilliant ads. So there are brilliant people who 599 00:34:30,680 --> 00:34:33,480 Speaker 1: do some brilliant ads. And there are people, however, who 600 00:34:33,560 --> 00:34:38,200 Speaker 1: do who try to emotionally manipulate you. And for me, 601 00:34:38,280 --> 00:34:40,120 Speaker 1: I don't know whether I'm typical of the public, but 602 00:34:40,160 --> 00:34:45,120 Speaker 1: it bothers me a lot. Are are brilliant people capable 603 00:34:45,280 --> 00:34:50,319 Speaker 1: of running these huge advertising slash media companies today since 604 00:34:50,360 --> 00:34:53,719 Speaker 1: they have so many divisions with so many pieces, Well, 605 00:34:53,760 --> 00:34:55,920 Speaker 1: it depends on what they're brilliant at. I mean, you 606 00:34:56,000 --> 00:34:59,000 Speaker 1: take Martin Sorrel, who was who in my last chapter 607 00:34:59,040 --> 00:35:01,040 Speaker 1: of the book, I said, Mr sorl you're gonna be 608 00:35:01,080 --> 00:35:04,399 Speaker 1: seventy three. When do you think you might step down? 609 00:35:04,480 --> 00:35:06,480 Speaker 1: He said, they'll have to shoot me to get him out. 610 00:35:06,680 --> 00:35:08,839 Speaker 1: Get me out, And in fact they did shoot him, 611 00:35:08,880 --> 00:35:10,960 Speaker 1: and a couple months ago he was in the news. Today. 612 00:35:11,000 --> 00:35:13,919 Speaker 1: I should point out where his old company, w PP 613 00:35:14,080 --> 00:35:16,080 Speaker 1: may go after him for setting up a new company 614 00:35:16,239 --> 00:35:19,040 Speaker 1: because he's got some form of noncompete. But you know, 615 00:35:19,080 --> 00:35:21,960 Speaker 1: Martin Sorrel is a brilliant guy who created the largest 616 00:35:22,520 --> 00:35:25,680 Speaker 1: advertising holding company in the world WPP. On the other hand, 617 00:35:25,680 --> 00:35:28,840 Speaker 1: it's a company that owns four hundred other companies. He 618 00:35:28,920 --> 00:35:32,480 Speaker 1: had no CEO, so he had basically, you know, hundreds 619 00:35:32,480 --> 00:35:35,920 Speaker 1: of people basically reporting to That's too much even for 620 00:35:36,000 --> 00:35:39,440 Speaker 1: someone who as talented as he is. The nexus of 621 00:35:39,560 --> 00:35:42,680 Speaker 1: Keno Letta is a nexus of your your present book 622 00:35:42,719 --> 00:35:46,919 Speaker 1: Freenemies with Googled, which I think you sold a few 623 00:35:46,960 --> 00:35:50,120 Speaker 1: copies of. I mean it became a required read. Google 624 00:35:50,160 --> 00:35:53,160 Speaker 1: has searched forward in Google and Facebook and others are 625 00:35:53,200 --> 00:35:57,200 Speaker 1: capturing the vast majority of the marginal revenue growth and 626 00:35:57,320 --> 00:36:00,480 Speaker 1: profit within digital in digital of it? How how does 627 00:36:00,520 --> 00:36:06,000 Speaker 1: the industry break that ownership of Google and Facebook digital excellence. 628 00:36:06,320 --> 00:36:08,800 Speaker 1: One of the things that betting on is that Amazon, 629 00:36:09,360 --> 00:36:14,040 Speaker 1: which appears to be entering aggressively the advertising business, will 630 00:36:14,120 --> 00:36:17,200 Speaker 1: become a competitor to Glue and Facebook, and therefore giving 631 00:36:17,239 --> 00:36:20,880 Speaker 1: them a little leverage over Facebook. Jeff Bezos sophron of 632 00:36:21,000 --> 00:36:25,280 Speaker 1: me of everybody but the president, I mean the president 633 00:36:25,280 --> 00:36:29,680 Speaker 1: thinks of him as an enemy number he they are, 634 00:36:29,719 --> 00:36:31,319 Speaker 1: I mean they're all front of me is I mean, 635 00:36:31,360 --> 00:36:33,759 Speaker 1: everyone is getting to everyone else's business. One of the 636 00:36:33,800 --> 00:36:36,200 Speaker 1: reasons I came up with that title is that if 637 00:36:36,440 --> 00:36:39,600 Speaker 1: you're an ad agency today and you advertise, they on 638 00:36:39,640 --> 00:36:42,440 Speaker 1: the new York Times or on Bloomberg. Well, Bloomberg and 639 00:36:42,480 --> 00:36:44,520 Speaker 1: the New York Times are in the advertising business too. 640 00:36:44,719 --> 00:36:48,279 Speaker 1: You're creating ads for clients and going and bypassing the agency, 641 00:36:48,360 --> 00:36:50,760 Speaker 1: by the way, so a pr agencies, so a clients 642 00:36:50,760 --> 00:36:52,400 Speaker 1: who say I'm going to do it in the house. 643 00:36:52,719 --> 00:36:54,440 Speaker 1: And then the biggest front of me, of course, as 644 00:36:54,440 --> 00:36:58,520 Speaker 1: I said before, is the public. So everyone is surrounded 645 00:36:58,520 --> 00:37:02,279 Speaker 1: by Jeff Bezo if he gets into advertising, is going 646 00:37:02,320 --> 00:37:07,279 Speaker 1: to go directly to to clients bypassing the agencies and 647 00:37:07,320 --> 00:37:11,240 Speaker 1: by the way, competing against Facebook and Google. Do subscriptions 648 00:37:11,280 --> 00:37:15,000 Speaker 1: replace advertising? No? And the reason they don't. The one 649 00:37:15,040 --> 00:37:18,360 Speaker 1: thing that Hillary Clinton and and Donald Trump agreed on 650 00:37:18,480 --> 00:37:21,760 Speaker 1: the two thousand sixteen campaign is that the American middle 651 00:37:21,760 --> 00:37:24,680 Speaker 1: class and the working class, the majority of Americans, their 652 00:37:24,719 --> 00:37:26,719 Speaker 1: income has been frozen for the last ten years. They 653 00:37:26,760 --> 00:37:30,640 Speaker 1: can't afford more subscriptions. The average subscriber in this country 654 00:37:30,640 --> 00:37:36,120 Speaker 1: pays about subscriptions and that doesn't coude include electricity and telephone. 655 00:37:36,640 --> 00:37:39,759 Speaker 1: They can't afford it. Maybe we can afford more subscriptions, 656 00:37:39,800 --> 00:37:45,880 Speaker 1: but they can't. Advertising is makes things free. Of Facebook's 657 00:37:45,920 --> 00:37:50,239 Speaker 1: revenues come from advertising, almost Google's does you're gonna you 658 00:37:50,280 --> 00:37:53,239 Speaker 1: think Facebook can get away with charging people. I don't think. So. 659 00:37:54,560 --> 00:37:59,640 Speaker 1: You started the book with a speech, really you You 660 00:37:59,680 --> 00:38:02,840 Speaker 1: talked about a speech that the former head of Media 661 00:38:02,920 --> 00:38:07,040 Speaker 1: com John Mandel, gave to a group of marketers. Why 662 00:38:07,040 --> 00:38:09,880 Speaker 1: did Why did you start there? I started there because 663 00:38:09,960 --> 00:38:12,760 Speaker 1: for for several reasons. One is, what he was doing 664 00:38:13,040 --> 00:38:16,920 Speaker 1: is basically laying out a speech of why clients shouldn't 665 00:38:16,960 --> 00:38:21,359 Speaker 1: trust advertising agencies because they had secret agendas to make 666 00:38:21,400 --> 00:38:25,880 Speaker 1: money at the client's expense, and that level of mistrust 667 00:38:25,960 --> 00:38:30,080 Speaker 1: permeates the advertising marketing world, and I thought that was 668 00:38:30,120 --> 00:38:33,160 Speaker 1: a way to crystallize that which which lays the groundwork 669 00:38:33,280 --> 00:38:37,520 Speaker 1: for other chapters in the book where that mistrust plays 670 00:38:37,520 --> 00:38:39,520 Speaker 1: it large ale. The other reason is one of my 671 00:38:39,600 --> 00:38:41,879 Speaker 1: major characters in the book is felled by the name 672 00:38:41,920 --> 00:38:45,360 Speaker 1: of Michael Casson, who is the ultimate powerbroker in that world. 673 00:38:45,360 --> 00:38:48,640 Speaker 1: Not well known outside, but in that world is charming 674 00:38:49,360 --> 00:38:54,680 Speaker 1: guy who represents everybody, whispers in everyone's ear. Because of speech, 675 00:38:54,719 --> 00:38:57,239 Speaker 1: like Jonathan Mandel, a lot of agencies said we had 676 00:38:57,320 --> 00:38:59,840 Speaker 1: to review not agencies, A lot of clients that we 677 00:38:59,840 --> 00:39:02,920 Speaker 1: have to review our agencies and maybe change our agencies 678 00:39:03,040 --> 00:39:06,279 Speaker 1: who they hire to do that. Michael cass, I mean 679 00:39:06,560 --> 00:39:09,360 Speaker 1: with within. This is as we started this conversation is 680 00:39:09,400 --> 00:39:12,319 Speaker 1: where are we going to be in five years? Let's 681 00:39:12,320 --> 00:39:14,319 Speaker 1: bring it even closer. Where are we going to be 682 00:39:14,360 --> 00:39:16,440 Speaker 1: the end of the year. What are you trying to 683 00:39:16,520 --> 00:39:21,280 Speaker 1: observe in advertising slash media that gives you the next 684 00:39:21,360 --> 00:39:24,400 Speaker 1: marginal piece of information is that the Disney merger, the 685 00:39:25,080 --> 00:39:28,680 Speaker 1: Disney Fox battle with Comcast. No, I think. I think 686 00:39:28,719 --> 00:39:31,359 Speaker 1: the thing to watch for is what does government do? Um? 687 00:39:31,960 --> 00:39:36,080 Speaker 1: I think will government say we are concerned about privacy, 688 00:39:36,120 --> 00:39:38,959 Speaker 1: We're gonna maybe we should copy what the European Union 689 00:39:39,000 --> 00:39:42,719 Speaker 1: has done in well, Michael and Extio says today Facebook's 690 00:39:42,719 --> 00:39:47,239 Speaker 1: playing with fire with this Chinese data issue. They certainly are, 691 00:39:47,400 --> 00:39:49,719 Speaker 1: and and that's part of the So one question is 692 00:39:49,760 --> 00:39:51,920 Speaker 1: will they do something about privacy and the a the 693 00:39:51,920 --> 00:39:56,719 Speaker 1: amount of data that companies like Facebook and Google can collect. Secondly, 694 00:39:56,800 --> 00:39:59,520 Speaker 1: will they say this monopoly issue here? I mean here 695 00:39:59,520 --> 00:40:01,200 Speaker 1: they are going after a T and t on the 696 00:40:01,239 --> 00:40:05,040 Speaker 1: monopoly issue. They shouldn't be allowed to buy Time Warner, well, 697 00:40:05,080 --> 00:40:09,040 Speaker 1: it should? Should Facebook be allowed to purchase a company 698 00:40:09,120 --> 00:40:11,920 Speaker 1: like Instagram that that basically the potential fete to the 699 00:40:12,520 --> 00:40:14,279 Speaker 1: kind of let out with front of me is I 700 00:40:14,320 --> 00:40:16,520 Speaker 1: will read it cover to cover the epic disruption of 701 00:40:16,560 --> 00:40:18,960 Speaker 1: the ad business and uh, kind of a lot of 702 00:40:19,040 --> 00:40:22,920 Speaker 1: Thank you so much today, your comments on RFK as 703 00:40:22,960 --> 00:40:27,560 Speaker 1: well on fifty years on from an assassination in Los Angeles, 704 00:40:27,600 --> 00:40:38,080 Speaker 1: and thanks for listening to the Bloomberg Surveillance podcast. Subscribe 705 00:40:38,200 --> 00:40:43,000 Speaker 1: and listen to interviews on Apple Podcasts, SoundCloud, or whichever 706 00:40:43,200 --> 00:40:47,240 Speaker 1: podcast platform you prefer. I'm on Twitter at Tom Keane 707 00:40:47,680 --> 00:40:51,359 Speaker 1: before the podcast. You can always catch us worldwide. I'm 708 00:40:51,400 --> 00:40:52,280 Speaker 1: Bloomberg Radio