1 00:00:00,120 --> 00:00:02,920 Speaker 1: Brought you by Bank of America, Mary Lynch. Investing in 2 00:00:03,000 --> 00:00:07,840 Speaker 1: local communities, economies and a sustainable future. That's a power 3 00:00:08,080 --> 00:00:12,360 Speaker 1: of global connections. Mary Lynch, Pierce Fenner and Smith Incorporated 4 00:00:12,760 --> 00:00:27,400 Speaker 1: Member s I p C. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:27,840 --> 00:00:31,520 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:31,560 --> 00:00:36,600 Speaker 1: insight from the best in economics, finance, investment and international relations. 7 00:00:37,000 --> 00:00:41,600 Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com and 8 00:00:41,680 --> 00:00:49,080 Speaker 1: of course on the Bloomberg. This is a joy. David 9 00:00:49,120 --> 00:00:52,920 Speaker 1: Gura and Tom Keene in our radio studios. I'm Finsbury Square, 10 00:00:53,040 --> 00:00:55,040 Speaker 1: north of the city. We're sort of on the edge 11 00:00:55,040 --> 00:00:57,560 Speaker 1: of the city and tomorrow we're gonna go take a 12 00:00:57,600 --> 00:01:00,480 Speaker 1: tour of our new office. We'll put on the hard hats, boots, 13 00:01:01,640 --> 00:01:05,400 Speaker 1: look at those screwts addresses allowed. Yeah, it's very st 14 00:01:05,520 --> 00:01:09,200 Speaker 1: it's like a whole strict thing about like taking a 15 00:01:09,280 --> 00:01:11,640 Speaker 1: tour of it. But it's really coming together. We hope 16 00:01:11,640 --> 00:01:15,240 Speaker 1: within the year to be the largest stone building in London. Well, 17 00:01:15,280 --> 00:01:19,319 Speaker 1: I don't tell Parliament, you know it's gonna be good. 18 00:01:19,360 --> 00:01:21,720 Speaker 1: Near Mansion House in the heart of the city, near 19 00:01:21,760 --> 00:01:23,640 Speaker 1: the look for Twitter phos. Why don't you bring in 20 00:01:23,640 --> 00:01:26,080 Speaker 1: our good guests. Who's dark in the door of mansion house? 21 00:01:26,120 --> 00:01:28,360 Speaker 1: Any number? Very good? Mr Marvin barth here, a head 22 00:01:28,360 --> 00:01:30,560 Speaker 1: of European f ex Strategy Barclays, joins this here in 23 00:01:30,600 --> 00:01:33,520 Speaker 1: our studios in London. As Tom mentioned, and Marvin, let 24 00:01:33,560 --> 00:01:34,800 Speaker 1: me ask you just first of all, we're seeing a 25 00:01:34,800 --> 00:01:37,360 Speaker 1: lot of anxiety play out here in the currency markets. 26 00:01:37,520 --> 00:01:39,120 Speaker 1: Why is this the venue for it? Why why are 27 00:01:39,120 --> 00:01:41,479 Speaker 1: we seeing so much anxiety and currencies right now? Well, 28 00:01:41,480 --> 00:01:44,000 Speaker 1: I think it's one of the UH markets that touches 29 00:01:44,040 --> 00:01:47,080 Speaker 1: every other market, is the key point. In fact, generally 30 00:01:47,120 --> 00:01:50,280 Speaker 1: the way we look at currencies is it is the 31 00:01:50,320 --> 00:01:53,200 Speaker 1: market that clears all other markets, trading goods and services, 32 00:01:53,200 --> 00:02:00,440 Speaker 1: trading financial services, whether it's UH equities, bonds, whichever. So 33 00:02:01,160 --> 00:02:04,440 Speaker 1: it's one of the first ones that reacts um to 34 00:02:04,840 --> 00:02:08,400 Speaker 1: economic news from the trade side. But also financial flows 35 00:02:08,440 --> 00:02:12,480 Speaker 1: clearly are the biggest driver UH and so that you 36 00:02:12,520 --> 00:02:15,840 Speaker 1: can have much more significant reactions there. And then the 37 00:02:15,840 --> 00:02:18,600 Speaker 1: final reason is is that frankly, it's the most liquid 38 00:02:18,639 --> 00:02:20,919 Speaker 1: market out there, so it's the easiest one for people 39 00:02:20,919 --> 00:02:23,639 Speaker 1: to express and hedge themselves. Tom has been playing a 40 00:02:23,760 --> 00:02:27,200 Speaker 1: lepidopter is stall week talking about butterflies. Since we got 41 00:02:27,200 --> 00:02:30,360 Speaker 1: here talking about emerging markets. Let me ask you how 42 00:02:30,320 --> 00:02:32,040 Speaker 1: what we're seeing in Turkey this morning with with the 43 00:02:32,080 --> 00:02:35,280 Speaker 1: Turkish lira we had the central bank they're intervening. What 44 00:02:35,400 --> 00:02:38,560 Speaker 1: has caused that dramatic shift in the lira over these 45 00:02:38,639 --> 00:02:42,280 Speaker 1: last few days. Well, it's a it's a continuation of 46 00:02:42,320 --> 00:02:48,040 Speaker 1: the political uncertainty uh there, and how the government is 47 00:02:48,080 --> 00:02:52,720 Speaker 1: going to look at the banking system and their um 48 00:02:53,280 --> 00:02:58,160 Speaker 1: dollar loans and deposits, by the way, they have both 49 00:02:58,600 --> 00:03:02,640 Speaker 1: um what onshore rents and start going to do with those, uh. 50 00:03:02,680 --> 00:03:06,120 Speaker 1: And the continued political uncertainty as we go into the 51 00:03:06,120 --> 00:03:09,520 Speaker 1: referendum which will probably take place uh in April. So 52 00:03:09,560 --> 00:03:12,480 Speaker 1: all of those things have been sort of percolating for 53 00:03:12,480 --> 00:03:14,840 Speaker 1: a while here, and this is just a further extension that, 54 00:03:14,960 --> 00:03:17,959 Speaker 1: particularly as we come into the central bank meeting later 55 00:03:18,040 --> 00:03:19,720 Speaker 1: this month. How does a strategist like you, how does 56 00:03:19,720 --> 00:03:22,600 Speaker 1: an investor incurrencies react to intervention like the kind we 57 00:03:22,639 --> 00:03:25,280 Speaker 1: saw today? Does it does it cheer you to see it? 58 00:03:25,320 --> 00:03:28,480 Speaker 1: Does it raise more concerns than it delays? Well, you know, 59 00:03:29,240 --> 00:03:33,399 Speaker 1: I have a unique experience and I used to work 60 00:03:33,440 --> 00:03:36,440 Speaker 1: in the Federal Reserve um in the form of exchange 61 00:03:36,480 --> 00:03:39,120 Speaker 1: the global market section. And so I used to see 62 00:03:39,360 --> 00:03:42,280 Speaker 1: intervention as it was happening. All the central banks would 63 00:03:42,320 --> 00:03:44,760 Speaker 1: report to each other. And so I remember back in 64 00:03:45,400 --> 00:03:49,520 Speaker 1: you know, the early two thousand's, watching Japan jump or 65 00:03:49,720 --> 00:03:53,240 Speaker 1: dump several billion dollars at a time into the market 66 00:03:53,480 --> 00:03:57,240 Speaker 1: and watch it just dissipate and evaporate like nothing. And 67 00:03:57,320 --> 00:04:00,160 Speaker 1: so one of the things I've come away with is 68 00:04:00,160 --> 00:04:04,160 Speaker 1: that foreign exchange intervention, unless it's accompanied by a real 69 00:04:04,240 --> 00:04:07,800 Speaker 1: shift in policy, just doesn't work, or you're at extremes. 70 00:04:08,160 --> 00:04:10,240 Speaker 1: And I don't think you can claim that either of 71 00:04:10,240 --> 00:04:12,160 Speaker 1: those in the case with Turkey right now. I mean 72 00:04:12,160 --> 00:04:14,440 Speaker 1: the headline on Turkey, folks, and this goes to the 73 00:04:14,480 --> 00:04:17,159 Speaker 1: cash spent. I'm going to use a working number that 74 00:04:17,400 --> 00:04:18,960 Speaker 1: I may be wrong on, but I think it was 75 00:04:19,000 --> 00:04:23,560 Speaker 1: six billion uh used by Mexico to support Paso. You're 76 00:04:23,560 --> 00:04:26,680 Speaker 1: a few days ago and the headline is there Turkeys 77 00:04:26,800 --> 00:04:34,039 Speaker 1: urdam sites operation to rapidly depreciate lira. What I that's 78 00:04:34,120 --> 00:04:37,560 Speaker 1: lost in translation for me, David Marvin, help me, what 79 00:04:37,560 --> 00:04:40,760 Speaker 1: what the hell does that headline mean? I think your 80 00:04:40,800 --> 00:04:45,719 Speaker 1: guesses is actually, I'm sure it's accurate. I don't I 81 00:04:45,760 --> 00:04:48,760 Speaker 1: don't you know, I don't mean to. I just you know, 82 00:04:48,800 --> 00:04:50,960 Speaker 1: you see the headlines come across the Bloomberg and you say, 83 00:04:51,000 --> 00:04:53,880 Speaker 1: what Turkish lee or a weaker right now three seventy seven. 84 00:04:54,680 --> 00:04:57,680 Speaker 1: But um, you know it's not blowing out to a 85 00:04:57,720 --> 00:05:02,479 Speaker 1: weaker Turkish lear right now. As you say there's unilateral 86 00:05:02,960 --> 00:05:07,320 Speaker 1: depreciation or management of a currency, I should say, and 87 00:05:07,360 --> 00:05:10,719 Speaker 1: the textbook says it just never never, never works. Who's 88 00:05:10,760 --> 00:05:13,719 Speaker 1: the elephant in the room for Turkey or Malaysia or 89 00:05:13,720 --> 00:05:15,560 Speaker 1: the others right now? Is it the I M F 90 00:05:15,680 --> 00:05:19,279 Speaker 1: Or is it the United States? Well? I think in 91 00:05:19,440 --> 00:05:22,560 Speaker 1: many of those cases, it's actually their own citizens, right um, 92 00:05:22,640 --> 00:05:25,240 Speaker 1: particularly in the case of Turkey, when you think about 93 00:05:25,360 --> 00:05:30,640 Speaker 1: how much um uh Turkish citizens typically keep uh in 94 00:05:30,720 --> 00:05:33,880 Speaker 1: dollar accounts. And you know, one of the interesting things 95 00:05:33,880 --> 00:05:37,640 Speaker 1: about Turkey in the sort of post crisis period relative 96 00:05:37,680 --> 00:05:41,320 Speaker 1: to the pre crisis period is you know, you remember 97 00:05:41,360 --> 00:05:45,320 Speaker 1: the old days when the Turkish lyricist went one direction umu, 98 00:05:45,839 --> 00:05:50,080 Speaker 1: when it even had a different currency code. Um. Those 99 00:05:50,560 --> 00:05:54,680 Speaker 1: in those days, when you had anything like this, the 100 00:05:54,760 --> 00:05:59,239 Speaker 1: locals would immediately shift all their lira into dollars today. 101 00:05:59,360 --> 00:06:02,760 Speaker 1: What you're seeing, or what you have seen in the 102 00:06:02,839 --> 00:06:05,760 Speaker 1: post crisis period is they've shown greater confidence in their 103 00:06:05,760 --> 00:06:09,920 Speaker 1: own policymakers and actually when the lira um dips down 104 00:06:10,000 --> 00:06:12,640 Speaker 1: to low levels like this, they've come back and bought. 105 00:06:13,640 --> 00:06:16,520 Speaker 1: But that is the real question right now, that's the 106 00:06:16,560 --> 00:06:22,400 Speaker 1: elephant in the room here, is in this incredible political uncertainty? 107 00:06:22,480 --> 00:06:24,920 Speaker 1: Is that going to continue to happen? Thank you so much. 108 00:06:25,520 --> 00:06:28,560 Speaker 1: Great to see it with Barclay's giving us perspective today 109 00:06:28,640 --> 00:06:42,919 Speaker 1: on foreign exchange, Let's talk to Paul mort and more 110 00:06:43,080 --> 00:06:45,000 Speaker 1: Lee now he's chief of commis bnp PA about joining 111 00:06:45,080 --> 00:06:47,040 Speaker 1: us at by phone at Paul Morn would lead great 112 00:06:47,080 --> 00:06:49,240 Speaker 1: to speak with you here this morning, joining us here, 113 00:06:49,360 --> 00:06:51,599 Speaker 1: Thanks very much for your time today. Let's pick up 114 00:06:51,640 --> 00:06:53,160 Speaker 1: from what we're talking about a few moments where we're 115 00:06:53,200 --> 00:06:56,200 Speaker 1: talking about trade. Boris Johnson, the Foreign Secretary of visiting 116 00:06:56,240 --> 00:06:59,240 Speaker 1: the US UH, some senators talking about the relationship between 117 00:06:59,240 --> 00:07:01,039 Speaker 1: the U S and the UK. Let's talk about US 118 00:07:01,080 --> 00:07:03,560 Speaker 1: trade policy first year. How big a weight is that 119 00:07:03,600 --> 00:07:08,480 Speaker 1: as you forecast out growth in the US going forward. Oh, 120 00:07:07,880 --> 00:07:11,320 Speaker 1: we don't really know what's going to happen with trade policy. 121 00:07:11,400 --> 00:07:14,760 Speaker 1: I think that's that there's a major uncertainty about whether 122 00:07:14,800 --> 00:07:18,440 Speaker 1: we will see very big moves or whether we'll see 123 00:07:18,440 --> 00:07:23,520 Speaker 1: a more piecemeal, piecemeal approach. I think what we probably 124 00:07:23,520 --> 00:07:27,200 Speaker 1: will see some really negotiation of some trade deal and 125 00:07:27,320 --> 00:07:31,440 Speaker 1: therefore probably not a big surgey in protection is m 126 00:07:31,800 --> 00:07:34,440 Speaker 1: but I think it's a worry and very probably it's 127 00:07:34,520 --> 00:07:39,400 Speaker 1: dampening investment in some parts of the world in emerging 128 00:07:39,440 --> 00:07:41,840 Speaker 1: markets who were thinking about are they going to have 129 00:07:42,000 --> 00:07:45,560 Speaker 1: problems exporting to the US in the future. And I 130 00:07:45,600 --> 00:07:48,880 Speaker 1: think it is an uncertainty that will weigh somewhat on business. 131 00:07:49,320 --> 00:07:53,400 Speaker 1: If we were to see major protectionist moves by the US, 132 00:07:53,480 --> 00:07:57,240 Speaker 1: then we'd have to revise down our US growth forecast, 133 00:07:57,640 --> 00:08:01,840 Speaker 1: and we'd have to revise up our inflation forecast in 134 00:08:01,880 --> 00:08:06,240 Speaker 1: the US because clearly, if we're sourcing it currently from 135 00:08:06,240 --> 00:08:09,600 Speaker 1: outside the US, and we source it, that's because it's cheaper, 136 00:08:10,200 --> 00:08:12,800 Speaker 1: and so if there is protectionism, inflation is going to 137 00:08:12,880 --> 00:08:15,160 Speaker 1: go up, and that will add to the risk that 138 00:08:15,240 --> 00:08:18,120 Speaker 1: the fens titans policy more than it's currently planning. Now, 139 00:08:18,120 --> 00:08:22,080 Speaker 1: what's your growth forecast right now? Well, you know, we 140 00:08:22,080 --> 00:08:24,240 Speaker 1: we think we think growth is going to be pretty 141 00:08:24,280 --> 00:08:27,720 Speaker 1: strong this year, we're going to be up around two 142 00:08:27,720 --> 00:08:29,800 Speaker 1: and a half two and a half market, and it 143 00:08:29,880 --> 00:08:34,120 Speaker 1: depends on how much we get a fiscal boost that 144 00:08:34,160 --> 00:08:39,440 Speaker 1: will more probably affect two thousand and eighteen. What we 145 00:08:39,480 --> 00:08:41,360 Speaker 1: are seeing at the moment, and we saw this this 146 00:08:41,400 --> 00:08:46,880 Speaker 1: morning with the National Federation of Independent Business Optimism Index, 147 00:08:46,960 --> 00:08:52,120 Speaker 1: which surged for the most We're seeing a huge surgery 148 00:08:52,120 --> 00:08:56,600 Speaker 1: and optimism in businesses and in consumers. What's not clear 149 00:08:56,760 --> 00:08:59,439 Speaker 1: is how much that's going to s spilled through to 150 00:08:59,600 --> 00:09:03,680 Speaker 1: spend hother in capex or in consumer spending. The consumer 151 00:09:03,720 --> 00:09:07,280 Speaker 1: credit numbers this morning we're pretty strong, So there seems 152 00:09:07,280 --> 00:09:10,440 Speaker 1: to be some evidence, and so I think there's definitely 153 00:09:10,480 --> 00:09:14,280 Speaker 1: a possibility that we may be surprised on the upside 154 00:09:14,280 --> 00:09:17,120 Speaker 1: by US growth, particularly in the first half of the year. 155 00:09:17,240 --> 00:09:20,600 Speaker 1: Tam Keene and David David Palm momerately with US chief 156 00:09:20,600 --> 00:09:22,800 Speaker 1: economist at BNP at pair about what we're talking about 157 00:09:22,800 --> 00:09:26,600 Speaker 1: trade economic growth in the US. You were mentioning emerging markets, 158 00:09:26,600 --> 00:09:28,280 Speaker 1: and I wonder which are the ones that you see 159 00:09:28,320 --> 00:09:31,240 Speaker 1: most likely to sort of feel pain going forward here. 160 00:09:32,640 --> 00:09:34,800 Speaker 1: I just feel what to feel fling from trade or 161 00:09:34,840 --> 00:09:38,439 Speaker 1: just yes, from from trade in particular from in particular, 162 00:09:38,600 --> 00:09:42,480 Speaker 1: you're gont worry about China and therefore Southeast Asia. I 163 00:09:42,480 --> 00:09:46,480 Speaker 1: mean it's you know, basically, commodity exporters should be fine, 164 00:09:46,600 --> 00:09:50,360 Speaker 1: right because they're complementary to US production. It's people who 165 00:09:50,440 --> 00:09:55,719 Speaker 1: were producing competing with US style production that need to 166 00:09:55,760 --> 00:09:58,760 Speaker 1: be worried. And I think particularly those who got big 167 00:09:58,800 --> 00:10:01,840 Speaker 1: trade surpass, like China. And I think that's where the 168 00:10:01,880 --> 00:10:04,760 Speaker 1: concern is. Because so much of the US empathy is 169 00:10:04,760 --> 00:10:07,640 Speaker 1: with China. It's got to be a focus, and therefore 170 00:10:08,000 --> 00:10:10,920 Speaker 1: all the economies that supply China in the regional linked 171 00:10:10,920 --> 00:10:14,200 Speaker 1: to China have got reason to be concerned where we're going. 172 00:10:14,840 --> 00:10:18,560 Speaker 1: I think when when you look at what this administration 173 00:10:18,600 --> 00:10:21,320 Speaker 1: to pursue, it's been a pretty strong strong dollar policy 174 00:10:21,360 --> 00:10:23,600 Speaker 1: here over the last eight years. Do we have indications 175 00:10:23,640 --> 00:10:26,400 Speaker 1: here that a president Donald Trump is going to pursue 176 00:10:26,400 --> 00:10:29,920 Speaker 1: the same strong dollar policy. No one. I'm not convinced 177 00:10:29,920 --> 00:10:32,360 Speaker 1: he will, because to some extent, the stronger the dollar, 178 00:10:32,920 --> 00:10:36,040 Speaker 1: the more it's going to work against these um the 179 00:10:36,200 --> 00:10:39,520 Speaker 1: impetus to boost manufacturing in the US. And so I 180 00:10:39,600 --> 00:10:41,439 Speaker 1: think that I think that is a concern. I mean, 181 00:10:41,480 --> 00:10:43,960 Speaker 1: that might be one of the things. Why we've seen 182 00:10:44,000 --> 00:10:49,720 Speaker 1: Southern Federal Reserve officials talking about moving the ball because 183 00:10:50,240 --> 00:10:53,200 Speaker 1: the exchange rate seems much more sensitive to short term 184 00:10:53,240 --> 00:10:57,000 Speaker 1: interest rates than to long term rates. So tightening of 185 00:10:57,080 --> 00:11:01,520 Speaker 1: monetary policy switches a little away from raising spot rates 186 00:11:01,600 --> 00:11:04,280 Speaker 1: but redging the FED funtons and towards running off the 187 00:11:04,320 --> 00:11:07,000 Speaker 1: balance sheet. That could allow the Fed to tighten but 188 00:11:07,200 --> 00:11:12,480 Speaker 1: not damage the exchange rate and therefore manufacturing. You Oh, 189 00:11:12,520 --> 00:11:14,719 Speaker 1: go ahead, please, They didn't mean to interrupt. Excuse me, No, 190 00:11:15,120 --> 00:11:17,000 Speaker 1: I was going to say, you know that. I mean 191 00:11:17,040 --> 00:11:18,920 Speaker 1: I think there are a number of other things but 192 00:11:19,400 --> 00:11:24,160 Speaker 1: could push the exchange rate higher. You know, the cash 193 00:11:24,200 --> 00:11:31,480 Speaker 1: based um cash flow based corporate tax change could could 194 00:11:31,559 --> 00:11:36,840 Speaker 1: push the dollar higher. We could see some repatriation by 195 00:11:37,080 --> 00:11:40,199 Speaker 1: corporates to the US that comes about push the dollar higher. 196 00:11:40,480 --> 00:11:43,920 Speaker 1: So I think too strong dollar is a threat to 197 00:11:44,000 --> 00:11:48,440 Speaker 1: President Trum's ambitions to boost manufacturing. Definitely. You have a 198 00:11:48,480 --> 00:11:52,480 Speaker 1: beautiful research headline which captures the emotion of so much 199 00:11:52,520 --> 00:11:57,000 Speaker 1: of our listeners. Body yields burning down the house. There's 200 00:11:57,040 --> 00:12:03,160 Speaker 1: an innate fear price down yield up not good for me? 201 00:12:03,800 --> 00:12:06,760 Speaker 1: Are we going to burn down the house? I don't 202 00:12:06,800 --> 00:12:08,640 Speaker 1: think we're going to burn down the house. But you know, 203 00:12:08,760 --> 00:12:11,480 Speaker 1: we looked back at two thousand and thirteen when we 204 00:12:11,520 --> 00:12:14,959 Speaker 1: had to taper tantrum and long bondul by other hundred 205 00:12:15,040 --> 00:12:19,760 Speaker 1: basis points. It definitely slows the housing market very, very sharply, 206 00:12:20,280 --> 00:12:24,960 Speaker 1: and we've seen not not far off the same backup 207 00:12:25,040 --> 00:12:27,600 Speaker 1: in bonduels, And the question is that going to hurt 208 00:12:27,640 --> 00:12:30,280 Speaker 1: the housing market this time now? I think there are 209 00:12:30,360 --> 00:12:33,240 Speaker 1: quite a lot of differences now between where we are 210 00:12:33,280 --> 00:12:36,160 Speaker 1: and where we were in two thousands and thirteen. The 211 00:12:36,240 --> 00:12:40,240 Speaker 1: unemployment rates three almost three percentage points lower for a start, 212 00:12:41,160 --> 00:12:43,720 Speaker 1: but I think we will see something of a setback. 213 00:12:43,800 --> 00:12:47,160 Speaker 1: The lags back then. We're about six months, and I 214 00:12:47,200 --> 00:12:50,480 Speaker 1: think we will see a slightly slower paced, probably more 215 00:12:50,520 --> 00:12:54,080 Speaker 1: of the existing sales than new home sales. But I 216 00:12:54,120 --> 00:12:56,439 Speaker 1: don't think it's a massive threat to the economy. Might 217 00:12:56,480 --> 00:13:00,160 Speaker 1: not not point one maybe point two off growth as 218 00:13:00,160 --> 00:13:04,000 Speaker 1: bond you go higher, but the consumer is not using 219 00:13:04,040 --> 00:13:07,800 Speaker 1: mortgage finance in the same way as a decade ago 220 00:13:07,920 --> 00:13:11,800 Speaker 1: to the fuel consumption, for example, and so I think 221 00:13:11,840 --> 00:13:13,920 Speaker 1: the economy is going to be pretty resilient for the 222 00:13:14,000 --> 00:13:16,959 Speaker 1: higher bond you and the higher bond deals. The really 223 00:13:17,120 --> 00:13:20,840 Speaker 1: a reflection of good news. Were expecting good news on 224 00:13:20,880 --> 00:13:23,840 Speaker 1: the economy. What is back in thirteen it just like 225 00:13:23,960 --> 00:13:26,200 Speaker 1: looked like the Fed was going to tighten without the 226 00:13:26,240 --> 00:13:28,760 Speaker 1: good news coming. But this time the economy should be 227 00:13:28,840 --> 00:13:31,760 Speaker 1: less sensitive. David, this is fascinating. I mean, you know, 228 00:13:31,760 --> 00:13:34,240 Speaker 1: mortgage Jack, will you withdraw? Was a phrase of the 229 00:13:34,240 --> 00:13:36,440 Speaker 1: ear in the moment. Shout at the young heart seas 230 00:13:36,480 --> 00:13:39,559 Speaker 1: at Goldman Sex was great work back then. But David, 231 00:13:39,600 --> 00:13:41,480 Speaker 1: I just think this is a huge deal where it's 232 00:13:41,520 --> 00:13:45,880 Speaker 1: a new world of rising rates. We just don't know, 233 00:13:46,160 --> 00:13:48,960 Speaker 1: a new world of rising rates and and a big 234 00:13:48,960 --> 00:13:52,199 Speaker 1: opportunity here for potential conflict. Imagine Palm Winimer Lee. If 235 00:13:52,200 --> 00:13:54,160 Speaker 1: you have the Fed going forward raising rates at the 236 00:13:54,200 --> 00:13:57,920 Speaker 1: same time as you have the Congress, expect the Congress 237 00:13:57,920 --> 00:14:00,280 Speaker 1: here to pass a big fiscal stimulus and some tax reform. 238 00:14:00,360 --> 00:14:02,079 Speaker 1: How thorny is this going to be? How difficult is 239 00:14:02,120 --> 00:14:04,719 Speaker 1: it going to be to navigate the economic landscape in 240 00:14:04,760 --> 00:14:07,560 Speaker 1: Washington as you have these two institutions what a mile 241 00:14:07,559 --> 00:14:10,240 Speaker 1: and a half apart from each other in Washington doing 242 00:14:10,280 --> 00:14:13,880 Speaker 1: things they're sort of detrimental to each other. Why I 243 00:14:13,920 --> 00:14:15,920 Speaker 1: think it's going to be very tricky. He's going to 244 00:14:16,000 --> 00:14:18,800 Speaker 1: be very tricky in particular for the FED because I think, 245 00:14:19,240 --> 00:14:22,080 Speaker 1: you know, the administration will say, look, you know, a 246 00:14:22,160 --> 00:14:26,520 Speaker 1: lot of stimulus is not just the manse stimulus, supply stimulus. 247 00:14:26,560 --> 00:14:30,520 Speaker 1: And if you guys raise raised too quickly and stop 248 00:14:31,000 --> 00:14:35,200 Speaker 1: this process, you're going to squeeze out supply. And therefore, 249 00:14:35,240 --> 00:14:37,520 Speaker 1: I think the administration is going to be putting quite 250 00:14:37,520 --> 00:14:40,360 Speaker 1: a lot of pressure on the FED not to overdo 251 00:14:40,400 --> 00:14:43,600 Speaker 1: its tightening, but at the same time, the faise. I 252 00:14:43,640 --> 00:14:46,920 Speaker 1: think that the key thing for the FED therefore will 253 00:14:46,960 --> 00:14:54,160 Speaker 1: be how inflation and costs, including wages evolved. Because strong demand, 254 00:14:54,920 --> 00:14:58,760 Speaker 1: I think, because of the arguments from the Trump administrational supply, 255 00:14:59,480 --> 00:15:02,400 Speaker 1: it makes quite difficult for the THREAD to snuff out demand. 256 00:15:02,960 --> 00:15:06,480 Speaker 1: But if they see inflation move higher, that's a bit easier. 257 00:15:06,520 --> 00:15:09,960 Speaker 1: And so I think the freds reaction functions changing and 258 00:15:10,040 --> 00:15:13,720 Speaker 1: they're going to be more sensitive to inflation signals than 259 00:15:13,800 --> 00:15:16,480 Speaker 1: than growth going forward, which is a kind of reverse 260 00:15:16,680 --> 00:15:18,880 Speaker 1: when we were in the past year. I think that 261 00:15:18,920 --> 00:15:20,760 Speaker 1: we get minutes from the e CB this week on 262 00:15:20,760 --> 00:15:22,960 Speaker 1: on Thursday, from its last meeting, and I think when 263 00:15:23,000 --> 00:15:24,520 Speaker 1: when that happens I'm going to open it up and 264 00:15:24,520 --> 00:15:27,880 Speaker 1: do control f for fine and typing the word taper 265 00:15:27,920 --> 00:15:30,160 Speaker 1: to see if it appears. What do you are you 266 00:15:30,280 --> 00:15:32,840 Speaker 1: going to be looking that? What are you going to 267 00:15:32,880 --> 00:15:35,480 Speaker 1: be looking for those minutes far? I think you've come 268 00:15:35,560 --> 00:15:38,480 Speaker 1: up with a big zero that I think that he's 269 00:15:38,520 --> 00:15:44,280 Speaker 1: not tapering, it's sailing back. I think the really disagreement. Yeah, yeah, 270 00:15:44,480 --> 00:15:47,360 Speaker 1: I think there'd just be some There'll be some disagreement, clearly. 271 00:15:47,400 --> 00:15:51,080 Speaker 1: I think I think the Halts probably wanted to have 272 00:15:51,600 --> 00:15:57,240 Speaker 1: a shorter extension of the QWI, some of the Doves 273 00:15:57,280 --> 00:16:00,440 Speaker 1: wanted a longer extension, and basically we did up with 274 00:16:00,520 --> 00:16:04,040 Speaker 1: something of a compromise. I don't think they're very optimistic 275 00:16:04,120 --> 00:16:07,040 Speaker 1: on growth. I think they think growth is pretty fragile. 276 00:16:07,400 --> 00:16:10,520 Speaker 1: And I think they're underlying picture on core inflation. Although 277 00:16:10,600 --> 00:16:13,600 Speaker 1: headlines moving up, I don't think they have a big 278 00:16:13,640 --> 00:16:17,880 Speaker 1: face in terms of core inflation shifting. But I think 279 00:16:17,920 --> 00:16:20,240 Speaker 1: the message will continue to be to be dove it. 280 00:16:20,400 --> 00:16:23,840 Speaker 1: I mean, I think they did a great job in tapering, 281 00:16:24,320 --> 00:16:27,560 Speaker 1: and that they did taper, they did scale back, and 282 00:16:27,640 --> 00:16:30,520 Speaker 1: yet the market interpreted it as very dumbish, which is 283 00:16:30,560 --> 00:16:33,200 Speaker 1: a huge contract to what happened in two thousand and third, 284 00:16:34,240 --> 00:16:37,120 Speaker 1: if you remember so, I believe I think they handled 285 00:16:37,120 --> 00:16:39,280 Speaker 1: it pretty skillfully. I have to leave it there. Palm 286 00:16:39,360 --> 00:16:43,520 Speaker 1: order relief, thank you so much. With in New York 287 00:16:43,520 --> 00:16:46,920 Speaker 1: is just a great set of opinions, and as usual David, 288 00:16:46,960 --> 00:16:50,640 Speaker 1: it centers around the view of someone an economic growth 289 00:16:51,000 --> 00:16:53,160 Speaker 1: and we haven't had that dovetailing of the housing market 290 00:16:53,160 --> 00:16:56,160 Speaker 1: into into it before. Well the housing market there, but 291 00:16:56,200 --> 00:17:00,160 Speaker 1: just basic g d P. There's two versus. Those were 292 00:17:00,200 --> 00:17:02,920 Speaker 1: optimistic and of course that's what makes for the debate. 293 00:17:03,320 --> 00:17:14,439 Speaker 1: Absolutely brought you by Bank of America, Mary Lynch. Dedicated 294 00:17:14,760 --> 00:17:18,199 Speaker 1: to bringing our clients insights and solutions to meet the 295 00:17:18,280 --> 00:17:22,679 Speaker 1: challenges of a transforming world. That's the power of global connections, 296 00:17:23,080 --> 00:17:28,000 Speaker 1: Mary Lynch, Pierce fennerin Smith Incorporated, Member s I p C. 297 00:17:33,640 --> 00:17:35,640 Speaker 1: What been Charles Dumont Now he's the chairman in chief 298 00:17:35,640 --> 00:17:38,040 Speaker 1: economist at Lambard Street Research, joining us here in this 299 00:17:39,920 --> 00:17:43,720 Speaker 1: he wants join the spect of Enterprise phone line, Spectum 300 00:17:43,800 --> 00:17:47,560 Speaker 1: Enterprise Nationwide fiber based network and I T Infrastructure solutions. Charles, 301 00:17:47,560 --> 00:17:50,600 Speaker 1: Great to speak with you again. Yeah, nice to talk 302 00:17:50,640 --> 00:17:55,080 Speaker 1: to you, very good. Does your optimism persist here? We 303 00:17:55,240 --> 00:17:57,520 Speaker 1: we we. We heard the comments from Theresa a Prime 304 00:17:57,520 --> 00:18:02,000 Speaker 1: Minister over the weekend. Uh she feuding observations that the 305 00:18:02,000 --> 00:18:04,159 Speaker 1: Brexit process is mudeled. What is your sense of of 306 00:18:04,160 --> 00:18:06,800 Speaker 1: how it's going at this point? Well, I think it's 307 00:18:06,960 --> 00:18:09,240 Speaker 1: certainly muddeled, but it was bound to be muddeled. I mean, 308 00:18:09,640 --> 00:18:12,560 Speaker 1: no one mainly plans for Brexit. It was the civil 309 00:18:12,600 --> 00:18:17,800 Speaker 1: services completely side swiped by it, and and and now 310 00:18:17,840 --> 00:18:20,119 Speaker 1: they're having to sort of get themselves together now. The 311 00:18:20,160 --> 00:18:22,280 Speaker 1: other thing is that you can't really have a negotiation 312 00:18:22,359 --> 00:18:24,600 Speaker 1: until the other side is in place. And the other 313 00:18:24,600 --> 00:18:26,600 Speaker 1: side is not in place. I know the Commission is 314 00:18:27,000 --> 00:18:31,080 Speaker 1: supposedly sitting there in Brussels with the negotiators sitting around waiting, 315 00:18:31,119 --> 00:18:34,440 Speaker 1: but the decisions can't really get made until the French 316 00:18:34,480 --> 00:18:38,320 Speaker 1: elections happened and the German elections happened. So Mrs May 317 00:18:38,520 --> 00:18:41,159 Speaker 1: is not going to sort of show her hand in 318 00:18:41,200 --> 00:18:45,680 Speaker 1: any kind of detailed way or even specify what she's 319 00:18:45,680 --> 00:18:48,160 Speaker 1: aiming for until she can get a sense from them 320 00:18:48,160 --> 00:18:51,200 Speaker 1: of what's feasible. And what's feasible is going to depend 321 00:18:51,280 --> 00:18:55,160 Speaker 1: very much on how the sort of people in France 322 00:18:55,160 --> 00:18:58,840 Speaker 1: and Germany who were skeptical about free movement of labor 323 00:18:59,440 --> 00:19:03,280 Speaker 1: um do in these elections. So the whole thing is 324 00:19:03,800 --> 00:19:08,680 Speaker 1: a whole whole sort of nexus of uncertainty, and people 325 00:19:08,680 --> 00:19:09,919 Speaker 1: are just going to have to live with that for 326 00:19:09,960 --> 00:19:12,120 Speaker 1: several months. I think. I just want to like something 327 00:19:12,119 --> 00:19:13,879 Speaker 1: to your term that our colleague friends in Lockwood just 328 00:19:14,080 --> 00:19:16,960 Speaker 1: sent this here. Dollar Mexico foundly with fresh all time 329 00:19:17,000 --> 00:19:20,600 Speaker 1: low six to seven. Yeah, it was sudden and abrupt. 330 00:19:20,680 --> 00:19:22,800 Speaker 1: I mentioned that out of Karen Moscow's data check, and 331 00:19:22,840 --> 00:19:24,720 Speaker 1: we see that in the e M currencies. Let's rip 332 00:19:24,800 --> 00:19:27,600 Speaker 1: up the script. Charles Duma will usually talk G seven, 333 00:19:27,640 --> 00:19:31,080 Speaker 1: G five, G one with you. Do you have a 334 00:19:31,160 --> 00:19:36,480 Speaker 1: concern about erosion in currencies of emerging markets? Not really No, 335 00:19:36,760 --> 00:19:41,200 Speaker 1: I think that the emerging market currencies have well. I 336 00:19:41,240 --> 00:19:45,760 Speaker 1: mean too a year ago they got grossly oversold. A 337 00:19:45,760 --> 00:19:49,240 Speaker 1: lot of these economies are doing quite are doing quite well. Um. 338 00:19:49,840 --> 00:19:52,920 Speaker 1: The biggest issue for them clearly is what happens with 339 00:19:53,000 --> 00:19:56,360 Speaker 1: the Chinese. UM you on, because if that goes done 340 00:19:56,359 --> 00:19:59,320 Speaker 1: a long way, then of course that therese competitive pressure 341 00:19:59,320 --> 00:20:03,000 Speaker 1: and difficulties. Um. But we don't think that that is 342 00:20:03,000 --> 00:20:05,639 Speaker 1: going to happen. Um. Starting from where we are now 343 00:20:05,720 --> 00:20:07,320 Speaker 1: it is in the sort of a low six and 344 00:20:07,400 --> 00:20:10,919 Speaker 1: nineties for the for the Ran dollar, and so I 345 00:20:10,960 --> 00:20:14,080 Speaker 1: don't see any particular reason why the emerging markets should 346 00:20:14,119 --> 00:20:18,679 Speaker 1: fill themselves under particularly heavy pressure. That's going to change 347 00:20:19,119 --> 00:20:20,879 Speaker 1: according to which one you're looking at. I mean, the 348 00:20:20,920 --> 00:20:23,800 Speaker 1: main thing that emerging markets have in common is that 349 00:20:24,359 --> 00:20:27,359 Speaker 1: therefore than us. The other thing that's important is to 350 00:20:27,920 --> 00:20:33,040 Speaker 1: politics matter more than economics, or relatively more visibly economics 351 00:20:33,080 --> 00:20:35,639 Speaker 1: than than in developed markets. But of course, as we're 352 00:20:35,680 --> 00:20:40,600 Speaker 1: seeing nowadays, um, you've got rapidly increasing importance of politics 353 00:20:40,600 --> 00:20:44,439 Speaker 1: in the in Europe and in the United States. You 354 00:20:44,480 --> 00:20:47,159 Speaker 1: talk about the Chinese currency, and I wonder sort of 355 00:20:47,200 --> 00:20:49,639 Speaker 1: what your outlook is for it here in the year ahead. 356 00:20:49,640 --> 00:20:51,760 Speaker 1: You think it's not gonna perhaps weekend as much as 357 00:20:51,840 --> 00:20:54,879 Speaker 1: as as others would. What's your outlook for the the 358 00:20:55,080 --> 00:21:00,639 Speaker 1: after you went this year for the for the Chinese? Yes, yeah, well, 359 00:21:00,840 --> 00:21:02,880 Speaker 1: I think we're expecting it to go down a bit. 360 00:21:02,920 --> 00:21:05,480 Speaker 1: But starting from where we are now, it's gone quite 361 00:21:05,480 --> 00:21:08,480 Speaker 1: a long way. And you're looking at a country where 362 00:21:09,560 --> 00:21:12,159 Speaker 1: the you know, the ruling communist party is most of 363 00:21:12,200 --> 00:21:14,840 Speaker 1: all naturally inclined to try to control things and they've 364 00:21:15,080 --> 00:21:19,040 Speaker 1: particularly started to clamp down and try to control capital 365 00:21:19,080 --> 00:21:21,240 Speaker 1: movements on on a big scale as you probably know, 366 00:21:21,920 --> 00:21:26,120 Speaker 1: um and where, and they're going to want to preserve 367 00:21:27,000 --> 00:21:30,840 Speaker 1: because the the sort of confidence and general feeling of 368 00:21:31,480 --> 00:21:34,639 Speaker 1: good times at least through the Big Congress at the 369 00:21:34,760 --> 00:21:36,800 Speaker 1: end of this year, which is the halfway mark for 370 00:21:36,840 --> 00:21:40,800 Speaker 1: the current leadership in its fire in his tenure, his 371 00:21:40,920 --> 00:21:44,160 Speaker 1: tenure spelling power. The halfway mark is is this autumn 372 00:21:44,160 --> 00:21:46,880 Speaker 1: so so on the whole we think that the Chinese 373 00:21:48,119 --> 00:21:52,000 Speaker 1: currencies is going to go down, not up, but it's 374 00:21:52,040 --> 00:21:54,760 Speaker 1: not going to go down big time. Charles Duma, thank 375 00:21:54,800 --> 00:21:57,040 Speaker 1: you so much. Too short today with Lamber Street Research. 376 00:21:57,119 --> 00:21:59,120 Speaker 1: Much to talk. I will come back with Charles Duma. 377 00:21:59,720 --> 00:22:01,639 Speaker 1: Uh in the coming weeks on the Netherlands in the 378 00:22:01,680 --> 00:22:18,240 Speaker 1: French election as Uh well, I guess it is a 379 00:22:18,280 --> 00:22:23,920 Speaker 1: passing of technological history. Mersa Mayor Alex Yahoo. Brian Weezer 380 00:22:24,880 --> 00:22:27,480 Speaker 1: does detailed reports and usually in the back there's some 381 00:22:27,600 --> 00:22:31,560 Speaker 1: form of discounted cash flow model. Brian Weezer joins us 382 00:22:31,560 --> 00:22:36,080 Speaker 1: from Pivotal Research. Brian in an October note, you slotted 383 00:22:36,119 --> 00:22:39,080 Speaker 1: in one, two, three, four or five, six, seven, eight 384 00:22:39,160 --> 00:22:42,240 Speaker 1: nine lines with a couple of plug ins, and the 385 00:22:42,320 --> 00:22:45,520 Speaker 1: mother law plugins is what Verizon is gonna pay for Yahoo? 386 00:22:45,920 --> 00:22:48,919 Speaker 1: Is that the bombshell to come that Verizon is going 387 00:22:48,960 --> 00:22:52,480 Speaker 1: to say, no, this is the new price. I think 388 00:22:52,520 --> 00:22:55,679 Speaker 1: that's entirely plausible. I mean it's it's difficult to know 389 00:22:55,840 --> 00:22:59,280 Speaker 1: with any precision whatsoever. Um, we don't know how much 390 00:23:00,000 --> 00:23:04,920 Speaker 1: a goal flexibility they have. Um, you know, but the 391 00:23:05,160 --> 00:23:08,480 Speaker 1: thing from a Yahoo perspective and from a materiality perspective, 392 00:23:08,520 --> 00:23:11,280 Speaker 1: it doesn't really matter very much. I mean, a billion here, 393 00:23:11,320 --> 00:23:14,280 Speaker 1: a billion there. Of course, pretty soon we're talking real money. 394 00:23:14,320 --> 00:23:18,000 Speaker 1: But um, for the purposes of how one looks at 395 00:23:18,040 --> 00:23:21,920 Speaker 1: the stock still presently knows Yahoo. It's pretty irrelevant. Okay, 396 00:23:21,920 --> 00:23:24,320 Speaker 1: I'll go with that. And David, these numbers are important, David, 397 00:23:24,320 --> 00:23:27,399 Speaker 1: I want want to jump in here. Weezer has the 398 00:23:27,520 --> 00:23:31,160 Speaker 1: core business at three point eight billion, and the value 399 00:23:31,160 --> 00:23:34,560 Speaker 1: of Japan is in the vicinity of six point eight billion. 400 00:23:35,520 --> 00:23:37,919 Speaker 1: I mean that gives you an idea of the the 401 00:23:37,960 --> 00:23:42,560 Speaker 1: stub you the Ali Baba group is a ginormous so 402 00:23:42,760 --> 00:23:48,280 Speaker 1: what four seven? Yeah, by what happens to that company? 403 00:23:48,320 --> 00:23:51,520 Speaker 1: You have this spinoff largely charged with caring for those 404 00:23:51,520 --> 00:23:55,119 Speaker 1: shares of of Ali Baba and the Yahoo Japan holdings. 405 00:23:55,400 --> 00:23:56,919 Speaker 1: What's that company going to do? In other words, what 406 00:23:56,920 --> 00:23:58,800 Speaker 1: would a director on that board be charged with doing 407 00:23:58,800 --> 00:24:02,040 Speaker 1: here going forward? Good? Yeah, well, this is why it's 408 00:24:02,040 --> 00:24:05,200 Speaker 1: been almost more surprising that anyone's been surprised or that 409 00:24:05,240 --> 00:24:07,560 Speaker 1: there's been so much suppress about you know, the the 410 00:24:07,920 --> 00:24:13,600 Speaker 1: AK filet yesterday. The future entity is all about tax optimization, 411 00:24:13,960 --> 00:24:17,400 Speaker 1: and that's where the value is created. It's not about 412 00:24:17,440 --> 00:24:22,760 Speaker 1: operating anything. It's about UM being able to identify advisors 413 00:24:22,880 --> 00:24:27,880 Speaker 1: and assess a different UH advice that they might provide 414 00:24:27,880 --> 00:24:31,320 Speaker 1: in terms of different ways to structure the assets UM 415 00:24:31,720 --> 00:24:35,760 Speaker 1: and involves a lot of waiting around. I think that's 416 00:24:35,800 --> 00:24:40,159 Speaker 1: probably the best way to characterize it. UM anticipating you know, 417 00:24:40,200 --> 00:24:42,840 Speaker 1: all the research that one could do around what tax 418 00:24:42,880 --> 00:24:45,119 Speaker 1: policies will be I mean, which are obviously thrown up 419 00:24:45,119 --> 00:24:48,240 Speaker 1: in greater flux. Now UM is probably some of the 420 00:24:48,240 --> 00:24:52,680 Speaker 1: most important work that anyone can theoretically do. UM. It's 421 00:24:52,720 --> 00:24:56,320 Speaker 1: not it's it's not a company anymore. It's not operating business. 422 00:24:57,400 --> 00:24:59,480 Speaker 1: I wonder sort of what the verdict is going to 423 00:24:59,520 --> 00:25:01,680 Speaker 1: be here on Marissa Meyer. Remember hearing Mark Benny Off 424 00:25:01,680 --> 00:25:04,480 Speaker 1: of salesforce on Bloomberg Television, really praising her as an 425 00:25:04,520 --> 00:25:07,719 Speaker 1: executive and as a leader. I wonder what her future 426 00:25:07,800 --> 00:25:10,880 Speaker 1: looks like once she is extricated from this company, where 427 00:25:10,880 --> 00:25:13,680 Speaker 1: these companies, after this sale is complete, once the deal 428 00:25:13,800 --> 00:25:18,560 Speaker 1: is done, what happens to Marissa Meyer. That's a great question. Um, 429 00:25:18,640 --> 00:25:20,080 Speaker 1: you know, I mean, I think there's a lot of 430 00:25:20,080 --> 00:25:22,800 Speaker 1: people who try to be public company CEOs and it 431 00:25:22,960 --> 00:25:26,399 Speaker 1: doesn't always work out. And uh, um, here was a 432 00:25:26,440 --> 00:25:29,840 Speaker 1: situation where had someone elevated who wasn't particularly well prepared 433 00:25:29,880 --> 00:25:33,879 Speaker 1: to run a large company. Um and um, you know 434 00:25:33,960 --> 00:25:37,520 Speaker 1: that that that this person one will be very wealthy 435 00:25:37,640 --> 00:25:40,120 Speaker 1: and able to do a lot of different things with 436 00:25:40,520 --> 00:25:43,359 Speaker 1: you know, her own or possibly other people's money. But um, 437 00:25:43,359 --> 00:25:46,160 Speaker 1: it's hard to imagine, you know what, wall Street would 438 00:25:46,160 --> 00:25:52,119 Speaker 1: not be supportive, I would say, Um, it's hard to 439 00:25:52,160 --> 00:25:55,639 Speaker 1: imagine wall Street being supportive of her future public company. 440 00:25:56,400 --> 00:25:59,480 Speaker 1: Um role Um. I don't think that they might have 441 00:25:59,480 --> 00:26:03,520 Speaker 1: been support when this when she put into this world 442 00:26:03,520 --> 00:26:07,280 Speaker 1: because there's something of a star or placed around her. Um. 443 00:26:07,320 --> 00:26:09,280 Speaker 1: At the time, Um, and I don't know if you 444 00:26:09,280 --> 00:26:11,680 Speaker 1: remember my notes at the time, I was just baffled 445 00:26:11,680 --> 00:26:14,879 Speaker 1: that they put her in the job. You've got a 446 00:26:14,920 --> 00:26:19,320 Speaker 1: Star War two. Uh, Brian, Brian, this is outside your watch, 447 00:26:19,320 --> 00:26:21,240 Speaker 1: but I'm gonna try it anyways because I think it's 448 00:26:21,240 --> 00:26:25,439 Speaker 1: something of interest to our listeners. Bloomberg Intelligence and John Butler, 449 00:26:25,760 --> 00:26:30,240 Speaker 1: with their great work, have the eb dom margin the 450 00:26:30,359 --> 00:26:33,800 Speaker 1: profit folks down the income statement, but before net income, 451 00:26:34,480 --> 00:26:36,879 Speaker 1: it's fifty cents on the dollar for a T and 452 00:26:36,920 --> 00:26:41,080 Speaker 1: T wire excuse me, Verizon Wireless forty seven cents on 453 00:26:41,160 --> 00:26:43,320 Speaker 1: the dollar for a T and T. And the other 454 00:26:43,359 --> 00:26:46,640 Speaker 1: two trail are the cell phone bills that we pay 455 00:26:46,680 --> 00:26:50,960 Speaker 1: every month. Are they just basically organized theft of a 456 00:26:51,000 --> 00:26:54,600 Speaker 1: monopoly or do appoly or twoperly? I mean, those are 457 00:26:54,800 --> 00:27:00,040 Speaker 1: stunning margins that Bloomberg Intelligence is calculating. Well, I'll of 458 00:27:00,119 --> 00:27:03,080 Speaker 1: this out. You do need to be mindful of the 459 00:27:03,160 --> 00:27:08,200 Speaker 1: capital expenditures. Uh. For starters, um knowing what the VADA 460 00:27:08,320 --> 00:27:11,200 Speaker 1: of any given company is without knowing the CAPEX is, 461 00:27:11,680 --> 00:27:14,720 Speaker 1: it's not a useful number, um. And in the capex 462 00:27:14,760 --> 00:27:18,240 Speaker 1: intensive business. And this is true whether we're talking about 463 00:27:18,240 --> 00:27:19,680 Speaker 1: the you know, m v p d s or the 464 00:27:19,720 --> 00:27:24,000 Speaker 1: cable operators, or we're talking about wireless players infrastructure providers. 465 00:27:24,119 --> 00:27:26,480 Speaker 1: I mean how are we counting for the capital investment 466 00:27:26,520 --> 00:27:30,320 Speaker 1: in in towers and all starts of equipment, UM subsidies 467 00:27:30,320 --> 00:27:33,880 Speaker 1: that go into our UM handsets, etcetera. I don't cover 468 00:27:33,920 --> 00:27:37,040 Speaker 1: the telco space, so I don't kind of pine uts 469 00:27:37,080 --> 00:27:39,159 Speaker 1: to whether they're high or low relative to where they 470 00:27:39,160 --> 00:27:41,880 Speaker 1: should be. But um, but no, it's not a particularly 471 00:27:41,960 --> 00:27:45,800 Speaker 1: meaningful number by itself. Let's just ask you here, returning 472 00:27:45,840 --> 00:27:48,359 Speaker 1: to Yahoo, UM, just sort of who will be on 473 00:27:48,359 --> 00:27:50,800 Speaker 1: this board? I said, six members are leaving, none of 474 00:27:50,800 --> 00:27:54,239 Speaker 1: them that well known to me. Who's going to remain here? Uh? 475 00:27:54,280 --> 00:27:58,000 Speaker 1: And then also just a question of attention to that, Uh, 476 00:27:58,080 --> 00:28:00,320 Speaker 1: what's kind of due diligence? Is Verizon doing it this point? 477 00:28:00,320 --> 00:28:02,000 Speaker 1: We've had these two big breaches. Where do these two 478 00:28:02,000 --> 00:28:06,560 Speaker 1: big breaches? What is Verizon doing at this point? Yeah? Well, 479 00:28:06,560 --> 00:28:10,520 Speaker 1: I actually I'm not particularly familiar with the board members either. UM. 480 00:28:10,520 --> 00:28:12,479 Speaker 1: I mean we do have I believe the former CFO 481 00:28:12,720 --> 00:28:17,280 Speaker 1: of I sees there. But it really is optimally a 482 00:28:17,359 --> 00:28:21,679 Speaker 1: board of of of financial UH and tax professionals, because 483 00:28:21,880 --> 00:28:25,399 Speaker 1: ultimately that's the skill set, if you will, that's required 484 00:28:25,400 --> 00:28:28,920 Speaker 1: to assess UM the direction of the corporate entity. So 485 00:28:29,320 --> 00:28:33,280 Speaker 1: there's that UM, you know, to to rise in UM. 486 00:28:33,320 --> 00:28:35,480 Speaker 1: You know, actually interestingly I should I should note that 487 00:28:35,840 --> 00:28:37,560 Speaker 1: going back to your question on the BADA, I mean 488 00:28:38,480 --> 00:28:43,840 Speaker 1: there's concerns around topline growth in general for telto's because 489 00:28:44,080 --> 00:28:48,640 Speaker 1: their legacy businesses of wireline phones is declining. UM that 490 00:28:48,800 --> 00:28:52,840 Speaker 1: wireless services are not growing at a particularly to bus 491 00:28:52,880 --> 00:28:56,400 Speaker 1: to pace if at all. UM, And I think there's 492 00:28:56,400 --> 00:29:02,000 Speaker 1: been this view that that advertising can be a growth 493 00:29:02,080 --> 00:29:05,360 Speaker 1: driver given the data that exists and which isn't really 494 00:29:05,360 --> 00:29:07,840 Speaker 1: being monetized, so they degree that I think the terriers 495 00:29:07,840 --> 00:29:10,920 Speaker 1: think it can be can can make the advertising more valuable. Now, 496 00:29:11,040 --> 00:29:15,480 Speaker 1: to be clear, this is a very optimistic view, willfully optimistic. 497 00:29:15,520 --> 00:29:19,640 Speaker 1: One could even argue UM. Telcos around the world, from 498 00:29:19,680 --> 00:29:25,840 Speaker 1: sin Tell to Telenor to Orange UM have all adhered 499 00:29:25,880 --> 00:29:28,680 Speaker 1: to this strategy in one form or another, baby steps, 500 00:29:28,760 --> 00:29:33,040 Speaker 1: mostly veries and arguably making the biggest steps with the 501 00:29:33,080 --> 00:29:35,560 Speaker 1: push to buy first day well and technically the operating 502 00:29:35,560 --> 00:29:39,560 Speaker 1: business of Yahoo. UM. Now, will they be able to 503 00:29:39,600 --> 00:29:42,960 Speaker 1: negotiate some kind of price reduction? Probably how much hard 504 00:29:43,000 --> 00:29:46,080 Speaker 1: to say, UM, But ultimately you know, will will they 505 00:29:46,080 --> 00:29:48,560 Speaker 1: build a better business inside of a well than a 506 00:29:48,720 --> 00:29:50,760 Speaker 1: O L would have been on its own. I think 507 00:29:50,800 --> 00:29:54,160 Speaker 1: almost certainly it doesn't necessarily change the broader narrative or 508 00:29:54,240 --> 00:29:56,360 Speaker 1: necessarily reduce your phone bill. Okay, we have to believe 509 00:29:56,400 --> 00:29:58,560 Speaker 1: it their prime Wiser. Thank you for the update, particularly 510 00:29:58,600 --> 00:30:03,560 Speaker 1: there on who Mr Weezer is with Pivotal Research Group. 511 00:30:11,360 --> 00:30:15,760 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 512 00:30:15,800 --> 00:30:20,880 Speaker 1: listen to interviews on iTunes, SoundCloud, or whichever podcast platform 513 00:30:21,000 --> 00:30:24,560 Speaker 1: you prefer. I'm out on Twitter at Tom Keene. David 514 00:30:24,600 --> 00:30:28,280 Speaker 1: Gura is at David Gura. Before the podcast, you can 515 00:30:28,400 --> 00:30:44,640 Speaker 1: always catch us worldwide. 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