1 00:00:09,880 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,920 Speaker 1: Bloomberg dot com, and of course on the Bloomberg Tyler 5 00:00:28,000 --> 00:00:30,160 Speaker 1: Ricks dropping bout the studio to get us up to space. 6 00:00:30,200 --> 00:00:33,919 Speaker 1: The taker white title once again, net interest income, right, 7 00:00:34,000 --> 00:00:36,000 Speaker 1: I think the price action that you were talking about 8 00:00:36,040 --> 00:00:37,920 Speaker 1: down about one half of one percent sort of says 9 00:00:37,960 --> 00:00:41,159 Speaker 1: it all. This feels sort of exactly what we were expecting. 10 00:00:41,240 --> 00:00:43,160 Speaker 1: This is all in line with all of the other banks. 11 00:00:43,479 --> 00:00:46,199 Speaker 1: We knew that the net interest income was going to 12 00:00:46,320 --> 00:00:49,360 Speaker 1: miss slightly. Of course this did, but not by a ton. 13 00:00:49,760 --> 00:00:51,919 Speaker 1: I think the outlook will be for Bank of America 14 00:00:52,000 --> 00:00:54,880 Speaker 1: what they can forecast going forward now because we know 15 00:00:55,040 --> 00:00:57,520 Speaker 1: that margins and net interest income needs to come down 16 00:00:57,600 --> 00:00:59,760 Speaker 1: slightly for that full year. We've got a great top 17 00:01:00,160 --> 00:01:01,840 Speaker 1: blog on the bloombook term it or just sort of 18 00:01:01,880 --> 00:01:04,320 Speaker 1: breaking down the numbers and the commentary as these earnings 19 00:01:04,400 --> 00:01:07,080 Speaker 1: come through from Wall Street and won't take away just 20 00:01:07,360 --> 00:01:10,679 Speaker 1: the consumer business taking away revenue up, netting come up, 21 00:01:10,760 --> 00:01:14,480 Speaker 1: credit provision staple. It's just taking over nicely, isn't it. John. 22 00:01:14,560 --> 00:01:17,040 Speaker 1: This is my theme. I think this is a healthy consumer. 23 00:01:17,120 --> 00:01:19,080 Speaker 1: We heard this from City Group, we heard this from 24 00:01:19,160 --> 00:01:22,120 Speaker 1: JP Morgan. I spoke with the Wells Fargo CFO last night. 25 00:01:22,600 --> 00:01:25,160 Speaker 1: They're saying that they are still very very much betting 26 00:01:25,240 --> 00:01:27,800 Speaker 1: on the consumer. So despite the fact that loans are 27 00:01:27,800 --> 00:01:30,200 Speaker 1: growing a little bit slowly, you have some mortgages that 28 00:01:30,280 --> 00:01:32,959 Speaker 1: are coming in low low, You're having the credit card 29 00:01:33,040 --> 00:01:35,880 Speaker 1: business really BEI as standout performer both within the branded 30 00:01:35,959 --> 00:01:38,760 Speaker 1: cards of City Group in JP Morgan, I think the 31 00:01:38,840 --> 00:01:41,680 Speaker 1: consumer here is still a very very strong story and 32 00:01:41,840 --> 00:01:44,120 Speaker 1: something that the banks are betting on going forward. Well, 33 00:01:44,160 --> 00:01:47,040 Speaker 1: Bank of America pretty much unchanged now in the pre market. 34 00:01:47,120 --> 00:01:49,080 Speaker 1: We have the good fortune of having Chris Marangue in 35 00:01:49,120 --> 00:01:52,760 Speaker 1: the studio as well. CA Belly Funds Co Chief Investment Officer. Chris, 36 00:01:52,840 --> 00:01:57,640 Speaker 1: good morning to you your early take. Please, You've seen 37 00:01:57,640 --> 00:02:00,880 Speaker 1: a lot of commonalities between Bank America Bank in New 38 00:02:00,960 --> 00:02:03,800 Speaker 1: York and the banks yesterday. That is, um the impact 39 00:02:03,880 --> 00:02:07,800 Speaker 1: of a flat curve UH and then offset by cost 40 00:02:07,880 --> 00:02:12,800 Speaker 1: cuts UH, investment of technology and very large capital returns. 41 00:02:13,000 --> 00:02:15,800 Speaker 1: Big buy back from Bank of America slightly smaller one 42 00:02:15,840 --> 00:02:17,720 Speaker 1: from Bank and you or, but pretty impressive. Nonetheless, the 43 00:02:17,880 --> 00:02:20,720 Speaker 1: single line John that I saw when hearings came out, 44 00:02:21,360 --> 00:02:23,079 Speaker 1: it was about two thirds of the way down the 45 00:02:23,360 --> 00:02:27,880 Speaker 1: you know, the propaganda seven percent of shares in the 46 00:02:28,000 --> 00:02:31,320 Speaker 1: last twelve months. That's what we call intel, Like, that's 47 00:02:31,320 --> 00:02:34,600 Speaker 1: what Intel did. They invented we almost twenty or thirty 48 00:02:34,680 --> 00:02:38,600 Speaker 1: years ago. The use of cash by these banks speaks 49 00:02:38,639 --> 00:02:41,799 Speaker 1: of everything Ben Bernanky talked about in the heat of 50 00:02:41,840 --> 00:02:43,680 Speaker 1: early two thousand and eight. Well, they've had the big 51 00:02:43,720 --> 00:02:47,320 Speaker 1: green light from the record. Can we do a shout 52 00:02:47,360 --> 00:02:51,360 Speaker 1: out to Charles Peabody, I mean he called this absolutely 53 00:02:51,480 --> 00:02:53,280 Speaker 1: nailed this four years ago. So we've got to try 54 00:02:53,320 --> 00:02:56,280 Speaker 1: to understand where the news hit. Where is the news hit, Chris, 55 00:02:56,400 --> 00:02:58,880 Speaker 1: because sure then an interest income story is going to 56 00:02:58,960 --> 00:03:01,680 Speaker 1: be weighing down some of these banks as the Federal 57 00:03:01,720 --> 00:03:03,760 Speaker 1: Reserve cuts interest rates. That shouldn't be news for so 58 00:03:03,880 --> 00:03:06,679 Speaker 1: many people. The buying back plants shouldn't be news. I 59 00:03:06,720 --> 00:03:09,440 Speaker 1: think I think it's it's in the strength of the 60 00:03:09,480 --> 00:03:11,880 Speaker 1: consumer franchise, the consumer business. Um. You know, again, we're 61 00:03:11,880 --> 00:03:14,919 Speaker 1: seeing kind of mixed data on the economy. Industrial is 62 00:03:14,960 --> 00:03:17,320 Speaker 1: rolling over, but the consumer hanging in there of good 63 00:03:17,360 --> 00:03:20,639 Speaker 1: retail sales yesterday obviously, and the consumer has got to 64 00:03:20,680 --> 00:03:22,280 Speaker 1: put their spending somewhere, and they're putting it on the 65 00:03:22,320 --> 00:03:25,760 Speaker 1: credit card. Isn't that what's amazing about this particular regime 66 00:03:25,800 --> 00:03:28,320 Speaker 1: in the markets, that the data is still good, that 67 00:03:28,400 --> 00:03:31,320 Speaker 1: the earnings look okay, and the federal reserves about a 68 00:03:31,320 --> 00:03:33,679 Speaker 1: cut interest rates maybe not just once, maybe twice, maybe 69 00:03:33,720 --> 00:03:36,400 Speaker 1: even three times in the next twelve months. Chris, Yeah, 70 00:03:36,440 --> 00:03:37,880 Speaker 1: So it makes you wonder what the FETE is seeing. 71 00:03:37,960 --> 00:03:39,960 Speaker 1: And I guess the hope is that the FETE is 72 00:03:40,040 --> 00:03:42,320 Speaker 1: wrong if they're seeing, you know, some really dark clouds 73 00:03:42,360 --> 00:03:44,520 Speaker 1: on the horizon. Taylor, what else do you see here? 74 00:03:45,400 --> 00:03:47,720 Speaker 1: I'll highlight trading revenue just because we know that we're 75 00:03:47,760 --> 00:03:50,040 Speaker 1: looking at equity and fit. We do see that the 76 00:03:50,120 --> 00:03:53,880 Speaker 1: trading revenue was abroad match I guess across the board, 77 00:03:53,880 --> 00:03:56,560 Speaker 1: which is a good thing. Usually we've seen companies miss. 78 00:03:56,880 --> 00:03:59,840 Speaker 1: The fit came in better than expected two point one 79 00:04:00,080 --> 00:04:02,520 Speaker 1: versus two point oh eight billion dollars. So I like 80 00:04:02,640 --> 00:04:04,520 Speaker 1: FI because you did see a big bond move at 81 00:04:04,560 --> 00:04:06,600 Speaker 1: the end of the second quarter that helped them a 82 00:04:06,640 --> 00:04:09,040 Speaker 1: little bit despite the low ball in the acquity market. Chris, 83 00:04:09,120 --> 00:04:11,240 Speaker 1: you've been in Wall Street Observer for years. Deutsche Bank 84 00:04:11,280 --> 00:04:14,520 Speaker 1: going through massive triage right now, What is your view 85 00:04:14,680 --> 00:04:17,880 Speaker 1: of New York trading? As Taylor mentions Thick and the 86 00:04:17,960 --> 00:04:20,560 Speaker 1: rest of it. It's not that it's a dinosaur. I 87 00:04:20,640 --> 00:04:23,960 Speaker 1: know that's too inflammatory. But is there a future for 88 00:04:24,080 --> 00:04:28,480 Speaker 1: these big banks to lock up capital to affect trading 89 00:04:29,040 --> 00:04:32,320 Speaker 1: or does it drift away? Yeah? The outlook is not 90 00:04:32,440 --> 00:04:34,560 Speaker 1: good and I mean you've seen that again, um in 91 00:04:34,640 --> 00:04:36,720 Speaker 1: the earnings today for Bank of New York, which is 92 00:04:36,839 --> 00:04:39,520 Speaker 1: obviously a very large custody business. Um. You know, the 93 00:04:39,760 --> 00:04:42,800 Speaker 1: capital is going elsewhere. UM. You know, trading is a 94 00:04:42,880 --> 00:04:45,520 Speaker 1: much less profitable business for a lot of reasons. UM. 95 00:04:45,720 --> 00:04:49,120 Speaker 1: So you know, the bright spot has been certainly in 96 00:04:49,120 --> 00:04:53,600 Speaker 1: the consumer and um, and it's not been in the 97 00:04:53,680 --> 00:04:55,960 Speaker 1: New York trading. You own away from the too big 98 00:04:56,040 --> 00:04:58,400 Speaker 1: to fail banks. American Express is a large holding, but 99 00:04:58,440 --> 00:05:01,560 Speaker 1: you've got many other holdings that are removed. Is that 100 00:05:01,720 --> 00:05:04,120 Speaker 1: like a sidecar banking or do you look at it 101 00:05:04,160 --> 00:05:07,159 Speaker 1: almost as a separate industry from the banks. We're talking 102 00:05:07,160 --> 00:05:09,400 Speaker 1: about this week that the big banks have a habit 103 00:05:09,440 --> 00:05:12,800 Speaker 1: of blowing themselves up every decade or so. I don't 104 00:05:12,839 --> 00:05:15,000 Speaker 1: know that. So you know, you know, one of the 105 00:05:15,040 --> 00:05:16,760 Speaker 1: things that we're not talking about this morning, of course, 106 00:05:16,839 --> 00:05:19,760 Speaker 1: our credit our charge offs because they've been pretty good. 107 00:05:20,360 --> 00:05:22,080 Speaker 1: That's not gonna last forever. At some point that's going 108 00:05:22,120 --> 00:05:24,279 Speaker 1: to turn over, and these companies, these banks are going 109 00:05:24,320 --> 00:05:26,440 Speaker 1: to report losses. We try to stay away from those 110 00:05:26,480 --> 00:05:29,480 Speaker 1: by owning um, you know, fee based banks like the 111 00:05:29,520 --> 00:05:31,440 Speaker 1: trust banks for example. I've got to talk about the 112 00:05:31,480 --> 00:05:33,480 Speaker 1: technology sector with you as well, Chris, not just the 113 00:05:33,520 --> 00:05:36,640 Speaker 1: financials before we let you go. G seven finance ministers 114 00:05:37,080 --> 00:05:39,840 Speaker 1: meeting today to discuss the French proposal of a digital 115 00:05:39,960 --> 00:05:42,960 Speaker 1: tax in Washington, d C. More tech hearings. What are 116 00:05:42,960 --> 00:05:45,640 Speaker 1: your thoughts on what's going on just from a regulatory standford, 117 00:05:45,800 --> 00:05:48,200 Speaker 1: from the tax standpoint, Not to get too cosmic at 118 00:05:48,240 --> 00:05:50,040 Speaker 1: this hour of the morning before drinks, but you know, 119 00:05:50,400 --> 00:05:53,760 Speaker 1: I think the this is a governments around the world 120 00:05:53,800 --> 00:05:56,000 Speaker 1: trying to put the genie back in the bottle. They've 121 00:05:56,000 --> 00:05:58,719 Speaker 1: seen these tech companies disert to mediate a lot of companies, 122 00:05:59,000 --> 00:06:02,440 Speaker 1: costing a lot of job just youate local taxing authorities 123 00:06:02,640 --> 00:06:05,839 Speaker 1: and now DISERTI mediating potentially the core function of government. 124 00:06:05,839 --> 00:06:08,480 Speaker 1: Which is to issue and maintain a currency. Um. So 125 00:06:08,520 --> 00:06:10,599 Speaker 1: they probably gone a little bit far, and the governments 126 00:06:10,640 --> 00:06:13,680 Speaker 1: are pushing back along a lot of vectors antitrust, um, 127 00:06:13,920 --> 00:06:18,200 Speaker 1: privacy and obviously cryptome to these issues shape the kind 128 00:06:18,240 --> 00:06:20,840 Speaker 1: of companies, shape the kind of ideas that you have 129 00:06:21,000 --> 00:06:23,120 Speaker 1: on the companies that you want to own. Well, listen, 130 00:06:23,120 --> 00:06:25,599 Speaker 1: I think we look at regulatory risk across a lot 131 00:06:25,640 --> 00:06:27,760 Speaker 1: of different industries. Certainly in media it is the key 132 00:06:27,839 --> 00:06:29,720 Speaker 1: risk always will be the key risk, you know, owning 133 00:06:29,800 --> 00:06:32,120 Speaker 1: cable companies for example, and so that's that's probably true 134 00:06:32,160 --> 00:06:34,080 Speaker 1: for the for the tech companies as well, and that's 135 00:06:34,080 --> 00:06:37,960 Speaker 1: time we got left. Give us some ringuey gabelly media update. 136 00:06:38,120 --> 00:06:42,000 Speaker 1: You've been extraordinary in long term ownership of that, particularly 137 00:06:42,040 --> 00:06:46,360 Speaker 1: with the elevation of Comcast over the last decade as well. 138 00:06:46,680 --> 00:06:49,240 Speaker 1: Is the enthusiasm still there? It is. I guess what 139 00:06:49,400 --> 00:06:50,960 Speaker 1: the media world is changing, and the way to play 140 00:06:51,000 --> 00:06:54,159 Speaker 1: it is to own the broadband pipes, and that's Comcast 141 00:06:54,240 --> 00:06:56,720 Speaker 1: and Charter in the US, liberty Global outside the US. 142 00:06:57,120 --> 00:06:58,839 Speaker 1: And then you've got to be selective on the content. 143 00:06:58,920 --> 00:07:01,040 Speaker 1: You need the scale companies Disney, or you need the 144 00:07:01,120 --> 00:07:06,279 Speaker 1: niches like sports content the Braves MSG. Will the tech 145 00:07:06,360 --> 00:07:09,520 Speaker 1: companies go after those sports rights? Are they going to 146 00:07:09,680 --> 00:07:12,520 Speaker 1: rip those away from the traditional vendors? So they're gonna 147 00:07:13,360 --> 00:07:15,080 Speaker 1: I think they will bid for them. Whether they win 148 00:07:15,120 --> 00:07:17,000 Speaker 1: them or not is another question. I think the NFL 149 00:07:17,040 --> 00:07:21,320 Speaker 1: would like to maintain football on broadcast for the foreseeable feature. 150 00:07:21,440 --> 00:07:25,120 Speaker 1: Chris Rank, thank you so much, appreciated. Particularly thank you 151 00:07:25,160 --> 00:07:27,520 Speaker 1: to the Bank Analysis Taylor Riggs, thank you so much 152 00:07:28,320 --> 00:07:45,280 Speaker 1: as well to the Bank of America. With an erneys, 153 00:07:45,320 --> 00:07:47,480 Speaker 1: John Fair and I felt that we really should touch 154 00:07:48,240 --> 00:07:51,240 Speaker 1: and what is truly a changing day for the United 155 00:07:51,320 --> 00:07:53,640 Speaker 1: States of Europe. Maria today, it's knee deep in this. 156 00:07:54,280 --> 00:07:57,320 Speaker 1: She is in Shantilly. Is that how you pronounce it? 157 00:07:57,640 --> 00:08:04,200 Speaker 1: Maria Chantilly, France Shante And this is where whipped cream 158 00:08:04,320 --> 00:08:06,800 Speaker 1: was invented. What's important for you to know. It's Maria's 159 00:08:07,280 --> 00:08:10,760 Speaker 1: uh talking to us on her phone from from the castle. 160 00:08:10,960 --> 00:08:14,040 Speaker 1: It's like this Gorgiosity castle where you think they do 161 00:08:14,240 --> 00:08:17,560 Speaker 1: a you know, a fancy French film, and it's the 162 00:08:17,680 --> 00:08:21,920 Speaker 1: place of the gastrom the whipped cream, where they figured 163 00:08:21,960 --> 00:08:25,480 Speaker 1: out sugar and cream years ago. You were there with 164 00:08:25,560 --> 00:08:29,440 Speaker 1: a French finance minister. Uh, Maria and I thought he 165 00:08:29,640 --> 00:08:34,719 Speaker 1: was extraordinary about the new Europe and their pushback to 166 00:08:34,920 --> 00:08:41,359 Speaker 1: technology and particularly Libra. What was his tone about Facebook's 167 00:08:41,440 --> 00:08:46,640 Speaker 1: technical effort. I think Tom and very simple terms. They 168 00:08:46,720 --> 00:08:50,160 Speaker 1: hate it. They hate the idea behind uh Libra. They 169 00:08:50,240 --> 00:08:53,079 Speaker 1: just don't like it because they don't understand what is 170 00:08:53,480 --> 00:08:57,679 Speaker 1: the endgame. They don't like the idea that Facebook to 171 00:08:58,480 --> 00:09:02,400 Speaker 1: almost vibally row the Europeans are trying to prop up 172 00:09:02,400 --> 00:09:05,000 Speaker 1: the euro This is an issue, and also that they 173 00:09:05,120 --> 00:09:08,720 Speaker 1: take the scandals with the data and the privacy issues 174 00:09:08,880 --> 00:09:13,000 Speaker 1: very seriously. So they really don't like it. John. The bitcoin, 175 00:09:13,600 --> 00:09:16,480 Speaker 1: if I'm thinking French now, the bitcoin has moved forced 176 00:09:16,520 --> 00:09:21,160 Speaker 1: standard deviations plus two the minus two in like six days. 177 00:09:22,120 --> 00:09:25,880 Speaker 1: I mean that's the volatility of So Tom, you've identified 178 00:09:25,920 --> 00:09:29,120 Speaker 1: a space, an area where there is some unity at 179 00:09:29,160 --> 00:09:31,640 Speaker 1: the G seven today for finance ministers. It's the era 180 00:09:31,880 --> 00:09:33,960 Speaker 1: of division that I think is going to be revealing 181 00:09:34,000 --> 00:09:37,439 Speaker 1: through the day between the Treasury Secretary Stephen Manuchin and 182 00:09:37,559 --> 00:09:40,360 Speaker 1: Bruno La Maire. Maria talked to me about the digital 183 00:09:40,480 --> 00:09:43,560 Speaker 1: tax that the French want to implement, who it impacts, 184 00:09:43,880 --> 00:09:47,800 Speaker 1: and the pushback we could get from the United States. Today. Well, 185 00:09:47,880 --> 00:09:49,959 Speaker 1: the French will tell you this is a country that 186 00:09:50,120 --> 00:09:53,120 Speaker 1: is a sovereign nation, and uh, they want to go 187 00:09:53,200 --> 00:09:55,680 Speaker 1: ahead with this, and they have already in fact voted 188 00:09:55,720 --> 00:09:57,960 Speaker 1: and favor up this and the Senate. So what happened 189 00:09:58,440 --> 00:10:00,760 Speaker 1: unless there's an agreement and an we ce D level, 190 00:10:00,880 --> 00:10:03,439 Speaker 1: which is frankly what the French are hoping for, But 191 00:10:03,559 --> 00:10:05,959 Speaker 1: it hasn't really happened as quickly as they wanted to. 192 00:10:06,200 --> 00:10:08,400 Speaker 1: They just decided to go ahead and do it alone. 193 00:10:08,880 --> 00:10:11,200 Speaker 1: The Americans will do it. They think there's an almost 194 00:10:11,280 --> 00:10:14,200 Speaker 1: anti American bias in many of the decisions that are 195 00:10:14,280 --> 00:10:17,600 Speaker 1: taken in France, and that companies are punished just because 196 00:10:17,640 --> 00:10:19,800 Speaker 1: they do well in the Europeans simply don't have that 197 00:10:19,920 --> 00:10:22,120 Speaker 1: kind of technology, so that could be an issue. And 198 00:10:22,240 --> 00:10:25,040 Speaker 1: also the dollar. I think that the Europeans are aware 199 00:10:25,120 --> 00:10:27,319 Speaker 1: the Trump's like the weak dollar and that could have 200 00:10:27,400 --> 00:10:31,520 Speaker 1: an impact on the Europe. What's a digital tax? I mean, 201 00:10:31,600 --> 00:10:35,520 Speaker 1: what do we tell who's taxing what when where? Well, 202 00:10:35,600 --> 00:10:38,200 Speaker 1: this is the whole point of this thing. The French said, 203 00:10:38,480 --> 00:10:41,280 Speaker 1: let's just uh not being naive. We know that in 204 00:10:41,400 --> 00:10:45,280 Speaker 1: Europe there's many low tax your dedctions like the Irish Republic, 205 00:10:45,400 --> 00:10:47,720 Speaker 1: and we know the money that gets made in France 206 00:10:47,800 --> 00:10:53,439 Speaker 1: ultimately goes UH Channeled or Ireland, so we don't like 207 00:10:53,600 --> 00:10:55,600 Speaker 1: that companies and main money here will have to pay 208 00:10:55,679 --> 00:10:59,120 Speaker 1: taxes in this country. It is also strange because these 209 00:10:59,160 --> 00:11:02,120 Speaker 1: companies will tell you you don't really understand how we operate, 210 00:11:02,320 --> 00:11:04,120 Speaker 1: and the French will tell you, well, we need to 211 00:11:04,240 --> 00:11:06,600 Speaker 1: raise money. This is something that the president has said 212 00:11:06,640 --> 00:11:09,120 Speaker 1: he wants to do. The French are very keen on 213 00:11:09,240 --> 00:11:11,880 Speaker 1: this idea of new capitalists and mostly respondent to the 214 00:11:11,960 --> 00:11:15,280 Speaker 1: Yellow vest and they want to go ahead with this. Okay, fine, 215 00:11:15,320 --> 00:11:18,719 Speaker 1: but great. What's the Irish response to this? Well, this 216 00:11:18,960 --> 00:11:21,559 Speaker 1: is where it gets very tricky because the Irish will 217 00:11:21,640 --> 00:11:25,200 Speaker 1: tell you we don't want our situation to change because 218 00:11:26,080 --> 00:11:28,559 Speaker 1: jobs are on the line and we have to speak 219 00:11:28,600 --> 00:11:30,880 Speaker 1: as one voice. We don't like the fact that the 220 00:11:31,000 --> 00:11:33,800 Speaker 1: French just came in and stormed the European Union with 221 00:11:33,880 --> 00:11:37,200 Speaker 1: this idea and didn't actually to conscious like the Dutch 222 00:11:37,360 --> 00:11:39,800 Speaker 1: the Irish and they're against it. So you can see 223 00:11:39,800 --> 00:11:42,680 Speaker 1: it's so problematic to get done at an EU level. 224 00:11:43,200 --> 00:11:49,480 Speaker 1: I recommend uh Maria la Capentannier like Cuisine de Vatel 225 00:11:49,920 --> 00:11:52,520 Speaker 1: Chateau chant Oh, I love it when you speak French 226 00:11:53,800 --> 00:11:56,679 Speaker 1: people say toma, but if but if I can just 227 00:11:56,720 --> 00:11:59,880 Speaker 1: stay very quickly. Their French are actually down playing the 228 00:12:00,000 --> 00:12:02,760 Speaker 1: whole lavishness here, like his Amadal Macron and one his 229 00:12:02,880 --> 00:12:06,079 Speaker 1: ministers was caught up in his Scandalcauds of his very 230 00:12:06,160 --> 00:12:10,360 Speaker 1: lavish The French are pulling back from that. Well, what 231 00:12:10,480 --> 00:12:12,840 Speaker 1: are you telling me? They're going to McDonald's and shenti 232 00:12:13,679 --> 00:12:17,040 Speaker 1: all the number two value meal. Well they'll tell you. 233 00:12:17,840 --> 00:12:19,839 Speaker 1: You know, we can just call back. Wait, wait, wait, 234 00:12:21,600 --> 00:12:23,960 Speaker 1: we don't have to go all out. We gotta make 235 00:12:24,000 --> 00:12:26,240 Speaker 1: some news today, Maria. Have you ever have you ever 236 00:12:26,320 --> 00:12:32,959 Speaker 1: been into McDonald's. I happen many times. Thank you so much, 237 00:12:45,840 --> 00:12:48,760 Speaker 1: John Farewn, Tom Keane. Right now with what has become 238 00:12:48,880 --> 00:12:54,040 Speaker 1: always an interesting and interview, but particularly across all of 239 00:12:54,080 --> 00:12:59,080 Speaker 1: the Bloomberg world, has become exceptionally important. He is Mitchell Rochelle, 240 00:13:00,000 --> 00:13:02,960 Speaker 1: and he's not selling real estate. He's an accountant at 241 00:13:03,040 --> 00:13:07,640 Speaker 1: PwC where he counts the beans. Let's start with what 242 00:13:08,000 --> 00:13:11,520 Speaker 1: Bloomberg eleven three oh Boston, one of six one FM 243 00:13:13,280 --> 00:13:18,600 Speaker 1: in Washington care about, which is the taxes on real estate? 244 00:13:19,200 --> 00:13:21,079 Speaker 1: Now we're on a number of quarters. What have we 245 00:13:21,240 --> 00:13:25,760 Speaker 1: learned about the Trump tax effect on real estate for 246 00:13:25,880 --> 00:13:29,600 Speaker 1: these big Democratic cities that they went after. You used 247 00:13:29,600 --> 00:13:32,920 Speaker 1: to have a partner when you own real estate in 248 00:13:33,160 --> 00:13:35,760 Speaker 1: one of these states, which was the federal government, because 249 00:13:35,920 --> 00:13:38,920 Speaker 1: you could could you could deduct your property taxes, which 250 00:13:38,920 --> 00:13:42,600 Speaker 1: are exorbitant in some of those jurisdictions. And that partner's gone. 251 00:13:43,280 --> 00:13:46,160 Speaker 1: And when people are making the decision to buy versus rent, 252 00:13:46,600 --> 00:13:50,240 Speaker 1: absent that partner, they're thinking rent makes it better. What 253 00:13:50,360 --> 00:13:53,120 Speaker 1: have you learned in the last two quarters about what 254 00:13:53,360 --> 00:13:57,480 Speaker 1: people are doing when they see those that decision tree 255 00:13:57,520 --> 00:14:00,160 Speaker 1: of cash out the door. A lot of the are 256 00:14:00,240 --> 00:14:04,199 Speaker 1: staying put. So if they're renting, um, they're staying in 257 00:14:04,280 --> 00:14:06,000 Speaker 1: the in the place where they're renting. If they have 258 00:14:06,120 --> 00:14:09,079 Speaker 1: a starter home, they're staying in the starter home UM. 259 00:14:09,400 --> 00:14:12,800 Speaker 1: Or they're just picking up and moving to Florida or Texas. 260 00:14:13,080 --> 00:14:16,400 Speaker 1: And and that is a force of nature we're seeing it. Mitch, 261 00:14:16,400 --> 00:14:18,360 Speaker 1: would love your thoughts on the economictics we've got this 262 00:14:18,520 --> 00:14:20,880 Speaker 1: morning as well. We had to drop an apartment building 263 00:14:21,360 --> 00:14:23,960 Speaker 1: outweighed by a pickup in single family projects. Is that 264 00:14:24,080 --> 00:14:26,440 Speaker 1: something you're seeing play out too well. But it's interesting 265 00:14:26,480 --> 00:14:32,400 Speaker 1: about apartment John is that's probably overbuilt. There's clearly the shift, 266 00:14:32,480 --> 00:14:35,120 Speaker 1: and I would argue that it's almost become secular. People 267 00:14:35,160 --> 00:14:38,120 Speaker 1: are just saying I'm never gonna own um. So there. 268 00:14:38,280 --> 00:14:42,280 Speaker 1: That's been happening for a while. Apartment developers and reads 269 00:14:42,360 --> 00:14:45,080 Speaker 1: and have been building apartments and they're just pumping the 270 00:14:45,160 --> 00:14:48,360 Speaker 1: brakes there because in some markets they're seeing rent reductions 271 00:14:48,480 --> 00:14:50,560 Speaker 1: because they just have too much product in the market. 272 00:14:50,680 --> 00:14:53,080 Speaker 1: We've seen that in New York City a little bit. 273 00:14:53,160 --> 00:14:57,600 Speaker 1: New York is an island metaphorically and in reality. So 274 00:14:57,880 --> 00:15:00,560 Speaker 1: it's hard to tell because there's a lot of gratification 275 00:15:00,600 --> 00:15:02,200 Speaker 1: and what's going on the market. But if you look 276 00:15:02,280 --> 00:15:06,320 Speaker 1: at you mentioned University of Michigan, you look at ann Arbor, 277 00:15:06,960 --> 00:15:09,320 Speaker 1: rents are dropping. My son's a student there and rents 278 00:15:09,360 --> 00:15:12,360 Speaker 1: have fall in. That's what he says. No, that's for 279 00:15:12,760 --> 00:15:17,560 Speaker 1: I'm the guarante or in the least. No, it's not 280 00:15:17,640 --> 00:15:21,840 Speaker 1: all going into his venmo on the side. When you 281 00:15:21,920 --> 00:15:23,440 Speaker 1: when you look at real estate, we're gonna have you 282 00:15:23,520 --> 00:15:25,320 Speaker 1: come back here. But when you look at the national 283 00:15:25,400 --> 00:15:28,720 Speaker 1: picture right now, and everybody wants to know, is when 284 00:15:28,800 --> 00:15:33,400 Speaker 1: the prices actually start going up with that enthusiasm, which 285 00:15:33,440 --> 00:15:35,400 Speaker 1: you were we not. It ain't out there, is it. Well, 286 00:15:35,480 --> 00:15:37,840 Speaker 1: what the problem is if you look at data nationally, 287 00:15:37,960 --> 00:15:40,280 Speaker 1: home prices continue to go up because of the supply 288 00:15:40,360 --> 00:15:43,360 Speaker 1: and demand in balance. But if you're selling your home 289 00:15:43,680 --> 00:15:46,200 Speaker 1: and if it's above a maybe a six d thousand 290 00:15:46,200 --> 00:15:49,360 Speaker 1: dollar price point, it certainly doesn't feel that way because 291 00:15:49,440 --> 00:15:51,800 Speaker 1: there's a lot less demand above that price point. The 292 00:15:51,880 --> 00:15:54,720 Speaker 1: starter home market's interesting. What's going on right now? You 293 00:15:54,800 --> 00:15:57,680 Speaker 1: have baby boomers who are selling their home and downsizing 294 00:15:58,080 --> 00:16:00,880 Speaker 1: and competing with the millennial generation Asian buying their first 295 00:16:01,040 --> 00:16:03,880 Speaker 1: so they're actually competing. Children are competing with their parents 296 00:16:03,920 --> 00:16:06,840 Speaker 1: because starter homes in Washington, starter homes in New York, 297 00:16:06,880 --> 00:16:09,920 Speaker 1: starter homes in Boston, and four other Sanford, good morning, 298 00:16:10,000 --> 00:16:13,280 Speaker 1: San Francisco. What's a what's the starter home? John in 299 00:16:13,400 --> 00:16:17,320 Speaker 1: New York? One point five million? Right? But that's on again, 300 00:16:17,360 --> 00:16:20,000 Speaker 1: this crazy island. That's the problem, isn't it. You take 301 00:16:20,040 --> 00:16:23,880 Speaker 1: an hour car ride or train ride away, and the 302 00:16:23,960 --> 00:16:27,800 Speaker 1: starter home can be four hundred thousand dollars and that's 303 00:16:27,840 --> 00:16:31,880 Speaker 1: a conventional mortgage that's very accessible, and but that could 304 00:16:31,920 --> 00:16:34,680 Speaker 1: be the same home that you know, a baby boomers 305 00:16:34,760 --> 00:16:37,040 Speaker 1: moving up and trying to get a smaller home. Mitch, 306 00:16:37,080 --> 00:16:39,520 Speaker 1: I'd love you thought some more monetary policy hasn't hasn't done. 307 00:16:39,520 --> 00:16:42,320 Speaker 1: We've seen a load of mortgage refinancing activity as rights 308 00:16:42,360 --> 00:16:45,800 Speaker 1: have dropped, blower. Have we seen any increase in purchasing now? 309 00:16:46,120 --> 00:16:48,600 Speaker 1: It's interestingly enough, John, I would have thought that it 310 00:16:48,640 --> 00:16:51,000 Speaker 1: would have fueled more. But the problem is, I've said 311 00:16:51,320 --> 00:16:54,040 Speaker 1: probably before on this show, you can't buy a house 312 00:16:54,120 --> 00:16:58,000 Speaker 1: that's not for sale. And when existing home inventory nationally 313 00:16:58,160 --> 00:17:01,040 Speaker 1: is four point three months, it doesn't matter how they 314 00:17:01,520 --> 00:17:03,720 Speaker 1: load the rates go, you just can't buy a house 315 00:17:03,760 --> 00:17:06,359 Speaker 1: that's not Alowe, but you just said, you just said that. 316 00:17:06,440 --> 00:17:09,040 Speaker 1: I contradict myself, you know, but you just said above 317 00:17:09,080 --> 00:17:11,280 Speaker 1: six hundred thousand, there's a ton of houses for sale. 318 00:17:11,320 --> 00:17:12,760 Speaker 1: There's a ton of house But the problem is the 319 00:17:12,840 --> 00:17:15,360 Speaker 1: buyers that they don't have a bid that high. Right, 320 00:17:15,440 --> 00:17:19,040 Speaker 1: So the buyers are very robust in the six hundred 321 00:17:19,119 --> 00:17:22,160 Speaker 1: thousand and below and then the six thousand above, because 322 00:17:22,240 --> 00:17:25,280 Speaker 1: what's happening is those are the people who are downsizing 323 00:17:25,400 --> 00:17:27,920 Speaker 1: in many cases and going into that lower price point. 324 00:17:28,160 --> 00:17:30,480 Speaker 1: Let's come back, Mr Show with US always fascinating with 325 00:17:30,560 --> 00:17:33,200 Speaker 1: p WC and some of the real estate trends that 326 00:17:33,359 --> 00:17:52,080 Speaker 1: we see nationwide. There are little jewels you can get 327 00:17:52,160 --> 00:17:54,879 Speaker 1: from JP Morgan. We protect the copyright of all our guests. 328 00:17:55,440 --> 00:18:00,760 Speaker 1: One m Feroli with two simple pages in one more 329 00:18:00,880 --> 00:18:07,440 Speaker 1: paragraph that is absolutely brilliant on the global ramifications, the 330 00:18:07,520 --> 00:18:12,520 Speaker 1: global dimensions of all this, our starred Bologna of the 331 00:18:12,640 --> 00:18:16,560 Speaker 1: modern federal bank. We begin with Michael farrowle looking at 332 00:18:16,680 --> 00:18:21,440 Speaker 1: martially and crosses of our current accounts and global interest rates. 333 00:18:21,880 --> 00:18:27,240 Speaker 1: Michael is Jerome Powell's central banker to the world. Uh. Well, 334 00:18:27,320 --> 00:18:29,520 Speaker 1: the set has always been pretty central, at least in 335 00:18:29,520 --> 00:18:31,879 Speaker 1: the post war period. Uh. And he has been, of 336 00:18:31,960 --> 00:18:35,240 Speaker 1: course of the past few weeks or months more sensitive 337 00:18:35,280 --> 00:18:37,800 Speaker 1: to global development. So the set has always been influencing 338 00:18:37,920 --> 00:18:40,600 Speaker 1: global developments, and more recently they've been taking I think 339 00:18:40,760 --> 00:18:43,880 Speaker 1: larger account of what's happening abroadect. But even without global 340 00:18:44,000 --> 00:18:47,800 Speaker 1: influences our start in the US, what would have come 341 00:18:47,840 --> 00:18:51,440 Speaker 1: down meaningfully over the past twenty years. So we're in 342 00:18:51,520 --> 00:18:56,400 Speaker 1: a disinflation lower terminal rate mode which you canonize four 343 00:18:56,480 --> 00:19:00,960 Speaker 1: or five years ago. Michael, explain the global ammifications. Is 344 00:19:01,040 --> 00:19:05,360 Speaker 1: it just as simple is there exporting disinflation and outright 345 00:19:05,480 --> 00:19:10,199 Speaker 1: deflation to the United States. Right, So interest rates are 346 00:19:10,280 --> 00:19:12,879 Speaker 1: obviously low in the US, and we often talk about 347 00:19:12,960 --> 00:19:17,520 Speaker 1: economists often talk about that as reflecting slower trend growth 348 00:19:17,640 --> 00:19:22,560 Speaker 1: due to demographics, productivity, etcetera. However, there's an important global 349 00:19:22,600 --> 00:19:26,080 Speaker 1: dimension here, which is that the US obviously has run 350 00:19:26,160 --> 00:19:29,080 Speaker 1: a large current account deficit over the past couple of decades, 351 00:19:29,119 --> 00:19:32,800 Speaker 1: which means we import more financial capital, are a net 352 00:19:32,880 --> 00:19:36,800 Speaker 1: importer of financial capital and all else equel that's pushing 353 00:19:36,880 --> 00:19:39,320 Speaker 1: down interest rates in the US. So it's not just 354 00:19:39,600 --> 00:19:43,080 Speaker 1: the saving and investment balance in the US that's influencing 355 00:19:43,119 --> 00:19:46,040 Speaker 1: our interest rates, but the saving and investment balance abroad, 356 00:19:46,320 --> 00:19:49,920 Speaker 1: and those factories seem like they are almost surely pushing 357 00:19:49,960 --> 00:19:51,760 Speaker 1: down interest rates in the US. And Paul, you know 358 00:19:51,880 --> 00:19:56,560 Speaker 1: the equation, I are equals g plus omega alpha over 359 00:19:56,680 --> 00:20:00,360 Speaker 1: are my eyes are alpha over tow. I think, what's 360 00:20:00,359 --> 00:20:02,919 Speaker 1: he doing with all the Greek letters in the summer, Michael, 361 00:20:03,040 --> 00:20:07,080 Speaker 1: I was, I was sticking with the pictures, the graphs. So, Michael, 362 00:20:07,080 --> 00:20:09,679 Speaker 1: I mean, we talk about in the globalization, the world's 363 00:20:09,720 --> 00:20:12,159 Speaker 1: getting smaller, but boy, you take a look at the 364 00:20:12,280 --> 00:20:15,200 Speaker 1: U s economy still relatively strong in the face of 365 00:20:15,440 --> 00:20:20,320 Speaker 1: you know, just extraordinary weakness in Europe, deceleration in China. 366 00:20:20,880 --> 00:20:22,720 Speaker 1: What's the great No one's really sure. How do you 367 00:20:22,800 --> 00:20:24,560 Speaker 1: kind of square that circle here? How long do you 368 00:20:24,640 --> 00:20:28,000 Speaker 1: expect the US to kind of remain relatively strong rest 369 00:20:28,359 --> 00:20:31,040 Speaker 1: versus the rest of the world. Well, I think the 370 00:20:31,119 --> 00:20:34,520 Speaker 1: strength has really to two factors. One is, most importantly 371 00:20:34,560 --> 00:20:37,240 Speaker 1: has been the consumer, which we saw yesterday, continues to 372 00:20:37,359 --> 00:20:40,879 Speaker 1: just power ahead right through June and probably into the 373 00:20:40,960 --> 00:20:44,760 Speaker 1: rest of the summer. The second factor is that government 374 00:20:44,840 --> 00:20:47,760 Speaker 1: has actually been pretty strong at all levels state, local, 375 00:20:47,840 --> 00:20:50,920 Speaker 1: and federal government spending. That is so I think that 376 00:20:51,080 --> 00:20:54,600 Speaker 1: has those two factors that helped inflate the US. UH. 377 00:20:54,960 --> 00:20:57,320 Speaker 1: You know, we as in Greenspan famous words, we can't 378 00:20:57,359 --> 00:21:00,800 Speaker 1: remain an island of prosperity forever, but we do think 379 00:21:00,920 --> 00:21:03,320 Speaker 1: that we'll see some slowing in the second half, but 380 00:21:03,480 --> 00:21:06,080 Speaker 1: that you know, some of these domestic factors should keep 381 00:21:06,160 --> 00:21:08,359 Speaker 1: us doing all right in the second half, maybe a 382 00:21:08,400 --> 00:21:13,159 Speaker 1: little a little flower than Michael. What is global autarchy 383 00:21:13,480 --> 00:21:17,879 Speaker 1: or estimated at what are we talking about? Our tarchy 384 00:21:18,200 --> 00:21:22,960 Speaker 1: is a a state of the world, uh, an economic 385 00:21:23,040 --> 00:21:25,760 Speaker 1: concept of a country that doesn't trade with the rest 386 00:21:25,840 --> 00:21:28,080 Speaker 1: of the world. So you know, country like North Korea 387 00:21:28,119 --> 00:21:30,680 Speaker 1: would be considered autarchy. Okay, but it's also at the 388 00:21:30,760 --> 00:21:36,680 Speaker 1: margin the country the president Trump wines in that direction. Yes, yes, 389 00:21:36,920 --> 00:21:41,560 Speaker 1: in that direction, that's called at the margin, professor. To 390 00:21:41,680 --> 00:21:43,800 Speaker 1: the extent we close ourselves off to trade to the 391 00:21:43,840 --> 00:21:45,640 Speaker 1: rest of the world, we're also gonna close ourselves off 392 00:21:45,680 --> 00:21:48,119 Speaker 1: to capital flows to the rest of the world. Just 393 00:21:48,160 --> 00:21:51,639 Speaker 1: as a matter of arithmetic. Uh, that probably wouldn't be 394 00:21:51,760 --> 00:21:54,080 Speaker 1: a good idea because the rest of the globe is 395 00:21:54,200 --> 00:21:56,680 Speaker 1: financing a lot of our investment right now. We're not 396 00:21:56,760 --> 00:21:59,359 Speaker 1: saving enough now, we couldn't move in a direction of 397 00:21:59,440 --> 00:22:03,160 Speaker 1: saving more, which would involve, at least at the policy level, 398 00:22:03,280 --> 00:22:06,520 Speaker 1: reducing federal deficits. But that doesn't seem to be you know, 399 00:22:06,560 --> 00:22:08,920 Speaker 1: a big priority right now. So an absence of higher 400 00:22:09,000 --> 00:22:11,960 Speaker 1: domestic saving, we need for and say, I think to 401 00:22:12,480 --> 00:22:15,600 Speaker 1: finance our investment. We need investment to continue to you know, 402 00:22:16,119 --> 00:22:19,440 Speaker 1: increase growth and increase living standards. So, mich I'm just 403 00:22:19,520 --> 00:22:22,000 Speaker 1: looking on my Bloomberg screen right now, the German tenure 404 00:22:22,160 --> 00:22:27,960 Speaker 1: minus point to eight eight. How much longer can negative 405 00:22:28,000 --> 00:22:32,040 Speaker 1: interest rates around the world, particularly in Europe, remain what's 406 00:22:32,080 --> 00:22:36,359 Speaker 1: the solution, if there is one. I mean, in Europe 407 00:22:36,520 --> 00:22:40,360 Speaker 1: and Japan, they're in a more difficult spot than we are, obviously. 408 00:22:40,480 --> 00:22:44,280 Speaker 1: I think the solution, uh you know, probably is to 409 00:22:44,600 --> 00:22:47,040 Speaker 1: first of all, it's like when you're on antibiotics, you 410 00:22:47,080 --> 00:22:50,360 Speaker 1: don't want to get off it before the work is done. 411 00:22:50,400 --> 00:22:53,199 Speaker 1: I think in those countries you are seeing progress towards 412 00:22:53,720 --> 00:22:57,000 Speaker 1: tighter labor markets, and maybe over time and time being 413 00:22:57,560 --> 00:22:59,560 Speaker 1: measured in years, we could start to see that show 414 00:22:59,640 --> 00:23:03,080 Speaker 1: up in higher price pressures and inflation, which would invite 415 00:23:03,119 --> 00:23:06,520 Speaker 1: eventually get us away from these negative interest rates. Fiscal 416 00:23:06,600 --> 00:23:10,800 Speaker 1: policy could probably also help, particularly in the Eurozone, where 417 00:23:11,600 --> 00:23:14,280 Speaker 1: uh you know, they're not they're no longer moving our 418 00:23:14,320 --> 00:23:18,240 Speaker 1: direction of austerlity, but they're certainly not using the physical 419 00:23:18,280 --> 00:23:21,960 Speaker 1: space that could be there. Mica Faroli, your colleague Dr 420 00:23:22,040 --> 00:23:23,720 Speaker 1: Casman was on with us the other day for a 421 00:23:23,800 --> 00:23:27,560 Speaker 1: quick phone call, and he really emphasized JP Morgaret is 422 00:23:27,640 --> 00:23:30,159 Speaker 1: certainly not going to go to a fifty bay fifty 423 00:23:30,280 --> 00:23:33,000 Speaker 1: rate cut dynamic. I don't want to get in the 424 00:23:33,040 --> 00:23:36,320 Speaker 1: parlor game with twenty five or fifty beeves. But what's 425 00:23:36,359 --> 00:23:40,200 Speaker 1: your vector. If we get a twenty five basis point cut, 426 00:23:40,840 --> 00:23:43,879 Speaker 1: is that that we're measured and that sets in place 427 00:23:44,119 --> 00:23:48,280 Speaker 1: in inertial force to ever lower interest rates or can 428 00:23:48,359 --> 00:23:52,320 Speaker 1: it actually be one and done and wait to see. Well, 429 00:23:52,359 --> 00:23:55,600 Speaker 1: I think after after the July meeting later in two 430 00:23:55,640 --> 00:23:57,840 Speaker 1: weeks from today, when we are expecting a twenty five 431 00:23:57,840 --> 00:23:59,920 Speaker 1: basis point cut, I think it becomes more data to 432 00:24:00,040 --> 00:24:01,680 Speaker 1: and and I think we all agree that the July 433 00:24:01,880 --> 00:24:05,120 Speaker 1: meeting is basically not data dependent. The FED as all 434 00:24:05,200 --> 00:24:07,720 Speaker 1: but promise they're going to cut rates in two weeks. 435 00:24:08,400 --> 00:24:10,480 Speaker 1: And I think the further you go in time, the 436 00:24:10,560 --> 00:24:12,840 Speaker 1: more the data does matter. And I think if we 437 00:24:12,920 --> 00:24:17,200 Speaker 1: get data like we have received over the past four weeks, 438 00:24:17,280 --> 00:24:20,080 Speaker 1: which have been quite stellar, that that continues for the 439 00:24:20,160 --> 00:24:22,720 Speaker 1: next two months, and I think September is not a 440 00:24:22,800 --> 00:24:24,639 Speaker 1: done deal in terms of the cut. However, if we 441 00:24:24,720 --> 00:24:28,120 Speaker 1: do see some of the global UH weakness we talked 442 00:24:28,119 --> 00:24:31,080 Speaker 1: about feed into some of the domestic measures, and then 443 00:24:31,160 --> 00:24:35,160 Speaker 1: we probably UH stay on a meeting until we feel 444 00:24:35,280 --> 00:24:38,520 Speaker 1: that those risks are no longer there. So, Michael, you've 445 00:24:38,560 --> 00:24:44,080 Speaker 1: mentioned earlier the relatively strong consumer consumer remains resilient. Do 446 00:24:44,160 --> 00:24:46,119 Speaker 1: you think the consumer strength is enough to keep the 447 00:24:46,200 --> 00:24:50,680 Speaker 1: US economy out of a possible recession in certainly, I 448 00:24:50,760 --> 00:24:55,000 Speaker 1: think we saw something like that play out in twenty 449 00:24:55,240 --> 00:24:59,440 Speaker 1: fifteen when we also had a global slowdown, somewhat different 450 00:24:59,480 --> 00:25:02,119 Speaker 1: in nature of a you know, the same same general idea, 451 00:25:02,200 --> 00:25:07,920 Speaker 1: which is the globe flowed um manufacturing sload captex was 452 00:25:08,119 --> 00:25:10,680 Speaker 1: even we domestically, even weaker than then it is now, 453 00:25:11,160 --> 00:25:13,400 Speaker 1: but the consumer kept us going. And so I think 454 00:25:14,000 --> 00:25:16,320 Speaker 1: that's a pretty recent template for how we can like 455 00:25:16,720 --> 00:25:19,240 Speaker 1: recession next. Michael, I hate you. I'm gonna have to 456 00:25:19,320 --> 00:25:22,760 Speaker 1: read every single word of US Global Dimensions of the 457 00:25:22,840 --> 00:25:27,639 Speaker 1: Load Domestic are started as a terrific essay, clearly the 458 00:25:27,760 --> 00:25:30,440 Speaker 1: lead for research piece of the summer. By that, I 459 00:25:30,480 --> 00:25:33,440 Speaker 1: mean it's exactly two pages, one paragraph long, which is 460 00:25:33,520 --> 00:25:36,879 Speaker 1: my kind of research piece. Michael Faroli is the Jpe Morgan, 461 00:25:37,000 --> 00:25:54,399 Speaker 1: always thinking outside the box. Right now, we want to 462 00:25:54,480 --> 00:26:00,399 Speaker 1: talk to uh Nathan Hagar right now about John Paul Stevens. Nathan, Uh, 463 00:26:00,560 --> 00:26:03,239 Speaker 1: he is a giant of the judiciary and he has 464 00:26:03,320 --> 00:26:05,600 Speaker 1: died at a ripe old age. Tell us about John 465 00:26:05,640 --> 00:26:08,680 Speaker 1: Paul Stevens. Yeah, it's a solemn occasion. Tom. In this 466 00:26:08,880 --> 00:26:13,000 Speaker 1: often Divided City. Retired Supreme Court Justice John Paul Stevens 467 00:26:13,119 --> 00:26:17,520 Speaker 1: was ninety nine years old when he died yesterday. Seen 468 00:26:17,600 --> 00:26:20,320 Speaker 1: as a moderate conservative when first selected to join the 469 00:26:20,359 --> 00:26:25,320 Speaker 1: federal bench by Richard Nixon in n Seventy five years later, 470 00:26:25,680 --> 00:26:28,879 Speaker 1: Stevens was nominated to the Supreme Court by Gerald Ford. 471 00:26:29,440 --> 00:26:33,359 Speaker 1: Judge Stevens is held in the highest esteem by his 472 00:26:33,520 --> 00:26:38,000 Speaker 1: colleagues and the legal profession and the judiciary, and has 473 00:26:38,080 --> 00:26:41,320 Speaker 1: had an outstanding career in the practice and the teaching 474 00:26:41,400 --> 00:26:45,000 Speaker 1: of law. As well as i'm the Federal Bench, I 475 00:26:45,080 --> 00:26:48,960 Speaker 1: am confident that he will bring both professional and personal 476 00:26:49,080 --> 00:26:52,680 Speaker 1: qualities of the highest order to the Supreme Court. The 477 00:26:52,960 --> 00:26:56,200 Speaker 1: Republican President appointed him. Stevens went on to become a 478 00:26:56,320 --> 00:26:59,920 Speaker 1: leading liberal voice on presidential powers, individual rights, and the 479 00:27:00,040 --> 00:27:03,200 Speaker 1: death penalty, an issue he addressed recently in an appearance 480 00:27:03,240 --> 00:27:05,840 Speaker 1: on the PBS News Hour My Own Thing. It took 481 00:27:06,000 --> 00:27:09,200 Speaker 1: quite a well to really reach the inclusion that the 482 00:27:09,280 --> 00:27:12,439 Speaker 1: death penalty does more harm than good. Is it terribly 483 00:27:12,600 --> 00:27:17,760 Speaker 1: expensive and really pointless process because it I think it 484 00:27:17,920 --> 00:27:23,920 Speaker 1: accomplishes very little that can't be accomplished with more humane punishment. 485 00:27:24,080 --> 00:27:27,000 Speaker 1: Stevens also voted in the majority of the controversial Roe v. 486 00:27:27,160 --> 00:27:30,320 Speaker 1: Wade decision on abortion, no matter he discussed as recently 487 00:27:30,400 --> 00:27:32,680 Speaker 1: as this year. In the long run, it seems to 488 00:27:32,800 --> 00:27:37,400 Speaker 1: me that the abortion is a necessary procedure that will 489 00:27:37,440 --> 00:27:41,760 Speaker 1: be recognized and will be performed lawfully. Stevens was fond 490 00:27:41,800 --> 00:27:44,800 Speaker 1: of writing separate opinions to make fine legal distinctions. He 491 00:27:44,880 --> 00:27:48,359 Speaker 1: eventually evolved into a coalition builder whose handiwork included the 492 00:27:48,400 --> 00:27:51,400 Speaker 1: two thousand four opinion that said US courts had authority 493 00:27:51,440 --> 00:27:55,320 Speaker 1: over suspected terrorists held at Guantanamo Bay. Stevens retired in 494 00:27:55,400 --> 00:27:58,600 Speaker 1: two during the presidency of Barack Obama. At the age 495 00:27:58,640 --> 00:28:02,040 Speaker 1: of ninety. He was the second oldest justice in US history. 496 00:28:02,240 --> 00:28:06,080 Speaker 1: Justice Stevens has courageously served his country from the moment 497 00:28:06,160 --> 00:28:10,320 Speaker 1: he enlisted the day before Pearl Harbor to his long 498 00:28:10,400 --> 00:28:13,760 Speaker 1: and distinguished tenure on the Supreme Court. During that tenure, 499 00:28:14,040 --> 00:28:16,960 Speaker 1: he has stood as an impartial guardian of the law. 500 00:28:17,880 --> 00:28:22,160 Speaker 1: He's worn the judicial robe with honor and humility. In retirements, 501 00:28:22,200 --> 00:28:25,359 Speaker 1: Stevens remained engaged in public debate. Just last year, he 502 00:28:25,480 --> 00:28:28,760 Speaker 1: called for the repeal of the constitution Second Amendment. Stephen 503 00:28:28,800 --> 00:28:31,119 Speaker 1: spoke about the push to curb gun rights with ABC 504 00:28:31,359 --> 00:28:36,960 Speaker 1: S George Stephanopolis, the amendment would merely prevent UH our 505 00:28:37,080 --> 00:28:39,880 Speaker 1: humans being made that Congress doesn't have the power to 506 00:28:40,040 --> 00:28:42,040 Speaker 1: do what I think is in the best public interest. 507 00:28:42,160 --> 00:28:44,960 Speaker 1: But to be clear, if Congress passed a national ban 508 00:28:46,040 --> 00:28:50,520 Speaker 1: on individual gun ownership, that would be constitutional under your amendment. 509 00:28:50,640 --> 00:28:53,440 Speaker 1: I think that's right. And following word of Justice Stevens, 510 00:28:53,480 --> 00:28:55,920 Speaker 1: passing the White House, issued a statement saying his work 511 00:28:56,240 --> 00:28:58,720 Speaker 1: will continue to shape the legal framework of our nation 512 00:28:58,800 --> 00:29:00,920 Speaker 1: for years to come. In his passion for the law 513 00:29:01,000 --> 00:29:03,760 Speaker 1: and for our country will not soon be forgotten. And 514 00:29:03,880 --> 00:29:07,760 Speaker 1: a Chief Justice John Roberts says that Stevens brought kindness, humility, 515 00:29:07,880 --> 00:29:11,920 Speaker 1: wisdom and independence to the Supreme Court again. John Paul 516 00:29:11,920 --> 00:29:15,040 Speaker 1: Stevens died at a hospital in Fort Lauderdale, Florida, yesterday, 517 00:29:15,200 --> 00:29:18,920 Speaker 1: complications following a stroke at the age of nine. And 518 00:29:19,280 --> 00:29:22,320 Speaker 1: Tom and Paul really does hearken back to a different 519 00:29:22,480 --> 00:29:25,920 Speaker 1: time in the Supreme Court where nowadays you can see 520 00:29:26,080 --> 00:29:30,200 Speaker 1: the divide so starkly on the High Court. UH, the 521 00:29:30,520 --> 00:29:35,120 Speaker 1: kind of consensus building that Stevens aimed for UH seems 522 00:29:35,200 --> 00:29:38,480 Speaker 1: to be at times a lost art. In Washington, Nathan 523 00:29:38,520 --> 00:29:40,720 Speaker 1: Hager Thank you so much. Just a terrific summer there. 524 00:29:40,800 --> 00:29:44,560 Speaker 1: Of the Justices live Paul Sweeney, what's extraordinary about the 525 00:29:44,680 --> 00:29:49,360 Speaker 1: span of his American history? As a child, he was 526 00:29:49,440 --> 00:29:53,520 Speaker 1: at the game where Babe Ruth pointed to center and 527 00:29:53,600 --> 00:29:57,280 Speaker 1: he has recollections of Ruth pointing to center field. And 528 00:29:57,360 --> 00:29:59,960 Speaker 1: of course part of the Greatest Generation World War Two 529 00:30:00,040 --> 00:30:03,960 Speaker 1: with enlisting. Uh oh, yeah, absolutely, but you know, yeah, 530 00:30:04,240 --> 00:30:06,720 Speaker 1: the only equivalences I know in the modern time would 531 00:30:06,760 --> 00:30:09,400 Speaker 1: be April Harriman. And to go back to the middle 532 00:30:09,440 --> 00:30:11,880 Speaker 1: of the history, John Hay who was of course a 533 00:30:11,960 --> 00:30:15,160 Speaker 1: Lincoln secretary uh and then ended up at Secretary of 534 00:30:15,240 --> 00:30:18,720 Speaker 1: State with Teddy Roosevelt. But uh, an extraordinary public and 535 00:30:18,800 --> 00:30:23,960 Speaker 1: private life of John Paul Stephen. Thanks for listening to 536 00:30:24,080 --> 00:30:28,560 Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on 537 00:30:28,640 --> 00:30:34,480 Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm 538 00:30:34,520 --> 00:30:37,800 Speaker 1: on Twitter at Tom Keane before the podcast. You can 539 00:30:37,880 --> 00:30:41,040 Speaker 1: always catch us worldwide. I'm Bloomberg Radio.