1 00:00:09,880 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Lee. 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 --> 00:00:28,000 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. The 5 00:00:28,160 --> 00:00:31,440 Speaker 1: history of counting the beans of any economy starts with 6 00:00:31,560 --> 00:00:35,199 Speaker 1: Leon Thief and Tenberg and back around the vicinity of 7 00:00:35,240 --> 00:00:38,159 Speaker 1: World War Two on. From that was a giant of 8 00:00:38,200 --> 00:00:42,800 Speaker 1: economics of Pennsylvania, Lawrence Klein. He's the one that invented 9 00:00:43,159 --> 00:00:47,240 Speaker 1: how we figure out what the U. S economy is doing. 10 00:00:47,280 --> 00:00:50,800 Speaker 1: He was the first doctoral candidate of the giant, Paul Samuelson. 11 00:00:51,280 --> 00:00:54,680 Speaker 1: It devolves down many years later to the blue Chip 12 00:00:54,800 --> 00:01:00,640 Speaker 1: Award Allen Zennor. Morgan Stanley did something extraordinary, put together 13 00:01:00,720 --> 00:01:04,000 Speaker 1: four years of data at Morgan Stanley and did it 14 00:01:04,080 --> 00:01:09,360 Speaker 1: with the smallest standard error in twenty years. Now joining us, 15 00:01:09,400 --> 00:01:12,800 Speaker 1: she walks on water from Morgan Stanley. How did you 16 00:01:12,920 --> 00:01:16,000 Speaker 1: do it? What? What do you do to walk on water? Thanks? Tom. 17 00:01:16,040 --> 00:01:18,680 Speaker 1: I think part of it is when you're in a 18 00:01:18,760 --> 00:01:22,240 Speaker 1: large organization like Morgan Stanley, you have the benefit of 19 00:01:22,319 --> 00:01:26,600 Speaker 1: global strategists covering every asset class of global economists in 20 00:01:26,720 --> 00:01:30,040 Speaker 1: every region and coming together in that mind sharing and 21 00:01:30,120 --> 00:01:33,560 Speaker 1: being sure that all those beans at up is part 22 00:01:33,560 --> 00:01:36,600 Speaker 1: of the process that helps what we call keeping it honest? 23 00:01:36,680 --> 00:01:38,959 Speaker 1: Did I and to Jim Garman, and can I say 24 00:01:39,000 --> 00:01:41,279 Speaker 1: this and tell me if I'm wrong? And what Steve 25 00:01:41,360 --> 00:01:44,320 Speaker 1: Roach wrought with Richard Burney years ago was you people 26 00:01:44,480 --> 00:01:47,160 Speaker 1: argue like I mean, it goes back and forth. It's 27 00:01:47,160 --> 00:01:51,840 Speaker 1: a very constructively argumentative process. And it is so it is, Yeah, 28 00:01:51,880 --> 00:01:54,560 Speaker 1: and I would describe it as constructive. I mean, sometimes 29 00:01:54,560 --> 00:01:57,800 Speaker 1: it can feel like arguing, but it's it's feedback. It's 30 00:01:57,840 --> 00:02:00,800 Speaker 1: pushed back. And that's really important because a is uh. 31 00:02:00,840 --> 00:02:03,760 Speaker 1: You take it, you listen to it, You make sure 32 00:02:03,800 --> 00:02:05,560 Speaker 1: that you're looking at it in the way that this 33 00:02:05,600 --> 00:02:08,120 Speaker 1: person is presenting to you. And so at least when 34 00:02:08,120 --> 00:02:10,560 Speaker 1: you go out with a forecast, you go out with 35 00:02:10,639 --> 00:02:13,320 Speaker 1: extremely strong conviction. I never could have stuck to our 36 00:02:13,520 --> 00:02:15,960 Speaker 1: one hype call in twenty fifteen or one hYP call 37 00:02:16,000 --> 00:02:20,760 Speaker 1: in tween um if I didn't have that debate to 38 00:02:20,840 --> 00:02:24,320 Speaker 1: be darn sure that I felt convicted about that view. 39 00:02:27,080 --> 00:02:30,080 Speaker 1: Do people actually the first of all, congratulations on the 40 00:02:30,080 --> 00:02:33,320 Speaker 1: award but do people um debate enough? So maybe in 41 00:02:33,320 --> 00:02:36,560 Speaker 1: your organization they do. But are people kind of vocal 42 00:02:37,080 --> 00:02:41,079 Speaker 1: um our policymakers vocal enough and do they exchange views enough? Well? 43 00:02:41,120 --> 00:02:43,760 Speaker 1: I think it's a it's a is an absolutely great question. 44 00:02:43,800 --> 00:02:45,440 Speaker 1: I mean, if you talk to Don Cone, the former 45 00:02:45,560 --> 00:02:48,520 Speaker 1: vice chair of the f O m C, uh, you know, 46 00:02:49,120 --> 00:02:51,160 Speaker 1: he is one of those that will lament over the 47 00:02:51,240 --> 00:02:53,920 Speaker 1: day that the Sunshine Act was put in place where 48 00:02:53,919 --> 00:02:57,079 Speaker 1: they released transcripts with only a five year lag Now 49 00:02:57,160 --> 00:03:00,360 Speaker 1: five years sounds like a lot um, but five years. 50 00:03:00,760 --> 00:03:04,160 Speaker 1: Most board governors have fourteen year terms. Uh. And so 51 00:03:04,200 --> 00:03:06,560 Speaker 1: he said, after that was put in place, what had 52 00:03:06,600 --> 00:03:10,160 Speaker 1: been very open, robust debate at the table in the 53 00:03:10,200 --> 00:03:12,120 Speaker 1: boardroom at the f O m C was everyone would 54 00:03:12,120 --> 00:03:14,480 Speaker 1: come in with prepared marks and you would go around 55 00:03:14,480 --> 00:03:16,760 Speaker 1: the table and read your prepared marks on how you 56 00:03:16,800 --> 00:03:19,919 Speaker 1: felt about the economy and monetary policy and then say next, 57 00:03:19,960 --> 00:03:21,680 Speaker 1: and the next person would go on. And it really 58 00:03:21,720 --> 00:03:26,959 Speaker 1: tamped down open debate and discussion at those meetings. That said. Uh, 59 00:03:27,040 --> 00:03:29,760 Speaker 1: something that certainly Cherry Yelling stuck to when she was 60 00:03:31,320 --> 00:03:32,799 Speaker 1: ahead of the f O m C was that she 61 00:03:32,840 --> 00:03:37,120 Speaker 1: would have those conversations offline ahead of time before the 62 00:03:37,160 --> 00:03:40,840 Speaker 1: meeting by phone. Um so that those debates did not 63 00:03:40,920 --> 00:03:43,800 Speaker 1: take place when where the transcripts would pick them up. 64 00:03:44,160 --> 00:03:46,200 Speaker 1: Um So, I don't think it tamped it down completely. 65 00:03:46,280 --> 00:03:48,600 Speaker 1: But um yeah, much of it plays out on the 66 00:03:48,800 --> 00:03:51,560 Speaker 1: on the global stage as they're speaking publicly now whereas 67 00:03:51,600 --> 00:03:54,120 Speaker 1: it was never that way before. But but if you 68 00:03:54,160 --> 00:03:55,920 Speaker 1: look at the bo E, it's the Bank of England, 69 00:03:55,960 --> 00:03:58,040 Speaker 1: it's very different to what, of course, you know, how 70 00:03:58,040 --> 00:04:00,480 Speaker 1: the FED does it. It's um is there a right 71 00:04:00,560 --> 00:04:02,600 Speaker 1: or wrong way? And and does that go back to 72 00:04:02,640 --> 00:04:06,560 Speaker 1: just market functioning. If you have too many transparent and 73 00:04:06,760 --> 00:04:09,760 Speaker 1: you know, open debates in the public, do you have 74 00:04:09,760 --> 00:04:13,640 Speaker 1: a higher chance of the market miscommunicating on misunderstanding. Yes, 75 00:04:13,720 --> 00:04:16,320 Speaker 1: I think I think there is that that chance all right, 76 00:04:16,400 --> 00:04:19,560 Speaker 1: because you've got many voices. I remember the the common 77 00:04:19,600 --> 00:04:22,920 Speaker 1: complaint from clients of ours. After Bernanke took over the FED, 78 00:04:22,960 --> 00:04:25,839 Speaker 1: the first truly academic leader of the FED, and he 79 00:04:25,920 --> 00:04:29,040 Speaker 1: instilled his a blue sky thinking where everyone had a say, 80 00:04:29,080 --> 00:04:31,960 Speaker 1: and he encouraged everyone to speak publicly. You know that 81 00:04:32,120 --> 00:04:34,800 Speaker 1: certainly men, especially if I traveled outside of the US, 82 00:04:34,839 --> 00:04:36,800 Speaker 1: clients would say, who in the heck? Do I listen 83 00:04:36,839 --> 00:04:38,800 Speaker 1: to I used only listen to one man. Now they 84 00:04:41,080 --> 00:04:43,400 Speaker 1: let's listen to one man roller tape if you would. 85 00:04:43,480 --> 00:04:46,760 Speaker 1: Right now, here's the president, a central banker. My biggest 86 00:04:46,880 --> 00:04:51,360 Speaker 1: threat is the FED because the FED is raising rates 87 00:04:51,480 --> 00:04:54,800 Speaker 1: too fast and it's independent. So I don't speak to him. 88 00:04:54,839 --> 00:04:57,120 Speaker 1: But I'm not happy with what he's doing because it's 89 00:04:57,160 --> 00:05:00,800 Speaker 1: going to fist the president United States. Trish rig And 90 00:05:00,920 --> 00:05:02,839 Speaker 1: dashing out with their new show over at Fox. But 91 00:05:02,880 --> 00:05:05,080 Speaker 1: it's good to see that ell and there's the there's 92 00:05:05,120 --> 00:05:08,440 Speaker 1: the president right now threatening FED independence. Everybody agrees on 93 00:05:08,480 --> 00:05:10,800 Speaker 1: this as well. Let's back up to the call that 94 00:05:10,880 --> 00:05:12,960 Speaker 1: made you famous, which you have the courage to go 95 00:05:13,000 --> 00:05:16,440 Speaker 1: out and say no, it'll be slower. Bring that call 96 00:05:16,600 --> 00:05:19,279 Speaker 1: up to date, and what a FED call into two 97 00:05:19,320 --> 00:05:22,240 Speaker 1: thousand nineteen looks at. Do you still have a house 98 00:05:22,600 --> 00:05:26,000 Speaker 1: cautious call? Yeah, I think compared to consensus, we're still 99 00:05:26,760 --> 00:05:30,840 Speaker 1: on the more cautious side. Um. Absolutely no reason for 100 00:05:30,880 --> 00:05:34,000 Speaker 1: them to stop hiking right now, and they are completely 101 00:05:34,120 --> 00:05:37,960 Speaker 1: convicted around this next year. The butt is that going 102 00:05:38,000 --> 00:05:40,840 Speaker 1: in the next year, they're completely divided between do they 103 00:05:40,880 --> 00:05:43,479 Speaker 1: deliver two, three, or four hikes? And that's because the 104 00:05:43,560 --> 00:05:46,400 Speaker 1: risks have risen as we go into next year. Now, 105 00:05:46,400 --> 00:05:49,520 Speaker 1: they're upside risk of financial conditions stay easy, they're downside 106 00:05:49,640 --> 00:05:54,120 Speaker 1: risk of trade e M other international spillovers. We're talking 107 00:05:54,120 --> 00:05:57,719 Speaker 1: about bregsit today. UH. You know those are are very 108 00:05:57,760 --> 00:06:00,720 Speaker 1: real downside risk to the outlook as well. UH. And 109 00:06:00,800 --> 00:06:03,960 Speaker 1: so I think we should recognize that while the median 110 00:06:04,320 --> 00:06:07,520 Speaker 1: dot UH is at three hikes for next year, for 111 00:06:07,560 --> 00:06:10,160 Speaker 1: the f MC, it's it's not as hard dot as 112 00:06:10,200 --> 00:06:13,480 Speaker 1: I would call it. Right, They're completely divided. Uh. And 113 00:06:13,520 --> 00:06:15,280 Speaker 1: so I don't expect them to have any more clear 114 00:06:15,400 --> 00:06:17,800 Speaker 1: clarity by the December meeting on how many times they 115 00:06:17,839 --> 00:06:20,240 Speaker 1: should really hike next year. We think they will hike 116 00:06:20,279 --> 00:06:22,760 Speaker 1: twice through June. We think by the time they come 117 00:06:22,760 --> 00:06:26,040 Speaker 1: into that September meeting to debate whether they should hike 118 00:06:26,040 --> 00:06:28,920 Speaker 1: again or not, the shape of growth UH, if our 119 00:06:28,960 --> 00:06:32,239 Speaker 1: forecasts hold true, will show that the economy is slowing 120 00:06:32,279 --> 00:06:34,240 Speaker 1: back towards two percent. This is the other side of 121 00:06:34,279 --> 00:06:37,880 Speaker 1: fiscal stimulus when that stimulus fades, uh, and that that's 122 00:06:37,880 --> 00:06:39,960 Speaker 1: gonna be evidence that they must be around neutral. And 123 00:06:39,960 --> 00:06:42,279 Speaker 1: then enough of them will say let's pause here and 124 00:06:42,320 --> 00:06:44,839 Speaker 1: take a look around before deciding whether we need to 125 00:06:44,880 --> 00:06:47,360 Speaker 1: be restrictive. That's how we think it will play out. 126 00:06:47,400 --> 00:06:50,000 Speaker 1: That is less than what consensus is is thinking though 127 00:06:50,040 --> 00:06:53,800 Speaker 1: for hikes next year. Alright, thanks so much. Ellen sent there. 128 00:06:53,839 --> 00:06:59,839 Speaker 1: They're off. Morgan Stan joining us now the former Ambassador 129 00:07:00,120 --> 00:07:03,040 Speaker 1: of the United States to Israel, Martin Indick, who has 130 00:07:03,200 --> 00:07:07,600 Speaker 1: had an exceptionally productive career in foreign policy and service 131 00:07:08,040 --> 00:07:10,840 Speaker 1: to our National Security Council, working at Brookings and now 132 00:07:11,280 --> 00:07:15,240 Speaker 1: with a Council on Foreign Relations. Ambassador, we are thrilled 133 00:07:15,280 --> 00:07:19,120 Speaker 1: to have you with us today. What would you expect 134 00:07:19,400 --> 00:07:23,720 Speaker 1: Mr Urwan will do after Riad and after the Secretary's 135 00:07:23,880 --> 00:07:29,600 Speaker 1: visit to Anchor? Oh, what is next for Turkey? Welcome morning, Tom, 136 00:07:29,640 --> 00:07:31,680 Speaker 1: Thanks very much for having me on the program. U 137 00:07:33,000 --> 00:07:37,200 Speaker 1: Urdwan is in the bazaar and he has some important 138 00:07:37,200 --> 00:07:40,520 Speaker 1: good to sell. He's trickling out to the press. The 139 00:07:40,520 --> 00:07:44,560 Speaker 1: Wall Street Journal has details of morning gruesome details of 140 00:07:44,800 --> 00:07:48,840 Speaker 1: the audio recordings that are in the Turkish government's possession. 141 00:07:49,560 --> 00:07:53,000 Speaker 1: What is he looking for is anybody's guests. But but 142 00:07:53,200 --> 00:07:55,800 Speaker 1: you would know as well as I that the Turkish 143 00:07:55,840 --> 00:07:59,920 Speaker 1: lira has been struggling, that the Turkish economy is in trouble. 144 00:08:00,080 --> 00:08:05,080 Speaker 1: The Trump double the tariffs on Turkeys steel, and so 145 00:08:06,160 --> 00:08:09,160 Speaker 1: I think he's looking for relief in all of these 146 00:08:09,200 --> 00:08:15,160 Speaker 1: respects from some Saudi perhaps Saudi financial support, some relief 147 00:08:15,280 --> 00:08:18,480 Speaker 1: from Trump. After all, he released the evangelical pasta the 148 00:08:18,520 --> 00:08:22,360 Speaker 1: Trump was hoping for right before the midterm elections here, 149 00:08:23,040 --> 00:08:30,000 Speaker 1: so he's positioned himself very well to uh get some payoffs. Ambassador. 150 00:08:30,080 --> 00:08:31,720 Speaker 1: One of the great things we've seen here is the 151 00:08:31,840 --> 00:08:35,480 Speaker 1: use of sanctions. Jack Lewis with yesterday the former Secretary 152 00:08:35,480 --> 00:08:40,120 Speaker 1: of Treasury talking about the non efficacy of sanctions. What 153 00:08:40,200 --> 00:08:44,000 Speaker 1: does Martin Index think of the use of sanctions by 154 00:08:44,040 --> 00:08:49,439 Speaker 1: this administration or frankly by other nations as well, well? 155 00:08:49,880 --> 00:08:55,920 Speaker 1: Uh In, In general, sanctions have become more effective, uh 156 00:08:56,120 --> 00:09:01,280 Speaker 1: more recently because the Treasury, particularly under Jack lu was 157 00:09:01,400 --> 00:09:06,560 Speaker 1: quite quite effective in tightening the financial sanctions. Because the 158 00:09:06,640 --> 00:09:12,680 Speaker 1: United States dominates the financial factor, particularly issues entertainments, it 159 00:09:12,840 --> 00:09:18,600 Speaker 1: can hurt businesses that that ignore American sanctions. And so 160 00:09:18,960 --> 00:09:22,640 Speaker 1: I think they've become effect more effective over time. Now 161 00:09:22,679 --> 00:09:25,360 Speaker 1: we're going to have an early test case of that 162 00:09:25,480 --> 00:09:31,000 Speaker 1: proposition on November four when the United States imposes reimposes 163 00:09:31,040 --> 00:09:36,040 Speaker 1: oil sanctions on Iran, and we will see how many 164 00:09:36,120 --> 00:09:40,920 Speaker 1: countries decide to find alternative sources, and then the question 165 00:09:40,960 --> 00:09:44,600 Speaker 1: of courses where they can find alternative sources of reasonable prices. 166 00:09:44,920 --> 00:09:47,280 Speaker 1: The big ones to watch China and India because they're 167 00:09:47,320 --> 00:09:53,920 Speaker 1: the biggest importers of oil from Iran. But this crisis 168 00:09:53,960 --> 00:09:58,600 Speaker 1: with Saudi Arabia comes at a moment when the efficacy 169 00:09:59,160 --> 00:10:03,439 Speaker 1: are those actions will depend on Saudi Arabia making up 170 00:10:03,480 --> 00:10:07,520 Speaker 1: the shortage in supply that comes from taking Iranian oil 171 00:10:07,559 --> 00:10:11,320 Speaker 1: off the markets. If the Assaudis don't do that, then 172 00:10:11,360 --> 00:10:14,400 Speaker 1: the price of war is going to spike, not only 173 00:10:14,480 --> 00:10:19,320 Speaker 1: giving the Saudis a revenue win for but also helping 174 00:10:19,360 --> 00:10:22,400 Speaker 1: the Iranians because they'll be able to discount their royal 175 00:10:22,520 --> 00:10:25,800 Speaker 1: significantly and still be able to sell it in those circumstances. 176 00:10:25,800 --> 00:10:29,679 Speaker 1: So Martin, essentially the approach towards Iran does it complicate 177 00:10:29,800 --> 00:10:33,160 Speaker 1: the United States ability to confront Saudi Arabia, even if 178 00:10:33,160 --> 00:10:38,320 Speaker 1: they wanted to completely. It's it's the thing that we 179 00:10:38,520 --> 00:10:41,520 Speaker 1: will always need to take into account here is that 180 00:10:41,679 --> 00:10:45,720 Speaker 1: Saudi Arabia, together with Israel, are the two pillars of 181 00:10:46,200 --> 00:10:52,880 Speaker 1: Trump's anti Iranian policy. They are critical partners in this 182 00:10:53,000 --> 00:10:58,000 Speaker 1: effort um not normally partners, but Saudi Arabia and Israel 183 00:10:58,080 --> 00:11:04,040 Speaker 1: have a common concern about Iranian hegemonic efforts in the region. 184 00:11:04,200 --> 00:11:08,520 Speaker 1: So right at the moment when Trump is trying to 185 00:11:08,960 --> 00:11:14,120 Speaker 1: impose maximum pressure on the Iranians, Saudi Arabia has gone wobbly, 186 00:11:15,040 --> 00:11:19,280 Speaker 1: and there's likely to be a continuing kind of crisis 187 00:11:19,360 --> 00:11:22,680 Speaker 1: between the United States and Saudi Arabia, not because of Trump, 188 00:11:22,720 --> 00:11:26,440 Speaker 1: but because the Senator of the United States is really 189 00:11:26,559 --> 00:11:31,000 Speaker 1: upset with what the Crown Tranter Saudi Arabia is alleged 190 00:11:31,040 --> 00:11:35,760 Speaker 1: to have done with this American resident journalist. And and 191 00:11:35,840 --> 00:11:41,600 Speaker 1: so this is a train which is heading for a 192 00:11:41,679 --> 00:11:44,560 Speaker 1: train crash, and it's very hard for Trump and Secretary 193 00:11:44,559 --> 00:11:46,640 Speaker 1: of State Pompeo to put the brakes on it. So 194 00:11:46,679 --> 00:11:48,720 Speaker 1: one beast, I would love it if for our audience 195 00:11:48,760 --> 00:11:52,040 Speaker 1: you could lift the lid on how international diplomacy works 196 00:11:52,160 --> 00:11:54,240 Speaker 1: at a time like this. All we have to go 197 00:11:54,280 --> 00:11:56,679 Speaker 1: on right now is the official line from the Secretary 198 00:11:56,720 --> 00:12:00,559 Speaker 1: of State Mr. Pompeo, and anything that he says releases 199 00:12:00,600 --> 00:12:04,199 Speaker 1: about conversations with Saudi Arabia. What's happening in the background 200 00:12:04,600 --> 00:12:07,640 Speaker 1: right now with the officials from Turkey, Saudi Arabia, the 201 00:12:07,679 --> 00:12:09,559 Speaker 1: United States tell us what we don't know. How does 202 00:12:09,600 --> 00:12:15,080 Speaker 1: this work the industry of diplomacy right, So, so what 203 00:12:15,200 --> 00:12:19,120 Speaker 1: you saw was the quick dispatch of Pompeio first of 204 00:12:19,160 --> 00:12:23,199 Speaker 1: all to read and then to anchor. That tells us 205 00:12:24,520 --> 00:12:27,960 Speaker 1: that he is trying to put this crisis back in 206 00:12:28,000 --> 00:12:32,640 Speaker 1: the box by working out understandings with the Crown Prince 207 00:12:32,679 --> 00:12:36,600 Speaker 1: of Saudi Arabia and the President of Turkey. That's the 208 00:12:36,720 --> 00:12:41,200 Speaker 1: heart of his mission. It is not made easier as 209 00:12:41,320 --> 00:12:45,040 Speaker 1: usual by by President Trump, who has no discipline in 210 00:12:45,080 --> 00:12:48,880 Speaker 1: this matter. He should be off the tweet waves, that 211 00:12:48,920 --> 00:12:53,120 Speaker 1: he should be off the airways so that Pompeo can 212 00:12:53,160 --> 00:12:56,680 Speaker 1: try to do his job and try to put together 213 00:12:56,720 --> 00:13:00,040 Speaker 1: what he calls for, which is publicly which is a 214 00:13:00,200 --> 00:13:04,040 Speaker 1: thorough investigation on the one hand, and the Saudis have 215 00:13:04,040 --> 00:13:06,160 Speaker 1: committed to that, and on the other hand, to try 216 00:13:06,160 --> 00:13:10,120 Speaker 1: and get the Turks to stop leaking to the press, 217 00:13:10,200 --> 00:13:14,480 Speaker 1: which undermines the whole effort. Mr Ambassador, you have stated 218 00:13:14,559 --> 00:13:18,000 Speaker 1: that this is the first real crisis that Mr Trump faces. 219 00:13:18,960 --> 00:13:21,920 Speaker 1: What does his team need to do to explain to 220 00:13:22,000 --> 00:13:27,320 Speaker 1: him this is the real, first crisis that he faces. Well, 221 00:13:27,360 --> 00:13:30,680 Speaker 1: I think they need to walk him through the way 222 00:13:30,679 --> 00:13:35,240 Speaker 1: in which this can unravel his whole strategy towards Iran 223 00:13:36,160 --> 00:13:41,079 Speaker 1: and as well as cause cause turmoil in the oil markets, 224 00:13:42,480 --> 00:13:46,200 Speaker 1: especially if if there's a challenge to the Crown Prince 225 00:13:46,240 --> 00:13:50,679 Speaker 1: of Saudi Arabia's leadership from other royals in the family 226 00:13:50,720 --> 00:13:54,720 Speaker 1: in Saudi Arabia. They need to make him understand the 227 00:13:54,840 --> 00:13:59,480 Speaker 1: gravity of the situation and therefore the importance of discipline, 228 00:14:00,080 --> 00:14:05,800 Speaker 1: thing that he seems incapable of holding. Two because in 229 00:14:05,840 --> 00:14:10,320 Speaker 1: a crisis, every message has to be carefully controlled. This 230 00:14:10,440 --> 00:14:15,520 Speaker 1: is not about a mid Ton Elections are about getting 231 00:14:15,880 --> 00:14:22,440 Speaker 1: a judge confront. It's it's about uh international consequences in 232 00:14:22,480 --> 00:14:25,640 Speaker 1: which things can spin out of control quite easily. Ambassador, 233 00:14:25,760 --> 00:14:27,680 Speaker 1: thank you so much. Martin Indek with the Council and 234 00:14:27,760 --> 00:14:35,160 Speaker 1: Foreign Relations, the former United States Ambassador to Israel. I'm 235 00:14:35,200 --> 00:14:37,880 Speaker 1: so excited our guest. I'm gonna let you bring him 236 00:14:37,880 --> 00:14:40,520 Speaker 1: in because he's incredible with finance. He has one of 237 00:14:40,520 --> 00:14:44,280 Speaker 1: the ten greatest tweets ever on uber rides It's ever 238 00:14:44,280 --> 00:14:47,400 Speaker 1: in New York City. Was clearly drinking whiskey and refused 239 00:14:47,480 --> 00:14:49,720 Speaker 1: to share. He's the only one who gets to drown 240 00:14:49,800 --> 00:14:52,560 Speaker 1: out his depression on a Wednesday morning. That's one of 241 00:14:52,560 --> 00:14:57,720 Speaker 1: the ten best tweets ever. Somebody keeps track of this stuff. Interestingly, 242 00:14:59,040 --> 00:15:01,640 Speaker 1: I don't rank him, No, the article ranked him for him. 243 00:15:01,840 --> 00:15:04,760 Speaker 1: There's some hilarious ones. Joe Nevington joins the snap blombog 244 00:15:04,800 --> 00:15:07,720 Speaker 1: intelligence credit and strategy analysts. Do you have a word? 245 00:15:07,760 --> 00:15:11,800 Speaker 1: Super nightmare? Now everything is always pleasant and happy in 246 00:15:11,840 --> 00:15:19,240 Speaker 1: an ubercar. Let's talk about it. Come to market. Tell 247 00:15:19,280 --> 00:15:21,360 Speaker 1: me what they would come into market with, what they 248 00:15:21,440 --> 00:15:25,040 Speaker 1: upsize it to, and just how big the order book is? Sure, Yeah, 249 00:15:25,040 --> 00:15:27,040 Speaker 1: I know it's a big it's a big deal. They came. 250 00:15:27,400 --> 00:15:32,440 Speaker 1: They're issuing two bonds, a five year and an eight year. 251 00:15:32,840 --> 00:15:35,120 Speaker 1: Looks like the five years and being priced at seven 252 00:15:35,120 --> 00:15:39,360 Speaker 1: and a half percent and the eight year at eight percent, 253 00:15:39,800 --> 00:15:42,760 Speaker 1: and that to me looks uh. Particularly the eight year 254 00:15:42,800 --> 00:15:46,960 Speaker 1: looks tight relative topic year. That's like high yield junk 255 00:15:47,040 --> 00:15:49,560 Speaker 1: junk junk, right, it is junk junk junk. It's it's 256 00:15:49,600 --> 00:15:53,480 Speaker 1: it's expected to get junk junk junk ratings B minus 257 00:15:53,560 --> 00:15:55,760 Speaker 1: and be three at Moody's. What does that mean to 258 00:15:55,840 --> 00:15:58,480 Speaker 1: the two mere mortals like me that don't memorize are 259 00:15:58,840 --> 00:16:04,360 Speaker 1: below triple A. Sure, it means that junk. It means 260 00:16:04,400 --> 00:16:09,640 Speaker 1: that it's one notch slightly higher than the triple C category, 261 00:16:09,840 --> 00:16:12,080 Speaker 1: which is viewed as having a one in three chance 262 00:16:12,160 --> 00:16:16,000 Speaker 1: of bank bankruptcy within a year. Let me stop your folks. 263 00:16:16,000 --> 00:16:19,120 Speaker 1: What you just heard from Mr Levinson is so important, John, 264 00:16:19,760 --> 00:16:24,360 Speaker 1: Uber is rated one notch above triple C, and yet 265 00:16:24,400 --> 00:16:27,520 Speaker 1: it's the greatest company since time began. We have very 266 00:16:27,760 --> 00:16:31,080 Speaker 1: believe I've never heard this. But what I think is 267 00:16:31,120 --> 00:16:33,120 Speaker 1: interesting about this if we say this from Netflix, and 268 00:16:33,160 --> 00:16:35,520 Speaker 1: we saw this from Testa last year as well, you 269 00:16:35,560 --> 00:16:38,880 Speaker 1: can have the attractiveness of the equity somehow reflected in 270 00:16:38,920 --> 00:16:41,280 Speaker 1: the debt, which makes no sense because the upside is 271 00:16:41,320 --> 00:16:42,960 Speaker 1: going to be in the equity and not in the debt. 272 00:16:43,200 --> 00:16:46,040 Speaker 1: But for some reason, the attractiveness of taking a slice 273 00:16:46,040 --> 00:16:49,240 Speaker 1: of equity turns up in the bond market. Why does 274 00:16:49,280 --> 00:16:52,960 Speaker 1: that happen? John? Why is that happening? It happens all 275 00:16:52,960 --> 00:16:55,160 Speaker 1: the time, John. I you know, like as a young 276 00:16:55,240 --> 00:16:57,920 Speaker 1: credit analyst years and years ago. You know, if we 277 00:16:57,960 --> 00:17:00,000 Speaker 1: go back like twenty years, one of the first job 278 00:17:00,160 --> 00:17:02,800 Speaker 1: that I looked at was long term capital management, and 279 00:17:02,840 --> 00:17:05,520 Speaker 1: it was the same exact worked out that worked out 280 00:17:05,560 --> 00:17:07,760 Speaker 1: really well. Luckily for us, we weren't involved in it, 281 00:17:08,160 --> 00:17:11,000 Speaker 1: but it's the same thing. People see the growth and 282 00:17:11,080 --> 00:17:13,960 Speaker 1: the opportunity and they failed to look at the risks, 283 00:17:14,000 --> 00:17:15,879 Speaker 1: and that's what credit is supposed to be about. So 284 00:17:15,960 --> 00:17:18,640 Speaker 1: quality is really interesting to me right now. High yield 285 00:17:18,720 --> 00:17:19,960 Speaker 1: and I don't know if you saw this this morning, 286 00:17:19,960 --> 00:17:23,760 Speaker 1: Tom JP Morgan pointing out junk bond issuance is on 287 00:17:23,840 --> 00:17:26,399 Speaker 1: course to be the lowest this year since two thousand 288 00:17:26,440 --> 00:17:29,600 Speaker 1: and nine. It's basically going to come in a hundred 289 00:17:29,640 --> 00:17:31,880 Speaker 1: and fifty five billion dollars yet to date so far, 290 00:17:32,000 --> 00:17:34,639 Speaker 1: and that's really important. Supply shortage in this space and 291 00:17:34,760 --> 00:17:39,399 Speaker 1: the seven percent paper, Where do they pay that interest coupon? 292 00:17:39,480 --> 00:17:41,919 Speaker 1: When you clip your Uber coupon in the back of 293 00:17:41,960 --> 00:17:45,080 Speaker 1: your lift vehicle and mail off the coupon or take 294 00:17:45,119 --> 00:17:48,080 Speaker 1: it down to the broker, it just comes out of 295 00:17:48,600 --> 00:17:51,600 Speaker 1: cash on the balance sheet, right it does, because if 296 00:17:51,600 --> 00:17:54,240 Speaker 1: you look at the data that the Wall Street Journal has, 297 00:17:54,240 --> 00:17:58,080 Speaker 1: they're saying that in the company generates significantly negative even 298 00:17:58,080 --> 00:18:01,400 Speaker 1: of margins, so it's not generating new profit, so it's 299 00:18:01,440 --> 00:18:05,360 Speaker 1: just draining the cash that is buying this beautiful. I mean, 300 00:18:05,400 --> 00:18:11,600 Speaker 1: are long only institutional retirement you know widow portfolios buying 301 00:18:11,840 --> 00:18:15,359 Speaker 1: Uber at seven percent coupon? Well that it is a 302 00:18:15,359 --> 00:18:18,320 Speaker 1: private placement, so I hope it's not because there's no 303 00:18:18,400 --> 00:18:20,880 Speaker 1: liquidity in the bonds. Once you have a private placement, 304 00:18:20,920 --> 00:18:24,040 Speaker 1: it becomes a much tougher issue to to trade, which 305 00:18:24,040 --> 00:18:28,200 Speaker 1: actually makes things like Tesla, which the bond is fifteen 306 00:18:28,200 --> 00:18:32,200 Speaker 1: points below its initial pricing, UH, much more interesting, which 307 00:18:32,240 --> 00:18:35,399 Speaker 1: also yields the same yield as the as the Uber bond. 308 00:18:35,600 --> 00:18:37,880 Speaker 1: What does Suber look like a night? Yes? And would 309 00:18:37,920 --> 00:18:39,480 Speaker 1: you be willing to hold a night yet? Now through 310 00:18:39,520 --> 00:18:42,919 Speaker 1: to maturity? But with ye Seriously, the point here, Joel, 311 00:18:43,200 --> 00:18:46,080 Speaker 1: this is a great conversation is it's a private transaction. 312 00:18:46,800 --> 00:18:48,920 Speaker 1: That's the really. I mean, how many people will buy 313 00:18:48,960 --> 00:18:52,680 Speaker 1: this piece? Is it like for people for sovereign wealth funds? Well, 314 00:18:52,720 --> 00:18:56,439 Speaker 1: it's oversubscribed, so somebody's buying it. I just you know, again, 315 00:18:57,520 --> 00:19:01,040 Speaker 1: if I go back to my history, UH, portfolio manager 316 00:19:01,119 --> 00:19:02,880 Speaker 1: that I worked with said, if you're not getting paid 317 00:19:02,880 --> 00:19:04,480 Speaker 1: to take the risk, why are you doing it? And 318 00:19:04,520 --> 00:19:06,879 Speaker 1: it feels like there's a lot of risks here in 319 00:19:07,000 --> 00:19:11,480 Speaker 1: terms of lack of disclosure, lack of liquidity, UM, lack 320 00:19:11,520 --> 00:19:14,000 Speaker 1: of cash flow, and they've the company has said that 321 00:19:14,000 --> 00:19:16,439 Speaker 1: it's not gonna be profitable for three years. Critically, in 322 00:19:16,440 --> 00:19:19,679 Speaker 1: the bond perspectives, do they see the financials that I 323 00:19:19,680 --> 00:19:21,680 Speaker 1: don't know? Because it's not it's not, we don't know. 324 00:19:23,119 --> 00:19:25,280 Speaker 1: That's that's one of the reasons I think you take 325 00:19:25,440 --> 00:19:28,520 Speaker 1: the you take the bond offering private because it's a 326 00:19:28,520 --> 00:19:31,280 Speaker 1: a limited pool of investors, and I guess the finances 327 00:19:31,640 --> 00:19:34,320 Speaker 1: are in a limited set of hands Joe as well. 328 00:19:34,359 --> 00:19:38,080 Speaker 1: In theory that will be disclosed next year, right because 329 00:19:38,520 --> 00:19:42,199 Speaker 1: Uber has to go public next year or otherwise. I 330 00:19:42,240 --> 00:19:45,119 Speaker 1: believe a bunch of investors on the equity side have 331 00:19:45,280 --> 00:19:47,920 Speaker 1: the option of cashing out on from the soft bank 332 00:19:48,240 --> 00:19:50,919 Speaker 1: venture fund. Interesting. So here's the other interesting thing for me, 333 00:19:51,359 --> 00:19:55,080 Speaker 1: walk us through covenant light and how much of an 334 00:19:55,080 --> 00:19:58,320 Speaker 1: issue this is in fixed income right now. I'm talking 335 00:19:58,359 --> 00:20:00,639 Speaker 1: about the quality of the debt that come to the market, 336 00:20:00,720 --> 00:20:03,239 Speaker 1: the covenants that used to be attached to it and 337 00:20:03,280 --> 00:20:06,000 Speaker 1: are no longer attached to it. Sure well, covenant are 338 00:20:06,200 --> 00:20:10,760 Speaker 1: are never an issue until there's an issue, And unfortunately 339 00:20:10,840 --> 00:20:14,080 Speaker 1: that's the way the market works. And what happens, is 340 00:20:14,320 --> 00:20:18,600 Speaker 1: John Tucker, which marriage was he describing? There, take your pick, 341 00:20:18,960 --> 00:20:24,879 Speaker 1: you got six? Did you join covenance to like the 342 00:20:24,880 --> 00:20:30,600 Speaker 1: pre nup? Like the pre nups if the marriage. If 343 00:20:30,640 --> 00:20:33,399 Speaker 1: the marriage doesn't go well, you can basically say you 344 00:20:33,440 --> 00:20:35,960 Speaker 1: can have one of the covenants can be say the house. 345 00:20:36,520 --> 00:20:38,639 Speaker 1: Or if the marriage doesn't go so well, you can 346 00:20:38,720 --> 00:20:42,360 Speaker 1: basically say to them stop spending in the shops. When 347 00:20:42,359 --> 00:20:45,000 Speaker 1: you start to get rid of those covenants, the agreement 348 00:20:45,040 --> 00:20:49,720 Speaker 1: you have with the issue a little bit light. The 349 00:20:49,720 --> 00:20:51,920 Speaker 1: only thing I would say, John, is with my covenants 350 00:20:51,960 --> 00:20:54,720 Speaker 1: and I've been married for fifteen years, they never get amended, 351 00:20:55,720 --> 00:20:59,760 Speaker 1: even even pretty tough covenant um. But you know the 352 00:21:00,000 --> 00:21:03,640 Speaker 1: problem is with the with deals that are getting done 353 00:21:03,680 --> 00:21:06,600 Speaker 1: today is that it's being done at a topy kind 354 00:21:06,640 --> 00:21:09,560 Speaker 1: of part of the cycle, and so they're being done 355 00:21:09,800 --> 00:21:13,199 Speaker 1: with light covenants, meaning a lot of room and capacity. 356 00:21:13,720 --> 00:21:16,600 Speaker 1: And when the market turns down, those are the bond 357 00:21:16,600 --> 00:21:19,320 Speaker 1: holders are gonna get that the hardest. First, is there 358 00:21:19,400 --> 00:21:21,960 Speaker 1: a bet with a a private placement that they go 359 00:21:22,040 --> 00:21:24,119 Speaker 1: to a premium if they come at par one hundred, 360 00:21:24,200 --> 00:21:27,280 Speaker 1: that they trade positive or in a private placement, is 361 00:21:27,280 --> 00:21:31,000 Speaker 1: there even price discovery one week, one quarter, one year on. 362 00:21:31,480 --> 00:21:33,640 Speaker 1: It's pretty limited. Um. You know, when you have these 363 00:21:33,720 --> 00:21:37,160 Speaker 1: darker markets, like a structured finance or a private placement, 364 00:21:37,440 --> 00:21:40,439 Speaker 1: you wind up using third party data. Now, luckily here 365 00:21:40,480 --> 00:21:42,280 Speaker 1: at Bloomberg we can use a b val curve or 366 00:21:42,280 --> 00:21:45,080 Speaker 1: something to price and saying this is what you see 367 00:21:45,080 --> 00:21:50,160 Speaker 1: how he gets the product place. Michael Bard doesn't do that. 368 00:21:50,440 --> 00:21:53,040 Speaker 1: Did you do a b vail curve today? No? I 369 00:21:53,080 --> 00:21:56,840 Speaker 1: did not. What is a b vail curve? Please be sure. 370 00:21:56,960 --> 00:21:59,920 Speaker 1: We have curves here at Bloomberg which can show you 371 00:22:00,200 --> 00:22:03,080 Speaker 1: add different readings what a bun should be praised at 372 00:22:03,800 --> 00:22:06,359 Speaker 1: um and so you could use something like that to 373 00:22:06,440 --> 00:22:08,520 Speaker 1: help you discover it. But you really never know because 374 00:22:08,560 --> 00:22:10,720 Speaker 1: there's not a public market where you could just go 375 00:22:10,760 --> 00:22:12,840 Speaker 1: and trade. Can you come back and be the official 376 00:22:12,880 --> 00:22:15,120 Speaker 1: surveillance marriage counselor? I mean the idea that you've been 377 00:22:15,119 --> 00:22:18,240 Speaker 1: married fifteen years is wonderfu We say, good morning, Mrs Levinson. 378 00:22:18,680 --> 00:22:20,639 Speaker 1: It's really cool. I think that's what my career has 379 00:22:20,680 --> 00:22:23,960 Speaker 1: been meant for. Okay, very good Our marriage counselor Joel 380 00:22:24,000 --> 00:22:29,000 Speaker 1: Levinson with us this morning. Busy day for Primister May 381 00:22:29,080 --> 00:22:31,280 Speaker 1: and Brussels today she'll be meeting with the EU Council 382 00:22:31,359 --> 00:22:34,399 Speaker 1: President Donald Tusk. Then later this evening she'll addressed the 383 00:22:34,400 --> 00:22:38,280 Speaker 1: blocks twenty seven leaders, who will then convene over dinner 384 00:22:38,640 --> 00:22:43,480 Speaker 1: without her. Honestly, the way politics work in Brussels. Don't 385 00:22:43,520 --> 00:22:45,760 Speaker 1: you love that? And our guests will explain that. Yeah, 386 00:22:45,800 --> 00:22:48,280 Speaker 1: our guest is going to explain that. Now, the thoughtful 387 00:22:48,359 --> 00:22:52,719 Speaker 1: and always outspoken Wolfgang mun Show. You wrote intelligence President Wolfgang, 388 00:22:53,080 --> 00:22:55,240 Speaker 1: what is going on in Europe today? And how do 389 00:22:55,280 --> 00:22:59,639 Speaker 1: you explain this process to people? Yeah, it's hard to 390 00:22:59,640 --> 00:23:03,560 Speaker 1: explain European processes through people in in general. The reason 391 00:23:03,640 --> 00:23:06,480 Speaker 1: the reason they're having dinner among themselves, it is because 392 00:23:06,520 --> 00:23:11,360 Speaker 1: they need to they need to agree their own negotiating position. Now, 393 00:23:11,480 --> 00:23:14,080 Speaker 1: we're not going to get any big breakthroughs on Brexit. 394 00:23:14,880 --> 00:23:17,760 Speaker 1: The whole thing is stalled, but there is a is 395 00:23:17,800 --> 00:23:21,000 Speaker 1: a ray of hope and at least they want to 396 00:23:21,000 --> 00:23:23,920 Speaker 1: avoid this kind of disaster they had at the most 397 00:23:23,960 --> 00:23:27,440 Speaker 1: recent summit in in in the Austrian city of Walsburg, 398 00:23:27,920 --> 00:23:32,760 Speaker 1: where everyone left went home angry and and and resentful 399 00:23:32,800 --> 00:23:36,000 Speaker 1: of each other. So so the purpose of this meeting 400 00:23:36,080 --> 00:23:39,080 Speaker 1: is simply to get it over with and have another 401 00:23:39,119 --> 00:23:43,040 Speaker 1: one in November and December. I think there's a possibility 402 00:23:43,080 --> 00:23:46,479 Speaker 1: that they might agree a deal in December. But the 403 00:23:46,520 --> 00:23:49,360 Speaker 1: main purpose today is for everyone really to shut up 404 00:23:49,600 --> 00:23:52,800 Speaker 1: who shapes the policy of the because it seems to 405 00:23:52,800 --> 00:23:55,800 Speaker 1: me we have a good cop in Chancellor Merkell and 406 00:23:55,880 --> 00:23:59,160 Speaker 1: a bad cop in Mr Macron. How do they reconcile 407 00:23:59,160 --> 00:24:04,280 Speaker 1: their differences with the seven um In the end, my 408 00:24:04,280 --> 00:24:08,000 Speaker 1: my hunches that meant the Marcro position will prevail because 409 00:24:08,080 --> 00:24:11,439 Speaker 1: it isn't It isn't fundamentally a German position. It is 410 00:24:11,480 --> 00:24:14,080 Speaker 1: also German position in Germany is a massive exporter, It 411 00:24:14,119 --> 00:24:17,000 Speaker 1: has a trade circlus with the UK of fifty billion 412 00:24:17,040 --> 00:24:20,479 Speaker 1: a year. Hundreds of thousands of jobs would be at 413 00:24:20,520 --> 00:24:24,080 Speaker 1: stake if the UK were to drop out of the 414 00:24:24,119 --> 00:24:27,960 Speaker 1: EU without a deal. Um people are not making enough 415 00:24:28,000 --> 00:24:30,640 Speaker 1: of this. This is a really important factor that drives 416 00:24:30,680 --> 00:24:32,760 Speaker 1: the German position, but also the Dutch position and the 417 00:24:32,760 --> 00:24:36,760 Speaker 1: position of the Nordic Member states. France has different interests, 418 00:24:37,840 --> 00:24:40,439 Speaker 1: but but but a no deal Brexit would be an 419 00:24:40,480 --> 00:24:44,119 Speaker 1: absolute disaster for Ireland and the EU. Ultimately, you know 420 00:24:44,359 --> 00:24:47,000 Speaker 1: speaks here with the majority voice. Mccona has no no 421 00:24:47,200 --> 00:24:50,840 Speaker 1: veto on this and while France and Germany want to 422 00:24:50,880 --> 00:24:53,680 Speaker 1: do you know, act together, there's no no, no, no 423 00:24:53,720 --> 00:24:57,320 Speaker 1: need at this stage for a device for a division um. 424 00:24:57,920 --> 00:25:00,640 Speaker 1: There is a clear, a clear indication that they will compromise. 425 00:25:00,720 --> 00:25:04,560 Speaker 1: And this whole readiness to compromise it's new. That wasn't 426 00:25:04,560 --> 00:25:07,200 Speaker 1: there a month ago when they basically indicated they would 427 00:25:07,240 --> 00:25:09,119 Speaker 1: now have saying about you know, we're going to extend 428 00:25:09,119 --> 00:25:12,600 Speaker 1: the transitional period. Now they won't compromise on the Irish PACTO. 429 00:25:12,680 --> 00:25:14,399 Speaker 1: There will be an Irish pact stop. They can't just 430 00:25:14,520 --> 00:25:17,679 Speaker 1: say or forget about this, but you know there will be, 431 00:25:17,760 --> 00:25:19,640 Speaker 1: there will be, there will they will at least make 432 00:25:19,640 --> 00:25:21,840 Speaker 1: an effort to make it possible for the British to 433 00:25:21,920 --> 00:25:25,000 Speaker 1: say with a straight face, this is a reasonably good deal. 434 00:25:27,240 --> 00:25:30,439 Speaker 1: You invented a huge part of business journalism with your 435 00:25:30,480 --> 00:25:33,280 Speaker 1: work with the Financial Time stots Land. For years I 436 00:25:33,280 --> 00:25:36,119 Speaker 1: still lament the idea of them ceasing publication. I believe 437 00:25:36,160 --> 00:25:39,040 Speaker 1: it was two thousand twelve. You are one of our 438 00:25:39,080 --> 00:25:42,800 Speaker 1: great experts on your Germany, your thoughts on the Verian 439 00:25:42,880 --> 00:25:46,919 Speaker 1: election where I observed a piece of Germany going to 440 00:25:47,000 --> 00:25:49,679 Speaker 1: the far right. You know a lot of other people 441 00:25:49,800 --> 00:25:52,119 Speaker 1: and an uproar going to the far left or to 442 00:25:52,160 --> 00:25:57,440 Speaker 1: the green left. Is it a barbelled Germany. It's getting there, 443 00:25:57,640 --> 00:25:59,600 Speaker 1: It's it's definitely getting there. But if you look at 444 00:25:59,640 --> 00:26:03,280 Speaker 1: the extra number of voters, the CSU, which is the 445 00:26:03,320 --> 00:26:07,439 Speaker 1: party that has been governing Bavaria pretty much forever um 446 00:26:07,560 --> 00:26:10,480 Speaker 1: the CDs, you didn't lose that many votes. It was 447 00:26:10,560 --> 00:26:13,119 Speaker 1: not a great result that the percentage was down by 448 00:26:13,160 --> 00:26:16,840 Speaker 1: about ten but there were there were at about forty 449 00:26:16,920 --> 00:26:19,760 Speaker 1: seven and they're now at at about thirty seven percent. 450 00:26:20,480 --> 00:26:23,359 Speaker 1: Not great in terms of you know, what they had 451 00:26:23,400 --> 00:26:25,960 Speaker 1: five years ago, but they hang on to most of 452 00:26:26,000 --> 00:26:28,560 Speaker 1: their voters. The whole participation in the in the election 453 00:26:28,600 --> 00:26:31,960 Speaker 1: went up quite a lot. They hang on to most 454 00:26:32,000 --> 00:26:35,560 Speaker 1: of their voters. The party that really lost there were 455 00:26:35,560 --> 00:26:38,080 Speaker 1: the Social Democrats. Now they used to be the main 456 00:26:38,119 --> 00:26:41,080 Speaker 1: opposition party. Now they're down to nine percent of the votes. 457 00:26:41,359 --> 00:26:43,959 Speaker 1: They kind of collapse, and the Social Democrats also collapsed 458 00:26:43,960 --> 00:26:47,400 Speaker 1: in the Netherlands and other European Italy, in other European countries. 459 00:26:47,760 --> 00:26:50,359 Speaker 1: That's pretty much the main story of that. And you know, 460 00:26:50,400 --> 00:26:53,040 Speaker 1: if you look at the combined vote of the left, 461 00:26:53,440 --> 00:26:55,720 Speaker 1: the three parties of the left, they haven't changed. It's 462 00:26:55,760 --> 00:26:59,840 Speaker 1: just that the Democrats are collapsing and the Koreans are gaining. 463 00:27:00,280 --> 00:27:03,040 Speaker 1: That's been the main, the main effect, and interesting, the 464 00:27:03,080 --> 00:27:05,359 Speaker 1: awesome Bavaria. You have the a f D, which is 465 00:27:05,400 --> 00:27:09,560 Speaker 1: the far right party, a very far right party with 466 00:27:09,600 --> 00:27:12,919 Speaker 1: some some real fascist leanings. They got about just a 467 00:27:12,920 --> 00:27:15,440 Speaker 1: little over ten percent, and they're not as strong there 468 00:27:15,440 --> 00:27:19,160 Speaker 1: as they are Space Wolf. You know, we're out of time. 469 00:27:19,359 --> 00:27:21,639 Speaker 1: John Farrell's living. We're out of time because this is 470 00:27:21,680 --> 00:27:27,720 Speaker 1: a spirit discussion. One word answer, please, who lasts longer? 471 00:27:28,040 --> 00:27:34,959 Speaker 1: Prime Minister, County or Chancellor Mercle. I would think Quanti 472 00:27:35,000 --> 00:27:40,160 Speaker 1: would last longer. That's amazing, Wolf cambo Chow, you're intelligent politics. 473 00:27:40,160 --> 00:27:42,040 Speaker 1: We need to get him back on that writing for 474 00:27:42,080 --> 00:27:44,040 Speaker 1: the Financial Times and of course a lot of other 475 00:27:44,680 --> 00:27:49,439 Speaker 1: important duties from Germany to London, Wolfgang Man Show. Thanks 476 00:27:49,480 --> 00:27:53,720 Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen 477 00:27:53,960 --> 00:27:59,280 Speaker 1: to interviews on Apple, podcast, SoundCloud, or whichever podcast platform 478 00:27:59,400 --> 00:28:03,680 Speaker 1: you prefer. I'm on Twitter at Tom Keene before the podcast. 479 00:28:03,760 --> 00:28:07,240 Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio