WEBVTT - Surveillance: Democratic Debate with Howard Dean 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.480 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:26.960 Bloomberg dot Com, and of course, on the Bloomberg We 0:00:26.960 --> 0:00:30.440 tend to politics. Now that debates in Nevada really was 0:00:30.760 --> 0:00:34.840 fine night in Las Vegas. Mike Bloomberg owns more wealth 0:00:35.240 --> 0:00:39.280 from the bottom a hundred and twenty five million Americans, 0:00:39.320 --> 0:00:44.640 A billionaire who calls women fat broads and horse faced lesbians. 0:00:44.760 --> 0:00:47.559 He has not managed his city very very well when 0:00:47.560 --> 0:00:50.120 he was there one candidate who wants to burn this 0:00:50.200 --> 0:00:53.279 party down and another candidate who wants to buy this 0:00:53.360 --> 0:00:56.880 party out. The campaign memo from mayor. Bloomberg said this 0:00:56.960 --> 0:01:00.560 morning that the only way that we get a nominee 0:01:00.800 --> 0:01:03.360 is if we step aside for him. I'm a New Yorker. 0:01:03.680 --> 0:01:06.600 I know how to take on an arrogant khan Man 0:01:06.640 --> 0:01:10.040 like Donald Trump that comes from New York. Jointing US 0:01:10.080 --> 0:01:13.760 now Terry Hynes Pangaea Policy Advisory found at Terry, we 0:01:13.840 --> 0:01:16.440 got to talk about the founder majority Andre of Bloomberg AMPE, 0:01:16.800 --> 0:01:19.840 the parent company of Bloomberg News. Mr Michael Bloomberg, how 0:01:19.920 --> 0:01:22.720 tough was that night for him? Terry? I think it 0:01:22.800 --> 0:01:25.040 was very tough for him, John, and I think the 0:01:25.640 --> 0:01:29.560 bottom line effect is that the Democratic race is likely 0:01:29.560 --> 0:01:34.440 more modeled and not clarified after Nevada South Carolina Super Tuesday. 0:01:34.640 --> 0:01:40.200 Remember the Bloomberg case. According to a staff memo found 0:01:40.240 --> 0:01:42.440 a couple of days ago, is that Sanders is the 0:01:42.520 --> 0:01:46.440 likely nominee unless Biden, Clobachar, and Buddhajo would drop out 0:01:46.480 --> 0:01:50.600 after Super Super Tuesday. Make it Sanders versus Bloomberg after 0:01:50.640 --> 0:01:55.040 that performance, that's much less likely to happen. Uh. By anyway, 0:01:55.080 --> 0:01:58.080 I'll stop there, no, Terry, I'm wondering whether Michael Bloomberg's 0:01:58.200 --> 0:02:01.680 entrance actually ended up how bang Bernie Sanders by taking 0:02:01.720 --> 0:02:05.320 some of the heat off him at Lisa. That's an 0:02:05.320 --> 0:02:08.079 awfully good question, and I think the short answer is 0:02:08.120 --> 0:02:11.200 I think it did. Uh combination of two things. One 0:02:11.320 --> 0:02:14.120 is it does take heat off of him. And secondly, 0:02:14.280 --> 0:02:17.360 you have people that I referred to and this morning 0:02:17.440 --> 0:02:22.000 is second tier candidates. I mean no disrespect. Uh Warren, Clovachar, 0:02:22.120 --> 0:02:24.519 budda Judge all tore each other up in order to 0:02:24.560 --> 0:02:27.000 get a run up the ladder and stay alive. And 0:02:27.080 --> 0:02:30.440 the combination of that with the deflation of Bloomberg, I 0:02:30.440 --> 0:02:33.160 think really helped Sanders. Yes, Terry, good morning. This is 0:02:33.200 --> 0:02:37.200 the third tier radio guy talking right now. Terry, and 0:02:37.280 --> 0:02:39.320 you and I have been you know, seen this before, 0:02:39.400 --> 0:02:42.519 the niceties of Kennedy nixt and you and I don't 0:02:42.560 --> 0:02:45.080 go back to Lincoln Douglas. But I guess that was fiery. 0:02:45.600 --> 0:02:52.720 Is well, something changed last night? What was it? I 0:02:52.800 --> 0:02:57.760 think what changed is that you have candidates to that. 0:02:57.800 --> 0:02:59.960 I mean, the market perception, I think in the general 0:03:00.040 --> 0:03:03.520 perception and political perception was that this race was going 0:03:03.560 --> 0:03:06.079 to get clarified and candidates were going to drop out. 0:03:06.120 --> 0:03:08.560 And I think what changed last night is that that 0:03:08.680 --> 0:03:10.800 is much less likely to happen. As I just mentioned. 0:03:11.000 --> 0:03:14.000 The other thing that changed, I think is that, uh, 0:03:14.160 --> 0:03:17.920 the other candidates were supposed to get the memo that 0:03:18.000 --> 0:03:19.840 the race was supposed to come down to a two 0:03:19.840 --> 0:03:22.560 person battle between Sanders and Bloomberg, and they didn't get 0:03:22.600 --> 0:03:25.880 that memo. Instead, quite the opposite, Terry. Everything you've said 0:03:26.360 --> 0:03:29.000 just opens the door to Senator Sanders running away with 0:03:29.040 --> 0:03:30.840 this and a question I'm going to ask now is 0:03:30.880 --> 0:03:33.160 what many people are thinking on Wall Street at the moment. 0:03:33.639 --> 0:03:36.800 When does this start to bleed into financial markets, Terry, 0:03:36.960 --> 0:03:39.360 When do we start to see that connection established with 0:03:39.600 --> 0:03:43.240 Senator Sanders and perhaps being the risk off candidate for 0:03:43.440 --> 0:03:46.400 off the people on the street. I think that takes 0:03:46.400 --> 0:03:49.160 a while, actually, John, the you know for a couple 0:03:49.200 --> 0:03:53.120 of reasons. One is that I think uh, markets and 0:03:53.160 --> 0:03:55.240 the general public both are slow to catch up to 0:03:55.320 --> 0:03:59.240 this um is that you know. Firstly, is that what 0:03:59.320 --> 0:04:03.680 happens is Super Tuesday, UH doesn't clarify as much as 0:04:03.760 --> 0:04:08.040 it's supposed to because the delegates are proportional. Uh, so 0:04:08.200 --> 0:04:10.760 you know, it's not a winner take all situations. Secondly, 0:04:11.040 --> 0:04:14.280 the Super Tuesday states generally split between Sandra states like 0:04:14.360 --> 0:04:18.160 California and other ones, mostly in the South, where what 0:04:18.480 --> 0:04:20.960 I would call non Bernies do a lot better, places 0:04:20.960 --> 0:04:24.320 like Texas, Virginia, North Carolina. So it's gonna be quite 0:04:24.320 --> 0:04:27.800 a while before that clarifies. And uh, you know, once 0:04:27.920 --> 0:04:31.560 if it clarifies in Sanders direction, I think I think frankly, 0:04:31.560 --> 0:04:34.200 that goes market positive because then it looks like Trump's 0:04:34.320 --> 0:04:37.120 likelier to win. But the longer this models, I think 0:04:37.120 --> 0:04:40.200 the longer, it's a market negative on balanced Tera Haynes, 0:04:40.200 --> 0:04:46.880 thank you so much. Appreciated this morning with pangea. Right now, 0:04:46.880 --> 0:04:49.040 we are thrilled to bring you a gentleman that some 0:04:49.120 --> 0:04:54.479 would say invented this ages ago, before Obama, before William 0:04:54.560 --> 0:04:58.080 Jefferson Clinton. There was a doctor from New York who 0:04:58.120 --> 0:05:00.520 was up in Vermont skiing and sugar bu and he said, 0:05:00.560 --> 0:05:04.240 I think I had to reinvent presidential politics. Hard Dean 0:05:04.320 --> 0:05:07.159 went on to reinvent the Iowa Caucus, and then he 0:05:07.160 --> 0:05:11.240 went on for leadership within his Democratic Party. Howard, we 0:05:11.360 --> 0:05:16.520 just got from Terry Haines sort of a grizzled, you know, strategy. 0:05:16.600 --> 0:05:20.279 Look from Washington, what did last night mean for the 0:05:20.360 --> 0:05:23.840 fabric of the Democratic Party, for the operatives, for the 0:05:23.880 --> 0:05:27.240 people in the States. People that have been Democratic, the 0:05:27.360 --> 0:05:31.120 thick and thin, they haven't changed parties, They've always been Democratic. 0:05:31.360 --> 0:05:34.680 You mentioned the moderate Democrats. What did all this fireworks 0:05:34.960 --> 0:05:38.560 mean for them last night? Well, first of all, thank 0:05:38.560 --> 0:05:43.920 you for the overinflated resident a. Secondly, uh, in all 0:05:44.000 --> 0:05:47.000 due respect to all the analysts, people from Washington usually 0:05:47.040 --> 0:05:49.520 had the last out here. What's gonna happen? So let 0:05:49.560 --> 0:05:51.159 me tell you what I think is gonna happen, which 0:05:51.200 --> 0:05:56.599 is very different. Uh, It's quite possible, although maybe won't happen, 0:05:56.640 --> 0:05:59.040 that all six of these candidates will go to Super Tuesday. 0:05:59.720 --> 0:06:02.880 That depends mostly on the finishes of Elizabeth Lawrence and 0:06:02.960 --> 0:06:07.240 Joe Bid if they finished decently in Nevada. Uh, in 0:06:07.360 --> 0:06:11.440 South Carolina, they're all going to Super Tuesday. Now, when 0:06:11.480 --> 0:06:14.080 you get to Super Tuesday, we have a rule that 0:06:14.120 --> 0:06:16.159 says if you don't get fiftent of the vote, you 0:06:16.160 --> 0:06:21.680 get zero delegate. That is gonna win out people out significantly. Uh. 0:06:22.520 --> 0:06:25.080 People are saying that Bernie's the front runner. I think 0:06:25.080 --> 0:06:27.120 that's the or buddhas Judge is the front runner. I 0:06:27.200 --> 0:06:30.479 think that's the mistake. After two states, they are mostly white, 0:06:30.520 --> 0:06:35.200 don't look anything like the Democratic Party. So, um, I'm 0:06:35.240 --> 0:06:38.200 guessing we're gonna have a shake out. But I'm guessing 0:06:38.240 --> 0:06:41.000 all six of these they're all six of these candidates 0:06:41.040 --> 0:06:43.560 could go on and win the nominations. As we saw 0:06:43.680 --> 0:06:46.599 last night. I thought it was a fantastic debate. What 0:06:46.720 --> 0:06:48.840 makes you think from the debate last night that all 0:06:48.880 --> 0:06:51.880 six could go on and win this Howard, because they're 0:06:51.880 --> 0:06:54.839 all attractive, they all did well, they're all smart and 0:06:54.880 --> 0:06:58.920 they all have their own different lanes. Okay, Well, let's 0:06:58.920 --> 0:07:01.679 talk about Matt Bloomberg. Because most people said he didn't 0:07:01.720 --> 0:07:04.679 have a good night. What did you say that suggests 0:07:04.680 --> 0:07:06.960 that he could go on and tite the nomination because 0:07:07.000 --> 0:07:09.080 he has so much money, he's all over the place, 0:07:09.120 --> 0:07:12.240 he's on the air. Um. Yes, he didn't have as 0:07:12.280 --> 0:07:14.400 good night as some of the others. This is the 0:07:14.440 --> 0:07:16.640 first debate. Everybody else has already doing in five or 0:07:16.680 --> 0:07:20.040 six of them. Um, So I don't think that's going 0:07:20.080 --> 0:07:22.840 to harm him greatly. He had to up his game, 0:07:22.920 --> 0:07:25.480 he knows that. But he's the one person up there 0:07:25.480 --> 0:07:28.160 who could come on as a novice and continue to 0:07:28.200 --> 0:07:31.080 do just fine. My guess is he may meet the 0:07:31.560 --> 0:07:34.239 percent thresholds in a number of states on Super Tuesday, 0:07:34.280 --> 0:07:37.720 and maybe even South Carolina. Howard, what do you think 0:07:37.720 --> 0:07:42.880 of Pete his criticism of Bernie Sanders and his followers 0:07:43.000 --> 0:07:46.440 and saying that he has to take responsibility for some 0:07:46.520 --> 0:07:50.600 of the vitriol that is being thrown by the people 0:07:50.600 --> 0:07:53.920 who are commonly known as Bernie prose I. Actually it 0:07:54.080 --> 0:07:56.200 helped two people. One was Pete Buddhi and the other 0:07:56.320 --> 0:07:59.000 was Bernie standards, that is an issue. There is a 0:07:59.080 --> 0:08:02.400 lot of resentment about that. I don't think that's anything 0:08:02.480 --> 0:08:06.240 close to the majority of Bernie Sanders, but that is 0:08:06.280 --> 0:08:08.120 going to be an issue in the campaign. Bernie now 0:08:08.200 --> 0:08:10.280 knows that, and he's gonna have to do something that 0:08:10.440 --> 0:08:13.120 I think he will poward one more question and get 0:08:13.160 --> 0:08:15.920 you off in your busy morning. I'm sure in democratic politics, 0:08:16.280 --> 0:08:20.040 if you put Hubert Humphrey up there last night, Scoop Jackson, frankly, 0:08:20.080 --> 0:08:23.000 if you put Hillary Clinton up there last night, where 0:08:23.000 --> 0:08:25.000 do they fit in right to left? Would they be 0:08:25.040 --> 0:08:28.480 the most right candidate up there? I mean that how 0:08:28.520 --> 0:08:32.160 far your party shifted? I think our party shifting to 0:08:32.200 --> 0:08:34.800 the center? I think, come on, I didn't hear that 0:08:34.920 --> 0:08:37.600 last night. Dr Dean, Well, you may you may not have, 0:08:37.760 --> 0:08:41.560 but I'll tell you what's on the ground. Five five 0:08:41.640 --> 0:08:47.440 congress people that we elected are significantly to the leftist center. Agreed, 0:08:48.400 --> 0:08:51.760 But Oklahoma, the voters are moving to the sound Howard. 0:08:51.880 --> 0:08:55.079 I totally take your point. I didn't see that in 0:08:55.200 --> 0:08:59.599 John Farrell's Las Vegas last night. I thought Budd was 0:08:59.679 --> 0:09:04.000 clearly centers. Uh, Colob Charwood centers Bloomberg wasn't able to 0:09:04.040 --> 0:09:06.400 get his message out, but I would guess that he 0:09:06.520 --> 0:09:08.920 was center to center right, probably the most conservative guy 0:09:08.920 --> 0:09:11.959 on the stage, although Amy might have been conservative person 0:09:12.000 --> 0:09:14.720 on the stage. Okay, Howard Dean, thank you. I think 0:09:14.880 --> 0:09:16.440 we have to leave it there just because of the time, 0:09:16.480 --> 0:09:19.040 but Dr Dean, thank you so much. Former how did 0:09:19.080 --> 0:09:24.800 the Democratic National Committee? Right now, we're looking at the 0:09:24.920 --> 0:09:29.240 Trade shares ahead of the market up twenty four percent, 0:09:29.400 --> 0:09:32.199 Morgan Stanley shares somewhat lower. This comes after Morgan Stanley 0:09:32.440 --> 0:09:34.840 so that it is buying e Trade in a thirteen 0:09:34.920 --> 0:09:38.720 billion dollar deal more than premium over where the shares 0:09:38.800 --> 0:09:42.680 price closed yesterday. Sationally Boss who covers all things financial 0:09:42.720 --> 0:09:45.640 here for us in Bloomberg Television and Bloomberg News, joining 0:09:45.720 --> 0:09:47.880 us in interactive broker studios. And there really is a 0:09:47.960 --> 0:09:51.880 question what is Morgan Stanley getting with this deal given 0:09:52.120 --> 0:09:55.440 where the valuation istionally Morgan Stanley for the masses. Lisa, 0:09:55.760 --> 0:09:58.280 So you have a bank here that used to mostly 0:09:58.320 --> 0:10:03.120 serve wealthy individual and they want to go way downstream. 0:10:03.160 --> 0:10:06.480 They want to serve thirteen million customers and they want 0:10:06.520 --> 0:10:10.920 to create a full scale bank, a full scale digital bank, 0:10:11.320 --> 0:10:13.880 and which they have checking and savings accounts for millions 0:10:13.880 --> 0:10:16.240 of people. All right, so back up. The idea here 0:10:16.280 --> 0:10:20.199 being that e trade caters to retail clients, not necessarily 0:10:20.240 --> 0:10:24.200 the millionaires and billionaires, and that bringing them in through 0:10:24.240 --> 0:10:28.400 their brokerage accounts will also generate more deposits and more 0:10:28.480 --> 0:10:31.640 wealth management and just that whole cross selling kind of 0:10:31.720 --> 0:10:34.920 chain of revenues. Correct, Yes, yes, and yes. So something interesting. 0:10:34.920 --> 0:10:37.360 Remember Morgan Stanley. If you googled it in the past, 0:10:37.440 --> 0:10:39.880 people would ask is Morgan Stanley and JP more even 0:10:39.920 --> 0:10:43.040 the same thing. Most people don't relate to Morgan Stanley 0:10:43.120 --> 0:10:45.400 because it's an investment bank, it's a wealth manager for 0:10:45.440 --> 0:10:49.080 wealthier people. But now they're saying they want everyone to 0:10:49.160 --> 0:10:53.280 know what Morgan Stanley is. Will this do it? I mean? 0:10:53.360 --> 0:10:55.880 Is it worth it? Analysts saying that this deal seems 0:10:55.880 --> 0:10:58.679 like it could be really lucrative for Morgan Stanley. Listen, Initially, 0:10:58.760 --> 0:11:00.920 the stock is not doing well. Investors on the front 0:11:01.000 --> 0:11:05.520 end are have their concerns. Why did those concerns exist? 0:11:05.840 --> 0:11:08.679 For more financial reasons? More likely, what does this mean 0:11:08.720 --> 0:11:13.200 for buybacks and capital return to shareholders? Strategically, it makes 0:11:13.240 --> 0:11:17.080 a lot of sense. Why is that James Gorman, former 0:11:17.160 --> 0:11:20.520 mckensey consultant, took over Morgan Stanley, made them one of 0:11:20.559 --> 0:11:24.280 the biggest managers in America, pushed up those margins and 0:11:24.400 --> 0:11:28.199 now is making that even bigger. He's been successful the 0:11:28.240 --> 0:11:31.640 first time around. We're getting to get in some of 0:11:31.640 --> 0:11:34.360 the numbers here. And Allison Williams was really clear about 0:11:34.400 --> 0:11:37.040 the overpaying here and what's fascinating here, and I like 0:11:37.120 --> 0:11:40.360 the equivalent of JP Morgan in their charge card business. 0:11:41.000 --> 0:11:43.960 Revenues are so dear and difficult in the business that 0:11:44.040 --> 0:11:47.920 everybody's extending out the x X axis the timeline, and 0:11:47.960 --> 0:11:52.440 they're making very clear the break even period on doing 0:11:52.480 --> 0:11:55.839 the trade is much longer than expected. If you heard 0:11:55.880 --> 0:11:58.480 from your sources, how long is long yet two to 0:11:58.520 --> 0:12:03.439 three years? Well, I would say that short. Financially, it 0:12:03.559 --> 0:12:05.839 makes sense for them to do this big strategic thing 0:12:05.840 --> 0:12:09.800 about becoming America's bank. Right to build a full scale, 0:12:10.240 --> 0:12:14.559 full service digital bank will take many years. So think 0:12:14.600 --> 0:12:17.839 about how long it took Gorman for for his first 0:12:18.880 --> 0:12:22.080 I want to go into your expertise then on Goldman 0:12:22.120 --> 0:12:25.120 saction were just at the investor day as well. At 0:12:25.160 --> 0:12:27.920 Lisa brilliantly brings up that this is the retailizing of 0:12:27.960 --> 0:12:31.320 Morgan Stanley. Okay, great? Is this essentially they're trying to 0:12:31.320 --> 0:12:34.319 get out front of Goldman Sack? Did they did they 0:12:34.400 --> 0:12:37.800 acquire a trade so somebody else wouldn't be able to 0:12:37.840 --> 0:12:42.840 buy it? This is a huge way to stay competitive, Tom, Yes, Right, 0:12:43.280 --> 0:12:45.440 Goldman sacs for for Gorman this morning to say that 0:12:45.480 --> 0:12:47.840 they are building a full scale digital bank. That is 0:12:47.880 --> 0:12:52.640 something that Goldman had said before. So how do they 0:12:52.679 --> 0:12:55.760 compete now in their own plan? Right? And we are 0:12:55.800 --> 0:12:59.240 seeing the Goldman Goldman Sacks shares down half percent in 0:12:59.280 --> 0:13:02.680 pre market trade. Waiting, but it's you're gonna be spoking 0:13:02.720 --> 0:13:06.200 with James Gorman, correct, with James James Gorman and Morgan 0:13:06.280 --> 0:13:09.960 Stanley later today. What is sort of the main question 0:13:10.360 --> 0:13:12.400 that you're hoping to get from him? Well, one thing 0:13:12.400 --> 0:13:14.120 I want to know about him is does this extent 0:13:14.240 --> 0:13:17.320 his tenure as CEO of the company. So we've been 0:13:17.320 --> 0:13:21.280 already looking at Morgan Stanley succession plan for some time. Also, 0:13:22.000 --> 0:13:25.240 remember Morgan Stanley is still the number one, two, or 0:13:25.280 --> 0:13:27.320 three investment bank every year depending on how you look 0:13:27.320 --> 0:13:31.200 at it, huge equity underwriter. Are the wealth managers now 0:13:31.320 --> 0:13:33.320 taking back the power of the bank. They are the 0:13:33.400 --> 0:13:36.760 number one stock trading firm in America. What does this 0:13:36.880 --> 0:13:39.520 acquisition mean for them? It's probably going to push them 0:13:39.600 --> 0:13:44.000 much further ahead. One thing, and this will be fascinating. 0:13:44.040 --> 0:13:48.439 Your conversation with Mr Gorman uh later today and this 0:13:48.480 --> 0:13:51.800 goes to ubs where axel Vever was heated this morning 0:13:51.840 --> 0:13:56.640 with me and Francine Management. But it's where it's where 0:13:56.640 --> 0:14:01.440 wealth management is? Is e trade well management or I 0:14:01.480 --> 0:14:03.920 love this idea that I can't remember where the Lisa 0:14:04.000 --> 0:14:07.800 said it. Uh, it's just nothing more than a digital bank. 0:14:07.920 --> 0:14:10.400 I mean, I want to be very very stray about that. 0:14:10.480 --> 0:14:12.480 I want to be very clear that Morgan Stanley was 0:14:12.559 --> 0:14:15.360 a wealth manager. What they want to become is a bank. 0:14:15.880 --> 0:14:18.600 They want to become a bank. What's a digital bank? 0:14:18.679 --> 0:14:20.680 What does that look like? I mean when you talk 0:14:20.720 --> 0:14:23.760 to Mr Solomon, Okay, but this is important. You talked 0:14:23.800 --> 0:14:26.840 to David Solomon, He's got a vision a digital bank. 0:14:27.040 --> 0:14:29.440 When you talk to Gorman today, is his vision the same? 0:14:29.600 --> 0:14:31.000 And how much is this just? You don't need the 0:14:31.000 --> 0:14:34.360 brick and mortar physical space which are being shown. Jamie 0:14:34.400 --> 0:14:36.720 is Jamie Diamond talking about a digital bank? He's just 0:14:36.800 --> 0:14:39.600 doing it. Can I give you somebody else here that 0:14:39.640 --> 0:14:42.600 should be a little concerned about this deal? Goldman had 0:14:42.600 --> 0:14:45.240 to go to Apple right there, the Google's, the Amazons 0:14:45.240 --> 0:14:46.960 and all of these tech companies in the world that 0:14:46.960 --> 0:14:49.440 wanted to get into banking, and Morgan Stanley is saying 0:14:49.480 --> 0:14:52.520 we don't need you. They're saying we can do this 0:14:52.800 --> 0:14:56.680 right now without big tech. Exactly interesting, that's actually fascinating. 0:14:56.880 --> 0:14:59.960 I mean, the idea being that big tech isn't necessary 0:15:00.000 --> 0:15:01.920 really going to have the seat at the table that 0:15:01.960 --> 0:15:03.480 a lot of people thought. Okay, so what are you 0:15:03.480 --> 0:15:05.800 gonna ask? Mr? Gorman? They give us an outline here. 0:15:05.920 --> 0:15:08.720 This is a really important interview. What the one one? Besides? 0:15:08.840 --> 0:15:10.640 You know, how long is he going to stay around? Listen, 0:15:10.680 --> 0:15:13.640 you're talking about Jamie Diamond. Jamie Diamond has been clipping 0:15:13.680 --> 0:15:17.880 up the heels of Morgan Stanley's massive stock trading business. 0:15:18.240 --> 0:15:21.880 So how does this deal fend off JP Morgan in 0:15:21.880 --> 0:15:25.000 that business? That's something people have not asked about. The 0:15:25.120 --> 0:15:27.320 question you asked me for how long will this take 0:15:27.360 --> 0:15:29.560 for you to become that full scale, beautiful digit box? 0:15:29.560 --> 0:15:32.800 And what is where is David Solomon? Yeah? Well that's 0:15:32.800 --> 0:15:39.080 the point. John Our next guest is great for writing 0:15:39.280 --> 0:15:43.000 half sentence headlines that get your B T I G. 0:15:44.840 --> 0:15:50.360 Why here's the reason why Tesla one up? Are you ready? Why? 0:15:50.440 --> 0:15:54.280 Because the public is buying. I mean, you don't need 0:15:54.320 --> 0:15:57.160 any more than that. He's here to talk about his 0:15:57.240 --> 0:16:03.200 former boss at U B. S jude In Emmanuel strategist 0:16:04.320 --> 0:16:07.560 right now, disclaimers everywhere. So when you were, you were, 0:16:07.680 --> 0:16:09.800 you were brass Rey Lip there, I've been there many 0:16:09.840 --> 0:16:12.360 times in Zurich down the street you and Mr Mahdi 0:16:12.440 --> 0:16:14.840 where there? You know, what's the what's the body language? 0:16:14.840 --> 0:16:18.800 Are you seeing your former employer? Well, look, it has 0:16:18.880 --> 0:16:24.600 been a difficult decade, let's say to be a European bank. Um. 0:16:24.840 --> 0:16:28.880 You know the question is it's not just uh specific 0:16:29.200 --> 0:16:32.680 to that company, it's are you going to get any 0:16:32.760 --> 0:16:37.000 relief from these just unremitting headwinds with regard to the 0:16:37.080 --> 0:16:41.040 zero interest rate environment? We would actually argue that there 0:16:41.160 --> 0:16:44.400 is a possibility you're going to get leadership transition in Germany. 0:16:44.720 --> 0:16:47.440 You right, if you looked at the debate stage last night, 0:16:47.680 --> 0:16:50.960 we know one thing. We are our deficit. You know, 0:16:51.160 --> 0:16:55.840 I'm a trillion bid. You know you know it's yesterday 0:16:55.920 --> 0:16:58.280 was saying at Deutsche Bank with two days ago, with 0:16:58.320 --> 0:17:00.680 a with a GDP slowdown, the deaths that I believe 0:17:00.760 --> 0:17:03.200 was touristing could go out to two trillion dollars Jule, 0:17:03.240 --> 0:17:04.439 and I don't want to get you in trouble with 0:17:04.480 --> 0:17:06.840 your General Council of bt I G, but you brought 0:17:06.880 --> 0:17:09.560 up a really important point, and this goes to the 0:17:09.560 --> 0:17:12.760 heart of your matter and equity strategy. With the dampening 0:17:12.840 --> 0:17:17.960 that's out there, the zero bound that's out there is scale. 0:17:18.119 --> 0:17:23.520 The only solution for corporations worldwide M and A combinations 0:17:23.600 --> 0:17:27.240 is that the only path forward on the revenue side. Well, 0:17:27.760 --> 0:17:31.359 it's not just the revenue side, it's just you know, 0:17:31.440 --> 0:17:36.560 the speed of innovation UM and the changing landscape along 0:17:36.600 --> 0:17:39.080 with our view that when you specifically look at this 0:17:39.160 --> 0:17:43.359 transaction in the financial industry, that the retail investor is 0:17:43.480 --> 0:17:47.400 likely to become an ever more important factor UM as 0:17:47.560 --> 0:17:51.359 millennials inherit the greatest wealth transfer of all time and 0:17:51.400 --> 0:17:55.040 they're under invested chronically. So so the answer is, yes, 0:17:55.119 --> 0:17:57.439 it is. It makes sense. It certainly makes sense in 0:17:57.440 --> 0:17:59.560 the financial engage. Cannot just sort of take you a 0:17:59.600 --> 0:18:04.919 little bit further into the round of getting into troubles, 0:18:04.960 --> 0:18:07.679 just the culture difference of working at a Swiss bank 0:18:08.320 --> 0:18:12.320 versus a U S firm. How stark is that still 0:18:12.680 --> 0:18:16.959 in Junion. Well, again, a lot of this has to 0:18:17.040 --> 0:18:20.359 do with if you think about the margin pressure of 0:18:20.440 --> 0:18:23.879 a European bank and and the tension, the extra tension 0:18:24.160 --> 0:18:27.160 that you're under in this zero interest rate environment, as 0:18:27.200 --> 0:18:30.560 opposed to this notion that you know, the FED, the 0:18:30.680 --> 0:18:34.520 US FED is the only central bank to successfully escape 0:18:34.600 --> 0:18:37.679 zero interest rates and to give you know, a margin 0:18:37.760 --> 0:18:41.080 of profitability back to US banks. You're answering these rude 0:18:41.160 --> 0:18:43.720 questions so well, I think you could be a seventh 0:18:43.760 --> 0:18:47.240 debater in charge, just waiting for him to tell me 0:18:47.280 --> 0:18:49.200 that he signed an ND and he can't talk about 0:18:49.240 --> 0:18:52.240 what happened. To watch yourself, then we'll have a real disclaimer. 0:18:52.240 --> 0:18:54.480 Continued J and fantastic to have you with us. Let's 0:18:54.480 --> 0:18:57.240 talk about this teflon SMP five hundred. Shall we What 0:18:57.359 --> 0:19:00.000 breaks the mood? What breaks this ragime? I always think 0:19:00.000 --> 0:19:01.760 it's important not to talk about where we think things 0:19:01.800 --> 0:19:04.760 should or shouldn't be, but think about where we are, 0:19:04.840 --> 0:19:07.800 what investors are responding to, and perhaps more importantly, what 0:19:07.840 --> 0:19:10.640 they are not responding to. Right now. What's your take 0:19:10.640 --> 0:19:12.680 on those kind of themes at the moment? Well, well, 0:19:12.720 --> 0:19:15.879 Tom set set the table perfectly. You know. Our view 0:19:16.400 --> 0:19:19.119 is that, particularly when you look at your today and 0:19:19.200 --> 0:19:22.439 specifically the month of February, you are seeing something that 0:19:22.480 --> 0:19:25.080 you haven't seen in several years, and that is the 0:19:25.119 --> 0:19:29.000 public has become an engaged buyer of stocks, whether they're 0:19:29.000 --> 0:19:32.879 electric vehicle makers or you know, technology or what have you. 0:19:33.119 --> 0:19:36.520 The public is back in. So from for where we stand, 0:19:36.760 --> 0:19:38.920 you know, you're at a very sort of unique juncture 0:19:38.960 --> 0:19:43.199 where you've shaken off a lot of the coronavirus and 0:19:43.280 --> 0:19:48.240 the political concerns because the public is a buyer. I 0:19:48.280 --> 0:19:50.919 think a lot of at least the near term, is 0:19:51.000 --> 0:19:53.960 how the flow of news goes and does that cause 0:19:54.040 --> 0:19:57.119 the public to have less of an appetite over the 0:19:57.160 --> 0:20:00.399 next four to six weeks uh in terms of buy stock, 0:20:00.520 --> 0:20:03.520 we think long term, actually, the key to the public 0:20:03.520 --> 0:20:06.960 buying stocks and the key to moving markets higher is 0:20:07.000 --> 0:20:09.320 something you know, we've all talked about for a number 0:20:09.320 --> 0:20:13.520 of months in that the psychology of higher yields starts 0:20:13.560 --> 0:20:16.080 to coalesce. And to that end, when you look at 0:20:16.160 --> 0:20:19.240 yesterday's numbers to c P p I come in very, 0:20:19.359 --> 0:20:22.399 very hot, whether it's explained away or not, tells you 0:20:22.440 --> 0:20:24.560 the environment may be changing. I want to pick up 0:20:24.560 --> 0:20:27.360 on that because today you're seeing a rally resoom in bonds, 0:20:27.359 --> 0:20:30.240 and you have seen a rally pretty consistently with yesterday, 0:20:30.280 --> 0:20:32.840 perhaps a slight pause in that. Do you think the 0:20:32.960 --> 0:20:37.480 story being told in bond markets right now is incongruent 0:20:37.680 --> 0:20:41.119 with the story being told in stocks. It's a massive disconnect, 0:20:41.160 --> 0:20:43.960 there's no question about it. And when we look at it, 0:20:43.960 --> 0:20:46.639 it was a disconnect last year, and it's certainly a 0:20:46.680 --> 0:20:49.719 disconnect on the sector level and the equity markets, you know, 0:20:49.960 --> 0:20:54.240 with this incredible out performance in utilities for one um, 0:20:54.680 --> 0:20:57.960 and when you think about the evolution of last year, 0:20:58.160 --> 0:21:01.760 there was a time in in September when we made 0:21:01.760 --> 0:21:04.360 what we think is actually going to be a defensible 0:21:04.400 --> 0:21:08.520 global yield low. Is that the story came together. But 0:21:08.640 --> 0:21:11.640 the coronavirus has sort of put sand in the wheels. 0:21:11.680 --> 0:21:17.480 How long can this divirgins happen exist? For I would 0:21:17.560 --> 0:21:22.760 say that given the dynamics of we're gonna know over 0:21:22.800 --> 0:21:25.320 the next month or two what the path of this 0:21:25.400 --> 0:21:29.159 exogenous variable, being the coronavirus, is likely you know, in 0:21:29.240 --> 0:21:32.720 the expectation is will clear up in April, but also 0:21:33.280 --> 0:21:36.639 you know the uncertainty surrounding the election. It's going to 0:21:36.680 --> 0:21:41.119 be resolved sometime between now and an election day. Julian 0:21:41.119 --> 0:21:44.680 Emmanuel will this bt I G Chief Equity and derivtive strategies. Julian, 0:21:44.760 --> 0:21:46.200 I want to go and I don't want to talk 0:21:46.240 --> 0:21:49.359 about E trade Morgan Stanley, I understand it's inappropriate, but 0:21:49.440 --> 0:21:52.119 I want to speak to you about the kind of 0:21:52.200 --> 0:21:56.280 companies that are seeing low single digit flat revenue growth 0:21:56.440 --> 0:21:59.679 right now? What bogey do they need to desire? Do 0:21:59.720 --> 0:22:03.200 they just to get back to nominal GDP four percent 0:22:03.280 --> 0:22:05.600 of those days done? Can you get valued in this 0:22:05.760 --> 0:22:10.639 market with mid single digit revenue growth? Well, the issue 0:22:10.680 --> 0:22:14.240 there is that kind of low and slow grower. Actually, 0:22:14.280 --> 0:22:18.040 for the most part, their stock price has outperformed massively 0:22:18.440 --> 0:22:21.160 over the last couple of years, explainers because they are 0:22:21.280 --> 0:22:24.679 in sectors that are perceived as to be defensive and 0:22:24.840 --> 0:22:28.200 bond proxies. For the most part, what we would say 0:22:28.400 --> 0:22:31.080 is if we are about to go into an environment 0:22:31.280 --> 0:22:35.560 where yields however gently because central banks are still behind uh, 0:22:35.560 --> 0:22:38.600 you know, monetary accommodation, but yields on the long end, 0:22:38.680 --> 0:22:42.040 if they do pick up, that will become a challenge 0:22:42.119 --> 0:22:46.480