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Speaker 1: Brought you by Bank of America Mary Lynch. Investing in

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Speaker 1: local communities, economies and a sustainable future. That's the power

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Speaker 1: of global connections. Mary Lynch, Pierce Fenner, and Smith Incorporated

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Speaker 1: member s I p C. Welcome to the Bloomberg Surveillance Podcast.

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Speaker 1: I'm Tom Keene with David Gura. Daily we bring you

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Speaker 1: insight from the best in economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and

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Speaker 1: of course on the Bloomberg I think that we we

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Speaker 1: should continue to analyze the monitory policies on the basis

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Speaker 1: of the various economies concerned and of the various cycle.

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Speaker 1: As you know, the cycle in the US is not

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Speaker 1: at all like the cycle in Europe, only because if

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Speaker 1: you look at unemployment, you have full employment in the

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Speaker 1: US and we still have, you know, very close to

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Speaker 1: ten percent unemployment in Europe. So we are in different situations.

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Speaker 1: And it's normal that depending on their own chart and

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Speaker 1: and legislation or treaty, the various central banks are doing

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Speaker 1: what is appropriate in their own environment. So I have

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Speaker 1: full cost and as you understand, there is a meditation

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Speaker 1: at the very moment in time, Folse, So I cannot

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Speaker 1: comment in the meditation that takes place. But if I take,

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Speaker 1: you know, the principle that they have to follow their

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Speaker 1: own legislation and treaty, I would say it's normal that

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Speaker 1: they don't take the same decisions because they are not

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Speaker 1: in the same situation, of course, but it would help.

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Speaker 1: And again, I know you don't want to comment that

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Speaker 1: delicacy for anything specifically on the European Central Bank, but

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Speaker 1: when you look at the US, it's much easier for

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Speaker 1: Janet Yellen to do monetary policy because she also has

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Speaker 1: a president that may give the economy a little bit

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Speaker 1: of a boost while we get it here in Europe

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Speaker 1: and politicians, but it is difficult, frankly speaking, to understand

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Speaker 1: exactly what would be the consequences of the decisions in

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Speaker 1: which are being taken by the new administration in the

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Speaker 1: United States of America. There is an interpretation that it

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Speaker 1: would foster formidably the real economy, and that that is

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Speaker 1: something that the market has very much understood, it seems

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Speaker 1: to me, at least in the first shot. Now, of course,

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Speaker 1: it is much more complicated because you have also the

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Speaker 1: negative side of the decision which are taken in terms

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Speaker 1: of hail economy and also in terms of loss of

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Speaker 1: confidence in some respect. So it seems to me that

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Speaker 1: what the centle Meca has to do is not to

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Speaker 1: take into account the political environment, but the fact the

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Speaker 1: figures and draw appropriate conclusion. It seems to me again

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Speaker 1: in the present cycle in the US in place of

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Speaker 1: rates are absolutely legitimate and it is clearly what the

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Speaker 1: FED intends to do. How much do you worry about

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Speaker 1: productivity and the fact that in the US but also

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Speaker 1: in the UK, productivity is not where it should be

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Speaker 1: in this point in the cycle. Yes, I think it

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Speaker 1: is probably seen the most important question that we have

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Speaker 1: in all the advanced economy. We had a jump of

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Speaker 1: productivity fortunately from ninety five to two, and then we

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Speaker 1: saw the productivity even before the crisis going down. And

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Speaker 1: now we are still at a level of productivity growth

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Speaker 1: which is insufficient and of course explain very well why

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Speaker 1: we are going, I have to say a little bit miserably,

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Speaker 1: both on both sides of the Atlantic. It's not what

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Speaker 1: we would opera and the that is a condendrum there

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Speaker 1: because we know that science and technology is making enormous progress.

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Speaker 1: So if we have consequences on total factor productivity and

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Speaker 1: and that would be good consequences, but we don't see

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Speaker 1: it yet. It reminds me. I'm an old boy, you know.

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Speaker 1: It reminds me the solo products. We had a lot

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Speaker 1: of investment in big computer frame and we didn't see

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Speaker 1: the productivity progress that it came after a long period

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Speaker 1: of table maturing. I guess that we are more less

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Speaker 1: in the same situation. Al right, Mr Trich, good morning

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Speaker 1: from New York. Help me here with the future of

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Speaker 1: one Europe. When I look at the clause for a

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Speaker 1: stronger Deutsche Mark, a weaker Itealian Lira, a weaker this

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Speaker 1: a weaker that defend for me the concept of a euro?

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Speaker 1: Right now, why does Germany and why does Greece need

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Speaker 1: a euro? Well, you might remember that the same question

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Speaker 1: was asked at the very moment of the dramatic crisis

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Speaker 1: we had in the beginning of the of the two

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Speaker 1: thousand ten, you know, and everybody was expecting both countries,

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Speaker 1: as you just said, to leave and to quit because

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Speaker 1: because one was supposed to prefer its national currency, the

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Speaker 1: previous national county, and the other one would reject the

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Speaker 1: adjustment and the austerity. But the result was exactly the country.

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Speaker 1: As you remember, Germany decided of course to help Greece,

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Speaker 1: and Greece decided to stay and obliged its own government

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Speaker 1: to stay. The last figure I have is that of

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Speaker 1: the German in on board with the europe and that

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Speaker 1: a very large majority also of the Greek on board

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Speaker 1: within yours. So you have an underlying support for the

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Speaker 1: EU which has proved in the crisis much more, much

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Speaker 1: longer than was expected. And only to remind you, we

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Speaker 1: were fifteen at the moment of even bother collapse. We

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Speaker 1: are nineteen today. So for new country got in. So

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Speaker 1: we should not underestimate the underlying frends of the European

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Speaker 1: Union and of course of the UH. It's said that

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Speaker 1: being said, we have a lot of hard work to do,

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Speaker 1: a lot of whom work to do, and it's it's

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Speaker 1: a disglace that we don't do these structural reforms that

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Speaker 1: are absolutely necessary. Natan Sheets choice us here in New

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Speaker 1: York for under Secretary for International Affairs at the U. S.

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Speaker 1: Treasury Department, now a visiting fellow at the Peterson Institute

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Speaker 1: for International Economics. Good to see you again. I think

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Speaker 1: I last saw you a few months back you were

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Speaker 1: in government. I was flying with you in the Secretary

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Speaker 1: of Treasury then Secretary of the Treasury, from Bogatata to

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Speaker 1: Mexico City. And I want to ask you before we

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Speaker 1: get into the data and all that we know about

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Speaker 1: the global economy, let's start with the anecdote. What's your

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Speaker 1: sense of how the economy is doing from all of

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Speaker 1: the travel you did. You were on the road weeks

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Speaker 1: at every month, months out of every every year. Indeed,

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Speaker 1: it's uh, it's a pleasure to be here, thank you. Uh.

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Speaker 1: My sense is that the global economy is doing right now,

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Speaker 1: maybe a notch better than it was six or twelve

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Speaker 1: months ago. I think part of that is uh, an

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Speaker 1: inventory cycle, and we're now moving moving to a more

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Speaker 1: supportive part. That of course is a temporary effect. But

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Speaker 1: the question is then does that pass through into more

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Speaker 1: investment and ultimately into more productivity growth for the global economy.

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Speaker 1: And I think we're seeing this basic story play out

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Speaker 1: to some extent in the United States, but also Europe

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Speaker 1: is looking a little better, and for the nearer term

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Speaker 1: at least, the Chinese economy is looking a little bit

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Speaker 1: more solid. Now. You spent a lot of time traveling

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Speaker 1: to to China as well. I hope we can talk

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Speaker 1: a little bit about that as well. We speak about

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Speaker 1: packs American in the context of foreign policy, the role

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Speaker 1: that the US plays in the world, let's talk about

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Speaker 1: that in the context of of economics. UM, as you

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Speaker 1: were traveling, what was the sense of the perception of

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Speaker 1: the role that the US is playing and do you

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Speaker 1: do you detect that that's changing? This is this is

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Speaker 1: such a crucial issue. UH. The US has certainly looked

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Speaker 1: too as first among equals. The US has looked to

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Speaker 1: to provide leadership in the economic space, be that on

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Speaker 1: issues like the w t O or the I m

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Speaker 1: F or in the G twenty or the the G seven.

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Speaker 1: And I think the right now the rest of the

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Speaker 1: world is looking at the United States and asking the

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Speaker 1: new administration, what are your intentions in terms of economic

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Speaker 1: leadership going forward. I think that this is uh. This

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Speaker 1: is an issue that's being uh deliberated on inside the administration,

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Speaker 1: and I hope that they come to the conclusion, as

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Speaker 1: other administrations have in previous decades, both Republicans and Democrats,

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Speaker 1: that U s leadership is in the global interests. But

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Speaker 1: importantly and crucially it's very much in u s interrst.

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Speaker 1: I recall talking to your former boss about the G

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Speaker 1: seven and the G twenty, and he would become incredibly animated.

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Speaker 1: This was incredibly important to him to have these sort

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Speaker 1: of multi ladder institutions. As we look ahead to next

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Speaker 1: week when central bankers and finance ministries are going to

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Speaker 1: descend on on Germany for G twenty meeting. Um, what's

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Speaker 1: the argument you would make to to Steve Munuition now

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Speaker 1: the Treasury secretary, to to your counterparts of Treasury now

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Speaker 1: about the importance of the G twenty when it comes

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Speaker 1: to economic policy. Well, Uh, we learned, we learned clearly

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Speaker 1: that there are certain things that require international cooperation. Uh.

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Speaker 1: That there are issues like international financial regulation where we're

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Speaker 1: all interlinked, and what happens in the United States influences

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Speaker 1: the rest of the world, but the rest of the

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Speaker 1: world influences the United States as well, and we must

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Speaker 1: we must work together. Uh. So Uh, the advantages uh

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Speaker 1: for US as a country are enormous. And then I'd

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Speaker 1: say the other the other argument I'd make is that

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Speaker 1: the clear empirical record of the past decades is that

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Speaker 1: US global integration and US leadership has been a key

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Speaker 1: driver of of U S and global growth. Uh that

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Speaker 1: these are lynch pins of the progress that we've seen

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Speaker 1: in the US and global economy through the post war period.

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Speaker 1: What should we be listening for as the Treasury Secretary

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Speaker 1: travels to Germany. It was a big moment when Rex

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Speaker 1: Tillers in the Secretary of State went to Belgium and

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Speaker 1: then to Munich for the Munich Security Conference and begin

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Speaker 1: to lay out his his policy platform. I imagine the

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Speaker 1: same thing is going to happen here with Steve Nation.

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Speaker 1: What should we be listening for from him as he

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Speaker 1: begins to do that? So? Uh, First of all, hopefully

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Speaker 1: we will hear from him a continued commitment to US

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Speaker 1: leadership and US involve vigorous involvement in international flora. So

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Speaker 1: I'd say that's one key question. A second key question

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Speaker 1: is how committed is the United States to a free

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Speaker 1: and open trading order across the globe? Uh? And then

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Speaker 1: I'd say a third set of issues that bears on

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Speaker 1: the G twenty G seven mandate directly is what kind

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Speaker 1: of position is the United States can be taking on

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Speaker 1: global currency issues? What does the communicate say about about

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Speaker 1: exchange rights. We've had this strong dollar policy for for

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Speaker 1: a while now. Is it your sense that that continues

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Speaker 1: if have you heard in the muddle of sort of

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Speaker 1: what's going to happen? Uh? Market changes in policy? Are

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Speaker 1: we still waiting to hear? I think that that is

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Speaker 1: another issue that the administration is is reflecting on. So

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Speaker 1: on the one hand, my sense is that the strong

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Speaker 1: dollar policy has served the United States well over the

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Speaker 1: last over the last several decades. On the other hand,

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Speaker 1: add as a new administration comes in, I think it's

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Speaker 1: perfectly appropriate for the new administration to reflect on a

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Speaker 1: whole range of policies that they have inherited from their predecessors.

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Speaker 1: And I would put the strong dollar policy in in

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Speaker 1: that category. Uh. And they may come to a conclusion

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Speaker 1: that they want to modify it in some way, but

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Speaker 1: I think that the crucial point is that that should

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Speaker 1: be the result of a thorough, ongoing, deliberative, thoughtful process

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Speaker 1: and not just a visceral kind of response. So I

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Speaker 1: think they're they're thinking it through so far. Uh, they've

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Speaker 1: been more ambiguous on their views of the dollar than

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Speaker 1: previous administrations have been. Nathan Cheats with us here at

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Speaker 1: the wheels have power Breakfast at the Pier Hotel Nathan Chiefs,

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Speaker 1: visiting fellow at the Peterson Institute for International Economics from

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Speaker 1: our under Secretary for International Affairs at the US Treachery Department.

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Speaker 1: This is Plumberg Surveillance here brought to you by the audit,

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Speaker 1: tax and advisory professionals at Eisner amper LLLP. I was

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Speaker 1: struck over the course of your tenure by how much

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Speaker 1: the Treasury Department relied on UH and implemented sanctions. It

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Speaker 1: became a real policy tool there. I don't think that

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Speaker 1: it was covered enough. But when you look at the

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Speaker 1: role of the Treasury Department, that was clearly away in

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Speaker 1: which the Treasury Department expanded its powers. Could you talking

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Speaker 1: just a bit about I mean, when the first moves

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Speaker 1: we saw here when President Trump came to office was

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Speaker 1: the expansion of sanctions against Iran. This is a new

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Speaker 1: tool in the tool kit, or a tool being used differently,

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Speaker 1: I suppose by by Treasury. The sanctions policy is is

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Speaker 1: powerful UH. As it has been developed, it is increasingly effective.

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Speaker 1: For example, with Ukraine, we were able in responding to

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Speaker 1: Russian aggression to tailor those sanctions in a way that

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Speaker 1: UH maximized the impact on Russia while minimizing the blowback

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Speaker 1: into the global economy. So I think you're absolutely right.

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Speaker 1: The tools developing, it's being used in more flexible kinds

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Speaker 1: of ways to achieve given outcomes. Now that's said, I

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Speaker 1: also think there's a rest that we need to balance

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Speaker 1: against that of overusage and over reliance on it. So

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Speaker 1: I think that the sancitions approaches, on the one hand,

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Speaker 1: there powerful, but on the other hand, must be used

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Speaker 1: very selectively. You mentioned China, and I was with the

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Speaker 1: Treasury sectary when he was invading for their strategic and

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Speaker 1: economic dialogue, another example of the sort of robust multilateral

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Speaker 1: dialogue that we had here over the last few years.

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Speaker 1: How does that relationship stand out? How did you leave

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Speaker 1: that relationship and what's your greatest concern going forward here? Again,

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Speaker 1: there's been so much rhetoric. What's the integrity of that

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Speaker 1: relationship life right now? Uh? The relationship that we left

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Speaker 1: was robust, vigorous, and very very frank. We were able

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Speaker 1: to work together on areas where we were in agreement. Uh,

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Speaker 1: we spoke extremely candidly about areas of disagreement, and I

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Speaker 1: think that we were we were pushing pushing the ball forward.

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Speaker 1: The nature the tone of the relationship going forward, I

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Speaker 1: think is is an open issue. But frankly, I think

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Speaker 1: that Beijing more broadly is watching what's going on in Washington,

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Speaker 1: and to the extent that the US chooses to step

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Speaker 1: back from international leadership, I think that Beijing is looking

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Speaker 1: at this very much as an opportunity for them to

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Speaker 1: increase their international leadership. And we've seen this, for example,

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Speaker 1: President Chief speeching Novos where he became a forceful advocate

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Speaker 1: for globalization, talk about people who are doing serious work

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Speaker 1: in Washingtons and Nathan Sheets with us here now from

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Speaker 1: we're under Secretary for International Fairs at the Treasure Department,

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Speaker 1: someone who putting a lot of service at the Federal

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Speaker 1: Reserve as well. And let's let's start by by going there.

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Speaker 1: We saw an amazing reversal last week. The rhetoric, the

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Speaker 1: quantity of speeches, and the pivot that we saw last

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Speaker 1: week was was extraordinary. What was your reaction to what

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Speaker 1: what you heard last week? So, on the one hand,

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Speaker 1: I don't remember a time where there was such a

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Speaker 1: cord apparently coordinated uh communications effort by members of the

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Speaker 1: FLO and see many, many, many of them you know,

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Speaker 1: in a in a very synchronized fashion, said, March is

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Speaker 1: very much on the table. I think the underlying motivation

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Speaker 1: for that is if you're in a place where the

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Speaker 1: economy is looking pretty good and you're thinking, well, I

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Speaker 1: may need to do two or even three uh this year. Uh,

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Speaker 1: why not do one in March? Kind of put it

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Speaker 1: in the bank, I was saying, gives you a lot

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Speaker 1: of optionality through the through the rest of the year.

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Speaker 1: And I think that's the rational. If you don't go

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Speaker 1: in March and it ends up needing to be three

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Speaker 1: and two thousand seventeen the back end of the year,

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Speaker 1: it's got to be perfect to do June, September, in

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Speaker 1: December you were, you're working there as an as an economist,

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Speaker 1: as an economic advisor. I wonder if then you heard

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Speaker 1: this sort of rhetoric, the sort of political noise at

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Speaker 1: the FED here's today? How you turn that? Tune that

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Speaker 1: out when you're when you're there are doing a doing

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Speaker 1: work within the equals building. So I would say, first

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Speaker 1: of all, through most of my tenure at the FED, uh,

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Speaker 1: the politicalization of the FED was much less pronounced that

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Speaker 1: it is today. Nevertheless, through the through the years of

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Speaker 1: the financial crisis, it was it was ramping up. And

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Speaker 1: I think that there is very much a sense inside

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Speaker 1: the building that they are there to find the best

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Speaker 1: technical solution of the problems that the economy faces, and

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Speaker 1: that ultimately it's the chairman who has to deal with

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Speaker 1: the political elements of it. So they do a very

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Speaker 1: good job of insulating the policy process from these political

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Speaker 1: doctor sheets. I want you to ask the question that

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Speaker 1: everybody in America wants to know. You. I got to

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Speaker 1: look up as title it so long under Secretary of

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Speaker 1: the Treasury for International Affairs. Those people are not populated

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Speaker 1: right now across all of our different administrative cabinet positions.

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Speaker 1: People like you aren't in the hallways of the buildings.

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Speaker 1: What does that mean for the running of a successful government?

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Speaker 1: The the top aids advisors experts Uh that uh that

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Speaker 1: support and help and guide cabinet officers, they're not there.

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Speaker 1: And UH, I think that that limits the capacity of

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Speaker 1: the government to make decisions and importantly to work through

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Speaker 1: a number of of of key issues and policies. Does

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Speaker 1: how does it change debate? How does it change debate

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Speaker 1: that a wise guy like you was not there to

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Speaker 1: say a stupid. You don't know what you're talking about.

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Speaker 1: So the the role that I played and others like

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Speaker 1: inside the Treasury and other agencies is to act as

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Speaker 1: a sounding board, uh for the Secretary and uh you

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Speaker 1: know there's no say ending board to the same extent. Now,

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Speaker 1: I should quickly add that the senior civil servants are

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Speaker 1: very talented group, but they come from a different background

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Speaker 1: and perspective at art in a position to be as

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Speaker 1: frank and candid with the cabinet level officers as we were.

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Speaker 1: Dr She's thank you so much for joining us this morning.

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Speaker 1: Formerly a city group and now at the Peterson Institute,

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Speaker 1: the Under Secretary joins, among others Olivia Blanchard and Jason

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Speaker 1: firm It is there there they write almost They write

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Speaker 1: like once a month too. It's amazing they actually work.

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Speaker 1: I mean pos it works a longer works, most of

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Speaker 1: them do. But anyways, Nathan, she's thank you so much.

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Speaker 1: Brought you by Bank of America, Mary Lynch. Dedicated to

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Speaker 1: bringing our clients insights and solutions to meet the challenges

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Speaker 1: of a transforming world. That's the power of global connections.

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Speaker 1: Mary Lynch, Pierce Federin smith In operated member s I

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Speaker 1: PC Mr Jamie Diamond, the Sea of JP Morgan is

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Speaker 1: here with us. Thank you for joining us. We talked

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Speaker 1: about economy, we talked about business, talk about politics. What

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Speaker 1: are your clients, your institutional clients, but your big corporate

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Speaker 1: investment clients are most worried about it. First all happy

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Speaker 1: to be here. There's that unbelievable JP Morgan conference and

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Speaker 1: with some of the best investors in the world, some

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Speaker 1: of the best speakers in the world. Uh, you know,

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Speaker 1: the business econmy goal hand in hand. So if you

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Speaker 1: actually look at the economic indicators around the world, America

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Speaker 1: is doing okay, Shin is doing a six percent plus,

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Speaker 1: Europe is doing better than people thought. You're painted doing

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Speaker 1: better than people thought. And so the econoic indicators are

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Speaker 1: pretty good. And I think business in the US is

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Speaker 1: growing confidence because because of policies. You know that we

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Speaker 1: have right tax policy, infratructure policy. So you know, the

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Speaker 1: investment worlds always a look confused about it all means

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Speaker 1: of course, and they the biggest concerns in that busines economy.

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Speaker 1: But I will say policy and so would be more

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Speaker 1: around trade. We're gonna get that right or obviously North

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Speaker 1: Korea and things like that. Are you confused about what

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Speaker 1: this all means? What is President Trump and his administration

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Speaker 1: actually going to do for the U. S. Economy? I look,

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Speaker 1: I think he's very positive. Okay, look at the policy

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Speaker 1: if you get the tweets, Look at the people in

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Speaker 1: the ground. Their top professionals both in the military, defend Secretary,

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Speaker 1: State Secretary, Treasury, Gary Co, national advisor, serious people with

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Speaker 1: deep knowledge and deep experience. And their admission is to

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Speaker 1: have a growth agenda. And that agenda is reducing corporate taxes, UH,

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Speaker 1: starting to build better infrastructure, which we definitely need, reducing

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Speaker 1: some of the regulatory regime which is probably held back growth.

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Speaker 1: I think it growth agenda is good for all Americans,

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Speaker 1: middle class, low paid job creation. So and what you

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Speaker 1: sort of reasons business concerces jumped a lot, but more

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Speaker 1: thans they were jumped before in a life, probably because

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Speaker 1: of the pro growth agenda. Don't do you have any

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Speaker 1: doubt that he'll be able to follow through? You know, Look,

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Speaker 1: I'm not I've been watching policies like you for years.

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Speaker 1: They have the Republicans have the House, they have the Senate,

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Speaker 1: they have thirty plus to the governorships that they have

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Speaker 1: a better chance of getting those things done. I don't

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Speaker 1: know the exact timetable, and you know, obviously it's the

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Speaker 1: sources has to be made. So they kind of the

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Speaker 1: euphoria from the positive growth and pro businesses there, but

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Speaker 1: now they have to do this stuff. And so I

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Speaker 1: pretty high get remember the democratic knowledge of quick at

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Speaker 1: taxes too high? That'sur in America. Everyone wants good infrastructure.

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Speaker 1: The reason the Republic didn't like it is could be

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Speaker 1: waste money, not because they are against bridges, tunnels, roads. Uh,

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Speaker 1: And most people acknowledge now that it's time to look

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Speaker 1: at the regulatory regime and kind of relook at it

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Speaker 1: and recalibrate and make sure that's both conducive to growth

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Speaker 1: and doesn't hurt small business formation and things like that.

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Speaker 1: Jami Dungman, what is the one question that actually get

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Speaker 1: asked the most by by your big client? Is it

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Speaker 1: on Trump? Or is it on China? How come you

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Speaker 1: won't take our deposits? Literally? I just had that. It's like,

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Speaker 1: how come they across the repost so high? So these

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Speaker 1: are investing clients, you know, and uh, you know, we

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Speaker 1: provide a lot of research and execution, but but in

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Speaker 1: the around it's mostly around the new administration. That's just traditional.

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Speaker 1: I mean, you haven't change of leadership. You know, people

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Speaker 1: are gonna be both concerned, interested, et cetera. And around

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Speaker 1: the world is Trump, I mean mostly about Trump. So

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Speaker 1: but today at lunch, I asked, I went around the table,

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Speaker 1: say what do you want to talk about lunch? And

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Speaker 1: we didn't get the Trump into the seventh question that

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Speaker 1: that hasn't happened since he's been made president. The first

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Speaker 1: was the class of civilization. A lot about regulatory, inclusive

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Speaker 1: capitalism and things like that. Okay, and this is because

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Speaker 1: they're concerned that it will actually affect their investments, or

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Speaker 1: because it's more intellectuals trying to be smarter about how

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Speaker 1: they need to invest in. They're thinking more long term. So,

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Speaker 1: you know, I think capitalism can do a better job

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Speaker 1: of creating jobs, middle wages, helping skills, helping get kids job,

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Speaker 1: helping lower wages. So one of the reason I took

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Speaker 1: on the Business Round Table of Leadership Chairmanship and we

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Speaker 1: have a great u c O is because I think

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Speaker 1: business should play its part in promoting it's good for

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Speaker 1: all Americans and you know, include expanding things like the

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Speaker 1: Earning com task, credit and so inclusive capitalism. I agree.

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Speaker 1: Now most of the big companies, they are socially advanced,

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Speaker 1: they give medical benefits, they train their people, but they

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Speaker 1: do we can do a better job come of policies

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Speaker 1: that are better for the communities. That's true. I think

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Speaker 1: in Europe it's tring the United States and and it

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Speaker 1: almost can't be done without business. You know, education, it's

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Speaker 1: important that business hire the people. You know, But do

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Speaker 1: you think this is comes it was a trend that

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Speaker 1: was before or did President Trump actually waken up the

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Speaker 1: animal spirits? It seems like he's woken up the animal spirits.

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Speaker 1: You know. Is someone one of the CEOs came out

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Speaker 1: of one of those meetings It says, we've never had

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Speaker 1: such a pro business president, says the founding fathers. I'm

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Speaker 1: not sure that's true. But but consumer confidence, small business confidence,

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Speaker 1: business comes all skyrocketed because because it's a growth agenda, well,

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Speaker 1: it'd be difficult to implement. And I'm thinking of you know,

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Speaker 1: if you look at a lot of the industries, a

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Speaker 1: lot of the markets, because we saw record highs, how

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Speaker 1: much of what is expected is priced in if he

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Speaker 1: doesn't deliver, Even if he doesn't deliver, a tiny bit.

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Speaker 1: Are we going to see a correct Yeah, So I

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Speaker 1: don't Honestly, I don't worry that much about that. So

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Speaker 1: I think stocks went up, maybe rationally because because of

432
00:24:54,880 --> 00:24:57,080
Speaker 1: the growth of agenda. Now they have to do it,

433
00:24:57,520 --> 00:24:59,080
Speaker 1: and I think they'll get it done. It's just gonna

434
00:24:59,119 --> 00:25:00,440
Speaker 1: take time. It's gonna be a lot how to press.

435
00:25:00,480 --> 00:25:01,800
Speaker 1: You guys can have a lot of fun talking about

436
00:25:02,000 --> 00:25:04,399
Speaker 1: what tax scheme and what infrastructure scheme and how it's

437
00:25:04,440 --> 00:25:06,080
Speaker 1: all gonna work and is as good as he promised.

438
00:25:06,280 --> 00:25:08,560
Speaker 1: But if he gets it done, even part of it,

439
00:25:08,560 --> 00:25:11,200
Speaker 1: it'll be good for growth, good for jobs, good for Americans.

440
00:25:11,200 --> 00:25:14,040
Speaker 1: So I am really confidently get that done. Will he

441
00:25:14,040 --> 00:25:16,600
Speaker 1: get it right? The regulation for Wall Street banks help?

442
00:25:16,720 --> 00:25:18,480
Speaker 1: So you know we've been trying. You know, I hear

443
00:25:18,520 --> 00:25:20,520
Speaker 1: people say we can't. We had a crisis. We have

444
00:25:20,680 --> 00:25:22,920
Speaker 1: to throw out all the doctor. No one's asking for that.

445
00:25:23,240 --> 00:25:25,320
Speaker 1: We want, we want to be a reason voice to

446
00:25:25,359 --> 00:25:28,800
Speaker 1: look at those things inside, not just dot frank, but regulation,

447
00:25:28,840 --> 00:25:32,560
Speaker 1: but that need to be recalibrated, coordinated. There too many

448
00:25:32,560 --> 00:25:35,600
Speaker 1: people involved in mortgages. We don't have mortgage rules yet

449
00:25:35,600 --> 00:25:38,560
Speaker 1: it's hurting, and this is hurting lower paid first time

450
00:25:38,600 --> 00:25:41,960
Speaker 1: going ie buyers, small business owners, that we need to

451
00:25:41,960 --> 00:25:43,919
Speaker 1: do it for the sake of old people. So you know,

452
00:25:44,040 --> 00:25:46,840
Speaker 1: just no one when it was done could rashly sayy's done.

453
00:25:46,840 --> 00:25:49,680
Speaker 1: There was proper, fair, coordinating, consistent. So we're just saying

454
00:25:49,720 --> 00:25:52,800
Speaker 1: just open up, have an intelligent conversation about what's working.

455
00:25:52,840 --> 00:25:55,360
Speaker 1: We're the side effects of this, where the unintended consequences,

456
00:25:55,640 --> 00:25:58,639
Speaker 1: and can we get the economy growing faster. If you

457
00:25:58,680 --> 00:26:00,960
Speaker 1: don't have a healthy financial sit them, you're not gonna

458
00:26:00,960 --> 00:26:03,400
Speaker 1: have a healthy economy. And and just keep that in mind.

459
00:26:03,440 --> 00:26:05,080
Speaker 1: It's not that and that's it's good the good for

460
00:26:05,080 --> 00:26:07,119
Speaker 1: the citizens of the country. It's not good for the

461
00:26:07,119 --> 00:26:09,399
Speaker 1: financial players. It's good for the citizens of the country.

462
00:26:09,400 --> 00:26:12,280
Speaker 1: And damaging the financial system is a bad idea if

463
00:26:12,320 --> 00:26:15,160
Speaker 1: you want jobs and growth. But Jimmy Dumn you feel

464
00:26:15,200 --> 00:26:18,040
Speaker 1: that this dialogue with the Trump administration is healthy and

465
00:26:18,440 --> 00:26:21,439
Speaker 1: actually constructive. So he's actually consulting a lot of CEOs

466
00:26:21,440 --> 00:26:24,760
Speaker 1: through Gary Cone or with him directly, directly through Gary Cone,

467
00:26:24,800 --> 00:26:27,040
Speaker 1: through Steve Manusan. You know, the CEO is a part

468
00:26:27,040 --> 00:26:28,639
Speaker 1: of the dog. They should always have been. You know,

469
00:26:28,640 --> 00:26:30,920
Speaker 1: President Obama is spoke to CEOs two. But I think

470
00:26:31,080 --> 00:26:35,159
Speaker 1: that again, I'm affirmably a collaboration will win, you know,

471
00:26:35,320 --> 00:26:39,320
Speaker 1: fingerpointing won't. And so there are solutions to problems. And

472
00:26:39,359 --> 00:26:40,800
Speaker 1: I always say, what do you want the outcome to be?

473
00:26:40,880 --> 00:26:42,560
Speaker 1: Then how a we're gonna get there? And I think,

474
00:26:42,600 --> 00:26:45,240
Speaker 1: you know, if you have civic society, business collaborating together.

475
00:26:45,280 --> 00:26:47,920
Speaker 1: So I applaud his outreach, I applaud his pro business.

476
00:26:47,960 --> 00:26:49,800
Speaker 1: I think some of these businesses of the fine instance

477
00:26:49,800 --> 00:26:51,760
Speaker 1: twos on the planet, we really try to take care

478
00:26:51,760 --> 00:26:54,000
Speaker 1: of our people and our clients. And I remind me

479
00:26:54,119 --> 00:26:56,760
Speaker 1: even the crisis, we didn't need government help. We were

480
00:26:56,760 --> 00:26:58,880
Speaker 1: trying to help people. And so you know, I want

481
00:26:58,880 --> 00:27:00,520
Speaker 1: to I want, I really want to make sure that

482
00:27:00,560 --> 00:27:03,359
Speaker 1: we do our job helping grow and you know, helping

483
00:27:03,359 --> 00:27:05,600
Speaker 1: the economy. The economis will be better. I was springing

484
00:27:05,640 --> 00:27:07,720
Speaker 1: to a lot of European banking CEOs in the last

485
00:27:07,720 --> 00:27:10,560
Speaker 1: couple of weeks are terrified that if Donald Trump de

486
00:27:10,640 --> 00:27:12,720
Speaker 1: regulates Well Street too much, you're not in the level

487
00:27:12,720 --> 00:27:17,360
Speaker 1: of playing field anymore with Europe. Look, I'm I think

488
00:27:17,359 --> 00:27:20,320
Speaker 1: it's asha cooperation is a good thing. So while there's

489
00:27:20,359 --> 00:27:22,720
Speaker 1: been criticism about Basel, and I think some are legitimate.

490
00:27:23,080 --> 00:27:25,199
Speaker 1: At the end of the day, when uh, you know,

491
00:27:25,640 --> 00:27:27,920
Speaker 1: Stevennuch and Garry co get in abloped, they'll work out

492
00:27:27,960 --> 00:27:30,480
Speaker 1: things a bossle that makes sense for everybody. We don't

493
00:27:30,520 --> 00:27:32,960
Speaker 1: want it on a level playing Field's not on level day. Actually,

494
00:27:32,960 --> 00:27:35,440
Speaker 1: American banks are far more capital and formul recruited quests.

495
00:27:35,520 --> 00:27:37,560
Speaker 1: But the fact is, I want the European banks to thrive.

496
00:27:38,480 --> 00:27:41,200
Speaker 1: If the European banks don't thrive, Europe will not thrive.

497
00:27:41,600 --> 00:27:43,959
Speaker 1: And so you know, to me, the regulators should really

498
00:27:44,000 --> 00:27:46,240
Speaker 1: look at those things can help the European banks compete

499
00:27:46,240 --> 00:27:49,320
Speaker 1: and thrive, uh to grow their economies and much more

500
00:27:49,359 --> 00:27:52,760
Speaker 1: important Europe the United States because they financed se economy.

501
00:27:52,760 --> 00:27:55,480
Speaker 1: Here in the United States, the banks only finance the

502
00:27:55,480 --> 00:27:58,080
Speaker 1: rest is done through the capital markets activities. So one

503
00:27:58,080 --> 00:28:00,560
Speaker 1: are the johns Is of the US ignore or the

504
00:28:00,600 --> 00:28:02,240
Speaker 1: rest of the regulation in the world. Have you talked

505
00:28:02,240 --> 00:28:04,520
Speaker 1: about Bosil do you think are you absolutely certain that

506
00:28:04,520 --> 00:28:08,480
Speaker 1: they will? They reach the US gold plate at Bossel

507
00:28:08,880 --> 00:28:11,280
Speaker 1: made it harder, added things, and I'm hoping they reduced

508
00:28:11,280 --> 00:28:13,400
Speaker 1: some of that so that ours is closer to BOSL.

509
00:28:13,720 --> 00:28:15,960
Speaker 1: And I hope that Bosil takes a deep breath and

510
00:28:16,000 --> 00:28:17,720
Speaker 1: make sure that this next round and thing they don't

511
00:28:17,720 --> 00:28:20,000
Speaker 1: like it being called Bosio four, but this next round

512
00:28:20,040 --> 00:28:24,000
Speaker 1: is probably calibrated to both enhanced safety and soundness and

513
00:28:24,080 --> 00:28:26,520
Speaker 1: enhanced growth. And they should be looking at both, not

514
00:28:26,600 --> 00:28:30,119
Speaker 1: just at one, which means one's smarter regulations regulation, so

515
00:28:30,280 --> 00:28:32,080
Speaker 1: not not more or less, just smarter. So like you

516
00:28:32,080 --> 00:28:33,960
Speaker 1: know certain rules. You know, if you look at the

517
00:28:34,000 --> 00:28:35,879
Speaker 1: United States, I think mortgages would have been half a

518
00:28:35,920 --> 00:28:40,200
Speaker 1: trillion dollars more. Have we proper securitization rules, proper legal

519
00:28:40,560 --> 00:28:44,840
Speaker 1: safe harbors, uh, things like that. People have been very reluctant.

520
00:28:45,000 --> 00:28:46,720
Speaker 1: A lot of banks got out of mortgages, I think

521
00:28:46,720 --> 00:28:48,920
Speaker 1: in the United States, and the Federal Reserve said a recently,

522
00:28:49,080 --> 00:28:52,680
Speaker 1: small business formation is lower first time. It's every net

523
00:28:52,720 --> 00:28:56,440
Speaker 1: negative recovery because small business tends to generate in recovery.

524
00:28:56,720 --> 00:28:59,760
Speaker 1: So net formation is negative for the first time harshly

525
00:28:59,760 --> 00:29:02,040
Speaker 1: because credit A lot of banks, not just big ones,

526
00:29:02,080 --> 00:29:04,200
Speaker 1: just got out a whole bunch of small business and

527
00:29:04,280 --> 00:29:08,080
Speaker 1: certain unintended and they're away unintended consequent regulations regular should

528
00:29:08,080 --> 00:29:10,400
Speaker 1: look at that. So one of the unintended ones, probably

529
00:29:10,400 --> 00:29:12,440
Speaker 1: at a c CAR is that is how hard it

530
00:29:12,480 --> 00:29:15,040
Speaker 1: is to hold certain small business, certain real estate loans,

531
00:29:15,040 --> 00:29:17,840
Speaker 1: certain sm ME loans, and because of that, banks are

532
00:29:17,880 --> 00:29:20,600
Speaker 1: pulling back to manage their c car risk. How do

533
00:29:20,640 --> 00:29:22,719
Speaker 1: you rate the European banking system at the moment? Are

534
00:29:22,720 --> 00:29:25,560
Speaker 1: were going see more consolidation. We've tried to fix Italian banks.

535
00:29:26,440 --> 00:29:28,040
Speaker 1: I don't know if you think it's successful or not.

536
00:29:28,320 --> 00:29:31,640
Speaker 1: Deutsche Bank is trying to raise capital over the worst.

537
00:29:31,640 --> 00:29:34,320
Speaker 1: You were that close to fix the Monty depast. We

538
00:29:34,400 --> 00:29:36,120
Speaker 1: knew it was hard. I'm so proud of our people

539
00:29:36,160 --> 00:29:38,520
Speaker 1: for doing it. We could have gone it done, and

540
00:29:38,600 --> 00:29:41,080
Speaker 1: I hope it gets done. The banking problems aren't as

541
00:29:41,120 --> 00:29:43,760
Speaker 1: big as people say so Monty Depast it took about

542
00:29:43,760 --> 00:29:45,400
Speaker 1: forty billion of bad loans. No, it was only so

543
00:29:45,480 --> 00:29:47,560
Speaker 1: much on the bounce. It's so much already been written off.

544
00:29:47,600 --> 00:29:49,360
Speaker 1: We think five or six billion of new capital would

545
00:29:49,360 --> 00:29:52,360
Speaker 1: fix the problem. And so I would like to see

546
00:29:52,480 --> 00:29:55,440
Speaker 1: the banks in the first In the old days, banks

547
00:29:55,440 --> 00:29:58,600
Speaker 1: were going Pan European. Because of the crisis and new rules,

548
00:29:58,640 --> 00:30:00,960
Speaker 1: they've kind of been going back to. I think the

549
00:30:01,080 --> 00:30:05,240
Speaker 1: right way was Pan European. A Pan European regulator is better.

550
00:30:05,320 --> 00:30:08,440
Speaker 1: They're more diversified. It creates more efficiencies in the system.

551
00:30:08,480 --> 00:30:09,800
Speaker 1: I don't know what the long run is, so I

552
00:30:09,880 --> 00:30:13,240
Speaker 1: think eventually I see emerging acquisitions among European banks again,

553
00:30:13,360 --> 00:30:15,160
Speaker 1: but that comes from that has come from from what

554
00:30:15,240 --> 00:30:17,240
Speaker 1: CEO is. The problem is that if you if you

555
00:30:17,480 --> 00:30:21,120
Speaker 1: make too regulars, the regulators have to say what they

556
00:30:21,160 --> 00:30:23,680
Speaker 1: actually want, whether it's good or not, and then allow it.

557
00:30:24,080 --> 00:30:25,920
Speaker 1: If they don't allow you to use capital in this

558
00:30:25,960 --> 00:30:28,640
Speaker 1: country to support capital here, they don't know. If anything

559
00:30:28,680 --> 00:30:33,720
Speaker 1: done course border is heavily punished through capital or clinic question,

560
00:30:33,800 --> 00:30:35,480
Speaker 1: it won't happen. So some of the things we do

561
00:30:35,760 --> 00:30:38,960
Speaker 1: anything course border is bad. So you want to reduce

562
00:30:38,960 --> 00:30:41,360
Speaker 1: it all things and equal. Who reduced this substantially and

563
00:30:41,400 --> 00:30:43,360
Speaker 1: you know it hurts some of the part We have

564
00:30:43,400 --> 00:30:45,720
Speaker 1: no choice. We have to meet the new rules and requirements.

565
00:30:45,720 --> 00:30:50,160
Speaker 1: So we're in Paris with the see the European banks thrive.

566
00:30:50,240 --> 00:30:52,440
Speaker 1: That's what I want to say, because this is good

567
00:30:52,440 --> 00:30:55,120
Speaker 1: for your competition, or again this just means the stability

568
00:30:55,120 --> 00:30:57,760
Speaker 1: of the struction is because it's good for the citizens

569
00:30:57,800 --> 00:31:00,680
Speaker 1: of Europe, including the low paid ones. I think people

570
00:31:00,720 --> 00:31:03,720
Speaker 1: don't look at this clearly. You know this constant being

571
00:31:03,800 --> 00:31:05,720
Speaker 1: up on banks and if you have the European banks

572
00:31:05,720 --> 00:31:09,400
Speaker 1: still deleveraging, they can't finance growth, and so you know

573
00:31:09,400 --> 00:31:10,880
Speaker 1: you're gonna have other people come in and do it.

574
00:31:10,920 --> 00:31:12,640
Speaker 1: But you know some of the investors here are buying

575
00:31:12,880 --> 00:31:16,240
Speaker 1: quote bit assets or assets out of European banks. But

576
00:31:16,240 --> 00:31:18,840
Speaker 1: but their job it's help grow. Your comedy is that

577
00:31:19,200 --> 00:31:23,920
Speaker 1: the government preserves the financial sector. I don't know. Remember

578
00:31:23,920 --> 00:31:26,040
Speaker 1: it's not up to just hurt. She hasn't nego show

579
00:31:26,080 --> 00:31:29,320
Speaker 1: twenty seven other people, each of them affected as a veto,

580
00:31:30,080 --> 00:31:33,000
Speaker 1: and no one wants to see disruption. You know, some

581
00:31:33,000 --> 00:31:35,400
Speaker 1: pots and always something they want to punish Britain. Others

582
00:31:35,400 --> 00:31:37,640
Speaker 1: are much more rational and thoughtful about how you want

583
00:31:37,640 --> 00:31:39,080
Speaker 1: to go about and have a good relays with Britain.

584
00:31:39,160 --> 00:31:41,160
Speaker 1: So I just don't know. You know, again, I as

585
00:31:41,200 --> 00:31:42,920
Speaker 1: the CEO of this company, I have to prepare for

586
00:31:42,960 --> 00:31:45,880
Speaker 1: the contingencies. If you, if anyone you other viewers were

587
00:31:45,920 --> 00:31:48,160
Speaker 1: on my board of directors, you would say you may

588
00:31:48,200 --> 00:31:50,080
Speaker 1: think a B or C. I want you to be

589
00:31:50,160 --> 00:31:52,800
Speaker 1: prepared for a B and C. That's it's only a

590
00:31:52,840 --> 00:31:54,400
Speaker 1: different way of how we have to look at it.

591
00:31:54,520 --> 00:31:58,200
Speaker 1: What do you think people will move to? I don't know, yeah,

592
00:31:57,520 --> 00:32:00,040
Speaker 1: you people coming to you and you guys men and

593
00:32:00,160 --> 00:32:02,560
Speaker 1: all the major cities. We're gonna look at all and

594
00:32:02,600 --> 00:32:04,360
Speaker 1: talk to people and try to figure out all things

595
00:32:04,400 --> 00:32:07,120
Speaker 1: being equal, and eventually will be looking in much more

596
00:32:07,160 --> 00:32:09,800
Speaker 1: detail at local cities. What will you look black in

597
00:32:09,840 --> 00:32:12,000
Speaker 1: five years? Do you spend a lot of time? And

598
00:32:12,040 --> 00:32:13,400
Speaker 1: you were talking about that, you know, the strength of

599
00:32:13,440 --> 00:32:17,000
Speaker 1: the of the financial system, which is necessity for UM,

600
00:32:17,000 --> 00:32:19,560
Speaker 1: I guess the ability in this region. Is the euro

601
00:32:19,720 --> 00:32:23,320
Speaker 1: going to implode? So you're look, I always said the

602
00:32:23,400 --> 00:32:27,600
Speaker 1: European Union is one of the great achievements of mankind ever.

603
00:32:28,240 --> 00:32:31,400
Speaker 1: You know, to have to have any nations live in

604
00:32:31,440 --> 00:32:34,160
Speaker 1: peace and whold hand and make political decisions and you

605
00:32:34,200 --> 00:32:37,200
Speaker 1: know not wars and and UH and having a common

606
00:32:37,240 --> 00:32:39,160
Speaker 1: market is also very smart. And it kind of got

607
00:32:39,200 --> 00:32:41,560
Speaker 1: bogged down a little bit, you know. The British obviously

608
00:32:41,680 --> 00:32:43,960
Speaker 1: thought it was too much, uh and there are issues

609
00:32:44,000 --> 00:32:46,800
Speaker 1: that be dealt with. But when you told me the politicians,

610
00:32:46,800 --> 00:32:49,200
Speaker 1: they're they're devoted to keep it together, they're devoted to

611
00:32:49,240 --> 00:32:51,479
Speaker 1: moving forward. I wish there should be a little more

612
00:32:51,520 --> 00:32:53,920
Speaker 1: devotion to look at what the problems are they're creating.

613
00:32:54,240 --> 00:32:56,800
Speaker 1: Some of these concerns among the populations of the country,

614
00:32:56,840 --> 00:32:59,480
Speaker 1: like you can have a vote in France soon. So, uh,

615
00:33:00,240 --> 00:33:03,200
Speaker 1: the worst cases that someone major decides to leave the

616
00:33:03,240 --> 00:33:06,320
Speaker 1: monetary Union at one point, and that's that's hugely disruptive.

617
00:33:06,600 --> 00:33:08,520
Speaker 1: Now there's no one who says we're gonna do that.

618
00:33:08,680 --> 00:33:11,280
Speaker 1: There are some people running for samething gonna do it. So,

619
00:33:11,360 --> 00:33:13,440
Speaker 1: you know, that's the other fear that you guys see

620
00:33:13,520 --> 00:33:15,680
Speaker 1: the politics of the situation is, but are these votes

621
00:33:15,720 --> 00:33:19,080
Speaker 1: of protest and how the politicians reconnect with the people

622
00:33:19,200 --> 00:33:22,200
Speaker 1: that are electing them. I think so, and I think

623
00:33:22,200 --> 00:33:24,240
Speaker 1: there's a legitimate you know, if you ask, I think

624
00:33:24,240 --> 00:33:26,600
Speaker 1: it's true. In Europe, it's true the United States middle

625
00:33:26,640 --> 00:33:29,520
Speaker 1: class incomes up not gone up. Low wages have not

626
00:33:29,640 --> 00:33:32,400
Speaker 1: gone up, we haven't creative jobs. There's too much unemployment

627
00:33:32,400 --> 00:33:35,920
Speaker 1: and young men in Europe. And meanwhile, they saw us

628
00:33:35,960 --> 00:33:39,680
Speaker 1: fight wars, they saw us uh waste money, they saw

629
00:33:39,760 --> 00:33:41,640
Speaker 1: us do all these things and the same way to say,

630
00:33:41,720 --> 00:33:43,920
Speaker 1: let's let's help the average people for of our country.

631
00:33:43,960 --> 00:33:45,720
Speaker 1: So let's true, But but the way you're gonna do that?

632
00:33:45,760 --> 00:33:48,080
Speaker 1: The next part is how do you do that right?

633
00:33:49,920 --> 00:33:56,280
Speaker 1: D Tax policy training skills schools. I think there should

634
00:33:56,280 --> 00:33:57,440
Speaker 1: be some. Yeah, but like you know, we in the

635
00:33:57,520 --> 00:33:59,320
Speaker 1: United States. I think of the Earning Come taxh credit

636
00:33:59,480 --> 00:34:01,280
Speaker 1: where if you earned seven dollars an hour and your

637
00:34:01,320 --> 00:34:03,520
Speaker 1: single mother with children, the god will pay you three.

638
00:34:03,960 --> 00:34:06,720
Speaker 1: Here we're ways to go fifteen thousand, twenty one. Most

639
00:34:06,720 --> 00:34:08,440
Speaker 1: has already pay that. So the big companies, they were

640
00:34:08,440 --> 00:34:12,040
Speaker 1: already way above that in general. But that would help jobs.

641
00:34:12,320 --> 00:34:15,080
Speaker 1: Dignity studies show them people get jobs they like to work.

642
00:34:15,520 --> 00:34:18,319
Speaker 1: Remember it's the first unlikely the liberals thing is the

643
00:34:18,320 --> 00:34:21,080
Speaker 1: first rung in the ladder where they usually moves on.

644
00:34:21,239 --> 00:34:23,080
Speaker 1: It's good for social values because it allows you to

645
00:34:23,080 --> 00:34:25,399
Speaker 1: form a household and have children and buy a car

646
00:34:25,520 --> 00:34:27,960
Speaker 1: to get to work, and it's good for small business.

647
00:34:28,320 --> 00:34:30,879
Speaker 1: So that is great for society, and so I think

648
00:34:31,040 --> 00:34:33,399
Speaker 1: we have to come up with example to actually fix

649
00:34:33,480 --> 00:34:36,160
Speaker 1: the problems. Skills training is another moment. Germany does great

650
00:34:36,280 --> 00:34:38,359
Speaker 1: and the restaurants don't. Well. Last question, would you ever

651
00:34:38,360 --> 00:34:41,719
Speaker 1: go into politics? I don't think so. Now why I

652
00:34:41,719 --> 00:34:43,360
Speaker 1: don't think I'm student as polity. That's too late and

653
00:34:43,400 --> 00:34:45,960
Speaker 1: I'm sixty one years old. I love my company. I

654
00:34:46,000 --> 00:34:48,040
Speaker 1: think I can do a lot to help America from

655
00:34:48,040 --> 00:34:50,799
Speaker 1: my platform I have today, Jam thanks so much for

656
00:34:50,800 --> 00:34:52,520
Speaker 1: giving us so much of your time. You know they

657
00:34:52,719 --> 00:34:55,920
Speaker 1: they're of JP Morgan. We're in Paris, of course, at

658
00:34:55,920 --> 00:35:12,279
Speaker 1: this Global Markets conference, the Wheels of Power, breakfast of

659
00:35:12,360 --> 00:35:14,800
Speaker 1: Pire Hotel. Nice turnout so far. I think the weather

660
00:35:15,239 --> 00:35:18,520
Speaker 1: maybe as it's a perfect day to walk in midtown Manhattan. Yeah,

661
00:35:18,600 --> 00:35:21,000
Speaker 1: you made, you made the pilgrimage. Plus you turn out

662
00:35:21,040 --> 00:35:25,719
Speaker 1: the Trump the Trump security folks. It's a little less

663
00:35:25,760 --> 00:35:28,759
Speaker 1: crazy than it was a ninety days ago. We're north

664
00:35:28,760 --> 00:35:31,279
Speaker 1: of that up past Bergdorf Goodman and he hasn't been

665
00:35:31,280 --> 00:35:35,799
Speaker 1: spending much time. Here's the golf course the midtown man

666
00:35:35,800 --> 00:35:38,640
Speaker 1: had in golf course and l Chelsea Pearce is doing

667
00:35:38,680 --> 00:35:41,880
Speaker 1: it for the President United States. We're awaiting a Frienci

668
00:35:41,960 --> 00:35:46,040
Speaker 1: Laquase conversation with Mr Diamond of JP Morgan right now.

669
00:35:46,040 --> 00:35:49,520
Speaker 1: Steve Whiting with us and Steve the in the amazing

670
00:35:49,560 --> 00:35:54,480
Speaker 1: news flow oil not through resistance, but nevertheless the hallmark

671
00:35:54,520 --> 00:35:58,439
Speaker 1: of oil below fifty. How right did you and your

672
00:35:58,480 --> 00:36:02,000
Speaker 1: team get of the rama vacations of a movement oil

673
00:36:02,040 --> 00:36:05,400
Speaker 1: from a hundred to nine to fifty in the effect

674
00:36:05,560 --> 00:36:09,680
Speaker 1: on the American economy and hindsight, did you get it right? Well?

675
00:36:09,680 --> 00:36:12,200
Speaker 1: I think, um, you know, hindsight is I think Ed

676
00:36:12,239 --> 00:36:15,600
Speaker 1: Morrise on his team pretty good, just done, you know,

677
00:36:15,680 --> 00:36:20,320
Speaker 1: a really fantastic fundamental job of just seeing the American

678
00:36:20,960 --> 00:36:25,920
Speaker 1: energy boom, noting the effects, uh and maybe not getting

679
00:36:25,960 --> 00:36:28,040
Speaker 1: the timing right because I think that period of that

680
00:36:28,440 --> 00:36:30,960
Speaker 1: two thousand eleven to two thousand fourteen period where US

681
00:36:31,000 --> 00:36:34,480
Speaker 1: supply was gushing displacing the world and the oil price

682
00:36:34,600 --> 00:36:38,120
Speaker 1: held up for so long, that was probably the surprise.

683
00:36:38,800 --> 00:36:42,200
Speaker 1: And you know, ultimately he was extremely helpful for US

684
00:36:42,600 --> 00:36:47,120
Speaker 1: UM in avoiding petrol sensitive emerging markets, avoiding petrol sensitive

685
00:36:47,160 --> 00:36:49,720
Speaker 1: debt towards the end of that period, and then getting

686
00:36:49,800 --> 00:36:53,400
Speaker 1: right back in uh and altering our allocations to to

687
00:36:53,520 --> 00:36:56,480
Speaker 1: really get positively geared on oil. And I'll tell you

688
00:36:56,560 --> 00:36:59,359
Speaker 1: that the you know, the City Oil team has been

689
00:36:59,400 --> 00:37:02,680
Speaker 1: cautious very near term. Uh. Now, I think you're gonna

690
00:37:02,680 --> 00:37:06,000
Speaker 1: remember that petroleum is the commodity that does nothing but

691
00:37:06,120 --> 00:37:09,440
Speaker 1: boom and bust. And the fact that uh, you know,

692
00:37:09,600 --> 00:37:12,799
Speaker 1: exploration activity around the world's down six over the past

693
00:37:12,800 --> 00:37:15,359
Speaker 1: few years, you know, positions it differently. I don't think

694
00:37:15,400 --> 00:37:19,920
Speaker 1: you are looking at January two sixteen situation again. But

695
00:37:20,360 --> 00:37:22,480
Speaker 1: you know, it's been a meaningful recovery of doubling from

696
00:37:22,480 --> 00:37:24,839
Speaker 1: that low. Are you surprised at the integrity of this

697
00:37:25,120 --> 00:37:27,360
Speaker 1: deal with OPEC and non OPEC producers that that it

698
00:37:27,400 --> 00:37:29,960
Speaker 1: seems like most members, most parties to that deal have

699
00:37:30,040 --> 00:37:32,440
Speaker 1: upheld there there into the bargain. What's fascinating. And you

700
00:37:32,480 --> 00:37:34,000
Speaker 1: know one of the things that we hear is that

701
00:37:34,080 --> 00:37:36,480
Speaker 1: just real long term thinking. Now, I don't know if

702
00:37:36,520 --> 00:37:39,280
Speaker 1: we're doing a lot of real long term thinking. Um,

703
00:37:39,320 --> 00:37:41,799
Speaker 1: you know, you take a look what's happened in the

704
00:37:41,840 --> 00:37:46,920
Speaker 1: United States. It's been really remarkable flexible supply response. I

705
00:37:46,920 --> 00:37:48,760
Speaker 1: think that the US is going to get a larger

706
00:37:48,800 --> 00:37:53,000
Speaker 1: share of global petroleum output. Uh. And that's great for

707
00:37:53,080 --> 00:37:56,640
Speaker 1: volume statistics, a lot of businesses that are tied uh

708
00:37:56,680 --> 00:38:01,279
Speaker 1: to uh, you know, American energy production. But you know,

709
00:38:01,320 --> 00:38:04,400
Speaker 1: it does mean that further out, the price recovery is

710
00:38:04,400 --> 00:38:06,160
Speaker 1: not going to be as extreme. I mean, you know,

711
00:38:06,320 --> 00:38:09,720
Speaker 1: shale has you know, lower the equilibrium price. I imagine

712
00:38:09,719 --> 00:38:11,840
Speaker 1: you've been thinking a lot about what's happening not happening

713
00:38:12,080 --> 00:38:14,000
Speaker 1: in Washington. D C looked at your note about the

714
00:38:14,239 --> 00:38:16,040
Speaker 1: Affordable Care Act and you noted that it would have

715
00:38:16,239 --> 00:38:19,759
Speaker 1: a fiscal consequences changing we're removing that law. How are

716
00:38:19,760 --> 00:38:22,719
Speaker 1: you watching what's unfolding there and what could those consequences be?

717
00:38:23,360 --> 00:38:29,080
Speaker 1: Largely well, look the how financing health care changes. What

718
00:38:29,280 --> 00:38:32,400
Speaker 1: changes on the margin there, you know, are not important

719
00:38:32,400 --> 00:38:35,680
Speaker 1: as important to us in terms of driving the economic outlook,

720
00:38:35,719 --> 00:38:38,960
Speaker 1: the market outlook as to whether or not they accomplish Uh,

721
00:38:39,000 --> 00:38:41,840
Speaker 1: these big, big tax cuts that the President talked about

722
00:38:42,120 --> 00:38:44,480
Speaker 1: in his speech. You're quoting him there, yes, sporting him there?

723
00:38:44,600 --> 00:38:48,319
Speaker 1: So um, you know, whether the corporate tax goes to

724
00:38:49,320 --> 00:38:52,400
Speaker 1: what kind of offsets there are? Is there some element

725
00:38:52,480 --> 00:38:55,360
Speaker 1: of a border adjustment tax? Um? You know, whether we

726
00:38:55,480 --> 00:38:58,560
Speaker 1: get income tax rates down significantly. You know, all of

727
00:38:58,600 --> 00:39:02,840
Speaker 1: these things depend on you know, one or two votes

728
00:39:02,920 --> 00:39:04,799
Speaker 1: this year, and they really will have only one or

729
00:39:04,800 --> 00:39:07,880
Speaker 1: two chances to do this simple majority is city bank.

730
00:39:07,960 --> 00:39:10,160
Speaker 1: And you know, within the thirty forty people that you

731
00:39:10,239 --> 00:39:12,640
Speaker 1: deal with every day and trying to come up with

732
00:39:12,680 --> 00:39:16,840
Speaker 1: a nation and worldview, if you changed your timeline of

733
00:39:16,880 --> 00:39:19,880
Speaker 1: what you just said based on what you've observed from

734
00:39:19,920 --> 00:39:23,440
Speaker 1: the healthcare debate literally the last seventy two hours. No,

735
00:39:23,560 --> 00:39:27,959
Speaker 1: absolutely not, President Trump. President is it six or Seveix?

736
00:39:28,920 --> 00:39:32,120
Speaker 1: We we we just talked about this on the walk

737
00:39:32,200 --> 00:39:34,799
Speaker 1: over to the Pierre hotel. They you know, don't tell

738
00:39:34,880 --> 00:39:39,600
Speaker 1: him Skarski Volks was down today. I was in Paris

739
00:39:39,640 --> 00:39:42,640
Speaker 1: with French shepherding around. No, no, but you know the

740
00:39:42,680 --> 00:39:45,120
Speaker 1: idea that okay, we know everything in a couple of days.

741
00:39:45,520 --> 00:39:47,719
Speaker 1: You know when the timeline, you know is the next

742
00:39:47,800 --> 00:39:50,640
Speaker 1: five months. You know, even where we go on the

743
00:39:50,680 --> 00:39:53,920
Speaker 1: European elections, you know, the French election out in a

744
00:39:53,920 --> 00:39:56,520
Speaker 1: couple of months. We're gonna have lots of drama over this.

745
00:39:56,640 --> 00:39:59,319
Speaker 1: And to just presume, you know, because of the news

746
00:39:59,360 --> 00:40:00,880
Speaker 1: of the last couple days, I mean, you would have

747
00:40:00,920 --> 00:40:02,600
Speaker 1: made that mistake back in two thousand nine with the

748
00:40:02,640 --> 00:40:05,600
Speaker 1: passage of the a C. A patiently waiting Stephen Whiting

749
00:40:05,600 --> 00:40:09,040
Speaker 1: of City Group through our James Diamond interview, you spent

750
00:40:09,120 --> 00:40:12,399
Speaker 1: a lot of uh time with us this morning, Steve

751
00:40:12,440 --> 00:40:14,680
Speaker 1: Whiting help us here on morning in America? I mean

752
00:40:14,840 --> 00:40:18,280
Speaker 1: Mr Diamond obviously talking his book is CEOs or want

753
00:40:18,960 --> 00:40:23,240
Speaker 1: to do where is the City Group Estimate of American GDP?

754
00:40:23,640 --> 00:40:26,839
Speaker 1: Because the first court is a little shaky? Right? Yes? Well, look,

755
00:40:27,000 --> 00:40:30,280
Speaker 1: you know you just saw the trade deficit UM blowout

756
00:40:30,880 --> 00:40:35,240
Speaker 1: in the month of January. UM, you've seen auto sales,

757
00:40:35,360 --> 00:40:39,239
Speaker 1: which you know have reached remarkably good levels, UM, just

758
00:40:39,440 --> 00:40:42,360
Speaker 1: not pick up further. So some of the sentiment readings

759
00:40:42,600 --> 00:40:45,520
Speaker 1: UM have you know, burned higher. Now. I did get

760
00:40:45,640 --> 00:40:48,319
Speaker 1: very good news yesterday out of the ADP report, and

761
00:40:48,360 --> 00:40:51,000
Speaker 1: it looks like head count may continue to outperform with

762
00:40:51,000 --> 00:40:54,439
Speaker 1: tomorrow's and employment data. But you know, this early part

763
00:40:54,440 --> 00:40:56,920
Speaker 1: of the year, you know, we've had higher energy costs,

764
00:40:57,000 --> 00:41:01,200
Speaker 1: higher consumer prices, uh, and no tax cuts yet. So

765
00:41:01,320 --> 00:41:04,680
Speaker 1: it really comes down to again this little gap period

766
00:41:04,800 --> 00:41:09,759
Speaker 1: here of higher prices and no new stimuluts. And when

767
00:41:09,760 --> 00:41:13,080
Speaker 1: we look out later with the likelihood that we will

768
00:41:13,160 --> 00:41:16,480
Speaker 1: get substantial personal income tax cuts, I think that you

769
00:41:16,480 --> 00:41:19,440
Speaker 1: will see also an investment response. You'll see a pickup

770
00:41:19,440 --> 00:41:21,360
Speaker 1: and growth. But it's closer to the turn of the

771
00:41:21,400 --> 00:41:23,600
Speaker 1: year into two thousand eighteen. It was destined to be

772
00:41:23,640 --> 00:41:27,080
Speaker 1: a strengthening out look more and Calendar two thousand eighteen.

773
00:41:27,160 --> 00:41:29,440
Speaker 1: Chefney Diamonds said, in Europe, the banking problems are not

774
00:41:29,520 --> 00:41:32,080
Speaker 1: as big as some people say. What's he seeing that

775
00:41:32,160 --> 00:41:35,799
Speaker 1: we're not? When he looked at the European banking system. Well, um,

776
00:41:35,800 --> 00:41:38,600
Speaker 1: you know, there was the mention of the ability to

777
00:41:38,880 --> 00:41:43,680
Speaker 1: take bad assets and send those two other investors. Uh.

778
00:41:43,680 --> 00:41:45,960
Speaker 1: And the reality is of the world is still quite

779
00:41:46,000 --> 00:41:50,200
Speaker 1: willing to take risk, it's able to recapitalize banks, it's

780
00:41:50,239 --> 00:41:54,560
Speaker 1: able to take advantage of discounted assets where they see that. Uh.

781
00:41:54,600 --> 00:41:56,759
Speaker 1: And so this is not the environment of let's say

782
00:41:56,800 --> 00:41:59,319
Speaker 1: two thousand nine, which would be the complete opposite where

783
00:41:59,360 --> 00:42:02,439
Speaker 1: even you know, sort of lots of good investments had

784
00:42:02,520 --> 00:42:06,680
Speaker 1: remarkably high yields and it became impossible, you know, to uh,

785
00:42:06,760 --> 00:42:09,520
Speaker 1: to get investors to even take a really good opportunity.

786
00:42:09,680 --> 00:42:12,359
Speaker 1: We started off just talking about the prospects of taxi

787
00:42:12,440 --> 00:42:15,600
Speaker 1: forward and and changes to the Affordable CARECT. How about regulation?

788
00:42:15,640 --> 00:42:17,840
Speaker 1: Jamie Diamond talked about that some that he said, nobody's

789
00:42:17,840 --> 00:42:20,799
Speaker 1: proposing here a wholesale redo of Dodd Frank or taking

790
00:42:20,840 --> 00:42:22,960
Speaker 1: away Dodd Frank completely. How do how do you factor

791
00:42:23,040 --> 00:42:26,239
Speaker 1: in what you know, what changes to that? Because well,

792
00:42:26,239 --> 00:42:28,480
Speaker 1: I think if anybody, um wants to sort of a

793
00:42:28,560 --> 00:42:32,560
Speaker 1: quantitative estimate of like how much deregulation means for for GDP,

794
00:42:32,760 --> 00:42:35,080
Speaker 1: they're not gonna have an historical basis to go on this.

795
00:42:35,920 --> 00:42:38,080
Speaker 1: But you know, a lot of these things are sunk costs.

796
00:42:38,160 --> 00:42:42,480
Speaker 1: I mean, we uh, the financial system has had a remarkable,

797
00:42:42,800 --> 00:42:46,400
Speaker 1: remarkable recapitalization in the United States more than in other regions,

798
00:42:46,760 --> 00:42:49,920
Speaker 1: bank equity, capitalist tangible common equity levels. Forget what the

799
00:42:49,960 --> 00:42:52,680
Speaker 1: banks have done in terms of leverage ratios. They've doubled.

800
00:42:52,880 --> 00:42:54,880
Speaker 1: Now that's a sunk cost if you don't have to

801
00:42:54,920 --> 00:42:56,759
Speaker 1: add to that cost going forward. It's great, really of

802
00:42:56,840 --> 00:42:59,759
Speaker 1: it in the great distortion that we're living. And you're

803
00:43:00,080 --> 00:43:03,040
Speaker 1: truly one of the experts of linking profits to the

804
00:43:03,080 --> 00:43:08,760
Speaker 1: American economy. When do we get normal behavior animal spirits

805
00:43:08,760 --> 00:43:12,920
Speaker 1: of American companies. They're not investing, They've got cheap, funny

806
00:43:12,920 --> 00:43:16,200
Speaker 1: money to do all sorts of big deals with. When

807
00:43:16,200 --> 00:43:19,480
Speaker 1: do we get back to normal given the new enthusiasm

808
00:43:19,520 --> 00:43:23,000
Speaker 1: about animal spirits. Look, I think that American companies, you know,

809
00:43:23,120 --> 00:43:27,279
Speaker 1: are not going to be so incredibly bullish that they

810
00:43:27,280 --> 00:43:31,000
Speaker 1: will experiment a great deal. Uh, And you know, sort

811
00:43:31,000 --> 00:43:34,320
Speaker 1: of take a lot of chances on just wasted investment

812
00:43:34,600 --> 00:43:36,279
Speaker 1: now and a lot of those cases, you know, you

813
00:43:36,320 --> 00:43:37,759
Speaker 1: look back and you said, well, that was a very

814
00:43:37,760 --> 00:43:40,200
Speaker 1: strong growth rate, but it wasn't sustainable. So I think

815
00:43:40,200 --> 00:43:42,200
Speaker 1: there's a good chance that we pick up something that

816
00:43:42,239 --> 00:43:43,800
Speaker 1: we move the needle up, but it's not going to

817
00:43:43,880 --> 00:43:46,200
Speaker 1: be an investment booming. Stephen wayting you. Thank you so

818
00:43:46,280 --> 00:43:47,960
Speaker 1: much with sitting here at this morning. Thank you for

819
00:43:48,040 --> 00:43:59,279
Speaker 1: perspective across our early morning hours. Thanks for listening to

820
00:43:59,320 --> 00:44:05,399
Speaker 1: The Bloomberg's Vyless podcast. Subscribe and listen to interviews on iTunes, SoundCloud,

821
00:44:05,800 --> 00:44:10,040
Speaker 1: or whichever podcast platform you prefer. I'm out on Twitter

822
00:44:10,120 --> 00:44:13,920
Speaker 1: at Tom Keene. David Gura is at David Gura. Before

823
00:44:13,960 --> 00:44:18,320
Speaker 1: the podcast, you can always catch us worldwide. I'm Bloomberg Radio,

824
00:44:30,800 --> 00:44:34,319
Speaker 1: brought you by Bank of America Mary Lynch. Dedicated to

825
00:44:34,400 --> 00:44:38,280
Speaker 1: bringing our clients insights and solutions to meet the challenges

826
00:44:38,440 --> 00:44:42,160
Speaker 1: of a transforming world. That's the power of global connections.

827
00:44:42,520 --> 00:44:47,000
Speaker 1: Mary Lynch, Pierce Feeder and Smith Incorporated Member s I

828
00:44:47,200 --> 00:44:47,480
Speaker 1: p C.