Speaker 1: Bloomberg Audio Studios, podcasts, radio news from the heart of
Speaker 1: where innovation, money and power collide in Silicon Valley and beyond.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: Live from New York and Caroline Hyde and this is
Speaker 2: Bloomberg Technology coming up markets. They are on edge as
Speaker 2: trade concerns holt the four day winning street for tech stocks.
Speaker 2: This as President Trump announces plans to impose one hundred
Speaker 2: percent tariffs of films produced overseas, slamming media companies and Microsoft,
Speaker 2: surpassing Apple becoming the largest US company by market value.
Speaker 2: And in just a few minutes, Treasury Secretary Scott best
Speaker 2: And will be speaking from the Milking Conference in Los Angeles.
Speaker 3: We'll bring you that.
Speaker 2: Conversation live as it gets underway. The President Trump is
Speaker 2: taking aim at the movie industry and announcing plans to
Speaker 2: impose check this out, one hundred percent tariff on films
Speaker 2: produced overseas. Now is all in a post on truth
Speaker 2: social adding quote, we want movies made in America again.
Speaker 2: Bloommeg's Tyler Kennell joins us Now for more details and
Speaker 2: in fact, movie moguls in the industry went to the
Speaker 2: President saying we want movies made in the US with
Speaker 2: tax credits, he proposes something very different.
Speaker 4: Yeah, hey, Caroline. While President Trump has often taken the
Speaker 4: stick verse cared approach, saying no to those subsidies and
Speaker 4: incentives instead of yes to his tariff plans. As you
Speaker 4: alluded to there, Bloomberg News reporting that John Voight and
Speaker 4: his agent met with President Trump at Mara a Lago
Speaker 4: over the weekend and asked him to put forward some
Speaker 4: tax excentives, including expanding a current tax credit that would
Speaker 4: help boost production in the US. But there's still now
Speaker 4: that he is pursuing this tariff route. There's a lot
Speaker 4: of big questions here, including how will a movie actually
Speaker 4: be valued for tariff purposes. Movies are, of course, more
Speaker 4: of a service instead of a good. Not to mention
Speaker 4: that one film could be produced in multiple locations. Does
Speaker 4: this extend to foreign based production companies or US based
Speaker 4: production companies that make their movies overseas. What we do
Speaker 4: know is that President Trump has indicated that he would
Speaker 4: invoke these tariffs on the basis of national security concerns.
Speaker 3: That signals two things for US.
Speaker 4: One, that's likely the justification that this White House will
Speaker 4: take Whether or not that means they're going to evoke
Speaker 4: IIBA or Section two thirty two really remains to be seen.
Speaker 4: Since we haven't actually seen an executive order putting these
Speaker 4: into motion. We do know that the USTR and Commerce
Speaker 4: Department are working on looking into this, and the second
Speaker 4: thing it indicates is that these tariffs would likely face
Speaker 4: some heavy legal scrutiny if they are put into effect.
Speaker 4: As you mentioned, the music the movie industry was caught
Speaker 4: pretty off guard by the announcement.
Speaker 2: I mean, we're seeing sir an analysts saying this would
Speaker 2: just reap devastation upon the US entertainment industry tailer. More broadly,
Speaker 2: costs would rise the many, but remind us of perhaps
Speaker 2: what the anxiety has been why other countries US outside
Speaker 2: the US. We think the UK, we think Canada have
Speaker 2: managed to pull away a lot of US production.
Speaker 4: Right, and that really does have to do with the
Speaker 4: tax incentives and lower labor costs as well as production costs.
Speaker 5: And the Most Picture.
Speaker 4: Association does say that employees about two point three two
Speaker 4: million people in the US in this industry alone, but
Speaker 4: actually pulled some other statistic for you, which is that
Speaker 4: US spending on film and TV production fell twenty eight
Speaker 4: percent between twenty twenty one and twenty twenty four, according
Speaker 4: to data from research firm fraud Pro and its countries
Speaker 4: that you're talking about, like Australia, New Zealand, the UK,
Speaker 4: also Canada that have really pulled ahead when it comes
Speaker 4: to lessening these higher costs in order to make movies,
Speaker 4: and quickly, I will just throw one other country in there,
Speaker 4: because this isn't the first time that we've seen movies
Speaker 4: come into this trade war of calculation and talk. It's
Speaker 4: China actually not necessarily that they've been taking US production,
Speaker 4: but of course, as you well know, last month they
Speaker 4: did say that they were going to restrict US of
Speaker 4: Film's access to their market. So it's kind of continuing
Speaker 4: how we're seeing these tariffs really go beyond just what
Speaker 4: we traditionally think about.
Speaker 2: Certainly, Tyler Kendall, with all the latest from the White House,
Speaker 2: we thank you. Now let's get more market reaction, not
Speaker 2: just media entertainment stocks, but more broadly. Daniel Morgan's with
Speaker 2: us senior portfolio manager that's the Nervous Trust Company, and Daniel,
Speaker 2: you focus mainly on the Magnificent seven, big tech and
Speaker 2: chips more broadly rather than media names. But it does
Speaker 2: feel that once again tariffs are the eye of the storm.
Speaker 6: Yeah, so, Caroline, I mean it keeps extending to different groups.
Speaker 6: I mean, obviously it's going to affect a company like Netflix,
Speaker 6: which is kind of used to be in the talk
Speaker 6: of those saying magnificent seven. But again, you know, Caroline,
Speaker 6: if you look at the tariffs in terms of all
Speaker 6: these different industry groups, it seems like technology is the
Speaker 6: hardest hit. Even though there's a reprieve on PCs and smartphones,
Speaker 6: you don't know if that reprieve is going to be
Speaker 6: lifted up. And chips another sector that is obviously heavily
Speaker 6: impacted by tariffs. So that's really been the you know,
Speaker 6: black cloud over the group that's kind of kept it
Speaker 6: from rebounding like the S and P five hundred has.
Speaker 6: It's still a down about fifteen to sixteen percent off
Speaker 6: mid February highs, where the SMP is only off about
Speaker 6: maybe eight to ten percent. So it's a tough, tough sector,
Speaker 6: not only media and movies, but also in the tech sector.
Speaker 2: That's going into individual names, Daniel, because of course we
Speaker 2: just talked about how Apple has switched places with Microsoft,
Speaker 2: it's no longer the most valuable company on the SMP
Speaker 2: for example, we seem to see hardware hit the hardest
Speaker 2: at the moment. Is Apple just one that you cannot
Speaker 2: rebuy into until as a future catalyst, Carolin.
Speaker 6: Apple's a tough stock because before the teriffs even came out,
Speaker 6: there were a lot of concerns that there would be
Speaker 6: a delay in users upgrading to the new iPhones because
Speaker 6: they didn't have the same AI serie personal assistant technology
Speaker 6: that everybody was hoping for that would be unveiled. Looks
Speaker 6: like it's going to go into the iPhone seventeen that's
Speaker 6: not coming out to the fall. If you look at
Speaker 6: the most recent quarter, even though there were no direct
Speaker 6: tariffs at the time, I mean, iPhone revenues were only
Speaker 6: up about two percent.
Speaker 3: So they are in a really.
Speaker 6: Difficult position caring because they are so heavily entrenched in
Speaker 6: the Pacific Rim, not just China, but through all their
Speaker 6: supply chains and manufacturing. They do about fifteen percent in India,
Speaker 6: but for them to move that out of that part
Speaker 6: of the world is going to be very challenging.
Speaker 5: So they have a very tough road.
Speaker 6: To go, and there were factors and headwinds that were
Speaker 6: up against them even before the whole tariff news.
Speaker 2: And Daniel, we actually at least got some sort of
Speaker 2: admission of a lack of clarity from executives, and we
Speaker 2: got some feeling for fundamentals in earnings. We've still got
Speaker 2: earnings to come. I know you've been thinking about what
Speaker 2: AMD is going to give us. Tonight, we get pal
Speaker 2: Andeer and it's been a real winner over the last
Speaker 2: year or so. But even software feels a little bit
Speaker 2: of pressure today. You look for in some of these
Speaker 2: earning still left.
Speaker 6: Well, Palantar is a whole different game, Carolin, because they're
Speaker 6: in the defense industry, but they're a tech sector. But
Speaker 6: you know, looking into let's say advanced market Devices, which
Speaker 6: reports on Tuesday, we know that Intel, when they reported
Speaker 6: two weeks ago their data center group revenues were up
Speaker 6: ten percent. Will get another window into data center revenues.
Speaker 2: I'm afraid, Daniel, I'm going to have to leave it
Speaker 2: there for a moment, so kind of you to join us,
Speaker 2: but we have to go over to the Milken Conference
Speaker 2: in Los Angeles. Treasury Sectory Scott Besson has started speaking seventies.
Speaker 7: He had the rare combination of guts and intellect to
Speaker 7: defy the Wall Street consensus. With his heterodox approach to
Speaker 7: junk bonds, he pioneered a new asset class known today
Speaker 7: as high yield bonds. By staying true to his vision,
Speaker 7: Mike overturned decades of economic orthodoxy. He bootstrapped entirely new
Speaker 7: industries by redirecting billions of dollars in cap to non
Speaker 7: investment grade companies.
Speaker 5: His colleagues on Wall Street told.
Speaker 7: Him he was delusional and a fool, but ultimately history
Speaker 7: proved him right.
Speaker 5: Sound familiar like Mike Milkan.
Speaker 7: President Trump has no shortage of critics in establishment circles,
Speaker 7: but he proved them wrong in his first term, and
Speaker 7: he is proving them wrong again today. On President Trump's
Speaker 7: first day in office, he vowed to usher in a
Speaker 7: new golden age for our country, a golden age. America
Speaker 7: deserve a golden age. America deserves a golden age economy.
Speaker 7: So for the past one hundred days, we've been preparing
Speaker 7: the soil. We have uprooted government waste and harmful regulations.
Speaker 7: We have planted the seeds of private investment, and we
Speaker 7: have fertilized the ground with fresh tax legislation. Next, we harvest,
Speaker 7: and we want you to harvest with us. America is
Speaker 7: the showing point of global finance. We have the world's
Speaker 7: reserve currency, and the deepest and most liquid capital markets,
Speaker 7: and the strongest property rights. For these reasons, the United
Speaker 7: States is the premier destination for international capital, and the
Speaker 7: administration's goal is to make it even more appealing for
Speaker 7: investors like you. This morning, I will explain how we
Speaker 7: plan to achieve that goal. The primary components of the
Speaker 7: Trump economic agenda, trade, tax cuts, and deregulation, are not
Speaker 7: standalone policies. They are interlocking parts of an engine designed
Speaker 7: to drive long term investment in the American economy. Our
Speaker 7: goal with trade policy is to level the playing field
Speaker 7: for our great American workers and companies. With a level
Speaker 7: playing field, American industry can out compete all challengers, tariffs
Speaker 7: or engineer to encourage companies like yours to invest directly
Speaker 7: in the United States. Hire your workers here, build your
Speaker 7: factories here, make your products here.
Speaker 5: You'll be glad you did, not only because we have the.
Speaker 7: Most productive work force in the world, but because we
Speaker 7: will soon have the most favorable tax and regulatory environment
Speaker 7: as well. This is where tax incentives and deregulation come
Speaker 7: into play. You may have heard one big, beautiful bill
Speaker 7: floating around Congress. This bill is big and beautiful for
Speaker 7: Main Street America and investors alike. The President's signature tax
Speaker 7: legislation will prevent an enormous tax hike on Main Street
Speaker 7: by making the small business deduction permanent. It will also
Speaker 7: provide tax credits and deductions for research and innovation to
Speaker 7: stimulate investment in high tech operations. It will restore one
Speaker 7: hundred percent expensing for equipment while expanding that incentive to
Speaker 7: new factory construction. The objective to accelerate investment in American industry.
Speaker 7: To make that investment as seamless and rewarding as possible,
Speaker 7: President Trump has embraced an ambitious deregulation agenda. This includes
Speaker 7: expansive permitting reform. The President doesn't want to just drill,
Speaker 7: baby drill, He wants to build, baby build.
Speaker 5: To that end, he.
Speaker 7: Has signed executive orders to reduce the federal approval process
Speaker 7: for new energy and construction projects from several years to
Speaker 7: just a few months. This simple reform will unleash the
Speaker 7: creative potential of America's builders. It will empower business leaders
Speaker 7: like you to put your capital to work as quickly
Speaker 7: and efficiently as possible. The building renaissance will be fueled
Speaker 7: by the President's Energy Dominates agenda. Energy is the base
Speaker 7: layer of all economic activity.
Speaker 5: That's why the.
Speaker 7: Administration champions and all of the above approach to energy
Speaker 7: development to drive down the cost of doing business. I
Speaker 7: hope you can see the bigger picture now. The Trump
Speaker 7: economic agenda is more than the sum of its parts. Trade,
Speaker 7: tax cuts, and deregulation may be three distinct policies, but
Speaker 7: each policy is mutually reinforcing and acting in concert. They
Speaker 7: push toward the same goal to solidify our position as
Speaker 7: the home.
Speaker 5: Of global capital. The result of.
Speaker 7: The President's economic plan will be more more jobs, more homes,
Speaker 7: more growth, more factories, more critical manufacturing plans, more semiconductors,
Speaker 7: more energy, more opportunity, more defense, more economic security, more innovation.
Speaker 7: In short, more of all things we need the most.
Speaker 7: The President believes we can achieve more together. This is
Speaker 7: the abundant vision he has for the future. He wants
Speaker 7: everyone to be a part of it.
Speaker 5: Thousands of businesses are now catching the President's vision.
Speaker 7: Since he assumed office in January companies have pledged to
Speaker 7: invest trillions into the US economy. President Trump has secured
Speaker 7: more investment for our country in one hundred days than
Speaker 7: President Biden did during all four years. Entrepreneurs, too, are
Speaker 7: starting to understand what the President is.
Speaker 5: Trying to accomplish.
Speaker 7: Mart sold one of the highest levels ever recorded for
Speaker 7: new business applications. Many of these men and women, like
Speaker 7: many of you, are grasping that America First is a
Speaker 7: blueprint for.
Speaker 5: More abundant world for now. A parting thought.
Speaker 7: When I entered public service, I spent more than forty
Speaker 7: years in the asset management business. There one mantra guides
Speaker 7: one of the world's most successful investors. Never bet against America.
Speaker 7: Warren Buffett coined the phrase, and it's been his load
Speaker 7: star as long as he's been in the game. Never
Speaker 7: bet against America captures a time tested truth. The American
Speaker 7: economy is unstoppable. Throw whatever you will at our capital markets,
Speaker 7: the Great Depression, two World Wars nine to eleven, a
Speaker 7: COVID recession.
Speaker 5: Of the last few years, or sky high inflation.
Speaker 7: Each time the American economy gets knocked down, it gets
Speaker 7: back up again, and it gets back up even stronger
Speaker 7: than it was before US markets are anti fragile. Indeed,
Speaker 7: the entire history can be distilled into just five words
Speaker 7: up and to the right. On a long term horizon,
Speaker 7: it's it's never a bad time to invest in America,
Speaker 7: but especially now. The United States is entering a new
Speaker 7: golden age of economic prosperity for both Main Street and
Speaker 7: Wall Street. And we don't want anyone to get left behind.
Speaker 7: Come with us so we can build a more abundant
Speaker 7: America together.
Speaker 3: Thank you all, Please welcome Institute Chairman Michael Milkin.
Speaker 8: So, as a scholar in college, a leading university, an
Speaker 8: accomplished fund manager, former professor, and distinguished career in finance
Speaker 8: and academic, your range of life options was unlimited. What
Speaker 8: inspired you to choose the field of public service? Joining
Speaker 8: President Trump's administration in a very high profile and I
Speaker 8: should say high pressure role.
Speaker 5: I would agree on all the above.
Speaker 7: So, Mike, there was a long, long art desire for
Speaker 7: public service. I had tried or considered going to the
Speaker 7: Naval Academy, and I was applying in nineteen seventy nine.
Speaker 5: I wanted to serve my country.
Speaker 7: Due to central orientation, I was unable to so, even
Speaker 7: since I was a teenager. I wanted to serve my country,
Speaker 7: and I'd had a great career like many people in
Speaker 7: this room and finance, the country had been good to me,
Speaker 7: and as an economic history scholar, I was shocked at
Speaker 7: what was happening with these budget deficits. So last year
Speaker 7: six point seven percent of GDP highest ever when.
Speaker 5: We weren't at war, weren't in.
Speaker 7: A recession, and I wanted to come out from behind
Speaker 7: my desk and be part of the solution because I
Speaker 7: was afraid the four more years of that, and it
Speaker 7: was kind of a deeply cynical plan.
Speaker 5: I thought, run up the.
Speaker 7: Debt and then have to raise taxes and really buy
Speaker 7: me the American engine of growth, innovation, and opportunity.
Speaker 8: Well, we once again were very happy you took up
Speaker 8: that mission. And I can't think of a better person
Speaker 8: at this time to be the Secretary of the Treasury.
Speaker 5: Let me try.
Speaker 8: Over the years, we've had a number of Secretary's Treasuries
Speaker 8: that were not really into financial markets, and so you're
Speaker 8: the right person at the right time. But it's interesting
Speaker 8: when I think about it, and how do you strike
Speaker 8: the balance between the administration's goal of reindustrialization in the
Speaker 8: US and the risk of isolating the US economy.
Speaker 7: Well, I think that they're not mutually exclusive. And as
Speaker 7: I've said many times that obviously in this trade puzzle,
Speaker 7: China's the biggest piece.
Speaker 5: Where do we end up with China?
Speaker 7: And I said during IMF week in Washington, said, you know,
Speaker 7: it's possible that we could, as Ray Dalio might say,
Speaker 7: do a big, beautiful rebalancing that if we want more manufacturing,
Speaker 7: everyone agrees except Chinese leadership, that they need more consumption,
Speaker 7: we could actually do that together. And then look on
Speaker 7: the other side that getting better terms of trade is
Speaker 7: not always a right line.
Speaker 5: It's not always a pleasant process.
Speaker 7: But I think at the end, the trading relationships will
Speaker 7: be stronger, our security and values ties will still be there.
Speaker 5: I look back and I.
Speaker 7: Think about the example of NATO and German fiscal spending.
Speaker 7: So I lived in London for a long time, rand
Speaker 7: the Soro's office there, and since the well forever actually
Speaker 7: the whether it's a French president, the Italian Prime minister,
Speaker 7: people in Brussels were trying to break open the German piggybank,
Speaker 7: and President Trump not in a straight line, not in
Speaker 7: what would be what anyone would call a diplomatic manner
Speaker 7: has gotten NATO countries to step up and meet their
Speaker 7: spending requirements. I think these numbers are approximate, but I
Speaker 7: think only twenty five percent. When he came in in
Speaker 7: twenty seventeen, only twenty five percent of NATO country we're
Speaker 7: meeting their spinning requirements. Now I think only twenty five
Speaker 7: percent aren't. So the Germans for the first time are
Speaker 7: going to allegedly do a big fiscal spin which will
Speaker 7: drive European growth, And so can we do the same
Speaker 7: thing on trade?
Speaker 5: I think so.
Speaker 8: So let's talk maybe about a specific situation. You recently
Speaker 8: sign an historic economic partnership with Ukraine, and as you said,
Speaker 8: there was a little few bumps along the way. Can
Speaker 8: you walk us through the role that the Treasury played
Speaker 8: and what is expected to come out of this agreement?
Speaker 5: And let's hold backwards that. I was amused, gratified.
Speaker 7: To see that on Saturday as I was coming out here. Friday,
Speaker 7: as I was coming out here, Washington Post lead headline
Speaker 7: was Russia now nervous after US Ukraine signed deal, and
Speaker 7: that I believe that this would happen in February. President
Speaker 7: Trump believed that it would happen in February. And this
Speaker 7: was President Trump's idea. He likes negotiating, as you know
Speaker 7: a lot of people in this room probably know, and
Speaker 7: he likes creating negotiating leverage for himself and the Ukraine
Speaker 7: Investment partnership. The economic partnership was his idea, and he
Speaker 7: believed that it would do several things. One, it would
Speaker 7: create more leverage for him with the Russian leadership when
Speaker 7: it was time to go to them. So the idea
Speaker 7: was start with Ukraine, sign a deal that shows that
Speaker 7: there is no daylight between the US and the Ukrainian people.
Speaker 7: It would be a symbol to Ukrainian people that the
Speaker 7: US is still there. It would be a symbol to
Speaker 7: a tired American public, skeptical of more financial commitments, that
Speaker 7: it was possible to have a shared prosperity with Ukraine.
Speaker 7: And then it would in essence be a tacit security
Speaker 7: guarantee because of the economic partnership. I went to and
Speaker 7: just to give you the timeline. So he tests me
Speaker 7: with throwing up the document speaking with Ukrainians. I thought
Speaker 7: it was a good idea to actually go to Kiev.
Speaker 7: For anyone who hasn't been you fly to Poland, you
Speaker 7: take a ten hour night train the end of Kiev,
Speaker 7: and you do that to keep from the getting shot down,
Speaker 7: and which good And everyone was saying, oh, look, this isn't.
Speaker 5: A good deal. This isn't a good deal. And I said, well,
Speaker 5: if it's.
Speaker 7: Not a good deal, why did the Russians bomb Kiev
Speaker 7: for the first time? So I went on February tenth,
Speaker 7: the Russians bomb Kiev at four in the morning for
Speaker 7: an hour for the first time since November because they
Speaker 7: knew the train arrived at eight and so before I
Speaker 7: got there. So if the Russians, if we were pro
Speaker 7: Russian and this was a terrible deal for the Ukrainians,
Speaker 7: why didn't the Russians want it signed?
Speaker 5: So then.
Speaker 7: President Zelenski elected not to sign it that day. He
Speaker 7: elected not to sign it. At the Munich Security Conference
Speaker 7: a few days later, there was a little incident at
Speaker 7: the White House. Some of you may have seen. President
Speaker 7: Trump called it great TV and when the deal went
Speaker 7: south that day. And I actually think in terms of
Speaker 7: the final deal, and I'm sure you everyone in this
Speaker 7: room has seen it that sometimes the blow up, you
Speaker 7: end up with a better deal. So February twenty eighth
Speaker 7: was the blow up in the Oval, and what was
Speaker 7: going to be signed that day was actually just.
Speaker 5: A four page memorandum of understanding.
Speaker 7: After that blow up, Treasury made the decision to try
Speaker 7: to make the blow up into an opportunity and my team.
Speaker 7: I instructed my team to go straight to writing the
Speaker 7: full agreement, which is six different agreements, varying lengths, but
Speaker 7: hundreds of pages. So we worked on that document, and
Speaker 7: then when there was the recovery and trust between President
Speaker 7: Trump president Zelenski after the meeting at the Vatican, we
Speaker 7: signed the deal a few days later. And look, I
Speaker 7: think it's win when what it is not is one
Speaker 7: of these rapacious Chinese deals.
Speaker 5: Sign here, it's a loan to own.
Speaker 7: You're going to default on the debt. We're going to
Speaker 7: own all your minerals, and that's life. This is economic partnership.
Speaker 7: They put in assets, we put in capital from the DFC,
Speaker 7: American best practices and know how.
Speaker 5: And it's fifty to fifty. It's equity, not debt.
Speaker 7: And some of our European partners were criticizing me at
Speaker 7: the G seven and I said, you know, you know, guys,
Speaker 7: if you want to tray if you want to do
Speaker 7: a debt for equity swap, why don't you write off
Speaker 7: your Ukraine debt and we'll let you into our partnership.
Speaker 5: No one's called me yet.
Speaker 8: Well, you know, I think what struck me, mister Segrete
Speaker 8: was this major oil fine off Guiana and Venezuela rattling
Speaker 8: the sabers, and had sent a couple military ships. The
Speaker 8: US then asked them what you're doing because that's Exxon
Speaker 8: that's a US company. And I think that to me
Speaker 8: underlined part of the strength of this agreement.
Speaker 5: You struck.
Speaker 8: Let's talk about one element that many people have been
Speaker 8: concerned about, and that is what are the key components
Speaker 8: of deregulation. I know it's part of your economic strategy
Speaker 8: to spur growth. Are there any specific regulations that are
Speaker 8: at the top of your list for reform.
Speaker 5: Yes.
Speaker 7: As I said one of the smaller group meetings last night,
Speaker 7: maybe a few people in the room interested in private credit,
Speaker 7: and Treasury is taking the lead on financial deregulation, and
Speaker 7: I think private credit is an incredible new the bolt
Speaker 7: on to the world's deepest the breadth and death of
Speaker 7: the world's deepest capital markets, but the growth of private
Speaker 7: Credit tells me that the regulated banking system has been
Speaker 7: too tightly constrained.
Speaker 5: So we have set up a treasury.
Speaker 7: I convened something called FSOC Financial Stability Oversight Council, and
Speaker 7: President Trump tasks me with helping him choose the leaders
Speaker 7: for the financial regulators. So they have installed a new
Speaker 7: vice chair for Supervision at the FED, Mickey Bowen.
Speaker 5: We are going to have a new.
Speaker 7: OCC head FDIC, Paul Atkins has just taken over the SEC.
Speaker 7: Brian Quinn is at CFTC. So the regulators are aligned
Speaker 7: and we are going to be like safe, sound and
Speaker 7: smart and redoing regulated financial entities.
Speaker 5: And then, as I mentioned in my.
Speaker 7: Talk energy, that's a pretty easy playbook. But the real
Speaker 7: impetus is going to be on permitting across all industries.
Speaker 7: And that's where the EP comes in, putting pressure on
Speaker 7: state and regular The federal government's going to put pressure
Speaker 7: on state and local governments to speed up the process,
Speaker 7: the permitting process. So what's the use in giving one
Speaker 7: year depreciation if it's thirty six months to break ground.
Speaker 7: One CEO recently told me he was talking about the
Speaker 7: difference between doing business in Texas and Illinois. He said,
Speaker 7: we started a project in Texas. From the day we
Speaker 7: went to the city of Houston to talk about it
Speaker 7: to the day I cut the ribbon took two and
Speaker 7: a half years.
Speaker 5: In Chicago, we.
Speaker 7: Are still seven years into the planning process, so we
Speaker 7: want to make everyone look more like Texas.
Speaker 8: Well, you have you're in an area here called Malibu
Speaker 8: where maybe in fifteen years you can build a house.
Speaker 8: So we are very accussed them to this. Let me
Speaker 8: talk about another issue. It was in twenty seventeen that
Speaker 8: our theme of the Global Conference was building meaningful lives.
Speaker 8: Part of that was a reflection on the disruptions we
Speaker 8: saw emerging from advances in AI, robotics, digital assets. The
Speaker 8: world we felt was heading for significant change, and we
Speaker 8: scheduled dozens of sessions around that area. Eight years later,
Speaker 8: you're now the Treasury Secretary navigating the nation through these
Speaker 8: various changes. Give us a broad view as to how
Speaker 8: you see these issues today.
Speaker 7: Well, I said in my confirmation hearing that we have
Speaker 7: to win in AI and quantum that if the United
Speaker 7: States doesn't take the lead, if we don't win, everything
Speaker 7: else doesn't matter.
Speaker 5: If we lose the and I think.
Speaker 7: China's catching up, which is natural, but I think we
Speaker 7: will maintain.
Speaker 5: Our leadership on that.
Speaker 7: And again, what we are trying to do is not
Speaker 7: pick winners and losers.
Speaker 5: We are just.
Speaker 7: Trying to set the environment for the best opportunity for
Speaker 7: our entrepreneurs to succeed. Stop intellectual property theft, and in
Speaker 7: terms of making it accessible to all Americans, I think
Speaker 7: that's going to be very important.
Speaker 5: I was out on the campaign.
Speaker 7: Trail with President Trump and I was struck by there
Speaker 7: had been a big migration by the venture capital community
Speaker 7: President Trump. It so on one side, you've got the vcs,
Speaker 7: the most innovative the people in the world. You got
Speaker 7: Elon Musk, the richest in the world, and the presence.
Speaker 7: Penultimate rally that I went to was in Pittsburgh, and
Speaker 7: the steel workers showed up and they got their best on.
Speaker 7: They've got their hard hats, they've got their families. And
Speaker 7: the real idea is to make sure that innovators can
Speaker 7: innovate and steel workers can have the same quality of
Speaker 7: life and opportunity, and that their kids could be the
Speaker 7: Silicon could be the Silicon Valley entrepreneurs, or they can
Speaker 7: stay and have the same life or better that their
Speaker 7: folks had.
Speaker 5: In Pittsburgh.
Speaker 8: Well, that is a great goal and we hope we
Speaker 8: achieved it. From that standpoint, interest rates, you know, you've
Speaker 8: often talked how important that ten year interest rate level is,
Speaker 8: and I when I look at financial markets over a
Speaker 8: long period of times, I can sometimes identify when that
Speaker 8: end vigil had come into financial markets, by what period
Speaker 8: of time, and the interest rates. So in the nineteen seventies,
Speaker 8: particularly the volatility of financial markets, you saw over the
Speaker 8: next decade many of the people that were CFOs became
Speaker 8: CEOs because how you financed your company allowed it to exist.
Speaker 8: In the last few years, we've lost three as independent
Speaker 8: companies major financial institutions due to the fact that they
Speaker 8: had bought a quarter of a trillion of US government
Speaker 8: intermediate securities and borrowed overnight. So when you look at
Speaker 8: interest rates in the tenure, and as I mentioned to you,
Speaker 8: I got this app on my phone that anytime the
Speaker 8: US government's prices changed by more than two percent in
Speaker 8: two hours, off my phone goes.
Speaker 3: So in the nineteen.
Speaker 5: Fifties, please don't share that with the president.
Speaker 8: So in the nineteen fifties, if you were trading governments,
Speaker 8: it was like watching pain dry. You could see an
Speaker 8: entire variation of maybe two percent in price in an
Speaker 8: entire decade. We now have seen a variation of more
Speaker 8: than two percent, occurring more than one day. How do
Speaker 8: you see the importance of the level of interest rates
Speaker 8: in our economy and what you want to achieve.
Speaker 7: I think that I'm not going to talk about the FED.
Speaker 7: I said, I won't talk about their future mistakes. I'll
Speaker 7: only talk about their past mistakes. So I thought it
Speaker 7: was focused. I thought it was important to focus on
Speaker 7: the tenure. And the tenure has a lot of things
Speaker 7: wrapped in it. It's the short term rates, it's the
Speaker 7: term premium, and we're focused on creating the best environment
Speaker 7: for stable rates. And I think a lot of what
Speaker 7: we saw in April was this periodic unwinding that I've experienced,
Speaker 7: you've experienced, most people in this room have experienced in
Speaker 7: their career. I'm a big believer in the Hyman Minsky
Speaker 7: stability leads to instability. So I think we probably had
Speaker 7: a very stable period. A lot of leverage players built
Speaker 7: up very large positions. There was an uncertainty shock they're out.
Speaker 7: But what we're trying to do is to create go
Speaker 7: back to the from one point zero non inflationary growth.
Speaker 7: So I think if we can put non inflationary growth
Speaker 7: in place, and take back to your initial question, why
Speaker 7: am I sitting here, is to take away the credit
Speaker 7: risk of the US government, then I think rates will
Speaker 7: naturally come down. And as I've said before, there's an
Speaker 7: opportunity here that.
Speaker 5: If we can do it.
Speaker 7: The goal on one side, I call it reprivatizing the
Speaker 7: government or reprivatizing the US economy. On one side, we
Speaker 7: want to bring down government borrowing slowly, maybe decrease the
Speaker 7: deficit by one percent a year, so time President Trump
Speaker 7: leaves office, we're back at the long term average of
Speaker 7: about three and a half percent deficit to GDP, and
Speaker 7: the denominator grows faster than the numerator debt to GDP
Speaker 7: goes down, So we're decreasing the government in the economy
Speaker 7: at the same time we are right sizing government spending and.
Speaker 5: Government employment.
Speaker 7: And then on the other side, through financial deregulation, we're
Speaker 7: releveraging the private sector, and then the excess employment that
Speaker 7: was shed in the government economy can go to the
Speaker 7: private sector. One thing I've never lived in DC before,
Speaker 7: but one thing that really struck me was within a
Speaker 7: ten mile radius of DC. Twenty five percent of the
Speaker 7: nation's economy pulses through there, and that's too much. Traditionally
Speaker 7: it's about twenty one percent, and we've got to make
Speaker 7: sure we have a stewardship obligation to make sure that
Speaker 7: that is spent wisely.
Speaker 8: So we were making decision where to have the Milking
Speaker 8: Institute School of Public Health. Besides the fact the executive
Speaker 8: office building is one block away from GW, but every
Speaker 8: major decision on medical was located within a mile or so.
Speaker 8: And so the decision, ultimately, with the talent we had there,
Speaker 8: with Lynn Goldman and others, is we would go to
Speaker 8: GW because the decisions were being made there.
Speaker 5: As you know, we spend.
Speaker 8: Twelve years building this building across the street from your
Speaker 8: new home and the Treasury and the Center for the
Speaker 8: American Dream, and we thought it was a four year project.
Speaker 5: It turned out to be a twelve year project.
Speaker 8: But this passion for the ideal of American Dream, I
Speaker 8: believe is something you truly believe in. We've been asking
Speaker 8: ten thousand individuals in more than one hundred countries around
Speaker 8: the world that live there or have come here how
Speaker 8: they interpret that phrase. What does that mean? What does
Speaker 8: the American dream that you're going to protect for so
Speaker 8: many of us?
Speaker 5: What does it mean to you?
Speaker 7: It means a shared vision. We're going to approach the
Speaker 7: two hundred and fiftieth anniversary next year, or we will
Speaker 7: have the two hundred and fiftieth anniversary next year, and it's.
Speaker 5: What what does the next two point fifty look like?
Speaker 7: And to me, it's the equal opportunity for great outcomes.
Speaker 5: It's like I.
Speaker 7: Said, it's equal opportunity if you're one of the children
Speaker 7: of the construction workers in the Ducaine Arena on November fourth,
Speaker 7: that you might be sitting here because you founded a
Speaker 7: financial services company, or because you're a medical researcher, or
Speaker 7: it's the opportunity for people in this room to continue
Speaker 7: to prosper.
Speaker 5: But to me, it's two things.
Speaker 7: It is the fact that the system works and that
Speaker 7: there is mobility, that we get rid of these discouraging
Speaker 7: surveys of families that and children who don't think they're going.
Speaker 5: To do as well as their parents.
Speaker 7: So we need a belief in the system and we
Speaker 7: need to canue making sure that the system works.
Speaker 5: So to me, that's the American Dream.
Speaker 8: Well you've wrapped that up in in a bow for
Speaker 8: us here, and that what we have found in every
Speaker 8: survey for twelve years is the number one essential agreement
Speaker 8: condition that exists for the American dream was freedom to
Speaker 8: live your life, whether you wanted to be a steel worker,
Speaker 8: or whether you wanted to work in finance or wherever
Speaker 8: you wanted to pursue, or whether you wanted to be
Speaker 8: the soccer coach of your daughter's soccer team. So, mister Secretary,
Speaker 8: we couldn't be happier that you've took up the mantle
Speaker 8: of public service and we look forward.
Speaker 5: To your stewardship for the next few years. Thank you
Speaker 5: very much.
Speaker 2: Thick you you were listening to US Treasury Secretary Scott
Speaker 2: Lessont of course with Michael Milkin at the Milking conference
Speaker 2: over in Los Angeles, just tying up some of the
Speaker 2: statements that were made more broad by the Treasury Secretary
Speaker 2: talking about how the United States is anti fragile in
Speaker 2: particularly they dwelt upon the ten uere important to focus
Speaker 2: on the tenure Treasury and has lots of components to it.
Speaker 2: He's saying they're trying to create the best environment for
Speaker 2: stable rates. They want to go back to Trump one point, oh,
Speaker 2: non inflationary growth for the US economy, take credit risk
Speaker 2: out of government debt and bonds. More broadly, rates can drop,
Speaker 2: he thinks, and there's too much of the US economy
Speaker 2: pulsing around Washington, DC in particular, talked about his view
Speaker 2: on the American Dream, but also a little hint at
Speaker 2: what means for security more broadly, talking about the US
Speaker 2: Ukraine deal being a win win, wanting for the banking
Speaker 2: sector that stability, but talking about the system being too
Speaker 2: tightly constrained, too overregulated. And then to technology return and
Speaker 2: he said that the US must win on AI and quantum,
Speaker 2: but the China is indeed catching up. Let's check in
Speaker 2: on these markets post the Treasury Secretaries comments, we're still
Speaker 2: down five tens percent off youelng in then, as that
Speaker 2: one hundred have been trading around this range throughout the day.
Speaker 2: This is more a symptom of what's happening in grander
Speaker 2: scheme of Macro worried about trade tariff concerns, particularly focused
Speaker 2: on the world of Hollywood right now, where indeed the
Speaker 2: milking conferences upon us move on and have a look
Speaker 2: what's opening Crypto has been a risk asset that's been
Speaker 2: selling off as well. Bitcoined down by about two percent.
Speaker 2: We're at ninety eight hundred and fifty three, just showing
Speaker 2: that risk off attitude. But the individual socks that we
Speaker 2: want to keep an eye on because look, you are
Speaker 2: seeing pressure throughout the tech sector today, Netflix in the
Speaker 2: eye the stormers were worried about the movie industry and
Speaker 2: about content being produced. A BroadWare down by one point
Speaker 2: six percent. Dig into that in a moment. We still
Speaker 2: got earnings this week. Think AMD on Tuesday. Palenteer comes
Speaker 2: after the bell tonight for down three tenths of percent.
Speaker 2: Remember this stock has been on a tear up more
Speaker 2: than sixty percent so far this year. Software has won
Speaker 2: out and even when they're really focused on the defense sector.
Speaker 2: Apple off by more than three percent. It is no
Speaker 2: longer the most valuable company in the United States on
Speaker 2: the S and P five hundred. It's been supplanted by Microsoft.
Speaker 2: We're in so many problems for Apple right now post
Speaker 2: their earnings. Let's think into it. Because Bluemg's Mark German
Speaker 2: is standing by he too in LA But Mark, in
Speaker 2: this week's power On newsletter, you write that Apple faces
Speaker 2: like a make or break moment, a laundry list of
Speaker 2: once in a decade problems hitting at the same time.
Speaker 2: Tariff's front and center, but so much more Mark.
Speaker 5: Yeah, that's right.
Speaker 9: I mean Apple is able to deal with a lot, right,
Speaker 9: but right now they have I would say more than
Speaker 9: a lot going on. They have tariffs right that could
Speaker 9: up end product pricing, device planning, is supply chain. You
Speaker 9: had a judge in California rule last week that Apple
Speaker 9: must stop charging developers for in AT purchases completed outside
Speaker 9: of the App Store. Obviously, the vast majority of revenue
Speaker 9: Apple gets from the app store is in AT purchases.
Speaker 9: That's why Apple tried to protect that twenty seven thirty
Speaker 9: percent commission at such an extensive level. You have the
Speaker 9: threat of losing another twenty billion dollar business.
Speaker 5: The search deal with Google.
Speaker 9: Google obviously pays Apple that much to make the Google
Speaker 9: search engine the default provider on the Safari web browser
Speaker 9: across all of Apple's products and services, and so that
Speaker 9: is another lever that could potentially hurt Apple. You have
Speaker 9: the ongoing struggles in AI, you have a developer conference
Speaker 9: in June. You have the ongoing DOJ lawsuit you have
Speaker 9: increased scrutiny happenating in the European Union, in Korea and
Speaker 9: Japan constantly new threats of fines for a large percentage
Speaker 9: of their local businesses. And of course the backdrop is
Speaker 9: the company's performance in China, where a turnaround is very
Speaker 9: much needed after it continued annual declines there.
Speaker 2: And we saw that in their earnings posted just last week.
Speaker 2: Mark German. It's was always a must read. I urge
Speaker 2: of yours to go and check out Power on thanks
Speaker 2: to summarizing for us. I Meanwhile, let's get over to
Speaker 2: the world of big tech, from big tech to the
Speaker 2: big screen, because media stocks they're under pressure after President Trump,
Speaker 2: and that's his plans to impose tear are some movies
Speaker 2: produced overseas. Lucas Shaw standing by with more and look
Speaker 2: this feels this truth social post where we learn about
Speaker 2: a potential one hundred percent tariff has more questions than
Speaker 2: answers for the industry right now.
Speaker 10: I mean, without question, a lot of people were thrown
Speaker 10: off guard, very confused by what exactly it meant and
Speaker 10: also what Trump's real intentions are. You know, based on
Speaker 10: our reported we know that he spent some of The
Speaker 10: Weekend with actor John Voyd and Voights manager Stephen Paul.
Speaker 10: John Voyd is one of kind of Trump's ambassadors to
Speaker 10: try to figure out how to bring production back to
Speaker 10: this country. Keep in mind, there's still a lot of
Speaker 10: production that happens in the United States, but there has
Speaker 10: been a lot of production that has moved to places
Speaker 10: like the UK and Canada. You know, I think they
Speaker 10: talked about things like incentives, but Trump loves a tariff,
Speaker 10: and so he started talking about tariff.
Speaker 2: Well, stick thin carrot, and so we see who most
Speaker 2: implicated here, because Barcley's already coming out with a note
Speaker 2: basically saying we export more than three times and we
Speaker 2: import in terms of movie making, and you're hurting the
Speaker 2: very industry you're trying to help.
Speaker 10: Yeah, the Motion Picture Association, which is the trade group
Speaker 10: that represents all the Hollywood studios, has not said anything publicly,
Speaker 10: but they do have reports where they showed that the
Speaker 10: US is a net exporter, that we have a positive
Speaker 10: trade balance with every other country. I mean, you just
Speaker 10: think about it.
Speaker 5: The biggest, highest.
Speaker 10: Grossing movies of the year every year tend to be
Speaker 10: US movies. You know, the most watched TV shows the
Speaker 10: most popular streaming services. All of these are American products
Speaker 10: for the most part. You know, in terms of the impact,
Speaker 10: it's really hard to know without knowing how the tariffs
Speaker 10: to be applied.
Speaker 5: A lot of people have.
Speaker 10: Asked me, like, how do you even tear iff a movie?
Speaker 10: And I'm not sure what to tell.
Speaker 2: Them exactly what value is the movie at and where
Speaker 2: exactly who finding that revenue stream to hit Lucas Shaw,
Speaker 2: We appreciate it. I'm sure we're happing many more questions
Speaker 2: coming away soon. Meanwhile, though, coming up, you know, musk
Speaker 2: says Ai should be used to replace the functions currently
Speaker 2: done by some public workers. That conversation's up next, plus
Speaker 2: so much more for the milkn Conference. A conversation with
Speaker 2: the ny CEO Robin Vince is a.
Speaker 3: Blue met technology.
Speaker 2: Let's go back to the Milking Conference now for a
Speaker 2: conversation with bny CEO Robin Mince Romain mostictionally base as
Speaker 2: selling by.
Speaker 11: Thanks Carolin and live here on the Milkin stage. The
Speaker 11: CEO of B and Y joins us right now, Robin Vince.
Speaker 3: Robin, you're a man who's been traveling the world.
Speaker 11: You're a man with two trillion dollars in assets under management,
Speaker 11: fifty three trillion dollars under your custody.
Speaker 3: What are your clients asking you right now? Yeah, well
Speaker 3: there's a lot going on.
Speaker 12: So it's great, first of all, great to be with you,
Speaker 12: Great to be here at milk And this is one
Speaker 12: of those places where everything comes together from around the world.
Speaker 12: As you said, I have been traveling and actually you've
Speaker 12: just hid different things from clients in different places according
Speaker 12: to where you are. I've been in Europe, I've been
Speaker 12: in India, I've been in the Middle East.
Speaker 3: That's all over the course of the past couple.
Speaker 12: Of weeks, and I would say the sentiment varies a
Speaker 12: little bit. We're having to explain.
Speaker 3: So, first of all, there is a signal.
Speaker 12: A noise problem when we talk to our clients internationally.
Speaker 12: People can't really tell the difference between the tactics and
Speaker 12: the strategy of what's coming out.
Speaker 3: You know, what's the difference between tariffs.
Speaker 12: And real trade policy? What does it mean on deregulation?
Speaker 12: Why are these things happening? And so I think all
Speaker 12: us CEOs find themselves in this perspective.
Speaker 3: We were joking about this earlier on, but.
Speaker 12: We kind of have to be a bit explainers in
Speaker 12: chief first and foremost, so what's actually going on.
Speaker 3: That's what they're interested in.
Speaker 12: Now, within those continents there are different perspectives as well.
Speaker 12: So in India, there was a lot of conversation about, Okay,
Speaker 12: what are the opportunities for India, what might a trade
Speaker 12: deal look like? How could the India benefit from the
Speaker 12: opportunities associated with all of this? In Europe a little
Speaker 12: bit more what on earth is going on?
Speaker 3: Is the US a reliable partner?
Speaker 11: It's one thing to be confused by what's going on
Speaker 11: in the US, But are those clients actively or at
Speaker 11: least specifically.
Speaker 3: Talking about pulling away from the US?
Speaker 12: Well, I think some of them are thinking about it,
Speaker 12: and so in Europe I would say there's a little
Speaker 12: bit more of that narrative, less so in the Middle East.
Speaker 3: The Middle East a recognition that they are.
Speaker 12: Sort of sitting in the middle of the world geographically
Speaker 12: and also geopolitically in some cases, and so they observe
Speaker 12: what's going on, they take some reaction to it, but
Speaker 12: at the end of the day, they're interested in long
Speaker 12: term relationships. In Europe, I would say there's a little
Speaker 12: bit more of a reaction against it.
Speaker 3: Maybe they feel a little bit more that they've been.
Speaker 12: Put on the spot, and there are certainly conversations about
Speaker 12: can they derisk now, I say de risking is a
Speaker 12: little easier said than done.
Speaker 3: Sometimes there's a.
Speaker 12: Reason why the US capital markets are the world's greatest,
Speaker 12: the most liquid, the dollar supremacy, the treasury is the
Speaker 12: risk free asset the growth in the United States. It's
Speaker 12: not so easy to just say, hey, we're out up
Speaker 12: to the.
Speaker 13: Treasury market because this is where Bnymelan is a huge player.
Speaker 13: B and Y is this massive central intermediary.
Speaker 3: What is the risk?
Speaker 13: Ultimately, it's not just the liquidity concerns we've seen in
Speaker 13: the midst of the trade war. It is also what
Speaker 13: we're going to see in the future as we get
Speaker 13: closer to that X state. Do you have any concerns
Speaker 13: around how countries around the world might view the treasure Well.
Speaker 12: I think we all have to be very realistic about
Speaker 12: the fact that the treasury market is one of the
Speaker 12: world's most important markets.
Speaker 3: As you said, yes, liquidity was reduced. The depths at.
Speaker 12: The top of the order book was down probably about
Speaker 12: eighty percent or so at one point two or three
Speaker 12: weeks ago.
Speaker 3: Now that doesn't mean.
Speaker 12: That the market wasn't functioning. It was working really well.
Speaker 12: We were settling over twenty trillion dollars of treasuries a
Speaker 12: day and it was all working, but there was it
Speaker 12: was harder to move blocks of risk. Now it's a
Speaker 12: complicated problem because yes, we've got the x state. Yes,
Speaker 12: seven percent deficit is it's a significant thing.
Speaker 3: To be running and at some point that has to
Speaker 3: be brought under control. That is not a long term,
Speaker 3: tenable situation. It's got to be brought down to a
Speaker 3: more manageable number. So people are looking at that.
Speaker 5: Now.
Speaker 12: Compounding all of that is the question of okay, do
Speaker 12: people still have the faith in the United States and
Speaker 12: the treasury market? And that's why I would say, of
Speaker 12: course people are talking about it, but there are a
Speaker 12: lot of things that underpin the US treasury markets and
Speaker 12: the confidence, the dollar supremacy, the rule of law, the liquidity,
Speaker 12: and it's easier said than done to pull away from
Speaker 12: something like that.
Speaker 13: The Treasury Department has been talking about the potential to
Speaker 13: provide relief for the banking system via the SLR, the
Speaker 13: supplementary leverage ratio in order to make treasury markets function
Speaker 13: more easily in times of these sources of stress.
Speaker 3: Do you think that's necessary?
Speaker 13: Does there need to be regulatory relief more immediately and
Speaker 13: will it fix the problem?
Speaker 12: Well, I think it will be helpful, is the punchline
Speaker 12: answer to your question. And Secretary Bustance been pretty clear
Speaker 12: about this. He is a supporter of making sure that
Speaker 12: we have the deepest, most liquid market in the world
Speaker 12: in the treasury market to benefit the US taxpayer in
Speaker 12: the US economy. And so the question is what are
Speaker 12: all of the things that can be brought to bear
Speaker 12: to make that true. And this is a little bit
Speaker 12: of an extension of what the Secretary Beston and President
Speaker 12: Trump have said in terms of the policy.
Speaker 3: It's a three legged stool.
Speaker 12: They had objective around trade, they have an objective around taxes,
Speaker 12: and they also have a deregulat tree agenda. And what
Speaker 12: we need is we need banks and other market participants
Speaker 12: to be able to fully access the market and to
Speaker 12: intermediate and keep them liquid in the treasury market.
Speaker 3: And I think SLR reform is part of that equation.
Speaker 11: Is that liquidity there right now? And I specifically go
Speaker 11: back to the start of April when you had the
Speaker 11: big sell off in financial market, which a lot of
Speaker 11: people speculate was tied to a potential gum up and
Speaker 11: what was going on in thic Syncome specifically with treasuries.
Speaker 3: I wouldn't say there was a gum up.
Speaker 12: The infrastructure working fine, the rails were in good shape.
Speaker 12: What there was was a lack of buyers and we
Speaker 12: had a reduced liquidity in the market for sure.
Speaker 11: And that's not the same as I don't want to
Speaker 11: get into semantics, but isn't that the gum up?
Speaker 3: If the buyers aren't there then what I think they're
Speaker 3: two different things.
Speaker 12: One is is there an actual good operation in the market.
Speaker 3: Are things functioning properly? If you do a big trade,
Speaker 3: will it settle? Will it flow through?
Speaker 12: We've had problems in the past in the markets, so
Speaker 12: that hasn't been true. We didn't have any of those
Speaker 12: issues this time. This is a question of buyers and
Speaker 12: sellers coming together in the marketplace and was there enough liquidity?
Speaker 3: And it was down a lot.
Speaker 12: But that's where I think things like SLR reform can
Speaker 12: be helpful because.
Speaker 3: We want intermediaries to play a role.
Speaker 12: Banks have to play an important role in the treasury market.
Speaker 12: They used to but they've been moved out of the
Speaker 12: treasury market by rules like the SLR, and we're certainly
Speaker 12: actively in favor of thinking about that leverage ratio reform
Speaker 12: as the regulators are now talking about it now.
Speaker 3: The problem we brought up was the deficit.
Speaker 13: Realistically, another part of the agenda here for the White
Speaker 13: House is the tax reform as well. If you do
Speaker 13: see some of the President's measures get passed, do you
Speaker 13: have faith that the deficit has any chance of being
Speaker 13: anything closer to being closed.
Speaker 12: Well, it's going to be important that ultimately happened. Seven
Speaker 12: percent is not a long term, tenable situation to have
Speaker 12: as a gap, and so we need to see either
Speaker 12: on the tax side or on of course, the growth
Speaker 12: of the economy side.
Speaker 3: If you have a bigger economy, you can.
Speaker 12: Actually collect more taxes even if taxes are the same
Speaker 12: level or reduced, and so we want the economy to grow.
Speaker 3: Growth enables everything else. All right, Robin, we have to
Speaker 3: leave it there. I really appreciate you taking time.
Speaker 11: We're going to check out your panel a little bit later,
Speaker 11: live from the milkne stage. Robin Vince, the CEO of
Speaker 11: BNY Caroline.
Speaker 2: Great Interview Shnani Besac Remain ball stick.
Speaker 3: This is pretty big tech