1 00:00:03,120 --> 00:00:07,080 Speaker 1: This is Bloomberg Surveillance. I am modestly bullish near term, 2 00:00:07,120 --> 00:00:09,959 Speaker 1: but embarishing the media term. I expect the SMP to 3 00:00:10,080 --> 00:00:12,920 Speaker 1: decline to a low double digit percentage this year. I 4 00:00:12,920 --> 00:00:15,360 Speaker 1: think if we're going to take long dollar positions, I 5 00:00:15,400 --> 00:00:17,160 Speaker 1: think the euro is the way to go right now. 6 00:00:17,239 --> 00:00:20,200 Speaker 1: Short the euro along the dollar. I don't think inflation 7 00:00:20,320 --> 00:00:24,040 Speaker 1: is too loud. The public doesn't care that core PC 8 00:00:24,360 --> 00:00:27,440 Speaker 1: inflation is one point four percent. They're oblivious to it. 9 00:00:27,600 --> 00:00:31,880 Speaker 1: Bloomberg Surveillance your link to the world of economics, finance, 10 00:00:31,920 --> 00:00:35,880 Speaker 1: and investment on Bloomberg Radio. Good Morning, right Michael McKay 11 00:00:35,920 --> 00:00:39,120 Speaker 1: at seven am on Wall Street eight pm in Shanghai, 12 00:00:39,120 --> 00:00:42,080 Speaker 1: where G twenty finance ministers and central bankers are meeting 13 00:00:42,120 --> 00:00:45,720 Speaker 1: to save a world financial system that today at least 14 00:00:45,720 --> 00:00:49,400 Speaker 1: doesn't look a whole lot like it needs saving. That said, 15 00:00:49,440 --> 00:00:51,319 Speaker 1: there are a lot of problems out there for them 16 00:00:51,360 --> 00:00:53,599 Speaker 1: to talk about, and talk about them we will on 17 00:00:53,640 --> 00:00:57,560 Speaker 1: the show today. Bob formats with us in just a moment. First, though, 18 00:00:57,880 --> 00:01:00,800 Speaker 1: the markets giving no sign of imminent apps even China 19 00:01:00,920 --> 00:01:04,640 Speaker 1: Shanghai Composit up a percentage point today. Every major index 20 00:01:04,720 --> 00:01:06,920 Speaker 1: higher around the world in Europe right now the stock 21 00:01:06,959 --> 00:01:09,880 Speaker 1: six hundred up by four points one point one percent, 22 00:01:10,319 --> 00:01:12,759 Speaker 1: DAX is up a hundred and forty seven points one 23 00:01:12,800 --> 00:01:15,680 Speaker 1: point six percent, and here in the US, futures are 24 00:01:15,720 --> 00:01:19,120 Speaker 1: significantly higher. SMP emnies up ten points right now, half 25 00:01:19,160 --> 00:01:21,720 Speaker 1: a percent half percent gain for dowie Mini the up 26 00:01:21,760 --> 00:01:26,360 Speaker 1: eighty two, Nasdaq onemnies up twenty eight points, seven tenths 27 00:01:26,400 --> 00:01:31,520 Speaker 1: of eight percent. UH bonds little changed here or in Europe, 28 00:01:31,520 --> 00:01:33,959 Speaker 1: although we have seen a bit of a game four 29 00:01:34,000 --> 00:01:37,600 Speaker 1: bonds in the last hour or so. Ten year note 30 00:01:37,680 --> 00:01:40,920 Speaker 1: yield one point seven three percent, one point one eight 31 00:01:41,040 --> 00:01:43,200 Speaker 1: for the five year two years at seventy four basis 32 00:01:43,200 --> 00:01:46,440 Speaker 1: points deterioration in Europe negative fifty five basis points for 33 00:01:46,480 --> 00:01:48,880 Speaker 1: the German two year UH. If the G twenty makes 34 00:01:48,880 --> 00:01:51,720 Speaker 1: any news at all, it will affect currencies first, which 35 00:01:51,760 --> 00:01:55,840 Speaker 1: may be why there's almost no movement there. Everybody holding 36 00:01:55,880 --> 00:01:58,000 Speaker 1: their breath. I guess on currency trading desk the end 37 00:01:58,040 --> 00:02:01,800 Speaker 1: one twelve eighty one year one ten twenty six the pound, 38 00:02:01,840 --> 00:02:05,600 Speaker 1: of course, which has the overlay of Brexit unchanged one 39 00:02:05,960 --> 00:02:10,600 Speaker 1: nine six five Right now? Can I mention Richard Parrington 40 00:02:11,919 --> 00:02:17,080 Speaker 1: are funeral and obituary reporter in London about us. I 41 00:02:17,120 --> 00:02:21,600 Speaker 1: hope Lloyds, RBS, Lloyd's and RBS this week, Yes, are 42 00:02:21,720 --> 00:02:25,240 Speaker 1: just ugly well. RBS pushing out It's dividend of stockdown 43 00:02:25,280 --> 00:02:29,440 Speaker 1: now in London by UH seven point nine percent, so 44 00:02:29,960 --> 00:02:33,040 Speaker 1: they are having a bad day. Um. The good news 45 00:02:33,080 --> 00:02:36,720 Speaker 1: though in general across the screen and this week shouldn't 46 00:02:36,720 --> 00:02:39,280 Speaker 1: obscure the fact that do you look at RBS and 47 00:02:39,480 --> 00:02:43,000 Speaker 1: Standard charted all those banks UH from Shanghai, a Syria, 48 00:02:43,040 --> 00:02:46,440 Speaker 1: there are issues. Bob Hormetz, vice chairman of Kissinger Associates. 49 00:02:46,480 --> 00:02:49,240 Speaker 1: Prior to that, he served in a variety of government roles, 50 00:02:49,280 --> 00:02:52,120 Speaker 1: most recently is Under Secretary of State on the Economic 51 00:02:52,120 --> 00:02:54,480 Speaker 1: so Siety. Also spent time as vice chairman of Goldman 52 00:02:54,480 --> 00:02:58,680 Speaker 1: Sachs International. Bob, good morning, from what from your perch 53 00:02:59,680 --> 00:03:01,800 Speaker 1: if you were in the room, what's the biggest threat 54 00:03:01,840 --> 00:03:05,120 Speaker 1: to the global financial system that the ministers are talking about. 55 00:03:05,560 --> 00:03:08,200 Speaker 1: I think they're concerned about two things. One, there's a 56 00:03:08,280 --> 00:03:12,000 Speaker 1: large amount of debt out there, and there's very little 57 00:03:12,080 --> 00:03:16,000 Speaker 1: room in most countries, with the exception of China for 58 00:03:16,120 --> 00:03:20,359 Speaker 1: more fiscal stimulus. Monetary policy has been running on all 59 00:03:20,440 --> 00:03:23,799 Speaker 1: cylinders there's probably a little bit more room to stimulate 60 00:03:24,639 --> 00:03:29,640 Speaker 1: through expansion of money growth, but they're worried in particular 61 00:03:29,680 --> 00:03:33,079 Speaker 1: now with both of those much more limited in their 62 00:03:33,080 --> 00:03:35,960 Speaker 1: scope and opportunity, that there will be a lot of 63 00:03:36,040 --> 00:03:40,720 Speaker 1: currency volatility and competitive currency devaluation. And I think that's 64 00:03:40,720 --> 00:03:42,640 Speaker 1: what they're going to focus on to try to avoid 65 00:03:43,160 --> 00:03:46,240 Speaker 1: a rush to the bottom with countries devaluing their currencies, 66 00:03:46,480 --> 00:03:49,920 Speaker 1: because in many cases some will assume that's the default position. 67 00:03:49,920 --> 00:03:52,120 Speaker 1: If you want to stimulate, you've got to lower your currency. 68 00:03:52,560 --> 00:03:54,880 Speaker 1: I think that that is going to be one of 69 00:03:54,920 --> 00:03:58,440 Speaker 1: the major concerns to get greater stability in the currency 70 00:03:58,480 --> 00:04:02,840 Speaker 1: market and avoid mass of competitive evaluations. Mark Kearney, the 71 00:04:03,400 --> 00:04:05,440 Speaker 1: head of the Bank of England, started off the meeting 72 00:04:05,440 --> 00:04:08,240 Speaker 1: today by saying, that's a dumb idea to you know, 73 00:04:08,320 --> 00:04:11,400 Speaker 1: competitive evaluations negative and just don't do it. He's right, 74 00:04:11,520 --> 00:04:14,080 Speaker 1: we all lose. It's a race to the bottom. You've 75 00:04:14,120 --> 00:04:16,800 Speaker 1: been in these rooms, does anybody listen or do they 76 00:04:16,800 --> 00:04:18,520 Speaker 1: go back home and say, yeah, yeah, yeah, but we 77 00:04:18,600 --> 00:04:21,040 Speaker 1: gotta do what's important for us. Well. I think Mark's 78 00:04:21,200 --> 00:04:23,480 Speaker 1: absolutely right. We work together at Goldman SACS. He is 79 00:04:23,520 --> 00:04:27,080 Speaker 1: extremely good and very visionary about the risks to the system. 80 00:04:27,120 --> 00:04:30,159 Speaker 1: We really understand understands it quite well, and he's right 81 00:04:30,200 --> 00:04:33,880 Speaker 1: to issue that warning. And in fact, the Chinese Central 82 00:04:33,880 --> 00:04:37,400 Speaker 1: Bank Governor Joe Shao Schwan has also made the point 83 00:04:37,520 --> 00:04:41,520 Speaker 1: that China is not going to engage in competitive currency evaluation. 84 00:04:41,560 --> 00:04:45,520 Speaker 1: I think that's one reason that currencies are so stable today, 85 00:04:45,720 --> 00:04:49,000 Speaker 1: and that will be an important signal to the market 86 00:04:49,000 --> 00:04:52,400 Speaker 1: what the Chinese do. It's certainly not the only country 87 00:04:52,480 --> 00:04:55,799 Speaker 1: that has allowed its currency to go down, and in fact, 88 00:04:56,000 --> 00:04:58,560 Speaker 1: the markets are pushing it down. It's not the Chinese government. 89 00:04:58,760 --> 00:05:01,479 Speaker 1: The Chinese government actually has been intervening to prevent it 90 00:05:01,520 --> 00:05:04,640 Speaker 1: from going down further. But many governments now see that 91 00:05:05,160 --> 00:05:08,880 Speaker 1: as their growth option, allow the currency to decline, and 92 00:05:08,920 --> 00:05:11,400 Speaker 1: even if they don't want that as their primary option, 93 00:05:11,440 --> 00:05:14,560 Speaker 1: when they see other currencies declining, they want theirs to 94 00:05:14,600 --> 00:05:18,520 Speaker 1: decline as well so they don't lose competitive strength. So 95 00:05:18,560 --> 00:05:21,360 Speaker 1: it's a very complicated process, and you need a period 96 00:05:21,360 --> 00:05:24,400 Speaker 1: of stability and currency markets that would help a lot 97 00:05:24,520 --> 00:05:28,359 Speaker 1: to increase stability or at least retain a certain measure 98 00:05:28,360 --> 00:05:32,680 Speaker 1: of stability, and financial markets Bob hormats with kissingers. So 99 00:05:32,920 --> 00:05:36,400 Speaker 1: it's good morning everyone. Bloomberg Surveillance brought you by Investco. 100 00:05:36,480 --> 00:05:41,520 Speaker 1: Investco believes it's time to vene the benchmarks consider active 101 00:05:41,520 --> 00:05:45,640 Speaker 1: management and factor based strategies. Find out more at investco 102 00:05:45,720 --> 00:05:50,320 Speaker 1: dot com. Slash High Convictions. Bob Hormance with us with 103 00:05:50,400 --> 00:05:53,919 Speaker 1: a lot of different perspective here, and I think Bob, 104 00:05:54,000 --> 00:05:58,760 Speaker 1: the major question, uh, that that people have is what 105 00:05:58,839 --> 00:06:02,240 Speaker 1: we do with our war in policy? Forgetting about the 106 00:06:02,240 --> 00:06:06,440 Speaker 1: debates that we've had recently, what's the projection? You learned 107 00:06:06,480 --> 00:06:09,880 Speaker 1: a lot serving with Secretary Clinton. Pivot was the word 108 00:06:09,920 --> 00:06:13,920 Speaker 1: for a moment. There's different other ideas, including Henry Kissinger's 109 00:06:13,960 --> 00:06:17,240 Speaker 1: New World Order that's out there. What is the Hormats 110 00:06:17,440 --> 00:06:21,040 Speaker 1: foreign policy prescription? Well, I think there are two things 111 00:06:21,080 --> 00:06:23,680 Speaker 1: that are critically important, really three, but let me just 112 00:06:23,720 --> 00:06:28,880 Speaker 1: focus on to One is that we're seeing in Europe 113 00:06:29,800 --> 00:06:34,960 Speaker 1: a rise of nationalistic populist parties of the right and 114 00:06:35,080 --> 00:06:39,760 Speaker 1: the left. And that divide in Europe has been accentuated 115 00:06:39,760 --> 00:06:44,000 Speaker 1: by the refugee crisis. And what's happening is that individual 116 00:06:44,040 --> 00:06:49,279 Speaker 1: countries are being divided by populist politics. Uh, it's weakening Europe. 117 00:06:49,400 --> 00:06:53,919 Speaker 1: It's weakening European support for a Nado, and Putin is 118 00:06:53,960 --> 00:06:57,840 Speaker 1: playing on this by closing up to all these extremist 119 00:06:57,960 --> 00:07:01,840 Speaker 1: or highly populist parties. So the fragmentation or the risk 120 00:07:01,839 --> 00:07:06,760 Speaker 1: of a fragmentation of Europe reduces Europe's own economic potential, 121 00:07:06,760 --> 00:07:10,280 Speaker 1: but it also reduces Europe's role as a strong American 122 00:07:10,560 --> 00:07:13,840 Speaker 1: ally in the well. This goes back to your book 123 00:07:13,880 --> 00:07:16,240 Speaker 1: The Price of Liberty. Yes, and you could take your 124 00:07:16,280 --> 00:07:18,280 Speaker 1: what you didn't write it about Europe now, But if 125 00:07:18,280 --> 00:07:20,800 Speaker 1: you wrote your book The Price of Liberty right now 126 00:07:20,840 --> 00:07:23,760 Speaker 1: about Europe, what would you say? I would say that 127 00:07:23,800 --> 00:07:26,679 Speaker 1: the risk is that after World War Two, the US 128 00:07:26,800 --> 00:07:30,600 Speaker 1: wanted a strong economic Europe because that would strengthened growth 129 00:07:30,800 --> 00:07:33,800 Speaker 1: for the United States bigger trading partner, but also because 130 00:07:33,800 --> 00:07:37,680 Speaker 1: it would strengthen Europe's cohesion. This is a jam in 131 00:07:37,720 --> 00:07:42,960 Speaker 1: a vision, and also strengthened Europe's ability to resist Soviet pressures. 132 00:07:43,000 --> 00:07:45,920 Speaker 1: Now we're seeing a weaker Europe, and we're seeing Putin 133 00:07:46,000 --> 00:07:51,000 Speaker 1: take advantage of this by developing these confrontational areas like 134 00:07:51,360 --> 00:07:55,520 Speaker 1: Eastern Ukraine, but also trying to develop closer cozier ties 135 00:07:55,560 --> 00:07:58,720 Speaker 1: with Poland and Hungary and many other countries. So Europe 136 00:07:58,840 --> 00:08:02,040 Speaker 1: is a risky situation from from a geopolitical and from 137 00:08:02,040 --> 00:08:04,920 Speaker 1: an economic perspective. The other is Asia, and the United 138 00:08:04,960 --> 00:08:08,800 Speaker 1: States does need a strong t p P because it 139 00:08:08,880 --> 00:08:12,000 Speaker 1: has to demonstrate that we want to play a continuing 140 00:08:12,280 --> 00:08:16,360 Speaker 1: role in Asia. And a few marines in Darwin Australia 141 00:08:16,520 --> 00:08:19,080 Speaker 1: is not really the name of the game. The name 142 00:08:19,120 --> 00:08:21,760 Speaker 1: of the game is a stronger economic presence good for 143 00:08:21,800 --> 00:08:25,800 Speaker 1: American exports, because that's the still single biggest area of growth, 144 00:08:26,040 --> 00:08:28,480 Speaker 1: even though we don't pay as much attention to it 145 00:08:28,520 --> 00:08:30,960 Speaker 1: now but everything else going on, but it's still the 146 00:08:30,960 --> 00:08:33,640 Speaker 1: single biggest area of growth. And we also need to 147 00:08:33,640 --> 00:08:36,920 Speaker 1: demonstrate that we're going to be in Asia as a 148 00:08:36,960 --> 00:08:40,119 Speaker 1: major player for a long period of time for political 149 00:08:40,320 --> 00:08:43,640 Speaker 1: and for security reasons. So you need closer ties with 150 00:08:43,679 --> 00:08:48,120 Speaker 1: our European allies, and you need a stronger set of 151 00:08:48,120 --> 00:08:52,079 Speaker 1: trade relations with with Asia, particularly East Asia. And that's 152 00:08:52,080 --> 00:08:55,200 Speaker 1: going to be something that should be uh an important 153 00:08:55,240 --> 00:08:58,280 Speaker 1: element of our foreign policy. Back in the nineties, when 154 00:08:58,320 --> 00:08:59,880 Speaker 1: you and I first got to know each other running 155 00:09:00,040 --> 00:09:03,760 Speaker 1: in Asia with the Asian financial crisis, Bob Reubin would 156 00:09:03,760 --> 00:09:06,280 Speaker 1: walk into a room as the U. S. Treasury Secretary 157 00:09:06,360 --> 00:09:09,680 Speaker 1: and say basically this is what's going to happen where 158 00:09:09,679 --> 00:09:12,920 Speaker 1: that we are the superpower and this is what you 159 00:09:12,960 --> 00:09:16,280 Speaker 1: guys need to do. Who runs the world like that now? 160 00:09:16,440 --> 00:09:19,440 Speaker 1: Or are we in Ian Bremer's G zero world? We're 161 00:09:19,440 --> 00:09:21,440 Speaker 1: not really in a G zero world, but we're in 162 00:09:21,440 --> 00:09:25,760 Speaker 1: a multipolar world where a lot of countries have influence 163 00:09:26,440 --> 00:09:30,080 Speaker 1: over the course of the global economy and what's going 164 00:09:30,120 --> 00:09:33,200 Speaker 1: to happen. China obviously is playing a much greater role 165 00:09:33,240 --> 00:09:35,839 Speaker 1: than it did in the latter part of the The 166 00:09:36,000 --> 00:09:39,200 Speaker 1: U S is still the pre eminent influence in the 167 00:09:39,280 --> 00:09:41,600 Speaker 1: G twenty and other groups of When he goes in 168 00:09:41,600 --> 00:09:44,160 Speaker 1: the people listen to Jack Lie I think they listened 169 00:09:44,200 --> 00:09:46,640 Speaker 1: to him. That they also listened to Logi Way and 170 00:09:46,760 --> 00:09:51,040 Speaker 1: Joe Shao Chuan of China, and they listened to leaders 171 00:09:51,120 --> 00:09:54,400 Speaker 1: of other countries. India is playing a greater role uh 172 00:09:54,480 --> 00:09:57,880 Speaker 1: the e c B, whereas as I mentioned, Europe's having 173 00:09:57,960 --> 00:10:00,640 Speaker 1: big problems. The e c B still is are important. 174 00:10:01,000 --> 00:10:04,079 Speaker 1: And then you get individuals like Mark Arney who speak 175 00:10:04,160 --> 00:10:06,760 Speaker 1: with a voice of credibility. So we're really in a 176 00:10:06,840 --> 00:10:12,000 Speaker 1: multipolar world. The US influence is considerably less than it was, 177 00:10:12,120 --> 00:10:14,760 Speaker 1: and as you see from this Russian bond that they're showing. 178 00:10:14,760 --> 00:10:18,400 Speaker 1: The US has said Americans should not underwrite it. And 179 00:10:18,440 --> 00:10:21,640 Speaker 1: now you see the Europeans, according to the Russians, are 180 00:10:21,640 --> 00:10:23,640 Speaker 1: bidding to play in that game, to play in the 181 00:10:23,640 --> 00:10:26,319 Speaker 1: game as well. Bob Hormats with us will continue our discussion. 182 00:10:26,600 --> 00:10:29,800 Speaker 1: Of course, associated so much with his Fletcher School at 183 00:10:29,840 --> 00:10:34,120 Speaker 1: Tous University, he is with Kissinger associates with an important 184 00:10:34,160 --> 00:10:38,680 Speaker 1: Iran brief out. We'll talk to Bob Hormats about how 185 00:10:38,760 --> 00:10:41,080 Speaker 1: we should treat around some of the background that he 186 00:10:41,160 --> 00:10:45,200 Speaker 1: brings to his important Atlantic Council report. Futures up nine down, 187 00:10:45,280 --> 00:10:51,320 Speaker 1: features up seventy of the yield one point seven three. 188 00:10:52,240 --> 00:10:55,160 Speaker 1: This hour of surveillance is brought to via Westchester Subaru. 189 00:10:55,280 --> 00:10:59,559 Speaker 1: Visit Westchester Subaru dot com. Here's Bob John Tucker rather 190 00:10:59,640 --> 00:11:02,360 Speaker 1: with the latest news headlines. Well, Michael Verbal of Free 191 00:11:02,360 --> 00:11:05,240 Speaker 1: for All head last night's GOP debate on CNN. You 192 00:11:05,440 --> 00:11:07,760 Speaker 1: tell me about this guy. This is what we're gonna have. 193 00:11:07,840 --> 00:11:10,000 Speaker 1: The guy that had hired a two hundred million dollars 194 00:11:10,400 --> 00:11:12,440 Speaker 1: if he hadn't inherited two hundred million dollars. And we're 195 00:11:12,440 --> 00:11:18,400 Speaker 1: doing right now Marco Rubio going after Donald Trump Ted 196 00:11:18,480 --> 00:11:22,880 Speaker 1: Cruz joining in questioning the front runners conservative credentials. Heston 197 00:11:22,960 --> 00:11:25,480 Speaker 1: Kansas police officer being hailed as a hero for stopping 198 00:11:25,520 --> 00:11:27,679 Speaker 1: a series of shootings. The officer gunning down a man 199 00:11:27,920 --> 00:11:30,480 Speaker 1: who was storing the factory where he worked. The guvernment 200 00:11:30,600 --> 00:11:34,520 Speaker 1: killed three people and wounded fourteen others, and US officials 201 00:11:34,520 --> 00:11:37,280 Speaker 1: say the Pentagon has launched a newly aggressive campaign of 202 00:11:37,600 --> 00:11:41,640 Speaker 1: cyber attacks against his Lamic State and Global News twenty 203 00:11:41,679 --> 00:11:43,920 Speaker 1: four hours a day, powered by a twenty four journalist 204 00:11:43,960 --> 00:11:46,200 Speaker 1: and more than one hundred fifty news bureaus around the world. 205 00:11:46,520 --> 00:11:49,400 Speaker 1: I'm John Temper. It sounds like you and Mike sometimes 206 00:11:49,679 --> 00:11:51,439 Speaker 1: he I was gonna ask you if the debates more 207 00:11:51,480 --> 00:11:55,520 Speaker 1: painful and radio or TV. I'll at John Tucker decide. 208 00:11:55,880 --> 00:11:59,520 Speaker 1: Oil Lifts thirty three forty three on West Texas Intermediate. 209 00:12:00,040 --> 00:12:07,040 Speaker 1: You're with Robert Harmats. It's Bloomberg Surveillance. Bloomberg Surveillance brought 210 00:12:07,080 --> 00:12:09,560 Speaker 1: you by your try State BMW centers. Visit them online 211 00:12:09,600 --> 00:12:12,240 Speaker 1: at try State, BMW dot com. At BMW they make 212 00:12:12,280 --> 00:12:23,680 Speaker 1: only one thing, the ultimate driving machine. Global Business News 213 00:12:23,800 --> 00:12:26,679 Speaker 1: twenty four hours a day. It's Bloomberg dot Com. The 214 00:12:26,880 --> 00:12:29,920 Speaker 1: Radio plus Mobile Act and on your radio, this is 215 00:12:29,960 --> 00:12:34,040 Speaker 1: a Bloomberg business flash and I'm Karin Moscow. This updates Rosy. 216 00:12:34,120 --> 00:12:36,240 Speaker 1: You buy Sector Spider e t F, so I buy 217 00:12:36,280 --> 00:12:38,800 Speaker 1: a single stock when you can invest in the entire sector. 218 00:12:39,160 --> 00:12:42,679 Speaker 1: Visits sector spd r s dot Com are called six 219 00:12:42,760 --> 00:12:46,040 Speaker 1: sector e t F. There is a headline crossing the Bloomberg. 220 00:12:46,080 --> 00:12:47,920 Speaker 1: Ali Baba is said to be in talks with the 221 00:12:48,000 --> 00:12:50,559 Speaker 1: banks for up to a four billion dollar loan, and 222 00:12:50,640 --> 00:12:53,600 Speaker 1: that's according to the Wall Street Journal. Stocks are rallying 223 00:12:53,720 --> 00:12:57,160 Speaker 1: around the world this morning. Oil gaining with industrial medals 224 00:12:57,400 --> 00:12:59,599 Speaker 1: as China Central Bank said it sees room for a 225 00:12:59,640 --> 00:13:01,480 Speaker 1: monitor are easing and the build up to a group 226 00:13:01,520 --> 00:13:05,280 Speaker 1: of twenty finance chiefs discussions on the global economy SNP. 227 00:13:05,440 --> 00:13:07,679 Speaker 1: Even A futures of nine points now even A future 228 00:13:07,720 --> 00:13:10,360 Speaker 1: is up seventy six and Nash Documnity future is up 229 00:13:10,400 --> 00:13:13,360 Speaker 1: twenty five dacks in Germany's up one point three percent 230 00:13:13,679 --> 00:13:16,080 Speaker 1: ten Your treasury down three thirty seconds, the yield one 231 00:13:16,120 --> 00:13:18,720 Speaker 1: point seven two percent. Now I'm ex screw oil up 232 00:13:18,800 --> 00:13:20,800 Speaker 1: one and a quarter per cent, or forty one cents 233 00:13:20,840 --> 00:13:23,599 Speaker 1: to thirty three forty eight. A barrel comes gold is 234 00:13:23,679 --> 00:13:26,480 Speaker 1: little change down eighty cents to twelve thirty eight ten 235 00:13:26,520 --> 00:13:29,240 Speaker 1: anounced the euro a dollar ten twenty nine, the yen 236 00:13:29,320 --> 00:13:32,440 Speaker 1: one twelve point seven nine. And that's a Bloomberg business flash. 237 00:13:32,520 --> 00:13:34,559 Speaker 1: Tom and Mike Karen, thanks so much. I'm glad you 238 00:13:34,640 --> 00:13:37,719 Speaker 1: mentioned that Ali Baba headline. It came across folks. You 239 00:13:37,760 --> 00:13:42,600 Speaker 1: see stuff come across the Bloomberg and you go, oh, Mike. 240 00:13:42,760 --> 00:13:45,880 Speaker 1: In dollar terms, they have something in the vicinity of 241 00:13:45,960 --> 00:13:49,480 Speaker 1: eight point two billion in debt, So a four billion 242 00:13:49,600 --> 00:13:54,480 Speaker 1: dollar overlay is a tangible amount of money. That's where 243 00:13:54,480 --> 00:13:57,000 Speaker 1: I was going here. I think that's something worth looking 244 00:13:57,040 --> 00:14:01,200 Speaker 1: into next week. Ali Baba looking for four billion story. 245 00:14:01,280 --> 00:14:05,280 Speaker 1: This is from the Wall Street Journal, and uh Ali 246 00:14:05,320 --> 00:14:07,679 Speaker 1: Baba not being in America. If it were an American company, 247 00:14:07,679 --> 00:14:10,240 Speaker 1: you would say they probably have profits trapped overseas, so 248 00:14:10,320 --> 00:14:12,439 Speaker 1: they want to borrow against those. You know what the 249 00:14:12,480 --> 00:14:14,240 Speaker 1: story is. Well, I'm not saying it's the fairies. I'm 250 00:14:14,280 --> 00:14:18,520 Speaker 1: just saying that number. Why they're doing it. I don't understand. 251 00:14:18,720 --> 00:14:22,280 Speaker 1: We should we rip up the script. Robert Hormetz with 252 00:14:22,400 --> 00:14:25,640 Speaker 1: us with his decades of experience in China. Jack Ma 253 00:14:25,880 --> 00:14:27,680 Speaker 1: was at the Economic Club of New York it's not 254 00:14:27,800 --> 00:14:30,160 Speaker 1: that long ago, and it was it was it was 255 00:14:30,280 --> 00:14:35,160 Speaker 1: almost messionic or whatever. Tell me about your perception as 256 00:14:35,160 --> 00:14:39,000 Speaker 1: an expert on international relations of the capitalism of Mr 257 00:14:39,160 --> 00:14:44,200 Speaker 1: Mama Well, I think he is a very innovative guy, 258 00:14:44,440 --> 00:14:50,120 Speaker 1: and he's trying to strengthen the the capitalistic environment in China, 259 00:14:50,200 --> 00:14:52,640 Speaker 1: for sure, and he is one of the very biggest 260 00:14:52,720 --> 00:14:56,600 Speaker 1: probably the biggest private company in China today and one 261 00:14:56,640 --> 00:14:59,400 Speaker 1: of the most international. But he's really working very hard 262 00:14:59,480 --> 00:15:01,800 Speaker 1: to make at a global company. That was what he 263 00:15:01,920 --> 00:15:04,800 Speaker 1: was saying at the Economic Club that overpend time, more 264 00:15:04,840 --> 00:15:07,480 Speaker 1: and more people, pretty younger people are going to use 265 00:15:08,120 --> 00:15:10,520 Speaker 1: e commerce in the way he has set it out 266 00:15:10,760 --> 00:15:13,040 Speaker 1: in his mind. And that's something you've been so good at. 267 00:15:13,240 --> 00:15:17,480 Speaker 1: Is ungenerational shifts, whether it's Japan or Russia. What is 268 00:15:17,520 --> 00:15:21,920 Speaker 1: the generational shift you perceive within China. That is really 269 00:15:22,040 --> 00:15:23,960 Speaker 1: the key point he made. I'm glad you raised that. 270 00:15:24,080 --> 00:15:26,760 Speaker 1: I think what he was saying was two things. One, 271 00:15:27,320 --> 00:15:30,880 Speaker 1: Chinese don't have big malls like we do. So when 272 00:15:31,000 --> 00:15:33,840 Speaker 1: younger generations emerge in China and want to do business, 273 00:15:34,160 --> 00:15:36,320 Speaker 1: they're not going to go to a mall and congregate 274 00:15:36,320 --> 00:15:39,560 Speaker 1: because there they don't have them in China to anything 275 00:15:40,000 --> 00:15:42,320 Speaker 1: to degreed we do. So they're going to use an 276 00:15:42,400 --> 00:15:45,920 Speaker 1: international cyber mall, which is an e mall, which is 277 00:15:45,960 --> 00:15:48,560 Speaker 1: the kind of thing he is he's developing. So and 278 00:15:48,600 --> 00:15:53,160 Speaker 1: he's also saying in the United States, increasingly younger Americans 279 00:15:53,280 --> 00:15:56,680 Speaker 1: are going to see the Internet as the prime vehicle 280 00:15:56,840 --> 00:15:59,560 Speaker 1: for shopping, and businesses are going to see it in 281 00:15:59,640 --> 00:16:02,680 Speaker 1: the same way. So he's very really talking about an 282 00:16:02,720 --> 00:16:06,680 Speaker 1: intergenerational change, not only in China but elsewhere, and that 283 00:16:06,760 --> 00:16:09,200 Speaker 1: would play to the strengths of Ali Obama but also 284 00:16:09,680 --> 00:16:14,960 Speaker 1: other companies like Amazon and eBay. Mike, I never thought 285 00:16:15,000 --> 00:16:18,080 Speaker 1: we'd do security analysis in Ali Baba with Bob Hormet's. Yeah, 286 00:16:18,120 --> 00:16:20,800 Speaker 1: it's a great beauty of things. UH. But but I 287 00:16:20,840 --> 00:16:23,840 Speaker 1: want to follow in China because you were noting the 288 00:16:23,960 --> 00:16:27,240 Speaker 1: comments from the Chinese is the G twenty meeting gets 289 00:16:27,360 --> 00:16:31,920 Speaker 1: under way, seemed to be very different from UH in 290 00:16:32,040 --> 00:16:37,000 Speaker 1: the past. They normally don't talk about monetary policy. Is forthrightly. 291 00:16:37,880 --> 00:16:41,720 Speaker 1: I think it's very interesting how the Chinese have worked 292 00:16:41,840 --> 00:16:45,800 Speaker 1: very hard to improve their communications skills to the market. 293 00:16:45,840 --> 00:16:49,320 Speaker 1: I think they realized in the past that they needed improvement, 294 00:16:49,360 --> 00:16:51,480 Speaker 1: and I think they have done this. You know, Loji way, 295 00:16:51,560 --> 00:16:54,760 Speaker 1: the Finance minister has been doing a Johan government Central 296 00:16:54,800 --> 00:16:59,000 Speaker 1: Bank has been trying to understand better how to work 297 00:16:59,120 --> 00:17:01,680 Speaker 1: with and and signal to the market in much the 298 00:17:01,800 --> 00:17:04,119 Speaker 1: same way that the FED or the e c B. 299 00:17:04,320 --> 00:17:08,920 Speaker 1: Do Um Juguangal, the Deputy Finance Minister, has talked about 300 00:17:08,960 --> 00:17:11,520 Speaker 1: the fact that China is now focusing a lot more 301 00:17:11,560 --> 00:17:14,639 Speaker 1: on market communication. I think they've come to understand that 302 00:17:14,760 --> 00:17:18,760 Speaker 1: that is part of managing a very complicated economy to 303 00:17:18,840 --> 00:17:21,439 Speaker 1: give signals to the market. And Jack Lewis said, if 304 00:17:21,440 --> 00:17:23,920 Speaker 1: you don't give signals to the market, the market will 305 00:17:24,119 --> 00:17:26,600 Speaker 1: develop its own ideas of what you're doing. And I 306 00:17:26,680 --> 00:17:29,880 Speaker 1: think the Chinese are They're very quick learners and they're 307 00:17:29,960 --> 00:17:32,760 Speaker 1: very smart, and I think they have come to conclude 308 00:17:32,840 --> 00:17:35,639 Speaker 1: that they need to look at this experience of the 309 00:17:35,720 --> 00:17:37,959 Speaker 1: past to figure out how to do it better when 310 00:17:38,000 --> 00:17:41,159 Speaker 1: you're running a complicated and increasing global economy. I give 311 00:17:41,200 --> 00:17:45,199 Speaker 1: them credit for being a very quick group of learners, 312 00:17:45,280 --> 00:17:47,840 Speaker 1: and I think they've they've they've expressed that at this 313 00:17:48,040 --> 00:17:49,960 Speaker 1: i F meeting, and I think we'll see more of 314 00:17:50,040 --> 00:17:52,800 Speaker 1: this in the G twenty meeting. Tommy, you want to 315 00:17:52,840 --> 00:17:55,720 Speaker 1: ask about Iran. I didn't want to ask about Iran. 316 00:17:55,760 --> 00:18:00,680 Speaker 1: You've got an incredibly totally typical Robert Wormat's effort. Paragraph 317 00:18:00,800 --> 00:18:06,400 Speaker 1: by paragraph, I was learning about the strength and diversity 318 00:18:06,600 --> 00:18:09,960 Speaker 1: of Iran. Is they face a new world? I was 319 00:18:10,280 --> 00:18:14,719 Speaker 1: thunderstruck at your educational statistics on Iran. Is you're right 320 00:18:14,800 --> 00:18:17,960 Speaker 1: for the Atlantic Council? What did you learn in putting 321 00:18:17,960 --> 00:18:20,320 Speaker 1: together this piece? When I was at State, I spent 322 00:18:20,400 --> 00:18:23,200 Speaker 1: a lot of time trying to understand the Iranian economy 323 00:18:23,200 --> 00:18:26,080 Speaker 1: because at that point we were imposing sanctions on them 324 00:18:26,119 --> 00:18:27,920 Speaker 1: on a variety of things, so I really wanted to 325 00:18:28,000 --> 00:18:31,119 Speaker 1: understand what's going on there. The interesting thing about Iran 326 00:18:31,400 --> 00:18:35,719 Speaker 1: is it's not a monolithic government or monolithic economy. It's 327 00:18:35,800 --> 00:18:39,879 Speaker 1: run by clerics, but they're also reformers. There's Rohani and 328 00:18:39,960 --> 00:18:42,080 Speaker 1: a number of people who want to open up the 329 00:18:42,160 --> 00:18:46,240 Speaker 1: economy more, and foreign investors who were looking to invest 330 00:18:46,320 --> 00:18:49,400 Speaker 1: in Iran. Now under the current sanctions, most American companies 331 00:18:49,800 --> 00:18:52,080 Speaker 1: can't trade with Iran and can't invest with Iran. But 332 00:18:52,200 --> 00:18:56,240 Speaker 1: Europeans and American subs and Japanese and others can. And 333 00:18:56,359 --> 00:18:58,320 Speaker 1: what they'll find is I put pointing out in the 334 00:18:58,359 --> 00:19:00,040 Speaker 1: report is first of all, there are a lot of 335 00:19:00,160 --> 00:19:04,760 Speaker 1: very talented people and STEMS and science, technology, engineering, mathematics. 336 00:19:05,080 --> 00:19:08,640 Speaker 1: They're very well trained. It's a very very innovative workforce. 337 00:19:08,720 --> 00:19:10,800 Speaker 1: Many of them don't have jobs, so they want more 338 00:19:10,880 --> 00:19:14,920 Speaker 1: foreign investment at least the reformers to absorb these unemployed people. 339 00:19:14,960 --> 00:19:17,199 Speaker 1: On the other hand, when they go there, they're going 340 00:19:17,240 --> 00:19:19,159 Speaker 1: to find that a large portion of the economy for 341 00:19:19,200 --> 00:19:22,360 Speaker 1: the moment is totally opaque. And you have a lot 342 00:19:22,440 --> 00:19:25,600 Speaker 1: of companies that are controlled by members of the Revolutionary 343 00:19:25,640 --> 00:19:28,239 Speaker 1: Guard and the Guard itself, or these banyards which are 344 00:19:28,560 --> 00:19:32,480 Speaker 1: religious foundations. So and many of the entities there are 345 00:19:32,840 --> 00:19:35,960 Speaker 1: on the Specially Designated Names List, which means you can't 346 00:19:36,040 --> 00:19:38,920 Speaker 1: deal with them for fear of being penalized by U 347 00:19:39,000 --> 00:19:41,760 Speaker 1: S sanctions. We are out of time, which is always 348 00:19:41,800 --> 00:19:44,000 Speaker 1: the case with Bob Mormans. Please come back, please don't. 349 00:19:45,520 --> 00:19:48,439 Speaker 1: Kissinger Associates a headline across the Bloomberg will have much 350 00:19:48,480 --> 00:19:52,440 Speaker 1: more on this Nissan of Japan's that's a four billion 351 00:19:52,800 --> 00:19:56,960 Speaker 1: yen buy back. Renault in Europe in France will go 352 00:19:57,080 --> 00:20:01,840 Speaker 1: out and sell shares to the market. This is Bloomberg Surveillance. 353 00:20:06,000 --> 00:20:08,119 Speaker 1: Bloomberg Surveillance is brought to you by c I T. 354 00:20:08,280 --> 00:20:10,800 Speaker 1: From transportation to healthcare to manufacturing. C i T offers 355 00:20:10,800 --> 00:20:13,879 Speaker 1: commercial lending, leasing, and treasury management services for small and 356 00:20:13,960 --> 00:20:16,240 Speaker 1: middle market businesses. Learn more at c i T dot 357 00:20:16,280 --> 00:20:25,400 Speaker 1: com with Knowledge to work. Broadcasting live to New York, 358 00:20:25,520 --> 00:20:30,480 Speaker 1: Bloomberg eleventh wo to Washington, d C, Bloomberg to Boston, 359 00:20:30,560 --> 00:20:35,080 Speaker 1: Bloomberg twelve one to San Francisco, Bloomberg to the Country, 360 00:20:35,800 --> 00:20:39,320 Speaker 1: Exam Channel one nine and around the globe the Bloomberg 361 00:20:39,400 --> 00:20:43,440 Speaker 1: Radio plus Apen Bloomberg dot Com. This is Bloomberg Surveillance. 362 00:20:44,280 --> 00:20:46,480 Speaker 1: Good morning at seven thirty on Wall Street and Michael 363 00:20:46,520 --> 00:20:49,840 Speaker 1: McKee along with Tom Keene two hours until we start 364 00:20:49,920 --> 00:20:53,159 Speaker 1: trading today and looks at the moment like we're going 365 00:20:53,240 --> 00:20:56,480 Speaker 1: to be up again. Stocks higher around the world. Some 366 00:20:56,640 --> 00:21:00,240 Speaker 1: of the corporate news that are pushing stocks higher. Ali 367 00:21:00,320 --> 00:21:02,919 Speaker 1: Baba in discussions with banks for a loan of as 368 00:21:03,000 --> 00:21:05,880 Speaker 1: much as four billion dollars. The Wall Street Journal says 369 00:21:05,960 --> 00:21:09,560 Speaker 1: they would use the money to fund expansion plans. Hilton 370 00:21:09,640 --> 00:21:13,440 Speaker 1: Worldwide Holdings is going to continue to pursue spinoffs of 371 00:21:13,480 --> 00:21:16,320 Speaker 1: its hotel properties. Now it wants to spin off its 372 00:21:16,440 --> 00:21:21,719 Speaker 1: time share business into a reat to boost shareholder value. UH. 373 00:21:21,960 --> 00:21:26,760 Speaker 1: The lawyers for Apple have filed their response to the 374 00:21:26,880 --> 00:21:30,720 Speaker 1: Justice Department. They say that the FBI is seeking a 375 00:21:30,920 --> 00:21:35,600 Speaker 1: quote dangerous power that would undermine the basic security and 376 00:21:35,680 --> 00:21:38,920 Speaker 1: privacy interests of hundreds of millions of individuals around the globe. 377 00:21:39,000 --> 00:21:41,840 Speaker 1: The FBI wants Apple to unlock the iPhone used by 378 00:21:42,119 --> 00:21:45,160 Speaker 1: one of the attackers who killed fourteen people in California 379 00:21:45,520 --> 00:21:49,840 Speaker 1: in December. And RBS stock plunging today as the company 380 00:21:49,920 --> 00:21:54,760 Speaker 1: reported losses and said it would take longer to reinstate 381 00:21:54,960 --> 00:21:58,560 Speaker 1: its dividend. RBS shares down eight point four percent. Right now, 382 00:21:59,320 --> 00:22:02,880 Speaker 1: let's check anyway, John Tucker to get the latest world 383 00:22:02,960 --> 00:22:06,600 Speaker 1: in national headlines. Job, good morning, Michael Marco Rubio suddenly 384 00:22:06,680 --> 00:22:09,480 Speaker 1: and urgently emerging from the shadows to hammer the front 385 00:22:09,560 --> 00:22:13,400 Speaker 1: ronold Donald Trump. Last night, during the tenth Republican presidential debate, 386 00:22:13,680 --> 00:22:18,000 Speaker 1: Florida's junior senator compared Trump to a sketchy sidewalk salesman. 387 00:22:18,640 --> 00:22:22,240 Speaker 1: Iranians today in parliamentary elections, are voting the country's first 388 00:22:22,359 --> 00:22:25,919 Speaker 1: voles since its landmark nuclear deal with world powers last summer. 389 00:22:26,600 --> 00:22:28,960 Speaker 1: The vote is seen as a referendum of the policies. 390 00:22:29,000 --> 00:22:33,480 Speaker 1: The Moderate President Hassan Huwani FATA delicates approved changes designed 391 00:22:33,480 --> 00:22:35,920 Speaker 1: to open up Global Soccer's governing body as it tries 392 00:22:35,960 --> 00:22:39,119 Speaker 1: to overcome the corruption allegations and arrests that brought on 393 00:22:39,200 --> 00:22:41,840 Speaker 1: the biggest crisis in its one hundred twelve year history. 394 00:22:42,160 --> 00:22:44,680 Speaker 1: The reforms include a new top for twelve year term 395 00:22:44,760 --> 00:22:47,720 Speaker 1: limits for the president and senior officials, as well as 396 00:22:47,760 --> 00:22:51,200 Speaker 1: disclosure under pay US officials and a Pentagon has launched 397 00:22:51,240 --> 00:22:54,760 Speaker 1: a newly aggressive campaign of cyber attacks against the Islamic 398 00:22:54,840 --> 00:22:57,920 Speaker 1: State militants. It's a targeted effort to rode the group's 399 00:22:57,960 --> 00:23:01,520 Speaker 1: abilities to use shows media the internet to recruit fighters 400 00:23:01,840 --> 00:23:05,080 Speaker 1: and as fire followers. Global News twenty four hours a day, 401 00:23:05,160 --> 00:23:07,480 Speaker 1: powered by our twenty four hundred journalists more than one 402 00:23:07,560 --> 00:23:10,919 Speaker 1: hundred fifty news viureas around the world. I'm John Tucker, Uncle, 403 00:23:11,560 --> 00:23:13,840 Speaker 1: Thank you John. Time now for the Ray Katina Auto Group, 404 00:23:13,880 --> 00:23:17,440 Speaker 1: Bloomberg NBC Sports Update. Here's John Stash. All right, my 405 00:23:17,560 --> 00:23:20,360 Speaker 1: little history made by Rangers goal at Henrik Lundquist. Last 406 00:23:20,440 --> 00:23:22,680 Speaker 1: night in St. Louis. He signed in goal again with 407 00:23:22,760 --> 00:23:25,240 Speaker 1: thirty five saves. Rangers won two to one. It's the 408 00:23:25,359 --> 00:23:28,440 Speaker 1: thirty win for lunk Quist and he joins Marty bro During. 409 00:23:28,440 --> 00:23:30,879 Speaker 1: Patrick was the only goal is to have ten seasons 410 00:23:31,200 --> 00:23:33,240 Speaker 1: with thirty or more. Chris crieder at the game winning 411 00:23:33,280 --> 00:23:35,840 Speaker 1: goal in the third period. Josh Bailey, the game winner 412 00:23:35,880 --> 00:23:38,600 Speaker 1: for the Islanders was just eighteen seconds left in overtime 413 00:23:39,080 --> 00:23:41,800 Speaker 1: to one. Win at Calgary Devil's never in it. In 414 00:23:41,880 --> 00:23:44,639 Speaker 1: Columbus Blue Jackets scored three in the first off Corey 415 00:23:44,720 --> 00:23:47,359 Speaker 1: Schneider before he got bench. They won six to one. 416 00:23:47,400 --> 00:23:49,480 Speaker 1: The hat trick for Nick Felino. The Nets for paying 417 00:23:49,560 --> 00:23:52,960 Speaker 1: Joe Johnson twenty five million dollars this season, considering where 418 00:23:53,000 --> 00:23:55,520 Speaker 1: Brooklyn is in the standings, not a surprise. The two 419 00:23:55,600 --> 00:23:58,120 Speaker 1: sides agreed to a buyout. Johnson gave three million back. 420 00:23:58,359 --> 00:24:01,000 Speaker 1: He can now sign with the contending team. Nets found 421 00:24:01,040 --> 00:24:03,560 Speaker 1: a team worse than they are. Phoenix has lost thirteen 422 00:24:03,600 --> 00:24:06,480 Speaker 1: in a row. Brooklyn won one sixteen, one oh six 423 00:24:07,119 --> 00:24:10,640 Speaker 1: for Seaton Hall seventy to fifty two over Providence. Also 424 00:24:10,720 --> 00:24:12,960 Speaker 1: the Big East St. John's fell the one in fifteen, 425 00:24:13,119 --> 00:24:15,800 Speaker 1: losing to the only team they've beaten, the Paul three 426 00:24:15,920 --> 00:24:19,240 Speaker 1: seventy five. With the Bloomberg NBC Sports Update. I'm John Stash. 427 00:24:20,200 --> 00:24:22,800 Speaker 1: Thank you John Well. The G twenty are meeting now 428 00:24:23,000 --> 00:24:26,560 Speaker 1: in Chehan. The meeting is officially under way. Gold prices 429 00:24:26,680 --> 00:24:28,439 Speaker 1: downed by a tenth of a percent. Not a lot 430 00:24:28,480 --> 00:24:30,680 Speaker 1: of concern out there in the world is to what 431 00:24:30,920 --> 00:24:39,439 Speaker 1: may happen in China. This is Bloomberg worldwide and welcome 432 00:24:39,440 --> 00:24:42,200 Speaker 1: back to surveillance. I Michael McKee along with Tom Keen 433 00:24:42,320 --> 00:24:44,919 Speaker 1: Green on the screen today. S ANDP futures up by 434 00:24:45,320 --> 00:24:47,600 Speaker 1: nine points right now, a little more than four tenths 435 00:24:47,640 --> 00:24:50,280 Speaker 1: of a percent to five tenths game for Donald futures. 436 00:24:50,320 --> 00:24:53,880 Speaker 1: They are up seventy seven Europe higher, the stock six 437 00:24:53,960 --> 00:24:57,800 Speaker 1: hundred by four points one point one percent right now. 438 00:24:58,640 --> 00:25:01,280 Speaker 1: Time now for the Bloomberg and j I T Stamp Report, 439 00:25:01,320 --> 00:25:04,040 Speaker 1: brought to you by New Jersey Institute of Technology, partnering 440 00:25:04,080 --> 00:25:07,119 Speaker 1: with government and industry to apply the university's world class 441 00:25:07,160 --> 00:25:09,960 Speaker 1: research assets to innovate and spur economic growth. Learn more 442 00:25:10,240 --> 00:25:13,080 Speaker 1: at n j I T dot e d U. Here 443 00:25:13,280 --> 00:25:16,479 Speaker 1: is Bob Moon, Michael. Good morning, and it's coming up 444 00:25:16,520 --> 00:25:18,920 Speaker 1: on seven thirty five on Wall Street. Here's what's making 445 00:25:18,960 --> 00:25:22,880 Speaker 1: news in science, Technology, engineering, and math. So what would 446 00:25:22,920 --> 00:25:26,720 Speaker 1: it take for Apple to crack into its own iPhone software? 447 00:25:27,160 --> 00:25:29,639 Speaker 1: Ten engineers and a month of work is what the 448 00:25:29,720 --> 00:25:32,520 Speaker 1: company says it could take for Apple to write the program. 449 00:25:32,640 --> 00:25:34,720 Speaker 1: The FBI says it needs to get data out of 450 00:25:34,760 --> 00:25:37,640 Speaker 1: the sambord and you know terrorists iPhone. In a court 451 00:25:37,720 --> 00:25:40,320 Speaker 1: filing in response to the government request that it helped 452 00:25:40,320 --> 00:25:42,879 Speaker 1: break into the device, Apple said the order that it 453 00:25:43,000 --> 00:25:46,600 Speaker 1: provide reasonable technical assistance doesn't take into full account what 454 00:25:46,720 --> 00:25:49,520 Speaker 1: the assistance would entail, and that it won't be fast 455 00:25:49,760 --> 00:25:53,359 Speaker 1: or easy. The current software requires manual password entry and 456 00:25:53,480 --> 00:25:56,280 Speaker 1: limits the number of incorrect guesses. In addition to the 457 00:25:56,320 --> 00:25:58,880 Speaker 1: six to ten engineers and as long as four weeks 458 00:25:58,920 --> 00:26:02,000 Speaker 1: of work to create new code in a hyper secure 459 00:26:02,119 --> 00:26:05,439 Speaker 1: isolation room, the company said it would require multiple stages 460 00:26:05,480 --> 00:26:10,480 Speaker 1: of testing, quality assurance, potentially recoding documentation, then deploying the 461 00:26:10,520 --> 00:26:13,240 Speaker 1: new operating system on the device at an Apple facility, 462 00:26:13,600 --> 00:26:17,119 Speaker 1: and supervising the Federal Bureau of Investigations use of the 463 00:26:17,160 --> 00:26:20,320 Speaker 1: whole system. That's this morning's Bloomberg and j I T 464 00:26:20,400 --> 00:26:23,879 Speaker 1: Stem report. Michael, thank you very much, Bob Moon. Sissan 465 00:26:23,920 --> 00:26:27,600 Speaker 1: Garamani is the founder and CEO of s g H 466 00:26:27,760 --> 00:26:30,880 Speaker 1: Macro Advisor has been on this show many times, policy 467 00:26:30,960 --> 00:26:35,920 Speaker 1: research firm for hedge funds and international financial policymakers, many 468 00:26:36,040 --> 00:26:40,399 Speaker 1: international financial policy makers today obviously in Shanghai for the 469 00:26:40,640 --> 00:26:44,280 Speaker 1: G twenty meeting, SAS and you've written it, you're not 470 00:26:44,440 --> 00:26:47,840 Speaker 1: expecting a whole lot out of this. Still, we know 471 00:26:48,040 --> 00:26:51,119 Speaker 1: currency markets little change today. People seem to be holding 472 00:26:51,160 --> 00:26:54,919 Speaker 1: their breath on trading desks. Good morning, Mike. First of all, 473 00:26:54,960 --> 00:26:56,720 Speaker 1: thank you very much, and Tom, thank you for having 474 00:26:56,800 --> 00:27:00,240 Speaker 1: me on again. Um you're right, we're not expecting. But 475 00:27:00,280 --> 00:27:02,600 Speaker 1: I'd like to talk actually a little bit here about 476 00:27:02,680 --> 00:27:06,119 Speaker 1: expectations because I've read a bunch of articles in the 477 00:27:06,240 --> 00:27:08,639 Speaker 1: run up to the G twenty meeting sort of pushing 478 00:27:08,680 --> 00:27:13,080 Speaker 1: back and saying, don't expect the five style accord and 479 00:27:13,320 --> 00:27:16,159 Speaker 1: you know, all this kind of stuff. And then, you know, 480 00:27:16,240 --> 00:27:17,760 Speaker 1: if I read one more of those, I'm going to 481 00:27:17,960 --> 00:27:20,680 Speaker 1: pull out the little bit of hair I have left 482 00:27:20,720 --> 00:27:23,480 Speaker 1: on my head. Nobody's really expecting that. Nobody's expecting to 483 00:27:23,960 --> 00:27:27,639 Speaker 1: you know, accord on you know, global currency intervention or 484 00:27:27,640 --> 00:27:31,000 Speaker 1: anything like that. The important thing at this G twenty 485 00:27:31,080 --> 00:27:36,119 Speaker 1: meeting is quite frankly, uh to um to really deliver 486 00:27:36,280 --> 00:27:41,120 Speaker 1: a message UM that the policy makers are are are 487 00:27:41,240 --> 00:27:43,800 Speaker 1: not out of ammunition. And this is sort of a 488 00:27:43,920 --> 00:27:47,040 Speaker 1: narrative that has been um, you know, very prevalent, I 489 00:27:47,119 --> 00:27:49,280 Speaker 1: think in the markets now and there's concerned. There was 490 00:27:49,320 --> 00:27:51,600 Speaker 1: concerned after the Bank of Japan cut rates and you 491 00:27:51,680 --> 00:27:54,440 Speaker 1: know that yet and went the other way, uh and 492 00:27:54,560 --> 00:27:57,239 Speaker 1: and and so I think that the main point UM 493 00:27:57,480 --> 00:27:59,680 Speaker 1: at the G twenty meeting is going to be twofold 494 00:27:59,840 --> 00:28:03,399 Speaker 1: is one is the communicate itself already addresses currency issues, 495 00:28:03,480 --> 00:28:08,200 Speaker 1: that addresses volatility that nobody likes volatility. Currencies need to 496 00:28:08,240 --> 00:28:11,600 Speaker 1: follow fundamentals, So I think it's important for them to 497 00:28:12,200 --> 00:28:15,600 Speaker 1: reiterate that. Secondly, I think it's important it's not so 498 00:28:15,760 --> 00:28:18,600 Speaker 1: much the message as who is delivering the message that's 499 00:28:18,760 --> 00:28:21,880 Speaker 1: that's important. And that was one of the key um 500 00:28:22,240 --> 00:28:24,880 Speaker 1: points that we're making a piece that that that we wrote. 501 00:28:24,920 --> 00:28:27,159 Speaker 1: I think that that that you may have been alluding 502 00:28:27,200 --> 00:28:30,440 Speaker 1: to earlier, UM saying that book this isn't China and 503 00:28:30,840 --> 00:28:34,280 Speaker 1: the China fat and oil are sort of the big 504 00:28:34,359 --> 00:28:36,879 Speaker 1: global risks out there that the markets are looking at 505 00:28:37,000 --> 00:28:40,280 Speaker 1: nowt Brexit as well, and so you know they really 506 00:28:40,360 --> 00:28:44,480 Speaker 1: need to I think reassure markets on two fronts. One 507 00:28:44,600 --> 00:28:46,800 Speaker 1: is on the fundamentals of the economy, and they need 508 00:28:46,840 --> 00:28:49,560 Speaker 1: to explain to their counterparts, you know, here's here's what's 509 00:28:49,560 --> 00:28:52,000 Speaker 1: going on in our economy, and here's what we're doing. 510 00:28:52,280 --> 00:28:54,560 Speaker 1: And secondly, on the currency, what are we doing with 511 00:28:54,640 --> 00:28:58,400 Speaker 1: the currency? What is you know, our our our, our 512 00:28:58,480 --> 00:29:01,800 Speaker 1: our policy here. And what they have really been weak 513 00:29:01,920 --> 00:29:05,320 Speaker 1: on is explaining why why they you know, don't want 514 00:29:05,360 --> 00:29:08,400 Speaker 1: to step the evaluation and so far, um, we've already 515 00:29:08,480 --> 00:29:11,920 Speaker 1: seen the first part of that. And and it's no coincidence, 516 00:29:12,000 --> 00:29:14,400 Speaker 1: you know, there's there's been sort of silence and then 517 00:29:14,800 --> 00:29:16,480 Speaker 1: you know, right, you know, in the run up to 518 00:29:16,520 --> 00:29:20,520 Speaker 1: the G twenty meeting, uh Central Bank Governor uh Joshi 519 00:29:21,800 --> 00:29:25,960 Speaker 1: came out and talked about the possibility of uh of 520 00:29:26,280 --> 00:29:30,160 Speaker 1: of more monetary easing. There's also another piece that is 521 00:29:30,840 --> 00:29:33,880 Speaker 1: not official, but it's sort of floated out there on 522 00:29:34,000 --> 00:29:38,880 Speaker 1: the fiscal side, where an article written that says, hey, hey, China, 523 00:29:39,200 --> 00:29:42,240 Speaker 1: you know, is talking about a three percent um deficit 524 00:29:42,320 --> 00:29:44,680 Speaker 1: to GDP ratio that could actually go up to as 525 00:29:44,760 --> 00:29:47,280 Speaker 1: much as four percent. So these are the sorts of 526 00:29:47,360 --> 00:29:50,880 Speaker 1: things that you know, not you know, coincidentally are now 527 00:29:51,000 --> 00:29:54,600 Speaker 1: being floated around UM at the twenty meeting. Uh So 528 00:29:55,360 --> 00:29:58,040 Speaker 1: when we leave, do markets and I only have about 529 00:29:58,040 --> 00:29:59,680 Speaker 1: thirty seconds left before we have to take break, we'll 530 00:29:59,720 --> 00:30:02,440 Speaker 1: come back, but do markets move at all? Yeah? I 531 00:30:02,520 --> 00:30:05,040 Speaker 1: think markets are moving already, you know what I mean. Look, 532 00:30:05,080 --> 00:30:10,320 Speaker 1: I don't think that um. There's there's you know, prospects 533 00:30:10,360 --> 00:30:14,640 Speaker 1: of enormous reactions specifically to the G twenty. Remember the 534 00:30:14,720 --> 00:30:17,600 Speaker 1: G twenty is you know, look there their last summit 535 00:30:17,680 --> 00:30:21,000 Speaker 1: communicated was seven paragraphs, seven pages. You know, there's a 536 00:30:21,080 --> 00:30:23,440 Speaker 1: lot lots of things they talk about. UM. So it's 537 00:30:23,480 --> 00:30:26,479 Speaker 1: not all about you know, currencies and and ffx UM. 538 00:30:26,600 --> 00:30:29,360 Speaker 1: But but broadly speaking, I think it's it's the sense 539 00:30:29,520 --> 00:30:33,000 Speaker 1: that the you know, global policymakers at least get it 540 00:30:33,160 --> 00:30:36,160 Speaker 1: that they are doing no harm and at least they 541 00:30:36,200 --> 00:30:38,720 Speaker 1: can be helping the situation now. And I think this 542 00:30:38,840 --> 00:30:43,080 Speaker 1: is the the key takeaway UM, that that they're trying 543 00:30:43,120 --> 00:30:45,600 Speaker 1: to deliver and I think markets are are sort of 544 00:30:45,680 --> 00:30:47,640 Speaker 1: listening to that now. And so I think, yes, let 545 00:30:47,720 --> 00:30:50,480 Speaker 1: let's risk on events. So all right, we'll come back 546 00:30:50,520 --> 00:30:56,000 Speaker 1: with sign from SGH macro advisors. They exist to read 547 00:30:56,040 --> 00:30:59,400 Speaker 1: the communication, so you don't have to are firms like that. 548 00:31:00,320 --> 00:31:03,400 Speaker 1: Everybody wants to will go immediately to the currency paragraph. 549 00:31:03,440 --> 00:31:05,560 Speaker 1: They won't read the rest of the thing that all 550 00:31:05,640 --> 00:31:09,120 Speaker 1: these highly paid government officials spend weeks putting together. I 551 00:31:09,200 --> 00:31:12,920 Speaker 1: might come a key along with Tom Keane cynical. This 552 00:31:13,120 --> 00:31:22,760 Speaker 1: is Bloomberg Surveillance on Bloomberg Radio worldwide. We are kind 553 00:31:22,800 --> 00:31:24,080 Speaker 1: of down at the opening veil brought you by the 554 00:31:24,120 --> 00:31:26,480 Speaker 1: refined Jeep Grand Cherokee Overland. It continues to raise the 555 00:31:26,520 --> 00:31:29,640 Speaker 1: bar with its luxurious interior and legendary four by four capability. 556 00:31:29,720 --> 00:31:31,320 Speaker 1: Drive on at your local Geep deal in today g 557 00:31:31,640 --> 00:31:39,360 Speaker 1: official vehicle of Killican Resort. Gloobal Business News twenty four 558 00:31:39,440 --> 00:31:42,480 Speaker 1: hours a day at Bloomberg dot Com, the Radio plus 559 00:31:42,560 --> 00:31:46,160 Speaker 1: mobile and on your radio. This is a Bloomberg Business 560 00:31:46,240 --> 00:31:50,200 Speaker 1: Flash and I'm Karen Moscow. Vivendi paid at Liberty Media 561 00:31:50,280 --> 00:31:53,280 Speaker 1: seven hundred seventy five million dollars to settle claims related 562 00:31:53,320 --> 00:31:56,080 Speaker 1: to a dispute that arose from a two thousand one transaction. 563 00:31:56,440 --> 00:31:59,600 Speaker 1: As a result of this settlement, all appeals have been dismissed. 564 00:32:00,080 --> 00:32:02,200 Speaker 1: San Motor will acquire up to three and a half 565 00:32:02,240 --> 00:32:05,360 Speaker 1: billion dollars of stock to enhance return to shareholders, and 566 00:32:05,400 --> 00:32:07,880 Speaker 1: Ali Baba Group Holding is in discussion with banks for 567 00:32:07,920 --> 00:32:10,160 Speaker 1: a loan of as much as four billion dollars to 568 00:32:10,240 --> 00:32:13,800 Speaker 1: fund expansion plans, which could include acquisitions. According to The 569 00:32:13,800 --> 00:32:16,280 Speaker 1: Wall Street Journal, which cited people familiar with the matter, 570 00:32:16,640 --> 00:32:19,840 Speaker 1: futures higher this morning. SNP EVENY futures up eight points, 571 00:32:19,960 --> 00:32:23,280 Speaker 1: Dow EMUNI futures up sixty five, NASA DOCUMNY futures up 572 00:32:23,320 --> 00:32:25,840 Speaker 1: twenty two. The decks in Germany's up one point two percent. 573 00:32:26,160 --> 00:32:28,600 Speaker 1: Ten Your treasury down five thirty seconds, the yield one 574 00:32:28,640 --> 00:32:31,960 Speaker 1: point seven three percent. NIMEX scrude oil up nine tenths percent, 575 00:32:32,080 --> 00:32:34,160 Speaker 1: or twenty eight cents to thirty three thirty five of 576 00:32:34,240 --> 00:32:37,080 Speaker 1: barrel comes gold is little change, down eighty cents to 577 00:32:37,160 --> 00:32:40,360 Speaker 1: twelve thirty eight announced, the euro A dollar ten twenty four, 578 00:32:40,440 --> 00:32:43,240 Speaker 1: the N one twelve point eight six and as of 579 00:32:43,280 --> 00:32:47,360 Speaker 1: Bloomberg Business Flash, Tom and Mike Karen Moscow, thank you 580 00:32:47,640 --> 00:32:50,280 Speaker 1: very much. We're talking with Sasan Garmoni. He's the founder 581 00:32:50,320 --> 00:32:54,040 Speaker 1: and CEO of s g H Macro Advisors. We we're 582 00:32:54,080 --> 00:32:57,040 Speaker 1: talking about what to expect out of the G twenty meeting. 583 00:32:57,200 --> 00:33:00,720 Speaker 1: The G twenty obviously they're meeting in shang Hi today, 584 00:33:01,120 --> 00:33:03,840 Speaker 1: have a lot to talk about things going on around 585 00:33:03,840 --> 00:33:05,680 Speaker 1: the world. I want to touch on some of those. 586 00:33:06,240 --> 00:33:08,080 Speaker 1: We were just talking a little bit with Bob Hormatt's 587 00:33:08,080 --> 00:33:13,760 Speaker 1: about the elections underway in Iran. Are they going to 588 00:33:13,880 --> 00:33:18,440 Speaker 1: be anything that changes the geo political calculation at all 589 00:33:18,640 --> 00:33:22,320 Speaker 1: or is this just sort of an interim step out there. Um, 590 00:33:23,320 --> 00:33:26,680 Speaker 1: it changes things on the margins, I think, Um. You know, 591 00:33:27,160 --> 00:33:29,600 Speaker 1: the elections are are not to be confused with the 592 00:33:29,640 --> 00:33:32,880 Speaker 1: presidential elections, which are sort of a much bigger deal, 593 00:33:32,960 --> 00:33:35,960 Speaker 1: the ones that you know started the whole Green Revolution 594 00:33:36,080 --> 00:33:40,120 Speaker 1: and the failed Green Revolution and put in Hotemmi and 595 00:33:40,880 --> 00:33:45,400 Speaker 1: amd Nisha during his time and then eventually now Rohani. 596 00:33:45,440 --> 00:33:48,800 Speaker 1: These are elections for for parliament and for the Assembly 597 00:33:48,880 --> 00:33:53,040 Speaker 1: of Experts. UM. Parliament, the Iranian matchless is you know, 598 00:33:53,160 --> 00:33:55,080 Speaker 1: it's it's I wouldn't call it a rubber stamp, it's 599 00:33:55,160 --> 00:33:57,920 Speaker 1: it's uh, you know, it has some power, um, but 600 00:33:58,200 --> 00:34:01,400 Speaker 1: it doesn't really have that much hours, so you know it. 601 00:34:02,520 --> 00:34:04,760 Speaker 1: And then one key thing I think that that is 602 00:34:05,640 --> 00:34:07,600 Speaker 1: that I'd like to point out about these elections is 603 00:34:07,680 --> 00:34:10,560 Speaker 1: that people a lot of times have you Iran uh, 604 00:34:10,680 --> 00:34:14,360 Speaker 1: you know for the prison of hardliners versus moderates, and 605 00:34:14,840 --> 00:34:19,800 Speaker 1: which is which is sort of right correct. But the 606 00:34:20,000 --> 00:34:23,840 Speaker 1: relationship that that the current president has Rohaney with the 607 00:34:24,239 --> 00:34:28,920 Speaker 1: with the comman a with the hardliners is not as 608 00:34:29,200 --> 00:34:33,440 Speaker 1: as um as polarized as it was during contamis time. 609 00:34:33,480 --> 00:34:35,959 Speaker 1: You know, both the comedy has moved to the middle 610 00:34:36,040 --> 00:34:38,400 Speaker 1: and ro Honey is not quite as liberal. Help me 611 00:34:38,480 --> 00:34:41,120 Speaker 1: with this, because we have such respects for your heritage 612 00:34:41,200 --> 00:34:44,960 Speaker 1: and for your knowledge of Persia. The basic idea of 613 00:34:45,040 --> 00:34:49,120 Speaker 1: a thirty two year old engineer in Tehran and they're 614 00:34:49,120 --> 00:34:51,919 Speaker 1: not building nuclear arms or whatever they're doing. Whatever they're doing, 615 00:34:52,719 --> 00:34:55,840 Speaker 1: do they have linkage with their government? Or are the 616 00:34:56,040 --> 00:34:59,120 Speaker 1: people a thirty two year old engineer in Tehran male female, 617 00:34:59,120 --> 00:35:01,480 Speaker 1: I don't care. Do they have a linkage with the 618 00:35:01,560 --> 00:35:06,040 Speaker 1: elites and the government. Uh? Well, you know there is 619 00:35:06,360 --> 00:35:11,359 Speaker 1: a whole sort of class and huron of uh um 620 00:35:11,840 --> 00:35:15,720 Speaker 1: of people who who who do a lot of business 621 00:35:15,960 --> 00:35:20,080 Speaker 1: in middle class that's very involved with some of the foundations, 622 00:35:20,160 --> 00:35:23,440 Speaker 1: for example, and and with the Revolutionary Guards and so on. 623 00:35:23,920 --> 00:35:27,000 Speaker 1: So there there are you know, some industries and some sectors. 624 00:35:27,040 --> 00:35:29,360 Speaker 1: If you're a big in big business you sort of 625 00:35:29,400 --> 00:35:31,680 Speaker 1: have to deal with the government. But to your question, 626 00:35:32,160 --> 00:35:33,920 Speaker 1: not so much, you know, And I think this is 627 00:35:34,680 --> 00:35:38,520 Speaker 1: you know, it's the run is somewhere mixed between an 628 00:35:38,560 --> 00:35:42,680 Speaker 1: autocratic and a totalitarian society. It's it's more towards autocratic 629 00:35:42,760 --> 00:35:45,920 Speaker 1: where you know, for most of the people. And you know, 630 00:35:46,200 --> 00:35:49,759 Speaker 1: I think that there's a relatively um except for on 631 00:35:49,960 --> 00:35:52,160 Speaker 1: social issues, you know, with the with the chuddle or 632 00:35:52,200 --> 00:35:54,800 Speaker 1: and hit job and things like that. Um, it's a 633 00:35:54,920 --> 00:35:59,200 Speaker 1: relatively laiser fair um type of of of environment. For 634 00:35:59,480 --> 00:36:02,040 Speaker 1: for for middle class. If you're in the lower class, 635 00:36:02,080 --> 00:36:04,560 Speaker 1: that's different. Um, there's a lot of subsidies and so on. 636 00:36:04,680 --> 00:36:07,359 Speaker 1: And in the very top it's different as well, you know, Um, 637 00:36:07,440 --> 00:36:09,520 Speaker 1: but not so much for the middle class. They're going 638 00:36:09,560 --> 00:36:13,040 Speaker 1: to be investment opportunities, serious investment opportunities in Iran in 639 00:36:13,080 --> 00:36:16,080 Speaker 1: the near future, Yes there are. And and then you know, 640 00:36:16,160 --> 00:36:19,759 Speaker 1: you have European companies are are already lined up. People 641 00:36:19,840 --> 00:36:21,880 Speaker 1: traditionally think of it as you know, an oil and 642 00:36:21,960 --> 00:36:24,240 Speaker 1: gas industry, which is obviously the big industry in Iran. 643 00:36:24,600 --> 00:36:27,560 Speaker 1: One thing important that has changed in Iran um now 644 00:36:27,640 --> 00:36:30,560 Speaker 1: as opposed to in the past, is that Rohani is 645 00:36:30,800 --> 00:36:34,879 Speaker 1: legitimately trying to change some of the regulations surrounding foreign 646 00:36:34,960 --> 00:36:37,800 Speaker 1: investment and and and somewhat successfully. They used to have 647 00:36:38,160 --> 00:36:41,080 Speaker 1: very onerous restrictions as far as you know, who could 648 00:36:41,160 --> 00:36:43,960 Speaker 1: who could invest. So the Iranians are doing their bit 649 00:36:44,040 --> 00:36:46,680 Speaker 1: to try to attract foreign investment at this point, um 650 00:36:46,800 --> 00:36:48,880 Speaker 1: they sort of scare people off. There's a couple of 651 00:36:48,920 --> 00:36:51,239 Speaker 1: people still in jail and Swan, which is unfortunate, and 652 00:36:51,600 --> 00:36:54,000 Speaker 1: you know, it's kind of a damper on on on 653 00:36:54,280 --> 00:36:57,839 Speaker 1: on some of the more positive sentiment. The issue right 654 00:36:57,920 --> 00:37:00,440 Speaker 1: now is is mostly with the with the u UM 655 00:37:00,600 --> 00:37:03,640 Speaker 1: and the fact that there are still concerns with dollar 656 00:37:03,760 --> 00:37:06,640 Speaker 1: transactions and some of the sanctions have not been lifted, 657 00:37:07,080 --> 00:37:09,520 Speaker 1: and so for US business it's still hard. But I 658 00:37:09,600 --> 00:37:12,160 Speaker 1: think that that should change over time. So you're just 659 00:37:12,239 --> 00:37:15,279 Speaker 1: trying to you know, circumvent that through barter, through dealing 660 00:37:15,320 --> 00:37:17,960 Speaker 1: with the Euro, you know, and and and things like that. 661 00:37:18,760 --> 00:37:21,280 Speaker 1: It's at the disadvantage of US companies who are national 662 00:37:21,360 --> 00:37:25,200 Speaker 1: audience Coast to coast, Washington, Boston, San Francisco, New York, 663 00:37:25,760 --> 00:37:29,080 Speaker 1: everybody on serious next time shadel one, nineteen as well. 664 00:37:29,800 --> 00:37:34,319 Speaker 1: Can American companies get any kind of fair shake doing 665 00:37:34,480 --> 00:37:37,239 Speaker 1: business with the new Iran, or they have to set 666 00:37:37,280 --> 00:37:40,640 Speaker 1: up a shadow company in Germany, name it something else 667 00:37:41,719 --> 00:37:45,120 Speaker 1: to get any business done. Yeah, well, I think that 668 00:37:45,960 --> 00:37:49,920 Speaker 1: the officially there's not a need to set up shadow 669 00:37:50,000 --> 00:37:53,520 Speaker 1: companies and so on anymore. I think the the there 670 00:37:53,840 --> 00:37:56,560 Speaker 1: there has been some opening in in not not a 671 00:37:56,600 --> 00:37:59,400 Speaker 1: complete opening. There's they called the O fact restrictions are 672 00:37:59,800 --> 00:38:02,600 Speaker 1: you so in place to a large extent. So the 673 00:38:03,640 --> 00:38:06,359 Speaker 1: bigger issues is a pragmatical one and a practical one. 674 00:38:06,880 --> 00:38:09,480 Speaker 1: And the fact is that I think a lot of 675 00:38:09,640 --> 00:38:12,800 Speaker 1: the banks and the banking system is concerned because you know, 676 00:38:13,080 --> 00:38:15,040 Speaker 1: they're concerned that the rules might change on them. This 677 00:38:15,200 --> 00:38:17,239 Speaker 1: is this is the biggest problem, and that you know, 678 00:38:17,360 --> 00:38:20,120 Speaker 1: you you have had you know, some banks that transactions 679 00:38:20,120 --> 00:38:23,040 Speaker 1: with Iran and then you know they they had um 680 00:38:23,080 --> 00:38:26,160 Speaker 1: they were subsequently prosecuted. And then you have presidential candidates 681 00:38:26,200 --> 00:38:28,319 Speaker 1: are saying we're gonna you know, rip up the deal, 682 00:38:28,520 --> 00:38:30,840 Speaker 1: you know, the day one, the nuclear deal with Iran, 683 00:38:31,280 --> 00:38:34,040 Speaker 1: day one that we start. So I think that's what's 684 00:38:34,239 --> 00:38:38,400 Speaker 1: been you know, the fear that things could especially on 685 00:38:38,440 --> 00:38:41,279 Speaker 1: the banking side, UM could reverse this sort of the 686 00:38:42,520 --> 00:38:46,480 Speaker 1: the big impediment right now hopefully we'll have more clarity 687 00:38:46,840 --> 00:38:49,279 Speaker 1: on that after the elections and you know, well we'll 688 00:38:49,280 --> 00:38:52,320 Speaker 1: see how that goes. Let me shift gears here and 689 00:38:52,640 --> 00:38:56,600 Speaker 1: ask you about Brexit. It's uh, as one writer players 690 00:38:56,640 --> 00:38:59,120 Speaker 1: this morning, possibly going to be as significant as all 691 00:38:59,160 --> 00:39:01,440 Speaker 1: the other issues like China and oil before the end 692 00:39:01,480 --> 00:39:07,320 Speaker 1: of the year. Um, do you agree? I maybe not 693 00:39:07,520 --> 00:39:11,200 Speaker 1: as significant. Yes, it is a significant issue. Let me 694 00:39:11,239 --> 00:39:13,120 Speaker 1: put it this way. And one of the issues is that, 695 00:39:13,600 --> 00:39:17,360 Speaker 1: you know, the polls currently show the in vote or 696 00:39:17,400 --> 00:39:20,480 Speaker 1: the stay votes. You know, they're called both things. UM, 697 00:39:21,040 --> 00:39:24,560 Speaker 1: stay with the EU isn't it has has a lead? 698 00:39:24,640 --> 00:39:26,719 Speaker 1: I think the betting right now on on on the 699 00:39:26,840 --> 00:39:30,080 Speaker 1: street is kind of sevent You know, there's the these 700 00:39:30,160 --> 00:39:32,719 Speaker 1: UK betting shops which people follow this, you know, where 701 00:39:33,200 --> 00:39:35,080 Speaker 1: the where the retail money, so to speaker is go 702 00:39:35,160 --> 00:39:41,640 Speaker 1: as shots and they do better than some of the 703 00:39:41,680 --> 00:39:47,680 Speaker 1: traders I have to so people pay close attention to that. UM. 704 00:39:47,920 --> 00:39:52,399 Speaker 1: The problem is that, UM is that and we think 705 00:39:52,440 --> 00:39:56,719 Speaker 1: actually that Cameron got some relatively reasonable concessions out of 706 00:39:56,760 --> 00:39:59,800 Speaker 1: the EU, but they're hard to explain, they're sort of technical. 707 00:40:00,040 --> 00:40:03,280 Speaker 1: This is such an emotional issue and and he's been blasted. 708 00:40:03,520 --> 00:40:07,880 Speaker 1: You know um by do I will typically be Tory friendly. 709 00:40:08,120 --> 00:40:11,560 Speaker 1: Press have come back and and and and criticized him 710 00:40:11,719 --> 00:40:13,359 Speaker 1: on the deal. And so yeah, I think this thing 711 00:40:13,440 --> 00:40:16,759 Speaker 1: might might narrow, you know, before it widens, and it 712 00:40:17,480 --> 00:40:19,400 Speaker 1: could end up being like if you remember the Scottish 713 00:40:19,440 --> 00:40:22,080 Speaker 1: referenum that kind of got really close and then you know, 714 00:40:22,239 --> 00:40:24,839 Speaker 1: ultimately we think, yeah, probably they're they're going to stay 715 00:40:24,920 --> 00:40:27,880 Speaker 1: in the odds are that that that they don't you know, 716 00:40:28,000 --> 00:40:31,400 Speaker 1: leave leave the EU, but it'll it's going to tighten 717 00:40:31,480 --> 00:40:34,640 Speaker 1: before you know. I think there's more comfort. What's the 718 00:40:35,400 --> 00:40:41,320 Speaker 1: biggest concern your clients have right now? Uh? The the 719 00:40:41,560 --> 00:40:45,600 Speaker 1: three concerns, if I can say that are UM are 720 00:40:45,960 --> 00:40:50,920 Speaker 1: really China, fad and oil and energy policy if you 721 00:40:50,960 --> 00:40:55,239 Speaker 1: want to. The biggest concern, one single overarching concern, I 722 00:40:55,360 --> 00:40:58,440 Speaker 1: think is that what we're talking about earlier is the 723 00:40:58,600 --> 00:41:03,040 Speaker 1: narrative that um, you know that that monetary and fiscal 724 00:41:03,160 --> 00:41:07,640 Speaker 1: policy is having less and less impact. Uh, So you're 725 00:41:07,640 --> 00:41:12,040 Speaker 1: getting diminishing returns from from policymaker action. And so I 726 00:41:12,120 --> 00:41:15,719 Speaker 1: think there's concerned about that frankly, Uh, and not just 727 00:41:15,800 --> 00:41:19,200 Speaker 1: diminishing return but sometimes maybe even you know, a negative reaction. 728 00:41:19,239 --> 00:41:21,520 Speaker 1: So You're getting a lot of stories about, you know, 729 00:41:21,640 --> 00:41:24,160 Speaker 1: with the Bank of Japan wrong to cut you know, 730 00:41:24,400 --> 00:41:27,400 Speaker 1: rights their deposit rates in the negative territory? Is that 731 00:41:27,480 --> 00:41:29,640 Speaker 1: having you know, what's the cost benefit of that at 732 00:41:29,680 --> 00:41:31,839 Speaker 1: this point? Are you, you know, hurting the banks more, 733 00:41:32,239 --> 00:41:34,680 Speaker 1: you know, taxing the banks and so on and creating 734 00:41:34,719 --> 00:41:40,040 Speaker 1: a negative disinflationary sentiment and cycle rather than actually sort 735 00:41:40,040 --> 00:41:43,439 Speaker 1: of stimulating the economy. So I think if there's one 736 00:41:43,719 --> 00:41:47,239 Speaker 1: big overarching concern, it's it's it's really that it's some 737 00:41:47,320 --> 00:41:50,960 Speaker 1: sort of glow that the power of the powers to 738 00:41:51,000 --> 00:41:53,400 Speaker 1: be so to speak, and China actually manage, you know, 739 00:41:53,800 --> 00:41:57,000 Speaker 1: a soft landing. These are things that people are are 740 00:41:57,120 --> 00:42:00,239 Speaker 1: concerned about. The sun, thank you so much. Is age 741 00:42:00,280 --> 00:42:03,160 Speaker 1: Macro Advisors? A little bit of G twenty field there 742 00:42:03,200 --> 00:42:06,359 Speaker 1: as well, Mike, I've never seen this. I see it now. 743 00:42:07,160 --> 00:42:09,959 Speaker 1: Our good, our good colleague in financial and economic crime, 744 00:42:10,040 --> 00:42:14,720 Speaker 1: greg Ip greg Get, a wonderful journalist, was out on Twitter. 745 00:42:15,120 --> 00:42:18,640 Speaker 1: Do you know who retweeted him? I think him one 746 00:42:19,040 --> 00:42:23,960 Speaker 1: n our Cantu Lakota. He's a private citizen. He's a 747 00:42:24,040 --> 00:42:27,520 Speaker 1: private citizen. The former president of Minneapolis FED. Was it 748 00:42:27,600 --> 00:42:31,400 Speaker 1: fair to say, Mike he was a dot descended. He 749 00:42:31,640 --> 00:42:36,640 Speaker 1: was like the outlier lower dot COATU Lakota out on Twitter. 750 00:42:37,600 --> 00:42:40,520 Speaker 1: It's a nerd fest. That's very cool. Good to see. 751 00:42:40,560 --> 00:42:43,360 Speaker 1: I believe I'll have to follow the former president of 752 00:42:43,440 --> 00:42:46,520 Speaker 1: the Minneapolis FED. We will follow with another hour of 753 00:42:46,680 --> 00:42:48,200 Speaker 1: your Bloomberg surveillance