1 00:00:00,080 --> 00:00:13,040 Speaker 1: Ye. Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:33,960 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. We're 5 00:00:33,960 --> 00:00:38,280 Speaker 1: waiting for share price to enjoy the better banking, which 6 00:00:38,360 --> 00:00:41,159 Speaker 1: leads us to steamed animals. It leads us to Child's Peabody, 7 00:00:41,240 --> 00:00:44,840 Speaker 1: who nettled the banks through what was a very few 8 00:00:45,080 --> 00:00:47,680 Speaker 1: who had a bearish point of view going into the year, 9 00:00:48,000 --> 00:00:49,440 Speaker 1: and one of the very few that turned out to 10 00:00:49,440 --> 00:00:51,440 Speaker 1: be right as well. He joined us from port Talis Partners. 11 00:00:51,440 --> 00:00:53,880 Speaker 1: Here's the chairman there, Charles. Great to catch up with you. 12 00:00:54,040 --> 00:00:55,720 Speaker 1: Let's talk about the numbers in front of us over 13 00:00:55,760 --> 00:00:57,360 Speaker 1: the last couple of days before we get to your 14 00:00:57,400 --> 00:01:00,680 Speaker 1: broader framework for thinking about this sector. The numbers this 15 00:01:00,720 --> 00:01:04,280 Speaker 1: morning actually looked pretty good relative to expectations for both 16 00:01:04,360 --> 00:01:07,160 Speaker 1: Goldman Sacks and for Bank of America. To start with 17 00:01:07,240 --> 00:01:10,080 Speaker 1: bf A first, it's interesting that it's the retail side 18 00:01:10,080 --> 00:01:12,560 Speaker 1: of the business that is picking up the slack here, 19 00:01:12,959 --> 00:01:14,920 Speaker 1: and the guidance coming from the company is that this 20 00:01:14,959 --> 00:01:17,520 Speaker 1: economy is still good. We don't see the recession around 21 00:01:17,520 --> 00:01:20,039 Speaker 1: the corner that was feared maybe a month ago in 22 00:01:20,040 --> 00:01:23,640 Speaker 1: this market. You thought on what you see this morning, Charles, Yeah, 23 00:01:23,680 --> 00:01:26,440 Speaker 1: I would say that there was nothing not to like 24 00:01:26,640 --> 00:01:28,240 Speaker 1: at b of A. I mean it was it was 25 00:01:28,240 --> 00:01:30,960 Speaker 1: pretty good all the way through. But as you pointed out, 26 00:01:31,040 --> 00:01:35,000 Speaker 1: the spread lending businesses was where the particular strength was 27 00:01:35,720 --> 00:01:39,640 Speaker 1: UM and there was some weakness in the businesses UM. 28 00:01:39,800 --> 00:01:42,000 Speaker 1: So yeah, the revenues, this is one of the first 29 00:01:42,000 --> 00:01:45,039 Speaker 1: banks actually beat on revenues on this quarter. So it 30 00:01:45,120 --> 00:01:46,800 Speaker 1: was a pretty solid quarter for b of A all 31 00:01:46,800 --> 00:01:49,480 Speaker 1: the way through. Charles. Also quite interesting that provisions for 32 00:01:49,480 --> 00:01:52,440 Speaker 1: credit losses actually decreased at Bank of America. The story 33 00:01:52,480 --> 00:01:55,480 Speaker 1: at JP Morgan yesterday was the opposite. What do you 34 00:01:55,480 --> 00:01:59,120 Speaker 1: think is the theme the dominant theme that we need 35 00:01:59,160 --> 00:02:02,440 Speaker 1: to start to think about little bit more. Well. I 36 00:02:02,480 --> 00:02:05,480 Speaker 1: think the difference is that JP Morgan has been a 37 00:02:05,480 --> 00:02:08,440 Speaker 1: little more aggressive in the capital markets arena, and I 38 00:02:08,480 --> 00:02:10,600 Speaker 1: think they got a little over their skis in the 39 00:02:10,600 --> 00:02:13,600 Speaker 1: fourth quarter and got caught by the bad volatility with 40 00:02:13,680 --> 00:02:16,679 Speaker 1: some hung loans and some leverage loan problems, and then 41 00:02:16,680 --> 00:02:21,119 Speaker 1: in their commercial bank UM they do have some credits 42 00:02:21,160 --> 00:02:24,480 Speaker 1: in the commercial real estate area, so middle market banking, 43 00:02:25,120 --> 00:02:27,480 Speaker 1: and that's what you are going to see as the 44 00:02:27,480 --> 00:02:30,960 Speaker 1: the stresses progress. You're seeing one off problems at the 45 00:02:30,960 --> 00:02:33,760 Speaker 1: community banks. My guests always over the next week you'll 46 00:02:33,760 --> 00:02:36,280 Speaker 1: see some more problems at the regional banks. The big 47 00:02:36,280 --> 00:02:39,840 Speaker 1: banks kind of lag in terms of showing the credit problems. Well, 48 00:02:39,880 --> 00:02:42,760 Speaker 1: the big banks lag. And I guess Charleston, that you've been, 49 00:02:42,760 --> 00:02:45,960 Speaker 1: as John mentioned, so oppression on this. How have you 50 00:02:46,120 --> 00:02:50,480 Speaker 1: changed your view of their five year or three years strategy? 51 00:02:50,919 --> 00:02:53,840 Speaker 1: I mean, what's the new pbody? This is where banks 52 00:02:53,880 --> 00:02:58,360 Speaker 1: are heading? Well, I guess it depends on where you 53 00:02:58,360 --> 00:03:00,520 Speaker 1: think you are in the cycle. I do believe we 54 00:03:00,560 --> 00:03:03,640 Speaker 1: started a bear market back in two thousand and eighteen, 55 00:03:03,680 --> 00:03:05,680 Speaker 1: and that the peak prices we saw in the first 56 00:03:05,760 --> 00:03:08,040 Speaker 1: quarter of eighteen won't be seen again until after the 57 00:03:08,080 --> 00:03:11,840 Speaker 1: recession is done, and that the big banks are facing 58 00:03:11,880 --> 00:03:15,160 Speaker 1: an earnings recession. But but I think their balance sheets 59 00:03:15,160 --> 00:03:17,520 Speaker 1: are going to come through very much. Intact, they're not 60 00:03:17,520 --> 00:03:19,520 Speaker 1: going to have the capital impairments that they've had in 61 00:03:19,520 --> 00:03:21,880 Speaker 1: the past, and so for the next cycle, I think 62 00:03:21,880 --> 00:03:25,600 Speaker 1: these things are going to be great. Long term investments. Okay, 63 00:03:25,639 --> 00:03:27,760 Speaker 1: they're gonna be great long term investments, but are they 64 00:03:27,840 --> 00:03:30,200 Speaker 1: get emerged to do that? Are they going to do 65 00:03:30,240 --> 00:03:33,960 Speaker 1: it through legit cash return or is it financial engineering 66 00:03:34,080 --> 00:03:38,640 Speaker 1: or dare I say monopoly edges of monopoly? Well, if 67 00:03:38,640 --> 00:03:41,400 Speaker 1: I'm right about you know, coming through their balance sheets, intact, 68 00:03:41,480 --> 00:03:43,360 Speaker 1: they're going to be able to invest in their businesses 69 00:03:43,440 --> 00:03:46,960 Speaker 1: day one when the next recovery starts. So I'm really 70 00:03:46,960 --> 00:03:50,360 Speaker 1: looking at these as very good strategic plays on the 71 00:03:50,440 --> 00:03:53,200 Speaker 1: next cycle. I think they've got some tough letting ahead 72 00:03:53,200 --> 00:03:55,960 Speaker 1: of them, you know, between now and so I think 73 00:03:56,000 --> 00:04:00,200 Speaker 1: they're going to be lower lows UM in this bear market. UM. 74 00:04:00,240 --> 00:04:03,240 Speaker 1: In fact, I mean today's sort of is the cherry 75 00:04:03,240 --> 00:04:06,760 Speaker 1: on on the you know, icing um in the sense 76 00:04:06,760 --> 00:04:08,760 Speaker 1: that you're getting pretty good news out of both Goldman 77 00:04:08,800 --> 00:04:12,160 Speaker 1: and b of A, and the stocks probably will run 78 00:04:12,200 --> 00:04:15,160 Speaker 1: on that. But I've sort of thought that this relief 79 00:04:15,240 --> 00:04:18,200 Speaker 1: rally that we're in right now would run out of 80 00:04:18,200 --> 00:04:21,000 Speaker 1: steam sometime by the end of next week, and and 81 00:04:21,040 --> 00:04:23,200 Speaker 1: I think we'd you know, have some issues with the 82 00:04:23,240 --> 00:04:25,919 Speaker 1: FED when they meet on the thirtieth of January, because 83 00:04:26,000 --> 00:04:28,359 Speaker 1: I don't think they're going to change q T and 84 00:04:28,400 --> 00:04:31,200 Speaker 1: so liquidity is still going to be an issue. Charles, 85 00:04:31,279 --> 00:04:34,520 Speaker 1: let's talk about spread lending, just basic vanilla banking. Do 86 00:04:34,640 --> 00:04:38,279 Speaker 1: you see them being able to offset what we're probably 87 00:04:38,279 --> 00:04:41,280 Speaker 1: going to see in net interest margins, which is potentially contraction. 88 00:04:41,320 --> 00:04:43,080 Speaker 1: Do you see them being able to offset that with 89 00:04:43,160 --> 00:04:47,160 Speaker 1: better volume, better loan growth. Well, you know, vi of 90 00:04:47,279 --> 00:04:49,440 Speaker 1: A was one of the names. You know, I've sort 91 00:04:49,440 --> 00:04:52,080 Speaker 1: of had a barbell strategy and turns my long recommendations. 92 00:04:52,120 --> 00:04:55,719 Speaker 1: Be of A is the quality name, and Goldman Sachs 93 00:04:55,800 --> 00:04:57,440 Speaker 1: was the other name I had recommended, with you know, 94 00:04:57,480 --> 00:05:00,440 Speaker 1: a little bit of hair. Um. I expect that the 95 00:05:00,480 --> 00:05:03,880 Speaker 1: yeld curve will actually steepen by the long end selling off, 96 00:05:04,720 --> 00:05:07,000 Speaker 1: and that's actually a very big positive for b of A. 97 00:05:07,040 --> 00:05:09,200 Speaker 1: They might have much more sensitivity than the other big 98 00:05:09,200 --> 00:05:13,159 Speaker 1: banks to the long end. What about for the others then, Charles, 99 00:05:13,160 --> 00:05:18,360 Speaker 1: what's your base case for them? I'm not as as 100 00:05:18,960 --> 00:05:24,400 Speaker 1: hyped up on on the spread lending businesses UM in general, UM, 101 00:05:24,520 --> 00:05:29,000 Speaker 1: particularly at the regional bank level. UM. So you know, 102 00:05:29,120 --> 00:05:32,080 Speaker 1: even you know, JP Morgan pointed out that going into 103 00:05:32,080 --> 00:05:35,400 Speaker 1: the first quarter their NII, their net interest income would 104 00:05:35,400 --> 00:05:39,080 Speaker 1: be flat sequencingly, so I think you're losing some of 105 00:05:39,080 --> 00:05:44,200 Speaker 1: the mojo in that game going forward, partly because I 106 00:05:44,279 --> 00:05:48,120 Speaker 1: think the deposit beatas are going to start to accelerate higher. Now, Okay, 107 00:05:48,560 --> 00:05:50,440 Speaker 1: I love it when you go to Greek letters, Charles. 108 00:05:50,480 --> 00:05:55,000 Speaker 1: It's a great joy to hear about deposit. What's the 109 00:05:55,120 --> 00:05:59,400 Speaker 1: gamma on headcount in big banking. You've been really good 110 00:05:59,440 --> 00:06:02,800 Speaker 1: about the expense control leading the way to better use 111 00:06:02,839 --> 00:06:06,880 Speaker 1: of cash, etcetera, etcetera. One year out, three years out, 112 00:06:06,960 --> 00:06:10,640 Speaker 1: five years out. Does Charles Peabody think about a thousand here, 113 00:06:10,720 --> 00:06:14,159 Speaker 1: eight hundred there, etcetera. Are we going to see substantial 114 00:06:14,200 --> 00:06:19,760 Speaker 1: reduction in headcount due to technology and due to competition. Yeah, 115 00:06:19,760 --> 00:06:23,360 Speaker 1: I don't expect across the board layoffs. I do think 116 00:06:23,440 --> 00:06:27,159 Speaker 1: certain businesses, obvious ones like mortgage banking are going to 117 00:06:27,200 --> 00:06:30,960 Speaker 1: continue to see restructuring or downsizing. I think you're going 118 00:06:31,000 --> 00:06:33,479 Speaker 1: to see that in the wealth management businesses UM. I 119 00:06:33,560 --> 00:06:37,359 Speaker 1: just don't think the underlying f structure supports UM the 120 00:06:37,400 --> 00:06:40,440 Speaker 1: build up that they've had their UM and you might 121 00:06:40,520 --> 00:06:42,719 Speaker 1: get it, you know, as you do cyclically in some 122 00:06:42,800 --> 00:06:45,760 Speaker 1: of the capital markets businesses as well, But I don't 123 00:06:45,760 --> 00:06:47,840 Speaker 1: see I think it's going to be more business by 124 00:06:47,880 --> 00:06:51,360 Speaker 1: business and then time by time type of of layoffs. 125 00:06:51,640 --> 00:06:56,960 Speaker 1: Which fims under the most pressure right now shows well, um, 126 00:06:57,360 --> 00:07:01,000 Speaker 1: you know, wells Fargo is still struggling to um improve 127 00:07:01,040 --> 00:07:03,839 Speaker 1: its efficiency ratio. But you know in the fourth quarter 128 00:07:04,080 --> 00:07:06,640 Speaker 1: they were supposed to have a efficiency ratio with a 129 00:07:06,640 --> 00:07:10,400 Speaker 1: five handle and they came in at um. City Group 130 00:07:10,440 --> 00:07:14,080 Speaker 1: is the other one that's struggling to keep their costs down. Um. 131 00:07:14,120 --> 00:07:16,880 Speaker 1: So those are the two and it's largely because they've 132 00:07:16,920 --> 00:07:19,840 Speaker 1: got revenue problems. I mean, those two banks showed declines 133 00:07:19,920 --> 00:07:21,880 Speaker 1: in revenues year over year, whereas b of A and 134 00:07:21,960 --> 00:07:25,400 Speaker 1: JP Morgan actually showed growth and revenues some of the nuances. 135 00:07:25,800 --> 00:07:42,480 Speaker 1: Thank you so much to Vitelis John for me, this 136 00:07:42,560 --> 00:07:45,080 Speaker 1: is the interview of the day, not only on Brexit, 137 00:07:45,160 --> 00:07:48,080 Speaker 1: but the future capitalism as well. One of the giants 138 00:07:48,080 --> 00:07:52,200 Speaker 1: of economic history, Robert Skodowski. He is definitive on Kane's 139 00:07:52,480 --> 00:07:56,160 Speaker 1: and of course his treatment of the financial crisis as well. 140 00:07:56,200 --> 00:07:59,000 Speaker 1: Lord Skodowski, thank you so much for joining John Farrell 141 00:07:59,360 --> 00:08:01,960 Speaker 1: and myself. I want to pick right up Lord Skodowski 142 00:08:02,040 --> 00:08:05,040 Speaker 1: with you fired up on Westminr Green this morning. So, 143 00:08:05,160 --> 00:08:07,160 Speaker 1: John Ferrell, what I want to do with Lord Skadowsky. 144 00:08:07,240 --> 00:08:11,720 Speaker 1: To start is, look back, Lord Skadowski, you went after 145 00:08:11,880 --> 00:08:15,480 Speaker 1: David Cameron, and you went after the elites of Eaton. 146 00:08:15,920 --> 00:08:20,440 Speaker 1: What did they get wrong so many years ago? Well, 147 00:08:20,680 --> 00:08:23,680 Speaker 1: I think David Cameron got two things wrong. First of 148 00:08:23,720 --> 00:08:29,800 Speaker 1: all in calling a referendum without any any any real 149 00:08:30,040 --> 00:08:36,559 Speaker 1: prior negotiation with the EU about the terms on which 150 00:08:37,200 --> 00:08:41,160 Speaker 1: the argument could be made. And then having having um 151 00:08:41,720 --> 00:08:46,960 Speaker 1: got the result of the referendum, um, he then quit um. 152 00:08:47,000 --> 00:08:50,959 Speaker 1: I mean, he basically landed landed us in this mess 153 00:08:51,040 --> 00:08:55,360 Speaker 1: without adequate preparation, and it was purely because of the 154 00:08:55,440 --> 00:08:59,280 Speaker 1: internal divisions and the Conservative Party. He wasn't really thinking 155 00:08:59,400 --> 00:09:04,360 Speaker 1: through needs beyond politics are the internal So in that 156 00:09:04,400 --> 00:09:06,880 Speaker 1: sense I think he you know he'll be He'll go 157 00:09:06,960 --> 00:09:10,520 Speaker 1: down as as well great failures as Prime minister. You 158 00:09:10,559 --> 00:09:13,560 Speaker 1: talk about the internal divisions of a majority party. The 159 00:09:13,559 --> 00:09:16,600 Speaker 1: Conservatives are Tories, folks are like a kin to the 160 00:09:16,600 --> 00:09:21,320 Speaker 1: Republican movement within the United States of America over fifty years, 161 00:09:22,080 --> 00:09:26,640 Speaker 1: Lord Skodowski, those internal divisions are they normal? The way 162 00:09:26,880 --> 00:09:30,800 Speaker 1: the way Britain is now with divisions in the majority party, 163 00:09:31,120 --> 00:09:34,719 Speaker 1: is that business as usual? Well, I's you see, it's 164 00:09:34,760 --> 00:09:37,160 Speaker 1: not just the majority party. I mean, it's it's it 165 00:09:37,320 --> 00:09:42,160 Speaker 1: runs right through the country. I remember, the Britain's relationship 166 00:09:42,240 --> 00:09:45,839 Speaker 1: with the EU has always been rather cool one. I mean, 167 00:09:45,840 --> 00:09:49,319 Speaker 1: we've joined late and therefore it's not surprising actually that 168 00:09:49,400 --> 00:09:52,440 Speaker 1: we're likely to leave early and and and we've never 169 00:09:52,679 --> 00:09:56,480 Speaker 1: i mean even the remainders, the people who want to stay, 170 00:09:56,720 --> 00:09:59,800 Speaker 1: have never been that enthusiastic about Europe as a core. 171 00:10:00,920 --> 00:10:03,800 Speaker 1: This regard as a business proposition is the only way 172 00:10:03,840 --> 00:10:06,720 Speaker 1: to get into that dynamic market. That was a motive 173 00:10:06,760 --> 00:10:09,200 Speaker 1: for joining. And if you look at the you know, 174 00:10:09,440 --> 00:10:13,079 Speaker 1: the poles of eurobarometer, we've always been at the bottom 175 00:10:13,120 --> 00:10:15,679 Speaker 1: as far as support for the EU concern. So it's 176 00:10:15,720 --> 00:10:19,400 Speaker 1: not surprising that if you then throw it to the 177 00:10:19,440 --> 00:10:22,800 Speaker 1: people so to speak, that you're going to or you know, 178 00:10:22,920 --> 00:10:25,600 Speaker 1: get to get the results you did, you know, Megan 179 00:10:25,720 --> 00:10:28,640 Speaker 1: Desire also with us this morning, Lord Desai talks about 180 00:10:28,640 --> 00:10:32,480 Speaker 1: a liberal order. You have been the definitive biographer of 181 00:10:32,480 --> 00:10:35,920 Speaker 1: the twentieth centuries liberal order in the United Kingdom, and 182 00:10:35,920 --> 00:10:37,960 Speaker 1: you folks, you can bring us right over to America 183 00:10:38,400 --> 00:10:43,880 Speaker 1: as well. What's our exit strategy from our paralysis let's 184 00:10:43,880 --> 00:10:47,840 Speaker 1: start with the United Kingdom right now. Yeah, Well, I 185 00:10:47,880 --> 00:10:51,200 Speaker 1: think I think one thing is you've got to in 186 00:10:51,240 --> 00:10:53,920 Speaker 1: my in my, in my view, what you've got to 187 00:10:53,960 --> 00:10:58,679 Speaker 1: do is to respect the results of the referendum and 188 00:10:58,760 --> 00:11:01,760 Speaker 1: try and work your way round it so that you know, 189 00:11:02,200 --> 00:11:06,160 Speaker 1: least damage and most good results from it. I mean, 190 00:11:06,480 --> 00:11:10,160 Speaker 1: it doesn't seem to me you can safely go back 191 00:11:10,720 --> 00:11:15,600 Speaker 1: on a result like that. You say, look, let's let's 192 00:11:15,640 --> 00:11:19,920 Speaker 1: pretend it never happened. Yeah, you have written definitively about 193 00:11:19,960 --> 00:11:24,280 Speaker 1: how England and Great Britain and with your United States 194 00:11:24,679 --> 00:11:27,319 Speaker 1: build up for World War two. I mean, this country 195 00:11:27,320 --> 00:11:31,880 Speaker 1: has faced shocks before, and yet I see massive remain 196 00:11:32,040 --> 00:11:34,880 Speaker 1: hand ringing that the world's gonna end if we get 197 00:11:34,960 --> 00:11:37,920 Speaker 1: a no deal brexit. Do you have the same I 198 00:11:38,120 --> 00:11:41,360 Speaker 1: don't believe you do. You don't have the same henrying inks, 199 00:11:41,440 --> 00:11:45,200 Speaker 1: do you? Man? No? No, I think that's fair, that's 200 00:11:45,280 --> 00:11:49,319 Speaker 1: fair mungering. I think in there was there was an 201 00:11:49,320 --> 00:11:54,800 Speaker 1: existential crisis. I mean there really was, and um Britain's 202 00:11:54,840 --> 00:11:58,640 Speaker 1: world would have ended had Hitler been allowed to get 203 00:11:58,720 --> 00:12:01,280 Speaker 1: his way. That is an the case today, and I 204 00:12:01,320 --> 00:12:05,720 Speaker 1: think comparisons of that kind are wrong. Mind you. I 205 00:12:05,760 --> 00:12:07,920 Speaker 1: think there's a good case for saying, look, there are 206 00:12:07,960 --> 00:12:10,560 Speaker 1: things happening in the world at the moment which we 207 00:12:10,640 --> 00:12:15,400 Speaker 1: thought we'd put behind us, in the words, the resurgence 208 00:12:15,760 --> 00:12:21,000 Speaker 1: of nationalism and even of anti semitism. You see. So 209 00:12:21,080 --> 00:12:24,480 Speaker 1: there there, You know, there's a great phrase which goes 210 00:12:24,760 --> 00:12:28,920 Speaker 1: history doesn't repeat itself, but it rhymes, and so you 211 00:12:28,920 --> 00:12:33,400 Speaker 1: know you never finally transcend anything that you thought you're 212 00:12:33,480 --> 00:12:37,160 Speaker 1: left behind. That's true in the United States too. Well, 213 00:12:37,160 --> 00:12:38,760 Speaker 1: that's right where I wanted to go. You're reading, you're 214 00:12:38,760 --> 00:12:41,400 Speaker 1: reading my Lord Skadelsky, if you're just joining us sorts Robert, 215 00:12:41,440 --> 00:12:44,520 Speaker 1: Lord Skodolski of Warwick, and of course definitive on John 216 00:12:44,520 --> 00:12:46,800 Speaker 1: Maynard Keynes and so much of the treatment of the 217 00:12:46,800 --> 00:12:51,880 Speaker 1: twentieth century history. Your thoughts please, on President Trump in 218 00:12:52,120 --> 00:12:55,920 Speaker 1: all that you witnessed in Washington. Does Lord Skadowski consider 219 00:12:56,040 --> 00:13:01,440 Speaker 1: Trump to be a one off? Oh? God, that's a 220 00:13:01,440 --> 00:13:05,199 Speaker 1: difficult question, you know, I think I'm I think what 221 00:13:05,200 --> 00:13:09,560 Speaker 1: what President Trump has done is to raise issues which 222 00:13:09,640 --> 00:13:13,240 Speaker 1: needed to be raised, for example, issues to do with globalization, 223 00:13:14,120 --> 00:13:16,440 Speaker 1: but in a way rather like a bull in a 224 00:13:16,559 --> 00:13:20,080 Speaker 1: china shop. I mean, it's a very different way from 225 00:13:20,120 --> 00:13:24,320 Speaker 1: from the way Canes raised similar issues in the nineteen 226 00:13:24,400 --> 00:13:28,240 Speaker 1: thirties and say, well, let's see whether we can find 227 00:13:28,840 --> 00:13:32,600 Speaker 1: a way through in a liberal system. And so that's why, 228 00:13:32,960 --> 00:13:35,760 Speaker 1: you know, in the end he worked towards Breton Woods 229 00:13:35,760 --> 00:13:39,440 Speaker 1: and those kind of institutions that would make globalism safe. 230 00:13:39,760 --> 00:13:43,160 Speaker 1: Whereas President Trump, it seems to me that barges in 231 00:13:44,480 --> 00:13:47,560 Speaker 1: on some of the right questions and and for some 232 00:13:47,679 --> 00:13:50,040 Speaker 1: of the right reasons, which is that you know, there 233 00:13:50,080 --> 00:13:52,760 Speaker 1: are lots of people who have been very damaged by 234 00:13:52,760 --> 00:13:56,120 Speaker 1: by you, but he doesn't do it in a I think, 235 00:13:56,120 --> 00:14:00,560 Speaker 1: in a way that makes makes a good solution likely. 236 00:14:01,160 --> 00:14:02,760 Speaker 1: It's good to ask you one more question. This is 237 00:14:02,760 --> 00:14:05,959 Speaker 1: an email for John from Coventry emailing in Today, and 238 00:14:06,160 --> 00:14:10,480 Speaker 1: John asked Lord Skodolski about the future of British banking. 239 00:14:10,600 --> 00:14:13,760 Speaker 1: I mean, in a global economy competing against the big 240 00:14:13,880 --> 00:14:16,760 Speaker 1: US banks, do you see a place for the city 241 00:14:16,920 --> 00:14:21,200 Speaker 1: and for London banking? Yeah, there is, there is obviously 242 00:14:21,240 --> 00:14:23,360 Speaker 1: a place for the city and and and and and 243 00:14:23,400 --> 00:14:26,800 Speaker 1: the City of London is is the world foremost banking institution. 244 00:14:27,240 --> 00:14:29,920 Speaker 1: But I think there I think, you know, I I 245 00:14:30,360 --> 00:14:35,000 Speaker 1: accept the view that financialization in general has gone too far, 246 00:14:35,440 --> 00:14:39,800 Speaker 1: and that the financial services sector has an undue influence 247 00:14:39,840 --> 00:14:42,320 Speaker 1: on what happens in the rest of the economy. And 248 00:14:42,400 --> 00:14:47,280 Speaker 1: so I wouldn't I wouldn't you know, weep shed tears 249 00:14:47,480 --> 00:14:52,440 Speaker 1: if if if, as Churchill once said, finance was less 250 00:14:52,560 --> 00:14:58,000 Speaker 1: proud and industry more content. With Churchill's remarks, you know 251 00:14:58,520 --> 00:15:01,080 Speaker 1: that's and I think that's got a lot of relevance 252 00:15:01,080 --> 00:15:04,360 Speaker 1: for our in time. Robert Skodowski, thank you so much, 253 00:15:04,400 --> 00:15:07,040 Speaker 1: Lord Skodowski, over the House of Lords, of course, and 254 00:15:07,160 --> 00:15:11,360 Speaker 1: being with us today on television and here on Bloomberg Radio. 255 00:15:25,240 --> 00:15:28,760 Speaker 1: One of the really important things to understand is it 256 00:15:28,800 --> 00:15:32,440 Speaker 1: within all the talent at Bloomberg Television, in Bloomberg Radio, 257 00:15:32,520 --> 00:15:36,960 Speaker 1: there are odd codssles, amendments to agreements. And one of 258 00:15:37,000 --> 00:15:39,080 Speaker 1: the great joys of working with Paul Sweeney in New 259 00:15:39,160 --> 00:15:43,880 Speaker 1: York is the forced agreement by senior management at Bloomberg 260 00:15:43,960 --> 00:15:47,160 Speaker 1: that because Paul went to Duke University, we need to 261 00:15:47,280 --> 00:15:51,040 Speaker 1: interview from time to time on a timely basis, like 262 00:15:51,120 --> 00:15:54,640 Speaker 1: every other day people from Chapel Hill. So we will 263 00:15:54,680 --> 00:15:57,080 Speaker 1: do that right now, Paul Sweeney and Tom Kenyan with us. 264 00:15:57,520 --> 00:16:02,080 Speaker 1: Chuck Robbins of Cisco mathemat your University of North Carolina, 265 00:16:02,160 --> 00:16:06,560 Speaker 1: Chapel Hill, Chuck Robins, I want to talk about one 266 00:16:06,640 --> 00:16:11,000 Speaker 1: line in your wonderful annual report. Our relationships with our 267 00:16:11,040 --> 00:16:16,040 Speaker 1: customers are changing from transactional to life cycle. That to 268 00:16:16,120 --> 00:16:19,640 Speaker 1: me is the Cisco challenge over decades. John Chambers had 269 00:16:19,680 --> 00:16:21,640 Speaker 1: to deal with that, and now you're dealing with it 270 00:16:21,680 --> 00:16:25,120 Speaker 1: in this who hold the Cloud and technology world? How 271 00:16:25,160 --> 00:16:29,040 Speaker 1: are you getting to life cycle relationships? Hey? Tom, First 272 00:16:29,040 --> 00:16:30,520 Speaker 1: of all, I just want you to know that if 273 00:16:30,560 --> 00:16:32,240 Speaker 1: you hadn't been on here, I would have left when 274 00:16:32,280 --> 00:16:36,200 Speaker 1: I found out pol We knew that. I'm in London 275 00:16:36,200 --> 00:16:39,080 Speaker 1: and I'm sorry. We look forward to seeing you in 276 00:16:39,120 --> 00:16:42,080 Speaker 1: London next time. That's great, you know. So the whole 277 00:16:42,120 --> 00:16:45,440 Speaker 1: notion of life cycle is really connected to UH the 278 00:16:45,480 --> 00:16:47,880 Speaker 1: business model transition that we've been driving for the last 279 00:16:47,880 --> 00:16:50,680 Speaker 1: three and a half years. Has we've increased the content 280 00:16:50,840 --> 00:16:55,800 Speaker 1: of our technology portfolio leaning more towards software, then you 281 00:16:55,920 --> 00:16:57,320 Speaker 1: just have to do that right. You have to make 282 00:16:57,320 --> 00:17:00,160 Speaker 1: sure your customers are getting the value out of it. UH. 283 00:17:00,240 --> 00:17:02,640 Speaker 1: And so we built an entire organization we're building it 284 00:17:02,720 --> 00:17:05,240 Speaker 1: right now, led by a lady named Maria Martinez who 285 00:17:05,240 --> 00:17:08,159 Speaker 1: actually joined us from Salesforce. She was the president of 286 00:17:08,200 --> 00:17:11,879 Speaker 1: customer success there and she's building this methodology for us. 287 00:17:11,960 --> 00:17:14,360 Speaker 1: Right now, we're extending it to both our our software 288 00:17:14,359 --> 00:17:16,520 Speaker 1: assets as well as our hardware assets to really make 289 00:17:16,560 --> 00:17:20,639 Speaker 1: sure our customers, you know, as she says, go from 290 00:17:20,760 --> 00:17:23,360 Speaker 1: choosing it to using it to loving it and uh. 291 00:17:23,920 --> 00:17:27,159 Speaker 1: And I think if you do that then you obviously, uh, 292 00:17:27,680 --> 00:17:31,800 Speaker 1: you improve renewal rates, but you really improve customer satisfaction, 293 00:17:31,800 --> 00:17:35,560 Speaker 1: which creates just great partnerships. In the cycle of Cisco, 294 00:17:35,680 --> 00:17:37,640 Speaker 1: there's been the up and down. I love how you say, 295 00:17:37,880 --> 00:17:39,680 Speaker 1: the idea of using it is what you've got to 296 00:17:39,720 --> 00:17:41,879 Speaker 1: get to in the emotion of it. Uh, in a 297 00:17:41,920 --> 00:17:45,399 Speaker 1: positive sense. Is it impossible to do that now with 298 00:17:45,440 --> 00:17:48,680 Speaker 1: the advent of the cloud and so many new competitors 299 00:17:48,720 --> 00:17:52,439 Speaker 1: coming in, even in hardware or in software. Well, the 300 00:17:52,480 --> 00:17:55,800 Speaker 1: irony is is that the actual migration to cloud is 301 00:17:56,200 --> 00:17:58,760 Speaker 1: is what's driving our growth, which people can't quite get 302 00:17:58,760 --> 00:18:02,359 Speaker 1: their heads around, but are start with me. Well, what 303 00:18:02,400 --> 00:18:05,719 Speaker 1: they're what they're now dealing with is they're dealing with 304 00:18:05,800 --> 00:18:11,240 Speaker 1: consuming application services from sas providers like Workday, Salesforce. They're 305 00:18:11,280 --> 00:18:15,760 Speaker 1: consuming cloud services from Amazon, Microsoft, Google, and then they 306 00:18:15,800 --> 00:18:18,399 Speaker 1: still have applications running in their private data centers. They 307 00:18:18,400 --> 00:18:21,160 Speaker 1: have customers everywhere they I mean the employees everywhere. They've 308 00:18:21,200 --> 00:18:25,480 Speaker 1: got IoT exploding, and so the all of their traffic 309 00:18:25,560 --> 00:18:28,080 Speaker 1: flows are completely different than what they've been for the 310 00:18:28,160 --> 00:18:31,120 Speaker 1: last decade. And so they're having to re architect their 311 00:18:31,280 --> 00:18:34,359 Speaker 1: entire I T infrastructure to accommodate this new cloud world, 312 00:18:34,359 --> 00:18:39,960 Speaker 1: which ironically means we're rebuilding networks. And so that's Uh, 313 00:18:40,040 --> 00:18:42,200 Speaker 1: this whole transition to the cloud has been a huge 314 00:18:42,440 --> 00:18:45,360 Speaker 1: contributor to our growth over the last you know, four quarters. 315 00:18:45,920 --> 00:18:48,439 Speaker 1: So Chuck, as you I think what people historically think 316 00:18:48,440 --> 00:18:51,439 Speaker 1: of Cisco, they think of networking gear and hardware. And 317 00:18:51,480 --> 00:18:54,400 Speaker 1: of course you've been you know, very much out front 318 00:18:54,480 --> 00:18:57,119 Speaker 1: and kind of changing your business model to more services, 319 00:18:57,280 --> 00:19:01,320 Speaker 1: recurring revenue. Where are you in that transition. A lot 320 00:19:01,320 --> 00:19:03,040 Speaker 1: of it has been done through M and A. Should 321 00:19:03,080 --> 00:19:05,240 Speaker 1: we expect more M and as you can continue to 322 00:19:05,280 --> 00:19:08,040 Speaker 1: evolve your business model. Yes, So last quarter we said 323 00:19:08,040 --> 00:19:12,480 Speaker 1: fifty of our software business is now coming from subscriptions 324 00:19:13,240 --> 00:19:17,160 Speaker 1: and um, ironically we have added to our portfolio through 325 00:19:17,200 --> 00:19:21,879 Speaker 1: our M and A capability, but we've actually built the 326 00:19:21,960 --> 00:19:24,600 Speaker 1: largest software subscription business will have three years from now 327 00:19:24,680 --> 00:19:27,480 Speaker 1: is on core networking, believe it or not. And in 328 00:19:28,480 --> 00:19:34,560 Speaker 1: we launched an Ethernet switch and UH, and we actually 329 00:19:34,640 --> 00:19:37,320 Speaker 1: launched it with a subscription on it for the first time, 330 00:19:37,359 --> 00:19:40,040 Speaker 1: and people were We're concerned as to whether we could 331 00:19:40,080 --> 00:19:42,640 Speaker 1: do that and whether our customers would embrace it or not. 332 00:19:42,640 --> 00:19:44,919 Speaker 1: Not only do they embrace it, but that product became 333 00:19:44,960 --> 00:19:47,440 Speaker 1: the fastest ramping product in the history of the company. 334 00:19:47,520 --> 00:19:49,880 Speaker 1: So the value that we're adding. So if you think 335 00:19:49,880 --> 00:19:52,800 Speaker 1: about our subscription business now, we have subscriptions on wireless 336 00:19:52,840 --> 00:19:55,639 Speaker 1: access points, we have subscriptions on routers, we have subscriptions 337 00:19:55,640 --> 00:19:59,639 Speaker 1: on switches. So we're in the midst of the transition. 338 00:19:59,680 --> 00:20:01,160 Speaker 1: We have a long way to go, but I'd say 339 00:20:01,200 --> 00:20:04,000 Speaker 1: we're pretty deep into it as well. And Cisco's historically 340 00:20:04,040 --> 00:20:06,960 Speaker 1: been strong from a product perspective on this I T 341 00:20:07,119 --> 00:20:09,240 Speaker 1: security side of the business. And we've had so much 342 00:20:09,840 --> 00:20:12,480 Speaker 1: noise or news over the last a couple of years, 343 00:20:12,520 --> 00:20:16,800 Speaker 1: particularly about I T security. What's happening on your side 344 00:20:16,800 --> 00:20:19,480 Speaker 1: of the business is you try to address your customers concerns. Well, 345 00:20:19,520 --> 00:20:21,520 Speaker 1: if you think about that world that I just described 346 00:20:21,560 --> 00:20:25,280 Speaker 1: where they got traffic flowing everywhere. You don't have a 347 00:20:25,280 --> 00:20:29,879 Speaker 1: perimeter to defend anymore, so that the security has to 348 00:20:29,920 --> 00:20:34,960 Speaker 1: be built into the underlying infrastructure and so that that 349 00:20:35,000 --> 00:20:38,480 Speaker 1: actually plays to us into our strengths. So we're we 350 00:20:38,600 --> 00:20:41,239 Speaker 1: blocked seven trillion threats last year on behalf of our 351 00:20:41,280 --> 00:20:44,560 Speaker 1: customers and that's happening at the network layer of the email, 352 00:20:44,720 --> 00:20:47,560 Speaker 1: at the end point the cloud. And being able to 353 00:20:47,600 --> 00:20:52,640 Speaker 1: aggregate threats across all of those all of those areas 354 00:20:53,320 --> 00:20:57,040 Speaker 1: and then dynamically update your defense based on what you're 355 00:20:57,040 --> 00:20:58,720 Speaker 1: seeing is the only way to do it. And that's 356 00:20:58,720 --> 00:21:01,000 Speaker 1: what we've been building out. So we're our our security 357 00:21:01,000 --> 00:21:04,560 Speaker 1: business is incredibly healthy right now worldwide. Chuck Robins with 358 00:21:04,640 --> 00:21:08,600 Speaker 1: us on Cisco this morning, where he has has really 359 00:21:09,119 --> 00:21:11,840 Speaker 1: smoothly done a change in leadership given all the changes 360 00:21:11,840 --> 00:21:14,240 Speaker 1: in technology as well. Chuck, I want to go to 361 00:21:14,280 --> 00:21:16,920 Speaker 1: your chief strategy officer and new double E out of 362 00:21:16,960 --> 00:21:20,040 Speaker 1: Wharton all of the idea of what you need to 363 00:21:20,080 --> 00:21:22,720 Speaker 1: do with strategy forward. When you sit down with a 364 00:21:22,720 --> 00:21:26,800 Speaker 1: guy like a Newspore on strategy, how do you fold 365 00:21:26,880 --> 00:21:32,000 Speaker 1: the Amazons of the world, these incredibly supple entrepreneurial companies 366 00:21:32,040 --> 00:21:34,359 Speaker 1: in Are they your friend or they are your foe. 367 00:21:34,800 --> 00:21:37,440 Speaker 1: What do you do with the world of bezos? Well, 368 00:21:37,520 --> 00:21:39,200 Speaker 1: first of all, you just have to understand the news 369 00:21:39,320 --> 00:21:41,840 Speaker 1: is so incredibly smart that he can only talk to 370 00:21:41,840 --> 00:21:45,560 Speaker 1: me for about ten minutes without getting bored. But then 371 00:21:45,600 --> 00:21:48,320 Speaker 1: he goes to the Duke people and it's twelve minutes. 372 00:21:48,400 --> 00:21:53,479 Speaker 1: Oh that hurts. Uh. You know, listen, they're they're actually friends, 373 00:21:53,480 --> 00:21:58,680 Speaker 1: they're both customers, and they also realize that the world 374 00:21:58,840 --> 00:22:00,879 Speaker 1: is not going to be one hund sent public cloud, 375 00:22:00,920 --> 00:22:04,760 Speaker 1: and that the edge of our customers networks, the branches, 376 00:22:04,960 --> 00:22:09,280 Speaker 1: the the the IoT explosion that they see happening at 377 00:22:09,280 --> 00:22:13,000 Speaker 1: the edge is critically important for them to have connectivity too, 378 00:22:13,000 --> 00:22:15,679 Speaker 1: and for them to be able to if applications are 379 00:22:15,680 --> 00:22:19,879 Speaker 1: going to run at Amazon or Microsoft or there a 380 00:22:19,920 --> 00:22:22,560 Speaker 1: lot of the data that actually is being collected that 381 00:22:22,560 --> 00:22:24,680 Speaker 1: adds value to those applications is happening at the edge 382 00:22:24,680 --> 00:22:27,159 Speaker 1: of the network, is happening mining plants is and that 383 00:22:27,200 --> 00:22:33,240 Speaker 1: requires and networks. So we're we have built partnerships with 384 00:22:33,240 --> 00:22:37,000 Speaker 1: with Google, with IBM, with Microsoft, with Amazon, so now 385 00:22:37,040 --> 00:22:39,520 Speaker 1: they're definitely friends. So Chuck, let me ask you to 386 00:22:39,520 --> 00:22:41,679 Speaker 1: put your macro I t hat on a little bit. 387 00:22:41,720 --> 00:22:45,159 Speaker 1: You guys talk to everybody globally, and as we think 388 00:22:45,160 --> 00:22:47,080 Speaker 1: about some of these trade wars that kind of flare 389 00:22:47,160 --> 00:22:49,520 Speaker 1: up from now and again, and obviously with China right now, 390 00:22:50,000 --> 00:22:53,960 Speaker 1: are you seeing growing trade tensions impact global I t 391 00:22:54,160 --> 00:22:56,200 Speaker 1: demand And I don't know if it's a global look 392 00:22:56,280 --> 00:22:59,359 Speaker 1: or a regional look. Now if you think about what's 393 00:23:00,240 --> 00:23:02,959 Speaker 1: I'll answer your question specifically at the end of this. 394 00:23:03,080 --> 00:23:06,080 Speaker 1: But the reality is if you you look at where 395 00:23:06,119 --> 00:23:12,240 Speaker 1: technology is uh and particularly Cisco's technology, our customers, whether 396 00:23:12,240 --> 00:23:15,640 Speaker 1: they're governments or companies around the world, they don't view 397 00:23:15,720 --> 00:23:20,240 Speaker 1: technology as an operational and enabler anymore. They view technology 398 00:23:20,359 --> 00:23:25,320 Speaker 1: as defining their strategy of what's possible. And so what 399 00:23:25,359 --> 00:23:29,440 Speaker 1: we see is, you know, this technology is effectively the 400 00:23:29,560 --> 00:23:33,280 Speaker 1: digital nervous system for the economy today. So and we 401 00:23:33,359 --> 00:23:36,119 Speaker 1: see technology that's helping drive growth for our customers. We 402 00:23:36,119 --> 00:23:39,280 Speaker 1: see technology that's helping drive cost out and productivity for 403 00:23:39,320 --> 00:23:44,400 Speaker 1: our customers. So I think that up turns and downturns, 404 00:23:44,440 --> 00:23:47,199 Speaker 1: the impact on technology may be less today than it 405 00:23:47,280 --> 00:23:51,000 Speaker 1: was a decade ago. Now, the trade wars and those 406 00:23:51,080 --> 00:23:54,919 Speaker 1: kinds of things, I think that it's creating uncertainty. I 407 00:23:54,960 --> 00:23:58,040 Speaker 1: think right now there still remains a level of optimism 408 00:23:58,080 --> 00:24:00,679 Speaker 1: that we're going to get to something, and so I 409 00:24:00,720 --> 00:24:05,440 Speaker 1: think that most customers are operating. Everybody's making the decisions 410 00:24:05,440 --> 00:24:07,080 Speaker 1: they need to make in light of the impact on 411 00:24:07,119 --> 00:24:10,919 Speaker 1: their their businesses. But in general I think people are 412 00:24:11,200 --> 00:24:13,399 Speaker 1: companies are optimistic. We're gonna get to a good place. 413 00:24:13,760 --> 00:24:16,719 Speaker 1: Chuck Robins, thank you so much. He is with Cisco, 414 00:24:16,840 --> 00:24:34,880 Speaker 1: Chairman and Chief executive Officer, Cisco Systems. One of these 415 00:24:34,920 --> 00:24:38,119 Speaker 1: we try to do with Bloomberg surveillance is to have 416 00:24:38,280 --> 00:24:42,720 Speaker 1: on people of interesting and diverse conversation. We've got the 417 00:24:42,800 --> 00:24:47,800 Speaker 1: usual Brexit crew, the usual Washington crew, people on foreign exchange. 418 00:24:48,080 --> 00:24:51,200 Speaker 1: Check Robbins of Cisco on with us earlier and now 419 00:24:51,720 --> 00:24:54,720 Speaker 1: in London. It is a great pleasure to have someone 420 00:24:55,119 --> 00:25:00,000 Speaker 1: with a completely twisted labor view in the United Kingdom. 421 00:25:00,080 --> 00:25:03,840 Speaker 1: Helena Kennedy, Baroness Kennedy of the Shaw's, with a great 422 00:25:03,960 --> 00:25:09,439 Speaker 1: academic career, particularly at Mansfield College and Oxford, and also 423 00:25:09,760 --> 00:25:14,680 Speaker 1: a lively labor view in the House of Lords. Helena Kennedy, 424 00:25:14,720 --> 00:25:18,880 Speaker 1: it is wonderful to speak to you today. Can Jeremy Corbin, 425 00:25:19,640 --> 00:25:25,120 Speaker 1: Can can Jeremy Corbin oppose the Conservative Party or does 426 00:25:25,400 --> 00:25:30,200 Speaker 1: Labor have to find a new leader. Well, the truth 427 00:25:30,400 --> 00:25:32,760 Speaker 1: is that there is a real division in the Labor Party, 428 00:25:32,800 --> 00:25:35,520 Speaker 1: just as there is a real division in the Conservative Party. 429 00:25:35,960 --> 00:25:39,600 Speaker 1: And it's because a very large number of people inside 430 00:25:39,600 --> 00:25:43,560 Speaker 1: the Labor Party would like to see a second vote 431 00:25:43,600 --> 00:25:47,160 Speaker 1: on on the um the whole issue of leaving Europe, 432 00:25:47,520 --> 00:25:51,200 Speaker 1: and and they want that and they really are pressing 433 00:25:51,240 --> 00:25:53,440 Speaker 1: for it, and particularly the young This is the great 434 00:25:53,480 --> 00:25:56,720 Speaker 1: contradiction is that Jeremy Corbyn is as the leader of 435 00:25:56,720 --> 00:26:00,560 Speaker 1: the Labor Party because the young um really came out 436 00:26:00,640 --> 00:26:02,800 Speaker 1: and joined the Laser Party in order to make him 437 00:26:02,800 --> 00:26:05,080 Speaker 1: their leader. But they also want to remain in Europe. 438 00:26:05,119 --> 00:26:07,879 Speaker 1: So there's a great deal of disappointment around at the moment. 439 00:26:08,200 --> 00:26:10,399 Speaker 1: And then there are also those people who were would 440 00:26:10,400 --> 00:26:14,000 Speaker 1: perhaps be described as the Blair Right group, the people 441 00:26:14,000 --> 00:26:17,560 Speaker 1: who were very much in the camp of of Tony 442 00:26:17,640 --> 00:26:21,119 Speaker 1: Blair when he was Leader two are great pro Europeans. 443 00:26:21,440 --> 00:26:24,119 Speaker 1: So there's there's a very large number of people who 444 00:26:24,200 --> 00:26:27,480 Speaker 1: are very much in the Labor camp who say, um, 445 00:26:27,520 --> 00:26:29,600 Speaker 1: they want they want a second vote. They want the 446 00:26:29,960 --> 00:26:32,360 Speaker 1: general public to be able to say now that they 447 00:26:32,440 --> 00:26:35,040 Speaker 1: know as much as they know, would they would they 448 00:26:35,040 --> 00:26:38,200 Speaker 1: would they still want to leave Europe and and that's 449 00:26:38,240 --> 00:26:39,879 Speaker 1: there's a risk and that, let me tell you. But 450 00:26:40,280 --> 00:26:43,600 Speaker 1: that is and and it's quite clear that um that 451 00:26:43,760 --> 00:26:47,639 Speaker 1: Jeremy Corbyn has has you know, prevaricated on this. He 452 00:26:47,760 --> 00:26:50,840 Speaker 1: has played both sides, um, and he's wanted to on 453 00:26:50,880 --> 00:26:55,040 Speaker 1: the one hand, keep the sort of wider voting public 454 00:26:55,119 --> 00:27:00,359 Speaker 1: who maybe normally his you know, the Labors electorate. Many 455 00:27:00,400 --> 00:27:03,320 Speaker 1: of them are very disillusioned and they voted to leave Europe, 456 00:27:03,480 --> 00:27:05,480 Speaker 1: and so he doesn't want to lose them. But at 457 00:27:05,480 --> 00:27:07,359 Speaker 1: the same time, he wants to keep the park on side. 458 00:27:07,400 --> 00:27:10,960 Speaker 1: So he's been kind of you know, um, moving between 459 00:27:11,000 --> 00:27:14,040 Speaker 1: these two positions, and he's been very unclear and so 460 00:27:14,080 --> 00:27:16,919 Speaker 1: people feel very disappointed in the way that he's handled 461 00:27:16,920 --> 00:27:19,600 Speaker 1: all of this. Do you do you change taking place? 462 00:27:19,760 --> 00:27:22,199 Speaker 1: So that's about my next question is do you expect 463 00:27:22,280 --> 00:27:26,159 Speaker 1: change after the historic moment last night in Baroness. We 464 00:27:26,240 --> 00:27:28,960 Speaker 1: go back to four and McDonald, the advent of the 465 00:27:29,040 --> 00:27:31,760 Speaker 1: Labor Party, Frankie, you can go back to Gladstone and 466 00:27:31,760 --> 00:27:36,760 Speaker 1: a liberality there in nineteenth century conservative England. The left 467 00:27:37,040 --> 00:27:40,440 Speaker 1: has to give a response to what we're observing within 468 00:27:40,480 --> 00:27:45,520 Speaker 1: the majority Conservative party, whether America or Britain. The problem, 469 00:27:45,680 --> 00:27:48,360 Speaker 1: the problem for for for Jeremy Corbyn is that he's 470 00:27:48,359 --> 00:27:52,280 Speaker 1: trying to ride two horses the many of the people 471 00:27:52,480 --> 00:27:54,920 Speaker 1: and by no means all, but many of the people 472 00:27:54,960 --> 00:27:58,760 Speaker 1: who voted to leave, or people who are hurting because 473 00:27:58,760 --> 00:28:02,680 Speaker 1: of austerity policy, because they are really finding that they're 474 00:28:02,840 --> 00:28:05,960 Speaker 1: having difficulty making ends meet, that they're you know, their 475 00:28:06,000 --> 00:28:09,280 Speaker 1: pay hasn't changed for sixteen years, um, and yet everything 476 00:28:09,280 --> 00:28:12,480 Speaker 1: else is becoming more expensive. Their children can't get housing. 477 00:28:12,520 --> 00:28:15,280 Speaker 1: You know that young young people have great problems to 478 00:28:15,280 --> 00:28:18,520 Speaker 1: being able to afford housing. Um, We've we've got serious 479 00:28:18,520 --> 00:28:22,119 Speaker 1: social problems, a very little investment in schools and so 480 00:28:22,160 --> 00:28:24,240 Speaker 1: on and so on, and so I mean with the 481 00:28:24,480 --> 00:28:26,720 Speaker 1: number of homeless on London streets at the moment would 482 00:28:26,720 --> 00:28:29,920 Speaker 1: really shock people. Um. So there's a question about that. 483 00:28:30,440 --> 00:28:32,520 Speaker 1: And so he's trying to on the one hand, speak 484 00:28:32,600 --> 00:28:35,040 Speaker 1: to to to those and to talk about the policies 485 00:28:35,040 --> 00:28:38,280 Speaker 1: he would bring and yet at the same time most 486 00:28:38,280 --> 00:28:41,000 Speaker 1: people are having to deal with the Brexfit issue. So 487 00:28:41,040 --> 00:28:43,600 Speaker 1: what I think he's going to have this vote today, 488 00:28:43,680 --> 00:28:45,960 Speaker 1: which is to try to say that there's you know, 489 00:28:46,000 --> 00:28:49,320 Speaker 1: there's no confidence in the government. He's not going to succeed. 490 00:28:49,400 --> 00:28:52,040 Speaker 1: There will not be a general election. So many people 491 00:28:52,080 --> 00:28:54,959 Speaker 1: do feel that in most circumstances, if somebody has had 492 00:28:55,000 --> 00:28:59,720 Speaker 1: the devastating, devastating vote against them, as Theresa May pad, 493 00:29:00,160 --> 00:29:03,320 Speaker 1: that she would normally be resigning herself. But she's not 494 00:29:03,360 --> 00:29:05,920 Speaker 1: going to do that. She's a very determined character and 495 00:29:06,240 --> 00:29:08,520 Speaker 1: she's mindful of her own legacy. She doesn't want to 496 00:29:08,560 --> 00:29:12,200 Speaker 1: really go down as being the person who completely failed 497 00:29:12,200 --> 00:29:14,360 Speaker 1: to deliver on on the on the breaks that vote. 498 00:29:14,760 --> 00:29:17,560 Speaker 1: So I I mean, the real fear for many of 499 00:29:17,680 --> 00:29:21,200 Speaker 1: us is that this is drifting towards and no deal 500 00:29:21,400 --> 00:29:24,680 Speaker 1: situation where we leave Europe with no trade trading deal 501 00:29:24,760 --> 00:29:27,840 Speaker 1: with the with our nearest neighbors, and we're out into 502 00:29:27,840 --> 00:29:32,480 Speaker 1: the cold winds of of you know, global trading. And 503 00:29:32,520 --> 00:29:35,120 Speaker 1: while that might be exciting to some people, that's going 504 00:29:35,160 --> 00:29:38,960 Speaker 1: to be a great cost into ordinary ordinary vote for 505 00:29:39,040 --> 00:29:42,560 Speaker 1: quite a time to come. One one final question Baroness, 506 00:29:42,560 --> 00:29:44,600 Speaker 1: and this of course goes to the accident that we're 507 00:29:44,600 --> 00:29:48,240 Speaker 1: hearing worldwide. I believe that to be of a Scottish variation, 508 00:29:49,400 --> 00:29:53,800 Speaker 1: whether the s MP in the independence of Scotland. That 509 00:29:53,800 --> 00:29:57,480 Speaker 1: will mean separation of Scotland. I just mean the independent 510 00:29:57,920 --> 00:30:02,480 Speaker 1: voice of Scotland. Where will that be given this paralysis. 511 00:30:03,400 --> 00:30:07,400 Speaker 1: It's so interesting because even Conservatives in Scotland, and of 512 00:30:07,440 --> 00:30:09,400 Speaker 1: course there's been an increase in the number of members 513 00:30:09,400 --> 00:30:12,680 Speaker 1: of Parliament who are a Conservative in Scotland quite unusually 514 00:30:12,680 --> 00:30:15,080 Speaker 1: for quite for the last few decades, there was sometimes 515 00:30:15,080 --> 00:30:19,560 Speaker 1: where no Conservatives representing Scotland, but are currently there twelve 516 00:30:20,040 --> 00:30:23,479 Speaker 1: and and even there in Scotland the strong senses they 517 00:30:23,480 --> 00:30:26,160 Speaker 1: want to remain part of Europe and UM and so 518 00:30:26,200 --> 00:30:29,280 Speaker 1: it's very much the votes is very high for for 519 00:30:29,360 --> 00:30:31,880 Speaker 1: remaining and so it's going to cause a lot of controversy. 520 00:30:32,040 --> 00:30:34,600 Speaker 1: So there are issues around are we putting the Union 521 00:30:34,640 --> 00:30:37,479 Speaker 1: at risk? UM, We're looking at what's happening in Northern Ireland. 522 00:30:37,480 --> 00:30:39,760 Speaker 1: A big part of the of the failure to get 523 00:30:39,760 --> 00:30:42,800 Speaker 1: her deal through for for Theresa May was that she 524 00:30:42,840 --> 00:30:47,880 Speaker 1: couldn't satisfy the different interests around UM what would happen 525 00:30:47,880 --> 00:30:51,400 Speaker 1: in Northern Ireland, because if reintroduced a border there between 526 00:30:51,400 --> 00:30:54,200 Speaker 1: the North and the South, there's a real risk that 527 00:30:54,240 --> 00:30:58,000 Speaker 1: the peace process would suddenly start freeing at the edges 528 00:30:58,080 --> 00:31:00,720 Speaker 1: and so being bringing back we try book is something 529 00:31:00,720 --> 00:31:03,080 Speaker 1: that people fear, so so she's had a lot on 530 00:31:03,120 --> 00:31:05,920 Speaker 1: our plate in trying to deliver this thing. And and 531 00:31:05,960 --> 00:31:09,040 Speaker 1: of course the DUP who keep her in power, that's 532 00:31:09,080 --> 00:31:13,200 Speaker 1: the Party of the Union right um in Northern Ireland. 533 00:31:13,480 --> 00:31:16,800 Speaker 1: They they have got her by the you know, by 534 00:31:17,000 --> 00:31:19,680 Speaker 1: by the tale because they are saying, you know, you 535 00:31:19,720 --> 00:31:22,520 Speaker 1: know we we we insist on remaining part of the 536 00:31:22,800 --> 00:31:26,280 Speaker 1: United Kingdom and we don't like the border arrangements that 537 00:31:26,320 --> 00:31:29,040 Speaker 1: you're putting in place. Baroness, were out of time, much 538 00:31:29,160 --> 00:31:32,520 Speaker 1: longer conversation in order the next time, how any Candy, 539 00:31:32,600 --> 00:31:35,160 Speaker 1: Baroness of the Shaws, thank you so much on this 540 00:31:35,320 --> 00:31:39,920 Speaker 1: historic day for her Scotland and for her United Kingdom. 541 00:31:48,160 --> 00:31:52,360 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 542 00:31:52,440 --> 00:31:57,760 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 543 00:31:57,800 --> 00:32:02,040 Speaker 1: platform you prefer. I'm on Winter at Tom Keane before 544 00:32:02,040 --> 00:32:06,280 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg Radio.