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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Find the Bloomberg Markets

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Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. We are still a wedding

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Speaker 1: FED Chairman j Pal, Treasury Secretary step In Manuchin, the

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Speaker 1: House Financial Services Committee talking about the need for more stimulus.

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Speaker 1: To get a preview, we welcome Nathan Dean, senior government

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Speaker 1: analysts for Bloomberg Intelligence. Nathan, thanks so much for joining

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Speaker 1: us here. I mean, what can Mr Manuchin and Mr Powe,

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Speaker 1: What do you think the committee is really going to

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Speaker 1: focus on with these two uh folks. Well, there's really

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Speaker 1: three things I think that the we're going to see

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Speaker 1: come out from the hearing, you know. I think you're

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Speaker 1: going to see the Democrats really stressed the need for

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Speaker 1: municipality relief uh and individual relief. UH. And then on

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Speaker 1: the Republican side, I think you're going to see questions

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Speaker 1: about utilize unsere unspent money from previous Care Act. UH.

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Speaker 1: And what what investors should really know is that you're

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Speaker 1: probably not going to get any answer or any clarity

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Speaker 1: in terms of what you're going to see going forward.

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Speaker 1: I think the most important thing to look in today's

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Speaker 1: hearing is to see if you get a signal from

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Speaker 1: Chairman Powell on whether or not the Fed not Congress

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Speaker 1: is going to do anything to support the economy in

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Speaker 1: the interim, because our take is just that stimulus is

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Speaker 1: pretty much dead for and that's going to have to

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Speaker 1: be something that we're going to figure out. I mean,

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Speaker 1: there is the suggestion that with everything the Fed did

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Speaker 1: and with the original Cares Act, it wasn't maybe targeted

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Speaker 1: in such a way that it might be extra efficient. Right,

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Speaker 1: So there's there's plenty money out there, but it doesn't

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Speaker 1: mean that people are not suffering. Still, is there going

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Speaker 1: to be any mention of that? That's exactly right. So

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Speaker 1: if you look at the FETs two big programs, you

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Speaker 1: get the Municipal Liquidity Facility for municipalities. I think German

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Speaker 1: power can actually do some defense there. I think he

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Speaker 1: can say that you know, he's shoring up uh some

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Speaker 1: of the inmunicipality market where he's going to struggle I

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Speaker 1: think is going to be on the main street lending facility.

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Speaker 1: So where what do small businesses get their their funds?

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Speaker 1: You know, PPP has gone, and so small businesses are

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Speaker 1: continuing to struggle, and so I think you're gonna get

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Speaker 1: some questions on it. We'll see what what if he

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Speaker 1: actually comes out and says anything about how that's going

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Speaker 1: to work, my guess is probably not. He's just going

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Speaker 1: to throw it back onto Congress and say, if you

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Speaker 1: want to support small businesses, we need to have another

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Speaker 1: stimulus deal. And then you know, just unfortunately, because of

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Speaker 1: the election and the SCO to fight, you know, that

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Speaker 1: deal is probably not going to happen this year since Nathan,

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Speaker 1: you know, I would suggest the vast majority of experts

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Speaker 1: we've spoken to over the last three months pretty much

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Speaker 1: all said we will get some fiscal stimulus before the election.

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Speaker 1: What went wrong here? So I was one of those.

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Speaker 1: I actually had uh you know, my my my deal

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Speaker 1: was three billion for municipalities before the election, and unfortunately

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Speaker 1: what happened is it just took too much time to

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Speaker 1: negotiate and we got into a too close to the election.

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Speaker 1: If you're on the Democratic side now and not even

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Speaker 1: in taking into account what's happening with the Supreme Court.

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Speaker 1: If you're on the Democratic side, the last thing you

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Speaker 1: want to do is interject a boost into the economy

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Speaker 1: one month before the election. If you're on the Republican side, well,

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Speaker 1: the last thing you want to do is support a

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Speaker 1: three chillion dollar bill or one point five trillion dollar

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Speaker 1: bill when you have things like job numbers increasing and

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Speaker 1: I can anecdotal stories about the economy coming back, and

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Speaker 1: so we just got to a point where they ran

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Speaker 1: out of time. Both sides are going to go to

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Speaker 1: the election. They think it's both politically uh advantage advantageous

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Speaker 1: for them to uh not negotiate, and so we're gonna

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Speaker 1: have to see what happens in one after the election. Yeah,

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Speaker 1: I mean by then, will there have been irregarsable damaged

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Speaker 1: on You know, there are still millions and millions of

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Speaker 1: people in the United States unemployed, and this hopscott kind

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Speaker 1: of virus could strike anywhere soon. Again. Yeah, that's exactly right.

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Speaker 1: I think that, you know, it's a lot of people

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Speaker 1: want this stimulus to happen. Uh, you know, we'll see

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Speaker 1: what happens in the lame Duck. There's always this possibility,

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Speaker 1: and I I'm making it out of consensus call right now,

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Speaker 1: where I think there's a small chance that you could

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Speaker 1: see a very skinny bill in the lame duck period.

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Speaker 1: I'm thinking airlines because there's plenty of bipartisans support for

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Speaker 1: giving airlines additional relief. So there's still this desire and

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Speaker 1: there's still this acknowledgement that they need to get something done.

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Speaker 1: But we need to get the election out of the way,

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Speaker 1: we need to get the Supreme Court fight out of

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Speaker 1: the way, we need to find out who our next

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Speaker 1: president is going to be. And when we get all

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Speaker 1: of that, we'll be able to come together in one

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Speaker 1: and hopefully hammer out a Phase four stimulus deal. Nathan,

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Speaker 1: you spent obviously a lot of time looking at this

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Speaker 1: whole DC functionality here or dysfunctionality. Talk to us about

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Speaker 1: what a lame duck period is and what types of

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Speaker 1: legislation can or cannot get done during that time between

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Speaker 1: November and January. So the lame duck period is obviously

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Speaker 1: after the election, but before the new Congress comes in.

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Speaker 1: And so if you've lost your seat, you know you're

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Speaker 1: only gonna be around for a few more weeks and

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Speaker 1: that doesn't they give you an incentive to maybe vote

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Speaker 1: vote for something that you wouldn't otherwise voted for. Now,

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Speaker 1: there's really two types of lame ducks. There's one where

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Speaker 1: they just try and do a ton of stuff because

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Speaker 1: they recognize it's not going to happen when a new

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Speaker 1: president or a new Congress takes over. And then you

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Speaker 1: have lame ducks where they just say, you know what,

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Speaker 1: we're just tired. We're just gonna go home. Odds favor

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Speaker 1: that in this lame duck they're just gonna say we're tired,

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Speaker 1: we're gonna go home, and we'll figure it out in

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Speaker 1: the next election. But because like you said, Bonnie, there

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Speaker 1: is so much, so many people that are looking for

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Speaker 1: help right now, you know, there is this possibility that

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Speaker 1: they could come together and say, right we're going to

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Speaker 1: figure out something to do, just a band aid, patchwork deal,

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Speaker 1: put it out there. You know, government shuts down in

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Speaker 1: eight days, and so they have to actually finally the

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Speaker 1: stopgap funding bill. Maybe that goes into the lame duck period,

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Speaker 1: and so we're not done yet in terms of things

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Speaker 1: that Congress have to pass. Uh. So you know, again

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Speaker 1: the odds favor that nothing happens. But if I'm an

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Speaker 1: investor in specific type of industries, there's certainly I'm going

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Speaker 1: to keep my eyes on it because there is still

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Speaker 1: a chance. That's you know, a good point, Nathan. Industry

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Speaker 1: is very good at getting this president's ear and this

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Speaker 1: administration's here, and certainly restaurants have been trying to do

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Speaker 1: that for several months. And you mentioned the airlines. It's

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Speaker 1: almost surprising that some of these industries haven't been able

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Speaker 1: to eke something, you know, out of the president, whether

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Speaker 1: it be by executive order or some other way. Is

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Speaker 1: there a chance of something like that happens in the

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Speaker 1: next few weeks, you know, In terms of executive order, yes, um,

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Speaker 1: executive orders are limited, though we saw that with President

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Speaker 1: Trump's executive order on providing relief. You know, certain states

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Speaker 1: embraced it, other states didn't, and so consumers didn't get

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Speaker 1: the same number of stimulus checks at the gotten before.

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Speaker 1: In terms of industry, though, you know, restaurants have a

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Speaker 1: great case of why they're you know, while they're being damaged, airlines,

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Speaker 1: movie theaters, and they all have asks and these asks

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Speaker 1: are going to politicians that are sympathetic to them. What happens, though,

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Speaker 1: is that they get interjected into this three billion dollar debate,

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Speaker 1: this one point five trillion dollar debate normally for the

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Speaker 1: last two to three years. How these bills get passed,

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Speaker 1: they get attached to either funding bills or must pass

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Speaker 1: pieces of legislation, and that's where the lobbyists and the

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Speaker 1: policymakers do their their dirty work. If you call it that,

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Speaker 1: that really hasn't happened in this case. So I think

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Speaker 1: if you get into the lame duck period and something

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Speaker 1: does pass, you know, then you know you have this

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Speaker 1: shot of being able to interject your your industry specific legislation.

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Speaker 1: If it doesn't, you know, let's just say, no matter

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Speaker 1: who wins the election, we're gonna have an extremely busy

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Speaker 1: year next year because remember we also have the debt

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Speaker 1: ceiling coming back in the first half of next year.

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Speaker 1: We also have a lot more stimulus that we need

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Speaker 1: to do, and whoever president wins, they're also going to

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Speaker 1: try and interject their hundred day agenda, So lots of

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Speaker 1: stuff is going to happen in the first half of

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Speaker 1: next year. Well, Nathan, you know, you mentioned the municipality

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Speaker 1: states and municipalities we had, you know, Governor Cuomo from

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Speaker 1: New York, Governor in Newsom from California, you know, talking

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Speaker 1: about huge budget holes in their fiscal year budgets that

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Speaker 1: they need to fill in. They you know, made the

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Speaker 1: argument that they need help from the federal government to

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Speaker 1: fill them. It looks like states and municipalities are going

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Speaker 1: to come out come up empty here. How much pain

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Speaker 1: is that going to be? It's going to be bad.

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Speaker 1: You know. So the Center of Budget and Public Policy

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Speaker 1: Priorities put out an analysis that we we like, um

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Speaker 1: that said that just taking out the local and county municipalities,

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Speaker 1: just states plus the District of Columbia from two, you're

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Speaker 1: looking at probably somewhere between two hundred to two or

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Speaker 1: fifty billion dollars in lost tax revenue. You know, that's

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Speaker 1: just that's just lost tax revenue. That's not even taking

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Speaker 1: into account increased costs or anything like that. You know,

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Speaker 1: the Democrats had proposed giving about eight hundred dollars in

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Speaker 1: municipality relief across everything, so local and states and so forth.

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Speaker 1: Democrat Republicans counterback with nothing other than unspent money from

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Speaker 1: the Cares Acts, probably about a hundred billion dollars. So,

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Speaker 1: you know, we always thought that three five billion dollar

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Speaker 1: number would be reasonable from both sides. It wouldn't solve anything.

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Speaker 1: Municipalities are still going to be hurting for the next

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Speaker 1: few years. You know, if you take into every single county,

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Speaker 1: and I remember even the city of Tuscaloosa, Alabama, once

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Speaker 1: said that if the Alabama football team didn't play this year,

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Speaker 1: they're gonna lose two billion dollars in tax revenue. How

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Speaker 1: do you make that up? And so municipalities are going

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Speaker 1: to be in some pain, and I think they'll continue

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Speaker 1: to be in pain no matter what happens with Congress.

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Speaker 1: Can't they just borrow and worry about it some other time.

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Speaker 1: You know, that's a great you know, it's one thing

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Speaker 1: they can do, and it's one thing the Republicans have said,

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Speaker 1: you know, Uh, Chairman McHenry will probably make a statement

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Speaker 1: in the committee today, I'm sorry, Ranking Member mckenry from

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Speaker 1: North Carolina, UM. He will probably make a statement in

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Speaker 1: which he says that, you know, listening to the governors

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Speaker 1: and so forth talking about all the money they need

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Speaker 1: is a waste of time. You know, rather than actually

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Speaker 1: trying to get Congress to provide the money, they should

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Speaker 1: go to the fed. They should go, they should borrow money,

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Speaker 1: they should take advantage of low rates, and they should

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Speaker 1: try and make sure that the market, you know, brings

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Speaker 1: their economy backups so that they can do it use

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Speaker 1: this time to actually cut some of the fat from

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Speaker 1: your from your budgets. So the Republican argument is that,

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Speaker 1: you know, the markets should be able to resolve this.

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Speaker 1: We haven't seen thousands of policemen or firefighters being laid

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Speaker 1: off yet. I mean, certainly that could happen, but you know,

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Speaker 1: for the Republican argument, the pain hasn't comes to the

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Speaker 1: municipalities yet. It's still just a theoretical idea. Nathan, what's

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Speaker 1: the expectation in Washington and people you talk to about

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Speaker 1: a scenario where former Vice President Biden does win the election,

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Speaker 1: the Democrats do take control of the Senate. What's the

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Speaker 1: expectation then, So it really it really it has changed

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Speaker 1: with the Scotus fight that we're having right now. Before

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Speaker 1: this past weekend, you know, it was going to be

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Speaker 1: there was gonna be pressure to do away with the

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Speaker 1: filibuster um. But I think that, you know, unless the

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Speaker 1: Democrats really takes let's say fifty three or fifty four seats,

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Speaker 1: you weren't going to be able to do it. You

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Speaker 1: still have holdouts like Senator Cinema from Arizona, Senator Mansion

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Speaker 1: from West Virginia. They were against filibuster reform. Now this

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Speaker 1: has changed, and so you know, it really depends on

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Speaker 1: the makeup of the Senate whether you're going to get

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Speaker 1: a Biden presidency that would move forward with a lot

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Speaker 1: of these grand changes, or whether you're gonna get a

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Speaker 1: Biden presidency that's going to try and negotiate with Republicans.

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Speaker 1: If you get a Democratic Senate that's probably north the

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Speaker 1: fifty three seats, then you're gonna see, my opinion, a

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Speaker 1: more progressive Biden presidency. If it's somewhere closer to let's

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Speaker 1: say fifty fifty, or even if the Democrats don't take

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Speaker 1: the Senate, then you're gonna get much more moderate Biden presidency.

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Speaker 1: When will we expect to see changes, because you know,

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Speaker 1: there won't be an inauguration for a few months, and

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Speaker 1: at that point, depending on the makeup of Congress, there

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Speaker 1: maybe still some barriers to anything that Biden wants to do.

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Speaker 1: What would be in his first one days when it

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Speaker 1: comes to the economy, So you know, Congress or Washington

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Speaker 1: doesn't move fast, and so most politicians are sorry, most

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Speaker 1: presidents try to get everything done within the first hundred

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Speaker 1: days of their term because that's the momentum. Now, like

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Speaker 1: I said before, there is a death ceiling coming up,

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Speaker 1: we also have to get a stimulus bill. It. Let's say,

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Speaker 1: if Biden wins, he's gonna want to do a stimulus bill.

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Speaker 1: So that's going to take a lot of momentum away

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Speaker 1: from things like, uh, potentially judicial reform, police reform. You know,

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Speaker 1: I'm a banks analyst. You know, banks are probably not

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Speaker 1: high on his priority. But uh so he's going to

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Speaker 1: have to try and move fast. But the on the

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Speaker 1: flip side, if he's dealing with the Senate that still

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Speaker 1: has a filibuster, well, you know, the Senate Republicans can

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Speaker 1: effectively block a lot of what he can accomplish. So

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Speaker 1: that's the question is is is he going to try

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Speaker 1: and move fast or is he going to try and

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Speaker 1: move slow? Uh? And I really think it depends on

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Speaker 1: the makeup the Senate. For things that rely on the

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Speaker 1: Federal reserve for example, you know, Biden is not going

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Speaker 1: to have much influence on the federal reserve. Chairman Powell

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Speaker 1: is in his term until two. Vice Chairman Randall Quarrels

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Speaker 1: for Banking and Supervision is in his term until late

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Speaker 1: So the financial regulatory team in place outside of the

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Speaker 1: Treasury Secretary is going to be largely a leftover from

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Speaker 1: the Trump administration. So it'll be really interesting to see

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Speaker 1: if there's a difference of opinion between what you get

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Speaker 1: from the White House and what you get from the Fed.

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Speaker 1: My guess is that they're probably going to be more

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Speaker 1: on the same page. Nathan, what's the feeling within Washington

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Speaker 1: about the House of Representatives? Are the Democrats in a

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Speaker 1: meaningful risk of losing control of that House? No, So

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Speaker 1: the Republicans need to net twenty seats to reach to eighteen,

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Speaker 1: and the last polling numbers that you can find on

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Speaker 1: elect go suggests that the Publicans would have to have

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Speaker 1: a huge sweep to reach that number. Most of the

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Speaker 1: races right now are are still on the Democratic side,

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Speaker 1: So I don't think there's any expectation that the House

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Speaker 1: can flip. Um. You know what I tell clients all

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Speaker 1: the time is when you look at the House, just

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Speaker 1: note this is where ideas get get generated. You know,

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Speaker 1: the ideas that eventually could become laws usually get generated

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Speaker 1: in the House of Representatives, and in this case, you know,

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Speaker 1: there are certain bills that you know, House Financial Services

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Speaker 1: Chairwoman Maxine Waters today will be discussing at the hearing

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Speaker 1: with Secretary uh Minution and Sherman Powell on relief for manufacturers, restaurants, airlines.

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Speaker 1: So these are good ideas that watched them because they

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Speaker 1: could grow into something larger. Speaking of a let go,

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Speaker 1: which is, by the way, a fantastic way of checking

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Speaker 1: everything election relations on your terminal, E E C go,

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Speaker 1: Nathan President from saying he's he's going to announce the

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Speaker 1: U Supreme Court nominee Saturday, and Romney saying he would

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Speaker 1: vote for Supreme gorgeous US this year. Is it a

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Speaker 1: done deal at this point? Well, nothing's have done deal

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Speaker 1: in Washington until President Trump actually, you know, until the

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Speaker 1: vote actually occurs. Nothing's done deal. But uh, you know,

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Speaker 1: the Democrats don't have much in the way of blocking this.

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Speaker 1: You know, we've seen House Democrats float ideas like maybe

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Speaker 1: we could have another impeachment that probably won't work. Uh,

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Speaker 1: you know, so if they want to, if the Republicans

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Speaker 1: want to hold a vote this year, they probably can. Uh,

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Speaker 1: they probably can confirm. This is uh not the quickest

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Speaker 1: that a Supreme Court justice will have ever been confirmed.

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Speaker 1: But you know, what the Democrats do you have is

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Speaker 1: this threat of what happens if we win the presidency,

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Speaker 1: we win the Senate. You know, do we stack the court?

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Speaker 1: Do we do away with the filibuster? You know, that's

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Speaker 1: the nuclear option, if you will. Uh. And so you know,

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Speaker 1: the responses that you've seen from Republicans publicly right now

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Speaker 1: is that you know, they're not sure the Democrats would

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Speaker 1: ever move forward with that threat. So you know, it's

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Speaker 1: one of those things where there's not think they can

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Speaker 1: really do to stop them, but they can vow to

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Speaker 1: make the situation much more I don't want to say worse,

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Speaker 1: but much different they win, alright, Nathan Dean, wonderful stuff,

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Speaker 1: Thank you so much. That is Nathan Dean's senior government analysts.

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Speaker 1: Our next guest, an investment banker and author who has

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Speaker 1: written and focuses generally on the banking, mortgage, finance, fintech sectors.

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Speaker 1: Chris Whalen joins us. We're thrilled. He's chairman of Whale

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Speaker 1: and Global Advisors, author of lots of books. Included inflated

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Speaker 1: how money and debt built the American dream and forward

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Speaker 1: men from inspiration to enterprise. But today, wouldn't mind starting

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Speaker 1: off Chris on the idea that we're getting a little

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Speaker 1: bit more of a glimpse into how money flows, specifically

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Speaker 1: shady money flows around the world. And it's absolutely with

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Speaker 1: the help of financial institutions, all the ones we know

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Speaker 1: and some we don't, but ninety financial institutions appearing in

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Speaker 1: leaked documents this week, including Deute and JP Morgan. Your thought, well,

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Speaker 1: wouldn't a dollar is to reserve currency? Vanni? It's hard

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Speaker 1: to keep the bad people out. Um. The US government

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Speaker 1: uses access to banking services, and the US dollar is

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Speaker 1: a way of punishing bad actors and states and so

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Speaker 1: banks have a very complex matrix they have to wade

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Speaker 1: through to do business with foreigners, any foreigners, and a

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Speaker 1: lot of them have just decided not to do it.

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Speaker 1: Many US institutions will not do business with non US residents,

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Speaker 1: So I think it's not surprising. It's been a problem

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Speaker 1: for a long time. And many of those banks that

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Speaker 1: are listed there are you know, providing services they think

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Speaker 1: are okay. But in order to do diligence on these

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Speaker 1: people and keep up with the lists of you know,

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Speaker 1: banned persons, for example, requires a lot of focus and

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Speaker 1: a lot of effort by banks, and they don't. They

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Speaker 1: don't do a very good job, do they it. So

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Speaker 1: you know, it's not surprising, is it. We've been reading

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Speaker 1: about this for years. Do you want more head wind

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Speaker 1: for some of the big banks to do with these days?

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Speaker 1: I'm wondering, given where interest rates are, how low they are,

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Speaker 1: and how the fetch your pal suggests that they will

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Speaker 1: stay lower for much longer than maybe people initially anticipated.

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Speaker 1: Is there a bowl case for buying these big money

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Speaker 1: center banks. Well, we're still awaiting visibility, Paul on credit um.

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Speaker 1: You know, the banks have certainly put a lot of

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Speaker 1: money aside for future losses, and I expect that's going

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Speaker 1: to continue all year. I think at the end of

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Speaker 1: the day, we'll probably put aside more reserves this year

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Speaker 1: than we did in two two tho nine, and the

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Speaker 1: fourth quarter could be quite a mess in terms of

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Speaker 1: taking assets to the curb and cleaning house. So, but

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Speaker 1: to your question, is it time to buy them now

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Speaker 1: that they're down, Well, they're not really down very much.

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Speaker 1: JP is still one in a quarter times book. Um,

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Speaker 1: I just published a note on cities study you know

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Speaker 1: well below book, and that's just a reflection of the

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Speaker 1: returns they generate. Um, the higher risk shops like City

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Speaker 1: Capital one Goldman habitually trade below book because a lack

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Speaker 1: of visibility on forward events, right, especially idiosyncratic events from

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Speaker 1: investment banking engagements, right, which no one has visibility into.

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Speaker 1: So you know, for me, yeah, there's some banks out

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Speaker 1: there that are great value. I've been buying mostly the

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Speaker 1: prefers when they've been selling off, because you know, buying

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Speaker 1: an eight or nine percent coupon at par, which we've

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Speaker 1: had an opportunity to do several times in the past year,

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Speaker 1: is kind of nice, low beta. You know, it makes

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Speaker 1: me happy. Um, I got out of most of the

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Speaker 1: common I had some US Bank, but I just traded

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Speaker 1: out of it because I think I can buy it

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Speaker 1: again later on once we have a little more visibility

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Speaker 1: on where the banks are going. Well, speaking of City, Chris,

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Speaker 1: you've been negative on City for some time since, had

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Speaker 1: a very toubled past, and in that note that you

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Speaker 1: just reference, you talk about the new leader, Jane Fraser,

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Speaker 1: who's going to be replacing like a Corbat in February

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Speaker 1: of next year. And you say, you know, Corbat does

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Speaker 1: leave behind the legacy of stability and rising equity values,

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Speaker 1: but a little change in terms of focus or a

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Speaker 1: new business direction for the bank. Will Jane Fraser be

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Speaker 1: able to find one. I don't know. I think short

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Speaker 1: term no. And and the recent Bonnie is that they

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Speaker 1: traded away from their asset management business, selling that the

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Speaker 1: mortgage Stanley and probably made sense at the time, but

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Speaker 1: you know, my core Bat had to make up for

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Speaker 1: a shambles that had gone on really from when John

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Speaker 1: Reid left the bank in through the period of Sandy

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Speaker 1: Wile and Bob Reubin and and bickram pandit and the

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Speaker 1: bank was really in bad shape. So it's right now

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Speaker 1: a two legged stool. You have capital markets, and you

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Speaker 1: have essentially a subprime consumer business in the US, and

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Speaker 1: then you have these little bits and pieces around the world.

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Speaker 1: But you don't have a firm foundation for this bank

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Speaker 1: in terms of core deposits or just the ability to

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Speaker 1: to make money in the same way that a JP

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Speaker 1: Morgan does. Right, they have a huge advantage because they're offshore,

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Speaker 1: so there are facilities costs is much less in other

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Speaker 1: US banks, but they still make less per dollar of assets,

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Speaker 1: And to me, it's a business model issue. Vanni. I'm

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Speaker 1: actually working on my next book. It's a biography of

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Speaker 1: a very prominent mortgage executive. Great story, and it's a

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Speaker 1: non bank story. Who's the mortgage executive to tell? So

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Speaker 1: I'm not gonna say, I'm gonna tease you a little bit.

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Speaker 1: It hasn't been announced yet, but it's it's almost finished.

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Speaker 1: And the neat thing about it is it's a non

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Speaker 1: bank perspective of the eighties and nineties and the two

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Speaker 1: thousand's and who was their city? The city got the

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Speaker 1: non bank fth host, the non bank culture of lending

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Speaker 1: on unsecured no doc mortgages, all of that came from

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Speaker 1: the nineties. In the in the eighties, people forget this.

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Speaker 1: So that same culture is in city cities, part finance company,

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Speaker 1: part global bank. Um. But if you look at their

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Speaker 1: funding costs, it's significantly higher than the other big banks,

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Speaker 1: so they're at a disadvantage. I kind of put them

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Speaker 1: in the same bucket as Goldman. They have some business

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Speaker 1: model issues that just make investors uneasy. Whereas they'll take

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Speaker 1: a US Bank or Bank America or JP Morgan because

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Speaker 1: they think they have a better handle on it right

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Speaker 1: in terms of the surprise risk factor. Thanks Chris, Yeah, Joy,

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Speaker 1: thanks so much for joining us here. I have a

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Speaker 1: guess as to who this person is, and maybe Vonnie

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Speaker 1: and album about it later. I do have a guess.

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Speaker 1: Chris Whaling, chairman of Whaling Global Advisors, joining us. We

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Speaker 1: appreciate his commentary as always, giving us his thoughts on

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Speaker 1: some of these global investment banks, the head winds they're facing,

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Speaker 1: from business model issues to reputational risk, just tremendous amounts

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Speaker 1: of headways, but at some point there has to be valued.

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Speaker 1: President Trumble is set to make a speed each in

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Speaker 1: which he is expected to assail China over the coronavirus.

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Speaker 1: To get a preview what we might hear, Jordan's Fabian

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Speaker 1: Bloomberg News White House correspondent joins us, So, Jordan, give

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Speaker 1: us a preview of what you think President Trump is going.

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Speaker 1: His main argument will be in front of the U N. Yeah,

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Speaker 1: And in fact, the President actually just wrapped up his

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Speaker 1: remarks just a few minutes ago. His speech was very brief,

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Speaker 1: just under ten minutes, unusual for this kind of address.

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Speaker 1: But he, yes, as you said, he assailed China over

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Speaker 1: the spread of the coronavirus, blaming the Chinese government for

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Speaker 1: letting it spread outside his borders and taking a victory

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Speaker 1: lap of source for the u S response, even though, uh,

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Speaker 1: you know, by the numbers, the US has the worst

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Speaker 1: outbreak in the world. You know. At times, the speech

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00:23:48,600 --> 00:23:51,399
Speaker 1: sounded uh like one of his campaign rallies, and it

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Speaker 1: did seem like it was really intended for a domestic audience,

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Speaker 1: coming just a few weeks before election day in November. Yeah,

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Speaker 1: I mean, we'll kind of response does he expect from

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Speaker 1: the General Assembly itself? For the individual countries, I mean,

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Speaker 1: it's the United Nations, and China is very much a

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Speaker 1: part of the United Nations. Yeah, of course. And you

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Speaker 1: have China and other countries in Europe pushing for your

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Speaker 1: return to this multilateralist view of foreign policy and more

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Speaker 1: more cooperation between the great powers of the world. And

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Speaker 1: but by contrast, you heard your President Trump, you know

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Speaker 1: again sort of doing his go go to loan style

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Speaker 1: in America first agenda, you know, talking about how he

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Speaker 1: forged peace agreements recently between the U a e. And

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Speaker 1: Israel and says that more of those types of agreements

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Speaker 1: are coming. Uh those of course we're not really done

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Speaker 1: within the UN framework, but it's something that the President

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Speaker 1: personally took some pride in, so, you know, the president

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Speaker 1: sort of against setting himself apart and sending a message

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Speaker 1: to the world that he's not going to be afraid

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Speaker 1: to rattle ruffle their feathers when it comes to center

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Speaker 1: issues as foreign policy Jordan, What do most experts say

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Speaker 1: was in fact the role of China in the coronavirus

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Speaker 1: and this the global spread? Was there anything policy related?

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Speaker 1: Was just simply lack of communication on the part of

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Speaker 1: the Chinese authorities. What do we really know? Yeah, right

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Speaker 1: right now, I think you know, we don't. We don't

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Speaker 1: know a whole lot still about how the the origin.

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Speaker 1: I mean, there's the speculation about this, you know, lab

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Speaker 1: and Uhan, but we still don't know the full story.

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Speaker 1: And I think that speaks to the criticism that we've heard,

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Speaker 1: which is that China hasn't been as transparent as other

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Speaker 1: countries might like about the origins and and also the

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Speaker 1: operating in that country and how many infections are actually

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Speaker 1: are uh, you know, the report of the note low number.

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Speaker 1: The President has has said that number is higher. Uh,

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Speaker 1: there's been some criticism of China for being slow to

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Speaker 1: let in UH officials for the World Health Organization and

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Speaker 1: American officials along with them, to come in in the

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Speaker 1: early stages of the pandemic monitor what was going on

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Speaker 1: trying to get a sense of how this virus was spreading.

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Speaker 1: What about the idea that you know, the WHO has

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Speaker 1: backed China as being transparent on on this, and it

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Speaker 1: does appear that international agencies are not flocking to the

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Speaker 1: U S side of things on anything. They're very much

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Speaker 1: trying to stay neutral or even allow China the benefit

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Speaker 1: of the doubt. That's right. And UH, there's been some

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Speaker 1: real tensions between WHO and the US and the president

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Speaker 1: out that he's planning to withdraw the US from the

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Speaker 1: w h O. I think that would take place next

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Speaker 1: year if if he is re elected, and so that

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Speaker 1: there have been some some real tensions there. But again,

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Speaker 1: you know, this is this is something you know again

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Speaker 1: that the president seems to be doing for the methodic

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Speaker 1: political purposes. His He ran on this agenda of again

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Speaker 1: the America first, UH, with the American knows the way

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Speaker 1: forward and critical multi later organizations like the Unitedations like

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Speaker 1: the w h O. So when he was looking for

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Speaker 1: a scapegoat when the outbreak in the US got very bad,

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Speaker 1: you know, he turned his sights to the to China

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Speaker 1: and the w h O and has been harping on

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Speaker 1: those themes ever since. Can I just point out that

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Speaker 1: China's Jumping is actually now delivering a recorded speech to

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Speaker 1: the UN Assembly, so it will be interesting to see

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Speaker 1: if there's any kind of response to what the President

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Speaker 1: might have said or what kind of message she will

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Speaker 1: will deliver right now, Jordan, thank you so much for

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Speaker 1: joining us. We really appreciate it. Jordan's Fabian White House,

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Speaker 1: correspondor for Bloomberg News, giving some reporting on President Trump's

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Speaker 1: speech this morning to the United Nations. Thanks for listening

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Speaker 1: to Bloomberg Markets podcast. You can subscribe and listen to

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00:27:52,000 --> 00:27:55,800
Speaker 1: interviews at Apple Podcasts or whatever a podcast platform you prefer.

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00:27:56,000 --> 00:27:59,000
Speaker 1: I'm Bonnie Quinn. I'm on Twitter at Bonny Quinn, and

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00:27:59,040 --> 00:28:01,639
Speaker 1: I'm Paul Sweeney. I'm on Twitter at pt Sweeney. Before

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Speaker 1: the podcast, you can always catch us worldwide at Bloomberg

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Speaker 1: Radio m