1 00:00:03,160 --> 00:00:07,600 Speaker 1: Broadcasting live to New York Coolborg elevens to Washington d 2 00:00:07,680 --> 00:00:11,520 Speaker 1: C Bloomberg ninety nine one to Boston Bloomberg twelve runs 3 00:00:11,600 --> 00:00:15,320 Speaker 1: to San Francisco Bloomberg nine six to the country, Suitio 4 00:00:15,360 --> 00:00:18,480 Speaker 1: s Exam Channel one nineteen and around the blow the 5 00:00:18,480 --> 00:00:22,360 Speaker 1: Bloomberg Radio plus Aben Bloomberg dot Com. This is Hohomberg 6 00:00:22,440 --> 00:00:26,480 Speaker 1: Surveillance and good morning. I'm Karen Moscow along with Tom 7 00:00:26,560 --> 00:00:28,680 Speaker 1: Keen and Michael mckehon. The opening bell brought to you 8 00:00:28,800 --> 00:00:32,280 Speaker 1: by the University in North Carolinas keenan Flagler Business School, 9 00:00:32,360 --> 00:00:35,840 Speaker 1: Master your balance Sheet with their world class Master of Accounting, 10 00:00:35,880 --> 00:00:39,920 Speaker 1: Executive Development and NBA programs. Visit U, n C dot E, 11 00:00:40,040 --> 00:00:44,280 Speaker 1: d U slash. Business futures are rather stocks are lower 12 00:00:44,360 --> 00:00:46,279 Speaker 1: this morning. D S and P five hundred is down 13 00:00:46,320 --> 00:00:49,680 Speaker 1: four tenths per center eight points to fifty seven. Downtowns 14 00:00:49,680 --> 00:00:52,199 Speaker 1: Industrial average down four tenths per cent or sixty eight 15 00:00:52,200 --> 00:00:55,279 Speaker 1: points to seventeen thousand, six hundred sixty eight. Then ASDACKS 16 00:00:55,320 --> 00:00:57,720 Speaker 1: down seven tenths per center thirty five points to forty 17 00:00:57,760 --> 00:01:00,720 Speaker 1: eight fifty six ten. Your treasury up eleven thirty seconds. 18 00:01:00,760 --> 00:01:02,840 Speaker 1: The yield one point seven two percent the yield on 19 00:01:02,920 --> 00:01:05,440 Speaker 1: a two year point seven two percent. Now I'm ex 20 00:01:05,440 --> 00:01:08,080 Speaker 1: scrude oil is little change is down four cents to 21 00:01:08,160 --> 00:01:11,040 Speaker 1: thirty five sixty five of Arrel and Comic School is 22 00:01:11,120 --> 00:01:13,720 Speaker 1: up one per cent or fourteen dollars to twelve thirty 23 00:01:13,760 --> 00:01:16,600 Speaker 1: three thirty an ounce the euro at other thirteen sixty 24 00:01:16,680 --> 00:01:19,600 Speaker 1: eight the N one ten point five one, Tom and Mike, 25 00:01:20,080 --> 00:01:23,160 Speaker 1: thank you, Karen. It is a good time to catch 26 00:01:23,240 --> 00:01:27,959 Speaker 1: up with Jacob Kirkgard of an imposing Peterson Institute, as 27 00:01:28,000 --> 00:01:32,280 Speaker 1: he provides terrific and thoughtful perspective on Europe. We talked 28 00:01:32,319 --> 00:01:35,280 Speaker 1: earlier of Greece with Nicknall, Kutzis and Jacob. If I 29 00:01:35,280 --> 00:01:39,360 Speaker 1: can take it broader, um, I make charts and sometime 30 00:01:39,440 --> 00:01:42,760 Speaker 1: they surprised me. I did nominal GDP, the animal spirit 31 00:01:42,800 --> 00:01:47,960 Speaker 1: of America recovering persistent better and it was thunderstruck in 32 00:01:47,960 --> 00:01:52,400 Speaker 1: the rollover of nominal GDP in Europe. Exactly how bad 33 00:01:52,720 --> 00:01:56,440 Speaker 1: is it across the euro Zone? Well, I mean, there's 34 00:01:56,440 --> 00:01:58,520 Speaker 1: no doubt that that this is a part of the 35 00:01:58,560 --> 00:02:02,280 Speaker 1: world that is stuck in what looks like increasingly a 36 00:02:02,400 --> 00:02:05,920 Speaker 1: structural growth crisis, to the extent where I think in 37 00:02:05,960 --> 00:02:09,480 Speaker 1: a number of countries, particularly of course in Southern Europe, 38 00:02:09,480 --> 00:02:12,480 Speaker 1: and of course increase in particular, you have to start 39 00:02:12,520 --> 00:02:17,240 Speaker 1: asking yourself, well, what is the way out to to 40 00:02:17,360 --> 00:02:22,000 Speaker 1: restore or to increase nominal GDP growth when you are 41 00:02:22,080 --> 00:02:26,200 Speaker 1: in the common currency. Of course, the real world reality 42 00:02:26,360 --> 00:02:30,520 Speaker 1: is that trying to undo this would be infinitely worse. 43 00:02:31,080 --> 00:02:35,600 Speaker 1: So you are stuck in a shall we say, at 44 00:02:35,680 --> 00:02:39,960 Speaker 1: least semi bad equilibrium which will require a lot of political, 45 00:02:40,600 --> 00:02:44,239 Speaker 1: tough political reforms to get out of to restore these uh, 46 00:02:44,280 --> 00:02:47,680 Speaker 1: you know, sustainable nominal GDP growth rates. And it's not 47 00:02:47,760 --> 00:02:50,280 Speaker 1: clear the political will is there. Are you of the 48 00:02:50,320 --> 00:02:53,919 Speaker 1: opinion that they will find the will? That nothing, as 49 00:02:53,960 --> 00:02:56,480 Speaker 1: the old saying goes, concentrates to mind like a hanging 50 00:02:57,200 --> 00:03:02,040 Speaker 1: or um, is it more likely that they can't all 51 00:03:02,160 --> 00:03:07,200 Speaker 1: stay together? No? I mean I think ultimately the situation 52 00:03:07,240 --> 00:03:10,079 Speaker 1: that we have seen you know, all over I mean 53 00:03:10,160 --> 00:03:13,840 Speaker 1: repeat itself in Greece again and again, it suggests that know, 54 00:03:13,960 --> 00:03:17,720 Speaker 1: a solution will be found, uh not necessarily again to 55 00:03:19,160 --> 00:03:21,880 Speaker 1: go back to the shall we say, good old days 56 00:03:22,080 --> 00:03:25,639 Speaker 1: where you had you know, gd nominal GDP growth of 57 00:03:25,880 --> 00:03:29,120 Speaker 1: three or four or five percent, If not more, but 58 00:03:29,240 --> 00:03:32,360 Speaker 1: at least enough to stay together for the reason being 59 00:03:32,480 --> 00:03:36,480 Speaker 1: that well, the alternative, namely breaking up is uh is 60 00:03:36,520 --> 00:03:40,120 Speaker 1: so unpleasant for everyone involved that you will do whatever 61 00:03:40,160 --> 00:03:43,080 Speaker 1: it takes to avoid that. But it doesn't mean that 62 00:03:43,120 --> 00:03:48,160 Speaker 1: you actually make the euro Area an area that is growth, 63 00:03:48,600 --> 00:03:50,920 Speaker 1: which has growth, just like we were used to just 64 00:03:50,960 --> 00:03:55,640 Speaker 1: a few years ago. Well, and in that case, uh, 65 00:03:55,840 --> 00:03:57,920 Speaker 1: do you have a time frame? I know you're not 66 00:03:57,920 --> 00:04:00,240 Speaker 1: supposed to make a forecast standard time frame, but of 67 00:04:00,280 --> 00:04:03,280 Speaker 1: a time from when this might happen. Are we just 68 00:04:03,320 --> 00:04:06,720 Speaker 1: gonna keep punting the ball down in the field for 69 00:04:07,080 --> 00:04:09,200 Speaker 1: month after month, year after year, as we've done for 70 00:04:09,240 --> 00:04:11,760 Speaker 1: the last four or five years. What I mean, I 71 00:04:11,800 --> 00:04:14,920 Speaker 1: think it's it's it's very clear to me at least 72 00:04:14,920 --> 00:04:16,720 Speaker 1: that I mean, when you talk about the Euro's zone, 73 00:04:16,760 --> 00:04:22,160 Speaker 1: if you take the three biggest economies Germany, France, and Italy. Uh, 74 00:04:22,320 --> 00:04:26,120 Speaker 1: German growth is not great, but it's also, you know, 75 00:04:26,240 --> 00:04:30,040 Speaker 1: not nearly as bad as the Eurozone average. Uh. It is, however, 76 00:04:30,080 --> 00:04:32,279 Speaker 1: a country that really that did a lot of very 77 00:04:32,279 --> 00:04:37,640 Speaker 1: good reforms almost ten years ago by angel America's predecessor. 78 00:04:37,720 --> 00:04:41,919 Speaker 1: Angel America is nominally is certainly a very reluctant domestic reformer. 79 00:04:42,279 --> 00:04:45,520 Speaker 1: So I don't expect big things from Germany as long 80 00:04:45,560 --> 00:04:48,159 Speaker 1: as she remains chancellor, which would probably be until the 81 00:04:48,240 --> 00:04:51,120 Speaker 1: end of this decade. UH. In my opinion, at least 82 00:04:51,760 --> 00:04:55,440 Speaker 1: UM in France, we have a new election presidential election 83 00:04:55,560 --> 00:04:59,520 Speaker 1: next year. I think it is possible that we get 84 00:04:59,800 --> 00:05:05,720 Speaker 1: a more reformist president uh In elected there. UM. So 85 00:05:05,760 --> 00:05:11,160 Speaker 1: they're the time frame would be sometime after seen in Italy, UM, 86 00:05:11,240 --> 00:05:15,960 Speaker 1: I think the reality is that Matteo Renzi has probably 87 00:05:16,000 --> 00:05:20,160 Speaker 1: gone as far as he can without a new political mandate. 88 00:05:21,400 --> 00:05:23,760 Speaker 1: The question is when does he want to take that mandate. 89 00:05:23,800 --> 00:05:26,640 Speaker 1: He still needs to have his new election law UH 90 00:05:26,800 --> 00:05:31,000 Speaker 1: finalized UH, and then it becomes really a matter of 91 00:05:31,040 --> 00:05:33,680 Speaker 1: domestic politics. But again, I think we're looking at a 92 00:05:33,720 --> 00:05:37,520 Speaker 1: new election there in seventeen before we start seeing re election. 93 00:05:37,600 --> 00:05:40,800 Speaker 1: And Jacob Bloomberg is a conversation Jacob Kirker are joining 94 00:05:40,880 --> 00:05:43,720 Speaker 1: US folks with Peterson Institute. We have a conversation with 95 00:05:43,800 --> 00:05:46,200 Speaker 1: Secretary Kerry coming up our David Weston will do that. 96 00:05:46,240 --> 00:05:48,760 Speaker 1: You'll hear it on Bloomberg Radio in the eleven hour 97 00:05:49,240 --> 00:05:51,640 Speaker 1: and in Jacob the Nexus of Europe in the US 98 00:05:51,800 --> 00:05:54,360 Speaker 1: is maybe not Brexit, but it's Turkey. You've written on 99 00:05:54,360 --> 00:05:57,960 Speaker 1: this recently. Is there a different dialogue with Turkey now 100 00:05:58,400 --> 00:06:02,800 Speaker 1: or is it the same thing we learned in history books. Um, well, 101 00:06:02,800 --> 00:06:06,000 Speaker 1: there's no doubt that Turkish clout if you like, or 102 00:06:06,080 --> 00:06:10,480 Speaker 1: influence over Europe right now is probably as high as 103 00:06:10,520 --> 00:06:12,880 Speaker 1: it has been, you know, since they were the gates 104 00:06:12,880 --> 00:06:16,200 Speaker 1: of Vienna in the sixteenth century or something like that. 105 00:06:17,000 --> 00:06:21,480 Speaker 1: Because you know, the European mainstream politicians are are very scared, 106 00:06:21,560 --> 00:06:27,400 Speaker 1: I think rightfully so about this immigration situation, and they have, 107 00:06:27,560 --> 00:06:30,679 Speaker 1: you of court led by Angela America that they need 108 00:06:30,720 --> 00:06:34,960 Speaker 1: to get some sort of accommodation with the Turkish government 109 00:06:35,000 --> 00:06:37,520 Speaker 1: and president are the one to try to deal with 110 00:06:37,560 --> 00:06:42,559 Speaker 1: this because they recognize that the domestic politics in most 111 00:06:42,600 --> 00:06:47,839 Speaker 1: European countries will not sustain another year of say a 112 00:06:47,920 --> 00:06:52,400 Speaker 1: million migrants streaming across the borders in a sort of 113 00:06:52,520 --> 00:06:58,320 Speaker 1: unmanaged manner. So they have they have basically tried to 114 00:06:59,040 --> 00:07:03,160 Speaker 1: bribe and and with a lot of political concessions, money 115 00:07:03,200 --> 00:07:08,080 Speaker 1: and other things. Uh, clearly the implicit agreement that they 116 00:07:08,120 --> 00:07:11,960 Speaker 1: look the other way when are the one closes down 117 00:07:12,000 --> 00:07:15,320 Speaker 1: Turkish opposition newspapers and things like that to try to 118 00:07:15,360 --> 00:07:19,440 Speaker 1: get him to help help out. Well, we've we've got 119 00:07:19,440 --> 00:07:22,120 Speaker 1: the warmer weather coming up, and the crisis is probably 120 00:07:22,160 --> 00:07:24,400 Speaker 1: only going to get worse than you know, all these 121 00:07:24,440 --> 00:07:28,480 Speaker 1: people coming across from Turkey to Greece. Is this deal 122 00:07:28,560 --> 00:07:31,440 Speaker 1: really going to be able to slow that flow, because 123 00:07:31,480 --> 00:07:33,560 Speaker 1: of course, the more migrants, the bigger trouble it is 124 00:07:33,600 --> 00:07:38,760 Speaker 1: for Greece, the more Grexit becomes a possibility, etcetera, etcetera. Um, well, 125 00:07:38,840 --> 00:07:40,800 Speaker 1: I mean, so far, so good. I think we have 126 00:07:40,920 --> 00:07:43,680 Speaker 1: to say, although as you mentioned, the weather pattern is 127 00:07:43,680 --> 00:07:47,680 Speaker 1: probably a key issue here, that the numbers have come down. 128 00:07:47,800 --> 00:07:50,240 Speaker 1: I mean, in late two thousand and fifteen, you and 129 00:07:50,360 --> 00:07:53,760 Speaker 1: talking three four or five thousand a day. That fell 130 00:07:53,840 --> 00:07:57,960 Speaker 1: to about a thousands and two thousand and early this year, 131 00:07:58,000 --> 00:08:00,559 Speaker 1: and now we're down to you know, somewhere on five 132 00:08:00,640 --> 00:08:04,800 Speaker 1: hundred uh so, so numbers have come down, But I 133 00:08:04,800 --> 00:08:06,800 Speaker 1: think the reality here is that there's seven There are 134 00:08:06,840 --> 00:08:10,000 Speaker 1: sort of several tracks that are going on here because 135 00:08:10,040 --> 00:08:14,160 Speaker 1: the reality is that there is now a border uh 136 00:08:14,200 --> 00:08:17,120 Speaker 1: in Europe. I mean, the Macedonian government have put up 137 00:08:17,160 --> 00:08:21,440 Speaker 1: the barbed wire and they have blocked the northern Greek border. 138 00:08:22,120 --> 00:08:25,240 Speaker 1: So the deal with Turkey. UH is a sort of 139 00:08:25,280 --> 00:08:29,440 Speaker 1: an additional UH insurance, if you like, and one that 140 00:08:29,520 --> 00:08:34,240 Speaker 1: allows angel A Miracle to nominally claim to the German 141 00:08:34,280 --> 00:08:37,000 Speaker 1: electorate that she still is in favor of an open 142 00:08:37,040 --> 00:08:39,840 Speaker 1: door policy. But of course she does that knowing very 143 00:08:39,840 --> 00:08:44,200 Speaker 1: well that the Macedonians have actually already closed their border. 144 00:08:44,400 --> 00:08:48,240 Speaker 1: We call that heavy lifting. Yes, we're gonna come back 145 00:08:48,240 --> 00:08:51,640 Speaker 1: with Dr Kirker. This is fascinating and really something we 146 00:08:51,640 --> 00:08:54,760 Speaker 1: haven't addressed. There was a period like what a year ago, 147 00:08:55,559 --> 00:08:58,559 Speaker 1: where four out of five days we're eurocentric and Greek 148 00:08:58,640 --> 00:09:03,560 Speaker 1: centric and Jacob Kirker guards centric and we've been, you know, 149 00:09:03,800 --> 00:09:08,240 Speaker 1: with with a better financial or fiscal politics, we've been 150 00:09:08,280 --> 00:09:11,319 Speaker 1: off the mark. We'll come back and continue this conversation. 151 00:09:11,360 --> 00:09:18,160 Speaker 1: The down negative one a hundred as we speak, checking 152 00:09:18,120 --> 00:09:20,440 Speaker 1: with Michael Barr at the Latest World in dash Lightlines, 153 00:09:20,840 --> 00:09:23,440 Speaker 1: Mike Tom, thank you very much. Republican Ted Cruz and 154 00:09:23,600 --> 00:09:27,000 Speaker 1: Democrat Bernie Sanders are looking for victories in today's primaries 155 00:09:27,040 --> 00:09:31,360 Speaker 1: in Wisconsin. If Cruz wins all of Wisconsin's forty two delegates, 156 00:09:31,440 --> 00:09:34,480 Speaker 1: Republican front runner Donald Trump, we need to win fifty 157 00:09:34,559 --> 00:09:37,720 Speaker 1: seven percent of those remaining to clinch the Republican nomination. 158 00:09:37,960 --> 00:09:40,040 Speaker 1: So far, Trump has won forty eight percent of the 159 00:09:40,040 --> 00:09:43,760 Speaker 1: delegates awarded. Meanwhile, Bernie Sanders would need to win sixty 160 00:09:43,840 --> 00:09:46,720 Speaker 1: seven percent of the remaining delegates to catch up to 161 00:09:46,920 --> 00:09:50,640 Speaker 1: Democratic front runner Hillary Clinton, and so far Sanders only 162 00:09:50,720 --> 00:09:54,120 Speaker 1: has thirty seven. Police say there wasn't much left after 163 00:09:54,200 --> 00:09:58,160 Speaker 1: a site seeing helicopter crashed yesterday. You're the Great Smokey 164 00:09:58,200 --> 00:10:01,440 Speaker 1: Mountains National Park in Eastern Town to see all five 165 00:10:01,520 --> 00:10:05,360 Speaker 1: people on board were killed. Former pilot and aviation consultant 166 00:10:05,480 --> 00:10:08,240 Speaker 1: Steve Ganiard, this is not like getting on an airplane 167 00:10:08,240 --> 00:10:11,280 Speaker 1: and flying across the country. The safety record of these 168 00:10:11,280 --> 00:10:14,000 Speaker 1: small helicopters is just not as good as it is 169 00:10:14,200 --> 00:10:17,199 Speaker 1: as if you were getting on an airliner. Iceland's Prime 170 00:10:17,240 --> 00:10:20,280 Speaker 1: minister has been caught up in the Panamala Papers offshore 171 00:10:20,400 --> 00:10:23,760 Speaker 1: tax scandal. People in Iceland are calling for Prime Minister 172 00:10:23,960 --> 00:10:28,160 Speaker 1: Sigmunder David Gunlandson to step down. Yesterday, about ten thousand 173 00:10:28,160 --> 00:10:32,960 Speaker 1: people demonstrated outside Iceland's parliament. Goodlickson says he is ready 174 00:10:33,000 --> 00:10:36,439 Speaker 1: to call early elections if he loses a no confidence vote. 175 00:10:36,720 --> 00:10:39,199 Speaker 1: Global News twenty four hours a day, powered by our 176 00:10:39,320 --> 00:10:42,079 Speaker 1: twenty four hundred journalists and more than a hundred fifty 177 00:10:42,080 --> 00:10:45,160 Speaker 1: news bureaus from around the world. Now Michael Barn Michael, 178 00:10:45,200 --> 00:10:47,640 Speaker 1: thank you so much. Away to the tape. Negative one twelve, 179 00:10:48,240 --> 00:10:51,080 Speaker 1: the vics fifteen point four or five up full one 180 00:10:51,160 --> 00:10:55,160 Speaker 1: point three three points with Jacob Kirker Guard the Peterson Institute. 181 00:10:55,679 --> 00:11:02,280 Speaker 1: This is Bloomberg Surveillance. Bloomberg s anounces brought to you 182 00:11:02,320 --> 00:11:04,480 Speaker 1: by ancient Block and Engine. Named best accounting firm in 183 00:11:04,520 --> 00:11:06,559 Speaker 1: North America for the sixth year in a row by 184 00:11:06,679 --> 00:11:19,400 Speaker 1: edgeweek dot com. Global business news twenty four hours a 185 00:11:19,480 --> 00:11:22,680 Speaker 1: day at Bloomberg dot com, the radio plus mobile lact 186 00:11:22,800 --> 00:11:26,240 Speaker 1: and on your radio. This is a Bloomberg Business Flash 187 00:11:26,679 --> 00:11:28,959 Speaker 1: and I'm Karen Moscow. This updates brought to you by 188 00:11:29,040 --> 00:11:32,560 Speaker 1: National Realty Returns on cash and rented real estate. Find 189 00:11:32,559 --> 00:11:35,480 Speaker 1: them at n r i A dot net. U S 190 00:11:35,520 --> 00:11:37,920 Speaker 1: docs are falling, with the sn P five hundred, slipping 191 00:11:37,920 --> 00:11:40,280 Speaker 1: for a second day from its highest levels this year 192 00:11:40,360 --> 00:11:44,200 Speaker 1: amid simmering concerns that weakness and global growth will deepen. 193 00:11:44,440 --> 00:11:46,960 Speaker 1: To check the markets every fifteen minutes throughout the trading 194 00:11:47,000 --> 00:11:49,920 Speaker 1: day on Bloomberg SNP five hundred down one percent or 195 00:11:49,920 --> 00:11:53,920 Speaker 1: twenty one points down. Jown's industrial average down eight tenth 196 00:11:53,960 --> 00:11:56,760 Speaker 1: percent or one hundred thirty four points to seventeen thousand 197 00:11:56,760 --> 00:11:59,720 Speaker 1: and six hundred four nasdacs down one percent or forty 198 00:11:59,760 --> 00:12:02,640 Speaker 1: six points to forty eight forty five ten. Your Treasury 199 00:12:02,679 --> 00:12:05,800 Speaker 1: U thirteen thirty seconds. The yield one point seven one percent. 200 00:12:05,880 --> 00:12:08,199 Speaker 1: The yield on the two year point seven two percent. 201 00:12:08,600 --> 00:12:11,199 Speaker 1: Non ex Screwede oil down half percent or twenty cents 202 00:12:11,200 --> 00:12:13,960 Speaker 1: at thirty five fifty a barrel. Comics gold is up 203 00:12:14,000 --> 00:12:16,560 Speaker 1: one point two percent or fourteen dollar seventy cents at 204 00:12:16,559 --> 00:12:19,400 Speaker 1: twelve thirty four and ounce. The euro a dollar thirteen 205 00:12:19,440 --> 00:12:22,680 Speaker 1: fifty nine. The en one ten point four five. Valiant 206 00:12:22,679 --> 00:12:25,720 Speaker 1: Pharmaceuticals set a special at hog board committee has found 207 00:12:25,720 --> 00:12:28,720 Speaker 1: no additional accounting issues of the company that would require 208 00:12:28,800 --> 00:12:31,679 Speaker 1: more restatements, and that it plans to file its annual 209 00:12:31,760 --> 00:12:34,920 Speaker 1: report on Nuver four, April twenty nine. It shares are 210 00:12:35,000 --> 00:12:38,640 Speaker 1: up nine percent this morning. Walgreen's Boots Alliances cost cutting 211 00:12:38,640 --> 00:12:41,439 Speaker 1: measures help the drug store chain beat analysts earnings estimates 212 00:12:41,480 --> 00:12:44,720 Speaker 1: for the fiscal second quarter, as US same store retail 213 00:12:44,760 --> 00:12:48,360 Speaker 1: sales dropped again and pharmacy revenue growth weakened because of 214 00:12:48,360 --> 00:12:51,040 Speaker 1: a mild flu season. It shares lower down one point 215 00:12:51,040 --> 00:12:53,599 Speaker 1: eight percent. And that's a Bloomberg business flash, Tom and 216 00:12:53,679 --> 00:12:56,120 Speaker 1: might chure in a continuate to the market this morning 217 00:12:56,280 --> 00:13:00,240 Speaker 1: end was a one ten sixty four stronger and in 218 00:13:00,280 --> 00:13:03,320 Speaker 1: the last hour now or so, Jacob Kirk of Garde 219 00:13:03,320 --> 00:13:05,120 Speaker 1: a few more minutes with him if we could this 220 00:13:05,200 --> 00:13:08,160 Speaker 1: morning with the Pierson Institute. Jacob, people don't know that 221 00:13:08,240 --> 00:13:11,600 Speaker 1: you have a cottage industry of looking at finance and 222 00:13:11,679 --> 00:13:15,040 Speaker 1: linking it into economics. You were co author of US 223 00:13:15,160 --> 00:13:19,440 Speaker 1: pension reform lessons from other countries, um all of us 224 00:13:19,440 --> 00:13:22,600 Speaker 1: at Bloomberg Surveillance that we're in black John Tucker with 225 00:13:22,720 --> 00:13:26,679 Speaker 1: this two oh one k another successful investment here at 226 00:13:26,679 --> 00:13:29,160 Speaker 1: Bloomberg Surveillance. We'll be working with these two for the 227 00:13:29,200 --> 00:13:32,280 Speaker 1: rest of my life. It is a disaster. Jacob. Which 228 00:13:32,360 --> 00:13:37,040 Speaker 1: country can we learn the greatest lessons from in fixing 229 00:13:37,200 --> 00:13:41,240 Speaker 1: our retirement system? Well, I think it depends very much 230 00:13:41,320 --> 00:13:44,680 Speaker 1: here in the United States, which particular pension system you're 231 00:13:44,720 --> 00:13:47,560 Speaker 1: looking at, because I think if you look at social 232 00:13:47,600 --> 00:13:52,440 Speaker 1: Security in isolation, it actually, compared to many other countries, 233 00:13:52,480 --> 00:13:55,600 Speaker 1: doesn't look too bad. But however, if you look at 234 00:13:56,240 --> 00:13:59,480 Speaker 1: you know, many state and local governments, Uh, that's when 235 00:13:59,520 --> 00:14:02,880 Speaker 1: you head inn to the disaster areas. UM. I think 236 00:14:02,920 --> 00:14:05,600 Speaker 1: I would also say that one of the things that 237 00:14:05,679 --> 00:14:09,760 Speaker 1: was striking to me when I started writing this book 238 00:14:10,800 --> 00:14:16,079 Speaker 1: was to discover, you know, just how big the differences 239 00:14:16,160 --> 00:14:20,400 Speaker 1: or inequality if you like, of of retirement preparation in 240 00:14:20,400 --> 00:14:23,920 Speaker 1: the United States is I mean somewhere between forty of 241 00:14:23,960 --> 00:14:31,000 Speaker 1: Americans have essentially zero retirement savings, and uh, that's obviously 242 00:14:31,040 --> 00:14:33,000 Speaker 1: something that's going to come back I mean sorry, zero 243 00:14:33,440 --> 00:14:38,120 Speaker 1: private Uh, so they are stuck with only Social Security. Uh, 244 00:14:38,120 --> 00:14:42,920 Speaker 1: and and that is obviously something that's going to perpetuate, uh, 245 00:14:43,240 --> 00:14:45,800 Speaker 1: rising inequalities. So I would say one of the things 246 00:14:45,800 --> 00:14:49,440 Speaker 1: that we could learn from other countries to remedy that 247 00:14:49,680 --> 00:14:52,640 Speaker 1: is that this may not be very popular. It certainly 248 00:14:52,720 --> 00:14:56,040 Speaker 1: wasn't when we suggested it in the book. Uh. You know, 249 00:14:56,200 --> 00:14:59,320 Speaker 1: if other countries have been more coursive, they have gone 250 00:14:59,360 --> 00:15:04,560 Speaker 1: to engineer forced pension savings so that it's it's basically 251 00:15:04,600 --> 00:15:07,280 Speaker 1: an earmark tax in the same way like a payroll tax, 252 00:15:07,680 --> 00:15:11,000 Speaker 1: UH that goes to closure security. You have a caught 253 00:15:11,000 --> 00:15:15,000 Speaker 1: of your paycheck go into a uh private pension, and 254 00:15:15,040 --> 00:15:19,800 Speaker 1: then that private pension is managed by uh, you know, 255 00:15:19,840 --> 00:15:25,520 Speaker 1: I approved set of asset managers. When you look at 256 00:15:25,560 --> 00:15:28,440 Speaker 1: all the issues that we have been talking about and 257 00:15:28,520 --> 00:15:32,480 Speaker 1: the outlook for Europe, the outlook for the United States, 258 00:15:32,640 --> 00:15:35,800 Speaker 1: what's the follow on? I mean, if if these things 259 00:15:35,840 --> 00:15:41,120 Speaker 1: are not handled correctly, do we have a crisis, a 260 00:15:41,160 --> 00:15:43,560 Speaker 1: global crisis? Or are we in a world where we 261 00:15:43,720 --> 00:15:46,440 Speaker 1: just on a you know, month to month, year to 262 00:15:46,520 --> 00:15:50,600 Speaker 1: year basis, we moddled through well. I mean, I think 263 00:15:51,280 --> 00:15:53,400 Speaker 1: I forgot who coined I think maybe it was Christine 264 00:15:53,480 --> 00:15:57,160 Speaker 1: Legarde who coined this new term, the new mediocre uh. 265 00:15:57,200 --> 00:15:59,040 Speaker 1: And I think if you look at just as it 266 00:15:59,160 --> 00:16:03,240 Speaker 1: a long term day more graphics outlook for certainly for Europe, 267 00:16:03,480 --> 00:16:06,640 Speaker 1: but also for the United States, if you look at 268 00:16:06,680 --> 00:16:10,320 Speaker 1: the fact that we have seen slowing productivity growth both 269 00:16:10,360 --> 00:16:14,560 Speaker 1: on labor prouctivity and TFP, etcetera, UM, well then we are, 270 00:16:15,320 --> 00:16:19,480 Speaker 1: you know too, is probably where we are. And like 271 00:16:19,600 --> 00:16:21,320 Speaker 1: it or not, we're just gonna have to make do 272 00:16:21,480 --> 00:16:25,400 Speaker 1: with that. Uh. And that clearly means that we're gonna 273 00:16:25,400 --> 00:16:28,800 Speaker 1: have to do a lot of things very differently. Jacob, 274 00:16:28,800 --> 00:16:31,400 Speaker 1: thank you. So much. Jacob from Curer Artists with the 275 00:16:31,520 --> 00:16:33,680 Speaker 1: Peter City Institute on Europe, a little bit of a 276 00:16:33,720 --> 00:16:37,120 Speaker 1: Europe Day, the euro one third chief fifty six. We've 277 00:16:37,200 --> 00:16:40,000 Speaker 1: dragged her in here. She said, no, our people talk 278 00:16:40,120 --> 00:16:42,160 Speaker 1: to her people, and we said, come on, give us Cynthia. 279 00:16:42,520 --> 00:16:45,040 Speaker 1: When you see the dead cat bounce a valiant, it's 280 00:16:45,040 --> 00:16:48,520 Speaker 1: always an important time to talk to Cynthia. Coon's with 281 00:16:48,600 --> 00:16:51,760 Speaker 1: Bloomberg News, and she said, just bang up pharmaceutical reporting 282 00:16:52,120 --> 00:16:53,520 Speaker 1: here as well, because so they come out of the 283 00:16:53,520 --> 00:16:57,000 Speaker 1: announced when things are better at Pops, it's already giving 284 00:16:57,040 --> 00:17:00,920 Speaker 1: it back and it's a chart that's ugly, ugly. Where 285 00:17:01,000 --> 00:17:04,159 Speaker 1: is this thing in ninety days? Well, I think what 286 00:17:04,359 --> 00:17:06,720 Speaker 1: has to happen in the next say ninety days for 287 00:17:06,760 --> 00:17:09,000 Speaker 1: investors to get really comfortable is they have to file 288 00:17:09,040 --> 00:17:14,320 Speaker 1: their financial reports and finial our original and so what 289 00:17:14,440 --> 00:17:16,200 Speaker 1: they've said here is that they're going to be able 290 00:17:16,240 --> 00:17:18,399 Speaker 1: to do that. But they've said that a number of 291 00:17:18,440 --> 00:17:21,360 Speaker 1: times and the market skeptical because you have to do 292 00:17:21,400 --> 00:17:23,880 Speaker 1: that and that's so important and so critical right now. 293 00:17:23,920 --> 00:17:26,840 Speaker 1: So so what they're saying is their internal investigation is done. 294 00:17:27,040 --> 00:17:29,960 Speaker 1: But then they also say this wording leaves a little 295 00:17:30,000 --> 00:17:33,919 Speaker 1: room here. They say the remaining work associated with looking 296 00:17:33,920 --> 00:17:36,840 Speaker 1: into internal controls will be passed off to the board, 297 00:17:36,960 --> 00:17:40,440 Speaker 1: So they're not saying that everything is in the clear here. 298 00:17:40,680 --> 00:17:43,719 Speaker 1: And their auditors, PwC is the one who signs off. Well, 299 00:17:43,760 --> 00:17:46,159 Speaker 1: that's my question. Who's driving the bus the auditors is 300 00:17:46,200 --> 00:17:49,359 Speaker 1: PwC said to the board, stop, but if you want us, 301 00:17:49,400 --> 00:17:51,800 Speaker 1: we're going to make all the shots. Is Mr Ackman 302 00:17:51,840 --> 00:17:54,240 Speaker 1: work in eighteen hours a day at Valiant? Who's driving 303 00:17:54,280 --> 00:17:56,879 Speaker 1: the bus? Well, I'm sure, I'm sure Bill Ackman is 304 00:17:56,920 --> 00:17:59,560 Speaker 1: working very hard right now to try to get things 305 00:18:00,040 --> 00:18:02,600 Speaker 1: heading in the right direction. What's also critical about this 306 00:18:02,640 --> 00:18:06,040 Speaker 1: information and about them filing their financials is it goes 307 00:18:06,080 --> 00:18:07,879 Speaker 1: a long way to helping them get a new CEO, 308 00:18:08,040 --> 00:18:10,879 Speaker 1: because right now the question is they obviously need a 309 00:18:10,880 --> 00:18:12,760 Speaker 1: new CEO. They said they're going to plan for a 310 00:18:12,800 --> 00:18:16,399 Speaker 1: future without Mike Pearson, But if they don't have audited financials, 311 00:18:16,600 --> 00:18:19,040 Speaker 1: it's hard to see a new person come in and 312 00:18:19,080 --> 00:18:21,600 Speaker 1: want to sign off on those documents. So if they're 313 00:18:21,640 --> 00:18:24,480 Speaker 1: able to push ahead and come up with a new industry, 314 00:18:24,560 --> 00:18:26,880 Speaker 1: a CEO who has experienced in the industry, that will 315 00:18:26,920 --> 00:18:29,280 Speaker 1: also be really positive. But again this is up to 316 00:18:29,320 --> 00:18:31,480 Speaker 1: p WC of whether or not to sign off on 317 00:18:31,560 --> 00:18:34,840 Speaker 1: these documents. So I think there's still some uncertainty here. 318 00:18:34,880 --> 00:18:37,240 Speaker 1: That's probably why the stock is starting to temper some 319 00:18:37,320 --> 00:18:40,600 Speaker 1: of its enthusiasm. How much credibility does anybody on the 320 00:18:40,640 --> 00:18:46,840 Speaker 1: board have at this point with investors? Well, it's I 321 00:18:46,880 --> 00:18:49,120 Speaker 1: think investors would have liked to see a bigger overhaul 322 00:18:49,119 --> 00:18:53,120 Speaker 1: of the board UM earlier on. And so we are 323 00:18:53,160 --> 00:18:56,480 Speaker 1: looking at a board that pretty closely resembles the board 324 00:18:56,520 --> 00:18:59,920 Speaker 1: that's been there for a while. And so so there 325 00:19:00,080 --> 00:19:02,960 Speaker 1: is that UM. There have been some additions, and but 326 00:19:03,000 --> 00:19:05,400 Speaker 1: then some of the additions also came from the activist 327 00:19:05,400 --> 00:19:09,919 Speaker 1: investors side, So it's more activist investors getting into the stock, 328 00:19:10,000 --> 00:19:14,800 Speaker 1: and that's not exactly what investors want. Investors want pharmaceutical 329 00:19:14,960 --> 00:19:18,800 Speaker 1: industry experienced people to come in and run this company 330 00:19:18,800 --> 00:19:22,440 Speaker 1: like a pharma So what's Thomas Ross, who I don't 331 00:19:22,440 --> 00:19:24,800 Speaker 1: even know he's been medicated today. He's a member of 332 00:19:24,840 --> 00:19:28,879 Speaker 1: the board, former president University of North Carolina, probably you know, 333 00:19:29,000 --> 00:19:31,399 Speaker 1: getting over last night's basketball game where u n C 334 00:19:32,160 --> 00:19:34,440 Speaker 1: got crushed right at the end. What does he do? 335 00:19:34,440 --> 00:19:36,159 Speaker 1: Does he just turn to Bill Ackman and say, what 336 00:19:36,200 --> 00:19:40,879 Speaker 1: should I think? Where's the independent board here? Well, I 337 00:19:40,920 --> 00:19:44,080 Speaker 1: mean there there are members who are considering an independent Interestingly, 338 00:19:44,160 --> 00:19:46,359 Speaker 1: they've they've been on the board for a long time 339 00:19:46,920 --> 00:19:52,600 Speaker 1: UM and for and for for Mr Ross. You're talking 340 00:19:52,640 --> 00:19:55,159 Speaker 1: about someone in U n C. And there's a you know, 341 00:19:55,359 --> 00:19:57,800 Speaker 1: bobbing Room who's now the chairman of the board is 342 00:19:57,920 --> 00:19:59,639 Speaker 1: in that based in that area, and there's a lot 343 00:19:59,680 --> 00:20:02,479 Speaker 1: of actions. UM. People have pointed out to me a 344 00:20:02,480 --> 00:20:05,280 Speaker 1: lot of members of the board that are UM from 345 00:20:05,359 --> 00:20:08,640 Speaker 1: that sort of that area, the Raleig Durham area, which 346 00:20:08,800 --> 00:20:12,200 Speaker 1: isn't necessarily uncommon. But the question is are there some 347 00:20:12,680 --> 00:20:16,040 Speaker 1: relationships there that these people have with one another that 348 00:20:16,080 --> 00:20:20,520 Speaker 1: are long standing? UM? But so there's that. But I 349 00:20:20,560 --> 00:20:23,119 Speaker 1: think what what Valiant needs. I think what investors want 350 00:20:23,160 --> 00:20:24,639 Speaker 1: to see now is someone who's going to run the 351 00:20:24,680 --> 00:20:26,639 Speaker 1: company like a farma company. That is just not what 352 00:20:26,680 --> 00:20:28,879 Speaker 1: they've done. They have not invested in R and D, 353 00:20:29,160 --> 00:20:32,200 Speaker 1: they have not put the time into developing products. Their 354 00:20:32,280 --> 00:20:36,080 Speaker 1: their launched for the female libido pill. Yesterday we reported 355 00:20:36,119 --> 00:20:38,920 Speaker 1: that they cut the entire salesforce. They're going to relaunch 356 00:20:38,960 --> 00:20:40,960 Speaker 1: at some point later this year. We don't know when, 357 00:20:41,720 --> 00:20:43,440 Speaker 1: so they haven't even been able to get that off 358 00:20:43,440 --> 00:20:47,040 Speaker 1: the ground. They just haven't demonstrated what typical FARMA companies 359 00:20:47,080 --> 00:20:51,520 Speaker 1: can do, which is to develop and sell. That's my 360 00:20:51,640 --> 00:20:54,200 Speaker 1: question and we only have a minute here, so quickly, 361 00:20:54,200 --> 00:20:58,240 Speaker 1: what what did analysts feel the prospects for the company 362 00:20:58,280 --> 00:21:01,960 Speaker 1: going forward are as a standal own uh entity? Are 363 00:21:02,000 --> 00:21:03,680 Speaker 1: are they going to be able to do what you're 364 00:21:03,680 --> 00:21:05,800 Speaker 1: saying or the best thing for them to do is 365 00:21:05,800 --> 00:21:08,199 Speaker 1: sell off the pieces. Well, when it comes down to 366 00:21:08,280 --> 00:21:10,320 Speaker 1: really is how they handle these debt negotiations and what 367 00:21:10,359 --> 00:21:13,080 Speaker 1: they get from their lenders. So we also reported yesterday 368 00:21:13,080 --> 00:21:15,200 Speaker 1: that they're getting some pushback that lenders don't think what's 369 00:21:15,200 --> 00:21:17,480 Speaker 1: on the table is good enough. And so really what 370 00:21:17,520 --> 00:21:19,360 Speaker 1: it's going to come down to is how much leeway 371 00:21:19,480 --> 00:21:23,000 Speaker 1: lenders give them to deliver on earnings and that will 372 00:21:23,040 --> 00:21:24,840 Speaker 1: be the true test about whether or not they have 373 00:21:24,880 --> 00:21:28,880 Speaker 1: the space to to grow thirty seconds? Can the cell 374 00:21:29,000 --> 00:21:32,640 Speaker 1: side make it presumed by hold cell call if they 375 00:21:32,680 --> 00:21:37,160 Speaker 1: don't have audited statistics, Well, they've been doing it so 376 00:21:37,200 --> 00:21:39,040 Speaker 1: far and they've had a lot of buys for a 377 00:21:39,040 --> 00:21:43,479 Speaker 1: long time. David and am solum if Piper Jeffrey has 378 00:21:43,480 --> 00:21:45,720 Speaker 1: been a genius on the stock, and even he said, 379 00:21:46,200 --> 00:21:48,560 Speaker 1: you know, we're flying blind. It does make sense that 380 00:21:48,600 --> 00:21:50,480 Speaker 1: a lot of them have suspended their ratings because you 381 00:21:50,520 --> 00:21:53,080 Speaker 1: just don't know when numbers you're really working with. But 382 00:21:53,920 --> 00:21:55,399 Speaker 1: so I do get why a lot of them are 383 00:21:55,440 --> 00:21:59,840 Speaker 1: now just holding off on on on ratings. Well, thank 384 00:21:59,840 --> 00:22:02,440 Speaker 1: you so much, Cynthia Coon's I think I learned nothing 385 00:22:02,440 --> 00:22:05,840 Speaker 1: about Valiant there, because you know, Cynthia, it's not her fault. 386 00:22:06,320 --> 00:22:10,119 Speaker 1: I don't think we know Valiant shares up to seven Twitter. 387 00:22:10,400 --> 00:22:12,840 Speaker 1: She's driven the stock down a stick just sitting here. 388 00:22:13,040 --> 00:22:17,680 Speaker 1: Twitter at one on their NFL deal, Facebook down by 389 00:22:17,680 --> 00:22:21,160 Speaker 1: almost two. Cystia Coons will go off to some conference 390 00:22:21,160 --> 00:22:24,760 Speaker 1: call somewhere and make us smarter on Valiant. This is 391 00:22:24,800 --> 00:22:26,120 Speaker 1: Bloomberg's surveillance.