WEBVTT - Surveillance: Europe Better Off Without the Euro, Bootle Says 0:00:09.880 --> 0:00:13.800 Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Lee. 0:00:13.960 --> 0:00:17.560 We bring you insight from the best in economics, finance, investment, 0:00:18.000 --> 0:00:23.520 and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 0:00:23.600 --> 0:00:33.879 Bloomberg dot Com, and of course on the Bloomberg. What 0:00:34.000 --> 0:00:36.479 we're about is good conversation. On on Friday, you have 0:00:36.560 --> 0:00:38.319 to sum up and get ready for next week. We've 0:00:38.360 --> 0:00:41.360 got a terrific team with us right now. Morse Read 0:00:41.440 --> 0:00:43.839 with us, John Norman with us as well, and now 0:00:43.840 --> 0:00:46.760 Anthony Gardner joins. He's a former United States Ambassador of 0:00:46.760 --> 0:00:49.519 the European Union. We are Thrilledi's with us. He speaks 0:00:49.560 --> 0:00:51.680 to six languages. I wish I could speak and he 0:00:51.760 --> 0:00:54.680 joins us this morning as well. What's the secret to 0:00:54.800 --> 0:00:58.480 learning five languages? What is the secret? Having an Italian 0:00:58.520 --> 0:01:07.200 mother helps? And you're having an Italian mother? Goes Okay, 0:01:07.240 --> 0:01:10.080 we can stop the show right now, move on Morris 0:01:10.080 --> 0:01:13.759 Streets segment. Okay, Anthony, we are here in Klaus Schwab 0:01:13.800 --> 0:01:16.959 in the World Economic Forum has decided we're having globalization 0:01:17.080 --> 0:01:20.200 four point oh. Has there been a shift in the 0:01:20.240 --> 0:01:25.440 concept of globalization in politics and in economics. Oh, I 0:01:25.480 --> 0:01:28.200 think there has been there's been a move in many countries, 0:01:28.240 --> 0:01:30.759 not on the States, but in Europe of of being 0:01:30.800 --> 0:01:35.800 inward looking and basically challenging the precepts of an open 0:01:35.840 --> 0:01:39.479 world trading system and a rules based multilateral order. That's 0:01:39.480 --> 0:01:42.240 what's now on the agenda began decide talks about the 0:01:42.280 --> 0:01:46.560 death of the liberal orders, define that define the Washington 0:01:46.640 --> 0:01:50.400 Consensus liberal order, and how it's changed. Well, certainly the 0:01:50.440 --> 0:01:53.400 importance of rules like the w t O, of the 0:01:53.480 --> 0:01:58.160 multilateral system, international law as a way to deal with disputes. 0:01:58.520 --> 0:02:00.600 And now one country after an they're not only the 0:02:00.680 --> 0:02:04.600 United States has invoked national security exemption, but others Russia 0:02:04.680 --> 0:02:07.720 and Saudi Arabia are now saying, once we invoke our 0:02:07.760 --> 0:02:11.760 own interests national security, otherwise rules don't apply. Judges can't 0:02:11.840 --> 0:02:15.760 rule on disputes. That undermines a lot of the basis 0:02:15.840 --> 0:02:18.200 for a free, open trading system. More so, are we 0:02:18.400 --> 0:02:22.200 less multilateral now than we were the pre Trump election? Yeah, 0:02:22.240 --> 0:02:25.840 we're much more personality driven, But there are opportunities and 0:02:25.880 --> 0:02:29.640 personality driven you know, situations if you look at some 0:02:29.720 --> 0:02:31.680 of the strong man that this is where well, at 0:02:31.720 --> 0:02:34.080 the beginning of the Trump administration. We advise our clients 0:02:34.080 --> 0:02:35.560 that if you really wanted to get close to him, 0:02:35.560 --> 0:02:38.079 you need to appeal to his ego. Right. That doesn't 0:02:38.080 --> 0:02:40.160 necessarily mean you're going to get everything you want, but 0:02:40.560 --> 0:02:43.640 having the seat at the table it's important, particularly when 0:02:43.639 --> 0:02:45.840 you're dealing with a guy that looks from his advantage 0:02:45.840 --> 0:02:49.880 points first. So are we less absolutely, But are there opportunities? 0:02:50.120 --> 0:02:53.240 For sure, there's opportunities. Okay, But but togatherings like Davos 0:02:53.320 --> 0:02:59.600 actually give ammunition to the populists. Well they might, indeed, 0:02:59.639 --> 0:03:01.840 But I think Dallas has tried to open up to 0:03:02.200 --> 0:03:04.240 just not the you know, not just the business community, 0:03:04.240 --> 0:03:06.320 but others NGOs. They've been doing it for a while 0:03:06.400 --> 0:03:09.519 and they're continuing to emphasize the importance of other stakeholders 0:03:09.520 --> 0:03:12.360 in the system. So they are opening up and listening. 0:03:12.560 --> 0:03:15.079 But Babbos wants the populace there as well. They want 0:03:15.120 --> 0:03:18.320 Donald Trump there. They wanted to ains and vict Urban 0:03:18.600 --> 0:03:22.040 because when you ignore them, this is how things fall apart. 0:03:22.320 --> 0:03:24.360 You have to engage. Well, if someone wants to go 0:03:24.480 --> 0:03:25.920 left for someone wants to go right, you still have 0:03:25.960 --> 0:03:28.920 to engage because there are always opportunities to make a 0:03:28.960 --> 0:03:31.760 deal and when people described to ignore him. This is 0:03:31.800 --> 0:03:33.720 why the Democrats are having a lot of problems. They're 0:03:33.720 --> 0:03:36.280 ignoring him instead of engaging him. They're getting emotional about 0:03:36.360 --> 0:03:39.240 him then looking strategically. When you look at opportunities and 0:03:39.280 --> 0:03:43.600 focus solely on that, you get things done. I think 0:03:43.600 --> 0:03:46.160 that's absolutely right. This is a very fine, difficult line 0:03:46.200 --> 0:03:48.760 for the Democrats and others to to to demand to 0:03:48.800 --> 0:03:51.640 manage how do we look and be tough and to 0:03:52.200 --> 0:03:54.840 engage with the European allies and and say to the 0:03:54.920 --> 0:03:57.960 Chinese you need to reform, but at the same time 0:03:58.040 --> 0:04:02.640 defend the system. It we built up together, right, and 0:04:02.640 --> 0:04:06.200 and the system has benefited us beyond any other country, 0:04:06.240 --> 0:04:08.119 but we're not making that case in a good way. 0:04:08.280 --> 0:04:11.320 Really important. This idea of be tough and the definition 0:04:11.400 --> 0:04:12.960 and be tough, and it's an honor to go to 0:04:12.960 --> 0:04:15.440 you Mores. I think of Ron Brown is a tough 0:04:15.520 --> 0:04:18.480 kid out of Harlem. He had some opportunities and then 0:04:18.480 --> 0:04:21.000 he landed at Middlebury College, the only black guy in 0:04:21.080 --> 0:04:23.440 Vermont from what I could tell at the time, and 0:04:23.560 --> 0:04:27.760 he learned along the way a pragmatic approach, which was 0:04:27.800 --> 0:04:30.640 the Ron Brown method. You've done the same thing and 0:04:30.760 --> 0:04:33.839 your career. Where did the pragmatic approach go to an 0:04:33.880 --> 0:04:37.279 America and shut down that won't even attend AVOs? Well, 0:04:37.320 --> 0:04:40.840 it started when people start to focus on personality, selfishness 0:04:40.839 --> 0:04:44.120 as well, personalities driven in politics instead of getting things 0:04:44.120 --> 0:04:46.240 done for people. Listen, well, we were in government, we 0:04:46.240 --> 0:04:48.000 did a lot of things. We didn't have to beat 0:04:48.000 --> 0:04:50.120 our chest about them. We got them done for the 0:04:50.160 --> 0:04:52.720 benefit of things. Now you have a situation where people 0:04:52.720 --> 0:04:56.720 are very focused on themselves first and ultimately where things go. 0:04:56.920 --> 0:04:58.839 But Morris, it also gets people to vote when they 0:04:58.880 --> 0:05:02.320 haven't voted in ten years. So Twitter, social media is 0:05:02.320 --> 0:05:04.760 a tool to get people to vote. This is very 0:05:04.800 --> 0:05:07.920 interesting and this is an interesting point. Hillary Clinton still 0:05:08.000 --> 0:05:10.600 got more votes than Donald Trump. This is what people 0:05:10.680 --> 0:05:13.719 keep forgetting right. The reason she lost is because she 0:05:13.839 --> 0:05:17.400 ran a populace campaign instead of electoral college campaign. So 0:05:17.440 --> 0:05:20.119 this whole thesis about being on Twitter and all these 0:05:20.160 --> 0:05:22.320 crazy things just because you're on Twitter and you have 0:05:22.360 --> 0:05:27.240 a lot of following Democratic candidates for two twenty learn 0:05:27.320 --> 0:05:29.679 anything from the election? Are you going to run for president? 0:05:29.720 --> 0:05:35.280 All everybody else is in They learn from Secretary Clinton's tobacco. No, 0:05:35.400 --> 0:05:38.159 of course, not what they're doing is going too far 0:05:38.240 --> 0:05:39.960 to the left. So you look at some of these 0:05:40.040 --> 0:05:43.480 younger rising stars where everyone's saying, we gotta be on Twitter, 0:05:43.560 --> 0:05:45.560 We've got to act like Trump. Now, how you win. 0:05:45.680 --> 0:05:48.200 You know how you won elections. You talk about issues 0:05:48.240 --> 0:05:51.120 that matter, You put together strategies that matter. And this 0:05:51.160 --> 0:05:53.120 is why the Democrats have to have a strategy in 0:05:53.120 --> 0:05:55.480 the House or they're gonna lose. I agree they look 0:05:55.520 --> 0:05:59.400 the asset test is are we making America stronger? Are 0:05:59.440 --> 0:06:02.120 we supporting the interests of our exporters, are farmers and 0:06:02.120 --> 0:06:05.640 our ranches and so forth? My view, my conclusion about 0:06:05.640 --> 0:06:08.480 the Trump tactics is no, we are not. I'm all 0:06:08.520 --> 0:06:10.680 four tactics at work. I'm all for opening up the 0:06:10.760 --> 0:06:13.600 Chinese market, bringing more cases w t O with our 0:06:13.600 --> 0:06:16.720 European allies. I I just think the American elector will 0:06:16.760 --> 0:06:21.680 have to ask the question, are these tactics working administration? 0:06:21.760 --> 0:06:23.920 This is why this is exactly why I believe it's 0:06:23.960 --> 0:06:25.840 going to be shut down for six months, because the 0:06:26.080 --> 0:06:29.159 very people that that you outline that this is supposed 0:06:29.160 --> 0:06:32.479 to help, it's hurting them. They haven't psychologically gotten there. 0:06:32.600 --> 0:06:34.640 It will take six months. Norman, give us the background 0:06:34.720 --> 0:06:36.680 here and take a green book I am f F 0:06:36.720 --> 0:06:41.159 approach on the global financial stability. Given his comment of 0:06:41.160 --> 0:06:43.599 a shutdown for six months and the tensions that the 0:06:43.600 --> 0:06:47.400 ambassadors speaks, do we have a system that can withstand this? Uh? 0:06:47.560 --> 0:06:49.440 It depends on the country, and it depends on the 0:06:49.480 --> 0:06:51.400 type of shock. I think what makes a lot of 0:06:51.400 --> 0:06:55.080 these discussions highly relevant from markets is every election is 0:06:55.120 --> 0:06:58.159 not just about policies, it's about the system itself. And 0:06:58.160 --> 0:07:00.200 so that's why you have this pricing and of team 0:07:00.279 --> 0:07:02.760 changes and actual regime changes which are coming through with 0:07:02.760 --> 0:07:05.200 Trump and also with with Brexit. These are things that 0:07:05.240 --> 0:07:07.440 we haven't seen in thirty or forty years in the 0:07:07.480 --> 0:07:10.200 global economy, and that's why you're getting tremendous repricings of 0:07:10.240 --> 0:07:12.600 markets around a lot of these events. John, what's relevant 0:07:12.600 --> 0:07:15.080 for markets and devils? So, so President Trump is not coming, 0:07:15.120 --> 0:07:17.640 No one from his administration is coming. The French president 0:07:17.680 --> 0:07:19.440 isn't coming. Three so May had to cancel it because 0:07:19.440 --> 0:07:23.760 she's negotiating a possible plan exit. Um, Tom's not going 0:07:23.760 --> 0:07:26.360 to move the markets. So what are you looking for? Well, 0:07:26.520 --> 0:07:28.840 my guess is the big stuff is happening off the slopes, 0:07:28.960 --> 0:07:30.760 meaning it matters what the US and China are gonna 0:07:30.760 --> 0:07:32.920 be saying to each other outside of Davos over the 0:07:32.960 --> 0:07:35.320 next few weeks leading up to this March. Personal banks, 0:07:36.040 --> 0:07:40.600 central banks, I think are acting in a uncoordinated fashion, 0:07:40.640 --> 0:07:42.920 but in the same direction. I mean, they're all turning dubbish. 0:07:43.000 --> 0:07:45.760 But not because they've gathered in one place and decided 0:07:45.800 --> 0:07:48.240 this is the right policy systemically. It's because it's the 0:07:48.320 --> 0:07:51.000 right policy for each individual economy. The choice we've got 0:07:51.000 --> 0:07:53.840 to go or we can extend this conversation three hours. 0:07:55.400 --> 0:07:57.160 If they want to make news, they should be focusing 0:07:57.200 --> 0:07:58.640 on who should be the head of the World Bank, 0:07:58.640 --> 0:08:00.360 and I should make sure it's a woman, and I 0:08:00.400 --> 0:08:05.040 don't matter, all right. Actually that's as they say, would 0:08:05.040 --> 0:08:07.480 you guys? Shut up? Tony Gardner from were you as 0:08:07.520 --> 0:08:09.920 a pastor to the you Morris Freed of Mercury Partners 0:08:09.920 --> 0:08:27.600 and John Norman of JP Morgan. Let's bring a Jude in. 0:08:27.600 --> 0:08:31.520 Emmanuel bt G, Chief Equities and derivative Strategist, Good morning 0:08:31.560 --> 0:08:36.160 to Julian. You're morning on the try story. Please. Well, look, 0:08:36.240 --> 0:08:40.320 so China is coming to Washington at the end of 0:08:40.360 --> 0:08:43.640 the month, So in our view, everything between now and 0:08:43.679 --> 0:08:47.240 then is probably just to and fro jockeying for position. 0:08:47.559 --> 0:08:51.040 The negotiations are going to happen, we expect at some 0:08:51.240 --> 0:08:55.400 point heading towards March, there's going to be favorable uh, 0:08:56.200 --> 0:09:01.360 not necessarily resolution, but certainly favorable news that's going to 0:09:01.400 --> 0:09:04.319 ease tensions in despite the denial. We've got a taste 0:09:04.320 --> 0:09:06.080 of what it would mean for the market, both in 0:09:06.160 --> 0:09:09.480 equity and foreign exchange, quite clearly positive for stocks and 0:09:09.559 --> 0:09:12.080 negative for the U. S. Dollar. To what degree do 0:09:12.120 --> 0:09:15.200 you think that the trade story can drive things sustainably 0:09:15.480 --> 0:09:21.839 through Well, it actually can be a very profound positive. 0:09:22.000 --> 0:09:26.880 The story of the fourth quarter of eighteen was one 0:09:26.920 --> 0:09:31.360 of just intense negativity, and clearly the frictions with China 0:09:31.679 --> 0:09:36.360 really did, you know, compound what we're already other items, um, 0:09:36.480 --> 0:09:40.440 including this whole idea that the global slowdown was certainly 0:09:40.760 --> 0:09:45.800 very much caused by these trade frictions. The disinflation story 0:09:46.200 --> 0:09:49.200 now literally you've gone from the glass half empty to 0:09:49.320 --> 0:09:53.839 the glass half full. People find themselves under invested, things 0:09:53.880 --> 0:09:56.880 look better, The FED is is really eased off, and 0:09:56.920 --> 0:10:00.280 we think that's a material positive. Good news is now 0:10:00.360 --> 0:10:04.040 starting to become good news, and we're seeing stocks respond accordingly, 0:10:04.240 --> 0:10:06.280 some people are pushing ban Julian. They say, whether a 0:10:06.360 --> 0:10:09.920 deal is sufficient to underpin sentiment in the long run, 0:10:10.360 --> 0:10:12.920 that remains questionable, because what we really need to see 0:10:13.000 --> 0:10:14.880 is the data are in China stabilize, And what we 0:10:14.920 --> 0:10:17.720 haven't seen so far is exactly that you can have 0:10:17.800 --> 0:10:22.880 the sentiment improve, but do you have the fundamentals improved simultaneously. Julian, Uh, 0:10:23.080 --> 0:10:25.560 there's no question about the fact that the data does 0:10:25.640 --> 0:10:29.120 need to improve in China. And obviously, you know, part 0:10:29.160 --> 0:10:31.960 of what we as global investors have to deal with 0:10:32.160 --> 0:10:35.440 is that there's always a bit of a view that 0:10:35.559 --> 0:10:38.640 the data is somewhat opaque in China. But if you 0:10:38.679 --> 0:10:41.160 look at how the last year has developed, it really 0:10:41.160 --> 0:10:47.680 has sort of trended in a classic way that global recessions, 0:10:47.720 --> 0:10:52.480 stock market tops and then ultimate recoveries off of stimulus 0:10:52.679 --> 0:10:56.640 tend to proceed. The question is is is China willing 0:10:56.720 --> 0:11:00.920 to do sort of whatever it takes stimulus wise to 0:11:01.080 --> 0:11:04.720 really move their economy forward. We think that ultimately is 0:11:04.760 --> 0:11:07.280 the year unfalls, the answer is likely to be yes. Well, 0:11:07.280 --> 0:11:09.800 the market is also making that conclusion. The market pricing 0:11:09.800 --> 0:11:14.760 increasingly for a stability story emerging in China and positioning 0:11:14.800 --> 0:11:17.640 for that as well. Juden, how do you convince people 0:11:17.840 --> 0:11:20.120 that this is more than just a relief rally for 0:11:20.200 --> 0:11:25.520 an ugly December. Well, truthfully, this is one of these times, John, 0:11:25.640 --> 0:11:30.760 where essentially, as investors, we are paid to invest, and 0:11:31.040 --> 0:11:34.600 the price action of the last three to four weeks 0:11:35.000 --> 0:11:40.240 is telling an investor that that conditions are better, certainly 0:11:40.280 --> 0:11:44.000 more favorable than was appeared at the end of the year. 0:11:44.520 --> 0:11:49.240 And essentially what we have, particularly after the SMP crossed 0:11:49.280 --> 0:11:53.760 through that level, is pressure to perform, which I might 0:11:53.800 --> 0:11:56.880 add is very rare this early in the year, and 0:11:57.000 --> 0:12:00.720 that's likely something that's going to cause momentum to continue 0:12:00.720 --> 0:12:02.839 to move forward. Julian, that's the international story that we 0:12:02.920 --> 0:12:05.000 spent the first five minutes of the program talking about. 0:12:05.080 --> 0:12:08.480 Let's talk about the domestic story in the United States. 0:12:08.920 --> 0:12:11.960 Is it the shutdown shaping the market story eventually or 0:12:12.040 --> 0:12:14.680 is the market shaping the shutdown? And the reason I 0:12:14.760 --> 0:12:17.439 asked this is we've seen several reports and a ton 0:12:17.480 --> 0:12:20.640 of speculation that the President is comfortable with the length 0:12:20.640 --> 0:12:22.880 of the shutdown and its impact on the U S 0:12:22.920 --> 0:12:26.280 economy just so long as the market holds up. So 0:12:26.320 --> 0:12:28.240 it's the shutdown going to hit the market or is 0:12:28.240 --> 0:12:31.960 the market essentially shaping the shutdown Julian, which one is it? Well, 0:12:32.280 --> 0:12:35.280 if you look at past shutdowns, they tend to have 0:12:36.000 --> 0:12:39.400 very little effect on the market. But what's potentially different 0:12:39.480 --> 0:12:43.640 this time is because the measures a sentiment, the confidence 0:12:43.679 --> 0:12:47.040 measures were so elevated for such a long time in 0:12:48.160 --> 0:12:51.280 and then along came the fourth quarter and those measures 0:12:51.280 --> 0:12:54.800 started to come off. You know, you're at a point where, yes, 0:12:54.960 --> 0:12:58.880 obviously people are under invested, Yes the economy looks better 0:12:58.920 --> 0:13:02.800 than everyone expected, but it's very important to keep confidence 0:13:02.840 --> 0:13:07.000 elevated really to keep economic activity sort of moving along. 0:13:07.320 --> 0:13:10.960 And in that respect, you know, obviously both the Republicans 0:13:11.040 --> 0:13:14.160 and the Democrats seem to not be carrying out the 0:13:14.200 --> 0:13:17.240 will of the people by keeping the government closed. We 0:13:17.320 --> 0:13:21.200 think ultimately that will resolve itself as well. But it 0:13:21.320 --> 0:13:25.480 really is one of those things where the disconnect between 0:13:25.480 --> 0:13:30.200 the government and and and the stock market should remain 0:13:30.280 --> 0:13:32.439 that way. And and we did a lot of work 0:13:32.760 --> 0:13:36.680 that shows that gridlock is not positive for markets. You 0:13:36.800 --> 0:13:39.160 just have this sent an extreme of the fourth quarter, 0:13:39.440 --> 0:13:42.880 and you're seeing a rally that makes sense whether there 0:13:43.040 --> 0:13:46.360 is or is not continue government shutdown, Julian. There is 0:13:46.360 --> 0:13:48.040 a belief that they fed as in a holding pattern 0:13:48.120 --> 0:13:50.600 until the market has sounded the old Claire. I think 0:13:50.640 --> 0:13:53.000 it's morphed into something a little bit more than that now, Julian, 0:13:53.040 --> 0:13:55.040 because I don't think we're gonna get a clean month 0:13:55.120 --> 0:13:58.240 of data for the US economy for several months now. 0:13:58.280 --> 0:14:00.880 I'll wait the Federal Reserve. Surely count think about moving 0:14:01.200 --> 0:14:03.760 without a clean month of economic data, or two or 0:14:03.760 --> 0:14:07.200 three for that matter, for the U s economy. No. 0:14:07.559 --> 0:14:11.120 And and look, if you look at the president's own economists, 0:14:11.160 --> 0:14:15.720 their estimates of how much the economy UH could slow 0:14:16.200 --> 0:14:20.240 based on the government shutdown are actually somewhat higher than 0:14:20.320 --> 0:14:23.400 private estimates. And in that regard, you know, we think 0:14:23.440 --> 0:14:26.400 the FED, we take the Chairman Powell at his word 0:14:26.440 --> 0:14:30.080 in that public appearance on January the fourth, we actually 0:14:30.240 --> 0:14:32.760 don't believe that there's going to be a rate hike 0:14:33.160 --> 0:14:36.960 UH this entire year. And actually, if we're wrong, we 0:14:37.040 --> 0:14:40.280 think that the economy will will surprise to the upside, 0:14:40.720 --> 0:14:43.560 not only in the US but globally as well. The 0:14:44.000 --> 0:14:47.280 FED saw what happened in the fourth quarter. The last 0:14:47.280 --> 0:14:50.240 thing they want to do is precipitate a recession. There 0:14:50.320 --> 0:14:54.680 sufficient geopolitical risk such that it makes even more sense 0:14:54.920 --> 0:14:57.160 to be patients. So Judy and the Federal Reserve is 0:14:57.200 --> 0:14:58.920 going to be more accommodative. And the final point I 0:14:58.920 --> 0:15:01.080 want to explore his whether Washington, d C. And the 0:15:01.120 --> 0:15:04.240 political story can also be accommodative. At the same time, 0:15:04.440 --> 0:15:06.800 we've had a massive towel wind for this market from 0:15:06.800 --> 0:15:09.040 the tax cut. There was some hope that the story 0:15:09.040 --> 0:15:12.560 would shift towards some kind of bipartisan push around infrastructure. 0:15:12.840 --> 0:15:16.880 Headlines just crops from Reuters saying that the Trump administration, 0:15:16.920 --> 0:15:21.080 together with Cabinat officials have discussed infrastructure. Is that a 0:15:21.080 --> 0:15:26.760 pipe during Julian Uh, Well, in in the current Washington climate, 0:15:26.840 --> 0:15:32.600 anything with the phrase bipartisan is probably somewhat excessively hopeful. 0:15:33.080 --> 0:15:37.120 That having been said, Uh, you know, as an incumbent, 0:15:37.360 --> 0:15:40.680 whether you're a Democrat or Republican, you're going to get 0:15:40.720 --> 0:15:42.760 to the middle of the year and you're going to 0:15:42.800 --> 0:15:45.600 see that the next election cycle is close at hand. 0:15:46.040 --> 0:15:49.920 So from that regard, you could have action moving towards 0:15:50.120 --> 0:15:54.600 infrastructure later in the year, particularly if the economy and 0:15:54.640 --> 0:15:58.520 the tax receipts hold up better. Than expected, such that 0:15:58.640 --> 0:16:01.560 the deficit doesn't continu new blowing out. Hey, Julian, loved 0:16:01.560 --> 0:16:03.920 the piece of research that just crossed across my desk 0:16:04.040 --> 0:16:06.520 from from my team, from you and the team over 0:16:06.520 --> 0:16:09.120 at bt i G. The wall is built, but you're 0:16:09.160 --> 0:16:11.440 not talking about the wall on the southern border. Is 0:16:11.480 --> 0:16:13.640 the good news enough to keep on climbing? And from 0:16:13.680 --> 0:16:16.680 what you've said so far, I can conclude, Julian that 0:16:16.720 --> 0:16:19.520 you think it is bt i G Chief Equity and 0:16:19.560 --> 0:16:22.520 to riversist strategist joining us here in New York, Julian 0:16:22.560 --> 0:16:24.720 Emmanuel to run us through some of the price action. 0:16:38.920 --> 0:16:41.080 There are times where a book comes across the desk 0:16:41.080 --> 0:16:43.520 where you say, okay, we're gonna talk about economics and 0:16:43.560 --> 0:16:47.040 international relations and the markets that we're gonna promote. John 0:16:47.080 --> 0:16:49.560 Farrell's The Real Yield. And there's other times you have 0:16:49.600 --> 0:16:51.200 to just rip it up and talk about the book. 0:16:51.240 --> 0:16:54.120 We'll do that in a moment. Peppermagram joins us, of course, 0:16:54.600 --> 0:16:59.240 on international economics, she served under the younger George Bush 0:16:59.640 --> 0:17:04.080 and joins us now, but just quickly here on international economics, 0:17:04.480 --> 0:17:07.280 Klaus Schwab has trotting trotting out the idea this year 0:17:07.640 --> 0:17:12.080 of globalization four point oh hyphen what it means and 0:17:12.119 --> 0:17:17.880 how it could benefit us. All that pushes massively against 0:17:17.880 --> 0:17:21.960 the zeitgeist, the populism, which says, wait a minute, globalization 0:17:22.440 --> 0:17:27.040 is not benefiting all, doesn't it. Yeah, But I agree 0:17:27.080 --> 0:17:29.480 with kush Slob on that one, and I think people 0:17:29.480 --> 0:17:33.920 are underestimating how much innovation is occurring and how many 0:17:33.960 --> 0:17:38.080 people can participate and be in that innovation. Uh So 0:17:38.160 --> 0:17:40.760 I have a very optimistic outlook for the world economy 0:17:40.800 --> 0:17:44.320 of the moment. I have to say, how is globalization 0:17:44.800 --> 0:17:49.159 different from Joseph Stiglett's discontent in his book of a 0:17:49.200 --> 0:17:55.000 decade ago, Globalization and It's Discontent. So Josephs view was 0:17:55.040 --> 0:17:58.600 there were all these people being left behind. I think 0:17:58.640 --> 0:18:02.399 what we're actually is that there's a community of people 0:18:02.480 --> 0:18:04.880 who can't get on accord with where the world economy 0:18:04.960 --> 0:18:07.479 is going. But that doesn't mean that they have to 0:18:07.480 --> 0:18:11.520 be left behind. So for example, automation, everybody assumes automation 0:18:11.600 --> 0:18:15.280 robotics equals unemployment, but in fact what we're seeing is 0:18:15.320 --> 0:18:17.520 since eighteen o four, in the introduction of the very 0:18:17.600 --> 0:18:21.000 first robotic, which was the Jackard weaving room, we've had 0:18:21.040 --> 0:18:24.919 nothing but more employment, in fact, record employment in China, 0:18:25.320 --> 0:18:28.560 record employment in the United States, in spite of or 0:18:28.600 --> 0:18:31.600 in fact, I would argue because of it. So then 0:18:31.640 --> 0:18:34.880 the issue isn't that they're left behind because they can't. 0:18:35.280 --> 0:18:38.320 It's because you won't let the door open. So here's 0:18:38.359 --> 0:18:40.560 my question for CEO is when's the last time you 0:18:40.680 --> 0:18:43.639 hired someone who didn't have a college degree. Because those 0:18:43.720 --> 0:18:47.159 people are not stupid, they're just not allowed in. And 0:18:47.280 --> 0:18:51.000 that's the problem I usually, folks. Here I continue with 0:18:51.040 --> 0:18:54.240 Pippa on economics, finance, investment. But Pippa, you've hit the 0:18:54.280 --> 0:18:57.080 home run with Chris Lewis with your new book, The 0:18:57.160 --> 0:19:01.159 Leadership Lab. Folks, this is a revolution very book. It 0:19:01.320 --> 0:19:04.720 reads two d pages, it feels like eight hundred pages 0:19:04.920 --> 0:19:08.879 because it is so dense with Bursted one page and 0:19:08.960 --> 0:19:12.640 two page thoughts like it will go from a booming 0:19:12.680 --> 0:19:16.359 stock market to it's the same whole world over, living 0:19:16.359 --> 0:19:19.320 in the present but destroying the future, etcetera, etcetera. Pippa, 0:19:19.359 --> 0:19:24.600 you open The Leadership Lab with what every single listener feels, 0:19:25.080 --> 0:19:28.720 and that is the information overload today? How do you 0:19:28.800 --> 0:19:34.040 move forward? Given the information overload today? So the first 0:19:34.040 --> 0:19:37.480 thing is everybody is so analytical and they have to 0:19:37.520 --> 0:19:41.160 be more parenthetical. And what that means just less focused 0:19:41.200 --> 0:19:44.560 on the data and more focused on how people are feeling, 0:19:45.000 --> 0:19:48.560 less on the numbers, and more on looking across the 0:19:48.640 --> 0:19:52.080 landscape and understanding what's the zeitgeist. And I think this 0:19:52.240 --> 0:19:54.560 is something that a lot of our business leaders and 0:19:54.680 --> 0:19:58.600 political leaders actually very good at. They're kind of disconnected 0:19:58.640 --> 0:20:01.439 from the zeitgeist. Chef Ray, you go to Richard Edelman, 0:20:01.440 --> 0:20:03.960 folks will be speaking. I believe with Mr Edelman and 0:20:04.000 --> 0:20:07.000 as Edelman trust parameter, we do that every year in Davos. 0:20:07.040 --> 0:20:10.320 It's my it's my must read of the year. Just fabulous. 0:20:10.359 --> 0:20:13.360 Fifty six pages from Edelman. And you go right where 0:20:13.440 --> 0:20:16.440 Richard Edelman is, Pippo Magram. You say, can we trust 0:20:16.520 --> 0:20:20.000 our leaders? How's our trust measurement with our leaders? Right now? 0:20:20.000 --> 0:20:22.520 I'm looking at Brexit and I'm looking at the shutdown. 0:20:23.760 --> 0:20:26.399 It's not going very well. And it's like the only 0:20:26.560 --> 0:20:31.680 category of leadership where public trust has remained high, interestingly 0:20:32.080 --> 0:20:36.359 give the military and so definitely our leaders need to 0:20:36.480 --> 0:20:40.400 change how they're interfacing with the public's say, if they 0:20:40.480 --> 0:20:43.800 still feel entightened to the public's trust instead of that 0:20:43.880 --> 0:20:47.639 they have to earn it. That's a totally different mindset, Pippa. 0:20:47.920 --> 0:20:49.919 You end your book with what's been the heart and 0:20:49.960 --> 0:20:52.720 soul of my work at Bloomberg, which is the a 0:20:52.960 --> 0:20:57.919 historical society and a complete understand a misunderstanding of history. 0:20:58.160 --> 0:21:00.760 I would you know suggest parenthetic be Folks. It's worse 0:21:00.800 --> 0:21:04.000 in America than it is over here in England. Are 0:21:04.080 --> 0:21:07.320 we getting more historical now? With the crisis ten years 0:21:07.359 --> 0:21:10.880 ago and with a political crisis now in so many nations? 0:21:11.080 --> 0:21:15.160 Are we beginning to learn our history? You know, I'm 0:21:15.200 --> 0:21:17.639 not sure that we are. I think what happens instead 0:21:18.040 --> 0:21:22.560 is a new generation of both business and political leaders 0:21:22.680 --> 0:21:25.879 isn't emerging, and they have a new on how we 0:21:25.960 --> 0:21:28.040 solve problems. We just saw about it in the election. 0:21:28.920 --> 0:21:32.000 All than these new members of Congress, a lot of women, 0:21:32.480 --> 0:21:35.800 may be people who had no political background. So instead 0:21:35.800 --> 0:21:38.800 of going back, what we're doing is going forward. And 0:21:38.880 --> 0:21:41.000 the people who are trying to live in the past 0:21:41.040 --> 0:21:45.600 in a nostalgic environment are so surely being eased off stage. Pippa. 0:21:45.720 --> 0:21:48.080 One final thought, and this, I think, Folks, is really 0:21:48.119 --> 0:21:53.280 subtle in office, but not in power. The leadership presumption 0:21:53.800 --> 0:21:57.879 of winning a democratic election, but you're not quote unquote 0:21:57.920 --> 0:22:02.359 in power. Discussed that, yeah, And I think this is 0:22:02.440 --> 0:22:05.679 the thing that everybody feels is like I've got a 0:22:05.720 --> 0:22:08.679 boss upstairs. He's in office, but he isn't a power. 0:22:08.800 --> 0:22:11.399 He doesn't actually know what's happening in the company or 0:22:11.440 --> 0:22:14.399 in the country. And what we need is for people 0:22:14.440 --> 0:22:16.920 to be in office who have power, but that has 0:22:16.960 --> 0:22:21.120 to be earned. And so heavily described how you can 0:22:21.160 --> 0:22:24.600 restore the trust and your employees, your clients and customers, 0:22:24.600 --> 0:22:28.240 your voters. Can't say leadership. I can't say enough about 0:22:28.240 --> 0:22:30.000 this as an airplane book, and folks, I'm not going 0:22:30.040 --> 0:22:33.199 to mince words about it. The Leadership Lab was built 0:22:33.280 --> 0:22:36.399 to be downloaded on Kindle or you dip into it, 0:22:36.520 --> 0:22:39.560 dive into just so Pippamagram and Chris Lewis could get 0:22:39.560 --> 0:22:42.600 your brain going on some of the linkages here of 0:22:42.720 --> 0:22:47.119 media communication technology with what Pip is so good at, 0:22:47.160 --> 0:22:50.520 which is just fundamental economics. Pippamagram, thank you so much, 0:22:50.560 --> 0:22:53.560 greatly appreciated the Leadership Lab. I'll put that out on 0:22:53.640 --> 0:23:12.000 social right now. John, I'm gonna bring in Roger Boodle, 0:23:12.320 --> 0:23:14.440 but you lead it off with Mr bruddle because I 0:23:14.520 --> 0:23:18.200