1
00:00:02,640 --> 00:00:05,600
Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul Sweeney. Along

2
00:00:05,600 --> 00:00:07,760
Speaker 1: with my co host Lisa Brahma Waits. Each day we

3
00:00:07,880 --> 00:00:10,399
Speaker 1: bring you the most noteworthy and useful interviews for you

4
00:00:10,520 --> 00:00:12,640
Speaker 1: and your money. Whether at the grocery store or the

5
00:00:12,640 --> 00:00:15,960
Speaker 1: trading floor, find a Bloomberg penl podcast on Apple podcast

6
00:00:16,120 --> 00:00:18,040
Speaker 1: or wherever you listen to podcasts, as well as at

7
00:00:18,079 --> 00:00:23,920
Speaker 1: Bloomberg dot com. It's hard to pinpoint the biggest hot

8
00:00:23,960 --> 00:00:27,440
Speaker 1: spot that we ought to be paying attention to, Paul Sweeney. Luckily,

9
00:00:27,480 --> 00:00:30,000
Speaker 1: we have Jack Divine here to go through them all

10
00:00:30,000 --> 00:00:32,400
Speaker 1: with us. He is the founding partner and president of

11
00:00:32,440 --> 00:00:35,960
Speaker 1: the ark And Group, also former chief of the CIA's

12
00:00:36,040 --> 00:00:39,400
Speaker 1: worldwide operations, joining us here in our Bloomberg Adder Active

13
00:00:39,440 --> 00:00:42,519
Speaker 1: Broker's studios. Jack, we love having you. Thank you for

14
00:00:42,640 --> 00:00:45,600
Speaker 1: being here. I want to start with Venezuela because a

15
00:00:45,720 --> 00:00:48,560
Speaker 1: lot of people are pinpointing the fact that it's become

16
00:00:48,800 --> 00:00:52,240
Speaker 1: sort of a proxy location for a battle for supremacy

17
00:00:52,360 --> 00:00:55,800
Speaker 1: between Russia and China on one hand and the US

18
00:00:55,960 --> 00:00:58,800
Speaker 1: on the other. And I'm wondering, from your perspective, how

19
00:00:59,000 --> 00:01:02,640
Speaker 1: valid is it to view the conflict in Venezuela currently

20
00:01:03,000 --> 00:01:06,080
Speaker 1: through that lens at Lisa. As you know, I'm a

21
00:01:06,160 --> 00:01:09,320
Speaker 1: Cold warrior, unreformed if you will, and if you if

22
00:01:09,400 --> 00:01:12,160
Speaker 1: you stay in a game long enough, it repeats itself.

23
00:01:12,319 --> 00:01:14,720
Speaker 1: So when I look at Venezuela to day with my

24
00:01:14,880 --> 00:01:17,760
Speaker 1: background having spent so many years in the struggle with

25
00:01:18,880 --> 00:01:21,200
Speaker 1: the Russians and the Cubans, I mean, this is a

26
00:01:21,360 --> 00:01:24,840
Speaker 1: very familiar pattern. And they see a vulnerability on our

27
00:01:24,920 --> 00:01:27,959
Speaker 1: flank and in our sphere of influence, and they push

28
00:01:28,040 --> 00:01:31,559
Speaker 1: it for maxim advantage. Now, I think most Americans haven't

29
00:01:31,600 --> 00:01:34,680
Speaker 1: been following over the past several years just how important

30
00:01:35,240 --> 00:01:40,360
Speaker 1: Russia's financial support has been to Venezuela. And on again

31
00:01:40,400 --> 00:01:42,800
Speaker 1: the professional side, the part that I'm quite familiar with,

32
00:01:43,160 --> 00:01:46,680
Speaker 1: having supported the Cuban intelligence group and being able to

33
00:01:46,800 --> 00:01:52,000
Speaker 1: monitor the opposition and how to counteract. It's very reminiscent

34
00:01:52,040 --> 00:01:55,360
Speaker 1: of the Cold War. Having said that, the second part

35
00:01:55,400 --> 00:01:59,840
Speaker 1: of that play is we have always resisted uh those

36
00:02:00,760 --> 00:02:04,720
Speaker 1: adventures into this hemisphere, and I the strong action of

37
00:02:04,800 --> 00:02:10,600
Speaker 1: sanctioning Venezuela is all part of this bigger chess chess game,

38
00:02:10,720 --> 00:02:14,240
Speaker 1: and I do think we have to keep rushing Cuba

39
00:02:15,120 --> 00:02:18,240
Speaker 1: from gaining another foothold in the region. So, Jack, given

40
00:02:18,280 --> 00:02:22,160
Speaker 1: your long experience in that region of the world, what

41
00:02:22,360 --> 00:02:24,799
Speaker 1: is your sense of how this plays out? It seems

42
00:02:24,840 --> 00:02:28,320
Speaker 1: like when the um there's a lot of support for

43
00:02:28,720 --> 00:02:30,560
Speaker 1: we have two presidents now, I mean, I guess my

44
00:02:30,600 --> 00:02:32,280
Speaker 1: sentence is very quickly. How do you think this will

45
00:02:32,280 --> 00:02:36,840
Speaker 1: play out? I think it's a very complicated situation. We

46
00:02:37,080 --> 00:02:42,960
Speaker 1: tend to underestimate how far a country has to fall

47
00:02:43,720 --> 00:02:49,079
Speaker 1: before there's an eruption of of a regime change. So

48
00:02:49,600 --> 00:02:52,079
Speaker 1: when you look at the dynamic, I mean the inflation

49
00:02:52,240 --> 00:02:56,600
Speaker 1: and UH in Venezuela, the shortages it is the lack

50
00:02:56,760 --> 00:03:00,600
Speaker 1: of UH sufficient protection for the city, a sence, the

51
00:03:01,120 --> 00:03:05,760
Speaker 1: autocratic nature of of the Madero government. They're at a

52
00:03:05,919 --> 00:03:10,079
Speaker 1: very low point UH in the process. That doesn't mean

53
00:03:10,520 --> 00:03:12,800
Speaker 1: that it's going to be resolved quickly. Actually was reading

54
00:03:12,800 --> 00:03:15,160
Speaker 1: an article today in which one of the opposition leaders

55
00:03:15,200 --> 00:03:18,000
Speaker 1: had one of our vulnerabilities here, if we think that

56
00:03:18,120 --> 00:03:21,600
Speaker 1: this is a short game, we're probably gonna be you know,

57
00:03:21,600 --> 00:03:24,360
Speaker 1: we're gonna dissipate our energy. So this is a sustained,

58
00:03:24,600 --> 00:03:27,840
Speaker 1: sustained effort. I don't think it's over anytime soon. And

59
00:03:27,919 --> 00:03:30,520
Speaker 1: as you know, the key, or at least many analysts

60
00:03:30,560 --> 00:03:33,000
Speaker 1: would say the key is where does the military come down?

61
00:03:33,760 --> 00:03:37,640
Speaker 1: But the military is not a united, monolithic group. You

62
00:03:37,720 --> 00:03:41,360
Speaker 1: have military leadership and then you have the private and

63
00:03:41,520 --> 00:03:45,840
Speaker 1: sergeant that's living with inflation shortages and his family. So

64
00:03:46,240 --> 00:03:48,840
Speaker 1: the military doesn't have a lock on it. And the

65
00:03:49,000 --> 00:03:53,320
Speaker 1: question is at what point in this process does the

66
00:03:53,440 --> 00:03:56,200
Speaker 1: system break? And it is uh. I always say it's

67
00:03:56,200 --> 00:03:58,200
Speaker 1: a game of chicken that the manages it, but there

68
00:03:58,360 --> 00:04:01,960
Speaker 1: is this is going to be a move and counter move.

69
00:04:02,040 --> 00:04:04,720
Speaker 1: I think for some period of time over the long

70
00:04:04,800 --> 00:04:09,040
Speaker 1: play Madero goes not sustainable. I want to I want

71
00:04:09,080 --> 00:04:10,720
Speaker 1: to shift gears a little bit. The way that we

72
00:04:10,920 --> 00:04:14,240
Speaker 1: get a sense of how to engage most effectively is

73
00:04:14,360 --> 00:04:18,360
Speaker 1: through our intelligence operations, both in Venezuela and elsewhere in

74
00:04:18,400 --> 00:04:20,480
Speaker 1: the world. And I want to just check in with

75
00:04:20,640 --> 00:04:23,280
Speaker 1: you about something that we've talked about over the over

76
00:04:23,320 --> 00:04:26,520
Speaker 1: the past few years, which is morale at the CIA

77
00:04:26,920 --> 00:04:29,479
Speaker 1: right now, Given the fact that we still are getting

78
00:04:29,560 --> 00:04:33,000
Speaker 1: leeks about things out of the CIA and the fact

79
00:04:33,080 --> 00:04:38,360
Speaker 1: that there does seem to be some dissonance disagreements within

80
00:04:38,640 --> 00:04:41,279
Speaker 1: the administration right now, can you give us a read

81
00:04:41,320 --> 00:04:45,600
Speaker 1: how are things just internally. My experience in the agency

82
00:04:45,920 --> 00:04:51,000
Speaker 1: is that morale is often directly correlated to how important

83
00:04:51,320 --> 00:04:54,320
Speaker 1: the agency is in the scheme of things in our

84
00:04:54,440 --> 00:04:59,880
Speaker 1: policy and how much is an administration using the CIA

85
00:05:00,120 --> 00:05:03,840
Speaker 1: that is really the ingredient. As a population has probably

86
00:05:03,960 --> 00:05:09,919
Speaker 1: split fifty two Republican Democrats, switching is part of America,

87
00:05:10,080 --> 00:05:14,240
Speaker 1: So it's not so politicized in that regard today, whether

88
00:05:14,279 --> 00:05:17,080
Speaker 1: you have a Republican president or a Democratic president. The

89
00:05:17,200 --> 00:05:20,560
Speaker 1: CIA is a really critical piece of the action. So

90
00:05:20,760 --> 00:05:25,880
Speaker 1: I at the working level as opposed to uh, we're

91
00:05:25,880 --> 00:05:29,080
Speaker 1: seeing it played out some policy level disputes, but the

92
00:05:29,320 --> 00:05:32,840
Speaker 1: rank and file is more interested in doing doing the job.

93
00:05:33,520 --> 00:05:37,359
Speaker 1: Now At the policy level, UM, I mean the mission

94
00:05:37,400 --> 00:05:40,440
Speaker 1: of the CIA engraved on its wall, and we've talked

95
00:05:40,480 --> 00:05:43,159
Speaker 1: about this before. Its product is just tell the facts

96
00:05:43,200 --> 00:05:45,200
Speaker 1: the way they are, and when it gets in trouble,

97
00:05:45,480 --> 00:05:49,600
Speaker 1: it deviates from that. So policymakers need to understand that

98
00:05:49,760 --> 00:05:52,760
Speaker 1: and live with it. And the best ones understand that

99
00:05:52,880 --> 00:05:56,440
Speaker 1: that is a strength. And so I think, um, looking

100
00:05:56,520 --> 00:06:00,920
Speaker 1: at the situation today, UM, I think, um, you know

101
00:06:00,960 --> 00:06:02,840
Speaker 1: everyone's looking that there will be a fight between the

102
00:06:02,880 --> 00:06:06,720
Speaker 1: intelligence community and policy makers. I think that's not good

103
00:06:06,800 --> 00:06:11,560
Speaker 1: for this country. UM And, I think over time, good

104
00:06:11,640 --> 00:06:16,120
Speaker 1: objective intelligence prevails and most presidents events eventually succumbed to

105
00:06:16,160 --> 00:06:19,560
Speaker 1: the to the importance of relying on it. So, how

106
00:06:19,720 --> 00:06:23,200
Speaker 1: the so you're saying that the UM some the commentary

107
00:06:23,279 --> 00:06:27,359
Speaker 1: from President Trump at administration detigrating UH the intelligence agencies.

108
00:06:27,400 --> 00:06:30,760
Speaker 1: You're thinking your senses that these agencies can withstand that

109
00:06:30,920 --> 00:06:33,000
Speaker 1: certainly in the near term, focus on the long term.

110
00:06:34,400 --> 00:06:36,280
Speaker 1: You know, I may be an optimist, but my experience

111
00:06:36,400 --> 00:06:40,000
Speaker 1: leads me to believe the truth does prevail, that reason

112
00:06:40,080 --> 00:06:43,800
Speaker 1: does prevail. UM And I think when you look at

113
00:06:43,839 --> 00:06:46,640
Speaker 1: the assessments, you know, there's things that are said in

114
00:06:46,720 --> 00:06:49,279
Speaker 1: the public forms, other things were said in the back room.

115
00:06:49,800 --> 00:06:53,200
Speaker 1: I don't think the intelligence being shocked. I know. Let

116
00:06:53,240 --> 00:06:58,280
Speaker 1: me differently, I know the intelligence community really considers Iran

117
00:06:58,360 --> 00:07:01,080
Speaker 1: and evil empire. Right. It's you know, my career, I

118
00:07:01,200 --> 00:07:03,880
Speaker 1: was in charge of Iranian operations at one point. There's

119
00:07:03,920 --> 00:07:07,960
Speaker 1: no school of thought inside the agency that Iran is

120
00:07:08,000 --> 00:07:11,320
Speaker 1: a good nation and the part of the brotherhood U. So,

121
00:07:12,080 --> 00:07:15,160
Speaker 1: I think the dispute is whether or not the specific

122
00:07:15,720 --> 00:07:20,880
Speaker 1: ingredients of the UH of the treaty worked out with

123
00:07:21,000 --> 00:07:26,320
Speaker 1: them on nuclear uh development is being adhere to, and

124
00:07:26,520 --> 00:07:31,200
Speaker 1: I think the senses it is they would point out

125
00:07:32,080 --> 00:07:34,840
Speaker 1: if pressed, and I believe it's probably even in the

126
00:07:34,920 --> 00:07:39,080
Speaker 1: record that you know, this is not an ironclad agreement,

127
00:07:39,280 --> 00:07:42,920
Speaker 1: the nuclear agreement, so there is room for developing missiles.

128
00:07:43,040 --> 00:07:47,320
Speaker 1: There's sights that can't be worked, so it's it's not

129
00:07:47,480 --> 00:07:51,200
Speaker 1: as clean as may be portrayed publicly. So I think

130
00:07:51,240 --> 00:07:53,400
Speaker 1: the sea is very much awared about all of these

131
00:07:53,440 --> 00:07:55,960
Speaker 1: things and understand the motivations. But if you look at

132
00:07:56,000 --> 00:07:59,680
Speaker 1: the technical point A, point B, they haven't broken it.

133
00:08:00,280 --> 00:08:02,400
Speaker 1: Chack Devine, we love having you on. Thank you so

134
00:08:02,480 --> 00:08:04,560
Speaker 1: much for being with us. Jack Devine, founding partner and

135
00:08:04,600 --> 00:08:07,640
Speaker 1: president of the ark And Group, also former chief of

136
00:08:07,720 --> 00:08:12,840
Speaker 1: CIA's Worldwide Operations author of Good Hunting, A Spy Master's Story.

137
00:08:13,520 --> 00:08:16,640
Speaker 1: Really interesting to get this perspective because the intelligence community

138
00:08:16,960 --> 00:08:20,680
Speaker 1: is so pivotal in national security and has been under

139
00:08:21,120 --> 00:08:38,320
Speaker 1: under a lot of scrutiny of late. The US retail

140
00:08:38,320 --> 00:08:42,079
Speaker 1: industry continues to undergo tremendous disruption brought about by e

141
00:08:42,240 --> 00:08:45,880
Speaker 1: commerce writ large and perhaps Amazon dot Com in particular,

142
00:08:46,240 --> 00:08:49,280
Speaker 1: and no US name has been more impacted, arguably than Sears,

143
00:08:49,440 --> 00:08:52,600
Speaker 1: the venerable Sears Brandon the United States to help us

144
00:08:52,679 --> 00:08:55,280
Speaker 1: kind of passed through what is going on in retail

145
00:08:55,360 --> 00:08:57,640
Speaker 1: these days, particularly with Sears. There's been some more news.

146
00:08:57,720 --> 00:09:01,400
Speaker 1: There's Bert Flickinger. Burg is a manager director at Strategic

147
00:09:01,559 --> 00:09:05,640
Speaker 1: Resource Group. Bert joins us in our Bloomberg Interactive Broker studio. Bert.

148
00:09:05,679 --> 00:09:07,160
Speaker 1: We love to have you here. Thank you very much.

149
00:09:07,720 --> 00:09:09,640
Speaker 1: Can you give us the latest on what is going

150
00:09:09,760 --> 00:09:13,080
Speaker 1: on at Sears? It looks like Eddie Lambert one another

151
00:09:13,440 --> 00:09:17,000
Speaker 1: round of to keep this company afloat. My question to

152
00:09:17,080 --> 00:09:20,080
Speaker 1: you is what is going on? What's the latest Paul

153
00:09:20,160 --> 00:09:25,240
Speaker 1: and Lisa. Another really regrettable example of bankruptcy Judge Bob

154
00:09:25,360 --> 00:09:29,679
Speaker 1: drain who was a big Wall Street partner let letting

155
00:09:30,040 --> 00:09:35,599
Speaker 1: Lampert's lawyers, who making thousands of dollars per hour, just

156
00:09:35,840 --> 00:09:38,200
Speaker 1: run rough shot. In my professional view, with a lot

157
00:09:38,240 --> 00:09:41,120
Speaker 1: of experience in this area, run rough shot over the

158
00:09:41,240 --> 00:09:46,599
Speaker 1: creditors Um, including the vendors, the workers, the landlords, and

159
00:09:47,400 --> 00:09:53,920
Speaker 1: Lampert is epitomized retail and aptitude throughout his career, and

160
00:09:54,240 --> 00:09:58,640
Speaker 1: and for drain Um to not have the right person

161
00:09:59,640 --> 00:10:03,800
Speaker 1: with Lampert, with his advisers, with the law firm wild

162
00:10:03,840 --> 00:10:07,120
Speaker 1: gotchall without the right skills. How to you know? It's

163
00:10:07,200 --> 00:10:10,840
Speaker 1: an institutionally an excuseable view. So Sears has been an

164
00:10:10,880 --> 00:10:14,120
Speaker 1: absolute mess for a while, and certainly that's been reflected

165
00:10:14,160 --> 00:10:16,559
Speaker 1: in the fact that the shares are trading under a

166
00:10:16,600 --> 00:10:20,080
Speaker 1: dollar until very recently they've surged. They've actually almost doubled

167
00:10:20,120 --> 00:10:23,120
Speaker 1: from sixty cents to a dollar in the past two sessions.

168
00:10:23,160 --> 00:10:25,559
Speaker 1: But I'm just wondering what could Sears do at this

169
00:10:25,840 --> 00:10:32,240
Speaker 1: point to rejuvenate itself, Lisa key question you're asking, And

170
00:10:32,400 --> 00:10:35,679
Speaker 1: here's where Lampert fails to have a good grasp for

171
00:10:35,720 --> 00:10:38,920
Speaker 1: the obvious. He had e commerce right in front of him.

172
00:10:39,120 --> 00:10:42,199
Speaker 1: As you've presently pointed out a number of times, the

173
00:10:42,280 --> 00:10:45,160
Speaker 1: Sears catalog couldn't have been converted to e retail to

174
00:10:45,240 --> 00:10:48,800
Speaker 1: compete with Amazon, but it could have been effective. Kurt Avalon,

175
00:10:49,120 --> 00:10:52,360
Speaker 1: who was one of the founders of Takeoff e Retail,

176
00:10:52,800 --> 00:10:57,240
Speaker 1: was the chief merchant for Lampert. Uh Lampert let him

177
00:10:57,320 --> 00:11:03,920
Speaker 1: leave the company. Avalon's done ninety e retail micro fulfillment

178
00:11:04,000 --> 00:11:07,880
Speaker 1: centers were body sized, mechanized eight thousand square feet, can

179
00:11:07,920 --> 00:11:10,400
Speaker 1: do a million a week. That would have saved Sears.

180
00:11:10,760 --> 00:11:14,360
Speaker 1: The guys sitting in the executive suite with Lambert, and

181
00:11:14,600 --> 00:11:18,040
Speaker 1: Lambert doesn't want to invest in sales circulars, doesn't want

182
00:11:18,080 --> 00:11:21,800
Speaker 1: to rental, and Revinal the store raises prices with impunity,

183
00:11:22,200 --> 00:11:25,920
Speaker 1: sees the solution to save the company, lets it go.

184
00:11:26,440 --> 00:11:29,480
Speaker 1: What do we do here? We bring back Bob Mettler,

185
00:11:29,679 --> 00:11:33,439
Speaker 1: Arthur Martinez, the dream team that saves Sears twenty years ago,

186
00:11:33,960 --> 00:11:37,880
Speaker 1: and the boards Tip two is to do it and Lambert,

187
00:11:37,920 --> 00:11:40,360
Speaker 1: in my views, has has too much ego to do it.

188
00:11:40,679 --> 00:11:43,040
Speaker 1: And the American taxpayers are going to pay a very

189
00:11:43,120 --> 00:11:46,440
Speaker 1: painful price for this one. So is Lambert's play here,

190
00:11:46,600 --> 00:11:49,439
Speaker 1: in your opinions, simply a real estate play of the

191
00:11:49,559 --> 00:11:51,520
Speaker 1: stores and so on and so forth. I just don't

192
00:11:51,520 --> 00:11:55,040
Speaker 1: see away how he recovers anything remotely close to what

193
00:11:55,120 --> 00:11:59,560
Speaker 1: he I'm sure originally planned. Polish is you referenced, well,

194
00:12:00,080 --> 00:12:02,360
Speaker 1: it was a real estate play to start with Marty

195
00:12:02,400 --> 00:12:06,360
Speaker 1: Whitman when they controlled Kmart almost twenty years ago. In

196
00:12:06,440 --> 00:12:10,560
Speaker 1: that bankruptcy combined with Sears real estate play and huge

197
00:12:10,679 --> 00:12:13,720
Speaker 1: fees to Lampard and his company in addition to him

198
00:12:13,800 --> 00:12:19,319
Speaker 1: demification for him not to have litigation liability, and in

199
00:12:19,440 --> 00:12:23,960
Speaker 1: my view, he should be investigated and if investigated, pay

200
00:12:24,000 --> 00:12:28,160
Speaker 1: the commercial consequences. So that sort of takes us to

201
00:12:28,240 --> 00:12:31,280
Speaker 1: the whole concept of shopping malls and the role of

202
00:12:31,360 --> 00:12:34,439
Speaker 1: them going forward. And honestly, this was called into relief

203
00:12:34,520 --> 00:12:37,080
Speaker 1: by j Z Penney, which decided to stop selling major

204
00:12:37,120 --> 00:12:40,360
Speaker 1: appliances as well as furniture in some US stores this week.

205
00:12:40,400 --> 00:12:43,679
Speaker 1: As Bloomberg News reported yesterday, I'm just wondering, you know,

206
00:12:43,800 --> 00:12:46,360
Speaker 1: what will be the role of shopping malls, just how

207
00:12:46,480 --> 00:12:49,920
Speaker 1: much of the carnage has already happened versus needs to happen,

208
00:12:51,160 --> 00:12:54,679
Speaker 1: Lee Lisa, what's happening in the US will be much

209
00:12:54,760 --> 00:12:59,079
Speaker 1: worse than what's happening overseas. And our worldwide work for

210
00:12:59,320 --> 00:13:03,280
Speaker 1: arbitration tribunals Paris, Dubai, we had to do a worldwide

211
00:13:03,360 --> 00:13:07,520
Speaker 1: study of research luxury to mid mid tier to downstream

212
00:13:07,720 --> 00:13:11,319
Speaker 1: and what we see in London is Selfridge's store the

213
00:13:11,400 --> 00:13:15,600
Speaker 1: year three years ago in a row. Harvey Nichols digit

214
00:13:15,880 --> 00:13:19,120
Speaker 1: digitized the experience, so they get young consumers. It's almost

215
00:13:19,160 --> 00:13:22,120
Speaker 1: like going to a Disney property and they get all

216
00:13:22,200 --> 00:13:25,680
Speaker 1: kinds of graphics one would see on her his mobile phone.

217
00:13:26,080 --> 00:13:30,720
Speaker 1: What the Parisian retailers do when Bloomberg is not correctly

218
00:13:30,840 --> 00:13:35,679
Speaker 1: reporting the yellow vests um rioting in the streets. The

219
00:13:35,840 --> 00:13:40,079
Speaker 1: retailers in South Korea, Japan here know how to evolve

220
00:13:40,160 --> 00:13:44,120
Speaker 1: with the future investing malls to make them exciting. Here. Uh,

221
00:13:44,280 --> 00:13:48,440
Speaker 1: they're they're dead elephants, just waiting to be restructured by

222
00:13:48,559 --> 00:13:51,320
Speaker 1: private equity firms. Some of the private equity firms are

223
00:13:51,400 --> 00:13:54,679
Speaker 1: good in our view. I don't think uh Lambert's private

224
00:13:54,720 --> 00:13:57,880
Speaker 1: equity firm in anybody's view, is constructive. So you still

225
00:13:58,000 --> 00:14:01,400
Speaker 1: think that there is a role for bricks and mortar retail,

226
00:14:01,840 --> 00:14:03,760
Speaker 1: but is your view that has to be much more

227
00:14:04,360 --> 00:14:07,600
Speaker 1: closely tied in and aligned with the digital e commerce offering.

228
00:14:07,800 --> 00:14:10,960
Speaker 1: That is that the life the life raft for bricks

229
00:14:10,960 --> 00:14:13,880
Speaker 1: and mortar exactly as you stated, Paul. And here's the

230
00:14:13,960 --> 00:14:18,600
Speaker 1: example Sears four in Hamburg, where the Buffalo bills played

231
00:14:18,679 --> 00:14:21,880
Speaker 1: close to the Canadian border. Like all the Sears Canadian

232
00:14:21,920 --> 00:14:24,160
Speaker 1: border stores should be doing lots of business. It's not.

233
00:14:24,600 --> 00:14:28,080
Speaker 1: But Amazon moved in to Niagara Falls Boulevard with a

234
00:14:28,160 --> 00:14:31,920
Speaker 1: combination Amazon Whole Food Store where they blew up the

235
00:14:32,040 --> 00:14:36,960
Speaker 1: whole on Niagara Falls Boulevard and mall replaced the Bontan

236
00:14:37,120 --> 00:14:40,520
Speaker 1: bankrupt department store with an Amazon Amazon Whole Foods. That

237
00:14:40,600 --> 00:14:43,160
Speaker 1: store is supposed to do one point to five million

238
00:14:43,240 --> 00:14:45,920
Speaker 1: a week. That store is now doing less than two

239
00:14:46,000 --> 00:14:48,360
Speaker 1: hundred thousand a week a year after its opening, is

240
00:14:48,360 --> 00:14:51,560
Speaker 1: going to close like the Amazon bricks and mortar stores.

241
00:14:51,880 --> 00:14:55,160
Speaker 1: So the retail a cop apocalypse or ice ages affecting

242
00:14:55,200 --> 00:14:59,800
Speaker 1: everybody from Sears to Amazon. Because while Bezos and my views,

243
00:15:00,080 --> 00:15:03,160
Speaker 1: most brilliant person who's ever worked in retail, when he's

244
00:15:03,240 --> 00:15:05,600
Speaker 1: running the show, he's great. But now he's going to

245
00:15:05,680 --> 00:15:09,400
Speaker 1: the show and all these side shows that he's personally

246
00:15:09,480 --> 00:15:13,600
Speaker 1: distracted with his divorce. So Amazon's failing in bricks and

247
00:15:13,680 --> 00:15:16,240
Speaker 1: mortar as his seers and the guys with the great

248
00:15:16,360 --> 00:15:19,440
Speaker 1: leaders will win. So let's talk about who's actually doing

249
00:15:19,520 --> 00:15:22,040
Speaker 1: a good job of adopting brick and mortar to the

250
00:15:22,120 --> 00:15:25,680
Speaker 1: modern era in the United States. Uh, look at what

251
00:15:26,120 --> 00:15:29,520
Speaker 1: Frank Blake did to completely turn around Home Depot before

252
00:15:29,560 --> 00:15:34,520
Speaker 1: he became chairman of Delta doing doing tremendous job off price.

253
00:15:34,880 --> 00:15:38,040
Speaker 1: Uh is you've referenced well a number of times, Lisa,

254
00:15:38,400 --> 00:15:40,880
Speaker 1: whether it's Ali's bargain stores on the low end or

255
00:15:41,600 --> 00:15:45,960
Speaker 1: Burlington or t j X or Ross off price. Customers

256
00:15:46,600 --> 00:15:50,120
Speaker 1: want to shop primarily on price Chris Baldwin. But this

257
00:15:50,200 --> 00:15:52,640
Speaker 1: has something to do with the experience, right, Uh, the

258
00:15:52,800 --> 00:15:58,000
Speaker 1: experience and and price. So it's a combination, uh, treasure hunt.

259
00:15:58,120 --> 00:16:00,760
Speaker 1: In terms of the experience home DEEPO is a great

260
00:16:00,800 --> 00:16:04,240
Speaker 1: experience in store online uh. And if and if you

261
00:16:04,360 --> 00:16:08,040
Speaker 1: look at a number of others from the department stores

262
00:16:08,120 --> 00:16:13,720
Speaker 1: and luxury start with South Korea, then then go to London, Paris, Uh,

263
00:16:13,840 --> 00:16:17,440
Speaker 1: you go to Dubai uh and and throughout the PRC

264
00:16:17,600 --> 00:16:20,320
Speaker 1: in Japan. A lot of great in store experiences, but

265
00:16:20,400 --> 00:16:25,160
Speaker 1: the retailers are looking at everything in cap as access

266
00:16:25,200 --> 00:16:28,600
Speaker 1: and expense rather than an investment to profitably drive sales. Yeah,

267
00:16:28,680 --> 00:16:30,560
Speaker 1: definitely gonna be a big challenge. How do you invest?

268
00:16:30,640 --> 00:16:34,200
Speaker 1: Will also watched declining sales and adopt to a modern

269
00:16:34,280 --> 00:16:36,920
Speaker 1: era both in brick and mortar as well as on

270
00:16:37,240 --> 00:16:39,760
Speaker 1: their online platforms. But Bert flickant Jer, thank you so

271
00:16:39,880 --> 00:16:42,480
Speaker 1: much for being here. As always, Bert flickint Jer, Managing

272
00:16:42,520 --> 00:16:46,240
Speaker 1: director at Strategic Resource Group. You know, definitely a big

273
00:16:46,360 --> 00:16:50,640
Speaker 1: existential question facing retail. How big can the brick and

274
00:16:50,680 --> 00:16:53,720
Speaker 1: mortar presence be? How do you fight against Amazon dot Com.

275
00:17:09,600 --> 00:17:13,800
Speaker 1: So trade talks on off, on again, perhaps off again.

276
00:17:13,880 --> 00:17:15,879
Speaker 1: Now we know that President Trump is not going to

277
00:17:15,960 --> 00:17:18,720
Speaker 1: be meeting with jumping ahead of that March first deadline.

278
00:17:19,080 --> 00:17:21,360
Speaker 1: Why what happened? It's hard to know, but we knew.

279
00:17:21,400 --> 00:17:23,760
Speaker 1: The one person is keeping track of it very closely.

280
00:17:23,840 --> 00:17:27,600
Speaker 1: Mike McDonough, chief economist for Financial Products at Bloomberg LP,

281
00:17:27,800 --> 00:17:30,800
Speaker 1: joining us here in our Bloomberg Atta Active Brokers studios. Mike,

282
00:17:30,920 --> 00:17:33,240
Speaker 1: what happened? Why are the talks now off before the

283
00:17:33,320 --> 00:17:36,959
Speaker 1: March first deadline? I mean, are they all right? Well?

284
00:17:37,000 --> 00:17:41,240
Speaker 1: There we go? It seemed like, I mean, the Trump

285
00:17:41,400 --> 00:17:44,480
Speaker 1: she meeting may apparently be postponed, but they're still having

286
00:17:44,520 --> 00:17:46,879
Speaker 1: talks next week. So I mean, it's really hard to

287
00:17:47,040 --> 00:17:49,639
Speaker 1: decipher what this means. I mean, I think, why are

288
00:17:49,680 --> 00:17:52,000
Speaker 1: we hearing about all this? Why? Why the chatter? Why

289
00:17:52,040 --> 00:17:55,560
Speaker 1: the it seems like someone asked him a question and

290
00:17:55,720 --> 00:18:00,480
Speaker 1: kind of a random press conference are just discussion he

291
00:18:00,560 --> 00:18:02,119
Speaker 1: was having. I'm not really sure how we we we

292
00:18:02,200 --> 00:18:04,040
Speaker 1: got the information. It was actually a little bit confused

293
00:18:04,119 --> 00:18:06,480
Speaker 1: by that yesterday. It was not a formal pronounced and

294
00:18:06,600 --> 00:18:09,360
Speaker 1: and you know, I noticed the earliest headline I could

295
00:18:09,359 --> 00:18:11,679
Speaker 1: see was at eleven thirty, and I think the um

296
00:18:12,560 --> 00:18:14,560
Speaker 1: uh you know, the mark was actually selling off before that.

297
00:18:14,600 --> 00:18:15,960
Speaker 1: So the whole thing kind of confused me. But so

298
00:18:16,080 --> 00:18:18,680
Speaker 1: let's take a step back. Um, you know, I I

299
00:18:18,920 --> 00:18:21,320
Speaker 1: don't know what this says about a potential deal. I

300
00:18:21,480 --> 00:18:24,920
Speaker 1: do think that President Trump's bar for a deal has

301
00:18:25,000 --> 00:18:27,560
Speaker 1: come down quite meaningfully because of what's been happening in

302
00:18:27,600 --> 00:18:30,760
Speaker 1: the markets and concerns that the economy has been slowing.

303
00:18:31,200 --> 00:18:33,240
Speaker 1: In fact, I wouldn't be surprised if it's come down

304
00:18:33,320 --> 00:18:35,760
Speaker 1: so far. It may actually be at odds now with

305
00:18:35,880 --> 00:18:38,959
Speaker 1: the people negotiating the trade deal primarily what I mean

306
00:18:39,040 --> 00:18:41,080
Speaker 1: by that is Lighthouser, so you know, we could have

307
00:18:41,160 --> 00:18:44,800
Speaker 1: a conflict there. Uh So I'm still optimistic we're going

308
00:18:44,880 --> 00:18:46,760
Speaker 1: to reach some sort of deal. I think we'll get

309
00:18:46,840 --> 00:18:50,200
Speaker 1: the best possible deal, which will not be what Trump

310
00:18:50,280 --> 00:18:52,639
Speaker 1: had originally proposed, but we will. He will get some

311
00:18:53,280 --> 00:18:56,840
Speaker 1: uh consolations. I think that we'll have some tangible stuff

312
00:18:56,880 --> 00:18:59,160
Speaker 1: as it relates to the deficit, and I think we'll

313
00:18:59,200 --> 00:19:02,000
Speaker 1: have promise is for some of the more difficult challenges,

314
00:19:02,040 --> 00:19:05,840
Speaker 1: the intellectual property opening up an investment in some Chinese sectors,

315
00:19:06,119 --> 00:19:08,440
Speaker 1: and I think right that the difficult thing is going

316
00:19:08,520 --> 00:19:11,119
Speaker 1: to be uh what kind of measures are put in

317
00:19:11,200 --> 00:19:13,480
Speaker 1: place to enforce those? And I think that's probably where

318
00:19:13,520 --> 00:19:15,720
Speaker 1: the negotiations are centered right now. And I think the

319
00:19:15,840 --> 00:19:18,399
Speaker 1: Chinese are realized now and are more willing to to

320
00:19:18,480 --> 00:19:20,600
Speaker 1: give more concessions as well. So I do think a

321
00:19:20,720 --> 00:19:24,680
Speaker 1: deal is possible. This delay of of the She Trump

322
00:19:24,760 --> 00:19:27,159
Speaker 1: meeting is confusing because he said that it will be

323
00:19:27,240 --> 00:19:29,680
Speaker 1: finalized at a meeting between us. If they don't meet

324
00:19:29,800 --> 00:19:32,560
Speaker 1: by the deadline, what happens. Do we get the tariffs?

325
00:19:32,640 --> 00:19:34,879
Speaker 1: Do we not get the tariffs? I suppose we'll know

326
00:19:35,000 --> 00:19:37,720
Speaker 1: more next week when the the meetings do happen, not

327
00:19:37,840 --> 00:19:43,280
Speaker 1: between uh She and Trump, but between more junior negotiation. So, Mike, again,

328
00:19:43,560 --> 00:19:46,280
Speaker 1: it's do you have a sense of who's more incentive

329
00:19:46,359 --> 00:19:48,359
Speaker 1: to get a deal done? I think we hear about

330
00:19:49,040 --> 00:19:51,760
Speaker 1: China's economy slowing. Obviously we know that that. Maybe we've

331
00:19:51,800 --> 00:19:54,040
Speaker 1: had some people come in here saying it's slowing materially

332
00:19:54,119 --> 00:19:56,719
Speaker 1: more than the government is letting on, I e. They

333
00:19:56,840 --> 00:19:58,760
Speaker 1: may be more incentive to do a deal. Do you

334
00:19:58,920 --> 00:20:02,560
Speaker 1: buy into that? Well? I think you know, looking at

335
00:20:02,640 --> 00:20:05,400
Speaker 1: last year, you had a problem where it was their

336
00:20:05,480 --> 00:20:08,480
Speaker 1: deleveraging agenda that was causing the slowdown in the country.

337
00:20:08,520 --> 00:20:10,879
Speaker 1: Trade wasn't really a factor. Yet you still have the

338
00:20:10,920 --> 00:20:13,679
Speaker 1: issue with the deleveraging agenda slowing down growth more than

339
00:20:13,720 --> 00:20:16,359
Speaker 1: they anticipated. And then you add on top of that trade.

340
00:20:16,720 --> 00:20:18,640
Speaker 1: So yeah, that does put a lot of pressure on China.

341
00:20:18,680 --> 00:20:20,199
Speaker 1: But I think if you look at you know, when

342
00:20:20,240 --> 00:20:24,120
Speaker 1: President Trump started this um with China, US GDP growth

343
00:20:24,200 --> 00:20:26,520
Speaker 1: was over three percent, the markets were rallying, everything was

344
00:20:26,560 --> 00:20:29,480
Speaker 1: looking great. In the US, things don't look as good now.

345
00:20:29,680 --> 00:20:32,600
Speaker 1: Sentiment is collapsing. If you look at one measure in

346
00:20:32,640 --> 00:20:34,840
Speaker 1: the University of Michigan and the percent of people who

347
00:20:35,400 --> 00:20:38,800
Speaker 1: um randomly make good comments about government economic policy, it's

348
00:20:38,840 --> 00:20:41,720
Speaker 1: at the lowest it's ever been. During the Trump presidency,

349
00:20:42,280 --> 00:20:44,760
Speaker 1: you had the shutdown, So there's some erosion and confidence

350
00:20:44,800 --> 00:20:47,800
Speaker 1: in the economic agenda in the US. So Trump needs

351
00:20:47,840 --> 00:20:49,800
Speaker 1: some wins, and this could be a nice, good, easy

352
00:20:49,880 --> 00:20:52,280
Speaker 1: win that could bring some confidence back. Which brings us

353
00:20:52,320 --> 00:20:55,040
Speaker 1: back to the confusing head scratcher of yesterday when we

354
00:20:55,160 --> 00:20:57,720
Speaker 1: got the headlines at President Trump was not going to

355
00:20:57,800 --> 00:21:01,000
Speaker 1: be attending a meeting with President of China and just

356
00:21:01,080 --> 00:21:03,119
Speaker 1: to put this in a perspective about why we're focusing

357
00:21:03,160 --> 00:21:05,040
Speaker 1: on it if we don't really have a lot of

358
00:21:05,119 --> 00:21:08,720
Speaker 1: clarity there. Arguably that's what sunk the NASDAC and the

359
00:21:08,840 --> 00:21:12,280
Speaker 1: DOO in particular, and sort of led the week into

360
00:21:12,520 --> 00:21:14,760
Speaker 1: a rather negative tone, right. I mean, this actually did

361
00:21:14,840 --> 00:21:17,600
Speaker 1: have a market effect. We saw it happen when the

362
00:21:17,640 --> 00:21:21,200
Speaker 1: headlines hit. We saw stocks taken a further leg lower

363
00:21:21,400 --> 00:21:25,280
Speaker 1: in the US. So my question is, if they are

364
00:21:25,359 --> 00:21:28,560
Speaker 1: not talking, or if President Trump doesn't meet with Jim Ping,

365
00:21:28,960 --> 00:21:31,280
Speaker 1: could we still get a deal ahead of that March

366
00:21:31,320 --> 00:21:35,200
Speaker 1: first deadline? I think anything Obviously it is possible, but

367
00:21:35,280 --> 00:21:38,360
Speaker 1: I mean, though it seems unlikely, but maybe we could

368
00:21:38,400 --> 00:21:41,240
Speaker 1: get an extension of the deadline to accommodate the meeting.

369
00:21:41,359 --> 00:21:43,080
Speaker 1: And what would I mean, would that be considered a

370
00:21:43,119 --> 00:21:50,920
Speaker 1: win for who? Fair enough? My point is that is that,

371
00:21:51,160 --> 00:21:53,119
Speaker 1: I mean, is that enough of the market thank you?

372
00:21:53,200 --> 00:21:55,159
Speaker 1: Oh yeah, I mean I think I think thank you

373
00:21:55,240 --> 00:21:57,840
Speaker 1: for understanding. Maybe if you if you get that extension,

374
00:21:58,520 --> 00:22:02,240
Speaker 1: I think that would imply a deal is basically has

375
00:22:02,320 --> 00:22:04,440
Speaker 1: been reached and it's a formality that they need to

376
00:22:04,520 --> 00:22:06,080
Speaker 1: meet and then sign the deal. So I think that

377
00:22:06,160 --> 00:22:07,959
Speaker 1: the market would look at that as a positive. If

378
00:22:07,960 --> 00:22:11,400
Speaker 1: there I'm not talking about like another three six month extension.

379
00:22:11,440 --> 00:22:14,080
Speaker 1: I'm talking about saying we're going to extend this deal

380
00:22:14,520 --> 00:22:16,760
Speaker 1: another couple of weeks or whatever to accommodate a meeting

381
00:22:16,840 --> 00:22:19,399
Speaker 1: between President and President Trump to finalize some of the

382
00:22:19,480 --> 00:22:23,280
Speaker 1: loose ends our promises enough, like if they promised on technology,

383
00:22:23,359 --> 00:22:26,119
Speaker 1: that's not enough. No, And I think that's that's one

384
00:22:26,200 --> 00:22:28,240
Speaker 1: of the key points right now is they're trying to

385
00:22:28,280 --> 00:22:31,040
Speaker 1: figure out what enforcement mechanisms they could put in place

386
00:22:31,520 --> 00:22:33,600
Speaker 1: that they could track over the next two years on

387
00:22:33,680 --> 00:22:35,960
Speaker 1: some of the uh following through with some of the

388
00:22:36,040 --> 00:22:39,840
Speaker 1: more difficult challenges. I mean, you know, you know, it's interesting.

389
00:22:39,960 --> 00:22:42,119
Speaker 1: Thank you, Mike McDonald, Thank you very much. We always

390
00:22:42,119 --> 00:22:44,840
Speaker 1: appreciate your your insights here. Mike is the chief economist

391
00:22:44,880 --> 00:22:47,359
Speaker 1: financial Products from Bloomberg LP. He joins us in our

392
00:22:47,359 --> 00:22:50,440
Speaker 1: Bloomberg eleven three oh studios. Uh. You know, I don't know,

393
00:22:50,560 --> 00:22:53,040
Speaker 1: color meet pessimistic, but that you know, I think some

394
00:22:53,119 --> 00:22:54,919
Speaker 1: of the big issues that have to be addressed here

395
00:22:54,960 --> 00:22:58,159
Speaker 1: on the trade deal are the very hard issues about technology,

396
00:22:58,160 --> 00:23:04,000
Speaker 1: about intellectual property. It's about soybeans, paulbeans, but at some

397
00:23:04,080 --> 00:23:05,800
Speaker 1: point they're gonna have to get down to brass tacks

398
00:23:05,840 --> 00:23:08,240
Speaker 1: and go to those very tough issues which are really

399
00:23:08,359 --> 00:23:25,600
Speaker 1: economically material. We have seen the price of iron or

400
00:23:25,920 --> 00:23:29,600
Speaker 1: surge by more than twenty five over the past ten sessions,

401
00:23:29,880 --> 00:23:31,920
Speaker 1: catching a lot of people's attention. But you know, it's

402
00:23:31,960 --> 00:23:34,159
Speaker 1: catching even more people's attention, at least the attention of

403
00:23:34,240 --> 00:23:37,440
Speaker 1: Mike McLoone, that is corn and crops and the fact

404
00:23:37,480 --> 00:23:39,119
Speaker 1: that we are finally going to get some information for

405
00:23:39,200 --> 00:23:41,160
Speaker 1: the first time in two months about just how well

406
00:23:41,640 --> 00:23:43,840
Speaker 1: US farmers have been doing over the past couple of months.

407
00:23:43,880 --> 00:23:45,960
Speaker 1: Mike mcloan joining us here in our Bloomberg at Active

408
00:23:45,960 --> 00:23:49,760
Speaker 1: Broke Studios Commodity Strategy for Bloomberg Intelligence. So what's up

409
00:23:49,840 --> 00:23:52,199
Speaker 1: with this, with this report that we're about to get. Well,

410
00:23:52,240 --> 00:23:54,720
Speaker 1: we haven't had data from us d A for two months,

411
00:23:54,760 --> 00:23:56,879
Speaker 1: so everybody is waiting for the market's stuck in a

412
00:23:57,040 --> 00:23:59,359
Speaker 1: range and it's waiting for the data to night fear

413
00:23:59,520 --> 00:24:01,920
Speaker 1: the market more likely kind of do what iron Ore has.

414
00:24:02,040 --> 00:24:04,639
Speaker 1: You know, commodities have been pretty beat up, the dollar

415
00:24:04,640 --> 00:24:06,960
Speaker 1: has been very strong, and then you just get a

416
00:24:06,960 --> 00:24:08,680
Speaker 1: little piece of news like what happened with the ballet

417
00:24:08,720 --> 00:24:11,040
Speaker 1: and the market just has the path of least resistance

418
00:24:11,040 --> 00:24:12,520
Speaker 1: seems to be up, and I think that's might be

419
00:24:12,720 --> 00:24:15,080
Speaker 1: the more of the case today with with um, the

420
00:24:15,480 --> 00:24:18,119
Speaker 1: grains and eggs. So what commodities in particularly are you

421
00:24:18,440 --> 00:24:21,040
Speaker 1: most looking forward to seeing data? You just I just

422
00:24:21,200 --> 00:24:23,000
Speaker 1: I'm a little bit I need this data to help

423
00:24:23,080 --> 00:24:25,560
Speaker 1: me form my opinion because it's been two months and

424
00:24:25,600 --> 00:24:27,359
Speaker 1: there's a lot of altility. Which what are some of

425
00:24:27,400 --> 00:24:29,200
Speaker 1: the data points you're most looking forward to today? Well,

426
00:24:29,240 --> 00:24:31,280
Speaker 1: you mentioned corn, corn, soybeans, and we eat The key

427
00:24:31,480 --> 00:24:33,560
Speaker 1: issue has been soybeans. We all know there's this way

428
00:24:33,640 --> 00:24:36,719
Speaker 1: too much supply soy means because of the trade war UM,

429
00:24:37,119 --> 00:24:40,119
Speaker 1: and we all expect the thing. It's already priced in UM.

430
00:24:40,200 --> 00:24:42,320
Speaker 1: But I'm kind of watching corn because corn has the

431
00:24:42,440 --> 00:24:45,680
Speaker 1: best balance, and all the estimates are that all the

432
00:24:46,000 --> 00:24:47,879
Speaker 1: that we had last year, yields of probably declined a

433
00:24:47,920 --> 00:24:49,760
Speaker 1: little bit. The production estimates have probably come off a

434
00:24:49,840 --> 00:24:52,080
Speaker 1: little bit, and so corn is gonna be the one. Also,

435
00:24:52,240 --> 00:24:54,719
Speaker 1: once we think we can virtually guarantee next year we're

436
00:24:54,720 --> 00:24:56,480
Speaker 1: gonna get a lot more corn planting. It's just a

437
00:24:56,600 --> 00:24:58,760
Speaker 1: question of how much it's marketed, and we don't export

438
00:24:58,760 --> 00:25:00,399
Speaker 1: a lot of corn. We use a lot, actually use

439
00:25:00,400 --> 00:25:03,960
Speaker 1: most are cornel for ethanol. Interesting, So, Mike, given the

440
00:25:04,000 --> 00:25:06,879
Speaker 1: fact that you've done this for decades and you've been

441
00:25:06,960 --> 00:25:09,720
Speaker 1: intimately connected with just how volatile things can get, look

442
00:25:09,760 --> 00:25:12,399
Speaker 1: into your crystal ball. If we get a positive reading

443
00:25:12,480 --> 00:25:15,840
Speaker 1: out of this FDA report or USDA usd A report,

444
00:25:16,600 --> 00:25:19,360
Speaker 1: how much could you see the price of corn rice

445
00:25:20,040 --> 00:25:22,159
Speaker 1: right now? My estimate is for to five percent and

446
00:25:22,240 --> 00:25:26,520
Speaker 1: it's simple analysis session just well overall, maybe take a

447
00:25:26,560 --> 00:25:28,639
Speaker 1: few said. But even if the data is neutral, if

448
00:25:28,680 --> 00:25:30,280
Speaker 1: you look at the futures curve, because there's really not

449
00:25:30,320 --> 00:25:32,560
Speaker 1: a lot of data, the futures curve is switched towards

450
00:25:33,000 --> 00:25:35,800
Speaker 1: more towards backwardation, which means the fritures curve is expecting

451
00:25:35,880 --> 00:25:37,719
Speaker 1: demand to pick up versus supply. And then you look

452
00:25:37,760 --> 00:25:39,960
Speaker 1: at one other key factor, the Brazilian real Remember we

453
00:25:40,000 --> 00:25:41,920
Speaker 1: had the big election last year. It looks like the

454
00:25:41,960 --> 00:25:46,360
Speaker 1: realist bottom. So these two factors are turning positive. In addition,

455
00:25:46,440 --> 00:25:48,120
Speaker 1: we all know what's going to happen when this trade issue.

456
00:25:48,119 --> 00:25:49,919
Speaker 1: It's got to go back. It's not gonna get as

457
00:25:49,920 --> 00:25:51,720
Speaker 1: bad as last year. We should see some mean version

458
00:25:51,760 --> 00:25:53,960
Speaker 1: which mean to me means this data has to be

459
00:25:54,040 --> 00:25:56,679
Speaker 1: really bare, so the market is more likely to go higher. So, Mike,

460
00:25:56,760 --> 00:26:00,320
Speaker 1: let's switch from the softer commodities to the hard of stuff.

461
00:26:00,320 --> 00:26:03,600
Speaker 1: Commodities are arguably iron ore. How surprised are you know,

462
00:26:03,640 --> 00:26:05,680
Speaker 1: as Lisa mentioned, you know a big move up in

463
00:26:05,760 --> 00:26:08,480
Speaker 1: iron ore of the last tent tent sessions doing part

464
00:26:08,640 --> 00:26:11,280
Speaker 1: I guess in large part to the supply disruption from

465
00:26:11,359 --> 00:26:15,280
Speaker 1: valet in Latin America. UM, How surprised are you with

466
00:26:15,320 --> 00:26:19,080
Speaker 1: the volatility of that commodity given what is you know,

467
00:26:19,119 --> 00:26:22,960
Speaker 1: I guess a meaningful supply disruption. Yes, it was significant.

468
00:26:23,000 --> 00:26:25,320
Speaker 1: It's just like natural gas last year. The path of

469
00:26:25,400 --> 00:26:28,720
Speaker 1: least resistance with some of this news is up because

470
00:26:28,760 --> 00:26:30,280
Speaker 1: that's what commodities are doing in their bottom I mean

471
00:26:30,359 --> 00:26:33,240
Speaker 1: the significance of iron ores. It's just not widely traded.

472
00:26:33,280 --> 00:26:36,360
Speaker 1: There's no real active futures UM. And for me as

473
00:26:36,359 --> 00:26:39,720
Speaker 1: a strategist, it's also not highly correlated to industrial metals.

474
00:26:40,040 --> 00:26:42,800
Speaker 1: It's ironic, but it isn't, so I just kind of

475
00:26:42,880 --> 00:26:44,720
Speaker 1: keep it as a as an Ey'm the backburner, and

476
00:26:44,760 --> 00:26:47,159
Speaker 1: I watched copper and I watch aluminium, but iron ore

477
00:26:47,160 --> 00:26:49,720
Speaker 1: as an indication where things are going. It's not going down, yeah,

478
00:26:49,720 --> 00:26:52,320
Speaker 1: but I mean I understand that it's it's might be

479
00:26:52,440 --> 00:26:54,719
Speaker 1: thinly traded, but it's still is a commodity, that it's

480
00:26:54,760 --> 00:26:58,280
Speaker 1: an essential ingredient in any infrastructure spending, and frankly that

481
00:26:58,520 --> 00:27:01,879
Speaker 1: is often used as a gauge of global economic growth.

482
00:27:02,160 --> 00:27:04,120
Speaker 1: So I mean, is there a bigger kind of message

483
00:27:04,160 --> 00:27:06,680
Speaker 1: to take away here that as a slid disruption and

484
00:27:06,760 --> 00:27:09,960
Speaker 1: a major producer of iron ore could cause really, I

485
00:27:09,960 --> 00:27:12,800
Speaker 1: mean twenty seven increase in the price and ten sessions.

486
00:27:12,880 --> 00:27:15,920
Speaker 1: This is traumatic. I have to temper my enthusiasm to

487
00:27:16,000 --> 00:27:18,520
Speaker 1: be bullish commodities because obviously I'm a commodity guy. But

488
00:27:18,600 --> 00:27:20,960
Speaker 1: I look at this year, is this is an indicative

489
00:27:21,000 --> 00:27:24,080
Speaker 1: of where markets are going with just little tweaks. It's

490
00:27:24,200 --> 00:27:26,400
Speaker 1: much easier for them to go up with little things

491
00:27:26,440 --> 00:27:27,800
Speaker 1: like this, and that this is a you know, this

492
00:27:28,000 --> 00:27:30,040
Speaker 1: is a canary and the coal chef. But you look

493
00:27:30,119 --> 00:27:32,560
Speaker 1: at copper, it's just bottom from a good level. Aluminiums

494
00:27:32,600 --> 00:27:34,880
Speaker 1: just bottom from a good level. We're going to see

495
00:27:34,920 --> 00:27:38,000
Speaker 1: corn today, and all these demands supply demand factors are

496
00:27:38,040 --> 00:27:40,680
Speaker 1: switching positive. In addition, the key factors of US though,

497
00:27:40,720 --> 00:27:43,479
Speaker 1: if the dollars peaked from that sixteen year high last year,

498
00:27:43,520 --> 00:27:46,440
Speaker 1: which I think it has, that's a pretty strong tail

499
00:27:46,480 --> 00:27:48,840
Speaker 1: wind for all commodities. In addition, we get these little

500
00:27:49,000 --> 00:27:52,199
Speaker 1: supplied rustions. But key thing remember about slight disruptions are

501
00:27:52,280 --> 00:27:55,320
Speaker 1: usually short term events, and they come back. What's your

502
00:27:55,800 --> 00:27:59,520
Speaker 1: number one commodity right now? Real? Ten seconds? Good Gold,

503
00:27:59,640 --> 00:28:04,760
Speaker 1: unfortunate Gold. I have to I have to give my credit.

504
00:28:04,800 --> 00:28:07,880
Speaker 1: He's been making a very popular and a very good

505
00:28:08,119 --> 00:28:10,560
Speaker 1: gold call for two or three months. I heard it

506
00:28:10,720 --> 00:28:12,639
Speaker 1: just kind of in the background in the office about

507
00:28:12,680 --> 00:28:15,080
Speaker 1: his gold. I read his reports and uh, spot on,

508
00:28:15,600 --> 00:28:20,960
Speaker 1: spot on. So gold, safety, safety, and gold. Mike mcglowan,

509
00:28:21,000 --> 00:28:23,400
Speaker 1: thanks very much, Mike, as a commodity strategist for Bloomberg

510
00:28:23,400 --> 00:28:27,080
Speaker 1: Intelligence joining us today in our Bloomberg Interactive Broker studio

511
00:28:27,160 --> 00:28:30,000
Speaker 1: here in New York. Thanks so much, Mike. So again Gold,

512
00:28:30,320 --> 00:28:32,600
Speaker 1: But I go, I can see gold in the space

513
00:28:32,680 --> 00:28:34,920
Speaker 1: and gold, so again, gold in the market that is

514
00:28:34,920 --> 00:28:37,080
Speaker 1: down two hundred sixty points on the Dow. Gold does

515
00:28:37,119 --> 00:28:39,960
Speaker 1: not sound so bad. We've got the you know, people

516
00:28:40,040 --> 00:28:42,720
Speaker 1: concerned about the economic outlook, certainly in the back half

517
00:28:42,760 --> 00:28:45,880
Speaker 1: of the year, So why not gold so Mike, we'll

518
00:28:45,960 --> 00:28:49,880
Speaker 1: we'll take it. Thanks for listening to the Bloomberg P

519
00:28:49,960 --> 00:28:52,480
Speaker 1: and L podcast. You can subscribe and listen to interviews

520
00:28:52,560 --> 00:28:56,360
Speaker 1: at Apple Podcasts or whatever podcast platform you prefer. Paul Sweeney,

521
00:28:56,440 --> 00:28:59,160
Speaker 1: I'm on Twitter at pt Sweeney, I'm Lisa bram Boyd's

522
00:28:59,160 --> 00:29:02,160
Speaker 1: I'm on Twitter at Lisa Abramo. It's one before the podcast.

523
00:29:02,240 --> 00:29:04,800
Speaker 1: You can always catch us worldwide on Bloomberg Radio