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Speaker 1: This is Bloomberg Surveillance. Nothing positive will emode until this

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Speaker 1: uncertainty of workers than in relationship slenders and whether it's

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Speaker 1: safe in the Euros and its secured. You know, until

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Speaker 1: those are cleared up, you can't expect much from the

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Speaker 1: Greek economy. The things that we use traditional retail for

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Speaker 1: stopping and getting things immediately are starting to be an

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Speaker 1: x by Amazon. Over time, as the behavior and people

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Speaker 1: start to realize that they can get anything that they

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Speaker 1: want within an hour, that's when traditional retail really feels

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Speaker 1: it in a number of countries, particularly of course in

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Speaker 1: Southern Europe, and of course Increase in particular. You have

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Speaker 1: to start asking yourself, well, what is the way out

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Speaker 1: Bloomberg Surveillance. You're linked to the world of economics, finance

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Speaker 1: and investment on Bloomberg Radio. Good morning everyone, Bloomberg Surveillance.

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Speaker 1: Michael McKee and Tom Keene. We are thrilled you join

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Speaker 1: us today. The fireworks of festivities of yesterday in the

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Speaker 1: market's a little subdued this morning, but we'll take it

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Speaker 1: not question. Uh, markets are interesting. Yen is what I'm

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Speaker 1: watching more than anything. Maintaining strength. We had a one

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Speaker 1: ten thirty nine earlier right now one ten uh forty

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Speaker 1: one the end at a strength level of one O

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Speaker 1: nine hand it would be uh something we don't see

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Speaker 1: that right now. Futures up five, dol features up thirty six,

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Speaker 1: Bloomer Surveillance. This morning brunch of by Cone Resnick Accounting,

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Speaker 1: Tax Advisory. Cone Resnick will provide your business with the

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Speaker 1: industry insight it needs to succeed in a dynamic economy.

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Speaker 1: Sign up for insight and find out how at cone

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Speaker 1: Resnec dot com c O h n R e z

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Speaker 1: n I C k Resnik dot com. We check in

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Speaker 1: on Russia. William Palmers is more than qualified to speak

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Speaker 1: to us on the many attributes of international law and

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Speaker 1: particularly is it uh indicates to Russia. He's deputy you

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Speaker 1: directed the Kennon Institute at the Woodrow Wilson International Center.

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Speaker 1: Of course much affiliated, I would say with prisident Dr Palmer,

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Speaker 1: and is thrilled young. The last time you're on, we

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Speaker 1: got a huge response. Let's get out of the way

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Speaker 1: right now. The latest uproar, which is the Panama papers.

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Speaker 1: What was your response when you saw the enormity of

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Speaker 1: this and the immediate focus on Mr Putin? Well, I

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Speaker 1: found it very interesting that the focus was on Mr Putin,

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Speaker 1: although amongst all the politicians named in the Panama papers,

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Speaker 1: he distinctly is not one of them. And I think

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Speaker 1: what it showed was what has been the trend in

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Speaker 1: Russia for years that rich oligarchs and business people use

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Speaker 1: various means to get their money out of the country

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Speaker 1: offshore and parket in overseas markets. What was interesting is

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Speaker 1: that Putin in fact was not named in the documents,

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Speaker 1: but other leaders, including the Ukrainian president was, and I

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Speaker 1: think in many ways the crisis will now be the

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Speaker 1: Panamla papers will have a bigger reaction in Ukraine than

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Speaker 1: at did in Russia. And Mike, we saw that with

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Speaker 1: the exit of the Icelandic leader in the last twenty

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Speaker 1: four hours, exactly where I wanted to go with it. Yes, Um,

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Speaker 1: you can infer a lot about Putin, at least those

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Speaker 1: of us who live outside of Russia can. And in

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Speaker 1: a democracy you see what happens. Prime Minister Gunson in

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Speaker 1: Iceland steps down. But does it really have any effect

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Speaker 1: on Putin and to the Russian people even though this

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Speaker 1: is happening, Um, it does, It's well, it will not

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Speaker 1: have an effect on Putin. The Prosecutor's office has already

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Speaker 1: announced that it is the one that will investigate the

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Speaker 1: charges in Panama, and the prosecutor's office is in Putin's

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Speaker 1: back pocket, so there will be no major investigation UH

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Speaker 1: in terms of how this crisis relates to Putin, and

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Speaker 1: I think for the most part, the Russians will brush

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Speaker 1: it off. I mean, more than a hundred billion dollars

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Speaker 1: left the country, UM, and everyone knew that it was happening.

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Speaker 1: So I don't think this even has at least a

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Speaker 1: media political ramifications in Russia either for whom does it

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Speaker 1: have political ramifications outside of former Prime Minister in Onsen.

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Speaker 1: I think for for for Russia, UM, well, for for Ukraine,

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Speaker 1: it clearly has ravoications. For President Porschenko, he was in

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Speaker 1: the process of forming a new government UH that has

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Speaker 1: now quieted it down. UH. Ukraine actually does have an

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Speaker 1: independent press and UH free, free and independent UH legislature,

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Speaker 1: and I think there's gonna be investigations in Ukraine. So

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Speaker 1: I think what's going to happen in Ukraine is that

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Speaker 1: it's going to cause greater uncertainty at the time when

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Speaker 1: Ukraine is desperately searching for investors and people to come

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Speaker 1: to Ukraine and to access Ukrainian markets. Again for Russia,

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Speaker 1: Russia has its own problems and they're very severe, but

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Speaker 1: I don't think this is going to be one of

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Speaker 1: the Panama papers. The problems is stabilized with oil link

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Speaker 1: oil price to the challenges that Russia has. We all

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Speaker 1: got a clinic on that with Ruble at seventy eight,

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Speaker 1: Ruble down showing a much stronger rule, Ruble offer recovery

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Speaker 1: and oil bring us up to date and now critical

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Speaker 1: that prices for Mr. Putin, well, it's critical the oil

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Speaker 1: prices critical because it contributes basically half the state revenue

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Speaker 1: to the state budget. So Putin and his economic advisors

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Speaker 1: have been busy cutting UM and they're still not done cutting.

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Speaker 1: And it's still questions us to how deep they're going

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Speaker 1: to have to dig into their financial reserves, which still

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Speaker 1: stand above billion dollars in order to ride out this crisis.

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Speaker 1: But so there's still the question of budget cuts that

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Speaker 1: Russia faces. But it's also the question of whether Russia

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Speaker 1: can take advantage of a weaker ruble and try to

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Speaker 1: use that to increase them stick manufacturing and move into

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Speaker 1: UM into other markets. Unfortunately, Russia doesn't export that much

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Speaker 1: other than oil, UH, guns and agricultural goods, So there

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Speaker 1: is a weaker ruble, and I think one of the

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Speaker 1: things that the Russian government wants to make sure is

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Speaker 1: that the ruble in fact doesn't strengthen. The ability of

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Speaker 1: the Russian state to get through this crisis depends on

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Speaker 1: a weak ruble, and so I think that if a

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Speaker 1: strengthing ruble works against UH, many of the instruments that

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Speaker 1: Russia has in place now to actually get out of

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Speaker 1: this crisis because of the oil is priced in dollars, right,

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Speaker 1: so when the price of oil goes up, the ruble strengthens.

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Speaker 1: But again, Russia's ability to pay wages, I mean, there's

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Speaker 1: a huge proportion of of the workforce depends on the

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Speaker 1: Russian state, other directly and indirectly, and one of the

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Speaker 1: reasons why the Russian state has weathered this storm is

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Speaker 1: that it's being able to pay workers off in in

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Speaker 1: cheaper rubles. Um that being the case, they're also now

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Speaker 1: increased amples inside Russia a workers simply not getting paid,

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Speaker 1: primarily in the private sector. But this again is reminiscent

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Speaker 1: of what occurred in the nineteen nineties when there were

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Speaker 1: huge problems of ways arrears in Russia. We've heard reports

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Speaker 1: they've cut back on social safety net spending absolutely. Um,

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Speaker 1: They've cut back on education, they've cut back on healthcare. Um,

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Speaker 1: they've cut back on all the things they need to

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Speaker 1: to remain a major world power. And of course that's

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Speaker 1: one of the contradictions of what Putin is doing. And

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Speaker 1: he's now strunning across the state arguing he's a world power,

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Speaker 1: yet he's making all these cuts that that undermine his

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Speaker 1: domestic economy and social stabilities. Can I ask a dumb question,

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Speaker 1: he's a young Turk, Is he like president for life?

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Speaker 1: Or I mean, is there any even moment of democracy

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Speaker 1: in Russia? Well, Um, he is up for re election

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Speaker 1: in eighteen. I think he's sixty three or sixty four. Um,

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Speaker 1: he will, no doubt, having no opposition, he will be

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Speaker 1: re elected for another sixty six year term in Uh.

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Speaker 1: That gets us too and unless which years, Yeah, it

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Speaker 1: would be essentially twenty four years that he would have ruled,

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Speaker 1: making him one of the longest serving rulers in Russian history. Um.

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Speaker 1: And I think everything he's doing now is geary to

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Speaker 1: make sure he stays in power. Uh. He's not introducing

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Speaker 1: any dramatic reforms uh this year, UM, in part because

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Speaker 1: he needs to get through to the next election. Uh.

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Speaker 1: There's been reports that he would begin to reform after

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Speaker 1: he's reelected, but that's two years down the pike. And

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Speaker 1: how many billions of dollars spent just to keep him

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Speaker 1: keep the status quo? What would what would he be

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Speaker 1: able to do if he were going to make a change, uh,

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Speaker 1: some sort of reform. What would be the most effective

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Speaker 1: thing he could do for Russia? Well, there are plenty

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Speaker 1: of Western educated, liberal free marketers inside the Russian Federation, UM,

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Speaker 1: including his former finance minister Alexei Kudrin, the current president

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Speaker 1: of Spare Bank, Gammon Graff. I mean there are liberal,

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Speaker 1: Western oriented e communists who have consistently called for major

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Speaker 1: reforms over the last year two will be year and

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Speaker 1: two year or two UM. They exist, UM. I think

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Speaker 1: they have ideas of what they would want to do.

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Speaker 1: The problem is that Putin doesn't call him them, and

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Speaker 1: the longer he waits, the tough of the recovery will be.

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Speaker 1: This is fascinating. Let's come back William Powers with us

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Speaker 1: with the Cannon Institute. UM. The Wilson the will Wood

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Speaker 1: Wilson International Center for Scholars Washington with his UH today.

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Speaker 1: This is just absolutely fascinating. I want to come back,

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Speaker 1: Michael McKee and really touch on NATO that has been

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Speaker 1: so much in the news, not only comments from Mr Trump,

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Speaker 1: but in our coverage and it close are many interviews

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Speaker 1: with animals. Tevitas from Fletcher School formerly with his work

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Speaker 1: with NATO in the United States Navy. So maybe I mean, like,

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Speaker 1: I'm sure you've got eight themes. I mean, we could

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Speaker 1: talk about at old Vetchkin in the Washington Matters. You know,

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Speaker 1: he's been having quite a quite a run. Yeah, quite

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Speaker 1: a run to say that. The question is he's only

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Speaker 1: got a few games left and whether he can get

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Speaker 1: to fifty goals or not. That's gonna be which in

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Speaker 1: this era would be folks for those who don't follow hockey.

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Speaker 1: Fifty goals in this year of hockey is an extraordinary accomplishment.

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Speaker 1: We'll see if he as a last night, Oh ways

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Speaker 1: to go, good luck with that. UH. Features up five, down,

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Speaker 1: features up thirty five again. Watching Yen stronger really over

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Speaker 1: the last week. One ten forty is still really something.

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Speaker 1: One ten thirty nine with a stronger yen. I'd also

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Speaker 1: point out German yields. A journal did a nice uh

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Speaker 1: spread on that today, the tenure point one one seven

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Speaker 1: on the Germany tenure yield I'm not a check in

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Speaker 1: with Michael bar and get the latest world and national headlines. Michael, Mike, Tom,

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Speaker 1: thank you very much. The presidential front runners are trying

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Speaker 1: to reset at following the defeat of Republican Donald Trump

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Speaker 1: and Democrat Hillary Clinton in the Wisconsin primaries. The next

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Speaker 1: battle ground is home tour for both candidates as New

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Speaker 1: York holds its delegate rich primary on April nineteen. By

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Speaker 1: winning Wisconsin, Trump rival Ted Cruz closed the delegated gap

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Speaker 1: and he increased the chances of an open convention in July.

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Speaker 1: Democrat Bernie Sanders went in Wisconsin. A new report estimates

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Speaker 1: that about twenty million Bangladesh she's are still being poisoned

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Speaker 1: by arsenic tainted groundwater drawn from government wells. That report

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Speaker 1: is from Human Rights Watch Global News twenty four hours

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Speaker 1: a day, powered by our twenty four hundred journalists more

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Speaker 1: than one d bureaus from around the world. I'm Michael Barr.

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Speaker 1: Michael Barn correction, Alexander election has he's got three games left.

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Speaker 1: And on the title sports, may we note Michael McKee's

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Speaker 1: bracket jaw dropping brilliance from mckeeth this year with the

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Speaker 1: NC double A. It's Bloomberg Surveillance. Bloomberg Surveillance is brought

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Speaker 1: to you by a Bank of America. Mary Lynch, committed

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Speaker 1: to bringing higher finance to lower carbon named the most

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Speaker 1: innovative investment bank for climate change and sustainability by the banker.

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Speaker 1: That's the power of global connection to Bank of America.

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Speaker 1: In a fdi C Global Business News twenty four hours

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Speaker 1: a day. If Bloomberg dot com the radio plus mobil

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Speaker 1: and on your radio, this is a Bloomberg business flash

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Speaker 1: and I'm Karen Moscow. U S stock Index futures are

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Speaker 1: moving higher this morning, and let's go to the first

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Speaker 1: Word breaking news desk for today's morning call. Here's Vince.

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Speaker 1: Here's Vince Signarella. Good morning, Vince, Good morning, Karen. US

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Speaker 1: futures R and D tart downs up three s and

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Speaker 1: P up by two. NAS Deck up six and a half.

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Speaker 1: The tenure yield is training slightly higher at one point

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Speaker 1: seven four percent. The dollars broadly higher. Crude prices are

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Speaker 1: On the US economic front, at ten thirty, the Department

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Speaker 1: of Energy releases its inventory report. Twelve twenty FEDS Mester

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Speaker 1: of today's top news, Fighter terminates its proposed one dred

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Speaker 1: and sixty billion merger with Alegan. Nokia will reduce its

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Speaker 1: Alcatel deal. Puerto Rico House approves a moratorium on bond payments,

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Speaker 1: and Breman Howard's main hedge fund sais we've lost two

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Speaker 1: percent in March erasing earlier games. Live from the First

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Speaker 1: Word Breaking news desk, I'm Vincent Signarella Karen alright, thanks

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Speaker 1: Vincent to hear live breaking news of your Bloomberg type

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Speaker 1: squawk and go on your terminal. Let's s you a

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Speaker 1: w K go and that's a Bloomberg business flash. Tom

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Speaker 1: and Mike, Karen, thank you so much again. Ye in

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Speaker 1: one six is when I'm watching UM this morning, a

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Speaker 1: Will palmerance with us UH, with the can in the

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Speaker 1: institute Will I'm sure it's a topic that's come up now. Uh.

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Speaker 1: NATO is the new Pinata, Maybe it's always been the

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Speaker 1: pin YadA. Where are we in the linkage of the

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Speaker 1: Atlantic Charter of I believe it was through to the

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Speaker 1: different agreements in this one institution that's been the anchor

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Speaker 1: for all of Europe. Is the anchor really going to

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Speaker 1: go away? Well? I think the anchor is still there,

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Speaker 1: and there's been a clear commitment to make sure that

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Speaker 1: NATO defends the East European countries that joined in the

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Speaker 1: aftermath as the collapse of the Soviet Union. So there's

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Speaker 1: been obviously increased commitment to defending Poland, UH and the

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Speaker 1: Baltic States and other countries, and there's talk of actually

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Speaker 1: stationing troops inside NATO. What's very interesting from my perspective

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Speaker 1: is that disconnect between the demand of NATO and the

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Speaker 1: recognition of Russia as a potential threat in Europe and

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Speaker 1: the statements by various EU leaders which have who have

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Speaker 1: called for the end of the sanctions regime against Russia.

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Speaker 1: I think that's really the interesting disconnect that's taking place

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Speaker 1: inside Europe that on the one hand, there is a

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Speaker 1: recognition of the problem that Russia faces from a military poses,

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Speaker 1: from a military standpoint, yeah, at the same time, the

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Speaker 1: political leaders and the EU and the EU leaders UM

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Speaker 1: are at least talking about whether they want to continue

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Speaker 1: the sanctions regime. UM. There's debate as to to what

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Speaker 1: extent sanctions have worked or not worked against Russia. But

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Speaker 1: it would be very interesting if sanctions were lifted by

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Speaker 1: the EU at the same time that NATO increased its

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Speaker 1: defenses against Russia. What is it that NATO actually does

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Speaker 1: at the moment? I mean, is there still any chance

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Speaker 1: it's that Putin's Russia would militarily invade countries or is

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Speaker 1: this more of a sphere of influence kind of thing. UM.

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Speaker 1: I think it's still remains highly unlikely that Putin would

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Speaker 1: attack a NATO member country because as soon as he

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Speaker 1: attacks the NATO member country, Article five requires that all

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Speaker 1: countries come to the defense of that NATO allied. So

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Speaker 1: I think it remains highly unlikely that Putin wants to

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Speaker 1: do this or would do this. UM. If indeed, he's

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Speaker 1: looking to escalate a crisis. Um. It's more likely that

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Speaker 1: he would do it in the post Soviet space, whether

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Speaker 1: it be in Ukraine or other parts where there are

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Speaker 1: still significant Russians living in outside the Russian the borders

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Speaker 1: of the Russian Federation. But is the reason he would

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Speaker 1: not invade NATO is there or because it wouldn't make

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Speaker 1: financial economic sense for him to do so. He wouldn't

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Speaker 1: be able to sustain any kind quest, It wouldn't make

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Speaker 1: any financial uh sense. But Putin necessarily isn't only worried

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Speaker 1: about financial sense. Uh. Clearly he hasn't. The threat of

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Speaker 1: sanctions on the imposition of sanctions hasn't stopped him in

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Speaker 1: in Ukraine. UM. And so I think that you shouldn't

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Speaker 1: assume that he only bases his decisions on financial markets

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Speaker 1: or financial decisions. He's clearly making his decisions based on

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Speaker 1: his ability to stay in power and to sustain himself

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Speaker 1: in power. And that's a whole different calculations than Western

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Speaker 1: politicians who wants to get re elected. And Dr Pameran's

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Speaker 1: in the time we've got left, Let's go back to

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Speaker 1: your wheelhouse, which is international law and making up the

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Speaker 1: roles all of our listeners look at Panama. Guernsey is

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Speaker 1: the playground of the wealthy. It's it's it's something that's

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Speaker 1: out there. We've all known, it's been there. Now we've

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Speaker 1: got this uproar over the Panama papers. Are the elitest

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Speaker 1: playing with a full deck on a historical basis? Or

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Speaker 1: is this a new regime of bad bad? You know?

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Speaker 1: Is Dustin often said in Peter Pan or Pan or

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Speaker 1: whatever the movie was bad form? Is it bad form

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Speaker 1: now by the elites? Well? I think what's uniquely knew

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Speaker 1: about this process is the underlying assumptions we had in

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Speaker 1: the nine nineties about how we're going to transform uh

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Speaker 1: new democracies in Eastern Europe. And the assumption was that

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Speaker 1: property rights would be an important path to that transition,

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Speaker 1: and that property rights would then be exercised domestically and

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Speaker 1: would be able to play a role in the political

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Speaker 1: evolution of these post Soviet states. I think what we've

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Speaker 1: learned over the last twenty five years is money as

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Speaker 1: a much Money is much more fluid today than it

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Speaker 1: was twenty five years ago, and money will take places

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Speaker 1: where it's perceived as safer, and so the new regime

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Speaker 1: is that the property rights that we create in these

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Speaker 1: new countries don't necessarily have the political impact that they

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Speaker 1: would have had twenties fifty years ago. Instead, the people

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Speaker 1: who gain property rights in these countries take to push

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Speaker 1: those rights off shore because that is where their property

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Speaker 1: is safest. And I think if there's a new regime,

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Speaker 1: it's not about elites necessarily. Um these other rules of

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Speaker 1: the game, and it's the West who created them, and

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Speaker 1: it's other countries that can see how they can take

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Speaker 1: advantage of them. Will Palmerans, thank you so much. William

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Speaker 1: Palmer Its is a deputy director to the Kennan Institute

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Speaker 1: Woodrow Wilson Center, Washington. Like that was fascinating. I really

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Speaker 1: learned a lot there well, especially in the context of

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Speaker 1: some of the things being said out on the campaign truck. Yeah,

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Speaker 1: well there's always the camp and as we heard earlier

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Speaker 1: from Mr Gallo, Mr Frank Strong and Gallop, the idea

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Speaker 1: that the dialogue will change once they're done in the

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Speaker 1: primary season. Well, Mike and I are sort of we're

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Speaker 1: glad we're doing economics, finance and international nation is with

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Speaker 1: our dose of Brett bere and chucked out and Megan

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Speaker 1: Murph feeing the rest of our political types stay with

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Speaker 1: the Bloomberg savants coming up there. With all due respect.

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