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Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene

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Speaker 1: Jay Ley. We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Ready

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Speaker 1: placed to say, we've got a class act in the

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Speaker 1: studio today, how would Wards ce io of Growth Equities

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Speaker 1: for Kabelly Funds? Good morning to you, Howard. How much

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Speaker 1: damage have we done? How long's it hate to recover

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Speaker 1: from something like this? We're up three four percent, We're

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Speaker 1: down two percent next day, same thing, following day, different

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Speaker 1: well last week um in about seven days the smp

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Speaker 1: F i've hond it erased two and a quarter years

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Speaker 1: of gains UM. So the damage has been severe. We

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Speaker 1: were down on closing prices at the low I think

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Speaker 1: from there the high of ten days or so ago.

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Speaker 1: So significant damage. And typically when you have that kind

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Speaker 1: of damage, the market doesn't snap back. Now, if you

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Speaker 1: have a fat finger flash crash where it's not a

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Speaker 1: function of deteriorating economic fundamentals, the market can snap right back.

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Speaker 1: That's not the case here. We have a global healthcare

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Speaker 1: crisis emerging and people are resetting their expectations for growth

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Speaker 1: and earnings, and UH stocks are resetting as a result.

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Speaker 1: So it takes a while to recover from the amount

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Speaker 1: of technical damage the market has incurred. And I'm talking

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Speaker 1: about a period of months. You're a good friend of

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Speaker 1: this probagram, which makes I'm gonna privilege position to know

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Speaker 1: what you're doing, what you're positioned. I'm made a single

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Speaker 1: trite a few over the last couple of weeks. No,

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Speaker 1: I haven't. Now you know, the the qualifier there is

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Speaker 1: that in our Gabelly Growth and Global Growth funds, we

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Speaker 1: have had a defensive UH tilt on the portfolio now

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Speaker 1: for two years and UH. The good thing is for

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Speaker 1: two years, actually defensive growth stocks have generally outperformed, and

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Speaker 1: during the crisis of the last two weeks that our

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Speaker 1: performance has continued. So I haven't felt compelled to get

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Speaker 1: more defensive because we were gaining ground during the during

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Speaker 1: the decline. UM. If I had not been defensive, then

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Speaker 1: maybe I would have done something. But I literally haven't

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Speaker 1: done a trade for the last eight or nine days,

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Speaker 1: so I don't know if I'm earning my keep or not.

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Speaker 1: But it's questionable. Is Apple of defensive stock um in

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Speaker 1: the short run time? I don't think it is um

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Speaker 1: And that's because you know, all of the big gains

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Speaker 1: last year, which were at the peak about percent year

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Speaker 1: over year, were driven by multiple expansion, and part of

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Speaker 1: that was market related, and part of that, part of

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Speaker 1: that was an anticipation of a big new cycle of

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Speaker 1: five G phones coming out in the third quarter or

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Speaker 1: actually their fourth quarter later this year. And of course

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Speaker 1: now you have the multiples coming in a bit, and

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Speaker 1: you have the earnings estimates coming down. Tim Cook has

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Speaker 1: already come out and said they're not going to make

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Speaker 1: their numbers. They're having supply chain disruption. Of course, they're

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Speaker 1: somewhat dependent, more dependent on China than many companies for

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Speaker 1: parts and from for assemblage. Why is it only seven

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Speaker 1: percent beneath its record high? I mean, you're talking to

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Speaker 1: me about a stock down fifteen or and we're not

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Speaker 1: observing that some not just Apple, but other stocks as well.

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Speaker 1: Why are they holding in so well well? Why? You know,

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Speaker 1: I would argue, why is the overall market doing as

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Speaker 1: well as it is. I don't think the overall market

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Speaker 1: has yet come to the conclusion that the earnings estimates

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Speaker 1: on the SMP this year are not going to be

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Speaker 1: a hundred seventy five dollars, which was the expectation going in.

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Speaker 1: They're not gonna be a hundred and seventy two dollars,

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Speaker 1: which is where some analysts are right now. They're probably

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Speaker 1: gonna be a hundred sixty five dollars, which will be flat,

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Speaker 1: and they might very well be negative. And it's when

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Speaker 1: you have negative earnings growth in a period of UH

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Speaker 1: widening credit spreads and higher global risks, that's when stocks

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Speaker 1: take the most pain. And so I'm being willing to

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Speaker 1: air on the side of conservatism here in my in

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Speaker 1: my comments to tell people that this market is gonna

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Speaker 1: We're gonna have updates in this market, like like we

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Speaker 1: did yesterday, but if earnings go negative, we're going to

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Speaker 1: new lows. And it might even not even take negative

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Speaker 1: earnings to take us to new lows. It's gonna be

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Speaker 1: a volatile market, and I think that the trend is

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Speaker 1: going to be negative for a while, and at least

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Speaker 1: of the read of the morning with our question, John

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Speaker 1: Plunder with a substantial article in the FT just on

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Speaker 1: that the credit spreads and the challenges within the debt market,

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Speaker 1: and now they then fold into the equity market. And

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Speaker 1: right now we're seeing spreads Titan. We're actually seeing people

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Speaker 1: come into particularly riskier credit on this bet that the

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Speaker 1: FED will continue to lower rates and it will push

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Speaker 1: money into risk your assets, Howard, though I do wonder

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Speaker 1: what will make you buy. I want to see the

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Speaker 1: UH newsflow on the virus show that we're over the

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Speaker 1: hump and that it is receding. And I have no

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Speaker 1: idea when that's going to be, whether that is in

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Speaker 1: a month, two months, three months, four months, I don't know,

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Speaker 1: and neither does anybody else, and it's really important for

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Speaker 1: those just waking up across America. Good morning, Boston, New York, Washington,

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Speaker 1: of course early early mornings at Bloomberg the Bay Area, John.

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Speaker 1: The major message today is, just as we've heard from

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Speaker 1: viral experts, the viral news, the piece here, the piece there,

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Speaker 1: the piece there, it's increased substantially this morning. But how

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Speaker 1: it's Nowaday and you brought up Happo. We've adjusted the

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Speaker 1: earnings estimates for what's happened in China. We haven't even

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Speaker 1: started to do that for Europe. We haven't even started

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Speaker 1: to look at what it means for the United States.

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Speaker 1: And if I was looking at this market right now

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Speaker 1: for the second half, the rest of ward profile needs

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Speaker 1: to shift rapidly. If you move the eight down a lot,

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Speaker 1: a lot, then I imagine how it you might be

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Speaker 1: a little bit more constructive. Right now, let me tell

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Speaker 1: you what happened in the two thousand two thousand two

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Speaker 1: dot com bubble bursts. UM stocks declined obviously substantially, and

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Speaker 1: in a number of stocks, particularly technology kinds of stocks

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Speaker 1: that we wanted to buy had declined. Uh, and we thought,

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Speaker 1: what a great opportunity, let's buy more, and we did

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Speaker 1: only and at that point in time, in talking to

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Speaker 1: the CEOs of those companies they said business was great.

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Speaker 1: It wasn't. They either didn't know, or they weren't being honest,

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Speaker 1: or some combination of the above. Earnings estimates then got

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Speaker 1: caught another and the stocks went down with them. It

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Speaker 1: was a horrible move to be too quick back into

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Speaker 1: the market. Equating what we have right now to what

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Speaker 1: you and I lived in a one. I'm thinking, I

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Speaker 1: don't want to be too gloom and doom, but I

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Speaker 1: think the potential is here for a drawn out period

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Speaker 1: of estimate reductions because we just don't know now. Having

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Speaker 1: said that, when the smoke does start to clear, I

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Speaker 1: think we'll have a strong recovery. So you don't want to,

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Speaker 1: you know, wanta take your eyes off this situation with

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Speaker 1: all this liquidity, with rates, the slow with the economy

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Speaker 1: wing well go. You know, through February the economy was fine,

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Speaker 1: but when the I want to wait until the smoke

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Speaker 1: starts clear, and at that point then you really want

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Speaker 1: to I think it more aggressive. But until then because

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Speaker 1: we don't know when then then is and from what

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Speaker 1: level I'm preaching patients, Well, howbou At this point it

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Speaker 1: sounds like you're wanting for more smoke, never mind for

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Speaker 1: it to clear, and I'm just wondering to be waiting

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Speaker 1: for more more revisions to earnings. Where are you expecting

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Speaker 1: them to be concentrated? Which sector right now? Or is

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Speaker 1: this broad based on the SMP five, Well, you're more

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Speaker 1: cyclical industries tend to be the ones that get hurt

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Speaker 1: the most. And where is they're the most pain today? Energy?

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Speaker 1: You know you're seeing that with the OPEC talking about

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Speaker 1: cutting cutting supply. The commodity based businesses have high beta

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Speaker 1: relative to economic growth and so they're going to suffer. Materials, energy,

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Speaker 1: and industrials are the three areas that tend to get

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Speaker 1: hurt the most during this type of a weakening economy

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Speaker 1: estimate reduction period. How would well see? I of growth

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Speaker 1: aquities Forcabully Funds. Great to catch up with you this morning.

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Speaker 1: Jeffrey Curry joins the snout from London, of course, driving

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Speaker 1: all of their commodity coverage as well. Jeffrey, I must

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Speaker 1: have you look at the headline. I'm not sure you've

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Speaker 1: seen it. It's only been in the last minutes across

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Speaker 1: the Bloomberg terminal the Saudi Oil Minister. We will see

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Speaker 1: tomorrow if the Russians are on board. Let's talk first principles.

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Speaker 1: Why does OPEC and the Saudias need the Russians on board?

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Speaker 1: Um because they need to have as large as a

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Speaker 1: cut as possible. But we like to argue, no matter what,

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Speaker 1: it's too little, too late. The damage to demand, particularly

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Speaker 1: in China, occurred three to four weeks ago, UM, and

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Speaker 1: now you have it in materializing in the West. The

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Speaker 1: total demand decline is somewhere around four to five million

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Speaker 1: barrels per day at this point, potentially even larger so

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Speaker 1: cutting one and a half million barrels per day in April,

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Speaker 1: it's really gonna have no right back. So your downside

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Speaker 1: risk is baked in. The question is how can they

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Speaker 1: normalize inventories over the course of the year, and they

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Speaker 1: need the support from the Russians. Give us one example,

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Speaker 1: and this goes back to the Jeff Curry microeconomics of

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Speaker 1: decades ago. You're teaching microeconomics at Chicago years ago. Give

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Speaker 1: us one example of how microeconomics a just price. Give

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Speaker 1: us one example where somebody takes a lower price in

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Speaker 1: oil because of a lack of demand. I think that

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Speaker 1: the biggest margin of adjustment is going to be as

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Speaker 1: inventories begin to fill because of the fact that demand

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Speaker 1: is far lower than supply is. Does the building inventories

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Speaker 1: overwhelm the ability of the system to accommodate those inventories,

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Speaker 1: and we call that breaching inventory capacity. If that were

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Speaker 1: to happen, you really open up the downside and oil,

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Speaker 1: and we could see prices going sub forty down into

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Speaker 1: the low thirties. Our base case is we avoid that

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Speaker 1: and we end up with prices in the low forties.

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Speaker 1: Low forties. Is still the banks, Brent and that's on

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Speaker 1: Bran and this is Brent from doty one cents. Yeah,

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Speaker 1: so that's huge. Yeah, you got a lot more downside.

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Speaker 1: I mean, let's let's remind you that Hit to the

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Speaker 1: Man is on par with oh eight o nine, if

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Speaker 1: not even larger in terms of the high frequency data. Um,

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Speaker 1: you know, this is one of the biggest events we've

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Speaker 1: ever seen in our lifetimes. You just shut down the

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Speaker 1: second largest economy in the world. It's going to have ramifications, Jeff.

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Speaker 1: The interesting part of this, though, is the other asset

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Speaker 1: classes can look through the shock and price in a

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Speaker 1: better second half. Just torch us to us about a

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Speaker 1: difference between commodities, say, and equities as an asset class

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Speaker 1: and why it's just a different story. Excellent question. Um.

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Speaker 1: We like to argue that commodities are spot assets. The

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Speaker 1: price has to clear today's supply and demand. In contrast,

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Speaker 1: financial markets are anticipatory assets. They anticipate the future because

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Speaker 1: remember you're taken equity, it's nothing other than the discounted

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Speaker 1: some of future earnings, and so they can price in

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Speaker 1: the stimulus, the rate cut and all of that. Commodities

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Speaker 1: have to deal with the surplus today. So I like

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Speaker 1: to say there's a tug of war between surplus and

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Speaker 1: stimulus and commodities in particular COT in the middle of

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Speaker 1: that tug of war, how are you expecting as a

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Speaker 1: result of potentially thirty dollar barrel oil UM? You know,

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Speaker 1: I mean that's you know, if we got into that,

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Speaker 1: that would it would damage the industry. But I like

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Speaker 1: to point out the oil patch was already in very

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Speaker 1: poor financial health even at fifty sixty of barrel UM.

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Speaker 1: You know, that could be you know, you can see

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Speaker 1: it in the equity industries UM that they have come

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Speaker 1: down sharply. In fact, I think it was on either

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Speaker 1: Friday or Monday the equity energy industry hit an all

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Speaker 1: time low. What does XN do? Yeah, I think Exxon

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Speaker 1: is unique from the rest of them is that they're

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Speaker 1: investing in conventional UM oil supplies UM on a forward basis.

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Speaker 1: No other company is making large scale investment like that.

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Speaker 1: They're either doing like in Europe, or doing renewables and

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Speaker 1: gas UM. So if we look out forward, because of

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Speaker 1: the environment right now and the poor financial health of

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Speaker 1: the industry, we're going to see under investment when you

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Speaker 1: get into one and beyond, And so those who make

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Speaker 1: investments right now, are going to be well positioned a

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Speaker 1: year or so from now. Jeff, what's the Jeff Curry interview?

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Speaker 1: If we don't bring up gold, let's talk about it.

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Speaker 1: What's happening? Some dates were down aggressively when I'd expect

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Speaker 1: us to have a bit because it's risk off, and

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Speaker 1: then we're down on gold and it doesn't make sense

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Speaker 1: to me. And people are talking about things like marching cools.

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Speaker 1: What is the dynamics that a plank out at gold

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Speaker 1: market at the moment? Well, if you think about you know,

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Speaker 1: when you have panic um set in because of markets

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Speaker 1: coming down, you need to raise cash to hit your

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Speaker 1: margin calls. And the most winning position over the last

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Speaker 1: year or so really has been being long gold, and

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Speaker 1: it was a at a very high level of lengths.

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Speaker 1: So when you need to raise cash, you always go

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Speaker 1: to your winners and sell them, and that's why you

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Speaker 1: get that initial knee jerk reaction. But we've demonstrated as

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Speaker 1: you look further out, the longer the sell off goes,

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Speaker 1: the better gold begins to perform. And I like to

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Speaker 1: argue gold is immune to the to the virus. Right now,

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Speaker 1: you know populations can get it, but gold is your

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Speaker 1: currency of last resort, your price target. Jeffrey quickly here

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Speaker 1: on gold eight hundred dollars and ounce lots of upside

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Speaker 1: from here. It's Curry. Thank you so much. Jeffrey Cray

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Speaker 1: with Golden Saxas morning from our studios in London. Lisa,

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Speaker 1: I wrote an essay for LinkedIn, which is a great

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Speaker 1: plurage to do that for Dan Roth and Victoria Taylor

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Speaker 1: and the team over at LinkedIn. And you know I'm

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Speaker 1: doing stuff like how I mean, people ask me all

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Speaker 1: the time, how do you do the reading? How do

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Speaker 1: you know what not to read? And all that? And

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Speaker 1: I did this one on mathematics, and to make a

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Speaker 1: long story short, it was that the whole anst if

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Speaker 1: you're out in the business world and you sort of

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Speaker 1: remember doing your math like long ago and far away,

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Speaker 1: and how do you get back in the math game gently?

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Speaker 1: And it was a bunch of books and all that.

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Speaker 1: And two thirds of the way through the essay I said,

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Speaker 1: you have to read people who do math inherently in

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Speaker 1: their work. And one of the best in the world

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Speaker 1: is James Bianco. He is just brilliant of how he

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Speaker 1: pulls in charts and doesn't mean usually it's in a

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Speaker 1: summit what's called a semilog basis. I'm not going to

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Speaker 1: go to the math right now. We don't do math

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Speaker 1: on Thursday and Bloomberg surveillance, but I was thrilled to meension.

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Speaker 1: Jim Bianco is LinkedIn feed is outstanding. Jim Bianco, one

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Speaker 1: of my absolute favorites, president and founder of Bianco Research,

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Speaker 1: joining us now from Chicago. And Jim, I'm looking right now,

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Speaker 1: we've been all watching two your yields plunge to session lows,

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Speaker 1: the lowest level since two thousand sixteen, zero point five

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Speaker 1: eight five because Tom likes to break it out to

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Speaker 1: four h two places. And I'm looking right now at

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Speaker 1: the warp screen on the Bloomberg terminal pricing in almost

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Speaker 1: four rate cuts now by the end of next jan

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Speaker 1: where we are now correct correct the implied rate zero

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Speaker 1: point to nine eight percent by January one, And I'm

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Speaker 1: trying to understand, Jim, how quickly do we get to zero?

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Speaker 1: Maybe two weeks, it could be that quick. Right now,

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Speaker 1: your warp screen, which is your world interest rate probability screen,

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Speaker 1: is telling us that there's going to be a fifty

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Speaker 1: basis point cut on March eighteens, and that would take

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Speaker 1: us down to five eighths of percent now without getting

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Speaker 1: to in the weeds. The Fed's got another problem that

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Speaker 1: they didn't anticipate. As they announced that they're going to

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Speaker 1: um cut rates, and as the market expects they're going

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Speaker 1: to cut rates, people that have their money in overnight

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Speaker 1: UH money like overnight repow or one day maturity type

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Speaker 1: of commercial paper and stuff are saying those rates are

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Speaker 1: gonna fall, So I'm going to move out to three

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Speaker 1: and six months paper to try and mitigate my reinvestment risk.

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Speaker 1: I'll take that higher yield UH and I'll lock it

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Speaker 1: away for three months. So what's happening is money or

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Speaker 1: liquidity is being drained out of the banking system because

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Speaker 1: it's leaving the banking system and going to longer securities.

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Speaker 1: And that's why you're seeing this big jump in the

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Speaker 1: amount of repos that the street is asking for. If

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Speaker 1: the FED wants to drag this out and just say

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Speaker 1: well we'll we'll cut twenty five or fifty in March

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Speaker 1: and maybe fifty in April, there will be no money

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Speaker 1: left in the banking So this is this is really

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Speaker 1: important to him. Are you saying that the FED needs

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Speaker 1: to cut rates by fifty basis points on March eighteen,

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Speaker 1: or else we are going to have a fundamental plumbing

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Speaker 1: problem in the financial system. I'm gonna go you one

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Speaker 1: step further. We have a plumbing problem in the financial

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Speaker 1: system right now. Uh and it is being covered by

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Speaker 1: the FEDS new facility that they've put in place. But

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Speaker 1: the Street Wall Street is asking for more assistance than

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Speaker 1: the caps that the FED is put on it. Today,

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Speaker 1: they said that they would offer billion dollars of what's

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Speaker 1: called fourteen day term repo. The Street asked for seventy

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Speaker 1: billion dollars of assistance and they only got twenty in

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Speaker 1: help right now. So the reason is all that money

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Speaker 1: is leaving because it knows those rates are going to

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Speaker 1: go down, and it's going too longer term securities. And

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Speaker 1: if the FED is going to drag their feet in

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Speaker 1: cutting rates, we will cut meeting five next meeting. This

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Speaker 1: is going to create a bigger plumbing problem. So if

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Speaker 1: you're ultimately thinking about going to zero by the picking

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Speaker 1: half of this year, do it in two weeks. This

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Speaker 1: because the time limitations today, Jim Bianco, and this is

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Speaker 1: so important. Do you find an efficacy and alternatives to

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Speaker 1: rate cuts, or is rate cuts the blunt instrument that

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Speaker 1: only works well. Race cuts is the blunt instrument that

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Speaker 1: they work. The only other instrument that they have that

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Speaker 1: they could use at this point would be to expand

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Speaker 1: their balance sheet, which is what we now know as QUEI.

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Speaker 1: I wanted to say traditional QUEI, I guess that's what

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Speaker 1: it's become now it's more traditional. I don't think negative

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Speaker 1: interest rates or any of those other things would be

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Speaker 1: very effective effect out. Those would be very counterproductive um

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Speaker 1: at this point. So the Feds got kind of two

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Speaker 1: targets that they're looking at. Their looking at what this

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Speaker 1: virus means, what we're fearing it means for the economy

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Speaker 1: in two, three or four weeks whitespread shutdown disruption and

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Speaker 1: the fact that they are cutting rates that act is

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Speaker 1: creating a plumbing problem on top of everything else. I mean,

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Speaker 1: promis being handled for now, but just for now, it

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Speaker 1: doesn't mean that they've got it permanently solved. Jimmyako, thank

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Speaker 1: you so much. Too short of visit. We look for

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Speaker 1: a much longer visit next time. Mr brianco in Chicago

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Speaker 1: greatly greatly appreciate it. Right now, the banker who is

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Speaker 1: an engineer, Jean Cautriche Jarnes, this is a former president

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Speaker 1: of the European Central Bank, and we are thrilled Mr Triche,

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Speaker 1: you could be with us today. I want you to

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Speaker 1: take your engineering and the dynamics that you know cold

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Speaker 1: and that is the new discussion of supply shifting worldwide

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Speaker 1: and demand shifting worldwide. Which are you more concerned about

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Speaker 1: the supply shocks or the demand shocks? To come well

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Speaker 1: first the way, it's a pleasure to be with you, Tom,

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Speaker 1: I would say that the problem is that we have

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Speaker 1: both the supply shock and the demand shock. At the

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Speaker 1: very beginning, one could have said, perhaps it is on

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Speaker 1: the supply shock we can do nothing as regards the

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Speaker 1: centple banks. Of course, as regards the supply shock, and

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Speaker 1: and then let's wait for the cornavirus to be to

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Speaker 1: be to be eliminated and then we have a V

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Speaker 1: shaped recovery. Unfortunately, we see now taking into account globalization,

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Speaker 1: the supply chain at a global level, and all the

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Speaker 1: consequences of the fear that is accompanying this epidemic or

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Speaker 1: this pandemic, we see that there is a demand shock also,

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Speaker 1: and we have both together at the global level. And this,

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Speaker 1: of course is something which calls for appropriate decisions not

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Speaker 1: only by sample banks, of course, but by all partners

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Speaker 1: without exception. And if I may tom, I am a

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Speaker 1: little bit annoyed that we hear a lot from the

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Speaker 1: G seven from the industrialized country. We I heard nothing

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Speaker 1: from the G twenty. And we have clearly a global issue,

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Speaker 1: a global problems, with a lot of emerging countries being

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Speaker 1: at the heart of the problem, including of course China.

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Speaker 1: So it seems to me that it has to be

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Speaker 1: taken up at the global level, and not only at

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Speaker 1: the level of the G seven. Presidental sharing going to

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Speaker 1: rip up the scripture. And I do this with great

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Speaker 1: respect for Chairman Power and Christine Lagarde with your criticism

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Speaker 1: of a need for a global action. Should we have

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Speaker 1: seen a coordinated response with Chairman Powell the other day,

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Speaker 1: Did they miss a moment by not linking together their actions. Well,

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Speaker 1: you know that I have experienced myself coordinated action with

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Speaker 1: a fifty basis point diminishing on October two, after demand bothered.

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Speaker 1: I have to say at the time the drama was

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Speaker 1: unfolding in a much worse manner. If I may so,

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Speaker 1: the idea that we had at the necessity to coordinate

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Speaker 1: action at the level of the major central bank was

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Speaker 1: something very natural. I'm not sure that it was really

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Speaker 1: more appropriate in this time. It could have also had

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Speaker 1: an impact of panicking, if I may, or giving the

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Speaker 1: message of too much of a panic. So I think

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Speaker 1: it's okay. What has been done is okay. I don't

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Speaker 1: regret the coordination action. Zean claud Tricia. One of the

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Speaker 1: arguments that you could put forward as to why there

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Speaker 1: wasn't coordinated action is the other central bankers think the

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Speaker 1: coming rates is a mistake. Could that be the case? Well, again,

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Speaker 1: each central banks as its own responsibility in its own

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Speaker 1: law and legislation or treaty. So I think that there

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Speaker 1: is no general rule to apply to everybody. That's one

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Speaker 1: of the problems of I would say, governance in Europe

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Speaker 1: as well as in the world. It is that the

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Speaker 1: recommendations under the same for all. At this stage, I

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Speaker 1: would say, the main problem, it seems to me, is

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Speaker 1: really to make liquidity available to all, credit available to all,

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Speaker 1: and the amount they would say the supply of liquidity,

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Speaker 1: supply of credit is more important than the price that

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Speaker 1: the interest rate themselves but that depends, of course on

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Speaker 1: the various economies and countries concerned. In Europe. As you know,

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Speaker 1: we have introduced the idea of giving liquidity, giving supply

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Speaker 1: of liquidity without any limit, and that is still the case.

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Speaker 1: It was introduced at the moment of the Liman Model crisis,

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Speaker 1: but it is still the case. But of course availability

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Speaker 1: of credit remains something which is and will be much

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Speaker 1: more important in the present period. Do you think therefore

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Speaker 1: the e c P would be better to do more

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Speaker 1: tel trows to try and some find some way of

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Speaker 1: getting credits into the supply Shanes Andrew Bailey was just

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Speaker 1: talking about that rather than cutting rates. Do you think

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Speaker 1: that the Mortel throws more kind of liquidity injections into

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Speaker 1: the banking sector that would be a better way to

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Speaker 1: go for the e c being rather than cutting another

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Speaker 1: ten bits off the deep I rate. I have no

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Speaker 1: recommendation to make to the ECB. The Governing Council has

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Speaker 1: taken excremely wise decision since since the crisis, so I

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Speaker 1: have full confidence on the fact that they will do

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Speaker 1: what is appropriate yet in the case. But it's clear

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Speaker 1: that availability of credit will be something absolutely essential all

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Speaker 1: over the the Your area. Whatever the level of interest

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Speaker 1: rate is. One of the great debates, Mr Trouchet, that

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Speaker 1: we're seeing right now is the idea of disinflation or

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Speaker 1: following on a greater inflation, Which way will price change cut.

431
00:23:51,720 --> 00:23:56,400
Speaker 1: Do you anticipate dampened economic growth in disinflation or can

432
00:23:56,440 --> 00:24:02,280
Speaker 1: you worry about an inflation from another time and place. Well,

433
00:24:02,359 --> 00:24:05,800
Speaker 1: it's again it is the complexity of the situation, which

434
00:24:05,880 --> 00:24:10,800
Speaker 1: is illustrated by the fact that the supply shock itself

435
00:24:11,240 --> 00:24:16,160
Speaker 1: could transmit some kind of inflationary pressure. At the same

436
00:24:16,200 --> 00:24:20,440
Speaker 1: time the demand shock, which is the consequence of corna virus,

437
00:24:20,800 --> 00:24:23,960
Speaker 1: has exactly the river the opposite consequence. So we we

438
00:24:24,040 --> 00:24:28,080
Speaker 1: will see exactly where we stand. It's a very complicated story,

439
00:24:28,560 --> 00:24:32,440
Speaker 1: but it's clear that the supply shock element has an

440
00:24:32,480 --> 00:24:40,240
Speaker 1: inflationary potential. UH Eurozone five year five years currently setting

441
00:24:40,280 --> 00:24:43,960
Speaker 1: at one point one percent, a little low for the

442
00:24:44,040 --> 00:24:47,199
Speaker 1: last five years. Jean Clautricia, the former ECB president, he

443
00:24:47,359 --> 00:24:49,200
Speaker 1: is going to stay with us. Coming up later today

444
00:24:49,200 --> 00:24:52,520
Speaker 1: our exclusive interview with Dallas Faired President Robert Camplan. That

445
00:24:52,600 --> 00:24:55,120
Speaker 1: conversation coming up at five thirty pm in New York.

446
00:24:55,280 --> 00:25:32,160
Speaker 1: That's ten thirty pm in London. This is blown by

447
00:25:00,040 --> 00:27:22,520
Speaker 1: oh Guy Johnston in London. Tom Keen, of course, over

448
00:27:22,560 --> 00:27:25,360
Speaker 1: in New York. I'm sitting in for Franciling Lackwise. Jean Clautricie,

449
00:27:25,440 --> 00:27:27,879
Speaker 1: the former ECB president of Daniel Morris a b MP

450
00:27:27,960 --> 00:27:31,639
Speaker 1: parab Our asset Management, are still with us, Jean Clautriche

451
00:27:31,840 --> 00:27:34,639
Speaker 1: let me come back to you. Um, we were talking

452
00:27:34,680 --> 00:27:36,880
Speaker 1: before the break about what is happening with the economy,

453
00:27:36,920 --> 00:27:39,400
Speaker 1: the supply chain shocks that we are going to be experiencing.

454
00:27:39,880 --> 00:27:43,639
Speaker 1: How quickly do you think, um, stressed companies in the

455
00:27:43,680 --> 00:27:47,240
Speaker 1: euro Zone are going to be experiencing problems. How quickly

456
00:27:47,280 --> 00:27:48,879
Speaker 1: do you think bad loans are going to start to

457
00:27:48,920 --> 00:27:54,600
Speaker 1: pick up? Well, I think that, of course, nobody knows

458
00:27:54,640 --> 00:27:57,399
Speaker 1: exactly what is likely to be the dynamic of the

459
00:27:57,640 --> 00:28:01,240
Speaker 1: of the phenomenon, but it's clear that it is unfolding,

460
00:28:01,560 --> 00:28:05,879
Speaker 1: and it would be of a duration which might be

461
00:28:06,040 --> 00:28:08,760
Speaker 1: much more than what we think or what we thought

462
00:28:08,800 --> 00:28:12,440
Speaker 1: at the very beginning. Uh. That's the reason why I

463
00:28:12,520 --> 00:28:15,280
Speaker 1: make myself the point that it is very important that

464
00:28:15,359 --> 00:28:18,359
Speaker 1: created remains available. I would say I wouldn't make the

465
00:28:18,400 --> 00:28:22,159
Speaker 1: point also that we were already discussing the use of

466
00:28:22,840 --> 00:28:28,600
Speaker 1: fiscal weaponry before the corner virus exploded, and the fiscal

467
00:28:28,720 --> 00:28:33,280
Speaker 1: weaponry is very, very important. I am happy to see

468
00:28:33,320 --> 00:28:38,600
Speaker 1: that in the US the House of Representative has decided

469
00:28:38,880 --> 00:28:42,560
Speaker 1: to embark on some action precisely to to deal with

470
00:28:42,600 --> 00:28:45,800
Speaker 1: the corner virus. I would say in Europe it's absolutely

471
00:28:45,840 --> 00:28:50,160
Speaker 1: necessary also because there are some room for maneuvering on

472
00:28:50,200 --> 00:28:53,720
Speaker 1: the fiscal side, and that they are more important than ever,

473
00:28:53,840 --> 00:28:57,800
Speaker 1: of course, in the present context of a big problem

474
00:28:57,880 --> 00:29:03,040
Speaker 1: on the demand side. Presidentry Morris, excuse me, go ahead,

475
00:29:03,200 --> 00:29:06,560
Speaker 1: I'm sorry, guy, I'm sorry. Continue. Well, let's let's let's

476
00:29:06,560 --> 00:29:09,520
Speaker 1: just get Danny Morris's take on this. Do you think

477
00:29:09,520 --> 00:29:12,000
Speaker 1: fiscal policy will come quickly enough for companies of the

478
00:29:12,360 --> 00:29:15,200
Speaker 1: bottom end of the triple B range to be able

479
00:29:15,200 --> 00:29:18,280
Speaker 1: to avoid becoming fallen angels and ending up in high yield. Yeah, well,

480
00:29:18,320 --> 00:29:21,000
Speaker 1: this is always the dilemma when it comes to fiscal stimulus.

481
00:29:21,000 --> 00:29:23,040
Speaker 1: We can remember back to the global financial crisis and

482
00:29:23,080 --> 00:29:25,240
Speaker 1: shove already projects and you know, we have a hundred

483
00:29:25,240 --> 00:29:28,720
Speaker 1: billion I think that was ultimately spent to support the economy,

484
00:29:28,760 --> 00:29:31,120
Speaker 1: but by the time it actually hits any company or

485
00:29:31,160 --> 00:29:33,800
Speaker 1: any household, you know, normally it's well after it was

486
00:29:33,840 --> 00:29:36,600
Speaker 1: actually needed. So it's it's certainly helpful, it's what should

487
00:29:36,640 --> 00:29:38,840
Speaker 1: be done. Is it going to be enough in the

488
00:29:38,880 --> 00:29:41,000
Speaker 1: short term? You know? Is it gonna ripe soon enough?

489
00:29:41,080 --> 00:29:44,680
Speaker 1: I think you have reason to be concerned. President john

490
00:29:44,720 --> 00:29:49,520
Speaker 1: Plunder has an absolutely outstanding effort in the ft today.

491
00:29:49,640 --> 00:29:52,760
Speaker 1: Uh talking at corporate debt, as Guy Johnson brings up

492
00:29:52,880 --> 00:29:55,160
Speaker 1: at Mark is sing who you worked with that the

493
00:29:55,200 --> 00:29:59,800
Speaker 1: European Central Bank speaks of what everybody knows is the backstory,

494
00:30:00,200 --> 00:30:04,959
Speaker 1: and that is a global misallocation of capital because all

495
00:30:05,000 --> 00:30:09,440
Speaker 1: of these oddities, these disincentives within the yield market. How

496
00:30:09,600 --> 00:30:16,760
Speaker 1: misallocated are we right now? I certainly shared the view

497
00:30:16,880 --> 00:30:23,320
Speaker 1: that we had accumulated, we had piled up debt outstanding

498
00:30:24,160 --> 00:30:30,080
Speaker 1: to an extent that has been dangerous. So whatever the trigger,

499
00:30:30,480 --> 00:30:34,600
Speaker 1: Corona virus or any other trigger, we had a potential

500
00:30:34,760 --> 00:30:40,760
Speaker 1: problem of dealing with a situation where over indebtedness is very,

501
00:30:40,840 --> 00:30:45,000
Speaker 1: very large and has continued after the crisis, after the

502
00:30:45,080 --> 00:30:48,760
Speaker 1: demand by the crisis. So there is undoubtedly an issue

503
00:30:48,800 --> 00:30:52,240
Speaker 1: there which would call also have to say, for a

504
00:30:52,360 --> 00:30:56,960
Speaker 1: global response because the phenomenon of over indebtedness was observed

505
00:30:57,080 --> 00:31:01,840
Speaker 1: in all continent, all I would take in stituencies advanced

506
00:31:01,880 --> 00:31:05,520
Speaker 1: economy as well as emerging economy, so that that's that's

507
00:31:05,560 --> 00:31:09,080
Speaker 1: a real, real issue, a real structural issue. But of

508
00:31:09,120 --> 00:31:12,160
Speaker 1: course we have to to live with the situation as

509
00:31:12,320 --> 00:31:16,080
Speaker 1: it is, and certainly to do the best out of

510
00:31:16,120 --> 00:31:21,720
Speaker 1: the present situation, which is very, very dedicate obviously, and

511
00:31:21,760 --> 00:31:26,200
Speaker 1: again I would say, the central bank are pillars of stability,

512
00:31:26,440 --> 00:31:34,120
Speaker 1: anchors of stability in a world which is extraordinary, volatile, dangerous, unstable,

513
00:31:34,280 --> 00:31:35,960
Speaker 1: And that the reason why it seems to me it's

514
00:31:36,000 --> 00:31:39,520
Speaker 1: more important than ever that the authority of the Central

515
00:31:39,560 --> 00:31:43,120
Speaker 1: Bank is fully preserved, which is not not necessarily the

516
00:31:43,160 --> 00:31:46,560
Speaker 1: case from time to time, even in the US, where

517
00:31:46,640 --> 00:31:50,040
Speaker 1: when I see some tweets coming from the chief of

518
00:31:50,080 --> 00:31:53,560
Speaker 1: the executive branch, that seems to me totally inappropriate in

519
00:31:53,680 --> 00:32:00,240
Speaker 1: terms of preserving the authority. Okay, well, the economist Donald Up,

520
00:32:00,240 --> 00:32:04,040
Speaker 1: I'm sure is listening to this carefully right now, Jean Tortuche,

521
00:32:04,280 --> 00:32:08,400
Speaker 1: if we look at the shampretarian destruction, a creative destruction

522
00:32:08,480 --> 00:32:11,040
Speaker 1: of this depth that we have created, what is the

523
00:32:11,080 --> 00:32:15,080
Speaker 1: best outcome for President Trump and other world leaders? How

524
00:32:15,120 --> 00:32:17,400
Speaker 1: do you how do we get away from how do

525
00:32:17,480 --> 00:32:25,800
Speaker 1: we extricate ourselves from this misallocation. Well, again, you have

526
00:32:26,480 --> 00:32:29,480
Speaker 1: you have to cope with a crisis which is unfolding

527
00:32:29,680 --> 00:32:33,960
Speaker 1: right now clearly, and you have a medium long term

528
00:32:34,160 --> 00:32:37,920
Speaker 1: issue of first magnitude. To sum up the situation, I

529
00:32:37,960 --> 00:32:42,000
Speaker 1: would say, at the level of all economies in the world,

530
00:32:42,040 --> 00:32:45,240
Speaker 1: and at the level of the global economy and the

531
00:32:45,280 --> 00:32:49,200
Speaker 1: international community as a whole, we should give privilege to

532
00:32:49,400 --> 00:32:54,600
Speaker 1: equity and not, as we did until now, to debt.

533
00:32:55,200 --> 00:32:59,200
Speaker 1: There is a preference for debt over equity, which is

534
00:32:59,280 --> 00:33:03,080
Speaker 1: generally that we see in the deficits of the states

535
00:33:02,880 --> 00:33:05,720
Speaker 1: in the day, in the public deficits everywhere. That we

536
00:33:05,840 --> 00:33:11,520
Speaker 1: see also in taxation, which is privileging debt over equity,

537
00:33:11,640 --> 00:33:15,800
Speaker 1: which is stupid, of course and extremely dangerous in a

538
00:33:15,880 --> 00:33:20,560
Speaker 1: long term perspective. Who can initiate the seismic change from

539
00:33:20,640 --> 00:33:24,600
Speaker 1: a focus of debt and fixed income instruments over to

540
00:33:24,680 --> 00:33:31,480
Speaker 1: the risk of equity. I would say the i fies.

541
00:33:31,680 --> 00:33:38,120
Speaker 1: The international financial institutions are key, of course, to have

542
00:33:38,200 --> 00:33:42,959
Speaker 1: a strong message, a message that would be I would say,

543
00:33:43,240 --> 00:33:46,360
Speaker 1: listen to at a global level, and of course we

544
00:33:46,480 --> 00:33:51,120
Speaker 1: have to get a consensus amongst the major economies, the

545
00:33:51,160 --> 00:33:54,920
Speaker 1: European economy, in the US and of course China and others,

546
00:33:55,240 --> 00:33:59,320
Speaker 1: to understand that we are not doing any good if

547
00:33:59,360 --> 00:34:04,520
Speaker 1: we continue new to pilot debt Kelly, President Cruche, thank

548
00:34:04,560 --> 00:34:07,320
Speaker 1: you so much. Jean Lautruche is a former president of

549
00:34:07,360 --> 00:34:12,960
Speaker 1: the European Central Bank and of course of France. I

550
00:34:13,120 --> 00:34:16,520
Speaker 1: can't convey enough, folks. The tradition at Babson, and there's

551
00:34:16,520 --> 00:34:21,040
Speaker 1: other universities as well, of accounting is the adult major.

552
00:34:21,280 --> 00:34:24,560
Speaker 1: It's if you go there and you're serious about it,

553
00:34:24,640 --> 00:34:28,120
Speaker 1: you take it. They produced years ago a gentleman, Timothy Ryan.

554
00:34:28,200 --> 00:34:32,040
Speaker 1: He's a Bruins fan, which helps, and he began and

555
00:34:32,120 --> 00:34:35,280
Speaker 1: he did what you do in accounting, which is basic auditing,

556
00:34:35,360 --> 00:34:38,279
Speaker 1: and has risen to the head of US operation as

557
00:34:38,360 --> 00:34:41,200
Speaker 1: chairman of p WC. And we are thrilled at the

558
00:34:41,239 --> 00:34:44,280
Speaker 1: accountant from Babson could join us this morning. Ti Moryan,

559
00:34:44,360 --> 00:34:47,960
Speaker 1: What will be the accounting ramifications of this virus? How

560
00:34:48,000 --> 00:34:52,839
Speaker 1: will it first be gleaned among your clients? Yeah, good morning, Tom,

561
00:34:52,840 --> 00:34:55,400
Speaker 1: and thank you for having me. I think what's really

562
00:34:55,400 --> 00:34:58,279
Speaker 1: important is we're just beginning to see the unification. So

563
00:34:58,480 --> 00:35:02,360
Speaker 1: companies whoever, as we reported this year and earnings. Those

564
00:35:02,400 --> 00:35:05,399
Speaker 1: are that those happened, um, they would December thirty feet

565
00:35:05,520 --> 00:35:07,880
Speaker 1: year and earning. So I think what we'll really be

566
00:35:07,920 --> 00:35:11,440
Speaker 1: looking for is this first quarter earnings. But there's no

567
00:35:11,520 --> 00:35:14,480
Speaker 1: question a number of different sectors under pressure, so it

568
00:35:14,600 --> 00:35:17,720
Speaker 1: is reasonable to assume that we will see some slow

569
00:35:17,760 --> 00:35:21,960
Speaker 1: down in our clients results as this virus continues. So, Tim,

570
00:35:21,960 --> 00:35:24,279
Speaker 1: what are you hearing kind of anecdotally from some of

571
00:35:24,320 --> 00:35:26,359
Speaker 1: your biggest clients, We sought a lot of corporate news

572
00:35:26,360 --> 00:35:29,719
Speaker 1: out of Silicon Valley in the West Coast today, Microsoft, Facebook.

573
00:35:29,760 --> 00:35:31,680
Speaker 1: You know, folks stay at home, work at home, so

574
00:35:32,040 --> 00:35:34,760
Speaker 1: some big decisions are being made affecting a lot of people.

575
00:35:34,800 --> 00:35:36,919
Speaker 1: What are you hearing from some of your clients. Yeah,

576
00:35:36,960 --> 00:35:39,920
Speaker 1: so over the last three days of talk to several

577
00:35:39,960 --> 00:35:43,160
Speaker 1: dozen of our clients, and what we're hearing is people first,

578
00:35:43,320 --> 00:35:46,759
Speaker 1: to carry of people, protect them and health business continuity

579
00:35:46,800 --> 00:35:50,000
Speaker 1: planning to make sure critical operations can be performed. And

580
00:35:50,160 --> 00:35:54,560
Speaker 1: just now we're starting to see focus on cash management,

581
00:35:54,719 --> 00:35:57,600
Speaker 1: making sure costs it contained because there is a sense

582
00:35:57,640 --> 00:36:01,359
Speaker 1: that this could affect operations and and UM performance over

583
00:36:01,400 --> 00:36:03,400
Speaker 1: a long period of time. But without a doubt of

584
00:36:03,480 --> 00:36:06,719
Speaker 1: the last several weeks. It's been about people first. So Tim,

585
00:36:06,880 --> 00:36:09,040
Speaker 1: when I think about a firm like p WC, I

586
00:36:09,080 --> 00:36:13,760
Speaker 1: think about all your young auditors and consultants. They're spend

587
00:36:13,760 --> 00:36:15,800
Speaker 1: their whole lives, you know, on planes going out to

588
00:36:15,840 --> 00:36:18,320
Speaker 1: see their clients. What are you telling your uh people

589
00:36:18,400 --> 00:36:21,120
Speaker 1: right now? Yeah, great question. So what we did, what

590
00:36:21,160 --> 00:36:22,719
Speaker 1: we've done to all of our people, for all of

591
00:36:22,760 --> 00:36:25,400
Speaker 1: our people, is they say, critic all non essential travel

592
00:36:25,480 --> 00:36:29,120
Speaker 1: stops um immediately. Number two. What we said is travel

593
00:36:29,200 --> 00:36:31,879
Speaker 1: to any of the restricted areas across the globe had

594
00:36:31,920 --> 00:36:35,480
Speaker 1: stopped immediately. We're asking our people to leverage our technology

595
00:36:35,520 --> 00:36:37,520
Speaker 1: that we're invested it heavily over the last several years,

596
00:36:37,560 --> 00:36:40,600
Speaker 1: and work from home when possible. And we're also asking

597
00:36:40,600 --> 00:36:43,640
Speaker 1: our people to practice just normal, good healthy practices. They're

598
00:36:43,640 --> 00:36:46,560
Speaker 1: not feeling well, don't travel, don't come to the office.

599
00:36:46,960 --> 00:36:48,920
Speaker 1: So in the article the day was John Plender and

600
00:36:48,960 --> 00:36:51,799
Speaker 1: the f T. It's a lengthy article, folks, just brilliantly

601
00:36:52,200 --> 00:36:55,760
Speaker 1: walks through the build up in corporate debt that's out there.

602
00:36:55,760 --> 00:37:01,040
Speaker 1: Great quotes including amarising the giant economics from Germany and

603
00:37:01,160 --> 00:37:03,560
Speaker 1: Tim and there's something that parses right over to p

604
00:37:03,800 --> 00:37:06,960
Speaker 1: WC and that there's been a massive debt build up,

605
00:37:07,320 --> 00:37:10,080
Speaker 1: but it's really not on the back of technology, which

606
00:37:10,080 --> 00:37:13,479
Speaker 1: has a massive cash build up. And the implication here

607
00:37:13,640 --> 00:37:18,080
Speaker 1: is the debt is more focused in traditional American industries.

608
00:37:18,480 --> 00:37:21,799
Speaker 1: Is p WC seeing that, Yeah, I would say I

609
00:37:21,800 --> 00:37:23,920
Speaker 1: would say that some I would say that that is

610
00:37:24,480 --> 00:37:26,239
Speaker 1: very similar to what we're seeing at this point. It

611
00:37:26,400 --> 00:37:31,000
Speaker 1: is we're traditional. We have seen an increase in technology,

612
00:37:31,040 --> 00:37:32,759
Speaker 1: but not at the same level as you would see

613
00:37:32,800 --> 00:37:35,319
Speaker 1: some of the traditional areas. Tom, let me bring up

614
00:37:35,360 --> 00:37:37,960
Speaker 1: a sensitive question, and you know you're such a straight

615
00:37:38,000 --> 00:37:40,040
Speaker 1: shooter that I'm sure I'm going to get an honest answer.

616
00:37:40,800 --> 00:37:44,480
Speaker 1: What is the differential between how any given major accounting

617
00:37:44,520 --> 00:37:50,680
Speaker 1: consultancy does business in New York or London, or Beijing

618
00:37:50,800 --> 00:37:54,120
Speaker 1: or Shanghai, or around the world Delhi, wherever. Is it

619
00:37:54,200 --> 00:37:58,440
Speaker 1: a uniform audit process or does it differ? Is it

620
00:37:58,640 --> 00:38:03,000
Speaker 1: malleable nation to nation? I would say that this this

621
00:38:03,160 --> 00:38:06,400
Speaker 1: clearly differences nation and nation. But the principles of auditing

622
00:38:06,480 --> 00:38:10,680
Speaker 1: across the globe but very similar. It's independence, objectivity in

623
00:38:10,800 --> 00:38:13,600
Speaker 1: making sure that investor protection comes first, and that that

624
00:38:13,760 --> 00:38:17,480
Speaker 1: is largely consistent across the globe. Now, the standards that

625
00:38:17,520 --> 00:38:19,959
Speaker 1: have followed different from different different parts of the world.

626
00:38:20,000 --> 00:38:22,800
Speaker 1: But as I spend half my time outside of the US,

627
00:38:22,880 --> 00:38:26,080
Speaker 1: the the concept of investor protection is something that I

628
00:38:26,080 --> 00:38:29,000
Speaker 1: do see cut across geographies. You see this all the

629
00:38:29,040 --> 00:38:32,800
Speaker 1: time because we hear here Bloomberg surveillance. It's the idea

630
00:38:32,840 --> 00:38:35,240
Speaker 1: that while the accounting in other places is the same,

631
00:38:35,480 --> 00:38:37,680
Speaker 1: but you have to live it affirmed like you have.

632
00:38:37,800 --> 00:38:40,280
Speaker 1: You have to go in and do this nation to nation.

633
00:38:40,320 --> 00:38:44,120
Speaker 1: How do you adapt your auditors to that. So one

634
00:38:44,120 --> 00:38:46,279
Speaker 1: of the things that we focus an awful lot on

635
00:38:46,640 --> 00:38:50,040
Speaker 1: is culture and training, and we also at any given

636
00:38:50,080 --> 00:38:52,000
Speaker 1: time have a couple of thousand people who are who

637
00:38:52,040 --> 00:38:53,839
Speaker 1: are living in different parts of the world to make

638
00:38:53,840 --> 00:38:56,080
Speaker 1: sure we we have a sense of shared values in

639
00:38:56,200 --> 00:38:58,880
Speaker 1: terms of how we do things. We have very robust

640
00:38:59,320 --> 00:39:01,800
Speaker 1: kind of quality checks that take place across the globe

641
00:39:01,800 --> 00:39:04,560
Speaker 1: to make sure the quality is consistent and frankly to

642
00:39:04,680 --> 00:39:07,520
Speaker 1: I'm straight shooting, always looking to improve, like we're not perfect,

643
00:39:07,800 --> 00:39:09,640
Speaker 1: and we're always trying to raise our games. So when

644
00:39:09,640 --> 00:39:12,719
Speaker 1: we see an opportunity improve in a different territory, we

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00:39:12,800 --> 00:39:14,960
Speaker 1: take those lessons learned and bring them across the globe

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00:39:15,200 --> 00:39:17,920
Speaker 1: and that's a continuous loop that is always happening. So

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00:39:18,000 --> 00:39:20,360
Speaker 1: Tom I saim I know you put out your PwC,

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00:39:20,440 --> 00:39:24,000
Speaker 1: your Global CEO survey, Um I don't see you know,

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00:39:24,080 --> 00:39:28,120
Speaker 1: kind of coronavirus in there are these these big health issues,

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00:39:28,160 --> 00:39:30,560
Speaker 1: But how do you feel like corporate America is kind

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00:39:30,560 --> 00:39:32,560
Speaker 1: of prepared for some of these just really want off

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00:39:32,600 --> 00:39:34,960
Speaker 1: things that come out of nowhere. Yeah, So just thanks

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00:39:34,960 --> 00:39:37,280
Speaker 1: for referring to the survey. We launched it in January

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00:39:37,280 --> 00:39:40,080
Speaker 1: and Davos and we ask every year for twenty three

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00:39:40,120 --> 00:39:44,280
Speaker 1: years straight where the top risk and health crisises. Pandemics

656
00:39:44,280 --> 00:39:46,200
Speaker 1: clearly were not. It was in the top ten in

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00:39:46,280 --> 00:39:49,359
Speaker 1: terms of CEO concerns. And I think the coronavirus is

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00:39:49,480 --> 00:39:52,480
Speaker 1: a great example of how CEOs have to be ready

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00:39:52,520 --> 00:39:57,120
Speaker 1: for anything right now. I do think that in many respects,

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00:39:57,560 --> 00:40:01,600
Speaker 1: your best your best companies have been preparing for something

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00:40:01,640 --> 00:40:05,040
Speaker 1: like this for years, meaning that do they see this coming. No,

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00:40:05,800 --> 00:40:09,520
Speaker 1: but we we have seen a good percentage of our clients,

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00:40:09,600 --> 00:40:11,480
Speaker 1: not all of them, but we have seen a good

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00:40:11,480 --> 00:40:15,360
Speaker 1: percentage then for the last couple of years preparing for

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00:40:15,520 --> 00:40:17,640
Speaker 1: what I'll say, get fixing the roof when the sun

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00:40:17,680 --> 00:40:20,880
Speaker 1: is shining. They've got their constructures in play. They leverage

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00:40:20,960 --> 00:40:24,160
Speaker 1: more technology now, to be frank, some haven't, and their

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00:40:24,200 --> 00:40:25,960
Speaker 1: ability to deal with something like this is going to

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00:40:26,040 --> 00:40:28,480
Speaker 1: be way less equipped than others. Samaran, thank you so

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00:40:28,560 --> 00:40:31,000
Speaker 1: much with p w C us their chairm and greatly

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00:40:31,040 --> 00:40:36,040
Speaker 1: appreciate a snapshot in their otherway corporations in the audit process.

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Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and

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00:40:40,320 --> 00:40:45,640
Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast

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00:40:45,680 --> 00:40:49,920
Speaker 1: platform you prefer. I'm on Twitter at Tom Keane. Before

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00:40:49,960 --> 00:40:53,239
Speaker 1: the podcast, you can always catch US World one. I'm

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00:40:53,280 --> 00:41:00,800
Speaker 1: Bloomberg Radio s