1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferroll and Lisa Brownwitz Jailely. We bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot com, 5 00:00:23,920 --> 00:00:30,080 Speaker 1: and of course, on the Bloomberg terminal. Richard Haas a 6 00:00:30,200 --> 00:00:32,960 Speaker 1: year ago his effort was my book of the summer, 7 00:00:33,280 --> 00:00:35,800 Speaker 1: and that would be The World A brief introduction. I 8 00:00:35,840 --> 00:00:40,280 Speaker 1: really can't say enough about it being the required brief 9 00:00:40,360 --> 00:00:43,040 Speaker 1: read to get you up to speed on the inter 10 00:00:43,840 --> 00:00:47,640 Speaker 1: dynamics of the world economy. Ambassador has thank you so 11 00:00:47,720 --> 00:00:51,519 Speaker 1: much for joining us this morning. What do you worry 12 00:00:51,560 --> 00:00:55,880 Speaker 1: about after a fourth of July. What's the thing within 13 00:00:55,960 --> 00:00:58,880 Speaker 1: the entire sphere of your work with the Council on 14 00:00:59,000 --> 00:01:03,160 Speaker 1: Foreign Relations? Where's your reading, where's your research where you're 15 00:01:03,240 --> 00:01:08,120 Speaker 1: trying to figure something out? Tom, I could give you 16 00:01:08,160 --> 00:01:10,880 Speaker 1: two answers. I could give you a very long list 17 00:01:10,959 --> 00:01:15,399 Speaker 1: of international things that that worries me. You mentioned Afghanistan, 18 00:01:15,480 --> 00:01:19,880 Speaker 1: there's always China. People aren't talking about North Korea hasn't 19 00:01:19,920 --> 00:01:22,520 Speaker 1: gone away. There's wrong. But but but the thing that 20 00:01:22,560 --> 00:01:25,600 Speaker 1: worries me most is still us. What still worries me 21 00:01:25,680 --> 00:01:29,800 Speaker 1: most is how divided this country is, how our democracy 22 00:01:29,920 --> 00:01:33,520 Speaker 1: is under assault from within. And that's what worries me. 23 00:01:33,680 --> 00:01:36,600 Speaker 1: If we can't come together as a country, there's no 24 00:01:36,720 --> 00:01:39,880 Speaker 1: way we will be able to act effectively on the 25 00:01:39,880 --> 00:01:43,120 Speaker 1: world stage. You drove forward this discussion, it seems a 26 00:01:43,120 --> 00:01:46,560 Speaker 1: lifetime ago. A world in disarray. So let's look at 27 00:01:46,920 --> 00:01:50,920 Speaker 1: after this fourth of July and America in disarray, what 28 00:01:50,960 --> 00:01:54,559 Speaker 1: do our institutions need to do to get us back 29 00:01:54,600 --> 00:01:59,280 Speaker 1: on course in a better direction. Well, our institutions, some 30 00:01:59,360 --> 00:02:01,440 Speaker 1: of them were arm pretty well when you think about 31 00:02:02,160 --> 00:02:06,600 Speaker 1: the courts have performed admirable league. The media for the 32 00:02:06,640 --> 00:02:11,320 Speaker 1: most part, has fulfilled its its role. The real problem, 33 00:02:11,360 --> 00:02:15,280 Speaker 1: I think is is two things. One is Washington, UH. 34 00:02:15,480 --> 00:02:18,040 Speaker 1: We're still unable, for the most part, to come together 35 00:02:18,120 --> 00:02:21,800 Speaker 1: to deal with some of the challenges facing this UH country, 36 00:02:21,800 --> 00:02:26,920 Speaker 1: even beyond infrastructure, things like immigration reform, dealing with budget 37 00:02:26,919 --> 00:02:29,240 Speaker 1: issues and so forth. And then at the state level, 38 00:02:29,320 --> 00:02:35,520 Speaker 1: the disparity in state levels of vaccination. As a real statement, 39 00:02:35,560 --> 00:02:38,760 Speaker 1: shall we say about the federal system and the unevenness 40 00:02:39,040 --> 00:02:41,200 Speaker 1: of how the United States is dealing with what is 41 00:02:41,240 --> 00:02:45,720 Speaker 1: still the biggest challenge the country faces. Why can't we 42 00:02:45,760 --> 00:02:48,480 Speaker 1: get more of a bipartisan push behind infrastructure. I mean, 43 00:02:48,520 --> 00:02:52,640 Speaker 1: I know we have the seven billion dollar deal right now, 44 00:02:52,680 --> 00:02:56,880 Speaker 1: but in an age of you know, trillion dollar stimulus 45 00:02:57,240 --> 00:03:02,960 Speaker 1: and a country um full of patriotic politicians, why don't 46 00:03:03,000 --> 00:03:06,000 Speaker 1: we get a bipartisan deal to give us an edge 47 00:03:06,000 --> 00:03:09,480 Speaker 1: on our competition. Well, we may have a bipartisan deal. 48 00:03:09,520 --> 00:03:12,400 Speaker 1: I think central to it it will be a narrow 49 00:03:12,480 --> 00:03:17,120 Speaker 1: definition of what constitutes infrastructure. If interesting, there's there's no 50 00:03:17,200 --> 00:03:20,959 Speaker 1: bipartisan support for shall we call it a broad definition 51 00:03:21,040 --> 00:03:24,519 Speaker 1: of quote unquote human infrastructure? And then I think there's 52 00:03:24,520 --> 00:03:27,440 Speaker 1: still questions and whatever scale legislation has passed is how 53 00:03:27,520 --> 00:03:29,560 Speaker 1: you pay for it? And you're obviously going to have 54 00:03:29,639 --> 00:03:34,359 Speaker 1: problems when it comes to specific tax increases. Is there 55 00:03:34,360 --> 00:03:38,920 Speaker 1: ever a possibility that we get someone or a group, 56 00:03:39,120 --> 00:03:42,520 Speaker 1: a big enough group, that wants to clean out the loopholes, 57 00:03:42,640 --> 00:03:45,800 Speaker 1: clean out the deductions, and bring revenue higher with the 58 00:03:45,920 --> 00:03:48,640 Speaker 1: with the tax base. Where it is, ever is a 59 00:03:48,680 --> 00:03:50,520 Speaker 1: long time, But I don't see it. One of the 60 00:03:50,560 --> 00:03:54,160 Speaker 1: rules of democracy. It's not what majorities care about, what 61 00:03:54,160 --> 00:03:59,440 Speaker 1: what what drives a democracy? Are intense minorities. That's the reason. 62 00:03:59,480 --> 00:04:03,000 Speaker 1: For example. But you might have the country favoring background checks, 63 00:04:03,040 --> 00:04:05,480 Speaker 1: but you can't get certain things on gun control because 64 00:04:05,520 --> 00:04:08,440 Speaker 1: of the intensity of minority. And by and large you 65 00:04:08,480 --> 00:04:11,960 Speaker 1: have very intense minorities in favor of quote unquote loopholes, 66 00:04:12,200 --> 00:04:14,480 Speaker 1: and I think it makes it very hard even though 67 00:04:14,800 --> 00:04:16,839 Speaker 1: a majority of the country might be open to the 68 00:04:16,880 --> 00:04:19,440 Speaker 1: sort of thing you're talking about, Dr. House. I mean, 69 00:04:19,480 --> 00:04:21,320 Speaker 1: we talk about the disarray here in the U S. 70 00:04:21,360 --> 00:04:23,680 Speaker 1: And of course a lot of foreign nations look at 71 00:04:23,680 --> 00:04:26,760 Speaker 1: that disarray and they see opportunity where continue to be 72 00:04:27,360 --> 00:04:32,280 Speaker 1: barraged by cyber attacks, presumably either at the direction or 73 00:04:32,320 --> 00:04:35,960 Speaker 1: at lease with the sort of implicit uh I guess 74 00:04:36,040 --> 00:04:39,039 Speaker 1: backing of foreign governments. Here you have the resurgence here 75 00:04:39,279 --> 00:04:42,440 Speaker 1: of China across the world in areas where the US 76 00:04:42,680 --> 00:04:45,440 Speaker 1: used to be the dominant force here. How much does 77 00:04:45,520 --> 00:04:48,400 Speaker 1: the White House and the policymakers here in the US 78 00:04:48,720 --> 00:04:52,760 Speaker 1: need to be concerned here about the influence or the 79 00:04:52,839 --> 00:04:54,880 Speaker 1: lack of influence we may now have in some parts 80 00:04:54,880 --> 00:04:57,760 Speaker 1: of the world. I think you have two areas. One 81 00:04:57,880 --> 00:05:00,880 Speaker 1: is with actual or would be is The other is 82 00:05:00,880 --> 00:05:03,719 Speaker 1: with allies. I think they've been more focused on trying 83 00:05:03,760 --> 00:05:07,000 Speaker 1: to rebuild US relations with our friends to reduce some 84 00:05:07,080 --> 00:05:10,240 Speaker 1: of the uncertainty some of the concerns there. But with 85 00:05:10,279 --> 00:05:14,080 Speaker 1: the two countries you mentioned, Uh, the administration has been 86 00:05:14,120 --> 00:05:17,000 Speaker 1: focused much more on China than on any other foreign 87 00:05:17,040 --> 00:05:21,480 Speaker 1: policy issue. Uh. They haven't quite put together a comprehensive 88 00:05:21,560 --> 00:05:26,200 Speaker 1: or coherent policy with Russia. We're going to have a test. Uh. 89 00:05:26,360 --> 00:05:29,040 Speaker 1: You had the meeting in Geneva. The President put down 90 00:05:29,080 --> 00:05:34,440 Speaker 1: a marker about cyber Russia continues to allow cyber operations 91 00:05:34,480 --> 00:05:38,520 Speaker 1: against US that emanate from its its territory. So the 92 00:05:38,560 --> 00:05:42,480 Speaker 1: real question is, are we going to act on the 93 00:05:42,480 --> 00:05:46,440 Speaker 1: norm that, like in the case of terrorism, governments are 94 00:05:46,480 --> 00:05:49,799 Speaker 1: held accountable for terrorist actions that come from their territory. 95 00:05:50,120 --> 00:05:52,560 Speaker 1: Are we going to act on the norm that governments 96 00:05:52,560 --> 00:05:56,320 Speaker 1: are also going to be held accountable from cyber actions 97 00:05:56,360 --> 00:05:58,839 Speaker 1: that emanate from their territory. We're gonna find out. Do 98 00:05:58,920 --> 00:06:03,760 Speaker 1: you have confidence that they'll be a diplomatic solution to this? Uh? No? Uh. 99 00:06:04,960 --> 00:06:07,719 Speaker 1: I may be a diplomat by training, I don't have 100 00:06:07,920 --> 00:06:10,920 Speaker 1: a lot Like you're not gonna get some Geneva convention 101 00:06:11,000 --> 00:06:14,240 Speaker 1: on how to regulate cyberspace. The real question is whether 102 00:06:14,320 --> 00:06:17,080 Speaker 1: you can influence, say, the cost benefit assessment of a 103 00:06:17,160 --> 00:06:20,760 Speaker 1: Latin air boots and that's the real issue. Ambassador has 104 00:06:20,760 --> 00:06:24,320 Speaker 1: a totally unfair question. But let's go there. It's unfair. Tuesday, 105 00:06:24,839 --> 00:06:28,480 Speaker 1: Is there a Biden doctrine his secretary of state Blincoln 106 00:06:28,600 --> 00:06:31,640 Speaker 1: is a president. If they delineated a distinction here that 107 00:06:31,720 --> 00:06:35,680 Speaker 1: you see that you can call a Biden doctrine. No, 108 00:06:35,760 --> 00:06:37,760 Speaker 1: I don't see a doctrine because the doctrine has a 109 00:06:37,839 --> 00:06:41,240 Speaker 1: degree of a commonality and universality to it. On what 110 00:06:41,279 --> 00:06:43,600 Speaker 1: I'm seeing, it's on what I'm seeing are certain impulses, 111 00:06:44,320 --> 00:06:46,960 Speaker 1: a real one I mentioned already, which is an emphasis 112 00:06:47,000 --> 00:06:51,640 Speaker 1: on rebuilding relations with allies, to a surprising emphasis on 113 00:06:51,720 --> 00:06:54,640 Speaker 1: the promotion of democracy. This the idea of dividing the 114 00:06:54,640 --> 00:06:59,880 Speaker 1: world between democracies and authoritarian systems. Obviously uh, fairly robe 115 00:07:00,080 --> 00:07:05,800 Speaker 1: uh rhetorical and other set of responses towards towards China. Uh. 116 00:07:05,839 --> 00:07:09,040 Speaker 1: There's been a re entry into multilateral organizations. But again, 117 00:07:09,080 --> 00:07:12,320 Speaker 1: these are all tendencies. I don't see anything that both 118 00:07:12,400 --> 00:07:16,920 Speaker 1: explains what's going on and and predicts what will go on. 119 00:07:17,400 --> 00:07:19,560 Speaker 1: What is so helpful here? To the gentleman of the 120 00:07:19,600 --> 00:07:22,240 Speaker 1: Council and foreign relations with US is there can always 121 00:07:22,240 --> 00:07:25,440 Speaker 1: be a headline that comes out that deserves perspective from 122 00:07:25,520 --> 00:07:30,160 Speaker 1: Richard hass Here's the headline, Ambassador China, US officials have 123 00:07:30,320 --> 00:07:34,240 Speaker 1: phone call on Korean peninsula issue. You lead with this 124 00:07:34,400 --> 00:07:38,480 Speaker 1: in our conversation this morning. Have we've been tested yet 125 00:07:38,520 --> 00:07:42,600 Speaker 1: on Biden in North Korea? Or does that await it 126 00:07:42,680 --> 00:07:45,640 Speaker 1: awaits hasn't happened, And there's been no what you call 127 00:07:45,760 --> 00:07:50,040 Speaker 1: station identification from North Korea. Historically, we've gotten from time 128 00:07:50,120 --> 00:07:53,360 Speaker 1: to time, there's been some intriguing reports about real problems 129 00:07:53,360 --> 00:07:56,800 Speaker 1: with COVID inside North Korea. So one has the sense 130 00:07:56,840 --> 00:08:00,600 Speaker 1: from AFAR that they've got their their handsful. But in 131 00:08:00,640 --> 00:08:04,440 Speaker 1: the meantime, North Korea's nuclear capabilities and missile capabilities is 132 00:08:04,520 --> 00:08:07,520 Speaker 1: steadily built up over the last decades. And I think 133 00:08:07,560 --> 00:08:10,840 Speaker 1: the real question is does the Biden administration try to 134 00:08:10,920 --> 00:08:12,840 Speaker 1: start some type of what you might call an arms 135 00:08:12,840 --> 00:08:15,720 Speaker 1: control conversation saying, look, we want to get rid of 136 00:08:15,800 --> 00:08:18,640 Speaker 1: all your nuclear weapons and missiles. We know that's not 137 00:08:18,640 --> 00:08:22,120 Speaker 1: gonna happen anytime soon. Let's see if we can't slice 138 00:08:22,160 --> 00:08:24,120 Speaker 1: this in a way or trunch this in a way 139 00:08:24,360 --> 00:08:26,560 Speaker 1: where you get we get a bit of progress and 140 00:08:26,640 --> 00:08:28,920 Speaker 1: what we want, and in exchange, you get a bit 141 00:08:28,960 --> 00:08:31,400 Speaker 1: of progress and what you want, which is sanctions relief. 142 00:08:31,640 --> 00:08:36,000 Speaker 1: We haven't seen that yet, Tom, but I think that's possible, Ambassador. 143 00:08:36,040 --> 00:08:38,520 Speaker 1: I want to ask about Berlin. I'm here, and of 144 00:08:38,559 --> 00:08:42,200 Speaker 1: course the elections are coming up in September. Does does 145 00:08:43,120 --> 00:08:47,560 Speaker 1: do any of the possible outcomes change the relationship between 146 00:08:47,559 --> 00:08:51,840 Speaker 1: the West and Vladimir Putin? Because until now we've been 147 00:08:51,880 --> 00:08:56,200 Speaker 1: really unable to strike back at Russia, or at least 148 00:08:56,760 --> 00:08:59,400 Speaker 1: if we do strike back, we're still sending billions of 149 00:08:59,440 --> 00:09:02,360 Speaker 1: euros to nords Dream too, pretty soon straight to Moscow 150 00:09:02,400 --> 00:09:05,640 Speaker 1: and straight to Putin's coffers. I think nords Dream was 151 00:09:05,679 --> 00:09:07,800 Speaker 1: going so far that it's hard for me to imagine 152 00:09:07,840 --> 00:09:11,319 Speaker 1: anyone walking it uh completely back now. I think the 153 00:09:11,400 --> 00:09:13,840 Speaker 1: United States is going to have differences with pretty much 154 00:09:13,880 --> 00:09:18,280 Speaker 1: whatever leadership emerges ultimately in Germany over both China and Russia. 155 00:09:18,679 --> 00:09:22,360 Speaker 1: And in both cases, the German desire to have an 156 00:09:22,360 --> 00:09:27,280 Speaker 1: economically led diplomacy or foreign policy will probably outpace US. 157 00:09:27,480 --> 00:09:29,760 Speaker 1: And I think that's going to be an inevitable area 158 00:09:29,880 --> 00:09:33,560 Speaker 1: of some friction. Ironically enough, it might be less between 159 00:09:33,600 --> 00:09:36,880 Speaker 1: the US and the Greens because they're the Biden administration 160 00:09:36,960 --> 00:09:40,120 Speaker 1: might find more of an overlap stemming from both environmental 161 00:09:40,160 --> 00:09:43,679 Speaker 1: issues and human rights issues. Ambassador has Thank you so much, 162 00:09:43,760 --> 00:09:46,200 Speaker 1: Richard Hass the force of the Council on Foreign Relations 163 00:09:46,200 --> 00:09:49,280 Speaker 1: their president. I can't say enough about the required read 164 00:09:49,320 --> 00:09:52,199 Speaker 1: the world A brief introduction for all of us. Really 165 00:09:52,240 --> 00:09:55,480 Speaker 1: just a lovely primer, if you will, on the state 166 00:09:55,600 --> 00:10:03,320 Speaker 1: of our international relations. We got the right guest at 167 00:10:03,320 --> 00:10:06,680 Speaker 1: this moment. Christopher Grossanti of m Ai Capital, is a 168 00:10:06,720 --> 00:10:12,319 Speaker 1: great student of the equity markets, looking for value within growthiness. Now, Chris, 169 00:10:12,400 --> 00:10:16,760 Speaker 1: do you own any of these Chinese companies? We don't, Tom. 170 00:10:16,800 --> 00:10:19,400 Speaker 1: We think there's a lot of opportunity here. That's that's 171 00:10:19,440 --> 00:10:21,800 Speaker 1: just much simpler. And if I, if I are a 172 00:10:21,800 --> 00:10:25,080 Speaker 1: wee Bow shareholder, I would be afraid. I hate to 173 00:10:25,120 --> 00:10:27,720 Speaker 1: use this analogy, but I think Hong Kong was frankly 174 00:10:27,760 --> 00:10:31,160 Speaker 1: taken private several months ago, and it's a it's an 175 00:10:31,160 --> 00:10:34,280 Speaker 1: issue of control. I think it's not data. It's about 176 00:10:34,320 --> 00:10:39,400 Speaker 1: controlling the most important, uh political and corporate entities in 177 00:10:39,440 --> 00:10:41,160 Speaker 1: the country. I think you and I earn the same 178 00:10:41,200 --> 00:10:43,160 Speaker 1: page on this Your job is to talk about it. 179 00:10:43,280 --> 00:10:45,600 Speaker 1: My job is to ask the questions I will. We 180 00:10:45,679 --> 00:10:48,520 Speaker 1: spoke to Richard Hassa, the Counsul and Foreign Relations in 181 00:10:48,559 --> 00:10:52,760 Speaker 1: the last hour about an American disarray. Is this a Beijing, 182 00:10:52,880 --> 00:10:59,400 Speaker 1: Chris Grosanti and capitalistic or financial disarray? No? In fact time, 183 00:10:59,440 --> 00:11:03,960 Speaker 1: I think it's a Beijing that's exercising its strength, and 184 00:11:04,120 --> 00:11:07,360 Speaker 1: it's UH perhaps taking advantage of an American and disarray, 185 00:11:07,400 --> 00:11:10,320 Speaker 1: but it's also exercising its strength in its own playground. 186 00:11:10,760 --> 00:11:13,400 Speaker 1: So um I would I would suspect we'll see more 187 00:11:13,440 --> 00:11:17,079 Speaker 1: of that over the in the second half. Let's talk, Yeah, Chris, 188 00:11:17,240 --> 00:11:19,680 Speaker 1: I am curious here about what the effect this could 189 00:11:19,679 --> 00:11:23,000 Speaker 1: potentially have on American companies. There's been a lot of 190 00:11:23,040 --> 00:11:26,040 Speaker 1: reports about some of the issues Tesla is having with 191 00:11:26,080 --> 00:11:30,160 Speaker 1: regards to its relationship with Chinese authorities. Obviously, Apple and 192 00:11:30,200 --> 00:11:34,160 Speaker 1: the iPhone basically wouldn't exist without its relationship with China. Here, 193 00:11:34,520 --> 00:11:38,520 Speaker 1: is there a point where US investors European investors need 194 00:11:38,640 --> 00:11:42,439 Speaker 1: to start being worried about the ties at those that 195 00:11:42,559 --> 00:11:46,920 Speaker 1: those UH countries and those companies in those countries have 196 00:11:47,040 --> 00:11:50,640 Speaker 1: with China. Yes, I'm only half joking when I say, yes, 197 00:11:50,640 --> 00:11:53,520 Speaker 1: there's a point, and it was last year. I really 198 00:11:53,559 --> 00:11:57,440 Speaker 1: think what this exhibits is a flexing of muscle, much 199 00:11:57,480 --> 00:12:00,240 Speaker 1: more overtly than we've seen in the past. But but 200 00:12:00,360 --> 00:12:02,520 Speaker 1: clearly I don't even think the Chinese have been trying 201 00:12:02,520 --> 00:12:05,679 Speaker 1: to hide the ball. They want control over just about 202 00:12:05,720 --> 00:12:09,480 Speaker 1: every financial transaction and and corporate move in the country. 203 00:12:09,559 --> 00:12:11,880 Speaker 1: So I think it's a it's a tough place to 204 00:12:11,920 --> 00:12:14,520 Speaker 1: do business. As the major tech companies have been finding out, 205 00:12:14,679 --> 00:12:16,640 Speaker 1: it is a tough place to do business. It's also 206 00:12:16,720 --> 00:12:19,560 Speaker 1: a relatively lucrative place to do business, all based on 207 00:12:19,600 --> 00:12:21,720 Speaker 1: the size of the population and of course the growing 208 00:12:21,760 --> 00:12:24,120 Speaker 1: wealth there. For a company like Apple or any sort 209 00:12:24,120 --> 00:12:26,800 Speaker 1: of big tech company that wants to have a presence there. 210 00:12:26,960 --> 00:12:29,640 Speaker 1: How comfortable are you, Chris, as an investor and some 211 00:12:29,720 --> 00:12:35,120 Speaker 1: of those US names and being exposed to that Chinese market, Well, 212 00:12:35,200 --> 00:12:38,280 Speaker 1: not terribly comfortable. I'd say. What we do try to 213 00:12:38,360 --> 00:12:41,560 Speaker 1: do is pick those that can survive. A Facebook is 214 00:12:41,559 --> 00:12:44,720 Speaker 1: a perfect example without it, even though as you mentioned, 215 00:12:44,760 --> 00:12:47,880 Speaker 1: it's such a terrific market that you know, the rest 216 00:12:47,880 --> 00:12:51,000 Speaker 1: of the world still dwarfs China by itself. So a 217 00:12:51,080 --> 00:12:54,640 Speaker 1: Facebook a Google have been doing pretty well without towing 218 00:12:54,640 --> 00:12:57,560 Speaker 1: the line and and basically having been mostly excluded from 219 00:12:57,559 --> 00:13:01,240 Speaker 1: the marketplace, So we like that. Yeah, a number of 220 00:13:01,280 --> 00:13:05,000 Speaker 1: those companies actually um threatening to pull out of business 221 00:13:05,000 --> 00:13:08,920 Speaker 1: in Hong Kong if they have to tow the line. 222 00:13:09,040 --> 00:13:12,040 Speaker 1: There is that a concern for you when you look 223 00:13:12,040 --> 00:13:16,480 Speaker 1: at the international companies that you're invested in, how they 224 00:13:16,520 --> 00:13:19,600 Speaker 1: do their business in China, how they manage that balancing act. 225 00:13:20,360 --> 00:13:22,680 Speaker 1: Of course, it has to be concerned. And and I'm 226 00:13:22,679 --> 00:13:25,959 Speaker 1: a great admired Richard Hassas, and I think the black 227 00:13:26,040 --> 00:13:28,880 Speaker 1: swan that we may be seeing over the next few 228 00:13:28,960 --> 00:13:32,600 Speaker 1: years is a real kind of hot confrontation with China, 229 00:13:32,640 --> 00:13:36,640 Speaker 1: and that very much worries me. So again I would uh, 230 00:13:36,679 --> 00:13:39,520 Speaker 1: it's it's on the negative side of a balance those 231 00:13:39,520 --> 00:13:42,720 Speaker 1: companies that have China has a large piece of the 232 00:13:42,760 --> 00:13:46,440 Speaker 1: pie for revenues and profits, but more and more, that's 233 00:13:46,440 --> 00:13:49,160 Speaker 1: got to be all of the big companies you're invested in. 234 00:13:49,200 --> 00:13:51,520 Speaker 1: If I think of the big banks, if I think 235 00:13:51,520 --> 00:13:54,120 Speaker 1: of the big cyclicals, the car makers, you know, the 236 00:13:54,160 --> 00:13:57,440 Speaker 1: equipment makers, um, if I think of the big tech companies, 237 00:13:57,480 --> 00:14:00,920 Speaker 1: they all have to do business in China. It's their biggest, 238 00:14:01,080 --> 00:14:05,760 Speaker 1: fastest growing market. Well, you know, I wouldn't go quite 239 00:14:05,800 --> 00:14:08,920 Speaker 1: that far. Actually, I think Facebook is frankly excluded from China. 240 00:14:09,120 --> 00:14:12,480 Speaker 1: Google is mostly excluded from China, and they're doing, you know, 241 00:14:12,520 --> 00:14:16,240 Speaker 1: pretty darn well. So I'm not saying they can. Obviously 242 00:14:16,280 --> 00:14:18,360 Speaker 1: they'd be able to grow a lot faster, but but 243 00:14:18,440 --> 00:14:22,400 Speaker 1: they're doing okay as it is now. But having said that, 244 00:14:22,480 --> 00:14:24,360 Speaker 1: we can't keep on going like this with you know, 245 00:14:24,520 --> 00:14:27,360 Speaker 1: an divided world of people who can it be blue can't? 246 00:14:27,400 --> 00:14:29,960 Speaker 1: So so there's a resolution coming. I'm just not sure 247 00:14:30,000 --> 00:14:32,760 Speaker 1: it's a happy resolution. Chris, We're not having a normal 248 00:14:32,880 --> 00:14:35,880 Speaker 1: Christopher Grossante interview, which is a good and beautiful thing. 249 00:14:35,920 --> 00:14:38,360 Speaker 1: Thrilled to have you on with this breaking news out 250 00:14:38,360 --> 00:14:41,040 Speaker 1: of China. But to bring it back to something you've 251 00:14:41,040 --> 00:14:45,040 Speaker 1: been expert on and profited on, and that is Apple computer. 252 00:14:45,720 --> 00:14:50,240 Speaker 1: I believe a Apple has manufacturing facilities in China. I 253 00:14:50,320 --> 00:14:53,920 Speaker 1: believe be Apple has a lot of revenue coming from China. 254 00:14:54,720 --> 00:14:59,400 Speaker 1: Is Apple shares or your confidence in Apple shares affected 255 00:14:59,800 --> 00:15:03,840 Speaker 1: by what China does with Chinese stocks? How can they 256 00:15:03,880 --> 00:15:07,080 Speaker 1: not be tombet? But I would say even greater. We're 257 00:15:07,120 --> 00:15:10,960 Speaker 1: not super positive on Apple as opposed to other alternatives 258 00:15:10,960 --> 00:15:13,920 Speaker 1: and technology space, simply because at the end of the day, 259 00:15:14,440 --> 00:15:18,040 Speaker 1: most of its profits still come from iPhones. So look, 260 00:15:18,120 --> 00:15:20,920 Speaker 1: I love Apple, I loved him cook, It's just an 261 00:15:21,000 --> 00:15:25,080 Speaker 1: expensive stock at over thirty times earnings when I can 262 00:15:25,120 --> 00:15:29,760 Speaker 1: get a faster growing non hardware stock like Facebook selling 263 00:15:29,760 --> 00:15:32,840 Speaker 1: in the low twenties times earnings based on next concernings 264 00:15:33,000 --> 00:15:35,400 Speaker 1: and and so I just think there's other better ways 265 00:15:35,440 --> 00:15:38,000 Speaker 1: to play tech growth than Apple at this current time. 266 00:15:38,760 --> 00:15:40,880 Speaker 1: We'll leave it there, Christmas Santi, thank you so much 267 00:15:40,920 --> 00:15:48,760 Speaker 1: on China, particularly this morning with m Ai Capital. Benjamin 268 00:15:48,840 --> 00:15:52,400 Speaker 1: Laidler joins us with each o their global market strategists. 269 00:15:52,520 --> 00:15:56,120 Speaker 1: Smartest guy in the block right now, Ben Laidlor reaffirm 270 00:15:56,360 --> 00:16:01,200 Speaker 1: a double digit two thousand, twenty one. Yeah, definitely. I 271 00:16:01,560 --> 00:16:05,560 Speaker 1: think we continue to underestimate the growth recovery. I mean, 272 00:16:05,560 --> 00:16:07,680 Speaker 1: we're going to go into second water ownings next week. 273 00:16:08,000 --> 00:16:10,840 Speaker 1: Consensus sixty year over year, that will be the peak 274 00:16:10,920 --> 00:16:12,800 Speaker 1: year over year. But I still think we're gonna beat that. 275 00:16:13,400 --> 00:16:16,080 Speaker 1: And and I think the next turning story is next year. 276 00:16:16,320 --> 00:16:18,920 Speaker 1: Expectations for next year just look far too low, twelve 277 00:16:18,920 --> 00:16:22,760 Speaker 1: percent when you've got seven percent nominal GDP growth. So 278 00:16:22,800 --> 00:16:26,400 Speaker 1: I think there's still upside to this sort of growth story. 279 00:16:26,440 --> 00:16:28,800 Speaker 1: You know, pms are still you know, at sixty very 280 00:16:28,880 --> 00:16:31,360 Speaker 1: very high levels. So I think the growth story has 281 00:16:31,600 --> 00:16:33,680 Speaker 1: you know, has further to go. And and that's your 282 00:16:34,080 --> 00:16:37,040 Speaker 1: insurance policy to the biggest risk which is out there, 283 00:16:37,080 --> 00:16:39,800 Speaker 1: which is evaluations are still very high. They're gonna come 284 00:16:39,800 --> 00:16:43,280 Speaker 1: down probably is the FED sort of gradually tightens here. 285 00:16:43,360 --> 00:16:45,360 Speaker 1: But but I think that that sort of growth story 286 00:16:45,440 --> 00:16:49,800 Speaker 1: is more than going to offset the decline evaluation. So yes, 287 00:16:50,000 --> 00:16:51,680 Speaker 1: I think there's you know, you've you've you've had a 288 00:16:51,720 --> 00:16:54,760 Speaker 1: remarkable first half. You're gonna make less money than that 289 00:16:54,800 --> 00:16:57,200 Speaker 1: in the second half. But there's definitely a positive return 290 00:16:57,560 --> 00:17:00,400 Speaker 1: on the story here, and I think people should stay invested. 291 00:17:00,520 --> 00:17:02,680 Speaker 1: So Ben, when we talk about the growth obviously the 292 00:17:02,680 --> 00:17:05,040 Speaker 1: economic growth here, a lot of people are starting now 293 00:17:05,080 --> 00:17:07,000 Speaker 1: to sort of look at the idea that the pace 294 00:17:07,040 --> 00:17:09,240 Speaker 1: of growth, earnings growth, i should say, and the pace 295 00:17:09,280 --> 00:17:11,520 Speaker 1: of revenue growth for a lot of the companies, particularly 296 00:17:11,520 --> 00:17:14,560 Speaker 1: here in the US, are gonna be enough to overcome 297 00:17:14,600 --> 00:17:17,800 Speaker 1: any sort of concerns about the FED, inflation, etcetera, etcetera. 298 00:17:17,880 --> 00:17:20,639 Speaker 1: Here are there certain pockets though of the market, certain 299 00:17:20,680 --> 00:17:22,959 Speaker 1: industries that you think are gonna be a little bit 300 00:17:22,960 --> 00:17:27,199 Speaker 1: more resilient than others. So you know, if you're in 301 00:17:27,200 --> 00:17:29,400 Speaker 1: the bullish sort of growth camp that I am, you're 302 00:17:29,400 --> 00:17:31,439 Speaker 1: looking for, you know, who gives me the most lea 303 00:17:31,560 --> 00:17:34,199 Speaker 1: rage and the most exposure to this growth story, and 304 00:17:34,240 --> 00:17:37,720 Speaker 1: that's that's that's the cyclicals, it's value, it's financials, it's 305 00:17:37,760 --> 00:17:40,240 Speaker 1: everything that's pulled back in the last sort of muthil so, 306 00:17:40,240 --> 00:17:42,760 Speaker 1: so I really think you've been given us another opportunity 307 00:17:42,800 --> 00:17:45,439 Speaker 1: here to step up and buy those sort of pro growth, 308 00:17:46,000 --> 00:17:48,639 Speaker 1: pro growth names. So you know, the U S earnings 309 00:17:48,680 --> 00:17:52,200 Speaker 1: next week overall be probably up sort of the second quarter, 310 00:17:52,280 --> 00:17:54,800 Speaker 1: but these cyclicals are gonna be up, you know, over 311 00:17:55,960 --> 00:17:59,119 Speaker 1: you look internationally, you know, Europe, Canada, I mean a 312 00:17:59,119 --> 00:18:00,760 Speaker 1: lot of these are the marks its which were are 313 00:18:00,840 --> 00:18:03,399 Speaker 1: much more depressed. They're coming off much lower basis. You know, 314 00:18:03,560 --> 00:18:06,280 Speaker 1: those overall indices are going to see a hundred percent 315 00:18:06,280 --> 00:18:09,520 Speaker 1: earnings growth rate. So um, you know, I'm bullish on 316 00:18:09,560 --> 00:18:12,879 Speaker 1: the sort of reopening story. You know, the world is vaccinated, 317 00:18:12,920 --> 00:18:15,360 Speaker 1: so I think the reopening story is only just sort 318 00:18:15,400 --> 00:18:17,439 Speaker 1: of beginning, and that's pushing growth with it, and I 319 00:18:17,480 --> 00:18:19,880 Speaker 1: think the places to get exposure to that are these 320 00:18:19,880 --> 00:18:24,280 Speaker 1: sort of cyclicals and and international markets. You know, our 321 00:18:24,400 --> 00:18:28,920 Speaker 1: Javier Blast laid out an argument for structural supply constraints 322 00:18:29,359 --> 00:18:32,240 Speaker 1: in oil pushing the price higher. Of course, we've also 323 00:18:32,240 --> 00:18:35,439 Speaker 1: seen the Opeque saga do that as well. But do 324 00:18:35,480 --> 00:18:39,080 Speaker 1: you see other areas where we have real structural shifts 325 00:18:39,119 --> 00:18:42,000 Speaker 1: in terms of inflation. I noticed you've got the German 326 00:18:42,000 --> 00:18:45,480 Speaker 1: election and the Copy Summit on your docket of things 327 00:18:45,520 --> 00:18:48,720 Speaker 1: to watch. Yeah, so I think what's going on in 328 00:18:48,760 --> 00:18:50,840 Speaker 1: the oil states and just sort of more broadly, the 329 00:18:50,920 --> 00:18:53,359 Speaker 1: sort of green transition, this move to sort of renewables 330 00:18:53,359 --> 00:18:55,840 Speaker 1: is absolutely fascinating. You know, I think all the ingredients 331 00:18:55,840 --> 00:18:57,960 Speaker 1: are there for you know, for a hundred dollar oil, 332 00:18:58,040 --> 00:19:01,480 Speaker 1: You've got this heavily backwardad future's curve, which is not 333 00:19:01,520 --> 00:19:05,920 Speaker 1: incentivizing anybody to draw from more oil. You've got you know, 334 00:19:06,040 --> 00:19:09,919 Speaker 1: you've got drigg recounts in the US which are rebounded 335 00:19:09,960 --> 00:19:12,159 Speaker 1: maybe half as much as you would have expected with 336 00:19:12,320 --> 00:19:14,720 Speaker 1: sort of prices, you know, at these levels. So you know, 337 00:19:14,760 --> 00:19:18,080 Speaker 1: I think there's a real supply um constraints sort of 338 00:19:18,119 --> 00:19:20,359 Speaker 1: coming through, and that's going to drive. You know, that 339 00:19:20,440 --> 00:19:23,240 Speaker 1: potentially drives oil prices up even further. And and I 340 00:19:23,240 --> 00:19:26,080 Speaker 1: actually say the same goes for the broader commodity space. 341 00:19:26,119 --> 00:19:28,280 Speaker 1: I mean, we're focusing a lot on the sort of 342 00:19:28,320 --> 00:19:31,119 Speaker 1: demand rebound right now, but you know, commodity has been 343 00:19:31,119 --> 00:19:32,879 Speaker 1: out of favor for a decade. That means that no 344 00:19:32,920 --> 00:19:34,960 Speaker 1: one's been investing in the commodity space for a decade. 345 00:19:34,960 --> 00:19:38,240 Speaker 1: So I think you have real supply constraints, but it's 346 00:19:38,240 --> 00:19:41,040 Speaker 1: just worth saying. You know, particularly oil, you know, the 347 00:19:41,119 --> 00:19:43,360 Speaker 1: higher prices go, those are the sort of seeds of 348 00:19:43,640 --> 00:19:46,040 Speaker 1: it's sort of understruction, if you like. I mean ultimately 349 00:19:46,040 --> 00:19:48,240 Speaker 1: that will incentivized supply to come back to the market. 350 00:19:48,280 --> 00:19:50,920 Speaker 1: That's going to incentivize but even in centirice even more, 351 00:19:51,359 --> 00:19:54,480 Speaker 1: the sort of move to renewables, so you know, enjoy 352 00:19:54,480 --> 00:19:56,440 Speaker 1: it while they last, but you know ultimately the market 353 00:19:56,480 --> 00:19:59,080 Speaker 1: is going to adjust. Then you have been on a 354 00:19:59,240 --> 00:20:02,040 Speaker 1: magical re year tear. There's just no other way to 355 00:20:02,080 --> 00:20:05,400 Speaker 1: describe it. You've got other people participating in the ball market, 356 00:20:05,760 --> 00:20:10,080 Speaker 1: but nobody's nailed at like you are we over emphasizing 357 00:20:10,160 --> 00:20:14,879 Speaker 1: the so called rotation from technology too cyclical? Is that 358 00:20:15,160 --> 00:20:21,720 Speaker 1: like emphasized too much versus just being in the market. Yeah, 359 00:20:21,680 --> 00:20:23,920 Speaker 1: I think so. I mean, I think cyclicals lead here 360 00:20:23,960 --> 00:20:25,840 Speaker 1: because you know, I think growth, the growth story has 361 00:20:25,920 --> 00:20:27,840 Speaker 1: sort of sort of further to go. But I think, 362 00:20:28,920 --> 00:20:30,600 Speaker 1: I mean, you need to be invested. I think, you know, 363 00:20:30,640 --> 00:20:33,120 Speaker 1: the tech story is just a different story. It's slightly longer, terms, 364 00:20:33,119 --> 00:20:36,159 Speaker 1: a bit more structural. Evaluations are obviously sort of somewhat higher. 365 00:20:36,840 --> 00:20:39,919 Speaker 1: But these are you know, the Fortress balance sheets, you know, 366 00:20:40,160 --> 00:20:43,280 Speaker 1: very strong growth. I mean, big Tech last quarter grew earnings. 367 00:20:44,720 --> 00:20:47,080 Speaker 1: I mean, it's just mind blowing for companies that size 368 00:20:47,440 --> 00:20:49,720 Speaker 1: coming off the year they'd already had. And I think 369 00:20:49,720 --> 00:20:52,199 Speaker 1: it just speaks to sort of somebody some of the 370 00:20:52,240 --> 00:20:53,840 Speaker 1: earnings power. So you know, we can have a debate 371 00:20:53,880 --> 00:20:55,600 Speaker 1: about you know what, am I prepared to pay for 372 00:20:55,640 --> 00:20:58,199 Speaker 1: these things? But I don't really have a problem with that, 373 00:20:58,240 --> 00:21:00,959 Speaker 1: with that sort of earnings power, These margine, these bind sheets, 374 00:21:01,240 --> 00:21:04,080 Speaker 1: you know, more dividends, more shot by backs. It's a 375 00:21:04,119 --> 00:21:07,680 Speaker 1: different story, less sort of juice copy, we're saying right now, 376 00:21:07,720 --> 00:21:10,399 Speaker 1: but it's it's still a very attractive story. Ben Laylor, 377 00:21:10,480 --> 00:21:12,959 Speaker 1: thank you so much, greatly appreciate you getting us started 378 00:21:13,000 --> 00:21:16,120 Speaker 1: here at this morning with Eutro Global Markets can't say 379 00:21:16,200 --> 00:21:22,200 Speaker 1: enough about the sharpness of ters of his morning note. 380 00:21:23,480 --> 00:21:27,040 Speaker 1: Tom Persella joined some RBC Capital Markets today, Tom, I 381 00:21:27,040 --> 00:21:31,879 Speaker 1: did it shart of the real Atlanta wage tracker. Inflation 382 00:21:31,960 --> 00:21:36,040 Speaker 1: adjusted wages are not there. Do you just presume that 383 00:21:36,240 --> 00:21:40,479 Speaker 1: somehow we get inflation adjusted wage growth or is that 384 00:21:40,560 --> 00:21:43,520 Speaker 1: going to be something we cannot attain in the coming 385 00:21:43,600 --> 00:21:46,560 Speaker 1: quarters and years? Well, I think that Well, first of all, 386 00:21:46,560 --> 00:21:49,920 Speaker 1: good morning and hope hope every had to go to holiday. Um, 387 00:21:49,960 --> 00:21:52,399 Speaker 1: you know, I think it's something like that. It's going 388 00:21:52,440 --> 00:21:54,800 Speaker 1: to take more time than it otherwise would in the 389 00:21:54,800 --> 00:21:56,960 Speaker 1: context of we have a lot of inflation right now. 390 00:21:57,480 --> 00:22:00,760 Speaker 1: Um that the fit keeps to like to keep telling 391 00:22:00,800 --> 00:22:03,520 Speaker 1: us is transitory. Um. So I think in in the 392 00:22:03,560 --> 00:22:07,879 Speaker 1: context of these inflationary pressures, I think it will take 393 00:22:08,040 --> 00:22:10,359 Speaker 1: time for that idea to develop. But I think what 394 00:22:10,400 --> 00:22:12,040 Speaker 1: we have to keep in mind is, you know, as 395 00:22:12,040 --> 00:22:15,520 Speaker 1: we look at wage pressures, um, they're they're they're they're 396 00:22:15,600 --> 00:22:18,000 Speaker 1: very present. Um, you know, they are starting to build. 397 00:22:18,040 --> 00:22:20,360 Speaker 1: I think it will take time for them to uh 398 00:22:20,600 --> 00:22:24,200 Speaker 1: push into more of a positive territory. When when you 399 00:22:24,359 --> 00:22:26,560 Speaker 1: just for inflation, but um, you know, no one can 400 00:22:26,600 --> 00:22:28,280 Speaker 1: deny that that that we're moving in the right direction. 401 00:22:28,320 --> 00:22:29,640 Speaker 1: I mean, Tom, you know how it is everyone wants 402 00:22:29,640 --> 00:22:32,680 Speaker 1: everything so fast. Um, you know this is an idea 403 00:22:32,720 --> 00:22:35,280 Speaker 1: that takes time. I mean the the z W over 404 00:22:35,280 --> 00:22:37,879 Speaker 1: where Matt Miller is in Berlin, those expectations came in 405 00:22:37,920 --> 00:22:42,879 Speaker 1: a little soggy. Is the negative real wage enough to 406 00:22:43,080 --> 00:22:46,320 Speaker 1: derail or I should say, get us to a two 407 00:22:46,320 --> 00:22:50,159 Speaker 1: percent g DP sooner than we think? Yeah, So I 408 00:22:50,160 --> 00:22:52,040 Speaker 1: think what we have to keep in mind. So there's 409 00:22:52,040 --> 00:22:53,639 Speaker 1: so I love this question. So there's a couple of 410 00:22:53,680 --> 00:22:58,800 Speaker 1: well with it. I think that there's a couple of 411 00:22:58,600 --> 00:23:01,440 Speaker 1: of of ways of tackling. So I think when I 412 00:23:01,520 --> 00:23:03,359 Speaker 1: think about the recovery, I think I think it's been 413 00:23:03,440 --> 00:23:06,159 Speaker 1: sort of a step function. UM. The first step in 414 00:23:06,200 --> 00:23:08,800 Speaker 1: that function is you know the sort of this mountain 415 00:23:08,840 --> 00:23:11,119 Speaker 1: of saving that that that we're sitting on UM. And 416 00:23:11,160 --> 00:23:13,640 Speaker 1: I think that's going to be you know, a critical 417 00:23:13,720 --> 00:23:16,520 Speaker 1: ingredient to you know, let us see this this ten 418 00:23:16,560 --> 00:23:20,600 Speaker 1: percent or near ten percent um UH growth rate over 419 00:23:20,760 --> 00:23:22,919 Speaker 1: over the coming year. I think what's then going to 420 00:23:22,960 --> 00:23:25,040 Speaker 1: happen is that at some point that's going to hand 421 00:23:25,040 --> 00:23:28,520 Speaker 1: off to wage pressures which we know are mounting now. 422 00:23:28,960 --> 00:23:31,760 Speaker 1: And and so the obviously the step function there is 423 00:23:31,800 --> 00:23:34,240 Speaker 1: you are going to see some slowing in economic activity. 424 00:23:34,280 --> 00:23:36,320 Speaker 1: I mean, you know, it's funny, I think again people 425 00:23:36,320 --> 00:23:38,560 Speaker 1: want it so simple. Yes, growth is gonna slow, but 426 00:23:38,560 --> 00:23:40,800 Speaker 1: you're gonna slow from you know, roughly eight percent growth 427 00:23:40,840 --> 00:23:42,720 Speaker 1: in the coming year to you know roughly four or 428 00:23:42,720 --> 00:23:44,879 Speaker 1: five percent growth next year, which is still you know, 429 00:23:45,000 --> 00:23:49,000 Speaker 1: meaningfully above um potential growth. So that step function then 430 00:23:49,560 --> 00:23:53,320 Speaker 1: um uh, going from going from wages excuse me, going 431 00:23:53,359 --> 00:23:56,200 Speaker 1: from saving then two wages. We think from wages that 432 00:23:56,320 --> 00:23:58,560 Speaker 1: the next step function is an interesting one. We think 433 00:23:58,560 --> 00:24:02,080 Speaker 1: that that could then hand off to the banking system, right. 434 00:24:02,119 --> 00:24:03,680 Speaker 1: I mean, I think if you look at the loans 435 00:24:03,720 --> 00:24:06,600 Speaker 1: deposits ratio in the United States right now, it's collapsed, 436 00:24:06,640 --> 00:24:08,119 Speaker 1: and it's collapsed for all the reasons that that you 437 00:24:08,160 --> 00:24:10,480 Speaker 1: would you know, sort of think, or the reasons you 438 00:24:10,520 --> 00:24:14,520 Speaker 1: would think it would collapse over the course of a pandemic. Um. 439 00:24:14,720 --> 00:24:18,040 Speaker 1: And so what's interesting is at some point that's not 440 00:24:18,080 --> 00:24:20,680 Speaker 1: going to remain collapsed, right, at some point there's going 441 00:24:20,720 --> 00:24:22,439 Speaker 1: to be a uh, you know, the banks will then 442 00:24:22,520 --> 00:24:24,679 Speaker 1: step in, right, people will start knocking on the doors 443 00:24:24,680 --> 00:24:27,359 Speaker 1: of banks once they depleted their savings, you know, once 444 00:24:27,560 --> 00:24:29,680 Speaker 1: you know, wage pressures start to stabilize and say, hey, 445 00:24:29,720 --> 00:24:32,199 Speaker 1: you know, I'd like to make that loan um. And 446 00:24:32,240 --> 00:24:33,760 Speaker 1: so I think that there's a few steps in the 447 00:24:33,760 --> 00:24:37,000 Speaker 1: function that could actually really sort of help us achieve UM. 448 00:24:37,200 --> 00:24:39,960 Speaker 1: I think really strong growth for again, you know, north 449 00:24:39,960 --> 00:24:41,720 Speaker 1: of potential growth for the next few years. But what 450 00:24:42,000 --> 00:24:43,560 Speaker 1: if we do get to that stage or when we 451 00:24:43,560 --> 00:24:45,639 Speaker 1: do get to that stage where folks come back knocket 452 00:24:45,720 --> 00:24:47,439 Speaker 1: on the door, not only of course the individuals, but 453 00:24:47,480 --> 00:24:50,280 Speaker 1: of course with regards to commercial loans as well. If 454 00:24:50,320 --> 00:24:53,960 Speaker 1: that happens with rates currently where they are here, what 455 00:24:54,040 --> 00:24:57,280 Speaker 1: does that mean for the banks here? Yeah? So I mean, look, 456 00:24:57,280 --> 00:24:58,480 Speaker 1: I'm not going to get into the sort of the 457 00:24:58,480 --> 00:25:00,639 Speaker 1: banking sector. I mean that's you know, are are a 458 00:25:00,800 --> 00:25:03,399 Speaker 1: great banking of folks to to sort of deal with. 459 00:25:03,480 --> 00:25:05,760 Speaker 1: But what I would say is, look, even for me, 460 00:25:05,960 --> 00:25:08,679 Speaker 1: someone who's been talking about sort of more inflationary pressure 461 00:25:08,680 --> 00:25:12,879 Speaker 1: than is appreciated, right, stickier inflationary pressure certainly than is appreciated, 462 00:25:13,200 --> 00:25:15,840 Speaker 1: I still don't think that yields go that high. I 463 00:25:15,840 --> 00:25:17,600 Speaker 1: mean it's something like I'm looking for ten ye yields 464 00:25:17,640 --> 00:25:19,920 Speaker 1: to sort of you know, rocket higher from here. Um 465 00:25:20,160 --> 00:25:21,720 Speaker 1: you know, I think we'll be sort of lucky to 466 00:25:21,720 --> 00:25:24,800 Speaker 1: be holding a two handle on on on tends over 467 00:25:24,840 --> 00:25:26,920 Speaker 1: the coming year. I think would be lucky for for 468 00:25:26,920 --> 00:25:28,240 Speaker 1: for that to happen. I mean, I just think there's 469 00:25:28,240 --> 00:25:30,560 Speaker 1: too many factors at play. So I think I tell 470 00:25:30,600 --> 00:25:33,280 Speaker 1: you something about doesn't that tell you something tom about 471 00:25:33,320 --> 00:25:36,720 Speaker 1: how the market sees economic growth further out? No, I don't. 472 00:25:36,800 --> 00:25:39,680 Speaker 1: I think that I don't think it's I don't think 473 00:25:39,680 --> 00:25:41,720 Speaker 1: it's quite that way. I think I think that there 474 00:25:41,760 --> 00:25:45,520 Speaker 1: are a couple of very important ideas that are sort 475 00:25:45,520 --> 00:25:47,960 Speaker 1: of weighing on the market. Which again, look, let's be 476 00:25:48,000 --> 00:25:50,320 Speaker 1: clear the market. We are all the market, right, I 477 00:25:50,320 --> 00:25:52,800 Speaker 1: mean we're we're all the people that are making these forecasts. 478 00:25:53,400 --> 00:25:56,000 Speaker 1: And I think that you know, whoever the quote unquote 479 00:25:56,040 --> 00:25:58,880 Speaker 1: market is, I don't think they know any more than 480 00:25:58,960 --> 00:26:01,080 Speaker 1: any of the economists that or or or in the 481 00:26:01,160 --> 00:26:04,679 Speaker 1: other analysts that are building views, um on on on 482 00:26:04,720 --> 00:26:07,280 Speaker 1: the economic backdrop. So what I would say is, instead 483 00:26:07,320 --> 00:26:10,440 Speaker 1: of some mysterious hey, the market knows something more about 484 00:26:10,480 --> 00:26:12,439 Speaker 1: the backdrop, you know, two or three years out, what 485 00:26:12,480 --> 00:26:13,760 Speaker 1: I would say is this, I think there are a 486 00:26:13,760 --> 00:26:16,080 Speaker 1: couple of key things that are weighing on the market 487 00:26:16,560 --> 00:26:18,240 Speaker 1: or not weighing on the market, that are that are 488 00:26:18,960 --> 00:26:21,680 Speaker 1: that are stopping yields from really rising materially. Here here's 489 00:26:21,680 --> 00:26:24,159 Speaker 1: to them. So the first is, I think, you know, 490 00:26:24,200 --> 00:26:25,720 Speaker 1: we have to keep in mind that we obviously have 491 00:26:26,320 --> 00:26:29,440 Speaker 1: you know, countries and central banks that are still engaged 492 00:26:29,440 --> 00:26:32,879 Speaker 1: in this this negative rate experiment. UM. You know, that 493 00:26:33,040 --> 00:26:35,920 Speaker 1: is obviously something that I think needs to be entertainment. 494 00:26:35,920 --> 00:26:38,880 Speaker 1: We still buns that are you know, negative yielding negative 495 00:26:38,960 --> 00:26:42,800 Speaker 1: right now. If you SX adjust our ten year yield yield, 496 00:26:43,200 --> 00:26:45,840 Speaker 1: what you would actually see is that it's very enticing 497 00:26:45,920 --> 00:26:49,399 Speaker 1: to UM, the Japanese investors in particular, and to European 498 00:26:49,480 --> 00:26:52,119 Speaker 1: investors in particular. So I think that that's a factor 499 00:26:52,400 --> 00:26:54,520 Speaker 1: point one that's weighing on tenure yields. I think the 500 00:26:54,560 --> 00:26:57,000 Speaker 1: other fact that that's weighing on tenure yield UM is 501 00:26:57,040 --> 00:26:58,600 Speaker 1: I think you have to keep in mind, where's the 502 00:26:58,600 --> 00:27:00,919 Speaker 1: fight going with funds right Like if you look at 503 00:27:00,960 --> 00:27:02,960 Speaker 1: their long run estimate of funds right now, it's only 504 00:27:02,960 --> 00:27:04,960 Speaker 1: two and a half percent. Think back to the last 505 00:27:05,040 --> 00:27:07,720 Speaker 1: hiking cycle, the last hiking cycle when the FED got 506 00:27:07,760 --> 00:27:09,479 Speaker 1: funds to two and a half percent, what was their 507 00:27:09,520 --> 00:27:12,119 Speaker 1: long run estimate of funds and then it was three percent. 508 00:27:12,560 --> 00:27:14,239 Speaker 1: So over the course of the last you know, call 509 00:27:14,320 --> 00:27:17,080 Speaker 1: it five or six years, long runestment of funds has 510 00:27:17,080 --> 00:27:19,200 Speaker 1: shifted from three percent down to where it is today, 511 00:27:19,200 --> 00:27:21,320 Speaker 1: which is to say, two and a half percent. So 512 00:27:21,400 --> 00:27:25,040 Speaker 1: if the FED finished fifty basis points less relative to 513 00:27:25,080 --> 00:27:27,880 Speaker 1: their long renestment during the last hiking cycle, I think 514 00:27:27,880 --> 00:27:29,639 Speaker 1: that they're probably gonna wand up and again, not that 515 00:27:29,640 --> 00:27:32,120 Speaker 1: that equation works always, I'm just simply saying, I think, 516 00:27:32,240 --> 00:27:33,919 Speaker 1: but that is then nothing but chopped their long run 517 00:27:34,040 --> 00:27:36,359 Speaker 1: estimate of funds. I think that they're gonna have a 518 00:27:36,400 --> 00:27:40,560 Speaker 1: really hard time lifting rates materially north of two percent. 519 00:27:41,160 --> 00:27:43,400 Speaker 1: And I think that that is yet another factor that 520 00:27:43,400 --> 00:27:45,119 Speaker 1: that sort of you know, is acting as a sealing 521 00:27:45,160 --> 00:27:47,399 Speaker 1: on tends. And the debate here, folks, is on the 522 00:27:47,440 --> 00:27:49,639 Speaker 1: idea can they do in a linear fashion or is 523 00:27:49,680 --> 00:27:52,280 Speaker 1: a jump condition at some point and we'll have to 524 00:27:52,280 --> 00:27:54,359 Speaker 1: see how that works out. Mr PERSELLI, thank you so much, 525 00:27:54,440 --> 00:28:02,879 Speaker 1: Tom Perselli with RBC Capital Markets. Douglas cast is the 526 00:28:03,000 --> 00:28:07,680 Speaker 1: Sabers Partners. Yes, his acclaimed morning note as well. It's 527 00:28:07,720 --> 00:28:10,040 Speaker 1: about more the shorter term, but also he has a 528 00:28:10,119 --> 00:28:12,800 Speaker 1: courage to go along. We'll talk about to go along 529 00:28:12,880 --> 00:28:18,840 Speaker 1: in a minute. Doug, you are terse and decidedly cautious 530 00:28:18,960 --> 00:28:21,719 Speaker 1: on the market. The phrase you use as group stink, 531 00:28:22,160 --> 00:28:25,760 Speaker 1: and it's an institutional Wall Street position for good and 532 00:28:25,840 --> 00:28:30,880 Speaker 1: better times. Are you worried about a correction? Or are 533 00:28:30,920 --> 00:28:34,600 Speaker 1: you worried about a bear market? Or are you worried 534 00:28:34,640 --> 00:28:37,800 Speaker 1: about the worse than that? I'm worried that no one 535 00:28:37,840 --> 00:28:42,440 Speaker 1: else is worried about substantial walkdown in stock prices. I 536 00:28:42,480 --> 00:28:44,760 Speaker 1: see a number of I'm glad you didn't start with 537 00:28:44,800 --> 00:28:47,600 Speaker 1: the New York Yankees, by the way I did. I 538 00:28:47,680 --> 00:28:51,280 Speaker 1: was advised my people talked to your people, and shockingly, 539 00:28:51,560 --> 00:28:55,000 Speaker 1: they've made a total of eighty errors this year. That's 540 00:28:55,040 --> 00:28:57,400 Speaker 1: four more errors than the number of hot dogs that 541 00:28:57,520 --> 00:29:04,760 Speaker 1: Joey Chestnut concerned in the eating contest anage. But I'm 542 00:29:04,800 --> 00:29:07,280 Speaker 1: not am I have no intention of calling my next 543 00:29:07,320 --> 00:29:12,760 Speaker 1: puppy Fenway. Okay, but we got no no, we gotta 544 00:29:12,800 --> 00:29:15,520 Speaker 1: stay on this right now. This is why did I start? 545 00:29:15,560 --> 00:29:21,480 Speaker 1: Who did the Yankees trade to rebuild? Aaron Boone Okay, 546 00:29:21,760 --> 00:29:24,760 Speaker 1: that's easy one. That's a manager that would work. But 547 00:29:24,920 --> 00:29:27,720 Speaker 1: do you really think it's a manager solution? I do 548 00:29:27,840 --> 00:29:33,280 Speaker 1: think so, yes, Okay, that's yeah, that's good. I got guys. 549 00:29:33,360 --> 00:29:35,920 Speaker 1: According to the bookmakers I checked, it actually just made 550 00:29:35,920 --> 00:29:39,240 Speaker 1: a bet there are a fourteen percent chance to make 551 00:29:39,240 --> 00:29:42,080 Speaker 1: the postseason, in less than one half of one percent 552 00:29:42,120 --> 00:29:46,360 Speaker 1: to win the World Series. That's good. Okay. Let's you're 553 00:29:46,360 --> 00:29:49,800 Speaker 1: talking to market about the market. The market ramp uh, 554 00:29:50,000 --> 00:29:53,080 Speaker 1: Tom and poil has been a start. The NAS back 555 00:29:53,240 --> 00:29:57,600 Speaker 1: is now up seven straight weeks. It's strong this morning. Um. 556 00:29:57,680 --> 00:30:00,440 Speaker 1: But my old pal and legendary technical line this Bott 557 00:30:00,480 --> 00:30:03,480 Speaker 1: Farrow once warned in his Ten Lessons of Investing that 558 00:30:03,920 --> 00:30:07,040 Speaker 1: excesses in one direction will lead to an opposite excess 559 00:30:07,080 --> 00:30:10,360 Speaker 1: in the other direction. There's another one of his rules 560 00:30:10,360 --> 00:30:14,240 Speaker 1: I think that might be relevant. Um. Was it was 561 00:30:14,320 --> 00:30:16,960 Speaker 1: Bod's belief that the public and today that means the 562 00:30:17,000 --> 00:30:20,040 Speaker 1: Reddit community and the robin Hood crowds by the most 563 00:30:20,080 --> 00:30:22,920 Speaker 1: at the top and the least at the bottom. Yeah. 564 00:30:23,000 --> 00:30:25,480 Speaker 1: We've certainly seen them, uh, you know, big time in 565 00:30:25,520 --> 00:30:29,280 Speaker 1: the last twelve months here, eighteen months. So Doug is 566 00:30:29,320 --> 00:30:32,800 Speaker 1: the catalyst for a pullback However, you want to define 567 00:30:32,840 --> 00:30:35,560 Speaker 1: a pullback in your mind, what is that catalyst is 568 00:30:35,680 --> 00:30:38,680 Speaker 1: simply that's that's the that's the sixty or four thousand 569 00:30:38,680 --> 00:30:43,600 Speaker 1: dollar question. The biggest market player is the Federal Reserve 570 00:30:44,720 --> 00:30:47,400 Speaker 1: UH and the market players the Federal Reserve in the 571 00:30:47,400 --> 00:30:52,200 Speaker 1: central banks around the world. They've been providing um equity 572 00:30:52,360 --> 00:30:55,520 Speaker 1: heroin for the players since the COVID low. All you 573 00:30:55,520 --> 00:30:57,680 Speaker 1: have to do, Paul is draw a chart that plots 574 00:30:57,920 --> 00:31:01,040 Speaker 1: the SMP index to the Fed's balance. The two lines 575 00:31:01,080 --> 00:31:03,360 Speaker 1: are right on top of each other. But the thing 576 00:31:03,360 --> 00:31:05,800 Speaker 1: about drug dealers is that that they never want the 577 00:31:05,840 --> 00:31:09,520 Speaker 1: customers to get clean. We've had several bubbles in the 578 00:31:09,600 --> 00:31:13,040 Speaker 1: last three decades. Each bubble is growing larger and larger, 579 00:31:13,400 --> 00:31:17,600 Speaker 1: larger than the one before, So one might ask um 580 00:31:18,760 --> 00:31:22,440 Speaker 1: the FED slashes rates lower and lower, rather than clearing 581 00:31:22,440 --> 00:31:25,920 Speaker 1: the imbalances, which get bigger and bigger. With a drug 582 00:31:25,960 --> 00:31:28,680 Speaker 1: like heroin, it takes more and more to induce the high. 583 00:31:28,920 --> 00:31:31,160 Speaker 1: The problem is that it's taking more and more money 584 00:31:31,440 --> 00:31:35,160 Speaker 1: and debt to have a marginal incremental impact on production 585 00:31:35,280 --> 00:31:40,480 Speaker 1: domestic growth UM. I think in endorsing this sort of policy, 586 00:31:40,520 --> 00:31:43,840 Speaker 1: we sow the seeds for problems as debt is at 587 00:31:43,880 --> 00:31:48,880 Speaker 1: least historically been a governor to growth. Um, we're finally 588 00:31:48,880 --> 00:31:53,520 Speaker 1: seeing the adverse impact of unprecedented monetary largest in the 589 00:31:53,560 --> 00:31:56,920 Speaker 1: form of rapidly rising inflation. It's being dismissed by the 590 00:31:57,000 --> 00:31:59,840 Speaker 1: same people who dismissed the dot com boone in the 591 00:32:00,040 --> 00:32:03,080 Speaker 1: two thousand and the slicing and dicing and derivatives that 592 00:32:03,160 --> 00:32:06,280 Speaker 1: took down the global economy in two thousand seven and eight. 593 00:32:06,880 --> 00:32:09,840 Speaker 1: The outcome is that the FED is suppressing volatility. It's 594 00:32:09,880 --> 00:32:15,800 Speaker 1: inflated asset prices, real estate art, it's promoted speculation. It's taken, 595 00:32:15,880 --> 00:32:19,360 Speaker 1: as you mentioned several segments ago, the real tenure yield 596 00:32:19,840 --> 00:32:24,120 Speaker 1: um to deep negative levels, serving two generally underpriced risk. 597 00:32:24,360 --> 00:32:26,960 Speaker 1: There appears to me to be a lot more uncertainty 598 00:32:27,080 --> 00:32:31,080 Speaker 1: than many investors and traders see. I saw an amazing 599 00:32:31,160 --> 00:32:36,400 Speaker 1: statistic um that five eight billion has flown into global 600 00:32:36,440 --> 00:32:40,280 Speaker 1: equity funds during the first half. If we annualize that 601 00:32:40,880 --> 00:32:44,800 Speaker 1: and make it a billion, a trillion, fifty million, that 602 00:32:44,880 --> 00:32:49,120 Speaker 1: would result in more inflows in twenty in twenty one 603 00:32:49,240 --> 00:32:53,680 Speaker 1: years combined. And I think that the twelve trillion of 604 00:32:53,760 --> 00:32:57,760 Speaker 1: negative yielding debt has definitely helped the talk of the weekend. 605 00:32:57,800 --> 00:33:00,080 Speaker 1: Bank of America with that research plot I thought you 606 00:33:00,200 --> 00:33:02,640 Speaker 1: mentioned when you mentioned five and a gazillion dollars, I 607 00:33:02,640 --> 00:33:06,240 Speaker 1: thought that was Mookie Bett's contract with the Dodgers continue exactly. 608 00:33:06,640 --> 00:33:08,480 Speaker 1: But we are seeing we are seeing, you know, as 609 00:33:08,520 --> 00:33:11,640 Speaker 1: it relates to the market share to term, we're seeing divergences. 610 00:33:11,720 --> 00:33:14,880 Speaker 1: During the last seven weeks. The percentage of stocks over 611 00:33:14,960 --> 00:33:19,840 Speaker 1: there forty two simple moving average is barely changed and 612 00:33:19,880 --> 00:33:23,840 Speaker 1: as substantially lower than in January. And we have these 613 00:33:25,440 --> 00:33:30,320 Speaker 1: these yolo traders not happy or satisfied making money in stocks. 614 00:33:30,320 --> 00:33:32,920 Speaker 1: They have to move out ever further on the risk curve. 615 00:33:33,360 --> 00:33:36,680 Speaker 1: And according to Goldman Sachs, listen to this stat three 616 00:33:36,800 --> 00:33:40,680 Speaker 1: of the top fifteen call auction volume days on record 617 00:33:41,080 --> 00:33:44,920 Speaker 1: going back to and that's a total of seven thousand, 618 00:33:45,000 --> 00:33:50,440 Speaker 1: two hundred observations have happened since this year's Memorial Day. Well, 619 00:33:50,440 --> 00:33:52,560 Speaker 1: it's a new market, and Gary Gensler is going to 620 00:33:52,640 --> 00:33:55,800 Speaker 1: solve that. For studcast, I gotta go long term here. 621 00:33:55,840 --> 00:33:57,960 Speaker 1: I want you to reaffirm you know you're doing the 622 00:33:57,960 --> 00:34:00,000 Speaker 1: short term thing, and I get all that that's your class, 623 00:34:00,560 --> 00:34:02,840 Speaker 1: but you have had the courage to say some of 624 00:34:02,880 --> 00:34:06,920 Speaker 1: these technological juggernauts are five and I don't want to 625 00:34:06,920 --> 00:34:09,880 Speaker 1: put words in your mouth, but they're literally decade long holes. 626 00:34:10,320 --> 00:34:13,440 Speaker 1: Do you stand by that this morning? Yeah, I think 627 00:34:13,520 --> 00:34:16,719 Speaker 1: that I've long stated and you know that Amazon has 628 00:34:16,760 --> 00:34:20,640 Speaker 1: been my favorite. It's up another eighty two dollars this morning. 629 00:34:21,360 --> 00:34:28,000 Speaker 1: UM that several members X Netflix of fang UM that 630 00:34:28,000 --> 00:34:34,480 Speaker 1: would be Facebook, Amazon and Google have deepening modes of 631 00:34:34,560 --> 00:34:38,839 Speaker 1: paraphrase the term used by Warren and Charlie UM, and 632 00:34:39,000 --> 00:34:45,240 Speaker 1: that the existential threat of anti trust really is being overstated. 633 00:34:45,640 --> 00:34:47,640 Speaker 1: And I've said, in the case of Amazon, and it's 634 00:34:47,640 --> 00:34:50,880 Speaker 1: happened in the last two quarters, that their earnings growth 635 00:34:51,520 --> 00:34:57,400 Speaker 1: UM will substantially exceed group stink or consensus expectation, and 636 00:34:57,480 --> 00:35:00,719 Speaker 1: that has occurred. Are they value stocks or are they 637 00:35:00,840 --> 00:35:06,840 Speaker 1: growth stocks? Well, UM, it depends when you buy them. 638 00:35:06,840 --> 00:35:09,560 Speaker 1: Buy them, um. You know, if you brought them in 639 00:35:09,640 --> 00:35:13,200 Speaker 1: December two eighteen, they were when we did it was 640 00:35:13,440 --> 00:35:18,160 Speaker 1: they were clearly UM value stocks. The same could be 641 00:35:18,239 --> 00:35:23,719 Speaker 1: said for much. I don't think they're you know, I 642 00:35:23,760 --> 00:35:25,600 Speaker 1: know that a lot of people are making the case 643 00:35:25,640 --> 00:35:30,080 Speaker 1: that their value stocks because their pees are less than 644 00:35:30,120 --> 00:35:33,800 Speaker 1: their expected growth rates. So I think there's somewhere between 645 00:35:33,880 --> 00:35:37,359 Speaker 1: value and growth. Doug, we gotta shift back, and you know, 646 00:35:37,480 --> 00:35:40,120 Speaker 1: I'm so upset. I'm watching more National in Ball this 647 00:35:40,200 --> 00:35:43,560 Speaker 1: year than I've ever watched before because it's like real baseball. 648 00:35:44,120 --> 00:35:46,560 Speaker 1: Doug casts on the shift, folks. For those of you 649 00:35:46,640 --> 00:35:50,000 Speaker 1: that don't understand this, there's four players in the infield 650 00:35:50,280 --> 00:35:52,640 Speaker 1: and they move around a little bit, but all of 651 00:35:52,719 --> 00:35:54,960 Speaker 1: a sudden, we're you know, twenty years ago, it was 652 00:35:55,000 --> 00:35:57,760 Speaker 1: like once a game twice again. They did it every 653 00:35:57,760 --> 00:36:00,880 Speaker 1: single Plague Dog cast. They're doing some fancy pants stuff 654 00:36:01,400 --> 00:36:03,719 Speaker 1: and I'm sorry, the hitters are starting to figure this out. 655 00:36:04,080 --> 00:36:06,520 Speaker 1: Are you for a rule that would contain the shift 656 00:36:06,560 --> 00:36:10,080 Speaker 1: in baseball? No, I don't think. I don't you know 657 00:36:10,120 --> 00:36:13,760 Speaker 1: you asked me last time, would regard to the distance 658 00:36:13,760 --> 00:36:15,960 Speaker 1: of the mount to home plate? No? I think you 659 00:36:16,040 --> 00:36:18,680 Speaker 1: keep you keep, you keep the rules as they are. 660 00:36:19,160 --> 00:36:22,800 Speaker 1: They work well for over a century. Okay, Doug Cass, 661 00:36:22,840 --> 00:36:27,520 Speaker 1: thank you so much. An update. Yeah, absolutely, Well that's 662 00:36:27,560 --> 00:36:29,399 Speaker 1: what they're doing. I mean in the National League where 663 00:36:29,400 --> 00:36:30,920 Speaker 1: they know what to do with the bat because they're 664 00:36:30,960 --> 00:36:34,200 Speaker 1: not all trying to hit homers. Play after the Brewers 665 00:36:34,200 --> 00:36:37,919 Speaker 1: are like a clinic, play after play, after they beat 666 00:36:37,920 --> 00:36:41,319 Speaker 1: they beat the shift as well. Have we done enough 667 00:36:41,320 --> 00:36:48,160 Speaker 1: baseball talk? This is the Bloomberg Surveillance Podcast. Thanks for listening. 668 00:36:48,520 --> 00:36:51,880 Speaker 1: Join us live weekdays from seven to ten am Eastern 669 00:36:52,120 --> 00:36:56,160 Speaker 1: on Bloomberg Radio and on Bloomberg Television each day from 670 00:36:56,200 --> 00:36:59,600 Speaker 1: six to nine am for insight from the best and 671 00:36:59,719 --> 00:37:04,520 Speaker 1: he can comics, finance, investment, and international relations. And subscribe 672 00:37:04,560 --> 00:37:09,479 Speaker 1: to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com, 673 00:37:09,560 --> 00:37:12,800 Speaker 1: and of course on the terminal. I'm Tom Keene, and 674 00:37:12,960 --> 00:37:14,799 Speaker 1: this is Bloomberg