1 00:00:09,840 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,480 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Jim 5 00:00:27,520 --> 00:00:29,920 Speaker 1: Glassman joins us of JP Morgan, who has given us 6 00:00:30,320 --> 00:00:35,720 Speaker 1: wonderful perspective over the years over jobs, over wages, and 7 00:00:35,840 --> 00:00:39,920 Speaker 1: over this quote a fully employed America. One of your charms, 8 00:00:40,159 --> 00:00:42,800 Speaker 1: Jim and your were way out front on this was 9 00:00:43,000 --> 00:00:48,000 Speaker 1: seeing help wanted signs outside businesses. Even I'm seeing them 10 00:00:48,040 --> 00:00:51,400 Speaker 1: now here in one zero zero two two. They're out there, 11 00:00:51,400 --> 00:00:53,760 Speaker 1: aren't they. They're all over the place. UM. I had 12 00:00:53,760 --> 00:00:56,279 Speaker 1: to travel a lot and talk to businesses that are 13 00:00:56,280 --> 00:00:58,280 Speaker 1: trying to manage things, and this is the number one 14 00:00:58,680 --> 00:01:01,400 Speaker 1: issue we're trying to find bow trying to figure out 15 00:01:01,440 --> 00:01:04,360 Speaker 1: how to retain them. There's some clever things going on 16 00:01:04,400 --> 00:01:06,959 Speaker 1: people are figuring out, like crazing their wages. Well, that 17 00:01:06,959 --> 00:01:09,880 Speaker 1: would be one thing, but there, for example, it's hard 18 00:01:09,880 --> 00:01:13,040 Speaker 1: to convince somebody give them a four one plan. Young 19 00:01:13,040 --> 00:01:16,880 Speaker 1: people don't care about retirement plans. But point there's forty two, 20 00:01:16,959 --> 00:01:19,319 Speaker 1: so student loans, student loans. Some of them are clever. 21 00:01:19,400 --> 00:01:22,600 Speaker 1: Ones are talking about paying help paying down student loans 22 00:01:22,600 --> 00:01:25,520 Speaker 1: for kids, like the nonprofits to do. And you get 23 00:01:25,560 --> 00:01:27,480 Speaker 1: that benefit as long as you stay at the company. 24 00:01:27,640 --> 00:01:30,120 Speaker 1: John and I, we're live in a rarefied atmosphere. I 25 00:01:30,160 --> 00:01:33,760 Speaker 1: don't know if you know that, but okay, to to 26 00:01:33,959 --> 00:01:36,560 Speaker 1: all the people coast to coast, listen to this. Somebody's 27 00:01:36,600 --> 00:01:40,280 Speaker 1: making thirty eight five or forty two seven or whatever, 28 00:01:40,720 --> 00:01:43,280 Speaker 1: and they really need to get up three or four 29 00:01:43,360 --> 00:01:48,360 Speaker 1: thousand dollars. Why aren't those conversations happening in a sub 30 00:01:48,440 --> 00:01:52,720 Speaker 1: four percent America job economy. Yeah, it's it's interesting. I mean, 31 00:01:52,760 --> 00:01:54,880 Speaker 1: we're all. Anyone who grew up in the seventies and 32 00:01:54,920 --> 00:01:57,120 Speaker 1: eighties and saw how this worked is surprised by it. 33 00:01:57,160 --> 00:01:59,200 Speaker 1: But I think some of them is the problem is 34 00:01:59,200 --> 00:02:02,520 Speaker 1: businesses are opera it in the same competitive environment that 35 00:02:02,640 --> 00:02:06,040 Speaker 1: workers are. And I think businesses are just being really 36 00:02:06,120 --> 00:02:08,080 Speaker 1: cautious about this because they don't know whether they can 37 00:02:08,280 --> 00:02:11,760 Speaker 1: up their price. John jump in. I got my own theory. John, 38 00:02:11,840 --> 00:02:13,440 Speaker 1: jump in here, and see what I think. Jim is 39 00:02:13,480 --> 00:02:16,520 Speaker 1: touched on an important story that labor costs are going 40 00:02:16,639 --> 00:02:19,560 Speaker 1: up for the employer. It costs small to employ someone 41 00:02:19,560 --> 00:02:21,760 Speaker 1: in America. Now, there's a lot of benefits they pay 42 00:02:21,880 --> 00:02:24,720 Speaker 1: for healthcare. Healthcare is one of them, and workers don't 43 00:02:24,760 --> 00:02:27,240 Speaker 1: see that. And I keep asking people, well, why aren't 44 00:02:27,240 --> 00:02:29,760 Speaker 1: you showing that in your paycheck. I know what the 45 00:02:29,800 --> 00:02:31,920 Speaker 1: price of gas is that all my local gas stations. 46 00:02:31,960 --> 00:02:34,560 Speaker 1: I don't really know what my company pays for benefits 47 00:02:34,639 --> 00:02:36,600 Speaker 1: unless I go to the website. So it's not in 48 00:02:36,600 --> 00:02:39,200 Speaker 1: everyone's face, and they tend to think, well, if you've 49 00:02:39,200 --> 00:02:41,040 Speaker 1: got to pay more for my benefits, they don't tend 50 00:02:41,120 --> 00:02:43,080 Speaker 1: to think of that as a pay as they're part 51 00:02:43,120 --> 00:02:45,200 Speaker 1: of their pay. But it is from a company's point 52 00:02:45,200 --> 00:02:47,200 Speaker 1: of view. So it's that a structural change. Jim that 53 00:02:47,200 --> 00:02:49,360 Speaker 1: you just don't think he's being captured by the economic 54 00:02:49,440 --> 00:02:51,840 Speaker 1: diight set. No, it is captured. We watch it in 55 00:02:51,919 --> 00:02:54,760 Speaker 1: the employment cost index measures, for example. They capture a 56 00:02:54,760 --> 00:02:56,840 Speaker 1: lot of the cost of benefits. But I think for 57 00:02:56,880 --> 00:02:59,600 Speaker 1: the average worker, they don't see it. And what they 58 00:02:59,600 --> 00:03:03,160 Speaker 1: don't dan is why their employers maybe are being so cautious, 59 00:03:03,200 --> 00:03:05,440 Speaker 1: but maybe because they're not aware of what's going on 60 00:03:05,480 --> 00:03:07,840 Speaker 1: with health care costs and all the other benefits that 61 00:03:07,840 --> 00:03:09,760 Speaker 1: the companies pay for. Jim, let's talk about the week 62 00:03:09,800 --> 00:03:13,200 Speaker 1: ahead as well. Cp I retail sales and the chairman 63 00:03:13,320 --> 00:03:17,160 Speaker 1: Federals of Chairman j pal speaking likes this week as well. 64 00:03:17,200 --> 00:03:18,920 Speaker 1: What's the highlight for you out of those three things. 65 00:03:19,080 --> 00:03:22,600 Speaker 1: Retail sales I think are pretty impressive. Consumer trends are good. 66 00:03:23,480 --> 00:03:27,119 Speaker 1: I think the CPI, to me, what's what's valuable, what's 67 00:03:27,160 --> 00:03:29,160 Speaker 1: useful about what's going on with the dollar right now? 68 00:03:29,480 --> 00:03:31,600 Speaker 1: It's helping to damp in some of the worries about 69 00:03:31,600 --> 00:03:33,799 Speaker 1: inflation in the US. Maybe it's spreading it to your 70 00:03:33,840 --> 00:03:35,960 Speaker 1: it will shift it to Europe a little bit, and 71 00:03:35,960 --> 00:03:38,119 Speaker 1: and to China. But I think you know, of all 72 00:03:38,160 --> 00:03:40,840 Speaker 1: the things I worry about in my list of and 73 00:03:41,240 --> 00:03:43,280 Speaker 1: it's not a long list, the FED is not on 74 00:03:43,320 --> 00:03:46,120 Speaker 1: that list. Interesting why because all the FT's trying to 75 00:03:46,160 --> 00:03:48,440 Speaker 1: do is take their foot off the gas. And I 76 00:03:48,520 --> 00:03:50,560 Speaker 1: know people have gotten used to zero interest rates in 77 00:03:50,600 --> 00:03:53,320 Speaker 1: the last decade, but the fact is the FET is 78 00:03:53,320 --> 00:03:55,640 Speaker 1: really just trying to move things back to something more normal. 79 00:03:55,680 --> 00:03:57,400 Speaker 1: We never know what normal is, but they're not going 80 00:03:57,440 --> 00:04:01,280 Speaker 1: to go overboard, particularly with inflation. Well behaved, you'll you'll 81 00:04:01,320 --> 00:04:04,280 Speaker 1: know when the FED gets around and thinking about stepping 82 00:04:04,320 --> 00:04:06,120 Speaker 1: on the brakes. That's not our word, you know. I 83 00:04:06,160 --> 00:04:09,960 Speaker 1: know you thirty years ago were absolutely glued to what 84 00:04:10,080 --> 00:04:12,840 Speaker 1: bon Jovi was doing, and they had they had the 85 00:04:12,920 --> 00:04:15,840 Speaker 1: number one hear thirty years ago bat medicine. Okay, fine, 86 00:04:16,400 --> 00:04:19,120 Speaker 1: now you mentioned those of us from twenty and thirty 87 00:04:19,200 --> 00:04:21,799 Speaker 1: years ago. We're looking at this job economy and going, yeah, really, 88 00:04:22,400 --> 00:04:26,240 Speaker 1: I would suggest what's changed is the direct linkage of 89 00:04:26,400 --> 00:04:32,320 Speaker 1: bonus for executives to labor compensation. If they give labor 90 00:04:32,440 --> 00:04:36,120 Speaker 1: a wage, now they feel it comes directly out of 91 00:04:36,200 --> 00:04:40,920 Speaker 1: their large bonus compensation. Were thirty years ago, they didn't 92 00:04:40,920 --> 00:04:43,600 Speaker 1: have that structure. Yeah, that you know. I think the 93 00:04:43,640 --> 00:04:47,560 Speaker 1: bigger story, though, is innovation has been very disruptive for 94 00:04:47,600 --> 00:04:50,159 Speaker 1: their workface. So if you look at the what happened 95 00:04:50,160 --> 00:04:52,880 Speaker 1: to the share of income the goes to workers and 96 00:04:52,920 --> 00:04:54,840 Speaker 1: the share of it goes to profits and other things. 97 00:04:55,160 --> 00:04:58,480 Speaker 1: It really compressed back in the two decades ago, which 98 00:04:58,480 --> 00:05:00,960 Speaker 1: is why all of us economists are talking about the 99 00:05:01,120 --> 00:05:04,440 Speaker 1: superstar effect, the Amazon's you know, as all of us 100 00:05:04,440 --> 00:05:07,360 Speaker 1: go shopping on our phones. It's transformed retail sector. And 101 00:05:07,400 --> 00:05:10,400 Speaker 1: I really think it's innovation that is driving a lot 102 00:05:10,440 --> 00:05:14,240 Speaker 1: of the challenges that workers face. Um and I think, 103 00:05:15,160 --> 00:05:16,680 Speaker 1: you know, I don't know how you get around the 104 00:05:16,720 --> 00:05:18,240 Speaker 1: way to get around that as you've got to figure 105 00:05:18,240 --> 00:05:19,600 Speaker 1: out how to get people there. There are a lot 106 00:05:19,600 --> 00:05:21,400 Speaker 1: of new jobs that have opened up because of that, 107 00:05:21,720 --> 00:05:24,720 Speaker 1: but you gotta get it. Takes a lifetime sometimes to 108 00:05:24,760 --> 00:05:28,080 Speaker 1: prepare for that kind of stuff. Okay, Jim Blassman, thank 109 00:05:28,120 --> 00:05:32,359 Speaker 1: you so much. A good conversation here on on the 110 00:05:33,000 --> 00:05:34,960 Speaker 1: I get more mail John in this than anything else. 111 00:05:37,640 --> 00:05:41,520 Speaker 1: Kevin Book joining us now striding it's wrong with you? 112 00:05:41,839 --> 00:05:44,360 Speaker 1: Kevin Book joining us now, Clay, have you Energy Partners 113 00:05:44,640 --> 00:05:47,880 Speaker 1: head of research? Important? Seriously, what's important in Australia as 114 00:05:47,920 --> 00:05:50,920 Speaker 1: we look at as a US story the Stratis it 115 00:05:51,080 --> 00:05:55,719 Speaker 1: ran you know you're oil. Yeah, it's you know, you 116 00:05:55,760 --> 00:05:57,839 Speaker 1: make a joke about it, but it's a huge deal 117 00:05:58,320 --> 00:06:01,480 Speaker 1: away from West Texas Intermedia massively. Kevin Book joining us 118 00:06:01,480 --> 00:06:04,560 Speaker 1: now clear for you? Energy Partner's head of research, Kevin, 119 00:06:04,920 --> 00:06:07,120 Speaker 1: How have we gone from a situation where the Saudis 120 00:06:07,160 --> 00:06:10,200 Speaker 1: is saying, pump baby, pump two. Maybe we cut through 121 00:06:10,240 --> 00:06:13,600 Speaker 1: next year and we need it. Well, they're looking at 122 00:06:13,640 --> 00:06:17,560 Speaker 1: a seasonal blow basically first quarter is always weak for demand. 123 00:06:17,880 --> 00:06:21,159 Speaker 1: On top of that, you have currency adjusted prices hitting 124 00:06:21,200 --> 00:06:24,600 Speaker 1: some of the non dollar importers harder, weaker GDP, and 125 00:06:24,680 --> 00:06:28,839 Speaker 1: with that everybody pumping faster than ever expected, Russia rising 126 00:06:28,880 --> 00:06:31,640 Speaker 1: to the challenge the US UH boils coming out of 127 00:06:31,640 --> 00:06:34,320 Speaker 1: the premium basically on the backs of burrows, even though 128 00:06:34,360 --> 00:06:36,880 Speaker 1: pipelines aren't there to carry it. UH. And that's bringing 129 00:06:36,880 --> 00:06:38,640 Speaker 1: a lot of supply to the world. So they're looking 130 00:06:38,680 --> 00:06:42,159 Speaker 1: at a lush world. They're seeing some some price weakness. UH. 131 00:06:42,200 --> 00:06:44,480 Speaker 1: The question whether they really cut or whether they talked 132 00:06:44,480 --> 00:06:48,640 Speaker 1: about cutting is a different question. We kissed below seventy Brent, 133 00:06:49,000 --> 00:06:52,040 Speaker 1: the princes above seventy. Now, you know, words go far 134 00:06:52,080 --> 00:06:54,760 Speaker 1: in this world. I mean, Kevin, what's so important hereon? 135 00:06:54,880 --> 00:06:57,520 Speaker 1: And John brings it up with a discussion of Australian 136 00:06:57,680 --> 00:07:01,120 Speaker 1: in folks out of the Asia or aust Asian coverage 137 00:07:01,120 --> 00:07:03,800 Speaker 1: is very important in the New York Evening. But Kevin, 138 00:07:03,839 --> 00:07:07,000 Speaker 1: what is so important here is we forget about nations 139 00:07:07,000 --> 00:07:13,080 Speaker 1: like Australia that are completely dependent unimported oil. How are 140 00:07:13,080 --> 00:07:16,880 Speaker 1: they doing in this latest mix? Well, you know, it 141 00:07:16,920 --> 00:07:19,080 Speaker 1: depends on who's imported from where. If you were buying 142 00:07:19,080 --> 00:07:22,760 Speaker 1: your oil from Iran, you definitely have a different sort 143 00:07:22,800 --> 00:07:25,160 Speaker 1: of thinking to do. For India, you're talking about ten 144 00:07:25,240 --> 00:07:28,000 Speaker 1: or fifteen percent of imports. For China, you're in the 145 00:07:28,040 --> 00:07:31,840 Speaker 1: single digits. Really only Turkey massively exposed. For everyone else 146 00:07:31,880 --> 00:07:34,240 Speaker 1: buying oil on the open market, quality is the question, 147 00:07:34,320 --> 00:07:36,080 Speaker 1: and it's the question of whether you're going to get 148 00:07:36,080 --> 00:07:38,920 Speaker 1: the mediums that are going to be extremely tight as 149 00:07:38,960 --> 00:07:41,920 Speaker 1: the Iran oil sanctions ramp, or whether there's a there's 150 00:07:42,040 --> 00:07:44,840 Speaker 1: refineries that can make good use of light with distillate 151 00:07:45,000 --> 00:07:48,040 Speaker 1: demand being the thing that's leading the pail right now, Uh, 152 00:07:48,320 --> 00:07:50,160 Speaker 1: you're probably going to see less of a bid for 153 00:07:50,160 --> 00:07:53,280 Speaker 1: the light and see some of the margins compressed with 154 00:07:53,360 --> 00:07:56,480 Speaker 1: the distillate driving up the medium barrels. And John has 155 00:07:56,480 --> 00:07:58,960 Speaker 1: comes from a very smart article out of Sydney with 156 00:07:59,000 --> 00:08:02,840 Speaker 1: the conversation is a title of the blog. Fifty two 157 00:08:02,880 --> 00:08:07,960 Speaker 1: percent of imported petrol comes from Singapore, eighteen percent from 158 00:08:08,000 --> 00:08:12,560 Speaker 1: South Korea, twelve from Japan. Well, you know, like introit's 159 00:08:12,800 --> 00:08:14,920 Speaker 1: serious issue. Well, let's talk about some of the refining 160 00:08:14,960 --> 00:08:17,240 Speaker 1: demand in China. Kevin, It's really difficult to get a 161 00:08:17,280 --> 00:08:19,080 Speaker 1: few on what is happening with China at the moment, 162 00:08:19,120 --> 00:08:20,520 Speaker 1: because many people will tell you a story of a 163 00:08:20,560 --> 00:08:24,040 Speaker 1: slow down, deceleration and potentially weakening demand for commodities maybe 164 00:08:24,040 --> 00:08:26,840 Speaker 1: in the future. In the here and now, we're looking 165 00:08:26,880 --> 00:08:28,800 Speaker 1: at record crude demand arm WEA for some of the 166 00:08:28,840 --> 00:08:32,439 Speaker 1: private refiners. Yeah, this is first of all, it's the 167 00:08:32,520 --> 00:08:35,520 Speaker 1: opacity problem that I don't think we can circumvent here 168 00:08:35,559 --> 00:08:38,920 Speaker 1: from the States. Maybe with drones and lasers you can 169 00:08:38,920 --> 00:08:42,160 Speaker 1: do a better job of sighting China. But from from 170 00:08:42,200 --> 00:08:45,000 Speaker 1: our perspective, certainly very strong crude demand looking like strong 171 00:08:45,080 --> 00:08:49,040 Speaker 1: throughputs and not yet weakness. Uh, they are building reserves. 172 00:08:49,080 --> 00:08:51,480 Speaker 1: There's always a chance that some of those barrels went 173 00:08:51,520 --> 00:08:53,920 Speaker 1: into the ground and not into refineries. But right now 174 00:08:53,920 --> 00:08:56,320 Speaker 1: what we're seeing looks like a lot of refinery throughputs. So, 175 00:08:56,400 --> 00:08:58,320 Speaker 1: Kevin is three big stories that I think of really 176 00:08:58,360 --> 00:09:01,439 Speaker 1: pressured crude over the last month. One is the issue 177 00:09:01,480 --> 00:09:04,200 Speaker 1: with Saudi Arabia pumping a ton of crude, a lot 178 00:09:04,200 --> 00:09:07,080 Speaker 1: of crude. The other issue is Iran and the waivers 179 00:09:07,080 --> 00:09:08,960 Speaker 1: that have actually been introduced to allow some of the 180 00:09:09,000 --> 00:09:12,160 Speaker 1: importers of Iranian crew to carry on importing Iranian crude, 181 00:09:12,360 --> 00:09:14,520 Speaker 1: and then the demand picture as well, which is becoming 182 00:09:14,520 --> 00:09:17,160 Speaker 1: increasingly much more of the concern on the margin as well. 183 00:09:17,320 --> 00:09:20,000 Speaker 1: Kevin off those three issues, what is the most important 184 00:09:20,000 --> 00:09:23,040 Speaker 1: issue right now for the your market? I think you 185 00:09:23,120 --> 00:09:26,240 Speaker 1: probably should focus on number three. Demand. At the start 186 00:09:26,240 --> 00:09:28,880 Speaker 1: of this year, we talked about the US driver flattening 187 00:09:28,880 --> 00:09:32,400 Speaker 1: out and declining on consumption, not because of price response, 188 00:09:32,679 --> 00:09:36,199 Speaker 1: but because of efficiency built into the fleet undercutting demand. 189 00:09:36,520 --> 00:09:39,680 Speaker 1: That's happening around the world. You have a more price 190 00:09:39,800 --> 00:09:42,800 Speaker 1: driven demand response the non O E c D buyers 191 00:09:42,800 --> 00:09:46,400 Speaker 1: they buy with GDP as it rises to As GDP slackens, 192 00:09:46,559 --> 00:09:49,199 Speaker 1: demand slackens, the O E c D buyers much more 193 00:09:49,200 --> 00:09:52,160 Speaker 1: price sensitive. But we're seeing increased price sensitivity in the 194 00:09:52,240 --> 00:09:55,680 Speaker 1: Chinese consumption of crude and petroleum now as well, which 195 00:09:55,720 --> 00:09:58,959 Speaker 1: means that with a high currency adjusted import price, you're 196 00:09:59,000 --> 00:10:04,000 Speaker 1: going to see a relenting in Chinese demand eventually. Within 197 00:10:04,040 --> 00:10:07,800 Speaker 1: the eventually is what big oil does? I mean we 198 00:10:07,840 --> 00:10:09,599 Speaker 1: had I guess we had hopes for a whisper of 199 00:10:09,600 --> 00:10:12,520 Speaker 1: a hundred dollars a barrel. Bring it back from your 200 00:10:12,559 --> 00:10:17,079 Speaker 1: international relations study to what American big oil does. Are 201 00:10:17,120 --> 00:10:21,120 Speaker 1: they just assuming barrel oil? Can they actually set higher 202 00:10:22,480 --> 00:10:26,120 Speaker 1: different companies have different capital discipline. The engineers. Think of 203 00:10:26,160 --> 00:10:28,560 Speaker 1: the U S Oil companies as engineers. They build it 204 00:10:28,600 --> 00:10:31,000 Speaker 1: to run for a long time. Think of the international 205 00:10:31,000 --> 00:10:34,760 Speaker 1: super majors as traders, resource starved, prospecting into the world, 206 00:10:34,760 --> 00:10:37,480 Speaker 1: will trade anything, just make a margin? And think of 207 00:10:37,480 --> 00:10:39,800 Speaker 1: the U S, E and P s basically uh if 208 00:10:39,800 --> 00:10:42,600 Speaker 1: you will, as sort of the high risk, high profile, 209 00:10:42,960 --> 00:10:46,160 Speaker 1: high price, break even kind of companies. When you look 210 00:10:46,200 --> 00:10:48,600 Speaker 1: at this sort of the low end of the range 211 00:10:48,600 --> 00:10:51,040 Speaker 1: on the price range, you tend to see more durability 212 00:10:51,040 --> 00:10:53,280 Speaker 1: in the U S Super majors because they have break 213 00:10:53,360 --> 00:10:56,079 Speaker 1: even prices the blow end of the deck. That's been 214 00:10:56,080 --> 00:10:59,880 Speaker 1: a story and for the big these companies of a 215 00:11:00,080 --> 00:11:03,959 Speaker 1: just did so much in the last company years. We 216 00:11:04,040 --> 00:11:06,040 Speaker 1: caught up with Bob Dudley this morning and the brake 217 00:11:06,120 --> 00:11:08,120 Speaker 1: even I forget what he said specifically, but was in 218 00:11:08,160 --> 00:11:12,320 Speaker 1: and around sixty dollars. Sixty dollars Kevin. We've seen big changes, 219 00:11:12,360 --> 00:11:16,240 Speaker 1: haven't we. Oh yeah, I mean look the way that 220 00:11:16,280 --> 00:11:18,720 Speaker 1: you can look at the labor force, last tidy these 221 00:11:18,760 --> 00:11:22,440 Speaker 1: companies have they laid off, lots of folks still haven't 222 00:11:22,480 --> 00:11:25,240 Speaker 1: hired back. Some are doing reductions in force. Still they're 223 00:11:25,280 --> 00:11:27,559 Speaker 1: parrying all the way down every which way they can. 224 00:11:27,960 --> 00:11:30,640 Speaker 1: They're gearing up for a much a much tougher environment 225 00:11:30,640 --> 00:11:32,679 Speaker 1: than the one they're in right now. I should just 226 00:11:32,720 --> 00:11:35,320 Speaker 1: correct myself. Not the brake even, it's what they budget for, 227 00:11:35,840 --> 00:11:37,720 Speaker 1: and Kevin just to be specific about that. Not the 228 00:11:37,720 --> 00:11:41,040 Speaker 1: brake even, but just what they're budgeting up. It's changed 229 00:11:42,280 --> 00:11:46,040 Speaker 1: a healthy internal ready to return fives into that. What 230 00:11:46,280 --> 00:11:51,520 Speaker 1: is the international oil relations that our cabinet officers should 231 00:11:51,520 --> 00:11:53,760 Speaker 1: focus on. It's a run and run and run is 232 00:11:53,800 --> 00:11:56,440 Speaker 1: that the way to go? Or they too focused on 233 00:11:56,480 --> 00:11:59,599 Speaker 1: a run? Well, Iran is into an oil issue. I 234 00:11:59,720 --> 00:12:03,679 Speaker 1: runs nuclear proliferation and nucional terror issue. Um. But if 235 00:12:03,720 --> 00:12:05,480 Speaker 1: you want oil to come to market, you have to 236 00:12:05,480 --> 00:12:08,000 Speaker 1: think about not just Saudi Arabia but Russia. And I 237 00:12:08,040 --> 00:12:10,120 Speaker 1: think one of the stories that's under appreciated in the 238 00:12:10,200 --> 00:12:13,280 Speaker 1: last six months is that the Trump administration did go 239 00:12:13,320 --> 00:12:16,320 Speaker 1: to Russia and asked for more oil there as well. UH, 240 00:12:16,520 --> 00:12:19,560 Speaker 1: three pillars to the market US Saudi Russia can't have 241 00:12:19,679 --> 00:12:23,120 Speaker 1: an around policy that compresses buyers of ariding and crude 242 00:12:23,120 --> 00:12:27,640 Speaker 1: without it. I mean, does Mr Putin want to deliver 243 00:12:27,720 --> 00:12:31,040 Speaker 1: more oil he certainly doesn't seem to want to stop. 244 00:12:31,080 --> 00:12:33,760 Speaker 1: Market share is good on you know, if they're buying 245 00:12:34,000 --> 00:12:38,040 Speaker 1: services and in upstream costs in rubles and they're selling 246 00:12:38,080 --> 00:12:41,240 Speaker 1: in dollars, then the world of u S sanctions compressing 247 00:12:41,280 --> 00:12:44,080 Speaker 1: the ruble has been profitable for a lot of companies, 248 00:12:44,120 --> 00:12:47,200 Speaker 1: plus healthy taxation on the outbound. I think we're at 249 00:12:47,200 --> 00:12:50,280 Speaker 1: a pub Soviet record on we Haven for production. We 250 00:12:50,400 --> 00:12:53,360 Speaker 1: are then they show no signs of of wanting to 251 00:12:53,400 --> 00:12:58,840 Speaker 1: slack in anytime soon. Kevin, thank you, really smart, really 252 00:12:58,880 --> 00:13:04,120 Speaker 1: smart this morning, on this veteran's day. It is important 253 00:13:04,120 --> 00:13:08,800 Speaker 1: to speak to officials across this nation, and there's no 254 00:13:08,840 --> 00:13:13,000 Speaker 1: one within the Republican Party, particularly with the passing of 255 00:13:13,080 --> 00:13:16,640 Speaker 1: John McCain to speak to. And the gentleman from Louisiana, 256 00:13:16,679 --> 00:13:19,840 Speaker 1: Steve Scalise, is of course a Republican. He has focused 257 00:13:19,880 --> 00:13:23,000 Speaker 1: on a return to Congress, a lame duck Congress before 258 00:13:23,120 --> 00:13:27,280 Speaker 1: a new minority moment for his Republicans. He's in the running, 259 00:13:27,280 --> 00:13:30,520 Speaker 1: of course Wednesday for leadership position. And we are honor 260 00:13:30,600 --> 00:13:34,640 Speaker 1: that the congressman visits us today. Back in the game, 261 00:13:34,840 --> 00:13:37,880 Speaker 1: one gunman, countless heroes in the fight for my life 262 00:13:38,400 --> 00:13:40,960 Speaker 1: and It's not the usual quick read. It is a 263 00:13:41,080 --> 00:13:45,560 Speaker 1: carefully written effort about what he went through after an 264 00:13:45,559 --> 00:13:49,320 Speaker 1: horrific shooting in Washington and farm more and always with 265 00:13:49,360 --> 00:13:53,319 Speaker 1: Steve Scalize the view forward as well, What is your 266 00:13:53,400 --> 00:13:58,440 Speaker 1: view forward, Congressman? Thank My view forward is is first 267 00:13:58,440 --> 00:14:01,319 Speaker 1: of all, to keep getting better. I I'm down to 268 00:14:01,400 --> 00:14:03,680 Speaker 1: one crutch now. I had to learn how to walk again, 269 00:14:04,200 --> 00:14:05,960 Speaker 1: and of course I talked about that in the book, 270 00:14:05,960 --> 00:14:09,559 Speaker 1: the whole process of going from almost dying to to now. 271 00:14:10,280 --> 00:14:12,120 Speaker 1: I had a scooter I needed to use to get 272 00:14:12,120 --> 00:14:14,680 Speaker 1: around on, and I had two crutches. Now I'm down 273 00:14:14,679 --> 00:14:17,040 Speaker 1: to one crutch. And my next goal is to to 274 00:14:17,080 --> 00:14:20,080 Speaker 1: be able to walk again without without crutches. I'm not 275 00:14:20,120 --> 00:14:22,720 Speaker 1: sure if I'll be able to run again, but at least, 276 00:14:22,760 --> 00:14:25,160 Speaker 1: you know, I talked about this too, that it really 277 00:14:25,160 --> 00:14:27,120 Speaker 1: focuses you in the things that are important in life, 278 00:14:27,360 --> 00:14:29,200 Speaker 1: you know. And I love my family. I get to 279 00:14:29,560 --> 00:14:31,800 Speaker 1: do do a lot more. I've been hunting a lot 280 00:14:31,800 --> 00:14:33,960 Speaker 1: more with my son, and you know, just spend a 281 00:14:34,040 --> 00:14:35,520 Speaker 1: lot a lot of times on the weekends in New 282 00:14:35,640 --> 00:14:37,960 Speaker 1: Orleans with my family. And I love my job, and 283 00:14:38,200 --> 00:14:40,520 Speaker 1: I was so honored to be able to get back 284 00:14:40,560 --> 00:14:43,840 Speaker 1: to work in September last year too, you know, to 285 00:14:43,880 --> 00:14:45,600 Speaker 1: be in the middle of working with this president and 286 00:14:45,600 --> 00:14:47,960 Speaker 1: getting things done and you know, getting the country back 287 00:14:48,000 --> 00:14:49,800 Speaker 1: on track. It's it's a passion of mine and I 288 00:14:49,800 --> 00:14:53,000 Speaker 1: get to do that as well. The medical debate became 289 00:14:53,040 --> 00:14:56,400 Speaker 1: important in this election, and not not that it came 290 00:14:56,400 --> 00:14:59,800 Speaker 1: out of nowhere, but certainly it became dominant across the 291 00:15:00,000 --> 00:15:03,200 Speaker 1: eland of this country. How many doctors and nurses at 292 00:15:03,200 --> 00:15:05,840 Speaker 1: one given moment did you have around you? Did you 293 00:15:05,880 --> 00:15:08,440 Speaker 1: get over like twenty doctors and nurses at one time? 294 00:15:09,440 --> 00:15:11,720 Speaker 1: It was ad You talked about a team effort. I 295 00:15:12,320 --> 00:15:14,280 Speaker 1: you know, I had everybody from you know, all the 296 00:15:14,320 --> 00:15:17,920 Speaker 1: trauma surgeons that were at the Star Hospital, from Dr 297 00:15:18,000 --> 00:15:21,440 Speaker 1: Saven his old whole team there to uh my words, 298 00:15:21,440 --> 00:15:23,360 Speaker 1: Apedic Dr Gold, and I got to know them all 299 00:15:23,400 --> 00:15:26,200 Speaker 1: by name and um and then the wonderful nurses that's 300 00:15:26,240 --> 00:15:29,640 Speaker 1: the care of me too. Were there any Democrats there were, 301 00:15:29,960 --> 00:15:32,640 Speaker 1: and you know some of them, some of them would 302 00:15:32,640 --> 00:15:36,960 Speaker 1: share their political affiliation. They would ask if you know, 303 00:15:37,000 --> 00:15:39,000 Speaker 1: they would ask, you know, you would just talk along 304 00:15:39,040 --> 00:15:40,520 Speaker 1: the way. I mean, You've get you know, a lot 305 00:15:40,560 --> 00:15:44,040 Speaker 1: of conversations with people and um, you know, and just 306 00:15:44,080 --> 00:15:46,520 Speaker 1: one of the people. To me, it's not about what 307 00:15:46,560 --> 00:15:49,800 Speaker 1: their affiliation is, it's you know, they did they were 308 00:15:49,800 --> 00:15:52,920 Speaker 1: incredible professionals, and uh it took great care of me. 309 00:15:53,040 --> 00:15:57,280 Speaker 1: And look my physical therapist and occupational therapists. Uh, they 310 00:15:57,360 --> 00:16:00,720 Speaker 1: did wonders and still put me on the steve. Like 311 00:16:00,760 --> 00:16:03,960 Speaker 1: a lot of Americans, I've been fortunate. I've avoided the 312 00:16:04,040 --> 00:16:09,240 Speaker 1: medical issue. You haven't. And how did it change your 313 00:16:09,280 --> 00:16:13,400 Speaker 1: perception of the healthcare debate in this country? You went 314 00:16:13,480 --> 00:16:18,160 Speaker 1: through the reality of our medical industry. How did it 315 00:16:18,240 --> 00:16:22,760 Speaker 1: change your view forward? You know, I've always been to 316 00:16:22,760 --> 00:16:25,400 Speaker 1: the belief that we have the best medical delivery system 317 00:16:25,440 --> 00:16:28,600 Speaker 1: in the world, and it had some problems before Obamacare, 318 00:16:28,720 --> 00:16:32,200 Speaker 1: mostly related around cost and access. But for people whether 319 00:16:32,360 --> 00:16:34,760 Speaker 1: if you were on Medicare, you like Medicare, if you 320 00:16:35,080 --> 00:16:37,920 Speaker 1: had private insurance through your company, most people really liked 321 00:16:38,280 --> 00:16:41,440 Speaker 1: that coverage. It was you know, people that had to 322 00:16:41,440 --> 00:16:43,920 Speaker 1: go by on their own. There was no real marketplace, 323 00:16:44,200 --> 00:16:47,040 Speaker 1: and Medicaid was the most broken form of healthcare. So 324 00:16:47,080 --> 00:16:51,000 Speaker 1: Obamacare doubled down by literally dumping millions more people on Medicaid. 325 00:16:51,680 --> 00:16:54,440 Speaker 1: It took money away from Medicare, and then in the 326 00:16:54,480 --> 00:16:57,720 Speaker 1: private marketplace, you literally had no options, and so healthcare 327 00:16:57,720 --> 00:17:00,280 Speaker 1: got even more expensive. What I like to see us 328 00:17:00,320 --> 00:17:03,680 Speaker 1: get back to its a system of real free market competition. 329 00:17:03,760 --> 00:17:07,040 Speaker 1: There is no price transparency. Uh there. You know, there's 330 00:17:07,080 --> 00:17:10,600 Speaker 1: great medical professionals, but doctors shouldn't have to go check 331 00:17:10,640 --> 00:17:13,879 Speaker 1: with unelected bureaucrats in Washington to figure out how to 332 00:17:14,359 --> 00:17:16,800 Speaker 1: take care of their patients. We've got to get Washington 333 00:17:16,880 --> 00:17:19,879 Speaker 1: bureaucrats out of the way more. The paperwork that's involved 334 00:17:19,880 --> 00:17:22,960 Speaker 1: in healthcare is unbelievable. People are scared to death of 335 00:17:23,000 --> 00:17:25,760 Speaker 1: going to jail, so they spending time fill up paperwork 336 00:17:25,800 --> 00:17:29,440 Speaker 1: that they're not using taking care patients. You you come 337 00:17:29,480 --> 00:17:32,399 Speaker 1: from Louisiana, from the South, with their immense support, not 338 00:17:32,440 --> 00:17:37,000 Speaker 1: only in the military, but starting with the Marines as well. 339 00:17:37,960 --> 00:17:41,760 Speaker 1: I think I saw a media distillation of the president's 340 00:17:41,800 --> 00:17:46,720 Speaker 1: efforts in Paris this weekend. Can you distill for us 341 00:17:46,760 --> 00:17:50,520 Speaker 1: what the southern military of this nation thinks when a 342 00:17:50,560 --> 00:17:54,920 Speaker 1: president because of rain, because of exhaustion, whatever the excuses, 343 00:17:55,280 --> 00:17:58,440 Speaker 1: doesn't show up it below. I mean, that was an 344 00:17:58,440 --> 00:18:02,640 Speaker 1: extraordinary moment, but I want to know what Louisiana thought 345 00:18:02,680 --> 00:18:06,439 Speaker 1: of that. Well. First of all, the President has been 346 00:18:06,480 --> 00:18:09,880 Speaker 1: incredibly supportive our military. I see it on a regular basis. 347 00:18:10,359 --> 00:18:13,720 Speaker 1: Um from Look, the National World War Two Museum is 348 00:18:13,760 --> 00:18:17,119 Speaker 1: in New Orleans. We love our military. Yesterday was Veterans Day. 349 00:18:17,119 --> 00:18:20,199 Speaker 1: We were today we celebrated. But yes, we also have 350 00:18:20,320 --> 00:18:23,840 Speaker 1: the hundredth anniversary of Armistic WORL World War One, and 351 00:18:24,119 --> 00:18:27,600 Speaker 1: the President was very he went to the memorial. He's 352 00:18:27,600 --> 00:18:31,480 Speaker 1: to uh so many military ceremonies, and you know what 353 00:18:31,600 --> 00:18:34,959 Speaker 1: would happen in Paris. I know there there are some 354 00:18:35,040 --> 00:18:37,560 Speaker 1: of the European leaders that still don't want to acknowledge 355 00:18:37,600 --> 00:18:40,560 Speaker 1: that he's president United States and he is making our 356 00:18:40,640 --> 00:18:44,680 Speaker 1: NATO allies finally contribute to what they you know, to 357 00:18:44,800 --> 00:18:47,120 Speaker 1: what they were promising to do. And that's a good thing. 358 00:18:47,119 --> 00:18:51,840 Speaker 1: But look, the President attended the American Commemoration ceremony. Uh 359 00:18:52,000 --> 00:18:54,679 Speaker 1: in Look, he's been wonderful to our military. And by 360 00:18:54,680 --> 00:18:56,920 Speaker 1: the way, just signed a bill to get the largest 361 00:18:57,280 --> 00:18:59,600 Speaker 1: pay raise to our men and women in uniform that 362 00:18:59,640 --> 00:19:02,679 Speaker 1: they had years and and to give them the tools 363 00:19:02,680 --> 00:19:05,000 Speaker 1: they need. I mean, last year we lost more men 364 00:19:05,040 --> 00:19:08,160 Speaker 1: and women in uniform to training depths than the combat 365 00:19:08,200 --> 00:19:13,199 Speaker 1: depth before thin It's it's unreal. How many people. I mean, 366 00:19:13,320 --> 00:19:15,159 Speaker 1: you saw planes falling out of the sky because they 367 00:19:15,160 --> 00:19:18,480 Speaker 1: didn't have the training parts they needed because the military 368 00:19:18,560 --> 00:19:21,280 Speaker 1: was underfunded. And the President made it a point to 369 00:19:21,400 --> 00:19:23,760 Speaker 1: address that, and we in Congress passed to build to 370 00:19:23,840 --> 00:19:26,720 Speaker 1: fix that. Just a few months ago, the President funded 371 00:19:26,760 --> 00:19:28,840 Speaker 1: in the law. How are you going to respond to 372 00:19:28,880 --> 00:19:30,640 Speaker 1: this new Congress? You need to get through a lame 373 00:19:30,720 --> 00:19:34,159 Speaker 1: duck term and then you will enjoy being a minority 374 00:19:34,320 --> 00:19:36,520 Speaker 1: in the House. How does that change your data? Well? 375 00:19:36,560 --> 00:19:39,439 Speaker 1: What doce that enjoy being in the minority. But you know, 376 00:19:39,480 --> 00:19:41,520 Speaker 1: we still have some work to do in these last 377 00:19:41,600 --> 00:19:44,000 Speaker 1: few months in the majority. And what are you gonna do? 378 00:19:44,200 --> 00:19:46,280 Speaker 1: What are you gonna do in this lame duck session. 379 00:19:47,040 --> 00:19:49,280 Speaker 1: The first thing we've got to do is address funding 380 00:19:49,280 --> 00:19:52,720 Speaker 1: of the wall. My strongest support securing our border and 381 00:19:53,320 --> 00:19:56,560 Speaker 1: building the wall and using other technology to to make 382 00:19:56,560 --> 00:19:59,960 Speaker 1: America safe and to give the president to the president 383 00:20:00,119 --> 00:20:03,840 Speaker 1: get that through the Senate. Well, you know that the 384 00:20:03,960 --> 00:20:06,000 Speaker 1: House is gonna do its job and let the Senate 385 00:20:06,040 --> 00:20:09,159 Speaker 1: do its job. And you know the the Senate's got 386 00:20:09,200 --> 00:20:10,480 Speaker 1: a lot of issues they're gonna have to deal with. 387 00:20:10,560 --> 00:20:11,879 Speaker 1: But we've got to deal with ours. By the way, 388 00:20:11,920 --> 00:20:15,200 Speaker 1: we also have a farm bill that hasn't been resolved. 389 00:20:15,200 --> 00:20:17,880 Speaker 1: We have a negotiation going on on a conference committee 390 00:20:17,880 --> 00:20:20,800 Speaker 1: on a farm bill. The biggest issue that's that's still 391 00:20:20,800 --> 00:20:23,040 Speaker 1: out there and it hasn't been resolved as work requirements. 392 00:20:23,200 --> 00:20:24,879 Speaker 1: And frankly, I think in a time when you see 393 00:20:25,160 --> 00:20:27,400 Speaker 1: such a great economy, I mean, they're more job openings 394 00:20:27,400 --> 00:20:30,040 Speaker 1: than people looking for work, and yet we're paying people 395 00:20:30,040 --> 00:20:33,199 Speaker 1: not to work who are fully able bodied. So in 396 00:20:33,240 --> 00:20:35,200 Speaker 1: the farm bill, one of the things we say is, look, 397 00:20:35,720 --> 00:20:38,719 Speaker 1: if you're able to work, then you have to go 398 00:20:38,760 --> 00:20:40,720 Speaker 1: look for a job, and if there's one out there 399 00:20:40,720 --> 00:20:42,800 Speaker 1: for you, you you have to take it. Otherwise you're not 400 00:20:42,880 --> 00:20:46,080 Speaker 1: eligible to keep getting uh food stamps and other kind 401 00:20:46,080 --> 00:20:48,240 Speaker 1: of welfare benefits. And by the way, if you can't 402 00:20:48,240 --> 00:20:50,480 Speaker 1: find a job, will train you for a job. But 403 00:20:50,640 --> 00:20:52,720 Speaker 1: you can't just sit at home. I mean, in America, 404 00:20:53,119 --> 00:20:55,159 Speaker 1: you have the right not to want to work, but 405 00:20:55,600 --> 00:20:58,240 Speaker 1: the taxpayers in this country shouldn't subsidize you for that. 406 00:20:58,560 --> 00:21:00,639 Speaker 1: If there's a job waiting for you, and right now 407 00:21:00,680 --> 00:21:03,720 Speaker 1: there are more job openings than are people looking for work, 408 00:21:03,920 --> 00:21:06,320 Speaker 1: let's fix this. Let's get people back into the workforce 409 00:21:06,600 --> 00:21:09,159 Speaker 1: and help restore the dignity of work in the American 410 00:21:09,240 --> 00:21:11,800 Speaker 1: dream to people. Steve Scillies, thank you so much. The 411 00:21:11,840 --> 00:21:15,080 Speaker 1: book is back in the game. One gunman, countless heroes 412 00:21:15,119 --> 00:21:19,600 Speaker 1: in the fight for my life. Congressman Steve Scalise joining 413 00:21:19,640 --> 00:21:23,080 Speaker 1: us today, of course always from Louisiana, and of course 414 00:21:23,080 --> 00:21:26,160 Speaker 1: some real comments there on his medical condition as well. 415 00:21:28,280 --> 00:21:31,199 Speaker 1: Right now with this prim uh as we look at 416 00:21:31,240 --> 00:21:34,199 Speaker 1: fixed income with t d UH securities pre A good 417 00:21:34,240 --> 00:21:38,240 Speaker 1: morning morning, Thanks for having me on. We are closed 418 00:21:38,280 --> 00:21:40,680 Speaker 1: today and you are working away, and I'm sure you're 419 00:21:40,720 --> 00:21:43,800 Speaker 1: working on a theme or a movement into next year. 420 00:21:43,840 --> 00:21:47,280 Speaker 1: We're at that point where people like Priam Isra put together, 421 00:21:48,000 --> 00:21:51,119 Speaker 1: UH the year forward view. What do you do after 422 00:21:51,160 --> 00:21:54,520 Speaker 1: the curve flattening of this year, what's the theme that 423 00:21:54,560 --> 00:21:59,320 Speaker 1: you'll be focusing on into January to June. Sure, so 424 00:21:59,359 --> 00:22:02,440 Speaker 1: you're right, I am working on our twenty outlook. UM. 425 00:22:02,480 --> 00:22:05,040 Speaker 1: I think the theme is less about curve and more 426 00:22:05,040 --> 00:22:08,200 Speaker 1: about duration, because what we've seen this year is the 427 00:22:08,200 --> 00:22:13,240 Speaker 1: the the US sort of outperformed, so there's been significant divergence. 428 00:22:13,359 --> 00:22:15,600 Speaker 1: US interest rates have risen the FED hike more than 429 00:22:15,640 --> 00:22:19,040 Speaker 1: what was priced in Now going into the markets pricing 430 00:22:19,080 --> 00:22:22,679 Speaker 1: in two hikes. The FED is communicating three, but in 431 00:22:22,720 --> 00:22:25,400 Speaker 1: an environment where global growth is slowing and we don't 432 00:22:25,440 --> 00:22:29,159 Speaker 1: see any congressional actions, so no further fiscal stimulus. You 433 00:22:29,200 --> 00:22:32,560 Speaker 1: have a fiscal cliff coming up late nineteen into early twenty. 434 00:22:33,320 --> 00:22:35,600 Speaker 1: My fear is that we've sort of seen the peak 435 00:22:35,640 --> 00:22:37,560 Speaker 1: and yields. I mean, you know, we could certainly go 436 00:22:37,680 --> 00:22:40,200 Speaker 1: up a little bit more, so three thirties what we're 437 00:22:40,240 --> 00:22:42,200 Speaker 1: looking at, but you know, if you get to three 438 00:22:42,240 --> 00:22:45,199 Speaker 1: thirty three forty, I think that's a good time to 439 00:22:45,240 --> 00:22:47,679 Speaker 1: go long duration. So the question is really how do 440 00:22:47,720 --> 00:22:50,960 Speaker 1: you start scaling into long duration trades here? Which is 441 00:22:51,000 --> 00:22:53,399 Speaker 1: a little out of consensus. I think most people are 442 00:22:53,440 --> 00:22:56,320 Speaker 1: looking at US economy that's doing well, but I still 443 00:22:56,320 --> 00:22:59,359 Speaker 1: look at you know, how long can this growth momentum last? 444 00:22:59,520 --> 00:23:02,919 Speaker 1: If the tax stimulus effect starts to feed and we 445 00:23:02,960 --> 00:23:06,320 Speaker 1: start to see some impact from higher interest rates impacting housing, 446 00:23:06,560 --> 00:23:10,920 Speaker 1: impacting other interest sensitive sectors, and then I look abroad 447 00:23:11,200 --> 00:23:14,680 Speaker 1: for any help there. And I think global growth is decelerating. 448 00:23:15,040 --> 00:23:17,200 Speaker 1: I think that's the one clear trend. So I don't 449 00:23:17,240 --> 00:23:20,280 Speaker 1: think we're going to continue to diverge, certainly as implications 450 00:23:20,280 --> 00:23:22,840 Speaker 1: for effects. But I think for rates, there's going to 451 00:23:22,920 --> 00:23:25,520 Speaker 1: be a time to go long duration, uh, you know, 452 00:23:25,560 --> 00:23:29,720 Speaker 1: pretty soon. I think if that's the case, for investors 453 00:23:29,760 --> 00:23:34,520 Speaker 1: that are more more inclined to accept risk, do you 454 00:23:34,560 --> 00:23:37,199 Speaker 1: believe that there will be a risk on field to 455 00:23:37,280 --> 00:23:41,720 Speaker 1: the market because with interest rates peaking, people are going 456 00:23:41,760 --> 00:23:44,119 Speaker 1: to recognize they're not going to get more by putting 457 00:23:44,119 --> 00:23:45,760 Speaker 1: their money into bonds, and they're going to have to 458 00:23:45,760 --> 00:23:48,600 Speaker 1: find riskier assets in order to generate the returns they 459 00:23:48,640 --> 00:23:52,399 Speaker 1: need to keep their clients. That's a fair point. I 460 00:23:52,400 --> 00:23:55,320 Speaker 1: think when it's clear that interest rates are bottoming that 461 00:23:55,440 --> 00:23:58,400 Speaker 1: the economy is okay. I'm a little nervous around risk 462 00:23:58,520 --> 00:24:00,680 Speaker 1: just here because I think we've eased in a lot 463 00:24:00,720 --> 00:24:03,400 Speaker 1: of good news in the equity market or or in 464 00:24:03,440 --> 00:24:07,200 Speaker 1: general risk asses. So by the time the market reprices 465 00:24:07,280 --> 00:24:10,080 Speaker 1: and we realize that actually growth is decelerating, but we're 466 00:24:10,119 --> 00:24:12,040 Speaker 1: not falling off a cliff, I think that will be 467 00:24:12,080 --> 00:24:14,600 Speaker 1: a time to go long risk in the near term. 468 00:24:14,640 --> 00:24:17,639 Speaker 1: With the FED sort of on autopilot here almost, I 469 00:24:17,680 --> 00:24:20,000 Speaker 1: think risk asttes have a bit of a headwind our 470 00:24:20,040 --> 00:24:25,400 Speaker 1: bonds as data dependent is the FED. Yeah, I think 471 00:24:25,440 --> 00:24:28,320 Speaker 1: bonds are maybe a little bit more forward looking than 472 00:24:28,359 --> 00:24:29,720 Speaker 1: the FED. And you know, the FED is in a 473 00:24:29,800 --> 00:24:31,520 Speaker 1: bit of a tough spot because they have to look 474 00:24:31,520 --> 00:24:35,159 Speaker 1: at US data, and you know, the the US economy 475 00:24:35,160 --> 00:24:37,000 Speaker 1: seems to be doing pretty well. I think what the 476 00:24:37,040 --> 00:24:39,920 Speaker 1: bond market is telling you by not pricing and more 477 00:24:40,000 --> 00:24:43,240 Speaker 1: hikes there are zero hikes price into is telling you 478 00:24:43,280 --> 00:24:45,480 Speaker 1: that the bond market doesn't believe that the economy can 479 00:24:45,520 --> 00:24:48,360 Speaker 1: continue to accelerate here. So I think, you know, you're 480 00:24:48,440 --> 00:24:50,800 Speaker 1: you're getting a little bit more of a forward looking view. 481 00:24:51,240 --> 00:24:55,400 Speaker 1: But I think Paul's comments will be pretty significant this week. 482 00:24:56,000 --> 00:24:59,600 Speaker 1: Um On on Wednesday, pretty miserable of this, really quite 483 00:24:59,640 --> 00:25:04,520 Speaker 1: advan by her perspective. Out the time function one year, 484 00:25:04,600 --> 00:25:07,399 Speaker 1: two years, five years. Rarely pre that we talked about 485 00:25:08,040 --> 00:25:12,240 Speaker 1: three months paper or three day paper. This year out 486 00:25:12,320 --> 00:25:14,600 Speaker 1: of two thousand and eight we began to speak of 487 00:25:14,720 --> 00:25:18,440 Speaker 1: library again. Let's talk about first principles. What is libor 488 00:25:18,760 --> 00:25:22,919 Speaker 1: and why did it reassert itself this year? Sure? So 489 00:25:23,520 --> 00:25:28,320 Speaker 1: library um is supposed to measure the cost of unsecured borrowing, 490 00:25:28,960 --> 00:25:32,560 Speaker 1: and you know it's it's it's a measure of I guess, 491 00:25:32,600 --> 00:25:35,719 Speaker 1: I guess funding costs for the financial system. The reason 492 00:25:35,920 --> 00:25:37,919 Speaker 1: it became a big deal this year was the spread 493 00:25:37,960 --> 00:25:41,720 Speaker 1: between Library and FED funds or OIS widened significantly in 494 00:25:41,760 --> 00:25:45,200 Speaker 1: the first quarter. It started to widen again. Now seasonally, 495 00:25:45,200 --> 00:25:47,680 Speaker 1: I would say that going into urine, going into quarter 496 00:25:47,800 --> 00:25:50,600 Speaker 1: and it does tend to widen. But the big move 497 00:25:50,920 --> 00:25:53,199 Speaker 1: in the first quarter this year was I think in 498 00:25:53,280 --> 00:25:56,160 Speaker 1: part due to a significant amount of bill supply as 499 00:25:56,160 --> 00:25:59,919 Speaker 1: well as repatriation um so the fact that a lot 500 00:26:00,040 --> 00:26:03,040 Speaker 1: of companies were moving cash back to the US. They 501 00:26:03,040 --> 00:26:05,199 Speaker 1: were not investing in bank paper, so the cost of 502 00:26:05,200 --> 00:26:08,359 Speaker 1: bank funding went up. But separately, I think what's happening 503 00:26:08,440 --> 00:26:12,160 Speaker 1: is that the FED and global bank regulators are telling 504 00:26:12,240 --> 00:26:14,600 Speaker 1: us to move away from libror. So that's a theme 505 00:26:14,640 --> 00:26:17,200 Speaker 1: we'll be talking about for the next many years. I'm 506 00:26:17,200 --> 00:26:21,119 Speaker 1: not sure the two twenty one is the ultimate endpoint 507 00:26:21,160 --> 00:26:23,679 Speaker 1: of LIBRARY, but they're trying to transition us away from it. 508 00:26:23,960 --> 00:26:27,199 Speaker 1: Commercial paper used to be a thermometer. I think it's gone. 509 00:26:27,480 --> 00:26:30,360 Speaker 1: What do you use to measure trust in the short 510 00:26:30,480 --> 00:26:35,080 Speaker 1: term paper market? You're right, I think CP issuance has 511 00:26:35,200 --> 00:26:38,040 Speaker 1: has gone down, But you know, we would look at CDs. 512 00:26:38,520 --> 00:26:41,800 Speaker 1: I think bank CDs is one measure. Um You look 513 00:26:41,800 --> 00:26:45,200 Speaker 1: at trading volumes to some extent in the euro the market, 514 00:26:45,240 --> 00:26:47,040 Speaker 1: I think you can look at the front end. The 515 00:26:47,040 --> 00:26:50,320 Speaker 1: thing is that's been significant increase in bank reserves in 516 00:26:50,359 --> 00:26:53,240 Speaker 1: the US, so banks don't really need to borrow a 517 00:26:53,240 --> 00:26:55,840 Speaker 1: whole lot. So I also look at the spread between 518 00:26:55,880 --> 00:26:59,119 Speaker 1: effective and UM and I U R. That's a measure of, 519 00:26:59,160 --> 00:27:02,360 Speaker 1: you know, our our reserves becoming scarce here, and then 520 00:27:02,400 --> 00:27:04,600 Speaker 1: that can become an issue. I think for bank funding. 521 00:27:04,920 --> 00:27:07,120 Speaker 1: I don't think we're there yet. Another six or nine 522 00:27:07,160 --> 00:27:09,159 Speaker 1: months from here, I think that could become an issue. 523 00:27:10,000 --> 00:27:12,840 Speaker 1: Do you believe that there's a dollar shortage, that there's 524 00:27:12,880 --> 00:27:16,960 Speaker 1: a lack of liquidity compared to let's say two years ago. 525 00:27:18,480 --> 00:27:20,919 Speaker 1: I think in two year end they always is. So 526 00:27:20,920 --> 00:27:22,920 Speaker 1: there's some of that going on. But but the big 527 00:27:22,920 --> 00:27:25,240 Speaker 1: difference from two years ago is two years ago, the 528 00:27:25,240 --> 00:27:28,159 Speaker 1: FED was actually infusing reserves in the system. Now the 529 00:27:28,200 --> 00:27:30,920 Speaker 1: set is actually letting it run off. So I think 530 00:27:31,119 --> 00:27:34,520 Speaker 1: there is the starting signs, the early signs that there 531 00:27:34,560 --> 00:27:37,480 Speaker 1: is a dollar shortages showing up in the FED funds market. 532 00:27:38,240 --> 00:27:40,320 Speaker 1: The FED seems to be somewhat in denial here. I 533 00:27:40,320 --> 00:27:42,640 Speaker 1: think they want to continue to let the portfolio run off. 534 00:27:42,800 --> 00:27:45,160 Speaker 1: They don't think this is systemic enough. So I think 535 00:27:45,200 --> 00:27:49,600 Speaker 1: this team will will persist, will actually accelerate as reserves 536 00:27:49,640 --> 00:27:53,240 Speaker 1: become more and more scarce in the banking system. Are 537 00:27:53,359 --> 00:27:58,000 Speaker 1: banks prepared for this? Um? I think it's very hard 538 00:27:58,080 --> 00:28:01,440 Speaker 1: to be prepared. Historic there were no access reserves in 539 00:28:01,480 --> 00:28:04,080 Speaker 1: the system, but historically the FED never paid any interest 540 00:28:04,119 --> 00:28:07,760 Speaker 1: on reserves. Also, historically we never had li could recoverage ratio. 541 00:28:08,080 --> 00:28:10,479 Speaker 1: So I think banks are having to look at their 542 00:28:10,640 --> 00:28:13,000 Speaker 1: h q l A or the high quality liquid acid 543 00:28:13,000 --> 00:28:16,080 Speaker 1: portfolio now and say that, well, the reserve component is 544 00:28:16,119 --> 00:28:18,560 Speaker 1: going to come off. So then how are they supposed 545 00:28:18,600 --> 00:28:22,359 Speaker 1: to replace these reserves? Is it through buying treasuries? Is 546 00:28:22,400 --> 00:28:25,000 Speaker 1: it through you know, mortgages? So I think they go, 547 00:28:25,040 --> 00:28:28,000 Speaker 1: what do you think they do? I think they will 548 00:28:28,040 --> 00:28:30,840 Speaker 1: have to buy some treasuries um and they'll do more 549 00:28:30,840 --> 00:28:33,280 Speaker 1: borrowing from the homeland bank system, which is why I 550 00:28:33,280 --> 00:28:36,760 Speaker 1: think the effective FED funds rate will continue to move higher. Ultimately, 551 00:28:36,800 --> 00:28:39,000 Speaker 1: the Fed will have to acknowledge that they can't let 552 00:28:39,040 --> 00:28:45,160 Speaker 1: the portfolio run off for much longer. When I look 553 00:28:45,160 --> 00:28:47,760 Speaker 1: at the bond market, it just used to be simple. 554 00:28:47,800 --> 00:28:51,240 Speaker 1: You clipped a coupon and there was a real rate return. 555 00:28:51,320 --> 00:28:54,120 Speaker 1: Whatever the coupon was, you knew you were making money. 556 00:28:54,120 --> 00:28:56,880 Speaker 1: We're miles from that, particularly in Europe. I mean, just 557 00:28:57,040 --> 00:29:00,080 Speaker 1: the is of negative rates and all that. Do you 558 00:29:00,120 --> 00:29:03,440 Speaker 1: just assume a permanence to the oddities of your world 559 00:29:03,880 --> 00:29:06,040 Speaker 1: or can we get back to where somebody clipped a 560 00:29:06,120 --> 00:29:10,160 Speaker 1: coupon and actually knew they made a nominal or inflation 561 00:29:10,200 --> 00:29:14,520 Speaker 1: adjusted return. Yeah, I think. You know, if you do 562 00:29:14,600 --> 00:29:17,800 Speaker 1: get a pickup in productivity or structural growth, I think 563 00:29:17,840 --> 00:29:21,600 Speaker 1: then this idea of getting positive real returns will come back. 564 00:29:22,040 --> 00:29:25,000 Speaker 1: The problem is when you look at long term structural 565 00:29:25,080 --> 00:29:28,280 Speaker 1: drivers of growth, demographics are not looking great, so that 566 00:29:28,360 --> 00:29:31,520 Speaker 1: so that's not going to help us. I'm hoping personally 567 00:29:31,520 --> 00:29:33,920 Speaker 1: that there is a pickup in productivity. We just haven't 568 00:29:33,920 --> 00:29:35,920 Speaker 1: seen that data. So then you look at if you've 569 00:29:35,960 --> 00:29:38,720 Speaker 1: been a low real rate environment, where are we getting 570 00:29:38,720 --> 00:29:40,800 Speaker 1: more real rates? I think the US is actually giving 571 00:29:40,800 --> 00:29:43,239 Speaker 1: you one of the highest real rates out there in 572 00:29:43,280 --> 00:29:46,120 Speaker 1: the developer. I mean, I'm looking at the five year 573 00:29:46,200 --> 00:29:49,600 Speaker 1: real rate pim Fox and back in the sixties it 574 00:29:49,680 --> 00:29:51,360 Speaker 1: was you know, the two percent, and there was a 575 00:29:51,360 --> 00:29:56,200 Speaker 1: big balloon in es. Yeah, the nineties given all the 576 00:29:56,240 --> 00:29:59,240 Speaker 1: distortions it was. You know, you clipped your coupon in 577 00:29:59,280 --> 00:30:01,560 Speaker 1: the nineties and you made a read don't even know 578 00:30:01,640 --> 00:30:05,000 Speaker 1: what scissors are anymore time? Well I know that, Come on, 579 00:30:05,080 --> 00:30:10,880 Speaker 1: you CLiPPA a preer. Save us or save me right now. 580 00:30:11,000 --> 00:30:13,480 Speaker 1: If there is going to be a dollar shortage on 581 00:30:13,560 --> 00:30:17,040 Speaker 1: some level, or there's going to be a lack or 582 00:30:17,440 --> 00:30:21,080 Speaker 1: a slackening of liquidity, what is the best thing for 583 00:30:21,120 --> 00:30:23,720 Speaker 1: an investor to do. Sit on the sidelines and wait 584 00:30:23,720 --> 00:30:26,400 Speaker 1: and see what happens, or do you want to be 585 00:30:26,480 --> 00:30:30,120 Speaker 1: in there and be a seller? Um, you know for 586 00:30:30,120 --> 00:30:33,400 Speaker 1: a risk I'm somewhat biased negatively, so I would say 587 00:30:33,440 --> 00:30:35,920 Speaker 1: be a seller in sixth income. I think you don't 588 00:30:35,920 --> 00:30:37,360 Speaker 1: have to go you don't have to take on a 589 00:30:37,360 --> 00:30:40,080 Speaker 1: whole lot of risk to get some positive real returns. 590 00:30:40,160 --> 00:30:42,080 Speaker 1: So if you have three months basally built, you know, 591 00:30:42,080 --> 00:30:44,760 Speaker 1: don't talk about real rates, you're actually getting some real rate. 592 00:30:45,040 --> 00:30:47,600 Speaker 1: I would tasty in the front end you can get 593 00:30:47,600 --> 00:30:51,120 Speaker 1: back into risk at much better levels. Well, okay, I'm 594 00:30:51,160 --> 00:30:53,480 Speaker 1: an opinion down on that. Where's the much better level 595 00:30:53,480 --> 00:30:56,240 Speaker 1: in the tenure yield? I mean, is a twenty basis 596 00:30:56,240 --> 00:30:58,720 Speaker 1: points higher or is it you know X number of 597 00:30:58,720 --> 00:31:02,520 Speaker 1: federate increases high. Yeah. I think when the FED is 598 00:31:03,200 --> 00:31:06,040 Speaker 1: at neutrons on another two hikes, I think we will 599 00:31:06,080 --> 00:31:08,600 Speaker 1: get us to neutral to seventy five or make the 600 00:31:08,680 --> 00:31:10,600 Speaker 1: sent on the funds rate. I think you're supposed to 601 00:31:10,600 --> 00:31:13,080 Speaker 1: extend out in duration because that's the point where the 602 00:31:13,160 --> 00:31:15,880 Speaker 1: recession looks a lot more inevitable. So you know, you're 603 00:31:15,880 --> 00:31:18,720 Speaker 1: probably another twenty based points away from the tenure, but 604 00:31:18,960 --> 00:31:21,160 Speaker 1: you know right now you're getting a decent pickup in 605 00:31:21,400 --> 00:31:23,760 Speaker 1: the very front end itself. Real rates in the front end. 606 00:31:24,040 --> 00:31:26,800 Speaker 1: This has been hugely informative. Premier, thank you so much. 607 00:31:26,840 --> 00:31:30,840 Speaker 1: It's amazing PIM on the bond market. Pre Amisser TV Securities. 608 00:31:32,880 --> 00:31:35,280 Speaker 1: This is a joy more than a one year visit 609 00:31:35,320 --> 00:31:38,800 Speaker 1: with Tyler Burle who runs Monocle and IF Monaco Radio, 610 00:31:38,880 --> 00:31:41,240 Speaker 1: and I've appeared on that of course, particularly with visits 611 00:31:41,280 --> 00:31:47,080 Speaker 1: to Davos, but also the hugely successful Monocle magazine, which 612 00:31:47,120 --> 00:31:50,880 Speaker 1: PIM is one of the magazines that sustains and gets thicker. 613 00:31:50,960 --> 00:31:54,760 Speaker 1: The physical thing is something people. It's been a published 614 00:31:55,000 --> 00:31:58,440 Speaker 1: success has inked to it and a lot of intellig 615 00:31:59,720 --> 00:32:04,360 Speaker 1: whether and celebration from Paris of his UH nine danual, 616 00:32:04,520 --> 00:32:08,960 Speaker 1: I believe it's Nindaniel Yes nin Danial soft power survey. 617 00:32:09,240 --> 00:32:12,800 Speaker 1: Tyler talk with why it's so important? What does soft 618 00:32:12,840 --> 00:32:20,520 Speaker 1: power serving? What does that mean? Soft power? Classical definition? Tom, 619 00:32:20,520 --> 00:32:23,040 Speaker 1: And good morning Pim. Pim has been forever since we 620 00:32:23,160 --> 00:32:25,600 Speaker 1: we've chatted, Tom, Pim never invites me around when I'm 621 00:32:25,600 --> 00:32:29,000 Speaker 1: in New York anymore. But anyway, that's that's the side issue. Um. 622 00:32:29,280 --> 00:32:31,520 Speaker 1: If you look at it in sort of very classic terms, 623 00:32:31,520 --> 00:32:34,560 Speaker 1: it's it's, yeah, it's getting your way as a nation 624 00:32:34,680 --> 00:32:38,440 Speaker 1: without having to use uh force, without having to to 625 00:32:38,480 --> 00:32:41,320 Speaker 1: write a check. Uh. It's how do you have global 626 00:32:41,400 --> 00:32:45,520 Speaker 1: influence as a nation through the private sector because you've 627 00:32:45,520 --> 00:32:50,080 Speaker 1: got strong national brands, a combination of public and private sector, 628 00:32:50,160 --> 00:32:53,960 Speaker 1: because you have a strong cultural offering, because you've got 629 00:32:53,960 --> 00:32:57,360 Speaker 1: great sports teams, all of these other elements outside of 630 00:32:57,760 --> 00:33:00,440 Speaker 1: the core political sphere. The kid that give you have 631 00:33:00,800 --> 00:33:03,240 Speaker 1: on the world stage. And what's so important, folks, and 632 00:33:03,280 --> 00:33:06,360 Speaker 1: why people are glued to this within media and with 633 00:33:06,480 --> 00:33:11,560 Speaker 1: advertising and also within just global consumption and imagery is 634 00:33:11,600 --> 00:33:16,360 Speaker 1: the Tyler brulet. Green arrows up, red arrows down. Tyler, 635 00:33:16,440 --> 00:33:18,600 Speaker 1: let's begin with the simple idea and the tension of 636 00:33:18,640 --> 00:33:27,440 Speaker 1: the weekend France green arrow up, US red arrowed down. Discuss. Yeah, 637 00:33:27,520 --> 00:33:31,120 Speaker 1: well you will recall um as recently, as as two 638 00:33:31,200 --> 00:33:35,720 Speaker 1: years ago. Uh, United States is in the number one position. Uh. 639 00:33:35,840 --> 00:33:38,600 Speaker 1: You had a series of great stories, even though of 640 00:33:38,600 --> 00:33:41,160 Speaker 1: course we were we were on the even of an 641 00:33:41,200 --> 00:33:45,040 Speaker 1: election result. Nevertheless, if you look at the power of Hollywood, 642 00:33:45,040 --> 00:33:47,720 Speaker 1: if you look at the power of the US charts 643 00:33:47,800 --> 00:33:51,360 Speaker 1: at that time, if you looked at US brands abroad. 644 00:33:51,560 --> 00:33:53,880 Speaker 1: I think at that time, Tom and Tim we were 645 00:33:53,880 --> 00:33:56,200 Speaker 1: looking at, you know, the expansion of what you know, 646 00:33:56,280 --> 00:33:59,240 Speaker 1: Hyatt was doing, Marriott bringing their brands around the world. 647 00:33:59,440 --> 00:34:02,520 Speaker 1: All of the things are very important. Um. You know, 648 00:34:02,680 --> 00:34:05,600 Speaker 1: now we're in a very different place. Um. You know, 649 00:34:05,600 --> 00:34:07,959 Speaker 1: there's some good things happening on the US West Coast. 650 00:34:08,400 --> 00:34:11,040 Speaker 1: There's certainly some interesting music things happening. But one thing, 651 00:34:11,080 --> 00:34:12,799 Speaker 1: you know, we were chatting but Tom this morning is 652 00:34:13,120 --> 00:34:15,279 Speaker 1: I look at retail and I'm I'm gentlemen, I'm standing 653 00:34:15,320 --> 00:34:17,800 Speaker 1: in the middle of Plas von Dome right now, and 654 00:34:17,800 --> 00:34:20,880 Speaker 1: you know, I'm surrounded by the likes of Chanel and 655 00:34:20,960 --> 00:34:23,719 Speaker 1: van Cliff and show May and Hublo and all of 656 00:34:23,760 --> 00:34:27,319 Speaker 1: these you know, international brands, and it's interesting. You know, 657 00:34:27,520 --> 00:34:30,520 Speaker 1: the US doesn't get a look in. And if we 658 00:34:30,560 --> 00:34:32,560 Speaker 1: look at global growth right now, if we look at 659 00:34:32,560 --> 00:34:35,440 Speaker 1: you know, what is the interesting part of international retail. 660 00:34:35,840 --> 00:34:37,960 Speaker 1: You know, we focus on China, we focus on Asia. 661 00:34:38,320 --> 00:34:40,799 Speaker 1: It's the big play there is it's a premium play. 662 00:34:40,840 --> 00:34:43,239 Speaker 1: We're not looking at at at a mid market or 663 00:34:43,239 --> 00:34:45,719 Speaker 1: map play. It's the top end of the market. And 664 00:34:45,760 --> 00:34:48,400 Speaker 1: who owns all of these brands, whether they're Italian based 665 00:34:48,480 --> 00:34:51,800 Speaker 1: or Swiss based, Trance these are these are French brands 666 00:34:51,800 --> 00:34:54,759 Speaker 1: through and through. It's the Kerring Group of course at 667 00:34:54,880 --> 00:34:58,279 Speaker 1: lvmh Okay, Reachmall and Swiss, but most of its sort 668 00:34:58,280 --> 00:35:01,839 Speaker 1: of kidding in Paris. So this also really helped rock 669 00:35:01,880 --> 00:35:03,720 Speaker 1: at them up the charts to put a much heavier 670 00:35:03,760 --> 00:35:07,040 Speaker 1: waiting this year as well on the world of of 671 00:35:07,040 --> 00:35:11,040 Speaker 1: of luxury and and and a premium offer Tyler Brulet. 672 00:35:11,480 --> 00:35:13,840 Speaker 1: It's always good to hear your voice. One of the 673 00:35:13,920 --> 00:35:17,160 Speaker 1: things I note about Monocle is it features on a 674 00:35:17,239 --> 00:35:23,600 Speaker 1: regular basis young entrepreneurial startup businesses from around the world 675 00:35:23,680 --> 00:35:28,879 Speaker 1: with a focus on craftsmanship and artisan quality. What are 676 00:35:28,920 --> 00:35:32,680 Speaker 1: the cities that you recommend people who are looking to 677 00:35:32,800 --> 00:35:37,120 Speaker 1: either start businesses or expand their businesses at that level, 678 00:35:37,160 --> 00:35:42,000 Speaker 1: that craftsman, artists and level, what cities are the most receptive. 679 00:35:43,960 --> 00:35:46,080 Speaker 1: So I think there's there's two sides to that. Of course, 680 00:35:46,120 --> 00:35:49,160 Speaker 1: paim where is their cash um and where do you 681 00:35:49,200 --> 00:35:53,120 Speaker 1: find a willing and accepting audience? Of course, take your 682 00:35:53,160 --> 00:35:56,640 Speaker 1: ideas into prototype stage or two hang out your single 683 00:35:56,680 --> 00:35:58,279 Speaker 1: and of course is you know where do you have 684 00:35:58,280 --> 00:36:01,640 Speaker 1: a talent pool um and an interesting and interesting a 685 00:36:01,640 --> 00:36:03,799 Speaker 1: place to get going. Look at all eyes have been 686 00:36:03,840 --> 00:36:06,799 Speaker 1: on the west coast of Europe. The turnaround story of 687 00:36:06,840 --> 00:36:11,080 Speaker 1: Portugal has been about manufacturing um, and so many people 688 00:36:11,080 --> 00:36:13,719 Speaker 1: are going to to Lisbon at the moment um. So 689 00:36:13,760 --> 00:36:17,840 Speaker 1: I think Lisbon as a manufacturing base, but also the 690 00:36:17,920 --> 00:36:20,120 Speaker 1: capital base. Now, I mean this is a city they're 691 00:36:20,120 --> 00:36:23,440 Speaker 1: already building a second least Francais because so many French 692 00:36:23,480 --> 00:36:26,239 Speaker 1: people are are moving there um as well. Of course 693 00:36:26,239 --> 00:36:29,240 Speaker 1: it's an interesting tax regime in Portugal at the moment, 694 00:36:29,320 --> 00:36:31,440 Speaker 1: so I would say there. I would say also I 695 00:36:31,520 --> 00:36:35,240 Speaker 1: look up the coast to Porto. Um, you know, Madrid 696 00:36:35,400 --> 00:36:38,040 Speaker 1: is really interesting. If I wanted to do and launch 697 00:36:38,120 --> 00:36:40,920 Speaker 1: a restaurant concept right now, if I said I wanted 698 00:36:40,920 --> 00:36:44,120 Speaker 1: to take something maybe springboard into the Latin American work, 699 00:36:44,520 --> 00:36:46,919 Speaker 1: but you know, give it a European foundation, I would 700 00:36:46,920 --> 00:36:49,480 Speaker 1: look at it. Adam Madrid, I was making a European 701 00:36:49,520 --> 00:36:52,000 Speaker 1: context anyway. We can talk about Asia and North America 702 00:36:52,040 --> 00:36:54,600 Speaker 1: as well. If you're just joining us Chyler Ballet with 703 00:36:54,640 --> 00:36:57,680 Speaker 1: a Smnica. Full disclosure, I have a subscription it to 704 00:36:57,800 --> 00:37:00,920 Speaker 1: Tyler's rag and I hate to admit him. I actually 705 00:37:00,920 --> 00:37:03,120 Speaker 1: put up Tom Keene to Balloons for this. It wasn't 706 00:37:03,200 --> 00:37:05,239 Speaker 1: you know, Tyler didn't like toss it to me free 707 00:37:05,320 --> 00:37:08,120 Speaker 1: or something. You lift it, you can lift it. It's 708 00:37:08,160 --> 00:37:10,759 Speaker 1: like a phone book as well. We're with Tyler Roley 709 00:37:10,920 --> 00:37:15,000 Speaker 1: Securities Analysis, Tyler General Electric. I don't know if you're 710 00:37:15,040 --> 00:37:18,480 Speaker 1: familiar with them. They're small industrial lot of connected in 711 00:37:18,520 --> 00:37:23,680 Speaker 1: New York. Tyler Ge has gone ten nine eight and 712 00:37:23,840 --> 00:37:26,800 Speaker 1: is now trading with essentially no bid at seven dollars 713 00:37:27,160 --> 00:37:30,880 Speaker 1: eighty two cents. It's perfect to talk to Tyler Brolay 714 00:37:31,640 --> 00:37:36,719 Speaker 1: about the cultural realities of mergers. Jeff Himmelt got off 715 00:37:36,760 --> 00:37:39,680 Speaker 1: the plane It's c d G and he went in 716 00:37:39,719 --> 00:37:44,080 Speaker 1: there and did a French industrial acquisition. Tyler it is 717 00:37:44,280 --> 00:37:49,359 Speaker 1: about cultures that don't work together, isn't it. It is? 718 00:37:49,440 --> 00:37:52,920 Speaker 1: And I think I think we think we forget the 719 00:37:52,920 --> 00:37:57,080 Speaker 1: importance of longevity. I was I wasn't actually one of 720 00:37:57,120 --> 00:37:59,560 Speaker 1: the heads of Chanel recently, man who has been out, 721 00:37:59,600 --> 00:38:02,759 Speaker 1: you know what a family owned business, which is a lot. 722 00:38:02,800 --> 00:38:05,840 Speaker 1: I mean, we don't quite know what chel revenue is, 723 00:38:05,880 --> 00:38:07,800 Speaker 1: but I think it's in the region probably ten billion 724 00:38:07,920 --> 00:38:10,800 Speaker 1: us UM. And and there's you know, there's something to 725 00:38:10,920 --> 00:38:13,879 Speaker 1: be said for you know, picking it out and being 726 00:38:13,920 --> 00:38:16,279 Speaker 1: there for the long haul. And this gentleman said Mr 727 00:38:16,320 --> 00:38:18,680 Speaker 1: Pavlovsky said, you know, you have to be You've got 728 00:38:18,680 --> 00:38:21,200 Speaker 1: to have people who's chick around a long time to 729 00:38:21,320 --> 00:38:24,040 Speaker 1: run a brand. And you can't just bring in a consultant. 730 00:38:24,040 --> 00:38:28,600 Speaker 1: You can't just parachute in potentially a new CFO or 731 00:38:28,719 --> 00:38:30,719 Speaker 1: bulls on a new business on the side of and 732 00:38:30,760 --> 00:38:32,880 Speaker 1: think it's all going to be. We don't work deliriously 733 00:38:32,920 --> 00:38:35,359 Speaker 1: and we're gonna get um, you know, either a nice 734 00:38:35,360 --> 00:38:37,680 Speaker 1: show price or we're gonna get you know, an amazing 735 00:38:37,760 --> 00:38:40,120 Speaker 1: spike and revenues. And I think we you know, I 736 00:38:40,680 --> 00:38:42,239 Speaker 1: you know, in this sort of world of youth and 737 00:38:42,320 --> 00:38:45,560 Speaker 1: hype and millennials and all of these things. Sometimes, actually 738 00:38:45,560 --> 00:38:48,680 Speaker 1: it's all right to be on the job for fifteen years, Tyler. 739 00:38:48,800 --> 00:38:50,640 Speaker 1: One of the things that happens when you're on the 740 00:38:50,719 --> 00:38:54,319 Speaker 1: job for fifteen years is you get that request to 741 00:38:54,480 --> 00:38:59,080 Speaker 1: rebrand or redesign the public face of a company. And 742 00:38:59,160 --> 00:39:03,560 Speaker 1: you've done that many times over. Why don't more companies 743 00:39:03,680 --> 00:39:07,440 Speaker 1: do it when they're healthy and can adjust to the change, 744 00:39:07,640 --> 00:39:11,840 Speaker 1: rather than reacting to problems like a sinking share price 745 00:39:12,280 --> 00:39:17,680 Speaker 1: or perhaps an activist investor, well, I think him, that's 746 00:39:17,719 --> 00:39:19,920 Speaker 1: you know, the issue there is, like you've got everyone 747 00:39:19,960 --> 00:39:23,520 Speaker 1: around the boardroom table in their stretchy comfy pants, right, Um, 748 00:39:23,800 --> 00:39:27,000 Speaker 1: they've got an alassicated waste and everyone is around the 749 00:39:27,000 --> 00:39:29,640 Speaker 1: boardroom table. Yeah, we're feeling sort of comfy and good 750 00:39:29,640 --> 00:39:31,560 Speaker 1: about things. So you know, so why why should we 751 00:39:31,640 --> 00:39:34,759 Speaker 1: change it? And yeah, guess what you're the rebranding all 752 00:39:34,880 --> 00:39:36,680 Speaker 1: in is going to cost us, you know, five or 753 00:39:36,680 --> 00:39:40,279 Speaker 1: seven million, which you know, as we know, um, is 754 00:39:40,320 --> 00:39:42,200 Speaker 1: not that much money coming out of the gate to 755 00:39:42,320 --> 00:39:46,080 Speaker 1: get going. And and that's that's so often the problem, um, 756 00:39:46,080 --> 00:39:48,520 Speaker 1: And I always think, you know, smart companies start to 757 00:39:48,560 --> 00:39:51,279 Speaker 1: interrogate their brand early on, and they look at is 758 00:39:51,280 --> 00:39:53,880 Speaker 1: it time for not just a fresh coat of paint um, 759 00:39:53,920 --> 00:39:55,160 Speaker 1: but you know, do we need to look at our 760 00:39:55,160 --> 00:39:57,960 Speaker 1: whether whether we're in retail or we're an airline and 761 00:39:58,000 --> 00:40:01,440 Speaker 1: we look at these lodges of our airthrop Tyler, congratulations 762 00:40:01,440 --> 00:40:04,440 Speaker 1: on your soft power survey. It's it's it's extremely important 763 00:40:04,480 --> 00:40:08,120 Speaker 1: to all of business worldwide. All I asked relate, would 764 00:40:08,120 --> 00:40:11,719 Speaker 1: you get the European companies to make bigger sizes? So 765 00:40:11,880 --> 00:40:18,880 Speaker 1: maybe that? Yeah, Tyler, really, thank you so much. He 766 00:40:19,040 --> 00:40:22,319 Speaker 1: is in Paris, and of course Monacle is his magazine. 767 00:40:22,880 --> 00:40:27,080 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 768 00:40:27,160 --> 00:40:32,480 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 769 00:40:32,520 --> 00:40:36,760 Speaker 1: platform you prefer. I'm on Twitter at Tom Keane before 770 00:40:36,800 --> 00:40:40,640 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg 771 00:40:40,719 --> 00:40:41,000 Speaker 1: Radio