1 00:00:00,240 --> 00:00:04,040 Speaker 1: Runch you by Bank of America Mary Lynch with virtual reality, 2 00:00:04,320 --> 00:00:09,719 Speaker 1: virtually everything will change. Discover opportunities in a transforming world 3 00:00:10,160 --> 00:00:14,440 Speaker 1: VI of a mL dot Com slash VR, Mary Lynch, 4 00:00:14,520 --> 00:00:29,240 Speaker 1: Pierced Fenner, and Smith Incorporated. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:29,280 --> 00:00:32,760 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:32,840 --> 00:00:37,640 Speaker 1: insight from the best of economics, finance, investment, and international relations. 7 00:00:38,120 --> 00:00:43,640 Speaker 1: Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, Bloomberg dot Com, 8 00:00:43,640 --> 00:00:50,840 Speaker 1: and of course, on the Bloomberg We'll Ben tharm Band 9 00:00:50,840 --> 00:00:52,880 Speaker 1: Oltsie is the US chief economist at UNI Credit, and 10 00:00:52,920 --> 00:00:54,800 Speaker 1: he joins us here in our Bloomberg eleven three oh 11 00:00:55,280 --> 00:00:57,360 Speaker 1: studios set. We'd be remiss if we didn't talk about 12 00:00:57,400 --> 00:01:00,520 Speaker 1: the meeting in Portugal earlier this week. I true bankers 13 00:01:00,560 --> 00:01:04,200 Speaker 1: working to coordinate their efforts together. Certainly interesting commentary for them. 14 00:01:04,200 --> 00:01:06,840 Speaker 1: What's your takeaway from what they had to say in Portugal? Well, 15 00:01:06,880 --> 00:01:08,800 Speaker 1: I think the clear messages that they are all looking 16 00:01:08,840 --> 00:01:10,800 Speaker 1: at a global economy that looks an awful lot better 17 00:01:10,840 --> 00:01:13,520 Speaker 1: than it did only a couple of months ago, certainly 18 00:01:13,560 --> 00:01:16,279 Speaker 1: a year ago. And I mean they are all aware 19 00:01:16,280 --> 00:01:20,679 Speaker 1: that they used almost well basically unprecedented monetary policy easing 20 00:01:20,720 --> 00:01:23,720 Speaker 1: to you know, to fight this deep recession and crisis 21 00:01:23,720 --> 00:01:26,360 Speaker 1: that we have seen several years ago. And now that 22 00:01:26,440 --> 00:01:30,399 Speaker 1: the world is looking better, they are very gradually preparing 23 00:01:30,440 --> 00:01:33,360 Speaker 1: certainly markets um that they are willing to take a 24 00:01:33,360 --> 00:01:36,200 Speaker 1: step back, right. UM, So we just see it as 25 00:01:36,200 --> 00:01:42,000 Speaker 1: a very early careful signal to um of to show 26 00:01:42,040 --> 00:01:45,720 Speaker 1: transparency that they are willing and to withdraw accommodation. But 27 00:01:45,760 --> 00:01:48,680 Speaker 1: it's nothing that is imminent. They just want to remember 28 00:01:48,680 --> 00:01:51,640 Speaker 1: the table tantrum and May two thousand thirteen. Um. They 29 00:01:51,680 --> 00:01:53,680 Speaker 1: want to be even more careful than that because they 30 00:01:53,720 --> 00:01:55,400 Speaker 1: know how markets can react. And we I mean we 31 00:01:55,440 --> 00:01:59,280 Speaker 1: have seen a quite sizeable reaction markets even as what 32 00:01:59,440 --> 00:02:02,840 Speaker 1: Drug and Carnie have been saying was not too different 33 00:02:02,840 --> 00:02:04,880 Speaker 1: from what they said before. But you know, the market 34 00:02:04,960 --> 00:02:07,400 Speaker 1: is looking at every small words and and so the 35 00:02:07,440 --> 00:02:10,359 Speaker 1: reaction was big. But again I don't think there's any 36 00:02:10,360 --> 00:02:12,440 Speaker 1: policy action imminent, but the direction is clear. You know, 37 00:02:12,960 --> 00:02:16,120 Speaker 1: there's always cognizance among central bankers. The Governor of the 38 00:02:16,160 --> 00:02:18,359 Speaker 1: Bank of England is aware of what the chair the 39 00:02:18,400 --> 00:02:21,119 Speaker 1: FED is doing, for instance, But this type of deliberate 40 00:02:21,280 --> 00:02:23,800 Speaker 1: coordination is something new entirely. What what are the perils 41 00:02:23,800 --> 00:02:25,359 Speaker 1: of doing that? What's going to be difficult about the 42 00:02:25,560 --> 00:02:28,000 Speaker 1: coordination that was proposed this way? No, I mean we 43 00:02:28,000 --> 00:02:30,320 Speaker 1: don't know if there was real coordination. They were all talked, 44 00:02:31,040 --> 00:02:32,680 Speaker 1: they were all sitting at the same place, and I 45 00:02:32,720 --> 00:02:35,280 Speaker 1: guess they talked to each other. But I mean there's 46 00:02:35,320 --> 00:02:38,560 Speaker 1: a common factor behind the global economy that that looks better. No, 47 00:02:38,680 --> 00:02:40,280 Speaker 1: I think there are not too many parents. I think 48 00:02:40,320 --> 00:02:42,800 Speaker 1: it has benefits if you are moving in the right direction. 49 00:02:42,840 --> 00:02:45,680 Speaker 1: You know, the Bank for International Settlement just released its 50 00:02:45,680 --> 00:02:51,360 Speaker 1: annual report and this year again they urged for some coordination. Um. 51 00:02:51,400 --> 00:02:53,840 Speaker 1: Because if you if you do not coordinate, I mean 52 00:02:53,880 --> 00:02:55,840 Speaker 1: then you have this problem of begging your neighbor. You 53 00:02:55,840 --> 00:02:58,160 Speaker 1: have to exchange rate movements and all that stuff. But 54 00:02:58,200 --> 00:03:00,240 Speaker 1: you take that a little bit off the table. They 55 00:03:00,240 --> 00:03:03,560 Speaker 1: are all moving in the same direction, you're you're baillywick. 56 00:03:03,680 --> 00:03:05,000 Speaker 1: Is that the US, of course? And I want to 57 00:03:05,240 --> 00:03:07,080 Speaker 1: when you when you look at global growth with roles, 58 00:03:07,080 --> 00:03:08,959 Speaker 1: the US playing in that right now? Oh huge? I 59 00:03:08,960 --> 00:03:12,360 Speaker 1: mean because the US that's something that that President Trump 60 00:03:12,400 --> 00:03:15,200 Speaker 1: doesn't like. I guess the U s is basically still um. 61 00:03:15,760 --> 00:03:20,840 Speaker 1: The main reflecting most of the world's final demand because 62 00:03:20,880 --> 00:03:23,760 Speaker 1: of the U S consumer. Right, So it is very 63 00:03:23,800 --> 00:03:25,760 Speaker 1: important what's going on in the US economy, and it 64 00:03:25,880 --> 00:03:27,160 Speaker 1: is good for the rest of the world that the 65 00:03:27,200 --> 00:03:30,440 Speaker 1: consumer is still pretty healthy. Consumers pretty healthy, as you say, 66 00:03:30,840 --> 00:03:33,560 Speaker 1: devetail that with us with retail if if you would, 67 00:03:33,639 --> 00:03:36,280 Speaker 1: We hear so many sad stories about closures of stories 68 00:03:36,280 --> 00:03:38,520 Speaker 1: here in New York and elsewhere, and about the demise 69 00:03:38,560 --> 00:03:40,320 Speaker 1: of the big box story, et cetera. How does that 70 00:03:40,360 --> 00:03:42,720 Speaker 1: fit in with the picture of the consumers health, right? 71 00:03:42,920 --> 00:03:45,120 Speaker 1: I think there are two aspects of that. First of all, yeah, 72 00:03:45,160 --> 00:03:47,440 Speaker 1: we are always hearing about brick and water stale sale 73 00:03:48,400 --> 00:03:50,800 Speaker 1: stores closing, But then of course we have there's one 74 00:03:51,040 --> 00:03:55,320 Speaker 1: big online company growing quite a bit, so you know 75 00:03:55,400 --> 00:03:58,520 Speaker 1: that's one part. Plus I mean this this retail sector, 76 00:03:58,640 --> 00:04:01,720 Speaker 1: big Amazon or the other story that's only if you 77 00:04:01,800 --> 00:04:05,120 Speaker 1: want goods, but almost three quarta off us consumer spending 78 00:04:05,120 --> 00:04:07,200 Speaker 1: his services, so nobody talks about that. So I think 79 00:04:07,280 --> 00:04:10,640 Speaker 1: that that's a tool two aspects that solved that that riddle. 80 00:04:10,680 --> 00:04:15,120 Speaker 1: If you just focus on the closing of stores, you're 81 00:04:15,160 --> 00:04:18,280 Speaker 1: missing Amazon as well as services, which is well a 82 00:04:18,400 --> 00:04:21,000 Speaker 1: huge part of consumer spending. Good morning everyone, David gern 83 00:04:21,080 --> 00:04:23,600 Speaker 1: time Keen Harn bundles with us with the un credit 84 00:04:23,640 --> 00:04:26,679 Speaker 1: Bloomberg surveillance. I've got to go back to the headlines 85 00:04:26,720 --> 00:04:30,120 Speaker 1: you made worldwide an hour ago where you took Dan 86 00:04:30,200 --> 00:04:34,479 Speaker 1: Mackie and Ed Himan one better from four percent unimaginable. 87 00:04:34,920 --> 00:04:37,560 Speaker 1: When Dr Mackie said that ages ago, you were there too, 88 00:04:38,360 --> 00:04:41,600 Speaker 1: John Herman was there, Ed Hyman saying forget about that. 89 00:04:41,720 --> 00:04:44,080 Speaker 1: Mackie's right, it's gonna be even lower three and a 90 00:04:44,120 --> 00:04:47,960 Speaker 1: half percent, and you drive even lower than that. Can 91 00:04:48,120 --> 00:04:52,440 Speaker 1: our American systems stand a three point zero or three 92 00:04:52,560 --> 00:04:57,240 Speaker 1: point one unemployment rate? It's like a packed airplane. I mean, 93 00:04:57,279 --> 00:05:00,320 Speaker 1: you can only get so many jobs in right, right, 94 00:05:00,400 --> 00:05:02,359 Speaker 1: But I mean why would there be a problem if 95 00:05:02,400 --> 00:05:04,600 Speaker 1: you create a couple of more jobs. So there's no 96 00:05:05,560 --> 00:05:08,560 Speaker 1: no problem having a low unemployment rate. Um, it's just 97 00:05:08,720 --> 00:05:10,560 Speaker 1: in the that the pace of job creation, it keeps 98 00:05:10,560 --> 00:05:14,120 Speaker 1: slowing down, right because and that's mostly a question of 99 00:05:14,200 --> 00:05:16,800 Speaker 1: labor supply. And as I said about an hour ago 100 00:05:16,880 --> 00:05:20,360 Speaker 1: on your on TV, it's you know, the labor force 101 00:05:20,520 --> 00:05:22,120 Speaker 1: is growing right now, maybe at a pace of a 102 00:05:22,200 --> 00:05:24,839 Speaker 1: hundred twenty five thousands that is slowing down to eighty 103 00:05:24,960 --> 00:05:27,160 Speaker 1: or even sixty thousand within a couple of years. So 104 00:05:27,279 --> 00:05:30,359 Speaker 1: that means then that that employment gains at full employment 105 00:05:30,960 --> 00:05:33,680 Speaker 1: or a buff full employment will certainly slow down to 106 00:05:33,800 --> 00:05:36,640 Speaker 1: that areas. And that takes a little bit away of 107 00:05:36,839 --> 00:05:39,320 Speaker 1: of gdpegros at that point, right where where are the 108 00:05:39,400 --> 00:05:42,560 Speaker 1: jobs coming from? Another words, is the quality sticking up? 109 00:05:43,800 --> 00:05:46,000 Speaker 1: I don't think it's. It's it's kind of you have 110 00:05:46,440 --> 00:05:49,200 Speaker 1: bipolar job creation, so there are not too many jobs 111 00:05:49,279 --> 00:05:51,160 Speaker 1: in the middle. You have a couple of very well 112 00:05:51,240 --> 00:05:54,720 Speaker 1: paid jobs in a couple of very poorly paid jobs. 113 00:05:54,760 --> 00:05:56,279 Speaker 1: So that has been the pattern that we've seen over 114 00:05:56,320 --> 00:05:58,000 Speaker 1: the last several years. I don't think it's changed. Okay, 115 00:05:58,040 --> 00:05:59,680 Speaker 1: but I put a chart out this week but got 116 00:05:59,720 --> 00:06:01,680 Speaker 1: the big response to the week. It maybe my chart 117 00:06:01,680 --> 00:06:06,360 Speaker 1: of the year full time unemployed, full time employed, full 118 00:06:06,400 --> 00:06:09,840 Speaker 1: time jobs population adjusted. That may do some other work 119 00:06:09,880 --> 00:06:14,360 Speaker 1: in the dominator is well, but aren't bundles full time 120 00:06:14,360 --> 00:06:18,560 Speaker 1: employments come back? But it's nowhere near the glory years? 121 00:06:18,800 --> 00:06:21,200 Speaker 1: Is that right? Yeah? I think I think that is fair. 122 00:06:21,240 --> 00:06:23,200 Speaker 1: I mean that is just the result of a if 123 00:06:23,240 --> 00:06:26,240 Speaker 1: you put it positively, a more flexible labor market right. Um, 124 00:06:27,279 --> 00:06:29,760 Speaker 1: but if you look at the I mean, if you 125 00:06:29,800 --> 00:06:31,680 Speaker 1: don't have full time employment and you're looking for it, 126 00:06:31,720 --> 00:06:34,040 Speaker 1: you're part of this underemployed group, right, And then you're 127 00:06:34,040 --> 00:06:36,560 Speaker 1: looking at the U six underemployment rate, that as well 128 00:06:36,640 --> 00:06:39,080 Speaker 1: has been coming down. So I think there's some more rooms. 129 00:06:39,120 --> 00:06:40,920 Speaker 1: So that is part of the hidden select that people 130 00:06:41,000 --> 00:06:45,440 Speaker 1: talk about. Um, but but the direction is is very clear. 131 00:06:45,480 --> 00:06:47,560 Speaker 1: So it's not only the headline unemployment rate that has 132 00:06:47,600 --> 00:06:51,000 Speaker 1: fallen a lot, but also the underemployment rates which include 133 00:06:51,040 --> 00:06:52,960 Speaker 1: people who only find part time jobs and all that. 134 00:06:53,240 --> 00:06:56,400 Speaker 1: You say, Phillips curve is still alive, and well, yes, 135 00:06:57,680 --> 00:07:00,360 Speaker 1: exploit exploited it absolutely, I mean for us of all. 136 00:07:01,440 --> 00:07:03,920 Speaker 1: First of all, you can look at every wage measure, 137 00:07:04,360 --> 00:07:07,080 Speaker 1: every core inflation measure. They have all accelerated over the 138 00:07:07,200 --> 00:07:10,760 Speaker 1: last several years, all of them. Of course, they are 139 00:07:10,840 --> 00:07:13,120 Speaker 1: not as high as we thought they would be at 140 00:07:13,120 --> 00:07:17,840 Speaker 1: a four point three percent unemployment rate. So my twofold answers, absolutely, 141 00:07:17,880 --> 00:07:21,760 Speaker 1: the Phillips curve is alive, and absolutely the parameters have shifted, 142 00:07:22,280 --> 00:07:24,400 Speaker 1: so it's just not as steep or located where it 143 00:07:24,440 --> 00:07:26,440 Speaker 1: has been before. It has shifted a little bit to 144 00:07:26,520 --> 00:07:29,240 Speaker 1: the left if you want, but it's absolutely alive. There's 145 00:07:29,240 --> 00:07:32,720 Speaker 1: a negative correlation between the jobless rate and inflation or 146 00:07:32,760 --> 00:07:36,400 Speaker 1: wage pressure. And I also think there is a nonlinear 147 00:07:36,520 --> 00:07:40,320 Speaker 1: component to it. To excuse me, what is this nonlinear? Friday? 148 00:07:40,880 --> 00:07:43,440 Speaker 1: Come on, we're going quadratic with hard bindals. When you 149 00:07:43,520 --> 00:07:46,160 Speaker 1: say shift to the left with a Philips curve, what 150 00:07:46,200 --> 00:07:48,320 Speaker 1: does that mean? That means? Like the way I walked 151 00:07:48,320 --> 00:07:51,320 Speaker 1: down Fifth Avenue in front of the Gucci store, shift 152 00:07:51,440 --> 00:07:56,000 Speaker 1: the left? What's it mean? That's that just means for 153 00:07:56,120 --> 00:07:58,600 Speaker 1: the same unemployment rate, wage pressure is a bit lower 154 00:07:58,640 --> 00:08:01,520 Speaker 1: than it has been in the past. Do you agree 155 00:08:01,520 --> 00:08:07,160 Speaker 1: with you like that? David was there's too much math store? 156 00:08:08,200 --> 00:08:11,080 Speaker 1: Did share the fat chairs confidence in the transitory nature 157 00:08:11,160 --> 00:08:14,080 Speaker 1: of the inflationary headwinds we've seen we're seeing, Yes, and 158 00:08:14,400 --> 00:08:16,480 Speaker 1: exactly for for for the reason I mentioned. I mean, 159 00:08:16,520 --> 00:08:19,720 Speaker 1: I think the fat is completely right, um that they 160 00:08:19,880 --> 00:08:23,600 Speaker 1: kind of um discount what we have seen over the 161 00:08:23,680 --> 00:08:26,240 Speaker 1: last several months. We all know monetary policy works with 162 00:08:26,320 --> 00:08:29,080 Speaker 1: the leg on the real economy at least, and well, 163 00:08:29,480 --> 00:08:31,400 Speaker 1: the slack in the labor market, slack in the economy 164 00:08:31,520 --> 00:08:33,680 Speaker 1: is just diminishing. We don't know how fast and again 165 00:08:33,720 --> 00:08:36,400 Speaker 1: how much how high the shadow unemployment is. It could 166 00:08:36,440 --> 00:08:38,920 Speaker 1: be a ted higher, but the direction is very clear. 167 00:08:39,360 --> 00:08:41,600 Speaker 1: And if we believe in that excuse me, non linear 168 00:08:41,679 --> 00:08:44,320 Speaker 1: component means that wage grows will accelerated at some point. 169 00:08:44,520 --> 00:08:46,959 Speaker 1: You know, the risk is that at some point you 170 00:08:47,000 --> 00:08:49,480 Speaker 1: see a bigger increase in inflation and wage growth. So 171 00:08:49,600 --> 00:08:51,480 Speaker 1: I think it's it is correct that the FAT is 172 00:08:51,559 --> 00:08:54,280 Speaker 1: focusing on that that outlook. You grew up in a 173 00:08:54,360 --> 00:08:57,599 Speaker 1: Hamburg tell us about the city that will greet the 174 00:08:57,720 --> 00:09:00,360 Speaker 1: G twenty. I think Americans have an image of Bland, 175 00:09:00,800 --> 00:09:04,360 Speaker 1: maybe a Frankfort, Munich. Maybe Hamburg is a little different. 176 00:09:04,600 --> 00:09:07,200 Speaker 1: What is it? Well, I think it's um. There's there's 177 00:09:07,200 --> 00:09:09,319 Speaker 1: a saying that Germany has a world city which is 178 00:09:09,360 --> 00:09:12,560 Speaker 1: basically a kind of a metropolitan area, which is Berlin. 179 00:09:12,600 --> 00:09:15,080 Speaker 1: As you know. Then Germany has a world open city, 180 00:09:15,120 --> 00:09:17,120 Speaker 1: which is Hamburg, and then we have a world village 181 00:09:17,120 --> 00:09:19,400 Speaker 1: which is Munich. It's a bit dangerous for me because 182 00:09:19,440 --> 00:09:24,120 Speaker 1: our headquarters in Munich, but maybe out for lunch, so humbug. Well, 183 00:09:24,240 --> 00:09:26,880 Speaker 1: that's one of the biggest European ports. Hambug is actually 184 00:09:26,920 --> 00:09:29,600 Speaker 1: the second largest city in Germany, A lot of water, 185 00:09:29,679 --> 00:09:32,120 Speaker 1: a lot of green, beautiful city, but it's running out 186 00:09:32,120 --> 00:09:35,920 Speaker 1: of hotel space this weekend. I'm hearing what's the relationship 187 00:09:35,960 --> 00:09:39,160 Speaker 1: shaping up to be like between uh, these European leaders 188 00:09:39,200 --> 00:09:41,280 Speaker 1: and President Trump in light of what we saw at 189 00:09:41,280 --> 00:09:43,400 Speaker 1: the G seven a few weeks back, and we've seen 190 00:09:43,440 --> 00:09:46,520 Speaker 1: a much close relationship forming here between Chancellor Merkel and 191 00:09:46,559 --> 00:09:51,000 Speaker 1: the President of Franzman Malmachran. Uh. Well that's the landscape 192 00:09:51,040 --> 00:09:53,400 Speaker 1: shifting going into this G twenty seven. Well, first of all, 193 00:09:53,440 --> 00:09:55,600 Speaker 1: we must not forget that Germany. There's an election coming 194 00:09:55,640 --> 00:09:57,480 Speaker 1: up in Germany, and so I mean, the the election 195 00:09:57,559 --> 00:09:59,520 Speaker 1: campaign is nothing compared to what we see have we 196 00:09:59,600 --> 00:10:01,520 Speaker 1: seen what we have seen in the US, and I'm 197 00:10:01,679 --> 00:10:04,560 Speaker 1: very grateful for that. But Mercury is a shrewd politician. Really. 198 00:10:04,600 --> 00:10:07,400 Speaker 1: I mean, you may make some headlines that Germany was 199 00:10:07,520 --> 00:10:10,559 Speaker 1: just accepting the same sex marriage. She just took it 200 00:10:10,679 --> 00:10:13,040 Speaker 1: out of the head because that was something the Social 201 00:10:13,080 --> 00:10:15,920 Speaker 1: Democrats were compaigning on. So bank that topic has gone, 202 00:10:15,960 --> 00:10:18,000 Speaker 1: the economy is doing well, and then of course she 203 00:10:18,080 --> 00:10:21,360 Speaker 1: occupies the other topic. Not we don't we know, we 204 00:10:21,440 --> 00:10:23,640 Speaker 1: know not only since the last Pew research survey that 205 00:10:24,280 --> 00:10:27,599 Speaker 1: speaking up against President Trump is very popular outside of 206 00:10:27,640 --> 00:10:30,520 Speaker 1: the US basically everywhere you look, and she has been 207 00:10:30,559 --> 00:10:33,640 Speaker 1: toughened up her language. And it's not, as you said, 208 00:10:33,640 --> 00:10:38,000 Speaker 1: it's not only her, Um, it's almost every state leader, 209 00:10:38,080 --> 00:10:42,560 Speaker 1: with very few exceptions. UM. And maybe um, the US 210 00:10:42,600 --> 00:10:45,880 Speaker 1: will will face that almost unprecedented situation to come into 211 00:10:45,920 --> 00:10:47,679 Speaker 1: a G twenty meeting and be a little bit of 212 00:10:47,800 --> 00:10:50,880 Speaker 1: the odd man out there. It strikes me just looking 213 00:10:50,920 --> 00:10:53,120 Speaker 1: at how the whole Brexit process is unfolding, the degree 214 00:10:53,120 --> 00:10:56,080 Speaker 1: to which Europe has coalesced around its position. You're seeing 215 00:10:56,120 --> 00:10:58,120 Speaker 1: that maybe in response to the president that we now 216 00:10:58,160 --> 00:11:00,319 Speaker 1: have here in the US, it seems like we have 217 00:11:00,400 --> 00:11:02,559 Speaker 1: a stronger Europe And my writing thing that haes that 218 00:11:02,640 --> 00:11:06,679 Speaker 1: effect the U s economy having a stronger Europe. Um. Yeah, 219 00:11:06,720 --> 00:11:08,400 Speaker 1: I think that perception is correct. I mean, we just 220 00:11:08,440 --> 00:11:11,439 Speaker 1: still don't know exactly how these Brexit negotiations will play out. 221 00:11:11,520 --> 00:11:14,520 Speaker 1: But the perception that you can have is you know 222 00:11:14,920 --> 00:11:19,760 Speaker 1: that the remaining Eurozone countries, your European Union countries, have 223 00:11:20,200 --> 00:11:22,720 Speaker 1: moved a little bit more together, and maybe they are 224 00:11:22,760 --> 00:11:25,120 Speaker 1: willing to address some of the shortcomings that are certainly there. 225 00:11:25,200 --> 00:11:28,600 Speaker 1: And yes, the election of Mr McCraw absolutely helped. As 226 00:11:28,640 --> 00:11:30,920 Speaker 1: I said, there's the election Germany, so Merkel does not 227 00:11:31,000 --> 00:11:33,960 Speaker 1: want to spoil anything. But after that, I think there's 228 00:11:34,040 --> 00:11:36,880 Speaker 1: a good chance that Merkel and McCraw work together a 229 00:11:36,920 --> 00:11:39,240 Speaker 1: little bit more. What does it mean for the for 230 00:11:39,360 --> 00:11:41,559 Speaker 1: the U S. Well, I mean, it cannot be in 231 00:11:41,679 --> 00:11:44,559 Speaker 1: the interests of the US really if you have a 232 00:11:44,640 --> 00:11:49,120 Speaker 1: weak Eurozone, because, um, because the values are very similar. 233 00:11:49,480 --> 00:11:51,280 Speaker 1: The Eurozone, if you just look at it as a whole, 234 00:11:51,360 --> 00:11:53,920 Speaker 1: is one of the biggest economic areas, so in other 235 00:11:53,920 --> 00:11:55,959 Speaker 1: ways it is very It will be very positive for 236 00:11:56,040 --> 00:11:58,480 Speaker 1: the U S if if the Eurozone strengthened further. Just 237 00:11:58,559 --> 00:12:01,120 Speaker 1: want to find a question, do we want a week dollar? 238 00:12:02,120 --> 00:12:04,280 Speaker 1: I believe the president I mean to be fair to 239 00:12:04,360 --> 00:12:08,600 Speaker 1: President Trump. Every president wants a week dollar to help exports. 240 00:12:09,040 --> 00:12:13,960 Speaker 1: Does America want a week dollar right now? Um? Well, well, 241 00:12:14,000 --> 00:12:15,600 Speaker 1: first of all, they always say they want a stronger 242 00:12:15,840 --> 00:12:17,480 Speaker 1: the strong dollar. But but the the fact that they 243 00:12:17,480 --> 00:12:18,600 Speaker 1: want a weak one, you know, I agree, I mean 244 00:12:18,880 --> 00:12:23,040 Speaker 1: every I agree for economically everybody wants a week currency. 245 00:12:23,200 --> 00:12:25,480 Speaker 1: But if you look at the structure of the US, um, 246 00:12:25,679 --> 00:12:28,000 Speaker 1: there's so much is really driven by consumer spending. A 247 00:12:28,080 --> 00:12:31,800 Speaker 1: weak currency, you know, raises prices um. So of all 248 00:12:31,880 --> 00:12:33,679 Speaker 1: the countries in the world, I think the US is 249 00:12:33,720 --> 00:12:37,520 Speaker 1: the one that really that needs a weak currency the 250 00:12:37,640 --> 00:12:42,439 Speaker 1: least because it's it's really a big, relatively closed economy, 251 00:12:42,640 --> 00:12:45,720 Speaker 1: and it's probably okay for the for the global economy 252 00:12:46,679 --> 00:12:49,680 Speaker 1: if if if we stay in in the X regime 253 00:12:49,679 --> 00:12:52,320 Speaker 1: where we are right now right to speak with own 254 00:12:54,040 --> 00:12:59,720 Speaker 1: linear and quadrangle linear and thank you, some term boundles 255 00:12:59,760 --> 00:13:03,000 Speaker 1: will into credit very importantly a more optimistic house. And 256 00:13:03,040 --> 00:13:05,280 Speaker 1: he really comes down to two point three two point 257 00:13:05,320 --> 00:13:08,160 Speaker 1: four percent view and of course a headline earlier that 258 00:13:08,240 --> 00:13:12,880 Speaker 1: went out across Bloomberg of looking at um a more diminished, 259 00:13:13,200 --> 00:13:16,560 Speaker 1: lower and good unemployment rate three point zero three point 260 00:13:17,520 --> 00:13:33,400 Speaker 1: unemployment right, that is just extraordinary. This is a massive 261 00:13:33,480 --> 00:13:36,280 Speaker 1: rip up the script, and we're gonna do it carefully 262 00:13:36,320 --> 00:13:40,280 Speaker 1: here with our good legal counsel, Robert Profusek of Jones Day, 263 00:13:40,360 --> 00:13:45,280 Speaker 1: truly expert in transactions, robertus I'm not going to go 264 00:13:45,360 --> 00:13:49,000 Speaker 1: into convertible bond or preferred exchange mathematics with you. You've 265 00:13:49,040 --> 00:13:52,040 Speaker 1: got associates making two thousand bucks an hour doing that 266 00:13:52,200 --> 00:13:55,640 Speaker 1: for you right now. But we have Mr buffet today 267 00:13:56,600 --> 00:13:59,520 Speaker 1: doing what every financier does, which is he does a 268 00:13:59,559 --> 00:14:04,240 Speaker 1: trans action amid a huge distress. Bank of America flat 269 00:14:04,320 --> 00:14:07,080 Speaker 1: on their back and he gets a twelve billion dollar 270 00:14:07,280 --> 00:14:11,400 Speaker 1: cash in today is he moves from preferred stock over 271 00:14:11,520 --> 00:14:15,040 Speaker 1: to the warrant or option to buy common shares with 272 00:14:15,160 --> 00:14:18,280 Speaker 1: all the risks attendant. Now, I've already read three articles 273 00:14:18,320 --> 00:14:21,600 Speaker 1: which show that he's an evil Wall Street guy explained 274 00:14:21,640 --> 00:14:27,600 Speaker 1: to our global audience the process of a financier bowing 275 00:14:27,720 --> 00:14:31,320 Speaker 1: out a bank at a time of gravest need, including 276 00:14:31,400 --> 00:14:35,200 Speaker 1: using Jones Day and people like you. They're allowed to 277 00:14:35,320 --> 00:14:37,960 Speaker 1: cash in down the road, aren't they. That's part of 278 00:14:38,040 --> 00:14:40,640 Speaker 1: the game. Yeah, that's what they purchased at the time 279 00:14:40,680 --> 00:14:44,320 Speaker 1: of the bailout, was that this option in essence to 280 00:14:44,440 --> 00:14:47,480 Speaker 1: convert uh to take the preferred and to go into 281 00:14:47,520 --> 00:14:49,880 Speaker 1: the common. And that was the bet. Is that the 282 00:14:49,960 --> 00:14:53,280 Speaker 1: common would increase in value. Now that it has, and 283 00:14:53,360 --> 00:14:56,440 Speaker 1: now that the stress tests have been basically passed, the 284 00:14:56,760 --> 00:14:59,200 Speaker 1: assumption is there there's a lot more upside in it. 285 00:14:59,440 --> 00:15:02,480 Speaker 1: We are ten years on from this financial crisis. You 286 00:15:02,560 --> 00:15:05,000 Speaker 1: and I remember different sweat. I was doing media and 287 00:15:05,000 --> 00:15:09,960 Speaker 1: interviewing people flatten the back careers ending you were advising clients. 288 00:15:10,600 --> 00:15:14,880 Speaker 1: And the common feature of O seven and seventeen is 289 00:15:15,120 --> 00:15:18,960 Speaker 1: Main Street doesn't get Wall Street. How do we have 290 00:15:19,160 --> 00:15:23,120 Speaker 1: main Street understand you can't save the day in oh 291 00:15:23,280 --> 00:15:26,040 Speaker 1: seven unless you give the bacon down, you know, you 292 00:15:26,120 --> 00:15:30,000 Speaker 1: get the reward in seventeen. Well, there's there's obviously short memories. 293 00:15:30,080 --> 00:15:32,680 Speaker 1: But back in two thousand seven, who was going to 294 00:15:32,760 --> 00:15:35,040 Speaker 1: bail out Bank of America? Who was going to do 295 00:15:35,120 --> 00:15:37,160 Speaker 1: all this stuff? It was people who had confidence in 296 00:15:37,200 --> 00:15:40,000 Speaker 1: the future. They would make a bet and hope, hope 297 00:15:40,040 --> 00:15:43,000 Speaker 1: that would pay off. I mean, going back to those times, 298 00:15:43,560 --> 00:15:44,920 Speaker 1: we thought we were all going to be eating out 299 00:15:44,920 --> 00:15:47,400 Speaker 1: of dumpsters and we're not. And and that was a 300 00:15:47,480 --> 00:15:51,360 Speaker 1: big part of the equation. So it's easy in hindsight 301 00:15:51,440 --> 00:15:53,880 Speaker 1: to be critical just because the bet paid off, But 302 00:15:54,000 --> 00:15:56,360 Speaker 1: that was the bat. What is the news that we 303 00:15:56,400 --> 00:15:59,000 Speaker 1: got yesterday about six more partners buying Staples from six 304 00:15:59,040 --> 00:16:01,520 Speaker 1: point nine billion. Let's tell us about the state of retail. 305 00:16:01,560 --> 00:16:03,120 Speaker 1: We can dovetail that with the news that we got 306 00:16:03,160 --> 00:16:06,720 Speaker 1: about Amazon and Whole Foods as well. There still seems 307 00:16:06,720 --> 00:16:09,240 Speaker 1: to be some confidence in a brick and Watar enterprise. 308 00:16:09,320 --> 00:16:12,560 Speaker 1: Do you represent either party while we're involved in where 309 00:16:12,800 --> 00:16:16,200 Speaker 1: Staples as a client. So I'm not going to retails. 310 00:16:16,240 --> 00:16:19,960 Speaker 1: A fascinating story talked about Amazon Old Foods before. What 311 00:16:20,520 --> 00:16:23,480 Speaker 1: what is that? Is it a retail story, is it 312 00:16:23,560 --> 00:16:25,920 Speaker 1: a text story? Is it all the above? Is it 313 00:16:25,960 --> 00:16:28,520 Speaker 1: an activist story. It's a lot of things, but one 314 00:16:28,560 --> 00:16:32,240 Speaker 1: of the things is retails here to stay. So and 315 00:16:32,520 --> 00:16:35,400 Speaker 1: look at you know, everybody's down on Walmart, for example, 316 00:16:35,520 --> 00:16:38,400 Speaker 1: but Walmart has been doing a lot of acquisitions, including 317 00:16:38,440 --> 00:16:42,360 Speaker 1: of tech companies, and they're repositioning themselves for the future. 318 00:16:42,760 --> 00:16:46,680 Speaker 1: Do you suggest that the smaller companies? I mean, I 319 00:16:46,720 --> 00:16:49,520 Speaker 1: mean everybody makes the headlines with Mr Buffin and Veil 320 00:16:49,600 --> 00:16:54,840 Speaker 1: of South Africa. The hinds people that big mergers. Will 321 00:16:54,880 --> 00:16:57,280 Speaker 1: there be a lot of little mergers? Now? Has there 322 00:16:57,400 --> 00:17:00,320 Speaker 1: been a lot of little murger There's gonna be more? Yeah, 323 00:17:00,360 --> 00:17:02,680 Speaker 1: I think so. I mean it's a it's an interesting 324 00:17:02,800 --> 00:17:07,159 Speaker 1: time because with equity values going up, up up, you know, 325 00:17:07,240 --> 00:17:09,240 Speaker 1: if you're a seller or you're thinking, well, is this 326 00:17:09,320 --> 00:17:11,440 Speaker 1: the right time or is I'm not so sure? So 327 00:17:11,680 --> 00:17:14,680 Speaker 1: there's a little bit of people holdback on that. But 328 00:17:14,880 --> 00:17:18,720 Speaker 1: you look at spaces where there's you know, a secular 329 00:17:18,840 --> 00:17:23,320 Speaker 1: change going on retail. Possibly we're gonna have a replay 330 00:17:23,359 --> 00:17:25,440 Speaker 1: and oil and gas in this country in terms of 331 00:17:25,520 --> 00:17:27,960 Speaker 1: what's going on with the pricing. You know, one of 332 00:17:28,000 --> 00:17:30,480 Speaker 1: the things you can do is consolidate, and you know 333 00:17:30,960 --> 00:17:35,680 Speaker 1: we're gonna see tons of consolidation going forward. Um. The 334 00:17:36,080 --> 00:17:38,879 Speaker 1: other element of all of this is that the I 335 00:17:39,040 --> 00:17:43,560 Speaker 1: p O market remains pretty choppy. The action the SEC 336 00:17:43,720 --> 00:17:47,119 Speaker 1: took yesterday, which is designed to stimulate more of that, 337 00:17:47,400 --> 00:17:50,080 Speaker 1: that stuff, I think isn't a sign of that. And 338 00:17:50,480 --> 00:17:51,960 Speaker 1: one of the things about the world we live in 339 00:17:52,080 --> 00:17:53,440 Speaker 1: is somebody makes an I p O and all of 340 00:17:53,440 --> 00:17:56,160 Speaker 1: a sudden, everybody's taking pot shots at the company. Even 341 00:17:56,200 --> 00:17:59,040 Speaker 1: people who haven't read the perspectives have a view on whether, 342 00:17:59,560 --> 00:18:01,640 Speaker 1: you know, should be public or not. So we'll see, 343 00:18:01,680 --> 00:18:05,480 Speaker 1: we'll see. But yeah, in this environment, there has to 344 00:18:05,560 --> 00:18:07,560 Speaker 1: be M and A in a lot of spaces because 345 00:18:07,600 --> 00:18:10,879 Speaker 1: there just has to be rationalization. We're here with Bob Profuse, 346 00:18:10,880 --> 00:18:12,280 Speaker 1: a global chair of M and A at Jones Day. 347 00:18:12,280 --> 00:18:14,840 Speaker 1: He's in our bloombical eleven three O Studios in New York. 348 00:18:14,960 --> 00:18:17,119 Speaker 1: Let me ask you about the political landscape here. We 349 00:18:17,160 --> 00:18:19,679 Speaker 1: saw the dissolution, the breaking up of a deal yesterday 350 00:18:19,720 --> 00:18:22,560 Speaker 1: involving Walgreens, Boots Alliance, and Right and just taking a 351 00:18:22,600 --> 00:18:24,600 Speaker 1: step back from that, it seems like those two companies 352 00:18:24,640 --> 00:18:30,360 Speaker 1: were Yeah, he represents all three, including the FTC, which 353 00:18:30,359 --> 00:18:33,040 Speaker 1: I'm about to vend it here. There there are subsets here. 354 00:18:33,080 --> 00:18:35,360 Speaker 1: The FTC was not going to go along with this deal. Again, 355 00:18:35,400 --> 00:18:37,119 Speaker 1: let's take a step back just to look at what 356 00:18:37,240 --> 00:18:40,479 Speaker 1: the regulatory landscape looks like in Washington. Uh, and today. 357 00:18:40,720 --> 00:18:43,800 Speaker 1: How different is it under this administration than it was previously. Well, 358 00:18:43,880 --> 00:18:46,280 Speaker 1: the proofs in the pudding, but there's a sense that 359 00:18:46,400 --> 00:18:52,120 Speaker 1: it's very different. Um Uh. The administration, the Obama administration 360 00:18:52,240 --> 00:18:57,480 Speaker 1: had gotten pretty aggressively any merger, particularly not surprisingly and 361 00:18:57,600 --> 00:19:01,960 Speaker 1: businesses that have direct a consumer elements. Now, the assumption 362 00:19:02,080 --> 00:19:04,080 Speaker 1: is it's better. I mean, it's a little unpredictable. Don't 363 00:19:04,119 --> 00:19:07,200 Speaker 1: forget candidate Trump came out against the Time Warner deal 364 00:19:07,880 --> 00:19:09,920 Speaker 1: when it was a candidate. It's hard to it's hard 365 00:19:09,920 --> 00:19:12,560 Speaker 1: to know for certain, and of course that deal is 366 00:19:12,640 --> 00:19:15,240 Speaker 1: really on the prior watch, so we'll have to see. 367 00:19:15,280 --> 00:19:17,800 Speaker 1: But the assumption is, at least it can't be worse. 368 00:19:18,240 --> 00:19:21,240 Speaker 1: What's a tougher thing to overcome you draw a distinction 369 00:19:21,280 --> 00:19:24,719 Speaker 1: here between political attention and regulatory scrutiny. When you're when 370 00:19:24,760 --> 00:19:27,080 Speaker 1: you're trying to broke reveal, what's what's a bigger barrier 371 00:19:27,359 --> 00:19:30,880 Speaker 1: regulatory scrutiny by far, I mean many deals have get 372 00:19:31,320 --> 00:19:35,280 Speaker 1: Congress people write letters and make speeches and get sound bites. 373 00:19:35,800 --> 00:19:38,280 Speaker 1: That usually doesn't move the needle very much, but it's 374 00:19:38,320 --> 00:19:41,520 Speaker 1: really what the regulators do here and in the EU 375 00:19:42,000 --> 00:19:45,320 Speaker 1: UM and increasingly in a couple of outlier jurisdictions. I 376 00:19:45,320 --> 00:19:47,320 Speaker 1: don't want to get in trouble with your General council. 377 00:19:48,080 --> 00:19:52,720 Speaker 1: You are the general council who when you say the regulators, 378 00:19:53,320 --> 00:19:57,960 Speaker 1: who are those guys? Are they? Ex? Jones Day associates 379 00:19:58,040 --> 00:20:01,600 Speaker 1: and partners? Are they? Are they? Years? Are they? I 380 00:20:01,680 --> 00:20:03,960 Speaker 1: think to a large part of our audience when people 381 00:20:04,040 --> 00:20:07,520 Speaker 1: say the regulators, we don't know who they are, well, 382 00:20:07,560 --> 00:20:10,040 Speaker 1: that's a That's actually an important point because the people 383 00:20:10,080 --> 00:20:14,320 Speaker 1: who really investigate are not people who change when the 384 00:20:14,320 --> 00:20:18,640 Speaker 1: administration changes. These are career people who are generally hard working, 385 00:20:19,119 --> 00:20:23,959 Speaker 1: competent people, very often with legal backgrounds. Sometimes not they 386 00:20:24,240 --> 00:20:26,520 Speaker 1: they are. They do the investigation on the people at 387 00:20:26,560 --> 00:20:28,680 Speaker 1: the top. They turn over and there are people from 388 00:20:28,760 --> 00:20:32,200 Speaker 1: firms like mine and others that that change over time. 389 00:20:32,720 --> 00:20:35,920 Speaker 1: But the real people are that the staff people. They're consistent. 390 00:20:36,640 --> 00:20:38,440 Speaker 1: Some of them are true believers, and that can be 391 00:20:38,520 --> 00:20:40,560 Speaker 1: a problem if you're trying to get something past them. 392 00:20:41,240 --> 00:20:45,760 Speaker 1: But but they're they're they're faceless, but very competent, good people, 393 00:20:45,800 --> 00:20:47,800 Speaker 1: true believers. Is from the X files for those of 394 00:20:47,840 --> 00:20:51,960 Speaker 1: you younger. If you go from administration A to administration B, 395 00:20:52,920 --> 00:20:58,760 Speaker 1: those regulators don't change. So who makes administration A different 396 00:20:58,800 --> 00:21:01,800 Speaker 1: from administration? Be the president or is it six people 397 00:21:01,840 --> 00:21:03,920 Speaker 1: that we don't know their names? No, but it would 398 00:21:03,960 --> 00:21:06,000 Speaker 1: be the head of the FTC have to be named 399 00:21:06,160 --> 00:21:09,959 Speaker 1: really yeah, that direction. Yeah, ahead of the Department of Justice, 400 00:21:10,000 --> 00:21:13,920 Speaker 1: any trust division. It's people who are who you know 401 00:21:14,119 --> 00:21:17,800 Speaker 1: of UM and they articulate policy. They don't it's not 402 00:21:17,920 --> 00:21:19,960 Speaker 1: like they go dictate things, but they start giving you 403 00:21:20,440 --> 00:21:23,360 Speaker 1: push back from the regulators. Does there's their staff say 404 00:21:23,400 --> 00:21:25,879 Speaker 1: on a given drug transaction like the one where you 405 00:21:25,960 --> 00:21:28,639 Speaker 1: represent right AID? Do they does the regulators all of 406 00:21:28,640 --> 00:21:30,080 Speaker 1: a sudden they come in one day in the Jones 407 00:21:30,200 --> 00:21:33,119 Speaker 1: date people say, WHOA, these people have all changed to 408 00:21:33,280 --> 00:21:35,760 Speaker 1: some degree. But but when they when the people that 409 00:21:35,880 --> 00:21:38,840 Speaker 1: we're talking about have a point of view. They've got 410 00:21:38,920 --> 00:21:40,920 Speaker 1: to put it, make, push it up the ladder, and 411 00:21:41,000 --> 00:21:44,159 Speaker 1: the decisions about whether to challenge something are made at 412 00:21:44,200 --> 00:21:48,359 Speaker 1: the top, so there is an effect because it's basically fascinating. 413 00:21:48,359 --> 00:21:52,040 Speaker 1: They've got the veto very We started off this busy 414 00:21:52,119 --> 00:21:54,920 Speaker 1: week talking about competition in Europe and light of the 415 00:21:55,040 --> 00:21:58,440 Speaker 1: announcement made by the EU Competition Commissioner regarding Google. I 416 00:21:58,520 --> 00:22:00,159 Speaker 1: want your practice as a global one. I'm if you 417 00:22:00,160 --> 00:22:03,800 Speaker 1: could help us understand the particular flavor of concerned surrounding 418 00:22:03,880 --> 00:22:05,879 Speaker 1: orders and acquisitions in Europe. It does seem like a 419 00:22:05,960 --> 00:22:10,280 Speaker 1: very different place than than here. It's I think a 420 00:22:10,359 --> 00:22:12,480 Speaker 1: year ago you would have said, what's the most aggressive 421 00:22:12,560 --> 00:22:14,560 Speaker 1: any trust environment? You would have said the US. Now 422 00:22:14,560 --> 00:22:17,920 Speaker 1: you're gonna say it's Brussels. The EU has been is 423 00:22:18,000 --> 00:22:20,280 Speaker 1: aggressive is you know there are lots of true believers 424 00:22:20,400 --> 00:22:22,840 Speaker 1: there and there's some other countries. One of the things 425 00:22:22,880 --> 00:22:26,119 Speaker 1: about UM about M and A these days, it's like 426 00:22:26,200 --> 00:22:28,720 Speaker 1: all of business. It's globalized, and when you do a 427 00:22:28,800 --> 00:22:31,760 Speaker 1: transaction you'll end up with not just one or two, 428 00:22:31,880 --> 00:22:34,719 Speaker 1: but many places. You have to get a deal cleared 429 00:22:35,320 --> 00:22:39,080 Speaker 1: some of the plate. Some countries are less developed in 430 00:22:39,200 --> 00:22:43,359 Speaker 1: terms of predictability of their systems. China, India, places like that, 431 00:22:44,600 --> 00:22:48,840 Speaker 1: So it's it's much more difficult UM. But the EU, 432 00:22:49,080 --> 00:22:51,240 Speaker 1: without question, I think, is going to supplant the US. 433 00:22:51,600 --> 00:22:53,959 Speaker 1: Has the pace of dealmaking changed at all? We talk 434 00:22:54,000 --> 00:22:56,719 Speaker 1: about the change with the administration, just the changes generally. 435 00:22:57,280 --> 00:22:59,440 Speaker 1: Is it taking longer to two inca deal than in 436 00:22:59,480 --> 00:23:01,800 Speaker 1: the past. I'm not still sure. It's taken longer to 437 00:23:01,880 --> 00:23:03,800 Speaker 1: ink it, but it's sure taken longer to close it 438 00:23:04,000 --> 00:23:06,520 Speaker 1: because of these factors. UM. And you know, I think 439 00:23:06,560 --> 00:23:09,040 Speaker 1: about some of the deals in the news this week. 440 00:23:09,560 --> 00:23:12,159 Speaker 1: They're a year old. That's not uncommon to get a 441 00:23:12,320 --> 00:23:16,480 Speaker 1: global deal done or a directed consumer deal time. What 442 00:23:16,680 --> 00:23:19,280 Speaker 1: does smaller companies want to do? We you know, we 443 00:23:19,359 --> 00:23:21,480 Speaker 1: give all the ink to the big transactions in the 444 00:23:21,560 --> 00:23:25,960 Speaker 1: big names. Are your people flying around the country trying 445 00:23:26,040 --> 00:23:28,440 Speaker 1: to drum up business? Or is the phone ringing off 446 00:23:28,480 --> 00:23:32,320 Speaker 1: the hook in Manhattan there? It's of the pipeline right 447 00:23:32,359 --> 00:23:36,639 Speaker 1: now is really very active UM, including ranging from large 448 00:23:36,760 --> 00:23:40,880 Speaker 1: things to lots of smaller transactions there. I think there's 449 00:23:40,920 --> 00:23:45,440 Speaker 1: a sense among entrepreneurs and founders that things are good enough. 450 00:23:45,920 --> 00:23:48,720 Speaker 1: UM and and why not? Why not do it now 451 00:23:49,000 --> 00:23:52,480 Speaker 1: rather than hold out for another take up in multiples. 452 00:23:52,640 --> 00:23:54,280 Speaker 1: We do this once or twice a yearly. Let's do 453 00:23:54,320 --> 00:23:57,280 Speaker 1: it right now. I believe lawyers got out of law school. 454 00:23:57,560 --> 00:23:59,840 Speaker 1: When's the bar exam? Is? It is a bar exam 455 00:24:00,040 --> 00:24:03,760 Speaker 1: certain date this year in the summer, so they're all studied, David, 456 00:24:04,040 --> 00:24:07,639 Speaker 1: let's jump off here on law academics with Robert Profuseek. 457 00:24:08,800 --> 00:24:11,520 Speaker 1: I wonder we had the financial crisis, a lot of 458 00:24:11,560 --> 00:24:13,080 Speaker 1: people went to law school. There was a sense that 459 00:24:13,160 --> 00:24:16,119 Speaker 1: law schools were overcrowded. Two people too many people were going. 460 00:24:16,160 --> 00:24:17,720 Speaker 1: There was hard for them to land jobs afterwards. What 461 00:24:17,840 --> 00:24:22,480 Speaker 1: is the labor economy look like in corporate law right now? Well, 462 00:24:22,600 --> 00:24:26,160 Speaker 1: you still you know, it depends on the which level 463 00:24:26,200 --> 00:24:28,480 Speaker 1: you're looking at. Um. You know, the bigger firms still 464 00:24:28,560 --> 00:24:32,119 Speaker 1: have the ability to attract really competent people for for 465 00:24:32,280 --> 00:24:35,480 Speaker 1: fairly obvious reasons. But it's so much more you know, 466 00:24:35,680 --> 00:24:39,800 Speaker 1: diverse mosaic in terms of opportunities. UM. A lot of 467 00:24:39,800 --> 00:24:43,600 Speaker 1: people go to law school too, just broaden their horizons. 468 00:24:43,680 --> 00:24:45,840 Speaker 1: Some people go to fix up their balance sheets because 469 00:24:45,840 --> 00:24:49,280 Speaker 1: of their educational debt. There there's all sorts of reasons, Um, 470 00:24:49,960 --> 00:24:52,600 Speaker 1: it's it's just more complexes. Is there more lateral movement? 471 00:24:52,680 --> 00:24:57,200 Speaker 1: Now there's a fair amount of lateral movement um And 472 00:24:57,400 --> 00:24:59,400 Speaker 1: you know, and as a as an industry, we're we're 473 00:25:00,040 --> 00:25:03,000 Speaker 1: we're experiencing the same things that lots of businesses do 474 00:25:03,080 --> 00:25:06,240 Speaker 1: in terms of technology. Used to be you needed tennis 475 00:25:06,320 --> 00:25:10,240 Speaker 1: socialists for every partner. That pyramid is getting narrower because 476 00:25:10,280 --> 00:25:14,560 Speaker 1: of technology. So it's ten partners for one as it's conceivable. 477 00:25:14,680 --> 00:25:16,240 Speaker 1: I mean, the law firm of the future could be 478 00:25:16,320 --> 00:25:19,080 Speaker 1: all partners. Let me ask the dumb question of the day. 479 00:25:19,359 --> 00:25:23,399 Speaker 1: Do corporate attorneys M and A attorneys do? Do you 480 00:25:23,560 --> 00:25:27,840 Speaker 1: look at constitutional law reporting like a great greg store 481 00:25:27,920 --> 00:25:31,439 Speaker 1: and others? Is it like doctors where it's almost foreign 482 00:25:31,520 --> 00:25:33,720 Speaker 1: to you? Or when you go through law school, do 483 00:25:33,760 --> 00:25:36,760 Speaker 1: you have enough of a knowledge where you're very conversant 484 00:25:36,800 --> 00:25:39,720 Speaker 1: in the world of NOA Feldment and others. I think 485 00:25:39,800 --> 00:25:42,760 Speaker 1: you stay. You have to stay conversing because you have 486 00:25:42,960 --> 00:25:46,119 Speaker 1: to be you have to be a well rounded at 487 00:25:46,160 --> 00:25:48,920 Speaker 1: a certain level. If you're in the boardroom, you can't 488 00:25:48,960 --> 00:25:54,000 Speaker 1: be a very narrow person. So yeah, you do up 489 00:25:54,080 --> 00:25:56,480 Speaker 1: on all that stuff. There's no question about it. And 490 00:25:56,560 --> 00:25:59,840 Speaker 1: it isn't just you know, love of the law. It's 491 00:26:00,000 --> 00:26:03,320 Speaker 1: really relevant to the business. Interesting. Interesting, This has been wonderful, 492 00:26:03,400 --> 00:26:06,440 Speaker 1: Robert profuse, thank you so much greatly. I appreciate it. 493 00:26:06,880 --> 00:26:10,080 Speaker 1: An amazing week. Uh. Somebody had on Twitter. Mr Brown 494 00:26:10,440 --> 00:26:13,240 Speaker 1: had on on Twitter. Ninety eight billion and share buybacks 495 00:26:13,280 --> 00:26:17,359 Speaker 1: announced by banking this week. I believe that's the right 496 00:26:17,400 --> 00:26:21,360 Speaker 1: to the posts. Yeah, you know, everybody's just buying stuff back. 497 00:26:21,400 --> 00:26:31,720 Speaker 1: And of course Mr Buffett with his transactions runch you 498 00:26:31,840 --> 00:26:35,880 Speaker 1: by Bank of America, Mary Lynch with virtual reality, virtually 499 00:26:36,119 --> 00:26:41,359 Speaker 1: everything will change, discover opportunities in a transforming world VI 500 00:26:41,480 --> 00:26:46,000 Speaker 1: of a, mL dot Com, slash VR, Mary Lynch, Pierced 501 00:26:46,040 --> 00:26:54,520 Speaker 1: Fenner and Smith Incorporated. We need to get the central 502 00:26:54,560 --> 00:26:57,560 Speaker 1: banks here, David Gura with our next guests. But we 503 00:26:57,680 --> 00:27:01,280 Speaker 1: usually we bury the punchline, which is wheat and red 504 00:27:01,320 --> 00:27:04,040 Speaker 1: wheat particularly, and unfortunately we've got to start with that. 505 00:27:04,520 --> 00:27:07,160 Speaker 1: What did you do, Dennis corner the market on red 506 00:27:07,200 --> 00:27:10,480 Speaker 1: wheat just so you could get to the fourth Well 507 00:27:10,960 --> 00:27:15,240 Speaker 1: it it There really is a rather discouraging circumstance taking 508 00:27:15,280 --> 00:27:18,520 Speaker 1: place out in the Midwest. The the spring wheat crop, 509 00:27:18,680 --> 00:27:21,880 Speaker 1: not the hard red winter wheat, nor the soft red winter, 510 00:27:22,000 --> 00:27:24,200 Speaker 1: but the spring wheat crop is in very bad condition, 511 00:27:24,800 --> 00:27:27,480 Speaker 1: and the protein quality of the other two crops are 512 00:27:27,560 --> 00:27:31,760 Speaker 1: in difficult circumstances. So you have a bull market taking 513 00:27:31,800 --> 00:27:34,000 Speaker 1: place in wheat, which is unusual at this time of 514 00:27:34,040 --> 00:27:36,720 Speaker 1: the year. Normally this is the height of the winter 515 00:27:36,840 --> 00:27:40,400 Speaker 1: wheat harvest. Normally prices are under pressure. This year they're 516 00:27:40,520 --> 00:27:44,080 Speaker 1: they're going parabolically up. I've been bullish of wheat. I 517 00:27:44,160 --> 00:27:46,040 Speaker 1: think it's time to standard the sidelines for a day 518 00:27:46,080 --> 00:27:47,840 Speaker 1: or two though, because we have a big U s 519 00:27:47,920 --> 00:27:50,800 Speaker 1: d A crop report coming out today which historically has 520 00:27:50,840 --> 00:27:53,639 Speaker 1: been very volatible. Brave of you, I'm doing the deviation 521 00:27:53,720 --> 00:27:56,359 Speaker 1: analysis here because that's why Gartman speaks to me. He 522 00:27:56,440 --> 00:27:58,720 Speaker 1: knows I'm going to do that form. Dennis were out 523 00:27:58,760 --> 00:28:02,200 Speaker 1: the three point three standard deviation up on red wheat 524 00:28:02,800 --> 00:28:06,600 Speaker 1: on a weekly chart. Dennist who makes and who loses 525 00:28:06,720 --> 00:28:12,160 Speaker 1: money when you see a stochastic spike on a commodity? Well, 526 00:28:12,200 --> 00:28:15,000 Speaker 1: I mean, since commodities are some zero game, for every 527 00:28:15,080 --> 00:28:17,600 Speaker 1: long there is a short short, there is a long 528 00:28:18,200 --> 00:28:20,359 Speaker 1: which is which is not the same as in the 529 00:28:20,400 --> 00:28:22,399 Speaker 1: equities market. You don't have to have a short for 530 00:28:22,440 --> 00:28:26,160 Speaker 1: every long. So in the commodity futures game, what one 531 00:28:26,240 --> 00:28:28,760 Speaker 1: team loses the other team wins. There is no net 532 00:28:28,840 --> 00:28:31,960 Speaker 1: creation nor loss of wealth except for the amount of 533 00:28:32,040 --> 00:28:34,760 Speaker 1: the crop itself that is created or lost. But in 534 00:28:34,800 --> 00:28:37,720 Speaker 1: the futures themselves, there is no net creation of wealth 535 00:28:37,760 --> 00:28:41,000 Speaker 1: in either direction. We joke about the various varieties of 536 00:28:41,280 --> 00:28:43,520 Speaker 1: wheat and the keen, we forecasts and all of that. 537 00:28:43,640 --> 00:28:45,360 Speaker 1: But Dennis, let me ask you what you're going to 538 00:28:45,440 --> 00:28:47,400 Speaker 1: be looking for today when we get that crop report. 539 00:28:47,800 --> 00:28:49,520 Speaker 1: What what's most important about it to you? What are 540 00:28:49,520 --> 00:28:53,880 Speaker 1: you gonna be looking for? Well, there's the big problem 541 00:28:53,920 --> 00:28:56,600 Speaker 1: will be how much corn has it? Because this is 542 00:28:56,640 --> 00:28:58,840 Speaker 1: really a crop report for corn and soybeans. We will 543 00:28:58,880 --> 00:29:02,000 Speaker 1: be secondary. It'll be a it's an interesting question. Will 544 00:29:02,040 --> 00:29:04,320 Speaker 1: there have been for the first time in history more 545 00:29:04,360 --> 00:29:06,880 Speaker 1: acres planted the soybeans than had been planted to corn. 546 00:29:07,560 --> 00:29:10,960 Speaker 1: That's been really quite unusual. We've always had six seven 547 00:29:11,040 --> 00:29:14,160 Speaker 1: million more acres of corn corn planted. This year we 548 00:29:14,200 --> 00:29:16,640 Speaker 1: may actually have the same number of acres of corn 549 00:29:16,680 --> 00:29:20,600 Speaker 1: and soybeans. Very unusual, very atypical, and probably bearish of 550 00:29:20,680 --> 00:29:23,600 Speaker 1: the bean market on balance. And now we tried to 551 00:29:23,640 --> 00:29:26,760 Speaker 1: get back to more interesting matters. Garmon may quote folks 552 00:29:27,320 --> 00:29:31,520 Speaker 1: quote we are still confused unquote Uh, Dennis, what a 553 00:29:31,600 --> 00:29:34,760 Speaker 1: week for central banking. And I say this with great 554 00:29:34,840 --> 00:29:37,400 Speaker 1: respect you and I are trying to be students of history. 555 00:29:38,120 --> 00:29:44,480 Speaker 1: His coordinated action ever worked. I've never seen that conceit 556 00:29:44,680 --> 00:29:48,479 Speaker 1: ever be proved out, have you? Well, there have been 557 00:29:48,520 --> 00:29:52,680 Speaker 1: a few times when concerted coordinated action has occurred. For example, 558 00:29:52,760 --> 00:29:56,160 Speaker 1: the the the Swiss National Bank has has been concerted 559 00:29:56,320 --> 00:29:59,720 Speaker 1: le trying to keep and has been success successful and 560 00:30:00,040 --> 00:30:06,240 Speaker 1: being a Swiss frank down relative, that's unilateral. Yeah, I understand. 561 00:30:06,360 --> 00:30:11,640 Speaker 1: Has there been a collective, consolidated, uh, two sided event 562 00:30:12,080 --> 00:30:15,960 Speaker 1: in the past, Well, maybe after the Plaza agreement we 563 00:30:16,120 --> 00:30:19,920 Speaker 1: had concerted activity. But on balance, no, whenever you see 564 00:30:19,960 --> 00:30:22,320 Speaker 1: two groups trying to move something in one direction, they 565 00:30:22,400 --> 00:30:24,800 Speaker 1: usually fail. Truly. One of the more astonishing moments this 566 00:30:24,880 --> 00:30:26,880 Speaker 1: week was when Bloomberg News put out a piece looking 567 00:30:26,880 --> 00:30:29,080 Speaker 1: at market reaction to what Mario drag said during a 568 00:30:29,080 --> 00:30:31,840 Speaker 1: speech now three days ago in Portugal. What did you 569 00:30:31,920 --> 00:30:34,320 Speaker 1: make of what happened there? What what the president of 570 00:30:34,320 --> 00:30:35,880 Speaker 1: the ECB was saying at the time, and how it 571 00:30:35,960 --> 00:30:39,040 Speaker 1: was interpreted it was? It was rather interesting wasn't it, 572 00:30:39,120 --> 00:30:42,480 Speaker 1: Because when he first when he talked as if the 573 00:30:42,800 --> 00:30:45,200 Speaker 1: the e c B we're going to move quickly to 574 00:30:45,320 --> 00:30:49,080 Speaker 1: tighten monetary policy or at least to avoid further easing, 575 00:30:49,200 --> 00:30:52,880 Speaker 1: at least to avoid further experimentation with quantitative easing. The 576 00:30:53,040 --> 00:30:56,920 Speaker 1: the euro ran from what almost to one fourteen fifty 577 00:30:57,280 --> 00:30:59,240 Speaker 1: in the course of a few moments. Then you had 578 00:30:59,320 --> 00:31:02,280 Speaker 1: some people going on television saying, well, maybe the market 579 00:31:02,320 --> 00:31:06,000 Speaker 1: has overreacted. Members of the ECB Monetary Policy Committee themselves 580 00:31:06,400 --> 00:31:08,720 Speaker 1: coming out and saying, well, maybe the market is overreacted. 581 00:31:08,800 --> 00:31:11,640 Speaker 1: So then the euro fell from one fourteen back to 582 00:31:11,720 --> 00:31:14,760 Speaker 1: around one fifty or so, and now we're back close 583 00:31:14,840 --> 00:31:17,840 Speaker 1: to one fourteen and a half. It is a very confusing, 584 00:31:18,520 --> 00:31:21,760 Speaker 1: uh period of time, one that you know, I looked 585 00:31:21,800 --> 00:31:24,040 Speaker 1: through forty years of this. I've seen other confusing periods, 586 00:31:24,040 --> 00:31:26,880 Speaker 1: but I don't think I've ever seen as many contrary 587 00:31:27,080 --> 00:31:30,520 Speaker 1: comments coming from monetary policy officials as we have seen 588 00:31:30,640 --> 00:31:32,880 Speaker 1: this week. We're going to see that resistance tested soon. 589 00:31:32,960 --> 00:31:35,840 Speaker 1: Do you think I think one fifteen is going to 590 00:31:35,920 --> 00:31:38,640 Speaker 1: be tested? Perhaps this morning when we rushed up to 591 00:31:38,680 --> 00:31:42,400 Speaker 1: one five and got to one fourteen seventy yesterday that 592 00:31:42,600 --> 00:31:44,200 Speaker 1: might have been the test. But I do have a 593 00:31:44,720 --> 00:31:46,960 Speaker 1: feeling that one fifteen wants to be put on the board. 594 00:31:47,400 --> 00:31:49,440 Speaker 1: Markets have a strange way of going to what I've 595 00:31:49,440 --> 00:31:52,080 Speaker 1: always referred to as the obscene number, the one that 596 00:31:52,160 --> 00:31:55,000 Speaker 1: nobody can believe in a rally from one oh five 597 00:31:55,120 --> 00:31:56,960 Speaker 1: to one ten. Over the course of the two months, 598 00:31:57,120 --> 00:31:59,960 Speaker 1: maybe one of fifteen gets tested. I doubt it's able. 599 00:32:00,120 --> 00:32:03,160 Speaker 1: Push what's past there, We're gonna come back with Dennis 600 00:32:03,200 --> 00:32:06,840 Speaker 1: Gartman talk about the equity markets. Also, he's railing against 601 00:32:06,960 --> 00:32:10,960 Speaker 1: children that don't walk to school. Gartman is a ute 602 00:32:11,520 --> 00:32:13,960 Speaker 1: used to walk five miles to school. It was I 603 00:32:14,000 --> 00:32:16,880 Speaker 1: mean he walked across time zones. He walked like from 604 00:32:16,920 --> 00:32:19,920 Speaker 1: the Central time zone into the Eastern time zone out 605 00:32:19,960 --> 00:32:22,800 Speaker 1: in the hustings there to the west. Dennis, let's turn 606 00:32:22,840 --> 00:32:24,560 Speaker 1: to the stock market if we could. They were painting 607 00:32:24,640 --> 00:32:27,680 Speaker 1: the tape yesterday. You write in the letter what's going on? 608 00:32:29,440 --> 00:32:32,120 Speaker 1: It's an old term that the old garden in in 609 00:32:32,200 --> 00:32:34,640 Speaker 1: the stock market used to refer to when they when 610 00:32:34,760 --> 00:32:38,240 Speaker 1: when when you see the dow up sharply in the 611 00:32:38,960 --> 00:32:41,280 Speaker 1: f and p up a little bit less sharply, and 612 00:32:41,360 --> 00:32:44,640 Speaker 1: the navstack up even less sharply or on the down side. 613 00:32:45,040 --> 00:32:47,400 Speaker 1: When you see the Dow down only a little bit, 614 00:32:47,760 --> 00:32:52,200 Speaker 1: but the broader market indices down rather dramatically. The public 615 00:32:52,280 --> 00:32:54,240 Speaker 1: tends to pay attention to only what the Dow is 616 00:32:54,280 --> 00:32:57,680 Speaker 1: doing and loses attention to what the broader market is doing. 617 00:32:57,720 --> 00:33:00,960 Speaker 1: And when they're painting the tape, uh, it tends to 618 00:33:01,040 --> 00:33:03,959 Speaker 1: be a bearish market circumstance. And we've seen that happening 619 00:33:04,000 --> 00:33:06,280 Speaker 1: now over the course of the past several weeks. The 620 00:33:06,400 --> 00:33:08,120 Speaker 1: Dow is looking if you look at a chart of 621 00:33:08,120 --> 00:33:10,520 Speaker 1: the now, it looks okay. If you look at the 622 00:33:10,600 --> 00:33:13,320 Speaker 1: chart of the S ANDP, it looks demonstrably less positive. 623 00:33:13,360 --> 00:33:14,840 Speaker 1: And if you look at a chart of the NASADAC, 624 00:33:14,920 --> 00:33:18,640 Speaker 1: it looks positively negative. So that's that's an example of 625 00:33:18,680 --> 00:33:21,440 Speaker 1: the tape painting, and they're doing it and it's not bullish. 626 00:33:21,760 --> 00:33:23,720 Speaker 1: What's what's the catalyst that's led to this sort of 627 00:33:23,800 --> 00:33:28,600 Speaker 1: a bearish tendency. Think, well, I think ostensibly it's going 628 00:33:28,640 --> 00:33:31,040 Speaker 1: to be higher interest rates rising around the world, not 629 00:33:31,160 --> 00:33:33,680 Speaker 1: just here in the United States. But as we talked earlier, 630 00:33:33,760 --> 00:33:38,000 Speaker 1: the ECB is considering reducing the the it's it's experiment 631 00:33:38,080 --> 00:33:40,880 Speaker 1: with quantitative easing and has actually talked about raising rates. 632 00:33:41,320 --> 00:33:43,959 Speaker 1: The Canadians are talking about raising rates, the British are 633 00:33:44,000 --> 00:33:47,040 Speaker 1: talking about raising rates, and we are obviously on the 634 00:33:47,120 --> 00:33:49,520 Speaker 1: move toward raising rates. So I think that's really what 635 00:33:49,880 --> 00:33:53,240 Speaker 1: that's the primary driving force between behind a barish circumstance 636 00:33:53,280 --> 00:33:56,200 Speaker 1: in the equities marketing when the stars aligne which in 637 00:33:56,480 --> 00:34:01,400 Speaker 1: the world of investments, when dougcass and Dennis Gartment agree, Uh, Dennis, 638 00:34:01,480 --> 00:34:03,920 Speaker 1: we got the idea here of you shorting the market. 639 00:34:04,280 --> 00:34:05,960 Speaker 1: Does that mean I go out in my four oh 640 00:34:06,040 --> 00:34:09,200 Speaker 1: one k and sell everything. No, it doesn't, and and 641 00:34:09,280 --> 00:34:12,800 Speaker 1: that would be the and archetypically bad thing to do. 642 00:34:13,719 --> 00:34:16,759 Speaker 1: I'm I'm getting barish of stocks, and but not dramatically 643 00:34:16,800 --> 00:34:18,960 Speaker 1: so yet, and I won't be until we actually see 644 00:34:19,040 --> 00:34:22,239 Speaker 1: more weakness developing. So I'm actually buying puts, which is 645 00:34:22,360 --> 00:34:26,279 Speaker 1: the least barish position one can take. If you're if 646 00:34:26,280 --> 00:34:28,400 Speaker 1: you're the public and you're long in your four oh 647 00:34:28,480 --> 00:34:32,120 Speaker 1: one k, maybe you sell some calls, maybe you buy 648 00:34:32,160 --> 00:34:35,360 Speaker 1: a few puts, Maybe you simply reduce your exposure a 649 00:34:35,400 --> 00:34:38,280 Speaker 1: little bit. It would be premature, however, to tell anybody 650 00:34:38,320 --> 00:34:41,040 Speaker 1: go out and sell everything. That would be ill advised. 651 00:34:41,080 --> 00:34:43,480 Speaker 1: On my part, and I won't do that, Dennis Gartman. 652 00:34:43,520 --> 00:34:45,279 Speaker 1: That was a clinic on painting the tape. It was 653 00:34:45,360 --> 00:34:48,000 Speaker 1: really very clear and really well said. Yesterday, folks, we 654 00:34:48,080 --> 00:34:51,560 Speaker 1: talked about a concept called position sizing, which in my 655 00:34:51,680 --> 00:34:55,359 Speaker 1: speeches I call how much inness. A guy named Van 656 00:34:55,480 --> 00:34:58,359 Speaker 1: Tharpe wrote a brilliant chapter in this umpteen years ago. 657 00:34:58,960 --> 00:35:01,800 Speaker 1: Mr Gartman, you do clinic in your newsletter this morning 658 00:35:02,360 --> 00:35:06,200 Speaker 1: about what's Ed Thorpe would call anti Martingale theory, which is, 659 00:35:06,280 --> 00:35:09,280 Speaker 1: if you put a trade in place, let's say short stocks, 660 00:35:10,120 --> 00:35:15,360 Speaker 1: you add to your position as your trade is successful, 661 00:35:16,160 --> 00:35:20,280 Speaker 1: unlike doing the other way. Explain why people are wrong 662 00:35:20,880 --> 00:35:23,759 Speaker 1: when they add to their position if all of a 663 00:35:23,880 --> 00:35:28,480 Speaker 1: sudden the trade goes against them. It's it's very simple 664 00:35:28,600 --> 00:35:31,120 Speaker 1: in life generally, if you do more of that which 665 00:35:31,200 --> 00:35:33,520 Speaker 1: has been working and less of that which has not, 666 00:35:34,080 --> 00:35:37,600 Speaker 1: you will succeed. And that's all I would advocate. If 667 00:35:37,640 --> 00:35:40,280 Speaker 1: you find yourself being long of a stock at fifteen 668 00:35:40,320 --> 00:35:43,160 Speaker 1: and it goes to twenty, you probably should buy more 669 00:35:43,280 --> 00:35:45,920 Speaker 1: because the market is telling you that you're right. If 670 00:35:45,960 --> 00:35:47,879 Speaker 1: you buy a stock at forty five and it goes 671 00:35:47,960 --> 00:35:51,480 Speaker 1: to forty, you probably should at least do less because 672 00:35:51,520 --> 00:35:53,880 Speaker 1: the market is telling you that you're wrong. The market 673 00:35:54,000 --> 00:35:57,440 Speaker 1: is the sum total of the wisdom of everybody trading 674 00:35:57,480 --> 00:36:00,560 Speaker 1: in it, and how dare you argue with that wisdom? 675 00:36:00,680 --> 00:36:03,120 Speaker 1: So I think it's just a very simple notion to 676 00:36:03,200 --> 00:36:05,560 Speaker 1: say I want to do more of that which has 677 00:36:05,640 --> 00:36:08,279 Speaker 1: been working, less of that which has not. It works 678 00:36:08,320 --> 00:36:11,440 Speaker 1: in life, it works in trading, it works in investing. Dennis, 679 00:36:11,440 --> 00:36:13,480 Speaker 1: I always value your perspective on gold. We had this 680 00:36:13,600 --> 00:36:16,080 Speaker 1: moment this week where gold really dropped, our colleague Bob 681 00:36:16,160 --> 00:36:17,759 Speaker 1: mood saying it might have been a fat finger. Of course, 682 00:36:17,760 --> 00:36:20,080 Speaker 1: there are a lot of reports looking into not my 683 00:36:20,200 --> 00:36:25,600 Speaker 1: fact finger. Did you think it was what transpired earlier 684 00:36:25,680 --> 00:36:28,040 Speaker 1: this week when it comes to gold, I actually think 685 00:36:28,080 --> 00:36:32,439 Speaker 1: it was Venezuela selling gold. Interesting and and I say 686 00:36:32,520 --> 00:36:35,000 Speaker 1: that because two days later we find out that the 687 00:36:35,080 --> 00:36:37,520 Speaker 1: Venezuelans had to buy or didn't have to buy, but 688 00:36:37,640 --> 00:36:41,680 Speaker 1: we're finally able to buy sixteen million barrels of various 689 00:36:41,719 --> 00:36:44,920 Speaker 1: types of fuels or dilu want as it's called. They need. 690 00:36:45,040 --> 00:36:49,680 Speaker 1: Venezuela needs to to blend it's rather crappy asphalt that 691 00:36:49,760 --> 00:36:52,000 Speaker 1: it has, which has an abundant supply of it with 692 00:36:52,200 --> 00:36:54,680 Speaker 1: better with better quality. But nobody has been willing to 693 00:36:54,760 --> 00:36:58,120 Speaker 1: sell Venezuela better quality fuels because they didn't think they 694 00:36:58,120 --> 00:37:02,000 Speaker 1: would get paid. So Venezuela has had no choice sell assets, 695 00:37:02,120 --> 00:37:04,560 Speaker 1: and they sold goal. I think the two, the two 696 00:37:04,640 --> 00:37:07,279 Speaker 1: things happening within two days of one another, indicate to 697 00:37:07,320 --> 00:37:10,759 Speaker 1: me that that seller was probably Venezuela. Dennis. One final 698 00:37:10,920 --> 00:37:14,440 Speaker 1: question and a question said with respect for our Kevin Surly, 699 00:37:14,560 --> 00:37:17,919 Speaker 1: Marty Shanker and others in Washington. We have travel ban, 700 00:37:18,680 --> 00:37:21,719 Speaker 1: we have healthcare. I know you're experienced in this with 701 00:37:21,760 --> 00:37:25,319 Speaker 1: a chintuck you had two years ago. Dennis, I really 702 00:37:25,400 --> 00:37:28,920 Speaker 1: want to know if the zaney nous of our combined 703 00:37:29,040 --> 00:37:33,680 Speaker 1: collective Washington affects what you do with your money? Does it? 704 00:37:33,960 --> 00:37:37,560 Speaker 1: It does, It does, and it is zany. It is 705 00:37:37,800 --> 00:37:41,280 Speaker 1: as confused and confusing as we have ever seen, tweet 706 00:37:41,400 --> 00:37:45,359 Speaker 1: tweets coming out, attacks being made. If you don't get 707 00:37:45,600 --> 00:37:48,799 Speaker 1: less involved, I think you're doing yourself a disservice. These 708 00:37:48,840 --> 00:37:53,480 Speaker 1: are terribly confusing times. Now, we always lived through confusing times, 709 00:37:53,600 --> 00:37:56,919 Speaker 1: but perhaps it's just that we are more because there's 710 00:37:57,000 --> 00:38:00,280 Speaker 1: more of these confusing times available to us in the media. 711 00:38:00,719 --> 00:38:02,719 Speaker 1: Maybe we're just aware of them more than we had 712 00:38:02,800 --> 00:38:05,600 Speaker 1: been in the past. But these are indeed confusing times, 713 00:38:05,640 --> 00:38:09,120 Speaker 1: and I think exposing oneself to the to the equities 714 00:38:09,160 --> 00:38:13,000 Speaker 1: market slightly less is a is a reasonable, rational and 715 00:38:13,239 --> 00:38:15,719 Speaker 1: rational and copper thing to do. Dennis Garment, thank you 716 00:38:15,800 --> 00:38:17,600 Speaker 1: so much the Garment letter, and of course I would 717 00:38:17,640 --> 00:38:21,360 Speaker 1: mention that, unlike so many, Mr Garbin actually shows his 718 00:38:21,520 --> 00:38:25,200 Speaker 1: trades on the back of his news letter, Unlike so 719 00:38:25,480 --> 00:38:37,560 Speaker 1: very few. Thanks for listening to the Bloomberg Surveillance podcast. 720 00:38:38,040 --> 00:38:43,239 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 721 00:38:43,360 --> 00:38:47,239 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom 722 00:38:47,400 --> 00:38:51,680 Speaker 1: Keene David Gura. Is that David Gura? Before the podcast? 723 00:38:52,040 --> 00:39:06,520 Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio, brought 724 00:39:06,600 --> 00:39:10,120 Speaker 1: you by Bank of America. Mery Lynch. With virtual reality, 725 00:39:10,400 --> 00:39:15,760 Speaker 1: virtually everything will change. Discover opportunities in a transforming world. 726 00:39:16,200 --> 00:39:20,480 Speaker 1: Be of a mL dot Com, slash VR, Mary Lynch, 727 00:39:20,600 --> 00:39:22,920 Speaker 1: Pierced Fenner and Smith Incorporated,