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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Always

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Speaker 1: with Michael McKee. Daily we bring you insight from the

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Speaker 1: best in economics, finance, investment, and international relations. Find Bloomberg

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Speaker 1: Surveillance on iTunes, SoundCloud, Bloomberg dot Com, and of course

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Speaker 1: on the Bloomberg. Gideon Rose with us with Foreign Affairs Magazine.

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Speaker 1: It's a Pentagon issue, it's a military issue, it's a

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Speaker 1: domestic international relations issue. What's the one article Secretary Clinton

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Speaker 1: and Mr Trump should read in your new issue? Well,

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Speaker 1: I would say that two articles are not gonna take

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Speaker 1: two of them. One is by Michael Hanlon and David

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Speaker 1: Petreus about the state of our military, and it's called

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Speaker 1: are Awesome Military and how it can be even better? Uh?

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Speaker 1: And basically what they say is the military is in

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Speaker 1: pretty good shape now, but we need to invest strategically

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Speaker 1: for the long term, and that requires getting rid of

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Speaker 1: sequestration and budgeting over the long term in ways that

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Speaker 1: Congress currently isn't doing. The other thing is a piece

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Speaker 1: by Rushi Ganushi, the Islamist leader in Tunisia whose party

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Speaker 1: and Nada has just changed from being formally Islamist to

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Speaker 1: being Muslim democrats. And if if the Arab spring has

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Speaker 1: had one bright spot, it's Tunisia. And so if we

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Speaker 1: can keep the Tunisian positive experiment going, they now have

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Speaker 1: the hopes of moderate Islam and democracy resting on it.

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Speaker 1: This is a great getting. We can completely rip up

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Speaker 1: the script just with the first question we've got. Let's

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Speaker 1: go back to Michael O'Hanlon, who, to me, within your

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Speaker 1: game owns a phrase hard power to find for audience,

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Speaker 1: the soft power heard power future of our military and

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Speaker 1: our foreign policy. So hard power is about the actual

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Speaker 1: resources military forces and being and strong hard things you

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Speaker 1: can do. Soft power is about the power of your example,

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Speaker 1: getting well to want what you want. As Joe and

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Speaker 1: I originally said, the United States actually has a hell

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Speaker 1: of a lot of both hard power and soft power.

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Speaker 1: The what we need to do going forward is keeping

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Speaker 1: our hard power intact with sensible policies and not doing

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Speaker 1: dumb things that tarnish our example and screw things up

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Speaker 1: that undermine the power of the model we set for

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Speaker 1: the world. When we show the flag in the South

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Speaker 1: China Sea, I would suggest that's an application of both

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Speaker 1: soft power and hard power. But is there a risk

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Speaker 1: there that wasn't there for Mr Roosevelt plus years ago. Yes,

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Speaker 1: the challenge is not just showing the flag, but in

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Speaker 1: service of what so to the extent that we can

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Speaker 1: say we are the defenders not just of our own

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Speaker 1: national interests, but of the rule of law, of international order,

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Speaker 1: instability of essentially the law of the sea. Even though

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Speaker 1: we haven't ratified the treaty, we we make our power

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Speaker 1: legitimate in the eyes of the world when we defend

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Speaker 1: interests beyond our own. This is what Trump doesn't get.

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Speaker 1: He sees the world as a zero sum place. In fact,

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Speaker 1: since World War Two, foreign policy has been a team sport.

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Speaker 1: We play on behalf of our allies as well as ourselves.

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Speaker 1: That's what we're doing. And our power is important and

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Speaker 1: legitimate because it benefits not just us, but other nations

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Speaker 1: that will lecturely when there's at Berkeley College, good morning

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Speaker 1: to everybody at Berkeley College. This is not Berkeley by

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Speaker 1: the Bay. There across from the Oakland A's and the

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Speaker 1: Giants is Berkeley College in New York. A great set

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Speaker 1: of kids from I think like fifteen nations. And I

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Speaker 1: took him back to Atlantic Atlantic Charter and then we

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Speaker 1: wandered through George Bush Senior, gat Uruguay and all the

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Speaker 1: rest of it. Where is our new trade power? Secretary

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Speaker 1: Clinton talks about fair trade, I'm not sure what kind

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Speaker 1: of trade. Mr Trump talks about folding our business trade

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Speaker 1: with our foreign policy. So the fact is that practically

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Speaker 1: everybody who deals with trade thinks that we need t

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Speaker 1: p P, we need to move trade forward, and we

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Speaker 1: just can't talk about that now because of the domestic

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Speaker 1: politics of the issue. Raising trade policy now in an

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Speaker 1: electoral cycle like this one with a populist wave will

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Speaker 1: inevitably produce even more strident calls from all the candidates

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Speaker 1: to restrict trade because that's the political reality in the

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Speaker 1: US for the next three months. So don't talk about

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Speaker 1: trade at all. And then eventually, after the election, let's

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Speaker 1: hope people are sensible enough in Congress to move something

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Speaker 1: like TPP forward, even if it has some modifications. Are

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Speaker 1: we becoming an America of Wendell Wilkie went back when

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Speaker 1: we were innocent before December seven? No, No, I think

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Speaker 1: American farm. Look, the story that hasn't been told is

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Speaker 1: the extent to which American feim policy has been pretty

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Speaker 1: darned constant for seventy five years, and essentially what we're

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Speaker 1: trying to do is reverse the policies of the nineteen thirties,

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Speaker 1: in which individual, uncoordinated actions allowed economic crisis to spiral

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Speaker 1: and allowed politic goal aggression to triumph. We play on

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Speaker 1: behalf of a team. If we can continue the policies

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Speaker 1: we've put in place to make the world more global,

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Speaker 1: more integrated, more linked, we will benefit and our allies.

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Speaker 1: Maybe Jacob Winer and his classic Marcantile paper would call

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Speaker 1: it mercantilist international relations. If you're just joining us, Gideon

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Speaker 1: rose with us in celebration of the new Foreign Affairs,

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Speaker 1: I'll cut to the chase. It's the single magazine to read.

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Speaker 1: They got a whole great website thing going get a subscription.

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Speaker 1: It's it's big enough to hold your martini up. It's

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Speaker 1: got big print, and there's always two or three articles

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Speaker 1: that make you dramatically wiser about what we're doing today.

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Speaker 1: You mentioned Tunisia. I totally agree. I believe the gentleman

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Speaker 1: won the Nobel Peace Prize or whatever a year ago.

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Speaker 1: Why can't El c C in Egypt do a Tunisia.

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Speaker 1: That's what I don't get because he doesn't want to

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Speaker 1: because he's fundamentally an authoritarian. You have a deep state

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Speaker 1: UH in in some of these countries like Egypt that

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Speaker 1: has re asserted itself. It wants authoritarian control. It doesn't

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Speaker 1: want popular will represented, it doesn't want uh moderate Islamism

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Speaker 1: or any kind of Islamism anywhere near power and c. C.

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Speaker 1: Essentially is trying to resurrect the Mobaric regime UH and

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Speaker 1: that it looks like he's succeeded in the short term,

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Speaker 1: but in the long run, I think that's not the

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Speaker 1: way to go. When we would we look at Islamism,

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Speaker 1: which is a loaded phrase, I think of Magna decize,

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Speaker 1: great work on this else and many many can plan

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Speaker 1: many many others over the years. Most Americans are saying

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Speaker 1: that's great. But I just read that article about somebody

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Speaker 1: on an airplane who had somebody thrown up because they

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Speaker 1: looked like a little too much Islamism. Right now, can

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Speaker 1: we have a benevolent Islamism that will make America and

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Speaker 1: frankly other nations France comfortable. Yes? Well, this is the

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Speaker 1: pernicious thing about one of the most pernicious things about

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Speaker 1: the Trump candidacy, which is the Muslim band idea because

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Speaker 1: it's not about religion per se. It's about particular strands

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Speaker 1: within a very very large religious community, UH that are

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Speaker 1: deeply radical. So the United States cannot and should not

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Speaker 1: and does not have any problem with Islamism per se.

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Speaker 1: UH the even the letting Islamic values and ideas influence politics. UH,

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Speaker 1: it does have a problem with violence. It has a

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Speaker 1: problem with radicalism. And the challenges are their movements in

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Speaker 1: the Muslim world are deeply religious, but are not hostile

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Speaker 1: to the rule of law, not hostile to democracy and

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Speaker 1: racist like Tunisia are saying. Yes, we had a brilliant

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Speaker 1: conversation a few days ago with Nicholas Burns, one of

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Speaker 1: our public servants. It was about his Wellesley High School

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Speaker 1: outside Boston. I could talk to you about Horseman. Here

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Speaker 1: in New York, the Republican elites of the Gideon Rose

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Speaker 1: world are moving in mass to quiet or to support

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Speaker 1: Secretary Clinton. Do you perceive a foreign policy expertise or

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Speaker 1: industry that could assist President Trump. No, truly significant foreign

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Speaker 1: policy community or expertise has attracted has has turned to

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Speaker 1: Trump up to the election, and won't until the election happens.

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Speaker 1: Should Trump somehow win and then say, look, I've got

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Speaker 1: a govern The calculus would shift and there may be

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Speaker 1: some of these moderate Republican types who would take positions

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Speaker 1: in a Trump administration should he actually win. But but

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Speaker 1: that would be to serve the country and protected from

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Speaker 1: the boss, as it were. Uh, and that's not going

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Speaker 1: to happen before that. Never enough time, Gideon Rose, thank

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Speaker 1: you so much. Congratulations. It's a domestic issue. I love

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Speaker 1: when they do this. It's a domestic issue on international

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Speaker 1: relations at foreign affairs. I know the kids, the college

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Speaker 1: kids at home, and you're like, okay, it's August twelve,

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Speaker 1: when do they go back to school? Like is it

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Speaker 1: this Friday or next Friday? And she says no, it's

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Speaker 1: September six, And you go o MG. Give him an

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Speaker 1: issue of Foreigner Mayors Ferness Magazine and you just say

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Speaker 1: shut up and read this so there's no more money.

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Speaker 1: That's great interview with Marty Dempsey in it. By the way, Yeah,

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Speaker 1: well that's very timely as well. He was quite something

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Speaker 1: on the General's at the convention. This is Bloomberg. This

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Speaker 1: is a special treat. There are economists who owned franchises

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Speaker 1: buried in James Gorman's Morgan Stanley in the hallways and

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Speaker 1: down the office corridors. Ted Weissman holds court on productivity.

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Speaker 1: He writes the single best notes I know on productivity,

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Speaker 1: and he's killed at the last couple of days on

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Speaker 1: what he calls a grievously disappointing report. Ched what was

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Speaker 1: the biggest shock of the productivity report of a few

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Speaker 1: days ago. Well, I mean, I guess at this, and

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Speaker 1: it's kind of hard to be negatively surprised by the

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Speaker 1: productivity numbers because they've been coming in so poorly for

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Speaker 1: so long. But uh, we actually managed to get a

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Speaker 1: downside surprise, and the Q two numbers that came out

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Speaker 1: the other day, we were looking for a slightly positive

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Speaker 1: number instead of the Q two number came in down

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Speaker 1: point five, which ended up being the third straight uh

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Speaker 1: negative reading that we've seen on productivity growth, which manages

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Speaker 1: to exacerbate what's been a persistently poor trend throughout the

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Speaker 1: poster session period. The specific surprise DUE two was hours

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Speaker 1: work or we're stronger than was that was implied by

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Speaker 1: the employment report study force Ellen Zetner to change her

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Speaker 1: global American call their Greater American call. Well, what we

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Speaker 1: did was a year ago. When we extended our forecast

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Speaker 1: rise in the seventeen we took a broader look at

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Speaker 1: looking at the U. S economy that was at that

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Speaker 1: you know, at this point, not at full employment probably,

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Speaker 1: but getting pretty close at a five per center employment rates.

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Speaker 1: You look out one year, two years, three years. At

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Speaker 1: that starting point, the question then becomes less less a

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Speaker 1: cyclical outlook and more thinking about how fast can this

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Speaker 1: economy grow on a sustain basis going forward from that level.

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Speaker 1: And as we looked at the trending productivity to that point,

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Speaker 1: the drivers that we saw going forward, we materially lowered

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Speaker 1: our outlook for how fast the economy could grow back

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Speaker 1: then to one and a half percent, which is time

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Speaker 1: we got a lot of pushback from. But I think

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Speaker 1: as we've seen the numbers continue to come in to

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Speaker 1: the weak side, it's it's been validated. Yeah, I give

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Speaker 1: you the highest credit for that, and particularly Ellen Zentner's

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Speaker 1: courage to really go against the grain a year and

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Speaker 1: a half ago. Folks, this is going to be a

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Speaker 1: huge surveillance study going into the autumn productivity, how it

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Speaker 1: links into profitability, how it links into our standard of

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Speaker 1: living as well, just because the time I want to

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Speaker 1: touch it here and come back and talk about how

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Speaker 1: technology filters through to technological progress. Call it total factor productivity,

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Speaker 1: how technology filters through to the labor dynamic, and how

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Speaker 1: it filters through to the capital dynamic. Let's start with

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Speaker 1: the least talked about, the technology helps our capital be

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Speaker 1: more efficient. Where do we stand now on our capital

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Speaker 1: productivity given all the new Whisbane tools we've got, Well,

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Speaker 1: we've seen the so called total factor productivity that that

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Speaker 1: you discussed. That's the growth of the economy after you've

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Speaker 1: accounted for inputs and labor and capital. So it's it's

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Speaker 1: basically a measure of technical productivity, enhancing technological change. And

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Speaker 1: what we've seen in the past five ten years now

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Speaker 1: has been relatively sluggish growth, uh not, but not sluggish

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Speaker 1: really relative to where we were before the tech bubble.

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Speaker 1: You look at the ten years through or five years

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Speaker 1: the growth and so called total factor productivity technological enhancing

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Speaker 1: product productive enhancing technological change has grown zero point four

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Speaker 1: percent a year, which is very disappointing compared to one

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Speaker 1: and a half percent one six percent we were growing

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Speaker 1: in the tech bubble. But it's not different from the

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Speaker 1: eighties or the seventies of the nineties before that. But

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Speaker 1: bit quickly, yere capital services per hour worked. What part

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Speaker 1: of technology has forced us to such lousy capital investment? Well,

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Speaker 1: I think you look at the bus that we've seen

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Speaker 1: in Capex, which has been unprecedented as far as as

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Speaker 1: you mentioned the capital services, proper work, capital deepening, that's

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Speaker 1: that's an additional component of productivity growth. That's a net

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Speaker 1: negative now for for six solid years, which we've never

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Speaker 1: seen anything like that in prior U S history. And

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Speaker 1: I think you look at that as a reflection of

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Speaker 1: as Governor Mark Karney in the Bank of England described

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Speaker 1: it and as reading a recent speech as sort of

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Speaker 1: post post crisis economic stress disorder where you have extremely

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Speaker 1: high levels of economic polity, uncertainty, global uncertainty. It's for instance,

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Speaker 1: Lacot in London. I'm Tom Keenan New York and we

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Speaker 1: are honored to bring you Ted Weissman of Morgan Stanley.

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Speaker 1: His work on productivity is absolutely definitive. When you're at

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Speaker 1: a bar taed, not that you would ever do that,

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Speaker 1: and everybody's got their iPhone or maybe a few Samsungs

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Speaker 1: in their hand, do you for even a second hesitate

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Speaker 1: and go, I really can't measure road activity. Well. I

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Speaker 1: think that's an important point because if you look at

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Speaker 1: the focus of tech investment these days compared to the

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Speaker 1: to the nineties when we had a big boom in

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Speaker 1: productivity and tech was driving that, I think a lot

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Speaker 1: of the investments that were getting these days is that

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Speaker 1: kind of social media, smartphone apps that's not even really

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Speaker 1: necessarily aimed at enhancing productivity. It's leisure enhancing. Makes people's

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Speaker 1: lives more enjoyable, maybe, but it doesn't make them more

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Speaker 1: productive at work. It doesn't make the economy able to

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Speaker 1: produce more necessarily. So it's a fundamentally different kind of

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Speaker 1: of tech investment upside that we're seeing this time around

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Speaker 1: that that is, I think consistent with it. We're not

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Speaker 1: getting the kind of productivity um boost that we got

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Speaker 1: from the nineties and we were building out the internet infrastructure.

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Speaker 1: Is the is the U canny different? We have a

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Speaker 1: huge productivity problem here. Are the fundamentals the same to

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Speaker 1: the mirror the US or is there something else going on? Well?

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Speaker 1: The common the common threat across countries has been just

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Speaker 1: how bad CAPEX has been. If you don't get capital investment.

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Speaker 1: You don't increase capital equipment per worker, you you hurt

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Speaker 1: productivity growth. The interesting divergency in the US and the

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Speaker 1: rest of the world is that the US did see

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Speaker 1: this large acceleration temporary acceleration but quite large in the

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Speaker 1: second half of the nineties and the early half of

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Speaker 1: the two thousand's that the rest of the world did

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Speaker 1: not see. And we have not seen the catchup yet

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Speaker 1: to that um so called technological frontier that the US

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Speaker 1: has set in the nineties, and we're still waiting for

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Speaker 1: some catchup in Europe and other parts of the world

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Speaker 1: to that that didn't come through. But the world globally

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Speaker 1: looks quite sluggish from these from these on t FP

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Speaker 1: and on capital investment. And the problem is how do

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Speaker 1: you fix it? Even Mark Karney talked about productivity once

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Speaker 1: again ten days ago, right, yeah, and you were saying, look,

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Speaker 1: the UK trading relationship with euro but also the rest

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Speaker 1: of the world, along with productivity growth are really the

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Speaker 1: biggest determinants of long term economic prosperity. After breaks it,

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Speaker 1: how does he fix it? Well, I think the primary

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Speaker 1: thing that we can get going on the more cyclical.

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Speaker 1: It's been long lasting, but cyclical side of it's just

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Speaker 1: how bad the investment has been, so what can we

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Speaker 1: do there? It's it's a difficult problem because it seems

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Speaker 1: that uncertainty has been a depressing on investment, and better

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Speaker 1: policy maybe can help that. Fiscal policy has a role

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Speaker 1: to play, maybe structural policies, but there's just been this

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Speaker 1: cloud of uncertainty that has kept companies and consumers as

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Speaker 1: well very cautious and they're spending and just we're not

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Speaker 1: seeing that lifting now with the weakness in investment. How

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Speaker 1: do you respond to the decline, the seven eight year

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Speaker 1: decline in productivity from people that say, look, it's easy

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Speaker 1: to at least been a smart guy. The capital deepening,

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Speaker 1: the capital investment, it went abroad. Essentially we took our

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Speaker 1: investment and shifted it in a new globalization abroad. Is

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Speaker 1: that true? There's some of that. I think if you

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Speaker 1: look at what's happened with productivity in the US, a

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Speaker 1: lot of the tech equipment that drove the tech boom

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Speaker 1: in the nineties was made in the US and now

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Speaker 1: very little if it's made in the US. That does

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Speaker 1: damage that. But on the other hand, a lot of

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Speaker 1: the productivity enhancements that we've seen previously has been company

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Speaker 1: service sector, company, retail companies implementing tech advancements. You don't

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Speaker 1: have to make it in the US for it to work.

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Speaker 1: You just need more dynamic economy, You need more invest

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Speaker 1: You need the best stuff being put to put in

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Speaker 1: place to give it to workers to work with. Buried

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Speaker 1: in your brilliant report. And again, folks, we will not

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Speaker 1: send this out contact Morgan Stanley for Mr Weisman's good report.

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Speaker 1: We protect the copyright of all of our guests. In

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Speaker 1: your report, you make clear you can take the disappointing

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Speaker 1: productivity and run it forward to sub two percent GDP growth.

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Speaker 1: What are you going to write in six months more

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Speaker 1: of the same. Yeah, As I said, we we have

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Speaker 1: a long term GDT estimate of one and a half,

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Speaker 1: which which as soon as productivity gets up to one

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Speaker 1: and you have five point five percent labor force growth.

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Speaker 1: But wow, I mean, we're just seeing productivity undershooting that

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Speaker 1: for so long and getting worse recently. So it's not

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Speaker 1: one point five. It's actually even less. If productivity doesn't

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Speaker 1: pick up to one, which has been our baseline assumption here.

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Speaker 1: We are running at negative the past three quarters and

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Speaker 1: the five year trend has been point five. Um I

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Speaker 1: still think we can get some better capital spending over

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Speaker 1: a period of time. You can, you can get that

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Speaker 1: up somewhat, but it's it looks optim miss ticking and

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Speaker 1: relative to say the FED est a minute too, that's

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Speaker 1: building in a one and a half percent productivity trend implied,

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Speaker 1: that starts to look almost implausible as the longer this

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Speaker 1: productivity bus continues. How do we get capital spending up?

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Speaker 1: Is it just a matter of confidence, that's a big

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Speaker 1: part of it. Um Uh, it's hard to say. It's

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Speaker 1: a tricky problem, but it's been so bad for so long,

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Speaker 1: and here we are late in the cycle, and and

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Speaker 1: we've seen in the US three straight quarters now of

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Speaker 1: negative investment. So it's not like it's turning around imminently here.

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Speaker 1: But um, I think a good starting point would be

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Speaker 1: continued easy monetary policy. Um not slamming on the brakes

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Speaker 1: early from the FED. Fiscal policy would be helpful. If

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Speaker 1: gets an infrastructure spending would be a boost there, but

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Speaker 1: just something and it's hard to say what it would be,

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Speaker 1: but just clearing this thought of uncertainty that stepts is

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Speaker 1: so so cautious for so long. I want to you know,

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Speaker 1: focus really on the relationship between central bank I guess

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Speaker 1: QUEI or negative rates or whatever you you know, central

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Speaker 1: bank easy and the impact that has on capital spending.

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Speaker 1: There's a line of thought that says that the more

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Speaker 1: central banks do, the more CEO say, oh, you know,

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Speaker 1: they're looking at something that's much uglier than I'm looking at.

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Speaker 1: I'm not going to spend anything. So how what's the

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Speaker 1: fine line between the two. Well, I guess there's a

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Speaker 1: confidence issue there, but but I think I mean when

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Speaker 1: I look at what's happening with estimated neutral real rates

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Speaker 1: versus what's happening in the economy and where the setting

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Speaker 1: of policy is, We've seen as the past three quarters

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Speaker 1: in US declining investment, we've seen rising savings. The neutral

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Speaker 1: real rate is where the savings and investment schedules cross,

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Speaker 1: and Jared Yelling has talked about it being near zero.

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Speaker 1: And if you look at the past year, we have

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Speaker 1: declining investment, rising savings. If anything, it seems to be

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Speaker 1: falling along with the decline productivity. So I think it

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Speaker 1: just reflects that the stance of monster policy, as more

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Speaker 1: FED officials have been saying, it's just not as easy

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Speaker 1: as you might think looking at a near zero FED

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Speaker 1: funds rate, it's had. One of my three or four

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Speaker 1: great speeches of this crisis was Edmund Phelps of Columbia

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Speaker 1: University and dynamism to the Bank of International Settlements what

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Speaker 1: seems light years ago. Ned Phelps is looking for the

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Speaker 1: new new. Mark Andrees and is looking for the new new.

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Speaker 1: Allan Zentner is looking for the new new, and on

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Speaker 1: and on and on. For Ted Weason, what's the new

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Speaker 1: new that's gonna bail us out? Uh? Well, I think

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Speaker 1: I think the one area where it's it's been a

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Speaker 1: little weaker recently, but we have seen periods of decent

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Speaker 1: R and D growth in the U S economy is

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Speaker 1: the one area of investment that's been pretty strong in

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Speaker 1: this post crisis period. So now the hope would be,

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Speaker 1: and it's hard to say where it would come from,

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Speaker 1: but we'll get some breakthroughs that'll that'll drive productivity better

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Speaker 1: and companies will actually be willing to invest and and

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Speaker 1: spend on that. Where it comes from, it's hard to

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Speaker 1: just stay cloud to productivity friend or enemy. Well, I mean,

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Speaker 1: if it's if it's enhancing businesses productivity, it's helpful. It's

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Speaker 1: it's uh, if you can take an existing capital stock

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Speaker 1: and make it more efficient, that that should add to

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Speaker 1: your TFP. It made to press investment. This companies don't

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Speaker 1: need to buy more servers and etcetera. But that, yeah,

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Speaker 1: that's an area. You just can look at areas like that.

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Speaker 1: The problem is, thoughays A critical point that Professor Robert

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Speaker 1: Gordon has made is that some of these changes we're

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Speaker 1: talking about are at the margin. I mean, going to

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Speaker 1: the cloud from a Going from a from writing on

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Speaker 1: paper to a hard drive is a big change. Pointing

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Speaker 1: from hard drives to the servers as cloud, it's kind

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Speaker 1: of more incremental. Ted you said something, Okay, we're post crisis.

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Speaker 1: Are we really post crisis? Could you don't argue that

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Speaker 1: we're still in crisis? We're still in the eighth year

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Speaker 1: of crisis mode. Yeah, I mean, I guess that's the

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Speaker 1: point that the FED has kind of wavered on. They've

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Speaker 1: been talking for some time that what they've called persistent

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Speaker 1: headwinds from the crisis of the reason why the neutral

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Speaker 1: real rate is so low. But it's you know, we're

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Speaker 1: a decade past the peak of the housing prices bubble. Now, um,

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Speaker 1: it's becoming I think it's becoming harder to just write

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Speaker 1: off the weakness that we're seeing as as still a

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Speaker 1: lingering post crisis effect. There are some lingering post crisis

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Speaker 1: drags on mortgage credit availability, etcetera. But these trends in

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Speaker 1: falling neutral real rates and and a bit have that

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Speaker 1: have been associated with the weeks the same productivity. This

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Speaker 1: have been ongoing for decades and it's not necessarily just

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Speaker 1: it may have been exacerbated by the crisis, but demographic shifts,

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Speaker 1: saving shifts, investment shifts have been lowering neutral real rates

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Speaker 1: for thirty years now and it's it's still ongoing. Tell

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Speaker 1: me about in one final and all of this is

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Speaker 1: hinged off of hours work, an aggregate American hours worked,

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Speaker 1: And there's a lot of dynamics there, folks, which are

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Speaker 1: too many moving parts for Friday, But the bottom line

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Speaker 1: is ted the idea of hours worked is going up, up, up,

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Speaker 1: isn't it. Yeah, Well, the problem is that you know

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Speaker 1: we're getting we've got one GP growth basically over the

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Speaker 1: past year, and we've had negative prouctivity growth. So all

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Speaker 1: the growth and output that we've seen has been from

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Speaker 1: higher hours work contribution, which that you know, you run

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Speaker 1: out of steam eventually on that when you get to

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Speaker 1: a five percent employment rate or falling, you can drive

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Speaker 1: excess labor and put excess hours work to give you

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Speaker 1: better growth for a while. But once you get to

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Speaker 1: a full employment stance and then your demographic supporting modest

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Speaker 1: growth and labor force going forward, you better at productivity

429
00:22:45,640 --> 00:22:49,200
Speaker 1: or your overall GDP number, just simpler arithmetic on labor

430
00:22:49,200 --> 00:22:52,480
Speaker 1: force growth, flavor paructivity growth equals GDP is going to

431
00:22:52,560 --> 00:22:56,840
Speaker 1: be depressed. Thank you so much, Ted Weisman, with Morgan Stanley,

432
00:22:56,920 --> 00:23:00,920
Speaker 1: working with Allen Zentner and the entire Morgan's and League team,

433
00:23:00,960 --> 00:23:05,720
Speaker 1: absolutely definitive on the many moving parts of productivity. It's

434
00:23:05,760 --> 00:23:10,760
Speaker 1: at minimum a three ratio dynamic of capital, labor and

435
00:23:10,840 --> 00:23:15,000
Speaker 1: total factor productivity. A lot of moving parts in there,

436
00:23:15,040 --> 00:23:17,080
Speaker 1: a lot to think about. And we'll make this a

437
00:23:17,200 --> 00:23:22,159
Speaker 1: theme after the stunning report in the recent quarters of

438
00:23:22,240 --> 00:23:27,600
Speaker 1: disappointment in American productivity that was brilliant. This is Bloomberg.

439
00:23:42,480 --> 00:23:44,520
Speaker 1: You're gonna love this. Francing. I don't know if you've

440
00:23:44,560 --> 00:23:49,600
Speaker 1: ever met Dana Telsey, but Dana Telsey is lights out

441
00:23:50,000 --> 00:23:55,920
Speaker 1: on New York fashion and American fashion and global fashion

442
00:23:56,359 --> 00:24:00,360
Speaker 1: Dana Telsey with a Telsey Advisory Group wrote Absolute must

443
00:24:00,359 --> 00:24:02,760
Speaker 1: Read Stuff for Bear Sturns a few years ago on

444
00:24:02,880 --> 00:24:07,320
Speaker 1: retail Dana good Morning, Good Morning, Terry London closes a

445
00:24:07,400 --> 00:24:12,720
Speaker 1: hundred stores. I believe it's four of capacity. You in

446
00:24:12,840 --> 00:24:17,280
Speaker 1: your fiber Are Bergdorf Goodman from your family? Are the

447
00:24:17,359 --> 00:24:21,520
Speaker 1: Bergdorf Goodman's? Are the Macy's of the world? Are they dinosaurs?

448
00:24:22,640 --> 00:24:25,680
Speaker 1: I don't think they're dinosaurs. I just think they're reinventing themselves.

449
00:24:25,960 --> 00:24:29,199
Speaker 1: I think this reinvention is essential given that instead of

450
00:24:29,240 --> 00:24:31,760
Speaker 1: consumers going to the store, the store is now going

451
00:24:31,760 --> 00:24:35,119
Speaker 1: to the customer. And that's what it's It's basically making

452
00:24:35,160 --> 00:24:41,440
Speaker 1: everything topsy turvy in terms of isation, localization, personalization, customization,

453
00:24:41,480 --> 00:24:45,080
Speaker 1: and regionalization. That's what stores are figuring out. But when

454
00:24:45,080 --> 00:24:47,240
Speaker 1: you say they have to I mean they're not reinventing themselves,

455
00:24:47,240 --> 00:24:49,439
Speaker 1: but they have to change. It means that actually if

456
00:24:49,440 --> 00:24:51,920
Speaker 1: they don't change quickly enough, they are I mean, is

457
00:24:51,920 --> 00:24:53,920
Speaker 1: there a danger that some of these guys go bust

458
00:24:53,960 --> 00:24:57,680
Speaker 1: or they just stop sales? I think overall we've seen

459
00:24:57,720 --> 00:25:00,760
Speaker 1: sales slow at a bunch of the retailer. We've seen

460
00:25:00,800 --> 00:25:03,159
Speaker 1: apparel being weak. And one of the changes that you

461
00:25:03,240 --> 00:25:06,240
Speaker 1: just saw with all these department stores reporting earnings is

462
00:25:06,240 --> 00:25:09,359
Speaker 1: that apparel picked up. There was strength and apparel, whether

463
00:25:09,480 --> 00:25:12,080
Speaker 1: from Macy's or even whether it's two Cole's, and I

464
00:25:12,119 --> 00:25:15,280
Speaker 1: think that's encouraging. I think that what needs to change

465
00:25:15,359 --> 00:25:18,760
Speaker 1: is that we're seeing some of these retailers overall work

466
00:25:18,800 --> 00:25:22,040
Speaker 1: with vendors to figure out how do we make goods

467
00:25:22,080 --> 00:25:24,080
Speaker 1: be able to sell a full price, how do we

468
00:25:24,119 --> 00:25:27,280
Speaker 1: give them newness, how do you be exclusive and be

469
00:25:27,359 --> 00:25:29,920
Speaker 1: appealing at the same time and be able to earn

470
00:25:29,920 --> 00:25:32,600
Speaker 1: a profit. I look at this and I mean, just

471
00:25:32,800 --> 00:25:37,080
Speaker 1: as one example, this weekend, Francine has got to I'm

472
00:25:37,080 --> 00:25:39,520
Speaker 1: going to pronounce us an Italian and kill a Francine.

473
00:25:39,840 --> 00:25:45,200
Speaker 1: She's got to buy the Adulce, Gaibana, Giacci, Korda and Brocados, Stampato,

474
00:25:45,640 --> 00:25:49,399
Speaker 1: Concolo and Policia. I killed that and it's only like

475
00:25:49,440 --> 00:25:53,240
Speaker 1: twenty four hundred euros or three thousand dollars. Are we

476
00:25:53,280 --> 00:25:56,960
Speaker 1: really going to buy the quality Francine Laqua buys Dana?

477
00:25:57,040 --> 00:26:00,360
Speaker 1: Are we going to buy that online? I think we're

478
00:26:00,359 --> 00:26:04,560
Speaker 1: seeing that happen already. I think consumers are comfortable buying online,

479
00:26:04,840 --> 00:26:06,760
Speaker 1: and I think one of the things we're seeing companies

480
00:26:06,760 --> 00:26:09,320
Speaker 1: do is figure out how to make the window of

481
00:26:09,359 --> 00:26:13,000
Speaker 1: online similar to what their store window looks like. I mean,

482
00:26:13,200 --> 00:26:16,440
Speaker 1: and what you see happening today is the multi channel shopper.

483
00:26:16,720 --> 00:26:19,359
Speaker 1: Macy's has said it can be at least can spend

484
00:26:19,359 --> 00:26:22,000
Speaker 1: at least three to four times what the single sound

485
00:26:22,080 --> 00:26:25,360
Speaker 1: channel shopper spends. Dana. First of all, Tom Keane gets

486
00:26:25,359 --> 00:26:29,000
Speaker 1: an A plus plus plus for his Italian pronunciation. Um,

487
00:26:29,000 --> 00:26:31,280
Speaker 1: I was talking to a high end Why he's the

488
00:26:31,280 --> 00:26:33,600
Speaker 1: former of Faragama. You know they make the nice shoes,

489
00:26:33,800 --> 00:26:37,760
Speaker 1: and you'll tell me. The reason why also online will

490
00:26:37,800 --> 00:26:41,240
Speaker 1: increase is because of tears and concerns. Is that fair

491
00:26:41,440 --> 00:26:44,280
Speaker 1: or does that seem a little bit far fetched? A

492
00:26:44,320 --> 00:26:46,480
Speaker 1: little bit far fetched? But listen where still look at

493
00:26:46,480 --> 00:26:49,920
Speaker 1: the tourist numbers, the tourist numbers, whether it's overseas or

494
00:26:49,920 --> 00:26:52,520
Speaker 1: whether the tier in the US, there is something to

495
00:26:52,600 --> 00:26:56,639
Speaker 1: be said for certainly when there's tragic incidents, people stop

496
00:26:56,680 --> 00:26:59,480
Speaker 1: going to one area and going to another area, and

497
00:26:59,640 --> 00:27:02,880
Speaker 1: we we see that happening. I think safety and the

498
00:27:02,880 --> 00:27:07,080
Speaker 1: ability to feel safe is extremely important. What happens to you,

499
00:27:07,480 --> 00:27:10,840
Speaker 1: you know the flagship stores do um. A lot of

500
00:27:10,880 --> 00:27:13,879
Speaker 1: companies still need that because if I'm spending three thousand,

501
00:27:14,000 --> 00:27:17,359
Speaker 1: four thousand, or even five hundred dollars in something, I

502
00:27:17,400 --> 00:27:20,720
Speaker 1: need to make sure it fits property. And you're seeing

503
00:27:20,760 --> 00:27:24,960
Speaker 1: flagship stores and cities continue to to open, You're seeing

504
00:27:25,240 --> 00:27:28,600
Speaker 1: occupancy rates continue to be very high. You're seeing leak

505
00:27:28,720 --> 00:27:31,919
Speaker 1: cost for those flagship cities continue to be high. And

506
00:27:31,960 --> 00:27:34,080
Speaker 1: that's also like what it is with a malls where

507
00:27:34,119 --> 00:27:37,600
Speaker 1: there is terrific track at high income levels. We're not

508
00:27:37,600 --> 00:27:40,200
Speaker 1: seeing any any slow down there. What you are seeing

509
00:27:40,240 --> 00:27:44,919
Speaker 1: certainly is tourism's impacting outlet centers. Where outlet centers got

510
00:27:44,960 --> 00:27:47,240
Speaker 1: a lot of tourists. But that's for now. We'll have

511
00:27:47,320 --> 00:27:49,359
Speaker 1: to see what happens over the next two years. Dana

512
00:27:49,440 --> 00:27:51,440
Speaker 1: help us here and Robert Burke folks will be joining

513
00:27:51,520 --> 00:27:54,480
Speaker 1: us here in the coming days. Is well, Dana tells

514
00:27:54,520 --> 00:27:57,520
Speaker 1: you when I look at Michael Core's and coach basically

515
00:27:57,520 --> 00:28:00,320
Speaker 1: saying to a big department store we're gonna pull away.

516
00:28:00,359 --> 00:28:02,919
Speaker 1: Is that the new trend where we're gonna lose the

517
00:28:02,960 --> 00:28:05,800
Speaker 1: big store fashion stuff and they're gonna be going to

518
00:28:05,880 --> 00:28:10,520
Speaker 1: their individual stores to Brandon sell a lot of brands

519
00:28:10,520 --> 00:28:12,760
Speaker 1: want to control their own destiny. They want to be

520
00:28:12,800 --> 00:28:15,240
Speaker 1: able to minimize the impact of the promotions and the

521
00:28:15,320 --> 00:28:18,359
Speaker 1: friends and family events. These brands are still going to

522
00:28:18,359 --> 00:28:21,399
Speaker 1: be selling into department stores. They may not be selling

523
00:28:21,560 --> 00:28:24,160
Speaker 1: into the wide extent of department stores that they had been,

524
00:28:24,600 --> 00:28:27,439
Speaker 1: but certainly department stores need the brands, and the brands

525
00:28:27,480 --> 00:28:30,399
Speaker 1: need the department I like that idea, But if I

526
00:28:30,480 --> 00:28:33,200
Speaker 1: look at what Francine is getting this weekend adulta and

527
00:28:33,240 --> 00:28:38,560
Speaker 1: Gabanna jeweled toe post sandal in patent leather and printed brocade,

528
00:28:38,800 --> 00:28:43,440
Speaker 1: only eleven dollars by time. Yeah, of course, But but Dana,

529
00:28:43,680 --> 00:28:45,960
Speaker 1: you know, you and I kid about this, But with

530
00:28:46,160 --> 00:28:50,760
Speaker 1: the luxury in three years, where do you perceive Madison

531
00:28:50,840 --> 00:28:53,640
Speaker 1: Avenue or the Manola oblonnic store at the top of

532
00:28:53,680 --> 00:28:57,520
Speaker 1: the Herods Where are they going to be thirty six

533
00:28:57,560 --> 00:29:00,800
Speaker 1: months from now? I think six months from now, there's

534
00:29:00,840 --> 00:29:04,400
Speaker 1: only a finite number of department stores that can sell

535
00:29:04,440 --> 00:29:07,760
Speaker 1: those luxury goods prices and items. You're definitely gonna see

536
00:29:07,800 --> 00:29:11,480
Speaker 1: an enhanced online presence, and I think the flagship city

537
00:29:11,600 --> 00:29:15,000
Speaker 1: stores they'll continue to invest in and they'll continue to

538
00:29:15,040 --> 00:29:18,000
Speaker 1: get good, good traffic through those stores. Do we not

539
00:29:18,120 --> 00:29:21,120
Speaker 1: have too many retail stores in general? And I'm not

540
00:29:21,160 --> 00:29:24,520
Speaker 1: talking about overexpansion, but there's just too many. Sometimes there's

541
00:29:24,840 --> 00:29:28,880
Speaker 1: a retail overload, and I think that's been that way

542
00:29:28,880 --> 00:29:31,160
Speaker 1: for a long time. If you think about it, there

543
00:29:31,160 --> 00:29:34,840
Speaker 1: really hasn't been any many new concepts that have emerged

544
00:29:34,920 --> 00:29:37,800
Speaker 1: over the past few years. What we've seen is you've

545
00:29:37,800 --> 00:29:41,280
Speaker 1: seen like Dollar Shave Club, You've seen Warby Parker, You've

546
00:29:41,320 --> 00:29:44,800
Speaker 1: seen Lulu, Lemon and Peleton. The space of active is

547
00:29:44,840 --> 00:29:48,000
Speaker 1: taking share because so many people what they were to work,

548
00:29:48,000 --> 00:29:49,480
Speaker 1: they were on the weekend, they were to the gym.

549
00:29:50,080 --> 00:29:52,840
Speaker 1: Lifestyle today are different than in the past. It's so

550
00:29:53,000 --> 00:29:56,120
Speaker 1: much more casual lifestyle. I think what we'll see going forward,

551
00:29:56,320 --> 00:29:59,280
Speaker 1: we're going to see some of these online retailers. They'll

552
00:29:59,280 --> 00:30:02,080
Speaker 1: emerge and they'll grow larger and some will go away.

553
00:30:02,520 --> 00:30:06,040
Speaker 1: But that's where some of the creativity is. Now. Where

554
00:30:06,040 --> 00:30:08,120
Speaker 1: are you in this bear market? I mean, Dane, at

555
00:30:08,120 --> 00:30:09,800
Speaker 1: the end of the day, you're telling people to buy

556
00:30:09,800 --> 00:30:14,280
Speaker 1: a hold cell within that Michael Cores is down from

557
00:30:14,360 --> 00:30:17,640
Speaker 1: this early two peak. Is there a bear Is that

558
00:30:17,760 --> 00:30:20,840
Speaker 1: a bear market opportunity for Dana Telsey or is it

559
00:30:20,920 --> 00:30:24,280
Speaker 1: something to stay away from. I think overall, the valuations

560
00:30:24,280 --> 00:30:26,680
Speaker 1: of many of these names are appealing. And when you

561
00:30:26,720 --> 00:30:30,000
Speaker 1: think about the consumer space, the consumer space is a

562
00:30:30,080 --> 00:30:32,600
Speaker 1: little bit like the back half of the years when

563
00:30:32,640 --> 00:30:35,200
Speaker 1: it all counts. When you think of the inflection point

564
00:30:35,320 --> 00:30:38,560
Speaker 1: we've called the department stores the bridge to the second half,

565
00:30:38,840 --> 00:30:41,320
Speaker 1: and that bridge to the back calf. Look what you saw.

566
00:30:41,720 --> 00:30:44,200
Speaker 1: I think when you think about the handbag space, look

567
00:30:44,240 --> 00:30:46,480
Speaker 1: at Coach where for the first time in two years

568
00:30:46,760 --> 00:30:50,360
Speaker 1: it got positive comps. That bridge to recovery. You can

569
00:30:50,360 --> 00:30:53,640
Speaker 1: continue to see that happen over the next two quarters.

570
00:31:06,600 --> 00:31:09,320
Speaker 1: Francy mc kawen in London. I'm Tom Keane in New York.

571
00:31:09,400 --> 00:31:11,800
Speaker 1: Robert Burke with us as we look at global retail

572
00:31:12,240 --> 00:31:16,240
Speaker 1: and again a Mouldi retail report with lower yields this morning.

573
00:31:16,560 --> 00:31:19,280
Speaker 1: Robert Burke in Hong Kong, and I've already been dazzled

574
00:31:19,320 --> 00:31:22,160
Speaker 1: by this, and you know this cold I've got seven

575
00:31:22,200 --> 00:31:25,520
Speaker 1: places to buy products, and I mean I mean Francine.

576
00:31:25,520 --> 00:31:28,840
Speaker 1: There's four on the Hong Kong side, there's three on

577
00:31:28,880 --> 00:31:33,640
Speaker 1: the Coloon side, and you know the Alexander Shopping Arcaden,

578
00:31:34,080 --> 00:31:37,720
Speaker 1: you know Second Street and Austin Road Elements and all this.

579
00:31:38,120 --> 00:31:42,480
Speaker 1: Robert Burke, what have you learned about the international expansion

580
00:31:42,560 --> 00:31:46,920
Speaker 1: of brand names over the last decade. Well, I think

581
00:31:46,960 --> 00:31:50,040
Speaker 1: what we've learned in the last few years, as in

582
00:31:50,720 --> 00:31:54,400
Speaker 1: two years, is that the brands are relooking at their

583
00:31:54,680 --> 00:31:58,720
Speaker 1: physical brick and mortar footprint, their retail stores. You know,

584
00:31:58,800 --> 00:32:02,000
Speaker 1: they over expand is in China, probably far too early.

585
00:32:02,720 --> 00:32:06,280
Speaker 1: When you look at something like Hong Kong with seven

586
00:32:06,400 --> 00:32:09,680
Speaker 1: eight points of distribution, the brands are really looking at

587
00:32:10,080 --> 00:32:15,800
Speaker 1: at um either closing down stores potentially or really limiting

588
00:32:15,840 --> 00:32:19,720
Speaker 1: the product offer. You know. Overexposure for the for the

589
00:32:19,800 --> 00:32:23,920
Speaker 1: luxury fashion industry is always the kiss of death, and

590
00:32:24,160 --> 00:32:29,000
Speaker 1: too much availability can really work against them. So what

591
00:32:29,040 --> 00:32:32,800
Speaker 1: we're seeing is they're focusing on these really key retail

592
00:32:32,920 --> 00:32:37,520
Speaker 1: stores and building up their online and investing significantly for

593
00:32:37,680 --> 00:32:41,600
Speaker 1: their online operations. Robert, I want to come back. Okay,

594
00:32:41,640 --> 00:32:43,920
Speaker 1: first of all, products, so lost year, Tom, but it's

595
00:32:43,960 --> 00:32:47,120
Speaker 1: last year because actually there's you know, it has to

596
00:32:47,120 --> 00:32:49,040
Speaker 1: do with design a little bit, Robert, but it also

597
00:32:49,080 --> 00:32:51,880
Speaker 1: has to do with pricing, right, So you didn't and

598
00:32:51,960 --> 00:32:53,400
Speaker 1: there was I guess it when the last four or

599
00:32:53,400 --> 00:32:57,480
Speaker 1: five years a move done on purpose by a lot

600
00:32:57,520 --> 00:33:00,800
Speaker 1: of luxury fashion houses to be more desirable by becoming

601
00:33:00,840 --> 00:33:04,480
Speaker 1: more expensive. Are they now too expensive and does that

602
00:33:04,600 --> 00:33:07,760
Speaker 1: turn people off? Well, it's a very good question. What's

603
00:33:07,760 --> 00:33:11,520
Speaker 1: happened is the consumer has become far more educated, so

604
00:33:11,560 --> 00:33:13,760
Speaker 1: they go on the internet and they know exactly what

605
00:33:13,800 --> 00:33:17,600
Speaker 1: the global price should be. UM. Say three years ago,

606
00:33:17,680 --> 00:33:21,040
Speaker 1: four years ago was almost acceptable to have a tent

607
00:33:22,320 --> 00:33:25,960
Speaker 1: higher price than certain markets because they couldn't get the

608
00:33:26,000 --> 00:33:29,600
Speaker 1: goods and and they depended the brands depended on them

609
00:33:29,640 --> 00:33:33,640
Speaker 1: wanting to buy immediately. And today there are too many options.

610
00:33:33,680 --> 00:33:36,360
Speaker 1: So what's happened is you've seen a leveling of prices

611
00:33:36,440 --> 00:33:40,640
Speaker 1: globally and UM while some prices maybe high, that's not

612
00:33:40,720 --> 00:33:44,480
Speaker 1: the that's not the end all be all for luxury

613
00:33:44,480 --> 00:33:46,480
Speaker 1: brands to grow. In fact, they have to be more

614
00:33:46,560 --> 00:33:52,080
Speaker 1: consistent globally or the customer becomes distrusted. Right, But so

615
00:33:52,280 --> 00:33:54,880
Speaker 1: which are the brands that are actually Whinn't you mentioned Gucci?

616
00:33:55,120 --> 00:33:57,440
Speaker 1: The creative director and the new CEO turned around the

617
00:33:57,440 --> 00:34:00,520
Speaker 1: company in six months, But it was because they put

618
00:34:00,640 --> 00:34:06,320
Speaker 1: radically different clothes out there for people to buy. Different clothes,

619
00:34:06,480 --> 00:34:09,920
Speaker 1: different shoes, and different handbacks. So you know that's a

620
00:34:09,960 --> 00:34:14,880
Speaker 1: product UM that's the result of product and marketing. You know,

621
00:34:15,000 --> 00:34:20,839
Speaker 1: selan Um it continues to see strong sales UM. This

622
00:34:20,920 --> 00:34:24,960
Speaker 1: is a brand that is um Um still feeling the

623
00:34:25,040 --> 00:34:28,120
Speaker 1: effects of its creative director, but also a repositioning and

624
00:34:28,160 --> 00:34:32,719
Speaker 1: redistribution of product. The other brands we continue to see

625
00:34:32,760 --> 00:34:36,800
Speaker 1: performer Laura Piano, which is now owned by Vitan. We

626
00:34:36,920 --> 00:34:40,759
Speaker 1: see UM Vitan's new collection of watches and jewelry, and

627
00:34:40,800 --> 00:34:44,239
Speaker 1: we're seeing an uptick and jewelry as a whole globally

628
00:34:44,719 --> 00:34:49,200
Speaker 1: and UM not in watches because of um Um governmental

629
00:34:49,400 --> 00:34:53,640
Speaker 1: UM issues and new laws, but in jewelry across the

630
00:34:53,680 --> 00:34:56,319
Speaker 1: board globally, we're seeing an upticket. That's always one of

631
00:34:56,320 --> 00:34:59,880
Speaker 1: the first signs you see UM. Other brands Selene can

632
00:35:00,040 --> 00:35:05,440
Speaker 1: can use to perform UM Bulkari has had had good sales,

633
00:35:05,840 --> 00:35:10,400
Speaker 1: UM Fendi UM is solid. Now these aren't huge jumps

634
00:35:10,400 --> 00:35:13,080
Speaker 1: in sales, but but in this type of a market,

635
00:35:13,160 --> 00:35:16,480
Speaker 1: it's an increase in and the brands will take the increase.

636
00:35:17,080 --> 00:35:19,440
Speaker 1: UM The f T is a wonderful article on Grace

637
00:35:19,480 --> 00:35:21,600
Speaker 1: Wales Bonner, who's an up and coming thing, and you

638
00:35:21,640 --> 00:35:24,960
Speaker 1: know it's the usual fashion discussion Robert that you live

639
00:35:25,600 --> 00:35:28,080
Speaker 1: it's all about people at the end of the day.

640
00:35:28,120 --> 00:35:33,560
Speaker 1: Are you optimistic about the corporate titans of fashion finding

641
00:35:33,600 --> 00:35:36,400
Speaker 1: the people that makes for inciel I want to go

642
00:35:36,440 --> 00:35:39,160
Speaker 1: in the store? I am, you know. I think that

643
00:35:39,239 --> 00:35:43,200
Speaker 1: there's a consumer that's always going to want a good

644
00:35:43,239 --> 00:35:46,640
Speaker 1: product more than anything. What they want today is newness,

645
00:35:46,840 --> 00:35:49,080
Speaker 1: and I think it's again because of the amount of

646
00:35:49,120 --> 00:35:53,600
Speaker 1: exposure that they have online and they become um board

647
00:35:53,760 --> 00:35:56,240
Speaker 1: before it even enters the store. And that's an issue

648
00:35:56,320 --> 00:35:58,719
Speaker 1: that retail has to deal with and design houses have

649
00:35:58,840 --> 00:36:01,600
Speaker 1: to deal with. But they're looking for newness, and so

650
00:36:01,680 --> 00:36:04,439
Speaker 1: I believe that the people that are heading up these

651
00:36:04,480 --> 00:36:07,799
Speaker 1: brands are very attuned to that and are putting the

652
00:36:07,920 --> 00:36:11,160
Speaker 1: right creative directors in and the right business people in

653
00:36:11,239 --> 00:36:14,360
Speaker 1: the right retail strategy can roll up. Should some of

654
00:36:14,400 --> 00:36:16,640
Speaker 1: them go bust, should we close some of the fashion

655
00:36:16,680 --> 00:36:20,680
Speaker 1: houses down? There's two stuff well, you know it's it's

656
00:36:21,000 --> 00:36:23,760
Speaker 1: the fitter survived, and I think that that will probably

657
00:36:23,920 --> 00:36:27,120
Speaker 1: end up happening. I think that there is a general

658
00:36:27,200 --> 00:36:30,240
Speaker 1: feeling that there are just too many goods and maybe

659
00:36:30,520 --> 00:36:34,360
Speaker 1: there's houses that have been around because of history and reputation,

660
00:36:34,520 --> 00:36:37,960
Speaker 1: but they're not keeping up, and so in the customer

661
00:36:38,000 --> 00:36:40,160
Speaker 1: is ultimately the decision maker on who is going to

662
00:36:40,200 --> 00:36:43,560
Speaker 1: survive and not survive. Robert, You're gonna be hit three

663
00:36:43,560 --> 00:36:46,560
Speaker 1: times this weekend from people you know. Should I buy

664
00:36:46,560 --> 00:36:50,080
Speaker 1: the stocks? Retails in a massive bear market? Ralph Lauren

665
00:36:50,200 --> 00:36:52,839
Speaker 1: has gone from oh, I don't know, a hundred eight

666
00:36:53,040 --> 00:36:55,279
Speaker 1: down to a hundred They're all all the charts look

667
00:36:55,360 --> 00:36:58,960
Speaker 1: the same. Are you a buyer of shares of the retail?

668
00:36:59,000 --> 00:37:01,479
Speaker 1: Where the world you do? Ellen? Are you brave enough

669
00:37:01,760 --> 00:37:07,520
Speaker 1: to I'm feeling in the last week because of the earnings,

670
00:37:07,560 --> 00:37:10,960
Speaker 1: I'm feeling more optimistic than I've felt in the year

671
00:37:10,960 --> 00:37:13,719
Speaker 1: and a half two years now. Am I going to

672
00:37:13,800 --> 00:37:16,360
Speaker 1: go out and buy? I think I'm gonna be watching

673
00:37:16,480 --> 00:37:19,560
Speaker 1: really carefully, Robert, generous of your time, is wanting thank

674
00:37:19,560 --> 00:37:22,480
Speaker 1: you so much, Robert Burke for years at Bergdorf and

675
00:37:23,040 --> 00:37:34,879
Speaker 1: with his Robert Burke associates. Francia mcpaun London. I'm Tom

676
00:37:34,960 --> 00:37:36,880
Speaker 1: keenan New York and we are honored to bring to

677
00:37:36,920 --> 00:37:41,200
Speaker 1: you in this August of turbulence. As Chairman Greenspan would say,

678
00:37:41,960 --> 00:37:44,520
Speaker 1: Daniel Urgan, there are too many things to talk about

679
00:37:44,600 --> 00:37:46,839
Speaker 1: we will get to oil, but I think I want

680
00:37:46,840 --> 00:37:50,479
Speaker 1: to parse this US Dr Jurgen is a broader talk

681
00:37:50,560 --> 00:37:54,160
Speaker 1: on geopolitics, then get to oil, and maybe even then

682
00:37:54,200 --> 00:37:57,320
Speaker 1: get to something we could define as a new Commanding Heights,

683
00:37:57,360 --> 00:38:01,840
Speaker 1: one of your iconic UH books. This last weekend I

684
00:38:01,880 --> 00:38:06,360
Speaker 1: had the great privilege of attending Williamstown, Massachusetts, in a

685
00:38:06,440 --> 00:38:09,480
Speaker 1: moment of silence in front of the um grave of

686
00:38:09,600 --> 00:38:12,200
Speaker 1: James McGregor Burns, who passed away a few years ago.

687
00:38:12,280 --> 00:38:16,640
Speaker 1: One of our great arch historians, Jim Burns would talk

688
00:38:16,680 --> 00:38:21,319
Speaker 1: about leadership and transforming leadership. How do you perceive this

689
00:38:21,480 --> 00:38:26,080
Speaker 1: presidential campaign? All of us are reeling, whatever our politics,

690
00:38:26,160 --> 00:38:29,480
Speaker 1: from this campaign. How does the author of the Commanding

691
00:38:29,560 --> 00:38:33,399
Speaker 1: Heights look at the commanding idiocy of this campaign? Well,

692
00:38:33,440 --> 00:38:36,240
Speaker 1: it is very disappointing. And of course when you're outside

693
00:38:36,280 --> 00:38:39,239
Speaker 1: the United States, as I've been a lot in recent months,

694
00:38:39,280 --> 00:38:42,920
Speaker 1: people scratch their heads and say, speak about leadership. The

695
00:38:43,000 --> 00:38:45,719
Speaker 1: US is supposed to be the leader, and yet what

696
00:38:45,920 --> 00:38:49,600
Speaker 1: is going on in this campaign? And you know, we've

697
00:38:49,600 --> 00:38:51,520
Speaker 1: been the leader on trade, we've been the leader in

698
00:38:51,640 --> 00:38:54,319
Speaker 1: terms of security, we've been the leader in financial and

699
00:38:54,400 --> 00:38:57,160
Speaker 1: all flows and system and all of that now seems

700
00:38:57,160 --> 00:39:00,320
Speaker 1: to be up for grabs, and we're not in justted

701
00:39:00,400 --> 00:39:03,840
Speaker 1: in the role we've played from which we've benefited so enormously.

702
00:39:04,120 --> 00:39:06,799
Speaker 1: There are forty one million jobs in the United States

703
00:39:06,840 --> 00:39:08,960
Speaker 1: that are the result of foreign trade, more than one

704
00:39:08,960 --> 00:39:11,680
Speaker 1: out of five jobs. You don't know that from the campaign.

705
00:39:11,719 --> 00:39:14,440
Speaker 1: Nobody talks about that. Let's go outside and go to

706
00:39:14,480 --> 00:39:17,160
Speaker 1: Francing in the Quad London. Who's living that outside our

707
00:39:17,239 --> 00:39:20,960
Speaker 1: view of what we're doing in America. Francing Daniel Jurgen

708
00:39:21,920 --> 00:39:24,560
Speaker 1: done great, great, great pleasure to speak to you, because you're,

709
00:39:24,560 --> 00:39:27,160
Speaker 1: of course one of the people in the world with

710
00:39:27,239 --> 00:39:29,560
Speaker 1: the best insight on foreign policy on anything to do

711
00:39:29,600 --> 00:39:34,680
Speaker 1: with oil. What exactly does US energy policy look like

712
00:39:34,800 --> 00:39:37,040
Speaker 1: in ten years from now? Well, I think it looks

713
00:39:37,160 --> 00:39:39,359
Speaker 1: pretty confusing. I mean, on the one hand, you can

714
00:39:39,400 --> 00:39:42,120
Speaker 1: see the trends of where it's going to go that uh,

715
00:39:42,280 --> 00:39:46,120
Speaker 1: we're gonna see over the next ten years two thirds

716
00:39:46,200 --> 00:39:48,920
Speaker 1: of the new capacity that's added an electric power will

717
00:39:48,960 --> 00:39:54,480
Speaker 1: be renewables because of the considerable uh, tax incentives and

718
00:39:54,560 --> 00:39:57,480
Speaker 1: support and regulations that are there. And that seems to

719
00:39:57,520 --> 00:40:00,439
Speaker 1: be the decisions that people are making. But I think

720
00:40:00,560 --> 00:40:03,080
Speaker 1: if the US remains in its current track, it will

721
00:40:03,120 --> 00:40:05,360
Speaker 1: be one of the big three in terms of world oil.

722
00:40:05,719 --> 00:40:07,200
Speaker 1: You know, you talked about OPEC, but we have to

723
00:40:07,200 --> 00:40:10,520
Speaker 1: think about the big three, the US, Saudi Arabia and Russia.

724
00:40:11,040 --> 00:40:13,960
Speaker 1: But h but it will also depend upon what kind

725
00:40:13,960 --> 00:40:17,000
Speaker 1: of policies are put in place in the United States. Uh.

726
00:40:17,040 --> 00:40:19,120
Speaker 1: If some of the policies that were talked about in

727
00:40:19,160 --> 00:40:23,080
Speaker 1: the primary campaign in terms of restricting shale oil development

728
00:40:23,280 --> 00:40:27,560
Speaker 1: United States actually were put into place, the biggest beneficiary

729
00:40:27,600 --> 00:40:29,840
Speaker 1: would be the oil exporting countries because the U S

730
00:40:29,840 --> 00:40:32,840
Speaker 1: would be back to importing a lot more oil. Right

731
00:40:32,880 --> 00:40:34,680
Speaker 1: but at the moment that the U S exported quite

732
00:40:34,719 --> 00:40:36,279
Speaker 1: a lot, they were at a record in May. Can

733
00:40:36,320 --> 00:40:39,680
Speaker 1: they continue exporting oil? If if they can, they how

734
00:40:39,719 --> 00:40:42,040
Speaker 1: big a contender can they actually be in this Well?

735
00:40:42,480 --> 00:40:44,720
Speaker 1: Think about the US in terms of its overall production.

736
00:40:44,760 --> 00:40:46,960
Speaker 1: The US still imports a lot of oil, but a

737
00:40:47,000 --> 00:40:49,600
Speaker 1: lot lot less oil than it used to be. We

738
00:40:49,680 --> 00:40:52,920
Speaker 1: can export crude oil to kind of balance our markets

739
00:40:52,920 --> 00:40:56,280
Speaker 1: because the different grades in oil and our refining system.

740
00:40:56,800 --> 00:41:00,359
Speaker 1: But we are seeing US oil production is down point

741
00:41:00,360 --> 00:41:02,720
Speaker 1: two million barrels a day from its peak of April

742
00:41:02,760 --> 00:41:05,760
Speaker 1: two thousand fifteen. US is still a big crude producer,

743
00:41:06,160 --> 00:41:09,719
Speaker 1: but the impact of lower prices is certainly felt in

744
00:41:09,840 --> 00:41:13,080
Speaker 1: terms of the drill bit. We've got two conversations going

745
00:41:13,200 --> 00:41:16,440
Speaker 1: right now. One is the demand optimist. Edward Morrisett City

746
00:41:16,440 --> 00:41:19,560
Speaker 1: Group is a demand optimist. Adam Seminsky E I a

747
00:41:20,120 --> 00:41:23,200
Speaker 1: a demand optimist. Do you think demand will be there

748
00:41:23,239 --> 00:41:27,040
Speaker 1: to support price? We are a kind of I would say,

749
00:41:27,080 --> 00:41:30,880
Speaker 1: a modulated demand optimists. We see Francy, you got to

750
00:41:31,600 --> 00:41:36,440
Speaker 1: say something like that is modulated. It means, it means

751
00:41:36,480 --> 00:41:39,680
Speaker 1: not over the top, not wildly bullish about it, but

752
00:41:39,880 --> 00:41:42,359
Speaker 1: one point one million barrels a day roughly in this

753
00:41:42,440 --> 00:41:44,919
Speaker 1: year and next year in demand growth is what we see,

754
00:41:44,960 --> 00:41:49,480
Speaker 1: primarily because of a weaker world economy and also because

755
00:41:49,640 --> 00:41:51,799
Speaker 1: a lot of the price effects have already gone through it.

756
00:41:52,040 --> 00:41:54,080
Speaker 1: But if you take that out five or six years,

757
00:41:54,360 --> 00:41:56,800
Speaker 1: the world's gonna need five or six million barrels a

758
00:41:56,880 --> 00:41:59,719
Speaker 1: day more oil by the end of this decade. And

759
00:41:59,760 --> 00:42:02,839
Speaker 1: then there is the sixty trillion dollar question where does

760
00:42:02,880 --> 00:42:05,799
Speaker 1: that oil come from? Right? And the answer is the

761
00:42:05,880 --> 00:42:08,279
Speaker 1: answer is it comes from you know, you've heard of

762
00:42:08,280 --> 00:42:10,600
Speaker 1: the G twenty and the G seven, but comes from

763
00:42:10,600 --> 00:42:13,680
Speaker 1: the G five, which are the Gulf oil producers. Uh.

764
00:42:13,719 --> 00:42:16,160
Speaker 1: And then it comes from the United States, and it

765
00:42:16,239 --> 00:42:18,400
Speaker 1: comes from Canada. And this is going to be a

766
00:42:18,440 --> 00:42:21,400
Speaker 1: surprise because we've just worked. We worked our numbers. We

767
00:42:21,480 --> 00:42:23,520
Speaker 1: think actually some of it's gonna come from Russia. That

768
00:42:23,600 --> 00:42:26,160
Speaker 1: Russia could add five or six hundred thousand barrels a

769
00:42:26,200 --> 00:42:29,239
Speaker 1: day of supply by which you would not have thought

770
00:42:29,280 --> 00:42:32,520
Speaker 1: a year ago. But they've really readjusted their their cost system.

771
00:42:32,680 --> 00:42:34,680
Speaker 1: I want to switch gears here. We would talk oil

772
00:42:34,719 --> 00:42:36,759
Speaker 1: for two hours with you, but there's so much going

773
00:42:36,800 --> 00:42:41,120
Speaker 1: on in the world. Dcr urgan, your first thoughts on

774
00:42:41,239 --> 00:42:45,160
Speaker 1: this new United Kingdom. You open Commanding Heights with Clement

775
00:42:45,239 --> 00:42:48,760
Speaker 1: Attlee in the shock and awe of another time and place.

776
00:42:49,320 --> 00:42:52,560
Speaker 1: Is it the same shift going on now in Britain? Well,

777
00:42:52,760 --> 00:42:55,360
Speaker 1: we have Francine on the phone and she's living a

778
00:42:55,520 --> 00:42:58,719
Speaker 1: day by day. But I think, uh, first of all,

779
00:42:58,760 --> 00:43:05,319
Speaker 1: this shows the danger of hold referendums. Uh, I mean exactly.

780
00:43:05,480 --> 00:43:07,759
Speaker 1: And Uh, this was you know, they've already had a

781
00:43:07,800 --> 00:43:10,440
Speaker 1: near death experience with Scotland and yet went ahead with

782
00:43:10,520 --> 00:43:13,359
Speaker 1: this and it was striking even though the polls were

783
00:43:13,360 --> 00:43:15,520
Speaker 1: so close. I think almost no one believed that it

784
00:43:15,520 --> 00:43:18,960
Speaker 1: would actually pass, and yet it did, and so it

785
00:43:18,960 --> 00:43:22,719
Speaker 1: it introduces enormous, you know, uncertainty for the next few

786
00:43:22,800 --> 00:43:26,360
Speaker 1: years in terms of what gets uh, how does this

787
00:43:26,440 --> 00:43:29,680
Speaker 1: relationship get unraveled on what basis? And it can only

788
00:43:29,760 --> 00:43:33,840
Speaker 1: be contentious, Dan, You're gonna on a broader discussion on

789
00:43:33,880 --> 00:43:36,719
Speaker 1: an August Friday. I want to go back to a

790
00:43:36,800 --> 00:43:39,760
Speaker 1: chapter in Commanding Heights the New Rules of the Game,

791
00:43:40,360 --> 00:43:43,200
Speaker 1: and in that you've got an engineer in eighteen seventy

792
00:43:43,239 --> 00:43:46,880
Speaker 1: six or Sanford Fleming, who's sitting there board out of

793
00:43:46,920 --> 00:43:50,520
Speaker 1: his mind at a railroad station and he basically comes

794
00:43:50,600 --> 00:43:53,680
Speaker 1: up with a way for technological progress to move forward

795
00:43:54,080 --> 00:43:57,000
Speaker 1: in the late nineteenth century. What's our new rule of

796
00:43:57,000 --> 00:43:59,919
Speaker 1: the game and what's the technology that's going to say

797
00:44:00,120 --> 00:44:03,440
Speaker 1: the day for a horrendous productivity. What he did, and

798
00:44:03,480 --> 00:44:06,480
Speaker 1: it's a great metaphor for what you need to do,

799
00:44:06,680 --> 00:44:09,760
Speaker 1: is you have a global economy. Is that all trains

800
00:44:09,840 --> 00:44:13,120
Speaker 1: ran on local time, and so there was no train

801
00:44:13,160 --> 00:44:16,480
Speaker 1: would leave Pittsburgh and the timetable would not match up

802
00:44:16,520 --> 00:44:19,320
Speaker 1: with Philadelphia because high noon was at a different time,

803
00:44:19,840 --> 00:44:22,600
Speaker 1: and he missed a train in Ireland because the time

804
00:44:22,880 --> 00:44:26,000
Speaker 1: that things, and so he's really the inventor of time zones.

805
00:44:26,520 --> 00:44:28,879
Speaker 1: And it couldn't just be one country or one man.

806
00:44:28,960 --> 00:44:31,960
Speaker 1: It had to be an international agreement, uh, to to

807
00:44:32,120 --> 00:44:35,080
Speaker 1: create them. And there was a big argument, not surprisingly

808
00:44:35,120 --> 00:44:37,320
Speaker 1: between the British and the French, whether the Meridians should

809
00:44:37,320 --> 00:44:39,680
Speaker 1: go through London or whether it should go through Paris.

810
00:44:39,760 --> 00:44:43,319
Speaker 1: But London went out. But uh, and I think that's

811
00:44:43,400 --> 00:44:46,719
Speaker 1: for a global economy, you need agreement on rules. What

812
00:44:46,760 --> 00:44:49,560
Speaker 1: we have now is an attack on the rules and

813
00:44:49,600 --> 00:44:53,719
Speaker 1: the effort to dismantle the rules. And uh, if you

814
00:44:53,960 --> 00:44:56,120
Speaker 1: and that's what's so upsetting and scary to the rest

815
00:44:56,160 --> 00:44:58,560
Speaker 1: of the world. And you know, we could see the

816
00:44:58,560 --> 00:45:02,640
Speaker 1: October surprise in the financial markets could be if you're

817
00:45:02,640 --> 00:45:05,560
Speaker 1: seeing an election that's very close and not not certain

818
00:45:05,560 --> 00:45:07,760
Speaker 1: what's going to happen, what's the role of the United States,

819
00:45:08,160 --> 00:45:11,520
Speaker 1: And that could have deep reverberations around the world because

820
00:45:11,560 --> 00:45:12,960
Speaker 1: I think the rest of the world is still kind

821
00:45:12,960 --> 00:45:16,840
Speaker 1: of in disbelief looking at this campaign. Tom only on

822
00:45:16,840 --> 00:45:19,279
Speaker 1: surveillance do we talk about time zones and back to

823
00:45:19,320 --> 00:45:22,520
Speaker 1: the future and death because one of the source of

824
00:45:22,600 --> 00:45:26,520
Speaker 1: Daniel Jurgen, Yeah, exactly, Dan, what does that mean, if

825
00:45:26,520 --> 00:45:29,640
Speaker 1: you were to choose a time zone that you're most

826
00:45:29,719 --> 00:45:31,759
Speaker 1: worried about, and this goes back to the fear that

827
00:45:31,800 --> 00:45:34,239
Speaker 1: you're talking about the U S election, it goes back

828
00:45:34,280 --> 00:45:38,479
Speaker 1: to the fear of Brexit. Who's getting it right? Well,

829
00:45:38,520 --> 00:45:42,360
Speaker 1: I think that most things are going in the wrong direction.

830
00:45:42,800 --> 00:45:45,959
Speaker 1: I mean, certainly in terms of trade. If we don't

831
00:45:46,000 --> 00:45:50,359
Speaker 1: have this trade, the Pacific Trade Deal, the biggest beneficiaries,

832
00:45:50,440 --> 00:45:53,520
Speaker 1: China and those countries in the region, will say, Okay,

833
00:45:53,640 --> 00:45:55,719
Speaker 1: the US has turned our back. Our future has got

834
00:45:55,719 --> 00:45:58,520
Speaker 1: to be with China. So we would be really damaging

835
00:45:58,520 --> 00:46:02,640
Speaker 1: ourselves in a very big geopolitical way because we would

836
00:46:02,640 --> 00:46:05,160
Speaker 1: be saying, well, we're actually not pivoting to the Pacific,

837
00:46:05,200 --> 00:46:09,720
Speaker 1: and fact we're we don't want to increase our our engagement.

838
00:46:09,719 --> 00:46:12,479
Speaker 1: At the same time, I think we run this risk

839
00:46:12,520 --> 00:46:14,960
Speaker 1: and Tom alluded to it before. It's not a risk,

840
00:46:14,960 --> 00:46:18,640
Speaker 1: it's happening of a society that is overregulating too many

841
00:46:18,719 --> 00:46:22,240
Speaker 1: rules of the game. Uh. You know, in a bank

842
00:46:22,320 --> 00:46:25,640
Speaker 1: that went out of every five employees as a compliance officer.

843
00:46:26,080 --> 00:46:29,000
Speaker 1: I mean, we have low interest rates, very low interest rates,

844
00:46:29,000 --> 00:46:31,279
Speaker 1: and yet why are they not having an impact? Well,

845
00:46:31,320 --> 00:46:34,040
Speaker 1: I think at least behooves looking at what's happening to lending,

846
00:46:34,080 --> 00:46:37,960
Speaker 1: particularly lending to small businesses, which is constrained because of

847
00:46:38,520 --> 00:46:44,759
Speaker 1: new definitions of risk. You're you're describing a pretty scary environment, right,

848
00:46:45,080 --> 00:46:47,759
Speaker 1: and an environment in a world that would become a

849
00:46:47,800 --> 00:46:51,680
Speaker 1: lot more dangerous. Is there one person than can help

850
00:46:51,760 --> 00:46:55,160
Speaker 1: us get back on track? Well, you know, one person

851
00:46:55,400 --> 00:46:59,000
Speaker 1: probably depending you know, a president of the United States

852
00:46:59,040 --> 00:47:02,960
Speaker 1: would probably be the same. The most important person. Uh,

853
00:47:03,080 --> 00:47:06,680
Speaker 1: Chancellor Merkel has played a very important role in stabilizing

854
00:47:07,000 --> 00:47:10,320
Speaker 1: the world economy and in Europe, but she is somewhat

855
00:47:10,320 --> 00:47:15,080
Speaker 1: wounded now by the problems associated with that massive immigration

856
00:47:15,480 --> 00:47:19,239
Speaker 1: to bring Brexit forward, and it's a complete mystery about

857
00:47:19,280 --> 00:47:22,440
Speaker 1: the timeline and such. Do you see the institutions in

858
00:47:22,480 --> 00:47:25,600
Speaker 1: Europe that will be on the other side of the

859
00:47:25,640 --> 00:47:31,200
Speaker 1: Brexit negotiations by the institutions you mean Russell's Brussels, Well,

860
00:47:31,239 --> 00:47:34,440
Speaker 1: I think that you know. The challenge for you know,

861
00:47:34,719 --> 00:47:37,239
Speaker 1: Chancellor Merkel was very interesting because she said, we've got

862
00:47:37,239 --> 00:47:38,840
Speaker 1: to look at this from the viewpoint of the German

863
00:47:38,840 --> 00:47:42,399
Speaker 1: people and German business because Britain is an important, very

864
00:47:42,440 --> 00:47:45,759
Speaker 1: important market for German carmakers and so forth. And so

865
00:47:45,800 --> 00:47:49,200
Speaker 1: there are many calculations. I think the overall message from

866
00:47:49,239 --> 00:47:52,319
Speaker 1: Brussels is that we can't have a velvet divorce as

867
00:47:52,360 --> 00:47:55,360
Speaker 1: they had in Czechoslovakia, because then that will invite the

868
00:47:55,440 --> 00:47:58,480
Speaker 1: French or other countries to exit as well. We've got

869
00:47:58,480 --> 00:48:01,080
Speaker 1: to make it tough. But on the other hand, not

870
00:48:01,160 --> 00:48:03,560
Speaker 1: shoot oneselves in the foot and for instance, and not

871
00:48:03,640 --> 00:48:05,960
Speaker 1: take forever to do it. You you, this is we're

872
00:48:05,960 --> 00:48:07,960
Speaker 1: going to rip up the script, Francine, as we want

873
00:48:08,000 --> 00:48:10,600
Speaker 1: to do here on Bloomberg surveillance. You're going to has

874
00:48:10,640 --> 00:48:13,160
Speaker 1: now taken two shots at the French in this interview,

875
00:48:14,600 --> 00:48:17,200
Speaker 1: give us well one is from the nineteenth century, okay,

876
00:48:17,200 --> 00:48:21,560
Speaker 1: but we'll look out the Francis right, they're very resilient people.

877
00:48:21,600 --> 00:48:25,000
Speaker 1: How will be here with France after Alan I can't

878
00:48:25,040 --> 00:48:28,360
Speaker 1: figure out who the leader is. Well, it's it's very

879
00:48:28,400 --> 00:48:30,920
Speaker 1: you know, weak government to support is not there. And

880
00:48:30,960 --> 00:48:36,440
Speaker 1: of course France has this very frightening problem of domestic

881
00:48:36,600 --> 00:48:40,520
Speaker 1: terrorism that they have that there's troubling them and has

882
00:48:40,760 --> 00:48:43,600
Speaker 1: greatly strained the resources of the state as well as

883
00:48:43,600 --> 00:48:46,560
Speaker 1: bringing tragedy to a lot of people. But yeah, don

884
00:48:46,640 --> 00:48:49,040
Speaker 1: let's remind ourselves we're only eleven months away from the

885
00:48:49,080 --> 00:48:53,920
Speaker 1: French presidential election. Does mine been very far right extremists,

886
00:48:54,360 --> 00:48:56,600
Speaker 1: wants out of the euro You could describe her probably

887
00:48:56,640 --> 00:49:00,319
Speaker 1: as racist. Does she actually have a shot of coming

888
00:49:00,360 --> 00:49:02,959
Speaker 1: president or at least making it to the second round? Well,

889
00:49:03,080 --> 00:49:06,840
Speaker 1: I think she does to the second round, particularly with

890
00:49:06,960 --> 00:49:11,960
Speaker 1: the domestic turbulence around terrorism and so forth, that the

891
00:49:12,000 --> 00:49:14,879
Speaker 1: minds have changed, and I think people will be looking

892
00:49:14,880 --> 00:49:17,520
Speaker 1: at Britain and how what with the nature of its

893
00:49:17,560 --> 00:49:20,400
Speaker 1: of its exit is? When's the next book? That's all

894
00:49:20,440 --> 00:49:23,440
Speaker 1: anybody wants to know. Well, my goal is to have

895
00:49:23,520 --> 00:49:27,680
Speaker 1: it done by next spring. Okay, did you make it shorter? Absolutely,

896
00:49:28,000 --> 00:49:32,000
Speaker 1: it's gonna be no longer than a tweet. Daniel, you're

897
00:49:32,000 --> 00:49:35,120
Speaker 1: a good tweeting character with HS of course, and the

898
00:49:35,239 --> 00:49:39,040
Speaker 1: author of numerous books. I think it is time for

899
00:49:39,080 --> 00:49:43,000
Speaker 1: a reread of Commanding Heights, which is still a jewel

900
00:49:43,840 --> 00:49:47,399
Speaker 1: a few years on. I'd just say I think it's

901
00:49:47,560 --> 00:49:50,920
Speaker 1: very relevant to looking exactly as to what's happening now,

902
00:49:51,160 --> 00:49:53,359
Speaker 1: what things are going to look like after January. Yeah,

903
00:49:53,600 --> 00:49:55,719
Speaker 1: well there there is From dr You're gonna thank you

904
00:49:55,760 --> 00:50:01,319
Speaker 1: so much for coming in today, Thanks for listening to

905
00:50:01,360 --> 00:50:07,520
Speaker 1: the Bloomberg Surveillance Podcast. Subscribe and listen to interviews on iTunes, SoundCloud,

906
00:50:07,840 --> 00:50:11,799
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at

907
00:50:11,840 --> 00:50:16,640
Speaker 1: Tom Keane, Michael McKee is at Economy Before the Podcast.

908
00:50:16,719 --> 00:50:20,200
Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio