Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene
Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg ye
Speaker 1: Out Wire. Bt i G, Chief Equity and Derivative Strategist.
Speaker 1: I'm not going to bury the lead here, Julian. Try
Speaker 1: not to do that on a daily basis, but I'm
Speaker 1: definitely not going to do it today to rate cuts
Speaker 1: guys up to a bt i G. Yeah. No, Well, look,
Speaker 1: first of all, we're historians, and the FED cuts rates
Speaker 1: after hiking cycles. Generally they start within five to six
Speaker 1: months after the last hike UM and so so the
Speaker 1: one time they didn't was two thousand and seven. But
Speaker 1: it's more than that. The FED is very cognizant of
Speaker 1: the message of the yield curve. We're not believers in
Speaker 1: in in the yield curve in version. We we strictly
Speaker 1: adhere to twos tends, but the rest of the market
Speaker 1: does look at it. Uh So, the psychology of recession
Speaker 1: has started to form. We saw that in the plunging yield.
Speaker 1: But more importantly, the FED wants inflation. The Fed is
Speaker 1: is very focused on stoking I want inflation to come on.
Speaker 1: There's technological change starting with Uber John's I said on
Speaker 1: TV today, John, did you really try to get thirty
Speaker 1: thousand shares of Uber popped on Uber? Can I just
Speaker 1: editorialize your folks, it's like worldwide. After doing this show
Speaker 1: for forty years, John, you've been a saint about this.
Speaker 1: The I p O giddiness, it's just ridiculous. While the
Speaker 1: reporting from Bloomberg suggesting that we could get a filing
Speaker 1: for that ip as soon as tomorrow like a RAM,
Speaker 1: and maybe a listing as soon as May for Ruber.
Speaker 1: So the IPOs are snacking up. You know what some
Speaker 1: people will be saying, Julian, this is it the C suite,
Speaker 1: as some of these private companies see, this is the
Speaker 1: final opportunity. The window is closing, Let's go public. What
Speaker 1: do you say back to that, Well, there's no question
Speaker 1: that you know, when you think about the activity the
Speaker 1: last several weeks, there's been some major, major deals, major
Speaker 1: ones coming and you could say that our point of
Speaker 1: view is that what you've really seen is a lot
Speaker 1: of that risk has occurred through the private investment markets
Speaker 1: over the last call a dozen years or so UM
Speaker 1: and in actuality when you think about evaluations, we're not
Speaker 1: to that froth point yet. So let's dig into the
Speaker 1: rate cut call and why you still think stocks can
Speaker 1: go higher. That's hard to reckon sile for so many people.
Speaker 1: If you have the environment that's fertile for a rate
Speaker 1: cut that is tipping, not the environment that risk assets
Speaker 1: perform well in Why do you, at the same time
Speaker 1: as predicting forecasting two rate cuts this year simultaneously forecast
Speaker 1: a higher equity market because it doesn't necessarily have to
Speaker 1: be that sort of seeing recession in the whites of
Speaker 1: the market's eyes if you look at it UH in
Speaker 1: a time where we think there are similarities. The Fed
Speaker 1: cut five months after the last hike in in early
Speaker 1: just because inflation UH and growth dipped briefly. We are
Speaker 1: in the midst of the soft patch. We're not necessarily
Speaker 1: in the midst of a recession of any sort. But
Speaker 1: the Fed wants to also give the rest of central
Speaker 1: banks UH flexibility and that means rate cutting. Julian, The
Speaker 1: charm of your research notes is the first two pages
Speaker 1: are in English, and then the rest of it is
Speaker 1: all this derivative mumbo jumbo which basically centers around what's
Speaker 1: the bet of the market, what's the bet of the
Speaker 1: market right now? Like what actually are hedge funds doing,
Speaker 1: what's the long only buy side doing? What are we
Speaker 1: doing actually doing and not talking about? Well, the bet
Speaker 1: in the market is that equities are going higher, But
Speaker 1: interestingly enough, that has been a very grudging bet over
Speaker 1: the last several months, and and in fact, without without Gamma,
Speaker 1: there's no pop to it, exactly exactly, And and our
Speaker 1: our concern in the very near term is that this
Speaker 1: vaal selling has gotten a bit too carried away, well,
Speaker 1: like February of year ago carried away well. So there
Speaker 1: are actually two examples. There was late two thousand and
Speaker 1: seventeen when val sellers were so extreme that they actually
Speaker 1: ran to the outside. But also like the same as
Speaker 1: last year where you had on the downside move is
Speaker 1: comment John Gamma, g A M m am in the Greeks.
Speaker 1: We're doing the Greeks today. It's Greek onesday. Looking for
Speaker 1: a short term pop involva. Over the long term risk
Speaker 1: assets performed well. Just walk me through the thinking care
Speaker 1: of but what time. That's exactly right, so so and
Speaker 1: again this short term pop involved, particularly if you get
Speaker 1: good news, um, you know, market satisfaction with the breggsit extension,
Speaker 1: the potential for some sort of Chinese deal to materialize, um,
Speaker 1: you know, that is where volatility could actually pop on
Speaker 1: the other Okay, we need to talk about that. That's
Speaker 1: a catalyst good news as a catalyst for higher volatility.
Speaker 1: Walk me through it. So if you go back, the
Speaker 1: way to think about this is sort of the end
Speaker 1: of ten, beginning of eighteen, and Tom alluded to it
Speaker 1: with February. Essentially you got into a performance chase and
Speaker 1: there are a lot of people that are behind their benchmarks,
Speaker 1: came into the year under invested, remains somewhat underinvested, and
Speaker 1: that kind of psychology that chase, particularly if the Fed
Speaker 1: continues to indicate that it's got the markets back, uh,
Speaker 1: causes volatility to expand down the opposite. Do you know, Julian,
Speaker 1: it's it's amazing on your channels. That's what John and
Speaker 1: I do every day. We do a performance. Cheez Can
Speaker 1: we talk about a performance just briefly that's going to
Speaker 1: take place on Capitol Hill a little bit later, speaking
Speaker 1: of volatility the House versus Wall Street. That's what it
Speaker 1: feels like, That's what it's teed up for. With Jamie Diamond,
Speaker 1: David Solomon, Brian moynihan, Michael Corbett, James Coleman all going
Speaker 1: up against the House Financial Services Committee? What does that
Speaker 1: bring a little bit later other than theater, what are
Speaker 1: you looking for from that? Julian well being overweight financials?
Speaker 1: It always concerns us when you've got executives testifying on
Speaker 1: Capitol Hill, and it's one of the reasons that were
Speaker 1: neutral rated on technology because we continue to see technic
Speaker 1: technology executives in front of Capitol Hill. Essentially, what they're
Speaker 1: gonna do is try and convince legislators that the system
Speaker 1: is far better off and that they are really, you know,
Speaker 1: socially conscious. In this new age, there's important phrases that
Speaker 1: you see, say the late nineties into two thousand one,
Speaker 1: two thousand six over to two thousand seven. Julian yesterday,
Speaker 1: I'm Blueberg surveillance. We heard one of those phrases of
Speaker 1: the era, the debt hamster wheel? Are we on the
Speaker 1: debt hamster wheel now? Where we're gonna be like two
Speaker 1: thousand six worrying about every ten basis points. UH with
Speaker 1: a yield below two fifty in the ten year, we
Speaker 1: are going to worry about it every ten basis points,
Speaker 1: which goes back to our fall for rate cuts because
Speaker 1: we actually think that if you cut rates, you can
Speaker 1: potentially stimulate inflation expectations increasing the yield at the long
Speaker 1: This is just you know, the guy goes to work
Speaker 1: for Rich Greenfield and he becomes radical, radical, got to
Speaker 1: keep up with Rich. I feel like once she leaves
Speaker 1: the Swiss Bank she becomes unleashed a little bit true.
Speaker 1: There's a lot going on, Thank you getting a manueout BT.
Speaker 1: I g chief E put into rivatives rategy shop glens
Speaker 1: with us with credit Sweete, and I guess shop where
Speaker 1: I want to go is Mr drag. He's going to
Speaker 1: do everything not to move the Euro. And yet you've
Speaker 1: got to decide if there's alpha or pop or gain
Speaker 1: either way in the Euro. Is the Euro movable over
Speaker 1: the next six months? Well, the market has sold implied
Speaker 1: volatility in the Euro in massive size for the market
Speaker 1: certainly thinks that there aren't many reasons for a large
Speaker 1: euro move. I think in terms of today, the biggest
Speaker 1: surprise would be if, as part of the Q and
Speaker 1: a um ECB Chief Drug decides to address head on
Speaker 1: this issue or the stories in the markets around the
Speaker 1: possibility of tiered rates in the future. I think if
Speaker 1: there's a substantial discuss and around that topic, then I
Speaker 1: think the Euro could move, and it would probably be
Speaker 1: to the downside. Let's talk about the move to the
Speaker 1: dance on and how difficult that would be. Euro dollar
Speaker 1: has really struggled to break one two a half and
Speaker 1: we've thrown a lot at it. What is it going
Speaker 1: to take to get the euro to break that level?
Speaker 1: I think it's going to have to be something like
Speaker 1: like what I just described, some something along the lines
Speaker 1: of a conversation that raises the possibility of new innovations
Speaker 1: in monetary policy designed to address more specifically what we
Speaker 1: can see, which is very low inflation, very falling inflation expectations,
Speaker 1: and a high likelihood of the e CV missing its
Speaker 1: targets for inflation in the future. Until now, Drug has
Speaker 1: maintained that ultimately the economy will cover and the inflation
Speaker 1: expectations and inflation itself will move up against So anything
Speaker 1: that suggests that there's a greater risk that that won't happen.
Speaker 1: We would need to see that before the europe can
Speaker 1: conclusively break down through those levels. In John Field, this
Speaker 1: is critical because Shabs and the trenches and this this massive,
Speaker 1: as you call it, binary call. John does coming up
Speaker 1: on what central banks do? What is the e c
Speaker 1: BAS next move. I mean, President drag tease the prospect
Speaker 1: that we could have a tier deposit rate of the
Speaker 1: e c B or they would do something to offset
Speaker 1: the pain of negative interest rates for financial and the
Speaker 1: financial sector. Shahab, It doesn't seem to me that that's
Speaker 1: on the horizon in terms of happening anytime soon. No,
Speaker 1: that's right, and I think that's the reason why, as
Speaker 1: we discussed volatility in the urine imply, volatility is so
Speaker 1: low and one markets are basically betting on the current
Speaker 1: ranges holding um. It would be a surprise if Frankly,
Speaker 1: if today he decides to make a big issue of
Speaker 1: these of these themes. But the thing is, it's still
Speaker 1: difficult to completely give a zero probility to this because
Speaker 1: ultimately it's still the case that the economy is shaky
Speaker 1: and certainly inflation data a very week so that you
Speaker 1: can't really hide from that, and that's why we stair
Speaker 1: alive to this risk dumb question of the day which
Speaker 1: we just take for granted, but I think for a
Speaker 1: lot of our audience, it's not a dumb question. Can
Speaker 1: the ECB cut rates? It's still technically possible. Um, there
Speaker 1: are central banks, for example the Swiss National Bank that
Speaker 1: have even lower rates than the u CBS current rates.
Speaker 1: There's a debate about how useful that would be, particularly
Speaker 1: for bank profitability and therefore credit creation which comes from
Speaker 1: banks ultimately in your area. So but it's but it's
Speaker 1: technically possible. And again that the issue is what does
Speaker 1: the CD do if we go into another major slow
Speaker 1: down with another big fall in inflation expectations when it's
Speaker 1: tool set is as limited as it is, As long
Speaker 1: as the market doesn't perceive there to be a wide
Speaker 1: range of other options, it will still keep open, keeping
Speaker 1: up in mind around the possibility of more negative rates,
Speaker 1: which again, you know, I think hells us that maybe
Speaker 1: the problem lies elsewhere in all of you that if
Speaker 1: they don't go into be a solution, it probably will
Speaker 1: need a fiscal component. UM probably need the countries that
Speaker 1: have room for fiscal expansion, like Germany, to the player
Speaker 1: role in that. But that doesn't seem to be on
Speaker 1: the menu. And Joan, wasn't it ten days ago that
Speaker 1: Cherry Yellen in Asia said exactly what you heard Mr
Speaker 1: Jones say. I think so many people have made this
Speaker 1: point and for whatever reason, Europe just doesn't want to
Speaker 1: explore the policy options Jha. But I just don't know
Speaker 1: when that changes. When does the penny finally drop that
Speaker 1: you need a counter cyclical fiscal policy in Europe. I
Speaker 1: think the difficulty there is it's not so much in
Speaker 1: the fact that it's not been discussed efficiently clearly it has.
Speaker 1: It's just that philosophically, obviously the German has been disinclined
Speaker 1: to go that way, but also maybe they want to
Speaker 1: see more signs of reforms that they approve of in
Speaker 1: the other countries, big countries like France for example. Um
Speaker 1: so there's a quick pro crow thoughts playing out here.
Speaker 1: The question is whether the European economy can sustain itself
Speaker 1: long enough for this to really work itself out. Again.
Speaker 1: This this plays into the view of some who believe
Speaker 1: you need crises to force the issue, and in the
Speaker 1: absence of those nothing much happens, which is why so
Speaker 1: many investors tend to have a structural bearers your review. Well,
Speaker 1: let's talk about that structural bearers your review and talk
Speaker 1: about the cycle as well. At the moment, your view
Speaker 1: is a different degree of bad. It's weak. Will agree
Speaker 1: that it's weak in Europe, but to what degrees you have,
Speaker 1: because manufacturing is very much weak in a recession pretty much,
Speaker 1: services is okay, the hard data is still coming out. Okay,
Speaker 1: the soft data looks terrible. How do you think DR
Speaker 1: actually analyzes the Eurozone economy today with all of those
Speaker 1: different things going on. It's not that clear. It's really
Speaker 1: not clear because there are other problems too. For example,
Speaker 1: we don't know whether the US and President Trump will
Speaker 1: push on and force the issue around auto tariffs, which obviously,
Speaker 1: if the US were to impose auto tarmas in Europe
Speaker 1: would be a new economic shock. Uh and something that
Speaker 1: isn't currently has been talked about, but I wouldn't say
Speaker 1: it's necessarily in the price at this point in time
Speaker 1: for the euro or maybe even drug his assessments of
Speaker 1: the future. So I think it's very difficult because of
Speaker 1: the changing nature of global trade relationships um and especially
Speaker 1: for the Your area being a net exporting region largely
Speaker 1: used to Germany. This is a key factor I think
Speaker 1: in terms the current data, as you suggest, you do
Speaker 1: have the split between the services sector and reasonable employment
Speaker 1: outlooked by European standards on the one hand, and yet
Speaker 1: obviously this terrible manufacturing story and the other. But I
Speaker 1: think ultimately you know what I'm looking at there to
Speaker 1: to solve that dylemma is inflation expectations. And if you
Speaker 1: look at some of the e CVS own favored measures,
Speaker 1: example the five year five year inflation swell for it, uh,
Speaker 1: they'd been falling. These are in session. Expectations are going
Speaker 1: lower and I haven't bounced too much yet either, even
Speaker 1: with positive news like China's upside p M I surprises
Speaker 1: so much. So I think that as long as that's
Speaker 1: the case, we should lean on the side of VCV
Speaker 1: having to be remaining under pressure to come up with
Speaker 1: new ideas. Sham Johns with us with credit sweet, thank
Speaker 1: you so much. Right now. Julia Cornado on a weaker Euro,
Speaker 1: I mean the Euro Julia is just to be direct,
Speaker 1: really floats off of every word that Mr Droggy says.
Speaker 1: What is the significance right now of this weaker euro.
Speaker 1: I mean, nobody really expected the market wasn't really looking
Speaker 1: for dragging to deliver a lot today, and he didn't.
Speaker 1: And he's sort of dancing between the raindrops in his comments,
Speaker 1: sort of indicating that they're studying what they can do
Speaker 1: and that they're willing to do more, but also trying
Speaker 1: to stick to that optimistic baseline. But uh so there's
Speaker 1: a little bit maybe of disappointment that he didn't deliver anything,
Speaker 1: or maybe that he sounds still a little too um
Speaker 1: sanguine and about the outlook and less willing to do
Speaker 1: what needs to be done. But you know, it's it's
Speaker 1: really not a big reaction. I think we're still going
Speaker 1: to be in wait and the mode after this meeting.
Speaker 1: Uh the one what the data do and what the
Speaker 1: ECB comes up with. One question went to what we
Speaker 1: spoke about earlier on Bloomberg's surveillance, this idea of looking
Speaker 1: out five years and then five years forward from there.
Speaker 1: So when when the pros talk about a five year
Speaker 1: five year forward, Am I right, Julia, that that's a
Speaker 1: ten year guestimate of inflation. Yes, that's basically what the
Speaker 1: market is thinking is trend inflation and they're we've seen
Speaker 1: a real deterioration in market expectations for European inflation, and
Speaker 1: I guess that's where probably some of the disappointment comes,
Speaker 1: because Draggy is downplaying that deterioration, saying it's it's just
Speaker 1: risk premium, which is what central bankers say when they
Speaker 1: want to sort of dismiss it and put it okay.
Speaker 1: Does the market have a good track record of getting
Speaker 1: tenure out anything right, let alone inflation. We can't even
Speaker 1: in forecast inflation in the next six months, let alone
Speaker 1: the next five or ten years. So I don't think
Speaker 1: anybody's got a good Julie. We'd go an hour long
Speaker 1: with you, but we've got festivities in Washington. We're gonna
Speaker 1: run to Paul Sweene and I are going to begin
Speaker 1: to frame out a bank conference. We thank Dr Coronado
Speaker 1: for a really good perspective at this morning, across all
Speaker 1: of Bloomberg surveillance on television and radio. We are beyond honored,
Speaker 1: Paul Sweeney and myself to have a gentleman who is
Speaker 1: the only gentleman I would like to talk to on
Speaker 1: this bridge from two thousand eight o nine to where
Speaker 1: we are now, with bankers defending City Group at ugliest
Speaker 1: negative eight billion operating income than positive fourteen billion bailout
Speaker 1: operating income up now, Mike Mayo to twenty three billion
Speaker 1: of operating income. Do these bankers come before Maxine Waters
Speaker 1: minting money look at night and day versus before the
Speaker 1: financial crisis or during the financial crisis, and what you've
Speaker 1: seen so far. So far, we've had four CEOs testify,
Speaker 1: and there's a contrast between three of those and one other.
Speaker 1: And so Bank America they said they recognized the damage
Speaker 1: caused by the company. Morgan Stanley, the CEO, said, if
Speaker 1: not for the support attack payers for a Right Night
Speaker 1: survived and City Group CEO said it was a searing
Speaker 1: x And moynihan went right after ken Lewis secondarily here
Speaker 1: talking about country Wise that it's not my faults, my
Speaker 1: predecessor that fought this from that was one of the
Speaker 1: worst acquisitions. There's a strivancy to tone that the three
Speaker 1: of us, we've all the combined three of us folks
Speaker 1: in the studio have been in forty two thousand three
Speaker 1: D twelve conference calls. This isn't a normal conference call,
Speaker 1: is it. This is pretty unique? But in terms of
Speaker 1: being night and day. There's one statistic that really sums
Speaker 1: up the strength of the banking industry the fixed income market.
Speaker 1: There's a trillion dollars of bank bonds out there and
Speaker 1: the spread of those bank bonds in the last decade
Speaker 1: of decline from seven hundred basis points down to a
Speaker 1: hundred basis points. So if somebody says the banking industry
Speaker 1: is at big risk today, what we would say back
Speaker 1: to them is we have one trillion dollars of bank
Speaker 1: bonds that disagree. That's right. So, Mike, what would be
Speaker 1: a success for these bankers coming in front of the
Speaker 1: Democratic House. They haven't had to do it since the
Speaker 1: financial crisis. This could get ugly. It's starting out pretty
Speaker 1: calm here. What would you define a successful day for
Speaker 1: these banks CEOs? A successful day for the seven banks
Speaker 1: eato us that are testifying is that there's no headlines,
Speaker 1: there's not many articles. By the time we get to
Speaker 1: the weekend, there certainly will be a lot of press
Speaker 1: on this today and tomorrow. But make no mistakes. So
Speaker 1: it's one misspoken word or one dad answer that could
Speaker 1: be really damaging the reputation. Where do you think they
Speaker 1: might be most exposed. Is it diversity and hiring, is
Speaker 1: it lending? Is it compensation? Where do you think they're
Speaker 1: most exposed? Well, I think compensation is an issue not
Speaker 1: when banks perform well, but when they don't perform well,
Speaker 1: because that gives a perception of a system that's not fair.
Speaker 1: And so we published a report about the Estate Street
Speaker 1: CEO over the last nine years made a hundred fifteen
Speaker 1: million dollars even when their primary target got worse, not better.
Speaker 1: Its predecessor. It's predecessor, So you know this, But this
Speaker 1: is the realm. This should be the realm of shareholders.
Speaker 1: So you know nature abhors a vacuum wash and DC
Speaker 1: loves one. So if shareholders don't step in and control compensation,
Speaker 1: then it's an invitation for Congress to say something about it. Okay,
Speaker 1: we got in a couple of gun number of minutes
Speaker 1: before this. We're gonna go back to David Solomon of
Speaker 1: goldn Sex here when he steps in. But Michael Mayo,
Speaker 1: this is critical and this goes back to you for
Speaker 1: you know you you were Jackson, it was a bank
Speaker 1: of the United States. When you begin securities analysis, right,
Speaker 1: I mean, it's always a tension of Washington in the
Speaker 1: mean capitalist New York City banks that this goes back
Speaker 1: to Jape Moore, goes back to Jefferson. I would suggest
Speaker 1: as well, that's never going to change. So what is
Speaker 1: Mr Corbett through Mr Solomon alphabetically, what's their best outcome
Speaker 1: today knowing it's never gonna change. Well, you know, I
Speaker 1: think Jamie Diamonds, uh, you know, ceol in the Any
Speaker 1: report just came out last week, sums it up. He goes,
Speaker 1: Sometimes the job of a banker is to not be
Speaker 1: liked because you need to say no sometimes. And you
Speaker 1: know what when Congress people say, you know, make more loans, well,
Speaker 1: lending is an output, an outcome, not a decision. You
Speaker 1: can make as many loans as you want, and that
Speaker 1: got us into the subprime crisis for sure. So I
Speaker 1: think it's just a matter of it's a natural sometimes
Speaker 1: a healthy tension. You don't want banks learning too much
Speaker 1: because then you do, indeed have a financial crisis. I
Speaker 1: was surprised Paula didn't mention the number of construction workers
Speaker 1: that are going to tear down and rebuild the Palace.
Speaker 1: I mean I looked it up. The Ocean Bay apartments
Speaker 1: or whatever in Rockaway Beach and there it is on
Speaker 1: Google is is is. One of the bankers mentioned that
Speaker 1: as well, Paul, So, Michael, do you think that, I
Speaker 1: mean again, post financial crisis, a big layer of regulatory
Speaker 1: oversight came up to the global banking industry, the US
Speaker 1: banking industry. Do you feel like we're at a point
Speaker 1: now where they can start pushing back and saying, listen,
Speaker 1: we the system is much safer now, we can pull
Speaker 1: back some of those regulations off of the cities and
Speaker 1: the JP Morgan's or do you think the CEOs don't
Speaker 1: even want to go there? Well, I don't. I think
Speaker 1: you're the way you phrased it, pushing back. I don't
Speaker 1: like that phrase. I think preserve the safety and soundness
Speaker 1: of the banking into stree. It's stronger than it's been
Speaker 1: in decades. Having said that, you know, improve the efficiency
Speaker 1: of regulation, improve the transparency of regulations, improve the effectiveness
Speaker 1: of regulations. Regulators did a great job. Regulators should take
Speaker 1: a victory laugh. But now it's time for a look
Speaker 1: back and say, hey, can we have this effectiveness of
Speaker 1: regulation better? How did the new mergers fold into this
Speaker 1: BB and T and whatever? I mean? They were beginning
Speaker 1: to see what you've predicted for years, and you know
Speaker 1: those of your ILK insecurities analysis, they're all gonna fold up.
Speaker 1: They're gonna roll up. Not Canada like, but the big
Speaker 1: banks are gonna get bigger in America just because they
Speaker 1: get the technology technological edge. Don't think well here in
Speaker 1: the tenure anniversary of the financial crisis, and the immediate
Speaker 1: catalyst for banks getting better, it was banks, you know,
Speaker 1: pretty much almost failing, and then banks got much bigger
Speaker 1: before they were really equipped for that size. In the
Speaker 1: last couple of years, you're seeing now that Goliath is winning.
Speaker 1: The largest banks have become more efficient and generating more
Speaker 1: deposits because of the scale of technology. So if you
Speaker 1: if you can't beat them, join them. And you had
Speaker 1: the B B and T and and SunTrust merger. The
Speaker 1: first reason the game was gave was to get better
Speaker 1: economies from technology. Soldier with us today, Michael Mayo, where
Speaker 1: us with Wells Fargo. They are not in attendance today.
Speaker 1: Of course, we wouldn't want Mr Mayo to comment on
Speaker 1: Wells Fargo executive policies and such. We're listening to bankers
Speaker 1: of eight banks, including State Street and Bank of New
Speaker 1: York Melon as well. We await Mr Solomon of Golden Sex, Paul,
Speaker 1: when you try to squeeze in one more question, extinguished
Speaker 1: Mayo exactly, and Michael's seen this come and go many
Speaker 1: cycles to the banking sector. Is there risk now that
Speaker 1: we have a more progressive part of the Democratic Party
Speaker 1: in the House, Now, does that increase the risk for
Speaker 1: more regulation on the banks? Not less? Well, the importance
Speaker 1: of the hearing today by the seven CEO s is,
Speaker 1: you know, sound bites can turn into policy, ideas can
Speaker 1: turn into presidential agendas, can turn into legislation, which turns
Speaker 1: into regulation. So this might be a preview of what's
Speaker 1: to come during next year residential election. And beyond dumb question,
Speaker 1: is President Trump pro big bank? You know that was
Speaker 1: a very tribal question you just asked. You know, I'm serious,
Speaker 1: Like it's almost tribal now either four big banks, you're
Speaker 1: against big banks? And can we just be pragmatic whatever
Speaker 1: best for the economic system is what we should support. Okay,
Speaker 1: Mike bo with us with Wells Fargo. We're honor to
Speaker 1: have them with us. Thanks for listening to the Bloomberg
Speaker 1: Surveillance Podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud,
Speaker 1: or whichever podcast platform you prefer. I'm on Twitter at
Speaker 1: Tom Keane before the podcast. You can always catch us worldwide.
Speaker 1: I'm Bloomberg Radio