1 00:00:02,600 --> 00:00:12,960 Speaker 1: Yeah, welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,240 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg The 5 00:00:27,320 --> 00:00:30,440 Speaker 1: like move from the State Department how confidence the State 6 00:00:30,440 --> 00:00:33,200 Speaker 1: Department warning against Americans traveling to China, And we've said 7 00:00:33,200 --> 00:00:35,480 Speaker 1: again and again over the last week that for the economy, 8 00:00:35,760 --> 00:00:40,680 Speaker 1: for markets, what will matter is the way states respond, nations, people, corporations, 9 00:00:40,720 --> 00:00:44,720 Speaker 1: and right now things are throttling back even more. Yeah, 10 00:00:44,760 --> 00:00:49,440 Speaker 1: it's it's it's definitely clearly spreading, both economically as well 11 00:00:49,479 --> 00:00:53,280 Speaker 1: as otherwise. Almost ten cases to Our team has worked 12 00:00:53,280 --> 00:00:56,320 Speaker 1: Haires Lison, with Steve Angel reporting from Hong Kong and 13 00:00:56,360 --> 00:00:59,840 Speaker 1: others to bring you the best we can clear to 14 00:01:00,000 --> 00:01:03,880 Speaker 1: discussion on this virus in China. UH. Jennifer Ron joined 15 00:01:03,960 --> 00:01:06,120 Speaker 1: us from UCL in London the other day and we're 16 00:01:06,120 --> 00:01:09,880 Speaker 1: now thrilled to bring you from Baylor University Peter Hotez. 17 00:01:09,920 --> 00:01:13,640 Speaker 1: We've spoken to him many times before, of course, UH 18 00:01:13,680 --> 00:01:18,959 Speaker 1: with the UH the Tropical Medicine National School at Baylor 19 00:01:19,080 --> 00:01:20,920 Speaker 1: Peter Hotels. I want to use a little bit of 20 00:01:20,920 --> 00:01:24,319 Speaker 1: your heritage here, and that is the moment decades ago 21 00:01:24,440 --> 00:01:29,199 Speaker 1: at Rockefeller University where we really began to figure out virology, 22 00:01:29,240 --> 00:01:31,880 Speaker 1: and you, of course we're part of that in the eighties. 23 00:01:32,160 --> 00:01:35,240 Speaker 1: Are we that much smarter now about all this than 24 00:01:35,280 --> 00:01:38,200 Speaker 1: we were in Stars or back when you were at 25 00:01:38,280 --> 00:01:43,000 Speaker 1: Rockefeller University thirty years ago. We certainly are. And it's 26 00:01:43,160 --> 00:01:45,280 Speaker 1: first of all, thank you for having me back. It's 27 00:01:45,280 --> 00:01:46,920 Speaker 1: always good to talk to you. And I think we're 28 00:01:46,920 --> 00:01:51,120 Speaker 1: in better shape now than we were back then because 29 00:01:51,160 --> 00:01:53,720 Speaker 1: we have learned some lessons, although we're still not perfect. 30 00:01:54,040 --> 00:01:56,480 Speaker 1: If we remember the Stars coronavirus that immerged out of 31 00:01:56,480 --> 00:02:00,040 Speaker 1: the southern China, UH scared everybody shut down. This to 32 00:02:00,080 --> 00:02:02,440 Speaker 1: be a Toronto back in two thousand two, two thousand 33 00:02:02,560 --> 00:02:05,640 Speaker 1: three that wolf people up. And in response to the 34 00:02:05,680 --> 00:02:10,160 Speaker 1: World Health Organization created a new series of international health 35 00:02:10,200 --> 00:02:15,000 Speaker 1: regulations to beef up our security for health and border 36 00:02:15,040 --> 00:02:18,320 Speaker 1: and virus detection, and the Global Health Security Agenda was 37 00:02:18,320 --> 00:02:20,840 Speaker 1: put in place by the US government and w h 38 00:02:20,919 --> 00:02:24,360 Speaker 1: O and and so things are better than they were. Um. 39 00:02:24,400 --> 00:02:27,120 Speaker 1: The other good thing that's happened is that science has 40 00:02:27,200 --> 00:02:31,480 Speaker 1: has really stepped up. I mean, imagine we've gone from 41 00:02:31,520 --> 00:02:35,640 Speaker 1: a brand new virus agent at the end of twenty nineteen, 42 00:02:35,680 --> 00:02:38,959 Speaker 1: within a few weeks, isolating the virus, having a full 43 00:02:39,040 --> 00:02:44,000 Speaker 1: genetic code, knowing how it finds to and people. It's extraordinary. 44 00:02:44,040 --> 00:02:47,200 Speaker 1: So um, that's the good news. The bad news is 45 00:02:47,520 --> 00:02:52,320 Speaker 1: you can only accelerate vaccine so much because despite what 46 00:02:52,360 --> 00:02:55,120 Speaker 1: the anti vaccine lobby says, you still have to test 47 00:02:55,160 --> 00:02:58,200 Speaker 1: them for safety. And that's the one thing that you 48 00:02:58,200 --> 00:03:03,000 Speaker 1: only has diffic developed a common a protein STARS vaccine 49 00:03:04,000 --> 00:03:06,720 Speaker 1: the head of manufactured in sixteen that we couldn't get 50 00:03:06,760 --> 00:03:11,400 Speaker 1: the support, can proceed through clinical trials. And and now 51 00:03:11,440 --> 00:03:14,440 Speaker 1: we've just learned that these two viruses are actually quite 52 00:03:14,440 --> 00:03:17,280 Speaker 1: similar Stars in the end coronavirus about to the same receptor, 53 00:03:17,320 --> 00:03:20,079 Speaker 1: about eight percent similar. So we may be sitting out 54 00:03:20,080 --> 00:03:24,679 Speaker 1: a vaccine for this end coronavirus UM. But we still 55 00:03:24,680 --> 00:03:27,120 Speaker 1: have to go through all of the safety testing and 56 00:03:27,160 --> 00:03:29,880 Speaker 1: everything else. And that's the one piece that's company in 57 00:03:29,480 --> 00:03:33,680 Speaker 1: the blur of knowledge, in pseudo knowledge that we have. 58 00:03:33,919 --> 00:03:37,600 Speaker 1: What's the compare here of this virus is it two stars? 59 00:03:37,800 --> 00:03:40,680 Speaker 1: Is it to a different virus? I can't pronounce or 60 00:03:40,720 --> 00:03:44,720 Speaker 1: is it to the Spanish influence of what kind of 61 00:03:44,880 --> 00:03:51,640 Speaker 1: thing is this? This is it's very much closely resemble Stars. 62 00:03:51,680 --> 00:03:54,560 Speaker 1: The difference is it's not quite as lethal. As far 63 00:03:54,600 --> 00:03:57,520 Speaker 1: as we can tell, it's about as easily transmissible where 64 00:03:57,640 --> 00:04:02,360 Speaker 1: Stars was affecting healthy people. Uh. This one of the 65 00:04:02,520 --> 00:04:08,400 Speaker 1: serious cases the respiratory illness. Sear respiratory illness, mostly individuals 66 00:04:08,680 --> 00:04:11,960 Speaker 1: over the age of sixty, mostly mails, mostly those with 67 00:04:12,120 --> 00:04:15,040 Speaker 1: underlying diabetes hypertension, but a lot of people are getting 68 00:04:15,080 --> 00:04:18,840 Speaker 1: serious deal and requiring respiratory support. Look, this, this is 69 00:04:18,880 --> 00:04:22,720 Speaker 1: what's gonna happen. Um. Uh, it's the tale of two 70 00:04:22,800 --> 00:04:25,680 Speaker 1: different countries in the United States. I'm actually not so worried. 71 00:04:25,920 --> 00:04:29,400 Speaker 1: We've got a good team in place. We've uh we 72 00:04:29,400 --> 00:04:32,000 Speaker 1: were thanks to the Chinese scientists who got a heads 73 00:04:32,080 --> 00:04:35,120 Speaker 1: up on this virus, so we knew it was coming. Um. 74 00:04:35,640 --> 00:04:37,760 Speaker 1: We will see an increase in the number of cases 75 00:04:37,760 --> 00:04:40,360 Speaker 1: in the US, but it won't nearly resemble anything like 76 00:04:40,400 --> 00:04:43,040 Speaker 1: what we're seeing in China or Central China. Such a 77 00:04:43,160 --> 00:04:45,760 Speaker 1: China and China will be in free fall. Um. Although 78 00:04:45,760 --> 00:04:48,560 Speaker 1: we say ten thousand cases, summer estimating is already a 79 00:04:48,640 --> 00:04:51,919 Speaker 1: hundred thousands people infective because there's probably a lot of 80 00:04:51,960 --> 00:04:56,040 Speaker 1: individuals with low grades UH symptoms. So this is gonna 81 00:04:56,080 --> 00:04:57,960 Speaker 1: sweep unless we can get a vaccine in there. This 82 00:04:58,040 --> 00:05:00,839 Speaker 1: is gonna sweep across China. It's already upt on commerce 83 00:05:00,880 --> 00:05:05,440 Speaker 1: between Hong Kong and mainland. It's um it's it's calling 84 00:05:05,480 --> 00:05:10,560 Speaker 1: a fallen Asian markets. I I imagine massive economic losses 85 00:05:10,560 --> 00:05:13,839 Speaker 1: in China, and that's SCI markets as well. Dr hote 86 00:05:13,960 --> 00:05:16,960 Speaker 1: is what's China doing wrong in their response to the 87 00:05:17,080 --> 00:05:20,719 Speaker 1: virus that's leading to what you expect to be a rampant, 88 00:05:20,880 --> 00:05:26,040 Speaker 1: widespread UH disease that is already perhaps hit it's a 89 00:05:26,080 --> 00:05:30,320 Speaker 1: hundred thousand people. I think the Chinese leadership, unlike in 90 00:05:30,360 --> 00:05:33,360 Speaker 1: two thousand to two thousand three when they were covering 91 00:05:33,480 --> 00:05:36,520 Speaker 1: up things slow, on this one. They're good, but you 92 00:05:36,520 --> 00:05:38,520 Speaker 1: know they're doing the best a person can with one 93 00:05:38,680 --> 00:05:42,320 Speaker 1: hand tied behind their back because there's no vaccine, and 94 00:05:42,360 --> 00:05:46,320 Speaker 1: when you have a contagious virus like this, ultimately in 95 00:05:46,320 --> 00:05:47,920 Speaker 1: the end you need a vaccine. You can need a 96 00:05:48,000 --> 00:05:50,080 Speaker 1: vaccine to stop it. So I actually think the Chinese 97 00:05:50,160 --> 00:05:53,080 Speaker 1: leadershild be doing everything they can all handed that they 98 00:05:53,080 --> 00:05:56,159 Speaker 1: recognize the hit not only the public health, but their 99 00:05:56,200 --> 00:06:01,800 Speaker 1: their economy and political stability. But the frustrating pieces that 100 00:06:01,960 --> 00:06:05,080 Speaker 1: it's been slow to yet our vaccine and the other 101 00:06:05,080 --> 00:06:08,760 Speaker 1: four or five vaccine candidates out there, if you're just 102 00:06:08,839 --> 00:06:11,680 Speaker 1: joining US worldwide. Peter Hotels with us is dean of 103 00:06:11,720 --> 00:06:14,560 Speaker 1: the National School of Tropical Medicine at Baylor Ecology, has 104 00:06:14,600 --> 00:06:17,440 Speaker 1: been with US many times on surveillance over the years. 105 00:06:17,480 --> 00:06:20,880 Speaker 1: Here on the Wuhan virus, Dr Hotez, is there any 106 00:06:20,920 --> 00:06:24,839 Speaker 1: sign that the virus is mutating into something that potentially 107 00:06:24,920 --> 00:06:29,280 Speaker 1: is more lethal. We We don't have any evidence at 108 00:06:29,279 --> 00:06:32,320 Speaker 1: this point, and I don't think we need to postulate 109 00:06:32,360 --> 00:06:34,960 Speaker 1: that this is a virus that emerged out of the 110 00:06:35,080 --> 00:06:39,160 Speaker 1: wet markets in in Wuhan, because there's the virus that 111 00:06:39,240 --> 00:06:41,800 Speaker 1: jumps from bath to a second animal species and then 112 00:06:41,800 --> 00:06:44,560 Speaker 1: two people and now it's picked up human to human 113 00:06:44,600 --> 00:06:47,000 Speaker 1: transmissions going But in that sense is going by the 114 00:06:47,000 --> 00:06:50,600 Speaker 1: same playbook that are two other big coronavirus epidemics that 115 00:06:50,920 --> 00:06:52,960 Speaker 1: the Stars in two thousand to two thousand three and 116 00:06:52,960 --> 00:06:55,600 Speaker 1: then the Mayor's coronavirus out of the Middle East in 117 00:06:55,920 --> 00:06:58,760 Speaker 1: two thousand twelves um So I don't think we have to. 118 00:06:59,120 --> 00:07:01,479 Speaker 1: I mean, mutatition always possible. I don't think we have 119 00:07:01,560 --> 00:07:03,839 Speaker 1: to worry so much about that. But we've got to 120 00:07:03,880 --> 00:07:06,760 Speaker 1: figure out how we could do everything to help China. 121 00:07:06,800 --> 00:07:09,880 Speaker 1: And remember there's also a million Chinese in Africa right 122 00:07:09,920 --> 00:07:12,320 Speaker 1: now through their belts and the ODA initiatives, So there's 123 00:07:12,440 --> 00:07:15,120 Speaker 1: lots of commerce back and forces in China and Africa, 124 00:07:15,600 --> 00:07:17,880 Speaker 1: whereas the United States has got a great health system 125 00:07:17,880 --> 00:07:22,160 Speaker 1: in place to prevent the spread from with Africa's country 126 00:07:22,200 --> 00:07:25,360 Speaker 1: to country, So next to China the other place I'm 127 00:07:25,360 --> 00:07:27,160 Speaker 1: really worried about it such to here in Africa, and 128 00:07:27,160 --> 00:07:30,000 Speaker 1: I think that's the major reason why Dr ted ros 129 00:07:30,040 --> 00:07:32,640 Speaker 1: w h O had declared the public health emergency. He's 130 00:07:32,680 --> 00:07:35,240 Speaker 1: probably stim early concerned. Peter, forgive me for getting a 131 00:07:35,280 --> 00:07:37,280 Speaker 1: little bit ahead of things at the moment. But once 132 00:07:37,280 --> 00:07:40,000 Speaker 1: we've got past this and hopefully move on from it, 133 00:07:40,480 --> 00:07:42,280 Speaker 1: what measures can we put into place in the country 134 00:07:42,320 --> 00:07:44,800 Speaker 1: like China to make sure these kind of things don't happen, 135 00:07:44,880 --> 00:07:49,120 Speaker 1: or at least minimize the possibility of them actually happening. Well, 136 00:07:49,360 --> 00:07:52,840 Speaker 1: you know, after the Stars coronavirus, the Chinese leadership committed 137 00:07:52,840 --> 00:07:55,600 Speaker 1: to shutting down those wet markets these exotic animals that 138 00:07:55,640 --> 00:07:57,200 Speaker 1: are all if you've ever been to one of them, 139 00:07:57,200 --> 00:07:59,480 Speaker 1: they're all piled together in cages. Some are dead, some 140 00:07:59,600 --> 00:08:03,000 Speaker 1: are That's just a recipe for disasters that needs to 141 00:08:03,000 --> 00:08:06,000 Speaker 1: be shut down. The other two other things need to happen. One, 142 00:08:06,200 --> 00:08:08,360 Speaker 1: we still need to be do a better job at 143 00:08:08,360 --> 00:08:11,400 Speaker 1: building up our vaccine infrastructure. This business of waiting for 144 00:08:11,440 --> 00:08:14,960 Speaker 1: a catastrophe then to start. Um. You know, we could 145 00:08:14,960 --> 00:08:17,800 Speaker 1: have had this vaccine potentially ready to go back in 146 00:08:18,480 --> 00:08:21,680 Speaker 1: seventeen after he came in trial. But you know we're 147 00:08:21,680 --> 00:08:24,520 Speaker 1: too reactive. We we uh. We're like a little kids 148 00:08:24,560 --> 00:08:26,520 Speaker 1: soccer game. If you are washing little kids play soccer, 149 00:08:26,640 --> 00:08:28,760 Speaker 1: the ball goes in one direction. All everybody runs through 150 00:08:28,760 --> 00:08:31,640 Speaker 1: the ball, and nobody stays behind to play defense. And 151 00:08:31,720 --> 00:08:33,320 Speaker 1: we need to do better at that. I think the 152 00:08:33,360 --> 00:08:36,840 Speaker 1: third thing is we uh, we have to recognize this 153 00:08:36,880 --> 00:08:40,880 Speaker 1: is our third major coronavirus epidemic pandemic in the twenty 154 00:08:40,920 --> 00:08:43,960 Speaker 1: one century. We'd stars and mayors. Now this we have 155 00:08:44,000 --> 00:08:47,560 Speaker 1: to start building an infrastructure specifically for the virus, just 156 00:08:47,640 --> 00:08:51,320 Speaker 1: like we do for flu. Given not only public health impact, 157 00:08:51,400 --> 00:08:56,640 Speaker 1: but it's it's economic consequences. This is going to Peter Hotess, 158 00:08:56,640 --> 00:08:59,280 Speaker 1: thank you so much with the Baylor College of Venison 159 00:08:59,400 --> 00:09:15,080 Speaker 1: in Houston. Now we go right over to the authentic 160 00:09:15,280 --> 00:09:19,280 Speaker 1: on the ground knowledge of Meredith Sumter of Eurasia Group. Meredith, 161 00:09:19,320 --> 00:09:21,320 Speaker 1: I'm gonna cut to the chase. Most of us don't 162 00:09:21,320 --> 00:09:24,240 Speaker 1: speak Mandarin. John, do you speak Man speak? I just 163 00:09:24,240 --> 00:09:27,200 Speaker 1: wanted to check that out, Meredith, what do you see 164 00:09:27,240 --> 00:09:29,720 Speaker 1: in the Mandarin press? I mean, how is it different 165 00:09:30,080 --> 00:09:32,640 Speaker 1: from the wall to wall coverage of this Wuhuan virus 166 00:09:33,160 --> 00:09:36,480 Speaker 1: in English has been morning Tom and John is great 167 00:09:36,520 --> 00:09:39,560 Speaker 1: to be with you. Yeah, there's a market difference in 168 00:09:39,600 --> 00:09:43,960 Speaker 1: the way that sort of statewide media press more important 169 00:09:44,000 --> 00:09:48,439 Speaker 1: to a state organs of press are reporting on the 170 00:09:48,080 --> 00:09:52,400 Speaker 1: the the the virus. Then the more local level media 171 00:09:52,440 --> 00:09:55,200 Speaker 1: outlets are even sit as an activist journalist who are 172 00:09:55,440 --> 00:09:59,000 Speaker 1: trying to get more information out to the Chinese people. 173 00:09:59,480 --> 00:10:02,000 Speaker 1: And what you see here is at the central level 174 00:10:02,000 --> 00:10:06,560 Speaker 1: there's really pressure. Uh, there's there's pressure there to try 175 00:10:06,720 --> 00:10:09,920 Speaker 1: to to have more of a release of the public 176 00:10:09,960 --> 00:10:13,720 Speaker 1: discontent with how Beijing has handled this biver so far, 177 00:10:13,840 --> 00:10:16,840 Speaker 1: and the media is doing this by going after local 178 00:10:16,880 --> 00:10:22,400 Speaker 1: officials who have withheld information. At the same time that 179 00:10:22,520 --> 00:10:25,320 Speaker 1: there are circling wagons around President Shi j and Ping 180 00:10:25,480 --> 00:10:29,040 Speaker 1: as a decisive and strong leader who is taking action 181 00:10:29,280 --> 00:10:33,400 Speaker 1: and mobilizing all resources to get ahead of the crisis. 182 00:10:33,520 --> 00:10:36,000 Speaker 1: And that's why, Meredith, the Major in China is just 183 00:10:36,120 --> 00:10:40,200 Speaker 1: considered state propaganda. It is always blame the local government 184 00:10:40,520 --> 00:10:43,720 Speaker 1: and never the leader. This is from the ft Signing. 185 00:10:43,720 --> 00:10:46,360 Speaker 1: A critic said the local government in Wuhan did not 186 00:10:46,440 --> 00:10:48,720 Speaker 1: have the power to act decisively because they were at 187 00:10:48,720 --> 00:10:50,560 Speaker 1: the bottom of the chain of command that started with 188 00:10:50,559 --> 00:10:54,680 Speaker 1: the Supreme Leader amou Era title recently bestowed on Mr. 189 00:10:54,800 --> 00:10:58,680 Speaker 1: She is that a problem, Meredith, Regardless of what the 190 00:10:58,679 --> 00:11:01,000 Speaker 1: Major is saying, let's talk about the structure of government. 191 00:11:01,040 --> 00:11:04,040 Speaker 1: How a country this large responds to a crisis so 192 00:11:04,120 --> 00:11:08,960 Speaker 1: local so early. That's exactly right, John, And it really 193 00:11:08,960 --> 00:11:13,040 Speaker 1: it shines the spotlight on the limitations of China's political system. 194 00:11:13,559 --> 00:11:16,680 Speaker 1: And really it's it's she's top down leadership style, the 195 00:11:16,720 --> 00:11:20,400 Speaker 1: one party system, top down leadership style that contributed to 196 00:11:20,400 --> 00:11:25,360 Speaker 1: the problem by making local officials fearful to act without 197 00:11:25,559 --> 00:11:29,319 Speaker 1: authorization from Beijing. And what's notable here really is the 198 00:11:29,520 --> 00:11:34,520 Speaker 1: Wuhan mayor Joe Hian Wam. He accepted responsibility, while subtly 199 00:11:34,880 --> 00:11:38,760 Speaker 1: placing blame on the need to wait for Beijing's approval 200 00:11:39,080 --> 00:11:43,679 Speaker 1: in publicizing the outbreak. Meredith, there was data overnight showing 201 00:11:43,960 --> 00:11:47,760 Speaker 1: that Chinese factories were struggling even before the country shutdown 202 00:11:47,800 --> 00:11:49,520 Speaker 1: for the linear New York holidays as well as the 203 00:11:49,760 --> 00:11:54,680 Speaker 1: worsening coronavirus outbreak. And I'm wondering how much energy the 204 00:11:55,040 --> 00:11:58,560 Speaker 1: virus is spread takes away from Beijing to address some 205 00:11:58,600 --> 00:12:02,000 Speaker 1: of the economic issues that are still out there. Oh, 206 00:12:02,120 --> 00:12:04,719 Speaker 1: it takes a great deal of energy. But I think 207 00:12:04,720 --> 00:12:08,600 Speaker 1: in terms of a social stability issue, j and Pain 208 00:12:08,760 --> 00:12:11,760 Speaker 1: is going to mobilize everything that he's got to try 209 00:12:11,920 --> 00:12:16,520 Speaker 1: to focus on getting the virus contained first. And and 210 00:12:16,559 --> 00:12:20,240 Speaker 1: then at the same time you see actions by UH 211 00:12:20,480 --> 00:12:24,640 Speaker 1: States banking officials UH to make sure that while there 212 00:12:24,640 --> 00:12:29,320 Speaker 1: are obvious economic stillover effects broadly impacting the Chinese economy, 213 00:12:29,520 --> 00:12:32,680 Speaker 1: that because the way that they're mobilizing these resources, we 214 00:12:32,800 --> 00:12:38,040 Speaker 1: see fairly limited risk to economic stability UH at large. 215 00:12:38,160 --> 00:12:41,559 Speaker 1: You have UM, you have Chinese banks that have been 216 00:12:41,559 --> 00:12:45,200 Speaker 1: instructed to extend loans to cushion the negative effects of 217 00:12:45,360 --> 00:12:48,320 Speaker 1: the virus. UH and we believe that the central government 218 00:12:48,600 --> 00:12:53,560 Speaker 1: will intervene to maintain fiscal stability, with with the Central 219 00:12:53,600 --> 00:12:58,200 Speaker 1: Bank providing likely to provide emergency liquidity provisions to limit 220 00:12:58,280 --> 00:13:02,160 Speaker 1: the stress on China's bank system merative. Just a final 221 00:13:02,240 --> 00:13:05,000 Speaker 1: question on on the trade story, just quickly, where does 222 00:13:05,080 --> 00:13:08,400 Speaker 1: this leave the agreement between the United States and China 223 00:13:08,440 --> 00:13:10,480 Speaker 1: that was struck just a month or so ago. What 224 00:13:10,679 --> 00:13:13,400 Speaker 1: is the whole issue with the coronavirus and relations with 225 00:13:13,400 --> 00:13:17,440 Speaker 1: the United States and China leave things. That's a terrific question. 226 00:13:17,480 --> 00:13:21,720 Speaker 1: And really the combination of Beijing's focus on crisis fighting 227 00:13:22,320 --> 00:13:26,559 Speaker 1: and the economic disruption is likely to slow China's purchases 228 00:13:26,640 --> 00:13:29,400 Speaker 1: of US goods under that Phase one trade deal. And 229 00:13:29,559 --> 00:13:32,640 Speaker 1: let's be honest here, Jonathan, this was this was an 230 00:13:32,679 --> 00:13:36,720 Speaker 1: ambitious projection of what Beijing would be able to buy 231 00:13:36,880 --> 00:13:39,520 Speaker 1: even before the outbreak. So we think that the limited 232 00:13:39,520 --> 00:13:44,560 Speaker 1: domestic consumption, uh the the slowing industrial activity means that 233 00:13:44,800 --> 00:13:47,440 Speaker 1: China is going to be even slower to start to 234 00:13:47,600 --> 00:13:50,920 Speaker 1: make those market purchases. Now, this is not going to 235 00:13:51,000 --> 00:13:56,079 Speaker 1: derail Phase one, obviously, we understand and Washington would understand 236 00:13:56,120 --> 00:13:58,560 Speaker 1: why it would be harder for trying to make good 237 00:13:58,559 --> 00:14:02,439 Speaker 1: on those purchases right away. But the shortfall may put 238 00:14:02,559 --> 00:14:06,120 Speaker 1: more pressure on Trump to defend the deal later this 239 00:14:06,200 --> 00:14:09,000 Speaker 1: year of facing is slow to red regain momentum and 240 00:14:09,000 --> 00:14:12,199 Speaker 1: its purchases. Thank you so much. Madith Sumpter with Eraser Group, 241 00:14:12,280 --> 00:14:24,600 Speaker 1: just riving in this morning with their knowledge of China 242 00:14:26,520 --> 00:14:28,880 Speaker 1: with respect to the spread of the coronavirus. And there's 243 00:14:28,920 --> 00:14:32,960 Speaker 1: a question especially to Goldman's access call as you're highlighting earlier, John, 244 00:14:33,080 --> 00:14:35,880 Speaker 1: which is that it will eat into second quarter GDP 245 00:14:36,000 --> 00:14:38,480 Speaker 1: of US by zero point four percent to cut it 246 00:14:38,520 --> 00:14:41,920 Speaker 1: down Martel, Yeah, well this quarter. Excuse me, thank you 247 00:14:42,080 --> 00:14:46,040 Speaker 1: wells Capital Portfolio manage our marquis. As we look at 248 00:14:46,040 --> 00:14:48,240 Speaker 1: a slight risk off feel in markets, do you think 249 00:14:48,240 --> 00:14:52,360 Speaker 1: that this is actually going to eat into potential returns? 250 00:14:52,400 --> 00:14:53,880 Speaker 1: Do you think that this is going to persist or 251 00:14:53,880 --> 00:14:55,200 Speaker 1: do you think that this is a by the dip, 252 00:14:55,600 --> 00:14:58,960 Speaker 1: very small dip moment. I would say more more body 253 00:14:59,080 --> 00:15:01,600 Speaker 1: if we don't actually know what the impact on GP 254 00:15:01,760 --> 00:15:04,320 Speaker 1: will be in the US, But it's really reflecting a 255 00:15:04,360 --> 00:15:07,480 Speaker 1: bigger trend, which is a move away from China outsourcing 256 00:15:07,760 --> 00:15:11,000 Speaker 1: and also Chinese slower growth. So those trends are intact. 257 00:15:11,080 --> 00:15:14,320 Speaker 1: I think that's more important. Looking out beyond one quarter market. 258 00:15:14,360 --> 00:15:16,520 Speaker 1: Looking at the commodity market move, We're down eleven and 259 00:15:16,560 --> 00:15:19,080 Speaker 1: a half percent on copper on the London Medal Exchange 260 00:15:19,080 --> 00:15:21,800 Speaker 1: in just two weeks. It's been a massive move in 261 00:15:21,840 --> 00:15:25,440 Speaker 1: the commodity market. Are we pricing down inflation in the 262 00:15:25,480 --> 00:15:27,680 Speaker 1: bond market, Margie? Is that way you're doing or you're 263 00:15:27,680 --> 00:15:31,680 Speaker 1: pushing back against that move? No. I think that low inflation, 264 00:15:31,800 --> 00:15:34,400 Speaker 1: zero inflation is just going to be with us for 265 00:15:34,520 --> 00:15:37,920 Speaker 1: the foreseeable future. So this makes a big call for 266 00:15:37,920 --> 00:15:40,800 Speaker 1: the bond market. Then, markis, if we're gonna have low inflation, 267 00:15:40,880 --> 00:15:44,240 Speaker 1: how can you make a call for high yields on tens, 268 00:15:44,280 --> 00:15:46,960 Speaker 1: on thirties through twenty How difficult is it to do that? 269 00:15:47,600 --> 00:15:50,040 Speaker 1: You really can't. You have to lower your expectation for 270 00:15:50,120 --> 00:15:52,960 Speaker 1: what fixed income can be across the board, which is 271 00:15:53,480 --> 00:15:56,760 Speaker 1: low to possibly mid single digits in the high yield market, 272 00:15:56,840 --> 00:16:00,080 Speaker 1: so much much less here the returns on equities. To 273 00:16:00,240 --> 00:16:02,520 Speaker 1: drag you with the headline eighteen months ago or so, 274 00:16:02,960 --> 00:16:05,960 Speaker 1: looking out to the end of two thousand twenty, Governor Kearney, 275 00:16:06,080 --> 00:16:08,840 Speaker 1: I believe it was two days ago, Margie, looking out 276 00:16:08,840 --> 00:16:12,280 Speaker 1: to the end of two thousand twenty, one is Margie 277 00:16:12,280 --> 00:16:16,040 Speaker 1: Battell beginning to look at a low rate regime out 278 00:16:16,240 --> 00:16:19,479 Speaker 1: farther than you thought even months ago. Have you extended 279 00:16:19,880 --> 00:16:24,040 Speaker 1: your ex access out well, I've been thinking we are 280 00:16:24,040 --> 00:16:28,200 Speaker 1: in unthinkably low rates for many years. I spend my fear. Yes, well, 281 00:16:28,360 --> 00:16:30,880 Speaker 1: and it's been very profitable. We were aware of your 282 00:16:30,920 --> 00:16:34,560 Speaker 1: excellence on that. But what now more? The same were 283 00:16:34,600 --> 00:16:36,400 Speaker 1: the same? We've been in a one and a half 284 00:16:36,440 --> 00:16:38,600 Speaker 1: two and a half on the tenure. If we break out, 285 00:16:38,960 --> 00:16:41,680 Speaker 1: it will be a low side. Margaret, do you think 286 00:16:41,720 --> 00:16:46,080 Speaker 1: that the equation changes materially if we do get a sustained, 287 00:16:46,360 --> 00:16:49,880 Speaker 1: sustained inversion of the yield curve and increasing fear that 288 00:16:49,960 --> 00:16:53,840 Speaker 1: we could be reaching stall speed. I'm not looking for 289 00:16:53,880 --> 00:16:56,120 Speaker 1: an inverted de Old curve. I think we're basically going 290 00:16:56,120 --> 00:16:59,280 Speaker 1: to be looking at a somewhat flattish yield curve. But 291 00:16:59,360 --> 00:17:03,280 Speaker 1: I don't think it as an irrelevance or reflecting the economy. 292 00:17:03,400 --> 00:17:05,680 Speaker 1: To be clear, we're talking about the gap between ten 293 00:17:05,720 --> 00:17:07,119 Speaker 1: year and two year yields, because if you take a 294 00:17:07,160 --> 00:17:09,520 Speaker 1: look at the three month tenure yield, it's already inverted 295 00:17:09,560 --> 00:17:11,560 Speaker 1: in the same with a two year to five year yield. 296 00:17:11,840 --> 00:17:15,840 Speaker 1: So I'm just wondering, isn't that sending a concerning signal. Well, 297 00:17:15,880 --> 00:17:17,480 Speaker 1: it's been that way for quite a long time, and 298 00:17:17,600 --> 00:17:20,520 Speaker 1: hasn't it any effect on the economy or on inflation 299 00:17:20,720 --> 00:17:23,399 Speaker 1: or on business lending. So I really don't look at it. 300 00:17:23,440 --> 00:17:25,560 Speaker 1: I just think the curve will be so low, and 301 00:17:25,600 --> 00:17:28,800 Speaker 1: it is somewhat administered by the government that is irrelevant 302 00:17:28,800 --> 00:17:32,479 Speaker 1: for economic activity. Margat Patel as well as capital management, Margie, 303 00:17:33,200 --> 00:17:36,840 Speaker 1: you've had courage to say, look at if yields are 304 00:17:36,840 --> 00:17:40,119 Speaker 1: this troubled, look into equities, look at dividend growth and 305 00:17:40,160 --> 00:17:43,879 Speaker 1: share buy back with the elevated assets. Is there a 306 00:17:43,960 --> 00:17:48,359 Speaker 1: distinction between new cash flow or belief in cash flow 307 00:17:48,960 --> 00:17:53,440 Speaker 1: being applied to dividend or being applied to share buy back? 308 00:17:53,520 --> 00:17:56,879 Speaker 1: Which makes more sense to you. I don't think it 309 00:17:56,920 --> 00:18:00,680 Speaker 1: really matters what a company does with its free cash flow. Uh, 310 00:18:00,720 --> 00:18:03,520 Speaker 1: it's just a matter of a company choice. But I 311 00:18:03,560 --> 00:18:06,840 Speaker 1: think that the Copper down Amazon up really tells you 312 00:18:06,920 --> 00:18:08,679 Speaker 1: what the trend of the market is going to be 313 00:18:08,720 --> 00:18:11,440 Speaker 1: over the next few years. Marky, thank you so much, 314 00:18:11,480 --> 00:18:15,080 Speaker 1: greatly appreciated with Wells Capital management and that that's her magic. 315 00:18:15,440 --> 00:18:27,119 Speaker 1: I love what she said there Anthony Phillipson has not 316 00:18:27,160 --> 00:18:30,960 Speaker 1: only been the High Commissioner to Singapore but also John 317 00:18:30,960 --> 00:18:35,639 Speaker 1: Ferrell directly involved in the exiting process and trade and 318 00:18:35,760 --> 00:18:39,240 Speaker 1: partnerships to Europe as well. And John, I go back 319 00:18:39,280 --> 00:18:42,240 Speaker 1: on this historic day to the clear memories of the 320 00:18:42,320 --> 00:18:46,199 Speaker 1: morning after the Brexit vote walking down the corridor at 321 00:18:46,200 --> 00:18:49,240 Speaker 1: our London offices and there were there, you were doing 322 00:18:49,280 --> 00:18:53,040 Speaker 1: a marathon on the desk. We had no idea where 323 00:18:53,040 --> 00:18:55,280 Speaker 1: this would add on that morning after. I think the 324 00:18:55,280 --> 00:18:57,000 Speaker 1: one thing people really didn't have a clue about is 325 00:18:57,040 --> 00:18:58,840 Speaker 1: how long it would take. Three and a half years, 326 00:18:58,840 --> 00:19:01,360 Speaker 1: and we finally stopped and make a move. Her Majesty's 327 00:19:01,359 --> 00:19:04,200 Speaker 1: tried Commissioner for North America, Anthony Phillipson joined us now. Anthony, 328 00:19:04,200 --> 00:19:06,359 Speaker 1: always great to catch up with you, walk us through it. 329 00:19:06,400 --> 00:19:11,560 Speaker 1: Then eleven pm UK time, what actually happens, Well, good 330 00:19:11,600 --> 00:19:13,160 Speaker 1: morning to all of you, and thank you very much 331 00:19:13,160 --> 00:19:15,400 Speaker 1: for having me on. As you say, it's a it's 332 00:19:15,400 --> 00:19:19,399 Speaker 1: a historic occasion, it's a significant momentum. At eleven pm 333 00:19:19,520 --> 00:19:22,760 Speaker 1: UK time this evening six pm New York, the UK 334 00:19:22,920 --> 00:19:26,920 Speaker 1: will leave the EU. We will end our almost forty 335 00:19:26,960 --> 00:19:30,960 Speaker 1: seven year membership, but it will become a new chapter 336 00:19:31,040 --> 00:19:35,160 Speaker 1: in our relationship with our European and our EU partners. 337 00:19:35,240 --> 00:19:38,600 Speaker 1: We have an ambition to a close economic and defense 338 00:19:38,640 --> 00:19:42,320 Speaker 1: and security and indeed people to people relationship. In London itself, 339 00:19:42,760 --> 00:19:46,359 Speaker 1: the Prime Minister will speak to the nation around about 340 00:19:46,480 --> 00:19:50,520 Speaker 1: ten pm understand or five pm New York. There will 341 00:19:50,560 --> 00:19:54,960 Speaker 1: be some visual displays around London, but I think it 342 00:19:55,000 --> 00:19:58,600 Speaker 1: will be a moment of significance and momentous in a 343 00:19:58,600 --> 00:20:01,520 Speaker 1: momentous occasion. But it's just the beginning in a new chapter, 344 00:20:01,680 --> 00:20:04,000 Speaker 1: perhaps in name only. The rules will still apply. The 345 00:20:04,119 --> 00:20:07,360 Speaker 1: UK will still pay into the EU's budget as well Antony, 346 00:20:07,400 --> 00:20:09,480 Speaker 1: as you well know, through the rest of this year 347 00:20:09,480 --> 00:20:13,000 Speaker 1: eleven months, we have to secure a transition deal, I 348 00:20:13,040 --> 00:20:16,439 Speaker 1: guess secure secure the future relationship. So we're in this 349 00:20:16,480 --> 00:20:20,560 Speaker 1: transition period for the rest of What is the government 350 00:20:20,600 --> 00:20:23,240 Speaker 1: looking for and if we established what the red lines 351 00:20:23,280 --> 00:20:26,040 Speaker 1: are for the relationship between the UK and the EU 352 00:20:26,160 --> 00:20:30,439 Speaker 1: be on I think we have to some degree The 353 00:20:30,440 --> 00:20:34,280 Speaker 1: political declaration that was agreed between the government and the 354 00:20:34,320 --> 00:20:37,800 Speaker 1: European the other twenty seven member states in October last 355 00:20:37,920 --> 00:20:40,920 Speaker 1: year gives us a blueprint for what that future relationship looks. 356 00:20:40,960 --> 00:20:44,800 Speaker 1: Like we will now be working out our own mandate 357 00:20:44,840 --> 00:20:48,680 Speaker 1: and negotiating position, as will the European Commission on behalf 358 00:20:48,680 --> 00:20:52,840 Speaker 1: of the member states, and we anticipate those negotiations beginning 359 00:20:53,760 --> 00:20:55,600 Speaker 1: early March. And then, as you say, we have the 360 00:20:55,600 --> 00:20:58,199 Speaker 1: rest of this year while we are in the implementation period. 361 00:20:59,080 --> 00:21:03,040 Speaker 1: That gives this that period of transition and certainty to 362 00:21:03,040 --> 00:21:05,240 Speaker 1: to work out the fine detail and that's what both 363 00:21:05,240 --> 00:21:08,200 Speaker 1: sides are committed to, Anthony. Earlier this week, UK Prime 364 00:21:08,200 --> 00:21:11,080 Speaker 1: Minister Boris Johnson coming out and saying that they are 365 00:21:11,119 --> 00:21:13,320 Speaker 1: going to give Yahwei some of the contracts to help 366 00:21:13,359 --> 00:21:16,840 Speaker 1: build out their infrastructure. How much does that complicate your 367 00:21:16,880 --> 00:21:22,880 Speaker 1: job right now? That process was incredibly detailed, thought through, 368 00:21:23,000 --> 00:21:25,520 Speaker 1: an incredible detail, with a very very high degree of 369 00:21:25,560 --> 00:21:28,280 Speaker 1: focus on the security and resilience of our telecom system. 370 00:21:29,080 --> 00:21:31,360 Speaker 1: It's it's a process be running for a long long 371 00:21:31,400 --> 00:21:33,119 Speaker 1: period in terms of how we approach what we call 372 00:21:33,200 --> 00:21:36,440 Speaker 1: high risk vendors, and the decision that the government took 373 00:21:36,720 --> 00:21:40,119 Speaker 1: reflects the particular circumstances for the UK. It is a 374 00:21:40,160 --> 00:21:42,919 Speaker 1: decision that we have explained in detail to our American colleagues, 375 00:21:42,960 --> 00:21:47,040 Speaker 1: including this week when Secretary Pompeio was in London, and 376 00:21:47,119 --> 00:21:49,400 Speaker 1: we will keep explaining to them why we believe this 377 00:21:49,440 --> 00:21:51,080 Speaker 1: is the right decision for us, why it does not 378 00:21:51,320 --> 00:21:55,480 Speaker 1: endanger our own security and resilience of our telecom's network, 379 00:21:55,920 --> 00:21:59,440 Speaker 1: and why it is it should not affect the bilateral 380 00:21:59,480 --> 00:22:03,159 Speaker 1: partnership between ourselves and off places security and Trade and 381 00:22:03,200 --> 00:22:06,440 Speaker 1: Economic Council General. Thank you so much for joining us 382 00:22:06,440 --> 00:22:09,280 Speaker 1: this morning, Anthony Phillipson with the United Kingdom on this 383 00:22:09,400 --> 00:22:24,240 Speaker 1: historic date. I lean Burbage joining us now, yeah, she 384 00:22:24,359 --> 00:22:26,320 Speaker 1: is an arsenal. That's not what I was gonna talk. 385 00:22:27,800 --> 00:22:30,360 Speaker 1: That's great. I would leave that. I'll leave that. I'll 386 00:22:30,440 --> 00:22:33,480 Speaker 1: leave that for you, Island Burbage. We're gonna talk Amazon partner, 387 00:22:33,560 --> 00:22:37,160 Speaker 1: co founder of Passion Capital Investors, with years and years 388 00:22:37,160 --> 00:22:41,080 Speaker 1: of experience covering this industry. I thank just how good 389 00:22:41,359 --> 00:22:43,399 Speaker 1: we're Amazon's earnings. I mean, does this give you a 390 00:22:43,480 --> 00:22:46,280 Speaker 1: sense that right now the guy is a limit and 391 00:22:46,280 --> 00:22:49,400 Speaker 1: basically Amazon has as a lot more road to run here. 392 00:22:50,880 --> 00:22:52,920 Speaker 1: It absolutely does, it really does. And by the way, 393 00:22:52,920 --> 00:22:55,520 Speaker 1: we've got NFL matches now here in London, so I'm 394 00:22:55,560 --> 00:22:57,879 Speaker 1: all about following the NFL again as well as the 395 00:22:57,920 --> 00:23:01,080 Speaker 1: summer League too, But yeah, no, the thing about Amazon 396 00:23:01,240 --> 00:23:04,520 Speaker 1: is they do such a great job of managing expectations 397 00:23:04,600 --> 00:23:06,000 Speaker 1: that then when they blow it out of the water, 398 00:23:06,080 --> 00:23:08,159 Speaker 1: they really do blow out of the water. Everyone was 399 00:23:08,200 --> 00:23:11,240 Speaker 1: expecting that revenues would go up like they did, but 400 00:23:11,320 --> 00:23:14,400 Speaker 1: everyone was a little bit, you know, worried about maybe profitability, 401 00:23:14,720 --> 00:23:16,440 Speaker 1: thinking about the costs that we're going to go into 402 00:23:16,480 --> 00:23:19,520 Speaker 1: fulfillment and to try and get everybody owns the day, 403 00:23:19,640 --> 00:23:22,120 Speaker 1: same day or next day shipping with time. And they 404 00:23:22,160 --> 00:23:24,360 Speaker 1: still blew it out of the water. So in terms 405 00:23:24,400 --> 00:23:26,480 Speaker 1: of the question about how much more runway there is 406 00:23:26,560 --> 00:23:29,040 Speaker 1: to go, they haven't finished all the youngers and the 407 00:23:29,119 --> 00:23:31,600 Speaker 1: conversions to next day to delivery for farm so there's 408 00:23:31,600 --> 00:23:33,800 Speaker 1: still a lot more to go there and they've shown 409 00:23:33,840 --> 00:23:36,520 Speaker 1: they can do that while managing costs. Uh they're still 410 00:23:36,520 --> 00:23:40,160 Speaker 1: growth in Amazon Web services and cloud, even though that's slowing, 411 00:23:40,280 --> 00:23:43,080 Speaker 1: it's still massive, and they added ten billion dollars worth 412 00:23:43,080 --> 00:23:45,760 Speaker 1: of revenue from the year before on that, and then 413 00:23:45,800 --> 00:23:48,320 Speaker 1: of course they're still add so they are kind of 414 00:23:48,359 --> 00:23:51,720 Speaker 1: the night and shining owners industry at these from the 415 00:23:51,760 --> 00:23:53,880 Speaker 1: week gatter point of view, where they might be able 416 00:23:53,920 --> 00:23:57,640 Speaker 1: to break up advertising uh D wappoly between Google and Facebook, 417 00:23:57,680 --> 00:24:00,119 Speaker 1: so the little learning there too. And then the one 418 00:24:00,160 --> 00:24:02,720 Speaker 1: they still haven't really given us too much data about 419 00:24:03,040 --> 00:24:06,000 Speaker 1: are the devices which echo or even the use of 420 00:24:06,040 --> 00:24:08,639 Speaker 1: a Lexa for example. And how's your fiquitous We know 421 00:24:08,760 --> 00:24:11,240 Speaker 1: that's becoming. We don't know how much value that's bringing 422 00:24:11,240 --> 00:24:13,080 Speaker 1: into the bottom line, but that's something else they can 423 00:24:13,080 --> 00:24:15,760 Speaker 1: still fought of the hat. So Amazon now on track 424 00:24:15,880 --> 00:24:18,919 Speaker 1: to exceed a trillion dollars in market value yet again, 425 00:24:19,520 --> 00:24:21,880 Speaker 1: given the pop that we're seeing in their shares. When 426 00:24:21,880 --> 00:24:24,800 Speaker 1: you talk about this growth, particularly when it comes to sales, 427 00:24:24,840 --> 00:24:28,359 Speaker 1: retail sales, who are they taking business from most of 428 00:24:28,400 --> 00:24:31,880 Speaker 1: all at this point, Well, this one, I think they're 429 00:24:31,880 --> 00:24:34,840 Speaker 1: consolidating a lot of online sales, and obviously we know 430 00:24:34,920 --> 00:24:38,040 Speaker 1: the demise is forrick and mortar retails, that's happening anyway. 431 00:24:38,080 --> 00:24:40,199 Speaker 1: But in terms of share, they're clearly getting more and 432 00:24:40,200 --> 00:24:43,600 Speaker 1: more share um from other online retailers and e commerce providers. 433 00:24:43,960 --> 00:24:46,160 Speaker 1: The other thing I look at is that international growth 434 00:24:46,200 --> 00:24:50,000 Speaker 1: was only four for them, whereas in North America there's 435 00:24:50,000 --> 00:24:52,199 Speaker 1: still a lot more headway and a lot more for 436 00:24:52,240 --> 00:24:54,520 Speaker 1: them to gain abroad. When it's here in the UK 437 00:24:55,320 --> 00:24:57,680 Speaker 1: or another market outside of the home legion, and I 438 00:24:57,720 --> 00:24:59,480 Speaker 1: want to go to your expertise. So this goes back 439 00:24:59,520 --> 00:25:02,280 Speaker 1: to you. You were fifteen, you were at Sun Microsystems 440 00:25:02,320 --> 00:25:03,760 Speaker 1: and you know, a long time ago, and then you 441 00:25:03,920 --> 00:25:06,560 Speaker 1: dashed over to England and did Skype and all of 442 00:25:06,560 --> 00:25:10,879 Speaker 1: this tech techy stuff is about network effect. And if 443 00:25:10,920 --> 00:25:13,560 Speaker 1: you look at network effect, I mean Bezos has a 444 00:25:13,640 --> 00:25:17,960 Speaker 1: network effect with Amazon, including the bandwagon effect, which is 445 00:25:17,960 --> 00:25:22,320 Speaker 1: where everybody climbs on board. How are normal companies to 446 00:25:22,480 --> 00:25:29,119 Speaker 1: defend against the massive first movers status and network effects 447 00:25:29,119 --> 00:25:33,840 Speaker 1: that Amazon has wrought. Well, I think you're gonna you 448 00:25:33,920 --> 00:25:36,919 Speaker 1: can't actually come out and try and beat Amazon or 449 00:25:36,920 --> 00:25:39,159 Speaker 1: compete with it on its owne churp. You're gonna have 450 00:25:39,160 --> 00:25:41,199 Speaker 1: to come at it from a different angle, come up 451 00:25:41,200 --> 00:25:44,600 Speaker 1: with a niche satarian. We've seen more direct to consumer 452 00:25:44,960 --> 00:25:47,480 Speaker 1: brands and products come out um, and you gotta hope 453 00:25:47,480 --> 00:25:49,400 Speaker 1: that you build up at each other. You build up 454 00:25:49,960 --> 00:25:52,920 Speaker 1: a sort of leadership position in a category that Amazon 455 00:25:53,000 --> 00:25:55,600 Speaker 1: doesn't already dominate. So they're seen as a you know, 456 00:25:55,640 --> 00:25:58,240 Speaker 1: a general it's kind of e commerce provider, um. But 457 00:25:58,359 --> 00:26:00,640 Speaker 1: you see brands, whether it's Alberts for shoes, or even 458 00:26:00,760 --> 00:26:04,119 Speaker 1: Night which continues to dominate another superfly shoes. There are 459 00:26:04,200 --> 00:26:07,000 Speaker 1: going to be categories that Amazon can't compete with at 460 00:26:07,040 --> 00:26:09,919 Speaker 1: the highest levels. Answer that brand value. They're just now 461 00:26:09,960 --> 00:26:12,880 Speaker 1: seen as a general fulfilment providers from a retail point 462 00:26:12,880 --> 00:26:15,760 Speaker 1: of view. But I really think what's what striving corporate 463 00:26:15,840 --> 00:26:19,680 Speaker 1: values the enterprise side, cloud services and software that they use. So, Eileen, 464 00:26:19,760 --> 00:26:21,960 Speaker 1: let's turn to politics now. Then, with that in mind, 465 00:26:22,000 --> 00:26:24,360 Speaker 1: you've done a fremendous job over the last few years 466 00:26:24,400 --> 00:26:28,080 Speaker 1: of working with the British government and expanding investment in tech, 467 00:26:28,119 --> 00:26:31,159 Speaker 1: specifically in London over the last several years. Just looking 468 00:26:31,280 --> 00:26:33,320 Speaker 1: across the Atlantic into the United States. At the moment 469 00:26:33,359 --> 00:26:36,440 Speaker 1: here we have a massive company, Amazon with this huge 470 00:26:36,440 --> 00:26:39,679 Speaker 1: cloud business now basically providing all the capital for the 471 00:26:39,680 --> 00:26:43,200 Speaker 1: e commerce expansion, and a government a Washington, d C. 472 00:26:43,400 --> 00:26:46,080 Speaker 1: Scene at the moment where a lot of these names Amazon, 473 00:26:46,320 --> 00:26:49,440 Speaker 1: Facebook and the likes aren't very popular and I'm just 474 00:26:49,480 --> 00:26:51,920 Speaker 1: wondering what the future looks like for them? What does 475 00:26:51,960 --> 00:26:55,360 Speaker 1: it look like for them? Alene, Yeah, I think there's 476 00:26:55,400 --> 00:26:58,040 Speaker 1: a reason you're seeing all these companies spend record levels 477 00:26:58,040 --> 00:27:00,800 Speaker 1: on lobbying, and I think Amazon's in a really interesting position. 478 00:27:00,880 --> 00:27:03,120 Speaker 1: So I mentioned earlier, they could be the hedge against 479 00:27:03,160 --> 00:27:06,080 Speaker 1: the duop lee in advertising between Google and facements. But 480 00:27:06,119 --> 00:27:08,200 Speaker 1: on the other hand, with the own ship of Washington 481 00:27:08,240 --> 00:27:11,639 Speaker 1: Post and Bezo's personal interest and his lack of friendly 482 00:27:11,760 --> 00:27:14,400 Speaker 1: nature with Donald Trump, he could be really the subject 483 00:27:14,400 --> 00:27:16,960 Speaker 1: of a lot of scrutiny. And this Department of Defense 484 00:27:17,000 --> 00:27:19,639 Speaker 1: deal for instance that Amazon lost for cloud services for 485 00:27:19,760 --> 00:27:22,720 Speaker 1: a WS two Microsoft a year for example, is a 486 00:27:22,800 --> 00:27:26,480 Speaker 1: really really prime example of that. What would you expect 487 00:27:26,480 --> 00:27:30,080 Speaker 1: from Basils next? Does he just relentlessly stay with his 488 00:27:30,200 --> 00:27:33,880 Speaker 1: strategic plan or can I lean Bourbage Sea a twist 489 00:27:34,080 --> 00:27:38,440 Speaker 1: coming down the road? I mean, I think Bezos is 490 00:27:38,760 --> 00:27:40,760 Speaker 1: pretty on top of his game, so I'm pretty sure 491 00:27:40,800 --> 00:27:43,439 Speaker 1: he's got lots of continuency plans, lots of things up 492 00:27:43,440 --> 00:27:45,760 Speaker 1: to sleep. And I'm not worried about this business or 493 00:27:45,760 --> 00:27:48,239 Speaker 1: its potential or its ability to send from anything like 494 00:27:48,280 --> 00:27:51,080 Speaker 1: that um in the York to I mean, how concerned 495 00:27:51,080 --> 00:27:54,240 Speaker 1: are you about anti trust cases against Amazon given how 496 00:27:54,359 --> 00:27:57,879 Speaker 1: much control they have not only over their own products 497 00:27:58,080 --> 00:28:00,480 Speaker 1: and sort of their their clout there, but also with 498 00:28:00,920 --> 00:28:05,399 Speaker 1: independent independent shops that are operating on their website that 499 00:28:05,440 --> 00:28:10,040 Speaker 1: are not necessarily prioritized in source results. Yeah, I think 500 00:28:10,040 --> 00:28:12,200 Speaker 1: that that is a concern, but it's probably I don't 501 00:28:12,200 --> 00:28:14,800 Speaker 1: think antitrust is as much concerning to Amazon as it 502 00:28:14,880 --> 00:28:17,199 Speaker 1: might be for Google and Facebook. Where I would be 503 00:28:17,200 --> 00:28:19,280 Speaker 1: concerned if I was on the Amazon mobby inside or 504 00:28:19,320 --> 00:28:21,560 Speaker 1: public policy side, is what's going to come down the 505 00:28:21,600 --> 00:28:24,960 Speaker 1: pipe UM this year with respect to tax treatment and 506 00:28:25,000 --> 00:28:27,919 Speaker 1: whether or not they might get hit with really severe 507 00:28:27,960 --> 00:28:31,159 Speaker 1: tax bills, especially outside of North America. How much more 508 00:28:31,200 --> 00:28:33,320 Speaker 1: upside is there left in Amazon shares? Do you think? 509 00:28:35,359 --> 00:28:38,080 Speaker 1: I don't see UM an end insight. I really don't. 510 00:28:38,160 --> 00:28:42,320 Speaker 1: I think that they have continued to demonstrate solid, consistent, 511 00:28:42,560 --> 00:28:46,120 Speaker 1: responsible growth. They continue to show that they can control 512 00:28:46,200 --> 00:28:49,400 Speaker 1: costs UM. They'll experiment when they need to, they'll acquire 513 00:28:49,440 --> 00:28:52,560 Speaker 1: when they have to, they make strategic investments UM you know, 514 00:28:52,640 --> 00:28:56,160 Speaker 1: their acquisition or investment stars to stay in delivery here 515 00:28:56,200 --> 00:28:58,760 Speaker 1: in UK is UM you know, being looked at by 516 00:28:58,760 --> 00:29:01,880 Speaker 1: the competition of markets authority. But they are continuing to innovate, 517 00:29:02,200 --> 00:29:05,240 Speaker 1: and yet they also don't forget what really matters to 518 00:29:05,280 --> 00:29:08,280 Speaker 1: retail customers in terms of fulfillment the same day or 519 00:29:08,440 --> 00:29:11,000 Speaker 1: next day delivery and even things like doing their own 520 00:29:11,000 --> 00:29:14,040 Speaker 1: titles for Amazon Prime to make that a more interesting 521 00:29:14,040 --> 00:29:17,760 Speaker 1: composition actual media content, so I don't see a lot 522 00:29:17,800 --> 00:29:20,800 Speaker 1: of feeling to come. Eileen, Thank you so much. Eileen 523 00:29:20,840 --> 00:29:24,000 Speaker 1: Bourberich with us today from London. Thanks for listening to 524 00:29:24,040 --> 00:29:28,560 Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on 525 00:29:28,640 --> 00:29:34,480 Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm 526 00:29:34,480 --> 00:29:37,800 Speaker 1: on Twitter at Tom Keane before the podcast. You can 527 00:29:37,840 --> 00:29:41,040 Speaker 1: always catch us worldwide. I'm Bloomberg Radio