Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Ley.
Speaker 1: We bring you insight from the best in economics, finance,
Speaker 1: investment and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg Simon
Speaker 1: Kennedy are cricket expert. Here in our studios, Queen Victoria
Speaker 1: Street in charge of all economic government. I don't know
Speaker 1: what Simon does Brexit and anyways, Mr Kennedy said Trent
Speaker 1: Bridge in nodding, I don't know. I can't keep track.
Speaker 1: It's like the prime ministers. Who knows? Notdingham Shire? Is
Speaker 1: that what you call it? Nothingham? Okay, Nottingham That was
Speaker 1: like his childhood home. So for him it's as big
Speaker 1: as it's as big as Lords. But John, I didn't
Speaker 1: know this. Lord sees twenty eight thousand. Well it's cricket.
Speaker 1: It's very cool there and it sells out. And that's
Speaker 1: the voice of David Merritt. Go to cricket, I do,
Speaker 1: go to cricket. I've got my tickets for the summer.
Speaker 1: We've got the World Cup has just started here. Can
Speaker 1: you explaine him, David that it's a good day out
Speaker 1: of drinking. It's an excellent day out. There's a bit
Speaker 1: of sport in the background. There's Pakistan in England and
Speaker 1: people are like totally focused on this. Oh yeah, it's
Speaker 1: a big thing. It's a big thing. I'll take you
Speaker 1: to the game. How long you here for? There's some
Speaker 1: I have to go see the charts, don't I know
Speaker 1: that season's ended. Spurs done for the sleeping until everybody
Speaker 1: on a coast to coast in America's thank god, Premier
Speaker 1: League is done. I think there's a South American Cup
Speaker 1: that we can discuss, though, to fill in the boordom
Speaker 1: over the next coup, we have two esteemed guests here
Speaker 1: with a date calendar to a press company. We do
Speaker 1: Jenny Lennard joining a swell Bloomberg trade reporter David help
Speaker 1: us set us up in about what an hour from now,
Speaker 1: a joint news conference. I have no idea what it's about.
Speaker 1: What is it about? Well, it's going to be about everything.
Speaker 1: I suspect, you know, this is this the last time
Speaker 1: that's happened. Last time the president came, it went on
Speaker 1: for I think much longer than an hour. He takes
Speaker 1: questions from everybody. He has rather long answers, and there's
Speaker 1: a lot to cover here. We have Brexit obviously lurking
Speaker 1: in the background. We have the question, a big question
Speaker 1: about the US trade deal what that might look like.
Speaker 1: Lots of controversial comments from the American side. The last
Speaker 1: couple of days, Mrs May is gonna be asked about that.
Speaker 1: We've got questions about Iran, questions about Europe, and of
Speaker 1: course the big one who is Mrs May's successor going
Speaker 1: to be Um? He is not shy about wading into
Speaker 1: that debate, and you can bet your going to be
Speaker 1: really awkward. I agree, Jenny, this as important as you
Speaker 1: work out of Washington, and of course the expertise is trade.
Speaker 1: How would you suggest a president or response you after
Speaker 1: the pump and circumstance of forty eight hours when somebody
Speaker 1: goes something about Mueller or bar or name the other
Speaker 1: scandal of your Washington, How does responned well? Trade for
Speaker 1: President Trump is always sort of a pivot away from
Speaker 1: domestic politics. Are ugly? Yeah, somebody brings up Mexico and
Speaker 1: immigration in the border wall. Is he going to be
Speaker 1: offended that these questions are being asked in England? I
Speaker 1: don't know that he will be defensive about it. I
Speaker 1: think he's actually about the Mexico border wall and his
Speaker 1: latest announcement of tariffs coming on Mexico. I think he's
Speaker 1: happy to talk about that. I think he's pretty confident
Speaker 1: that that will, you know, solve the problem that you know,
Speaker 1: no one in Congress is going to throw a wrench
Speaker 1: in that. And and I'm sure who would be happy
Speaker 1: to ask answer all kinds of questions. It's difficult to
Speaker 1: find a topic that both individuals can speak to that
Speaker 1: just seems to be a bunch of separate, different things
Speaker 1: going on that you want to one ask Prime Minister
Speaker 1: make and that you would like to ask the President
Speaker 1: of the United States. One thing of a couple of
Speaker 1: things that I think both can speak to is Shuawei David,
Speaker 1: and I just wonder to what degree that has been
Speaker 1: discussed in the last twenty four hounds. Yeah, well this
Speaker 1: is this is definitely on the agenda when the two
Speaker 1: met in Danning Street earlier today. And again, of course
Speaker 1: it's something else that they both disagree on. Mr Trump's
Speaker 1: trying to ladle on the pressure for Britain to change
Speaker 1: its mind and to join with them in restricting Hawawei
Speaker 1: completely from building the five G networks. So far Britain
Speaker 1: has said it's it needs Huawei, it needs this to
Speaker 1: do it in a in a cost effective measure. Um
Speaker 1: that is she going to crumble? Is she going to say? Well,
Speaker 1: in fact, the Americans have helped just change her. Then
Speaker 1: twisting there and dug what what what are the ramifications
Speaker 1: if she crumbles or doesn't crumble? Well, the big arm
Speaker 1: twisting is around the sharing of intelligence Britain and America.
Speaker 1: Britain particularly prides itself on being having this special access
Speaker 1: to American intelligence and that has been one has been
Speaker 1: put at threat in the last few weeks. They've said, well, look,
Speaker 1: if you're going to insist on having your networks done
Speaker 1: by Huawei, we're not gonna be able to send you
Speaker 1: all of our intelligence. Johnian Leonard the Bucking Impels yesterday,
Speaker 1: along with Secretary Molution taking a video of it off
Speaker 1: as iPhone, were the worthies of the Trump at wustration
Speaker 1: lined up. And there was Steven Miller who was on
Speaker 1: the trip and he's part of the border wall in
Speaker 1: immigration debate. How does he fit in to the trip
Speaker 1: and how does he fit in to the linkage to
Speaker 1: trade with Mexico. Good question that the trip, it's you
Speaker 1: got it gets a good question. The trumpet wise advisors
Speaker 1: that came on the trip kind of do not fit
Speaker 1: in its minutent. And his wife here but you know
Speaker 1: they're talking about trade in the U. S. Trade rep
Speaker 1: isn't coming, so you know, is not here. He's not here,
Speaker 1: He's not part of the trip, which I think the
Speaker 1: constellation of people is a little bit interesting. Stephen Miller
Speaker 1: is of course, one of the architects of Trump's immigration policy.
Speaker 1: UH to Wawwei. I think one interesting thing is that
Speaker 1: Trump himself isn't really consistent when he talks about Wawei,
Speaker 1: right well, I mean we heard him. We heard him
Speaker 1: say before he left for Japan a couple of weeks ago,
Speaker 1: you know, Wawe is a really big intelligence risk. Our
Speaker 1: national security folks are really were read about it. And
Speaker 1: in the next sentence he says, well, maybe we wrap
Speaker 1: this into a trade deal, which makes his advisors, his
Speaker 1: national security advisors, really uncomfortable because they don't want to
Speaker 1: want this to be, you know, kind of part of
Speaker 1: a trade discussion that could be traded away because they
Speaker 1: want actually to focus on uh you know, convincing allies
Speaker 1: like the UK to go through with banning Hua Awei
Speaker 1: from from this. So we'll see if Trump gets asked
Speaker 1: about it, if he has a consistent message here, uh,
Speaker 1: and then and then we'll see what Primeister may have. Jenny,
Speaker 1: certainly at home, no problem convincing both Democrats and Republicans
Speaker 1: of the push around China and Huaweifi that matter. When
Speaker 1: it comes to Mexico a very different story. Interesting development overnight,
Speaker 1: some great reporting from the team in Washington, Jenny that
Speaker 1: maybe Senate Republicans are looking to push back against this effort.
Speaker 1: How can they formalize that? What can they do so
Speaker 1: they could pass a resolution of disapproval, which you have
Speaker 1: to overcome a mutual proof majority, which we've seen in
Speaker 1: the past when they have tried to do that. That's
Speaker 1: actually more difficult then you think. And I would note
Speaker 1: to anyone who you know is looking at this with
Speaker 1: maybe some optimism that Congress could stop Trump on his
Speaker 1: trade agenda, don't hold your breath. We've seen this before
Speaker 1: on national security tariffs, steal aluminum with autos. We've seen
Speaker 1: kind of a momentum even from his own party saying
Speaker 1: this might be a step too far. I don't know
Speaker 1: if they can actually swing this one. And now one
Speaker 1: final question, fair when I counting the minutes of no Brexit,
Speaker 1: no leave, are you bringing question David? I have to Okay,
Speaker 1: there's the headline the President maybe we'll meet with Mr Gove.
Speaker 1: What level of Brexit is Mr Gov And does the
Speaker 1: President greet him as a brexit here like the others. Well,
Speaker 1: he suddenly was one of the architects of the Brexit campaign.
Speaker 1: But if you look at the spectrum now, or that
Speaker 1: the Brexit rainbow, if you like, the Tory hits somewhere
Speaker 1: in the middle. Actually, you know he's not actually going
Speaker 1: out and advocates we storm out with no deal come
Speaker 1: what may, which is what Mr Johnson and Mr rob
Speaker 1: are saying. He was the one who stuck by Mrs
Speaker 1: Maid through second thin. He voted for her deal. Remember
Speaker 1: he didn't leave the cabinet saying this is a subject
Speaker 1: in Britain to European laws forever. So here's a loyalist
Speaker 1: to the Prime minister. He is more of a Centrists.
Speaker 1: He says we should find a middle way. And it's
Speaker 1: very interesting that Mr Trump has chosen to use his
Speaker 1: spare time this afteron to meet with him rather than
Speaker 1: with Mr Johnson, as was suggesting very kind to Mr
Speaker 1: of describing him as a loyalist. Well, okay, strategically known
Speaker 1: as Macbeth. But he has I think it's undeniable, you know,
Speaker 1: he was. He was the heaviest way to actually stick
Speaker 1: with Mrs Mayor throughout this. Now you can you can
Speaker 1: question his motives for that? Is it because he was
Speaker 1: lining himself up for where he is now for the job.
Speaker 1: Possibly David the windsor lamb snap? Is that like lambs
Speaker 1: that they kill off the hills of the winter. I
Speaker 1: don't think they go out and shoot them themselves like
Speaker 1: they do the deer. Perhaps in the pheasant I think
Speaker 1: they're probably sent to the Abbotts Fare, but I guess
Speaker 1: they must be. They're a sheep and I walk my
Speaker 1: dog and wins a great park sometimes that the weekend,
Speaker 1: and there are definitely you know, dotted sheep. You should
Speaker 1: get over to. Winter is beautiful. I can't compete with this,
Speaker 1: me and Vette mill for making it out of the
Speaker 1: circle park and we're lucky to the baseball. You do
Speaker 1: what with your dog? Well it's not far, you know,
Speaker 1: my my son goes to schooler there, so I I
Speaker 1: walk my dog And how do you say it's like
Speaker 1: nasty Bush. I don't think. I don't think says nasty.
Speaker 1: You get all sorts of around wins. And I'm telling you,
Speaker 1: David Merrick, we're saying thank you to David, were saying
Speaker 1: thank you to Jenny, and we're going from London for
Speaker 1: our audience worldwide this Unfortunately today it's still Bloomberg surveillance.
Speaker 1: Let's bringing mind Ryan Shower you bus Americans see I oh,
Speaker 1: he joins us on this program. Great to catch up with.
Speaker 1: You might walk us through the essence of the research
Speaker 1: that you guys have put out. Well, good more and Jonathan,
Speaker 1: thank you. Well. First of all we try to do
Speaker 1: is we tried to lay the framework out for what's
Speaker 1: likely to be a pretty certainly entertaining but also informative
Speaker 1: series of debates that are going to happen between the
Speaker 1: Democratic candidates, but also begin to set our sitelines a
Speaker 1: little further afield. Obviously, the election is going to have
Speaker 1: huge implications not only in terms of who is a
Speaker 1: resident of the White House, but also the composition of Congress.
Speaker 1: Before we get there, though, we need to talk about
Speaker 1: what the major issues are going to be focused on.
Speaker 1: So one of the things we did in that report
Speaker 1: was we highlighted a number of focus issues they we're
Speaker 1: gonna be writing follow up reports on over the course
Speaker 1: of between now and the election. These includes in issues
Speaker 1: ranging from a regulatory environment, to tax issues, to health care,
Speaker 1: to and for structure immigration policies. These are things that
Speaker 1: are critical not only to voters, but certainly two investors
Speaker 1: as well. Looking at the situation, going into something a
Speaker 1: lot of people got very very wrong was framing the
Speaker 1: president of the United States now President Donald Trump as
Speaker 1: the risk off candidate, the high vul risk golf candidate
Speaker 1: Mike And what we found out subsequently is he was
Speaker 1: anything but for much of the first year. How are
Speaker 1: we framing the two parties from a market perspective just
Speaker 1: in terms that he invest the bias? Right now, what
Speaker 1: is it around these two parties? Well, I do think
Speaker 1: when you when you think about the potential candidates, and
Speaker 1: obviously it's it's very very early start handicapping who could
Speaker 1: emerge from the Democratic field as the as the ultimate nominee.
Speaker 1: But as we think about this um, this field where
Speaker 1: we're gonna be focused on now is where the policy
Speaker 1: pass start to lead. Obviously, one of the things we
Speaker 1: saw from the election of Donald Trump was a focus
Speaker 1: on several things. One was on regulatory reform and others
Speaker 1: on tax relief, which were very market friendly the concerns.
Speaker 1: Of course, whoever emerged from the Democratic field could take
Speaker 1: a very very different posture on both of those. That
Speaker 1: could be talking about increasing taxes in the way of
Speaker 1: closing the duct the budget deficit, but also of reimposing
Speaker 1: some of the regulations that have been put in place
Speaker 1: during the Obama administration. Mike, what's fascinating to me, And
Speaker 1: this is the last couple of days, I've seen articles
Speaker 1: that clearly show there's no policy traction yet among the
Speaker 1: many Democratic candidates, people learned focused on it, which I
Speaker 1: you know, I guess I understand. I guess we learned
Speaker 1: healthcare mattered in the mid terms. Do we get to
Speaker 1: the first or the fourth or debate in healthcare just
Speaker 1: becomes the topic as we saw in the mid terms,
Speaker 1: It certainly could be time. I think it's gonna be.
Speaker 1: First of all, as as you as you mentioned, it's
Speaker 1: it's really early to story handicapping exactly how the policy
Speaker 1: path will map out and also who will emerge as
Speaker 1: the primary candidates. However, when you look across the field,
Speaker 1: what you do see as some commonality, healthcare is one
Speaker 1: of the that emerges from almost all of the potential
Speaker 1: candidates from the Democratic side. So there's no question that
Speaker 1: over the course of debates and going into the party convention,
Speaker 1: healthcare is going to emerge. Is one of the critical
Speaker 1: issues for the Democrats. Listening to some investors out there,
Speaker 1: I always think that some investors receive more attention that
Speaker 1: maybe they deserve. Stan Drumla is not one of those investors.
Speaker 1: He spoke yesterday evening and said the following when the
Speaker 1: Trump tweet went out. He's referring to the Trump tweet
Speaker 1: on China. A number of weeks ago, I went from
Speaker 1: invested to net flat and bought a bunch of treasuries.
Speaker 1: Not because I'm trying to make money. I just don't
Speaker 1: want to play in this environment. Talk to me about
Speaker 1: this environment right now and whether you can play in
Speaker 1: this environment. Well, we want to be really careful about it.
Speaker 1: Is not to play two tactically against trade. You know,
Speaker 1: our our view as we want to maintain a relatively
Speaker 1: balanced portfolio or ultimate view is that we do think
Speaker 1: a pathway will be found for a framework and an
Speaker 1: agreement between the US and China. But remember John, this
Speaker 1: is the the issues that the U. S And China
Speaker 1: are contending with have been decades in the making. The
Speaker 1: notion that we're gonna solve this in in six or
Speaker 1: twelve or eighteen months, or that we're gonna come to
Speaker 1: this comprehensive agreement that the two parties signed have a
Speaker 1: big signing ceremony, I think it's all native. Instead, I
Speaker 1: think you'll see is they will be First of all,
Speaker 1: we do expect to see some more back and forth
Speaker 1: between the U. S and China, but ultimately it's it's
Speaker 1: in both parties interests to come to some sort of
Speaker 1: framework that allows for the following the eventual easing of tariffs,
Speaker 1: but it has to come with verification. But you mentioned
Speaker 1: the key item, and we've heard this in London in
Speaker 1: different conversations in both parties interests is a rational statement.
Speaker 1: Have we seen rationality in these trade debates? You can
Speaker 1: argue there has been rationality because so forth it's has
Speaker 1: been about how you posture and how you try and
Speaker 1: gain tech for advantages. Nothing there's nothing irrational about that.
Speaker 1: What it is irrational is if you take it to
Speaker 1: its endgame, where you see both parties back in the
Speaker 1: corns into a corner. But I'm looking at West Texas Intermediate,
Speaker 1: which John I haven't really brought up in weeks, and
Speaker 1: I've got an exceptionally elegant shirt from sixty three straight
Speaker 1: down to one. And you know, you look at as
Speaker 1: a proxy for global demand, oil demand and also the
Speaker 1: economic demand. It's out there and it's speaking volumes. I
Speaker 1: think reading the data right now, it's really difficult. We
Speaker 1: had some I S M and P M I yesterday
Speaker 1: weakness Tom and slightly disappointing as well. Relative to the
Speaker 1: solid economy that was painted by the data, yeah, a
Speaker 1: number of months ago. It's not there in the same way.
Speaker 1: And I think if there's any anxiety right now, Mike,
Speaker 1: it's always about the DOWTA. Where does the change come from?
Speaker 1: In China, we know it's weaker relative to where we
Speaker 1: were before. In Europe, we know it's weaker relatives to
Speaker 1: where we before we were before. The unknown seems to
Speaker 1: be the United States, Mike. What is happening with the
Speaker 1: this U S economy? Is it just a return to
Speaker 1: trend growth or do we overshoot? What's the answer, Mike, Yeah,
Speaker 1: I don't think we overshoot at I think with you're saying, look,
Speaker 1: we've had these these periodic growth slowdowns throughout this entire expansion.
Speaker 1: I think we're seeing one right now. I'd also argue
Speaker 1: that if you if you actually look through the data,
Speaker 1: we are starting to see some signs now of some
Speaker 1: underlying strength. So we don't think the economy is set
Speaker 1: to roll over, nor do we think their session risks
Speaker 1: are particularly acute. We are walking through a period of
Speaker 1: weaker data at least certainly versus consensus expectations, but we
Speaker 1: still expect to see growth somewhere towards trend over the
Speaker 1: course of this year. In two thousand two, Micael Ryan,
Speaker 1: thank you so much with ubs political statement, and of
Speaker 1: course we will have much more from Mr Ryan and
Speaker 1: his team in the coming eighteen months. Guy Johnson is
Speaker 1: with us who has memorized the resume of every prime
Speaker 1: minister of candidate. At the end there Guy Johnson, who
Speaker 1: is Jeremy that he was speaking down to Mr Jeremy Hunt,
Speaker 1: the Foreign Secretary um and asking him whether or not
Speaker 1: one of his competitors would do a good job. And
Speaker 1: I suspect that, Jeremy, what are the shades of the
Speaker 1: What are the shades of the Conservative Party right now?
Speaker 1: For Americans? Are American listeners in Morning America? I would
Speaker 1: suggest it's a bit confusing. There's Boris with a hair
Speaker 1: like Trump, and there's everybody else. What are the shades? Yeah,
Speaker 1: interuting to see the two standing next door to each other,
Speaker 1: wouldn't it We may you never know that might that
Speaker 1: might happen? And as the President suggested, um that the
Speaker 1: two our friends. Um. Look, basically, you've got a Conservative
Speaker 1: Party split into two basic factions, one of which is
Speaker 1: the hard Brexiteers, of which Boris Johnson is the most
Speaker 1: obvious candidate, but there are others, and then you've got
Speaker 1: the more centrist candidates who are pushing back and are
Speaker 1: concerned about the possibility of a hard Brexit. Um. The
Speaker 1: Conservative Party has sort of been split in this way
Speaker 1: for really quite some time. At the moment, Tom, the
Speaker 1: best thing is that a hard Brexit here is likely
Speaker 1: to win out if that is Boris Johnson, will he
Speaker 1: actually deliver upon that hard brexit? Boris has changed his
Speaker 1: spots one or two times. Yes, I see that within
Speaker 1: the British media, the vibrant newspapers of this London. You
Speaker 1: see that every day. But then you get to October
Speaker 1: thirty one, every date has been extended. Do you and
Speaker 1: the British media just assume it's another can to be
Speaker 1: kicking down the road? We went see, we can probably
Speaker 1: ask the question to the French. The French seemed very
Speaker 1: keen that that date is more firm than maybe others
Speaker 1: are suggesting at this stage that a deal needs to
Speaker 1: be done. At this point, I think it's very hard
Speaker 1: to get your arms around understanding whether or not that
Speaker 1: would be the case. Um, I think the EU would
Speaker 1: be nervous about forcing a hard Brexit. Are you with
Speaker 1: Ronnie Queen here? In twenty minutes? I am with Fonny
Speaker 1: quin will be in New York, though I'll be I'll
Speaker 1: be with her here. She'll be with me in spirit
Speaker 1: here as well. Wonderful chemistry as well there between the
Speaker 1: Irish and the Britishers of Anny Quinn and Guy Johnson
Speaker 1: moved the dialogue Ford on Bloomberg Television, Tom, we are
Speaker 1: very fortunate to welcome to the Bloomberg and Actor Broker
Speaker 1: Studio Bob Diamond, partner and founding partner and CEO of
Speaker 1: Atlas Merchant Capital, of course, former CEO of Barkley's. Bob,
Speaker 1: thanks so much for joining us in studio. UM, I
Speaker 1: know you're here for the Bloomberg invest Conference. I just wonder,
Speaker 1: you know, just given what we heard from President Trump
Speaker 1: and Teresa May, one of the topics obviously is Brexit.
Speaker 1: Given your experience in the UK with Barkley's and so on,
Speaker 1: how do you think this is going to play out
Speaker 1: in your opinion? You know, it's the question of the day,
Speaker 1: and I think we're not going to know until leadership
Speaker 1: is is settled, which we've been talking about in the
Speaker 1: Conservative Party. It's going to take leadership to deliver this. Um.
Speaker 1: You know my starting position as it was a bad decision,
Speaker 1: but I think it is what it is, and now
Speaker 1: it's about implementation and execution and moving forward and certainty.
Speaker 1: And I think the business community, in particular in the
Speaker 1: financial services industry needs certainty. So I think the next
Speaker 1: leader has to be someone that we can be confident
Speaker 1: can deliver and execute. Is it your sense, given you
Speaker 1: know your understanding of a British corporate Um, you know,
Speaker 1: politics and what's going on. Is it your sense that
Speaker 1: corporations in the UK have done what they can to
Speaker 1: prepare for what might be a less than clean Brexit. Yeah,
Speaker 1: I would say a couple of things, Paul. It's a
Speaker 1: it's a good point. And through Panmore Gordon, which is
Speaker 1: the middle market broker dealer that we're we're an owner
Speaker 1: of in the UK, we talked to small businesses every
Speaker 1: day and they have moved on so they fully expect Brexit.
Speaker 1: I think they're to your point as prepared as they
Speaker 1: can be right now. And I think if you asked
Speaker 1: the chief executives, they'd say, to a person, we just
Speaker 1: want certainty and we want to move forward. I think
Speaker 1: the kinds of things they were hearing today about the
Speaker 1: potential for trade agreements with the US and UK will
Speaker 1: be will be taken very very positively. But it's certainty
Speaker 1: more than anything else that they need now. Bob Diamond,
Speaker 1: Tom keenan London and we say good morning here from
Speaker 1: the reign of London Light Rain, I should say beautiful.
Speaker 1: As the President moves on with his day. You have
Speaker 1: an uncommonly direct relationship with Boris Johnson, going back to
Speaker 1: his time as mayor, with your leadership with Barclays and
Speaker 1: for all of our listeners worldwide identified with Premier League sponsorship,
Speaker 1: but particularly those bikes pedaling around And I can I'll
Speaker 1: say right now, folks without editorializing that Bob Diamond's leadership
Speaker 1: and getting bikes around cities, maybe it was your most
Speaker 1: it was your most profound effect. Bob tell us about
Speaker 1: the border Johnson, you know, and can he get along
Speaker 1: with multinational business in London. So I as you say, Tom,
Speaker 1: I've known Boris for over twenty years. I think he
Speaker 1: was an absolutely terrific mayor. I think London, why is
Speaker 1: he a lightning rod of criticism? I think I think
Speaker 1: many great leaders can be can be lightning rods. I
Speaker 1: think this whole process of Brexit, um, I think everyone
Speaker 1: has come out, you know, around an issue that divided
Speaker 1: the country this much. Of course there's going to be
Speaker 1: some light lightning rod impact. But you know, I even
Speaker 1: worked on the Mayor's Fund for London. When Boris set
Speaker 1: up a fund for London, it was to ensure that
Speaker 1: young children um had a good introduction to school and
Speaker 1: that meant everything from making sure they had meals when
Speaker 1: they got to school to making sure that the teachers
Speaker 1: were prepared, and it was a recognition. He never talked
Speaker 1: about it, he never got credit for it, but it
Speaker 1: was a recognition that the importance for London of the
Speaker 1: younger generation, young kids getting a good start in school.
Speaker 1: But I think what he brings, what he brought to
Speaker 1: London was he's really really smart. He's a really really
Speaker 1: strong leader. He's very very strategic, and he's willing to
Speaker 1: make bold decisions. And I think, um, you know, right now,
Speaker 1: when we're looking at execution, execution, execution being critical, we
Speaker 1: know the direction that we're going on Brexit, it's all
Speaker 1: about execution. That's the kind of leadership that we need.
Speaker 1: How would Prime Minister Johnson be different from President Trump.
Speaker 1: I mean they've got the same blonde hair. There's a
Speaker 1: story about that may able to get the Bob Diamond
Speaker 1: look going. But but how is Mr Johnson different from
Speaker 1: Mr Trump? Yeah, I don't think there's any similarities really.
Speaker 1: I guess the fluffy hair might be. But you have
Speaker 1: to go back over over the time that that the
Speaker 1: Boris has had real impact and I look at the
Speaker 1: London of today. One of the reasons that you know
Speaker 1: that city has weathered all the if I can call
Speaker 1: it the kerfuffle of Brexit, not Brexit, maybe Broxit sometimes Brexit.
Speaker 1: Where is everyone going? London is still the key financial
Speaker 1: center in the world. I'm glad you brought that up
Speaker 1: because I think a lot of concern, Bob is that
Speaker 1: with the uncertainty of Brexit, that London would lose its
Speaker 1: position as a global financial marketplace. And I guess we
Speaker 1: really haven't seen it today. We've seen certain jobs moved
Speaker 1: to Frankfurt to other parts of Europe. Do you expect
Speaker 1: that to accelerate if we have maybe a messy Brexit deal. Yeah.
Speaker 1: I think there's two ways to look at it. One,
Speaker 1: for the next decade or a hundred years, London will
Speaker 1: be one of their key financial centers in the world
Speaker 1: and will be a place where people want to live.
Speaker 1: Great schools, great environment, great culture. But most importantly it
Speaker 1: will be one of our key financial centers. There are
Speaker 1: jobs moving to Dublin, to Amsterdam, to Frankfort, but Paul
Speaker 1: I would say this is something that that these capitals
Speaker 1: have been looking for since the introduction of the single currency.
Speaker 1: There's always been why is everything in London that's right?
Speaker 1: So everyone wants to get their piece of the business.
Speaker 1: The was a little bit of a crack to allow
Speaker 1: some of that to happen. But I think some of
Speaker 1: it is a natural evolution. Is the asset management industry,
Speaker 1: you know, managing pension money and Frankfort always going to
Speaker 1: be in London. No, They're going to always try and
Speaker 1: pull more of it back, the same way Chicago wants
Speaker 1: to pull business from New York. So some of this
Speaker 1: is natural. It got a little bit of an impetus.
Speaker 1: I think a lot of the services, legal services, accounting
Speaker 1: services will be spread out a little bit more, and
Speaker 1: so there will be an impact on London, but not
Speaker 1: an impact that's going to remove it as the as
Speaker 1: the premier financial center in the world. Both. I guess
Speaker 1: at the press conference today about both the President Trump
Speaker 1: and Prime Minister May talking about a UK US trade
Speaker 1: deal and how it could be potentially President Trump shorts
Speaker 1: significantly bigger than the current trade agreement. How do you
Speaker 1: think that might develop? Well, I think I think both
Speaker 1: for the US and the UK right now, having the
Speaker 1: positive momentum of a substantive real trade deal between the
Speaker 1: US and UK would be great. I think it would
Speaker 1: be terrific for both countries. Um. You know the history
Speaker 1: of this relationship goes way back thirty years ago when
Speaker 1: I moved to London with Morgan Stanley. UM, I was
Speaker 1: there for Big Bang. I was there to see the
Speaker 1: impact that the US financial services industry, Morgan Stanley, Goldman, Sachs,
Speaker 1: Solomon Brothers. You know, the beginning of their really international
Speaker 1: expansion was to London. The growth of the financial markets,
Speaker 1: the incredible capital markets that we take for granted today.
Speaker 1: So much of this as a result of the UK
Speaker 1: US special relationship. I don't think we can underestimate it.
Speaker 1: We are thrilled to Bob Diamonds with us, of course,
Speaker 1: the former leader of Barclays. He's got all sorts adventurous
Speaker 1: moving on now, including speaking in Bloomberg today. Bob Diamond
Speaker 1: will continue with us. He is with Paul Sweeney in
Speaker 1: our Bloomberg Interactive Broker studios in New York. I'm Tom Keane,
Speaker 1: the Queen Victoria Street, Paul, I should point out, with
Speaker 1: better coffee than you have. The coffee here is extraordinary.
Speaker 1: We've got the absolute most spectacular building in our newest
Speaker 1: building at Edition in London. It is it's really something
Speaker 1: here in a course with Roman Roumans down in the basement,
Speaker 1: Bob Diamond, I think he held a Colby fundraiser in
Speaker 1: the Roman ruins. Uh, you know, a couple hundred years
Speaker 1: ago as well. But it is indeed historic here and
Speaker 1: an historic moment as Prime minister may really possibly her
Speaker 1: last appearance before she loses leadership of the Conservative Party
Speaker 1: and then towards a new prime minister avoiding a general
Speaker 1: election with President Trump the Doalop two d and thirty
Speaker 1: nine points. As we speak with Bob Diamond. Uh, Bob,
Speaker 1: it is a special relationship as well, and yet we
Speaker 1: go to a trade deal without question. The British press
Speaker 1: this morning talks about the aggressiveness of President Trump in
Speaker 1: a mercantile non lateral negotiations. What kind of trade deal
Speaker 1: could be negotiated in a post Rexit world. Um, you
Speaker 1: know you're you're well beyond my area of expertise, but
Speaker 1: I thinking about this just from the UK position right now. Um,
Speaker 1: as they moved towards exiting Brexit, there's probably nothing more
Speaker 1: important on the economic agenda than than to ensure um
Speaker 1: trading relationships and UM the documentation of that with their
Speaker 1: key trading partners. We've talked about this before, Tom, but
Speaker 1: both when I was at Barclays and now in Atlas
Speaker 1: Merchant Capital with Panmore Gordon. I've spent a lot of
Speaker 1: time in towns like Leeds and Birmingham and Manchester with
Speaker 1: small businesses and it surprised me early on. It will
Speaker 1: never surprise me again. Every single business, no matter how
Speaker 1: small warehouses to to chocolate makers, to to raising to
Speaker 1: to razor manufacturers, all have trade with Europe and almost
Speaker 1: all of them have trade with the US as well.
Speaker 1: This is a trading nation and so I think the
Speaker 1: shock of the uncertainty of Brexit is most profound with
Speaker 1: the small businesses across the UK, and the benefit will
Speaker 1: be most profound if we get certainty and we get
Speaker 1: we get some good trade agreements. Well, I don't go
Speaker 1: all David Ricardo on you, but I will so. Do
Speaker 1: you assume that a post Brexit United Kingdom can overlay
Speaker 1: a burgeoning US UK relationship on top of the existing
Speaker 1: volume of EU trade or does its substitute. I don't
Speaker 1: think it will replace by any means. I think the
Speaker 1: trade with Europe is critical for the UK. I haven't
Speaker 1: got the numbers to hand but I know trade with
Speaker 1: Europe is is significantly greater than trade with the US
Speaker 1: for businesses in the UK. I was not in favor
Speaker 1: of Brexit for for just these reasons. But we've moved
Speaker 1: beyond that. It's now into execution and we have to
Speaker 1: execute it in a way that the trade relationships between
Speaker 1: the UK corporates and UH and Europe stays as strong
Speaker 1: as it can. So about one of the issues I
Speaker 1: know for global financial institutions is kind of just the
Speaker 1: European market in general, the strength of the European economy.
Speaker 1: One of the big issues I guess from your part
Speaker 1: of the world of financial services part of world is
Speaker 1: Deutsche Bank. Where do you what do you think happens
Speaker 1: to Deutsche Bank specifically banking in Germany in general. So
Speaker 1: I think banking in Germany is it a very interesting
Speaker 1: crossroad right now? They have two very large, very um
Speaker 1: low profit in both Commerce Bank and Deutsche Bank. UM,
Speaker 1: so they have two very large institutions. They're not performing well.
Speaker 1: They're clearly in play. As we've watched the Deutsche Commerce
Speaker 1: Bank discussions go forward officially and then end. You can
Speaker 1: read as well as I can that Una Credito from
Speaker 1: from Italy they have a they have a very very
Speaker 1: strong CEO, and JP Mustier are looking at Commerce Bank,
Speaker 1: and so if you asked me a transaction like that
Speaker 1: would be very very positive. I think Germany has an
Speaker 1: issue and they need a resolution to at LEAs East
Speaker 1: one of Deutsche Bank or Commerce Bank. And over you
Speaker 1: didn't quite ask this, Paul, so I'm kind of adding
Speaker 1: a second thing, so I think it relates. But Um,
Speaker 1: over all of this is the fact that we have
Speaker 1: a new ECB governor coming and I think Europe needs, um,
Speaker 1: a very very strong governor of the e c B,
Speaker 1: someone more like Mario drag who made that incredibly important
Speaker 1: comment in two thousand twelve that he'll do whatever it
Speaker 1: is necessary in the interests of the Eurozone. And what
Speaker 1: Europe does not need is another hard line bundas Bank orthodoxy,
Speaker 1: orthodoxy driven one variable um kind of approach. We need
Speaker 1: bunch more flexibility towards towards monetary policy in Europe. And
Speaker 1: I think who succeeds Mario d is a critically important factor. Well,
Speaker 1: one of the things Tom and I've talked about, you know,
Speaker 1: continually on this show is it seems like after the
Speaker 1: financial crisis, the US banking industry cleared, for lack of
Speaker 1: a better word, consolidated, rationalized. Yet Europe does not seem
Speaker 1: to have done that. Ergo, the banks are not as strong,
Speaker 1: we have negative interest rates not helping in certain major markets.
Speaker 1: Do you believe that there needs to be a clearing
Speaker 1: or a consolidation of European banking broadly? Absolutely, and it's
Speaker 1: gonna it's gonna take a while. But if we go back,
Speaker 1: and I've spoken at length with Tom about this, not
Speaker 1: with you, Paul, but the Tart program was brilliant, you know.
Speaker 1: It basically put more equity than any bank needed in
Speaker 1: all of the systemic banks. The trick was number one,
Speaker 1: you can't pay that capital back until you pass the
Speaker 1: stress test, which means you've cleaned up your balance sheet.
Speaker 1: And until you pay it back, you can't pay bonuses
Speaker 1: and you can't pay dividends. So the US banks repaired quickly.
Speaker 1: Is there a program like that that could be implemented
Speaker 1: across Europe? I think if there was a will in
Speaker 1: a way, it would have been done. And so I
Speaker 1: think a lot more of the pressure is on each
Speaker 1: of the each of the nation. So in Greece, for example,
Speaker 1: they did consolidate. They had twenty five banks and two thousand,
Speaker 1: two thousand nine. Today there's four major banks, which is
Speaker 1: the consolidation of those, but they average over non performing
Speaker 1: loans today ten years on. And that's the situation with
Speaker 1: Deutsche Bank and Commerce Bank. They never addressed the balance
Speaker 1: shooter shoes. Well, let's go right to that, Bob Diamond,
Speaker 1: about time for one more question. We're waiting for Chairman
Speaker 1: Powell to speak an important speech in Chicago. We'll have
Speaker 1: that for you on Bloomberg Radio. Bob Diamond, I think
Speaker 1: the last time you and I talked, the red sox
Speaker 1: uh we're playing I don't know, above below five ball.
Speaker 1: Now they're doing a little better. And also Deutsche Bank
Speaker 1: was at seven euros per share. We had a five
Speaker 1: handle the other day. The vector is not good. What
Speaker 1: occurs does the German government step in? I mean, each
Speaker 1: nation has your own ballet. How do you see a
Speaker 1: Deutsche Bank workout? So that's you're getting to the nub
Speaker 1: of the issue is I think the Commerce Deutsche combination
Speaker 1: allowed something that that that because the government had an
Speaker 1: ownership in Commerce Bank, that could kind of get away
Speaker 1: by being involved in that. In that merger. But no
Speaker 1: elected official or no regulator wants to be associated with
Speaker 1: too big to fail or bailing out a bank. And
Speaker 1: that's why SIPHI and g SphI and buffer upon buffer
Speaker 1: of capital. It's created massive opportunities for US Anatlas merchant capital.
Speaker 1: So we kind of love it. But that's not the
Speaker 1: question you're asking. You're asking what's the resolution of Deutsche Bank?
Speaker 1: And I think it's really challenging, and it puts it
Speaker 1: puts the elected officials in Germany in an enormously challenging
Speaker 1: position if they have to bail it out. But if
Speaker 1: I can be quite direct, they kind of are already.
Speaker 1: You know, the markets have the underpinning that the German
Speaker 1: government would step in if necessary. And this is the
Speaker 1: exactly what the regulators and elected officials hated in two
Speaker 1: thousand and eight and two thousand nine was too big
Speaker 1: to fail, And here it is again. Bob Diamond, thank
Speaker 1: you so much, just generous of your time. You're today
Speaker 1: Mr Diamond of course with Barclays and he's moved on
Speaker 1: to other investment action here in two thousand nineteen. Thanks
Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen
Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform
Speaker 1: you prefer. I'm on Twitter at Tom Keane before the podcast.
Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio