1 00:00:09,840 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily 2 00:00:13,960 --> 00:00:17,560 Speaker 1: we bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:34,120 Speaker 1: Bloomberg dot Com and of course on the Bloomberg. Within 5 00:00:34,200 --> 00:00:37,160 Speaker 1: all of this news, within the stories of the day, 6 00:00:37,800 --> 00:00:41,800 Speaker 1: there's an ability to triangulate and what the pros triangulate 7 00:00:41,880 --> 00:00:46,320 Speaker 1: with it's foreign exchange. From our Bloomberg Interactive Brooker Studios, 8 00:00:46,720 --> 00:00:50,160 Speaker 1: we go to London and Jane Folly of Robbo Bank, 9 00:00:50,280 --> 00:00:52,600 Speaker 1: Jane within the blur. Sometimes when I look at my 10 00:00:52,640 --> 00:00:55,800 Speaker 1: Bloomberg screen, I squint my eyes. It's just because the 11 00:00:55,800 --> 00:00:57,720 Speaker 1: red and the green could tell me what's going on. 12 00:00:58,160 --> 00:01:02,279 Speaker 1: When you try to triangulate the markets right now, you've 13 00:01:02,280 --> 00:01:06,640 Speaker 1: got to be focused on more than cable right well. 14 00:01:06,680 --> 00:01:09,360 Speaker 1: I think Sterling really does give us a really good 15 00:01:09,400 --> 00:01:12,560 Speaker 1: reflection about how vulnerable investors are feeling with respect to 16 00:01:12,600 --> 00:01:16,480 Speaker 1: the uncertainty, the political uncertainty in the UK right now. 17 00:01:16,800 --> 00:01:19,920 Speaker 1: And it's been very interesting this morning listening to jurisam May. 18 00:01:20,000 --> 00:01:22,360 Speaker 1: She came in front of Parliament and she sounded very 19 00:01:22,440 --> 00:01:26,440 Speaker 1: defiant initially with respect to you, her dear, but she 20 00:01:26,560 --> 00:01:29,120 Speaker 1: has been stood now for two hours, more than two hours, 21 00:01:29,440 --> 00:01:31,959 Speaker 1: and there has been a lot of pressure from MP's 22 00:01:32,200 --> 00:01:36,280 Speaker 1: John Ferrell is going Jane, come on now. I just 23 00:01:36,280 --> 00:01:38,720 Speaker 1: thought it's really interesting watching these headlines to drop across 24 00:01:38,720 --> 00:01:41,880 Speaker 1: the bloomberg of people I've never heard of resigning, and 25 00:01:41,920 --> 00:01:44,640 Speaker 1: I imagine most people in the FX market have never 26 00:01:44,680 --> 00:01:48,440 Speaker 1: heard of them either, with the exception of tomic rap Jane, 27 00:01:48,520 --> 00:01:50,920 Speaker 1: how important is that just in terms of we don't 28 00:01:50,960 --> 00:01:53,080 Speaker 1: know who these people are, but just the numbers are 29 00:01:53,080 --> 00:01:58,360 Speaker 1: what is important here. You have had already four ministers 30 00:01:58,400 --> 00:02:02,080 Speaker 1: resigning and an additional to a parliamentary Private secretary. But 31 00:02:02,160 --> 00:02:04,720 Speaker 1: even if you didn't know those names, you would know 32 00:02:04,760 --> 00:02:07,760 Speaker 1: the name as you pointed out of Brexit secretary rather 33 00:02:07,800 --> 00:02:10,200 Speaker 1: now he is he has resigned and you could say, 34 00:02:10,720 --> 00:02:13,519 Speaker 1: you know, this is the second Brexit minister to set 35 00:02:13,639 --> 00:02:17,639 Speaker 1: to step down, the second one that really does reinforce 36 00:02:17,760 --> 00:02:21,400 Speaker 1: the splits within the cabinet. So we have here in 37 00:02:21,440 --> 00:02:26,600 Speaker 1: the UK an extremely divided cabinet and extremely divided government 38 00:02:27,360 --> 00:02:30,880 Speaker 1: and an opposition party which is very market unfriendly, an 39 00:02:30,880 --> 00:02:33,200 Speaker 1: opposition party which is on the far left that has 40 00:02:33,280 --> 00:02:37,520 Speaker 1: policies to renationalize, etcetera. So the political backdop from an 41 00:02:37,520 --> 00:02:40,880 Speaker 1: investor's point of view now is looking really very ugly 42 00:02:41,360 --> 00:02:44,000 Speaker 1: and right now also, as many and pis have pointed 43 00:02:44,000 --> 00:02:47,160 Speaker 1: out to the Prime Minister in Parliament this morning, there 44 00:02:47,400 --> 00:02:52,079 Speaker 1: probably isn't parliamentary backing for her deal, and she has 45 00:02:52,120 --> 00:02:54,640 Speaker 1: said if there isn't a deal, the UK is still 46 00:02:54,680 --> 00:02:57,960 Speaker 1: going to leave the EU in March next year, meaning 47 00:02:58,280 --> 00:03:01,120 Speaker 1: that the prospect of a hard bread is looking very 48 00:03:01,160 --> 00:03:04,160 Speaker 1: tangible today. So Jane, looking at the market right now 49 00:03:04,240 --> 00:03:08,000 Speaker 1: overnight ball on cable really elevated yesterday and today as well. 50 00:03:08,120 --> 00:03:10,639 Speaker 1: Still I'm looking at the pricing for a bank having 51 00:03:10,680 --> 00:03:14,040 Speaker 1: them great hike being taken out for the spring of 52 00:03:14,160 --> 00:03:15,880 Speaker 1: next year. What do you think we should be paying 53 00:03:15,880 --> 00:03:20,120 Speaker 1: attention to in markets right now? Well, you know, unfortunately, 54 00:03:20,240 --> 00:03:22,360 Speaker 1: because it's so political, there are a lot of investors 55 00:03:22,400 --> 00:03:24,280 Speaker 1: who are waiting on the headline, on the sidelines, just 56 00:03:24,400 --> 00:03:27,120 Speaker 1: waiting for those headlines, waiting to see what's going to happen. 57 00:03:27,400 --> 00:03:31,160 Speaker 1: So politics is very dominant certainly for the UK. I 58 00:03:31,160 --> 00:03:33,280 Speaker 1: mean beyond that, of course, there is still the focus 59 00:03:33,320 --> 00:03:35,920 Speaker 1: on on the trade deals on China and the US, 60 00:03:36,040 --> 00:03:38,240 Speaker 1: on the U s data, see how much that the 61 00:03:38,240 --> 00:03:41,840 Speaker 1: Fed can hike, to see how much the Federal Reserve 62 00:03:41,840 --> 00:03:44,400 Speaker 1: could be impacted by the global growth outlook. There is 63 00:03:44,400 --> 00:03:47,320 Speaker 1: still bad data for Q three from Germany, from Japan, 64 00:03:47,400 --> 00:03:49,560 Speaker 1: et cetera, so that there is still an awful lot 65 00:03:49,600 --> 00:03:52,000 Speaker 1: to focus on. But in the UK for sterling, it's 66 00:03:52,080 --> 00:03:56,240 Speaker 1: really quite simple. It's on those headlines regarding the UK 67 00:03:56,360 --> 00:03:59,320 Speaker 1: politic political backdrop, it's it's the end of the year. 68 00:03:59,480 --> 00:04:01,920 Speaker 1: You're going to start writing the rabble being piece. What 69 00:04:01,960 --> 00:04:04,040 Speaker 1: are you writing on the dollar right now? I mean, 70 00:04:04,080 --> 00:04:08,400 Speaker 1: I know the cables the focus today one, but do 71 00:04:08,480 --> 00:04:11,560 Speaker 1: you have an interesting dollar call or are you just 72 00:04:11,640 --> 00:04:15,840 Speaker 1: waiting to see what breaks well. I've been really since 73 00:04:16,160 --> 00:04:18,480 Speaker 1: since March. It's much of its extincts. To be precise, 74 00:04:18,520 --> 00:04:22,000 Speaker 1: I've been adollable and my focus was one twelve, which 75 00:04:22,160 --> 00:04:24,440 Speaker 1: really right now doesn't look that far away. I'm talking 76 00:04:24,440 --> 00:04:28,279 Speaker 1: about your dollar clearly doesn't look that far away. Now. Now, 77 00:04:28,440 --> 00:04:31,280 Speaker 1: I think I can present an argument many commentators can 78 00:04:31,279 --> 00:04:33,360 Speaker 1: that next year we could see a sarin in the 79 00:04:33,400 --> 00:04:35,800 Speaker 1: outlook for the US, we could see growth platoning, we 80 00:04:35,800 --> 00:04:38,880 Speaker 1: could see a platoning in U S rates. But I'm 81 00:04:38,920 --> 00:04:41,840 Speaker 1: also still really quite concerned about Europe. I'm concerned about 82 00:04:41,839 --> 00:04:45,440 Speaker 1: European growth, I'm concerned about ECB policy, concerned very much 83 00:04:45,440 --> 00:04:49,240 Speaker 1: about populism and the politics in Europe too. So I 84 00:04:49,279 --> 00:04:52,080 Speaker 1: don't really see a case well by the euro is 85 00:04:52,120 --> 00:04:53,760 Speaker 1: going to be in any position to take back a 86 00:04:53,800 --> 00:04:56,520 Speaker 1: lot of ground against I've never asked this question. I'm 87 00:04:56,520 --> 00:04:59,880 Speaker 1: going to do it right now. Is Brexit just pop 88 00:05:00,200 --> 00:05:05,160 Speaker 1: is um United Kingdom flavor? Yeah, we've seen populism obviously 89 00:05:05,160 --> 00:05:07,760 Speaker 1: in the US. We've seen populism in the UK. We've 90 00:05:07,800 --> 00:05:11,599 Speaker 1: seen populism. We have it. We have it in Sweden, 91 00:05:11,760 --> 00:05:15,160 Speaker 1: in Germany, we have it in Poland and in Czech Republic. 92 00:05:15,400 --> 00:05:19,120 Speaker 1: Jane Folly's excellence totally different than yours. Like when Jane talks, 93 00:05:19,279 --> 00:05:21,239 Speaker 1: you know where she's from. Where are you from? Jane? 94 00:05:22,320 --> 00:05:25,160 Speaker 1: Actually I'm from Ireland, but I was. I grew up 95 00:05:25,200 --> 00:05:28,200 Speaker 1: in Southland, South London, and so that's that much different 96 00:05:28,240 --> 00:05:30,680 Speaker 1: from where you are up in the Midlands. Yeah, OK, 97 00:05:30,760 --> 00:05:33,440 Speaker 1: though if I had a Midlands accent, you wouldn't be 98 00:05:33,400 --> 00:05:37,600 Speaker 1: a radio very very different, but ware into your joinus. 99 00:05:37,680 --> 00:05:40,280 Speaker 1: I mean, Brexit is just the populism of the era 100 00:05:40,400 --> 00:05:43,720 Speaker 1: defined in the United The really interesting thing about Brexit 101 00:05:44,000 --> 00:05:46,600 Speaker 1: is that on the dawn of Brexit, when we had 102 00:05:46,760 --> 00:05:49,200 Speaker 1: the sun come up the following day after the votes, 103 00:05:49,960 --> 00:05:52,480 Speaker 1: and many people sat there and said, big problem for 104 00:05:52,520 --> 00:05:55,520 Speaker 1: the continent, perhaps the world. Within a couple of months 105 00:05:55,880 --> 00:05:58,560 Speaker 1: it became less the world, maybe the continent, and then 106 00:05:58,600 --> 00:06:00,240 Speaker 1: a couple of months after that it could be came 107 00:06:00,400 --> 00:06:02,160 Speaker 1: maybe this is just a U case. So what's a 108 00:06:02,200 --> 00:06:05,000 Speaker 1: big problem right now, Jane? Is it expanding back out 109 00:06:05,120 --> 00:06:08,000 Speaker 1: from the United Kingdom or is it a discreet story. 110 00:06:09,320 --> 00:06:11,960 Speaker 1: I think there's two aspects here which could impact the 111 00:06:11,960 --> 00:06:14,400 Speaker 1: the Eurozone and the EU and and the FIRTS is 112 00:06:14,480 --> 00:06:17,200 Speaker 1: just as trade in the UK, we import a lot 113 00:06:17,240 --> 00:06:21,839 Speaker 1: more from Europe than they do from US, and particularly Germany, 114 00:06:21,880 --> 00:06:25,680 Speaker 1: so that so there's a straight trade front. Um. There's 115 00:06:25,680 --> 00:06:29,080 Speaker 1: a lot of concerns about supply change, cars, autos except 116 00:06:29,120 --> 00:06:30,599 Speaker 1: are going back and forth across the border. So we 117 00:06:30,600 --> 00:06:33,040 Speaker 1: have this story. But there is the other story, and 118 00:06:33,080 --> 00:06:36,800 Speaker 1: this is about the integrity of the European project, of 119 00:06:36,839 --> 00:06:40,680 Speaker 1: the Eurozone project, of the EU. And and this is 120 00:06:41,080 --> 00:06:43,520 Speaker 1: a question or this is a threat perhaps, so Brexit 121 00:06:43,600 --> 00:06:46,360 Speaker 1: is potentially a threat to both of those, particularly when 122 00:06:46,400 --> 00:06:49,640 Speaker 1: you have populism and Italy nibbling at the at the 123 00:06:50,279 --> 00:06:53,000 Speaker 1: the project as well, where you have nationalism in some 124 00:06:53,040 --> 00:06:56,400 Speaker 1: countries as well, So populism nationalism they already there in 125 00:06:56,440 --> 00:06:59,000 Speaker 1: Europe and that to have Brexit happening on the advocates 126 00:06:59,080 --> 00:07:03,360 Speaker 1: here is thing which again could undermine the project. So 127 00:07:03,360 --> 00:07:06,960 Speaker 1: the letters are going in leading Brexit backer Jacob Reese 128 00:07:07,040 --> 00:07:11,160 Speaker 1: Mark calling for a leadership challenge. Now as we know, Jane, 129 00:07:11,240 --> 00:07:14,240 Speaker 1: you need forty eight of these letters to trigger a 130 00:07:14,320 --> 00:07:17,680 Speaker 1: leadership challenge. Is that what is next on the horizon 131 00:07:17,720 --> 00:07:19,800 Speaker 1: as you sit there in the city of London, people 132 00:07:19,840 --> 00:07:22,600 Speaker 1: coming around to that idea that a leadership challenge is coming. 133 00:07:23,880 --> 00:07:26,480 Speaker 1: We've seen several headlines this morning. I think this weekend 134 00:07:26,600 --> 00:07:30,200 Speaker 1: is going to be really crucial. We've seen treason May 135 00:07:30,320 --> 00:07:33,520 Speaker 1: really fighting for her job before UM and I think 136 00:07:33,600 --> 00:07:36,200 Speaker 1: this weekend is going to be really crucial for her too. 137 00:07:36,440 --> 00:07:38,960 Speaker 1: And what's really quite interesting and the two hours where 138 00:07:38,960 --> 00:07:42,120 Speaker 1: she's been on her feet in Parliament today is a 139 00:07:42,160 --> 00:07:45,640 Speaker 1: lot of lack of support to some of the funds 140 00:07:45,680 --> 00:07:47,120 Speaker 1: for that for the deal, but also a lot of 141 00:07:47,200 --> 00:07:49,520 Speaker 1: questions here for a second referendum, to a lot of 142 00:07:49,560 --> 00:07:52,360 Speaker 1: people saying that they don't think that there is enough 143 00:07:52,400 --> 00:07:57,520 Speaker 1: support in Parliament for her, and calls again again about 144 00:07:57,560 --> 00:08:00,640 Speaker 1: her her leadership or questions about her ship. You know, 145 00:08:00,680 --> 00:08:02,520 Speaker 1: of course I get all my history out of movies 146 00:08:02,720 --> 00:08:05,120 Speaker 1: and and Jane Foley to go back to Lincoln. Daniel 147 00:08:05,160 --> 00:08:07,840 Speaker 1: day Lewis is Lincoln. They're all job owning about the 148 00:08:07,880 --> 00:08:11,280 Speaker 1: Emancipation Act. And basically it's like, if you vote for this, 149 00:08:11,440 --> 00:08:13,920 Speaker 1: I'll give you a you know, some bargain in your 150 00:08:13,960 --> 00:08:17,480 Speaker 1: district in Ohio or wherever. Is that what goes on here? 151 00:08:17,520 --> 00:08:20,040 Speaker 1: I mean this Prime Minister may leave House of Commons 152 00:08:20,040 --> 00:08:22,120 Speaker 1: and go find and can ask a question in English? 153 00:08:22,240 --> 00:08:25,120 Speaker 1: Hold on, but could some does a member of Parliament 154 00:08:25,320 --> 00:08:28,160 Speaker 1: get a phone call? You know, we'll give you a subway, 155 00:08:28,600 --> 00:08:31,840 Speaker 1: a subway stop, or you know, some infrastructure project. It's 156 00:08:32,880 --> 00:08:36,400 Speaker 1: that's what we're doing in America. It's not as it's 157 00:08:36,440 --> 00:08:40,120 Speaker 1: common in the UK. But where do you have that is? 158 00:08:40,160 --> 00:08:43,439 Speaker 1: Obviously with the d Up Treason may have a minority. 159 00:08:43,600 --> 00:08:46,079 Speaker 1: The Troy Party have a minority in the House of 160 00:08:46,120 --> 00:08:48,360 Speaker 1: Commons and she very reliant on the nine of tendencies 161 00:08:48,640 --> 00:08:51,960 Speaker 1: from the Northern Island d Up Party to support her 162 00:08:52,320 --> 00:08:54,440 Speaker 1: and went in order to buy that support after the 163 00:08:54,440 --> 00:08:58,200 Speaker 1: election that last year, and she did certainly the several confessions. 164 00:08:58,400 --> 00:09:01,280 Speaker 1: Now this is Reese marg Is that how you said? 165 00:09:01,640 --> 00:09:04,800 Speaker 1: Did I do well? Calls for a leadership challenge to 166 00:09:04,920 --> 00:09:08,719 Speaker 1: check that? Three minutes ago I missed it, did I 167 00:09:08,760 --> 00:09:12,720 Speaker 1: was just sending fan letters out and Jacoba, where your keyboard, Jim? 168 00:09:13,040 --> 00:09:17,560 Speaker 1: Jane Fowley, what's a leadership challenge? This would be when 169 00:09:18,520 --> 00:09:22,199 Speaker 1: within the the electoral process is very different. We don't 170 00:09:22,240 --> 00:09:24,800 Speaker 1: elect a president or Prime minister in the way that 171 00:09:24,840 --> 00:09:27,640 Speaker 1: you do. We elect the party and then the party 172 00:09:27,920 --> 00:09:31,120 Speaker 1: chooses the leadership. So this is the different here in 173 00:09:31,160 --> 00:09:36,199 Speaker 1: the US. So they would be potentially putting other names 174 00:09:36,440 --> 00:09:39,280 Speaker 1: in the hats and choosing a new OA. We would 175 00:09:39,280 --> 00:09:42,080 Speaker 1: still have a Tory government. Jane Fowley. Thank you Civics 176 00:09:42,160 --> 00:09:57,439 Speaker 1: with Jane Foley of Rabble Bank today for our American audience. John, 177 00:09:57,720 --> 00:10:00,600 Speaker 1: My worst woman in London was that ending in line 178 00:10:00,640 --> 00:10:02,880 Speaker 1: at the Tower of London to get in. It was 179 00:10:03,040 --> 00:10:06,680 Speaker 1: finding a bar. I could watch an American Football League 180 00:10:06,720 --> 00:10:10,400 Speaker 1: game and the Detroit Lions are playing, and that's why 181 00:10:10,480 --> 00:10:14,400 Speaker 1: it's so important to get deep Brexit perspective from our 182 00:10:14,480 --> 00:10:19,880 Speaker 1: London bureau chief who loves he worships the Detroit Lions. 183 00:10:20,000 --> 00:10:25,920 Speaker 1: He does, he doesn't care about Villa west Ham East 184 00:10:25,960 --> 00:10:32,600 Speaker 1: Poultry whatever the Calean. This is the one guy in 185 00:10:32,640 --> 00:10:34,640 Speaker 1: the United Kingdom I want to talk to you today. 186 00:10:34,800 --> 00:10:37,800 Speaker 1: Why do you bring him? Mr Calenan of the Detroit 187 00:10:37,880 --> 00:10:40,960 Speaker 1: Lion not speaking to our London bureau chief about the 188 00:10:41,120 --> 00:10:44,199 Speaker 1: Detroit Lions. We're going to talk to him about Brexit. 189 00:10:44,280 --> 00:10:47,840 Speaker 1: Good morning to you or good afternoon to you, Neil Canahan, 190 00:10:48,360 --> 00:10:50,360 Speaker 1: good morning. I could give your chapter in first about 191 00:10:50,360 --> 00:10:53,480 Speaker 1: the Lions as well, obviously carriage Tom you probably will 192 00:10:53,559 --> 00:10:55,800 Speaker 1: do that, Neil. Just the Prime Minister last the week 193 00:10:56,640 --> 00:11:00,560 Speaker 1: looking increasingly unlikely, Jonathan Um. She came about today at 194 00:11:00,640 --> 00:11:04,080 Speaker 1: ten thirty am. She looked confident, she was prepared, the 195 00:11:04,120 --> 00:11:06,360 Speaker 1: speech was good, and then it just all began to 196 00:11:06,400 --> 00:11:10,440 Speaker 1: fall apart. MP after MP it stood up and said 197 00:11:10,440 --> 00:11:13,520 Speaker 1: that they would oppose the deal that she has agreed, 198 00:11:14,120 --> 00:11:17,560 Speaker 1: and the chatter during the morning was increasingly that they 199 00:11:17,559 --> 00:11:19,600 Speaker 1: were getting close to the number of votes that would 200 00:11:19,600 --> 00:11:22,480 Speaker 1: trigger a vote of confidence in her leadership. The BBC 201 00:11:22,720 --> 00:11:26,000 Speaker 1: is now saying that that looks likely. Jacob Reese magg 202 00:11:26,000 --> 00:11:30,440 Speaker 1: who's an arch your your skeptic. He's now said that 203 00:11:30,480 --> 00:11:32,640 Speaker 1: he's going to send in a letter of no confidence. 204 00:11:32,640 --> 00:11:34,439 Speaker 1: He wouldn't do that, I don't think unless he was 205 00:11:34,480 --> 00:11:36,520 Speaker 1: actually confident that they have the votes to trigger that, 206 00:11:37,000 --> 00:11:42,000 Speaker 1: to trigger the leadership confidence motion. And so it will 207 00:11:42,080 --> 00:11:44,640 Speaker 1: be very, very tough for Treason May to survive the week. 208 00:11:44,679 --> 00:11:47,280 Speaker 1: But then she we've been writing her offer in nearly 209 00:11:47,280 --> 00:11:50,199 Speaker 1: two years and she's still there. Forty eight votes, forty 210 00:11:50,240 --> 00:11:53,520 Speaker 1: eight letters needed to get the leadership contest, and I 211 00:11:53,559 --> 00:11:56,040 Speaker 1: understand you need about a hundred and fifty eight votes 212 00:11:56,559 --> 00:11:59,040 Speaker 1: to push him out of the position. Now do they 213 00:11:59,040 --> 00:12:03,240 Speaker 1: have the numbers? They have about a core of about 214 00:12:03,280 --> 00:12:07,840 Speaker 1: a g who have consistently been against the deal that 215 00:12:07,960 --> 00:12:10,240 Speaker 1: was under negotiation, and her in favor of no deal. 216 00:12:10,320 --> 00:12:12,679 Speaker 1: But now based on what we saw earlier on or MP, 217 00:12:12,800 --> 00:12:15,600 Speaker 1: after MP and her own party stood up and basically 218 00:12:16,440 --> 00:12:19,600 Speaker 1: congratulated her for her work, but said this is not 219 00:12:19,679 --> 00:12:22,920 Speaker 1: going to fly with me or my constituents, and I'm 220 00:12:22,960 --> 00:12:25,440 Speaker 1: going to oppose the deal. And therefore she's really going 221 00:12:25,480 --> 00:12:27,800 Speaker 1: to struggle in that leadership contest. The question is who 222 00:12:27,800 --> 00:12:30,920 Speaker 1: comes forward? Does Boris Johnson finally make a move. He's 223 00:12:30,920 --> 00:12:33,400 Speaker 1: treating to before and never has. Who's going to be 224 00:12:33,440 --> 00:12:37,160 Speaker 1: the obvious competitor to her? Dominic rab who who resigned 225 00:12:37,160 --> 00:12:39,800 Speaker 1: this morning is probably a contender as well. And then 226 00:12:39,840 --> 00:12:42,559 Speaker 1: the dangerous that the votes get split and she survives, 227 00:12:42,600 --> 00:12:44,920 Speaker 1: and what's the alternative? And I think that's what's interesting 228 00:12:45,120 --> 00:12:47,280 Speaker 1: about all of this. Prime Minister Masa's it's my deal, 229 00:12:47,400 --> 00:12:50,240 Speaker 1: no deal, or no Brexit at all. The people, the 230 00:12:50,240 --> 00:12:53,080 Speaker 1: individuals that have resigned have said plenty about why they 231 00:12:53,120 --> 00:12:55,200 Speaker 1: don't like the deal on the table, but said little 232 00:12:55,200 --> 00:12:58,080 Speaker 1: about what the alternative if they pursue would be. Do 233 00:12:58,120 --> 00:13:00,560 Speaker 1: we have any idea what the brexit? He has actually 234 00:13:00,559 --> 00:13:04,280 Speaker 1: one here, Neil I think that the Parliament is so 235 00:13:04,440 --> 00:13:07,319 Speaker 1: split you just can't say. Because there is an animent 236 00:13:07,360 --> 00:13:10,760 Speaker 1: of people who do want to second referendum, and she 237 00:13:10,920 --> 00:13:13,560 Speaker 1: left opened that possibility last night when she talked about 238 00:13:13,600 --> 00:13:16,200 Speaker 1: now Brexit and the last two years with being a 239 00:13:16,240 --> 00:13:19,240 Speaker 1: lot of talk about nothing, but that that would seem unlikely. 240 00:13:19,280 --> 00:13:22,120 Speaker 1: They don't have enough votes at the momentum. High bragsit 241 00:13:22,400 --> 00:13:25,680 Speaker 1: that the right at the risk of that has risen marketly, 242 00:13:25,720 --> 00:13:27,720 Speaker 1: and that's what markets are showing this morning. Neil I 243 00:13:27,720 --> 00:13:30,400 Speaker 1: can get away with this you with your Irish heritage. 244 00:13:30,440 --> 00:13:32,600 Speaker 1: If we go back to David Lloyd George, who, among 245 00:13:32,640 --> 00:13:37,080 Speaker 1: other things folks spoke Welsh and English was a second language, 246 00:13:37,080 --> 00:13:40,960 Speaker 1: which I find extraordinary. But within the Irish question in 247 00:13:41,000 --> 00:13:44,320 Speaker 1: the huge battles coming out of World War One, he 248 00:13:44,600 --> 00:13:48,600 Speaker 1: was shown the door in nine two. When in a 249 00:13:48,640 --> 00:13:51,840 Speaker 1: parliamentary system, when you're showing the door, do you know 250 00:13:51,920 --> 00:13:55,439 Speaker 1: who's going to take over or is it a mystery 251 00:13:55,640 --> 00:13:58,199 Speaker 1: right to the last moment? Is are there ducks lined 252 00:13:58,320 --> 00:14:01,840 Speaker 1: up now to take over for prime minister? May I 253 00:14:01,880 --> 00:14:04,079 Speaker 1: think that's exactly what will be happening in this afternoon. 254 00:14:04,240 --> 00:14:06,720 Speaker 1: People will be justling for a position so that they're 255 00:14:06,760 --> 00:14:11,200 Speaker 1: ready to launch their pitch and to go for the leadership. 256 00:14:11,760 --> 00:14:16,160 Speaker 1: Baris Johnson, Dominick rab maybe even Michael go if treason 257 00:14:16,360 --> 00:14:19,360 Speaker 1: it's gone, Jim Ferroll. It's so different than America. Well, 258 00:14:19,360 --> 00:14:21,920 Speaker 1: it's not a presidential system. You're the leader of the 259 00:14:21,960 --> 00:14:24,920 Speaker 1: party and then you are therefore also the prime minister 260 00:14:24,960 --> 00:14:27,360 Speaker 1: of your in power um and you vote for the 261 00:14:27,400 --> 00:14:29,960 Speaker 1: leader of the party. As a conservative core, it's not 262 00:14:30,000 --> 00:14:32,880 Speaker 1: the people that vote for not all of the country, 263 00:14:33,000 --> 00:14:36,480 Speaker 1: it's the conservative members that ultimately will vote for the 264 00:14:36,200 --> 00:14:39,640 Speaker 1: like the part today it was about speaking to her party, 265 00:14:40,320 --> 00:14:44,160 Speaker 1: Parliament and the country. You know, it's it's just different. 266 00:14:44,440 --> 00:14:46,840 Speaker 1: But some people speaking to their constituency and you know 267 00:14:46,880 --> 00:14:48,920 Speaker 1: the political game for so many people. Tom, that's how 268 00:14:48,920 --> 00:14:53,720 Speaker 1: do I get reelected? Neil Alliance Packers and the Lions 269 00:14:53,760 --> 00:14:55,680 Speaker 1: pack I mean, can the Lions do it to the Packers? 270 00:14:55,880 --> 00:14:59,680 Speaker 1: They're stumbling the way we've been playing for the last 271 00:14:59,680 --> 00:15:03,520 Speaker 1: few we with no corner box radio against ironn Rodgers. No, okay, 272 00:15:04,160 --> 00:15:08,040 Speaker 1: there you are folks from London and Ireland nailing the 273 00:15:08,080 --> 00:15:12,000 Speaker 1: Michael Bard talk on the Detroit Lions, Neil calling and 274 00:15:12,120 --> 00:15:15,880 Speaker 1: joining us. Is that? That's the coolest thing about Bloomberg 275 00:15:16,000 --> 00:15:18,680 Speaker 1: is a guy running or London office is from Ireland 276 00:15:18,920 --> 00:15:22,320 Speaker 1: and loves Michael Barr's Detroit. You keep asking how they 277 00:15:22,360 --> 00:15:26,400 Speaker 1: film one body stadium with NFL fans. There are tons 278 00:15:26,520 --> 00:15:29,760 Speaker 1: in snowing. If you been over to blooming deal ship 279 00:15:29,840 --> 00:15:32,800 Speaker 1: my music, I'm gonna get I wouldn't. I would never 280 00:15:32,880 --> 00:15:35,600 Speaker 1: do that. Have you been over to Bloomingdale's and seeing 281 00:15:35,640 --> 00:15:52,840 Speaker 1: their Christmas display into other respects? Oh? Mr? You real's you? 282 00:15:53,000 --> 00:15:59,600 Speaker 1: Not me? You got that right? Feel like him? This morning. 283 00:15:59,640 --> 00:16:21,000 Speaker 1: You means and I quote stink stop the Brexit vote 284 00:16:21,560 --> 00:16:25,200 Speaker 1: was clubs call it fifty eight, depending on who's counting 285 00:16:25,200 --> 00:16:29,160 Speaker 1: and what the mood was. But in David blanch Flowers Cardiff, 286 00:16:29,480 --> 00:16:34,640 Speaker 1: where Whales said leave, Cardiff said remain. The prosperity perhaps 287 00:16:34,680 --> 00:16:40,040 Speaker 1: of Cardiff with a sizeable vote of remains six and leave. 288 00:16:42,040 --> 00:16:45,160 Speaker 1: David blanche Flower, of course a member of the Bank 289 00:16:45,200 --> 00:16:49,720 Speaker 1: of England's committee, and of course iconic and wage economics 290 00:16:49,800 --> 00:16:54,080 Speaker 1: and macro economics at Dartmouth College, Professor blanch Flower, wonderfully 291 00:16:54,080 --> 00:16:56,160 Speaker 1: have you with us this morning, Just give us a 292 00:16:56,200 --> 00:17:00,600 Speaker 1: glimmer of your whales. Why did Cardiff say remain in 293 00:17:00,600 --> 00:17:06,800 Speaker 1: in Whales stunned? In certainly, well, in some sense what 294 00:17:06,840 --> 00:17:11,080 Speaker 1: we've seen around the globe is the big cities essentially 295 00:17:11,240 --> 00:17:13,680 Speaker 1: work in pre content with where things were. So think 296 00:17:13,720 --> 00:17:16,480 Speaker 1: about in the US New York and the big cities Chicago, 297 00:17:17,040 --> 00:17:22,199 Speaker 1: in Britain, London, Um, Edinburgh all voted to remain. The 298 00:17:22,280 --> 00:17:25,520 Speaker 1: rest of the rest of Wales essentially was pretty unhappy, 299 00:17:25,560 --> 00:17:29,000 Speaker 1: the old coal towns and the steel towns and rural Wales. 300 00:17:29,040 --> 00:17:31,159 Speaker 1: But I think the answer now is actually that it 301 00:17:31,200 --> 00:17:34,120 Speaker 1: appears that the polling in Wales has kind of moved 302 00:17:34,119 --> 00:17:38,480 Speaker 1: in the other direction, particularly has as Brittles has not delivered. 303 00:17:38,640 --> 00:17:41,399 Speaker 1: And obviously today is a big day where markets are 304 00:17:41,440 --> 00:17:44,560 Speaker 1: in turmoil because it's quite clear that there really hasn't 305 00:17:44,560 --> 00:17:47,159 Speaker 1: been a deal and there's no deal, there's credible on 306 00:17:47,160 --> 00:17:49,240 Speaker 1: the table. So now we have I think particularly the 307 00:17:49,240 --> 00:17:53,080 Speaker 1: big deal today is Scottland back, because Scotland is pretty 308 00:17:53,119 --> 00:17:55,840 Speaker 1: unhappy and they're not even included, not the words of 309 00:17:55,880 --> 00:17:59,160 Speaker 1: Scotland isn't even in the in this five page document, 310 00:17:59,240 --> 00:18:02,280 Speaker 1: and the and the Scots and the Welsh, I think 311 00:18:02,840 --> 00:18:04,800 Speaker 1: saying if Ireland has a deal, we want to deal 312 00:18:04,920 --> 00:18:08,200 Speaker 1: well exactly. And Prime Minister May, in a huge emotion 313 00:18:08,359 --> 00:18:12,280 Speaker 1: earlier this morning, it seems hours ago, said Scotland is 314 00:18:12,359 --> 00:18:15,200 Speaker 1: part of the United Kingdom which carries a certain seventeen 315 00:18:15,520 --> 00:18:20,040 Speaker 1: oh three residents. Residents I should say to it, Professor 316 00:18:20,080 --> 00:18:23,560 Speaker 1: Blanche Flower, within this and there's been upset one, upset 317 00:18:23,600 --> 00:18:27,040 Speaker 1: two checkers dot dot don Here we are in November 318 00:18:27,080 --> 00:18:30,439 Speaker 1: of two thousand and eighteen. Are we any closer in 319 00:18:30,520 --> 00:18:35,600 Speaker 1: your reading to a desire for a second referendum? Or 320 00:18:35,640 --> 00:18:40,360 Speaker 1: is that the great untouchable? Well, I think we probably 321 00:18:40,480 --> 00:18:44,600 Speaker 1: are closer to revos. I mean essentially there's three options 322 00:18:44,600 --> 00:18:47,680 Speaker 1: on the table, leave with no deal, don't leave it all, 323 00:18:48,119 --> 00:18:53,520 Speaker 1: or leave with this deal. And this deal looks hugely unacceptable. Um. Um. 324 00:18:53,520 --> 00:18:58,159 Speaker 1: Reese has actually called for a maze resignation. UM. I 325 00:18:58,240 --> 00:18:59,920 Speaker 1: think in the end what we're going to see is 326 00:19:00,040 --> 00:19:02,640 Speaker 1: this deal isn't very isn't a really very good I mean, 327 00:19:02,640 --> 00:19:06,480 Speaker 1: the person in charge of negotiating the deal, Dominic Rum, 328 00:19:06,480 --> 00:19:09,159 Speaker 1: has now quit. He's the person supposedly in charge of it. 329 00:19:09,560 --> 00:19:12,640 Speaker 1: So I think this just looks like, you know, a 330 00:19:12,640 --> 00:19:15,800 Speaker 1: total collapse of the deal, lack of political support, and 331 00:19:15,840 --> 00:19:18,520 Speaker 1: I suspect in the end we're going to see some 332 00:19:18,600 --> 00:19:20,720 Speaker 1: kind of revote. I when there was seven hundred thousand 333 00:19:20,720 --> 00:19:23,960 Speaker 1: people demonstrating in London very peacefly a week or so ago. 334 00:19:24,440 --> 00:19:27,240 Speaker 1: So I think I think in some sense that the option, 335 00:19:27,320 --> 00:19:30,880 Speaker 1: this option of take this deal looks already like it's 336 00:19:30,880 --> 00:19:33,000 Speaker 1: not going to happen. Them in the market responding, we've 337 00:19:33,040 --> 00:19:36,520 Speaker 1: seen a huge collapse in British banks, RBS and Barkleys. 338 00:19:36,560 --> 00:19:40,840 Speaker 1: We've seen the British house builders Persimmon and and and others. 339 00:19:40,880 --> 00:19:42,639 Speaker 1: I mean they've done eight per cent or so so 340 00:19:42,680 --> 00:19:45,080 Speaker 1: when markets respond like that, I think you kind of 341 00:19:45,280 --> 00:19:47,240 Speaker 1: have to rethink. And even if there's a fall of 342 00:19:47,280 --> 00:19:51,239 Speaker 1: the government, um, the people are not going to be 343 00:19:51,359 --> 00:19:52,800 Speaker 1: you know, the deal is not going to be much 344 00:19:52,800 --> 00:19:55,119 Speaker 1: better if you have a new prime minister tomorrow. So 345 00:19:55,160 --> 00:19:57,840 Speaker 1: I think the answer is that this, this is really 346 00:19:57,840 --> 00:20:02,200 Speaker 1: not a credible outcome. We may well see another another vote, 347 00:20:02,440 --> 00:20:05,080 Speaker 1: and we may well in the end see you know that. 348 00:20:05,440 --> 00:20:07,080 Speaker 1: I don't think the no Deal is going to happen. 349 00:20:07,080 --> 00:20:09,720 Speaker 1: I think we've probably going to be um back to 350 00:20:09,760 --> 00:20:12,760 Speaker 1: where you were, folks, Royal Bank of Scotland down ten eleven. 351 00:20:13,200 --> 00:20:18,560 Speaker 1: Here in London trading today David blanche Flower, Governor Kearney 352 00:20:18,600 --> 00:20:22,120 Speaker 1: has some constraints here, fewer degrees of freedom, and one 353 00:20:22,119 --> 00:20:24,960 Speaker 1: of them, as we saw in US retail sales, goes 354 00:20:25,000 --> 00:20:28,399 Speaker 1: to a blanch Flower tone, which is where's the inflation? 355 00:20:28,560 --> 00:20:32,040 Speaker 1: I mean every report is sort of kind of like, really, 356 00:20:32,240 --> 00:20:35,600 Speaker 1: where's the inflation? Where is that dynamic? From where you 357 00:20:35,640 --> 00:20:40,480 Speaker 1: sit right now? Are are are central bankers misjudging that 358 00:20:40,840 --> 00:20:46,480 Speaker 1: modest measured inflation fear? Absolutely? I mean if you look 359 00:20:46,560 --> 00:20:48,760 Speaker 1: both in the US and the UK, the question you 360 00:20:48,880 --> 00:20:51,760 Speaker 1: probably ask yourself is where where is the evidence that 361 00:20:51,760 --> 00:20:54,200 Speaker 1: you need to raise rates to deal with the inflation 362 00:20:54,560 --> 00:20:58,600 Speaker 1: inflationing expectations of flat certainly not rising. Inflation looks to 363 00:20:58,640 --> 00:21:03,000 Speaker 1: be very weak. There is and obviously the downside risk. 364 00:21:03,080 --> 00:21:05,200 Speaker 1: Let's go to Karnie. I mean, Connie made it clear 365 00:21:05,240 --> 00:21:08,280 Speaker 1: that he thought the biggest downside risk we're actually from 366 00:21:08,280 --> 00:21:11,480 Speaker 1: brexit will too. Equally that that today you would clearly 367 00:21:11,560 --> 00:21:13,440 Speaker 1: argue on what you and I've been talking about, that 368 00:21:13,560 --> 00:21:15,760 Speaker 1: those risks are greater and the big deal, of course 369 00:21:15,800 --> 00:21:18,080 Speaker 1: in the US we're hearing some business folks, is that 370 00:21:18,440 --> 00:21:22,280 Speaker 1: the downside risk from trade wars. I suspect with rate 371 00:21:22,400 --> 00:21:25,960 Speaker 1: rises coming the slowing of the world economy. What we're 372 00:21:25,960 --> 00:21:29,639 Speaker 1: seeing is slowing of economy is induced by errors by 373 00:21:29,680 --> 00:21:32,280 Speaker 1: the central bank, especially the stead I think it's all 374 00:21:32,440 --> 00:21:35,560 Speaker 1: in all probability. The US is now slowing and what 375 00:21:35,640 --> 00:21:38,520 Speaker 1: we're hearing out of the FED members is complete error. Daniel, 376 00:21:38,840 --> 00:21:41,720 Speaker 1: I once attended and spoke modestly to one of your 377 00:21:41,840 --> 00:21:45,040 Speaker 1: packed lecture halls at Dartmouth College, and folks, the thing 378 00:21:45,080 --> 00:21:48,200 Speaker 1: was completely packed with Keynesians, just so yeah, you know, 379 00:21:48,280 --> 00:21:51,920 Speaker 1: I mean completely stacked, but you could hear a pin 380 00:21:52,000 --> 00:21:56,480 Speaker 1: drop over the under employed. This has been a life 381 00:21:56,480 --> 00:22:00,399 Speaker 1: study for you. I get more male professor plants, flower 382 00:22:00,920 --> 00:22:04,160 Speaker 1: and elite saying it's a fully employed economy that I've 383 00:22:04,200 --> 00:22:13,560 Speaker 1: ever gotten before. How underemployed are the underemployed in America? Well, 384 00:22:13,600 --> 00:22:17,199 Speaker 1: it's it's certainly clear that underemployment in America is a 385 00:22:17,240 --> 00:22:19,800 Speaker 1: really big deal. Um and David Bell and I have 386 00:22:19,840 --> 00:22:22,639 Speaker 1: a paper that people can see on my website. It 387 00:22:22,760 --> 00:22:25,639 Speaker 1: basically shows you that it's the main variable that explains 388 00:22:26,000 --> 00:22:30,280 Speaker 1: labor markets slack. It's under employment that's holding down wages. 389 00:22:31,040 --> 00:22:33,760 Speaker 1: We have poorer data on the US than any other place. 390 00:22:34,320 --> 00:22:37,120 Speaker 1: But it's not just the part time for economic reasons. 391 00:22:37,119 --> 00:22:39,280 Speaker 1: It's people who are part time. They're happy to be 392 00:22:39,400 --> 00:22:42,240 Speaker 1: part time, they want more hours, and many full time 393 00:22:42,280 --> 00:22:46,280 Speaker 1: people do too, So that's the mismeasured factor. But it 394 00:22:46,320 --> 00:22:48,080 Speaker 1: seems to me when you go around the country you 395 00:22:48,160 --> 00:22:50,720 Speaker 1: talk to people that many of them say and like 396 00:22:50,800 --> 00:22:52,840 Speaker 1: more hours. I'd like to work more than I can do. 397 00:22:53,160 --> 00:22:56,880 Speaker 1: People are ours constrained. And if that's so, that probably 398 00:22:56,960 --> 00:22:59,720 Speaker 1: means that the nerors so called full employment rate of 399 00:23:00,040 --> 00:23:02,600 Speaker 1: woman is well below where we are, perhaps in the 400 00:23:02,680 --> 00:23:04,240 Speaker 1: order of three percent, not four and a half of 401 00:23:04,280 --> 00:23:07,000 Speaker 1: the FED thinks and then when the FED raises because 402 00:23:07,040 --> 00:23:09,639 Speaker 1: it doesn't look at under employment properly. This is a 403 00:23:09,720 --> 00:23:11,920 Speaker 1: major era. And it's called in the economy too slow 404 00:23:11,920 --> 00:23:14,560 Speaker 1: because the economy is not at full employment. So okay, 405 00:23:14,600 --> 00:23:17,240 Speaker 1: people say that, but it's actually that the story they're 406 00:23:17,240 --> 00:23:20,720 Speaker 1: telling is a story date three two eight not posted out. 407 00:23:20,800 --> 00:23:22,879 Speaker 1: Gotta leave it there. David blanche far and short and notist, 408 00:23:22,920 --> 00:23:26,119 Speaker 1: thank you so much on his whales and his United Kingdom. 409 00:23:26,240 --> 00:23:43,359 Speaker 1: Professor Blanchflower at Dartmouth College. This is a real joint 410 00:23:43,400 --> 00:23:46,120 Speaker 1: pim Flax in Washington and Time King in New York. 411 00:23:46,160 --> 00:23:50,040 Speaker 1: It is an annual visit off, hands down the most 412 00:23:50,080 --> 00:23:55,480 Speaker 1: prestigious award in business journalism. It is hugely competitive, so 413 00:23:55,520 --> 00:23:58,119 Speaker 1: many of our guests over the years have been winners 414 00:23:58,160 --> 00:24:00,000 Speaker 1: of this. I think of Rob and Roger and I'm 415 00:24:00,080 --> 00:24:03,040 Speaker 1: Hilarian and others that have really been part of the 416 00:24:03,119 --> 00:24:07,480 Speaker 1: Financial Times Book Award. Just just fabulous effort by McKinsey 417 00:24:07,560 --> 00:24:11,600 Speaker 1: and FT Lionel Barber's shop just doing a great job. 418 00:24:11,680 --> 00:24:15,919 Speaker 1: And this year was an extraordinary list of books. And 419 00:24:16,000 --> 00:24:20,280 Speaker 1: it is fabulous to know that John Carrerew is one 420 00:24:20,560 --> 00:24:22,600 Speaker 1: for Bad Blood. We'll get into the book in a minute. 421 00:24:23,000 --> 00:24:26,959 Speaker 1: But he comes into our studio, Pim totally depressed because 422 00:24:26,960 --> 00:24:32,280 Speaker 1: Sterlings on nine seven in your award is paid in pounds. Sterling, 423 00:24:33,240 --> 00:24:36,000 Speaker 1: did you cash it in for bitcoin this morning or something? 424 00:24:36,800 --> 00:24:40,200 Speaker 1: Money hasn't come yet. The money hasn't That's the reason 425 00:24:40,280 --> 00:24:43,639 Speaker 1: I'm so sad about Sterling's fault. And the check is 426 00:24:43,680 --> 00:24:45,600 Speaker 1: in the mail and you'll see it and hopefully it 427 00:24:45,640 --> 00:24:50,600 Speaker 1: won't be converted into bitcoin. There is a sentence, a 428 00:24:50,720 --> 00:24:53,840 Speaker 1: painful sentence in a painful book, Bad Blood, Secrets and 429 00:24:53,840 --> 00:24:58,199 Speaker 1: Allies in Silicon Valley. Elizabeth was accepted to Stanford in 430 00:24:58,200 --> 00:25:02,000 Speaker 1: the spring of two thousand two as a President's Scholar, 431 00:25:02,119 --> 00:25:07,439 Speaker 1: a distinction bestowed on top students. This was one of 432 00:25:07,480 --> 00:25:11,359 Speaker 1: the everyone listening. They wanted their daughter, their son to 433 00:25:11,520 --> 00:25:15,440 Speaker 1: be like Elizabeth. Who was she back then before this 434 00:25:15,840 --> 00:25:20,240 Speaker 1: huge scandal. She was very smart and promising student. She 435 00:25:20,320 --> 00:25:23,520 Speaker 1: had um spent her high school years in in Houston, 436 00:25:23,600 --> 00:25:26,159 Speaker 1: had gone to St. John's, which is a prestigious private 437 00:25:26,200 --> 00:25:29,920 Speaker 1: school in Houston, and graduated near the top of her 438 00:25:29,920 --> 00:25:33,600 Speaker 1: class and gotten into Stanford with the scholarship that you mentioned. 439 00:25:34,200 --> 00:25:38,720 Speaker 1: She was eighteen years old, and she lasted at Stanford 440 00:25:38,800 --> 00:25:40,679 Speaker 1: less than a year and a half. She dropped out 441 00:25:41,119 --> 00:25:44,879 Speaker 1: before the end of her sophomore year. In in the 442 00:25:44,880 --> 00:25:48,159 Speaker 1: middle of her sophomore year and decided that she was 443 00:25:48,200 --> 00:25:51,439 Speaker 1: going to create her company, which she called Paranos. It 444 00:25:51,560 --> 00:25:56,199 Speaker 1: was a mix of the terms therapy and diagnosis, because 445 00:25:56,200 --> 00:26:00,359 Speaker 1: her vision was for a medical device that would run 446 00:26:01,080 --> 00:26:04,520 Speaker 1: all the blood tests pretty much known to man on 447 00:26:04,760 --> 00:26:10,080 Speaker 1: just a tiny sample of blood drawn from a finger. John, 448 00:26:10,640 --> 00:26:15,840 Speaker 1: can you describe for the listeners if you believe this 449 00:26:16,080 --> 00:26:21,320 Speaker 1: was something the scandal of Taraos. Was it premeditated or 450 00:26:21,359 --> 00:26:25,320 Speaker 1: did it start out as something real and then just 451 00:26:26,359 --> 00:26:32,119 Speaker 1: snowball into something that sucked so many people into it. 452 00:26:32,119 --> 00:26:35,240 Speaker 1: It was the ladder. This was not a premeditated long con. 453 00:26:35,320 --> 00:26:37,960 Speaker 1: This was not Bernie Madoff who at some point in 454 00:26:38,000 --> 00:26:41,320 Speaker 1: the mid eighties woke up one morning and said, I'm 455 00:26:41,320 --> 00:26:43,440 Speaker 1: going to do a Ponzi scheme. And from that point 456 00:26:43,440 --> 00:26:46,200 Speaker 1: on for the next years it was black and white. 457 00:26:47,200 --> 00:26:51,800 Speaker 1: Elizabeth Holmes dropped out of Stanford truly uh, wanting to 458 00:26:51,920 --> 00:26:55,159 Speaker 1: create a company and successful company, wanting to walk in 459 00:26:55,240 --> 00:26:59,560 Speaker 1: the footsteps of Horitle Steve Jobs, and it became a 460 00:26:59,600 --> 00:27:03,639 Speaker 1: fraud with the years. What what happened is, unlike Steve Jobs, 461 00:27:03,680 --> 00:27:06,439 Speaker 1: she wasn't working on a computer product. She was working 462 00:27:06,880 --> 00:27:10,159 Speaker 1: on a medical product, and medical science is hard, and 463 00:27:10,280 --> 00:27:14,520 Speaker 1: she encountered setbacks, and she papered them over and refused 464 00:27:14,520 --> 00:27:18,560 Speaker 1: to acknowledge them to her investors, to her board, eventually 465 00:27:18,600 --> 00:27:22,879 Speaker 1: to the public, and began cutting corners and telling small 466 00:27:22,880 --> 00:27:26,080 Speaker 1: lies that that snowballed into bigger lies, and by the 467 00:27:26,080 --> 00:27:29,080 Speaker 1: time she went live with her supposedly innovative blood tests 468 00:27:29,080 --> 00:27:32,719 Speaker 1: in two thousand thirteen, the gap between what she claimed 469 00:27:32,760 --> 00:27:35,960 Speaker 1: she had achieved and what the reality of the technology 470 00:27:36,080 --> 00:27:38,200 Speaker 1: was was was so big that it became a fraud. 471 00:27:39,200 --> 00:27:41,920 Speaker 1: John to just to be a front about it. At 472 00:27:41,960 --> 00:27:46,120 Speaker 1: one point, I was at an industry event and Elizabeth 473 00:27:46,119 --> 00:27:51,000 Speaker 1: Holmes was the guests speaker, and during this speech, you know, 474 00:27:51,080 --> 00:27:55,679 Speaker 1: people talk to each other and everybody said, I don't 475 00:27:55,800 --> 00:28:00,800 Speaker 1: understand how they're doing this. I don't under stand what 476 00:28:01,040 --> 00:28:05,919 Speaker 1: she's saying. Is that something that should have wrung a 477 00:28:05,960 --> 00:28:09,840 Speaker 1: lot more bells than it did. Absolutely, I mean she 478 00:28:10,400 --> 00:28:13,000 Speaker 1: when you look at her all her public appearances. She 479 00:28:13,040 --> 00:28:15,520 Speaker 1: started raising her profile in late two thousand thirteen and 480 00:28:15,560 --> 00:28:18,520 Speaker 1: then pretty soon became a fixture on the Silicon Valley 481 00:28:18,560 --> 00:28:22,240 Speaker 1: conference circuit, at healthcare conferences and gracing the covers of 482 00:28:22,280 --> 00:28:26,240 Speaker 1: magazines and doing a lot of TV. When you listener 483 00:28:26,320 --> 00:28:27,960 Speaker 1: and you can go back and look at all these 484 00:28:27,960 --> 00:28:32,520 Speaker 1: public appearances on YouTube, she never gets into the details 485 00:28:33,160 --> 00:28:36,040 Speaker 1: of the technology or the science. It's all just these 486 00:28:36,080 --> 00:28:39,920 Speaker 1: sort of canned you know, catchphrase. I totally agree with that, 487 00:28:39,960 --> 00:28:42,239 Speaker 1: And what Pim just said is absolutely critical about a 488 00:28:42,240 --> 00:28:45,160 Speaker 1: lot of people are like, really you the thing about 489 00:28:45,240 --> 00:28:47,800 Speaker 1: giant Carrew folks, it's so important. And again with us 490 00:28:47,800 --> 00:28:50,880 Speaker 1: with the F. T. Mackensey book award, Bad Blood, just 491 00:28:50,960 --> 00:28:53,760 Speaker 1: a riveting book. The thing that's so important here is 492 00:28:53,840 --> 00:28:56,720 Speaker 1: guys like you caught this early. You won the Pulitzer 493 00:28:56,720 --> 00:29:02,760 Speaker 1: Prize for you you you want George Polka didn't. No, 494 00:29:03,040 --> 00:29:05,280 Speaker 1: I won the poster the year before for for something else. 495 00:29:05,400 --> 00:29:09,000 Speaker 1: But excuse me, but you're like the real You're like 496 00:29:09,160 --> 00:29:10,960 Speaker 1: the real deal. When you were at the Wall Street 497 00:29:11,040 --> 00:29:14,760 Speaker 1: Journal getting this done, why did the investment community not 498 00:29:14,960 --> 00:29:18,160 Speaker 1: see your stuff and say, wait a minute. Well, for 499 00:29:18,240 --> 00:29:24,320 Speaker 1: one thing, she scrupulously avoided sophisticated medical technology venture capitalists. 500 00:29:24,680 --> 00:29:27,600 Speaker 1: In the latter part of you know, the latter stage 501 00:29:27,600 --> 00:29:29,520 Speaker 1: of her company, which is when she raised most of 502 00:29:29,520 --> 00:29:32,520 Speaker 1: the money, she she really avoided them and went to 503 00:29:32,600 --> 00:29:37,520 Speaker 1: the family offices of billionaires who were less sophisticated. Um. 504 00:29:37,640 --> 00:29:40,000 Speaker 1: And then, you know, I think it has to do 505 00:29:40,040 --> 00:29:43,320 Speaker 1: with the gold rush environment of Silicon Valley. I think 506 00:29:43,320 --> 00:29:46,239 Speaker 1: we're really you know, we've witnessed in the past uh 507 00:29:46,480 --> 00:29:50,160 Speaker 1: what half dozen years, another boom, another sort of tulip fever, 508 00:29:50,880 --> 00:29:53,680 Speaker 1: just fifteen twenty years after the dot com boom, And 509 00:29:53,720 --> 00:29:57,160 Speaker 1: in that kind of environment, people just, uh, you know, 510 00:29:57,200 --> 00:29:59,320 Speaker 1: it's the fear of missing out. They all want to 511 00:29:59,400 --> 00:30:01,920 Speaker 1: hitch them cells to the next rocket ship too riches. 512 00:30:02,000 --> 00:30:05,840 Speaker 1: They thought that this might be the next Facebook. Elizabeth 513 00:30:05,840 --> 00:30:08,200 Speaker 1: Holmes might be the next Mark Zuckerberg. And I think 514 00:30:08,240 --> 00:30:12,600 Speaker 1: that plays a big role. Robert Kraft, Betsy de Vos, 515 00:30:13,200 --> 00:30:19,080 Speaker 1: Carlos Slim, George Schultz, Henry Kissinger. You could go on 516 00:30:19,120 --> 00:30:21,760 Speaker 1: and on and list all the people associated and supporting 517 00:30:21,800 --> 00:30:28,840 Speaker 1: Rupert Murdoch. Yes, you were in many ways vilify by 518 00:30:28,880 --> 00:30:33,280 Speaker 1: the company and its supporters during your entire period of 519 00:30:33,320 --> 00:30:38,640 Speaker 1: covering this. Did anyone ever come out and apologize and say, yeah, 520 00:30:38,640 --> 00:30:42,640 Speaker 1: you got it right, John? Never? I mean The closest 521 00:30:42,680 --> 00:30:46,280 Speaker 1: thing that's happened is David Boys, I think, in some 522 00:30:46,400 --> 00:30:50,560 Speaker 1: recent interviews with The New York Times in New York Magazine, 523 00:30:51,200 --> 00:30:55,360 Speaker 1: conceding that I did important work, uh but then uh, 524 00:30:55,400 --> 00:31:00,440 Speaker 1: you know, adding uh something about my overwriting, and also 525 00:31:00,520 --> 00:31:02,719 Speaker 1: taking issue with the fact that I've been calling the 526 00:31:02,760 --> 00:31:06,560 Speaker 1: actions of his law firm thuggish in my book tour Um. 527 00:31:06,680 --> 00:31:10,880 Speaker 1: But nonetheless I'll take uh, you know, those words of 528 00:31:11,880 --> 00:31:15,080 Speaker 1: from from David Boys acknowledging that I had it. Nobody cares. 529 00:31:15,320 --> 00:31:17,520 Speaker 1: All we care about is Adam McKay killed the big 530 00:31:17,560 --> 00:31:20,160 Speaker 1: short Vanessa Taylor and Adam mccare and you get together 531 00:31:20,480 --> 00:31:22,800 Speaker 1: and they're gonna do the big bad Blood. Have you 532 00:31:22,880 --> 00:31:25,440 Speaker 1: met Jennifer Lawrence When I heard that she was gonna 533 00:31:25,480 --> 00:31:28,720 Speaker 1: play Elizabeth? I said, that's perfect. I mean, did you 534 00:31:29,160 --> 00:31:31,520 Speaker 1: does that fit for you? That Jennifer Lawrence is gonna 535 00:31:31,520 --> 00:31:34,200 Speaker 1: play Elizabeth Holmes. I think it's great. I think she's great. 536 00:31:34,280 --> 00:31:38,200 Speaker 1: She's an unbelievable actress. She she's sounds scary. I think 537 00:31:38,240 --> 00:31:40,840 Speaker 1: she's going to nail the role, and and uh yeah, 538 00:31:40,840 --> 00:31:42,760 Speaker 1: I couldn't be happier. And I think McKay is a 539 00:31:42,800 --> 00:31:45,600 Speaker 1: great choice to produce and direct. Are you gonna do 540 00:31:45,640 --> 00:31:48,000 Speaker 1: the little side vignettes through it like they did in 541 00:31:48,120 --> 00:31:51,720 Speaker 1: Big Short where they actually explains, you know, credit the 542 00:31:51,720 --> 00:31:53,360 Speaker 1: fault swaps and now are they going to do that? 543 00:31:53,760 --> 00:31:55,560 Speaker 1: I don't, I don't know, I mean right now? And 544 00:31:55,600 --> 00:31:57,640 Speaker 1: where at the stage where the screenplay is getting written. 545 00:31:57,640 --> 00:32:00,640 Speaker 1: They hired Vanessa Taylor, who co out the Shape of 546 00:32:00,640 --> 00:32:03,880 Speaker 1: Water with Giermo del Toro, to hire the screenplan So 547 00:32:03,920 --> 00:32:07,480 Speaker 1: what that's what she's doing right now and I'm not 548 00:32:07,920 --> 00:32:11,680 Speaker 1: I don't know what McKay's plans are, and I think 549 00:32:11,680 --> 00:32:13,840 Speaker 1: it's just going to depend on what the screenplay looks like. 550 00:32:14,160 --> 00:32:16,560 Speaker 1: This has been wonderful, Thank you so much. Bad Blood 551 00:32:16,640 --> 00:32:19,680 Speaker 1: is a book in this it's again important book by itself, 552 00:32:20,120 --> 00:32:22,840 Speaker 1: but it's really been vetted by the best in Financial 553 00:32:22,880 --> 00:32:26,000 Speaker 1: journalism the f T. Mackenzie Book Awards, and it was 554 00:32:26,040 --> 00:32:31,720 Speaker 1: a winner. Amid incredibly is an incredible year for book journalism. 555 00:32:31,760 --> 00:32:34,440 Speaker 1: And to see John Carerew do so well as a 556 00:32:34,520 --> 00:32:36,160 Speaker 1: joy to see. And again the movie it wants a 557 00:32:36,200 --> 00:32:41,160 Speaker 1: movie up. I think they might start filming it, you know, 558 00:32:42,360 --> 00:32:46,440 Speaker 1: next year, you never know. John, Thank you so much. 559 00:32:46,720 --> 00:32:53,600 Speaker 1: Care The book is bad, but thanks for listening to 560 00:32:53,640 --> 00:32:58,200 Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on 561 00:32:58,240 --> 00:33:03,320 Speaker 1: Apple Podcasts, sound Out, or whichever podcast platform you prefer. 562 00:33:03,880 --> 00:33:07,240 Speaker 1: I'm on Twitter at Tom Keane before the podcast. You 563 00:33:07,240 --> 00:33:10,640 Speaker 1: can always catch us worldwide. I'm Bloomberg Radio