Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene
Speaker 1: Jay Leye. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course on the Bloomberg The
Speaker 1: main event and then the G seven and leaders meeting
Speaker 1: today and Saturday and what's shaping up to be the
Speaker 1: most divisive gathering of leaders from major industrialized nations in years.
Speaker 1: I'm really pleased to say that joining us from Canada
Speaker 1: is Andrew barda Bloomberg's European government reporter, and you just
Speaker 1: walked me through the issues on the table and why
Speaker 1: this could be so contentious out the next twenty four hours.
Speaker 1: Good morning. Look that there's really only one issue on
Speaker 1: the table that that matters is um obviously the trade war,
Speaker 1: though though their scheduled to talk about other things have
Speaker 1: invited a few emerging markets here, they'll talk about terror,
Speaker 1: they'll talk about cybercrime. It's really all about about trade.
Speaker 1: And as you said, you know, the setting the table
Speaker 1: and it's and it's not looking good. You had McCaw
Speaker 1: come out and saying, um, you know, we have no
Speaker 1: problem signing in agreement with only six countries if we
Speaker 1: need to be, and we have, we have May saying
Speaker 1: there would be a measured proportional response. Trump then comes
Speaker 1: out and in a very personal attack on Trudeau, accuses
Speaker 1: him of being so indignant um and and thirty seven
Speaker 1: minutes ago, uh tweeted that um he was looking forward
Speaker 1: to straightening out unfair trade deals with the seven countries
Speaker 1: and if that doesn't happen, well, from his perspective, the
Speaker 1: US will come out even stronger. So you know, he
Speaker 1: would sort of expect before meeting like this to have
Speaker 1: conciliatory comments, to have leaders, you know, lay the groundwork
Speaker 1: for having a conversation, and we're seeing the opposite takes place.
Speaker 1: And I think that that's what's being reflected in the
Speaker 1: markets now, very aggressive tone from Trump and and leaders
Speaker 1: who previously had tried, you know, appeasement and being kind
Speaker 1: of Trump whisperer and trying to see if they could
Speaker 1: get him on board, they're realizing that that hasn't hasn't worked.
Speaker 1: So the gloves are coming off and now the other
Speaker 1: g seven countries are retaliating and responding with their own language.
Speaker 1: So as you say it will be the first meeting
Speaker 1: in many years where we're probably see some fireworks, and
Speaker 1: we'll be looking closely at the final communicate in the
Speaker 1: body language leading up to that, the final I imagine
Speaker 1: we're going to see fireworks. But as you know better
Speaker 1: than anyone else, UM in our in our team at Bloomberg,
Speaker 1: that noise and news are two very different things, um,
Speaker 1: And over the last twenty four hours and imagine over
Speaker 1: the next twenty four hours, we have heard a lot
Speaker 1: of news, a lot of noise, a lot of bluster,
Speaker 1: and I just wonder, will it be all about mood,
Speaker 1: music and optics or we actually have some news to
Speaker 1: deal with at the other side of the summit. I
Speaker 1: think that I think the worry is not that we're
Speaker 1: going to have news at the end of it, but
Speaker 1: that we're not going to have news. And what I
Speaker 1: mean by that is, you know, usually the G seven
Speaker 1: all the countries by now will have will be like
Speaker 1: on the draft of the final commun k, They'll be
Speaker 1: talking about every period, every comma, every word, and and
Speaker 1: having having this kind of consensus where you come out
Speaker 1: of the summit and you have an agreement that you
Speaker 1: communicate to the world, and you say we the G
Speaker 1: seven united, you know, believe X y Z that that's
Speaker 1: not happening. You know, we're we're seeing the opposite. We're
Speaker 1: seeing you know, and maybe a lot of noise, but
Speaker 1: we're not seeing them come come together. And and and
Speaker 1: that's sort of important because what you're gonna have at
Speaker 1: the end of this at the end of this agreement
Speaker 1: is either going to be you know, a G six
Speaker 1: plus one, which which may be about as good as
Speaker 1: a guest, but it could even be worse than that.
Speaker 1: It could be that there is zero statement and the
Speaker 1: Trudeau has to come out and kind of recap and
Speaker 1: and say, you know what he thinks happens. And then
Speaker 1: you have all the different countries come out and put
Speaker 1: their spin on it. And and from a market's point
Speaker 1: of view, that that may be the worst the worst,
Speaker 1: you know, the worst case no agreement. Everybody's pushing their
Speaker 1: own thing, and we leave the G seven with with
Speaker 1: nothing to stop this this global trade war from from
Speaker 1: getting work. Okay, so it's tipped for tad. I get that.
Speaker 1: The president. I mean, I'm gonna essentially call it transactional bluster.
Speaker 1: Does Europe have a bluster? As they come to CHAUVROI, well,
Speaker 1: you remember in the in the past, in the in
Speaker 1: the in the past sanctions, Europe was very quick to
Speaker 1: respond and they were very targeted spots, like they knew
Speaker 1: exactly you know, who to hit, how to hit, how
Speaker 1: to hurt the Republicans. And you've got the mid terms
Speaker 1: coming up, and and you have to assume that all
Speaker 1: the other get no. But are they gonna bluster? Andrew,
Speaker 1: I don't sense that there'll be any bluster. They're just
Speaker 1: gonna show up. They're gonna act diplomatic and then tip
Speaker 1: for tad will click in. Right, Well, that's what we've
Speaker 1: seen so far, and and and you're right, I mean,
Speaker 1: the blusters there. But but Europe has that it's willing
Speaker 1: to retaliate. It is willing to meet Trump head on
Speaker 1: when it comes to the tariffs. And you know we've
Speaker 1: seen that. And there's nothing that suggested that. John, help
Speaker 1: me here. I think you're better at this, you and Andrew,
Speaker 1: Andrew decades of work on this, and you as well.
Speaker 1: I mean, Miracle is a physicist from East Germany who
Speaker 1: grew up I believe under some serious duress, she's got
Speaker 1: to be looking at this side show this carnival act
Speaker 1: and going. You know, we're just gonna go up to Quebec.
Speaker 1: We're gonna make decisions, and then we're gonna go back
Speaker 1: and put an import tax on Budweiser. The Chuncellor Miracle
Speaker 1: understands the importance of international diplomacy and integration. I get that, Andrew,
Speaker 1: And I'm not trying to demean that. We all understand
Speaker 1: how important the last several decades have been for global peace.
Speaker 1: But in terms of the G seven agreement, has it
Speaker 1: ever been worth the paper it's written on in recent years?
Speaker 1: And we can follow in the G twenty communicate into
Speaker 1: that question as well, Andrew, because after the last several years,
Speaker 1: I see a lot of people agreeing on stuff on
Speaker 1: paper and then going back home and doing very different things. Well, look,
Speaker 1: I had this conversation yesterday with John Curtin from the
Speaker 1: G seven Research Group, and and I mean, this is
Speaker 1: all he does. He's been studying this for for decades now,
Speaker 1: and he says, in the history of the G seven,
Speaker 1: you've really only had one meeting where the world was
Speaker 1: worse off because of the G seven. And you know
Speaker 1: that that possibility is back on the table, which is
Speaker 1: something that you have to worry about. I mean, you've
Speaker 1: always had these statements, but you know that you can
Speaker 1: argue what to what extent they've were the they've made
Speaker 1: the world a better place, but there has been some
Speaker 1: incremental progress and you have gotten people to kind of
Speaker 1: agree to certain commitments and move in a certain direction.
Speaker 1: But if you're not putting anybody on that track, then yeah,
Speaker 1: you have to agree. You know what, what are we
Speaker 1: going to get out of this? Andrew Barton, thank you
Speaker 1: so much, brilliant and I just greatly appreciate it. From
Speaker 1: Quebec and these important G seven meetings. Should we talk Brazil? Okay,
Speaker 1: Gabriella Santos, do you want to guess from jam P
Speaker 1: Morgan Asset Management clubal market strategy is very confused, wondering
Speaker 1: what on earth is going on in this studio, Gabby,
Speaker 1: Let's just talk about Brazil. Brazil are intervening in the
Speaker 1: FX market without much success. At the moment, M e
Speaker 1: M is under some significant stress. I would say, relative
Speaker 1: to how it has been in the last year, why
Speaker 1: aren't they hiking interest rates? So let's think about why
Speaker 1: Brazil is under pressure right now? I would say two things.
Speaker 1: The first is the broad uest dollar strength um really
Speaker 1: since mid April, and Brazil seen as a bit vulnerable
Speaker 1: to that given it's very large fiscal deficits. So that's
Speaker 1: one thing. Central bank hiking actually exacerbates that problem. Uh.
Speaker 1: The second reason Brazil's under pressure right now is because
Speaker 1: the investment thesis is falling apart for this year, growth
Speaker 1: has been slashed, growth expectations and there's more of a
Speaker 1: probability of a shall we say, non business friendly candidate
Speaker 1: win in October. Central bank hiking actually doesn't fix either
Speaker 1: of those problems either, So they are pushing back against
Speaker 1: this narrative that raising rates is going to fix any
Speaker 1: of the problems, perhaps even exacerbate them. Let's remember that
Speaker 1: inflation in Brazil is actually very very low at the moment.
Speaker 1: So just to discuss em more broadly, there are calls
Speaker 1: for help from emerging markets, from the Central Bank Governor
Speaker 1: of Indonesia, the Central Bank Governor of the r BI,
Speaker 1: and India Urgent Batel, essentially asking the FED to do something.
Speaker 1: But they do something. Is interesting to me because it's
Speaker 1: not slow down rate hikes, it's slowed down the pace
Speaker 1: of balance sheet reduction. Why is balance sheet reduction so
Speaker 1: important to em right now in a way that maybe
Speaker 1: some people didn't anticipate. I'm not sure that that I
Speaker 1: would agree that it is necessarily because for emerging markets
Speaker 1: in the past, higher rates in the United States in
Speaker 1: and of themselves have not been a problem. Because rates
Speaker 1: are rising, balance sheet is coming down because the economy
Speaker 1: is doing well. That's a good thing for emerging markets.
Speaker 1: So honestly, the trouble we're here, we're having right now
Speaker 1: is not interest rate in and of itself related. It's
Speaker 1: dollar strength related, and that's much more a function of
Speaker 1: some risk aversion that we've been seeing over the past
Speaker 1: few months. So I'm not sure what the FED can
Speaker 1: do here Necessarily, the data just has to come through
Speaker 1: in terms of economies outside. It makes you wonder if
Speaker 1: that's the case, then why are the central bank governors
Speaker 1: of India, Indonesia and others as well asking for this
Speaker 1: help If you're saying it's not as critical. I mean
Speaker 1: the Urgi Baal, the governor of the RBI, essentially was
Speaker 1: warning of a dollar liquidity crisis because of banishing production.
Speaker 1: And I agree, John, you're correct to bring up India.
Speaker 1: I thought that was a very important comments, you know,
Speaker 1: given them mix, There's not been enough talk about India
Speaker 1: and using the word crisis. It just seems it just
Speaker 1: seems a lot to me. We've, like you said, had
Speaker 1: a big move over the last month. It's been kind
Speaker 1: of calm over the last year. Actually, sentiment around emerging
Speaker 1: markets from investors on a by side, it's been incredibly good,
Speaker 1: to be honest with you, from what our sentiment is
Speaker 1: still good on emergency. So just walk me through why
Speaker 1: these central bank governors are so worried right now. I'm
Speaker 1: not particularly sure. I think perhaps it harkens memories right
Speaker 1: of that tough period for emerging markets from two thousand
Speaker 1: eleven up until But let's think about the fact that
Speaker 1: we're not in that place anymore. Growth is improving, That's
Speaker 1: what drives capital flows to emerging markets in the medium term.
Speaker 1: Earnings are improving, vulnerabilities are better, commodity prices are higher,
Speaker 1: and the list goes on and on. It's simply within
Speaker 1: the JP Morgan world. Is it the same financial structures
Speaker 1: of e M as it was crisis to crisis, back
Speaker 1: to crisis, back to crisis back or truly is this
Speaker 1: time different where it's a new e M which is
Speaker 1: more resilient in liquidity and resilient solvency. Is that the
Speaker 1: official line, that is our our view from our side, UM,
Speaker 1: I would say there's a lot of focus on the
Speaker 1: outliers here when it comes to countries which still have
Speaker 1: very large current account deficits and thus are very exposed
Speaker 1: to any sort of ebbs and flows in terms of liquidity.
Speaker 1: That would be a Turkey, and in Argentina there are
Speaker 1: some stream outliers in terms of US dollar Dad taking
Speaker 1: up a large share of debt. That's an Argentina example
Speaker 1: as well. But those are outliers. In terms of emerging
Speaker 1: markets as a whole, it's a much much better, much
Speaker 1: more resilient picture. Very good, Thank you, a real especial tribute.
Speaker 1: More now is Stephen Major, Steve Major of HSBC. Steve
Speaker 1: are rates high or on a relative basis do you
Speaker 1: look at them? Is still low? Uh? US rates too
Speaker 1: high in the forwards. I doubt the FED will get
Speaker 1: anywhere near where they think they're going to go. Well,
Speaker 1: if it doesn't happen in the next few months, I'll
Speaker 1: be very surprised they will choke on the additional great hikes,
Speaker 1: and I imagine and two more would be enough. UM
Speaker 1: to two more gets us to two twenty five. That
Speaker 1: the thing is that the idea that the FED could
Speaker 1: just close their eyes and keep hiking all the weight
Speaker 1: of three or three five without there being some massive event,
Speaker 1: I think is naive. There's been many, many surprises in
Speaker 1: the last month, and I think that we are seeing
Speaker 1: a regime shift in the risky asset markets. Look at
Speaker 1: all the incidents that keep popping up in e M.
Speaker 1: It's not a coincidence that the common denominator is the
Speaker 1: vicious tightening of financial conditions. Now, I can't believe that
Speaker 1: people don't recognize this because they're looking at outdated financial
Speaker 1: conditions indices, and really you've got to look at this
Speaker 1: in a more holistic way. The FED is increasing rates,
Speaker 1: they're shrinking the balance sheet, and the U. S. Treasury
Speaker 1: is rejuvenating cash as an asset class. That is a
Speaker 1: massive tightening um. The last time we had this kind
Speaker 1: of tightening of financial conditions associated with low unemplo moment
Speaker 1: and lucier fiscal policy. The last time this happened, England
Speaker 1: won the World Cup. That's football. For Tom's benefit and
Speaker 1: both football, Steve. Steve's in East London guy west Ham fan.
Speaker 1: But West Town won the World Cup for England. Actually,
Speaker 1: so so in nineteen sixties six England won the football
Speaker 1: World Cup. And it's fifty years fifty two years ago.
Speaker 1: So in nine six you will remember there was a
Speaker 1: very strong tightening of credit conditions and what happened afterwards
Speaker 1: wasn't very nice. And and from the UK perspective, we
Speaker 1: had the nineteen sixty seventy evaluation of course. Um, but
Speaker 1: you can read the St Louis Fed nineteen sixty six papers,
Speaker 1: a paper about nine six written by the St Louis
Speaker 1: Fair that talks in strong tightening of financial conditions. So
Speaker 1: I think it's naive to look at say the I
Speaker 1: O E R or the FED funds rate and say
Speaker 1: they haven't Steve. That's what I was going to ask
Speaker 1: you about actually, because you've mentioned a couple of things.
Speaker 1: You've talked about regime change one and also this tining
Speaker 1: of financial conditions. I think for some listeners they'll be
Speaker 1: looking at financial conditions and thinking things are still easy.
Speaker 1: So what are you looking at, Steve? What are the
Speaker 1: indicated is that you think people should pay attention to well,
Speaker 1: what could possibly be wrong about the idea that financial
Speaker 1: conditions are lose. So if you look at this, if
Speaker 1: you look at the FEDS indicries, and there's a Bloomberg
Speaker 1: index as well asn't as a global index, bloom Bloomberg,
Speaker 1: Bloomberg has one. I think it's got ten or eleven components. Again,
Speaker 1: the Saint Louis fed, by the way, has a seventeen
Speaker 1: component financial conditions index. These these are tighter than they
Speaker 1: were in any time in the last twelve months, I think,
Speaker 1: but in the context of the last ten years, they're
Speaker 1: still loose. I suggest that they're picking up the wrong thing.
Speaker 1: So so in these indicries you've got things like the SMP,
Speaker 1: the VIX and the f O A S and this
Speaker 1: kind of stuff. The thing to make to me is
Speaker 1: that financial conditions for for Turkish corporates who are issuing
Speaker 1: in dollars, they are tight. For Chinese real estate companies
Speaker 1: who are coming to roll some bonds they issued a
Speaker 1: few years ago, they're also tight. For the Italian sovereign
Speaker 1: financial conditions are about to get very tight too. It
Speaker 1: seems to me if you look around the world, you
Speaker 1: go and ask a Japanese Bank, how it is the
Speaker 1: borrow dollars in the open market. You know, there's a
Speaker 1: lot of different institutions in different parts of the world
Speaker 1: will tell you that the financial conditions are getting very tight.
Speaker 1: And of course the FED looks at things globally. Sometimes
Speaker 1: they have to be whacked on the head and it
Speaker 1: might be that a strong dollar would do it for them.
Speaker 1: That the facts are quite simple. In the last five
Speaker 1: or six years, I think the FED has been distracted
Speaker 1: from its expected tightening path by China twice, Greece at
Speaker 1: least once, and even the UK around Brexit. So stuff happens.
Speaker 1: They get distracted or or they get deflected off the
Speaker 1: tightening path, and I think it's sort of happening. Do
Speaker 1: you know, in in May, I read my colleague David
Speaker 1: Bloom's piece about May. His team they put together a
Speaker 1: descriptive piece about what happened last month. And do you
Speaker 1: know in the month of May, you've got stories around Argentina, India, Brazil,
Speaker 1: obviously Malaysia, most recently Italy and Turkey that I've forgotten
Speaker 1: more than I can remember here. And then there's all
Speaker 1: the big set piece global things like trade wars and
Speaker 1: nuclear deals and Iran and North Korea, and there's so
Speaker 1: much stuff going on. That was one of the most
Speaker 1: volatile months we've had in modern times. Just because the
Speaker 1: VIX doesn't show it doesn't mean to say it wasn't volatile.
Speaker 1: It's a really good point, Steve. So it gets it
Speaker 1: gets to an important question. You've talked about regime change,
Speaker 1: in the regime shift, what's the new regime and what
Speaker 1: is the market. Look, my my regime change comment isn't
Speaker 1: just some assertion. It's based on how the term premium
Speaker 1: has decoupled from the level of yields. Now, I wrote
Speaker 1: a paper about this that was published at the beginning
Speaker 1: of the week with the colleagues, and that this is
Speaker 1: really important during the last fifteen years we've been in
Speaker 1: a queue regime. It's fifteen years, not ten. Because when
Speaker 1: Ben Bernanke wrote that paper, deeply should make sure it
Speaker 1: doesn't happen here. In two thousand and two, the Green
Speaker 1: Span fed actually were expected to implement some of Blankie's policies.
Speaker 1: In two thousand and three. It didn't happen, but the
Speaker 1: market built into the idea they were going to do it,
Speaker 1: so by the rumor sell the fact. Ever since then
Speaker 1: we've had We've got six occurrences of bullish flattening followed
Speaker 1: by irish deepening. Suddenly it changed because the fad is hiking.
Speaker 1: It all changed, right, so so this is scary. They're
Speaker 1: going to flip the curve over. Steve, always great to
Speaker 1: catch out with your very major, very thoughtful, always valuable.
Speaker 1: Thank you very much, Managing Director, Global head of Global
Speaker 1: Fixed Income Research over an HSBC and joining us out
Speaker 1: of out of London. Right now we get clarity and
Speaker 1: the economics of our time is this G seven melling
Speaker 1: occurs that do that with Stephen Roschudo, Yes, Stephen, wonderfully
Speaker 1: have you with us? We heard the president there and
Speaker 1: any number of themes. How does trade fold into the
Speaker 1: economic growth of the world economy? Well, I mean, you know,
Speaker 1: you think it's a zero sum game, but in reality
Speaker 1: it's not. Um. The reality is there are places which
Speaker 1: are more efficient at producing products than there are places
Speaker 1: that aren't efficient in producing products. And the whole concept
Speaker 1: of free trade is to allow that to develop. And
Speaker 1: I think the point that is trying to be driven
Speaker 1: home in here is that it's not about free trade,
Speaker 1: it's about fair trade. And there is this concept that
Speaker 1: tariffs are erected in different places to protect different industries,
Speaker 1: and this is a nationalist thing that every country does.
Speaker 1: And I think for many many years, the United States,
Speaker 1: because it was the largest, most powerful nation in the
Speaker 1: world UM, and used a lot of our willingness to
Speaker 1: trade with people as a tarret in order to get
Speaker 1: them to do political things that we were wishing them
Speaker 1: to do UH in supporting us. And now there's a
Speaker 1: bit of a pushback given the change in the world
Speaker 1: order that is brought about by the fact that China
Speaker 1: is so powerful now. And I think it is a
Speaker 1: recognition of that fundamental change. The president. I think there's
Speaker 1: some value there. Stephen s the President. It was some
Speaker 1: commisary you know, thinking about pardoning Muhammad Ali, but one
Speaker 1: of them was to bring Russia back in from the
Speaker 1: G seven to the G eight, which brings up that
Speaker 1: I m f like debate of what to do with China.
Speaker 1: Should we should we leg out here to a G
Speaker 1: E to G nine, a G ten. I would almost
Speaker 1: come up that you might as well just bring it
Speaker 1: down to a much smaller group than that. UM. You know,
Speaker 1: you should focus in on a really new G three UH,
Speaker 1: and that could be something as narrow as the United States, Germany, UM,
Speaker 1: and China, and those three are really the dominant issues here,
Speaker 1: because the problem with Europe and Europe is not being
Speaker 1: able to get itself moving. Is the fact that there
Speaker 1: is an uncertain degree of unfair trade practice that goes
Speaker 1: on within Europe UM and Germany does not contribute its
Speaker 1: fair share back out to the rest of Europe UM
Speaker 1: and that needs to be addressed. And the same thing
Speaker 1: is true with China and other areas. So yeah, the
Speaker 1: reality is those are the three things you've got to
Speaker 1: focus on. Those are the three countries that have to
Speaker 1: get together and decide how this is all going to
Speaker 1: get done. The rest of it really just falls into
Speaker 1: place around those three. Off the Bloomberg. I can figure
Speaker 1: this out, folks. What's list of g seven countries? Because
Speaker 1: Stephen Shood gives us a clinic, Canada, the host, France, Germany,
Speaker 1: the United Kingdom, Japan, Mr Abbe with the President yesterday, Italy,
Speaker 1: and then there's the United States as well. I mean,
Speaker 1: it really is a dated organization, Steve, isn't it. Yes,
Speaker 1: it is, and that's and that's part of the problem,
Speaker 1: and that's one of the reasons why you have this
Speaker 1: fractured behavior, and I think you also have to keep
Speaker 1: them mind. At the same time that this G seven
Speaker 1: discussion is going on, You've got the UK eat in
Speaker 1: the EU, You've got potential problems within Europe with regard
Speaker 1: to Italy and Spain um and this goes directly back
Speaker 1: to the to the German situation. And you have a
Speaker 1: very very aggressive China on the other side of the equation,
Speaker 1: and that all the infighting going on really distracting from
Speaker 1: the more important issue, which is China. And that's what
Speaker 1: I think, you know, the value that comes out of this,
Speaker 1: I hope will be a refocusing of the decision of
Speaker 1: the discussions to where they need to take place. Good
Speaker 1: morning in syrus Sex FM. I'll get it out serious
Speaker 1: x m H one nineteen across the Great Midwest, Steve.
Speaker 1: One of the constant themes of analysis this morning, whether
Speaker 1: Greg Valier at Horizon or Mike Gallen over in Axios,
Speaker 1: is Midwestern Republicans really upset with their president about these terroffts.
Speaker 1: What is the tip for tet agriculture angle with Germany,
Speaker 1: with France and England. I get it with China, but
Speaker 1: is there an agriculture angle across the Atlantic. Well, I
Speaker 1: don't think there is an agricult agenda off the Atlanta
Speaker 1: across the Atlantic, but I think there is certainly with
Speaker 1: regard to cant and I think there certainly is with
Speaker 1: regard to Mexico that that that could be addressed and
Speaker 1: how things come up through South America through Mexico. So
Speaker 1: I mean, I think that's where you get back into
Speaker 1: the napt To keep in mind he's attacking I'm not
Speaker 1: trying to support Trump other than end I think the
Speaker 1: America first concept is the right concept. Now, how you
Speaker 1: go about executing it we can all argue with and discussed,
Speaker 1: but the America first concept is a valid concept. He
Speaker 1: may not be approaching it properly, but all these specific
Speaker 1: trade deals that have been done have been done based
Speaker 1: on an idea that the United States is the largest,
Speaker 1: most powerful nation in the world, and we have to
Speaker 1: use our strength to help pull up other places in
Speaker 1: order to keep the world in a more stable, peaceful
Speaker 1: environment that dynamic no longer expects. Well, it's one more
Speaker 1: question in the wax philosophical here, as he's talking about
Speaker 1: milk terroriffs on Canada, you know you're protecting your cows.
Speaker 1: You're protecting the farmers. I get all that. All I
Speaker 1: can remember Steve was reading about feta cheese in the
Speaker 1: trade battle between Greece and Bulgaria. Over can the Bulgarians
Speaker 1: say feta cheese? And this is like a serious EU debate.
Speaker 1: So bring that over here to the trade that we
Speaker 1: have today. I mean, consumers worldwide really don't care anymore,
Speaker 1: do they. I mean, to the great extent, prices have
Speaker 1: been stabilized and prices have been held back. Consumers are
Speaker 1: much more interested in the job aspect, the wage aspect
Speaker 1: that comes out of this at this particular juncture. And
Speaker 1: the reality is given the imbalances and trade as simple mathematics,
Speaker 1: if you reverse that trade deficit, how many jobs are
Speaker 1: going to create? Now that's that simple, Steve, Thank you
Speaker 1: so much. Stephen shot on missoo on duty there, Abby,
Speaker 1: Joseph Cohen, if Goldman sachs, we do not care what
Speaker 1: the stock market is going to do, Abby, very quickly
Speaker 1: here the Washington Capitals finally done your thoughts on Mr
Speaker 1: Kin lifting that Stanley cup. I was, of course delighted
Speaker 1: to see Mrkin lift that Stanley cup. As a long
Speaker 1: time Caps fan, But I have to say this was
Speaker 1: going to be a Cinderella Stanley Cup final regardless of
Speaker 1: which team won. I mean, the Vegas team was wonderful.
Speaker 1: They had a fabulous season, really record breaking Mark Andre
Speaker 1: Fleury also was simply outstanding in all these games. But
Speaker 1: to seekin um lift that Stanley Cup was thrilling. But
Speaker 1: I'll tell you what was more thrilling, and that was
Speaker 1: the handshake line at Yes where the two teams greeted
Speaker 1: each other, not just in a polite manner, but there
Speaker 1: were warm hugs and sincere congratulations. Make America great again
Speaker 1: as a zeitgeist right now, I'm as Cohen. The basic
Speaker 1: idea here is the Washington capitals are as international as
Speaker 1: you get. I'll Vetchan from Rushka, t j o'she from Everett,
Speaker 1: Washington State, Bruce or Pick from UH from San Francisco,
Speaker 1: and Ocurs Haltby from Saskatchewan. That's the spirit that's missing
Speaker 1: in our trade debate, isn't it. Absolutely? And to quote
Speaker 1: the line from Hamilton's Immigrants, they get the job done. Um.
Speaker 1: And one of the things that's so great to see
Speaker 1: about hockey and some of our other professional sports as well,
Speaker 1: is the international flavor. But let's forget it's not just
Speaker 1: that industry. There are so many others in the United
Speaker 1: States where we have benefited immensely from our immigrant population.
Speaker 1: Joseph Cohen thirty seconds your view of the equity markets
Speaker 1: now twenty five thousand, Can you own equities at this point?
Speaker 1: I think equities UM are at roughly fair value right now. UM.
Speaker 1: We may have already seen the highs of of the
Speaker 1: year off the SNP and and the Dow based upon
Speaker 1: our analysis of earnings and cash flow. What I do
Speaker 1: worry about is that when you're at fair value UM,
Speaker 1: there can be mistakes, and there can be mistakes for
Speaker 1: example in policy government policy. There can also be disappointing report.
Speaker 1: So I think we need to be very careful. We're
Speaker 1: now in a period where it's not just the rising tide.
Speaker 1: You really have to select the ship properly. Joseph Cohen,
Speaker 1: thank you so much on the equity markets and Hurt
Speaker 1: Washington at Capitals. Thanks for listening to the Bloomberg Surveillance podcast.
Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or
Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom Keane.
Speaker 1: Before the podcast. You can always catch us worldwide. I'm
Speaker 1: Bloomberg Radio s