WEBVTT - GS Picked Solomon To Tap Modern Market, Young Blood: Schatzker 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:33.800 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. The 0:00:33.840 --> 0:00:38.040 boardroom drama continues. Golden Sachs said that David Solomon will 0:00:38.080 --> 0:00:41.880 become the sole president of the bank, elevating him over 0:00:41.920 --> 0:00:46.560 Harvey Schwartz as the eventual successor to Chief Executive Officer 0:00:46.720 --> 0:00:49.360 Lloyd blank Find. Of course, as follows at reports on 0:00:49.400 --> 0:00:51.920 Friday by The Wall Street Journal that Lloyd blank Find 0:00:52.080 --> 0:00:55.000 was planning to step down as CEO as early as 0:00:55.280 --> 0:00:58.760 this year. Later in the year, Eric Shasker joins us 0:00:58.760 --> 0:01:02.240 now he's editor at lar for Bloomberg. Eric, I want 0:01:02.240 --> 0:01:06.360 to start with denials by Lloyd blank Find that this 0:01:06.400 --> 0:01:08.480 news came from him over the weekend and he was 0:01:08.520 --> 0:01:11.720 sort of saying, it's sort of like Huckleberry Finn watching 0:01:11.760 --> 0:01:15.800 his eulogy. Why the pushback If Goldman Sachs is just 0:01:15.800 --> 0:01:19.920 going to fan the flames with this announcement today. Well, 0:01:20.680 --> 0:01:25.319 let's be careful. What Lloyd said was that, as you 0:01:25.480 --> 0:01:28.560 as you phrase it, that the news did not come 0:01:28.560 --> 0:01:30.320 from him, which is to say he wasn't the source 0:01:30.360 --> 0:01:34.240 of the Wall Street Journal report on Friday. But that's all. 0:01:34.560 --> 0:01:37.640 I'm not sure that I would call that a denial. Um. 0:01:37.720 --> 0:01:39.840 What it does tell us is that this did not 0:01:39.880 --> 0:01:44.560 go according to script, and that Goldman Sachs to a 0:01:44.600 --> 0:01:50.840 certain degree clearly wasn't in charge of the cadence of events. 0:01:51.280 --> 0:01:54.280 They might not have proceeded exactly according to Goldman's plan, 0:01:54.360 --> 0:01:57.200 but nevertheless, here we are. Goldman Weather by hook or 0:01:57.200 --> 0:01:59.480 by Crook was forced to say that David Solomon is 0:01:59.520 --> 0:02:04.760 the soul sole president excuse me, and the likely successor 0:02:04.840 --> 0:02:07.040 to Lloyd blank find a CEO if and when that happens. 0:02:07.080 --> 0:02:08.680 But they decided this a while ago. It wasn't like 0:02:08.760 --> 0:02:11.799 this happened over the weekend a short while, but it 0:02:11.880 --> 0:02:16.160 was not on Friday. My understanding, having recently spoken when 0:02:16.200 --> 0:02:18.520 I say recently in the last few minutes to a 0:02:18.560 --> 0:02:21.880 person UH with direct knowledge of the situation, is that 0:02:22.320 --> 0:02:24.120 Lloyd Blank find met with the rest of the board 0:02:24.120 --> 0:02:26.919 on February twenty one, regularly scheduled board meeting, at which 0:02:26.919 --> 0:02:30.519 point he recommended that David Solomon be the sole president 0:02:30.560 --> 0:02:35.360 of the firm and be his chosen successor, and the 0:02:35.440 --> 0:02:40.480 board endorsed that recommendation. So shortly thereafter we can presume 0:02:40.520 --> 0:02:43.680 Harvey Schwartz was informed of this decision, and then it 0:02:43.720 --> 0:02:45.920 was up to Harvey to decide what his next move 0:02:46.040 --> 0:02:50.040 was going to be. Most people under those circumstances on 0:02:50.080 --> 0:02:52.520 Wall Street choose to leave the firm. There's not much 0:02:52.520 --> 0:02:54.560 point hanging around the hoop, right if you're not going 0:02:54.600 --> 0:02:59.040 to be the centerman. And uh, the problem here is 0:02:59.080 --> 0:03:02.079 that February when he first is what almost three weeks ago. 0:03:03.320 --> 0:03:06.480 Goldman could have done this more elegantly by doing it 0:03:06.520 --> 0:03:10.880 a little faster. In the end, someone presumably in the boardroom, 0:03:10.880 --> 0:03:13.680 although we may never know, decided to have a conversation 0:03:13.720 --> 0:03:16.440 with a Wall Street journal and speed things along. At 0:03:16.480 --> 0:03:21.040 the very least, that's what that conversation resulted in a 0:03:21.200 --> 0:03:25.920 pace that Goldman itself perhaps had not signed onto and 0:03:26.040 --> 0:03:29.720 was not entirely in control of. Eric shares A Goldman sacks. 0:03:29.720 --> 0:03:32.160 They're up about one and a half percent right now. 0:03:32.240 --> 0:03:34.960 Market seems pleased at least by this news, however, it 0:03:35.320 --> 0:03:38.160 has been disseminated. What can you tell us about Mr 0:03:38.240 --> 0:03:40.680 Solomon in terms of what the future of the bank 0:03:41.480 --> 0:03:44.640 or indeed the financial I should just say it's not 0:03:44.760 --> 0:03:47.520 just a bank, because while it has an investment bank, 0:03:47.560 --> 0:03:50.920 they also had now the online lending platform Marcus. They've 0:03:50.960 --> 0:03:56.080 invested in uh kind of online blockchain cryptocurrency Bitcoin. Those 0:03:56.120 --> 0:03:59.600 are those are still very very small parts of Sacks. Right. 0:03:59.640 --> 0:04:04.760 It's still principally an advisory firm, right that does principally 0:04:04.840 --> 0:04:06.800 M and A work, but also equity capital markets and 0:04:06.840 --> 0:04:10.160 debt capital markets, and it does sales and trading. What 0:04:10.200 --> 0:04:12.920 can I tell you about David Solomon? He is a 0:04:13.000 --> 0:04:16.240 leverage finance banker. That's how he started his career at Drexel. 0:04:16.400 --> 0:04:18.240 He went on to do it at bear Stearns. He 0:04:18.279 --> 0:04:21.599 came into Goldman Sacks as a partner, hired as a 0:04:21.600 --> 0:04:24.599 partner from the outside, very rare, and went on to 0:04:24.760 --> 0:04:28.360 build Goldman's debt capital markets business. The firm was almost 0:04:28.440 --> 0:04:31.320 nowhere in d c M until David Solomon showed up 0:04:31.360 --> 0:04:33.240 on the scene, and that's why he was hired. He 0:04:33.360 --> 0:04:36.520 did so so successfully that he became the president at 0:04:36.600 --> 0:04:39.360 least the head of investment banking at Goldman Sachs. He's 0:04:39.400 --> 0:04:42.200 not in that sense an m and a guy like 0:04:42.240 --> 0:04:46.640 Hank Paulson was. He's more of a financier. He belongs, 0:04:46.680 --> 0:04:51.240 if you will, more in the modern financial market, perhaps 0:04:51.600 --> 0:04:54.000 than the kind of M and a guy who grew 0:04:54.080 --> 0:04:57.640 up as Paulson did under Gus Levy and perhaps under 0:04:57.680 --> 0:05:00.880 Steve Friedman and Bob Ruben back in then, so what 0:05:00.920 --> 0:05:04.359 can we infer from the fact that Harvey Schwartz was 0:05:04.440 --> 0:05:06.599 kind of pushed aside? I mean, he was head of 0:05:06.600 --> 0:05:08.880 the trading death. We know we can do more than 0:05:08.920 --> 0:05:11.479 infer because the same person who told me about the 0:05:11.480 --> 0:05:14.680 February twenty one meeting also shared with me some of 0:05:14.720 --> 0:05:18.760 the reasons why David Solomon was chosen over Harvey Schwartz. 0:05:19.320 --> 0:05:22.880 He's a better client guy. Even though Harvey Schwartz was 0:05:22.960 --> 0:05:26.040 the CFO prior to becoming co president and spent tons 0:05:26.080 --> 0:05:29.640 of time to be with you might say that he 0:05:29.720 --> 0:05:32.599 gets He's Look, I've spent lots of time with David Solomon. 0:05:32.640 --> 0:05:34.960 When I say lots enough time with David Solomon to 0:05:35.040 --> 0:05:38.080 know what kind of a person he is. He is 0:05:38.200 --> 0:05:40.560 a fun guy to be with. He's gregarious, He is 0:05:40.560 --> 0:05:45.160 an infectious personality. He's good at making conversation. Harvey is 0:05:45.200 --> 0:05:47.920 a little more buttoned up and buttoned down, if you will. 0:05:48.920 --> 0:05:52.640 He isn't as emotive as David is. These are my 0:05:52.680 --> 0:05:59.320 own personal observations. Furthermore, David worked very hard to get 0:05:59.360 --> 0:06:02.520 in front of Master's Over that fifteen month period when 0:06:02.520 --> 0:06:05.880 he and Harvey were co presidents, he had some one 0:06:05.920 --> 0:06:09.520 on one meetings with major investors um They like the 0:06:09.560 --> 0:06:12.520 fact that he has been pushing for diversity at the 0:06:12.520 --> 0:06:15.479 firm and also spending a lot of time getting to 0:06:15.520 --> 0:06:19.040 know the younger cohort at Goldman Sacks, which of course 0:06:19.480 --> 0:06:23.599 is the firm's future, as it is at any firm. 0:06:23.640 --> 0:06:25.520 They like the fact that Goldman is at a point 0:06:25.560 --> 0:06:28.239 in its trajectory where it's going to have to start 0:06:28.480 --> 0:06:31.520 building again. If it wants to grow, Goldman is going 0:06:31.520 --> 0:06:33.640 to have to find new things to do. To go 0:06:33.680 --> 0:06:36.880 back to your point, him, Goldman is going to have 0:06:36.960 --> 0:06:40.279 to light a fire into this consumer finance platform Marcus 0:06:40.279 --> 0:06:42.360 that they have online. They're going to have to make 0:06:42.360 --> 0:06:44.160 a choice is to have big his business they want 0:06:44.160 --> 0:06:46.800 to build in crypto. They're going to have to rebuild 0:06:47.200 --> 0:06:50.599 to a degree to fixed income, currency and commodities business, 0:06:50.680 --> 0:06:53.920 not because it's broken, but it isn't performing as well 0:06:54.040 --> 0:06:57.240 on a relative basis as Morgan Stanley's, a JP Morgan's, 0:06:57.320 --> 0:07:00.600 or City Groups or even Bank of America's. These are 0:07:00.640 --> 0:07:01.960 some of the things that Goldman is going to have 0:07:02.080 --> 0:07:04.880 to do, and the board appears to have decided that 0:07:05.000 --> 0:07:07.480 David is a better guy to get that done than 0:07:07.560 --> 0:07:11.920 Harvey Schwartz or together, so David's the sole president in 0:07:12.000 --> 0:07:14.840 line to succeed Lloyd Blank find We still don't know 0:07:15.240 --> 0:07:18.520 when that's going to happen, and if we do, you're 0:07:18.600 --> 0:07:19.800 going to be the person I'll be here You're going 0:07:19.840 --> 0:07:22.480 to tell us. Thanks very much. Eric Shatzker, editor at 0:07:22.560 --> 0:07:26.080 large for Bloomberg News giving us all the details about 0:07:26.160 --> 0:07:43.200 Goldman sacks what we want to visit now with Stephen DISSANCTUS. 0:07:43.280 --> 0:07:46.119 He is managing director for small cap and mid cap 0:07:46.200 --> 0:07:49.320 stocks at Jeffreys. He's managing director there, and I want 0:07:49.320 --> 0:07:50.800 to thank you very much for being here in our 0:07:50.800 --> 0:07:54.440 eleven three oh studios God mornings, for being here. Go ahead, 0:07:54.520 --> 0:07:58.440 make the case for UH small and mid cap stocks, 0:07:58.480 --> 0:08:02.200 particularly in this kind of rate environment and in where 0:08:02.200 --> 0:08:04.320 we are in the business cycle. Great, So you know 0:08:04.360 --> 0:08:06.280 what I think? The first thing is that UM we 0:08:06.360 --> 0:08:10.320 actually got more positive on small cap stocks in UM 0:08:10.360 --> 0:08:12.520 in February after the big sell off. I think a 0:08:12.560 --> 0:08:16.320 lot of the run in January was big inflows into 0:08:16.600 --> 0:08:21.080 large cap ETFs into passive try to get exposure. So 0:08:21.240 --> 0:08:23.840 is that trade unwinds itself. I think that's gonna be 0:08:23.840 --> 0:08:28.440 beneficial for for small amid. And then relative valuations have 0:08:28.560 --> 0:08:32.280 really come in pretty dramatically. Really small cap stocks of 0:08:32.360 --> 0:08:36.079 underperformed since of course I had a big run in 0:08:36.080 --> 0:08:40.559 in sixteen, but relative to large caps, the valuations got better. 0:08:40.920 --> 0:08:43.520 Earnings growth in this kind of environment, when you're gonna 0:08:43.520 --> 0:08:47.200 get three percent GDP, you're gonna see better earnings growth 0:08:47.240 --> 0:08:50.079 down the market cap. And then the interesting thing on 0:08:50.080 --> 0:08:52.880 on the rate side, Yeah, higher rates will lead to 0:08:53.640 --> 0:08:56.280 lower overall returns. But if rates are going up for 0:08:56.320 --> 0:09:00.280 the right reasons, better economic growth, that's generally better for 0:09:00.640 --> 0:09:05.600 small MidCap companies. So how much do you expect, for example, 0:09:05.600 --> 0:09:08.200 the Russell two thousand to perform this year. So we've 0:09:08.200 --> 0:09:12.800 got a target of sixteen sixty four, so so about 0:09:12.800 --> 0:09:16.080 eight percent on the upside there. I think you've got 0:09:16.120 --> 0:09:18.920 a little more room to go since really we made 0:09:18.960 --> 0:09:22.040 our call small as outperform large by a little over 0:09:22.240 --> 0:09:25.000 two percent, and I could see that kind of continuing 0:09:25.000 --> 0:09:27.440 to widen. One of the things that we pointed out 0:09:27.480 --> 0:09:30.000 for this year was that, you know, last year was 0:09:30.080 --> 0:09:33.559 such a calm market that volatility is going to pick up, 0:09:33.600 --> 0:09:36.839 and so with that you get more opportunities to play 0:09:37.240 --> 0:09:42.400 small MidCap versus large cap style, more second rotation, A 0:09:42.440 --> 0:09:44.720 whole host of things are going to happen this year 0:09:45.160 --> 0:09:48.640 that probably didn't happen last year. Let's talk about some 0:09:48.760 --> 0:09:52.840 specific industry groups. In order to narrow down the areas, 0:09:52.920 --> 0:09:59.360 people should focus on discretionary technology industrials uh more, materials yea. 0:10:00.040 --> 0:10:02.560 So the so what we're looking at is trying to 0:10:02.720 --> 0:10:05.760 base it on our sort of themes. So one theme 0:10:05.760 --> 0:10:09.760 would be growth stocks over value stocks, just real general there. 0:10:10.120 --> 0:10:12.600 And the argument here is that growth is still a 0:10:12.640 --> 0:10:15.600 lot cheaper than value. And now everybody says tech has 0:10:15.640 --> 0:10:20.520 had great performance in seventeen, it's continuing eighteen. People tend 0:10:20.600 --> 0:10:23.720 to forget that in sixteen tech was a week performer, 0:10:24.200 --> 0:10:27.000 and so you're kind of getting back what you lost 0:10:27.040 --> 0:10:30.040 in sixteen and then the earrings growth has been really good, 0:10:30.320 --> 0:10:33.600 So we like tech to sort of represent our more 0:10:33.720 --> 0:10:38.719 growth oriented kind of biased. Materials and energy are two 0:10:38.800 --> 0:10:41.760 groups that we like as well. That kind of gives 0:10:41.880 --> 0:10:45.120 us a cyclical bias. So global growth gets better, you 0:10:45.160 --> 0:10:49.520 should see commodity prices rise, including oil that gives you 0:10:49.559 --> 0:10:53.000 the bad on energy to play higher interest rates. I 0:10:53.040 --> 0:10:55.920 think the way we would look at this would be financials, 0:10:55.920 --> 0:10:58.960 and the smaller banks generally do a lot better with 0:10:59.640 --> 0:11:03.000 rates going higher from a profitability standpoint. I think it 0:11:03.040 --> 0:11:08.280 comes also more down to deregulation. Deregulation where are o's 0:11:08.320 --> 0:11:11.120 have been suppressed? Now they can rise, and then maybe 0:11:11.160 --> 0:11:13.320 we get a little M and A. And then for 0:11:13.559 --> 0:11:17.600 consumative discretionary I just think the earnings numbers have gotten 0:11:17.720 --> 0:11:21.120 pretty low, and so the bar is is really low. 0:11:21.480 --> 0:11:24.440 So the companies are beating numbers by a pretty wide margin. 0:11:24.840 --> 0:11:28.240 We're starting as he sent them in turnaround, and quite frankly, 0:11:28.280 --> 0:11:31.400 it's the only area that's really a value. You kind 0:11:31.400 --> 0:11:34.040 of look through the universe is okay, what's cheap? You 0:11:34.120 --> 0:11:37.160 got to think about it from a relative perspective. Now, 0:11:37.200 --> 0:11:39.520 that's a group that actually looks good on an absolute 0:11:39.520 --> 0:11:42.120 basis as well. A lot of people say that a 0:11:42.200 --> 0:11:45.160 mid and small caps actually offer some protection from even 0:11:45.240 --> 0:11:50.400 trade skirmishes just because they depend less on international types 0:11:50.440 --> 0:11:52.559 of revenues. Is that one argument as well for you? 0:11:52.760 --> 0:11:55.880 I don't use that particular argument, so I'll go too things. 0:11:55.960 --> 0:11:59.800 One is that, well, the way we think about it 0:11:59.880 --> 0:12:03.240 is more from a positioning standpoint. I like companies that 0:12:03.320 --> 0:12:07.360 do have overseas exposure. However, I've not found a good 0:12:07.400 --> 0:12:12.000 relationship between the dollar and small MidCap performance. I mean, 0:12:12.320 --> 0:12:14.400 it's kind of an easy thing to kind of go to. 0:12:14.880 --> 0:12:16.959 I think again, people sort of forget that a lot 0:12:17.000 --> 0:12:20.600 of small cap companies and MidCap companies are suppliers to 0:12:20.640 --> 0:12:23.280 the large cap companies, So the large cap companies have 0:12:23.360 --> 0:12:26.040 problems there in the supply chain, there in the there 0:12:26.120 --> 0:12:28.839 in the hair, you know, the cross hairs. The other 0:12:28.880 --> 0:12:32.200 thing is a stronger dollar generally means that if the 0:12:32.240 --> 0:12:36.000 dollar starts to appreciate for whatever reason, you end up 0:12:36.040 --> 0:12:39.679 it's usually a risk off environment. Think about fifteen and sixteen, 0:12:40.120 --> 0:12:42.560 the dollar appreciated and small really took it on the 0:12:42.640 --> 0:12:45.080 chin in that period. So I think you kind of 0:12:45.120 --> 0:12:48.040 think about it from more of a position standpoint, kind 0:12:48.080 --> 0:12:51.880 of the positioning on on materials, a weaker dollar gives 0:12:51.880 --> 0:12:55.560 you better you know, backdrop for materials. A weaker dollar 0:12:55.679 --> 0:12:58.760 gives you potentially higher oil prices. That's kind of the 0:12:58.800 --> 0:13:01.080 way I think about it, so real quick. What keeps 0:13:01.080 --> 0:13:03.400 you up at night? What could undermine your thesis? You know, 0:13:03.559 --> 0:13:05.120 first of all, I think, you know, any kind of 0:13:05.160 --> 0:13:07.400 big pull back in the market small cap is just 0:13:07.480 --> 0:13:10.319 not gonna hold up, right if it's a risk off environment. 0:13:10.679 --> 0:13:13.440 When we get a VIX index of thirty nine, that 0:13:13.600 --> 0:13:16.360 is definitely something that you know, makes me a little 0:13:16.360 --> 0:13:17.960 bit worried. The other thing is that you know, we've 0:13:18.000 --> 0:13:22.440 got this pro growth biased and growth is outperformed for 0:13:22.920 --> 0:13:26.880 fourteen or fifteen months pretty consistently. Here, you do get 0:13:26.960 --> 0:13:30.280 those moments where you get a big reversal where all 0:13:30.320 --> 0:13:31.480 of a sudden you say, you know what, I don't 0:13:31.480 --> 0:13:34.760 want to own the fang stocks or miracle grow is 0:13:34.760 --> 0:13:37.839 something that our firm we talk about the miracle growth stocks. 0:13:37.880 --> 0:13:40.079 But if you get a reversal just because they've worked 0:13:40.080 --> 0:13:42.800 so well, and that kind of worries me because you 0:13:42.920 --> 0:13:45.480 see that, and then it kind of builds on itself. 0:13:46.320 --> 0:13:48.320 Thank you so much for being here. We'll have to 0:13:48.360 --> 0:13:51.160 have you back on to reassess in a in a 0:13:51.160 --> 0:13:54.840 little bit. Thank you again. Stephen Dissenttist, managing director and 0:13:55.040 --> 0:13:58.160 small and mid cap analyst at Jeffreys in New York, 0:13:58.200 --> 0:14:15.560 joining us here in our eleven three oh studios. What 0:14:15.800 --> 0:14:19.080 does the US want out of talks with North Korea 0:14:19.200 --> 0:14:23.440 leader Kim Jong un? And who is poised to potentially 0:14:23.560 --> 0:14:25.760 lose the most? Here to talk about those issues, as 0:14:25.880 --> 0:14:29.360 Errol Cohen, Senior Fellow at the Atlantic Council, also principle 0:14:29.480 --> 0:14:34.360 with International Market Analysis Limited, based in Washington. D c Ariel, 0:14:34.480 --> 0:14:37.000 thank you so much for being with us. I want 0:14:37.000 --> 0:14:39.880 to just start with what is the latest that we know? 0:14:40.400 --> 0:14:44.120 There were some reports about Kim Jong un wanting some 0:14:44.200 --> 0:14:49.480 sort of peace treaty. What what he desperately needs is 0:14:49.520 --> 0:14:53.440 a recognition of his regime. If you remember, during the 0:14:53.520 --> 0:14:57.360 Cold War, the US recognized East Germany and West Germany. 0:14:57.560 --> 0:15:00.480 We have an embassy in Soul, South Korea. We don't 0:15:00.520 --> 0:15:03.640 have an embassy in pyong Young. We don't recognize this 0:15:03.760 --> 0:15:07.360 murderous regime. And from our point of view, from the 0:15:07.360 --> 0:15:10.200 American point of view, the most important thing, of course 0:15:10.400 --> 0:15:13.400 is disarmament. But we made a mistake. The US made 0:15:13.400 --> 0:15:17.520 a mistake. The Obama administration made a terrible mistake when 0:15:17.560 --> 0:15:21.479 we did not demand and did not insist on dismantling 0:15:21.560 --> 0:15:27.240 the Iranian nuclear program. They can reboot and start enrichment. 0:15:27.480 --> 0:15:31.160 And we also did not insist on uh destroying and 0:15:31.200 --> 0:15:34.760 dismantling the missile program. We should learn from our mistakes. 0:15:35.160 --> 0:15:40.520 The Korean nuclear program should be dismantled, possibly with the 0:15:40.520 --> 0:15:44.200 exception of civilian nuclear reactors that do not enriach, and 0:15:44.520 --> 0:15:48.480 the missile arsenal should should be dismantled. Beyond that, if 0:15:48.480 --> 0:15:51.240 the administration comes to the conclusion that we need to 0:15:51.280 --> 0:15:55.080 recognize them and South Korea is cool with that, we 0:15:55.280 --> 0:15:58.560 can do that. There are presidents, as I mentioned is 0:15:58.640 --> 0:16:03.320 Germany is a president. Beyond that, I think they're reaching 0:16:03.320 --> 0:16:07.520 out not because they're doing well. Um. The labor that 0:16:07.640 --> 0:16:12.200 they were exporting, uh, slave labor essentially was kicked out 0:16:12.200 --> 0:16:14.120 of Europe and kicked out of the Middle East, two 0:16:14.200 --> 0:16:17.840 tens of thousands of people. Um. The fuel supply to 0:16:17.960 --> 0:16:23.400 North Korea is being squelched, including by China. Uh so, yeah, 0:16:23.440 --> 0:16:26.880 they're hurting. But in the past, they try to go 0:16:26.960 --> 0:16:30.400 to negotiations to see what kind of concessions they're going 0:16:30.480 --> 0:16:34.280 to get. And here here is a test of Mr Trump. 0:16:34.560 --> 0:16:38.920 Is he Mr Deal? Is he um the author of 0:16:39.120 --> 0:16:41.000 the art of the deal? And is he going to 0:16:41.040 --> 0:16:46.120 apply this to Kim Chong? Arriol Cohen. Would it be 0:16:46.320 --> 0:16:50.560 considered a positive development if the United States were to 0:16:50.760 --> 0:16:57.360 in some way a seed to Kim Chong's desire to 0:16:57.480 --> 0:17:00.920 be made to feel that he is not going to 0:17:01.040 --> 0:17:04.560 be threatened by outside forces in terms of his control 0:17:04.640 --> 0:17:07.000 of North Korea, and that we could live with a 0:17:07.080 --> 0:17:10.359 nuclear armed North Korea. Would that be an objective that 0:17:10.400 --> 0:17:16.240 would be regarded as positive. There's two elements to your question, 0:17:16.680 --> 0:17:21.960 uh pim I would say, Yes, it's okay for him 0:17:22.000 --> 0:17:25.240 not to feel threatened. No, it's not okay for him 0:17:25.440 --> 0:17:30.639 to have nuclear weapons. Full dismantlement of rockets, of rocket 0:17:30.680 --> 0:17:37.760 producing capacity, and of the uranium greade, the the high 0:17:37.840 --> 0:17:42.960 grade uranium enrichment or plutonium enrichment. Anything shorter than that, 0:17:43.680 --> 0:17:47.520 they can go back to threatening Arts and Japan and 0:17:47.600 --> 0:17:52.320 South Korea with nukes, and that is not acceptable, uh Ariel. 0:17:52.440 --> 0:17:55.560 We were speaking a lot last week about China's role 0:17:55.840 --> 0:18:00.560 in potential negotiations between the US and North Korea. They 0:18:00.600 --> 0:18:02.480 are hanging out in the background, and they really are 0:18:02.520 --> 0:18:06.520 the only ones that could really enforce some kind of 0:18:06.640 --> 0:18:09.760 permanent to Fagman. Without their involvement, this won't work. So 0:18:09.880 --> 0:18:13.159 where are they on this and what would be or 0:18:13.200 --> 0:18:16.200 could be their role in ongoing negotiations with the US 0:18:16.320 --> 0:18:21.360 North Korea. Anybody who dealt with China, with a Chinese bureaucracy, 0:18:22.200 --> 0:18:26.679 with Chinese government knows there are many many layers of 0:18:26.960 --> 0:18:34.320 meaning UH that UM China communicates. So to us, they're saying, yes, 0:18:34.520 --> 0:18:37.240 we do not want a war, we do not want 0:18:37.320 --> 0:18:42.600 threats UM. But at the same time, UH, strategically and 0:18:42.680 --> 0:18:46.600 geopolitical is they are using North Korea as a battering 0:18:46.680 --> 0:18:50.440 ram against Japan, as a threat against the United States. 0:18:50.520 --> 0:18:56.080 It's very convenient for Beijing to have a nasty Imagine 0:18:56.240 --> 0:18:58.399 a pitbull on the leash. The question is do they 0:18:58.480 --> 0:19:00.960 keep the pitball on the leash or not? And there 0:19:01.000 --> 0:19:07.720 were many reports UH that UM chairman c president for life. 0:19:07.720 --> 0:19:11.320 Now it looks like of China and the Young Kim 0:19:11.400 --> 0:19:14.720 did not have a good relationship to what extent it's true. 0:19:15.680 --> 0:19:19.320 I think this is many, many levels of security clearance 0:19:19.440 --> 0:19:23.640 above my access or your access. But it looks like 0:19:23.760 --> 0:19:28.200 China is not interested in distabilizing the Korean peninsula. It's 0:19:28.240 --> 0:19:32.320 not interested in reunification of Korea, it's not interested in 0:19:32.359 --> 0:19:37.040 the war, and they're just in the sort of balance 0:19:37.119 --> 0:19:41.240 of what I just described lies the national interests of China. So, yes, 0:19:41.640 --> 0:19:44.520 they're going to squil us North Korea. No, I don't 0:19:44.520 --> 0:19:48.240 think they're going to support us in our demand of 0:19:48.440 --> 0:19:54.240 full nuclear disarmament. Of any thoughts arel on the export 0:19:54.240 --> 0:19:58.080 of nuclear technology from North Korea? Would that be considered 0:19:58.359 --> 0:20:02.640 a positive development if that were to be curtailed. I'm 0:20:02.640 --> 0:20:06.720 glad you asked that question. North Korea exported nuclear technology 0:20:06.760 --> 0:20:09.960 to Iran. We know that, we're sure, and we know 0:20:10.160 --> 0:20:13.560 that they're built in two thousand and five six and 0:20:13.720 --> 0:20:18.800 nuclear reactor with the sole purpose of producing weapons great 0:20:18.920 --> 0:20:23.480 plutonium UH in Syria. That reaction was destroyed UH in 0:20:23.560 --> 0:20:27.120 Narrate by the Israeli Air Force. UH So they are 0:20:27.200 --> 0:20:30.520 a proliferator, they are a poor country, and they have 0:20:30.680 --> 0:20:35.000 nuclear technology other countries may want. So yes, absolutely, we 0:20:35.080 --> 0:20:40.480 need to insist that UH exports of nuclear technology would 0:20:40.520 --> 0:20:44.000 be a scenic one on an absolute condition for any 0:20:44.119 --> 0:20:46.480 kind of a deal. By the way, I'm not sure 0:20:46.680 --> 0:20:50.960 Trump is going to go to that meeting unless North 0:20:51.080 --> 0:20:55.880 Koreans agree to the list of demands more or less 0:20:55.960 --> 0:21:00.600 what I just described, nuclear disarmament, missile disarmament, uh an 0:21:00.600 --> 0:21:04.879 embargo on exports of nuclear technology. And I want to 0:21:04.880 --> 0:21:07.359 say one more thing, and I think it's very important 0:21:07.920 --> 0:21:11.760 if this works. Number one, it would be a tremendous 0:21:11.960 --> 0:21:14.920 uh foreign policy achievement for Trump if he manages to 0:21:15.320 --> 0:21:19.879 dismantle the North Korean nuclear arsenal. But secondly, it would 0:21:19.880 --> 0:21:23.760 be the model of what needs to happen Visavi Iran. 0:21:24.080 --> 0:21:27.119 In other words, nobody says we should not have any 0:21:27.160 --> 0:21:33.399 agreement with Iranians, but clearly the dismantlement of the potential 0:21:33.480 --> 0:21:38.160 that threatens all of our allies in the region Saudi Arabia, 0:21:38.200 --> 0:21:42.440 Gulf States, Israel and potentially Europe and in the far 0:21:42.560 --> 0:21:46.080 future the United States. That has to happen visa vi 0:21:46.160 --> 0:21:50.800 Iran and their nuclear enrichment capacity needs to be stopped. 0:21:51.080 --> 0:21:53.480 And if we can do it with North Korea, we 0:21:53.520 --> 0:21:55.440 can do it with the run. Thank you very much 0:21:55.480 --> 0:21:57.480 for being with us. Ario Cohen is a senior fell 0:21:57.520 --> 0:22:00.920 Off for the Atlantic Council, also a principle for international 0:22:01.080 --> 0:22:19.520 market analysis, based in Washington, d C. Well, the New 0:22:19.560 --> 0:22:23.080 York Antiquarian Book Fair has just concluded its four day 0:22:23.119 --> 0:22:26.080 stint at the Armory, and here to tell us more 0:22:26.119 --> 0:22:29.720 about the show and some of its rare offerings is 0:22:29.800 --> 0:22:34.840 Jonathan Hill, the founder and owner of Jonathan A. Hill Bookseller. Jonathan, 0:22:34.880 --> 0:22:37.520 thank you so much for coming in uh tell us 0:22:37.560 --> 0:22:39.560 a little bit about this year's book fair and some 0:22:39.640 --> 0:22:42.040 of the differences you noticed, not only just about the 0:22:42.119 --> 0:22:46.280 books and the offerings, but the attendees. Well, this year 0:22:46.640 --> 0:22:50.080 we hired a really good publicist at last, and we 0:22:50.119 --> 0:22:53.920 had three times the normal attendance we ever had before um, 0:22:53.960 --> 0:22:56.439 which was great. And what was particularly wonderful it was 0:22:56.520 --> 0:23:02.320 filled with young people, young people with blue hair, piercings, tattoos. 0:23:02.880 --> 0:23:05.200 So I would say that the printed book is alive. 0:23:05.240 --> 0:23:10.520 And well, I'm just trying to reconcile the concept of 0:23:11.040 --> 0:23:14.439 paying thousands of dollars, in some cases tens of thousands 0:23:14.480 --> 0:23:17.280 of dollars for books at a time when most people 0:23:17.280 --> 0:23:20.440 seem to say books are increasingly obsolete with the nook 0:23:20.520 --> 0:23:24.040 or kindle. I disagree. First of all electronic books are 0:23:24.160 --> 0:23:26.439 paying the neck to go through to get to the 0:23:26.480 --> 0:23:29.639 index to find where you were book. The printed book 0:23:29.920 --> 0:23:35.040 is so easy to to get around. Also, anyone as 0:23:35.040 --> 0:23:37.840 a youth learning to read and their first book that 0:23:37.880 --> 0:23:39.479 they fell in love with it took them to a 0:23:39.520 --> 0:23:43.199 different world or taught them something essential, they will always 0:23:43.200 --> 0:23:47.239 have a sentimental feeling about that book, that object, and 0:23:47.280 --> 0:23:50.920 that continues as they grow up. Now it's not just 0:23:51.119 --> 0:23:54.000 the sort of love of the specific book. When you 0:23:54.040 --> 0:23:57.479 talk about the object, it can be its value because 0:23:57.480 --> 0:23:59.840 it is rare, it is important, it has some his 0:24:00.000 --> 0:24:04.200 storical uh context speak if you can. Let's use an 0:24:04.200 --> 0:24:06.199 example of one book that I know that you have 0:24:06.800 --> 0:24:08.520 on offer, and I got a chance to see it 0:24:08.800 --> 0:24:11.200 and touch it and hold it in my hands yesterday. 0:24:11.400 --> 0:24:13.119 And this is a book from I believe it was 0:24:13.200 --> 0:24:17.800 fourteen fifty three. I know I was gonna get it 0:24:17.840 --> 0:24:21.320 backwards fifteen forty three b before Gutenberg, that was the case. 0:24:21.640 --> 0:24:25.080 And this has this is a book by Copernicus, and 0:24:25.280 --> 0:24:27.800 uh it tested my my high school Latin because I 0:24:27.800 --> 0:24:30.400 could actually read it. Tell us about this particular volume 0:24:30.720 --> 0:24:35.640 and why it's relevant and what it exemplifies about rare books. Well, 0:24:35.720 --> 0:24:39.760