WEBVTT - Apple's Canceled Car, Geopolitics in Focus 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.119 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:47.080 the Bloomberg Terminal and the Bloomberg Business app. There's that 0:00:47.200 --> 0:00:50.000 cross currents here, and I said, get you know, surveillance 0:00:50.040 --> 0:00:53.600 cross current reporter Alex Webb so joining us from London, 0:00:53.640 --> 0:00:57.120 ere and everything in tech and particularly on Apple, Alex Web, 0:00:57.600 --> 0:01:01.400 Alex Macworld just came out. But the two paragraph thing 0:01:01.440 --> 0:01:06.400 I don't understand, which basically says if Apple and their 0:01:06.440 --> 0:01:11.360 next road show upgrades the iPad, they're going to make 0:01:11.480 --> 0:01:15.280 old iPad that we're still using not compatible with the 0:01:15.319 --> 0:01:19.880 new iPad. For where you set is there shell Game 0:01:20.080 --> 0:01:24.520 planned ups Lescence where the phone that Lisa Matteo has 0:01:24.640 --> 0:01:28.080 in six months won't work because they got a new phone. 0:01:29.920 --> 0:01:33.800 Apple gets asked about this and they often sort of 0:01:35.120 --> 0:01:37.960 they deny that it's planned obsolescence, but they just sort 0:01:37.959 --> 0:01:40.040 of say, well, it's just the nature of things sometimes, 0:01:40.080 --> 0:01:43.720 you know, technology just has to move on, and we 0:01:43.760 --> 0:01:46.880 want to create the best possible handsets that we do, 0:01:46.920 --> 0:01:48.920 and therefore, in order to have the best hardware, have 0:01:48.920 --> 0:01:51.240 to create the best software. And it's just the sort 0:01:51.240 --> 0:01:53.720 of natural consequence of that. It's also that, you know, 0:01:54.080 --> 0:01:57.440 we do know that essentially the innovations with each new 0:01:57.480 --> 0:02:02.920 generation of device are little bit more iterative each time, 0:02:03.000 --> 0:02:09.480 you know, less of a quantity leap, and so the 0:02:09.560 --> 0:02:14.000 need to kind of like drive software upgrades and like 0:02:15.240 --> 0:02:19.280 chip upgrades essentially are what is driving the actual handstet upgrades. 0:02:19.360 --> 0:02:21.760 So even if Apple says they don't, a lot of 0:02:21.800 --> 0:02:23.440 people look at it and go, this kind of it 0:02:23.480 --> 0:02:24.480 is planned obso lessence. 0:02:24.800 --> 0:02:27.400 So Alex in terms of moving on, boy, they had 0:02:27.400 --> 0:02:29.919 a big announcement here just recently, moving on from the 0:02:29.960 --> 0:02:32.160 electric car business, automated car business. 0:02:32.200 --> 0:02:33.480 Can you tell us. 0:02:33.800 --> 0:02:36.720 What their business was, what they were trying to do, 0:02:37.080 --> 0:02:38.040 and why they walked away. 0:02:38.720 --> 0:02:41.519 So it's important to qualify not an announcement. Right, Apple 0:02:41.600 --> 0:02:45.760 has never quite the acknowledged what they were doing here. Right, 0:02:46.960 --> 0:02:49.080 this is all from sources. Mark Guman's done a brilliant 0:02:49.120 --> 0:02:51.320 job over there as a chronicling this. Like they started 0:02:51.320 --> 0:02:54.760 back in twenty fourteen developing a car, and it has 0:02:54.800 --> 0:02:58.840 been a very turbulent decade where they said, actually we're 0:02:58.880 --> 0:03:00.280 not going to make a car. Where they didn't say, 0:03:00.280 --> 0:03:02.280 but internally they decided we're not going to make a car, 0:03:02.280 --> 0:03:02.880 We're just going to. 0:03:02.800 --> 0:03:04.200 Make autonomous driving systems. 0:03:04.600 --> 0:03:07.280 Then when they saw sort of Tesla go stratospheric, they won't, 0:03:07.280 --> 0:03:09.919 actually we are going to make a car. Finally, it 0:03:10.040 --> 0:03:13.040 seems that they have, you know, put paid to those 0:03:13.080 --> 0:03:16.560 ambitions at the time. And the only the closest Tim 0:03:16.600 --> 0:03:18.600 Cook came to talking about it was in twenty six 0:03:18.720 --> 0:03:20.919 seventeen inter view of Emi Chang, our own Emily Chang, 0:03:20.919 --> 0:03:24.800 and he said, we think that autonomous driving systems are 0:03:24.840 --> 0:03:28.520 the biggest AI challenge. And if you look at where 0:03:28.520 --> 0:03:31.000 things have developed in the past year or so, yeah, there. 0:03:30.880 --> 0:03:32.240 Are two things that have happened. 0:03:32.280 --> 0:03:36.280 Firstly, the electric vehicle market has become less appealing, and secondly, 0:03:36.560 --> 0:03:40.640 the AI market has become massively appealing, and so all 0:03:40.680 --> 0:03:43.280 these people AI wants they have working on the car, 0:03:43.520 --> 0:03:45.600 they have this huge problem. They don't really have a 0:03:45.600 --> 0:03:48.280 big AI consumer facing product. So if you can move 0:03:48.320 --> 0:03:51.240 those to that, then it solves two issues for you. 0:03:51.680 --> 0:03:54.040 I fortunately you mentioned that the interview with Tim Cook 0:03:54.080 --> 0:03:56.720 with our own Bloomberg Television. 0:03:56.960 --> 0:03:58.320 Let's go to that right now, take a listen. 0:03:59.360 --> 0:04:01.800 We sort of see it as the mother of all 0:04:01.880 --> 0:04:06.440 AI projects. It's probably one of the most difficult AI 0:04:06.520 --> 0:04:10.800 projects actually to work on, and so autonomy is something 0:04:10.840 --> 0:04:17.159 that's incredibly exciting for us, and but we'll see where 0:04:17.160 --> 0:04:17.480 it takes. 0:04:17.520 --> 0:04:20.760 As that was Tim Cook from Apple speaking with Bloomberg's 0:04:20.760 --> 0:04:24.360 Emily Chang talking about the car here the automated car, 0:04:24.360 --> 0:04:25.320 here the electric car. 0:04:25.600 --> 0:04:28.159 So I mean, what does it tell you, Alex? 0:04:28.200 --> 0:04:31.520 I mean I kind of feel like they're just kind 0:04:31.520 --> 0:04:33.560 of going where the wind's blowing, and now the wind's 0:04:33.560 --> 0:04:36.600 blowing towards AI, so let's put our resources. There is 0:04:36.600 --> 0:04:37.880 there any concern about that? 0:04:40.960 --> 0:04:42.880 I mean there's a push and a pull effect here, right. 0:04:42.880 --> 0:04:44.720 I think with the with the car, they were essentially 0:04:44.760 --> 0:04:46.160 initially and I think he said it in that into 0:04:46.160 --> 0:04:48.880 as well, three pillars that had been kind of disrupting 0:04:48.880 --> 0:04:51.520 the car industry. There was ride hailing, there was autonomous vehicles, 0:04:51.520 --> 0:04:55.400 and there was electric vehicles, and essentially each one of 0:04:55.400 --> 0:04:58.320 those has gradually eroded. Right hailing it transpise is not 0:04:58.400 --> 0:05:01.279 a very good business, as Uberschelle orders will probably testified. 0:05:01.400 --> 0:05:03.360 Well not share holder people got out of the stock. 0:05:04.120 --> 0:05:07.440 You know, the autonomous driving piece is taking a lot 0:05:07.480 --> 0:05:09.839 longer than had been predicted in twenty fifteen, you know, 0:05:10.520 --> 0:05:14.320 optimistically at scale by maybe twenty thirty. And finally this 0:05:14.440 --> 0:05:17.760 EV piece, which has done pretty well for Tesla, of late, 0:05:18.160 --> 0:05:22.719 we've seen sales, the pace of sales growth massively decline 0:05:22.760 --> 0:05:26.039 and a recalibration from the OEMs on how to do 0:05:26.120 --> 0:05:28.240 it like you know, actually maybe we should be doing. 0:05:28.200 --> 0:05:29.880 More hybrid than pure electric. 0:05:29.960 --> 0:05:33.359 And that's what the big carm makers are pivoting towards now. 0:05:33.600 --> 0:05:36.200 At the same time, they have missed the boat right 0:05:36.279 --> 0:05:39.000 for now on AI. It's not too late, it's it's 0:05:39.000 --> 0:05:42.360 not irreparable. They can catch up, but they are not 0:05:42.440 --> 0:05:44.880 right anywhere compared to the likes of Google. So it 0:05:44.960 --> 0:05:46.640 is a pivot that is kind of necessary. 0:05:46.720 --> 0:05:48.880 It isn't this a bad price because I see the 0:05:48.960 --> 0:05:51.919 complete destruction of a used Tesla price. Some of that 0:05:52.080 --> 0:05:55.120 I guess based on elone must desire to move cars. 0:05:55.160 --> 0:05:58.599 I think I saw yesterday Jeep, which is the cheapest 0:05:58.600 --> 0:06:02.960 traditional engines. Right, sure they're cutting the price is well, 0:06:03.120 --> 0:06:05.040 did they do the math and just say that they 0:06:05.080 --> 0:06:08.480 can't develop the aesthetic the fit in the finish of 0:06:08.520 --> 0:06:12.240 Apple alex web for one hundred thousand a car or 0:06:12.320 --> 0:06:13.679 dare I say even higher? 0:06:14.680 --> 0:06:16.839 It's always been the big question of like where would 0:06:16.839 --> 0:06:20.160 an Apple car be positioned in the market, Right, Tessa's 0:06:20.200 --> 0:06:22.880 being came in as a sort of premium vehicle and 0:06:23.080 --> 0:06:25.440 gradually working down the value channel or you know, the 0:06:25.520 --> 0:06:29.160 kind of price chain to becoming more affordable. But as 0:06:29.200 --> 0:06:31.680 you say, they are having to discount massively and have 0:06:31.760 --> 0:06:34.000 been in the past year or so in order to 0:06:34.000 --> 0:06:36.320 fill the sort of two million vehicles of capacity that 0:06:36.360 --> 0:06:39.159 they've constructed over the past few years. If you compare that, 0:06:39.160 --> 0:06:41.719 if you think about you know, super premium car makers 0:06:41.760 --> 0:06:44.120 like Ferrari, which you know is valued at seventy one 0:06:44.120 --> 0:06:47.280 billion euros, it only does six billion euros of sale 0:06:47.279 --> 0:06:49.440 each year. Sales each year that is, like you know, 0:06:50.160 --> 0:06:52.160 practically is not quite a rounding error. But I think 0:06:52.200 --> 0:06:54.200 Apple does three hundred billion, so if you're adding six 0:06:54.200 --> 0:06:57.040 billion of sales, it is not even worth writing home about. 0:06:57.240 --> 0:06:59.039 So it's the market big enough for it to be 0:06:59.120 --> 0:07:02.479 worth Apple's time exactly, big question, particularly if they see 0:07:02.480 --> 0:07:03.880 themselves as a premium brand. 0:07:03.920 --> 0:07:05.720 Paul. I think this is the heart of the matter. 0:07:05.800 --> 0:07:07.640 And Mark German is going to tell me, or Alex 0:07:07.640 --> 0:07:10.680 Web with their industry leading reporting, is going to tell me. 0:07:10.760 --> 0:07:13.800 But I get it's all this techno babble and you know, 0:07:13.960 --> 0:07:16.320 Apple car play and all that. Thank you for being 0:07:16.360 --> 0:07:17.680 an Apple car player, Paul. 0:07:17.720 --> 0:07:20.000 This is just about price, a lot of it. 0:07:20.080 --> 0:07:22.840 You're going to get it out of the Apples showroom. 0:07:23.040 --> 0:07:25.440 And the answer is the math doesn't. 0:07:25.160 --> 0:07:27.920 Work, no, I mean, and it doesn't work for Detroit. 0:07:28.000 --> 0:07:29.560 Is kind of what we're hearing in particularly when you 0:07:29.560 --> 0:07:32.120 have a price leader like Elon Musk tends to be 0:07:32.120 --> 0:07:33.880 a little bit I mean, unpredictable. 0:07:33.960 --> 0:07:37.240 So Alex you know, had. 0:07:37.160 --> 0:07:38.840 One thing on that. Sure it's at this point as well. 0:07:38.880 --> 0:07:41.720 It's like a lot of the commentary suggests Apple is 0:07:41.720 --> 0:07:44.720 going to struggle in the first year to sell meaningful 0:07:44.800 --> 0:07:47.080 numbers of the headsets, which are three and a half 0:07:47.080 --> 0:07:49.600 thousand dollars. Right, So if you're covering a vehicle that 0:07:49.680 --> 0:07:53.400 is one hundred thousand dollars, the lord of small numbers 0:07:53.400 --> 0:07:54.640 with big number. 0:07:54.760 --> 0:07:57.560 Give us, give us an update here, Alex. For what 0:07:57.720 --> 0:08:02.640 one month into this idiocy a success or failure? They headset. 0:08:03.520 --> 0:08:05.240 But I mean, the thing I'm saying, be saying from 0:08:05.280 --> 0:08:06.760 day one is it doesn't need to be a success 0:08:06.800 --> 0:08:09.120 as long as whatever Facebook does is not a success. 0:08:09.240 --> 0:08:10.160 Right, this is the. 0:08:10.080 --> 0:08:12.240 First generation they're gonna come to. They're going to make 0:08:12.320 --> 0:08:13.040 cheaper versions. 0:08:13.120 --> 0:08:13.280 You know. 0:08:13.320 --> 0:08:15.560 This is about proving out the technology, getting in the 0:08:15.600 --> 0:08:18.360 hands of developers so that then they build products for 0:08:18.440 --> 0:08:21.560 the platform. So it's too early to say Apple's push 0:08:21.560 --> 0:08:23.840 into this space as a success or a failure. The 0:08:23.920 --> 0:08:26.240 key thing is, as long as this market does not 0:08:26.400 --> 0:08:30.880 take off when someone else owns it, Apple doesn't need 0:08:30.920 --> 0:08:33.079 it to be a huge success, Alex. 0:08:33.120 --> 0:08:35.000 A lot of the Apple bulls are telling me, don't 0:08:35.040 --> 0:08:38.400 worry about AI apples. You know, they're not first to 0:08:38.440 --> 0:08:40.360 the to the game, but they come in when it's 0:08:40.400 --> 0:08:41.760 an opportune time to come in. 0:08:41.840 --> 0:08:44.160 Even with phone telephones. 0:08:43.679 --> 0:08:45.600 Back in the day cell phones, they weren't the first 0:08:46.000 --> 0:08:48.640 Is that a valid argument for AI or is there 0:08:48.720 --> 0:08:52.480 a material risk that they're late, maybe too late? 0:08:54.000 --> 0:08:56.400 No, I think there's there's certainly personance to that. We're 0:08:56.480 --> 0:08:59.440 very early in this sort of AI revolutional I'm increasing 0:08:59.440 --> 0:09:03.680 think of it's more a heat solution. They have not 0:09:03.880 --> 0:09:08.400 completely completely missed out on this, but they do still 0:09:08.440 --> 0:09:10.920 need to get moving right. They still do still need 0:09:10.960 --> 0:09:14.760 to get at to that table. Of course, the advantage 0:09:14.800 --> 0:09:17.000 they have is you can still access a lot of 0:09:17.000 --> 0:09:20.640 the AI products through there through their platform. Right, Chat 0:09:20.679 --> 0:09:24.320 GPT is an app Open Open AI hasn't a chat 0:09:24.360 --> 0:09:26.640 GPT app that I have on my iPhone, So like 0:09:26.760 --> 0:09:29.600 on that basis, it's kind of okay, we're not yet 0:09:29.600 --> 0:09:30.560 seeing and. 0:09:30.440 --> 0:09:32.000 It will struggle to see. 0:09:32.160 --> 0:09:34.320 I personally struggle to see how it will work that 0:09:34.360 --> 0:09:37.720 you will have fully AI voice assistance like Google Assistant 0:09:37.760 --> 0:09:38.320 or Alexa. 0:09:38.800 --> 0:09:40.880 We're not seeing those come out just yet. 0:09:41.000 --> 0:09:42.760 Like, I think they've got a little bit of time 0:09:42.840 --> 0:09:45.880 until the costs come down and the processing power for 0:09:45.960 --> 0:09:47.360 that to be a real threat to else. 0:09:47.640 --> 0:09:54.960 Thank you so much in London. This is the most 0:09:54.960 --> 0:09:59.080 important conversation of the day, Bob Michael's with us and 0:09:59.120 --> 0:10:01.280 then pause. You mentioned when we were chatting before at 0:10:01.320 --> 0:10:04.640 Banker's Trust, which is iconic years ago and all sorts 0:10:04.679 --> 0:10:06.680 of work in the United Kingdom and now holding court 0:10:06.720 --> 0:10:08.800 for mister Diamond. He has to brief James Diamond on 0:10:09.200 --> 0:10:11.720 what yields are going to do. Imagine that. But I 0:10:11.800 --> 0:10:14.640 want to talk about you look great today, by the way, 0:10:14.679 --> 0:10:17.319 and YouTube can you see this? I mean Michael with 0:10:17.400 --> 0:10:21.880 a bow tie. Thank you, Solid sartorial Solid. I told 0:10:21.920 --> 0:10:24.240 you you and others made a guest the other day 0:10:24.280 --> 0:10:27.360 and Paul noted that he had Near East Anthropology as 0:10:27.360 --> 0:10:32.439 his parchment. BA. Right now, liberal arts and particularly the classics, 0:10:32.520 --> 0:10:39.000 are getting killed across American universities. Your pen it's truly 0:10:39.160 --> 0:10:45.200 definitive under classical studies. Defend right now the value you 0:10:45.360 --> 0:10:49.320 got out of a classical studies education to get you 0:10:49.400 --> 0:10:51.360 to worry about duration and convexity. 0:10:52.400 --> 0:10:55.280 So there are many other things you study at university. 0:10:55.320 --> 0:10:58.400 And I did a lot of sciences, which ultimately helped 0:10:58.400 --> 0:11:02.440 me with bondmath. But I always thought of classics as 0:11:02.520 --> 0:11:05.959 my avocation while I was studying other things that I 0:11:06.040 --> 0:11:08.720 knew would lead to a vocation. And I think if 0:11:08.720 --> 0:11:11.240 you get that balance, it makes for a far better 0:11:11.360 --> 0:11:12.400 university life. 0:11:12.559 --> 0:11:15.680 I totally agree. I'm the strongest point since did you 0:11:15.760 --> 0:11:19.079 study Latin and Greek? Are you like former Prime Minister Johnson? 0:11:19.120 --> 0:11:22.720 Where you can waltz right now into Latin or Arma? 0:11:22.840 --> 0:11:26.079 We're room quake kind of Troy. I quy primus aboris? 0:11:27.160 --> 0:11:30.640 Can we can we get that tape? Robert Broughton? 0:11:30.720 --> 0:11:32.120 Can you be sure that we get you? 0:11:36.040 --> 0:11:36.319 Please? 0:11:36.520 --> 0:11:40.640 Few few tea pot Thrisimachus. There you go, you learn it, 0:11:40.679 --> 0:11:41.600 you never forget it. 0:11:42.520 --> 0:11:44.880 That's great, Paul, can you save the damn interview? 0:11:45.080 --> 0:11:48.040 I can save it because he also got a CFA 0:11:48.480 --> 0:11:50.679 that got some to where he is. Hey, so we're 0:11:50.720 --> 0:11:52.480 in good shape. So Bob, what do we do here? 0:11:52.480 --> 0:11:54.680 I mean, we're going to get a big inflation print tomorrow. 0:11:55.040 --> 0:11:56.440 A lot of folks are trying to figure out what 0:11:56.440 --> 0:11:57.479 this Federal Reserve. 0:11:57.280 --> 0:11:57.800 Is going to do. 0:11:57.880 --> 0:12:01.360 It seems like, you know, march off the table. May 0:12:01.559 --> 0:12:03.800 not sure, maybe push it back to June four A 0:12:03.880 --> 0:12:04.400 rate cut? 0:12:04.440 --> 0:12:06.160 How are you guys? A Morgan stantly thinking about this? 0:12:06.880 --> 0:12:12.160 Honestly, Paul, I just want to enjoy the soft landing. Okay, 0:12:12.440 --> 0:12:15.360 we're in the midst of it now. We've got very 0:12:15.400 --> 0:12:18.920 low unemployment. We've got stable inflation. We look at the 0:12:19.080 --> 0:12:22.920 six month annualized rate of core PC. It's currently one 0:12:22.960 --> 0:12:26.520 point nine percent. Tomorrow will likely get a point four it. 0:12:26.520 --> 0:12:30.079 We'll push it up to two point four. It's okay. 0:12:30.120 --> 0:12:33.480 It's in touching distance of two percent. You go back 0:12:33.520 --> 0:12:36.480 a few years it was six point six percent. So 0:12:37.000 --> 0:12:39.800 I think the Fed is right to just pause here. 0:12:40.200 --> 0:12:42.800 I think if they look at inflation on a shorter 0:12:42.920 --> 0:12:46.040 term basis, they have to be real happy with it. 0:12:46.480 --> 0:12:50.400 But they were late to hiking rates thinking inflation would 0:12:50.520 --> 0:12:54.320 be transitory. They can't make that mistake again. So June 0:12:54.360 --> 0:12:57.800 still looks like ours and everyone else's central case. 0:12:57.880 --> 0:13:00.000 All right, I said Morgan Stain. Of course, JP Moore. 0:13:00.360 --> 0:13:03.240 It's all Morgan's you know, at some point at in time, back. 0:13:03.080 --> 0:13:06.160 When it probably back in the day when it was so. 0:13:06.320 --> 0:13:08.800 I mean, you think about this market I'm looking at 0:13:08.840 --> 0:13:11.079 I end. Go on the Bloomberg terminal, that's the Bloomberg 0:13:11.160 --> 0:13:13.760 index browser, and you get all the fixed income indexes, 0:13:13.960 --> 0:13:17.120 most of which Bloomberg owns we're in the red this 0:13:17.200 --> 0:13:20.440 year twenty twenty two. Is this brutal for the fixed 0:13:20.440 --> 0:13:22.480 income market? A little bit of performance last year thanks 0:13:22.480 --> 0:13:25.400 to November and December. Now, where do I go into 0:13:25.400 --> 0:13:27.240 fixed incomes ses? What are you walking around a trading floor? 0:13:27.280 --> 0:13:28.480 What are your traders doing? 0:13:28.679 --> 0:13:31.920 So there are a couple things. And I was out 0:13:31.960 --> 0:13:35.680 at a dinner last night with about fifty financial advisors 0:13:35.679 --> 0:13:40.079 and we were talking about this. And my greatest concern 0:13:40.880 --> 0:13:44.720 is not that the market rallies to one percent. I 0:13:44.720 --> 0:13:47.960 don't really want that. I'd rather have the market back 0:13:48.040 --> 0:13:51.960 up to about five percent to give more investors an 0:13:52.000 --> 0:13:55.160 opportunity to get into the market. And I think you 0:13:55.280 --> 0:13:57.640 when you well, you look at the amount of money 0:13:57.679 --> 0:13:59.920 and money market funds, it's five and a half percent. 0:14:00.760 --> 0:14:03.520 People want to get in. They want a slightly higher yield. 0:14:03.640 --> 0:14:07.280 You look at pension funds, they they want a slightly 0:14:07.400 --> 0:14:11.319 higher yield. I look at the aggregate bond indecks. At 0:14:11.320 --> 0:14:14.960 the end of December thirty one, twenty twenty two, it 0:14:15.120 --> 0:14:18.880 was four point sixty seven percent, yield four point seven percent, 0:14:19.440 --> 0:14:22.520 and we were looking at four additional rate hikes at 0:14:22.520 --> 0:14:26.320 the start of twenty twenty three. This morning five point 0:14:26.400 --> 0:14:30.160 zero percent, So you're up about thirty basis points and 0:14:30.200 --> 0:14:32.200 we're looking at three to five rate cuts. 0:14:32.200 --> 0:14:33.760 This year and Michael Ferral is going to tell you 0:14:33.840 --> 0:14:36.440 we're a long way from potential GDP and for whatever reason, 0:14:36.520 --> 0:14:40.120 let's say the stimulus whatever. But I'm just imagining. I mean, 0:14:40.160 --> 0:14:42.840 I mean the new Park Avenue offices is JP Mortin 0:14:42.880 --> 0:14:45.920 boy Jamie will have a lunch up in the girders, 0:14:46.000 --> 0:14:48.200 like it's like you know one of those photos black. 0:14:47.960 --> 0:14:50.400 Away from inside that goes Bob, come on up with 0:14:50.400 --> 0:14:51.000 me and sit on. 0:14:50.960 --> 0:14:52.880 A come in broadcast from there. 0:14:53.240 --> 0:14:55.320 We'd like to do it, seriously, I'd like to do that. 0:14:55.480 --> 0:14:58.240 You line up, you and mister Diamond, and the number 0:14:58.280 --> 0:15:01.000 one question mister Diamond's going to have for yours team 0:15:01.680 --> 0:15:05.080 is all this cash that's out there, How does Bob 0:15:05.120 --> 0:15:09.360 Michaels think the deployment of trillions of dollars of cash 0:15:09.440 --> 0:15:11.240 at the margin will occur? 0:15:11.920 --> 0:15:14.440 Well, I think it's going to go into a lot 0:15:14.440 --> 0:15:16.560 of different places. First, I think a lot of it 0:15:16.600 --> 0:15:20.800 will stay where it is because you get a yield 0:15:21.000 --> 0:15:24.400 on cash which you didn't get before. And you know 0:15:24.720 --> 0:15:27.040 the Fed cuts rates a few hundred bag let's say 0:15:27.080 --> 0:15:29.160 they take it down to three percent, you're still going 0:15:29.240 --> 0:15:31.480 to get a yield on kash about three percent I 0:15:31.520 --> 0:15:33.480 think a lot of it's coming into the bond market. 0:15:33.600 --> 0:15:36.720 Everyone is waiting for the Fed cut rates. That makes 0:15:36.760 --> 0:15:39.080 cash less attractive. That's where a lot of it goes. 0:15:39.160 --> 0:15:41.680 Because we're doing almost no FED talk because we're talking 0:15:41.720 --> 0:15:44.240 in vidio. Bob Michael doesn't know what in vidio is. 0:15:44.960 --> 0:15:46.440 Let's listen to Chairman Powell. 0:15:46.440 --> 0:15:50.360 Here, we're room quay kind of troy I que primus aboris. 0:15:50.680 --> 0:15:52.680 Well, there we go. Bob didn't have his headphones on. 0:15:52.800 --> 0:15:56.200 We just played Jerome Powell saying some Latin there. 0:15:56.520 --> 0:15:58.760 Okay, it was almost brief done as well. 0:15:59.040 --> 0:16:01.800 Did the press conference? Doesn't make any sense sense to you? 0:16:02.080 --> 0:16:04.040 Or is Jerome Powell speaking Latin? 0:16:05.360 --> 0:16:10.280 I think they're going in the current. So you go 0:16:10.440 --> 0:16:13.760 back to December and the infamous pivot with the ten 0:16:13.880 --> 0:16:17.480 year at about four point two zero percent, it looked 0:16:17.600 --> 0:16:20.720 like inflation was coming down very rapidly, and that was 0:16:20.840 --> 0:16:24.720 room for them to start bringing down rates. I think 0:16:24.880 --> 0:16:29.280 at the recent and upcoming press conferences, inflation is going 0:16:29.360 --> 0:16:31.960 to be a little bit north of two percent, So 0:16:32.200 --> 0:16:35.600 you're going to hear them try and dampen the expectation 0:16:35.760 --> 0:16:37.960 that the FED might step in and march your main. 0:16:37.880 --> 0:16:41.800 Fixed income currencies, commodities, the thick group. That's kind of 0:16:41.800 --> 0:16:44.880 where you are. Let's talk about commodities. Is there a 0:16:44.880 --> 0:16:46.040 commodities play out there? 0:16:46.080 --> 0:16:46.560 What are we doing? 0:16:46.600 --> 0:16:47.840 Is a lot of people tell me to just buy 0:16:47.880 --> 0:16:51.040 gold and sell everything else on the commodity space or bitcoin? 0:16:51.320 --> 0:16:53.840 Yes, I like that. I think it comes into the 0:16:53.880 --> 0:16:56.920 greater fit protectorate. Yah. I don't know exactly what it 0:16:56.960 --> 0:16:58.560 is there. 0:16:58.600 --> 0:17:01.440 And JP Morgan, I'm not sure you're bosses brought onto 0:17:01.440 --> 0:17:02.200 this bitcoin thing. 0:17:02.520 --> 0:17:06.560 Yeah. I think the whole issue with the commodity complex 0:17:07.000 --> 0:17:09.680 is there was a lot of expectation a year ago 0:17:09.760 --> 0:17:14.080 about China reopening, and it reopened, but not with the 0:17:14.119 --> 0:17:18.200 momentum that everyone thought. So suddenly things look a little 0:17:18.240 --> 0:17:21.240 bit overpriced. You're starting to see that even with energy. 0:17:21.520 --> 0:17:24.399 You look at what's happened in the Middle East, and 0:17:24.920 --> 0:17:27.959 you would have thought energy oil would be north of 0:17:28.000 --> 0:17:30.920 one hundred and it's not. So. I think it's also 0:17:31.040 --> 0:17:35.320 telling us that the broader global economy is also ratcheting 0:17:35.359 --> 0:17:37.919 down from where it was. These are all good things 0:17:37.920 --> 0:17:38.919 for central banks. 0:17:39.119 --> 0:17:41.080 A couple of days ago, we had a firestorm. This 0:17:41.119 --> 0:17:43.560 is for global Wall Street, for the CFA, Institute. Good 0:17:43.560 --> 0:17:46.560 morning Mary down in Charlottesville. And with this is Bob 0:17:46.600 --> 0:17:49.600 Michael of JP Morgan. He and I have darkened the 0:17:49.640 --> 0:17:53.720 door of the chartered Financial Analyst program. We both survived. 0:17:54.440 --> 0:17:57.040 Daniel Perlis was on, Who's got a wonderful book out 0:17:57.040 --> 0:18:00.680 which basically says, eminem theory doesn't work. Is not Candy, 0:18:01.000 --> 0:18:06.040 It's not Hershey's. It is Miller and Medigliani, Medigliana and Miller, 0:18:06.640 --> 0:18:08.760 and it was a theory that came up years ago. 0:18:09.520 --> 0:18:13.920 I want you to tell me about fancy cfa math 0:18:14.200 --> 0:18:19.160 in the bond market and in market capitalization against super 0:18:19.200 --> 0:18:23.720 big tech firms that have three percent debt your world. 0:18:24.320 --> 0:18:28.879 I'm just baffled by how they have so little debt, 0:18:29.520 --> 0:18:31.720 in the veracity of what you and I were. Wean 0:18:31.880 --> 0:18:34.840 done with Merton, Miller and Medigliani. 0:18:35.240 --> 0:18:39.600 Well, we've been through this before, because there were other 0:18:39.720 --> 0:18:43.560 companies in other industries that generated a tremendous amount of 0:18:43.560 --> 0:18:46.439 free cash flow, and the bond market would have liked 0:18:46.520 --> 0:18:49.800 to have welcomed them with open arms and parked their 0:18:49.840 --> 0:18:52.240 debt for a long period of time, and they just 0:18:52.320 --> 0:18:55.159 did in issue a lot. I think of Walmart going 0:18:55.240 --> 0:18:58.600 back thirty years there were times when people refer to 0:18:58.680 --> 0:19:03.840 Bristol Meyer's debt as a museum piece because they didn't 0:19:03.840 --> 0:19:07.080 issue enough. And you know, this is just where we 0:19:07.119 --> 0:19:10.439 are in the US economy, where the tech industry is 0:19:10.480 --> 0:19:14.280 the one which is seeing a lot of top line growth, 0:19:14.320 --> 0:19:16.920 a lot of revenue, a lot of free cash flow, 0:19:17.280 --> 0:19:20.800 and that's able to sustain their R and D budgets 0:19:20.920 --> 0:19:22.560 and allow them to do other things. 0:19:22.640 --> 0:19:25.720 What is the efficacy of a big tech company moving 0:19:25.760 --> 0:19:29.520 from three percent to a responsible level of debt. I 0:19:29.520 --> 0:19:33.760 don't know, Paul, eight nine, ten, whatever. What is there 0:19:33.800 --> 0:19:34.800 a social good to that? 0:19:37.400 --> 0:19:41.600 There's there's a shareholder good to that, because if they're 0:19:41.640 --> 0:19:44.760 able to borrow, let's say, in the current market environment, 0:19:45.160 --> 0:19:49.880 borrow tenure at around five percent and use those proceeds 0:19:49.920 --> 0:19:52.760 to buy back shares of stock, you would assume the 0:19:52.840 --> 0:19:55.520 return on equity would be much higher than the five 0:19:55.560 --> 0:19:59.120 percent that they're borrowing at. And I think you see 0:19:59.160 --> 0:20:02.240 some of that going on. But you're looking at at 0:20:02.359 --> 0:20:06.560 just one industry right now that has everything going for it, 0:20:06.960 --> 0:20:10.520 and rightly so that's the key to efficiency and productivity 0:20:10.560 --> 0:20:11.119 going forward. 0:20:11.160 --> 0:20:13.120 Hey, Bob, if I want to take some credit risk here, 0:20:14.200 --> 0:20:17.600 what do you recommend stay in that investment grade space 0:20:17.800 --> 0:20:19.119 or do I even go out in some of the 0:20:19.640 --> 0:20:23.000 high yield because high yield is where the performance has been. 0:20:23.240 --> 0:20:25.000 Like last year, I was surprised how yield performed as 0:20:25.040 --> 0:20:26.880 well as it did, because everybody was telling me about 0:20:26.880 --> 0:20:28.880 a recession, but hi yield really performed. 0:20:29.200 --> 0:20:34.640 Yeah, and that it's the great question because the difference 0:20:34.680 --> 0:20:38.159 between owning just investment grade or both investment grade and 0:20:38.200 --> 0:20:41.320 below investment grade comes down to your call on recession 0:20:41.440 --> 0:20:44.080 or not. And I would say this time last year, 0:20:44.359 --> 0:20:46.480 for sure, it looked like we were head into recession. 0:20:46.720 --> 0:20:50.080 Maybe we did. Maybe the regional banking crisis was a 0:20:50.119 --> 0:20:53.679 recession and the policy response solved it in a couple 0:20:53.680 --> 0:20:56.320 of weeks. I don't know, But at the start of 0:20:56.320 --> 0:20:58.840 this year, there's nothing out there that tells us we're 0:20:58.880 --> 0:21:02.560 heading into recession. We like credit. We're using every opportunity 0:21:02.560 --> 0:21:05.080 to buy it, that includes high yield. I know you 0:21:05.119 --> 0:21:08.400 had a conversation earlier about the private credit market. We 0:21:08.400 --> 0:21:12.359 look at the private credit market as having absorbed a 0:21:12.359 --> 0:21:15.000 lot of the marginal borrowers that would have come in 0:21:15.040 --> 0:21:19.040 the public high yield market previous cycle. So it's there 0:21:19.080 --> 0:21:21.919 and I think the way we look at private credit 0:21:22.359 --> 0:21:26.800 is it's effectively re ensuring the public credit markets. So 0:21:26.960 --> 0:21:31.040 we look at US public high yield. First of all, 0:21:31.080 --> 0:21:34.520 six percent of it defaulted away in twenty twenty, so 0:21:34.680 --> 0:21:38.080 you had survivor bias with the remaining ninety four percent. 0:21:38.560 --> 0:21:42.719 You look at corporate fundamentals, they look very strong. You 0:21:42.760 --> 0:21:45.880 look at the issuance that would have been marginal. That's 0:21:45.920 --> 0:21:48.320 in the private credit market. We have to accept that 0:21:48.440 --> 0:21:53.560 private credit is a new and very powerful source of 0:21:53.720 --> 0:21:56.480 non bank lending that didn't exist. 0:21:56.160 --> 0:21:58.000 In case of guys get exposure to that. Do you 0:21:58.240 --> 0:21:59.199 I mean, what do you guys do? 0:22:00.240 --> 0:22:02.720 Not putting it in public funds. But I will tell 0:22:02.760 --> 0:22:07.760 you our clients, whether it's retail or institutional, they're going 0:22:07.800 --> 0:22:10.960 in full speed ahead. And I know there's a lot 0:22:11.000 --> 0:22:13.520 of controversy on mark to market, but it really is 0:22:13.560 --> 0:22:17.000 the equivalent of a bank making a loan, and you know, 0:22:17.119 --> 0:22:20.760 you roll eighteen months forward. Some of the legacy loans 0:22:20.760 --> 0:22:24.440 look a look bit stale with current pricing. They'll reset 0:22:24.760 --> 0:22:27.000 and then you're going to have some credit issues and 0:22:27.080 --> 0:22:29.320 until you work them out, you're going to carry them 0:22:29.720 --> 0:22:32.200 as money good unless they're your timeline. 0:22:32.240 --> 0:22:35.240 Do you and your team have in your head for 0:22:35.359 --> 0:22:38.600 that workout of private credity and the fiction of what 0:22:38.720 --> 0:22:40.239 they're the pricing is, is it? Oh? 0:22:40.320 --> 0:22:43.720 I think I think a lot of it's going on now. 0:22:43.800 --> 0:22:46.920 I think that there was a lot of marginal borrowing 0:22:47.000 --> 0:22:50.320 over the last couple of years. I think the beauty 0:22:50.359 --> 0:22:52.560 of private credit is there's a lot of dry power. 0:22:52.560 --> 0:22:55.639 It steps in, it applies a haircut and does a 0:22:55.680 --> 0:23:00.440 lot of restructuring. But let's not forget private credit. Financial 0:23:00.480 --> 0:23:03.760 crisis two thousand and seven was about zero. I'm sure 0:23:03.760 --> 0:23:06.520 there was some out there, but it didn't exist. And 0:23:06.600 --> 0:23:11.000 now you're talking estimates are one point six trillion, which 0:23:11.040 --> 0:23:14.440 is an equal in size to the public highyield markets. 0:23:14.840 --> 0:23:18.400 And whether you quipple or not, about how it's being 0:23:18.440 --> 0:23:23.480 deployed and how it's being marked that and some of 0:23:23.520 --> 0:23:25.920 its dry power. A lot of that has gone into 0:23:25.960 --> 0:23:29.800 the economy. It's gone to places which have hired workers 0:23:30.160 --> 0:23:33.840 and created a level of economic activity. And that's probably 0:23:33.880 --> 0:23:37.640 another reason that we managed to skate through last year 0:23:37.720 --> 0:23:39.400 with pretty good economics. 0:23:39.520 --> 0:23:42.520 James Diamond in the news today looking at Texas and 0:23:42.600 --> 0:23:45.280 j have you been to the JP Morgan offices in Texas. 0:23:45.480 --> 0:23:49.000 I was just in Texas a couple weeks ago. It's 0:23:49.000 --> 0:23:50.080 been a big conference. 0:23:50.160 --> 0:23:52.880 What's a pixie does to the Texas economy that mister 0:23:52.960 --> 0:23:54.560 Diamond is talking about today. 0:23:56.080 --> 0:23:58.480 I wouldn't even want to hazard a guess. 0:24:00.040 --> 0:24:03.640 There're seeing a lot of conversation ended ugly, but. 0:24:03.640 --> 0:24:04.920 I mean it's interesting. 0:24:04.960 --> 0:24:07.119 I mean it's we're seeing so many financial services companies, 0:24:07.160 --> 0:24:10.760 Tom and other companies including Tesla, relocate to Texas. 0:24:10.400 --> 0:24:13.320 For Glown Incorporated. 0:24:13.680 --> 0:24:17.000 Do you know what's also missing the cycle? Any problem 0:24:17.200 --> 0:24:22.040 in municipalities. Where is a municipality that's under pressure? Where 0:24:22.080 --> 0:24:25.320 is the next Puerto Rico? Where is the concern over 0:24:25.760 --> 0:24:30.439 Chicago or Illinois or California. It's not there. And we 0:24:30.520 --> 0:24:33.800 look at the state rainy day funds and there's still 0:24:33.960 --> 0:24:37.040 flush with a lot of cash. Well states that didn't 0:24:37.080 --> 0:24:37.880 have any day funds. 0:24:37.880 --> 0:24:40.480 The Chancellor today in the United Kingdom saying I'm sorry, 0:24:40.600 --> 0:24:43.920 texts revenues are better in the United Kingdom than anybody imagined. 0:24:44.440 --> 0:24:47.920 I mean, and again, is this misguess on a slow economy? 0:24:47.920 --> 0:24:49.160 And missisas Yeah. 0:24:49.160 --> 0:24:53.240 So wonderful muni bonds. I've got to leave muni bonds 0:24:53.359 --> 0:24:54.520 talk to financial advisor. 0:24:55.280 --> 0:24:59.399 Come back with your muni bond expert. Seriously, I'd love that. 0:25:02.160 --> 0:25:04.359 But you know, if you want to drag somebody along 0:25:04.400 --> 0:25:05.800 and you, they can give us the credit on the 0:25:05.840 --> 0:25:09.000 Denver airport or something like that. That'd be very good. Boy, Michael, 0:25:09.040 --> 0:25:11.800 this has been wonderful. The low point was a Greek 0:25:11.880 --> 0:25:12.800 Latin discussion. 0:25:13.600 --> 0:25:16.440 You know you start there. Thanks for having me, it's 0:25:16.440 --> 0:25:16.920 a pleasure. 0:25:16.960 --> 0:25:30.800 It was great. We've got this codified forever here without question, 0:25:31.000 --> 0:25:35.119 Foreign Affairs and the Console Foreign Relations is leading with 0:25:35.320 --> 0:25:39.520 our dialogue on our fractured geopolitical world, all of us, 0:25:39.560 --> 0:25:43.000 starting with the stewardship of Richard Hawse, Ambassador. Thank you 0:25:43.520 --> 0:25:46.600 in your retirement. I can't believe you're retired for joining 0:25:46.640 --> 0:25:49.920 us today. I'm going to start with an open question, 0:25:50.080 --> 0:25:52.280 Richard Howson, and this goes back to your wonderful book 0:25:52.320 --> 0:25:56.080 The World. Do we have a foreign policy? Does America 0:25:56.240 --> 0:26:00.560 have an identifiable theme, strategy, or plan. 0:26:02.520 --> 0:26:04.240 Well, Tom, first of all, it's great to be back 0:26:04.280 --> 0:26:09.680 with you. Second, I'm busier than ever, not retired, retired 0:26:09.760 --> 0:26:13.879 for old people. Does America have a foreign policy? We 0:26:13.920 --> 0:26:17.240 either have none or we have several. Either way, but 0:26:17.320 --> 0:26:20.919 what we don't have is a coherent, consistent one that 0:26:21.080 --> 0:26:24.680 enjoys broad support. And that's your real problem. If you 0:26:24.760 --> 0:26:27.800 want to be a great power, your friends, your allies 0:26:29.119 --> 0:26:32.000 need to see you as reliable. We are clearly not 0:26:32.119 --> 0:26:35.480 in Your foes need to see you as formidable, and 0:26:35.560 --> 0:26:38.600 I think they increasingly have questions. So whatever it is 0:26:38.640 --> 0:26:40.919 we have, it's not succeeding. 0:26:41.160 --> 0:26:44.920 The color for us and new isolationism. I understand it's 0:26:44.960 --> 0:26:48.760 across a political landscape from mister Trump to mister Biden. 0:26:48.920 --> 0:26:53.600 But how do you perceive the ancient American tradition to say, 0:26:53.880 --> 0:26:56.919 we're protected by oceans. We really don't want to play 0:26:57.240 --> 0:26:59.120 in the international relations game. 0:27:00.880 --> 0:27:05.320 Tom, It's an important question. Isolationism is something that never disappears. 0:27:05.359 --> 0:27:09.439 It's almost like a gene in the body politic, and 0:27:09.480 --> 0:27:12.200 every once in a while it breaks out. I think 0:27:12.240 --> 0:27:15.119 now it's three and a half decades after the end 0:27:15.119 --> 0:27:18.880 of the Cold War, we're seeing it. It's not evenly 0:27:18.920 --> 0:27:24.200 spread across the political spectrum. I think it's largely, not entirely, 0:27:24.240 --> 0:27:27.080 but largely now in the province of the Republican Party. 0:27:27.119 --> 0:27:31.240 We see it most very really in the House of Representatives. 0:27:31.240 --> 0:27:35.159 The more radical Republicans who are obviously hitching their wagon 0:27:35.200 --> 0:27:39.240 to Donald Trump. And I think what we're seeing is 0:27:39.280 --> 0:27:42.399 a traditional pullback from the world, a sense that we 0:27:42.480 --> 0:27:46.600 have to worry more about butter than guns, even though 0:27:46.680 --> 0:27:50.400 withdrawal from the world, as we've learned historically, is truly dangerous, 0:27:50.680 --> 0:27:53.480 and even though our domestic problems aren't caused by a 0:27:53.560 --> 0:27:57.240 lack of spending so much as how we spend our money. 0:27:57.400 --> 0:28:01.280 But that said, the resurgence of isolationism is a real threat. 0:28:01.680 --> 0:28:05.560 We're seeing it obviously in the case of Ukraine, but 0:28:05.560 --> 0:28:07.520 we're seeing it also across the world. I've just come 0:28:07.560 --> 0:28:09.200 back from a trip to the Middle East, and I've 0:28:09.200 --> 0:28:12.080 got to tell you, our friends look at us there. 0:28:12.160 --> 0:28:15.800 I've also recently been in Europe and Asia, and it's 0:28:15.840 --> 0:28:18.960 the number one topic on the mind of every American friend, 0:28:19.040 --> 0:28:22.000 partner and ally is can we continue to count on you? 0:28:22.760 --> 0:28:24.639 So, Richard, let's kind of go to some of the 0:28:24.680 --> 0:28:28.280 hotspots around the world here. Let's start with Ukraine here, 0:28:28.320 --> 0:28:31.119 because I mean it's front center here in terms of 0:28:31.160 --> 0:28:31.600 getting a. 0:28:31.560 --> 0:28:33.439 New aid bill for Ukraine. 0:28:33.480 --> 0:28:35.679 Can you give us your latest thoughts on kind of 0:28:35.680 --> 0:28:39.360 how you think the US position Visa VI Ukraine will 0:28:39.360 --> 0:28:41.320 play out over the coming weeks and months. 0:28:42.360 --> 0:28:44.200 Look here we are at the beginning of the third 0:28:44.280 --> 0:28:47.080 year of this phase of the war. The glass is 0:28:47.120 --> 0:28:49.160 half full if you look at how well Ukraine has 0:28:49.200 --> 0:28:52.440 done with American and European help. But recent trends of 0:28:52.520 --> 0:28:55.320 god to leave people worried. Is Russia's throwing much more 0:28:55.440 --> 0:28:58.720 mass at this conflict than Ukraine is now able to 0:28:59.160 --> 0:29:02.200 counter with. Give a the falling off of American help, 0:29:02.760 --> 0:29:05.480 and I don't have a crystal ball whether ultimately the 0:29:05.640 --> 0:29:08.280 Speaker the House or representatives will figure out a way 0:29:08.320 --> 0:29:11.840 to provide new military aid to Ukraine. So it's possible 0:29:12.040 --> 0:29:15.920 we drift through the election in November without new help, 0:29:15.960 --> 0:29:18.960 in which case Ukraine will hang on, but it will 0:29:19.000 --> 0:29:22.840 gradually lose some territory. Or there'll be maybe a partial 0:29:22.920 --> 0:29:25.800 renewal of American aid, which is my bet. You won't 0:29:25.800 --> 0:29:28.920 get the full amount the President wants, but you'll get something. 0:29:29.240 --> 0:29:31.240 And again, I think at the end of this year, 0:29:31.320 --> 0:29:33.520 the third year of fighting of this phase of the war, 0:29:33.840 --> 0:29:36.160 I think you'll have a battlefield that pretty much looks 0:29:36.200 --> 0:29:39.240 the way it does now, with Ukraine still in control 0:29:39.280 --> 0:29:42.320 of roughly seventy five to eighty percent of its territory, 0:29:42.760 --> 0:29:45.440 and then this one way or another, the war will 0:29:45.600 --> 0:29:48.320 either continue or we'll see a stage set for some 0:29:48.480 --> 0:29:49.719 type of negotiation. 0:29:50.680 --> 0:29:54.160 All right, let's switch gears to the Middle East, because, again, 0:29:54.400 --> 0:29:57.920 similar to Ukraine, it doesn't seem like there's any near 0:29:58.040 --> 0:30:01.840 term resolution here. How do you think the political calculus, 0:30:01.880 --> 0:30:04.000 the military calculus stacks up in that part of the world. 0:30:04.880 --> 0:30:07.440 Well, you're right, there isn't any near term resolution. At most, 0:30:07.440 --> 0:30:11.440 there'll be another temporary cease fire with an agreement to 0:30:11.760 --> 0:30:15.760 release some hostages exchange, allow some prisoners to get out 0:30:15.800 --> 0:30:19.440 of jail, more aid to get into Gaza. But that's 0:30:19.480 --> 0:30:22.360 not to be confused with a strategic and to the 0:30:22.520 --> 0:30:23.600 conflict in their camping. 0:30:24.320 --> 0:30:24.720 Uh. 0:30:24.800 --> 0:30:28.640 This Israeli government is looking at a long term occupation. 0:30:29.200 --> 0:30:32.480 There were jects working with the Palestinian authority. Hamas is 0:30:32.520 --> 0:30:38.600 obviously unacceptable. So there's no the prerequisites. So stability or 0:30:38.640 --> 0:30:41.360 peace are simply not there, no matter how much the 0:30:41.440 --> 0:30:45.000 United States might might urge them. There's also the danger 0:30:45.040 --> 0:30:46.880 of the war widening. So I think we have to 0:30:46.920 --> 0:30:51.160 assume that a turbulent Middle East is the backdrop for 0:30:51.840 --> 0:30:53.080 the foreseeable. 0:30:52.600 --> 0:30:55.920 Future ambassador host with US Richard Haass with his folks, 0:30:56.240 --> 0:30:58.960 can't say enough about his legacy at the Council on 0:30:59.040 --> 0:31:02.360 Foreign Relations full closure. I'm remember there and Foreign Affairs 0:31:02.480 --> 0:31:06.560 Magazine subscribe, throw to your children and say just shut 0:31:06.600 --> 0:31:09.760 up and read one article, pick any article. So, Ambassador, 0:31:10.440 --> 0:31:12.840 I did a panel at Davos with Lawrence Freedman of 0:31:12.920 --> 0:31:17.880 King's College. Obviously definitive on Warren, particularly with a continental perspective, 0:31:18.320 --> 0:31:21.240 and his peace in Foreign Affairs this month is something 0:31:21.280 --> 0:31:24.200 I think we're not thinking of, which is instead of 0:31:24.320 --> 0:31:30.600 US Congress, maybe Ukraine. Obviously, Lawrence Freedman's thinking about Putin 0:31:30.720 --> 0:31:33.800 and he makes it real sure, real clear. It's a 0:31:33.880 --> 0:31:38.040 war Putin still can't win. How close would you suggest 0:31:38.120 --> 0:31:42.719 we are to diplomacy or negotiation with mister Putin? 0:31:43.920 --> 0:31:46.240 First all, it's good to see you, quoting Laurence Freaveman. 0:31:46.280 --> 0:31:48.800 He and I were students at Oxford together, and over 0:31:48.800 --> 0:31:51.760 the last forty fifty years, Laurie's just one of the 0:31:51.760 --> 0:31:57.600 most thoughtful people writing about international relations that is out there. 0:31:58.240 --> 0:32:01.280 I think Tom, we're not in the realm of negotiations 0:32:01.320 --> 0:32:05.400 this year. Everybody Putin wants to see what happens in November. 0:32:05.920 --> 0:32:08.520 He's hoping that time is his friend. And I think 0:32:08.560 --> 0:32:11.920 the Ukrainians are not yet prepared to enter a negotiation 0:32:12.000 --> 0:32:14.320 where they would have to at least temporarily give up 0:32:14.760 --> 0:32:17.800 the reality that they're not going to get their territory 0:32:17.800 --> 0:32:20.760 back to military force. I think, if you have a situation, 0:32:20.840 --> 0:32:22.600 let me just paint it for you. If Joe Biden 0:32:22.640 --> 0:32:25.680 gets re elected, if you have a Republican Senate, which 0:32:25.680 --> 0:32:28.760 you're almost certain to have, and if the House goes Democratic, 0:32:29.120 --> 0:32:32.000 that would be the best outcome for Ukraine. And I 0:32:32.040 --> 0:32:34.360 think that would send the signal to putin that time 0:32:34.480 --> 0:32:37.320 isn't his friend, and I could see that bringing Russian 0:32:37.360 --> 0:32:41.080 to the negotiating negotiating table. On the other hand, if 0:32:41.080 --> 0:32:44.720 Donald Trump wins or if the House stays Republican, that 0:32:44.840 --> 0:32:47.560 I think that weakens Ukraine. And then the question for 0:32:47.680 --> 0:32:51.320 Ukraine is are they prepared to have a negotiation without 0:32:51.360 --> 0:32:53.920 a lot of wind in their sales? And that would 0:32:53.960 --> 0:32:58.080 be obviously a much more fraud dangerous sort of diplomatic context. 0:32:58.320 --> 0:33:00.920 But one way or another, I think we're moving in 0:33:00.960 --> 0:33:03.760 the direction of diplomacy. The question is who does. 0:33:03.680 --> 0:33:07.240 It favor Ambassador David, and you know out on live chat, 0:33:07.280 --> 0:33:09.880 this is on YouTube foks forgetting some really brilliant questions 0:33:09.920 --> 0:33:13.200 and David brings it right over to what we're talking about. 0:33:13.240 --> 0:33:18.240 Ambassador Wh're saying, Okay, we're watching Ukraine, but so is China. 0:33:18.400 --> 0:33:23.000 Does our behavior on the continent of Europe affect The 0:33:23.040 --> 0:33:28.040 math that Beijing has is they look at Taipei. 0:33:28.720 --> 0:33:33.080 Tom absolutely they see these things may be squares on 0:33:33.120 --> 0:33:36.000 the chessboard, but everything we do or don't do sends 0:33:36.000 --> 0:33:39.760 a message not simply about our capability, but our willingness 0:33:39.800 --> 0:33:43.080 to act. And America's capability is on parallel, but our 0:33:43.120 --> 0:33:46.480 will is increasingly questioned. So China is watching what is 0:33:46.520 --> 0:33:50.160 going on with the congressional holding up of AID. They're 0:33:50.200 --> 0:33:54.440 looking at American political dysfunction and on division. They want 0:33:54.480 --> 0:33:56.360 to see what happens in November. So I think this 0:33:56.480 --> 0:33:59.880 year twenty twenty four, the Chinese have made the strict 0:34:00.040 --> 0:34:03.640 eg determination. They want stability in the US China relationship. 0:34:03.640 --> 0:34:06.520 We saw that in November when Hesen Ping and Joe 0:34:06.560 --> 0:34:10.200 Biden met. China doesn't want to see new American economic 0:34:10.360 --> 0:34:14.200 limits on trade or investment. But depending upon what happens 0:34:14.200 --> 0:34:17.960 here in November, when they take their America there, when 0:34:18.000 --> 0:34:22.080 they take their look at America's will and to come 0:34:22.080 --> 0:34:25.040 to Taiwan's defense, things could change. So I think again 0:34:25.080 --> 0:34:27.960 this year things are calm, but China is watching what 0:34:28.040 --> 0:34:31.320 happens with Ukraine, watching what happens with our domestic politics, 0:34:31.560 --> 0:34:33.600 and I think the most interesting moments will come in 0:34:33.600 --> 0:34:36.919 the aftermath of November, when they basically, you know, their 0:34:36.960 --> 0:34:42.200 equivalent of the CIA, draws up their assessments of American 0:34:42.280 --> 0:34:46.960 willingness to act on behalf of a trends in Asia. 0:34:46.239 --> 0:34:48.640 Doctor Haws, can you give us a sense of the 0:34:48.719 --> 0:34:51.880 relative position of mister Putin in Russia with his people 0:34:51.880 --> 0:34:54.600 in terms of support? Is it as strong as it 0:34:54.640 --> 0:34:56.320 appears to us. 0:34:56.160 --> 0:34:56.800 On the outside? 0:34:56.800 --> 0:35:00.200 It seems like, boy, this is a tough war, you know, 0:35:00.280 --> 0:35:01.359 lots of casualties. 0:35:01.800 --> 0:35:03.160 How is his position internally? 0:35:04.200 --> 0:35:06.920 You're going to be hearing from Angelas Stent, who's one 0:35:06.960 --> 0:35:08.799 of the countries, you know, leading excerpt. But I think 0:35:08.800 --> 0:35:11.279 Putin's I think he's very strong, and I think a 0:35:11.320 --> 0:35:13.680 lot of the so called Russian experts got it wrong 0:35:13.920 --> 0:35:16.680 after the Pregosian challenge. They thought Putin was weak and 0:35:16.719 --> 0:35:19.920 on the ropes. I think he largely controls the narrative 0:35:20.600 --> 0:35:24.120 inside his country. The murder of Navali, and let's call 0:35:24.160 --> 0:35:26.480 it what it is, It was a murder. It just 0:35:26.520 --> 0:35:30.120 shows the impunity with which he acts. He's done a 0:35:30.120 --> 0:35:33.600 pretty good job at casting this with Russia as victim, 0:35:33.960 --> 0:35:36.560 even though Russia is the aggressor. So I think anyone 0:35:36.560 --> 0:35:38.719 who's hoping that this war is going to come to 0:35:38.719 --> 0:35:41.399 an end because suddenly there's going to be regime change 0:35:41.440 --> 0:35:43.320 in Russia, I think they're kidding themselves. 0:35:43.719 --> 0:35:45.840 Ambassador, we need to make some news today, now that 0:35:45.920 --> 0:35:49.320 you're completely retired and sliding through the day five days 0:35:49.600 --> 0:35:52.440 a week, would you consider public service to America again, 0:35:52.760 --> 0:35:55.600 whether it is on Ireland or another matter? Who at 0:35:55.840 --> 0:35:58.759 whatever the election outcome is in November, can we see 0:35:58.800 --> 0:36:01.279 has in Washington the time. 0:36:01.320 --> 0:36:03.560 I'd like to think that one does public service on 0:36:03.640 --> 0:36:06.840 the outside, whether it's appearing on shows like yours, or 0:36:07.280 --> 0:36:10.680 I do a weekly newsletter called Home and Away, which 0:36:10.920 --> 0:36:13.080 people can find on substeck. I think there's lots of 0:36:13.080 --> 0:36:16.120 ways to contribute. But sure, Look, I work for four presidents. 0:36:16.640 --> 0:36:19.680 I've been honored to do that. I've worked for Democrats, 0:36:19.719 --> 0:36:23.440 and Republicans, from Jimmy Carter through George W. Bush and 0:36:23.880 --> 0:36:26.560 and even now. I talk regularly to people in the government. 0:36:26.560 --> 0:36:28.640 So I'm always looking for a way, as are always 0:36:28.640 --> 0:36:33.680 prepared to be to serve this country, particularly now this. Yeah, 0:36:33.680 --> 0:36:36.279 this is a truly critical time in our history, both 0:36:36.320 --> 0:36:40.160 domestic internationally. This is not a democracy, is not a 0:36:40.200 --> 0:36:44.040 spectator sport. This is a time for you know, for 0:36:44.160 --> 0:36:46.880 what I would call true patriots. That word is now abused, 0:36:47.200 --> 0:36:49.360 but for people who care about this country. It's a 0:36:49.400 --> 0:36:52.440 time to get informed, get involved, and of course if 0:36:52.640 --> 0:36:55.800 any you know, if I think I can actually you know, help, 0:36:57.000 --> 0:36:58.959 of course of course I would too. 0:36:59.080 --> 0:37:01.399 Back to back really our books the world and also 0:37:01.800 --> 0:37:04.239 the Bill of Obligations as well. Richard Hass, thank you 0:37:04.320 --> 0:37:10.120 so much, Ambassador Hass retired. I love the guy's working 0:37:10.239 --> 0:37:13.800 like a fifteen hour exactly seven days a week. Richard 0:37:13.880 --> 0:37:15.520 Hass there, of course, with all of his work with 0:37:15.560 --> 0:37:30.280 the Council on Foreign Relations, this is an honor, folks. 0:37:31.040 --> 0:37:34.920 The shock of mister Putin and what he did on 0:37:35.000 --> 0:37:38.360 February twenty fourth, I had to jumpstart my book of 0:37:38.360 --> 0:37:41.840 the summer and it took somewhere in the vicinity of 0:37:41.880 --> 0:37:47.240 twelve seconds, Paul to know immediately that Putin's World, Russia 0:37:47.320 --> 0:37:51.240 against the West and with the Rest, is the only book. 0:37:51.280 --> 0:37:56.359 It is. Angela's Stent on Vladimir Putin, jaw dropping about 0:37:56.440 --> 0:37:59.280 how he got to where he is. We are honored 0:37:59.280 --> 0:38:02.400 that from the Brooking Institution, they're non resident senior Fellow. 0:38:03.200 --> 0:38:06.880 Angela Stent joins us this morning for an update. Angela, 0:38:06.960 --> 0:38:10.279 if you had to redo Putin's World today with a 0:38:10.280 --> 0:38:13.320 new prologue or epilogue, what would you write? 0:38:14.680 --> 0:38:17.440 Well, I think it reinforces everything that I wrote in 0:38:17.480 --> 0:38:19.880 the book. But even when I wrote that book, I 0:38:19.920 --> 0:38:24.040 didn't expect a full scale invasion of Ukraine and Putin 0:38:24.160 --> 0:38:27.960 just completely turning against the West like that. So I 0:38:28.000 --> 0:38:30.120 mean I said in the book that Putin was out 0:38:30.160 --> 0:38:34.040 to revise the post Cold War order, that he didn't 0:38:34.040 --> 0:38:37.040 accept the collapse of the Soviet Union. But he's done 0:38:37.080 --> 0:38:40.200 it much more aggressively and probably sooner than I would 0:38:40.200 --> 0:38:40.600 have thought. 0:38:40.760 --> 0:38:43.680 And I think of Robert Gates and Condaleza Rice in 0:38:43.800 --> 0:38:46.600 Belgrade a long time ago, and there was this hole 0:38:46.680 --> 0:38:50.000 back and forth, and it was basically Merscheimer of Chicago 0:38:50.040 --> 0:38:53.120 and others with realist politics saying don't push, don't push, 0:38:53.160 --> 0:38:56.719 another saying we've got to expand, et cetera. And here 0:38:56.760 --> 0:38:59.799 we are doctor Stent with Paul. I still can't believe 0:38:59.840 --> 0:39:05.239 I'm saying this. Finland in Sweden, in Nato. Angela state, 0:39:05.440 --> 0:39:09.520 how does that change the calculus for Putin's world to 0:39:09.600 --> 0:39:13.360 have everything going wrong from Turkey from Istumbul, from Ancora 0:39:13.880 --> 0:39:15.400 up to Stockholm and Helsinki. 0:39:17.160 --> 0:39:21.160 So obviously this is one of Putin's great achievements, unintended 0:39:21.360 --> 0:39:24.799 to have the Baltic Sea now in Nato Lake. But 0:39:25.360 --> 0:39:28.360 it's not going to change, you know, his conviction that 0:39:28.600 --> 0:39:31.319 the West is against him and that he can outlast 0:39:31.360 --> 0:39:34.960 them and in a way out maneuver them. So he's 0:39:35.000 --> 0:39:38.480 just doubling down now. I would say that both the 0:39:38.560 --> 0:39:42.280 Russia Ukraine War and the Israel Amas War have actually 0:39:42.320 --> 0:39:45.919 given him more influence in what the Russians now called 0:39:45.960 --> 0:39:48.719 the world Majority and we call the Global South. So 0:39:48.800 --> 0:39:53.799 he's actually gaining adherents there. And Russia is back in 0:39:53.960 --> 0:39:56.279 Africa in a way that it has to read since 0:39:56.280 --> 0:39:57.400 the Soviet collapse. 0:39:57.800 --> 0:40:01.719 Yes, Angela talked to us about kind of what's going 0:40:01.760 --> 0:40:05.440 on within Russia. How much support does mister Putin have 0:40:05.480 --> 0:40:06.280 among the populast? 0:40:06.320 --> 0:40:06.880 Did they not have? 0:40:07.040 --> 0:40:09.680 Does he not have the headwinds that maybe we hadn't 0:40:09.680 --> 0:40:12.200 passed wars, seeing body bags come home and that type 0:40:12.200 --> 0:40:12.480 of thing. 0:40:12.840 --> 0:40:14.840 Talk to us about how the populast is feeling. 0:40:15.600 --> 0:40:16.399 Yeah, So, the. 0:40:16.400 --> 0:40:20.959 Latest opinion polls by the independent polling organization Levadas still 0:40:21.000 --> 0:40:24.960 show that Putin has a seventy percent popularity rate, even 0:40:25.040 --> 0:40:28.480 though more than fifty percent of the Russians now say 0:40:28.520 --> 0:40:30.320 that they wish the war would and then there should 0:40:30.320 --> 0:40:33.759 be negotiations, but they don't want Russian League of Territory out. 0:40:34.160 --> 0:40:37.200 So don't forget a lot of those Russians. They they're 0:40:37.239 --> 0:40:40.200 not shown on their efficient TV screens the body bags 0:40:40.239 --> 0:40:43.880 coming back. People obviously know that in local towns and 0:40:43.960 --> 0:40:46.520 villages where they see them coming back. And we have 0:40:46.640 --> 0:40:51.480 seen protests by mothers and wives saying, you know, our 0:40:51.560 --> 0:40:54.520 men were mobilized in twenty twenty two and they've basically 0:40:54.600 --> 0:40:58.160 not come back. Yeah, but in such a repressive society, 0:40:58.239 --> 0:41:01.600 and the penalties for express senior opinions are so great, 0:41:01.920 --> 0:41:05.719 But that's really dampened popular unrest. 0:41:05.800 --> 0:41:08.920 If you like an opposition to this war, Angela. 0:41:09.040 --> 0:41:11.719 So from your perspective, I mean, I guess if we 0:41:11.800 --> 0:41:14.279 think back, just look at history, there's no reason to 0:41:14.320 --> 0:41:17.600 think that the Russians will grow tired of this. We've 0:41:17.640 --> 0:41:20.040 seen in their history how they can take so much 0:41:20.080 --> 0:41:22.799 pain for such a long period of time. How do 0:41:22.880 --> 0:41:26.920 you think they view a solution here to Ukraine? Is 0:41:26.960 --> 0:41:30.239 it absolute victory or can there be something negotiated? 0:41:31.400 --> 0:41:34.560 So I think at this point Putin is waiting for 0:41:34.680 --> 0:41:37.840 the results of our presidential election in November, hoping that 0:41:37.920 --> 0:41:40.600 we'll have a president that will cut all assistance and 0:41:40.640 --> 0:41:43.319 support for Ukraine. But I think the way they see 0:41:43.320 --> 0:41:45.640 it is they're going to hold out. As you say 0:41:45.760 --> 0:41:48.719 that down that many times in history. In the end 0:41:48.960 --> 0:41:51.839 the Europeans and the US. The result, well, we can 0:41:51.880 --> 0:41:54.560 look what's going on in our own congress. We can't 0:41:54.600 --> 0:41:59.160 even appropriate the sixty billion dollars for Ukraine. I think 0:41:59.160 --> 0:42:02.640 at the moment, who probably understands that he can't take 0:42:02.640 --> 0:42:05.440 the whole of Ukraine, but he could get a settlement. 0:42:05.760 --> 0:42:09.680 He could then whether Ukrainians would have to make concessions 0:42:10.000 --> 0:42:13.080 on territory, and then the army could regroup. And remember 0:42:13.120 --> 0:42:17.560 he told Taker Kossen our goal is the denoxification of Ukraine, 0:42:17.800 --> 0:42:20.560 and that means regime change in Ukraine. So in the 0:42:20.600 --> 0:42:21.920 long run, that's still what he is. 0:42:21.880 --> 0:42:25.320 Aftertone, let me circle back to our conversation with Richard 0:42:25.400 --> 0:42:29.040 Haas earlier this morning and to ask you, and this 0:42:29.160 --> 0:42:32.840 is playing off of a fabulous foreign affairs article from 0:42:32.880 --> 0:42:36.160 a number of months ago where Angel's stent folks looks 0:42:36.200 --> 0:42:40.640 at America in the world's middle powers, do you detect 0:42:40.680 --> 0:42:43.400 a foreign policy that's coherent in Washington? 0:42:45.560 --> 0:42:49.279 Unfortunately, I'm not sure, you know, particularly towards dealing with 0:42:49.360 --> 0:42:53.160 these countries in the global South. You know, they are 0:42:53.200 --> 0:42:56.319 on the fence about all of this. I think democracy 0:42:56.400 --> 0:42:59.840 versus autocracy. Casting it as that is not very helpful 0:42:59.840 --> 0:43:00.799 and it hasn't. 0:43:00.480 --> 0:43:01.560 Been very productive. 0:43:01.920 --> 0:43:04.439 So I think we really have to impress on these 0:43:04.440 --> 0:43:07.239 countries though. What Russia is doing is, you know, a 0:43:07.320 --> 0:43:10.560 violation of the un chotter of international law. And if 0:43:10.640 --> 0:43:13.000 Russia can get away with it, who knows who might 0:43:13.040 --> 0:43:14.600 invade them and get away with it. 0:43:14.520 --> 0:43:18.000 Too, Angel, thank you so much. Angels start with us 0:43:18.160 --> 0:43:26.040 with Brookings in her fabulous book Putin's World. You do 0:43:26.280 --> 0:43:29.319 look at the front pages. Tell me it's not beyond meat. 0:43:29.400 --> 0:43:32.680 No, it's not beyond me. No, definitely, but it has 0:43:32.719 --> 0:43:35.920 to do with food. So there you go. Americans are 0:43:35.960 --> 0:43:39.640 starting to talk more about what they're doing differently, how 0:43:39.640 --> 0:43:42.080 they're changing how and what they eat, how they're changing 0:43:42.120 --> 0:43:45.000 how they live because of food inflation. So these are 0:43:45.000 --> 0:43:47.200 people who responded to a Wall Street Journal article. They're 0:43:47.200 --> 0:43:50.120 talking about how they're doing potluck dinners. That's something different. 0:43:50.120 --> 0:43:52.680 They're eating rice and beans instead of meat, so they 0:43:52.680 --> 0:43:55.960 still get their protein. They're planning meals, they're making spreadsheets 0:43:55.960 --> 0:43:58.279 to do this. They're buying more in bulk, so they're 0:43:58.320 --> 0:44:03.120 going more costco runs, maybe clipping coupons. They're cooking simpler meals, 0:44:03.120 --> 0:44:06.160 so now things like meat loaf and tuna casserole are 0:44:06.200 --> 0:44:09.840 coming back again because they're cheaper to make. They're cheaper 0:44:09.880 --> 0:44:13.000 and easier to make. There you go. And they're also 0:44:13.040 --> 0:44:16.680 doing things which I found industring. They're gardening, they're imposing 0:44:16.719 --> 0:44:18.920 limits on eating out, which I know my families do, 0:44:19.000 --> 0:44:20.680 and we're cutting back on how much we eat out. 0:44:20.760 --> 0:44:24.479 And then they're hunting and fishing for their food. They're 0:44:24.480 --> 0:44:25.440 doing that on. 0:44:25.360 --> 0:44:31.400 The you know, oh look a squirrel. Okay, Bill, go 0:44:31.520 --> 0:44:34.360 get the squirrel Heather log in the Washington Post. They 0:44:34.440 --> 0:44:38.239 quote Constant Hunter working with Diane Swank today as well 0:44:38.320 --> 0:44:40.920 the headline We've been looking at inflation the wrong way 0:44:41.360 --> 0:44:44.279 and John Sylvia x Wells Fargo has been brilliant on this. 0:44:44.640 --> 0:44:46.520 And I think you're just dead on Lisa. I mean, 0:44:46.600 --> 0:44:51.920 I I take great offense from people looking at Q 0:44:52.200 --> 0:44:52.560 over Q. 0:44:53.280 --> 0:44:57.880 Yeah, the store brand stuff versus I mean, that's like 0:44:57.920 --> 0:44:59.360 thirty discount. 0:44:59.400 --> 0:44:59.560 Yes. 0:44:59.600 --> 0:45:01.920 I didn't even think about that until several years ago. 0:45:02.040 --> 0:45:03.839 Now it's become much more of a saying so true. 0:45:04.160 --> 0:45:06.720 I'm looking at the photo here in the one Sheton 0:45:06.800 --> 0:45:09.560 Post and they don't say what the store is. The 0:45:09.560 --> 0:45:12.239 store is in Bethesda, Maryland, but I'm looking at the 0:45:12.280 --> 0:45:15.200 milk that comes in the door at my house and 0:45:15.200 --> 0:45:21.200 I might as well be buying beer. I mean six. 0:45:22.920 --> 0:45:25.759 Okay, since we're on the topic of money, did you 0:45:25.840 --> 0:45:28.759 know this that having five million is no longer enough 0:45:28.800 --> 0:45:31.760 to crack the top one percent tier in the US. 0:45:32.360 --> 0:45:34.719 This is research from Night Frank. It now takes at 0:45:34.760 --> 0:45:38.120 least five point eight million to join that richest tier 0:45:38.520 --> 0:45:41.160 of Americans, fifteen percent more than it was a year ago. 0:45:41.480 --> 0:45:45.280 The top spot for the highest threshold worldwide Monaco twelve 0:45:45.360 --> 0:45:48.719 point eight million. Surprise, we have Luxembourg, Switzerland. It takes 0:45:48.719 --> 0:45:51.319 about eight million to make the cut there. But they're 0:45:51.400 --> 0:45:53.680 just talking about different things in the article, like why 0:45:53.760 --> 0:45:56.880 Russia's evasion of Ukraine hurting the economy people when they 0:45:56.880 --> 0:46:00.400 were just starting to recover from the pandemic. That's prices 0:46:00.440 --> 0:46:03.200 for energy food surging. So you see that threshold is 0:46:03.239 --> 0:46:04.600 starting to take up a bit. 0:46:05.480 --> 0:46:07.440 To me, it really talks of the failure of the 0:46:07.440 --> 0:46:12.080 American retirement system. Roger Ferguson's let on this TIA. I'm 0:46:12.080 --> 0:46:14.880 not sure what the former vice chairman's doing right now, 0:46:15.360 --> 0:46:19.919 but this idea that the US government has that five 0:46:20.000 --> 0:46:23.480 hundred thousand dollars is a lot of money is just 0:46:24.239 --> 0:46:28.560 incredibly wrong. In off the mark about what is comfortable 0:46:29.080 --> 0:46:31.440 that you need? I mean, Ken, I mean Ken. The 0:46:31.520 --> 0:46:34.840 answer is what you're trying to do, Ken, is to 0:46:34.960 --> 0:46:39.080 retire and listen to the sound of the shores. I mean, 0:46:39.600 --> 0:46:42.520 you know, there's just no question you want to retire 0:46:42.680 --> 0:46:44.200 with excellent waves. 0:46:47.719 --> 0:46:49.080 Yep, they were retired. 0:46:49.120 --> 0:46:53.359 Okay, I'm distracted, now I can use some of that. 0:46:54.160 --> 0:46:54.440 Okay. 0:46:54.520 --> 0:46:57.080 Next one is from USA Today, it's a warning actually 0:46:57.120 --> 0:47:01.759 for Netflix customers who pay their account through Apple. So apparently, yeah, 0:47:02.160 --> 0:47:05.560 they're billing statements the streaming subscription through Apple's iTunes or 0:47:05.600 --> 0:47:07.880 app stored. They're no longer going to be an option, 0:47:08.239 --> 0:47:10.240 so you have to change it by the next billing 0:47:10.239 --> 0:47:13.359 cycle or you won't be getting Netflix anymore. So it's 0:47:13.440 --> 0:47:15.759 it's something that happened back in twenty eighteen from what 0:47:15.800 --> 0:47:19.600 I understand, and now what happened is that those people 0:47:19.600 --> 0:47:22.080 who were grandfather well now it's their turn, so now 0:47:22.120 --> 0:47:23.760 they have to start, you know, switching. 0:47:23.840 --> 0:47:26.680 I just I just assumed Netflix is going to charge me. 0:47:27.160 --> 0:47:29.000 They're gonna take They're gonna take that. 0:47:29.080 --> 0:47:30.719 Not if it's aff they will find you. 0:47:31.520 --> 0:47:34.279 A couple of years ago I figured out how I 0:47:34.320 --> 0:47:35.960 was playing for three Netflix. 0:47:37.360 --> 0:47:37.600 Yeah. 0:47:37.719 --> 0:47:41.120 Thanks, I'm thankful with the Netflix for you know, putting 0:47:41.160 --> 0:47:44.759 that to bed, because exactly I had like some offspring 0:47:44.800 --> 0:47:46.080 on my credit card. 0:47:46.960 --> 0:47:49.600 Netflix to care that for me, I still did. 0:47:49.600 --> 0:47:52.600 It's just one small account, it's like or whatever. 0:47:52.680 --> 0:47:57.560 Now it happened come from from somewhere. I was trying 0:47:57.560 --> 0:47:58.960 to watch Netflix the other day and it said I 0:47:58.960 --> 0:48:00.680 couldn't because I had two many users. 0:48:01.040 --> 0:48:03.720 I just resigned up from Major League Baseball to enjoy 0:48:03.719 --> 0:48:06.720 the Red Sox losing. And they raise it five dollars. 0:48:06.760 --> 0:48:11.799 Okay, that's the front. Ye raise the fee, sure, and 0:48:11.800 --> 0:48:13.120 people will pay. People will pay it. 0:48:13.400 --> 0:48:16.960 I'll pay anything. They'll see the Detroit Tigers work fourteen people. 0:48:17.640 --> 0:48:19.040 Have you done one? No? 0:48:19.120 --> 0:48:19.920 This was a good one. 0:48:19.960 --> 0:48:20.640 Oh yeah yeah. 0:48:20.920 --> 0:48:23.520 New York Times they say that there's a new trend 0:48:23.520 --> 0:48:28.239 on TikTok. It's people posting and asking commenters how old 0:48:28.239 --> 0:48:29.000 do you think I am? 0:48:30.360 --> 0:48:32.040 This is the new thing? Yeah, thank you. 0:48:32.440 --> 0:48:35.000 Apparently it started because it was someone from gen Z 0:48:35.200 --> 0:48:37.919 who's at like eleven to twenty six year age who 0:48:37.960 --> 0:48:39.920 did it. Because there are studies that show that gen 0:48:40.080 --> 0:48:42.279 Z is aging faster than millennials. 0:48:42.560 --> 0:48:43.359 So there was this. 0:48:43.320 --> 0:48:46.760 Competition back and forth. But people, I mean, you're asking 0:48:46.800 --> 0:48:47.280 for trouble. 0:48:47.400 --> 0:48:49.160 That's I don't know. 0:48:49.239 --> 0:48:51.160 You post it out there and you ask people how 0:48:51.200 --> 0:48:52.080 old do you think you are? 0:48:52.480 --> 0:48:56.640 I don't know, live chats, how old do you think 0:48:56.680 --> 0:48:58.799 I am? What are they say? 0:48:58.920 --> 0:49:00.239 Yes, how old do you think I am? 0:49:00.280 --> 0:49:01.279 How old do you think I am? 0:49:01.480 --> 0:49:01.759 All right? 0:49:02.640 --> 0:49:04.400 Put it on the chat, yes, you know. 0:49:05.760 --> 0:49:06.600 So that's going. 0:49:06.440 --> 0:49:15.600 On one and four Riches right on, Lisa Mateo, that 0:49:15.640 --> 0:49:20.320 was very strong. Thank you. This is the Bloomberg Surveillance Podcast, 0:49:20.560 --> 0:49:25.399 bringing you the best in economics, finance, investment, and international relations. 0:49:25.600 --> 0:49:28.959 You can also watch the show live on YouTube. Visit 0:49:29.000 --> 0:49:33.120 the Bloomberg Podcast channel on YouTube to see the show 0:49:33.400 --> 0:49:36.279 weekday mornings from seven to ten a m. Eastern from 0:49:36.320 --> 0:49:39.759 our global headquarters in New York City. 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