1 00:00:00,080 --> 00:00:13,040 Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,639 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg So 5 00:00:27,760 --> 00:00:31,160 Speaker 1: more science emerging that the global manufacturing recession has arrived 6 00:00:31,200 --> 00:00:34,280 Speaker 1: in America. One question, maybe two? Does it become more 7 00:00:34,440 --> 00:00:37,080 Speaker 1: entrenched and does it spread? I'm pleased to say that 8 00:00:37,120 --> 00:00:39,120 Speaker 1: joining us here in New York City is Luigi San 9 00:00:39,159 --> 00:00:42,840 Speaker 1: Gala's University of Chicago Booth School Finance professor. Good morning 10 00:00:42,840 --> 00:00:45,720 Speaker 1: to professor, good morning. Help me answer that question or 11 00:00:45,760 --> 00:00:48,479 Speaker 1: those questions. Does it become more entrenched and does it 12 00:00:48,560 --> 00:00:52,400 Speaker 1: spread beyond manufacturing? I think that the good news is 13 00:00:52,479 --> 00:00:55,520 Speaker 1: that the west of the economy seems to be pretty strong, 14 00:00:55,960 --> 00:01:00,160 Speaker 1: and so I don't think it will spread as as 15 00:01:00,200 --> 00:01:02,800 Speaker 1: of today. But I think it's important to keep an 16 00:01:02,840 --> 00:01:05,880 Speaker 1: eye on what's happening on the trade front, because if 17 00:01:05,880 --> 00:01:09,080 Speaker 1: the things were to deteriorate there, then I think that 18 00:01:09,120 --> 00:01:11,600 Speaker 1: would be more of a problem for the U. S economy. 19 00:01:11,600 --> 00:01:13,880 Speaker 1: At the epicenter of all of this was a week 20 00:01:13,959 --> 00:01:16,240 Speaker 1: I sam an Ugly I sand beneath the surface as well. 21 00:01:16,319 --> 00:01:19,080 Speaker 1: The weakest we've seen in around about ten years. And 22 00:01:19,080 --> 00:01:21,200 Speaker 1: when you look at the complaints from sector to sector, 23 00:01:21,520 --> 00:01:24,120 Speaker 1: it's not about the cost of capital, it is about trade. 24 00:01:24,640 --> 00:01:26,640 Speaker 1: With that in mind, what can the federal reserve? What 25 00:01:26,680 --> 00:01:30,200 Speaker 1: can central banks actually do to insulate these economies from 26 00:01:30,240 --> 00:01:33,880 Speaker 1: the trade headwinds. So there's not a lot of the 27 00:01:33,880 --> 00:01:39,480 Speaker 1: FAT can do, but clearly by making a very reducing 28 00:01:39,600 --> 00:01:42,640 Speaker 1: rates might make the dollar less strong and in a 29 00:01:42,680 --> 00:01:47,120 Speaker 1: sense can expand export. That's certainly what the president would like. 30 00:01:47,200 --> 00:01:50,600 Speaker 1: I don't know whether this was j. Powell do, but 31 00:01:50,680 --> 00:01:53,600 Speaker 1: I think that's the only channel the FAT as. I 32 00:01:53,640 --> 00:01:57,240 Speaker 1: think that this problem should be solved at the political level, 33 00:01:57,360 --> 00:02:00,240 Speaker 1: not at the monetary level. We've had multiple growth as 34 00:02:00,440 --> 00:02:02,560 Speaker 1: in the last ten years through the cycle, we've had 35 00:02:02,600 --> 00:02:08,840 Speaker 1: to which trying to understand where the twenty eight nineteen 36 00:02:08,880 --> 00:02:13,040 Speaker 1: going into it is different? Professor? Is it different compared 37 00:02:13,040 --> 00:02:16,320 Speaker 1: to what we have seen in this cycle already? I 38 00:02:16,360 --> 00:02:19,640 Speaker 1: think it's a bit different because it is more global 39 00:02:19,880 --> 00:02:24,480 Speaker 1: and we see that Germany has lowed down significantly and 40 00:02:24,720 --> 00:02:26,760 Speaker 1: uh and that my twigger has low down in the 41 00:02:26,919 --> 00:02:30,280 Speaker 1: entire Europe. I think that the Germany is low slowdown 42 00:02:30,520 --> 00:02:35,200 Speaker 1: is a direct repercussion of slowdown in China. In fact, 43 00:02:35,240 --> 00:02:38,600 Speaker 1: I believe that the German numbers are much more reliable 44 00:02:38,639 --> 00:02:42,080 Speaker 1: than the Chinese numbers, so this is an indication that 45 00:02:42,160 --> 00:02:44,799 Speaker 1: in China there is a slowdown. So this is more 46 00:02:44,840 --> 00:02:48,640 Speaker 1: at the global level, and I don't see a lot 47 00:02:48,720 --> 00:02:51,760 Speaker 1: of space for maneuver. This is who has the space 48 00:02:51,840 --> 00:02:56,080 Speaker 1: to maneuver is the German government, but it doesn't seem 49 00:02:56,080 --> 00:02:58,440 Speaker 1: to be willing to do it. So I think we 50 00:02:58,520 --> 00:03:03,440 Speaker 1: need more physical expansion at the ward level. The United 51 00:03:03,480 --> 00:03:06,200 Speaker 1: States has done a lot in the past, even when 52 00:03:06,240 --> 00:03:10,320 Speaker 1: maybe it was not needed to physically expand. So we're 53 00:03:10,400 --> 00:03:14,840 Speaker 1: left with you ap taking its uh responsibility. And I 54 00:03:14,840 --> 00:03:17,959 Speaker 1: don't see this coming within all your books, and particularly 55 00:03:17,960 --> 00:03:21,079 Speaker 1: your book on American Capitalism, which was so illuminating as 56 00:03:21,080 --> 00:03:24,080 Speaker 1: a foreigner talking about, you know, how we do things 57 00:03:24,080 --> 00:03:26,880 Speaker 1: in America. So much like what John Farrell was just 58 00:03:26,960 --> 00:03:30,280 Speaker 1: asking about, is where the gains go to. If we 59 00:03:30,320 --> 00:03:35,120 Speaker 1: have a manufacturing slowdown that is a certain effect on people. 60 00:03:35,560 --> 00:03:38,600 Speaker 1: If we have a service sector in financial expansion from 61 00:03:38,640 --> 00:03:41,400 Speaker 1: all this, are those gains all going to the elite? 62 00:03:42,920 --> 00:03:46,920 Speaker 1: Unfold the left to say yes. I think that so 63 00:03:46,960 --> 00:03:51,800 Speaker 1: far trade has benefited mostly as more elite and as 64 00:03:52,200 --> 00:03:57,000 Speaker 1: pedalized Midwest America. And we have seen the reaction of 65 00:03:57,080 --> 00:04:00,280 Speaker 1: this in the last election. And I don't think that 66 00:04:00,720 --> 00:04:03,480 Speaker 1: anything major has been done to to fix this problem. 67 00:04:03,840 --> 00:04:06,640 Speaker 1: And I don't think it's unique of the United States. 68 00:04:06,680 --> 00:04:10,560 Speaker 1: Look at the United Kingdom. You have the same problem there. 69 00:04:10,640 --> 00:04:14,360 Speaker 1: You have a London that is very much poor. You 70 00:04:14,520 --> 00:04:17,880 Speaker 1: open in favor of trade and benefiting from the trade, 71 00:04:18,440 --> 00:04:20,479 Speaker 1: and the rest of England or the rest of the 72 00:04:20,600 --> 00:04:25,000 Speaker 1: UK that don't benefit as well. This is the populist backlash. 73 00:04:25,080 --> 00:04:27,000 Speaker 1: Let's talk about the economy right in front of us 74 00:04:27,080 --> 00:04:30,480 Speaker 1: at the moment. The European economy has been weak now 75 00:04:30,640 --> 00:04:33,200 Speaker 1: for I would say eighteen months. Likewise, for China, this 76 00:04:33,320 --> 00:04:36,560 Speaker 1: started in spring eighteen. In fact, some of this weakness 77 00:04:36,640 --> 00:04:40,880 Speaker 1: predates the tariffs going on, It predates the ramping up 78 00:04:41,160 --> 00:04:43,840 Speaker 1: of the trade war. With that in mind, it's not 79 00:04:43,880 --> 00:04:46,680 Speaker 1: the United States leading the downturn here. The United States 80 00:04:46,800 --> 00:04:49,400 Speaker 1: is lagging behind the rest of the world. So if 81 00:04:49,400 --> 00:04:51,159 Speaker 1: we're going to look for a recovery, we need to 82 00:04:51,160 --> 00:04:52,720 Speaker 1: see the rest of the world lead us out of 83 00:04:52,839 --> 00:04:54,479 Speaker 1: that it's not the US that's going to lead us 84 00:04:54,480 --> 00:04:56,839 Speaker 1: out of this. The US is langgic. Do you see 85 00:04:56,880 --> 00:04:59,880 Speaker 1: any leading indicators in the global economy right now? XU 86 00:05:00,040 --> 00:05:05,800 Speaker 1: ways that suggests that this story has started to bottom out. Um, 87 00:05:05,839 --> 00:05:10,000 Speaker 1: not really, I think unfortunately. I wish I could give 88 00:05:10,040 --> 00:05:14,159 Speaker 1: you some hope, but no, I think that there's low 89 00:05:14,200 --> 00:05:17,440 Speaker 1: down in in China is probably going to continue, and 90 00:05:17,520 --> 00:05:21,240 Speaker 1: this will every percussion in Europe. And I don't see 91 00:05:21,279 --> 00:05:27,120 Speaker 1: you up uh we're starting because the natural way will 92 00:05:27,160 --> 00:05:31,760 Speaker 1: we start would be some major fiscal package originating in Germany. 93 00:05:31,839 --> 00:05:33,880 Speaker 1: And I don't see the political will of that. You 94 00:05:33,960 --> 00:05:37,599 Speaker 1: laugh When I say major phiscal package in originating from Germany, 95 00:05:37,640 --> 00:05:40,919 Speaker 1: you laugh, And that's an indication of how unlikely this 96 00:05:41,040 --> 00:05:43,560 Speaker 1: is anytime soon. Eventually they am I going to do it? 97 00:05:43,600 --> 00:05:47,600 Speaker 1: But eventually when there's a major recession in Germany. This 98 00:05:47,720 --> 00:05:49,799 Speaker 1: laugh is not just reserved for you, Luigi. I should 99 00:05:49,800 --> 00:05:52,359 Speaker 1: express myself quite clearly that I laugh for everyone that 100 00:05:52,360 --> 00:05:55,240 Speaker 1: brings out the possibility of fiscal stimulus in Germany, because 101 00:05:55,279 --> 00:05:58,520 Speaker 1: I'm through still trying to understand what the bite point 102 00:05:58,680 --> 00:06:01,359 Speaker 1: is for the German government to change Christmas. You know 103 00:06:01,440 --> 00:06:04,080 Speaker 1: how this works in Europe better than anyone. You have chaos, 104 00:06:04,120 --> 00:06:06,560 Speaker 1: you have a crisis, then you finally have some kind 105 00:06:06,560 --> 00:06:10,440 Speaker 1: of suboptimal solution. In Germany, quite clearly a recession amount 106 00:06:10,480 --> 00:06:14,000 Speaker 1: recession is not enough to deliver fiscal stimulus. What is 107 00:06:15,200 --> 00:06:20,040 Speaker 1: I think that when the recession will buy Germany serusually 108 00:06:20,400 --> 00:06:25,360 Speaker 1: and this will create a political demand for intervention, Eventually 109 00:06:26,320 --> 00:06:31,279 Speaker 1: they will intervene. But so far Germany has benefited from 110 00:06:31,320 --> 00:06:36,640 Speaker 1: this austerity policy because they have exported their way out 111 00:06:37,279 --> 00:06:42,200 Speaker 1: of all the cycles, and the cost of adjustment has 112 00:06:42,240 --> 00:06:45,640 Speaker 1: been imposed on the rest of Europe. And and so 113 00:06:46,080 --> 00:06:50,400 Speaker 1: I think that is as if in uh in the 114 00:06:50,480 --> 00:06:54,680 Speaker 1: United States you only look at Massachusetts. Massachusetts is benefiting 115 00:06:54,960 --> 00:06:58,919 Speaker 1: from a more steady package because the cast are born 116 00:06:59,279 --> 00:07:02,320 Speaker 1: in Texas and in in Lenai and Ilenoia and Texas 117 00:07:02,400 --> 00:07:06,080 Speaker 1: don voud in Massachusetts. I think that's what united is about. 118 00:07:06,520 --> 00:07:08,360 Speaker 1: I mean, the headlines in the last two hours out 119 00:07:08,360 --> 00:07:10,680 Speaker 1: of Germany are just stunning. As you point out, John, 120 00:07:10,920 --> 00:07:16,440 Speaker 1: there's no framework within those headlines of any fiscal adjustment. 121 00:07:16,480 --> 00:07:18,760 Speaker 1: It's the weakest link. I wonder how the God reads 122 00:07:18,760 --> 00:07:20,800 Speaker 1: those headlines. I have no idea. I just think it's 123 00:07:20,800 --> 00:07:23,760 Speaker 1: the weakest link in Europe right now, Luigi, Never mind, Legard, 124 00:07:23,800 --> 00:07:26,880 Speaker 1: let's talk about Chancellor Merkell. So many people sung the 125 00:07:26,880 --> 00:07:29,720 Speaker 1: praises of Chancellor Merkel for so long, and I don't 126 00:07:29,720 --> 00:07:31,880 Speaker 1: think economic historians are going to be too kind to her. 127 00:07:32,240 --> 00:07:35,000 Speaker 1: In ten twenty thirty years time, there was a once 128 00:07:35,040 --> 00:07:39,000 Speaker 1: in a lifetime opportunity to restructure the German economy, to 129 00:07:39,080 --> 00:07:42,760 Speaker 1: take advantage of record low borrowing raids, to change the 130 00:07:42,840 --> 00:07:46,080 Speaker 1: export driven model that is the German economy. They haven't 131 00:07:46,080 --> 00:07:50,200 Speaker 1: taken that opportunity. They haven't taken that opportunity at all. No, 132 00:07:50,400 --> 00:07:52,560 Speaker 1: that they have not in fact, and then kind of 133 00:07:52,600 --> 00:07:56,480 Speaker 1: the opposite, and I think that to understand the German spirit, 134 00:07:56,640 --> 00:08:00,520 Speaker 1: you have to realize that the first Kensian in history 135 00:08:00,920 --> 00:08:06,400 Speaker 1: was actually Hitler, because Hitler used massively fiscal expansion to 136 00:08:07,040 --> 00:08:11,240 Speaker 1: start Germany, and so in Germany the idea of using 137 00:08:11,240 --> 00:08:17,760 Speaker 1: the fiscal stimulus is anathema because of this historical president. Um, 138 00:08:17,840 --> 00:08:19,440 Speaker 1: we're just we're out of time and we would do 139 00:08:19,480 --> 00:08:21,360 Speaker 1: this later, but I've got to bring it up right now. 140 00:08:22,040 --> 00:08:24,880 Speaker 1: Is Barcelona going to do a Tottenham? I mean, is 141 00:08:24,880 --> 00:08:26,880 Speaker 1: that where we're enjoy that game? Yes? So that was 142 00:08:26,920 --> 00:08:29,480 Speaker 1: just fabulous seven to what happened to you? I don't know, 143 00:08:29,520 --> 00:08:33,120 Speaker 1: but today's Barcelona Inter Malon against Inter But Luigi supports 144 00:08:33,160 --> 00:08:35,320 Speaker 1: my c Milan, I know, but it's come on as 145 00:08:35,360 --> 00:08:40,200 Speaker 1: Milan as Milan. On one side is blue and black, 146 00:08:40,320 --> 00:08:43,720 Speaker 1: the other side is red and black. In the studio, 147 00:08:44,040 --> 00:08:46,880 Speaker 1: the red and black half of Milan. Yeah, well, the 148 00:08:47,000 --> 00:08:49,760 Speaker 1: losing side, but we're very committed to lose it. It's 149 00:08:49,800 --> 00:08:52,560 Speaker 1: like the Chicago cab they always lose, but you love them. 150 00:08:52,679 --> 00:08:56,000 Speaker 1: This is the Sylvia Balasconi side of Milan. Ce Milan 151 00:08:56,200 --> 00:08:59,880 Speaker 1: actually to support that way before it was going to 152 00:09:00,200 --> 00:09:03,520 Speaker 1: the unforely dates me, but I supported Milan a c 153 00:09:04,440 --> 00:09:06,800 Speaker 1: back in the time where it was a great team 154 00:09:06,880 --> 00:09:09,720 Speaker 1: before before Belisky took over in the mid eighties. Do 155 00:09:09,840 --> 00:09:14,559 Speaker 1: they have a derby? A derby? Derby is derby. We 156 00:09:14,880 --> 00:09:17,680 Speaker 1: played stadium and it took place a couple of weekends. 157 00:09:17,720 --> 00:09:20,920 Speaker 1: Have you been to the but I have been to 158 00:09:21,000 --> 00:09:23,560 Speaker 1: Juventus Milan and it was a great game and we 159 00:09:23,640 --> 00:09:26,400 Speaker 1: also lost. Can you buy the team with your next 160 00:09:26,440 --> 00:09:29,120 Speaker 1: book royalties? I mean Milan. I think we can probably 161 00:09:29,160 --> 00:09:31,280 Speaker 1: put some money together around this table. Although I have 162 00:09:31,640 --> 00:09:34,679 Speaker 1: heard that the French billion misr ar know might be 163 00:09:34,720 --> 00:09:38,360 Speaker 1: interested in a slice, will have the best jersey of 164 00:09:38,400 --> 00:09:41,520 Speaker 1: all the teams. We gotta go Luigians and Gallas thank 165 00:09:41,559 --> 00:10:00,520 Speaker 1: you right now. Buffeted against all of this mark market 166 00:10:00,559 --> 00:10:05,880 Speaker 1: angst are the distractions of politics. Rosalind Matheson is with 167 00:10:05,960 --> 00:10:08,880 Speaker 1: us right now and the problem with her title, John, 168 00:10:08,880 --> 00:10:13,559 Speaker 1: And she's International Government Executive Editor, which means she is 169 00:10:13,600 --> 00:10:17,559 Speaker 1: focused with her team on China, focused on impeachment and 170 00:10:17,720 --> 00:10:21,520 Speaker 1: all that's going on in Washington, many other issues as well, John, 171 00:10:21,520 --> 00:10:24,800 Speaker 1: Why don't you bring in Rosalind on the Prime Minister 172 00:10:25,240 --> 00:10:28,480 Speaker 1: speaking to the North. Is the speech different John, if 173 00:10:28,520 --> 00:10:31,600 Speaker 1: it's given in Manchester the London, Now it shouldn't be. 174 00:10:32,040 --> 00:10:34,319 Speaker 1: It shouldn't make a difference. Let's bring in Roslyn, shall we? 175 00:10:34,400 --> 00:10:36,559 Speaker 1: Good morning to Roslyn. Let's just start with the Prime Minister. 176 00:10:36,600 --> 00:10:38,240 Speaker 1: The rule book for how this usually works is that 177 00:10:38,280 --> 00:10:41,200 Speaker 1: they come up with the proposal, starting rallies. Then the 178 00:10:41,240 --> 00:10:44,120 Speaker 1: Irish throw a cold glass of water over the proposal. 179 00:10:44,400 --> 00:10:46,559 Speaker 1: Then Stirling sounds off again. Walk me through what the 180 00:10:46,559 --> 00:10:49,400 Speaker 1: proposal is this time and where ultimately the EU and 181 00:10:49,440 --> 00:10:52,280 Speaker 1: the Irish stand on it. Well, yeah, so he's just 182 00:10:52,320 --> 00:10:55,040 Speaker 1: actually finishing his speech. We can see him on television 183 00:10:55,040 --> 00:10:58,880 Speaker 1: now to rapturous scenes in Manchester to the party faithful 184 00:10:59,040 --> 00:11:02,080 Speaker 1: um where he talked about brexfit Brexit, but mostly about 185 00:11:02,120 --> 00:11:06,320 Speaker 1: everything else. His proposal is really quite different from what 186 00:11:06,360 --> 00:11:09,640 Speaker 1: the Europeans have been putting forward. He's saying that he 187 00:11:09,679 --> 00:11:12,560 Speaker 1: wants to keep Northern Ireland, which is the key question 188 00:11:12,640 --> 00:11:15,280 Speaker 1: here and all of the Brexit negotiations in a customs 189 00:11:15,360 --> 00:11:19,880 Speaker 1: union with the UK, therefore creating a border with here, 190 00:11:19,920 --> 00:11:23,160 Speaker 1: a through through which goods would have to move. European 191 00:11:23,160 --> 00:11:26,960 Speaker 1: objective is obviously to prevent hard border on Ireland and 192 00:11:27,040 --> 00:11:30,280 Speaker 1: preserve a single market for things to move through easily. 193 00:11:30,400 --> 00:11:34,120 Speaker 1: So his proposal is quite different. The Europeans are saying 194 00:11:34,120 --> 00:11:36,680 Speaker 1: they're going to look at it objectively. He's going to 195 00:11:36,720 --> 00:11:40,120 Speaker 1: speak with the European Commission President tonight on the phone. 196 00:11:40,160 --> 00:11:42,160 Speaker 1: Has already been hitting the phones to the leaders around 197 00:11:42,240 --> 00:11:44,880 Speaker 1: Europe trying to sell this thing to them. The Irish 198 00:11:44,880 --> 00:11:47,040 Speaker 1: have come out very quickly as you can imagine, and 199 00:11:47,080 --> 00:11:49,920 Speaker 1: said they're extremely concerned about it. So he's going to 200 00:11:49,960 --> 00:11:51,400 Speaker 1: have a hard job ahead of him trying to get 201 00:11:51,400 --> 00:11:54,559 Speaker 1: any traction on this one. What a relations like between 202 00:11:54,559 --> 00:11:57,240 Speaker 1: the Irish and the UK government right now. There were 203 00:11:57,280 --> 00:12:00,280 Speaker 1: reports that the British government actually briefed the Irish today. 204 00:12:00,320 --> 00:12:02,680 Speaker 1: In fact, the Irish were the only EU nation that 205 00:12:02,720 --> 00:12:05,000 Speaker 1: were briefed on the proposal from the Prime Minister before 206 00:12:05,040 --> 00:12:07,800 Speaker 1: today's address, and that the Irish leaked it. That's the 207 00:12:07,840 --> 00:12:11,520 Speaker 1: accusation from some quarters in Britain right now. What do 208 00:12:11,559 --> 00:12:12,680 Speaker 1: you make of that and what does it mean for 209 00:12:12,720 --> 00:12:16,480 Speaker 1: relations between the two countries. Well, at least there's certainly 210 00:12:16,520 --> 00:12:20,079 Speaker 1: been an appetite for dialogue between the Irish and between 211 00:12:20,120 --> 00:12:22,680 Speaker 1: the British government. We've seen Boris Johnson go to meetings 212 00:12:22,720 --> 00:12:25,839 Speaker 1: there repeatedly, stand up together on podiums and have press 213 00:12:25,880 --> 00:12:29,800 Speaker 1: conferences afterward, where the rhetoric has been quite warm. The 214 00:12:29,800 --> 00:12:31,839 Speaker 1: problem is that neither side will want to move on this, 215 00:12:32,240 --> 00:12:34,839 Speaker 1: and Boris Johnson is animate. But if he doesn't get 216 00:12:34,840 --> 00:12:36,720 Speaker 1: the deal, if he doesn't get the deal he wants 217 00:12:37,240 --> 00:12:40,080 Speaker 1: in nine days from now October eleven, and he's going 218 00:12:40,120 --> 00:12:42,480 Speaker 1: to move forward and crash out. And he's just said 219 00:12:42,520 --> 00:12:44,560 Speaker 1: that he's not going to budge on that. So what 220 00:12:44,600 --> 00:12:48,560 Speaker 1: we've got is too polite but sort of immovable forces 221 00:12:48,600 --> 00:12:50,880 Speaker 1: staring at each other right now. And no one willing 222 00:12:50,880 --> 00:12:52,880 Speaker 1: to give in the ground, Rosalind, Can I ask the 223 00:12:52,960 --> 00:12:56,439 Speaker 1: dumb foreign question, does he want this to fail on purpose? 224 00:12:58,120 --> 00:13:01,800 Speaker 1: There's certainly a narrative around those lines. What he's doing 225 00:13:01,880 --> 00:13:04,000 Speaker 1: is he's saying this is it or nothing. He's hoping 226 00:13:04,040 --> 00:13:07,719 Speaker 1: perhaps that his strong approach and they're running down of 227 00:13:07,760 --> 00:13:10,280 Speaker 1: the clock will just force a deal to happen. There's 228 00:13:10,280 --> 00:13:12,360 Speaker 1: also a school of thought that what he really wants 229 00:13:12,400 --> 00:13:13,920 Speaker 1: to be able to go out to the British people 230 00:13:13,920 --> 00:13:16,840 Speaker 1: and say, look, I tried everything to give you brexit. 231 00:13:16,920 --> 00:13:19,320 Speaker 1: Parliament got my way, the Europeans got my way, the 232 00:13:19,360 --> 00:13:21,880 Speaker 1: Irish got my way. Therefore I need to have an election. 233 00:13:21,960 --> 00:13:23,880 Speaker 1: The need to give me a big, big mandate so 234 00:13:23,920 --> 00:13:25,720 Speaker 1: I can come back and deliver for you. So the 235 00:13:25,760 --> 00:13:28,040 Speaker 1: mandate that the narrative would be that I tried everything, 236 00:13:28,080 --> 00:13:31,120 Speaker 1: but I was stopped at every turn. Can baby Charley vote? 237 00:13:31,520 --> 00:13:34,160 Speaker 1: Can baby Charley? Baby Charlie's gotta wait until he's a 238 00:13:34,160 --> 00:13:37,720 Speaker 1: little bit older. We gotta wait for that. Were with 239 00:13:37,840 --> 00:13:40,200 Speaker 1: Uncle John here in New York, continued Rosslyn. Just to 240 00:13:40,200 --> 00:13:42,280 Speaker 1: wrap things up with you, how is this planing go 241 00:13:42,280 --> 00:13:44,640 Speaker 1: out in the court of public opinion? With the electorate 242 00:13:44,920 --> 00:13:47,119 Speaker 1: at the moment. This has quite clearly been a strategy 243 00:13:47,480 --> 00:13:50,600 Speaker 1: of Mr Cummings and Prime Minister Johnson to make out 244 00:13:50,640 --> 00:13:54,480 Speaker 1: that everyone else is the reason that Brexit isn't going 245 00:13:54,520 --> 00:13:58,480 Speaker 1: through the institutions, the Court, Parliament, the EU, the Irish. 246 00:13:58,720 --> 00:14:04,080 Speaker 1: How successful are they pushing that agenda. Well, certainly we've 247 00:14:04,120 --> 00:14:08,679 Speaker 1: just seen very rapturous scenes in Manchester, loud applause, backslapping, 248 00:14:08,720 --> 00:14:10,640 Speaker 1: all that kind of stuff. That is the party faithful. 249 00:14:11,000 --> 00:14:12,840 Speaker 1: The thing for us is to not to presume to 250 00:14:12,840 --> 00:14:16,720 Speaker 1: know how people outside London, for example, feeling there's a 251 00:14:16,760 --> 00:14:20,040 Speaker 1: strong basis support in rural areas for Boris Johnson, a 252 00:14:20,080 --> 00:14:22,880 Speaker 1: strong basis support for making the Tories great again. There, 253 00:14:22,920 --> 00:14:25,560 Speaker 1: I say, that's the manager he's been pushing and people 254 00:14:25,600 --> 00:14:27,840 Speaker 1: out there who really want to see Brexit done. Um. 255 00:14:27,920 --> 00:14:30,920 Speaker 1: So it's quite possible that his tactics here have quite 256 00:14:30,920 --> 00:14:33,160 Speaker 1: a lot of support. UM. And we'd be careful not 257 00:14:33,200 --> 00:14:36,000 Speaker 1: to presume to know how an election might play out. 258 00:14:36,560 --> 00:14:39,120 Speaker 1: UM in London, Rose and we got to leave it 259 00:14:39,120 --> 00:14:41,800 Speaker 1: there to you in our government team worldwide. Thank you 260 00:14:41,880 --> 00:14:44,240 Speaker 1: so much, thank you for reporting there's a little bit 261 00:14:44,280 --> 00:15:02,440 Speaker 1: going on, John Stolphus with us without this is an 262 00:15:02,440 --> 00:15:05,480 Speaker 1: important update because we've been John and I've really been 263 00:15:05,520 --> 00:15:08,200 Speaker 1: focused on the bond market and the dynamics there, and 264 00:15:08,240 --> 00:15:11,760 Speaker 1: it's good to talk to John Stolphus about equities. For John, 265 00:15:12,000 --> 00:15:15,520 Speaker 1: let's begin with your decades of experience with the absolute 266 00:15:15,640 --> 00:15:20,360 Speaker 1: mystery of October revenue and earning seasons. Do you have 267 00:15:20,440 --> 00:15:24,080 Speaker 1: a clue what we're gonna see? Well, we'd have to 268 00:15:24,200 --> 00:15:26,479 Speaker 1: We'd have to think we're going to get a repetition 269 00:15:26,760 --> 00:15:30,320 Speaker 1: of what we have seen in the last few quarters, 270 00:15:30,440 --> 00:15:34,080 Speaker 1: and that we think that estimates are low enough at 271 00:15:34,120 --> 00:15:37,360 Speaker 1: this point, have been brought down enough, and there's been 272 00:15:37,480 --> 00:15:42,040 Speaker 1: enough guidance from corporate chieftains that things are are are 273 00:15:42,160 --> 00:15:46,720 Speaker 1: decidedly challenged in many uh ways by the trade war 274 00:15:47,400 --> 00:15:52,080 Speaker 1: that expectations are likely to be beat once again. How 275 00:15:52,120 --> 00:15:55,000 Speaker 1: long this can land second year of the trade war 276 00:15:55,120 --> 00:15:58,200 Speaker 1: with the potential for acceleration. If we've seen a re 277 00:15:58,320 --> 00:16:01,000 Speaker 1: rating in the last twenty four hours towards rate cut 278 00:16:01,000 --> 00:16:03,320 Speaker 1: and the way this curve is deepening and all that, 279 00:16:03,840 --> 00:16:06,640 Speaker 1: how much weight do you put in the flip reciprocal 280 00:16:07,160 --> 00:16:11,560 Speaker 1: of the yield market out to higher equity valuations? Do 281 00:16:11,880 --> 00:16:13,680 Speaker 1: is there any weight to that? Or do you ignore 282 00:16:13,720 --> 00:16:17,160 Speaker 1: that right now, we've we've we've got to think that 283 00:16:17,200 --> 00:16:21,239 Speaker 1: you know where interest grates are today from a historical perspective, 284 00:16:21,360 --> 00:16:25,680 Speaker 1: would indicate that equities are not overpriced. The The other 285 00:16:25,760 --> 00:16:29,280 Speaker 1: thing is the demand for equities is just likely to 286 00:16:29,440 --> 00:16:34,120 Speaker 1: increase as the baby boomer generation begins to actually retire 287 00:16:34,320 --> 00:16:38,160 Speaker 1: and recognize that they they need vehicles that offer more 288 00:16:38,200 --> 00:16:41,520 Speaker 1: than a very slight coupon and need to at least 289 00:16:41,520 --> 00:16:43,640 Speaker 1: have if they can if they when when they can 290 00:16:43,680 --> 00:16:47,600 Speaker 1: find good companies, the potential for capital appreciation, the total 291 00:16:47,640 --> 00:16:51,480 Speaker 1: return dividend growth story might make sense. Equities have support 292 00:16:51,560 --> 00:16:53,960 Speaker 1: moving forward. From what we can tell, John, I want 293 00:16:53,960 --> 00:16:56,640 Speaker 1: to stay out there in and work through the growth 294 00:16:56,640 --> 00:17:01,160 Speaker 1: scares of the past with you. Twelve back into the 295 00:17:01,240 --> 00:17:04,040 Speaker 1: year after a growth scare has been pretty good, pretty 296 00:17:04,080 --> 00:17:07,399 Speaker 1: kind to invest us in this cycle. So after the 297 00:17:07,400 --> 00:17:12,880 Speaker 1: eleven twelve growth scare, stocks up almost after the fifteen 298 00:17:12,920 --> 00:17:17,399 Speaker 1: sixteen growth scare, stocks up in more than nine percent. 299 00:17:17,760 --> 00:17:20,800 Speaker 1: We're working our way through this eighteen nineteen growth scare. 300 00:17:20,880 --> 00:17:23,560 Speaker 1: Every year, of course, is different, John. We had our 301 00:17:23,600 --> 00:17:26,920 Speaker 1: moments in seventeen which were largely about anticipating in a 302 00:17:27,000 --> 00:17:29,919 Speaker 1: rate cut, but looking out to twenty. How much harder 303 00:17:29,960 --> 00:17:32,919 Speaker 1: is it to make the call buy stocks off the 304 00:17:32,920 --> 00:17:36,000 Speaker 1: back of the growth scare when we're already up nineteen 305 00:17:36,040 --> 00:17:39,840 Speaker 1: percent this year. Well, I've got to say this. I 306 00:17:40,359 --> 00:17:42,879 Speaker 1: think what we're the wonderful thing is that we really 307 00:17:42,920 --> 00:17:47,359 Speaker 1: are only up zero point three from the high that 308 00:17:47,400 --> 00:17:50,879 Speaker 1: we've reached on September twentieth of last year. So so 309 00:17:50,960 --> 00:17:56,399 Speaker 1: far this year. It doesn't take into account if you 310 00:17:56,480 --> 00:17:58,680 Speaker 1: just look at where the year to day is. The 311 00:17:58,720 --> 00:18:01,920 Speaker 1: devastation that are in the fourth quarter, which we thought 312 00:18:02,040 --> 00:18:04,679 Speaker 1: was fairly unreasonable. It was like a muggy there there was. 313 00:18:05,119 --> 00:18:08,480 Speaker 1: It was an overreaction and negative projection that we saw. 314 00:18:08,520 --> 00:18:10,520 Speaker 1: They brought the markets down as sharp music in the 315 00:18:10,560 --> 00:18:14,160 Speaker 1: fourth quarter last year. That haven't been realized yet. Yeah, John, 316 00:18:14,200 --> 00:18:16,040 Speaker 1: one of your charms at up COD as you can 317 00:18:16,080 --> 00:18:18,600 Speaker 1: really talk easily about the big banks because you're not 318 00:18:18,720 --> 00:18:21,399 Speaker 1: with a big bank. Give us your thoughts about the 319 00:18:21,440 --> 00:18:24,679 Speaker 1: big banks. John Ferrell's noted their movement this year. Is 320 00:18:24,680 --> 00:18:29,399 Speaker 1: it done? We wouldn't think so. We think that the 321 00:18:29,400 --> 00:18:31,320 Speaker 1: big banks, and we think the big banks are in 322 00:18:31,440 --> 00:18:35,399 Speaker 1: alpha call. So it's it's on an individual stock picking 323 00:18:35,440 --> 00:18:38,359 Speaker 1: basis rather than on a on a beta or a 324 00:18:38,920 --> 00:18:42,000 Speaker 1: or you know an index called a sector index, call 325 00:18:42,119 --> 00:18:44,840 Speaker 1: for that. But within the big banks, the reality is 326 00:18:44,920 --> 00:18:48,359 Speaker 1: these guys don't pay. They pay next to nothing on deposits. 327 00:18:48,920 --> 00:18:52,800 Speaker 1: They have credit cards. Uh, interest rates that that looked 328 00:18:52,840 --> 00:18:55,920 Speaker 1: like it's the late seventies or early eighties when they 329 00:18:56,040 --> 00:19:00,879 Speaker 1: charge on on on on balances. So we have to 330 00:19:00,880 --> 00:19:04,280 Speaker 1: say and and and evidences from earnings that or they 331 00:19:04,320 --> 00:19:08,520 Speaker 1: may not get it from trading. Uh. The the lending 332 00:19:08,720 --> 00:19:12,520 Speaker 1: business is in good shape. The wages are still rising, 333 00:19:12,960 --> 00:19:15,200 Speaker 1: so we'd have to think we like that. It's our 334 00:19:15,240 --> 00:19:18,680 Speaker 1: contrarian pick among the cyclical sectors that we like, john 335 00:19:18,800 --> 00:19:21,120 Speaker 1: Why is it so disliked still? Even though we've had 336 00:19:21,160 --> 00:19:24,080 Speaker 1: some pretty solid performance from that sector this year, just 337 00:19:24,080 --> 00:19:26,040 Speaker 1: looking at some of the big names, the likes of City, 338 00:19:26,080 --> 00:19:29,600 Speaker 1: they've delivered some really strong gains through nineteen and yet 339 00:19:29,600 --> 00:19:32,480 Speaker 1: when you ask people about financials, they pull a face 340 00:19:32,520 --> 00:19:34,960 Speaker 1: as if they have performed terribly over the last six 341 00:19:35,000 --> 00:19:38,560 Speaker 1: to nine months. You know, Jonathan, It's it's just it 342 00:19:38,600 --> 00:19:41,199 Speaker 1: really shows human nature, I think in many ways. And 343 00:19:41,240 --> 00:19:44,040 Speaker 1: it's just it's one of those sectors we would think 344 00:19:44,440 --> 00:19:47,440 Speaker 1: that is you you buy when they're not popular so 345 00:19:47,600 --> 00:19:50,000 Speaker 1: that you don't have to chase them later when finally 346 00:19:50,240 --> 00:19:54,320 Speaker 1: the realization comes in that these things are what makes 347 00:19:54,440 --> 00:19:57,639 Speaker 1: everything move. Everything floats on credit. As long as the 348 00:19:57,680 --> 00:20:01,160 Speaker 1: bond market is in real trouble, these these are are 349 00:20:01,240 --> 00:20:05,960 Speaker 1: likely to essentially fund the system. Yeah, the real bug 350 00:20:05,960 --> 00:20:08,480 Speaker 1: of who here is the trade war. That's that's the 351 00:20:08,520 --> 00:20:13,560 Speaker 1: problems the tariffs. Otherwise we were in economic recovery globally 352 00:20:13,720 --> 00:20:17,360 Speaker 1: before March of John, very quick clear, this came up yesterday. 353 00:20:17,359 --> 00:20:21,520 Speaker 1: If the trade war is cleared, who benefits emerging market, 354 00:20:21,560 --> 00:20:26,359 Speaker 1: international stocks or US large caps? We think all do 355 00:20:26,560 --> 00:20:29,080 Speaker 1: because we think with if we've got to deal with 356 00:20:29,080 --> 00:20:33,159 Speaker 1: with China, the dollar moves, lower, currencies outside of the 357 00:20:33,280 --> 00:20:37,160 Speaker 1: US rise on expectations and increased growth of negative over 358 00:20:37,560 --> 00:20:40,560 Speaker 1: the trade war removed. We think it's emerging, we think 359 00:20:40,560 --> 00:20:44,640 Speaker 1: it's developed international, and the US would would would participate 360 00:20:44,680 --> 00:20:47,480 Speaker 1: in that. Very good, John Stolphine, thank you so much. 361 00:20:47,480 --> 00:21:03,480 Speaker 1: With OpCo, there's some enthusiasm on the equity Marcus. Right now, 362 00:21:04,119 --> 00:21:06,640 Speaker 1: Andrew Holland Hohorst with this US A City group. These 363 00:21:06,640 --> 00:21:10,080 Speaker 1: are chief US economists. What is the distinctive feature for 364 00:21:10,119 --> 00:21:13,400 Speaker 1: you right now? In the classic US equation. Why will 365 00:21:13,400 --> 00:21:16,640 Speaker 1: see plus I plus G plus n X. What matters 366 00:21:16,680 --> 00:21:20,000 Speaker 1: to Andrew holland Horst, Well, I think they all matter, Tom. 367 00:21:20,040 --> 00:21:22,960 Speaker 1: But what we have been looking at in terms of 368 00:21:22,960 --> 00:21:25,720 Speaker 1: the strength of this economy is see, we've seen consumption 369 00:21:25,760 --> 00:21:28,919 Speaker 1: that's really held up very very well, um, despite the 370 00:21:28,960 --> 00:21:31,320 Speaker 1: weakness that we're seeing in manufacturing, the weakness that we're 371 00:21:31,320 --> 00:21:33,879 Speaker 1: seeing in investment. So I think that's what we're watching 372 00:21:33,880 --> 00:21:37,440 Speaker 1: tables for. Does the strong labor market continue to drive 373 00:21:37,600 --> 00:21:40,480 Speaker 1: that consumption that that can't be permanent? I mean, if 374 00:21:40,560 --> 00:21:43,960 Speaker 1: you know consumption six eight or sixty nine, once in 375 00:21:43,960 --> 00:21:47,040 Speaker 1: a while, it's seventy of the American economy. You know 376 00:21:47,160 --> 00:21:51,840 Speaker 1: there's dynamics here, folks. Is there a permanence to consumption alone? 377 00:21:53,160 --> 00:21:55,600 Speaker 1: So I think you have to put in the bottom 378 00:21:55,640 --> 00:21:57,959 Speaker 1: on some of the weakness that we've seen in the 379 00:21:57,960 --> 00:22:01,480 Speaker 1: industrial sector. Um, when you see I S M manufacturing 380 00:22:01,520 --> 00:22:04,959 Speaker 1: at forty seven point eight, that's a concerning number, and 381 00:22:05,000 --> 00:22:07,520 Speaker 1: that confirms you about is this going to spill over 382 00:22:07,520 --> 00:22:09,720 Speaker 1: into the broader economy? Is this going to cause consumptions 383 00:22:09,720 --> 00:22:11,800 Speaker 1: to slow as well? Um? If this can kind of 384 00:22:11,840 --> 00:22:16,320 Speaker 1: stabilize here, thenteen can look like twenty sixteen, we got 385 00:22:16,320 --> 00:22:20,240 Speaker 1: down to on the manufacturing index, and then we kind 386 00:22:20,240 --> 00:22:22,840 Speaker 1: of bottomed out and turned back around and we continued 387 00:22:22,880 --> 00:22:25,400 Speaker 1: with this story of strong consumptions. I think that can 388 00:22:25,440 --> 00:22:28,119 Speaker 1: happen again, but I would agree that we need to 389 00:22:28,119 --> 00:22:30,520 Speaker 1: see at least some bottom here in terms of what's 390 00:22:30,520 --> 00:22:32,320 Speaker 1: going on in the industrial side. It's the theme and 391 00:22:32,440 --> 00:22:34,280 Speaker 1: two that's come up again and again and again on 392 00:22:34,280 --> 00:22:36,400 Speaker 1: this program over the last couple of weeks. The three 393 00:22:36,400 --> 00:22:38,760 Speaker 1: growth scares that we've had, the current one, the fifteen 394 00:22:38,840 --> 00:22:42,280 Speaker 1: sixteen one, and the one back in twelve. And do 395 00:22:42,400 --> 00:22:44,680 Speaker 1: every growth scare is different. All three have been led 396 00:22:44,680 --> 00:22:48,600 Speaker 1: by manufacturing. Just how different is this one? Though? I 397 00:22:48,640 --> 00:22:52,080 Speaker 1: think this one is different? Um in some ways it's 398 00:22:52,160 --> 00:22:55,960 Speaker 1: harder to attribute. This is something that's transitory. Sixteen. I 399 00:22:55,960 --> 00:22:58,280 Speaker 1: think you could see what had happened with oil prices. 400 00:22:58,320 --> 00:23:02,000 Speaker 1: You've seen a US economy that was very oriented towards 401 00:23:02,000 --> 00:23:05,359 Speaker 1: investment in oil and energy related industries um and this 402 00:23:05,400 --> 00:23:08,200 Speaker 1: slowdown an investment has been more broad based and it's 403 00:23:08,240 --> 00:23:10,800 Speaker 1: more a symptom of the global slowdown. So I think 404 00:23:10,960 --> 00:23:12,919 Speaker 1: that's what's a little bit more concerning here. If the 405 00:23:12,920 --> 00:23:16,080 Speaker 1: global growth story continues to worse it. It does sm 406 00:23:16,119 --> 00:23:19,000 Speaker 1: with each data print, it does worsen. Um. Then you know, 407 00:23:19,040 --> 00:23:21,520 Speaker 1: it's harder and harder to see how the US goes 408 00:23:21,520 --> 00:23:24,320 Speaker 1: it alone. And we are saying that there's been these 409 00:23:24,359 --> 00:23:27,680 Speaker 1: times in the recent tumultuous months where the weather vein 410 00:23:27,840 --> 00:23:31,199 Speaker 1: changes and maybe that happened yesterday off US data, and 411 00:23:31,240 --> 00:23:35,360 Speaker 1: today the German forecast is well and it's it's it's 412 00:23:35,359 --> 00:23:40,120 Speaker 1: exposed shown in curve steepening. And then in this case 413 00:23:40,160 --> 00:23:41,840 Speaker 1: it's where the two year yield comes in. And I 414 00:23:41,880 --> 00:23:43,919 Speaker 1: don't want you to be bond guy from City Group, 415 00:23:44,480 --> 00:23:47,240 Speaker 1: but are we going to revisit a whole new round 416 00:23:48,000 --> 00:23:51,200 Speaker 1: of guessing the number of rate cuts by this Fed 417 00:23:51,320 --> 00:23:54,720 Speaker 1: Central Bank? Yeah? I think after the number yesterday, we're 418 00:23:54,840 --> 00:23:57,720 Speaker 1: back in that mode. We're back in that mode, thank you. Yeah, 419 00:23:57,760 --> 00:24:01,040 Speaker 1: you can see that the pricing of October going up again. Um. 420 00:24:01,240 --> 00:24:04,080 Speaker 1: And so you know, let's see what happens with iyets'm 421 00:24:04,119 --> 00:24:06,800 Speaker 1: non manufacturing. Let's see, let's see what happens with payrolls 422 00:24:06,800 --> 00:24:08,919 Speaker 1: for the said it really is going to defend one. 423 00:24:09,040 --> 00:24:11,760 Speaker 1: Do you see this building over more broadly and still 424 00:24:11,800 --> 00:24:15,200 Speaker 1: it's pretty isolated in manufacturing as of today, Um, well, 425 00:24:15,200 --> 00:24:18,560 Speaker 1: we'll see what the numbers bring well. And the other 426 00:24:18,600 --> 00:24:20,359 Speaker 1: question is whether you should wait if you're on the 427 00:24:20,359 --> 00:24:22,160 Speaker 1: federal reserve, if you wait for it to show up 428 00:24:22,160 --> 00:24:24,239 Speaker 1: in claims, if you wait for it to show up 429 00:24:24,240 --> 00:24:26,399 Speaker 1: in ours worked in the payrolls report, and that starts 430 00:24:26,440 --> 00:24:29,880 Speaker 1: to break down. You're a little light on't you. If 431 00:24:29,960 --> 00:24:31,760 Speaker 1: you want to be early, you want to be aggressive. 432 00:24:31,800 --> 00:24:33,399 Speaker 1: I think that they've tried to do that with the 433 00:24:33,480 --> 00:24:36,119 Speaker 1: rate cuts they've delivered so far, since arguably we hadn't 434 00:24:36,160 --> 00:24:38,920 Speaker 1: seen that much weakness in the domestic data. Now you're 435 00:24:38,920 --> 00:24:41,000 Speaker 1: really running into the problem of you want to be 436 00:24:41,040 --> 00:24:43,200 Speaker 1: early and aggressive, but you have limited policy room. There's 437 00:24:43,200 --> 00:24:45,680 Speaker 1: only so much room to cut, so you know, you're 438 00:24:45,720 --> 00:24:50,119 Speaker 1: kind of walking that fine line between delivering enough or 439 00:24:50,400 --> 00:24:52,679 Speaker 1: over delivering and then maybe ending up with fewer bullets 440 00:24:52,720 --> 00:24:54,200 Speaker 1: when you wish you had them. And then they face 441 00:24:54,280 --> 00:24:56,400 Speaker 1: a ton of questions about the efficacy of the policy 442 00:24:56,400 --> 00:24:59,080 Speaker 1: they are deploying, Andrew whether rate cuts in this environment 443 00:24:59,400 --> 00:25:02,800 Speaker 1: actually how day that? Yeah, So we're seeing some effect 444 00:25:02,840 --> 00:25:04,360 Speaker 1: in the housing market. I think you've seen the most 445 00:25:04,359 --> 00:25:06,840 Speaker 1: recent data a little bit firmer, and that's an effect 446 00:25:06,840 --> 00:25:09,000 Speaker 1: of lower rates. But you know where you'd really like 447 00:25:09,119 --> 00:25:11,880 Speaker 1: to see this as stronger business investment. And I think 448 00:25:11,880 --> 00:25:14,359 Speaker 1: there's very little evidence right now that lower rates are 449 00:25:14,359 --> 00:25:16,439 Speaker 1: actually causing any kind of you know, pick up in 450 00:25:16,440 --> 00:25:18,960 Speaker 1: that activity. Nice Prett. Andre Hollander's thank you so much 451 00:25:18,960 --> 00:25:37,760 Speaker 1: with City Group today and it is an extraordinary set 452 00:25:37,880 --> 00:25:42,720 Speaker 1: of interviews. Mr Rubinstein with a gentle lady who is 453 00:25:42,800 --> 00:25:48,240 Speaker 1: polarizing across America. Here's David Rubinstein with a subtle question 454 00:25:48,760 --> 00:25:52,160 Speaker 1: for Ruth Bader Ginsburg. How does it feel to get 455 00:25:52,200 --> 00:25:56,159 Speaker 1: up in the morning and know that three million Americans 456 00:25:56,200 --> 00:25:58,040 Speaker 1: want to know the state of your health that day? 457 00:26:00,119 --> 00:26:08,520 Speaker 1: Does it feel encouraging? As Kansas survivors know that dread 458 00:26:08,560 --> 00:26:11,919 Speaker 1: disease is a challenge, and it helps to know that 459 00:26:12,000 --> 00:26:21,200 Speaker 1: people are rooting for you. Now, it's not universal. When 460 00:26:21,240 --> 00:26:24,119 Speaker 1: I had Peggy had a cancer in two thousand nine, 461 00:26:25,240 --> 00:26:29,040 Speaker 1: there was a senator whose name I don't recall, but 462 00:26:29,119 --> 00:26:34,639 Speaker 1: he said I would be dead within six months. That 463 00:26:34,840 --> 00:26:43,960 Speaker 1: senator is now no longer alive. But you can't remember 464 00:26:44,040 --> 00:26:48,280 Speaker 1: his name. No, I don't remember you, um, but your 465 00:26:48,280 --> 00:26:51,240 Speaker 1: current view is that as long as you're healthy and 466 00:26:51,359 --> 00:26:53,840 Speaker 1: able to do the job, you intend to stay on 467 00:26:53,880 --> 00:26:57,479 Speaker 1: the Court. Is that correct, as long as I'm healthy 468 00:26:58,200 --> 00:27:05,320 Speaker 1: and mentally agile. Right, And the tone there of a 469 00:27:05,320 --> 00:27:08,280 Speaker 1: gentle lady of a certain vintage joining us now with 470 00:27:08,400 --> 00:27:10,520 Speaker 1: his peer to peer and again doing it wonderfully with 471 00:27:10,600 --> 00:27:15,480 Speaker 1: Ruth Bader Ginsburg, David Rubinstein, David, congratulations on a wonderful interview. 472 00:27:15,800 --> 00:27:17,840 Speaker 1: Let me start with the other side and some of 473 00:27:17,880 --> 00:27:22,880 Speaker 1: the humor there. Why should conservatives, why should originalists? Why 474 00:27:22,920 --> 00:27:26,320 Speaker 1: should those of a camp of Justice Scalia? Why should 475 00:27:26,320 --> 00:27:30,880 Speaker 1: they listen to this conversation with RBG? Well, first of all, 476 00:27:31,600 --> 00:27:35,320 Speaker 1: HERBG was a very good friend of Justice Scalia and Uh. 477 00:27:35,359 --> 00:27:37,760 Speaker 1: And there's a conversation that I had with her about 478 00:27:37,760 --> 00:27:40,480 Speaker 1: how they became such good friends, sharing their interests in 479 00:27:40,520 --> 00:27:43,760 Speaker 1: opera even though they disagreed a great deal on legal matters. 480 00:27:44,200 --> 00:27:46,879 Speaker 1: I think she's a historic figure. She is the second 481 00:27:46,920 --> 00:27:49,520 Speaker 1: woman on the Supreme Court of the United States, and 482 00:27:49,680 --> 00:27:52,000 Speaker 1: we'll have served longer on the Supreme Court than any 483 00:27:52,040 --> 00:27:56,040 Speaker 1: other woman. She's serving longer than uh, than Sandra Day O'Connor, 484 00:27:56,400 --> 00:27:59,600 Speaker 1: and she's become a rock star, as you may have 485 00:27:59,640 --> 00:28:02,400 Speaker 1: seen it. To Day's New York Times, Tom Freeman's column 486 00:28:02,640 --> 00:28:05,320 Speaker 1: basically talks about my introducing her at a recent Kennedy 487 00:28:05,359 --> 00:28:07,159 Speaker 1: Center event, and she got a standing ovation over the 488 00:28:07,160 --> 00:28:12,320 Speaker 1: weekend because of the things she stands for. A woman 489 00:28:12,320 --> 00:28:16,119 Speaker 1: who really led the charge for equality and gender equality 490 00:28:16,119 --> 00:28:19,080 Speaker 1: and the leal in the law, a woman who's battled 491 00:28:19,320 --> 00:28:22,679 Speaker 1: three bouts of cancer and still survived and living on 492 00:28:22,720 --> 00:28:25,760 Speaker 1: the Supreme Court doing quite well. So I think people 493 00:28:25,800 --> 00:28:28,280 Speaker 1: admire her in many ways. And she's obviously a very 494 00:28:28,359 --> 00:28:30,800 Speaker 1: very smart person, top of her class at Harvard Law 495 00:28:30,800 --> 00:28:34,159 Speaker 1: School and Columbia Law School. Uh, successful marriage for more 496 00:28:34,200 --> 00:28:37,480 Speaker 1: than fifty years to a great tax lawyer who's unfortunately 497 00:28:37,520 --> 00:28:41,040 Speaker 1: passed away, and h a person had that many women 498 00:28:41,160 --> 00:28:44,280 Speaker 1: really admire for, and and and men as well. Meyer 499 00:28:44,400 --> 00:28:50,280 Speaker 1: for her her intellect, her gumption, her um overcoming physical problems. 500 00:28:50,840 --> 00:28:53,840 Speaker 1: I think she's, you know, the notorious RBG, as she's 501 00:28:53,840 --> 00:28:57,240 Speaker 1: been called. David. How does Justice Ginsburg feel about the 502 00:28:57,560 --> 00:29:01,200 Speaker 1: perhaps politiciz politicization of a court given some of the 503 00:29:01,280 --> 00:29:05,440 Speaker 1: recent appointments to the court. Well, she's not going to 504 00:29:05,680 --> 00:29:08,760 Speaker 1: comment on that directly, and did not. I mean she 505 00:29:09,000 --> 00:29:13,400 Speaker 1: just you know, when you were um a Supreme Court justice, 506 00:29:14,200 --> 00:29:16,720 Speaker 1: people don't usually ask you questions that you have to 507 00:29:16,800 --> 00:29:20,040 Speaker 1: answer she can deflect them, and and she deflected things 508 00:29:20,120 --> 00:29:22,520 Speaker 1: like that. But I think you know, generally her view 509 00:29:22,600 --> 00:29:26,800 Speaker 1: is that the court. I'm speaking by my senses that 510 00:29:26,880 --> 00:29:29,920 Speaker 1: she that the Court has been probably been somewhat more 511 00:29:29,920 --> 00:29:33,200 Speaker 1: politicized than she would prefer, not for for anything that 512 00:29:33,240 --> 00:29:35,400 Speaker 1: the justice have done, but just the way that the 513 00:29:35,440 --> 00:29:40,640 Speaker 1: confirmation processes work. Her confirmation process was not as um 514 00:29:40,880 --> 00:29:45,920 Speaker 1: confrontational as something we've seen recently. Yes, Sunstein in his 515 00:29:46,080 --> 00:29:50,280 Speaker 1: wonderful book Impeachment, takes an interlude David Rubinstein in the 516 00:29:50,320 --> 00:29:53,400 Speaker 1: middle of the book, and the Harvard law professor says, Okay, 517 00:29:53,480 --> 00:29:56,560 Speaker 1: here's the originalists, and here's the few shades of originalist, 518 00:29:56,640 --> 00:30:00,960 Speaker 1: the conservatives, and here's the many shades of a more liberal, 519 00:30:01,040 --> 00:30:05,320 Speaker 1: more modern Supreme Court justice Buyer and in RBG in 520 00:30:05,360 --> 00:30:10,239 Speaker 1: the rest of them, define exactly her liberality is. She 521 00:30:10,320 --> 00:30:17,760 Speaker 1: contributes to American law? What what is the school of RBG. Well, remember, 522 00:30:17,920 --> 00:30:22,680 Speaker 1: she was criticized, as was Justice O'Connor by some for 523 00:30:22,840 --> 00:30:26,440 Speaker 1: say that they're incrementalists. In other words, there were some 524 00:30:26,480 --> 00:30:30,040 Speaker 1: women's groups that were not in favor of uh of 525 00:30:30,240 --> 00:30:33,280 Speaker 1: RBG getting onto Supreme Court because they said, not not 526 00:30:33,280 --> 00:30:36,080 Speaker 1: all but some women's groups said she wasn't strong enough 527 00:30:36,080 --> 00:30:38,920 Speaker 1: in supporting Roe v. Wade, and that's because she had 528 00:30:38,920 --> 00:30:42,040 Speaker 1: a different way to analyze that particular case. I think 529 00:30:42,080 --> 00:30:47,160 Speaker 1: that she's basically a very fastidious um student of the law, 530 00:30:47,240 --> 00:30:51,600 Speaker 1: a great law school student, and she believes in incremental change, 531 00:30:51,160 --> 00:30:54,959 Speaker 1: I believe, and therefore she may not be um, you know, 532 00:30:55,040 --> 00:30:58,240 Speaker 1: everybody's favorite justice in terms of doing all the things 533 00:30:58,240 --> 00:31:01,040 Speaker 1: that some of her support as would like her to do. 534 00:31:01,240 --> 00:31:04,440 Speaker 1: But I think she's well respected by other justices because 535 00:31:04,480 --> 00:31:07,080 Speaker 1: of the way she really analyzes the log and she 536 00:31:07,120 --> 00:31:10,760 Speaker 1: writes her opinions with great, great care. Um. She doesn't 537 00:31:10,800 --> 00:31:13,719 Speaker 1: have other people writing them. She writes the opinions and 538 00:31:13,800 --> 00:31:17,000 Speaker 1: she is They're very meticulous, and she's obviously writes a 539 00:31:17,000 --> 00:31:19,800 Speaker 1: lot of the sense. So, David, I know that Justice 540 00:31:19,840 --> 00:31:22,000 Speaker 1: Ginsburg has said that she plans on remaining on the 541 00:31:22,000 --> 00:31:24,600 Speaker 1: court as her health allows. But did she give you 542 00:31:24,640 --> 00:31:27,240 Speaker 1: a sense of kind of how she views her legacy. 543 00:31:27,360 --> 00:31:31,800 Speaker 1: She's had such a long tenure on the court. Um, 544 00:31:31,840 --> 00:31:35,240 Speaker 1: many people don't like to talk about their legacy while 545 00:31:35,320 --> 00:31:38,040 Speaker 1: they're still in a particular job, and she doesn't really 546 00:31:38,040 --> 00:31:39,840 Speaker 1: want to talk about it in quite that way, but 547 00:31:39,880 --> 00:31:42,080 Speaker 1: I think she will be she recognized that she'll be 548 00:31:42,120 --> 00:31:45,360 Speaker 1: seen as the second woman on the Supreme Court, as 549 00:31:45,400 --> 00:31:47,760 Speaker 1: I said, probably the longest serving woman to have served 550 00:31:47,800 --> 00:31:50,600 Speaker 1: on the Court. Uh, and she's seen as somebody that 551 00:31:51,560 --> 00:31:55,800 Speaker 1: rises above the view of most justice. Most justices are 552 00:31:55,840 --> 00:31:58,360 Speaker 1: not known by the public, but she is known by 553 00:31:58,360 --> 00:32:01,120 Speaker 1: the public and such a stent that she gets standing 554 00:32:01,120 --> 00:32:03,680 Speaker 1: ovations or where she goes. At the National Book Festival 555 00:32:03,720 --> 00:32:06,640 Speaker 1: this year, there were about twelve thousand people lined up 556 00:32:06,680 --> 00:32:09,480 Speaker 1: just to hear her talk about um, you know, her life. 557 00:32:09,800 --> 00:32:12,760 Speaker 1: And there are she does speaking events around the country 558 00:32:12,760 --> 00:32:15,120 Speaker 1: now and one in Kansas recently. I think she had 559 00:32:15,200 --> 00:32:18,000 Speaker 1: eighteen thousand people show up. So it's very unusual for 560 00:32:18,120 --> 00:32:21,280 Speaker 1: justice of the Supreme Court, many of whom are unrecognizable 561 00:32:21,360 --> 00:32:23,920 Speaker 1: to the public, they get that kind of attention. Harkens 562 00:32:23,960 --> 00:32:27,600 Speaker 1: back to Oliver Wendell Holmes. David Rubenstein again, congratulations, appear 563 00:32:27,640 --> 00:32:30,640 Speaker 1: to be your conversation. We're gonna do this across two 564 00:32:30,680 --> 00:32:36,200 Speaker 1: weeks with Ruth Vader Ginsburg. Thank you so much, David Rubinstein. 565 00:32:36,840 --> 00:32:41,080 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 566 00:32:41,120 --> 00:32:46,440 Speaker 1: listen to interviews on Apple podcasts, SoundCloud, or whichever podcast 567 00:32:46,480 --> 00:32:50,720 Speaker 1: platform you prefer. I'm on Twitter at Tom Keane Before 568 00:32:50,760 --> 00:32:54,600 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg 569 00:32:54,680 --> 00:33:01,120 Speaker 1: Radio