Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene
Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
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Speaker 1: more science emerging that the global manufacturing recession has arrived
Speaker 1: in America. One question, maybe two? Does it become more
Speaker 1: entrenched and does it spread? I'm pleased to say that
Speaker 1: joining us here in New York City is Luigi San
Speaker 1: Gala's University of Chicago Booth School Finance professor. Good morning
Speaker 1: to professor, good morning. Help me answer that question or
Speaker 1: those questions. Does it become more entrenched and does it
Speaker 1: spread beyond manufacturing? I think that the good news is
Speaker 1: that the west of the economy seems to be pretty strong,
Speaker 1: and so I don't think it will spread as as
Speaker 1: of today. But I think it's important to keep an
Speaker 1: eye on what's happening on the trade front, because if
Speaker 1: the things were to deteriorate there, then I think that
Speaker 1: would be more of a problem for the U. S economy.
Speaker 1: At the epicenter of all of this was a week
Speaker 1: I sam an Ugly I sand beneath the surface as well.
Speaker 1: The weakest we've seen in around about ten years. And
Speaker 1: when you look at the complaints from sector to sector,
Speaker 1: it's not about the cost of capital, it is about trade.
Speaker 1: With that in mind, what can the federal reserve? What
Speaker 1: can central banks actually do to insulate these economies from
Speaker 1: the trade headwinds. So there's not a lot of the
Speaker 1: FAT can do, but clearly by making a very reducing
Speaker 1: rates might make the dollar less strong and in a
Speaker 1: sense can expand export. That's certainly what the president would like.
Speaker 1: I don't know whether this was j. Powell do, but
Speaker 1: I think that's the only channel the FAT as. I
Speaker 1: think that this problem should be solved at the political level,
Speaker 1: not at the monetary level. We've had multiple growth as
Speaker 1: in the last ten years through the cycle, we've had
Speaker 1: to which trying to understand where the twenty eight nineteen
Speaker 1: going into it is different? Professor? Is it different compared
Speaker 1: to what we have seen in this cycle already? I
Speaker 1: think it's a bit different because it is more global
Speaker 1: and we see that Germany has lowed down significantly and
Speaker 1: uh and that my twigger has low down in the
Speaker 1: entire Europe. I think that the Germany is low slowdown
Speaker 1: is a direct repercussion of slowdown in China. In fact,
Speaker 1: I believe that the German numbers are much more reliable
Speaker 1: than the Chinese numbers, so this is an indication that
Speaker 1: in China there is a slowdown. So this is more
Speaker 1: at the global level, and I don't see a lot
Speaker 1: of space for maneuver. This is who has the space
Speaker 1: to maneuver is the German government, but it doesn't seem
Speaker 1: to be willing to do it. So I think we
Speaker 1: need more physical expansion at the ward level. The United
Speaker 1: States has done a lot in the past, even when
Speaker 1: maybe it was not needed to physically expand. So we're
Speaker 1: left with you ap taking its uh responsibility. And I
Speaker 1: don't see this coming within all your books, and particularly
Speaker 1: your book on American Capitalism, which was so illuminating as
Speaker 1: a foreigner talking about, you know, how we do things
Speaker 1: in America. So much like what John Farrell was just
Speaker 1: asking about, is where the gains go to. If we
Speaker 1: have a manufacturing slowdown that is a certain effect on people.
Speaker 1: If we have a service sector in financial expansion from
Speaker 1: all this, are those gains all going to the elite?
Speaker 1: Unfold the left to say yes. I think that so
Speaker 1: far trade has benefited mostly as more elite and as
Speaker 1: pedalized Midwest America. And we have seen the reaction of
Speaker 1: this in the last election. And I don't think that
Speaker 1: anything major has been done to to fix this problem.
Speaker 1: And I don't think it's unique of the United States.
Speaker 1: Look at the United Kingdom. You have the same problem there.
Speaker 1: You have a London that is very much poor. You
Speaker 1: open in favor of trade and benefiting from the trade,
Speaker 1: and the rest of England or the rest of the
Speaker 1: UK that don't benefit as well. This is the populist backlash.
Speaker 1: Let's talk about the economy right in front of us
Speaker 1: at the moment. The European economy has been weak now
Speaker 1: for I would say eighteen months. Likewise, for China, this
Speaker 1: started in spring eighteen. In fact, some of this weakness
Speaker 1: predates the tariffs going on, It predates the ramping up
Speaker 1: of the trade war. With that in mind, it's not
Speaker 1: the United States leading the downturn here. The United States
Speaker 1: is lagging behind the rest of the world. So if
Speaker 1: we're going to look for a recovery, we need to
Speaker 1: see the rest of the world lead us out of
Speaker 1: that it's not the US that's going to lead us
Speaker 1: out of this. The US is langgic. Do you see
Speaker 1: any leading indicators in the global economy right now? XU
Speaker 1: ways that suggests that this story has started to bottom out. Um,
Speaker 1: not really, I think unfortunately. I wish I could give
Speaker 1: you some hope, but no, I think that there's low
Speaker 1: down in in China is probably going to continue, and
Speaker 1: this will every percussion in Europe. And I don't see
Speaker 1: you up uh we're starting because the natural way will
Speaker 1: we start would be some major fiscal package originating in Germany.
Speaker 1: And I don't see the political will of that. You
Speaker 1: laugh When I say major phiscal package in originating from Germany,
Speaker 1: you laugh, And that's an indication of how unlikely this
Speaker 1: is anytime soon. Eventually they am I going to do it?
Speaker 1: But eventually when there's a major recession in Germany. This
Speaker 1: laugh is not just reserved for you, Luigi. I should
Speaker 1: express myself quite clearly that I laugh for everyone that
Speaker 1: brings out the possibility of fiscal stimulus in Germany, because
Speaker 1: I'm through still trying to understand what the bite point
Speaker 1: is for the German government to change Christmas. You know
Speaker 1: how this works in Europe better than anyone. You have chaos,
Speaker 1: you have a crisis, then you finally have some kind
Speaker 1: of suboptimal solution. In Germany, quite clearly a recession amount
Speaker 1: recession is not enough to deliver fiscal stimulus. What is
Speaker 1: I think that when the recession will buy Germany serusually
Speaker 1: and this will create a political demand for intervention, Eventually
Speaker 1: they will intervene. But so far Germany has benefited from
Speaker 1: this austerity policy because they have exported their way out
Speaker 1: of all the cycles, and the cost of adjustment has
Speaker 1: been imposed on the rest of Europe. And and so
Speaker 1: I think that is as if in uh in the
Speaker 1: United States you only look at Massachusetts. Massachusetts is benefiting
Speaker 1: from a more steady package because the cast are born
Speaker 1: in Texas and in in Lenai and Ilenoia and Texas
Speaker 1: don voud in Massachusetts. I think that's what united is about.
Speaker 1: I mean, the headlines in the last two hours out
Speaker 1: of Germany are just stunning. As you point out, John,
Speaker 1: there's no framework within those headlines of any fiscal adjustment.
Speaker 1: It's the weakest link. I wonder how the God reads
Speaker 1: those headlines. I have no idea. I just think it's
Speaker 1: the weakest link in Europe right now, Luigi, Never mind, Legard,
Speaker 1: let's talk about Chancellor Merkell. So many people sung the
Speaker 1: praises of Chancellor Merkel for so long, and I don't
Speaker 1: think economic historians are going to be too kind to her.
Speaker 1: In ten twenty thirty years time, there was a once
Speaker 1: in a lifetime opportunity to restructure the German economy, to
Speaker 1: take advantage of record low borrowing raids, to change the
Speaker 1: export driven model that is the German economy. They haven't
Speaker 1: taken that opportunity. They haven't taken that opportunity at all. No,
Speaker 1: that they have not in fact, and then kind of
Speaker 1: the opposite, and I think that to understand the German spirit,
Speaker 1: you have to realize that the first Kensian in history
Speaker 1: was actually Hitler, because Hitler used massively fiscal expansion to
Speaker 1: start Germany, and so in Germany the idea of using
Speaker 1: the fiscal stimulus is anathema because of this historical president. Um,
Speaker 1: we're just we're out of time and we would do
Speaker 1: this later, but I've got to bring it up right now.
Speaker 1: Is Barcelona going to do a Tottenham? I mean, is
Speaker 1: that where we're enjoy that game? Yes? So that was
Speaker 1: just fabulous seven to what happened to you? I don't know,
Speaker 1: but today's Barcelona Inter Malon against Inter But Luigi supports
Speaker 1: my c Milan, I know, but it's come on as
Speaker 1: Milan as Milan. On one side is blue and black,
Speaker 1: the other side is red and black. In the studio,
Speaker 1: the red and black half of Milan. Yeah, well, the
Speaker 1: losing side, but we're very committed to lose it. It's
Speaker 1: like the Chicago cab they always lose, but you love them.
Speaker 1: This is the Sylvia Balasconi side of Milan. Ce Milan
Speaker 1: actually to support that way before it was going to
Speaker 1: the unforely dates me, but I supported Milan a c
Speaker 1: back in the time where it was a great team
Speaker 1: before before Belisky took over in the mid eighties. Do
Speaker 1: they have a derby? A derby? Derby is derby. We
Speaker 1: played stadium and it took place a couple of weekends.
Speaker 1: Have you been to the but I have been to
Speaker 1: Juventus Milan and it was a great game and we
Speaker 1: also lost. Can you buy the team with your next
Speaker 1: book royalties? I mean Milan. I think we can probably
Speaker 1: put some money together around this table. Although I have
Speaker 1: heard that the French billion misr ar know might be
Speaker 1: interested in a slice, will have the best jersey of
Speaker 1: all the teams. We gotta go Luigians and Gallas thank
Speaker 1: you right now. Buffeted against all of this mark market
Speaker 1: angst are the distractions of politics. Rosalind Matheson is with
Speaker 1: us right now and the problem with her title, John,
Speaker 1: And she's International Government Executive Editor, which means she is
Speaker 1: focused with her team on China, focused on impeachment and
Speaker 1: all that's going on in Washington, many other issues as well, John,
Speaker 1: Why don't you bring in Rosalind on the Prime Minister
Speaker 1: speaking to the North. Is the speech different John, if
Speaker 1: it's given in Manchester the London, Now it shouldn't be.
Speaker 1: It shouldn't make a difference. Let's bring in Roslyn, shall we?
Speaker 1: Good morning to Roslyn. Let's just start with the Prime Minister.
Speaker 1: The rule book for how this usually works is that
Speaker 1: they come up with the proposal, starting rallies. Then the
Speaker 1: Irish throw a cold glass of water over the proposal.
Speaker 1: Then Stirling sounds off again. Walk me through what the
Speaker 1: proposal is this time and where ultimately the EU and
Speaker 1: the Irish stand on it. Well, yeah, so he's just
Speaker 1: actually finishing his speech. We can see him on television
Speaker 1: now to rapturous scenes in Manchester to the party faithful
Speaker 1: um where he talked about brexfit Brexit, but mostly about
Speaker 1: everything else. His proposal is really quite different from what
Speaker 1: the Europeans have been putting forward. He's saying that he
Speaker 1: wants to keep Northern Ireland, which is the key question
Speaker 1: here and all of the Brexit negotiations in a customs
Speaker 1: union with the UK, therefore creating a border with here,
Speaker 1: a through through which goods would have to move. European
Speaker 1: objective is obviously to prevent hard border on Ireland and
Speaker 1: preserve a single market for things to move through easily.
Speaker 1: So his proposal is quite different. The Europeans are saying
Speaker 1: they're going to look at it objectively. He's going to
Speaker 1: speak with the European Commission President tonight on the phone.
Speaker 1: Has already been hitting the phones to the leaders around
Speaker 1: Europe trying to sell this thing to them. The Irish
Speaker 1: have come out very quickly as you can imagine, and
Speaker 1: said they're extremely concerned about it. So he's going to
Speaker 1: have a hard job ahead of him trying to get
Speaker 1: any traction on this one. What a relations like between
Speaker 1: the Irish and the UK government right now. There were
Speaker 1: reports that the British government actually briefed the Irish today.
Speaker 1: In fact, the Irish were the only EU nation that
Speaker 1: were briefed on the proposal from the Prime Minister before
Speaker 1: today's address, and that the Irish leaked it. That's the
Speaker 1: accusation from some quarters in Britain right now. What do
Speaker 1: you make of that and what does it mean for
Speaker 1: relations between the two countries. Well, at least there's certainly
Speaker 1: been an appetite for dialogue between the Irish and between
Speaker 1: the British government. We've seen Boris Johnson go to meetings
Speaker 1: there repeatedly, stand up together on podiums and have press
Speaker 1: conferences afterward, where the rhetoric has been quite warm. The
Speaker 1: problem is that neither side will want to move on this,
Speaker 1: and Boris Johnson is animate. But if he doesn't get
Speaker 1: the deal, if he doesn't get the deal he wants
Speaker 1: in nine days from now October eleven, and he's going
Speaker 1: to move forward and crash out. And he's just said
Speaker 1: that he's not going to budge on that. So what
Speaker 1: we've got is too polite but sort of immovable forces
Speaker 1: staring at each other right now. And no one willing
Speaker 1: to give in the ground, Rosalind, Can I ask the
Speaker 1: dumb foreign question, does he want this to fail on purpose?
Speaker 1: There's certainly a narrative around those lines. What he's doing
Speaker 1: is he's saying this is it or nothing. He's hoping
Speaker 1: perhaps that his strong approach and they're running down of
Speaker 1: the clock will just force a deal to happen. There's
Speaker 1: also a school of thought that what he really wants
Speaker 1: to be able to go out to the British people
Speaker 1: and say, look, I tried everything to give you brexit.
Speaker 1: Parliament got my way, the Europeans got my way, the
Speaker 1: Irish got my way. Therefore I need to have an election.
Speaker 1: The need to give me a big, big mandate so
Speaker 1: I can come back and deliver for you. So the
Speaker 1: mandate that the narrative would be that I tried everything,
Speaker 1: but I was stopped at every turn. Can baby Charley vote?
Speaker 1: Can baby Charley? Baby Charlie's gotta wait until he's a
Speaker 1: little bit older. We gotta wait for that. Were with
Speaker 1: Uncle John here in New York, continued Rosslyn. Just to
Speaker 1: wrap things up with you, how is this planing go
Speaker 1: out in the court of public opinion? With the electorate
Speaker 1: at the moment. This has quite clearly been a strategy
Speaker 1: of Mr Cummings and Prime Minister Johnson to make out
Speaker 1: that everyone else is the reason that Brexit isn't going
Speaker 1: through the institutions, the Court, Parliament, the EU, the Irish.
Speaker 1: How successful are they pushing that agenda. Well, certainly we've
Speaker 1: just seen very rapturous scenes in Manchester, loud applause, backslapping,
Speaker 1: all that kind of stuff. That is the party faithful.
Speaker 1: The thing for us is to not to presume to
Speaker 1: know how people outside London, for example, feeling there's a
Speaker 1: strong basis support in rural areas for Boris Johnson, a
Speaker 1: strong basis support for making the Tories great again. There,
Speaker 1: I say, that's the manager he's been pushing and people
Speaker 1: out there who really want to see Brexit done. Um.
Speaker 1: So it's quite possible that his tactics here have quite
Speaker 1: a lot of support. UM. And we'd be careful not
Speaker 1: to presume to know how an election might play out.
Speaker 1: UM in London, Rose and we got to leave it
Speaker 1: there to you in our government team worldwide. Thank you
Speaker 1: so much, thank you for reporting there's a little bit
Speaker 1: going on, John Stolphus with us without this is an
Speaker 1: important update because we've been John and I've really been
Speaker 1: focused on the bond market and the dynamics there, and
Speaker 1: it's good to talk to John Stolphus about equities. For John,
Speaker 1: let's begin with your decades of experience with the absolute
Speaker 1: mystery of October revenue and earning seasons. Do you have
Speaker 1: a clue what we're gonna see? Well, we'd have to
Speaker 1: We'd have to think we're going to get a repetition
Speaker 1: of what we have seen in the last few quarters,
Speaker 1: and that we think that estimates are low enough at
Speaker 1: this point, have been brought down enough, and there's been
Speaker 1: enough guidance from corporate chieftains that things are are are
Speaker 1: decidedly challenged in many uh ways by the trade war
Speaker 1: that expectations are likely to be beat once again. How
Speaker 1: long this can land second year of the trade war
Speaker 1: with the potential for acceleration. If we've seen a re
Speaker 1: rating in the last twenty four hours towards rate cut
Speaker 1: and the way this curve is deepening and all that,
Speaker 1: how much weight do you put in the flip reciprocal
Speaker 1: of the yield market out to higher equity valuations? Do
Speaker 1: is there any weight to that? Or do you ignore
Speaker 1: that right now, we've we've we've got to think that
Speaker 1: you know where interest grates are today from a historical perspective,
Speaker 1: would indicate that equities are not overpriced. The The other
Speaker 1: thing is the demand for equities is just likely to
Speaker 1: increase as the baby boomer generation begins to actually retire
Speaker 1: and recognize that they they need vehicles that offer more
Speaker 1: than a very slight coupon and need to at least
Speaker 1: have if they can if they when when they can
Speaker 1: find good companies, the potential for capital appreciation, the total
Speaker 1: return dividend growth story might make sense. Equities have support
Speaker 1: moving forward. From what we can tell, John, I want
Speaker 1: to stay out there in and work through the growth
Speaker 1: scares of the past with you. Twelve back into the
Speaker 1: year after a growth scare has been pretty good, pretty
Speaker 1: kind to invest us in this cycle. So after the
Speaker 1: eleven twelve growth scare, stocks up almost after the fifteen
Speaker 1: sixteen growth scare, stocks up in more than nine percent.
Speaker 1: We're working our way through this eighteen nineteen growth scare.
Speaker 1: Every year, of course, is different, John. We had our
Speaker 1: moments in seventeen which were largely about anticipating in a
Speaker 1: rate cut, but looking out to twenty. How much harder
Speaker 1: is it to make the call buy stocks off the
Speaker 1: back of the growth scare when we're already up nineteen
Speaker 1: percent this year. Well, I've got to say this. I
Speaker 1: think what we're the wonderful thing is that we really
Speaker 1: are only up zero point three from the high that
Speaker 1: we've reached on September twentieth of last year. So so
Speaker 1: far this year. It doesn't take into account if you
Speaker 1: just look at where the year to day is. The
Speaker 1: devastation that are in the fourth quarter, which we thought
Speaker 1: was fairly unreasonable. It was like a muggy there there was.
Speaker 1: It was an overreaction and negative projection that we saw.
Speaker 1: They brought the markets down as sharp music in the
Speaker 1: fourth quarter last year. That haven't been realized yet. Yeah, John,
Speaker 1: one of your charms at up COD as you can
Speaker 1: really talk easily about the big banks because you're not
Speaker 1: with a big bank. Give us your thoughts about the
Speaker 1: big banks. John Ferrell's noted their movement this year. Is
Speaker 1: it done? We wouldn't think so. We think that the
Speaker 1: big banks, and we think the big banks are in
Speaker 1: alpha call. So it's it's on an individual stock picking
Speaker 1: basis rather than on a on a beta or a
Speaker 1: or you know an index called a sector index, call
Speaker 1: for that. But within the big banks, the reality is
Speaker 1: these guys don't pay. They pay next to nothing on deposits.
Speaker 1: They have credit cards. Uh, interest rates that that looked
Speaker 1: like it's the late seventies or early eighties when they
Speaker 1: charge on on on on balances. So we have to
Speaker 1: say and and and evidences from earnings that or they
Speaker 1: may not get it from trading. Uh. The the lending
Speaker 1: business is in good shape. The wages are still rising,
Speaker 1: so we'd have to think we like that. It's our
Speaker 1: contrarian pick among the cyclical sectors that we like, john
Speaker 1: Why is it so disliked still? Even though we've had
Speaker 1: some pretty solid performance from that sector this year, just
Speaker 1: looking at some of the big names, the likes of City,
Speaker 1: they've delivered some really strong gains through nineteen and yet
Speaker 1: when you ask people about financials, they pull a face
Speaker 1: as if they have performed terribly over the last six
Speaker 1: to nine months. You know, Jonathan, It's it's just it
Speaker 1: really shows human nature, I think in many ways. And
Speaker 1: it's just it's one of those sectors we would think
Speaker 1: that is you you buy when they're not popular so
Speaker 1: that you don't have to chase them later when finally
Speaker 1: the realization comes in that these things are what makes
Speaker 1: everything move. Everything floats on credit. As long as the
Speaker 1: bond market is in real trouble, these these are are
Speaker 1: likely to essentially fund the system. Yeah, the real bug
Speaker 1: of who here is the trade war. That's that's the
Speaker 1: problems the tariffs. Otherwise we were in economic recovery globally
Speaker 1: before March of John, very quick clear, this came up yesterday.
Speaker 1: If the trade war is cleared, who benefits emerging market,
Speaker 1: international stocks or US large caps? We think all do
Speaker 1: because we think with if we've got to deal with
Speaker 1: with China, the dollar moves, lower, currencies outside of the
Speaker 1: US rise on expectations and increased growth of negative over
Speaker 1: the trade war removed. We think it's emerging, we think
Speaker 1: it's developed international, and the US would would would participate
Speaker 1: in that. Very good, John Stolphine, thank you so much.
Speaker 1: With OpCo, there's some enthusiasm on the equity Marcus. Right now,
Speaker 1: Andrew Holland Hohorst with this US A City group. These
Speaker 1: are chief US economists. What is the distinctive feature for
Speaker 1: you right now? In the classic US equation. Why will
Speaker 1: see plus I plus G plus n X. What matters
Speaker 1: to Andrew holland Horst, Well, I think they all matter, Tom.
Speaker 1: But what we have been looking at in terms of
Speaker 1: the strength of this economy is see, we've seen consumption
Speaker 1: that's really held up very very well, um, despite the
Speaker 1: weakness that we're seeing in manufacturing, the weakness that we're
Speaker 1: seeing in investment. So I think that's what we're watching
Speaker 1: tables for. Does the strong labor market continue to drive
Speaker 1: that consumption that that can't be permanent? I mean, if
Speaker 1: you know consumption six eight or sixty nine, once in
Speaker 1: a while, it's seventy of the American economy. You know
Speaker 1: there's dynamics here, folks. Is there a permanence to consumption alone?
Speaker 1: So I think you have to put in the bottom
Speaker 1: on some of the weakness that we've seen in the
Speaker 1: industrial sector. Um, when you see I S M manufacturing
Speaker 1: at forty seven point eight, that's a concerning number, and
Speaker 1: that confirms you about is this going to spill over
Speaker 1: into the broader economy? Is this going to cause consumptions
Speaker 1: to slow as well? Um? If this can kind of
Speaker 1: stabilize here, thenteen can look like twenty sixteen, we got
Speaker 1: down to on the manufacturing index, and then we kind
Speaker 1: of bottomed out and turned back around and we continued
Speaker 1: with this story of strong consumptions. I think that can
Speaker 1: happen again, but I would agree that we need to
Speaker 1: see at least some bottom here in terms of what's
Speaker 1: going on in the industrial side. It's the theme and
Speaker 1: two that's come up again and again and again on
Speaker 1: this program over the last couple of weeks. The three
Speaker 1: growth scares that we've had, the current one, the fifteen
Speaker 1: sixteen one, and the one back in twelve. And do
Speaker 1: every growth scare is different. All three have been led
Speaker 1: by manufacturing. Just how different is this one? Though? I
Speaker 1: think this one is different? Um in some ways it's
Speaker 1: harder to attribute. This is something that's transitory. Sixteen. I
Speaker 1: think you could see what had happened with oil prices.
Speaker 1: You've seen a US economy that was very oriented towards
Speaker 1: investment in oil and energy related industries um and this
Speaker 1: slowdown an investment has been more broad based and it's
Speaker 1: more a symptom of the global slowdown. So I think
Speaker 1: that's what's a little bit more concerning here. If the
Speaker 1: global growth story continues to worse it. It does sm
Speaker 1: with each data print, it does worsen. Um. Then you know,
Speaker 1: it's harder and harder to see how the US goes
Speaker 1: it alone. And we are saying that there's been these
Speaker 1: times in the recent tumultuous months where the weather vein
Speaker 1: changes and maybe that happened yesterday off US data, and
Speaker 1: today the German forecast is well and it's it's it's
Speaker 1: exposed shown in curve steepening. And then in this case
Speaker 1: it's where the two year yield comes in. And I
Speaker 1: don't want you to be bond guy from City Group,
Speaker 1: but are we going to revisit a whole new round
Speaker 1: of guessing the number of rate cuts by this Fed
Speaker 1: Central Bank? Yeah? I think after the number yesterday, we're
Speaker 1: back in that mode. We're back in that mode, thank you. Yeah,
Speaker 1: you can see that the pricing of October going up again. Um.
Speaker 1: And so you know, let's see what happens with iyets'm
Speaker 1: non manufacturing. Let's see, let's see what happens with payrolls
Speaker 1: for the said it really is going to defend one.
Speaker 1: Do you see this building over more broadly and still
Speaker 1: it's pretty isolated in manufacturing as of today, Um, well,
Speaker 1: we'll see what the numbers bring well. And the other
Speaker 1: question is whether you should wait if you're on the
Speaker 1: federal reserve, if you wait for it to show up
Speaker 1: in claims, if you wait for it to show up
Speaker 1: in ours worked in the payrolls report, and that starts
Speaker 1: to break down. You're a little light on't you. If
Speaker 1: you want to be early, you want to be aggressive.
Speaker 1: I think that they've tried to do that with the
Speaker 1: rate cuts they've delivered so far, since arguably we hadn't
Speaker 1: seen that much weakness in the domestic data. Now you're
Speaker 1: really running into the problem of you want to be
Speaker 1: early and aggressive, but you have limited policy room. There's
Speaker 1: only so much room to cut, so you know, you're
Speaker 1: kind of walking that fine line between delivering enough or
Speaker 1: over delivering and then maybe ending up with fewer bullets
Speaker 1: when you wish you had them. And then they face
Speaker 1: a ton of questions about the efficacy of the policy
Speaker 1: they are deploying, Andrew whether rate cuts in this environment
Speaker 1: actually how day that? Yeah, So we're seeing some effect
Speaker 1: in the housing market. I think you've seen the most
Speaker 1: recent data a little bit firmer, and that's an effect
Speaker 1: of lower rates. But you know where you'd really like
Speaker 1: to see this as stronger business investment. And I think
Speaker 1: there's very little evidence right now that lower rates are
Speaker 1: actually causing any kind of you know, pick up in
Speaker 1: that activity. Nice Prett. Andre Hollander's thank you so much
Speaker 1: with City Group today and it is an extraordinary set
Speaker 1: of interviews. Mr Rubinstein with a gentle lady who is
Speaker 1: polarizing across America. Here's David Rubinstein with a subtle question
Speaker 1: for Ruth Bader Ginsburg. How does it feel to get
Speaker 1: up in the morning and know that three million Americans
Speaker 1: want to know the state of your health that day?
Speaker 1: Does it feel encouraging? As Kansas survivors know that dread
Speaker 1: disease is a challenge, and it helps to know that
Speaker 1: people are rooting for you. Now, it's not universal. When
Speaker 1: I had Peggy had a cancer in two thousand nine,
Speaker 1: there was a senator whose name I don't recall, but
Speaker 1: he said I would be dead within six months. That
Speaker 1: senator is now no longer alive. But you can't remember
Speaker 1: his name. No, I don't remember you, um, but your
Speaker 1: current view is that as long as you're healthy and
Speaker 1: able to do the job, you intend to stay on
Speaker 1: the Court. Is that correct, as long as I'm healthy
Speaker 1: and mentally agile. Right, And the tone there of a
Speaker 1: gentle lady of a certain vintage joining us now with
Speaker 1: his peer to peer and again doing it wonderfully with
Speaker 1: Ruth Bader Ginsburg, David Rubinstein, David, congratulations on a wonderful interview.
Speaker 1: Let me start with the other side and some of
Speaker 1: the humor there. Why should conservatives, why should originalists? Why
Speaker 1: should those of a camp of Justice Scalia? Why should
Speaker 1: they listen to this conversation with RBG? Well, first of all,
Speaker 1: HERBG was a very good friend of Justice Scalia and Uh.
Speaker 1: And there's a conversation that I had with her about
Speaker 1: how they became such good friends, sharing their interests in
Speaker 1: opera even though they disagreed a great deal on legal matters.
Speaker 1: I think she's a historic figure. She is the second
Speaker 1: woman on the Supreme Court of the United States, and
Speaker 1: we'll have served longer on the Supreme Court than any
Speaker 1: other woman. She's serving longer than uh, than Sandra Day O'Connor,
Speaker 1: and she's become a rock star, as you may have
Speaker 1: seen it. To Day's New York Times, Tom Freeman's column
Speaker 1: basically talks about my introducing her at a recent Kennedy
Speaker 1: Center event, and she got a standing ovation over the
Speaker 1: weekend because of the things she stands for. A woman
Speaker 1: who really led the charge for equality and gender equality
Speaker 1: and the leal in the law, a woman who's battled
Speaker 1: three bouts of cancer and still survived and living on
Speaker 1: the Supreme Court doing quite well. So I think people
Speaker 1: admire her in many ways. And she's obviously a very
Speaker 1: very smart person, top of her class at Harvard Law
Speaker 1: School and Columbia Law School. Uh, successful marriage for more
Speaker 1: than fifty years to a great tax lawyer who's unfortunately
Speaker 1: passed away, and h a person had that many women
Speaker 1: really admire for, and and and men as well. Meyer
Speaker 1: for her her intellect, her gumption, her um overcoming physical problems.
Speaker 1: I think she's, you know, the notorious RBG, as she's
Speaker 1: been called. David. How does Justice Ginsburg feel about the
Speaker 1: perhaps politiciz politicization of a court given some of the
Speaker 1: recent appointments to the court. Well, she's not going to
Speaker 1: comment on that directly, and did not. I mean she
Speaker 1: just you know, when you were um a Supreme Court justice,
Speaker 1: people don't usually ask you questions that you have to
Speaker 1: answer she can deflect them, and and she deflected things
Speaker 1: like that. But I think you know, generally her view
Speaker 1: is that the court. I'm speaking by my senses that
Speaker 1: she that the Court has been probably been somewhat more
Speaker 1: politicized than she would prefer, not for for anything that
Speaker 1: the justice have done, but just the way that the
Speaker 1: confirmation processes work. Her confirmation process was not as um
Speaker 1: confrontational as something we've seen recently. Yes, Sunstein in his
Speaker 1: wonderful book Impeachment, takes an interlude David Rubinstein in the
Speaker 1: middle of the book, and the Harvard law professor says, Okay,
Speaker 1: here's the originalists, and here's the few shades of originalist,
Speaker 1: the conservatives, and here's the many shades of a more liberal,
Speaker 1: more modern Supreme Court justice Buyer and in RBG in
Speaker 1: the rest of them, define exactly her liberality is. She
Speaker 1: contributes to American law? What what is the school of RBG. Well, remember,
Speaker 1: she was criticized, as was Justice O'Connor by some for
Speaker 1: say that they're incrementalists. In other words, there were some
Speaker 1: women's groups that were not in favor of uh of
Speaker 1: RBG getting onto Supreme Court because they said, not not
Speaker 1: all but some women's groups said she wasn't strong enough
Speaker 1: in supporting Roe v. Wade, and that's because she had
Speaker 1: a different way to analyze that particular case. I think
Speaker 1: that she's basically a very fastidious um student of the law,
Speaker 1: a great law school student, and she believes in incremental change,
Speaker 1: I believe, and therefore she may not be um, you know,
Speaker 1: everybody's favorite justice in terms of doing all the things
Speaker 1: that some of her support as would like her to do.
Speaker 1: But I think she's well respected by other justices because
Speaker 1: of the way she really analyzes the log and she
Speaker 1: writes her opinions with great, great care. Um. She doesn't
Speaker 1: have other people writing them. She writes the opinions and
Speaker 1: she is They're very meticulous, and she's obviously writes a
Speaker 1: lot of the sense. So, David, I know that Justice
Speaker 1: Ginsburg has said that she plans on remaining on the
Speaker 1: court as her health allows. But did she give you
Speaker 1: a sense of kind of how she views her legacy.
Speaker 1: She's had such a long tenure on the court. Um,
Speaker 1: many people don't like to talk about their legacy while
Speaker 1: they're still in a particular job, and she doesn't really
Speaker 1: want to talk about it in quite that way, but
Speaker 1: I think she will be she recognized that she'll be
Speaker 1: seen as the second woman on the Supreme Court, as
Speaker 1: I said, probably the longest serving woman to have served
Speaker 1: on the Court. Uh, and she's seen as somebody that
Speaker 1: rises above the view of most justice. Most justices are
Speaker 1: not known by the public, but she is known by
Speaker 1: the public and such a stent that she gets standing
Speaker 1: ovations or where she goes. At the National Book Festival
Speaker 1: this year, there were about twelve thousand people lined up
Speaker 1: just to hear her talk about um, you know, her life.
Speaker 1: And there are she does speaking events around the country
Speaker 1: now and one in Kansas recently. I think she had
Speaker 1: eighteen thousand people show up. So it's very unusual for
Speaker 1: justice of the Supreme Court, many of whom are unrecognizable
Speaker 1: to the public, they get that kind of attention. Harkens
Speaker 1: back to Oliver Wendell Holmes. David Rubenstein again, congratulations, appear
Speaker 1: to be your conversation. We're gonna do this across two
Speaker 1: weeks with Ruth Vader Ginsburg. Thank you so much, David Rubinstein.
Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and
Speaker 1: listen to interviews on Apple podcasts, SoundCloud, or whichever podcast
Speaker 1: platform you prefer. I'm on Twitter at Tom Keane Before
Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg
Speaker 1: Radio