WEBVTT - Issuance Process for 100-Year Bonds Is Too Risky, Cloherty Says 0:00:05.800 --> 0:00:08.720 Welcome to the Bloomberg p m L Podcast. I'm pim Fox. 0:00:08.760 --> 0:00:11.520 Along with my co host Lisa Bramowitz. Each day we 0:00:11.640 --> 0:00:15.120 bring you the most important, noteworthy, and useful interviews for 0:00:15.200 --> 0:00:17.840 you and your money, whether you're at the grocery store 0:00:17.960 --> 0:00:20.720 or the trading floor. Find the Bloomberg p m L 0:00:20.840 --> 0:00:31.960 Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. The 0:00:32.000 --> 0:00:37.240 Treasury Department sent a survey to primary dealers asking very 0:00:37.280 --> 0:00:42.920 detailed asking for very detailed responses to whether investors would 0:00:43.000 --> 0:00:46.120 have an appetite for fifty or even one hundred year 0:00:46.520 --> 0:00:50.000 US treasuries Now, how realistic is the potential for this 0:00:50.159 --> 0:00:53.560 ultra long dated bond issueist issuance by the US. I 0:00:53.560 --> 0:00:56.080 want to bring in Michael Clardy. He's head of US 0:00:56.120 --> 0:01:00.360 interest rate strategy at RBC Capital Markets in New York. Michael, 0:01:00.440 --> 0:01:02.600 can you give us a sense before we dig into 0:01:02.880 --> 0:01:05.360 what the Treasure Department is looking for and how feasible 0:01:05.440 --> 0:01:08.759 this would be? Do you feel like this latest survey 0:01:09.000 --> 0:01:12.199 signals that the Treasury Department is much more serious about 0:01:12.280 --> 0:01:14.560 ultralong dated bond issuance now than they have been in 0:01:14.560 --> 0:01:17.360 the past. All Right, this is an issue that's been 0:01:17.440 --> 0:01:21.360 out there for a while, but the specific nature of 0:01:21.400 --> 0:01:24.000 these questions doesn't make it feel like we've moved a 0:01:24.040 --> 0:01:27.720 little bit closer um to the decision on this. So 0:01:27.959 --> 0:01:31.319 greater odds uh that we do get an ultralong bond. 0:01:31.720 --> 0:01:33.920 So let's talk about what they were looking for. They 0:01:33.959 --> 0:01:37.640 want to know the appetite by investors, but also the 0:01:37.640 --> 0:01:40.000 primary dealers have to play a pretty big role in 0:01:40.120 --> 0:01:44.200 whether this happens or not. Right right, So, I think 0:01:44.200 --> 0:01:46.400 the biggest challenge with an ultra long is going to 0:01:46.480 --> 0:01:49.840 be how do you issue it? Issue it? The problem 0:01:49.880 --> 0:01:51.480 for the US is that we have a lot of 0:01:51.520 --> 0:01:54.840 debt outstanding already, We've got fourteen training to debt outstanding. 0:01:55.320 --> 0:01:57.360 And if you look, there's lots of countries around the 0:01:57.360 --> 0:02:01.200 world that issue ultralong bonds, but they all have much 0:02:01.240 --> 0:02:03.800 smaller amounts of debt outstanding. So what they can do 0:02:04.040 --> 0:02:06.360 is they can be tactical. They can they can wait 0:02:06.440 --> 0:02:09.200 until they know there's demand for the bond, issue some 0:02:09.360 --> 0:02:12.000 into those periods of strong demand, and then not issue 0:02:12.000 --> 0:02:14.880 when there's weak demand. That works great if you only 0:02:14.880 --> 0:02:17.480 have you know, a trillion dollars debt outstanding, when you've 0:02:17.480 --> 0:02:21.560 got fourteen to be a relevant part of your overall 0:02:21.600 --> 0:02:24.840 debt profile, you have to issue a lot of these 0:02:24.880 --> 0:02:28.400 ultralong bonds, which means that you can't be tactical. You 0:02:28.480 --> 0:02:33.000 have to issue every quarter regardless of market conditions. That 0:02:33.040 --> 0:02:36.440 makes the issue is process highly risks. How big with 0:02:36.560 --> 0:02:39.920 this ultra long portion of the market have to be 0:02:40.040 --> 0:02:44.280 to be relevant? I mean, I think if you're at 0:02:44.280 --> 0:02:48.200 anything less than you eventually want to get it up 0:02:48.200 --> 0:02:50.920 to sort of five percent at least. Otherwise it's a 0:02:50.919 --> 0:02:54.480 bit of a waste of time. It's a lot of bonds, 0:02:54.520 --> 0:02:56.160 that is a lot of who is a lot of bonds? 0:02:56.400 --> 0:02:58.959 Is there an all, Michael? Is there an alternative way 0:02:59.040 --> 0:03:02.320 to achieve the same thing, which is to try to 0:03:02.560 --> 0:03:07.320 lower or keep the cost of funding the government low? Well, 0:03:07.440 --> 0:03:09.960 start with the with the ultra von, no without with 0:03:10.040 --> 0:03:13.720 what exists currently, right, So, I mean one of the 0:03:13.800 --> 0:03:15.839 one of the other questions with the ultra von is 0:03:15.960 --> 0:03:18.760 if you issue a fifty year von, do you brand 0:03:19.040 --> 0:03:21.560 brand new buyers are treasury debt or are you simply 0:03:21.639 --> 0:03:26.160 gonna cannibalize people who would have bought thirties and have 0:03:26.280 --> 0:03:29.480 them buy fifties instead? Um, I think you know you 0:03:29.520 --> 0:03:32.399 would see a lot of cannibalizations. So the other alternative 0:03:32.440 --> 0:03:34.560 if if they want to extend the average charity is 0:03:34.600 --> 0:03:37.840 just to issue more thirties, issue more thirties. Or is 0:03:37.880 --> 0:03:41.880 it possible to disconnect let's say the principal payment from 0:03:41.880 --> 0:03:45.600 the interest payment on treasuries. You could so you could 0:03:45.680 --> 0:03:48.760 issue what that's called it a strip, so you've stripped 0:03:48.760 --> 0:03:54.280 away the coupons from the principal payment that you Actually, 0:03:54.320 --> 0:03:57.480 I think see a lot of demand um for those 0:03:57.720 --> 0:04:02.640 zero coupon long bonds. The one challenge of that is 0:04:02.760 --> 0:04:05.640 they don't raise a lot of money for the Treasury. 0:04:05.760 --> 0:04:10.600 So if I'm selling today a principal strip, that's um, 0:04:10.680 --> 0:04:12.920 you know, I don't get paid on for thirty years 0:04:13.000 --> 0:04:17.320 or fifty years um. The value of that strip is 0:04:17.520 --> 0:04:20.880 very low. Um. So I'm not by selling it today, 0:04:20.920 --> 0:04:22.839 I'm not bringing in a lot of money. No, I 0:04:22.880 --> 0:04:25.640 was just gonna say, you know, I really was struck 0:04:25.800 --> 0:04:30.200 by this survey. The reason being that Treasury Secretary Steve Minusan, 0:04:30.279 --> 0:04:32.839 who's just getting his feet wet at this point, he 0:04:32.960 --> 0:04:34.719 doesn't have all of the boots on the ground and 0:04:34.760 --> 0:04:36.760 the Treasury Department that this is one of the the 0:04:36.800 --> 0:04:39.920 initial moves is to really show that he's serious about 0:04:39.960 --> 0:04:43.880 looking into this ultralong dated issuance. I mean, do you 0:04:43.920 --> 0:04:47.560 think from an efficiency standpoint, from a financing standpoint, that 0:04:47.600 --> 0:04:50.400 it would actually help the United States lower their borrowing 0:04:50.440 --> 0:04:55.760 costs over a longer period. No. Um. If you look, 0:04:55.839 --> 0:04:59.800 the Treasury has this Boring Advisor Committee. UM, it's a 0:05:00.000 --> 0:05:04.400 group of different both sell side and buy side, the 0:05:04.440 --> 0:05:08.159 investor based for their bonds. UM. They put out a 0:05:08.200 --> 0:05:14.320 study in UH last back in February where they basically said, 0:05:15.279 --> 0:05:18.600 if we look, if we if you look at the 0:05:18.680 --> 0:05:22.159 last fifty years, at times when rates were rising, you 0:05:22.240 --> 0:05:25.920 saved a tiny bit of money by issuing longer than normal. 0:05:26.560 --> 0:05:29.880 But when rates are falling, issuing longer than normal costs 0:05:29.920 --> 0:05:32.040 you a ton of money. So it's a very a 0:05:32.160 --> 0:05:37.120 submistan asymmetrical savings versus UH costs of the government. That's 0:05:37.160 --> 0:05:40.679 because normally there's a thing a risk premium matern premium. 0:05:40.800 --> 0:05:44.520 By issuing a very long bond, you're the buyer of 0:05:44.560 --> 0:05:46.800 that has a little more interest rate risk than if 0:05:46.800 --> 0:05:50.359 they bought something short. UM. So normally you have to 0:05:50.360 --> 0:05:55.120 pay that buyer for taking that risk over long horizons. 0:05:55.320 --> 0:05:59.240 This tends to be costly. Now issuing today, might you 0:05:59.240 --> 0:06:01.200 know face a small today. It might save a little 0:06:01.200 --> 0:06:04.000 bit of money, but again the Treasury we have so 0:06:04.080 --> 0:06:08.599 much dead outstanding UMU to really be important for the 0:06:08.600 --> 0:06:11.719 financing cost, you'd have the issue a real lot today. 0:06:12.120 --> 0:06:13.839 I want to thank you very much for your thoughts. 0:06:13.839 --> 0:06:16.520 Michael Clardy is the head of US Interest rates Strategy 0:06:16.560 --> 0:06:21.000 at RBC Capital Market, speaking about Treasury Secretary Stephen Nuchan's 0:06:21.240 --> 0:06:37.120 comments about Ultra long u S Treasury bonds. Right now 0:06:37.240 --> 0:06:39.640 we want to turn to UH. I p O is 0:06:39.720 --> 0:06:42.640 different as class but equally important. I must admit I 0:06:42.640 --> 0:06:45.039 want to bring in Sandy Miller, general partner at I 0:06:45.400 --> 0:06:48.960 v P, the leader in tech I p O s. 0:06:49.040 --> 0:06:51.440 He has done arguably more I p O s for 0:06:51.600 --> 0:06:55.000 tech companies than anyone else. And Uh, Sandy, I want 0:06:55.000 --> 0:06:56.440 to talk to you a little bit about about your 0:06:56.480 --> 0:06:59.320 projection that this year we're going to see a really 0:06:59.440 --> 0:07:02.880 dramatic number of technology companies come to market with initial 0:07:02.880 --> 0:07:07.320 public offerings. Can you explain why? How many you expect 0:07:07.520 --> 0:07:10.679 and you know what the demand is like for it? Sure, 0:07:10.720 --> 0:07:12.440 I think it's gonna be a robust year. It's hard 0:07:12.480 --> 0:07:14.640 to know the exact number, but I think we could 0:07:14.680 --> 0:07:17.720 see now. I'm thinking here primarily of tech i p 0:07:17.840 --> 0:07:20.680 o s, which is my area of focus, but I 0:07:20.680 --> 0:07:22.600 think we're going to see, you know, in the range 0:07:22.600 --> 0:07:25.200 of thirty to fifty I p o s this year. 0:07:25.520 --> 0:07:28.120 We're off to a good start in the year. It 0:07:28.160 --> 0:07:30.640 reflects a lot of pent up demand because we've had 0:07:30.680 --> 0:07:32.960 a very very light I p o calendar again for 0:07:33.040 --> 0:07:35.440 tech i p o s in the last three years, 0:07:35.520 --> 0:07:37.440 despite the fact that the stock market has been in 0:07:37.440 --> 0:07:39.840 a good place and there's so many great companies. So 0:07:39.880 --> 0:07:44.280 the buyers are there. Obviously, institutional buyers like I POS 0:07:44.480 --> 0:07:47.240 the source of alpha. Uh, the deals have been working. 0:07:47.320 --> 0:07:50.520 Tech i p o s aout on average last year. 0:07:50.520 --> 0:07:53.440 They're doing about the same so far this year. UM, 0:07:53.480 --> 0:07:56.040 and people want new names. You know, half the there's 0:07:56.080 --> 0:07:58.600 only half as many listed companies as the word twenty 0:07:58.680 --> 0:08:01.080 years ago. So the wires are there, and then the 0:08:01.120 --> 0:08:05.880 companies are there because there's more really strong tech companies 0:08:05.920 --> 0:08:09.720 privately held still of scale called fifty million, hundred million, 0:08:09.760 --> 0:08:12.960 two hundred million dollars and growing than we've ever had before. 0:08:13.080 --> 0:08:15.320 In part because of course there haven't been very many 0:08:15.400 --> 0:08:18.040 I p o s to take them out. So I think, uh, 0:08:18.160 --> 0:08:21.320 the deals have been working well. The companies are ready 0:08:21.600 --> 0:08:24.200 a lot of deals are on file already. Well. Fortunately 0:08:24.240 --> 0:08:27.160 the Jobs Act is allowed the silent filing, which has 0:08:27.200 --> 0:08:31.360 been a terrific uh thing for the sector. And uh, 0:08:31.560 --> 0:08:35.040 you know, there's there's probably upwards of of you know, 0:08:35.400 --> 0:08:38.920 more certainly more than five, maybe more than fifty, we 0:08:38.960 --> 0:08:41.600 don't know for sure. Uh, the companies that have file 0:08:41.679 --> 0:08:44.599 tech companies that have filed silently looking for I p 0:08:44.720 --> 0:08:48.280 o s. It will come both this year and next year. Sandy, 0:08:48.440 --> 0:08:50.640 you talked a little bit about the dearth of i 0:08:50.840 --> 0:08:52.840 p o s and how the number of public realistic 0:08:52.880 --> 0:08:56.199 companies has declined pretty dramatically. This is the source of 0:08:56.320 --> 0:08:59.000 quite a bit of hand ringing, and the tech industry 0:08:59.120 --> 0:09:01.720 is a perfect example. People are saying that there are 0:09:01.760 --> 0:09:04.120 these companies that have grown to be the size where 0:09:04.160 --> 0:09:06.040 they would have otherwise had an I p O for 0:09:06.160 --> 0:09:08.680 a long time earlier, but they've been able to raise 0:09:08.720 --> 0:09:11.560 so much money from venture capitalists and in the debt 0:09:11.640 --> 0:09:14.080 markets that they haven't had to Can you explain why 0:09:14.240 --> 0:09:18.120 these tech companies have waited so long? Well, I think 0:09:18.640 --> 0:09:22.480 there as has been private financing available, if for tech companies, 0:09:22.480 --> 0:09:26.360 primarily from equity rather than debt. Um and the companies 0:09:26.440 --> 0:09:29.679 also have felt it was an easier road because they 0:09:29.760 --> 0:09:32.400 didn't have the public scrutiny and they could take the 0:09:32.480 --> 0:09:35.599 hard decisions that sometimes you have to make about you know, 0:09:35.679 --> 0:09:37.640 business shifts and so on, that are tougher to do 0:09:37.760 --> 0:09:40.000 in a public environment. But I think it was the 0:09:40.040 --> 0:09:43.280 availability of the private capital that allowed them to really 0:09:43.360 --> 0:09:46.240 do that. The private capital is still there today, but 0:09:46.440 --> 0:09:49.839 the valuations today are better in the public market than 0:09:50.000 --> 0:09:53.400 they are in the private market. And and so again, 0:09:53.480 --> 0:09:56.000 and I think ultimately companies recognize they're going to need 0:09:56.640 --> 0:09:58.959 um need the liquidity of going public and also the 0:09:59.080 --> 0:10:03.800 brand building awareness uh that that a public offering brings. 0:10:03.880 --> 0:10:06.480 So especially venture backed companies need to find an exit, 0:10:06.920 --> 0:10:09.040 and the I p O has typically been the best exit, 0:10:09.120 --> 0:10:11.760 in part because it can it can fuel m and A. 0:10:12.200 --> 0:10:14.320 We saw that with one of our companies, have Dynamics, 0:10:14.360 --> 0:10:17.280 a really strong company that was poised to do a 0:10:18.200 --> 0:10:21.320 really successful I p O and then at the last minute, 0:10:21.360 --> 0:10:24.360 Cisco came in and bought the company for a big premium. 0:10:24.400 --> 0:10:26.080 I think we'll see more of that as well. Because 0:10:26.120 --> 0:10:28.959 the i p O is actually catalyzed more m and 0:10:29.000 --> 0:10:35.400 a activity Sandy is snapped considered a success absolutely the 0:10:36.120 --> 0:10:39.199 the the company. I mean as whether something is a 0:10:39.240 --> 0:10:41.360 long run success, and only we determine the long run. 0:10:41.480 --> 0:10:43.520 But I think the I p O, if I assume 0:10:43.559 --> 0:10:45.719 that's your question, I think the I p O is 0:10:45.800 --> 0:10:50.600 very much a success. The priced you know, range revised up, 0:10:50.640 --> 0:10:53.720 price above the range, trading above the range. There's always 0:10:53.800 --> 0:10:57.240 volatility in these names, especially with companies that are super 0:10:57.360 --> 0:11:00.680 high profile UM still in at the sation where they're 0:11:00.720 --> 0:11:04.200 not you know, profitable companies. Uh, there's there's just more 0:11:04.320 --> 0:11:06.480 volatility around them, and I think we'll see a fair 0:11:06.480 --> 0:11:09.800 amount of volatility in the sector. But the overall a 0:11:09.920 --> 0:11:11.679 very very strong year for I p O s and 0:11:11.920 --> 0:11:14.960 also in the next year. Sandy. You noted that valuations 0:11:15.040 --> 0:11:18.559 are better today in the public market than the private market. 0:11:18.600 --> 0:11:21.040 Can you elaborate a little bit, Yeah, what I mean 0:11:21.120 --> 0:11:24.000 by valuations, I mean multiples, because of course there's some 0:11:24.600 --> 0:11:27.080 private you know that that are multiples reflecting the growth 0:11:27.200 --> 0:11:32.560 rates of companies. But the uh, that's the normal environment. 0:11:32.640 --> 0:11:36.480 Normally private companies are priced at some discount to publicly 0:11:36.679 --> 0:11:40.719 public comparables growth adjusted, but we did go through a 0:11:40.800 --> 0:11:46.719 period in particularly where that simply wasn't the case, and 0:11:46.920 --> 0:11:50.920 the the private company multiples are actually higher than public 0:11:50.960 --> 0:11:54.280 company multiples. That's an anomaly, UM, and it was sure 0:11:54.360 --> 0:11:57.040 to correct and it has corrected. It's not a weak 0:11:57.120 --> 0:12:00.079 private market. We're still a robust private market. There's the 0:12:00.080 --> 0:12:03.559 available for for good companies. There's good prices, but it's 0:12:03.600 --> 0:12:08.200 more balanced, and that's making the public market UM look 0:12:08.280 --> 0:12:12.280 more attractive to companies UM that we're kind of trying 0:12:12.360 --> 0:12:15.240 to choose between the private and the public market. Thank you. 0:12:15.559 --> 0:12:19.000 Sandy Miller is the general partner of Institutional Venture Partners 0:12:19.040 --> 0:12:23.120 based in San Francisco. Speaking about the potential torrent of 0:12:23.360 --> 0:12:34.959 technology initial public offerings coming this year, we want to 0:12:35.000 --> 0:12:37.120 take a moment to let you know about something new 0:12:37.280 --> 0:12:41.000 from Bloomberg. 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The afternoon attack in Paris 0:13:19.559 --> 0:13:23.600 yesterday killed a policeman and has further aggravated the situation 0:13:24.000 --> 0:13:28.160 in France as the country goes to the polls this weekend. 0:13:28.480 --> 0:13:31.319 Here to tell us more, as Irene Finel Hannigman, Adjunct 0:13:31.360 --> 0:13:35.640 Professor of International Affairs at Columbia University. Irene, thank you 0:13:35.720 --> 0:13:39.079 for being with us. Let's get your impressions first of 0:13:39.280 --> 0:13:42.760 what this means for the election in France. Well, I 0:13:42.960 --> 0:13:46.880 think this clearly created an additional shock, as we now 0:13:47.080 --> 0:13:51.199 know that the perpetrator was an Islamis terrorist again who 0:13:51.280 --> 0:13:55.000 actually even known to the police uh and maybe affiliated 0:13:55.040 --> 0:13:56.920 with what happened in Mark, say a few days ago. 0:13:57.640 --> 0:14:01.240 The real concern is whether this will harden or even 0:14:01.360 --> 0:14:06.160 increase Mathine Rapin, the extreme right wing candidate support she's 0:14:06.200 --> 0:14:11.080 supposed to have about almost matched with the Centris McColl. 0:14:11.400 --> 0:14:16.280 Her support may increase, However, the question is whether at 0:14:16.320 --> 0:14:19.440 the end of the day, this may not also actually 0:14:19.520 --> 0:14:22.920 help the former Prime Minister of Francoisfidon, whose support was 0:14:23.000 --> 0:14:26.640 eroding because of scandals, but who may look as if 0:14:26.720 --> 0:14:31.800 he is a more sound and experienced type of politician, 0:14:32.080 --> 0:14:36.240 able to basically take away some of Matine Rapine's support 0:14:36.600 --> 0:14:39.880 and still present a very strong pro security yet at 0:14:39.920 --> 0:14:43.320 the same time solid economic program. So right now, this 0:14:43.440 --> 0:14:48.680 has made a volatile situation even more volatile and very concerning. Well, 0:14:48.960 --> 0:14:51.720 I mean, can we get any sense of how it 0:14:51.920 --> 0:14:55.280 is being received by voters by how this news is 0:14:55.360 --> 0:14:58.560 being covered by the French media. Well, I think this 0:14:58.720 --> 0:15:01.400 happened so quick ly, and the thing that was very 0:15:01.520 --> 0:15:05.040 dramatic was it actually occurred during the last presidential debate, 0:15:05.440 --> 0:15:09.000 which was taking place last night when it occurred, and 0:15:09.080 --> 0:15:12.400 so they were very very quickly responding. Our French of 0:15:12.520 --> 0:15:15.680 the campaign has been suspended today and in a way 0:15:15.800 --> 0:15:18.760 this may sort of perhaps calm things a little bit 0:15:18.960 --> 0:15:22.760 down right now, the media seems to be responding in 0:15:22.880 --> 0:15:25.960 France almost hour by hours. More information is coming in. 0:15:26.480 --> 0:15:29.760 The candidates are not making any statements, except for the 0:15:29.880 --> 0:15:34.520 extreme left wing communist candidate Menancham, who said he will 0:15:34.600 --> 0:15:38.960 continue to give us speeches and rally his supporters, which 0:15:39.120 --> 0:15:41.960 may actually work against him. And may be seen as 0:15:42.040 --> 0:15:45.520 exactly the wrong response. Uh so this is kind of 0:15:45.600 --> 0:15:49.120 where we're at. The French press is again sort of 0:15:49.200 --> 0:15:52.240 a little bit all over the place right now, difficult 0:15:52.320 --> 0:15:56.800 to know exactly how they said. Definitely this is good. 0:15:57.040 --> 0:16:00.200 Unfortunately for Marie Lepine. We knew that she would make 0:16:00.240 --> 0:16:02.720 it through the first round. She may make it now 0:16:02.880 --> 0:16:07.520 with support That actually increases The question is does Felon 0:16:08.040 --> 0:16:12.760 or does the new young centrist candidate Emmanuel McColl who 0:16:12.880 --> 0:16:16.560 was supposed to have about which one of those two 0:16:16.880 --> 0:16:21.640 really make it into the into the contention with mariein 0:16:21.720 --> 0:16:24.000 Rapin That is really going to be the big question. 0:16:24.080 --> 0:16:26.800 Now we don't know at this point. I mean, does 0:16:26.880 --> 0:16:31.160 it matter who wins the election because the French parliamentary 0:16:31.280 --> 0:16:34.760 system is such that perhaps the power of the president 0:16:34.800 --> 0:16:38.680 would be limited to let's say, move forward with changes 0:16:38.760 --> 0:16:42.760 to the French participation in the European Union. Well, I 0:16:42.920 --> 0:16:47.000 think um in a way, in part portion fortunately and unfortunately, actually, 0:16:47.080 --> 0:16:50.360 the French presidency is quite a bit stronger than the 0:16:51.480 --> 0:16:55.800 system which is much more faction based in other European countries. 0:16:56.200 --> 0:16:59.800 So the powers of the president are fairly large in France. 0:17:00.080 --> 0:17:02.320 It's also the president who would clearly be picking his 0:17:02.440 --> 0:17:06.040 cabinets prime minister if it was Matthin Lepan because of 0:17:06.119 --> 0:17:09.880 her really dangerous and incoherent economic program. It would also 0:17:09.920 --> 0:17:13.159 immediately create a huge shock on the markets and a 0:17:13.280 --> 0:17:15.399 huge shock on what would be seen as the future 0:17:15.440 --> 0:17:18.040 of France, the future of the European Union at that point. 0:17:18.760 --> 0:17:21.879 So I think it does make an enormous difference, uh, 0:17:22.280 --> 0:17:25.480 even before we start to look at the more complex 0:17:25.840 --> 0:17:29.639 makeup of the of the parliamentary grouping. I mean, you 0:17:29.720 --> 0:17:34.360 know you mentioned that the attack happened during a presidential debate. 0:17:34.920 --> 0:17:38.760 Was that intentional? We don't know, you know. I I 0:17:38.960 --> 0:17:42.200 think the horrible thing is that at this point it 0:17:42.320 --> 0:17:45.600 seems that a lot of these attacks may be very 0:17:45.680 --> 0:17:49.680 much premeditated orchestrated. It seems that information is coming out 0:17:49.800 --> 0:17:52.960 very quickly, hard to know. May very well be the 0:17:53.080 --> 0:17:56.760 case because the attack that was actually aborted in March 0:17:56.880 --> 0:17:59.800 SI was the purpose of it was presumingly to dis 0:18:00.040 --> 0:18:03.639 rupted the presidential election. Um, so this this may have 0:18:03.800 --> 0:18:07.680 some link. I mean the election, the first round takes 0:18:07.720 --> 0:18:12.760 place on Sunday, and then the second round is May seven. 0:18:13.600 --> 0:18:16.920 Do you know if the European Union has any plan 0:18:17.520 --> 0:18:21.159 for response if Marine Lepan and the far left candidate 0:18:21.440 --> 0:18:25.080 Jean mcmlchan actually make it to that May seventh runoff. 0:18:25.400 --> 0:18:29.720 I am not sure at this point. I think actually 0:18:30.280 --> 0:18:33.080 everyone sort of is is just kind of holding their 0:18:33.160 --> 0:18:36.399 breath uh and doesn't want in any way to step in. 0:18:36.560 --> 0:18:39.879 The problem is that any comments or remarks or statements 0:18:40.080 --> 0:18:43.520 coming out of the European Union may in fact only 0:18:43.680 --> 0:18:48.600 worsen uh the anti EU approach that Marine Leepan already has. 0:18:48.640 --> 0:18:51.840 It may just increased support uh, and she'll certainly play 0:18:51.920 --> 0:18:54.920 on that. So I think everyone will try to stay 0:18:55.080 --> 0:18:57.800 as far away as possible. That's why it was even 0:18:57.840 --> 0:19:01.159 a little bit disturbing that Obama decided to call the 0:19:01.280 --> 0:19:06.240 Centers candidate mccon This was not necessary yesterday because one 0:19:06.320 --> 0:19:08.720 of the issues is McCall is often already accused of 0:19:08.800 --> 0:19:11.639 being a little bit babst pro American because Mopolitan this 0:19:11.840 --> 0:19:15.000 doesn't help. Well, thank you, we really we we. Unfortunately 0:19:15.040 --> 0:19:16.600 we have to leave it there. Thank you so much 0:19:16.640 --> 0:19:20.119 for your comments. Professor Irene Finilla hanig Mans adject professor 0:19:20.240 --> 0:19:24.440 of International Affairs at Columbia University based in New York City, 0:19:24.520 --> 0:19:28.280 talking about the attack in Paris and the ripple effects 0:19:28.320 --> 0:19:42.000 into the ongoing election. Well, let would be the first 0:19:42.040 --> 0:19:44.680 to wish you a happy earth Day. It's a little 0:19:44.680 --> 0:19:48.520 bit premature, but tomorrow is earth Day is celebrated worldwide. 0:19:48.880 --> 0:19:53.000 It was first celebrated in nine seventy and one of 0:19:53.040 --> 0:19:55.439 the questions that comes up is why is the United 0:19:55.520 --> 0:19:58.679 States so far behind when it comes to recycling materials. 0:19:59.000 --> 0:20:01.359 Here to tell us in give us more information about 0:20:01.400 --> 0:20:03.840 Earth Day is Jim Fishy is the chief executive of 0:20:04.000 --> 0:20:07.040 Waste Management. Jim, thanks very much for for coming in. 0:20:07.160 --> 0:20:09.320 I was looking up some statistics and it turns out 0:20:09.400 --> 0:20:13.560 that in the United States we've got low landfill fees, 0:20:14.040 --> 0:20:17.080 plus we've got a fragmented waste management system, and that 0:20:17.240 --> 0:20:21.240 just puts our rate at recycling at like that seems 0:20:21.359 --> 0:20:23.959 very low. You know, I think it's I think you're right. 0:20:23.960 --> 0:20:26.320 I think it is lower than we'd like. And part 0:20:26.359 --> 0:20:28.200 of our objective is to try and get people to 0:20:28.440 --> 0:20:31.359 truly recycle more. I mean, and and that sounds a 0:20:31.359 --> 0:20:33.800 little cliche, but what I mean by that is put 0:20:33.920 --> 0:20:37.720 every plastic bottle, put every piece of cardboard and mixed paper, 0:20:38.040 --> 0:20:41.840 put every can in your recycle bin. Unfortunately, our model 0:20:42.440 --> 0:20:46.040 is one that encourages people to also put, in addition 0:20:46.119 --> 0:20:49.840 to recycling and recycle materials, put trash because it's a 0:20:50.000 --> 0:20:52.639 it's a you have a bin that basically collects everything, 0:20:52.720 --> 0:20:55.760 and and so there's an education process that's required of 0:20:55.880 --> 0:20:58.760 us to let people know that that your garden hose 0:20:58.960 --> 0:21:02.280 and your Christmas Lie's and your garden rake, it is 0:21:02.359 --> 0:21:05.560 kind of seasonal, by the way, those things don't necessarily 0:21:05.680 --> 0:21:08.880 go through a recycled plan. So how does your company 0:21:09.160 --> 0:21:13.000 deal with those garbage items that get mixed up with 0:21:13.080 --> 0:21:15.320 the recycling, Well, it ends up coming up a big 0:21:15.359 --> 0:21:18.840 conveyor belt and then it gets either hand or machine separated, 0:21:19.320 --> 0:21:21.760 and that that garden hose. Hopefully the garden hose doesn't 0:21:21.760 --> 0:21:23.960 wrap around the wheel and shut down the entire plant, 0:21:24.160 --> 0:21:27.159 which does happen, but a lot of that materially, the 0:21:27.200 --> 0:21:30.600 garden rake tends to get typically gets pulled off manually 0:21:31.119 --> 0:21:33.639 and goes into the trash. And so when we think 0:21:33.640 --> 0:21:36.960 about what's what's recycled, we've got to make sure that 0:21:37.080 --> 0:21:41.040 that's what's recycled truly becomes something else. That's the definition 0:21:41.080 --> 0:21:43.560 of recycling is that you take a plastic bottle and 0:21:43.640 --> 0:21:46.600 turn it into another plastic battle or some other use. 0:21:47.119 --> 0:21:50.040 So well, let's talk about that. So when you talk 0:21:50.119 --> 0:21:54.160 about recycling, when you talk about the rate that Pim 0:21:54.320 --> 0:21:58.200 just cited, does that mean that sort of people effectively 0:21:58.520 --> 0:22:02.240 sort a cent of their garbage or does it meant 0:22:02.960 --> 0:22:06.200 of the garbage is taken and then we've we we 0:22:06.359 --> 0:22:09.120 processed into something else that can be used. It's really 0:22:09.160 --> 0:22:12.240 the ladder. I mean, you know, people look at diversion 0:22:12.560 --> 0:22:15.480 and and diversion means that the first step away from 0:22:15.520 --> 0:22:18.719 the curb is someplace other than a landfill. So if 0:22:18.760 --> 0:22:21.439 I if I take a percent of my material at 0:22:21.480 --> 0:22:23.880 my house and put it into my recycle bin, then 0:22:24.560 --> 0:22:27.560 then I have diverted a percent of my material by 0:22:27.640 --> 0:22:30.960 that definition. Unfortunately, what happens is when it gets to 0:22:31.000 --> 0:22:33.359 the recycled plant half of it. If that's how much 0:22:33.400 --> 0:22:36.080 of my trash of are my recycled binness trash, half 0:22:36.080 --> 0:22:38.280 of it ends up ultimately going to a landfill anyway. 0:22:38.760 --> 0:22:40.880 And our goal is to make sure that people understand 0:22:40.920 --> 0:22:43.920 that the goal is not to divert a the goal 0:22:44.040 --> 0:22:47.760 is to recycle ad and that means turn that into 0:22:47.880 --> 0:22:50.840 something of use on the back end, not just send 0:22:50.920 --> 0:22:52.680 it to a recycle plant so that they can pull 0:22:52.720 --> 0:22:55.399 that garden rake out and ultimately send that garden rate 0:22:55.440 --> 0:22:59.200 to a landfill. Are the recycling plants that currently exist, 0:22:59.280 --> 0:23:03.000 are they at equated? No, they're not. The recycled plants 0:23:03.040 --> 0:23:06.080 that we have are are have new technology. We're refreshing 0:23:06.160 --> 0:23:09.160 that technology as we go. We're putting things like optical 0:23:09.240 --> 0:23:13.200 sorters in that that read the types of plastic coming 0:23:13.280 --> 0:23:15.879 up that that conveyor belt. But there is a lot 0:23:15.960 --> 0:23:18.320 of material that comes up the conveyor belt, and and 0:23:18.440 --> 0:23:21.760 it ranges from things like those garden hoses to bowling 0:23:21.800 --> 0:23:25.879 balls and and and really everything out of the sun. So, uh, 0:23:26.160 --> 0:23:29.400