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P&L: Lieberman Says We'll See a Strong Third Party Before 2020 · Bloomberg Intelligence

• 0:04
  Speaker 1: Welcome to the Bloomberg pm L podcast. I'm Pim Fox.
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  Speaker 1: Along with my co host Lisa Abramowitz. Each day we
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  Speaker 1: to bring in former Senator Joe Lieberman. Uh. You have founded,
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  Speaker 1: or you're the co chairman of a nonpartisan advocacy group
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  Speaker 1: called No Labels that's meeting um to sort of figure
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  Speaker 1: out how to chart a center political new way forward.
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  Speaker 1: Can you tell us a little bit about how this
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  Speaker 1: came about? Sure, can, and thanks for having me on.
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  Speaker 1: We're holding a big conference were calling at the summit.
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  Speaker 1: We actually called it seven after the year of the
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  Speaker 1: Constitutional Convention, to remind everybody that the people at the
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  Speaker 1: Constitutional Convention had tremendous disagreements. They almost broke up with
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  Speaker 1: three or four times, but they came to the center
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  Speaker 1: and negotiated a compromise in the national interest. Uh, and
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  Speaker 1: therefore we have our country. We haven't our leaders and
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  Speaker 1: representatives in Washington haven't been doing that for too long,
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  Speaker 1: and therefore a lot of our problems have gone unsolved
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  Speaker 1: and a lot of opportunities not seized to make life better.
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  Speaker 1: And a lot of that expressed itself in the election
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  Speaker 1: where uh Donald Trump was elected. Really, in my opinion,
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  Speaker 1: is a change candidate against the status quo and maybe
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  Speaker 1: somebody who based on his business background, could could make
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  Speaker 1: things work. And so today no labels means put aside
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  Speaker 1: your label a Democrat, Republican, liberal, conservative, where all Americans
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  Speaker 1: let's work together to get something done for the country.
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  Speaker 1: We're announcing today uh fifty members of Congress, pretty evenly
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  Speaker 1: divided between Republicans and Democrats, whore signed on to working
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  Speaker 1: together across party lines. And we're also um building a
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  Speaker 1: political Action committee to support people in Congress who stand
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  Speaker 1: up to their party leadership or interest groups and and
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  Speaker 1: vote in a way that they think is best for
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  Speaker 1: their constituents or their country. We think the election of
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  Speaker 1: Donald Trump really shakes up the system in a way.
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  Speaker 1: I didn't support them, but I would tell you it
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  Speaker 1: shakes up the system in a way that gives us
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  Speaker 1: an opportunity to help him do what we think he
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  Speaker 1: wants to do well. And and speaking about that election,
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  Speaker 1: Senator Lieberman, do you think that these first steps are
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  Speaker 1: sort of the beginnings of a new political party that's
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  Speaker 1: not where that's the Grant's a great question. A few
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  Speaker 1: people here have raised the question in our feeling. Governor
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  Speaker 1: Huntsman of Utah, the former governor Republican and I have
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  Speaker 1: our co chairs. That's not our intention. Our intention really
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  Speaker 1: is to make the two party system work better, like
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  Speaker 1: it has for a lot of our history, and it
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  Speaker 1: always does when the center right and the senator left
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  Speaker 1: gets together. But I'll tell you if something like this
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  Speaker 1: doesn't work to help the government produce for the American people,
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  Speaker 1: I think there will be a third party before the
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  Speaker 1: next presidential election, and it will be a contender. It
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  Speaker 1: will be a strong party. Senator Lieberman, what if you
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  Speaker 1: could point to some specific goals you have. I note,
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  Speaker 1: for example, that no Labels has called for a bipartisan
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  Speaker 1: seating at the State of the Union address. I mean,
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  Speaker 1: is that the kind of stuff that you think people
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  Speaker 1: really want you to come together on. Well, that's really
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  Speaker 1: small process things, uh, And it can't hurt and that's
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  Speaker 1: happened over over the years. But the truth is, are
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  Speaker 1: are we? We are really about process. But we for
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  Speaker 1: the first time put out what we call a national
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  Speaker 1: Strategic Agenda, and we try to form four big goals
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  Speaker 1: for the country and uh state them in a way
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  Speaker 1: that that most Republicans and Democrats could at least agree
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  Speaker 1: on the goal. And then you start to negotiate. So,
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  Speaker 1: what are the goals? Million new jobs in ten years.
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  Speaker 1: Actually that's a goal that President Electrump was already embraced. Second,
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  Speaker 1: but it's that But that's never not a goal, right,
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  Speaker 1: I mean, you never come out and hear people say, oh, no,
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  Speaker 1: we don't want to create jobs. So what is different
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  Speaker 1: about your approach than the approach that other presidents and
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  Speaker 1: the current president elective status? Okay, fair question. And and
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  Speaker 1: here's what we're saying with these four goals. When you
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  Speaker 1: when you're not doing anything, when your business is failing
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  Speaker 1: or whatever, Uh, the first thing you try to do
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  Speaker 1: is decide where do we want to go? We said goals.
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  Speaker 1: And in the political process, if you can get people
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  Speaker 1: to buy into the goals, then you can sit down
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  Speaker 1: and negotiate how you're going to achieve as much of
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  Speaker 1: those goals as you possibly can. And and that's why
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  Speaker 1: we started there. Incidentally, we invited all the presidential candidates
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  Speaker 1: to a convention we hold in New Hampshire last year.
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  Speaker 1: Donald Trump was one of eight to address us. At
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  Speaker 1: that time they were over twenty running, and he accepted
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  Speaker 1: are he signed our pledge to go for one of
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  Speaker 1: these goals, and what it means is to convene a
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  Speaker 1: process of leaders, hopefully in both parties in Congress, to
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  Speaker 1: begin to negotiate one of the problems in Washington. Has
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  Speaker 1: too many people in Congress today or in the White
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  Speaker 1: House have said, I'm only gonna accept this if it's
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  Speaker 1: exactly the way I want it, if it's a dent
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  Speaker 1: of what I want. And when you do that, you
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  Speaker 1: usually end up with zero percent. And of course it's
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  Speaker 1: the country that suffers. Senator Lieberman, do you think that
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  Speaker 1: it was a mistake for the Democrats to reelect or
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  Speaker 1: re select Nancy Pelosi as the as a minority leader
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  Speaker 1: of the United States House of Representatives. Again, Well, and
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  Speaker 1: that's up to the House Democrats. I know, I don't.
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  Speaker 1: I don't think it's really I wouldn't say it's a mistake.
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  Speaker 1: I think the question is, now, what are the House
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  Speaker 1: Democrats do and what are the House Republicans do it. Look,
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  Speaker 1: I've talked to members of Congress of both political parties
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  Speaker 1: since the election, and their voices in each caucus that
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  Speaker 1: are are all too familiar. Some Democrats are saying, we
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  Speaker 1: must go into resistance, we must oppose everything that President
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  Speaker 1: Trump passed Ford and then some Republicans are saying, let's
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  Speaker 1: do what Obama did at the beginning of his term.
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  Speaker 1: Let's just ram it down the Democrats throats. We've got uh,
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  Speaker 1: we've got majorities in both houses. Well, if that, if
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  Speaker 1: those voices dominate, then really nothing's gonna get done. And
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  Speaker 1: and President Trump will not have the record I think
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  Speaker 1: he wants to have, and the country will not have
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  Speaker 1: the help that it voted for in the last election.
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  Speaker 1: So really it depends on what leaders Polosi, Ryan McConnell
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  Speaker 1: and Schumer do. Uh and um, that's what we want
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  Speaker 1: to help him do it, which is the right thing?
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  Speaker 1: One If you could speak to the issue of combining
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  Speaker 1: the work that the Department of Defense does along with
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  Speaker 1: the veterans administration, I know that's one of your goals
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  Speaker 1: of combining records. Why you want to do that? Oh,
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  Speaker 1: outside of our playbook. And let me just say about
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  Speaker 1: the playbook that we we combined. Uh, we actually tested
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  Speaker 1: a lot of ideas. Some of them are big, some
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  Speaker 1: of them are kind of middle sizes are small. But
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  Speaker 1: the each command majority support from the American people, and
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  Speaker 1: that was one of But what about the Congress. You
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  Speaker 1: think they're going to pass this? Well hopefully, Uh, you know,
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  Speaker 1: because it does. It makes sense that it saves money
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  Speaker 1: and it probably and it serves both the active duty
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  Speaker 1: military and the veterans better. It avoids the sort of
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  Speaker 1: spending twice for the same kind of record keeping. I
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  Speaker 1: want to thank you very much. Former US Senator, Democrat
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  Speaker 1: and independent from a Connecticut, former vice presidential candidate Joe Lieberman.
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  Speaker 1: He is the coach chairman of No Labels. All right,
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  Speaker 1: we're gonna learn more about the world of a Wall
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  Speaker 1: Street analysts. We have Land and Nuyen are Bloomberg FX
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  Speaker 1: reporter joining us now, Lanna and thanks very much for
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  Speaker 1: coming in. Uh seventeen cat fines that will slay you
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  Speaker 1: every time. No, that may not be the headline of
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  Speaker 1: a Bank of America Mary Lynch report, but it might
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  Speaker 1: be one day. Well, they haven't stooped quite that far yet, PIM.
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  Speaker 1: But what analysts are trying to do here is really
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  Speaker 1: trying to hook readers. They're trying to make bold, short
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  Speaker 1: calls in contrarian reports. So I spoke to David wu
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  Speaker 1: from Bank of America and uh, he's very feisty, as
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  Speaker 1: you know. Um, but I think the bank is trying
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  Speaker 1: to spread this ethos across all of its analysts have
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  Speaker 1: some guts. If you have an interesting call, you go
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  Speaker 1: all the way, don't play it safe, and don't reel
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  Speaker 1: it back to be part of the consensus. Okay, So
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  Speaker 1: if they haven't gone as low as seventeen cat fines
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  Speaker 1: that will slay you every time. How low have they gone?
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  Speaker 1: I don't know if it's low, but they've done what
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  Speaker 1: we in the news business do. They've got you know,
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  Speaker 1: focused on shorter reports, tighter stories, and um, you know,
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  Speaker 1: tighter thematic pieces and better headlines. I think so why now,
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  Speaker 1: why is there this push to sort of be more
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  Speaker 1: consumer friendly? Well, if you know, they're listening to what
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  Speaker 1: happened after the financial crisis, a lot of people have
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  Speaker 1: lost their jobs. There are fewer people out there churning
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  Speaker 1: out these twenty page, you know, thirty page reports. So
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  Speaker 1: they really got to be smarter with their time, get
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  Speaker 1: people reading the reports, and build a following by being amusing,
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  Speaker 1: being interesting, and lighthearted in addition to obviously being smart.
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  Speaker 1: For your story, you spoke with the global research head
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  Speaker 1: of Bank of America, Merrill Lyncha Candice Browning. What did
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  Speaker 1: she say? She was interesting? She said, basically, I want
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  Speaker 1: my people to be bold. I want them to talk
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  Speaker 1: about what's not already price in the market. I want
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  Speaker 1: them to be out of consensus, not just you know,
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  Speaker 1: going against consensus for the sake of it, but really
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  Speaker 1: um looking to see what the next move in the
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  Speaker 1: market is going to be. Because everything that's in the
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  Speaker 1: market and in the price right now is already priced in.
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  Speaker 1: So um. She was pretty tough about that. She said,
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  Speaker 1: make a big call, you know, stand out from the herd,
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  Speaker 1: or else you won't stick arount and catchy titles, right.
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  Speaker 1: I mean, for example, one report, I guess it was
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  Speaker 1: published what last year last November called the Great Divorce? Right?
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  Speaker 1: This was written by Mr Woo. Yes, well, so my
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  Speaker 1: question is how do these analysts make money for the banks,
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  Speaker 1: and how much of that is the issue here? So
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  Speaker 1: right now, they make money for the bank by being
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  Speaker 1: part of an add on service of perks. Right, So
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  Speaker 1: if you and I do a deal and Bank America
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  Speaker 1: as your bank, then probably the third research in on
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  Speaker 1: the side without a separate fee. It's just part of
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  Speaker 1: the cost of being a client. But eventually banks may
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  Speaker 1: need to, especially in Europe, we'll we'll need to start
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  Speaker 1: charging a fee, either directly or as part of a
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  Speaker 1: commission for research. So it means that the researchers have
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  Speaker 1: to really jostle to stand out because eventually you may
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  Speaker 1: have to put a price tag on each research report.
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  Speaker 1: So that's that's really the issue here is that increasingly
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  Speaker 1: there has to be justification for this research and its value,
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  Speaker 1: and there has to be a loyal following otherwise it
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  Speaker 1: could very well get cut. Precisely, it's the quality of
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  Speaker 1: the ideas, but it's also the following of the analysts
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  Speaker 1: and the ability of the analysts to engage the readers,
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  Speaker 1: which sometimes means they have to put in some song
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  Speaker 1: lyrics or use Bob Dylan as a you know, a
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  Speaker 1: way to hook readers. Obviously the analysis has to be
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  Speaker 1: good as well, but it doesn't hurt to, you know,
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  Speaker 1: throw in a couple of fun touches. So does this mean,
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  Speaker 1: for example, that we're going to hear Kit Jukes of
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  Speaker 1: Associotation Arel and he's been a guest on Bloomberg for
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  Speaker 1: a variety of subjects. Does that mean he's going to
• 11:53
  Speaker 1: start to sing those Bob Dylan lyrics as well as
• 11:56
  Speaker 1: Latin proverbs as he offers him in his notes to clients.
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  Speaker 1: I don't know if he'll sing them in audio form,
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  Speaker 1: but he's certainly one person that if you want to
• 12:06
  Speaker 1: model UH analyst research with flair, definitely look at Kit Jukes.
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  Speaker 1: Was just looking right now. His current report from today
• 12:13
  Speaker 1: compares the US dollar to the myth of Icarus, So
• 12:16
  Speaker 1: you know, he's very literary in addition to being pretty
• 12:19
  Speaker 1: musical as well. Um So, going forward, is there a
• 12:22
  Speaker 1: particular area, a particular subject of analysis that lends itself
• 12:28
  Speaker 1: to lyrics and is it? Is it f X or
• 12:32
  Speaker 1: is it across all this? I think it's across all disciplines.
• 12:34
  Speaker 1: I think if you're writing about financial markets, which can
• 12:37
  Speaker 1: be very technical, you need to throw a little spice
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  Speaker 1: in there that doesn't hurt in any discipline to write
• 12:42
  Speaker 1: with a flair and entertainment in addition to good analysis
• 12:45
  Speaker 1: and smart comments. Lenan Nunion, thank you so much. For
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  Speaker 1: joining us. Lenan Nunion h f X reporter here at
• 12:52
  Speaker 1: Bloomberg News. Really fascinating story about how the culture is changing,
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  Speaker 1: not just among mainstream media but also on Wall Street.
• 13:13
  Speaker 1: I want to bring in my colleague by Bloomberg Gadfly
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  Speaker 1: fellow columnist Marcus Ashworth. He is in London covering European
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  Speaker 1: Marcus markets, and Marcus, thank you so much for being
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  Speaker 1: with us. Uh. You know, I've got to say I'm
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  Speaker 1: sort of surprised at the lack of a market reaction
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  Speaker 1: to the Italian referendum. Yes, this has been sort of expected. Yes,
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  Speaker 1: people were saying it's not as big of an issue
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  Speaker 1: as Brexit or the U S presidential vote. But even still,
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  Speaker 1: I think you might finance because the European Central Bank
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  Speaker 1: of learned their lessons and they know how to control
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  Speaker 1: markets ever better. So I think certainly there was the
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  Speaker 1: central banks are in very early supporting the bond market.
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  Speaker 1: And wait, you're saying that actually that they were buying
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  Speaker 1: that the Europeans on Bank was out there buying actively
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  Speaker 1: buying both the euro as well as as well as
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  Speaker 1: potentially government bonds, don't I don't know in the currency
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  Speaker 1: and I would doubt that on the currency secret no, no, no,
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  Speaker 1: that that they would be buying the Italian government bonds UM,
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  Speaker 1: and that would be something which is reasonably widely expected.
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  Speaker 1: They had flagged it up beforehand, and though I cannot
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  Speaker 1: confirm for sure, it seems all likelihood would point to that,
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  Speaker 1: and the price action would would suggest that no one's
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  Speaker 1: prepared to use the expression and fight the FED. But
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  Speaker 1: it's the same sort of story here the Youran Central
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  Speaker 1: Bank and made it very clear that are on a
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  Speaker 1: negative reaction, they would be in supporting their perfectly titled
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  Speaker 1: to It's all part of their PSPP public sector purchasing program,
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  Speaker 1: and we may find out on Thursday that they could
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  Speaker 1: even increase UM or tweak the purchasing of Italian bonds
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  Speaker 1: pro rata all the other bonds, and indeed extend QUEWI
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  Speaker 1: as well. So this is this was to be expected, um.
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  Speaker 1: Even so, though I agree with you in a sense
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  Speaker 1: that everyone had expecting a wilder reaction, and it really
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  Speaker 1: wasn't until the States came in when they wanted to
• 15:15
  Speaker 1: sell bonds off anyway, that there's been a little bit
• 15:17
  Speaker 1: more price action for the downside. Well, and sort of
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  Speaker 1: to your point, yes, Italian government debt could be purchased
• 15:24
  Speaker 1: by the European Central Bank. But I'm looking at Manto
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  Speaker 1: Paschi bonds and they dropped, yes, but they dropped by
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  Speaker 1: less than three cents on the dollar, which was surprising.
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  Speaker 1: You know, there was not a huge move in other words, um,
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  Speaker 1: and there was all this talk about Italian banking crisis
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  Speaker 1: leading up to this vote, where people just wrong or
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  Speaker 1: is there still potentially more risk here than people are
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  Speaker 1: pricing in. Um. Yeah, the liquidity or illiquidity on mont
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  Speaker 1: Apache is to be seen to be believed. It's completely
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  Speaker 1: controlled market. That's just a by bond by back, so
• 15:56
  Speaker 1: anyone wish to get out had their chance. Now it's
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  Speaker 1: a very care controlled market because they're about to do
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  Speaker 1: a major stock recapitalization. So um, it's impressive, but I
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  Speaker 1: think the lead managers on on the equity deal will
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  Speaker 1: be keeping a very careful eye on on price and
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  Speaker 1: most of a passion. The reality is is that the
• 16:17
  Speaker 1: authorities or the lead managers want to come in and
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  Speaker 1: buy a chunk of these bonds with the market sharply
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  Speaker 1: upwards so that there's less active short sellers and these
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  Speaker 1: types of things. Is that's very hard to sort of
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  Speaker 1: get liquidity on these types of results. Marcus, I want
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  Speaker 1: if you could come into on the reaction from other
• 16:34
  Speaker 1: European governments and markets to the Italian vote. Yeah, I
• 16:39
  Speaker 1: think that's it's all around. It's it's we've taken some
• 16:43
  Speaker 1: of the political risk out because even though it was
• 16:46
  Speaker 1: the worst result expected in some senses, Um, it would
• 16:50
  Speaker 1: be very carefully controlled both by the e CP beforehand.
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  Speaker 1: And I think you know Italy has been here before
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  Speaker 1: with technocratic governments in Ramsey him in and not necessary
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  Speaker 1: on a full man day anyway. So and that last,
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  Speaker 1: I think that the last popularly elected prime minister in
• 17:07
  Speaker 1: Italy was Sylvia Berlsconi back in two thousand and eight.
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  Speaker 1: They have not had a popularly elected government for eight years. Indeed,
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  Speaker 1: So in that sense that we have seen this movie before, Um,
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  Speaker 1: the Finance minister probably or someone either that or the
• 17:21
  Speaker 1: Culture minister or possibly one of the Senate leaders will
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  Speaker 1: come in. So UM, you know that it's not going
• 17:26
  Speaker 1: to be any rash decisions made. That the president is
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  Speaker 1: has the electoral ability to control when elections are called
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  Speaker 1: to a degree, Um, and I think that they will
• 17:37
  Speaker 1: try everywhere they possibly can. The one thing is a surprise,
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  Speaker 1: I suppose, is the size of the vote that it's
• 17:43
  Speaker 1: it's quite clear that Renzi is going to step down permanently,
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  Speaker 1: whereas it had been expected he might have been a
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  Speaker 1: sort of called back, a bit like James Brown too,
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  Speaker 1: to come back to the stage. But doesn't look like that.
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  Speaker 1: His career is probably over for now. Marcus, your point
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  Speaker 1: about the liquidity and Monte Depachis is an important one,
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  Speaker 1: and just more broadly looking at the market, I mean,
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  Speaker 1: is there a particular gauge that you are looking at
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  Speaker 1: to indicate truly the level of risk or so that
• 18:11
  Speaker 1: you think of is the most accurate reflection of of
• 18:14
  Speaker 1: the risk out there. Honestly, probably the best thing to
• 18:17
  Speaker 1: look at in this sense, because the bond market is
• 18:19
  Speaker 1: so liquid and so tightly controlled and kepting, is the
• 18:21
  Speaker 1: equity price, because that's what's going to be raised five times.
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  Speaker 1: But not just with Mount Tapache, but in general. I
• 18:28
  Speaker 1: was looking at Italian financial stocks this morning and they
• 18:31
  Speaker 1: were down, but not by that much. There's still above
• 18:34
  Speaker 1: the average since the beginning of to Lie, So it
• 18:36
  Speaker 1: doesn't seem to be that people are pricing in any
• 18:38
  Speaker 1: any kind of banking crisis well, I thought they are
• 18:41
  Speaker 1: from there they are that they're doing in a different
• 18:43
  Speaker 1: way because the worst case scenario Italy can't can't bail
• 18:47
  Speaker 1: itself out as it's trying to without state aid. But
• 18:51
  Speaker 1: it's Atlante bailout fund and by this UM non public
• 18:56
  Speaker 1: sector bailout of Montitapache, which will involve five times equity
• 19:00
  Speaker 1: recap potentially, you know, was supposed to be announced from today. Um.
• 19:06
  Speaker 1: The only other way out is as a major state bailout.
• 19:09
  Speaker 1: I mean, Spain had a sort of forty billion hand
• 19:11
  Speaker 1: out from the EU and obviously that's what Renzi was
• 19:13
  Speaker 1: trying to avoid. But the the reality of things have
• 19:16
  Speaker 1: got so bad down here that um, if they weren't
• 19:19
  Speaker 1: able to make it a private sector bailout, then there
• 19:22
  Speaker 1: would be a bailion of junior bond holders and there
• 19:24
  Speaker 1: would be a some form of states EU lead all
• 19:28
  Speaker 1: around package for indeed, for UM for the whole banking sector,
• 19:34
  Speaker 1: and it wouldn't us be once of the past, you
• 19:36
  Speaker 1: would be a much wider thing. But you know, UNI
• 19:38
  Speaker 1: Credit got a result this morning. It sold its pioneer
• 19:41
  Speaker 1: asset management unit to very large French concern a Mundy,
• 19:47
  Speaker 1: which manages over a trillion euros. So in that sense,
• 19:49
  Speaker 1: that's that's that's the progress. They're instant timing and announcing
• 19:52
  Speaker 1: it there, so that I think there's every chance still
• 19:55
  Speaker 1: that this deal is going to get away. It just
• 19:57
  Speaker 1: needs to convince a a corner stone equity beds behind
• 20:01
  Speaker 1: Mount Apache that builds confidence that then have to sell
• 20:04
  Speaker 1: less of the equity than they were. We're thinking everything
• 20:08
  Speaker 1: trips favorably if a technocratic government comes in um and
• 20:13
  Speaker 1: seems to sort of level the playing field and we
• 20:15
  Speaker 1: can move on from this. But it's a very carefully,
• 20:17
  Speaker 1: very managed thing. And then you know, selling short monster
• 20:21
  Speaker 1: Apacchi bonds is is not really going to get you
• 20:24
  Speaker 1: very far. But one you can't borrow them, and to
• 20:26
  Speaker 1: that they've already had the major debt to equity switch.
• 20:29
  Speaker 1: So got it all right, Thanks very much. Marcus Ashworth
• 20:33
  Speaker 1: is a gad Fly columnist for Bloomberg News covering a
• 20:36
  Speaker 1: European markets and you know, Lisa, I was looking at
• 20:39
  Speaker 1: the Italian government debt public debt GDP. My favorite quote
• 20:44
  Speaker 1: of the day after Brexit it took three days from
• 20:46
  Speaker 1: markets to shake it off with Trump, three hours with
• 20:48
  Speaker 1: Italy three minutes. This is Bloomberg. Well, imagine that Italian
• 21:05
  Speaker 1: voters go to the polls and they vote no, want
• 21:08
  Speaker 1: a referendum to reform the way their government works. You'd
• 21:12
  Speaker 1: think that the euro would fall. Not so euro right
• 21:15
  Speaker 1: now higher by about a half percent versus the dollar
• 21:19
  Speaker 1: at one oh seven. Also the dollar weakening against the
• 21:22
  Speaker 1: British pound at one seven. Let's find out more from
• 21:26
  Speaker 1: Mark Chandler. He is Global head of Currency Strategy at
• 21:29
  Speaker 1: Brown Brothers Harriman. Alright, Mark Chandler, what's the answer. Why
• 21:32
  Speaker 1: is the euro rallying? Well? Two eason? Same? One. I
• 21:36
  Speaker 1: think is that this referendum results was largely expected. All
• 21:40
  Speaker 1: the polls that came out beforehand suggested that the referendum
• 21:44
  Speaker 1: was gonna be rejected, and it was rejected by about
• 21:47
  Speaker 1: basically a sixty vote. What this doesn't mean, though, and
• 21:51
  Speaker 1: this is I think the you're is able to rally,
• 21:53
  Speaker 1: is that does not mean that this is a victory
• 21:55
  Speaker 1: for the anti establishment of anti elite forces in Italy.
• 22:00
  Speaker 1: A former prime minister, Monty, who is also an EU commissioner,
• 22:03
  Speaker 1: came out against the referendum. So the members of Rendi's
• 22:07
  Speaker 1: own political party and the Commerce magazine, which is no liberal,
• 22:12
  Speaker 1: no like left wing kind of magazine. They also came
• 22:15
  Speaker 1: out against the referendum. And so I think that the
• 22:19
  Speaker 1: situation is, this is Italy. I mean, we're talking about
• 22:21
  Speaker 1: a country that has something like sixty three or sixty
• 22:24
  Speaker 1: four government since the end of World War Two. This
• 22:27
  Speaker 1: is not about populism and nationalism. This is about idiosyncratic
• 22:30
  Speaker 1: Italian things. And so Italian bonds have suffered, Italian stocks
• 22:35
  Speaker 1: have suffered. But after that knee jerk reaction, the euro
• 22:37
  Speaker 1: really hasn't. Yeah, the German finance minister had a great
• 22:41
  Speaker 1: quote basically saying, yeah, this is Italy. They know they're
• 22:45
  Speaker 1: they're used to this type of thing. They'll work it out. Um.
• 22:47
  Speaker 1: But there still is a lot of talk about how
• 22:50
  Speaker 1: this does empower a sort of anti European Union mentality.
• 22:54
  Speaker 1: And we certainly have more votes coming, uh, not least
• 22:57
  Speaker 1: of which is the is the French vote. I mean,
• 22:59
  Speaker 1: do you think that people will get concerned in the
• 23:02
  Speaker 1: upcoming months, are more concerned anyway about the breakup of
• 23:05
  Speaker 1: the Eurozone? Well, I think you know on Wall Street, Lisa,
• 23:08
  Speaker 1: and I think in many places in London people have
• 23:10
  Speaker 1: been skeptical about the monetary union since to get go.
• 23:14
  Speaker 1: I was one of those two people who didn't think
• 23:15
  Speaker 1: Greece is going to drop out either time, either in
• 23:17
  Speaker 1: two thousand and ten or a couple of years ago.
• 23:20
  Speaker 1: I think that people will get nervous. I think again,
• 23:22
  Speaker 1: like like we saw with this past weekend, though, that
• 23:24
  Speaker 1: they're focused on the wrong things. I thought that the
• 23:27
  Speaker 1: Austria elections for president, where the far right candidate had
• 23:31
  Speaker 1: had done very well in the earlier runoff in the spring,
• 23:35
  Speaker 1: I thought that was gonna be more important than the
• 23:36
  Speaker 1: Italian election. As far as those concerns about the e
• 23:38
  Speaker 1: MU goes next year, I think you're right. A lot
• 23:41
  Speaker 1: of people least are talking about the French election, how
• 23:44
  Speaker 1: well a PENN is running the polls. I want to
• 23:46
  Speaker 1: tell you that before we even get to the French election,
• 23:48
  Speaker 1: there'll be even a scarier election, and that is in
• 23:51
  Speaker 1: the Netherlands, where the far right party is running ahead.
• 23:54
  Speaker 1: In France, it seems to me that the other parties,
• 23:57
  Speaker 1: whether it's the Republican that they've sent, a right party
• 23:59
  Speaker 1: or a socialist, will end up in the second round
• 24:02
  Speaker 1: to do anything to stop the PEN from winning. You
• 24:05
  Speaker 1: don't have that same uh same history in the Netherlands.
• 24:09
  Speaker 1: So I'd be more worried about the Netherlands at this
• 24:11
  Speaker 1: point that I am about France or Germany for that matter. Mark,
• 24:14
  Speaker 1: can I just press you a little bit about your
• 24:16
  Speaker 1: description of the reason why the euro is rallying against
• 24:20
  Speaker 1: the dollar. I mean, you say that this was a
• 24:22
  Speaker 1: predicted result. Well, okay, if it was predicted, then why
• 24:26
  Speaker 1: is the euro rally? Why are people buying euros selling
• 24:30
  Speaker 1: dollars when you just said, first of all, it was predicted,
• 24:33
  Speaker 1: and second of all you say that, well it's Italy,
• 24:37
  Speaker 1: it's not a big deal because they're used to changing
• 24:39
  Speaker 1: governments and you have former prime ministers also coming out
• 24:43
  Speaker 1: in favor of a novo. What does that mean? Why?
• 24:45
  Speaker 1: Why is that connected to the euro? Then? Yep, So
• 24:48
  Speaker 1: I think that what happened is this. I think tim
• 24:50
  Speaker 1: that the euro had been on had been selling off
• 24:53
  Speaker 1: sharply since the election, but most recently the new good
• 24:57
  Speaker 1: news in the US, which would be the jobs data,
• 24:59
  Speaker 1: but also the whole slew of data that we've had
• 25:02
  Speaker 1: suggesting that the US economy didn't only grow well above
• 25:05
  Speaker 1: trend in Q three, but it's headed for another quart
• 25:07
  Speaker 1: of above trend growth and stopped having an effect on
• 25:10
  Speaker 1: the dollar. Why I think that. I mean, I mean
• 25:13
  Speaker 1: you have that, but then also have rising interest rates
• 25:15
  Speaker 1: in the United States. If you buy a tenure U
• 25:17
  Speaker 1: S government versus a tenure Italian, you're gonna be making
• 25:20
  Speaker 1: more money. Why wouldn't you want dollars instead of euros? Well,
• 25:23
  Speaker 1: I think that most people do still, But I think
• 25:25
  Speaker 1: that in the short rum, we've got to talk about
• 25:26
  Speaker 1: the different market segments, and I think that the short
• 25:28
  Speaker 1: term market participants are being to take profits on what
• 25:32
  Speaker 1: turned out to be a very large move in the euro,
• 25:34
  Speaker 1: coming down from one twelve one thirteen, we got down
• 25:37
  Speaker 1: to one oh five yesterday, which is a earlier today,
• 25:40
  Speaker 1: which is a new twenty month low. So yes, people
• 25:43
  Speaker 1: have been selling the euro. But now I think that
• 25:45
  Speaker 1: if the market some kind of rebound or some kind
• 25:48
  Speaker 1: of reaction to that. Thanks for listening to the the Bloomberg
• 25:56
  Speaker 1: P and L podcast. You can subscribe and listen to
• 25:59
  Speaker 1: interview us at iTunes, SoundCloud, or whatever podcast platform you prefer.
• 26:05
  Speaker 1: I'm Pim Fox. I'm out there on Twitter at pim Fox.
• 26:08
  Speaker 1: I'm out there on Twitter at Lisa Abramo. It's one
• 26:11
  Speaker 1: before the podcast. You can always catch US worldwide on
• 26:14
  Speaker 1: Bloomberg Radio