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AFL-CIO Won’t Support USMCA Without Mexico Wage Fix (Podcast) · Bloomberg Intelligence

• 0:02
  Speaker 1: Welcome to the Bloomberg Penel podcast. I'm Paul swing you.
• 0:05
  Speaker 1: Along with my co host Lisa Brahma Waits. Each day
• 0:07
  Speaker 1: we bring you the most noteworthy and useful interviews for
• 0:10
  Speaker 1: you and your money. Whether at the grocery store or
• 0:12
  Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple
• 0:15
  Speaker 1: podcast or wherever you listen to podcasts, as well as
• 0:17
  Speaker 1: at Bloomberg dot com. We have talked about President Trump's
• 0:24
  Speaker 1: what he calls his biggest trade negotiation achievement to date,
• 0:28
  Speaker 1: which is the U S m c A that is
• 0:31
  Speaker 1: the new NAFTA. But interestingly, the largest federation of unions
• 0:36
  Speaker 1: in the United States is going to oppose this deal
• 0:40
  Speaker 1: if there is an early vote called Joining us now
• 0:43
  Speaker 1: to talk about that and in general about the backdrop
• 0:47
  Speaker 1: for labor as Richard Trumka, president of the a f
• 0:50
  Speaker 1: l c I, oh, thank you so much for being
• 0:52
  Speaker 1: with us. So let's start with the U S m
• 0:55
  Speaker 1: c A trade agreement. Why won't the a f l
• 0:58
  Speaker 1: c I O support this this treaty if an early
• 1:02
  Speaker 1: vote is pursued. Well, first of all, the labor movement
• 1:05
  Speaker 1: is committed to ensuring that trade union deals benefit working people.
• 1:10
  Speaker 1: That requires you have strong labor provisions and strong enforcement provisions.
• 1:15
  Speaker 1: In order for this to work, Mexico has to abandon
• 1:19
  Speaker 1: its low wage model, and it requires Mexico to change
• 1:24
  Speaker 1: its laws, enforce its laws, and then have the resources
• 1:28
  Speaker 1: necessary and the will necessary to do that. If we're
• 1:32
  Speaker 1: forced to vote on NAP on the new NAFTA before
• 1:37
  Speaker 1: they have changed their laws, effectively put them in place,
• 1:40
  Speaker 1: and started to enforce them, we would have no choice
• 1:43
  Speaker 1: but to impose them because the old system, the old
• 1:46
  Speaker 1: low wage model of such jobs out of the United States,
• 1:50
  Speaker 1: would remain in place. So the agreement itself says they
• 1:54
  Speaker 1: have to be in place first. We don't want to
• 1:56
  Speaker 1: premature vote. If we're forced to, we would have to
• 1:59
  Speaker 1: oppose a that point. So, Richard, you talk about greater enforcement,
• 2:03
  Speaker 1: does that mean that the negotiations of the agreement need
• 2:06
  Speaker 1: to be opened back up the There are a number
• 2:11
  Speaker 1: of ways to do enforcement. In fact, the agreement so
• 2:14
  Speaker 1: far Paul could be looked at as having less enforcement
• 2:18
  Speaker 1: than previous agreements. And here's how under the current system,
• 2:23
  Speaker 1: you when of two countries have a dispute, they in panel,
• 2:27
  Speaker 1: they go to a mechanism that they go through. They
• 2:30
  Speaker 1: try to solve it. If they can't, they put together
• 2:34
  Speaker 1: a panel. That panel acts like an arbitrator. That arbitrator
• 2:38
  Speaker 1: makes a decision that is binding on them the new law,
• 2:41
  Speaker 1: the new negotiated. When abandoned those panels, either party has
• 2:46
  Speaker 1: the ability to block the paneling of those of the
• 2:49
  Speaker 1: panel and therefore block any mechanism. There's no no way
• 2:54
  Speaker 1: to enforce the Act at that point or the trade
• 2:56
  Speaker 1: agreement at that point, so it has to be changed.
• 2:59
  Speaker 1: You can do some of it in the implementing language. Uh.
• 3:02
  Speaker 1: And we've been told a lot of that will be done,
• 3:05
  Speaker 1: although we haven't seen it yet to be able to
• 3:08
  Speaker 1: evaluate it. If he didn't, it isn't done. It isn't changed. Uh.
• 3:12
  Speaker 1: And the ability to force the agreement isn't there. It's
• 3:15
  Speaker 1: a useless agreement and it will actually be worse than
• 3:18
  Speaker 1: the current When do we have Richard Trump cut from
• 3:21
  Speaker 1: your perspective? Is representing thousands of workers out there? Do
• 3:25
  Speaker 1: you think President Trump's policies have been good in general
• 3:29
  Speaker 1: for them? You know, if you look at things, uh objectively,
• 3:36
  Speaker 1: some of the stuff he's done, you could say that
• 3:39
  Speaker 1: he's made a lot of our members lives harder. You know,
• 3:43
  Speaker 1: he denied paychecks the federal workforce while he made him work.
• 3:48
  Speaker 1: He jammed through a corporate tax cut on the backs
• 3:51
  Speaker 1: of working people that encourages further outsourcing and automation. Uh.
• 3:57
  Speaker 1: If you look at that, he's made our our pockets
• 3:59
  Speaker 1: fly her. He just changed the rule that took over
• 4:03
  Speaker 1: time away from over two million people, and he's made
• 4:06
  Speaker 1: our jobs more dangerous. He slashed the number of safety regulations,
• 4:11
  Speaker 1: He slashed the number of OCEHA inspectors. Just last month,
• 4:15
  Speaker 1: he gutted the rule requiring employers to submit detailed reports
• 4:20
  Speaker 1: on all workplace injuries. And so you can make the
• 4:23
  Speaker 1: case that workers along those lines are worse off. We'll
• 4:28
  Speaker 1: have my richard. As it relates to China, are you
• 4:30
  Speaker 1: satisfied with the President's trade stance towards China or do
• 4:34
  Speaker 1: you have any concerns? Well, you know, first of all,
• 4:37
  Speaker 1: I paud the president for being willing to take trade
• 4:39
  Speaker 1: on and actually talk about changing after that. That's an
• 4:43
  Speaker 1: important step. So I give him credit for that. I
• 4:46
  Speaker 1: also give him credit for for looking at China. You know,
• 4:50
  Speaker 1: trade relationships are an opportunity really to strengthen democracies, to
• 4:55
  Speaker 1: stimulate economies, and to uplift the well being a people
• 4:59
  Speaker 1: here around the world. But they can also be used
• 5:02
  Speaker 1: the other way to harm people and to undermine those rights. UH.
• 5:07
  Speaker 1: And right now China has been doing that. We have
• 5:10
  Speaker 1: the worst deficit, the largest deficite we've ever had in
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  Speaker 1: the world, uh four hundred and nineteen billion dollars in
• 5:18
  Speaker 1: growing uh. And so looking at that relationship, trying to
• 5:22
  Speaker 1: change it is very very important, and we'll continue to
• 5:26
  Speaker 1: work with the administration try to make sure that that
• 5:29
  Speaker 1: relationship gets right it because currently it's off course Richard,
• 5:34
  Speaker 1: a lot of people say there has been too much
• 5:36
  Speaker 1: emphasis placed on trade as the sort of villain here
• 5:40
  Speaker 1: in terms of people losing their jobs, and that really
• 5:42
  Speaker 1: the issue is automation. Uh. The lot of jobs previously
• 5:47
  Speaker 1: that we're unionized and UH and that that gave people
• 5:50
  Speaker 1: decent salaries are now eliminated through automation. How are you,
• 5:55
  Speaker 1: as the head of the a f l c I O,
• 5:58
  Speaker 1: addressing that, Well, we have a committee on the Future
• 6:01
  Speaker 1: of Work that looks at not only automation, but artificial intelligence,
• 6:06
  Speaker 1: robotics and everything else that goes along with it changing
• 6:09
  Speaker 1: our ways. But you have to understand one thing, I
• 6:13
  Speaker 1: don't except your original premise, because by design, NAPTA distorted
• 6:19
  Speaker 1: the power relationships in favor of global employers over workers.
• 6:24
  Speaker 1: It weakened workers bargaining power, and it encouraged the d
• 6:27
  Speaker 1: industrialization of the US economy. UH. Those that caused wage
• 6:32
  Speaker 1: stagnation that continues to this very day. It's a tandem.
• 6:37
  Speaker 1: You can't just say it's only trade, but trade is
• 6:41
  Speaker 1: a significant portion of wage stagnation and job loss. Automation
• 6:46
  Speaker 1: actually can be a job creator in the future if
• 6:49
  Speaker 1: we do things right. We're changing our apprentice programs to
• 6:53
  Speaker 1: train our people are members for the jobs of the future.
• 6:57
  Speaker 1: We're working with universities like Carnegie Mellon and m I
• 7:01
  Speaker 1: T the leaders in artificial intelligence, robotics, UH and New
• 7:07
  Speaker 1: the Thing the jobs of the future, to get in
• 7:10
  Speaker 1: front of that curve so that we figure out how
• 7:13
  Speaker 1: those things affect people. Here's a simple question, Lisa, Uh.
• 7:18
  Speaker 1: Right now, we have a system that is leaving more
• 7:21
  Speaker 1: and more and more people behind inequalities. Growing, artificial intelligence, robotics,
• 7:28
  Speaker 1: all the automation, all of those things can accelerate that
• 7:31
  Speaker 1: process if it's not done right. And what happens when
• 7:35
  Speaker 1: a system no longer can provide a rising standard of
• 7:39
  Speaker 1: living from majority of its citizens, a growing majority of existence.
• 7:43
  Speaker 1: What happens to that system, It's actually a threat to
• 7:48
  Speaker 1: democracy itself, and so we're trying to get in front
• 7:50
  Speaker 1: of it, harness it, and make sure that communities, people
• 7:55
  Speaker 1: in the community benefit from automation and not just a
• 7:58
  Speaker 1: very few people at the very top. Richard Trumpka, thank
• 8:01
  Speaker 1: you so much. Richard Trumpka, President at the a f
• 8:04
  Speaker 1: l C i OH based on Washington, d C. Joining
• 8:06
  Speaker 1: us to discuss the new NAFTA, which is winding its
• 8:10
  Speaker 1: way through the congressional approval process. The U. S Treasury
• 8:29
  Speaker 1: curve today inverts for the first time since two thousand seven.
• 8:33
  Speaker 1: The move follows FED policy shift earlier in the week,
• 8:36
  Speaker 1: as well as gloomier economic data, particularly out of Europe today.
• 8:40
  Speaker 1: To help us kind of wind through this issue, we
• 8:42
  Speaker 1: have Matt Egan. Matt is a portfolio manager and co
• 8:45
  Speaker 1: head of the full Discretion team at Loomas Sales and
• 8:47
  Speaker 1: Companies based in Boston, but Matt joins us in our
• 8:50
  Speaker 1: Bloomberg Interactive Broker studio. Matt, welcome to Bloomberg. Thank you.
• 8:54
  Speaker 1: What do you make of this yield curve? News today?
• 8:56
  Speaker 1: A bit surprising to me. I think there's a lot
• 8:58
  Speaker 1: of pessimism built into the Yeld curve. UM. You know,
• 9:01
  Speaker 1: clearly the data has been weak, UM, and you know,
• 9:05
  Speaker 1: there's definitely been centered in the manufacturing side of the
• 9:08
  Speaker 1: of the global economy. And I guess in some ways
• 9:11
  Speaker 1: it's not too surprising because there's been a lot of
• 9:13
  Speaker 1: distortions thrown into that side of the economy through the
• 9:16
  Speaker 1: trade war that being in last year. And it's not
• 9:20
  Speaker 1: surprising it's affecting places like Germany, you know, more because
• 9:24
  Speaker 1: they feed into that, you know, that manufacturing cycle on
• 9:27
  Speaker 1: the earliest stages. So what does it say to you
• 9:30
  Speaker 1: the fact that the Fed is holding off on rate
• 9:33
  Speaker 1: hikes is not enough to give people a boost in
• 9:37
  Speaker 1: terms of their longer inflation expectations and their longer term
• 9:41
  Speaker 1: growth expectations. This is really fascinating. I think the FED
• 9:44
  Speaker 1: is um paying closer attention to this or opening this
• 9:48
  Speaker 1: up for broader dialogue. And I was UM watching. I mean,
• 9:52
  Speaker 1: everybody probably pays attention to the Monetary Policy Forum in Farry, right,
• 9:56
  Speaker 1: everybody's got down on their calendar, but it came out
• 9:59
  Speaker 1: nine year old has so, but I think what was
• 10:02
  Speaker 1: interesting is they came out pretty forcefully. We're talking about, hey,
• 10:06
  Speaker 1: we're gonna really take a look at our monetary policy
• 10:09
  Speaker 1: and our ability to both fight recessions and drive inflation.
• 10:13
  Speaker 1: And they started talking about, uh, you know, concepts like
• 10:17
  Speaker 1: average inflation targeting. And I think that there's a good
• 10:21
  Speaker 1: chance over the next year or so where they some
• 10:23
  Speaker 1: somehow adopt some formal policy revolving around that too, because
• 10:28
  Speaker 1: I think, I mean, to a certain extent, this is
• 10:30
  Speaker 1: what their m O has been, right, They've been going
• 10:33
  Speaker 1: lower for longer, trying to get inflation up. They've talked
• 10:35
  Speaker 1: about it. In some ways, you could say they haven't
• 10:38
  Speaker 1: been successful. It's been a failure, and so I think
• 10:42
  Speaker 1: they're they're sensitive to that. And um, you know, it's
• 10:45
  Speaker 1: an open question whether a central bank can really drive
• 10:47
  Speaker 1: up inflation or not. I mean, Japan has been trying
• 10:49
  Speaker 1: to do this for years. Uh so, but there's a
• 10:52
  Speaker 1: feeling that they have to do something, and I think
• 10:56
  Speaker 1: that it it has broader implications though well I'm not
• 10:59
  Speaker 1: I'm fixed income expert like Lisa. However, I do know
• 11:03
  Speaker 1: that an inverted yield curve oftentimes suggests a recession. Do
• 11:07
  Speaker 1: you think that now is a higher probability than maybe
• 11:11
  Speaker 1: three to six months ago. It is certainly a higher probability.
• 11:14
  Speaker 1: I think that the inversion of the yield curve means
• 11:18
  Speaker 1: less than it used to when it when it was
• 11:20
  Speaker 1: in um what it would mean before. I think because
• 11:24
  Speaker 1: of the unusual nature of monetary policy and how it's
• 11:27
  Speaker 1: being affected. Uh, but relative to say three or four
• 11:31
  Speaker 1: months ago, is clearly that you know, the probability recession
• 11:34
  Speaker 1: has risen. I personally think that if I had to
• 11:38
  Speaker 1: guess the net next rate hike, it's going to be
• 11:40
  Speaker 1: up rather than down, because I think this is similar
• 11:44
  Speaker 1: to two thousands fifteen sixteen, a mid cycle correction. Uh.
• 11:48
  Speaker 1: It's mainly coming through the inventory channels, and you know,
• 11:51
  Speaker 1: this may be a leap, but I think we're going
• 11:53
  Speaker 1: to see it bottoming here. Problem with that is the
• 11:56
  Speaker 1: market is looking at the data and hasn't inflected up yet,
• 11:59
  Speaker 1: and that's disconcerting. So as a fixed income investor, is
• 12:04
  Speaker 1: this a good time to go into risk your corporate
• 12:06
  Speaker 1: debt considering the fact that the FED is backstopping the
• 12:09
  Speaker 1: market and that you think that there's over that there's
• 12:12
  Speaker 1: too much pessimism baked into the into markets. Right now.
• 12:15
  Speaker 1: I do. I think that there is too much pessimism
• 12:18
  Speaker 1: baked into concerns about the economy. I think, uh my,
• 12:23
  Speaker 1: my mantra recently has been bad news is good news
• 12:26
  Speaker 1: for risky assets to the extent that it keeps central
• 12:29
  Speaker 1: bankers on the sidelines. And that still holds true even today,
• 12:32
  Speaker 1: even given how much stimulus and how long there are
• 12:35
  Speaker 1: already has been zero rates. It holds true today. Uh
• 12:38
  Speaker 1: And and I think, um, you know, when when you
• 12:41
  Speaker 1: think of what usually would drive our recession or or
• 12:44
  Speaker 1: an unwind, and say that the credit market, it will
• 12:46
  Speaker 1: talk about high yield and things like that, it's usually
• 12:49
  Speaker 1: the FED raining on everybody's parade, right tightening policy, And
• 12:52
  Speaker 1: they're far from I mean, it depends on you know,
• 12:55
  Speaker 1: how you perceive that, but I would say they are
• 12:57
  Speaker 1: certainly not tight. And so I think that based on
• 13:02
  Speaker 1: the way the FED is kind of approaching things, this
• 13:05
  Speaker 1: new regime in central bank monetary policy, you know, being
• 13:08
  Speaker 1: so close to the zero zero lower bound, the surprise
• 13:12
  Speaker 1: might be that the expansion lasts longer than people people
• 13:18
  Speaker 1: really think it. I think it can so just between
• 13:21
  Speaker 1: investment grade and hi yield just right now, How how
• 13:23
  Speaker 1: are you allocated. So I'm pretty sanguine on on high yield.
• 13:27
  Speaker 1: You know what, fundamentally what drives hi yield risk premiums
• 13:31
  Speaker 1: is default risk through the cycle, and as far as
• 13:34
  Speaker 1: we can look at look out into the future, over
• 13:36
  Speaker 1: the next twelve months or so, the faults are going
• 13:38
  Speaker 1: to stay low and spread. You know, it's surprisingly like
• 13:41
  Speaker 1: even though spreads seemed tight, they're right on the screws
• 13:44
  Speaker 1: for where they should be in terms of the premium
• 13:46
  Speaker 1: that you should earn. Matt Igan, we continue to listen
• 13:51
  Speaker 1: to your conversation. We're excited to continue to listen to
• 13:53
  Speaker 1: your conversation on real yield The Bloomber Television Show today
• 13:57
  Speaker 1: at twelve thirty Eastern time. Eader Today Matt Egan, portfolio
• 14:01
  Speaker 1: manager and cohead of Loomis Sales Full Discretion Team. Really
• 14:05
  Speaker 1: interesting to get some perspective. Perhaps there is too much
• 14:08
  Speaker 1: pessimism baked into markets at a time when there really
• 14:10
  Speaker 1: isn't an evidence that we're super close to a recession
• 14:14
  Speaker 1: or an uptick in uh in default. The pain just
• 14:33
  Speaker 1: continues in Germany's manufacturing sector. Really disappointing data today which
• 14:39
  Speaker 1: is sending bond yields lower across the world German bond
• 14:42
  Speaker 1: yields UH ensuring in ten years yields now negative for
• 14:46
  Speaker 1: the first time since two thousands sixteen. Joining us out
• 14:49
  Speaker 1: to discuss h is Marcus Ashworth, Bloomberg opinion columnist covering
• 14:53
  Speaker 1: the European markets, joining us from our London studios. So Marcus,
• 14:56
  Speaker 1: just give us a sense of why this particular data
• 15:00
  Speaker 1: point was so important from markets. Well, in some senses,
• 15:04
  Speaker 1: I'm not sure it's quite as interesting as perhaps people
• 15:08
  Speaker 1: think it is, because this is a continuation of a
• 15:10
  Speaker 1: trend when a trend was expected to reverse. In a sense,
• 15:16
  Speaker 1: it's surprising because people thought we'd seen the bottom or
• 15:19
  Speaker 1: close to the bottom. The signs out of China, signs
• 15:22
  Speaker 1: out of other other aspects, indeed services and wages, which
• 15:26
  Speaker 1: suggest the German economy is doing pretty well. Um, and
• 15:30
  Speaker 1: that the whole bad news from last year of the
• 15:33
  Speaker 1: diesel emissions, the rhine level being too low, and again
• 15:37
  Speaker 1: indeed China had sort of played out. So it is disappointing.
• 15:41
  Speaker 1: But then sentiment, sentiment, and this is then the day.
• 15:43
  Speaker 1: This is what it is. It's a person managers survey,
• 15:45
  Speaker 1: it's an expectation. Uh. But slightly more concerning is that
• 15:48
  Speaker 1: that that France has reversed, but services aren't doing too badly,
• 15:53
  Speaker 1: which is the largest share of the economy. So I
• 15:56
  Speaker 1: think what everyone's realized that everyone was hoping and banking
• 15:59
  Speaker 1: on this, and we've had a of us spit the
• 16:00
  Speaker 1: dummy moment where everyone's gone, bunt yields won't go below zero,
• 16:04
  Speaker 1: will they, and everyone's sort of reverse. We've also got
• 16:07
  Speaker 1: this China Italy talks going on at the moment that's
• 16:10
  Speaker 1: causing a few bits of nervousness. And much more importantly
• 16:14
  Speaker 1: actually is looked to the States, look to the US.
• 16:16
  Speaker 1: The U s yields are dropping and therefore there's less
• 16:19
  Speaker 1: excuse to defend even indeed people were that level of
• 16:23
  Speaker 1: positive tenure bunt yields. So the combination all this, I
• 16:27
  Speaker 1: wouldn't read too much into that one particle number is
• 16:29
  Speaker 1: what I'm saying. I think the US move is probably
• 16:32
  Speaker 1: here actually more important. So Marcos, you mentioned France, just
• 16:35
  Speaker 1: give us an update what's going on there, because it
• 16:37
  Speaker 1: is not just Germany. No, um, well, France has had
• 16:40
  Speaker 1: this is La jone, there's yellow vests, h problems, should
• 16:46
  Speaker 1: we say, which is morph into more of a problem.
• 16:48
  Speaker 1: It's become it's got out of hand. It's turning into
• 16:50
  Speaker 1: much more of a left wing than allegedly initially right
• 16:53
  Speaker 1: wing movement. But the point is that it's not going away,
• 16:57
  Speaker 1: and we have ongoing every weekend. We have real problems
• 17:01
  Speaker 1: here and it's really hitting confidence in France and clearly
• 17:05
  Speaker 1: also France, which is far less dependent on China. Per se.
• 17:09
  Speaker 1: It's based implicity say that Germany's dependent on China, but
• 17:12
  Speaker 1: certainly they're less dependent and they are, you know, looking
• 17:16
  Speaker 1: at different errors and therefore we're showing this is the
• 17:18
  Speaker 1: global manufacturing slowdown is not backing away. Both France and
• 17:23
  Speaker 1: Germany are very alliance on orders for their manufacturing across
• 17:27
  Speaker 1: the world. And it's a sign that growth everywhere is
• 17:31
  Speaker 1: dipping and that that has to surprised people because people
• 17:34
  Speaker 1: had expected a bit of a bounce this month and
• 17:37
  Speaker 1: doesn't look like we're getting it just yet. Anyway, what
• 17:39
  Speaker 1: does this mean for the ECBAT Can they raise rates ever? Again?
• 17:44
  Speaker 1: If you speak to anyone how you say, I mean,
• 17:46
  Speaker 1: I used to help you, and you know I always
• 17:48
  Speaker 1: used to say to you that that the easy people
• 17:49
  Speaker 1: will never raise rates in my lifetime, and certainly I'm
• 17:52
  Speaker 1: talking about my children's are posting my grandchildren's life done now,
• 17:55
  Speaker 1: so you know, no, of course they can't. And the
• 17:58
  Speaker 1: thing is they try bless them to up constantly leasing
• 18:01
  Speaker 1: with all the right reasons, just a year too late.
• 18:04
  Speaker 1: They've done it in twenty seventeen. Everyone has sort of
• 18:06
  Speaker 1: backed it, but they waited because everything has to pan out.
• 18:10
  Speaker 1: By the time they waited, the cycler turned and they're
• 18:13
  Speaker 1: looking rather foolish at the moment. The point is that
• 18:15
  Speaker 1: they also try to preempt by getting some extra cheap
• 18:19
  Speaker 1: super bank funding. But then the media music that that
• 18:22
  Speaker 1: the rates going to raise as much as forty maybe
• 18:25
  Speaker 1: even fifty basis points for banks funding themselves previously, and
• 18:29
  Speaker 1: they had the reverse effects. So they try to be
• 18:31
  Speaker 1: dovish and end up being having the reverse effects. So
• 18:33
  Speaker 1: they are stump. But look, the reason why we're still
• 18:37
  Speaker 1: debating this is because the ECB is not the problem.
• 18:39
  Speaker 1: It's a lack of fiscal response in Europe. The monitor
• 18:43
  Speaker 1: response is played out. They try to tighten or stop
• 18:47
  Speaker 1: being so dovish is the correct way of putting it,
• 18:49
  Speaker 1: and still they have to keep on pumping money in
• 18:52
  Speaker 1: the banks, pumping money. Ever, you know, they haven't got
• 18:54
  Speaker 1: rid of their problems. They didn't do tarp or tell
• 18:56
  Speaker 1: for whole after different things, and they're left as bad
• 19:00
  Speaker 1: as they were five years ago. So Marcus, let's just
• 19:02
  Speaker 1: stay in Germany for a moment, real quickly. What's the
• 19:04
  Speaker 1: latest on Deutsche Bank. I know they're out some news
• 19:07
  Speaker 1: saying hey, we're going to start growing again, But really
• 19:09
  Speaker 1: I think what's going on there? And is it the
• 19:11
  Speaker 1: commerce deal almost a fitter complete? Well, you know it is,
• 19:15
  Speaker 1: and well and this is this is what funny is
• 19:17
  Speaker 1: not the right right word here because it's very unfunny.
• 19:20
  Speaker 1: But you know, Ireland essentially got bankrupted by the sense
• 19:24
  Speaker 1: that they had to collapse their banks, Greece likewise, Cyprus likewise,
• 19:28
  Speaker 1: Italy clearly ongoing. And yet it seems Germany, when it
• 19:31
  Speaker 1: comes to Germany, they can they can beat out their
• 19:34
  Speaker 1: own two banks. These are two drunks being lashed together
• 19:37
  Speaker 1: to try and stay standing. And and and it's not
• 19:39
  Speaker 1: a good not a good look. And I think that
• 19:42
  Speaker 1: the you know, Deutsche Bank has got a whole world
• 19:44
  Speaker 1: of level three as an unmarked remarkable assets and a
• 19:48
  Speaker 1: vaster of the book which is beyond the size of
• 19:50
  Speaker 1: all comprehension comments Bank has got huge positions in Italian bonds,
• 19:54
  Speaker 1: and both of them have got a over competitive banking
• 19:58
  Speaker 1: market domestic too many branch is too much toff, not
• 20:01
  Speaker 1: enough capital, no chance of making And the keyword here
• 20:04
  Speaker 1: is profit ever on their business models and lumping together. Yes,
• 20:08
  Speaker 1: to keep going for a bit longer, but it doesn't
• 20:10
  Speaker 1: solve anyone's problems. Wow, that is a stark review of
• 20:15
  Speaker 1: German banking. But you know, I think it's probably pretty
• 20:18
  Speaker 1: spot on because I think not and shared by many
• 20:20
  Speaker 1: people and shared by many people. It's you know, you
• 20:22
  Speaker 1: put two bad banks together, what do you have? Maybe
• 20:24
  Speaker 1: you know one bigger bad bank. Well, there was a
• 20:40
  Speaker 1: conference earlier this week in Boston, Massachusetts. Not an investor
• 20:44
  Speaker 1: conference per se, but a conference entitled Inside Quantum Technologies.
• 20:49
  Speaker 1: This is the first conference dedicated to the business of
• 20:51
  Speaker 1: quantum computing, quantum cryptography, and quantum sensors. To get a
• 20:56
  Speaker 1: sense of all that quantum stuff, and all that stuff means.
• 20:59
  Speaker 1: Let's welcome our guess, Alan Meckler. Allen is a managing
• 21:02
  Speaker 1: partner of assam Off Ventures. He joins us in our
• 21:05
  Speaker 1: bloom Brick Interactive Brooker Studio. Alan, thank you so much.
• 21:08
  Speaker 1: Can you just define briefly what quantum technology is for
• 21:13
  Speaker 1: for me at least, and I think our audience that
• 21:17
  Speaker 1: that's actually quite hard to do. In a few words,
• 21:21
  Speaker 1: I first saw, I'm not a scientist or a technologist.
• 21:24
  Speaker 1: I've just been good at spotting trends and doing shows
• 21:28
  Speaker 1: on them. But essentially, if you a lot of people,
• 21:31
  Speaker 1: I'm sure only and listening, I've heard of super computing,
• 21:34
  Speaker 1: and this would uh, quantum computing would make super computing
• 21:39
  Speaker 1: look like stone age in terms of the speed and
• 21:42
  Speaker 1: the rapidity of and and and the and the depth
• 21:45
  Speaker 1: of of what it can solve and um. It has
• 21:49
  Speaker 1: huge ramifications for all kinds of security, cybersecurity, uh, and
• 21:55
  Speaker 1: the threat to being able if and getting into the
• 21:58
  Speaker 1: wrong hands, being able to open up bank counts, and
• 22:00
  Speaker 1: all kinds of things. All Right, so let's talk about
• 22:02
  Speaker 1: some of the practical applications of this incredibly abstract concept,
• 22:06
  Speaker 1: because there are incredibly practical applications, from three D printing
• 22:10
  Speaker 1: to some of the pharmaceutical advancements. I want to talk
• 22:12
  Speaker 1: about three D printing in particular, because a lot of
• 22:15
  Speaker 1: people were expecting that everyone would have a three D
• 22:18
  Speaker 1: printer in their home, they would print their chocolate bars,
• 22:20
  Speaker 1: they would print their chairs, they would print their you
• 22:23
  Speaker 1: know tables. How much has three D printing actually gained
• 22:27
  Speaker 1: traction and wear? Three D printing most is most significant
• 22:32
  Speaker 1: in uh AN actual manufacturing. There was a theory and
• 22:37
  Speaker 1: a lot of companies went out of business that there
• 22:39
  Speaker 1: would be three D printer in every home, maybe up
• 22:42
  Speaker 1: through two thousand, fifteen or sixteen. But the real benefit
• 22:46
  Speaker 1: of it is and and and the real power and
• 22:48
  Speaker 1: and where the money is being made is very expensive
• 22:51
  Speaker 1: three D printers several hundred thousand to a million dollars
• 22:54
  Speaker 1: that print in medals, and and and and other materials,
• 22:58
  Speaker 1: but are revolutionizing the way certain types of manufacturing are
• 23:02
  Speaker 1: taking place. For example, probably within four or five years,
• 23:05
  Speaker 1: fifty percent of every jet engine will be three D printed.
• 23:09
  Speaker 1: There are a lot of reasons what we could go
• 23:10
  Speaker 1: into why that is. But you can make it more efficiently,
• 23:14
  Speaker 1: you can make it lighter, you can make it faster
• 23:17
  Speaker 1: and less expensively than traditional manufacturing ways. So we talked
• 23:21
  Speaker 1: about some of the practical applications of quantum computing and technologies.
• 23:25
  Speaker 1: What are some of the technology who are some of
• 23:27
  Speaker 1: the technology companies that are really leading the way here,
• 23:29
  Speaker 1: What are the names. Again, it's very important for listeners
• 23:34
  Speaker 1: to know that there is no such thing yet as
• 23:36
  Speaker 1: a quantum computer. And there's a new term that I
• 23:39
  Speaker 1: think you're going to hear pretty soon called uh why
• 23:43
  Speaker 1: why to Q if you remember why two K, which
• 23:46
  Speaker 1: is years to quantum and we're probably a ten year
• 23:49
  Speaker 1: countdown to getting quantum computers. There is a company called
• 23:52
  Speaker 1: d Wave that has a version of a quantum computer.
• 23:56
  Speaker 1: But uh. At the show we just had inside Quantum
• 24:01
  Speaker 1: Technology in Boston, we had many speakers, we had thirty two.
• 24:05
  Speaker 1: But for example, IBM has now something called IBM Q.
• 24:08
  Speaker 1: They've set up a whole division just to delve into
• 24:12
  Speaker 1: being hopefully one of the big players. Microsoft was there too,
• 24:16
  Speaker 1: and they've set up their own initiative. And their speaker,
• 24:21
  Speaker 1: who is in charge of business development for quantum computing,
• 24:24
  Speaker 1: a fellow named Ben Porter. He was saying that they're
• 24:27
  Speaker 1: going to concentrate on AI, financial services and chemistry, and
• 24:31
  Speaker 1: and they're linking up with a whole bunch of universities.
• 24:36
  Speaker 1: A lot of the research, much like my early days
• 24:38
  Speaker 1: in the Internet, is coming out of research at universities,
• 24:43
  Speaker 1: because again it's not a consumer product. The other really
• 24:47
  Speaker 1: key issue is UH security and UH it's a shame
• 24:51
  Speaker 1: what's happening that the United States is going to be
• 24:53
  Speaker 1: taking a backseat to the Chinese. The Chinese are building
• 24:56
  Speaker 1: a facility right now in China. They're spending billion dollars
• 25:00
  Speaker 1: on it just to study this. That's actually exactly where
• 25:04
  Speaker 1: I wanted to go, which is UH what some of
• 25:07
  Speaker 1: the challenges are in this race to develop technology that
• 25:10
  Speaker 1: most people agree would be the future. And I'm wondering
• 25:13
  Speaker 1: when we talk with executives, they often talk about a
• 25:16
  Speaker 1: lack of of people who are trained in the right things,
• 25:21
  Speaker 1: and I'm wondering how much you know, some of the
• 25:24
  Speaker 1: executives in attendance at your conference talked about that, are
• 25:27
  Speaker 1: there enough people in the United States who are who
• 25:31
  Speaker 1: you can hire to do these things, to develop these programs? Well,
• 25:34
  Speaker 1: there's UH. There is a Quantum National Initiative that I
• 25:39
  Speaker 1: think actually the Hudson Institute came up with which the government,
• 25:42
  Speaker 1: our government is endorsed. But right now my understanding is
• 25:46
  Speaker 1: the US is spending you know, maybe about a billion
• 25:50
  Speaker 1: dollars a year UH in all forms and developing quantum computing.
• 25:54
  Speaker 1: A Chinese or spending over five billion and then they're
• 25:57
  Speaker 1: also doing a ten billion dollar center. Okay, so let's
• 26:01
  Speaker 1: say the United States decided to put more money into
• 26:04
  Speaker 1: quantum computing. Which areas would you think would be the
• 26:08
  Speaker 1: best areas for those investments. Well, one area for sure
• 26:13
  Speaker 1: is the military. Um is very important that Chinese actually
• 26:17
  Speaker 1: have a quantum mechanic UH satellite that everyone said couldn't
• 26:22
  Speaker 1: be done. But it's out. It's out there right now,
• 26:23
  Speaker 1: and we don't have enough time to talk about what
• 26:26
  Speaker 1: it does. I don't personally know everything that it does,
• 26:30
  Speaker 1: but it's very significant. How they're using it in their
• 26:32
  Speaker 1: country and how how how they're planning. Uh. The other
• 26:36
  Speaker 1: is uh protection for the future. We're going to have
• 26:40
  Speaker 1: what we call quantum networks, your cell phones, everything is
• 26:44
  Speaker 1: going to be the quantum internet, so everything will be
• 26:48
  Speaker 1: much faster. Uh. There's going to be again this situation
• 26:52
  Speaker 1: like Y two K where we're going to have to
• 26:55
  Speaker 1: have this amazing changeover, and then the security for for
• 26:58
  Speaker 1: all the financial institute this is going to be threatened.
• 27:01
  Speaker 1: Now that doesn't mean that someone couldn't counter that if
• 27:04
  Speaker 1: you were at a bank or whatever. But I still
• 27:06
  Speaker 1: think that in this country and at the financial institutions
• 27:10
  Speaker 1: and the government. They're they're really not focusing on something
• 27:14
  Speaker 1: that is going to be a critical problem. Allen Meckler,
• 27:18
  Speaker 1: thank you so much for being with us. A pleasure
• 27:20
  Speaker 1: speaking with you. Alan Mackler, managing partner at Asimov Adventures,
• 27:23
  Speaker 1: based in New York and Seattle, talking about the Inside
• 27:28
  Speaker 1: Quantum Technology conference that just took place in Boston. Thanks
• 27:31
  Speaker 1: for listening to the Bloomberg P and L podcast. You
• 27:34
  Speaker 1: can subscribe and listen to interviews at Apple Podcasts or
• 27:36
  Speaker 1: whatever podcast platform you prefer. Paul Sweeney, I'm on Twitter
• 27:40
  Speaker 1: at pt Sweeney. I'm Lisa Abram Woyds. I'm on Twitter
• 27:42
  Speaker 1: at Lisa Abram Woyds one Before the podcast. You can
• 27:45
  Speaker 1: always catch us worldwide on Bloomberg Radio.