Welcome to the Bloomberg p m L Podcast. I'm pim Fox. Along with my co host Lisa Bramowitz. Each day we bring you the most important, noteworthy, and useful interviews for you and your money, whether you're at the grocery store or the trading floor. Find the Bloomberg p m L Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Well, markets in general are pretty calm, at least if you look at the United States. Look elsewhere, not so much.
In particular, I'm talking about Argentina, which today asked the i m F the International Monetary Funds to expedite and already agreed upon credit line the payments of fifty billion dollars still out there. Joining us now to talk about emerging markets and specifically some of the troubled child children within them. Damien Sassaur, chief Merging markets credit strategist here
at Bloomberg Intelligence. Damien, what do you make of Argentina at this point, basically asking for help with their currency falling to a record low versus the dollar. Yeah, well, I mean Argentina has been trading heavy for a very long time now, I mean technicals have improved, but again I'm not convinced it's all clean positioning here. I mean it's fundamentals remain very very weak, declining GDP. I mean, it's going to enter its second recession in as many
years this year. Rising interest rates, I mean interest rates have literally doubled. I mean, I think dollar interest rates in Argentina now are are hovering around ten percent. Uh, you're in the high if you look at local currency rates. So yeah, No, I mean rising inflation week externals, there's
a lot not to like about Argentina. But interestingly enough, the past forty eight hours, I've received some interesting calls from investors, particularly advent riven investors, who are actually looking at current levels and perhaps looking to get involved, which may be a sign that you know, things might change. Uh. The reason I is because wait a minute, when when when this election took place? When when we got the new president mackri I remember distinctly people beating the drums
saying this is different. You've got to get in. Argentina is going to be the best place to invest money. Oh come on, well, I mean you're right, Pim. I mean, look, I mean if you look at going into March of this year, when Iam sort of melted down. It was the largest overweight in emerging markets according to JP Morgan's Positioning survey. Right, so people were definitely long and wrong. And I think you're aut. You make a very good point.
You know, people who held on on the way down in the last few months, it's gonna be very difficult for them to reload at current levels. Well, I'm just talking about credibility. Well, yeah, right, what credibility do they have when they are dealing with the second recession in two years and having defaulted what five times in the past century. I would I would argue the other thing. I would say, they've they've made quite a bit of
progress in structural reforms. They've liberalized their effects rate, they've reduced export duties, they've cut fuel subsidies. I mean, they've re established times with global capital markets after being in the black for ten years. But um, but you're absolutely right. You know they want fifty billion dollars from the International
Monetary Fund. Well, I mean, look, the government. If I think, I think the government would be better served if it put disinflation efforts aside, engineered a controlled real depreciation of the PAS. So with the attention of again, boosting external competitiveness, attracting FDI and and reducing the fiscal deficit. And I think that fifty billion I m F line goes a long way to giving them the support they need and the credibility they need to put through, you know, to
to actually do that. Unlike Turkey, right, I mean, Turkey, you know, has shown the I m F. They've shunned their Western investors. You know, Argentina has taken a very different tack. And yet Argentina five year CDs is trading above six hundred basis points in Turkeys only at what four hundred and eighty? So where's the disconnect their? Right? I mean, I would make the case that perhaps Argentina
looks relatively attractive at current levels. Interesting I think that right now I want to add not a little bit Argentina as an adysentcratic story for sure. Uh Turkey as well, both of them seeing distress. But at a time when a number of pretty big asset managers have gotten burned very badly based on Argentinean and Turkish sell offs of assets, you have to wonder is this going to lead to a broader risk off in e m just because burned once,
burned twice? How many times can these people get burned before they just say, forget it, I'm going to cast You know, I don't want to play this time in a different story with Argentina because you know, we've lived through Argentina. I mean, we um guys that live through Argentina for the better part of our careers. But you know, while the pacers plunged and rates have searched, um. You know, thus far, Argentine's remain quite confident in their banking system.
They have not withdrawn deposits as they have in Latin in previous crisis. Is like we're seeing in other places like Turkey and and and look, I mean cross border market funding and liquid assets remain ample in both dollars and pacias in Argentina, So the banking system remains, you know, relatively healthy. So you don't contagion either within Argentina or
more broadly in emerging markets. I think I think Turkey and Argentina have Look, they're a very small part of the emerging markets, you know, and so far, yeah, we've been relatively I guess fortunate that we haven't seen contagion. It's not China it's not you know, it's not even brazila Russia. Um. But you know, I I take your point. You know, as things, you know, get worse and look, performances and perception is reality. So long as performance remains
you know, low and poor. Um. You know, you know this will eventually slip into the real economy. You know. The longer that you know these economies failed to perform, the longer that they you know, they are mired in this weakness, you know, things are going to get more and more challenging and and so you're right from that perspective, but we're not quite there yet. UM. I still think that you know, Argentina, you know, can can manage their
way out of this. Turkey is a different story. But Argentina, you know, I I think at current levels, it's starting to look a little bit of attractive. I sense a trip to Buenos airis in the future for Damian Sasaur. You never know, Damian Sassaura, thank you very much, Chief Emerging markets credit strategist for Bloomberg Intelligence, giving us the lowdown on investing in emerging markets. Canada's Foreign Affairs and Minister Christopher Freelan is meeting in Washington, d C with
her US counterparts. This comes a day after US President Donald Trump announced a deal with Mexico on trade, and of course Canada was absent from those US Mexican discussions. Here to tell us more about this three way complicated
trade agreement is Antonio Ortiz Mayna. He is a senior vice president for Albright stone Bridge Group a s G. Formerly, he served for eight years as head of Economics Affairs at the Embassy of Mexico in the United States, where he advised US companies with a presence in Mexico as well as Mexican companies doing business in the United States. Ambassador,
thank you very much for being with us. Can you tell us what is so terrible about if indeed that is so Canada not being part of the negotiations between the United States and Mexico, And then why would Mexico have those negotiations solely with the US if indeed having Canada there was so important. Yes, thank you for the
invitation and glad to share my views on that. First of all, I would say that even though Canada was not at the table over the past two months, let's say, after the G seven summit in Canada, where there was
a fallout between Canada and the US. Canada was in a way of participating in the negotiations above all, with great consultations between Mexico and Canada, and Mexico was dealing with the US on some pretty contentious issues, I would say, chief among them the automobile rules of origin, and was that was settled. It was pretty easy for Canada to buy into that and then to deal with issues that are more three way challenges rather than bilateral issues. So
that's where we stand. But the clock is sticking from now until of Friday, and I don't know what will happen. Has a lot changed really between the US and Mexico. I mean, is this deal likely to stick and is it really that different? Um, well, there there are open questions. First of all, will it be bilateral or trilateral? We
will now buy Friday. And this is not trivial because under U s Trade Promotion Authority, the Congress delegated authority to US negotiators to update NAFTA, to modernize NAFTA, not to do a bilateral deal with Mexico or even another bilateral deal with Canada. Some so, some members of the House and Senate are questioning whether uh USDR has authority
to submit a bilateral deal with Mexico. That's on a sort of a legal technical perspective, but even more importantly, from a substantial perspective, I don't think it would be a good idea to have a bilateral agreement. I think a trilateral agreement is much more significant from an economic perspective. So why did you believe Mexico entered into this bilateral negotiation.
I think that Mexico wanted to accelerate negotiations as as much as possible to see if they could sign the agreement with the current government that will end on December one, and to do that they had to advance on a number of bilater role issues with the US, and as I mentioned, the main one was over all the rules of origin. So once they got that of out of the way, it was easier to accelerate negotiations. Our guest
is Dr Antonio ortiz Amina. He is the senior vice president at albright Stone Bridge Group, previously serving as the head of Economic Affairs at the Embassy of Mexico. And nothing surprising their Doctor Ortismina from the Foreign Minister of Canada that they're having good negotiations. But what could have changed in such a brief amount of time. Is it that Canada realizes that the clock is taking in at the United States and Mexico or will go their own
way with or without Canada. Well, a couple of things have happened. First the agreement on autos, which is critically important for Canada. Secondly, UH an important agreement on the sunset class. So the sunset class was an absolute deal
breaker UH for both Mexico Canada. So with those two big items out of the way, I think Canada can now deal with some bilateral issues, above all supply management in their dairy industry, and then to deal with something that I think will be very complicated, and that's NAPTER chapter nineteen, which deals with unfair trade practices, dumping and subsidies.
It is my understanding that Mexico on the US reached an agreement to do away with NAPTA chapter nineteen, and chapter nineteen is very important for Canada, but substantively over the endless software lumber dispute and politically so they will have to see how they can resolve that. So one thing that I'm struck by here is that President Trump is negotiating directly with Canada and with Mexico. But Congress
isn't necessarily on board. So how much cloud does President Trump have in these renegotiations when Congress ultimately has to sign off and it's unclear how connected they are to to this whole process. Absolutely, they are different negotiations going on right now. So it's US Canada trade negotiations finalizing Mexico U S trade negotiations, and that trilateral negotiations, and then, uh, the executive will have to make sure that Congress accepts
whatever they submit. And it is not a foregone conclusion that the Congress will accept a bilateral deal because the authority was granted to do a trilateral deal. Right. Well, yeah, but those are the legal issues that you that you mentioned previously. Now you mentioned Mexico's domestic political situation wanting to get a deal done before the new administration of Loprez Lopez Oprador takes office. Canada is also facing an election, and then we have the US mid term elections in November.
Do you believe that politics is currently driving the negotiations. Yes, I do believe that politics are are to great extin driving the negotiation. And my view is that it might be more US politics rather than Mexican politics. And let me explain why. So, the upcoming Lopezo ad Or administration wants to get the NAFTA issue out of the way to focus on other domestic politics issues and additional very complicated by lateral issues with the US, including undocumented migration,
cooperation and security, et cetera. So it's more of an idea that they want to close this chapter and move on to other things, rather than there being a risk that the next Mexican Congress would not ratify a new NAFTA agreement. So that is my view in terms of the Mexican politics. The US politics, I think are more complicated because the calculation by us DR has to do with the current Congress and what could be ratified by
the current House and Senate. If they wait until they have, you know, the a new Senate next year, then the political calculus might change and what could have been acceptable for you know, the current Congress in terms of the Mexican concessions might not be acceptable later on. So I do have say more questions about the effect of US domestic politics on the negotiations and ratification than I do about Mexican politics. Even though there will be a change
in government in Mexico. This is really compellingentis it suggests to me that everyone's going to try to expedite this through the process very quickly in order to avoid any kind of political turmoil. That that is correct, But I'm not concerned about US political turmoil than Mexican political turmoil. Yeah, Antonio Ortiz at Manna, thank you so much for being with us. Antonio Ortiz at Manna, see your vice president
of the all Bright stone Bridge Group. He's also the former head of economic affairs at the Embassy of Mexico in the United States, joining us now Alex Wayne Bloomberg White House team Leader Alex. Interestingly, in response to this announcement, Io S Senator Chuck Grassley, a Republican, tweeted out that he hopes that is not the case, that this is not true, and he tweeted this to President Trump, Alex,
what are we to make of all of this? So arguably the president's biggest achievement has been getting judicial nominees appointed to positions in the federal court system. He's gotten uh sixty appointments to the court system already, including appeals Court judges and a Supreme Court justice with more on the way. Probably, so the Senate Judiciary Committee Chairman, Chuck Grassley is the guy who has moved all those appointments
through the process. He's worked closely with McGann. Megan gets a lot of credits on the right among conservatives and among Republican members of Congress for shepherding all these judicial appointments. And so I think that is what Grassley is concerned about, that if there is turmoil in the White House Counsel's position that the steady flow of judicial appointments may may may get a little a little bumpy. Can you give
us a sense of the background to this. I mean, Don McGann is not President Trump's personal lawyer and has said he was not aware of some of the payments that were made to people to not talk about. So is that related to his decision to leave or has this been in the works for a while now? What what McGann is is involved in his UH Special Counsel Robert Mueller's investigations. He has taught extensively with the Special Counsel UH, essentially because the President gave him the green
light to do so. And so McGann that the White House never expressed privilege over McGann to to limit what he said to the Special Counsel, So he's He's believed to have told Bob Mueller's folks a lot about how the early days of the White House worked, the firing of James Comey, UM, the Trump's decision making process with regard to Michael Flynn as former National Security advisor, all of those things Don McGann was very involved with and uh and has has spoken on the Special Council about UM.
He and Trump have also reportedly budded heads over sort of the limits of presidential power. Trump is, I think, asked McGann to do things and McGann has had to tell him no, and that's made the President a little unhappy with him. Alex Washington is a political town. Is this a firing or a resignation something in between? I think, um, it's uh. We we don't know whether mcgannny this is coming.
There was a report at Axioist this morning, uh, tip of the hat to them that said McGann was preparing to leave either after Brett Kavanaugh was confirmed to the Supreme Court or after the midterm elections. In November. But um, the President seems to have sort of quickened the pace on that departure a little bit with the tweet today. Uh So it's, UM, I don't know, it's it's sort of like a slow motion of firing or something. I'm not exactly sure. What is the role of the White
House Council. What does the White House Council do? The White House Council defends the White House and the Office of the Presidency, uh and represents the White House in the Office of the Presidency in legal matters. The White House Council does not represent the President. That was apparently a misunderstanding that Donald Trump had upon entering the White House. He wanted. One thing we've we've seen reported is that he sort of thought that Don mgan was his personal attorney.
And that's that's not what the White House Council does. And go ahead, going forward, who's likely to replace Don And does this expedited potential firing a Jeff Jeff Sessions that some people have been suggesting this morning. Uh, don't know that it has anything to do with Jeff Sessions. But the guy that is regarded as probably the likely successor to McGann isn't as a lawyer named Emmett Flood. He was hired earlier this year to replace Ty Cobb,
who had been dealing with UH with Mueller. So Emmett Flood is now the the special counsel, the guy dealing with the special counsel investigation. He also handled UH investigations in the Clinton White House. Interestingly, UM, so he's he's not really a partisan guy and at Flood he's just a guy who strongly believes in the independence of the of the White House and in defending the president whoever it is um from investigations both by by by Counsel
and the and the Justice Freman or by Congress. And this would require no approval process. Is that correct? Right? Especially the the White House Counsel is not a Senate confirmed edition. It's not. It's not a count of position. It's entirely up to the president. As far as Emmett Flood is concerned, he's got experience, as you said, in a variety of administrations. What would be his role in disappointment of judges and in the general role of being
a White House counsel. I remember that he was representing at the time Vice President Dick Cheney. Uh in the lawsuit that was filed by Valerie Plaie I believe about the Plame affair about the right. So conventional wisdom is that Democrats are going to take the House in the midterm elections. And if that happens, UH, the White House
can expect a flood of congressional investigations. Uh. Every subcommittee in the House with investigation investigatory powers is going to be probing one scandal or another within the Trump administration. And so Emmett Flood will be the guy if he if he assumes the job, he will be the guy who has to respond to all these investigations and fight back against them. Alex, if we could just take a step back and talk about the turnover that we've seen so far in the White House and try to draw
some sort of implication from it. Is this pretty typical or is this a sign of something else? But if it's not typical, then then what can we draw from it? Is it just that President Trump is known for high turnover just generally, and this is his style? Is this good guy to work for the President is a difficult person to work for? And this is a very tumultuous
White House. There has been a lot, a lot of turnover, more turnover than any previous presidency than anybody's ever looked closely at Brookings Institute has has good numbers on that um. And that's all because of the kind of guy Donald Trump is. Uh. He demands loyalty from his subordinates. Uh, he doesn't tend to show them much loyalty himself, and so a lot of people come in and out. I want to thank you very much for joining us, alex Wayne of Bloomberg sharing some insight into what's going on
in the White House. Of course, Don McGan the announcement from President Donald Trump that he will be leaving his position as the White House Counsel uh sometime in the fall, based on the tweet from the President to speaking about also the appointment of Brett Kavanaugh to the US Supreme Court. Our thanks to alex Wayne joining us down to tell us all about the world of video gaming. Is Ted Pollock.
He is a video game technology analyst and the co founder of The Gamer E t F G a m R E t F. Ted Pollock, thanks very much for being here. How old were you when you first played video games? Well, I think my parents brought home about age seven or eight, and have you've been playing them continuously since then? Not quite. I have a lot of different hobbies, but it's a great thing to do for your screen time, and it's it's more intellectually engaging than television.
Tell me about the technology set up that many gamers have, because if you're not in the gaming world, you're not necessarily aware of the power, the complexity, the vibrancy of the graphics that are now rudimentary when it comes to a game. That's a great point. There's a huge spectrum of of systems ranging from the most powerful, which will be your gaming PCs made by companies like Dell, alien Ware, HP, Lenovo,
so on and so forth. And then you go down into the PlayStation four, the Xbox one, the Nintendo Switch. You have tablet gaming, you have mobile phone gaming. There's still arcade gaming out there, you have virtual reality. Uh, just a huge spectrum of gaming. And coming up in the next three to five years, there's going to be a revolutionary change in gaming as we moved to cloud streaming. Cloud streaming is where the game is being processed on a remote server and all you need is a very
low power processor to play high quality graphics. So certainly gaming has expanded dramatically, and not just from a playing perspective, but also a spectating perspective. And there's one study that you highlighted that showed that professional video gaming just in general, the industry will search just this year alone. Okay, that's the backdrop. Let's move fast forward to where we are
right now. Or there's some questions, particularly in China with their decision not to approve some pretty mainstream games, and this has led to a lot of uncertainty. What's the impact of that, How how significantly should people take that? Well, China, their cultural agencies are very dringent on all sorts of media, and they they throttle certain certain media titles, certain brands, and they're also very careful about the business models that
the game companies are using. There. Some of the uh, the free to play models encourage kids to perhaps play a little bit too much, so they're being careful about how they do that. But on a positive note in China, uh, there's a game company called net Dragon Websoft that just today announced six increase in earnings and they make educational games. So there's some positive things going on in China as well.
It's not all bad news. So I'm looking right now at the geographic allocation of your assets in the game or e t F. China is nearly ten, the US
is about thirty. Uh. How will that, how will that shift over the next couple of years from your expectations, I think that it should remain fairly stable and in those and then allocations, I gonna I'd be remiss if I didn't ask you about any fall out having to do with the tragedy in uh, Jacksonville in Florida, having to do with those public games that was NFL MAT
and nineteen. I think security is important at schools, at music concerts, at any place where people gather, and that uh, you know, that's really what's going on here that you're gonna be It's gonna be a sort of the fact though, that's the operational procedure. Everybody gets wanded, Everybody goes through some kind of metal detector to check for any kind
of suspicious Uh. This this could this could segue into a discussion not about the gaming industry, and but bottom line is that you have to deal with the environment that is out there currently in the current environment is that when people gather, there's a risk that someone crazy will do something bad. Just real quick. Uh. From your perspective, do you expect gaming to be a rival to, say, football, in ten years on the sports front? YEP, that's a
difficult question. I think that when you look at there's there's three ways of looking at the popularity. There's there's participants, there's followers, and there's revenue. So certainly the number of followers and gaming. You have a billion people playing games globally and just a small percentage of that would be a massive amount of people. So I think gaming could
definitely rival professional sports and the number of followers. Monetizing that is something that a lot of the game companies are going after and some of them are doing a really good job. Ted Pollock, thank you so much for being with us. Thanks for having me on. Ted Pollock Senior Game Menalist at John Petty Research. She's also the President portfolio manager of the fund management management co founding the Gamer et F. Thanks for listening to the Bloomberg
P and L podcast. You can subscribe and listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. I'm Pim Fox I'm on Twitter at pim Fox. I'm on Twitter at Lisa Abramo. It's one before the podcast. You can always catch us worldwide on Blueberg Radio.