Surveillance: Markets Negative For A While, Ward Says

from something like this? We're up three four percent, We're down two percent next day, same thing, following day, different well last week um in about seven days the smp F i've hond it erased two and a quarter years of gains UM. So the damage has been severe. We were down on closing prices at the low I think from there the high of ten days or so ago. So significant damage. And typically when you have that kind

of damage, the market doesn't snap back. Now, if you have a fat finger flash crash where it's not a function of deteriorating economic fundamentals, the market can snap right back. That's not the case here. We have a global healthcare crisis emerging and people are resetting their expectations for growth and earnings, and UH stocks are resetting as a result. So it takes a while to recover from the amount of technical damage the market has incurred. And I'm talking

about a period of months. You're a good friend of this probagram, which makes I'm gonna privilege position to know what you're doing, what you're positioned. I'm made a single trite a few over the last couple of weeks. No, I haven't. Now you know, the the qualifier there is that in our Gabelly Growth and Global Growth funds, we have had a defensive UH tilt on the portfolio now

for two years and UH. The good thing is for two years, actually defensive growth stocks have generally outperformed, and during the crisis of the last two weeks that our performance has continued. So I haven't felt compelled to get more defensive because we were gaining ground during the during the decline. UM. If I had not been defensive, then maybe I would have done something. But I literally haven't done a trade for the last eight or nine days, so I don't know if I'm earning my keep or not.

But it's questionable. Is Apple of defensive stock um in the short run time? I don't think it is um And that's because you know, all of the big gains last year, which were at the peak about percent year over year, were driven by multiple expansion, and part of that was market related, and part of that, part of that was an anticipation of a big new cycle of five G phones coming out in the third quarter or

actually their fourth quarter later this year. And of course now you have the multiples coming in a bit, and you have the earnings estimates coming down. Tim Cook has already come out and said they're not going to make their numbers. They're having supply chain disruption. Of course, they're somewhat dependent, more dependent on China than many companies for parts and from for assemblage. Why is it only seven

percent beneath its record high? I mean, you're talking to me about a stock down fifteen or and we're not observing that some not just Apple, but other stocks as well. Why are they holding in so well well? Why? You know, I would argue, why is the overall market doing as well as it is. I don't think the overall market has yet come to the conclusion that the earnings estimates on the SMP this year are not going to be a hundred seventy five dollars, which was the expectation going in.

They're not gonna be a hundred and seventy two dollars, which is where some analysts are right now. They're probably gonna be a hundred sixty five dollars, which will be flat, and they might very well be negative. And it's when you have negative earnings growth in a period of UH widening credit spreads and higher global risks, that's when stocks

take the most pain. And so I'm being willing to air on the side of conservatism here in my in my comments to tell people that this market is gonna We're gonna have updates in this market, like like we did yesterday, but if earnings go negative, we're going to new lows. And it might even not even take negative

earnings to take us to new lows. It's gonna be a volatile market, and I think that the trend is going to be negative for a while, and at least of the read of the morning with our question, John Plunder with a substantial article in the FT just on that the credit spreads and the challenges within the debt market, and now they then fold into the equity market. And

right now we're seeing spreads Titan. We're actually seeing people come into particularly riskier credit on this bet that the FED will continue to lower rates and it will push money into risk your assets, Howard, though I do wonder what will make you buy. I want to see the UH newsflow on the virus show that we're over the

hump and that it is receding. And I have no idea when that's going to be, whether that is in a month, two months, three months, four months, I don't know, and neither does anybody else, and it's really important for those just waking up across America. Good morning, Boston, New York, Washington, of course early early mornings at Bloomberg the Bay Area, John. The major message today is, just as we've heard from viral experts, the viral news, the piece here, the piece there,

the piece there, it's increased substantially this morning. But how it's Nowaday and you brought up Happo. We've adjusted the earnings estimates for what's happened in China. We haven't even started to do that for Europe. We haven't even started to look at what it means for the United States. And if I was looking at this market right now for the second half, the rest of ward profile needs to shift rapidly. If you move the eight down a lot, a lot, then I imagine how it you might be

a little bit more constructive. Right now, let me tell you what happened in the two thousand two thousand two dot com bubble bursts. UM stocks declined obviously substantially, and in a number of stocks, particularly technology kinds of stocks that we wanted to buy had declined. Uh, and we thought, what a great opportunity, let's buy more, and we did only and at that point in time, in talking to the CEOs of those companies they said business was great.

It wasn't. They either didn't know, or they weren't being honest, or some combination of the above. Earnings estimates then got caught another and the stocks went down with them. It was a horrible move to be too quick back into the market. Equating what we have right now to what you and I lived in a one. I'm thinking, I don't want to be too gloom and doom, but I think the potential is here for a drawn out period

of estimate reductions because we just don't know now. Having said that, when the smoke does start to clear, I think we'll have a strong recovery. So you don't want to, you know, wanta take your eyes off this situation with all this liquidity, with rates, the slow with the economy wing well go. You know, through February the economy was fine, but when the I want to wait until the smoke starts clear, and at that point then you really want

to I think it more aggressive. But until then because we don't know when then then is and from what level I'm preaching patients, Well, howbou At this point it sounds like you're wanting for more smoke, never mind for it to clear, and I'm just wondering to be waiting for more more revisions to earnings. Where are you expecting them to be concentrated? Which sector right now? Or is this broad based on the SMP five, Well, you're more cyclical industries tend to be the ones that get hurt

the most. And where is they're the most pain today? Energy? You know you're seeing that with the OPEC talking about cutting cutting supply. The commodity based businesses have high beta relative to economic growth and so they're going to suffer. Materials, energy, and industrials are the three areas that tend to get hurt the most during this type of a weakening economy estimate reduction period. How would well see? I of growth aquities Forcabully Funds. Great to catch up with you this morning.

Jeffrey Curry joins the snout from London, of course, driving all of their commodity coverage as well. Jeffrey, I must have you look at the headline. I'm not sure you've seen it. It's only been in the last minutes across the Bloomberg terminal the Saudi Oil Minister. We will see tomorrow if the Russians are on board. Let's talk first principles. Why does OPEC and the Saudias need the Russians on board? Um because they need to have as large as a

cut as possible. But we like to argue, no matter what, it's too little, too late. The damage to demand, particularly in China, occurred three to four weeks ago, UM, and now you have it in materializing in the West. The total demand decline is somewhere around four to five million barrels per day at this point, potentially even larger so cutting one and a half million barrels per day in April, it's really gonna have no right back. So your downside

risk is baked in. The question is how can they normalize inventories over the course of the year, and they need the support from the Russians. Give us one example, and this goes back to the Jeff Curry microeconomics of decades ago. You're teaching microeconomics at Chicago years ago. Give us one example of how microeconomics a just price. Give us one example where somebody takes a lower price in

oil because of a lack of demand. I think that the biggest margin of adjustment is going to be as inventories begin to fill because of the fact that demand is far lower than supply is. Does the building inventories overwhelm the ability of the system to accommodate those inventories, and we call that breaching inventory capacity. If that were to happen, you really open up the downside and oil, and we could see prices going sub forty down into

the low thirties. Our base case is we avoid that and we end up with prices in the low forties. Low forties. Is still the banks, Brent and that's on Bran and this is Brent from doty one cents. Yeah, so that's huge. Yeah, you got a lot more downside. I mean, let's let's remind you that Hit to the Man is on par with oh eight o nine, if not even larger in terms of the high frequency data. Um, you know, this is one of the biggest events we've ever seen in our lifetimes. You just shut down the

second largest economy in the world. It's going to have ramifications, Jeff. The interesting part of this, though, is the other asset classes can look through the shock and price in a better second half. Just torch us to us about a difference between commodities, say, and equities as an asset class and why it's just a different story. Excellent question. Um. We like to argue that commodities are spot assets. The price has to clear today's supply and demand. In contrast,

financial markets are anticipatory assets. They anticipate the future because remember you're taken equity, it's nothing other than the discounted some of future earnings, and so they can price in the stimulus, the rate cut and all of that. Commodities have to deal with the surplus today. So I like to say there's a tug of war between surplus and stimulus and commodities in particular COT in the middle of that tug of war, how are you expecting as a

result of potentially thirty dollar barrel oil UM? You know, I mean that's you know, if we got into that, that would it would damage the industry. But I like to point out the oil patch was already in very poor financial health even at fifty sixty of barrel UM. You know, that could be you know, you can see it in the equity industries UM that they have come down sharply. In fact, I think it was on either Friday or Monday the equity energy industry hit an all

time low. What does XN do? Yeah, I think Exxon is unique from the rest of them is that they're investing in conventional UM oil supplies UM on a forward basis. No other company is making large scale investment like that. They're either doing like in Europe, or doing renewables and

gas UM. So if we look out forward, because of the environment right now and the poor financial health of the industry, we're going to see under investment when you get into one and beyond, And so those who make investments right now, are going to be well positioned a year or so from now. Jeff, what's the Jeff Curry interview? If we don't bring up gold, let's talk about it.

What's happening? Some dates were down aggressively when I'd expect us to have a bit because it's risk off, and then we're down on gold and it doesn't make sense to me. And people are talking about things like marching cools. What is the dynamics that a plank out at gold market at the moment? Well, if you think about you know, when you have panic um set in because of markets coming down, you need to raise cash to hit your

margin calls. And the most winning position over the last year or so really has been being long gold, and it was a at a very high level of lengths. So when you need to raise cash, you always go to your winners and sell them, and that's why you get that initial knee jerk reaction. But we've demonstrated as you look further out, the longer the sell off goes, the better gold begins to perform. And I like to

argue gold is immune to the to the virus. Right now, you know populations can get it, but gold is your currency of last resort, your price target. Jeffrey quickly here on gold eight hundred dollars and ounce lots of upside from here. It's Curry. Thank you so much. Jeffrey Cray with Golden Saxas morning from our studios in London. Lisa, I wrote an essay for LinkedIn, which is a great plurage to do that for Dan Roth and Victoria Taylor

and the team over at LinkedIn. And you know I'm doing stuff like how I mean, people ask me all the time, how do you do the reading? How do you know what not to read? And all that? And I did this one on mathematics, and to make a long story short, it was that the whole anst if you're out in the business world and you sort of remember doing your math like long ago and far away, and how do you get back in the math game gently? And it was a bunch of books and all that.

And two thirds of the way through the essay I said, you have to read people who do math inherently in their work. And one of the best in the world is James Bianco. He is just brilliant of how he pulls in charts and doesn't mean usually it's in a summit what's called a semilog basis. I'm not going to go to the math right now. We don't do math on Thursday and Bloomberg surveillance, but I was thrilled to meension.

Jim Bianco is LinkedIn feed is outstanding. Jim Bianco, one of my absolute favorites, president and founder of Bianco Research, joining us now from Chicago. And Jim, I'm looking right now, we've been all watching two your yields plunge to session lows, the lowest level since two thousand sixteen, zero point five eight five because Tom likes to break it out to

four h two places. And I'm looking right now at the warp screen on the Bloomberg terminal pricing in almost four rate cuts now by the end of next jan where we are now correct correct the implied rate zero point to nine eight percent by January one, And I'm trying to understand, Jim, how quickly do we get to zero?

Maybe two weeks, it could be that quick. Right now, your warp screen, which is your world interest rate probability screen, is telling us that there's going to be a fifty basis point cut on March eighteens, and that would take us down to five eighths of percent now without getting to in the weeds. The Fed's got another problem that

they didn't anticipate. As they announced that they're going to um cut rates, and as the market expects they're going to cut rates, people that have their money in overnight UH money like overnight repow or one day maturity type of commercial paper and stuff are saying those rates are gonna fall, So I'm going to move out to three and six months paper to try and mitigate my reinvestment risk. I'll take that higher yield UH and I'll lock it

away for three months. So what's happening is money or liquidity is being drained out of the banking system because it's leaving the banking system and going to longer securities. And that's why you're seeing this big jump in the amount of repos that the street is asking for. If the FED wants to drag this out and just say well we'll we'll cut twenty five or fifty in March and maybe fifty in April, there will be no money left in the banking So this is this is really

important to him. Are you saying that the FED needs to cut rates by fifty basis points on March eighteen, or else we are going to have a fundamental plumbing problem in the financial system. I'm gonna go you one step further. We have a plumbing problem in the financial system right now. Uh and it is being covered by the FEDS new facility that they've put in place. But the Street Wall Street is asking for more assistance than

the caps that the FED is put on it. Today, they said that they would offer billion dollars of what's called fourteen day term repo. The Street asked for seventy billion dollars of assistance and they only got twenty in help right now. So the reason is all that money is leaving because it knows those rates are going to go down, and it's going too longer term securities. And if the FED is going to drag their feet in cutting rates, we will cut meeting five next meeting. This

is going to create a bigger plumbing problem. So if you're ultimately thinking about going to zero by the picking half of this year, do it in two weeks. This because the time limitations today, Jim Bianco, and this is so important. Do you find an efficacy and alternatives to rate cuts, or is rate cuts the blunt instrument that only works well. Race cuts is the blunt instrument that

they work. The only other instrument that they have that they could use at this point would be to expand their balance sheet, which is what we now know as QUEI. I wanted to say traditional QUEI, I guess that's what it's become now it's more traditional. I don't think negative interest rates or any of those other things would be very effective effect out. Those would be very counterproductive um at this point. So the Feds got kind of two

targets that they're looking at. Their looking at what this virus means, what we're fearing it means for the economy in two, three or four weeks whitespread shutdown disruption and the fact that they are cutting rates that act is creating a plumbing problem on top of everything else. I mean, promis being handled for now, but just for now, it doesn't mean that they've got it permanently solved. Jimmyako, thank you so much. Too short of visit. We look for

a much longer visit next time. Mr brianco in Chicago greatly greatly appreciate it. Right now, the banker who is an engineer, Jean Cautriche Jarnes, this is a former president of the European Central Bank, and we are thrilled Mr Triche, you could be with us today. I want you to take your engineering and the dynamics that you know cold and that is the new discussion of supply shifting worldwide and demand shifting worldwide. Which are you more concerned about

the supply shocks or the demand shocks? To come well first the way, it's a pleasure to be with you, Tom, I would say that the problem is that we have both the supply shock and the demand shock. At the very beginning, one could have said, perhaps it is on the supply shock we can do nothing as regards the centple banks. Of course, as regards the supply shock, and and then let's wait for the cornavirus to be to be to be eliminated and then we have a V

shaped recovery. Unfortunately, we see now taking into account globalization, the supply chain at a global level, and all the consequences of the fear that is accompanying this epidemic or this pandemic, we see that there is a demand shock also, and we have both together at the global level. And this, of course is something which calls for appropriate decisions not only by sample banks, of course, but by all partners

without exception. And if I may tom, I am a little bit annoyed that we hear a lot from the G seven from the industrialized country. We I heard nothing from the G twenty. And we have clearly a global issue, a global problems, with a lot of emerging countries being at the heart of the problem, including of course China. So it seems to me that it has to be taken up at the global level, and not only at the level of the G seven. Presidental sharing going to

rip up the scripture. And I do this with great respect for Chairman Power and Christine Lagarde with your criticism of a need for a global action. Should we have seen a coordinated response with Chairman Powell the other day, Did they miss a moment by not linking together their actions. Well, you know that I have experienced myself coordinated action with a fifty basis point diminishing on October two, after demand bothered. I have to say at the time the drama was

unfolding in a much worse manner. If I may so, the idea that we had at the necessity to coordinate action at the level of the major central bank was something very natural. I'm not sure that it was really more appropriate in this time. It could have also had an impact of panicking, if I may, or giving the message of too much of a panic. So I think it's okay. What has been done is okay. I don't

regret the coordination action. Zean claud Tricia. One of the arguments that you could put forward as to why there wasn't coordinated action is the other central bankers think the coming rates is a mistake. Could that be the case? Well, again, each central banks as its own responsibility in its own law and legislation or treaty. So I think that there is no general rule to apply to everybody. That's one of the problems of I would say, governance in Europe as well as in the world. It is that the

recommendations under the same for all. At this stage, I would say, the main problem, it seems to me, is really to make liquidity available to all, credit available to all, and the amount they would say the supply of liquidity, supply of credit is more important than the price that the interest rate themselves but that depends, of course on

the various economies and countries concerned. In Europe. As you know, we have introduced the idea of giving liquidity, giving supply of liquidity without any limit, and that is still the case. It was introduced at the moment of the Liman Model crisis, but it is still the case. But of course availability of credit remains something which is and will be much

more important in the present period. Do you think therefore the e c P would be better to do more tel trows to try and some find some way of getting credits into the supply Shanes Andrew Bailey was just talking about that rather than cutting rates. Do you think that the Mortel throws more kind of liquidity injections into the banking sector that would be a better way to go for the e c being rather than cutting another ten bits off the deep I rate. I have no

recommendation to make to the ECB. The Governing Council has taken excremely wise decision since since the crisis, so I have full confidence on the fact that they will do what is appropriate yet in the case. But it's clear that availability of credit will be something absolutely essential all over the the Your area. Whatever the level of interest

rate is. One of the great debates, Mr Trouchet, that we're seeing right now is the idea of disinflation or following on a greater inflation, Which way will price change cut. Do you anticipate dampened economic growth in disinflation or can you worry about an inflation from another time and place. Well, it's again it is the complexity of the situation, which is illustrated by the fact that the supply shock itself

could transmit some kind of inflationary pressure. At the same time the demand shock, which is the consequence of corna virus, has exactly the river the opposite consequence. So we we will see exactly where we stand. It's a very complicated story, but it's clear that the supply shock element has an inflationary potential. UH Eurozone five year five years currently setting at one point one percent, a little low for the last five years. Jean Clautricia, the former ECB president, he

is going to stay with us. Coming up later today our exclusive interview with Dallas Faired President Robert Camplan. That conversation coming up at five thirty pm in New York. That's ten thirty pm in London. This is blown by oh Guy Johnston in London. Tom Keen, of course, over in New York. I'm sitting in for Franciling Lackwise. Jean Clautricie, the former ECB president of Daniel Morris a b MP parab Our asset Management, are still with us, Jean Clautriche

let me come back to you. Um, we were talking before the break about what is happening with the economy, the supply chain shocks that we are going to be experiencing. How quickly do you think, um, stressed companies in the euro Zone are going to be experiencing problems. How quickly do you think bad loans are going to start to

pick up? Well, I think that, of course, nobody knows exactly what is likely to be the dynamic of the of the phenomenon, but it's clear that it is unfolding, and it would be of a duration which might be much more than what we think or what we thought at the very beginning. Uh. That's the reason why I make myself the point that it is very important that

created remains available. I would say I wouldn't make the point also that we were already discussing the use of fiscal weaponry before the corner virus exploded, and the fiscal weaponry is very, very important. I am happy to see that in the US the House of Representative has decided to embark on some action precisely to to deal with

the corner virus. I would say in Europe it's absolutely necessary also because there are some room for maneuvering on the fiscal side, and that they are more important than ever, of course, in the present context of a big problem on the demand side. Presidentry Morris, excuse me, go ahead, I'm sorry, guy, I'm sorry. Continue. Well, let's let's let's

just get Danny Morris's take on this. Do you think fiscal policy will come quickly enough for companies of the bottom end of the triple B range to be able to avoid becoming fallen angels and ending up in high yield. Yeah, well, this is always the dilemma when it comes to fiscal stimulus.

We can remember back to the global financial crisis and shove already projects and you know, we have a hundred billion I think that was ultimately spent to support the economy, but by the time it actually hits any company or any household, you know, normally it's well after it was actually needed. So it's it's certainly helpful, it's what should be done. Is it going to be enough in the short term? You know? Is it gonna ripe soon enough?

I think you have reason to be concerned. President john Plunder has an absolutely outstanding effort in the ft today. Uh talking at corporate debt, as Guy Johnson brings up at Mark is sing who you worked with that the European Central Bank speaks of what everybody knows is the backstory, and that is a global misallocation of capital because all of these oddities, these disincentives within the yield market. How

misallocated are we right now? I certainly shared the view that we had accumulated, we had piled up debt outstanding to an extent that has been dangerous. So whatever the trigger, Corona virus or any other trigger, we had a potential problem of dealing with a situation where over indebtedness is very, very large and has continued after the crisis, after the

demand by the crisis. So there is undoubtedly an issue there which would call also have to say, for a global response because the phenomenon of over indebtedness was observed in all continent, all I would take in stituencies advanced economy as well as emerging economy, so that that's that's

a real, real issue, a real structural issue. But of course we have to to live with the situation as it is, and certainly to do the best out of the present situation, which is very, very dedicate obviously, and again I would say, the central bank are pillars of stability, anchors of stability in a world which is extraordinary, volatile, dangerous, unstable, And that the reason why it seems to me it's more important than ever that the authority of the Central

Bank is fully preserved, which is not not necessarily the case from time to time, even in the US, where when I see some tweets coming from the chief of the executive branch, that seems to me totally inappropriate in terms of preserving the authority. Okay, well, the economist Donald Up, I'm sure is listening to this carefully right now, Jean Tortuche, if we look at the shampretarian destruction, a creative destruction of this depth that we have created, what is the

best outcome for President Trump and other world leaders? How do you how do we get away from how do we extricate ourselves from this misallocation. Well, again, you have you have to cope with a crisis which is unfolding right now clearly, and you have a medium long term

issue of first magnitude. To sum up the situation, I would say, at the level of all economies in the world, and at the level of the global economy and the international community as a whole, we should give privilege to equity and not, as we did until now, to debt. There is a preference for debt over equity, which is generally that we see in the deficits of the states

in the day, in the public deficits everywhere. That we see also in taxation, which is privileging debt over equity, which is stupid, of course and extremely dangerous in a long term perspective. Who can initiate the seismic change from a focus of debt and fixed income instruments over to the risk of equity. I would say the i fies.

The international financial institutions are key, of course, to have a strong message, a message that would be I would say, listen to at a global level, and of course we have to get a consensus amongst the major economies, the European economy, in the US and of course China and others, to understand that we are not doing any good if we continue new to pilot debt Kelly, President Cruche, thank you so much. Jean Lautruche is a former president of

the European Central Bank and of course of France. I can't convey enough, folks. The tradition at Babson, and there's other universities as well, of accounting is the adult major. It's if you go there and you're serious about it, you take it. They produced years ago a gentleman, Timothy Ryan. He's a Bruins fan, which helps, and he began and he did what you do in accounting, which is basic auditing, and has risen to the head of US operation as chairman of p WC. And we are thrilled at the

accountant from Babson could join us this morning. Ti Moryan, What will be the accounting ramifications of this virus? How will it first be gleaned among your clients? Yeah, good morning, Tom, and thank you for having me. I think what's really important is we're just beginning to see the unification. So companies whoever, as we reported this year and earnings. Those are that those happened, um, they would December thirty feet year and earning. So I think what we'll really be

looking for is this first quarter earnings. But there's no question a number of different sectors under pressure, so it is reasonable to assume that we will see some slow down in our clients results as this virus continues. So, Tim, what are you hearing kind of anecdotally from some of your biggest clients, We sought a lot of corporate news out of Silicon Valley in the West Coast today, Microsoft, Facebook.

You know, folks stay at home, work at home, so some big decisions are being made affecting a lot of people. What are you hearing from some of your clients. Yeah, so over the last three days of talk to several dozen of our clients, and what we're hearing is people first, to carry of people, protect them and health business continuity

planning to make sure critical operations can be performed. And just now we're starting to see focus on cash management, making sure costs it contained because there is a sense that this could affect operations and and UM performance over a long period of time. But without a doubt of the last several weeks. It's been about people first. So Tim, when I think about a firm like p WC, I

think about all your young auditors and consultants. They're spend their whole lives, you know, on planes going out to see their clients. What are you telling your uh people right now? Yeah, great question. So what we did, what we've done to all of our people, for all of our people, is they say, critic all non essential travel stops um immediately. Number two. What we said is travel to any of the restricted areas across the globe had

stopped immediately. We're asking our people to leverage our technology that we're invested it heavily over the last several years, and work from home when possible. And we're also asking our people to practice just normal, good healthy practices. They're not feeling well, don't travel, don't come to the office. So in the article the day was John Plender and the f T. It's a lengthy article, folks, just brilliantly walks through the build up in corporate debt that's out there.

Great quotes including amarising the giant economics from Germany and Tim and there's something that parses right over to p WC and that there's been a massive debt build up, but it's really not on the back of technology, which has a massive cash build up. And the implication here is the debt is more focused in traditional American industries. Is p WC seeing that, Yeah, I would say I would say that some I would say that that is very similar to what we're seeing at this point. It

is we're traditional. We have seen an increase in technology, but not at the same level as you would see some of the traditional areas. Tom, let me bring up a sensitive question, and you know you're such a straight shooter that I'm sure I'm going to get an honest answer. What is the differential between how any given major accounting consultancy does business in New York or London, or Beijing or Shanghai, or around the world Delhi, wherever. Is it a uniform audit process or does it differ? Is it

malleable nation to nation? I would say that this this clearly differences nation and nation. But the principles of auditing across the globe but very similar. It's independence, objectivity in making sure that investor protection comes first, and that that is largely consistent across the globe. Now, the standards that have followed different from different different parts of the world. But as I spend half my time outside of the US, the the concept of investor protection is something that I

do see cut across geographies. You see this all the time because we hear here Bloomberg surveillance. It's the idea that while the accounting in other places is the same, but you have to live it affirmed like you have. You have to go in and do this nation to nation.

How do you adapt your auditors to that. So one of the things that we focus an awful lot on is culture and training, and we also at any given time have a couple of thousand people who are who are living in different parts of the world to make sure we we have a sense of shared values in

terms of how we do things. We have very robust kind of quality checks that take place across the globe to make sure the quality is consistent and frankly to I'm straight shooting, always looking to improve, like we're not perfect, and we're always trying to raise our games. So when we see an opportunity improve in a different territory, we take those lessons learned and bring them across the globe

and that's a continuous loop that is always happening. So Tom I saim I know you put out your PwC, your Global CEO survey, Um I don't see you know, kind of coronavirus in there are these these big health issues, But how do you feel like corporate America is kind of prepared for some of these just really want off things that come out of nowhere. Yeah, So just thanks for referring to the survey. We launched it in January and Davos and we ask every year for twenty three

years straight where the top risk and health crisises. Pandemics clearly were not. It was in the top ten in terms of CEO concerns. And I think the coronavirus is a great example of how CEOs have to be ready for anything right now. I do think that in many respects, your best your best companies have been preparing for something

like this for years, meaning that do they see this coming. No, but we we have seen a good percentage of our clients, not all of them, but we have seen a good percentage then for the last couple of years preparing for what I'll say, get fixing the roof when the sun is shining. They've got their constructures in play. They leverage more technology now, to be frank, some haven't, and their ability to deal with something like this is going to

be way less equipped than others. Samaran, thank you so much with p w C us their chairm and greatly appreciate a snapshot in their otherway corporations in the audit process. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keane. Before the podcast, you can always catch US World one. I'm Bloomberg Radio s