Surveillance: NATO Summit With Adm. Stavridis & Vinjamuri

clients at the moment about December? That line in the sand when terrorists could go on? What is it? A hundred and sixty billion dollars a Chinese impulse? What's the message at the moment? And it's mostly consumer goods, which is which is different from what we've seen in the past.

You know, I think the messages that if we get some sort of a skinny deal, I think we could see a really strong wrong rally in the more cyclical areas of the market, because my sense is that the market is actually pricing in a fairly dire scenario on trade. I mean, if you look at what's expensive within the SMP five hundred, it's utilities, it's consumer staples. These are you know, the recession stocks of the SMP five hundred. It's not machinery and and you know retailers. Those are

the stocks that are really cheap. So my sense is that the market is actually pricing in not a great outcome from from the tariff scenario. Now now here, I think is where it gets interesting. I don't see the trade war ending, even if we get some kind of skinny deal. I think what it turns into is more

of a tech war. UM. So I think we're shifting from this trade war tariffs on you know, soybeans, to and to an environment where I think the real war is around technology, UM, intellectual property, national security, and I think that could could continue for a lot longer. You actively talent claunch the need to position that fundio I was the equity allocation with regards to those kind of

consents that you have. Absolutely, I mean, I think the way to think about this is the tech which hasn't been a market leader for you know, ten years running now UM is one of the areas that could actually take it on the chin in the near term. I mean, not only do you have tariffs, not only do you have the idea of you know, tech companies having to dislocate their supply chain, but you also have bipartisan support

to regulate tech companies. So you know, what I worry about within tech is the same thing that we saw in financials back in two thousand five. So there's should I sell my Amazon and Apple? That's all I want to know. So I think if you're worried about the next year or two, I don't see Amazon and Apple or you know, just fang stocks in general. Are big

cap tech companies as retaining their leadership. I think there's even when their regular growth if you look at the nominal g D be called Ethan Harris has and and your team, you're telling me to get out of revenue growth stocks with that are double digit inn sure, and go over to something with a much less revenue growth stream scheme. Now here's the thing I think that the I mean you you, we all kind of know this. But the second derivative story for tech is less positive

than it has been fast. That's calculus talk on our Wednesday folks. Just but but I think the second derivative story for you know, potent to some of the more cyclical areas of the market could actually recover nicely if we see any sort of a you know, resolution on

trade in the near term. So so, I guess when I look at it, I think, Okay, here's your tech companies that have crushed it for ten years, but now they're super crowded, they're arguably a little bit more expensive than than they happened in the past, and we're seeing a lot of different catalysts that could unseat that. I love what you're saying, and I love your smart, smart research deck about how we're gonna have this big shift

to international big shift a small and big cap. What will be the pri some catalyst to make that occur? Is it as simple as FED policy or do we have to get more equity in nature or yield nature? In our analysis, I don't know if it's has to do with the FED. I mean, so, I think the biggest driver for rotations in style are the contours of the profit cycle. That's what we found in our quant work.

And you know, I think what's important here is we've gone from an environment of very very slow decelerating growth to what looks like a reasonable acceleration in growth in two thousand twenty. And here's why I say that. So if you look at two thousand nineteen, this year, it's been flat earnings growth. We've had a flat year on on SMP earnings. Next year, without a lot of great economic delivery, we're likely to see a better year and

amidst that pickup. This has historically been the biggest driver for value cycles, over growth cycles, for small, over large, for rest of world over us is just the idea that we get some kind of a pickup in profit cycle. Let's get your rival White survey to financials, consumer discretionary industrials, utilities that you rove a weights into. Those are overweighting sight into the conversations you're having at the moment. Where's

the pushback coming from you? So the pushback is, why the heck are you overweight utilities because it's really expensive and it looks like a bond um. I guess utilities is our hedge against you know, things not going well over the next twelve months and utilities. What I like about it is that it's got a dividend yield that's a you know, a couple of percentage points higher than bond yields and um and it's basically, you know, it gives you what you think you're getting, regulated earnings growth

relatively smooth. The real pushback that we get is on financials, because financials, everybody thinks we need the yield curve to steep in in order for financials to work, And here I totally disagree. I don't think you need the yield curve to steep in. I think financials is going to start to be acknowledged as a high quality dividend yield sector, which is something that we haven't really seen it as in a very long time. It was the less ever toxic sector back in two thousand seven, and I think

that's how investors are painting it today. But the truth is the leverage ray show has been. You know, it's a shadow of its former self. These companies are arguably over capitalized, and their shareholder yield, if you add up share buy backs and dividend yield, shareholder yield for financials is the highest of all eleven sectors. You and I've talked about this many times. For this to work, you

need a perception shift. You need investors to sit there and agree with you, not think that everything is just about a ten year yield of a shape and yield curve. You've seen evidence of that this year because actually some of these big names are more straighted, performed really rather well through. Is that already starting to happen. I think you're starting to get that acknowledgement that these are different companies than what what we saw in two thousand and eight.

And then you know also just the idea that they've been so shunned for so many years that their underweight positions are now arguably risky. If the stocks start to move at all, I think that investors are going to be forced to start adding exposure. I mean, financials is a sect where the average institutional manager is two standard deviations below his or her relative exposure to the sector. So that means that they basically hate financials right now.

You're gonna have to leave it there, Thank you, Superman. Really optimistic view in really stating that the shift will occur. That's been a huge debate. John on the show. Let's get to Lensley Vinja Murray, who joins US now Sheffield United as two points had Leslie vin Ja Murray knew that Chatham House head of US and America's program. Don't worry, Leslie, We're not going to continue that conversation. We are awaiting.

We are awaiting a bilateral between Chancellor Angela Merkel and a President of the United States, Donald Trump, taking place just outside of London, England. We're going to bring that to our listeners in just a moment when it begins. But let's see, what are you looking for outside of the body language in the spectacle, what are you listening for when these two start talking. Well, I mean, I think you know the big thing right now is are

we going to see a unity and cohesion? And of course, you know, the relationship between angel and Donald Trump has not been the easiest one. Of course, it's now being sort of overtaken, at least optically by the relationship between Trump and Macron. I think there's more to say about that, but I think we will still be looking to say, you know, are they on the same page? Will they speak to internal issues in the alliance, the question of Turkey.

I think that's probably less likely, But I really do think that this is this going to be, you know, can they waive the flag as it were of NATO and forward that come in front lessa you're such a student of this, the US and then folding in the European Prison. I look at it as a fossil of SPD. The liberals being Billy, Bryant and Conrad added an hour's in the mix. And of course Helmet Cole had changed

German politics. Does the President perceive Ms Miracle as a conservative or is he have a greater affinity to those in Germany even more servative? You know, I don't, to be very honest, I don't think Donald Trump is is thinking in quite this way. I think he hasn't a view of Germany in general that's driven by his antagonismic front right absolutely, and you know, in terms of sort

of drilling down and thinking where does she stand? Because just not motivating this president because Johnny does it with the Prime Minister Johnson, but he just can't translate that over to some of these other nations were looking at Jeermany.

I thought it was fascinating yesterday here in the President called out Germany by name Leslie, referring to the lack or the failure of getting the military spending up to two percent of GDP in the country and basically threatening to use trade as a tool to push the Germans to spend more on military. Leslie this is something new that I don't think many people have been thinking about at all in the last couple of years, as the President has made this book push. How are you thinking

about that in the last twenty four hours. Yeah, I mean, and remember it's not just the last twenty four hours.

Donald Trump has has linked sanctions to national security concerns for a little while right now, and I think for many of us this is very distressing because, of course, especially when it comes to America's relationship with its most important allies, the idea that you would link questions of trade um to national security concerns is is contrary to you know, what we've what we've witnessed over the last seven decades. So it's it is a very significant shift.

It's one that's getting traction. He's taking it to the next level. UM. But I don't think that it really plays. It doesn't play. You know, this is not the U. S. China relationship. I don't think it plays actually back home in the same way. But and it and it alienates, but it is um it's another thing driving a wedge through America, and it's European partners. We welcome all of

you coast to coast and worldwide. A good conversation with Leslie, Vinja Murray of Chatham House and expertise across the Atlantic from London on the United States, Chan Fero and Tom Keene futures of fifteen down futures. We await the symbolism, a huge symbolism of the leader of Germany in the United States of America at the Seventh Needle Meetings channel. Let's least to continue this conversation, shall we. I think

the President quite rightly identifies a problem. He's identified a problem with China that many people agree with him on. They need to open up. They have been stealing i P. There has been forced technology transfer. The disagreement has been about the approach and as you say, is alienated allies. We see the same thing with NATO. They've all pledged to get military spending up to two percentage GDP, and let's be quite honest, some people, even the Germans, haven't

done enough to get themselves there. But once again, the President identifies a problem. Then he's criticized for his approach. But letslie, I think many people are asking the following question. Okay, criticize his approach, but what did previous administrations do, and why should we continue at that very same approach if we are just going to end up with the same results. What do you say back to that, Leslie, Well, first

of all, you know, let's let's break that down. M on the on the question of European contributions to defense spending hitting that two percent target. This is something that preceded Donald Trump. Um the increase in European spending. What proceeded, you know, began really in fourteen. It's it's continued and taken on more steam, and it's certainly gotten a lot more visibility because of the rhetorical line taken by the president, very aggressive rhetorical line. But that you know that push

dates pre dates the president on China absolutely. You know, people have been wanting to level the playing field with China for some time and Donald Trump has certainly been the person that has taken us He's driven it forward, and I think it's game changing regardless of what we see who we see in the White House post does

the president change international American rather foreign relations? Is it so seismic, this different approach by the gentleman from Manhattan that it's a permanent change to how America addresses its foreign policy. You know, this is the question that everybody wants to an answer to. We've been certainly discussing it,

frankly all morning at Chatham House. Um uh, and it's it's it's clearly the case that he's taken some things that I think we're a long term, long time coming America's relationship with China, reorienting it, taking a harder line on trade, um and and driven them forward. And I do think that the style and the attention that he's given to those changes, you know, they predate the president, but he's made them front and center. Will we see the continued style of diplomacy that we've seen it under

this president? I don't think so. I think it's very hard to imagine any anybody other than this President m pursuing kind of diplomacy that he's pursued with America's allies. But will America ask for more on the global stage, Yes, I think it will. Of its allies as well as of its adversaries going to continue to be put in

that second, that second bracket. Dr Vinjabinry absolutely nails us about this idea of substance versus style, and so much of the reporting, John ignores the substance that could be permanent of this absolutely unique president and whether things are going to change, Leslie, I think is an important point. I just look at the situation and wonder what the electorate actually wants, what the demands of the electorate will be.

Do they want to go back to the old way of doing things, which is getting countries together in Europe, playing nicely and saying to China please open up? Or do they want this more confrontational approach from their leader here in America. Is that what they want on the international stage. What's your perception of what the electorate wants to see, Leslie, I don't think that people are behind I think, you know, there's there's a peeling off of support for this style of trade wars because it's so

far not delivered any results. Um. It's you know, it's a destabilized it's it's raised protectionism has gotten worse, the numbers aren't getting better. Um. And so I think that people are aware that now this is an issue, but is it really changing the playing fields, really leveling the playing field as Donald Trump taking on the bigger issues. I think Americans are pretty aware that, you know, it's the right issue, but it's the wrong approach. We thank you.

They're looking for a more strategic approach. We thank you for listening. Dr Vinja Murray with us here from Chadow Mouse. Jay John is a supporter of the President United States. We're thrilled. I think he's I think he's taking advantage of municipal bonds. Jay emails in and says the President is more like Churchill and the US Founders. He considers the European leaders smug and self righteous. I mean, leslie. That is a perception of Republicans and Democrats in America.

Do did you buy the idea European leaders have a smugness about America? Yeah? First of all, is it a perception of Republicans? And I think that's a broad you know, too far, too broad. ABRESHI data that's coming out of serious places like the Chicago Council, like Pe. The vast majority of Americans want to be a native, They want to cooperate with Europe, they want to be internationally engaged. There are certain things that they don't want to do

any more troop deployments. They'd like to see scaled back. Um. But I you know, to sort of the Republican Party. I don't think is in any way anti European um, and the question of smugness is really again it's I'm not so sure how helpful it is. I think there's

always been a admiration of European leaders. But in regardless what Americans thing of the president, nobody likes to see, you know, the president being talked about out um negatively because it sort of reflects badly on the entire country. So it's incredibly complicated. I want to explore this relationship with China in the United States just a little bit further. There are some people that might argue time is up. The labor arbor trage has taken place, the plants have

been built on the mainland. Western multinationals will do anything to keep a foothold in the country now, despite the fact that seems to be serious allegations of human rights violations in the mainland at the moment, with the exception of big tech and perhaps finance as well, I think at the moment, gaining entry to this market is perhaps not the issue it once was. It's keeping access, and I think keeping access may well be the issue in the next few decades. China is not going to become

more like the United States. And a question I've been thinking about, Leslie, is how does a multinational company succeed navigating what the Economist and the last weekend called two spheres of influence, the American sphere of influence and the Chinese sphere of influence. And I think about it in the following terms, how does a multinational company please a progressive consumer in the way than a country like America and a repressive state abroad in a country like China.

How does that kind of company succeed on the global state in a coming ten years? How do they do that? Leslie?

I think it is difficult, because, of course, consumers in the West are becoming much more tuned to issues of labor standards, of environmental regulations, of you know, a number of what we might consider progressive policies are really becoming things that people individual certainly in the States in Europe, are taking very very seriously, and they want to know when they're buying from a multinational when they're engaging that that China is hitting the same standard that they would

expect of an American company back home. So it's it's complicated, but I think that the harder choices, you know, for for multinationals are are balancing governments and not really not necessarily balancing consumers. On the human rights question, very tricky. Right, Clearly there's now more pressure coming out of Congress on the human rights question. Uh know, human rights is something that America had takes very seriously, American to take seriously,

but but selectively. It's always been selective. Um. And if you look even at the most recent legislation, there are exceptions written in saying that you know that the president can and the weaker bill could could waive sanctions, um, if he determined that this would be in the national interest to do so. So. Even the legislation, which is potentially very powerful if it if it becomes a part of law, has exceptions written and that and that's pretty

much the story of America's human rights to point. Well, Leslie, I don't mean to put you on the spot, but I think this is an important question. If China wasn't the world's second largest economy, if it didn't have the consumer base that so many of these companies want access to, if we had these kind of allegations of human rights abuses in any other country would we be looking at doing a trade deal with them. Um, it's it's clearly

a very difficult issue. And again China is not the only country in which human rights are a very serious issue, which is in no um way, shape or form to diminish them. Think about North Korea right, Think about the Commission of Inquiry that was released UH investigating the human rights abuses in North Korea, and that at the moment it's pretty much been set aside in order to try and engage, you know, selectively again with talks on the

non proliferation issues. So America when engages abroad, has a set of priorities and it tries to balance them, and of course human rights is a through line, but it has been selectively applied in China is not the only country in which, you know, there's a sort of oscillation based on a range of a range of interests. Lessie Benjaminy, thank you so much. With Chad A mouse would greatly appreciate it. This morning. Jane Farley jointing US now founding

in from London, the capital of global foreign exchange. Rabbit bankhead of ex Strategy, Jane why sterling up here ahead of some serious event risk next week. Well, I think the market thinks that perhaps the event risk is is relatively muted. Now. We've got to remember, of course, that although there is still over a week, just over a week to go until the election, there's been lots of reports and in the UK suggesting that Boris Johnson's advisors have really been tried to keep a lid on what

he can say. Now, if you go back to the twenty seventeen election, at that point, certainly at the beginning of that election campaign, PM May, the previous Tory Prime minister, had at least a ten point lead, and then that lead narrowed and of course, if you remember, we ended up and she didn't manage to have a majority at

that election. So it seems that or list these are the reports which have been circulated, it seems that Johnson's advisors are taking note from that and are telling him only to give one word short sort of popular responses, and also to say very little. Now. The market seems to be inferring that if that policy remains, then he can hold on to this lead in the polls, meaning that if he gets into power next week, he will

have sufficient votes to push his withdrawal agreement through Parliament. Now, for now, the markets associating that withdrawal agreement to mean that there will not be in no deal brexit. But of course next year the trade talks have to start and that might bring back the threat of a nodal Brexit if they don't go well. So, Jane, let's talk about the polls and how the polls translate into seats. I think this is a big challenge for a lot

of people. The polls have been pretty consistent over the last couple of weeks, maybe even the last couple of months. The Conservatives in the low forties, the Labor Party in the low thirties. How does that number translate into seats one, Well, it's quite complicated. And the reason for that, as you know, of course, is because in the UK it's it's the first past the post system, meaning that really the election has really been fought over just a finite number of

seats that could go either way. Now, from from that point of view, it's difficult to extrapolate the percentage that we see in many of the polls back to what it means for seats. But last week there was a pole that did extrapolate that and suggest that it meant a very comfortable at working majority for for P M. Johnson.

That Since then, some other poles have suggested that maybe that leads is not what it will be in reality for Johnson, perhaps because the Labor Party manifesto had plenty of popular content and perhaps that should give up additional support for the Labor Party. But generally speaking, some pulses are suggesting that as a rule of fum, as long as the Tories are around about nine points percentage points ahead of Labor in both the poles that were seen,

that will mean that he could have a majority. Jane Fold, you talk about event risk. Me putting up the Christmas tree is event risk. It's that ugly. I got to pay for the thing. What's the trade right now? Is there an opportunistic pair you can recommend into the end of the year to play through January in February, Well, I think it probably has to be sterling, and we we a lot of good news in terms of Brexit

is already in the price of sterling. But I think if if Johnson wins, I think would probably go higher maybe two one thirty two. So very much obviously depends on the election. Aside from that, um, you know, I'm still quite bearish on currency sly alsin. You saw that move again this week in the some better news and what to missit him from the r b A and then some worst news overnight in the form of their GDP.

I think that's going to be a very interesting story next year, more cuts potentially from the r b A and maybe contributing, So that's going to be very interesting story into the new year. And then of course the Swedish Krona and write heike potentially at this month's bump from the ricks back just kinda go further up on the back of that. So that's a very interesting story as well. Do you play croner versus the euro or versus the dollar or versus something else, I don't know.

I think it's generally versus the chrona, and that's because, of course the trade links between Sweden and the Europe are so strong, so and that's more meaningful really for

the Swedish economy abandon abandoning negative interest rates. We're starting to see it, aren't we, Jane and I just wonder whether we're going to see a whole lot more on a bigger stage let's say the ECB, what is the attitude on the continent at the moment towards negative interest rates and a place like the Ricks Bank, at a place like the u c B, well, the Rick Bank. I think it's a really interesting example because you could say,

we'll look hold on a minute. Why why would they possibly hike interest rates when you've got the biggest trading partner in having cut interest rates to see the Arizona course where we have growth arguably slipping in Sweden? Why

would they hike interest rates now? And one of their big concerns, and they're quite candid about it, is that they are concerned about the level of household debt now asset pross inflation like in in In many countries, since the global for natural crissis has been strong, house prices

have gone up quite a lot. And as as individuals have to chase house prices better to get on that property, or chase pause prices higher to get on that property ladder, they've ended up with a large amount of disposable debt as a percentage of disposable income. And that's the case in many codes of failure at New Zealand, UM, various countries around the globe. Canada another one. So that is a big concern. And it seems that bit the pushback

against negative eels really is spreading. We see more conversation UM in Japan, UM in the Eurozone, UM. And and this is part of what what's informing the RBA's decision and probably one of the reasons why the RBA have said, look, we're not going to cut to interestrates to five, well,

do content divising instead. Very good, Jane Folly, where this informing us with good conversation less Vinja Murray before this special edition of Bloomberg Surveillance, as John Farrell and I in New York awaited an important discussion of the Chancellor of Germany the President of the United States, John, I believe the President will of other bilaterals, and I believe even with them being so far behind their schedule, he has a separate press conference at this point scheduled later

in the New York afternoon. The day is already running a little bit, like what do you think we're behind. I think we're behind like a solid half hour on the schedule. We welcome all of you. Jane Foley still with us with Robbo Bank giving us wonderful perspective on the litmus paper of the system. We thank her for appearance here. UH Today as well, John and I are looking at a set of newsflow. We haven't talked much about impeachment as well. John, I would point out that

this impeachment committee hearing today is original. We actually have people that know what they're talking about. For law professors Jonathan Turley UH in the Washington Examiner writing up with a really piercing essay about the narrowness of this impeachment proceeding historically not he's not pro Trump, but he certainly tilts towards a more Republican bands. And Noah Feldman, who writes for Bloomberg Opinion, has been a huge value to

me with his history of the Supreme Court. Dr Feldman will be I haven't heard a decent argument yet as to why this is not a lose lose situation for the Democrats at the moment. How did they come out looking good from all of this and looking good with the electorate, Because in the court of public opinion, that's what matters here, And of the last month or so, it's not clear to me in the polls that that

bringing the Court of public opinion along with them. I don't disagree with that, but I would suggest there are different electorates out there, and from day one year and Speaker Pelosi fighting the process the entire way. Speaker Pelosi, it was finally caved in, if you will, and they're speaking to a certain electorate riveted by this. And John, to your point in Jim Glassman on Job's Day mentioned

this in his travels for JP Morgan. There's a huge part of the country where it's like, Okay, what do you have, John, Eddie, Peter Port coming out And about five or I missed that, Please said that. Jane Fully of Rubber Bank is still with us. So Jane, let's talk about it. Labor market data coming up through the week tomorrow, initial jobless claims, the payrolls report is coming up on Friday. So Jane, what are your thoughts? What

are you looking for in the job's numbers in America? Well, I think this is going to be fascinating one because of course this week we haven't had a particularly good data fund the manufacturing sector. And the question is, you know, is this weakness in the manufacturing searcher is it pushing into or will it push into the labor market. And if that's the case, you know, I do think that the market will begin to take a different view on the Federal Reserve, begin to be worried about the pals

class half full outlook on the economy. So I think the payrolls number, if it is weaker than expected, if there are signs that there are softening there, um, you know, I think that would be quite a nasty signal. Jane, I look at the feeder, and I look at the meeting to December, and then there's a January twenty nine meeting. I mean, I think I'm guilty of this. The media focuses on the next event, obviously, Are you focused on

December eleven? Is the be all end all? Or is it much more into the meetings of two thousand twenty I think it's really the meetings of two thousand and twenties. But I think we all need to watch very carefully at the rhetoric, watch the guidance, watch any watch out for any shifts. And therefore it is going to be and I think all about twenty But I don't think that we can overlook any of the meetings that are coming up. I think they could all provide quite interesting

clues potentially hugely valuable. Jane Foley, thank you so much for joining us on the dusk rubble Bank in London, Bloomberg Opinion informed perspectives and expert data driven commentary on breaking news. Good morning everyone, time Keene in New York. This is the interview of Day on the American military and of course our extension across the Atlantic in the history the seventieth anniversary of NATO. It is without question a timely interview on the state of the Pentagon in Washington.

We do this with Jane strevidis what you need to know within the heritage of Supreme Allied Commander. It started in ninete with a gentleman named Eisenhower. The Esteem Ridgeway followed, and then onto some wonderful names from the past, including General Haig, General Galvin, and I really want to mention John shalikash Filly as well. And they're all generals. And then someone from the Sea shows up, the Admiral. Admiral strevidis, what was it like to be the first Navy guy

in the room? What what was the body language? Is a gentleman of the Navy walked in the NATO door. Yeah, it was bad. I had a sense of fifteen generals spinning in their grade. Uh. Really a shock to the system. In fact, my memoir of those NATO days as Supreme Commander is called the Accidental Admiral, and I think that's what everyone thought. It was just some kind of a

huge computer error that delivered me to those shores. Well, we are honored to have you with us today, and certainly to distill what we've observed, I would go back, Admiral to the suits and ties politicking as they do, and we should say that Admiral Stevidus was vetted briefly as a vice president or candidate along the last path.

But I would say, James to Vidas that there was the gentle dodging of Russian missiles involved with Turkey, and then the photo opportunity of Mr Radwan next to Mr Trump. Explain how NATO and the serious business of the military should adjust to Russian missiles in Turkey. Yeah. Let's let's make a point first, which is NATO is a military alliance, Tom, but your point, its center of gravity is decidedly political, and what we're seeing our centrifugal forces pulling out the

Alliance today, Francis mccron calling it brain dead. Trump sending out ambivalent signals about Article five and where we come to Turkey Urdwan leaning out of the Alliance buying Russian missile systems. We can't integrate those with NATO ear defenses. And by the way, he's also conducting joint patrols on the Syrian Turkish border with Russia in the Russian Armed Forces. So this is a moment of real UH discord within

the Alliance. Does the Pentagon have the president's ear? I mean he is established a tone which I have said has Republican and Democrats support, which is is he said shape up to Europe that resonates with a certain American public. How does his tone resonate with his Pentagon Um, It's a mixed picture. In one example was just last week when he issued a series of pardons for UH some of the Special Forces members who were accused of war crose Um. That was a real point of disagreement on NATO.

The Pentagon is glad that the President presses the Ally to spend more and is having some positive result there, but the Pentagon is also concerned about his lack of enthusiasm, shall we say for supporting Article five, because that undermines the confidence of our partners across the Atlantic, the different people that we have in NATO, and we have the images of our youth for those younger of substantial American presidents in Germany with the tension of a divided East

and West Germany and the complexities of Berlin and the Iron Curtain. But if I look at the two hundred and sixty six Financial Management Supports Center, part of the twenty one Theater Sustainment Command, what do we actually do in Europe today, Admiral Um. First and foremost, we have training exercises where we integrate with our partners and Tom. That's where we trained to go forward and fight in Afghanistan, where NATO was fully engaged when I commanded that mission,

hundred and fifty thousand NATO troops in Afghanistan. So Europe is where we train, equipped and organized those forces. Secondly, logistics you just mentioned logistics, Um, the logistic ability to move those troops forward to not only Afghanistan, but to the Balkans, to the Libyan campaign, to maritime operations off the coast of East Africa for piracy. All that is centered in the NATO command structure, which is in Europe. So I'd say we still need those bases all closed.

Tom By saying at the height of the Cold War you mentioned General Galvin. At the height of the Cold War, he had four hundred bases all around Europe. Um today we're down to something like serious basis, so we've already reduced that based structure. By I'd say it's about right where it is. Do they want us there? So much of the tone that I'm hearing in the endless interviews of suits and ties and occasional dresses in London. Here at at the Grove north of London, at Watford, we

avoid the question do they want us there? What is your belief on that right now, Admiral I think they very strongly want us their President Macrone's comments about NATO being brain dead are really driven by a dwindling confidence that the Europeans have in whether the US will come forward or not. That's why it's so important for the President to step up on this Article five, even as he correctly continues to press with the Europeans to spend more. So. At the end of the day, Europe again is a

political Alliance. Its center of gravity is confidence in Article five UM. The Europeans want us there, but they're a little less confident than they were saved five to ten years ago. What did you work on that? What is the task of General Walters now of the United States

Air Force, with his leadership for America at NATO. What is his task given what the was it in the seven less First of all, his principal operational task is to continue the uh the operations in Afghanistan, where we have twenty thousand NATO troops, much reduced but still a very significant mission. Secondly, he'll want to keep his eye on the Balkans. Thirdly, I want to keep his eye on the Arctic. And fourthly, who want to deter Russia.

What he is trying to do at the political level, working with the Secretary General of NATO, Yen Stoltenberg of Norway, is to convince the Secretary General in those men and women in suits and dresses, to convince the United States to continue to move forward. He has both a diplomatic and a military role to play. And by the way, General Todd Walters was part of my team when I was NATO commander. He's a superb officer and a great choice for the job. A Stevides, Thank you so much.

Sioneer four years a Supreme Allied Commander Europe for the United States Navy for uh, the United States of America. James Travitas and I really can't say enough about his new book, strong book, tens or so chapters on admirals. I commend to you, folks the single chapter on the Gentleman from Submarines at Murick over Paul. As you know, there's any number of views, the yes year, next year, Yes, US media forecast, all these kind of things you have

to read, And the answer is you actually read. Brian Weezer a pivotal in this on the United Kingdom. But but we're on the U S. Why don't you even big in Brian on the nuances of a nice executive summary of of of the path forward? Exactly? Brian Weezer, he is a group and global president business intelligence. He is the go to person when we're talking global advertising. Brian,

thanks so much for joining us on the phone. So let's talk about first of all, a pretty good year for advertising, right, Yeah, no, it's it's definitely a diverse from yere. Uh you know, it's unusually strong as ten was too, and you could be big question for while was it so unusually strong? And the reality is that there's so many digital based digital first digital athemic marketers, the likes of Amazon, like Facebook as a marketer again

not as a seller of advertising. Dozens of companies are probably driving almost all the growth, and it skewing growth into digital and so it makes it look like we have a really healthy advertising market, but it's not sustainable at these levels. So, Brian, is this just a story as we think about global advertising? You mentioned some of the big digital players. Is this just a game of the haves and have nots that you know, if you're

a Google on a Facebook, life is great. But if you're a CBS or you know, a Comcast or Disney and you've got broadcast in cable networks, it's not such a good story. That's a good way to put it. I it's not exactly h terribly for uh, you know, TV centric media owners. It's just not necessarily going to be much of a growth market uh anytime soon. And I think if we look at print is really it's all bad. Uh, you know, radio is kind of stable

outdoors are really helping me, um, which may surprise some. Um, but yeah, I haven't had not the general Brian. One of your great things that group em and of course before that pivotal was the idea of traditional TV is not dead. Everybody calling for the death of TV and you're saying no, no, no, what I'm seeing And I mentioned this earlier, folks, My anecdotal evidence is pretty much everybody in a planet, in some way or another is

using YouTube. In your analysis, do you fit in YouTube revenue? Yeah? Absolutely, um. Now, YouTube is still primarily something you would bucket into the digital or line item because the vast majority of spending is meant to be comparable to into related advertising. Um. And it's a big piece of of spending absolutely well. Compare it to the small slices. Is YouTube brand wiser? Is YouTube bigger than newspapers? Not yet? Not yet um uh. But that said, uh, it's not hard to imagine YouTube

being bigger than newspapers. That's deadline to think about some point soon because at the end of the day, newspapers continue to shrink by double digits. Even including newspapers digital revenues. You know, we're estimating about twelve billion on newspapers today. Um, I don't have a YouTube. Vious doesn't disclose its numbers, but yeah, YouTube is probably not that far from newspapers.

So Brian, let's let's talk about the ad agencies here. Um. You know, there's been a concern that maybe they're getting disintermediated, that you don't really need to go to a big ad agency. All you need to do is kind of go to Google or Facebook and they'll put the dollars worth you know, the people are what's your call or what's your thought about how the big ad agencies at WPPS, omni comms, how did they fit into the mix going forward? Yeah, well,

generally the largest marketers certainly benefit from having agencies. There's reasons why many of them choose to do certain parts of their marketing activities themselves, whether that's the creative or the media slide um, you know, and they've got to consider the there's pros and cons to doing so right. Yes, you can probably faster in some ways, Um, if you do everything yourself, but then maybe the choices aren't as involving as broad or deep knowledge base as if you're

using an externality. It's the very same issue that I think every industry has their professional services that have with respect in sourcing versus outsourcing. UM. Just today though, you know one of our competitors, uh just Story and ad Week about Cody, which is the many um obviously packaged goods company just sending their media back to an agency. UM and just interesting. So that happens all the time too.

I mean, what's so interesting? Years we're all experiencing new ways of delivering these messages to us and you know, like Brian, let's just go through them now. Given sports meet, they're now staying with the sports event on part of the screen as they show the ad who's winning. When they do that, does X on mobile sending a message win or do they lose? You know? I think the long term health of the business, uh, for any given medium will definitely benefit from uh, you know, trying to

put a consumer experience first. I think that this has been a problem in the United States. Commercial is a problem. Unfortunately much large advertisers look on the term basis it doesn't necessarily proved to be less effective. But I would argue that if the consumer experience is really negative, generally will make at a less desirable environment over time. Oh you spentioned time. What's the appropriate time ad for Brian Weezer?

Three seconds? That's a good thing to try to be brief. No, no, but but I'm at the ad links is three seconds? Or can we get out to fifteen seconds? Is that too long? Now? You know, it totally depends. I just saw someone who's a tick talking off the Bloomberg former TikTok TikTok, but so doing a TikTok thing where you can imagine a three second ad uh fitting really well. But in traditional TV, you know, the idea of two minute ad break has generally worked. Um, So it really

just depends on the medium. In the context in which the most of the well sports is still king. I see that Fox sold all their ads maybe like five point six million dollars in each or something like that. So Brian sports is still there, right, Yeah, I think so. There's been maybe over investment in some respects in sports on the part of the of networks. Um, it is still the environment that will capture more live viewing. UM,

it's still really important. It's you know, tennifcent of all TV viewing is sports, and it probably has disproportionate value. We've got to leave it there. Brand Wiser, thank you so much. 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 worldwide. I'm Bloomberg Radio