Surveillance: We Still Have Work To Do, Rep. Scalise Says

seeing help wanted signs outside businesses. Even I'm seeing them now here in one zero zero two two. They're out there, aren't they. They're all over the place. UM. I had to travel a lot and talk to businesses that are trying to manage things, and this is the number one issue we're trying to find bow trying to figure out how to retain them. There's some clever things going on people are figuring out, like crazing their wages. Well, that would be one thing, but there, for example, it's hard

to convince somebody give them a four one plan. Young people don't care about retirement plans. But point there's forty two, so student loans, student loans. Some of them are clever. Ones are talking about paying help paying down student loans for kids, like the nonprofits to do. And you get that benefit as long as you stay at the company. John and I, we're live in a rarefied atmosphere. I don't know if you know that, but okay, to to

all the people coast to coast, listen to this. Somebody's making thirty eight five or forty two seven or whatever, and they really need to get up three or four thousand dollars. Why aren't those conversations happening in a sub four percent America job economy. Yeah, it's it's interesting. I mean, we're all. Anyone who grew up in the seventies and eighties and saw how this worked is surprised by it.

But I think some of them is the problem is businesses are opera it in the same competitive environment that workers are. And I think businesses are just being really cautious about this because they don't know whether they can up their price. John jump in. I got my own theory. John, jump in here, and see what I think. Jim is touched on an important story that labor costs are going up for the employer. It costs small to employ someone in America. Now, there's a lot of benefits they pay

for healthcare. Healthcare is one of them, and workers don't see that. And I keep asking people, well, why aren't you showing that in your paycheck. I know what the price of gas is that all my local gas stations. I don't really know what my company pays for benefits unless I go to the website. So it's not in everyone's face, and they tend to think, well, if you've got to pay more for my benefits, they don't tend to think of that as a pay as they're part

of their pay. But it is from a company's point of view. So it's that a structural change. Jim that you just don't think he's being captured by the economic diight set. No, it is captured. We watch it in the employment cost index measures, for example. They capture a lot of the cost of benefits. But I think for

the average worker, they don't see it. And what they don't dan is why their employers maybe are being so cautious, but maybe because they're not aware of what's going on with health care costs and all the other benefits that the companies pay for. Jim, let's talk about the week ahead as well. Cp I retail sales and the chairman Federals of Chairman j pal speaking likes this week as well. What's the highlight for you out of those three things.

Retail sales I think are pretty impressive. Consumer trends are good. I think the CPI, to me, what's what's valuable, what's useful about what's going on with the dollar right now? It's helping to damp in some of the worries about inflation in the US. Maybe it's spreading it to your it will shift it to Europe a little bit, and and to China. But I think you know, of all the things I worry about in my list of and it's not a long list, the FED is not on

that list. Interesting why because all the FT's trying to do is take their foot off the gas. And I know people have gotten used to zero interest rates in the last decade, but the fact is the FET is really just trying to move things back to something more normal. We never know what normal is, but they're not going to go overboard, particularly with inflation. Well behaved, you'll you'll know when the FED gets around and thinking about stepping

on the brakes. That's not our word, you know. I know you thirty years ago were absolutely glued to what bon Jovi was doing, and they had they had the number one hear thirty years ago bat medicine. Okay, fine, now you mentioned those of us from twenty and thirty years ago. We're looking at this job economy and going, yeah, really, I would suggest what's changed is the direct linkage of bonus for executives to labor compensation. If they give labor a wage, now they feel it comes directly out of

their large bonus compensation. Were thirty years ago, they didn't have that structure. Yeah, that you know. I think the bigger story, though, is innovation has been very disruptive for their workface. So if you look at the what happened to the share of income the goes to workers and the share of it goes to profits and other things. It really compressed back in the two decades ago, which is why all of us economists are talking about the superstar effect, the Amazon's you know, as all of us

go shopping on our phones. It's transformed retail sector. And I really think it's innovation that is driving a lot of the challenges that workers face. Um and I think, you know, I don't know how you get around the way to get around that as you've got to figure out how to get people there. There are a lot of new jobs that have opened up because of that, but you gotta get it. Takes a lifetime sometimes to prepare for that kind of stuff. Okay, Jim Blassman, thank

you so much. A good conversation here on on the I get more mail John in this than anything else. Kevin Book joining us now striding it's wrong with you? Kevin Book joining us now, Clay, have you Energy Partners head of research? Important? Seriously, what's important in Australia as we look at as a US story the Stratis it ran you know you're oil. Yeah, it's you know, you make a joke about it, but it's a huge deal away from West Texas Intermedia massively. Kevin Book joining us

now clear for you? Energy Partner's head of research, Kevin, How have we gone from a situation where the Saudis is saying, pump baby, pump two. Maybe we cut through next year and we need it. Well, they're looking at a seasonal blow basically first quarter is always weak for demand.

On top of that, you have currency adjusted prices hitting some of the non dollar importers harder, weaker GDP, and with that everybody pumping faster than ever expected, Russia rising to the challenge the US UH boils coming out of the premium basically on the backs of burrows, even though pipelines aren't there to carry it. UH. And that's bringing a lot of supply to the world. So they're looking

at a lush world. They're seeing some some price weakness. UH. The question whether they really cut or whether they talked about cutting is a different question. We kissed below seventy Brent, the princes above seventy. Now, you know, words go far in this world. I mean, Kevin, what's so important hereon? And John brings it up with a discussion of Australian in folks out of the Asia or aust Asian coverage

is very important in the New York Evening. But Kevin, what is so important here is we forget about nations like Australia that are completely dependent unimported oil. How are they doing in this latest mix? Well, you know, it depends on who's imported from where. If you were buying your oil from Iran, you definitely have a different sort of thinking to do. For India, you're talking about ten or fifteen percent of imports. For China, you're in the

single digits. Really only Turkey massively exposed. For everyone else buying oil on the open market, quality is the question, and it's the question of whether you're going to get the mediums that are going to be extremely tight as the Iran oil sanctions ramp, or whether there's a there's refineries that can make good use of light with distillate demand being the thing that's leading the pail right now, Uh, you're probably going to see less of a bid for

the light and see some of the margins compressed with the distillate driving up the medium barrels. And John has comes from a very smart article out of Sydney with the conversation is a title of the blog. Fifty two percent of imported petrol comes from Singapore, eighteen percent from South Korea, twelve from Japan. Well, you know, like introit's serious issue. Well, let's talk about some of the refining

demand in China. Kevin, It's really difficult to get a few on what is happening with China at the moment, because many people will tell you a story of a slow down, deceleration and potentially weakening demand for commodities maybe in the future. In the here and now, we're looking at record crude demand arm WEA for some of the private refiners. Yeah, this is first of all, it's the opacity problem that I don't think we can circumvent here from the States. Maybe with drones and lasers you can

do a better job of sighting China. But from from our perspective, certainly very strong crude demand looking like strong throughputs and not yet weakness. Uh, they are building reserves. There's always a chance that some of those barrels went into the ground and not into refineries. But right now what we're seeing looks like a lot of refinery throughputs. So, Kevin is three big stories that I think of really

pressured crude over the last month. One is the issue with Saudi Arabia pumping a ton of crude, a lot of crude. The other issue is Iran and the waivers that have actually been introduced to allow some of the importers of Iranian crew to carry on importing Iranian crude, and then the demand picture as well, which is becoming increasingly much more of the concern on the margin as well. Kevin off those three issues, what is the most important issue right now for the your market? I think you

probably should focus on number three. Demand. At the start of this year, we talked about the US driver flattening out and declining on consumption, not because of price response, but because of efficiency built into the fleet undercutting demand. That's happening around the world. You have a more price driven demand response the non O E c D buyers they buy with GDP as it rises to As GDP slackens, demand slackens, the O E c D buyers much more

price sensitive. But we're seeing increased price sensitivity in the Chinese consumption of crude and petroleum now as well, which means that with a high currency adjusted import price, you're going to see a relenting in Chinese demand eventually. Within the eventually is what big oil does? I mean we had I guess we had hopes for a whisper of a hundred dollars a barrel. Bring it back from your international relations study to what American big oil does. Are

they just assuming barrel oil? Can they actually set higher different companies have different capital discipline. The engineers. Think of the U S Oil companies as engineers. They build it to run for a long time. Think of the international super majors as traders, resource starved, prospecting into the world, will trade anything, just make a margin? And think of the U S, E and P s basically uh if you will, as sort of the high risk, high profile,

high price, break even kind of companies. When you look at this sort of the low end of the range on the price range, you tend to see more durability in the U S Super majors because they have break even prices the blow end of the deck. That's been a story and for the big these companies of a just did so much in the last company years. We caught up with Bob Dudley this morning and the brake even I forget what he said specifically, but was in

and around sixty dollars. Sixty dollars Kevin. We've seen big changes, haven't we. Oh yeah, I mean look the way that you can look at the labor force, last tidy these companies have they laid off, lots of folks still haven't hired back. Some are doing reductions in force. Still they're parrying all the way down every which way they can. They're gearing up for a much a much tougher environment than the one they're in right now. I should just

correct myself. Not the brake even, it's what they budget for, and Kevin just to be specific about that. Not the brake even, but just what they're budgeting up. It's changed a healthy internal ready to return fives into that. What is the international oil relations that our cabinet officers should focus on. It's a run and run and run is that the way to go? Or they too focused on a run? Well, Iran is into an oil issue. I

runs nuclear proliferation and nucional terror issue. Um. But if you want oil to come to market, you have to think about not just Saudi Arabia but Russia. And I think one of the stories that's under appreciated in the last six months is that the Trump administration did go to Russia and asked for more oil there as well. UH, three pillars to the market US Saudi Russia can't have an around policy that compresses buyers of ariding and crude

without it. I mean, does Mr Putin want to deliver more oil he certainly doesn't seem to want to stop. Market share is good on you know, if they're buying services and in upstream costs in rubles and they're selling in dollars, then the world of u S sanctions compressing the ruble has been profitable for a lot of companies, plus healthy taxation on the outbound. I think we're at a pub Soviet record on we Haven for production. We are then they show no signs of of wanting to

slack in anytime soon. Kevin, thank you, really smart, really smart this morning, on this veteran's day. It is important to speak to officials across this nation, and there's no one within the Republican Party, particularly with the passing of John McCain to speak to. And the gentleman from Louisiana, Steve Scalise, is of course a Republican. He has focused on a return to Congress, a lame duck Congress before a new minority moment for his Republicans. He's in the running,

of course Wednesday for leadership position. And we are honor that the congressman visits us today. Back in the game, one gunman, countless heroes in the fight for my life and It's not the usual quick read. It is a carefully written effort about what he went through after an horrific shooting in Washington and farm more and always with Steve Scalize the view forward as well, What is your view forward, Congressman? Thank My view forward is is first of all, to keep getting better. I I'm down to

one crutch now. I had to learn how to walk again, and of course I talked about that in the book, the whole process of going from almost dying to to now. I had a scooter I needed to use to get around on, and I had two crutches. Now I'm down to one crutch. And my next goal is to to be able to walk again without without crutches. I'm not sure if I'll be able to run again, but at least, you know, I talked about this too, that it really focuses you in the things that are important in life,

you know. And I love my family. I get to do do a lot more. I've been hunting a lot more with my son, and you know, just spend a lot a lot of times on the weekends in New Orleans with my family. And I love my job, and I was so honored to be able to get back to work in September last year too, you know, to be in the middle of working with this president and getting things done and you know, getting the country back on track. It's it's a passion of mine and I

get to do that as well. The medical debate became important in this election, and not not that it came out of nowhere, but certainly it became dominant across the eland of this country. How many doctors and nurses at one given moment did you have around you? Did you get over like twenty doctors and nurses at one time?

It was ad You talked about a team effort. I you know, I had everybody from you know, all the trauma surgeons that were at the Star Hospital, from Dr Saven his old whole team there to uh my words, Apedic Dr Gold, and I got to know them all by name and um and then the wonderful nurses that's the care of me too. Were there any Democrats there were, and you know some of them, some of them would

share their political affiliation. They would ask if you know, they would ask, you know, you would just talk along the way. I mean, You've get you know, a lot of conversations with people and um, you know, and just one of the people. To me, it's not about what their affiliation is, it's you know, they did they were incredible professionals, and uh it took great care of me. And look my physical therapist and occupational therapists. Uh, they did wonders and still put me on the steve. Like

a lot of Americans, I've been fortunate. I've avoided the medical issue. You haven't. And how did it change your perception of the healthcare debate in this country? You went through the reality of our medical industry. How did it change your view forward? You know, I've always been to the belief that we have the best medical delivery system in the world, and it had some problems before Obamacare,

mostly related around cost and access. But for people whether if you were on Medicare, you like Medicare, if you had private insurance through your company, most people really liked that coverage. It was you know, people that had to go by on their own. There was no real marketplace, and Medicaid was the most broken form of healthcare. So Obamacare doubled down by literally dumping millions more people on Medicaid.

It took money away from Medicare, and then in the private marketplace, you literally had no options, and so healthcare got even more expensive. What I like to see us get back to its a system of real free market competition. There is no price transparency. Uh there. You know, there's great medical professionals, but doctors shouldn't have to go check with unelected bureaucrats in Washington to figure out how to take care of their patients. We've got to get Washington

bureaucrats out of the way more. The paperwork that's involved in healthcare is unbelievable. People are scared to death of going to jail, so they spending time fill up paperwork that they're not using taking care patients. You you come from Louisiana, from the South, with their immense support, not only in the military, but starting with the Marines as well. I think I saw a media distillation of the president's

efforts in Paris this weekend. Can you distill for us what the southern military of this nation thinks when a president because of rain, because of exhaustion, whatever the excuses, doesn't show up it below. I mean, that was an extraordinary moment, but I want to know what Louisiana thought of that. Well. First of all, the President has been incredibly supportive our military. I see it on a regular basis. Um from Look, the National World War Two Museum is

in New Orleans. We love our military. Yesterday was Veterans Day. We were today we celebrated. But yes, we also have the hundredth anniversary of Armistic WORL World War One, and the President was very he went to the memorial. He's to uh so many military ceremonies, and you know what

would happen in Paris. I know there there are some of the European leaders that still don't want to acknowledge that he's president United States and he is making our NATO allies finally contribute to what they you know, to what they were promising to do. And that's a good thing. But look, the President attended the American Commemoration ceremony. Uh

in Look, he's been wonderful to our military. And by the way, just signed a bill to get the largest pay raise to our men and women in uniform that they had years and and to give them the tools they need. I mean, last year we lost more men and women in uniform to training depths than the combat depth before thin It's it's unreal. How many people. I mean, you saw planes falling out of the sky because they didn't have the training parts they needed because the military

was underfunded. And the President made it a point to address that, and we in Congress passed to build to fix that. Just a few months ago, the President funded in the law. How are you going to respond to this new Congress? You need to get through a lame duck term and then you will enjoy being a minority in the House. How does that change your data? Well? What doce that enjoy being in the minority. But you know, we still have some work to do in these last

few months in the majority. And what are you gonna do? What are you gonna do in this lame duck session. The first thing we've got to do is address funding of the wall. My strongest support securing our border and building the wall and using other technology to to make America safe and to give the president to the president get that through the Senate. Well, you know that the House is gonna do its job and let the Senate

do its job. And you know the the Senate's got a lot of issues they're gonna have to deal with. But we've got to deal with ours. By the way, we also have a farm bill that hasn't been resolved. We have a negotiation going on on a conference committee on a farm bill. The biggest issue that's that's still out there and it hasn't been resolved as work requirements.

And frankly, I think in a time when you see such a great economy, I mean, they're more job openings than people looking for work, and yet we're paying people not to work who are fully able bodied. So in the farm bill, one of the things we say is, look, if you're able to work, then you have to go look for a job, and if there's one out there for you, you you have to take it. Otherwise you're not eligible to keep getting uh food stamps and other kind

of welfare benefits. And by the way, if you can't find a job, will train you for a job. But you can't just sit at home. I mean, in America, you have the right not to want to work, but the taxpayers in this country shouldn't subsidize you for that. If there's a job waiting for you, and right now there are more job openings than are people looking for work, let's fix this. Let's get people back into the workforce and help restore the dignity of work in the American

dream to people. Steve Scillies, thank you so much. The book is back in the game. One gunman, countless heroes in the fight for my life. Congressman Steve Scalise joining us today, of course always from Louisiana, and of course some real comments there on his medical condition as well. Right now with this prim uh as we look at fixed income with t d UH securities pre A good

morning morning, Thanks for having me on. We are closed today and you are working away, and I'm sure you're working on a theme or a movement into next year. We're at that point where people like Priam Isra put together, UH the year forward view. What do you do after the curve flattening of this year, what's the theme that you'll be focusing on into January to June. Sure, so

you're right, I am working on our twenty outlook. UM. I think the theme is less about curve and more about duration, because what we've seen this year is the the the US sort of outperformed, so there's been significant divergence. US interest rates have risen the FED hike more than what was priced in Now going into the markets pricing in two hikes. The FED is communicating three, but in an environment where global growth is slowing and we don't

see any congressional actions, so no further fiscal stimulus. You have a fiscal cliff coming up late nineteen into early twenty. My fear is that we've sort of seen the peak and yields. I mean, you know, we could certainly go up a little bit more, so three thirties what we're looking at, but you know, if you get to three thirty three forty, I think that's a good time to go long duration. So the question is really how do you start scaling into long duration trades here? Which is

a little out of consensus. I think most people are looking at US economy that's doing well, but I still look at you know, how long can this growth momentum last? If the tax stimulus effect starts to feed and we start to see some impact from higher interest rates impacting housing, impacting other interest sensitive sectors, and then I look abroad for any help there. And I think global growth is decelerating.

I think that's the one clear trend. So I don't think we're going to continue to diverge, certainly as implications for effects. But I think for rates, there's going to be a time to go long duration, uh, you know,

pretty soon. I think if that's the case, for investors that are more more inclined to accept risk, do you believe that there will be a risk on field to the market because with interest rates peaking, people are going to recognize they're not going to get more by putting their money into bonds, and they're going to have to find riskier assets in order to generate the returns they need to keep their clients. That's a fair point. I think when it's clear that interest rates are bottoming that

the economy is okay. I'm a little nervous around risk just here because I think we've eased in a lot of good news in the equity market or or in general risk asses. So by the time the market reprices and we realize that actually growth is decelerating, but we're not falling off a cliff, I think that will be a time to go long risk in the near term. With the FED sort of on autopilot here almost, I think risk asttes have a bit of a headwind our

bonds as data dependent is the FED. Yeah, I think bonds are maybe a little bit more forward looking than the FED. And you know, the FED is in a bit of a tough spot because they have to look at US data, and you know, the the US economy seems to be doing pretty well. I think what the bond market is telling you by not pricing and more hikes there are zero hikes price into is telling you that the bond market doesn't believe that the economy can

continue to accelerate here. So I think, you know, you're you're getting a little bit more of a forward looking view. But I think Paul's comments will be pretty significant this week. Um On on Wednesday, pretty miserable of this, really quite advan by her perspective. Out the time function one year, two years, five years. Rarely pre that we talked about three months paper or three day paper. This year out of two thousand and eight we began to speak of

library again. Let's talk about first principles. What is libor and why did it reassert itself this year? Sure? So library um is supposed to measure the cost of unsecured borrowing, and you know it's it's it's a measure of I guess, I guess funding costs for the financial system. The reason it became a big deal this year was the spread between Library and FED funds or OIS widened significantly in

the first quarter. It started to widen again. Now seasonally, I would say that going into urine, going into quarter and it does tend to widen. But the big move in the first quarter this year was I think in part due to a significant amount of bill supply as well as repatriation um so the fact that a lot of companies were moving cash back to the US. They were not investing in bank paper, so the cost of

bank funding went up. But separately, I think what's happening is that the FED and global bank regulators are telling us to move away from libror. So that's a theme we'll be talking about for the next many years. I'm not sure the two twenty one is the ultimate endpoint of LIBRARY, but they're trying to transition us away from it. Commercial paper used to be a thermometer. I think it's gone. What do you use to measure trust in the short

term paper market? You're right, I think CP issuance has has gone down, But you know, we would look at CDs. I think bank CDs is one measure. Um You look at trading volumes to some extent in the euro the market, I think you can look at the front end. The thing is that's been significant increase in bank reserves in the US, so banks don't really need to borrow a

whole lot. So I also look at the spread between effective and UM and I U R. That's a measure of, you know, our our reserves becoming scarce here, and then that can become an issue. I think for bank funding. I don't think we're there yet. Another six or nine months from here, I think that could become an issue. Do you believe that there's a dollar shortage, that there's a lack of liquidity compared to let's say two years ago. I think in two year end they always is. So

there's some of that going on. But but the big difference from two years ago is two years ago, the FED was actually infusing reserves in the system. Now the set is actually letting it run off. So I think there is the starting signs, the early signs that there is a dollar shortages showing up in the FED funds market. The FED seems to be somewhat in denial here. I think they want to continue to let the portfolio run off.

They don't think this is systemic enough. So I think this team will will persist, will actually accelerate as reserves become more and more scarce in the banking system. Are banks prepared for this? Um? I think it's very hard to be prepared. Historic there were no access reserves in the system, but historically the FED never paid any interest on reserves. Also, historically we never had li could recoverage ratio.

So I think banks are having to look at their h q l A or the high quality liquid acid portfolio now and say that, well, the reserve component is going to come off. So then how are they supposed to replace these reserves? Is it through buying treasuries? Is it through you know, mortgages? So I think they go, what do you think they do? I think they will have to buy some treasuries um and they'll do more borrowing from the homeland bank system, which is why I

think the effective FED funds rate will continue to move higher. Ultimately, the Fed will have to acknowledge that they can't let the portfolio run off for much longer. When I look at the bond market, it just used to be simple. You clipped a coupon and there was a real rate return. Whatever the coupon was, you knew you were making money. We're miles from that, particularly in Europe. I mean, just

the is of negative rates and all that. Do you just assume a permanence to the oddities of your world or can we get back to where somebody clipped a coupon and actually knew they made a nominal or inflation adjusted return. Yeah, I think. You know, if you do get a pickup in productivity or structural growth, I think then this idea of getting positive real returns will come back. The problem is when you look at long term structural drivers of growth, demographics are not looking great, so that

so that's not going to help us. I'm hoping personally that there is a pickup in productivity. We just haven't seen that data. So then you look at if you've been a low real rate environment, where are we getting more real rates? I think the US is actually giving you one of the highest real rates out there in the developer. I mean, I'm looking at the five year real rate pim Fox and back in the sixties it was you know, the two percent, and there was a

big balloon in es. Yeah, the nineties given all the distortions it was. You know, you clipped your coupon in the nineties and you made a read don't even know what scissors are anymore time? Well I know that, Come on, you CLiPPA a preer. Save us or save me right now. If there is going to be a dollar shortage on some level, or there's going to be a lack or a slackening of liquidity, what is the best thing for

an investor to do. Sit on the sidelines and wait and see what happens, or do you want to be in there and be a seller? Um, you know for a risk I'm somewhat biased negatively, so I would say be a seller in sixth income. I think you don't have to go you don't have to take on a whole lot of risk to get some positive real returns. So if you have three months basally built, you know, don't talk about real rates, you're actually getting some real rate. I would tasty in the front end you can get

back into risk at much better levels. Well, okay, I'm an opinion down on that. Where's the much better level in the tenure yield? I mean, is a twenty basis points higher or is it you know X number of federate increases high. Yeah. I think when the FED is at neutrons on another two hikes, I think we will get us to neutral to seventy five or make the sent on the funds rate. I think you're supposed to extend out in duration because that's the point where the

recession looks a lot more inevitable. So you know, you're probably another twenty based points away from the tenure, but you know right now you're getting a decent pickup in the very front end itself. Real rates in the front end. This has been hugely informative. Premier, thank you so much. It's amazing PIM on the bond market. Pre Amisser TV Securities.

This is a joy more than a one year visit with Tyler Burle who runs Monocle and IF Monaco Radio, and I've appeared on that of course, particularly with visits to Davos, but also the hugely successful Monocle magazine, which PIM is one of the magazines that sustains and gets thicker.

The physical thing is something people. It's been a published success has inked to it and a lot of intellig whether and celebration from Paris of his UH nine danual, I believe it's Nindaniel Yes nin Danial soft power survey. Tyler talk with why it's so important? What does soft power serving? What does that mean? Soft power? Classical definition? Tom, And good morning Pim. Pim has been forever since we we've chatted, Tom, Pim never invites me around when I'm

in New York anymore. But anyway, that's that's the side issue. Um. If you look at it in sort of very classic terms, it's it's, yeah, it's getting your way as a nation without having to use uh force, without having to to

write a check. Uh. It's how do you have global influence as a nation through the private sector because you've got strong national brands, a combination of public and private sector, because you have a strong cultural offering, because you've got great sports teams, all of these other elements outside of the core political sphere. The kid that give you have

on the world stage. And what's so important, folks, and why people are glued to this within media and with advertising and also within just global consumption and imagery is the Tyler brulet. Green arrows up, red arrows down. Tyler, let's begin with the simple idea and the tension of the weekend France green arrow up, US red arrowed down. Discuss. Yeah, well you will recall um as recently, as as two

years ago. Uh, United States is in the number one position. Uh. You had a series of great stories, even though of course we were we were on the even of an election result. Nevertheless, if you look at the power of Hollywood, if you look at the power of the US charts at that time, if you looked at US brands abroad. I think at that time, Tom and Tim we were looking at, you know, the expansion of what you know, Hyatt was doing, Marriott bringing their brands around the world.

All of the things are very important. Um. You know, now we're in a very different place. Um. You know, there's some good things happening on the US West Coast. There's certainly some interesting music things happening. But one thing, you know, we were chatting but Tom this morning is I look at retail and I'm I'm gentlemen, I'm standing in the middle of Plas von Dome right now, and you know, I'm surrounded by the likes of Chanel and van Cliff and show May and Hublo and all of

these you know, international brands, and it's interesting. You know, the US doesn't get a look in. And if we look at global growth right now, if we look at you know, what is the interesting part of international retail. You know, we focus on China, we focus on Asia. It's the big play there is it's a premium play. We're not looking at at at a mid market or

map play. It's the top end of the market. And who owns all of these brands, whether they're Italian based or Swiss based, Trance these are these are French brands through and through. It's the Kerring Group of course at lvmh Okay, Reachmall and Swiss, but most of its sort of kidding in Paris. So this also really helped rock at them up the charts to put a much heavier waiting this year as well on the world of of of luxury and and and a premium offer Tyler Brulet.

It's always good to hear your voice. One of the things I note about Monocle is it features on a regular basis young entrepreneurial startup businesses from around the world with a focus on craftsmanship and artisan quality. What are the cities that you recommend people who are looking to either start businesses or expand their businesses at that level, that craftsman, artists and level, what cities are the most receptive.

So I think there's there's two sides to that. Of course, paim where is their cash um and where do you find a willing and accepting audience? Of course, take your ideas into prototype stage or two hang out your single and of course is you know where do you have a talent pool um and an interesting and interesting a place to get going. Look at all eyes have been on the west coast of Europe. The turnaround story of Portugal has been about manufacturing um, and so many people

are going to to Lisbon at the moment um. So I think Lisbon as a manufacturing base, but also the capital base. Now, I mean this is a city they're already building a second least Francais because so many French people are are moving there um as well. Of course it's an interesting tax regime in Portugal at the moment, so I would say there. I would say also I look up the coast to Porto. Um, you know, Madrid

is really interesting. If I wanted to do and launch a restaurant concept right now, if I said I wanted to take something maybe springboard into the Latin American work, but you know, give it a European foundation, I would look at it. Adam Madrid, I was making a European context anyway. We can talk about Asia and North America as well. If you're just joining us Chyler Ballet with a Smnica. Full disclosure, I have a subscription it to Tyler's rag and I hate to admit him. I actually

put up Tom Keene to Balloons for this. It wasn't you know, Tyler didn't like toss it to me free or something. You lift it, you can lift it. It's like a phone book as well. We're with Tyler Roley Securities Analysis, Tyler General Electric. I don't know if you're familiar with them. They're small industrial lot of connected in New York. Tyler Ge has gone ten nine eight and is now trading with essentially no bid at seven dollars eighty two cents. It's perfect to talk to Tyler Brolay

about the cultural realities of mergers. Jeff Himmelt got off the plane It's c d G and he went in there and did a French industrial acquisition. Tyler it is about cultures that don't work together, isn't it. It is? And I think I think we think we forget the importance of longevity. I was I wasn't actually one of the heads of Chanel recently, man who has been out, you know what a family owned business, which is a lot.

I mean, we don't quite know what chel revenue is, but I think it's in the region probably ten billion us UM. And and there's you know, there's something to be said for you know, picking it out and being there for the long haul. And this gentleman said Mr Pavlovsky said, you know, you have to be You've got to have people who's chick around a long time to run a brand. And you can't just bring in a consultant.

You can't just parachute in potentially a new CFO or bulls on a new business on the side of and think it's all going to be. We don't work deliriously and we're gonna get um, you know, either a nice show price or we're gonna get you know, an amazing spike and revenues. And I think we you know, I you know, in this sort of world of youth and hype and millennials and all of these things. Sometimes, actually it's all right to be on the job for fifteen years, Tyler.

One of the things that happens when you're on the job for fifteen years is you get that request to rebrand or redesign the public face of a company. And

you've done that many times over. Why don't more companies do it when they're healthy and can adjust to the change, rather than reacting to problems like a sinking share price or perhaps an activist investor, well, I think him, that's you know, the issue there is, like you've got everyone around the boardroom table in their stretchy comfy pants, right, Um, they've got an alassicated waste and everyone is around the boardroom table. Yeah, we're feeling sort of comfy and good

about things. So you know, so why why should we change it? And yeah, guess what you're the rebranding all in is going to cost us, you know, five or seven million, which you know, as we know, um, is not that much money coming out of the gate to

get going. And and that's that's so often the problem, um, And I always think, you know, smart companies start to interrogate their brand early on, and they look at is it time for not just a fresh coat of paint um, but you know, do we need to look at our whether whether we're in retail or we're an airline and we look at these lodges of our airthrop Tyler, congratulations on your soft power survey. It's it's it's extremely important to all of business worldwide. All I asked relate, would

you get the European companies to make bigger sizes? So maybe that? Yeah, Tyler, really, thank you so much. He is in Paris, and of course Monacle is his magazine. 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