Good morning, and welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Prisner. Here are the stories we're following today. We begin today with a conversation with Bank of America CEO Brian moynihan. He's in Sydney and he's stopped by the Bloomberg Studios to chat with Bloomberg's Heidi Stroud wants let's listen in.

Good morning, and welcome to the Bloomberg Daybreak Asia podcast. I'm Doug Prisner. Here are the stories we're following today. We begin today with a conversation with Bank of America CEO Brian moynihan. He's in Sydney and he's stopped by the Bloomberg Studios to chat with Bloomberg's Heidi Stroud wants let's listen in.

Brian, really great to have you with us, and we appreciate you joining us. You're here to celebrate a significant milestone. What's the mood music been.

Brian, really great to have you with us, and we appreciate you joining us. You're here to celebrate a significant milestone. What's the mood music been.

Like, Well, it's been a great time to be here.

Like, Well, it's been a great time to be here.

A team is soebrating sixty years in this country and they're all excited about it.

A team is soebrating sixty years in this country and they're all excited about it.

That we have a great.

That we have a great.

Business here and Joe and the team do a great job. And yeah, the mood's pretty strong. I mean, everybody's worried about geopolitics and all this stuff, but the day to day business activity that people seem confident. Our team's having a good year in the market's business and a corporate banking, investment banking business. We wish IPOs and going fast around the world. But overall it's pretty good in terms of.

Business here and Joe and the team do a great job. And yeah, the mood's pretty strong. I mean, everybody's worried about geopolitics and all this stuff, but the day to day business activity that people seem confident. Our team's having a good year in the market's business and a corporate banking, investment banking business. We wish IPOs and going fast around the world. But overall it's pretty good in terms of.

How you characterize the Australian market. How do you see it? Is it a growth market for the business?

How you characterize the Australian market. How do you see it? Is it a growth market for the business?

It is?

It is?

It is we basically if you think about the last decade or so, we triple the size of our exposures here following our clients. We do corporate investment banking for large companies, treasury services to move money around the world for those companies, and then we do markets for equity investors and fixed income investors from around the world and Australian investors investing around the world. And so those businesses are strong growth business in our company and growing here. And it's simple way to think about as we triple the size of the risk CARTICU in the last ten years.

It is we basically if you think about the last decade or so, we triple the size of our exposures here following our clients. We do corporate investment banking for large companies, treasury services to move money around the world for those companies, and then we do markets for equity investors and fixed income investors from around the world and Australian investors investing around the world. And so those businesses are strong growth business in our company and growing here. And it's simple way to think about as we triple the size of the risk CARTICU in the last ten years.

It's fascinating time for markets at the moment. It has been over the past few years. But I think the last time we saw treasury sale after this extent, Alan Greenspan was in the middle of orchestrating ourself landing.

It's fascinating time for markets at the moment. It has been over the past few years. But I think the last time we saw treasury sale after this extent, Alan Greenspan was in the middle of orchestrating ourself landing.

You guys are in the no landing camp.

You guys are in the no landing camp.

Do you think what's going on with momb markets A recent relentlessly resilient string of data.

Do you think what's going on with momb markets A recent relentlessly resilient string of data.

Does that just bolster that view for you?

Does that just bolster that view for you?

Yeah? And I think we not only have all the general economic work we have the top research team in the business.

Yeah? And I think we not only have all the general economic work we have the top research team in the business.

They do a great.

They do a great.

Job Candish Bounding Plant leading them and all the colleagues around the world. But we also have as sixty American consumers and so when you think about the US economy, you have great insight on what's going on. If you look at that consumer spending this year the month of October so far versus last year, or third quarter versus last year's third quarter, it's up in a four to five percent range, which is consistent with a low inflation, low growth economy. That's across about a trillion and a quarter dollars to twenty and a half dollars spent in a quarter, So it's a big sample and the people moving around they spend it each quarter on all different things, but generally growing consistent where we were pre pandemic, when you had fed funds rate at the two percent level of two and a half percent level, you had inflation and control, and you had growth in the two percent level. So that that gives us confidence that our experts to do all analysis are backed up by the data we see.

Job Candish Bounding Plant leading them and all the colleagues around the world. But we also have as sixty American consumers and so when you think about the US economy, you have great insight on what's going on. If you look at that consumer spending this year the month of October so far versus last year, or third quarter versus last year's third quarter, it's up in a four to five percent range, which is consistent with a low inflation, low growth economy. That's across about a trillion and a quarter dollars to twenty and a half dollars spent in a quarter, So it's a big sample and the people moving around they spend it each quarter on all different things, but generally growing consistent where we were pre pandemic, when you had fed funds rate at the two percent level of two and a half percent level, you had inflation and control, and you had growth in the two percent level. So that that gives us confidence that our experts to do all analysis are backed up by the data we see.

In our clients. And that's what we see for.

In our clients. And that's what we see for.

The consumer, is there of a degree of bifurcation.

The consumer, is there of a degree of bifurcation.

The demographically, it's less about bifurcation because I'd assume that they're sort of too. It's look, inflation hits people in the lower brackets more than it does others because but the good news is gas prices come down, food prices have tipped over inflations, and controls down in the three percent range as opposed it was running pretty hot, and so that helps.

The demographically, it's less about bifurcation because I'd assume that they're sort of too. It's look, inflation hits people in the lower brackets more than it does others because but the good news is gas prices come down, food prices have tipped over inflations, and controls down in the three percent range as opposed it was running pretty hot, and so that helps.

But if you have.

But if you have.

Auto debt, that debt and you want to get a new car, that debt is higher. If you have mortgage debt and you already had a mortgage loan, it's very low. And so it really depends on the consumer and really where they are. But the average American consumer has more money than they did before the pandemic, is in better credit quality before the pandemic, still has the money and accounts from some of this stimulus in the pandemic and is spending money. And that's all good stuff for the US economy because we're such a consumer. That's the unique thing about it's a consumer driven economy. It's a consumer loticonomy.

Auto debt, that debt and you want to get a new car, that debt is higher. If you have mortgage debt and you already had a mortgage loan, it's very low. And so it really depends on the consumer and really where they are. But the average American consumer has more money than they did before the pandemic, is in better credit quality before the pandemic, still has the money and accounts from some of this stimulus in the pandemic and is spending money. And that's all good stuff for the US economy because we're such a consumer. That's the unique thing about it's a consumer driven economy. It's a consumer loticonomy.

Are you thinking about making allocations or allowances with stress at this point?

Are you thinking about making allocations or allowances with stress at this point?

We always do that. So every quarter we run stress tests, you know, thousands of them every day. We run them into market's business stuff. We always look at it and so what's the case if it turns out the wrong way. So even how we set our reserves, we have a modeled series of cases we put in, so it's not all base case space cases. About half and the rest are stress cases, and the ATOM all together actually set our reserves as if unemployment was going to be a five percent at the end of next year, not what the market predicts at four point three. So there's a conservatism built in to that, and then we look beyond that.

We always do that. So every quarter we run stress tests, you know, thousands of them every day. We run them into market's business stuff. We always look at it and so what's the case if it turns out the wrong way. So even how we set our reserves, we have a modeled series of cases we put in, so it's not all base case space cases. About half and the rest are stress cases, and the ATOM all together actually set our reserves as if unemployment was going to be a five percent at the end of next year, not what the market predicts at four point three. So there's a conservatism built in to that, and then we look beyond that.

Those those are some potential complications for the FED depending on what happens in just under two weeks time. Right, it does a fiscal scenario, particularly under another Trump administration, but also certainly there are risks when it comes to the Harris camp as well.

Those those are some potential complications for the FED depending on what happens in just under two weeks time. Right, it does a fiscal scenario, particularly under another Trump administration, but also certainly there are risks when it comes to the Harris camp as well.

Is that something that you're thinking about?

Is that something that you're thinking about?

So I would separate a very near term question of the FED getting the trajectory. Our experts have them cutting again a couple more times this year, one hundred basis points this year, and another one hundred basis points more evenly spread a quarter each quarter next year. It gets to three to three point twenty five as a terminal rate, and then inflation comes down to the two point three percent as we move in the twenty five and the twenty six. And so that is a well engineered fed change. And so the dangers that data or they go too fast or too slow, and that risk is higher now than it was six months ago. And so as they move, everybody's going to watch them. And you see the self in territories one day, and you see the rally the other day. Everybody's going to watch all that. That is completely different from and I don't think that'll be impacted by the elections at all. The fiscal problem in the United States, And to give you the sound bite, the US just finished the fiscal year.

So I would separate a very near term question of the FED getting the trajectory. Our experts have them cutting again a couple more times this year, one hundred basis points this year, and another one hundred basis points more evenly spread a quarter each quarter next year. It gets to three to three point twenty five as a terminal rate, and then inflation comes down to the two point three percent as we move in the twenty five and the twenty six. And so that is a well engineered fed change. And so the dangers that data or they go too fast or too slow, and that risk is higher now than it was six months ago. And so as they move, everybody's going to watch them. And you see the self in territories one day, and you see the rally the other day. Everybody's going to watch all that. That is completely different from and I don't think that'll be impacted by the elections at all. The fiscal problem in the United States, And to give you the sound bite, the US just finished the fiscal year.

The budget deficit for that year.

The budget deficit for that year.

Was equal to the entire economy of the country of Australia one point eight trillion dollars. So think about the size of that, and we've got to get back in line. These are good times and we should be managing more carefully. And you know, frankly, we need to have the politicians to set those budgets, fund those budgets, and run tax policy against those budgets to figure out how to make this work. It's probably gonna be raising revenue and cutting expense or some combination. It's not a new problem, but it's one we got to start to wrestle with. Not that it's critical tomorrow morning, but it will be critical over the next few years.

Was equal to the entire economy of the country of Australia one point eight trillion dollars. So think about the size of that, and we've got to get back in line. These are good times and we should be managing more carefully. And you know, frankly, we need to have the politicians to set those budgets, fund those budgets, and run tax policy against those budgets to figure out how to make this work. It's probably gonna be raising revenue and cutting expense or some combination. It's not a new problem, but it's one we got to start to wrestle with. Not that it's critical tomorrow morning, but it will be critical over the next few years.

But given that risk, do you think the FOEDE went too big too soon?

But given that risk, do you think the FOEDE went too big too soon?

No.

No.

They were late to the game and they admit that. So it's nothing that we're saying. It's they were late and they had to move fast because inflation got ahead of them. And they've done a good job of bringing it back down from probably a digit rate down to about three percent last quarter three and a quarters.

They were late to the game and they admit that. So it's nothing that we're saying. It's they were late and they had to move fast because inflation got ahead of them. And they've done a good job of bringing it back down from probably a digit rate down to about three percent last quarter three and a quarters.

They're getting close to it.

They're getting close to it.

And it's never you're the inflation average from if one of my teammates told, fromnineteen ninety to twenty twenty four was two and a half percent, the inflation average from nineteen from two thousand twenty two and a half percent. It's four and a half percent just in the last twenty twenty to twenty four, and so we've got to get back in line.

And it's never you're the inflation average from if one of my teammates told, fromnineteen ninety to twenty twenty four was two and a half percent, the inflation average from nineteen from two thousand twenty two and a half percent. It's four and a half percent just in the last twenty twenty to twenty four, and so we've got to get back in line.

And so they're on that path. They were late to the game.

And so they're on that path. They were late to the game.

They've got to make sure they don't go too hard now, and that's what they are all trying to figure out watching the data. But whether it's it's a terminal rate, that's the key, and that we think is around three percent. That's a whole different indust rate environment in the US and other markets than it's been in the last fifteen years or so. We haven't come close to that level of front end rate in a long time. And if that's what is done, that'll make that's a better place for you.

They've got to make sure they don't go too hard now, and that's what they are all trying to figure out watching the data. But whether it's it's a terminal rate, that's the key, and that we think is around three percent. That's a whole different indust rate environment in the US and other markets than it's been in the last fifteen years or so. We haven't come close to that level of front end rate in a long time. And if that's what is done, that'll make that's a better place for you.

Has to be.

Has to be.

Frankly, during the most recent earnings you said you'd provide guidance when it comes to that interest income for twenty twenty five next quarter.

Frankly, during the most recent earnings you said you'd provide guidance when it comes to that interest income for twenty twenty five next quarter.

What data points are you waiting on at this point?

What data points are you waiting on at this point?

The difference of a FED cut or not, I mean three or four hundred million dollar a quarter for said stuff, so when they come, how fast they come, and all that stuff.

The difference of a FED cut or not, I mean three or four hundred million dollar a quarter for said stuff, so when they come, how fast they come, and all that stuff.

And then also just getting closer to the the near term.

And then also just getting closer to the the near term.

We try to if you predict, we try to stay what's really relevant investors, which is the near term path, the long term path. We have about a two point zero zero percent one point ninety three percent net margin. That's a percentage spread that should move back to two point two to two point three that will happen over time. The path of that will be determined by all the different things going on the environment around us.

We try to if you predict, we try to stay what's really relevant investors, which is the near term path, the long term path. We have about a two point zero zero percent one point ninety three percent net margin. That's a percentage spread that should move back to two point two to two point three that will happen over time. The path of that will be determined by all the different things going on the environment around us.

But we are growing or and I not very many people are.

But we are growing or and I not very many people are.

So we grew from the second quarter to the third quarter into what people grow from the third quarter to fourth quarter.

So we grew from the second quarter to the third quarter into what people grow from the third quarter to fourth quarter.

That's unusual. Most people are flat to down, and we're starting to grow.

That's unusual. Most people are flat to down, and we're starting to grow.

We really strong numbers both on income and on margin. Is that sustainable?

We really strong numbers both on income and on margin. Is that sustainable?

Well?

Well?

Yes, and that we're actually running up margins that are actually underneath our typical margins larger because an editored income has to spread back out, and so as that moves up, we can get back to operating leverage for five years in a row where you had operating life average before the pandemic, and then a couple of years in the pandemic, and then we picked it up for about six or seven quarters.

Yes, and that we're actually running up margins that are actually underneath our typical margins larger because an editored income has to spread back out, and so as that moves up, we can get back to operating leverage for five years in a row where you had operating life average before the pandemic, and then a couple of years in the pandemic, and then we picked it up for about six or seven quarters.

We've got to get back and operating levers.

We've got to get back and operating levers.

How you grow in your revenue a little bit faster in your expenses, not a lot faster, just a little bit faster. And as NII kicks in and the loan deposits kick in, and a three point three trillion.

How you grow in your revenue a little bit faster in your expenses, not a lot faster, just a little bit faster. And as NII kicks in and the loan deposits kick in, and a three point three trillion.

Dollars bounteet, you know, that's what drives it.

Dollars bounteet, you know, that's what drives it.

So we earned about you know, six point nine billion after tax for one of the few companies that's earned that much money many years in a roads is our tenth year earn more than fifteen billion dollars after tax. All good stuff, but the rowity is we still have a lot more on these growth ahead of us.

So we earned about you know, six point nine billion after tax for one of the few companies that's earned that much money many years in a roads is our tenth year earn more than fifteen billion dollars after tax. All good stuff, but the rowity is we still have a lot more on these growth ahead of us.

What are you saying when it comes to deals? Confidence?

What are you saying when it comes to deals? Confidence?

You know brought a capital market activity at the moment. Do you feel like it's going to be an acceleration into the end of the year or maybe a slow down?

You know brought a capital market activity at the moment. Do you feel like it's going to be an acceleration into the end of the year or maybe a slow down?

I just fort the deck.

I just fort the deck.

Capital markets are aggressive, you know, strong, and there's a lot of issue that's going on. We just issue today and everybody that's going on the equity capital markets.

Capital markets are aggressive, you know, strong, and there's a lot of issue that's going on. We just issue today and everybody that's going on the equity capital markets.

It's some good views of what some IPOs are getting done. You're starting to see it set up.

It's some good views of what some IPOs are getting done. You're starting to see it set up.

It appears the IPO calendar will be strong for profit making companies going public because investors are sitting a lot of cash and the IPOs over the last six twelve.

It appears the IPO calendar will be strong for profit making companies going public because investors are sitting a lot of cash and the IPOs over the last six twelve.

Months have worked.

Months have worked.

In other words, they come out to the market and gone the right direction. Therefore, investors are getting confidence at the quality of companies and what they see. We think there's a pretty good prospect for that on a go forward basis. On m and as it's solid, but with a certainly around the world on regulatory policy, getting deals done, to pace at which you can get deals done, and whether it's in Europe, in the US or other places, all this has slowed the activity down.

In other words, they come out to the market and gone the right direction. Therefore, investors are getting confidence at the quality of companies and what they see. We think there's a pretty good prospect for that on a go forward basis. On m and as it's solid, but with a certainly around the world on regulatory policy, getting deals done, to pace at which you can get deals done, and whether it's in Europe, in the US or other places, all this has slowed the activity down.

But our clients are sort of chomping the bit.

But our clients are sort of chomping the bit.

They see opportunity, they see opportunity to buy companies and increase the quality their platform. And so there's a good pipeline. It's just that we've got to make sure that it gets done.

They see opportunity, they see opportunity to buy companies and increase the quality their platform. And so there's a good pipeline. It's just that we've got to make sure that it gets done.

And the central bank cycle certainly helps in restoring some of that confidence.

And the central bank cycle certainly helps in restoring some of that confidence.

Right.

Right.

What about politics, So.

What about politics, So.

Do you get a sense that maybe people are staying by the sidelines now until the outcome post November.

Do you get a sense that maybe people are staying by the sidelines now until the outcome post November.

Is better better zone?

Is better better zone?

I think if you think about what's really affecting the small medium sized business in the United States and other countries, as you had this rapid increase in rates, because the US has a fixed income, a fixed mortgage market, it really doesn't affect landowners act quickly.

I think if you think about what's really affecting the small medium sized business in the United States and other countries, as you had this rapid increase in rates, because the US has a fixed income, a fixed mortgage market, it really doesn't affect landowners act quickly.

It takes time to get through that.

It takes time to get through that.

Auder loans go up, credit cards go up, but they're already pretty healthy rates. So it does affect consumers on the rate structure when it goes up, confidence wise, opportunity wise. It really affects small medium sized businesses. If your base rate, so for was fifty basis points and now it's five and a half, that difference is all cost of funds for them to borrow, So that's had more of a damper under activity than anything else. Are they waiting for election to get done so they can figure out what the policy is going to be under whatever administry?

Auder loans go up, credit cards go up, but they're already pretty healthy rates. So it does affect consumers on the rate structure when it goes up, confidence wise, opportunity wise. It really affects small medium sized businesses. If your base rate, so for was fifty basis points and now it's five and a half, that difference is all cost of funds for them to borrow, So that's had more of a damper under activity than anything else. Are they waiting for election to get done so they can figure out what the policy is going to be under whatever administry?

It's going to be a new administration, frankly on both sides, right, because yeah.

It's going to be a new administration, frankly on both sides, right, because yeah.

Even though vice president here was a vice president now shieldly president or Donald Trump has been out office for four years who were back being president. So both those policy platforms are not well understood by businesses. But the big driver of their reluctance has been waiting to make sure a final demand state in waiting to make sure the rates structure came down for their activity. So they're not using their lines as so they were in normal times, and that's part because the costum is higher, so you're going to be more assure the outcome. Are they investing capital, Yes, but not as strong as they will as the rate structure comes down, does.

Even though vice president here was a vice president now shieldly president or Donald Trump has been out office for four years who were back being president. So both those policy platforms are not well understood by businesses. But the big driver of their reluctance has been waiting to make sure a final demand state in waiting to make sure the rates structure came down for their activity. So they're not using their lines as so they were in normal times, and that's part because the costum is higher, so you're going to be more assure the outcome. Are they investing capital, Yes, but not as strong as they will as the rate structure comes down, does.

Recession Bristowster replay or is that in the background. Now do you think if the lipmarkle holds up, it's going to be okay? Yeah.

Recession Bristowster replay or is that in the background. Now do you think if the lipmarkle holds up, it's going to be okay? Yeah.

With an unemployment rate at four percent plus four to one, with a wage growth rate of three percent, and with inflation down around three percent, it is really hard to have an economist convince the world that there's going to be a recession.

With an unemployment rate at four percent plus four to one, with a wage growth rate of three percent, and with inflation down around three percent, it is really hard to have an economist convince the world that there's going to be a recession.

Now, none of that takes an account. All the prey to horror was it could go on a given day.

Now, none of that takes an account. All the prey to horror was it could go on a given day.

The escalation of physical wars, trade wars, bad policy of the fiscal situation in countries percolating more.

The escalation of physical wars, trade wars, bad policy of the fiscal situation in countries percolating more.

Those are all things that could happen.

Those are all things that could happen.

But if you look at it from standpoint United States, people are working, they're getting paid, and they're spending money. And that's a virtuous circle because when they spend money, that means people are working, and so.

But if you look at it from standpoint United States, people are working, they're getting paid, and they're spending money. And that's a virtuous circle because when they spend money, that means people are working, and so.

That's pretty good.

That's pretty good.

And we resorted a lot of workers over the last few years and put them to work. It is hard to particular recession with this low unemployment and this much wage growth. That doesn't mean it can't happen fast. If people lose confidence, businesses confidence, So what you should be watching is consumer confidence small business confidence, and they're solid. Although they came down a little bit and then when it cut rates, the consumer went up a little bit. The small business is still hanging in there. So let's let's watch that play out of the next few months. If they get confidence that the cost of capital for them from a dead side is coming down, you know they'll move faster. Do you.

And we resorted a lot of workers over the last few years and put them to work. It is hard to particular recession with this low unemployment and this much wage growth. That doesn't mean it can't happen fast. If people lose confidence, businesses confidence, So what you should be watching is consumer confidence small business confidence, and they're solid. Although they came down a little bit and then when it cut rates, the consumer went up a little bit. The small business is still hanging in there. So let's let's watch that play out of the next few months. If they get confidence that the cost of capital for them from a dead side is coming down, you know they'll move faster. Do you.

We talked a little bit around politics and the election. Have you spoken at length with either candidate?

We talked a little bit around politics and the election. Have you spoken at length with either candidate?

We give our advice to everybody, so you know, I think people always ask me, you know what about this? Or you have a desk drawer for candidate A or destroyer for category. We can't do that. Our company's been around since the seventeen eighties, so as I say, there's been a lot of tough elections in United States since then, including that one in eight two hundred, which they made a great play about called Hamilton. I mean, this is the United States goes through this every four years, as your country goes through every three years.

We give our advice to everybody, so you know, I think people always ask me, you know what about this? Or you have a desk drawer for candidate A or destroyer for category. We can't do that. Our company's been around since the seventeen eighties, so as I say, there's been a lot of tough elections in United States since then, including that one in eight two hundred, which they made a great play about called Hamilton. I mean, this is the United States goes through this every four years, as your country goes through every three years.

It's just part of what we do. Is this one different.

It's just part of what we do. Is this one different.

Everyone's different, and our job is to advise the candidates before and after as to what the best policies are for the good of the American economy, in the good of America's role in the world, and we'll do that. We've been doing that for years as CEO, I've worked with even before I CEO, I've worked with presidents on task over the course of time.

Everyone's different, and our job is to advise the candidates before and after as to what the best policies are for the good of the American economy, in the good of America's role in the world, and we'll do that. We've been doing that for years as CEO, I've worked with even before I CEO, I've worked with presidents on task over the course of time.

We'll continue to do it.

We'll continue to do it.

A lot of your peers have endorsed a candidate. Do you have a view whose policies might be better for the economy.

A lot of your peers have endorsed a candidate. Do you have a view whose policies might be better for the economy.

We'd have a view of that, but it has nothing to do with the doors of candidate. We the United States have to focus on the debt situation we talked about. We have to create the conditions of growth in the core industries we have. And that's not only good for the United States, it's good for the world. If United States is in solid conditions, the rest of the world can adapt to that. And because the size of our consumer economy helps the wrest the world, the size of our business economy helps arrest the world, and we're codepend on them.

We'd have a view of that, but it has nothing to do with the doors of candidate. We the United States have to focus on the debt situation we talked about. We have to create the conditions of growth in the core industries we have. And that's not only good for the United States, it's good for the world. If United States is in solid conditions, the rest of the world can adapt to that. And because the size of our consumer economy helps the wrest the world, the size of our business economy helps arrest the world, and we're codepend on them.

They help us, we help them, So I think I wouldn't get into that.

They help us, we help them, So I think I wouldn't get into that.

It's always the problem that if we say someone's good and someone's bad, somebody overreads what it is. So our job is still stay out, let the American people decide, and then we'll go work to make what's best for America and the world honestly, and what's.

It's always the problem that if we say someone's good and someone's bad, somebody overreads what it is. So our job is still stay out, let the American people decide, and then we'll go work to make what's best for America and the world honestly, and what's.

Best for America is that you working within an administration. I know you get asked this all the time, but is that something that is still an open door.

Best for America is that you working within an administration. I know you get asked this all the time, but is that something that is still an open door.

Our job is to get the private sector to keep driving what we're working here in Australia with the Sustainable Markets Initiative that I work on the ASPEC of King Charles and we worked with him with a bunch of private sector CEOs to help move the transition faster and a cooperative, coalitional willing basis our jobs to work with others and other types of settings to do that. So I do love what I do and I'll keep doing it as long as they'll have me. It's a big week for Australia. We've got both the Royals and Bryan you in town as well.

Our job is to get the private sector to keep driving what we're working here in Australia with the Sustainable Markets Initiative that I work on the ASPEC of King Charles and we worked with him with a bunch of private sector CEOs to help move the transition faster and a cooperative, coalitional willing basis our jobs to work with others and other types of settings to do that. So I do love what I do and I'll keep doing it as long as they'll have me. It's a big week for Australia. We've got both the Royals and Bryan you in town as well.

But I'm glad you.

But I'm glad you.

Talked about the Sustainable State Sustainability Initiative because this has felt like a year that's been quite depressing when it comes to that energy transition.

Talked about the Sustainable State Sustainability Initiative because this has felt like a year that's been quite depressing when it comes to that energy transition.

Do you know from where you sit, where do you view the impetus here.

Do you know from where you sit, where do you view the impetus here.

I would not argue with you that because that's what you read and feel. But the reality is the work that's going on because the commitments companies are made, and then up and driving those commitments, people sort of divorce what you're seeing as the AI revolution hits all these initiatives to use clean energy or even clean nuclear energy and restarting you know, nuclear plants or small body of the nuclear or solar or wind. You know, all these activities are going on strong and so well, you know, well people are debating about this and more the public. Meanwhile, you've gone from literally three or four offshore windmills operating the United States to about fifteen or twenty now and a bunch of them approved, and they're going on the ground. We do we do several billion dollars of tax credit deals in the United States. So the investment rate today, the financing rate. We committed to train and a half dollars to fund around trillion dollars to fund around the environmental change for about four hundred billion. Our clients are demanding it. That activity is going on, and they're all working a thousand different ways on driving it. And so I think despite the debate about you know, the public setting and stuff. We believe that oil and gas and things like that are critical, and we believe that green energy is We've got to make it all work together in a country like Australia has that. You see it play out in front the page of papers with the energy some are going on. It's that classic dog. We got to keep good energy, we've got to keep good power. We've got to keep the economies going. At the same time, we've got to make a transition, and the private sector is driving that. So I don't get to press at all. The amount of activity I see is unbelievable.

I would not argue with you that because that's what you read and feel. But the reality is the work that's going on because the commitments companies are made, and then up and driving those commitments, people sort of divorce what you're seeing as the AI revolution hits all these initiatives to use clean energy or even clean nuclear energy and restarting you know, nuclear plants or small body of the nuclear or solar or wind. You know, all these activities are going on strong and so well, you know, well people are debating about this and more the public. Meanwhile, you've gone from literally three or four offshore windmills operating the United States to about fifteen or twenty now and a bunch of them approved, and they're going on the ground. We do we do several billion dollars of tax credit deals in the United States. So the investment rate today, the financing rate. We committed to train and a half dollars to fund around trillion dollars to fund around the environmental change for about four hundred billion. Our clients are demanding it. That activity is going on, and they're all working a thousand different ways on driving it. And so I think despite the debate about you know, the public setting and stuff. We believe that oil and gas and things like that are critical, and we believe that green energy is We've got to make it all work together in a country like Australia has that. You see it play out in front the page of papers with the energy some are going on. It's that classic dog. We got to keep good energy, we've got to keep good power. We've got to keep the economies going. At the same time, we've got to make a transition, and the private sector is driving that. So I don't get to press at all. The amount of activity I see is unbelievable.

I want to know how much you can sustain that energy for in terms of being, of course, already one of the longest held roles on Wall Street, and you've been around for a long time and also happy Bertha. I know that you turn sixty five and this month. How long do you plan on sticking around for?

I want to know how much you can sustain that energy for in terms of being, of course, already one of the longest held roles on Wall Street, and you've been around for a long time and also happy Bertha. I know that you turn sixty five and this month. How long do you plan on sticking around for?

Foresee?

Foresee?

Well, I said until the board.

Well, I said until the board.

I serve at the on a day day basis for the board, and my planners will continue to working for a substantial period of time here to help the team along. But the real job I have is to continue to build a team that will succeed me because this company.

I serve at the on a day day basis for the board, and my planners will continue to working for a substantial period of time here to help the team along. But the real job I have is to continue to build a team that will succeed me because this company.

Is to succession. Can you give us any names?

Is to succession. Can you give us any names?

No, No, we wouldn't do that. That's not for public consumption.

No, No, we wouldn't do that. That's not for public consumption.

But we have a plan and we work on it all the time, and it ebbs and flows and people come in and out. But the idea is, it's not just the CEO, it's the whole management team and who will be there for that CEO to rely on, to like and drive the company forward. And so we're here for a moment in time. Our company's been here for two hundred and forty years almost, and so it'll go on for another several hundreds and hundreds of years.

But we have a plan and we work on it all the time, and it ebbs and flows and people come in and out. But the idea is, it's not just the CEO, it's the whole management team and who will be there for that CEO to rely on, to like and drive the company forward. And so we're here for a moment in time. Our company's been here for two hundred and forty years almost, and so it'll go on for another several hundreds and hundreds of years.

And so the idea is, we moved the.

And so the idea is, we moved the.

Woodpile and hopefully met left a little bigger, and we got to leave. One of the pieces that's got to be bigger is another management capability across not only the CEO, but the rest of the team.

Woodpile and hopefully met left a little bigger, and we got to leave. One of the pieces that's got to be bigger is another management capability across not only the CEO, but the rest of the team.

One last question is speaking of Stalwart's Warren Barfett continues to reduce his dake in Bank of America.

One last question is speaking of Stalwart's Warren Barfett continues to reduce his dake in Bank of America.

Have you spoken team, No, it's because it wouldn't be right to speak to him about his share ownership when he owns that much of the company.

Have you spoken team, No, it's because it wouldn't be right to speak to him about his share ownership when he owns that much of the company.

But he's been a great investor.

But he's been a great investor.

He invested seven hundred million dollars or seven hundred million shares in twenty eleven and bought another three hundred million, and I think he isn't talking about it. We wouldn't talk about it, but he's been a great support of our company and we benefit by that support.

He invested seven hundred million dollars or seven hundred million shares in twenty eleven and bought another three hundred million, and I think he isn't talking about it. We wouldn't talk about it, but he's been a great support of our company and we benefit by that support.

Ran so great to have you with us, and thank you so much for joining us here in Sydney. Brian Oneahan, who's a chairman and CEO at the Bank of America.

Ran so great to have you with us, and thank you so much for joining us here in Sydney. Brian Oneahan, who's a chairman and CEO at the Bank of America.

Bloomberg Opinion informed perspectives and expert data driven commentary on breaking news.

Bloomberg Opinion informed perspectives and expert data driven commentary on breaking news.

It's time to check in with Bloomberg Opinion, and we are joined now by Bloomberg Opinion columnist Juli Wren, who has been writing about the stimulus programs in China. Suly is joining us from our studios in Hong Kong. So you write that debt restructuring basically is a central part of everything that Beijing is trying to do right now, and investors should be patient and sophisticated.

It's time to check in with Bloomberg Opinion, and we are joined now by Bloomberg Opinion columnist Juli Wren, who has been writing about the stimulus programs in China. Suly is joining us from our studios in Hong Kong. So you write that debt restructuring basically is a central part of everything that Beijing is trying to do right now, and investors should be patient and sophisticated.

Explain that to me, Well, this roundness stimulus is going to be very, very different from what we saw in tand A and twenty fifteen, two thousand and eight, after the global financial crisis, China basically launched a whole bunch of infrastructure projects and then provide a job for micro workers. And twenty fifteen they did this shantytown redevelopment program, basically tearing down all buildings and paying off the urban villagers of farmers and who in turn had money to spend, et cetera. And this time, Uh, the previous two times it was easy, right, like to come up with a stimulus number. We just launched a bunch of projects and tear down a bunch of buildings, and let's see how much how much money we need and then like if it's not enough, they will add out. But this time it's very different because with that restruction, as we have seen in the past in China and the US, it always takes a long time, Like especially for complicated businesses. First of all, you need to know how much that, especially in China, hidden that there is in the first place, right, Like, one issue with China's economy this year is a physical austerity. Local governments. In the past, they were major stimulants in the economy. They they were they were boothsto uh you know, infrastructure spending, using all sorts of stimulus measures to to help with the local economies, right, and this year they're doing nothing because first of all, lens sales are way down because the property downturn, and secondly they're busy repaying interest on their previous debt.

Explain that to me, Well, this roundness stimulus is going to be very, very different from what we saw in tand A and twenty fifteen, two thousand and eight, after the global financial crisis, China basically launched a whole bunch of infrastructure projects and then provide a job for micro workers. And twenty fifteen they did this shantytown redevelopment program, basically tearing down all buildings and paying off the urban villagers of farmers and who in turn had money to spend, et cetera. And this time, Uh, the previous two times it was easy, right, like to come up with a stimulus number. We just launched a bunch of projects and tear down a bunch of buildings, and let's see how much how much money we need and then like if it's not enough, they will add out. But this time it's very different because with that restruction, as we have seen in the past in China and the US, it always takes a long time, Like especially for complicated businesses. First of all, you need to know how much that, especially in China, hidden that there is in the first place, right, Like, one issue with China's economy this year is a physical austerity. Local governments. In the past, they were major stimulants in the economy. They they were they were boothsto uh you know, infrastructure spending, using all sorts of stimulus measures to to help with the local economies, right, and this year they're doing nothing because first of all, lens sales are way down because the property downturn, and secondly they're busy repaying interest on their previous debt.

So we need to figure out first.

So we need to figure out first.

How much debt and hidden that there is, and that means a rough ordit at least, right, we need to know the denominator before we can come up with the nominator.

How much debt and hidden that there is, and that means a rough ordit at least, right, we need to know the denominator before we can come up with the nominator.

Truly, why do you think it's taken the government so long to react to a problem that we have been talking about for months, if not years.

Truly, why do you think it's taken the government so long to react to a problem that we have been talking about for months, if not years.

I think everyone has this procrastination issue, right, Like, you know, this is a really big problem. And in the last two years, if you see, like the central government was pretty insistent on having local governments resolve their own debt problem themselves. They they say, okay, you can issue special refinancing bonds and to like do death swaps and then have the capital markets, get capital markets engaged. But the central government was just not willing to help because partly because they know how much problem there is and no one wants to deal with it. And another possibility is that they don't want to have this moral hazard problem down the road. President Jing actually, to his credit, a decade ago, he did clean up local government debt. There was a major debt swap that was a decade ago, and he thought this problem was being resolved, but it wasn't, and then local governments kept pounder borrowing. Right now we're back to ground zero, actually worse than before. So he probably didn't want to have a moral hazard problem. And also the current death power is a lot bigger than a decade ago, simply because China's economy is so much bigger.

I think everyone has this procrastination issue, right, Like, you know, this is a really big problem. And in the last two years, if you see, like the central government was pretty insistent on having local governments resolve their own debt problem themselves. They they say, okay, you can issue special refinancing bonds and to like do death swaps and then have the capital markets, get capital markets engaged. But the central government was just not willing to help because partly because they know how much problem there is and no one wants to deal with it. And another possibility is that they don't want to have this moral hazard problem down the road. President Jing actually, to his credit, a decade ago, he did clean up local government debt. There was a major debt swap that was a decade ago, and he thought this problem was being resolved, but it wasn't, and then local governments kept pounder borrowing. Right now we're back to ground zero, actually worse than before. So he probably didn't want to have a moral hazard problem. And also the current death power is a lot bigger than a decade ago, simply because China's economy is so much bigger.

It is much bigger. And you've been covering the credit space for some time. Do you think is your instinct that this is going to be successful or is it just simply too early to tell. You talked about the fact that this needs to unfold over years. Can you say, based on the design the makeup of this restructuring that it has the tendency maybe to win at the end of the day.

It is much bigger. And you've been covering the credit space for some time. Do you think is your instinct that this is going to be successful or is it just simply too early to tell. You talked about the fact that this needs to unfold over years. Can you say, based on the design the makeup of this restructuring that it has the tendency maybe to win at the end of the day.

I think she has done it once and he can do it again. Last time in twenty fourteen when they did death swap to clear up a local government that it told them like about half a year to a month to do the full audit, and then they will say, Okay, this province has so much that and we'll try to do some kind of swap so it can be done. But currently, you know, star market is expecting some stimulus number, big number, likely the next month or so. I just don't think that's going to happen.

I think she has done it once and he can do it again. Last time in twenty fourteen when they did death swap to clear up a local government that it told them like about half a year to a month to do the full audit, and then they will say, Okay, this province has so much that and we'll try to do some kind of swap so it can be done. But currently, you know, star market is expecting some stimulus number, big number, likely the next month or so. I just don't think that's going to happen.

So it's interesting because one of the other things been happening on the macro level is that China has been stuck in deflation. And I'm just wondering whether or not when you issue something like this an intention to restructure debt, whether that's going to just mean that we're likely to drift sideways in more of a deflationary trap for some time.

So it's interesting because one of the other things been happening on the macro level is that China has been stuck in deflation. And I'm just wondering whether or not when you issue something like this an intention to restructure debt, whether that's going to just mean that we're likely to drift sideways in more of a deflationary trap for some time.

I think it's it's actually the same problem. I mean, if the local governments are so indebted that they cannot stimulate the economy, how can the economy come back up? Right Like, when we say you have deflation, you need monetary measures and the physical measures, and right now there's only monetoring, no fiscal.

I think it's it's actually the same problem. I mean, if the local governments are so indebted that they cannot stimulate the economy, how can the economy come back up? Right Like, when we say you have deflation, you need monetary measures and the physical measures, and right now there's only monetoring, no fiscal.

What about what happens in the marketplace, How are credit markets reacting right now? And what can we learn when you look at the behavior of particularly distress debt.

What about what happens in the marketplace, How are credit markets reacting right now? And what can we learn when you look at the behavior of particularly distress debt.

So the credit market is moving a little bit, but the credit some say that credit investors have more bring than the stock investors. The stock investors have all the heart, and we've seen that already, right, So the credit market is moving a bit, but not as much as the stock market because.

So the credit market is moving a little bit, but the credit some say that credit investors have more bring than the stock investors. The stock investors have all the heart, and we've seen that already, right, So the credit market is moving a bit, but not as much as the stock market because.

As usual, like credit investors, they.

As usual, like credit investors, they.

Know how.

Know how.

Dragged out that restructure can be. Like it is, you need a lot of patients, and it moves slowly.

Dragged out that restructure can be. Like it is, you need a lot of patients, and it moves slowly.

Well, you mentioned the equity market, and I'm wondering if one of the challenges here is to try to improve sentiment, isn't a higher stock market kind of a prerequisite for that.

Well, you mentioned the equity market, and I'm wondering if one of the challenges here is to try to improve sentiment, isn't a higher stock market kind of a prerequisite for that.

I think that's perhaps the government's intent. I mean, a lot of Chinese household state don't own stock, so it doesn't affect them directly, but it does affect the entrepreneur's mindset, right, Like if you're a majority shareholder of a smallish company, a smallish listed company, and your store price is doing well, then you will feel like, Okay, I have the confidence to go invest or hire people.

I think that's perhaps the government's intent. I mean, a lot of Chinese household state don't own stock, so it doesn't affect them directly, but it does affect the entrepreneur's mindset, right, Like if you're a majority shareholder of a smallish company, a smallish listed company, and your store price is doing well, then you will feel like, Okay, I have the confidence to go invest or hire people.

So maybe that.

So maybe that.

Kind of wealth effect can perhaps boost confidence in the private sector quick.

Kind of wealth effect can perhaps boost confidence in the private sector quick.

So much of what we know to be the problems for these local governments is very closely tied to the problems of the property market. What is your sense now when you look at the housing market overall, is a bottom in place right now? Are we beginning to see that process?

So much of what we know to be the problems for these local governments is very closely tied to the problems of the property market. What is your sense now when you look at the housing market overall, is a bottom in place right now? Are we beginning to see that process?

I think some cities could have buttoned.

I think some cities could have buttoned.

I mean, but it all depends on the characteristics of these cities, and it's very similar to what we're seeing in the US, like I say, San Francisco VERSUS Phoenix City, et cetera. Like, for instance, Shanghai, the luxury segment of Shanghai's property market is doing well because it is China's best city and all the rich people want to own property there.

I mean, but it all depends on the characteristics of these cities, and it's very similar to what we're seeing in the US, like I say, San Francisco VERSUS Phoenix City, et cetera. Like, for instance, Shanghai, the luxury segment of Shanghai's property market is doing well because it is China's best city and all the rich people want to own property there.

Or if you go to trans some cities are doing well, but I think a lot of cities they have not buttoned.

Or if you go to trans some cities are doing well, but I think a lot of cities they have not buttoned.

We just saw this week the big We just saw this week that the big banks in China reduced their loan prime rates. Do you think that's going to have a meaningful impact as we work through this process of debt restructuring and kind of economic revitalization.

We just saw this week the big We just saw this week that the big banks in China reduced their loan prime rates. Do you think that's going to have a meaningful impact as we work through this process of debt restructuring and kind of economic revitalization.

The PBOC government punk function said that the lowering mortgage rate will affect fifty million households China.

The PBOC government punk function said that the lowering mortgage rate will affect fifty million households China.

I don't know how many households China has but I guess.

I don't know how many households China has but I guess.

Some around two hundred and fifty to three hundred million, right, because we have over over one billion people and the one child policy, et cetera. So the point is that the only perhaps thirty percent of the households have mortgage that and that a lot of other households they basically have no debt because they bought early right and they paid it off. So this kind of wealth effect is limited because people who have known that but already owned their housing, they don't see any benefit from the mortgage raacup, what is.

Some around two hundred and fifty to three hundred million, right, because we have over over one billion people and the one child policy, et cetera. So the point is that the only perhaps thirty percent of the households have mortgage that and that a lot of other households they basically have no debt because they bought early right and they paid it off. So this kind of wealth effect is limited because people who have known that but already owned their housing, they don't see any benefit from the mortgage raacup, what is.

The biggest concern that you have right now as to whether or not Beijing will succeed.

The biggest concern that you have right now as to whether or not Beijing will succeed.

I'm not sure that the bureaucracy works as well as before. China in the past could be very efficient if it wanted to, but right now, the local governments they.

I'm not sure that the bureaucracy works as well as before. China in the past could be very efficient if it wanted to, but right now, the local governments they.

Are quite sleepy, and the people are very afraid of.

Are quite sleepy, and the people are very afraid of.

Doing things because they don't want to get caught up in this anti corruption campaign. So I'm afraid that the top down directive is clear, but the execution could be a problem.

Doing things because they don't want to get caught up in this anti corruption campaign. So I'm afraid that the top down directive is clear, but the execution could be a problem.

We'll leave it there, surely. It's always a pleasure. Thanks so much for making time to chat with us. Bloomberg's Shuley Wren, who is an opinion columnist for Bloomberg. And if you want to read more of Shuley's writing and you have a Bloomberg terminal, the function is OPI n go. This is Bloomberg day Break Asia, your morning brief on the stories making news from Hong Kong to Singapore and Wall Street. Look for us on your podcast feed every day, on Apple, Spotify, and anywhere else you get your podcast. Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus. Listen coast to coast on the Bloomberg Business app, siriusxmpth iHeartRadio app, and on Bloomberg dot Com. I'm Doug Chrisner. Join us again tomorrow for all the news you need to start your day right here on Bloomberg day Break Asia

We'll leave it there, surely. It's always a pleasure. Thanks so much for making time to chat with us. Bloomberg's Shuley Wren, who is an opinion columnist for Bloomberg. And if you want to read more of Shuley's writing and you have a Bloomberg terminal, the function is OPI n go. This is Bloomberg day Break Asia, your morning brief on the stories making news from Hong Kong to Singapore and Wall Street. Look for us on your podcast feed every day, on Apple, Spotify, and anywhere else you get your podcast. Our flagship New York station is also available on your Amazon Alexa devices. Just say Alexa Play Bloomberg eleven thirty plus. Listen coast to coast on the Bloomberg Business app, siriusxmpth iHeartRadio app, and on Bloomberg dot Com. I'm Doug Chrisner. Join us again tomorrow for all the news you need to start your day right here on Bloomberg day Break Asia