Charles Dumas, Research Director, Lombard Street Research LTD.

(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)

CHARLES DUMAS, RESEARCH DIRECTOR, LOMBARD STREET RESEARCH LTD, TALKS ABOUT EUROPE AT BLOOMBERG SURVEILLANCE

MARCH 23, 2011

SPEAKERS: TOM KEENE, BLOOMBERG SURVEILLANCE HOST

CHARLES DUMAS, RESEARCH DIRECTOR, LOMBARD STREET RESEARCH LTD

8:52

TOM KEENE, BLOOMBERG SURVEILLANCE HOST: Let's go to Charles Dumas, Lombard Street Research. Good morning, sir.

CHARLES DUMAS, RESEARCH DIRECTOR, LOMBARD STREET RESEARCH LTD.: Hello, how are you?

KEENE: Well, we're very good. So much going on in Europe. We see Osborne with a set of headlines. Is austerity working for the United Kingdom?

DUMAS: Well, in the sense that Osborne is concerned with maybe that the gilded securities continue to be bought in large quantities at low yields, yes. And that was his main thing was to avoid a national crisis.

But, of course, the danger is - the risk is that once the world starts to slow down, which, by the way, I don't expect this year, once the world starts to slow down seriously then Britain will go back into recession.

KEENE: What are you watching in Portugal today? What are you looking for as we see Irish yields explode higher?

DUMAS: Yes, well, I mean Ireland is reflecting the Portuguese story and the Portuguese are getting shaky jakey and actually have to wait for this afternoon for the parliamentary vote I think there.

But they are getting shaky jakey about supporting the austerity program by Prime Minister Socrates. And without a government, you can't really have an austerity program. Without an austerity program, the whole premise of this rescue business (inaudible) goes away and Ireland, of course, from this standpoint is in the boat with the government.

So people are just sort of saying, hey, wait a second, the three small peripherals - let's say Greece, Portugal and Ireland - are now looking (inaudible). There is no great pressure on (inaudible) because (inaudible) are happening in Greece anyway.

KEENE: Yes.

DUMAS: And the Spanish have kept people quiet by adopting an austerity program.

KEENE: Well, let's leave -

DUMAS: So (inaudible) -

KEENE: We're going to have to leave it there, Charles. Thank you so much. Charles Dumas, sorry to cut him off, folks, but we've got to get here to the top of the hour as well. Charles Dumas with Lombard Street Research.

And I love the idea there the word premise because that is what this has all been. It has been politics, politics, politics, politics. And like the Irish vote, I mean the headline here is without question as Peter Boockvar said about 11:00 am New York time it's just simple, Portugal gets to vote if they want to play.

8:54

***END OF TRANSCRIPT***

THIS TRANSCRIPT MAY NOT BE 100% ACCURATE AND MAY CONTAIN MISSPELLINGS AND OTHER INACCURACIES. THIS TRANSCRIPT IS PROVIDED "AS IS," WITHOUT EXPRESS OR IMPLIED WARRANTIES OF ANY KIND. BLOOMBERG RETAINS ALL RIGHTS TO THIS TRANSCRIPT AND PROVIDES IT SOLELY FOR YOUR PERSONAL, NON-COMMERCIAL USE. BLOOMBERG, ITS SUPPLIERS AND THIRD-PARTY AGENTS SHALL HAVE NO LIABILITY FOR ERRORS IN THIS TRANSCRIPT OR FOR LOST PROFITS, LOSSES OR DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THE FURNISHING, PERFORMANCE, OR USE OF SUCH TRANSCRIPT. NEITHER THE INFORMATION NOR ANY OPINION EXPRESSED IN THIS TRANSCRIPT CONSTITUTES A SOLICITATION OF THE PURCHASE OR SALE OF SECURITIES OR COMMODITIES. ANY OPINION EXPRESSED IN THE TRANSCRIPT DOES NOT NECESSARILY REFLECT THE VIEWS OF BLOOMBERG LP.

[Copy: Content and programming copyright 2011 BLOOMBERG, LP. ALL RIGHTS RESERVED. Copyright 2011 CQ-Roll Call, Inc. All materials herein are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of CQ-Roll Call. You may not alter or remove any trademark, copyright or other notice from copies of the content.]

For more Bloomberg Multimedia see {AV [GO]}